2007.pdf adamjee

8/7/2019 2007.PDF Adamjee

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42

Auditors Report to the members

We have audited the annexed financial statements comprising of:

(i) balance sheet;(ii) profit and loss account;(iii) statement of changes in equity;(iv) cash flow statement;(v) statement of premiums;(vi) statement of claims;(vii) statement of expenses; and(viii) statement of investment income

of Adamjee 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 CompaniesOrdinance, 1984 (XLVII of 1984). Our responsibility is to express an opinion on these statements based on ouraudit.

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 theaccounting policies used and significant estimates made by management, as well as, evaluating the overallfinancial statements presentation. 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, 2000 andthe 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 of the company's affairs as at December 31, 2007 and of the profit, 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) Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by thecompany and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

A.F. Ferguson & Co.Chartered Accountants

Karachiarch 29, 2008


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Note 2007 2006(Rupees in '000)

Share capital and reservesAuthorised share capital 5.1 1,500,000 1,500,000

Paid-up share capital 5.2 1,022,351 1,022,351

Retained earnings 5,666,273 1,802,399Reserves 6 963,123 963,123

6,629,396 2,765,522

TOTAL EQUITY 7,651,747 3,787,873

Underwriting provisionsProvision for outstanding claims (including IBNR) 7 5,022,620 3,208,084Provision for unearned premium 4,252,005 2,974,462Commission income unearned 236,039 113,575Total underwriting provisions 9,510,664 6,296,121

Deferred liabilityStaff retirement benefits 8 3,688 3,085

Creditors and AccrualsPremiums received in advance 125,682 86,901

Amounts due to other insurers / reinsurers 579,621 248,565Accrued expenses 79,174 85,758Other creditors and accruals 9 785,885 607,512

1,570,362 1,028,736

BorrowingsLiabilities against assets subject to finance lease 10 - 10,019

Other liabilitiesUnclaimed dividends 29,502 13,265

TOTAL LIABILITIES 11,114,216 7,351,226

TOTAL EQUITY AND LIABILITIES 18,765,963 11,139,099

CONTINGENCIES 11

The annexed notes 1 to 39 form an integral part of these financial statements.

43

Balance Sheet as at December 31, 2007


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Note 2007 2006(Rupees in ' 000)

Cash and bank deposits 12Cash and other equivalents 133,735 79,051Current and other accounts 600,661 580,638Deposits maturing within 12 months 219,801 223,539

954,197 883,228

Loans 13 27,312 26,259

Investments 14 8,132,102 4,502,776

Other AssetsPremiums due but unpaid 15 3,203,751 2,053,498Amounts due from other insurers/ reinsurers 16 255,570 220,386Salvage recoveries accrued 205,404 90,809Premium and claim reserves retained by cedants 32,926 36,506Accrued investment income 17 31,009 28,973Reinsurance recoveries against outstanding claims 18 2,792,464 1,262,976Taxation - payments less provision 157,153 297,545Deferred commission expense 413,543 311,942Prepayments 19 1,519,241 813,618Sundry receivables 20 272,878 251,456

8,883,939 5,367,709

Fixed Assets - Tangible & Intangible 21OwnedLand and buildings 181,055 33,059Furniture and fixtures 22,373 23,312Motor vehicles 401,922 198,628Capital work-in-progress 21.2 64,846 - ,Machinery and equipment 51,969 44,059Computers and related accessories 42,940 38,472Intangible asset - computer software 3,308 2,243

768,413 339,773Leased

Motor vehicles - , 19,354

TOTAL ASSETS 18,765,963 11,139,099

44

Arif IjazManaging Director & Chief Executive

S.M. JawedDirector

Ibrahim ShamsiDirector

Umer ManshaChairman


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Share Capital Capital Reserves Revenue ReservesIssued, Reserve Reserve for Investment

subscribed for issue of exceptional fluctuation T otaland paid-up bonus shares losses reserve

(Rupees in '000)

Balance as at December 31, 2005 826,142 - , 22,859 3,764 186,500 1,386,904 2,426,169

Profit after tax for the year endedDecember 31, 2006 - , - , - , - , - , 1,576,501 1,576,501

Final dividend for the year endedDecember 31, 2005 - , - , - , - , - , (123,921) (123,921)

Interim dividend @ 10% (Re 1.0/-per share) - , - , - , - , - , (90,876) (90,876)

Transfer to reserve for issue of bonusshares subsequent to the year end - , 82,614 - , - , - , (82,614) - ,

Transfer to reserve for issue of bonusshares during the year - , 113,595 - , - , - , (113,595) - ,

Issue of bonus shares 196,209 (196,209) - , - , - , - , - ,

Transfer to general reserve - , - , - , - , 750,000 (750,000) - ,

Balance as at December 31, 2006 1,022,351 - , 22,859 3,764 936,500 1,802,399 3,787,873

Profit after tax for the year endedDecember 31, 2007 - , - , - , - , - , 4,201,250 4,201,250

Final dividend for the year endedDecember 31, 2006 - , - , - , - , - , (184,023) (184,023)

Interim dividend @ 15% (Rs 1.5/-per share) - , - , - , - , - , (153,353) (153,353)

Balance as at December 31, 2007 1,022,351 - , 22,859 3,764 936,500 5,666,273 7,651,747


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Statement of changes in equity for the year ended December 31, 2007

Generalreserve

Retainedearnings


S.M. JawedDirector


Umer ManshaChairman


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2007 2006(Rupees in '000)

Operating Cash Flows

a) Underwriting activitiesPremiums received 8,358,617 7,221,608Reinsurance premiums paid (2,886,167) (2,146,159)Claims paid (4,730,124) (4,301,969)Surrenders paid (91,511) (77,197)Reinsurance and other recoveries received 953,882 784,511Commissions paid (928,325) (803,117)Commissions received 545,773 327,621

Other underwriting payments (842,811) (913,981)Net cash flow from underwriting activities 379,334 91,317

b) Other operating activitiesIncome tax refund/ (paid) 56,757 (19,505)General and other expenses paid (469,642) (409,081)Loans disbursed (50,073) (52,663)Loan repayments received 46,992 52,636Deposits paid (1,157) (1,254)Other receipts 21,465 55,283Net cash flow from other operating activities (395,658) (374,584)

Total cash flow from all operating activities (16,324) (283,267)

Investment activitiesProfit/ return received 57,879 62,883Dividends received 356,393 308,953Investments purchased (7,494,229) (2,453,400)Proceeds from disposal of investments 7,962,309 2,180,346Fixed capital expenditure - Tangible assets (490,647) (117,244)Fixed capital expenditure - Intangible assets (1,734) (2,516)Proceeds from disposal of fixed assets 5,415 36,331Income received on TFCs 22,466 14,342

Total cash flow from investing activities 417,852 29,695

Financing activitiesDividends paid (321,139) (210,764)

Lease rentals paid (10,577) (7,039)Total cash flow from financing activities (331,716) (217,803)

Net cash inflow/ (outflow) from all activities 69,812 (471,375)Cash at the beginning of the year 873,883 1,345,258

Cash at the end of the year 943,695 873,883


47

Statement of Cash Flows for the year ended December 31, 2007


S.M. JawedDirector


Umer ManshaChairman


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2007 2006(Rupees in '000)

Reconciliation to Profit and Loss Account

Operating cash flows (16,324) (283,267)Depreciation expense (78,610) (60,445)Provision for gratuity (603) (602)Other income - bank deposits 54,635 66,734Profit on disposal of fixed assets 1,599 6,846Finance charge on lease obligations (558) (882)Rental income 494 494Increase in assets other than cash 3,640,746 1,092,505Increase in liabilities other than running finance (2,470,101) (124,529)

1,131,278 696,854OthersProfit on sale of investments 3,973,014 1,044,670Amortization expense (669) (1,313)Increase in unearned premium (1,277,543) (546,971)Amortisation of income on Government Securities - net 122,001 135,780Increase in loans 1,053 27Income tax (refund)/ paid (56,757) 19,505Gratuity paid - , 132Reversal for diminution in value of investments 7,706 9,446Dividend, investment and other income 361,175 308,454Deposits paid 1,157 1,254Income on TFCs 22,470 16,909

3,153,607 987,893Profit before taxation 4,284,885 1,684,747

Definition of cash

Cash comprises of cash in hand, bank balances excluding Rs 10.502 million (2006: Rs 9.345 million) held under lienand other deposits which are readily convertible to cash and which are used in the cash management function on aday-to-day basis.

2007 2006Cash for the purposes of the Statement of Cash Flows consists of: (Rupees in '000)

Cash and other equivalentCash in hand 133,735 79,051

Current and other accounts

Current accounts 346,317 53,656Savings accounts 254,344 526,982

Deposits maturing within 12 monthsFixed and term deposits accounts 209,299 214,194

Total cash and cash equivalents 943,695 873,883


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Statement of Cash Flows for the year ended December 31, 2007


S.M. JawedDirector


Umer ManshaChairman


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Unearned premium Prepaid reinsurancereserve premium ceded Net premium revenue

Class ReinsuranceOpening Closing Opening Closing expense2007 2006

(Rupees in'000)

Direct and

facultative

Fire and property damage 3,636,395 1,280,410 1,920,772 2,996,033 2,464,777 708,055 1,294,868 1,877,9641,118,069 1,238,945

Marine, aviation and transport 1,371,498 53,950 109,785 1,315,663 291,484 8,924 25,976 274,4321,041,231 1,075,343

Motor 3,057,461 1,218,973 1,735,394 2,541,040 46,625 1,581 3,379 44,8272,496,213 2,192,711

Miscellaneous 1,296,805 421,129 486,054 1,231,880 414,337 78,471 120,814 371,994859,886 702,372

Total 9,362,159 2,974,462 4,252,005 8,084,616 3,217,223 797,031 1,445,037 2,569,2175,515,399 5,209,371

Treaty

Proportional 16,419 - , - , 16,419 - , - , - , - , 16,419 70,757

Total 16,419 - , - , 16,419 - , - , - , - , 16,419 70,757

Grand Total 9,378,578 2,974,462 4,252,005 8,101,035 3,217,223 797,031 1,445,037 2,569,2175,531,818 5,280,128


49

Statement of Premiums for the year ended December 31, 2007

Premiumswritten

Premiums Reinsuranceearned ceded


S.M. JawedDirector


Umer ManshaChairman


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Outstanding claims Net claims expenseClass

Opening Closing Opening Closing 2007 2006

(Rupees in'000)

Direct and

facultative

Fire and property damage 1,755,669 1,046,711 2,458,291 3,167,249 751,180 387,629 1,762,763 2,126,3141,040,935 789,375

Marine, aviation and transport 330,498 292,760 401,442 439,180 19,486 149,466 237,895 107,915331,265 428,065

Motor 1,767,632 1,224,540 1,451,129 1,994,221 12,709 375,983 537,633 174,3591,819,862 1,597,988

Miscellaneous 853,463 604,100 670,229 919,592 205,691 440,707 459,577 224,561695,031 499,393

Total 4,707,262 3,168,111 4,981,091 6,520,242 989,066 1,353,785 2,997,868 2,633,1493,887,093 3,314,821

Treaty

Proportional 26,442 39,973 41,529 27,998 -, - , - , - , 27,998 40,030

Total 26,442 39,973 41,529 27,998 -, - , - , - , 27,998 40,030

Grand Total 4,733,704 3,208,084 5,022,620 6,548,240 989,066 1,353,785 2,997,868 2,633,1493,915,091 3,354,851


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Statement of Claims for the year ended December 31, 2007

Reinsurance and otherrecoveries in respect of

outstanding claims

Reinsuranceand otherrecoveriesreceived

Claimsexpenses

Totalclaims paid

Reinsuranceand otherrecoveriesrevenue


S.M. JawedDirector


Umer ManshaChairman


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Income from non-trading investments

Available-for-sale

Return on fixed income securities 117,990 132,382Return on Term Finance Certificates 22,470 16,909Dividend income

- associated undertakings 164,554 86,569- others 196,621 221,885

361,175 308,454501,635 457,745

Gain on sale of available-for-sale investments- associated undertakings 1,730,045 - ,- others 2,242,969 1,044,670

3,973,014 1,044,6704,474,649 1,502,415

Held-to-maturity

Return on fixed income securities 4,011 3,398

4,478,660 1,505,813Reversal for impairment in value of available-for-sale'investments 14.2 7,706 9,446

Net investment income 4,486,366 1,515,259


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Statement of Investment Income for the year ended December 31, 2007


S.M. JawedDirector


Umer ManshaChairman


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4.4 Commission income unearned

Unearned commission income from the reinsurers represents the portion of income relating to theunexpired period of coverage and is recognised as a liability.

4.5 Staff retirement benefits

4.5.1 Defined contribution plan

The company operates an approved contributory provident fund scheme for all its eligibleemployees. Equal monthly contributions to the fund are made by the company and the employeesat the rate of 8.33% of basic salary.

4.5.2 Defined benefit plans

The company operates the following defined benefit plans:

(a) an approved funded gratuity scheme for the employees in Pakistan. Contributions are made tothis scheme on the basis of actuarial recommendations. Actuarial gains and losses are amortisedover the expected future service of the current members;

(b) unfunded gratuity schemes covering the employees in the UAE and KSA as per therequirements of the regulations applicable in those countries. Provision is made in the financialstatements based on the management's best estimate of the liability in respect of these schemes.

4.6 Employees' compensated absences

The company accounts for these benefits in the period in which the absences are earned.

4.7 Amount due to/ from other insurers/ reinsurersAmounts due to/ from other insurers/ reinsurers are carried at cost less provision for impairment.Cost represents the fair value of the consideration to be received/ paid in the future for servicesrendered/ received.

4.8 Creditors, accruals and provisions

Liabilities for creditors and other amounts payable are carried at cost which is the fair value of theconsideration to be paid in the future for the goods and/ or services received, whether or not billedto the company.

Provisions are recognised when the company has a present, legal or constructive obligation as aresult of past events, it is probable that an outflow of resources embodying economic benefits willbe required to settle the obligation and a reliable estimate of the amount can be made. Provisionsare reviewed at each balance sheet date and adjusted to reflect the current best estimate.

4.9 Cash and cash equivalents

Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flowstatement, cash and cash equivalents comprise of cash and bank deposits and short-term bank borrowing and excludes bank balances held under lien.

4.10 Investments

All investments are initially recognised at cost being the fair value of the consideration given andinclude transaction costs. All purchases and sales of investments that require delivery within thetime frame established by regulations or market convention are accounted for at the trade date.Trade date is the date when the company commits to purchase or sell the investment.

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The above investments are classified into the following categories:

- Held-to-maturity- Available-for-sale

4.10.1 Held-to-maturity

Investments with fixed or determinable payments and fixed maturity, where the management hasboth the intent and the ability to hold the investments to maturity, are classified as held-to-maturity.

Subsequent to initial recognition at cost, these investments are measured at amortised cost less anyaccumulated impairment losses. Amortised cost is calculated taking into account any discount orpremium on acquisition by using the effective interest rate method.

4.10.2 Available-for-saleInvestments which are intended to be held for an undefined period of time but may be sold inresponse to the need for liquidity or changes in interest rates are classified as available-for-sale.

Subsequent to initial recognition at cost, these are stated at the lower of cost or market value(market value being taken as lower if the reduction is other than temporary) in accordance with therequirements of the SEC (Insurance) Rules, 2002. The company uses stock exchange quotationsat the balance sheet date to determine the market value of its quoted investments whereas fairvalue of investments in delisted/ unlisted companies is determined by reference to the net assetsand financial position of the investee on the basis of the latest available audited financialstatements.

In case of fixed income securities redeemable at a given date where the cost is different from theredemption value, such difference is amortised uniformly over the period between the acquisitiondate and the date of maturity in determining cost at which these investments are stated as per the

requirements of the SEC (Insurance) Rules, 2002.4.11 Taxation

4.11.1 Current

Provision for current taxation is based on taxable income at the current rates of taxation after takinginto account tax credits and rebates available, if any. The charge for the current taxation alsoincludes adjustments where considered necessary, relating to prior years which arise fromassessments framed/ finalised during the year or required by any other reason.

4.11.2 Deferred

Deferred tax is recognised using the balance sheet liability method on all major temporarydifferences between the amounts attributed to assets and liabilities for financial reporting purposesand amounts used for taxation purposes. In addition, the company also records deferred tax asseton available tax losses. Deferred tax is calculated at the rates that are expected to apply to theperiod when the differences are expected to reverse, based on tax rates that have been enacted orsubstantively enacted by the balance sheet date.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profitswill be available against which the assets can be utilised.

The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced tothe extent that it is no longer probable that sufficient taxable profits will be available to allow allor part of the deferred tax asset to be utilised.

4.12 Premiums due but unpaid

These are recognised at cost, which is the fair value of the consideration given less provision forimpairment, if any.

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4.13 Transactions and balances with Pakistan Reinsurance Company Limited relating to retrocession

Retrocession transactions and balances with Pakistan Reinsurance Company Limited areaccounted for on accrual basis.

4.14 Claims recoveries

Claims recoveries receivable from the reinsurers are recognised as an asset at the same time as theclaims which give rise to the right of recovery are recognised as a liability and are measured at theamount expected to be received.

4.15 Deferred commission expense/ acquisition cost

Commission and other acquisition costs incurred in obtaining and recording insurance andreinsurance policies and/ or treaties are deferred and recognised as an asset on the attachment of the related risks. These costs are charged to the profit and loss account based on the pattern of

recognition of premium revenue.4.16 Prepaid reinsurance expense

Premium for reinsurance contracts operative on a proportional and non-proportional basis isrecorded as a liability on attachment of the underlying risks reinsured or on inception of thereinsurance contract respectively. For proportional reinsurance contracts, the reinsurance expenseis recognised in accordance with the pattern of recognition of premium income to which theyrelate. For non-proportional reinsurance contracts, the reinsurance expense is recognised evenlyin the period of indemnity. The portion of reinsurance premium not recognised as an expense isshown as a prepayment.

4.17 Fixed assets

4.17.1 Tangible

Fixed assets, other than freehold land which is not depreciated and capital work-in-progress, are

stated at cost, signifying historical cost, less accumulated depreciation and any provision forimpairment. Freehold land and capital work-in-progress are carried at cost less impairment losses,if any. Depreciation is charged to income applying varying methods depending upon the natureof the asset, at the rates specified for calculation of depreciation after taking into account residualvalue, if any. The useful lives, residual values and depreciation method are reviewed, andadjusted if appropriate, at each balance sheet date.

Depreciation on additions is charged from the month the assets are available for use while ondisposals, depreciation is charged up to the month in which the assets are disposed off.

The carrying values of tangible fixed assets are reviewed for impairment when events or changesin circumstances indicate that this carrying value may not be recoverable. If any such indicationsexist and where the carrying values exceed the estimated recoverable amounts, the assets arewritten down to their recoverable amount.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, asappropriate, only when it is possible that future benefits associated with the item will flow to the

company and the cost of the item can be measured reliably. All other repairs and maintenance arecharged to income as and when incurred.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount of the assets disposed off. These are included in the profit and loss account currently.

4.17.2 Intangible

These are stated at cost less accumulated amortisation and any provision for impairment.

Amortisation is calculated from the month the assets are available for use using the straight-linemethod, whereby the cost of the intangible asset is amortised over its estimated useful life overwhich economic benefits are expected to flow to the company. The useful life and amortisationmethods are reviewed, and adjusted if appropriate, at each balance sheet date.

The carrying values of intangible assets are reviewed for impairment when events or changes incircumstances indicate that this carrying value may not be recoverable. If any such indications

exist and where the carrying values exceed the estimated recoverable amounts, the assets arewritten down to their recoverable amount.

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4.18 Revenue recognition

4.18.1 Premium income earned

Premium received/ receivable under a policy is recognised as written from the date of attachmentof the policy to which it relates. Premium income under a policy is recognised over the period of insurance from inception to expiry as follows:

(a) For direct business, evenly over the period of the policy;(b) For proportional reinsurance business, evenly over the period of underlying insurance

policies; and(c) For non-proportional reinsurance business, in accordance with the pattern of the

reinsurance service.

Where the pattern of incidence of risk varies over the period of the policy, premium is recognisedas revenue in accordance with the pattern of the incidence of risk.

Administrative surcharge is recognised as premium at the time the policies are written.

4.19 Expenses of management

Expenses of management allocated to the underwriting business represent directly attributableexpenses and indirect expenses allocated to the various classes of business on the basis of netpremium revenue. Expenses not allocable to the underwriting business are charged asadministrative expenses.

4.20 Commission income

Commission income from reinsurers is recognised at the time of issuance of the underlyinginsurance policy by the company. This income is deferred and brought to account as revenue inaccordance with the pattern of recognition of the reinsurance premium to which it relates. Profitcommission, if any, which the company may be entitled to under the terms of reinsurance, isrecognised on accrual basis.

4.21 Investment income

4.21.1 Income from available-for-sale investments

- Return on fixed income investmentsReturn on fixed income securities classified as available-for-sale is recognised on a timeproportion basis.

- DividendDividend income is recognised when the company's right to receive the dividend isestablished.

- Gain/ loss on sale of available-for-sale investmentsGain/ loss on sale of available-for-sale investments is included in income currently.

- Return on Term Finance CertificatesThe difference between the redemption value and the purchase price of the TermFinance Certificates is amortised and taken to the profit and loss account over theterm of the investment.

4.21.2 Income from held-to-maturity investments

Income from held-to-maturity investments is recognised on a time proportion basis taking intoaccount the effective yield on the investments.

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4.22 Other income

4.22.1 Income from car repairs

Income from car repairs is recognised on accrual basis.

4.23 Foreign currencies

Transactions in foreign currencies are accounted for in Rupees at the rates prevailing on the dateof the transaction. Monetary assets and liabilities denominated in foreign currencies are translatedinto Rupees at the rates of exchange which approximate to those prevailing at the balance sheetdate. Exchange differences are taken to the profit and loss account currently.

4.24 Financial instrumentsFinancial assets and liabilities are recognised at the time when the company becomes a party tothe contractual provisions of the instrument and de-recognised when the company loses control of contractual rights that comprise the financial assets and in the case of financial liabilities when theobligation specified in the contract is discharged, cancelled or expired. Any gain or loss on the de-recognition of the financial assets and liabilities is included in the profit and loss account currently.

Financial instruments carried on the balance sheet include cash and bank, loans, investments,premiums due but unpaid, amounts due from other insurers/ reinsurers, premium and claimreserves retained by cedants, accrued investment income, reinsurance recoveries againstoutstanding claims, sundry receivables, provision for outstanding claims, amounts due to otherinsurers/ reinsurers, accrued expenses, other creditors and accruals, short term borrowings,liabilities against assets subject to finance lease and unclaimed dividends. The particular

recognition methods adopted are disclosed in the individual policy statements associated witheach item.

4.25 Dividend and appropriation to reserves

Dividend and appropriation to reserves are recognised as liability in the company's financialstatements in the year in which these are approved.

4.26 Off setting

A financial asset and a financial liability is offset and the net amount is reported in the balancesheet when the company has a legally enforceable right to set-off the recognised amounts and itintends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

4.27 Earnings per share

The company presents basic earnings per share (EPS) for its shareholders. Basic EPS is calculatedby dividing the profit or loss attributable to ordinary shareholders of the company by the weightedaverage number of ordinary shares outstanding during the period / year.

4.28 Impairment

The carrying amount of the assets is reviewed at each balance sheet date to determine whetherthere is any indication of impairment of any asset or a group of assets. If such indication exists, therecoverable amount of such assets is estimated and the impairment losses are recognised in theprofit and loss account currently.

Provisions for impairment are reviewed at each balance sheet date and adjusted to reflect thecurrent best estimate. Changes in the provisions are recognised as income/ expense currently.

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6.1 The reserve for exceptional losses represents the amount set aside in prior years up to December 31, 1978, inorder to avail the deduction while computing the taxable income under the old Income Tax Act of 1922.Subsequent to the introduction of repealed Income Tax Ordinance, 1979, which did not permit the saiddeduction, the company discontinued the setting aside of amounts as reserve for exceptional losses.

6.2 This amount has been set aside in prior years for utilisation against possible diminution in the value of investments.

2007 2006(Rupees in '000)

7 PROVISION FOR OUTSTANDING CLAIMS (including IBNR)

Related parties 297,649 232,085

Others 4,724,971 2,975,9995,022,620 3,208,084

8 STAFF RETIREMENT BENEFITS - Unfunded staff gra tuity

Opening balance 3,085 2,615Charge for the year 603 602

3,688 3,217Payment made during the year - , (132)

3,688 3,085

8.1 The above provision relates to the company's operations in the KSA and the UAE. Actuarial valuation has notbeen obtained as the liability is not material.

2007 2006Note (Rupees in '000)9 OTHER CREDITORS AND ACCRUALS

Cash margin against performance bonds 304,907 229,421Sundry creditors 131,995 75,673Commission payable 281,001 241,918Federal insurance fee 16,846 14,267Payable to Employee's Provident Fund 9.1 932 - ,Central excise duty 50,204 46,233

785,885 607,5129 .1 Employees' Prov iden t Fund

During the year an amount of Rs 18.125 million (2006: Rs 18.939 million) has been charged to the profit andloss account in respect of the company's contributions to the Employees' Provident Fund.

10 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE

2007 2006Later than one Later than one

Not later than year and not Total Not later than year and not Totalone year later than five one year later than five

years years(Rupees in '000)

Minimum lease payments - , - , - , 10,787 - , 10,787Future finance charge - , - , - , (768) - , (768)Present value of minimum

lease payments - , - , - , 10,019 - , 10,019

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11 CONTINGENCIES

The income tax assessments of the company have been finalised up to and including the tax year2004. However, the company has filed appeals in respect of certain assessment years which mainlyrelate to the following:

(i) The Deputy Commissioner of Income Tax (DCIT) has finalised assessments for theassessment year 1999-2000 by taxing capital gains at the full rate of 33%. The aggregate taxliability assessed by the DCIT amounted to Rs 48.205 million against which the company hasmade a total provision of Rs 44.141 million resulting in a shortfall of Rs 4.064 million. Thecompany filed appeals with the Commissioner of Income Tax (Appeals) and ITAT which weredecided against the company. Consequently the company has filed an appeal before theHonorable High Court of Sindh which has reserved the judgment in this respect;

ii) The Additional Commissioner/ Taxation Officer has reopened assessments for the assessmentyears 2000-2001 and 2001-2002 by taxing bonus shares received by the company during theabove mentioned periods resulting in an additional tax liability of Rs 14.907 million. An appealwas filed before the Commissioner of Income Tax (Appeals) who cancelled the amended orderpassed by the Additional Commissioner and allowed relief to the Company but the Taxdepartment has filed an appeal before the ITAT against the order of the AdditionalCommissioner. The company has also filed an appeal before the ITAT which is currentlypending for adjudication; and

iii) While finalising the assessment for the year 2002-03, the Deputy Commissioner of Income Tax(DCIT) has reduced the business loss for the year by Rs 88.18 million by adjusting the dividendincome against this loss. The company maintains that it is entitled to carry the gross loss forwardfor adjustment against the future taxable income and dividend income for the year should betaxed separately at reduced rate. The appeals of the company in this respect have been rejectedby the Commissioner of Income Tax (Appeals), the Income Tax Appellate Tribunal, and theSindh High Court. The company has now filed a reference application with the Supreme Courtof Pakistan. The management is confident that the matter will be eventually decided in favorof the company and has consequently not made any provision against the additional tax liabilityof Rs 26.455 million which may arise in this respect.

Pending resolution of the above-mentioned appeals filed by the company, no provision has beenmade in these financial statements for the aggregate amount of Rs 45.426 million (2006: 95.141million) as the management is confident that the eventual outcome of the above matters will be infavor of the company.


12 CASH AND BANK DEPOSITS

Cash and other equivalentsCash in hand 537 5,719Cheques in hand 133,198 73,332

133,735 79,051Current and other accountsCurrent accounts 346,317 53,656Savings accounts 254,344 526,982

600,661 580,638Deposits maturing within 12 months

Fixed and term deposits 12.1 219,801 223,539954,197 883,228

12.1 These include fixed deposits amounting to Rs. 82.415 million (AED 4.935 million) [2006:(Rs. 81.675 million), (AED 4.935 million)] kept in accordance with the requirements of InsuranceRegulations applicable in the UAE for the purpose of carrying on business in the country. Thesealso include liens against cash deposits of Rs. 6.08 million (AED 0.364 million) [2006:(Rs. 6.03million), (AED 0.364 million)] with banks outside Pakistan and Rs. 4.422 million (2006: Rs. 3.315million) with banks in Pakistan essentially in respect of guarantees issued by the banks on behalf of the company for claims under litigation filed against the company.

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12.2 Cash and bank deposits include an amount of Rs. 322.619 million (2006: Rs. 462.844 million) held withrelated parties.


13 LOANS - considered good

SecuredExecutives 13.1 6,008 4,359Employees 13.1 48,282 46,850

54,290 51,209Less: Recoverable within one year shown under sundry receivables

Executives 20 5,563 4,051Employees 20 21,415 20,899

26,978 24,95027,312 26,259

Loans to employees are granted in accordance with the terms of their employment for the purchase of vehicles, purchase/ construction of houses and for other purposes as specified in the SEC (Insurance) Rules,2002. These loans are recoverable in monthly installments over various periods and are secured by registrationof vehicles, deposit of title documents of property with the company and against provident fund balances of the employees. The loans are interest free except for those granted for the purchase/ construction of houseswhich carry interest at the rate of 5% (2006: 5%) per annum.

13.1 Reconciliation of carrying amount of loans2007 2006

Executives Others Total Executives Others Total(Rupees in '000)

Opening balance 4,359 46,850 51,209 1,346 49,836 51,182Disbursements 10,355 39,718 50,073 6,830 45,833 52,663Repayments (8,706) (38,286) (46,992) (3,817) (48,819) (52,636)Closing balance 6,008 48,282 54,290 4,359 46,850 51,209


14 INVESTMENTS

In related partiesAvailable-for-sale

Marketable securities 14.3 4,841,403 1,616,916Less: Provision for impairment in value of investments (230) - ,

4,841,173 1,616,916Others

Available-for-saleMarketable securities 14.3 2,112,671 1,469,619

Less: Provision for impairment in value of investments (28,092) (36,028)2,084,579 1,433,591Fixed income investments 14.4 1,180,100 1,430,030

3,264,679 2,863,621Held-to-maturity

Defence Saving Certificates - deposited with theState Bank of Pakistan in accordance with Section 29of the Insurance Ordinance, 2000 26,250 22,239

3,290,929 2,885,8608,132,102 4,502,776

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No. of Shares/ FaceCertificates value

2007 2006 Rupees (Rupees in '000)

14.3.1 Quoted - related parties

14,327 -* 10 Mehran Sugar Mills Ltd. 445 -[Equity held 0.15% (2006: 0)]

- 14,412 10 Nishat (Chunian) Ltd. - 168

[2006: Equity held 0.019%]868,035 -* 10 Nishat Mills Ltd. 18,586 -[Equity held 0.54% (2006: 0)]

- 88,750 10 Ibrahim Fibers Ltd. - 1,227[2006: Equity held 0.029%]

6,204,000 6,204,000 10 Hub Power Company Ltd. 173,156 173,156[Equity held 0.54% (2006: 0.536%)]

- 12,540 10 National Investment Trust - 161

1,298,969 260,369 10 Oil and Gas Development Company Ltd. 142,167 18,642[Equity held 0.030% (2006: 0.60%)]

17,011,379 11,044,360 10 MCB Bank Limited 4,507,049 1,423,562[Equity held 2.71% (2006: 2.158%)]

4,841,403 1,616,916

*Mehran Sugar Mills Limited and Nishat Mills Limited became associated undertakings due to common directorship in

2007. The shareholding in these companies in prior years is shown under quoted - others.

14.1 At December 31, 2007, the fair value of available-for-sale securities was Rs. 11,682.605 million (2006: Rs8,039.516 million). As per the company's accounting policy, available-for-sale investments are stated at lowerof cost or market value (market value being taken as lower if the reduction is other than temporary). However,International Accounting Standard (IAS) 39, " Financial Instruments: Recognition and Measurements" dealingwith the recognition and measurement of financial instruments requires that these instruments should bemeasured at fair value. Accordingly, had these investments been measured at fair value, their carrying valueas on December 31, 2007 would have been higher by Rs 3,547.431 million (2006: Rs 3,522.950 million).

2007 200614.2 Reconciliation of provision for impairment

in value of investments (Rupees in '000)

Opening provision 36,028 56,761Reversal for the year (7,706) (9,446)Write-off during the year - (11,287)Closing provision 28,322 36,028

Note 2007 2006

14.3 Marketable securities - Available for sale Cost Provision Carrying Carryingthere against Value Value

(Rupees in '000)In related parties:- Listed shares 4,841,403 230 4,841,173 1,616,755- NIT Units - , - , - , 161

14.3.1 4,841,403 230 4,841,173 1,616,916Others:- Listed shares 14.3.2 1,782,676 28,092 1,754,584 1,008,085- Modaraba certificates 14.3.3 - , - , - , 24,925- Term Finance Certificates 14.3.4 182,740 - , 182,740 164,683- Unlisted/ delisted shares

and debentures 14.3.5 120 - , 120 120- Mutual Fund Certificates 14.3.6 146,974 - , 146,974 235,778- NIT Units 161 - , 161 - ,

2,112,671 28,092 2,084,579 1,433,5916,954,074 28,322 6,925,752 3,050,507

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- , 868,035 10 Nishat Mills Ltd. - , 18,586- , 58,818 10 Paramount Spinning Mills Ltd. - , 1,711

14,437 14,437 10 Zahur Textile Mills Ltd. 210 210

Synthetic And Rayon- , 208,745 10 Dewan Salman Fibers Ltd. - , 6,537- , 182,400 10 Pakistan Synthetics Ltd. - , 1,824- , 44,500 10 Rupali Polyester Ltd. - , 2,322

Jute112,866 112,866 10 Crescent Jute Products Limited 2,183 2,183109,807 109,807 10 Mehran Jute Mills Limited 1,150 1,150

Sugar And Allied- , 6,020 10 Al-Noor Sugar Mills Ltd. - , 122- , 89,000 10 Ansari Sugar Mills Ltd. - , 887

41,535 304,035 10 Crescent Sugar Mills & Distillery Ltd. 542 3,970- , 129,635 10 Dewan Sugar Mills Ltd. - , 4,189- , 26,996 10 Faran Sugar Mills Ltd. - , 504- , 71,327 10 Mehran Sugar Mills Ltd. - , 2,216- , 11,142 10 Mirpurkhas Sugar Mills Ltd. - , 239

Cement- , 1,322 10 Cherat Cement Company Limited - , 32- , - , 10 Dadabhoy Cement Industries Ltd. - , - ,

1,173,287 1,173,287 10 D.G. Khan Cement Company Limited 34,185 34,18590,000 - , 10 Lucky Cement Ltd. 11,471 - ,

Refinery20,000 - , 10 Attock Refinery Ltd. 5,406 - ,5,480 50,000 10 National Refinery Limited 743 549

102,761 104,761 10 Pakistan Refinery Limited 11,743 3,057

Power Generation & Distribution- , 231,450 10 Karachi Electric Supply Corporation Limited - , 3,272- , 98,500 10 Sitara Energy Limited - , 2,095

Oil And Gas Marketing Companies- , 820,339 10 Pakistan State Oil Co. Ltd. - , 119,870

29,700 29,700 10 Shell Gas LPG Pakistan Ltd. 533 533280,576 283,276 10 Shell Pakistan Ltd. 73,400 22,417

- , 1,786,779 10 Sui Southern Gas Co. Ltd. - , 22,342

Oil And Gas Exploration Companies198,176 328,276 10 Pakistan Oilfields Limited 44,624 13,94011,710 136,500 10 Pakistan Petroleum Limited 3,010 16,548

Engineering883,096 671,501 10 International Industries Limited 77,490 3,485

- , 3,000 10 Metropolitan Steel Corporation Limited - , 46

Automobile Assembler301,378 303,078 5 Al-Ghazi Tractors Limited 43,030 2,922

- , 77,000 10 Indus Motor Company Limited - , 2,028202,007 207,907 10 Millat Tractors Limited 35,335 23,954

Cables And Electrical Goods296,480 223,485 10 Pakistan Cables Limited 27,717 3,768171,930 172,430 10 Siemens (Pakistan) Engineering Company Limited 135,531 22,019

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Transport47,400 47,400 10 Pan Islamic Steamship Company Limited 457 456

Technology And Communication244,500 665,000 10 Pakistan Telecommunication Company Limited 12,888 28,131

Fertilizer482,338 1,336,094 10 Engro Chemical Pakistan Limited 66,759 56,170266,078 431,078 10 Fauji Fertilizer Bin Qasim 11,758 8,518

3,082,285 2,385,285 10 Fauji Fertilizer Company Limited 283,214 179,108

Pharmaceutical1,294,596 1,312,396 10 Abbot Laboratories Pakistan Limited 158,239 36,348

- , 7,570 10 Ferozsons Laboratories Limited - , 141707,976 575,581 10 GlaxoSmithKline Pakistan Limited 84,811 5,299

Chemical77,905 78,905 10 BOC Pakistan Limited 13,881 1,082

- , 80,133 10 ICI Pakistan Limited - , 6,224- , 208,729 10 Pakistan PTA Limited - , 1,851

70,657 70,757 10 Clariant Pakistan Limited 11,762 1,150

Paper And Board- , 89,148 10 Cherat Papersack Limited - , 2,617

9,209 384,304 10 Packages Limited 1,054 36,693109,619 451,616 10 Security Papers Limited 1,286 6,359

Vanaspati And Allied Industries- , 11,200 10 Kakakhel Pakistan Limited - , 310

Food And Personal Care Products15,630 147,630 10 Ismail Industries Limited 233 2,204

442,557 411,416 10 Murree Brewery Company Limited 34,565 5,60732,783 32,583 10 Nestle Milk Pak Limited 18,980 83154,870 54,870 10 Rafhan Maize Products Limited 44,644 2,898

- , 5,722 10 Treet Corporation Limited - , 8626,336 26,256 50 Unilever Pakistan Limited 35,846 17,959

Glass And Ceramics26,831 26,831 10 Medi Glass Limited 419 417

Miscellaneous- , 86,266 10 United Distributors Pakistan Limited - , 2,239

1,782,676 1,044,11314.3.3 Modaraba Certificates

- , 668,101 10 B.R.R. International Modaraba - , 8,288- , 40,322 10 First Fidelity Leasing Modaraba - , 541- , 22,926 10 Habib Bank Modaraba - , 274- , 821,855 10 Standard Chartered Modaraba - , 15,822

- , 24,925



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14.3.4 Term Finance Certificates

9,992 9,996 5,000 Bank Alfalah Ltd. 49,962 49,9812,999 - , 5,000 IGI Investment Bank Ltd. 14,997 - ,2,999 3,000 5,000 First International investment Bank Ltd. - , 15,0001,999 2,000 5,000 Jahangir Siddiqui & Company Ltd. 9,996 10,0001,000 1,000 5,000 Orix Leasing Pakistan Ltd. 4,999 5,0005,996 5,999 5,000 Pakistan Mobile Communication Ltd. 29,982 29,9943,943 3,945 5,000 Prime Commercial Bank Ltd. 19,715 19,723

2,623 2,999 5,000 Searle Pakistan Ltd. 13,117 14,9973,996 3,998 5,000 Soneri Bank Ltd. 19,980 19,9883,998 - , 5,000 Allied Bank Ltd. 19,992 - ,

182,740 164,68314.3.5 Unlisted / delisted shares and debentures

12 12 10,000 Tariq Cotton Mills Ltd. (Karikot Textile) 120 120120 120

14.3.6 Mutual Fund Certificates

(Open Ended) Mutual Funds- , 203,557 50 AKD Opportunity Fund - , 10,000- , 38,809 500 Atlas Income Fund - , 20,000

12,349 11,140 100 Dawood Money Market Fund 1,000 1,000- , 194,231 100 KASB Liquid Fund - , 20,000- , 19,825 500 UTP-Income Fund - , 10,000

205,296 - , 100 HBL Income Fund 20,000 - ,101,514 - , 100 AMZ Plus Income Fund 10,000 - ,

(Close Ended) Mutual Funds400,000 400,000 10 Pakistan Strategic Allocation Fund 4,000 4,000

2,757,705 4,698,205 10 PICIC Investment Fund 33,657 57,3409,277,937 13,126,437 10 UTP Growth Fund (Formerly Known as Abamco) 78,317 110,803

- , 263,500 10 UTP Large Capital Fund - , 2,635146,974 235,778

14.4 Fixed Income Investments

Defence Savings Certificates 1,180,100 1,430,030

1 5 PR EM IU MS DU E B UT UN PAID - U nsecu re d Note

Considered good 3,203,751 2,053,498Considered doubtful 86,202 145,709

3,289,953 2,199,207Less: Provision for doubtful balances 15.1 (86,202) (145,709)

3,203,751 2,053,49815.1 Reconciliation of provision for doubtful balances

Opening provision 145,709 120,730Charge for the year 19,835 24,979Written off during the year (79,342) - ,

Closing provision 86,202 145,709



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16 AMOUNTS DUE FROM OTHER INSURERS/REINSURERS - U nsecured

Considered good 255,570 220,386Considered doubtful 45,396 31,396

300,966 251,782Less: Provision for doubtful balances 16.1 (45,396) (31,396)

255,570 220,38616.1 Reconciliation of provision for doubtful balances

Opening provision 31,396 10,157Charge for the year 14,000 21,239Closing provision 45,396 31,396

17 ACCRU ED INVESTM ENT INCO ME

Return accrued on Term Finance Certificates 4,066 4,062Dividend income

- associated undertakings 2,273 456- others 12,944 9,979

15,217 10,435Return on deposit accounts

- associated undertakings 2,571 10,074- others 7,576 3,317

10,147 13,391Others 1,579 1,085

31,009 28,97318 REINSURANCE RECOVERIES AGAINST

OUTSTANDING CLAIMS

These are unsecured and considered to be good.

19 PREPAYMENTS

Prepaid reinsurance premium ceded 1,445,037 797,031Others 74,204 16,587

1,519,241 813,61820 SUNDRY RECEIVABLES

Considered goodCurrent portion of long-term loans

Executives 13 5,563 4,051Employees 13 21,415 20,899

Other advances 39,960 26,129Staff Gratuity Fund 20.1.1 57,693 57,539Receivable from Staff Gratuity Fund 22,167 37,000Receivable from Employees' Provident Fund - , 59,451Security deposits 20,516 20,386Stationery in hand 2,011 3,241Sundry debtors 103,502 19,101

272,827 247,797Miscellaneous

Considered good 51 3,659Considered doubtful 19,755 19,755

19,806 23,414292,633 271,211

Less: Provision for doubtful balances (19,755) (19,755)272,878 251,456

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20.1 Staff Gratuity Fund

The company operates an approved funded gratuity scheme for all employees. Actuarial valuation iscarried out every year and the latest valuation was carried out as at December 31, 2007.

The following significant assumptions have been used for valuation of this scheme:Rate per annum

- Valuation discount rate 11.00%- Expected rate of increase in salary level 8.89%- Rate of return on plan assets 11.00%

The fair value of the schemes assets and liabilities for past services of the employees at the latest valuation

date are as follows:2007 2006

(Rupees in '000)

Present value of defined benefit obligation at the end of the year 173,663 176,626Fair value of plan assets at the end of the year (282,517) (256,086)

(108,854) (79,460)Net unrecognised actuarial gains 51,161 21,921Net assets (57,693) (57,539)

20.1.1 Amounts recognised in the balance sheet

Liabilities - , - ,Assets 57,693 57,539Net assets 57,693 57,539

20.1.2 The amounts charged in profit and loss are as follows:

Current service cost 10,199 13,034Interest on obligation 17,975 18,130Expected return on plan assets (26,716) (25,639)Actuarial (gains)/ losses recognised during the year (1,612) 42Loss on curtailment and settlement - , 6,750Total gratuity expense for the year for funded obligation (154) 12,317

20.1.3 Actual return on plan assets 53,568 52,139

20.1.4 Changes in present value of the defined benefit obligation

Present value of defined benefit obligation at thebeginning of the year 176,626 200,379Current service cost 10,199 13,034Interest cost 17,975 18,130Actuarial (gain) / loss (4,000) 4,423Loss on curtailment and settlement - , 6,750Benefits paid (27,137) (66,090)Present value of defined benefit obligation at the end of the year 173,663 176,626

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2007 2006(Rupees in '000)

20.1.5 Changes in the fair value of plan assets

Fair value of plan assets at the beginning of the year 256,086 270,037Expected return 26,716 25,639Actuarial gain 26,852 26,500Contributions made - , - ,Benefits paid (27,137) (66,090)Fair value of plan assets at the end of the year 282,517 256,086

The Company is not expected to contribute to the gratuity fund in 2008.

2007 2006(Rupees in (Rupees in

'000) % '000) %20.1.6 Fund Investment

Government Bonds 141,159 50% 176,651 69%Other Bonds 41,574 15% 42,067 16%Unit Trusts 89,996 32% 67,469 26%Cash 34,046 12% 4,899 2%Creditors (24,258) (9%) (35,000) (13%)

282,517 100% 256,086 100%

20.1.7 Amounts/ percentages for the current and previous four periods

The company amortises gains and losses over the expected remaining service of current plan members. Thefollowing table shows obligation at the end of each year and the proportion thereof resulting from experienceloss during the year. Similarly, it shows plan assets at the end of the year and proportion resulting fromexperience gain during the year.

2007 2006 2005 2004 2003(Rupees in '000)

Defined benefit obligation (173,663) (176,626) (200,739) (202,824) (158,746)Plan assets 282,517 256,086 270,037 279,748 235,708Surplus 108,854 79,460 69,298 76,924 76,962

Experience adjustments on plan liabilities -2% 3% -5% 12% 12%Experience adjustments on plan assets 10% 10% -5% 9% 9%

2007 2006(Rupees in '000)

21 FIXED ASSETSOwned assets - tangible 21.1 700,259 337,530Owned assets - intangible 21.1 3,308 2,243Leased assets 21.1 - , 19,354

703,567 359,127

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2007Owned assets Leased assets

Furniture Motor Machinery Computers Intangible Motor TotalLand & and vehicles and and related Total tangible computer Total vehicles TotalAssetsBuildings fixtures equipment accessories assets software

(Rupees in '000)

21.1 The following is a statement of operating fixed assets :

At January 1, 2007

Cost 52,410 50,734 270,257 109,201 117,031 599,633 7,362 606,995 25,696 25,696632,691Accumulated depreciation /

amortisation 19,351 27,422 71,629 65,142 78,559 262,103 5,119 267,222 6,342 6,342273,564Net book value 33,059 23,312 198,628 44,059 38,472 337,530 2,243 339,773 19,354 19,354359,127

Year ended December 31, 2007

Opening net book value 33,059 23,312 198,628 44,059 38,472 337,530 2,243 339,773 19,354 19,354359,127

Additions 151,666 3,293 234,272 16,758 19,812 425,801 1,734 427,535 -, - , 427,535

DisposalsCost - , 1,206 4,654 2,990 5,659 14,509 - , 14,509 - , - , 14,509Depreciation/ amortisation - , 721 2,855 1,683 5,434 10,693 - , 10,693 - , - , 10,693

- , 485 1,799 1,307 225 3,816 - , 3,816 - , - , 3,816

Transfer from leased assetsCost - , - , 25,696 - , - , 25,696 - , 25,696 25,696 25,696 - ,Depreciation/ amortisation - , - , 6,342 - , - , 6,342 - , 6,342 6,342 6,342 - ,

19,354 19,354 19,354 19,354 19,354 - ,

Depreciation/ amortisationcharge for the year 3,670 3,747 48,533 7,541 15,119 78,610 669 79,279 -, - , 79,279

Closing net book value 181,055 22,373 401,922 51,969 42,940 700,259 3,308 703,567 -, - , 703,567

At December 31, 2007

Cost 204,076 52,821 525,571 122,969 131,184 1,036,621 9,096 1,045,717 -, - , 1,045,717Accumulated depreciation /

amortisation 23,021 30,448 123,649 71,000 88,244 336,362 5,788 342,150 -, - , 342,150

Net book value 181,055 22,373 401,922 51,969 42,940 700,259 3,308 703,567 -, - , 703,567Depreciation rate per annum 10% 15% 15%&16.67% 15% 30% 20% 15%


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At January 1, 2006

Cost 52,410 46,323 242,543 106,881 101,351 549,508 4,846 554,354 26,026 26,026 580,380Accumulated depreciation /

amortisation 15,678 27,366 66,415 63,369 70,184 243,012 3,806 246,818 2,952 2,952 249,770Net book value 36,732 18,957 176,128 43,512 31,167 306,496 1,040 307,536 23,074 23,074 330,610

Year ended December 31, 2006

Opening net book value 36,732 18,957 176,128 43,512 31,167 306,496 1,040 307,536 23,074 23,074 330,610

Additions - , 11,229 74,606 11,063 20,346 117,244 2,516 119,760 -, - , 119,760

DisposalsCost - , 6,818 46,892 8,743 4,666 67,119 - , 67,119 330 330 67,449Depreciation/ amortisation - , 3,727 24,298 5,640 4,274 37,939 - , 37,939 25 25 37,964

- , 3,091 22,594 3,103 392 29,180 - , 29,180 305 305 29,485Depreciation/ amortisation

charge for the year 3,673 3,783 29,512 7,413 12,649 57,030 1,313 58,343 3,415 3,415 61,758Closing net book value 33,059 23,312 198,628 44,059 38,472 337,530 2,243 339,773 19,354 19,354 359,127

At December 31, 2006Cost 52,410 50,734 270,257 109,201 117,031 599,633 7,362 606,995 25,696 25,696 632,691Accumulated depreciation /

amortisation 19,351 27,422 71,629 65,142 78,559 262,103 5,119 267,222 6 ,342 6,342 273,564Net book value 33,059 23,312 198,628 44,059 38,472 337,530 2,243 339,773 19,354 19,354 359,127

Depreciation rate per annum 10% 15% 15%&16.67% 15% 30% 20% 15%

During the year, leased motor vehicles amounting to Rs. 25.696 million (having net book value of Rs. 19.354 million)were transferred to owned motor vehicles at the end of lease term.

2006Owned assets Leased assets

Furniture Motor Machinery Computers Intangible Motor TotalBuildings and vehicles and and related Total tangible computer Total vehicles Total Assets

fixtures equipment accessories assets software

(Rupees in '000)


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74

Accumu-lated Book Sale Mode of

depreci- value proceeds disposalation

(Rupees in '000)

Furniture & Fixtures 60 26 34 - , Full & Final Nadeem Shaikh,Karachi.Settlement (Ex-Employee)

175 79 96 - , --do-- Iqbal Broker,Hyderabad.(Ex-Employee)

Items having book valuebelow Rs.50,000 971 616 355 308

1,206 721 485 308

Motor Vehicles 71 10 61 228 Auction Yasir Iqbal Zubairi , Karachi.130 96 34 237 Negotiation Khwaja Salman Iqbal, Karachi.

250 84 166 - , Gift to employee Sultan Ahmed Siddiqui,Karachi.(Ex-Executive)295 268 27 295 Negotiation Shahid Hussain Jillani, Lahore.300 211 89 330 --do-- Abdul Razaq, Karachi.400 306 94 510 Auction S.M.Qamar Shah, Karachi.431 291 140 216 Negotiation Tariq Khan, Lahore.621 548 73 402 Auction Obaid Uddin, Karachi.692 524 168 455 Negotiation Waseem Shahzad Malik, Lahore.

1,433 509 924 545 Auction Sohail Farooq, Karachi.

Items having book valuebelow Rs.50,000 31 8 23 5

4,654 2,855 1,799 3,223

Machinery & Equipment 51 42 9 2 Negotiation Electronic Office Product, Karachi.54 46 8 - , Full & Final Mohd Edrees.Karachi. (Ex-Executive)

Settlement57 47 10 7 Negotiation Fayaz, Lahore.

60 15 45 - , Full & Final Allah Nawaz ( Ex- Employee)Settlement75 61 14 - , --do-- Sultan Ahmed Siddiqui, Karachi.

( Ex-Executive)83 60 23 27 --do-- Mohd Edrees, Karachi.

(Ex-Executive)83 22 61 - , --do-- Mehmood (Ex-Employee)

103 77 26 2 Negotiation Abdul Basit, Karachi.119 111 8 12 --do-- Shahbaz Cooling Centre, Lahore.

Items having book valuebelow Rs.50,000 2,305 1,202 1,103 1,761

2,990 1,683 1,307 1,811

Computer 2,782 2,632 150 73 Auction Mushtaq, Karachi.Items having book valuebelow Rs.50,000 2,877 2,802 75 -, Written off

5,659 5,434 225 73

14,509 10,693 3,816 5,415

2007 2006(Rupees in '000)

21.2 Capital work-in-progress

Tangible - Computer and related accessories 20,167 -,Intangible - Computer software 44,679 -,

64,846 -,

22.1.1Details of tangible assets disposed off during the year are as follows:

Description Cost Particulars of purchaser


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Note 2007 2006(Rupees in ' 000)

22 EXPENSES

Salaries and wages 596,760 583,756Rent, rates and taxes 51,589 45,552Utilities 34,147 31,867Communication 38,394 35,717Printing and stationery 21,726 17,542Traveling and entertainment 77,559 54,429Repairs and maintenance 142,087 109,829Advertisement and sales promotion 87,359 38,183Amortisation of intangible asset 21.1 669 1,313Others 4,688 4,932

1,054,978 923,12023 OTHER INCOME

Gain on sale of fixed assets 1,599 6,846Income from car repairs 10,378 24,052Interest on loans to employees 848 978Interest on reserve kept with the State Bank of Pakistan 859 936Return on bank deposits 53,776 61,150Return on saving accounts - , 4,648Miscellaneous 3,706 21,094

71,166 119,70424 GENERAL AND ADMINISTRATION EXPENSES

Salaries and wages 24.1 171,946 231,613Depreciation 21.1 78,610 60,445Directors' fee 380 10Legal and professional expenses 40,541 35,207Auditors' remuneration 24.2 1,916 2,814Donations 24.3 1,032 882Provision for doubtful receivables 33,835 46,218Others 70,107 63,737

398,367 440,926

24.1 These include Rs 18.574 million (2006: Rs 31.858 million)in respect of staff retirement benefits.

24.2 Auditors' remuneration

Audit fees 1,700 1,700Other certifications and tax advisory services 30 605Out of pocket expenses 186 509

1,916 2,81424.3 None of the directors or their spouses had any

interest in the donee.

25 PROVISION FOR TAXATIONCurrent

for the year 31,187 95,707for prior years 52,448 (28,374)

83,635 67,333Deferred

for the year - , 35,784for prior years - , 5,129

- , 40,91383,635 108,246

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2007 2006(Rupees in '000)

25.1 Relationship between tax expense and accounting profit

Profit before taxation 4,284,885 1,684,747

Tax at the applicable rate of 35% 1,499,710 589,661Tax effect of income taxed at lower rate (1,468,523) (458,170)

31,187 131,491Prior year's tax - current 52,448 (28,374)

- deferred - , 5,12983,635 108,246

26 EARNINGS PER SHARE

There is no dilutive effect on basic earnings per share which is based on:

Net profit after tax for the year 4,201,250 1,576,501

(Number of shares)Weighted average number of shares 102,235,159 102,235,159

(Rupees)Basic earnings per share 41.09 15.42

27 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

2007 2006Chief Chief Executive Directors Executives Total Executive Directors Executives Total

(Rupees in '000)

Fee - , 380 - , 380 - , 10 - , 10

Managerialremuneration 5,025 - , 103,739 108,764 4,193 - , 71,371 75,564

Allowances andperquisites 2,774 - , 67,499 70,273 2,204 - , 57,748 59,952

7,799 380 171,238 179,417 6,397 10 129,119 135,526Number 1 10 73 84 2 8 66 76

In addition, the Chief Executive and executives are also provided with free use of the company's cars, certain household items,furniture and fixtures and equipment in accordance with the policy of the company.

28 TRANSACTIONS WITH RELATED PARTIES

The company has related party relationships with its employee benefit plans, key management personnel and other parties.Transactions are entered into with such related parties for the issuance of policies to and disbursements of claims incurred by themand payments of rentals for the use of premises rented from them.


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There are no transactions with key management personnel other than their terms of employment. These transactions are disclosed innotes 13, 21 and 27 to the financial statements. Particulars of transactions with the company's staff retirement benefit schemes aredisclosed in note 20 to the financial statements. Investments in and balances outstanding with related parties (associated undertakings)have been disclosed in the relevant balance sheet notes. Other transactions with related parties (associated undertakings) are summarisedas follows:

2007 2006(Rupees in '000)

Premium underwritten 474,120 341,805Premium received 385,827 365,286Claims paid 210,241 212,739Rent paid 2,138 6,951Dividend received 162,282 86,113Dividend paid 107,284 81,908Income on deposit accounts 42,703 6,149

(Number of shares)

Bonus shares received 1,802,019 1,701,560Bonus shares issued - , 7,473,857

29 SEGMENT REPORTING

Class of business wise revenue and results have been disclosed in the profit and loss account prepared in accordance with the requirementsof the Insurance Ordinance, 2000 and the SEC (Insurance) Rules, 2002. The following is a schedule of class of business wise assets andliabilities:

2007Fire and Marine, UnallocatedProperty Aviation and Motor Miscellaneous Treaty Corporate TotalDamage Transport Assets/

Liabilities(Rupees in '000)

OTHER INFORMATION

Segment assets 4,616,159 779,481 1,805,952 1,140,817 6,286 -, 8,348,695Unallocated assets - , - , - , - , - , 10,417,268 10,417,268Total assets 4,616,159 779,481 1,805,952 1,140,817 6,286 10,417,26818,765,963

Segment liabilities 4,852,831 617,630 3,416,857 1,285,850 42,799 -, 10,215,967Unallocated liabilities - , - , - , - , - , 898,249 898,249Total liabilities 4,852,831 617,630 3,416,857 1,285,850 42,799 898,24911,114,216

Capital expenditure - , - , - , - , - , 492,381 492,381

2006

Fire and Marine, UnallocatedProperty Aviation and Motor Miscellaneous Treaty Corporate TotalDamage Transport Assets/

Liabilities(Rupees in '000)

OTHER INFORMATION

Segment assets 2,077,245 527,011 1,214,876 933,353 20,663 -, 4,773,148Unallocated assets - , - , - , - , - , 6,365,951 6,365,951Total assets 2,077,245 527,011 1,214,876 933,353 20,663 6,365,951 11,139,099

Segment liabilities 2,545,650 399,433 2,549,250 1,094,281 42,973 -, 6,631,587Unallocated liabilities - , - , - , - , - , 719,639 719,639Total liabilities 2,545,650 399,433 2,549,250 1,094,281 42,973 719,639 7,351,226

Capital expenditure - , - , - , - , - , 119,760 119,760

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30 LIQUIDITY AND INTEREST RATE RISK

Liquidity risk

Liquidity risk is the risk that the company will not be able to meet its funding requirements. To guard against this risk, the company hasdiversified funding sources and assets are managed with liquidity in mind, maintaining a healthy balance of cash and cash equivalents andreadily available marketable securities. The maturity profile is monitored to ensure that adequate liquidity is maintained.

Interest rate risk

The company invests in securities and has deposits that are subject to interest rate risk. Interest rate risk to the company is the risk of changes in market interest rates reducing the overall return on its interest bearing securities. The company limits interest rate risk bymonitoring changes in interest rates in the currencies in which its cash and investments are denominated.The company's interest sensitivity and liquidity positions based on maturities is as follows:

2007Effective Interest/ Mark-up bearing Non-Interest/ Mark-up bearing

Yield/ Mark-up Maturity Maturity Maturity Maturity Total

rate up to one after one Sub-total up to one after one Sub-totalyear year year year

(%) (Rupees in'000)

Financial assets

Cash and bank balances 3 - 11.5 474,145 -, 474,145 480,052 - , 480,052 954,197

Loans 3 -1.5 26,978 27,312 54,290 -, - , - , 54,290

Investments 11.47 - 18 443,787 945,423 1,389,210 6,742,892 -, 6,742,892 8,132,102

Premiums due but unpaid - , - , - , 3,203,751 - , 3,203,751 3,203,751

Amounts due from otherinsurers/ reinsurers - , - , - , 255,570 - , 255,570 255,570

Premium and claim reservesretained by cedants - , - , - , 32,926 - , 32,926 32,926

Accrued investment income - , - , - , 31,009 - , 31,009 31,009

Reinsurance recoveriesagainst outstanding claims - , - , - , 2,792,464 - , 2,792,464 2,792,464

Sundry receivables - , - , - , 143,513 20,516 164,029 164,029

944,910 972,735 1,917,645 13,682,177 20,516 13,702,69315,620,338Financial liabilities

Provision for outstanding claims -, - , - , 5,022,620 - , 5,022,620 5,022,620

Amounts due to otherinsurers/ reinsurers - , - , - , 579,621 - , 579,621 579,621

Accrued expenses - , - , - , 79,174 - , 79,174 79,174

Other creditors and accruals - , - , - , 717,903 - , 717,903 717,903

Unclaimed dividends - , - , - , 29,502 - , 29,502 29,502- , - , - , 6,428,820 - , 6,428,820 6,428,820


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2006Effective Interest/ Mark-up bearing Non-Interest/ Mark-up bearing Yield/ Maturity Maturity Maturity Maturity

Mark-up up to one after one Sub-total up to one after one Sub-total Totalrate year year year year(%) (Rupees in '000)

Financial assets

Cash and bank balances 3 - 12.5 750,521 -, 750,521 132,707 - , 132,707 883,228

Loans 5 24,950 26,259 51,209 -, - , - , 51,209

Investments 10 - 18 352,022 1,265,050 1,617,072 2,885,704 -, 2,885,704 4,502,776

Premiums due but unpaid - , - , - , 2,053,498 - , 2,053,498 2,053,498

Amounts due from otherinsurers/ reinsurers - , - , - , 220,386 - , 220,386 220,386

Premium and claim reserves, retained by cedants - , - , - , 36,506 - , 36,506 36,506

Accrued investment income - , - , - , 28,973 - , 28,973 28,973

Reinsurance recoveriesagainst outstanding claims - , - , - , 1,262,976 - , 1,262,976 1,262,976

Sundry receivables - , - , - , 47,539 20,386 67,925 67,925

1,127,493 1,291,309 2,418,802 6,668,289 20,386 6,688,675 9,107,477Financial liabilities

Provision for outstanding claims -, - , - , 3,208,084 - , 3,208,084 3,208,084

Amounts due to otherinsurers/ reinsurers - , - , - , 248,565 - , 248,565 248,565

Accrued expenses - , - , - , 85,758 - , 85,758 85,758

Other creditors and accruals - , - , - , 547,012 - , 547,012 547,012

Liabilities against assetssubject to finance lease 8.50 - 8.58 10,019 -, 10,019 - , - , - , 10,019

Unclaimed dividends - , - , - , 13,265 - , 13,265 13,26510,019 - , 10,019 4,102,684 - , 4,102,684 4,112,703

31 FINANCIAL RISK MANAGEMENT

31.1 Financial risk factors

The company's activities are exposed to a variety of financial risks most notably credit risk, foreign exchange risk,market risk, reinsurance risk and capital management risk. The company has established adequate procedures tomanage each of these risks as explained below:

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31.2 Credit risk and concentration of credit risk exposure

Credit risk is the risk that arises with the possibility that one party to a financial instrument will fail todischarge its obligation and cause the other party to incur a financial loss. The company attempts to controlcredit risk by monitoring credit exposures by undertaking transactions with a large number of counterpartiesin various industries and by continually assessing the credit worthiness of counterparties.

Concentration of credit risk occurs when a number of counterparties have a similar type of business activities.As a result, any change in economic, political or other conditions would effect their ability to meet contractualobligations in similar manner. The company's credit risk exposure is not significantly different from thatreflected in the financial statements. The management monitors and limits the company's exposure to creditrisk through monitoring of client's exposure and review and conservative estimates of provisions for doubtfulassets, if any. The management is of the view that it is not exposed to significant concentration of credit risk as its financial assets are adequately diversified in entities of sound financial standing, covering variousindustrial sector segments.

31.3 Foreign exchange risk

Foreign currency risk arises mainly where receivables/ payables exist due to transactions with foreignundertakings. Financial assets and liabilities exposed to foreign exchange risk amounted to Rs 1,669.246million (2006: Rs 1,403.285 million) and Rs 1,786.474 million (2006: Rs 1,722.830 million) respectively, at theend of the year.

31.4 Market risk

Market risk is the risk that the value of a financial instrument will fluctuate as a result of changes in marketprices, whether those changes are caused by factors specific to the individual security, or its issuer, or factorsaffecting all securities traded in the market.

The company is exposed to market risk with respect to its investments.

The company limits market risk by maintaining a diversified portfolio and by continuous monitoring of developments in equity and Term Finance Certificates (TFCs) markets. In addition, the company activelymonitors the key factors that affect stock and TFC market movements.

31.5 Reinsurance risk

Reinsurance ceded do not relieve the company from its obligation to policy holders and as a result thecompany remains liable for the portion of outstanding claims reinsured to the extent that reinsurer fails tomeet the obligation under the reinsurance agreements.

In order to minimise the financial exposure arising from large claims, the company, in the normal course of business, enters into agreements with local and foreign entities for reinsurance purposes.

32 CAPITAL MANAGEMENT

The company's goals and objectives when managing capital are:- to be an appropriately capitalised institution in compliance with the paid-up capital requirement set by

the SECP. During the year, minimum paid-up capital requirement for non-life insurers was raised to Rs.300 million. The requirement is to be met in a phased manner by December 31, 2011. The company'scurrent paid-up capital is well in excess of the limit prescribed by the SECP.

- to safeguard the company's ability to continue as a going concern so that it can continue to providereturns for shareholders and benefits for the other stakeholders;

- to provide an adequate return to shareholders by pricing insurance contracts commensurately with thelevel of risk;

- maintain strong ratings and to protect the company against unexpected events/ losses; and

- to ensure a strong capital base so as to maintain investor, creditor and market confidence and to sustainfuture development of the business.


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33 NON-ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE

The Board of Directors of the company in their meeting held on March 28, 2008 proposed a final cashdividend for the year ended December 31, 2007 @ 15% Rs 1.5/- share (2006: @ 18% Rs 1.8/- share). This is inaddition to the interim dividend @ 15% Rs 1.5/- share (2006: @ 10% Re 1.0/- share) resulting in a total dividendfor the year ended December 31, 2007 of Rs 3.0/- per share (2006: Rs 2.8/- share). The approval of themembers for the dividend will be obtained at the forthcoming Annual General Meeting. The financialstatements for the year ended December 31, 2007 do not include the effect of these appropriations which willbe accounted for in the financial statements for the year ending December 31, 2008.

34 FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

The carrying values of all financial assets and liabilities reflected in the financial statements approximate to

their fair values except for available-for-sale investments which are stated at lower of cost and market valuein accordance with the requirements of the SEC (Insurance) Rules, 2002. The carrying and fair value of theseinvestments have been disclosed in note 14 to the financial statements.

35 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates aresignificant to the financial statements or judgment was exercised in application of accounting policies are asfollows:

a) Provision for outstanding claims including incurred but not reported (IBNR) (note 4.1)b) Defined benefit plans (note 4.5.2 and note 20.1)c) Classification of investments and provision for impairment there against (note 4.10 and note 14)d) Provision for taxation including the amount relating to tax contingency (note 4.11, note 11 and note 25)e) Provision for doubtful receivables (note 4.7, note 4.12, note 15 and note 16)

36 NUMBER OF EMPLOYEES AT DECEMBER 31

37 CORRESPONDING FIGURES

Corresponding figures have been rearranged and reclassified, wherever necessary, for the purpose of comparison.

38 GENERAL

Figures in these financial statements have been rounded off to the nearest thousand of rupees.

39 DATE OF AUTHORISATION FOR ISSUE

These financial statements have been authorised for issue on March 28, 2008 by the Board of Directors of thecompany.

81

2007 2006Number

1,388 1,298


S.M. JawedDirector


Umer ManshaChairman


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No. of TotalShareholders Shareholdings Shares held

2 -do- 330,001 " 335,000 " 663,6021 -do- 335,001 " 340,000 " 337,4551 -do- 405,001 " 410,000 " 408,5141 -do- 425,001 " 430,000 " 429,8002 -do- 465,001 " 470,000 " 933,6941 -do- 505,001 " 510,000 " 507,5061 -do- 570,001 " 575,000 " 571,0001 -do- 845,001 " 850,000 " 848,0032 -do- 1,255,001 " 1,260,000 " 2,516,8591 -do- 2,925,001 " 2,930,000 " 2,926,7701 -do- 3,835,001 " 3,840,000 " 3,839,4731 -do- 3,415,001 " 3,420,000 " 3,417,1751 -do- 4,050,001 " 4,055,000 " 4,051,7481 -do- 4,235,001 " 4,240,000 " 4,238,5651 -do- 4,295,001 " 4,300,000 " 4,299,4001 -do- 6,050,001 " 6,055,000 " 6,053,3101 -do- 7,225,001 " 7,230,000 " 7,225,4001 -do- 8,170,001 " 8,175,000 " 8,170,8361 -do- 30,030,001 " 30,035,000 " 30,031,483

4,327 Total: 102,235,160

Pattern of Holding of the Shares held by the Shareholders as on December 31, 2007


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Categories of Shareholders Shares held Percentage

DirectorsUmer Mansha 167,625 0.164Ahmad Alman Aslam 3,093 0.003Ahmed Ebrahim Hasham 2,500 0.002Ali Munir 4,704 0.005Atif Bajwa (Nominee of MCB Bank) - , -Ibrahim Shamsi 4,908 0.005Hassan Mansha 167,625 0.164S.M. Jawed 5,000 0.005Shahzad Saleem 4,704 0.005

Wasif M. Khan 3,093 0.003

Chief Executive OfficerArif Ijaz 2,812 0.003

Directors / CEO's spouse - , -

Executives / Executives' spouse 16,023 0.016

Associated Companies, undertakings & related partiesMCB Bank Ltd. 30,031,483* 29.375Nishat Mills Ltd. 30,031 0.029

Security General Insurance Co. Ltd. 4,051,748 3.963

NIT and ICPNational Bank of Pakistan, Trustee Deptt. 132,874 0.130Investment Corporation of Pakistan 774 0.001

Banks, DFls and NBFls 2,878,955 2.816

Public sector companies and corporations - , 0. -11

Insurance Companies 624,307 0.610

Modaraba and Mutual Funds 1,904,821 1.863


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Categories of Shareholders Shares held Percentage

General Publica) Local ( Individuals ) 23,031,320 22.528b) Foreign Companies/ organizations/ Individuals 18,291,331 17.891

( on repatriable basis )

Others - See below 20,875,429** 20.419102,235,160 100.000

Shareholders holding 10% or more voting interest 30,031,483*

Others:01 The Administrator, Abandoned Properties Organisation 10002 Adamjee Foundation 8,170,83603 Mobarak Begum Charitable Trust 12,70704 Overseas Pakistanis Pension Trust 2,50005 MCB Employees Pension Fund 4,238,56506 MCB Provident Fund Pak Staff 3,417,17507 DGKC Emp P.Fund 8208 Pakistan Memon Educational & Welfare Society 79,11409 ICI Pakistan MGNT.Staff P.Fund 82,124

10 Artal Restaurants Int'l Emp P.Fund 2,00011 Nishat Mills Ltd. Emp.Prov. Fund 167,37512 Nestle Pakistan Ltd.Employees Provident Fund 10,00013 Nestle Pakistan Ltd.Managerial Staff Pension Fund 10,00014 Nestle Pakistan Ltd.Employees Gratuity Fund 10,00015 NWFP Pension Fund 65,80016 Pakistan Human Development fund 5,00017 Ismailia Youth Services 3,27218 Glaxo Smithkline Pak Ltd. Employees Gratuity Fund 25,00019 Ebrahim Bawany Foundation 3,53220 Capital Development Authority 50,00021 Canteen Stores Department 1,30022 Kaukab Mir Memorial Welfare Trust 21,00023 NWFP GPI Fund 27,00024 Joint Stock Companies 4,470,947

20,875,429**

Arif IjazManaging Director & Chief Executivearch 28, 2008


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