23rd annual report- 2018

23rd ANNUAL REPORT- 2018

Registered OfficeBiman Bhaban (2nd Floor), 100, Motijheel Commercial Area, Dhaka-1000Phone : PABX : 9558297, 9558993, 9556204, Fax: 88-02-9578113

e-mail : [email protected], Web site : www.meghnalife.com

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MEGHNA LIFE INSURANCE CO. LTD.

1

Our Vision

Our vision is to make the Company a market leader by virtue of service to be rendered to our valued clients and shareholders. It is our aim to create an enviable image in the insurance industry.

Our Mission

* Speedy & quality services to our policyholders.* Maintain sustainable growth.* Follow strong/high ethics of morality in all spheres of business

operation/activities.* Provide profitable return on shareholders' equity.* Maintain corporate social responsibilities (CSR).*Explore new areas/venues where Insurance awareness has not yet been

developed.* Protect policyholder's interest.* Develop honesty, sincerity, integrity among the service rendering employees.

2

Strategic Objectives

*To provide prompt/speedy claim settlement.*To procure Insurance premium in a transparent manner based on

market mechanism within the legal and social framework.* To provide efficient, innovative and quality products and services

with excellent delivery system to the policyholders.* To attract/retain efficient/capable employees and to enhance their

career through training, motivation and remuneration.* To contribute meaningfully towards the progress of the nation by

providing corporate social responsibilities.* To generate profit and fair returns to our shareholders ensuring

sustainable growth.

Core Values* Policyholder first (Customer Centricity)* Ethics (Honesty/sincerity/devotion/Integrity/high moral).* Transparency* Responsibility* Innovation* Teamwork

Our Commitment* Focus on policyholder's satisfaction*Committed to deliver best financial services to policyholders.* Catering high degree of professionalism by use of latest digital

technology.*Creating and maintaining long lasting relationship based on

mutual trust and interest with the policyholders and share holders.

*Sharing the values and belief of our policyholders.

3

Contents Page No.

01. Corporate Information 06

02. Our Journey 07

03. Transmittal Letter 09

04. Notice of the 23rd Annual General Meeting 10

05. Products & Services 11

06. Board of Directors 12

07. Corporate Management & Committees 13

08. Shariah Council 14

09. Equity Performance 15

10. Operational Highlights 2018 16

11. Key Financial Indicators 17

12. Business Highlights 19

13. Financial Highlights 20

14. Achievement of Meghna Life (Graph) 21

15. Photographs 24

16. Profile of Directors 27

17. Profile of Independent Directors 31

18. Chairman's Message 32

19. Chief Executive Officer's Report 35

20. Report of the Audit Committee 37

21. Certification by The Chief Executive Officer and the

Chief Financial Officer on financial reporting 38

22. Certificate of Corporate Governance 39

23. Report on Corporate Governance 40

24. Status of Compliance of Corporate Governance 42

4

Contents Page No.

25. Director's Report 56

26. Auditor's Report 64

27. Balance Sheet 68

28. Revenue Account 70

29. Statement of Changes in Shareholder's Equity 72

30. Cash Flow Statement 73

31. Notes to the Financial Statements 74

32. Statement of Life Insurance Fund 94

33. Form-AA 95

34. Director's Certificate 97

35. Consolidated Balance Sheet 98

36. Consolidated Revenue Account 100

37. Consolidated Statement of Changes in Shareholder’s Equity 102

38. Consolidated Cash Flow Statement 103

39. Consolidated Notes to the Financial Statements 104

40. Consolidated Statement of Life Insurance Fund 107

41. Consolidated Form-"AA" 108

42. Meghna Life Securities and Investment Limited 109

43. Independent Auditor’s Reports 111

44. Statement of Profit or Loss and Other Comprehensive Income 115

45. Statement of Changes in Shareholders' Equity 116

46. Statement of Financial Position 117

47. Statement of Cash flows 118

48. Property, Plant & Equipment 119

49. Notes to the Financial Statements 120

5

01. Name of Company :Meghna Life Insurance Company Limited

02. Year of Establishment :1996

03. Date of Incorporation :5th May 1996

04. Business Commencement Date :5th May 1996

05. Authorised Capital :Tk. 60 Crore

06. Paid up Capital :Tk. 33,52,19,130/-

07. Nature of Business :Life Insurance Business

08. Registered Office :Biman Bhaban (2nd floor) 100, Motijheel Commercial Area Dhaka-1000, Bangladesh.

09. Auditors :M/S A. Wahab & Co. Chartered Accountants Hotel Purbani, Annex-2, (4th Floor) 1 Dilkusha C/A, Dhaka-1000.

10. Legal Adviser :Advocate M.A. Wadud The Law Society, Birds Bangladesh Agency Bhaban, (Ground Floor), 103 Motijheel C/A, Dhaka-1000.

11. Bankers :Sonali Bank Ltd., Janata Bank Ltd., Agrani Bank Ltd. Pubali Bank Ltd., Rupali Bank Ltd. Uttara Bank Ltd., Bangladesh Krishi Bank Rajshahi Krishi Unnayan Bank, Bank Al-Falah Ltd. NCC Bank Ltd., Jamuna Bank Ltd. Islami Bank BD Ltd., The Trust Bank Ltd. Dhaka Bank Ltd., Prime Bank Ltd. National Bank Ltd., Bank Asia Ltd., EXIM Bank Ltd. Brac Bank Ltd., Al-Arafah Islami Bank Ltd. Eastern Bank Ltd., I.F.I.C Bank Ltd., One Bank Ltd. Bangladesh Commerce Bank Ltd., AB Bank Ltd. ICB Islamic Bank Ltd., First Security Islami Bank Ltd. Mercantile Bank Ltd., Social Islami Bank Ltd. Premier Bank Ltd., Southeast Bank Ltd. Standard Bank Ltd., Dutch Bangla Bank Ltd. Shahjalal Islami Bank Ltd., United Commercial Bank Ltd. Habib Bank Ltd., Mutual Trust Bank Ltd. South Bangla Agriculture & Commerce Bank Ltd. Padma Bank Ltd., NRB Global Bank Ltd. BDBL, Union Bank Ltd., The City Bank Ltd. Meghna Bank Ltd., Modhumoti Bank Ltd. NRB Commercial Bank Ltd.

6

Corporate Information

1996

5th May Incorporation of the company

5th May Commencement of business

5th June Issuance of first insurance policy

1998

13th June Launching of Loko Bima (Micro insurance)

2001

22nd Feb. Launching of Islami Bima (Takaful)

19th Aug. First declaration of bonus to policyholder

2005

11th April Agreement signed with CDBL

27th April Consent received from BSEC for issuance of public share of Tk. 45 million

25th Aug. Start up demat settlement

1st Sept. Listing with Dhaka and Chittagong Stock Exchanges Limited

4th Sept. First trading at Dhaka and Chittagong Stock Exchanges Limited

2008

10th April Start up of Mobile SMS programme for the policyholder

2009

6th Aug. Purchase of eight (8) decimal land at Sagardi at Barisal town

14th Dec. start up the construction work of high rise company's own

building at 11B & 11D, Toyenbee Circular Road, Motijheel

C/A, Dhaka-1000.

7

Our Journey

Transmittal Letter

9

All Honorable Shareholders

Insurance Development and Regulatory AuthorityBangladesh Securities and Exchange CommissionRegistrar of Joint Stock Companies & FirmsDhaka Stock Exchange LimitedChittagong Stock Exchange LimitedCentral Depository Bangladesh LimitedAll other StakeholdersBangladesh.

Sub: Annual Report of Meghna Life Insurance Company Ltd. for the year ended

31st December, 2018.

Dear Sir,

We are pleased to enclose a copy of the above Annual Report together with the Audited

Accounts & Financial Statements for the year ended 31st December, 2018 for your kind

information and record.

With Best Regards

(Aziz Ahmed)Company Secretary

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MEGHNA LIFE INSURANCE CO. LTD.Head Office : Biman Bhaban (2nd floor), 100, Motijheel C/A, Dhaka-1000.

Website : www. meghnalife.com

Notice is hereby given that the 23rd Annual General Meeting (AGM) of Meghna Life Insurance Company Limited will be held at Multipurpose Hall (Ground floor), Institution of Diploma Engineers, Bangladesh, 160/A, VIP Road, Kakrail, Dhaka-1000 on Thursday the 26th day of September 2019 at 10:30 a.m. to transact the following businesses:

AGENDA

DhakaDated-the 29th August 2019.Notes:

To confirm the minutes of the 22nd Annual General Meeting of the Company held on 30.09.2018

1.

The Record Date is 01.09.20191)Shareholders whose names will appear in the share Register/Depository Register on the Record Date will be eligible to attend the meeting and will qualify for dividend.A member eligible to attend and vote at the 23rd Annual General Meeting, may appoint a proxy to attend and vote on his/her behalf. Proxy form must be affixed with a revenue stamp of TK. 20/- and submitted to Registered Office of the Company not later than 72 hours before the time fixed for holding the Annual General Meeting. Shareholders and proxies are requested to record their entry in the AGM well in time.The Registration Counter shall remain opened from 8.00 a.m to 10.30 a.m as on AGM date.Hon'ble shareholders are requested to update the particulars of their BO ID with mailing address, contact number and 12 Digits Taxpayer's Identification Number (e-TIN) through Depository participants (DP) before the Record Date. If any shareholder fails to update their e-TIN before the Record Date, Income Tax at source will be deducted from Dividend payable as per NBR Notification. Bank accounts of the individual shareholders shall also be updated as per statutory requirement. All BO Account holders are requested to convey the e-mail no. (if any) to the authority so that they may be communicated.m¤§vwbZ †kqvi‡nvìvi‡`i m`q AeMwZi Rb¨ Rvbv‡bv hv‡”Q †h, evsjv‡`k wmwKDwiwUR A¨vÛ GKvª‡PÄ

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2)

4)5)6)

7)

3)

To receive, consider and adopt the Revenue Accounts of the Company for the year ended 31st December, 2018 and the Balance Sheet as at that date together with the reports of the Directors and the Auditors thereon.

2.

To declare dividend for the year ended 31st December, 2018 as recommended by the Board of Directors.

3.

To elect/re-elect Directors as per Articles of Association of the Company.4.

Miscellaneous: To transact any other business with the permission of the chair.Hon'able shareholders are requested to make it convenient to attend the meeting in time.6.

To appoint/re-appoint Auditors for the year 2019 and to fix their remuneration.5.

By order of the Board of Directors

(Aziz Ahmed)Company Secretary

10

NOTICE OF THE 23rd ANNUAL GENERAL MEETING (AGM)

11

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Products & Services

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Company SecretaryAziz Ahmed

ChairmanNizam Uddin Ahmed

Vice ChairmanHasina Nizam

Chief Executive OfficerN.C. Rudra

Independent DirectorsMd. Yousuf Ali HowladerMd. Nurul Islam MiahMohammad Ahsan Ibne Kabir

DirectorsNasir Uddin AhmedRiaz Uddin AhmedJannatul Fardous

Karnaphuli Insurance Company Ltd. (Nominated Director ANM Fazlul Karim Munshi)

Nizam-Hasina Foundation Hospital (Nominated Director Md. Moin Uddin)

Umme Khadija MeghnaSharmin NasirDilruba SharminProfessor Md. Mazharul Islam

12

Board of Directors

13

Chief Executive OfficerN.C. Rudra

Management Committee

N. C. Rudra President

Lt. Col. (Retd) M. Shamsuddin Ahmed Member

D.S. Taiful Islam "

Mohammad Tarek, FCA "

Md. Abul Bashar "

Md. Faruq Ahmed Siddique "

Saifuddin Ahmed "

Zahur Ahmed Choudhury "

Mian Mohd. Mashiur Rahman "

Md. Nizam Uddin (Anis) "

Md. Shamsul Hoque "

S.M. Shahadat Hossain "

Syed Enamul Hoque "

Md. Abu Sahed "

Md. Mohiuddin Chowdhury "

Aziz Ahmed Member Secretary

Director-Marketing & DevelopmentLt. Col. (Retd) M. Shamsuddin Ahmed

Audit CommitteeMd. Yousuf Ali Howlader Chairman(Independent Director)Nasir Uddin Ahmed (Director) MemberRiaz Uddin Ahmed (Director) "

Deputy Managing Director & CFOMohammad Tarek, FCA

Deputy Managing DirectorsMd. Abul BasharMd. Rakibul Hasan

Addl. Managing DirectorD.S. Taiful Islam

Senior General ManagerMd. Shamsul Hoque

General ManagerS.M. Shahadat Hossain

Joint Executive Director &Company SecretaryAziz Ahmed

Joint Executive DirectorsMian Mohd. Mashiur RahmanMd. Nizam Uddin (Anis)

Executive DirectorsMd. Faruq Ahmed SiddiqueSaifuddin AhmedZahur Ahmed Choudhury

Corporate Management & Committees

Professor Moulana Muhammad Salah Uddin ChairmanKhatib, National Mosque Baitul Mukarram, Dhaka

Justice Mohammad Abdur Rouf MemberFormer Chief Election Commissioner

Moulana & Poet Ruhul Amin Khan "Joint Secretary, Jamiatul Modarresin & Executive Editor, The Daily Inquilab, Dhaka.

Moulana Mohammad Nurul Huda Fayazi, Pir Saheb-Karimpur "Chairman, Quran Education Board, Dhaka.

Moulana Mohammed Saleh "Former Principal, Madrasha-e-Alia, Khulna

Dr. Moulana M.A Faruque "Chairman, Islamic Studies Department, South East University

Mufti Muhammad Amimul Ehsan Muraqib

Company Representative

Nizam Uddin Ahmed MemberChairman

D.S. Taiful Islam "Additional Managing Director

Md. Nizam Uddin (Anis) Member SecretaryJoint Executive Director (IBT)

14

Shariah Council

Number of outstanding share - 3,35,21,913

Book value per share - Tk. 10 each

Market value per share as on 31-12-2018 - Tk. 77.90

Earnings per Share - Tk. 3.03

Dividend per share - Tk. 2.00

Price earning ratio - 25.71 Times

Net Assets Value per Share - Tk. 39.53

Dividend pay out ratio - 66%

15

Equity Performance

Permanent Staff members - 937Nos.

Casual & Temporary staff members - 448Nos.

Branches - 244Nos.

Gross Premium - Tk. 432.91Crore

Net Premium - Tk. 431.46Crore

Investment Income - Tk. 96.35Crore

Other income - Tk. 1.60Crore

Total Revenue - Tk. 530.86Crore

Total Assets -Tk.1,838.55Crore

Net Assets - Tk. 132.52 Crore

Life Insurance Fund -Tk. 1,686.73Crore

Gross Surplus for the year (As per Valuation) - Tk. 89.80Crore

Tax & Vat paid to the national exchequer Respectively:

a) Tax - Tk. 13.52Crore

b) Vat - Tk. 1.14Crore

Number of Life Policies - 88,020Nos.(Issued during 2018)

Number of claims paid during the year 2018:

Death - 1,818Nos.

Maturity - 52,614Nos.

16

Operational Highlights-2018

SR Particulars YearNo. 2014 2015 2016 2017 201801First Year Premium Income 1,398.62 1,187.98 1,061.18 1,017.61 1026.5002Renewal Premium Income 3,007.34 3,137.07 3,151.89 3,237.91 3270.3003Group & Health Insurance Premium 25.54 26.41 29.56 30.53 32.3004Gross Premium 4,431.50 4,351.46 4,242.63 4,286.05 4329.1005Re-insurance Premium 8.74 7.65 9.50 11.82 14.5006Net Premium (4-5) 4,422.76 4,343.81 4,233.13 4,274.23 4314.6007Retention Ratio (6/4)(%) 99.80% 99.82% 99.78% 99.72% 99.66%08First Year Premium Income growth (%) 8.93% (15.06%) (10.67%) (4.11%) 0.87%09Renewal Premium Income growth (%) 1.74% 4.31% 0.47% 2.73% 1.00%10Gross Premium Income growth (%) 4.20% (1.81%) (2.50%) 1.02% 1.00%11 First Year Commissions paid for acquisition of 702.61 619.44 572.40 511.29 476.00 life insurance business12Second Year Commissions paid for acquisition 38.10 34.88 34.20 38.80 35.30 of life insurance business13Third and Later Year Commissions paid for 56.90 59.23 36.00 29.36 56.58 acquisition of life insurance business14Total Commissions paid for acquisition of 797.61 713.55 642.60 579.45 567.88 life insurance business (11+12+13)15First Year Commissions/First year Premium (%) 50.24% 52.14% 53.94% 50.24% 46.37%16Second Year Commissions/Second year 14.70% 13.18% 9.45% 9.15% 8.39% Renewal Premium (%)17Third Year and Later Years Commissions/ Third 2.07% 1.99% 1.99% 1.04% 1.99% and Later years Premium (%)18Management Expenses 1,767.37 1,583.88 1,440.52 1,337.44 1234.9819Allowable Management Expenses 1,697.81 1,504.15 1,388.06 1,360.70 1355.0220Excess Management Expenses (18-19) 69.56 79.73 52.46 (23.26) (120.04)21Excess Management Expenses Ratio (%) 4.10% 5.30% 3.78% (1.71%) (8.86%)22Overall Management Expenses Ratio (%) 39.88% 36.39% 33.95% 31.20% 28.53%23Renewal Expenses Ratio (%) 17.31% 17.54% 16.66% 14.28% 11.53%24Claims paid 2,123.12 3,056.94 2,605.70 2,717.30 2599.0825Claims/Gross Premium (%) 47.91% 70.25% 61.42% 63.40% 60.04%26Total Commission Expenses/Gross Premium (%) 18.00% 16.40% 15.15% 13.52% 13.12%27Investment Income 977.85 942.14 921.74 930.13 963.5428Investment Income/Gross Premium (%) 22.07% 21.65% 21.73% 21.70% 22.26%29Yield on Life Fund (%) 7.96% 7.18% 6.69% 6.33% 6.11%30Conservation Ratio (%) 70.71% 70.79% 72.43% 76.32% 76.30%31Second Policy Year Lapse Ratio (%) by number 64.93 74.56 82.02 66.91 54.30 of policies32Third Policy Year Lapse Ratio (%) by number 68.53 81.14 84.68 65.24 61.29 of policies

17

Annexure IKey Financial Indicators

(Amount in million BDT unless otherwise stated)

First Year and Renewal Premium Income (Amount in million BDT unless otherwise stated)Year 2014 2015 2016 2017 2018 Description 1,398.62 1,187.981,061.18 1017.61 1026.50 First Year Premium Income2014 316.18 291.28 148.05 214.29 311.74 Renewal premium out of the policies issued in 20142015 282.61 303.47 216.04 300.29 271.51 Renewal premium out of the policies issued in 20152016 N.A 372.51 255.80 171.14 336.09 Renewal premium out of the policies issued in 20162017 N.A N.A N.A N.A 361.92 Renewal premium out of the policies issued in 2017N.A= Not ApplicableNumber of First Year and Renewal Policies

Year 2014 2015 2016 2017 2018 Description 162,242 161,910 114,605 89,193 88,020Number of New Policies issued 2014 47,775 40,742 19,484 33,011 32,330Number of policies renewed out of the policies issued in 20142015 42,572 42,176 25,553 30,090 27,590Number of policies renewed out of the policies issued in 20152016 N.A 45,763 27,631 16,584 31,520Number of policies renewed out of the policies issued in 20162017 N.A N.A N.A N.A 38,797Number of policies renewed out of the policies issued in 2017N.A= Not Applicable Bar diagrams relating to the following, but not limited to, may also be included.?Total Assets ?Life Fund ?Management Expenses ?Claims ?Gross Premium Income ?Investment Income ?Excess Expenses

SR Particulars YearNo. 2014 2015 2016 2017 201833 Fourth Policy Year Lapse Ratio (%) by number of policies 73.77 81.89 86.55 62.53 59.3934 Fifth Policy Year Lapse Ratio (%) by number of policies 75.11 85.37 85.54 59.08 57.1835 Sixth Policy Year Lapse Ratio (%) by number of policies 75.72 87.38 89.24 51.20 63.4736 Second Policy Year Lapse Ratio (%) by premium amount 69.00 68.65 77.12 58.30 56.3937 Third Policy Year Lapse Ratio (%) by premium amount 68.27 79.76 83.39 60.32 60.4138 Fourth Policy Year Lapse Ratio (%) by premium amount 64.71 77.12 87.24 66.20 61.5939 Fifth Policy Year Lapse Ratio (%) by premium amount 63.05 72.68 81.81 69.70 58.3040 Sixth Policy Year Lapse Ratio (%) by premium amount 65.90 74.78 80.78 56.52 61.2441 Market Price per Share (in BDT) at year end 90.60 57.00 55.70 59.90 77.9042 Dividend yield (%) 3.64% 4.39% 4.49% 3.34% 2.57%43 Outstanding Premium as at 31st December 911.65 1,177.69 1,490.53 1,858.25 1801.7444 Total Investment as 31st December 10,950.2011,379.9311,728.0912,214.8713420.1445 Life Fund as at 31st December 13,406.6813,773.0414,689.9015,634.6216867.3346 Total Assets as at 31st December 14,703.0315,179.4215,921.5916,979.7818385.5447 Paid Up Capital as at 31st December 253.38 304.05 319.26 335.22 335.2248 Paid Up Capital/Total Asset (%) 1.72% 2.00% 2.00% 1.97% 1.82%49 Net cash flow from operating activities 644.21 (220.07) 291.08 591.61 1164.9350 Net cash flow from investing activities (552.17) (164.75) (293.94) (623.45) (297.68)51 Net cash flow from financing activities 25.48 49.60 18.74 14.50 (0.63)52 Net change in cash and cash equivalent 117.52 (335.22) 15.88 (17.34) 866.62

18

Comparative Statement of New Business & Business Inforce

Ekok Bima 2014 2015 2016 2017 2018New BusinessNumber of Policies 57,473 55,095 48,308 43,227 45,023Sum Assured (In Crore Taka) 895.29 657.59 658.53 876.73 640.071st Year Premium (In Crore Taka) 73.02 59.02 59.32 60.27 60.66Business In forceNumber of Policies 3,50,078 3,61,941 3,59,884 3,65,523 3,72,847Sum Assured (In Crore Taka) 2,312.89 3,315.26 2,372.35 1,394.5 1,483.3

Loko BimaNew BusinessNumber of Policies 63,799 67,460 44,506 26,038 22,838Sum Assured (In Crore Taka) 394.96 415.66 308.92 237.49 245.891st Year Premium (In Crore Taka) 27.51 32.7 24.17 20 20.99

Business In forceNumber of Policies 5,62,118 5,20,130 4,48,882 4,24,812 4,14,522Sum Assured (In Crore Taka) 1,017.33 1,774.42 975.01 1,686.43 1,748.15

Islami BimaNew BusinessNumber of Policies 40,970 28,204 21,791 19,928 20,159Sum Assured (In Crore Taka) 482.84 291.53 244.58 234.44 233.941st Year Premium (In Crore Taka) 36.34 27.08 22.62 21.49 21

Business In forceNumber of Policies 2,42,121 2,32,313 2,14,285 2,05,411 2,01,012Sum Assured (In Crore Taka) 1,028.66 1,455.45 918.83 817.94 836.72

GroupNew Business Number of Policies 9 8 6 5 6Sum Assured (In Crore Taka) 68.82 117.72 67.21 45.41 91.531st Year Premium (In Crore Taka) 2.55 2.64 2.95 3.05 3.23No. of Lives Insured 4461 8625 1503 937 1891

Business In forceNumber of Policies 33 48 54 50 52Sum Assured (In Crore Taka) 369.19 545.78 549.67 648.01 740.83No. of Lives Insured 18,539 18,464 19,395 19,305 19,777

19

Business Highlights

Business PerformanceTaka In Crore

20

Particulars 2014 2015 2016 2017 2018

1st Year Premium 139.86 118.80 106.12 101.76 102.65

Renewal Premium 300.74 313.71 315.19 323.79 327.03

Group Premium 2.55 2.64 2.95 3.05 3.23

Gross Premium 443.15 435.15 424.26 428.61 432.91

Investment Income 97.57 94.13 89.63 85.73 96.35

Claims 212.31 305.69 260.57 271.73 259.91

Management Expenses 176.74 158.38 144.05 133.74 123.50

a) Commission 79.76 71.35 64.26 57.94 56.79

b) Admn. Expenses 96.98 87.03 79.79 75.80 66.71

Claims to Premium % 47.91% 70.24% 61.41 63.40% 60.03%

Management Expenses to Premium % 39.88% 36.39% 33.95% 31.20% 28.52%

Assets 1,470.30 1517.94 1,592.161,697.98 1,838.55

Life Fund 1,340.67 1377.30 1,468.991,563.46 1,686.73

Business Growth

Particulars 2014 2015 2016 2017 2018

Premium income in % 4.19 (1.83) (2.50) 1.02 1.00

Assets in % 9.00 3.24 4.88 6.65 8.27

Life Fund in % 10.94 2.73 6.65 6.43 7.88

Financial Highlights

21

Achievement of Meghna Life

443.15

435.15

424.26

428.61

432.91

410

415

420

425

430

435

440

445

2014 2015 2016 2017 2018

Premium In crore Taka

Year

Year

Life Fund In Crore Taka

2014 2015 2016 2017 2018

1340.67 1377.301468.99

1563.461686.73

22

CLAIM PAID IN CRORE TAKA

Year2014 2015 2016 2017 2018

212.31

305.69260.57 271.73 259.91

ASSETS IN CRORE TAKA

Year

2000.00

2014 2015 2016 2017 2018

1500.00

1000.00

500.00

0.00

1470.30 1517.94 1592.16 1697.981838.55

23

2014 2015 2016 2017 2018

2014 2015 2016 2017 2018

90.60

57.00 55.70

77.90

DSE Share Value In Line

CSE Share Value In Line

in Taka

0

40

20

80

60

120

100

160

140

200

180

88.30

57.40 55.40

78.00

59.59

58.59

in Taka

0

40

20

80

60

120

100

160

140

200

180

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Profile of Directors(Condition 1.5 (XXII) of Notification of BSEC dated August 7, 2012)

Nizam Uddin AhmedChairmanHe comes of a renowned Muslim family. He obtained Master & Degree in Journalism and obtained LLB Degree from Dhaka University in 1971. He is the founder Chairman of Nizam Hasina Welfare Foundation and also the Chairman of Karnaphuli Insurance Co. Ltd., a leading non life Insurance Company in the country. Mr. Nizam Uddin Ahmed through his visionary thinking, dedication and skill engaged himself in many Socio-Cultural activities and established many charitable organizations in Bhola as well as in the capital. He was the Member of Federation of Bangladesh Chamber of Commerce

and Industry and also Bangladesh Chamber of Industries. He travelled many countries viz. USA, UK, Canada, Saudi Arabia, Malaysia, Thailand, Japan, Singapore, Taiwan, Korea, Indonesia, Australia, and India for the purpose of business. He is a simple living & high thinking man. He maintains ethics in business and hold up honesty, sincerity and high values.

Hasina NizamVice ChairmanShe comes of a respectable Muslim family of Barisal. She is a graduate in Political Science from Eden College, Dhaka. She is involved with various Social works and Welfare organizations. She is also the Director of Karnaphuli Insurance Co. Ltd. a leading General Insurance Company in the country and Vice-Chairman of Nizam Hasina Welfare Foundation.

Nasir Uddin AhmedDirectorMr. Nasir Uddin Ahmed was born in October, 1975 in a respectable Muslim family. He obtained his BBA Degree from North South University in 1999. A visionary entrepreneur Mr. Nasir Uddin Ahmed is also the Vice-Chairman of Karnaphuli Insurance Co. Ltd. & Director Nizam Hasina Welfare Foundation. He is an Executive Member of Bangladesh Insurance Association (BIA). He attended various Training, seminars, & Conferences in Bangladesh as well as in the foreign countries like U.K., USA, Australia, E-U Countries, Hong Kong, Malaysia, Thailand, Japan, Indonesia, Taiwan, Singapore etc. and

thus enriched his knowledge what he optimized best at the fields he is involved with.

27

Nizam-Hasina Foundation HospitalDirectorNizam-Hasina Foundation Hospital started its operation on 1st April 2012 with the approval obtained from the Directorate General of Health Services, Govt. of the People’s Republic of Bangladesh. It has been established with a view to render eye treatment to the poor and destitute people of the island of Bhola. It aims at serving the suffering humanity. Apart from treating eye aliment the hospital also takes care of outdoor patients every day.

Karnaphuli Insurance Company LimitedDirectorKarnaphuli Insurance Company Limited was incorporated on 23rd November 1986 as a public limited company under the companies Act 1913, obtained the certificate of Registration for carrying on general Insurance Business from Controller of Capital Issues on 23rd November, 1986 being sponsored by a group of renowned business personalities, reputed industrialists and Journalist of the country. The Company started its commercial operation on 25th November, 1986 with a paid up capital of Tk. 30.00 million against Authorised Capital of Tk. 300.00 million. Presently Authorised Capital and paid up capital of the company have been raised up to Tk.600.00 Million and Tk. 407.04 Million respectively.Karnaphuli Insurance Company Limited is a first generation and top-tier non-life insurance company. The Company has been maintaining strong capital base, ethical business standards, corporate culture and corporate governance, superior underwriting skills and dynamic investment management since its inception.Nominated Director Mr. ANM Fazlul Karim Munshi, has joined Karnaphuli Insurance Company Limited as its Chief Executive Officer (CEO) recently. Prior to the assignment, he was the additional managing director and Head of marketing of the company.Mr. ANM Fazlul Karim Munshi joined Karnaphuli Insurance Co Ltd. in 1987 and served in different capacities for the last 30 years. He completed his BSS (Hons) and MSS in Economies from Dhaka University. He is the life member of Bangladesh Economic Association (BEA) and Bangladesh Young Economist Association (BYEA).


Riaz Uddin AhmedDirectorMr. Riaz Uddin Ahmed, a sponsor Director of Meghna Life Insurance Co. Ltd., comes from a well-educated and Industrialist family. He obtained his BBA degree from Sunway College, a renowned educational Institute of Kualalampur, Malaysia with distinction.A well experienced entrepreneur Mr. Riaz Uddin Ahmed believes in innovation and creativity, As such he also took part in Karnaphuli Insurance Co. Ltd. a leading General Insurance Company of the country as its sponsor Director. A very capable insurance personality Mr. Ahmed attended many Seminars, Symposium, Conferences and

Summit in Bangladesh and abroad. His knowledge driven suggestion and guidance in the capacity of a Director of both Karnaphuli Insurance Co. Ltd. and Meghna Life Insurance Co. Ltd. rose to a reasonable height.A valiant social worker Mr. Riaz Uddin Ahmed visited India, Thailand, Singapore, Malaysia, Australia and Kingdom of Saudi Arabia.

28

Sharmin NasirDirectorMrs. Sharmin Nasir was born in a renowned Muslim family in 1983. She obtained the Bachelor Degree in Social Welfare from Govt. Girls College, Barisal in 2004. With keen interest she invested in Meghna Life Insurance Co. Ltd. and Karnaphuli Insurance Co. Ltd. and became a member of Board of Directors of Meghna Life Insurance Co. Ltd. as well as the Director of Karnaphuli Insurance Co. Ltd. from Group-B. She travelled many countries for business purpose.

She is also involved with many Socio-Cultural activities and Welfare Organizations.


Dilruba SharminDirectorA well-educated entrepreneur Mrs. Dilruba Sharmin was a meritorious student of Viqarunnessa Noon School and College. She is the daughter of a Banker and wife of an Industrialist. Mrs. Dilruba Sharmin takes keen interest in business, especially in Insurance business. As such she invested in Karnaphuli Insurance Company Limited and became a member of the Board of Directors of Karnaphuli Insurance Company Limited. She was duly elected as a Director of Meghna Life Insurance Company Limited from group-B. She traveled Singapore and Malaysia. She takes interest in serving the humanity.

29

Jannatul FardousDirectorMrs. Jannatul Fardous was born in 1984 in a respectable muslim family. Mrs. Jannatul Fardous married Mr. Hasan Ahmed who is a renowned business elite in Dhaka city. She took part in many social activities including employment of poor people in her locality and involved in serving the distress people. She is a lady with most pleasant personality and also involved in various development & social activities of the society for improvement of socio-economic condition of the Common people.

Profile of Directors

Profile of Independent Directors(Condition 1.5 (XXII) of Notification of BSEC dated August 7, 2012)

(Condition 1.5 (XXII) of Notification of BSEC dated August 7, 2012)

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Prof. Md. Mazharul IslamDirector

Prof. Md. Mazharul Islam was born in 1965 in a respectable muslim family of Bhola. He is a highly qualified man and completed his MA in 1991 from Dhaka University. He is experienced in education line and working as Principal Incharge of 'Illisha Islamia Model College' Bhola. He is a local elite personality and respected by all and involved in social activities locally for promotion of life style of the poor/distressed people. He was the elected general secretary of district Shilpokola Academy & at present treasurer of executive committee Bhola District Rover Scout.

Umme Khadija MeghnaDirector

Umme Khadija Meghna was born in a family of Entrepreneurs. She is a young lady with amiable disposition. She is promising and ambitious. She has keen interest in business affairs and is planning to build up a career accordingly. She traveled many countries.

Md. Yousuf Ali HowladerIndependent Director

Mr. Md. Yousuf ali Hawlader was born on 1st February 1945 in a respectable muslim family in Jhalakathi district. He is a commerce graduate & obtained M.Com (Management) degree from Dhaka University. He is a renowned Banker and obtained Banking Diploma (DAIBB). He became General Manager of Sonali Bank and Managing Director of Agrani Bank. He was also the MD of BSRS & Al-Arafa Islami Bank Ltd. He worked as Director ICB, Advisor BGMEA and Chairman Bangladesh Commerce Bank Ltd. He attended many Seminar/symposium at home and abroad. He visited Canada, UK. Pakistan and many others countries.

Md. Nurul Islam MiahIndependent Director

Md. Nurul Islam Miah was born on May 1950 in a respectable Muslim family in the district of Shariatpur. He is a highly qualified person having vast experience in Banking and finance. Mr. Islam is a renowned Banker with long experience in operational Banking and was also related with the Training Academy of Rupali Bank Ltd. He is associated with many social and voluntary organization. He attended many seminars and symposiums relating in finance & banking.

Mr. Mohammad Ahsan Ibne KabirIndependent Director

Mr. Mohammad Ahsan Ibne Kabir was born in of Barishal. He obtained BBA (Major in Markeing) and MBA degree with excellent result from Dhaka University. He possesses a pleasant personality. He is a young entrepreneur & associated with socio-cultural activities.

Profile of Independent Directors(Condition 1.5 (XXII) of Notification of BSEC dated August 7, 2012)

31

32

Nizam Uddin AhmedChairman

Chairman's MessageDear Shareholders,Assalamu Alaikum,I take the privilege to convey my heartfelt felicitation to you all on behalf of the Board of Directors and on my own behalf for attending the 23rd Annual General Meeting of the Meghna Life Insurance Company Limited. I do now present before you the Annual Report on the overall performance of the Company together with the Audited Accounts and Financial Statements for the year ended 31st December 2018 and Auditor's Report thereon. You know the scenario of insurance industry at present prevailing. We are facing unhealthy competitions and the circumstances are quite adverse and unfavorable. Even amidst such odd situations Meghna Life is trying to steer in right direction. In our Endeavour we got guidance from respected members of the Board, support of the patrons and the most contribution made by the management team as well as our field force. We are confident that we shall be able to overcome all hurdles by virtue of our hard labour, dedication and sincerity. We are committed to our honorable policyholders and shareholders in particular. We shall try to maintain the same trend of our effort to achieve our targeted goal. I sincerely hope and expect that our shareholders will keenly feel the reality and extend their co-operation to run our business smoothly in the days to come.In order to expand network of Meghna Life as well as to bring greater number of people under insurance coverage the Company sold policies under Ekok, Loko & Islami Bima (Takaful) Division all over the Country. For the purpose of reducing management hassle and minimising cost, the number of Divisions has been reduced to 3 (three) in place of 5 (five). The two Divisions viz., Islami Khudra Bima and Swanirvor Bima have been merged into Islami Bima (Takaful) and Ekok Bima Divisions respectively. All steps have been carefully taken to provide service to policyholders as usual who took policies of Islami Khudra Bima (Takaful) and Swanirvor Bima. No other change took place. It is assured that we always keep sharp eyes to protect interest of policyholders which is considered our prime duties and obligations.In conformity with the continuous success, the company declares yearly policy bonus. The bonus is paid at maturity or death which is earlier. In 2018, premium income of the Company stands at Tk. 432.91 crore. Since inception total premium income stood at Tk. 4,913.80 crore. Life fund increased to Taka 1,686.73 crore as on 31st December 2018. Meghna Life so far paid Tk. 66.96 crore as death claims, Tk. 903.82 crore as Survival Benefit, Tk. 667.15 crore as Maturity claims and Tk. 318.48 crore as Bonus to the policyholders. Presently a huge number of marketing personnel's and 1385 officials in Administration are engaged in Meghna Life Insurance Co. Ltd. to serve a huge number of honouable policyholders. Total asset of the Company stands at Tk.1,838.55 crore. About Tk. 1,381.87 crore have been invested in Government Securities and other approved Agencies/Sectors. If this trend of the premium income is continued, Life Fund by end of 2019 may stand at Tk. 1,800 crore (hypothetically).In our present competitive and dynamic environment it has become essential for organization to build and sustain competencies. Dynamic and growth oriented Company should recognise training as an important aspect. Training is a continuous learning process in human development. IDRA took initiative to impart training to Development officers of insurance sector in order to increase professional efficiency. We appreciate the effort. We believe training is a process through which a person enhances and develops his efficiency, capacity and effectiveness at work by improving and updating his knowledge and understanding the skills relevant to his or her job. During the year 2018 a substantial number of employees took professional training in various Training Academy, Centres and Institutes. Besides, our Public Relations Department publishes booklets, magazines, newsletters etc. on regular basis in order to educate our employees. Our prime purpose is to run the Company by people with sound professional knowledge and skills so that we may become market leader in due course.It is needless to say that an insurance company basically belongs to the policyholders. So it is the prime duty of the Board to protect the interest of the policyholders so that they feel interested to buy insurance policy. Evil design should by all means be combated so that policyholders are not cheated. Utmost effort should also be given as to abide by the rules and regulations of the Regulators so that the image of the insurance industry is upheld. We will keep it in mind that the goodwill of a company is the capital of the company. So, under no circumstance the image of the company shall be jeopardised. I trust and believe that our work-force will have no stone unturned to render highest service to the existing policyholders as well as to prospective clients.I have the privilege to inform you that the Board of Directors in a meeting held on 22-07-2019 recommended for declaration of 20% cash dividend to the Shareholders for the year 2018. I express my gratitude to Ministry of Finance, IDRA, BSEC, DSE, CSE, CDBL, Bangladesh Bank for their co-operation and support. We are ceaselessly trying to increase payment of dividend on investment of the Shareholders in future. By the grace of Almighty Allah we hope, in future, we will be in a position to reach the goal of success under the strict supervision of the new Insurance Laws to keep us fully equipped with the economic growth of the country. Thank you all for your continuous support and co-operation.

Allah Hafez,

(Nizam Uddin Ahmed)Chairman

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34

Chief Executive Officer's ReportMeghna Life Insurance Company Limited was established in 1996 and gradually it became one of the largest insurance company in the life sector. The company has been operating its business activities abiding by the guidelines of Insurance Development and Regulatory Authority (IDRA), Bangladesh Securities and Exchange Commission (BSEC), Stock Exchanges. The Company has a wide network all over the country. The administrative and development work-force are engaged for earning premium and management of entire activities so as to achieve the overall target of the Company.

The Company could earn premium to the tune of Tk. 432.91 in 2018.

The business growth of the Company for the last few years has been significant compared to other competitors. Up to 2018 the company made a steady and satisfactory growth both in earning of premium and income from investment which played a vital role to run the Company comfortably. We had to make tremendous effort for maintaining our continuous growth in respect of business, operational cost, investment, profit and to administer and train up Development people to cope with the hard and fast rule of IDRA. In spite of all the odd situations, we have been able to overcome the hurdles and could show a satisfactory performance during 2018. I extend my thanks to our Development personnel for their dedication, hard work for the achievement during 2018.

35

N.C. RudraChief Executive Officer

Mention may be made that the Insurance sector faced a new challenge in 2018 for implementation, compliance of IDRA guidelines and regulations though the rules were framed for betterment and good governance of the insurance industry as a whole. We express our sincere thanks to IDRA for their cooperation for operating our activities. It is worthwhile to state that Meghna Life Insurance Company is keen and very much particular to fulfill the regulatory requirements as well as to abide by the instructions of Regularity Authorities for the sake of good governance. It is expected that the Company will obtain benefits out of such compliances. In the field of investment as is required under rule, the Company maintained its tradition without any violation. The management of the Company gives priority to fulfill the statutory and regulatory requirements without fail for which we feel proud.

Since 2006 our Company's share are being traded in both the Stock Exchanges of the country. As at 31 December 2018, the market price of Company's share stood respectively at Tk. 77.90 in DSE and Tk 78.00 in CSE.

It is to be noted that the Company has planned to maintain Central Data Base in the Head Office for the safety of the data of the policyholders. Apart from this the Company established 10 Nos. Composite Service Centers in Divisional Cities and places of business importance in order to ensure proper and prompt service to the policyholders. Meghna Life Insurance Company being a service organisation considers the Human Resources as an effective tool for its development. The company pays due recognition to the employees for their contribution. Merit, seniority, managerial efficiency and sense of responsibility are given priority in promotion and to allow any benefit to employees. The Company also gives highest importance to training for the development of human resources. As part of human resources development programs, Meghna Life Insurance Company endeavored to develop the skill, knowledge, attitude and professional competence of its manpower by arranging various local training. During 2018, many officers participated in local training programs on different subjects/courses and about 500 employees received inservice training.

Finally, I take the privilege of extending my thanks to the valued policyholders, patrons and well-wishers for the trust, confidence and continuous support to the company. I also extend my thanks to the IDRA, BSEC, DSE, CSE, CDBL and Bankers for their co-operation and support for smooth functioning of the Company. I also convey my regards and gratefulness to the Chairman and Directors of the Board who provided generous cooperation to me which helped me to run the day to day activities smoothly and effectively. I am also pleased to put my appreciation for the commitment and dedication of the management team and all category of employees.

(N.C. Rudra)Chief Executive Officer

36

Report of the Audit Committee

The Audit Committee of Meghna Life Insurance Company Limited comprises of our Directors nominated by the Board of Directors and it operates according to the Terms of Reference approved by the Board and in compliance with the Bangladesh Securities and Exchange Commission Notification No. BSEC/CMRRCD/2006/158/207/Admin/80 dated: 3rd June 2018.

The Committee ensures that a sound financial reporting system is well managed, providing accurate, appropriate and timely information to the Board of Directors, management, regulatory bodies, shareholders and other interested parties.

The Audit Committee meetings were held to carry out the following tasks:

(a) Oversee the financial reporting process;(b) monitor choice of accounting policies and principles;(c) monitor Internal Audit and Compliance process to ensure that it is adequately resourced, • including

approval of the Internal Audit and Compliance Plan and review of the Internal Audit and Compliance Report;

(d) oversee hiring and performance of external auditors;(e) hold meeting with the external or statutory auditors for review of the annual financial statements before

submission to the Board for approval or adoption;(f) review along with the management, the annual financial statements before submission to the Board for

approval;(g) review along with the management, the quarterly and half yearly financial statements before

submission to the board for approval;(h) review the adequacy of internal audit function;(i) review the Management's Discussion and Analysis before disclosing in the Annual Report; (j) review statement of all related party transactions submitted by the management; (k) review Management Letters or Letter of Internal Control weakness issued by statutory auditors;(l) oversee the determination of audit fees based on scope and magnitude, level of expertise deployed

and time required for effective audit and evaluate the performance of external auditors.

Dated: Dhaka, July 22, 2019

(Md. Yousuf Ali Hawlader)Chairman, Audit Committee

37

38

Name of the Company (Megha Life Insurance Co. Ltd.)Declaration by CEO and CFO

Date: 22-07-2019

The Board of DirectorsMeghna Life Insurance Co. Ltd.Head Office: Biman Bhaban100, Motijheel C/A, Dhaka-1000.

Annexure-A[As per condition No. 1(5)(xxvi)]

Dear Sirs,

Subject: Declaration on Financial Statement for the year ended on 31st December 2018.

In this regards, we also certify that:-

(N.C. Rudra) Mohammad Tarek FCA.Chief Executive Officer (CEO) Chief Financial Officer (CFO)

Sincerely yours,

Pursuant to the condition No. 1(5)(xxvi) imposed vide the Commission’s Notification No. BSEC/CMRRCD/2006/158/207/Admin/80: Dated 3rd June 2018 under section 2CC of the Securities and Exchange Ordinance, 1969, we do hereby declare that:

The Financial Statements of Meghna Life Insurance Co. Ltd. for the year ended on 31-12-2018 have been prepared in compliance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in the Bangladesh and any departure there from has been adequately disclosed;

The estimates and judgments related to the financial statements were made on a prudent and reasonable basis, in order for the financial statements to reveal a true and fair view;

The from and substance of transactions and the Company’s state of affairs have been reasonably and fairly presented in its financial statements;

To ensure above, the Company has taken proper and adequate care in installing a system of internal control and maintenance of accounting records;

Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures of the Company were consistently followed; and

The management's use of the going concern basis of accounting in preparing the financial statements is appropriate and there exists no material uncertainty related to events or conditions the may cast significant doubt on the Company's ability to continue as a going

(1)

We have reviewed the financial statements for the year ended on 31-12-2018 and that to the best of our knowledge and belief:

(i)

There are, to the best of knowledge and belief, no transactions entered into bye the Company during the year which are fraudulent, illegal or in violation of the code of conduct for the company’s Board of Directors or its members.

(ii)

these statements do not contain any materially untrue statement or omit any material fact or contain statemtns that might be misleading;

(a)

these statements collectively present true and fair view of the Company’s affais and are in compliance with existing accounting standards and applicable laws:

(b)

(2)

(3)

(4)

(5)

(6)

We have examined the compliance status to the Corporate Governance Code by Meghna Life Insurance Company Limited for the year ended on December 31, 2018. This Code relates to the Notification No. BSEC/CMRRCD/2006-158/207/Admin/80, dated June 03, 2018 of the Bangladesh Securities & Exchange Commission.

Such compliance with the Corporate Governance Code is the responsibility of the company. Our examination was limited to the procedures and implementation thereof as adopted by the Management in ensuring compliance to the conditions of the Corporate Governance Code.

This is a scrutiny and verification and an independent audit on compliance of the conditions of the Corporate Governance Code as well as the provisions of relevant Bangladesh Secretarial Standards (BSS) as adopted by Institute of Chartered Secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this Corporate Governance Code.

We state that we have obtained all the information and explanations, which we have required, after due scrutiny and verification thereof, we report that in our opinion:

The Company has complied with the conditions of the Corporate Governance Code as stipulated in the above mentioned Corporate Governance Code issued by the Commission;

REPORT TO THE SHAREHOLDERS OF MEGHNA LIFE INSURANCE COMPANY LIMITEDON COMPLIANCE ON THE CORPORATE GOVERANCE CODE

a)

The company has complied with the provisions of the relevant Bangladesh Secretarial Standards (BSS) as adopted by the Institute of Chartered Secretary of Bangladesh (ICSB) as required by this Code;

b)

Proper books and records have been kept by the company as required under the Companies Act, 1994, the Securities Laws and other relevant laws; and

c)

The Governance of the company is satisfactory. d)

Place: Dhaka Dated: September 09, 2019

39

Ramendra Nath Basak, FCAPartnerShiraz Khan Basak & Co.Chartered Accountants

SHIRAZ KHAN BASAK & CO. R. K. TOWER86, Bir Uttam C.R. Datta Road(312, Sonargaon Road). Dhaka-1205Tel :88-02-9635139,88-02-9673597Mobile:01552-638228, 01711-520770 01922-117370, 01757-941837E-mail:[email protected]

(Level-10)

C H A R T E R E D A C C O U N T A N T S

(An associate firm of D. N. Gupta & Associates)

Report on Corporate Governance

IntroductionMeghna Life Insurance Company Ltd is keen and committed to establish high standard of corporate governance. Corporate governance aims at ensuring participation, transparency, accountability and responsibility. The Board of Directors formulates objectives and strategic plans, goals and the management plays the role of executing those plans under the directives of different Regulatory Authorities.

Composition of BoardThe Board is comprised of 14 (Fourteen) Directors out of which 08 (Eight) are from 'A' Group and 03 (Three) are from 'B' Group (Shareholder). There are 3 (Three) Independent Directors. The Board of Directors is in full control of the company's affairs and is also accountable to the shareholders. Audit committee is constituted with Directors of the Board. But the Chairman of the Board is not a member of the Committee. The Board reviews strategic issues on a regular basis and exercises control over the performance of the Company.

Responsibilities of the BoardThe Board meets regularly depending upon the requirement for decision on specific issues. The Board has a schedule of matters reserved for decision including major expenditure, significant investment proposals and policy matters. In certain cases, specific responsibilities are delegated to Committees within the defined Terms of Reference (TOR). Senior Management Personnel are being invited to attend the Board meeting to present matters on the business under transaction by the Board. One third of the Directors must retire and seek re-appointment in every Annual General Meeting as per Articles of Association of the Company as well as Companies Act 1994. The Chairman of the Board is appointed from amongst the Directors.

Separate role of Chairman and Chief Executive Officer (CEO)In the Company, the role of Chairman and the CEO is separate and independent from each other. The CEO is responsible for the Executive management of the company's business activities. The Chairman has got no executive management function/responsibility, he just runs the Board and formulate policy guidelines and directives which are beneficial for the company as well as to protect the interest of policy holders & shareholders.

Audit CommitteeThe Audit Committee is constituted by the Board consisting of 3 (Three) members from The Board of Directors. One of the Independent Director is the Chairman of Audit Committee. Regular meetings are held as per requirement of the Regulatory Authorities. Different types of Audited and Unaudited accounts are placed before the committee which in turn recommend those to the Board for approval. Audit Committee follows the various guidelines, procedures, policies and directives of Regularly Authority to ensure better internal control. The Committee gives directives to follow in order to improve overall performance.

Relationship with shareholdersThe Company reports to its shareholders twice a year through Half-yearly (unaudited) report and detailed audited Annual Report. The Company also circulates Quarterly Accounts (unaudited) in 2 widely circulated national dailies & one online news paper for the information of the shareholders (as per the requirement of the regularity authority). Normally once a year the Board meets with the shareholder in the AGM. Various price sensitive information are also circulated in the newspapers for the information of the shareholder with a view to establish a bridge between the company and the shareholders.

40

Annexure -1

Board Meeting Attendance:During the year Board Meetings were held and attendance by each Directors are given below:

Sl. No. 1. Mr. Nizam Uddin Ahmed 7 2. Mrs. Hasina Nizam 7 3. Mr. Nasir Uddin Ahmed 7 4. Mr. Riaz Uddin Ahmed 7 5. Mrs. Jannatul Fardous 7 6. Karnaphuli Insurance Co. Ltd. 7 7. Nizam-Hasina Foundation Hospital 2 8. Umme Khadija Meghna 7 9. Mrs. Sharmin Nasir 7 10. Mrs. Dilruba Sharmin 7 11. Prof. Md. Mazharul Islam 5 12. Mr. Md. Yousuf Ali Howlader 7 13. Mr. Md. Nurul Islam Miah 2 14. Mr. Md. Ahsan Ibne Kabir 2

Name of Directors Attendance

The pattern of share holding as at December 31, 2018i) Parent/Subsidiary/Associated companies and other related Parties :Nil

Shareholding of Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses & minor children:Nil

ii) Shareholding of Directors:

Sl. No. 1. Mr. Nizam Uddin Ahmed Chairman 8,31,327 2. Mrs. Hasina Nizam Vice Chairman 6,70,630 3. Mr. Nasir Uddin Ahmed Director 13,79,599 4. Mr. Riaz Uddin Ahmed Director 6,76,714 5. Mrs. Jannatul Fardous Director 6,70,941 6. Karnphuli Insurance Company Limited Director 6,72,347 7. Umme Khadija Meghna Director 50,715 8. Nizam-Hasina Foundation Hospital Director 7,04,050 9. Mrs. Sharmin Nasir Director 1,76,520 10. Mrs. Dilruba Sharmin Director 87,119 11. Professor Md. Mazharul Islam Director 5,825 Independent Director 12. Mr. Md. Yousuf Ali Howlader Director - 13. Mr. Md. Nurul Islam Miah Director - 14 Mr. Md. Ahsan Ibne Kabir Director -

Name Position No. of shares

iii) Shareholding of Executives :Niliv) Shareholders holding 10% or more voting interest in the company :Nil

Annexure -1

41

STATUS OF COMPALIANCE OF CORPORATE GOVERNANCEFor the year ended 31st December 2018

Status of compliance with conditions imposed by the Bangladesh Securities and Exchange Commission:

(Report under Condition No. 7.00)

ConditionNo.

Title Remarks( If any)

Board's SizeThe number of Board Directors should not be less than 5 (five) and more than 20(twenty).

At least one fifth (1/5) of the total number of directors in the company's board shall be independent directors.

Board of Directors

Status of compliance for the year ended 31st December 2018 with conditions imposed by the commission's Notification No. BSEC/CMRRCD/2006-158/207/Admin/80 dated June 03, 2018 issued under section 2CC of the Bangladesh Securities and Exchange Ordinance, 1969 is presented below:

1

Independent Directors1.(2)

1.(1)

(a)

Compliance Status(Put in the appropriate column)Complied Not Complied

14 (Forteen) Board member including 3 (three) independent Directors

There are three independent Directors in the Board

Who either does not hold any share or holds less than 1% shares to the total paid-up shares of the company;

(b) (i)

Who is not a sponsor of the company and is not connected with the companies any sponsor or director or nominee director or shareholder of the company or any of its associates, sister concerns, subsidiaries and parents or holding Entities who holds one percent (1%) or more share of the total paid-up shares of the company on the basis of family relationship. His/her family members also should not hold above mentioned shares in the company.

(b) (ii)

Who has not been an executive of the company in immediately preceding 2(two) financial years.

(b) (iii)

Who does not have any other relationship whether pecuniary or otherwise, with the company or its subsidiary/ associated companies.

(b) (iv)

Who is not a member or TREC (Trading Right Entitlement Certificate) holder, director or officer of ant stock exchange;

(b) (v)

Annexure -2

42

Who is not a shareholder, director excepting independent director or officer of any member or TREC holder of stock exchange or an intermediary of the capital market;

(b) (vi)

Who is not a partner or an executive or was not a partner or an executive during the preceding 3(three) years of the concerned company's statutory audit firm or audit firm engaged in internal audit services or audit firm conducting special audit or professional certifying compliance of this Code.

(b) (vii)

Qualification of Independent Director (ID)1.(3)

43

ConditionNo.



Who shall not be an independent director in more than 5(five) listed companies.

(b) (viii)

Who has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan or any advance to a bank or a Non-Bank Financial Institution (NBFI).

(b) (ix)

Who has not been convicted for a criminal offence involving moral turpitude;

(b) (x)

The independent director(s) shall be appointed by the board of directors and approved by the shareholders in the Annual General Meeting (AGM).

(c)

The post of independent director(s) cannot remain vacant for more than 90 (ninety) days.

(d)

The tenure of office of an independent director shall be for a period of 3 (three) years, which may be extended for 1 (one) term only.

(e)

Independent Director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial, regulatory and corporate laws and can make meaningful contribution to business.

(a)

Independent director shall have following qualifications:

(b)

Business Leader who is or was a promoter or director of an unlisted company having minimum paid-up capital of Tk. 100.00 million or any listed company or a member of any national or international chamber of commerce or business association; or

(b) (i)

Corporate leader who is or was a top level executive not lower than Chief Executive Officer or managing Director or Deputy Managing Director or Chief Financial Officer or Head of Finance or Accounts or Company Secretary or Head of Internal Audit and Compliance or Head of Legal Service or a Candidate with equivalent position of an unlisted company having minimum paid up capital of Tk. 100.00 million or of a listed company; or

(b) (ii)

Former official of government or statutory or autonomous or regulatory body in the position not below 5th Grade of the national pay scale, who has a least educational background of bachelor degree in economics or commerce or business or law; or

(b) (iii)

University Teacher who has educational background in Economics or Commerce or Business Studies or Law; or

None

None

None(b) (iv)

44

ConditionNo.


The positions of the Chairman of the Board and the Managing Director (MD) and / or the Chief Executive Officer of the companies shall be filled by different individuals.

Chairman of the Board and Chief Executive Officer1.(4)

The Directors' Report to shareholders1.(5)

(a)

Professional who is or was an advocate practicing at least in the High court Division of Bangladesh supreme court or a chartered Accountant or cost and Management Accountant or chartered Financial Analyst or chartered certified Accountant or certified public Accountant or chartered management Accountant or chartered Secretary or equivalent Qualification;

(b) (v)

The independent director shall have at least 10(ten) years of experiences in any field mentioned in clause (b)

(c)

In special cases the above qualifications may be relaxed subject to prior approval of the commission.

(d)


The positions of the Chairman of the Board and the Managing Director (MD) and / or the Chief Executive Officer of the companies shall be filled by different individuals.

(b)

The Chairperson of the Board shall be elected from among the non-executive director of the company;

(c)

The Board shall clearly define respective roles and responsibilities of the chairperson and the managing Director and/or Chief Executive Officer;

(d)

In the absence of the Chairperson of the Board, the remaining members may elect one of themselves from non-executive directors as Chairperson for that particular Board's meeting the reason of absence of the regular Chairperson shall be duly recorded in the minutes.

(e)

Industry outlook and possible future development in the industry.

(i)

Segment-wise or product-wise performance.(i)Risks and concerns.(iii)A discussion on cost of Goods sold, Gross profit margin and Net Profit margin.

(iv)

Discussion on continuity of any Extra-ordinary gain or loss.

(v)

None

None

None

Basis for related party transactions-a statement of all related party transactions should be disclosed in the annual report.

(vi)None

Utilization of proceeds from public issues, rights issues and/ or through any others instrument.

(vii) N/A

N/A

45

ConditionNo.


An explanation if the financial result deteriorate after the company goes for Initial Public Offering (IPO),Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc.

(viii)

If significant variance occurs between Quarterly Financial performance and Annual Financial Statements the management shall explain about the variance on their Annual Report.

(ix)


N/A

None

Remuneration to directors including independent directors.

(x)

Proper books of account of the issuer company have been maintained.

(xii)

The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

(xi)

None

None

Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment.

(xiii)

International Accounting Standards (IAS)/ Bangladesh Accounting Standards (BAS)/international Financial Reporting Standards (IFRS)/ Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there from has been adequately disclosed.

(xiv)

The system of internal control is sound in design and has been effectively implemented and monitored.

(xv)

A Statement that minority shareholders have been protected from abusive actions by, or in the interest of, controlling shareholders acting either directly or indirectly and have effective means of redress.

(xvi)

Significant deviations from the last year's operating results of the issuer company shall be highlighted and the reasons thereof should be explained.

(xviii)

Key operating and financial data of at least preceding 5(five) years shall be summarized.

(xix)

There are no significant doubts upon the issuer company's ability to continue as a going concern. If the issuer company is not considered to be a going concern, the fact along with reasons thereof should be disclosed.

(xvii)

N/Aif the issuer company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given.

(xx) Dividend has been recommended for the year ended 31 December 2018

46

ConditionNo.


The pattern of shareholdings and name wise details disclosing the aggregate number of shares:

(xxiii)

Appointment/Reappointment of Directors:(xxiv)

Compliance Status(Put in the appropriate column)

Not Complied

None

None

None

None

None

N/A

Board's statement to the effect that no bonus share or stock dividend has been or shall be declared as interim dividend

The number of Board meetings held during the year and attendance by each director shall be disclosed.

(xxi)

Parent/Subsidiary/ Associated Companies and other related parties (Name wise details).

(xxiii) (a)

Directors, Chief Executive Officer, Company Secretary, chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details).

(xxiii) (b)

Executives (top five salaried employees of the company, other than the Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer and Head of Internal Audit).

(xxiii) (c)

Shareholders holding ten percent (10%) or more Voting interest in the company (name wise details).

(xxiii) (d)

A brief resume of the director.(xxiv)(a)

Nature of his/her expertise in specific functional areas.

(xxiv (b)

Names of companies in which the person also holds the directorship and the membership of committees of the board.

(xxi) (c)

A management's Discussion and Analysis signed by CEO or MD Presenting detailed analysis of the company's position and operations along with a brief discussion of changes in the financial statements, among other, focusing on:

(xxv)

Accounting policies and estimation for preparation of financial statements;

(xxv) (a)

Changes in Accounting policies and estimation, if any, clearly describing the effect on financial performance or results and financial position as well as cash flows in absolute figure for such changes;

(xxv) (b)

Comparative analysis (including effects of inflation) of financial performance or results and financial position as well as cash flows for current financial year with immediate preceding five years explaining reasons thereof;

(xxv) (c)

No bonus share or stock dividend has been declared as interim dividend during the year 2018.

(xxii)

47

ConditionNo.


Governance of Board of Directors of Subsidiary Company

2.


compare such financial performance or results and financial position as well as cash flows with the peer industry scenario;

(xxv) (d)

briefly explain the financial and economic scenario of the country and the globe;

(xxv) (e)

risks and concerns issues related to the financial statements, explaining such risk and concerns mitigation plan of the company; and

(xxv)(f)

future plan or projection or forecast for company's operation, performance and financial position, with justification thereof, i.e., actual position shall be explained to the shareholders in the next AGM

(xxv) (g)

Declaration or certification by the CEO and the CFO to the Board as required under condition No. 3(3) shall be disclosed as per Annexure-A; and

(xxvi)

The report as well as certificate regarding compliance of conditions of this Code as required under condition No. 9 shall be disclosed as per Annexure-B and Annexure-C.

(xxvii)

The Board shall lay down a code of conduct, based on the recommendation of the Nomination and Remuneration Committee (NRC) at condition No. 6, for the Chairperson of the Board, other board members and Chief Executive Officer of the company;

(a)

The code of conduct as determined by the NRC shall be posted on the website of the company including, among others, prudent conduct and behavior; confidentiality; conflict of interest; compliance with laws, rules and regulations; prohibition of insider trading; relationship with environment, employees, customers and suppliers; and independency.

(b)

Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the composition of the board of Directors of the subsidiary company.

(a)

Meetings of the Board of Directors the company shall conduct its Board meetings and record the minutes of the meetings as well as keep required books and records in line with the provisions of the relevant Bangladesh Secretarial Standards (BSS) as adopted by the Institute of chartered secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this code.

1.(6)

Code of Conduct for the Chairperson, other Board members and Chief Executive officer:

1.(7)

48

ConditionNo.


Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit and Compliance (HIAC) and Company Secretary (CS):

3.

At least 1 (one) independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company.

(b)

The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company.

(c)


The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also.

(d)

The Audit Committee of the holding company shall also review the financial statements, in particular the investments made by the subsidiary company.

(e)

The Board shall appoint a Managing Director (MD) or Chief Executive Officer (CEO), a Company Secretary (CS), a Chief Financial Officer (CFO) and a Head of Internal Audit and Compliance (HIAC):

(a)Appointment:(e)

The positions of the Managing Director (MD) or Chief Executive Officer (CEO), Company Secretary (CS), Chief Financial Officer (CFO) and Head of Internal Audit and Compliance (HIAC) shall be filled by different individuals;

(b)

The MD or CEO, CS, CFO and HIAC of a listed company shall not hold any executive position in any other company at the same time;

(c)

The Board shall clearly define respective roles, responsibilities and duties of the CFO, the HIAC and the CS;

(d)

The MD or CEO, CS, CFO and HIAC shall not be removed from their position without approval of the Board as well as immediate dissemination to the commission and stock exchange(s).

(e)

Requirement to attend Board of Directors' Meetings: the MD or CEO, CS, CFO and HIAC of the company shall attend the meetings of the Board:

(2)

The MD or CEO and CFO shall certify to the Board that they have reviewed financial statements for the year and that to the best of their knowledge and belief:

(a)

Duties of Managing Director (MD) or Chief Executive Officer (CEO) and Chief Financial Officer (CFO):

(3)

49

ConditionNo.


4.

These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; and

(a) (i)

These statements together present a true and fair view of the company's affairs and are in compliance with existing accounting standards and applicable laws;

(a) (ii)


The MD or CEO and CFO shall also certify that there are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or in violation of the code of conduct for the company's board or its members:

(b)

The certification of the MD or CEO and CFO shall be disclosed in the Annual Report.

(c)

Audit Committee; and(i)

Responsibility to the Board of Directors(1)

Nomination and Remuneration Committee.(ii)

The company shall have an Audit Committee as a sub-committee of the Board of Directors.

(a)

The Audit Committee shall assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business.

(b)

Board of Director's committee: For ensuring good governance in the company, the Board shall have at least following subcommittees:

5. Audit Committee:

The Audit committee shall be responsible to the board of Directors. The duties of the Audit Committee shall be clearly set forth in writing.

(c)

The Audit Committee shall be composed of at least 3(three) members.

(a)

The Board shall appoint members of the Audit Committee who shall be non-executive directors of the company excepting chairperson of the Board and shall include at least 1 (one) independent director;

(b)

All members of the audit committee should be "financially literate" and at least 1 (one) member shall have accounting or related financial management background and 10(ten) years of such experience;

(c)

Constitution of the Audit Committee(2)

When the term of service of any Committee member expires or there is any circumstance causing any Committee member to be unable to hold office before expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed

(d)

50

ConditionNo.


number of 3 (three) persons, the Board shall appoint the new Committee member to fill up the vacancy immediately or not later than 1 (one) month from the date of vacancy in the Committee to ensure continuity of the performance of work of the Audit Committee;The company secretary shall act as the secretary of the Committee.

(e)

The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director.

(f)

The Board of Directors shall select 1 (one) member of the Audit Committee to be chairman of the Audit Committee, who shall be an independent director.

(a)

in the absence of the Chairperson of the Audit Committee, the remaining members may elect one of themselves as Chairperson for that particular meeting, in that case there shall be no problem of constituting a quorum as required under condition No. 5(4) (b) and the reason of absence of the regular Chairperson shall be duly recorded in the minutes.

(b)

The Audit Committee shall conduct at least its four meetings in a financial year: Provided that any emergency meeting in addition to regular meeting may be convened at the request of any one of the members of the committee;

(a)

The quorum of the meeting of the Audit Committee shall be constituted in presence of either two members or two third of the members of the Audit Committee, whichever is higher, where presence of an independent director is a must.

(b)

Oversee the financial reporting process.(a)

Chairman of the audit committee shall remain present in the Annual General meeting (AGM).

(c)


(3) Chairman of the Audit Committee:

Monitor choice of accounting policies and principles.

(b)

Monitor Internal control Risk management process.

(c)

Oversee hiring and performance of external auditors

(d)

hold meeting with the external or statutory auditors for review of the annual financial statements before submission to the Board for approval or adoption;

(e)

Review along with the management, the annual financial statements before submission to the board for approval.

(f)

(4) Meeting of the Audit committee:

(5) Role of Audit Committee:

51

ConditionNo.


Review along with the management, the quarterly and half yearly financial statements before submission to the board for approval.

(g)

Review the adequacy of internal audit function.(h)Review the management's Discussion and Analysis before disclosing in the Annual Report;

(i)

Review statement of significant related party transactions submitted by the management.

(j)

Review Management letters/Letter of Internal Control weakness issued by statutory auditors.

(k)

Oversee the determination of audit fees based on scope and magnitude, level of expertise deployed and time required for effective audit and evaluate the performance of external auditors; and

(l)

Oversee whether the proceeds raised through Initial public offering (IPO) or Repeat Public Offering (RPO) or Rights Share Offer have been utilized as per the purposes stated in relevant offer document or prospectus approved by the commission;

(m)


(6) Reporting of the Audit Committee (a) Reporting to the Board of Directors (i) The Audit Committee shall report on its activities

to the Board of Directors.(ii) The Audit Committee shall immediately report to the

Board of Directors on the following findings, if any:(ii)(a) Report on conflicts of interests.(ii)(b) Suspected or presumed fraud or irregularity or

material defect in the internal control system.(ii)(c) Suspected infringement of laws, including

securities related laws, rules and regulations.(ii)(d) Any other matter which shall be disclosed to the

Board of Directors immediately.(b) Reporting to the Authorities: If the Audit Committee

has reported to the Board of Directors about anything which has material impact on the financial condition and results of operation and has discussed with the Board of Directors and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignore, the Audit Committee shall report such finding to the Board of Directors for three times or completion of a period of 6(six) months from the date of first reporting to the Board of Directors, whichever is earlier.

(7) Reporting to the shareholders and General Investors: Report on activities carried out by the Audit Committee, including any report made to the Board of Directors under Condition 3.4.1 (ii) above during the year, shall be signed by the Chairman of the Audit Committee and disclosed in the annual report of the issuer company.

N/A

None

None

None

None

None

None

52

ConditionNo.



(a) The company shall have a Nomination and Remuneration Committee (NRC) as a subcommittee of the Board;

(b) The NRC shall assist the Board in formulation of the nomination criteria or policy for determining qualifications, positive attributes, experiences and independence of directors and to level executive as well as a policy for formal

(1) Responsibility to the Board of Directors

(2) Constitution of the NRC

(c) The Terms of Reference (TOR) of the NRC shall be clearly set forth in writing covering the areas stated at the condition No. 6(5) (b)

(a) The Committee shall comprise of at least three members including an independent director;

(b) All members of the Committee shall be non-executive directors;

(c) Members of the Committee shall be nominated and appointed by the Board;

(d) The Board shall have authority to remove and appoint any member of the Committee;

(e) In case of death, resignation, disqualification, or removal of any member of the committee or in any other cases of vacancies, the board shall fill the vacancy within 180(one hundred eighty) days of occurring such vacancy in the Committee;

(f) The Chairperson of the Committee may appoint or co-opt any external expert and/or member(s) of staff to the Committee as advisor who shall be non-voting member, if the Chairperson feels that advice or suggestion from such external expert and/or member(s) of staff shall be required or valuable for the Committee;

(6) Nomination and Remuneration Committee (NRC)

(g) The company secretary shall act as the secretary of the Committee;

(3) Chairperson of the NRC

(h) The quorum of the NRC meeting shall not constitute without attendance of at least an independent director;

(h) The Board shall select 1 (one) member of the NRC to be Chairperson of the Committee, who shall be an independent director;

(i) No member of the NRC shall receive, either directly or indirectly, any remuneration for any advisory or consultancy role or otherwise, other than Director's fees or honorarium from the company.

None

None

53

ConditionNo.



(a) The Board shall select 1 (one) member of the NRC to be Chairperson of the Committee, who shall be an independent director;

(a) The NRC shall conduct at least one meeting in a financial year;

(b) In the absence of the Chairperson of the NRC, the remaining members may elect one of themselves as Chairperson for that particular meeting, the reason of absence of the regular Chairperson shall be duly recorded in the minutes;

(c) The Chairperson of the NRC shall attend the annual general meeting (AGM) to answer the queries of the shareholders.

(4) Meeting of the NRC

(5) Role of the NRC

(b) The Chairperson of the NRC may convene any emergency meeting upon request by any member of the NRC;

(c) The quorum of the meeting of the NRC shall be constituted in presence of either two members or two third of the members of the Committee, whichever is higher, where presence of an independent director is must as required under condition No. 6(2)(h)

(d) The proceedings of each meeting of the NRC shall duly be recorded in the minutes and such minutes shall be confirmed in the next meeting of the NRC.

(a) NRC shall be independent and responsible or accountable to the Board and to the shareholders;

(a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate suitable directors to run the company successfully;

(b) NRC shall oversee, among others, the following matters and make report with recommendation to the Board:

(b) The relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(i) Formulating the criteria for determining qualifications, positive attributes and independence of a director and recommend a policy to the Board, relating to the remuneration of the directors, top level executive, considering the following:

(c) Remuneration to directors, top level executive involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate o the working of the company and its goals;

54

ConditionNo.



(ii)6 ( 5 ) (b)

Devising a policy on Board's diversity taking into consideration age, gender, experience, ethnicity, educational background and nationality;

(c)6.(5) The company shall disclose the nomination and remuneration policy and the evaluation criteria and activities of NRC during the year at a glance in its annual report.

(i) Appraisal or valuation services or fairness opinions.

(1) The issuer Company shall not engage its external or statutory auditors to perform the following services of the company, namely:

(iv) Formulating the criteria for evaluation of performance of independent directors and the Board;

(iii) identifying persons who are qualified to become directors and who may be appointed in op level executive position in accordance with the criteria laid down, and recommend their appointment and removal to the Board;

7. External/Statutory Auditors

(ii) Financial information systems design and implementation.

(iii) Book-keeping or other services related to the accounting records or financial statements.

(iv) Broker-dealer services.(v) Actuarial services.(vi) Internal audit services.(vii) Any other service that the Audit Committee

determines.(viii) Audit or certification services on compliance of

corporate governance as required under condition No. 9(n); and

(ix) Any other service that creates conflict of interest.(2) No partner or employees of the external audit

firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that company.

(3) Representative of external or statutory auditors shall remain present in the Shareholder's Meeting (Annual General Meeting or Extraordinary General Meeting) to answer the queries of the shareholders.

(v) Identifying the company's needs for employees at different levels and determine their selection, transfer or replacement and promotion criteria; and

(vi) Developing, recommending and reviewing annually the company's human resources and training policies;

55

ConditionNo.



(2) The professional who will provide the certificate on compliance of this corporate Governance code shall be appointed by the shareholders in the annual general meeting.

(3) The directors of the company shall state, in accordance with the Annexure attached, in the directors' report whether the company has complied with these conditions.

(2) The company shall keep the website functional from the date of listing.

(1) The company shall have an Official website linked with the website of the stock exchange.

8. Maintaining a website by the company.

9. Reporting and Compliance of Corporate Governance

(3) The company shall make available the detailed disclosures on its website as required under the listing regulations of the concerned stock exchange(s).

(1) The company shall obtain a certificate from a practicing professional Accountant/ Secretary (Chartered Accountant/ Costand Management Accountant/ Chartered Secretary) regarding compliance of conditions of corporate Governance Guidelines of the commission and shall send the same to the shareholders along with the Annual Report on a yearly basis.

Director’s Report

56

Bismillahir Rahmanir Rahim,

Dear Shareholders, Assalamu Alaikum,

On behalf of the Board of Directors and on my own behalf, I have the privilege to welcome you all to the 23rd Annual General Meeting of the Meghna Life Insurance Company Limited and present before you the Annual Report on the performance of the company together with the Audited Accounts and Financial Statements for the year ended 31st December, 2018 and the Auditors' Report thereon.

It is with much pleasure to bring to the notice of the honorable Shareholders that inspite of continued unstable economic condition prevailing in the country and tough competition among different insurers the year 2018 was another successful year of the company. This was possible because of the strength of our marketing forces, soundness of our organisational structure and our constant Endeavour to review our business strategies wherever necessary keeping in view of the quality of business, improved customer services and reduction of procreation cost in all spheres of business operation.

Business performance:

During the year the Company has earned gross premium income to the tune of Tk. 432.91 crore as against Tk. 428.61 crore in the previous year. The quantum of premium earning is comprised of the following:

(a) Tk. 256.37 crore of premium is earned from 45,023 Ekok Bima valued policies as against Tk. 248.36 crore in the previous year. Rate of increase is 3.22%.

(b) Tk. 83.26 crore of premium is earned from 22,838 Loko Bima (Micro) valued policies as against Tk. 87.22 crore in the previous year. Rate of decrease is 4.54%.

(c) Tk. 90.05 crore of premium is earned from 20,159 Islami Bima (Takaful) valued policies as against Tk. 89.98 crore in the previous year showing an increase of 0.07%.

(d) Tk. 3.23 crore of premium is earned from 52 Group Bima covering lives against Tk. 3.05 crore in the previous year. The rate of increase is 5.90%.

Industry outlook & future development:Insurance Industry in Bangladesh passed a century long history of evolution. But it is needless to say that it is trying hard to achieve its full potential. At present 32 Nos. life insurance companies including a state owned corporation (JBC) are operating business activities in a small market. People in general do believe that companies are not keen, cordial and careful in making payment of insurance claims in time. As a result prospective clients are hesitant to buy life policies which has a negative impact on growth of business. This negative attitude is an impediment to usual growth and plays a minimum contribution to GDP.

Bangladesh is a country of 160 million populations. These is an ample opportunity to flourish life insurance business in Bangladesh. It is believed that in order to do better business ethical standard shall have to be maintained so that people (prospective client) bank our us. Our field force should be trustworthy. Goodwill and image of the industry shall have to be upheld. Our regulatory IDRA is now monitoring our activities constantly for the sake of good governance of the sector. IDRA have taken many Initiatives for the betterment of life insurance sectors. They deserve opportunity.

Director’s ReportThe break-up of premium income into its components with corresponding figure of 2018 is given below: Particulars 2018 2017 Increase (Decrease) (In crore Taka) (In crore Taka) (%)First year premium:Ekok Bima 60.66 60.27 0.64%Loko Bima-Micro 20.99 20.00 4.95%Islami Bima (Takaful) 21.00 21.49 (2.28)% 102.65 101.76 0.87%Renewal premium: Ekok Bima 195.71 188.09 4.05%Loko Bima 62.27 67.22 (7.36)%Islami Bima (Takaful) 69.05 68.48 0.83% 327.03 323.79 1%Group Insurance premium 3.23 3.05 5.90%Total Gross premium 432.91 428.60 1.00%Reinsurance premium 1.45 1.18 22.88%Net premium 431.46 427.42 0.94%Investment Income 96.35 85.73 12.38%Other Income 1.60 9.71 (506.87)%Net Income 529.41 522.86 1.25%Life Fund 1,686.73 1563.46 7.88%Management Expenses:Commission 56.79 57.94 (1.98)%Other overhead 66.71 75.80 (11.99)%Total Tk. 123.50 133.74 (7.65)%Management Expenses as % of Gross premium 28.52 31.20 (8.85)%Life Fund:Life Fund of the Company has continued to grow significantly. The gross accretion of life fund in the year 2018 is Tk. 123.27 crore. Total Life Fund of the Company as at 31st December, 2018 stood at Tk.1,686.73 crores as against Tk. 1,563.46 crore in the preceding year. Growth rate of Life Fund is 7.88%.Actuarial Valuation:The Board of Directors of the Company decided to conduct Actuarial Valuation and accordingly the Actuarial Valuation of the assets & liabilities of the company as on December 31, 2018 is carried out. The valuation results have shown a g-ross surplus of Tk. 89.80 crore out of which Tk. 73.07 crore have been allocated for Bonus to Policyholders.Investment Portfolio:Investment portfolio of the Company other than Fixed Deposits with Banks has increased to Tk. 647.56 Crore from Tk. 630.83 Crore in the previous year, the percentage of increase stands at 2.65% over the previous year. Fixed Deposit with Banks has increased to Tk. 524.37 Crore from Tk. 473.01 Crore in 2018 showing an increase of 10.85%. Besides the balances on short Term Deposit Accounts with various Banks at the end of the year stands at Tk. 160.97 Crore which is under process for further investment. During the year the company has earned Tk. 96.35 Crore from Investment portfolio as against Tk. 85.73 Crore in the Previous year.Services to Policyholder: The reputation and progress of the company largely depend on prompt and efficient services rendered to the policyholders. MCICL has accomplished an agreement with Dhaka Bank Ltd. in respect of electronic found transfer (EFT) to ensure prompt, accurate & timely payment of claim to policyholder. Keeping this in view we have further strengthened our Servicing and IT Departments for rendering quick services to Policyholders and marketing personnel's.Internal Control System:In order to safeguard the interest of the company as well as the policy holders and shareholders, the Board and management have adopted necessary steps and insurance to make sure that the policies and plans are implemented in operating the business. The Officials works in the internal Audit Department keep sharp eye for ensuring the accuracy, reliability as well as the integrity of each financial transaction. The Board aims at upholding the quality in every field of operations so that the Company enjoys a long lasting goodwill. Bangladesh Economy:Bangladesh economy has maintained sustainable growth and attained GDP growth at 6.50% on average during the last decade according to Bangladesh Bureau of Statistics (BBS), The GDP growth stood at 7.48% in financial year 2017-18.

57

Directors' ReportGlobal Economy:The global prolongation has portrayed a steady picture Global growth for 2018 in estimated at 3.7% as in the october 2018 world Economic outlook woe forecast. The global economy is projected to grow at 3.5% in 2019.

Network with a few hundred offices in the rural as well as Urban Centres throughout the Country render all necessary services to the policyholders. During the year the management has decided to install computer in the outstation Zonal & Regional Offices gradually and by now activities of many Zonal Offices have already been computerised and data are transferred thoroughly ON-LINE technology.

The settlement of claims is a very important aspect of services to the policyholders. Hence the company has laid great emphasis on expeditious settlement of Maturity, survival as well as death claims. Recently the Company has decentralised the claims settlement operation through Zonal & Regional Offices for rendering prompt services to the policyholders. During the year the company has settled claims for Tk.259.91 Crore compared to claims for Tk. 271.73 Crore in the previous year.

IT Infrastructure and its Use:Information Technology and Communication system of MLICL is in advance stage. There is a full fledged Information Technology Department at Head Office with 24 IT professionals under the guidance of a Executive Director (Sr. System Analyst). The department is mainly responsible to provide all necessary automation services for day to day operation as well as to make all available information which are needed at each level of management for quick and timely dispensation of urgent and important issues. The entire work has been suitably divided into three Divisions on the basis of product lines. Presently all Divisions are working independently with stand-alone arrangements to computerize policy information of a zone for effective control and management of the respective product lines. At present, total 244 offices of five divisions all over the Country have been automated with computers. Moreover, all 244 offices are equipped with Wireless VPN Internet service to facilitate online data transfer and the plan is to provide this service to all other offices in near future. Ten (10) Composite service centres (CSC) in Dhaka, Comilla, Hazigonj, Barisal, Chittagong, Sylhet, Jessore, Bogra, Tangail, Rangpur have been setup with real-time fiber optics network connection. All services of Head office have been decentralised through these CSC. The Company has a contingency plan to face any breakdown situation at any place with the quickest possible time from the Head Office. A good number of in house development and on shelf software are in use. Data backup is taken on daily basis on tapes and stored at a safe place other than the Computer Center. A separate server is used as data backup to face any disaster.

Mobile SMS Program:There is a special opportunity through Mobile SMS for the policyholders arranged by MLIC for better service. With this message any policyholder can get the information about any identified policy easily. Similar SMS service is also arranged for all the field officers of the company to receive their up to date business figure.

Human Resources Management:Insurance industry is a place where services of experienced hand are absolutely necessary. MLICL is fully aware of this fact and from the beginning of its formation it tried to hire top and other executives from the insurance fields of the country with attractive compensation package. Apart from normal compensation package, MLICL has introduced shadow employee benefits like Festival Bonus, Incentive Bonus, gratuity, Contributory Provident Fund, Earned Leave, Sick Leave, Maternity Leave for Female Employees, Group Insurance, Housing loan, Motor Cycle Loan, Car Loan etc. In order to increase working efficiency, at different level of emplacement, MLICL organizes training for its employee on regular basis. MLICL organizes in house training from time to time for the field workers and others related with policy sales, underwriting, claim management, Re-insurance and practice of Takaful system. During the year 2018, about 500 officials attended in the training on various Insurance related subjects. The staff strength of the company at the end of 2018 was 1385 in the same period and many officials at different level were promoted.

Audit Committee of the Board:For ensuring transparency & accountability in the operations of the Company to ensure that the activities are conducted within the framework of principles and policies as laid down by the Board, as well as the guidelines of the Bangladesh Securities and Exchange Commission's Notification No.BSEC/CMRRCD/2006-158/207/ Admin/80, dated the 3rd June, 2018. The Audit Committee reviewed the financial statements of the company for the year ended 31.12.2018 audited by the External Auditors stressing on the importance of the Compliance culture within the company.

58

Nomination and Remuneration CommitteeIn accordance with BSEC notification dated 3 June, 2018 Nomination and Remuneration Committee as a subcommittee of the Board was formed with the following members of the Board of Directors.

1. Mohammad Ahsan Ibne Kabir as Chairman, 2. Mr. Nasir Uddin Ahmed & 3. Md. Moin Uddin (Nominee of Nizam-Hasina Foundation Hospital).

Dividend:The Board of Directors has recommended for declaration of 20% cash dividend for all the shareholders.

Directors:In accordance with Article 96 of the Articles of Association of the Company, 01 (One) director shall retire from office at the 23rd Annual General Meeting. The retiring Director are Being eligible they offer themselves for re-election.

Public Subscribers' Director:In accordance with the provision under Article 96 of the Articles of Association of the company and as provided under Insurance Act Dilruba Sharmin, Director shall retire from the office by rotation and being eligible offers herself for re-election.It is relevant to mention here that public notification in regard to election of Public Shareholder Director has been published in the two national dailies namely The Daily Kaler Kontha and Daily Financial Express on 26-07-2019.

Auditors:Pursuant to Section 210 of the Companies Act. 1994, the Company's Statutory auditors M/s. Wahab & Co., Chartered Accountants will retire at the 23rd Annual General Meeting.

It may be noted that M/s. Wahab & Co. Chartered Accountants express their wellingness to work as statutory auditors for 2019 of the company.

Business Plan for 2019:The company has set up its business strategy for boosting up of its Ordinary Life, Ekok Bima, Loko Bima and Islami Bima (Takaful) Division business and planned for achieving a premium target of Tk. 465 crore during the year, 2019. The management believes that this is achievable if the economic and political scenario of the country remain steady and that there occurs no natural calamity in the Country.

Construction of Meghna Life Insurance own Commercial building:The Construction work of highrise commercial building of the company at 11/B, 11/D, Toyenbee Circular Rd, Motijheel C/A, Dhaka-1000. is on progress. We expect that the construction work of the building will be completed within December 2019.

Acknowledgements:On behalf of the Board of Directors, I take this unique opportunity to thank all of our honorable shareholders, Directors, Members of Shariah council and Chief Executive Officer for their continued support and co-operation. I also express my sincere gratitude to our valued policyholders, the office of the Insurance Development and Regulatory Authority, Concerned Ministry, Registrar of Joint Stock Companies & Firms, Bangladesh Securities and Exchange Commission, Office of Dhaka, Chittagong Stock Exchanges Ltd. & Bangladesh Bank. Our Bankers and other esteemed well wishers for their co-operation, support and confidence.

We also put on record our deep appreciation of the efforts of the marketing personnel and devotion to duty of all categorie of employees of the Company.

On behalf of Board of Directors,

(Nizam Uddin Ahmed)Chairman

Directors' Report

59

60

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61

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63

Opinion:We have audited the accompanying consolidated financial statements of Meghna Life Insurance Company Limited and its subsidiary(Meghna Life Securities and Investment Limited) as well as the separate financial statements of Meghna Life Insurance Company Limited which comprise the Consolidated and separate Balance sheets as at 31 December 2018, and the Consolidated Revenue Account and separate Revenue Account, Consolidated and separate Statements of Changes in Shareholder's Equity and Consolidated and separate Cash Flows Statements for the year then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Meghna Life Insurance Company Limited and its subsidiary as at 31 December 2018, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994, the Insurance Act 2010, the Securities and Exchange Rules 1987 and other applicable laws and regulations.

Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report.

We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Gross general insurance premiums amount of Tk. 4,329,103,422 is comprise the net premiums amount of Tk. 4,314,596,661 is received for the whole period of cover provided by contracts entered into during the accounting period.

Given the important nature, connections to other items to the financial statements and sensitivity of the item we believe this area pose high level of risk.

With respect to Premium income in respect of various types of insurance we carried out the following procedures:

The design and operating effectiveness of key controls around premium income recognition

Carried out cut-off testing to ensure unearned premium income has not been included in the premium income.On a sample basis reviewed policy to ensure appropriate policy stamp was affixed to the contract and the same has been reflected in the premium register.

Carried out analytical procedures and recalculated premium income for the period.

64

A. Wahab & CoChartered Accountants

Key audit matterPremium Income

How our audit addressed the key matter

Ensured on a sample basis that the premium income was being deposited in the designated bank account.Tested on a sample basis to see that appropriate VAT was being collected and deposited to bank through Treasury Challan.For a sample of insurance contracts tested to see if appropriate level of reinsurance was done and whether that reinsurance premium was deducted from the gross premium.Applying specialist judgment ensured if there is any impairment of the reinsurer.

AUDITOR'S REPORTTO THE SHAREHOLDERS OF

MEGHNA LIFE INSURANCE COMPANY LIMITED

65


Key audit matterPremium Income

How our audit addressed the key matter

See note no 23.00 to the financial statementsValuation of life fund

Finally assessed the appropriateness and presentation of disclosures against relevant accounting standards, Insurance Act 1938 (as amended in 2010), Insurance Rules, 1958 and other applicable rules and regulations and regulatory guidelines.

We understood the governance process in place to determine the life fund, including testing the associated financial reporting control framework. We tested the design and operating effectiveness of controls over the accuracy and completeness of data used.We tested the key judgments and controls over the liability, including the preparation of the manually calculated components. We focused on the consistency in treatment and methodology period-on-period and with reference to recognized actuarial practice. We assessed the disclosures in the financial statements. As part of our consideration of the entire set of assumptions, we focused particularly on the Annuitant Mortality, Credit Default and Expense assumptions for the life fund given their significance to the Company's result and the level of judgment involved. These have been considered in greater detail below. Based on the work performed and the evidence obtained, we consider the assumptions used to be appropriate.We tested the design and operating effectiveness of key controls around monitoring, valuation and updating of prices of the positions held by the company from trusted sources. Additionally, we performed the following:Obtained year-end share holding positions from the company and through directional testing assessed the completeness of the report.Ascertained the valuation of the holding as per IFRS 13.

Valuation of life fund involves complex and subjective judgments about future events, both internal and external to the business, for which small changes in assumptions can result in material impacts to the valuation of these liabilities.

The work to address the valuation of life fund included the following procedures:

Recalculated unrealised gain or loss at the year end.

Carried out cut-off testing to ensure unrealised gain or loss was recognized in correct period.

Fair Value Change Account How our audit addressed the key matter

Obtained the CDBL report and share portfolio and cross checked against each other to confirm unrealised gain or loss.

Checked the subsequent position of this unrealised amount.

Insurance company makes a number of investments in the listed capital market with required regulatory permission. Income generated from the investments (realized gain and dividend received) is credited to the Profit & Loss Account. unrealised gain or loss if any is transferred to the Fair Value Change Account.This item has significant impact on the earnings performance of the company and return to the shareholders and might be prone to misreporting as large unreported fall in the value of any holding may wipe out the value of the portfolio and hamper the distribution capability of the company.

Other InformationManagement is responsible for the other information. The other information comprises all of the information in the Annual report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal ControlsManagement is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, the Companies Act 1994, the Insurance Act 2010, the Insurance Rules 1958, the Securities and Exchange Rules 1987 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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Fair Value Change Account How our audit addressed the key matter

See note no 23.00 to the financial statementsValuation of life fund

Finally assessed the appropriateness and presentation of disclosures against relevant accounting standards, The Companies Act 1994, Insurance Act 2010 and other applicable rules and regulations and regulatory guidelines.

At 31 December 2018, the company reported total balance under the head of Fair Value Change Account of BDT 64,280,502 (2017: BDT 6,961,285).

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Dated: Dhaka, 22 July, 2019

For A. WAHAB & CO.Chartered Accountants

Md. Showkat Hossain, FCAPartner

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

67


From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other Legal and Regulatory RequirementsIn accordance with the Companies Act 1994, the Insurance Act 2010, the Insurance Rules 1958, the Securities and Exchange Rules 1987 and relevant notifications issues by Bangladesh Securities and Exchange Commission, we also report that:

We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;

As per section 63(2) of the Insurance Act 2010, in our opinion to the best of our knowledge and belief an according to the information and explanation given to us, all expenses of management wherever incurred and whether incurred directly or indirectly, in respect of insurance business of the company transacted in Bangladesh during the year under report have been duly debited to the related Revenue Accounts of the Company;

In our opinion, proper books of accounts, records and other statutory books as required by law have been kept by the Company so far as it appeared from our examinations of those books;

The Company management has followed relevant provisions of laws and rules in managing the affairs of the Company and proper books of accounts, records and other statutory books have been properly maintained and (where applicable) proper returns adequate for the purposes of our audit have been received from branches not visited by us;

Balance Sheet, Revenue Account, related Revenue Accounts, Statement of Changes in Shareholder's and Cash Flows Statements of the Company together with the annexed notes dealt with by the report are in agreement with the books of account and returns; andThe expenditure was incurred for the purpose of the Company's business.

a)

b)

c)

d)

e)

f)


TOTAL TAKA = 18,385,539,184 16,979,775,530

DIRECTORDMD & CFO CHIEF EXECUTIVE OFFICER

CAPITAL & LIABILITIES Notes 31-12-2018 31-12-2017 Taka Taka SHARE CAPITAL : AUTHORISED 60,000,000 Ordinary shares of Tk. 10 each 4 600,000,000 600,000,000 ISSUED, SUBSCRIBED & PAID UP33,521,913 Ordinary Shares of Tk. 10 each 335,219,130 335,219,130Fully Paid Up BALANCE OF FUNDS AND ACCOUNTS 5 16,867,329,039 15,634,617,054Life Insurance Fund (Annexure-I) LIABILITIES AND PROVISIONS Estimated Liabilities in respect ofOutstanding claims whether due or intimated 6 263,923,449 178,406,210Amount due to other persons or bodies Carrying on Insurance Business. 7 6,191,773 2,805,593Sundry Creditors 8 911,652,263 826,984,343Premium Deposit 9 1,223,530 1,743,200

Balance Sheet as atMeghna Life Insurance

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The annexed Notes 1 to 33 from an integral part of these financial statements. These financial

Subject to our Separate report of even date.

CHAIRMANDIRECTOR

Property & Assets Notes 2018 2017 Taka Taka

LOANS: 10 91,186,128 35,857,905On mortgage of properties 10,129,087 11,066,487On Insurer's Policies within their Surrender Value 31,057,041 24,791,418On Meghna Life Securities & Investment Ltd. 50,000,000 - INVESTMENT : 11 6,475,564,183 6,308,274,381Statutory Deposit (BGTB) 15,000,000 15,000,000Bangladesh Govt. Treasury Bond 4,363,271,141 4,475,799,996Shares & Debentures 982,509,607 797,894,061House Property (At Cost Less Depreciation) 718,783,435 623,580,324Meghna Life Securities & Investment Ltd. 396,000,000 396,000,000 Agents Balance 200,163,650 231,198,413Outstanding Premium 12 1,801,741,073 1,858,252,457Interest, Dividend and Rents accrued but not due 13 403,245,149 308,955,977Advance, Deposit and Prepayments. 14 1,519,475,059 1,237,486,324Sundry Debtors 15 336,832,491 358,289,637 CASH AND BANK BALANCES 7,343,117,198 6,476,493,034Fixed Deposit with Banks 16 5,243,720,000 4,730,077,500Short Term Deposit 1,609,664,838 1,140,660,525Current Account 431,877,296 586,217,942Cash in Hand 57,855,064 19,537,067 Amount due from other persons or bodies Carrying on Insurance business 17 470,431 470,431Motor Cycle & Bi-Cycle Loan 18 4,114,441 4,457,234Stamps in Hand 10,236,505 5,875,957Printing & Stationary in Hand 9,392,826 9,614,562Fixed Assets (At Cost Less Depreciation) 19 190,000,050 144,549,218

31st December, 2018Company Limited

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TOTAL TAKA = 18,385,539,184 16,979,775,530

A. WAHAB & CO.CHARTERED ACCOUNTANTS

statements were approved by the Board of Directors on July 22, 2019 and were signed on its behalf by:

DIRECTORCHIEF EXECUTIVE OFFICERDated: Dhaka,22 July, 2019

EXPENDITURE Notes31-12-2018 31-12-2017 Claims under Policies (Including Provision for Claims due or intimated) Less-Reinsurance: 20 2,599,080,571 2,717,297,423 By Death 73,537,797 85,864,592 By Survival 1,092,488,962 994,650,099 By Maturity 832,595,892 1,078,417,203 By Surrenders 20,778,511 10,311,194 Bonus to Policy Holder 579,679,409 548,054,335 EXPENSES OF MANAGEMENT : 567,875,830 579,447,085(a) Commission to Insurance Agents (Less that on re-insurance Agents). 21 392,607,075 393,570,292(b) Allowances and Commission (Other than Commission included in Sub-item (a) above 175,268,755 185,876,793

Salaries etc.{Other than to Agents and those included in item (b) above} 408,827,402 439,878,856Gratuity 7,311,232 12,147,700Travelling and conveyance 9,270,958 11,284,867Directors Fees 692,000 416,250Auditors Fees 281,250 258,750Actuarial Fees 667,500 661,250Credit Rating Fees 214,000 - Medical Fees 2,357,465 2,263,381Registration Renewal Fee 7,156,342 17,133,731Advertisement & Publicity 2,666,129 6,454,624Printing & Stationary 16,700,669 18,785,769Policy Stamp Expenses 8,542,829 10,064,267Revenue Stamps 3,693,144 3,534,325Postage & Telegrams 4,417,865 4,258,973Telephone, Telex and Fax 8,980,675 10,563,379Electricity, Gas & Water Charges 9,095,229 10,691,156Entertainment 6,468,745 8,099,384Bank Charges 11,762,745 13,213,694Conference 612,101 656,296Development Expenses 8,816,979 8,679,233Prizes and Contest 9,026,120 20,718,276Repairs and Maintenance 18,173,091 19,852,948Fuel and Lubricants 18,651,217 23,780,562Subscription and Donation 876,000 2,266,363Rents for offices belonging to and occupied by the company 888,480 888,480Rents for other offices occupied by the company 75,421,312 80,759,721Rates & Taxes 1,994,735 4,357,161Legal and Professional Fees 371,004 1,279,852Insurance Expenses 1,253,848 1,654,100Newspaper and Periodicals 573,212 696,389Cleaning & Washing Charges 315,070 351,276Training Expenses 1,596,150 2,833,892A.G.M Expenses 2,520,785 1,050,045General Expenses 4,530,400 5,057,735Contribution to Employs PF. 12,016,483 12,972,723Employess Group Insurance Premium 363,671 427,568 667,106,837 757,992,976OTHER EXPENSES:Dividend 67,043,826 79,814,074Provision for Income Tax 61,607,305 93,054,919Income Tax - 20,000,000Bad Debts Written off 73,290 - Loss on Investment in Share 8,039,10 - Loss on Foreign Exchange 15,530 31,436Provision for Loss on fluctuation of share value 64,280,502 6,961,285Depreciation 22 26,311,674 29,261,536Balance of Fund at the end of the year as shown in the Balance Sheet 16,867,329,039 15,634,617,054 TOTAL TAKA = 20,928,763,512 19,918,477,788

Revenue Account For the yearMeghna Life Insurance

DMD & CFO

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The annexed Notes 1 to 33 from an integral part of these financial statements. These financial statements were approved

Taka Taka

DIRECTOR CHAIRMAN

Particulars Notes31-12-2018 31-12-2017INCOMEBalance of Fund at the Beginning of the Year 15,634,617,054 14,689,895,605

Premium Less-Reinsurance 23 4,314,596,661 4,274,232,163First year premium- (EB) 606,600,540 602,741,122First year premium- (LB) 209,900,680 200,007,083First year premium-(IB) 210,000,345 214,866,387 1,026,501,565 1,017,614,592 Renewal Premium- (EB) 1,957,100,325 1,880,854,532Renewal Premium- (LB) 622,700,470 672,207,285Renewal Premium- (IB) 690,500,522 684,846,495 3,270,301,317 3,237,908,312Group Insurance 32,300,540 30,528,576 4,329,103,422 4,286,051,480Less Re-Insurance Premium 14,506,761 11,819,317Interest, Rent & Dividend 24 963,544,819 857,259,214Profit on Sale of Shares - 25,613,611Profit on Sale of Redemption of Investment - 47,258,310Miscellaneous Receipts 137,226 63,831Alteration Assignment Late Fees 11,126,558 13,636,512Profit on Sale of other Assets - - Profit on Sale of Cars 4,741,194 6,360,604Profit Commission Earned - 4,157,938

First year premium, where the maximumPremium paying period is: Single 73,603,979Two years - Three years - Four years - Five years 1,043,280Six years 1,435,307Seven years 284,697Eight years 224,011Nine years 3,913,261Ten years 10,833,767Eleven years 16,479,897Twelve years & above 918,683,366 Total = 1,026,501,565

TOTAL TAKA = 20,928,763,512 19,918,477,788

ended December 31, 2018Company Limited


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by the Board of Directors on 22 July 2019 and were signed on its behalf by:

Taka Taka

Meghna Life Insurance Company LimitedStatement of Changes in Shareholder's Equity

For the year ended December 31, 2018

For the year ended 31st December 2017

Particulars Share Capital Share GeneralRetained Other Total PremiumReserve Earning Reserve

Balance as on 01 January 2018 335,219,130 - - - - 335,219,130

Bonus Share for the Year - - - - - -

Balance as on 31 December 2018 335,219,130 - - - - 335,219,130

Particulars Share Capital Share GeneralRetained Other Total PremiumReserve Earning Reserve


Bonus Share for the Year 15,962,810 - - - - 15,962,810




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The annexed Notes 1 to 33 from an integral part of these financial statements. These financialstatements were approved by the Board of Directors on July 22, 2019 and were signed on its behalf by:

DMD & CFO CHIEF EXECUTIVE OFFICER DIRECTOR DIRECTOR CHAIRMAN


31-12-2018 31-12-2017PARTICULARS TAKA TAKAA. CASH FLOWS FROM OPERATING ACTIVITIES :

Collection from Premium 4,370,588,375 3,906,674,225Interest, dividend & rent received 869,255,647 913,669,310Other income received 11,263,784 17,858,281Payment for Claims (2,513,563,332) (2,739,496,691)Payment for Re-insurance, Management Expenses, Commission and others (1,499,886,549) (1,417,193,909)Income Tax paid/deducted (72,730,950) (89,900,777)Net Cash Flows from operating activities (A) 1,164,926,975 591,610,439

B. CASH FLOWS FROM INVESTING ACTIVITIES :Investment made (985,005,636) (1,847,147,621)Acquisition of Fixed Assets (70,282,713) (3,398,688)Loan against Policies Paid (12,457,440) (6,628,767)Loan against Policies realized 6,191,817 7,746,537Other Loans paid (Mortgage Loan) - - Other Loans realized 937,400 7,963,152Disposal of Treasury Bond 451,148,995 224,541,690Proceeds from sale of Fixed Assets 4,741,194 6,360,604Proceeds from sale of Shares 307,047,937 987,112,997Net Cash Flows from investing activities (B) (297,678,446) (623,450,096)

CASH FLOWS FROM FINANCING ACTIVITIES :Increase of Share Capital 15,962,810Dividend Paid (624,365) (1,463,989)Net Cash used in financing activities (C) (624,365) 14,498,821

Net increase in Cash & Cash equivalents (A+B+C) 866,624,164 (17,340,836)Cash and Cash equivalents at the beginning of the year 6,476,493,034 6,493,833,870Cash and Cash equivalents at the end of the year 7,343,117,198 6,476,493,034

Meghna Life Insurance Company LimitedCash Flow Statement


Dated: Dhaka,22 July, 2019


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The annexed Notes 1 to 33 from an integral part of these financial statements. These financialstatements were approved by the Board of Directors on July 22, 2019 and were signed on its behalf by:

Meghna Life Insurance Company LimitedNotes to the Financial Statements

For the year ended December 31 2018

A. GENERAL INFORMATION1.00THE COMPANY :

Meghna Life Insurance Company Limited is a Public Limited company which came into operation on May 05, 1996 with an Authorized Share Capital of Tk. 10 crore divided into 10 lac ordinary shares of Tk. 100 each. During the year 2011 this has been increased to Tk. 60 crore divided into 6 crore ordinary shares of Tk. 10 each as decided in the EGM held on August 04, 2011. The company has been listed with both the Dhaka and Chittagong Stock Exchanges since 04.09.2005. The company is engaged in life insurance business since its inception.

2.00Components of the Financial Statements: The financial statements include the following components: i) Balance Sheet as at 31st December 2018. ii) Revenue Account for the year ended 31st December 2018. iii) Statement of Changes in Shareholder's Equity for the year ended 31st December 2018. iv) Cash Flow Statement for the year ended 31st December 2018. v) Statement of Life Insurance Fund vi) Classified Summary of the Assets (Form AA); and vii) Significant accounting policies, explanatory notes and information. 3.00Significant Accounting Policies: i) Basis of Preparation of Financial Statements and Statement of Compliance (IAS-1)

These financial statements have been prepared on the Historical cost basis as going concern and therefore, do not take into consideration of the effect of inflation. The following underlying laws, rules, regulations and accounting pronouncements have been considered in presenting the financial statements:i) The Insurance Act, 2010ii) The Insurance Rule, 1958;iii)The Companies Act, 1994;iv)The Securities and Exchange Rules, 1987;v) The Income Tax Ordinance, 1984;vi)The Listing Regulations of Dhaka and Chittagong Stock Exchanges;vii)The Bangladesh Accounting Standards (BAS) 1, 2, 7, 8, 10, 12, 16, 18, 19,

21, 24, 27, 34, 37, 39 and BFRS-10 which have been adopted by the Institute of Chartered Accountants of Bangladesh (ICAB);

viii)Any other applicable legislation. ii)Basis of consolidation (IFRS-10):

The consolidated financial statements have been prepared according to International financial reporting standard

iii) Risk and Uncertainties for use of estimates in preparation of Financial Statements:Preparation of Financial Statements in conformity with the International Accounting Standards requires management to make estimates and assumption that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements and Revenues and Expenses during the period reported. Actual result could differ from those estimates. Estimates are used for accounting of certain items such as long-term contracts, depreciation and amortization, employee's benefit plans, taxes, reserves and contingencies.

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iv)Responsibility for Preparation and Presentation of Financial StatementsThe Board of Directors is responsible for the preparation and presentation of Financial Statements under Section 183 of Companies Act, 1994 and as per the provision of International Accounting Standard (IAS) "The Frame work for the preparation and presentation of Financial Statements" issued by the International Accounting Standards Board (IASB).

v) Cash Flow Statement (IAS-7):Cash Flow Statement is prepared in accordance with IAS-7 and Cash Flow from operating activities have been presented under direct method as outlined in the Securities and Exchange Rule, 1987.

Cash in hand, Cash at bank & Fixed deposits have been considered as the Cash and Cash equivalents for the preparation of the statement, which were held and available for use by the Company without any restriction and there was insignificant risk of changes in the value of these assets.

vi)Fixed Assets and Depreciation Procedures (IAS-16):

Fixed Assets have been stated in the accounts at Cost less accumulated depreciation. Depreciation on the assets has been charged on Written Down Value at the rates mentioned below. Depreciation on addition during the year is charged from the date of acquisition.

Category of Assets Rate of Depreciation

Furniture & Fixture 10% Office & Electrical Equipment 15% to 20% Motor Vehicles 20% House Properties 2.5% to 5%

vii)Investment, Dividend and Interest (IAS-39):i) Bangladesh Govt. Treasury Bond (BGTB), Statutory Deposit with Bangladesh

Bank are stated in the accounts at their cost of acquisition. ii) In Compliance with BAS 39 Investment made in the Shares are accounted for at

cost price. Any short fall in the market value of Share on the Balance Sheet date over cost price has been transferred to the fair value change account in accordance with IDRA Circular No Life 04/2012 dated 11 June, 2012 (Guideline for Preparation of Accounts and Financial Statements; Valuation of Equity Shares in note 8.06.

iii) Interest on Investment is calculated on accrual basis dividend income & entitlement to bonus share are recognized. When right to receive such dividend and bonus share is established.

viii)Stationery, Stamp and Printed materials (IAS-2):Stock of stationery, stamp and printed materials have been valued at cost and such valuation was certified by the management.

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ix) Claims: Provision for death claims on account of cases intimated within 31st December, 2018 has been made in accounts after adjusting re-insurance thereof.

x) Taxation & VAT (IAS-12):a) Current Tax :

Assessment of Income Tax for the assessment years 2012-2013, 2013-2014, 2014-2015, 2015-2016, 2016-2017 and 2017-2018 (Accounting year 2011, 2012, 2013, 2014, 2015 and 2016) have been completed.Assessment of Income Tax for the assessment year 2018-2019 (Accounting year 2017) has not yet been completed. Provision for Income Tax amounting to Tk. 61,607,305 has been made for the accounting year 2018 (Assessment year 2019 – 2020) on the basis of part B of 4th schedule for Life Insurance Business during the immediate preceding Income year. Advance Income Tax amounting to Tk. 46,945,297 has been deducted at source from interest on FDR, Treasury bond, and Loan on MLSI, STD and Dividend Income.The Company has Paid Advance Income Tax accounting to Tk. 143,585,738 during the year under Audit.

b) Deferred Tax:

As the profits and gains of the insurance business from all sources are to be computed in accordance with the provision of the fourth schedule of the Income Tax Ordinance, 1984 and not under different heads of income, the management feels it is not necessary to make estimate of deferred tax assets/liabilities at this stage as per the provision of IAS-12.

c) Value Added Tax (VAT):

VAT is exempted on life insurance business according to section 4 of second schedule of VAT Act, 1991. VAT on various services in accordance with relevant section of above VAT Act has been deducted and deposited to sonali bank through treasury chalan.

x) Employees Benefit Plans (IAS-19):

a) Provident Fund : The management of the Company has introduced provident fund for its regular employee duly recognized by National Board of Revenue with effect from 1st July, 2007. The Provident fund is administered by the Board of Trustee and is funded both by contributions from employees & the company at a pre determined rate @ 10% of the basic pay. The amount is invested seperately from the company fund.

b) Gratuity: The Company has an unfunded gratuity scheme for its permanent employees with effect from 1st July, 2007 under which an employee is entitled to the benefit of one basic for every year at minimum 5 Years continuous service. The calculation is made on the basis of last drawn basic salary.

c) Group Insurance : The Company operates group insurance scheme for its regular employee that was introduced in the Year 2010. The benefits are paid to the employees only on death.

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i)

ii)

iii)

iv)

v)

xi) Life Fund:The surplus of revenue after adjusting the re-insurance premium and setting off the claim, the management and other expenses has been carried forward to Life Fund along with the surplus brought forward from previous year.

xii) Revenue Recognition (IAS-18):Premium is recognized as income once the related policies have been issued and the

premium received. Collectable amount of premium due and outstanding up to the month of December 2018 for which grace period has not expired and previous installment have been paid, are also recognized.

xiii) Operation: a)During the year 2018. through the operation of Branch & Agency Offices the gross

premium earned by the company amounted to Tk. 4,329,103,422 after ceding for re-insurance premium. The net premium from different Branch & Agency Offices amounting to Tk. 4,314,596,661. The details of gross premium from different Branch & Agency Offices were as follows:

Division AmountEkok Bima Division 2,563,700,865Loko Bima Division 832,601,150Islami Bima Division 900,500,867Group 32,300,540Total: 4,329,103,422

b) Management expenses inclusive of commission, salaries, etc. have been charged to revenue account for an aggregate amount of Tk. 1,234,982,667. The management expenses represents approximately 28.53% of gross premium and 28.62% of the net premium earned during the year-2018.

c) Payment of Commission to Agent and Employer of Agents represent 31.79% and 14.19% respectively of the management expenses. These expenses represent respectively 9.07% and 4.05% of gross premium for the year.

d) Renewal of policies during the year represents the policies underwritten in the preceding years.

xiv) Reporting Currency and Level of Precision (IAS-21): The figures in the financial statements represents Bangladesh currency (Taka), which

have been rounded off to the nearest Taka, unless stated otherwise.

xv) Comparative Information: Previous year's figures have been rearranged, where necessary, to conform to current

year's presentation.

xvi) Reporting Period (IAS-10): Financial statements of the company cover one accounting year from 01 January to 31

December consistently.

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BALANCE SHEET4.00SHARE CAPITAL 31-12-2018 31-12-2017 Authorized Capital: 60,000,000 ordinary shares of Tk. 10 each 600,000,000 600,000,000

Issued, Subscribed and paid-up capital: 33,521,913 Ordinary Shares of Tk. 10 each fully paid-up. 335,219,130 335,219,130

31-12-2018 31-12-20174.01Opening Balance 335,219,130 319,256,320Add. Bonus Share Issued During the Year - 15,962,810 Total: 335,219,130 335,219,130

31-12-2018 31-12-20174.02Category of Shareholders Shareholding Shareholding Sponsor/Director 18% 60,571,130 61,803,490 General Public 82% 274,648,000 273,415,640 100% 335,219,130 335,219,1304.03Distribution Schedule of Paid-up Capital:

As per listing rules of the Stock Exchange a distribution schedule of each class of equity shares and the number of shareholders and percentage as on December 31, 2018 is given below:

Category of Number of Share Holding Value of Shares Shareholdings Shares (%) Tk. Sponsor Director 6,057,113 18.07% 60,571,130 Institutions 10,815,232 32.26% 108,152,320 General Shareholders 16,649,568 49.67% 166,495,680 Total No. of Share 33,521,913 100.00% 335,219,130

Interval No. of Share No. of Shareholders Total Holding (%) Below 500 518,869 3,353 1.55 500 to 5000 2,962,636 1,722 8.84 5001 to 10000 1,532,941 211 4.57 10001 and above 28,507,467 322 85.04 33,521,913 5,608 100.00

5.00Life Insurance Fund This consists of the accumulated balance of revenue surplus up to December-2018

Particulars 31-12-2018 31-12-2017 Opening balance 15,634,617,05414,689,895,605 Add: Increase in Life Revenue Account during the year 1,232,711,985 944,721,449 Closing balance 16,867,329,039 15,634,617,054 The detailed break up is shown in (Annexure-1)

The accretion to the Life Fund during the year is Tk. 1,232,711,985 as against the accretion to the fund of Tk. 944,721,449 during the preceding year.

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6.00Estimated Liabilities in Respect of Outstanding Claims Whether Due or Intimated: The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 a)Ekok Bima: Death Claim 11,034,464 9,946,075 Survival Benefit 2,182,995 8,501,203 Claim by Maturity 36,833,476 10,156,647 Bonus to Policy Holders 21,347,482 7,550,093

b)Loko Bima: Death Claim 1,617,360 2,342,294 Survival Benefit 52,699,386 10,924,252 Claim by Maturity 45,809,606 17,717,552 c)Islami Bima (Takaful) : Death Claim 2,600,879 4,710,449 Survival Benefit 5,586,820 68,094,564 Claim by Maturity 81,966,403 37,826,461 Bonus to Policy Holders 1,162,990 -

f) Group : Death 1,081,588 636,620

Closing Balance : 263,923,449 178,406,210

The above amount constitutes share of claims liability of the company.

7.00Amount Due to Other Persons or Bodies Carring on Insurance Business:

The amount represents the premium payable to Score Global Life SE, Singapore branch, on account of share of re-insurance premium after adjustment of share of re-insurance commission and claim due from them. The balance of Score Global Life SE, Singapore Branch, has been accounted for, up to the 4th quarter ended December 31, 2018.

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2010

25th Feb. Purchase of 24.23 decimal land at Cumilla town.25th March Purchase of 9.25 decimal land with 03 (three) storied building at Patuakhali town.

201129th June Purchase of commercial space measuring 3641 sft. with 0.011 decimal land at Nasirabad C/A, Chittagong.

201227th Aug. purchase of 1.23 Decimal land at 11/B, Toyenbee circular road, Motijheel, Dhaka-1000.

19th Sep. Purchase of 758 sft. Commercial space with 0.0023 acre land at Nasirabad C/A, Chittagong.

13th Aug. Purchase of Membership Number-245 of Dhaka Stock Exchange Ltd.

201318th April Formation of Subsidiary Company in the name and style: Meghna Life Securities and Investment Ltd.20145th May Starting construction on 2.5 Katha Land attached to own Building Meghna-Karnaphuli Biman Bhaban at 11/D, Toyenbee Circular Road, Motijheel C/A, Dhaka-1000.201515th March Start up construction work on 8 decimal land at Sagardi, Barishal Town.

201715th March Shifting of Loko Bima, Islami Bima (Takaful) Division to Newly Constructed Meghna-Karnaphuli Bima Bhaban at 11B & 11D, Toyenbee Circular Road, Motijheel C/A, Dhaka-1000.2018 Shifting of Ekok Bima, Loko Bima & Islami Bima (Takaful) Division of Barishal Division to Newly Constructed own Building at Sagardi Barishal.

8

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8.00. Sundry creditors:The details break-up is made up as follows:Particulars Notes 31-12-2018 31-12-2017Agency commission payable 34,450,213 28,245,244 Over-riding commission payable 81,421,209 38,818,145 Accrued expenses 8.01 2,689,898 4,073,250 Tax deduction at source 8.02 112,869,108 83,495,470 Vat 8.03 425,431 4,883,914 License fee 27,519,240 23,060,782 Loan bond 134,753 143,246 Share application money 8.04 203,539 203,539 Provision for doubtful debt 8.05 6,549,271 6,549,271 Provision for income tax 541,629,839 562,822,618 Unpaid dividend 8,313,853 8,938,218 Provident fund trustee A/C. 3,313,873 37,899,112 Recovery of motor car installment 736,979 736,979 Fair value change a/c 8.06 91,265,057 26,984,555 Other account 130,000 130,000

Total : 911,652,263 826,984,343

8.01. Accrued Expenses: The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017Salary & Allowances 759,592 1,060,441 Office rent 1,574,656 1,057,778 Audit fees 355,650 355,650 Other Expense - 1,599,381 Total: 2,689,898 4,073,250

8.02 Tax Deduction at Source: TK. 112,869,108 The above amount includes Tk. 23,540,017 being Tax deduction from Agency commission for the year which has been deposited to Sonali Bank Subsequently.

8.03 VAT: Tk. 425,431The entire balance of this account has been deposited to Sonali Bank Subsequently.

8.04 Share Application Money :TK. 203,539The Company went for IPO in April, 2005 and after allotment of Shares on lottery refund warrants were sent to all unsuccessful applicants. The amount in question represents applicants who did not encash their refund warrants till 31st December-2018.

8.05 Provision for Doubtful Debt. :The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 Opening Balance 6,549,271 6,549,271 Add : Provision made during the year - - 6,549,271 6,549,271 Less : Provision written back - - Total: 6,549,271 6,549,271

Provision has been made for some debtors which is doubtful of recovery in the opinion of the management.


8.06 Fair Value Change Account:During the year provision has been made against the difference amount between book value and market value of share to the tune of TK. 64,280,501 for unrealised loss due to decrease of market value of existing shares as at 31 December, 2018.The amount was shown under "Fair Value Change Account" as per IDRA circular on life -04/2012 dated 11 June, 2013,(Guideline for. Preparation of Accounts and Financial Statements: Valuation of Equity Shares)

Particulars 31-12-2018 31-12-2017 Opening Balance 26,984,555 20,023,270 Add : Provision made during the year 64,280,502 6,961,285 91,265,057 26,984,555 Less: Adjusted during the year - - 91,265,057 26,984,555 9.00 Premium Deposit:

The balance of this account represents premium received against policies but for want of certain necessary information the premium could not be adjusted within December 31, 2018.

10.00Loans:The details break-up is made up as follows:

Particulars Notes 31-12-2018 31-12-2017 Loans on Mortgage of Property 10.01 10,129,087 11,066,487 Loans on Insurance Policies within their surrender Value 10.02 31,057,041 24,791,418 Loan on Meghna Life Securities & Investment Ltd 10.03 50,000,000 - Total: 91,186,128 35,857,905 10.01Loan on Mortgage of Properties: The details break-up is made up as follows: Particulars 31-12-2018 31-12-2017 Opening balance 11,066,487 19,029,639 Add : Loan paid during the year - - 11,066,487 19,029,639 Less: Loan adjusted during the year 937,400 7,963,152 Closing Balance: 10,129,087 11,066,487

10.02Loan of Insurer’s Policies within their Surrender Value : The details break-up is made up as follows: Particulars 31-12-2017 31-12-2016 Opening balance 24,791,418 25,909,188 Add : Loan paid during the year 12,457,440 6,628,767 37,248,858 32,537,955 Less: Loan recovered & adjusted during the year 6,191,817 7,746,537 Closing Balance: 31,057,041 24,791,418

The Loan paid during the year represents Tk. 7,667,940 on account of Ekok Bima, Tk. 312,500 of Loko Bima & Tk. 4,477,000 of Islami Bima.

10.03Loan on Meghna Life Securities & Investment Ltd.: The details break-up is made up as follows: Particulars 31-12-2018 31-12-2017 Opening Balance - - Add : Loan paid during the year 50,000,000 - Closing Balance 50,000,000 -

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11.00Investment: The details break-up is made up as follows: Particulars Notes 31-12-2018 31-12-2017 Statutory Deposit with Bangladesh Bank (BGTB) 11.01 15,000,000 15,000,000 Bangladesh Govt. Treasury Bond 11.02 4,363,271,141 4,475,799,996 Shares 11.03 982,509,607 797,894,061 House Property (At Cost Less Dep.) 11.04 718,783,435 623,580,324 Meghna life Securities &Investment Ltd. 11.05 396,000,000 396,000,000 Closing Balance: 6,475,564,183 6,308,274,381 11.01Statutory Deposit with Bangladesh Bank:

In compliance with section 7 (1) of Insurance Act, 2010, the amount has been deposited in Bangladesh Bank for which the Bank has purchased 10 years Term Bangladesh Govt. Treasury Bond: The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 Opening balance 15,000,000 15,000,000 Add : Addition during the year - - 15,000,000 15,000,000 Less: Encashment during the year - - Closing Balance: 15,000,000 15,000,00011.02Bangladesh Govt. Treasury Bond: The details break-up is made up as follows: Particulars 31-12-2018 31-12-2017 Opening balance 4,475,799,996 4,333,834,493 Add : Addition during the year 338,620,140 366,507,192 4,814,420,136 4,700,341,685 Less: Encashment during the year 451,148,995 224,541,689 Closing Balance: 4,363,271,141 4,475,799,996

The above amount has been invested for 10 (ten) years term with interest rates varying from 7.50% to 13.20%. The interest accrued on the Bond has been duly accounted for.

11.03 Investment in Shares: The details break-up is made up as follows: Particulars 31-12-2018 31-12-2017 Opening balance 797,894,061 329,512,623 Add : Addition during the year 499,702,591 1,429,880,824 1,297,596,652 1,759,393,447 Less: Disposal during the year 315,087,045 961,499,386 Closing Balance: 982,509,607 797,894,061


SL.Name of the Company No. of Average Book Value Market No. Shares Cost per Share at cost Value (Taka) (Taka)

Details of investment in shares are given below:

BANK1 DUTCHBANGL 100,000 156.03 15,603,342.93 14,440,000.00 2 MERCANBANK 2,364,925 23.58 55,763,253.25 42,568,650.00 FINANCIAL INSTITUTIONS 3 FASFIN 2,547,966 19.19 48,903,728.93 34,397,541.00 4 FIRSTFIN 2,500 10.13 25,322.30 14,250.00 5 NHFIL 160,000 45.13 7,220,433.38 7,632,000.00


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ENGINEERING 6 BANGAS 7,092 338.79 2,402,693.60 2,223,342.00 7 NAHEEACP 7,531 9.09 68,470.00 439,810.40 8 RSRMSTEEL 483,818 56.87 27,516,340.03 22,497,537.00 9 SSSTEEL 13,492 10.00 134,920.00 - 10 WMSHIPYARD 42,000 21.69 911,118.48 835,800.00 FUEL & POWER 11 INTRACO 11,200 9.52 106,670.00 300,160.00 12 SUMITPOWER 175,000 40.96 7,167,355.12 6,895,000.00 13 TITASGAS 600,000 48.88 29,329,202.78 21,840,000.00 TEXTILE 14 ACFL 180,099 49.93 8,991,704.62 7,582,167.90 15 APEXWEAV 90,000 134.25 12,082,500.00 12,082,500.00 16 FEKDIL 200,000 17.36 3,472,110.00 3,000,000.00 17 GENNEXT 76,532 8.35 638,826.60 482,151.60 18 KTL 12,076 9.09 109,785.29 305,522.80 19 MLDYEING 7,248 8.33 60,400.00 215,265.60 20 VFSTDL 7,740 9.09 70,370.00 447,372.00 PHAMACEUTICALS & CHEMICALS 21 ACI 6,251 401.28 2,508,388.74 2,039,076.20 22 ACTIVEFINE 48,500 28.63 1,388,685.22 1,367,700.00 23 IBP 3,239 9.09 29,450.00 100,732.90 24 SILVAPHL 9,193 10.00 91,930.00 276,709.30 CEMENT 25 NILOYCEM 17,400 92.58 1,610,950.00 4,832,850.00 PAPER & PRINTING 26 SKTRIMS 5,545 9.09 50,410.00 256,733.50 IT SECTOR 27 GENEXIL 10,467 10.00 104,670.00 - 28 KARNAPHULI 2,909,832 17.56 51,090,223.92 45,975,345.60 TELECOMMUNICATION 29 BSCCL 12,501 85.00 1,062,549.45 1,168,843.50 TRAVEL & LEISURE 30 PENINSULA 500,000 32.06 16,029,361.65 14,400,000.00 MISCELLANEOUS 31 BSC 215,000 43.13 9,272,233.43 8,385,000.00 32 ICB1STUNIT 302,804 17.49 5,294,800.00 3,028,040.00 33 Sonalipaper 12,000 76.08 912,957.50 1,140,000.00 CDBL (Central) 34 CDBL 100,000 10.00 1,000,000.00 1,000,000.00 PRE - IPO PLACEMENT 35 GMG AIRLINES 110,000 46.36 5,100,000.00 5,100,000.00 36 ENERGY PRIMA 50,000 95.00 4,750,000.00 4,750,000.00 37 CDBL 56,945 10.00 569,450.00 569,450.00

Cost Depreciation Addtion Charge Written Property Opening during the Total Opening During Total Down Balance year Balance the year Valuei) Land measuring 6 decimals with semi Pacca Building at Bargunaii) Land measuring 3 Kathas with one four Stored Building at 70, R. K. Mission Road, Gopibag, Dhaka. iii) (a) Land measuring 8.586Kathas at 11, Toyenbee Circular Road, Motijheel C/A, Dhaka. iv) Land measuring 8 Decimals with one storied Building in the District town of Barishal.v) Land measuring 19.35 Decimals thereon in theDistrict town of Cumilla.vi) Land measuring 9.25 Decimals with one three storied Building at Patuakhali.

viii) 2710.30 sqft. floor space including car parking with 1.238 Decimals Land At Mirpur

xi) 1305 sqft floor space (3rd floor) including car parking with 0.36 Decimals Land At afford Sultan Elesium.Ctg.

vii) 3641 sqft floor Space (2nd floor) with .011 decimals Land at Afford Sultan Elesium, Nasirabad, Chittagong.

614,019 - 614,019 237,301 9,373 246,674 367,345

10,415,600 46,700 10,462,300 1,144,662 64,922 1,209,584 9,252,716

451,551,540 82,433,594 533,985,134 - - - 533,985,134

52,355,932 9,619,010 61,974,942 - - - 61,974,942

42,887,595 82,000 42,969,595 1,103,076 349,975 1,453,051 41,516,544

16,933,091 - 16,933,091 717,662 92,531 810,193 16,122,898

19,561,269 - 19,561,269 113,625 116,672 230,297 19,330,972

2,500,000 4,501,600 7,001,600 - 126,280 126,280 6,875,320

29,388,800 - 29,388,800 4,646,958 599,146 5,246,104 24,142,696

x) 758 sqft floor space (Grond floor)with .0023 Acre land at afford Sultan Elesium.Ctg.

6,057,821 - 6,057,821 722,059 120,894 842,953 5,214,868

Total: 632,265,66796,682,904728,948,571 8,685,343 1,479,793 10,165,136718,783,435

11.04House property (At Cost less depreciation): The details break-up is made up as follows:

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unrealised loss of Tk. 91,265,057 due to decrease of market value of existing shares as at 31 December, 2018 was shown under "Fair Value Change Account" as per IDRA circular on life -04/2012 dated 11 June, 2012,(Guideline for Preparation of Accounts and Financial Statements: Valuation of Equity Shares) in note:

UNIT FUND 38 MTB UNIT FUND 10,000,000 10.58 105,750,000.00 88,700,000.00 39 UFS-Popular Life 8,500,000 11.94 101,315,000.00 92,055,000.00 40 Sandhani Life UF 10,000,000 10.55 105,500,000.00 97,400,000.00 41 Prime Finance2nd 5,000,000 10.80 54,000,000.00 49,000,000.00 42 Rupali Life 1st MF 5,000,000 10.40 52,000,000.00 49,000,000.00 43 BD Thai Food & Beverage Ltd.2,250,000 10.00 22,500,000.00 22,500,000.00 44 Alliance Capital Port Folio A/c 220,000,000.00220,000,000.00 Grand Total: 982,509,607.22891,244,551.30

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i)Property at Barguna Tk. 3,67,345 The company has purchased a plot of land measuring 6 decimals with a semi pacca Building thereon in the District Town of Barguna in 2001. Total cost of the property with Registration and legal fees Stands at Tk. 614,019. Depreciation has been charged for the year on the cost of semi Pacca building @ 5% per annum.

ii) Property at Gopibagh, Dhaka. Tk. 9,252,716The Company purchased one four storied Building on a 3 Kathas plot of land at 70, R.K. Mission Road, Gopibagh, Dhaka in 29/12/2002, Total cost of the property with Registration & Legal fee stands at Tk. 10,462,300. Depreciation has been charged on the cost of building @ 2.5% per annum.

iii) Property at Motijheel C/A, Dhaka Tk. 533,985,134The company purchased a Plot of Land Measuring 8.586 Kathas at 11, Toyenbee Circular Road, Motijheel C/A, Dhaka Total cost of the property with Registration & Legal fees stands at Tk. 533,985,134 During the year 2018 Tk. 82,433,594 has been paid for building construction & Land purpose.

iv) Property at Barishal: Tk. 61,974,942The Company purchased a plot of Land measuring 8 Decimals with one storied Building in the District town of Barisal. Total cost of the property with registration and legal fees stands at Tk. 61,974,942, during the year Tk. 9,619,010 has been paid for building construction.

v) Property at Cumilla: Tk. 41,516,244 The Company purchased a plot of Land measuring 24.23 Decimals thereon in the District town of Cumilla. Total cost of the property with registration and legal fees stands at Tk. 42,969,595

vi) Property at Patuakhali: Tk. 16,122,898The Company purchased Land measuring 9.25 Decimals with one three storied Building at Patuakhali. Total cost of the property with registration and legal fees stands at Tk. 16,933,091

vii)Property at Chittagong: Tk. 24,142,696The Company purchased a flat 3641 sq. ft. Land measuring .011 Decimals Land at Afford Sultan Elesium, Nasirabad, Chittagong. Total cost of the property with registration and legal fees stands at Tk. 29,388,800

viii)Property at Mirpur: Tk. 19,330,972The Company has paid Tk. 19,561,269 for purchased a flat 2710.30 sqft. floor space including car parking with 1.238 Decimals Land At Mirpur Mazar Road, Mirpur-10, Dhaka.

ix) Property at Chittagong: Tk. 5,214,868The Company purchased a flat 758 sqft land measuring .0023 Acre land at afford elesium Nasirabad, Ctg. Total cost of the property with registration and legal fees stands at Tk. 6,057,821.

x) Property at Chittagong: Tk. 6,875,320The Company purchased a flat 1305 sqft floor space (3rd floor) including car parking with 0.36 decimals at afford Sultan Elesium Nasirabad, Ctg. Total cost of the property with registration and legal fees stands at Tk. 7,001,600.

11.05Meghna Life Securities & Investment Ltd.Tk. 396,000,000The Company has purchased a membership from DSE.

12.00Outstanding Premium: Tk. 1,801,741,073The amount represents premium due as at December 31, 2018 for which grace period has not expired within the above date.

13.00Interest, Dividend and Rent Accrued but not Due: The details break-up is made up as follows:

Particulars Notes 31-12-2018 31-12-2017 Interest on F.D.R 13.01 255,256,949 151,920,136 Interest on Motor/Bi-Cycle Loan 13.02 304,379 314,195 Interest on Policy Loan 13.03 13,332,376 11,547,083 Interest on Mortgage Loan 13.04 1,559,255 1,297,245 Interest on Govt. Treasury Bond 13.05 132,792,190 143,877,318 Closing Balance: 403,245,149 308,955,977

13.01Interest on Fixed Deposit.: The details break-up is made up as follows: Particulars 31-12-2018 31-12-2017 Opening balance 151,920,136 162,232,902 Add : Provision made during the year 402,176,502 327,353,609 554,096,638 489,586,511 Less: Recovered during the year 298,839,689 337,666,375 Closing Balance: 255,256,949 151,920,136

13.02Interest on Motor Cycle/Bi-Cycle Loan: The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 Opening balance 314,195 339,707 Add: Provision made during the year 13,805 19,798 328,000 359,505 Less: Recovered/Adjustment made during the year 23,621 45,310 Closing Balance: 304,379 314,195

13.03Interest on Insurer’s Policies Loan within their Surrender Value: The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 Opening balance 11,547,083 10,612,228 Add: Provision made during the year 3,652,120 3,514,702 15,199,203 14,126,930 Less: Recovered/Adjustment made during the year 1,866,827 2,579,847 Closing Balance: 13,332,376 11,547,083

13.04Interest on Mortgage Loan: The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 Opening balance 1,297,245 1,436,139 Add: Provision made during the year 1,033,994 1,742,474 2,331,239 3,178,613 Less: Recovered/Adjustment made during the year 771,984 1,881,368 Closing Balance: 1,559,255 1,297,245

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13.05Interest on Bangladesh Govt. Treasury bond: The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 Opening balance 143,877,318 143,486,787 Add: Provision made during the year 454,872,722 473,468,311 598,750,040 616,955,098 Less: Recovered/Adjustment made during the year 465,957,850 473,077,780 Closing Balance: 132,792,190 143,877,318

14.00Advance, Deposit and Prepayments: The details break-up is made up as follows:

Particulars Notes 31-12-2018 31-12-2017 Advance income tax 14.01 708,768,549 636,037,598 Advance against office rent 14.02 19,867,521 19,953,922 Advance against salary & allowances 14.03 126,304,231 125,133,159 Amount due from Meghna Life Sec. & Inv. Ltd. 14.04 13,130,739 7,947,237 Security deposit 1,235,730 1,235,730 Advance against TA/DA 670,371 575,952 Advance for purchase 305,368,659 86,717,305 Advance agt. field officer 344,129,259 359,885,421 Closing Balance: 1,519,475,059 1,237,486,324

14.01Advance income tax: The details break-up is made up as follows:

FDR interest Tk. 29,889,380 STD Interest Tk. 1,569,278, Dividend Income Tk. 15,113,815 and Loan on MLSI Tk. 372,823 These related to the accounting year 2018 corresponding to assessment year 2018-2019 which is eligible for adjustment upon finalization of assessment

The movement of the above balance is given below:

Particulars 31-12-2018 31-12-2017 Opening balance 636,037,598 546,136,821 Add: Tax deduction at source during the year 46,945,297 43,686,431 682,982,895 589,823,252 Less: Adjustment 2010 & 2011 117,800,084 20,000,000 565,182,811 569,823,252 Add: Advance Tax paid during the year 143,585,738 66,214,346 Closing Balance: 708,768,549 636,037,598

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14.02Advance against office rent: The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 Opening balance 19,953,922 21,926,309 Add : Advance paid during the year 5,766,769 4,486,568 25,720,691 26,412,877 Less: Adjustment made during the year 5,853,170 6,458,955 Closing Balance: 19,867,521 19,953,922

14.03Advance against salary & allowances:

The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 Opening balance 125,133,159 126,879,530 Add : Advance paid during the year 7,188,532 39,401,192 132,321,691 166,280,722 Less: Recovered during the year 6,017,460 41,147,563 Closing Balance: 126,304,231 125,133,159

14.04Amount due from Meghna Life Securities & Investment Ltd. :


Particulars 31-12-2018 31-12-2017 Opening balance 7,947,237 7,444,194 Add : Advance paid during the year 5,183,502 503,043 13,130,739 7,947,237 Less: Recovered during the year - - Closing Balance: 13,130,739 7,947,237

15.00Sundry Debtors: The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 Premium Short Deposit 329,165,696 352,938,264 Petty Cash Suspense A/c. 7,666,795 5,351,373 Closing Balance: 336,832,491 358,289,637

Out of total Sundry Debtors of Tk. 336,832,491, a sum of Tk. 6,549,270 has been considered doubtful of recovery for which provision has been made up to December 31, 2008 in the account as per note 8.05. It is also notable that an amount of Tk. 2.15 Crore has subsequently recovered.

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16.00Fixed Deposit with Banks: The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 A-B Bank Ltd. 315,000,000 365,000,000 Al-Arafah Islami Bank Ltd. 720,000,000 525,000,000 Bangladesh Commerce Bank Ltd. 90,000,000 - Bangladesh Finance And Investment Co. Ltd. 110,000,000 90,000,000 Bank Asia Ltd. 20,000,000 57,500,000 BRAC Bank Ltd. 55,000,000 110,000,000 Dhaka Bank Ltd. 110,000,000 36,100,000 EXIM Bank Ltd. 570,000,000 595,500,000 First Security Islami Bank Ltd. 140,000,000 110,000,000 IFIC Bank Ltd. 225,000,000 235,532,500 International Leasing and Financial Services Ltd. 193,500,000 213,500,000 Islami Bank Bangladesh Ltd. 60,000,000 75,000,000 Jamuna Bank Ltd. 126,000,000 155,000,000 Lanka Bangla Finance Ltd. 47,500,000 47,500,000 Meghna Bank Ltd 15,000,000 35,000,000 Mercantile Bank Ltd. 162,400,000 133,560,000 Midland Bank Ltd. 35,000,000 45,000,000 Modhumoti Bank Ltd 20,000,000 10,000,000 Mutual Trust Bank Ltd. 85,000,000 65,000,000 National Bank Ltd 20,000,000 20,000,000 National Credit and Commerce Bank Ltd. 92,300,000 66,550,000 NRB Commercial Bank Ltd. 35,000,000 35,000,000 NRB Global Bank Ltd. 5,000,000 5,000,000 One Bank Ltd. 45,000,000 50,000,000 Peoples Leasing and Financial Services Ltd. 70,000,000 80,000,000 Premier Leasing & Finance Ltd. 30,000,000 30,000,000 Pubali Bank Ltd. 60,000,000 55,000,000 Reliance Finance Ltd. 90,000,000 90,000,000 Shahjalal Islami Bank Ltd. 85,000,000 35,000,000 Social Islami Bank Ltd 548,000,000 531,500,000 South Bangla Agriculture & Commerce Bank Ltd 190,000,000 175,000,000 Southeast Bank Ltd. 100,000,000 60,000,000 Standard Bank Ltd. 223,500,000 137,500,000 The City Bank Ltd. 5,000,000 - The Farmers Bank Ltd. 156,620,000 162,835,000 The Premier Bank Ltd 273,900,000 207,500,000 The Trust Bank Ltd. 45,000,000 40,000,000 Union Bank Ltd. 40,000,000 30,000,000 United Commercial Bank Ltd. 30,000,000 5,000,000 Uttara Bank Ltd. - 10,000,000 Total: 5,243,720,000 4,730,077,500

Accrued interest on F.D.R is calculated at the rate fixed by the bank individually as agreed upon.

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17.00Amount Due from Other Persons or Bodies Carrying on Insurance Business: The amount receivable from Re-Insurer on account of share of Re-Insurance commission & claim after adjustment of share of Re-Insurance Premium.

18.00Motor cycle & Bi-cycle Loan :

Particulars 31-12-2018 31-12-2017 Opening balance 4,457,234 4,550,968 Add : Addition during the year 175,327 623,000 4,632,561 5,173,968 Less: Recovered during the year 518,120 716,734 Total: 4,114,441 4,457,234

The above balance includes some motor cycle loans which are outstanding since long and needs efforts for realization. 19.00Fixed assets (at cost less depreciation):

Particulars Office Furniture & Electrical & Motor Total Fixture Electronics Vehicles Equipment

Cost As at January 01, 2018 58,394,943 59,506,808 116,982,843 234,884,594 Add: Addition during the year 58,375,283 12,490,249 2,115,805 72,981,336 116,770,225 71,997,057 119,098,648 307,865,930 Less: Disposal/Adjustment during the year - - 7,373,146 7,373,146 As at December 31, 2018 116,770,225 71,997,057 111,725,502 300,492,784

Depreciation

As at January 01, 2018 18,403,927 16,932,358 54,999,093 90,335,377 Charged during the year 5,852,496 6,453,071 12,526,314 24,831,881 Less: Disposal/Adjustment during the year - - 4,674,524 4,674,524 As at December 31, 2018 24,256,423 23,385,429 62,850,883 110,492,735

Written Down Value

As at December 31, 2018 92,513,803 48,611,628 48,874,619 190,000,050 As at December 31, 2017 40,121,486 43,446,972 61,983,751 144,549,218

i) Addition to Office & Electrical Equipments represents Tk. 47,480 for Telephone installation, Tk. 4,281,424 for Computer, Tk 4,401,345 for office equipments, Tk 3,760,000 for Air Condition purchased during the year, 2018.

ii) The gain of Tk. 4,741,194 on disposal of 14 No. vehicles during the year has been show in the Rename Accounts.

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REVENUE ACCOUNT:

20.00Claim under policies (Including Provision for Claims due or intimated less re-insurance by death or survival):

Particulars Ekok Bima Loko Bima Islami Bima Total

By Death 28,710,890 11,704,426 11,947,043 52,362,359

By Death Group 21,175,438 - - 21,175,438

By Survival 674,963,300 168,823,314 248,702,348 1,092,488,962

By Surrender 10,792,906 1,015,516 8,970,089 20,778,511

Bonus in Cash 386,575,599 61,798,169 131,305,641 579,679,409

Claim by Maturity 364,462,897 237,932,068 230,200,927 832,595,892

Total 2018 1,486,681,030 481,273,493 631,126,048 2,599,080,571

Total 2017 1,232,786,567 705,809,334 778,701,522 2,717,297,423

During the year 2018 the company has settled and adjusted Tk. 2,599,080,571 including last year outstanding claims worth Tk. 178,406,210 as death claim, maturity claims and survival benefit. The amount of Tk. 263,923,449 was outstanding as on December 31, 2018. Out of outstanding amount, the company has settled Tk. 258,023,449 as of the date of audit.

21.00Commission to Insurance Agents ( less that on re-insurance):

The details break-up is made up as follows: Particulars 31-12-2018 31-12-2017 Agency Commission 394,427,049 395,441,520 Less: Commission earned on re-insurance ceded 1,819,974 1,871,228 Total: 392,607,075 393,570,292 At the year end the agency commission payable amounted to Tk. 34,450,213 (Note: 8.00)

22.00Depreciation:


Particulars Notes 31-12-2017 31-12-2016 House Property 11.04 1,479,793 1,549,038 Fixed Assets 20.00 24,831,881 26,709,507

Total: 26,311,674 28,258,545

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23.00 Premium Less Re-Insurance The above balance is made-up as follows:

Type of Gross Re- Ins. Dec.’2018 Dec.’2017 Premium Premium ceded Net Net

EB First year Premium 606,600,540 14,506,761 592,093,779 590,921,805 LB First year Premium 209,900,680 - 209,900,680 200,007,083 IB First year Premium 210,000,345 - 210,000,345 214,866,387 Sub Total : 1,026,501,565 14,506,761 1,011,994,804 1,005,795,275 EB Renewal Premium 1,957,100,325 - 1,957,100,325 1,880,854,532 LB Renewal Premium 622,700,470 - 622,700,470 672,207,285 IB Renewal Premium 690,500,522 - 690,500,522 684,846,495 Sub Total : 3,270,301,317 - 3,270,301,317 3,237,908,312 Group Insurance premium 32,300,540 - 32,300,540 30,528,576 Grand Total : 4,329,103,422 14,506,761 4,314,596,661 4,274,232,163

E.B, L.B. & I.B. represents the Ekok Bima Division, Loko Bima Division and Islami Bima Division. The First year premium from all category of business represents 23.45 % Renewal Premium for these business represent 75.80 % and Group Insurance Premium 0.75 %.

24.00 Interest, Rent & Dividend: The details break-up is made up as follows: Particulars 31-12-2018 31-12-2017 Interest on Fixed Deposit 402,187,639 327,353,610 Interest of short term deposit 13,520,860 12,930,739 Interest on motor cycle loan 39,583 24,753 Dividend income 86,269,081 43,998,911 Interest on policy loan 3,652,120 3,519,624 Interest on mortgage loan 1,033,994 1,742,474 Rental income 974,980 121,000 Interest on Treasury bond 452,138,341 467,568,103 Interest on MLSI loan 3,728,221 - Total: 963,544,819 857,259,214

Tax deducted at source has been shown under advance income tax. (Note: 14.00)

25.00 Capital Expenditure Commitment: Tk. NIL There was no Capital Expenditure Commitment authorized by the Board as on December 31, 2018

26.00 Contingent Liability/Assets: Tk. NIL a) Claim against the company not acknowledged as debt is NIL as on December 31, 2018

b) Claim by the company not acknowledged as receivable is also NIL as on December 31, 2018.

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27.00 Credit facility available to the Company:There was no Credit facility available to the company under any contract as on December 31, 2018. other than trade credit available in the ordinary course of business.

28.00 Related Party Disclosure (IAS-24): The company has no “Related Party” connection as described in IAS 24 with any body who can exercise significant influence in making financial and operating decision. There is a subsidiary company in the name of Meghna Life Securities & Investment Ltd. The balance of Meghna Life Securities& Investment Ltd. is Tk. 63,130,739 {Loan: 50,000,000 and Advance: 13,130,739 (Note: 14.04)} has been accounted for the year ended December 31,2018.

29.00 Requirement under company’s Act 1994, Schedule XI Part - II The details break-up is made up as follows:

Particulars 31-12-2018 31-12-2017 (i) Number of employees drawing salary above Tk. 5,000 P.M 1,004 1,169 (ii) Number of employees drawing salary below Tk. 5,000 P.M. 381 336 1,385 1,505

30.00 Payments/Perquisites to Directors/Officers:During the year 2018 an amount of Tk. 692,000 inclusive of VAT was paid to the Directors of the company as Board Meeting attendance fee as per resolution in this respect and Tk. 295,703,531 was paid to officers as salary & allowances details are shown below:

Particulars 31-12-2018 31-12-2017 Directors CEO Officers Directors CEO Officers Board Meeting Fee 692,000 - 416,250 - - Basic Salary - 1,800,000 150,092,631 - 1,800,000 176,845,782 Other Allowances - 1,920,000 141,890,900 - 1,920,000 144,692,005 Total: 692,000 3,720,000 291,983,531 416,250 3,720,000 321,537,787

31.00 Post Balance Sheet Event (IAS-10):There was no significant event that has occurred between the balance sheet date and the date when the financial statements are authorized for issue by the Board of Directors except the following.

The Board of Directors of Meghna Life Insurance Company Limited in its 136th meeting held on July 22, 2019 has recommended for declaration of Cash dividend @ 20% to the shareholders for approval in the ensuing Annual General Meeting.

32.00 Miscellaneous: i) Figures have been rounded off to the nearest Taka. ii) Previous year's figures have been re-arranged where necessary to conform to the current year's presentation.

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Annexure - I

Particulars Amount AmountAssets:Loan on Mortgage of Properties 10,129,087Loan against life insurance Policy 31,057,041Loan on Meghna Life Securities & Investment Ltd. 50,000,000Investment 6,475,564,183Agent Balance 200,163,650Outstanding premium 1,801,741,073Interest, Dividend & Rents accrued but not due 403,245,149Advance, Deposit & Prepayments 1,519,475,059Sundry Debtors 336,832,491Cash & Bank Balance 7,343,117,198Amt. due from other persons or bodies carrying on Ins Business 470,431Motor Cycle & Cycle Loan 4,114,441Stock (Stamp & Stationary) 19,629,331Fixed Assets (at cost less depreciation) 190,000,050 18,385,539,184LIABILITIES :Estimated liabilities in respect of Outstanding claim 263,923,449 Amt. due to other person or bodies carrying on Ins. Business 6,191,773 Sundry Creditors 911,652,263 Premium Deposit 1,223,530 1,182,991,015Gross Fund 17,202,548,169 Less : Share holder’s Capital (Paid-Up-Capital) 335,219,130Life Insurance Fund including accretion of Tk. 1,232,711,985 as on 31.12.2018 16,867,329,039

MEGHNA LIFE INSURANCE CO. LIMITEDStatement of Life Insurance Fund

As at December 31, 2018



94




Annexure - II

Class of Assets Book Value Market Value RemarksLOANS : 91,186,128 91,186,128Loan on Mortgage Properties 10,129,087 10,129,087 Realizable ValueLoan of Insurer’s Policies within their Surrender Value 31,057,041 31,057,041 Realizable ValueLoan on Meghna Life Securities & Investment Ltd. 50,000,000 50,000,000 Realizable Value Investment : 6,475,564,183 6,839,293,042Statutory Deposit with Bangladesh Bank (BGTB) 15,000,000 15,000,000 Face ValueBangladesh Govt. Treasury Bond 4,363,271,141 4,727,000,000 Face ValueShares 982,509,607 982,509,607 Realizable ValueMeghna Life Securities & Investment Ltd. 396,000,000 396,000,000 At CostHouse Properties in Bangladesh 718,783,435 718,783,435 At cost Agent Balance 200,163,650 200,163,650 Book value Cash & Bank Balances : 7,343,117,198 7,343,117,198Fixed Deposit with Banks 5,243,720,000 5,243,720,000 Realizable ValueCash in hand, STD. & CD Account balance with Bank 2,099,397,198 2,099,397,198 Realizable Value Outstanding premium 1,801,741,073 1,801,741,073 Book ValueInterest, rent & Dividend accrued but not due 403,245,149 403,245,149 Realizable Value OTHER ASSETS : Advance, deposits & prepayments 1,519,475,059 1,519,475,059 Book ValueSundry Debtors 336,832,491 336,832,491 Book ValueAmount due from other persons or bodies carrying 470,431 470,431 Book Valueon Insurance businessMotor Cycle & Cycle Loan 4,114,441 4,114,441 Book ValueStamp, Printing & Stationary in hand 19,629,331 19,629,331 At costFixed Assets (at cost less depreciation) 190,000,050 190,000,050Depreciated Value Total: 18,385,539,184 18,749,268,043

FORM-"AA"Classified Summary of the Assets




95




Dated: Dhaka,22 July, 2019

DIRECTOR’S CERTIFICATE

As per Regulations contained in the First Schedule of the Insurance Act, 1938, as amended, as per Section 40-B of the said Act, we certify that:

1. The value of investment in shares have been taken at cost and the quoted value thereof mentioned wherever available.

2. The Values of all assets as shown in the Balance Sheet and as classified on Form "AA" annexed have been duly reviewed as at 31st December, 2015 and in our belief, the said assets have been set forth in the Balance Sheet at amounts not exceeding their realisable or market values under several headings as enumerated in the annexed form.

3. All expenses of management in respect of Life Insurance business transacted by the company in Bangladesh have been fully debited in the Life Revenue Account as expenses.

97


Dated, Dhaka,July 18, 2019

DIRECTORDMD & CFO CHIEF EXECUTIVE OFFICER

PARTICULARS NOTES 31-12-2018 31-12-2017CAPITAL & LIABILITIES Taka Taka

SHARE CAPITAL : AUTHORISED 60,000,000 Ordinary shares of Tk. 10 each 1.00 600,000,000 600,000,000

ISSUED, SUBSCRIBED & PAID UP 33,521,913 Ordinary Shares of Tk. 10 each 1.01 335,219,130 335,219,130 Fully Paid Up BALANCE OF FUNDS AND ACCOUNTS 2.00 16,856,336,510 15,663,659,482 Life Insurance Fund (Annexure-I)

LIABILITIES AND PROVISIONSEstimated Liabilities in respect of Outstanding claims whether due or intimated 3.00 263,923,449 178,406,210 Amount due to other persons or bodies carrying on Insurance Business. 4.00 6,191,773 2,805,593 Sundry Creditors 5.00 975,362,518 857,664,235 Premium Deposit 6.00 1,223,530 1,743,200 Non Controlling Interest 3,888,964 4,293,358 AFS Reserve 913,410 2,056,708 Long Term loan from MLICL - Retained earnings

TOTAL TAKA = 18,443,059,284 17,045,847,916

Consolidated Balance Sheet as atMEGHNA LIFE INSURANCE COMPANY

98

The annexed Notes 1 to 21 from an integral part of these financial statements.


CHAIRMANDIRECTOR

PROPERTY & ASSETS NOTES 31-12-2018 31-12-2017 Taka Taka LOANS: 7.00 41,186,128 35,857,905 On mortgage of properties 10,129,087 11,066,487 On Insurer's Policies within their Surrender Value 31,057,041 24,791,418 On Meghna Life Securities & Investment Ltd - - INVESTMENT : 8.00 6,356,190,697 6,254,317,730 Statutory Deposit (BGTB) 15,000,000 15,000,000 Bangladesh Govt. Treasury Bond 4,363,271,141 4,475,799,996 Shares 1,018,987,744 819,737,410 House Property (At Cost Less Depreciation) 718,783,435 623,580,324 Investment in DSE Membership 240,148,377 320,200,000 Agents Balance 200,163,650 231,198,413 Outstanding Premium 9.00 1,801,741,073 1,858,252,457 Interest, Dividend and Rents accrued but not due 10.00 403,245,149 308,955,977 Advance, Deposit and Prepayments 11.00 1,536,731,120 1,242,741,965 Sundry Debtors 12.00 495,219,229 434,126,918 CASH AND BANK BALANCES 7,392,171,321 6,512,870,506 Fixed Deposit with Banks 13.00 5,273,720,000 4,750,077,500 Short Term Deposit 1,609,664,838 1,140,660,525 Current Account 450,437,929 602,487,980 Cash in Hand 58,348,554 19,644,501 Amount due from other Persons or bodies carrying on Insurance Business. 14.00 470,431 470,431 Motor Cycle & Bi-Cycle Loan 15.00 4,114,441 4,457,234 Stamps in Hand 10,236,505 5,875,957 Printing & Stationary in Hand 9,392,826 9,614,562 Fixed Assets (At Cost Less Depreciation) 16.00 192,196,714 147,107,861 TOTAL TAKA = 18,443,059,284 17,045,847,916

31st December- 2018LIMITED AND IT'S SUBSIDIARY

99



DIRECTORCHIEF EXECUTIVE OFFICERDated, Dhaka,July 18, 2019

EXPENDITURE NOTES 31-12-2018 31-12-2017 Taka TakaClaims under Policies (Including Provision for Claims due or intimated) Less-Reinsurance: 17.00 2,599,080,571 2,717,297,423 By Death 73,537,797 85,864,592 By Survival 1,092,488,962 994,650,099 By Maturity 832,595,892 1,078,417,203 By Surrenders 20,778,511 10,311,194 Bonus to Policy Holder 579,679,409 548,054,335 EXPENSES OF MANAGEMENT : 567,875,830 579,447,085 (a) Commission to Insurance Agents (Less that on re-insurance Agents). 18.00 392,607,075 393,570,292 (b) Allowances and Commission (Other than Commission included in Sub-item (a) above 175,268,755 185,876,793

Salaries etc.(Other than to Agents and those included in item (b) above 413,191,703 443,693,825 Gratuity 7,311,232 12,147,700 Travelling and conveyance 9,319,808 11,323,252 Directors Fees 1,139,876 764,562 Auditors Fees 321,500 299,000 Actuarial Fees 667,500 661,250 Credit Rating Fees 214,000 - Medical Fees 2,357,465 2,263,381 Registration Renewal Fee 7,446,687 17,308,846 Advertisement & Publicity 2,699,249 6,465,724 Printing & Stationary 16,876,681 19,013,942 Policy Stamp Expenses 8,542,829 10,064,267 Revenue Stamps 3,694,074 3,542,459 Postage & Telegrams 4,418,040 4,259,023 Telephone, Telex and Fax 9,432,235 10,993,703 Electricity, Gas & Water Charges 9,643,671 11,291,001 Entertainment 6,827,801 8,514,918 Bank Charges 11,856,125 13,320,562 Conference 612,101 656,296 Development Expenses 9,770,205 10,231,124 Prizes and Contest 9,026,120 20,718,276 Repairs and Maintenance 18,302,329 20,161,488 Fuel and Lubricants 18,761,217 23,905,867 Subscription and Donation 2,565,656 5,867,997 Rents for offices belonging to and occupied by the company 888,480 888,480 Rents for other offices occupied by the company 77,492,512 82,960,321 Rates & Taxes 1,994,735 4,357,161 Legal and Professional Fees 371,004 1,279,852 Insurance Expenses 1,253,848 1,665,829 Newspaper and Periodicals 585,422 706,821 Cleaning & Washing Charges 327,070 389,276 Training Expenses 1,596,150 2,833,892 A.G.M Expenses 2,588,820 1,050,045 General Expenses 4,496,526 5,101,622 Contribution to Employess PF. 12,016,483 12,972,723 Employess Group Insurance Premium 363,671 427,568 678,972,825 772,102,053 OTHER EXPENSES: Dividend 67,243,826 79,914,074 Provision for Income Tax 65,622,889 102,403,322 Bad Debts Written off 73,290 20,000,000 Loss on Investment in Share 41,554,074 31,436 Loss on Foreign Exchange 15,530 6,961,285 Provision for Loss on fluctuation of share value 64,280,502 29,742,215 Depreciation 19.00 26,687,725 - Non Controlling Interest - 140,807 Balance of Fund at the end of the year as shown in the Balance Sheet 16,856,336,510 15,663,659,482

TOTAL TAKA = 20,967,743,572 19,971,699,182

Consolidated Revenue Account For theMEGHNA LIFE INSURANCE COMPANY

DMD & CFO

100


DIRECTOR CHAIRMAN

PARTICULARS NOTES 31-12-2018 31-12-2017 Taka Taka

Balance of Fund at the Beginning of the Year 15,634,617,054 14,689,895,605

Premium Less-Reinsurance 20.00 4,314,596,661 4,274,232,163 First year premium- (EB) 561,660,966 553,925,818 First year premium- (LB) 209,900,680 200,007,083 First year premium-(IB) 152,985,176 155,231,501 First year premium- (IKB) 57,015,169 59,634,886 First year premium-(SB) 44,939,574 48,815,304 1,026,501,565 1,017,614,592 Renewal Premium- (EB) 1,829,392,095 1,725,670,709 Renewal Premium- (LB) 622,700,470 672,207,285 Renewal Premium- (IB) 556,272,978 550,038,827 Renewal Premium-(IKB) 134,227,544 134,807,668 Renewal Premium-(SB) 127,708,230 155,183,823 3,270,301,317 3,237,908,312 Group Insurance 32,300,540 30,528,576 4,329,103,422 4,286,051,480 Less Re-Insurance Premium 14,506,761 11,819,317 Interest, Rent & Dividend 21.00 943,115,930 850,375,673 Profit on Sale of Shares - 25,613,611 Profit on Sale of Redemption of Investment - 47,258,310 Miscellaneous Receipts 137,226 63,831 Alteration Assignment Late Fees 11,126,558 13,636,512 Profit on Sale of other Assets - - Profit on Sale of Cars 4,741,194 6,360,604 Profit Commission Earned - 4,157,938 Income from dealer account - 10,871,309 Brokerage commission 14,080,264 25,720,490 Other Income 15,881,862 8,410,591 Retained earnings of MLSIL 29,042,429 15,102,545 Non Controlling Interest 404,394

TOTAL TAKA = 20,967,743,572 19,971,699,182

year ended 31st December- 2018LIMITED AND IT'S SUBSIDIARY

101




Meghna Life Insurance Company Limited And It's SubsidiaryConsolidated Statement of Changes in Shareholder's Equity


Particulars Share Share General Retained Other Total Non Capital Premium Reserve Earnings Reserve Controling Interest

Balance as on 01 January 2018 335,219,130 - - - - 335,219,130 4,293,358

Bonus Share for the Year ----- - - - - - - -

Add/less profit/loss during the year - - - - - - (404,394)

Balance as on 31 December 2018 335,219,130 - - - - 335,219,130 3,888,964

The annexed Notes 1 to 21 from an integral part of these financial statements.e signed on its behalf by:

Particulars Share Share General Retained Other Total Capital Premium Reserve Earnings Reserve


Bonus Share for the Year ----- 15,962,810 - - - - 15,962,810


Dated, Dhaka, July 18, 2019


102





31-12-2018 31-12-2017PARTICULARS Taka TakaA. CASH FLOWS FROM OPERATING ACTIVITIES :

Collection from Premium 4,370,588,375 3,906,674,225Operating Income - - Interest, dividend & rent received 898,998,156 947,973,912Other income received 11,263,784 17,858,281Payment for Claims (2,513,563,332) (2,739,496,691)Payment for Re-insurance, Management Expenses, (15,374,589) - Commission and others (1,499,886,549) (1,425,556,768)Income Tax paid/deducted (76,784,033) (95,700,799)Net Cash Flows from operating activities (A) 1,175,241,812 611,752,160

B. CASH FLOWS FROM INVESTING ACTIVITIES :Investment made (985,005,636) (1,840,033,117)Disposal of Investment 451,148,995 224,541,690Investment Income (33,514,966) 10,871,309Investment IPO (3,634,625) - Inierest Income 2,879,715 3,189,980Investment in Share - (12,143,461)Acquisition of Fixed Assets (70,296,785) (3,869,051)Loan against Policies Paid (73,719,838) (59,724,029)Loan against Policies realized - 6,191,817 7,746,537Investment in DSE Membership 80,051,623 - Other Loans realized 937,400 7,963,152Proceeds from sale of Fixed Assets 4,741,194 6,360,604Proceeds from sale of Investment 297,047,937 1,032,112,997Net Cash Flows from investing activities (B) (335,316,630) (610,839,928)

C. CASH FLOWS FROM FINANCING ACTIVITIES :Increase of Share Capital 50,000,000 15,962,810Dividend Paid (20,624,365) (11,463,989)Net Cash used in financing activities (C) 29,375,635 4,498,821

Net increase in Cash & Cash equivalents (A+B+C) 869,300,817 5,411,053Cash and Cash equivalents at the beginning of the year 6,512,870,506 6,507,459,453Cash and Cash equivalents at the end of the year 7,382,171,322 6,512,870,506

Meghna Life Insurance Company Limited And It's SubsidiaryConsolidated Cash Flow Statement For the ended December 31, 2018

Dated, Dhaka,July 18, 2019


103




104


1.00 Share Capital : Tk. 600,000,000 Authorized Capital: The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 600,000,000 600,000,000 Meghna Life Securities & Inv. Ltd. - - 600,000,000 600,000,000 1.01 Issued Subscribed and paid-up Capital: Tk. 335,219,130 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 335,219,130 335,219,130 Meghna Life Securities & Inv. Ltd. - - Total: 335,219,130 335,219,130 2.00 Life Insurance fund: Tk. 16,856,336,510 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 16,867,329,039 15,634,617,052 Meghna Life Securities & Inv. Ltd. (10,992,529) 29,042,430 Total: 16,856,336,510 15,663,659,482 3.00 Estimated Liabilities in respect of outstanding claims whether due of intimated: Tk. 263,923,449 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 263,923,449 178,406,210 Meghna Life Securities & Inv. Ltd. - - Total: 263,923,449 178,406,210 4.00 Amount due to other persons of bodies carrying on Insurance Business: Tk. 6,191,773 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 6,191,773 2,805,593 Meghna Life Securities & Inv. Ltd. - - Total: 6,191,773 2,805,593 5.00 Sundry Creditors: Tk. 975,362,518 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 911,652,263 819,037,006 Meghna Life Securities & Inv. Ltd. 63,710,255 38,627,229 Total: 975,362,518 857,664,235 6.00 Premium Deposite: Tk 1,223,530 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 1,223,530 1,743,200 Meghna Life Securities & Inv. Ltd. - - Total: 1,223,530 1,743,200 7.00 Loans Accounts: Tk. 41,186,128 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 41,186,128 35,857,905 Meghna Life Securities & Inv. Ltd. - - Total: 41,186,128 35,857,905

Meghna Life Insurance Company Limited And It's SubsidiaryConsolidated Notes to the Financial Statements

For the ended December 31,2018

105


8.00 Investment: Tk. 6,356,190,697 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 6,079,564,183 5,912,274,381 Meghna Life Securities & Inv. Ltd. 276,626,514 342,043,349 Total: 6,356,190,697 6,254,317,730 9.00 Outstanding Premium: Tk. 1,801,741,073 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 1,801,741,073 1,858,252,457 Meghna Life Securities & Inv. Ltd. - - Total: 1,801,741,073 1,858,252,457 10.00Interest, Dividend and Rents accrued but not due: Tk. 403,245,149 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 403,245,149 308,955,977 Meghna Life Securities & Inv. Ltd. - - Total: 403,245,149 308,955,97711.00 Advance, Deposit and Prepayments: Tk.1,536,731,120 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 1,519,475,059 1,229,538,987 Meghna Life Securities & Inv. Ltd. 17,256,061 13,202,978 Total: 1,536,731,120 1,242,741,96512.00 Sundry Debtors: Tk 495,219,229 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 336,832,491 358,289,637 Meghna Life Securities & Inv. Ltd. 158,386,738 75,837,281 Total: 495,219,229 434,126,918 13.00Fixed Deposit with Banks: Tk. 5,273,720,000 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 5,243,720,000 4,730,077,500 Meghna Life Securities & Inv. Ltd. 30,000,000 20,000,000 Total: 5,273,720,000 4,750,077,500 14.00Amount due from other persons or bodies Carrying on Insurance business: Tk. 470,431 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 470,431 470,431 Meghna Life Securities & Inv. Ltd. - - Total: 470,431 470,431

15.00Motor Cycle and Cycle Loan: Tk. 4,114,441 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 4,114,441 4,457,234 Meghna Life Securities & Inv. Ltd. - - Total: 4,114,441 4,457,234

106


16.00Fixed Assets (At Cost Less Depreciation) : Tk. 192,196,714 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 190,000,050 144,549,218 Meghna Life Securities & Inv. Ltd. 2,196,664 2,558,643 Total: 192,196,714 147,107,861 17.00Claims under Policies (Including Provision for Claims due or Intimated) Less-Reinsurance : Tk. 2,599,080,571 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 2,599,080,571 2,717,297,423 Meghna Life Securities & Inv. Ltd. - - Total: 2,599,080,571 2,717,297,423 18.00Commission to Insurance Agents (Less that on re-insurance Agents) : Tk. 392,607,075 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 392,607,075 393,570,292 Meghna Life Securities & Inv. Ltd. - - Total: 392,607,075 393,570,292 19.00 Depreciation : Tk. 26,687,725 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 26,311,674 29,261,537 Meghna Life Securities & Inv. Ltd. 376,051 480,679 Total: 26,687,725 29,742,216 20.00Premium Less-Reinsurance : Tk. 4,314,596,661 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 4,314,596,661 4,274,232,163 Meghna Life Securities & Inv. Ltd. - - Total: 4,314,596,661 4,274,232,163 21.00Interest, Rent & Dividend : Tk 943,115,930 The above balance is made-up as follows: Particulars 31-12-2018 31-12-2017 Meghna Life Ins. Co. Ltd 940,016,598 847,359,214 Meghna Life Securities & Inv. Ltd. 3,099,332 3,016,459 Total: 943,115,930 850,375,673

Dated, Dhaka, July 18, 2019 A. WAHAB & CO.CHARTERED ACCOUNTANTS


Annexure - I

Particulars Amount AmountAssets:Loan on Mortgage of Properties 10,129,087 Loan against life insurance Policy 31,057,041 Investment 6,356,190,697 Agent Balance 200,163,650 Outstanding premium 1,801,741,073 Interest, Dividend & Rents accrued but not due 403,245,149 Advance, Deposit & Prepayments 1,536,731,120 Sundry Debtors 495,219,229 Cash & Bank Balance 7,392,171,321 Amt. due from other persons or bodies carrying on Ins Business 470,431 Motor Cycle & Cycle Loan 4,114,441 Stock (Stamp & Stationary) 19,629,331 Fixed Assets (at cost less depreciation) 192,196,714 18,443,059,284LIABILITIES :Estimated liabilities in respect of Outstanding claim 263,923,449 Amt. due to other person or bodies carrying on Ins. Business 6,191,773 Sundry Creditors 975,362,518 Premium Deposit 1,223,530 Non Controlling Interest 3,888,964 AFS Reserve 913,410 1,251,503,644Gross Fund 17,191,555,640

Less : Share holder’s Capital (Paid-Up-Capital) 335,219,130Life Insurance Fund including accretion of Tk. 1,232,711,985 as on 31.12.2018 16,856,336,510

MEGHNA LIFE INSURANCE CO. LIMITEDConsolidated Statement of Life Insurance Fund




107




Annexure - II

Class of Assets Book Value Market Value Remarks

LOANS : 41,186,128 41,186,128 Loan on Mortgage Properties 10,129,087 10,129,087 Realizable ValueLoan of Insurer’s Policies within their Surrender Value 31,057,041 31,057,041 Realizable Value

Investment : 6,356,190,697 6,719,919,556 Statutory Deposit with Bangladesh Bank (BGTB) 15,000,000 15,000,000 Face ValueBangladesh Govt. Treasury Bond 4,363,271,141 4,727,000,000 Face ValueShares 1,018,987,744 1,018,987,744 Realizable ValueHouse Properties in Bangladesh 718,783,435 718,783,435 At CostMeghna Life Securities & Investment Ltd. 240,148,377 240,148,377 At cost Agent Balance 200,163,650 200,163,650 Book value

Cash & Bank Balances : 7,392,171,321 7,392,171,321 Fixed Deposit with Banks 52,737,250 52,737,250 Realizable ValueCollection in hand - - Book ValueCash in hand, STD. & CD Account balance with Bank 7,339,434,071 7,339,434,071 Realizable Value Outstanding premium 1,801,741,073 1,801,741,073 Book ValueInterest & Dividend accrued but not due 403,245,149 403,245,149 Realizable Value OTHER ASSETS : Advance, deposits & prepayments 1,536,731,120 1,536,731,120 Book ValueSundry Debtors 495,219,229 495,219,229 Book ValueAmount due from other persons or bodies carrying on Ins. Business 470,431 470,431 Book ValueMotor Cycle & Cycle Loan 4,114,441 4,114,441 Book ValueStamp, Printing & Stationary in hand 19,629,331 19,629,331 At costFixed Assets (At cost less depreciation) 192,196,714 192,196,714Depreciated Value Total: 18,443,059,284 18,806,788,143

Consolidated Form-"AA"Classified Summary of the Assets




108




Meghna Life Securities and Investment Limited(A subsidiary of Meghna Life Insurance Co. Ltd.)

109

111

INDEPENDENT AUDITOR'S REPORTTo the Shareholders of Meghna Life Securities and Investment Limited

Report on the Audit of the Financial Statements

SHIRAZ KHAN BASAK & CO. R. K. TOWER86, Bir Uttam C.R. Datta Road(312, Sonargaon Road). Dhaka-1205Tel :88-02-9635139,88-02-9673597Mobile:01552-638228, 01711-520770 01922-117370, 01757-941837E-mail:[email protected]

(Level-10)

C H A R T E R E D A C C O U N T A N T S

(An associate firm of D. N. Gupta & Associates)

Opinion:We have audited the financial statements of Meghna Life Securities and Investment Limited, which comprise Statement of Financial Position as at 31 December 2018, Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, Statement of Financial Position of the company as at 31 December 2018, and its financial performance and its Changes in Equity, Cash Flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code), Bangladesh Securities and Exchange Commission (BSEC) and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh (ICAB) Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The Company has invested in DSE Membership amount of Tk. 240,148,377.

At the time of conducting our audit of the financial statements of the Company have considered an invested loss the amount of Tk. 42,172,306.

Management has conducted impairment assessment and calculated recoverable value.

We have reviewed Management's analysis of this investment loss and the calculation.

We have tested the design and operating effectiveness of key controls focusing on the following:

Calculation of the loss from the investment;

Tested the supporting documents which is collected from DSE;

We also checked mathematical accuracy of the calculation process, recalculated the total loss incurred from the investment and also tested the investment apropriateness.

RiskLoss on Investment

Our response to the risk

See note no. 20.00 to the financial statements.

Other InformationManagement is responsible for the other information. The Annual Report is expected to be made available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal ControlsManagement is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, the Companies Act 1994, the Insurance Act 2010, the Insurance Rules 1958, the Securities and Exchange Rules 1987 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.


112

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other Legal and Regulatory Requirements

In accordance with the Companies Act, 1994, the Securities and Exchange Rules 1987 and the Financial Institutions Act, 1993, we also report that:

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if

such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;

in our opinion, proper books of accounts as required by law have been kept by the Company so far as it appeared from our examination of those books;

the expenditures incurred were for the purpose of the Company's business for the year;

taxes and other duties were collected and deposited in the Government treasury by the Company as per Government instructions found satisfactory based on test checking;

the consolidated balance sheet and consolidated profit and loss account together with the annexed notes dealt with by the report are in agreement with the books of account and returns;


113

(i)

(ii)

(iii)

(iv)

(v)

Ramendra Nath Basak, FCAPartnerShiraz Khan Basak & Co.Chartered Accountants

Dated: Dhaka, May 15, 2019

nothing has come to our attention that the Company has adopted any unethical means i.e. 'window dressing' to inflate the profit and mismatch between the maturity of assets and

based on our work as mentioned above under the auditor's responsibility section, the internal control and the compliance of the Company is satisfactory, and effective measures have

all other issues which in our opinion are important for the stakeholders of the Company have been adequately disclosed in the audit report.


114

(vi)

(vii)

(viii)

Particulars Notes 31-12-2018 31-12-2017

Operating Revenue 16.00 29,962,126 34,131,081 Less: Operating Expenses: 15,970,260 14,589,755Brokerage Expenses 17.00 2,126,884 3,936,059Financial Expenses 18.00 3,728,221 - Administrative Expenses 19.00 10,115,155 10,653,696 Operating Profit/(Loss) 13,991,866 19,541,326 Add: Other Income (30,415,634) 13,887,768Investment Income 20.00 (33,514,966) 10,871,309 Interest Income 21.00 3,099,332 3,016,459 Net Profit/(Loss) Before Tax (16,423,768) 33,429,094Income Tax Provision 15.01 (4,015,584) (9,348,403)Net Profit/(Loss) After Tax (20,439,352) 24,080,691 Provision for profit/(loss) on fluctuation of share value 913,410 2,056,708Total Comprehensive Income 913,410 2,056,708 Earning per share 22.00 (0.51) 0.60

Meghna Life Securities and Investment LimitedStatement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2018


115

The annexed notes from 1 to 22 form an integral part of these financial statements.

CHIEF EXECUTIVE OFFICER DIRECTORDIRECTOR CHAIRMAN

Subject to our separate report of even date annexed.

SHIRAZ KHAN BASAK & COCHARTERED ACCOUNTANTS

Shiraz Khan Basak & Co.Chartered Accountants

Balance as on January 01, 2018 400,000,000 29,335,787 - 429,335,787

Net Profit/(Loss)after tax for the year -(20,439,352) - (20,439,352)

Dividend Paid -(20,000,000) - (20,000,000)

unrealised Gain on investment in share - - 913,410 -

Balance as on December 31, 2017 400,000,000(11,103,565) 913,410 388,896,435

Meghna Life Securities and Investment LimitedStatement of Changes in Equity

For the year ended December 31,2018



116

Particulars Share Retained Unrealised Total Capital earnings Gain/(Loss) Equity

Particulars Share Retained Unrealised Total Capital earnings Gain/(Loss) Equity

Balance as on January 01, 2017 400,000,000 15,255,096 - 415,255,096

Net Profit/(Loss)after tax for the year - 24,080,691 - 24,080,691

Dividend Paid - (10,000,000) - (10,000,000)

unrealised Gain on investment in share - - 2,056,708 2,056,708

Balance as on December 31, 2017 400,000,000 29,335,787 2,056,708 431,392,495

Amount in Taka






Particulars Notes 31-12-2018 31-12-2017ASSETSNon -Current Assets: 279,023,178 344,801,992Property, Plant & Equipment -at cost less accumulated depreciation 2,196,664 2,558,643Investment in DSE Membership 4.00 240,148,377 320,200,000Investment in Share-at Market Value 5.00 32,843,512 21,843,349Investment in IPO Share 6.00 3,634,625 - Security Deposit 200,000 200,000

Current Assets: 224,496,922 125,217,732 Advance, Deposit & Prepayments 7.00 17,056,061 13,002,978 Accounts Receivable 8.00 158,386,738 75,837,281 Investment in FDR 9.00 30,000,000 20,000,000Cash & Cash Equivalents 10.00 19,054,124 16,377,472Total Assets 503,520,100 470,019,724EQUITY AND LIABILITIESShareholders' equity 389,809,845 431,392,495Share Capital 11.00 400,000,000 400,000,000Retained Earnings 12.00 (11,103,565) 29,335,787Provision for profit/(loss) on flactuation of share value 5.01 913,410 2,056,708

Non Current Liabilities: 50,000,000 - Long Term Loan From MLICL 13.00 50,000,000 -

Current Liabilities: 63,710,255 38,627,229Trade and Other Payable 14.00 40,527,140 19,459,698Provision for Tax 15.00 23,183,115 19,167,531

Total Equity and Liabilities 503,520,100 470,019,724Off-Balance Sheet Items Customers Investment in Shares-at cost 1,314,649,776 1,236,897,029Net Asset Value per Share 23.00 9.75 10.78

Meghna Life Securities and Investment LimitedStatement of Financial Position

As at 31 December 2018



117



Schedule-A



Particulars Notes 31-12-2018 31-12-2017A. Cash in Flow from Operating Activities Collection from customers: Cash received from interest and others 29,742,509 34,304,602 Cash paid for Operating and Management expenses (15,374,589) (8,362,859)Advance Income tax paid (4,053,083) (5,800,022)Net Cash flow from operating activities 10,314,837 20,141,721

B. Cash Flow from Investing Activities:

Acquisition of property, plant and equipment (PPE) (14,072) (470,363)Loan paid to customer (Against margin Loan) (61,262,398) (53,095,262)Investment in DSE Membership 80,051,623 - Investment Loss (33,514,966) 10,871,309 Investment IPO (3,634,625) - Interest Income 2,879,715 3,189,980 Investment of FDR (10,000,000) 45,000,000 Investment in Share (Dealer Account) (12,143,461) (12,885,496)Net cash flow from/(used in) investing activities (37,638,184) (7,389,832)

C. Cash Flow from Financing Activities: Long Term Loan From MLICL 50,000,000 - Dividend Paid (20,000,000) (10,000,000)

Net cash flow from/(used in) Financing Activities 30,000,000 (10,000,000)

Net Increase(Decrease) in cash and cash equivalents 2,676,653 2,751,889 during the year (A+B+C)Cash and cash equivalents at beginning of the year 16,377,471 13,625,583 Cash and cash equivalents at end of the year 19,054,124 16,377,471 Net operating cash flow per share (Restated) 24.00 0.26 0.50

Meghna Life Securities and Investment LimitedStatement of Cash Flows

For the year ended 31 st December-2018


118






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1.00 General:1.01 Background of the Company:

Meghna Life Securities & Investment Limited was incorporated on the April 18,2013 under the Companies Act,1994 as a public Company Limited by shares. It is a Subsidiary Company of Meghna Life Insurance Co. Limited. Meghna Life Securities And Investment Limited is a TREC holder of Dhaka Stock Exchange Limited bearing No.245. The registered office of the company is situated at Biman Bhabon,100 Motijheel C/A (5th Floor) Dhaka-1000, Bangladesh.

1.02 Principal Activities and Nature of Operation: The Principal objectives of the Company are to carry on the business of stock brokers and any business as permissible for a broker and dealer house duly licensed by the Bangladesh Securities and Exchange Commission (BSEC) and other service as mentioned in the Memorandum and Articles of association of the Company. The Company Commenced its commercial activities from September 30,2014.

2.00 Basis of Preparation of Financial Statements: 2.01 Statement of Compliance:

The Financial Statements of Meghna Life Securities And Investment Limited have been prepared in accordance with:a) Bangladesh Financial Reporting Standards (BFRSs); b) Bangladesh Accounting Standards (BASs); c) The Company Act 1994; d) The Income Tax Ordinance 1984; e) The Vat Act 1991; f) Securities and Exchange Commission ( Stock dealer, broker and authorized representative) Rules 2000;g) Bangladesh Securities and Exchange Commission Rules -1987; and h) Other applicable Laws and regulations relevant in Bangladesh.

2.02 Components of Financial StatementsThe presentation of these financial statements are in accordance with the guidelines provided by IAS 1, "Presentation of Financial Statements". The Financial Statements Comprise of: (a) Statement of Financial Position. (b) Statement of Profit or Loss and other Comprehensive Income. (c) Statement of Changes in Equity. (d) Statement of Cash Flows. (e) Notes comprising a summary of significant accounting policies and explanatory information.

2.03 Reporting Period The Financial Statements cover twelve months period from January 01, 2018 to December 31, 2018.

Meghna Life Securities and Investment LimitedNotes to the Financial Statements

As at and for the year ended 31st December 2018

120


2.04 Use of Estimates and Judgments The preparation of financial statements require management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and for contingent assets and liabilities that require disclosure, during and at the date of the financial statements.Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on going basis. Any revision of accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. In particular, the key areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements include inventory valuation, accrued expenses, Property, Plant and Equipment, Advance, Deposits and pre-payments, Trade Receivables, Trade Payables, Income Tax Liability other payables.

2.05 Reporting Currency and Level of Precision The figures in the financial statements represent Bangladesh Currency (Taka), which have been rounded-off to the nearest Taka.

2.06 Going Concern It has been reviewed by the management that there was no significant going concern threat to the operation of the company. The company has adequate resources to continue its operations for foreseeable future.

2.07 Comparative InformationPrevious year's figures have been re-arranged/re-classified, where necessary, to conform to change in presentation in the current year.

3.00 Significant Accounting PoliciesThe accounting principles and policies in respect of material items of financial statements set out below:

3.01 Revenue Recognition a) In compliance with the requirements of BAS 18 : Revenue,operating revenue is recognised at the time of service provided to customers and such amount is received with Bank. b) Other operating revenue is recognised when realised or realisable and earned.

3.02 Dividend as Bonus Share: Dividend receipt as Bonus Share are recorded into Investment in Shares without value which are increased only the Number of Invested Shares.

3.03 Property, Plant and Equipment 3.03.1Recognition and Measurement

Property, Plant and Equipment are accounted for according to BAS 16 "Property, Plant and Equipment" at Historical cost less cumulative depreciation except land and land development which consider at revalued and includes expenditures that are directly attributable to the acquisition of the assets. The cost of self constructed/installed assets includes the cost of materials, direct labor and any other costs directly attributable to bringing the assets to the working condition for its intended use and cost of dismantling and removing the items and restoring the site on which they located.

121


3.03.2Depreciation policy Depreciation on Property, Plant & Equipment is charged to profit on reducing balance method.Property plant & equipments are depreciated for the full month for assets acquired during first half of the month and no depreciation is charged for assets acquired during second half of the month. The rate of depreciation varies according to the estimated useful lives of the class of property, plant & equipment, as follows :Depreciation rates are consistently followed and as follows:

Category RateAir Conditioner 15%Furniture & Fixture 10%Computer & Software 20%Office equipment 15%Office Renovation 10%Installation of telephone & internet 15%Telephone 15%

3.04 Cash and Cash EquivalentsCash & Cash Equivalents consist of cash in hand and cash at banks that are readily convertible into cash.

3.05 Statement of Cash FlowsStatement of Cash Flows is prepared principally in accordance with BAS-7. Cash Flows have been presented under direct method as required by the Securities and Exchange Rules 1987.

3.06 Financial InstrumentsFinancial Instruments are accounted for according to BAS 39 ‘Financial instruments: Recognition and measurement’ at Fair Value.Non- derivative financial instruments comprise of accounts and other receivables, cash & cash equivalents and other payables are shown at transaction cost.

3.07 Accrued Expenses and Other PayablesLiabilities are recognized for the services received, whether invoiced or not for those services. Payables are not interest bearing and stated at their nominal value.

3.08 Taxation3.08.1 Current Tax:

Current tax is the expected tax payable on the taxable income for the financial year, using tax rates enacted or subsequently enacted after the reporting date and any adjustment to tax payable in respect of previous years. Provision for taxation is calculated on the basis of applicable current tax rate and incompliance with Finance Act, 2017.

3.08.2 Deferred Tax: The Company did not recognize any deferred tax.

3.08.3 Advance Income Tax The Amount of Advance Income Tax are mainly deduction of tax at source by bank on profit arisen from bank deposits (SND).

3.09 Provisions As per “BAS 37: Provisions, Contingent Liabilities and Contingent Assets”, a provision is recognized on the date of statement of financial position if, as a result of past event, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit will be required to settle the obligation.

3.10 Earning Per Share (EPS) This has been calculated in compliance with the requirements of BAS 33 “Earnings Per share” dividing basic earning by average number of shares outstanding at the end of the period.

122


123

4.00 Investment in DSE Membership This is made up as follows: Particulars 31-12-2018 31-12-2017 Opening Balance 320,200,000 320,200,000 Less: 25% Share Sale 80,051,623 - 240,148,377 320,200,000

As per Demutualization Act 2013, DSE have to handed over it 25 percent stake to strategic partners followings the share purchase agreement (SPA) executed between Dhaka Stock Exchange (DSE) and its strategic investors namely Shenzhen Stock Exchange (SZSE) and Shanghai Stock Exchange (SSE). we have completed the sale of 25% ( Twenty Five percent ) DSE share amounting 1,803,777 out of its total 7,215,106 shares. We have transferred share in value Tk.37,879,317/=(1,803,777@Tk21) Which we acquired at cost of Tk 80,050,000/= (1,803,[email protected]).Here we have realized loss Tk. 42,172,306/= in Statement of Profit or Loss & Other Comprehensive Income.

The above balance represents the cost of membership of Dhaka Stock Exchange.5.00 Investment in Share-at Market Value This is made up as follows: 31-12-2018 31-12-2017 List of Financial Instruments Cost Market Value Cost Market Value ACI 5,504,468 4,726,638 3,946,218 4,552,020 ALARABANK - - 1,250,000 1,205,000 ALIF - - 1,020,000 1,004,000 BSC 4,024,041 3,510,000 1,031,403 934,000 CITY BANK 3,629,250 3,322,000 - - DBH 1,201,285 1,423,400 1,201,285 1,496,000 DELTA SPINN 825,000 620,000 - - GPHISPAT - - 999,050 916,650 JAMUNABANK - - 1,382,024 1,320,000 JUTESPINN - - 93,225 112,287 KEYACOSMET - - 72,000 73,800 RENATA 1,784,060 2,363,112 1,690,930 1,939,245 SQURPHARMA 1,060,695 1,461,904 1,060,695 1,622,175 BBSCABLES 46,180 588,008 46,180 561,267 BIFC 270,311 219,895 - - IBP 29,440 100,702 - - INTRACO 43,967 123,709 - - KTL 109,776 305,498 - - METROSPIN 3,490,978 2,964,560 - - MJLBD* - - 1,182,288 1,091,000 MLDYEING 60,400 215,266 NAHEEACP 20,405 39,946 63,772 502,570 QUEENSOUTH 4,882 20,460 QSMDRYCELL - - 2,479,594 2,325,000 RAHIMTEXT 5,642,500 5,006,375 - - SILVAPHL 91,930 276,709 - - SKTRIMS 50,420 256,780 - SAIFPOWER - - 37,500 106,240 SHEPHERD - - 56,540 177,242 STANDBANKL - - 350,784 393,713 SONALIPAPR 3,847,880 4,750,000 - - SSSTEEL 101,180 101,180 - - WMSHIPYARD - - 163,254 202,141 VFSTDL 91,055 447,372 - - Total 31,930,10232,843,512.30 18,126,740 20,534,349


124

5.01 The difference of market value and cost of the Shares as at 31st December 2018 is Tk. 913,410.05 which is recognized as unrealised gain on Investment in Share.

31-12-2018 31-12-2017 a) Investment in securities at market price as on 31 Dec. 2018 32,843,512 21,843,349 b) Investment in securities at cost price as on 31 Dec. 2018 31,930,102 19,786,640 c) Total unrealised gain/(loss) as on 31 Dec. 2018 913,410 2,056,7096.00 Investments in IPO Share: This is made up as follows: List of Financial Instruments QTY Rate Allotted value Marginable GENEXIL 10,466 10 104,660 EKCL 41,780 45 1,880,100 RUNNERAUTO 14,411 75 1,080,825 ADNTL 18,968 30 569,040 Total 85,625 3,634,6257.00 Advance, Deposit & Prepayments: Particulars Notes 31-12-2018 31-12-2017 Advance against Office Rent, Salaries & Allowances 237,499 200,000 Advance Income Tax 7.01 16,818,562 12,802,978 Total 17,056,061 13,002,9787.01 Advances Income Tax: This is made up as follows:

Particulars Notes 31-12-2018 31-12-2017 Opening Balance 12,802,978 7,002,956 Add: TDS against Bank Interest 287,972 322,920 TDS against Brokerage Commission 2,195,170 4,024,561 TDS against Cash Dividend 89,421 9,520 TDS against Dividend Income 1,443,021 1,443,021 Closing Balance 16,818,562 12,802,9788.00 Accounts Receivable: This is made up as follows:

Particulars Notes 31-12-2018 31-12-2017 Interest Receivable 21.00 871,096 651,479 Receivable DSE 11,216,767 - Receivable from Clients 146,298,875 75,185,802 Total 158,386,738 75,837,2819.00 Investment in FDR: This is made up as follows:

Particulars 31-12-2018 31-12-2017 AB Bank Ltd. 10,000,000 10,000,000 AB Bank Ltd. 5,000,000 - AB Bank Ltd. 5,000,000 - Modhumoti Bank Ltd. 10,000,000 10,000,000 Total 30,000,000 20,000,000

125

10.00Cash & Cash Equivalents This is made up as follows:

Particulars Notes 31-12-2018 31-12-2017 Cash in Hand 493,491 107,433 Balance at Bank 10.01 18,560,633 16,270,039 Total: 19,054,124 16,377,472

The cash in hand Tk. 493,491 has been Certified by the management.

10.01Cash at Bank This is made up as follows:

Particulars A/C No. 31-12-2018 31-12-2017 Name of the Bank: Balance at City Bank (SND) 3101434143001 10,029,813 3,479,084 Balance at City Bank 3101434143002 6,846,780 11,521,862 Balance at City Bank 3101434143003 7,310 7,796 Balance at City Bank 3101434143004 798,521 1,260,397 Balance at City Bank (Public Issue Application) 1101434143001 878,210 900 Total: 18,560,633 16,270,039

The above balances are in agreement with the respective bank statements.

11.00Share Capital This is made up as follows:

Authorized Capital 31-12-2018 31-12-2017 125,000,000 ordinary shares of TK. 10 each 1,250,000,000 1,250,000,000

The Authorized Capital of the Company is Tk.1,250,000,000 only divided by 125,000,000 Ordinary Shares of Tk. 10 each.

Issued, Subscribed & Paid-up Capital 400,000,000 400,000,000Paid-up capital of the company stands at Tk. 400,000,000 divided in to 40,000,000 Ordinary Shares of Tk. 10 each break down as follows-

Total Share Holding Position is as below:

Meghna Life Insurance Co. Ltd. 39,600,000 99.00% 396,000,000 396,000,000Mr. Nizam Uddin Ahmed 55,000 0.14% 550,000 550,000Ms. Hasina Nizam 59,500 0.15% 595,000 595,000Mr. Nasir Uddin Ahmed 59,500 0.15% 595,000 595,000Mr. Riaz Uddin Ahmed 59,500 0.15% 595,000 595,000Ms. Sharmin nasir 55,000 0.14% 550,000 550,000Ms. Dilruba Sharmin 55,000 0.14% 550,000 550,000Mr. Rashed Uddin Ahmed 55,000 0.14% 550,000 550,000Mr. Towha-Bin-Kabir 500 0.00% 5,000 5,000Mr. Moin Uddin 500 0.00% 5,000 5,000Mr. Abdur Rahman 500 0.00% 5,000 5,000

Total: 40,000,000 100% 400,000,000 400,000,000

Name of Shareholders No. ofShare

% Shareholding 31-12-2018 31-12-2017


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12.00Retained Earnings This is made up as follows: Particulars 31-12-2018 31-12-2017 Opening Balance 29,335,787 15,255,096 Net Profit After Tax (20,439,352) 24,080,691 Dividend Paid (20,000,000) (10,000,000) Closing Balance (11,103,565) 29,335,787 13.00Long Term Loan: The above balance is made up as follows: Particulars 31-12-2018 31-12-2017 Long Term Loan from (MLICL): 50,000,000 - Total: 50,000,000 - 14.00Trade and Other Payables: The above balance is made up as follows : Particulars Notes 31-12-2018 31-12-2017 Payable to DSE - 357,731 Payable to Clients 30,692,102 10,970,732 Payable to Meghna Life Insurance Co. Ltd 8,726,516 7,947,237 With holding Income Tax of Employees 2,770 25,995 With holding Income Tax of Suppliers 190,502 45,104 Payable for Audit Fee 40,250 40,250 Provision for expenses - 72,649 Public Issue Application A/C (blocked) 875,000 - Total: 40,527,140 19,459,698 15.00Provision for Tax: This is made up as follows: Particulars Notes 31-12-2018 31-12-2017 Opening Balance 19,167,531 9,819,128 Add. Current year's Tax Provision 15.01 4,015,584 9,348,403 Total: 23,183,115 19,167,531

15.01Current Year's Tax Provision: The above balance is made up as follows : Particulars 31-12-2018 31-12-2017 Tax on operating income 2,195,170 6,840,101 Tax on dividend income 1,532,442 1,452,541 Tax on interest income 287,972 1,055,761 Total: 4,015,584 9,348,403 16.00Operating Revenue This is made up as follows:

Particulars 31-12-2018 31-12-2017 Brokerage Commission 14,080,264 25,720,490 BO Account Opening Fees 127,500 106,000 Annual BO Account Maintenance Fees 255,500 233,500 Income from other sources 16.01 1,725,454 121,207 Interest on Margin Loan 13,765,598 7,946,849 Income from IPO Application 7,810 3,035 Total: 29,962,126 34,131,081


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16.01 Income from other sources: This is made up as follows:

Particulars 31-12-2018 31-12-2017 Sale of Scrap goods 1,450 - OTC Share Trading 1,724,004 - Total 1,725,454 -

17.00Brokerage Expenses: This is made up as follows:

Particulars 31-12-2018 31-12-2017 Howla Charge - 50 Laga Charge 1,097,585 2,009,356 Lan/Wan/Networking/Link 396,550 383,920 CDS Charges & Fees 539,369 1,435,865 Bank & BACH charges 93,380 106,868 Total 2,126,884 3,936,059

18.00Financial Expenses: This is made up as follows:

Particulars 31-12-2018 31-12-2017 Interest on Loan from MLICL 3,728,221 - Total 3,728,221 - 19.00Administrative Expenses: This is made up as follows:

Particulars Notes 31-12-2018 31-12-2017 Salaries & allowances 4,168,349 3,607,194 Festival bonus 195,952 201,625 Board meeting fees 397,876 348,312 Office Rent 2,071,200 2,200,600 Entertainment expenses 359,056 415,534 Fuel & Lubricant 110,000 125,305 DSE charges 51,602 141,763 Gifts & tips 4,850 1,000 Electricity, Gas & Water Charges 548,442 599,845 License, Reg. & Renewal Expenses 111,845 175,115 Software maintenance fees 60,000 215,000 TWS Installation fees - 13,500 Telephone Expenses 55,010 46,404 Printing & stationeries 176,012 185,074 Stamp expenses 930 8,134 Electrical expenses - 23,910 Other Expenses 3,780 15,335 Cleaner Wages 12,000 38,000 Audit Fee 40,250 40,250 Insurance premium - 11,729


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Business Promotion Expenses 953,226 1,551,891 Repair & maintenance 58,788 84,148 Office Supplies - 43,099 Photocopy expenses 7,497 3,642 Postage & courier 175 50 Travelling & conveyance 48,850 38,385 Newspaper, Books & periodicals 12,210 10,432 Website development expenses 10,450 - Annual account maint. Fees for BO renewal 178,500 - AGM Expenses 68,035 - Off day allowance - 6,150 Advertisement Exp 33,120 11,100 R & M Computer - 9,392 Donation 1,100 1,100 Depreciation Schedule-A 376,051 480,679 Total 10,115,155 10,653,696

20.00Investment Income This is made up as follows:

Particulars 31-12-2018 31-12-2017 Gain from sale of share 994,966 3,608,603 Dividend Income 7,662,374 7,262,706 Loss on DSE Share Sale (42,172,306) - Total (33,514,966) 10,871,309

21.00Interest Income This is made up as follows:

Particulars Notes 31-12-2018 31-12-2017

Interest from STD A/C The City Bank (A) 1,374,715 810,106 Interest from FDR (B) FDR Interest AB Bank Ltd. 755,000 159,375 FDR Interest Modhumoti Bank Ltd. 750,000 543,499 FDR Interest The City Bank Ltd. - 1,677,000 1,505,000 2,379,874 Less: Previous year accrued Interest 651,479 825,000 853,521 1,554,874 Add: Accrued Interest during the year 8.00 871,096 651,479

Net FDR Interest 1,724,617 2,206,353

Total Bank Interest (A+B) 3,099,332 3,016,459

22.00Earning per Share This is made up as follows:

Particulars 31-12-2018 31-12-2017 Net Profit/(Loss) for the year (20,439,352) 24,080,691 Number of Ordinary Shares 40,000,000 40,000,000 Earning Per Share (EPS) (0.51) 0.60


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23.00Net Asset Value (NAV) Per Share This is made up as follows:

Particulars 31-12-2018 31-12-2017 Total Assets 503,520,100 470,019,724 Less: Total Liabilities (113,710,255) (38,627,229) Net Assets Value 389,809,845 431,392,495 Total Number of Ordinary Shares 40,000,000 40,000,000 Net Asset Value (NAV) Per Share 9.75 10.78

24.00Net Operating Cash Flow per Share (NOCFPS) This is made up as follows:

Particulars 31-12-2018 31-12-2017 Net Cash Flow from Operating Activities 10,314,837 20,141,721 Total Number of Ordinary Shares 40,000,000 40,000,000 Net Operating Cash Flow per Share (NOCFPS) 0.26 0.50

25.00Event after Statement of Financial Position DateThe Board of Directors has approved the Financial Statements in its 32nd meeting held on May 22, 2019 and recommended for the payment of no dividend on paid up capital out of the surplus available for distribution at the end of the year 2018, which is subject to the approval of shareholders in the ensuring Annual General Meeting of the Company.

26.00 Related Party Disclosures During the year the company did not carry out any transaction with its related parties.





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1.

2.

....................................(Authorized Signature)

Meghna Life Insurance Co. Ltd.

RevenueStamp ofTk. 20.00

.......................................................Signature of Shareholder’s/Proxy

Shareholders' Attendance Slip

(Authorized Signature)Meghna Life Insurance Co. Ltd.

Name of Proxy ..................................................................................................

Note:

BO ID No. BO ID No.

(Signature of Proxy) (Signature of Shareholder)

Proxy Form

MEGHNA LIFE INSURANCE COMPANY LIMITEDRegistered Office: Biman Bhaban (2nd Floor), 100, Motijheel C/A., Dhaka-1000.

I/We ....................................................................................................................... of ..............................................

........................................................................................................................... being a Member’s of Meghna Life

Insurance Company Limited a holder of .................. shares hereby appoint Mr./Ms. ..............................................

.............................................. of ................................................................................................................................

.............................................. or (failing him/her) Mr./Ms ..........................................................................................

of ..................................................................................................................................... as my/our proxy to attend

and vote for me/us and on my/our behalf at the 23rd Annual General Meeting of the Company to be held on

Thursday 26th Sept, 2019 at 10:30 a.m. in the 'Multipurpose Hall' (ground floor), Institution of Diploma

Engineers, Bangladesh, 160/A Kakrail VIP Road, Dhaka-1000 and adjournment thereof or at any ballot to be taken in consequence thereof.As witness my/our hand this .................................... Day of ....................... 2019.

I/We hereby record my/our attendance as a holder of ........................ shares at the 23rd Annual General Meeting of the

Company being held on Thursday 26th Sept, 2019 at 10:30 a.m. in the 'Multipurpose Hall' (ground floor), Institution of Diploma Engineers, Bangladesh, 160/A Kakrail VIP Road, Dhaka-1000

Name of Shareholder(s) ...................................................................................

BO ID No.

A member entitled to attend and vote in the AGM may appoint a PROXY (such proxy shall be a member of the Company) to attend and vote on his/her behalf. The Proxy From, duly stamped, must be deposited at the Head Office of the Company, not later than 72 (Seventy Two) hours before the time fixed for the meeting.

Signature of shareholder should agree with the Specimen Signature registered with the Company and Depository Register.

Shareholders Notes

131

Shareholders Notes

132

23rd annual report- 2018

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