CONTENTS

Sr.No. Description
1 Contents
2 Vision
3 Mission
4 Strategy
5 Objectives
6 Corporate Information
7 Directors’ Profile
8 Company Profile
9 Chairman’s Review Report - 2022
10 CEO’s Message
11 Directors’ Report English & Urdu
12 Notice of the 22nd Annual General Meeting
13 Statement of Compliance with the Public Sector Companies (Corporate Governance) Rules, 2013, Listed
Companies (Code of Corporate Governance) Regulations, 2019 and Code of Corporate Governance for
Insurers 2016
14 Review Report to the Members on Statement of Compliance with the Public Sector Companies
(Corporate Governance) Rules, 2013, Listed Companies (Code of Corporate Governance) Regulations,
2019 and Code of Corporate Governance for Insurers 2016
15 Explanation for Non-Compliance with the Public Sector Companies (Corporate Governance) Rules, 2013,
Listed Companies (Code of Corporate Governance) Regulations, 2019 and Code of Corporate
Governance for Insurers 2016
16 Auditors’ Report to the Members on Conventional Reinsurance
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
17 Statement of Financial Position (Conventional)
18 Profit and Loss Account (Conventional)
19 Statement of Comprehensive Income (Conventional)
20 Statement of Changes in Equity (Conventional)
21 Statement of Cash Flows (Conventional)
22 Notes to the Financial Statement (Conventional)
23 Auditors’ Report to the Members on Window Re-Takaful
24 Statement of Financial Position (Retakaful)
25 Profit and Loss Account (Retakaful)
26 Statement of Comprehensive Income (Retakaful)
27 Statement of Changes in Equity (Retakaful)
28 Statement of Cash Flows (Retakaful)
29 Notes to the Financial Statement (Retakaful)
30 Pattern of Shareholding
31 Proxy Form
32 Form for Bank Account Details for Payment of Cash Dividend
Corporate Information
BOARD OF DIRECTORS OF PRCL
Members Types
Mr. Mumtaz Ali Rajper Chairman Board / Director Non-Executive
Dr. Kausar Ali Zaidi Director Non-Executive
Dr. Musleh-ud-Din Director Independent / Non-
Executive
Mr. Muhammad Rashid Director Non-Executive
Mrs. Zara Shaheen Awan Director Independent / Non-
Executive
Mr. Shoaib Mir Director Independent / Non-
Executive
Mr. Farmanullah Zarkoon Chief Executive Officer Executive

COMPANY SECRETARY

Mr. Sumeet Kumar

BOARD COMMITTEES

AUDIT COMMITTEE

Dr. Musleh-ud-Din Chairman

Dr. Kausar Ali Zaidi Member
Mr. Muhammad Rashid Member
Mr. Shoaib Mir Member
Mr. Asif Kamal (CIA) Secretary

ETHICS, HUMAN RESOURCE & REMUNERATION COMMITTEE

Mr. Mumtaz Ali Rajper Chairman

Dr. Kausar Ali Zaidi Member
Dr. Musleh-Ud-Din Member
Mrs. Zara Shaheen Awan Member
Chief Executive Officer Member
Head of HR Department Secretary

INVESTMENT COMMITTEE

Mr. Shoaib Mir Chairman

Mr. Muhammad Rashid Member
Mr. Mumtaz Ali Rajper Member
Mr. Musleh-Ud-Din Member
Chief Executive Officer Member
Chief Financial Officer Secretary

PROCUREMENT COMMITTEE

Dr. Kausar Ali Zaidi Chairman

Mr. Mumtaz Ali Rajper Member
Mrs. Zara Shaheen Awan Member
Chief Executive Officer Member
Head of Administration Secretary

MANAGEMENT COMMITTEES

RISK MANAGEMENT AND COMPLIANCE COMMITTEE

Mr. Muhammad Rashid Chairman

Dr. Kausar Ali Zaidi Member
Mrs. Zara Shaheen Awan Member
Chief Executive Officer Member
Head of Risk Management Officer In Mandatory Attendance
Head of Legal In Mandatory Attendance
Compliance Officer In Mandatory Attendance
Company Secretary Secretary

UNDERWRITING / REINSURANCE COMMITTEE

Dr. Kausar Ali Zaidi Chairman

Chief Executive Officer Member
Executive Director (Underwriting) Secretary

CLAIMS SETTLEMENT COMMITTEE

Mr. Mumtaz Ali Rajper Chairman

Mr. Shoaib Mir Member
Chief Executive Officer Member
Head of Claims Department Secretary

SENIOR MANAGEMENT

Mr. Farmanullah Zarkoon Chief Executive Officer

Mr. Muhammad Junaid Moti, Head of Underwriting/ Reinsurance
Mr. Asif Kamal Chief Internal Auditor
Syed Aamir Chief Financial Officer
Mr. Sumeet Kumar Company Secretary
Mr. Arham Rahim Head of HR
Ms. Hina Gul Head of Northern Zonal Office
Mr. Tameez-ud-Din General Manager ( Northern Zonal Office)
Mr. Bashir Ahmad Compliance Officer / HOD (Risk Management)
Mr. Muhammad Rafique Head of IT
Mr. Inayat Ullah Head of Administration
Mr. Muhammad Naveed Iqbal Head of Investment
Mr. Hans Hussain Soomro Head of Accounts
Mr. Zohaib Hasan Head of Data Processing
Ms. Erum Nadeem Head of Legal Department
Mr. Muhammad Asif Ghafoor Procurement Specialist
Mr. Muhammad Akbar Manager Accounts
Ms. Muhammad Amin Head of Claims
Mr. Muhammad Ahmed Head of Re-takaful

AUDITORS REGISTERED OFFICE

BDO Ebrahim & Co., PRC Towers, 32-A, Lalazar Drive
Chartered Accountants M. T. Khan Road, P.O. Box: 4777
2nd Floor, Block-C, Lakson Square Karachi-74000, Pakistan.
Building No.1, Sarwar Shaheed Road, Tele: (92-21) 99202908-15
Karachi. – 74200 Telefax: (92-21) 99202921-22
Email: [email protected]
Website: www.pakre.org.pk

BANKERS ZONAL OFFICE

National Bank of Pakistan 37/A New Muslim Town,
Bank Al-Habib Limited Lahore.
Sindh Bank Limited Tele: (92-42) 35969389-92

SHARE REGISTRAR
Central Depository Company of Pakistan
Limited
CDC House, 99-B,Block-B, SMCHS
Main Shahra-e-Faisal
Karachi-74400, Pakistan
Tele: (92-21) 111-111-500
DIRECTORS PROFILE
Mr. Mumtaz Ali Rajper holds a Master’s Degree in Economics.

He has more than 33 Years of experience with Pakistan International

Airlines, Sindh TV, and Mehran TV.

He was on PAKRE Board as a Nominee Director of Government of

Pakistan since April 2010 and now he has been elected as Director
effective December 2013. He also serves on the Board of Matrix (Pvt)
Limited. He is also a certified Board Director fromthe Institute of
Chartered Accountants of Pakistan.

Dr. Musleh ud Din holds Ph.D. in Economics from Johns Hopkins

University. He has more than 30 years of experience in teaching and
policy-oriented research. He has published widely in national and
international journals in the areas of macroeconomics, financial sector
development, and trade policy. He has served as a member of various
high-level committees and is currently a member of the Economic
Advisory Council. He also serves as executive editor of the Pakistan
Development Review. Dr. Musleh ud Din has conducted a number of
research projects under the aegis of the World Bank, Asian
Development Bank, and United Nations. He is also a certified Board
Director fromthe Institute of Chartered Accountants of Pakistan.

Mrs. Zara S. Awan is a barrister of Lincoln’s Inn and an advocate of the

High Courts of Pakistan.

She is a practitioner and an academician. Zara received her education

at the Inns of Courts School of Law (UK) and the University of Kent at
Canterbury (UK), Karachi Grammar School & the Convent of Jesus &
Mary Karachi.Zara is associated with both practice and academia and
advises and represents parties on a Pro Bono basis as well. She has
experience in civil, commercial and arbitration laws and is also a
Director of the University of London International Law Programs at an
affiliated institution In Karachi.

Mr. Kausar Ali Zaidi is a civil servant who has financial and
administrative expertise with 22 years of practical experience as DG,
Trade Dispute, Joint Secretary Special Initiative, Executive Director,
Joint Secretary Admin, and Insurance, Director General Admin, and
Director Admin at various Ministries and Divisions. He has also served as
a Member of the Policy Board, Security, and Exchange Commission of
Pakistan (SECP) as a representative of the Ministry of Commerce. He
completed his Master’s in International Law and Economics (MILE) in
2005 from the World Trade Institute, University of Bern, Switzerland,
and also a Fellowship, in International Trade Law in 2006 from IDLO,
Sydney, Australia.
Mr. Muhammad Rashid is currently working as Chief Financial Officer at
State Life Insurance Corporation of Pakistan. He is F.C.MA, C.I.A
(U.S.A), and F.L.M.I (U.S.A) and has vast experience of around 31 years
in Finance and Accounts. He participated in many finances as well as
administration-related programs, seminars, and pieces of training from
time to time. He remained on the Board of Directors of Alpha Insurance
Company Limited as well as Pakistan Cables Limited.

Mr. Shoaib Mir is a retired Pakistani Administrative Service (PAS)

Officer of Federal Government in BS-22. He remained posted as Chief
Secretary Balochistan, Federal Secretary to the Government of
Pakistan, Chairman, State Life Insurance Corporation and other leading
Administrative & Financial positions in Federal, Provincial Governments
and Public Sector Enterprises.

Mr. Shoaib Mir Joined Civil Services in 1986, having vast professional
experience in Senior Management positions in diversified fields such as
Public Sector Management, Administration. Finance, Health, Insurance
and Planning etc., his roles and responsibilities included

 Leading as an administrative Head of the Province

 To implement policies of the government
 Assisting the Government in formation of policies
 Ensuring the efficient and effective working of the
administration
 Ensuring law and order of the province
 Coordination and promotion of economic and development
activities.

Moreover, Mr. Shoaib Mir has also been an active academician and
visiting faculty to following:

1. National School of Public Policy's affiliate units of National

Institute of Management at Karachi, Lahore, Islamabad,
Peshawar and Quetta to impart mandatory promotion trainings
to the Senior and Mid-career level civil servants of the Federal
Government, Provincial Governments, Autonomous Bodies and
Public Sector Organizations.
2. Professional Development Programs at Highway Research &
TrainingCentre, NHA, Pakistan
3. Secretariat Training Institute, Pakistan. Imparting Specialized
Training which includes Organization and Machinery of the
Government.
4. Civil Services Academy Lahore. A premier training institution of
Pakistan for pre-service training of Civil Servants.
5. State Life Training Academies at Islamabad, KPK, Karachi,
Hyderabad, Lahore, Faisalabad and Multan.
6. Defense Services Intelligence Academy, Islamabad.
Mr. Farmanullah Zarkoon is an accomplished professional with
extensive leadership experience and a strong educational background.
He holds a Certificate in Chartered Insurance (‘ACII’) from the
Chartered Insurance Institute in London, an MBA from Germany, an MS
from Poland (‘Erasmus Exchange Semester’), and a Bachelor's degree in
Computer Engineering from GIK Institute of Engineering Sciences &
Technology, Pakistan. He has completed various training programs,
including the 20thMid-Career Management Course from National
Institute of Management (‘NIMS’), Karachi, 21stNational Security
Workshop from National Defense University, Islamabad, and SECP
Certified Directors Training Program from LUMS, Lahore.

Throughout his career, Mr. Zarkoon has garnered extensive professional

expertise in areas such as Underwriting, Reinsurance, Corporate
Governance, Human Resources, and Risk Analysis & Management. He
has held various illustrious tenures in leadership roles. He has served as
the Chief Executive Officer (CEO) and Director on Board (Policy &
Planning Committee) at the Balochistan Board of Investment and Trade
(BBolT), as well as Commissioner (Operations) in the Balochistan
Revenue Authority, Government of Balochistan. Prior to his
appointment as CEO of the Pakistan Reinsurance Company, he had also
served as an Executive Director in the same organization.

Mr. Zarkoon is known for achieving challenging goals, taking fast and
decisive actions when needed, outperforming the competition and
inspiring other to perform at the highest level they can. His leadership
style emphasizes business development and the implementation of
Digital Leadership & Automation/Digitization of processes within
Government organizations.
PRCL is a Public Sector Company attached to the Ministry of Commerce. The Company is
supervised by a Board ofDirectors, which is assisted by the Management comprising a
strong team of professionals who effectively manage thebusiness affairs of the Company.
The Seven Member Board comprises four Government Nominee Directors, two
ElectedDirectors, one Nominee of State Life Insurance Corporation.

PRCL’s prime objective is the provision of reinsurance services in Pakistan. The company is
the only national reinsurer. It provides reinsurance protection to the local insurance industry
by way of treaty and facultative businesses.

Company History

PRCL was established in 1952 as Pakistan Insurance Corporation under the PlC Act, 1952,
with the objective ofsupporting the local insurance industry. In the year 2000, Pakistan
Insurance Corporation was converted andincorporated as a public limited company namely
Pakistan Reinsurance Company Limited vide Ministry of CommerceSRO No.98(1)/2000
was issued under the Presidential Ordinance No. XXXVI of 2000 dated 14th February 2001.

Types of Businesses undertaken by Company

Fire – Building, Stock, Plant, Machinery, Crop;

Marine – Hull, Cargo, (Primary, War liabilities);
Aviation – (Aircraft, Cargo, Crew, Passengers, Third Party Liability);
Accident – Motor, Fidelity Guarantee, Personal Lines;
Liability – Employers Liability, Professional Indemnity, Workman Compensation;
Engineering – Property Damage, Business Interruption, Plant, Machinery Breakdown,
TPL, Erection All Risks,Contractor All Risks, etc.
Public Sector Risks: Oil Refineries, Power Projects, Oil and Gas Exploration, Fields /
Operations, Hydel Power,and Nuclear Power Projects.

Business Operations

The reinsurance operation of the Company consists of the following departments:

Underwriting Department deals with scrutiny and acceptance of risk offered by local
insurers, both under theFacultative and Treaty arrangements.

Retrocession Department undertakes to tender of risks ceded by National Insurance

Company Limitedincluding their placement with foreign insurers.

Claims Department deals with claims notified by cedants under both the Facultative and
Treaty arrangementsand approval of claims.
CHAIRMAN’S REPORT
Dear Stakeholders,

It is with great pleasure that I present to you the Chairman's review of the Pakistan Reinsurance
Company Limited (‘PRCL’) for the year 2022.

The year was marked by a series of global economic challenges, including the Russia-Ukraine war,
energy crisis, global inflation, rising interest rates, and slowing demandwhich resulted in concerns about
a potential global recession. Furthermore, Pakistan faced additional difficulties due to severe political
instability, devastating floods, trade imbalances, falling foreign currency reserves, and significant rupee
devaluation which caused certain industries to come to a halt and put the country on the brink of
default. Despite these severe challenges, I am proud to say that PRCL not only weathered the storm but
exceeded expectations.

Throughout the year, we remained committed to our strategic objectives, ensuring that our
underwriting and investment portfolios were well-managed and profitable. Our gross premiums written
increased to Rs. 24,271 million, a significant improvement from Rs. 20,994 million the previous year. We
also continued to demonstrate our commitment to effective risk managementwith claims for the year
ending at Rs. 4,312 million. Additionally, our profit after tax was Rs. 2,624 million, a notable
improvement from the previous year. Our Retakaful window also operated smoothlyand we anticipate
strong growth in this area in the years to come.

Our Board of Directors has fulfilled its fiduciary duty comprehensively with the support of four Board
Committees and three Management Committees. Our robust system of controls, governance, and risk
management ensures that the Company's assets and the interests of its shareholders are always
protected. As always, we remain committed to strict adherence to the laws of the country as well as to
the highest standards of integrity and ethical conduct. We are also excited about the opportunities
presented by the completion of CPEC projectswhich are expected to have a positive impact on the
insurance and reinsurance sector in the coming years.

I would like to express my sincere appreciation to our employees and business partners for their
consistent professionalism and dedicated efforts. I would also like to extend my gratitude to our
shareholders and board members for their unwavering confidence and steadfast commitment to the
Company. It is this trust and support that has enabled us to make progress while ensuring the growth
and sustainability of Pakistan's Insurance and Reinsurance Industry.

Sincerely,

Mumtaz Ali Rajper

Chairman
CEO’S MESSAGE
Dear Shareholders,

As we reflect on the past year, we acknowledge the global challenges that have affected economies and
communities worldwide. Nonetheless, we are proud to report that Pakistan Reinsurance Company Limited
(‘PRCL’) has demonstrated remarkable resilience and adaptability amidst these difficulties.

The global economy witnessed a significant decrease in growth from 6% to 3.2% in 2022, accompanied by
persistent inflation rates. Moreover, various geopolitical challenges have further impacted the economic
environment, including Russia's invasion of Ukraine and the energy crisis. In Pakistan, these challenges were
compounded by dwindling foreign exchange reserves, inflationary pressures and a rapidly devaluing Pakistani
Rupeeas well as the devastating effects of floods in the Country which impacted over 33 million people and
submerged 9.4 million acres of cropland, resulting in total losses of USD 30 billion.

Despite the challenges faced by the industry, PRCL has reported a notable increase in its gross written
premium from PKR 20,994 million in 2021 to PKR 24,271 million in 2022. This success can be attributed to
multiple factors, one of which is the development of a talented and resourceful cohort of executives who
have brought their expertise to this Company. These executives have implemented prudent underwriting
practices and established more robust mechanisms for retrocession covers. By focusing on business
development through these strategic approaches, PRCL has been able to optimize its risk management and
increase profitability while mitigating potential risks. In addition, PRCL has placed a strong emphasis on
employee development by providing a variety of training and development programs. Along with these
achievements, PRCL has issued 200% bonus shares, raising its share capital to PKR 900 million, and
established a centralized claim department to improve its claims management and customer service.
Notably, PRCL has reported a profit after tax (PAT) of PKR 2,624 million, compared to PKR 2,589 million in the
previous year, further reinforcing its impressive financial performance.

Furthermore, we have made significant investments in our technological infrastructure to better manage our
business through unmanned processes and strengthen our risk management systems. We have implemented
an Enterprise Resource Planning (ERP) system and upgraded our physical network with the latest hardware,
resulting in reduction in discrepancies in the workflow.To further safeguard our data integrity and mitigate
the risk of data loss, we have established a cutting-edge Datacenter and a Disaster Recovery (DR) setup.
Additionally, we have established an enterprise risk management (ERM) framework that integrates risk
management against all the risks associated with our strategic objectives. Besides, we have also has taken
measures to strengthen our Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)
framework by implementing updated mechanisms in line with the latest regulatory standards, thereby
mitigating the risks of money laundering, terrorist financing or any regulatory non-compliances. These
measures are actively enforced and monitored by our diligent compliance function.Moreover, our
unwavering commitment to regulatory compliances has enabled us to successfully mitigate all potential risks
by developing various strategies to manage, eliminate, or limit setbacks them as much as possible, resulting
in optimizing and augmenting the performance of the Company.

In line with our Corporate Social Responsibility, we have allocated a significant amount to help the flood
victims in Baluchistan and Sindh. As a responsible entity, we recognize the importance of giving back to
society and supporting communities in need.
Finally, we are pleased to announce that M/s. JCR-VIS undertook the credit rating of the Company for the
year, and the Company's credit rating of AA was re-affirmed with a positive outlook. This rating reflects our
robust capacity for timely payment of financial commitments with no significant vulnerability to foreseeable
events.

We appreciate your continued trust in PRCL and thank you for your ongoing support.

Sincerely,

FarmanullahZarkoon
Chief Executive Officer
Directors’ Report
To the Shareholders

Dear Shareholders,

On behalf of the Board of Directors, we are pleased to present the Directors’ Report of the Company along
with the audited financial statements and Auditors’ report for the year ended December 31, 2022.

Economic Review:

After a remarkable growth phase of FY 2022, when the economy grew by 6%, FY 2023 began with the worst
floods causing damage of more than USD 30 Billion; Pakistan’s economy is expected to grow at less than 2%
in the current year. Regime change and political uncertainty put the focus on the economy on the back
burner which resulted in Govt. facing multiple challenges.

CPI inflation during the 1HFY23 clocks in at 25.02% compared to 9.81% in 1HFY22. The inflation is expected
to remain high in the remainder of the period of FY 2023 as pressure mainly emanating from any further
energy tariff hikes, weaker currency against the greenback, and a surge in food prices will continue.

To counter inflation, the State Bank of Pakistan continued its policy of monetary tightening and increased
Policy Rate by 300 bps to 21% in its preponed Monetary Policy meeting; taking the total increase to 10.25 %
in the past 12 months.

Pakistan’s foreign exchange reserves depleted to nine-year lows, falling to $2.9 billion by 3 Feb2023, amid
delays in the IMF review. Other external financing avenues are also linked to the IMF Board approval. The
completion of a number of prior actions, including additional taxation measures and further increases in
fuel, gas, and utility prices should help move closer to the Staff Level Agreement.

PKR remained under severe pressure and has depreciated by more than 60 % in 1 year. Unless the Staff
Level Agreement with IMF is not reached without further delay, the PKR will remain unstable and weak.

The primary surplus in 1HFY 2023 improved significantly, both in absolute and percentage terms; this
clocked in at 1.1% of GDP compared to 0.1% of GDP in 1HFY 2022. Tax collections increased by 17% YoY in
1HFY’23, driven by a 50% increase in direct taxes. However, current expenditure increased by 30%, led by
floods and a 77% increase in mark-up payments. The fiscal deficit for 1H FY2023 thus registered a 23%
increase over 1HFY2022 to PKR 1.7 trillion, although it remained at 2.0% of GDP.
Despite all the challenges, including high inflation, weak PKR, and a high debt burden, we believe that the
economy will stabilize and will be on the path of recovery during second half of 2023.

Company Performance Highlights:

2022 has been a good year for Pakistan Reinsurance Company Limited. The comparative financial highlights
for the years2022 and 2021 are presented as follows:

Rupees in million
(Except as otherwise stated)

2022 2021 %
Gross Premium Written 24,271.00 20,994.00 16%
Net Premium 7,929.00 7,226.00 10%
Net Claims (4,312.00) (3,778.00) 14%

Underwriting Profit 1,652.00 1,742.00 -5%

Investment Income 1,338.00 982.00 36%

Rental Income 127.00 104.00 22%
Other Income 419.00 142.00 195%
Profit after tax 2,625.00 2,589.00 1%

Earnings per share – Rs. 2.92 2.88 1%

During the year under review, gross premiums increased to Rs24,271 million from Rs. 20,994 million in
2021, an increase of Rs. 3,277 million i.e. 16%. Net premium increased to Rs. 7,929 million from Rs. 7,226 in
2021, an increase of Rs. 703 million i.e. 10%. Net claims increased to Rs. 4,312 million as compared to Rs.
3,778 million in 2021, an increase of Rs. 534 million, i.e. 14%. The Underwriting result declined by2% to Rs.
1,652 million as compared to Rs. 1,682 million in 2021.
Overall profit after tax increased from Rs. 2,589 million to Rs. 2,625 million, an increase of 1% from last
year. The profit after tax was 33% of the net premium as compared to 35% in 2021.

Treaty Business:

Treaty business constitutes 28% (2021: 2-%) of the Companies’ total business portfolio. Gross Premium
underwritten during the year was Rs. 6,887 million as compared to Rs. 4,013 million in 2021, an increase of
Rs. 2,874 million i.e. 50%. Net premium stood at Rs. 4,622 million as against Rs. 3,863 million in 2021. The
net claim to the net premium ratio for the year under review was 52% (2021: 61.68%) resulting in an
underwriting profit of Rs. 271 million as against an underwriting profit of Rs.1,151 million in 2021, a
decrease of 880 million.

Facultative Business:

Fire:
Fire facultative business constitutes 7.35% (2021: 9.83%) of the total premium portfolio. The gross
premium underwritten during the year was Rs. 1,779 million as compared to Rs. 2,066 million in 2021, a
decrease of Rs. 287 million i.e. 13.89%. Net premium stood at Rs. 1,671 million as against Rs. 1,666 million
in 2021. The net claim to the net premium ratio for the year under review was 147% (2021: 26.96%)
resulting in an underwriting loss of Rs. 1,345 million as against a profit of Rs. 814 million in 2021.

Marine Cargo & Hull:

Facultative business in this class constitutes 1.87% (2021: 1.4%) of the total premium portfolio. The gross
premium underwritten during the year was Rs. 451 million as compared to Rs. 306 million in 2021, an
increase of Rs. 145 million i.e. 47%. Net premium stood at Rs. 227 million as against Rs. 190 million in 2021.
The net claim to the net premium ratio for the year under review was -16% (2021: 93%) resulting in an
underwriting profit of Rs. 208 million as against Rs. 44 million in 2021, an increase of Rs. 164 million.

Aviation:
Facultative business in this class constitutes 19.79% (2021: 23.85%) of the total premium portfolio. The
gross premium underwritten during the year was Rs. 4,786 million as compared to Rs. 5,002 million in 2021,
a decrease of Rs. 216 million. Net premium stood at Rs. 274 million as against Rs. 351 million in 2021. The
net claim to the net premium ratio for the year under review was -18% (2021: 5.9%) resulting in an
underwriting profit of Rs. 380 million as against a profit of Rs. 316 million in 2021.

Accident:
Facultative business in this class constitutes 1.69%(2021: 0.87%) of the total premium portfolio. The gross
premium underwritten during the year was Rs. 408 million as compared to Rs.185 million in 2021, an
increase of Rs. 223 million i.e. 120%. Net premium increased to Rs. 216 million as against Rs. 182 million in
2021, an increase of Rs. 34 million. The net claim to the net premium ratio for the year under review was
-59% (2021: 8.01%) resulting in an underwriting profit of Rs.379 million as against an underwriting profit of
Rs.132 million in 2021.
Engineering:
Facultative business in this class constitutes 41.19% (2021: 39.34%) of the total premium portfolio. The
gross premium underwritten during the year was Rs. 9,960 million as compared to Rs. 8,261 million in 2021,
an increase of Rs. 1,699 million i.e. 20.5%. Net premium increase to Rs. 918 million as against Rs. 718
million in 2021, an increase of Rs. 200 million i.e. 2.4%. The net claim to the net premium ratio for the year
under review was 88% (2021: 41%) resulting in an underwriting loss of Rs. 213 million as against an
underwriting profit of Rs. 612 million in 2021.

Investment Income:
During the year under review, Investment Income contributed Rs. 1,338million as compared to Rs.982
million in 2021 (36% increase). Rental Income also increased from Rs. 104 million to 127 million (21%
increase)

Claims Settlement:
Timely settlement of claims and customer satisfaction are the company’s highest priority as it helps build
the trust of its valued clients and earns their goodwill. The overall net claim to net premium ratio during the
year was 54.37% as against 52.28% in 2021.

Cost Control Measures:

The Management expenses during the year under review were Rs. 1,528 million as against Rs. 729 million
during the previous year, registering an increase of Rs 799 million i.e. 109.66%.The management expenses
as a percentage of Net Premium was 19.28%in CY22 as compared to 10.07% in 2021. Going forward, the
management will continue to strive to contain costs as a percentage of net premiums.

Auditors’ Remarks

I. RECEIVABLE FROM SINDH REVENUE BOARD (SRB) AND RELATED LITIGATION

As stated in notes 15 and 37.2, receivable from SRB amounting to Rs. 2,573.89 million (2021: Rs. 2,573.89
million) which was recovered by SRB against the demand of sales tax liability on reinsurance services for the
tax year from 2011 to 2013.

The Company filed an appeal with the Commissioner of appeals SRB and the Appellate Tribunal where the
judgment was upheld in favor of SRB. Thereafter, the Company paid an amount of Rs. 2,131 million under
protest, and the remaining amount of Rs. 442 million was recovered by SRB through the encashment of
TDRs. The aggregate amount has been recorded as ‘Receivable from SRB’ as stated in note 15 of the
financial statements. As a result, the Company filed a reference in the Honorable High Court of Sindh
against the orders of the Appellant Tribunal.
Subsequent to year-end, on January 10, 2023, the hearing of the said case was held in the High Court of
Sindh, Karachi. The hearing was discharged due to the shortage of time till the next hearing dated May 19,
2023. The case is still pending before the Honorable High Court of Sindh and there have been no further
proceedings in the case. The details of the litigations have been disclosed in note 37.1 of the financial
statements.
The recording of the asset constitutes a departure from the application of the International Financial
Reporting Standard since presently the Company could not substantiate any control over the underlying
asset and the flow of economic benefits is improbable due to an ongoing Court case.

Management’s Comment:

Based on the legal opinion, the company is expecting a favorable decision from the Honourable Sindh High
Court, and the amount recovered by the company shall be refunded to the company. Accordingly, the
company has recorded the as Receivable from SRB

II. UNRECONCILED BALANCES

As stated in notes 16 and 32 to the financial statements, the amount due from other insurance companies
on account of the treaty and facultative business includes a gross amount of Rs. 16,792 million and a net
amount of Rs. 16,626 million, and an amount due to other insurance companies include an amount of Rs
40.11 million which remain unreconciled as of the reporting date. The Company is in the process of
reconciling these balances. Due to pending reconciliations relating to the above balances, resultant
adjustment and consequential impact thereon, if any, on these financial statements remain unascertained.

Management’s Comment:

The difference between PRCL and ceding insurance companies is because of unilateral adjustments of
claims by the ceding companies. PRCL has taken up the matter with SECP and SECP has directed all audit
firms to qualify accounts of all the companies whose accounts are not reconciled.

III. PROPORTIONAL TREATY – BUSINESS

As per Insurance Ordinance, 2000 and The Pakistan Insurance Corporation (Compulsory Surplus
Reinsurance) Regulations, 1978, the following are the requirements of Treaty- Business:
Ceding companies need to have proper records which shall have entries with dates and sufficient
particulars;
Ceding companies are required to provide full premium/claim bordereaux along with every quarterly
return;
Right to inspection by authorized personnel of the Company where they can inspect and obtain copies of
ceding companies’ records; and
The Company is entitled to call or examine the whole or part of any documents related to the risk and their
reinsurance.
However, except for the quarterly returns filed by ceding companies, there were no adequate supporting
records to verify the proportional treaty business. Consequently, we were unable to verify the underlying
transactions and corresponding balances. Furthermore, for claims outstanding for more than one year, we
were unable to determine whether any damages for delay in the processing of the claims are applicable to
the Company as the data pertaining to those claims was unavailable.
As disclosed in notes 16, 17, 18, 25, 26, 27, 38, 39, and 55 to the financial statements, certain account
balances and class of transactions have been recorded against treaty proportional business. We were
unable to obtain sufficient and appropriate audit evidence in respect of such account balances and class of
transactions because the Company does not obtain necessary documents from ceding companies for
record keeping and verification, but solely relies on the amounts mentioned in quarterly returns for the
purpose of recording transactions. Further, alternative procedures were not possible to obtain sufficient
and appropriate evidence. Consequently, we were unable to determine whether any adjustment to these
amounts were necessary.

Management’s Comment:

As prescribed under Section 43 of the Insurance Ordinance 2000, the company recorded the transaction
relating to premiums, claims, and commission on account of treaty business based on returns received
from ceding insurance companies and requires supporting documents from them whenever deemed
necessary. However, as pointed out by the auditors, further documents are being obtained from ceding
companies.

IV. INVESTMENT PROPERTY

As disclosed in note 11 to the financial statements, the Company carries its investment properties at fair
value. International Accounting Standard (IAS-40) “Investment Property requires an entity following fair
value model to reassess the fair values on a continuing basis. The management has not carried out any
exercise to determine the fair values and its resultant impact as of the reporting date. Accordingly,
resultant adjustment and consequential impact thereon, if any, on these financial statements remain
unascertained.
 Management’s Comment:

The company will engage evaluators for the evaluation of the property and evaluate before June 30, 2023,
and will include any financial impact in the half-yearly accounts of 2023.

V.MATERIAL UNCERTAINTY RELATING TO GOING CONCERN

As disclosed in notes 1.2 and 60 to the financial statements, as of the reporting date, the Company is in
breach of the minimum solvency requirement as prescribed under Section 36 of the Insurance Ordinance,
2000, and related rules. Such a breach indicates that a material uncertainty exists that may cast significant
doubt on the Company’s ability to continue as a going concern. Our opinion is not further modified in
respect of this matter.
We have emphasized this matter in our audit report.
Management’s Comment:

The management is undertaking a rigorous review of the outstanding claims which have rapidly increased
for the year ended December 31st, 2021 from Rs. 9,401,437,187/- to Rs. 21,256,435,233/- for the current
year. Since the majority of claims are based on preliminary loss assessment which is either being declined,
paid off, or adjusted against the outstanding receivables subsequently. Hence, it is anticipated that liability
for outstanding claims will significantly be reduced by June 30, 2023. Moreover, the SECP is in process of
issuing regulations to be finalized by June 2023 which among other matters also addresses the issue of long
outstanding receivables of PRCL from insurance companies. Once these regulations are in effect, the
recovery cycle would significantly improve and the majority of our old receivables would be recovered from
Insurance Companies and our Solvency position would significantly improve.
Due to the above reasons, we expect that we will be able to meet the solvency requirement as prescribed
by the Insurance Ordinance, 2000 by or before 30th June 2023.

Public Sector Business:

The Company acts as the re-insurer of National Insurance Company Limited. This includes some of the
prestigious accounts such as PIA, PARCO, PSO, OGDCL, PPL, PNSC, KSEW, Public Sector Power Projects, etc.
During the year under review, the company’s Gross revenues from Public Sector business grew from Rs.
13,847 Million to Rs.15,507 Million – an increase of 12%

Reinsurance Arrangements:
PRCL has an excess of loss reinsurance arrangements & relationships with some of the top global reinsurers
such as Hannover Re (rated AA- by S&P), Swiss Re(rated AA- by S&P), XL Re (rated AA- by S&P) and Lloyd’s
Syndicate (rated A+ by S&P), etc. The Company follows a policy of optimizing risk retention through a
carefully designed program of reinsurance. The reinsurance coverage of the company is based on the
Company’s exposures, accumulation & concentration of risk at the location.
E.C.O. Reinsurance Company:
The Articles of Agreement (AoA) of ECO Reinsurance Company were signed on February 10, 2010, by the
representatives of three Member States, the Islamic Republic of Pakistan, the Islamic Republic of Iran, and
the Republic of Turkey, at Islamabad (Pakistan). The AoA was further ratified by the Member States and the
last ratification was made by the Republic of Turkey on November 22, 2017.The objective of the Company
shall be to supplement the existing Reinsurance services, promote the growth of the underwriting &
retention capacities and support the economic development in the region.

The authorized capital of the Company shall be thirty million USD, divided into three thousand shares with
a par value of ten thousand US Dollars each, to be equally subscribed by the entities of three countries. Any
investment by PRCL in ECO Reinsurance Company shall be subject to the approval of the Board of Directors,
Shareholders / AGM, and Compliance with Section 199 of the Companies Act-2017.

Credit Rating:
The credit rating of the Company for the year 2022-23 was undertaken by M/s. JCR-VIS. The Company’s
credit rating of AA+ with a stable outlook. As per the standard rating scale & definition, the “AA+” rating
denotes a very low expectation of credit risk. It indicates a very strong capacity for timely payment of
financial commitments and no significant vulnerability to foreseeable events.

Profit after Tax:

The profit after tax of the Company is Rs.2,624 million as compared to Rs. 2,589 million last year, showing
an increase of Rs.35 millioni.e1%.

Appropriations:(Rs. in millions)

2022 2021

Profit before tax 3,556 3,614

Less: Tax (931) (1,025)

2,624 2,589
Profit after tax

Add: Unappropriated profit brought

forward 5,414 2,350

Add: Comprehensive Income (318) (168)

Less: Final cash dividend 2021 @ 20% (600) (750)

Less: Issuance of Bonus shares @200% (5,358)

Unappropriated profit carried forward 1,887 5,414

Proposed Dividend:

In view of the recommendation of the SECP and the decision of the Board of Directors to strengthen the
Financial Position thereby enabling the Company to improve its retention/capacity, the Board of Directors
has proposed the dividend for 2022 @ 7.5% for AGM as against 20% approved last year.

Window Retakaful:

This was the fourth year of operations of the Retakaful window. The comparative financial highlights for the
year 2022 and 2021 are presented as follows:

Revenue account 2022 2021

%
(Rupees) (Rupees)
Participants’ Retakaful fund
Net Contribution Revenue 979,125,622 690,414,885 41.82%
Wakala fee expense -215,856,211 - 156,471,404 37.95%
Net claims-IBNR -501,892,882 - 311,243,050 61.25%
261,376,529 222,700,431
Surplus before investment income 304,239,169 198,848,568 53.00%
Other income 72,908,632 10,080,104 623.29%
Investment income 8,316,060 4,560,461 82.35%
Modarib’s shares -20,306,173 - 3,660,141 454.79%
60,918,519 10,980,424 454.79%
- -
Surplus before taxation 356,384,563 212,679,007 67.57%
Taxation -10,760,328 - 2,027,758 430.65%
Surplus transfered to Accumulatd deficit 345,624,235 210,651,249 64.07%
Revenue Account
Operator’s fund
Wakala fee income 215,856,211 156,471,404 37.95%
47.07%
Commission expense -213,471,407 - 145,151,427

General , administartive and management exp

-15,746,091 - 7,937,109 98.39%
Ceded money paid to participant’s Retakaful fund
- -
- 13,361,287 3,382,868 -494.97%

Modarib’s share of participants’ Retakaful fund investment-20,306,173 3,660,141 -654.79%

Investment income 1,687,509 920,194 83.39%
Other income 34,143,170 14,518,979 135.16%
15,524,506 19,099,314 -18.72%
Profit before taxation 42,775,565 22,482,182 90.26%
Taxation -12,404,914 - 6,519,833 90.26%
Profit after Taxation 30,370,651 15,962,349 90.26%
During the year under review, gross contribution increased to Rs. 1,205 million from Rs. 933 million in 2021,
an increase of Rs. 272 i.e. 30%. Net contribution increased to Rs. 979 million from Rs. 690 million in 2021,
an increase of Rs. 289 million i.e. 41%. Net claims increased to Rs. 502 million as compared to Rs. 311
million in 2021, an increase of Rs. 191 million, i.e. 61.4%. The Underwriting surplus increased by 52.7% to
Rs. 304 million as compared to Rs. 199 million in 2021.

Treaty Business:
Proportional Treaty:
Treaty business constitutes 82% (2021: 79%) of the total business portfolio. Gross Contribution
underwritten during the year was Rs. 987 million as compared to Rs. 736 million in 2021, an increase of Rs.
251 million i.e. 34.10%. Net contribution stood at Rs. 868 million as against Rs. 623 million in 2021,an
increase of Rs. 226 million i.e. 37.88%. The net claim to net contribution ratio for the year under review was
71.9% (2021: 48%) resulting in an underwriting surplus of Rs. 70 million as against an underwriting surplus
of Rs. 196 million in 2021, a decrease of 126 million i.e. 64.28%.

Non-Proportional Treaty:
Treaty business constitutes 8% (2020: 11%) of the total business portfolio. Gross Contribution underwritten
during the year was Rs. 99 million as compared to Rs. 99 million in 2021, an increase of Rs. 0 million i.e.
0.5%. Net contribution stood at Rs. -3 million as against Rs. 22 million in 2021, a decrease of Rs. -25 million
i.e. -114%. The net claim to net contribution ratio for the year under review was 52% (2021: 14%) resulting
in an underwriting surplus of Rs. 133 million as against an underwriting loss of Rs. 61 million in 2021, an
increase of 194 million.

Facultative Business:

Fire:
Fire facultative business constitutes 8.87% (202: 9.04%) of the total business portfolio. Gross Contribution
underwritten during the year was Rs. 107 million as compared to Rs. 84 million in 2021, an increase of Rs.
23 million i.e. 26%. Net contribution stood at Rs. 102 million as against Rs. 73 million in 2021, an increase of
Rs. 29 million i.e. 39%. The net claim to net contribution ratio for the year under review was 32.15% ( 2021:
6.89%) resulting in an underwriting surplus of Rs. 49 million as against an underwriting surplus of Rs. 53
million in 2021, a decrease of 4 million i.e. 7.54%.

Marine Cargo & Hull:

Facultative business in this class constitutes 0.13% (2020: 0.50%) of the total business portfolio. Gross
Contribution underwritten during the year was Rs. 1.5 million as compared to Rs. 4.6 million in 2021, a
decrease of Rs. 3.1 million i.e. 67%. Net contribution stood at Rs. 1.45 million as against Rs. 5 million in
2021, a decrease of Rs. 3.55 million i.e. 71%. The net claim to net contribution ratio for the year under
review was 0.62% ( 2021: 0%) resulting in an underwriting surplus of Rs. 1.1million as against an
underwriting surplus of Rs. 3.7 million in 2021, a decrease of 2.6 million i.e. 70.27%.

Accident:
Facultative business in this class constitutes 0.85% (2021: 1.03%) of the total business portfolio. Gross
Contribution underwritten during the year was Rs. 10.2 million as compared to Rs. 9.6 million in 2021, an
increase of Rs. 0.6 million i.e. 6.25%. Net contribution stood at Rs. 10.2 million as against Rs. 11.7 million in
2021, a decrease of Rs. 1.5 million i.e. 12.8%. Underwriting surplus was Rs. 8 million as against Rs. 7 million
in 2021, an increase of 1 million i.e. 14.28%.

Employees’ Welfare:

The Company has in place a fund to provide welfare facilities to its employees whereby six employees are
sent for Hajj every year. Besides, the Company grants (a) cash awards to the Employees’ Children who are
Hafiz–e-Quran and secure A+ grades in Secondary and Higher Education, (b) pensions to the retiring
employees having a long association with the company, and (c) burial & compensation packages for a
family of employees who die during service.

Board Structure and Committees:

The Board structure is in accordance with the Listed Companies (Code of Corporate Governance),
Regulations 2019, Public Sector Companies (Code of Corporate Governance) Rules, 2013, and Code of
Corporate Governance for Insurers, 2016, issued by the Securities and Exchange Commission of Pakistan.

To ensure the effective implementation of sound internal control systems and compliance with the Code of
Corporate Governance, the Board has constituted various Committees which are seven (07) in number. This
includes four Board Committees and three Management Committees. The composition of all Committees is
separately shown in the report under the section of Corporate Information.

Future Outlook:

The country’s business environment continues to be challenging. The macroeconomic environment, higher
inflation & multiple rounds of currency devaluation has made business conditions even more demanding.
Despite, the challenges, Company’s business strategy will continue to focus on providing prompt service to
insurance companies, particularly regarding facultative offers. PRCL with a strengthened balance sheet and
enhanced equity structure will continue to concentrate on the quality treaty and facultative business and
profitable treaty cession by gradually increasing its retention capacity and adopting of risk management
measures. The company remains committed to enhancing shareholder value and is focused on enhancing
its shares in both treaty and facultative business.
Re-takaful operations have started contributing to the profitability of the company and are expected to
grow with the passage of time. The fixed income portfolio is well set to take benefits from record high
returns on fixed income instruments, and the fixed income portfolio of the Company shall bring higher.
Overall the company maintains an optimistic outlook on its business performance going forward.

To achieve the company’s short and long-term objectives, its business strategy will continue to focus on
providing prompt service to insurance companies, particularly regarding facultative offers. PRCL with a
strengthened balance sheet and enhanced equity structure will continue to concentrate on the quality
treaty and facultative business and profitable treaty cession by gradually increasing its retention capacity
and adoption of risk management measures.

Internal Controls:

The internal control framework has been effectively implemented through an in-house Internal Audit
function established by the Board which is independent of the External Audit Function. The Internal Audit
function has carried out its duties under the charter defined by the Audit Committee. The Audit Committee
has reviewed Internal Audit reports taking appropriate action where necessary. Coordination between the
External and Internal Auditors was facilitated to ensure efficiency and contribution to the Company’s
objectives, including a reliable financial reporting system and compliance with the laws and regulations.

Risk Management Policy:

The company has an appropriate framework of methods, systems, and processes to manage risks and seize
opportunities related to the achievement of business objectives. The Company’s Risk Management
approach comprises quantitative & qualitative evaluation of risk and minimizing its hazards. An elaborate
risk management policy has been approved by the Board which is subject to its review from time to time.
The risk mitigation process and measures have been formulated and spelled out in the said guidelines.

Code of Conduct:

The Company has designed a code of conduct to ensure ethical conduct & integrity by all employees. All the
operations of the company are undertaken in a fair and transparent manner strictly following the code of
conduct.

Directors’ Training Program:

All the directors of the company are certified directors under the Directors Training program.
Directors’ Remuneration Policy:

The remuneration of directors is approved by the Shareholders at the Annual General Meeting on the
recommendation of Board of Directors.

Performance Evaluation of the Board of Directors:

Pursuant to Rule 8 (1) of the Public Sector Corporate Governance, Rules 2013 & the policy approved by the
Board, the Performance Evaluation for the current year of the CEO & the rest of the Directors of the Board
has been undertaken independently by the Chairman of the Board. The evaluation framework comprises of
qualitative assessment of individual Board members.

Related Party Transactions:

At each board meeting, the Board of Directors approves the Company’s transactions with Associated
Companies / Related Parties. All the transactions executed with related parties are on an arm’s length basis.

Ownership:

As of December 31, 2022, there were 4,361 shareholders on the record of the Company.

The Pattern of Shareholding:

The pattern of shareholding of the company as at December 31, 2022, along with the necessary
information is available at the end of this report.

Statement on Corporate and Financial Reporting Framework:

PRCL being a Listed Company adheres to the Listed Companies (Code of Corporate Governance), 2020 and
all other listing regulations. The Company is also public sector enterprise and operates under the
framework of Public Sector Companies (Code of Corporate Governance Rules), 2013 and Code of Corporate
Governance for Insurers, 2016. The Directors confirm compliance with all reporting and disclosure
requirements as envisaged in the Companies Act, 2017, Insurance Ordinance 2000, and Rules, made there
under. The Directors confirm compliance with the corporate and Financial Reporting Framework of the
SECP Code of Corporate Governance for the following: -

a) The financial statements, prepared by the management of the company, present fairly, its state of
affairs, the result of its operations, cash flows and changes in equity;
b) The Company has maintained proper books of accounts;

c) The Company has followed consistently appropriate accounting policies in preparation of the
financial statements, changes have been adequately disclosed and accounting estimates are made
on the basis of prudent and reasonable judgement;
d) Financial statements have been prepared by the company in accordance with the International
Accounting Standards, as applicable in Pakistan, requirements of Companies Act, 2017, Insurance
Ordinance, 2000, and the Securities and Exchange Commission (Insurance) Rules, 2017;

e) The system of internal control is in place and internal audit department is in complete function;
f) There are no doubts upon the Company’s ability to continue as a going concern;
g) There is no material departure from the best practices of Listed Companies (Code of Corporate
Governance), 2020, as laid down in the listing regulations and Public Sector Companies (Code of
Corporate Governance) Rules, 2013, and Code of Corporate Governance for Insurers, 2016;
h) The directors are qualified under directors Training Programme;
i) Presentation was given to newly appointed Directors to acquaint them with the relevant laws and
their responsibilities;
j) The Company has 8.34%shareholding of National Investment Trust Limited (NITL) and as such has
its representation on the Board of NITL by one of its Directors. Currently the CEO of PRCL is
representing the Company on NITL Board.
k) The appointment of the Chairman and other members of the Board and the terms of their
appointment along with the remuneration policy are adopted in the best interests of the Company
as well as in line with the best practices;
l) The Non-executive Directors do not have fixed remuneration and are being paid a fixed fee for each
meeting attended. Disclosure on remuneration of Chief Executives, Directors and Executives as
applicable is separately shown in the report;
m) Summarised key operating and financial data of the last 6 years is separately shown in the report;
n) The statement of pattern of shareholding is separately shown in the report;
o) The value of investment in pension, gratuity and provident fund is also disclosed as under:

2022 2021

(Rs. in millions)

Pension and Gratuity Fund 1107 1079

General Provident Fund / Provident Fund 147 133

Board Meetings and Attendance:

In the year 2022, the Board formed various Committees, the detail of the meetings held and the
attendance of each director is given hereunder:-

Procurement Committee
Reinsurance Committee

Investment Committee
Compliance & Legal
Risk Management,
Board of Directors

&Remuneration /

Claim Settlement
Audit Committee

Underwriting /

Committee

Procurement
Committee

Committee

Committee
Ethics, HR
No. of Meetings 9 5 8 3 4 3 3 3

Sl. Name Of Directors Attended Attended Attended Attended Attended Attended Attended Attended

Mr. Mumtaz Ali

1 Rajper, Chairman 9 --- 8 --- 4 2 3 3

Board
2 Mr.Musleh-ud-Din, 9 5 8 --- --- 1 3 ---
Board Member
3 Mr.Shoaib Mir, 3 --- --- --- 1 --- 1 ---
Board Member
4 Dr.Kausar Ali Zaidi, 9 5 8 3 --- 3 --- 3
Board Member
Mr.Muhammad
5 9 5 --- --- --- 3 3 ---
Rashid, Board
Member
Ms. Zara Shaheen
6 9 --- 8 --- --- 3 --- 3
Awan, Board
Member
Mr.
7 FarmanullahZarkoo 8 --- 7 3 4 3 3 3

n, CEO / Director

Leave of absence was granted by Board to the Directors who could not attend some of the meetings after
intimating the Board in advance.

Change in the Board of Directors:

The Board welcomed every Non-executive / Nominee / Ex-officio Directors, who joined it and it also
recorded appreciation of the services and contribution of all those Directors who were
transferred/separated during the period under review.

Contribution to National Exchequer:

During the year, your Company contributed an amount of Rs.1,226 million (2021: Rs.272 million) into the
government treasury on account of Taxes, Levies, and other duties.
Compliance with the Code of Corporate Governance:

The requirements of the Code of Corporate Governance set out by the regulatory authorities have been duly
complied with.

Audit Committee of the Board:

The Board, in compliance with the Code of Corporate Governance, has constituted an Audit Committee and
its terms of reference have been approved by the Board. The names of the members of the Committee are
given in the section of Corporate Information.

Performance of the Company during the last six years

(Rs. in millions)

2022 2021 2020 2019 2018 2017

Gross Premium 24,271 20,994 16,896 17,655 10,734 8,036

Net Premium 7,929 7,226 6,709 6,905 5,464 5,006

Net Commission (1,026) (968) (925) (1,243) (1,047) (1,148)

Net Claims (4,312) (3,778) (3,924) (4,259) (2,990) (3,740)

Management Expenses (1,529( 729 (666) (775) (844) (796)

Underwriting Profit/(Loss) 1,401 1,742 765 628 583 (677)

Investment Income 1,338 982 1,043 868 691 3,326

Profit before Tax 3,556 3,614 1,941 2,189 1,730 2,876

Profit after Tax 2,624 2,589 1,392 1,484 1,228 2,226

Trading in the Company Shares:

Trading in the shares of the Company was not done by any of the Directors and by the Key Officers.

Appointment of Auditors:

Financial Statements for the year 2022 have been audited by BDO Chartered Accountants. The present
auditors have given their consent to continue as Auditors for the year 2023. The Board of Directors on the
recommendation of the Audit Committee has proposed the appointment of Messrs BDO Chartered
Accountants as statutory auditors for the next term of the year 2023.

Acknowledgment:

The Company would like to thank its shareholders for the confidence they have shown in us. We express
our sincere thanks to all insurance companies, strategic partners, vendors, the Securities and Exchange
Commission of Pakistan, and the State Bank of Pakistan for their support and guidance. We also
acknowledge the hard work and dedication of the officers and staff of the Company.

For and on behalf

of the Board of Directors

CHIEF EXECUTIVE OFFICER CHAIRMAN BOARD OF DIREC TORS

 ‫اننیمظیکروپرٹ‬

‫ربائ صصحدننکاگن‬

‫رتحممصصحدننکاگن‬

‫وبرڈےکاننیمظیکاجبنےس‪31‬دربمس‪2022‬وکااتتخمذپریاسلرپ‪،‬اننیمظیکروپرٹعمببستحمدشہامایلیتداتسوزیاتاوراحمنیبس(’‪)Auditors‬یک‬
‫روپرٹشیپرکےتوہئمہوخیشوسحمسرکےتںیہ۔‬

‫عمیشاجئہ‬

‫امیلاسل‪2022‬اکریغومعمیل ومناکرمہلحسجںیمعمیشرتیق‪6‬دصیفےکااضےفےسرتیقرکریہیھت‪،‬اسےکربالخفامیلاسل‪2023‬اکآاغزدبرتنیالیسب‬
‫ےسوہاسجےن‪30‬اربارمیکیڈارلےسزایدہاکاصقنناچنہپای؛وموجدہاسلںیموتعقےہہکاپاتسکنیکتشیعم‪2‬دصیفےسمکیکرشحےسرتیقرکےیگ۔‬
‫ل‬
‫وکحتمیکدبتیلیاورایسیسریغینیقیےکببس تشیعموکسپتشپڈالدایایگےہسجاکہجیتن وکحتمےکےیلریثکا جحتالکشمتیکوصرتںیمالکن۔‬

‫امیلاسل‪2023‬ےکےلہپفصنںیماصریفیکوتمیقںےکاڈنسکی(‪)CPI‬یکارفاطزریکرشح‪25.02‬دصیفریہہکبجاسےکاقمےلبںیمامیلاسل‪2022‬ےک‬
‫ےلہپفصنںیمہیرشح‪9.81‬دصیفیھت۔ وتعقےہہکامیلاسل‪2023‬یکہیقبدمتںیمارفاطزردنلبرےہاگویکہکنالصدابؤوتاانیئیکوتمیقںںیمااضہف‪،‬ڈارلےک‬
‫اقمےلبںیمزمکوررترکیسن اورذغایئاایشءیکوتمیقںںیماجریااضہفںیہ۔‬

‫بی‬
‫ارفاطزرےکدتارکےکوطررپکنیبدوتلاپاتسکنےنامایلیتاپیسیلںیمیتخساجریریھکاوریگشیپامایلیتاپیسیلےکاالجسںیماپیسیلرنخںیم‪ 300‬سس‬
‫وپاسٹنئ اکااضہفرکےکرشح‪21‬دصیفرکدی‪،‬اسرطحےس‪12‬امہںیملکااضہف‪10.25‬دصیفاکوہایگ۔‬

‫‪3‬رفوری‪2023‬کت‪،‬اپاتسکنےکریغیکلمزرابمدہلےکذاخرئوناسولںیکمکرتنیحطسرپ ٹھگرک‪2.9‬اربارمیکیڈارلسجیکوہجنیباالوقلایمامایلیتڈنفےک‬
‫اجئےںیماتریخےہ۔درگیریبوینامایلیتذراعئیھب نیباالوقلایمامایلیتڈنفےکوبرڈیکوظنمریےسکلسنمںیہ۔دعتمدیگشیپاکرواویئںیکلیمکت‪،‬ومشبلااضیف‬
‫وصحمالتےکادقاامتاوررٹیپول‪،‬سیگاوروییٹیلیٹیکوتمیقںںیمااضےفےسااکمنےہہکمہ ااٹسفیکحطسےکعمدہےےکرقبیچنہپاجںیئےگ۔‬

‫اپکروہیپدشدیدابؤںیمراہاوراکیاسلںیم اسیکدقرںیم‪60‬دصیفیکیمکوہیئ۔بجکتااٹسفیکحطساکعمدہہالباتریخےکنیباالوقایمامایلیتڈنفےکاسھت‬
‫ںیہنوہاجات‪،‬اپکروہیپریغمکحتسماورزمکوررےہاگ۔‬

‫امیلاسلےکےلہپفصنںیمرپارمئیرسسلپ(‪)primary surplus‬دوونںیمتحاوردصیفیکدمںیماخہصااضہفوہا؛اسےنمجمیعوقیمدیپاواراک ‪1.1‬دصیف‬

‫داھکایہکبجامیلاسل‪2022‬ےکفصنںیمہیمجمیعوقیمدیپاواراک‪0.1‬دصیفاھت۔ امیلاسل‪2023‬ےکفصنںیموصحمالتیکووصیلںیماسلہباسلیکاینبدرپ‪17‬‬
‫دصیفاکااضہفوہااوراسااضےفاکرحمک‪50‬دصیفرباہراتسوصحمالتںیمااضہفراہ۔اتمہ‪،‬وموجدہارخااجتںیم‪30‬دصیفااضہفوہاسجیکوہجالیسباور‬
‫امرکاپ(‪ )mark-up‬اداویگیئںںیم‪77‬دصیفااضہف اھت۔ امیلاسل‪2022‬ےکفصنےکااصتقدیاسخرےےکاقمےلبںیمامیلاسل‪2023‬ےکفصنںیم‬
‫ااصتقدیاسخرےںیم‪23‬دصیفااضےفےکادنراجےسہیاسخرہڑبھرک‪ 1.7‬رھکبروےپوہایگاسےکابووجدہیاسخرہمجمیعوقیمدیپاواراک‪2‬دصیفراہ۔‬

‫امتمالکشمتےکابووجدسجںیمومشبلدنلبارفاطزر‪،‬زمکوراپکروہیپاوردنلبرقوضںاکوبھجاشلمںیہ‪،‬ںیمہادیمےہ ہکامیلاسل‪2023‬ےکدورسےفصن‬
‫ںیمتشیعممکحتسموہیگاوراحبیلیکراہرپلچڑپےیگ۔‬

‫ینپمکیکاکررکدیگیکیکھجں‬

‫‪Page 1 of 17‬‬
 ‫اسل‪2022‬اپاتسکنریاوشنرسنینپمکڈٹیملےکےیلااھچراہ۔اسل‪2022‬اور‪2021‬یکامایلیتویکلھجںاکاقتیلباجئہدرجذلیےہ؛‬

‫روےپنیلمںیم‬

‫(وسائوصبرتدرگیایبنرکدہ)‬

‫دصیفدبتیلی‬ ‫‪2021‬‬ ‫‪2022‬‬

‫‪16%‬‬ ‫‪20,994‬‬ ‫‪24,271.00‬‬ ‫مجمیعرپیمی‬

‫‪10%‬‬ ‫‪7,226.00‬‬ ‫‪7,929.00‬‬ ‫اخصلرپیمی‬

‫‪14%‬‬ ‫)‪(3,778.00‬‬ ‫(‪)4,312.00‬‬ ‫اخصلدوعے‬

‫‪-5%‬‬ ‫‪1,742.00‬‬ ‫‪1,652.00‬‬ ‫امضیتنہمیب)‪(underwriting‬اکانمف‬

‫‪36%‬‬ ‫‪982.00‬‬ ‫‪1,338.00‬‬ ‫رسامہیاکریےسآدمین‬

‫‪22%‬‬ ‫‪104.00‬‬ ‫‪127.00‬‬ ‫رکاہیدارییکآدمین‬

‫‪195%‬‬ ‫‪142.00‬‬ ‫‪419%‬‬ ‫درگیآدمین‬

‫‪1%‬‬ ‫‪2,589.00‬‬ ‫‪2,624.00‬‬ ‫انمفدعبازوصحمل‬

‫‪-66%‬‬ ‫‪8.63‬‬ ‫‪2.88‬‬ ‫آدمینیفصصح ‪-‬روےپ‬

‫زریوغراجئہاسل ےکدورانمجمیعرپیمیڑبھرک ‪24,271‬نیلمروےپوہایگہکبجاسل‪2021‬ںیماسیکامتیل‪20,994‬نیلمروےپاھت‪،‬اسرطحےسااضہف‬

‫‪3,277‬نیلمروےپینعی‪16‬دصیف۔اخصلرپیمیڑبھرک ‪7,929‬نیلمروےپوہایگہکبجاسل‪2021‬ںیماسیکامتیل ‪7,226‬نیلمروےپیھت‪،‬اسرطحےس‬
‫ااضہف‪703‬نیلمروےپینعی‪10‬دصیف۔اخصلدوعےڑبھ وہرک ‪4,312‬نیلمروےپوہےئگہکبجاسل‪2021‬ںیماسیکامتیل ‪3,778‬نیلمروےپاھت‪،‬اسرطح‬
‫ےسااضہف‪534‬نیلمروےپینعی‪14‬دصیف۔امضیتنہمیب(‪)Underwriting‬ےکہجیتنںیم ‪ 2‬دصیفیمکےکاسھت‪1,652‬نیلمروےپوہایگہکبجاسےکاقمےلبںیم‬
‫اسل‪2021‬ںیم ‪1,682‬نیلماھت۔‬

‫لکوطررپانمفدعبازوصحمل‪ 2,589‬نیلمروےپےکاقمےلبںیم ‪ 2,824‬نیلمروےپےہوجذگہتشاسلےکاقمےلبںیم‪1‬دصیفےہ۔اخصلرپیمیرپانمفدعب‬

‫ازوصحمل ‪33‬دصیفاسےکاقمےلبںیم‪2021‬ںیم‪35‬دصیفاھت۔‬

‫‪Page 2 of 17‬‬
 ‫عمدہایت(‪)Treaty‬اکروابر‬

‫ینپمکےکلکاکروابرےکوپرٹوفویلںیم انتمبسعمدہایت(‪)Treaty‬اکروابراک‪28‬دصیف(‪2:2021‬دصیف)ہصحراہ۔اسل‪2021‬ےکدوران رحتریدشہمجمیع‬

‫رپیمی ےک ‪4,013‬نیلمروےپےکےکاقمےلبںیماساسل ‪6,887‬نیلمروےپراہ‪،‬ااضہف‪2,874‬نیلمروےپینعی‪50‬دصیف۔اخصلرپیمیاسل‪2021‬ےک‬
‫‪3,863‬نیلمروےپےکاقمےلبںیمرواںاسل ‪4,622‬نیلمروےپراہ۔زریاجئہاسلاکاخصلدوعےےساخصلرپیمیاکانتبس‪52‬دصیفاھت(‪:2021‬‬
‫‪61.68‬دصیف)سجاکہجیتناسل‪2021‬ےک‪1,151‬نیلمروےپےکامضیتنہمیب(‪)underwriting‬انمفےکاقمےلبںیمرواںاسلاسیکامتیلںیمااضےف‬
‫ےکاسھت‪ 271‬نیلمروےپریہ‪،‬یمک‪880‬نیلمروےپ۔‬

‫اایتخریاکروابر‪:‬‬

‫آگ‪:‬‬

‫اایتخریاکروابرےکےلسلسںیم‪،‬آگےکاکروابریکمسقاکلکرپیمیوپرٹوفویلںیم ‪7.35‬دصیف(‪9.83:2021‬دصیف)ہصحےہ۔اسلےکدورانمجمیعرپیمیوج‬
‫رحتریایکایگ ‪1,779‬نیلمروےپاھتاسےکاقمےلبںیم‪2021‬ںیم‪2,066‬نیلمروےپ‪،‬ااضہف‪287‬نیلمروےپینعی ‪13.89‬دصیف۔اخصلرپیمیاسل‪2021‬‬
‫ےک‪1,666‬نیلمروےپےکاقمےلبںیم ‪1,671‬نیلمروےپاھت۔زریوغراسلےکےیلاخصلدوعےےساخصلرپیمیاکانتبس‪147‬دصیف(‪:2021‬‬
‫‪26.96‬دصیف)اھتسجاکہجیتناڈنرراگنٹیئاکاصقنن‪1,345‬نیلمروےپاھتاسےکاقمےلبںیم‪2021‬ںیم‪814‬نیلمروےپاکانمفاھت۔‬

‫رحبیرتلیسابرربداری(‪)Marine Cargo‬اوراہجزاکڈاھہچن(‪:)Hull‬‬

‫اایتخریاکروابرےکدرگیےلسلسںیمرحبیرتلیسابرربداریاوراہجزےکڈاھےچنیکمسقےکاکروابراکلکرپیمیوپرٹوفویلںیم ‪1.87‬دصیف(‪1.4:2021‬دصیف)‬
‫اھت۔اسل‪2022‬ےکدورنرحتریرکدہمجمیعرپیمی‪451‬نیلمروےپاوراسےکاقمےلبںیماسل‪2021‬ںیم‪306‬نیلمروےپاھت‪،‬ااضہف‪145‬نیلمروےپینعی‬
‫‪47‬دصیف۔اخصلرپمیم‪277‬نیلمروےپراہاسےکاقمےلبںیماسل‪2021‬ںیم‪190‬نیلمروےپاھت۔زریوغراسلےکےیلاخصلدوعےےساخصلرپیمیاک‬
‫انتبس‪16-‬دصیف(‪93:2021‬دصیف)اھتسجاکہجیتناڈنرراگنٹیئاکانمف‪208‬نیلمروےپاھتوجاسل‪2021‬ںیم‪44‬نیلمروےپاھت‪،‬ااضہف‪164‬نیلمروےپ۔‬

‫وہاابزی(‪:)Aviation‬‬

‫اایتخریاکروابرےکدرگیےلسلسںیموہاابزییکمسقےکاکروابراکلکرپیمیوپرٹوفویلںیم‪19.79‬دصیف(‪23.85:2021‬دصیف)راہ۔اسلےکدورانمجمیع‬
‫رپیمیوجرحتریایکایگ‪4,786‬نیلمروےپاھتاسےکاقمےلبںیم‪2021‬ںیم‪5,002‬نیلمروےپاھت‪،‬یمک‪216‬نیلمروےپریہ۔اخصلرپمیم‪274‬نیلمروےپراہ‬
‫اسےکاقمےلبںیماسل‪2021‬ںیم‪351‬نیلمروےپاھت۔زریوغراسلےکےیلاخصلدوعےےساخصلرپیمیاکانتبس‪18-‬دصیف(‪5.9:2021‬دصیف)اھت‬
‫سجاکہجیتناڈنرراگنٹیئاکانمف‪380‬نیلمروےپراہہکبجاسل‪2021‬ںیم‪316‬نیلمروےپاکانمف اھت۔‬

‫احداثت‬

‫اایتخریاکروابرےکدرگیےلسلسںیم۔احداثتاورتحصیکمسقےکاکروابراکلکرپیمیوپرٹوفویلںیم‪1.69‬دصیف(‪0.87:2021‬دصیف)ہصحراہ۔اسلےک‬
‫دورانمجمیعرپیمیوجرحتریایکایگ ‪408‬نیلمروےپاھتاسےکاقمےلبںیم‪2021‬ںیم‪ 185‬نیلمروےپراہ‪ ،‬ااضہف‪223‬نیلمروےپینعی‪120‬دصیف۔اخصل‬
‫رپیمیاسل‪2021‬ےک‪182‬نیلمروےپےکاقمےلبںیم‪216‬نیلمراہااضہف ‪34‬نیلمروےپریہ۔زریوغراسلےکےیلاخصلدوعےےساخصلرپیمیاک‬
‫انتبس ‪-59‬دصیف(‪8.01:2021‬دصیف)اھتسجاکہجیتناڈنرراگنٹیئاکانمف‪379‬نیلمروےپراہوجاسل‪2021‬ںیم‪132‬نیلمروےپاھت۔‬

‫‪Page 3 of 17‬‬
 ‫ارئنیجنگن‬

‫اایتخریاکروابرےکدرگیےلسلسںیمارئنیجنگنیکمسقےکاکروابراکلکرپیمیوپرٹوفویل ںیم‪41.19‬دصیف(‪39.34:2021‬دصیف)ہصحےہ۔زریوغراسلےک‬
‫دورانمجمیعرپیمیوجرحتریایکایگ ‪ 9,960‬نیلمروےپاھتاسےکاقمےلبںیم‪2021‬ںیم ‪ 8,261‬نیلمروےپاھت‪،‬ااضہف ‪1,699‬نیلمروےپینعی‪20.5‬دصیف‬
‫۔اخصلرپیمیاسل‪2021‬ےک‪718‬نیلمروےپےکاقمےلبںیمڑبھرک‪ 918‬نیلموہایگ‪،‬ااضہف‪200‬نیلمروےپینعی‪2.4‬دصیف۔زریوغراسلےکےیلاخصل‬
‫دوعےےساخصلرپیمیاکانتبس‪88‬دصیف(‪41:2021‬دصیف)اھتسجاکہجیتناڈنرراگنٹیئاکانمف‪213‬نیلمروےپراہوجاسل‪2021‬ںیم‪612‬نیلمروےپاھت۔‬

‫رسامہیاکریےسآدمن‬

‫اگوکہںےکدوعںاکربوتقہیفصتاوراناکاانیمطنینپمکیکاونیلرتحیجےہوجینپمکےکاقلبدقراگوکہںاکاامتعدڑباھاتےہاورڈگول(‪)goodwill‬احلصرکات‬
‫ےہ۔اسلےکدورانمجمیعاخصلدوعںاکاخصلرپیمیاکانتبس ‪54.37‬دصیفراہاسےکاقمےلبںیم‪2021‬ںیمہی‪52.28‬دصیفاھت۔‬

‫دوعںاکہیفصت‬

‫دوعںاکربوتقہیفصتاوراگوکہںاکاانیمطن‪،‬ینپمکیکتہبزایدہرتاحیجتںیماشلمےہ ویکہکناقلبدقراگوکہںےکاابتعراورڈگول(‪)goodwill‬انبےنںیمدمد‬
‫رکیتںیہ۔زریوغردمتںیممجمیعاخصلدوعےےساخصلرپیمیاکانتبس ‪54.37‬دصیفریہہکبجاسےکاقمےلبںیم‪2021‬ںیم‪52.28‬دصیفیھت۔‬

‫التگںیمیمکےکادقاامت‬

‫زریاجئہاسلےکدوران ااظتنیمارخااجت‪1,087‬نیلمروےپہکبجذگہتشاسلےکدوران ‪981‬نیلمروےپےھت‪،‬سجےس‪359‬نیلمروےپااضےفاکادنراج‬

‫ایکینعی‪36.5‬دصیف۔اسل‪2022‬ںیمااظتنیمارخااجت‪،‬اخصلرپیمیےکاقمےلبںیم‪13.84‬دصیفرےہوج‪2021‬ںیم‪10.07‬دصیفاھت۔آےنواےلدونںںیم‬
‫ااظتنہیمیکوکششوہیگہکاخصلرپیمی ںیمالوتگںیکدصیفوکمکرکےنیکوکششرکےترںیہ۔‬

‫احمنیبس(‪)Auditors‬اکرصبتہ‬

‫دنسھرویوینیوبرڈیکاجبنےسلبقووصیلوابجتاورقلعتمدقممابزی‬ ‫‪.I‬‬

‫اسیجہکامایلیتداتسوزیاتےکونٹ‪15‬اور‪37.2‬ںیماظہایکایگےہوجدنسھوبرڈآفرویوینی(‪ )SRB‬ےسووصایلبیکامتیل‪2021(2,573.89‬‬
‫‪) 2,573.89:‬نیلمروےپوج‪ SRB‬ےنریاوشنرسنیکدخامترپامیلاسل‪2011‬ےس‪2013‬ںیموطبرزلیسسکیٹ یکامیلذمداریےکووصلایک‬
‫ےہ۔‬

‫ینپمکےندنسھوبرڈآفرویونیےک رنشمکالیپاوراپیلنترٹیولنےک اپساسےکالخفالیپیکدروخاتسدییھتاہجںہلصیفدنسھوبرڈآف‬

‫رویونیےکقحںیمآایاھت۔اسےیلینپمکےن ااجتحجرکےتوہئ‪2,131‬نیلمروےپیکادایگیئیکاورابیق‪442‬نیلمروےپیکرمق وک‪ TDRs‬شیک‬
‫رکوارکاحلصیک۔لکرمقاکوطبر"دنسھوبرڈآفرویونی ےساقلبووصیل"ےکوطررپامایلیتداتسوزیاتےکونٹ‪15‬ںیمایبنایکایگےہ۔‬

‫اسےکےجیتنںیم‪،‬ینپمکےناپیلنترٹیولنےکےلصیفےکالخفدعاتلاعہیل‪،‬دنسھںیماکیررفیسن دالخایکےہ۔‬

‫‪Page 4 of 17‬‬
 ‫اسلےکااتتخمےکدعب‪،‬ذموکرہسیکیک‪10‬ونجری‪2023‬وکدنسھاہیئوکرٹںیماکروایئوہیئ۔سیکیکاکروایئوکوتقیکتلقےکببس‪19‬یئم‬
‫‪2023‬کتوتلمیرکدییئگےہ۔سیکایھبکتزعمزدعاتلاعہیل‪،‬دنسھںیمزریاوتلاےہاورواہںاسسیکرپوکیئشیپرتفںیہنےہ۔ اسسیک‬
‫یکالیصفتتونٹ ‪37.1‬ںیمایبنیکاجیکچںیہ۔‬

‫ااثہثاجتاکادنراج ارٹنلنشینانفلشنروپرگنٹاسڈرڈزےسارحنافےہ‪،‬ویکہکنینپمکانااثہثاجتکترپیسکیھبمسقاکرٹنکولاثتبہنرکیکس‬
‫ےہاوروکرٹںیماجریسیکیکوہجےساسےکامیلوفادئیکوکیئوتعقںیہنےہ۔‬

‫ااظتنہیماکرصبتہ‬

‫اقونینرائیکاینبدےکاطمقب‪،‬ینپمکوکوتعقےہہکدنسھیکزعمزدعاتلاعہیلیکاجبنےسوماقفہلصیفآئاگاوردنسھوبرڈآفرویوینی(‪)SRB‬‬
‫یکاجبنےسووصلرکدہزلیسسکیٹیکرمقینپمکوکواسپلماجئیگ۔اسوہجےسینپمکےناسرمقوک‪SRB‬ےسوطبراقِلبووصیلےکادنراجایک‬
‫ےہ۔‬

‫ریغفمیتمہقبایاجت(‪)UNRECONCILED BALANCES‬‬ ‫‪.II‬‬

‫اسیجہکامایلیتداتسوزیےکونٹ‪16‬اور‪32‬ںیمایبنایکایگےہ‪ ،‬درگیاوشنرسنزینپمک یکاجبنعمدہایتاوراایتخریاکروابریکدمںیم ‪16,792‬نیلم‬

‫روےپیکمجمیعرمقاور ‪16,626‬نیلمروےپیکاخصلرمقاشلمےہاوراکیاور ‪40.11‬نیلمروےپیکرمقیھباشلمےہوجدرگیاوشنرسنزینپمک‬
‫یکاجبنےسوابجاالداےہاورابکتریاسنکلئںیہنےہ۔۔ینپمکانروقموککلسنمرکےنےکلمعںیمرصموفےہ۔دنمرہجابالروقمیکزری‬
‫کیسلی‬
‫اوتلا‪،‬ری سن(‪)reconciliations‬یکاتریخیکوہجےسدبتیلیاوراسےکہجیتنزیخارثات‪،‬ارگوکیئوہںوت‪،‬انامایلیتداتسوزیاترپریغ‬
‫ینیقییکوصرتںیمابیقرںیہےگ۔‬

‫ااظتنہیماکرصبتہ‬

‫‪PRCL‬اورڈیسگناوشنرسنزینپمکںیماالتخفیکوہج‪،‬ڈیسگنزینپمکیکاجبنےسرطکیہفوطررپدبتیلیاکلمعایکایگےہ۔ ‪PRCL‬ےناس‬
‫عمےلموک‪ SECP‬ںیمااھٹدایےہاور‪ SECP‬ےنامتمآڈٹرفزموکدہاتییکےہہکامتمزینپمکنجےکااکؤسٹنریاسنکلئںیہنوہئںیہان‬
‫ااکؤسٹنوکوکاافیلیئ رکںی۔‬

‫انتمبسعمدہایتاکروابر‬ ‫‪.III‬‬

‫بی‬
‫اوشنرسنآرڈ ییس‪2000‬اوراپاتسکناوشنرسناکروپرنشی(الزیمزادئازرضورتریاوشنرسن)‪،‬اضہطب‪1978‬ےکتحتعمدہایتاکروابریک‬
‫درجذلیرضورایتںیہ‪:‬‬

‫ڈیسگنزینپمکےکاپسانمبسراکرڈوہاناچےئہسجںیماترخیاوراکیفولعمامتدرجوہں؛‬

‫ڈیسگنزینپمکوکاچےیہہکوہلمکمرپیمی‪/‬میلکابرڈسکی(‪ )bordereaux‬رفامہرکےنےکاسھتہہسامیہںیمآدمین(‪)return‬رفامہرکے؛‬

‫ینپمکےکاجمزےلمعاکعمہنئرکےناکقح‪،‬اہجںوہ عمہنئرکںیاورڈیسگنینپمکےکراکرڈیکوقنلاحلصرکںیکساور‬

‫ینپمکاسابتدقحارےہہکوہ رکساورانےکریاوشنرسنےسقلعتمیسکیھبداتسوزیاتاک لمکمایزجویاکعمہنیئرکےکس۔‬

‫‪Page 5 of 17‬‬
‫اتمہ‪،‬اموسائڈیسگنزینپمکیکاجبنےسہسامیہررٹیزنی‪،‬واہںرپانتمبسعمدہایتاکروابریکدصتقیےکانمبسعمونراکرڈوموجدںیہناھت۔ًاتجیتن‪،‬‬
‫مہذموکرہوسدوںاورانےکقبایاجتیکدصتقیےسذعمورےھت۔العوہازںی‪،‬وہدوعےنجیکاداایگیئںاکیاسلےسزایدہںیہنوہںیئ‪،‬انےک‬
‫ابرےںیماسابتاکنیعترکےنےسذعمورےھت‪،‬ہکدوعےیکرپوگنسسںیماتریخےکببسہاجہنینپمکرپالوگںیہایںیہنویکہکندوعںےس‬
‫قلعتمڈاٹیدایتسبںیہناھت۔‬

‫اسیج ہکامایلیتداتسوزیاتےکونٹربمن‪ 39،38،،27 ، 26،25،18،17،16‬اور‪ 55‬ںیماظہایکایگےہ‪،‬ھچکاھکوتںےکقبایاجتاورفلتخمدرہج‬

‫ک‬
‫ےکنیلدنیےکوسدوںیکاکادنراجانتمبسعمدہایت(‪)Treaty‬اکروابریکدمںیمایکایگےہ۔مہڈیسگناوشنرسن مییینووںےکانااکؤسٹنےس‬
‫قلعتماکیفاورانمبسآڈٹےکقبایاجتاورنیلدنییکالکسےکوبثتےسقلعتمرضوریداتسوزیاتاحلصرکےنےسذعمورےھتویکہکنینپمک‪،‬‬
‫ڈیسگنینپمک اےنپراکیرڈاوردصتقیےکےیل‪،‬ڈیسگنزینپمک ےسرضوریداتسوزیاتاحلصںیہنرکیتکیلاساکلکااصحنر نیلدنییکامتیلوجہس‬
‫امیہررٹیزنںیمںیماظہیکیئگںیہسجاکدصقمنیلدنیاکراکیرڈرےنھکےکےیلےہ۔زمدیہیاکیفاورانمبسوبثتےکےیلابتمدلرطہقیاکرنکمم‬
‫ںیہنےہ۔ًاتجیتن‪،‬مہاسابتاکنیعترکےنےسذعموررےہہکآایانامتیلںیمیکیئگرتامیمرضوریںیھت۔‬

‫ااظتنہیماکرصبتہ‬

‫اسیجہکاوشنرسنآرڈسننی‪2000‬یکقشربمن‪43‬ںیمدرجےہ‪،‬عمدہایت(‪)Treaty‬اکروابرےکےلسلسںیم ینپمکرپیمی‪،‬دوعےاورنشیمکےس‬
‫قلعتماھکوتںاکادنراجڈیسگناوشنرسنزینپمکیکاجبنےسررٹزنیکاینبدرپرکیتےہاوربجیھبکانمبسےھجمسوت انےسقلعتمداتسوزیاتبلط‬
‫رکیتےہ۔اتمہ‪،‬اسیجہکاحمبسےناشندنیہیکےہ‪ ،‬ڈیسگنزینپمکےسزمدیداتسوزیاتاحلصیکاجریہںیہ۔‬

‫رسامہیاکریرپارپٹ‬ ‫‪.IV‬‬

‫اسیجاہکینپمکیکامایلیتداتسوزیاتےکونٹ‪11‬ںیماظہایکایگےہینپمک اینپ رسامہیاکریرپارپٹیکانمبسدقرریتھکےہ۔ارٹنلنشینااکؤگنٹن‬

‫ب‬
‫اڈنیسرڈ(‪)IAS-40‬ےکاطمقبرسامہیاکریرپارپٹےکےیلاکیا یییٹی(‪)entity‬یکرضورتےہسجےکےیللسلستےسانمبسدقراک‬
‫دوابرہہنیمختاگلےنےکےیلانمبسدقراکنیعترکےناکامڈلاامعتسلرکاناچےیہ۔ااظتنہیمےنرپارپٹیکانمبسدقراوراسےکہجیتنزیخارثات‬
‫نیعترکےنےکےیلابکتیسکمسقیکاکروایئںیہنیکےہ۔اسرطحےس‪ً،‬اتجیتنرتمیماوراسےکہجیتنزیخارثات‪،‬ارگوکیئیہےہوت‪،‬انامایلیت‬
‫داتسوزیاترپایکوہںےگوہبسریغینیقیےہ۔‬

‫ااظتنہیماکرصبتہ‬

‫ینپمک رپارپٹیکدقرذپرییےکےیلہنیمختاکریکدخامتاحلصرکےیگاوراساکہنیمخت‪30‬وجن‪2023‬ےسےلہپرکواےلیگاوراسےکوکیئامایلیت‬
‫ارثات وہئوت‪2023‬ےک فصناسلےکااکؤسٹنںیماشلموہںےگ۔‬

‫لقتسماجریرےنہواےلادارےےسقلعتمامدیاایشءیکریغینیقی‬ ‫‪.V‬‬

‫بی‬
‫اسیجہکامایلیتداتسوزیاتےکونٹ‪1.2‬اور‪60‬ںیماظہایکایگےہ‪،‬ابکت‪،‬ینپمک‪،‬اوشنرسنآرڈ ییس‪2000‬اورقلعتموقانینیکقش‪36‬ںیم‬
‫درج مکےسمک لحذپریی(‪)solvency‬یکاقتےضوپرارکےنالخفورزیرکریہےہ۔ایسیالخفورزیاسابتیکاشندنیہرکیتےہیکامدیاایشء‬
‫ےکےلسلسںیمریغینیقیوموجدےہوجینپمکیکلقتسمںیماجریرےنہرپکشوہبشاظہرکات ےہ۔اسعمےلمےکےلسلسںیمامہریرائںیمدبتیلی‬
‫ںیہنآیئےہ۔‬

‫‪Page 6 of 17‬‬
 ‫مہےناسعمےلمرپاینپآڈٹروپرٹںیمزوردایےہ۔‬

‫ااظتنہیماکرصبتہ‬

‫ااظتنہیم‪،‬زیتیےسڑبےتھوہئقبایدوعںوج‪31‬دربمس‪ 2021‬وکااتتخمذپریرپ‪9,401,437,187/-‬روےپےسڑبھرکوموجدہاسلںیم‬
‫‪21,256,435,233/-‬روےپوہےناکیتخسےساجئہےلریہےہ۔ویکہکنزایدہرتدوعںیکاینبدادتبایئاصقننےکےنیمخترپوہیتےہ‪،‬وجایوتاتٹھگ‬
‫ےہ‪،‬ادارکدایاجاتےہایاڈیٹسجرکدایاجاتےہقبایاقلبووصویلںےس۔اسےیل‪،‬ہیوتعقیکاجیتےہہک‪،‬قبایدوعںےکامیلوابجت‪30‬وجن‪2023‬‬
‫کتاخےصمکوہاجںیئےگ۔العوہازںی‪ SECP،‬وضاطبےکارجاءےکرمالحںیمےہوج‪30‬وجن‪2023‬کت لمکموہاجئاگ‪،‬وجدرگیعمالمتےک‬
‫اسھت‪PRCL ،‬ےکاوشنرسنزینپمکیکاجبنوطلیدمتےساقلبووصیلوابجتےسیجعمالمتوکیھبلحرکےاگ۔اکیرمہبتہیوضاطبؤمرث‬
‫وہںےگ‪،‬ووصایلبںیمرتہبیآئیگاوراوشنرسنزینپمکیکاجبندریہنیاقلبووصیلوابجتیکزایدہرتووصلوہاجںیئیگاورلحذپریی‬
‫(‪)solvency‬یکوصراحتلاخیصرتہبوہاجئیگ۔‬

‫ذموکرہابالووجاحتیکوہجےسںیمہوتعقےہہکمہ‪30،‬وجن‪2023‬کتایاسےسےلہپ‪،‬لحذپریی(‪ )solvency‬یکرضورایتاسیجیکاوشنرسن‬
‫بی‬
‫آرڈ ییس‪ 2000‬ںیمایبنیکیئگںیہ‪،‬انوکوپرارکںیکسےگ۔‬

‫کلبپٹکیساکروابر‬

‫ینپمک‪،‬لنشیناوشنرسنینپمکڈٹیملےکریاوشنرسنرکےنوایلینپمکےکوطررپاکمرکیتےہ۔اسںیماشلمدنچاٰیلعرہشتےکااکؤسٹنںیہالثمٗ‪،PIA‬‬
‫‪،KSEW،PNSC،PPL،OGDCL،PSO،PARCO‬کلبپٹکیسےکوتاانیئےکوصنمےبوریغہاشلمںیہ۔زریاجئہاسلےکدوران‪،‬ینپمکیککلبپ‬
‫ٹکیساکروابرےسمجمیعاملگذڈاری(‪13,847 )revenues‬نیلمروےپےسڑبھرک‪15,507‬نیلمروےپوہیئگیھت‪ ،‬ااضہف‪12‬دصیف۔‬

‫ریاوشنرسنےکااظتنامت‬

‫‪PRCL‬ےکاپسااضیفریاوشنرسنےکاصقننےکااظتنامتںیہاورداینےکرعموفریاوشنرسنرکےنوایلوینپمکںےسااظتنماوراقلعتتںیہاسیجہکونہور‬
‫ری(‪S&P‬یک ‪،) AA-‬وسسئری(‪S&P‬یک‪ AA-‬درہجدنبی)‪XL،‬ری(‪S&P‬یک‪ AA-‬درہجدنبی)‪ ،‬اپررنٹری(‪S&P‬یک ‪ A+‬درہجدنبی)اورالڈئ‬
‫ڈنسٹیکی(‪S&P‬یک ‪ A+‬درہجدنبی)وریغہوریغہ۔ینپمکزایدہےسزایدہرطخےوکاھبنسےنلیکاپیسیلرپدلمعرآدمرکیتےہوجہکاتحمطریاوشنرسنرپورگام‬
‫ےکتحتانبیئیئگےہ۔ینپمکےکریاوشنرسنےکااحہطیکاینبد رطخےےکاقممرپینپمکیکومشتیل‪،‬اساکعمجوہاناوراساکاراکتز(‪)concentration‬ےہ۔‬

‫‪E.C.O.‬ریاوشنرسنینپمک‬

‫‪10‬رفوری‪2010‬رپاالسمآابد(اپاتسکن) ںیم‪E.C.O.‬ریاوشنرسنینپمکاکآرلکیٹآفارگیٹنمی(‪ )AoA‬رپنیترنکرایتسں‪،‬االسیموہمجرہیاپاتسکن‪،‬‬

‫االسیموہمجرہیاریاناوررتیکےکامندنئاگنےکدرایمندطختسوہئ۔‪AoA‬یکزمدیوظنمریرنکوکحوتمںےندیاورآرخیوظنمریرتیکےن‪22‬ونربم‬
‫‪2017‬ںیمدی۔ینپمکاکدصقموموجدہریاوشنرسنیکدخامتوکڑباھان‪،‬اڈنرراگنٹئ(‪)underwriting‬اوررطخےاکاھبنسےنلیکالصتیحوکڑباھاناورےطخیک‬
‫عمیشرتیقںیمعموتنرکانےہ۔‬

‫ینپمکاکوظنمردشہرسامہیسیتنیلمارمیکیڈارلوہاگوجدسزہارارمیکیڈارلیفصصحیکامتیلےکنیتزہار صصحرپلمتشموہاگاورونیتںوکلمںےکاداروںںیم‬
‫اسمویوطررپمیسقتوہاگ۔ ‪PRCL‬یکاجبنےس ‪ECO‬ریاوشنرسنینپمکںیموکیئیھبرسامہیاکریوبرڈےکاننیمظ‪،‬صصحدننکاگن‪AGM /‬یکوظنمری‬
‫اورزینپمکاٹکی‪2017‬ےکقش‪199‬یکیمعتےسرشموطوہاگ۔‬

‫‪Page 7 of 17‬‬
 ‫رکڈیٹدرہجدنبی‬

‫ینپمکیکاسل‪2022-23‬یکدرہجدنبیاکاکمرسیمز‪JCR-VIS‬ےناھبنسلایلےہ۔ینپمکیکدرہجدنبی ”‪ “AA+‬لبقتسماکرظنمانم)‪(outlook‬تبثم‬
‫ےہ۔درہجدنبیےکایعمرےکامیپےناوررعتفیےکاطمقب”‪“AA+‬درہجدنبیرکڈیٹرکسیکااہتنیئمکوتعقاظہرکاتےہ‪ ،‬اورہیامیلاداویگیئںےکودعوں‬
‫یکربوتقادایگیئیکااہتنیئمکحتسمادعتسادیکاشندنیہرکیتےہاوریسکہنکمموااعقتںیموکیئاخصدعمظفحت(‪)vulnerability‬ںیہنےہ۔‬

‫انمفدعبازوصحمل‬

‫ینپمکاکانمفدعبازوصحملذگہتشاسلےک ‪ 2,589‬نیلمروےپےکاقمےلبںیمرواںاسل ‪2,624‬نیلمروےپ راہوج‪35‬نیلمروےپاکااضہفینعی‪1‬دصیفاظہ‬

‫رکاہےہ۔‬

‫محنصات(‪)appropriations‬‬

‫(روےپنیلمںیم)‬ ‫محنصات(‪)appropriations‬‬

‫‪2021‬‬ ‫‪2022‬‬

‫‪3,614‬‬ ‫‪3,556‬‬ ‫انمفلبقازوصحمل‬

‫)‪(1,025‬‬ ‫)‪(931‬‬ ‫یفن‪:‬وصحمل‬

‫‪2,589‬‬ ‫‪2,624‬‬ ‫انمفدعبازوصحمل‬

‫‪2,350‬‬ ‫‪5,414‬‬ ‫عمج‪:‬ریغصتخمدشہالھچپانمفوجآےگڑباھایایگ‬

‫)‪(168‬‬ ‫)‪(318‬‬ ‫عمج‪:‬مجمیعآدمن‬

‫)‪(750‬‬ ‫)‪(600‬‬ ‫یفن‪:‬یمتحقنہمسقنمانمف‪٪20@2021‬‬

‫)‪(5,358‬‬ ‫یفن‪:‬وبسنصصحاکارجاء@‪٪200‬‬

‫‪5,414‬‬ ‫‪1,887‬‬ ‫ریغصتخمدشہ انمفوجآےگڑباھایایگ‬

‫جمزہہمسقنمانمف‬

‫‪SECP‬یکاجتوزیاوروبرڈےکاننیمظےکےلصیفیکروینشںیمہکینپمک یکامیلوصراحتلوکمکحتسمرکےناوراینپادعتسادوکمکحتسمرےنھےکےیلوبرڈآفڈارئرٹکیز‬
‫ےناسالہناعماالجسیکوظنمریےکےیلذگہتشاسلےکوظنمررکدہ‪20‬دصیفہمسقنمانمفےکاقمےلبںیماسل‪2022‬ےکےیل‪7.5‬دصیفقناسالہناعماالجس‬
‫ےکےیلوجتزیایکےہ۔‬

‫‪Page 8 of 17‬‬
 ‫وڈنوری‪-‬اکتف‬

‫ہیری‪-‬اکتفوڈنوےکآرپنشیاکوچاھتاسلےہ۔‪2022‬اور‪2021‬یکامایلیتویکلھجںاکاقتیلباجئہےچینشیپایکاجاتےہ؛‬

‫دصیف‬ ‫‪2021‬‬ ‫‪2022‬‬ ‫املگذڈاریاھکات‬

‫روےپ‬ ‫روےپ‬ ‫رشاتکداریاکری‪-‬اکتفڈنف‬

‫‪41.82%‬‬ ‫‪690,413,885‬‬ ‫‪979,125,622‬‬ ‫اخصلرشاتکداریےساملذگاری(‪)revenue‬‬

‫‪37.95%‬‬ ‫‪-156,471,404‬‬ ‫‪-215,856,211‬‬ ‫واکہلسیفےکارخااجت‬

‫‪61.25%‬‬ ‫‪-311,243,050‬‬ ‫‪-501,892,882‬‬ ‫اخصلدوعی‪IBNR-‬‬

‫‪222،700،431‬‬ ‫‪261،376،529‬‬

‫‪198,848,568‬‬ ‫‪304,239,169‬‬ ‫رسامہیاکری آدمنےسےلہپاصقنن‬

‫‪623.29%‬‬ ‫‪10,080,104‬‬ ‫‪72,908,632‬‬ ‫درگیآدمن‬

‫‪82.35%‬‬ ‫‪4,560,461‬‬ ‫‪8,316,060‬‬ ‫رسامہیاکریےسآدمین‬

‫‪454.79%‬‬ ‫‪-3,660,141‬‬ ‫‪-20,303, 173‬‬ ‫اضمرباکہصح‬

‫‪454.79%‬‬ ‫‪10,980,424‬‬ ‫‪60,918,519‬‬

‫‪-‬‬ ‫‪-‬‬ ‫ڈیسڈرمقیکووصیل‬

‫‪45.7%‬‬ ‫‪245,492,293‬‬ ‫‪356,384,563‬‬ ‫لبقازوصحملاسخرہ‬

‫‪2,027,758‬‬ ‫‪-10,760,328‬‬ ‫وصحمل‬

‫‪41.96%‬‬ ‫‪243,464,535‬‬ ‫‪345,624,235‬‬ ‫اسخرہوجعمجدشہاسخرےںیملقتنمےیکےئگ‬

‫املگذڈاریاھکت‬

‫آرپرٹیاک ڈنف‬

‫‪37.95%‬‬ ‫‪156,471,404‬‬ ‫‪215,856,211‬‬ ‫واکہلسیفےسآدمین‬

‫‪Page 9 of 17‬‬
 ‫‪-145,151,427‬‬ ‫‪-213,471,407‬‬ ‫نشیمکےکارخااجت‬

‫‪98.38%‬‬ ‫‪-7,937,109‬‬ ‫‪-15,746,091‬‬ ‫اعم‪،‬ااظتنیماورٹنمجنیمےکارخااجت‬

‫‪-‬‬ ‫‪-‬‬ ‫ڈیسڈرمقوجرشاتکداریریاکتفڈنفوکادایکیئگ‬

‫‪494.97%‬‬ ‫‪3،382،868‬‬ ‫‪-13،361،287‬‬

‫‪-654.79%‬‬ ‫‪3,660,141‬‬ ‫‪-20,306,173‬‬ ‫رشاتکداریری‪-‬اکتفڈنفیکرسامہیاکریںیماضمرباکہصح‬

‫‪83.39%‬‬ ‫‪920,194‬‬ ‫‪1,687,509‬‬ ‫رسامہیاکریےسآدمن‬

‫‪135.16%‬‬ ‫‪14,518,979‬‬ ‫‪34,143,170‬‬ ‫درگیآدمن‬

‫‪-18.72%‬‬ ‫‪19,099,314‬‬ ‫‪15,524,506‬‬ ‫انمفلبقازوصحمل‬

‫‪90.26%‬‬ ‫‪22,482,182‬‬ ‫‪42,775,565‬‬ ‫انمفلبقازوصحمل‬

‫‪90.26%‬‬ ‫‪-6,519,833‬‬ ‫‪-12,404,914‬‬ ‫وصحمل‬

‫‪90.26%‬‬ ‫‪6,962,349‬‬ ‫‪30,370,651‬‬ ‫انمفدعبازوصحمل‬

‫زریوغراسلےکدورانمجمیعہصح(‪)contribution‬ڑبھرک ‪1,205‬نیلمروےپ وہایگہکبج‪2021‬ںیماسیکامتیل‪933‬نیلمروےپیھت‪،‬ااضہف‪272‬نیلم‬

‫روےپینعی‪30‬دصیف۔اخصلہصح(‪)contribution‬ڑبھرک‪979‬نیلمروےپوہایگہکبجاسل‪2021‬ںیماسیکامتیل ‪690‬نیلمروےپیھتسجںیمااضہف‬
‫‪289‬نیلمروےپینعی‪ 41‬دصیف۔اخصلدوعےڑبھرک‪502‬نیلمروےپوہےئگاسےکاقمےلبںیماسل‪2021‬ںیماسیکامتیل‪ 311‬نیلمروےپیھت‪،‬ااضہف‬
‫‪191‬نیلمروےپینعی‪61.4‬دصیف۔زادئازرضورت(‪)surplus‬امضیتنہمیب(‪ 52.7 )underwriting‬دصیفااضےفےس ڑبھرک‪304‬نیلمروےپوہایگہکبج‬
‫اسل‪2021‬ںیماسیکامتیل‪199‬نیلمیھت۔‬

‫عمدہایت(‪)Treaty‬اکروابر‬

‫عمدہایت(‪)Treaty‬اکروابر(انتمبس)‬

‫ینپمکےکلکاکروابرےکوپرٹوفویلںیم انتمبسعمدہایت(‪)Treaty‬اکروابراک‪ 82‬دصیف(‪79:2021‬دصیف)ہصحراہ۔اسل‪2021‬ےکرحتریدشہمجمیعرپیمی‬

‫ےک‪ 736‬نیلمروےپےکاقمےلبںیم‪ 987‬نیلمروےپراہ‪،‬ااضہف‪251‬نیلمروےپینعی‪34.10‬دصیف۔اخصلہصح اسل‪2021‬ےک‪623‬نیلمروےپےکاقمےلب‬
‫ںیمرواںاسل‪ 868‬نیلمروےپراہ‪،‬ااضہف‪226‬نیلمروےپینعی‪37.88‬دصیف۔زریاجئہاسلاکاخصلدوعےےساخصلہصحاکانتبس‪71.9‬دصیفاھت‬
‫(‪48:2021‬دصیف)سجاکہجیتناسل‪2021‬ےک‪196‬نیلمروےپےکامضیتنہمیب(‪)underwriting‬زادئازرضورت(‪)surplus‬ےکاقمےلبںیمرواں‬
‫اسل‪70‬نیلمروےپاکزادئازرضورتراہ‪،‬یمک‪126‬نیلمروےپینعی‪64.28‬دصیف۔‬

‫ریغانتمبسعمدہایت(‪)Treaty‬اکروابر‬

‫‪Page 10 of 17‬‬
 ‫ینپمکےکلکاکروابرےکوپرٹوفویلںیمریغانتمبسعمدہایت(‪)Treaty‬اکروابراک‪8‬دصیف(‪11:2021‬دصیف)ہصحراہ۔اسل‪2021‬ےکرحتریدشہمجمیعےصح‬
‫ےک‪ 99‬نیلمروےپےکاقمےلبںیم‪ 99‬نیلمروےپراہ‪،‬ااضہف‪0‬نیلمروےپینعی‪0.5‬دصیف۔اخصلہصحاسل‪2021‬ےک‪22‬نیلمروےپےکاقمےلبںیمرواں‬
‫اسل ‪-3.06‬نیلمروےپراہ‪،‬یمک‪25‬نیلمروےپینعی‪-114‬دصیف۔زریاجئہاسلاکاخصلدوعےاکانتبس‪52‬دصیفاھت(‪14:2021‬دصیف)سجاکہجیتناسل‬
‫‪2021‬ےک‪61‬نیلمروےپےکامضیتنہمیب(‪)underwriting‬اسخرےےکاقمےلبںیمرواںاسل‪133‬نیلمروےپزادئازرضورتریہ‪،‬ااضہف‪194‬نیلم‬
‫روےپ۔‬

‫اایتخریاکروابر‪:‬‬

‫آگ‪:‬‬

‫اایتخریاکروابرےکےلسلسںیم‪،‬آگےکاکروابریکمسقاکلکوپرٹوفویلںیم‪ 8.87‬دصیف(‪9.04:2021‬دصیف)ہصحےہ۔اسلےکدورانمجمیعہصحوجرحتریایک‬
‫ایگ‪ 107‬نیلمروےپاھتاسےکاقمےلبںیم‪2021‬ںیم‪ 84‬نیلمروےپ‪،‬ااضہف‪23‬نیلمروےپینعی‪26‬دصیف۔اخصلہصحاسل‪2021‬ےک‪ 73‬نیلمروےپےک‬
‫اقمےلبںیم‪102‬نیلمروےپراہ‪،‬ااضہف‪29‬نیلمروےپینعی‪39‬دصیف۔زریوغراسلےکےیلاخصلدوعےےساخصلہصحاکانتبس‪32.15‬دصیف(‪:2021‬‬
‫‪6.89‬دصیف)اھتسجاکہجیتناڈنرراگنٹیئاکزادئازرضورت‪49‬نیلمروےپاھتوجاسل‪2021‬ںیم‪53‬نیلمروےپیمکاظہرکاتےہ‪،‬یمک‪4‬نیلمروےپینعی‬
‫‪7.54‬دصیف۔‬

‫رحبیرتلیسابرربداری(‪)Marine Cargo‬اوراہجزاکڈاھہچن(‪:)Hull‬‬

‫اایتخریاکروابرےکدرگیےلسلسںیمرحبیرتلیسابرربداریاوراہجزےکڈاھےچنیکمسقےکاکروابراکلکوپرٹوفویلںیم‪0.13‬دصیف(‪0.50:2021‬دصیف)اھت۔‬
‫اسلےکدورنرحتریرکدہمجمیعہصح ‪1.5‬نیلمروےپاوراسےکاقمےلبںیماسل‪2021‬ںیم‪4.6‬نیلمروےپاھت‪،‬یمک‪3.1‬نیلمروےپینعی‪67‬دصیف۔اخصل‬
‫ہصح‪1.45‬نیلمروےپراہاسےکاقمےلبںیماسل‪2021‬ںیم‪5‬نیلمروےپاھت‪،‬یمک ‪ 4‬نیلمروےپینعی‪3.55‬دصیفینعی‪71‬دصیف۔زریوغراسلےکےیلاخصل‬
‫دوعےےساخصلےصحاکانتبس‪0.62‬دصیف(‪0:2021‬دصیف)اھتسجاکہجیتناڈنرراگنٹیئزادئازرضورت‪1.1‬نیلمروےپاھتوجاسل‪2021‬ںیم ‪3.7‬نیلم‬
‫روےپاھت‪،‬یمک ‪2.6‬نیلمروےپینعی‪70.27‬دصیف۔‬

‫احداثت(‪:)Accidents‬‬

‫اایتخریاکروابرےکدرگیےلسلسںیماحداثتیکمسقےکاکروابراکلکوپرٹوفویلںیم‪ 0.85‬دصیفہصح(‪1.03:2021‬دصیف)راہ۔اسلےکدورانمجمیعہصحوج‬
‫رحتریایکایگ ‪10.2‬نیلمروےپاھتاسےکاقمےلبںیم‪2021‬ںیم‪9.6‬نیلمروےپاھت‪،‬ااضہف‪ 0.6‬نیلمروےپینعی‪6.25‬دصیف۔اخصلہصح‪10.2‬نیلمروےپراہ‬
‫اسےکاقمےلبںیماسل‪2021‬ںیم ‪11.7‬نیلمروےپاھت‪،‬یمک ‪1.5‬نیلمروےپینعی‪12.8‬دصیف۔زادئازرضورتاڈنرراگنٹیئ‪8‬نیلمروےپاھتہکبجاسل‪2021‬‬
‫ںیم‪ 7‬نیلمروےپاھت‪،‬ااضہف‪ 1‬نیلمینعی‪14.28‬دصیف۔‬

‫المزنیمیکلفحوبہبد‬

‫ینپمکےکاپسالمزنیمیکلفحوبہبداکرفامہرکےناکڈنفوموجدےہسجےکتحتھچالمزنیموکہاسلجحرپاجیھباجاتےہ۔اسےکالعوہینپمک)‪(a‬المزنیمےک‬
‫وچبںوکرقانظفحرکےنرپاورڈنکیسریاوراہرئڈنکیسریملعتںیم ‪A+‬رگڈیاحلصرکےنرپقنااعنمدیتیےہ‪(b)،‬ینپمکےکاسھتوطلیرافتقرےنھکواےل‬
‫المزنیمےکےیلعموہضدعبازالمزتم(‪)pension‬اور)‪(c‬دورانالمزتمااقتنلرکےنواےلالمزنیمےکالہاخہنےکےیلدتیفاورالتیفاکجیکیپدایاجات‬
‫ےہ۔‬

‫‪Page 11 of 17‬‬
 ‫وبرڈیکاستخاوریٹیمکں‬

‫وبرڈیکاستخلسیذڈزینپمکےکادارایتمظنوطبض‪،2019‬کلبپٹکیسزینپمک(وکڈآفاکروپرٹیوگرسنن)روزل‪2013‬اوراکروپرٹیوگرسننربائہمیباسزاداروں‬
‫‪،2016،‬سجاکارجاءسیکنوورزیٹیاڈنیاجنیچسکینشیمکآفاپاتسکن‪،‬ےکاطمقبےہ۔‬

‫وبضمطادنروینرٹنکولےکاظنماورادارایتمظنوطبضےکاضےطبیکومئرفنظوکینیقیانبےنےکےیل‪،‬وبرڈےندعتمدیٹیمکںلیکشتدیںیہنجیکدعتاداست(‪)7‬‬
‫ںیہ۔انںیموبرڈیکاچر(‪)4‬یٹیمکںاورااظتنہیمیکنیت(‪)3‬یٹیمکںاشلمںیہ۔امتمیٹیمکںیکاستخاسروپرٹںیمدحیلعہےسادارایتولعمامتےکےصحںیم‬
‫شیپیکںیئگںیہ۔‬

‫لبقتسماکرظنمانم‬

‫کلماکاکروابریاموحل سلسم الکشمت اکاکشر ےہ۔یلکتشیعم(‪)macroeconomic‬اکاموحل‪،‬دنلبرت ارفاطزراور رکیسنیکدقرںیم یمکےکدعتمدرمالح ےن‬

‫ےناکروابریکوصراحتلوکزمدیلکشمانبدایےہ۔لکشماکروابریاموحلےکابووجد‪،‬ینپمکیک تمکحیلمع یکوتہجاکرمزک اوشنرسنوینپمکں وکدخامتیکوفریرفایمہ‬
‫رپ رےہ یگ اخص وطر رپ اایتخری وشکشیپں رپ۔ ‪ PRCL‬اکی مکحتسم سنلیب ٹیش اور وبضمط (‪ )enhanced‬یتیکلم رسامئ (‪ )equity‬ےک ڈاھےچن ےک اسھت‬
‫بییی‬
‫ایعمریعمدہایتاوراایتخریاکروابراورانمف شخبعمدہایترپسدیگ(‪)cession‬رپوتہجرموکزرےھکیگاوراسےکےیلر سن(‪)retention‬یکادعتسادںیم‬
‫دتبرجی ااضےف اوررطخات ےس ےنٹپن ےک ااظتنیم ادقاامت ےس احلص رکے یگ۔ ینپمکرپ زعم ےہ یک وہ صصح دننکاگن یکدقر ںیم ااضےف اور اس یک وتہج ےہ‬
‫دوونںینعیعمدہایتاوراایتخریاکروابرںیماےنپےصحوکڑباھئ۔‬

‫ریاکتفآرپنشی ےنینپمکیکانمفیشخبںیمہصحڈاانلرشوعرکدایےہاوروتعقےہہکوتقذگرےنےکاسھتاسںیمااضہفوہاگ۔ڈسکفآدمینےکوپرٹوفویل‪،‬‬
‫ڈسکفآدمینےکارٹسنوسٹنم(‪)instruments‬ےساحلصراکیرڈدنلبانمفاورڈسکفآدمینےک وپرٹوفویلےسافدئہااھٹےنےکےئل وپریرطحےسایترےہ اور‬
‫دنلبرتالئاگ ‪-‬لبقتسمںیمینپمکاےنپاکروابریکاکررکدیگیکابرےںیمرپادیمرظنمانمیکادیمریتھکےہ۔‬

‫ینپمکےک لیلق ادملت اوروطلیادملتاقمدصےک وصحلےک ےیلینپمک یک اکروابریتمکح یلمع یک وتہج اک رمزک اوشنرسن وینپمکں وکدخامتیکوفریرفایمہ رپ‬
‫رےہیگاخصوطر رپاایتخریوشکشیپں رپ۔ ‪PRCL‬اکیمکحتسمسنلیبٹیش اوروبضمط(‪ )enhanced‬یتیکلمرسامئ(‪)equity‬ےک ڈاھےچنےکاسھت ایعمری‬
‫بییی‬
‫عمدہایتاوراایتخریاکروابراورانمفشخبعمدہایترپسدیگ(‪)cession‬رپوتہجرموکزرےھکیگاوراسےکےیلر سن(‪)retention‬یکادعتسادںیمدتبرجی‬
‫ااضےف اوررطخاتےسےنٹپنےکااظتنیمادقاامتےساحلصرکےیگ۔‬

‫ادنورینرگناین(‪)Internal Controls‬‬

‫ینپمک ںیم وبرڈاک لیکشت رکدہ احمبس اکبعش ‪ ،‬وجریبوین آڈٹ شکنفےک تحت ںیہن ےہ‪ ،‬ےک ذرےعی ےس ادنروین رگنایناکڈاھےچناک ومئر فنذ ایک اج اکچ ےہ۔ احمہبس‬
‫یٹیمکادنرویناحمہبسروپرٹاکاجئہےلیکچےہاوراہجںرضوریوہاانمبسدقمااھٹای۔ریبویناورادنرویناحمنیبسںیماعتونیکوہستلرفامہیکیئگےہاتہکرتہب‬
‫اکررکدیگوکینیقیانبایاجئاورینپمکےکاقمدصوکوپراایکاجےکسومشبلربتعمامایلیتروپرگنٹاظنماوروقانیناوروضاطبیکیمعتیھبیکاجےکس۔‬

‫رطخےےسااظتنمیکاپیسیل(‪)Risk Management Policy‬‬

‫ینپمکںیمرطخےےسےنٹپناوراکروابریاقمدصےسقلعتموماوعقںےسافدئہرطوقیں‪،‬اظنماوررپاسساکانمبسڈاھہچنوموجدےہ۔ینپمکاکرطخےیکٹنمجنیم‬
‫ارپوچںیماشلمےہرطخےاکدقماری(‪)quantitative‬اورامیتیہ(‪)qualitative‬ہنیمختاتہکرطخاتوکمکےسمکایکاجےکس۔وبرڈ‪ ،‬اکییلیصفترطخےےک‬

‫‪Page 12 of 17‬‬
‫ااظتنمیکاپیسیلیکوظنمریدےاکچےہسجاکوًاتقوفًاتقاجئہایلاجاتےہ۔رطخےوکمکرکےن رطےقیاورادقاامت ایترےیکاجےکچںیہاوردہاایتںیمواضتحےس‬
‫ایبنایکاجاکچےہ۔‬

‫اضہطباالخق‬

‫ینپمکےناضہطباالخقایترایکےہاتہک امتمالمزنیمےکاالخیقرویاوراستیملوکینیقیانبایاجےکس۔ینپمکےکامتمآرپزنشیاضہطباالخقیکیتخسےسیمعترکےت‬
‫وہئاجئاورافشفرطےقیےسئکاجےتںیہ۔‬

‫اننیمظاکرتیتیبرپورگام‬

‫ینپمکےکامتماننیمظ‪"،‬اننیمظےکرتیتیبرپورگام"ےکتحتدنتسماننیمظںیہ۔‬

‫اننیمظیکشمہہاپیسیل‬

‫وبرڈیکوجتزیرپاننیمظاکشمہہیکوظنمریصصحدننکاگنےکاسالہناعماالجسںیمایکاجاتےہ۔‬

‫وبرڈےکاننیمظاکاکررکدیگیکدقرذپریی(‪)Evaluation‬‬

‫کلبپٹکیساکروپرٹیوگرسنن‪،‬روزل‪2013‬ےکاضہطب‪)1( 8‬اوروبرڈیکوظنمررکدہاپیسیلےکتحت‪CEO ،‬اورابیقامتماننیمظیکاکررکدیگاکاجئہوبرڈےک‬

‫رئیچںیمےنایل۔۔دقرذپرییاکڈاھہچن‪،‬وبرڈےکہارفنادیاراکنےکامیتیہ(‪)qualitative‬ےنیمخترپلمتشمےہ۔‬

‫قلعتمرفقیےکنیلدنی‬

‫وبرڈےکاننیمظ ہوبرڈےکاالجسںیمینپمکیکرشکیوینپمکں‪/‬قلعتمرفوقیںےکنیلدنییکوظنمریدتیںیہ۔امتمقلعتمرفوقیںےسئکےئگامتم نیلدنی‬

‫نیعتمدحودیکاینبدرپئکےئگںیہ۔‬

‫یکلم‬

‫‪31‬دربمس‪2022‬رپینپمکےکراکرڈرپ ‪ 4،361‬صصحدننکاگنوموجدےھت۔‬

‫صصحرےنھکاکراحجن‬

‫‪31‬دربمس‪ 2022‬رپینپمکےکصصحرےنھکاکراحجنعمبرضوریولعمامتاسروپرٹےکآرخںیمدایتسبےہ۔‬

‫ادارایتاورامایلیتروپرگنٹےکڈاھےچناکایبن‬

‫‪PRCL‬اکی دنمرج(‪)listed‬ینپمک ےہاور لسیذڈ زینپمک ےک) ادارایتمظنوطبض ےکوقادئ)‪ 2020،‬اوردرگیامتملسیذڈوقادئ یک اپدنبیرکیت ےہ۔ینپمککلبپٹکیس‬
‫نط‬
‫ادارہ یھب ےہ اور کلبپ ٹکیس زینپمک (ادارایت م وطبض ےک وضاطب) وقانین ‪ 2013‬اور ادارایت مظن و طبض ےک اضہطب ربائ اوشنررز ‪ 2016‬ےک تحت اکم رکیت‬
‫ےہ۔ڈارئرٹکیز امتم روپرگنٹ اور ولعمامت وک ااشف رکےن یک رضورایت وج زینپمک اٹکی ‪ ،2017‬اوشنرسن آرڈسننی ‪ 2000‬اور ان ےک تحت انبئ ےئگ وقانین یک‬

‫‪Page 13 of 17‬‬
‫یمعت یک دصتقی رکےت ںیہ۔ڈارئرٹکیز ‪SECP‬ےک ادارایت وگرسنن ےک اضےطب ےک ادارایت اور امایلیت روپرگنٹ ےک دنمرہج ذلی ڈاھےچن یک یمعت یک دصتقی‬
‫رکےتںیہ‪-:‬‬

‫‪ .a‬ینپمکااظتنہیمےکایتررکدہامایلیتوگوشارےاسےکعمالمتیکاحتل‪،‬یلمعاومرےکاتنجئ‪،‬شیکولفاوریتیکلمرسامہی(‪)equity‬ںیمدبتیلیرتہبوطر‬
‫رپشیپرکےتںیہ۔‬

‫‪ .b‬ینپمکےنومزوںاھکوتںیکاتکںیب )‪(Books of Accounts‬اقمئریھکوہیئںیہ۔‬

‫‪ .c‬ینپمکےنامایلیت وگوشاروںیک ایتری ںیم ااکؤگنٹنیک انمبس یلمعاپایسیلں اسکیںوطر رپ اانپیئ یئگ ےہ‪،‬دبتویلیں وکانمبس وطر رپ اظہ ایک ایگ ےہ اور‬
‫ااکؤگنٹنونیمختںیکاینبدوقعملاوراتحمطرپریھکےہ۔‬

‫‪ .d‬اپاتسکن ںیم اقِلب االطق نیب االوقایم امایلیت روپرگنٹ ےک ایعمر‪ ،‬زینپمک اٹکی ‪ ،2017‬اوشنرسن آرڈسننی ‪ 2000‬اور سیکنوورئر اجنیچسکی نشیمک‬
‫(اوشنرسن)وقانین‪2017‬یکرضورایتےکاطمقبلمعرکےتوہئامایلیتوگوشارےایترئکےئگںیہ۔‬

‫‪ .e‬ادنروینرگنایناکاظنموموجدےہادنروینآڈٹاکبعشوپریرطحاکمرکراہےہ۔‬

‫ینپمکےکاکروابرےکاجریرےنہواےلادارےےکوطررپوکیئااہبمںیہنےہ۔‬ ‫‪.f‬‬

‫‪ .g‬لسیذڈزینپمک ےک اداریتمظن وطبضاک اضہطب‪ 2020‬اسیج ہکلسییگروگینشیل ںیم درج ےہ اورکلبپ ٹکیسزینپمک (اداریتمظن وطبضاک اضہطب)‪ 2013‬ربائ‬
‫اوشنررز‪2016‬ںیمدرجرتہبنیرپبکیسزرےسیسکمسقاکامدیارحنافںیہنایکایگےہ۔‬

‫‪ .h‬ڈارئرٹکیزےکرتیتیبرپورگامےکتحتامتمڈارئرٹکیزمیلعتایہتفںیہ۔‬

‫ونبختنمڈارئرٹکیزوکقلعتموقانیناورانیکذمدارویںےکابرےآاگیہاکاعتریفرپورگامایکایگاھت۔‬ ‫‪.i‬‬

‫ح‬
‫ینپمک یکلنشین اوننسٹمنت رٹٹسڈٹیمل )‪(NITL‬ںیم ‪8.34‬دصیف یک صصیرشاتک داریےہ اوراسرطح ےس اسےک ڈارئرٹکیز ںیم ےس اکی‬ ‫‪.j‬‬
‫ںیہ۔اسوتقوج‪PRCL‬ےکوموجدہ‪CEO‬ںیہوہ ‪NITL‬ےکوبرڈںیمینپمکیکامندنئیگےہ۔‬

‫‪ .k‬ریچ نیم اور درگی وبرڈ ےک اراکن ےک ااختنب اور ان ےک ااختنب یک رشاطئ ےک اسھت اسھت ان ےک شمہہ اپیسیل وک ینپمک ےک رتہبنی فمد اور رتہبنی‬
‫رپبکیسزروکدمِرظنرےتھکوہئاایتخرایکایگےہ۔‬

‫اننایرویکیویٹڈارئرٹکیزاکنیعتمعموہضںیہنےہاوران وکہاالجسںیمرشتکیک اکینیعتمسیفادایکاجیتےہ۔فیچایرویکیویٹ‪،‬ڈارئرٹکیزاور‬ ‫‪.l‬‬

‫ایرویکیویٹزرپالوگعموےضدحیلعہےسروپرٹںیمدےیےئگںیہ۔‬

‫‪ .m‬ذگہتش‪6‬اسولںےکدیلکیآرپگنٹیاورامایلیتادعادوامشراکالخہصدحیلعہےساسروپرٹںیماشلمےہ۔‬

‫‪ .n‬صصحرےنھکےکراحجناکایبندحیلعہ ےساسروپرٹںیماشلمےہ۔‬

‫‪ .o‬وہفیظدعبازالمزتم(‪،)pension‬رگوجیٹاوررپاوڈیٹنیڈنفیکرسامہیاکرییکامتیلدرجذلیےہ؛‬

‫‪Page 14 of 17‬‬
 ‫(روےپنیلمںیم)‬

‫‪2021‬‬ ‫‪2022‬‬

‫پیی‬
‫‪1079‬‬ ‫‪1107‬‬ ‫سناوررگوجییٹیڈنف‬

‫‪133‬‬ ‫‪147‬‬ ‫اعمرپاوڈیٹنڈنف‪/‬رپاوڈیٹنڈنف‬

‫وبرڈےکاننیمظاالجساوراحرضی‬

‫اسل‪2022‬ںیموبرڈےندعتمدیٹیمکںلیکشتدںی‪،‬اوردقعنمہاالجساورہڈارئرٹکییکاحرضییکالیصفتتدرجذلیںیہ‬
‫اضہطباالخق‪/‬ااسنینواسلئ‪/‬شمہہیٹیمک‬
‫رکسٹنمجنیم‪،‬یمعتاوراقونینیٹیمک‬

‫اڈنرراگنٹئ‪/‬ریاوشنرسنیٹیمک‬
‫دوعےےکہیفصتیٹیمک‬

‫وبرڈآفڈارئرٹکیز‬
‫رپوویکرٹنمیٹیمک‬

‫رسامہیاکرییٹیمک‬

‫آڈٹیٹیمک‬

‫‪3‬‬ ‫‪3‬‬ ‫‪3‬‬ ‫‪4‬‬ ‫‪3‬‬ ‫‪8‬‬ ‫‪5‬‬ ‫‪9‬‬ ‫االجسیکدعتاد‬

‫االجسںیمرشتکیکدعتاد‬ ‫اننیمظےکانم‬

‫انجباتممزیلعراجر‪،‬رئیچنیموبرڈ‬ ‫‪1‬‬
‫‪3‬‬ ‫‪3‬‬ ‫‪2‬‬ ‫‪4‬‬ ‫‪-‬‬ ‫‪8‬‬ ‫‪-‬‬ ‫‪9‬‬

‫‪-‬‬ ‫‪3‬‬ ‫‪1‬‬ ‫‪-‬‬ ‫‪-‬‬ ‫‪8‬‬ ‫‪5‬‬ ‫انجبحلصمادلنی‪،‬رنکوبرڈ‬ ‫‪2‬‬

‫‪9‬‬

‫‪-‬‬ ‫‪1‬‬ ‫‪-‬‬ ‫‪1‬‬ ‫‪-‬‬ ‫‪-‬‬ ‫انجببیعشریم‪،‬رنکوبرڈ‬ ‫‪3‬‬

‫‪-‬‬ ‫‪3‬‬

‫‪3‬‬ ‫‪-‬‬ ‫‪3‬‬ ‫‪-‬‬ ‫‪3‬‬ ‫‪8‬‬ ‫‪5‬‬ ‫ڈارٹکوکرثیلعزدیی‪،‬رنکوبرڈ‬ ‫‪4‬‬

‫‪9‬‬

‫‪-‬‬ ‫‪3‬‬ ‫‪3‬‬ ‫‪-‬‬ ‫‪-‬‬ ‫‪-‬‬ ‫انجبدمحمرادش‪،‬رنکوبرڈ‬ ‫‪5‬‬

‫‪5‬‬ ‫‪9‬‬

‫‪3‬‬ ‫‪-‬‬ ‫‪3‬‬ ‫‪-‬‬ ‫‪-‬‬ ‫‪8‬‬ ‫رتحممزارااشنیہاوعان‪،‬رنکوبرڈ‬ ‫‪6‬‬

‫‪-‬‬ ‫‪9‬‬

‫‪3‬‬ ‫‪3‬‬ ‫‪3‬‬ ‫‪4‬‬ ‫‪3‬‬ ‫‪7‬‬ ‫‪-‬‬ ‫‪8‬‬ ‫انجبرفامناہللزروکن‪/ CEO،‬ڈارئرٹکی‬ ‫‪7‬‬

‫‪Page 15 of 17‬‬
‫وجڈارئرٹکیزاالجسںیمرشتکہنرکےکساوراوہنںےناسیکیگشیپاالطعدےدییھت‪،‬وبرڈےنانیکاالجسےسریغاحرضییکرصخ‬
‫یکوظنمریدےدییھت۔‬

‫وبرڈآفڈارئرٹکیزیکدبتیلی‬

‫زریوغردمتںیم‪،‬وبرڈ ہاننازگیویٹکی‪/‬انزمد‪،‬اسکیافیسوو(‪)Ex-officio‬ڈارئرٹکیزوجوبرڈںیماشلموہئان وکوخشآدمدیایکاوروبرڈےسدحیلعہ‬

‫وہےنواےلامتماراکنیکدخامتاورینپمکیکاکایمبںیمہصحڈاےنلوکراکرڈرپرسااتہےہ۔‬

‫وقیمخاےنںیمہصح‬

‫آپیکینپمکےنوصحمالت‪،‬ویلزیاورڈویزیٹیکدمںیموگرٹنمنےکخاےنںیم‪1,226‬نیلمروےپ(‪272:2021‬نیلمروےپ)عمجرکوائےئگ۔‬

‫ادارایتمظنوطبضیکیمعت‬

‫نط‬
‫رگناینرکےن ےکاکحمیکاجبنےساجریرکدہادارایت موطبضےکوقادئ یمعتیکیئگںیہ۔‬

‫وبرڈیکآڈٹیٹیمک‬

‫وبرڈےنادارایتمظنوطبضےکاضےطبیکیمعترکےتوہئاکیآڈٹیٹیمکلیکشتدےدیےہاوروبرڈاسےکوقادئووضاطبوظنمررکاکچےہ۔یٹیمکےکاراکن‬
‫ےکانمادارایتولعمامتےکنشکیسںیمدئےئگںیہ۔‬

‫ذگہتش‪6‬اسولںںیمینپمکیکاکررکدیگ‬

‫(روےپنیلمںیم)‬

‫‪2017‬‬ ‫‪2018‬‬ ‫‪2019‬‬ ‫‪2020‬‬ ‫‪2021‬‬ ‫‪2022‬‬

‫‪8,036‬‬ ‫‪10,734‬‬ ‫‪17,655‬‬ ‫‪16,896‬‬ ‫‪20,994‬‬ ‫‪24,271‬‬ ‫مجمیعرپیمی‬

‫‪5,006‬‬ ‫‪5,464‬‬ ‫‪6,905‬‬ ‫‪6709‬‬ ‫‪7,226‬‬ ‫‪7,929‬‬ ‫اخصلرپیمی‬

‫)‪(1,148‬‬ ‫(‪)1,047‬‬ ‫)‪(1,243‬‬ ‫)‪(925‬‬ ‫)‪(968‬‬ ‫)‪(1,026‬‬ ‫اخصلنشیمک‬

‫)‪(3,740‬‬ ‫)‪(2,992‬‬ ‫)‪(4,259‬‬ ‫)‪(3,925‬‬ ‫)‪(3,778‬‬ ‫)‪(4,312‬‬ ‫اخصلدوعے‬

‫)‪(796‬‬ ‫)‪(844‬‬ ‫)‪(775‬‬ ‫)‪(667‬‬ ‫)‪(729‬‬ ‫(‪(1,529‬‬ ‫ااظتنیمارخااجت‬

‫‪-‬‬ ‫‪-‬‬ ‫‪-‬‬ ‫‪-‬‬ ‫)‪(-59‬‬ ‫‪1,401‬‬ ‫رپیمییکیمکاکاھکت‬

‫)‪(677‬‬ ‫‪581‬‬ ‫‪506‬‬ ‫‪766‬‬ ‫‪1,683‬‬ ‫‪1,338‬‬ ‫اڈنرراگنٹئ‪-‬عفن‪/‬اصقنن‬

‫‪Page 16 of 17‬‬
 ‫‪3,326‬‬ ‫‪691‬‬ ‫‪868‬‬ ‫‪1,043‬‬ ‫‪982‬‬ ‫‪3,556‬‬ ‫رسامہیاکریےسآدمین‬

‫‪2,876‬‬ ‫‪1,740‬‬ ‫‪2,189‬‬ ‫‪1,972‬‬ ‫‪2,624‬‬ ‫عفنلبقازوصحمل‬

‫‪3,614‬‬

‫‪2,226‬‬ ‫‪1,235‬‬ ‫‪1,484‬‬ ‫‪1,391‬‬ ‫عفندعبازوصحمل‬

‫‪2,590‬‬

‫ینپمکےکصصحیکاجترت‬

‫ینپمکےکامہارسفانےنینپمکےکصصحےکنیلدنیںیہنایکایگ۔‬

‫احمنیبس(‪)Auditors‬اکااختنب‬

‫بی‬ ‫بی‬
‫اسل‪ 2022‬ےکےیل ینپمکیکامایلیتدااتسوزیاتاکآڈٹرسیمز ‪،BDO‬اچررٹڈااکؤ ییسےسرکاایایگےہ۔وموجدہآڈرٹیز ‪، BDO‬اچررٹڈااکؤ ییسےن‬
‫بی‬
‫اسل‪2023‬ےکےیلوطبرآڈرٹیزےکاکمرکےنرپآامدیگاظہرکےکچںیہ۔وبرڈےکاننیمظےنآڈٹیٹیمکیکافسرشرپرسیمز ‪،BDO‬اچررٹڈااکؤ ییس‪ ،‬وک‬
‫اسل‪2023‬ےکےیلانیکوطبردتسریریبوینآڈرٹیزےکااختنبیکوظنمرییکوجتزیدیےہ۔‬

‫اتسئ‬

‫ینپمکاےنپصصحدننکاگناکینپمکرپاےنپاامتعددرکےناکرکشہیادارکاناچیتہےہ۔مہہہتدلےسامتماوشنرسنوینپمکں‪،‬تمکحرشاتکداوروں‪،‬ویباپرویں‪،‬‬
‫سیکنوورزیٹیاڈنیاجنیچسکینشیمکآفاپاتسکناورکنیبدوتلاپاتسکنےسانیکامحتیاوررامنہیئرپرکشہیاکااہظررکےتںیہ۔مہ ینپمکےکارسفان اورےلمعےکتخس‬
‫تنحماوران یکنگلوکیھبرساےتہںیہ۔‬

‫وبرڈآفڈارئرٹکیزےکےیلاورانیکاجبنےس‬

‫ریچنیم‪/‬ڈارئرٹکی‬ ‫فیچازگیویٹیآسیف‬

‫‪Page 17 of 17‬‬
 NOTICE OF THE 23rd ANNUAL GENERAL MEETING (“AGM”)

NOTICE IS HEREBY GIVEN that the 23rd Annual General Meeting (“AGM”) of Pakistan Reinsurance
Company Limited (“the Company”)will be held at 14th Floor, PRC Towers, 32-A, Lalazar Drive, M.T.Khan
Road, Karachi, and virtually through the video-conference facility on Friday, April 28, 2023, at 11: 00 am,
to transact the following business:

ORDINARY BUSINESS:

1. To confirm the minutes of the 22nd Annual General Meeting of the Company held on 29th April, 2022.

2. To receive, consider and adopt the Audited Financial Statements for the year ended December 31,
2022 together with the Chairman’s review, Directors’ and Auditors’ reports thereon.

As required under section 223(7) of the Companies Act 2017, read with S.R.O. 389(I)/2023 dated
March 21, 2023, financial statements of the Company have been uploaded on the website of the
Company which can be downloaded from the following QR enabled Code or web-link:
https://www.pakre.org.pk/ms/investor-relations/financial-reports-by-year/2022.html

3. To consider and if thought fit to approve the payment of final cash dividend at the rate of 7.5 %i.e.
Rs. 0.75 per share of Rupees Ten (10.00) as recommended by the Board of Directors.

4. To appoint External Auditors and fix their remuneration for the year ending December 31, 2023. The
Audit Committee and the Board of Directors have recommended the name of M/S BDO Ibrahim &
Co, Chartered Accountants for re-appointment as auditors till the next Annual General Meeting.

ANY OTHER BUSINESS:

5. To transact any other business with the permission of the Chair.

By Order of the Board

Place: Karachi Sumeet Kumar

Dated: 7thApril, 2023 Company Secretary
 NOTICE OF THE 23rd ANNUAL GENERAL MEETING (“AGM”)

NOTES:

1. Closure of Share Transfer Book

The share transfer books of the Company shall remain closed for eight days i.e. from April 21, 2023,
to April 28, 2023; (both days inclusive) no transfer will be accepted for registration during the period.

2. Participation in the AGM proceeding via video conferencing facility

All shareholders/members interested in attending the AGM through a video-conferencing facility are
requested to register at https://forms.office.com/r/F62sFentqB by providing their Names, Folio
Numbers, Cell Numbers, CNICs / Passport numbers, and email addresses at least 48 hours prior to
meeting. A confirmation email for video link and login credentials will be shared to the shareholders
after due verification. Please note that login facility will remain open 15 minutes before the meeting
time to enable the participants to join the meeting.

Shareholders can also provide their comments and questions for the agenda items of the AGM at the
email address [email protected] at least 24 hours before the meeting schedule.

3. CDC Accountholders are advised to follow the following guidelines of the Securities and Exchange
Commission of Pakistan for attending the meeting physically:

a) In the case of individuals, the account holder or sub-account holder and/or the person whose
securities are in a group account and their registration details are uploaded as per the
Regulations, shall authenticate his/her identity by showing his/her original Computerized
National Identity Card (CNIC) or original passport at the time of attending the meeting.

b) In the case of a corporate entity, the Board of Director’s Resolution/ Power of attorney with
specimen signature of the nominee, shall be produced (Unless it has been provided earlier) at
the time of the meeting.

4. Appointing Proxies

a) A member entitled to attend and vote at this meeting may appoint another member as
his/her proxy to attend the meeting and vote for him/her. A proxy must be deposited at the
Company not less than 48 hours before the meeting and in case of default; a form of proxy
will not be treated as valid.

b) In the case of individuals, the account holder or sub-account holder and/or the person whose
securities are in a group and their registration details are uploaded as per the CDC
Regulation, shall submit the proxy form (provided at Company’s website) as per the above
requirement.
 NOTICE OF THE 23rd ANNUAL GENERAL MEETING (“AGM”)

c) The proxy form shall be witnessed by two persons whose names, addresses, and CNIC
numbers shall be mentioned on the form.

d) Attested copies of the CNIC or the Passport of the beneficial owners and the proxy shall be
furnished with the proxy form.

e) The proxy shall produce his/her original CNIC or original Passport at the time of the meeting.

f) In the case of a corporate entity, the Board of Directors’ Resolution/Power of attorney with
specimen signature shall be submitted (unless it has been provided earlier) along with proxy
form to the Company.

5. Updating Particulars

The shareholders are requested to promptly notify change in their address, if any, to the Company's
Share Registrar. In case of corporate entity, the shareholders are requested to promptly notify
change in their particulars of their authorized representative, if applicable.

6. PAYMENT OF CASH DIVIDENDS ELECTRONICALLY-COMPULSORY

Members of the Company are hereby requested to comply with the provisions of Section 242 of the
Companies Act, 2017 and provide the particulars of their bank accounts through E-Dividend Form
(annexed at the end of the annual report as well as available at the Company’s website:
www.pakre.org.pk) as dividends payable in cash shall only be paid through electronic mode directly
into the bank account designated by the entitled shareholders instead of, through the issuance of
Dividend Warrants. In the absence of bank account details or in case of incomplete details, the
Company will be constrained to withhold the payment of cash dividend to those shareholders who
have not provided the same.

7. PAYMENT DEDUCTION OF INCOME TAX FROM DIVIDEND

a. Pursuant to the provisions of the Finance Act, 2019 effective July 1, 2019, the rates of deduction
of income tax from dividend payments under the Income Tax Ordinance have been revised as
follows:

1) Persons appearing on the Active Taxpayers List (ATL) 15%

2) Persons not appearing in the Active Taxpayers List (ATL) 30 %

Shareholders, who are filers, are advised to make sure that their names are entered into latest
Active Tax Payers List (ATL) provided on the website of FBR at the time of dividend payment,
otherwise they shall be treated as non-filers and tax on their cash dividend will be deducted at
the rate of 30% instead of 15%.
 NOTICE OF THE 23rd ANNUAL GENERAL MEETING (“AGM”)

b. As per FBR Circulars C. No.1 (29) WHT/2006 dated 30 June 2010 and C. No.1 (43) DG
(WHT)/2008-Vol. 1166417-R dated 12 May 2015, the valid exemption certificate is mandatory to
claim exemption of withholding tax U/S 150 of the Income Tax Ordinance, 2001 (tax on dividend
amount) where the statutory exemption under clause 47B of Part-IV of Second Schedule is
available. The shareholders who fall in the category mentioned in above clause and want to avail
exemption U/S 150 of the Ordinance, must provide valid Tax Exemption Certificate to our Share
Registrar M/s. CDC Pakistan Limited before book closure otherwise tax will be deducted on
dividend as per applicable rates.

c. Further, according to clarification received from the Federal Board of Revenue (FBR),
withholding tax will be determined separately on the ‘Filer/Non-Filer’ status of Principal
shareholder as well as joint holder(s) based on their shareholding proportions, in case of joint
accounts.

In this regard, all shareholders who hold shares jointly are requested to provide shareholding
Proportions of Principal shareholders and Joint holder(s) in respect of shares held by them (only
if not already provided) to our Shares Registrar, in writing as follows:

Company Folio/CDS Principal Shareholder Joint Shareholder

Name Account # Name and Shareholding Name and Shareholding
CNIC Proportion CNIC Proportion
Number (No of Shares) number (No of Shares)

The required information must reach our Shares Registrar within 10 days of this notice;
otherwise, it will be assumed that the shares are equally held by the principal shareholder and
Joint holder(s).

d. For any query/problem/information, the investors may contact the Company and/or the Share
Registrar at the following phone numbers and email address. The Corporate Secretariat
Department can be reached at telephone number (+92-21) 99202908-14 (Ex-220) and email
address [email protected] . Alternatively, Share Registrar services can be accessed through
the contact numbers 0800-23275 and email address [email protected].

e. Corporate shareholders having CDC accounts are required to have their National Tax Number
(NTN) updated with their respective participants, whereas corporate physical shareholders
should send a copy of their NTN certificate to the Company or CDC Pakistan Limited.
Shareholders while sending NTN or NTN certificates, as the case may be, must quote the
Company name and their respective folio numbers. Without the NTN Company would not be in
a position to check filer status on the ATL and hence higher tax of 30% may be applied in such
cases.

f. Members who desire to stop the deduction of Zakat from their dividends may submit a
declaration on non-judicial stamp paper duly signed as required under the law (if not submitted
earlier).
 NOTICE OF THE 23rd ANNUAL GENERAL MEETING (“AGM”)

8. CONSENT FOR VIDEO CONFERENCING FACILITY

Pursuant to the provision to the Companies Act, 2017 the members can also avail the video
conferencing facility. In this regard, please fill in the following and submit at registered address of
the Company at least 10 days before the holding of annual general meeting. If the Company receives
consent from members holding aggregate 10 % or more shareholding residing at the geographical
location to participate in the meeting, the Company will arrange video conference facility in the city
subject to availability of such facility in that city.

I/ We, ____________of_________________________, being a member of Pakistan Reinsurance

Company Limited holder of_______ ordinary share(s) as per registered folio / CDC no.
_____________hereby opt for video conferencing facility.

9. UNCLAIMED/ UNPAID DIVIDENDS AND SHARE CERTIFICATES

As per Section 244 of the Companies Act, 2017 shares/dividends which remain unclaimed or unpaid
for a period of three years from the date these have been due and payable to be vested with the
Federal Government. In this regard, Pakistan Reinsurance Company Limited had already sent
individual letters earlier, on the available addresses through our Share Registrar "CDC Share
Registrar Services Limited, CDC House, 99-B, Block B, SMCHS, Main Sharah-e-Faisal, Karachi"
requesting therein to claim their shares/dividends within 90-days of the letter. After that, as per SEC
directives a final notice was also published in daily Business Recorder and daily Express dated June
12, 2019. In this regard, the detail of unclaimed/undelivered shares and dividends is available on the
Company’s website.

Shareholders of the Company, regardless of their status as former or current members, are humbly
requested to revisit the Company's website and ascertain if there are any unclaimed or undelivered
shares or dividends under their name. If any such circumstances arise, our Share Registrar, CDC
Share Registrar Services Limited, can be contacted for lodging a claim through an application
including the Folio number, present address, and a valid CNIC copy at the address mentioned above.

10. CONVERSION OF PHYSICAL SHARES INTO BOOK ENTRY FORM

In compliance with section 72 of the Companies Act, 2017 and SECP's letter No. CSD/ED/Misc./2016-
639-640 dated March 26, 2021, listed companies are required to replace existing physical shares
issued by them into the Book-Entry form. Given the above requirement, shareholders of the
Company having physical folios/ share certificates are requested to convert their shares from the
physical form into Book-Entry form as soon as possible. Conversion of physical shares into Book-
Entry form would facilitate the shareholders in many ways, i.e. safe custody of shares, readily
available market for instant sale and purchase of shares, eliminate the risk of loss & damage, easy &
secure transfer with lesser formalities as compared to physical shares. The Company's shareholders
may contact Share Registrar of the Company [i.e., M/s. CDC Pakistan Limited] for assistance in
converting physical shares into Book-Entry Form.
 NOTICE OF THE 23rd ANNUAL GENERAL MEETING (“AGM”)

11. MERGER OF DIFFERENT FOLIOS INTO ONE FOLIO

As per record, some of the shareholders are maintaining more than one folio under the same
particulars. Carrying two different folios may be a hassle for the shareholders to reconcile and
receive different benefits in the shape of dividends/bonus. In order to provide better services and
convenience, such shareholders are requested to send requests to the Company's Share Registrar to
merge their folios into one folio.

12. SUBMISSION OF COPIES OF CNIC NOT PROVIDED EARLIER

Non-CDC Individual Shareholders are once again reminded to submit a copy of their valid CNICs to
Share Registrar, if not provided earlier to the Company's Share Registrar, M/s. CDC Pakistan Limited.

Pakistan Reinsurance Company Limited

PRC Towers, 32-A, Lalazar Drive, M.T. Khan Road, P.O. Box No. 4777 Karachi, Pakistan,
Telephone: 021-99202908-14 Fax: 021-99202921-22,
Email: [email protected], Website: www.pakre.org.pk
Statement of Compliance with the Public Sector Companies
(Corporate Governance) Rules,2013, Listed Companies (Code of
Corporate Governance) Regulations, 2019 and Code of Corporate
Governance for Insurers, 2016.

Name of Company PAKISTAN REINSURANCE COMPANY LIMITED

Name of Line Ministry MINISTRY OF COMMERCE (GoP)
For the year ended DECEMBER 31, 2022

i. This statement presents the overview of the compliance with the Public Sector
Companies (Corporate Governance) Rules, 2013 (hereinafter called “the Rules”) issued
for the purpose of establishing a framework of good governance, whereby a public sector
company is managed in compliance with the best practices of public sector governance.

ii. The Company has complied with the provisions of the Rules in the following manner:

Y N
Sr. Rule
Provision of the Rules
No. No. Tick the relevant box

1. The independent directors meet the criteria of independence, as

defined under the Rules. 2(d) Y
2. The Board has at least one-third of its total members as independent
directors. At present the Board includes:

Category Name Date of

Appointment
Dr. Musleh-ud-Din 16-03-2017
Independent / Non
Executive Mr. Shoaib Mir 17.08.2022
Directors
3(2) Y
Mrs. Zara Shaheen Awan 29.10.2021
Mr. Mumtaz Ali Rajper 31.12.2019
Non-Executive
Directors Mr. Muhammad Rashid 20.09.2021
Dr. Kausar Ali Zaidi 04.09.2020
Executive
Mr. Farman Ullah Zarkoon 18.08.2022
Directors

3 The directors have confirmed that none of them is serving as a

director on more than five public sector / Listed companies 3(5) Y
simultaneously, except their subsidiaries.
4 The appointing authorities have applied the fit and proper criteria
given in the Annexure to the Rules in making nominations of the
persons for election as Board Members under the provisions of the 3(7) Y
Act.
5 The Chairman of the Board is working separately from the Chief
Executive of the Company. 4(1) Y

6 The Chairman has been elected by the Board of directors except

where Chairman of the Board has been appointed by the 4(4) Y
Government
7 The Board has evaluated the candidates for the position of the chief
executive on the basis of the fit and proper criteria as well as the
guidelines specified by the Commission. 5(2) Y
(Not applicable where the chief executive has been nominated by the
Government)

Page 1 of 8
8 (a) The Board has prepared a "Code of Conduct" to ensure that
professional standards and corporate values are in place.

(b) The Board has ensured that appropriate steps have been taken to
disseminate it throughout the company along with its supporting
policies and procedures, including posting the same on the 5(4) Y
company’s website (www.pakre.org.pk)

(c) The Board has set in place adequate systems and controls for the
identification and redressal of grievances arising from unethical
practices.

9 The Board has established a system of sound internal control, to

ensure compliance with the fundamental principles of probity and
propriety; objectivity, integrity and honesty; and relationship with 5(5) Y
the stakeholders, in the manner prescribed in the Rules.
10 The Board has developed and enforced an appropriate conflict of
interest policy to lay down circumstances or considerations when a 5(5)(b)
person may be deemed to have actual or potential conflict of Y
(ii)
interests, and the procedure for disclosing such interest.
11 The Board has developed and implemented a policy on 5(5)(b)
anticorruption to minimize actual or perceived corruption in the (vi) Y
company.
12 The Board has ensured equality of opportunity by establishing open
and fair procedures for making appointments and for determining 5(5)(c)
terms and conditions of service. (ii) Y

13 The Board has ensured compliance with the law as well as the
company’s internal rules and procedures relating to public
5 (5) (c)
procurement, tender regulations, and purchasing and technical Y
(iii)
standards, when dealing with suppliers of goods and services.

14 The Board has developed a vision or mission statement and

corporate strategy of the Company. 5(6) Y

15 The Board has developed significant policies of the company. A

complete record of particulars of significant policies along with the
dates on which they were approved or amended has been 5(7) Y
maintained.
16 The Board has quantified the outlay of any action in respect of any
service delivered or goods sold by the Company as a public service
obligation, and has submitted its request for appropriate 5(8) Not applicable
compensation to the Government for consideration.
17 The Board has ensured compliance with policy directions
requirements received from the Government. 5(11) Y

18 (a) The Board has met at least four times during the year.
6(1) Y
(b) Written notices of the Board meetings, along with agenda duly
approved by the Chairman, were circulated at least seven days
before the meetings. 6(2) Y

(c) The minutes of the meetings were appropriately recorded and

circulated. 6(3) Y

19 The Board has monitored and assessed the performance of senior

management on annual basis. And held them accountable for
accomplishing objectives, goals and key performance indicators set 8 (2) N
for this purpose.

Page 2 of 8
20 The Board has reviewed and approved the related party transactions
placed before it after recommendations of the audit committee. A
party wise record of transactions entered into withthe related parties 9 Y
during the year has been maintained.

21 (a) The Board has approved the profit and loss account for, and
balance sheet as at the end of the first, second and third quarter of
10 Y
the year as well as the financial year end.

(b) In case of listed PSCs, the Board has prepared half yearly
10 Y
accounts and undertaken limited scope review by the auditors.

(c) The Board has placed the annual financial statements on the
company's website. 10 Y
22 All the board members underwent an orientation course arranged by
the company to apprise them of the material developments and
information as specified in the Rules. 11 Y
23 (a) The Boardhas formed the requisite committees, as specified in
the Rules. 12 Y

(b)All the committees were provided with written terms of reference

defining their duties, authority and composition. 12 Y

(c) The minutes of the meetings of the committees were circulated to

all the board members. 12 Y

(d) The committees were chaired by the following non-executive

directors:

No. of
S.No Committees Name of Chair
Directors
1 Audit Committee Four Dr. Musleh-ud-Din
2 Investment Committee Five Mr. Shoaib Mir
* Ethics, Human Resource
3 & Remuneration / Five Mr. Mumtaz Ali Rajper
Nomination Committee
4 Procurement Committee Four Dr. Kausar Ali Zaidi
Underwriting /
5 Two Dr. Kausar Ali Zaidi
Reinsurance Committee
Claim Settlement
6 Three Mr. Mumtaz Ali Rajper
Committee 12 Y
Risk Management,
7 Compliance and Legal Four Mr. Muhammad Rashid
Committee
*The Board has assigned the responsibility and functions of Nomination
Committee to the Ethics, HR & Remuneration Committee as per guidelines
provided in COCG for Insurers, 2016.
24 The Board has approved appointment of Chief Financial Officer,
Company Secretary and Chief Internal Auditor, by whatever name
called, with their remuneration and terms and conditions of 13 Y
employment.
25 The Chief Financial Officer and the Company Secretary have
requisite qualifications prescribed in the Rules. 14 Y

26 The Company has adopted International Financial Reporting

Standards notified by the Commission in terms of sub-section (1) of 16 Y
Section 225 of the Act.
27 The Directors' Report for this year has been prepared in compliance
with the requirements of the Act and the Rulesand fully describes 17 Y
the salient features required to be disclosed.

Page 3 of 8
28 The Directors, CEO and Executives or their relatives, are not,
directly or indirectly, concerned or interested in any contract or
arrangement entered into by or on behalf of the Company except 18 Y
those disclosed to the Company.

29 (a) A formal and transparent procedure for fixing the remuneration

packages of individual directors has been set in place and no director
is involved in deciding his own remuneration.
19 Y
(b) The annual report of the company contains criteria and details of
remuneration of each director.
30 The financial statements of Company were duly endorsed by the
Chief Executive and Chief Financial Officer, before consideration 20 Y
and approval of the audit committee and the Board.
31 The board has formed an audit committee, with defined and written
terms of reference and having the following members with the 21(1) Y
Chairman as an Independent Director:

S.No. Name of Member Category Professional

Background
1 Non-executive/
Dr. Musleh-ud-Din Ph.D(Economics)
Independent
2 Dr. Kausar Ali Zaidi Non-executive MBBS
3 Mr. Muhammad Rashid Non-executive CIA&FCMA
4 Non-executive/
Mr. Shoaib Mir MBBS
Independent
5 Mr. Asif Kamal, Chief Secretary of the AFA, CICA &
Internal Auditor Committee MIPA
The Chief Executive and Chairman of the Board are not Members of
the Audit Committee. 21(2) Y
32 (a) The chief financial officer, the chief internal auditor, and a
representative of the external auditors attended all meetings of the
audit committee at which issues relating to accounts and audit were 21(3) Y
discussed.

(b) The audit committee met the external auditors, at least once a
year, without the presence of the chief financial officer, the chief 21(3) Y
internal auditor and other executives.

(c) The audit committee met the chief internal auditor and other
members of the internal audit function, at least once a year, without
the presence of chief financial officer and the external auditor. 21(3) Y

33 (a) The board has set up an effective internal audit function which
has an audit charter, duly approved by the audit committee, 22 Y

(b) The chief internal auditor has requisite qualification and

22 Y
experience prescribed in the Rules.

(c)The internal audit reports have been provided to the external 22 Y

auditors for their review.
34 The external auditors of the Company have confirmed that the firm
and all its partners are in compliance with the International
Federation of Accountants (IFAC) Guidelines on Code of Ethics as 23(4) Y
applicable in Pakistan.
35 The auditors have confirmed that they have observed applicable
guidelines issued by IFAC with regards to provision of non-audit 23(5) Y
services.

Page 4 of 8
Certain additional disclosures, required under the Listed Companies (Code of Corporate
Governance) Regulations, 2019:

36 The total number of directors are Seven (7) as per the following:
a. Male: Six
b. Female: One

37 All the powers of the board have been duly exercised and decisions on relevant matters have
been taken by board/ shareholders as empowered by the relevant provisions of the Act and
these Regulations.

38 The meetings of the board were presided over by the Chairman and, in his absence, by a
director elected by the board for this purpose. The board has complied with the requirements
of the Act and the Regulations with respect to frequency, recording and circulating minutes
of meeting of board.

39 The Board has arranged Directors’ Training program for all its members.

40 The frequency of meetings (quarterly / half yearly / yearly) of the committee were as per
following:

S.No. Committees Meeting Date

February 4, 2022
April 5, 2022
1 Audit Committee April 27, 2022
August 27, 2022
October 28, 2022
February 4, 2022
March 10, 2022
April 26, 2022
May 27, 2022
2 Ethics,HR & Remuneration Committee
August 19, 2022
September 16, 202
October 27, 2022
November 29, 2022
May 12, 2022
3 Investment Comm. August 5, 2022
November 30, 2022
May 18, 2022
4 Risk Management, Compliance and Legal August 23, 2022
November 30, 2022
April 5, 2022
August 4, 2022
5 Claims Settlement
September 15, 2022
December 1, 2022
March 4, 2022
6 Underwriting / Reinsurance Comm. May 29, 2022
July 29, 2022
March 3, 2022
7 Procurement Committee June 3, 2022
December 23, 2022

Page 5 of 8
 41 We confirm that all other requirements of the Regulations 3, 6, 7, 8, 27,32, 33 and 36 of the
Regulations have been complied with; and

42 Explanation for non-compliance with requirements, other than regulations 3, 6, 7, 8, 27,32,

33 and 36 are below (if applicable):

Further disclosures, required under the Code of Corporate Governance for Insurers,
2016:

43 All the resident directors of the Company are registered as taxpayers and none of them has
defaulted in payment of any loan to a banking company, a Developing Financial Institution
(DFI) or a Non-Banking Financial Institution (NBFI) or being a member of stock exchange,
has been declared as a defaulter by that stock exchange.

44 No casual vacancy occurred on the Board during the year which required to be filled up by
the Directors.

45 The Company has complied with all the corporate and financial reporting requirements of
the Code of Corporate Governance for Insurers, 2016.

46 The Board has formed the following Management Committees:

Underwriting / Reinsurance Committee

Name of the Member Category
Dr. Kausar Ali Zaidi Chairman
Chief Executive Officer Member
Executive Director (Underwriting) Secretary

Claim Settlement Committee

Name of the Member Category
Mr. Mumtaz Ali Rajper Chairman
Mr. Shoaib Mir Member
Chief Executive Officer Member
Head of Claims Department Secretary

Risk Management, Compliance and Legal Committee

Name of the Member Category
Mr. Muhammad Rashid Chairman
Dr. Kausar Ali Zaidi Member
Mrs. Zara Shaheen Awan Member
Chief Executive Officer Member
Head of Risk Management In Mandatory Attendance
Compliance Officer In Mandatory Attendance
Head of Legal In Mandatory Attendance
Company Secretary Secretary

Page 6 of 8
47. The Board has formed the following Board Committees:

Audit Committee
Name of the Member Category
Dr. Musleh-ud-Din Non-executive / Independent
Mr. Shoaib Mir Non-executive / Independent
Dr. Kausar Ali Zaidi Non-executive
Mr. Muhammad Rashid Non-executive
Mr. Asif Kamal,Chief Internal Auditor Secretary

Ethics, Human Resource & Remuneration/Nomination Committee

Name of the Member Category
Mr. Mumtaz Ali Rajper Chairman
Dr. Kausar Ali Zaidi Member
Dr. Musleh-Ud-Din Member
Mrs. Zara Shaheen Awan Member
Chief Executive Officer Member
Head of HR Department Secretary

Investment Committee
Name of the Member Category
Mr. Shoaib Mir Chairman
Mr. Muhammad Rashid Member
Mr. Mumtaz Ali Rajper Member
Dr. Musleh-ud-Din Member
Chief Executive Officer Member
Chief Financial Officer Secretary

Procurement Committee
Name of the Member Category
Dr. Kausar Ali Zaidi Chairman
Mr. Mumtaz Ali Rajper Member
Mrs. Zara Shaheen Awan Member
Chief Executive Officer Member
Head of Administration Secretary

48 All Meetings of the Board Committees were held twice in the year except that of Audit
Committee which met as per the requirements of clause (liv) of the Code prior to
approval of interim and final results of the insurer and as required by the Code of
Corporate Governance for Insurers, 2016. The terms of references of the Committees
have been formed and advised to the Committees for compliance.

49 The Chief Financial Officer and the Head of Internal Audit possess such qualifications
and experience as is required under the Code of Corporate Governance for Insurers,
2016. Moreover, the following persons heading the underwriting, claim, reinsurance, risk
management and grievance functions / departments possess qualification and experience
of direct relevance to their respective functions, as required under Section 12 of the
Insurance Ordinance, 2000 (Ordinance No.XXXIX of 2000).

Page 7 of 8
 Key Officers in Management

Name of the Person Designation

1. Mr. Farman Ullah Zarkoon Chief Executive Officer
2. Mr. Muhammad Junaid Moti, Head of Underwriting/ Reinsurance
3. Mr. Asif Kamal Chief Internal Auditor
4. Mr. Syed Aamir Chief Financial Officer
5. Mr. Sumeet Kumar Company Secretary
6. Mr. Arham Rahim Head of Human Resources
7. Ms. Hina Gul Head of Northern Zonal Office
8. Mr. Tameez-ud-Din General Manager (Northern Zonal Office)
9. Mr. Bashir Ahmad Compliance Officer / HoD (Risk Management)
10. Mr. Muhammad Rafique Head of IT
11. Mr. Inayat Ullah Head of Administration
12. Mr. Muhammad Naveed Iqbal Head of Investment
13. Mr. Hans Hussain Soomro Head of Accounts
14. Mr. Zohaib Hasan Head of Data Processing
15. Ms. Erum Nadeem Head of Legal Department
16. Mr. Muhammad Asif Ghafoor Procurement Specialist
17. Muhammad Akbar Manager (Accounts)
18. Mr. Muhammad Amin Head of Claims
19. Mr. Muhammad Ahmed Head of Re-takaful

50 The Board ensures that the investment policy of the insurer has been drawn up in
accordance with the provisions of the Code of Corporate Governance for Insurers, 2016.

51 The Board ensures that the risk management system of the insurer is in place as per the
requirements of the Code of Corporate Governance for Insurers, 2016.

52 The Company has set up a risk management function / department, which carries out its
tasks as covered under the Code of Corporate Governance for Insurers, 2016.

53 The Board ensures that as part of the risk management system, the insurer gets itself
rated from JCR-VIS (credit rating agency) which is being used by its risk management
function / department and the respective Committee as a risk monitoring tool. The rating
assigned by the said rating agency was AA+ in December 30, 2022.

54 The Board has set up a grievance department/function, which fully complies with the
requirements of the Code of Corporate Governance for Insurers, 2016.

55 We confirm that all other material principles contained in the Code of Corporate
Governance for Insurer, 2016 have been complied with.

CHIEF EXECUTIVE OFFICER CHAIRMAN

Page 8 of 8
REVIEW REPORT TO THE MEMBERS ON THE STATEMENT OF COMPLIANCE WITH THE CODE OF
CORPORATE GOVERNANCE, PUBLIC SECTOR COMPANIES (CORPORATE GOVERNANCE) RULES, 2013,
LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019 AND CODE OF
CORPORATE GOVERNANCE FOR INSURERS, 2016

We have reviewed the enclosed Statement of Compliance with the Public Sector Companies (Corporate
Governance) Rules, 2013, Code of Corporate Governance for Insurers, 2016 and, Listed Companies (Code
of Corporate Governance) Regulations, 2019 (referred to as ‘the Codes’) prepared by the Board of
Directors of Pakistan Reinsurance Company Limited for the year ended December 31, 2022 to comply with
the Codes.

The responsibility for compliance with the Codes is that of the Board of Directors of the Company. Our
responsibility is to review, whether the Statement of Compliance reflects the status of the Company’s
compliance with the provisions of the Codes, and report if it does not, and to highlight any non-compliance
with the requirements of the Codes. A review is limited primarily to inquiries of the Company’s personnel
and review of various documents prepared by the Company to comply with the Codes.

As part of our audit of the financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective audit
approach. We are not required to consider whether the Board of Directors’ statement on internal control
covers all risks and controls or to form an opinion on the effectiveness of such internal controls, the
Company’s corporate governance procedures and risks.

The Codes require the Company to place before the Audit Committee, and upon recommendation of the
Audit Committee, place before the Board of Directors for their review and approval its related party
transactions and also ensure compliance of this requirement of section 208 of the Companies Act, 2017.
We are only required and have ensured compliance of this requirement to the extent of the approval of
the related party transactions by the Board of Directors upon recommendation of the Audit Committee.
We have not carried out procedures to assess and determine the Company’s process for identification of
related parties and that whether the related party transactions were undertaken at arm's length price or
not.

Following instances of non-compliance with the requirements of the Codes were observed which are not
stated in the statement of compliance:

Page – 1
 Listed Companies (Code of Corporate Governance) Regulations, 2019, Public Sector Companies
(Corporate Governance) Rules, 2013, & Code of Corporate Governance for insurances, 2016
S.NO REFERENCE DESCRIPTION
The Chairman of the HR committee is not an
1 28(2)-Listed Co. COCG-2019
independent director.
14(vi)-Listed Co. COCG-2019, Internal audit reports were not presented in The
2 7(2b)-Public Sector Co. CG-2013, board of directors meeting
xviii(d)-COCG for insurance-2016
37(v)-Listed Co. COCG-2019, Internal auditor reports were not provided to the
3 32(2)-Public Sector Co. CG-2013, external auditors for review
lix-COCG for insurance-2016
Majority of independent directors are not presented
in the (i) Procurement (ii) Ethics, Human Resource &
4 12(2)-Public Sector Co. CG-2013
Remuneration/Nomination Committee (iii)
Investment Committee.

Based on our review, except for the above instances of non-compliance, nothing has come to our attention
which causes us to believe that ‘Statement of Compliance’ does not appropriately reflect the Company’s
compliance, in all material respects, with the best practices contained in the Codes as applicable to the
Company for the year ended December 31, 2022.

Further, we would like to highlight below instance of non-compliance with requirements of the Codes as
reflected in the statement of compliance:

Non-Compliance of statement of compliance

S.No. Rule No. Description
1. 8(2) The Board has not monitored and assessed the performance of senior
management on annual basis and held them accountable for accomplishing
objectives, goals and key performance indicators set for this purpose.

KARACHI

DATED: APRIL 02, 2023 CHARTERED ACCOUNTANTS

Engagement Partner: Tariq Feroz Khan

Page-2
Explanation for Non-Compliance with Code of Corporate Governance
We confirm that all other material requirements envisaged in the Rules have been complied
with, except for the following, towards which reasonable progress is being made by the
Company to seek compliance by the end of next accounting year:

PUBLIC SECTOR COMPANIES (CORPORATE GOVERNANCE) RULES, 2013, LISTED

COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019 AND CODE OF
CORPORATE GOVERNANCE FOR INSURERS, 2016.
S.r Rule/Sub-rule No. Reason for Non-compliance Future Course of Action
No.
1 28(2)-Listed Co. The Company was short of required Nominations of independent
COCGG-2019 number of independent Directors to directors by MoC were received in
rotate simultaneously in different September 2022, and necessary
Committees, keeping in view steps are being taken by the Board
different codal requirements. to ensure compliance with the
requirement of the law.
2 14(vi)-Listed Co. The Internal Audit Reports for the The reports will be presented to the
COCG-2019, year 2022 were presented for the Board for its review and
review of the Board Audit Committee concurrence in the year 2023.
7(2b)-Public (BAC) in each meeting held in the
Sector Co. CG- year 2022, however, on account of
2013, other urgent matters on agenda and
due to paucity of time, the reports
xviii (d)-COCG for were not reviewed, except
insurance-2016 1st quarter’s report.
3 37(v)-Listed Co. The Internal Audit Reports for the The reports will be shared with the
COCG-2019, 32(2) year 2022 were presented for the statutory auditors subsequent to the
review of the Board Audit Committee deliberations and review of the
-Public Sector Co. (BAC) in each meeting held in the Board Audit Committee.
CG-2013, year 2022, however, on account of
Intern exterr other urgent matters on agenda and
lix-COCG for due to paucity of time, the reports
insurance-2016 were not reviewed, except
1st quarter’s report.
4 12(2)- Public The Company was short of required Nominations of independent
Sector Co. CG- number of independent Directors to directors by MoC were received in
2013 rotate simultaneously in different September 2022, and necessary
Committees, keeping in view steps are being taken by the Board
different codal requirements. to ensure compliance with the
requirement of the rule.

Page 1 of 2
Non-Compliance of Statement of Compliance
S.r Rule No. Reason for Non-compliance Future Course of Action
No.
1 8(2) Due to employee separations and The matter is being presented to the
retirements within the company over Board and the future course of
the course of the year, the action would be in sync with
performance evaluation of senior decision of the Board in light of the
management was not conducted. relevant regulatory provision of law.
However, the matter of performance
evaluation of incumbent senior
management is being placed in
upcoming Board meeting in
compliance with the
Rules/Regulations.

CHIEF EXECUTIVE OFFICER CHAIRMAN

Page 2 of 2
 DRAFT

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PAKISTAN REINSURANCE COMPANY LIMITED

Report on the Audit of the Financial Statements

Qualified Opinion

We have audited the annexed financial statements of PAKISTAN REINSURANCE COMPANY LIMITED (the
Company), which comprise the statement of financial position as at December 31, 2022, the statement of
profit and loss account, the statement of comprehensive income, the statement of cash flows, the
statement of changes in equity for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies and other explanatory information, and we state that we
have obtained all the information and explanations which, to the best of our knowledge and belief, were
necessary for the purposes of the audit.

In our opinion and to the best of our information and according to the explanations given to us, except for
the effects of the matters discussed in the Basis for Qualified Opinion section of our report, the statement
of financial position, the statement of profit and loss account, the statement of comprehensive income,
the statement of cash flows and the statement of changes in equity together with the notes forming part
thereof conform with the accounting and reporting standards as applicable in Pakistan and give the
information required by the Insurance Ordinance, 2000 and the Companies Act, 2017(XIX of 2017), in the
manner so required and respectively give a true and fair view of the state of the Company's affairs as at
December 31, 2022 and of the profit, its other comprehensive income, its cash flows and the changes in
equity for the year then ended.

Basis for Qualified Opinion

1. Receivable From Sindh Revenue Board (SRB) and the Related Litigation

As disclosed in note 15 and 37.2 to the financial statements, an amount of Rs. 2,573.89 million (2021:
Rs. 2,573.89 million) is receivable from Sindh Revenue Board (SRB) which was recovered by SRB against
the sales tax liability on reinsurance services. The Company has recorded this amount as an asset,
however the Company could not substantiate any control over the underlying asset and the flow of
economic benefits is remote due to ongoing Court case. Had the Company not recorded this asset,
total assets, accumulated profit, shareholders’ equity and solvency would have been reduced by the
same amount accordingly.

2. Unreconciled Balances

As stated in note 16 and 32 to the financial statements, amount due from other insurance companies
on account of treaty and facultative business includes gross amount of Rs. 16,792.10 million and net
amount of Rs. 16,626.78 million and amount due to other insurance companies include an amount of
Rs 40.11 million which remain unreconciled as of the reporting date. The Company is in the process
of reconciling these balances. Due to pending reconciliations relating to the above balances, resultant
adjustment and consequential impact thereon, if any, on these financial statements remain
unascertained.

Page - 1
3. Treaty- Proportional Business

As disclosed in note 16, 17, 18, 25, 26, 27, 38, 39, and 55 to the financial statements, certain account
balances and class of transactions have been recorded against treaty proportional business. We were
not provided the details and supporting documentation of the premium / claims of the ceding
insurance companies except statutory quarterly returns. The Company does not have any system and
controls to verify such premium and claims. Consequently, we were unable to verify and determine
whether any adjustments to these amounts were necessary.

4. Investment Property

As disclosed in note 11 to the financial statements, the Company carries its investment properties
at fair value. International Accounting Standard (IAS-40) “Investment Property requires an entity
following fair value model to reassess the fair values on a continuing basis. The management has
not carried out any exercise to determine the fair values and its resultant impact as of the
reporting date. Accordingly, resultant adjustment and consequential impact thereon, if any, on
these financial statements remain unascertained.

Material Uncertainty Relating To Going Concern

We draw attention to note 1.2 to the financial statements, which indicates that as of the reporting date,
the Company is in breach of the minimum solvency requirement as prescribed under Section 36 of the
Insurance Ordinance, 2000 and related rules. Such breach indicates that a material uncertainty exists that
may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not
further modified in respect of this matter.

Emphasis of Matter

1. We draw attention to note 60 to the financial statements, which indicates that in terms of Section 36
of the Insurance Ordinance, 2000, the Company is required to maintain the minimum solvency ratio
at all times to be computed in a manner as prescribed under the above section and related rules. As
of the reporting date, the Company is in breach of such solvency requirement. Our opinion is not
further modified in respect of this matter.

2. We draw attention to note 37.1 to the financial statements, which provide details regarding
contingencies in respect of which decisions are pending. Our opinion is not further modified in respect
of this matter.

Key Audit Matters

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

Page - 2
In addition to the matters described in the Basis for Qualified Opinion section and material uncertainty
relating to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Following are the Key audit matters:

How the matter was addressed in our audit

S. No Key audit matters
report
1. Revenue Recognition -Facultative
premium earned
Our audit procedures to address this matter
Refer notes 5.12 and 38 to the financial included the following:
statements for accounting policies and
details in respect of revenue recognition.
The Company recognizes facultative • Obtained an understanding, including the
premium earned from facultative design and implementation of internal
reinsurance policies representing 73% of controls over process of capturing,
gross premium written. processing in and recording of facultative
premium income.
We identified revenue recognition as a key
audit matter as it is one of the key
performance indicators of the Company and • Assessed the appropriateness of the
because of the potential risk that revenue company’s accounting policies for
transactions may not be accurately recording of facultative premiums in line
recorded, recognized in the appropriate
with the requirements of applicable
period and not properly disclosed in the
financial statements. laws, accounting and reporting
standards.

• Tested the policies on sample basis

where policies were written close to the
year-end and subsequent to the year-
end, and evaluated that these were
recorded in the appropriate accounting
period.

• Tested the facultative premium recorded

on sample basis to test the accuracy from
the underlying policies issued to
insurance contract holders.

• Recalculated the unearned portion of

facultative premium and ensured that
appropriate amount has been recorded
Page - 3
 How the matter was addressed in our audit
S. No Key audit matters
report
as provision for unearned premium in
liabilities.

• Evaluated that adequate disclosures have

been made for facultative premium as
the applicable laws and accounting and
reporting standards.

2. Valuation of outstanding claims including

claims incurred but not reported
Refer note 5.6 and 25 to the financial Our audit procedures to address this matter
statements for accounting policy and details included the following:
in respect of facultative claim liabilities.
• Assessed the appropriateness of the
The Company’s facultative claim liabilities Company’s accounting policy for
represent approximately 35% of the recording of facultative claims in line
Company’s total liabilities, both with the requirements of applicable laws
Conventional and Takaful. Valuation of and accounting and reporting standards.
these liabilities involves significant
judgment because it requires a number of • Obtained an understanding of the
assumptions to be made with high Company’s policies and procedures
estimation uncertainty such as loss ratios, including the design and implementation
trend of historical claims and estimates of of internal controls over the capturing,
the frequency and severity of claims. processing and recording of information
Facultative claim liabilities are recognized related to claims.
on intimation of the insured event based on
management judgment and estimate. • Performed test of details and test of
controls on sample basis to evaluate
The Company maintains provision for IBNR whether the facultative claims settled
claims based on the advice of an during the year end and outstanding at
independent actuary. The actuarial the year-end are appropriately recorded
valuation process involves significant in accordance with the requirements of
judgment and the use of actuarial company’s policies and insurance
assumptions. regulations.

Based on the above factors, we have • Assessed the competence, capability and
considered it as a key audit matter. objectivity of the actuary involved by the
company to value IBNR reserves for
facultative claims.

Page - 4
 How the matter was addressed in our audit
S. No Key audit matters
report

• Reviewed the valuation report of

management actuary to:

- Understand the basis and

methodology used for such valuation.
- Evaluate the completeness and
accuracy of source data used for the
purpose of valuation.

• Involved an external actuarial specialist

to evaluate the:
- Relevance and reasonableness of
assumptions of management expert’s
findings and conclusions and their
consistency with other evidence;
- The relevance and reasonableness of
assumptions and methods used;
- The relevance of the source data
used.

• Evaluated the adequacy of disclosures

given on outstanding claims including
IBNR as per the insurance regulations and
applicable accounting and reporting
standards.
3. Retirement Benefits Plans
Please refer notes 5.8 and 28 to the Our audit procedures to address this matter
financial statements. The company included the following:
operates various defined benefit plans. The
Company’s obligation in respect of these
plans as at December 31, 2022 amounted to • Assessed the competence and objectivity
Rs. 3,630.7 million. of the actuary involved by the Company
to value the obligation under the plan.
Valuation of these plans require significant
level of judgement and technical expertise
• Reviewed the actuarial valuation reports
to select appropriate valuation
assumptions. Changes in the key to:
assumptions (discount rate, salary increase
rate, retirement age and mortality rate
etc.) may have a material impact on the

Page - 5
 How the matter was addressed in our audit
S. No Key audit matters
report
valuation of these obligations under the - Understand the basis and
retirement plans. methodology used for such
valuation
Based on the above factors, we have
considered this as a key audit matter.
- Evaluate the competences and
accuracy of source data used for the
purposes of valuation.

• Involved our auditor’s external expert

to:
- Relevance and reasonableness of
management expert’s findings and
conclusions and their consistency
with other evidence;
- The relevance and reasonableness
of assumptions and methods used;
and
- The relevance of the source data
used.

• Ensured the appropriateness of amount

involved in valuation of these
obligations.

• Evaluated the adequacy of disclosures in

the financial statements in accordance
with the applicable accounting and
reporting standards.

Information Other than the Financial Statements and Auditor’s Report Thereon

Board of directors are responsible for the other information. The other information comprises the
information included in the annual report but does not include the financial statements and our auditor’s
report thereon.

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

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

Page - 6
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Board of Directors for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the accounting and reporting standards as applicable in Pakistan and the requirements
of the Insurance Ordinance, 2000 and the Companies Act, 2017 (XIX of 2017) and for such internal control
as management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.

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

Board of directors are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

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

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

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.

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

Page - 7
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.

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

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

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

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

Report on Other Legal and Regulatory Requirements

Based on our audit, we further report that in our opinion, except for the effects of the matters described
in basis for qualified opinion section of our report:

a) proper books of account have been kept by the Company as required by Insurance Ordinance, 2000
and the Companies Act, 2017 (XIX of 2017);

b) the statement of financial position, the statement of profit and loss account, the statement of
comprehensive income, the statement of cash flows and the statement of changes in equity together
with the notes thereon have been drawn up in conformity with the Insurance Ordinance, 2000 and the
Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account;

c) investments made, expenditure incurred and guarantees extended during the year were for the
purpose of the Company’s business; and

Page - 8
d) Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted
by the Company and deposited in the Central Zakat Fund established under section 7 of that
Ordinance.
Other Matter

The financial statements of the Company for the year ended December 31, 2021 were audited by another
firm of chartered accountants, who expressed a qualified opinion on those financial statements vide their
report dated April 25, 2022.

The engagement partner on the audit resulting in this independent auditor’s report is Tariq Feroz khan.

KARACHI

DATED: BDO EBRAHIM & CO.

CHARTERED ACCOUNTANTS
UDIN:

Page - 9
PAKISTAN REINSURANCE COMPANY LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, 2022
December 31, December 31,
2022 2021
Notes ------------- (Rupees) -------------
ASSETS

Property and equipment 7 446,068,118 429,090,184

Right of use asset 8 1,639,605,577 1,801,531,334
Capital work in progress 9 10,083,343 8,474,168
Assets in Bangladesh 10 - -
Investment property 11 722,274,603 722,274,603
Investments
Equity securities 12 2,755,440,067 3,388,832,943
Debt securities 13 9,907,026,504 9,174,069,234
12,662,466,571 12,562,902,177

Loans and other receivables 14 462,488,314 285,844,726

Receivable from Sindh Revenue Board 15 2,573,888,727 2,573,888,727
Insurance / reinsurance receivables 16 17,393,374,952 13,686,203,094
Reinsurance recoveries against outstanding claims including IBNR 17 14,420,709,311 4,608,127,235
Deferred commission expense / acquisition cost 18 931,382,139 806,214,206
Taxation - payments less provision 30 78,557,588 -
Prepayments 19 8,943,542,637 7,723,545,836
Cash and bank balances 20 3,030,890,557 1,140,841,359
63,315,332,437 46,348,937,649
Total Assets From Window re-takaful operations - operator's Fund 21 539,612,842 456,613,640
Total Assets 63,854,945,278 46,805,551,289
EQUITY AND LIABILITIES
Capital and reserves attributable to
Company's equity holders
Ordinary share capital 22 9,000,000,000 3,000,000,000
Reserves 23 3,900,130,136 8,526,912,530
Revaluation surplus - net of tax 24 1,421,277,526 1,545,282,086
Total Equity 14,321,407,662 13,072,194,616

Liabilities
Underwriting Provisions
- Outstanding claims including IBNR 25 21,256,435,233 9,401,437,187
- Unearned premium reserves 26 12,047,709,680 10,732,384,652
- Unearned reisurance commission 27 539,143,250 523,294,102
- Premium deficiency reserve 12,526,427 58,873,368
33,855,814,590 20,715,989,309

Retirement benefit obligations 28 3,630,799,590 3,206,839,590

Taxation liabilities- provision less payments 30 - 366,732,044
Deferred taxation 31 741,089,481 810,480,910
Insurance / reinsurance payables 32 10,932,282,952 8,208,198,213
Lease liabilities 33 23,033,149 29,238,876
Unclaimed dividend 34 88,652,013 205,956,627
Other creditors and accruals 35 109,158,042 89,257,122
Total Liabilities 15,525,015,227 12,916,703,382
Total liabilities from Window Takaful Operations - 36 152,707,799 100,663,982
OPF
49,533,537,615 33,733,356,673
Total Equity and Liabilities 63,854,945,278 46,805,551,289

Contingency(ies) and commitment(s) 37

The annexed notes 1 to 64 form an integral part of these financial statements.

Chairman Director Director Chief Executive Officer Chief Financial Officer

PAKISTAN REINSURANCE COMPANY LIMITED
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED DECEMBER 31, 2022

December 31, December 31,

2022 2021
Notes ------------- (Rupees) -------------

Net insurance premium 38 7,929,369,976 7,225,623,532

Net insurance claims 39 (4,311,851,021) (3,777,804,999)

Net commission and other acquistion costs 41 (1,025,917,948) (968,356,238)
Premium deficiency reserve expense 46,346,941 (58,873,368)
Insurance claims and acquisition expenses (5,291,422,028) (4,805,034,605)
Management expenses 42 (1,528,435,094) (728,999,260)
Reversal / (provision) for doubtful debts 16 542,510,469 (8,781,891)
Underwriting results 1,652,023,323 1,682,807,776

Investment income 43 1,338,391,205 981,709,956

Rental income - net 44 126,643,188 104,379,330
Finance cost 45 (2,760,634) (2,548,867)
Fair value gain on investment property - 698,055,394
Other income 46 419,206,393 142,247,594
Other expenses 47 (7,130,355) (8,195,243)
1,874,349,797 1,915,648,164
Total profit from operations 3,526,373,121 3,598,455,940
Profit from Window Retakaful Operations 48 30,370,651 15,962,349
Profit before taxation 3,556,743,771 3,614,418,289
Taxation 49 (931,915,282) (1,024,831,827)
Profit after taxation 2,624,828,489 2,589,586,462

(Restated)
Earnings (after tax) per share - Rupees 50 2.92 2.88

The annexed notes 1 to 64 form an integral part of these financial statements.

Chairman Director Director Chief Executive Officer Chief Financial Officer

PAKISTAN REINSURANCE COMPANY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2022
December 31, December 31,
2022 2021
------------- (Rupees) -------------
OPERATING CASH FLOWS:
Underwriting activities:-
Premium received 21,106,729,029 15,439,506,827
Reinsurance premium paid (13,381,868,413) (9,403,407,489)
Claims paid (6,210,425,217) (5,511,516,252)
Reinsurance and other recoveries received 3,940,990,166 1,655,094,346
Commission paid (2,152,329,465) (1,822,272,449)
Commission received 1,017,092,732 941,334,110
Premium and claim reserves retained from
retrocessionaires/withheld by ceding companies -
Other underwriting payments (management expenses) (1,380,800,861) (722,046,464)
Net Cash Flows Generated From Underwriting Activities 2,939,387,971 576,692,629

Other operating activities:

Income tax paid (1,266,634,926) (272,051,728)
Generalmanagementexpensespaid (7,130,383) (8,195,243)
Otheroperating receipts/(payments) (6,475,233) 5,226,221
Advancestoemployees 72,943,017 (146,231,912)
Net cash used in other operating activities (1,207,297,525) (421,252,662)
TOTAL CASH FLOW GENERATED FROM 1,732,090,446 155,439,967
ALL OPERATING ACTIVITIES

INVESTMENT ACTIVITIES
Fixed capital expenditure (50,327,717) (3,892,302)
Sale proceeds of fixed assets 377,638 -
Acquisition of investments (16,334,668,315) (17,209,901,257)
Rental income received - net of expenses 15,599,890,340 16,152,265,082
Dividend income received 95,054,502 100,770,578
Interest income on bank deposits 266,509,713 225,330,416
Investment income received - net of expenses 79,536,193 190,752,525
Proceeds on sale/ maturity of investments 1,218,891,022 658,822,674
Total cash used from investing activities 875,263,376 114,147,716

Financing activities
Dividend paid (717,304,614) (699,251,502)
Payments of finance leases - -
Total cash used in financing activities (717,304,614) (699,251,502)
Net cash flows from/ (used in ) all activities 1,890,049,208 (429,663,819)
Cash and cash equivalents at beginning of the year 1,140,841,359 1,570,505,178
Cash and cash equivalents at end of the year 3,030,890,567 1,140,841,359

Page - 1
PAKISTAN REINSURANCE COMPANY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2022
December 31, December 31,
2022 2021
------------- (Rupees) -------------

Reconciliation to profit and loss account

Operating cash flows 1,732,090,446 155,439,967
Depreciation expense (188,017,870) (8,230,259)
Exchange gain 138,239,529 66,669,413
Rental income 126,643,188 105,656,793
Reinsurance recoveries against outstanding claims 9,812,582,076 698,055,394
Provision for outstanding claims (11,854,998,046) (995,680,796)
Provision for unearned premium (1,315,325,028) 1,074,297,703
Prepaid reinsurance 1,217,497,267 (4,218,712,218)
Premium deficiency reserve 46,346,941 3,578,698,959
Provision for employee benefits (743,885,192) 150,028,408
Dividend income 266,509,713 224,524,616
Investment income (55,298,302) (40,293,233)
Interest income 1,084,026,602 787,392,999
Amortization of premium 42,778,792 18,188,606
Gain on sale of investment 374,400 51,084,393
Decrease in operating assets other than cash 3,466,752,310 5,529,056,792
(Decrease) in operating liabilities (1,516,578,632) (4,072,284,847)
2,259,738,194 3,103,892,690
Other adjustments:
Income tax paid 1,266,634,926 272,051,728
Profit before taxation 3,526,373,120 3,375,944,418
Provision for taxation (931,915,282) (1,024,831,827)
Profit after taxation 2,594,457,838 2,351,112,591
Profit from Window Retakaful Operations - Operator's Fund 30,370,651 15,962,349
Profit after taxation for the year 2,624,828,489 2,367,074,940

Cash for the purpose of the statement of cash flows consist of:
Cash and cash equivalents:
Cash and other equivalent
Current and other accounts

The annexed notes 1 to 64 form an integral part of these financial statements.

Chairman Director Director Chief Executive Officer Chief Financial Officer

Page - 2
PAKISTAN REINSURANCE COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2022

December 31, December 31,

2022 2021
Notes ------------- (Rupees) -------------

Profit after taxation 2,624,828,489 2,589,586,463

Other comprehensive (loss) / income for the year

Items that may be reclassified subsequently to

profit and loss account
Unrealized loss on available for sale investments (638,280,966) (560,047,005)
Deferred tax on available for sale investments 179,961,417 142,264,484
Unrealized gain on available for sale investments -
Window Retakaful Operations- net of tax 584,733 48,126
Net loss transferred to profit and loss account on disposal / redemption - 31,756,267
Surplus on revaluation of right of use asset- net of tax - 1,264,741,728
Surplus on revaluation of property and equipment- net of tax - 280,540,358
(457,734,816) 1,159,303,958

Items that will not be reclassified subsequently to

profit and loss account
Actuarial loss on defined benefit obligations 27.1.3 (317,880,626) (168,240,000)

Total comprehensive income for the year 1,849,213,046 3,580,650,421

The annexed notes 1 to 61 form an integral part of this financial statement.

Chairman Director Director Chief Executive Officer Chief Financial Officer

PAKISTAN REINSURANCE COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2022

Reserves
Capital Other Revenue
Share capital Unrealized gain on Total reserves Total equity
Reserve for
available for sale Revaluation surplus General reserve Retained earnings
exceptional losses
investment
------------------------------------------------------------------------Rupees ------------------------------------------------------------------------
Balance as at January 01, 2021 3,000,000,000 281,000,000 1,440,831,468 - 1,777,419,085 3,742,293,642 7,241,544,195 10,241,544,195

Total comprehensive income for the year

Profit for the year - - - - - 2,589,586,463 2,589,586,463 2,589,586,463
Unrealized (loss) on available for sale investments - net - - (417,782,521) - - - (417,782,521) (417,782,521)
Net loss transferred to profit and loss account on disposal 31,756,267 - - - 31,756,267 31,756,267
Unrealized gain on available for sale investments -
Window Retakaful Operations - Operator's retakaful fund - - 48,126 - - - 48,126 48,126
Revaluation surplus on property and equipment -net 280,540,358 280,540,358 280,540,358
Revaluation surplus on right of use assets - net 1,264,741,728 1,264,741,728 1,264,741,728
Remeasurement of defined benefit obligations - net - - - - - (168,240,000) (168,240,000) (168,240,000)
- - (385,978,128) 1,545,282,086 - 2,421,346,463 3,580,650,421 3,580,650,421
Transaction with owners
Final cash dividend 2020: Rs. 2.00 @ 25% - - - - - (750,000,000) (750,000,000) (750,000,000)
(2019 : Rs. 2.00 @ 20% ) per share

Balance as at December 31, 2021 3,000,000,000 281,000,000 1,054,853,340 1,545,282,086 1,777,419,085 5,413,640,105 10,072,194,616 13,072,194,616

Balance as at January 01, 2022 3,000,000,000 281,000,000 1,054,853,340 1,545,282,086 1,777,419,085 5,413,640,105 10,072,194,616 13,072,194,616

Total comprehensive income attributable to Company's equity holders

Profit for the year - - - - - 2,624,828,489 2,624,828,489 2,624,828,489
Unrealized loss on available for sale investments - - (638,280,966) - - - (638,280,966) (638,280,966)
Deferred tax on available for investments 179,961,417 - 179,961,417 179,961,417
Unrealized loss on available for sale investments - Window retakaful
Operations- net of tax - - 584,733 - - - 584,733 584,733
Incremental Depreciation- Property and equipment (14,027,018) 14,027,018 -
Incremental Depreciation- Right of use assets (109,977,542) 109,977,542 -
Remeasurement of defined benefit obligations - net of tax - - - - - (317,880,626) (317,880,626) (317,880,626)
- - (457,734,816) (124,004,560) - 2,430,952,422 1,849,213,046 1,849,213,046
Transaction with owners -
Final cash dividend 2021: Rs. 2.00 @ 20% - - - - - (600,000,000) (600,000,000) (600,000,000)
(2020 : Rs. 2.50 @ 25% ) per share -
Issuance of bonus shares 2021: @ 200% (2020: Nil) per share 6,000,000,000 (642,122,769) (5,357,877,231) (6,000,000,000) -
Balance as at December 31, 2022 9,000,000,000 281,000,000 597,118,524 1,421,277,526 1,135,296,316 1,886,715,296 5,321,407,662 14,321,407,662

The annexed notes 1 to 64 form an integral part of these financial statements. (973,414,764) 441,485,907
441,485,907

565,490,467
Chairman Director Director Chief Executive Officer Chief Financial Officer
PAKISTAN REINSURANCE COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022

1 LEGAL STATUS AND NATURE OF BUSINESS

1.1 Pakistan Reinsurance Company Limited (the Company) was incorporated in Pakistan as a
public limited company on March 30, 2000 under the repealed Companies Ordinance, 1984
(now Companies Act, 2017). The Company is engaged in providing reinsurance and other
insurance business being forum of risk transfer. The shares of the Company are quoted on
Pakistan Stock Exchange Limited.

With effect from February 15, 2001, the Company took over all the assets and liabilities of
former Pakistan Insurance Corporation (PIC) vide SRO No.98(1)/2000 dated February 14,
2001 of the Ministry of Commerce issued in terms of Pakistan Insurance Corporation (Re-
organization) Ordinance, 2000 to provide for conversion of Pakistan Insurance Corporation
into Pakistan Reinsurance Company Limited which was established in 1952 as Pakistan
Insurance Corporation (PIC) under PIC Act 1952. Accordingly, PIC has been dissolved and
ceased to exist and the operations and undertakings of PIC are being carried out by the
Company.

The Company was granted authorization on September 26, 2018 under Rule 6 of the Takaful
Rules, 2012 to undertake Window Retakaful Operations in respect of general retakaful
products by the Securities and Exchange Commission of Pakistan (SECP).

The Company is under administrative control of Ministry of Commerce (Government of

Pakistan). The Ministry of Commerce holds 51% shares of the Company. The Cabinet
Committee on Privatization (CCoP) on August 21, 2020 approved divestment of government
stakes in the Company through public offerings.The Privitization Commission has submitted
the case of PRCL to CCOP for further guidance as Share Value at Stock Exchange is declined
presently from the original approval of CCOP in 2018.

1.2 In terms of Section 36 of the Insurance Ordinance, 2000, the Company is required to maintain
the minimum solvency ratio at all times to be computed in a manner as prescribed under the
above section and related rules. As of the reporting date, the Company is in breach of such
solvency requirement. Such breach indicates that a material uncertainty exists that may cast
significant doubt on the Company’s ability to continue as a going concern. Therefore, the
Company may not be able to realize its assets and discharge its liabilities in the normal course
of business.

Page - 1
 The management is undertaking a rigorous review of the Company's outstanding claims which
were rapidly increased during the year from Rs. 9,401,437,187 to Rs. 21,256,435,233.
Majority of claims are based on preliminary loss assessment which is either being declined,
paid off or adjusted against the outstanding receivables subsequently. Hence, it is anticipated
that liability for outstanding claims will significantly be reduced by the June 30, 2023.
Moreover, the SECP is in process of issuing regulations to be finalized by June 2023 which
among other matters also address the issue of long outstanding receivables of PRCL from
insurance companies. Once these regulations are in effect, the recovery cycle would
significantly improve and majority of old receivables would be recovered from Insurance
Companies and consequently solvency position would significantly improve.

Due to the above reasons, the management expects that the Company will be able to securely
meet the solvency requirement on or before December 31, 2023. Accordingly, these financial
statements have been prepared on a going concern basis.

2 GEOGRAPHICAL LOCATION AND ADDRESSES OF BUSINESS UNITS

The registered office of the Company is situated at PRC Towers, 32-A, Lalazar Drive, Maulvi
Tamizuddin Khan Road, Karachi. The zonal office of the Company is located at 1st Floor, 15-
A, Davis Road, State Life Building, Lahore, Pakistan.

3 BASIS OF PREPARATION

3.1 Statement of compliance

These financial statements are prepared in accordance with the accounting and reporting
standards as applicable in Pakistan. The applicable accounting and reporting standards
comprise of:

- International Financial Reporting Standards (IFRS) issued by the International Accounting

Standards Board as are notified under the Companies Act, 2017 ; and

- Provisions of and directives issued under the Insurance Ordinance, 2000, the Insurance
Rules, 2017, the Insurance Accounting Regulations, 2017, General Takaful Accounting
Regulations, 2019, Takaful Rules, 2012 and Companies Act, 2017.

In case requirements differ, the provisions or directives of the Insurance Ordinance, 2000, the
Insurance Rules, 2017, the Insurance Accounting Regulations, 2017, General Takaful
Accounting Regulations, 2019, Takaful Rules, 2012 and Companies Act, 2017 shall prevail.

Page - 2
 Total assets, total liabilities and profit of the Window Retakaful Operations of the Company
referred to as the Operator's retakaful fund have been presented in these financial statement in
accordance with the requirements of Circular 25 of 2015 dated July 09, 2015. A separate set
of financial statements of the Window Retakaful Operations has been reported which is
annexed to these financial statements as per the requirements of the SECP Takaful Rules,
2012 and General Takaful Accounting Regulations, 2019.

3.2 Basis of measurement

These financial statements have been prepared on the historical cost basis except certain
investments which have been measured at fair value and the Company's liability under
retirement benefit obligations which is determined based on present value of defined benefit
obligation less fair value of plan assets. No adjustment for the effect of inflation has been
accounted for in the financial statements. All transactions reflected in these financial
statements are on accrual basis except for those reflected in Statement of Cash Flows.

3.3 Functional and presentation

These financial statements have been prepared and presented in Pakistani Rupee ('Rupees', or
'Rs.'), which is the Company’s functional and presentation currency.

4 New Accounting Standards, Interpretations and amendments

4.1 New accounting standards, amendments and IFRS interpretations that are effective for
the year ended December 31, 2022

The following standards, amendments and interpretations are effective for the year ended
December 31, 2022. These standards, amendments and interpretations are either not relevant
to the Company's operations or do not have significant impact on the financial statements
other than certain additional disclosures.

Effective date
(annual periods
beginning on or
after)

Amendments to IFRS 3 'Business Combinations' - Reference to the January 01, 2022

conceptual framework

Amendments to IFRS 16 'Leases' - Extended practical relief April 01, 2021

regarding Covid - 19 related rent consessions

Amendments to IAS 16 'Property, Plant and Equipment' - Proceeds January 01, 2022
before intended use

Page - 3
 Effective date
(annual periods
beginning on or
after)

Amendments to IAS 37 'Provisions, Contingent Liabilities and January 01, 2022

Contingent Assets' - Onerous Contracts - Cost of fulfilling a contract

Certain annual improvements have also been made to a number of

IFRSs.

IFRS 9 - Financial Instruments and Amendment to IFRS 4 'Insurance Contracts-

Applying IFRS 9 with IFRS 4'

IFRS 9 'Financial Instruments' was issued on July 24, 2017. This standard is adopted locally
by the Securities and Exchange Commission of Pakistan through its S.R.O. 229 (I)/2019 and
is effective for accounting period / year ending on or after June 30, 2019.

a) IFRS 9 ‘Financial Instruments’ and amendment (effective for period ending on or after June
30, 2019). IFRS 9 replaces the existing guidance in IAS 39 Financial Instruments:
Recognition and Measurement. IFRS 9 includes revised guidance on the classification and
measurement of financial instruments, a new expected credit loss model for calculating
impairment on financial assets, and new general hedge accounting requirements. It also carries
forward the guidance on recognition and derecognition of financial instruments from IAS 39.

b) Amendments to IFRS 4 'Insurance Contracts' - Applying IFRS 9 'Financial Instruments' with

IFRS 4 addresses issue arising from the different effective dates of IFRS 9 and the
forthcoming new standard IFRS 17 'Insurance Contracts'. The amendments introduce two
alternative options for entities issuing contracts within the scope of IFRS 4, notably a
temporary exemption and an overlay approach. The temporary exemption enables eligible
entities to defer the implementation date of IFRS 9. The overlay approach allows an entity
applying IFRS 9 from July 01, 2018 onwards to remove from profit or loss account the effects
of some of the accounting mismatches that may occur from applying IFRS 9 before IFRS 17 is
applied.

Temporary Exemption from Application of IFRS 9

The Company has determined that it is eligible for the temporary exemption option since the
Company has not previously applied any version of IFRS 9, its activities are predominantly
connected with insurance as the percentage of the total carrying amount of its liabilities
connected with insurance relative to the total carrying amount of all its liabilities is greater
than 90 percent and the Company doesn't engage in significant activities unconnected with
insurance based on historical available information. Under the temporary exemption option,
the Company can defer the application of IFRS 9 until the application IFRS 17.

Page - 4
4.2 Standards, interpretations and amendments to approved accounting standards that are
not yet effective

The following standards, amendments and interpretations are only effective for accounting
periods, beginning on or after the date mentioned against each of them. These standards,
amendments and interpretations are either not relevant to the Company's operations or are not
expected to have significant impact on the Company's financial statements other than certain
additional disclosures.

Effective date
(annual periods
beginning on or
after)

Amendments to IFRS 16 'Leases' - Lease liability in a sale and leaseback January 01, 2024

Amendments to IAS 1 'Presentation of Financial Statements' - Non- January 01, 2024

current liabilities with covenants

Amendments to IAS 1 'Presentation of Financial Statements' - January 01, 2024

Classification of liabilities as current or non-current

Amendments to IAS 1 'Presentation of Financial Statements' - January 01, 2023

Disclosure of Accounting Policies
Amendments to IAS 8 'Accounting Policies, Changes in Accounting January 01, 2023
Estimates and Errors' - Definition of Accounting Estimates

Amendments to IAS 12 'Income Taxes' - Deferred Tax related to Assets January 01, 2023
and Liabilities arising from a single transaction

The following new standards and interpretations have been issued by the International
Accounting Standards Board (IASB), which have not been adopted locally by the Securities
and Exchange Commission of Pakistan (SECP):

IFRS 1 First Time Adoption of International Financial Reporting

Standards
IFRS 17 Insurance Contracts

The Company's expects that the adoption of the other amendments and interpretations of the
standards will not have any material impact and therefore will not affect the Company's
financial statements in the period of initial application.

5 SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied in the preparation of these financial statements are
set out below and are consistent with those of the previous financial years.

Page - 5
5.1 Insurance contracts

Insurance contracts are those contracts where the Company (the insurer) has accepted
significant insurance risk from another party (the policyholders) by agreeing to compensate
the policyholders if a specified uncertain future event (the insured event) adversely affects the
policyholders.

Once a contract has been classified as an insurance contract, it remains an insurance contract
for the remainder of its lifetime, even if the insurance risk reduces significantly during this
period, unless all rights and liabilities are extinguished or expired.

In addition to direct insurance, at times the Company also participates in risks under co-
insurance from other companies and also accepts risks through reinsurance inward by way of
facultative acceptances on case to case basis provided such risks are within the underwriting
policies of the Company.

The Company neither issues investment contracts nor does it issue insurance contracts with
Discretionary Participation Features (DPF).

5.1.1 Premiums

Premium written under a policy is recognized as income over the period of insurance from the
date of issuance of the policy to which it relates to its expiry. Where the pattern of incidence
of risk varies over the period of the policy, premium is recognized as revenue in accordance
with the pattern of the incidence of risk.

Treaty is being carried out under the regulations 1978 as the data received is on prescribed
forms (returns) therein. Due to the regulations being outdated (enacted decades before
insurance ordinance 2000 and insurance rules 2017), PRCL is completely relied on returns.

Provision for unearned premium

The portion of premium written relating to the unexpired period of coverage is recognized as
unearned premium by the Company. The unearned portion of premium income is recognized
as a liability. For treaty business the liability is calculated by applying 1/8 method and for
facultative business over the period of insurance from the date of issuance of the policy to
which it relates to its expiry.

5.1.2 Reinsurance contracts

The Company enters into reinsurance contracts in the normal course of business in order to
limit the potential for losses arising from certain exposures. Outward reinsurance premiums
are accounted for in the same period as the related premiums for the accepted reinsurance
business being reinsured.

Page - 6
 Reinsurance liabilities represent balances due to reinsurance companies. Amount payable are
estimated in a manner consistent with the related reinsurance contract. Reinsurance assets
represent balance due from reinsurance companies. Amount recoverable from reinsurers are
estimated in a manner consistent with the provision for outstanding claims or settled claims
associated with the reinsurance policies and are in accordance with the related insurance
contract.

Reinsurance assets are not offset against related insurance liabilities. Income or expenses from
reinsurance contracts are not offset against the expenses or income from related insurance
contracts. Reinsurance assets or liabilities are derecognized when the contractual rights are
extinguished or expired.

The Company assesses its reinsurance assets for impairment on reporting date. If there is an
objective evidence that the reinsurance asset is impaired, the Company reduces the carrying
amount of the reinsurance asset to its recoverable amount and recognizes that impairment loss
in the statement of profit or loss.

5.1.3 Receivables and payables related to insurance contracts

Receivables including premium due but unpaid, relating to insurance contracts are recognized
when due. The claim payable is recorded when intimation is received. These are recognized at
cost, which is the fair value of the consideration given less provision for impairment losses, if
any. Premium received in advance is recognized as liability till the time of issuance of
insurance contract there against.

5.1.4 Reinsurance recoveries against outstanding claims

Claims recoveries receivable from the reinsurer are recognized as an asset at the same time as
the claims which give rise to the right of recovery are recognized as a liability and are
measured at the amount expected to be received.

5.1.5 Commission

Commission and other acquisition costs incurred in obtaining and recording on direct,
facultative and reinsurance cessions have been deferred and recognized as assets and liability
as under:

a) Commission income

The revenue recognition policy for commission from reinsurer is given under note 5.12.2.

b) Deferred commission expense

Commission expenses are deferred and recognized as an asset in correlation with pattern of
recognition of premium revenue.

Page - 7
 Other acquisition are charged to statement of profit and loss account at the time policies are
accepted.

5.1.6 Premium deficiency reserve

The Company is required to maintain a provision in respect of premium deficiency for the
individual class of business where the unearned premium liability is not adequate to meet the
expected future liability, after reinsurance, from claims and other supplementary expenses
expected to be incurred after the reporting date in respect of the unexpired policies in that
class of business at the reporting date. The movement in the premium deficiency reserve is
recognized as an expense in the profit or loss account. Judgment is used in assessing the
extent to which past trends may not apply in future or the effects of one-off claims.

The management considers that the unearned premium reserve for all classes of business as at
the year end is adequate to meet the expected future liability after reinsurance, from claims
and other expenses, expected to be incurred after the reporting date in respect of policies in
those classes of business in force at the reporting date. Hence, no reserve for the same has
been made in these financial statements.

5.2 Investments

5.2.1 Recognition

All investments are initially recognized at cost, being the fair value of the consideration given
and include transaction costs, except for held for trading investments in which case transaction
costs are charged to the Statement of profit or loss account. These are recognized and
classified as follows:

- Held-for-trading;
- Held-to-maturity; and
- Available-for-sale.

5.2.2 Measurement

(a) Held for trading

Investments which are designated as held for trading upon initial recognition.

After initial recognition, the above investments are remeasured at fair value determined with
reference to the rates prevailing in the stock exchange, where applicable. Gains or losses on
remeasurement of these investments are recognized in statement of profit and loss account.

Page - 8
 (b) Held to maturity

Investments with fixed maturity and fixed income investments, where management has both
the intent and the ability to hold to maturity, are classified as held-to-maturity. After initial
recognition, these are carried at amortized cost less provision for impairment loss, if any.
Amortized cost is calculated by taking into account any discount or premium on acquisition
using effective yield method.

(c) Available for sale

Available-for-sale financial assets are those non-derivative financial assets that are designated
as available-for-sale or are not classified as:

(a) loans and receivables

(b) held-to-maturity
investments or
(c) financial assets at fair
value through profit or
loss

5.2.3 Quoted securities - subsequent measurement

Subsequent to initial recognition, quoted investments are stated at market value for available
for sale investments and fixed income investments redeemable at a given date and where the
cost is different from the redemption value, require such difference to be amortized uniformly
between the date of acquisition and the date of maturity. The Company uses stock exchange
quotations at the reporting date to determine the market value.

5.2.4 Unquoted securities

Unquoted investments are recorded at cost less impairment loss (if any).

5.2.5 Impairment

Financial assets are assessed for indicators of impairment at the end of each reporting period.
Financial assets are considered to be impaired when there is objective evidence that, as a
result of one or more events that occurred after the initial recognition of the financial asset, the
estimated future cash flows of the investment have been affected.

For available for sale equity investments, a significant or prolonged decline in the fair value of
the security below its cost is considered to be objective evidence of impairment.

Page - 9
5.2.6 Date of recognition

Regular way purchase and sale of investments that require delivery within the time frame
established by regulations or market convention are recognized at the trade date. Trade date is
the date on which the Company commits to purchase or sell the investment.

5.3 Investment property

Investment property is stated at fair value, which reflects market conditions at the reporting
date. Gain or loss on re-measurement of investment property at fair value is recognized in
statement of other comprehensive income. Fair value is evaluated annually by an independent
professional value. Investment property is derecognized when either it has been disposed off
or when the investment property is permanently withdrawn from use and no future economic
benefit is expected from its disposal. The difference between the net disposal proceeds and the
carrying amount of the asset is recognized as income in the period of de-recognition.
Maintenance and normal repairs are charged to the statement of profit or loss as and when
incurred. Major renewals and improvements are capitalized and the assets so replaced, if any,
are retired. Gains or losses on disposal of investment property, if any, are included in income
currently.

5.4 Liability adequacy test

At the end of each reporting year, the Company assesses whether its recognized insurance
liabilities are adequate using current estimates of future cash flows under its insurance
contracts. If that assessment shows that the carrying amount of its insurance liabilities is
inadequate in the light of estimated future cash flows, the entire deficiency is immediately
recognized in the statement of profit or loss.

5.5 Commission expense, other acquisition costs and commission income

Commission expense and other acquisition costs are charged to the statement of profit and
loss account at the time the policies are accepted. Commission income from reinsurers is
recognized at the time of issuance of the underlying insurance policy by the Company. This
income is deferred and brought to accounts as revenue in accordance with the pattern of
recognition of the reinsurance premium to which it relates. Profit commission, if any, which
the Company may be entitled to under the terms of reinsurance, is recognized on accrual basis.

Page - 10
 5.6 Provision for outstanding claims including IBNR

A liability is recognized for outstanding claims incurred up to the reporting date and is
considered to be incurred at the time of incident giving rise to the claim. Unpaid reported
claims are based on prescribed statutory returns submitted by the ceding companies.
Outstanding claims reserve and claims incurred but not reported (IBNR) to the Company up to
the reporting date are recorded on the basis of actuarial valuation, results of which have been
recognized in the financial statements. The above liability is measured at undiscounted value
and includes expected settlement costs. Provision for liability in respect of unpaid reported
claims is made on the basis of individual case estimates and provision for those claims which
are incurred and not reported as at reporting date are made on the basis of specified guidelines
issued by the Securities and Exchange Commission of Pakistan, according to which the
Company should record those claims which are incurred but not reported on the basis of
collection of data of IBNR claims reserves from the ceding companies (non-life insurers) in
accordance with the share of Company on account of facultative and treaty business.

5.7 Prepaid reinsurance ceded

Reinsurance premium is recognized as an expense evenly over the period of the underlying
policies. The portion of reinsurance premium not yet recognized as expense is recognized as
prepayment.

5.8 Staff retirement benefits

5.8.1 Gratuity and pension scheme

The Company operates approved gratuity and pension scheme for all its permanent employees
who are entitled to the scheme. The Company makes contributions or record liability in
respect of defined benefit plans on the basis of actuarial valuations, carried out annually by
independent actuaries and in line with the provisions of the Income Tax Ordinance, 2001. The
latest actuarial valuations were carried out as of December 31, 2022 using the Projected Unit
Credit Method based on the significant assumptions stated in relevant note for valuation of the
funds.

5.8.2 Pension fund

The Company operates a defined benefit plan, a funded pension scheme for its employees and
officers eligible for the pension scheme and payments are made annually to the extent allowed
under the Income Tax Rules, 2002 to meet the obligations there-under on the basis of actuarial
valuation. Liability for the fund is based on the advice of appointed actuary.

Page - 11
5.8.3 Provident fund

The Company contributes to a provident fund scheme which covers all permanent employees.
Equal contributions are made both by the Company and the employees to the fund at the rate
of 10 percent of basic salary.

5.8.4 Compensated absences

The Company accounts for all accumulated compensated absences when the employees render
service that increases their entitlement to future compensated absences based on actuarial
valuation.

The Company makes periodic provisions in the financial statements for its liability towards
defined encashment of leaves up to maximum of 365 days in respect of leave preparatory to
retirement (LPR) on the basis of basic pay. The liability is estimated on the basis of actuarial
advice under the Projected Unit Credit method carried out by a qualified actuary.

5.8.5 Post retirement medical benefits

The Company operates post retirement medical benefit plan and recognizes liability for post
retirement medical facilities in respect of its eligible employees in accordance with
requirements of IAS - 19 (Revised).

5.9 Taxation

Income tax expense comprises current and deferred tax. Taxation is recognized in statement of
profit and loss account except to the extent that it relates to items recognized directly in
equity, in which case it is recognized in equity.

5.9.1 Current

Current tax is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to tax payable in
respect of previous years. Provision for taxation is based on taxable income at the current rates
of tax after taking into account applicable tax credits, rebates and exemptions available, if any.

5.9.2 Deferred

Deferred tax is accounted for using the balance sheet liability method, in respect of temporary
differences arising at the balance sheet date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes.

Page - 12
 Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred
tax assets are recognized for all deductible temporary differences to the extent that it is
probable that the future taxable profits will be available against which the assets may be
utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the
related tax benefit will be realized.

The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to
allow all or part of the deferred tax asset to be recognized. Unrecognized deferred tax assets
are reassessed at each balance sheet date and are recognized to the extent that it has become
probable that future taxable profit will allow deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
periods when the asset is utilized or the liability is settled, based on the tax rates (and tax
laws) that have been enacted or substantively enacted at the balance sheet date. Deferred tax is
charged or credited to the statement of profit and loss account except in the case of items
credited or charged to equity in which case it is included in equity.

5.10 Property and equipment

Fixed assets except leasehold lands (other than land of PRC House and PRC Building, which
has not been bifurcated) are stated at fair value less accumulated depreciation calculated on
written down values and accumulated impairment losses thereon. Leasehold land is stated at
cost.

Depreciation is charged to income applying the reducing balance method. The rates of
depreciation are stated in note 7.1 to the financial statements.

Depreciation on additions during the financial year is charged from the month in which asset
is available for use whereas no depreciation is charged from the month in which the asset is
disposed off. The assets residual values and useful lives are reviewed, and adjusted if
appropriate, at each reporting date.

The assets residual value and useful life are continuously reviewed by the Company and
adjusted if impairment or depreciation is significant.

Maintenance and normal repairs are charged to Statement of profit and loss account as and
when incurred. Major renewals and improvements are capitalized and assets so replaced, if
any are retired.

Gains and losses on disposal of fixed assets, if any, are included in other income.

Page - 13
 In case of Right of use assets, depreciation is charged over lower of useful life and lease term.
The calculation of useful life is based on management’s assessment of various factors such as
the operating cycles, the maintenance programs, and normal wear and tear using its best
estimates.

5.11 Capital work in progress

Capital work in progress is stated at cost less any identified impairment loss. All expenditure
including borrowing costs connected with specific assets incurred during installation and
construction period are carried under capital work in progress. These are transferred to
operating fixed assets as and when these are available for use.

5.12 Revenue recognition

5.12.1 Premium

Premium received / receivable under a policy are recognized evenly over the period of
underlying policies or in accordance with the pattern of reinsurance service provided. Where
the pattern of incidence of risk varies over the period of the policy, the premium is recognized
as an income in accordance with the pattern of incidence of risk.

Revenue from premium is based on prescribed statutory returns submitted by the ceding
companies. Premiums are taken to income, after (i) deducting reinsurance and (ii) adjusted for
provision for unearned premium.

Premium recognition in case of co-insurance or pool arrangements is restricted to the

Company's share only.

5.12.2 Commission income

Commission income is being taken to the statement of profit and loss account on a time
proportion basis in accordance with the pattern of recognition of reinsurance premium.

5.12.3 Investment income

- Gain / loss on sale of investments is taken to the statement of profit and loss account in the
year of sale.

- Profit / interest income on investments securities are recognized on effective interest method.

- Gains or losses on remeasurement of investments recognised as held for trading are

recognized in the statement of profit and loss account.

- Dividend income is recognized when the right to receive such dividend is established.

Page - 14
5.12.4 Rental income

Rentals from investment properties are recognized over the term of the lease.

5.12.7 Other income

Profit on bank deposits is recognized on a time proportion basis taking into account the
effective yield.

5.13 Management expenses

Management expenses allocated to the underwriting business represent directly attributable

expenses and indirect expenses allocated on the basis of net premium revenue under
individual business.

5.14 Derivative financial instruments

Derivative financial instruments are initially recognized at fair value on the date on which the
derivative contract is entered into and are subsequently remeasured at fair value. All derivative
financial instruments are carried as assets when fair value is positive and liabilities when fair
value is negative. Any change in the fair value of derivative financial instruments is taken to
the statement of profit and loss account.

5.15 Foreign currency translations

Transactions in foreign currencies are translated into Pakistani Rupees at the rates of exchange
prevailing on the date of transactions. Significant exchange rates applied during the year are
provided in relevant note. Non-monetary assets and liabilities are translated into Pakistani
Rupees using exchange rates prevalent on transaction date. Exchange differences on foreign
currency translations are included in the statement of profit and loss account currently.
5.16 Impairment of assets

Financial assets

A financial asset is considered to be impaired if objective evidence indicate that one or more
events had a negative effect on the estimated future cash flow of that asset.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as a

difference between its carrying amount and the present value of estimated future cash flows
discounted at the original effective interest rate. An impairment loss in respect of available for
sale financial asset is calculated with reference to its current fair value.

If a decline in fair value is significant or prolonged, then there is objective evidence of

impairment, regardless of how long management intends to hold the investment.

Page - 15
 Individually significant financial assets are tested for impairment on an individual basis. The
remaining financial assets are assessed collectively in groups that share similar credit risk
characteristics.

Non-financial assets

The carrying amounts of Company's non-financial assets are reviewed at each statement of
financial position date to determine whether there is any indication of impairment. If such
indication exists, the recoverable amount of such asset is estimated. An impairment loss is
recognized wherever the carrying amount of asset exceeds its recoverable amount. Impairment
losses are recognized in the statement of profit and loss account. A previously recognized
impairment loss is reversed only if there has been change in the estimates used to determine
the asset's recoverable amount since the last impairment loss was recognized. If that is the
case, the carrying amount of the asset is increased to its recoverable amount. That increased
amount cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognized for the asset in prior years. Such
reversal is recognized in the statement profit and loss account.

5.17 Cash and cash equivalents

Cash and cash equivalents are carried at amortized cost. They comprise (a) cash in deposit
accounts with banks (b) cash (and cheques) in hand, in transit and at banks in current accounts
(c) stamps in hand and (d) term deposits maturing within 12 months.

5.18 Off setting of financial assets and financial liabilities

A financial asset and a financial liability is offset and the net amount is reported in the
statement of financial position if the Company has a legally enforceable right to set-off the
recognized amounts and intends either to settle on a net basis or to realize the asset and settle
the liability simultaneously.

5.19 Segment reporting

For management purposes, the Company is organized into six departments which deal with
specific type of insurance policies. These departments are business segments for financial
reporting purposes. Moreover, there are 'treaty arrangement' under each department and is
treated as a separate segment. Thus the Company has seven segment - fire, marine cargo,
marine hull, accident and others, aviation, engineering and treaty.
These segments are the basis on which the Company report its primary segment information.
Other operations of the Company comprises investment in securities and in properties. The
Company operates in Pakistan only. There are no transactions between segments.

Assets, liabilities and capital expenditures that are directly attributable to segments have been
assigned to them. Those assets and liabilities which cannot be allocated to a particular
segment on a reasonable basis are reported as unallocated corporate assets and liabilities.

Page - 16
5.20 Provision for doubtful debts

Receivables under insurance contracts are recognized when due, at the fair value of the
consideration receivable less provision for doubtful debts, if any. Provision for impairment of
premium receivables is established when the chances of recovery are less. Receivables are
also analyzed as per their ageing and accordingly provision is maintained on a systematic
basis. The provision is made while taking into consideration of expected recoveries, if any.
5.21 Financial instruments

Financial instruments carried on the statement of financial position include cash and bank
deposits, loans, investments, amounts due from / to other insurers / reinsurers, premium and
claim reserves retained from / by retrocessionaires / cedants, accrued investment income,
sundry receivables, provision for outstanding claims, long term deposits, other creditors and
accruals, retention money payable, dividend payable and surplus profit payable.

All the financial assets and financial liabilities are recognized at the time when the Company
becomes a party to the contractual provisions of the instrument and derecognized when the
Company loses control of contractual rights that comprise the financial assets, and in the case
of financial liabilities, when the obligation specified in the contract is discharged, cancelled or
expired. At the time of initial recognition, all financial assets and financial liabilities are
measured at cost, which is the fair value of the consideration given or received for it. Any gain
or loss on derecognition of financial assets and financial liabilities is taken to income directly.

5.22 Dividend and other appropriations

Dividend and appropriation to reserves are recognized as liability in the Company's financial
statements in the year in which these are approved.

5.23 Earnings per share

The Company presents basic and diluted earnings per share (EPS) for its shareholders. Basic
EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding during the year.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding for the effects of all dilutive
potential ordinary shares, if any. However, there were no dilutive potential ordinary shares in
issue at December 31, 2022.

Page - 17
5.24 Leases

A contract is, or contains a lease if the contract conveys a right to control the use of an
identified asset for a period of time in exchange for consideration. The Company mainly lease
properties for its operations and recognizes a right-of use asset and lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, and subsequently at
cost less accumulated depreciation and impairment losses, if any, and adjusted for certain
remeasurements of the lease liability. The right-of-use asset is depreciated using the straight
line method from the commencement date to the earlier of end of the useful life of the right-of-
use asset or end of lease term. The estimated useful lives of assets are determined on the same
basis as that for owned assets. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any.

The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date, discounted using the incremental borrowing rate of the
Company. The lease liability is subsequently increased by the interest cost on the lease
liability and decreased by lease payments made. It is remeasured when there is a change in
future lease payments arising from a change in an index or rate, a change in assessment of
whether extension option is reasonably certain to be exercised or a termination option is
reasonably certain not to be exercised.

The Company has elected not to recognize right-of-use assets and lease liabilities for short
term and low value assets. The lease payments associated with these leases are recognized as
an expense on a straight line basis over the lease term.

5.25 Intangible assets

Intangible assets are stated at cost less accumulated amortization and impairment, if any.
Amortization is calculated on a straight-line basis over the estimated useful life of the asset.

6 USE OF ESTIMATES AND JUDGMENTS

The preparation of financial statements in conformity with the requirements of the accounting
and reporting standards as applicable in Pakistan requires management to make judgments,
estimates and assumptions that affect the application of policies and reported amounts of
assets, liabilities, income and expenses. The judgments, estimates and assumptions are based
on historical experience, current trends and various other factors that are believed to be
reasonable under the circumstances, the result of which form the basis of making the estimates
about carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates. The estimates and underlying assumptions are
reviewed on ongoing basis. Revisions to accounting estimates are recognized in the period in
which the estimate is revised, if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.

Page - 18
 Significant areas where assumptions and estimates were exercised in application of accounting
policies relate to:

6.1 Classification of investments

In classifying investments as held to maturity, the Company has determined financial assets
with fixed or determinable payments and fixed maturity. In making this judgment, the
Company evaluates its intention and ability to hold such investment to maturity.

In classifying investments as held for trading, the Company has determined securities, which
are acquired with the intention to trade, taking advantage of short-term market / interest rate
movements.

Investments which are intended to be held for an undefined period of time but may be sold in
response to the need for liquidity, changes in interest rates, equity prices or exchange rates are
classified as available for sale. Subsequent to the initial recognition at cost, quoted
investments are stated at market value. Unquoted investments are stated at cost less
impairment losses, if any.

6.2 Income tax

In making the estimates for income taxes currently payable by the Company, the management
looks, at the current income tax laws and the decision of appellate authorities on certain issues
in the past. In making the provision for deferred taxes, estimates of the Company’s future
taxable profits are taken into account.

6.3 Property and equipment / right-of-use asset

In making estimates of the depreciation method, the management uses method which reflects
pattern in which economic benefits are expected to be consumed by the Company. The
method applied is reviewed at each financial year end and if there is a change in the expected
pattern of consumption of the future economic benefits embodied in the assets, the method
would be changed to reflect the change in pattern.

6.4 Impairment of available for sale investments

The Company determines that available for sale equity investments are impaired when there
has been a significant or prolonged decline in the fair value below its cost. The determination
of what is significant or prolonged, requires judgment. In making this judgment, the Company
evaluates among other factors, the normal volatility in share price. In addition, impairment
may be appropriate when there is evidence of deterioration in the financial health of the
investee, industry and sector performance, changes in technology and operational and
financing cash flows.

Page - 19
6.5 Premium deficiency reserve

The Company carries out an analysis of loss / combined ratios for the expired period, such
ratio being calculated after taking into account the relevant IBNR provision for the
determination of premium deficiency reserve for each class of business.

6.6 Outstanding claims including incurred but not reported (IBNR)

The Company estimates the liability for claims, which include amounts relating to unpaid,
reported claims, claims incurred but not reported (IBNR) and expected claims settlement
costs. Provision for liability in respect of unpaid reported claims is made on the basis of
individual case estimates and provision for those claims which are incurred and not reported
as at the reporting date are made on the basis of specified guidelines issued by the Securities
and Exchange Commission of Pakistan through letter no. ID/PRDD/IBNR/2017/9695 dated
May 30, 2017, which states that Company should record those claims which are incurred but
not reported on the basis of collection of data of IBNR claims reserves from the ceding
companies (non-life insurers) in accordance with the share of Company on the account of
facultative and treaty business.
6.7 Reinsurance

The Company is exposed to disputes with, and possibility of defaults by, its reinsurers. The
Company monitors on a quarterly basis the evolution of disputes with and the strength of its
reinsurers.

6.8 Provisions

A provision is recognized in the statement of financial position when the Company has a legal
or constructive obligation as a result of past events and it is probable that an outflow of
economic benefits will be required to settle the obligations and a reliable estimate can be
made of the amount of the obligation.

6.9 Unearned premium reserve

The Company’s estimate of the unearned premium reserve is based on current insurance
industry practices in Pakistan and the directives issued by the Securities and Exchange
Commission of Pakistan.

Page - 20
7 PROPERTY AND EQUIPMENT

7.1 Operating fixed assets

OWNED LEASED
Furniture and fixtures, office equipment, books and Electrical installation, air-conditioning and
Building Leasehold land
computer equipment lifts
Motor Total
Furniture Office Computer Electrical Air- vehicles
PRC Tower Books Lifts PRC House* PRC Towers**
and fixtures equipment equipment installation conditioning
-------------------------------------------------------------------------------------------------- Rupees --------------------------------------------------------------------------------------------------
Net carrying value basis
Year ended December 31, 2022

Opening net book value 198,676,097 1,563,283 3,189,479 227,065 12,068,754 582,873 1,552,274 489,243 2,317,493 208,200,000 223,622 429,090,184
Addition (at cost) - 2,588,012 4,391,718 1,800 15,029,607 - - 13,107,650 12,528,621 1,177,554 - 48,824,962
Disposal (NBV)
Cost / revalued amount - (79,000) (214,247) - (34,605) - - - (2,108,566) - - (2,436,418)
Accumulated depreciation - 7,800 168,298 - 33,805 - - - 1,848,877 - - 2,058,780
*** - (71,200) (45,949) - (800) - - - (259,689) - - (377,638)
Depreciation charge (9,933,805) (221,233) (919,449) (22,811) (4,868,141) (116,575) (310,455) (2,500,918) (2,125,664) (10,450,339) - (31,469,390)
Closing net book value 188,742,292 3,858,862 6,615,799 206,054 22,229,420 466,298 1,241,819 11,095,975 12,460,761 198,927,215 223,622 446,068,118

Gross carrying value basis

Year ended December 31, 2022

Cost / revalued amount 226,201,229 14,900,224 13,069,867 667,506 57,984,107 12,559,913 23,032,657 24,513,198 23,355,021 209,906,208 223,622 606,413,552
Accumulated depreciation (37,458,937) (11,041,362) (6,454,068) (461,452) (35,754,687) (12,093,615) (21,790,838) (13,417,223) (10,894,260) (10,978,993) - (160,345,434)
Closing net book value 188,742,292 3,858,862 6,615,799 206,054 22,229,420 466,298 1,241,819 11,095,975 12,460,761 198,927,215 223,622 446,068,118

Depreciation rate (% per annum) 0% 10% 15% 10% 20% 20% 20% 20% 20%

*This represents lease hold land of 1,388 Square Yards located at House No. 30-B, Lalazar Drive, Maulvi Tamizuddin Khan Road, Karachi.
**This represents lease hold land of 7,918 Square Yards located at Plot No. 32-A, Lalazar Drive, Maulvi Tamizuddin Khan Road, Karachi.
*** Dispoals of fixed assets do not iclude any asset whose aggregating book value exceeds Rs 500,000.

Page - 21
 OWNED LEASED
Furniture and fixtures, office equipment, books and Electrical installation, air-conditioning and
Building Lease land
computer equipment lifts
Motor Total
Furniture Office Computer Electrical Air- vehicles
PRC Tower Books Lifts PRC House* PRC Towers**
and fixtures equipment equipment installation conditioning
---------------------------------------------------------------------------------------------------------------------------------------- Rupees -------------------------------------------------------------------------------------------

Net carrying value basis

Year ended December 31, 2021

Opening net book value 11,388,799 1,344,585 2,199,937 252,295 13,374,684 728,591 1,940,343 611,554 2,896,867 305,182 223,622 35,266,460
Additions - 364,020 1,413,952 - 1,464,159 - - - - 650,171 - 3,892,302
Revaluations 187,856,738 - - - - - - - - 207,270,527 - 395,127,265
Depreciation charge for the year (569,440) (145,322) (424,410) (25,230) (2,770,089) (145,718) (388,069) (122,311) (579,374) (25,880) - (5,195,843)
Closing net book value 198,676,097 1,344,585 2,199,937 252,295 13,374,684 728,591 1,940,343 611,554 2,896,867 305,182 223,622 429,090,184

Gross carrying value basis

Year ended December 31, 2021

Cost / revalued amount 226,201,229 12,312,212 8,678,149 665,706 42,954,500 12,559,913 23,032,657 11,405,548 10,826,400 208,728,654 223,622 557,588,590
Accumulated depreciation (27,525,132) (10,748,929) (5,488,670) (438,641) (30,885,746) (11,977,040) (21,480,383) (10,916,305) (8,508,907) (528,654) - (128,498,406)
Closing net book value 198,676,097 1,563,283 3,189,479 227,065 12,068,754 582,873 1,552,274 489,243 2,317,493 208,200,000 223,622 429,090,184

Depreciation rate (% per annum) 5% 10% 15% 10% 20% 20% 20% 20% 20% 5% -

*This lease hold land of 1,388 Square Yards are located at House No. 30-B, Lalazar Drive, Maulvi Tamizuddin Khan Road, Karachi.
**This lease hold land of 7,918 Square Yards are located at Plot No. 32-A, Lalazar Drive, Maulvi Tamizuddin Khan Road, Karachi.

7.2 Fair value measurement

The fair value of Land and Building is determined by Iqbal A. Nanjee & Company (Private) Ltd which is an external, independent property valuers having appropriate recognized professional qualifications and recent
experience in the location and category of the property being valued and also registered with Pakistan Bankers Association. The fair value of land are based on assumptions considered to be in level 3 i.e, inputs other than
quoted prices included within level 3 that are not observable either directly or indirectly.

Page - 22
 December 31, December 31,
7.3 Forced sales value 2022 2021
Note ------------- (Rupees) -------------
Class of assets
Building- PRC tower 158,341,968 158,341,968
Leasehold land- PRC House 166,560,000 166,560,000
324,901,968 324,901,968

8 RIGHT OF USE ASSETS

8.1 Assets - Leasehold land

Net carrying value basis

Opening net book value 1,801,531,334 25,475,815
Revaluation gain during the year - 1,781,326,378
Accumulated depreciation 8.2 (161,925,757) (5,270,859)
Closing net book value 1,639,605,577 1,801,531,334

Gross carrying value basis

Cost / revalued amount 1,801,531,334 1,806,802,193
Accumulated depreciation 8.2 (161,925,757) (5,270,859)
1,639,605,577 1,801,531,334
8.2 Accumulated depreciation

Balance at beginning of the year 5,270,859 3,513,906

Depreciation for the year 156,654,899 1,756,953
Balance at end of the year 161,925,757 5,270,859

8.3 The Company has entered into lease arrangement with Karachi Port Trust (KPT) for lease of
land. The remaining lease term (useful life) of the right of use asset is 9.5 years. (2021: 10.5
years)

9 CAPITAL WORK-IN-PROGRESS

Computer software 9.1 & 9.2 10,083,343 8,474,168

9.1 The movement in capital work in progress is as

follows:

Balance at beginning of the year 8,474,168 8,474,168

Additions durring the year 1,609,175 -
Balance at end of the year 10,083,343 8,474,168

9.2 This pertains to implementation of ERP and development of customized system solution which
includes Reinsurance, Administration, Human Resource, Audit, Accounting and Finance,
Investment, Corporate Affairs and Retakaful modules.

Page - 23
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------
10 ASSETS IN BANGLADESH - NET

Assets and Liabilities in Bangladesh comprise of :

Assets
Fixed assets
Land and building 8,608,000 8,608,000
Furniture and fixtures 4,000 4,000
8,612,000 8,612,000
Investments
Stock and shares 7,112,000 7,112,000
Debentures 250,000 250,000
7,362,000 7,362,000
15,974,000 15,974,000
Liabilities
Outstanding claims 23.4 (4,952,000) (4,952,000)
Other liabilities (809,000) (809,000)
(5,761,000) (5,761,000)
10,213,000 10,213,000
Provision for loss on net assets in Bangladesh (10,213,000) (10,213,000)
- -
11 INVESTMENT PROPERTY

PRC Building, Karachi 6,014,475 6,014,475

Electrical installations 47,174 47174.4
Air conditioning plant 67,158 67158.4
Lifts 52,331 52331.12
6,181,139 6,181,139

Lease holdland 244,750,000 244,750,000

PRC Towers, Karachi 461,082,104 461,082,104
PRC House 10,261,360 10,261,360
716,093,464 716,093,464
722,274,603 722,274,603
11.1 Forced sales value

Owned 4,811,580 4,811,580

PRC building Karachi
Leased
Leasehold land 1,425,240,000 1,425,240,000
PRC tower 369,464,592 369,464,592
PRC House 8,209,088 8,209,088
1,807,725,260 1,807,725,260

Page - 24
11.2 With effect from December 31, 2021, the Company has changed its accounting policy from
cost model to revaluation model for its buildings and Lands. The management is of the view
that the change provides more reliable and more relevant information because it deals more
accurately with the components of property. Investment property is remeasured at fair value,
which is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. Gains or losses
arising from changes in the fair value of investment property must be included in net profit or
loss for the period in which it arises. Where a property has previously been measured at fair
value, it should continue to be measured at fair value until disposal, even if comparable market
transactions become less frequent or market prices become less readily available.

11.3 The fair value of land and building was privously determined by Iqbal A. Nanjee & Co. Private
Limited which is an external, independent property valuers having appropriate recognized
professional qualifications and recent experience in the location and category of the property
being valued and also registered with Pakistan Bankers Association. However, as per board the
relvaution shall be carried out once in every three year as the valuation does not materially
differs from the carrying values.

11.4 The fair value of the investment properties has been categorized as a Level 3 fair value (based
on the inputs to the valuation techniques used) and which is considered as highest and best use
of investment property.

Page - 25
12 INVESTMENTS IN EQUITY SECURITIES

2022 2021
Unrealized gain / Unrealized gain /
Cost Impairment Carrying amount Cost Impairment Carrying amount
(loss) (loss)
Note --------------------------------------------------------------------------------------------- Rupees ---------------------------------------------------------------------------------------------
Available for sale
Related parties
Listed shares 12.1 88,518,391 - 556,230,535 644,748,926 88,521,808 - 603,373,907 691,895,715
Unlisted shares 12.2 1,235,842 (618,227) - 617,615 1,235,842 (618,227) - 617,615
Mutual funds 12.3 800,000,000 (223,986,732) (96,670,800) 479,342,468 800,000,000 (223,986,732) - 576,013,268
889,754,233 (224,604,959) 459,559,735 1,124,709,009 889,757,650 (224,604,959) 603,373,907 1,268,526,598
Others
Listed shares 12.4 421,480,106 - 470,514,543 891,994,648 421,448,606 - 759,610,701 1,181,059,307
Unlisted shares 12.5 1,372,264 (1,372,264) - - 1,372,264 (1,372,264) - -
Mutual funds 12.6 792,488,811 (76,694,174) (111,269,412) 604,525,225 792,488,810 (76,694,174) 76,379,250 792,173,886
1,215,341,180 (78,066,438) 359,245,131 1,496,519,873 1,215,309,680 (78,066,438) 835,989,951 1,973,233,193
Sub total 2,105,095,413 (302,671,397) 818,804,866 2,621,228,882 2,105,067,330 (302,671,397) 1,439,363,858 3,241,759,791

Held for trading

Related parties
Listed shares 12.7 71,616,662 - (10,467,977) 61,148,685 104,552,855 - (32,936,193) 71,616,662

Others
Listed shares 12.8 102,337,463 - (29,274,963) 73,062,500 88,158,765 - (12,702,275) 75,456,490
Sub total 12.7 & 53 173,954,125 - (39,742,940) 134,211,185 192,711,620 - (45,638,468) 147,073,152

Grand Total 2,279,049,538 (302,671,397) 779,061,926 2,755,440,067 2,297,778,950 (302,671,397) 1,393,725,390 3,388,832,943

Page - 26
 2022 2021
Number of Unrealized gain / Number of Unrealized gain /
shares / Cost Impairment Carrying amount shares / Cost Impairment Carrying amount
(loss) (loss)
certificates / certificates / units
units --------------- Rupees ---------------- --------------- Rupees ----------------
Available for sale - Related parties

12.1 Listed shares

National Bank of Pakistan 6,359,119 6,824,793 - 143,186,824 150,011,617 6,359,119 6,824,793 - 212,691,995 219,516,788
Pakistan State Oil Company Limited 14,042 371,225 - 1,650,683 2,021,908 14,042 371,225 - 2,182,874 2,554,099
Pakistan Petroleum Limited 546,480 27,388,953 - 9,848,194 37,237,147 546,480 27,388,953 - 15,804,826 43,193,779
Sui Southern Gas Company Limited 12,694,227 36,461,488 - 80,579,285 117,040,773 12,694,227 36,461,488 - 81,467,881 117,929,369
Sui Northern Gas Pipelines Limited * 8,698,203 17,107,194 - 309,510,329 326,617,523 8,698,203 17,110,611 - 273,844,279 290,954,890
Pakistan Engineering Company Limited 43,776 364,738 - 11,455,220 11,819,958 43,776 364,738 - 17,382,052 17,746,790
28,355,847 88,518,391 - 556,230,535 644,748,926 28,355,847 88,521,808 - 603,373,907 691,895,715
12.2 Unlisted shares**

State Bank of Pakistan 4,900 517,615 - - 517,615 4,900 517,615 - - 517,615

Industrial Development Bank of Pakistan *** 6,213 618,227 (618,227) - - 6,213 618,227 (618,227) - -
National Investment Trust Limited 79,200 100,000 - - 100,000 79,200 100,000 - - 100,000
90,313 1,235,842 (618,227) - 617,615 90,313 1,235,842 (618,227) - 617,615
12.3 Mutual funds

National Investment Unit Trust 8,292,733 800,000,000 (223,986,732) (96,670,800) 479,342,468 8,292,733 800,000,000 (223,986,732) - 576,013,268
Grand total 36,738,893 889,754,233 (224,604,959) 459,559,735 1,124,709,009 36,738,893 889,757,650 (224,604,959) 603,373,907 1,268,526,598

* Frozen shares
This represents 8,698,203 ordinary shares of Sui Northern Gas Pipelines Limited which are frozen on the basis of Government of Pakistan (GoP) directives F.10(6&14)EN-94/2005 dated April 13, 2005, as the same form part of the strategic shareholding under the
control of the GoP. As a result, the Company is restricted from selling, transferring, encumbering or otherwise disposing of or dealing with any interest in the said shares, including any future bonus / right shares in respect thereof.

** Name of Company 2022 2021

CEO/Managing Director Breakup value CEO/Managing Director Breakup value

State Bank of Pakistan Dr. Reza Baqir - Dr. Reza Baqir 1,156,631
Industrial Development Bank of Pakistan Not available Not available
National Investment Trust Limited Adnan Afridi - Adnan Afridi 12,668

*** Industrial Development Bank of Pakistan (IDBP) has been dissolved and all assets and liabilities are vested in the Industrial Development Bank Limited (IDBL) vide Government of Pakistan (GoP)'s Finance division's S.R.O. (1)/2012 dated November 13, 2012.

Page - 27
 Available for sale - Others

12.4 Listed shares

2022 2021
Number of Unrealized gain / Carrying Number of Unrealized gain / Carrying
Cost Impairment Cost Impairment
shares (loss) amount shares (loss) amount
--------------- Rupees ---------------- --------------- Rupees ----------------
Banks
Faysal Bank Limited - - - - - - - - - -
MCB Bank Limited 500,000 93,131,314 - (35,051,314) 58,080,000 500,000 93,131,314 - (16,456,314) 76,675,000
Habib Bank Limited 700,000 83,042,124 - (38,431,123) 44,611,001 700,000 83,042,124 - (1,408,124) 81,634,001
UBL Bank Limited 500,000 60,488,901 - (10,113,901) 50,375,000 500,000 60,488,901 - 7,801,099 68,290,000
1,700,000 236,662,339 - (83,596,337) 153,066,001 1,700,000 236,662,339 - (10,063,338) 226,599,001
Insurance
Adamjee Insurance Company Limited 1,398,536 32,124,622 - 7,272,137 39,396,759 1,398,536 32,124,622 - 23,816,818 55,941,440
Asia Insurance Company Limited 40,055 224,800 - 340,382 565,182 36,414 224,800 - 351,269 576,069
Crescent Star Insurance Company Limited - - - - - - - - - -
Habib Insurance Company Limited 12,700 1,724 - 74,476 76,200 12,700 1,724 - 86,795 88,519
United Insurance Company of Pakistan
Limited 1,249,635 166,165 - 9,331,061 9,497,226 1,249,635 166,165 - 9,830,915 9,997,080
2,700,926 32,517,311 - 17,018,056 49,535,368 2,697,285 32,517,311 - 34,085,797 66,603,108
Personal Goods
Khurshid Spinning Mills Limited 7,600 5,700 - 86,488 92,188 7,600 5,700 - 59,660 65,360
Crescent Jute Products Limited 157,314 - - - - 157,314 - - - -
Usman Textile Mills Limited 300 - - - - 300 - - - -
Muhammad Farooq Textile Mills Limited 4,100 - - - - 4,100 - - - -
Taj Textile Mills Limited 5,600 - - - - 5,600 - - - -
174,914 5,700 - 86,488 92,188 174,914 5,700 - 59,660 65,360
General Industries
Packages Limited 821,714 90,388,540 - 213,777,114 304,165,654 821,714 90,388,540 - 318,225,181 408,613,721
Hashmi Can Company Limited 23,887 31,500 - 165,807 197,307 5,250 - - - -
845,601 90,420,040 - 213,942,921 304,362,961 826,964 90,388,540 - 318,225,181 408,613,721
Household Goods
Hussain Industries Limited 15,820 - - 471,436 471,436 15,820 - - 316,400 316,400
Towellers Limited 129,759 1,048,453 - 14,036,031 15,084,484 129,759 1,048,453 - 12,706,001 13,754,454
145,579 1,048,453 - 14,507,467 15,555,920 145,579 1,048,453 - 13,022,401 14,070,854
Food Producers
Imperial Sugar Mills Limited - - - - - - - - - -
Jauharabad Sugar Mills Limited - - - - - - - - - -
Shahtaj Sugar Mills Limited - - - - - - - - - -
Sindh Abadgar's Sugar Mills Limited 65,500 327,500 - 505,660 833,160 65,500 327,500 - 649,760 977,260
65,500 327,500 - 505,660 833,160 65,500 327,500 - 649,760 977,260
Construction and Materials
Dadabhoy Cement Industries Limited 17,300 - - - - 17,300 - - - -
Zeal Pak Cement Factory Limited 39,130 - - - - 39,130 - - - -
56,430 - - - - 56,430 - - - -
5,688,950 360,981,343 - 162,464,255 523,445,598 5,666,672 360,949,843 - 355,979,461 716,929,304

Page - 28
 2022 2021
Number of Unrealized gain / Carrying Number of Unrealized gain / Carrying
Cost Impairment Cost Impairment
shares (loss) amount shares (loss) amount
--------------- Rupees ---------------- --------------- Rupees ----------------

5,688,950 360,981,343 - 162,464,255 523,445,598 5,666,672 360,949,843 - 355,979,461 716,929,304

Tobacco
Philip Morris (Pakistan) Limited 10,580 18,403 - 2,881,799 2,900,202 10,580 18,403 - 8,678,357 8,696,760
Pakistan Tobacco Company Limited 3,000 9,961 - 5,959,297 5,969,258 3,000 9,961 - 3,582,809 3,592,770
13,580 28,364 - 8,841,096 8,869,460 13,580 28,364 - 12,261,165 12,289,529
Electricity
The Hub Power Company Limited 480,000 8,884,043 - 21,394,357 30,278,400 480,000 8,884,043 - 25,359,157 34,243,200
K-Electric Limited 100,000 223,790 - 46,210 270,000 100,000 223,790 - 120,210 344,000
Kot Addu Power Company Limited 30,000 1,481,678 - (682,178) 799,500 30,000 1,481,678 - (511,178) 970,500
610,000 10,589,511 - 20,758,389 31,347,900 610,000 10,589,511 - 24,968,189 35,557,700
Refinery
National Refinery Limited 250,000 14,089,542 - 29,922,958 44,012,500 250,000 14,089,542 - 57,057,958 71,147,500
Engineering

Dewan Automotive Engineering Limited 52,333 - - - - 52,333 - - - -

Forestry and Paper
Security Papers Limited 928,689 195,915 - 86,682,941 86,878,856 928,689 195,915 - 111,144,609 111,340,524
Chemicals
ICI Pakistan Limited 307,281 35,595,431 - 161,844,903 197,440,334 307,281 35,595,431 - 198,199,318 233,794,749

Total 7,850,833 421,480,106 - 470,514,542 891,994,648 7,828,555 421,448,606 - 759,610,701 1,181,059,307

2022 2021
12.5 Unlisted shares Note ---------- Rupees ----------

Cost of investment in unlisted companies 12.5.1 1,372,264 1,372,264

Less: provision for diminution in value (1,372,264) (1,372,264)
- -
2022 2021
Unrealized gain / Carrying Unrealized gain / Carrying
Number of Cost Impairment Number of Cost Impairment
(loss) amount (loss) amount
shares --------------- Rupees ---------------- shares --------------- Rupees ----------------

12.5.1 Cost of i nvestment i n unl i sted compani es

Insurance
Indus Assurance Limited 25,000 250,000 (250,000) - - 25,000 250,000 (250,000) - -
Pakistan Guarantee Insurance 22,029 - - - - 22,029 - - -
Company Limited Company Limited
Sterling Insurance 23,250 - - - - 23,250 - - -
Union Insurance Corporation of 56,227 - - - - 56,227 - - -
Pakistan 126,506 250,000 (250,000) - - 126,506 250,000 (250,000) - -

Cotton and Texti l e

Afsar Textile Mills Limited 1,000 9,950 (9,950) - - 1,000 9,950 (9,950) - -
Brothers Textile Mills Limited 353 - - - 353 - - - -
Sahrish Textile Mills Limited 13,510 - - - 13,510 - - - -
Kohinoor Cotton Mills Limited 22,397 219,801 (219,801) - - 22,397 219,801 (219,801) - -
37,260 229,751 (229,751) - - 37,260 229,751 (229,751) - -
Chemi cal
Synthetic Chemical Limited 20,000 200,000 (200,000) - - 20,000 200,000 (200,000) - -
Vanaspati and Al l i ed Industri es
Burma Oil Limited 861 6,470 (6,470) - - 861 6,470 (6,470) - -
Universal Oil Mills Limited 30,000 - - - - 30,000 - - - -
Burma Soap Limited 64 640 (640) - - 64 640 (640) - -
30,925 7,110 (7,110) - - 30,925 7,110 (7,110) - -
Food Products
Pangrio Sugar Mills Limited 100,000 - - - - 100,000 - - - -
El ectri ci ty
Southern Electric Power Company Limited 13,963 - - - - 13,963 - - - -
Mi scel l aneous
Arag Industries Limited 133,333 685,403 (685,403) - - 133,333 685,403 (685,403) - -
461,987 1,372,264 (1,372,264) - - 461,987 1,372,264 (1,372,264) - -
Less: Provision for diminution in value (1,372,264) (1,372,264)
461,987 - 461,987 -

12.5.2 Financial statements of these companies are not available, therefore, the break-up value and the name of the Chief Executive Officer is not presented.

12.6 Mutual funds

Page - 29
2022 2021
12.6 Mutual funds
2022 2021
Unrealized gain / Unrealized gain /
Number of Cost Impairment Carrying amount Cost Impairment Carrying amount
(loss) Number of units (loss)
units
--------------- Rupees ---------------- --------------- Rupees ----------------
Open-End Mutual Funds
JS Value Fund 50,951 2,267,483 - 4,917,118 7,184,601 50,951 2,267,483 - 6,191,431 8,458,914
NAFA Stock Fund 20,671,728 400,000,000 (76,694,174) (54,149,592) 269,156,234 20,671,728 400,000,000 (76,694,174) - 323,305,826
HBL Growth Funds - Class B Segment 15,000,000 105,632,400 - 76,571,100 182,203,500 15,000,000 105,632,400 - 151,008,600 256,641,000
35,722,679 507,899,883 (76,694,174) 27,338,626 458,544,335 35,722,679 507,899,883 (76,694,174) 157,200,031 588,405,740
Close-End Mutual Funds
HBL Growth Funds - Class A 30,406,721 284,541,231 - (138,588,969) 145,952,262 30,406,721 284,541,230 - (80,816,199) 203,725,031
HBL Investment Funds - Class A 17,246 47,697 - (19,069) 28,628 17,246 47,697 - (4,582) 43,115
30,423,967 284,588,928 - (138,608,038) 145,980,890 30,423,967 284,588,927 - (80,820,781) 203,768,146
66,146,646 792,488,811 (76,694,174) (111,269,412) 604,525,225 66,146,646 792,488,810 (76,694,174) 76,379,250 792,173,886

Held-for-trading

12.7 Related parties

Listed shares
National Bank of Pakistan 399,266 13,782,662 - (4,363,977) 9,418,685 399,266 19,388,357 - (5,605,695) 13,782,662
Oil & Gas Development Authority Limited 350,000 30,170,000 - (2,289,000) 27,881,000 350,000 42,592,500 - (12,422,500) 30,170,000
Pakistan Petroleum Limited 350,000 27,664,000 - (3,815,000) 23,849,000 350,000 42,571,998 - (14,907,998) 27,664,000
1,099,266 71,616,662 - (10,467,977) 61,148,685 1,099,266 104,552,855 - (32,936,193) 71,616,662

12.8 Others- listed shares

Cement
Attock Cement Limited 69,000 9,588,240 - (5,686,290) 3,901,950 69,000 10,408,075 - (819,835) 9,588,240
Technology and Communication
Pakistan Telecommunication
Company Limited 319,500 2,779,650 - (830,700) 1,948,950 319,500 4,169,475 - (1,389,825) 2,779,650
Commercial Bank
MCB 200,000 26,880,973 (3,648,973) 23,232,000
United Bank Limited 250,000 34,145,000 - (8,957,500) 25,187,500 250,000 40,200,850 - (6,055,850) 34,145,000
Construction
Aisha Steel Mills Limited 700,000 10,542,000 - (4,795,000) 5,747,000 700,000 10,139,080 - 402,920 10,542,000
Household
Pak Elektron Limited 550,000 12,386,000 - (5,263,500) 7,122,500 550,000 18,494,685 - (6,108,685) 12,386,000
Chemical
Fauji Fertilizer Company Limited 60,000 6,015,600 - (93,000) 5,922,600 60,000 4,746,600 - 1,269,000 6,015,600
Sub total of others 2,148,500 102,337,463 - (29,274,963) 73,062,500 1,948,500 88,158,765 - (12,702,275) 75,456,490

Page - 30
13 INVESTMENTS IN DEBT SECURITIES 2022 2021
Cost Carrying value/ Cost Carrying value/
Note ------------------- Rupees ------------------ ------------------- Rupees ------------------

Investments - Held to maturity

Pakistan Investment Bonds - fixed 13.1 & 13.2 3,825,209,817 3,873,596,120 1,595,597,300 1,586,280,288
Pakistan Investment Bonds - floating 13.2 554,936,654 550,410,809 554,936,654 550,932,749
Treasury Bills 13.2 4,928,548,850 5,180,006,150 6,475,082,500 6,576,126,800
Term Finance Certificates 13.3 99,840,000 99,840,000 99,880,000 99,880,000
53 9,408,535,321 9,703,853,079 8,725,496,454 8,813,219,837
Investments - Available for sale

Pakistan Investment Bonds 13.4 195,481,125 203,173,425 331,407,375 360,849,397

9,604,016,446 9,907,026,504 9,056,903,829 9,174,069,234

13.1 This includes Pakistan Investment Bonds amounting to Rs. 1,108 million (2021: Rs. 308 million) deposited with the State Bank of Pakistan as required by section 29 of the Insurance Ordinance, 2000.

13.2 Held-to-maturity - secured 2022 2021 2022 2021 2022 2021

Treasury bills Pakistan Investment Bonds - fixed Pakistan Investment Bonds - floating
----------------------------------------------- Rupees in million --------------------------------------------------

Carrying value 5,180.01 6,576.13 3,873.60 1,586.28 550.41 550.93

Tenure up to 12 up to 12 3 to 10 years 3 to 10 years 3 to 5 years 3 to 5 years

months months
Face value - Rupees in million 6,475 6,475 4,287 1,595 550 555
Market value - Rupees in million 6,576 6,576 3,873 1,586 550 551
January 2022 to January 2022 to June 2023 to July 2022 to June 2023 to June June 2023 to June
Maturity dates
June 2022 June 2022 September 2029 September 2029 2025 2025
Profit repayment - frequency On maturity On maturity Half yearly Half yearly Half yearly Half yearly
Principal repayment - frequency On maturity On maturity On maturity On maturity disposal disposal
Effective interest rate / 13.10% 7.43% 9.36% 8% 11.82%
coupon rate - per annum to 15.99% to 11.38% to 13.58% to 12% 17.17% to 17.38% to 11.87%

13.3 This represent investment in Term Finance Certificate having an aggregate face value Rs. 99.84 million (2021: Rs. 99.84 million) carrying markup at 6 months KIBOR + 1%. These have been placed with
Habib Bank Limited for a term of 10 years, maturing on 2028. Accrued profit on these certificates amounting to Rs. 1.2 million (2021: Rs.0.949 0.571 million).

December 31, December 31,

2022 2021
------------- (Rupees) -------------

13.4 Available for sale - secured 203.17 360.85

Pakistan Investment Bonds

Tenure 3 years to 10 years 3 years to 10 years

Face value - Rupees in million 225 365

Market value - Rupees in million 203 360.85
Maturity dates July 2022 to July 2022 to
September 2029 September 2029
Profit repayment - frequency Half yearly Half yearly
On maturity / On maturity /
Effective interest rate / coupon rate - 9% 7.25%
per annum to 10.00% to 10.00%
Page - 31
 December 31, December 31,
2022 2021
14 LOANS AND OTHER RECEIVABLES Note ------------- (Rupees) -------------

Loans to employees 14.1 80,494,850 74,019,617

Accrued investment income 14.2 139,927,517 88,573,724
Sundry receivables - net 14.3 100,726,049 11,410,766
Receivable from tenants 14.4 141,339,898 111,840,619
462,488,314 285,844,726

14.1 Loans to employees

Non-current portion 66,106,300 51,097,868

Current portion 14,388,550 22,921,749
14.1.1 80,494,850 74,019,617

14.1.1 No loan has been provided to the Directors by the Company. Details of loans to Executives of
the Company is as under:

Balance at beginning of the year 970,711 1,336,255

Add: disbursements during the year 16,357,010 1,050,000
Less: receipts during the year 5,850,658 (1,415,544)
Balance at end of the year 23,178,379 970,711

14.1.2 Loans to employees represent mark-up free loans and are secured against retirement benefits of
the respective employee including, where applicable, documents of assets for which the loan
has been given. None of the amount is either past due or impaired, consequently no provision
for bad or doubtful loans has been made.

14.1.3 The maximum month-end amount of these loan during the year has been amounting to Rs.
84,294,852 (2021: Rs. 84,278,202).

14.2 Accrued investment income

Dividend receivable
Interest on held to maturity debt securities 123,087,440 67,887,780
Interest on available for sale debt securities 16,840,077 20,685,944
139,927,517 88,573,724
14.3 Sundry receivables - net

Considered good
Advances 59,203,431 2,415,140
Security deposits 6,554,922 4,942,065
Other receivable 37,892,198 4,053,560
103,650,551 11,410,765

Page - 32
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------

Considered doubtful
Export Credit Guarantee schemes 14.3.1 56,142,435 56,142,435
Receivable against National Co-insurance
Scheme 4,939,471 4,939,471
Receivable against War Risk Insurance-
Karachi 14.3.2 7,724,303 7,724,303
Receivable against War Risk Insurance-
Lahore 10,541,524 10,541,524
Receivable from Investment Corporation
of Pakistan 868,470 868,470
Advances - 2,413,260
Other receivable - 511,243
80,216,203 83,140,706
183,866,754 94,551,471
Less: provision for doubtful debts 14.3.3 (83,140,705) (83,140,705)
Sundry receivables - net 100,726,049 11,410,766

14.3.1 This represents the total amount of income tax deposited by the Company since the year 1984-
85 to the year 2001-02 in respect of Export Credits Guarantee Scheme (ECGS). The income of
the respective years under the Scheme was transferred to the Government. The income tax
department, however, taxed ECGS income by clubbing it with the Company's income. The
Company's appeal in this respect which was pending before Honorable High Court has been
dismissed. This amount was previously classified as advance tax and has been transferred as
amount receivable from the Ministry of Finance, Government of Pakistan.

The Company had filed an appeal in the Honorable Supreme Court of Pakistan (SCP) in this
respect which vide order dated August 21, 2007 granted leave to appeal filed by the Company
against the judgment of the Honorable High Court. The matter is now before Alternate Dispute
Resolution Committee (ADRC).

The ADRC therefore concluded that they would refer the matter to the FBR for providing a
legal expert to the ADRC or to re-constitute the ADRC by including therein the legal expert
who can interpret and decide on the applicability of the Article 165A of the Constitution of
Pakistan in this case.

FBR via letter No. 2(48) IT-Jud/2006-ADR/45098-R regretted the request for reconstitution of
ADRC. Therefore, the Company pursued its case with the SCP which has already granted a
leave to appeal against order of High Court, has remanded back the case to the High Court of
Sindh where the matter is still pending for date of hearing. The Company has recorded
provision amounting to Rs. 56.142 million (2021: Rs. 56.142 million) in these financial
statements.

Page - 33
14.3.2 Amount is receivable from Government of Pakistan against expenses for running the affairs of
War Risk Insurance Department (the Department) working under the supervision of Pakistan
Insurance Corporation (defunct). The Department was set up for insurance of losses which
could have occurred due to war.

14.3.3 Provision for doubtful debts

Balance at beginning of the year 83,140,705 83,294,944

(Reversal) made during the year - (154,239)
Balance at end of the year 83,140,705 83,140,705

14.4 Receivable from tenants

Rentals 134,654,995 104,085,710

Electricity charges 6,774,801 7,844,807
Provision against electricity charges (89,898) (89,898)
6,684,903 7,754,909
141,339,898 111,840,619

15 RECEIVABLE FROM SINDH REVENUE BOARD

2,573,888,727 2,573,888,727

15.1 The aggregate amount of Rs. 2,573.889 million (2021: Rs. 2,573.889 million) paid has been
recorded as “receivable from SRB” in the financial statements. Moreover, the Company has
not recorded provision against the orders passed by SRB in pursuance of Appellate Order
dated February 01, 2016 in Appeal No. AT-02/2013 and order dated February 03, 2016 in
Appeal No. AT-109/2015.

16 INSURANCE / REINSURANCE RECEIVABLES

Amount due from other reinsurers 721,774,617 181,652,226

Amount due from other insurers 16.1 & 16.2 17,178,288,151 14,553,749,153
17,900,062,768 14,735,401,379
Less: provision for impairment in due
from other insurers / reinsurers 16.3 (506,687,816) (1,049,198,285)
17,393,374,952 13,686,203,094
Premium and claim reserves retained by cedants 24,831,633 24,831,633
Less: provision for impairment in
premium and claim (24,831,633) (24,831,633)
- -
16.4 17,393,374,952 13,686,203,094

16.1 This includes an amount of Rs. 266 million (2021: Rs. 565.9 million) which is under litigation
and the Company has recorded a provision of Rs. 243.3 million (2021: Rs. 243.3 million) in
respect of these balances.
Page - 34
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------

16.2 This includes an amount of Rs. 10,729,548,945 (2021: Rs. 8,788,498,324) due from a related
party, National Insurance Company Limited. The age analysis of amount due from related
party is as follows:

Up to 3 months 5,043,039,966 4,617,664,380

Over 3 months and above 5,686,508,979 4,170,833,944
54 10,729,548,945 8,788,498,324

16.3 Movement of provision for impairment in

due from other insurers / reinsurers

Balance at beginning of the year 1,049,198,285 1,040,262,155

(Reversal) / provision made during the year 16.3.1 (542,510,469) 8,936,130
Balance at end of the year 506,687,816 1,049,198,285

16.3.1 This represents reversal of provision in terms of Board approved policy.

16.4 These balances are based on underlying information and returns submitted by insurers /
reinsurers periodically. As per the requirements mentioned in SECP letter no. ID/Offsite-
I/Misc/2023/631 dated February 9, 2023 addressed to Insurance Association of Pakistan, the
Company is in the process to reconcile and agree the balances relating to other insurers /
reinsurers to ensure that the balances are accurate and complete in respect of information
available. In this regard, the proposed timeline by Securities and Exchange Commission of
Pakistan (SECP) for conclusion of reconciliation activity is December 31, 2023.

17 REINSURANCE RECOVERIES AGAINST OUTSTANDING

CLAIMS INCLUDING IBNR

Facultative business 17.1 13,407,154,617 3,585,888,847

Treaty 17.2 1,013,554,694 1,022,238,388
14,420,709,311 4,608,127,235

17.1 Facultative business

Fire 410,710,801 317,808,041

Marine cargo 5,425,012 -
Marine hull 14,565,192 65,747,545
Accident 13,933,067 -
Aviation 916,208,568 1,642,925,619
Engineering 12,046,311,977 1,559,407,642
13,407,154,617 3,585,888,847

Page - 35
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------
17.2 Treaty

Proportional - 376,534,914
Non-proportional 1,013,554,694 645,703,474
1,013,554,694 1,022,238,388
18 DEFERRED COMMISSION

Facultative business 18.1 361,765,142 344,747,514

Treaty 18.2 569,616,997 461,466,692
931,382,139 806,214,206

18.1 Facultative business

Fire 53,334,034 98,891,830

Marine cargo 6,334,980 252,683
Marine hull 2,640,357 3,521,874
Accidents and others 7,220,759 3,709,144
Aviation 117,381,006 104,731,532
Engineering 174,854,006 133,640,451
361,765,142 344,747,514
18.2 Treaty

Proportional 563,848,844 458,356,101

Non-proportional 5,768,153 3,110,591
569,616,997 461,466,692
19 PREPAYMENTS

Prepaid reinsurance ceded - facultative

business 19.1 8,157,303,075 7,399,530,623
Prepaid reinsurance ceded - treaty business 19.2 783,025,375 323,300,560
8,940,328,450 7,722,831,183
Others 3,214,187 714,653
8,943,542,637 7,723,545,836
19.1 Prepaid reinsurance ceded - facultative business

Fire 38,243,295 40,842,152

Marine Cargo 89,749,062 -
Marine hull 23,645,065 22,227,920
Accidents and others 80,909,326 3,150,578
Aviation 4,408,006,288 4,237,630,265
Engineering 3,516,750,039 3,095,679,708
8,157,303,075 7,399,530,623

Page - 36
 December 31, December 31,
2022 2021
------------- (Rupees) -------------

19.2 Prepaid reinsurance ceded - treaty business

Proportional - -
Non-proportional 783,025,375 323,300,560
783,025,375 323,300,560

20 CASH AND BANK BALANCES

Cash in hand 335,020 208,191

Cash at bank in:
Saving accounts
- Local currency 1,541,818,348 38,996,136
- Foreign currency 686,452,556 285,809,585
20.1 2,228,270,904 324,805,721
Current accounts
- Local currency 711,204,528 609,870,820

Dividend accounts
- Saving accounts 20.1 67,030,422 64,630,903
- Current accounts 24,049,683 141,325,724
91,080,105 205,956,627
3,030,890,557 1,140,841,359

20.1 Saving accounts carry markup at the rates ranging from 13% to 15% (2021: 11.25% to 15% )
per annum.

21 TOTAL ASSETS FROM WINDOW RETAKAFUL OPERATIONS -

OPERATOR'S FUND

Assets
Investments 20,196,059 18,307,796
Other receivable 4,084,045 2,865,576
Qard-e-hasna to Participant's Retakaful Fund 300,000,000 244,254,221
Deferred commission expense 103,795,713 80,659,235
Bank balances 111,537,025 110,526,812
Total Assets 539,612,842 456,613,640

Page - 37
22 SHARE CAPITAL

22.1 Authorized share capital

2022 2021
(Number of shares)

2,500,000,000 2,500,000,000 Ordinary shares of Rs.10/- 25,000,000,000 25,000,000,000

each.

22.2 Issued, subscribed and paid-up share capital

2022 2021
(Number of shares)
Ordinary shares of
8 8 80 80
Rs.10/- each fully
paid in cash.
Ordinary shares of
5,000,000 5,000,000 50,000,000 50,000,000
Rs.10/- each issued
for consideration
Ordinary shares of
894,999,992 294,999,992 8,949,999,920 2,949,999,920
Rs.10/- each issued as
900,000,000 300,000,000 fully paid bonus 9,000,000,000 3,000,000,000
shares.
December 31, December 31,
2022 2021
------------- (Rupees) -------------
22.3 Shares of the Company held by related parties: Percentage of
Number of shares holding (%)

Ministry of Commerce 4,590,000,000 51.00%

State Life Insurance Corporation of Pakistan 2,196,966,030 24.41%
6,786,966,030 75.41%

23 RESERVES

Capital
Reserve for exceptional losses 23.1 281,000,000 281,000,000
Revaluation reserve on available for sale
investments 23.2 597,118,524 1,054,853,340
Revenue
Retained earnings 1,135,296,316 5,413,640,105
General reserve 1,886,715,296 1,777,419,085
3,900,130,136 8,526,912,530

Page - 38
23.1 These reserves for exceptional losses was set aside prior to 1979 and was charged to statement
of profit and loss with the provision of Income Tax Act, 1922 (repealed), and has been so
retained to date.

23.2 This represents unrealized gain on remeasurement of available for sale investments at fair
value and is not available for distribution. This shall be transferred to statement of profit and
loss on derecognition of investments as permitted under IAS 39.

December 31, December 31,

2022 2021
Note ------------- (Rupees) -------------

24 SURPLUS ON REVALUATION OF OPERATING FIXED ASSETS - NET

Opening balance 2,176,453,643 -

Add: revaluation surplus recognized during the year - 2,176,453,643
Transferred to retained earnings in respect of
incremental depreciation for the year (net of tax) (174,654,309) -
2,001,799,334 2,176,453,643
Less:
Related deferred tax liability
Balance at beginning of the year - -
Effect of surplus recognized during the year (631,171,556) (631,171,556)
Impact of deferred tax on incremental depreciation
charged during the year 50,649,750 -
Balance at end of the year (580,521,807) (631,171,556)
Closing balance 1,421,277,527 1,545,282,086

25 OUTSTANDING CLAIMS INCLUDING IBNR

Facultative business 25.1 17,772,634,303 6,219,407,266

Treaty 25.2 3,488,752,930 3,186,981,921
21,261,387,233 9,406,389,187
Claims related to Bangladesh, 10 & 24.4 (4,952,000) (4,952,000)
21,256,435,233 9,401,437,187

25.1 Facultative business

Fire 3,497,442,825 1,841,612,038

Marine cargo 59,944,602 68,805,420
Marine hull 65,000,872 229,659,688
Accident and others 102,343,570 291,598,982
Aviation 1,011,311,668 1,779,285,442
Engineering 13,036,590,766 2,008,445,696
17,772,634,303 6,219,407,266

Page - 39
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------
25.2 Treaty

Proportional 1,979,757,600 2,327,078,907

Non-proportional 1,508,995,330 859,903,014
25.3 3,488,752,930 3,186,981,921

25.3 The Securities and Exchange Commission of Pakistan (SECP) issued guidelines for estimation
of Incurred But Not Reported (IBNR) claim reserves for non-life insurer companies through
Circular No. 9 of 2016 dated March 09, 2016. The guidelines prescribe the standard method
for estimation of IBNR claim reserves so as to bring industry wide-uniformity in respect of
such estimation and to ensure adequacy of IBNR claims reserve. All non-life insurance
companies are required to comply with these guidelines with effect from July 01, 2016.

However, on May 30, 2017 SECP issued separate guidelines for the Company for estimation
of Incurred but Not Reported (IBNR) claim through letter No. ID/PRDD/IBNR/2017/9695
which prescribe that, for the purposes of ascertaining IBNR claim reserves by the Company,
guidance is hereby extended, that the Company shall collect the data of IBNR claim reserves
from the cedants (non-life insurers) and in accordance with its share in the reinsurance
program (both on treaty and facultative basis) of the cedant(s) it shall record its IBNR claim
reserves.

On the basis of above SECP specified guidelines, the Company wrote letter to each ceding
Company to share data of IBNR Claims Reserves in accordance with its share in the
reinsurance program both for facultative and treaty business. However, none of the ceding
companies shared their IBNR Claim Reserves. The Company recorded Facultative and Treaty
IBNR claim reserves on basis of actuarial valuation amounting to Rs. 1,697,801,986 and Nil
respectively.
December 31, December 31,
2022 2021
25.4 Claims related to Bangladesh Note ------------- (Rupees) -------------

Facultative business
Fire 2,382,000 2,382,000
Marine 1,470,000 1,470,000
Miscellaneous 1,100,000 1,100,000
4,952,000 4,952,000
26 UNEARNED PREMIUM RESERVES

Facultative business 26.1 9,242,330,987 8,562,765,837

Treaty 26.2 2,805,378,693 2,169,618,815
12,047,709,680 10,732,384,652

Page - 40
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------
26.1 Facultative business

Fire 500,178,705 709,287,738

Marine cargo 113,176,377 9,793,225
Marine hull 41,549,187 52,201,183
Accident and others 131,355,951 41,133,807
Aviation 4,700,022,226 4,455,283,060
Engineering 3,756,048,541 3,295,066,824
9,242,330,987 8,562,765,837

26.2 Treaty

Proportional 1,954,264,983 1,656,587,205

Non-proportional 851,113,710 513,031,610
2,805,378,693 2,169,618,815

27 UNEARNED REINSURANCE COMMISSION

Facultative business 27.1 530,411,836 522,040,713

Treaty 27.2 8,731,414 1,253,389
539,143,250 523,294,102

27.1 Facultative business

Fire 3,824,329 4,084,215

Marine hull 2,364,506 2,222,792
Marine Cargo 8,974,906 -
Accident and others 6,116,857 315,058
Aviation 229,747,920 217,616,830
Engineering 279,383,318 297,801,818
530,411,836 522,040,713

27.2 Treaty

Proportional - 970,256
Non-proportional 8,731,414 283,133
8,731,414 1,253,389

Page - 41
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------

28 RETIREMENT BENEFITS OBLIGATIONS

Defined benefit obligations of post

employee benefits

Officers' pension benefits 28.1 1,600,799,590 1,113,415,590

Employees' pension fund 28.1 915,640,000 891,659,000
Gratuity fund 28.1 23,004,000 4,025,000
Other post employment benefits
Post retirement medical benefits 28.1 904,412,000 1,106,551,000
Other long term employment benefits
Compensated absences 28.1 186,944,000 91,189,000
3,630,799,590 3,206,839,590

Page - 42
 2022 2021
Post employment benefits Post employment benefits

Retirement benefits Other post-employment benefits Retirement benefits Other post-employment benefits
Total Total
Pension Compensated Pension Compensated
Gratuity Medical Gratuity Medical
Officer Employees absences Officer Employees absences
Note ------------------------------------------------------------------------------------------------ Rupees in millions ------------------------------------------------------------------------------------------------
28.1 Payable to defined benefit plan
Present value of defined
benefit obligation (PVDBO) 28.4 3,168.462 455.114 17.733 904.412 186.944 4,732.665 2,558.461 525.442 4.025 1,106.551 91.189 4,285.668
Fair value of plan assets 28.5 (1,567.662) 460.526 - - - (1,107.136) (1,445.045) 366.217 - - - (1,078.828)
Benefit Payable - - 5.271 - - 5.271
28.2 1,600.800 915.640 23.004 904.412 186.944 3,630.800 1,113.416 891.659 4.025 1,106.551 91.189 3,206.840

28.2 Movement in payable to / (receivable) from defined

benefit plan
Opening balance 1,113.416 891.659 4.025 1,106.551 91.189 3,206.840 1,303.669 718.559 4.583 1,068.405 93.411 3,188.627
Expenses recognized
- Current service cost 13.564 4.245 7.728 6.539 15.319 47.395 10.308 12.388 1.126 17.249 4.974 46.045
Past service cost - - 9.630 - - 9.630 (208.248) (9.566) - - - (217.814)
- Interest cost 294.918 62.022 0.170 133.664 10.214 500.988 261.792 47.002 0.321 108.164 8.381 425.660
- Re-measurements - - - - 85.331 85.331 - - - - 7.711 7.711
- Interest income on plan assets (177.018) 44.861 - - - (132.157) (128.165) 26.650 - - - (101.515)
28.3 131.464 111.128 17.528 140.203 110.864 511.187 (64.313) 76.474 1.447 125.413 21.066 160.087
Other comprehensive income
- Experience (gains) / losses 758.470 (91.732) 4.615 (264.079) - 394.548 47.136 39.287 0.897 (60.975) - 26.345
- Financial (gains) / losses (136.067) (6.587) (3.164) (47.424) - (193.242) - - - - - -
Actuarial (gain) / loss on plan assets 54.401 49.448 - - - 103.849 40.105 101.790 - - - 141.895
28.3 676.804 (48.871) 1.451 (311.503) - 305.155 87.241 141.077 0.897 (60.975) - 168.240

Contributions to the fund (301.929) (38.276) - - - (340.205) (213.181) (44.451) (2.902) - (23.288) (283.822)
Benefits paid - net - - - (30.839) (15.109) (45.948) - - - (26.292) - (26.292)
Closing balance 28.1 1,619.755 915.640 23.004 904.412 186.944 3,637.030 1,113.416 891.659 4.025 1,106.551 91.189 3,206.840

28.3 Charge for the year

Statement of profit or loss 131.464 111.128 17.528 140.203 110.864 511.187 (64.313) 76.474 1.447 125.413 21.066 160.087
Statement of other comprehensive income 676.804 (48.871) 1.451 (311.503) - 317.881 87.241 141.077 0.897 (60.975) - 168.240

Page - 43
 2022 2021
Post employment benefits Post employment benefits

Retirement benefits Other post-employment benefits Retirement benefits Other post-employment benefits
Total Total
Pension Compensated Pension Compensated
Gratuity Medical Gratuity Medical
Officer Employees absences Officer Employees absences
Note Rupees in millions
28.4 Movement in PVDBO
Opening balance 2,558.461 525.442 4.025 1,106.551 91.189 4,285.668 2,660.654 480.782 4.583 1,068.405 93.411 4,307.835
Current service cost 13.564 4.245 7.728 6.539 15.319 47.395 10.308 12.388 1.126 17.249 4.974 46.045
Past service cost - - 9.630 - - 9.630 (208.248) (9.566) - - - (217.814)
Interest cost 294.918 62.022 0.170 133.664 10.214 500.988 261.792 47.002 0.321 108.164 8.381 425.660
Benefits paid / payable (301.929) (38.276) (5.271) (30.839) (15.109) (391.424) (213.181) (44.451) (2.902) (26.292) (23.288) (310.114)
Payable - -
Liability transferred from employees' - -
pension' fund - -
Actuarial (gain) or loss on obligation - - -
balancing figure - -
Remeasurements: - -
Demographic adjustment - - - - - -
Financial adjustment (136.067) 3.631 (3.164) (47.424) - (183.024) -
Experience adjustment 739.515 (92.508) 4.615 (264.079) 85.331 472.874 47.136 39.287 0.897 (60.975) 7.711 34.056
Closing balance of obligation 28.1 3,168.462 464.556 17.733 904.412 186.944 4,742.107 2,558.461 525.442 4.025 1,106.551 91.189 4,285.668
at the end of the period

28.5 Fair value of plan assets

Fair value at the beginning of the year 1,445.045 (366.217) - - - 1,078.828 1,356.985 (237.777) - - - 1,119.208
Contributions to the fund 301.929 38.276 - - 340.205 213.181 44.451 - - - 257.632
Interest income on plan assets 177.018 (44.861) - - 132.157 128.165 (26.650) - - - 101.515
Benefits paid (301.929) (38.276) - - (340.205) (213.181) (44.451) - - - (257.632)
Return on plan assets (54.401) (49.448) - - (103.849) (40.105) (101.790) - - - (141.895)
Fair value at the end of the year 28.1 1,567.662 (460.526) - - - 1,107.136 1,445.045 (366.217) - - - 1,078.828

28.6 Actual return on plan assets 122.617 (94.309) - - - 28.308 88.060 (128.440) - - - (40.380)

28.7 Composition of fair value of plan assets

2021 2021
Pension - officers' Pension - employees' Gratuity Pension - officers' Pension - employees' Gratuity
Amount in Percentage Amount in Percentage Amount in Percentage Amount in Percentage Amount in Percentage Amount in Percentage
Rupees Rupees Rupees Rupees Rupees Rupees
Assets with an active market
Open ended mutual funds units / Equity / 150,741,000 9.62% 173,952,000 -37.77% 154,211,000 91.04% 176,274,000 12.20% 203,417,000 14.08% 179,626,000 92.93%
Treasury bills 105,126,000 6.71% 440,896,000 -95.74% 13,855,000 8.18% 94,000,000 6.50% 281,000,000 19.45% 13,000,000 6.73%
Accrued interest on T-Bill 5,196,000 0.33% 16,767,000 -3.64% - 0.00% - 0.00% - 0.00%
Assets with no active market
Term deposit receipts - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% - 0.00%
Receivable from Gratuity Fund 79,608,000 5.08% 89,771,000 -19.49% 0.00% 90,305,000 6.25% 102,985,000 7.13% - 0.00%
Receivable from Employees Provident Fund 44,591,000 2.84% 50,852,000 -11.04% 0.00% 46,196,000 3.20% 52,683,000 3.65% - 0.00%
Receivable from Employees Pension Fund 1,180,220,000 75.29% 0.00% 0.00% 1,033,014,000 71.49% - 0.00% - 0.00%
Cash and bank balances 2,182,000 0.14% 3,476,000 -0.75% 1,313,000 0.78% 5,255,000 0.36% 4,456,000 0.31% 664,000 0.34%
Payable to General Provident Fund - 0.00% (56,020,000) 12.16% 0.00% - - (49,033,000) - - 0.00%
Payable to Employees Pension Fund - 0.00% - 0.00% 0.00% - - - - (90,305,000) -
Payable to Officers Pension Fund - 0.00% (1,180,220,000) 256.28% (79,608,000) -47.00% - - (1,033,014,000) - (102,985,000) -
Defence Saving Certificate - 0.00% 0.00% (89,771,000) -53.00% - - 71,291,000 - - -
Net assets of the fund 1,567,664,000 100.00% (460,526,000) 100.00% - 0.00% 1,445,044,000 100.00% (366,215,000) 100.00% - 100.00%

Page - 44
28.8 The funds have no holding in the Company’s equity instruments as plan assets. Moreover, the funds have no property or other assets, as its plan assets, occupied or used by the Company.

28.9 Actuarial valuation assumptions

2022 2021
Pension Gratuity Medical Compensated Pension Gratuity Medical Compensated
Officer Employees absences Officer Employees absences

Valuation discount rate 12.25% 12.25% 12.25% 12.25% 12.25% 10.25% 10.25% 10.25% 10.25% 10.25%
Expected return in plan assets 14.25% 14.25% 14.25% - - 12.25% 12.25% 12.25% - -
Salary increase rate 14.25% 14.25% 14.25% - 14.25% 12.25% 12.25% 12.25% - 12.25%
Indexation in pension 13.25% 13.25% - - - 8.25% 8.25% - - -
Medical inflation rate - - - 14.25% - - - - 12.25% -

29 The effect of one percentage movement in the assumptions (rates) would have 1% 1%
Original
Increase Decrease
Rupees in millions
Valuation discount rate
Present value of obligation - other than medical 4,033.471 3,993.136 4,073.805
Financial impact on present value of obligation - (40.335) 40.335
Valuation discount rate % 12.25% 13.25% 11.25%
Salary increase rate
Present value of obligation - other than medical 4,033.471 3,993.136 4,073.805
Financial impact on present value of obligation - (40.335) 40.335
Salary increase rate % 14.25% 15.25% 13.25%
Medical inflation rate
Present value of obligation - medical 954.083 944.542 963.624
Financial impact on present value of obligation - (9.541) 9.541
Medical inflation rate % 14.25% 15.25% 13.25%
Life expectancy
Present value of obligation 4,987.554 4,937.678 5,037.429
Financial impact on present value of obligation - (49.876) 49.876

29.1 Expected charge to the Funds for the year ending December 31, 2023 Post employment benefits
Retirement benefits Other post-employment benefits
Total
Pension Gratuity Medical Compensated
Officer Employees absences

247.982 134.944 14.330 143.117 - 540.373

Acturial Assumption

29.2 The Mortality Table SLIC (2001-05) with 1 year setback, based on the experience of the lives insured with State Life Insurance Corporation of Pakistan, has been used in determining the Liability in respect of the Benefits
payable under the Plan.

Page - 45
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------

30 TAXATION - PAYMENTS LESS PROVISION/

(PROVISION LESS PAYMENTS)

Balance at beginning of the year (366,732,044) 181,407,606

Tax paid / deducted during the year 1,266,634,238 272,051,728
Provision for taxation 49 (821,344,606) (820,191,378)
Balance at end of the year 78,557,588 (366,732,044)

31 DEFERRED TAXATION

Taxable temporary differences:

Accelerated tax depreciation
Property and equipment 120,787,566 10,618,523
Right-of-use assets 475,485,617 5,859,437
Revaluation surplus on property and equipment - 114,586,907
Revaluation surplus on Right of use asset -net of
tax - 516,584,650
Investment property 202,065,600 202,436,064
Unrealized gain on investments 225,927,959 404,180,363
1,024,266,742 1,254,265,944

Deferred tax assets on deductible temporary differences:

Provision for doubtful debts (24,136,875) (24,136,875)

Provision for impairment of insurers / reinsurers
receivable (146,939,467) (304,267,503)
Provision for impairment of receivables from
other insurers / reinsurers (7,201,174) (7,201,175)
Provision for dividend receivable - -
Held to maturity investments - -
Remeasurement of defined benefit obligations
Lease liabilities (6,679,613) (8,479,274)
Notional interest on interest free loans (10,445,427) (11,925,502)
Provision for impairment in available for sale
investments (87,774,705) (87,774,705)
(283,177,261) (443,785,034)
31.1 741,089,481 810,480,910

31.1 The above closing deferred tax liability is comprised of deferred tax amounting to Rs.
770,116,038 and Rs. (903,789,300) reported through Statement of profit and loss and
Statement of comprehensive income respectively.

Page - 46
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------

32 INSURANCE / REINSURANCE
PAYABLES

Due to other insurers/ reinsurers 10,916,458,596 8,192,373,857

Premium and claim reserves retained
from retrocessionaires 32.3 15,824,356 15,824,356
10,932,282,952 8,208,198,213

32.1 This includes an amount of Rs.16.55 million (2021: Rs. 16.55 million) which is under
litigation.

32.2 Due to other insurers / reinsurers

Due to other insurers 289,086,841 264,775,346

Due to other reinsurers 10,608,451,488 7,927,598,511
10,897,538,329 8,192,373,857

32.3 Premium and claim reserves retained from retrocessionaires

Premium reserves (2,851,182) (2,851,182)

Losses reserves 17,033,417 17,033,417
Cash losses received from retrocessionaires 1,642,121 1,642,121
32.3.1 15,824,356 15,824,356

32.3.1 This represents the Company's retention of deposits withheld against the total amount
retroceded to other companies.

33 LEASE LIABILITIES

Current portion 3,105,977 8,860,729

Non-current portion 19,927,172 20,378,147
23,033,149 29,238,876

33.1 The Company has entered into lease arrangement with Karachi Port Trust (KPT) for lease of
land. Minimum lease payments, which are payable till the expiry of lease agreement, have been
discounted by using 6 months KIBOR prevailing at the initial application date i.e. 13.44%
(2021: 13.44%).

33.2 Statement of profit and loss shows the following amounts

- Depreciation charge on right-of-use asset 8 (161,925,757) 1,756,953

- Interest expense 2,413,641 2,460,021
(159,512,116) 4,216,974

Page - 47
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------

33.3 The amount of future payments under the finance lease arrangements and the year in which
these payments will become due are as follows:
Not later than one year 3,105,977 8,287,853
Later than one year but not later than five years 13,716,995 39,936,006
Later than five years 22,766,520
Total future minimum lease payments 39,589,492 48,223,859
Finance charge allocated to future years (16,556,343) (18,969,983)
Present value of future minimum lease payments 23,033,149 29,253,876
Not later than one year - (8,860,729)
Later than one year but not later than five years - (6,136,096)
Later than five years 23,033,149 14,257,051

34 UNCLAIMED DIVIDENDS

Balance at beginning of the year 205,956,627 155,208,129

Add: dividend announced during the year 600,000,000 750,000,000
Less: payments during the year (717,304,614) (700,352,569)
Add: accrual of interest - 1,101,067
Balance at end of the year 88,652,013 205,956,627

35 OTHERS CREDITORS AND ACCRUALS

Creditors and accruals 21,300,655 15,508,761

Rent payable 35.1 36,277,063 31,693,297
Security deposits 35.2 32,496,917 26,074,074
Accrued expenses 18,007,846 14,768,388
Surplus profit payable 35.3 1,075,561 1,212,602
109,158,042 89,257,122

35.1 The Company has dispute in respect of the unilateral increase in rentals of its lease hold land
by Karachi Port Trust (KPT) being exorbitant and unreasonable, a view supported by the
Company's legal advisor. The amount not acknowledged in this regard, however, the Company
has recorded provision in this regard as at December 31, 2022 amounting to Rs. 31.693 million
(2021: Rs. 31.693 million).

Currently, a stay is operating in favor of the Company and the matter is pending before the
Honorable High Court of Sindh, for the issue and hearing of application. The matter is
currently being contested by both parties and there has been no negotiation to settle the matter
out of the Court. Most likely outcome of the case, may be in accordance with the market rate in
the vicinity. The case is pending in the Honorable High Court of Sindh and a hearing has been
fixed on April 05, 2023 and the matter is still pending.

Page - 48
35.2 This represents security deposits received from tenants in connection with letting of PRC
Towers and earnest money deposits for the purpose of securing tenders of suppliers and
contractors.

35.3 This represents the amount set aside for the shareholders in accordance with the requirements
of Pakistan Insurance Corporation Act, 1952 (repealed).

36 TOTAL LIABILITIES FROM WINDOW RETAKAFUL OPERATIONS

- OPERATOR'S RETAKAFUL FUND
Liabilities:

December 31, December 31,

2022 2021
Note ------------- (Rupees) -------------

Unearned wakala fee 103,114,993 77,933,450

Operator's retakaful fund - payable 14,683,246 3,309,474
Taxation- provision less payment 20,615,023 13,404,750
Deferred taxation 182,212 319,252
Other creditors and accruals 2,437,660 1,243,041
Payable to related party 11,674,665 4,454,014
Total liabilities 152,707,799 100,663,981

37 CONTINGENCIES AND COMMITMENTS

37.1 Contingencies

The Company is contingently liable for:

Sindh Sales Tax 37.2 18,905,009,427 15,761,000,973

Federal Excise Duty 37.3 4,073,379,063 4,073,379,063
Income Tax 37.4 1,822,636,685 1,728,665,305
Insurance payables 37.6 61,568,840 61,568,840
EOBI 37.7 1,509,500 639,500
24,864,103,515 21,625,253,681

37.2 The Company received a notice from Sindh Revenue Board (SRB) relating to non-filing of
Sales Tax return on services provided by PRCL to Insurance Companies. The Company
contested the notice, however, the decision was made against the Company giving rise to sales
tax liability amounting to Rs. 3,242 million and tax penalty of Rs. 880 million for financial
year 2011 and 2012. The Company filed an appeal with Commissioner of Appeals, Sindh
Revenue Board, however, it was rejected. The Company again filed an appeal with the
Appellate Tribunal where the decision was made against the Company vide order number AT-
02/2013/109/2013 dated February 03, 2016. As a result, the Company filed reference in the
Honorable High Court of Sindh against the orders of Appellant Tribunal.

Page - 49
In the aforementioned tribunal orders, the SRB was directed to reconcile and separate the sales
tax liability on reinsurance premium generated within the province of Sindh and rest of
Pakistan.

Subsequently, the Company received two orders in pursuance of Appellate Tribunal (SRB)
Order against Appeal No. AT-02/2013 and AT-109/2015 dated May 23, 2016 from Sindh
Revenue Board (SRB) demanding the amount of sales tax liability on re-insurance services
provided / rendered by the Company in Sindh from the period from July 2011 to November
2011 and for the period from December 2011 to December 2012 which were worked out and
calculated by SRB amounting to Rs. 372.2 million and Rs. 1,118.1 million respectively. The
Company has filed reference in the Honorable High Court of Sindh, dated April 18, 2016
against the Orders of Appellant Tribunal.

Further, the Company has also received a notice from Sindh Revenue Board (SRB) for the
period from January 2013 to December 2013. The Company contested the notice; however, the
order was passed against the Company giving rise to sales tax liability amounting to Rs. 1,385
million and tax penalty amounting to Rs. 424 million. The Company filed an appeal against the
order with Commissioner of Appeals, Sindh Revenue Board which was decided against the
Company. The Company being aggrieved by the said order has filed an appeal before Appellant
Tribunal-SRB which has been heard and order is awaited. Stay of tax demand has been
obtained in this regard which was valid up to April 05, 2017.

During the year 2017, the Company has paid an amount of Rs. 2,131.464 million under protest
against the principal amount of sales tax liability in respect of above notices issued by SRB for
tax years 2011, 2012 and 2013.

The Company has also apprised Ministry of Commerce through letter dated April 14, 2017, on
the matter of disputed sales tax demand raised by SRB. Ministry of Commerce through letter
dated on May 03, 2017, directed to take action as per Board of Directors decision and also
directed that the Company may keep contesting the case in High Court vigorously.

After obtaining legal opinion and approval from Board of Directors and Ministry of
Commerce, the Company wrote a letter dated May 17, 2017, to the Commission (SRB) that the
Company is in agreement to make payment of the principal amount of the demand under
protest subject to the condition that SRB will withdraw all notices issued u/s 66 of Sindh Sales
Tax Act, 2011, to the clients and debtors of the Company for the attachment of payables to
Company, SRB will not initiate any further proceedings in relation to the amount of default
surcharge and penalty until the liability of tax on reinsurance services is finally decided by the
Honorable High Court of Sindh and SRB will not initiate any further proceedings against the
Company for the tax periods subsequent to these three tax periods and matter shall be decided
after the decision of the Honorable High Court of Sindh.

Page - 50
During previous year, the SECP vide letter No. ID/PRDD/TAXATION/2020/15 dated March
13, 2020 highlighted taxation issues to SRB faced by the insurance industry in Pakistan. SECP
highlighted that, insurance companies obtained reinsurance services to mitigate their risk by
sharing it with other insurance/reinsurance companies, hence, forming part of the overall risk
management function of insurance companies. The imposition of sales tax on reinsurance
services through service charge mechanism, may lead to double taxation on the insurance
business, in the context of foreign reinsurance.

Imposition of sales tax on the reinsurance services would increase the cost of doing business
for insurance companies, which may reflect as an increase in the rates of insurance premiums,
making insurance more costly for the policyholders. As lowering the cost of business is the
primary agenda of the Government of Pakistan and as such, the imposition of sales tax on
reinsurance services would be working at odds with measures taken by the Government of
Pakistan for ease of doing business in Pakistan.

SRB vide letter SRB/TP/57/2016 dated April 26, 2020 advised the Company with the
provisions of Sindh Sales Tax Act, 2011 by issuing tax invoices, e-filing of tax returns and e-
depositing the SST invoice.

The aggregate amount of Rs. 2,573.889 million paid has been recorded as “receivable from
SRB” in the financial statements. Moreover, the Company has not recorded provision against
the orders passed by SRB in pursuance of Appellate Order dated February 01, 2016 in Appeal
No. AT-02/2013 and order dated February 03, 2016 in Appeal No. AT-109/2015.

Further, if the matter is decided against the Company, the charge to accumulated profits would
amount to Rs. 14,042.042 million (approximately) pertaining to the years 2011 to 2020
excluding any additional penalty or default surcharge. The pending legal proceeding may result
in claims that the Company is unlikely to be able to satisfy. Further, in that case, the overall
equity may erode and turn into negative and the Company would also face liquidity crunch and
be unable to meet its solvency requirements in addition to "going concern assumption" basis of
accounting.

Based on the legal opinion of the Company’s legal advisor, management is confident that
strong grounds exist to contest the case and that the eventual resolution of the matter would be
in favor of the Company. Accordingly, no provision for sales tax liability for the years 2011 to
2021 has been recorded in these financial statements.

On January 10, 2023 , the hearing of the said case was held in the High Court of Sindh,
Karachi. Although it was discharged, due to the shortage of time till the next hearing date May
19, 2023. The case is still pending in high court of Sindh Karachi.

Page - 51
37.3 Federal Excise Duty

S. no. Year Amount in Rupees Status of the case

1 2012 161,753,030 Federal Board of Revenue (FBR) has issued show-cause notices dated
2 2013 755,903,899 November 22, 2017, whereby the Company is required to explain as to
why Federal Excise Duty (FED) on aggregate reinsurance premium
3 2014 765,427,619
revenue has not been paid in respect of tax periods from October 2012 to
4 2015 835,030,670 September 2017. The Company has submitted its reply against show-cause
challenging levy of FED on various legal grounds. Further, the Company
also filed Constitutional Petition against show cause notices in the
5 2016 928,295,664
Honorable High Court of Sindh and the Honorable High Court of Sindh
6 2017 626,968,181 vide order dated January 29, 2019 has suspended the proceedings initiated
4,073,379,063 through the above show-cause notice.

On March 09, 2023 , the hearing of the said case was held in the High Court of Sindh, Karachi.
The hearing was discharged, due to the shortage of time till the next hearing date of April 13,
2023.

This case is pending for finalization before the Honorable High Court of Sindh. The Company
is confident that outcome of the case will be in favor of the Company in light of the 18th
amendment in the Constitution of Pakistan.

Page - 52
37.4 Income Tax

Order Tax Liability in Liability Deleted by

Differential
Tax Year Under Order & Accepted TO/ CIRA/ Status of the case
(Pending)
Section Refund in ROI by Company ATIR

CIRA has decided issues against;Company which

2010 122(5A) 61,946,267 183,750 - 61,762,517 are pending in ATIR.Issue of Donation of
Rs.525,000 accepted by Company.

CIRA and/or ATIR have decided issues in

Company's favour. Appeal effect given vide order
dated October 12,2017. Tax of Rs. 1,555,807
inadvertently under paid by Company in respect of
Rental income is now voluntarily paid by
2011 122(5A) 508,263,856 357,535,389 150,728,467 Company. Taxl iability of Rs. 98,868,443 is
arising due to unavailability of brought forward
loss relating to TY 2010 dueto assessment order
passed for the aforesaid tax year.

CIRA and/or ATIR have decided issues in

Company's favour. Tax liability of Rs.
127,326,208 is arising due to unavailability of
loss of Rs.212,481,202 relating to Tax Year2010
2012 122(5A) 320,013,363 - 192,687,155 127,326,208
and tax refund of Rs.52,957,787 relating to Tax
Year 2011,due to assessment orders passed for
these tax years.

CIRA and/or ATIR have decided issues in

Company's favour. Appeal effect order with
regard to CIRA &ATIR orders are pending. Tax
liabilityof Rs. 42,040,463 is arising due to
2013 122(5A) 191,405,099 32,841,303 149,221,136 9,342,660
unavailability of tax refunds of Rs.1,025,968 and
Rs. 41,014,495 relating to Tax Years 2010 and
2012 respectively, due to assessment orders
passed for these tax years.

CIRA has decided issues of Dividend income and

claim of expenses against Rental income in
Company's favour, whilst remaining issues were
2014 122(5A) 542,653,355 - 129,928,583 412,724,772 decided against Company and are pending in
ATIR. Appeal effect with regard to CIRA's order
is pending.

CIRA has decided issues in Company's favour

except issue of Exchange loss of Rs. 50,578,845
which is decided against Company and is pending
2015 122(5A) 498,357,134 - 497,585,902 771,232
in ATIR. Appeal effect given vide order dated
April 27, 2017

CIRA has decided issues in Company's favour

except issue of Loss on re-measurement of defined
benefit obligations of Rs.675,584,000 and
Provision for compensated absences of
Rs.60,868,000, which are decided against
Company and are pending inATIR, however same
issue have been decided in Company's favour in
2016 122(5A) 742,375,175 - 518,462,262 223,912,913
tax year 2015. Appeal effect given vide order
dated April 6, 2017. Full benchhad been formed
due to a conflicting decision of Honorable
Tribunal in respect of issue of Commission,
however,hearing in this respect has not yet been
conducted.

Appeal before CIRA against the orderdated

January 31, 2019 has been filed which has been
heard by CIRA. CIRA has decided various issues
inCompany's favour against which department has
2018 122(5A) 799,153,338 445,541,192 353,612,146 filed appeal before ATIR. However, major issue
of Commission expense was decided in favor of
the department against which appeal has been
filed before ATIR by the Company which is
pending.

Total 3,653,503,759 32,841,303 2,290,961,619 1,340,180,915

Page - 53
 The status of orders passed under section 161 of the Income Tax Ordinance, 2001 is as follows:

December 31, December 31,

Tax year 2022 2021
Note ------------- (Rupees) -------------

2014 260,214,169 260,214,169

2015 39,541,845 39,541,845
2016 182,699,756 182,699,756
37.5 482,455,770 482,455,770
Grand Total 1,822,636,685 1,728,665,305

37.5 The Company received various notices in respect of non deduction of with holding tax on
commission paid to ceding companies. CIRA has decided issue of Commission expense
against Company and appeal is pending in ATIR. Full bench had been formed due to a
conflicting decision of Honourable Tribunal in respect of issue of Commission, however,
hearing of main appeal had not been fixed yet.

The above matters are pending before various forums. On the basis of the opinion of tax
advisor, the Company is confident that the eventual outcome will be in favor of the Company.

37.6 Insurance payables

The ceding companies have filed various suits amounting to Rs. 61,568,840 (2021: Rs.
65,149,495) against the Company for recovery of claims. Based on the legal opinion of the
Company’s legal advisor, management is confident that strong grounds exist to contest the
cases and that the eventual resolution of the matter would be in favor of the Company.
Accordingly, no provision has been recorded in the financial statements relating to these claims.

37.7 Employee Old Age Benefit Institution

The Company has received a notice from the Regional Director of Employee Old Age Benefit
Institution (EOBI) vide letter dated October 31, 2009 that Pakistan Reinsurance Company
Limited is required to be registered with EOBI. The Company is of the view that since it is a
statutory body corporate under the management and control of Ministry of Commerce,
Government of Pakistan and have its own pensioner rules and limitation and therefore
provisions of EOBI Act, 1976 are not applicable. A suit was filed with the Honorable Civil
Court in 2011 where the judgment was passed against the Company.

Page - 54
 Further, the Company filed an appeal in the Honorable High Court of Sindh against the Civil
Court judgment and there has been no further proceeding in the court but the management
expects a favorable outcome. On the basis of meeting held with EOBI officials, the Company is
considering registration of its contractual employees with EOBI which is pending approval
from Ministry of Commerce. Further, it has been agreed that advice from Ministry if Law and
Justice may be sought on the issue of registration of permanent employees who are already
covered under Company's own pension scheme. The financial impact pertaining to contractual
employees along with penalty, if any, amounts to Rs. 870,000 (Rs. 455,900) and the impact of
permanent employees to the financial statements is currently not ascertainable. Therefore, no
provision has been made in these financial statements.

In continuance to above the company has filled an appeal 121/2020 in High Court of Sindh.
The case was fixed for hearing on October 25, 2022 but due to fixation policy the case was
discharged till next date for hearing i.e, March 29, 2023 . However the case is still pending in
High court of Sindh.

37.8 As disclosed in the notes 16 and 30 to the financial statements, the balances of Rs.17.483
billion (net of provision amounting to Rs. 16.821 billion) and Rs. 10.567 billion were
respectively due from and due to insurance/ reinsurance companies. In order to reconcile the
above balances with the insurance companies, management is in process of reconciling these
balances as at December 31, 2022 with the consultation of Securities and Exchange
Commission of Pakistan (SECP) by outsourcing this function to an independent third party.

However, the management is confident that the eventual outcome of reconciliation exercise
would be in favor of the Company.

December 31, December 31,

2022 2021
37.9 Commitments Note ------------- (Rupees) -------------

Commitments in respect of:

- Short term lease rentals (0 to 1 year) 565,908 565,908
- Capital expenditure (intangible assets) 25,422,503 25,422,503
25,988,411 25,988,411

38 NET INSURANCE PREMIUM

Gross premium written 24,271,390,418 20,993,560,184

Add: unearned premium reserve opening 10,732,384,652 6,513,672,434
Less: unearned premium reserve closing 25 (12,047,709,680) (10,732,384,652)
Premiums earned 22,956,065,390 16,774,847,966
Less: reinsurance premium ceded 16,244,192,681 13,127,923,393
Add: prepaid reinsurance premium opening 7,722,831,183 4,144,132,224
Less: prepaid reinsurance premium closing 19 (8,940,328,450) (7,722,831,183)
Reinsurance expense 15,026,695,414 9,549,224,434
7,929,369,976 7,225,623,532

Page - 55
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------

39 NET INSURANCE CLAIMS

Claims paid 6,210,425,217 5,511,516,252

Add: outstanding claims including IBNR closing 21,261,387,233 9,406,389,187
Less: outstanding claims including IBNR opening (9,406,389,187) (10,480,686,890)
Claims expense 18,065,423,263 4,437,218,549
Less: reinsurance and other recoveries received 3,940,990,166 1,655,094,346
Add: reinsurance and other recoveries
17 14,420,709,311 4,608,127,235
in respect of outstanding claims closing
Less: reinsurance and other recoveries
(4,608,127,235) (5,603,808,031)
in respect of outstanding claims
Reinsurance and other recoveries revenue 13,753,572,242 659,413,550
4,311,851,021 3,777,804,999

40 Claim development

The Company maintains adequate reserves in respect of its reinsurance business in order to
protect against adverse future claims experience and developments. The uncertainties about the
amount and timing of claim payments are normally resolved within one year. The following
table shows the development of the claims over a period of time. All amounts are presented in
gross numbers before reinsurance.
Accident year 2017 2018 2019 2020 2021 Total

Estimate of ultimate claims cost

- At the end of accident year 965,930,028 93,448,497 262,507,634 410,462,011 3,247,621,120 N/A
- One year later 1,104,360,879 242,891,457 972,728,411 1,656,178,363 - N/A
- Two years later 1,850,441,443 247,582,266 1,253,160,168 - - N/A
- Three years later 2,558,194,886 417,161,525 - - - N/A
- Four years later 2,832,268,011 - - - - N/A
Current estimate of cumulative claims 3,298,224,273 582,064,399 3,635,894,942 2,033,643,710 5,368,078,115 14,917,905,438
Cumulative payments to date 465,956,262 164,902,874 2,382,734,774 377,465,347 2,120,456,995 5,511,516,252
Liability recognized in the statement 2,832,268,011 417,161,525 1,253,160,168 1,656,178,363 3,247,621,120 9,406,389,186

41 NET COMMISSION AND OTHER ACQUISTION

COSTS

Commission paid or payable 2,152,329,465 1,822,272,449

Add: deferred commission expense opening 806,214,206 708,870,616
Less: deferred commission expense closing 18 (931,382,139) (806,214,206)
Net commission 2,027,161,532 1,724,928,859
Less: commission received or receiveable 1,017,092,732 941,334,110
Add: unearned reinsurance commission opening 523,294,102 338,532,613
Less: unearned reinsurance commission closing 26 (539,143,250) (523,294,102)
Commission from reinsurers 1,001,243,584 756,572,621
1,025,917,948 968,356,238

Page - 56
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------
42 MANAGEMENT EXPENSES

Employee benefit cost 42.1 1,165,815,034 668,442,172

Medical 20,118,955 19,705,182
Utilities 23,885,867 4,478,665
Security services expense 8,753,503 5,658,114
Repairs and maintenance 16,617,706 14,941,796
Directors' meeting and other expenses 51 13,742,801 11,606,591
Depreciation expense 42.2 188,124,289 6,952,796
Advertisement and business promotion 9,707,494 3,488,992
Travelling and conveyance 24,026,724 4,745,681
Insurance 2,808,163 4,464,834
Computer related expenses 14,904,753 6,678,656
Rent, rates and taxes 3,972,764 7,655,039
Consultancy and professional charges 5,584,034 1,920,475
Printing and stationary 4,695,195 3,948,726
Entertainment 2,597,581 762,456
Communication 3,679,540 2,323,080
Newspaper and periodicals 149,920 56,066
Repairs and renewal 3,983,858 2,656,267
Training and research 3,409,973 1,025,400
Shares transaction costs 63,427 354,193
Charity and Donation 2,500,000
Others 44,491,662 2,490,947
1,563,633,243 774,356,128
Expenses allocated to investment income 43 (15,586,861) (19,646,645)
Expenses allocated to rental income 44 (19,611,288) (25,710,223)
1,528,435,094 728,999,260

42.1 Employee benefit cost

Salaries, wages and benefits 654,627,634 508,354,772

Post employees benefits
- Officers' pension 131,464,400 (64,312,600)
- Employees' pension 111,128,000 76,474,000
- Post retirement medical benefits 17,528,000 125,413,000
- Gratuity fund 140,203,000 1,447,000
- Compensated absences 110,864,000 21,066,000
511,187,400 160,087,400
1,165,815,034 668,442,172

Page - 57
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------

42.2 Depreciation expense

Property and equipment 7.1 31,469,390 5,195,843

Right-of-use assets 8.2 156,654,899 1,756,953
188,124,289 6,952,796

43 INVESTMENT INCOME - NET

Income from equity securities

Available for sale
Dividend income 255,662,913 213,126,116
Held for trading
Dividend income 10,846,800 11,398,500
266,509,713 224,524,616
Income from debt securities
Held to maturity
Return on debt securities
Pakistan Investment Bonds - fixed 254,350,816 195,865,078
Pakistan Investment Bonds - floating 75,758,759 43,171,382
Treasury Bills 698,785,800 417,661,508
Profit on Term Finance Certificates 14,934,542 8,834,800
Amortization of Pakistan Investment Bonds 42,778,792 18,188,606
1,086,608,709 683,721,374
Available for sale
Profit on Pakistan Investment Bonds 40,196,685 62,600,409
Net realized gains on investments
Available for sale financial assets
Realized gain on equity securities 374,400 51,084,393
Held for trading financial assets
Realized gain on equity securities - -
Realized gain on debt securities - 72,398

Net unrealized losses on investments

Held for trading investments (39,742,941) (27,631,715)
Total investment income 1,353,946,566 994,371,475
Add: reversal of impairment in value of
available for sale investment 31,500 6,985,126
Less: investment related expenses 42 (15,586,861) (19,646,645)
Net investment income 1,338,391,205 981,709,956

Page - 58
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------

44 RENTAL INCOME - NET

Rental income earned 44.1 146,254,476 131,367,016

Less: expenses allocated to investment property 42 (19,611,288) (25,710,223)
Less: depreciation on investment property 11 - (1,277,463)
(19,611,288) (26,987,686)
126,643,188 104,379,330

44.1 The rental income represents income from letting out of PRC Tower.

44.2 There are no direct expenses relating to investment property that did not generate rental income
(2021:Rs. 9.191 million)

45 FINANCE COST

Finance cost - leases 2,413,641 2,460,021

Bank charges 346,993 88,846
2,760,634 2,548,867

46 OTHER INCOME

Return on bank deposits 212,080,446 61,719,841

Net return on loans to employees 5,103,704 13,319,891
Miscellaneous income 63,782,714 538,449
Exchange gain 138,239,529 66,669,413
419,206,393 142,247,594

47 OTHER EXPENSES

Legal fees 1,780,000 627,700

Auditor's remuneration 47.1 1,327,090 1,314,166
Fee and subscription 1,344,427 3,481,464
Subscription and membership fee 2,678,838 2,771,913
7,130,355 8,195,243

47.1 Auditor's remuneration

Annual audit fee 466,560 400,000

Interim review 169,711 157,140
Out-of-pocket expenses 204,819 112,270
Other certification fee 486,000 644,756
1,327,090 1,314,166
Page - 59
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------

48 PROFIT FROM WINDOW RETAKAFUL OPERATIONS

-OPERATOR'S RETAKAFUL FUND

Revenue account
Wakala fee 215,856,211 156,471,404
Commission expense (213,471,407) (145,151,427)
General, administrative and management expenses (15,746,091) (7,937,109)
(13,361,287) 3,382,868

Investment income 1,687,509 920,194

Profit on bank deposits 34,143,170 14,518,979
Modarib's share of Participant's Retakaful
investment and other income 20,306,173 3,660,141
56,136,852 19,099,314
Profit before taxation 42,775,565 22,482,182
Taxation (12,404,914) (6,519,833)
Profit after taxation 30,370,651 15,962,349

49 TAXATION

Current 917,264,145 994,594,665

Prior year (95,919,539) (174,403,287)
821,344,606 820,191,378
Deferred 110,570,676 204,640,449
49.1 931,915,282 1,024,831,827

49.1 Relationship between tax expense and accounting profit

Profit before tax 3,556,743,771 3,614,418,290

Tax at the applicable rate of 33% including

supper tax (2021: 29%) 1,031,455,694 1,048,181,304
Tax effect of income that are deductible in
determining the taxable profit (3,620,872) 151,053,810
Prior year tax adjustment (95,919,539) (174,403,287)
Charge for the year 931,915,282 1,024,831,827

Page - 60
49.2 Relationship between average effective tax rate and the applicable tax rate

Applicable tax rate 29.00% 29.00%

Tax effects of amounts that are:

- Deductible temporary difference 3.13% 7.40%
- Taxable temporary difference (3.23%) 3.22%
28.90% 29.44%

50 EARNINGS PER SHARE - basic and diluted

Basic earning per share is calculated by dividing the net profit for the year by the weighted
average number of shares outstanding as at the year end as follows:

December 31, December 31,

2022 2021
------------- (Rupees) -------------

Profit after tax (Rupees) 2,624,828,489 2,589,586,462

Weighted average number of ordinary shares (Restated)

(number of shares) 900,000,000 900,000,000

(Restated)
Earnings per share (Rupees) 2.92 2.88

50.1 No figure for diluted earnings per share has been presented as the Company has not issued any
instrument which would have an impact on earnings per share when exercised.

51 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

CHIEF EXECUTIVE DIRECTORS EXECUTIVES

2022 2021 2022 2021 2022 2021
------------------------------------ Rupees in '000------------------------------------
Meeting fees - - 6,350 6,350 - -
Managerial remuneration 2,321 728 - - 108,513 26,950
Leave encashment - - - - 9,446 2,596
Bonus - - - - 35,709 11,657
Charge for defined benefit plan - - - - - 30,086
Rent and house maintenance 1,123 619 - - 78,039 22,908
Utilities 304 168 - - 21,193 6,199
Dearness allowance 198 109 - - 13,061 4,043
Conveyance / car monetization 2,708 - - - 18,776 3,026
Adhoc relief (2016, 2017 and 2018) 198 109 - - 12,955 8,123
Education allowance 104 30 - - 8,116 1,744
Others - 966 5,256 5,256 3,382 25,868
6,956 2,729 11,606 5,082 309,190 281,093

Number of person(s) 1 1 8 8 19 19

Page - 61
51.1 Executive means any employee who satisfies the definition / criteria as mentioned in the
Insurance Regulations, 2017.

51.2 Non Executive Directors are entitled to meeting fee for attending each board and committee
meeting amounting to Rs. 50,000 and other benefits comprising of accommodation, air travel
allowance and conveyance allowance as recommended by Board on its 133rd meeting held on
October 30, 2018 in accordance with the articles of association of the Company.

December 31, December 31,

2022 2021
52 EMPLOYEES ------------- (Rupees) -------------
Number of employees at the year end
Permanent 124 142
Contractual 57 17
181 159
Average number of employees during the year
Permanent 140 149
Contractual 61 22
201 171

53 IMPLICATIONS OF REVISED IFRS 2 - SHARE-BASED PAYMENT ON BENAZIR

EMPLOYEES' STOCK OPTION SCHEME (BESOS)

On August 14, 2009, the Government of Pakistan (GoP) launched Benazir Employees' Stock
Option Scheme (“the Scheme”) for employees of certain State Owned Enterprises (SOEs) and
Non-State Owned Enterprises, where GoP holds significant investments (Non-SOEs). The
Scheme is applicable to permanent and contractual employees who were in employment of
these entities including the Company on the date of launch of the Scheme, subject to
completion of five years vesting period by all contractual employees and by permanent
employees in certain instances.

The Scheme provides for a cash payment to employees on retirement or termination based on
the price of shares of respective entities. To administer this scheme, GoP has transferred 12%
of its investment in such SOEs and Non-SOEs to a Trust Fund, established under a Trust Deed,
created for the purpose by each of such entities. The eligible employees are entitled to be
allotted units by each Trust Fund in proportion to their respective length of service and on
retirement or termination, such employees would be entitled to receive such amounts from
Trust Funds in exchange for the surrendered units, as would be determined based on market
price for listed entities or breakup value for non-listed entities. The shares relating to the
surrendered units would be transferred back to GoP.

Page - 62
 The Scheme also provides that 50% of dividend related to shares transferred to the respective
Trust Fund would be distributed amongst the unit-holder employees. The balance 50% dividend
would be transferred by the respective Trust Fund to the Central Revolving Fund, managed by
the Privatization Commission of Pakistan for payment to employees against surrendered units.
The deficit, if any, in Trust Funds to meet the re-purchase commitment would be met by GoP.

The Scheme, developed in compliance with the stated GoP policy of empowerment of
employees of State Owned Enterprises, needs to be accounted for by the covered entities,
including the Company, under the provisions of amended International Financial Reporting
Standard-2, “Share-based Payments” (IFRS 2). However, keeping in view the difficulties that
may be faced by the entities covered under the Scheme, the SECP, on receiving representations
from some of entities covered under the Scheme and after having consulted the Institute of
Chartered Accountants of Pakistan, has granted exemption vide SRO 587(l)/2011 dated June
07, 2011 to such entities including the Corporation from the application of IFRS 2 to the
Scheme.

Had the exemption not been granted, Staff costs of the Company would have been higher by
Rs. 42.235 million, profit before taxation would have been lower by Rs. 42.235 million,
earnings per share would have been lower by Rs. 0.14, reserves would have been higher by Rs.
42.235 million.

During the year, the company has received a notice from Ministry of Commerce, dated 17
March, 2022. to deposit principal amount along with interest accrued on the principal amount
available with the Company under BESOS scheme under federal consolidated fund. The
Company has paid the principal amount along with the interest accrued on the principal
amounting to Rs. 558.525 million on Novemebr 29, 2022 to Ministry of Commerce. The Fund
will be dissolved after the audit of the financial statements of the fund.

54 RELATED PARTIES TRANSACTIONS AND BALANCES

Government of Pakistan through Ministry of Commerce owns 51% (2021: 51%) shares of the
Company. Therefore, all entities owned and controlled by the Government of Pakistan are
related parties of the Company. The related parties comprise major shareholders, associated
company, directors, companies with common directorship, key management personnel, and
staff retirement benefit funds. The Company in normal course of business pays for electricity,
gas and telephone to entities controlled by Government of Pakistan which are not material and
hence not disclosed in these financial statements. Moreover, transactions with related parties,
other than remuneration and benefits to key management personnel under the terms of their
employment as disclosed in note 48 of these financial statements, are as follows:

Page - 63
 December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------
Major shareholders
Government of Pakistan (GoP) through
Ministry of Commerce
Dividend paid for the year 305,999,512 336,599,463
State Life Insurance Corporation of
Pakistan
Dividend paid for the year 146,464,402 183,080,503
Related parties by virtue of GoP's holdings
State Bank of Pakistan
Purchase of investment 16,341,045,462 17,018,141,250
Dividend received during the year - 49,000
17,018,190,250
Pakistan State Oil Company Limited
Dividend received during the year 119,357 210,630
National Investment Trust Limited
Dividend received during the year 65,637,000 71,280,000
National Insurance Company Limited
Premium due but unpaid 8,797,497,324 3,327,220,693
Insurance premium written during the year 55.3 15,957,225,633 13,486,623,550
Premium received (14,025,174,012) (8,016,346,919)
Balance at the end of year 16.2 10,729,548,945 8,797,497,324

Insurance commission paid 568,487,815 414,567,086

Insurance claims paid 1,151,138,787 1,775,838,644

Alpha Insurance Company Limited

Insurance / reinsurance receivables /

(insurance / reinsurance payable) 2,543,083 222,688
Insurance premium written during the year 15,639,419 13,686,995
Commission Paid (323,226) (372,591)
Claims paid (1,359,629) (10,994,009)
Net receipts -
Balance at the end of year 16,499,647 2,543,083

Other related parties

Remuneration including benefits and

perquisites of key 51 327,751,862 157,534,593

The transactions with related parties are in the normal course of business at contracted rates and
terms and conditions determined on commercial terms.

Page - 64
55 SEGMENT INFORMATION

December 31, 2022 Fire Marine cargo Marine hull Accident Aviation Engineering Treaty Total
-----------------------------------------------------------------------------------Rupees------------------------------------------------------------------------------------
Gross written premium 1,778,754,168 187,966,423 262,617,090 408,284,983 4,785,514,192 9,960,807,988 6,887,445,574 24,271,390,418
Unearned-opening 709,287,738 9,793,225 52,201,183 41,133,807 4,455,283,060 3,295,066,824 2,169,618,815 10,732,384,652
Unearned-closing 500,178,705 113,176,377 41,549,187 131,355,951 4,700,022,226 3,756,048,541 2,805,378,693 12,047,709,680
Premium earned 1,987,863,201 84,583,271 273,269,086 318,062,839 4,540,775,026 9,499,826,271 6,251,685,696 22,956,065,390
Reinsurance-ceded 314,124,717 120,558,442 101,836,826 178,853,300 4,437,080,298 9,002,840,594 2,088,898,504 16,244,192,681
Prepaid reinsurance-opening 40,842,152 - 22,227,920 3,150,578 4,237,630,265 3,095,679,708 323,300,560 7,722,831,183
Prepaid reinsurance-closing 38,243,295 89,749,062 23,645,065 80,909,326 4,408,006,288 3,516,750,039 783,025,375 8,940,328,450
Reinsurance expenses 316,723,574 30,809,380 100,419,681 101,094,552 4,266,704,275 8,581,770,263 1,629,173,689 15,026,695,414
Net insurance premium 1,671,139,627 53,773,891 172,849,405 216,968,287 274,070,751 918,056,008 4,622,512,007 7,929,369,976
Commission income 22,003,438 3,080,938 10,041,967 7,402,351 238,377,295 696,021,128 24,316,467 1,001,243,584
Net underwriting income (A) 1,693,143,065 56,854,829 182,891,372 224,370,638 512,448,046 1,614,077,136 4,646,828,474 8,930,613,560
Insurance claims paid 906,800,345 1,351,471 90,055,960 74,700,378 959,165,409 259,458,473 3,918,893,181 6,210,425,217
Outstanding-opening 1,841,612,038 68,805,420 229,659,688 291,598,982 1,779,285,442 2,008,445,696 3,186,981,921 9,406,389,187
Outstanding-closing 3,497,442,825 59,944,602 65,000,872 102,343,570 1,011,311,668 13,036,590,766 3,488,752,930 21,261,387,233
Insurance claims expenses 2,562,631,132 (7,509,347) (74,602,856) (114,555,034) 191,191,635 11,287,603,543 4,220,664,190 18,065,423,263
Reinsurance recoveries received - - - - 967,411,703 (4,789,020) 2,978,367,483 3,940,990,166
Recovery-opening 317,808,041 - 65,747,545 - 1,642,925,619 1,559,407,642 1,022,238,388 4,608,127,235
Recovery-closing 410,710,801 5,425,012 14,565,192 13,933,067 916,208,568 12,046,311,977 1,013,554,694 14,420,709,311
Insurance claims recovered from reinsures 92,902,760 5,425,012 (51,182,353) 13,933,067 240,694,652 10,482,115,315 2,969,683,789 13,753,572,242
Net claims 2,469,728,372 (12,934,359) (23,420,503) (128,488,101) (49,503,017) 805,488,228 2,382,908,657 4,311,851,021
Commission expense 238,436,093 5,737,831 17,826,997 20,175,216 128,068,292 414,481,619 1,202,435,484 2,027,161,532
Management expense 329,706,649 10,609,293 34,102,236 42,806,649 54,072,650 181,127,396 789,628,664 1,442,053,537
Premium deficiency expense (46,346,941)
Provision for doubtful debts-net - - - - - - - (542,510,469)
Net insurance claims and expenses (B) (3,037,871,113) (3,412,766) (28,508,730) 65,506,236 (132,637,926) (1,401,097,243) (4,374,972,805) (7,192,208,681)
Underwriting results (C=A-B) (1,344,728,048) 53,442,063 154,382,642 289,876,874 379,810,120 212,979,893 271,855,669 1,738,404,879
Net investment income 1,338,391,205
Rental income 126,643,188
Finance cost (2,760,634)
Other expenses (7,130,355)
Other income 419,206,393
Profit before tax 3,612,754,676
Less: Tax expense (931,915,282)
Profit after tax 2,680,839,394

Segment assets 1,693,143,065 56,854,829 182,891,372 224,370,638 512,448,046 1,614,077,136 4,646,828,474 8,930,613,560
Unallocated assets 54,924,331,718
63,854,945,278

Segment liabilities (3,037,871,113) (3,412,766) (28,508,730) 65,506,236 (132,637,926) (1,401,097,243) (4,374,972,805) (8,912,994,347)
Unallocated liabilities 24,438,009,574
15,525,015,227

Page - 65
December 31, 2021 Fire Marine cargo Marine hull Accident Aviation Engineering Proportional Treaty Total
-----------------------------------------------------------------------------------Rupees------------------------------------------------------------------------------------
Gross written premium 2,065,777,596 37,391,759 268,166,179 184,726,692 5,002,065,800 8,260,706,867 4,013,314,980 20,993,560,184
Add: unearned-opening 566,711,447 7,963,063 93,166,700 44,987,784 236,576,190 3,618,269,870 1,506,408,842 6,513,672,433
Less: unearned-closing 709,287,738 9,793,225 52,201,183 41,133,807 4,455,283,060 3,295,066,824 1,656,587,205 10,732,384,652
Premium earned 1,923,201,305 35,561,597 309,131,696 188,580,669 783,358,930 8,583,909,913 3,863,136,617 16,774,847,965
Reinsurance-ceded 280,488,850 - 122,814,988 6,298,277 4,501,440,964 7,496,589,005 - 13,127,923,393
Add: Prepaid reinsurance-opening 17,885,008 - 54,446,935 2,938,875 168,543,304 3,465,398,241 - 4,144,132,224
Less: Prepaid reinsurance-closing 40,842,152 - 22,227,920 3,150,578 4,237,630,265 3,095,679,708 - 7,722,831,183
Reinsurance expenses 257,531,706 - 155,034,003 6,086,574 432,354,003 7,866,307,538 - 9,549,224,434
Net insurance premium 1,665,669,599 35,561,597 154,097,693 182,494,095 351,004,927 717,602,375 3,863,136,617 7,225,623,531
Add: commission income 24,222,632 - 15,503,400 608,658 29,451,293 677,977,888 - 756,572,621
Net underwriting income - A 1,689,892,231 35,561,597 169,601,093 183,102,753 380,456,220 1,395,580,263 3,863,136,617 7,982,196,152
Insurance claims paid 445,711,029 3,618,623 24,557,819 50,987,802 1,434,500,711 225,926,383 2,472,516,667 5,511,516,252
Less: outstanding-opening 1,765,854,730 140,719,544 81,818,633 327,965,630 4,220,242,139 1,108,830,004 2,416,686,917 10,480,686,890
Add: outstanding-closing 1,841,612,038 68,805,420 229,659,688 291,598,982 1,779,285,442 2,008,445,696 2,327,078,907 9,406,389,187
Insurance claims expenses 521,468,337 (68,295,501) 172,398,874 14,621,154 (1,006,455,986) 1,125,542,075 2,382,908,657 4,437,218,549
Reinsurance recoveries received - - 17,629,422 - 1,304,660,267 117,392,517 - 1,655,094,346
Less: recovery-opening 245,413,842 66,733,022 29,989,753 - 3,974,870,199 845,050,591 - 5,603,808,031
Add: recovery-closing 317,808,041 - 65,747,545 - 1,642,925,619 1,559,407,642 - 4,608,127,235
Insurance claims recovered from reinsures 72,394,199 (66,733,022) 53,387,214 - (1,027,284,313) 831,749,568 - 659,413,550
Net claims 449,074,138 (1,562,479) 119,011,660 14,621,154 20,828,327 293,792,507 2,382,908,657 3,777,804,999
Commission expense 256,183,847 3,190,384 21,322,446 17,845,252 8,160,744 416,965,683 - 1,724,928,859
Management expense 168,050,812 3,587,840 15,547,046 18,411,983 35,413,184 72,399,510 324,332,280 728,999,259
Provision for doubtful debts-net 2,024,424 43,221 187,288 221,800 426,605 872,161 3,907,070 8,781,891
Net insurance claims and expenses - B (875,333,221) (5,258,966) (156,068,440) (51,100,189) (64,828,860) (784,029,861) (2,711,148,007) (6,240,515,008)
Underwriting results C = A-B 814,559,010 30,302,631 13,532,653 132,002,564 315,627,360 611,550,402 1,151,988,610 1,741,681,144
Net investment income 981,709,955
Rental income 104,379,330
Finance cost (2,548,867)
Fair value gain on investment property 698,055,394
Other expenses (8,195,243)
Other income 142,247,594
Premium deficiency expense (58,873,368)
Profit before tax 3,598,455,941
Less: Tax expense (1,024,831,827)
Profit after tax 2,573,624,114

Segment assets 1,689,892,231 35,561,597 169,601,093 183,102,753 380,456,220 1,395,580,263 3,863,136,617 7,982,196,152
Unallocated assets 38,480,287,344
46,462,483,496

Segment liabilities (875,333,221) (5,258,966) (156,068,440) (51,100,189) (64,828,860) (784,029,861) (2,711,148,007) (4,647,767,545)
Unallocated liabilities 17,564,470,927
12,916,703,382

Page - 66
55.1 Geographical segment

Although the operations of the Company are based primarily on business segments, the
Company also operates in geographical area. The following table shows the distribution of the
Company’s revenue, total assets and total liabilities by geographical segments:

2022 2021
Locations Lahore Karachi Lahore Karachi
Rupees in thousands Rupees in thousands

Premium earned 1,544,359 22,956,065 1,289,834 15,485,014

Commission expense 371,744 1,780,585 334,565 633,791

Losses paid 847,883 5,362,542 494,263 5,017,253

Outstanding liabilities 647,540 20,608,896 851,479 8,549,958

Management expenses 8,621 1,519,814 4,376 724,623

Total assets 1,610,695 62,244,250 800 46,804,751

55.2 Management has allocated indirect management expenses to underwriting business on the
basis of net premium revenue under individual business as per the stated accounting policy of
the Company.

55.3 Information about major customer

The following table presents insurance premium written from transactions with external
customer where such amounts equals and / or exceed ten per cent of the total premium written
by the Company.

December 31, December 31,

2022 2021
Note ------------- (Rupees) -------------
National Insurance Company
Limited - (related party)
Facultative business
Accident 268,358,879 7,265,923
Aviation 4,748,148,099 5,033,313,883
Engineering 9,617,379,837 7,695,742,240
Fire 86,581,123 125,294,124
Marine Cargo 141,888,012 -
Marine hull 258,274,396 249,347,056
15,120,630,346 13,110,963,226
Treaty business 836,595,287 375,660,324
54 15,957,225,633 13,486,623,550

Page - 67
56 MOVEMENT IN INVESTMENTS

Held to maturity Available for sale Held for trading Total

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

At beginning of previous year 7,641,957,966 4,218,090,877 174,704,866 12,034,753,710

Additions 16,760,414,750 143,504,966 - 16,903,919,716
Disposals / redemptions (15,589,152,879) (288,837,810) - (15,877,990,689)
Fair value net gains - (470,148,846) (27,631,714) (497,780,559)
(excluding net realized gains)
At beginning of current year 8,813,219,837 3,602,609,187 147,073,152 12,562,902,177
Additions 16,341,045,462 - 26,880,972 16,367,926,434
Disposals / redemptions (15,450,555,599) (150,000,000) - (15,600,555,599)
Fair value net gains (excluding
net - (628,063,502) (39,742,941) (667,806,443)
At end of current year 9,703,709,700 2,824,545,685 134,211,182 12,662,466,569

57 MANAGEMENT OF INSURANCE AND FINANCIAL RISK

The risk under any insurance contract is the possibility that the insured event occurs and the
uncertainty in the amount of compensation to the insured. Generally most insurance contracts
carry the insurance risk for a period of one year.

57.1 Insurance risk

The Company’s risk exposure is mitigated by employing a comprehensive framework to

identify, assess, manage and monitor risk. This framework includes implementation of
underwriting strategies which aim to ensure that the underwritten risks are well diversified in
terms of type and amount of the risk. Adequate reinsurance is arranged to mitigate the effect of
the potential loss to the Company from individual to large or catastrophic insured events.
Further, the Company adopts strict claim review policies including active management and
prompt pursuing of the claims, regular detailed review of claim handling procedures and
frequent investigation of possible false claims to reduce the insurance risk.

a) Frequency and severity of claims

Risk associated with general insurance contracts includes the reasonable possibility of
significant loss as well as the frequent occurrence of the insured events. This has been
managed by having in place underwriting strategy, reinsurance arrangements and proactive
claim handling procedures.

Page - 68
 The Company's class wise major risk exposure is as follows:

December 31, December 31,

2022 2021
Gross sum insured ------------- (Rupees) -------------

Fire 7,496,000 8,391,036

Marine cargo 1,200,000 840,000
Marine hull 1,481,000 3,116,100
Accident and others 499,000 3,523,209
Aviation 18,346,000 15,735,000
Engineering 5,502,000 3,882,079
34,524,000 35,487,424

The reinsurance arrangements against major risk exposure include excess of loss, surplus
arrangements and catastrophic coverage. The objective of having such arrangements is to
mitigate adverse impacts of severe losses on Company’s net retentions.

b) Source of uncertainty in estimation of future claim payments

Claims on general insurance contracts are payable on a claim occurrence basis. The Company
is liable for all insured events that occur during the term of the insurance contract including the
event reported after the expiry of the insurance contract term.

An estimated amount of the claim is recorded immediately on the intimation to the Company.
The estimation of the amount is based on management judgment or preliminary assessment by
the independent surveyor appointed for this purpose. The initial estimates include expected
settlement cost of the claims. The estimation of provision of claims incurred but not reported
(IBNR) is based on analysis of the past claim reporting pattern and confirmation received from
ceding companies.

There are several variable factors which affect the amount and timing of recognized claim
liabilities. The Company takes all reasonable measures to mitigate the factors affecting the
amount and timing of claim settlements. However, uncertainty prevails with estimated claim
liabilities and it is likely that final settlement of these liabilities may be different from initial
recognized amount. Similarly, the provision for claims incurred but not reported is based on
historic reporting pattern of the claims; hence, actual amount of incurred but not reported
claims may differ from the amount estimated.

Page - 69
Key assumptions

The principal assumption underlying the liability estimation of IBNR and Premium Deficiency
Reserves is that the Company’s future claim development will follow similar historical pattern
for occurrence and reporting. The management uses qualitative judgment to assess the extent
to which past occurrence and reporting pattern will not apply in future. The judgment includes
external factors e.g. treatment of one-off occurrence claims, changes in market factors,
economic conditions, etc. The internal factors such as portfolio mix, policy conditions and
claim handling procedures are further used in this regard.

The assumed net of reinsurance loss ratios for each class of business is as follows:

December 31, December 31,

2022 2021
------------- (Percentage) -------------
Assumed net loss ratio
Fire 68% 27%
Marine cargo 28% 4%
Marine hull 34% 77%
Accident and others 45% 8%
Aviation 30% 6%
Engineering 6% 41%

Sensitivity analysis

The risks associated with the insurance contracts are complex and subject to a number of
variables which complicate quantitative sensitivity analysis. The Company makes various
assumptions and techniques based on past claims development experience. This includes
indications such as average claims cost, ultimate claims numbers and expected loss ratios. The
Company considers that the liability for insurance claims recognized in the statement of
financial position is adequate. However, actual experience will differ from the expected
outcome.

As the Company enters into short term insurance contracts, it does not assume any significant
impact of changes in market conditions on unexpired risks. However, some results of
sensitivity testing are set out below, showing the impact of claims paid on profit before tax net
of reinsurance recoveries.

Profit before tax Shareholders' equity

2022 2021 2022 2021
----- Rupees in thousand ----- ----- Rupees in thousand -----

10% increase in expense (4,311,851) (377,780) (2,888,940) (268,224)

10% decrease in expense 4,311,851 377,780 2,888,940 268,224

Page - 70
57.2 Reinsurance and retrocession arrangements

The Company in the normal course of business, undertakes reinsurance business from local
insurance companies and controls its exposure to potential losses from large risk, by
retrocession to various foreign companies. Its significant portion of reinsurance and
retrocession is effected under treaty pact and excess of loss contracts.

The Company further evaluates the financial condition of ceding companies as well as it
reinsures to minimize its exposures to significant losses from reinsurance insolvencies.

The Company continues to remain under obligation of the ceding companies during the
validity of the contract and as a result it remains liable for the portion of outstanding claims
reinsured to the extent that reinsurer fails to meet the obligation under their agreements.

An analysis of gross amount due from other insurers and reinsurers recognized by the rating of
the entity, from which it is due are as follows:
December 31, December 31,
2022 2021
------------- (Rupees"000") -------------

A or above 6,148,149 5,369,528

BBB 1,573 40
Others 11,333,554 9,366,133
Total 17,483,276 14,735,701

57.3 Financial risk management objectives and policies

The Company’s activities expose to financial risks, credit risk, liquidity risk and market risk
(including interest / mark-up rate risk and price risk). The Company’s overall risk management
programme focuses on the unpredictability of financial markets and seeks to minimize
potential adverse effects on the financial performance. Overall, risks arising from the
Company’s financial assets and liabilities are limited. The Company consistently manages its
exposure to financial risk without any material change from previous period in the manner
described in notes below. The Board of Directors (the Board) has overall responsibility to the
establishment and oversight of Company’s risk management framework. The Board is also
responsible for developing the Company’s risk management policies.

a) Credit risk and concentration of credit risk

Credit risk is the risk that arises with the possibility that one party to a financial instrument
will fail to discharge its obligation and cause the other party to incur a financial loss. The
Company attempts to control credit risk by monitoring credit exposures by undertaking
transactions with a large number of counterparties in various industries and by continually
assessing the credit worthiness of counterparties.

Page - 71
Concentration of credit risk occurs when a number of counterparties have a similar type of
business activities. As a result, any change in economic, political or other conditions would
effect their ability to meet contractual obligations in similar manner. The Company’s credit
risk exposure is not significantly different from that reflected in the financial statements.

The management monitors and limits the company’s exposure to credit risk through
monitoring of client’s exposure and conservative estimates of provision for doubtful assets, if
any. The management is of the view that it is not exposed to significant concentration of credit
risk as its financial assets are adequately diversified in entities of sound financial standing,
covering various industrial sectors.

The carrying amount of financial assets represents the maximum credit exposure as specified
below:
December 31, December 31,
Note 2022 2021
------------- (Rupees"000") -------------

Bank balances 20 3,030,890,557 1,140,633,168

Loans and other receivables 14 462,488,314 285,844,726
Receivable from Sindh Revenue Board 15 2,573,888,727 2,573,888,727
Debt securities 13 9,907,026,504 9,174,069,234
Insurance / reinsurance receivables 16 17,393,374,952 13,686,203,094
Reinsurance recoveries against
outstanding claims 17 14,420,709,311 4,608,127,235
47,788,378,365 31,468,766,184

The Company did not hold any collateral against the above during the year. General provision
is made for insurance / reinsurance receivables and other receivables according to the
Company’s policy. The impairment provision is written off when the Company expects that it
cannot recover the balance due.
December 31, December 31,
The age analysis of insurance / reinsurance 2022 2021
receivable is as follows: ------------- (Rupees"000") -------------

Up to three months 6,790,472 5,819,178

Over three months but up to one year 8,803,863 7,603,629
Over one year but up to two years 1,627,586 738,514
Over two years but up to three years 177,416 109,122
Over three years 500,725 464,958
17,900,062 14,735,401
Provision against amount due from other insurers
and reinsurers (661,496) (1,049,198)
17,238,566 13,686,203

The credit quality of the Company's bank balances can be assessed with reference to external
credit ratings as follows:

Page - 72
 Short term Long term Rating 2022 2021
agency ------------- (Rupees"000") -------------
National Bank of Pakistan A-1+ AAA PACRA 69,008 39,125
Bank Al-Habib Limited AA+ PACRA 1,464,745 1,079,652
Bank Alfalah Limited A-1+ AA+ PACRA 24,031 21,818
Sindh Bank Limited A-1 A+ JCR-VIS 42 38
Dubai Islamic Bank 1,472,729
3,030,556 1,140,633

b) Liquidity risk

Liquidity risk is the risk that the Company will be unable to meet its funding requirements. To
guard against the risk, the Company has diversified funding sources and assets are managed
with liquidity in mind, maintaining a healthy balance of cash and cash equivalents and readily
marketable securities. The maturity profile is monitored to ensure adequate liquidity.

The following are the contractual maturities of financial liabilities, including estimated interest
payments on an undiscounted cash flow basis:

Contractual cash
Carrying amount Maturity in one year Maturity exceeding one year
flows
--------------------- (Rupees "000")---------------------
31-Dec-22
Outstanding claims including IBNR 21,256,435 21,256,435 21,256,435 -
Insurance / reinsurance payables 10,932,283 10,932,283 10,932,283 -
Other creditors and accruals 109,158 109,158 109,158 -
Lease liabilities 29,239 29,239 29,239 29,239
32,327,115 32,327,115 32,327,115 29,239

Contractual cash
Carrying amount Maturity in one year Maturity exceeding one year
flows
--------------------- (Rupees "000")---------------------
31-Dec-21
Outstanding claims including IBNR 9,401,437 9,401,437 9,401,437 -
Insurance / reinsurance payables 8,208,198 8,208,198 8,208,198 -
Other creditors and accruals 89,257 89,257 89,257 -
Lease liabilities 29,239 29,239 8,861 20,378
29,335,167 29,335,167 29,314,789 20,378

c) Market risk

Market risk is the risk that the fair value of a financial instrument will fluctuate as a result of
changes in market prices. The Company is exposed to market risk with respect to its
investments. The Company has invested its funds in Government securities, ordinary shares,
National Investment Trust Units and close ended mutual funds resulting in risk arising from
fluctuation in the rate of interest and dividend earned thereon and the possibility of capital
gains or losses arising from the sale of these investments.

Page - 73
 The Company minimizes such risk by having a diversified investments portfolio. In addition,
the Company actively monitors the key factors that affect investment market.

Sensitivity analysis

The table below summarizes the Company’s equity price risk as of December 31, 2022 and
2021 and shows the effects of a 10% increase and a 10% decrease in market prices as at the
year end. The selected change does not reflect what could be considered to be the best or worst
case scenarios. Indeed, results could be worse in Company's equity investment portfolio
because of the nature of equity markets.

Estimated fair
Increase / (decrease)
Fair value value after Profit before tax
in shareholders equity
change in price
--------------------- (Rupees "000")---------------------

31-Dec-22
10% increase 2,755,440 3,030,984 187,370 275,544
10% decrease - 2,479,896 (187,370) (275,544)

31-Dec-21
10% increase 2,755,583 3,031,142 195,646 275,558
10% decrease - 2,480,025 (195,646) (275,558)

d) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Company invests in securities and
has deposits that are subject to interest / mark-up rate risk. Interest / mark-up rate risk to the
Company is the risk of changes in market interest / mark-up rates reducing the overall return
on its interest bearing securities. The Company limits interest / mark-up rate risk by
monitoring changes in interest / mark-up rates in the currencies in which its cash and
investments are denominated. The following table provides information about the exposure of
the Company to interest / mark-up rate risk at the balance sheet date based on contractual re-
pricing or maturity dates which ever is earlier:
2022
Interest bearing financial instruments Non-interest
Effective
bearing
rate per Maturity Maturity Maturity
financial Total
annum up to over one year more than Sub total
instruments
(percentage) one year to five years five years

--------------------------------------------- ('Rupees "000")---------------------------------------------

Financial assets
Cash and bank deposits 14 to 16 2,295,301 - - 2,295,301 735,589 3,030,891
Investments 9.36 to 17.38 5,661,117 4,004,055 241,853 9,907,025 2,755,440 12,662,465
Insurance / reinsurance receivables - - - - 17,393,375 17,393,375
Receivable from Sindh revenue board - - - - 2,573,889 2,573,889
Loans and other receivables 14,389 - - 14,389 432.93 447,316
Reinsurance recoveries against
outstanding claims - - - - 14,420,709 14,420,709
Subtotal 7,970,807 4,004,055 241,853 12,216,715 37,879,435 50,528,645

2021
InterestPage - 74
/ mark-up bearing financial instruments Non-interest /
Effective
Maturity mark-up
 2021
Interest / mark-up bearing financial instruments Non-interest /
Effective
Maturity mark-up
rate per Maturity Maturity
over one bearing Total
annum up to more than Sub total
year financial
(percentage) one year five years
to five years instruments
Rupees in thousand
Financial assets
Cash and bank deposits 6.25 to 11.25 389,437 - - 389,437 1,101,845 1,491,282
Investments 5.90 to 12 7,267,248 2,316,246 (409,425) 9,174,069 3,388,833 12,562,902
Insurance / reinsurance
receivables - - - - 13,686,203 13,686,203
Receivable from Sindh revenue
board - - - - 2,573,889 2,573,889
Loans and other receivables 74,020 - - 74,020 211,825 285,845
Reinsurance recoveries against
outstanding claims - - - - 4,608,127 4,608,127

Subtotal 7,730,705 2,316,246 (409,425) 9,637,526 25,570,722 35,208,248

Financial liabilities
Outstanding claims including
IBNR - - - - 9,401,437 9,401,437
Insurance / reinsurance payables - - - - 8,208,198 8,208,198
Lease liabilities 8,861 7,830 12,548 29,239 - 29,239
Other creditors and accruals - - - - 295,214 295,214
Subtotal 8,861 7,830 12,548 29,239 17,904,849 17,934,088
Total 7,721,844 2,308,416 (421,973) 9,608,287 7,665,873 17,274,160
Interest risk sensitivity gap 7,721,844 2,308,416 (421,973) 9,608,287
Cumulative interest risk sensitivity gap 7,721,844 10,030,260 9,608,287
Sensitivity analysis

The Company does not account for any fixed rate financial assets and liabilities at fair value
through profit or loss. Therefore, a change in interest rate will not effect fair value of any
financial instrument. For cash flow sensitivity analysis of variable rate instruments a change of
100 basis points in interest rates at the reporting date would have decreased /(increased) profit
for the year by the amounts shown below.

It is assumed that the changes occur immediately and uniformly to each category of instrument
containing interest rate risk. Variations in market interest rates could produce significant
changes at the time of early repayments. For these reasons, actual results might differ from
those reflected in the details specified below. The analysis assumes that all other variables
remain constant.

Page - 75
 2022 2021
Increase Decrease Increase Decrease
in profit / (loss) upon in profit / (loss) upon
change of 100 bps change of 100 bps
--------------------- (Rupees "000")---------------------

Cash flow sensitivity - variable rate

financial liabilities - - - -

Cash flow sensitivity - variable rate

financial assets 99,070 (99,070) 92,131 (92,131)

e) Foreign currency risk

Foreign currency risk is the risk that the value of financial instrument will fluctuate due to
change in foreign exchange rates. The Company principal transactions are carried out in
Pakistani Rupee and its exposure to foreign exchange risk arises primarily with respect to US
Dollar. Financial assets exposed to foreign exchange risk amounted to Rs. 1,472.728 million
(2021: Rs.285.809 million) at reporting date.
The following significant exchange rates were applied during the year:
2022 2021 2022 2021

Rupees per US Dollars Rupees per UK Pound

Average rate 204.47 162.97 251.49 224.05

Report date rate 226.40 177.1 272.63 240.59

57.4 Capital risk management

Capital management objectives and requirements related to regulatory, solvency and paid up
capital requirements are set and regulated by the Securities and Exchange Commission of
Pakistan (SECP). These objectives and requirements are put in place to ensure sufficient
solvency margins. Further, objective are set by the Company to maintain a strong credit rating
and healthy capital ratios in order to support business objectives, maximize shareholders value
and provide returns for benefits for other stakeholders.

The Company manages its capital structure by monitoring return on net assets and makes
adjustments to it in the light of changes in economic conditions. In order to maintain or adjust
the capital structure, the Company may adjust the amount of dividend paid to shareholders or
issue new shares.

Currently the Company has a paid up capital of Rs. 9,000 million against the minimum
required paid-up capital of Rs. 500 million set by the SECP for the non-life insurance
companies for the year ended December 31, 2022.

Page - 76
 The Company monitors capital using gearing ratio. Net debt is calculated as total liabilities (as
shown in statement of financial position) less cash and cash equivalents. Equity comprises all
components of equity.

The Company's net debt to equity ratio as at December 31, 2022 was as follows:

2022 2021
------------- (Rupees"000") -------------
Total liabilities 49,533,538 33,733,357
Less: cash and cash equivalents 3,030,891 (1,140,841)
Net debt (A) 52,564,428 32,592,516

Total equity (B) 14,321,408 13,072,195

Total debt and equity (C=A+B) 66,885,836 45,664,711

Gearing ratio (A/C) 79% 71%

58 FAIR VALUE OF FINANCIAL INSTRUMENTS

58.1 Carrying amount and fair value

The following table compares the carrying amounts and fair values of the Company’s financial
assets and financial liabilities as at December 31, 2022.

The Company considers that the carrying amount of the following financial assets and
financial liabilities are a reasonable approximation of their fair value:

December 31, December 31,

2022 2021
Carrying amount Fair value Carrying amount Fair value
Financial assets

Equity securities
Held for trading
Ordinary shares - listed 134,211,185 134,211,185 147,073,152 147,073,152
Available for sale
Ordinary shares - listed 644,748,926 644,748,926 1,872,955,022 1,872,955,022
Mutual fund units 479,342,468 479,342,468 1,368,187,154 1,368,187,154
Ordinary share - unlisted 617,615 617,615 617,615 617,615
Debt securities
Pakistan Investment Bonds 4,424,006,929 4,424,006,929 2,498,062,434 3,376,000,000
Treasury Bills 5,180,006,150 4,975,000,000 6,576,126,800 4,975,000,000

Page - 77
 December 31, December 31,
2022 2021
Carrying amount Fair value Carrying amount Fair value

Terms Finance Certificate 99,840,000 99,840,000 99,880,000 99,880,000

Loans and other receivables 462,488,314 462,488,314 285,844,726 285,844,726
Receivable from Sindh Revenue
Board 2,573,888,727 2,573,888,727 2,573,888,727 2,573,888,727
Insurance / reinsurance receivables 17,393,374,952 17,393,374,952 13,686,203,094 13,686,203,094
Reinsurance recoveries against
outstanding claims 14,420,709,311 14,420,709,311 4,608,127,235 4,608,127,235
Cash and cash equivalent 3,030,890,557 3,030,890,557 1,140,841,359 1,140,841,359
48,844,125,134 48,639,118,984 34,857,807,318 34,134,618,084
Financial liabilities

Outstanding claims including IBNR 21,008,473,085 21,008,473,085 10,475,734,890 10,475,734,890

Unearned premium reserves 12,047,709,680 12,047,709,680 6,513,672,434 6,513,672,434
Unearned reinsurance commission 539,143,250 539,143,250 338,532,613 338,532,613
Retirement benefit obligations 3,039,780,500 3,039,780,500 3,188,627,998 3,188,627,998
36,635,106,515 36,635,106,515 20,516,567,935 20,516,567,935
58.2 Fair value hierarchy

The level in the fair value hierarchy within which the financial asset or financial liability is
categorized is determined on the basis of the lowest level input that is significant to the fair
value measurement.

Financial assets and financial liabilities are classified in their entirety into only one of the three
levels.

The fair value hierarchy has the following levels:

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

liabilities.

- Level 2 - inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices)

- Level 3 - inputs for the asset or liability that are not based on observable
market data (unobservable inputs).

The table below analyses financial instruments measured at the end of the reporting period by
the level in the fair value hierarchy into which the fair value measurement is categorized:

December 31,2022 Total Level 1 Level 2 Level 3

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

Financial assets measured at fair value

Held-for-trading investment
Ordinary shares - listed 134,211,185 134,211,185 - -
Available-for-sale investment
Ordinary shares - listed 644,748,926 644,748,926 - -

Page - 78
 December 31,2022 Total Level 1 Level 2 Level 3
-------------------------------- Rupees --------------------------------

Mutual fund units 479,342,468 479,342,468 - -

Ordinary shares - unlisted 617,615 - - 617,615

December 31,2021

Financial assets measured at fair value

Held-for-trading investment
Ordinary shares - listed 147,073,152 147,073,152 - -

Available-for-sale investment
Ordinary shares - listed 1,872,955,022 1,872,955,022 - -
Mutual fund units 1,368,187,154 1,368,187,154 - -
Ordinary shares - unlisted 617,615 - - 617,615

58.3 Transfers during the period

There were no transfers between Level 1 and Level 2 fair value measurements.
There were no transfers into or out of Level 3 fair value measurements.

58.4 Valuation techniques

For level 2 investments - held to maturity, the fair value has been determined by using the rates
at the reporting date as per Financial Market Association of Pakistan in respect of T bills and
PIBs.

For Level 3 available-for-sale investments, the Company values the investment at lower of
carrying value and breakup value.
December 31, December 31,
2022 2021
59 PROVIDENT FUND ------------- (Rupees) -------------

Net assets of the fund 147,039,158 158,081,087

Cost of investments 71,639,865 69,052,878

Fair value of investments 99,056,163 97,922,004

Cost of investment / net assets of the fund 48.72% 43.68%

59.1 Break-up of investments of provident fund

Investment in equity collective investment schemes 7,850,000 7,850,000

Investment in Government securities 32,335,905 39,042,280
TDR 25,963,588 22,000,000
Bank Balances 5,490,372 160,598
59.2 71,639,865 69,052,878

Page - 79
59.2 Investments out of provident fund have been made in accordance with the provisions of the
section 218 of Companies Act, 2017 and the rules formulated for this purpose.

60 STATEMENT OF SOLVENCY
December 31, December 31,
2022 2021
Note ------------- (Rupees) -------------
Assets
Property and equipment 446,068,118 429,090,184
Right of use asset 1,639,605,577 1,801,531,334
Capital work in progress 10,083,343 8,474,168
Investment property 722,274,603 722,274,602
Investments
Equity securities 2,755,440,067 3,388,832,943
Debt securities 9,907,026,504 9,174,069,234

Receivable from Sindh Revenue Board 2,573,888,727 2,573,888,727

Loans and other receivables 462,488,314 285,844,726
Insurance / reinsurance receivables 17,393,374,952 13,686,203,094
Reinsurance recoveries against outstanding
claims including IBNR 14,420,709,311 4,608,127,235
Deferred commission expense 931,382,139 806,214,206
Taxation - payments less provision 78,557,588 -
Prepayments 8,943,542,637 7,723,545,836
Cash and cash equivalent 3,030,890,557 1,140,841,359
Total
Total Assets From Window re-takaful operations
operator's Fund 539,612,842 456,613,640
Total assets (A) 63,854,945,278 46,805,551,288

In-admissible assets as per following

clause of section 32 (2) of Insurance
Ordinance, 2000
Property and equipment (2) (u-i, ii & iii) 257,325,826 230,414,087
Right of use asset SRO 1012(i) 2022 1,616,572,428 1,801,531,334
Receivable from Sindh Revenue Board 2,573,888,727 2,573,888,727
Capital work in progress (2) (i) 10,083,343 8,474,168
Investments (2) (p & s) 11,625,597 63,750,607
Loans and other receivables (2) (d) - 74,019,617
Insurance / reinsurance receivables more
than three months (2) (h) 10,026,979,095 5,819,172,000
Total in-admissible assets (B) 14,496,475,017 10,571,250,540
Total admissible assets (C=A-B) 49,358,470,261 36,234,300,748

Page - 80
 December 31, December 31,
2022 2022
------------- (Rupees) -------------
Total liabilities
Underwriting provisions
Outstanding claims including IBNR 21,256,435,233 9,401,437,187
Unearned premium reserves 12,047,709,680 10,732,384,652
Unearned reinsurance commission 539,143,250 523,294,102
Premium deficiency reserve 12,526,427 58,873,368
Retirement benefit obligations 3,630,799,590 3,206,839,590
Taxation liabilities- provision less payments - 366,732,044
Deferred taxation 741,089,481 810,480,910
Lease liabilities 23,033,149 29,238,876
Insurance / reinsurance payables 10,932,282,952 8,208,198,213
Unclaimed dividends 88,652,013 205,956,627
Other creditors and accruals 109,158,042 89,257,122
Total liabilities from Window Takaful Operations
OPF 152,707,799 100,663,982
Total liabilities (D) 49,533,537,615 33,733,356,673

Total net admissible assets (E=C-D) (175,067,354) 2,500,944,075

Minimum solvency requirement (higher

of following)

Method A - u/s 36(3)(a) 150,000,000 150,000,000

Method B - u/s 36(3)(b) 2,295,606,539 1,677,484,797
Method C - u/s 36(3)(c) 3,330,414,491 2,031,900,456
(3,330,414,491) (2,031,900,456)
Excess of net admissible assets over
minimum requirements (3,505,481,845) 469,043,619

60.1 In terms of Section 36 of the Insurance Ordinance, 2000, the Company is required to
maintain the minimum solvency ratio at all times to be computed in a manner as prescribed
under the above section. As of the reporting date, the Company has breached such solvency
requirement. Such breach indicates that a material uncertainty exists that may cast
significant doubt on the Company’s ability to continue as a going concern. The above-
mentioned events or conditions may cast significant doubt on the Company’s ability to
continue as a going concern and, therefore, it may be unable to realize its assets and
discharge its liabilities in the normal course of business.

61 CORRESPONDING FIGURES

Corresponding figures have been rearranged and reclassified, wherever necessary for the
purpose of comparison.

Page - 81
62 SUBSEQUENT NON ADJUSTING EVENTS

The Board of Directors in its meeting held on _________ have recommended a final cash
dividend of Rs. _________ per share and a bonus issue of Rs. _____ per share for the
approval of the members in the annual general meeting to be held on___________________.

These financial statements for the year ended December 31, 2021 do not include the effect of
these appropriations and these will be accounted in the financial statements for the year
ending December 31, 2022.

63 DATE OF AUTHORIZATION FOR ISSUE

These financial statements have been authorized for issue on ________________ by the
Board of Directors of the Company.

64 GENERAL

All figures have been rounded off to the nearest rupee unless otherwise stated.

Page - 82
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PAKISTAN REINSURANCE COMPANY LIMITED -
WINDOW RETAKAFUL OPERATIONS

Disclaimer of Opinion

We were engaged to audit the annexed financial statement of Pakistan Reinsurance Company Limited-
Window Retakful Operation, which comprise the statement of financial position as of December 31, 2022,
the statement of profit and loss account, the statement of comprehensive income, the statement of
changes in the fund and the statement of cash flows for the year ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory information and
we state that we have not obtained all the information and explanation which, to the best of our
knowledge and belief, were necessary for the purpose of the audit.

We do not express an opinion on the accompanying financial statements of Pakistan Reinsurance Company
Limited- Window Retakaful Operation. Because of the significance of the matters described in basis for
Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit
evidence to provide a basis for an audit opinion on these financial statements.

Basis for Disclaimer of Opinion

1. Treaty- Proportional Business

As disclosed in 8, 12, 13, 20, 28, 30, 35 and 38 to these financial statements, certain account balances
and class of transactions have been recorded against treaty proportional business. We were unable to
obtain sufficient and appropriate evidence in respect of such account balances and class of
transactions because the Company does not establish any system and controls to verify the
transactions and only relies on the amounts provided in the statuary quarterly returns and bordereaux.
Consequently, we were unable to verify and determine whether any adjustments to these amounts
were necessary.

2. Unreconciled Balances

As stated in note 8 to the financial statements, amount due from retakaful participants on account of
treaty and facultative retakaful business includes gross amount of Rs. 423.435 million and net amount
of Rs. 410.660 million which remain unreconciled as of the reporting date. The Company is in the
process of reconciling these balances. Due to pending reconciliations relating to the above balances,
resultant adjustment and consequential impact thereon, if any, on these financial statements remain
unascertained.

3. Emphasis of Matter

We draw attention to the note 27.1 to these financial statements which explains that notice was
served by Sindh Revenue Board (SRB) in 2016 for non-filing of sales tax returns and raised sales tax
liability via same notice on conventional reinsurance service provider by the Operator. Our opinion is
not modified in respect of this matter.

Information Other than the Financial Statements and Auditor’s Report Thereon

Management is responsible for the other information. The other information comprises the information
included in the annual report but does not include the financial statements and our auditor’s report
thereon.

Page - 1
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Board of Directors for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the accounting and reporting standards as applicable in Pakistan and the requirements
of the Insurance Ordinance, 2000 and the Companies Act, 2017(XIX of 2017) and for such internal control
as management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.

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

Board of directors are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

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

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

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.

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

Page - 2
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.

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

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

Report on Other Legal and Regulatory Requirements

Based on our audit, we further report that in our opinion, except for the effects of the matters described
in the basis for disclaimer of opinion section of our report:

a) proper books of account have been kept by the Company as required by Insurance Ordinance, 2000
and the Companies Act, 2017 (XIX of 2017);

b) the statement of financial position, the profit and loss account, the statement of comprehensive
income, the statement of cash flows and the statement of changes in equity together with the notes
thereon have been drawn up in conformity with the Insurance Ordinance, 2000 and the Companies
Act, 2017 (XIX of 2017) and are in agreement with the books of account;

c) investments made, expenditure incurred and guarantees extended during the year were for the
purpose of the Company’s business; and

d) no zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).

Other Matter

The financial statements of the Company for the year ended December 31, 2021 were audited by another
firm of chartered accountants, who expressed disclaimer of opinion on those financial statements vide
their report dated April 25, 2022.

The engagement partner on the audit resulting in this independent auditor’s report is Mr. Tariq Feroz
Khan.

KARACHI

DATED: BDO EBRAHIM & CO.

CHARTERED ACCOUNTANTS
UDIN:

Page - 3
PAKISTAN REINSURANCE COMPANY LIMITED - WINDOW RETAKAFUL OPERATION
STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, 2022

Operator's Retakaful Fund Participant's Retakaful fund

December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
Note ------------------------------Rupees------------------------------
ASSETS
Investments 6 20,196,059 18,307,796 99,193,301 89,759,175
Other receivable 7 4,084,045 2,865,576 10,631,103 1,231,247
Takaful/ retakaful receivables 8 - - 503,635,945 330,413,954
Receivables from Participant's/Operator's
Retakaful fund - net 9 - - 14,683,246 3,309,474
Qard-e-hasna to Participant's Retakaful Fund 10 300,000,000 244,254,221 - -
Retakaful recoveries against outstanding claims 11 - - 230,780,709 29,382,727
Deferred wakala fee 12 - - 103,114,993 77,933,450
Deferred commission expense 13 103,795,712 80,659,235 - -
Prepayments 14 - - 87,351,654 76,368,847
Bank balances 15 111,537,025 110,526,812 1,110,117,788 598,618,743
TOTAL ASSETS 539,612,841 456,613,640 2,159,508,739 1,207,017,617
FUND AND LIABILITIES
FUNDS ATTRIBUTABLE TO:
Operator`s Retakaful Fund
Statutory fund 16 300,000,000 300,000,000 - -
Reserves 17 86,905,042 55,949,658 - -
Total Operator's Funds 386,905,042 355,949,658 - -
Participant's Retakaful Fund
Seed money 18 - - 1,000,000 1,000,000
Reserves 17 - - 445,084,170 97,147,953
Balance of Participant's Retakaful Fund 446,084,170 98,147,953
Qard-e-Hasna 10 - - 300,000,000 244,254,221
- - 746,084,170 342,402,174
LIABILITIES
Underwriting provisions
Outstanding claims including IBNR 19 - - 721,865,204 314,149,375
Unearned contribution reserves 20 - - 515,574,963 389,667,246
Contribution deficiency reserve 21 - - - 42,862,640
- - 1,237,440,167 746,679,261
Unearned wakala fee 12 103,114,993 77,933,450 - -
Takaful/retakaful payables 22 - - 175,952,712 117,935,182
Payable to Participant/ Operator's
Retakaful Fund - net 9 14,683,246 3,309,474 - -
Taxation - provision less payment 23 20,615,023 13,404,751 - -
Deferred taxation 24 182,212 319,252 - -
Other creditors and accruals 25 2,437,660 1,243,041 31,690 1,000
Payable to related party 26 11,674,665 4,454,014 - -
TOTAL LIABILITIES 152,707,799 100,663,982 1,413,424,569 864,615,443
TOTAL EQUITY AND LIABILITIES 539,612,841 456,613,640 2,159,508,739 1,207,017,617
CONTINGENCIES AND COMMITMENTS 27

The annexed notes 1 to 45 form an integral part of these financial statements.

Chairman Director Director Chief Executive Officer Chief Financial Officer

PAKISTAN REINSURANCE COMPANY LIMITED - WINDOW RETAKAFUL OPERATION
STATEMENT OF PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2022

December 31, 2022 December 31, 2021

---------------------------Rupees---------------------------
Note
Participant's Retakaful Fund
Contributions earned 1,079,281,056 782,357,018
Less: contributions ceded to retrotakaful (100,155,434) (91,942,133)
Net contribution revenue 28 979,125,622 690,414,885
Wakala fee expense 29 (215,856,211) (156,471,404)
Net underwriting income 763,269,411 533,943,481
Net claims - reported/ settled - IBNR 30 (501,892,882) (311,243,050)
Reversal / (charge) of contribution deficiency reserve 42,862,640 (23,851,863)
Surplus before investment income 304,239,169 198,848,568
Investment income 31 8,316,060 4,560,461
Other income 32 72,908,632 10,080,104
Less: Modarib's fees (20,306,173) (3,660,141)
(Charge) / Reversal for doubtful contributions 8.1 (8,773,125) 2,850,015
Surplus before taxation 356,384,563 212,679,007
Taxation 34 (10,760,328) (2,027,758)
Surplus transferred to accumulated surplus 345,624,235 210,651,249

Operator's Retakaful Fund

Wakala fee income 29 215,856,211 156,471,404
Commission expense 35 (213,471,407) (145,151,427)
General, administrative and management expenses 36 (15,746,091) (7,937,109)
(13,361,287) 3,382,868
Investment income 1,687,509 920,194
Other income 34,143,170 14,518,979
Modarib's fee 20,306,173 3,660,141
56,136,852 19,099,314
Profit before taxation 42,775,565 22,482,182
Taxation (12,404,914) (6,519,833)
Profit after taxation attributable to shareholders 30,370,651 15,962,349

The annexed notes 1 to 45 form an integral part of these financial statements.

Chairman Director Director Chief Executive Officer Chief Financial Officer

PAKISTAN REINSURANCE COMPANY LIMITED - WINDOW RETAKAFUL OPERATION
STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED DECEMBER 31, 2022
Operator's Retakaful Fund Participant's Retakaful Fund
December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
-------------------------------Rupees-------------------------------
OPERATING CASH FLOWS
Retakaful activities
Contributions received - - 1,031,966,782 813,424,282
Retro takaful contribution paid - - (53,120,710) (34,571,803)
Benefits paid - - (323,529,673) -
Benefits recoveries from retro takaful - - 27,954,638 (325,612,745)
Commission paid (236,607,884) (184,305,739) - -
Net cash (used in) / from retakaful activities (236,607,884) (184,305,739) 683,271,037 453,239,734
Other operating activities
Income tax paid (5,194,642) (2,075,981) (10,760,328) (2,027,758)
Management expenses paid (15,746,092) (7,455,110) - -
Other operating receipts / (payments) 279,777,461 217,277,232 (290,859,989) (209,563,936)
Net cash from / (used in) other operating activities 258,836,727 207,746,141 (301,620,317) (211,591,694)
Total cash flow from all operating activities 22,228,843 23,440,402 381,650,720 241,648,040
Investment activities
Payment for investments made (1,303,529) (1,007,959) (7,122,145) (3,755,694)
Receipt of profit on bank deposits 34,143,170 11,753,404 72,908,632 9,320,436
Receipt of investment income 1,687,509 920,194 8,316,060 4,560,461
Total cash flow from investing activities 34,527,150 11,665,639 74,102,547 10,125,203
Financing activities
Qard-e-hasna (55,745,779) (244,254,221) 55,745,779 244,254,221
Total cash flow from financing activities (55,745,779) (244,254,221) 55,745,779 244,254,221
Net cash flow from / (used-in) all activities 1,010,214 (209,148,180) 511,499,045 496,027,464
Cash and cash equivalents at beginning of the period 110,526,812 319,674,992 598,618,743 102,591,279
Cash and cash equivalents at end of the period 111,537,025 110,526,812 1,110,117,788 598,618,743

Reconciliation to profit and loss

Operating cash flows 22,228,843 23,440,402 381,650,720 241,648,040
Receipt of profit on bank deposits 34,143,170 11,753,404 72,908,632 4,560,461
Receipt of investment income 1,687,509 920,194 8,316,060 9,320,436
(Decrease) / increase in operating assets other than cash 24,491,986 11,770,057 431,557,951 170,263,294
(Increase) / decrease in operating liabilities (44,970,585) (27,477,856) (548,809,127) (215,140,982)
Other adjustments:
Income tax paid 5,194,642 2,075,981 10,760,328 2,027,758
Profit before taxation 42,775,564 22,482,182 356,384,563 212,679,007
Provision for taxation (12,404,914) (6,519,833) (10,760,328) (2,027,758)
Profit after taxation 30,370,650 15,962,349 345,624,235 210,651,249

The annexed notes 1 to 45 form an integral part of these financial statements.

PAKISTAN REINSURANCE COMPANY LIMITED - WINDOW RETAKAFUL OPERATION
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2022

December 31, December 31,

Note 2022 2021
---------------------------Rupees---------------------------
Participants' Retakaful Fund
Surplus for the period 345,624,235 210,651,249
Other comprehensive income

Item that may be subsequently reclassified to profit and loss account

Unrealised gain on 'available for sale' investments - net of tax 2,311,982 1,416,925
Total comprehensive income for the period 347,936,217 212,068,174

Operator's Retakaful Fund

Profit after taxation 30,370,651 15,962,349
Other comprehensive income for the year

Item that may be subsequently reclassified to profit and loss account

Unrealized gain on revaluation of available-for-sale investments- net of tax 584,733 48,126
Total comprehensive income for the year 30,955,384 16,010,475

The annexed notes 1 to 45 form an integral part of these financial statements.

Chairman Director Director Chief Executive Officer Chief Financial Officer

PAKISTAN REINSURANCE COMPANY LIMITED - WINDOW RETAKAFUL OPERATION
STATEMENT OF CHANGES IN FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2022
Attributable to Operator`s Retakaful Fund
Reserves
Capital Revenue
Statutory Fund Unrealized gain Total
Unappropriated
on available for Total reserves
profit
sale investment
---------------------------------------------------Rupees------------------------------------------------

Balance as at January 01, 2021 300,000,000 169,179 39,770,004 39,939,183 339,939,183

Unrealized gain on available for sale investments-net - 48,126 - 48,126 48,126
Profit for the year - - 15,962,349 15,962,349 15,962,349
Balance as at December 31, 2021 300,000,000 217,305 55,732,353 55,949,658 355,949,658

Balance as at January 01, 2022 300,000,000 217,305 55,732,353 55,949,658 355,949,658

Profit for the year - - 30,370,651 30,370,651 30,370,651
Unrealized loss on available for
sale investments-net of tax - 584,733 - 584,733 584,733
Balance as at December 31, 2022 300,000,000 802,038 86,103,004 86,905,042 386,905,042

Attributable to Participant's Retakaful Fund

Reserves
Capital Revenue
Seed money Unrealized gain Total
Accumulated
on available for Total reserves
(deficit) / surplus
sale investment
---------------------------------------------------Rupees------------------------------------------------

Balance as at January 01, 2021 1,000,000 1,887,212 (116,807,433) (114,920,221) (113,920,221)

Total comprehensive income for the year
Unrealized gain on available for sale investments-net - 1,416,925 - 1,416,925 1,416,925
Surplus for the year - - 210,651,249 210,651,249 210,651,249
Balance as at December 31, 2021 1,000,000 3,304,137 93,843,816 97,147,953 98,147,953

Balance as at January 01, 2022 1,000,000 3,304,137 93,843,816 97,147,953 98,147,953

Total comprehensive income for the year
Surplus for the year - - 345,624,235 345,624,235 345,624,235
Unrealized gain on available for sale investments-net - 2,311,982 - 2,311,982 2,311,982
Balance as at December 31, 2022 1,000,000 5,616,119 439,468,051 445,084,170 446,084,170

The annexed notes 1 to 45 form an integral part of these financial statements.

PAKISTAN REINSURANCE COMPANY LIMITED - WINDOW RETAKAFUL OPERATIONS
NOTES TO THE FINANCIAL STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2022

1 LEGAL STATUS AND NATURE OF BUSINESS

1.1 Pakistan Reinsurance Company Limited (the Company) is a pubic listed company incorporated in
Pakistan on March 30, 2000 under the repealed Companies Ordinance, 1984 (now the Companies
Act, 2017). Pakistan Reinsurance Company Limited - Window Retakaful Operations (the
Operator) is listed on Pakistan Stock Exchange and is engaged in general retakaful business which
comprise of fire, marine, aviation, engineering and accident. The registered office of the Operator
is situated at PRC Tower, 32-A, Lalazar Drive, Maulvi Tamizuddin Khan Road, Karachi. The
zonal office of the Operator is located at 1st floor, 15-A, Davis Road, State Life Building, Lahore,
Pakistan.

1.2 The Operator has been authorized to undertake Window Retakaful Operations on September 26,
2018 by Securities and Exchange Commission of Pakistan (SECP) under Takaful Rules, 2012 to
carry on General Window Retakaful Operations in Pakistan. For the purpose of carrying on the
Retakaful business, the Operator has formed a Waqf (Participants’ Retakaful Fund) on September
26, 2018 under the Waqf Deed with a Seed money of Rs. 1,000,000.

1.3 The Waqf Deed and Participant Retakaful Fund Policies (Waqf Rules) govern the relationship of
Operator, Waqf and Participants for management of Retakaful operations, investment of
Waqf and Operator’s Fund as approved by the Shariah Advisor of the Operator. The accounts
of the Waqf are maintained by the Operator in a manner that the assets and liabilities of Waqf
remain separately identifiable. The financial statements of the Operator are prepared in such a
manner that the financial position and results from the operations of Waqf and the Operator are
shown separately.

2 BASIS OF PREPARATION

2.1 Statement of compliance

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

-International Financial Reporting Standards (IFRS) 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, General Takaful Accounting Regulations, 2019, Insurance Accounting
regualtions 2017 and Takaful Rules, 2012.

In case requirements differ, the provisions or directives issued under the Companies Act, 2017,
the Insurance Ordinance, 2000, Insurance Rules 2017, General Takaful Accounting Regulations,
2019, Insurance Accounting regulations 2017 and Takaful Rules, 2012 shall prevail.
Page - 1
 The Securities and Exchange Commission of Pakistan (SECP) vide S.R.O. 1416(I).2019 dated
November 20, 2019 has issued General Takaful Accounting Regulations, 2019. Accordingly, the
Operator has changed format for preparation and presentation of the financial statement to comply
with the requirement of the regulation. The application of these regulations for the purpose of
preparation and presentation of the financial statement are effective from January 01, 2020.

2.2 Basis of measurement

These financial statements have been prepared on the historical cost basis except for the available-
for-sale investments that have been measured at fair value.

2.3 Functional and presentation currency

These financial statements have been presented in Pak Rupees which is also the functional and
presentation currency of the Operator.

3 New Accounting Standards, Interpretations and amendments

3.1 New accounting standards, amendments and IFRS interpretations that are effective for the
year ended December 31, 2022

The following standards, amendments and interpretations are effective for the year ended
December 31, 2022. These standards, amendments and interpretations are either not relevant to
the Company's operations or do not have significant impact on the financial statements other than
certain additional disclosures.

Effective date
(annual periods
beginning on or
after)

Amendments to IFRS 3 'Business Combinations' - Reference to the conceptual January 01, 2022
framework

Amendments to IFRS 16 'Leases' - Extended practical relief regarding Covid - April 01, 2021
19 related rent consessions

Amendments to IAS 16 'Property, Plant and Equipment' - Proceeds before January 01, 2022
intended use

Amendments to IAS 37 'Provisions, Contingent Liabilities and Contingent January 01, 2022
Assets' - Onerous Contracts - Cost of fulfilling a contract

Certain annual improvements have also been made to a number of IFRSs.

Page - 2
 IFRS 9 - Financial Instruments and Amendment to IFRS 4 'Insurance Contracts- Applying
IFRS 9 with IFRS 4'

IFRS 9 'Financial Instruments' was issued on July 24, 2017. This standard is adopted locally by
the Securities and Exchange Commission of Pakistan through its S.R.O. 229 (I)/2019 and is
effective for accounting period / year ending on or after June 30, 2019.

a) IFRS 9 ‘Financial Instruments’ and amendment (effective for period ending on or after June 30,
2019). IFRS 9 replaces the existing guidance in IAS 39 Financial Instruments: Recognition and
Measurement. IFRS 9 includes revised guidance on the classification and measurement of
financial instruments, a new expected credit loss model for calculating impairment on financial
assets, and new general hedge accounting requirements. It also carries forward the guidance on
recognition and derecognition of financial instruments from IAS 39.

b) Amendments to IFRS 4 'Insurance Contracts' - Applying IFRS 9 'Financial Instruments' with IFRS
4 addresses issue arising from the different effective dates of IFRS 9 and the forthcoming new
standard IFRS 17 'Insurance Contracts'. The amendments introduce two alternative options for
entities issuing contracts within the scope of IFRS 4, notably a temporary exemption and an
overlay approach. The temporary exemption enables eligible entities to defer the implementation
date of IFRS 9. The overlay approach allows an entity applying IFRS 9 from July 01, 2018
onwards to remove from profit or loss account the effects of some of the accounting mismatches
that may occur from applying IFRS 9 before IFRS 17 is applied.

Temporary Exemption from Application of IFRS 9

The Company has determined that it is eligible for the temporary exemption option since the
Company has not previously applied any version of IFRS 9, its activities are predominantly
connected with insurance as the percentage of the total carrying amount of its liabilities connected
with insurance relative to the total carrying amount of all its liabilities is greater than 90 percent
and the Company doesn't engage in significant activities unconnected with insurance based on
historical available information. Under the temporary exemption option, the Company can defer
the application of IFRS 9 until the application IFRS 17.

3.2 Standards, interpretations and amendments to approved accounting standards that are not
yet effective

The following standards, amendments and interpretations are only effective for accounting
periods, beginning on or after the date mentioned against each of them. These standards,
amendments and interpretations are either not relevant to the Company's operations or are not
expected to have significant impact on the Company's financial statements other than certain
additional disclosures.

Page - 3
 Effective date
(annual periods
beginning on or
after)

Amendments to IFRS 16 'Leases' - Lease liability in a sale and leaseback January 01, 2024

Amendments to IAS 1 'Presentation of Financial Statements' - Non-current January 01, 2024

liabilities with covenants

Amendments to IAS 1 'Presentation of Financial Statements' - Classification of January 01, 2024

liabilities as current or non-current

Amendments to IAS 1 'Presentation of Financial Statements' - Disclosure of January 01, 2023

Accounting Policies

Amendments to IAS 8 'Accounting Policies, Changes in Accounting Estimates January 01, 2023
and Errors' - Definition of Accounting Estimates

Amendments to IAS 12 'Income Taxes' - Deferred Tax related to Assets and January 01, 2023
Liabilities arising from a single transaction

The following new standards and interpretations have been issued by the International Accounting
Standards Board (IASB), which have not been adopted locally by the Securities and Exchange
Commission of Pakistan (SECP):

IFRS 1 First Time Adoption of International Financial Reporting Standards

IFRS 17 Insurance Contracts

The Company's expects that the adoption of the other amendments and interpretations of the
standards will not have any material impact and therefore will not affect the Company's financial
statements in the period of initial application.

4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in the preparation of these financial statements are set
out below. The policies are consistent in all the years presented in these financial statements.

4.1 Retakaful contracts

Retakaful contracts are based on the principles of Wakala. Retakaful contracts so agreed
usually inspire concept of Tabarru (to donate for benefit of others) and mutual sharing of losses
with the overall objective of eliminating the element of uncertainty.

Page - 4
A separate Participants Retakaful Fund is created in which all contribution received under general
Retakaful contribution net off any Government levies and administrative surcharge are credited.
The role of Retakaful Operator is of the management of the Participants Retakaful Fund. At the
initial stage of the setup of the Participants Retakaful Fund, the Retakaful Operator makes
payment as seed money to the Participants Retakaful Fund. The terms of the Retakaful contracts
are in accordance with the generally accepted principles and norms of insurance business suitably
modified with guidance by the Shariah Advisor of the Retakaful Operator.

Once a contract has been classified as a Retakaful contract, it remains a Retakaful contract for the
remainder of its lifetime, even if the Retakaful risk reduces significantly during this period, unless
all rights and obligations are extinguished or expired.

The Operator underwrites non-life Retakaful contracts that can be categorized into:

- Fire and property damage;

- Marine, aviation and transport;
- Motor; and
- Miscellaneous

Contracts may be concluded for a fixed term of one year, for less than one year and in some cases
for more than one year. However, most of the contracts are for twelve months duration. The
Retakaful risk involved in these contracts is similar to the contracts undertaken by the Operator as
Retakaful operator.

Fire and property damage

Fire and property damage Retakaful contracts mainly compensate the customers for damage
suffered to their property. Customers who undertake commercial activities on their premises
could also receive compensation for the loss of earnings caused by the inability to use the covered
properties in their business activities (business interruption cover).

Marine, aviation and transport

Marine, aviation and transport class of business provides coverage against loss and damage to
goods in transit by any means of conveyance, physical loss or damage to aircraft, ships, and
liabilities to third parties and passengers arising from their use.

Motor

Motor Retakaful contracts cover physical loss or damage to the vehicle and liabilities to
third parties as provided under the requirements of the Motor Vehicle Ordinance, 1965.

Miscellaneous

All other Retakaful contracts like machinery breakdown, bonds, cash in hand, cash in
transit, personal accident, public liabilities, health, crop, livestock, travel, bankers and other
financial institutions packages, product liabilities, professional indemnity, workers
compensation etc. are included under Miscellaneous Retakaful cover.
Page - 5
4.2 Retakaful surplus

Retakaful surplus attributable to the participants is calculated after charging all direct cost and
setting aside various reserves. Allocation to participants, if applicable, shall be made after
the adjustment of claims paid to them during the year.

4.3 Qard-e-Hasna

Qard-e-Hasna is provided by Operators' Fund to Participant's Retakaful Fund in case of deficit in

Participant's Retakaful Fund. Qard-e-Hasna is recognized at the amount provided to
Participant's Retakaful Fund less impairment, if any. The Operator would be allowed to recover
this Qard from the Participant Retakaful Fund over any period without charging any profit.

4.4 Taxation

Income tax expense comprises current and deferred tax. Income tax expense is recognized in the
statement of profit and loss except to the extent that it relates to items recognized directly in other
comprehensive income and below funds, in which case it is recognized in equity.

4.4.1 Current

Provision for current taxation is based on taxable income for the year determined in accordance
with the prevailing law for taxation of income. The charge for current tax is calculated using
prevailing tax rates or tax rates expected to apply to the profit for the year, if enacted. The charge
for current tax also include adjustments, where considered necessary, to provision for tax made in
previous years arising from assessments finalised during the current year for such years.

4.4.2 Deferred

Deferred tax is accounted for using the balance sheet liability method, in respect of temporary
differences arising at the balance sheet date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes.

The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to allow all
or part of the deferred tax asset to be recognised. Unrecognised deferred tax assets are reassessed
at each balance sheet date and are recognised to the extent that it has become probable that future
taxable profit will allow deferred tax asset to be recovered.

4.5 Revenue recognition

4.5.1 Contribution

For all takaful contracts, contributions including administrative surcharge under a takaful contract
are recognized as written from date of issuance to the date of attachment of risk to the policy /
cover note.
Page - 6
 Contributions income net of wakala fee is determined after taking into account the unearned
portion of contributions. The unearned portion of contribution income is recognized as a liability
in Participant's Retakaful Fund.

Re-takaful ceded is recognized as expense after taking into account the proportion of deferred re-
takaful contribution expense which is calculated using twenty fourths method. The deferred
portion of re-takaful contribution expense is recognized as a prepayment.

4.5.2 Rebate From Retrotakaful Operator

Rebate and other forms of revenue (apart from recoveries) from re-takaful operators are deferred
and recognized as liability and recognized in the profit and loss account as revenue of
Participants' Retakaful Fund in accordance with the pattern of recognition of the re-takaful
contributions.

4.5.3 Investment income

Profit on bank deposits is recognized on a time proportion basis taking into account the effective
yield.

Dividend income is recognized when the Operations' right to receive the payment is established.

Gain / loss on sale of investments is recognized at the time of sale.

4.5.4 Receivables and payables related to Retakaful contracts

Receivables including contribution due but unpaid, relating to retakaful contracts are recognized
when due. The claim/ benefits payable is recorded when intimation is received. These are
recognized at cost, which is the fair value of the consideration given or receeived less provision
for impairment losses, if any. Contribution received in advance is recognized as liability till the
time of issuance of retakaful contract there against.

4.6 Cash and cash equivalents

Cash and cash equivalents comprise of cash in deposit accounts with banks (current and savings).

4.7 Provisions

A provision is recognized when the Operator has a legal or constructive obligation as a result of
past event and it is probable that an outflow of economic benefits will be required to settle the
obligations and a reliable estimate can be made of the amount of the obligation.

4.8 Creditors, accruals and provisions

Liabilities for creditors and other amounts payable are carried at cost which is the fair value of the
consideration to be paid in the future for the goods and or services received, whether or not billed
to the Operator.
Page - 7
 Provisions are recognized when the Operator has a legal or constructive obligation as a result of a
past event and it is probable that outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of obligation.
However, the provisions are reviewed at financial statement date and adjusted to reflect current
best estimates.

4.9 Wakala fee

Wakala fee is recognized in the Profit and loss account. Wakala Fee is taken 20% of Contribution
earned from all business categories. This is recognized as an expense of Participant Retakaful
Fund and income of Operator Fund.

4.9.1 Provision for unearned wakala fee

The Operator manages the general takaful operations for the participants and charges wakala fee
to Participants' Retakaful Fund on gross contributions recognized for each class. Unearned portion
of wakala fee is determined on the basis of unearned portion of contribution received.

4.10 Commission

Commission and other acquisition costs incurred in obtaining and recording on direct, facultative
and retrotakaful cessions has been deferred and recognized as assets and liability as under:

4.10.1 Commission income

Commission income is being taken to profit and loss account on a time proportion basis in
accordance with the pattern of recognition of retrotakaful Contribution to comply with the
requirements of Insurance Rules, 2017. issued by SECP vide its S.R.O. 89(1) / 2017 dated
February 09, 2017.

4.10.2 Deferred commission expense

Commission expenses are deferred and recognized as an asset in correlation with unearned
Contribution that will be recognized in the subsequent reporting period to comply with the
requirements of Insurance Rules, 2017; issued by SECP vide its S.R.O. 89(1) / 2017 dated
February 09, 2017.

4.11 Statutory fund

Total amount of Rs. 300 million is deposited as statutory fund to comply with provisions of
paragraph 4 of circular no. 8 of 2014 read with section 11(1)(c) of Takaful Rules, 2012 issued by
SECP, which states that 'every insurer who is interested to commence Window Takaful business
shall transfer an amount of not less than Rs. 50 million to be deposited in the separate bank
account for Window Takaful business duly maintained in a scheduled bank.

Page - 8
4.12 Contribution

Contribution written under a policy is recognized as income over the period of insurance from the
date of issuance of the policy to which it relates to its expiry. Where the pattern of incidence of
risk varies over the period of the policy, Contribution is recognized as revenue in accordance with
the pattern of the incidence of risk.

4.12.1 Provision for unearned contribution

The portion of Contribution written relating to the unexpired period of coverage is recognized as
unearned Contribution by the Company. The unearned portion of Contribution income is
recognized as a liability. For Treaty business, the liability is calculated by applying 1/8 method
and for Facultative Business over the period of insurance from the date of issuance of the policy
to which it relates to its expiry.

4.13 Retro-takaful ceded

The Company enters into retrotakaful contracts in the normal course of business in order to limit
the potential for losses arising from certain exposures. Outward retrotakaful Contributions are
accounted for in the same period as the related Contributions for the accepted retrotakaful
business being retakaful.

Retrotakaful liabilities represent balances due to retrotakaful companies. Amount payable are
estimated in a manner consistent with the related retrotakaful contract. Retrotakaful assets
represent balance due from retrotakaful companies. Amount recoverable from reinsurers are
estimated in a manner consistent with the provision for outstanding claims or settled claims
associated with the retrotakaful policies and are in accordance with the related insurance contract.

Retrotakaful assets are not offset against related insurance liabilities. Income for expenses from
retrotakaful contracts are not offset against expenses or income from related insurance assets.
Retrotakaful assets or liabilities are derecognized when the contractual rights are extinguished or
expired.

The Company assesses its retrotakaful assets for impairment on balance sheet date. If there is an
objective evidence that the retrotakaful asset is impaired; the Company reduces the carrying
amount of the retrotakaful asset to its recoverable amount and recognizes that impairment loss in
the profit and loss account.

4.14 Provision for outstanding claims including Incurred But Not Reported (IBNR)

A liability for outstanding claims is recognized in respect of all claims incurred up to the financial
statement date which is measured at the undiscounted value of expected future payments.
Provision for outstanding claims include amounts in relation to claims reported but not settled,
claims incurred but not reported (IBNR) and expected claims settlement costs.

Retakaful recoveries against outstanding claims are recognized as an asset and measured at the
amount expected to be received.
Page - 9
4.15 Retro - takaful recoveries against outstanding claims

Claims recoveries receivable from the reinsurer are recognized as an asset at the same time as the
claims which give rise to the right of recovery are recognized as a liability and are measured at the
amount expected to be received.

4.16 Off setting of financial assets and financial liabilities

A financial asset and a financial liability is offset and the net amount is reported in the balance
sheet if the Company has a legally enforceable right to set-off the recognized amounts and intends
either to settle on a net basis or to realize the asset and settle the liability simultaneously.

4.17 Segment reporting

For management purposes, the Company is organized into six departments which deal with
specific type of insurance policies. These departments are business segments for financial
reporting purposes. Moreover, there are 'treaty arrangement' under each department and is treated
as a separate segment. Thus the Company has seven segment - fire, marine cargo, marine hull,
accident and others, aviation, engineering and treaty.

These segments are the basis on which the Company report its primary segment information.
Other operations of the Company comprises investment in securities and in properties. The
Company operates in Pakistan only. There are no transactions between segments.

Assets, liabilities and capital expenditures that are directly attributable to segments have been
assigned to them. Those assets and liabilities which cannot be allocated to a particular segment on
a reasonable basis are reported as unallocated corporate assets and liabilities.

4.18 Investments

4.18.1 Classification and recognition

All investments are initially recognized at cost, being the fair value of the consideration given and
include transaction costs, except for investment held for trading in which case transaction costs
are charged to profit and loss account.

These are recognized and classified as follows:

- Held for trading,
- Held to maturity, and
- Available-for-sale.

The classification depends on the purpose for which the financial assets were acquired.

Page - 10
4.18.2 Measurement

(a) Held for trading

Investments which are designated as held for trading upon initial recognition.

After initial recognition, the above investments are remeasured at fair value determined with
reference to the rates prevailing in the stock exchange, where applicable. Gains or losses on
remeasurement of these investments are recognized in profit or loss account.

(b) Held to maturity

Investments with fixed maturity and fixed income investments, where management has both the
intent and the ability to hold to maturity, are classified as held-to-maturity. After initial
recognition, these are carried at amortized cost less provision for impairment, if any. Amortized
cost is calculated by taking into account any discount or premium on acquisition using effective
yield method.

(c) Available-for-sale

Available-for-sale financial assets are those non-derivative financial assets that are designated as
available-for-sale or are not classified as (a) loans and receivables (b) held-to-maturity
investments or (c) financial assets held for trading.

Equity securities held by the Operator that are traded in an active market are classified as
Available for Sale and are stated at fair value at the end of each reporting period. Dividend on
AFS equity investments are recognized in profit and loss account. Other changes in the carrying
amount of AFS financial assets are recognized in other comprehensive income and accumulated
under the heading of capital reserve. When the investments is disposed of or is determined to be
impaired, the cumulative gain or loss previously recognized in comprehensive income is
reclassified to profit and loss account.

4.18.3 Impairment of financial assets

Financial assets are assessed for indicators of impairment at the end of each reporting period.
Financial assets are considered to be impaired when there is objective evidence that, as a result of
one or more events that occurred after the initial recognition of the financial asset, the estimated
future cash flows of the investment have been affected.

For Available-for-Sale equity investments, a significant or prolonged decline in the fair value of
the security below its cost is considered to be objective evidence of impairment.

Page - 11
4.19 Impairment of non financial assets

The carrying amount of assets are reviewed at each reporting date to determine whether there is
any indication of impairment of any asset or group of assets. If such indication exists, the
recoverable amount of the asset is estimated. An impairment loss is recognized whenever the
carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher
of an asset's fair value less cost to sell and value in use. Impairment losses are recognized in profit
and loss account.

4.20 Management expenses

Management expenses directly attributable to Window Retakaful Operations are charged to

Operator's Retakaful Fund on an accrual basis.

4.21 Modarib’s fee

The Operator also manages the participants' investment as Mudarib and charges 25 % of the
investment income and profit on bank deposits earned by the Participant's Retakaful Fund as
Mudarib's fee. It is recognized on the same basis on which related revenue is recognized.

4.22 Benefits

Benefits are charged to Participant's Retakaful Fund as incurred based on estimated liability for
compensation owed under the takaful contracts. It includes claims handling costs that are directly
related to the processing and settlement of claims, a reduction for the value of salvage and other
recoveries and any adjustments to claims outstanding from previous years.

4.23 Receivables and payables related to retakaful contracts

Receivables including contribution due but unpaid relating to takaful contracts are recognized
when due. The claim payable is recorded when intimation is received. These are recognized at
cost, which is the fair value of the consideration given less provision for impairment, if any.
Contribution received in advance is recognized as liability till the time of issuance of takaful
contract there against.

If there is an objective evidence that any contribution due but unpaid is impaired, the Operations
reduces the carrying amount of that contribution receivable and recognizes the loss in profit and
loss account.

4.24 Contribution deficiency reserve

The Participant's Retakaful Fund is required to maintain a provision in respect of contribution

deficiency for the individual class of business where the unearned contribution liability is not
adequate to meet the expected future liability, after reinsurance, from claims and other
supplementary expenses expected to be incurred after the reporting date in respect of the
unexpired policies in that class of business at the reporting date. The movement in the
contribution deficiency reserve is recognized as an expense in the profit or loss account. Judgment
is used in assessing the extent to which past trends may not apply in future or the effects of one-

Page - 12
 The management considers that the unearned contribution reserve for all classes of business as at
the year end is adequate to meet the expected future liability after reinsurance, from claims and
other expenses, expected to be incurred after the reporting date in respect of policies in those
classes of business in force at the reporting date.

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

5.1 Use of estimates and judgements

In preparing these financial statements, management has made judgements, estimates and
assumptions that affect the application of the Operations' accounting policies and reported
amounts of assets, liabilities, income and expenses. Actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to estimates
are recognized prospectively.

Information about judgements made in applying accounting policies that have the most significant
effects on the amount recognized in the financial statements and assumptions and estimation
uncertainties that have a significant risk of resulting in a material adjustment in the subsequent
years are included in following notes:

Note
a) classification of investments; 4.18.1
b) impairment of available for sale investments ; 4.18.3
c) taxation; 4.4
d) provision for unearned wakala fee; 4.9.1
e) deferred commission expense; 4.10.2
f) provision for outstanding claims including IBNR; 4.14
g) provision for unearned contribution; 4.12.1
h) allocation of management expenses; and 4.20
i) contribution deficiency reserves. 4.24

Page - 13
6 INVESTMENTS

Available for sale - Mutual Funds `

December 31, 2022

Operator's Fund Participant Retakaful Fund
Total cost of Unrealized gain Total cost of Unrealized gain
Market value Market value
investment / (loss) investment / (loss)
-------------------------Rupees-------------------------
Al Hamra Islamic income fund 3,902,248 4,080,742 178,494 19,181,651 19,997,856 816,205
Al-Ameen Islamic Sovereign Fund -Class-C 2,059,555 2,148,748 89,193 3,634,508 3,791,908 157,400
Al-Ameen Islamic Cash Fund 1,775,645 1,861,940 86,295 15,354,648 16,084,032 729,384
NBP Islamic Mahana Amdani Fund (Formerly: NBP Aitemaad Mahana
3,879,668 4,064,275 184,607 19,071,306 19,917,206 845,900
Amdani Fund)
Abl Islamic Income Fund 3,871,926 3,961,649 89,723 19,034,770 19,410,741 375,971
Meezan Rozana Amdani Fund - Growth-b 4,078,699 4,078,704 5 19,991,568 19,991,557 (11)
19,567,741 20,196,058 628,317 96,268,451 99,193,301 2,924,850

December 31, 2021

Operator's Fund Participant Retakaful Fund
Total cost of Unrealized gain Total cost of Unrealized gain
Market value Market value
investment / (loss) investment / (loss)

Al Hamra Islamic income fund 3,456,674 3,688,243 231,569 16,998,094 18,074,395 1,076,301
Al-Ameen Islamic Sovereign Fund -Class-C 1,844,638 1,975,524 130,886 3,255,244 3,486,219 230,975
Al-Ameen Islamic Cash Fund 1,564,970 1,668,320 103,350 13,534,827 14,411,467 876,640
NBP Islamic Mahana Amdani Fund (Formerly: NBP Aitemaad Mahana
3,432,992 3,672,321 239,329 16,882,345 17,996,414 1,114,069
Amdani Fund)
Abl Islamic Income Fund 3,461,354 3,639,723 178,369 17,023,108 17,833,413 810,305
Meezan Rozana Amdani Fund - Growth-b 3,446,297 3,663,665 217,368 16,891,834 17,957,267 1,065,433
17,206,925 18,307,796 1,100,871 84,585,452 89,759,175 5,173,723

Operator's Retakaful Fund Participant's Retakaful Fund

December 31, December 31, December 31, December 31,
2022 2021 2022 2021
--------------------Rupees----------------------
7 OTHER RECEIVABLES

Loan to employee 160,000 100,000 - -

Accrued markup on bank deposits 3,924,045 2,765,576 10,631,103 1,231,247
4,084,045 2,865,576 10,631,103 1,231,247

Participant's Retakaful Fund

December 31, December 31,
2022 2021
Note -----------------------------Rupees-----------------------------
8 TAKAFUL/ RETAKAFUL RECEIVABLES

Due from takaful participants holders

Treaty retakaful 361,612,636 238,236,899
Facultative retakaful 154,844,846 96,225,467
516,457,482 334,462,366
Less: provision for doubtful debts 8.1 (12,821,537) (4,048,412)
503,635,945 330,413,954
8.1 Movement of provision for doubtful debts

Opening balance 4,048,412 6,898,427

Provisions made during the period 8,773,125 (2,850,015)
Closing balance 12,821,537 4,048,412

Page - 14
 Operator's Retakaful Fund Participant's Retakaful Fund
December 31, December 31, December 31, December 31,
2022 2021 2022 2021
Note -----------------------------Rupees-----------------------------
9 RECEIVABLE/ PAYABLE (Current
account between OPF and PTF)

Amount (payable) to /
receivable from Participant's
Retakaful Fund 9.1 (39,419,289) (2,127,468) 39,419,289 2,127,468
Wakala fee 9.2 241,037,755 179,463,592 (241,037,755) (179,463,592)
Modarib's share of participant's
retakaful fund investment
income and bank profit 9.3 20,306,173 3,660,141 (20,306,173) (3,660,141)
Commission payable (236,607,884) (184,305,739) 236,607,884 184,305,739
(14,683,246) (3,309,474) 14,683,246 3,309,474

9.1 The amount is payable by the Operator to Participant's Retakaful Fund related to contribution
received by the Operator from takaful participants.

9.2 It represents the amount receivable from Participant's Retakaful Fund related to wakala fee
charged at 20% (2021: 23%) of gross contribution written amounted to Rs. 241,037,754 (2021:
Rs. 186,629,843 ).

9.3 It represents Mudarib fee receivable against managing the investments and funds of participants at
the rate 25% of all investment income and profit on bank deposits.

Operator's Retakaful Fund Participant's Retakaful Fund

December 31, December 31, December 31, December 31,
2022 2021 2022 2021
-----------------------------Rupees-----------------------------

10 QARD-E-HASNA Note

Balance at the beginning of the year 244,254,221 - (244,254,221) -

Qard-e-hasna transferred from OPF during the
year 300,000,000 244,254,221 (300,000,000) (244,254,221)
Qard-e-hasna returned by PTF during the year (244,254,221) - 244,254,221 -
Impairment adjustment - - - -
Balance at the end of the year 300,000,000 244,254,221 (300,000,000) (244,254,221)

Participant's Retakaful Fund

December 31, December 31,
2022 2021
-----------------------------Rupees-----------------------------
11 RETAKAFUL RECOVERIES AGAINST
OUTSTANDING CLAIMS

Balance at beginning of the year 29,382,727 -

Charge for the year 229,352,620 29,382,727
Received during the year (27,954,638) -
Balance at the end of the year 230,780,709 29,382,727

Page - 15
 Operator's Retakaful Fund Participant's Retakaful Fund
December 31, December 31, December 31, December 31,
2022 2021 2022 2021
-----------------------------Rupees-----------------------------
12 DFERRED / UNEARNED
WAKALA FEE
Facultative business 12.1 6,458,554 5,461,817 6,458,554 5,461,817
Treaty 96,656,439 72,471,633 96,656,439 72,471,633
103,114,993 77,933,450 103,114,993 77,933,450
12.1 Facultative business

Fire 5,175,445 4,579,804 5,175,445 4,579,804

Marine cargo 6,816 1,452 6,816 1,452
Marine Hull 29,644 12,547 29,644 12,547
Accident 561,555 559,787 561,555 559,787
Engineering 685,094 308,227 685,094 308,227
6,458,554 5,461,817 6,458,554 5,461,817

13 DEFERRED
COMMISSION EXPENSE

Facultative business 13.1 2,437,160 2,633,700

Treaty 101,358,552 78,025,535
103,795,712 80,659,235
13.1 Facultative business

Fire 2,097,475 2,335,311

Marine Cargo 3,141 7,065
Marine Hull 11,117
Accident 137,899 137,996
Engineering 187,528 153,328
2,437,160 2,633,700
14 PREPAYMENTS

Treaty business
Prepaid retakaful contribution ceded - - 87,351,654 76,368,847

15 BANK BALANCES

Cash at bank in:

Saving accounts 15.1 111,537,025 110,526,812 1,110,117,788 598,618,743

15.1 Markup on profit and loss sharing account ranging from 14% to 16% (December 31 2021: 9% to10 %) per annum.

16 STATUATORY FUND

Total amount of Rs. 300 million is deposited by the Operator as statutory fund to comply with the
provisions of paragraph 4 of circular no. 8 of 2014 read with section 11(1)(c) of Takaful Rules,
2012 issued by SECP, which states that 'every insurer who is interested to commence Window
Takaful business shall transfer an amount of not less than Rs. 50 million to be deposited in a
separate bank account for Window Takaful business duly maintained in a scheduled bank.

Page - 16
 Operator's Retakaful Fund Participant's Retakaful Fund
December 31, December 31, December 31, December 31,
2022 2021 2022 2021
-----------------------------Rupees-----------------------------
17 RESERVES

Revenue Reserves
Unappropriated profit 86,103,004 55,732,353 439,468,051 93,843,816
Capital Reserves
Unrealized gain on available for
sale investment 802,038 217,305 5,616,119 3,304,137
86,905,042 55,949,658 445,084,170 97,147,953
18 SEED MONEY

It represent the initial amount deposited by the Operator of Rs. 1,000,000 in Waqf fund to create a
Participant's Retakaful Fund.

Participant's Retakaful Fund

December 31, December 31,
2022 2021
19 OUTSTANDING CLAIMS -----------------------------Rupees-----------------------------
Note
INCLUDING IBNR

Facultative business 19.1 96,848,533 75,979,626

Treaty 625,016,671 238,169,749
19.2 721,865,204 314,149,375
19.1 Facultative business

Fire 83,479,953 62,102,577

Marine cargo 80,537 136,745
Marine hull 65,359 -
Accident 3,721,474 4,902,131
Engineering 9,501,210 8,838,173
96,848,533 75,979,626

19.2 The Securities and Exchange Commission of Pakistan (SECP) issued guidelines for estimation of
Incurred but Not Reported (IBNR) claim reserves for non-life insurer companies through Circular
No. 9 of 2016 dated March 09, 2016. The guidelines prescribe the standard method for estimation
of IBNR claim reserves so as to bring industry wide-uniformity in respect of such estimation and
to ensure adequacy of IBNR claims reserve. All non-life insurance companies are required to
comply with these guidelines with effect from July 01, 2016.

However, on May 30, 2017, SECP issued separate guidelines for the Operator for estimation of
Incurred but Not Reported (IBNR) claim through letter No. ID/PRDD/IBNR/2017/9695 which
prescribe that, for the purposes of ascertaining IBNR claim reserves by the Operator, guidance is
hereby extended, that the Company shall collect the data of IBNR claim reserves from the cedants
(non-life insurers) and in accordance with its share in the reinsurance program (both on treaty and
facultative basis) of the cedant(s) and it shall record its IBNR claim reserves.

Page - 17
 On the basis of above SECP specified guidelines, the Company wrote letter to each ceding
Company to share data of IBNR Claims Reserves in accordance with its share in the reinsurance
program both for facultative and treaty business. However, none of the ceding companies shared
their IBNR Claim Reserves. The Operator recorded Facultative and Treaty IBNR claim reserves
on basis of actuarial valuation dated March 26, 2023 which amounts to Rs. 11.036 million and Rs.
Nil respectively.

Participant's Retakaful Fund

December 31, December 31,
2022 2021
-----------------------------Rupees-----------------------------
Note
20 UNEARNED CONTRIBUTION RESERVES

Facultative business 20.1 32,292,770 27,309,083

Treaty 483,282,193 362,358,163
515,574,963 389,667,246
20.1 Facultative business

Fire 25,877,225 22,899,021

Marine cargo 34,081 7,259
Marine hull 148,222 62,734
Accident 2,807,774 2,798,933
Engineering 3,425,468 1,541,136
32,292,770 27,309,083
20.2 Treaty

Proportional 436,019,476 317,065,833

Non-proportional 47,262,717 45,292,330
483,282,193 362,358,163
21 CONTRIBUTION DEFICIENCY RESERVES
.
Fire - -
Marine cargo - -
Proportional treaty - -
Non proportional treaty - 42,862,640
21.1 - 42,862,640
21.1 Movement of contribution deficiency reserve

Balance at beginning of the year 42,862,640 19,010,777

Charge for the year - 30,417,426
Reversal during the year (42,862,640) (6,565,563)
Charge of contribution deficiency reserve -net (42,862,640) 23,851,863
Balance at end of the year - 42,862,640

Page - 18
 Participant's Retakaful Fund
December 31, December 31,
2022 2021
-----------------------------Rupees-----------------------------
Note
22 TAKAFUL/ RETAKAFUL PAYABLES

Retakaful contribution payable 175,952,712 117,935,182

Operator's Retakaful Fund Participant's Retakaful Fund

December 31, December 31, December 31, December 31,
2022 2021 2022 2021
23 TAXATION- -----------------------------Rupees-----------------------------
LESS PAYMENT
Balance at beginning of the period/year (13,404,751) (8,960,899)
Income tax deducted at source
on dividend income 246,937 162,387 1,193,917 805,210
Income tax deducted at source
on bank profit 4,947,705 1,913,594 9,566,411 1,222,548
Payment of income tax 5,194,642 2,075,981 10,760,328 2,027,758
Provision for current tax (12,404,914) (6,519,833) (10,760,328) (2,027,758)
Balance at end of the period/year (20,615,023) (13,404,751) - -

24 DEFERRED TAX ASSET / (LIABILITY)

Opening balance 319,252 69,101

Deductible temporary differences on
Unrealized loss on available
for sale investments
Taxable temporary differences
Unrealized gain on
available for sale
investments 137,040 250,151
182,212 319,252
25 OTHER CREDITORS AND
ACCRUALS

Officers association payable 20,800 3,000 - -

Employee income tax payable 363,464 46,409 - -
PRCL employees professional tax payable 2,000 1,000 -
Sindh sales tax payable 11,990 6,600 3,960 -
Income tax deducted at source - 156,000 26,730 -
Audit fee payable 975,800 861,000 - -
Miscellaneous creditors 1,063,606 169,032 1,000 1,000
2,437,660 1,243,041 31,690 1,000
26 PAYABLE TO
RELATED PARTY

Pakistan Reinsurance
Company Limited 26.1 11,674,667 4,454,014 - -

26.1 Payable in respect of

Income tax 1,884,393 2,484,399 - -
Salaries 9,028,001 1,835,110 - -
Bonus 762,271 134,505 - -
11,674,665 4,454,014 - -
Page - 19
27 CONTINGENCIES AND COMMITMENTS

27.1 The Operator was served with a notice by Sindh Revenue Board (SRB) in 2016 for non filing of
sales tax returns and raised sales tax liability via same notice on conventional reinsurance services
provided by the Operator. Company has contested the notice and the case is pending with the
Honorable High Court of Sindh. In case of unfavorable outcome of the said matter, the charge to
profit or loss would to Rs. 156.6 million pertaining to the 2022 (2021: Rs. 121.3 millions) on
retakaful operations excluding any additional penalty or default surcharge.

27.2 There are no commitments as at December 31, 2022 (December 31 2021: Nil).

Participant's Retakaful Fund

December 31, December 31,
2022 2021
Note -----------------------------Rupees-----------------------------
28 NET CONTRIBUTION REVENUE

Written gross contribution 1,205,188,773 933,149,216

Add: unearned contribution reserve opening 389,667,246 238,875,048
Less: unearned contribution reserve closing (515,574,963) (389,667,246)
Contribution earned 1,079,281,056 782,357,018
Retakaful contribution ceded 111,138,241 92,463,282
Add: prepaid retakaful contribution opening 76,368,847 75,847,698
Less: prepaid retakaful contribution closing (87,351,654) (76,368,847)
Retakaful expense (100,155,434) (91,942,133)
979,125,622 690,414,885
29 WAKALA FEE

Gross wakala fee 241,037,755 186,629,843

Add: unearned wakala fee opening 77,933,449 47,775,010
Less: unearned wakala fee closing (103,114,993) (77,933,449)
215,856,211 156,471,404

29.1 This represents expense for Participants Retakaful Fund and revenue for Operator's Retakaful
Fund. The Operator manages the Window Retakaful Operations for the particpants and charges
20% of the gross contribution written as wakala fee against the services.

30 NET CLAIMS - REPORTED / SETTLED INCLUDING IBNR

Benefits/ claims paid 323,529,673 325,612,745

Less: outstanding benefits/ claims including IBNR - opening (314,149,375) (299,136,344)
Add: outstanding benefits / claims including IBNR - closing 721,865,204 314,149,376
Claims expense 731,245,502 340,625,777
Retakaful and other recoveries received 27,954,638 -
Add: retakaful and other recoveries received- opening (29,382,727)
Less: retakaful and other recoveries received- closing 230,780,709 29,382,727
Retakaful and other recoveries revenue (229,352,620) (29,382,727)
Net claims expenses 501,892,882 311,243,050

Page - 20
30.1 Claim development table

The Company maintains adequate reserves in respect of its retakaful business in order to protect
against adverse future claims experience and developments. The uncertainties about the amount
and timing of claim payments are normally resolved within one year. The following table shows
the development of the claims over a period of time. All amounts are presented in gross numbers
before retakaful.
2022 Including
2018 2019 2020 2021 Total
Accident year IBNR

Estimate of ultimate claims cost

-At the end of accident year - 403,231,634 -
-One year later - 198,126,289 -
-Two years later - 85,600,480 -
-Three years later - 34,906,801 -
-Four years later - -
Current estimate of cumulative claims - 37,278,647 98,699,171 250,755,730 658,661,329 1,045,394,877
- 2,371,846 13,098,691
Cumulative payments to date 52,629,441 255,429,695 323,529,673
Liability recognized in the statement of financial position - 34,906,801 85,600,480 198,126,289 403,231,634 721,865,204

Operator's Retakaful Fund Participant's Retakaful Fund

December 31, December 31, December 31, December 31,
2022 2021 2022 2021
Note -----------------------------Rupees-----------------------------
31 INVESTMENT INCOME

Income from equity securities- available for sale

Dividend income 1,687,509 920,194 8,316,060 4,560,461

32 OTHER INCOME

Profit on bank deposits 34,143,170 14,518,979 72,908,632 10,080,104

33 MODARIB'S FEE

Investment income earned 8,316,060 4,560,461 (8,316,060) (4,560,461)

Profit on bank deposits 72,908,632 10,080,104 (72,908,632) (10,080,104)
Mudarib' share of income 20,306,173 3,660,141 (20,306,173) (3,660,141)

33.1 The Operator of the Window Retakaful manage the participant's investments as a Modarib and
charge 25% of Modarib's share of the investment income earned and profit on bank deposits by
the Participant's Retakaful Fund.
34 TAXATION

Current tax 12,404,914 6,519,833 10,760,328 2,027,758

12,404,914 6,519,833 10,760,328 2,027,758

34.1 Relationship between tax

expense and accounting profit
Profit before tax 42,775,565 22,482,182 - -
Tax at the applicable rate of 29%
(2021: 29%) 12,404,914 6,519,833 - -
Tax effect of income that are
deductible in determining the
taxable profit - - 10,760,328 2,027,758
Charge for the year 12,404,914 6,519,833 10,760,328 2,027,758

Page - 21
 Operator's Retakaful Fund Participant's Retakaful Fund
December 31, December 31, December 31, December 31,
2022 2021 2022 2021
-----------------------------Rupees-----------------------------

Applicable tax rate 29% 29%

Tax effects of amount that are:
Permanent difference 0% 0%
Effective tax rate 29% 29%

Participant's Retakaful Fund

December 31, December 31,
2022 2021
Note -----------------------------Rupees-----------------------------
35 COMMISSION EXPENSE

Commission paid or payable 236,607,884 184,305,739

Add: deferred commission expense opening 80,659,235 41,504,923
Less: deferred commission expense closing (103,795,712) (80,659,235)
213,471,407 145,151,427

36 GENERAL, ADMINISTRATIVE AND MANAGEMENT EXPENSES

Salaries, allowance and other benefits 13,506,827 5,319,329

Shariah advisor fee 1,573,605 1,990,645
Auditor's remuneration 36.1 590,000 590,000
Others 75,659 37,135
15,746,091 7,937,109
36.1 Auditor's remuneration

Half yearly review 108,000 108,000

Annual audit fee 162,000 162,000
Shariah audit fee 135,000 135,000
Regulatory returns 135,000 135,000
Out of pocket expense 50,000 50,000
590,000 590,000

37 NUMBER OF EMPLOYEES 2022 2021

Number of employees at the year end 2 3

Average number of employees during the year 2 3

Page - 22
38 SEGMENT REPORTING

PARTICIPANT'S RETAKAFUL FUND

For the year ended December 31, 2022
Fire and Non
Proportional
property Marine Accident Proportional TOTAL
Treaty
damage Treaty
--------------------------Rupees--------------------------

Gross written contribution 106,944,159 1,571,272 10,238,415 987,304,172 99,130,755 1,205,188,773

Unearned contribution-opening 24,440,157 69,993 2,798,933 317,065,833 45,292,330 389,667,246
Unearned contribution-closing (29,302,693) (182,303) (2,807,774) (436,019,476) (47,262,717) (515,574,963)
Contribution earned 102,081,623 1,458,962 10,229,574 868,350,529 97,160,368 1,079,281,056
Retakaful-Ceded - - - - 111,138,241 111,138,241
Prepaid retakaful-opening - - - - 76,368,847 76,368,847
Prepaid retakaful-closing - - - - (87,351,654) (87,351,654)
Retakaful expenses - - - - 100,155,434 100,155,434
Net contribution 102,081,623 1,458,962 10,229,574 868,350,529 (2,995,066) 979,125,622
Rebate - - - - - -
Net underwriting income (A) 102,081,623 1,458,962 10,229,574 868,350,529 (2,995,066) 979,125,622
Benefits paid 10,780,549 - 1,281,845 265,630,453 45,836,826 323,529,673
Outstanding benefits/claims-opening (70,940,750) (136,745) (4,902,131) (204,908,354) (33,261,396) (314,149,376)
Outstanding benefits/claims-closing 92,981,163 145,896 3,721,474 563,892,991 61,123,680 721,865,204
Claims expenses 32,820,962 9,151 101,188 624,615,090 73,699,110 - 731,245,501
Retakaful recoveries received - - - - 27,954,638 27,954,638
Retakaful recoveries against outstanding claims-opening - - - - (29,382,727) (29,382,727)
Retakaful recoveries against outstanding claims-closing - - - - 230,780,709 230,780,709
Retakaful recoveries revenue - - - 229,352,620 229,352,620
Net benefit expenses 32,820,962 9,151 101,188 624,615,090 (155,653,510) 501,892,881
Wakala fee 20,416,325 291,792 2,045,915 173,670,106 19,432,074 215,856,211
Contribution deficiency expense - - - - - -
Net benefits and expenses (B) 53,237,287 300,943 2,147,103 798,285,196 (136,221,436) 717,749,092
Underwriting results (C=A-B) 48,844,336 1,158,019 8,082,471 70,065,334 133,226,370 261,376,530
Profit on bank deposits 72,908,632
Modarib share of PTF investment income and bank profit (20,306,173)
Dividend Income 8,316,060
Surplus before tax 322,295,049

Page - 23
 For the year ended December 31, 2022
Fire and Non
Proportional
property Marine Accident Proportional TOTAL
Treaty
damage Treaty
--------------------------Rupees--------------------------

Segment assets 102,081,623 1,458,962 10,229,574 868,350,529 (2,995,066) 979,125,622

Unallocated assets 1,180,383,116
Total assets 2,159,508,739

Segment liabilities 53,237,287 300,943 2,147,103 798,285,196 (136,221,436) 717,749,092

Unallocated liabilities 695,675,477
Total liabilities 1,413,424,569

OPERATOR'S RETAKAFUL FUND

Wakala fee 20,416,325 291,792 2,045,915 173,670,106 19,432,074 215,856,211
Commission (10,387,829) (135,075) 507,477 (10,015,427)
Management expenses (1,426,260) (20,384) (142,925) (1,589,569)
Segment results 8,602,236 136,333 2,410,467 173,670,106 19,432,074 204,251,215
Profit on bank deposits 34,143,170
Dividend income 1,687,509
Modarib share of PTF investment income and bank profit 20,306,173

Profit before tax 260,388,067

Segment assets -
Unallocated assets 539,612,841
Total assets 539,612,841

Segment Liabilities -
Unallocated Liabilities 152,707,799
Total liabilities 152,707,799

Page - 24
PARTICIPANT'S RETAKAFUL FUND
For the year ended December 31, 2021
Fire and Non
Proportional
property Marine Accident Proportional TOTAL
Treaty
damage Treaty
--------------------------Rupees--------------------------

Gross written contribution 84,381,052 4,668,346 9,643,683 735,827,222 98,628,913 933,149,216

Unearned contribution-opening 13,048,134 64,808 4,923,375 203,901,756 16,936,975 238,875,048
Unearned contribution-closing (24,440,157) (69,993) (2,798,933) (317,065,833) (45,292,330) (389,667,246)
Contribution Earned 72,989,029 4,663,161 11,768,125 622,663,145 70,273,558 782,357,018
Retakaful-ceded - - - - 92,463,282 92,463,282
Prepaid Retakaful-opening - - - - 75,847,698 75,847,698
Prepaid Retakaful-closing - - - - (76,368,847) (76,368,847)
Retakaful Expenses - - - - 91,942,133 91,942,133
Net contribution 72,989,029 4,663,161 11,768,125 622,663,145 (21,668,575) 690,414,885
Net underwriting income (A) 72,989,029 4,663,161 11,768,125 622,663,145 (21,668,575) 690,414,885
Benefits/claims paid 5,638,342 - 718,969 270,072,601 49,182,833 325,612,745
Outstanding benefits/claims-opening (71,548,846) - (3,352,686) (173,075,210) (51,159,602) (299,136,344)
Outstanding benefits/claims-closing 70,940,750 - 5,038,876 204,908,354 33,261,396 314,149,376
Claims expenses 5,030,246 - 2,405,159 301,905,745 31,284,627 - 340,625,777

Retakaful recoveries received - - - - - -

Retakaful recoveries against outstanding claims-opening - - - - - -
Retakaful recoveries against outstanding claims-closing - - - - 29,382,727 29,382,727
Benefits recovered from retro takaful - - - - 29,382,727 - 29,382,727
Net benefit expenses 5,030,246 - 2,405,159 301,905,745 1,901,900 311,243,050
Wakala Fee 14,597,806 932,632 2,353,625 124,532,629 14,054,712 156,471,404
Contribution deficiency expense - - - - 23,851,863 23,851,863
Net benefits and expenses (B) 19,628,052 932,632 4,758,784 426,438,374 39,808,475 491,566,317
Underwriting results (C=A-B) 53,360,977 3,730,529 7,009,341 196,224,771 (61,477,050) 198,848,568
Profit on bank deposits 10,080,104
Dividend income 4,560,461
Modarib share of PTF investment income and bank profit (3,660,141)
Reversal for doubtful contributions 2,850,015
Surplus before tax 212,679,006

Page - 25
 For the year ended December 31, 2021
Fire and Non
Proportional
property Marine Accident Proportional TOTAL
Treaty
damage Treaty
--------------------------Rupees--------------------------

Segment assets 72,989,029 4,663,161 11,768,125 622,663,145 (21,668,575) 690,414,885

Unallocated assets 516,602,732
1,207,017,617

Segment liabilities 19,628,052 932,632 4,758,784 426,438,374 39,808,475 491,566,317

Unallocated liabilities 373,049,126
864,615,443
OPERATOR'S RETAKAFUL FUND
Wakala Fee 14,597,806 932,632 2,353,625 124,532,629 14,054,712 156,471,404
Commission (8,348,326) (576,840) (623,385) (135,602,876) - (145,151,426)
Management Expenses (839,092) (53,608) (135,288) (7,158,226) 249,105 (7,937,109)
Segment Results 5,410,388 302,184 1,594,952 (18,228,473) 14,303,817 3,382,868
Profit on bank deposits 14,518,979
Modarib share of PTF investment income and bank profit 3,660,141
Dividend Income 920,194
Profit before tax 22,482,182

Segment Assets 2,488,639 7,065 137,996 78,025,535 - 80,659,235

Unallocated Assets 375,954,405
456,613,640

Segment Liabilities 4,888,031 13,999 559,787 63,413,167 9,058,466 77,933,449

Unallocated Liabilities 22,730,532
100,663,981

Page - 26
 2022
Operator's Participant's
Retakaful Retakaful
Fund Fund
Available for sale
-------------------------------Rupees-------------------------------

39 MOVEMENT IN INVESTMENTS

At beginning of previous year 17,251,711 84,586,557

Additions 1,007,959 3,755,693
Fair value (loss) / gain - net 48,126 1,416,925
At beginning of current year 18,307,796 89,759,175
Additions 1,303,529 7,122,145
Fair value gain - net 584,733 2,311,982
At end of current year 20,196,058 99,193,302

40 MANAGEMENT OF RETAKAFUL AND FINANCIAL RISK

The risks involved with financial instruments and the Operator's approach to managing such
risks are as follow:

40.1 Retakaful risk

The risk under a Retakaful contract is the possibility that the covered event occurs and the
uncertainty of the amount of the resulting benefits. By the very nature of a Retakaful contract, it
is random and therefore unpredictable. The principal risk faced under such contact is that, the
occurrence of the covered events and the severity of reported benefits. The Operator's risk
profile is improved by diversification of these risk of losses to a large portfolio of contracts as a
diversified portfolio is less likely to be affected by an unexpected event in single subject.

The Operator principally issues the general Retakaful cover. Risks under these policies usually
cover a twelve month duration.

Underwriting limits and retention policies and procedures precisely regulate who is authorized
and accountable for concluding retakaful contracts and at what conditions. Compliance with
these guidelines is regularly checked and developments in the global, regional and local markets
are closely observed, reacting where necessary with appropriate measures that are translated
without delay into underwriting guidelines, if required.

Page - 27
 Frequency and severity of benefits

Risk associated with general Retakaful contracts includes the reasonable possibility of
significant loss as well as the frequent occurrence of the Retakaful events. This has been
managed by underwriting strategy, retakaful arrangements and proactive benefit handling
procedures.

The Operator's class wise major risk exposure is as follows:

- Fire and property damage

- Marine, aviation and transport
- Motor
- Miscellaneous

Uncertainty in the estimation of future benefits payment

Benefits on general Retakaful contracts are payable on a benefit occurrence basis. The
Participant Retakaful is liable for all covered events that occur during the term of the Retakaful
contract including the event reported after the expiry of the Retakaful contract term.

An estimated amount of the benefit is recorded immediately on the intimation to the operations.
The estimation of the amount is based on management judgment or preliminary assessment by
the independent surveyor appointed for this purpose. The initial estimates include expected
settlement cost of the benefits.

There are several variable factors which affect the amount and timing of recognized benefit
liabilities. The operations takes all reasonable measures to mitigate the factors affecting the
amount and timing of benefit settlements. However, uncertainty prevails with estimated benefit
liabilities and it is likely that final settlement of these liabilities may be significantly different
from initial recognized amount.

40.2 Credit risk

Credit risk is the risk that the counter party to a financial instrument will cause a financial loss
for the Operator by failing to discharge its obligation. The Operator's policy is to enter into
financial contracts with reputable counter parties in accordance with the internal guidelines and
regulatory requirements. Further, management monitors exposure to credit risk through review
of credit exposure, undertaking transactions with a large number of counter parties in various
industries and by continuously assessing the credit worthiness of counter parties.

Concentration of credit risk occurs when a number of counterparties have a similar type of
business activities. As a result, any change in economic, political or other conditions would
effect their ability to meet contractual obligations in similar manner. The Company’s credit risk
exposure is not significantly different from that reflected in the financial statements.

Page - 28
The management monitors and limits the company’s exposure to credit risk through monitoring
of client’s exposure and conservative estimates of provisions for doubtful assets, if any. The
management is of the view that it is not exposed to significant concentration of credit risk as its
financial assets are adequately diversified in entities of sound financial standing, covering
various industrial sectors.

The carrying amount of financial assets represents the maximum credit exposure as specified
below:

Operator's Retakaful Fund Participant's Retakaful Fund

2022 2021 2022 2021
Note -----------------------------Rupees-----------------------------
Bank balances 15 111,537,025 110,526,812 1,110,117,788 598,618,743
Takaful / retakaful receivables 8 - - 503,635,945 330,413,954
Accrued markup on bank 7 3,924,045 2,765,576 10,631,103 1,231,247
deposit
Loan to employees 7 160,000 100,000 - -
Receivable from Participant's
Retakaful Fund / Operator's
Retakaful Fund - net 9 - - 14,683,246 3,309,474

The Company did not hold any collateral against the above during the year. General provision is
made for takaful / retakaful receivables and other receivables according to the Company’s
policy. The impairment provision is written off when the Company expects that it cannot
recover the balance due.

The credit quality of the bank in which Operator maintained its own and Participant's Funds'
bank balance and markup on bank deposits accrued can be assessed below with reference to
external credit ratings.
Operator's Retakaful Participant's
Fund Retakaful Fund
Rating
Short Long Rating
Amount in Rs.
Term Term Agency
A-1+ AAA JCR-VIS 422,919 286,604,640
A-1 A+ JCR-VIS 491,488 1,230
A-1+ AA JCR-VIS 109,612,405 312,012,873
110,526,812 598,618,743

The management monitors exposure to credit risk in contribution receivable from customers
through regular review of credit exposure and prudent estimates of provision for doubtful
receivables.
The credit quality of customers from whom the amount of retakaful receivables can be assessed
with reference to external credit ratings.
Amount
Receivable in
Rs.
A or above 516,457,482
Others -
516,457,482
Page - 29
40.3 Impaired assets

The impairment provision is written-off when the Operator expects that it cannot recover the
balance due. During the year, no amount has been impaired.

40.4 Liquidity risk

Liquidity risk is the risk that the Operator will encounter difficulty in meeting its financial
obligations as they fall due. Liquidity risk arises because of the possibility that the Operator
could be required to pay its liabilities earlier than expected or difficulty in raising funds to meet
commitments associated with financial liabilities as they fall due. The Operator's approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stress conditions, without incurring
unacceptable losses or risking damage to the Operator's reputation. In the case of the Operator,
the liquidity level remained on satisfactory level during the year and Operator did not face any
difficulty in generation of liquidity.

The following are the contractual maturities of financial liabilities on the basis of an
undiscounted cash flow;

Carrying Contractual Maturity up to

Operator`s Retakaful Fund
amount cash flows one year
2022 ----------------Rupees----------------
Financial liabilities:
Payable to Participant Retakaful Fund- 14,683,246 14,683,246 14,683,246
Other creditors and accruals 2,437,660 2,437,660 2,437,660
17,120,906 17,120,906 17,120,906
2021
Financial liabilities:
Payable to Participant Retakaful Fund-net 3,309,474 3,309,474 3,309,474
Other creditors & accruals 1,243,041 1,243,041 1,243,041
4,552,515 4,552,515 4,552,515
Participant's Retakaful Fund
2022
Financial liabilities:
Outstanding claims including IBNR 721,865,204 721,865,204 721,865,204
Takaful/ retakaful payables 175,952,712 175,952,712 175,952,712
Other creditors and accruals 31,690 31,690 31,690
897,849,606 897,849,606 897,849,606
2021
Financial liabilities:
Outstanding claims including IBNR 314,149,375 314,149,375 314,149,375
Takaful/ retakaful payables 117,935,182 117,935,182 117,935,182
Other creditors and accruals 1,000 1,000 1,000
432,085,557 432,085,557 432,085,557

Page - 30
40.5 Market risk

Market risk is a risk that the fair value or the future cash flows of a financial instrument may
fluctuate as a result of changes in market prices. The Operator manages the market risk through
diversification of the portfolio and by following the internal guidelines established by the
relevant committee. Market risk comprises of three types of risk: currency risk, profit rate risk
and price risk.

40.5.1 Profit/interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of financial instruments will
fluctuate because of changes in market interest rates. The Company invests in securities and has
deposits that are subject to interest / mark-up rate risk. The Company limits interest / mark-up
rate risk by monitoring changes in interest / mark-up rates in the currencies in which its cash and
investments are denominated.

The information about the Operator's and Participant's Retakaful fund to interest rate risk based
on contractual repricing or maturity dates whichever earlier is as follows:

OPERATOR'S
Interest / mark-up bearing financial instruments Non-interest /
Effective
mark-up
rate per Maturity
2022 Maturity bearing Total
annum up to Sub total
over one year financial
(%) one year
instruments

---------------------------------------Rupees------------------------------------
Financial assets
Bank balances 9% to 10% 111,537,025 - 111,537,025 - 111,537,025
Investments - - - 20,196,059 20,196,059
Other receivable - - - 4,084,045 4,084,045

Receivable from Participant's Retakaful Fund- net - - - - -

Subtotal 111,537,025 - 111,537,025 24,280,104 135,817,129
Financial liabilities
Outstanding claims including IBNR - - - - -
Takaful / retakaful payables - - - - -
Payable to Participant Retakaful Fund-net - - - 14,683,246 14,683,246
Other creditors and accruals - - - 2,437,660 2,437,660
Subtotal - - - 17,120,906 17,120,906
111,537,025 - 111,537,025 7,159,198 118,696,223
On balance sheet sensitivity gap 111,537,025 - 111,537,025 7,159,198

Interest / mark-up bearing financial instruments Non-interest /

Effective
mark-up
rate per Maturity
2021 Maturity bearing Total
annum up to Sub total
over one year financial
(%) one year
instruments
---------------------------------------Rupees------------------------------------
Financial assets
Bank balances 9% to 10% 110,526,812 - 110,526,812 - 110,526,812
Investments - - - 18,307,796 18,307,796
Other receivables - - - 2,865,576 2,865,576
- - - - -
Receivable form Participant's Retakaful Fund-net 110,526,812 - 110,526,812 21,173,372 131,700,184
Subtotal
Financial liabilities - - - - -
Outstanding claims including IBNR - - - - -
Insurance / reinsurance payables - - - 3,309,474 3,309,474
Other creditors and accruals - - - 1,243,041 1,243,041
Subtotal - - - 4,552,515 4,552,515
110,526,812 - 110,526,812 16,620,857 127,147,669
On balance sheet sensitivity gap 110,526,812 - 110,526,812 16,620,857

Page - 31
PARTICIPANT'S

Interest / mark-up bearing financial instruments Non-interest /

Effective
mark-up
rate per Maturity
2022 Maturity bearing Total
annum up to Sub total
over one year financial
(%) one year
instruments

---------------------------------------Rupees------------------------------------
Financial assets
Bank balances 3% to 6% 1,110,117,788 - 1,110,117,788 - 1,110,117,788
Investments - - - 99,193,301 99,193,301
Other receivable - - - 10,631,103 10,631,103
Receivable from Operator's Retakaful Fund - net - - - 14,683,246 14,683,246
Takaful / retakaful receivables - - - 503,635,945 503,635,945
Subtotal 1,110,117,788 - 1,110,117,788 628,143,595 1,738,261,383

Financial liabilities
Outstanding claims including IBNR - - - 299,136,344 299,136,344
Takaful / retakaful payables - - - 58,819,041 58,819,041
Payable to Operatotr's Retakaful Fund - - - 29,557,577 29,557,577
Other creditors and accruals - - - 1,000 1,000
Subtotal - - - 387,513,962 387,513,962
1,110,117,788 - 1,110,117,788 240,629,634 1,350,747,421
On balance sheet sensitivity gap 1,110,117,788 - 1,110,117,788 240,629,634

Interest / mark-up bearing financial instruments Non-interest /

Effective
mark-up
rate per Maturity
2021 Maturity bearing Total
annum up to Sub total
over one year financial
(%) one year
instruments

---------------------------------------Rupees------------------------------------
Financial assets
Bank balances 9% to 10% 598,618,743 - 598,618,743 - 598,618,743
Investments - - - 89,759,175 89,759,175
Other receivable - - - 1,231,247 1,231,247

Receivable from Operator's Retakaful Fund - net - - - 3,309,474 3,309,474

Takaful / retakaful receivables - - - 330,413,954 330,413,954
Subtotal 598,618,743 - 598,618,743 424,713,850 1,023,332,593
Financial liabilities
Outstanding claims including IBNR - - - 314,149,375 314,149,375
Payable to Operatotr's Retakaful Fund - - - - -
Takaful/retakaful payables - - - 117,935,182 117,935,182
Other creditors and accruals - - - 1,000 1,000
Subtotal - - - 432,085,557 432,085,557
598,618,743 - 598,618,743 (7,371,707) 591,247,036
On balance sheet sensitivity gap 598,618,743 - 598,618,743 (7,371,707)

Market risk

Market risk is a risk that the value of a financial instrument will fluctuate as a result of changes
in market prices. The Company is exposed to market risk with respect to its investments and
bank balances maintained in profit & loss sharing accounts. The Company has invested its funds
in close ended mutual funds resulting in risk arising from fluctuation in the rate of return and
dividend earned thereon and the possibility of capital gains or losses arising from the sale of
these investments.

Sensitivity analysis for variable rate

Profit rate risk arises from possibility that changes in profit rate will effect the value of financial
instruments. Rate risk is the risk of decline in earning due to adverse movement of the rate
curve. The operator is exposed to profit rate risk for certain deposits with the banks.

Page - 32
 The below table summarize the price risk as at December 31, 2022 and 2021 and show the effect
of 10% increase and decrease in market rate as at the year end. The selected changes does not
reflect what could be considered to be the best or worst case scenarios.

OPERATOR'S RETAKAFUL FUND

Effect on profit Effect on
Fair value
before tax Operator's Fund
--------------------------Rupees------------------------
December 31, 2022
10% increase 111,537,025 11,153,703 7,919,129
10% decrease 111,537,025 (11,153,703) (7,919,129)

December 31, 2021

10% increase 110,526,812 11,052,681 7,847,404
10% decrease 110,526,812 (11,052,681) (7,847,404)

PARTICIPANT'S RETAKAFUL FUND

December 31, 2022

10% increase 1,110,117,788 111,011,779 78,818,363
10% decrease 1,110,117,788 (111,011,779) (78,818,363)

December 31, 2021

10% increase 598,618,743 59,861,874 42,501,931
10% decrease 598,618,743 (59,861,874) (42,501,931)

40.6 Foreign Currency risk

Foreign currency risk is a risk that the fair value of future cash flows financial instrument will
fluctuate because of change in exchange rates. Current, the Operator is not exposed to currency
risk as majority of the transactions are carried out in Pakistani rupees.

40.7 Equity Price Risk

The Operator's equity investments are susceptible to market price risk arising from uncertainty
about the future value of investments securities. The Operator limit market risk by diversifying
its equity investment portfolio and by actively monitoring the developments in equity market.

The table below summarize Operator's market price risk as of December 31, 2022 and 2021. it
shows the effects of a 10% increase and decrease in the market prices of equity investments as
on those dates on Operator's profit and total Operator's fund.

Page - 33
 Effect on Profit and Effect on Total
Price Change Fair value Estimated fair
loss account Operator's Fund
value
-------------------------------Rupees----------------------------------
10% increase 20,196,059 22,215,665 - 2,019,606
December 31, 2022
10% decrease 20,196,059 18,176,453 - (2,019,606)
10% increase 18,307,796 20,138,576 - 1,830,780
December 31, 2021
10% decrease 18,307,796 16,477,016 - (1,830,780)

40.8 Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising from profit rate risk or
currency risk), whether those changes are caused by factors specific to the individual financial
instrument or its issuer, or factors affecting all similar financial instruments traded in the market.
The Operator is not exposed to any such risk.

The fair value hierarchy has the following levels:

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

Level 2 - inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices)
Level 3 - inputs for the asset or liability that are not based on observable market data
(un observable inputs).

Total Level 1 Level 2 Level 3

2022 -------------------------------- Rupees --------------------------------
Financial assets measured at fair value
Available-for-sale investment
Mutual funds
- Operator's Fund 20,196,059 20,196,059 - -
- Participant Retakaful Fund 99,193,301 99,193,301 - -

2021
Financial assets measured at fair value
Available-for-sale investment
Mutual funds
- Operator's Fund 18,307,796 18,307,796 - -
- Participant Retakaful Fund 89,759,175 89,759,175 - -

December 31,
41 STATEMENT OF SOLVENCY 2022
Note Rupees
Assets
Investments 6 99,193,301
Takaful/retakaful receivables 8 503,635,945
Other receivable 7 10,631,103
Advance taxation -
Prepayment 14 87,351,654
Deferred wakala fee 12 103,114,993

Page - 34
 December 31,
2022
Note Rupees

Receivable from Operator's Retakaful Fund - net 9 14,683,246

Retakaful recoveries against outstanding claims 11 103,114,993
Bank balances 15 1,110,117,788
Total Assets (A) 2,031,843,022
In-admissible assets as per section 32 (2)
of Insurance Ordinance, 2000
Investments -
Contribution due since more than three months (195,647,000)
Total In-admissible assets (B) (195,647,000)

Total Admissible Assets (C=A-B) 1,836,196,022

Total Liabilities

Underwriting Provisions
Outstanding benefits including IBNR 19 721,865,204
Unearned contribution reserves 20 515,574,963
Contribution deficiency reserves 21 -
Takaful/retakaful payable 22 175,952,712
Other creditors and accruals 25 31,690
Total Liabilities (D) 1,413,424,569
Total Net Admissible Assets (E=C-D) 0.1 422,771,453

The Participant's Retkaful Fund has complied with the minimum solvency requirement as
against the requirement of section 36 of the Insurance ordinance, 2000.

42 CAPITAL MANAGEMENT

The Company's objective when managing capital is to safeguard the Company's ability to
continue as a going concern so that it can continue to provide returns for shareholders and
benefits for other stakeholders; and to maintain a strong capital base to support the sustained
development of its business.

The objectives, policies and processes for managing capital of the Operator are as follows:

- to be an appropriately capitalized institution, as defined by regulatory authorities;

- maintain strong rating and to protect the Operator against unexpected events;
- availability of adequate capital at reasonable cost so as to enable the Operator to expand; and
- achieve low cost of capital with approximate mix of capital elements.

Page - 35
 Amount of Rs. 300 million is deposited as statutory fund to comply with provisions of
paragraph 4 of circular no. 8 of 2014 read with section 11(1)(c) of Takaful Rules, 2012 issued
by SECP, which states that 'every insurer who is interested to commence Window Takaful
business shall transfer an amount of not less than Rs. 50 million to be deposited in a separate
bank account for Window Takaful business duly maintained in a scheduled bank.

The Company monitors capital using a ratio of "net debt" to "equity". Net debt is calculated as
total liabilities (as shown in statement of financial position) less cash and cash equivalents.
Equity comprises all components of Operator' and Participant' Retakaful Fund

The Operator's net debt to equity ratio as at December 31, 2022 was as follows:

Operator's Retakaful Fund Participant's Retakaful Fund

2022 2021 2022 2021
-----------------------------Rupees-----------------------------
Total liabilities 152,707,799 100,663,982 1,413,424,569 864,615,443
Less: cash and cash equivalents (111,537,025) (110,526,812) (1,110,117,788) (598,618,743)
Net debt 41,170,774 (9,862,830) 303,306,781 265,996,700

Total Operator's Fund / Balance of Participant's

Retakaful Fund 386,905,042 355,949,658 446,084,170 98,147,953

Net debt to equity ratio 11% -3% 68% 271%

43 SUBSEQUENT EVENT

No adjusting or significant non-adjusting events have occurred between the reporting date and
date of authorization.

44 DATE OF AUTHORIZATION FOR ISSUE

These financial statements were authorized for issue on ___________ by the Board of
Directors of the Operator.

45 GENERAL

Figures have been rounded off to the nearest rupee unless otherwise stated.

Page - 36
 PAKISTAN REINSURANCE COMPANY LIMITED
Pattern of Shareholding
as at December 31, 2022
# Of Shareholders Shareholdings'Slab Total Shares Held
323 1 to 100 7,603
407 101 to 500 148,428
389 501 to 1000 345,562
1352 1001 to 5000 3,707,748
605 5001 to 10000 4,637,616
281 10001 to 15000 3,710,358
162 15001 to 20000 2,931,968
115 20001 to 25000 2,670,439
127 25001 to 30000 3,684,192
64 30001 to 35000 2,071,580
44 35001 to 40000 1,670,591
40 40001 to 45000 1,735,602
46 45001 to 50000 2,265,664
26 50001 to 55000 1,383,274
29 55001 to 60000 1,714,997
14 60001 to 65000 883,425
18 65001 to 70000 1,235,312
17 70001 to 75000 1,251,101
11 75001 to 80000 862,750
13 80001 to 85000 1,082,579
9 85001 to 90000 806,491
15 90001 to 95000 1,386,262
30 95001 to 100000 2,968,772
3 100001 to 105000 306,000
5 105001 to 110000 546,000
6 110001 to 115000 677,500
14 115001 to 120000 1,671,000
3 120001 to 125000 370,509
9 125001 to 130000 1,155,075
4 130001 to 135000 533,966
5 135001 to 140000 692,908
4 140001 to 145000 576,527
11 145001 to 150000 1,638,651
3 150001 to 155000 464,500
3 155001 to 160000 474,397
1 160001 to 165000 165,000
2 165001 to 170000 333,066
1 170001 to 175000 170,796
5 175001 to 180000 894,994
1 180001 to 185000 183,500
1 185001 to 190000 186,600
4 190001 to 195000 773,080
7 195001 to 200000 1,390,497
 2 200001 to 205000 402,500
1 210001 to 215000 211,500
2 215001 to 220000 440,000
4 220001 to 225000 899,000
1 235001 to 240000 237,000
1 240001 to 245000 241,500
1 245001 to 250000 246,000
1 250001 to 255000 255,000
3 255001 to 260000 773,197
1 260001 to 265000 260,500
1 265001 to 270000 266,500
2 270001 to 275000 548,000
1 275001 to 280000 276,000
1 290001 to 295000 295,000
12 295001 to 300000 3,597,500
1 305001 to 310000 310,000
2 310001 to 315000 630,000
3 325001 to 330000 985,500
1 330001 to 335000 334,500
1 345001 to 350000 348,000
1 355001 to 360000 359,997
1 360001 to 365000 361,500
2 365001 to 370000 736,699
4 370001 to 375000 1,491,000
1 375001 to 380000 380,000
1 380001 to 385000 383,000
2 385001 to 390000 777,399
1 400001 to 405000 400,500
2 410001 to 415000 825,538
1 415001 to 420000 417,000
3 435001 to 440000 1,316,195
1 445001 to 450000 449,997
1 460001 to 465000 463,500
2 465001 to 470000 934,974
1 480001 to 485000 484,500
1 490001 to 495000 491,000
3 495001 to 500000 1,493,500
1 500001 to 505000 502,000
1 505001 to 510000 508,000
1 530001 to 535000 533,331
1 565001 to 570000 568,664
1 580001 to 585000 581,500
1 585001 to 590000 588,000
4 595001 to 600000 2,400,000
1 600001 to 605000 601,800
1 610001 to 615000 610,500
2 620001 to 625000 1,249,000
 1 625001 to 630000 629,997
1 655001 to 660000 655,500
2 660001 to 665000 1,323,000
1 665001 to 670000 667,797
1 705001 to 710000 705,500
2 715001 to 720000 1,437,000
1 745001 to 750000 750,000
1 795001 to 800000 800,000
1 800001 to 805000 802,500
1 820001 to 825000 824,397
1 845001 to 850000 846,729
1 860001 to 865000 860,529
1 895001 to 900000 899,997
1 935001 to 940000 936,000
1 955001 to 960000 957,597
1 970001 to 975000 974,364
1 1010001 to 1015000 1,011,000
1 1025001 to 1030000 1,029,000
1 1085001 to 1090000 1,087,246
1 1095001 to 1100000 1,100,000
5 1120001 to 1125000 5,621,820
1 1150001 to 1155000 1,151,997
1 1185001 to 1190000 1,187,997
1 1195001 to 1200000 1,200,000
1 1215001 to 1220000 1,216,500
1 1235001 to 1240000 1,239,000
1 1385001 to 1390000 1,385,997
1 1795001 to 1800000 1,800,000
2 1995001 to 2000000 4,000,000
1 2335001 to 2340000 2,339,994
1 2535001 to 2540000 2,540,000
1 2755001 to 2760000 2,756,500
1 3295001 to 3300000 3,300,000
1 5310001 to 5315000 5,311,500
1 6495001 to 6500000 6,500,000
1 13045001 to 13050000 13,048,500
1 13970001 to 13975000 13,971,000
1 14935001 to 14940000 14,937,000
1 31660001 to 31665000 31,665,000
1 219695001 to 219700000 219,696,603
1 458995001 to 459000000 458,999,268
4361 900,000,000
 PAKISTAN REINSURANCE COMPANY LIMITED
Pattern of Shareholding
as at December 31, 2022
Categories of Shareholders Shareholders Shares Held Percentage

Government of Pakistan
THE SECRETARY MINISTRY OF COMMERCE, 1 458,999,268 51.00

Directors, Chief Executive Officer, and their spouse and minor children
MR. MUSLEH UD DIN 1 165 0.00
MUMTAZ ALI RAJPER 2 1,665 0.00
MR. SHOAIB MIR 1 165 0.00
ZARA SHAHEEN AWAN 1 30 0.00

Associated Companies, undertakings and related parties

STATE LIFE INSURANCE CORP. OF PAKISTAN 1 219,696,603 24.41

Banks, Development Financial Institution, Non-Banking Financial Institution. 8 46,668,406 5.19

Insurance Companies 5 18,683,076 2.08

Foreign Companies 2 6,061,500 0.67

Modarabas and Mutual Funds 1 717,000 0.08

General Public
a. Local 4,205 143,407,066 15.93
b. Foreign 81 2,038,827 0.23
Others 52 3,726,229 0.41
Totals 4,361 900,000,000 100.00

Share holders holding 10% or more Shares Held Percentage

THE SECRETARY MINISTRY OF COMMERCE, 458,999,268 51.00

STATE LIFE INSURANCE CORP. OF PAKISTAN 219,696,603 24.41
 Pakistan Reinsurance Company Limited
FORM OF PROXY
Annual General Meeting

I/We,_________________________________________of_____________________________being a member of
Pakistan Reinsurance Company Limited and holder of ___________________ ordinary shares hereby appoint
Mr/Mrs.__________________________________________________ of ______________________________ or
failing him/her ___________________________________________________ of ___________________________ as
my / our proxy in my absence to attend and vote for me / us and on my / our behalf at the 23rd Annual General Meeting
of the Company to be held on 28th April, 2023 at 11:00am at Karachi and at any adjournment thereof.

Signed this ________________________day of April, 2023.

Affix Rupees Five

Revenue Stamp

Signature of Member(s) Shareholder’s Folio No____________________

or CDC
Participant I D. No. ____________________
and Sub Account No. ____________________

Witnesses:
1 Signature _________________________ 2. Signature __________________________
Name____________________________ Name ____________________________
Address __________________________ Address ___________________________
CNIC or Passport No. ________________ CNIC or Passport No. ________________

NOTE:

1. The member is requested:

i) To affix revenue stamp of Rs.5/- at the place indicated above.
ii) To sign across the revenue stamp in the same style of signature as is registered with the Company.
iii) To write down his/her/their folio number.
iv) Attach an attested photocopy of their valid Computerized National Identity Card/Passport/Board Resolution
and the copy of CNIC of the proxy, with this proxy form before submission.

2. In order to be valid, this proxy must be received at the registered office of the Company at least 48 hours before
the time fixed for the meeting, duly completed in all respects.

3. CDS Shareholders or their proxies should bring their original computerized national identity card or passport
along with the Participant’s ID Number and their Account Number to facilitate their identification. Detailed
procedure is given in the notes to the notice of AGM.
CDC/RTA/Company/IBAN/17
Date_____________________

Folio No._________________
Name of Shareholder
F/H Name
Address
Telephone/Cell #
Bank Account Details for Payment of Cash Dividend
(Mandatory Requirement as per the Companies Act, 2017)
Dear Shareholder,

This is to inform you that in accordance with the Section 242 of the Companies Act, 2017, any dividend payable in
cash shall only be paid through electronic mode directly into the bank account designated by the entitled
shareholder. Please note that giving bank mandate for dividend payments is mandatory and in order to comply with
this regulatory requirement and to avail the facility of direct credit of dividend amount in your bank account, you are
requested to please provide the following information:
Details of Shareholder
Name of shareholder
F/H Name
Folio / CDS Account No.
CNIC No.
Cell number & Landline of shareholder
Email Address (mandatory)
Details of Bank Account
Title of Bank Account
International Bank Account Number P K (24 digits)
(IBAN) “Mandatory”
(Kindly provide your accurate IBAN number after consulting with
your respective bank branch since in case of any error or omission in
given IBAN, the company will not be held responsible in any manner
for any loss or delay in your cash dividend payment).
Bank’s name
Branch Name and Code
Branch Address
It is stated that the above-mentioned information is correct and in case of any change therein, I / we will
immediately intimate Participant / Share Registrar accordingly.

_____________________
Signature of shareholder
Kindly ensure that the title of IBAN/Bank Account must be in your name.
You are requested to kindly send us this letter immediately duly filled in and signed by you along with legible
photocopy of your valid CNIC at our address, Share Registrar Services, Central Depository Company of Pakistan
Limited, CDC House, 99-B, Block B, Main Shahrah-e-Faisal, Karachi. 74400, Pakistan.
Regards,

Share Registrar Department

Central Depository Company of Pakistan Limited
Share Registrar:

Note: This letter is being computer generated and does not require any signature.