saudi pak insurance · chartered accountants, karachi. registered office saudi pak tower islamabad....

Saudi Pak Insurance Annual Report 2007

01

Board of DirectorsMuhammad Rashid Zahir ChairmanJaved Masud DirectorMansoor M. Khan DirectorM. Naim Farooqui DirectorFarrukh S. Ansari DirectorZulfiqar Hussain DirectorAftab Iqbal Khan DirectorCapt. Azhar Ehtesham Ahmed Managing Director & CEO

Audit CommitteeJaved MasudFarrukh S. AnsariZulfiqar Hussain

CFO & Company SecretaryNaveed Zafar Mirza

AuditorsAnjum Asim Shahid RahmanChartered Accountants, Karachi.

Registered OfficeSaudi Pak TowerIslamabad.Ph # (051) 111-222-003Fax # (051) 111-222-004

Head Office2nd Floor,State Life Building No. 2-AWallace RoadKarachi-74000UAN: 111-774-111Fax # (021) 2417885

orporate InformationC

anagement

Managing Director &Chief Executive OfficerCapt. Azhar Ehtesham Ahmed

General ManagerShaheen H. Sumar

CFO & Company SecretaryNaveed Zafar Mirza

Assistant General ManagersBadar Rahat SiddiquiAsad NazirChoudhry Waqar AhmedMuhammad Aslam Rajput

Shakil Ahmed Claim Advisor Head Office

Malik Farooq Mustafa Chief Manager Faisalabad Branch

Ch. Javed Aslam Chief Manager Regional Office, Lahore

Irtiza Abbas Kazmi Deputy Chief Manager Head Office - Motor & Marine

Tariq Mushtaq Deputy Chief Manager Head Office - Fire & Misc.

Mahmood Hassan Khan Deputy Chief Manager Head Office - Claims

Arsalaan Khalid Deputy Chief Manager Head Office - Internal Audit

Muhammad Rafiq Ghoor Deputy Chief Manager M. A. Jinnah Road Branch, Karachi

Abdul Haleem Deputy Chief Manager Rawalpindi Branch

Mohammad Anees Qureshi Manager Hyderabad Branch

Shamshair Ahmed Babar Manager I. I. Chundrigar Road Branch, Karachi

Mohammad Adeel Ishtiaq Manager Head Office - Reinsurance

Saquib Obaid-ur-Rehman Manager Head Office - I.T

Azim Arfi Manager M. A. Jinnah Road Branch, Karachi

Muhammad Riaz Manager Peshawar Branch

Kamran Hafeez Shaikh Manager Sialkot Branch

Asim Majeed Manager Islamabad Branch

M


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06

NOTICE OF THE ANNUAL GENERAL MEETING

Notice is hereby given that the third Annual General Meeting of Saudi Pak Insurance Company Limitedwill be held on Saturday, March 29, 2008 at 12:00 noon at 19th Floor, Saudi Pak Tower, Islamabad totransact the following business:-

1. To confirm the minutes of the second Annual General Meeting held on April 26, 2007.

2. To receive, consider and adopt the audited Accounts for the year ended December 31, 2007alongwith the Directors’ and Auditors’ reports thereon.

3. To appoint Auditors and fix their remuneration.

4. To transact any other business with the permission of the Chair.

By Order of the Board

Karachi : March 05, 2008 Naveed Zafar MirzaCompany Secretary

NOTES:

i. The Share Transfer Books of the Company will remain closed from March 22, 2008to March 29, 2008 (both days inclusive).

ii. A member entitled to attend and vote at the Annual General Meeting may appointanother member as a proxy to attend and vote instead of him / her save that a companybeing a member of this Company may appoint as proxy or as its representative underSection 162 of the Ordinance any person though not a member of the Company, andthe person so appointed shall be entitled to exercise the same powers on behalf ofthe company which he represents, as if he was an individual member of the Company.

iii. The instrument appointing a proxy shall be lodged with the Company Secretary notless than 48 hours before the time fixed for the Meeting. A member shall not beentitled to appoint more than one proxy. If a member appoints more than one proxyand more than one instruments of proxy are deposited by a member with the Company,all such instruments of proxy shall be rendered invalid.

CHAIRMAN’S MESSAGE

I am pleased to present audited financial statements of Saudi Pak Insurance Company Limited forthe year ended December 31, 2007.

In the year 2007, the economic activity in the country slowed down owing to political uncertaintybecause of the impending parliamentary elections. Notwithstanding, the Company underwrote grosspremium of Rs. 275 million indicating growth of 19 percent.

Under the lead of SCOR-RE of France, the Company further strengthened its bilateral relations withthe panel of Reinsurers. Terms of our treaty showed improvement. Two new players - Kuwait Reof Kuwait and Trust International of Bahrain were inducted during the year. The reinsurancearrangements now reflect a more balanced picture.

The paid up capital of the Company stood at Rs. 250 million. With enhanced capitalization throughright issue, and the branch network spread across the country, Saudi Pak Insurance is now betterplaced to provide insurance services to its customers.

The year 2007 ended on a sad note with the tragic incident of December 27, 2007, resulting inenormous losses to property. The entire insurance sector was hit hard by the event. Saudi PakInsurance showed admirable resilience and managed to sustain these losses owing to adequatereinsurance support and sound financial backing.

Pakistan is passing through an important phase of economic development, with the return of politicalstability and improved business environment after the elections of February 2008, the Company willstrive to increase its share in the growing market for general insurance in the country.

I would like to thank the Securities and Exchange Commission of Pakistan for their professionalguidance and our valued customers for their continued support. I also recognize and commend theefforts of the Board of Directors, management and staff for their commitment and hard work.

Muhammad Rashid ZahirChairman

KarachiMarch 4, 2008


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DIRECTORS’ REPORT TO THE SHAREHOLDERS

It is my privilege to present, on behalf of the Board, the 3rd Annual Report and the Audited Financial Statement ofSaudi Pak Insurance Company Limited for the year ended December 31, 2007.

The year 2007 was second full year of operation of the Company. Growth of around 50 percent was expected in linewith our pace of progress in 2006. However, due to some unexpected changes in political scenario, the economicactivity was affected adversely resulting into enhanced claims, reduction of premium income and weak growth in theconsumer finance and other trading and manufacturing activities. The combined effect was decline in the growth ofpremium from 27 percent to 14 percent for the over all industry. We nevertheless managed to grow at a rate of over19 percent. The gross underwritten premium was Rs. 274.672 million as against 230.049 million in 2006.

A sad event at the end of the year resulted in riots and arson activities in some areas. Besides the loss of extremelyvaluable lives, the financial losses are estimated to be over Rs. 100 billion. The insured losses are estimated at overRs. 5.5 billion. Our Company was no exception. The estimate of losses for that single event are around Rs. 175 millionwhich amounts to 50 percent of the total gross losses for the year. Thanks to our good reinsurance partners who willabsorb a major part of the losses through re-insurance treaties. Some of the above claims have been settled and paidwhereas others are under the process of adjustment and payment.

The breakup of gross premium and financial highlights is as follows:-2007 2006 Rs. Rs.

Premium

Fire and Property Damage 128,197,672 100,321,415Marine Aviation and Transport 15,201,960 14,620,326Motor 118,594,122 101,025,450Miscellaneous 12,679,004 14,082,301

274,672,758 230,049,492

Financial Highlights

Underwriting result (38,795,517) (17,079,707)Investment income 21,387,496 10,841,435Profit/(Loss) before tax (28,978,733) (16,234,456)Profit/(Loss) after tax (29,819,693) (16,764,424)Earning / (Loss) per share (1.19) (0.84)

Claims

Claims, a vital part of the insurance, require careful handling, both in qualitative and quantitative terms. The companyhas maintained a high degree of reputation in expeditious and equitable settlement of the claims of all kinds. The claimdepartment is equipped with professionals of diverse disciplines and experience who are assisted by top line independentloss adjusters for quick disposal of all legitimate claims. The company incurred gross claims of Rs. 366 million asagainst Rs. 87 million in 2006. The net claims rose from Rs. 50 million to Rs. 114 million. A major portion of theseclaims originated from riot losses of Dec 27 event.

Reinsurance Arrangement

The expansion in business necessitated induction of new Re insurance Partners to have a better spread of risk. Thepanel for 2008 was, therefore, modified to include Trust re of Bahrain and Kuwait Re along with the existing Reinsurers. Both of them are good regional securities with sound financial backing.

For the year 2008, R/I Panel, SCOR-Re remains in the lead with Mitsui Sumitomo, BEST-Re, Trust-Re, Kuwait-Reand PRCL in the follow up. The Company maintains good underwriting capacity in all lines of general insurance.

Credit Rating

The Company continues to be rated BBB+ with positive outlook by JCR-VIS Credit Rating Company Limited.


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Pattern of Share-holding

A statement of pattern of shareholding as on December 31, 2007 is annexed with this report.

Board Meetings

During the year 2007, four meetings of the Board of Directors were held and the attendance by each director is givenhereunder:

Name of Directors Total Number of Number of BoardBoard Meetings Meetings attended

Mr. Muhammad Rashid Zahir 4 4Capt. Azhar Ehtesham Ahmed 4 4Mr. Javed Masud 4 3Mr. Mansoor M. Khan 4 2Mr. M. Naim Farooqui 4 3Mr. Farrukh S. Ansari 4 2Mr. Zulfiqar Hussain Shah 1 1 (New appointment)Mr. Aftab Iqbal Khan 4 4Mr. Abdus Samad Khan 1 1 (Resigned)Mr. Abdul Jaleel Shaikh 1 1 (Resigned)

Auditors

M/s. KPMG Taseer Hadi & Company, Chartered Accountants, have offered themselves as the auditors of the Companyfor the year ending December 31, 2008.

Future Outlook

The year 2007 proved to be a tough year for insurance industry as certain unpleasant events dented the profitability ofinsurance companies through increased claims. We hope that 2008 will be better in terms of business and profitabilityfor the insurance sector as a whole.

The current pace of economic growth is expected to be maintained which will offer business opportunities to the insurancesector. The increasing awareness of the businessmen and entrepreneurs to hedge the potential risks will also providean impetus to insurance business. Though the competition is increasing day by day, yet the untapped business willincrease the size of cake to be shared by the insurance companies.

The proposed increase in the paid up capital of the company will strengthen the financial muscles of the company toattract larger transactions and new clientele. Reinsurance plays pivotal role in the success and stability of an insurancecompany. Saudi Pak Insurance Company is well cognizant of this aspect and has been successful in securing satisfactoryRe-insurance Arrangements. With these strengths, Saudi Pak Insurance Company is firmly set on the path of growthand is expected to produce better results in 2008.

Acknowledgement

We are grateful to our re-insurers and brokers particularly to SCOR-Re for their valuable professional services, adviceand support in reinsurance matters. Thanks to our statutory auditors M/s. Anjum Asim Shahid Rahman, CharteredAccountants, for the accomplishment of the audit work within the stipulated time and the Securities and ExchangeCommission of Pakistan as well as State Bank of Pakistan for their guidance and support. We thank our clients for theirpatronage and the share holders for their support. We also thank our employees and the marketing staff for their dedicationand hard work.

For the Board of Directors

Capt. Azhar Ehtesham AhmedManaging Director & CEOMarch 04, 2008

Anjum Asim Shahid RahmanChartered Accountants Grant Thornton

1st & 3rd Floor, Modern Motors HouseBeaumont Road, Karachi 75530T : (92-21) 5672951-56F : (92-21) 5688834W : www.gti,org

Other offices : Islamabad, Lahore.Member of Grant Thornton International 10

AUDITORS’ REPORT TO THE MEMBERS OFSAUDI PAK INSURANCE COMPANY LIMITED

We have audited the annexed financial statements comprising of:-

(i) balance sheet;(ii) profit and loss account;(iii) statement of changes in equity;(iv) statement of cash flows;

of Saudi Pak Insurance Company Limited as at December 31, 2007 together with the notes forming part thereof,for the year then ended.

It is the responsibility of the Company’s Management to establish and maintain a system of internal control, andprepare and present the financial statements in conformity with the approved accounting standards as applicablein Pakistan and the requirements of the Insurance Ordinance, 2000 (XXXIX of 2000) and the Companies Ordinance,1984 (XLVII of 1984). Our responsibility is to express an opinion on these statements based on our audit.

We conducted our audit in accordance with the International Standards on Auditing as applicable in Pakistan.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingpolicies used and significant estimates made by management, as well as, evaluating the overall financial statementspresentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:

a) proper books of accounts have been kept by the Company as required by the Insurance Ordinance, 2000and the Companies Ordinance, 1984;

b) the financial statements together with the notes thereon have been drawn up in conformity with theInsurance Ordinance, 2000 and the Companies Ordinance, 1984, and accurately reflect the books andrecords of the Company and are further in accordance with accounting policies consistently applied;

c) the financial statements together with the notes thereon present fairly, in all material respects, the state ofthe company’s affairs as at December 31, 2007 and of the loss, its cash flows and changes in equity for theyear then ended in accordance with approved accounting standards as applicable in Pakistan and give theinformation required to be disclosed by the Insurance Ordinance, 2000 and the Companies Ordinance, 1984;and

d) no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980.

Karachi: March 04, 2008

(v) statement of premiums;(vi) statement of claims;(vii) statement of expenses; and(viii) statement of investment income

Chartered Accountants


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Note 2007 2006Rupees Rupees

SHARE CAPITAL AND RESERVES

Authorised share capital

50,000,000 (2006: 50,000,000) shares of

Rs. 10 each 500,000,000 500,000,000

Issued, subscribed and paid-up share capital 6 250,000,000 250,000,000

Retained earnings (64,385,262) (34,565,569)

Shareholders’ equity 185,614,738 215,434,431

LIABILITIES

Underwriting provisions

Provision for outstanding claims (including IBNR) 7 297,958,391 43,072,012

Provision for unearned premium 64,287,658 67,366,995

Additional provision for unexpired risk / premium

deficiency reserve 8 3,531,476 –

Commission income unearned 16,532,600 12,728,601

Total underwriting provisions 382,310,125 123,167,608

Creditors and accruals

Premium received in advance 942,710 1,591,319

Premium due to reinsurers 26,984,678 5,796,259

Accrued expenses 347,233 448,446

28,274,621 7,836,024

Other liabilities

Other payables 9 2,545,776 3,528,746

Total liabilities 413,130,522 134,532,378

TOTAL EQUITY AND LIABILITIES 598,745,260 349,966,809

CONTINGENCIES AND COMMITMENTS 10

The annexed notes 1 to 32 form an integral part of these financial statements.

BALANCE SHEETas at December 31, 2007

Note 2007 2006Rupees Rupees

ASSETS

Cash and bank depositsCash and other equivalents 11 364,601 75,828Current and other accounts 12 72,289,347 42,440,997Deposits maturing within 12 months 13 45,630,000 86,630,000

118,283,948 129,146,825

Investments 14 77,090,771 59,459,483

Other assetsPremiums due but unpaid 43,843,039 32,953,656Amount due from other insurers / reinsurers 51,969,930 43,136,149Accrued investment income 15 1,358,952 1,422,665Reinsurance recoveries against outstanding claims 237,768,832 22,045,167Deferred commission expenses 15,167,896 13,772,414Advance tax 16 2,038,922 1,322,465Advances, deposits, prepayments and other receivables 17 13,806,125 6,794,691

365,953,696 121,447,207

Fixed assets - Tangible and intangible 18Tangibles

Office improvement 9,628,873 10,623,428Furniture and fixtures 1,272,709 1,304,118Motor vehicles 19,132,491 19,352,086Office equipment 3,824,311 4,145,751Computer equipment 1,610,323 1,744,050

35,468,707 37,169,433

IntangibleComputer Software 1,948,138 2,743,861

37,416,845 39,913,294

TOTAL ASSETS 598,745,260 349,966,809


Capt. Azhar Ehtesham AhmedChief Executive


Javed MasudDirector

Mansoor M. KhanDirector


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Javed MasudDirector



13

Fire & Marine Motor Total Total Note Property Aviation & Business Misc.

Damage Transport 2007 2006

Revenue Account

Net premium revenue 17,009,909 11,651,136 108,140,181 5,181,888 141,983,115 84,767,647

Administration surcharge 3,391,653 402,190 3,137,578 335,441 7,266,862 6,283,840

Net claims (19,702,100) (4,305,027) (78,904,963) (11,173,677) (114,085,767) (50,600,338)

Additional provision for unexpiredrisk / premium deficiency reserve – – (1,982,199) (1,549,277) (3,531,476) –

Expenses 19 (32,229,872) (3,821,889) (29,815,466) (3,187,598) (69,054,825) (56,846,909)

Net Commission 7,969,421 (1,088,161) (8,616,906) 362,220 (1,373,426) (683,947)

Underwriting result (23,560,989) 2,838,249 (8,041,774) (10,031,003) (38,795,517) (17,079,707)

Investment income 21,387,496 10,841,435

General and administration expenses 20 (11,570,713) (9,996,184)

Loss for the year before taxation (28,978,733) (16,234,456)

Provision for income tax expense 21 840,960 529,968

Loss for the year after tax (29,819,693) (16,764,424)

Profit and loss appropriation account

Balance at commencement of the year (34,565,569) (17,801,145)

Loss for the year after tax (29,819,693) (16,764,424)

Balance at end of the year (64,385,262) (34,565,569)

Loss per share-basic and diluted 22 (1.19) (0.84)


PROFIT AND LOSS ACCOUNTfor the year ended December 31, 2007

R u p e e s



Javed MasudDirector


STATEMENT OF CHANGES IN EQUITYfor the year ended December 31, 2007


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Issued, subscribed and Accumulated Share holders’paid up share loss equity

capital

R u p e e s

Balance as at January 01, 2006 200,000,000 (17,801,145) 182,198,855

Changes in equity for the year ended December 31, 2006

Issue of right shares 50,000,000 - 50,000,000

Loss for the year after tax - (16,764,424) (16,764,424)

Balance as at December 31, 2006 250,000,000 (34,565,569) 215,434,431

Balance as at January 01, 2007 250,000,000 (34,565,569) 215,434,431

Changes in equity for the year ended December 31, 2007

Loss for the year after tax - (29,819,693) (29,819,693)

Balance as at December 31, 2007 250,000,000 (64,385,262) 185,614,738


STATEMENT OF CASH FLOWSfor the year ended December 31, 2007

2007 2006

Rupees Rupees

Operating Cash Flows

(a) Underwriting activitiesPremiums received 244,010,725 170,875,554Reinsurance premiums paid (35,246,349) (37,362,156)Claims paid (102,884,654) (64,007,908)Salvage recoveries 2,384,721 1,161,627 Commissions paid (16,912,633) (12,543,545)Management expenses (74,840,393) (62,258,711)Surrenders paid (1,568,174) (1,436,585)

Net cash from (used-in) underwriting activities 14,943,242 (5,571,724)

(b) Other operating activitiesIncome tax paid (1,534,675) (1,175,380)General management expenses paid (13,500,898) (11,978,975)Other operating receipts 174,347,204 62,589,163 Other operating payments (174,451,727) (61,928,757)Security deposits (52,200) (750,858)Loans advanced (1,752,642) (1,206,416)Fixed assets sale proceed 420,000 –

Net cash (used-in) other operating activities (16,524,938) (14,451,223)

Cash (Used-in) all operating activities (1,581,696) (20,022,947)

Investment activitiesProfit / Return received 12,001,929 10,727,311 Payments for investments and deposits (165,168,762) (60,106,849)Proceeds from disposal of investments and deposits 151,164,022 92,789,411 Fixed capital expenditure (7,278,369) (12,400,744)

Cash from / (used-in) investing activities (9,281,181) 31,009,129

Financing activities

Proceeds from issue of share capital – 50,000,000

Cash from financing activities – 50,000,000

Net increase / (decrease) in cash (10,862,877) 60,986,182

Cash at the beginning of the year 129,146,825 68,160,643

Cash at the end of the year 118,283,948 129,146,825


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Javed MasudDirector


2007 2006Rupees Rupees

RECONCILIATION TO PROFIT AND LOSS ACCOUNT

Operating cash flows (1,581,696) (20,022,947)

Depreciation expense 6,627,571 6,137,029

Increase in assets other than cash 244,506,489 69,591,731

(Increase) in liabilities (310,605,483) (40,530,344)

Other adjustments:

Profit on sale of investment 4,178,652 3,157,276

(Increase) / Decrease in unearned premium 3,079,337 (45,913,982)

Income tax paid 1,534,675 1,175,380

Dividend, investment and other income received 14,955,535 11,740,751

Provision for impairment in shares 2,253,309 (4,056,592)

Provision for unexpired risk / premium deficiency reserve 3,531,476 –

Advanced to employees 1,752,642 1,206,416

Deposit paid (52,200) 750,858

Loss for the year (29,819,693) (16,764,424)

Definition of Cash

Cash comprises of cash in hand, policy stamps, bond papers cheques in hand, bank balances and other deposits which are readily

convertible to cash in hand and which are used in the cash management function on a day to day basis.

Cash for the purpose of statement of cash flows consists of:

Cash and other equivalents 11 364,601 75,828

Current and other accounts 12 72,289,347 42,440,997

Deposits maturing within 12 months 13 45,630,000 86,630,000

Total cash and cash equivalents 118,283,948 129,146,825




Javed MasudDirector



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Direct and facultative

1. Fire and Property Damage 128,197,672 51,582,488 69,598,516 110,181,644 114,111,576 41,011,333 61,951,175 93,171,734 17,009,909 12,458,236

2. Marine, Aviation and Transport 15,201,960 3,907,678 1,660,054 17,449,584 4,803,698 1,519,314 524,564 5,798,448 11,651,136 7,309,491

3. Motor 118,594,122 55,041,579 58,028,104 115,607,597 7,976,884 3,393,621 3,903,089 7,467,416 108,140,181 60,229,223

4. Miscellaneous 12,679,004 6,081,920 4,601,211 14,159,713 8,876,822 3,322,402 3,221,399 8,977,825 5,181,888 4,770,697

274,672,758 116,613,665 133,887,885 257,398,538 135,768,980 49,246,670 69,600,226 115,415,424 141,983,115 84,767,647


STATEMENT OF PREMIUMfor the year ended December 31, 2007

Prepaid reinsurancepremium ceded Net

Premiumrevenue

Premiumswritten

Unearned premiumreserve

Opening Closing

Premiumsearned

Reinsuranceceded

Reinsuranceexpense

Opening Closing

Class

R u p e e s

NetPremiumrevenue

Business underwritten inside Pakistan2007 2006



Javed MasudDirector



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1. Fire and Property Damage 36,654,639 17,924,457 242,096,332 260,826,514 30,841,064 14,897,222 225,180,572 241,124,414 19,702,100 5,871,250

2. Marine, Aviation and Transport 8,864,893 8,556,287 8,834,013 9,142,619 6,067,871 4,029,382 2,799,103 4,837,592 4,305,027 7,975,743

3. Motor 59,955,106 11,319,664 33,016,538 81,651,980 – – 2,747,017 2,747,017 78,904,963 32,943,194

4. Miscellaneous 6,368,381 5,271,604 14,011,508 15,108,285 11,031 3,118,563 7,042,140 3,934,608 11,173,677 3,810,151

111,843,019 43,072,012 297,958,391 366,729,398 36,919,966 22,045,167 237,768,832 252,643,631 114,085,767 50,600,338


Reinsurance and otherrecoveries in respect of

outstanding claims

R u p e e s

Business underwritten inside Pakistan2007 2006

Net claimsexpense

Claimspaid

Outstanding claims

Opening Closing

Claimsexpense

Reinsuranceand otherrecoveriesreceived

Reinsuranceand otherrecoveriesrevenue

Opening Closing

Class Net claimsexpense

STATEMENT OF CLAIMSfor the year ended December 31, 2007


1. Fire and Property Damage 19,174,732 8,192,580 10,409,962 16,957,350 32,229,872 49,187,222 24,926,771 24,260,451 20,263,987

2. Marine, Aviation and Transport 2,492,944 595,642 272,229 2,816,357 3,821,889 6,638,245 1,728,196 4,910,049 4,049,488

3. Motor 8,575,984 4,523,115 4,196,229 8,902,870 29,815,466 38,718,336 285,964 38,432,372 29,900,707

4. Miscellaneous 797,673 461,077 289,476 969,274 3,187,598 4,156,873 1,331,494 2,825,378 3,316,674

31,041,333 13,772,414 15,167,896 29,645,851 69,054,825 98,700,676 28,272,425 70,428,251 57,530,856



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Javed MasudDirector


STATEMENT OF EXPENSESfor the year ended December 31, 2007

Commissionpaid orpayable

Deferred commission

Opening Closing

Netcommission

expense

Commissionfrom

reinsurersClass

R u p e e s

Netunderwriting

expense

2007

Othermanagement

expenseUnderwriting

expense

Netunderwriting

expense

2006



Javed MasudDirector



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STATEMENT OF INVESTMENT INCOMEfor the year ended December 31, 2007

2007 2006

Rupees Rupees

Income from trading investments

Dividend income 1,006,538 816,368 Gain on trading 4,098,593 2,569,095

5,105,131 3,385,463

Income from non-trading investments

Return on government securities 1,442,384 1,396,165 Return on other fixed income securities and deposits 11,618,944 8,850,370 Dividend income 887,669 677,848 Gain on sale of non-trading investments 80,059 588,181

14,029,056 11,512,564

Provision for impairment in value of investments

Appreciation / (diminuation) in value of held for trading investment 2,253,309 (4,056,592)

Total investment income 21,387,496 10,841,435


NOTES TO THE FINANCIAL STATEMENTSfor the year ended December 31, 2007

1. STATUS AND NATURE OF BUSINESS

Saudi Pak Insurance Company Limited (the company) is a public limited company incorporated in Islamabad,Pakistan on February 15, 2005 under the Companies Ordinance, 1984. The company is engaged in non-lifeinsurance business comprising fire, marine, motor, health and miscellaneous. The company commenced itscommercial operations on April 13, 2005. The registered office of the company is situated at 19th Floor, SaudiPak Tower 61-A, Jinnah Avenue, Islamabad and principal office of the company is situated at 2nd floor StateLife Building No.2-A Wallace Road, Karachi, Pakistan. The company has 12 (2006: 12) branches in Pakistan.The name of the parent enterprise of the company is Saudi Pak Industrial & Agricultural Investment Company(Private) Limited (holding company).

2. BASIS OF PRESENTATION

These financial statements have been prepared on the format of financial statements issued by Securities andExchange Commission of Pakistan (SECP) through Securities and Exchange Commission (Insurance) Rules,2002. vide S.R.O. 938 dated 12 December 2002.

3. STATEMENT OF COMPLIANCE

3.1 These financial statements have been prepared in accordance with the approved accounting standardsas applicable in Pakistan, the requirements of the Companies Ordinance, 1984, the InsuranceOrdinance, 2000 and the Securities and Exchange Commission (Insurance) Rules, 2002 (the Rules).The approved accounting standards comprise such International Financial Reporting Standards asare notified under the provision of the Companies Ordinance, 1984, in case the requirement differ,the requirement of Company Ordinance 1984, the Insurance Ordinance, 2000, or the Rules, shallprevail.

The SECP allowed the insurance companies to differ from the application of International AccountingStandard-39 (IAS 39) Financial Instruments: Recognition and Measurement in respect of valuationsubsequent to initial recognition of investments available for sale. Accordingly, the requirements ofIAS 39, to the extent allowed by SECP, as aforesaid, have not been considered for the preparationof these financial statements.

3.2 The financial statements are prepared in Pak Rupees, which is the company's functional and presentationcurrency.


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3.3 Standards, interpretation and amendments to published approved accounting standards which arenot yet effective:

Following standards and interpretations have been issued but are not effective. Consequently respectiverequirements have not been followed while preparing these financial statements.

IFRS Effective date

Amendments to IAS 23 Borrowing Costs IAS 23 January 01, 2009

Operating Segments IFRS 8 January 01, 2009

Service Concession Arrangements IFRS 12 January 01, 2008

Customer Loyalty Programmes IFRS 13 July 01, 2008

IAS 19 - The Limit on a Defined Benefit Asset, MinimumFunding Requirements and their Interaction IFRS 14 January 01, 2008

Above standards and interpretations are not expected to materially affect the financial statements.

4. BASIS OF MEASUREMENT

The financial statements have been prepared under the historical cost convention except for certain financialassets and liabilities which are stated at fair value or amortized cost as applicable.

The financial statements have been prepared following the accrual basis of accounting except for the cashflow information.

5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5.1 Use of critical accounting estimates and judgments

The preparation of financial statements in conformity with approved accounting standards requiresmanagement the use of certain critical accounting estimates. It also requires management to exerciseits judgment in the process of applying the company's accounting policies. Estimates and judgmentsare continuously evaluated and are based on historical experience including expectation of futureevents that are believed to be reasonable under the circumstances.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognized in the period in which the estimates are revised. The areas where requiredassumptions and estimates are significant to the company's financial statements or where judgmentwas exercised in application of accounting policies are as follows:


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a) Useful life of depreciable / amortizable assetsb) Impairment of assetsc) Provision for outstanding claims including claims incurred but not reported (IBNR)d) Provision for unexpired risk / premium deficiency reservese) Reinsurance recoveries against outstanding claimsf) Provision against premium due but unpaidg) Staff retirement benefitsh) Provision for income tax expense

However, assumptions and judgments made by management in the application of accounting policies thathave significant effect on the financial statements are not expected to result in material adjustment to thecarrying amounts of assets and liabilities in the next year.

5.2 Provision for outstanding claims including incurred but not reported (IBNR)

The company recognizes liability in respect of all claims incurred upto balance sheet date whichis measured at the undiscounted value of the expected future payments. The claims are consideredto be incurred at the time of the incident giving rise to the claim except as otherwise expresslyindicated in an insurance contract. The liability for claims includes amounts in relation to unpaidreported claims, claims incurred but not reported (IBNR) and expected claims settlement costs.

Provision for liability in respect of unpaid reported claims is made on the basis of individual caseestimates. These claims are accounted for based on the management’s best estimate which takesinto account the past trends, expected future patterns of reporting of claims and the claims actuallyreported subsequent to the balance sheet date.

5.3 Provision for unearned premium

Provision for unearned premium represents the portion of premium written relating to the unexpiredperiod of coverage. The company has opted for the 1/24th method to calculate provision forunearned premium as per the option given under the Rules.

5.4 Commission income

Commission income receivable from the reinsurers is taken to profit and loss account in accordancewith the pattern of recognition of the reinsurance premium to which they relate.

5.5 Additional provision for unexpired risk / premium deficiency reserve

Where the cumulative unearned premium reserve for any classes of business is not adequate tomeet the expected future liability, after reinsurance, from claims and other supplementary expenses,including reinsurance expense, commissions and other underwriting expenses, expected to beincurred after the balance sheet date in respect of policies in that class of business in force atbalance sheet date, a premium deficiency reserve is recognized as a liability to meet the deficit.The movement in premium deficiency reserve is charged to profit and loss account.


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5.6 Amount due to other insurers / reinsurers

Liabilities for other insurers / reinsurers are carried at cost which is the fair value of the considerationto be paid in the future for services.

5.7 Premiums due but unpaid

Premium due but unpaid is recognized and carried at original invoice amount less allowance foruncollectible amounts, if any.

5.8 Amount due from other insurers / reinsurers

Amount due from other insurers / reinsurers is carried at cost which is the fair value of theconsideration to be received in the future for services. However, an assessment is made at eachbalance sheet date to determine whether there is an indication that a financial asset or group ofassets may be impaired. If such evidence exists, the estimated recoverable amount of that assetis determined and any impairment loss is recognized for the difference between the recoverableamount and the carrying amount.

5.9 Cash and cash equivalents

For the purpose of cash flow statement, cash and cash equivalents consists of cash in hand, stampsin hand, deposits with banks and short term placements with banks.

5.10 Loans and receivables

These are non-derivative financial assets with fixed or determinable payments that are not quotedin an active market other than (a) those that the company intends to sell immediately or in the nearterm, which shall be classified as held for trading, and those that the company upon initialrecognition designates as at fair value through profit and loss account; (b) those that the companyupon initial recognition designates as available for sale; or (c) those for which the company maynot recover substantially all of its initial investment, other than because of credit deterioration,which shall be classified as available for sale.

Subsequent to initial measurement loans and receivables are measured at amortized cost using theeffective interest method. Gains/losses arising on remeasurement of loans and receivables aretaken to the profit and loss account.

Gain or loss is also recognized in profit and loss account when loans and receivables are derecognizedor impaired, and through the amortization process.

5.11 Trade and settlement date accounting

All 'regular way' purchases and sales of financial assets are recognized on the trade date, i.e. thedate on which commitment to purchase / sale is made by the company. Regular way purchasesor sales of financial assets are those, the contract for which requires delivery of assets within thetime frame generally established by regulation or convention in the market place.


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5.12 Investments

The management determines the appropriate classification of its investments (including investmentsin associates) in accordance with the requirements of International Accounting Standard 39:Financial Instruments: Recognition and Measurement (IAS-39) at the time of purchase and re-evaluates this classification on a regular basis. The investments of the company have beencategorized as follows:

At fair value through profit or loss

a) These are classified as 'held for trading' if (a) acquired or incurred principally for the purpose ofselling or re-purchasing it in the near term; (b) part of a portfolio of identified financial instrumentsthat are managed together and for which there is evidence of a recent actual pattern of short termprofit taking; or (c) a derivative (except for a derivative that is a designated and effective hedginginstrument).

b) Upon initial recognition these are designated by the company as 'at fair value through profit orloss' except for equity instruments that do not have a quoted market price in an active market, andwhose fair value can not be reliably measured.

Held-to-maturity

Held to maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity that the company has the positive intent and ability to hold to maturityother than at fair value through profit or loss, available for sale and loans and receivables.

Available-for-sale

Available for sale financial assets are those non-derivative financial assets that are designated asavailable for sale or are not (a) loans and receivables, (b) held-to-maturity investments, or (c)financial assets at fair value through profit or loss.

All quoted investments except 'at fair value through profit or loss' and 'held for trading' are initiallyrecognized at cost inclusive of transaction costs. Investments at fair value through profit or lossand 'held for trading' are initially recognized at cost.

All quoted investments are subsequently marked to market using the year end bid prices obtainedfrom stock exchange quotations and quotes from brokers.

Available for sale investments are subsequently measured at the lower of cost and market value(market value on an individual investment basis being taken as lower if the fall is other thantemporary) in accordance with the Rules. Any resultant gain or loss is taken to profit and lossaccount in accordance with S.R.O 938. This treatment, however, in contravention to requirementsof IAS 39 'Financial Instruments: Recognition and Measurement', has been made in line with theRules.

Held to maturity investments are subsequently measured at amortized cost using the effectiveinterest method.


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Investments in unquoted investments are carried at cost less impairment in value, if any. Investmentsother than shares are stated at their principal amounts less provision for amounts considereddoubtful.

Unrealized gains / losses on investments classified as 'at fair value through profit or loss' and 'heldfor trading' are taken to profit and loss account.

Gain or loss is also recognized in profit and loss account when held to maturity investments arederecognized or impaired, and through the amortization process.

Impairment of investments is recognized in profit and loss account when there is a permanentdiminution in their value. Impairment loss related to investments carried at cost is not reversed.

Derecognition

All investments are de-recognized when the rights to receive cash flows from the investmentshave expired or have been transferred and the company has transferred substantially all risks andrewards of ownership.

5.13 Deferred commission expense

Commission costs incurred in obtaining and recording policies of insurance and reinsurance arebeing deferred and recognized as an asset in accordance with pattern of recognition of premiumto which they relate.

5.14 Employees benefits

Defined benefit plan

The company operates an approved gratuity fund for its permanent employees who complete theeligible period of service. Contribution to the fund are made in accordance with actuarialrecommendations using the projected unit credit method. The results of current valuation aresummarized in note 24. Actuarial gains and losses are recognized as income or expense whenthe cumulative unrecognized actuarial gains or losses at the end of the previous reporting periodexceeded ten percent of the higher of defined benefit obligation and fair value of the planed assetsat that date. These gains or losses are recognized over the expected remaining working lives ofthe employees participating in the plans.

Defined contribution plan

In addition, the company operates a provident fund scheme for its permanent employees. Equalmonthly contributions at a rate of 10 percent of basic salary are made by the company and itsemployees.


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5.15 Fixed assets

Tangible

These are initially recognized at cost which is equal to the fair value of consideration paid at thetime of acquisition or construction of the asset.

These are subsequently measured at cost less accumulated depreciation and any provision forimpairment loss.

Depreciation

Depreciation is charged to income applying the reducing balance method at the rates specified forcalculation of depreciation in note 18, without taking into account any residual value. Depreciationof an asset begins when it is available for use, i.e. when it is in the location and condition necessaryfor it to be capable of operating in the manner intended by management and ceases when the assetsis derecognized.

Depreciation on addition and deletion of fixed assets during the year is charged in proportion toits period of use.

Maintenance and normal repairs are charged to income as and when incurred. Major renewals andimprovements are capitalized and the assets so replaced, if any, are retired.

Gains and losses on disposal of fixed assets are taken to the profit and loss account currently.

Intangible

These are recorded initially at cost and subsequently carried at cost less accumulated amortizationand accumulated impairment losses, if any.

Intangible assets having finite useful lives are stated at cost less accumulated amortization andaccumulated impairment losses, if any. Such intangibles are amortized using the straight linemethod over their estimated useful life.

Amortization

Amortization is charged at the rates stated in note 18. Amortization on addition and deletion ofintangible assets during the year is charged to income in proportion to the period of use. The usefullife and amortization method are reviewed and adjusted, if appropriate, at the balance sheet date.

Software development costs are only capitalized to the extent that future economic benefits areexpected to be derived by the company.


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5.16 Premium income

Premium income under a policy is recognized over the period of insurance from the date of issueof the policy to which it relates to its expiry as follows:

a) for direct business, evenly over the period of the policy; and

b) for proportional reinsurance business, evenly over the period of underlying insurancepolicies.

Where the pattern of incidence of risk varies over the period of the policy, premium is recognizedas revenue in accordance with the pattern of incidence of risk. Premium for policies receivablein installments are recorded as receivable at the inception of the policy and are recognized asincome over the period of the policy, in accordance with the provisions of the Rules.

5.17 Investment income

Return on investments is recognized using effective interest method.

Capital gain or losses arising on sale of investments are taken to income in the period in whichthey arise.

Interest / profit on bank deposit accounts are accounted for on accrual basis.

Dividend income from investments is recognized when the company's right to receive dividendis established.

5.18 Management expenses

Management expenses have been allocated to various business segments as deemed equitable bythe management.

5.19 Taxation

Current

Provision for current taxation is based on taxable income at the current rates of taxation after takinginto account available tax credits and rebates, if any, or one-half of one percent of turnover,whichever is higher.

Deferred

The company accounts for deferred taxation using the balance sheet liability method on temporarydifferences arising between the tax base of assets and liabilities and their carrying amounts in thefinancial statements. The amount of deferred tax provided is based on the expected manner ofrealisation or settlement of the carrying amount of assets and liabilities using the applicable taxrates. A deferred tax asset is recognized only to the extent that it is probable that future taxableprofits will be available and the credits will be utilised. Deferred tax assets are reduced to theextent that it is no longer probable that the related tax benefit will be realised.


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5.20 Prepaid reinsurance expense

Prepaid reinsurance expense represents the portion of reinsurance premium ceded which is notyet recognized as an expense relating to the unexpired period of coverage. The company has optedfor the 1/24th method to calculate prepaid reinsurance premium as per the option given under theRules.

5.21 Creditors and accruals

These are carried at cost which is the fair value of the consideration to be paid in future for goodsand / or services.

5.22 Provisions

Provisions are recognized when the company has a present legal or constructive obligation as aresult of past events, it is probable that an outflow of resources will be required to settle theobligation, and a reliable estimate of the amount can be made.

5.23 Impairment

The carrying amounts of the company's assets are reviewed at each balance sheet date to determinewhether there is any indication of impairment. If such indication exists the assets' recoverableamount is estimated. An impairment loss is recognized wherever the carrying amount of the assetexceeds its recoverable amount. Impairment losses are recognized in profit and loss account.

5.24 Borrowing cost

The borrowing cost incurred on debts of the company is charged to income.

5.25 Transactions with related parties and transfer pricing

Transactions with related parties mainly represents the insurance contracts and purchases and salesof investments. The company follows approved valuation methods to measure and value thetransactions with related parties. Related party transactions are entered into on an arm's lengthbasis except in extremely rare circumstances where, subject to the approval of the Board ofDirectors, it is in the interest of the company to do so.


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5.26 Segment reporting

The company has four primary business segments for reporting purposes namely, fire, marine,motor and miscellaneous. The company’s operating businesses are organised and managed separatelyaccording to the nature of products and services provided, with each segment representing astrategic business unit that offers different products and serves different markets. The fire insurancesegment provides insurance covers against damages caused by fire, riot and strike, explosion,earthquake, atmospheric damage, flood, electric fluctuation and impact. The marine insurancesegment provides coverage against cargo risk, war risk and damages occurring in inland transit.The motor insurance segment provides comprehensive vehicle coverage and indemnity againstthird party loss. The miscellaneous insurance segment provides cover against burglary, loss of cashin safe and cash in transit, personal accident, money, engineering losses and other coverages.

5.27 Foreign currencies

Transactions in foreign currencies are translated into reporting currency at the rate of exchangeprevailing on the date of transaction. Monetary assets and liabilities denominated in foreigncurrencies are translated at the rates ruling on the balance sheet date. Non-monetary assets andliabilities are translated using exchange rates that existed when the values were determined.Exchange differences are included in the income currently.

5.28 Financial instruments

All the financial assets and financial liabilities are recognized at the time when the companybecomes a party to the contractual provisions of the instrument. Financial assets are derecognizedwhen the rights to receive cash flows have expired or have been transferred and the company hastransferred substantially all risks and rewards of ownership. Financial liabilities are derecognizedwhen they are extinguished, that is, when the obligation specified in the contract is discharged,cancelled, or expires. Any gain or loss on derecognition of the financial assets and financialliabilities is taken to income currently

5.29 Off-setting of financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount is reported in the balancesheet if the company has a legally enforceable right to set-off the transaction and also intendseither to settle on a net basis or to realize the asset and settle the liability simultaneously.

5.30 Level of precision

Figures in these financial statements have been rounded to the nearest rupee.


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6. ISSUED SUBSCRIBED AND PAID-UP SHARE CAPITAL

2007 2006 Number of shares

Ordinary shares of Rs.10 each fully paid in25,000,000 25,000,000 cash 250,000,000 250,000,000

6.1 Following is the reconciliation of number of shares:

Number of shares at beginning of the year 25,000,000 20,000,000

Right shares issued during the year – 5,000,000

Number of shares at the end of the year 25,000,000 25,000,000

6.2 Following is the breakup of ordinary share holding of the company:

Number of shares Percentage ofShares held by holding

2007 2006 2007 2006

14,997,000 14,997,000 Parent company 59.988 59.988 149,970,000 149,970,000

9,999,000 9,999,000 Associated companies 39.996 39.996 99,990,000 99,990,000

4,000 4,000 Directors 0.016 0.016 40,000 40,000

25,000,000 25,000,000 250,000,000 250,000,000

6.3 Capital management policies and procedures

The company’s capital management objectives are:

to ensure the company’s ability to continue as a going concern; andto provide an adequate return to shareholders

by pricing its insurance premium commensurately with the level of risk.

The company monitors capital on the basis of carrying amount of equity less cash and cash equivalents as presentedon the face of the balance sheet and respective notes.

The company’s goal in capital management is to maintain a balance between capital to overall financing.

The company sets the amount of capital in proportion to its overall financing structure i.e. equity and financial liabilities.The company manages the capital structure and makes adjustments to it in the light of changes in economic conditionsand the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the companymay adjust the amounts of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assetsto reduce debts.


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7. PROVISION FOR OUTSTANDING CLAIMS (INCLUDING IBNR)

Related parties 8,441,038 933,575

Others 289,517,353 42,138,437

297,958,391 43,072,012

8. ADDITIONAL PROVISION FOR UNEXPIRED RISK /PREMIUM DEFICIENCY RESERVE

Balance at the beginning of the year – –

Provision for the year 3,531,476 –

Balance at end of the year 3,531,476 –

9. OTHER PAYABLES

Federal insurance fee payable 159,631 288,336

Central excise duty payable 811,098 790,521

Payable against civil works 250,000 2,186,000

Withholding income tax payable 47,154 –

Others 1,277,893 263,889

2,545,776 3,528,746

10. CONTINGENCIES AND COMMITMENTS

Contingencies

There were no contingencies as at the balance sheet date.

Commitments

There were no commitments as at the balance sheet date.

11. CASH AND OTHER EQUIVALENTS

Cash in hand 48,842 –

Policy and revenue stamps 315,759 75,828

364,601 75,828


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12. CURRENT AND OTHER ACCOUNTS

Cash with banks in:

Current accounts 1,946,237 2,583,093

Saving accounts 12.1 786,259 1,922,128

Deposit account 12.2 69,556,851 37,935,776

72,289,347 42,440,997

12.1 The accounts carry interest at the rate of 8% (2006: 8%) per annum.

12.2 This represents amount deposited at a rate of 8% (2006: Nil) per annum in super profit account in Saudi PakCommercial Bank Limited (related party).

13. DEPOSITS MATURING WITHIN 12 MONTHS

Term Deposit Receipts 45,630,000 86,630,000

13.1 These receipts carry interest at the rate of 9.5% to 11.25% (2006: 9.5% to 11.25%) per annum

14. INVESTMENTS

Held to maturity

Pakistan Investment Bonds 14.1 25,000,000 20,000,000

Held for trading

Listed ordinary shares 14.2 18,923,948 22,900,322

Available of sale

Listed ordinary shares 14.3 13,767,414 19,413,061

Listed units of open ended mutual funds 14.5 1,202,692 1,202,692

Unlisted ordinary shares 14.6 20,000,000 –

34,970,106 20,615,753

Less: Diminution in value of investment (1,803,283) (4,056,592)

77,090,771 59,459,483

14.1 The above bonds are placed with State Bank of Pakistan in compliance with section 29 of the Insurance Ordinance, 2000. PIB’s carry markup at the rate of 7% and 9.10% (2006:7%) per annum.


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Number of Shares 2007 20062007 2006 Rupees Rupees

14.2 Held for trading

Golden Arrow Selected Stock Fund Limited – 40000 – 328,215

JS Bank Limited 93000 – 1,574,050 –

Pakistan Strategic Allocation Fund – 15000 – 144,400

PICIC Growth Fund 44000 71000 1,670,600 2,780,910

Arif Habib Securities – 1188 – 216,625

NIB Bank Limited 50000 – 898,415 –

PICIC – 27200 – 1,653,200

Pakistan Oil Fields Limited 5000 – 1,704,920 –

Allied Bank Limited – 3600 – 339,000

Samin Textile Limited 13000 – 678,725 –

Bank Al Habib Limited – 23800 – 1,531,145

Millat Tractor Limited 3000 – 978,814 –

Habib Metro Bank Limited – 7000 – 460,140

TRG Pakistan Limited 50000 – 778,750 –

PICIC Insurance Limited – 16 – 160

Engro Chemicals Pakistan Limited 5000 – 1,228,350 –

Azgard Nine Limited – 30500 – 859,080

Nimir Industries 100000 – 660,775 –

Nishat Mills Limited – 14900 – 1,609,680

Sitara Chemicals 10000 – 3,028,250 –

Nishat (Chunian) Limited – 18600 – 1,091,740

Sitara Peroxide 10000 – 486,000 –

Cherat Cement Company Limited – 16000 – 731,650

D. G. Khan Cement Company Limited – 16750 – 1,669,200

Dewan Hattar Cement Limited – 94000 – 1,471,943

Pakistan Petroleum Limited 3300 – 784,250 –

Fecto Cement Limited – 7900 – 676,502

Fauji Cement Company Limited 40000 44500 977,525 1,030,300

Kot Addu Power Company Limited – 5000 – 207,750

International Industries Limited – 1995 – 183,075

Callmate Telips Limited 32000 21500 2,205,135 1,704,390

Fauji Fertilizer Bin Qasim Limited 30000 74000 1,269,389 2,699,860

Glaxo Smithkline Pakistan Limited – 5800 – 913,326

Packages Limited – 1000 – 194,200

Security Papers Limited – 3800 – 403,831

18,923,948 22,900,322


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Number of Shares 2007 20062007 2006 Rupees Rupees

14.3 Available for sale

Related partySaudi Pak Leasing Company Limited 16065 15300 226,625 226,625Other than related partyOil and Gas Development Company Limited 40000 42000 4,841,538 5,827,228Bank Al-Falah Limited 15600 21500 805,552 1,002,560Faysal Bank Limited – 34500 – 2,499,650National Bank of Pakistan 5000 – 1,310,715 –First National Equity Limited – 8000 – 414,200Adamjee Insurance Company Limited – 11000 – 1,712,250Dewan Farooq Spinning Mills Limited – 29000 – 273,045Maple Leaf Cement Limited 46250 29000 1,247,655 926,230Fauji Fertilizer Company Limited 44008 52008 5,335,329 6,531,273

13,767,414 19,413,061

14.4 The fair value of available for sale investments is Rs. 15,032,759 (2006: Rs. 16,039,724). Available for sale investmentsare stated at lower of cost or market value (market value being taken as lower if the reduction is other than temporary)as required by the Rules. However, the International Accounting Standard 39 Financial Instruments: Recognition andMeasurement requires that these instruments should be measured at fair value. Accordingly these investments beingmeasured at fair value, their carrying values as on December 31, 2007 would have been higher by Rs. 107,229 (lowerby Rs. 3,373,337 in 2006) and shareholders’ equity reduced by the same amounts.

14.5 Listed units of open ended mutual funds

Number of units Name of investee entity 2007 2006

158638 126019 Pakistan Capital Market Fund 1,202,692 1,202,692

14.5.1 The market value of these units is Rs. 12.74 per unit (2006: Rs. 7.58 per unit)

14.6 Unlisted ordinary shares

The company has invested in Pace Barka Properties Limited an unlisted company located its head office in Lahore,Pakistan. The company acquired ordinary shares of 2 million at the rate of Rs. 10 each.

15. ACCRUED INVESTMENT INCOME

Interest on saving accounts 211,895 244,374

Interest on Terms Deposit Receipts 740,865 936,647

Interest on Pakistan Investment Bonds 406,192 241,644

1,358,952 1,422,665


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16. ADVANCE INCOME TAX-NET

Advance income tax 3,409,850 1,999,312

Provision for tax-prior year (529,968) (146,879)

Provision for taxation-current (840,960) (529,968)

2,038,922 1,322,465

17. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

Advances (unsecured-considered good)

To staff 1,460,849 795,999To agents against commission 499,417 111,765

1,960,266 907,764Deposits

Against hire of office premises 2,056,708 2,016,708Others 13,200 16,000

2,069,908 2,032,708

Prepayments

Prepaid rent 333,239 389,697

Professional tax 150,000 –

Advertisement – 443,839

Tracker monitoring fee 5,848,749 2,798,637

Others 202,335 –

6,534,323 3,632,173

Other receivables (considered goods)

Dividend income receivable 208,522 172,214

Excess contribution to staff retirement gratuity fund 24 674,029 49,832

Receivable against sale of shares 2,359,077 –

3,241,628 222,046

13,806,125 6,794,691


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2007 2006 Rupees Rupees

19. MANAGEMENT EXPENSES - UNDERWRITING

Chief executive remuneration 2,805,000 2,805,000

Salaries, wages and allowances 27,864,200 22,584,823

Rent 4,369,210 4,439,554

Utilities 3,653,344 2,969,100

Computer maintenance 261,508 937,590

Legal and professional 590,548 1,041,938

Credit rating fee 178,500 170,000

Depreciation 18.1 4,918,396 4,508,886

Amortization 18.1 841,223 832,457

Vehicle expenses 3,787,663 3,014,750

Advertisement 8,142,444 6,022,067

Printing and stationery 698,720 678,973

Traveling 829,801 1,070,419

Conveyance 50,406 71,430

Subscription and periodicals 219,840 148,944

Postage 246,629 244,381

Internet charges 608,040 31,715

Inspection fee 106,859 57,048

Brokerage 199,230 129,819

Conference / Seminar 250,050 75,442

Entertainment 386,577 456,115

Bank Charges 157,315 128,957

Insurance 553,075 559,004

Directors fee and expenses 589,869 500,480

Tracker monitoring fee 3,624,034 1,189,420

Office cleaning and maintenance charges 947,292 474,434

Service charges 1,508,883 810,319

Miscellaneous 666,169 893,844

69,054,825 56,846,909


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2007 2006 Rupees Rupees

20. GENERAL AND ADMINISTRATION EXPENSES

Chief executive remuneration 495,000 495,000

Salaries, wages and allowances 4,917,271 3,885,893

Rent 771,037 783,451

Utilities 644,708 523,959

Computer maintenance 46,148 165,457

Legal and professional 104,214 234,422

Credit rating fee 31,500 30,000

Depreciation 18.1 867,952 795,686

Vehicle expenses 668,411 532,015

Advertisement 1,436,902 1,062,718

Audit fees and other professional charges 20.1 172,503 150,000

Printing and stationery 123,304 119,819

Traveling 146,436 188,898

Conveyance 8,895 12,605

Subscription and periodicals 38,795 26,284

Postage 43,523 43,126

Internet charges 107,301 5,597

Inspection fee 18,857 10,067

Brokerage 35,159 33,303

Conference / Seminar 44,127 13,313

Entertainment 68,219 80,491

Bank Charges 27,761 22,757

Insurance 97,601 98,648

Directors fee and expenses 104,095 88,320

Tracker monitoring fee – 209,898

Office cleaning and maintenance charges 167,169 83,723

Service charges 266,274 142,997

Miscellaneous 117,550 157,737

11,570,713 9,996,184

20.1 Auditors’ remuneration

Audit fees 125,000 125,000

Other certification fees 25,000 25,000

Out of pocket expense 22,503 –

172,503 150,000


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Tangible Intangible

18. FIXED ASSETS - Office Furniture Motor Office Computers Total Tangible Computer Total AssetsTangible and Intangible Improvements and Fixture Vehicles Equipment Equipments Software

R u p e e s

At January 01, 2006

Cost 10,389,287 903,308 16,199,274 2,342,619 2,462,440 32,296,928 4,162,486 36,459,414Accumulated depreciation 450,677 67,950 1,418,852 179,885 478,253 2,595,617 586,168 3,181,785

Net book value 9,938,610 835,358 14,780,422 2,162,734 1,984,187 29,701,311 3,576,318 33,277,629

Year ended December 31, 2006

Opening net book value 9,938,610 835,358 14,780,422 2,162,734 1,984,187 29,701,311 3,576,318 33,277,629Additions 1,838,194 623,830 7,666,755 2,571,592 433,500 13,133,871 – 13,133,871

DisposalsCost – – 350,000 11,177 – 361,177 – 361,177Depreciation – – – – – – – –

– – 350,000 11,177 – 361,177 – 361,177

Depreciation charge for the year 1,153,376 155,070 2,745,091 577,398 673,637 5,304,572 832,457 6,137,029

Closing net book value 10,623,428 1,304,118 19,352,086 4,145,751 1,744,050 37,169,433 2,743,861 39,913,294

At January 01, 2007

Cost 12,227,481 1,527,138 23,866,029 4,914,211 2,895,940 45,430,799 4,162,486 49,593,285Accumulated depreciation 1,604,053 223,020 4,513,943 768,460 1,151,890 8,261,366 1,418,625 9,679,991

Net book value 10,623,428 1,304,118 19,352,086 4,145,751 1,744,050 37,169,433 2,743,861 39,913,294

Year ended December 31, 2007

Opening net book value 10,623,428 1,304,118 19,352,086 4,145,751 1,744,050 37,169,433 2,743,861 39,913,294Additions 72,164 176,752 3,717,631 321,923 513,510 4,801,980 45,500 4,847,480

DisposalsCost – – 1,518,015 – 46,000 1,564,015 – 1,564,015Depreciation – – 486,480 – – 486,480 – 486,480

– – 1,031,535 – 46,000 1,077,535 – 1,077,535

Depreciation charge for the year 1,066,719 208,161 3,255,691 654,540 601,237 5,786,348 841,223 6,627,571

Closing net book value 9,628,873 1,272,709 18,782,491 3,813,134 1,610,323 35,107,530 1,948,138 37,055,668

At December 31, 2007

Cost 12,299,645 1,703,890 26,065,645 5,236,134 3,363,450 48,668,764 4,207,986 52,876,750Accumulated depreciation 2,670,772 431,181 6,933,154 1,411,823 1,753,127 13,200,057 2,259,848 15,459,905

Net book value 9,628,873 1,272,709 19,132,491 3,824,311 1,610,323 35,468,707 1,948,138 37,416,845

Rate of depreciation 10% 15% 15% 15% 30% 20%

18.1 Depreciation and amortization charged during the year is allocated as follows:Depreciation Amortization Depreciation Amortization

2007 2006

Management expenses 19 4,918,396 841,223 4,508,886 832,457General and administrative expenses 20 867,952 – 795,686 –

5,786,348 841,223 5,304,572 832,457

18.2 Detail of tangible assets disposed off during the year are as follows:

Description Cost Accumulated Book Value Sale Proceed Mode of Particulars of purchaserDepreciation Disposal

Motor Vehicle 719,600 249,985 469,615 425,000 Negotiation Mr. Waseem Mirza (Ex-employee)

798,415 236,495 561,920 561,920 Burnt Unknown

1,518,015 486,480 1,031,535 986,920

Computer equipment 46,000 – 46,000 – Snatch Unknown

46,000 – 46,000 –

1,564,015 486,480 1,077,535 986,920

18. FIXED ASSETS - Tangible and Intangible


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21. TAXATION

21.1 Current

The tax charge for the current year represents minimum charge at 0.5% of gross income under section 113 of theIncome Tax Ordinance, 2001 and tax on dividend income.

Effective tax rate reconciliation

Numerical reconciliation between the average tax rate and the applicable tax rate has not been presented as provisionfor current year income tax has been made under section 113 of the Income Tax Ordinance, 2001 related to minimumtax. The company’s tax computation gives rise to a tax loss.

Tax assessments have been finalized upto the tax year 2007 and no appeals are pending.

21.2 Deferred

The company’s deferred tax computation given rise to deferred tax assets amounting to Rs. 13 million, which is notrecognised in these financial statements.

22. LOSS PER SHARE - Basic and Diluted2007 2006

Rupees Rupees

Loss after taxation attributable to ordinary shareholders - Rupees (29,819,693) (16,764,424)

Weighted average number of ordinary shares issued andsubscribed during the year 25,000,000 20,054,795

Loss per share - Rupees (1.19) (0.84)

23. TRANSACTIONS WITH RELATED PARTIES

The related parties comprises Saudi Pak Industrial & Agricultural Investment Company (Private) Limited (parent company),related group companies, entities under common control, entities with common directors, major shareholders, directors, keymanagement personnel and employee retirement benefits funds.

The transactions and balances with related parties, other than remuneration to the chief executive (note 21) under the termsof employment and employee retirement benefits funds are as follows:

Premium

Premium underwritten 14,126,123 9,840,416

Premium collected 14,259,968 7,548,297

Outstanding premium 1,513,787 1,521,915

Claims

Claims paid 6,977,732 1,658,404

Outstanding claims 8,441,038 933,575

Deposit account 45,630,000 86,630,000

Rent paid 1,016,580 960,000

Dividend income 15,300 22,950

Issue of shares – 50,000,000

Investsment

Saudi Pak Leasing Company Limited 226,625 226,625


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24. STAFF RETIREMENT GRATUITY

24.1 General description

The company operates an approved funded gratuity scheme for all employees completed qualifying period of service withthe company at varying percentages of last drawn salary. The percentage depends on the number of service years withthe company.

The latest actuarial valuation of the gratuity fund was carried out as at December 31, 2007. The fair value of the fund’sassets and liabilities at the latest valuation date are as follows:

2007 200624.2 Principal actuarial assumptions

Following principal actuarial assumptions were used for the valuation: % per annum % per annumDiscount rate 11 11Expected long-term rate of increase in salary level 8.89 8.89Expected long-term rate of interest 11 11

Rupees Rupees24.3 Reconciliation of provision for gratuity scheme

Present value of defined benefit obligation 2,263,311 1,224,917Less: fair value of plan assets 2,685,336 1,274,749

Surplus/(Deficit) 422,025 49,832

24.4 Gratuity asset / (liability)

Balance at beginning of the year 1,274,749 –Add: Charge for the year 24.5 (2,032,088) (1,279,454)Payments / contribution made during the year 1,431,368 1,329,286

Balance at end of the year 674,029 49,832

24.5 Gratuity scheme expense

Current service cost 889,324 628,345Interest cost 125,552 63,433Expected return on plan assets (207,705) (30,301)Past service cost 1,224,917 617,977

Total expense 2,032,088 1,279,454

25. REMUNERATION OF CHIEF EXECUTIVE AND EXECUTIVES

The aggregate amount charged in financial statements for remuneration including all benefits, to the Chief Executive andExecutives is as follows:

Chief Executive Executives Total2007 2006 2007 2006 2007 2006

Managerial remuneration 2,129,028 2,129,028 6,051,223 5,959,740 8,180,251 8,088,768House rent, utilities etc. 745,164 745,164 2,117,923 2,085,900 2,863,087 2,831,064Utilities Allowance 212,904 212,904 605,125 595,980 818,029 808,884Medical Allowance 212,904 212,904 605,125 595,980 818,029 808,884

3,300,000 3,300,000 9,379,397 9,237,600 12,679,397 12,537,600

Number of persons 1 1 9 9 10 10

Chief Executive and Executives are provided with free use of company maintained cars.

26. SEGMENT REPORTING

Segment assets and liabilities include all assets and liabilities related to the segment and relevant proportion of the assets andliabilities allocated to the segment on a reasonable basis.

Segment revenues and expenses include all revenues and expenses related to the segment and relevant proportion of the revenuesand expenses allocated to the segment on a reasonable basis.

Inter-segment transactions are carried out at prices that are not materially different from those that would be available from /offered to independent counterparties. There were no inter-segment transactions during the year.

The following table presents revenue and profit information regarding segments for the year ended December 31, 2007 andassets and liabilities information regarding industry segments as at December 31, 2007:

Net premium earned 17,009,909 12,458,236 11,651,136 7,309,491 108,140,181 60,229,223 5,181,888 4,770,697 141,983,115 84,767,647

Segments results (23,560,989) (10,936,705) 2,838,249 (4,316,383) (8,041,774) 144,849 (10,031,003) (1,971,468) (38,795,517) (17,079,707)

Investment income 21,387,496 10,841,435

General and administrativeexpenses (11,570,713) (9,996,184)

Loss for the year (28,978,733) (16,234,456)before tax

Provision for taxation 840,960 529,968

Loss for the year (29,819,693) (16,764,424)

Other information

Segment assets 275,712,570 43,227,820 9,981,234 8,944,081 39,243,205 36,349,903 23,794,992 17,607,557 348,732,001 106,129,361Unallocated assets 249,950,987 237,873,565

Total assets 598,682,988 344,002,926

Segment liabilities 291,394,499 40,129,432 11,209,702 11,392,225 87,218,190 63,168,676 15,809,872 8,480,276 405,632,263 123,170,609Unallocated liabilities 7,498,259 5,565,342

413,130,522 128,735,951

Capital expenditure 4,847,480 13,133,871

Depreciation 5,786,348 5,304,572

Amortization 841,223 832,457

Fire and PropertyMarine Aviation and

Transport Motor Miscellaneous Total

2007 2006Rupees

2007 2006Rupees

2007 2006Rupees

2007 2006Rupees

2007 2006Rupees


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27. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

27.1 Liquidity risk

Liquidity risk is the risk that the company will be unable to meet its funding requirements. To guard against the risk,the company has diversified funding sources and assets are managed with liquidity in mind maintaining a balance ofcash and cash equivalents and readily marketable securities. The maturity profile is monitored to ensure that adequateliquidity is maintained.

27.2 Foreign currency risk

The company is not materially exposed to risk from foreign currency exchange rate fluctuation.

27.3 Market risk

Market risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices,whether those changes caused by factors specific to the individual security, or its insurer, or factors affecting all securitiestraded in the market. The company is exposed to market risk with respect to its investments. The company limits marketrisk by maintaining a diversified portfolio and by continuous monitoring of developments in equity market. In addition,the company actively monitors the key factors that affect stock market movements.

27.4 Reinsurance risk

Reinsurance ceded does not relieve the company from its obligations to policy holders and as a result the companyremains liable for the portion of outstanding claims reinsured to the extent that reinsurer fails to meet the obligationsunder the reinsurance agreement. In common with other reinsurance companies, in order to minimize the financialexposure arising from large claims, the company, in the normal course of business, enters into agreements with otherreinsurers. To minimize its exposure to significant losses from reinsurer insolvencies, the company obtains reinsurancefrom a number of reinsurers, who are dispersed over several geographical regions.

27.5 Cash flow interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in interest rates. Thecompany manages this risk through risk management strategies.

28. MATURITIES OF ASSETS AND LIABILITIES

FINANCIAL ASSETS

Cash and bank deposits 70,343,110 – 70,343,110 2,310,838 – 2,310,838 72,653,948Investments 45,630,000 25,000,000 70,630,000 32,090,771 20,000,000 52,090,771 122,720,771Premiums due but unpaid – – – 43,843,039 – 43,843,039 43,843,039Amount due from other insurers/reinsurers – – – 51,969,930 – 51,969,930 51,969,930Accrued investment income – – – 1,358,952 – 1,358,952 1,358,952Reinsuance recoveries against outstanding claims – – – 237,768,832 – 237,768,832 237,768,832Advances, deposits and other receivables – – – 11,736,217 2,069,908 13,806,125 13,806,125

115,973,110 25,000,000 140,973,110 381,078,579 22,069,908 403,148,487 544,121,597

FINANCIAL LIABILITIES

Provision for outstanding claims(including IBNR) - – – – 297,958,391 – 297,958,391 297,958,391

Accrued expenses – – – 347,233 – 347,233 347,233

Other payables – – – 2,545,776 – 2,545,776 2,545,776

Premium due to reinsurer – – – 26,984,678 – 26,984,678 26,984,678

– – – 327,836,078 – 327,836,078 327,836,078

2007 Rupees 115,973,110 25,000,000 140,973,110 53,242,501 22,069,908 75,312,409 216,285,519

2006 Rupees 126,487,904 20,000,000 146,487,904 91,282,853 2,032,708 93,315,561 239,803,465


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Maturity up toone year

Maturity afterone year

Sub-Total Maturity up toone year

Maturity afterone year

Sub-Total Total

Interest / Mark-up bearing Non Interest / Mark-up bearing

Particulars



Javed MasudDirector


30. CREDIT RISK AND CONCENTRATION OF CREDIT RISK

Credit risk is the risk, which arises with the possibility that one party to a financial instrument will fail to discharge its obligationand cause the other party to incur a financial loss. The company attempts to control credit risk by monitoring credit exposuresby undertaking transactions with a large number of counter parties in various industries and by continually assessing the creditworthiness of counter parties.

Concentration of credit risk arises when number of counter parties have a similar type of business activities. As a result anychanges in economic, political or other conditions would effect their ability to meet contractual obligation in a similar manner.

The company is exposed to credit risk on premium recievable from customers and commission and claim recoverable fromreinsurers. The management monitors exposure to credit risk through regular review of credit exposure and prudent estimatesof provisions for doubtful receivables.

31. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is an amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing partiesin arms length transaction. Consequently, difference may arise between the carrying values and the fair values estimates.

The fair value of all the financial instruments are estimated to be not significantly different from their carrying values exceptfor quoted investments as disclosed in note 14.4.

32. DATE OF AUTHORIZATION

These financial statements were authorized for issue on 04 March 2008 by the Board of Directors of the company.

Effective%

Maturity

ParticularsUp to one year

Between oneto two years

Between twoto three years

Between threeto four years

Between fourto five years

After fiveyears

Total

Financial assetsCash and bank deposits 9.5 to 70,343,110 - - - - - 70,343,110

11.25

Investments 7 32,090,771 - 25,000,000 - - - 57,090,771

2007 Rupees 102,433,881 - 25,000,000 - - - 127,433,881

2006 Rupees 165,947,387 - 20,000,000 - - - 185,947,387

29. INTEREST RATE SENSITIVITY ANALYSIS

The company’s financial assets and liabilities are not significantly exposed to interest rate risk, however, its exposure to interestrate risk and the effective rates on financial assets as at December 31, 2007 is summarized as follows:


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PATTERN OF HOLDING OF THE SHARESHELD BY THE SHAREHOLDERSas at December 31, 2007

No. of Shareholders Shareholdings Total Shares held

8 Shareholding from 1 to 500 shares 4,000

1 -do- 2,495,001 “ 2,500,000 “ 2,499,500

1 -do- 7,495,001 “ 7,500,000 “ 7,499,500

1 -do- 14,995,001 “ 15,000,000 “ 14,997,000

11 25,000,000

Categories of Shareholders

Directors: Share held Percentage

Mr. Muhammad Rashid Zahir 500 0.002

Mr. Javed Masud 500 0.002

Mr. Mansoor M. Khan 500 0.002

Mr. M. Naim Farooqui 500 0.002

Mr. Farrukh Shauket Ansari 500 0.002

Mr. Zulfiqar Hussain 500 0.002

Mr. Aftab Iqbal Khan 500 0.002

Capt. Azhar Ehtesham Ahmed 500 0.002

Holding company:

Saudi Pak Industrial & Agricultural Investment Co. (Pvt) Ltd. 14,997,000 * 59.988

Associated companies:

Saudi Pak Commercial Bank Ltd. 7,499,500 * 29.998

Saudi Pak Leasing Company Ltd. 2,499,500 9.998

TOTAL 25,000,000 100.000

* Shareholders holding 10% or more voting interest.


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LIST OF BRANCHES

Islamabad BranchMr. Choudhry Waqar AhmedRegional Head

Mr. Asim MajeedManager2nd Floor, Saudi Pak Tower,61/A, Jinnah Avenue,IslamabadPh # 051-111-222-003

Ext 3081051-2800351-2

Fax # 051-2800203Mob # 0300-8504923

M. A. Jinnah Road Branch,Karachi.Mr. Muhammad Rafiq GhoorDeputy Chief Manager5th Floor, State Life Bldg. # 6Habib Square,M. A. Jinnah Road, Karachi.Ph # 021-2415212

021-2413793021-2416918

Fax # 021-2410944Mob # 0300-2123273

Multan BranchMr. Mohammad AnwarDeputy ManagerRoom # 19-21, 3rd FloorTrust Plaza, L.M.Q. RoadMultan.Ph # 061-4579073 - 4Fax # 061-4579075Mob # 0300-8736296

Peshawar BranchMr. Mohammad RiazManager1081, Saddar RoadPeshawar Cantt.Ph # 091-5277345Fax # 091-5277357Mob # 0300-8584281

Rawalpindi BranchMr. Choudhry Waqar AhmedRegional Head

Mr. Abdul HaleemDeputy Chief Manager3rd Floor, Usman Plaza55-Haider RoadRawalpindi Cantt.Ph # 051-5792006

051-5110572Fax # 051-5791338Mob # 0301-8550019

Regional Office, LahoreMr. Muhammad Aslam RajputRegional HeadOffice 1, 1st Floor,Al-Hafeez View, Sir Syed RoadLiberty Commercial Zone,Gulberg - III, Lahore.Ph # 042-5871158

042-5871160 - 61Fax # 042-5871159Mob # 0300-4196147

Sialkot BranchMr. Kamran Hafeez SheikhManager27 Paris Road,Sialkot.Ph # 052-4006281Fax # 052-4595557Mob # 0300-8613842

Faisalabad BranchMr. Malik Farooq MustafaChief Manager2nd Floor, Saudi PakBank Building,Kotwali Road, FaisalabadPh # 041-2605688

041-2605788041-2605789

Fax # 041-2605689Mob # 0300-8669975

Gulberg Branch, LahoreMr. Raza JavaidDeputy Chief ManagerOffice # 9, 1st FloorAl-Hafeez View, Sir Syed RoadLiberty Commercial Zone,Gulberg III, Lahore.Ph # 042-2404809

042-2404810Fax # 042-2404809Mob # 0300-2008536

Hyderabad BranchMr. Mohd. Anees QureshiManagerMezzanine Floor,Rashida Magsi Plaza,Risala Road, Hyderabad.Ph # 022-2780603

022-2780770Fax # 022-2780765Mob # 0300-3017098

I. I. Chundrigar Road Branch,Karachi.Mr. Asad NazirAssistant General Manager3rd Floor, Lakhani Centre,I. I. Chundrigar Road, Karachi.Ph # 021-2631402

021-2631420021-2631430

Fax # 021-2631449Mob # 0333-2150921

Head Office:2nd Floor, State Life Building No. 2-A, Wallace Road, Karachi 74000

UAN: (021) 111-774-111 Fax: (021) 2417885

E-mail: [email protected]: www.saudipakinsurance.com.pk


47

PROXY FORM

I/We

of being a member of Saudi Pak Insurance Company Limited hereby appoint

Mr. of

or failing him Mr. of

as my/our proxy to vote for me/us and on my/our behalf at the 3rd Annual General Meeting of the Company to

be held on Saturday, March 29, 2008 at 12:00 noon at 19th Floor, Saudi Pak Tower, Islamabad and at any

adjournment thereof.

Signed this day of 2008.

Notes :

i. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint another memberas a proxy to attend and vote instead of him/her.

ii. Proxies must be lodged with the Company Secretary not less than 48 hours before the time appointed forthe Meeting.

iii. The signature on the instrument of proxy must conform to the specimen signature recorded with theCompany.

iv. In case of corporate entity, the Board of Directors’ resolution / power of attorney with specimen signatureof the nominee shall be produced (unless it has been provided earlier) at the time of the Meeting.

Rupeesten

revenuestamp

WITNESSES:

1. SignatureNameAddress

NIC No.

2. SignatureNameAddress

NIC No. Signature

Holder of Ordinary Shares

Share Register Folio No.

saudi pak insurance · chartered accountants, karachi. registered office saudi pak tower islamabad....

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