contents...rehan ahmed khan, f.c.a., a.c.m.a. executive director jehangir bashir nawaz auditors m/s...

CONTENTS

Vision 1

Core Values 2

Company Information 3

Directors’ Report on Unconsolidated Financial Statements 5

Auditors’ Review Report to the Members 6

Unconsolidated Financial Statements 8

Directors’ Report on Consolidated Financial Statements 40

Consolidated Financial Statements 41

Our will is to Explore, Innovate and Differentiate.Our passion is to provide leadership tothe Insurance Industry.

VISION

THE POWEROF VISION

THE POWEROF BELIEF

At Adamjee Insurance its our belief that commitment, passion and a thirst foruncompromising quality leads you to the excellence that we today are recognized for.

CORE VALUES

Integrity: Transparency and Honesty without CompromiseHumility: Empathy, Self Esteem and Respect in all relationshipsFun at Workplace: Work Life BalanceCorporate Social Responsibility: Service to Humanity

COMPANY INFORMATION

Board of Directors

Umer Mansha ChairmanAhmed Ebrahim Hasham DirectorAli Munir DirectorAlman Aslam DirectorFredrik Coenrard De Beer DirectorHassan Mansha DirectorIbrahim Shamsi DirectorKhalid Qadeer Qureshi DirectorMuhammad Usman Ali Usmani DirectorS. M. Jawed DirectorManzar Mushtaq Managing Director

& CEO

AdvisorMian Muhammad Mansha

Audit CommitteeUmer Mansha ChairmanAhmed Ebrahim Hasham MemberAli Munir MemberIbrahim Shamsi MemberS. M. Jawed Member

Human Resource CommitteeHassan Mansha ChairmanIbrahim Shamsi MemberUmer Mansha MemberManzar Mushtaq Member

Risk Management CommitteeS. M. Jawed ChairmanAli Munir MemberUmer Mansha Member

Strategic CommitteeUmer Mansha ChairmanAlman Aslam MemberS. M. Jawed MemberManzar Mushtaq Member

SecretaryTameez-ul-Haque,F.C.A.

03HALF YEARLY REPORTJUNE, 2011

Chief Financial OfficerMudassar Zubair Ahmed Mirza,A.C.A., A.C.M.A. (UK)

Head of Internal AuditRehan Ahmed Khan,F.C.A., A.C.M.A.

Executive DirectorJehangir Bashir Nawaz

AuditorsM/s Riaz Ahmad & Co.Chartered Accountants, Karachi

Shares RegistrarTechnology Trade (Pvt.) LimitedDagia House, 241-C, Block-2, P.E.C.H.S.,Off Shahrah-e-Quaideen, KarachiPhone: (92-21) 34391316-7, 34387960-1Fax: (92-21) 34391318

BankersAskari Bank LimitedBank Alfalah LimitedBank Al-Habib LimitedBarclays Bank PLC, PakistanCitibank N.A.Habib Bank LimitedHSBC Bank Middle East LimitedKASHF Microfinance Bank LimitedMCB Bank LimitedNational Bank of PakistanNIB Bank LimitedOman International Bank S.A.O.G.Rozgar Microfinance Bank LimitedSoneri Bank LimitedStandard Chartered Bank LimitedTameer Micro Finance Bank LimitedUnited Bank LimitedZarai Taraqiati Bank Limited

Registered Office1st Floor, ISE Tower,55-B, Jinnah Avenue,Blue Area, IslamabadUAN: (92-51) 111-242-111Fax: (92-51) 2894109, 2894110E-mail: [email protected]: www.adamjeeinsurance.com

04 HALF YEARLY REPORTJUNE, 2011

05

DIRECTORS' REPORT TO THE MEMBERS ONUNCONSOLIDATED FINANCIAL STATEMENTSFOR THE HALF YEAR ENDED 30 JUNE 2011

HALF YEARLY REPORTJUNE, 2011

On behalf of the Board, I am pleased to present the unconsolidated financial statements of the Companyfor the half year ended 30 June 2011:

The highlights for the period under review are as under:

30 June 30 June2011 2010

(Rupees in thousand)

Gross Premium 5,593,685 5,858,280 Net Premium 3,720,575 3,431,086Underwriting Results 299,538 392,272Investment Income 445,605 223,383Profit Before Tax 430,685 385,918Profit After Tax 317,859 298,689

Earning per Share (Rupees) 2.57 2.41

The Gross Premium of the Company has declined by 5% where as the Net Premium has increased by 8%.Net Claims and Net Commission have reduced by 15% and 6% respectively over the corresponding periodof last year.

The Investment Income of the Company has increased by 99% as compared to last year and the ProfitBefore and After Tax have increased by 12 % and 6 % respectively from the same period of the last year.

During April to June quarter, Ms. Nabiha Shahnawaz Cheema resigned as a Director. The Board filled thecasual vacancy by appointing Mr. Fredrik Coenrard de Beer in her place for the remainder of term.

I am pleased to inform you that the Board of Directors has declared Interim Cash Dividend of Re.1.0/-per share.

We thank our shareholders, valued customers, employees and development staff for their sustained supportin ensuring the continued success of our Company and trusting Adamjee Insurance as their brand of firstchoice. We are also grateful to the Insurance Division, Security Exchange Commission of Pakistan for theircontinued guidance and assistance.

On Behalf of Board of Directors

Lahore: 30 August 2011 Manzar MushtaqManaging Director and Chief Executive

AUDITORS' REPORT TO THE MEMBERSON REVIEW OF UNCONSOLIDATED CONDENSED INTERIMFINANCIAL INFORMATION


Introduction

We have reviewed the accompanying unconsolidated condensed interim balance sheet of ADAMJEEINSURANCE COMPANY LIMITED as at 30 June 2011 and the related:

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

notes forming part thereof for the six-month period then ended (here-in-after referred to as the “unconsolidatedcondensed interim financial information”). Management is responsible for the preparation and presentationof this unconsolidated condensed interim financial information in accordance with approved accountingstandards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusionon this unconsolidated condensed interim financial information based on our review. The figures of theunconsolidated condensed interim profit and loss account, unconsolidated condensed interim statementof premium, unconsolidated condensed interim statement of claims, unconsolidated condensed interimstatement of expenses and unconsolidated condensed interim statement of investment income for thequarters ended 30 June 2011 and 2010 have not been reviewed and we do not express a conclusion onthem as we are required to review only the cumulative figures for the six-month period ended 30 June 2011.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Reviewof Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interimfinancial information consists of making inquiries, primarily of persons responsible for financial and accountingmatters, and applying analytical and other review procedures. A review is substantially less in scope thanan audit conducted in accordance with International Standards on Auditing and consequently does notenable us to obtain assurance that we would become aware of all significant matters that might be identifiedin an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanyingunconsolidated condensed interim financial information is not prepared, in all material respects, in accordancewith approved accounting standards as applicable in Pakistan for interim financial reporting.

RIAZ AHMAD & COMPANYChartered Accountants

Name of engagement partner:Muhammad Kamran Nasir

KARACHI: 30 August 2011

THE POWEROF ACCURACY

At Adamjee Insurance we don’t make mistakes, we can’t afford to. In a business thatprides itself in numbers, accuracy becomes the name of the game. Each number eachvalue is checked and vetted on multiple levels and that’s what defines our quest forexcellence.

Unconsolidated CondensedInterim Financial Statements (Unaudited)For the Half Year Ended 30 June 2011

09

UNCONSOLIDATED CONDENSEDINTERIM BALANCE SHEET (UNAUDITED)AS AT 30 JUNE 2011

(Unaudited) (Audited)Note 30 June 31 December

2011 2010 –––––––(Rupees in thousand)––––––

Share capital and reservesAuthorized share capital 1,500,000 1,500,000

Paid-up share capital 1,237,045 1,237,045

Retained earnings 8,766,408 8,634,106Reserves 1,165,745 1,163,848

9,932,153 9,797,954

Total equity 11,169,198 11,034,999

Underwriting provisionsProvision for outstanding claims (including IBNR) 7,193,363 7,980,409Provision for unearned premium 4,606,328 5,017,435Commission income unearned 260,339 305,434

Total underwriting provisions 12,060,030 13,303,278

Deferred liabilitiesDeferred taxation 132,933 68,353Staff retirement benefits 21,333 17,326

Creditors and AccrualsPremiums received in advance 131,349 75,329Amounts due to other insurers / reinsurers 1,136,905 1,581,965Accrued expenses 94,322 147,995Other creditors and accruals 1,661,369 1,520,732

3,023,945 3,326,021

BorrowingsLiabilities against assets subject to finance lease 80,316 107,637

Other liabilitiesUnclaimed dividends 34,704 29,121

Total liabilities 15,353,261 16,851,736

CONTINGENCIES AND COMMITMENTS 6

TOTAL EQUITY AND LIABILITIES 26,522,459 27,886,735

The annexed notes form an integral part of this unconsolidated condensed interim financial information.


10



Cash and bank depositsCash and other equivalents 71,196 59,393Current and other accounts 944,966 1,060,597Deposits maturing within 12 months 988,977 1,584,827

2,005,139 2,704,817Loans

To employees 25,282 22,086

Investments 7 9,730,276 9,406,998

Current assets- othersPremiums due but unpaid 8 4,212,127 4,546,222Amounts due from other insurers / reinsurers 9 841,334 993,584Salvage recoveries accrued 204,910 99,636Premium and claim reserves retained by cedants 23,252 23,252Accrued investment income 18,817 33,445Reinsurance recoveries against outstanding claims 5,732,868 6,253,202Taxation - payments less provision 73,578 43,697Deferred commission expense 515,302 512,222Prepayments 1,782,109 1,829,112Sundry receivables 322,774 317,071

13,727,071 14,651,443Fixed Assets - Tangible & Intangible 10

OwnedLand and buildings 279,432 281,472Furniture and fixtures 65,332 62,289Motor vehicles 205,940 197,252Machinery and equipment 278,279 316,190Computers and related accessories 48,220 52,270Intangible asset - computer software 44,843 48,475

922,046 957,948

LeasedMotor vehicles 112,645 143,443

TOTAL ASSETS 26,522,459 27,886,735


Umer ManshaChairman

S.M. JawedDirector

Manzar MushtaqManaging Director & Chief Executive Officer

Ibrahim ShamsiDirector

11

UNCONSOLIDATED CONDENSED INTERIMPROFIT AND LOSS ACCOUNT (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector



Fire andPropertyDamage

Marine,Aviation and

TransportMotor Miscellaneous Treaty

Half year ended30 June

2011


2010


Net premium revenue 648,991 510,914 1,525,335 1,035,335 - 3,720,575 3,431,086Net claims (432,424) (233,038) (1,109,041) (739,627) - (2,514,130) (2,187,274)Expenses (115,868) (90,453) (249,556) (185,049) - (640,926) (601,619)Net commission (50,238) (85,000) (131,210) 467 - (265,981) (249,921)

Underwriting result 50,461 102,423 35,528 111,126 - 299,538 392,272

Investment income 445,605 223,383Rental income 330 718Other income 87,579 71,013

833,052 687,386General and administration expenses (392,746) (291,452)Exchange gain-net 251 207Finance charge on lease rentals (9,872) (10,223)

Profit before tax 430,685 385,918

Provision for taxation- Current (48,246) (98,721)- Deferred (64,580) 11,492

Profit after tax 317,859 298,689

Profit and loss appropriation account

Balance at the commencement of the period 8,634,106 8,520,042Profit after tax for the period 317,859 298,689Final dividend for the year ended 31 December 2010 Rs. 1.5/- per share (2009: Rs. 1.5/- per share) (185,557) (168,688)

Issue of bonus shares for the year ended 31 December 2010 Nil (2009:10 percent) - (112,459)

Balance unappropriated profit at the end of the period 8,766,408 8,537,584

(Rupees)

Earnings per share - basic and diluted 2.57 2.41


Revenue account


Marine,Aviation and


Quarter ended30 June

2011


2010


Revenue accountNet premium revenue 331,269 200,208 732,505 471,779 - 1,735,761 1,708,894Net claims (196,542) (112,785) (567,615) (324,754) - (1,201,696) (1,120,519)Expenses (67,650) (43,590) (139,218) (99,407) - (349,865) (293,760)Net commission (23,828) (35,948) (62,549) (12,429) - (134,754) (134,755)

Underwriting result 43,249 7,885 (36,877) 35,189 - 49,446 159,860


348,932 195,336General and administration expenses (276,658) (138,664)Exchange loss-net (43) (193)Finance charge on lease rentals (6,150) (4,875)


Provision for taxation- Current 13,444 (11,968)- Deferred (50,489) 11,492


(Rupees)



12

BUSINESS UNDERWRITTEN INSIDE PAKISTAN


Umer ManshaChairman

S.M. JawedDirector



Revenue accountNet premium revenue 326,573 188,269 486,738 466,485 - 1,468,065 1,393,327Net claims (196,522) (111,741) (400,249) (324,322) - (1,032,834) (957,057)Expenses (66,937) (41,759) (100,956) (98,608) - (308,260) (258,457)Net commission (24,273) (34,586) (36,449) (12,125) - (107,433) (115,473)

Underwriting result 38,841 183 (50,916) 31,430 - 19,538 62,340


314,354 90,347

General and administration expenses (246,247) (119,900)Exchange loss-net (46) (193)Finance charge on lease rentals (6,150) (4,875)

Profit before tax 61,911 (34,621)


Marine,Aviation and



2011


2010



Marine,Aviation and



2011


2010


Revenue accountNet premium revenue 639,835 486,753 997,887 1,025,265 - 3,149,740 2,818,165Net claims (431,659) (231,933) (769,947) (738,647) - (2,172,186) (1,862,728)Expenses (114,640) (87,212) (178,793) (183,698) - (564,343) (533,362)Net commission (50,840) (81,156) (77,247) 1,016 - (208,227) (208,038)

Underwriting result 42,696 86,452 (28,100) 103,936 - 204,984 214,037


722,729 495,755

General and administration expenses (350,780) (254,990)Exchange gain-net 248 207Finance charge on lease rentals (9,872) (10,223)



13


BUSINESS UNDERWRITTEN OUTSIDE PAKISTAN


Umer ManshaChairman

S.M. JawedDirector




Marine,Aviation and



2011


2010


Revenue accountNet premium revenue 4,696 11,939 245,767 5,294 - 267,696 315,567Net claims (20) (1,044) (167,366) (432) - (168,862) (163,462)Expenses (713) (1,831) (38,262) (799) - (41,605) (35,303)Net commission 445 (1,362) (26,100) (304) - (27,321) (19,282)


Other income 4,670 7,469

34,578 104,989

General and administration expenses (30,411) (18,764)Exchange gain-net 3 -



Marine,Aviation and



2011


2010


Revenue accountNet premium revenue 9,156 24,161 527,448 10,070 - 570,835 612,921Net claims (765) (1,105) (339,094) (980) - (341,944) (324,546)Expenses (1,228) (3,241) (70,763) (1,351) - (76,583) (68,257)Net commission 602 (3,844) (53,963) (549) - (57,754) (41,883)


Other income 15,769 13,396

110,323 191,631

General and administration expenses (41,966) (36,462)Exchange gain-net 3 -



UNCONSOLIDATED CONDENSED INTERIMSTATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector



(Unaudited) (Unaudited) (Unaudited) (Unaudited)Half year Half year Quarter Quarter

ended ended ended ended30 June 30 June 30 June 30 June

2011 2010 2011 2010


Profit for the period 317,859 298,689 29,036 51,128

Other comprehensive income:

Effect of translation of net investment in foreign branches 1,897 22,057 (9,467) 4,452

Total comprehensive income for the period 319,756 320,746 19,569 55,580


15

UNCONSOLIDATED CONDENSED INTERIMSTATEMENT OF CHANGES IN EQUITY (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector



Share Capital Capital Reserves Revenue Reserves

Issued,subscribedand paid-up

Reserve forissue of bonus

shares

Reserve forexceptional

losses

Investmentfluctuation

reserve

Exchangetranslation

reserve

Generalreserve

Retainedearnings

Total


Balance as at 31 December 2009 1,124,586 - 22,859 3,764 173,424 936,500 8,520,042 10,781,175

Total comprehensive income for thehalf year ended 30 June 2010 - - - - 22,057 - 298,689 320,746

Final dividend for the year ended31 December 2009 @ 15 % (Rupees 1.5/- per share) - - - - - - (168,688) (168,688)

Transferred to reserve for issue ofbonus shares - 112,459 - - - - (112,459) -

Issue of bonus shares for the yearended 31 December 2009 @ 10 % 112,459 (112,459) - - - - - -

Balance as at 30 June 2010 1,237,045 - 22,859 3,764 195,481 936,500 8,537,584 10,933,233

Balance as at 31 December 2010 1,237,045 - 22,859 3,764 200,725 936,500 8,634,106 11,034,999

Total comprehensive income for thehalf year ended 30 June 2011 - - - - 1,897 - 317,859 319,756

Final dividend for the year ended31 December 2010 @ 15%(Rupees 1.5/- per share) - - - - - - (185,557) (185,557)

Balance as at 30 June 2011 1,237,045 - 22,859 3,764 202,622 936,500 8,766,408 11,169,198


16

Half year ended Half year ended30 June 2011 30 June 2010

–––––––(Rupees in thousand)––––––

Operating Cash Flows

a) Underwriting activitiesPremiums received 5,999,282 5,934,078Reinsurance premiums paid (2,600,027) (2,186,342)Claims paid (5,058,440) (3,186,438)Surrenders paid (28,886) (59,718)Reinsurance and other recoveries received 2,304,426 711,008Commissions paid (589,584) (576,225)Commissions received 328,646 370,086Other underwriting payments (569,996) (392,818)

Net cash (used in) / flow from underwriting activities (214,579) 613,631

b) Other operating activitiesIncome tax paid (78,127) (73,246)General and management expenses paid (408,992) (234,583)Loans advanced (13,551) (13,086)Loan repayments received 28,022 19,894Other receipts 15,732 4,168

Net cash used in other operating activities (456,916) (296,853)

Total cash (used in) / flow from all operating activities (671,495) 316,778

Investment activitiesProfit/ return received 77,181 65,936Return on Pakistan Investment Bonds 7,596 7,113Income received on TFCs 10,390 13,214Dividends received 311,404 261,632Income received on rent 330 3,085Payments for investments (2,047,831) (3,304,331)Proceeds from disposal of investments 1,843,133 3,612,124Fixed capital expenditure - Tangible assets (60,060) (73,197)Fixed capital expenditure - Intangible assets (4,467) (533)Proceeds from disposal of fixed assets 51,310 19,864

Total cash flow from investing activities 188,986 604,907

Financing activitiesDividends paid (179,975) (166,143)Payments on finance lease (37,194) (22,578)

Total cash used in financing activities (217,169) (188,721)

Net cash (used in) / inflow from all activities (699,678) 732,964Cash at the beginning of the period 2,699,993 2,152,653

Cash at the end of the period 2,000,315 2,885,617


UNCONSOLIDATED CONDENSED INTERIMSTATEMENT OF CASH FLOWS (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011

17




Reconciliation to Profit and Loss Account

Operating cash flows (671,495) 316,778Depreciation expense (91,808) (86,647)Provision for gratuity (4,008) (3,245)Other income - bank deposits 63,355 65,494Profit on disposal of fixed assets 20,552 1,559Finance charge on lease obligations (9,872) (10,223)Rental income 330 718(Decrease) / Increase in assets other than cash (913,620) 1,006,499Decrease / (Increase) in liabilities other than running finance 1,125,548 (614,630)

(481,018) 676,303

Others

Profit on sale of investments 191,283 26,430Amortization expense (8,665) (5,757)Decrease / (Increase) in unearned premium 411,107 (574,449)Amortization of income on Government Securities - net - 2,160Gain on sale of mutual fund units - 58,873Return on Pakistan Investment Bonds 6,491 7,474Decrease in loans (14,471) (6,808)Income tax paid 78,127 73,246Provision for diminution in value of investments (74,266) (129,518)Dividend income 307,329 245,479Income on Treasury Bills 2,845 -Other income - TFCs 11,923 12,485

911,703 (290,385)

Profit before taxation 430,685 385,918

Definition of cash

Cash comprises of cash in hand, bank balances excluding Rupees 4.824 million (2010: Rupees 4.451 million) heldunder lien, and other deposits which are readily convertible to cash and which are used in the cash management functionon a day-to-day basis.



Cash for the purposes of the Statement of Cash Flows consists of:

Cash and other equivalent 71,196 378

Current and other accounts 944,966 1,360,177

Deposits maturing within 12 months 984,153 1,525,062

Total cash and cash equivalents 2,000,315 2,885,617



Umer ManshaChairman

S.M. JawedDirector




18






b) Other operating activitiesIncome tax paid (78,127) (73,246)General and management expenses paid (368,005) (189,659)Loans advanced (12,762) (12,156)Loan repayments received 25,965 17,107Other receipts 2,624 2,620








Cash at the end of the period 916,357 1,713,095



19





Operating cash flows (576,772) 68,031Depreciation expense (90,334) (85,069)Other income - bank deposits 48,882 53,520Profit on disposal of fixed assets 20,552 1,684Finance charge on lease obligations (9,872) (10,223)Rental income 330 718(Decrease) / Increase in assets other than cash (1,044,619) 864,543Decrease / (Increase) in liabilities other than running finance 1,202,033 (455,573)

(449,800) 437,631

Others

Profit on sale of investments 191,283 26,429Amortization expense (8,665) (5,757)Decrease / (Increase) in unearned premium 310,261 (492,803)Amortisation of income on Government Securities - net - 2,160Gain on sale of mutual fund units - 58,874Profit on Pakistan Investment Bonds 6,491 7,474Decrease in loans (13,203) (4,951)Income tax paid 78,127 73,246Provision for diminution in value of investments (74,266) (129,518)Dividend, investment and other income 307,329 245,479Income on Treasury Bills 2,845 -Other Income - TFCs 11,923 12,485

812,125 (206,882)


Definition of cash

Cash comprises of cash in hand, bank balances excluding Rupees 4.824 million (2010: Rupees 4.451 million) heldunder lien, and other deposits which are readily convertible to cash and which are used in the cash management functionon a day-to-day basis.




Cash and other equivalent 70,481 145

Current and other accounts 841,358 338,115


Total cash and cash equivalents 916,357 1,713,095



Umer ManshaChairman

S.M. JawedDirector




20





a) Underwriting activitiesPremiums received 702,507 975,033Reinsurance premiums paid (275,698) (271,585)Claims paid (589,809) (457,334)Surrenders paid (1,079) (1,168)Reinsurance and other recoveries received 191,604 155,660Commissions paid (75,025) (95,055)Commissions received 37,141 35,846Other underwriting payments (57,753) (51,131)


b) Other operating activitiesIncome tax refund/ (paid) - -General and management expenses paid (40,987) (44,924)Loans advanced (789) (930)Loan repayments received 2,057 2,787Other receipts 13,108 1,548



Investment activitiesProfit/ return received 16,211 11,623Return on Pakistan Investment Bonds - -Income received on TFCs - -Dividends received - -Payments for investments - -Proceeds from disposal of investments - -Fixed capital expenditure - Tangible assets (609) -Fixed capital expenditure - Intangible assets (442) -Proceeds from disposal of fixed assets - 104


Financing activitiesDividends paid - -Payments on finance lease - -

Total cash flow from financing activities - -

Net cash (used in) / inflow from all activities (79,563) 260,474Cash at the beginning of the period 1,163,522 912,048



21





Operating cash flows (94,723) 248,747Depreciation expense (1,474) (1,578)Provision for gratuity (4,008) (3,245)Other income - bank deposits 14,473 11,974Profit on disposal of fixed assets - (125)Finance charge on lease obligations - -Rental income - -Increase in assets other than cash 130,999 141,956Increase in liabilities other than running finance (76,485) (159,057)

(31,218) 238,672

Others

Profit on sale of investments - -Amortization expense - -Decrease / (Increase) in unearned premium 100,846 (81,646)Amortisation of income on Government Securities - net - -Gain on sale of mutual fund units - -Return on Pakistan Investment Bonds - -(Decrease) in loans (1,268) (1,857)Income tax paid - -Gratuity paid - -(Provision) / Reversal for diminution in value of investments - -Dividend, investment and other income - -Deposits paid - -Other income-TFCs - -

99,578 (83,503)


Definition of cash

Cash comprises of cash in hand, bank balances excluding Rupees Nil (2010: Rupees Nil) held under lien, andother deposits which are readily convertible to cash and which are used in the cash management function on aday-to-day basis.




Cash and other equivalent 715 233

Current and other accounts 103,609 1,022,062

Deposits maturing within 12 months 979,635 150,227




Umer ManshaChairman

S.M. JawedDirector



UNCONSOLIDATED CONDENSED INTERIMSTATEMENT OF PREMIUMS (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector



Class Premiumswritten

Unearned premiumreserve

Opening Closing

Premiumsearned

Reinsuranceceded

Reinsuranceexpense

Prepaid reinsurancepremium ceded

Net premiumrevenue

Half year ended30 June 2011



Opening Closing

Direct and facultative

Fire and property damage 1,997,785 1,977,580 1,794,848 2,180,517 1,374,993 1,371,210 1,214,677 1,531,526 648,991 580,770

Marine, aviation and transport 723,825 57,988 93,785 688,028 184,599 12,199 19,684 177,114 510,914 490,786

Motor 1,640,293 1,760,996 1,682,633 1,718,656 176,877 175,330 158,886 193,321 1,525,335 1,693,453

Miscellaneous 1,231,782 1,220,871 1,035,062 1,417,591 426,828 215,786 260,358 382,256 1,035,335 666,077

Total 5,593,685 5,017,435 4,606,328 6,004,792 2,163,297 1,774,525 1,653,605 2,284,217 3,720,575 3,431,086

Treaty

Proportional - - - - - - - - - -

Total - - - - - - - - - -

Grand Total 5,593,685 5,017,435 4,606,328 6,004,792 2,163,297 1,774,525 1,653,605 2,284,217 3,720,575 3,431,086




Opening Closing

Premiumsearned

Reinsuranceceded

Reinsuranceexpense


Net premiumrevenue

Quarter ended30 June 2011



Opening Closing


Fire and property damage 1,081,995 1,815,920 1,794,848 1,103,067 826,916 1,159,559 1,214,677 771,798 331,269 220,995


Motor 824,337 1,683,521 1,682,633 825,225 83,267 168,339 158,886 92,720 732,505 835,313

Miscellaneous 588,226 1,095,724 1,035,062 648,888 235,298 202,169 260,358 177,109 471,779 392,542

Total 2,848,056 4,674,538 4,606,328 2,916,266 1,280,207 1,553,903 1,653,605 1,180,505 1,735,761 1,708,894

Treaty

Proportional - - - - - - - - - -

Total - - - - - - - - - -

Grand Total 2,848,056 4,674,538 4,606,328 2,916,266 1,280,207 1,553,903 1,653,605 1,180,505 1,735,761 1,708,894

23




Umer ManshaChairman

S.M. JawedDirector





Opening Closing

Premiumsearned

Reinsuranceceded

Reinsuranceexpense


Net premiumrevenue




Opening Closing




Motor 1,044,121 955,232 986,155 1,013,198 14,370 2,297 1,356 15,311 997,887 1,124,240

Miscellaneous 1,203,924 1,204,439 1,008,341 1,400,022 412,350 209,257 246,850 374,757 1,025,265 658,162

Total 4,902,514 4,132,277 3,822,016 5,212,775 1,956,269 1,551,337 1,444,571 2,063,035 3,149,740 2,818,165

Treaty

Proportional - - - - - - - - - -

Total - - - - - - - - - -

Grand Total 4,902,514 4,132,277 3,822,016 5,212,775 1,956,269 1,551,337 1,444,571 2,063,035 3,149,740 2,818,165




Opening Closing

Premiumsearned

Reinsuranceceded

Reinsuranceexpense


Net premiumrevenue




Opening Closing




Motor 509,684 970,724 986,155 494,253 6,340 2,531 1,356 7,515 486,738 542,479

Miscellaneous 570,646 1,077,303 1,008,341 639,608 225,005 194,968 246,850 173,123 466,485 388,152

Total 2,483,061 3,880,243 3,822,016 2,541,288 1,172,424 1,345,370 1,444,571 1,073,223 1,468,065 1,393,327

Treaty

Proportional - - - - - - - - - -

Total - - - - - - - - - -

Grand Total 2,483,061 3,880,243 3,822,016 2,541,288 1,172,424 1,345,370 1,444,571 1,073,223 1,468,065 1,393,327


24



Umer ManshaChairman

S.M. JawedDirector





Opening Closing

Premiumsearned

Reinsuranceceded

Reinsuranceexpense


Net premiumrevenue




Opening Closing


Fire and property damage 38,787 48,892 45,903 41,776 27,292 40,402 35,074 32,620 9,156 12,515


Motor 596,172 805,764 696,478 705,458 162,507 173,033 157,530 178,010 527,448 569,213

Miscellaneous 27,858 16,432 26,721 17,569 14,478 6,529 13,508 7,499 10,070 7,915

Total 691,171 885,158 784,312 792,017 207,028 223,188 209,034 221,182 570,835 612,921

Treaty

Proportional - - - - - - - - - -

Total - - - - - - - - - -

Grand Total 691,171 885,158 784,312 792,017 207,028 223,188 209,034 221,182 570,835 612,921




Opening Closing

Premiumsearned

Reinsuranceceded

Reinsuranceexpense


Net premiumrevenue




Opening Closing


Fire and property damage 24,216 42,956 45,903 21,269 18,898 32,749 35,074 16,573 4,696 5,942


Motor 314,653 712,797 696,478 330,972 76,927 165,808 157,530 85,205 245,767 292,834

Miscellaneous 17,580 18,421 26,721 9,280 10,293 7,201 13,508 3,986 5,294 4,390

Total 364,995 794,295 784,312 374,978 107,783 208,533 209,034 107,282 267,696 315,567

Treaty

Proportional - - - - - - - - - -

Total - - - - - - - - - -

Grand Total 364,995 794,295 784,312 374,978 107,783 208,533 209,034 107,282 267,696 315,567

25

UNCONSOLIDATED CONDENSED INTERIMSTATEMENT OF CLAIMS (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector






Class Total claimspaid

Outstanding claims

Opening Closing

Claimsexpenses

Reinsuranceand otherrecoveriesreceived

Reinsuranceand otherrecoveriesrevenue

Reinsurance and otherrecoveries in respect of

outstanding claims

Net claims expense

Opening Closing


Fire and property damage 718,882 3,916,347 4,736,133 1,538,668 341,821 3,285,485 4,285,790 1,342,126 196,542 170,295


Motor 673,805 1,533,231 1,626,923 767,497 115,067 1,092,515 1,177,330 199,882 567,615 574,882

Miscellaneous 1,007,968 978,884 400,015 429,099 521,583 696,963 279,725 104,345 324,754 250,320

Total 2,526,533 6,821,397 7,173,031 2,878,167 979,588 5,240,895 5,937,778 1,676,471 1,201,696 1,120,059

Treaty

Proportional - 20,332 20,332 - - - - - - 460

Total - 20,332 20,332 - - - - - - 460

Grand Total 2,526,533 6,841,729 7,193,363 2,878,167 979,588 5,240,895 5,937,778 1,676,471 1,201,696 1,120,519





Outstanding claims

Opening Closing

Claimsexpenses




outstanding claims

Net claims expense

Opening Closing




Motor 1,394,815 1,540,738 1,626,923 1,481,000 189,782 995,153 1,177,330 371,959 1,109,041 1,131,605

Miscellaneous 1,420,638 1,099,317 400,015 721,336 558,857 856,873 279,725 (18,291) 739,627 459,427

Total 5,046,631 7,960,077 7,173,031 4,259,585 2,160,515 6,352,838 5,937,778 1,745,455 2,514,130 2,186,814

Treaty

Proportional - 20,332 20,332 - - - - - - 460

Total - 20,332 20,332 - - - - - - 460

Grand Total 5,046,631 7,980,409 7,193,363 4,259,585 2,160,515 6,352,838 5,937,778 1,745,455 2,514,130 2,187,274



26



Umer ManshaChairman

S.M. JawedDirector







Outstanding claims

Opening Closing

Claimsexpenses




outstanding claims

Net claims expense

Opening Closing




Motor 421,669 435,503 408,866 395,032 1,426 88,319 81,676 (5,217) 400,249 416,892

Miscellaneous 1,005,861 977,934 399,043 426,970 519,897 696,822 279,573 102,648 324,322 250,306

Total 2,272,178 5,709,457 5,939,676 2,502,397 864,166 4,234,473 4,839,870 1,469,563 1,032,834 956,597

Treaty

Proportional - 20,332 20,332 - - - - - - 460

Total - 20,332 20,332 - - - - - - 460

Grand Total 2,272,178 5,729,789 5,960,008 2,502,397 864,166 4,234,473 4,839,870 1,469,563 1,032,834 957,057





Outstanding claims

Opening Closing

Claimsexpenses




outstanding claims

Net claims expense

Opening Closing




Motor 830,722 468,010 408,866 771,578 1,426 81,471 81,676 1,631 769,947 813,910

Miscellaneous 1,415,471 1,098,068 399,043 716,446 554,723 856,497 279,573 (22,201) 738,647 459,392

Total 4,468,631 6,869,240 5,939,676 3,539,067 1,960,935 5,433,924 4,839,870 1,366,881 2,172,186 1,862,268

Treaty

Proportional - 20,332 20,332 - - - - - - 460

Total - 20,332 20,332 - - - - - - 460

Grand Total 4,468,631 6,889,572 5,960,008 3,539,067 1,960,935 5,433,924 4,839,870 1,366,881 2,172,186 1,862,728


27




Umer ManshaChairman

S.M. JawedDirector







Outstanding claims

Opening Closing

Claimsexpenses




outstanding claims

Net claims expense

Opening Closing


Fire and property damage 112 2,407 2,429 134 95 2,083 2,102 114 20 27

Marine, aviation and transport - 10,855 11,897 1,042 - 2 - (2) 1,044 5,431

Motor 252,136 1,097,728 1,218,057 372,465 113,641 1,004,196 1,095,654 205,099 167,366 157,990

Miscellaneous 2,107 950 972 2,129 1,686 141 152 1,697 432 14

Total 254,355 1,111,940 1,233,355 375,770 115,422 1,006,422 1,097,908 206,908 168,862 163,462

Treaty

Proportional - - - - - - - - - -

Total - - - - - - - - - -

Grand Total 254,355 1,111,940 1,233,355 375,770 115,422 1,006,422 1,097,908 206,908 168,862 163,462





Outstanding claims

Opening Closing

Claimsexpenses




outstanding claims

Net claims expense

Opening Closing


Fire and property damage 8,341 5,667 2,429 5,103 7,090 4,854 2,102 4,338 765 1,177

Marine, aviation and transport 399 11,193 11,897 1,103 - 2 - (2) 1,105 5,639

Motor 564,093 1,072,728 1,218,057 709,422 188,356 913,682 1,095,654 370,328 339,094 317,695

Miscellaneous 5,167 1,249 972 4,890 4,134 376 152 3,910 980 35

Total 578,000 1,090,837 1,233,355 720,518 199,580 918,914 1,097,908 378,574 341,944 324,546

Treaty

Proportional - - - - - - - - - -

Total - - - - - - - - - -

Grand Total 578,000 1,090,837 1,233,355 720,518 199,580 918,914 1,097,908 378,574 341,944 324,546


UNCONSOLIDATED CONDENSED INTERIMSTATEMENT OF EXPENSES (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector






Class Commissionspaid orpayable

Deferred commission

Opening Closing

Netcommission

expense

Othermanagement

expenses

Underwritingexpense

Net underwriting expenseCommission

fromreinsurer


Fire and property damage 177,568 259,742 290,411 146,899 67,650 214,549 123,071 91,478 75,728

Marine, aviation and transport 56,137 5,818 15,894 46,061 43,590 89,651 10,113 79,538 97,786

Motor 66,658 165,529 154,965 77,222 139,218 216,440 14,673 201,767 190,300

Miscellaneous 38,387 59,826 54,032 44,181 99,407 143,588 31,752 111,836 64,701

Total 338,750 490,915 515,302 314,363 349,865 664,228 179,609 484,619 428,515

Treaty

Proportional - - - - - - - - -

Total - - - - - - - - -

Grand Total 338,750 490,915 515,302 314,363 349,865 664,228 179,609 484,619 428,515





Deferred commission

Opening Closing

Netcommission

expense

Othermanagement

expenses

Underwritingexpense


fromreinsurer




Motor 154,858 162,226 154,965 162,119 249,556 411,675 30,909 380,766 389,426

Miscellaneous 64,537 78,490 54,032 88,995 185,049 274,044 89,462 184,582 112,498

Total 642,802 512,222 515,302 639,722 640,926 1,280,648 373,741 906,907 851,540

Treaty


Total - - - - - - - - -

Grand Total 642,802 512,222 515,302 639,722 640,926 1,280,648 373,741 906,907 851,540


29




Umer ManshaChairman

S.M. JawedDirector







Deferred commission

Opening Closing

Netcommission

expense

Othermanagement

expenses

Underwritingexpense


fromreinsurer




Motor 43,454 73,992 80,637 36,809 100,956 137,765 360 137,405 140,467

Miscellaneous 37,714 57,868 52,271 43,311 98,608 141,919 31,186 110,733 64,691

Total 310,979 387,153 430,240 267,892 308,260 576,152 160,459 415,693 373,930

Treaty


Total - - - - - - - - -

Grand Total 310,979 387,153 430,240 267,892 308,260 576,152 160,459 415,693 373,930





Deferred commission

Opening Closing

Netcommission

expense

Othermanagement

expenses

Underwritingexpense


fromreinsurer




Motor 89,237 69,412 80,637 78,012 178,793 256,805 765 256,040 291,066

Miscellaneous 62,723 76,871 52,271 87,323 183,698 271,021 88,339 182,682 112,542

Total 566,493 406,206 430,240 542,459 564,343 1,106,802 334,232 772,570 741,400

Treaty


Total - - - - - - - - -

Grand Total 566,493 406,206 430,240 542,459 564,343 1,106,802 334,232 772,570 741,400



30



Umer ManshaChairman

S.M. JawedDirector







Deferred commission

Opening Closing

Netcommission

expense

Othermanagement

expenses

Underwritingexpense


fromreinsurer


Fire and property damage 2,806 8,851 8,058 3,599 713 4,312 4,044 268 (186)

Marine, aviation and transport 1,088 1,416 915 1,589 1,831 3,420 227 3,193 4,928

Motor 23,204 91,537 74,328 40,413 38,262 78,675 14,313 64,362 49,833

Miscellaneous 673 1,958 1,761 870 799 1,669 566 1,103 10

Total 27,771 103,762 85,062 46,471 41,605 88,076 19,150 68,926 54,585

Treaty


Total - - - - - - - - -

Grand Total 27,771 103,762 85,062 46,471 41,605 88,076 19,150 68,926 54,585





Deferred commission

Opening Closing

Netcommission

expense

Othermanagement

expenses

Underwritingexpense


fromreinsurer


Fire and property damage 6,325 8,925 8,058 7,192 1,228 8,420 7,794 626 (96)

Marine, aviation and transport 2,549 2,658 915 4,292 3,241 7,533 448 7,085 11,920

Motor 65,621 92,814 74,328 84,107 70,763 154,870 30,144 124,726 98,360

Miscellaneous 1,814 1,619 1,761 1,672 1,351 3,023 1,123 1,900 (44)

Total 76,309 106,016 85,062 97,263 76,583 173,846 39,509 134,337 110,140

Treaty


Total - - - - - - - - -

Grand Total 76,309 106,016 85,062 97,263 76,583 173,846 39,509 134,337 110,140


31

UNCONSOLIDATED CONDENSED INTERIMSTATEMENT OF INVESTMENT INCOME (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector



Quarter Quarter Half year Half yearended ended ended ended

30 June 30 June 30 June 30 June2011 2010 2011 2010


Income from non-trading investments

Available-for-sale

Return on fixed income securities - - - 2,160Return on Term Finance Certificates 5,949 6,121 11,923 12,485Return on Pakistan Investment Bonds 2,500 3,872 6,491 7,474Return on Treasury bills - - 2,845 -

Dividend income

- associated undertakings 105,740 58,159 175,819 132,467 - others 26,535 16,993 131,510 113,012

132,275 75,152 307,329 245,479

140,724 85,145 328,588 267,598

Gain on sale of ‘available-for-sale’ investments

- associated undertakings 7,483 18,587 17,563 58,874- others 76,561 23,372 173,720 26,429

84,044 41,959 191,283 85,303

224,768 127,104 519,871 352,901

(Provision) / Reversal for impairment in value ofavailable-for-sale' investment 19,508 (124,896) (74,266) (129,518)

Net investment income 244,276 2,208 445,605 223,383


UNCONSOLIDATED CONDENSED INTERIMNOTES TO THE FINANCIAL INFORMATION (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011

32

1. THE COMPANY AND ITS OPERATIONS

Adamjee Insurance Company Limited (the Company) is a public limited company incorporated in Pakistan on28 September 1960 under the Companies Act, 1913 (now the Companies Ordinance, 1984). The Company islisted on all the stock exchanges in Pakistan and is engaged in the non-life insurance business.

The registered office of the Company is situated at Islamabad Stock Exchange Building, Islamabad.

1.1 The Company also operates branches in the United Arab Emirates (UAE), the Kingdom of Saudi Arabia (KSA)and the Export Processing Zone (EPZ). The branch in the KSA has closed down its operations and is in “run-off” status with effect from 01 October 2003. During the period, the Company has opened its new branch officein Abu Dhabi to extend its operations.

2. BASIS OF PREPARATION

a) Statement of Compliance

This unconsolidated condensed interim financial report of the company for the six months period ended 30 June2011 has been prepared in accordance with the requirements of the International Accounting Standard 34 -Interim Financial Reporting and provisions of and directives issued under the Companies Ordinance, 1984, theInsurance Ordinance, 2000 and SEC (Insurance) Rules, 2002. In case where requirements differ, the provisionsof or directives of Companies Ordinance, 1984, the Insurance Ordinance, 2000 and SEC (Insurance) Rules,2002 shall prevail.

The SECP has allowed insurance companies to defer the application of International Accounting Standard -39(IAS - 39) 'Financial Instruments: Recognition and Measurement' in respect of "Investment available -for- sale"until suitable amendments have been made in the law. Accordingly, the requirements of IAS - 39, to the extentallowed by the SECP, have not been considered in the preparation of this unconsolidated interim condensedfinancial information.

b) Basis of Presentation

These unconsolidated condensed interim financial information represents separate unconsolidated condensedinterim financial information of Adamjee Insurance Company Limited, prepared in accordance with the formatprescribed by Insurance Division of SECP in its Circular No. 7 of 2003 dated 27 August 2003. The consolidatedcondensed interim financial information of the group is being issued separately.

3. BASIS OF MEASUREMENT

This unconsolidated condensed interim financial information has been prepared under the historical costconvention except that obligations under certain employee benefits are measured at present value.

4. ACCOUNTING POLICIES AND COMPUTATION METHODS

The accounting policies and the methods of computation adopted in the preparation of this unconsolidatedcondensed interim financial information are the same as those applied in the preparation of the unconsolidatedfinancial statements for the year ended 31 December 2010.

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Judgments and estimates made by the management in the preparation of this unconsolidated condensed interimfinancial information are the same as those applied to the preceding annual published financial statements ofthe Company for the year ended 31 December 2010.


33


6. CONTINGENCIES AND COMMITMENTS

6.1 Contingencies

The income tax assessments of the Company have been finalized up to and including the tax year 2009. However,the Company has filed appeals in respect of certain assessment years mainly on account of following:

(i) The Deputy Commissioner of Income Tax (DCIT) has finalized assessments for the assessment year1999-2000 by taxing capital gains at the full rate of 33%. The aggregate tax liability assessed by the DCITamounted to Rupees 48.205 million against which the Company has made a total provision of Rupees44.141 million resulting in a shortfall of Rupees 4.064 million. The Company filed appeals with theCommissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal (ITAT) which were decidedagainst the Company. Consequently the Company has filed an appeal before the Honorable High Courtof Sindh and the petition is fixed for regular hearing;

ii) The Additional Commissioner / Taxation Officer has reopened assessments for the assessment years2000-2001 and 2001-2002 by taxing bonus shares received by the Company during the above mentionedperiods resulting in an additional tax liability of Rupees 14.907 million. An appeal was filed before theCommissioner of Income Tax (Appeals) who cancelled the amended order passed by the AdditionalCommissioner and allowed relief to the Company but the Tax Department filed an appeal before the ITATagainst the order of the Additional Commissioner, which has been decided in favor of the Company.However, the Company again received a notice from Additional Commissioner for reassessment of thecase. The Company has filed a constitutional petition in Sindh High Court against such order.

iii) While finalizing the assessment for the assessment year 2002-2003, DCIT has reduced the businessloss for the year by Rupees 88.180 million by adjusting the dividend income against this loss. The Companymaintains that it is entitled to carry the gross loss forward for adjustment against the future taxable incomeand dividend income for the year should be taxed separately at reduced rate. The appeals of the Companyin this respect have been rejected by the Commissioner of Income Tax (Appeals), the ITAT and the SindhHigh Court. The Company has now filed a reference application with the Supreme Court of Pakistan. Themanagement is confident that the matter will eventually be decided in favor of the Company and hasconsequently not made any provision against the additional tax liability of Rupees 26.455 million whichmay arise in this respect.

iv) The Tax Authorities have also amended the assessments for tax years 2003 to 2007 on the ground thatthe Company has not apportioned management and general administration expenses against capitalgain and dividend income. The Company has filed constitution petition in the High Court of Sindh againstthe amendment in the assessment order. The Company may be liable to pay Rupees 5.881 million in theevent of decision against the Company, out of which Rupees 2.727 million has been provided by theCompany resulting in a shortfall of Rupees 3.154 million.

v) The Taxation Officer has passed an order in the tax year 2005 and 2006 under section 221 of the IncomeTax Ordinance, 2001 (the Ordinance) levying minimum tax liability aggregating to Rupees 38.358 million.An appeal had been filed before the Commissioner of Income Tax (Appeals) who upheld the order ofthe Taxation Officer. The Company has filed an appeal before ITAT which is pending to be heard.

vi) The Company received a notice from Additional Commissioner Inland Revenue pertaining to the assessmentof tax year 2008. Among others, the Additional Commissioner raised issues pertaining to avoidance oftax on capital gains on listed securities. However, the Company filed a constitutional petition in SindhHigh Court against such order and the court has granted stay in this regard.

Pending resolution of the above-mentioned appeals filed by the Company, no provision has been made in thisunconsolidated condensed interim financial information for the aggregate amount of Rupees 86.938 million (31December 2010: 88.201 million) as the management is confident that the eventual outcome of the above matterswill be in favor of the Company.

6.2 Commitments

There were no capital or other commitments as at 30 June 2011 (31 December 2010: Nil)




(Unaudited) (Audited)30 June 31 December


7. INVESTMENTS

In related parties

Available-for-sale

Marketable securities 6,293,557 5,724,324 Less: Provision for impairment in value of investments (6,510) -

6,287,047 5,724,324

Investment in Subsidiary - Adamjee Life Assurance Company Limited 294,065 294,065

Investment in Associates

- Lalpir Power Limited 412,796 412,796 - Pakgen Power Limited 355,448 412,796

768,244 825,592

7,349,356 6,843,981

Others

Available-for-sale

Marketable securities 2,728,642 2,973,083 Less: Provision for impairment in value of investments (477,821) (410,066)

2,250,821 2,563,017

Fixed income investments 130,099 -

2,380,920 2,563,017

9,730,276 9,406,998

At 30 June 2011, the fair value of available-for-sale securities was Rupees 11,136.373 million (31 December2010: Rupees 10,003.082 million).

7.1 Reconciliation of provision for impairment in value of investments

Opening provision 410,066 541,300Charge / (reversal) for the period / year 74,265 (128,882)

Provision written off during the period / year - (2,352)

Closing provision 484,331 410,066

8. PREMIUMS DUE BUT UNPAID - Unsecured

Considered good 4,212,127 4,546,222Considered doubtful 307,275 199,015

4,519,402 4,745,237 Less: Provision for doubtful balances (307,275) (199,015)

4,212,127 4,546,222

35





8.1 Reconciliation of provision for doubtful balances

Opening provision 199,015 119,530 Exchange loss - 274Charge for the period / year 110,000 86,867Written off during the period / year - (7,656)Bad debts recovered (1,740) -


9. AMOUNTS DUE FROM OTHER INSURERS/ REINSURERS - Unsecured

Considered good 841,334 993,584Considered doubtful 70,000 30,000

911,334 1,023,584Less: Provision for doubtful balances (70,000) (30,000)

841,334 993,584

9.1 Reconciliation of provision for doubtful balance

Opening provision 30,000 30,000Charge for the period / year 40,000 -


10. FIXED ASSETS

10.1 The following capital expenditure was incurred during the period / year:

OwnedLand and building 7,529 116,039Furniture and fixtures 8,590 39,914Motor vehicles 30,486 80,004Machinery and equipment 8,477 34,750Computer and related accessories 4,978 21,355

60,060 292,062Intangible asset - computer software 4,467 23,152

LeasedMotor vehicles - -

64,527 315,214

10.2 The following are the written down values of fixed assets disposed of during the period / year:

OwnedBuilding 2,633 618Furniture and fixtures 585 616Motor vehicles 6,228 40,536Machinery and equipment 560 1,555Computer and related accessories 404 123


30,758 66,447



(Unaudited) (Unaudited)30 June 30 June


Premium underwritten 481,611 590,509Premium received 528,694 520,358Premium ceded 2,022 541Claims paid 1,119,634 248,939Rent paid 5,408 5,289Dividends received 174,473 132,467Dividend paid 66,157 60,126

Number of shares

Bonus shares received 2,326,338 2,114,852Bonus shares issued - 4,008,442

Following balances are due to / from staff retirement benefit funds:



Receivable from Staff Gratuity Fund 43,818 53,818Receivable from Employees Provident Fund 1,467 1,737

11. TRANSACTIONS WITH RELATED PARTIES

The Company has related party relationships with its subsidiary company, associates, employee benefit plans,key management personnel and other parties. Transactions are entered into with such related parties for theissuance of policies to and disbursements of claims incurred by them and payment of rentals for the use ofpremises rented from them. There are no transactions with key management personnel other than their termsof employment.

Investment in related parties have been disclosed in note 7 to this interim financial information. Other transactionswith related parties are summarised as follows:

During the period an amount of Rupees 10.348 million (30 June 2010: 10.048 million) has been charged to profitand loss account in respect of the companies contributions to the Employees Provident Fund.

12. NON-ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE

The Board of Directors of the company in their meeting held on 30 August 2011 proposed an interim cash dividendfor the half year ended 30 June 2011 @ 10 % Re. 1/- per share (2010: @ 10% Re. 1/- per share). This unconsolidatedcondensed interim financial information for the half year ended 30 June 2011 does not include the effect of thisappropriation which will be accounted for in the unconsolidated financial statements for the year ending 31December 2011.

37



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14. AUTHORIZATION FOR ISSUE

This unconsolidated condensed interim financial information has been approved and authorized for issue on30 August 2011 by the Board of Directors of the Company.

15. CORRESPONDING FIGURES

Corresponding figures have been rearranged and reclassified, wherever necessary, for the purpose of comparison.However no significant reclassification has been made during the period.

16. GENERAL

Figures have been rounded off to the nearest thousand of Rupees unless otherwise stated.

Umer ManshaChairman

S.M. JawedDirector



THE POWEROF ACCURACY

At Adamjee Insurance we don’t make mistakes, we can’t afford to. In a business thatprides itself in numbers, accuracy becomes the name of the game. Each number eachvalue is checked and vetted on multiple levels and that’s what defines our quest forexcellence.

Consolidated CondensedInterim Financial Statements (Unaudited)For the Half Year Ended 30 June 2011

On behalf of the Board, I am pleased to present the consolidated financial statements of Adamjee InsuranceCompany Limited and its subsidiary, Adamjee Life Assurance Company Limited for the half year ended30 June 2011.

The following appropriation of profit has been recommended by Board of Directors:

30 June 30 June2011 2010


Profit Before Tax 588,491 406,028

Taxation (114,996) (90,320)

Profit After Tax 473,495 315,708

Profit attributable to minority interest (4,224) (4,592)

Profit attributable to ordinary share holders 469,271 311,116

Unappropriated profit brought forward 8,736,251 8,522,098

Profit available for appropriation 9,205,522 8,833,214

Appropriation

Final Dividend for the year ended 31 December 2010 / 31 December 2009 (185,557) (168,688)

Reserve for issue of bonus shares for the year ended 31 December 2010 / 31 December 2009 - (112,459)

Profit after appropriation 9,019,965 8,552,067

Earnings Per Share

The half year consolidated financial statements reflect Rs. 3.79 (30 June 2010: Rs. 2.51) earning per sharefor the period under review.

On Behalf of Board of Directors

Lahore: 30 August 2011 Manzar MushtaqManaging Director and Chief Executive

DIRECTORS' REPORT TO THE MEMBERS ON CONSOLIDATEDFINANCIAL STATEMENTSFOR THE HALF YEAR ENDED 30 JUNE 2011


41

CONSOLIDATED CONDENSEDINTERIM BALANCE SHEET (UNAUDITED)AS AT 30 JUNE 2011



Share capital and reservesAuthorized share capital 1,500,000 1,500,000

Paid-up share capital 1,237,045 1,237,045

Retained earnings 9,019,965 8,736,251Reserves 990,038 1,047,106

10,010,003 9,783,357

Equity attributable to equity holders of the parent 11,247,048 11,020,402Non-controlling interest 108,424 152,444

Total equity 11,355,472 11,172,846

Balance of statutory funds 236,308 99,479

Underwriting provisionsProvision for outstanding claims (including IBNR) 7,209,294 7,989,823Provision for unearned premium 4,606,328 5,017,435Commission income unearned 260,339 305,434

Total underwriting provisions 12,075,961 13,312,692

Deferred liabilitiesDeferred taxation 124,707 58,375Staff retirement benefits 24,879 19,585

Creditors and AccrualsPremiums received in advance 133,124 77,174Amounts due to other insurers / reinsurers 1,141,656 1,599,650Accrued expenses 96,187 151,051Other creditors and accruals 1,758,275 1,564,460

3,129,242 3,392,335

BorrowingsLiabilities against assets subject to finance lease 80,316 107,637

Other liabilitiesUnclaimed dividends 34,704 29,121

TOTAL LIABILITIES 15,469,809 16,919,745

CONTINGENCIES AND COMMITMENTS 6

TOTAL EQUITY AND LIABILITIES 27,061,589 28,192,070

The annexed notes form an integral part of this condensed interim consolidated financial information.


42



Cash and bank depositsCash and other equivalents 71,244 59,453Current and other accounts 1,056,881 1,098,285Deposits maturing within 12 months 988,977 1,584,827

2,117,102 2,742,565

LoansTo employees 25,282 22,086

Investments 7 10,053,424 9,607,857

Current assets - othersPremiums due but unpaid 8 4,224,836 4,554,824Amounts due from other insurers/ reinsurers 9 857,219 993,584Salvage recoveries accrued 204,910 99,636Premium and claim reserves retained by cedants 23,252 23,252Accrued investment income 26,090 41,389Reinsurance recoveries against outstanding claims 5,732,868 6,253,202Taxation - payments less provision 76,393 45,873Deferred commission expense 515,302 512,222Prepayments 1,794,854 1,835,054Sundry receivables 325,174 316,635

13,780,898 14,675,671

Fixed Assets - Tangible & Intangible 10

OwnedLand and buildings 279,432 281,472Furniture and fixtures 72,534 70,212Motor vehicles 211,288 203,650Capital work-in-progress 10,450 -Machinery and equipment 280,080 318,224Computers and related accessories 55,048 60,455Intangible asset - computer software 63,406 66,435

972,238 1,000,448


TOTAL ASSETS 27,061,589 28,192,070


Umer ManshaChairman

S.M. JawedDirector



43

CONSOLIDATED CONDENSED INTERIMPROFIT AND LOSS ACCOUNT (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector



Revenue accountNet premium revenue 331,269 200,208 732,505 471,779 - 16,875 170,853 - 1,923,489 1,742,940Net claims (196,542) (112,785) (567,615) (324,754) - (7,855) (22) - (1,209,573) (1,120,832)Expenses (67,650) (43,590) (139,218) (99,407) - (5,128) (37,404) (16) (392,413) (330,599)Net commission (23,828) (35,948) (62,549) (12,429) - (5,099) (106,652) (1) (246,506) (152,794)Net Investment income - statutory fund - - - - - 1,231 5,430 2 6,663 663Add: Policyholder's liabilities at beginning of the year - - - - - 15,642 108,502 59 124,203 -Less: Policyholder's liabilities at end of the year - - - - - (25,113) (197,080) (154) (222,347) (8,658)Capital contribution from shareholder's fund - - - - - 550 56,349 109 57,008 54,150Surplus of policyholder funds 8,897 24 1 8,922 (25,010)

Underwriting result 43,249 7,885 (36,877) 35,189 - - - - 49,446 159,860

Investment income - other 229,219 8,654Rental income 165 164Other income 52,200 33,312

331,030 201,990General and administration expenses (279,854) (141,333)Exchange loss (43) (193)Finance charge on lease liabilities (6,150) (4,875)Share of profit of associated companies 70,361 6,813Profit before tax 115,344 62,402Provision for taxation (38,011) (1,880)


Profit attributable to:Equity holders of the parent 74,831 55,930

Non-controlling interest 2,502 4,592

Rupees Rupees


Revenue accountNet premium revenue 648,991 510,914 1,525,335 1,035,335 - 36,397 234,564 8 3,991,544 3,471,440Net claims (432,424) (233,038) (1,109,041) (739,627) - (15,995) (410) - (2,530,535) (2,192,412)Expenses (115,868) (90,453) (249,556) (185,049) - (16,377) (60,963) (46) (718,312) (666,992)Net commission (50,238) (85,000) (131,210) 467 - (12,312) (148,519) (4) (426,816) (272,917)Net Investment income - statutory fund - - - - - 3,400 9,873 4 13,277 952Add: Policyholder's liabilities at beginning of the year - - - - - 20,034 79,386 59 99,479 11,499Less: Policyholder's liabilities at end of the year - - - - - (25,113) (197,080) (154) (222,347) (20,157)Capital contribution from shareholder's fund - - - - - 23,927 83,149 133 107,209 85,869Surplus of policyholder funds - - - - - (13,961) - - (13,961) (25,010)

Underwriting result 50,461 102,423 35,528 111,126 - - - - 299,538 392,272

Investment income - other 435,945 241,811Rental income 330 718Other income 87,579 71,221

823,392 706,022General and administration expenses (399,154) (296,791)Exchange gain 251 207Finance charge on lease liabilities (9,872) (10,223)Share of profit of associated companies 173,874 6,813Profit before tax 588,491 406,028Provision for taxation (114,996) (90,320)


Profit attributable to:Equity holders of the parent 469,271 311,116

Non-controlling interest 4,224 4,592

Profit and loss appropriation accountBalance at the commencement of the year 8,736,251 8,522,098Profit after tax for the period 469,271 311,116Final dividend for the year ended 31 December 2010 @15% (Rs.1.5/- per share) [2009:@15%(Rs. 1.5/- per share) (185,557) (168,688)Reserve for issue of bonus shares - (112,459)

Balance unappropriated profit at the end of the period 9,019,965 8,552,067

Rupees Rupees

Earnings per share - basic and diluted 3.79 2.51The annexed notes form an integral part of this condensed interim consolidated financial information.

General Insurance


Marine,Aviation

andTransport

Motor Miscellaneous Treaty

Life Insurance

ConventionalBusiness

Non-unitizedInvestment

LinkedBusiness

Total

Quarterended

30 June2011

Quarterended

30 June2010


Accident andHealth

Business

General Insurance


Marine,Aviation

andTransport

Motor Miscellaneous Treaty

Life Insurance

ConventionalBusiness

Non-unitizedInvestment

LinkedBusiness

Total

Half yearended

30 June2011

Half yearended

30 June2010


Accident andHealth

Business

CONSOLIDATED CONDENSED INTERIMSTATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


(Unaudited) (Unaudited) (Unaudited) (Unaudited)Half year Half year Quarter Quarter

ended ended ended ended30 June 30 June 30 June 30 June

2011 2010 2011 2010


Profit for the period 473,495 315,708 77,333 60,522

Other comprehensive income:

Effect of translation of net investment inforeign branches 1,897 22,057 (9,467) 4,452

Capital contribution to statutory funds (107,209) (85,869) (57,008) (54,150)

Total comprehensive income for the period 368,183 251,896 10,858 10,824

Comprehensive income attributeable to:

Equity holders of the parent 412,203 285,945 35,386 30,600

Non-controlling interest (44,020) (34,049) (24,528) (19,776)

368,183 251,896 10,858 10,824


Umer ManshaChairman

S.M. JawedDirector



45

CONSOLIDATED CONDENSED INTERIMSTATEMENT OF CHANGES IN EQUITY (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector



Share Capital Capital Reserves Revenue Reserves

Equityattributable

to equityholders ofthe parent

Non-Controlling

interest

TotalEquity

Issued,subscribedand paid-up

Reserve forissue ofbonusshares

Reserve forexceptional

losses

Investmentfluctuation

reserve

Capitalcontributionto statutory

funds

Exchangetranslation

reserve

Generalreserve

Retainedearnings


Balance as at 31 December 2009 1,124,586 - 22,859 3,764 (31,840) 173,424 936,500 8,522,098 10,751,391 216,230 10,967,621

Total comprehensive income for the

half year ended 30 June 2010 - - - - (47,228) 22,057 - 311,116 285,945 (34,049) 251,896

Final dividend for the year ended

31 December 2009 @ 15 %

(Rupees 1.5/- per share) - - - - - - - (168,688) (168,688) - (168,688)

Transferred to reserve for issue of

bonus shares - 112,459 - - - - - (112,459) - - -

Issue of bonus shares for the year ended

31 December 2009@ 10 % 112,459 (112,459) - - - - - - - - -

Balance as at 30 June 2010 1,237,045 - 22,859 3,764 (79,068) 195,481 936,500 8,552,067 10,868,648 182,181 11,050,829

Balance as at 31 December 2010 1,237,045 - 22,859 3,764 (116,742) 200,725 936,500 8,736,251 11,020,402 152,444 11,172,846

Total comprehensive income for the

half year ended 30 June 2011 - - - - (58,965) 1,897 - 469,271 412,203 (44,020) 368,183

Final dividend for the year ended

31 December 2010 @ 15%

(Rupees 1.5/- per share) - - - - - - - (185,557) (185,557) - (185,557)

Balance as at 30 June 2011 1,237,045 - 22,859 3,764 (175,707) 202,622 936,500 9,019,965 11,247,048 108,424 11,355,472


46






b) Other operating activitiesIncome tax paid (79,187) (83,670)General and other expenses paid (489,792) (325,430)Loans advanced (51,646) (13,086)Loan repayments received 28,022 19,894Other receipts 105,834 4,168


Total cash flow (used in) / flow from all operating activities (642,621) 242,653








CONSOLIDATED CONDENSED INTERIMSTATEMENT OF CASH FLOWS (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011

47

CONSOLIDATED CONDENSED INTERIMSTATEMENT OF CASH FLOWS (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011




Operating cash flows (642,621) 242,652Depreciation expense (96,060) (90,644)Provision for gratuity (4,008) (3,245)Other income - bank deposits 64,853 65,494Profit on disposal of fixed assets 20,264 1,43Finance charge on lease rentals (9,872) (10,223)Share of profit of associated companies 173,874 6,813Rental income 330 718(Decrease) / Increase in assets other than cash (884,302) 990,433Decrease / (Increase) in liabilities other than running finance 946,241 (612,007)

(431,301) 591,429

Others

Profit on sale of investments 191,283 30,798Amortization expense (10,965) (5,757)Capital contribution from shareholders' fund 107,209 85,869Decrease / (Increase) in unearned premium 411,107 (574,449)Amortization of income on Government Securities - net - 2,160Gain on sale of mutual fund units 12,865 58,873Return on Pakistan Investment Bonds 21,125 7,474Decrease in loans (14,471) (6,808)Income tax paid 79,187 73,246(Provision) / reversal for diminution in value of investments (72,687) (129,653)Dividend, investment and other income 280,371 260,361Income on Treasury Bills 2,845 -Other income - TFCs 11,923 12,485

1,019,792 (185,401)


Definition of cash:

Cash comprises of cash in hand, bank balances excluding Rs.4.824 million (2010: Rs 4.451 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.




Cash and other equivalent 71,244 1,157

Current and other accounts 1,056,881 1,373,807





Umer ManshaChairman

S.M. JawedDirector



CONSOLIDATED CONDENSED INTERIMSTATEMENT OF PREMIUMS (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector





Opening Closing

Premiumsearned

Reinsuranceceded

Reinsuranceexpense


Net premiumrevenue




Opening Closing

General insurance:




Motor 1,640,293 1,760,996 1,682,633 1,718,656 176,877 175,330 158,886 193,321 1,525,335 1,693,453

Miscellaneous 1,231,782 1,220,871 1,035,062 1,417,591 426,828 215,786 260,358 382,256 1,035,335 666,077

5,593,685 5,017,435 4,606,328 6,004,792 2,163,297 1,774,525 1,653,605 2,284,217 3,720,575 3,431,086

Treaty

Proportional - - - - - - - - - -

- - - - - - - - - -

Total 5,593,685 5,017,435 4,606,328 6,004,792 2,163,297 1,774,525 1,653,605 2,284,217 3,720,575 3,431,086

Life insurance:

Conventional Business 51,428 - - 51,428 15,031 - - 15,031 36,397 16,318

Non-unitized Investment Linked Business 241,611 - - 241,611 7,047 - - 7,047 234,564 23,849

Accident and Health Business 10 - - 10 2 - - 2 8 187

Total 293,049 - - 293,049 22,080 - - 22,080 270,969 40,354

Grand Total 5,886,734 5,017,435 4,606,328 6,297,841 2,185,377 1,774,525 1,653,605 2,306,297 3,991,544 3,471,440




Opening Closing

Premiumsearned

Reinsuranceceded

Reinsuranceexpense


Net premiumrevenue




Opening Closing

General insurance:




Motor 824,337 1,683,521 1,682,633 825,225 83,267 168,339 158,886 92,720 732,505 835,313

Miscellaneous 588,226 1,095,724 1,035,062 648,888 235,298 202,169 260,358 177,109 471,779 392,542

2,848,056 4,674,538 4,606,328 2,916,266 1,280,207 1,553,903 1,653,605 1,180,505 1,735,761 1,708,894

Treaty

Proportional - - - - - - - - - -

- - - - - - - - - -

Total 2,848,056 4,674,538 4,606,328 2,916,266 1,280,207 1,553,903 1,653,605 1,180,505 1,735,761 1,708,894

Life insurance:

Conventional Business 23,664 - - 23,664 6,789 - - 6,789 16,875 10,092

Non-unitized Investment Linked Business 176,878 - - 176,878 6,025 - - 6,025 170,853 23,849

Accident and Health Business - - - - - - - - - 105

Total 200,542 - - 200,542 12,814 - - 12,814 187,728 34,046

Grand Total 3,048,598 4,674,538 4,606,328 3,116,808 1,293,021 1,553,903 1,653,605 1,193,319 1,923,489 1,742,940

49

CONSOLIDATED CONDENSED INTERIMSTATEMENT OF CLAIMS (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector







Outstanding claims

Opening Closing

Claimsexpenses




outstanding claims

Net claims expense

Opening Closing

General insurance:




Motor 673,805 1,533,231 1,626,923 767,497 115,067 1,092,515 1,177,330 199,882 567,615 574,882

Miscellaneous 1,007,968 978,884 400,015 429,099 521,583 696,963 279,725 104,345 324,754 250,320

2,526,533 6,821,397 7,173,031 2,878,167 979,588 5,240,895 5,937,778 1,676,471 1,201,696 1,120,059

Treaty

Proportional - 20,332 20,332 - - - - - - 460

- 20,332 20,332 - - - - - - 460

Total 2,526,533 6,841,729 7,193,363 2,878,167 979,588 5,240,895 5,937,778 1,676,471 1,201,696 1,120,519

Life insurance:

Conventional Business 21,563 12,522 14,545 23,586 15,731 - - 15,731 7,855 313

Non-unitized Investment Linked Business - 1,312 1,386 74 52 - - 52 22 -

Accident and Health Business - - - - - - - - - -

Total 21,563 13,834 15,931 23,660 15,783 - - 15,783 7,877 313

Grand Total 2,548,096 6,855,563 7,209,294 2,901,827 995,371 5,240,895 5,937,778 1,692,254 1,209,573 1,120,832





Outstanding claims

Opening Closing

Claimsexpenses




outstanding claims

Net claims expense

Opening Closing

General insurance:




Motor 1,394,815 1,540,738 1,626,923 1,481,000 189,782 995,153 1,177,330 371,959 1,109,041 1,131,605

Miscellaneous 1,420,638 1,099,317 400,015 721,336 558,857 856,873 279,725 (18,291) 739,627 459,427

5,046,631 7,960,077 7,173,031 4,259,585 2,160,515 6,352,838 5,937,778 1,745,455 2,514,130 2,186,814

Treaty

Proportional - 20,332 20,332 - - - - - - 460

- 20,332 20,332 - - - - - - 460

Total 5,046,631 7,980,409 7,193,363 4,259,585 2,160,515 6,352,838 5,937,778 1,745,455 2,514,130 2,187,274

Life insurance:

Conventional Business 42,763 9,395 14,545 47,913 31,918 - - 31,918 15,995 5,138

Non-unitized Investment Linked Business - 19 1,386 1,367 957 - - 957 410 -

Accident and Health Business - - - - - - - - - -

Total 42,763 9,414 15,931 49,280 32,875 - - 32,875 16,405 5,138

Grand Total 5,089,394 7,989,823 7,209,294 4,308,865 2,193,390 6,352,838 5,937,778 1,778,330 2,530,535 2,192,412


CONSOLIDATED CONDENSED INTERIMSTATEMENT OF EXPENSES (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector







Deferred commission

Opening Closing

Netcommission

expense

Othermanagement

expenses

Underwritingexpense


fromreinsurer

General insurance:




Motor 66,658 165,529 154,965 77,222 139,218 216,440 14,673 201,767 190,300

Miscellaneous 38,387 59,826 54,032 44,181 99,407 143,588 31,752 111,836 64,701

338,750 490,915 515,302 314,363 349,865 664,228 179,609 484,619 428,515

Treaty


- - - - - - - - -

Total 338,750 490,915 515,302 314,363 349,865 664,228 179,609 484,619 428,515

Life insurance:

Conventional Business 5,099 - - 5,099 5,128 10,227 - 10,227 33,011

Non-unitized Investment Linked Business 107,892 - - 107,892 37,404 145,296 1,240 144,056 21,704

Accident and health business 1 - - 1 16 17 - 17 163

Total 112,992 - - 112,992 42,548 155,540 1,240 154,300 54,878

Grand Total 451,742 490,915 515,302 427,355 392,413 819,768 180,849 638,919 483,393





Deferred commission

Opening Closing

Netcommission

expense

Othermanagement

expenses

Underwritingexpense


fromreinsurer

General insurance:




Motor 154,858 162,226 154,965 162,119 249,556 411,675 30,909 380,766 389,426

Miscellaneous 64,537 78,490 54,032 88,995 185,049 274,044 89,462 184,582 112,498

642,802 512,222 515,302 639,722 640,926 1,280,648 373,741 906,907 851,540

Treaty


- - - - - - - - -

Total 642,802 512,222 515,302 639,722 640,926 1,280,648 373,741 906,907 851,540

Life insurance:

Conventional Business 12,312 - - 12,312 16,377 28,689 - 28,689 64,853

Non-unitized Investment Linked Business 149,848 - - 149,848 60,963 210,811 1,329 209,482 21,704

Accident and health business 4 - - 4 46 50 - 50 1,812

Total 162,164 - - 162,164 77,386 239,550 1,329 238,221 88,369

Grand Total 804,966 512,222 515,302 801,886 718,312 1,520,198 375,070 1,145,128 939,909


51

CONSOLIDATED CONDENSED INTERIMSTATEMENT OF INVESTMENT INCOME (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011


Umer ManshaChairman

S.M. JawedDirector



Half year ended Half year ended Quarter ended Quarter ended30 June 2011 30 June 2010 30 June 2011 30 June 2010

(Rupees in thousand)General insurance:Income from non-trading investmentsAvailable-for-sale

Return on fixed income securities - 2,160 - -Return on Term Finance Certificates 11,923 12,485 5,949 6,121Return on Pakistan Investment Bonds 6,491 7,474 2,500 3,872Return on Treasury bills 2,845 - 2,845 -Dividend income - associated undertakings 148,194 132,467 78,115 (37,860) - others 131,510 113,012 26,535 113,012

279,704 245,479 104,650 75,152 300,963 267,598 115,944 85,145

Gain on sale of ‘available-for-sale’ investments - associated undertakings 17,563 58,874 7,483 18,587 - others 173,720 26,429 76,561 23,372

191,283 85,303 84,044 41,959 492,246 352,901 199,988 127,104

(Provision) / Reversal for impairment in value of'available-for-sale' investment (74,266) (129,518) 19,508 (124,896)

417,980 223,383 219,496 2,208Life insurance:Share holders' fundUnrealized appreciation / (diminution) in value

of quoted securities 8 (135) 23 -Return on government securities 7,831 13,574 3,935 5,734Return on bank deposit 242 453 100 301Dividend income 667 518 488 80Gain on sale of non trading investments 8,704 4,018 5,032 331Reversal of impairment in the value of

available for sale investments 513 - 145 - 17,965 18,428 9,723 6,446

Statutory FundsConventional BusinessReturn on government securities 2,026 265 766 265Investment income on bank deposits 262 319 180 213Gain on sale of units of open end mutual funds 1,007 350 232 167Loss on sale of government securities (2) - - -Reversal for impairment in value of

'available-for-sale' investment 107 - 53 - 3,400 934 1,231 645

Non-unitized Investment Linked BusinessUnrealized mark to market gain on held for

trading government securities 834 - 204 -Unrealized mark to market gain on held for

trading mutual funds 118 - 64 -Return on government securities 4,777 - 2,374 -Investment income on bank deposits 989 16 730 16Gain on sale of units of open end mutual funds 43 - 43 -Gain on sale of government securities 3,112 - 2,015 -

9,873 16 5,430 16Accident and Health BusinessReturn on government securities - - - -Investment income on bank deposits 4 2 2 2Gain on sale of units of open end mutual funds - - - -

4 2 2 2

Net investment income 449,222 242,763 235,882 9,317

Net investment income - statutory fund 13,277 952 6,663 663Net investment income - other 435,945 241,811 229,219 8,654

449,222 242,763 235,882 9,317


CONSOLIDATED CONDENSED INTERIMNOTES TO THE FINANCIAL INFORMATION (UNAUDITED)FOR THE HALF YEAR ENDED 30 JUNE 2011

52

1. THE GROUP AND ITS OPERATIONS

The group consists of:

Holding companyAdamjee Insurance Company Limited

Subsidiary company Percentage holding of Adamjee Insurance Company LimitedAdamjee Life Assurance Company Limited 55%

Adamjee Insurance Company Limited (holding company)

Adamjee Insurance Company Limited (holding company) is a public limited company incorporated in Pakistanon 28 September 1960 under the Companies Act, 1913 (now the Companies Ordinance, 1984). The Companyis listed on all the stock exchanges in Pakistan and is engaged in the non-life insurance business.

The registered office of the Company is situated at Islamabad Stock Exchange Building, Islamabad.

The Company also operates branches in the United Arab Emirates (UAE), the Kingdom of Saudi Arabia (KSA)and the Export Processing Zone (EPZ). The branch in the KSA has closed down its operations and is in“run-off” status with effect from 01 October 2003.

Adamjee Life Assurance Company Limited (subsidiary company)

Adamjee Life Assurance Company Limited (subsidiary company) was incorporated in Pakistan on 4 August 2008as a public unlisted company under the Companies Ordinance, 1984 and started its operations from 24 April2009. The registered office of the Company is located at MCB Building, Jinnah Avenue, Blue Area, Islamabadwhile its principal place of business is located at Third Floor, The Forum, Khayaban-e-Jami, Clifton, Karachi.The Company is a subsidiary of Adamjee Insurance Company Limited and an associate of IVM Intersurer B.V.who have a holding of 55% and 45% respectively in the share capital of the Company. IVM Intersurer B.V. hasnominated Hollard Life Assurance Company Limited (HLA), a subsidiary of IVM Intersurer B.V., to act on itsbehalf. HLA is South Africa's largest private sector insurance company.

The Company is engaged in life assurance business carrying on non-participating business only. In accordancewith the requirements of the Insurance Ordinance, 2000, the Company has established a shareholders' fundand the following statutory funds in respect of its each class of life assurance business:

- Conventional Business - Accident and Health - Non-unitized Investment Linked Business

2. BASIS OF PREPARATION

a) Statement of Compliance

This consolidated condensed interim financial report of the company for the six months period ended 30 June2011 has been prepared in accordance with the requirements of the International Accounting Standard 34 - InterimFinancial Reporting and provisions of and directives issued under the Companies Ordinance, 1984, the InsuranceOrdinance, 2000 and SEC (Insurance) Rules, 2002. In case where requirements differ, the provisions or directivesof Companies Ordinance, 1984, Insurance Ordinance, 2000 and SEC (Insurance) Rules, 2002 shall prevail.

The SECP has allowed insurance companies to defer the application of International Accounting Standard - 39(IAS - 39) 'Financial Instruments: Recognition and Measurement' in respect of "Investment available-for-sale"untill suitable amendments have been made in the law. Accordingly, the requirements of IAS - 39, to the extentallowed by SECP, have not been considered in the preparation of this consolidated condensed financial information.

b) Basis of presentation

This consolidated condensed interim financial information comprises the consolidated financial information ofAdamjee Insurance Company Limited and its subsidiary company, Adamjee Life Assurance Company Limited,as at 30 June 2011. The condensed interim financial information of the subsidiary companies has been consolidatedon line by line basis. All inter company balances and transaction have been eliminated.


53



3. BASIS OF MEASUREMENT

This consolidated condensed interim financial information has been prepared under the historical cost conventionexcept that obligations under certain employee benefits are measured at present value.

4. ACCOUNTING POLICIES AND COMPUTATION METHODS

The accounting policies and the methods of computation adopted in the preparation of this consolidated condensedinterim financial information are the same as those applied in the preparation of the consolidated financialstatements for the year ended 31 December 2010.

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Judgments and estimates made by the management in the preparation of this consolidated condensed interimfinancial information are the same as those applied to the preceding annual published financial statements ofthe Company for the year ended 31 December 2010.

6. CONTINGENCIES AND COMMITMENTS

6.1 Contingencies

The income tax assessments of the holding company have been finalized up to and including the tax year2009. However, the holding company has filed appeals in respect of certain assessment years mainly on accountof following:

i) The Deputy Commissioner of Income Tax (DCIT) has finalized assessments for the assessment year 1999-2000by taxing capital gains at the full rate of 33%. The aggregate tax liability assessed by the DCIT amounted toRupees 48.205 million against which the holding company has made a total provision of Rupees 44.141 millionresulting in a shortfall of Rupees 4.064 million. The holding company filed appeals with the Commissioner ofIncome Tax (Appeals) and Income Tax Appellate Tribunal (ITAT) which were decided against the holding company.Consequently the holding company has filed an appeal before the Honorable High Court of Sindh and the petitionis fixed for regular hearing;

ii) The Additional Commissioner / Taxation Officer has reopened assessments for the assessment years 2000-2001and 2001-2002 by taxing bonus shares received by the holding company during the above mentioned periodsresulting in an additional tax liability of Rupees 14.907 million. An appeal was filed before the Commissioner ofIncome Tax (Appeals) who cancelled the amended order passed by the Additional Commissioner and allowedrelief to the holding company but the Tax Department filed an appeal before the ITAT against the order of theAdditional Commissioner, which has been decided in favour of the holding company. However, the holdingcompany again received a notice from Additional Commissioner for reassessment of the case.The holdingcompany has filed a constitutional petion in Sindh High Court against such order.

iii) While finalizing the assessment for the assessment year 2002-2003, DCIT has reduced the business loss forthe year by Rupees 88.180 million by adjusting the dividend income against this loss. The holding companymaintains that it is entitled to carry the gross loss forward for adjustment against the future taxable income anddividend income for the year should be taxed separately at reduced rate. The appeals of the holding companyin this respect have been rejected by the Commissioner of Income Tax (Appeals), the ITAT and the Sindh HighCourt. The holding company has now filed a reference application with the Supreme Court of Pakistan. Themanagement is confident that the matter will eventually be decided in favor of the holding company and hasconsequently not made any provision against the additional tax liability of Rupees 26.455 million which may arisein this respect.

iv) The Tax Authorities have also amended the assessments for tax years 2003 to 2007 on the ground that theholding company has not apportioned management and general administration expenses against capital gainand dividend income. The holding company has filed constitution petition in the High Court of Sindh against theamendment in the assessment order. The holding company may be liable to pay Rupees 5.881 million in theevent of decision against the holding company, out of which Rupees 2.727 million has been provided by theholding company resulting in a shortfall of Rupees 3.154 million.



v) The Taxation Officer has passed an order in the tax year 2005 and 2006 under section 221 of the Income TaxOrdinance, 2001 (the Ordinance) levying minimum tax liability aggregating to Rupees 38.358 million. An appealhad been filed before the Commissioner of Income Tax (Appeals) who upheld the order of the Taxation Officer.The holding company has filed an appeal before ITAT which is pending to be heard.

vi) The holding company received a notice from Additional Commissioner Inland Revenue pertaining to the assessmentof tax year 2008. Among others, the Additional Commissioner raised issues pertaining to avoidance of tax oncapital gains on listed securities. However, the holding company filed a constitutional petition in Sindh High Courtagainst such order and the court has granted stay in this regard.

Pending resolution of the above-mentioned appeals filed by the holding company, no provision has been madein this consolidated condensed interim financial information for the aggregate amount of Rupees 86.938 million(31 December 2010: 88.201 million) as the management is confident that the eventual outcome of the abovematters will be in favor of the holding company.

6.2 Commitments

Holding company

There were no capital or other commitments as at 30 June 2011 (31 December 2010: Nil)

Subsidiary company

Commitments in respect of leased assets - not later than one year is Rupees 0.228 million (31 December 2010:2.996 million) and intangible assets not later than one year is Rupees 2.550 million (31 December 2010: 2.550million).



7. INVESTMENTS

Available-for-sale

In related parties Marketable securities 7,302,347 6,699,828 Less: Provision for impairment in value of investments (6,510) -

7,295,837 6,699,828

Others Marketable securities 2,969,653 3,264,744 Less: Provision for impairment in value of investments (480,068) (412,931)

2,489,585 2,851,813 Fixed income investments 130,099 -

2,619,684 2,851,813

At fair value through profit or loss Listed equity securities 4,377 853 Government securities 133,526 55,363

137,903 56,216

10,053,424 9,607,857

8. PREMIUMS DUE BUT UNPAID - Unsecured

Considered good 4,224,836 4,554,824Considered doubtful 307,275 199,015

4,532,111 4,753,839Less: Provision for doubtful balances 8.1 (307,275) (199,015)

4,224,836 4,554,824




Opening provision 199,015 119,530Exchange loss - 274Charge for the period 110,000 86,867Written off during the period - (7,656)Bad debts recovered (1,740) -


9. AMOUNTS DUE FROM OTHER INSURERS/ REINSURERS - Unsecured

Considered good 857,219 993,584Considered doubtful 70,000 30,000

927,219 1,023,584Less: Provision for doubtful balances 9.1 (70,000) (30,000)

857,219 993,584


Opening provision 30,000 30,000Charge for the period 40,000 -


55



10 FIXED ASSETS

10.1 The following capital expenditure was incurred during the period:

Building 7,529 116,039Furniture and fixtures 8,590 40,014Motor vehicles 30,486 80,085Machinery and equipment 8,477 34,917Computer and related accessories 4,978 28,773

Intangible assets 4,467 45,602

64,527 345,430

LeasedMotor vehicles - -

64,527 345,430

10.2 The following are the written down values of fixed assetsdisposed off during the period:

Building 2,633 618Furniture and fixtures 585 616Motor vehicles 6,228 41,553Machinery and equipment 913 1,555Computer and related accessories 404 695

10,763 45,037


31,111 68,036



(Unaudited) (Unaudited)30 June 30 June


11. TRANSACTIONS WITH RELATED PARTIESSubsidiary companyAssociated undertakingsPremium written 16,059 -Claims expense 25,767 15,504Commission expense in respect of Bancassurance 146,668 22,039Profit on bank deposits 817 438Travelling expenses - -Investment advisor fee 71 -Custodian fee 97 -Technical support fee 6,453 7,184Travelling expenses of directors - -Bank charges 11 -Investment purchased 5,355 198,910Investment sold 62,000 92,000Holding CompanyPremium underwritten 481,611 590,509Premium received 528,694 520,358Premium ceded 2,022 541Claims paid 1,119,634 248,939Rent paid 5,408 5,289Dividend received 174,473 132,467Dividend paid 66,157 60,126

Number of shares

Bonus shares received 2,326,338 2,114,852Bonus shares issued - 4,008,442



Balances outstanding as at 30 June 2011Subsidiary companyAssociated undertakingsPremium due but unpaid 5,676 308Bank deposits 99,855 24,664Investments held - 56,766Technical support fee payable 6,453 9,787Travelling expenses of directors - -Commission payable 60,934 15,202Claims payable 5,638 543Holding CompanyReceivable from staff gratuity fund 43,818 53,818Receivable from Employee Provident Fund 1,467 1,737

During the period an amount of Rupees 10.348 million (30 June 2010: 10.048 million) has been charged to profitand loss account in respect of the holding company's contributions to the Employees Provident Fund.

12. NON-ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE

The Board of Directors of the holding company in their meeting held on 30 August 2011 proposed an interimcash dividend for the half year ended 30 June 2011 @ 10% Re. 1/- per share (2010: @ 10% Re. 1/- per share).This consolidated condensed interim financial information for the half year ended 30 June 2011 does not includethe effect of this appropriation which will be accounted for in the consolidated financial statements for the yearending 31 December 2011.

57



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,235

238

,428

16,

919,

745

Insi

dePa

kist

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utsi

dePa

kist

an

(Rup

ees

in th

ousa

nd)

Agg

rega

teG

ener

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sura

nce

Conv

entio

nal

Busin

ess

Acc

iden

tan

d H

ealth

Bus

ines

s

Non

-un

itize

din

vest

men

tlin

ked

busi

ness

Insi

dePa

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utsi

dePa

kist

anIn

side

Paki

stan

Insi

dePa

kist

anIn

side

Paki

stan

Insi

dePa

kist

anIn

side

Paki

stan

Out

side

Paki

stan

Out

side

Paki

stan

Out

side

Paki

stan

Out

side

Paki

stan

Out

side

Paki

stan

Agg

rega

teLi

feIn

sura

nce

Gra

ndTo

tal

Fire

and

Pro

pert

yD

amag

eM

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e, A

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ion

and

Tran

spor

tM

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cella

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Una

lloca

ted

Cor

pora

teA

sset

s/ L

iabi

litie

sTo

tal

Life

Insu

ranc

e

30 J

une

2011



Reve

nue

acco

unt

Net p

rem

ium

reve

nue

639

,835

4

86,7

53

997

,887

1

,025

,265

-

3

6,39

7 8

2

34,5

64

3,4

20,7

09

2,8

58,5

19

9,1

56

24,

161

527

,448

1

0,07

0 -

-

-

-

5

70,8

35

612

,921

3

,991

,544

3

,471

,440

Net c

laim

s (4

31,6

59)

(231

,933

) (7

69,9

47)

(738

,647

) -

(1

5,99

5) -

(4

10)

(2,1

88,5

91)

(1,8

67,8

66)

(765

) (1

,105

) (3

39,0

94)

(980

) -

-

-

-

(3

41,9

44)

(324

,546

) (2

,530

,535

) (2

,192

,412

)

Expe

nses

(114

,640

) (8

7,21

2) (1

78,7

93)

(183

,698

) -

(1

6,37

7) (4

6) (6

0,96

3) (6

41,7

29)

(598

,735

) (1

,228

) (3

,241

) (7

0,76

3) (1

,351

) -

-

-

-

(7

6,58

3) (6

8,25

7) (7

18,3

12)

(666

,992

)

Net c

omm

issio

n (5

0,84

0) (8

1,15

6)(7

7,24

7) 1

,016

-

(1

2,31

2) (4

) (1

48,5

19)

(369

,062

) (2

31,0

34)

602

(3

,844

) (5

3,96

3) (5

49)

-

-

-

-

(57,

754)

(41,

883)

(426

,816

) (2

72,9

17)

Net I

nves

tmen

t inc

ome

-

stat

utor

y fu

nd -

-

-

-

-

3

,400

4

9

,873

1

3,27

7 9

52

-

-

-

-

-

-

-

-

-

-

13,

277

952

Add:

Pol

icyho

lder

's lia

biliti

es

a

t beg

inni

ng o

f the

per

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-

-

-

-

-

20,

034

59

79,

386

99,

479

11,

499

-

-

-

-

-

-

-

-

-

-

99,

479

11,

499

Less

: Pol

icyho

lder

's lia

biliti

es

a

t end

of t

he p

erio

d -

-

-

-

-

(2

5,11

3) (1

54)

(197

,080

) (2

22,3

47)

(20,

157)

-

-

-

-

-

-

-

-

-

-

(222

,347

) (2

0,15

7)

Capi

tal c

ontri

butio

n fro

m

s

hare

hold

er's

fund

-

-

-

-

-

23,

927

133

8

3,14

9 1

07,2

09

85,

869

-

-

-

-

-

-

-

-

-

-

107

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8

5,86

9

Surp

lus

of p

olicy

hold

er fu

nds

-

-

-

-

-

(13,

961)

-

-

(13,

961)

(25,

010)

-

-

-

-

-

-

-

-

-

-

(13,

961)

(25,

010)

Unde

rwrit

ing

resu

lt 4

2,69

6 8

6,45

2 (2

8,10

0)

103

,936

-

-

-

-

2

04,9

84

214

,037

7

,765

1

5,97

1 6

3,62

8 7

,190

-

-

-

-

9

4,55

4 1

78,2

35

299

,538

3

92,2

72

Inve

stm

ent i

ncom

e - o

ther

435

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2

41,8

11

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-

435

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2

41,8

11

Rent

al in

com

e 3

30

718

-

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3

30

718

Oth

er in

com

e 7

1,81

0 5

7,82

5 1

5,76

9 1

3,39

6 8

7,57

9 7

1,22

1

713

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5

14,3

91

110

,323

1

91,6

31

823

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7

06,0

22

Gen

eral

and

adm

inist

ratio

n ex

pens

es (3

57,1

88)

(260

,329

) (4

1,96

6) (3

6,46

2) (3

99,1

54)

(296

,791

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Exch

ange

gai

n 2

48

207

3

-

2

51

207

Fina

nce

char

ge o

n le

ase

liabi

lities

(9,8

72)

(10,

223)

-

-

(9,8

72)

(10,

223)

Shar

e of

pro

fit o

f ass

ocia

ted

com

pani

es 1

73,8

74

6,8

13

-

-

173

,874

6

,813

Prof

it be

fore

tax

520

,131

2

50,8

59

68,

360

155

,169

58

8,49

1 4

06,0

28

Prov

ision

for t

axat

ion

(114

,996

) (9

0,32

0) -

-

(1

14,9

96)

(90,

320)

Prof

it af

ter t

ax 4

05,1

35

160

,539

6

8,36

0 1

55,1

69

473

,495

3

15,7

08

13.2

For

gen

eral

insu

ranc

e, e

ach

clas

s of

bus

ines

s ha

s be

en id

entif

ied

as r

epor

tabl

e se

gmen

t w

here

as,

for

life

insu

ranc

e th

e st

atut

ory

fund

s ar

e tr

eate

das

rep

orta

ble

segm

ents

. Fol

low

ing

is a

sch

edul

e of

seg

men

t wis

e re

venu

e an

d re

sults

:

Accid

ent

and

Heal

thBu

sines

s

Gen

eral

Insu

ranc

eLi

fe In

sura

nce

Tota

lG

ener

al In

sura

nce

Tota

lAg

greg

ate

Life

Insu

ranc

e

BUSI

NESS

UND

ERW

RITT

EN IN

SIDE

PAK

ISTA

N

30 June

2011

30 June

2010

Conv

entio

nal

Busin

ess

Non-

unitiz

edIn

vest

men

tLi

nked

Busin

ess

Mar

ine,

avia

tion

and

trans

port

Misc

ella

neou

sTr

eaty

Mot

or

BUSI

NESS

UND

ERW

RITT

EN O

UTSI

DE P

AKIS

TAN

30 June

2011

30 June

2010

30 June

2011

Conv

entio

nal

Busin

ess

Accid

ent

and

Heal

thBu

sines

s

Non-

unitiz

edIn

vest

men

tLi

nked

Busin

ess

Fire

and

prop

erty

dam

age

Mar

ine,

avia

tion

and

trans

port

Misc

ella

neou

sTr

eaty

Mot

orFi

re a

ndpr

oper

tyda

mag

e

30 June

2010

(Rup

ees

in th

ousa

nd)

14. GENERAL

Figures have been rounded off to the nearest thousand of rupees.

15. AUTHORIZATION FOR ISSUE

These condensed interim consolidated financial information have been authorized for issue on 30 August 2011by the Board of Directors of the Company.

Umer ManshaChairman

S.M. JawedDirector



59



contents...rehan ahmed khan, f.c.a., a.c.m.a. executive director jehangir bashir nawaz auditors m/s...

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