CONTENTS CONTENTS Audit Committee Report 2013 9 Purpose of Audit Committee: 10 Activities of Audit Committee in 2013 13 Auditors Report to the Shareholders 15 Management s Responsibility for the Financial Statements 20 Auditor s Responsibility 22 Opinion 22 Emphasis of Matter23 Legal status and nature of the Company-disclosure under 24 BAS 1 Presentation of Financial 25 Statements 26 Significant accounting policies- disclosure under IAS 27 Presentation of Financial Statements 30 Additional information on financial statements 31 Notes on the Financial Statements 33 Balace Sheet 35 Profit and Loss Account 36 Profit and Loss Appropriate Accounts 37 Minutes 38 2 Annual Report 2013
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Vision To be an insurer of World Standards and the most preferred choice for clientele at the domestic and global level. Mission Our Mission is to keep the customer satisfaction as focal point of all our operations, adopt the best international practices in underwriting, claims and customer service, be the most innovative in product development, establish presence all over Bangladesh, ensure sustained value addition to all stake holders and to uphold Corporate Value & Corporate Governance. Goals Make affordable insurance accessible to all Keep customer as focal point for all operations Protect policy holders interests Adopt best international practices in claims, underwriting and policy servicing Be the most innovative in product development Establish Pan Bangladesh presence 4 Annual Report 2013
Core Value Annual Report 2013 5
Products of Federal Insurance Co. Ltd. P H O T O Fire Insurance: Fire and Allied Perils Insurance Household Insurance Hotel Owners All Risks Insurance Insurance of Consequential Loss Due to fire & Allied Perills Industrial, All Risks Insurance Operational Package Insurance (Power Plant) P H O T O Marine Insurance: Marine Cargo Insurance Marine Hull Insurance Marine Freight Insurance Motor Insurance: Comprehensive Insurance Act Only Liability Insurance Trade Policy Insurance P H O T O Aviation Insurance: Hull Insurance & Laibility Insurance Crew Personal WAR Insurance Deductible Insurance Loss of License Insurance Accident Insurance P H O T O Engineering Insurance: Contractors All Risks Insurance (CAR) Erection All Risks Insurance (EAR) Machinery Loss of profit Insurance (BI MB) Deterioration of Stock Insurance (DOS) Power Plant Insurance Lift, Escalator and Hoisting Equipment Insurance Contractors Plant & Machinery Insurance (CPM) Machinery Insurance (MB) Electronic Equipment Insurance (EEI) Boiler and pressure Vessels Insurance P H O T O Miscellaneous Insurance: All Risks Insurance, Cash / Property in Premises, Money / Cash in Transit Insurance Cash in ATM Insurance, Burglary Insurance, General/Public Liability Insurance Comprehensive General Liability Insurance Employers Liability Insurance Products Liability Insurance Professional Indemnity Insurance Directors and Officers Liability Insurance Personal Accident Insurance People s Personal Accident Insurance Overseas Mediclaim Insurance Cellular Mobile Phone Insurance Fidelity Guarantee Insurance Neon Sign Insurance Rubber Plantation Insurance Lockers Insurance Air Travel Insurance Credit Card Holder Insurance Safe Deposit box (Bank Lockers) 6 Annual Report 2013
Board of Directors Annual Report 2013 7
Jainul Abedin Jamal Chairman Alhaj Md. Abdul Khaleque Chairman, Executive Committee Alhaj Elias Siddiquee Vice Chairman Mr. Sunanda Majumder Vice Chairman 8 Annual Report 2013
Mr. Rafiqul Islam Chairman Audit Committee Alhaj Sabirul Hoque chairman, Claims Committee Mr. Enamul Hoq Director Alhaj Md. Lokman Chowdhury Director Annual Report 2013 9
Alhaj Nurul Alam Director Mr. A K M Sarwardy Chowdhury Director Mr. Mohiuddin Chowdhury Director Ms. Khadizatul Anwar Director 10 Annual Report 2013
Ms. Mamtaz Begum Director Mr. A S Jahir Muhammad Independent Director Mr. Ahsanul Kabir Siddiquee Pablic Shareholder Director Ms. Israt Niveen Alam Pablic Shareholder Director Annual Report 2013 11
Ms. Monoara Ahmed Pablic Shareholder Director Mr. Rokan Uddin Chowdhury Pablic Shareholder Director Ms. Shahjadi Syeda Sayema Ahmd Pablic Shareholder Director Mr. Tanveer Nawaz Pablic Shareholder Director 12 Annual Report 2013
A K M Sarwardy Chowdhury Managing Director Mr. A. K. M. Sarwardy Chowdhury Mr. A. K. M. Sarwardy Chowdhury was born on 16th March 1950 at his village North Salimpur of Sitakund Upazila under the district of Chittagong. His father late Abdus Sobhan Chowdhury was a Government Officer, comes of a renowned respectable Muslim family of Sitakund. Mr. Chowdhury obtaining graduation from Govt. College of Commerce under the University of Chittagong and receiving Training in Audit from m/s Rahman Rahman Huq & Co. started his carrier with the Erstwhile Eastern Insurance Co. Ltd. as a Junior Officer in the year 1972. While serving as Deputy Manager in Sadharan Bima Corporation he completed Advance Insurance Course organised by Bangladesh Bima Academy and took part in the various training in the field of Insurance. He has completed the Financial Management and Accounting Course organised by Bangladesh Management Development Centre. After establishment of private sector insurance companies in Bangladesh. Mr. A.K.M. Sarwardy Chowdhury joined Green Delta Insurance Co. Ltd. as a Vice President and on 1st January 1988 he joined the Federal Insurance Co. Ltd. as General Manager. As a General Manager of Federal Insurance Co. Ltd. he looked after the various departments viz Finance Accounts, Administration, Underwriting. Claim and Re-Insurance. For his successful activities Management of the Company promoted him as Senior Executive Vice President in the year 1991. In 1994 he was appointed as Deputy Managing Director of the Company. Mr. Chowdhury hold the charge of Acting Managing Director in1995. Mr. A.K.M. Sarwardy Chowdhury is the successful Managing Director of Federal Insurance Co. Ltd since 1996. Mr. Chowdhury visited various countries like India, Pakistan, Oman, UAE Singapore, Malaysia, Thailand etc. Besides a Rotarian he petronise various social and cultural organisations. He is Secretary General of Poet Sarojini Naidu National Memorial Council, President Chittagram Forum - Uttara and Sitakund Samity Dhaka. He received Kaladdhani Gold Medal from the Speaker, National Assembly awarded by Kaladdhani Cultural Organisation ARTHAYON AWARDS-2000 for his glorious contribution to the Insurance Industry A sincere, diligent, amiable and successful insurance man Mr. A.K.M. Sarwardy Chowdhury is the father of two daughters and two sons. Annual Report 2013 13
Executives As at 31 December 2014 Managing Director & CEO Mr. A K M Sarwardy Chowdhury Deputy Managing Director Mr.Md.Sadaruddin Mr.Md.Nurul Islam Mr.Md.Mahabubul Alam Mr.Mujibul Wadud Chowdhury Ms.Faridun Nahar Mr.Kazi Arifur Rahman Mr. A K M Shahbuddin Chowdhury Mr.Shamsuddin Ahmed Mr.Simul Kanti Barua Mr.Abu Sufian Md, Kamal Naser Mr. Iftekhar Hussain Chowdhury Ms. Nasima Khanom Dana Mr. Abdul Muqeet Chowdhury Ms.Aysha Begum Asstt. Managing Director Mr.Md. Iqbal Hossain Mr.Md. Rafiqul Islam Mr.A J Zahurul Alam Mr.Kazi Shakawat Hossain Senior Executive Vice President Mr.Mukbul Ahmed Mr.Md. Serajul Islam Mr.Md. Mourshed Mr.Md.Abu Bakkar Siddique Mr.Jafar Ahmed Mr.Md.Hefajatur Rahman Executive Vice President Mr. Muslem Ali Khan Mr.Md.Tajul Islam Chowdhury Mr. Sazeed Hossain Mr.Abul Kalam Sikder (Azad) Mr.Fakhrul Islam Bhuiyan Mr. Syed Anisul Islam Mr.Mujibul Hassan Kazi Shohrab Hossain Mr.Mohammad Baha Uddin Mr.Md. Aman Ullah Admin.& Dev.Wing.Deptt.,Head Office, Dhaka Adamjee Court Branch, Dhaka. Agrabad Branch, Chittagong. Khatungonj Branch, Chittagong Bangshal Branch, Dhaka Ramna Branch, Dhaka Local Motijheel Branch, Dhaka Dilkusha Branch, Dhaka Chief Finance Officer,Head Office, Dhaka Head Office, Dhaka Mogbazar Branch, Dhaka. Adamjee Court Branch, Dhaka. Dewanhat Branch, Chittagong Dewanhat Branch, Chittagong Elephant Road Branch, Dhaka Claims Deptt. Head Office, Dhaka Underwriting Deptt., Head Office, Dhaka Underwriting Deptt., Head Office, Dhaka Anderkilla Branch, Chittagong VIP Road Branch, Dhaka Elephant Road Branch, Dhaka Imamgonj Branch, Dhaka Agrabad Branch, Chittagong Khatungonj Branch, Chittagong Farmgate Branch, Dhaka Khatungonj Branch, Chittagong Khatungonj Branch, Chittagong Uttara Branch, Dhaka Accounts Department,Head Office, Dhaka Administration Department,Head Office, Dhaka Accounts Department,Head Office, Dhaka Rangpur Branch, Rangpur Head office,dhaka Nawabour Branch, Dhaka Company Secretary(C.C.) Mr.Sheikh Mohammad Anwar Uddin 14 Annual Report 2013
cwipvjkgûjxi cöwz e`b 31 ww m ^i 2013 mgvß eq ii Rb wem&wgjvnxi ingvwbi inxg, m vbxz kqvi nvìvie `, Avm&mvjvgy AvjvBKzg, dwv ij Bbmy iý Kv cvwb wjt Gi 26 evwl K mvaviy mfvq Avcbv `i mkj K AvšÍwiK ï f Qv I ^vmzg Rvbvw Q cwipvjkgûjxi c _ K 31 ww m ^i 2013 Zvwi L mgvß eq ii Kg KvÛ, wbixw Z wnmve I A_ bwzk Z_ vejxhy³ Kv cvwbi evwl K cöwz e`b Avcbv `i we epbv Ges Aby gv` bi Rb Dc vcb Kivi my hvm c q Avwg Avb ` eva KiwQ Avcbviv R b Lykx n eb h Avcbv `i Kv úvwbi wemz eqi wji b vq wcöwgqvg Avq I bxu gybvdv G eqii e w c q Q Avkv Kwi Avcbv `i Ae vnz mwµq mg_ b I mn hvwmzvq Kv úvwb DË ivëi Av iv kw³kvjx cöwzôvb wnmv e wekwkz n e Kv cvwb m cwk Z welqvw` t 1987 m bi 11 b f ^i dwv ij BÝy iý Kv úvwb wjt 3.00 KvwU UvKv cwi kvwaz g~jab wb q wbewüz nq GKB m bi 17 b f ^i exgv Awa`ßi _ K mvaviy exgv e emvi iwr ó«kb mvwu wd KU cªvß nq Ges 20 b f ^i AvbyôvwbK Kvh µg ïiæ K i 1995 m b cvewjk Bmy i gva g cwi kvwaz g~jab 6.00 KvwU UvKvq Ges ciewz Z g~jab AviI e w i j ÿ µgvš^ q evbvm, ivbum kqvi Bmy i gva g Kv úvwbi cwi kvaxz g~jab 46.44 KvwU UvKvq DbœxZ Kiv nq mswkøó mk ji c ô cvlkzv, AvšÍwiK mn hvwmzv Ges Kv úvwbi mkj Kg KZ v-kg Pvixi mw wjz cö Póvq `xn 27 eq i Kv úvwb wewfbœ mg q bvbv cöwzkzj Ae v, ivr bwzk Aw izv, NywY So I `ke vcx eb vi d j wecyj cwigvy As Ki `vex cwi kva m Z I av c av c AMÖMwZi w` K GwM q hv Q Annual Report 2013 15
e emvi cwi ek I fwel Z cöz vkv t 2008 m bi kl cöv ší wbe vwpz mikv ii gva g AveviI `k MYZvwš K kvmb e e vq cöz vez b K i BD ivcxq cb evrv i Afvebxq g~j e w i av v Av gwikvi ekvi mgm v Ges ga cöv P i Z ji `vg e w Ges ZrcieZx Avw_ K g `vi Kvi Y A_ bxwz ÿwzmö n q Q eq ii kl w` K ` ki ivr bwzk Aw izv Ges wek A_ bwzk g `vi Kvi Y 2013 mb wqj P v jwäs I Aw izvc~y eqi ZeyyI evsjv ` ki A_ bxwz Z Pjgvb wek A_ bwzk g `vi ÿwzki cöfve ZzjbvgyjK Kg Abyf~Z n q Q cöevmx `i cöwiz ˆe `wkk gy`ªvi ikw cwigvy wirvf cöe w Ges K wl Drcv` b ev úvi djb m Ë I eq ii kl w` K ivr bwzk AwbðqZvi d j A_ bwzk cöe w i cwigvy Kvw LZ j ÿ cušqv Z cv iwb ` ki exgv Lv Zi mvwe K wpî gvuvgywu m šívlrbk ZvQvov Kv úvwbmgy ni Zzjbvq exgv evrv ii cwimi e w bv cviqvq Ges mvwe K cwiw wzi Kvi Y Kv úvwb wji g a AˆbwZK cöwz hvwmzv GB wk íi my wekvk K evavmö K iwqj GgZve vq wu K _vkvi Rb cöwzwbqz mzk msmöv g wjß wqj RvZxq msm ` bzzb exgv AvBb Aby gv`b Ges wbqš Y KZ cÿ MV bi ci A bwzkzv m ú~y fv e n«vm Ges G Lv Zi cözxwÿz MŠie cybiæ vi K i Kv úvwb jv mg w i w` K GwM q hv Q Avgiv AvkvKwi h mkj Awbqg I A bwzk Kvh vejxi Kvi Y exgvwkí aÿs mi ØvicÖv ší P j wm qwqj, exgv Dbœqb I wbqš Y KZ c ÿi ewjô c` ÿ c m mg Í `ye jzv jv KvwU q D V ewjô GKwU wkí wnmv e evsjv ` ki A_ bxwz Z Ae`vb ivl e hvi mn hvwm n e Avcbv `i dwv ij Bbmy iý Kv úvwb wjwg UW e emv ch v jvpbv t Avcbv `i Kv úvwb 2013 m b gvu wcöwgqvg Avq K i Q 426.73 wgwjqb hv 2012 m b wqj 341.73 wgwjqb MZ eq ii Zzjbvq wcöwgqvg 24.87% e w c q Q wcöwgqvg Avq e w i mv _ mv _ AewjLb mybvdv 2013 m b 91.90 wgwjqb UvKv AR b K i Q 2012 m b hv wqj 87.34 wgwjqb 16 Annual Report 2013
AMœx exgv e emv t Avcbv `i Kv úvwb AwMœ exgv e emv _ K gvu wcöwgqvg Avq K i Q 156.70 wgwjqb hv 2012 m b wqj 116.53 wgwjqb cybt exgv wcöwgqvg cö`v bi ci Kv úvwb 2013 m b bxu wcöwgqvg Avq K i Q 49.52 wgwjqb UvKv AwMœ exgv Z bxu exgv `vex 4.88 wgwjqb UKv cwi kv ai cii 2013 m b AewjLb g~bvdv n q Q16.36 wgwjqb UvKv 2012 m bi Zzjbvq G eqi wcöwgqvg e w i Kvi Y AewjLb g~bvdv Z cöfve c o Q bš Kv M v I bš nvj e emv t Avcbv `i Kv úvwb bš K M v I nvj e emv _ K gvu wcöwgqvg MZ eq ii 145.78 wgwjqb UvKv _ K 2013 m b 164.53 wgwjqb UvKvq e w c q Q cybtexgv wcöwgqvg cö`v bi ci bš Kv M v I nvj exgv _ K 2013 m bi bxu wcöwgqvg Avq n q Q 127.10 wgwjqb UvKv bxu exgv`vex cwi kv ai ci G eqi AewjLb g~bvdv n q Q 50.15 wgwjqb UvKv 2012 m b hv wqj 58.92 wgwjqb UvKv gui I wewea exgv e emv t dwv ij Bbmy iý Kv úvwb wjt gui exgv _ K 2013 m b 55.38 wgwjqb UvKv gvu wcöwgqvg Avq K i Q hv MZ eqi wqj 50.84 wgwjqb UvKv G eqi Avq e w 8.93 cybtexgv wcöwgqvg cö`v bi ci gui exgv e emvq bxu wcöwgqvg Avq n q Q 50.47 wgwjqb UvKv bxu exgv`vex cwi kv ai ci G eqi AewjLb g~bvdv n q Q 11.98 wgwjqb UvKv MZ eqi hv wqj 8.39 wgwjqb UKv g~bvdv e w 42.79% Gross Premium Income 500 400 300 200 100 0 Figures in Million Taka 426.73 318.83 341.73 256.32 271.62 2009 2010 2011 2012 2013 Annual Report 2013 17
wewea exgv e emv _ K 2013 m b gvu wcöwgqvg Avq n q Q 50.11 wgwjqb UvKv hv MZ eqi wqj 28.58 wgwjqb UvKv wcöwgqvg e w cviqvq G eqi g~bvdv n q Q 13.41 wgwjqb UvKv 2012 m b wqj 7.38 wgwjqb UvKv hv MZ eq ii Zzjbvq 81.71% ekx Avw_ K weeiyxi Dci cwipvjkgûjxj cöwz e`b t m vwbz kqvi nvìvie ` Avcbv `i AeMwZi Rb Rvbvw Q h, (K) (L) (M) (N) Kv úvwbi Avw_ K weeiyxmg~n Ges mshy³ wukvmg~n Kv úvwb AvBb 1994, exgv AvBb 2010 wkqz wkqz ÿ Î exgv AvBb 1938 Ges evsjv `k wmwkdwiwur GÐ G PÄ Kwgkb AvBb 1987 Abyhvqx ˆZwi Kiv Net Claims n q Q G weeiyxmg~n Kv úvwbi Avw_ K Ae v, Figures in Million Taka 50 mgvß eq ii Kvh µ gi djvdj Ges bm` A_ 41.82 cöev ni cök Z wpî cöwzdjb K i 40 Kv úvwbi cö qvrbxq wnmve ewnmg~n mwvkfv e ˆZwi Kiv n q Q Avw_ K weeiyxmg~n ˆZwi Z mwvk wnmve bxwzgvjvmg~n h_vh_fv e cö qvm Kiv n q Q e Z qmg~n cökvk Kiv n q Q wnmv ei Abygvbmg~n hyw³m½z Ges h_vh_fv e Kiv n q Q AvšÍR vwzk wnmvegvbmg~n hv evsjv ` k cö hvr m Abyhvqx Avw_ K weeiyxmg~n cö Z Kiv n q Q 30 20 10 0 17.72 16.78 28.20 28.98 2009 2010 2011 2012 2013 (O) (P) Af šíixy wbqš Y e e v ^Qfv e cöyxz hvi cö qvm Ges ch eÿy my `ifv e cvjb Kiv n Q Pjgvb cöwzôvb wnmv e Kv úvwbi mÿgzvq Kvb cökv ii m ` ni AeKvk bb Underwriting Profit 100 80 Figures in Million Taka 91.90 87.34 78.83 (Q) MZ eq ii Kvh µ gi Zzjbvq iæz c~y Kvb wepz wz bvb 60 40 43.52 47.82 evw mfvi Dcw wz t evw mfvi msl v Ges cwipvjk `i Dcw wz K c v iu Mfvb v b&m Gi mshyw³i mv _ `Lv bv n jv kqvi nvwìs aiy t 20 0 2009 2010 2011 2012 2013 wegmbwm bvwuwd Kkb bs GmBwm/wmGgAviAviwmwW/2006-158/134/GWwgb/44 ZvwiL 07.08.2012 Gi wbixÿv 1.5 (XXI) Abyhvqx Kv úvwbi kqvi nvwìs Gi aib mshyw³ wnmv e `qv n jv Avw_ K Z_ mg~n t Kv úvwbi wemz 5 eq ii iæz c~y Avw_ K I Ab vb Z_ mg~n Avw_ K cöwz e` b `Lv bv n q Q 18 Annual Report 2013
cwipvjk `i mswÿß Rxebx t Kv úvwbi cwipvjk `i mswÿß Rxebx Avw_ K cöwz e` b mshy³ Kiv n q Q wbixÿv KwgwUi Kvh µ gi Dci cöwz e`b t Investment Income 50 40 30 Figures in Million Taka 41.73 43.81 evsjv `k wmwkdwiwur GÐ G PÄ Kwgk bi bvwuwd Kkb bs GmBwm/wmGgAviAviwmwW/2006-158/134/GWwgb/44 ZvwiL 07.08.2012 Gi 3.5 Abyhvqx Kv úvwbi wbixÿv KwgwUi Kvh µ gi Dci wbixÿv KwgwUi Pqvig vb Gi cöwz e`b mshy³ Kiv n jv mvgvwrk `vqe Zv (K c v iu mvm vj imcbwmwewjwu) t 20 10 0 18.56 9.04 6.08 2009 2010 2011 2012 2013 dwv ij Bbmy iý Kv úvwb wjt K c v iu mvk vj imcbwmwewjwu (wmgmavi) ev mvgvwrk `vqe Zv Gi AvIZvq ÿy`ª cwim i Zvi Kvh µg ïiæ K i Q cwipvjkgûjxi wm všíµ g Avw_ Kfv e Am Qj Kv úvwbi vd ev Ab vb QvÎ `i wkÿve wë cö`v bi e e v MÖnb G e vcv i GKwU bxwzgvjv cöbq bi KvR Pj Q wemz eq i ivuvix K v ei gva g e ÿ ivcb Kvh µ g AskMÖnY K i Q wemz eq i wewfbœ gš Yvjq KZ K w`em cvjb Dcj ÿ cöpv i mikvi K Avw_ Kfv e mn hvwmzv K i Q wewfbœ wkí, ms wz welqk Abyôv b A_ev cökvkbvq Avw_ Kfv e A_ev weávcb w` q mn hvwmzv K i Q wewfbœ wkÿv cöwzôv b Avw_ K mn hvwmzv cö`vb Kiv n q Q gybvdv I jf vsk t exgv wk í wbqgbxwz ewn f Z Kvh µg PP vi cöfv e e q e w cviqvq gybvdv n«vm cv Q Abwf cöz cöwz hvwmzvi Kvi Y e emv msmön LiP AZ wak niqvq wkqy wkqy e emv Q oi w` Z n q Q ZvQvov ` k weivrgvb bvbvwea cöwzkzjzv m Ë I Kv úvwbi wcöwgqvg Avq e w c q Q Ges Kv úvwb 2013 m b 94.49 wgwjqb UvKv Kic~e wbu gybvdv Ki Z m g n q Q gybvdv _ K 38.50 wgwjqb UvKv AvqKi cöwfkb Kiv n q Q Ges 4.00 wgwjqb UvKv e wzµgag x ÿwzi Rb wirvf Kiv n q Q Kv úvwbi jf vsk cö`v bi avivevwnkzv ervq ivlvi ^v _ Ges cwi kvwaz g~jab e w i wbwg Ë mkj kqvi nvìvi `i K A_v r 46.44 KvwU UvKv g~ja bi Dci 11% ók wwwf WÛ cö`v bi Rb cwipvjk cwil` mycvwik K i Qb e v jýkxu Zvwi Li ciezx welqvw` t AvMvgx Z exgv Kv úvwb jvi cöwz hvmxzv ZxeªZi n e G Z Kvb m `n bb cök Zc myôz cöwz hvwmzv wkí wekv k mnvqk Z e Avgv `i c~e AwfÁZv _ K ejv hvq, exgv wk íi cöwz hvwmzv Avgv `i ` k Kvw LZ cwi ek Ges wbqgkvby bi g a mxgve _vk Q bv GB cöwz hvwmzvi Î myôzzv Ges AvBbvbyMZv wbwðz Kiv bv M j exgv wk íi Annual Report 2013 19
fwel Z mskuvcbœ n q covi m vebv Av Q me wkqy we epbvq i LB GB wk íi my wekv k mn hvwmzv Ges m vwbz kqvi nvìvie `i ^v_ msi Y K i D PZi mev I bwzkzvi gva g jvfrbkfv e Kv úvwb K GwM q wb q hviqvi msk í Avgiv e cwiki Profit Before Tax 100 80 60 Figures in Million Taka 94.49 87.90 66.50 D jøl, 31 ww m ^i 2013 Zvwi L cö ZK Z e v jýkxu Gi ciezx mg q Kv úvwbi wcöwgqvg Av qi aviv cövq GKB Av Q eo ai Yi Kvb wech q bv n j gybvdv e w Avkv Kiv AZ ší msmz 40 20 0 22.07 24.84 2009 2010 2011 2012 2013 D ` v³v cwipvjk `i AemiMÖnY Ges cyytwbe vpb t Kv úvwbi AvwU Kj&m Ae G mvwm qkb Gi 114 bs AvwU Kj Abyhvqx wbgœwjwlz D ` v³v cwipvjkmy AemiMÖnY K ib : 1 AvjnvR gvt Ave`yj Lv jk 2 Rbve Gbvgyj nk 3 Rbve G KGg miiqviw` PŠayix 4 AvjnvR gvt jvkgvb PŠayix Kv úvwbi AvwU Kj&&m Ae G mvwm qkb Gi 116 bs AvwU Kj Abyhvqx D ` v³v cwipvjkmy cybivq wbe vp bi hvm Ges Zvuiv mk j cybtwbe vp bi Rb AvMÖn cökvk K i Qb Pictur 20 Annual Report 2013
cvewjk kqvi nvìvi _ K cwipvjk wbe vpb t Kv úvwbi AvwU Kj&m Ae G mvwm qkb Gi 114 bs AvwU Kj Abyhvqx cvewjk kqvi nvìvi (MÖæc-we) Gi g a n Z wbgœwjwlz wzb Rb cwipvjk AemiMÖnY K ib t 01 Rbve BmivZ bvbwfb Avjg 02 Rbve g bvqviv Avn g` 03 Rbve ivkb DwÏb PŠayix AwWUi wb qvm t Kv úvwbi 24 evwl K mvaviy mfvq PvUv W GKvD U Um gmvm we Avjg GÐ Kvs, K AwWUi wb qvm Kiv nq Zvuiv G `vwq Z wbhy³ _vkvi AvMÖn cökvk K i Qb cybtwb qv Mi hvm weavq 2013 m bi Rb Zvuiv cybtwb qv Mi cö Íve w` q Qb K c v iu Mfvb vý t evsjv `k wmwkdwiwur GÐ G PÄ Kwgk bi 7 AvM 2012 Zvwi Li cöávcb bs GmBwm/wmGgAviAviwmwW/2006-158/134/ GWwgb/44 Gi mycvwikmg~n Kv úvwb Z Kvh Ki i q Q Dc ivwjø wlz cöávc bi 7 bs aviv Abyhvqx Kv úvwbi Kgcø v qý& Gi weeiyx Ges PvU vw GKvD U Um Gi wi cvu GZ`m ½ mshy³ Kiv nj Pictur Dcmsnvi t dwv ij Bbmz iý Kv úvwb K Ae vnz mg_ b Ges mn hvwmzvi Rb MYcÖRvZš x evsjv `k mikvi, A_ gš Yvjq, exgv Dbœqb I wbqš Y KZ cÿ, m Uªvj iwus KwgwU, evsjv `k wmwkdwiwur GÐ G PÄ Kwgkb, R q U K Kv úvwbi iwróªvi, Annual Report 2013 21
evsjv `k Bbmy iý G mvwm qkb, evsjv `k Bbmy iý GKv Wwg, XvKv K G PÄ wjt Ges PÆMÖvg K G PÄmn mswkøó mkj Avw_ K cöwzôvb Ges KZ c mgyn K cwipvjk cwil` AvšÍwiK K ZÁZv Ges ab ev` Rvbv Q cwipvjk cwil` ` ki GKgvÎ cybtexgv cöwzôvb mvaviy exgv K cv ikb K Zv `i civgk Ges mg_ bi Rb K ZÁZv cökvk Ki Q cwipvjk cwil` Kv cvwbi mkj ïfvkv Lx, exgv MÖnxZv Ges evwywr K e vsk _ K cövß mn hvwmzv, c ô cvlkzv Ges Drmvn K ZÁZvi mv _ ikw f ³ Ki Q Ges Kv cvbxi m vwbz exgv MÖnxZv K D Pgvb mev cö`vb Ae vnz ivlvi A½xKvi e ³ Ki Q cwipvjk cwil` Kv úvwbi e e vcbv cwipvjk Rbve G K Gg miiqviw` PŠayix Ges Kv cvwbi mkj D Zb Kg KZ vmn me Í ii Kg KZv I Kg Pvix `i KI Zv `i DrKwl Z mevi Rb ab ev` Rvbv Q cwi k l Avwg dwv ij Bbmy iý Kv úvwbi DË ivëi DbœwZi Rb wbe vnx KwgwUi m vwbz Pqvig vb, fvbm Pqvig vb Ges cwipvjkgðjx Gi wbijm kög Ges Kv úvwbi kqvi nvìvie `i Ae vnz mg_ b, AK wîg mn hvwmzv Ges g~j evb civgk K ZÁZvi mv _ iy Kwi Ges fwel ZI Abyiƒc mg_ b-mn hvwmzv Kvgbv Kwi Avcbv `i my ^v I g½j Kvgbv Kwi Avjøvn nv dr cwipvjk cwil `i c Rqbyj Av e`xb Rvgvj Pqvig vb 22 Annual Report 2013
Annual Report 2013 23
Status of compliance with the conditions imposed by the Commission s Notification No. SEC/CMRRCD/ 2006-158/ Admin/44 dated 07 August 2012 issued under section 2CC of the Securities and Exchange Ordinance, 1969 (Report under Condition No. 7.00) Condition No. Title Compliance status (Put in the appropriate column) Not Complied complied Remarks (in any) 1.1 Board s Size FICL Board is comprised of 20 Directors 1.2 Independent Directors 1.2(i) At least one fifth (1/5) of the total number of directors in the company s Board shall be independent directors. There are two Independent Directors in the FICL Namely: Mr. A S Jahir Muhammad & Mr.Md. Rafiqul Islam 1.2(ii) a) Independent Director does not hold any share in the company or holds less than one percent (1%) shares of the total paid-up. The Independent Directors have declared their compliances. 1.2(ii) b) Independent Director is not a sponsor of the company and is not connected with the company s any sponsor or director or shareholder who holds one percent (1%) or more shares of the total paid-up shares of the company on the basis of family relationship. His/her family members also should not hold above mentioned shares in the company; Do 1.2(ii) c) Does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associated companies Do 1.2(ii) d) Independent Director is not a member, director or officer of any stock exchange Do 1.2(ii) e) Independent Director is not a shareholder, director or officer of any member of any member of stock exchange or an intermediary of the capital market Do 1.2(ii) f) Independent Director is not a partner or an executive or was not a Partner or and executive during the preceding 3(three) years of the concerned company s statutory audit firm Do 1.2(ii) g) Independent Director shall not be an independent director in more than 3 (three) listed companies Do 1.2(ii) h) Independent Director has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a bank or a Non-Bank financial Institution (NBFI) Do 1.2(ii) i) Independent Director has not been convicted for a criminal offence involving moral turpitude Do 1.2(iii) The independent director(s) shall be appointed by the board of directors and approved by the shareholders in the Annual General Meeting(AGM) 1.2(iv) The post of independent director(s) can not remain vacant for more than 9(ninety) days 24 Annual Report 2013
Condition No. Title 1.2(v) The board shall lay down a code of conduct of all board members and annual compliance of the code to be recorded. 1.2(vi) The tenure of office of an independent director shall be for a period of 3(three) years, which may be extended for 1(one) term only; 1.3 Qualification of Independent Director (ID) 1.3(i) Independent director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial, regulatory and corporate laws and can make meaningful contribution to business. 1.3(ii) Independent Director should be a Business Leader/ Corporate Leader/Bureaucrat/ University Teacher with Economics or Business Studies of Law background/ Professionals like Chartered Accountants, Cost & Management Accountants, Chartered Secretaries. The Independent director must have a least 12(twelve) years of corporate management/professional experiences. 1.3(iii) In special cases the above qualifications may be relaxed subject to prior approval of the commission Compliance status (Put in the appropriate column) Complied Not Applicable (N/A) 1.4 Chairman and CEO shall be filled by different individuals. Chairman shall be elected from among the Directors. The Board of Directors shall clearly define respective roles and responsibilities of the Chairman and the CEO. 1.5 The Director s Report to Shareholder on: 1.5(i) Industry outlook and possible future developments in the industry 1.5(ii) Segment-wise or product-wise performance 1.5(iii) Risks and concerns 1.5(iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin 1.5(v) Discussion on Continuity of any Extra-Ordinary gain N/A or loss 1.5(vi) Basis for related party transaction-a statement of all related party transactions should be disclosed in the annual report. 1.5(vii) Utilization of proceeds from public issues, rights issues and/or through any others instruments. 1.5(viii) An explanation if the financial results deteriorate after N/A the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing etc. 1.5(ix) If significant variance occurs between Quarterly N/A financial Performance and Annual Financial Statements the management shall explain about the variance on their Annual Report. Not complied Remarks (in any) Annual Report 2013 25
Condition No. 1.5(x) Title Remuneration to directors including independent directors 1.5(xi) The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity 1.5(xii) Proper books of account of the issuer company have been maintained 1.5(xiii) Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment 1.5(xiv) 1.5(xv) 1.5(xvi) 1.5(xvii) 1.5(xviii) 1.5(xix) 1.5(xx) 1.5(xxi) 1.5(xxi) (a) 1.5(xxi) (b) International Accounting Standards (IAS)/ Bangladesh Accounting Standards (BAS)/ International Financial Reporting Standard (IFRS)/ Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed The system of internal control is sound in design and has been effectively implemented and monitored There are no significant doubts upon the issuer company s ability to continue as a going concern. If the issuer company is not considered to be a going concern, the fact along with reasons thereof should be disclosed Significant deviations from the last year s operating results of the issuer company shall be highlighted and the reasons thereof should be explained Key operating and financial data of at least preceding 5(five) years shall be summarized If the issuer company has not declared dividend (cash or stock) for the year The number of Board meetings held during the year and attendance by each director shall be disclosed. The Pattern of shareholding shall be ported to disclose the aggregate number of shares (along with name wise details where stated below) held by:- Parent/Subsidiary/Associated Companies and other related parties(name wise details) Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details) Compliance status (Put in the appropriate column) Complied 1.5(xxi) (c) Executives 1.5(xxi) (d) Shareholders holding ten percent (10%) or more voting interest in the company (name wise details) N/A N/A Not complied Remarks (in any) Declared Dividend regularly. 4(four) meetings held during the year and attendance 92.50% (average) 26 Annual Report 2013
Condition No. Title Compliance status (Put in the appropriate column) Complied Not complied Remarks (in any) 1.5(xxii) Appointment/re-appointment of director. 1.5(xxi) (a) A brief resume of the director 1.5(xxii) (b) Nature of his/her expertise in specific functional areas 1.5(xxii) (c) Names of companies in which the person also holds the directorship and the membership of committees of the board. 2 CHIEF FINANCIAL OFFICER(CFO), HEAD OF INTERNAL AUDIT AND COMPANY SE4CRETARY (CS) : 2.1 The company shall appoint a Chief Financial Officer (CFO), a Head of Internal Audit (Internal Control and Compliance) and a Company Secretary (CS). The Board of Directors should clearly define respective roles, responsibilities and duties of the CFO, the Head of Internal Audit and the CS. 2.2 Attendance of CFO and the Company Secretary in the Board Meeting 3 AUDIT COMMITTEE: 3(i) The company shall have an Audit Committee as a sub-committee of the Board of Directors 5(Five) Members 3(ii) The Audit Committee shall assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business 3(iii) The Audit Committee shall be responsible to the Board of Directors. The duties of the Audit Committee shall be clearly set forth in writing 3.1 Constitution of the Audit Committee: 3.1(i) The Audit Committee shall be composed of at least 3 (three) members 3(three) members. 3.1(ii) 3.1(iii) 3.1(iv) 3.1(v) 3.1(vi) The Board of Directors shall appoint members of the Audit Committee who shall be directors of the company and shall include at least 1(one) independent director All members of the audit committee should be financially literate and at least 1(one) member shall have accounting or related financial management experience. Casual vacancy in Audit Committee shall be filled by the Board The company secretary shall act as the secretary of the Committee The quorum of the Audit Committee meeting shall not constituted without at least 1(one) independent director Annual Report 2013 27
Condition No. Title 3.2 Chairman of the Audit Committee: Role of audit committee shall include the following:- Compliance status (Put in the appropriate column) Complied Not complied Remarks (in any) 3.2(i) 3.2(ii) The Board of Directors shall select 1(one) member of the Audit Committee to be Chairman of the Audit Committee, who shall be an independent director. Chairman of the Audit Committee shall remain present in the Annual General Meeting (AGM) 3.3 Role of the Audit Committee 3.3(i) Oversee the Financial reporting process 3.3(ii) Monitor choice of accounting policies and principles 3.3(iii) Monitor Internal Control Risk management process 3.3(iv) Oversee hiring and performance of external auditors 3.3(v) 3.3(vi) Review along with the management, the annual financial statements before submission to the board for approval Review along with the management, the quarterly and half yearly financial statements before submission to the board for approval 3.3(vii) Review the adequacy of internal audit function 3.3(viii) Review statement of significant related party transactions submitted by the management 3.3(ix) Review Management Letters/Letter of Internal Control weakness issued by statutory auditors. 3.3(x) When money is raised through Initial Public Offering (IPO)/Repeat Public Offering (RPO)/Rights Issue the company shall disclose to the Audit Committee about the uses/applications of funds by major category (capital expenditure, sales and marketing expenses, working capital, etc), on a quarterly basis, as a part of their quarterly declaration of financial results. Further, on an annual basis, the company shall prepare a statement of funds utilized for the purposes other than those stated in the offer document/prospectus. 3.4 Reporting of the Audit Committee 3.4.1 Reporting to the Board of Directors 3.4.1(i) The Audit Committee Shall report on its activities to the Board of Directors 3.4.1(ii)a) Report on conflicts of interests to the Board of Directors No conflict of interest. 3.4.1(ii)b) Will report any suspected or presumed fraud or irregularity or material defect in the internal control system 3.4.1(ii)c) Will report any suspected infringement of laws, including securities related laws, rules and regulations 28 Annual Report 2013
Condition No. Title Compliance status (Put in the appropriate column) Complied Not complied Remarks (in any) 3.4.1(ii)d) Any other matter which shall be disclosed to the Board of Directors immediately. 3.4.2 Reporting to the Authorities: If the Audit Committee has reported to the Board of Directors about anything which has material impact on the financial condition and results of operation and has discussed with the Board of Directors and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignored, the Audit Committee shall report such finding to the Commission, upon reporting of such matters to the Board of Directors for three times or completion of a period of 6(six) months from the date of first reporting to the Board of Directors, whichever is earlier. 3.5 Reporting to the Shareholders and General Investors: report on activities carried out by the Audit Committee, including any report made to the Board of Directors under condition 3.4.1(ii) above during the year, shall be signed by the Chairman of the Audit Committee and disclosed in the annual report of the issuer company. 4 EXTERNAL/STATUTORY AUDITORS: The issuer company should not engage its external/ statutory auditors to perform the following services to the company, namely:- No such findings 4(i) Non-engagement of external/statutory auditors in appraisal or valuation services or fairness opinions. 4(ii) Non-engagement of external/statutory auditors in financial information systems design and implementation. 4(iii) Non-engagement of external/statutory auditors in book-keeping or other services related to the accounting records or financial statements. 4(iv) 4(v) 4(vi) Non-engagement of external/statutory auditors in broker-dealer services. Non-engagement of external/statutory auditors in Actuarial Services. Non-engagement of external/statutory auditors in Internal audit services. N/A 4(vii) Non-engagement of external/statutory auditors in any other service that the Audit Committee determines. 4(viii) No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that company 5 SUBSIDIARY COMPANY Annual Report 2013 29
Condition No. Title Compliance status (Put in the appropriate column) Complied Not complied Remarks (in any) 5(i) Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the compositions of the Board of Directors of the subsidiary company N/A 5(ii) Al least 1(one) independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company N/A 5(iii) The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company N/A 5(iv) The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also N/A 5(v) The Audit Committee of the holding company shall also review the financial statements, in particular the investments made by the subsidiary company N/A 6 Duties Of chief executive officer(ceo) and chief financial officer(cfo) the ceo and CFO shall certify to the board that: 6(i)a) 6(i)b) 6(ii) Reviewed that the financial statements do not contain any materially untrue statement. Reviewed about compliance of the accounting standard. Reviewed about fraudulent, illegal or violation of the company s code of conduct. 7 REPORTING AND COMPLIANCE OF CORPORATE GOVERNANCE: 7(i) 7(ii) The company shall obtain a certificate from a practicing Professional Accountant/ Secretary (Chartered Accountant/ Cost and management Accountant/Chartered Secretary) regarding compliance of conditions of Corporate Governance Guidelines of the Commission and shall send the same to the shareholders along with Annual Report on a yearly basis. The directors of the company shall state, in accordance with the Annexure attached, in the directors report whether the company has complied with these conditions. 30 Annual Report 2013
Pattern of Shareholding as on 31 December 2013 i) Parent/Subsidiary/Associated Companies and other related parties: Nil ii) Directors/Chief Executive Officer/Company Secretary/Chief Financial Officer/ Head of Internal Audit. a) Directors Sl. Name of Directors Share hold Attendance in Board Meetings Name of the Spouse Share hold 01. Mr. Jainul Abedin Jamal 11,93,216 4 Ms. Asma Begum - 02. Alhaj Md. Abdul Khaleque 9,29,608 4 Ms.Rokshana Yesmin 62,322 03. Alhaj Elias Siddiquee 11,93,216 4 Ms. Hamida Siddiquee 45 04. Mr. Md. Rafiqul Islam - 4 Ms.Habiba Rafiq - Independent Director 05. Alhaj Sabirul Hoque 11,65,163 4 Ms.Khaleda Hoqe - 06. Mr. Enamul Hoq (Representative of 11,93,256 4 Ms. Hasina Banu 8,92,934 M/s. Paradise Corporation (Pvt.) Ltd. 07. Alhaj Nurul Alam 11,93,216 4 Mrs.Hasina Begum 26,974 08. Ms. Khadizatul Anwar 9,30,740 4 Mr. S M Parvez Alam - 09. Alhaj Md. Lokman Chowdhury 11,93,216 4 Ms.Rayhan Chowdhury 328 10. Ms. Mamtaz Begum 9,28,948 2 Mr.Jashim Uddin 7,95,567 11. Mr. AKM Sarwardy Chowdhury 9,34,006 4 Ms.Rasheda Begum 1,05,577 12. Mr. Sunanda Majumder 11,61,050 4 Ms.Prinka Majumder - 13. Mr. Mohiuddin Chowdhury (Representative of 11,61,050 3 M/s. J S International Ltd. 14. Mr. A S Jahir Muhammad Independent Director - 4 Ms.Afzalul Nesa - 15. Mr. Ahsanul Kabir Siddiquee Public Shareholder Director 2,05,683 3 Ms.Shahanan Khader Chowdhury - 16. Ms. Israt Niveen Alam Public Shareholder Director 17. Ms. Monoara Ahmed Public Shareholder Director 18. Mr. Rokan Uddin Chowdhury Public Shareholder Director 19. Mr. Tanveer Nawaz Public Shareholder Director 20. Ms. Shahjadi Syeda Sayema Ahmed, Public Shareholder Director 28,340 1 Mohammed Abdus Salim Chowdhury 5,27,656 1,41,860 4 Alhaj Shafique Uddin 6,44,150 5,131 4 Ms.Shazeda Akter - 8,960 3 N/A 10,269 4 Mr.Fakhrul Anwar 5,48,937 b) Shareholding of CEO, CFO, CS and Head of Internal Audit Sl. Name Share hold Name of the Spouse Share hold 01. CEO-Mr. AKM Sarwardy Chowdhury 9,34,006 Ms.Rasheda Begum 1,05,577 02. CFO-Mr Simul Kanti Barua 1,127 Ms. Santa Barua - 03. CS-Sk.Md.Anwar Uddin 40 Ms.Naznin Anwar - 04. Head of Internal Audit Mr. Md. Fakhrul Islam Bhuiyan 5,736 Begum Shamsi - iii) Executives (Top 5 salaried employees, other than the Directors, CEO, CS, CFO and Head Of Audit) Sl. Name Designation Shares Held 01. Mr.Mujibul Wadud Chowdhury DMD - 02. Mr.Md.Mahabubul Alam DMD 575 03. Mr.Abu Sufian Md.Kamal Naser DMD - 04. Mr.Md.Iftekhar Hussain Chowdhury DMD - 05. Ms. Nasima Khanom Dana DMD - Annual Report 2013 31
5 (Five) Years at a Glance Figures in Million Taka 2013 2012 2011 2010 2009 Gross Premium Income 426.73 341.73 318.83 271.62 256.32 Net Premium Less Re-Insurance 254.88 229.23 203.57 176.90 158.94 Net Claims 41.82 28.98 28.20 16.78 17.72 Underwriting Profit 91.90 87.34 78.83 47.82 43.52 Investment Income 43.81 41.73 18.56 9.04 6.08 Profit Before Tax 94.49 87.90 66.50 24.84 22.07 Rate of Dividend 11% 12% 10% 12% 12% Shareholders Equity 565.81 510.07 459.15 169.41 154.87 Total Assets 1115.12 1020.62 984.85 640.68 585.73 No. of Branches 30 30 29 29 29 No. of Employees 536 465 445 438 469 No. of Shareholders 16295 14005 12848 8421 2437 Directors Certificate As per regulations contained in the Insurance Act 2010, we the directors of Federal Insurance Co Ltd certify that: 1 The value of investment in shares and debentures have been taken at cost with adequate provision for fluctuation in share price, if any. 2 The values of all assets as shown in the Balance Sheet and as classified on Form AA annexed have been duly reviewed as on 31 December 2013 and in our belief, the said assets have been set forth in the Balance Sheet at amounts not exceeding their realizable or market values under the several headings as enumerated in the annexed form. 3 All expenses of management, wherever incurred and whether incurred directly or indirectly in respect of Fire, Marine, Motor, and Miscellaneous Insurance business have been duly debited to the related Revenue Accounts and Profit and Loss Account as expenses.. AKM Sarwardy Chowdhury Alhaj Elias Siddiquee Alhaj Md Abdul Khaleque Jainul Abedin Jamal Managing Director Vice Chairman Chairman Executive Committee Chairman Board of Directors 32 Annual Report 2013
Audit Committee Report 2013 The Audit Committee comprises of the following Directors: 1. Mr.Md. Rafiqul Islam, Independent Director Chairman 2. Mr.Jainul Abedin Jamal, Chairman, Board of Directors Member 3. Alhaj Elias Siddique, Vice Chairman, Board of Directors Member 4. Mr. Enamul Hoq, Director Member 5. Alhaj Nurul Alam, Director Member During the year 2013, 8 (eight) meetings of the Audit Committee were held. All the members were present in the meeting. The Managing Director, Deputy Managing Director & CFO, EVP & Head of Internal Audit, related Branch Managers & Department Heads were also consulted as and when required. Their consultation added value as appropriate actions could be taken on the spot for necessary improvement. Purpose of Audit Committee: The role of the committee is to co-operate with the Board in discharge of responsibilities for financial as well as business discipline, financial reporting, corporate governance and internal control. The key responsibilities of Audit Committee are as follows: 1. Review the effectiveness of internal audit function. 2. Review the findings and recommendations made by the Internal auditors, 3. Review the Annual, Half yearly and quarterly financial statements. 4. Review the auditing performance of external auditors and their audit reports. 5. Other matters as per terms of reference of audit committee. Activities of Audit Committee in 2013 Approved the audit activities programme for the year 2014 Reviewed the integrity of the financial statement of the company ensuring that these reflect a true and fair view of the company s state of affairs for the year ended 31 st December 2013 Reviewed the internal auditors report and gave necessary suggestions where needed. Reviewed quarterly & half yearly financial statements of the company to evaluate the performance. Pursuant to condition # 3.4.1 of the Corporate Governance Guidelines issued by BSEC, the Audit Committee reviewed the Internal Control System and Financial Statements. The Committee did not find any material defect to inform the Board of Directors as well as shareholders. The Audit Committee would like to express their sincere gratitude to all concerned for their support to carry out the audit activities effectively. Md. Rafiqul Islam Independent Director Chairman Audit Committee Annual Report 2013 33
Auditors Report to the Shareholders of Federal Insurance Company Limited We have audited the accompanying Balance Sheet of Federal Insurance Company Limited as of 31 December 2013 and the related Fire, Marine Cargo, Marine Hull, Motor and Miscellaneous Insurance Revenue Accounts as well as the Profit and Loss Account, Statement of changes in Equity and statement of Cash Flows for the year then ended and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards (IFRSs) and Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISA) and Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements prepared in accordance with International Financial Reporting Standards (IFRSs) and Bangladesh Financial Reporting Standards (BFRSs), give a true and fair view of the state of the Company s affairs as at 31 December 2013 and of the results of its operations and cash flows for the year then ended and comply with the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. 34 Annual Report 2013
Emphasis of Matter Without qualifying our opinion as above, we draw attention to Note 12 on the financial statements, where the outstanding amount includes Tk 45,663,835 being carried forward for a long period of time and no provision made in these financial statements. We 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 the branches not visited by us; iii the Company s Balance Sheet, Profit and Loss Account and its Cash Flow dealt with by the report are in agreement with the books of account and returns; iv the expenditures incurred were for the purposes of the Company s business; v as per section 63(2) of the Insurance Act, 2010, 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 and whether incurred directly or indirectly, in respect of insurance business of the Company transacted in Bangladesh during the year under report have been duly debited to the related revenue accounts and the Profit and Loss Account of the Company; and vi as per the Insurance Act, 2010 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 to any person any commission in any form outside Bangladesh in respect of any of its business reinsured abroad. B Alam & Co Chartered Accountants Annual Report 2013 35
Balance Sheet as at 31 December 2013 Capital and Liabilities Note 2013 (Taka) 2012 (Taka) Shareholders Equity 565,813,640 510,074,888 Share capital 4.1 464,443,340 414,681,560 Reserve for exceptional losses 4.2 44,174,368 40,174,368 Revaluation reserve 4.3 4,861,275 5,117,132 Proposed 11% stock dividend (2012 @ 12%) 51,088,760 49,761,780 Fair value change account 4.4 1,088,289 247,618 Profit and loss appropriation account balance 157,608 92,430 Balance of funds and accounts 5 104,148,602 95,950,640 Fire insurance business 19,809,179 21,237,751 Marine cargo insurance business 50,302,936 44,188,389 Marine hull insurance business 1,339,735 1,234,239 Motor insurance business 20,189,113 19,474,144 Miscellaneous insurance business 12,507,639 9,816,117 Estimated liabilities in respect of outstanding claims whether due or intimated 6 39,751,922 36,746,472 Amount due to other persons or bodies carrying on insurance business 7 186,105,741 188,191,267 Sundry creditors 8 203,884,727 161,267,986 (including provision for expenses and taxes) Loans and advanes 9 3,480,000 17,937,039 Other sums owing Premium deposit account 10 11,936,969 10,452,123 1,115,121,600 1,020,620,416 Net assets value per share (NAV) 28 12.18 12.30 The accompanying notes 1 to 40 form an integral part of these financial statements. Simul Kanti Barua Deputy Managing Director and CFO AKM Sarwardy Chowdhury Managing Director Alhaj Elias Siddiquee Vice Chairman This is the Balance Sheet referred to in our report of even date, Dhaka 27 April 2014 36 Annual Report 2013