1st Quarter Report 2020 · 1st Quarter Report 2020. Inside SPI Insurance Company Limited CONTENT...

1st Quarter Report

2020

Inside SPI Insurance Company Limited

CONTENT

BUSINESS REVIEW

03Key Management

Personnel

04Banks

05Directors’ Review Report to the Members (English)

Corporate Information02

FINANCIAL STATEMENTS (CONVENTIONAL)

07

FINANCIAL STATEMENTS (WINDOW TAKAFUL OPERATIONS)

Condensed Interim Statement of Profit or Loss

25

28

26Condensed Interim Statement

of Comprehensive Income

Condensed Interim Statement of Cash Flows

29

Condensed Interim Statement of Financial Position

24

Condensed Interim Statement of Changes in Funds

27Notes To The Condensed

Interim Financial Statements

Condensed Interim Statement of Profit or Loss

11 12Condensed Interim Statement

of Comprehensive Income

Condensed Interim Statement of Cash Flows

14

Condensed Interim Statement of Financial Position

10

Condensed Interim Statement of Changes in Equity

13Notes To The Condensed

Interim Financial Statements

15

CORPORATE INFORMATION

1st Quarter Report 20202

Mr. Ihsan ul Haq Khan (Member)

Nominations CommitteeMr. Azizullah Memon (Chairman)Mian M. A. Shahid (Member)

Mr. Noshad Ahmed (Secretary)

Investment CommitteeMian M. A. Shahid (Chairman)Mr. Azizullah Memon (Member)

Mr. Naeem Tariq (Member/ Secretary)Mr. M. Saleem Sheikh (Member)

Audit CommitteeMr. M. Asghar (Chairman)Mr. M. Saleem Sheikh (Member)

Mian Mohsin Aslam (Secretary)Mr. Khurram Khan (Member)

AuditorsM/s RSM Avais Hyder Liaquat NaumanChartered Accountants

Tax ConsultantM/s M. Bilal & CompanyChartered Accountants

Legal AdvisorsM/s Kilam LawM/s Mandviwala & Zafar

Registered OfficeSuite # 204-A, Second Floor,Madina City Mall, Abdullah Haroon Road,Karachi.Phone # (021) 35221805Fax # (021) 35221806

Head OfficeUIG House,6 - D, Upper Mall, Lahore.Phone # (042) 35776561-62-67-68, 35756563Fax # (042) 35776560E-mail: [email protected]: www.spiinsurance.com.pk

ChairmanMr. Aziz Ullah Memon

Managing Director & Chief ExecutiveMian M. A. ShahidDirectorsMr. M. Asghar

Mr. Ihsan ul Haq Khan



Mr. Uzman Naveed Chaudhary

Mr. M. Saleem SheikhMr. Khurram Khan

Underwriting CommitteeMian M. A. Shahid (Chairman)

Mr. Imran Mehmood (Secretary)

Claim Settlement Committee:Mr. Uzman Naveed Chaudhry (Chairman)Mian M. A. Shahid (Member)Mr. Naeem Tariq (Member/Secretary)

Reinsurance & Co-insurance Committee:Mian M. A. Shahid (Chairman)

Mr. Faisal Akbar (Member/Secretary)

Ethics, Human Resource & Remuneration Committee:Mr. M. Saleem Sheikh (Chairman)Mian M. A. Shahid (Member)Mr. M. Asghar (Member)Mr. Shahid Malik (Secretary)

Chief Financial OfficerMr. Naeem Tariq

Company Secretary Mr. Noshad Ahmed

Chief Internal AuditorMian Mohsin Aslam

Board of Directors

Committees

Risk Management & Compliance Committee:Mr. Uzman Naveed Chaudhry (Chairman)Mr. Azizullah Memon (Member)

Mr. Naeem Tariq (Member)Mr. Faisal Akbar (Secretary)

Mr. M. Asghar (Member)

KEY MANAGEMENT PERSONNEL

Deputy Managing DirectorMr. Shaheryar Akbar Raja

AdvisorMaj. Gen. (R) Asif Duraiz Akhter

General Manager Re-InsuranceMr. Faisal Akbar (FCA)

Manager Health BusinessMr. Ahmed Salman Mirza

General Manager Claims / MotorMr. Khalid Nazeer Bajwa

Chief Manager UnderwritingMr. Imran Mehmood (ACII)

Chief Manager AccountsMr. Saleem Akhter (FCMA)

Manager Claims / Non MotorMr. Naveed ul Haq Nomani

Assistant General Manager I.TMr. Saquib Obaid ur Rehman

Assistant General Manager AdministrationMr. Shahid Malik

Manager TravelMr. Iqbal Hashmi

Shariah AdvisorMufti Muhammad Umar Ashraf

Head of WTOMr. Faisal Rashid

Head of UnderwritingMr. Muzammil Bashir (ACII)

Manager AccountsMr. Ali Saeed

Managing Director & Chief Executive OfficerMian M. A. Shahid

Conventional Business

Window Takaful Operations

Syed Waqar AzeemChief Operating Officer

3 SPI Insurance Company Limited

Banks

Al-Barka Bank (Pakistan) Limited

Allied Bank Limited

Apna Microfinance Bank Limited

Bank Al-Falah Limited

Bank Al-Habib Limited

Bank Islami Pakistan Limited

Faysal Bank Limited

Finca Microfinance Bank Limted

First Women Bank Limited

Habib Bank Limited

JS Bank Limited

Meezan Bank Limited

National Bank of Pakistan

MCB Bank Limited

SILKBANK Limited

Sindh Bank Limited

Soneri Bank Limited

State Bank of Pakistan

The Karakuram Co-operative Bank Limited

Tameer Microfinance Bank Limited

The Bank Of Punjab

United Bank Limited

Zarai Taraqiati Bank Limited


March 31,2020

March 31, 2019

Inc / (Dec)in %

(Rupees in thousands)

Premium WrittenNet Premium revenueNet ClaimsNet Commission expensesManagement & other expensesUnderwriting resultsInvestment and other IncomeProfit before tax

144,125156,45464,588 9,277

77,5017,1753,7816,699

133,992119,67134,135 14,817 66,565 6,0064,4703,554

7.5630.7489.21

(37.39)16.3919.45

(15.41)88.49

Conventional Insurance business

3.2431.483.24

16.521.84

(15.71)266.85(13.38)(74.57)

23.26(73.29)(73.29)(57.00)

53,16318,04721,26512,05010,57412,8849,2304,8891,657

1061,7621,762

(2,170)

51,49513,72620,59810,34110,38215,2852,5165,6446,513

866,5996,599

(5,049)

Contribution written Net Contribution revenue Wakala fee Net Claims Commission expenses Management & other expenses Direct expenses Net Rebate on Re-Takaful Underwriting results Investment and other Income Benefits paid/payable to participants Surplus in PTF (Deficit)/surplus in OPF

Window Takaful Operations

88.4960.5260.00

6,6994,0710.08

3,5542,5360.05

Consolidated ResultsProfit before TaxProfit after TaxE.P.S.

DIRECTORS’ REPORT TO THE MEMBERS


Credit RatingThe Company is rated single “A” with (stable outlook) by Pakistan Credit Rating Agency Limited (PACRA).

ISO 9001:2015 CertificationDue to overall performance during the year 2019 ISOQAR Limited has approved ISO 9001:2015 in compliance with their requirement and has issued the said certificate of registration, which is valid till March 10, 2022.

Report of the Directors to the members

On behalf of the Board of Directors, We are pleased to present the quarterly review report of SPI Insurance Company Limited together with the un-audited Financial Statements along with its Window Takaful Operations for the first quarter ending March 31, 2020.

Financial Highlights

Overall-performance of the company during the first quarter of 2020 has shown stability against the current market situation. The premium written increased by 7.56% to Rs.144.12 million as on March 31, 2020 from Rs.133.92 million on March 31, 2019. The net premium also increased by 30.74% to Rs.156.45 million as against Rs. 119.67 million in the preceding year. The net claims registered at Rs.64.58 million as on March 31, 2020 from Rs.34.13 million on March 31, 2019 showed an increase of 89.21%. Net commission expenses posted at Rs.9.27 million as against Rs.14.81 million in last year. The management and other expenses stood at Rs.77.50 million as against Rs.66.58 million in the year 2019 showing increase of 16.39%. The investment and other income stood at Rs.3.78 million as against Rs.4.47 million in the year 2019 showing decrease of 15.41%. Underwriting results registered at Rs.7.17 million as against Rs.6.00 million in the year 2019 showing growth of 19.45%. Accordingly, pretax profit posted at Rs.6.69 million as compared to profit of Rs.3.55 million earned by Company for the same period last year as a result the earning per share remained to Rs.0.08 as compared to Rs.0.05 in the year 2019.

The written contribution under Window Takaful Operations for the period ended March 31, 2019 was Rs.53.16 millions against Rs.51.49 million in the preceding year which show increase of 13.24% , while net contribution revenue was Rs.18.04 million as compared to Rs.13.72 million in the year 2019 showed an increase of 31.48%. Wakala fee registered at Rs.21.26 million as against Rs.20.59 million in the preceding year. The net claims expenses stood at Rs.12.05 million as against Rs.10.34 million as on March 31, 2019 showed an increase of 16.52%. Net commission expenses posted at Rs.10.57 million as against Rs.10.38 million in last year. General and administration expenses showed a reduction of 15.71% as compared to same period of last year. Direct expenses registered at Rs. 9.23 million as against Rs.2.51 million in the year 2019. Underwriting results registered at Rs.1.65 million as against Rs.6.51 million showed a decrease of 74.57% as compared to last year. Surplus in Participants Takaful fund registered at Rs.1.76 million as on March 31, 2020 as against Rs.6.59 million in the preceding year. Loss arising from operators fund was Rs.2.17 million as against Rs.5.05 million in the year 2019.

Significant increase/(decrease) from last year in operating results

DIRECTORS’ REPORT TO THE MEMBERS

Capitalization of accumulated ProfitsUn-appropriated profit as at December 31, 2019 is Rs.102,469,544/- as compared to Rs.42,841,213/- at December 31, 2018. The Directors have recommended in board meeting held on March 19, 2020 to increase the paid up capital for a sum of Rs.75 million out of the net profit as on December 31, 2019 by issuance of 15 bonus shares for every 100 existing shares (15%) to the shareholders whose names appear in the share register of the company at the close of business as on April 21, 2020.

Accumulated profit at the commencement of the year 42,841,213Comprehensive income for the year ended December 31, 2019 59,628,331Amount available for appropriation 102,469,544The directors recommend that this amount be appropriated in the following manner:Less: Appropriation Transfer to the proposed bonus issue (75,000,000) Profit carried forward 27,469,544

Future OutlookFirst quarter of 2020 has shown better results as compared with the previous year. However, testing time is ahead due to economic situation and further impact on business due to aftermath of global Pandemic. Basic interest rate in single digits might bring favorable situation in business activity during coming months.

Appreciation and AcknowledgmentWe would like to express our sincere gratitude to The Securities and Exchange Commission of Pakistan, State Bank of Pakistan, our Reinsurers and Bankers for their continued guidance and assistance. We would also like to take this opportunity to extend our thanks to valued customers and the shareholders for reposing their confidence. We also appreciate the efforts of the management and employees for their hard work and dedication towards the consistent growth of the Company.

For and on behalf of the Board of Directors

Mian M. A. Shahid Azizullah MemonDirector & Chief Executive Chairman Karachi: April 28, 2020


7.56

30.74

89.21

(37.39)

16.39

19.45

(15.41)

88.49

3.24

31.48

3.24

16.52

1.84

(15.71)

266.85

(13.38)

(74.57)

23.26

(73.29)

(73.29)

(57.00)

88.49

60.52

60.00

144,125

156,454

64,588

9,277

77,501

7,175

3,781

6,699

53,163

18,047

21,265

12,050

10,574

12,884

9,230

4,889

1,657

106

1,762

1,762

(2,170)

6,699

4,071

0.08

133,992

119,671

34,135

14,817

66,565

6,006

4,470

3,554

51,495

13,726

20,598

10,341

10,382

15,285

2,516

5,644

6,513

86

6,599

6,599

(5,049)

3,554

2,536

0.05


FINANCIAL STATEMENTSFor the quarter ended March 31, 2020

3

4567

81112

111012

7

9

Assets

Property and equipmentIntangible assetsInvestments Equity securities Government securities Term depositsTotal assets in Window Takaful Operations - Operator's FundLoans, advances and other receivablesInsurance / Reinsurance receivablesReinsurance recoveries against outstanding claimsDeferred commission expensePrepaymentsCash and bank balancesTotal AssetsEQUITY AND LIABILITIESCAPITAL AND RESERVESOrdinary Share CapitalCapital reserve Fair value reserveRevenue reserve Un-appropriated profitTotal EquityLIABILITIESUnderwriting Provisions Outstanding claims (including IBNR) Unearned premium reserves Unearned reinsurance commissionRetirement benefit obligationsDeferred tax liabilityLease liabilitiesInsurance / Reinsurance payablesOther creditors and accrualsTotal liabilities in Window Takaful Operations - Operator's FundTaxation - provision less paymentTotal LiabilitiesTotal Equity and LiabilitiesCONTINGENCIES

99,082,475 182,514

197,931,611 107,184,650 69,430,000 117,053,818 143,368,341 400,023,467 70,984,825 33,980,684 92,523,721 24,680,831 1,356,426,937

500,000,000

124,088,241

108,148,656 732,236,897

196,289,462 200,256,755 10,035,228 8,654,906 13,928,536 18,324,275 69,297,948 43,855,256 60,172,129 3,375,545 624,190,040 1,356,426,937

-

102,680,650 192,120

205,835,025 118,684,650 69,430,000 127,674,024 145,125,662 411,759,189 79,196,657 29,167,009 77,374,815 32,113,521 1,399,233,322

500,000,000

131,991,655

102,469,544 734,461,199

176,934,310 233,163,578 12,527,628 8,654,906 12,439,327 21,483,894 64,181,046 61,970,656 70,230,563 3,186,215 664,772,123 1,399,233,322

- The annexed notes 1 to 17 form an integral part of these condensed interim financial statements.

(Un-audited)March 31,

2020Rupees

Note

(Audited)December 31,

2019Rupees

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION (UN-AUDITED) as at March 31, 2020

1st Quarter Report 202010Chief Executive Officer DirectorDirectorChairman

CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS (UN-AUDITED)for the three-month period ended March 31, 2020

Net insurance premiumNet insurance claims Net commission expenseInsurance claims expensesManagement expensesUnderwriting resultsInvestment incomeOther incomeOther expensesResults of operating activitiesFinance cost - on lease liabilities(Loss) for the period from Window Takaful Operator's FundProfit before taxIncome tax expenseProfit after tax

Earnings per share - after tax

101112

13

7

The annexed notes 1 to 17 form an integral part of these condensed interim financial statements.

March 31,2020

Rupees

NoteMarch 31,

2019Rupees

119,670,851 (34,135,499) (14,817,441) (48,952,940) (64,711,479) 6,006,432 4,337,026

133,075 (1,625,487) 8,851,046

(248,641) (5,048,605) 3,553,800 (1,018,118) 2,535,682

0.05

156,453,632 (64,587,789) (9,277,515) (73,865,304) (75,413,842) 7,174,486 3,691,244

90,193 (1,276,476) 9,679,447

(810,573) (2,170,160) 6,698,714 (2,627,990) 4,070,724

0.08

11 SPI Insurance Company LimitedChief Executive Officer DirectorDirectorChairman

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)


for the three-month period ended March 31, 2020

7

4,070,724

(7,903,414)

1,608,388

(6,295,026) (2,224,302)

2,535,682

23,651,784 1,119,933

24,771,717 27,307,399

Profit for the periodOther comprehensive incomeItems that may be reclassified subsequently to profit or loss: Unrealised gain / (loss) on available for sale investments From Window Takaful Operations - Operator's fund Unrealised gain / (loss) on available for sale investments

Total comprehensive income / (loss) for the period

March 31,2020

Rupees

NoteMarch 31,

2019Rupees


Balance as at January 01, 2019

Total comprehensive income for the period

Profit for the period

Other comprehensive income

Balance as at March 31, 2019

Balance as at January 01, 2020

Total comprehensive income for the period

Profit for the period

Other comprehensive income

Balance as at March 31, 2020

500,000,000

-

-

-

500,000,000

500,000,000

-

-

-

500,000,000

(382,655)

-

23,651,784

23,651,784

23,269,129

131,991,655

-

(7,903,414)

(7,903,414)

124,088,241

42,841,213

2,535,682

1,119,933

3,655,615

46,496,828

102,469,544

4,070,724

1,608,388

5,679,112

108,148,656

542,458,558

2,535,682

24,771,717

27,307,399

569,765,957

734,461,199

4,070,724

(6,295,026)

(2,224,302)

732,236,897


Capital reserve Revenue reserve

Ordinary share capital

Fair value reserve

Un-appropriated profit

Total

--------------------------------------- Rupees ---------------------------------------

D e s c r i p t i o n

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)for the three-month period ended March 31, 2020

13 SPI Insurance Company LimitedChief Executive Officer DirectorDirectorChairman

OPERATING ACTIVITIES

a) Underwriting activities

Premiums receivedReinsurance premiums paidClaims paidReinsurance and other recoveries receivedCommission paidCommission receivedNet cash generated from underwriting activities

165,094,743 (39,950,774) (40,557,399)

3,536,594 (25,375,397)

5,617,828 68,365,595

134,213,829 (27,356,066) (36,514,656)

10,805,695 (17,638,871)

3,841,682 67,351,613

b) Other operating activities

Income tax paidFinance cost paid on lease liabilitiesPayments against short term leasesRetirement benefit obligations paidGeneral management expenses paidOther operating paymentsLoan (given to) / refunded from employeesNet cash flows used in other operating activitiesTotal cash (used in) all operating activities

(949,451) (810,573)

(7,412,652) -

(116,107,631) (6,321,592)

(308,794) (131,910,693)

(63,545,098)

(866,457)

- -

(60,000) (68,119,218)

1,310,587 (530,263)

(68,265,351) (913,738)

INVESTING ACTIVITIES 2,931,938

11,500,000 (585,837)

- 13,846,101

5,281,855

49,177,999 (587,390)

- 53,872,464

Profit / return receivedPayments for investments - NetFixed capital expenditureProceeds from disposal of property and equipmentTotal cash generated from investing activities

FINANCING ACTIVITIES

Payments against lease liabilitiesTotal cash (used in) financing activitiesNet cash (used in) all activitiesDeposits maturing within 3 monthsCash and cash equivalents at beginning of the periodCash and cash equivalents at end of the period

(3,159,522) (3,159,522) (52,858,519)

1,554,443 77,539,350 26,235,274

(2,908,429)

(2,908,429)50,050,297

- 27,489,053 77,539,350

Reconciliation to statement of profit or loss

Operating cash flowsDepreciation / amortization expensesProvision for doubtful debtsGain on disposal of fixed assetsIncrease in assets other than cashIncrease in liabilities Investment and other incomeLease charges(Loss) for the period from Window Takaful Operator's FundProvision for taxationProfit for the period

(63,545,098) (150)

- -

26,855,007 37,422,464 3,691,244 (810,573)

(2,170,160) (2,627,990)

4,070,724

(913,738)

(4,550,024) 4,999,130

- (11,303,900)

16,282,552 4,337,026 (248,641)

(5,048,605) (1,018,118)

2,535,682

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

Cash and bank balances 24,680,831 1,554,443 26,235,274

77,539,350 - 77,539,350

Deposits maturing within 3 months


CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED)for the three-month period ended March 31, 2020

March 31,2020

Rupees

March 31, 2019

Rupees


LEGAL STATUS AND NATURE OF BUSINESSSPI Insurance Company Limited (the Company) is an unquoted public limited company incorporated in Islamabad, Pakistan on February 15, 2005 under the repealed Companies Ordinance, 1984 (now Companies Act, 2017). The Company is engaged in non-life insurance business mainly comprising of fire, marine, motor, crop & livestock, health and miscellaneous. The Company commenced its commercial operations on April 13, 2005. The registered office of the Company is situated at suite # 204-A, Second Floor, Madina City Mall, Abdullah Haroon Road, Karachi, in the province of Sindh and principal office of the Company is situated at UIG House 6-D, 1st Floor, Upper Mall, Lahore, in the province of Punjab, Pakistan.The Company has been allowed to work as Window Takaful Operator through License No. 3 on November 20, 2014 by Securities and Exchange Commission of Pakistan under Window Takaful Rules, 2012 to carry on Islamic General Insurance in Pakistan. It has not transacted any business outside Pakistan.

BASIS OF PREPARATION Statement of compliance

These condensed interim financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of:

- International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and

- Provisions of and directives issued under the Companies Act, 2017, Insurance Ordinance, 2000, Insurance Rules 2017, Takaful Rules, 2012 and Insurance Accounting Regulations, 2017.

Where the provisions of and directives issued under the Companies Act, 2017, the Insurance Ordinance, 2000, the Insurance Rules 2017, Takaful Rules, 2012 and the Insurance Accounting Regulations, 2017 differ with the requirements of IAS 34, the provisions of and directives issued under the Companies Act, 2017, the Insurance Ordinance, 2000, the Insurance Rules 2017, Takaful Rules, 2012 and the Insurance Accounting Regulations, 2017 have been followed.

Total assets, total liabilities, profit / (loss), comprehensive income of the Window Takaful Operations of the Company referred to as the Operator's Fund has been presented in these condensed interim financial statements in accordance with the requirements of Circular 25 of 2015 dated 9 July, 2015.

These condensed interim financial statements do not include all the information required in the annual financial statements. Accordingly, these condensed interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2019.

These condensed interim financial statements have been presented in Pakistani Rupees, which is also the functional currency of the Company.

Estimates, judgements and risk management policies

The preparation of these condensed interim financial statements in conformity with approved accounting standards, as applicable in Pakistan, requires the management to make judgments, estimates and assumptions that affect application of accounting policies and reported amounts of assets, liabilities, income and expenses.

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)for the three-month period ended March 31, 2020

1

22.1

2.1.1

2.1.2

2.1.3

2.1.4

2.2.1

2.2


The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on amounts recognized in these condensed interim financial statements are the same as those disclosed in the audited financial statements of the Company for the year ended December 31, 2019.

Risk management policies and procedures are consistent with those disclosed in the audited financial statements of the Company for the year ended December 31, 2019.

Basis of measurementThese condensed interim financial statements have been prepared under the historical cost convention except certain financial instruments that are carried at fair value. Significant Account PoliciesThe accounting policies and methods of computation followed in the preparation of these condensed interim financial statements are the same as those applied in the preparation of the audited financial statements of the Company for the year ended December 31, 2019.

Application of new and revised international financial reporting standardsStandards, amendments to published approved accounting standards and interpretations becoming effective in current period:There are certain new standards, amendments and International Financial Reporting Interpretations Committee (IFRIC) interpretations that became effective during the period and are mandatory for accounting periods of the Company beginning on or after January 01, 2020 but are considered not to be relevant or not to have any significant effect on the Company's operations. The new standards, amendments and IFRIC interpretations that are relevant to the operations of the Company are disclosed in the audited financial statements of the Company for the year ended December 31, 2019.

Standards, amendments to published approved accounting standards and interpretations becoming effective in future periods:There are other new standards, amendments and IFRIC interpretations that are mandatory for accounting periods of the Company beginning on or after January 01, 2020 but are considered not to be relevant or not to have any significant effect on the Company's operations. The new standards, amendments and IFRIC interpretations that are relevant to the operations of the Company are disclosed in the audited financial statements of the Company for the year ended December 31, 2019.


Operating fixed assets:

Owned assets 62,611,178 64,788,393

Leased assets 36,471,297 37,892,257

99,082,475 102,680,650

PROPERTY AND EQUIPMENT

2.2.2

2.3

2.4

2.52.5.1

2.5.2

3

March 31, 2020

December 31, 2019

(Un-audited) (Audited)Rupees Rupees


4.1

4.2

5.1

5.2

4

5


Additions and deletions in property and equipmentFollowing are the major additions at cost and deletions at net book value in fixed assets:

Tangible owned assetsFurniture and fixtures Office equipment Computer equipment Motor vehicles

33,25019,099

300,988232,500585,837

506,73567,1009,555

391,300974,690

- -

-

-

- -

- -

--

Leased assetsLeased vehicles -

-

-

-

March 31, 2020 March 31, 2019Additions (at cost)

RupeesMarch 31, 2020 March 31, 2019

Deletion (at net book value)

Rupees

March 31,2020

December 31, 2019

March 31,2020

December 31, 2019

March 31,2020

December 31, 2019

(Un-audited) (Audited) (Un-audited) (Audited) (Un-audited) (Audited)

Held to maturity24 24 104,000,000 115,500,000 105,630,207 117,130,207 1 1 1,700,000 1,700,000 1,554,443 1,554,443

25 25 105,700,000 117,200,000 107,184,650 118,684,650

Pakistan investment bonds (Note 5.1)Treasury bill (Note 5.2)

INVESTMENTS IN GOVERNMENT SECURITIES

Number of Certificates Face Value Value of Certificates

-------------------------------- Rupees --------------------------------

Shares Cost Fair Value Shares Cost Fair Value

Number NumberAvailable for saleRelated party

Listed sharesApna Microfinance Bank Limited 8,462,237

50,011,000

197,847,101

8,462,237

50,011,000 205,716,981Others

Listed sharesSaudi Pak Leasing Company Limited 16,065

226,625

9,800

16,065

226,625 15,744(Note 4.1)

Kohinoor Industries Limited 31,000

313,100

74,710

31,000

313,100 102,300Callmate Telips Telecom Limited 32,000 - - 32,000 - -

(Note 4.2)

8,541,302 50,550,725 197,931,611 8,541,302 50,550,725 205,835,025

(Audited)(Un-audited)March 31 , 2020 December 312, 019

---------- Rupees ---------- ---------- Rupees ----------

INVESTMENTS IN EQUITY SECURITIES

These represent PIBs held with different banks having maturity periods ranging from 5 to 10 years (December 31, 2019: 5 to 10 years). These carry return at the rate ranging between 6.60% to 13.50% (December 31, 2019: 6.60% to 13.50%) per annum. These include bonds having face value of Rs. 52.2 million (December 31, 2019: Rs. 52.2 million) held with State Bank of Pakistan as per requirements of Section 29 of the Insurance Ordinance, 2000.

This represent treasury bill having maturity period of 1 year (December 31, 2019: 1 year). This carries return at the rate of 12.40% per annum (December 31, 2019: 12.40% per annum).

These shares are deposited into CDC account and blocked on the instructions of Securities and Exchange Commission of Pakistan (SECP) in accordance with Circular No. 9 of 2006 issued by the SECP, which requires promoters / majority shareholders of the company to deposit their shares into CDC blocked account.

Trading in shares has been suspended.


6.1

6.2

7

8

Assets Property and equipment Intangible Assets Investments - Equity securities Investments - Term deposits Loans and other receivables Deferred commission expense Prepayments Cash and BankTotal assetsTotal liabilities (Loss) for the period from Window Takaful Operations - Operator's FundOther comprehensive income from Window Takaful OperationsTotal comprehensive (loss) for the period

Unsecured and considered good Due from insurance contract holders Less: provision for impairment

Due from insurers / reinsurers Less: provision for impairment

2,935,786 138,585

55,073,351 9,081,302

40,277,783 16,222,877

438,475 3,505,865

127,674,024 70,230,563 (5,048,605)

1,119,933 (3,928,672)

158,550,896 (14,299,866) 144,251,030

304,471,202

(36,963,043) 267,508,159 411,759,189

2,818,250 131,656

56,681,739 9,081,302

31,938,724 14,064,906

288,677 2,048,564

117,053,818 60,172,129 (2,170,160)

1,608,388 (561,772)

137,580,928 (14,299,866) 123,281,062

313,705,448

(36,963,043) 276,742,405 400,023,467

Held to maturityDeposits maturing within 12 months Related party Others

6.16.2

12,930,000 56,500,00069,430,000


12,930,000 56,500,00069,430,000

6 INVESTMENTS IN TERM DEPOSITS

Note 2020 2019

(Un-audited) (Audited)

Rupees Rupees

March 31, December 31,

Note 2020 2019


Rupees Rupees


These represent term deposit held with Silk Bank Limited carrying return at rates ranging between 8.5% to 11.35% (December 31, 2019: 5.0% to 9.0% ) per annum. The above deposits are due to mature by December 2020 (December 31, 2019: December 2020 ).

These represent term deposits held with different banks carrying return at rates ranging between 10.3% to 13.5% (December 31, 2019: 5.6% to 8%) per annum. The above deposits are due to mature by October 2020 (December 31, 2019: October 2020).

WINDOW TAKAFUL OPERATIONS - OPERATOR'S FUND

INSURANCE / REINSURANCE RECEIVABLES

2020 2019(Un-audited) (Audited)

Rupees Rupees



Written gross premiumAdd: Unearned premium reserve - OpeningLess: Unearned premium reserve - Closing Premium earned

Less: Reinsurance premium cededAdd: Prepaid reinsurance premium - OpeningLess: Prepaid reinsurance premium - Closing Reinsurance expense

133,991,725 220,918,911 (204,964,792) 149,945,844

29,039,537 67,780,814 (66,545,358) 30,274,993 119,670,851

144,124,775 233,163,578 (200,256,755) 177,031,598

35,833,430 74,528,333 (89,783,797) 20,577,966 156,453,632


CONTINGENCIESThere are no contingencies or commitments except those reported in the audited financial statements for the year ended December 31, 2019.

NET INSURANCE PREMIUM

Claims paidAdd: Outstanding claims including IBNR - ClosingLess: Outstanding claims including IBNR - Opening Claims expense

Less: Reinsurance and other recoveries receivedAdd: Reinsurance and other recoveries in respect of outstanding claims - ClosingLess: Reinsurance and other recoveries in respect of outstanding claims - Opening Reinsurance and other recoveries revenue

36,514,656 196,069,339 (190,054,492) 42,529,503

10,805,695 77,652,511 (80,064,202) 8,394,004 34,135,499

40,557,399 196,289,462 (176,934,310) 59,912,551

3,536,594 70,984,825 (79,196,657)

(4,675,238) 64,587,789

NET INSURANCE CLAIMS

10

11

NET COMMISSION EXPENSE 12

Commission paid or payableAdd: Deferred commission expense - OpeningLess: Deferred commission expense - Closing Net Commission

Less: Commission received or recoverableAdd: Unearned Reinsurance commission - OpeningLess: Unearned Reinsurance commission - Closing Commission from reinsurers

19,096,697 28,800,679 (27,777,586) 20,119,790

3,841,682 10,545,652 (9,084,985) 5,302,349 14,817,441

22,201,418 29,167,009 (33,980,684) 17,387,743

5,617,828 12,527,628 (10,035,228) 8,110,228 9,277,515

9

Note 2020 2019

Rupees Rupees

March 31, March 31,

Note 2020 2019

Rupees Rupees

March 31, March 31,

Note 2020 2019

Rupees Rupees

March 31, March 31,



14 SEGMENT INFORMATIONMARCH 31, 2020

Fire andpropertydamage

Marine, aviation andtransport

Motor Crop andlivestock

Miscellaneous Total

---------------------------------- Rupees ----------------------------------

Gross written premium Gross direct premium Facultative inward premium Administrative surchargeInsurance premium earnedInsurance premium ceded to reinsurersNet insurance premiumCommission incomeNet underwriting incomeInsurance claimsInsurance claims recovered from reinsurersNet claimsCommission expenseManagement expensesNet insurance claims and expensesUnderwriting resultsNet investment incomeOther incomeOther expensesFinance cost(Loss) for the period from Window Takaful Operator's FundProfit before tax

Segment assetsUnallocated assets

Segment assets- takaful (OPF)Unallocated assets - takaful (OPF)

Segment liabilitiesUnallocated liabilities

Segment liabilities- takaful (OPF)Unallocated liabilities - takaful (OPF)

2,261,890 2,255,199 -

6,691 3,718,492

(233,553) 3,484,939 -

3,484,939 (3,312,465)

- (3,312,465)

(411,603) (1,183,543)

(4,907,611) (1,422,672)

7,074,768

- -

19,279,060 -

- -

61,107,591 44,142,371 15,600,967 1,364,253 72,213,482

(9,094,436) 63,119,046 1,815,904 64,934,950

(8,894,429) (5,130,435) (14,024,864)

(7,245,679) (31,974,782)

(53,245,325) 11,689,625

198,191,633

- -

138,498,498 -

- -

22,159,924 15,312,551 6,124,850 722,523 22,313,618 (5,742,439) 16,571,179 570,335 17,141,514 (1,651,027) 153,000 (1,498,027)

(4,307,556) (11,595,265)

(17,400,848) (259,334)

68,961,881

- -

25,030,306 -

- -

35,208,268 26,544,296 8,141,650 522,322 47,512,723

(11,334,119) 36,178,604 2,201,633 38,380,237

(26,937,890) 214,656

(26,723,234) (3,181,102)

(18,422,861) (48,327,197) (9,946,960)

174,558,818

- -

133,430,446 -

- -

144,124,775 111,231,103 29,937,737 2,955,935 177,031,598

(20,577,966) 156,453,632 8,110,228 164,563,860

(59,912,551) (4,675,238) (64,587,789)

(17,387,743) (75,413,842)

(157,389,374) 7,174,486 3,691,244 90,193 (1,276,476) (810,573) (2,170,160) 6,698,714

594,772,774 644,600,345 1,239,373,119

- 117,053,818

117,053,818 1,356,426,937 475,879,394 88,138,517

564,017,911 -

60,172,129 60,172,129

624,190,040

23,387,102 22,976,686 70,270 340,146 31,273,283 5,826,581 37,099,864 3,522,356 40,622,220 (19,116,740) 87,541 (19,029,199)

(2,241,803) (12,237,391)

(33,508,393) 7,113,827

145,985,674

- -

159,641,084 -

- -

Income from government securities - Held to maturity - Return on government securities

Income from term deposits - Held to maturity - Return on term depositsTotal investment incomeLess: Investment related expenses

4,225,559

205,703 4,431,262

(94,236) 4,337,026

3,091,818

2,142,615 5,234,433 (1,543,189) 3,691,244

INVESTMENT INCOME

13

Note 2020 2019

Rupees Rupees

March 31, March 31,


MARCH 31, 2019Fire andpropertydamage


Motor Miscellaneous Total

---------------------------------- Rupees ----------------------------------

Gross written premium Gross direct premium Facultative inward premium Administrative surchargeInsurance premium earnedInsurance premium ceded to reinsurersNet insurance premiumCommission incomeNet underwriting incomeInsurance claimsInsurance claims recovered from reinsurersNet claimsCommission expenseManagement expensesNet insurance claims and expensesUnderwriting resultsNet investment incomeOther incomeOther expensesFinance cost(Loss) for the period from Window Takaful Operator’s FundProfit before tax

Segment assetsUnallocated assets

Segment assets- takaful (OPF)Unallocated assets - takaful (OPF)

Segment liabilitiesUnallocated liabilities

Segment liabilities- takaful (OPF)Unallocated liabilities - takaful (OPF)

7,508,855 7,424,865 - 83,990 5,423,961 (1,894,389) 3,529,572 - 3,529,572 (20,681,736)

(2,332) (20,684,068)

(556,556) (3,626,411) (24,867,035) (21,337,463)

32,931,706

- -

23,213,618 -

- -

47,860,786 43,420,736 3,187,087 1,252,963 56,870,120 (9,380,151) 47,489,969 2,475,463 49,965,432 (17,542,675) 5,070,445

(12,472,230) (6,111,820) (23,114,429) (41,698,479) 8,266,953

162,706,370

- -

145,697,794 -

- -

20,412,735 15,047,086

4,700,236 665,413 20,089,772

(623,054) 19,466,718

49,973 19,516,691 (1,241,626)

(462,539) (1,704,165)

(4,054,406) (9,858,357) (15,616,928) 3,899,763

58,092,072

- -

21,503,233 -

- -

42,304,333 29,946,498 11,715,311

642,524 41,151,007 (10,675,633) 30,475,374

929,872 31,405,246 (12,105,150)

620,809 (11,484,341)

(7,854,768) (20,430,933) (39,770,042)

(8,364,796)

194,857,875

- -

130,608,161 -

- -

133,991,725 111,345,427

19,655,917 2,990,381 149,945,844 (30,274,993) 119,670,851

5,302,349 124,973,200 (42,529,503) 8,394,004

(34,135,499) (20,119,790) (64,711,479)

(118,966,768) 6,006,432

4,337,026 133,075 (1,625,487) (248,641) (5,048,605) 3,553,800

594,651,189

676,908,109 1,271,559,298

- 127,674,024 127,674,024

1,399,233,322 486,806,563

107,734,997 594,541,560

- 70,230,563 70,230,563

664,772,123

15,905,016 15,506,242

53,283 345,491 26,410,984 (7,701,766) 18,709,218 1,847,041 20,556,259 9,041,684 3,167,621

12,209,305 (1,542,240) (7,681,349) 2,985,716 23,541,975

146,063,166

- -

165,783,757 -

- -



Crop andlivestock


Related parties comprise of chief executive officer, directors, major shareholders, key management personnel, associated companies, entities with common directors and post employment benefit plans. The transactions with related parties are carried out at commercial terms and conditions and compensation to key management personnel is on employment terms.Transactions with related parties other than those which have been specifically disclosed elsewhere in these condensed interim financial statements are follows:

RELATED PARTY TRANSACTIONS15

Nature of relationship Type of transactionMarch 31,

2020March 31,

2019

Rupees Rupees

United Track Systems (Private) Limited - associated company(Common directorship and 43% shareholding)

Apna Microfinance Bank Limited - associated company(Common Directorship)

Motor tracking device chargesPurchase of tracking devices

Bank ChargesProfit on bank deposits Purchase of shares

353,481-

205,465-

1,5591,665

-

1,7061,868

50,000,000

Silk Bank Limited - associated company(23% shareholding)

Tawasul Health Care TPA (Pvt.) Limited - associated company(Common directorship)

Insurance premium Balance at beginning of the period Gross insurance premium written Received / adjusted during the period Balance at end of the period Insurance claim expense Outstanding claims at beginning of the period Gross claim expense for the period Claim paid during the period Outstanding claims at end of the period Other transactions during the period Bank charges Profit on term deposit receipts Profit on bank deposits Advisory servicesAdvance paid against services - net

42,285,116 7,766,852 (19,219,392) 30,832,576

13,095,233 945,977 (3,298,228) 10,742,982

8,691 (13,942) 1,854

- 350,000

16,858,546 940,491

3,643,354 1,076,449 1,597,360 4,357,911

28,474,111 45

13,804,902 980,586

2,958,653 874,145

1,380,491 2,913,250

22,912,027 40

19,764,912 5,668,500 (8,065,788) 17,367,624

18,598,600 1,886,241 (3,783,057) 16,701,784

7,369 8,168 1,935

1,664,941 400,000

Compensation of Chief executive, directors and executivesManagerial remunerationContribution to defined contribution planRent and house maintenanceUtilitiesMedicalOthers

Number of persons

Provident fund planContributions made during the period 1,566,310 1,701,993

16

17

DATE OF AUTHORIZATION FOR ISSUE

GENERAL

These condensed interim financial statements were authorized for issue by Board of Directors in its meeting held on April 28, 2020.

Separate financial statements of Window Takaful Operations have been annexed to these condensed interim financial statements as required under Takaful Rules, 2012.


For the quarter ended March 31, 2020


Property and equipment

Intangible assets

Investments

Equity securities

Term deposits

Loans and other receivables

Takaful / Retakaful receivables

Retakaful recoveries against

outstanding claims

Deferred commission expense

Prepayments

Cash and bank balances

Total Assets

Funds and Liabilities

Capital Reserves

Waqf money

Statutory reserve

Fair value reserve

Revenue Reserves

Undistributed surplus

Unappropriated profit

Total Funds

Liabilities

Underwriting Provisions

Outstanding claims (including IBNR)

Unearned contribution

Contribution deficiency reserves

Unearned re-takaful rebate

Takaful / Retakaful payables - unsecured

Other creditors and accruals

Total Liabilities

Total Funds and Liabilities

10,372,748

131,656

56,681,739

10,181,302

31,938,724

184,096,077

19,981,210

14,064,906

38,266,625

4,653,071

370,368,058

500,000

50,000,000

4,797,899

24,739,351

2,083,790

82,121,040

64,758,417

80,367,820

7,199,860

8,178,413

23,193,349

104,549,159

288,247,018

370,368,058

2,818,250

131,656

56,681,739

9,081,302

31,938,724

-

-

14,064,906

288,677

2,048,564

117,053,818

-

50,000,000

4,797,899

-

2,083,790

56,881,689

-

-

-

-

-

60,172,129

60,172,129

117,053,818

7,554,498

-

-

1,100,000

-

184,096,077

19,981,210

-

37,977,948

2,604,507

253,314,240

500,000

-

-

24,739,351

-

25,239,351

64,758,417

80,367,820

7,199,860

8,178,413

23,193,349

44,377,030

228,074,889

253,314,240

11,102,810

138,585

55,073,351

10,181,302

40,277,783

179,134,330

20,784,167

16,222,877

40,102,504

14,773,647

387,791,356

500,000

50,000,000

3,189,511

22,976,707

4,253,950

80,920,168

61,741,606

89,053,969

5,901,200

8,586,673

20,688,710

120,899,030

306,871,188

387,791,356

2,935,786

138,585

55,073,351

9,081,302

40,277,783

-

-

16,222,877

438,475

3,505,865

127,674,024

-

50,000,000

3,189,511

-

4,253,950

57,443,461

-

-

-

-

-

70,230,563

70,230,563

127,674,024

8,167,024

-

-

1,100,000

-

179,134,330

20,784,167

-

39,664,029

11,267,782

260,117,332

500,000

-

-

22,976,707

-

23,476,707

61,741,606

89,053,969

5,901,200

8,586,673

20,688,710

50,668,467

236,640,625

260,117,332

3

4

5

9

11

6

9

8

10

7

Assets

As at March 31, 2020

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION (UN-AUDITED)

Note

------------------------------------------------Rupees--------------------------------------------------

Participants' takaful fund Operator's fund Total


2019


2020


2020


2020


2019


2019


Net takaful contribution

Net takaful claims

Contribution deficiency expense

Net rebate on re-takaful

Direct expenses

Takaful claims

Underwriting results

Wakala fee

Investment income

Other income

Commission expense

Management expenses

Other expenses

Profit / (loss) for the period

18,047,361

(12,049,484)

(1,298,660)

4,888,828

(7,931,043)

(16,390,359)

1,657,002

21,265,285

12,083

115,693

21,393,061

(10,573,546)

(12,413,688)

(470,345)

(23,457,579)

(407,516)

-

-

-

-

-

-

-

21,265,285

-

22,134

21,287,419

(10,573,546)

(12,413,688)

(470,345)

(23,457,579)

(2,170,160)

18,047,361

(12,049,484)

(1,298,660)

4,888,828

(7,931,043)

(16,390,359)

1,657,002

-

12,083

93,559

105,642

-

-

-

-

1,762,644

-

-

-

-

-

-

-

20,597,962

-

20,618

20,618,580

(10,382,316)

(14,692,939)

(591,930)

(25,667,185)

(5,048,605)

13,726,484

(10,341,449)

-

5,643,823

(2,515,642)

(7,213,268)

6,513,216

-

27,224

58,367

85,591

-

-

-

-

6,598,807

8

9

10

12

11


CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS (UN-AUDITED)

Note

------------------------------------------------Rupees--------------------------------------------------


March31,2019

March 31,2020

March 31,2020

March 31,2020

March 31,2019

March 31,2019

13,726,484

(10,341,449)

-

5,643,823

(2,515,642)

(7,213,268)

6,513,216

20,597,962

27,224

78,985

20,704,171

(10,382,316)

(14,692,939)

(591,930)

(25,667,185)

1,550,202

25Window Takaful Operations

SPI Insurance Company Limited


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1,608

,388

4,7

97,8

99

1

3,845

,165

(

5,048

,605)

-

(5,04

8,605

)

8,79

6,560

4,25

3,950

(

2,170

,160)

-

(2,17

0,160

)

2,0

83,7

90

64,31

6,586

(5,04

8,605

)

1,11

9,933

(3,92

8,672

)

60,38

7,914

57,44

3,461

(2,17

0,160

)

1,60

8,388

(561

,772)

56,8

81,6

89

1

18,01

4,201

1,55

0,202

1,11

9,933

2,670

,135

1

20,68

4,336

80,92

0,168

(4

07,51

6)

1,60

8,388

1,200

,872

82,1

21,0

40

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Sub

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------

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------

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CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED)

Operating cash flows:

a) Operating activities:

Contribution received

Wakala fees received

Retakaful contribution paid

Claims paid

Retakaful and other recoveries received

Commission paid

Retakaful rebate received

Direct expenses

Net cash flow generated from

underwriting activities

Other operating activities:

General and management expenses paid

Payments against short term leases

Other operating (payments)/receipts

Net cash flow (used in) other operating activities

Net cash (used in) all operating activities

b) Investment activities:

Investment income received

Purchase of investment

Proceeds from disposal of fixed assets

Fixed capital expenditure

Net cash flows generated from investing activities

Net cash (used in) / generated from all activities ( a + b )

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

Reconciliation to statement of profit or loss

Net cash (used in) operating activities

Depreciation and amortization

Increase/(Decrease) in assets other than cash

(Increase)/Decrease in liabilities

Gain and other investment income

Profit / (loss) for the period

30,103,155

26,727,991

(18,345,995)

(13,363,079)

(1,546,911)

(9,286,849)

4,480,568

(1,535,064)

17,233,816

(20,555,259)

(1,369,335)

(5,441,881)

(27,366,475)

(10,132,659)

12,083

-

-

-

12,083

(10,120,576)

14,773,647

4,653,071

(10,132,659)

(736,992)

(48,547,420)

58,975,338

34,217

(407,516)

-

26,727,991

-

-

-

(9,286,849)

-

-

17,441,142

(20,555,259)

(1,369,335)

3,026,151

(18,898,443)

(1,457,301)

-

-

-

-

-

(1,457,301)

3,505,865

2,048,564

(1,457,301)

(124,465)

(15,588,606)

14,978,078

22,134

(2,170,160)

30,103,155

-

(18,345,995)

(13,363,079)

(1,546,911)

-

4,480,568

(1,535,064)

(207,326)

-

-

(8,468,032)

(8,468,032)

(8,675,358)

12,083

-

-

-

12,083

(8,663,275)

11,267,782

2,604,507

(8,675,358)

(612,527)

(32,958,814)

43,997,260

12,083

1,762,644

32,397,197

21,297,802

(10,098,283)

(22,484,559)

(5,365,105)

(10,561,284)

4,677,352

(1,640,604)

8,222,516

(15,068,642)

-

(3,348,015)

(18,416,657)

(10,194,141)

27,224

-

-

-

27,224

(10,166,917)

19,555,123

9,388,206

(10,194,141)

(1,028,699)

7,229,397

5,495,803

47,842

1,550,202

-

21,297,802

-

-

(10,561,284)

-

-

10,736,518

(15,068,642)

-

1,453,387

(13,615,255)

(2,878,737)

-

-

-

-

-

(2,878,737)

4,101,393

1,222,656

(2,878,737)

(153,661)

(3,376,087)

1,339,262

20,618

(5,048,605)

32,397,197

-

(10,098,283)

(22,484,559)

(5,365,105)

-

4,677,352

(1,640,604)

(2,514,002)

-

-

(4,801,402)

(4,801,402)

(7,315,404)

27,224

-

-

-

27,224

(7,288,180)

15,453,730

8,165,550

(7,315,404)

(875,038)

10,605,484

4,156,541

27,224

6,598,807

------------------------------------------------Rupees--------------------------------------------------


March31,2019

March 31,2020

March 31,2020

March 31,2020

March 31,2019

March 31,2019



Chief Executive Officer DirectorDirectorChairman

LEGAL STATUS AND NATURE OF BUSINESS

SPI Insurance Company Limited (the Company) is an unquoted public limited company incorporated in Pakistan on February 15, 2005 under the repealed Companies Ordinance, 1984 (now Companies Act, 2017). The Company is engaged in non-life insurance business mainly comprising of fire, marine, motor, health and miscellaneous. The Company commenced its commercial operations on April 13, 2005. The registered office of the Company is situated at suite # 204-A, Second Floor, Madina City Mall, Abdullah Haroon Road, Karachi and principal office of the Company is situated at UIG House 6-D, 1st Floor, Upper Mall, Lahore, Pakistan.The Company has been allowed to work as Window Takaful Operator through License No. 3 dated November 20, 2014 by the Securities and Exchange Commission of Pakistan under Window Takaful Rules, 2012 to carry on Islamic General Insurance in Pakistan. It has not transacted any business outside Pakistan.For the purpose of carrying on the takaful business, the Company has formed a waqf for participants' equity fund. The Waqf namely SPI Insurance Company Limited - Window Takaful Operations Waqf Fund (hereafter referred to as participant takaful fund (PTF)) on October 29, 2014 was executed under a trust deed by the Company with a ceded money of Rs. 500,000. Waqf deed also governs the relationship of Operator and policy holders for management of takaful operations, investment of policy holder's funds and investment of Operator's funds approved by Shariah advisor of the company.

BASIS OF PREPARATION Statement of compliance

These condensed interim financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of:

- International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and

- Provisions of and directives issued under the Companies Act, 2017, Insurance Ordinance, 2000, Insurance Rules, 2017, Takaful Rules, 2012 and Insurance Accounting Regulations, 2017.

Where the provisions of and directives issued under the Companies Act, 2017, the Insurance Ordinance, 2000, the Insurance Rules, 2017, Takaful Rules, 2012 and the Insurance Accounting Regulations, 2017 differ with the requirements of IAS 34, the provisions of and directives issued under the Companies Act, 2017, the Insurance Ordinance, 2000, the Insurance Rules, 2017, Takaful Rules, 2012 and the Insurance Accounting Regulations, 2017 have been followed.

These condensed interim financial statements reflect the financial position and results of operations of both the Operator's Fund and Participants' Takaful Fund in a manner that the assets, liabilities, income and expenses of the Operator's Fund and Participants' Takaful Fund remain separately identifiable.

These condensed interim financial statements do not include all the information required in the annual financial statements. Accordingly, these condensed interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2019.

These condensed interim financial statements have been presented in Pakistani Rupees, which is also the functional currency of the Company.


2.1

2.1.1

2.1.2

2.1.3

2.1.4

2

1



3

Estimates, judgements and risk management policies

The preparation of these condensed interim financial statements in conformity with approved accounting standards, as applicable in Pakistan, requires the management to make judgments, estimates and assumptions that affect application of accounting policies and reported amounts of assets, liabilities, income and expenses.

The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on amounts recognized in these condensed interim financial statements are the same as those disclosed in the audited financial statements of the Company for the year ended December 31, 2019.

Risk management policies and procedures are consistent with those disclosed in the audited financial statements of the Company for the year ended December 31, 2019.

Basis of measurementThese condensed interim financial statements have been prepared under the historical cost convention except certain financial instruments that are carried at fair value. Significant Accounting PoliciesThe accounting policies and methods of computation followed in the preparation of these condensed interim financial statements are the same as those applied in the preparation of the audited financial statements of the Company for the year ended December 31, 2019.

Application of new and revised international financial reporting standardsStandards, amendments to published approved accounting standards and interpretations becoming effective in current period:There are certain new standards, amendments and International Financial Reporting Interpretations Committee (IFRIC) interpretations that became effective during the period and are mandatory for accounting periods of the Company beginning on or after January 01, 2020 but are considered not to be relevant or not to have any significant effect on the Company's operations. The new standards, amendments and IFRIC interpretations that are relevant to the operations of the Company are disclosed in the audited financial statements of the Company for the year ended December 31, 2019.

Standards, amendments to published approved accounting standards and interpretations becoming effective in future periods:There are other new standards, amendments and IFRIC interpretations that are mandatory for accounting periods of the Company beginning on or after January 01, 2020 but are considered not to be relevant or not to have any significant effect on the Company's operations. The new standards, amendments and IFRIC interpretations that are relevant to the operations of the Company are disclosed in the audited financial statements of the Company for the year ended December 31, 2019.


PROPERTY AND EQUIPMENT

Operating fixed assets - ownedParticipants' Takaful FundOperator's Fund

7,554,498 2,818,250 10,372,748

8,167,024 2,935,786 11,102,810

2.2

2.2.1

2.2.2

2.3

2.4

2.52.5.1

2.5.2

March 31, 2020 December 31, 2019(Un-audited) (Audited)

Rupees Rupees


Note

March 31, 2020December 31,

2019March 31, 2020

December 31, 2019

(Un-audited) (Audited) (Un-audited) (Audited)

Rupees Rupees Rupees Rupees

8 37,977,948

39,664,029

-

-

-

-

288,677

438,475

37,977,948

39,664,029

288,677

438,475

Participants' takaful fund Operator's fund

6

Considered goodPrepaid retakaful contribution cededPrepaid rent

PREPAYMENTS

5

Participants' takaful fundConsidered goodDue from takaful contract holdersLess: provision for impairment

Due from other takaful / retakafulLess: provision for impairment

TAKAFUL / RETAKAFUL RECEIVABLES

March 31, 2020

(Un-audited)Rupees

30,113,338

(7,907,548) 22,205,790 167,746,018 (5,855,731) 161,890,287 184,096,077

December 31, 2019

(Audited)Rupees

26,048,413 (2,270,153) 23,778,260 161,065,744 (5,709,674) 155,356,070 179,134,330

4

Operator' s Fund

Available for sale

Open Ended - Mutual Funds

NBP - NAFA Riba Free Saving Fund

Meezan Islamic Income Fund

Meezan Sovereign Fund

INVESTMENTS IN EQUITY SECURITIES

Number Number

2,354,019 23,983,912 26,204,938 2,354,019 23,983,912 25,462,245

444,598 22,848,536 24,964,024 444,598 22,848,536 24,254,623

98,113 5,051,392 5,512,777 98,113 5,051,392 5,356,483

2,896,730 51,883,840 56,681,739 2,896,730 51,883,840 55,073,351

March 31, 2020 December 31, 2019

Units Cost Fair value Units Cost Fair value


Rupees Rupees


March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019

-

-

-

-

-

-

-

-

Additions (at cost) Deletion (at net book value)

Rupees Rupees

Participants' Takaful FundMotor tracking devicesOperator's FundFurniture, fixture, office & computer equipment

Additions and deletions in property and equipmentFollowing are the major additions at cost and deletions at net book value in fixed assets:



NET TAKAFUL CONTRIBUTIONNET TAKAFUL CONTRIBUTION


March 31, 2020

(Un-audited)Rupees

37,702,061 237,981

1,425,000 3,914,311 1,097,677

44,377,030

37,586,792

2,248,132

315,515

20,021,690

60,172,129

104,549,159

March 31, 2020

Rupees31,897,927

89,053,969 (80,367,820)

40,584,076

20,850,634 39,664,029

(37,977,948)

22,536,715

18,047,361

March 31, 2020

Rupees

13,363,079

64,758,417

(61,741,606)

16,379,890

5,133,363

19,981,210

(20,784,167)

4,330,406

12,049,484

December 31,

(59,681,240)

(47,439,754)

(76,599,077)

(16,089,913)

38,351,604301,360

1,425,0009,377,0171,213,486

50,668,467

38,458,0664,192,007

369,58127,210,90970,230,563

120,899,030

March 31,

March 31,

(Audited)

30,896,943

39,535,914 21,640,494 51,608,690

25,809,430

22,484,559

71,577,419

68,320,211

13,726,484

13,083,008

10,128,357

10,341,449

Rupees

Rupees

Rupees

17,462,901

7,121,452

2019

2019

2019

7

Participants' takaful fundFederal Excise Duty / Sales TaxFederal Takaful FeePayable to related partiesWakala fee payableOthers

Operator's fundAgents commission payableAccrued expensesOther tax payablesSPI Insurance Company Limited

8

Participants' takaful fundWritten gross contribution

Contribution earnedLess: Re-takaful contribution ceded

Re-takaful expense

9

Claims paid

Claims expense

Less: Re-takaful and other recoveries received

Re-takaful and other recoveries

Add: Unearned contribution reserve - OpeningLess: Unearned contribution reserve - Closing

Add: Prepaid re-takaful contribution - Opening

NET TAKAFUL CLAIMS

Add: Outstanding claims including IBNR - ClosingLess: Outstanding claims including IBNR - Opening

Add: Re-takaful recoveries in respect of outstanding claims - ClosingLess: Re-takaful recoveries in respect of outstanding claims - Opening

Less: Prepaid re-takaful contribution - Closing

OTHER CREDITORS AND ACCRUALS



March 31, 2020

March 31,

2019

Rupees Rupees

4,480,568 4,677,352 8,586,673 11,313,380 (8,178,413) (10,346,909)

4,888,828 5,643,823

March 31, 2020

March 31,

2019

Rupees Rupees

8,415,575 9,159,456

16,222,877 20,541,262

(14,064,906) (19,318,402)

10,573,546 10,382,316

10

Rebate on re-takafulAdd: Unearned re-takaful rebate - OpeningLess: Unearned re-takaful rebate - Closing Rebate on retakaful

11

Commission paid or payableAdd: Deferred commission expense - OpeningLess: Deferred commission expense - Closing Net Commission

NET REBATE ON RE-TAKAFUL

COMMISSION EXPENSE

12

Income from held to maturity term deposits

INVESTMENT INCOME

March 31, 2020

March 31, 2019

March 31, 2020

March 31, 2019

Rupees Rupees Rupees Rupees

12,083 27,224 - -

12,083 27,224 - -

Participants' takaful fund Operator's fund




13 SEGMENT INFORMATION



Motor Health Miscellaneous Total

---------------------------------- Rupees ----------------------------------

Gross written contribution

Gross direct contribution

Facultative inward contribution

Administrative surcharge

Takaful contribution earned

Takaful contribution ceded to retakaful


Rebate income

Net underwriting income

Takaful claims

Takaful claims recovered from retakaful

Net claims

Contribution deciency expense

Direct expenses

Net takaful claims and expenses


Net investment income

Other income

Prot / (loss) for the period - PTF

Wakala fee

Commission expense

Management expenses

Investment Income

Other income

Other expenses

(loss) for the period - OPF

Segment assets - OPF

Unallocated assets - OPF

Segment liabilities - OPF

Unallocated liabilities - OPF

Segment assets - PTF

Unallocated assets - PTF

Segment liabilities - PTF

Unallocated liabilities - PTF

7,417,332

7,379,332

-

38,000

7,093,860

-

7,093,860

-

7,093,860

(1,684,387)

-

(1,684,387)

-

(1,106,542)

(2,790,929)

4,302,931

-

-

2,966,933

(1,209,756)

-

-

-

-

-

1,206,123

-

-

-

25,681,403

-

25,681,403

16,840,953

-

16,840,953

20,823,753

11,715,091

9,027,061

81,601

15,496,638

(5,169,528)

10,327,110

938,260

11,265,370

(5,688,074)

1,190,206

(4,497,868)

-

(3,106,548)

(7,604,416)

3,660,954

-

-

8,329,501

(3,410,284)

-

-

-

-

-

5,674,388

-

-

-

84,136,325

-

84,136,325

62,500,754

-

62,500,754

5,630,060

5,524,005

83,654

22,401

4,637,553

(3,479,265)

1,158,288

771,881

1,930,169

(214,288)

112,674

(101,614)

-

(839,909)

(941,523)

988,646

-

-

2,252,024

(1,149,676)

-

-

-

-

-

137,996

-

-

-

21,553,227

-

21,553,227

7,371,079

-

7,371,079

17,155,160

9,446,336

7,556,106

152,718

11,968,133

(12,909,630)

(941,497)

2,938,046

1,996,549

(8,460,214)

2,742,430

(5,717,784)

-

(2,559,257)

(8,277,041)

(6,280,492)

-

-

6,862,064

(4,540,857)

-

-

-

-

-

6,577,185

-

-

-

100,092,426

-

100,092,426

80,434,123

-

80,434,123

53,163,212

34,831,896

18,030,184

301,132

40,584,076

(22,536,715)

18,047,361

4,888,828

22,936,189

(16,379,890)

4,330,406

(12,049,484)

(1,298,657)

(7,931,043)

(21,279,184)

1,657,002

12,083

93,559

1,762,644

21,265,285

(10,573,546)

(12,413,688)

-

22,134

(470,345)

(2,170,160)

14,064,906

102,988,912

117,053,818

-

60,172,129

60,172,129

242,055,235

11,259,005

253,314,240

176,497,999

51,576,890

228,074,889

2,136,907

767,132

1,363,363

6,412

1,387,892

(978,292)

409,600

240,641

650,241

(332,927)

285,096

(47,831)

(1,298,660)

(318,790)

(1,665,281)

(1,015,040)

-

-

854,763

(262,973)

-

-

-

-

-

469,214

-

-

-

10,591,854

-

10,591,854

9,351,090

-

9,351,090


Gross written contribution

Gross direct contribution

Facultative inward contribution

Administrative surcharge

Takaful contribution earned

Takaful contribution ceded to retakaful


Rebate income

Net underwriting income

Takaful claims

Takaful claims recovered from retakaful

Net claims

Direct expenses

Net takaful claims and expenses


Net investment income

Other income

Prot/ (loss) for the period - PTF

Wakala fee

Commission expense

Management expenses

Investment Income

Other income

Other expenses

Loss for the period - OPF

Segment assets - OPF

Unallocated assets - OPF

Segment liabilities - OPF

Unallocated liabilities - OPF

Segment assets - PTF

Unallocated assets - PTF

Segment liabilities - PTF

Unallocated liabilities - PTF

549,726

240,944

301,214

7,568

621,930

(640,553)

(18,623)

160,141

141,518

(264,421)

192,336

(72,085)

(26,855)

(98,940)

42,578

-

-

219,890

(113,225)

-

-

-

-

302,484

-

-

-

6,749,478

-

8,711,164

-

2,834,476

2,816,476

-

18,000

2,737,768

-

2,737,768

-

2,737,768

(562,407)

-

(562,407)

(138,471)

(700,878)

2,036,890

-

-

1,133,790

(715,472)

2,414,829

-

-

-

23,054,588

-

19,881,382

-

30,338,164

14,962,951

15,314,639

60,574

17,824,538

(5,737,489)

12,087,049

1,080,618

13,167,667

(3,873,016)

(472,713)

(4,345,729)

(1,482,088)

(5,827,817)

7,339,850

-

-

12,135,266

(5,071,840)

5,789,097

-

-

-

85,669,709

-

63,928,515

-

3,283,865

3,179,410

81,361

23,094

2,760,283

(2,758,039)

2,244

606,766

609,010

(5,276,353)

6,569,132

1,292,779

(160,424)

1,132,355

1,741,365

-

-

1,313,546

(719,575)

164,698

-

-

-

13,667,421

-

7,627,796

-

14,488,674

13,320,341

775,966

392,367

15,591,395

(16,673,349)

(1,081,954)

3,796,298

2,714,344

(7,486,704)

832,697

(6,654,007)

(707,804)

(7,361,811)

(4,647,467)

5,795,470

(3,762,204)

7,551,769

-

-

-

110,441,329

-

79,922,101

-

-

51,494,905

34,520,122

16,473,180

501,603

39,535,914

(25,809,430)

13,726,484

5,643,823

19,370,307

(17,462,901)

7,121,452

(10,341,449)

(2,515,642)

(12,857,091)

6,513,216

27,224

58,367

6,598,807

20,597,962

(10,382,316)

(14,692,939)

-

20,618

(591,930)

(5,048,605)

16,222,877

111,451,147

127,674,024

-

70,230,563

70,230,563

239,582,525

20,534,807

260,117,332

180,070,958

56,569,667

236,640,625



Motor Health Miscellaneous Total

---------------------------------- Rupees ----------------------------------





The related parties comprise of United Track Systems (Pvt.) Limited and Silk Bank Limited (Islamic - Emaan) on the basis of related group companies, entities under common control, entities with common directors, major shareholders, key management personnel and employee retirement benefits fund. Amount due to / from and other significant transactions, other than those disclosed elsewhere in these financial statements, are as follows:

RELATED PARTY TRANSACTIONS15

16

Nature of relationship Type of transactionMarch 31,

2020March 31,

2019

Rupees Rupees

Silk Bank Limited - associated company(23% shareholding)

Takaful contributionBalance at beginning of the period Gross contribution written Received / adjusted during the periodBalance at end of the period

Takaful claim expenseOutstanding claims at beginning of the period Gross claim expense for the period Claim paid during the periodOutstanding claims at end of the period

Transactions with associated companyBank charges paidProfit on term deposit receipts

Other balances with associated companyTerm depositsProfit and loss sharing accountsCurrent accounts

2,323,736 1,456,557

(3,097,982) 682,311

266,075 36,786

(36,372) 266,489

500 10,940

1,100,000 378,392 88,190

4,119,894 282,312

7

3,922,446 268,701

6

25,432

1,750,432 (1,762,054)

13,810

383,923 59,404

(133,635) 309,692

- 27,224

1,100,000 714,061

1,498,600

Compensation of shariah advisor, head of takaful and executivesManagerial remunerationUtilities

Number of persons

Provident fund planContributions made during the period 91,098 90,093

DATE OF AUTHORIZATION FOR ISSUEThese condensed interim financial statements were authorized for issue by Board of Directors in its meeting held on___April 28, 2020_.


1st Quarter Report 2020 · 1st Quarter Report 2020. Inside SPI Insurance Company Limited CONTENT...

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