TAKAFUL PAKISTAN LIMITED QUARTERLY REPORT MARCH 31, 2017

Transcription

1 TAKAFUL PAKISTAN LIMITED QUARTERLY REPORT MARCH 31, 2017

2 Takaful Pakistan Limited Quarterly Report March 2017 CONTENTS Corporation Information 03 Vision, Mission and Ambition 05 Management Team 06 Branches 06 Director s Report 07 Financial Statements 09 2

3 Takaful Pakistan Limited Quarterly Report March 2017 CORPORATION INFORMATION Directors Chief Executive Officer Chief Financial Officer and Company Secretary Shariah Advisor Auditor Legal Advisors Syed Abdul Razzaq (Chairman) Syed Tariq Husain Mr. Ahmad Shuja Kidwai Mr. Haseeb Ahmed Dr. Mumtaz A. Hashmi Mr. Aadil Saleh Mr. Ashraf Ali Velji Syed Tariq Husain Muhammad Irfan Mufti Sajjad Ashraf Usmani Riaz Ahmed and Co. Chartered Accountants K- Legal Advocates, Consultants, Attorneys Mohsin Tayebaly & Co. Corporate Legal Consultants, Barristers & Advocates High Courts & Supreme Court Head office 6th floor, Business Centre, Plot No 19-1-A, Block -6, P.E.C.H.S., Shahrah-e-Faisal, Karachi-75400, Pakistan. UAN : (021) Tel : (+92-21) (10 Lines) Fax : (+92-21) info@takaful.com.pk Website : 3

4 Takaful Pakistan Limited Quarterly Report March 2017 Bankers Meezan Bank Limited Bank Islami Pakistan Limited Dubai Islamic Bank Limited Al Baraka Bank (Pakistan) Limited Habib Bank Limited (Islamic Banking Division) Faysal Bank Limited (Islamic Banking Division) Askari Bank Limited ( Islamic Banking Division) Bank AlFalah Limited (Islamic Banking Division) Habib Metropolitan Bank (Islamic Banking Division) National Bank of Pakistan (Islamic Banking Division) Bank of Khyber (Islamic Banking Division) UBL (Islamic Banking Division) NRSP Micro Finance Bank Limited (Islamic Banking Division) BOARD COMMITTEES Audit Committee Syed Abdul Razzaq (Chairman) Dr. Mumtaz A. Hashmi Mr. Ashraf Ali Velji Human Resource Committee Aadil Saleh (Chairman) Ahmed Shuja Kidwai Dr. Mumtaz A. Hashmi Investment Committee Mr. Ashraf Ali Velji (Chairman) Syed Tariq Husain Syed Abdul Razzaq 4

5 Takaful Pakistan Limited Quarterly Report March 2017 OUR VISION To spread Takaful benefits beyond borders, beyond Time! OUR MISSION To deliver Takaful as a viable alternative to conventional insurance. To become the top-of-the-mind Takaful brand for our Participants in terms of competitiveness, service standards and business ethics To give value for money to our shareholders and make Takaful Pakistan their prized asset. To become an ideal organization for our employees that encourages them to achieve self-actualization and growth. To contribute positively and proactively for the welfare of our society at large as well as for the preservation of our environment. OUR AMBITION To be a role model for the contemporary insurance industry and eventually bring it in conformity with the Shariah compliant Takaful mode of insurance. 5

6 Takaful Pakistan Limited Quarterly Report March 2017 MANAGEMENT TEAM Syed Tariq Husain Muhammad Irfan Moeen ud Din Raza Ali Ghulam Mustafa Jawwad Bin Yousuf Muhammad Ayaz Ikram Ullah Khan Rana Muhammad Javed Tahera Fatima Chief Executive Officer Chief Financial Officer and Company Secretary Branch Head Lahore Branch Head Peshawar Branch Head Faisalabad Head of Motor & Accident Underwriting Head of Fire / Engineering and Administration Head of Marine Underwriting Head of Claims Head of Retakaful BRANCHES / OFFICES Branch Karachi Lahore Peshawar Faisalabad Branch Address 6th floor, Business Centre, Plot No 19-1-A, Block -6, P.E.C.H.S., Shahrah-e-Faisal, Karachi. UAN: (021) Fax: (021) E/1, Main Boulevard Gulberg-III, Lahore. UAN: (042) Fax: (042) th Floor, State Life Building, 34-The Mall, Peshawar Cantt, Peshawar. UAN: (091) Fax: (091) Office # 3, 2nd floor, Wahab Centre, Main Susan Road, Faislabad. UAN: (041) Fax: (041)

7 Plot No 19-1-A, 6th Floor, Business Centre, Block-6, P.E.C.H.S., Shahrah-e-Faisal, Karachi (Pakistan) UAN: (+92-21) Fax: (+92-21) Takaful Pakistan Limited Directors Report to the members The Board of Directors is pleased to present before you the un-audited financial statements of the Company for three months period ended 31 st March Business overview: The results for three months are summarized below: 31 March 31 March (Rupees in Thousands) Gross Written Contribution 46,486 79,883 Net Contribution 38,685 71,606 Underwriting results (1,659) (2,605) PTF s Investment Income - net of Mudarib Fee 1,236 1,450 Net Deficit Participant s Takaful Fund (419) (1,146) SHF s Investment Income 3,853 2,899 Mudarib Share of PTF Investment Income Net Profit - Share holders Fund 5,208 7,191 Earnings Per Share Share holders Fund (Rs.) Paid up Capital Securities and Exchange Commission of Pakistan vide its SRO dated 18 th August 2015 increased the Minimum Paid up Capital Requirement for Non-Life Insurance/Takaful Companies from Rs. 300 million to Rs. 500 million as per the following schedule: By 30 June 2016 By 31 December 2016 By 30 June 2017 By 31 December 2017 Rupees 350 million 400 million 450 million 500 million 7

8 Plot No 19-1-A, 6th Floor, Business Centre, Block-6, P.E.C.H.S., Shahrah-e-Faisal, Karachi (Pakistan) UAN: (+92-21) Fax: (+92-21) The Company in its 11 th Annual General Meeting held on 28 th April 2017 has resolved to increase the Paid up Capital to required level of Rs 500 million. The Company is finalizing the process of arranging commitment from sponsors and underwriters in connection with the above injection of further required Capital of Rs. 200 million. Your directors would like to place on record their highest appreciation to the field force, Officers and staff of the Company for the dedicated efforts in a difficult operating environment. Your Directors would also like to thank the Securities and Exchange Commission of Pakistan and all our re takaful operators for their continued guidance and support. On behalf of the Board of Directors 8

9 TAKAFUL PAKISTAN LIMITED BALANCE SHEET AS AT 31 MARCH 2017 SHARE CAPITAL AND RESERVES Authorised share capital 70,000,000 (31 December 2016: 70,000,000) ordinary shares of Rs. 10 each Note 31 December AS AT 31 MARCH Shareholders' Participants' Aggregate Aggregate Fund Takaful Fund (Rupees) ,000, ,000, ,000,000 Issued, subscribed and paid-up share capital 300,000, ,000, ,000,000 Accumulated losses (80,422,056) - (80,422,056) (85,630,516) Qarda-e-hasna to waqf (35,254,680) - (35,254,680) (34,835,319) 184,323, ,323, ,534,165 WAQF / PARTICIPANTS' TAKAFUL FUND (PTF) Ceded money - 500, , ,000 Accumulated deficit - (35,254,680) (35,254,680) (34,835,319) Qard-e-hasna from Shareholders' Fund - 35,254,680 35,254,680 34,835, , , ,000 Underwriting provisions Provision for outstanding claims (including IBNR) - 97,974,890 97,974, ,271,947 Provision for unearned contributions - 68,328,573 68,328,573 73,195,413 Contribution deficiency reserve - 2,605,153 2,605,153 2,305,153 Unearned re-takaful rebate - 2,586,988 2,586,988 3,345,497 Total underwriting provisions - 171,495, ,495, ,118,010 - Creditors and accruals Contributions received in advance - 3,089,767 3,089,767 1,073,312 Amounts due to takaful/re-takaful companies - 93,530,454 93,530,454 84,398,303 Unearned wakala fees 27,331,429-27,331,429 29,278,165 Wakala fees payable - 17,007,348 17,007,348 23,612,843 Mudarib fees payable - 3,865,031 3,865,031 3,452,972 Accrued expenses 1,394,651-1,394, ,485 Other creditors and accruals 6 54,432,228 10,670,693 65,102,921 46,383,292 83,158, ,163, ,321, ,160,372 83,158, ,658, ,817, ,278,382 TOTAL EQUITY AND LIABILITIES 267,481, ,158, ,640, ,312,547 (Continued) TAKAFUL PAKISTAN LIMITED BALANCE SHEET 9

10 AS AT 31 MARCH 2017 Note 31 December AS AT 31 MARCH Shareholders' Participants' Aggregate Aggregate Fund Takaful Fund (Rupees) Cash and bank deposits Cash and other equivalents 100, , , ,847 Current and saving accounts 10,832,111 24,076,911 34,909,022 24,491,127 Deposits maturing within 12 months 94,380,000 68,700, ,080, ,109, ,312,812 93,203, ,516, ,131,974 Long term deposits 1,718,034-1,718,034 1,718,034 Investments 8 114,518,460 67,609, ,127, ,806,121 Current assets - others Contributions due but unpaid - 26,369,929 26,369,929 19,345,273 Amounts due from other takaful / retakaful companies - 3,275,982 3,275,982 3,272,859 Salvage recoveries accrued - 750, , ,000 Taxation - payment less provision 8,067,871-8,067,871 7,893,844 Accrued investment income 2,005,962 2,024,047 4,030,008 6,586,726 Re-takaful recoveries against outstanding claims - 20,761,075 20,761,075 26,177,730-17,007,348 23,612,843 Wakala fees receivable 17,007,348 Mudarib fees receivable 3,865,031-3,865,031 3,452,972 Deferred wakala fees - 27,331,429 27,331,429 29,278,165 Deferred commission expense 2,591,181-2,591,181 3,722,575 Prepayments 3,200,000 12,094,981 15,294,981 18,899,381 Sundry receivables 2,643,309 46,739,145 49,382,454 30,242,486 39,380, ,346, ,727, ,234,854 Fixed assets Tangibles Leasehold improvements 1,430,377-1,430,377 1,540,377 Furniture and fixtures 1,736,388-1,736,388 2,046,388 Office equipment 1,888,785-1,888,785 2,038,785 Computers 617, , ,114 Motor vehicles 878, ,900 1,028, ,551,564-6,551,564 7,421,564 TOTAL ASSETS 267,481, ,158, ,640, ,312,547 The annexed notes from 1 to 12 form an integral part of these financial statements. Chairman Director Director Chief Executive Officer cash 87,016, ,363,186 other than cash 480,624, ,949,361 39,675,062 10

11 TAKAFUL PAKISTAN LIMITED PROFIT AND LOSS ACCOUNT FOR THE QUARTER ENDED 31 MARCH 2017 Fire and property damage Marine, aviation and transport 31 March March 2016 Motor Health Miscellaneous Aggregate Aggregate (Rupees) PARTICIPANTS' TAKAFUL FUND (PTF) Net contribution revenue 1,984,060 2,080,472 25,848,182 8,696,041 76,114 38,684,869 71,605,849 Net claims 488,829 (84,242) (12,524,956) (5,736,378) 123,131 (17,733,616) (38,761,842) Wakala fee (2,979,699) (2,508,333) (11,498,953) (3,478,416) (75,840) (20,541,242) (32,772,641) Direct expenses (6,195) (12,747) (4,555,839) - (46,743) (4,621,524) (8,468,000) Retakaful rebate earned 1,528,707 1,292, ,018 2,852,720 2,791,405 Contribution deficiency reversal/(charge) (300,000) (300,000) 3,000,000 Net underwriting results 1,015, ,145 (2,731,565) (818,754) 107,680 (1,658,793) (2,605,229) Investment income 1,648,234 1,933,440 Less: Mudarib's share (412,059) (483,360) Net investment income 1,236,175 1,450,080 Other income 4,811 13,888 Bank charges (1,554) (4,343) Deficit before tax (419,361) (1,145,604) Provision for taxation - - Total deficit transferred to balance of Waqf / Participants' Takaful Fund (419,361) (1,145,604) SHAREHOLDERS' FUND (SHF) Wakala fee 20,541,242 32,772,641 Commission expense (2,639,812) (3,737,467) Management expenses 10 (11,177,460) (15,821,110) 6,723,969 13,214,064 Mudarib's share of PTF investment income 412, ,360 Investment income 3,853,185 2,898,841 Gain/(loss) on sale of fixed assets 964,568 - Other income 332, ,918 General and administration expenses 11 (6,564,541) (8,883,293) Profit for the year before taxation 5,721,991 7,989,889 Provision for taxation - Current (513,531) (798,833) Profit after tax 5,208,460 7,191,056 Earnings per share-basic and diluted The annexed notes from 1 to 12 form an integral part of these financial statements. Chairman Director Director Chief Executive Officer - 3 6,449,000 4,789, ,659,901 11

12 TAKAFUL PAKISTAN LIMITED STATEMENT OF CHANGES IN EQUITY / FUND FOR THE QUARTER ENDED 31 MARCH, 2017 SHAREHOLDERS' FUND Issued, subscribed and paid up share Accumulated loss Qard-e-Hasna Total capital (Rupees) Balance as at 31 December ,000,000 (107,391,175) (20,238,961) 172,369,864 Profit for the quarter ended 31 March ,191,056-7,191,056 Balance as at 31 March ,000,000 (100,200,119) (20,238,961) 179,560,920 Total comprehensive income for the nine month ended 31 December 2016 Profit after tax for the period - 14,007,250-14,007,250 Other compreshensive income - 562, ,353 Total comprehensive income - 14,569,603-14,569,603 Transaction with owners - Qard-e-Hasna contributed to Waqf* - - (14,596,358) (14,596,358) Balance as at 31 December ,000,000 (85,630,516) (34,835,319) 179,534,165 Total comprehensive income for the three months ended 31 March 2017 Profit after tax for the period - 5,208,460-5,208,460 Other compreshensive income Total comprehensive income - 5,208,460-5,208,460 Transaction with owners - Qard-e-Hasna contributed to Waqf* - - (419,361) (419,361) Balance as at 31 March ,000,000 (80,422,056) (35,254,680) 184,323,264 WAQF / PARTICIPANTS' TAKAFUL FUND Accumulated Cede money Qard-e-Hasna Total deficit (Rupees) Balance as at 31 December ,000 (20,738,961) 20,238,961 - Deficit for the quarter ended 31 March (1,145,604) - (1,145,604) Balance as at 31 March ,000 (21,884,565) 20,238,961 (1,145,604) Deficit for the nine months period ended 31 December 2016 (12,950,754) - (12,950,754) Qard-e-Hasna contributed by Shareholders' fund 14,596,358 14,596,358 Balance as at 31 December ,000 (34,835,319) 34,835, ,000 Deficit for the quarter ended 31 March (419,361) - (419,361) Qard-e-Hasna contributed by Shareholders' fund* , ,361 Balance as at 31 March ,000 (35,254,680) 35,254, ,000 * In compliance of Rule 20 of Takaful Rules, 2012 The annexed notes from 1 to 12 form an integral part of these financial statements. Chairman Director Director Chief Executive Officer

13 TAKAFUL PAKISTAN LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE QUARTER ENDED 31 MARCH March (Rupees) SHAREHOLDERS' FUND (SHF) Profit for the year 5,208,460 7,191,056 Other comprehensive income Items that will not be reclassified to profit or loss - - Total comprehensive income for the period 5,208,460 7,191,056 The annexed notes from 1 to 12 form an integral part of these financial statements. Chairman Director Director Chief Executive Officer 13

14 TAKAFUL PAKISTAN LIMITED STATEMENT OF CASH FLOW FOR THE QUARTER ENDED 31 MARCH 2017 Operating cash flows March 31, March 31, (Rupees) (a) (b) Underwriting activities Contributions received 41,474,940 67,647,430 Net re-takaful paid (2,948,743) 0 Claims paid (34,931,319) (42,256,528) Commissions paid (3,081,633) (2,334,130) Other underwriting receipts/(payments) 1,007,043 (9,278,775) Net cash flow from underwriting activities 1,520,288 13,777,998 Other operating activities Income tax paid (339,504) (546,935) General administrative and management expenses paid (15,665,870) (23,162,907) Other operating receipts/(payments) (627,874) (1,469,673) Advances to employees & Agents- net (178,378) (1,723,378) Net cash flow from other operating activities (16,811,626) (26,902,893) Total cash flow from all operating activities (15,291,338) (13,124,895) Investment activities TransacProfit / return received 5,869,941 5,795,612 Dividend received - - Placement of term deposits-net 50,029,000 (159,813,198) Investment in mutual funds (130,063,857) - Proceeds from disposal of fixed assets 1,000,000 - Fixed capital expenditure (744,674) (529,186) Total cash flow from investing activities (73,909,590) (154,546,772) Financing activities Security deposits retrun/ (paid) - 195,000 Ijarah rentals paid (315,000) (314,605) Total cash flow from financing activities (315,000) (119,605) Net cash inflow from all activities (89,515,928) (167,791,272) Cash at the beginning of the period 176,531, ,154,458 Cash at the end of the period 87,016, ,363,186 (Continued) 14

15 March 31, March 31, (Rupees) Reconciliation to profit and loss account Operating cash flows (15,291,338) (13,124,896) Depreciation expense (809,400) (853,025) Ijarah rentals (315,000) (314,605) Provision for taxation (513,531) (798,834) Income Tax Paid 339, ,935 Investment income 4,259,142 4,832,281 Other income 337, ,805 Gain on disposal of fixed assets 964,568 - Increase/(decrease) in assets other than cash 19,356,416 17,514,574 (Increase)/decrease in liabilities other than running finance (3,538,823) (2,242,783) Security deposit return/(paid) - 195,000 Profit after taxation 4,789,099 6,045,452 Breakup of profit / (loss) after tax Participant Takaful Fund (419,361) (1,145,604) Shareholders' Fund 5,208,460 7,191,056 4,789,099 6,045,452 Definition of cash Cash for the purposes of Statement of Cash Flows consit of cash in hand, policy stamps, bond papers, bank balances and other deposits which are readily convertible to cash in hand and which are used in the cash management function on a day-to-day basis. Cash and other equivalents 527, ,190 Current and other accounts 34,909,022 46,529,996 Deposits maturing within 3 months 51,580,000 71,380,000 87,016, ,363,186 The annexed notes from 1 to 12 form an integral part of these financial statements. Chairman Director Director Chief Executive Officer 7 15

16 TAKAFUL PAKISTAN LIMITED STATEMENT OF CONTRIBUTIONS FOR THE QUARTER ENDED 31 MARCH 2017 Business underwritten inside Pakistan Class Direct and facultative Contribution written Unearned contribution reserve Contribution earned For the Quarter ended Re-takaful ceded Prepaid re-takaful contribution ceded Opening Closing Opening Closing Re-takaful expense a b c d=a+b-c e f g h=e+f-g Net contribution revenue 31 March March (Rupees) Fire and property damage 5,400,242 12,952,807 10,903,801 7,449,248 3,480,958 7,882,539 5,898,309 5,465,188 1,984,060 2,036,965 Marine, aviation and transport 5,587,295 4,397,392 3,713,854 6,270,833 3,804,076 2,615,900 2,229,615 4,190,361 2,080,472 2,686,126 Motor 28,558,210 48,465,117 48,275,945 28,747,382 2,899, ,899,200 25,848,182 51,903,948 Health 6,897,999 6,966,574 5,168,532 8,696, ,696,041 14,894,249 Miscellaneous 42, , , ,600 51, , , ,486 76,114 84,561 Sub Total 46,486,264 73,195,413 68,328,573 51,353,104 10,235,398 10,680,225 8,247,388 12,668,235 38,684,869 71,605,849 Treaty Proportional / non proportional Grand total 46,486,264 73,195,413 68,328,573 51,353,104 10,235,398 10,680,225 8,247,388 12,668,235 38,684,869 71,605,849 Note: The Company does not underwrite business outside Pakistan. The annexed notes from 1 to 12 form an integral part of these financial statements. Chairman Director Director Chief Executive Officer 8 16

17 TAKAFUL PAKISTAN LIMITED STATEMENT OF CLAIMS FOR THE QUARTER ENDED 31 MARCH 2017 Business underwritten inside Pakistan For the Quarter ended Re-takaful and other recoveries Re-takaful and Re-takaful and Net claims expense Outstanding claims in respect of outstanding claims other Class Claims paid Claims expense other recoveries recoveries received revenue 31 March March 2016 Opening Closing Opening Closing a b c d=a-b+c e f g h=e-f+g i=d-h (Rupees) Direct and Facultative Fire and property damage 658,731 15,749,181 13,554,309 (1,536,141) 265,787 13,099,465 11,786,366 (1,047,312) (488,829) 344,774 Marine, aviation and transport 2,821,485 6,086,823 3,415, ,000 2,285,121 3,534,373 1,315,010 65,758 84,242 62,050 Motor 22,331,301 77,757,064 72,956,052 17,530,289 6,562,333 9,924,200 8,367,200 5,005,333 12,524,956 24,416,022 Health 8,712,802 10,639,495 7,663,071 5,736, ,736,378 13,945,398 Miscellaneous 407,000 1,039, ,120 (246,264) 204, ,692 42,499 (123,133) (123,131) (6,402) Sub Total 34,931, ,271,947 97,974,890 21,634,262 9,317,301 26,927,730 21,511,075 3,900,646 17,733,616 38,761,842 Treaty Grand total 34,931, ,271,947 97,974,890 21,634,262 9,317,301 26,927,730 21,511,075 3,900,646 17,733,616 38,761,842 Note: The Company does not underwrite business outside Pakistan. The annexed notes from 1 to 12 form an integral part of these financial statements.. Chairman Director Director Chief Executive Officer 17

18 TAKAFUL PAKISTAN LIMITED STATEMENT OF EXPENSES - PARTICIPANTS' TAKAFUL FUND FOR THE QUARTER ENDED 31 MARCH 2017 Business underwritten inside Pakistan Class Gross wakala fee Deferred wakala fee Opening Closing Wakala fee expired For the Quarter ended Other direct expenses Rebate from retakaful operators * Net underwriting expense 31 March March 2016 a b c d=a+b-c e f g=d+e-f (Rupees) Direct and Facultative Fire and property damage 2,160,097 5,181,123 4,361,521 2,979,699 6,195 1,528,707 1,457,187 1,509,763 Marine, aviation and transport 2,234,918 1,758,957 1,485,542 2,508,333 12,747 1,292,995 1,228,085 1,463,963 Motor 11,423,284 19,386,047 19,310,378 11,498,953 4,555,839-16,054,792 30,472,543 Health 2,759,200 2,786,629 2,067,412 3,478, ,478,416 4,963,564 Miscellaneous 17, , ,576 75,840 46,743 31,018 91,565 39,402 Total 18,594,506 29,278,165 27,331,429 20,541,242 4,621,524 2,852,720 22,310,046 38,449,236 Treaty Grand total 18,594,506 29,278,165 27,331,429 20,541,242 4,621,524 2,852,720 22,310,046 38,449,236 * Rebate from retakaful operators is arrived at taking impact of opening and closing unearned rebate Note: The Company does not underwrite business outside Pakistan. The annexed notes from 1 to 12 form an integral part of these financial statements. Chairman Director # Director Chief Executive Officer 10 18

19 TAKAFUL PAKISTAN LIMITED STATEMENT OF EXPENSES - SHAREHOLDERS' FUND FOR THE QUARTER ENDED 31 MARCH 2017 Business underwritten inside Pakistan Class Commission paid or payable Deferred commission Opening Closing For the Quarter ended Net commission expense Other management expense Net underwriting expense 31 March March 2016 a b c d = a+b-c e f = d+e (Rupees) Direct and Facultative Fire and property damage 512,377 1,763,785 1,397, ,627 1,298,469 2,177,096 1,719,528 Marine, aviation and transport 593, , , ,914 1,343,446 2,078,360 1,853,792 Motor 132,011 1,196, , ,432 6,866,722 7,555,154 12,863,567 Health 265, , , ,303 1,658,600 1,977,903 3,097,348 Miscellaneous 4,170 40,815 26,449 18,536 10,223 28,759 24,342 Total 1,508,418 3,722,575 2,591,181 2,639,812 11,177,460 13,817,272 19,558,577 Treaty Grand total 1,508,418 3,722,575 2,591,181 2,639,812 11,177,460 13,817,272 19,558,577 Note: The Company does not underwrite business outside Pakistan. The annexed notes from 1 to 12 form an integral part of these financial statements. Chairman Director Director Chief Executive Officer 11 Management expense 63% of 17,742,000 11,177,460 19

20 TAKAFUL PAKISTAN LIMITED STATEMENT OF INVESTMENT INCOME FOR THE QUARTER ENDED 31 MARCH 2017 Income from non-trading investments PARTICIPANTS' TAKAFUL EQUITY (PTF) March Rupees Profit on bank deposits and placement 1,242,277 1,809,056 Available for sale Gain on sale of Islamic mutual fund units 405, ,384 Dividend income , ,384 Less: Mudarib's fee (412,059) (483,360) Net investment income 1,236,175 1,450,080 SHAREHOLDERS' FUND (SHF) Profit on bank deposits and placement 1,518,403 2,898,841 Available for sale Gain on sale of Islamic mutual fund units 1,871,362 - Dividend income - - Held to maturity 1,871,362 - Return on other securities 535,365 - Amortization of premium on sukuk (71,945) - Less: Investment related expenses 463,420 - Net investment income 3,853,185 2,898,841 Chairman Director Director Chief Executive Officer

21 TAKAFUL PAKISTAN LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTER ENDED 31 MARCH STATUS AND NATURE OF BUSINESS Takaful Pakistan Limited (the Company) is an unlisted public limited company incorporated in Pakistan on 2 June 2006 under the Companies Ordinance, The Company has been established with the objective to carry out General Takaful Business as specified under the Insurance Ordinance 2000, Insurance Rules, 2002 and Takaful Rules, On 9 March 2007, the Securities and Exchange Commission of Pakistan's Insurance Division has issued "Certificate of Registration" to the Company under the provisions of section 6 of the Insurance Ordinance, Consequently, the Company has commenced commercial operations from 12 March The registered office of the Company is at Plot No A, 6th Floor, Business Centre, P.E.C.H.S., Shahrah-e- Faisal, Karachi. For the purpose of carrying on the Takaful business, the Company has formed a Waqf for Participants' equity. The Waqf, namely Takaful Pakistan Waqf (hereinafter referred to as the Participants' Takaful Fund or PTF) was formed on 22 January 2007 under the Trust deed executed by the Company with a seed money of Rs. 500,000. The seed money is required to be invested in Shariah compliant investments and any profit thereon can be utilized only to pay benefits to participants or defray PTF expenses. The accounts of the Waqf are maintained by the Company in a manner that the assets and liabilities of the Waqf remain separately identifiable. These financial statements have been prepared on an aggregate basis, duly including the financial position and results of operations of the Waqf. Waqf deed also governs the relationship of shareholders and participants for management of Takaful operations, investment of participants' funds and investment of shareholders' funds approved by the Shariah Board established by the Company. 2. BASIS OF PRESENTATION These condensed interim financial statements are unaudited and have been prepared in condensed form in accordance with the approved accounting standards as applicable to insurance companies in Pakistan for interim financial reporting and in the format requirement of prescribed by Securities and Exchange Commission (Insurance) Rules, 2002, with appropriate modifications based on the advice of the Shariah Board of the Company. These condensed interim financial statements do not include all of the information required for full financial statements and should be read in conjunction with financial statements for the year ended 31 December As required by the Code of Corporate Governance applicable to uslisted insurance companies, these financial statements are being submitted to the shareholders as well as to the Securities and Exchange Commission of Pakistan 3. ESTIMATES AND JUDGEMENTS The preparation of these condensed interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual result may differ from these estimates. The significant judgments made by the management in applying the accounting policies and key sources of estimation uncertainty were the same as those applied to financial statements for the year ended 31 December TAKAFUL AND FINANCIAL RISK MANAGEMENT The Company's takaful and financial risk management objectives and policies are consistent with that disclosed in the annual financial statements for the year ended 31 December SIGNIFICANT ACCOUNTING POLICIES Accounting policies and matters of computation adopted for the preparation of these condensed interim financial statements are the same as those applied in the preparation of the financial statements for the year ended 31 December

22 6. OTHER CREDITORS AND ACCRUALS AS AT MARCH 31, December Shareholders' Participants' Aggregate 2016 Fund Takaful Fund Aggregate (Rupees) Commission payable to agents 5,568,080-5,568,080 7,091,693 Federal excise duty - 1,347,768 1,347, ,279 Federal insurance fee - 115, , ,610 Withholding Tax - 346, , ,521 Contribution due to other re-takaful/insurance companies - 487, , ,665 Payable to staff gratuity fund 1,300,000-1,300, ,435 Provision for compansated absences 256, , ,054 Security deposit 435, , ,381 Tracker installation fee payable - 7,894,182 7,894,182 3,651,726 Other payables 283, , ,805 3,728,713 Payable to PTF 46,589,145-46,589,145 28,902,215 54,432,228 10,670,693 65,102,921 46,383, CASH AND BANK DEPOSITS AS AT MARCH 31, December Shareholders' Participants' Aggregate 2016 Fund Takaful Fund Aggregate (Rupees) Cash and other equivalents - Cash 100, ,700 98,337 - Policy stamps and bond papers in hand 426, , , , , , ,847 Current and other accounts - Current accounts 586,003 45, ,034 44,309 - PLS savings accounts 10,246,109 24,031,880 34,277,989 24,446,818 10,832,111 24,076,911 34,909,022 24,491,127 Deposits maturing within 12 months -Term deposits 94,380,000 68,700, ,080, ,109,000 Deposits maturing after 12 months -Term deposits ,312,812 93,203, ,516, ,131, INVESTMENTS AS AT MARCH 31, December Shareholders' Participants' Aggregate 2016 Fund Takaful Fund Aggregate (Rupees) Held to maturity - Sukuks Certificates ,254,513-44,254,513 44,327,458 Less: Provision for impairment (19,838,403) - (19,838,403) (19,839,403) 24,416,110-24,416,110 24,488,055 Available for sale 19,356,416 - Quoted - Islamic Funds ,102,350 67,609, ,711, ,318,066 90,102,350 67,609, ,711, ,318, ,518,460 67,609, ,127, ,806,121 22

23 8.1 Sukuk Certificates Note Number of certificates Maturity date Effective yield Profit Payment Market value Face value 31st March st December Rupees Agritech Limited - Sukuk Certificate , August months Semi-annually NPA* 15,000, KIBOR + 2% Quetta Textile Mills Limited - Sukuk Certificates , March months Quarterly NPA* 10,000, KIBOR % TPL Trakkar Limited - Sukuk Certificates April months Quarterly 10,700,000 10,000,000 10,311,110 10,330,555 KIBOR + 3% Pak Elektron Limited - Sukuk Certificates November months Quarterly 14,280,000 14,000,000 14,105,000 14,157,500 KIBOR + 2.5% This includes investment aggregated to Rs. 15 million (31 December 2015: Rs. 15 million) in sukuks issued by Agritech Limited (the investee company) against which the investee company had not made payments at the contractual dates i.e. 06 August 2010 and 06 February In 2011, a restructuring agreement was signed between the investee company and the Investment Agent of the sukuk certificates, whereby, certain terms included in the original trust deed dated 22 July 2008 were amended, including the repayment period which was extended from 06 August 2015 to 06 August Further, in lieu of accrued overdue profit, zero coupon Term Finance Certificates (TFCs) were issued by Agritech Limited on 17 October 2011 which were to be repaid by the investee company within three and a half years from the date of issuance of such TFCs. However, the investee company defaulted on the installment due based on the restructuring agreement as well as in making payments in respect of zero coupon term finance certificates. Therefore, the management has neither recorded TFCs issued in lieu of profit in the books of accounts nor accrued any profit on outstanding principal amount and has fully provided for the outstanding principal, on prudence basis. An agreement for restructuring of these sukuks was executed between the Investment Agent of these sukuks and Quetta Textile Mills Limited on 24 June According to the restructuring terms, repayment of principal of Rs. 8 million will be made to the Company over a period of 7 years till 26 March 2020 in twenty nine quarterly installments whereas the profit shall be received by the Company at the rate of 6 monthly KIBOR and a spread of 1.75% with effect from 26 March 2013.However, the investee company defaulted on the installment on due dates under restructuring agreement. Therefore, outstanding balance has been fully provided for on prudence basis. * Non performing assets 8.2 Units of Islamic Fund - Available for sale Sector / name of investee scheme 1st January 2017 Purchased during the year Redeemed during the year 31st March st March st December 2016 Cost Market value Cost Market value Number of Units Rupees Participants' Takaful Fund ABL Islamic Income Fund - 671, ,373 7,000,000 7,027, Meezan Asset Allocation Plan II 108, ,990 5,526,454 7,297,961 5,526,454 7,193,331 Al-Ameen Islamic Aggressive Income Fund 2, , , , , ,618 Meezan Islamic Income fund 433,505 (141,349) 292,156 15,324,128 15,595,287 22,682,426 22,798,031 NAFA - Riba Free Savings Fund 3,350, ,884 (2,075,485) 1,402,019 14,494,398 14,902,200 34,855,477 35,024,691 Meezan Asset Allocation Fund - 143, ,151 15,000,000 15,124, MCB Pakistan Islamic Stock Fund - 709, ,220 10,000,000 9,801, ,895,717 1,650,628 (2,216,834) 3,329,511 67,609,075 70,016,906 63,328,452 65,281,671 Shareholders' Fund ABL Islamic Income Fund 715, ,373 (715,104) 671,373 7,000,000 7,027,463 7,324,093 7,384,520 ABL Islamic Stock Fund - 324, ,359 6,000,000 5,916, ABL Strategic Allocation Plan III - 200, ,084 20,008,386 20,083, Meezan Islamic Income fund 253,228 (235,582) - 17, , ,943 13,249,724 13,317,253 MCB Islamic Income Fund 155,187 37, ,175 20,000,000 20,409,171 16,000,000 16,048,232 NAFA - Riba Free Savings Fund - 1,829,003 1,829,003 19,300,000 19,440, MCB Pakistan Islamic Stock Fund 306,513 70, ,738 5,000,000 5,206,519 4,000,000 4,110,345 Meezan Financial Planning Fund of Funds (Conservative) - 177, ,550 11,908,267 11,881,635 10,415,797 11,792,542 Meezan Capital Preservation Plan II 209,645 28,520 (238,165) ,639,677 3,103,519 (953,269) 3,789,928 90,102,351 90,907,492 50,989,614 52,652,892 Had the Company followed International Accounting Standard (IAS) 39 Financial Instruments: Recognition and Measurement in respect of recognition of gain / (loss) on measurement of available for sale securities directly into equity, the investments of the Company would have been increased by Rs. 3.2 million (2016: increased by Rs million) and the net equity would have increased by the same amount. 23

24 9. FIXED ASSETS Detail of the cost of operating assets that have beed acquired/disposed off during the three months' period ended 31 March 2017 is as follows: Additions Disposals (Rupees) Tangibles Office equipment 81,000 - Motor Vehicles - 1,436,139 Computer 241,600 - Software Licenses 422,074 - Total 744,674 1,436, MANAGEMENT EXPENSES - SHF Quarter ended Quarter ended 31 March 31 March (Rupees) Salaries, wages and benefits 7,961,358 11,711,666 Rent, rates and taxes 1,200,808 1,288,461 Utilities 235, ,573 Communications 428, ,052 Printing and stationery 157, ,532 Travelling and entertainment 98, ,669 Repairs and maintenance 263, ,643 Vehilce running and maintenance 107, ,429 Advertisements and promotions 35,000 79,447 Ijarah rentals 220, ,224 Fees and subscription 219, ,186 Other expenses 248, ,229 11,177,460 15,821, GENERAL AND ADMINISTRATION EXPENSE - SHF Salaries, wages and benefits 3,416,455 5,019,286 Rent, rates and taxes 514, ,198 Utilities 101, ,817 Communications 183, ,594 Printing and stationery 67, ,228 Travelling and entertainment 42, ,715 Repairs and maintenance 113, ,847 Vehilce running and maintenance 46, ,041 Advertisements and promotions 15,000 34,049 Ijarah rentals 94,500 94,382 Fees and subscription 94,253 91,366 Depreciation 809, ,025 Takaful expense 112, ,702 Shariah board honorarium 235, ,295 Legal and professional 343, ,720 Auditors' remuneration 218, ,550 Bank charges 4,500 4,525 Other expenses 153, ,955 6,564,541 8,883, DATE OF AUTHORIZATION These condensed interim financial statements were authorized for issue on by the Board of Directors of the Company Chairman Director Director Chief Executive Officer 16 24