growth with stability - insurance in pakistan€™s economy witnessed a gdp growth of 5.28% during...

GROWTH WITH STABILITYAdamjee aspires to grow without compromising on outstanding performance to its customers. The journey to success is riddled with risks and dangers, that only the strongest and most experienced of the entities can make through. Adamjee’s strength is represented by a tree, the roots of which nourish the tree with values learned from experience. The branches of this tree spread out to explore every possible avenue that leads to Adamjee’s success.

CONTENTS

04

06

08

09

12

43

46

76

Vision / Core Values

Company Information

Directors’ report to the members onUnconsolidated Condensed Interim FinancialInformation

Directors’ report to the members onUnconsolidated Condensed Interim FinancialInformation (Urdu)

Unconsolidated Condensed Interim FinancialInformation

Directors’ Report on Consolidated CondensedInterim Financial Information

Consolidated Condensed Interim FinancialInformation

Condensed Interim FinancialInformation - Window Takaful Operations

VISIONOur will is to explore, innovate and differentiate.

Our passion is to provide leadership to insurance industry.

CORE VALUES• Integrity• Humility• Fun at the Workplace• Corporate Social

Responsibility

6 FIRST QUARTER REPORT

BOARD OF DIRECTORS Umer Mansha ChairmanFredrik Coenrard de Beer Director (Resigned Feb. 23, 2018)Ibrahim Shamsi DirectorImran Maqbool DirectorMuhammad Anees DirectorMuhammad Umar Virk DirectorShaikh Muhammad Jawed DirectorMuhammad Ali Zeb Managing Director & CEO

ADVISOR Mian Muhammad Mansha AUDIT COMMITTEE Muhammad Umar Virk ChairmanIbrahim Shamsi MemberShaikh Muhammad Jawed MemberUmer Mansha Member

ETHICS, HUMAN RESOURCE AND REMUNERATION COMMITTEE Muhammad Anees Chairman Ibrahim Shamsi Member Muhammad Ali Zeb Member Umer Mansha Member

INVESTMENT COMMITTEE Umer Mansha ChairmanImran Maqbool MemberMuhammad Ali Zeb MemberMuhammad Asim Nagi Member

COMPANY SECRETARY Tameez ul Haque F.C.A

CHIEF FINANCIAL OFFICER Muhammad Asim NagiA.C.A

COMPANY INFORMATION

7ADAMJEE INSURANCE

EXECUTIVE MANAGEMENT TEAMMuhammad Ali ZebMuhammad Asim NagiAdnan Ahmad ChaudhryAsif JabbarMuhammad Salim Iqbal

AUDITORSM/S KPMG Taseer Hadi & CompanyChartered Accountants351, Shadman - 1,Main Jail Road,Lahore-54000, Pakistan

SHARIAH ADVISORMusti Muhammad Hassan Kaleem

SHARES REGISTRARCentral Depository Company Pakistan LimitedCDC House, 99-B, Block B, S.M.C.H.S.,Main Shahrah-e-Faisal, Karachi – 74400.Ph: (92-21) 111-111-500Fax: (92-21) 34326031

BANKERSAbu Dhabi Commercial BankAskari Bank LimitedBank Alfalah LimitedBank Al-Habib LimitedDubai Islamic Bank Pakistan LimitedEmirates Islamic BankFINCA Microfinance Bank LimitedHabib Bank LimitedHabib Metropolitan Bank LimitedKhushali Bank LimitedMCB Bank LimitedMCB Islamic Bank LimitedMeezan Bank LimitedMobilink Microfinance Bank LimitedNational Bank of PakistanSamba Bank LimitedSoneri Bank LimitedThe Punjab Provincial Cooperative Bank LimitedUnited Bank LimitedZarai Taraqiati Bank Limited

REGISTERED OFFICE4th Floor, 27-C-III, Tanveer Building, M M AlamRoad, Gulberg –III, Lahore -54000, PakistanPh: (92-42) 35772960-79 , Fax: (92-42) 35772868Email: [email protected],Web: www.adamjeeinsurance.com


Directors’ Report to the Members on UnconsolidatedCondensed Interim Financial InformationFor the Quarter Ended 31 March 2018

31 March 2018

Rupees in thousand

(Unaudited)

31 March 2017

On behalf of the Board, we are pleased to present the unconsolidated condensed interim financial information of the Company for the first quarter ended 31 March 2018.

Financial Highlights

The highlights for the period under review are as follows:

Performance Review

The Gross Premium of the Company decreased by 21% while the Net Premium increased by 8.3%. Overall underwriting results have improved by 34% over the corresponding period of last year with Motor line of business leading the underwriting performance with an underwriting profit of Rs. 272,741 thousands. The profit before tax and profit after tax have decreased by 2.2 % and 2.6 % respectively due to decrease in investment income in the current period.

Window Takaful Operations

The written contribution and deficit of Participants’ Takaful Fund amounted to Rs. 262,412 thousands (2017: Rs. 248,055 thousands) and Rs. 5,616 (2017: Rs. 6,439 thousands), respectively. Most of the growth in contribution written came from the Motor and Health line of business which contributed 63% and 18%, respectively to the total contribution written in this quarter. Window Takaful Operations profit before tax increased by 33% amounting to Rs. 19,810 thousands for the period ended 31 March 2018 (2017: Rs. 14,880 thousands).

Future Outlook

Pakistan’s economy witnessed a GDP growth of 5.28% during the year 2017 and the insurance sector grew at an average annual rate of around 13% on compound basis . Considering the steady growth and increased insurance penetration in the past in the last five yearsfive years, it can be inferred that the sector has been performing healthier.

We see a stable and positive regulatory regime going forward to enable the insurance industry to grow faster and increase its penetration across the country. Continued growth is expected in all lines of business in the insurance industry. Also, in view of the opportunities created through CPEC, the Company sees a favorable growth environment in the foreseeable future and is well positioned to tap into these opportunities.

Acknowledgements

We thank our shareholders, valued customers, employees and development staff for their consistent support that has helped Adamjee Insurance emerge as one of Pakistan’s leading insurance company. We are also grateful to the Insurance Division, the Securities and Exchange Commission of Pakistan for their continued guidance and assistance.

Gross Premium Written 3,694,166 4,678,638Net Premium Revenue 3,147,195 2,906,192Underwriting results 571,013 426,027Investment Income 532,928 675,848Profit before tax 950,914 973,086Profit after tax 663,399 681,160 Earnings per share (Rupees) 1.90 1.95

(Unaudited)

On Behalf of Board of Directors

Lahore: 23 April 2018 Managing Director &

Muhammad Ali Zeb

Chief Executive OfficerDirector

Muhammad Umar Virk

9ADAMJEE INSURANCE

�رے31

11ADAMJEE INSURANCE

UNCONSOLIDATEDCondensed Interim

Financial Informationfor the Quarter Ended

31 March 2018(Unaudited)

Unconsolidated Condensed Interim Balance Sheet As at 31 March 2018

Restated

EQUITY AND LIABILITIES

Share capital and reserves attributable to Company's equity holders

Authorized share capital

375,000,000 (2017: 375,000,000) ordinary shares of Rs. 10 each 3,750,000 3,750,000

Issued, subscribed and paid up capital 3,500,000 3,500,000

Reserves 18 7,509,689 6,473,977

Unappropriated Profit 11,863,964

Total Equity 23,537,052 21,837,941

Liabilities

Underwriting provisions

Outstanding claims including IBNR 11,426,866 11,485,744

Unearned premium reserves 8,136,283 8,912,498

Premium deficiency reserves - -

Unearned reinsurance commission 195,862 240,306

Retirement benefit obligation 165,556 154,396

Deferred taxation 36,917 37,302

Premium received in advance 405,758 316,692

Insurance / reinsurance payables 1,488,327 1,668,516

Other creditors and accruals 2,295,196 2,307,394

Taxation - provision less payments 175,381 -

Accrued expenses 60,304 122,578

Unclaimed dividends 105,577 106,214

24,492,027 25,351,640

Total liabilities of Window Takaful Operations - Operator's Fund 17 174,947 141,312

Contingencies and commitments 19

48,204,026 47,330,893

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

31 March 2018Note

Rupees in thousand

(Unaudited) (Audited)

31 December 2017

12,527,363


13ADAMJEE INSURANCE

ASSETS

Property and equipment 8 2,689,048 2,585,278

Intangible assets 9 31,335 34,242

Investment in Subsidiary 10 990,133 990,133

Investments

Equity securities 11 21,323,933 20,230,227

Debt securities 12 726,014 441,832

Loans and other receivables 13 861,813 365,758

Insurance / reinsurance receivables 14 6,037,101 6,770,967

Reinsurance recoveries against outstanding claims 7,537,938 7,709,161

Salvage recoveries accrued 379,178 347,289

Deferred commission expense / Acquisition cost 614,722 733,631

Taxation - payments less provision - 82,087

Prepayments 15 1,900,835 2,499,931

Cash and bank 16 4,822,976 4,299,108

47,915,026 47,089,644

Total assets of Window Takaful Operations - Operator's Fund 17 289,000 241,249

48,204,026 47,330,893

Restated

31 March 2018Note

Rupees in thousand


31 December 2017

Muhammad Ali Zeb

Managing Director & Chief Executive Officer

Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi

Chief Financial Officer

Shaikh Muhammad Jawed

Director

Unconsolidated Condensed Interim Profit and Loss Account (Unaudited)For the Quarter Ended 31 March 2018

Revenue account

Net Insurance Premium 20 2,906,192

Net Insurance Claims 21 (1,811,177) (1,810,741)

Premium deficiency - -

Net Commission and other acquisition costs 22 (279,147) (248,543)

Insurance claims and acquisition expenses (2,090,324) (2,059,284)

Management expenses (485,858) (420,881)

Underwriting results 426,027

Investment income 23 532,928 675,848

Rental income 2,515 1,613

Other income 32,570 33,682

Other expenses (190,212) (159,347)

Results of operating activities 977,823

Exchange gain 1,696 245

Profit from window takaful operations 17 14,880

Workers' welfare fund (19,406) (19,862)

Profit before tax 973,086

Income tax expense (291,926)

Profit aster tax 681,160

Balance at the commencement of the period 11,863,964 12,093,769

Profit aster tax for the period 681,160

Balance unappropriated profit at the end of period 12,774,929

Earnings per share - basic and diluted 24 1.95


Quarter ended

31 March 2018

Note

Rupees in thousand

Quarter ended

31 March 2017

3,147,195

948,814

19,810

950,914

(287,515)

663,399

663,399

12,527,363

1.90

571,013

Rupees

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director


15ADAMJEE INSURANCE


Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Revenue account

Net Insurance Premium 1,642,191

Net Insurance Claims (863,946) (844,330)


Net Commission and other acquisition costs (97,795) (93,076)

Insurance claims and acquisition expenses (961,741) (937,406)



Investment income 532,928 616,304

Rental income 2,515 -


Other expenses (131,785) (120,590)


Exchange gain 1,696 245

Profit from window takaful operations 14,880

Workers' welfare fund (19,406) (19,862)



Business Underwritten Inside Pakistan

1,757,600

434,846

852,548

854,648

19,180

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director



Business Underwritten Outside Pakistan

Revenue account

Net Insurance Premium 1,264,001

Net Insurance Claims (947,231) (966,411)


Net Commission and other acquisition costs (181,352) (155,467)

Insurance claims and acquisition expenses (1,128,583) (1,121,878)



Investment income - 59,544

Rental income - 1,613


Other expenses (58,427) (38,757)


Exchange gain - -

Workers' welfare fund - -



Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

1,389,595

136,167

96,266

96,266

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

17ADAMJEE INSURANCE

Unconsolidated Condensed Interim Statement of Comprehensive Income (Unaudited)For the Quarter Ended 31 March 2018

Profit aster tax for the period 681,160 663,399

Other comprehensive income

Items that may be reclassified subsequently to profit and loss:

Unrealized gains on 'available-for-sale' investments 13,401 1,012,560

Other comprehensive income from window takaful operations 759 470

Effect of translation of investment in foreign branches - net 22,393 440

Total comprehensive income for the period 695,471 1,699,111


Restated

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

Unconsolidated Condensed Interim Cash Flow Statement (Unaudited)For the Quarter Ended 31 March 2018

Cash flows from operating activities

Underwriting activities

Premiums received 4,637,931 4,521,055

Reinsurance premiums paid (1,058,108) (898,848)

Claims paid (2,807,430) (2,107,421)

Surrenders paid (14,790) (7,265)

Reinsurance and other recoveries received 882,803 412,523

Commissions paid (394,854) (374,512)

Commissions received 90,331 135,676

Other underwriting payments (245,159) (274,637)

Net cash generated from underwriting activities 1,090,724 1,406,571

Other operating activities

Income tax paid (23,979) (16,896)

General and management expenses paid (288,720) (290,284)

Loans disbursed (10,868) (12,378)

Loans repayments received 12,556 11,451

Other receipts 6,868 1,558

Net cash used in other operating activities (304,143) (306,549)

Total cash generated from all operating activities 786,581 1,100,022

Cash flows from investing activities

Profit / return received on bank deposits 15,352 28,179

Return on Pakistan investment bonds - 13,531

Income received from TFCs - -

Income from treasury bills 11,116 2,859

Dividends received 130,542 91,032

Rentals received 768 1,613

Payments for investments (968,882) (1,402,925)

Proceeds from disposal of investments 744,873 504,400

Fixed capital expenditure - tangible assets (128,120) (68,429)

Fixed capital expenditure - intangible assets (185) (1,656)

Proceeds from disposal of operating fixed assets 2,460 10,924

Total cash used in investing activities (192,076) (820,472)

Cash flows from financing activities

Dividends paid (637) (269)

Net cash used in financing activities (637) (269)

Net cash generated from all activities 593,868 279,281

Cash at the beginning of the period 4,192,858 4,300,905

Cash at the end of the period 4,786,726 4,580,186

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017


19ADAMJEE INSURANCE


Reconciliation to profit and loss account

Operating cash flows 786,581 1,100,022

Depreciation expense (30,608) (28,144)

Provision for gratuity (11,160) (1,205)

Other income - bank deposits 26,391 27,642

Gain on disposal of operating fixed assets 1,011 4,727


(Decrease) / increase in assets other than cash (1,307,553) 649,817

Decrease / (increase) in liabilities other than running finance 136,449 (1,212,766)

Profit on sale of investments 104,215 168,175

Amortization expense (3,956) (5,170)

Decrease / (Increase) in unearned premium 776,215 (270,147)

Amortization of income on Government Securities - net - -

Decrease in loans (1,688) (927)

Income taxes paid 23,979 16,896

Reversal / (provision) for impairment in value of 'available-for-sale' investments 37,012 -

Dividend and other income 383,523 498,052



Income from TFCs 1,351 1,425

Profit from Window Takaful Operations 14,880

973,086

Definition of cash

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

Cash and other equivalents 8,111 7,081

Current and other accounts 2,511,525 4,083,199

Deposits maturing within 12 months 2,267,090 489,906

Total cash and cash equivalents 4,786,726 4,580,186


Cash comprises cash in hand, bank balances excluding Rs. 36,250 thousands (2017: Rs 106,250 thousands) held under lien, and other deposits which are readily convertible to cash and which are used in the cash management function on a day-to-day basis.

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017


19,810

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director






Reinsurance premiums paid (995,837) (814,542)

Claims paid (1,632,181) (863,531)






Net cash generated from underwriting activities 869,031 800,184


Income tax paid (23,979) (16,896)






Total cash generated from all operating activities 643,021 558,893







Rentals received 768 -

Payments for investments (968,882) (1,402,925)

Proceeds from disposal of investments 744,873 504,400



Proceeds from disposal of operating fixed assets 2,299 10,924

Total cash used in investing activities (189,311) (822,508)


Dividends paid (637) (269)

Net cash used in financing activities (637) (269)

Net cash generated from / (used in) all activities 453,073 (263,884)



Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Business Underwritten Inside Pakistan

21ADAMJEE INSURANCE



Operating cash flows 643,021 558,893





Rental income 2,515 -

(Decrease) / increase in assets other than cash (1,456,589) 297,935

Decrease / (increase) in liabilities other than running finance 668,680 (678,894)



Decrease in unearned premium 446,385 72,785


Increase in loans (2,367) (678)


Reversal / (provision) for impairment in value of 'available-for-sale' investments 37,012 -

Dividend and other income 383,523 489,534




Profit from Window Takaful Operations 19,810 14,880

898,300

Definition of cash




Deposits maturing within 12 months 735 735



Cash comprises cash in hand, bank balances excluding Rs. 36,250 (2017: Rs 106,250) held under lien, and other deposits which are readily convertible to cash and which are used in the cash management function on a day-to-day basis.

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017


Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director






Reinsurance premiums paid (62,271) (84,306)

Claims paid (1,175,249) (1,243,890)

Surrenders paid - -





Net cash generated from underwriting activities 221,693 606,387


Income tax paid - -




Other receipts (4) -


Total cash generated from all operating activities 143,560 541,129



Return on Pakistan investment bonds - -


Income from treasury bills - -

Dividends received - -

Rentals received - 1,613

Payments for investments - -

Proceeds from disposal of investments - -


Fixed capital expenditure - intangible assets - -

Proceeds from disposal of operating fixed assets 161 -

Total cash (used in) / generated from investing activities (2,765) 2,036


Dividends paid - -

Net cash generated from / (used in) financing activities - -

Net cash generated from all activities 140,795 543,165



Business Underwritten Outside Pakistan

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

23ADAMJEE INSURANCE



Operating cash flows 143,560 541,129


Provision for gratuity (5,947) 2,915


Gain on disposal of operating fixed assets (358) -

Rental income - 1,613

Increase in assets other than cash 149,036 351,882

Increase in liabilities other than running finance (532,231) (533,872)

Profit on sale of investments - 51,026


Decrease / (Increase) in unearned premium 329,830 (342,932)


Increase/(decrease) in loans 679 (249)

Income taxes paid - -

Reversal / (provision) for impairment in value of 'available-for-sale' investments - -

Dividend and other income - 8,518

Income from treasury bills - -

Return on Pakistan investment bonds - -

Income from TFCs - -

Profit from Window Takaful Operations - -

74,786

Definition of cash


Cash and other equivalents 25 4,512

Current and other accounts 959,330 1,752,565




Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Cash comprises cash in hand, bank balances excluding Rs. Nil (2017: Rs Nil) held under lien, and other deposits which are readily convertible to cash and which are used in the cash management function on a day-to-day basis.

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

96,266 Profit before tax

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

Unconsolidated Condensed Interim Statement of Changes in Equity (Unaudited)For the Quarter Ended 31 March 2018

Balance as at 31 December 2016 - (Audited) 3,500,000 22,859 3,764 443,711 936,500 - 12,093,769 17,000,603

Effect of restatement as disclosed in note 4.1.2.1 - - - - - 7,223,371 - 7,223,371

Balance as at 31 December 2016 - (Audited) restated 3,500,000 22,859 3,764 443,711 936,500 7,223,371 12,093,769 24,223,974

Profit for the period 01 January 2017 to 31 March 2017 - - - - - - 681,160 681,160

Other comprehensive income for the

period 01 January 2017 to 31 March 2017 - - - 440 - 13,871 - 14,311

Total comprehensive income for the period - - - 440 - 13,871 681,160 695,471

Balance as at 31 March 2017 - (Unaudited) - restated 3,500,000 22,859 3,764 444,151 936,500 7,237,242 12,774,929 24,919,445

Profit for the period 01 April 2017 to 31 December 2017 - - - - - - 540,068 540,068


period 01 April 2017 to 31 December 2017 - - - 22,949 - (2,193,488) (51,033) (2,221,572)

Total comprehensive income for the period - - - 22,949 - (2,193,488) 489,035 (1,681,504)

3,500,000 22,859 3,764 467,100 936,500 5,043,754 13,263,964 23,237,941

Final dividend for the year ended 31 December 2016

@ 25% (Rupee 2.5/- per share) - - - - - - (875,000) (875,000)

Interim dividend for the period ended 30 June 2017

@ 15% (Rupees 1.5/- per share) - - - - - - (525,000) (525,000)

- - - - - - (1,400,000) (1,400,000)

Balance as at 31 December 2017 - (Audited) - restated 3,500,000 22,859 3,764 467,100 936,500 5,043,754 11,863,964 21,837,941

Profit for the period 01 January 2018 to 31 March 2018 - - - - - -


period 01 January 2018 to 31 March 2018 - - - - -

Total comprehensive income for the period - - - -

Balance as at 31 March 2018 - (Unaudited) 3,500,000 22,859 3,764 489,493 936,500 6,057,073 12,527,363 23,537,052


Share capital Capital reserves Revenue reserves

TotalIssued,

subscribed

and paid up

Reserve for

exceptional

losses

Investment

fluctuation

reserve

Exchange

translation

reserve

General

reserve

Fair Value Reserve

Rupees in thousand

Unappropriated Profit

663,399

1,035,712

1,699,111 663,399 1,013,319

1,013,319

22,393

22,393

663,399

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director


25ADAMJEE INSURANCE

1 Legal status and nature of business

Adamjee Insurance Company Limited ("the Company") is a public limited company incorporated in Pakistan on 28 September 1960 under the Companies Act, 1913 (now the Companies Act, 2017). The Company is listed on Pakistan Stock Exchange and is engaged in the general insurance business comprising fire & property, marine, motor, accident and health and miscellaneous. The registered office of the Company is situated at Tanveer Building, 27-C-III, MM Alam Road, Gulberg III, Lahore.

The Company also operates branches in the United Arab Emirates (UAE) and the Export Processing Zone (EPZ).

The Company was granted authorization on 23 December 2015 under Rule 6 of the Takaful Rules, 2012 to undertake Takaful Window Operations in respect of general takaful products by Securities and Exchange Commission of Pakistan (SECP) and commenced Window Takaful Operations on 01January 2016.

2 Basis of preparation

The unconsolidated condensed interim financial information has been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 - 'Interim Financial Reporting' as applicable in Pakistan, provisions of and directives issued under Companies Act, 2017, the Insurance Ordinance, 2000, Insurance Rules, 2017, the Insurance Accounting Regulations, 2017 and Takaful Rules, 2012. In case where requirements differ, the provisions of or directives issued under the Companies Act, 2017, the Insurance Ordinance, 2000, Insurance Rules, 2017, the Insurance Accounting Regulations, 2017 and Takaful Rules, 2012 have been followed.

This unconsolidated condensed interim financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with annual financial statements of the Company for the year ended 31 December 2017.

3 Statement of Compliance

3.1 This unconsolidated condensed interim financial information has been prepared under the historical cost convention except that certain investments are carried at fair value and the obligations under certain employee benefits that are measured at present value. Accrual basis of accounting has been used except for cash flow information.

3.2 The Companies Act, 2017 (“the Act”) was enacted on 30 May 2017 and replaced and repealed the Companies Ordinance, 1984 (‘the repealed Ordinance’) with its application from January 01,2018. Accordingly, this unconsolidated condensed interim financial information has been prepared in accordance with the provision of the Companies Act, 2017.

3.3 Securities and Exchange Commission of Pakistan (“SECP”) vide S.R.O 88(1)/2017 and S.R.O 89(1)/2017 dated 9 February 2017 has issued the Insurance Accounting Regulations, 2017 and Insurance Rules, 2017 (the new Rules and Regulations). The application of these Regulations and Rules for the purpose of preparation and presentation of the financial statements was effective from 1 April 2017.

However, SECP vide letter ID/OSM/Adamjee/2017/12269 dated 11 October 2017 has allowed the Company for the application of new Regulations effective from 1 January 2018. Consequently, the Company has changed its accounting policies in respect of presentation of financial statements and ‘available-for-sale’ investments as explained in note 4.1 of this unconsolidated condensed interim financial information.

4 Summary of significant accounting policies

The accounting policies and methods of computation adopted in the preparation of this unconsolidated condensed interim financial information are the same as those applied in the preparation of the unconsolidated financial statements of the Company for the year ended 31 December 2017 except for changes in accounting policies in note 4.1 of this unconsolidated condensed interim financial information.

The Company has adopted all the applicable new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 01 January 2018, as mentioned in the financial statements for the year ended 31 December 2017.

There is no significant impact of such changes on this unconsolidated condensed interim financial information of the Company.

Notes to the Unconsolidated Condensed InterimFinancial Information (Unaudited)For the Quarter Ended 31 March 2018

4.1 Changes in accounting policies

4.1.1 Presentation and disclosure of financial statements

As per Insurance Rules, 2017, the presentation and disclosure requirements of the financial statements have changed under the format prescribed in Annexure II of the said Rules. Accordingly, change in presentation and disclosures of this unconsolidated condensed interim financial information has been applied retrospectively.

4.1.2 Investments

Financial assets were previously measured as per the provisions of repealed SEC (Insurance) Rules, 2002. Starting from financial year 2018, Financial Assets fall in the scope of IAS 39 “Financial Instruments - Recognition and Measurement”, and are classified as loans and receivables, held-to-maturity investments or available-for-sale financial assets, as appropriate. Financial assets are initially measured at cost, which is the fair value of consideration given and received respectively. These financial assets are subsequently measured at fair value or cost as the case may be. The Company determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year end.

4.1.2.1 Basis for measurement of available-for-sale investments

Under the repealed SEC (Insurance) Rules, 2002, the Company previously recorded its ‘available-for-sale’ investments at cost and remeasured them at lower of cost or market value. The Insurance Rules, 2017 require the initial measurement of ‘available-for-sale’ investments at cost with the subsequent remeasurement at fair value at each reporting date. The unrealized gains and losses arising from changes in fair values are directly recognized in equity in the period in which these arise until the investments are sold or determined to be impaired. The said change in accounting policy has been made in accordance with the requirements of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors".

Consequent to this change, investments as at December 31, 2017 have been increased by Rs. 5,043,626 thousands with a corresponding increase in fair value reserve in equity amounting to Rs. 5,043,626 thousands relating to conventional business and Rs. 7 thousands relating to Window Takaful Operations. Furthermore, fair value reserve as at December 31, 2016 has increased by Rs. 7,223,250 thousands relating to conventional business and Rs. 121 thousands relating to Window Takaful Operations. There is no impact of this change on earnings per share of the Company in preceding years.

4.1.2.2 Basis for measurement of held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Company has the positive intention and ability to hold to maturity and are initially measured at cost. These are subsequently measured at amortized cost. Investments intended to be held for an undefined period are not included in this classification.

Previously, fixed income securities, such as Fixed Deposits and Treasury Bills, redeemable at a given date were classified under the category ‘Available-for-sale securities as per the repealed SEC (Insurance) Rules, 2002. From the financial year ’starting from January 01, 2018, fixed income securities fall in the scope of IAS 39 and are now re-classified under the category ‘Held-to-maturity’ investments.

The re-classification does not affect the recognition and measurement criteria and such securities are continued to be measured on amortized cost i.e. where the cost was different from the redemption value, such difference is amortized uniformly over the period between the acquisition date and the date of maturity in determining ‘cost’ at which these investments are stated.

4.1.3 Premium revenue

The Insurance Accounting Regulations, 2017 remodel the recognition criteria for the premium written under an Insurance Policy. The said regulations require the Company to recognize premium receivable under an Insurance policy / cover note as written from the date of attachment of risk to the policy / cover note. Accordingly, the Company is required to account for cover notes which are effective as at balance sheet date.

As per repealed SEC (Insurance) Rules, 2002, the premium was written under an insurance policy at the time of its issuance. The change is considered to be a change in accounting policy in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”. The impact of the same is not considered to be material to the financial information and accordingly not included in the comparative restated financial information.



27ADAMJEE INSURANCE


5 Use of estimates and judgments

The preparation of this unconsolidated condensed interim financial information in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the Company's accounting policies. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

During preparation of this unconsolidated condensed interim financial information, the significant judgments made by the management in applying the Company's accounting policies and the key sources of estimation and uncertainty were the same as those that applied in the preceding audited annual published financial statements of the Company for the year ended 31 December 2017.

6 Functional and presentation currency

This unconsolidated condensed interim financial information is presented in Pakistani Rupees, which is also the Company’s functional currency.

7 Financial risk management

The Company's financial risk management objectives and policies are consistent with those disclosed in the financial statements for the year ended 31 December 2017.

8 Property and equipment

Opening balance - net book value 2,132,353 1,077,862

Additions during the period 17,911 1,176,961

Less:

Book value of disposals during the period (1,449) (11,958)

Depreciation / amortization charged during the period (30,608) (120,002)

Exchange difference 7,707 9,490

(24,350) (122,470)

2,125,914 2,132,353

Capital work in progress 563,134 452,925

2,689,048 2,585,278

8.1 Additions during the period

Land and buildings - 1,040,575

Furniture and fixtures 2,175 26,004

Motor vehicles 13,544 76,110

Machinery and equipments 1,003 14,173

Computer and related accessories 1,189 20,099

17,911 1,176,961

Written down values of property and equipment

disposed off during the period

Land and buildings - -

Furniture and fixtures - -


Machinery and equipments 53 1,847

Computer and related accessories - -

1,449 11,958

31 March 2018Note

Rupees in thousand


31 December 2017

8.1

8.2

8.2


9 Intangible assets

Opening balance - net book value 34,242 49,687

Additions during the period 185 2,973

Less:

Book value of disposals during the period - -


Exchange difference 864 1,247

(3,092) (18,418)

31,335 34,242

10 Investment in subsidiary

Cost 694,895 694,895

Unrealized gain 295,238 295,238

End of the period 990,133 990,133

31 March 2018

Rupees in thousand


31 December 2017


Rupees in thousand

31 December 2017

CostImpairment/

provisionCarrying value

31 March 2018

CostImpairment/


11 Investment in equity securities

Available-for-sale

Related parties

Listed shares 7,962,628 - 7,962,628 7,819,534 - 7,819,534

Unrealized gain 2,565,918 2,197,985

10,528,546 10,017,519

Others

Listed shares 7,356,344 (1,098,083) 6,258,261 7,454,844 (1,135,095) 6,319,749

Unlisted shared 925,360 - 925,360 925,360 - 925,360

NIT Units 161 - 161 161 - 161

Mutual Funds 416,575 - 416,575 417,035 - 417,035

7,600,357 7,662,305

Unrealized gain 3,195,030 2,550,403

10,795,387 10,212,708

Total 21,323,933 20,230,227

Restated

31 March 2018

Rupees in thousand


31 December 2017

Restated


29ADAMJEE INSURANCE


12 Investment in debt securities

Held-to-maturity

Others

Term Finance Certificate 12.1 70,948 70,948

Treasury Bills 655,066 370,884

726,014 441,832

12.1 Term Finance Certificate 75 75 1,000,000 70,948 70,948

70,948 70,948

Face value

31 March 2018Note

Rupees in thousand


31 December 2017

31 March 2018

Rupees in thousand

31 December 2017

Rupees in thousand

31 March 2018 31 December 2017

No of certificates

13 Loans and other receivables

Considered good

Rent receivable 13,676 6,090

Accrued investment income 368,713 107,631

Security deposits 44,903 44,525

Advances 173,431 127,581

Agent commission receivable 20,147 20,547

Loans to employees 41,505 43,193

Other receivables 199,438 16,191

861,813 365,758

14 Insurance / reinsurance receivables - unsecured and considered good

Due from insurance contract holders 5,318,304 6,152,145

Less: Provision for impairment of receivables from

insurance contract holders (381,869) (375,801)

4,936,435 5,776,344

Due from other insurers / other reinsurers 1,251,968 1,145,925

Less: provision for impairment of due from other

insurers / reinsurers (151,302) (151,302)

1,100,666 994,623

6,037,101 6,770,967

15 Prepayments

Prepaid reinsurance premium ceded 1,759,176 2,349,147

Prepaid rent 13,571 19,663

Prepaid miscellaneous expenses 128,088 131,121

1,900,835 2,499,931


Held-to-maturity

Others



726,014 441,832

12.1 Term Finance Certificate 75 75 1,000,000 70,948 70,948

70,948 70,948

31 March 2018

Rupees in thousand


31 December 2017

31 March 2018

Rupees in thousand

31 December 2017

Value of Certificates


No of certificates

31 March 2018

Rupees in thousand


31 December 2017

Face value

Note


16 Cash and Bank

Cash and cash equivalents

Cash in hand 548 387

Policy & revenue stamps, bond papers 7,563 7,289

8,111 7,676

Cash at bank

Current accounts 1,739,623 1,478,477

Saving accounts 16.1 771,901 792,461

2,511,524 2,270,938

Deposits maturing within 12 months

Fixed and term deposits 16.1 2,303,341 2,020,494

4,822,976 4,299,108

Restated

17 Window takaful operations - operator's fund

Assets

Qard-e-Hasna 117,000 117,000

Cash and bank deposits 7,676 41,119

Investments 31,268 30,343

Current assets - others 111,196 30,605

Fixed assets 21,860 22,182

Total Assets 289,000 241,249

Total liabilities - current 174,947 141,312

31 March 2018Note

Rupees in thousand


31 December 2017

31 March 2018

Rupees in thousand


31 December 2017

16.1 These include fixed deposits amounting to Rs. 217,983 thousands (AED 6,951 thousands) [2017: Rs. 208,736 thousands (AED 6,951 thousands)] kept in accordance with the requirements of Insurance Regulations applicable to the UAE branches for the purpose of carrying on business in United Arab Emirates. These also include liens against cash deposits of Rs. 36,250 thousands (2017: Rs. 106,250 thousands) with banks in Pakistan essentially in respect of guarantees issued by the banks on behalf of the Company for claims under litigation filed against the Company.

Wakala Fee 28,923

Commission expense (13,056) (5,748)

Management expense (21,051) (8,437)

Net Investment income 1,055 142

Profit from Window Takaful Operations 14,880

31 March 2018

Rupees in thousand

(Unaudited)

31 March 2017

Details of total assets, total liabilities and segment disclosure of window takaful operations are stated in the annexed condensed interim financial information for the quarter ended 31 March 2018.

(Unaudited)

52,862

19,810


31ADAMJEE INSURANCE


Restated18 Reserves

Capital reserves

Reserves for exceptional losses 22,859 22,859

Investment fluctuation reserves 3,764 3,764

Exchange translation reserves 489,493 467,100

516,116 493,723

Revenue reserves

General reserves 936,500 936,500

Fair value reserve 6,057,073 5,043,754

6,993,573 5,980,254

7,509,689 6,473,977

31 March 2018

Rupees in thousand


31 December 2017

19 Contingencies and commitments

Contingencies

There has been no significant change in the contingencies since the date of preceding published annual financial statements.

Commitments

The Company has issued letter of guarantees amounting to Rs. 6,869 thousands (AED 219,000) [2017: 24,992 thousands(AED 832,250)] relating to its UAE branch.

(Unaudited) (Unaudited)

20 Net Insurance Premium

Written Gross Premium 3,694,166 4,678,638

Add: Unearned premium reserve opening 8,912,498 7,349,511

Less: Unearned premium reserve closing 8,136,283 7,619,658

Add: Currency translation effect 149,516 1,220

Premium earned 4,619,897 4,409,711

Less: Reinsurance premium ceded 877,919 1,322,707

Add: Prepaid reinsurance premium opening 2,349,147 2,356,182

Less: Prepaid reinsurance premium closing 1,759,176 2,175,511

Add: Currency translation effect 4,812 141

Reinsurance expense 1,472,702 1,503,519

3,147,195 2,906,192

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017



20.1 Net Insurance Premium - Business underwritten inside Pakistan




Premium earned 2,952,911 2,903,106

Less: Reinsurance premium ceded 820,460 1,104,584

Add: Prepaid reinsurance premium opening 2,079,920 1,922,263

Less: Prepaid reinsurance premium closing 1,705,069 1,765,932


1,757,600 1,642,191

20.2 Net Insurance Premium - Business underwritten outside Pakistan




Add: Currency translation effect 149,516 1,220

Premium earned 1,666,986 1,506,605

Less: Reinsurance premium ceded 57,459 218,123

Add: Prepaid reinsurance premium opening 269,227 433,919

Less: Prepaid reinsurance premium closing 54,107 409,579


Reinsurance expense 277,391 242,604

1,389,595 1,264,001


Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

21 Net Insurance Claims Expense

Claims Paid 2,807,430 2,107,421

Add: Outstanding claims including IBNR closing 11,426,866 10,024,986

Less: Outstanding claims including IBNR opening 11,485,744 9,475,718

Less: Currency translation effect 201,209 1,593

Claims expense 2,547,343 2,655,096

Less: Reinsurance and other recoveries received 988,846 510,294

Add: Reinsurance and other recoveries in respect

of outstanding claims net of impairment (if any) closing 7,917,116 6,950,610

Less: Reinsurance and other recoveries in respect

of outstanding claims net of impairment (if any) opening 8,056,450 6,615,596

Less: Currency translation effect 113,346 953

Reinsurance and other recoveries revenue 736,166 844,355

1,811,177 1,810,741

33ADAMJEE INSURANCE



Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

21.1 Net Insurance Claims Expense - Business underwritten inside Pakistan

Claims Paid 1,430,972 863,531



Claims expense 976,980 1,007,243







863,946 844,330

21.2 Net Insurance Claims Expense - Business underwritten outside Pakistan

Claims Paid 1,376,458 1,243,890




Claims expense 1,570,363 1,647,853








947,231 966,411

22 Net Commission Expense / Acquisition Cost

Commission Paid or payable 279,397 437,797

Add: Deferred Commission expense opening 733,631 737,281

Less: Deferred Commission expense closing 614,722 777,693


Net Commission 414,293 397,520

Less: Commission received or recoverable 90,331 135,673

Add: unearned reinsurance commission 240,306 236,881

Less: unearned reinsurance commission 195,862 223,588

Add: Currency translation effect 371 11

135,146 148,977

279,147 248,543


22.1 Net Commission Expense / Acquisition Cost - Business underwritten

Inside Pakistan








127,191 126,440

97,795 93,076

22.2 Net Commission Expense / Acquisition Cost - Business underwritten

Outside Pakistan










7,955 22,537

181,352 155,467


Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017


35ADAMJEE INSURANCE


23 Investment Income

Business underwritten Inside Pakistan

Available-for-sale

Income from equity securities

Dividend income

- associated undertakings 191,111 174,021

- others 192,412 315,513

383,523 489,534

Income from debt securities - Held to maturity

Return on Term Finance Certificates 1,351 1,425

Return on Pakistan Investment Bonds - 5,846

Profit on Treasury Bills 6,827 2,350

8,178 9,621

Net realized gains on investments

Realized gains on

- associated undertakings - -

- others 104,215 117,149

104,215 117,149

495,916 616,304

Reversal / (provision) of impairment in value of

'available-for-sale' investments 37,012 -

532,928 616,304

Business underwritten Outside Pakistan

Available-for-sale


Dividend income - 8,518

Net realized gains on investments - 51,026

- 59,544

Net investment income 532,928 675,848


Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

24 Earnings per share - basic and diluted

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

Net profit aster tax for the period 681,160

Weighted average number of shares 350,000,000 350,000,000

Basic earnings per share 1.95

Number of shares

Rupees

663,399

1.90



25 Transactions with related parties

The Company has related party relationships with its associates, subsidiary company, employee retirement benefit plans, key management personnel and other parties. Transactions are entered into with such related parties for the issuance of policies to and disbursements of claims incurred by them and payments of rentals for the use of premises rented from them. There are no transactions with key management personnel other than those specified in their terms of employment.

Investment in related parties have been disclosed in note 10 & 11 to the unconsolidated condensed interim financial information. Other transactions with related parties are summarized as follows:

i) Transactions

Subsidiary company

Premiums underwritten 11,562 7,026

Premiums received 9,142 242

Claims paid 80 49

Claims received 2,500 -

Premium paid - 2,200

Rent / service charges received - 510

Other related parties


Premiums received 533,164 295,390

Claims paid 145,407 111,126

Rent paid 1,309 1,283

Commission Paid 13,262 4,405

Rent received - 1,613

Income on bank deposits 5,493 7,272

Investments made 143,093 151,272

Fee / service charges paid 2,088 -

Charge in respect of gratuity expense 8,164 4,733

Contribution to Employees'

Provident Fund 7,638 7,091

Compensation paid to Key

management personnel 222,861 196,607

ii) Period end balances

Subsidiary company

Balances receivable 15,502 686

Balances payable 796 759


Balances receivable 209,325 516,219

Balances payable 706,786 628,382

Cash and bank balances 1,031,467 1,375,420

Payable to Staff Gratuity Fund 89,655 84,442

Payable to Employees' Provident Fund 2,354 2,325

31 March 2018

Rupees in thousand

(Unaudited)

31 March 2017

31 March 2018

Rupees in thousand


31 December 2017

(Unaudited)

37ADAMJEE INSURANCE


26

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26

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of fe

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and

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31

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39ADAMJEE INSURANCE


27 Fair value measurement of financial instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Underlying the definition of fair value is the presumption that the company is a going concern and there is no intention or requirement to curtail materially the scale of its operations or to undertake a transaction on adverse terms.

A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis.

IFRS 13 'Fair Value Measurement' requires the company to classify fair value measurements and fair value hierarchy that reflects the significance of the inputs used in making the measurements of fair value hierarchy has the following levels:

- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)

- Inputs other than quoted prices included within level 1 that are observable for the asset either directly (that is, derived from prices) (Level 2)

- Inputs for the asset or liability that are not based on observable market data (that is, unadjusted) inputs (Level 3)

Transfer between levels of the fair value hierarchy are recognized at the end of the reporting period during which the changes have occurred.

Carrying amount Fair value

Availablefor sale

Receivablesand other

financila assets

Cash andcash

equivalents

Otherfinancialliabilities

Total Level 1 Level 2 Level 3 Total

Note

Rupees in thousand

31 March 2018

Financial assets

Investment in Subsidiary 10

Investments

Equity securities 11

Debt securities 12

Loans and other receivables * 13

Insurance / reinsurance receivables

- unsecured and considered good * 14

Reinsurance recoveries against outstanding claims *

Salvage recoveries accrued *

Prepayments * 15

Cash and bank * 16

Financial liabilities

Outstanding claims (including IBNR)*

Insurance / reinsurance payables *

Other creditors and accruals*

Accrued expenses*

Unclaimed dividend*

990,133

21,323,933

-

-

22,314,066

-

-

-

-

-

-

-

-

726,014

-

726,014

-

-

-

-

-

-

-

-

-

861,813

6,037,101

7,537,938

379,178

1,900,835

-

16,716,865

-

-

-

-

-

-

-

-

-

-

-

-

-

4,822,976

4,822,976

-

-

-

-

-

-

-

-

-

-

- -

- -

-

-

-

11,426,866

1,488,327

1,746,391

60,304

105,577

14,827,465

990,133

21,323,933

726,014

861,813

6,037,101

7,537,938

379,178

1,900,835

4,822,976

44,579,921

11,426,866

1,488,327

1,746,391

60,304

105,577

14,827,465

-

19,337,024

-

-

-

-

-

-

-

19,337,024

-

-

-

-

-

-

-

-

726,014

-

-

-

-

-

-

726,014

-

-

-

-

-

-

990,133

1,986,909

-

-

-

-

-

-

-

2,977,042

-

-

-

-

-

-

990,133

21,323,933

726,014

-

-

-

-

-

-

23,040,080

-

-

-

-

-

-

* The Company has not disclosed the fair value of these items because their carrying amounts are a reasonable approximation of fair value.

Held tomaturity

-

-

-

-

-

-

-

- -



27.1 Fair value measurement of financial instruments









31 December 2017 - Restated

Financial assets

Investment in Subsidiary 10

Investments


Debt securities 12






Prepayments * 15

Cash and bank * 16


Outstanding claims (including IBNR)*



Accrued expenses*

Unclaimed dividend*

990,133

20,230,227

-

-

-

21,220,360

-

-

-

-

-

-

-

-

441,832

-

-

441,832

-

-

-

-

-

-

-

-

-

365,758

6,770,967

7,709,161

347,289

2,499,931

-

17,693,106

-

-

-

-

-

-

-

-

-

-

-

-

-

-

4,299,108

4,299,108

-

-

-

-

-

-

-

-

-

-

-

-

- -

- - -

- - -

- - -

-

11,485,744

1,668,516

1,813,021

122,578

106,214

15,196,073

990,133

20,230,227

441,832

365,758

6,770,967

7,709,161

347,289

2,499,931

4,299,108

43,654,406

11,485,744

1,668,516

1,813,021

122,578

106,214

15,196,073

-

18,243,318

-

-

-

-

-

-

-

18,243,318

-

-

-

-

-

-

-

-

441,832

-

-

-

-

-

-

441,832

-

-

-

-

-

-

990,133

1,986,909

-

-

-

-

-

-

-

2,977,042

-

-

-

-

-

-

990,133

20,230,227

441,832

-

-

-

-

-

-

21,662,192

-

-

-

-

-

-



Availablefor sale

Receivablesand other

financila assets

Cash andcash

equivalents


Total Level 1 Level 2 Level 3 Total

Note

Held tomaturity

Rupees in thousand

41ADAMJEE INSURANCE


28 Movement in investment

‘Available-for-Sale’ ‘Held-to-Maturity’ Total

As at beginning of previous year 23,575,059 386,626 23,961,685

Additions 6,400,626 1,399,001 7,799,627

Disposals (Sales and redemptions) (5,521,637) (1,344,848) (6,866,485)

Fair value net gains

(excluding net realized gain) (2,179,624) - (2,179,624)

Unwinding of income on Investment bonds - 1,053 1,053

Impairment / (reversal of losses) (1,054,064) - (1,054,064)

As at beginning of current year 21,220,360 441,832 21,662,192

Additions 313,814 655,066 968,880

Disposals (sales and redemptions) (269,680) (370,884) (640,564)

Fair value on gains

(excluding net realized gain) 1,012,560 - 1,012,560

Impairment / (reversal of losses) 37,012 - 37,012

As at end of current period 22,314,066 726,014 23,040,080

Rupees in thousand

29 Date of authorization for issue

This unconsolidated condensed interim financial information was authorized for issue on 23 April 2018 by the Board of Directors of the Company.

30 Non-adjusting events after balance sheet date

The Board of Directors of the Company in their meeting held on 21 March 2018 proposed final cash dividend for the year ended 31 December 2017 @ 10% i.e. Rupee 1 /- per share which has been approved by the members in the Annual General Meeting held on 23 April 2018. This unconsolidated condensed interim financial information for the quarter ended 31 March 2018 does not include the effect of this appropriation which will be accounted for in the unconsolidated condensed interim financial information for the half year ending 30 June 2018.

31 General

31.1 Corresponding figures have been rearranged and reclassified for better presentation, wherever considered necessary.

31.2 Figures have been rounded off to the nearest thousand rupees unless other wise stated.

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

43ADAMJEE INSURANCE

On behalf of the Board, we are pleased to present the consolidated condensed interim financial information of Adamjee Insurance Company Limited and its subsidiary, Adamjee Life Assurance Company Limited for the quarter ended 31 March 2018.

The highlights for the period under review are as follows:

Directors’ Report to the members on Consolidated Condensed Interim Financial InformationFor the Quarter Ended 31 March 2018


On Behalf of Board of Directors

Lahore: 23 April 2018 Managing Director &

Muhammad Ali Zeb

31 March 2018 31 March 2017

Rupees in thousand

Earnings per share

The consolidated condensed interim financial information reflects Rs. 1.88 (31 March 2017: Rs. 1.95) earnings per share for the period under review.

Profit before tax

Taxation

Profit aster tax

Profit/(Loss) attributable to non-controlling interest

Profit attributable to ordinary shareholders

Unappropriated profit brought forward

Profit available for appropriation

Profit from Window Takaful Operations

(287,614)

(1,261)

946,108

658,494

659,755

11,634,582

12,307,288

19,810

975,415

(292,258)

683,157

514

682,643

11,797,814

12,480,457

14,880

Chief Executive OfficerDirector

Muhammad Umar Virk

45ADAMJEE INSURANCE

CONSOLIDATEDCondensed Interim

Financial Informationfor the Quarter Ended



Consolidated Condensed Interim Balance Sheet As at 31 March 2018

Restated

31 March 2018Note

Rupees in thousand


31 December 2017

EQUITY AND LIABILITIES

Share capital and reserves attributable to Company's equity holders

Authorized share capital

375,000,000 (2017: 375,000,000) ordinary shares of Rs. 10 each 3,750,000 3,750,000

Issued, subscribed and paid up capital 3,500,000 3,500,000

Reserves 17 7,222,043 6,178,739

Unappropriated Profit 12,307,288 11,634,582

Equity attributable to equity holders of the parent 23,029,331 21,313,321

Non-controlling interest 52,514 46,661

Balance of statutory funds (including policy holders' liabilities

technical reserves of Rs. 29.310 billion (2017: Rs. 27.096 billion) 29,980,416 27,667,002

Liabilities


Outstanding claims including IBNR 11,945,932 11,844,834

Unearned premium reserves 8,136,283 8,912,498

Premium deficiency reserves - -

Unearned reinsurance commission 195,862 240,306

Retirement benefit obligation 205,389 185,903

Deferred taxation 29,331 30,218

Premium received in advance 710,823 576,616

Insurance / reinsurance payables 1,515,540 1,681,093

Other creditors and accruals 2,543,106 2,911,360

Taxation - provision less payments 23,918 -

Accrued expenses 74,397 141,691

Unclaimed dividends 105,577 106,214

25,486,158 26,630,733

Total liabilities of Window Takaful Operations

16 174,947 141,312

Contingencies and commitments 18

78,723,366 75,799,029

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

- Operator's Fund (Holding Company)

ASSETS

Property and equipment 8 2,844,792 2,735,542

Intangible assets 9 90,698 97,760

Investment property 685,000 637,981

Investments

Equity securities 10 32,727,637 30,828,727

Debt securities 11 6,062,38411,680,000

5,498,29310,625,000

Loan secured against life insurance policies 30,614 31,170

Loans and other receivables 12 1,861,109 1,051,147

Insurance / reinsurance receivables 13 6,107,502 6,846,091

Reinsurance recoveries against outstanding claims 7,537,938 7,709,161

Salvage recoveries accrued 379,178 347,289

Deferred commission expense / acquisition cost 614,722 733,631

Taxation - payments less provision - 212,748

Prepayments 14 1,973,919 2,552,498

Cash and bank 15 5,838,873 5,650,742

78,434,366 75,557,780

16 289,000 241,249

78,723,366 75,799,029

Restated

31 March 2018Note

Rupees in thousand


31 December 2017

Term Deposits

Total assets of Window Takaful Operations

- Operator's Fund (Holding Company)

47ADAMJEE INSURANCE

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director


Consolidated Condensed Interim Profit and Loss Account (Unaudited)For the Quarter Ended 31 March 2018

Quarter ended

31 March 2018

Note

Rupees in thousand

Quarter ended

31 March 2017

Revenue account

Net Insurance Premium 19 5,631,136 4,831,041

Net Insurance Claims 20 (3,256,759) (2,420,808)Premium deficiency - -Net Commission and other acquisition costs 21 (648,999) (617,607)Insurance claims and acquisition expenses (3,905,758) (3,038,415)

22 1,932,262 569,417Net change in policy holder liabilities 20 (2,213,644) (1,332,801)Surplus of Policyholder’s funds

(754,403)(118,580)

(563,350)(39,865)

Underwriting results 571,013 426,027

Investment income 22 537,979 680,864Rental income 2,515 1,613Other income 32,570 35,858Other expenses (200,069) (164,210)Results of operating activities 944,008 980,152

Exchange gain 1,696 245Profit from window takaful operations 16 19,810 14,880Workers' welfare fund (19,406) (19,862)Profit before tax 946,108 975,415

Income tax expense (287,614) (292,258)

Profit aster tax 658,494 683,157

Profit / (loss) attributable to:Equity holders of the parent 659,755 682,643Non-controlling interest (1,261) 514

658,494 683,157

Profit and loss appropriation account - Parent Company

Balance at the commencement of the period 11,634,582 11,797,814Profit aster tax for the periodCapital contribution from statutory fund

659,755 682,643-12,951

Balance unappropriated profit at the end of period 12,307,288 12,480,457

Earnings per share - basic and diluted 23 1.88 1.95


Rupees

Investment income - Statutory funds

Management expenses

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

Consolidated Condensed Interim Statement of Comprehensive Income (Unaudited)For the Quarter Ended 31 March 2018

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Profit aster tax for the period 658,494 683,157

Other comprehensive income

Items that may be reclassified subsequently to profit and loss:

Unrealised gains on 'available-for-sale' investments 1,022,781 43,693

Other comprehensive income from window takaful operations 759 470

Effect of translation of investment in foreign branches - net 22,393 440

Total comprehensive income for the period 1,704,427 727,760

Total comprehensive income attributable to:

Equity holders of the parent 1,703,059 719,455

Non-controlling interest 1,368 8,305

1,704,427 727,760

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

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

Restated

49ADAMJEE INSURANCE


Consolidated Condensed Interim Cash Flow Statement (Unaudited)For the Quarter Ended 31 March 2018

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017




Reinsurance premiums paid (1,058,108) (898,848)

Claims paid (4,206,896) (2,876,447)






Net cash generated from underwriting activities 1,748,207 3,148,269


Income tax paid (55,073) (26,319)

General and management expenses paid (1,060,171) (669,726)




Net cash used in other operating activities (1,106,688) (695,414)

Total cash generated from all operating activities 641,519 2,452,855






Rentals received 768 1,613

Disbursement of policy loans 33,363 (2,073)

Settlement of policy loans (30,614) 2,213

Payments for investments (23,287,675) (6,264,109)

Proceeds from disposal of investments 19,445,361 4,670,158



Proceeds from disposal of fixed assets 2,460 12,044

Total cash used in investing activities (9,492,751) (7,392,672)


Dividends paid

Net cash used in financing activities

Net cash used in all activities

Cash at the beginning of the year - Restated

Cash at the end of the year

(637)

(637)

(8,851,869)

14,654,492

5,802,623

(269)

(269)

(4,940,086)

10,953,816

6,013,730

Term deposit placements (6,005,000) (6,075,000)

Restated

Consolidated Condensed Interim Cash Flow Statement (Unaudited)For the Quarter Ended 31 March 2018


Operating cash flows 641,519 2,452,856






Increase / (decrease) in assets other than cash (863,598) 898,169

Increase in liabilities other than running finance (2,136,031) (3,083,148)



Capital contribution from shareholders' fund 17,436 (16,510)

Increase / (decrease) in unearned premium 776,215 (270,147)

Decrease in loans (1,688) (927)


Provision for impairment in value of

available-for-sale investments 37,012 -

Dividend and other income 1,767,982 737,308





Profit before tax 946,108 975,415

Definition of cash

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Cash comprises cash in hand, bank balances excluding Rs. 36,250 thousands (2017: Rs 106,250 thousands) held under lien, and other deposits which are readily convertible to cash and which are used in the cash management function on a day-to-day basis.






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

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

Restated

51ADAMJEE INSURANCE


Consolidated Condensed Interim Statement of Changes in Equity (Unaudited)For the Quarter Ended 31 March 2018

Share capital Capital reserve Revenue reserve

Issued,subscribed

and paid up

Reserve for exceptional

losses

Investment fluctuation

reserve

Exchange translation

reserve

General reserve

Fair Value Reserve

Capital contribution to statutory fund

Unappropriated Profit

Net Retained earnings

Total

Balance as at 31 December 2016 - (Audited) 3,500,000 22,859 3,764 443,711 936,500 - (341,687) 12,139,501 11,797,814 16,704,648 23,610 16,728,258

Effect of restatement as disclosed in note 4.1.2 - - - - - 7,061,641 - - - - 7,061,641 7,061,641 Balance as at 31 December 2016 - (Audited) restated 3,500,000 22,859 3,764 443,711 936,500 7,061,641 (341,687) 12,139,501 11,797,814 23,766,289 23,610 23,789,899

Profit for the period 01 January 2017 to 31 March 2017 - - - - - - - 682,643 682,643 682,643 514 683,157Other comprehensive income for the

period 01 January 2017 to 31 March 2017 - - - 440 - 36,372 -- - 36,812 7,791 44,603Capital contribution to statutory funds - - - - -- - - -Total comprehensive income for the period - - - 440 - 36,372 - 682,643 682,643 719,455 8,305 727,760

Balance as at 31 March 2017 - (Unaudited) - restated 3,500,000 22,859 3,764 444,151 936,500 7,098,013 (341,687) 12,822,144 12,480,457 24,485,744 31,915 24,517,659

Profit / (loss) for the period 01 April 2017 to 31 December 2017 - - - - - - - 522,699 522,699 522,699 (6,015) 516,684Other comprehensive income / (loss) for the

period 01 April 2017 to 31 December 2017 - - - 22,949 - (2,349,497) - (51,033) (51,033) (2,377,581) (7,791) (2,385,372)Capital contribution to statutory funds - - - - 82,459 - 82,459 82,459 28,552 111,011Total comprehensive income / (loss) for the period - - - 22,949 - (2,349,497) 82,459 471,666 554,125 (1,772,423) 14,746 (1,757,677)

3,500,000 22,859 3,764 467,100 936,500 4,748,516 (259,228) 13,293,810 13,034,582 22,713,321 46,661 22,759,982

Final dividend for the year ended 31 December 2016@ 25% (Rupees 2.5/- per share) - - - - - - - (875,000) (875,000) (875,000) - (875,000)

Interim dividend for the period ended 30 June 2017@ 15% (Rupees 1.5/- per share) - - - - - - - (525,000) (525,000) (525,000) - (525,000)

- - - - - - - (1,400,000) (1,400,000) (1,400,000) - (1,400,000)

Balance as at 31 December 2017 - (Audited) - restated 3,500,000 22,859 3,764 467,100 936,500 4,748,516 (259,228) 11,893,810 11,634,582 21,313,321 46,661 21,359,982

Profit / (loss) for the period 01 January 2018 to 31 March 2018 - - - - - - - 659,755 659,755 659,755 (1,261) 658,494Other comprehensive income for the

period 01 January 2018 to 31 March 2018 - - - 22,393 - 1,020,911 - - - 1,043,304 2,629 1,045,933Capital contribution to statutory funds - - - - - - 12,951 - 12,951 12,951 4,485 17,436Total comprehensive income for the period - - - 22,393 - 1,020,911 12,951 659,755 672,706 1,716,010 5,853 1,721,863

Balance as at 31 March 2018 - (Unaudited) 3,500,000 22,859 3,764 489,493 936,500 5,769,427 (246,277) 12,553,565 12,307,288 23,029,331 52,514 23,081,845


Equity attributable to equity holders of the parent

Non-controlling interest

Rupees in thousand

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

- -

- -

Notes to the Consolidated Condensed InterimFinancial Information (Unaudited)For the Quarter Ended 31 March 2018


The Group consists of:

Holding Company

Adamjee Insurance Company Limited

Subsidiary Company

Adamjee Life Assurance Company Limited [74.28% held by Adamjee Insurance Company Limited (2017: 74.28%)]

Adamjee Insurance Company Limited (Holding Company)

Adamjee Insurance Company Limited is a public limited company incorporated in Pakistan on 28 September 1960 under the Companies Act, 1913 (now the Companies Act 2017). The Company is listed on Pakistan stock exchange and is engaged in the general insurance business comprising fire and property, marine, motor, accident & health and miscellaneous classes. The registered office of the Company is situated at Tanveer Building, 27-C-III, MM Alam Road, Gulberg III, Lahore.

The Holding Company also operates branches in the United Arab Emirates (UAE) and the Export Processing Zone (EPZ).

The Holding Company was granted authorization on 23 December 2015 under Rule 6 of Takaful Rules, 2012 to undertake Window Takaful Operations in respect of general takaful products by Securities and Exchange Commission of Pakistan (SECP) and commenced Window Takaful Operations on 01 January 2016.

Adamjee Life Assurance Company Limited (Subsidiary Company)

Adamjee Life Assurance Company Limited was incorporated in Pakistan on 4 August 2008 as a public unlisted company under the Companies Ordinance, 1984 and started its operations from 24 April 2009. The registered office of the Company is located at First Floor Islamabad Stock Exchange Tower, 55-B, Jinnah Avenue, Blue Area, Islamabad while its principal place of business is located at Third Floor, The Forum, Khayaban-e-Jami, Clifton, Karachi. The Company is a subsidiary of Adamjee Insurance Company Limited and an associate of IVM Intersurer B.V. who have a holding of 74.28% (2017: 74.28%) and 25.72% (2017: 25.72%), respectively in the share capital of the Company. IVM Intersurer B.V. has nominated Hollard Life Assurance Company Limited (HLA), a subsidiary of IVM Intersurer B.V., to act on its behalf in respect of matters relating to the Company. HLA is South Africa's largest private sector insurance company.

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

- Conventional Business

- Accident and Health Business

- Non-Unitised Investment Link Business

- Unit Linked Business

- Individual Family Takaful Unit Linked Business


This consolidated condensed interim financial information has been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 - 'Interim Financial Reporting' as applicable in Pakistan, provisions of and directives issued under Companies Act, 2017, the Insurance Ordinance, 2000, Insurance Rules, 2017, the Insurance Accounting Regulations, 2017 and Takaful Rules, 2012. In case where requirements differ, the provisions of or directives issued under the Companies Act, 2017, the Insurance Ordinance, 2000, Insurance Rules, 2017, the Insurance Accounting Regulations, 2017 and Takaful Rules, 2012 have been followed.

This consolidated condensed interim financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with annual financial statements of the Company for the year ended 31 December 2017.


3.1 This consolidated condensed interim financial information has been prepared under the historical cost convention except

53ADAMJEE INSURANCE


that certain investments are carried at fair value and the obligations under certain employee benefits that are measured at present value. Accrual basis of accounting has been used except for cash flow information.

3.2 The Companies Act, 2017 (“the Act”) was enacted on 30 May 2017 and replaced and repealed the Companies Ordinance, 1984 (“the repealed Ordinance”) with its application from January 01,2018. Accordingly, this consolidated condensed interim financial information has been prepared in accordance with the provision of the Companies Act, 2017.

3.3 Securities and Exchange Commission of Pakistan (“SECP”) vide S.R.O 88(1)/2017 and S.R.O89(1)/2017 dated 9 February 2017 has issued the Insurance Accounting Regulations, 2017 and Insurance Rules, 2017 (the new Rules and Regulations). The application of these Regulations and Rules for the purpose of preparation and presentation of the financial statements was effective from 1 April 2017.

However, SECP vide letter ID/OSM/Adamjee/2017/12269 dated 11 October 2017 has allowed the Company for the application of new Regulations effective from 1 January 2018. Consequently, the Company has changed its accounting policies in respect of presentation of financial statements and "available-for-sale" investments as explained in note 4.1 of this consolidated condensed interim financial information.


The accounting policies and methods of computation adopted in the preparation of this consolidated condensed interim financial information are the same as those applied in the preparation of the consolidated financial statements of the Company for the year ended 31 December 2017 except for change in accounting policies in note 4.1 of this consolidated condensed interim financial information.

The Company has adopted all the applicable new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 01 January 2018, as mentioned in the financial statements for the year ended 31 December 2017.

There is no significant impact of such changes on this consolidated condensed interim financial information of the Company.



As per Insurance Rules, 2017, the presentation and disclosure requirements of the financial statements have changed under the format prescribed in Annexure II of the said Rules. Accordingly, change in presentation and disclosures of this consolidated condensed interim financial information has been applied retrospectively.

4.1.2 Investments

Financial assets were previously measured as per the provisions of repealed SEC (Insurance) Rules, 2002. Starting from financial year 2018, Financial Assets fall in the scope of IAS 39 “Financial Instruments - Recognition and Measurement”, and are classified as loans and receivables, held-to-maturity investments or available-for-sale financial assets, as appropriate. Financial assets are initially measured at cost, which is the fair value of consideration given and received respectively. These financial assets are subsequently measured at fair value or cost as the case may be. The Company determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year end.

4.1.2.1 Basis for measurement of available for sale investments

Under the repealed SEC (Insurance) Rules, 2002, the Company previously recorded its "available-for-sale" investments at cost and remeasured them at lower of cost or market value. The Insurance Rules, 2017 require the initial measurement of "available-for-sale" investments at cost with the subsequent remeasurement at fair value at each reporting date. The unrealized gains and losses arising from changes in fair values are directly recognized in equity in the period in which these arise until the investments are sold or determined to be impaired. The said change in accounting policy has been made in accordance with the requirements of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors".

Consequent to this change, investments as at December 31, 2017 have been increased by Rs. 4,748,388 thousands with a corresponding increase in fair value reserve in equity amounting to Rs. 4,748,388 thousands relating to conventional business and Rs. 7 thousands relating to Window Takaful Operations of the Holding Company. Furthermore, fair value


reserve as at December 31, 2016 has increased by Rs. 7,061,520 thousands relating to conventional business and Rs. 121 thousands relating to Window Takaful Operations of the Holding Company. There is no impact of this change on earnings per share of the Group in preceding years.

4.1.2.2 Basis for measurement of held to maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Company has the positive intention and ability to hold to maturity and are initially measured at cost. These are subsequently measured at amortized cost. Investments intended to be held for an undefined period are not included in this classification.

Previously, fixed income securities, such as Fixed Deposits and Treasury Bills, redeemable at a given date were classified under the category “Available-for-sale securities” as per the repealed SEC (Insurance) Rules, 2002. From the financial year starting from January 01, 2018, fixed income securities fall in the scope of IAS 39 and are now re-classified under the category “Held-to-maturity“ investments.

The re-classification does not affect the recognition and measurement criteria and such securities are continued to be measured on amortized cost i.e. where the cost was different from the redemption value, such difference is amortized uniformly over the period between the acquisition date and the date of maturity in determining ‘cost’ at which these investments are stated.

4.1.3 Premium revenue

"The Insurance Accounting Regulations, 2017 remodel the recognition criteria for the premium written under an Insurance Policy. The said regulations require the Company to recognize premium receivable under an Insurance policy / cover note as written from the date of attachment of risk to the policy / cover note. Accordingly, the Company is required to account for cover notes which are effective as at balance sheet date.

As per repealed SEC (Insurance) Rules, 2002, the premium was written under an insurance policy at the time of its issuance. The change is considered to be a change in accounting policy in accordance with IAS 8 “"Accounting Policies, Changes in Accounting Estimates and Errors"". The impact of the same is not considered to be material to the financial statements and accordingly not included in the comparative restated financial information."


The preparation of this consolidated condensed interim financial information in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the Company's accounting policies. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

During preparation of this consolidated condensed interim financial information, the significant judgments made by the management in applying the Company's accounting policies and the key sources of estimation and uncertainty were the same as those that applied in the preceding audited annual published financial statements of the Company for the year ended 31 December 2017.


This consolidated condensed interim financial information is presented in Pakistani Rupees, which is also the Company’s functional currency.


The Company's financial risk management objectives and policies are consistent with those disclosed in the financial statements for the year ended 31 December 2017.


55ADAMJEE INSURANCE


Notes to the Consolidated Condensed InterimFinancial Information (Unaudited)

31 March 2018

Rupees in thousand

31 December 2017


Opening balance - net book value 2,273,084 1,150,358

Additions during the period 39,454 1,273,770

Less:

Book value of disposals during the period (1,449) (12,738)


Exchange difference 7,707 9,490

(34,356) (151,044)

2,278,182 2,273,084

Capital work in progress 566,610 462,458

2,844,792 2,735,542

Additions during the period:

Land and buildings - 1,040,575

Furniture and fixtures 2,280 47,394



Computer and related accessories 22,361 29,460

Leasehold Improvements 509 33,353

39,454 1,273,770

Written down values of property and equipment

disposed off during the period

Land and buildings - -

Furniture and fixtures - 41



Computer and related accessories - -

Leasehold Improvements - -

1,449 12,738

9 Intangible assets

Opening balance - net book value 97,760 102,565

Additions during the period 694 28,144

Less:

Book value of disposals during the period - -


Exchange difference 864 1,247

(7,756) (32,949)

90,698 97,760

For the Quarter Ended 31 March 2018

8.1

Note

8.2

8.1

8.2




Rupees in thousand

31 December 2017

CostImpairment/


31 March 2018

CostImpairment/


Restated

10 Investment in equity securities


Available-for-sale

Related parties

Listed shares

Mutual Funds

Unrealized gain

Others

Listed shares

Unlisted shared

NIT Units

Mutual Funds

Unrealized gain

Total

At fair value through profit and loss

Related parties

Listed shares

Mutual Funds

Others

Listed shares

Unlisted shared

NIT Units

Mutual Funds

8,398,717

283,239

6,945,117

925,360

161

160,610

742,722

3,711,283

6,463,411

422,827

(762)

-

(1,098,083)

-

-

-

-

-

-

-

-

-

8,253,568

266,884

7,044,715

925,360

161

234,726

560,534

3,203,547

6,291,804

436,697

-

-

(1,136,392)

-

-

(1,265)

-

-

-

-

-

-

Total

8,397,955

283,239

2,692,308

11,373,502

5,847,034

925,360

161

160,610

6,933,165

3,080,727

10,013,892

21,387,394

742,722

3,711,283

4,454,005

6,463,411

-

-

422,827

6,886,238

11,340,243

8,253,568

266,884

2,220,218

10,740,670

5,908,323

925,360

161

233,461

7,067,305

2,528,170

9,595,475

20,336,145

560,534

3,203,547

3,764,081

6,291,804

-

-

436,697

6,728,501

10,492,582


Rupees in thousand

31 December 2017

CostImpairment/


31 March 2018

CostImpairment/


-

-

-

-

57ADAMJEE INSURANCE



Available for sale

Treasury Bills

99,335 99,250

Pakistan Investment Bonds

245,104 244,853

344,439 344,103


Term Finance Certificate 11.1 1,233,246 857,620

Sukuk Certificates 325,510 355,212

Ijarah sukuks 177,838 250,731

Treasury Bills 3,253,181 3,246,607

Pakistan Investment Bonds 2,156 2,188

4,991,931 4,712,358

Held-to-maturity



726,014 441,832

11.1 Term Finance Certificate


Askari Bank Limited 25,000 10,000 4,993 125,324 50,057

Bank Al Habib Limited 39,680 10,992 4,996 198,241 54,982

Bank Alfalah Limited 24,023 24,023 4,990 120,715 122,032

Bank of Punjab 2,550 2,550 99,960 258,290 254,643

Habib Bank Limited 590 7,204 99,920 58,481 325,896

Soneri Bank Limited 10,000 10,000 4,995 50,404 50,010

Aspin Pharma Pvt Ltd 820 - 100,000 82,574 -

Dawood Hercules 2,380 - 100,000 239,217 -

International Brands Ltd 1,000 - 100,000 100,000 -

1,233,246 857,620

Held-to-maturity

Pak Electron (Commercial Paper) 75 75 1,000,000 70,948 70,948

70,948 70,948

31 March 2018

Rupees in thousand

31 December 2017

Value of Certificates


No of certificatesFace value


31 March 2018

Rupees in thousand

31 December 2017


Note



12 Loans and other receivables

Considered good

Rent receivable 13,676 6,090

Accrued investment income 453,093 202,838

Security deposits 661,156 489,120

Advances 169,662 131,424

Agent commission receivable 20,147 20,547

Loans to employees 50,882 52,109

Other receivables 492,493 149,019

1,861,109 1,051,147

13 Insurance / reinsurance receivables - unsecured and considered good

Due from insurance contract holders 5,385,441 6,218,998

Less: Provision for impairment of receivables from

insurance contract holders (381,869) (375,801)

5,003,572 5,843,197

Due from other insurers / other reinsurers 1,255,232 1,154,196

Less: Provision for impairment of due from other

insurers / reinsurers (151,302) (151,302)

1,103,930 1,002,894

6,107,502 6,846,091

31 March 2018

Rupees in thousand

31 December 2017

15 Cash and Bank


Cash in hand 10,759 14,732

Policy & revenue stamps, bond papers 7,563 7,289

18,322 22,021

Cash at bank

Current accounts 2,709,666 1,534,268

Saving accounts 15.1 807,544 2,073,959

3,517,210 3,608,227 Deposits maturing within 12 months

Fixed and term deposits - Restated 15.1 2,303,341 2,020,494

5,838,873 5,650,742

15.1 These include fixed deposits of the Holding Company amounting to Rs. 217,983 thousands (AED 6,951 thousands) [2017: Rs. 208,736 thousands (AED 6,951 thousands)] kept in accordance with the requirements of Insurance Regulations applicable to the UAE branches for the purpose of carrying on business in United Arab Emirates. These also include liens against cash deposits of Rs. 36,250 thousands (2017: Rs. 106,250 thousands) with banks in Pakistan essentially in respect of guarantees issued by the banks on behalf of the Holding Company for claims under litigation filed against the Holding Company.


14 Prepayments

Prepaid reinsurance premium ceded 1,759,176 2,349,147

Prepaid rent 13,571 19,663

Prepaid miscellaneous expenses 201,172 183,688

1,973,919 2,552,498

Note


59ADAMJEE INSURANCE



16 Window takaful operations - operator's fund

Assets

Qard-e-Hasna 117,000 117,000

Cash and bank deposits 7,676 41,119

Investments 31,268 30,343

Current assets - others 111,196 30,605

Fixed assets 21,860 22,182

Total Assets 289,000 241,249

Total liabilities - current 174,947 141,312

31 March 2018

Rupees in thousand

31 December 2017

31 March 2018

Rupees in thousand

31 December 2017

Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Wakala Fee 52,862 28,923

Commission expense (13,056) (5,748)


Net Investment income 1,055 142


17 Reserves

Capital reserves

Reserves for exceptional losses 22,859 22,859

Investment fluctuation reserves 3,764 3,764

Exchange translation reserves 489,493 467,100

516,116 493,723Revenue reserves

General reserves 936,500 936,500

Fair value reserve 5,769,427 4,748,516

6,705,927 5,685,016

7,222,043 6,178,739

Details of total assets, total liabilities and segment disclosure of window takaful operations are stated in the annexed condensed interim financial information for the quarter ended 31 March 2018.

18 Contingencies and commitments

Contingencies

Holding Company

There has been no significant change in the contingencies since the date of preceding published consolidated annual financial statements.

Subsidiary Company

The Subsidiary Company has contingent liabilities in respect of death claims in the ordinary course of business amounting to Rs. 17,708 thousands (2017: Rs. 27,213 thousands). The management of the Subsidiary Company is confident that no provision in respect of these items is required to be made in the financial statements.

There has been no other significant change in the contingencies since the date of preceding published consolidated annual financial statements.


Restated(Unaudited) (Audited)

(Unaudited)


Restated

(Unaudited)



Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

19 Net Insurance Premium

Written Gross Premium 6,311,611 6,689,320Add: Unearned premium reserve opening 8,912,498 7,349,511Less: Unearned premium reserve closing 8,136,283 7,619,658Add: Currency translation effect 149,516 1,220

Premium earned 7,237,342 6,420,393

Less: Reinsurance premium ceded 1,011,423 1,408,540 Add: Prepaid reinsurance premium opening 2,349,147 2,356,182Less: Prepaid reinsurance premium closing 1,759,176 2,175,511Add: Currency translation effect 4,812 141


5,631,136 4,831,041

19.1 Net Insurance Premium - Business underwritten inside Pakistan

General Insurance

Written Gross Premium 2,506,526 2,830,321Add: Unearned premium reserve opening 5,186,518 4,515,372Less: Unearned premium reserve closing 4,740,133 4,442,587

Premium earned 2,952,911 2,903,106

Less: Reinsurance premium ceded 820,460 1,104,584Add: Prepaid reinsurance premium opening 2,079,920 1,922,263Less: Prepaid reinsurance premium closing 1,705,069 1,765,932


1,757,600 1,642,191

Life Insurance

Gross premiumsRegular premium insurance policies

First year 555,255 237,428Second year renewal 472,261 210,519Subsequent years renewal 703,651 376,843

Single premium insurance policies 726,397 1,092,835Group policies without cash values 159,881 93,057Total gross premiums 2,617,445 2,010,682

Less: Reinsurance premiums cededon individual life first year business 11,837 14,177on individual life second year business 11,377 6,519on individual life subsequent renewal business 19,930 12,848on single premium individual policies - -on group policies 90,360 52,289

133,504 85,833

Net Premiums2,483,941 1,924,849


Commitments

Holding Company

The Holding Company has issued letter of gurantees amounting to Rs. 6,869 thousands (AED 219,000) [2017: 24,992 thousands (AED 832,250)] relating to its UAE branch.

Subsidiary Company

Commitments in respect of ljarah rentals payable in future period as at 31 March 2018 amounted to Rs. 29,210 thousands (2017: Rs. 31,781 thousands) for vehicles. Commitment in respect of capital expenditure amounting to Rs. 23,776 thousands (2017: Rs. 33,900 thousands)

61ADAMJEE INSURANCE



19.2 Net Insurance Premium - Business underwritten outside Pakistan

Written Gross Premium 1,848,317

Add: Unearned premium reserve opening 2,834,139

Less: Unearned premium reserve closing 3,177,071

Add: Currency translation effect 1,220

Premium earned 1,506,605

Less: Reinsurance premium ceded 218,123

Add: Prepaid reinsurance premium opening 433,919

Less: Prepaid reinsurance premium closing 409,579

Add: Currency translation effect 141

Reinsurance expense 242,604

1,187,640

3,725,980

3,396,150

149,516

1,666,986

57,459

269,227

54,107

4,812

277,391

1,389,595 1,264,001


Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

20 Net Insurance Claims Expense

Claims Paid 4,366,872 2,800,316




Claims expense 4,106,785 3,347,991

Less: Reinsurance and other recoveries received 1,102,706 593,122







3,256,759 2,420,808

Add: Policyholders' liabilities at end of the period 29,309,715 22,584,097

Less: Policyholders' liabilities at beginning of the period 27,096,071 21,251,296

2,213,644 1,332,801

5,470,403 3,753,609


63ADAMJEE INSURANCE



Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

20.1 Net Insurance Claims Expense - Business underwritten inside Pakistan

General Insurance

Claims Paid 1,430,972 863,531



Claims expense 976,980 1,007,243







863,946 844,330

Life Insurance

Gross Claims

Claims under individual policies

by death 106,618 36,767

by insured event other than death - 2,667

by maturity 266,854 53,510

by surrender 1,036,667 516,096

Total gross individual policy claims 1,410,139 609,040

Claims under group policies

by death 137,543 70,184

by insured event other than death 7,469 9,842

experience refund 4,291 3,829

Total gross group policy claims 149,303 83,855

Total gross policy claims 1,559,442 692,895

Less: Reinsurance recoveries

on individual claims 35,259 16,783

on group claims 78,601 66,045

113,860 82,828

1,445,582 610,067

Add: Policyholders' liabilities at end of the period 29,309,715 22,413,445

Less: Policyholders' liabilities at beginning of the period 27,096,071 21,251,296

2,213,644 1,162,149

Net insurance benefit expense 3,659,226 1,772,216



20.2 Net Insurance Claims Expense - Business underwritten outside Pakistan

Claims Paid 1,376,458 1,243,890




Claims expense 1,570,363 1,647,853








947,231 966,411



Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

21 Net Commission Expense / Acquisition Cost

Commission Paid or payable 592,953

774,621

Add: Deferred Commission expense opening 733,631

737,281

Less: Deferred Commission expense closing 614,722

777,693

Add: Currency translation effect 15,987

135

Net Commission 727,849

734,344

Less: Commission received or recoverable 90,331

135,673

Add: unearned reinsurance commission 240,306

236,881

Less: unearned reinsurance commission 195,862

223,588

Add: Currency translation effect 371

11

135,146

148,977

Branch overheads 46,588

25,582

Other acquisition costs 9,708

6,658

648,999

617,607

65ADAMJEE INSURANCE


21.1 Net Commission Expense / Acquisition Cost - Business underwritten inside Pakistan

General Insurance

Commission Paid or payable 153,513 224,303 Add: Deferred Commission expense opening 326,325 398,331 Less: Deferred Commission expense closing 254,852 403,118




Less: unearned reinsurance commission 188,720

192,395

127,191

126,440

97,795

93,076

Life Insurance

Acquisition costs

Remuneration to insurance intermediaries on individual policies:

- commission on first year premiums 251,447

219,935

- commission on second year premiums 24,598

26,456

- commission on subsequent years renewal premiums 16,320

14,366

- commission on single premiums 16,560

25,111

- other benefits to insurance intermediaries (2,053)

41,910

306,872

327,778

Remuneration to insurance intermediaries on group policies:

- commission 6,684

8,509

- other benefits to insurance intermediaries -

537

313,556

336,824

Branch overheads 46,588

25,582

Other acquisition costs:

- policy stamps 9,070 6,358

- medical examination fee 638 300

- others - -

9,708 6,658

369,852 369,064


Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017




Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

21.2 Net Commission Expense / Acquisition Cost - Business underwritten outside Pakistan










7,955 22,537

181,352 155,467

22 Investment Income

Business underwritten Inside Pakistan

General insurance:

Available-for-sale


Dividend income

- associated undertakings 191,111 174,021

- others 192,412 315,513

383,523 489,534

Income from debt securities - Held to maturity

Return on Term Finance Certificates 1,351 1,425


Profit on Treasury Bills 6,827 2,350

391,701 499,155

Net realized gains/ (losses) on investments

Realized gains on

- associated undertakings - -

- others 104,215 117,149

104,215 117,149

495,916 616,304

Reversal of impairment in value of

'available-for-sale' investments 37,012 -

532,928 616,304

67ADAMJEE INSURANCE


Life insurance:

Share holders' fund

Unrealized diminution in value of quoted securities (52)

Return on Government Securities 1,542

-

-

-

3,146

Return on bank deposit 323 530

Dividend income 677

Gain on disposal of non trading investments 3,186 722


'available-for-sale investments' (7)

5,051 5,016

Statutory Funds:

Conventional Business

Unrealized appreciation in value of quoted securities 4,166 -

Return on Government Securities 2,435 1,950

Return on bank deposits 1,429 1,680

Gain on disposal of open-end non trading investments - 275 Provision for impairment in value of

'available-for-sale' investments - (26)


Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

8,030 3,879

Accident and Health Business

Return on bank deposits - 1

- 1

Non-unitized Investment Link Business

Appreciation in value of quoted securities 101,289 25,089

Return on fixed income securities 2,776 1,325

Return on Government Securities 10,570 28,694

Return on bank deposits 15,780 4,131

Mark-up on policy loans 393 302

Dividend income 5,216 929

Gain on disposal of trading investments 10,920 3,052


'available-for-sale' investments - -

146,944 63,522




Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

Unit Linked Business


Appreciation in value of investment property 47,019 -

Mark-up on policy loans 169 86Return on Government Securities 121,822 222,559

Return on fixed income securities 27,178 3,949

Dividend income 65,718 20,929

Investment income on bank deposits 83,930 16,890Gain on disposal of trading investments 549,860 60,211


'available-for-sale' investments (1,623)-

1,702,590 497,724

Individual Family Takaful Unit Linked Business


Return on Government Securities 3,082 (51)

Return on fixed income securities 1,201 -

Dividend income 4,459 -

Investment income on bank deposits 5,470 237

Gain/(Loss) on sale of disposal of trading investments 23,969 379

74,698 4,291

Business underwritten Outside Pakistan

Available-for-sale


Dividend income- 8,518

Net realized gains on investments- 51,026

- 59,544

2,470,241 1,250,281

Net investment income

Net investment income - statutory funds 1,932,262 569,417

Net investment income - other 537,979 680,864

2,470,241 1,250,281

23 Earnings per share - basic and diluted

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

Net profit aster tax for the period 658,494 683,157

Weighted average number of shares 350,000,000 350,000,000

Basic earnings per share 1.88 1.95

Rupees

Number of shares

69ADAMJEE INSURANCE



Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017

31 March 2018

Rupees in thousand

31 December 2017


The Company has related party relationships with its associates, subsidiary company, employee retirement benefit plans, key management personnel and other parties. Transactions are entered into with such related parties for the issuance of policies to and disbursements of claims incurred by them and payments of rentals for the use of premises rented from them. There are no transactions with key management personnel other than those specified in their terms of employment.

Investment in related parties have been disclosed in note 9 & 10 to the consolidated condensed interim financial information. Other transactions with related parties are summarized as follows:

i) Transactions


Premiums received 533,164 295,390

Claims expense 27,944 -

Claims paid 145,407 130,451

Rent paid 1,309 1,283

Rent received - 1,613

Rental charges 1,821 -

Dividend income 280 4,420

Commission and other incentives

in respect of Bancassurance 228,042 4,405

Income on bank deposits 17,894 17,779

Fee / service charges paid 9,261 352

Investments made 733,242 3,874,275

Investments sold 493,433 3,096,405

Other expense 2,776 -

Charge in respect of gratuity expense 8,164 4,733

Contribution to Employees'

Provident Fund 7,638 7,091

Compensation paid to Key

management personnel 256,543 238,197

ii) Period end balances

Balances receivable 229,706 532,975

Balances payable 1,892,870 2,041,271

Cash and bank balances 1,409,162 2,395,788

Payable to Staff Gratuity Fund 89,655 84,442

Payable to Employees' Provident Fund 2,354 2,325

Receivable from Gratuity fund 39,833 12,152




25Se

gmen

t In

form

atio

n

31 December 2017-Restated

Prem

ium

rece

ivabl

e (In

clusiv

e of

fede

ral e

xice

duty,

Fede

ral in

sura

nce

fee a

nd A

dmini

stra

tive

surc

harg

e)92

4,29

710

,550

252,

155

6,58

081

8,48

61,

224,

637

461,

307

1,34

833

9,80

05,

636

2,79

6,04

51,

248,

751

4,04

4,79

6-

159,

880

-58

,256

2,13

3,14

426

6,16

52,

617,

445

6,66

2,24

1

Less

:Fe

dera

l exc

ise d

uty

117,

286

588

28,1

6725

297

,249

59,8

86-

6422

,037

302

264,

739

61,0

9232

5,83

1-

--

--

--

325,

831

Fede

ral in

sura

nce

fee8,

009

92,

217

57,

148

-4,

567

2,84

05

24,7

8119

24,8

00-

--

--

--

24,8

00

799,

002

9,95

322

1,77

26,

323

714,

089

1,16

4,75

145

6,74

01,

284

314,

923

5,32

92,

506,

526

1,18

7,64

03,

694,

166

-15

9,88

0-

58,2

562,

133,

144

266,

165

2,61

7,44

56,

311,

611

Gros

s writ

ten

prem

ium (in

clusiv

e of

adm

inist

rativ

e su

rcha

rge)

799,

002

9,95

322

1,77

26,

323

714,

089

1,16

4,75

145

6,74

01,

284

314,

923

5,32

92,

506,

526

1,18

7,64

03,

694,

166

-15

9,88

0-

58,2

562,

133,

144

266,

165

2,61

7,44

56,

311,

611

Gros

s dire

ct p

rem

ium79

5,79

69,

927

216,

453

6,28

569

1,17

51,

097,

691

456,

543

1,28

428

1,11

55,

319

2,44

1,08

21,

120,

506

3,56

1,58

8-

159,

880

-58

,256

2,13

3,14

426

6,16

52,

617,

445

6,17

9,03

3

Facu

ltativ

e inw

ard

prem

ium

(322

)-

65-

--

--

30,9

99-

30,7

42-

30,7

42-

--

--

--

30,7

42

Adm

inist

rativ

e su

rcha

rge

3,52

826

5,25

438

22,9

1467

,060

197

2,80

910

34,7

0267

,134

101,

836

--

--

--

-10

1,83

6

799,

002

9,95

322

1,77

26,

323

714,

089

1,16

4,75

145

6,74

01,

284

314,

923

5,32

92,

506,

526

1,18

7,64

03,

694,

166

-15

9,88

0-

58,2

562,

133,

144

266,

165

2,61

7,44

56,

311,

611

Insu

ranc

e pr

emium

ear

ned

1,19

8,42

811

,016

226,

527

20,4

2466

5,79

01,

629,

331

448,

917

3,25

341

3,24

92,

962

2,95

2,91

11,

666,

986

4,61

9,89

7-

159,

880

-58

,256

2,13

3,14

426

6,16

52,

617,

445

7,23

7,34

2

Insu

ranc

e pr

emium

cede

d to

reins

urer

s(9

70,4

28)

(6,7

27)

(32,

942)

-(9

,776

)(2

66,3

08)

-30

9(1

82,1

65)

(4,6

65)

(1,1

95,3

11)

(277

,391

)(1

,472

,702

)-

(90,

360)

-(9

38)

(39,

328)

(2,8

78)

(133

,504

)(1

,606

,206

)

Net i

nsur

ance

pre

miu

m22

8,00

04,

289

193,

585

20,4

2465

6,01

41,

363,

023

448,

917

3,56

223

1,08

4(1

,703

)1,

757,

600

1,38

9,59

53,

147,

195

-69

,520

-57

,318

2,09

3,81

626

3,28

72,

483,

941

5,63

1,13

6

Com

miss

ion in

come

87,8

432,

435

142

-4

5,33

0-

-39

,202

190

127,

191

7,95

513

5,14

6-

--

--

--

135,

146

Net u

nder

writ

ing

inco

me

315,

843

6,72

419

3,72

720

,424

656,

018

1,36

8,35

344

8,91

73,

562

270,

286

(1,5

13)

1,88

4,79

11,

397,

550

3,28

2,34

1-

69,5

20-

57,3

182,

093,

816

263,

287

2,48

3,94

15,

766,

282

Insu

ranc

e cla

ims

(58,

479)

(91)

(37,

031)

(129

)(3

28,3

51)

(1,5

69,5

26)

(390

,650

)(6

17)

(162

,469

)-

(976

,980

)(1

,570

,363

)(2

,547

,343

)-

(151

,160

)-

(43,

065)

(1,2

61,3

49)

(103

,868

)(1

,559

,442

)(4

,106

,785

)

Insu

ranc

e cla

im re

cove

ries f

rom

reins

urer

(23,

569)

(2,5

45)

(8,6

87)

-42

,671

623,

939

-1,

738

102,

619

-11

3,03

462

3,13

273

6,16

6-

78,6

01-

(2,0

07)

37,2

66-

113,

860

850,

026

Net c

laim

s(8

2,04

8)(2

,636

)(4

5,71

8)(1

29)

(285

,680

)(9

45,5

87)

(390

,650

)1,

121

(59,

850)

-(8

63,9

46)

(947

,231

)(1

,811

,177

)-

(72,

559)

-(4

5,07

2)(1

,224

,083

)(1

03,8

68)

(1,4

45,5

82)

(3,2

56,7

59)

Com

miss

ion e

xpen

se(9

5,08

9)(1

,436

)(3

0,89

3)(1

,334

)(4

7,57

6)(1

85,8

88)

(8,9

19)

(365

)(4

2,50

9)(2

84)

(224

,986

)(1

89,3

07)

(414

,293

)-

(6,9

92)

-1,

897

(292

,102

)(7

2,65

5)(3

69,8

52)

(784

,145

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Man

agem

ent e

xpen

se(6

7,21

5)(1

49)

(49,

254)

(1,1

51)

(165

,562

)(1

21,3

37)

(36,

548)

(1,0

74)

(42,

434)

(1,1

34)

(361

,013

)(1

24,8

45)

(485

,858

)-

(20,

923)

-(3

,833

)(2

06,5

71)

(37,

218)

(268

,545

)(7

54,4

03)

Prem

ium

defi

cienc

y exp

ense

--

--

--

--

--

--

--

--

--

--

-

Net i

nsur

ance

cla

ims

and

expe

nses

(244

,352

)(4

,221

)(1

25,8

65)

(2,6

14)

(498

,818

)(1

,252

,812

)(4

36,1

17)

(318

)(1

44,7

93)

(1,4

18)

(1,4

49,9

45)

(1,2

61,3

83)

(2,7

11,3

28)

-(1

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-(4

7,00

8)(1

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13,7

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(2,0

83,9

79)

(4,7

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Net I

nves

tmen

t inc

ome

- sta

tuto

ry fu

nds

--

--

--

--

--

--

--

8,03

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146,

944

1,70

2,59

074

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1,93

2,26

21,

932,

262

Polic

yhol

ders

' liab

ilities

at b

eginn

ing o

f the

per

iod-

--

--

--

--

--

--

-11

9,06

4-

2,43

4,66

323

,433

,236

1,10

9,10

827

,096

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27,0

96,0

71

Polic

yhol

ders

' liab

ilities

at e

nd o

f the

per

iod-

--

--

--

--

--

--

-(9

6,43

0)-

(2,5

53,8

00)

(25,

429,

311)

(1,2

30,1

74)

(29,

309,

715)

(29,

309,

715)

Surp

lus /

(defi

cit) o

f Pol

icyho

lder

s' fu

nds

--

--

--

--

--

--

--

290

-(3

8,11

7)(7

7,57

5)(3

,178

)(1

18,5

80)

(118

,580

)

Unde

rwrit

ing

resu

lt71

,491

2,50

367

,862

17,8

1015

7,20

011

5,54

112

,800

3,24

412

5,49

3(2

,931

)43

4,84

613

6,16

757

1,01

3-

--

--

--

571,

013

Net i

nves

tmen

t inc

ome

532,

928

-53

2,92

85,

051

537,

979

Rent

al in

com

e2,

515

-2,

515

-2,

515

Othe

r inc

ome

14,0

4418

,526

32,5

70-

32,5

70

Othe

r exp

ense

s(1

31,7

85)

(58,

427)

(190

,212

)(9

,857

)(2

00,0

69)

Exch

ange

gain

1,69

6-

1,69

6-

1,69

6

Profi

t fro

m W

indow

Taka

ful O

pera

tions

19,8

10-

19,8

10-

19,8

10

Wor

kers

' Wel

fare

Fun

d(1

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6)-

(19,

406)

-(1

9,40

6)

Profi

t bef

ore

tax

854,

648

96,2

6695

0,91

4(4

,806

)94

6,10

8

Segm

ent A

sset

s6,

574,

300

74,7

1859

5,03

414

,641

1,22

7,73

95,

380,

666

681,

400

12,9

031,

745,

646

21,0

6710

,824

,119

5,50

3,99

516

,328

,114

534,

007

431,

397

167

2,75

0,84

726

,447

,471

1,36

1,08

831

,524

,977

47,8

53,0

91

Unal

loca

ted

asse

ts27

,108

,742

3,76

1,53

330

,870

,275

-30

,870

,275

37,9

32,8

619,

265,

528

47,1

98,3

8931

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78,7

23,3

66

Segm

ent L

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litie

s6,

781,

683

82,9

5456

0,20

66,

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2,40

8,13

98,

093,

638

1,65

0,60

515

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2,03

9,03

014

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13,4

39,6

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213,

433

21,6

53,0

96(9

2,43

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0,74

144

48,7

6179

2,95

164

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994,

927

22,6

48,0

23

Unal

loca

ted

Liab

ilitie

s2,

508,

866

504,

216

3,01

3,08

2-

3,01

3,08

2

15,9

48,5

298,

717,

649

24,6

66,1

7899

4,92

725

,661

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Insi

de

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stan

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utsi

de

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In

side

Pa

kist

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Bus

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s

Qua

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end

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1 M

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201

8

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es in

tho

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Agg

rega

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Life

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Gra

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pro

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mag

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and

tran

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31 M

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Gen

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In

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71ADAMJEE INSURANCE

Prem

ium

rece

ivabl

e (In

clus

ive o

f fed

eral

exic

e du

ty,

Fede

ral i

nsur

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fee

and

Adm

inist

rativ

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1,23

2,35

012

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285,

088

9,41

774

2,41

11,

820,

687

568,

917

-32

9,97

85,

876

3,15

8,74

31,

848,

317

5,00

7,06

0-

93,5

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431,

695,

470

123,

278

2,01

0,68

27,

017,

742

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154,

369

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Fede

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10,7

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6-

6,48

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5,63

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8-

28,4

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28,4

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1,06

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1,56

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1,06

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1,56

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2,83

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848,

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2,01

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5,87

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--

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1,06

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9,41

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1,56

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Insu

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15,1

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8(1

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(242

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)-

(52,

318)

-(1

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1,30

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833)

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Net i

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pre

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m23

1,84

16,

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189,

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19,7

6154

7,95

61,

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247

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243,

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1,26

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104,

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6,73

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(87,

276)

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61,8

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(497

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94)

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Insu

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125,

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10,2

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669,

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Net c

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623)

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97)

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Com

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Prem

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defi

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--

--

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--

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Net

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Net I

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--

--

--

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--

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3,87

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7,72

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569,

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569,

417

Polic

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egin

ning

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d-

--

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-11

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2,37

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Polic

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--

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(104

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Surp

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--

--

--

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-(1

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Unde

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4,57

14,

254

32,4

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52,

224

375,

227

50,8

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6,02

7-

--

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426,

027

Net i

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tmen

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616,

304

59,5

4467

5,84

85,

016

680,

864

Rent

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1,61

31,

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Othe

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32,0

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33,6

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35,8

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Othe

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10)

Exch

ange

gai

n24

5-

245

-24

5

Profi

t fro

m W

indo

w T

akaf

ul O

pera

tions

14,8

80-

14,8

80-

14,8

80

Wor

kers

' Wel

fare

Fun

d(1

9,86

2)-

(19,

862)

-(1

9,86

2)

Profi

t be

fore

tax

898,

300

74,7

8697

3,08

62,

329

975,

415

Segm

ent A

sset

s8,

024,

165

68,6

9659

4,84

414

,374

1,09

9,83

15,

467,

973

744,

815

10,6

431,

870,

256

14,5

9912

,333

,911

5,57

6,28

517

,910

,196

669,

962

386,

885

167

2,63

8,35

924

,530

,798

1,23

2,09

629

,458

,269

47,3

68,4

65

Unal

loca

ted

asse

ts25

,034

,896

3,39

5,66

828

,430

,564

-28

,430

,564

37,3

68,8

078,

971,

953

46,3

40,7

6029

,458

,269

75,7

99,0

29

Segm

ent L

iabi

litie

s8,

062,

465

83,5

3359

6,02

522

,095

2,38

6,66

48,

369,

197

1,70

9,15

617

,688

2,17

2,36

311

,597

14,9

26,6

738,

504,

110

23,4

30,7

8313

4,54

115

8,53

144

48,1

1289

1,17

446

,691

1,27

9,09

324

,709

,876

Unal

loca

ted

Liab

ilitie

s1,

992,

216

69,9

532,

062,

169

-2,

062,

169

16,9

18,8

898,

574,

063

25,4

92,9

521,

279,

093

26,7

72,0

45

25

.1S

eg

men

t In

form

ati

on

Insi

de

Paki

stan

O

utsi

de

Paki

stan

In

side

Pa

kist

an

Out

side

Pa

kist

an

Insi

de

Paki

stan

O

utsi

de

Paki

stan

In

side

Pa

kist

an

Out

side

Pa

kist

an

Insi

de

Paki

stan

O

utsi

de

Paki

stan

In

side

Pa

kist

an

Out

side

Pa

kist

an

Conv

enti

onal

Bus

ines

s

Non

-Uni

tized

In

vest

men

t Li

nk B

usin

ess

Uni

t Li

nked

B

usin

ess

Acci

dent

and

H

ealt

h B

usin

ess

Indi

vidu

al

Fam

ily

Taka

ful U

nit

Link

ded

Bus

ines

s

Qua

rter

end

ed 3

1 M

arch

201

7

Rupe

es in

tho

usan

ds

Agg

rega

te

Life

In

sura

nce

Gra

nd T

otal

Life

Insu

ranc

e

Shar

ehol

ders

' Fu

nd

Fire

and

pro

pert

y da

mag

eM

arin

e, a

viat

ion

and

tran

spor

tM

otor

Hea

lth

Mis

cella

neou

sTo

tal

Agg

rega

te

Gen

eral

In

sura

nce

Insi

de

Paki

stan

O

utsi

de

Paki

stan

In

side

Pa

kist

an

Out

side

Pa

kist

an

Insi

de

Paki

stan

O

utsi

de

Paki

stan

In

side

Pa

kist

an

Out

side

Pa

kist

an

Insi

de

Paki

stan

O

utsi

de

Paki

stan

In

side

Pa

kist

an

Out

side

Pa

kist

an

Conv

enti

onal

Bus

ines

s

Non

-Uni

tized

In

vest

men

t Li

nk B

usin

ess

Uni

t Li

nked

B

usin

ess

Acci

dent

and

H

ealt

h B

usin

ess

Indi

vidu

al

Fam

ily

Taka

ful U

nit

Link

ded

Bus

ines

s

31 D

ecem

ber

2017

-Res

tate

d

Rupe

es in

tho

usan

ds

Agg

rega

te

Life

In

sura

nce

Gra

nd T

otal

Life

Insu

ranc

e

Shar

ehol

ders

' Fu

nd

Fire

and

pro

pert

y da

mag

eM

arin

e, a

viat

ion

and

tran

spor

tM

otor

Hea

lth

Mis

cella

neou

sTo

tal

Agg

rega

te

Gen

eral

In

sura

nce




26 Fair value measurement of financial instruments









Fair Value through P&L

Loans andreceivables

Cash andcash

equivalents


Level 1 Level 2 Level 3Total Total


(Rupees in thousand

Availablefor sale

NoteHeld to

maturity

31 March 2018

Financial assets

Investments


Debt securities 11

Term deposits

Loan secured against life insurance policies*






Prepayments * 14

Cash and bank * 15


Retirement benefit obligation

Outstanding claims (including IBNR)* 16



Accrued expenses*

Unclaimed dividend*


21,387,394

344,439

-

-

-

-

-

-

-

-

21,731,833

-

-

-

-

-

-

-

11,340,243

4,991,931

-

-

-

-

-

-

-

-

16,332,174

-

-

-

-

-

-

-

-

726,014

11,680,000

-

-

-

-

-

-

-

12,406,014

-

-

-

-

-

-

-

-

-

-

30,614

1,861,109

6,107,502

7,537,938

379,178

1,973,919

-

17,890,260

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

5,838,873

5,838,873

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

205,389

11,945,932

1,515,540

2,543,106

74,397

105,577

16,389,941

32,727,637

6,062,384

11,680,000

30,614

1,861,109

6,107,502

7,537,938

379,178

1,973,919

5,838,873

74,199,154

205,389

11,945,932

1,515,540

2,543,106

74,397

105,577

16,389,941

30,740,728

-

-

-

-

-

-

-

-

-

30,740,728

-

-

-

-

-

-

-

-

6,062,384

-

-

-

-

-

-

-

-

6,062,384

-

-

-

-

-

-

-

1,986,909

-

-

-

-

-

-

-

-

-

1,986,909

-

-

-

-

-

-

-

32,727,637

6,062,384

-

-

-

-

-

-

-

-

38,790,021

-

-

-

-

-

-

-

73ADAMJEE INSURANCE


26.1 Fair value measurement of financial instruments









20,336,145

344,103

-

-

-

-

-

-

-

-

20,680,248

-

-

-

-

-

-

-

10,492,582

4,712,358

-

-

-

-

-

-

-

-

15,204,940

-

-

-

-

-

-

-

-

441,832

10,625,000

-

-

-

-

-

-

-

11,066,832

-

-

-

-

-

-

-

-

-

-

31,170

1,051,147

6,846,091

7,709,161

347,289

2,552,498

-

18,537,356

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

5,650,742

5,650,742

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

185,903

11,844,834

1,681,093

2,911,360

141,691

106,214

16,871,095

30,828,727

5,498,293

10,625,000

31,170

1,051,147

6,846,091

7,709,161

347,289

2,552,498

5,650,742

71,140,118

185,903

11,844,834

1,681,093

2,911,360

141,691

106,214

16,871,095

28,841,818

-

-

-

-

-

-

-

-

-

28,841,818

-

-

-

-

-

-

-

-

5,498,293

-

-

-

-

-

-

-

-

5,498,293

-

-

-

-

-

-

-

1,986,909

-

-

-

-

-

-

-

-

-

1,986,909

-

-

-

-

-

-

-

30,828,727

5,498,293

-

-

-

-

-

-

-

-

36,327,020

-

-

-

-

-

-

-

31 December 2017 - Restated

Financial assets

Investments


Debt securities 11

Term deposits

Loan secured against life insurance policies*






Prepayments * 14

Cash and bank * 15


Retirement benefit obligation

Outstanding claims (including IBNR)* 16



Accrued expenses*

Unclaimed dividend*


Fair Value through P&L


Cash andcash

equivalents


Level 1 Level 2 Level 3Total Total


(Rupees in thousand

Availablefor sale

NoteHeld to

maturity



Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

Fair Value

through Profit &

Loss

Available for sale

Held to maturity Total

Rupees in thousand

27 Movement in investment

As at beginning of previous year

Additions

Disposals (Sales and redemptions)

Fair value net gains

(excluding net realized gain)

Amortisation of discount/ (premium)

on Government Securities

Unwinding of income on Investment bonds

Impairment / (reversal of losses)

As at beginning of current year

Additions

Disposals (sales and redemptions)

Fair value on gains

(excluding net realized gain)

Amortisation of discount/ (premium)

on Government Securities

Impairment / (reversal of losses)

As at end of current period

22,952,421

6,773,677

(5,808,530)

(2,179,624)

(289)

-

(1,057,405)

20,680,250

412,404

(425,700)

1,027,486

381

37,012

21,731,833

386,626

1,399,001

(1,344,848)

-

-

1,053

-

441,832

655,066

(370,884)

-

-

-

726,014

14,228,646

100,769,201

(98,590,128)

(1,645,662)

442,881

-

-

15,204,938

22,981,365

(22,929,175)

943,242

131,804

-

16,332,174

37,567,693

108,941,879

(105,743,506)

(3,825,286)

442,592

1,053

(1,057,405)

36,327,020

24,048,835

(23,725,759)

1,970,728

132,185

37,012

38,790,021


This consolidated condensed interim financial information was authorized for issue on 23 April 2018 by the Board of Directors of the Company.

29 Non-adjusting events after balance sheet date

The Board of Directors of the Holding Company in their meeting held on 21 March 2018 proposed final cash dividend for the year ended 31 December 2017 @ 10% i.e. Rupee 1 /- per share which has been approved by the members in the Annual General Meeting held on 23 April 2018.

30 General

30.1 Corresponding figures have been rearranged and reclassified for better presentation, whereever considered necessary.


75ADAMJEE INSURANCE

WINDOW TAKAFUL OPERATIONS

Condensed InterimFinancial Informationfor the Quarter Ended




Condensed Interim Balance Sheet (Unaudited)

Restated

(Audited)

Note 31 December 2017

AggregateOperator's Fund

Participants' Takaful Fund

Aggregate

Rupees in thousand

(Unaudited)

31 March 2018

As at 31 March 2018

FUNDS AND LIABILITIES

Operator's Fund

Statutory fund

Reserves

Unappropriated profit

Waqf / Participants' Takaful Fund

Ceded money

Accumulated deficit

Qard-e-Hasna from Operator's Fund

Liabilities


Outstanding claims (including IBNR)

Unearned contribution reserve

Unearned re-takaful rebate

Contribution deficiency reserve

Retirement benefit obligations

Deferred taxation

Contribution received in advance

Takaful / re-takaful payables

Wakala and mudarib fee payable

Provision for unearned wakala fee

Other creditors and accruals

Taxation - provision less payments

Total Liabilities

TOTAL FUND AND LIABILITIES

Contingencies and commitments

17

16

19

18

14

15

50,000

887

63,166

114,053

-

-

-

-

-

-

-

-

1,883

513

-

-

-

107,731

38,966

25,854

174,947

289,000

-

-

-

-

500

(41,795)

(41,295)

117,000

156,637

264,218

10,902

1,919

-

-

5,150

64,071

79,955

-

19,874

602,726

678,431

50,000

887

63,166

114,053

500

(41,795)

(41,295)

117,000

156,637

264,218

10,902

1,919

1,883

513

5,150

64,071

79,955

107,731

58,840

25,854

777,673

967,431

50,000

128

49,809

99,937

500

(36,179)

(35,679)

117,000

153,116

194,954

10,156

1,919

1,883

513

4,116

59,557

8,815

89,452

40,167

19,504

584,152

765,410

77ADAMJEE INSURANCE

ASSETS

Qard-e-Hasna to Participants' Takaful Fund

Property and equipment

Investments

Loans and other receivables

Takaful / re-takaful receivables

Re-takaful recoveries against outstanding claims

Salvage recoveries accrued

Wakala and mudarib fee receivable

Deferred commission expense

Prepayments

Cash & Bank

8

9

10

11

20

12

13

TOTAL ASSETS

117,000

21,860

31,268

2,261

-

-

-

79,955

27,355

1,625

7,676

172,000

289,000

-

-

-

4,658

231,140

45,807

11,800

-

-

70,701

314,325

678,431

678,431

117,000

21,860

31,268

6,919

231,140

45,807

11,800

79,955

27,355

72,326

322,001

850,431

967,431

117,000

22,182

30,343

5,630

183,594

34,211

6,800

8,815

20,213

64,631

271,991

648,410

765,410

The annexed notes from 1 to 28 form an integral part of this condensed interim financial information.

Restated

(Audited)




Aggregate

Rupees in thousand

(Unaudited)

31 March 2018

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director



Condensed Interim Profit and Loss Account (Unaudited)For the Quarter Ended 31 March 2018

Participant Takaful Fund - Revenue Account

Net Contribution revenue 16 80,569 43,638

Net claims 17 (87,521) (52,124)

Direct expenses (8,674) (2,416)

Re-takaful Rebate Earned 19 7,601 3,646

Claims and acquisition expenses (88,594) (50,894)

Underwriting deficit (8,025) (7,256)

Investment Income 21 2,409 817

Deficit for the period (5,616) (6,439)

Operator Takaful Fund - Revenue Account

Wakala Income 18 52,862 28,923

Commission expense 20 (13,056) (5,748)


18,755 14,738

Investment Income 21 1,055 142

Profit before tax 19,810 14,880

Less: Provision for Taxation (6,453) (4,613)



Quarter ended

31 March 2018

Note

Rupees in thousand

Quarter ended

31 March 2017

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

79ADAMJEE INSURANCE

Condensed Interim Statement of Comprehensive Income (Unaudited)For the Quarter Ended 31 March 2018

(Restated)

OPERATOR`S FUND


Other comprehensive income for the period - -

Unrealized gains on available-for-sale investment 759 470

Total comprehensive income for the period 14,116 10,737


Quarter ended

31 March 2018

Rupees in thousand

Quarter ended

31 March 2017


Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director



Condensed Interim Cash Flow Statement (Unaudited)For the Quarter Ended 31 March 2018

Operator's Fund


Aggregate

Rupees in thousand

31 March 2018Quarter ended

31 March 2017

Operating cash flows

(a) Takaful activities

Contributions received

Re-takaful / co-takaful payments made

Claims paid

Re-takaful and other recoveries received

Commissions paid

Commissions received

Other underwriting payments

Net cash inflows / (outflows) from takaful activities

(b) Other operating activities

Income tax paid

General, administration and management expenses paid

Loans repaid

Other Receipts

Net cash inflows / (outflows) from other operating activities

Total cash inflows / (outflows) from operating activities

Investment activities

Profit received on bank deposits

Payment for investments

Proceeds from disposal of investments

Fixed capital expenditures

Total cash inflows from investing activities

Financing activities

Contribution to Operator's fund

Qard-e-Hasna received from Operator's Fund

Ceded money

Total cash inflows from financing activities

Net Cash inflows from all activities

Cash at the beginning of the period

Cash at the end of the period

-

-

-

-

(11,974)

-

-

(11,974)

(103)

(22,208)

-

-

(22,311)

(34,285)

1,014

(30,381)

30,381

(172)

842

-

-

-

-

(33,443)

41,119

7,676

220,975

(41,136)

(104,762)

632

-

8,347

(11,915)

72,142

(202)

-

-

9,493

9,291

81,433

2,020

-

-

-

2,020

-

-

-

-

83,453

230,872

314,325

220,975

(41,136)

(104,762)

632

(11,974)

8,347

(11,915)

60,168

(305)

(22,208)

-

9,493

(13,020)

47,148

3,034

(30,381)

30,381

(172)

2,862

-

-

-

-

50,010

271,991

322,001

153,927

(24,772)

(28,282)

8,025

(3,789)

7,881

(11,273)

101,717

42

(9,671)

168

(975)

(10,436)

91,281

467

-

-

(163)

304

-

-

-

-

91,585

83,855

175,440

81ADAMJEE INSURANCE


Operating cash flows

Depreciation

Increase in loans

Increase in assets other than cash

Increase in liabilities other than cash

Investment income

Return on bank deposits

Net profit / (deficit) for the period before tax

Definition of cash



Current and other accounts

Total cash and cash equivalents

(34,285)

(494)

-

80,715

(27,181)

166

889

19,810

134

7,542

7,676

81,433

-

-

69,395

(158,853)

-

2,409

(5,616)

-

314,325

314,325

47,148

(494)

-

150,110

(186,034)

166

3,298

14,194

134

321,867

322,001

91,281

(175)

(168)

191,842

(275,298)

-

959

8,441

162

175,278

175,440


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

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

Operator's Fund


Aggregate

Rupees in thousand

31 March 2018

Operator's Fund


Aggregate

Rupees in thousand

31 March 2018Quarter ended

31 March 2017

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

Quarter ended

31 March 2017



Condensed Interim Statement of Changes in Funds (Unaudited)For the Quarter Ended 31 March 2018

Statutory FundUnappropriated

Profit / (Loss)Total

Operator's Fund

Rupees in thousand

Fair value

Reserve

Balance as at 31 December 2016 - (Audited)

Effect of restatement as disclosed in note 4.1.2

Balance as at 31 December 2016 - (Audited) - restated

Profit for the period 01 Jan 2017 to 31 March 2017Other comprehensive income for the period 01 Jan 2017 to 31 March 2017Total comprehensive profit for the period

Balance as at 31 March 2017 - (Unaudited) - restated

Profit for the period 01 April 2017 to 31 December 2017Other comprehensive loss for the period 01 April 2017 to 31 December 2017Total comprehensive income / (loss) for the period

Balance as at 31 December 2017 - (Audited) - restated

Profit for the period 01 Jan 2018 to 31 March 2018Other comprehensive income for the period 01 Jan 2018 to 31 March 2018Total comprehensive Income for the period

Balance as at 31 March 2018 - (Unaudited)


Deficit for the period 01 Jan 2017 to 31 March 2017Other comprehensive surplus/ (deficit) for the period 01 Jan 2017 to 31 March 2017Total comprehensive deficit for the period


Deficit for the period 01 April 2017 to 31 December 2017Other comprehensive surplus/ (deficit) for the period 01 April 2017 to 31 December 2017Total comprehensive deficit for the period


Deficit for the period 01 Jan 2018 to 31 March 2018Other comprehensive surplus/ (deficit) for the period 01 Jan 2018 to 31 March 2018Total comprehensive deficit for the period


50,000

-

50,000

-

--

50,000

-

--

50,000

-

--

50,000

500

-

--

500

-

--

500

-

--

500

2,791

-

2,791

10,737

-10,737

13,528

36,281

-36,281

49,809

13,357

-13,357

63,166

(5,075)

(6,439)

-(6,439)

(11,514)

(24,665)

-(24,665)

(36,179)

(5,616)

-(5,616)

(41,795)

-

121

121

-

470470

591

-

(463)(463)

128

-

759759

887

-

-

-

-

-

-

-

-

-

52,791

121

52,912

10,737

47011,207

64,119

36,281

(463)35,818

99,937

13,357

75914,116

114,053

(4,575)

(6,439)

-(6,439)

(11,014)

(24,665)

-(24,665)

(35,679)

(5,616)

-(5,616)

(41,295)


Statutory FundAccumulated

surplus / (deficit)Total


Rupees in thousand

Fair value

Reserve

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

83ADAMJEE INSURANCE

Notes to the Condensed InterimFinancial Information (Unaudited)For the Quarter Ended 31 March 2018


Adamjee Insurance Company Limited ("the Operator") is a public limited company incorporated in Pakistan on 28 September 1960 under the Companies Act, 1913 (now the Companies Act, 2017). The Operator is listed on Pakistan Stock Exchange and is engaged in general takaful business comprising fire & property, marine, motor, accident and health and miscellaneous. The registered office of the Operator is situated at Tanveer Building, 27-C-III, MM Alam Road, Gulberg III, Lahore.

The Operator was granted authorization on 23 December 2015 under Rule 6 of the Takaful Rules, 2012 to undertake Window Takaful Operations ("WTO") in respect of general takaful products by Securities and Exchange Commission of Pakistan ("SECP").

The Operator created a Waqf of Rs. 500,000 for Participants' Takaful Fund by signing a Waqf Deed on 01 January 2016. Waqf Deed governs the relationship of the Operator and Participants for management of takaful operations and investments under Participants' Takaful Fund ("PTF") and Operator's Takaful Fund ("OTF") approved by the shariah advisor of the Operator.


The condensed interim financial information has been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 - 'Interim Financial Reporting' as applicable in Pakistan, provisions of and directives issued under Companies Act, 2017, the Insurance Ordinance, 2000, Insurance Rules, 2017, the Insurance Accounting Regulations, 2017 and Takaful Rules, 2012. In case where requirements differ, the provisions of or directives issued under the Companies Act, 2017, the Insurance Ordinance, 2000, Insurance Rules, 2017, the Insurance Accounting Regulations, 2017 and Takaful Rules, 2012 have been followed.

This condensed interim financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with annual financial statements of the Operator for the year ended 31 December 2017.

This Condensed Interim Financial Information reflect the financial position and results of operations of both the PTF and OTF in a manner that the assets, liabilities, income and expenses of the OTF and PTF remain separately identifiable.


3.1 This condensed interim financial information has been prepared under the historical cost convention except that certain investments are carried at fair value and the obligations under certain employee benefits that are measured at present value. Accrual basis of accounting has been used except for cash flow information.

3.2 The Companies Act 2017 (“the Act”) was enacted on 30 May 2017 and replaced and repealed the Companies Ordinance, 1984 (“the repealed Ordinance”) with its application from January 01,2018. Accordingly, this condensed interim financial information has been prepared in accordance with the provision of the Companies Act, 2017.

3.3 Securities and Exchange Commission of Pakistan (“SECP”) vide S.R.O 88(1)/2017 and S.R.O89(1)/2017 dated 9 February 2017 has issued the Insurance Accounting Regulations, 2017 and Insurance Rules, 2017 (the new Rules and Regulations). The application of these Regulations and Rules for the purpose of preparation and presentation of the financial statements was effective from 1 April 2017.

However, SECP vide letter ID/OSM/Adamjee/2017/12269 dated 11 October 2017 has allowed the Operator for the application of new Regulations effective from 1 January 2018. Consequently, the Operator has changed its accounting policies in respect of presentation of financial statements and "available-for-sale" investments as explained in note 4.1 of this condensed interim financial information.


The accounting policies and methods of computation adopted in the preparation of this condensed interim financial information are the same as those applied in the preparation of the financial statements of the Operator for the year ended 31 December 2017 except for change in accounting policies in note 4.1 of this condensed interim financial information.

The Operator has adopted all the applicable new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 01 January 2018, as mentioned in the financial statements




for the year ended 31 December 2017.

There is no significant impact of such changes on this condensed interim financial information of the Operator.



As per Insurance Rules, 2017, the presentation and disclosure requirements of the financial statements have changed under the format prescribed in Annexure II of the said Rules. Accordingly, change in presentation and disclosures of this condensed interim financial information has been applied retrospectively.

4.1.2 Investments

Financial assets were previously measured as per the provisions of repealed SEC (Insurance) Rules, 2002. Starting from financial year 2018, Financial assets fall in the scope of IAS 39 “Financial Instruments - Recognition and Measurement”, and are classified as loans and receivables, held-to-maturity investments or available-for-sale financial assets, as appropriate. Financial assets are initially measured at cost, which is the fair value of consideration given and received respectively. These financial assets are subsequently measured at fair value or cost as the case may be. The Operator determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year end.

Consequent to this change, investments as at December 31, 2017 have been increased by Rs. 128,000 with a corresponding increase in fair value reserve in equity amounting to Rs. 128,000 Furthermore, fair value reserve as at December 31, 2016 has increased by Rs. 121,000.

4.1.2.1 Basis for measurement of available for sale investments

Under the repealed SEC (Insurance) Rules, 2002, the Operator previously recorded its "available-for-sale" investments at cost and remeasured them at lower of cost or market value. The Insurance Rules, 2017 require the initial measurement of "available-for-sale" investments at cost with the subsequent remeasurement at fair value at each reporting date. The unrealized gains and losses arising from changes in fair values are directly recognized in equity in the period in which these arise until the investments are sold or determined to be impaired. The said change in accounting policy has been made in accordance with the requirements of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors".

4.1.2.2 Basis for measurement of held to maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Operator has the positive intention and ability to hold to maturity and are initially measured at cost. These are subsequently measured at amortized cost. Investments intended to be held for an undefined period are not included in this classification.

4.1.3 Contribution revenue

The Insurance Accounting Regulations, 2017 remodel the recognition criteria for the contribution written under a Takaful contract. The said regulations require the Operator to recognize contribution receivable under a Takaful contract / cover note as written from the date of attachment of risk to the contract / cover note. Accordingly, the Operator is required to account for cover notes which are effective as at balance sheet date.

As per repealed SEC (Insurance) Rules, 2002, the contribution was written under a Takaful contract at the time of its issuance. The change is considered to be a change in accounting policy in accordance with IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors". The impact of the same is not considered to be material to the financial statements and accordingly not included in the comparative restated financial information.

4.1.4 Wakala fee

The Operator manages the general takaful operations for the participants and charges 28 % (2017: 32 %) for Fire and Property, 35 % (2017: 35 %) for Marine, Aviation and Transport, 27.5 % (2017: 32.5 %) for Motor, 25 % (2017: 27.5%) for

85ADAMJEE INSURANCE


Health and 25 % (2017: 30 %) for Miscellaneous, of gross contribution written including administrative surcharge as wakala fee against the services.


The preparation of this condensed interim financial information in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the Operator's accounting policies. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

During preparation of this condensed interim financial information, the significant judgments made by the management in applying the Operator's accounting policies and the key sources of estimation and uncertainty were the same as those that applied in the preceding audited annual published financial statements of the Operator for the year ended 31 December 2017.


This unconsolidated condensed interim financial information is presented in Pakistani Rupees, which is also the Operator’s functional currency.


The Operator's financial risk management objectives and policies are consistent with those disclosed in the financial statements for the year ended 31 December 2017.

(Audited)




Aggregate

Rupees in thousand

(Unaudited)

31 March 2018


Operating Assets-Tangible 8.1Capital work-in-progress 8.3

8.1 Operating Assets-Tangible

Opening balance- net book value

Additions during the period 8.2Less:

Book value of disposal during the period

Depreciation charged during the period

8.2 Additions during the period

Furniture and fixture

Motor vehicles

Office equipment

Computer and related accessories

11,860

10,000

21,860

12,182

172

-

(494)

(494)

11,860

-

-

-

172

172

-

-

-

-

-

-

-

-

-

-

-

-

-

-

11,860

10,000

21,860

12,182

172

-

(494)

(494)

11,860

-

-

-

172

172

12,182

10,000

22,182

2,592

10,687

-

(1,097)

(1,097)

12,182

135

8,878

883

791

10,687

8.3 This represent amount advanced to Centegy Technologies (Private) Limited. for implementation of Enterprise Resource Planning software for Takaful Operations.




11 Takaful/ Re-takaful receivables- Unsecured and considered good

Contribution due but unpaid 195,451 152,981

Less: provision for impairment of contribution due but unpaid - -

195,451 152,981

Amount due from other takaful/ re-takaful operators 35,689 30,613

Less: provision for impairment of due from other takaful/ re-takaful operators - -

35,689 30,613

231,140 183,594

Restated(Unaudited) (Audited)

Rupees in thousand

31 December 2017

CostImpairment/


31 March 2018

CostImpairment/


9 Investments

Available-for-sale-Mutual Fund

Moderate allocation plan fund

[447,300 units (2017: Nil units)]

Meezan Islamic Income Fund

30,381

-

-

-

-

30,215

-

-

[580,826 units]

Unrealized gain on revaluation

30,381

-

887

31,268

-

30,215

128

30,343

31 March 2018Note

Rupees in thousand


31 December 2017

10 Loans and other receivables - Considered good

Sales tax recoverable 270 - 270 249

Advance taxes - 1,052 1,052 850

Accrued investment income 253 966 1,219 955

Loan to employees 109 - 109 327

Advances and deposits 1,629 2,640 4,269 3,249

2,261 4,658 6,919 5,630

(Audited)

31 December 2017



Aggregate

Rupees in thousand

(Unaudited)

31 March 2018

87ADAMJEE INSURANCE


(Audited)

31 December 2017



Aggregate

Rupees in thousand

(Unaudited)

31 March 2018

12 Prepayments

Prepaid retakaful contribution ceded

Prepaid monitoring charges (Tracking device)

Others

13 Cash and Bank

Cash and cash equivalents:

Cash in hand

Current and other accounts:

Saving accounts

13.1 Saving accounts carry expected profit rates ranging from 3.5% to 5%.

14 Other Creditors and Accruals

Commission payable

Federal excise duty

Federal insurance fee

Income tax deducted at source

Accrued expenses

Others

-

-

1,625

1,625

134

7,542

7,676

31,767

-

-

2,346

2,417

2,436

38,966

54,914

15,787

-

70,701

-

314,325

314,325

-

13,245

2,625

3,740

-

264

19,874

54,914

15,787

1,625

72,326

134

321,867

322,001

31,767

13,245

2,625

6,086

2,417

2,700

58,840

52,244

12,387

-

64,631

5

271,986

271,991

23,543

3,729

1,715

6,840

3,661

679

40,167

15 Contingencies and Commitments

There are no contingencies and commitments as at 31 March 2018.

(Audited)

31 December 2017



Aggregate

Rupees in thousand

(Unaudited)

31 March 2018

(Audited)

31 December 2017



Aggregate

Rupees in thousand

(Unaudited)

31 March 2018




31 March 2018

Rupees in thousand

31 March 2017

17 Net Claims

Claims paid

Add: Outstanding claims including IBNR closing

Less: Outstanding claims including IBNR opening

Claim expense

Less: Re-takaful and other recoveries received

Add: Re-takaful and other recoveries in respect of

outstanding claims net of impairment (if any) closing

Less: Re-takaful and other recoveries in respect of

outstanding claims net of impairment (if any)

opening

Re-takaful and other recoveries revenue

Net claim expense

18 Wakala Income

Gross Wakala fee

Add: Unearned Wakala fee Opening

Less: Unearned Wakala fee Closing

Wakala Income

19 Re-takaful rebate unearned

Re-takaful rebate received

Add: Re-takaful rebate opening

Less: Re-takaful rebate closing

Net re-takaful rebate

20 Commission Expense

Commission paid or payable

Add: Deferred commission opening

Less: Deferred commission closing

Net commission

71,141

89,452

(107,731)

52,862

8,347

10,156

(10,902)

7,601

20,198

20,213

(27,355)

13,056

73,802

36,376

(81,255)

28,923

7,881

3,510

(7,745)

3,646

15,092

6,347

(15,691)

5,748

16 Net contribution revenue

Gross contribution written

Less: Gross wakala fee

Net contribution written

Opening: Unearned contribution revenue

Closing: Unearned contribution revenue

Contribution earned

Less: Re-takaful contribution ceded

Add: Prepaid re-takaful contribution ceded opening

Less: Prepaid re-takaful contribution ceded closing

Re-takaful expense

104,762

156,637

(153,116)

108,283

4,166

57,607

(41,011)

20,762

87,521

262,412

(71,141)

191,271

194,954

(264,218)

122,007

44,108

52,244

(54,914)

41,438

80,569

28,282

50,166

(25,705)

52,743

8,025

2,402

(9,808)

619

52,124

248,055

(73,801)

174,254

77,140

(186,898)

64,496

41,967

17,660

(38,769)

20,858

43,638

89ADAMJEE INSURANCE


21 Investment income

Profit on mutual funds 166 - 166 -

Profit on bank deposits 889 2,409 3,298 959

1,055 2,409 3,464 959

31 March2017 Operator's

FundParticipants' Takaful Fund

Aggregate

Rupees in thousand

31 March 2018

22 Segment Information

Each class of business has been identified as reportable segment. Class of business wise revenue and results have been disclosed in the profit and loss account prepared in accordance with the requirements of the Insurance Ordinance, 2000. The following is a schedule of class of business wise assets and liabilities.

Fire and Property Damage

Marine, Aviation and

TransportMotor

Accident & Health

Miscellaneous Total

Rupees in thousand


31 March 2018 (Unaudited)

Participants' Takaful FundContribution receivable (inclusive of Federal Excise Duty, Federal Insurance Fee and Administrative Surcharge)Less : Federal Excise Duty Federal Insurance Fee Gross Direct Written Contribution (inclusive of Administrative Surcharge) Facultative inward contributionGross Contribution Written

Contribution earnedRetakaful expenseNet contribution revenueNet rebate on re-takafulNet underwriting surplus / (deficit)

Takaful claimsRe-takaful and other recoveriesNet claims

Direct expenseNet takaful claims and expenses

Underwriting results


Deficit for the period

Segment assetsUnallocated assetsTotal assets

Segment liabilitiesUnallocated liabilitiesTotal liabilities

36,948(5,053)

(316)

31,579114

31,693

17,990(20,809)

(2,819)4,2101,391

(5,442)3,020

(2,422)

42(2,380)

(989)

95,693-

95,693

95,922-

95,922

5,177(708)

(44)

4,425-

4,425

2,891(3,354)

(463)721258

(80)63(17)

(1)(18)

240

7,029-

7,029

6,627-

6,627

193,967(26,526)

(1,658)

165,783-

165,783

68,072(3,181)64,891

-64,891

(59,936)6,825

(53,111)

(8,447)(61,558)

3,333

157,826-

157,826

335,893-

335,893

55,008(7,523)

(470)

47,015-

47,015

21,676-

21,676-

21,676

(30,765)-

(30,765)

(15)(30,780)

(9,104)

41,412-

41,412

105,030-

105,030

15,790(2,159)

(135)

13,496-

13,496

11,378(14,094)

(2,716)2,670

(46)

(12,060)10,854(1,206)

(253)(1,459)

(1,505)

41,701-

41,701

39,380-

39,380

306,890(41,969)(2,623)

262,298114

262,412

122,007(41,438)80,569

7,60188,170

(108,283)20,762

(87,521)

(8,674)(96,195)

(8,025)

2,409

(5,616)

343,661334,770678,431

582,852136,874719,726





TransportMotor

Accident & Health

Miscellaneous Total

Rupees in thousand

31 March 2017


Contribution receivable (inclusive of Federal

Excise Duty, Federal Insurance Fee and

Administrative Surcharge)

Less : Federal Excise Duty

Federal Insurance Fee

Gross Direct Written Contribution

(inclusive of Administrative Surcharge)

Facultative inward contribution

Gross Contribution Written

Contribution earned

Retakaful expense

Net contribution revenue

Net rebate on re-takaful

Net underwriting surplus / (deficit)

Takaful claims

Re-takaful and other recoveries

Net claims

Direct expense

Net takaful claims and expenses

Underwriting results


Deficit for the period

Assets

Segment assets

Unallocated assets

Total assets

Liabilities

Segment liabilities

Unallocated liabilities

Total liabilities

23,040

(2,794)

(201)

20,045

-

20,045

7,616

(9,000)

(1,384)

1,805

421

(793)

596

(197)

(4)

(201)

220

83,349

-

83,349

76,261

-

76,261

4,958

(541)

(44)

4,373

-

4,373

2,669

(3,177)

(508)

674

166

-

-

-

5

5

171

7,962

-

7,962

6,475

-

6,475

87,274

(10,085)

(764)

76,425

12

76,437

24,309

(2,848)

21,461

-

21,461

(29,220)

-

(29,220)

(2,296)

(31,516)

(10,055)

90,823

-

90,823

220,565

-

220,565

127,092

-

(1,258)

125,834

-

125,834

25,358

-

25,358

-

25,358

(22,704)

-

(22,704)

(20)

(22,724)

2,634

52,752

-

52,752

99,019

-

99,019

24,358

(2,778)

(214)

21,366

-

21,366

4,544

(5,833)

(1,289)

1,167

(122)

(26)

23

(3)

(101)

(104)

(226)

41,963

-

41,963

30,313

-

30,313

266,722

(16,198)

(2,481)

248,043

12

248,055

64,496

(20,858)

43,638

3,646

47,284

(52,743)

619

(52,124)

(2,416)

(54,540)

(7,256)

817

(6,439)

276,849

247,312

524,161

432,633

127,207

559,840


(Unaudited)

(Audited)



TransportMotor

Accident & Health

Miscellaneous Total

Rupees in thousand

31 December 2017

91ADAMJEE INSURANCE




TransportMotor

Accident & Health

Miscellaneous Total

Rupees in thousand

31 March 2018

Operator's Fund

Operator's Fund

Wakala fee income

Less : Commission expense

Management expenses

Net Investment Income

Profit before tax

Segment assets

Unallocated assets

Total assets

Segment liabilities


Total liabilities

Operator's Fund

Wakala fee income

Less : Commission expense

Management expenses

Net Investment Income

Profit before tax

Segment assets

Unallocated assets

Total assets

Segment liabilities


Total liabilities

7,984

(3,600)

(5,804)

15,898

-

15,898

13,877

-

13,877

3,685

(1,464)

(2,149)

7,298

-

7,298

12,987

-

12,987

1,556

(628)

(1,013)

1,376

-

1,376

128

-

128

1,437

(591)

(867)

229

-

229

135

-

135

30,849

(5,554)

(8,955)

66,854

-

66,854

72,073

-

72,073

11,881

(1,631)

(2,394)

12,513

-

12,513

57,332

-

57,332

7,933

(1,937)

(3,123)

17,676

-

17,676

16,042

-

16,042

9,873

(1,504)

(2,208)

5,517

-

5,517

12,221

-

12,221

4,540

(1,337)

(2,156)

5,506

-

5,506

5,611

-

5,611

2,047

(558)

(819)

3,471

-

3,471

6,777

-

6,777

52,862

(13,056)

(21,051)

18,755

1,055

19,810

107,310

181,690

289,000

107,731

67,216

174,947

28,923

(5,748)

(8,437)

14,738

142

14,880

29,028

212,093

241,121

89,452

51,860

141,312



TransportMotor

Accident & Health

Miscellaneous Total

Rupees in thousand

31 March 2017

(1,420) (85) 10,340 3,873 1,047

72 (21) 7,856 6,161 670

(Audited)

(Unaudited)

(Unaudited)



TransportMotor

Accident & Health

Miscellaneous Total

Rupees in thousand

31 December 2017




23 Fair values of financial instruments








Transfer between levels of the fair value hierarchy are recognised at the end of the reporting period during which the changes have occurred.

Note Carrying amount Fair value

Availablefor sale


Cash andcash

equivalents

Other

liabilitiesTotal Level 1 Level 2 Level 3 Total

Rupees in thousand

financial

31 March 2018

Financial assets

Investments 9 -

Loan and other receivables * 10 -

Takaful / re-takaful receivables * 11 -

Re-takaful recoveries against outstanding claims * -

Salvage recoveries accrued * -

Wakala and mudarib fee receivable * -

Cash and bank deposits * 13 -

-


Provision for outstanding claims * -

Amount due to other takaful / re-takaful operators * -

Wakala and mudarib fee payable * -

Other creditors and accruals * 14 -

-

31,268

-

-

-

-

-

-

-

-

-

-

-

-

6,919

231,140

45,807

11,800

79,955

-

-

-

-

-

-

-

-

-

-

-

-

322,001

322,001

-

-

-

-

-

-

-

-

-

-

-

-

-

156,637

64,071

79,955

27,073

327,736

31,268

6,919

231,140

45,807

11,800

79,955

322,001

728,890

156,637

64,071

79,955

27,073

327,736

31,268

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

31,268

-

-

-

-

-

-

-

-

-

-

-

-

31,268 375,621 31,26831,268

93ADAMJEE INSURANCE

Note Carrying amount Fair value

Availablefor sale


Cash andcash

equivalents

Other

liabilitiesTotal Level 1 Level 2 Level 3 Total

Rupees in thousand

financial

31 December 2017 (Audited)


Financial assets

Investments 9 -

Loan and other receivables * 10 -

Takaful / re-takaful receivables * 11 -

Re-takaful recoveries against outstanding claims * -

Salvage recoveries accrued * -

Wakala and mudarib fee receivable * -

Cash and bank deposits * 13 -

-


Provision for outstanding claims * -

Amount due to other takaful / re-takaful operators * -

Wakala and mudarib fee payable * -

Other creditors and accruals * 14 -

30,215

-

-

-

-

-

--

30,215

-

-

-

-

-

-

4,204

183,594

34,211

6,800

8,815

-

237,624

-

-

-

-

-

-

-

-

-

-

-

271,986-

271,986

-

-

-

-

-

-

-

-

-

-

-

---

153,116

59,557

8,815

27,884

249,372

30,215

4,204

183,594

34,211

6,800

8,815

271,986

539,825

153,116

59,557

8,815

27,884

249,372 -

30,343

-

-

-

-

-

-

30,343

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

30,343

-

-

-

-

- -

30,343

-

-

-

-

-

-

* The Operator has not disclosed the fair value of these items because their carrying amounts are reasonable approximation of fair value.

24 Movement in Investment - Available for sale

As at beginning of previous year 30,026Additions 60,318Disposals (sales and redemptions) (60,008)Fair value on gains

(excluding net realized gain) 7Impairment / (reversal of losses -As at beginning of current year 30,343Additions 30,381Disposals (sales and redemptions) (30,215)Fair value on gains

(excluding net realized gain) 759Impairment / (reversal of losses -As at end of current period 31,268

Rupees in thousand

31 March 2018




i) Transactions

Subsidiary Company

Contribution underwritten 135 - Contribution received 154 -


Contribution underwritten 26,994 8,237 Contribution received 15,716 5,854 Claims paid 3,889 3,972 Income on bank deposits 304 -

ii) Period end balancesOther related parties

Balances receivable 24,177 21,874 Balances payable 3,245 1,974 Cash and bank balances 54,171 -

31 March 2018

Rupees in thousand

31 March 2017

26 Subsequent events - non adjusting event

There are no significant events that need to be disclosed for the period ended 31 March 2018.


This condensed interim financial information was authorized for issue on 23 April 2018 by the Board of Directors of the Operator.

28 General

28.1 Corresponding figures have been rearranged and reclassified for better presentation, where considered necessary.



The Operator has related party relationship with its associates, subsidiary company, employee retirement benefit plans, key management personnel and other parties. All transactions involving related parties arising in the normal course of business are conducted at commercial terms and conditions. Balances and transactions with related party are disclosed in relevant notes to this financial statements.

Muhammad Ali Zeb


Umer Mansha

Chairman

Muhammad Umar Virk

Director

Muhammad Asim Nagi



Director

95ADAMJEE INSURANCE

Notes



Notes

growth with stability - insurance in pakistan€™s economy witnessed a gdp growth of 5.28% during...

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