3RD QUARTER REPORT2019 - SPI Insurance Company Limited · The annexed notes 1 to 15 form an...

SPI Insurance Company Limited

3RD QUARTER REPORT

2019

Content


3rd Quarter Report 2019

More information online:www.spiinsurance.com.pk

Corporate Information 02

Key Management Personnel 03

Banks 04

Directors’ Review Report to the Members (English) 05

Directors’ Review Report to the Members (Urdu) 06

Condensed Interim Statement of Financial Position

Condensed Interim Statement of Profit or Loss

Condensed Interim Statement of Comprehensive Income

Condensed Interim Statement of Changes in Equity

08

09

10

11

13

FINANCIAL STATEMENTS (Conventional)

FINANCIAL STATEMENTS (Window Takaful Operations)

Condensed Interim Statement of Financial Position

Condensed Interim Statement of Profit or Loss

Condensed Interim Statement of Comprehensive Income

Condensed Interim Statement of Cash Flows

Condensed Interim Statement of Changes in Funds

Notes To The Condensed Interim Financial Statements

Notes To The Condensed Interim Financial Statements

Condensed Interim Statement of Cash Flows

20

21

22

23

24

25

12

Corporate Information

ChairmanMr. Aziz Ullah Memon

Managing Director & Chief ExecutiveMian M. A. Shahid

DirectorsMr. M. AsgharMr. Abdul MajeedMr. Uzman Naveed ChaudharyMr. M. Saleem SheikhMr. Khurram Khan

Underwriting CommitteeMian M. A. Shahid (Chairman)Mr. Abdul Majeed (Member)Mr. Imtiaz Ali (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. Abdul Majeed (Member)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

Nominations CommitteeMr. Aziz Ullah Memon (Chairman)Mian M. A. Shahid (Member)Mr. Abdul Majeed (Member)Mr. Noshad Ahmed (Secretary)

Investment CommitteeMian M. A. Shahid (Chairman)

Mr. Aziz Ullah 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

Board of Directors

Committees

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

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

Mr. M. Asghar (Member)

2

3

Key Management Personnel

Deputy Managing DirectorMr. Shaheryar Akbar Raja

AdvisorMaj. Gen. (R) Asif Duraiz Akhter

General Manager Re-InsuranceMr. Faisal Akbar (FCA)

General Manager Health BusinessMr. Nasir Abbas Khan

Chief Manager UnderwritingMr. Imtiaz Ali

Chief Manager Claims / MotorMr. Khalid Nazeer Bajwa

Chief Manager Accounts

Mr. 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



Al-Baraka Bank (Pakistan) Limited

Allied Bank Limited

Apna Microfinance Bank Limited

Bank Al-Falah Limited

Bank Al-Habib Limited

Bank Islami Pakistan Limited

Dubai Islamic Bank Pakistan Limited

Faysal Bank Limited

Finca Microfinance Bank Limted

Habib Bank Limited

JS Bank Limited

Karakoram Co-operative Bank Limited

Meezan Bank Limited

National Bank of Pakistan

MCB Bank Limited

SILKBANK Limited

Sindh Bank Limited

Soneri Bank Limited

State Bank of Pakistan

Tameer Microfinance Bank Limited

The Bank Of Punjab

United Bank Limited

Zarai Taraqiati Bank Limited

Banks

4

DIRECTORS’ REVIEW REPORT TO THE MEMBERS

(Rupees in thousand)

September 30, 2019 September 30, 2018

Dear Fellow Members!

On behalf of the Board of Directors, I am pleased to present the third quarter review report of the SPI Insurance Company Limited together with the un-audited Financial Statements along with Window Takaful Operations for the nine months ending September 30, 2019.

Financial HighlightsOverall-performance of the company during the third quarter ended September 30, 2019 has shown stability against the current market situation. On the conventional insurance business side, the premium written stood at Rs.527.54 million as on September 30, 2019 as compared to Rs.413.62 million on September 30, 2018 showing an increase of 27.54% while the net premium registered at Rs.432.76 million as against Rs.353.71 million in the preceding year showing an increase of 22.35%. The net claims stood at Rs.125.24 million as against Rs.100.03 million for the same period ending September 30, 2018 showing an increase of 25.20%. Net commission expenses posted at Rs.60.81 million as against Rs.50.46 million in last year showing an increase of 20.49%. The management and other expenses increase by 24.84% as compared to last year. The underwriting profit registered at Rs.33.05 million as against Rs.33.70 million for the corresponding period last year. The investment and other income for the nine months ended September 30, 2019 was Rs.14.42 million as against Rs.13.58 million in the year 2018. Accordingly, profit before tax posted at Rs.32.02 million as compared to profit of Rs.27.99 million earned by Company for the same period last year as a result the earning per share remained Rs.0.47 as compared to Rs.0.39 in the year 2018.

The written contribution under Window Takaful Operations for the period ended September 30, 2019 was Rs.165.37 million as against Rs.169.90 million in the preceding year while net contribution revenue was Rs.46.21 million as compared to Rs.31.02 million in last year showing an increase of 48.95%. Wakala fee registered a decrease of 2.67% to Rs.66.14 million as on September 30, 2019 as against Rs.67.96 million in the preceding year. The net claims expenses posted at Rs.23.59 million as on September 30, 2019 as against Rs.22.78 million on September 30, 2018. Net commission expenses posted at Rs.33.97 million as against Rs.39.86 million in last year in operator's fund. Management and other expenses in operator's fund posted at Rs.44.15 million as against Rs.43.29 million in last year registered as rose of 1.98%. The underwriting results registered profit at Rs.8.91 million as against Rs.20.91 million as compared to last year in the Participants Takaful fund. Deficit arising from operators fund is Rs.9.23 million as against Rs.12.67 million in the year 2018. Gain arising from the Participants Takaful fund was Rs.9.12 million as against Rs.21.06 million profits in the year 2018.

Significant increase is shown in operating results during the nine months ended September 30, 2019.

Conventional Insurance:

Premium Written 527,549 413,623Net Premium revenue 432,766 353,718Net Claims 125,249 100,036Net Commission 60,808 50,466Management & other expenses 219,876 176,129Underwriting results 33,053 33,703Investment and other income 14,427 13,581Profit / (Loss) before tax 32,024 27,996

Window Takaful Operations:Contribution Written 165,370 169,902Net Contribution revenue 46,214 31,026Wakala Fee 66,148 67,961Net Claims 23,596 22,780Net Commission in OPF 33,977 39,864Management & other expenses 44,156 43,299Underwriting Results in PTF 8,918 20,912Surplus / (Deficit) in PTF 9,125 21,069(Deficit)/Surplus in OPF (9,235) (12,672)

Consolidated ResultsProfit before tax 32,024 27,996Profit after tax 23,428 19,707E.P.S 0.47 0.39

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 2018 ISOQAR Limited has approved ISO 9001:2015 in compliance with their requirement and has issued the said certificate of registration.

Future OutlookThe nine months performance during 2019 has significantly increased by good margin particularly under premiums and net revenue segments. However, administrative expenses have slightly increased due to fresh induction. The management is conscious to maintain the pace of development during last quarter of the year.

Appreciation and AcknowledgmentI would like to express my sincere gratitude to The Securities and Exchange Commission of Pakistan, State Bank of Pakistan, our Reinsurers and Bankers for their continued guidance and assistance. I 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 growth of the Company.

For and on behalf of the Board of Directors

Mian M. A. ShahidDirector & Chief ExecutiveLahore: October 25, 2019



FINANCIAL FINANCIAL FINANCIAL STATEMENTSSTATEMENTSFor the quarter and nine month period For the quarter and nine month period

STATEMENTSFor the quarter and nine month period ended September 30, 2019ended September 30, 2019ended September 30, 2019

as at September 30, 2019CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION (UN-AUDITED)

8

Note (Un-audited) (Audited)

Rupees Rupees

Assets

Property and equipment 3 98,104,083 108,654,770

Intangible assets 204,126

240,149

Investments

In equity securities 4 179,479,094

50,168,070

In government securities 5 117,183,756

164,214,431

In term deposits 49,430,000

21,230,000

Total assets in Window Takaful - Operator's Fund 130,385,106

139,466,793

Loans and other receivables 130,266,357

171,307,298

Insurance / Reinsurance receivables 6 396,647,759

343,798,505

Reinsurance recoveries against outstanding claims 7 77,774,247

80,064,202

Deferred commission expense 8 31,776,219

28,800,679

Deferred taxation 17,171,683

19,030,894

Prepayments 65,538,618

69,367,806

Cash and bank balances 57,155,818

27,489,053

Total Assets 1,351,116,866

1,223,832,650

Equity and Liabilities

Capital and Reserves

Ordinary share capital 500,000,000 500,000,000 Fair value reserve 128,928,369

(382,655)

Un-appropriated profit 67,365,405

42,841,213

Total Equity 696,293,774

542,458,558

Liabilities

Underwriting Provisions

Outstanding claims (including IBNR) 7 185,570,626

190,054,492

Unearned premium reserves 9 209,503,125

220,918,911

Unearned reinsurance commission 8 10,409,391

10,545,652

Retirement benefit obligations 9,254,906

10,364,906

Borrowings 15,674,481

21,558,133

Insurance / Reinsurance payables 61,334,189

80,171,587

Other creditors and accruals 54,275,301

42,428,793

Total liabilities in Window Takaful - Operator's Fund 74,208,217

75,150,207

Provision for taxation - Income tax 34,592,856

30,181,411

Total Liabilities 654,823,092

681,374,092

Total Equity and Liabilit ies 1,351,116,866 1,223,832,650

Contingencies and Commitments 10 - -

The annexed notes 1 to 15 form an integral part of these condensed interim nancial statements.

September 30,2019

December 31, 2018

Chief Executive Officer DirectorDirectorChairman

2019 2018 2019 2018

Rupees Rupees Rupees Rupees

Net insurance premium 9 179,033,678

103,065,507

432,766,455

353,718,085

Net insurance claims 7 (62,823,890)

(24,937,681)

(125,248,835)

(100,036,191)

Net commission expenses 8 (22,137,138)

(15,275,327)

(60,808,291)

(50,465,961)

Insurance claim expenses (84,961,028)

(40,213,008)

(186,057,126)

(150,502,152)

Management expenses (77,890,940) (55,680,228) (213,656,450) (169,512,976)

Underwriting results 16,181,710 7,172,271 33,052,879 33,702,957

Investment income 11 3,897,191

4,285,078

12,185,879

12,372,899

Other income 965,826

335,743

2,241,758

1,208,236

Other expenses (1,467,786)

(1,641,319)

(4,533,059)

(5,863,065)

Result of operating activities 19,576,941

10,151,773

42,947,457

41,421,027

Finance costs (566,423)

(290,929)

(1,687,299)

(753,097)

Prot / (loss) from Window Takaful Operator's Fund (5,298,258)

146,421

(9,235,659)

(12,672,280)

Prot before tax 13,712,260

10,007,265

32,024,499

27,995,650

Provision for taxation (1,130,344)

(3,106,765)

(8,596,269)

(8,289,126)

Prot for the period 12,581,916 6,900,500 23,428,230 19,706,524

Earnings per share - basic and diluted 0.25 0.14 0.47 0.39


Three-months period endedSeptember 30,

Nine-months period endedSeptember 30,Note

CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS (UN-AUDITED)for the nine-month period ended September 30, 2019




CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)for the nine-month period ended September 30, 2019

10

2019 2018 2019 2018


Prot for the period 12,581,916 6,900,500 23,428,230 19,706,524

Other comprehensive income / (loss)

Other comprehensive income / (loss) 96,214,379

(1,415,523)

130,406,986

(863,912)

Total comprehensive income for the period 108,796,295

5,484,977

153,835,216

18,842,612



Nine-months period endedSeptember 30,

94,685,612

76,840

129,311,024

(1,492,363)

1,095,962

Unrealized gain / (loss) on available -for-sale investments

Items that may be reclassied subsequently to prot or loss:

69,570

(933,482)Other comprehensive (loss) / income from Window Takaful Operations

1,528,767


CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)for the nine-month period ended September 30, 2019


11

Capital reserveRevenue reserve

Fair value reserve

Un-appropriated

profit

Balance as at January 01, 2018 500,000,000

(417,985)

23,731,192

523,313,207

Total comprehensive income / (loss) for the period

Prot for the period -

-

19,706,524

19,706,524

Other comprehensive income / (loss) - 69,570 (933,482) (863,912)

- 69,570 18,773,042 18,842,612 Balance as at September 30, 2018 500,000,000

(348,415)

42,504,234

542,155,819


(382,655)

42,841,213

542,458,558

Total comprehensive income for the period

Prot for the period -

-

23,428,230

23,428,230

Other comprehensive income/(loss) -

129,311,024

1,095,962

130,406,986

-

129,311,024

24,524,192

153,835,216

Balance as at September 30, 2019 500,000,000

128,928,369

67,365,405

696,293,774


Total

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

Issued, subscribed and paid up capital

Description



CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED)for the nine-month period ended September 30, 2019

12


2019 2018

Rupees Rupees

Operating cash ows:a) Underwriting activities:

Insurance premium received 512,394,558

428,720,250

Reinsurance premium paid (121,564,516)

(88,482,455)

Claims paid (162,318,161)

(107,834,600)

Reinsurance and other recoveries received (455,068)

(28,344,313)

Commission paid (76,245,493)

(50,632,705)

Commission received 15,417,406

21,599,801

Management expenses paid (203,284,349)

(162,476,015)

Net cash ow from underwriting activities (36,055,623)

12,549,963

b) Other operating activities:

Income tax paid (2,325,613)

(2,409,826)General expenses paid (4,533,059)

(5,863,065)Other operating receipts/(payments) 47,921,625

(16,137,618)Loan to employees and agents (453,757)

931,490

Net cash ow from other operating activities 40,609,196

(23,479,019)

Net cash ow from all operating activities 4,553,573

(10,929,056)

Investment activities:

Prot/ return received 13,356,948 13,796,690 Payments for investments 18,830,675 (3,216,311)Fixed capital expenditure (6,492,262) (5,050,400)Proceeds from disposal of xed assets 7,046,483

1,247,223

Net cash ow from investing activities 32,741,844

6,777,202

Financing activities:

Payments on nance leases (7,628,652)

(10,215,775)

Net cash ow from nancing activities (7,628,652)

(10,215,775)

Net cash inow / (outow) from all activities 29,666,765

(14,367,629)

Cash and cash equivalents at the beginning of the period 27,489,053

43,843,153

Cash and cash equivalents at the end of the period 57,155,818

29,475,524

Reconciliation of Prot and Loss Account

Operating cash ows 4,553,573

(10,929,056)

Depreciation / amortization (13,746,001)

(13,882,028)Provision for doubtful debts 2,364,457

5,080,045 Gain on disposal of xed assets 1,968,512

969,427 (Decrease) / Increase in assets other than cash (6,805,499)

18,880,794 Decrease in liabilities 42,153,290

28,690,137

Investment and other income 12,459,125 12,611,708Lease charges (1,687,299) (753,097)(Loss) on takaful operations (9,235,659) (12,672,280)Provision for taxation (8,596,269) (8,289,126)

Prot for the period 23,428,230 19,706,524




13

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)for the nine-month period ended September 30, 2019

1

2

2.1

2.1.1

-

-

2.1.2

2.1.3

2.1.4

2.2

2.2.1

\

2.2.2

2.3

2.4

2.5

2.5.1

2.5.2

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

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

Where the provisions of and directives issued under the Companies Act, 2017, the Insurance Ordinance, 2000, the Insurance Rules 2017, TakafulRules, 2012 and the Insurance Accounting Regulations, 2017 differ with the requirements of IAS 34, the provisions of and directives issued under theCompanies 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, prot / (loss), comprehensive income of the Window Takaful Operations of the Company referred to as the Operator'sFund has been presented in these condensed interim nancial statements in accordance with the requirements of Circular 25 of 2015 dated 9 July,2015.

Signicant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most signicant effect on amountsrecognized in these condensed interim nancial statements are the same as those disclosed in the audited nancial statements of the Company forthe year ended December 31, 2018.

These condensed interim nancial statements do not include all the information required in the annual nancial statements. Accordingly, thesecondensed interim nancial statements should be read in conjunction with the audited nancial statements of the Company for the year endedDecember 31, 2018.

These condensed interim nancial 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 nancial 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 ofassets, 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 thecircumstances, the results of which form the basis of making the judgments about the carrying values of assets and liabilities that are not readilyapparent from other sources. Actual results may differ from these estimates.

LEGAL STATUS AND NATURE OF BUSINESS

BASIS OF PREPARATION

SPI Insurance Company Limited (the Company) is an unquoted public limited company incorporated in Islamabad, Pakistan on February 15, 2005under the repealed Companies Ordinance, 1984 (now Companies Act, 2017). The Company is engaged in non-life insurance business mainlycomprising of re, marine, motor, health and miscellaneous. The Company commenced its commercial operations on April 13, 2005. The registeredoffice of the Company is situated at suite # 204-A, Second Floor, Madina City Mall, Abdullah Haroon Road, Karachi, in the province of Sindh andprincipal 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 ExchangeCommission of Pakistan under Window Takaful Rules, 2012 to carry on Islamic General Insurance in Pakistan. It has not transacted any businessoutside Pakistan.

These condensed interim nancial statements have been prepared in accordance with the accounting and reporting standards as applicable in

Pakistan for interim nancial reporting. The accounting and reporting standards as applicable in Pakistan for interim nancial reporting comprise of:

Statement of compliance

There are certain new standards, amendments and International Financial Reporting Interpretations Committee (IFRIC) interpretations that becameeffective during the period and are mandatory for accounting periods of the Company beginning on or after January 01, 2019 but are considered notto be relevant or not to have any signicant effect on the Company's operations. The new standards, amendments and IFRIC interpretations that arerelevant to the operations of the Company are disclosed in the audited nancial statements of the Company for the year ended December 31, 2018.

There are other new standards, amendments and IFRIC interpretations that are mandatory for accounting periods of the Company beginning on orafter January 01, 2019 but are considered not to be relevant or not to have any signicant 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 nancial statements of theCompany for the year ended December 31, 2018.

Risk management policies and procedures are consistent with those disclosed in the audited nancial statements of the Company for the year endedDecember 31, 2018.

Basis of measurement

These condensed interim nancial statements have been prepared under the historical cost convention except certain nancial instruments that arecarried at fair value.

Application of new and revised international financial reporting standards

Significant Accounting Policies

The accounting policies and methods of computation followed in the preparation of these condensed interim nancial statements are the same asthose applied in the preparation of the audited nancial statements of the Company for the year ended December 31, 2018.

Standards, amendments to published approved accounting standards and interpretations becoming effective in current period:

Standards, amendments to published approved accounting standards and interpretations becoming effective in future periods:


14

3

September 30, December 31,2019 2018

(Un-audited) (Audited)

Operating fixed assets:

Owned assets 65,184,332 69,662,393

Leased assets 32,919,751 38,992,377

98,104,083

108,654,770

3.1 Additions and deletions in property and equipment

Following are the major additions and deletions in xed assets:

2019 2018 2019 2018

Tangible owned assets

Furniture and xtures 642,835

1,018,337

-

-

Office equipment 509,376

1,496,054

3,950

-

Computer equipment 532,468

226,615

-

277,796

Motor vehicles 541,100

14,132,550

5,074,021

-

2,225,779

16,873,556

5,077,971

277,796

Leased assets

Leased vehicles 1,745,000

16,816,000

3,784,762

-

4

(Un-audited) (Audited)September 30, December 31,

2019 2018

Equity investments 4.1 179,479,094 168,070

Advance against issuance of shares - 50,000,000

179,479,094

50,168,070

4.1 Equity investments

Shares Cost Fair Value Shares Cost Fair Value

Number Number

Related party

Listed shares

Apna Micronance Bank Limited 8,462,237

50,011,000

179,399,424

2,000

11,000

12,760

Others

Listed shares - (Note 4.1.1)

Saudi Pak Leasing Company Limited 16,065

226,625

-

16,065

226,625

-

Kohinoor Industries Limited 31,000

313,100

79,670

31,000

313,100

155,310

Unlisted shares - (Note 4.1.2)

Callmate Telips Telecom Limited 32,000

-

-

32,000

-

-

8,541,302

50,550,725

179,479,094

81,065

550,725

168,070

4.1.1

4.1.2 Trading in shares has been suspended.

5

September 30, December 31, September 30, December 31, September 30, December 31,2019 2018 2019 2018 2019 2018

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

Pakistan investment bonds (note 5.1) 24 24 115,500,000 115,500,000 117,183,756 117,236,432

Treasury bills - 1 - 47,000,000 - 46,977,999

24 25 115,500,000 162,500,000 117,183,756 164,214,431

INVESTMENT IN EQUITY SECURITIES - AVAILABLE FOR SALE

INVESTMENT IN GOVERNMENT SECURITIES - HELD TO MATURITY

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

Rupees

Rupees

Number of certificates

September 30, 2019 December 31, 2018

Rupees

PROPERTY AND EQUIPMENT


Rupees

Rupees


Rupees

Note


These shares are deposited into CDC account and blocked on the instructions of Securities and Exchange Commission of Pakistan (SECP) in accordance with CircularNo. 9 of 2006 issued by the SECP, which requires promoters / majority shareholders of the company to deposit their shares into CDC blocked account.

Value of CertificatesFace Value

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



15

5.1

6



160,401,525

145,247,211

(10,033,349)

(10,793,212)

150,368,176

134,453,999

264,524,474

229,193,991

(18,244,891)

(19,849,485)

246,279,583

209,344,506

396,647,759

343,798,505

7

2019 2018 2019 2018


Claims Paid 99,619,834

32,588,751

162,318,161

107,834,600

Add: Outstanding claims including IBNR - Closing 185,570,626

184,287,308

185,570,626

184,287,308

Less: Outstanding claims including IBNR - Opening (218,895,131)

(183,217,496)

(190,054,492)

(178,748,845)

Claims expense 66,295,329

33,658,563

157,834,295

113,373,063

Less: Reinsurance and other recoveries received 26,907,626

4,310,550

34,875,415

12,001,534

77,774,247

70,857,483

77,774,247

70,857,483

(101,210,434)

(66,447,151)

(80,064,202)

(69,522,145)

Reinsurance and other recoveries revenue 3,471,439 8,720,882 32,585,460 13,336,872

62,823,890 24,937,681 125,248,835 100,036,191

8

2019 2018 2019 2018


Commission paid or payable 24,891,664

17,162,502

79,337,498

61,742,240

Add: Deferred commission expense - Opening 34,111,698

33,960,497

28,800,679

35,293,968

Less: Deferred commission expense - Closing (31,776,219)

(28,679,649)

(31,776,219)

(28,679,649) Net Commission 27,227,143

22,443,350

76,361,958

68,356,559

Less: Commission received or recoverable 5,162,040 5,479,757 15,417,406 21,599,801

Add: Unearned re-insurance commission - Opening 10,337,356 14,470,435 10,545,652 9,072,966

Less: Unearned re-insurance commission - Closing (10,409,391) (12,782,169) (10,409,391) (12,782,169) Commission from reinsurers 5,090,005 7,168,023 15,553,667 17,890,598

22,137,138

15,275,327

60,808,291

50,465,961

9

2019 2018 2019 2018


Written Gross Premium 173,942,804

114,705,844

527,548,872

413,622,987

Add: Unearned premium reserve - Opening 249,499,712 246,017,499 220,918,911 268,881,204

Less: Unearned premium reserve - Closing (209,503,125) (209,523,937) (209,503,125) (209,523,937)

Premium earned 213,939,391 151,199,406 538,964,658 472,980,254

Less: Reinsurance premium ceded 34,004,260 40,030,677 102,727,118 137,726,789

Add: Prepaid reinsurance premium - Opening 65,211,182 88,500,145 67,780,814 61,932,303

Less: Prepaid reinsurance premium - Closing (64,309,729) (80,396,923) (64,309,729) (80,396,923)

Reinsurance expense 34,905,713 48,133,899 106,198,203 119,262,169 179,033,678 103,065,507 432,766,455 353,718,085

10 CONTINGENCIES AND COMMITMENTS

Rupees

Less provision for impairment of due from other insurers / reinsurers


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


Due from insurance contract holders

NET INSURANCE CLAIMS

There is no signicant change in contingencies and commitments since the date of annual audited nancial statements for the year ended December 31, 2018.

Add: Reinsurance and other recoveries in respect of outstanding claims - Closing

Due from other Insurers / reinsurers

Less provision for impairment of receivables from insurance contract holders



These represent PIBs held with different banks having maturity of periods ranging from 5 to 10 years (December 31, 2018: 5 to 10 years). These carry return at the rateranging between 6.60% to 13.50% (December 31, 2018: 6.60% to 13.50%) per annum. These include bonds having face value of Rs. 52.2 million (December 31, 2018: Rs.52.2 million) held with State Bank of Pakistan as per requirements of Section 29 of the Insurance Ordinance, 2000.

NET INSURANCE PREMIUM

INSURANCE / REINSURANCE RECEIVABLES



NET COMMISSION EXPENSES



16

11

2019 2018 2019 2018

Rupees Rupees Rupees RupeesIncome from debt securities - Held to maturity

- Return on government securities 3,125,794 4,012,484 10,980,220 11,449,369

Income from term deposits - Held to maturity

- Return on term deposits 777,952

300,075

1,379,030

988,851

Total investment income 3,903,746

4,312,559

12,359,250

12,438,220

Less: Investment related expenses (6,555) (27,481) (173,371) (65,321)

3,897,191

4,285,078

12,185,879

12,372,899

12 SEGMENT INFORMATION

Gross written premium 145,956,723

65,206,275

162,208,481

53,159,240

101,018,153

527,548,872

Gross direct premium 108,840,959

44,832,431

121,511,539

17,057,253

91,509,118

383,751,300

Facultative inward premium 34,699,049

18,315,726

37,322,531

35,946,313

7,959,862

134,243,481

Administrative surcharge 2,416,715

2,058,118

3,374,411

155,674

1,549,173

9,554,091

Insurance premium earned 146,109,679

66,209,538

168,481,130

52,266,481

105,897,830

538,964,658

(34,227,840)

(10,465,965)

(34,619,186)

(3,510,036)

(23,375,176)

(106,198,203)

Net insurance premium 111,881,839

55,743,573

133,861,944

48,756,445

82,522,654

432,766,455

Commission income 2,583,969

550,558

7,108,243

255,953

5,054,944

15,553,667

Net underwriting income 114,465,808 56,294,131 140,970,187 49,012,398 87,577,598 448,320,122

Insurance claims (72,809,970) (2,628,570) (56,385,806) (25,658,784) (351,165) (157,834,295)

20,546,077 (462,539) 10,843,957 3,820,421 (2,162,456) 32,585,460

Net claims (52,263,893)

(3,091,109)

(45,541,849)

(21,838,363)

(2,513,621)

(125,248,835)

Commission expense (27,623,035)

(12,860,169)

(20,416,433)

(9,758,269)

(5,704,052)

(76,361,958)

Management expenses (59,112,240)

(26,408,437)

(65,694,176)

(21,529,407)

(40,912,190)

(213,656,450)

(138,999,168)

(42,359,715)

(131,652,458)

(53,126,039)

(49,129,863)

(415,267,243)

Underwriting results (24,533,360)

13,934,416

9,317,729

(4,113,641)

38,447,735

33,052,879

Net investment income 12,185,879

Other income 2,241,758


Finance cost (1,687,299)

(9,235,659)


Segment assets 166,123,122

51,927,742

159,698,310

45,215,165

147,543,615

570,507,954

Unallocated assets -

-

-

-

-

650,223,806

166,123,122

51,927,742

159,698,310

45,215,165

147,543,615

1,220,731,760

Segment assets - Takaful (OPF) -

-

-

-

-

-

-

-

-

-

-

130,385,106

-

-

-

-

-

130,385,106

1,351,116,866

Segment liabilities 126,446,775 30,082,701 137,322,212 40,678,752 132,286,890 466,817,330

Unallocated liabilities - - - - - 113,797,545

126,446,775 30,082,701 137,322,212 40,678,752 132,286,890 580,614,875

- - - - - -

- - - - - 74,208,217

- - - - - 74,208,217

654,823,092



Net insurance claims and expenses

(Loss) from Window Takaful Operator's Fund

Nine-months period endedSeptember 30, 2019

Marine, aviation and

transportMotor

Crop and livestock

Miscellaneous TotalFire and property damage

Insurance premium ceded to reinsurers

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

Unallocated assets - Takaful (OPF)

Unallocated liabilities - Takaful (OPF)

Segment liabilities - Takaful (OPF)

INVESTMENT INCOME

Insurance claims recovered from reinsurers



17

Gross written premium 99,566,855 55,263,805 160,279,294 17,574,655 80,938,378 413,622,987

Gross direct premium 62,891,768 38,714,415 108,790,425 17,444,064 75,363,682 303,204,354

Facultative inward premium 35,519,787

14,902,360

48,568,837

-

4,119,108

103,110,092


1,647,030

2,920,032

130,591

1,455,588

7,308,541

Insurance premium earned 121,671,879

51,578,298

176,355,349

48,684,606

74,690,122

472,980,254

Net insurance premium 72,192,915

39,257,794

140,840,844

40,807,406

60,619,126

353,718,085

Commission income 5,828,455

797,738

7,314,576

885,642

3,064,187

17,890,598

Net underwriting income 78,021,370

40,055,532

148,155,420

41,693,048

63,683,313

371,608,683

Insurance claims 3,160,674

(11,080,075)

(50,599,945)

(5,852,366)

(49,001,351)

(113,373,063)

Net claims 2,172,931

(8,884,239)

(42,560,227)

(5,852,366)

(44,912,290)

(100,036,191)

Commission expense (27,079,980)

(10,043,462)

(20,586,426)

(5,224,277)

(5,422,414)

(68,356,559)


(22,648,480)

(65,686,437)

(7,202,530)

(33,170,559)

(169,512,976)

(65,712,020) (41,576,181) (128,833,090) (18,279,173) (83,505,263) (337,905,726)

Underwriting results 12,309,350

(1,520,649)

19,322,330

23,413,875

(19,821,950)

33,702,957

Net investment income 12,372,899

Other income 1,208,236


Finance cost (753,097)

(12,672,280)


Segment assets 147,934,726

46,199,758

168,871,141

15,748,910

141,689,667

520,444,202

Unallocated assets -

-

-

-

-

563,921,655

147,934,726

46,199,758

168,871,141

15,748,910

141,689,667

1,084,365,857

Segment assets - Takaful (OPF) -

-

-

-

-

-

-

-

-

-

-

139,466,793

-

-

-

-

-

139,466,793

1,223,832,650

Segment liabilities 123,617,263

33,555,599

153,142,923

15,362,695

176,012,162

501,690,642

Unallocated liabilities - - - - - 104,533,243

123,617,263 33,555,599 153,142,923 15,362,695 176,012,162 606,223,885

- - - - - -

- - - - - 75,150,207

- - - - - 75,150,207

681,374,092

(7,877,200)

Segment liabilities - Takaful (OPF)

Net insurance claims and expenses

(Loss) from Window Takaful Operator's Fund

Unallocated liabilities - Takaful (OPF)

8,039,718

Insurance premium ceded to reinsurers (14,070,996)

(119,262,169)(49,478,964)

(35,514,505)

(12,320,504)

4,089,061

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

Unallocated assets - Takaful (OPF)

- Insurance claims recovered from reinsurers (987,743) 2,195,836

Crop and livestock

13,336,872


Miscellaneous TotalFire and property damage

Marine, aviation and

transportMotor



18

13

2019 2018 2019 2018


United Track Systems (Private) Limited - associated companyMotor tracking device charges 828,108 - 1,202,549 1,175,745

Apna Microfinance Bank Limited - associated company

Bank Charges 1,813

- 4,734 5,527

Prot on term deposit receipts 36,533

- 766,750 39,039

Prot on bank deposits 9,525

6,489 26,279 41,035

Silk Bank Limited - associated company

Insurance premium

Balance at beginning of the period 18,608,262

18,530,908

19,764,912

22,082,669

Gross insurance premium written 12,582,996

1,415,440

19,808,475

17,970,433

Received / adjusted during the period (2,090,562)

(991,473)

(10,472,691)

(21,098,227)

Balance at end of the period 29,100,696

18,954,875

29,100,696

18,954,875

Outstanding claims at beginning of the period 15,597,840

18,437,594

18,598,600

7,936,354

Gross claim expense for the period 664,475

9,244,196

2,771,388

28,108,146

Claim paid during the period (3,211,152) (2,753,733) (8,318,825) (11,116,443)

Outstanding claims at end of the period 13,051,163 24,928,057 13,051,163 24,928,057

Other transactions during the yearBank charges 35,410

16,693

51,954

50,912

Prot on term deposit receipts -

34,024

51,783

750,617

Prot on bank deposits 3,752

14,715

12,665

19,057

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

Advisory services -

-

1,664,941

354,143Advance paid against services - net 300,000

600,000

1,150,000

1,500,000

Provident fund plan

Contributions made during the period 1,737,624

1,687,064

5,203,019

4,891,530

Compensation of chief executive, directors and executives

Managerial remuneration 17,434,741

12,659,592

47,294,259

37,163,449

Contribution to dened contribution plan 1,041,591

967,188.00

3,152,385

2,711,008

Rent and house maintenance 3,378,622

2,571,012

9,958,766

7,382,173

Utilities 998,234

759,612

2,942,377

2,181,106

Medical 1,519,145

1,265,958

4,505,110

3,678,374

Others 2,256,426

433,200

11,194,171

1,239,100

26,628,759

18,656,562

79,047,068

54,355,210

Number of persons 38

31

38

32

14

15

15.1

15.2 Provision for taxation in these condensed interim nancial statements is subject to adjustment in annual nancial statements.

15.3

15.4 Figures have been rounded up to the nearest Rupee.

There is no unusual item included in these condensed interim nancial statements which is affecting the assets, liabilities, equity, prot, comprehensive income and cash ows of the Company.



Related parties comprise of chief executive officer, directors, major shareholders, key management personnel, associated companies, entities with common directors and post employment benet 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 specically disclosed elsewhere in these condensed interim nancial statements are follows:

Insurance claim expense

RELATED PARTY TRANSACTIONS

GENERAL

Separate set of condensed interim nancial statements representing assets, liabilities, revenues, expenses and prot / (loss) of Window Takaful Operations has been annexed to these condensed interim nancial statements as per the requirement of Takaful Rules, 2012.

DATE OF AUTHORIZATION FOR ISSUE

These condensed interim nancial statements were authorized for issue by the Board of Directors of the Company on ____________________.



October 25, 2019

SPI INSURANCE COMPANY LIMITED WINDOW TAKAFUL OPERATIONS

FINANCIAL FINANCIAL FINANCIAL STATEMENTSSTATEMENTSFor the quarter and nine month period For the quarter and nine month period

STATEMENTSFor the quarter and nine month period ended September 30, 2019ended September 30, 2019ended September 30, 2019

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION (UN-AUDITED)As at September 30, 2019

20

(Audited)

Note Participants' Takaful Fund

Operator's Fund Total Total

December 31, 2018

Assets

Property and equipment 3 9,042,062

3,082,453

12,124,515

15,150,625

Intangible assets -

147,247

147,247

173,232

Investments

In equity securities 4 -

53,451,223

53,451,223

50,473,488

In term deposits 1,100,000

8,743,504

9,843,504

9,629,905

Loans and other receivables -

45,156,315

45,156,315

51,838,391

Takaful / Retakaful receivables 5 186,873,690

-

186,873,690

233,638,372

Retakaful recoveries against outstanding claims 6 16,213,973

-

16,213,973

16,089,913

Deferred commission expense 7 -

16,837,095

16,837,095

20,541,262

Prepayments 8 41,178,218

281,902

41,460,120

51,934,363

Cash and bank balances 9,455,984

2,685,367

12,141,351

15,767,006

Total Assets 263,863,927

130,385,106

394,249,033

465,236,557

Equity and Liabilities

Participants’ T akaful Fund

September 30, 2019

(Un-audited)

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

Waqf money 500,000

-

500,000 500,000

Un-appropriated surplus 62,322,820

-

62,322,820

53,197,615

62,822,820

-

62,822,820

53,697,615

Operator's Fund

Statutory fund -

50,000,000

50,000,000

50,000,000

Fair value reserve -

1,567,383

1,567,383

471,421

Un-appropriated profit -

4,609,506

4,609,506

13,845,165

-

56,176,889

56,176,889

64,316,586

Total Equity 62,822,820

56,176,889

118,999,709

118,014,201

Liabilities

Underwriting Provisions

Outstanding claims (including IBNR) 6 55,871,847

-

55,871,847

76,599,077

Unearned contribution 9 47,091,297

-

47,091,297

68,320,211

Contribution deficiency reserves 16,839,285

-

16,839,285

-

Unearned re-takaful rebate 7 8,945,013

-

8,945,013

11,313,380

Takaful / Retakaful payables - unsecured 19,378,653

-

19,378,653

56,180,068

Other creditors and accruals 10 52,915,012 74,208,217 127,123,229 134,809,620

Total Liabilities 201,041,107 74,208,217 275,249,324 347,222,356

Total Equity and Liabilities 263,863,927 130,385,106 394,249,033 465,236,557

Contingencies and Commitments 11 - - - -



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

21

Window Takaful OperationsSPI Insurance Company Limited

for the nine-month period ended September 30, 2019

2019 2018 2019 2018


Participants' Takaful Fund Revenue Account

Net takaful contribution 9 18,630,919

5,465,678

46,214,356

31,025,784

Net takaful claims 6 (7,086,038)

(4,182,031)

(23,596,451)

(22,780,149)

Contribution deficiency (2,433,527)

2,121,782

(16,839,285)

(2,890,622)

Rebate on re-takaful 7 5,345,037

6,577,041

16,203,588

21,530,652

Direct expenses (4,587,125) (1,585,321) (13,063,406) (5,973,241)

Takaful claims (8,761,653) 2,931,471 (37,295,554) (10,113,360)

Underwriting results 9,869,266 8,397,149 8,918,802 20,912,424

Investment income 12 30,733

13,356

83,031

34,740

Other income 29,747

37,223

123,372

121,697

Surplus for the period 9,929,746

8,447,728

9,125,205

21,068,861

Wakala fee 19,568,852

22,235,378

66,148,042

67,961,116

Commission expense 7 (10,501,766)

(10,368,747)

(33,977,114)

(39,864,434)


(12,800,875)

(42,831,003)

(42,045,742)

(4,962,991)

(934,244)

(10,660,075)

(13,949,060)

Investment income 12 -

1,719,431

2,691,620

2,508,039

Other income 21,003 5,971 58,309 22,423

Other expenses (356,270) (644,737) (1,325,513) (1,253,682)

Profit / (loss) for the period (5,298,258) 146,421 (9,235,659) (12,672,280)


Operator's Fund Revenue Account

Note

Three-months period ended September 30,




CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)

22


2019 2018 2019 2018


PARTICIPANTS' TAK AFUL FUND

Surplus for the period 9,929,746

8,447,728

9,125,205

21,068,861

Other comprehensive income for the period - - - -

Total comprehensive income for the period 9,929,746 8,447,728 9,125,205 21,068,861

OPERATOR'S FUND

Profit / (loss) for the period (5,298,258)

146,421

(9,235,659)

(12,672,280)

Other comprehensive (loss)/income for the period:

Items that may be reclassified subsequently to profit or loss:

Unrealized gain / (loss) on available -for-sale investments 1,528,767

(43,022)

749,206

762,544

1,528,767

(1,492,363)

1,095,962

(933,482)

Total comprehensive (loss) for the period (3,769,491) (1,345,942) (8,139,697) (13,605,762)


Fair value reserve realized on sale of available -for-sale investments

(1,696,026)346,756

(1,449,341)

-




Balance as at January 01, 2018 500,000

37,612,778

38,112,778

Total comprehensive income for the periodSurplus for the period -

21,068,861

21,068,861

Other comprehensive income -

-

-

-

21,068,861

21,068,861

Balance as at September 30, 2018 500,000

58,681,639

59,181,639

Balance as at January 01, 2019 500,000

53,197,615

53,697,615

Total comprehensive income for the periodSurplus for the period -

9,125,205

9,125,205


-

-

- 9,125,205 9,125,205

Balance as at September 30, 2019 500,000 62,322,820 62,822,820

Description -----------------------------Rupees--------------------------


293,643

19,161,231

69,454,874

Total comprehensive income / (loss) for the period

Profit/(loss) for the period -

-

(12,672,280)

(12,672,280)


(933,482)

-

(933,482)

-

(933,482)

(12,672,280)

(13,605,762)

Balance as at September 30, 2018 50,000,000

(639,839)

6,488,951

55,849,112


471,421

13,845,165

64,316,586

Total comprehensive income / (loss) for the periodProfit/(loss) for the period -

-

(9,235,659)

(9,235,659)

Other comprehensive income - 1,095,962 - 1,095,962

- 1,095,962 (9,235,659) (8,139,697)

Balance as at September 30, 2019 50,000,000 1,567,383 4,609,506 56,176,889


Participants' Takaful Fund

Waqf money Un-appropriated

surplus Total

Operator's fund

Statutory reserve Un-appropriated

profit Total Fair value reserve

----------------------------- Rupees -----------------------------Description

CONDENSED INTERIM STATEMENT OF CHANGES IN FUNDS (UN-AUDITED)

23





CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED)

24


Participants' Takaful Fund

Operator's Fund

Total Total

Rupees

Operating cash flows:

a) Operating activities:

Contribution received 100,151,471

-

100,151,471

99,853,755

Wakala fees received -

74,737,023

74,737,023

67,961,116

Retakaful contribution paid (100,607,564)

-

(100,607,564)

(115,147,171)

Claims paid (70,277,968)

-

(70,277,968)

(52,459,352)

Retakaful and other recoveries (paid) / received 71,665,501

-

71,665,501

45,700,921

Commission paid -

(36,396,860)

(36,396,860)

(35,963,565)

Retakaful rebate received 13,835,221

-

13,835,221

16,217,615

Direct Expenses (10,438,292)

-

(10,438,292)

(2,101,379)

Net cash flow generated from underwriting activities 4,328,369

38,340,163

42,668,532

24,061,940

b) Other operating activities:

General and management expenses paid -

(38,511,572)

(38,511,572)

(42,492,522)

Other operating receipts/(payments) (6,621,029)

(1,804,825)

(8,425,854)

12,505,150

Net cash flow (used in) other operating activities (6,621,029)

(40,316,397)

(46,937,426)

(29,987,372)

Net cash (used in) all operating activities (2,292,660) (1,976,234) (4,268,894) (5,925,432)

Investment activities:

Investment income received 83,031

2,691,620

2,774,651

192,521

Investment made during the period -

(2,095,372)

(2,095,372)

(142,000)

Proceeds from disposal of fixed assets -

-

-

142,500

Fixed capital expenditure -

(36,040)

(36,040)

(212,121)

Net cash generated from/ (used in) investing activities 83,031

560,208

643,239

(19,100)

Net cash (outflow) from all activities (2,209,629)

(1,416,026)

(3,625,655)

(5,944,532)

Cash and cash equivalents at the beginning of the period 11,665,613

4,101,393

15,767,006

16,966,434

Cash and cash equivalents at the end of the period 9,455,984

2,685,367

12,141,351

11,021,902

Reconciliation of profit and loss account

Net cash (used in) all operating activities (2,292,660)

(1,976,234)

(4,268,894)

(5,925,432)

Depreciation/ Amortization (2,625,114)

(463,021)

(3,088,135)

(4,336,030)

Contribution deficiency (16,839,285)

-

(16,839,285)

(2,890,622)

Gain on disposal of fixed assets -

-

-

(198,614)

Increase/(Decrease) in assets other than cash 57,071,094

10,430,014

67,501,108

(42,493,130)

(Increase)/Decrease in liabilities (26,395,233)

(19,976,347)

(46,371,580)

61,697,630

Investment and other income 206,403

2,749,929

2,956,332

2,542,779

Profit / (Loss) for the period 9,125,205 (9,235,659) (110,454) 8,396,581

Attributed to:

Participants' takaful fund 9,125,205 - 9,125,205 21,068,861

Operator's fund - (9,235,659) (9,235,659) (12,672,280)

9,125,205 (9,235,659) (110,454) 8,396,581


September 30, 2018

September 30, 2019

Rupees


25



1

2

2.1

2.1.1

-

-

2.1.2

2.1.3

2.1.4

2.2

2.2.1

2.2.2

2.3

2.4

2.5

2.5.1

2.5.2

LEGAL STATUS AND NATURE OF BUSINESS

SPI Insurance Company Limited (the Company) is an unquoted public limited company incorporated in Pakistanon February 15, 2005 under the repealedCompanies Ordinance,1984 (now Companies Act, 2017). The Company is engaged in non-life insurance business mainly comprisingof fire, marine, motor,health and miscellaneous.The Company commenced its commercialoperationson April 13, 2005. The registeredoffice of the Company is situated at suite#204-A, Second Floor,Madina City Mall, Abdullah Haroon Road, Karachiand principal office of the Company is situatedat UIG House 6-D, 1st Floor,UpperMall, 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 ExchangeCommission of Pakistan under Window Takaful Rules, 2012 to carry on Islamic General Insurance in Pakistan. It has not transacted any business outsidePakistan.

BASIS OF PREPARATION

Statement of compliance

For the purpose of carryingon the takaful business,the Company has formed a waqf for participants'equity fund. The Waqf namely SPI InsuranceCompanyLimited - Window Takaful OperationsWaqf Fund (hereafter referred to as participants’ takaful fund(PTF)) on October 29, 2014 was executed under a trustdeed by the Company with a ceded money of Rs. 500,000. Waqf deed also governs the relationshipof Operator and policy holders for management oftakaful operations, investment of policy holder's funds and investment of Operator's funds approved by Shariah advisor of the company.

There are other new standards,amendments and IFRIC interpretationsthat are mandatory for accountingperiods of the Company beginning on or afterJanuary 01, 2019 but are considered not to be relevant or not to have any significanteffect on the Company's operations.The new standards,amendmentsand IFRIC interpretations that are relevant to the operations of the Company are disclosed in the audited financial statements of the Company for theyear ended December 31, 2018.

Standards, amendments to published approved accounting standards and interpretations becoming effective in current period:

Standards, amendments to published approved accounting standards and interpretations becoming effective in future periods:

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

Significant areasof estimation uncertainty and critical judgments inapplying accounting policiesthat have the most significant effect on amounts recognizedthe year ended

December 31, 2018.

Risk management policies and procedures are consistent with those disclosed in the audited financial statements of the Company for the year endedDecember 31, 2018.

Basis of measurement

These condensed interimfinancial statements have been prepared under the historicalcostconventionexcept certainfinancial instrumentsthat are carried atfair value.

Application of new and revised international financial reporting standards

The preparation of these condensed interim financial statements in conformity with approved accounting standards, as applicable in Pakistan,requires themanagement to make judgments, estimates and assumptions that affect applicationof accountingpolicies and reported amounts of assets, liabilities,incomeand expenses.

The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under thecircumstances,the resultsof which form the basis of making the judgmentsabout the carryingvalues of assetsand liabilitiesthat are not readily apparent fromother sources. Actual results may differ from these estimates.

Significant Accounting Policies

The accounting policies and methods of computation followed in the preparation of these condensed interim financial statements are the same as thoseapplied in the preparation of the audited financial statements of the Company for the year ended December 31, 2018.

These condensed interim financial statementsreflect the financial position and results of operations of both the Operator's Fund and Participants'TakafulFund 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 statementsdo not include all the information required in the annual financial statements.Accordingly, these condensedinterim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2018.

There are certainnew standards, amendments and International Financial Reporting Interpretations Committee (IFRIC) interpretations that becameeffective during the period and are mandatory for accounting periods of the Company beginning on or after January01, 2019 but are considerednot to berelevant or not to have any significant effect on the Company's operations. The new standards, amendments and IFRIC interpretations that arerelevant to the operations of the Company are disclosed in the audited financial statements of the Company for the year ended December 31, 2018.

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

InternationalAccountingStandard (IAS) 34, Interim FinancialReporting, issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and

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 AccountingRegulations,2017 differ with the requirements of IAS 34, the provisionsof and directives issued under the CompaniesAct, 2017, the Insurance Ordinance, 2000, the Insurance Rules, 2017, Takaful Rules, 2012 and the Insurance Accounting Regulations, 2017 have beenfollowed.

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

in these condensed interim financial statements are the same as those disclosed in the audited financial statements of the Company for


26


3


Note (Un-audited) (Audited)Rupees Rupees

Operating fixed assets - owned

Participants' Takaful Fund 9,042,062

11,667,176

Operator's Fund 3.1 3,082,453

3,483,449

12,124,515

15,150,625

3.1 Additions and deletions in property and equipment

Following are the major additions at cost and deletions at net book value in fixed assets:

2019 2018 2019 2018


Office improvement - - -

105,463

Furniture and fixture - - -

8,554

Office equipment 17,700 - 27,600

7,535

Computer equipment 8,440 - 8,440

10,426

26,140 - 36,040

131,978

4

Number Rupees Rupees Number Rupees Rupees

Available for sale

Open Ended - Mutual Funds 2,896,730

51,883,840

53,451,223

2,689,203

50,002,067

50,473,488

5


(Un-audited) (Audited)Rupees Rupees

37,087,700

38,017,108

154,737,407

195,621,264

Less provision for impairment of due from other takaful / re-takaful operators (4,951,417)

-

149,785,990

195,621,264

186,873,690

233,638,372

6

2019 2018 2019 2018Rupees Rupees Rupees Rupees

Claims Paid 31,233,435

24,850,178

70,277,968

52,459,352

55,871,847

65,303,258

55,871,847

65,303,258

(69,480,693)

(79,819,614)

(76,599,077)

(62,619,074)

Claims expense 17,624,589

10,333,822

49,550,738

55,143,536

Less: Re-takaful and other recoveries received 8,074,725 16,283,102 25,830,227 25,667,772

Add: Re-takaful and other recoveries in respect of outstanding claims - Closing 16,213,973 11,139,415 16,213,973 11,139,415

Less: Re-takaful and other recoveries in respect of outstanding claims - Opening (13,750,147) (21,270,726) (16,089,913) (4,443,800)

Re-takaful and other recoveries revenue 10,538,551 6,151,791 25,954,287 32,363,387

7,086,038 4,182,031 23,596,451 22,780,149

Nine-months period ended September 30,


INVESTMENT IN EQUITY SECURITIES

Operator's Fund

Operator's Fund

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

Participants' takaful fund

Units Cost Fair value

PROPERTY AND EQUIPMENT

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

TAK AFUL / RETAK AFUL RECEIVABLES - Unsecured and Considered Good

- Due from takaful contract holders

NET TAK AFUL CLAIMS

- Due from other takaful/ re-takaful operators

Units Cost

Add: Outstanding claims including IBNR - Closing

Less: Outstanding claims including IBNR - Opening

Fair value

September 30, 2019 December 31, 2018



27



7

2019 2018 2019 2018Rupees Rupees Rupees Rupees

Commission paid or payable 9,078,357

9,921,925

30,272,947

30,828,850

Add: Deferred commission expense - Opening 18,260,504

17,784,225

20,541,262

26,372,987

Less: Deferred commission expense - Closing (16,837,095)

(17,337,403)

(16,837,095)

(17,337,403)

Commission expense 10,501,766

10,368,747

33,977,114

39,864,434

Less: Rebate received/ recoverable on re-takaful 4,893,421 5,588,275 13,835,221 16,217,615

Add: Unearned re-takaful rebate - Opening 9,396,629 11,704,666 11,313,380 16,028,937

Less: Unearned re-takaful rebate - Closing (8,945,013) (10,715,900) (8,945,013) (10,715,900)

Rebate on re-takaful 5,345,037 6,577,041 16,203,588 21,530,652

5,156,729

3,791,706

17,773,526

18,333,782

8




Prepaid re-takaful contribution ceded 41,178,218

51,608,690

Operator's fund

Prepaid rent 281,902 325,673 41,460,120

51,934,363

9

2019 2018 2019 2018


Written gross contribution 29,353,278

33,353,066

99,222,063

101,941,675

60,883,326

58,718,115 68,320,211 81,375,925

(47,091,297)

(53,423,809) (47,091,297) (53,423,809)

Contribution earned 43,145,307 38,647,372 120,450,977 129,893,791

Less: Re-takaful ceded 22,423,710

25,576,955 63,806,149 74,179,091

43,268,896

54,908,730 51,608,690 71,992,907

(41,178,218)

(47,303,991)

(41,178,218)

(47,303,991)

Re-takaful expense 24,514,388 33,181,694 74,236,621 98,868,007

18,630,919 5,465,678 46,214,356 31,025,784

10




Federal Excise Duty / Sales Tax 35,909,486

33,876,580

Federal Takaful Fee 380,754 351,262

Payable to related parties 1,425,000 1,425,000

Wakala fee payable 13,881,106 22,470,087

Others 1,318,666 1,536,484

52,915,012 59,659,413

NET TAK AFUL CONTRIBUTION

Add: Unearned contribution reserve - Opening

Add: Prepaid re-takaful contribution - Opening

Less: Prepaid re-takaful contribution - Closing

Less: Unearned contribution reserve - Closing

NET REBATE ON RE-TAK AFUL

PREPAYMENTS

OTHER CREDITORS AND ACCRUALS






28


2019 2018 2019 2018



Held to maturityReturn on term deposits 30,733

13,356

83,031

34,740

Operator's fund

Available for sale

Investment income -

268,161

-

268,161

Dividend income -

1,929

2,002,135

1,929

Held to maturity

Return on term deposits -

-

237,332

157,781

-

270,090

2,239,467

427,871

Realised gain on equity securities - 1,449,341 452,153 2,080,168 1,719,431 2,691,620 2,508,039

INVESTMENT INCOME



Net fair value reserve realized on sale of available for sale investments

Gross written contribution 53,803,584

8,253,538

71,391,359

28,171,023

3,750,601

165,370,105

Gross direct contribution 44,120,246

8,094,784

41,078,416

8,181,890

2,675,144

104,150,480

Facultative inward contribution 8,673,846

81,361

30,128,101

19,947,637

1,037,511

59,868,456


77,393

184,842

41,496

37,946

1,351,169

Takaful contribution earned 46,892,576

5,697,450

48,988,111

16,763,568

2,109,272

120,450,977

(48,186,953)

(5,914,970)

(18,177,267)

-

(1,957,431)

(74,236,621)

Net takaful contribution (1,294,377)

(217,520)

30,810,844

16,763,568

151,841

46,214,356

Rebate income 10,968,172

1,301,292

3,445,171

-

488,953

16,203,588


1,083,772

34,256,015

16,763,568

640,794

62,417,944

Takaful claims (22,585,506)

(6,241,374)

(13,530,374)

(6,699,831)

(493,653)

(49,550,738)

Net claims (5,679,046)

1,182,140

(11,907,457)

(6,699,831)

(492,257)

(23,596,451)

Direct expenses (4,250,212)

(651,988)

(5,639,558)

(2,225,369)

(296,279)

(13,063,406)

Contribution deficiency expense (14,012,985)

(523,006)

(1,760,879)

-

(542,415)

(16,839,285)

Net takaful claims and expenses (23,942,243)

7,146

(19,307,894)

(8,925,200)

(1,330,951)

(53,499,142)

Underwriting results (14,268,448)

1,090,918

14,948,121

7,838,368

(690,157)

8,918,802

Net investment income 83,031

Other income 123,372

Surplus for the period - PTF 9,125,205

Wakala fee 21,521,434 3,301,415 28,556,544 11,268,409 1,500,240 66,148,042

Commission expense (14,590,955) (1,655,156) (12,461,574) (4,801,748) (467,681) (33,977,114)


Investment income 2,691,620

Other income 58,309


Profit / (loss) for the period - OPF (9,235,659)

16,906,460 7,423,514 1,396 25,954,287

Takaful contribution ceded to retakaful

Takaful claims recovered from retakaful 1,622,917 -

HealthFire and property damage

MiscellaneousMarine, aviation and transport

MotorNine-months period ended

September 30, 2019Total

-

SEGMENT INFORMATION

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

2018.

12

13

Operator's fund

Agents commission payable 37,049,932 43,173,845

Accrued expenses 4,305,497 4,658,775

Other tax payables 1,476,743 1,587,006

SPI Insurance Company Limited 31,376,045 25,730,581

74,208,217

75,150,207

127,123,229

134,809,620

11

There is no significant change in the contingencies and commitments since the date of annual audited financial statements for the year ended December 31,

CONTINGENCIES AND COMMITMENTS

Unallocated liabilities - PTF - - - - -

Segment liabilities - PTF 87,508,312 17,622,621 76,815,799 23,963,491 6,502,511 212,412,734

Unallocated liabilities - OPF - - - - - 75,150,207

Segment liabilities - OPF - - - - - -

Unallocated assets - PTF - - - - -

Segment assets - PTF 145,600,314 22,285,899 107,922,499 18,667,706 6,860,558 301,336,976

Unallocated assets - OPF - - - - - 118,925,531

Segment assets - OPF 11,682,679 154,534 7,304,807 1,132,191 267,051 20,541,262

Profit / (loss) for the period - OPF (12,672,280)

Other expenses (1,253,682) Other income 22,423 Investment income 2,508,039


Commission expense (16,790,287) (2,713,413) (9,866,189) (9,911,139) (583,406) (39,864,434) Wakala fee 24,611,592 5,845,852 30,075,484 6,150,126 1,278,062 67,961,116

Surplus for the period - PTF 21,068,861

Other income 121,697 Net investment income 34,740

Underwriting results 6,299,228 (1,679,176) 3,444,650 9,394,732 3,452,990 20,912,424 Net takaful claims and expenses (4,504,110) (2,209,930) (18,751,711) (5,735,403) (442,858) (31,644,012)

Contribution deficiency expense - (1,262,730) - (1,473,231) (154,661) (2,890,622)

26,138,685 3,374,226 2,298,708 - 551,768 32,363,387Takaful claims recovered from retakaful

Takaful claims (28,479,632) (3,807,622) (18,407,023) (3,721,625) (727,634) (55,143,536)

Direct expenses (2,163,163) (513,804) (2,643,396) (540,547) (112,331) (5,973,241) Net claims (2,340,947) (433,396) (16,108,315) (3,721,625) (175,866) (22,780,149)


530,754

22,196,361

15,130,135

3,895,848

52,556,436

Rebate income 10,337,411

2,185,107

5,489,438

(470,895)

3,989,591

21,530,652

Net takaful contribution 465,927 (1,654,353) 16,706,923 15,601,030 (93,743) 31,025,784

(46,253,873) (10,229,068) (27,030,503) (12,557,174) (2,797,389) (98,868,007) Takaful contribution ceded to retakafulTakaful contribution earned 46,719,800 8,574,715 43,737,426 28,158,204 2,703,646 129,893,791

Administrative surcharge 769,358 117,598 237,412 - 30,691 1,155,059

Facultative inward contribution 6,309,045 1,436,044 26,606,792 15,289,574 459,394 50,100,849

Gross direct contribution 54,450,576 13,060,991 48,344,505 85,742 2,705,069 118,646,883

Gross written contribution 61,528,979 14,514,633 75,188,709 15,375,316 3,195,154 169,902,791

Segment assets - PTF 101,258,085 12,175,101 92,324,976 31,834,188 6,673,531 244,265,881

Unallocated assets - PTF - - - - - 19,598,046263,863,927

Segment assets - OPF 9,452,839

172,618

5,739,393

1,191,253

280,992

16,837,095

Unallocated assets - OPF -

-

-

-

-

113,548,011

130,385,106

Segment liabilities - PTF 68,706,924

6,592,089

53,542,067

12,922,675

6,362,341

148,126,096

Unallocated liabilities - PTF -

-

-

-

-

52,915,011

201,041,107

Segment liabilities - OPF -

-

-

-

-

-

Unallocated liabilities - OPF -

-

-

-

-

74,208,217

74,208,217

139,466,793

24,432,789325,769,765

75,150,207

59,659,415272,072,149

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


Fire and property damage

Marine, aviation and transport

Motor Health Miscellaneous Total

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


Fire and property damage

Marine, aviation and transport

Motor Health Miscellaneous Total

29




30


14

2019 2018 2019 2018


Managerial remuneration 4,546,952

2,574,991

12,530,090

7,260,778

Utilities 293,346

236,500

803,556

663,079

4,840,298

2,811,491

13,333,646

7,923,857

Number of persons 7

7

7

12

15

2019 2018 2019 2018


Silk Bank Limited - (Associated Company)

40 40 1,056 800 30,733 13,356 83,031 21,384

Contribution receivable

Balance at beginning of the period 28,241

1,316,731

25,432

19,281

Gross contribution written 2,918,101

459,193

4,724,518

1,854,604

Received / adjusted during the period (22,191)

(114,018)

(1,825,799)

(211,979)

Balance at end of the period 2,924,151

1,661,906

2,924,151

1,661,906

Insurance claim expense

Outstanding claims at beginning of the period 296,264

233,508

383,923

217,508

Gross claim expense for the period 153,677

36,410

287,894

265,255

Claim paid during the period (64,266)

-

(286,142)

(212,845)

Outstanding claims at end of the period 385,675

269,918

385,675

269,918

Other balances with associated companyTerm deposits 1,100,000

1,100,000

1,100,000

1,100,000

Profit and loss sharing accounts -

75,105

-

75,105

Current accounts 2,812,151

2,094,878

2,812,151

2,094,878

Provident fund plan

Contributions made during the period 95,547 90,093 279,369 264,921

16

17

17.1

17.2 Figures have been rounded up to the nearest Rupee.

The related parties comprise United Track Systems (Pvt.) Limited and Silk Bank Limited (Islamic - Emaan) on the basis of related group companies, entities undercommon 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:

These condensed interim financial statements were authorized for issue by the Board of Directors of the Company on ____________________.



DATE OF AUTHORIZATION FOR ISSUE

There is no unusual item included in the condensed interim financial statements which is affecting the assets, liabilities, profit / surplus / loss / deficit,comprehensive income / loss, funds or cash flows of the window takaful operations of the Company.

COMPENSATION OF SHARIAH ADVISOR, HEAD OF TAK AFUL AND EXECUTIVES

GENERAL

Bank chargesProfit on term deposit receipts

RELATED PARTY TRANSACTIONS




October 25, 2019

Head Office:

UIG House, 6-D, Upper Mall, Lahore.

T: (92-42) 35776561-62, 67, 68

F: (92-42) 35776560

E: [email protected]

W: www.spiinsurance.com.pk

3RD QUARTER REPORT2019 - SPI Insurance Company Limited · The annexed notes 1 to 15 form an...

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