G, nK GÛ †Kvs

G, nK GÛ †Kvs

A. HOQUE & CO

CHARTERED ACCOUNTANTS

KHAN MANSION, 5TH FLOOR,

107, MOTIJHEEL C/A, DHAKA-1000

Tel.: 9564295, 9562786, 7161294

wR, wKewiqv GÛ †Kvs

G. KIBRIA & CO.


SADHARAN BIMA SADAN (5TH FLOOR)

24-25, DILKUSHA C/A, DHAKA-1000.

Tel.:  9553617, 9568071

AUDITORS' REPORT TO THE SHAREHOLDERS OF

"PROVATI INSURANCE COMPANY LIMITED"

We have jointly audited the annexed Statement of Financial Position of PROVATI INSURANCE COMPANY

LIMITED as of 31st December, 2011 and the related Fire, Marine Cargo, Marine Hull, Motor and Miscellaneous

Insurance Revenue Accounts as well as Statement of Comprehensive Income, Income Appropriation Account,

Statement of Changes in Equity, the related Statement of Cash Flow for the year then ended and notes to the

Financial Statements in which the returns from the branch offices certified by the branch managers have been incorporated. The preparation of these Financial Statements is the responsibility of the Company's management.

Our responsibility is to express an independent opinion on these Financial Statements based on our audit.

Scope:

We conducted our audit in accordance with Bangladesh Standards on Auditing ( BSA ). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall Financial Statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

Opinion:

In our opinion, the Financial Statements prepared in accordance with Bangladesh Financial Reporting Standards

(BFRS's) including Bangladesh Accounting Standards ( BAS's ) give a true and fair view of the state of the company’s affairs as of 31st December, 2011 and of the results of its operations and its cash flows for the year then ended and comply with the Companies Act, 1994, the Insurance Act, 1938, Insurance Rules 1958, the

Securities and Exchange Rules, 1987 and other applicable laws and regulations.

We also report that: i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof; ii) In our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us; iii) The company’s statement of financial position and revenue accounts and its cash flows dealt with by the report are in agreement with the books of account and returns; iv) v)

The expenditure incurred was for the purposes of the company’s business;

The Statement of Financial Position and the Revenue Account have been prepared in accordance with the regulations contained in Part I and Part II (Form A) of the First Schedule and Part I and Part II

(Form F) of the Third Schedule of Insurance Act, 1938. As per regulation 11 of Part I of the Third

Schedule of the Insurance Act, 1938 as amended, we certify that to the best of our information and as shown by its books, the Company during the period under report has not paid any person any commission in any form outside Bangladesh and that the Company during the year under report has not received outside Bangladesh from any person any commission in any form in respect of any of its business re-insured abroad; vi) As per Section 40-C (2) of the Insurance Act, 1938 as amended, we certify that to the best of our knowledge and belief and according to the information and explanations given to us, all expenses of

Management wherever incurred whether directly or indirectly, in respect of Fire, Marine Cargo, Marine

Hull, Motor and Miscellaneous Insurance businesses transacted in Bangladesh during the year under report have been duly debited to the related Revenue Accounts and the Statement of Comprehensive

Income of the Company.

Dated: 30th April, 2012

Place: Dhaka, Bangladesh sd/ sd/

A. Hoque & Co. G. Kibria & Co.

Chartered Accountants Chartered Accountants

1

A. HOQUE & CO.

G. KIBRIA & CO.

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

PROVATI INSURANCE COMPANY LIMITED

STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER, 2011

Particulars

Capital and Liabilities:

Share Capital:

Authorized Share Capital

Issued, Subscribed and Paid up Capital

Reserve or Contingency Account

Reserve for Exceptional Losses

Retained Earnings

Investment Fluctuation Reserve

Total Shareholders' Equity

Balance of Funds and Accounts:

Fire Insurance Revenue Account

Marine Cargo Insurance Revenue Account

Marine Hull Insurance Revenue Account

Motor Insurance Revenue Account

Miscellaneous Insurance Revenue Account

Premium Deposits Account

Liabilities and Provisions

Sundry Creditors-Including Provision for

Expenses and Taxes

Amount due to other persons or bodies carrying on Insurance Business

Deferred Tax Liability

Estimated liabilities in respect of outstanding claims whether due or intimated

Total Shareholders' Equity and Liabilities

Notes

20

Amount in Taka

31-12-2011 31-12-2010

20,00,00,000

20,00,00,000

21

22

16,80,00,000

9,65,43,929

7,04,68,889

2,35,75,040

25,00,000

15,00,00,000

8,44,94,238

5,83,06,000

2,36,88,238

25,00,000

26,45,43,929 23,44,94,238

23 7,79,08,473

4,16,80,511

1,75,20,223

1,09,975

1,77,62,992

8,34,772

7,24,23,606

3,97,91,412

1,29,35,649

1,80,894

1,85,89,787

9,25,864

24 67,88,828 58,56,577

10,29,50,902 10,79,77,063

25

26

27

28

6,41,24,752

55,61,814

1,11,092

3,31,53,244

5,85,57,260

31,42,905

1,89,302

4,60,87,596

45,21,92,132 42,07,51,484

Accounting Policies 6

The notes are integral part of the Financial Statements

Approved and authorized for issue by the board of directors on 30-04-2012 and signed for and on behalf of the Board.

MANAGING DIRECTOR DIRECTOR DIRECTOR

As per our report of even date

CHAIRMAN





2

A. HOQUE & CO.

G. KIBRIA & CO.



STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER, 2011

Particulars Notes Amount in Taka

31-12-2011 31-12-2010

Property and Assets:

Investment:

Investment-At cost (NIB)

Investment in Shares

29

30

2,66,71,355

90,00,000

1,76,71,355

3,54,37,054

90,00,000

2,64,37,054

Interest Accrued but not Due

Amount Due from Other Persons or Bodies

Carrying on Insurance Business

Cash and Bank Balances including FDR's

Other Accounts :

31

32

Sundry Debtors-Including Advances, Deposits & Prepayments 33

1,28,32,167

3,63,16,188

5,56,26,262

1,90,63,950

4,46,51,397

2,62,29,966

34 27,99,00,102 24,80,21,348

35 4,08,46,058 4,73,47,769

Fixed Assets -At Cost Less Depreciation

Stock of Printing & Stationery

3,98,33,244

10,12,814

4,59,89,836

13,57,933

Total Property and Assets 45,21,92,132 42,07,51,484






CHAIRMAN


Place: Dhaka, Bangladesh sd/

A. Hoque & Co. sd/

G. Kibria & Co.


3

G. KIBRIA & CO.


A. HOQUE & CO.


G. KIBRIA & CO.



STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31ST DECEMBER, 2011

Particulars

Expenses of Management Not Applicable to any particular Fund or Account

Directors' Fees

Meeting Expenses

Legal Expenses

Statutory Fees for Business Licence & Annual Registration

Advertisement & Publicity

Subscription & Donation

Depreciation

Audit Fees

Net Profit transferred to Profit & Loss App. Account

Total

Notes Amount in Taka

31-12-2011 31-12-2010

35.01

4,96,800

7,89,375

2,54,955

9,74,137

5,43,822

10,22,025

72,25,882

1,87,500

4,73,10,959

2,80,000

7,94,839

4,24,392

9,82,465

5,32,410

4,42,500

85,26,876

1,26,500

4,02,93,915

5,88,05,455 5,24,03,897

Miscellaneous Income

Interest on FDR, STD and NIB

Loss on Investment in Shares

Profit /(Loss) Transferred from:

Fire Insurance Revenue Account

Marine Insurance Cargo Revenue Account

Marine Insurance Hull Revenue Account

Motor Insurance Revenue Account

Miscellaneous Insurance Revenue Account

Total

36

37

8,30,453

2,09,26,891

(34,92,409)

4,05,40,520

(61,57,045)

2,00,97,128

(5,084)

2,82,72,754

(16,67,233)

5,88,05,455

36,85,093

2,12,06,248

34,71,846

2,40,40,710

1,05,29,340

(35,85,458)

(1,47,886)

1,67,11,982

5,32,732

5,24,03,897

Earning Per Share (EPS)

Price Earning Ratio (PER)

Accounting Policies

41 1.63

29.35

1.64

49.50

6





CHAIRMAN





4


A. HOQUE & CO.


G. KIBRIA & CO.



INCOME APPROPRIATION ACCOUNT


Particulars

Balance brought forward from last year

Net Profit for the year before Tax

Total


31-12-2011 31-12-2010

2,36,88,238

4,73,10,959

7,09,99,197

78,38,594

4,81,32,509

4,02,93,915



Income Tax Expenses:

Current Tax

Deferred Tax

Provision for Prior Years Income Tax

Dividend Paid

Retained Earnings Transferred to Statement of Financial Position

Total

22.01

22.03

42

27(b)

1,21,62,889

0

1,47,55,661

1,48,33,869

(78,210)

25,05,607

1,80,00,000

2,35,75,040

7,09,99,197

1,10,36,563

25,00,000

1,09,07,708

1,08,94,678

13,030

2,36,88,238

0

0

4,81,32,509

Earning Per Share (EPS)

Price Earning Ratio (PER)

Accounting Policies

41

6

1.63

29.35

1.64

49.50





CHAIRMAN





5

A. HOQUE & CO.


G. KIBRIA & CO.



CONSOLIDATED ALL BUSINESS REVENUE ACCOUNT


Particulars

Claims under the policies less Reinsurance:

Paid during the year

Total estimated liability in respect of outstanding claims at the end of the year whether due or intimated

Less: Outstanding claims at the end of the previous year

Agency Commission

Expenses of Management

Reserve for un-expired risks of Premium Income of the year

Profit Transferred to Profit & Loss Account

Total


31-12-2011 31-12-2010

9,99,44,236 7,19,34,189

28 3,31,53,244

13,30,97,480

4,60,87,596

4,60,87,596

11,80,21,785

3,54,22,603

38

8,70,09,884

3,72,12,067

4,49,75,807

7,79,08,473

4,05,40,520

8,25,99,182

3,63,70,524

4,34,90,790

7,24,23,606

2,40,40,710

28,76,46,751 25,89,24,812

Balance of Account at the beginning of the year

Premium Less Reinsurance

Commission on Reinsurance ceded

Total

7,24,23,606

19,46,06,220

2,06,16,925

6,14,40,310

18,07,87,675

1,66,96,827

28,76,46,751 25,89,24,812






CHAIRMAN





6

A. HOQUE & CO.

G. KIBRIA & CO.



FIRE INSURANCE REVENUE ACCOUNT


Particulars





Notes Amount in Taka

31-12-2011 31-12-2010

28

7,88,72,987

2,03,27,299

9,92,00,286

2,44,74,605

5,17,52,134

2,44,74,605

7,62,26,739

2,85,33,135

Agency Commission


Reserve for un-expired risks being 40% of Premium Income of the year

Profit Transferred to Statement of Comprehensive Income

Total

38

7,47,25,681

2,14,65,489

2,54,49,794

4,16,80,511

(61,57,045)

15,71,64,430

4,76,93,604

2,19,32,745

2,53,46,784

3,97,91,412

1,05,29,340

14,52,93,885




Total

3,97,91,412

10,42,01,278

1,31,71,740

3,41,02,471

9,94,78,531

1,17,12,883

15,71,64,430 14,52,93,885






CHAIRMAN





7

A. HOQUE & CO.

G. KIBRIA & CO.



MARINE CARGO INSURANCE REVENUE ACCOUNT


Particulars Notes Amount in Taka

31-12-2011 31-12-2010

Claims Under The Policies Less Reinsurance:




Agency Commission


Reserve for un-expired risks being 40% of premium income of the year


Total

28

38

1,46,15,645

71,21,865

2,17,37,510

1,20,88,417

1,43,46,934

1,20,88,417

2,64,35,351

25,45,446

96,49,093 2,38,89,905

61,76,819

82,52,721

1,75,20,223

2,00,97,128

44,41,383

66,73,797

1,29,35,649

(35,85,458)

6,16,95,984 4,43,55,276




Total

1,29,35,649 89,83,713

4,38,00,557 3,23,39,122

49,59,778 30,32,441

6,16,95,984 4,43,55,276






CHAIRMAN





8

G. KIBRIA & CO.


A. HOQUE & CO.


G. KIBRIA & CO.



MARINE HULL INSURANCE REVENUE ACCOUNT


Particulars Notes Amount in Taka





Agency Commission




Total

38

31-12-2011 31-12-2010

0

0

0

0

0

1,21,275

1,58,182

1,09,975

(5,084)

3,84,348

6,786

0

6,786

0

6,786

1,21,275

2,29,532

1,80,894

(1,47,886)

3,90,601




Total

1,80,894

1,09,975

93,479

3,84,348

1,17,067

1,80,894

92,640

3,90,601






CHAIRMAN





9

G. KIBRIA & CO.


A. HOQUE & CO.


G. KIBRIA & CO.



MOTOR INSURANCE REVENUE ACCOUNT



31-12-2011 31-12-2010




Less : Outstanding claims at the end of the previous year

Agency Commission




Total



Total

28

38

64,10,811

54,23,494

1,18,34,305

93,73,944

78,38,026

1,77,62,992

2,82,72,754

58,27,454

93,73,944

1,52,01,398

39,63,425

24,60,361 1,12,37,973

66,63,135 69,74,477

85,37,111

1,85,89,787

1,67,11,982

6,29,97,268 6,20,51,330

1,85,89,787 1,55,76,861

4,44,07,481 4,64,74,469

6,29,97,268 6,20,51,330






CHAIRMAN





10

A. HOQUE & CO.


G. KIBRIA & CO.



MISCELLANEOUS INSURANCE REVENUE ACCOUNT



31-12-2011 31-12-2010





Agency Commission


Reserve for un-expired risks being 40% of

Misc. and accident premium income of the year


Total

28

38

44,793

2,80,586

3,25,379

1,50,630

1,74,749

27,85,349

32,77,084

8,34,772

(16,67,233)

54,04,721

881

1,50,630

1,51,511

3,80,597

(2,29,086)

29,00,644

27,03,566

9,25,864

5,32,732

68,33,720


Premium Less Re-Insurance

Commission on Re-insurance ceded

Total

9,25,864

20,86,929

23,91,928

54,04,721

26,60,198

23,14,659

18,58,863

68,33,720






CHAIRMAN





11

A. HOQUE & CO.

G. KIBRIA & CO.



STATEMENT OF CHANGES IN EQUITY


Particulars Share

Capital

Reserve for

Exceptional

Losses

Investment

Fluctuation

Reserve

Retained

Earnings

Total

Shareholders

Equity

At 31-12-2010 15,00,00,000 5,83,06,000 25,00,000 2,36,88,238 23,44,94,238

Net Profit after Tax

Bonus Share Issued


0

1,80,00,000

0

0

0

1,21,62,889

0

0

0

3,00,49,691

(1,80,00,000)

(1,21,62,889)

3,00,49,691

0

0

At the end of the year 16,80,00,000 7,04,68,889 25,00,000 2,35,75,042 26,45,43,929






CHAIRMAN





12

A. HOQUE & CO.



STATEMENT OF CASH FLOW


Particulars Amount in Taka

31-12-2011 31-12-2010

Cash Flows from Operating Activities:

Cash Receipts from Insurers and Others

Cash Paid for Claims and Management Expenses

Cash Generated from Operations

Income Tax Paid & Deducted at Source

Net Cash Generated from Operating Activities

Cash Flows from Investing Activities

Investment in Bonds / Shares

Acquisition of Property, Plant & Equipments etc.

Disposal of Property, Plant and Equipments etc.

Net Cash used in Investing Activities

Cash Flows from Financing Activities

Share Money (Return) / Deposited

Re-payment of Short Term Loan

Net Cash Generated/ (Used) in Financing Activities

Net (Decrease) / Increase in Cash and Bank Balances

Cash and Bank Balances at the Beginning of the Year

Cash and Bank Balances at the End of the Year

23,82,44,424

(19,84,09,841)

3,98,34,583

(1,24,85,756)

2,73,48,827

56,09,280

(19,90,892)

13,00,000

49,18,388

(3,88,462)

0

(3,88,462)

3,18,78,754

24,80,21,348

27,99,00,102

21,41,16,600

(15,13,85,041)

6,27,31,559

(46,35,641)

5,80,95,918

(2,61,30,054)

(1,46,17,321)

(20,86,787)

(4,28,34,162)

(60,21,11,835)

(95,72,330)

(61,16,84,165)

(59,64,22,409)

84,44,43,757

24,80,21,348

Net Operating Cash Flows per Shares 1.63 3.87






CHAIRMAN


Place: Dhaka, Bangladesh



13

A. HOQUE & CO.


G. KIBRIA & CO.



FORM "AA"

CLASSIFIED SUMMARY OF ASSETS AS AT 31ST DECEMBER, 2011

Class of Assets Book Value Remarks

Deposit with Bangladesh Bank (NIB)


Cash on Fixed Deposit and STD Account with Bank

Cash in Hand and Current Account with Bank

Cash Balance with BO Account

Stamp in Hand

Interest Accrued but not due

Amount due from other persons or bodies Carrying on Insurance business

Sundry Debtors Including Advances, Deposits & Prepayments

Fixed Assets (At Cost less Depreciation)

31-12-2011

90,00,000

1,76,71,355

24,61,36,925

1,71,55,161

1,48,96,016

17,12,000

1,28,32,167

3,63,16,188

5,56,26,262

3,98,33,244

31-12-2010

90,00,000

2,64,37,054

23,47,96,992

1,20,10,565

6,63,541

5,50,250

1,90,63,950

10,12,814

45,21,92,132 42,07,51,484

Realizable

Value

Do

Do

Do

Do

Do

Do

4,46,51,397

2,62,29,966

Do

Do

4,59,89,836 Written Down

Value

13,57,933 At Cost Stock of Printing and Stationery

Total

MANAGING DIRECTOR DIRECTOR DIRECTOR CHAIRMAN


Place: Dhaka, Bangladesh



14

A. HOQUE & CO.

G. KIBRIA & CO.



NOTES TO THE ACCOUNTS


1.00 Corporate Information–Domicile, Legal Form and Country of Incorporation

The Company was incorporated in Bangladesh as a Public Company Limited by Shares on the

31st day of January, 1996 under the Companies Act, 1994 and permission for its commencement of business was given on 25th day of March, 1996 and the registration from the Controller of Insurance on 31st day of March, 1996 was received to start general insurance business. The company went into Initial Public Offerings (IPO) on 3rd September, 2009. The

Company is listed in both Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) as a public traded company.

Address of Registered Office

The registered office of the Company is located at Khan Mansion, 11th Floor, 107, Motijheel

Commercial Area, Dhaka-1000. The operations of the company are being carried out through its 48 nos. of branches located all over Bangladesh.

Principal Activities and Nature of Operation

The main objectives of the Company are to carry on all kinds of insurance, guarantee and indemnity business other than life insurance business.

2.00 Basis of Presenting Financial Statements

The following underlying assumptions, measurement base, laws, rules, regulations and accounting pronouncements have been considered in preparing and presenting the financial statements:

Going Concern

Accrual

Historical Cost Convention

Generally accepted accounting principles and practices in Bangladesh

The Companies Act, 1994

Insurance Act, 1938 instead of Insurance Act, 2010 as no prescribed Format was mentioned in the Insurance Act, 2010

Insurance Rule, 1958 as no rule has yet been made in pursuance of Insurance Act, 2010

The Securities and Exchange Act and Rules, 1987

The Accounting Standards adopted by the Institute of Chartered Accountants of Bangladesh (ICAB).

3.00 Compliance of Bangladesh Financial Reporting Standards (BFRSs)

The Financial Statements have been prepared in accordance with the Bangladesh Financial

Reporting Standards (BFRSs) , including Bangladesh Accounting Standards (BASs) .

4.00 Risk and Uncertainty for use of Estimates and Judgments

The preparation of financial statements in conformity with the Bangladesh Financial Reporting

Standards (BFRSs) including the Bangladesh Accounting Standards (BASs) require management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and for contingent assets and liabilities that require disclosure during and at the date of financial statements.

Actual results could differ from those estimates. Estimates and underlying assumptions are used for accounting of certain items such as long-term contracts, provision for doubtful accounts, depreciation and amortization, taxes, reserves and contingencies.

5.00 Adoption of Bangladesh Accounting Standards (BASs)

In preparing and presenting these financial statements, considering relevant for the significant accounting issues of the company, following IASs have been implemented by the company, which were issued by the ICAB formulated in the light of the IASs originally issued by the International Accounting Standards Board and the conditions and practices prevailing in Bangladesh, and valid as on the financial position date:

15

A. HOQUE & CO.

G. KIBRIA & CO.


IAS 1 Presentation of Financial Statements

IAS 2 Inventories

IAS 7 Statement of Cash Flow

IAS 10 Events after the Financial Position Date

IAS 12 Income Tax

IAS 16 Property, Plant and Equipment

IAS 18 Revenue

IAS 24 Related Party

IAS 33 Earnings Per Share

IAS 36 Impairment of Assets

6.00 Specific Accounting Policies Selected and Applied for Significant Transactions and Events

The specific accounting policies selected and applied by the Company’s Directors for significant transactions and events that have material effect within the framework of BAS 1

" Preparation and Presentation of Financial Statements ", in preparation and presentation of financial statements have been consistently applied throughout the year and were also consistent with those used in earlier years.

For a proper understanding of the financial statements, these accounting policies are set out below in one place as prescribed by the IAS 1 “ Preparation and Presentation of Financial

Statements ”.

(a) Revenue Recognition

Revenue represents invoiced value of policies. Revenue is recognized when policies are made. Invoices were made after satisfying the following conditions as prescribed by IAS 18 " Revenue Recognition ":

(i)

(ii)

(iii)

(iv)

(v) the significant risks and rewards of ownership of the policies have been transferred to the policyholder; the amount of revenue was measured reliably; it was probable that the economic benefits relating to the transactions will flow to the Company; neither continuing managerial involvement nor effective control usually associated with ownership of the policy was retained by the Company; and cost relating to the transactions was measured reliably.

(b) Revenue Account

While preparing the Revenue Account, the effect of necessary adjustment has duly been given in to accounts in respect of re-insurance business ceded and accepted.

Re-Insurance Premium ceded has been accounted for into accounts.

Surplus or deficit on revenue have been arrived at after providing for un-expired risks

@ 40% on all business except Marine Hull Insurance for which 100% provision has been created for un-expired risks.

(c) Premium and Claim

The total amount of premium earned on various classes insurance business underwritten during the period has been duly accounted for in the books of account of the Company and while preparing the financial statements of accounts, the effect of re-insurance ceded as well as the effect of total estimated liabilities in respect of outstanding claims at the end of the period whether due or intimated have also been reflected in order to arrive at the net underwriting profit for the year.

(d) Management Expenses

The management expenses charged to Revenue Account amounting to Tk.

4,49,75,807 represent approximately 16.72% of Gross Premium of Tk.

26,90,74,089 (including public sector business). The said management expenses have been apportioned 56.59% to fire, 18.70% to marine (cargo & hull), 17.43% to motor, 7.28% to miscellaneous business as per management decision.

16

A. HOQUE & CO.

G. KIBRIA & CO.


(e) Recognition of Tangible Fixed Assets

These are capitalized at the cost of acquisition and subsequently stated at cost less accumulated depreciation in compliance with the benchmark treatment of IAS 16

"Property, Plant and Equipment". The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use and other related incidental charges. Expenditure incurred after the assets have been put into operation, such as repairs & maintenance is normally charged off as revenue expenditure in the period in which it is incurred. In situation where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefit expected to be obtained from the use of the fixed assets, the expenditure is capitalized as an additional cost of the assets.

(f) Depreciation of Tangible Fixed Assets

In respect of all fixed assets, depreciation is provided to amortize the cost of the assets after commissioning, over their expected useful economic lives in accordance with the provision of IAS 16 "Property, Plant and Equipment"

Depreciation on Fixed Assets has been charged at a reducing balance method. 12 month's depreciation has been charged on the book value of Fixed Assets at the rates varying from 10% to 20%. Depreciation is charged at the rate shown below:

Furniture & Fixture

Books & Periodicals

Motor Vehicles

Motorcycle

Office Equipment

Decoration

Electric Fan

Telephone Installation

Air Cooler

Carpet

Electric Equipment

Crockeries

By Cycle

10%

10%

20%

20%

20%

10%

20%

15%

15%

20%

20%

20%

20%

(g)

Investment in FDR and Shares

Investment is stated at its cost of acquisition and the interest earned on statutory deposits lying with the Bangladesh Bank in the form of National Investment Bond and the interest and profit earned on term deposit have been duly accounted for on accrual basis. The Statement of Comprehensive Income also reflects the income on account of interest on investment in FDR, Shares and Miscellaneous Income. It may be mentioned here that a fluctuation reserve had been created in order to equalize the price go down below the cost price of the shares but during the year under audit loss on Realization of

Investment in Shares for price go down below the cost price of the shares has been charged directly to Comprehensive Income Statement in order to equalize the price of the shares as per Second Schedule, Part-II, Form-B of the Insurance Act, 1938.

(h) Inventories

In compliance with the requirement of

IAS 2

the lower of cost and net realizable value.

" Inventories ", inventories are stated at

Net realizable value is based on estimated selling price less any further cost expected to be incurred to make the sale.

(i) Sundry Debtors (Including Advance, Deposits and Pre-Payments)

These are carried at original invoice amounts, which represent net realizable value.

17

A. HOQUE & CO.

G. KIBRIA & CO.


(j) Cash and Cash Equivalents

For the purpose of Financial Position and Statement of Cash Flow, cash in hand, fixed deposit with other banks, collection in hand, stamp in hand and bank balances represent

Cash and Cash Equivalents

considering the IAS 1 " Preparation and Presentation of

Financial Statements " and IAS 7 " Statement of Cash Flow ", which provide, that cash and cash equivalents are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value and are not restricted as to use.

(k) Other Current Assets

Other current assets have a value on realization in the ordinary course of the company's business which is at least equal to the amount at which they are stated in the Statement of Financial Position.

(l) Income Tax

Current Tax

Current Tax has been provided on the estimated taxable profit for the year under review at 42.5% tax rate being the tax rate applicable for Publicly Traded Company.

It also includes adjustments for earlier year's short/excess provision.

Deferred Tax

The company has been adopted deferred tax during the year under review in compliance with the provisions of Bangladesh Accounting Standards (BAS-12)

'Income Taxes'. The company's policy of recognition of deferred tax assets/liabilities is based on temporary differences (Taxable or deductable) between the carrying amount (Book Value) of assets, and liabilities for financial reporting purposes and its tax base, and accordingly, deferred tax income/expenses has been considered to determine net profit after tax and Earnings Per Share (EPS).

Provision for Income Tax

Basis of Provision for Income Tax: Net Profit -Reserve for exceptional loss x tax rate.

(m) Proposed Dividend

(n)

The dividend has been proposed by the Board @ 12%.

Cost of Post Employment Benefits

(i) Defined Contribution Plan

This represents recognized contributory Provident Fund for all its permanent employees. Assets of provident fund are held in a separate trustee administered the fund as per the relevant rules and is funded by payments from employees and by the Company at pre-determined rates. The

Company's contributions to the provident fund are charged off as revenue expenditure in the year to which the contributions relate.

(ii) Defined Benefits Plan

This represents unfunded gratuity scheme for its permanent employees.

Employees are entitled to gratuity benefit after completion of minimum five years of service in the company. The gratuity is calculated on the basis of last basic pay and is payable at the rate one month basic pay for every completed year of service. The gratuity scheme is yet to be approved by the

National Board of Revenue.

(iii) Insurance Scheme

Employees of the company are covered under personal accident insurance scheme.

18

A. HOQUE & CO.

G. KIBRIA & CO.


(iv) Number of Employees

There were 692 employees at the year ended 31st December, 2011.

Particulars

Managing Director

Adviser

Additional Managing Director

Executive Director

Deputy Managing Director

Assistant Managing Director

General Manager Cum Company Secretary

Senior General Manager

General Manager

Senior Deputy General Manager

Deputy General Manager

Assistant General Manager

Officers

Other Employees

Total

No. of Employees

1

3

25

4

1

1

2

1

6

9

17

50

422

150

692

(o)

(p)

Other Corporate Debt, Accounts Payable, Trade and Other Liabilities

These liabilities are carried at the anticipated settlement amount in respect of policies and services received, whether or not billed by the policyholder and the supplier.

Provisions

Provisions are liabilities of uncertain timings or amount. Provisions are recognized when the company has a present legal or constructive obligation as a result of past events. It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.

(q)

Earnings per Share (EPS)

The Company calculates earnings per share (EPS) in accordance with IAS 33 earnings per share" which has been shown on the face of statement of comprehensive income. The disclosure has been made in the Note 41 in respect of numerator (net profit) and denominator (weighted average number of shares) used in the calculation of basic EPS with necessary computation and reconciliation.

Basic Earnings

This represents earnings for the year attributable to ordinary shareholders, as there was no preference dividend, minority interest and extra ordinary items, the net profit for the year has been considered as fully attributable to the ordinary shareholders.

Diluted Earnings per Share

(r)

(s)

No diluted Earnings Per Share (EPS) is required to be calculated for the year as there was no scope for dilution during the year under review.

Reserve for Exceptional Losses

Provision for exceptional losses has been made during the year under audit.

Share of Public Sector Business

Company's Share of Public Sector business is accounted for in the year in which the complete statement of accounts from Sadharan Bima Corporation (SBC) is received.

During the year the company has included 4 (four) quarters of its share of the Public

Sector business as confirmed by the Sadharan Bima Corporation (SBC) in the following manner:

19

A. HOQUE & CO.


G. KIBRIA & CO.


Period Particulars of Quarter

1st July, 2010 to 30th Sept, 2010 3rd Quarter-2010

1st Oct., 2010 to 31st December, 2010 4th quarter of 2010

1st January, 2011 to 31st March, 2011 1st quarter of 2011

1st April, 2011 to 30th June, 2011 2nd quarter of 2011

Total

No.

1 (One)

1 (One)

1 (One)

1 (One)

4 (Four)

(t) Recognized Gains and Losses

No gain or loss was directly dealt with though the shareholders equity without being recognized in the Statement of Comprehensive Income.

Therefore, net profit after tax for the year is the total recognized gains.

(u) Historical Cost Income and Expenditure

As there was no extra ordinary item, there was no difference in profit from ordinary activities before taxation and the net profit before tax. Furthermore, as there was no revaluation of fixed assets in previous years and during the year under review, there was no factor like the differences between historical cost depreciation and depreciation on revalued amount, realization of revenue surplus on retirement or disposal of assets etc. Therefore, no separate note of historical cost profit and loss has been presented.

(v) Statement of Comprehensive Income

The results for the year were not materially affected by the following:

(a) transactions of a nature not usually undertaken by the company;

(b) circumstances of an exceptional or non-recurring nature;

(c) charges or credits relating to prior years.

7.00 Classified Summary of Assets

The valuation of all assets as at 31st December, 2011 as shown in the Statement of Financial

Position and in the classified summary of assets in Form AA annexed with the report has been reviewed and the said assets have been set-forth in the Statement of Financial Position at amount not exceeding their realizable or market value in aggregate.

8.00

Financial Instruments and Derivatives

Primary Financial Instruments (Financial Assets and Liabilities)

The disclosure of primary financial instruments carried at the Statement of Financial Position date alongwith the recognition methods and risks involved are summarized in Note 44 in accordance with the provisions of

Presentation."

IAS 32

Financial Instruments: "Disclosure and

9.00

Derivative Financial Instruments

The Company is not a party to any derivative contract at the Statement of Financial Position date, such as forward exchange contract, currency swap agreement or interest rate option contract to hedge currency exposure related to import of raw materials and others or principal and interest obligations of foreign currency loans.

10.00 Impairment

In accordance with the provisions of lAS 36 : Impairment of Assets, the carrying amount of non-financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated and impairment losses are recognized in statement comprehensive income. No such indication of impairment has been observed till to date.

11.00 Information by Industry Segments and Geographical Areas

Industry Segment Information

No mention is made because the company does not have any segment other than the general insurance business.

20

A. HOQUE & CO.

G. KIBRIA & CO.


Geographic Segment Information

Not applicable as the company does not have any business unit outside Bangladesh.

12.00 Reporting Currency

No Foreign Currency Transactions were transacted during the period and thus the conversion of Foreign Currency into Bangladeshi Taka Currency is not required during the year ended

31st December, 2011.

13.00 Comparative Information and Re-Arrangement thereof

Comparative information have been disclosed in respect of the year 2011 for all numerical information in the financial statements and also the narrative and descriptive information when it is relevant for understanding of the current year's financial statements.

Figures of the year 2010 have been rearranged whenever considered necessary to ensure comparability with the current year.

14.00 Transactions with Related Parties

During the year under review the Company did not carry out the transactions with the related parties in the normal course of business and on arm's length basis.

15.00 Events after Reporting Period

In compliance with the requirements of IAS 10: Events After Reporting Period, post Statement of Financial Position adjusting events that provide additional information about the company's position at the Statement of Financial Position date are reflected in the financial statements and events after Reporting Period that are not adjusting events are disclosed in the notes when material.

16.00 Approval of the Financial Statements

The financial statements were approved by the Board of Directors on 30th April, 2012.

17.00 Reporting Period

The Financial Statements of the Company cover a year from 1st January, 2011 to 31st

December, 2011 consistently.

18.00 Cash Flow Statement

Statement of Cash Flow is prepared principally in accordance with IAS 7 " Statement of Cash

Flow " and the Cash Flow from the operating activities have been presented under direct method as required by the Securities and Exchange Rules 1987 and considering the provisions of Paragraph 19 of IAS 7 which provides that " Enterprises are Encouraged to

Report Cash Flow from Operating Activities Using the Direct Method ".

19.00 Components of the Financial Statements

According to the components:

International Accounting Standards (IAS) 1 " Presentation and Preparation of

Financial Statements ", the complete set of Financial Statements includes the following

(i) Statement of Financial Position as at 31st December, 2011;

(ii)

(iii)

(iv)

Statement of Comprehensive Income for the year ended 31st December, 2011;

Income Appropriation Account for the year ended 31st December, 2011;

Revenue Accounts (Fire, Marine Cargo, Marine Hull, Motor, Miscellaneous Insurance

Revenue Account) for the year ended 31st December, 2011;

(v)

(vi)

Statement of Changes in Equity for the year ended 31st December, 2011;

Statement of Cash Flows for the year ended 31st December, 2011;

(vii) Accounting Policies and Explanatory Notes.

21

A. HOQUE & CO.

G. KIBRIA & CO.


STATEMENT OF FINANCIAL POSITION

CAPITAL AND LIABILITIES

1,68,00,000 Ordinary Shares of Tk. 10/- each fully paid up in cash

Composition of Shareholdings:

AMOUNT (TK.)

31-12-2011

AMOUNT (TK.)

31-12-2010

20.00 SHARE CAPITAL

AUTHORIZED SHARE CAPITAL Tk. 20,00,00,000 Tk. 20,00,00,000

2,00,00,000 Ordinary Shares of Tk. 10/= each. The denomination of Tk. 100/= has been converted into Tk. 10/= as per order of the Securities & Exchange Commission vide letter no.

SEC/CMRRCD/200-193/109, dated September 15, 2011.

21.00 ISSUED, SUBSCRIBED AND FULLY PAID UP CAPITAL

16,80,00,000

16,80,00,000

15,00,00,000

15,00,00,000

The composition of Shareholding position as of 31st December, 2011 are as follows:

Particulars

Sponsors / Director

General Public

Company

NRB [Non-Resident Bangladeshi]

All Investors Accounts

Total

Number of

Shareholders

26

5,868

Number of

Shares

62,96,400

84,09,954

% of

Shares

37.479

50.059

130

165

14,18,716

1,17,070

8.445

0.697

33 5,57,860 3.321

6,222 1,68,00,000 100.00

Distribution of Schedule:

The distribution Schedule of 31st December, 2011 showing the number of shareholders and their shareholding in percentages is disclosed below as a requirement of the "Listing

Regulation" of Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE).

Range of holdings in number of Shares

1 to 499

500 to 5000

5001 to 10000

10001 to 20000

20001 to 30000

30001 to 40000

40001 to 50000

50001 to 100000

100001 to 1000000

1000001 to 1000000000

Total

Number of

Shareholders

743

5,144

169

92

18

5

9

18

23

1

6,222

Number of Shares

81,334

47,19,446

11,60,830

12,17,990

4,32,720

1,78,330

4,25,390

13,70,680

59,58,880

12,54,400

1,68,00,000

% of Share

Capital

0.484

28.092

6.910

7.250

2.576

1.062

2.532

8.159

35.470

7.467

100.00

22.00 RESERVE OR CONTINGENCY ACCOUNT

This is made up as follows:

Tk. 9,65,43,929 Tk. 8,44,94,238

22.01 Reserve for Exceptional Losses

22.02 Income Appropriation Account

22.03 Investment Fluctuation Reserve

22.01 RESERVE FOR EXCEPTIONAL LOSSES


Opening Balance

Add: During the year

Tk. 7,04,68,889 Tk. 5,83,06,000

,, 2,35,75,040 ,, 2,36,88,238

,, 25,00,000 ,, 25,00,000

Tk. 9,65,43,929 Tk. 8,44,94,238

Tk. 7,04,68,889 Tk. 5,83,06,000

Tk. 5,83,06,000 Tk. 4,72,69,437

,, 1,21,62,889 ,, 1,10,36,563

Tk. 7,04,68,889 Tk. 5,83,06,000

This represents profit set-aside up to the year under review as expenses to meet exceptional losses. This reserve has been created as per requirement of paragraph 6(2) of 4th Schedule of the Income Tax Ordinance, 1984.

22

A. HOQUE & CO.

G. KIBRIA & CO.


22.02 INCOME APPROPRIATION ACCOUNT


Opening Balance

Add: Profit for the year

Less: Reserve & Provisions:



Provision for Income Tax

Prior Year Income Tax Adjustment

Deferred Tax Income

Bonus Share Issue

Tk. 2,35,75,040 Tk. 2,36,88,238

2,36,88,238

4,73,10,959

7,09,99,197

4,74,24,157

1,21,62,889

0

1,48,33,869

25,05,607

(78,210)

1,80,00,000

2,35,75,040

78,38,594

4,02,93,915

4,81,32,509

2,44,44,271

1,10,36,563

25,00,000

1,08,94,678

0

13,030

0

2,36,88,238

22.03 INVESTMENT FLUCTUATION RESERVE

This is as per last account.

Tk. 25,00,000 Tk. 25,00,000

23.00 BALANCE OF FUNDS AND ACCOUNTS Tk. 7,79,08,473 Tk. 7,24,23,606

This represents Reserve for un-expired risks provided against the Net Premium Income including Public Sector Business of the year at the rate of 40% on different classes of business except Marine Hull Insurance for which 100% as shown below:

CLASSES OF BUSINESS PERCENTAGE

Fire

Marine Cargo

Marine Hull

Motor

Miscellaneous

Total

40%

40%

100%

40%

40%

AMOUNT (TK.)

31-12-2011

4,16,80,511

1,75,20,223

1,09,975

1,77,62,992

8,34,772

7,79,08,473

AMOUNT (TK.)

31-12-2010

3,97,91,412

1,29,35,649

1,80,894

1,85,89,787

9,25,864

7,24,23,606

24.00 PREMIUM DEPOSITS ACCOUNT Tk. 67,88,828 Tk. 58,56,577

Balance on this account represents net premium received against cover notes for which no policy has been issued within 31st December, 2011.

25.00 SUNDRY CREDITORS INCLUDING Tk. 6,41,24,752 Tk. 5,85,57,260

PROVISION FOR EXPENSES AND TAXES

The balance is made as under:

Particulars 31-12-2011 31-12-2010

Salary and Allowances

Office Rent, Rates & Taxes

Telephone, Telex & Trunk Call

Electricity Charges

Audit Fees

Provident Fund Trust

Gratuity

General Public (Share Deposits Money)

Bills Payable

VAT on Premium

Tax Deducted at Source & VAT


Total

22,37,294

11,06,026

1,59,128

15,885

50,000

70,25,594

11,70,834

1,52,67,885

14,06,313

17,92,527

19,69,257

3,19,24,007

6,41,24,752

20,97,157

7,34,460

1,09,489

53,488

50,000

77,81,436

13,58,694

1,56,56,347

20,54,887

19,30,082

11,02,576

2,56,28,644

5,85,57,260

The unpaid amount of VAT has been subsequently deposited on 09-01-2012 and 15-01-2012.

23

A. HOQUE & CO.


G. KIBRIA & CO.


26.00 AMOUNT DUE TO OTHER PERSONS OR BODIES

CARRYING ON INSURANCE BUSINESS

Tk. 55,61,814 Tk. 31,42,905

This represents balance of account with various Private Sectors in respect of co-insurance transactions and amount payable to co-insurers. The break up of the above amount is noted below:

NAME OF THE PERSON OR BODIES

Agrani Insurance Co. Ltd.

Asia Insurance Company Ltd.

Bangladesh Co-operative Insurance Co. Ltd.

Central Insurance Company Ltd.

Desh General Insurance Company Ltd.

Eastland Insurance Co. Ltd.

Express Insurance Co. Ltd.

Green Delta Insurance Co. Ltd.

Global Insurance Ltd.

Janata Insurance Co. Ltd.

Meghna Insurance Co. Ltd.

Mercantile Insurance Co. Ltd.

Northern General Insurance Co. Ltd.

Prime Insurance Co. Ltd.

Pioneer Insurance Co. Ltd.

People's Insurance Co. Ltd.

Republic Insurance Company Ltd.

Rupali Insurance Company Ltd.

Sonarbangla Insurance Company Ltd.

Takaful Islami Insurance Ltd.

Total

AMOUNT (TK.)

31-12-2011

1,32,221

3,22,666

1,42,137

54,629

4,12,478

35,480

7,37,506

36,801

3,40,356

7,22,055

3,76,301

89,082

1,15,714

1,36,878

95,721

4,309

4,13,463

3,09,777

4,24,173

6,60,067

55,61,814

AMOUNT (TK.)

31-12-2010

1,19,446

0

1,42,137

20,134

72,122

0

4,62,686

1,25,193

0

5,51,247

3,76,301

0

1,15,714

1,36,878

76,090

0

70,789

3,09,777

83,817

4,80,574

31,42,905

It is noted that no balance confirmation letters on positive request method for the confirmation directly to us were issued against the amount due to other persons or bodies carrying on insurance business and accordingly we could not confirm the above balance.

27.00 DEFERRED TAX LIABILITY Tk. 1,11,092 Tk. 1,89,302

(a) Deferred Tax Liability are arrived at as follows:

Particulars 2011 2010

Book Value of Depreciable Fixed Assets

Less: Tax Base Value

Taxable Temporary Difference

Book Value of Gratuity Payable

Less: Tax Base Value

Deductable Temporary Difference

Net Taxable Temporary Difference

Effective Tax Rate

Deferred Tax Liability

3,98,33,243

3,95,71,849

2,61,394

0

0

0

2,61,394

42.50%

1,11,092

4,59,89,836

4,55,44,419

4,45,417

0

0

0

4,45,417

42.5%

1,89,302

(b) Deferred Tax Expenses / (Income) are arrived at as follows:

Particulars 2011 2010

Closing Deferred Tax Liabilities

Opening Deferred Tax Liabilities

Deferred Tax Expenses / (Income)

1,11,092

1,89,302

(78,210)

1,89,302

1,76,272

13,030

(a) Deferred Tax Income of 2011 Tk. 78,210.

This represents the increase in deferred tax liability in 2010 in comparison to 2009

(b) The effective income tax rate of 42.50% has been considered as this tax rate is applicable for publicly traded companies.

24

A. HOQUE & CO.


28.00 ESTIMATED LIABILITIES IN RESPECT OF

OUTSTANDING CLAIMS WHETHER DUE OR INTIMATED

The break up of the above amount is noted below:

G. KIBRIA & CO.


Tk. 3,31,53,244 Tk. 4,60,87,596

CLASSES OF BUSINESS

Fire

Marine Cargo

Motor

Miscellaneous

Total

PRIVATE

SECTOR

2,03,27,299

71,21,865

54,23,494

2,80,586

3,31,53,244

PUBLIC

SECTOR

TOTAL

31-12-2011

TOTAL

31-12-2010

0

0

0

0

2,03,27,299

71,21,865

54,23,494

2,80,586

2,44,74,605

1,20,88,417

93,73,944

1,50,630

0 3,31,53,244 4,60,87,596

PROPERTY AND ASSETS

29.00 INVESTMENTS -AT COST Tk. 90,00,000 Tk. 90,00,000

The above amount represents the value of 3 (Three) years National Investment Bonds at cost kept with Bangladesh Bank according to the provision of Section 7 (I) of Insurance Act (Act

IV of 1938 and 7th Schedule item 2 (f) of the said Act (Section 17 of the Insurance

Amendments Ordinance, 1984) as detailed below:

PARTICULARS AMOUNT (TK.)

31-12-2011

AMOUNT (TK.)

31-12-2010

9 Nos. 3 (Three) years National Investment Bonds at

Face Value of Tk. 10,00,000 each vide bearing no.

OK

-

3098 – 3105 &

PK

-000110 Date: 21-07-2008

90,00,000 90,00,000

30.00 INVESTMENT IN SHARES Tk. 1,76,71,355 Tk. 2,64,37,054

The market price of investment in shares as per requirement para 19 of BAS-25 have been shown as under:

Name of the Company

Becon Pharmaceuticals Ltd.

BRAC Bank Ltd.

BSRM Steel Ltd.

Eastern Bank Ltd.

Federal Insurance Co. Ltd.

First Security Bank Ltd.

Grameenphone Ltd.

ICB Islami Bank Ltd.

IBBL

KPCL

Lafarge Surma Cement Ltd.

Makson Spinning

Mercantile Bank Ltd.

Metro Spinning

Midas Finance

MTBL

Navana CNG

One Bank Ltd.

Premier Bank Ltd.

Shahjalal Islami Bank Ltd.

Summit Power

Sub Total

Face

Value

No. of

Shares

10.00 7,350

10.00 35,000

10.00

10.00

3,000

7,800

10.00 5,100

10.00 15,000

10.00 10,000

10.00

10.00 11,500

10.00

200

6,000

10.00 24,000

10.00

10.00

10.00 27,600

10.00

125

500

6,050

10.00 20,500

10.00

10.00

10.00

9,100

150

120

10.00

10.00

2,950

100

31-12-2011

Acquisition

Cost

Market Value

4,04,599.19

19,73,308.87

5,25,499.79

5,75,795.74

3,80,231.32

4,62,087.74

20,63,457.79

2,000.00

6,28,544.13

5,63,499.99

7,76,542.94

6,567.35

17,074.26

18,89,515.15

8,53,399.82

9,48,915.91

15,08,392.85

8,236.85

4,783.33

1,24,161.83

9,538.29

1,37,26,153.13 95,96,679.67

2,27,850.00

15,99,499.95

3,56,099.88

5,13,239.99

2,03,490.00

3,94,500.00

16,34,999.98

2,000.00

6,26,749.95

3,76,799.99

6,38,399.97

4,375.00

17,400.00

10,29,480.00

3,89,619.94

7,07,249.97

7,60,760.00

7,155.00

3,696.00

95,875.00

7,440.00

Consideration

Value

2,27,850.00

15,99,499.95

3,56,099.98

5,13,239.99

2,03,490.00

3,94,500.00

16,34,999.98

2,000.00

6,26,749.95

3,76,799.99

6,38,399.97

4,375.00

17,074.26

10,29,480.00

3,89,619.94

7,07,249.97

7,60,760.00

7,155.00

3,696.00

95,875.00

7,440.00

95,96,354.87

25

A. HOQUE & CO.


G. KIBRIA & CO.


Name of the Company

Unlisted Securities at cost:

GMG Airlines

Unique Hotel & Restaurant

Energy Prima Ltd.

Sub Total

Grand Total

Face

Value

No. of

Shares

50.00 50,000

160.00 20,000

95.00 25,000

31-12-2011

Acquisition

Cost

Market Value

25,00,000.00

32,00,000.00

23,75,000.00

80,75,000.00

25,00,000.00

32,00,000.00

23,75,000.00

80,75,000.00

Consideration

Value

25,00,000.00

32,00,000.00

23,75,000.00

80,75,000.00

2,18,01,153.00 1,76,71,679.67 1,76,71,354.87

The acquisition cost or market value which is less has been taken into consideration in valuation of Investment in Shares. The loss on realization of investment in shares has been directly charged to Statement of Comprehensive Income as per Second Schedule, Part-II,

Form-B of the Insurance Act, 1938.

31.00 INTEREST ACCRUED BUT NOT DUE

(On FDR & National Investment Bond)

Tk. 1,28,32,167 Tk. 1,90,63,950



31-12-2011

AMOUNT (TK.)

31-12-2010

Interest on FDR

Interest on 3 (Three) years National Investment Bonds

Total

1,00,90,917

27,41,250

1,28,32,167

1,70,87,700

19,76,250

1,90,63,950

32.00 AMOUNT DUE FROM OTHER PERSONS OR

BODIES CARRYING ON INSURANCE BUSINESS

Tk. 3,63,16,188 Tk. 4,46,51,397

The above amount represents the total receivable from various persons or bodies carrying on insurance business as co-insurance and reinsurance as on 31st December, 2011. The details of which are given below:

NAME OF PERSONS OR BODIES AMOUNT (TK.)

31-12-2011

AMOUNT (TK.)

31-12-2010

Asia Insurance Co. Ltd.

Bangladesh General Insurance Co. Ltd.

Bangladesh National Insurance Co. Ltd.

City General Insurance Company Ltd.

Crystal Insurance Co. Ltd.

Continental Insurance Co. Ltd.

Dhaka Insurance Co. Ltd.

Eastland Insurance Co. Ltd.

Federal Insurance Co. Ltd.

Islami Insurance Co. Ltd.

Islami Commercial Insurance Co. Ltd.

Karnaphuli Insurance Co. Ltd.

Purubi General Insurance Co. Ltd.

People’s Insurance Co. Ltd.

Phoenix Insurance Co. Ltd.

Pragati Insurance Co. Ltd.

Reliance Insurance Ltd

Standard Insurance Company Ltd.

United Insurance Co. Ltd.

Sadharan Bima Corporation

Total

0

1,05,561

84,735

89,857

15,309

1,06,702

39,270

0

1,51,018

1,099

1,73,727

1,01,495

35,433

0

26,615

12,18,750

2,77,630

2,507

9,281

3,38,77,199

3,63,16,188

1,54,250

16,162

3,55,217

1,12,104

15,309

25,781

39,270

29,153

2,40,997

1,099

1,85,411

1,11,495

35,433

39,216

3,47,872

10,41,768

1,24,081

2,507

44,160

4,17,30,112

4,46,51,397

26

A. HOQUE & CO.

G. KIBRIA & CO.


It is noted that balance confirmation letters on positive request method for the confirmation directly to us were issued against the amount due from other persons or bodies carrying on insurance business and accordingly we have obtained all the letters as were despatched to the parties for confirmation and we have found thereon none of the parties were in disagreement with the balances as per records of the books of accounts of the Company.

33.00 SUNDRY DEBTORS (INCLUDING ADVANCES ,

DEPOSITS & PREPAYMENTS)

Tk. 5,56,26,262 Tk. 2,62,29,966

The break up of the above is as under:

PARTICULARS

Advance against Floor Purchase

Advance against Salary & Allowances

Advance against Office Rent

Advance against Traveling

Advance Income Tax and deducted at sources

Security Deposits (Telephone & CDBL)

Advance against Purchase

Total

AMOUNT (TK.)

31-12-2011

2,56,58,000

10,30,198

62,01,007

0

2,04,98,866

3,79,000

18,59,191

5,56,26,262

AMOUNT (TK.)

31-12-2010

0

4,48,318

56,51,704

26,824

1,82,77,707

3,79,000

14,46,413

2,62,29,966

(a) The advance income tax deducted at source is called for adjustment against the assessment of assessed tax of the Company;

(b) No amount was due by directors, managers and other officer of the Company and any of them severally or jointly with any other person except as stated above;

(c) No amount was due by the related party.

34.00 CASH AND BANK BALANCES

The above amount is made up as follows:

Tk. 27,99,00,102 Tk. 24,80,21,348


31-12-2011

AMOUNT (TK.)

31-12-2010

Fixed Deposit Receipts

Cash balance with BO A/c. 1202630016927226

Short Term Deposit Account

Jamuna Bank -STD A/c. 32000164-IPO

Jamuna Bank -STD FC Account-IPO

Current Accounts

Cash in Hand

Stamps in Hand

Cash in Transit

Total

20,96,90,522

89,057

3,64,46,403

1,39,12,824

8,94,135

11,31,376

1,19,57,651

17,12,000

40,66,132

18,29,60,366

6,63,541

3,05,09,585

1,51,33,127

8,90,836

10,92,797

1,09,17,768

5,50,250

53,03,078

27,99,00,102 24,80,21,348

(i) Fixed Deposit Receipts:

The detailed bank wise position of Fixed Deposit Receipt is as under:

Name of Bank

AB Bank Ltd.

Al-Arafah Islami Bank Ltd.

Agrani Bank Ltd.

Bangladesh Krishi Bank

Bank Asia Ltd.

BASIC Bank Ltd.

Bangladesh Com. Bank Ltd.

The City Bank Ltd.

Total (Tk.)

31-12-2011

1,99,36,732

1,35,73,376

7,00,395

1,77,182

64,09,458

12,01,292

73,67,577

0

Total (Tk.)

31-12-2010

1,45,50,000

86,00,000

6,50,000

1,00,000

52,00,000

15,00,000

67,60,000

10,00,000

27

A. HOQUE & CO.


Name of Bank

Dhaka Bank Ltd.

Dutch Bangla Bank Ltd.

Exim Bank Ltd.

First Security Bank Ltd.

HSBC

ICB Islami Bank Ltd.

IFIC Bank Ltd.

Islami Bank (BD) Ltd.

Jamuna Bank Ltd.

Janata Bank Ltd.

Mercantile Bank Ltd.

Mutual Trust Bank Ltd.

National Bank Ltd.

NCC Bank Ltd.

One Bank Ltd.

Premier Bank Ltd.

Prime Bank Ltd.

Pubali Bank Ltd.

RKUB Ltd.

Reliance Finance Ltd.

Rupali Bank Ltd.

Shahjalal Islami Bank Ltd.

Social Investment Bank Ltd.

Sonali Bank Ltd.

Southeast Bank Ltd.

Standard Bank Ltd.

The Trust Bank Ltd.

United Commercial Bank

United Leasing Co. Ltd.

Uttara Bank Ltd.

Total

G. KIBRIA & CO.


Total (Tk.)

31-12-2011

45,19,466

10,36,000

1,24,69,432

1,99,999

15,50,821

24,62,230

83,33,609

74,43,338

2,81,02,085

11,20,678

27,21,818

89,13,984

1,67,84,649

36,24,721

42,69,620

10,30,699

40,77,814

55,77,826

18,74,500

10,00,000

12,71,249

49,47,778

39,14,830

11,75,950

1,02,26,434

31,98,159

4,99,999

1,65,34,058

5,42,750

9,00,000

Total (Tk.)

31-12-2010

20,96,90,522 18,29,60,366

37,50,000

15,00,000

1,34,00,000

2,00,000

50,00,000

40,50,000

67,00,000

55,00,000

2,00,50,000

10,00,000

27,00,000

49,50,000

1,48,50,000

31,00,000

44,00,000

10,00,000

45,00,000

40,00,000

18,00,000

10,00,000

12,50,000

44,00,366

32,00,000

10,00,000

77,50,000

30,00,000

5,00,000

1,91,50,000

5,00,000

4,00,000

(ii) Short Term Deposit, Current Account and Cash in hand

The branch wise balance position of Short Term Deposit Accounts, Current Accounts & Cash in Hand are as under:

Name of the Branch

Agrabad

Arichaghat

B.B. Avenue

Bangshal

Barisal

Bogra

Chuadanga

Chowmuhani

Comilla

Dewanhat

Dilkusha

Dilkusha Corporate Branch

Dinajpur

Faridpur

Gabtali

Gaibandha

Head Office Booth

Hatkhola

Cash in Hand

3,17,707

48,118

7,75,007

29,694

1,05,770

4,46,396

2,40,584

2,00,539

4,82,314

1,47,308

18,535

4,56,100

94,664

35,067

1,53,134

4,311

5,76,434

0

Current Account STD Account

134

0

1,353

2,346

0

12,203

16

0

95,472

13,495

3,247

1,560

730

0

1,304

0

7,529

0

5,46,716

75,417

7,18,366

2,29,086

1,92,181

1,67,878

1,91,237

2,77,338

6,30,957

3,66,527

6,05,031

12,43,534

1,57,673

70,922

3,50,496

10,44,321

15,61,026

1,32,841

28

A. HOQUE & CO.


Name of the Branch

Imamgonj

Jamalpur

Jessore

Jhenaidah

Jubilee Road

Kawran Bazar

Khatungonj

Kurigram

Kushtia

Laldighi

Local Office

Local Corp.

Moghbazar

Motijheel

Moulvibazar

Mymensingh

Naogaon

Narayangonj

Natore

Nawabpur

Nayabazar

Nayapaltan

Pabna

Principal

Rangpur

Sayedpur

Sylhet

Sena Kalyan

Sadarghat

Tangail

Gulshan

Head Office

Total

Cash in Hand

2,47,525

4,61,851

96,254

2,01,595

33,467

1,93,929

2,09,329

1,09,473

44,238

1,53,212

21,305

30,633

5,91,187

46,898

1,59,690

81,298

19,392

4,33,071

3,32,130

2,23,866

28,977

69,429

61,063

8,36,005

7,68,824

1,61,299

1,13,067

4,89,040

1,81,752

2,29,590

3,90,888

8,05,700

1,19,57,651

G. KIBRIA & CO.


Current Account

0

0

2,645

9,998

57,732

56,161

6,972

1,14,574

0

915

412

460

0

6,217

390

153

1,288

5,40,530

1,152

495

1,068

1,605

26

21,466

1,082

1,355

6

58,118

6,879

0

105

1,00,175

11,31,376

STD Account

77,429

3,83,818

19,17,720

14,54,298

2,01,570

21,13,599

10,29,094

5,92,166

35,620

12,95,115

3,53,181

3,29,455

1,56,554

11,25,421

1,22,440

2,77,392

3,73,749

59,60,014

13,46,791

1,06,624

1,43,548

4,03,257

5,59,463

3,00,480

4,08,701

11,22,797

3,09,270

8,59,815

16,99,077

10,55,327

6,29,611

11,41,439

3,64,46,403

Cash balances have been verified with branch statements and have also been certified by the Head

Office management. Current account and the STD Account are in agreement with bank balances and in case of difference it was duly reconciled.

35.00 OTHER ACCOUNTS


Tk. 4,08,46,058 Tk. 4,73,47,769

35.01 Fixed Assets (At Cost Less Depreciation. Note 36.01)

35.02 Stock of Printing & Stationery

3,98,33,244

10,12,814

4,59,89,836

13,57,933

4,08,46,058 4,73,47,769

35.01 FIXED ASSETS -AT COST LESS DEPRECIATION

This is arrived at as under:

Cost as on 01-01-2011/2010

Add: Addition during the year

Less: Sale Adjustment

Less: Depreciation:

Dep. as on 01-01-2011/2010

Deprecation charged during the year

Less: Deprecation Adjusted

Balance as on 31-12-2011/2010

Tk. 3,98,33,244 Tk. 4,59,89,836

10,69,27,082

19,90,892

25,00,500

9,43,96,548

1,46,17,321

20,86,787

10,64,17,474 10,69,27,082

6,09,37,246 5,41,79,294

72,25,882

15,78,898

85,26,876

17,68,924

6,65,84,230 6,09,37,246

3,98,33,244 4,59,89,836

29

A. HOQUE & CO.


35.02 STOCK OF PRINTING & STATIONERY


Balance as on 01-01-2011/2010

Add: Purchased during the year

Less: Consumed during the year

Balance as on 31-12-2011/2010

36.00 MISCELLANEOUS INCOME


Gain on Sale of Assets

Interest on IPO Account

37.00 INTEREST ON FDR, STD AND NIB


PARTICULARS

Interest on STD Account

Interest on FDR

Interest on National Investment Bond

Total

38.00 ALLOCATION OF MANAGEMENT

EXPENSES (APPLICABLE TO FUND)

NAME OF

BUSINESS

APPORTIONED

EXPENSES

Fire

Marine Cargo

Marine Hull

Motor

Miscellaneous

Total

2,47,89,824

82,52,721

1,58,182

75,87,886

32,57,056

4,40,45,669

DIRECT

CHARGE

6,59,970

0

0

2,50,140

20,028

9,30,138

G. KIBRIA & CO.


Tk. 10,12,814 Tk. 13,57,933

13,57,933

20,86,513

34,44,446

24,31,632

10,12,814

17,98,789

21,22,644

39,21,433

25,63,500

13,57,933

Tk. 8,30,453 Tk. 36,85,093

Tk. 3,78,398 Tk. 8,64,559

,, 4,52,055 ,, 28,20,534

Tk. 8,30,453 Tk. 36,85,093

Tk. 2,09,26,891 Tk. 2,12,06,248

AMOUNT (TK.)

31-12-2011

7,42,245

1,94,19,646

7,65,000

2,09,26,891

AMOUNT (TK.)

31-12-2010

7,36,922

1,97,04,326

7,65,000

2,12,06,248

Tk. 4,49,75,807 Tk. 4,34,90,790

AMOUNT (TK.)

31-12-2011

AMOUNT (TK.)

31-12-2010

2,54,49,794

82,52,721

1,58,182

78,38,026

32,77,084

2,53,46,784

66,73,797

2,29,532

85,37,111

27,03,566

4,49,75,807 4,34,90,790

39.00 GROSS PREMIUM INCOME Tk. 26,90,74,089 Tk. 25,62,10,459

Class wise Private & Govt. Gross Premium Income is as follows:

CLASS OF BUSINESS

Fire

Marine Cargo

Marine Hull

Motor

Miscellaneous

Total

DIRECT GOVT. AMOUNT (TK.)

2011

AMOUNT (TK.)

2010

14,00,84,360 30,18,900 14,31,03,260 14,62,18,297

5,02,86,845 1,14,61,231 6,17,48,076 4,30,92,042

8,08,500

4,33,74,238

4,24,360

10,46,662

50,35,746 1,55,33,247

12,32,860

4,44,20,900

1,85,68,993

13,21,783

4,64,96,516

1,90,81,821

23,95,89,689 2,94,84,400 26,90,74,089 25,62,10,459

30

A. HOQUE & CO.


40.00 CASH AND CASH EQUIVALENT


PARTICULARS

Fixed Deposit Receipts

Short Term Deposits Account

Cash Balance with BO Account-1202630016927226

Jamuna Bank STD A/C. No. 320000164(IPO)

Jamuna Bank FC Accounts (IPO)

Current Account

Cash in Hand

Cash in Transit

Stamp in hand

Total

G. KIBRIA & CO.


Tk. 27,99,00,102 Tk. 24,80,21,348

AMOUNT (TK.) 2011 AMOUNT (TK.) 2010

20,96,90,522

3,64,46,403

89,057

1,39,12,824

8,94,135

11,31,376

1,19,57,651

40,66,132

17,12,000

27,99,00,102

18,29,60,366

3,05,09,585

6,63,541

1,51,33,127

8,90,836

10,92,797

1,09,17,768

53,03,078

5,50,250

24,80,21,348

41.00 EARNINGS PER SHARE (EPS) AS PER IAS 33

Basic Earnings per Share (EPS)

Basic EPS = Earnings Attributable to Ordinary Shareholders

(Net profit after tax and reserve for exceptional losses)

Weighted Average No. of Shares Outstanding during the year

Computation of Earnings Attributable to Ordinary Shareholders:

Net Profit before Tax

Less: Provision for Income Tax

Less: Provision for Income Tax @ 42.5%

on Reserve for Exceptional Losses

Tk. 4,73,10,959 Tk. 4,02,93,915

Tk. 1,48,33,870 Tk. 1,09,07,708

Tk. 51,69,228 Tk. 47,86,357

Tk. 2,00,03,098 Tk. 1,56,94,065

Tk. 2,73,07,861 Tk. 2,45,99,850

Computation of weighted average number of Shares Outstanding.

Date

Opening

During the year

Total

No. of Shares

Issued

1,50,00,000

18,00,000

1,68,00,000

= =

= Tk. 1.63 approx. = Tk. 1.64 approx.

Period

01-01-2011-

31-12-2011

01-01-2011-

31-12-2011

Days

365

365

Weight

365/365

365/365

Weighted average no.

1,50,00,000

18,00,000

1,68,00,000

42.00 CALCULATION OF PROVISION FOR INCOME TAX


PARTICULARS AMOUNT

(TK.) 2011

AMOUNT

(TK.) 2010

Profit before Tax

Less: Reserve for Exceptional Losses

Profit on Sales of Shares

Capital Gain

Profit other than capital gain and sale of shares

Tax on profit other than capital gain and sale of shares @ 42.5%

Tax on profit of sale of shares @ 5%

Tax on capital gain @ 15%


4,73,10,959 4,02,93,915

1,21,62,889 1,10,36,563

0

3,78,398

34,71,846

8,64,559

1,25,41,287 1,53,72,968

3,47,69,672 2,49,20,947

1,47,77,110 1,05,91,402

0

56,759

1,73,592

1,29,684

1,48,33,869 1,08,94,678

In our opinion, the actual provision for Income Tax should be made into accounts.

31

A. HOQUE & CO.

G. KIBRIA & CO.


43.00 INTRINSIC VALUE OR NET ASSETS VALUE

The Intrinsic Value or Net Assets Value of Provati Insurance Co. Ltd. is given below:

Particulars Amount (Tk.)

31-12-2011

Amount (Tk.)

31-12-2010

A. Assets:

Investment at cost


Interest Accrued but not due

Amount due from other persons or bodies carrying on Insurance Business

Sundry Debtors (Including Advances, Deposits & Prepayments)

Cash and Bank Balances

Other Accounts (Fixed Assets & Stock of Stationery)

Total

90,00,000

1,76,71,355

1,28,32,167

3,63,16,188

5,56,26,262

27,99,00,102

4,08,46,058

45,21,92,132

B. Liabilities:

Balance of Funds and Accounts

Premium Deposit Account

Sundry Creditors (Including provision for expenses and Taxes)

Amount due to other persons or bodies carrying on Insurance Business

Deferred Tax Liability

Estimated Liabilities in respect of outstanding claims whether due or intimated

Total

Net Assets (A-B)

7,79,08,473

67,88,828

6,41,24,752

55,61,814

1,11,092

3,31,53,244

18,76,48,203

26,45,43,929

No. of Shares

Intrinsic Value / Net Assets Value per Share

1,68,00,000

15.75

90,00,000

2,64,37,054

1,90,63,950

4,46,51,397

2,62,29,966

24,80,21,348

4,73,47,769

42,07,51,484

7,24,23,606

58,56,577

5,85,57,260

31,42,905

1,89,302

4,60,87,596

18,62,57,246

23,44,94,238

1,50,00,000

15.63

We have examined the above calculation of Net Assets Value (NAV) of the Company which appears to be correct.

44.00 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURE UNDER IAS 32 "FINANCIAL

INSTRUMENTS: DISCLOSURE AND PRESENTATION ".

Setout below is a year-ended balance of carrying amounts (book value) of all financial assets and liabilities (Financial Instruments):

Particulars Non Interest

Bearing

Total

Financial Assets

National Investment Bonds


Investment in FDR

Accounts Receivable

Cash and Cash Equivalents

Total

Financial Liabilities

Outstanding Claims

Creditors

Deferred Tax Liabilities

Total

Net Financial Assets/Liabilities

0

0

0

5,56,26,262

1,40,72,220

6,96,98,482

3,31,53,244

3,22,00,745

0

6,53,53,989

43,44,493

90,00,000

1,76,71,681

20,96,90,522

5,56,26,262

6,84,97,579

36,04,86,044

3,31,53,244

3,22,00,745

0

6,53,53,989

29,51,32,055

45.00

RELATED PARTY TRANSACTIONS-DISCLOSURE UNDER IAS 24 "RELATED PARTY DISCLOSURE "

During the year under review the Company did not carry out the transactions with the related parties in the normal course of business and on arm's length basis.

46.00 PAYMENT / PERQUISITES TO DIRECTORS

No amount of money was spent by the Company for compensating any member of the Board for services rendered other than Board Meeting Fee.

32

A. HOQUE & CO.


47.00 CAPITAL EXPENDITURE COMMITMENT

There was no commitment for capital expenditure and also not incurred or provided for the year ended 31st December, 2011.

48.00 CONTINGENT LIABILITIES

The Company is contingently liable as on 31st December, 2011 on account of Income Tax, the details of which are given below:

CONTINGENT TAX LIABILITY :

Accounting

Year

2000

Assessment

Year

2001-2002

Assessed

Income

(Loss)

Tax

Demanded on Assessed

Income

Tax Paid in

Cash and

Deducted at Source

Remarks

1,48,28,460

1,05,98,470

66,89,747

45,40,415

13,10,153 Writ petition has been filed before the Supreme Court.

3,25,648

2,54,26,930 1,12,30,162 16,35,801

Do 2001

Total

2002-2003

49.00 CREDIT FACILITY NOT AVAILED

There was no credit facility available to the Company under any contract and also not availed as of 31st December, 2011 other than trade credit available in the ordinary course of business.

50.00 SUBSEQUENT EVENTS-DISCLOSURES UNDER IAS 10 "EVENTS AFTER THE REPORTING

PERIOD "

There were no non-adjusting post Statement of Financial Position events of such importance, non disclosure of which would affect the ability of the users of financial statements to make proper evaluations and decisions.

33

G, nK GÛ †Kvs - Provati Insurance Company Ltd.

A. HOQUE & CO

wR, wKewiqv GÛ †Kvs

G. KIBRIA & CO.

Investment in FDR and Shares

IAS 2

Cash and Cash Equivalents

Earnings per Share (EPS)

Basic Earnings

Diluted Earnings per Share

IAS 32

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