Adamjee Insurance Finishing

8/2/2019 Adamjee Insurance Finishing

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TABLE OF CONTENT

PAGE NO.

Acknowledgement 2 Mission &Vision and Core values 3

introduction 4

organizational chart 6

objectives and strategies 7

corporate responsibility 8

social responsibility 8

delivering value to customers 9

performance and financials 11

investment income 12

balance sheet 15-16

statement of cash flows 17

profit and loss account 18

updated stock rates 19

historic high & low 19-20

ratios and values 20

recommendations, suggestions & conclusion 21


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ACKNOWLEDGEMENT

I would like to thank Almighty Allah who made me able to complete this this report by utilizing

my skills and knowledge. I am also thankful for giving me spirit of patience, consistency and

courage during making this report. At Adamjee insurance I would like to thank Mr. Babar

zeeshan who provided me full comprehensive information during making this report


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Mission Statement:

Being the leading insurance company of Pakistan and Second best in Asia, our aim is to

be a significant Participant in developing Pakistan's image by providing maximuminsurance protection at the most Competitive price in a highly efficient manner for

Industrial and economic growth.

Vision

"Our will is to Explore, Innovate and Differentiate. Our passion is to provide leadership

to the Insurance Industry."

Core Values

Integrity

Transparency & Honesty without Compromise

Humility

Empathy, Self Esteem and Respect in all relationships

Fun at Workplace

Work Life Balance

Corporate Social Responsibility

Service to Humanity.


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INTRODUCTION

Adamjee Group is a conglomerate based primarily in Pakistan.

The group was founded by Sir Adamjee Haji Dawood (18801948) who also played a vital role

in the birth of the state of Pakistan by acting as a financial advisor and supporter to Quaid-e-

Azam Mohammed Ali Jinnah, the founding father of Pakistan. Sir Adamjee's role as advisor

gave birth to various economic institutions; the Muslim Commercial Bank (MCB), Orient

Airways, and the Morning Star Newspaper. These were primarily established at the behest of

Quaid-e-Azam Mohammed Ali Jinnah to win the support of the Muslims of India and facilitate

them in migration to Pakistan during the partition of India in August 1947.

The group has had changing fortunes over the past 50 years, initially originating as a Jute and

Banking conglomerate, later spreading to other industries i.e. tea, textiles, matches, sugar, paper

board, chemicals, engineering and Insurance. Enterprises under the umbrella of the group are:

Adamjee Engineering Limited

Chempro Pakistan Limited

Adamjee Polymers Limited

Adamjee Durabuilt Limited

Adamjee Pharmaceuticals Limited

Pacific Multi Products Limited

Adamjee Diesel Engineering (Pakistan) Limited

Adamjee Insurance Limited Adamjee Foundation

Adamjee Automotive Limited

Over the years, the Group has diversified into different sectors, the most prominent being the jute

mills, textiles and the Adamjee insurance company. Today the Adamjee name is a household

name in Pakistan and Bangladesh. Continuing with Sir Adamjees philanthropic activities, his

family established various learning centers and medical institutions i.e. Adamjee Eye Hospital,

Adamjee Science College, Lady Mariam Adamjee Girls School, Sir Adamjee Institute of

Technology, and the Adamjee High School in Dhaka.


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Adamjee Insurance Company Limited (AICL) - General Insurance Company founded in 1960

celebrated its 50 years commitment to Insurance. The Company is listed on all three stock

exchanges of the country. The head office is located in Karachi and it operates a network of 34

branches in Pakistan and one in UAE (Dubai).

The company commenced operations with a paid-up capital of Rs. 2.5 million, which has grownphenomenally in the past 5 decades to PKR 1.24 billion, as on Dec 31, 2010.

A strong asset base, significant paid-up capital, substantial reserves, balanced portfolio mix

along with steady growth in gross premium account gives Adamjee Insurance a well-deserved

competitive edge within the insurance industry.

Creating a Dynamic Business Environment:

AICL meets customer needs by providing innovative solutions with their varied line of products.

Our dedicated employees are equipped with all the necessary skills that are needed to serve our

valued customers. AICL continues to strengthen and expand its regional operation by tapping the

potential available in the UAE market, with the consolidation of business in Dubai. AICL with

Hollard Insurance based in South Africa launched Life assurance operations through a separate

entity name, Adamjee Life Assurance Company Limited.

The diversity of AICLs portfolio allows the Company to be the insurer of choice, for an array of

clients and needs. Whilst expanding their customer base, AICL dedicates much effort in

maintaining the highest level of customer satisfaction. Its cornerstone philosophy is to provide

premium quality service along with forwarding the maximum benefit to its clients. Thiscommitment is exhibited in the importance AICL places on excellence, integrity and ethical

behavior. These values foster confidence, especially in our clients for whom security is

imperative. The high level of confidence AICL inspires is evident in the number of banking and

financial sector clients that AICL insures.

AICL also provides coverage to Petrochemical, Factories and Industrial Risk projects of great

value. AICL specializes in insuring Engineering and Telecom concerns, hence securing the

greatest share of clients in those sectors. On the other end of the spectrum, AICL services the

primary industries of Pakistan by covering Textile and Sugar. Accomplishing the role as a leader

in Pakistans Insurance Industry; AICL pioneered the coverage of Energy Risks. AICL has also

secured the business of foreign investors entering Pakistan to execute and assemble construction

or infrastructure development projects. AICL is the principal insurer of Kidnap & Ransom,

Professional Indemnity, Product Liability and other specialized lines in Pakistan.


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ORGANIZATIONAL CHART

Saqib Ellahi

Director

Shahzad Saleem

Director

Muhammad Naeem Mukhtar

Director

Ibrahim Shamsi

Director

Muhammad Ali Zeb

Chief Financial Officer

Taneez-ul-Haque

Secretary

Assisstant General Managers

Deputy General Managers

Joint General Managers

Senior Joint General Managers

General Managers

Assisstant General Managers(Dev)

Deputy General Managers(Dev)

Joint General Managers(Dev)

General Managers(Development)

Senior General Managers

Nasreen Rahid

Deputy Managing Director

Mian Muhammad Mansha

Advisor

Shahzad Saleem

Member

Muhammad Naeem Mukhtar

Member

Auditt Comittee

Arif Ijaz

Managind Diector & Chief Executive

Abdul Hamid Adamjee

Director

Abdul Razzak Adamjee

Director

Wasif M. Khan

Director

Board of Directors


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Objectives:

Strengthen customer relationship through customer satisfaction by providing excellent service

and quality products. Maintain a healthy balance between Profitability and Volume and have a

balanced portfolio mix. Increase investment returns from its growing funds and absolute returnstrategy.Consolidate market share through offering new products and to focus our approach in areas

where our presence is small. Establish modern management system and adopting latest

techniques conforming to international standards needed for an efficient organization.

Strategy:

To pursue strong growth: by adapting industry best practices and increasing economies of scale

and through leveraging opportunities across the industry. Development in Human resourcethrough training and exposure to modern technologies and management techniques. Expansion

of business and improving customer relationship management through wide network of branches

locally and internationally.


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Corporate Responsibility:

Our corporate responsibility focuses on compliance, ethics and corporate citizenship including

overall sustainability and we have worked to advance these areas through enhancedcommunications, training and other initiatives.

Committed to Excellence:

We live in times of intense competition, but our key-differentiating factor is our unwaveringcommitment to operation and financial discipline in producing successful results, keeping our

promises and meeting our customers needs.

MOTIVATION:

At Adamjee it is believed that the motivation of employees is a major factor that can bring

enormous good to the organization itself. Encouraging employees to achieve short term and long

term goals and helping them overcome obstacles that may be encountered on the way can

motivate employees to excel to their personal best.

SOCIAL RESPONSIBILITY:

Adamjee is well known for its Adamjee Trust organization. This is an organization established

by Adamjee which engages in social responsibility whenever possible. This organization donates

millions of rupees each year to charity, and whenever it can lend a helping hand to the people ofPakistan, helping poverty stricken kids get an education, Adamjee Trust is by far a leading

organization in Pakistan that has engaged in organizational social responsibility. Adamjee isconstantly seeking actions that protect and improve the welfare of society along with its own

interests. The major

QUALITY POLICY:

The management and employees of Adamjee Insurance demonstrate commitment in satisfying

customer needs for managing the risk assessment in General Insurance. In alignment withsatisfaction of customer needs, processes are established to support the vision and values of the

Company.


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Delivering Value to Customers

AICL broadly is involved in underwriting the following classes of businesses :( core business).

Fire and Property:

Fire Insurance policy provides compensation to the insured person or

firm in the event of damage to the property insured (i.e. buildings, stock, machinery and

other contents) caused by fire, lightning.

Engineering:

This branch of engineering insurance offers comprehensive and

adequate protection against all the risks involved in the construction of civil works of any

kind, including surrounding property and third-party claims in respect of property

damage or bodily injury arising in connection with the execution of a project.

Health:

Adamjee Insurance is one of the largest Health Insurance providers catering to the

health and medical needs of the Corporate and SME sectors for their employees with

customized benefits structure and value added services. ADAMJEE guarantees you best

quality services that not only give you peace of mind for being insured by a leading and

dependable insurer but also ensures fast and speedy access to medical services when the

need arises while promoting better healthcare practices. Our customized Health insurance

plans can cater for your needs.

Marine:

Marine Insurance covers damages to the shell and machinery of the vessel, cargo

carried on the vessel, and also offers protection against liabilities to shipping and

transport related companies.

Motor:

Motor Insurance policy is mandatory under the Motor Vehicle Act. Owing

Adamjee Insurance Company Limited Motor Insurance ensures that the owner of vehicle

is protected from financial losses, caused by damage or theft to the vehicle and third party

liability.

Retail:

Pakistan's agricultural sector contributes 23.3% to Pakistan's GDP. Being the largest

sector yet still widely disregarded in terms of insurance, Adamjee Insurance took an

initiative to introduce the concept of Crop Insurance.


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Miscellaneous business:

Miscellaneous class of business offers various kinds of insurance products that include

Public liability, Group Health, Personal Accident, liabilities associated with employers,

insurance to financial institutions and Aviation industry and many more

The range of miscellaneous product is:

o Group Health Insurance

o Personal Accident Insurance

o Bankers Blanket Bond

o Plastic Card Insurance

o Public Liability Insuranceo Professional Indemnity Insurance

o Event Insurance

o Workmen's Compensation

o Employers Liability Insurance


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PERFORMANCE AND FINANCIALS:

As the national economy has been experiencing many

deterioration in comparison to the corresponding year. Macroeconomic stability is disturbed

from unsustainable balance of payment, devaluation of currency, escalating non-food and food

inflation, low mobilization of domestic and human resources cause draining productivity level

,decreasing level of investment and savings, deteriorating security situation, continued reliance

on external barrowings.

Even now the GDP has recorded a growth rate of 2.4% mainly due to strong performance of

service sector.

IN (2011) the gross premium decreased by 4% and primarily owing the loss of business in motorand miscellaneous classes of business.


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IN (2011) the net claims have decreased by 3% to 68% compared to 71% last year.Net

commission and management expenses reduced by 2% to 7%.net claims improved by 115% and

comparatively less than last year losses in property and crop business portfolios.

INVESTMENT INCOME:

The KSE-100 index remained low and index declined to 6%only to close at 11,348 In 2011 as

compare to 12,022 in 2010.Income from investments increased from rupees 779 million to

rupees 852 million in 2011.rise in dividend income and capital gains from rupees 511 million torupees 806 million and from 96 million to rupees 367 million in 2010 to 2011.


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Companys assets: On 31 December 2011 the total assets of the company stood at rupees 24,082million against rupees 27,887 million last year, showing a decrease of 14%due to increase in

current assets. The total cash and bank balances at the end of the year was rupees 2,379 million

as against rupees 2.705 million last year showing the decrease of 12%.


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BALANCE SHEET

ASSETS: (2011) (2010)

RUPEES IN THOUSAND


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LIABILITIES AND OWNERS EQUITY. (2011) (2010)

RUPEES IN THOUSAND


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STATEMENT OF CASHFLOWS (2011) (2010)

RUPEES IN THOUSAND


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PROFIT AND LOSS ACCOUNT

Revenue accountNet premium revenue 1,203,286

(655,775)912,455 2,974,057 1,893,546 - 75,444 26 355,992 360,488 7,775,294 7,098,887

Net claims - restated (494,320) (2,000,623) (1,598,395) - (28,415) - (942) (363)(4,778,833) (4,884,479)Expenses 22 (217,992) (164,275) (503,698) (343,372) - (37,171) (300) (69,603) (64,306)(1,400,717) (1,400,355)Net commission (92,018) (149,164) (248,126) 13,046 - (24,487) (7) (175,708) (187,804) (864,268) (640,881)Net Investment income- statutory funds - - - - - 7,862 8 14,019 913 22,802 6,162Add: Policyholders' liabilities atbeginning of the year - - - - - 20,034 59 79,386 - 99,479 11,499Less: Policyholders' liabilities atend of the year - - - - - (54,320) (8) (247,183) (178,051) (479,562) (99,479)Capital contribution fromshareholders' fund - - - - - 51,737 302 63,297 69,123 184,459 154,367Surplus of Policyholders' funds - - - - - (10,684) (80) (19,258) - (30,022) -Underwriting result 237,501 104,696 221,610 (35,175) - - - - - 528,632 245,721

Investment income - other 763,569 765,396Rental income 657 1,048Other income 158,608 171,239

1,451,466 1,183,404General and administration expenses 24 (1,577,675) (646,338)Exchange gain / (loss) 390 (1,396)Finance charge on lease liabilities (15,179) (18,966)Share of profit from associatedcompanies 218,610 136,188Profit before tax 77,612 652,892

Provision for taxation 170,838 (62,993)

Profit after tax 248,450 589,899Profit attributable to:Equity holders of the parent 240,138 584,220Non-controlling interest 8,312 5,679

248,450 589,899

Profit and loss appropriation account - Parent Company

Balance at the commencement of the year 8,701,466 8,522,098Profit after tax for the year attributable to equity holders of the parent 240,138 584,220Final dividend for the year ended 31 December 2010 @ 15%(Rupees 1.5/- per share) [2009: Rupees 1.5/- per share] (185,557) (168,688)Issue of bonus shares for the year ended 31 December 2010Nil (2009:10%) - (112,459)Interim dividend @ 10% (Rupee 1/- per share)[2010: Rupee 1/- per share] (123,705) (123,705)Balance unappropriated profit at the end of the year 8,632,342 8,701,466

Rupees Rupees

RestatedEarnings per share - basic and diluted (Note 26) 1.94 4.72


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RATES FOR THE MONTH OF APRIL 2012

(HISTORIC HIGH AND LOW)

opening

0

20

40

60

80

100

2-Apr9-Apr

16-Apr23-Apr

opening

closing

high

low

average

high

27%

low

26%

52week(high)

32%

52week(low)

15%

price change

0%


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RATIOS

Current P/E Ratio (ttm) 12.2896Estimated P/E (12/2011) 13.0075

Earnings Per Share (PKR) (ttm) 5.4900

Est. EPS (PKR) (12/2011) 5.1870

Est. PEG Ratio -

Market Cap (M PKR) 8,346.35

Shares Outstanding (M) 123.70

Enterprise Value (M PKR) (ttm) 6,183.91

Enterprise Value/EBITDA (ttm) -

Price/Book (mrq) 0.7372

Price/Sale (ttm) 0.9387

Dividend Indicated Gross Yield 3.7147Volume 1,968,304

52wk Range: 38.8200-81.1300

Dividend Yield Annualized (PKR) 1.4859

Dividend Indicated Gross Yield 3.7147

Last Dividend Reported (PKR) (10/04/2011) 1.0000

Relative Dividend Yield 0.2426

5Y Net Growth -15.45%

0

50

100

150

200

250

300

350

400

450

500

last 30 days last 90 days last 1 year last 3 year last 5 years

high

low

Column1

Last 30 da 81.13 54.4 2,329,861

Last 90 da 81.13 48.12 2,329,861

Last 1 yea 81.13 38.82 2,329,861

Last 3 yea 135.2 38.82 13,363,705

Last 5 yea 430.9 38.82 13,363,705

All time ( 430.9 37.5 19,421,000


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RECOMMENDATION:

We recommend Adamjee to continue its operation all over the country. Other companies mighthave restricted their operation to a city or two, but Adamjee has its operation in nearly every city

of Pakistan. Motivation of employees is also what we find a positive factor in Adamjeesoperation. Their employees work hard to achieve the organizations goals and they are alsorewarded with incentives which motivates them to help Adamjee to the top. What Adamjee lacks

is the customer service at a few departments. Agents should reach the client themselves and

solve their queries. Work has to be searched in a country like Pakistan where lacks of awareness

is a big factor. If Adamjee employees reach the people and explain the need and benefits ofinsurance like fire incident insurance, Adamjee will surely increase its business. Another thing

we noticed is that Adamjee has a very low advertising sector. Advertising is an important asset

for a company operating in Pakistan along with competitors as people of Pakistan never survey

for a matter. They would call the first insurance company which comes in their mind which isdone only through advertising which Adamjee lacks. Adamjee has a good future in Pakistan

growing its operation and leading the insurance business.

Suggestion for stockholders:

Suggestion for the stockholders is that Adamjees shocks value has seen most frequent to be

high and to be low because of subsequent trading and stock has not fully successful to get an

attractive worth so stock holders has to wait until the stock is not gaining the massive worth. As

the stocks value goes up the shareholder have to sell out their holding to avoid losses.

CONCLUSION:

We after weeks of study and visiting Adamjee insurance find Adamjee as the leading insurance

company of Pakistan. Surely there are others in the market that is competitive enough like AIGinsurance, but what we find in the statistics of Adamjee could not be found in any other

insurance company. The numbers of cars running only in Karachi are the highest number of cars

insured by any other insurance company. The amount of risk Adamjee takes insuring smallbusiness and arranging ransom money for kidnapping insurance cases is not taken by any other

which makes them unique in the market.

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