YOUR SECURITY IS OUR RESPONSIBILITYnitolinsurance.com/reports/1502861697.pdf · 11:00 AM, Monday,...

NITOL INSURANCE COMPANY LIMITED

ANNUAL REPORT 2013

YOUR SECURITY IS OUR

RESPONSIBILITY

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. ... your Security is our resposibility

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Table of C

ontents

Table of Contents

Letter of Transmittal

Notice of the 15th Annual General Meeting

Corporate Information

Company Profile

About Us

Our Products

Credit Rating Report

Corporate Management

Profile of the Directors

Letter from the Chairman to the Owners

Branch Conference

Executive Management

Message from the Managing Director

Executive Management Marketing Wing

Pictorial View

Branch Network

Financial Highlights

Directors’ Report

Status of Compliance with Corporate Governance Guidelines

Statement of Corporate Governance

Certificate on Compliance of conditions of corporate governance guidelines to the Shareholders

Responsibility Statement of Chief Executive Officer and Chief Financial Officer

Report of the Audit Committee-2013

Shareholding Pattern as at December 31, 2013

Value Added Statement

Contribution to the National Economy

Company Properties

Auditor’s Report to the Shareholders

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Nitol Insurance Company Limited

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All Shareholders, Bangladesh Securities and Exchange Commission, Insurance Development and Regulatory Authority, Registrar of Joint Stock Companies & Firms, Dhaka Stock Exchange Limited & Chittagong Stock Exchange Limited.

Annual report at the year ended on December 31, 2013

Dear Sir(s)/Madam(s):

We are pleased to present before you a copy of the Company’s Annual Report 2013 alongwith the Audited Financial Statements for the year ended December 31, 2013 for your kind information.

Yours Sincerely,

Md. Shakhawat HossainCompany Secretary

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Notice

thANNUAL GENERAL MEETING

Trust MilonayatonOld Airport Road, Dhaka Cantonment, Dhaka

11:00 AM, Monday, June 09, 2014

Notice is hereby given that the Fifteenth Annual General Meeting of Nitol Insurance Company Limited will be held at “Trust Milonayaton”, Old Airport Road, Dhaka Cantonment, Dhaka on Monday, June 09, 2014 at 11:00 A.M. to transact the following businesses:

1. Adoption of the Directors’ Report and Audited Financial Statements of the Company for the year ended December 31, 2013 together with the Auditors’ Report thereon;

2. Declaration of Stock Dividend @12% and Cash Dividend @5% for the year ended December 31, 2013;

3. Election of Directors in place of those who shall retire by rotation in accordance with the provision of Articles of Association of the Company;

4. Appointment/Re-appointment of Auditors for the year 2014 and fix their remuneration;

5. Miscellaneous, if any;

By order of the Board of Directors

Dated : 9th May, 2014 Md. Shakhawat Hossain Company Secretary

Notes :

1. 27.04.2014 is scheduled as Record Date. Shareholders, whose name will appear on the Register of Members on the Record Date, will be eligible to attend the meeting and qualify for dividend.

2. A member entitled to attend and vote at general meeting is entitled to appoint a Proxy (as per Article of Association proxy will be a member/shareholder of the Company) to attend the meeting and vote on his/her behalf. The Proxy Form duly completed, must be affixed with a revenue stamp of BDT. 20/- and deposited at the registered office of the Company not letter than 72 hours before the time of holding the meeting.

3. Members are requested to notify their change of address, if any.

N.B. : As per Bangladesh Securities and Exchange Commission (BSEC) Notification # SEC/CMRRCD/2009-193/154 dated October 24, 2013 “No benefit in Cash or kind other than in the form of Cash Dividend or Stock Dividend, shall be paid to the holders of the equity security”.

Notice of the 15th Annual General Meeting


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Certificate of Incorporation : October 4, 1999

Certificate of Commencement of Business : October 4, 1999

Certificate No. of Registration : C-38743(701)/99

Certificate of Registration from CCI : November 18, 1999

Authorized Capital : Tk. 50 Crore

Total Paid-up Capital : Tk. 21,63,67,200

Total Paid-up Share Number : 2,16,36,720@ Tk. 10 each

Initial Paid-up Capital on October 04, 1999 : Tk. 6 Crore

Paid-up Capital from IPO : Tk. 9 Crore

Date of approval of rising of capital of Tk. 9 Crore from SEC : June 23, 2005

Date of Listing of Dhaka Stock Exchange Ltd. (DSE) : November 29, 2005

Date of Listing of Chittagong Stock Exchange Ltd. (CSE) : October 10, 2005

First Trading in DSE & CSE : November 29, 2005


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Com

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Company Profile

Registered Office and Head OfficeNitol Insurance Company LimitedNitol Center (5thFloor)71 Mohakhali Commercial Area, Dhaka 1212Phone: 88-02-9857247-8,9853084, 8834321Fax: 88-02-8826184e-mail: [email protected]

Nature of BusinessAll kinds of Non-Life Insurance

Credit RatingRated ‘A’ for the year 2012 by Credit Rating Information and Services Limited ( CRISL )

AuditorShafiq Basak & Co. Chartered Accountants Shatabdi Center (6th floor) 292 Inner Circular Road FakirapoolMotijheel C/A, Dhaka

Tax AdvisorMr. Bibhuti Bhushan Saha, FCA

Overseas Claim Settling AgentW. E. Cox Claims Group (Europe) LimitedGravesend, Kent, United Kingdom

BankerJamuna Bank Limited Dutch-Bangla Bank Limited

Re-InsurerSadharan Bima CorporationKenya Reinsurance Corporation, Nairobi, KenyaAsian Reinsurance Corporation, Bangkok, ThailandMalaysian Reinsurance Berhad, Kuala Lumpur, Malaysia

Reinsurance Broker J.B. Boda & Co. (S) Pte. Ltd., Singapore Protection Reinsurance Services, W.L.L. Bahrain Reliance Composite Insurances Broking Ltd., India.

MembershipBangladesh Insurance Association (BIA)Bangladesh Association of Publicly Listed Company (BAPLC)Metropolitan Chamber of Commerce & Industry (MCCI)Bangladesh Malaysia Chamber of Commerce & Industry (BMCCI)India-Bangladesh Chamber of Commerce & Industry (IBCCI)Confederation of Asia Pacific Chamber of Commerce and Industry (CACCI)

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About Us

Our VisionOur vision is the Apex of Success. We have to reach to that goal by our modern thinking, hard labour, time-worthy decision, sincerity and unparalleled service. We are committed to our slogan “Your Security is our Responsibility”

Our Mission To provide the financial security to our clients, with utmost good faith, sincerity and

dedications. To provide service to the insuring community, according to their need and expectation. To conduct business fairly, honestly and with transparency.

Our Objectives To follow utmost good faith & other principles of insurance strictly. Best services to our clients. Protection of Investment of our Shareholders. Welfare of our Employees. Due revenue collection for the Government. Ethical and moral social order. Good governance for us and all around us. Transparency in disclosures.

About Us

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Our Products

Our Products

Overseas MediclaimBusiness and Holiday (B&H)Employment and Study (ESS)

Marine Insurance

Property Insurance

All types of Marine Cargo Insurance

All types of Marine Hull Insurance

Fire Insurance (including Allied Perils)Property Damage All Risks Insurance

Industrial All Risks Insurance including Machinery Breakdown &

Business Interruption InsurancePower Plant Operational Package Insurance

Household All Risks Insurance

Motor InsuranceAutomobile Comprehensive Insurance

Automobile Act Liability Insurance

Miscellaneous InsurancePublic Liability InsuranceProduct Liability Insurance

Burglary and Housebreaking Insurance Cash-in-Transit Insurance, Cash-in-Safe Insurance

Cash-on-Counter Insurance Fidelity Guarantee Insurance Personal Accident Insurance

Workmen's Compensation Insurance Aviation Insurance

Engineering InsuranceMachinery Insurance (Machinery Breakdown) (MBD)

Deterioration of Stock Insurance (DOS)Boiler & Pressure Vessel Insurance (BPV)

Electronic Equipment Insurance (EEI)Erection All Risks Insurance (EAR)

Contractor's All Risks Insurance (CAR)


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Corp

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Composition of Board of Direction & its Committees

Board of Directors

ChairmanA.K.M. Monirul Hoque

Vice ChairmanMd. Anowar Husain, FCMA

DirectorsZobair Humayun KhandakerMahmudul Hoque ShamimMd. Abul Hossain [Representative of ICB] Chandra Shekhar Das, FCA [Representative of Pragati Life Insurance] Al Batuni Mohammad Sayed Ahmed

Independent DirectorsMd. Mamunur Rasid, FCMAProf. Dr. Mojib Uddin Ahmed

Managing Director & CEO S.M. Mahbubul Karim

Audit Committee

ChairmanMd. Mamunur Rashid, FCMA

MembersMd. Anowar Husain, FCMA Zobair Humayun Khandaker Mahmudul Hoque Shamim

Claims Committee

ChairmanA.K.M. Monirul Hoque

MembersMd. Anowar HusainS.M. Mahbubul Karim

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Mr. A.K.M Monirul Hoque started his busi-ness career in 1982 when he established a partnership vocational training center, Swift Engineering and Technological Training Center (SETTC), to train and improve the proficiencies of people in diverse fields such as driving, computer skills, tailoring along with shorthand, and so on. He founded this estab-lishment when he was just 20 years old, while undergoing a Bachelor of Commerce (B.COM) Degree under Dhaka University. Additionally, Mr. Hoque has a Masters in Commerce Degree (M.COM) under Dhaka University, concentrat-ing in Management.

In 1984, Mr. Hoque Joined as Executive Direc-tor of Nitol Motors Limited (NML)-the sole distributor of the distinguished Indian com-pany called TATA Motors LTD (TML). Mr. Hoque was the lead of marketing TML vehicles and directly involved in the sales and promotion of products for 21 years, till December 2005.

Mr. Hoque is also the Founder Chairman of Nitol Insurance Company Limited (NICL), a Non-life Public Limited Company, which he established in 1999; he started being involved with the company fulltime since January 2006. In 2005, the premium income of NICL was TK7.66 cr. After Mr. Hogue’s involvement, there was a prominent increase in e�ciency and improvement. In 2013, the premium income

raised to Tk.42 cr, growth of 448% in 8 years, average 56% growth per year.

Mrs. Naeema Hoque, wife of Mr. Hoque, completed her BA (Honors) and Masters of Arts (MA) in Philosophy from Dhaka University.

The couple is blessed with two daughters. The elder daughter Ms. Salwa Tabassum Hoque, is double Majoring in Communications (with concentration in Society and Technology) and English Literature (Honors) at the University of Washington (UW) in Seattle, USA. Younger daughter Ms. Wasfia Tabassum Hoque, insti

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tutionally proficient in both French and the Piano, is studying in the 10th Grade in Scholas

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tica School, Dhaka.

Mr. Hoque loves exploring new countries and has travelled all over the world divulg

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ing in the Diverse cultures, which enable him to understand, appreciate and interact with people of various backgrounds with di�erent ethnicity and tradition. He holds the notion that exploring, traveling and learning about other cultures broaden perspective and allows the ability to embrace people of diversity and di�erence.

Apart from that, Mr. Hoque enjoys playing Golf and Snooker regularly. He loves to watch various sports such as Football, Tennis, and Formula1 and so on; Cricket is his favorite sport.

Mr. Hoque is an actively social person; he is member of various notable clubs and associa

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tions in the country:-

A.K.M. Monirul HoqueChairman

EXECUTIVE MEMBER: Bangladesh Insurance Association (BIA) for 2011-12 & 2013-14

GENERAL BODY M EMBER : Federation of Bangladesh Chamber of Commerce and Industries (FBCCI) India Bangladesh Chamber of Commerce and Industries (IBCCI) Bangladesh Malaysia Chamber of Commerce and Industries (BMCCI) Metropolitan Chamber of Commerce and Industries (MCCI) Bangladesh Association of Publicly Listed Companies (BAPLC)Bangladesh-Korea Chamber of Commerce and Industry (BKCCI)Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI)

CLUB MEMBERS :Dhaka Club Limited, Uttara Club Limited, Narayanganj Club Limited, Kurmitola Golf Club

Limited, Savar Golf Club, Narayanganj Rifle Club, Baridhra Society , Gulshan Shooting Club, Fu-Wang Bowling Club

Mrs. Hoque is the permanent member of Baridhara Cosmopolitan Club Limited (BCCL), Life member of Baridhara Society and involved in many social and charitable organizations.

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Md. Anowar Husain Vice Chairman

Mr. Md. Anowar Husain, a Fellow of Cost and Management Accountants form London, FCMA (LONDON), FCMA (Dhaka).had been in the UK about 25 years and after returned from the UK, joined as a Sponsor Director of Nita Co. Ltd. in 1991 a Joint Venture with TATA Motors Ltd.India, and also Sponsor Director of Nitol Insurance Co. Ltd. (a Publicly Traded Company). He has nearly 57 years working experience in home and abroad in various type of Organiza-tions and Establishments in the UK & Middle East. Participated in many International Busi-ness Meetings, Seminars & Fairs in home & abroad, active number of the high level policy making body in respect of financial invest-ments, and developments and looking after the whole financial assets of the NITA Co. Ltd as Finance Director.

Traveled most of the European countries, USA, Middle East and some Southeast Asian coun-tries. Active member of some non-political, social, cultural and religious organizations, Wife Nazme Ara Husain M.A (Dhaka University) is the Director of Nita Co. Ltd. and also Treasurer of Bangladesh Women Chamber of Commerce & Industries. Blessed with two Daughters Natasha Husain Radiologist (USA) & Bipasha Husain, MBA (USA) both are married now are living in USA.

Zobair Humayun Khandaker Director

Mr. Zobair Humayun Khandaker was born in September 21st 1970. His father late Humayun Kabir Khandaker was a successful Industrial-ist & past Sponser Shareholder/Director of the Company. Mr. Zobair did his BBA from University of California, Los Angles & MBA From Indiana University, USA.

He is now engaged with various National & Multinational Organization as well as he is a Proprietor of Bangle Pipe & Serenity Industries, Vice-President of Wave Tektronic LIc. (USA), CEO of Trilink Exports (USA) and Chairman of E-Cash Ltd. & Decorous Event and Amusement Ltd.

Mahmudul Hoque Shamim Director

Mr. Mahmudul Hoque Shamim is a renouned businessman. He is a Sponsor Shareholder Director of the Company. He has completed M.Com & C.A. (Course completed) and also Fellow of Institute of Management Consultant Bangladesh (IMCB).

He is associated with FAS Finance & Invesment Ltd. as Sponsor Shareholder and Director of Alight Real Estate Ltd. & L-Tech Bd. Ltd.

He is a member of Army Golf Club.

The spouse of Mr. Mahmudul Hoque Shamim is Mrs. Amena Hossain Lucky (B.Sc., Hons., M.Sc.). They have two childrens are Mr. Ahnaf Shahriar Hoque (Son) & Arisha Hoque (Daughter).


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Md. Abul Hossain Director, (Representative of ICB)

Mr. Md. Abul Hossain is a B.Sc. (Honrs) in Statistics & also M.Sc. in Statistics from Jahangirnagar University, Dhaka. Now he is working in Investment Corporation of Bangladesh (ICB) as General Manager.

He has a vast knowledge regarding Computer Systems & its various programming i.e. Fortran, COBOL, BASIC, FoxPro, Clipper, Oracle RDBMS, Developer in different platforms of DOS, WINDOWS, UNIX (AT&T, SCO, NCR) & Windows server. He has successfully completed various training & workshop in different computer related subjects. He is also experienced in System Analysis, Development, Implementation & Management of Database System, Expert in advanced High Level Programming Language/Logic and skill in conceptual & designing of RDBMS.

Mr. Hossain is an Associate Member of Bangladesh Computer Society.

Mr. Md. Abul Hossain is also Director of Islami Bank Bangladesh Ltd., Alltex Industries Ltd., ICB Securities Trading Company Ltd. & Chairman of Aziz Pipes Ltd. nominated by ICB.

Chandra Shekhar Das, FCA, Director, [Representative of Pragati Life Insurance]

Chandra Shekhar Das was born in Jhalakati in 1975.After completion of Master Degree; he became Chartered Accountant from the Institute of Chartered Accountants of Bangladesh (ICAB) in 2009 and working with Pragati Life Insurance Limited as DMD (F&A).

He wrote various articles on economic, insurance etc in national daily.

He participated in many seminars, workshops, training program.

Al Batuni Mohammad Sayed Ahmed Director

Mr. Al-Batuni Mohammad Sayed Ahmed is a public shareholder Director of the Company. He has studied B.Sc. in Computer Engineering in AIUB & Verginia Tech., USA and previously has done A-Levels & O-Level. Currently he is working as a Vice President in one of the Multinational Companies in Bangladesh. He has also been working in the Sales & Marketing of the Telecommunication Sector for the last eight years. He has successfully completed some Internationally acclaimed Leadership Programs.

In personal life, he is married & has two daughters.

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Md. Mamunur Rashid FCMA Independent Director

Md. Mamunur Rashid FCMA, a Fellow Member of the Institute of Cost & Management Accountants of Bangladesh (ICMAB) obtained his undergraduate degree in Bachelors of Commerce in the year 1987 and his post- graduation degree in Masters of Commerce (Management) in the year 1989, securing First Class 2nd Position and First Class 4th Position respectively both under the University of Dhaka.

He is serving as Deputy Managing Director at Index Group of Companies. His career lifted off when he started as an officer of Bangladesh Steel & Engineering Corporate (BSEC). After that he accumulated a wealth of experience via serving in the following influential designations and esteemed organizations: He served as Chief Financial Officer at Kazi Farms Group, Director of Finance at Sheba Phone, Financial Controller & Company Secretary at Summit Power Limited, Chief Accountant at BRAC-Aarong, and Finance Manager at Desh Group of Companies. He also served in Government organizations namely, Bangladesh Power Development Board (BPDB) and Bangladesh Parjatan Corporation (BPC).

Mr. Mamun has been serving as the Independent Director of West Zone Power Distribution Company Ltd (WZPDCL)-an Enterprise of Bangladesh Power Development Board. He has been serving as the Council member of ICMAB. He also served as the Executive Secretary of South Asian Federation of Accountants (SAFA) for the year 2013.

Professor Mojib Uddin Ahmed, Ph.D Independent Director

Professor Mojib Uddin Ahmed, Ph.D has a long 30 years of teaching experience in home and abroad (Bangladesh, Fiji, Lebanon, USA). Now Mr. Mojib acts as Chairperson, Department of’ Tourism and Hospitality Management, Dhaka University.

Professor Mojib Uddin Ahmed obtained Ph.D. in Finance, Virginia, USA, Master of Accounting Science, University of Illinois at U-C, Illinois, USA, Master in Accountancy, University of Glas-gow, Scotland, UK and Master of Commerce & Bachelor of Commerce, University of Dhaka, Bangladesh.

Professor Mojib got Fellowships of Common-wealth Scholarship, Fulbright Scholarship, University Grants Commission Scholarship and Merit Scholarship.

He also obtained the Dean’s Research Award and Dr. Md. Habibullah Foundation Gold Medal.

Professor Mojib has 17 (Seventeen) Refereed Publications in the various International Jour-nal and participated and presented Research Works in 18 (Eighteen) International Confer-ences in different parts of the world (USA, Canada, Thailand, Spain, Hong Kong). His areas of Interest is Accounting, Finance, Tourism, Hospitality Management.

S. M. Mahbubul Karim, Managing Director & CEO

Mr. Karim did his Masters Degree (MSS) in Public Administration from the University of Dhaka in the year 1985. He has started his insurance career with United Insurance co, Ltd. in 1986. He worked there till 2000 and held the responsibility of Re-insurance and Specialized Underwriting as the Department In-charge. In July 2000 he joined Nitol Insurance Co. Ltd. and held responsibility of Underwriting, Reinsurance & Claims Department as in-charge. In 2006, he took the responsibility of “Company Secretary”. He became the Managing Director & CEO of Nitol Insurance Co. Ltd. on 1st January, 2012.

He has long 28 (Twenty Eight) years practical job expe-rience in leading private non-life insurance companies having wide experience in Underwriting, Reinsurance, Claims, HRD and Secretarial & Corporate Affairs.

He attended various training programmes on insurance & reinsurance at home & abroad i.e. Management of Reinsurance Portfolio at National Insurance Academy (NIA), Pune, India, Risk Under-writing & Re-insurance conducted jointly by ACR Retakaful, Malaysia & J.B. Boda BrokerageAgen-cies, Malaysia, attended training programmes organized by Bangladesh Insurance Academy, jointly with Asian Re and Munich Re on Reinsur-ance and Specialized Underwriting, attended training programs on Corporate Governance organized by Dhaka Stock Exchange Ltd. and also attended various insurance related courses and seminars organized by Bangladesh Insurance Academy and Bangladesh Insurance Association

He has been selected by the Bangladesh Insurance Association (BIA) as a resource person to provide lecture at the training program of Insurance Officials of Private Insurance Companies conducted by Bang-ladesh Insurance Association (BIA). He is also a mem-ber of the Reinsurance sub Committee of the Bangladesh Insurance Association (BIA).


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Excellence

Assalamu Alaikum

I am delighted to welcome you to the Annual General Meeting of your company, the Nitol Insurance Company Limited, considering your continuous support and cooperation, a great source of strength for the progress of the Company towards the successful future, I, on behalf of the company, greet jubilant supporters and congratulate all other insurance companies for their progress and development that we altogether achieve. The company has completed yet another successful year of operations by fulfilling the promised and long cherished corporate objectives as determined by the Board of Directors by following the timely directions of IDRA.

To look back over our shoulder, the global economy as well as the national economy is recovering from the recession and we can

feel the growth of insurance business (both Life insurance & Non-Life Insurance). As we know, the country’s economic growth is particularly relevant to the growth of Non-Life Insurance sector. But, unfortunately, we remain stagnant in comparison to India, China and other emerging developing countries in insurance sector.

Socio economic scenario

In the socio-economic scenario of Bangladesh, there are a lot of obstacles as insurance market in Bangladesh remains extremely competitive due to existence and operation of a large number of companies, un-consummate with the size of the market but we are hopeful for better future as you know that no economic development is truly possible without the

We are guided in everything we do by a strong sense of purpose, honesty, business ethics and pursuit of excellence to conduct our business well

... Our financier’s trust, dedicated efficient personnel and the right marketing strategy enable us to satisfy our clients. We will remain true to our philosophy of high ethical standards and the pursuit of excellence in all our efforts.

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Letter from the C

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proper development of Insurance Industry. And a robust economic growth covering trade, commerce and industry positively impacts on the non-life insurance business development. To make true development Insurance market need capturing vast majority of people under the insurance service as well as to explore rural markets in the context of micro-credit being used as a weapon of poverty alleviation.

Pursuit of Excellence

Dear shareholders, Nitol Insurance Co Ltd (NICL) has succeeded for a number of reasons. We are guided in everything we do by a strong sense of purpose, honesty, business ethics and pursuit of excellence to conduct our business well. Our financier’s trust, dedicated efficient personnel and the right marketing strategy enable us to satisfy our clients. We will remain true to our philosophy of high ethical standards and the pursuit of excellence in all our efforts.

Honorable Shareholders, despite a lot of hurdles and obstacles in our national life, we have achieved our business targets. As you are concerned our targets were to combine the whole branches under the umbrella through real time online branch network, to maintain Good Governance, to expand businesses through branches and to increase 18 branches to 23 branches. As a result, Premium Income and Net Profit has increased substantially. At the same time Net Asset Value per share has also been increased compare to last year. All this financial performance has been described in the Directors report.

Internal Controls & Risk Mitigation

The company’s well defined organization structure, predefined authority levels, documented policy guidelines and an extensive system of internal controls ensure optimal utilization and protection of resources, reporting of financial transactions and compliance with applicable laws and regulations. The company has adequate systems of international control in place. This is to ensure that your assets are safeguarded against loss from unauthorized use or disposition. We have set very high standards to protect our people and operate our business.

Moving forward

With the decisions we have made this year, the strategy we have put in place, the organization we have designed, the talent we have, and the team we are creating, we are well-positioned to deliver business growth into the future. We have seen incredible results in the past. The company will maintain its utmost positive strategy in achieving growth in business and profitability in the years to come and would look forward to continuation successfully and effectively. I am optimistic not only as the Chairman but as an investor also. Working at NICL has been a thrilling experience. And I know our best days are still ahead.

Acknowledgement

We thanked BIA for working like a friend as a negotiator. We must appreciate for their active participation for promote the benefits of Insurance to the Govt., Regulator, Policy Maker and the public. BIA organized first time an “Agriculture and Micro Finance: Experience in Afro-Asian Region” on 10th & 12th February, 2013 which was inaugurated by the Honorable Prime Minister H.E. Sheikh Hasina. I also thankful to the members of BIA for selecting me as an Executive Committee Member for two terms repeatedly (2011-2012, 2013-2014).

Special thanks go to Securities and Exchange Commission, IDRA, Registrar of Joint Stock Companies & Firms, Dhaka Stock Exchange Limited as well as Chittagong Stock Exchange Limited. As well as the authorities of the People’s Republic of Bangladesh for their harmonious, heart rending support.

Thank you all. I look forward to seeing you at our 15th Annual General Meeting.

Warm regards,


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Letter from the C

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With the decisions we have made this year, the strategy we have put in place, the organization we have designed, the talent we have, and the team we are creating, we are well-positioned to deliver business growth into the future. We have seen incredible results in the past. The company will maintain its utmost positive strategy in achieving growth in business and profitability in the years to come and would look forward to continuation successfully and effectively. I am optimistic not only as the Chairman but as an investor also. Working at NICL has been a thrilling experience. And I know our best days are still ahead


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Branch Conference

Branch ConferenceExecutives of Head Office & Branches are seen with the Chairman at the Branch Conference

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Executive ManagementHEAD OFFICE

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Executive Managem

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1. Mr. S.M. Mahbubul Karim Managing Director & CEO

2. Mr. Mohammed Nasir Uddin Additional Managing Director & Head of Marketing

3. Mr. Tapas Kumar Podder Assistant Managing Director & Head of Operation Division

4. Dr. Mahbub Alam General Manager & Head of Admin & HR Department

5. Mr. Md. Altaf Hossain General Manager & Chief Financial Officer (CFO)

6. Mr. Md. Altaf Hossain General Manager & Head of Claims Department

7. Mr. Md. Abdul Wahab Deputy General Manager & Head of Underwriting Department

8. Mr. Md. Shakhawat Hossain Deputy General Manager & Company Secretary

9. Mr. Abdullah Al Mamun Tazu Head of Branch Monitoring & Business Development Department [Not showing in the group picture]

10. Mr. Md. Jakir Hossin Bhuiyan Taupu Assistant General Manager & Head of Internal Audit

11. Mr. Md. Nazrul Islam Deputy Manager & Head of Re-insurance Department

12. Mr. Khalid Hasan Talukder Head of IT

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Message from the Managing Director

Message from the

Managing Director

S.M. Mahbubul KarimManaging Director & CEO

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Message from

the Managing D

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Dear Shareholders, valued clients and well wishers,Assalamu Alaikum

I express my heartfelt thanks and greetings to all of you for attending the 15th Annual General Meeting of Nitol Insurance Company Limited. I am extremely happy and grateful to the Almighty Allah SWT that we have been successful to arrange the Annual General Meeting in time and presenting the Annual Report and Accounts for 2013.

As you are aware that the political environment of the country was not favorable for the business last year. Instead of that we have marked a healthy growth in our business. Our premium income grown by 45% underwriting profit by 41% and Net profit after tax by 31% over the last year. All other financial indicators of the company shows positive growth.

Inshallah we will be able to achieve remarkable business in 2014 if the business environment remains favorable.

This was possible only because of the dedication and effort by all our employees, support from our customers and above all the valuable guidance of our honorable Chairman & Board. I take this opportunity to thank each of them and look forward to receive their constant support though out the coming years.

We have a reputation of good client’s service and we are working hard to further improve this services gradually to the apex of excellence by maintaining the criteria and guidelines of the conventional recognized system and abiding by the law of the country. As you are aware of the fact: that our company has equipped to provide all types of Non Life Insurance Service for our valued clients. We do not mean only business but business with satisfaction to valued clients.

The company’s overall business activity and its business operations in 2013 are very promising. To cope up with the present trend of business and the demands of the clients, the management has reviewed the underwriting Risks, risk related to asset management and Insurance and reinsurance risk. We manage our operation with timely initiatives and by abiding the rules and regulation of the Insurance Development and Regulatory Authority, Securities and Exchange Commission, Registrar of Joint Stock Companies & Firms, Dhaka Stock Exchange Limited, Chittagong Stock Exchange Limited as well as other relevant authorities.

Our motto is that Good Governance in Corporate Sector includes transparency, accountability, fairness and responsibility. We believe

the true and effective Corporate Governance for the growth, and development. So the issues of Corporate Governance are continuously receiving priority and keen attention in all aspects of the company’s Management. It is our firm determination and wishes to attend the highest peak in this arena to keep our promising standard in maintaining the Good Governance.

We are hopeful that in the years to come, our valued shareholders, clients, and well wishers will continue their esteemed flow of love, affection and helping hand and will thus make the pavement of the better future where we will be at the highest pick of Non-life Insurance in Bangladesh.

Best regards,

S.M. Mahbubul KarimManaging Director & CEO

As you are aware that the political environment of the country was not favorable for the business last year. Instead of that we have marked a healthy growth in our business. Our premium income grown by 45% underwriting profit by 41% and Net profit after tax by 31% over the last year


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Executive ManagementMARKETING WING

Mohammed Nasir Uddin A.B.M. Mir Hossain KMN Abu Omar Md. Mominul Islam Additional Managing Director & Chief Consultant Deputy Managing Director Deputy Managing Director & Head of Marketing Head of Bijoy Nagar Branch

Md. Yunus Khan Jashim K.A. Hasan Chunnu Chandan Seal Tariq Mahmud Deputy Managing Director & Consultant Business Coordinator Assistant Managing Director & Head of Zonal Office, Chittagong Uttara Branch Narayangonj Branch Head of Joydevpur Branch

Saker Ahmed Md. Wahidur Rahman Md. Mostafa Kamal Chowdhury M.M.A. Moquit Assistant Managing Director & Assistant Managing Director & Executive Director & Business Consultant Head of Kawran Bazar Branch Head of Dhanmondi Branch Head of Bangshal Branch Gulshan Branch

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Executive Managem

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S.M. Hasan Uddin Md. Enamul Hoque Md. Azharul Islam Kajol Chakroborthy Sr. General Manager & Senior General Manager General Manager & General Manager, Head of Jubilee Road Branch, Chittagong Dilkusha Branch Head of Khulna Branch Zonal Office, Chittagong.

Md. Rafiqul Islam Mynul Kabir Md. Murad Md. Atiqur Rahman Md. Abdus Sobur General Manager & General Manager General Manager & General Manager & Head of Khatungonj Branch, Chittagong Zonal Office, Chittagong. Head of Rajshahi Branch Head of Rangpur Branch

Toslim Uddin Golam Mohammad Alimuddin M. Muzammel Hoque Md. Kamruzzaman Bhuiyan General Manager, General Manager General Manager & General Manager & Zonal Office, Chittagong. Dilkusha Branch Head of Comilla Branch Head of Agrabad Branch


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Md. Shafiqul Alam Khandaker Mosabber Hossain Porag Md. Abdus Samad Md. Shahidul Islam General Manager, General Manager Business Consultant Business Consultant Zonal Office, Chittagong. Dilkusha Branch Dinajpur Branch Joydevpur Branch, Gazipur

Nozmul Hoque Chowdhury Kabir Uddin Ahmed Md. Asiqur Rahman Md. Nazrul Islam Deputy General Manager & Deputy General Manager & Deputy General Manager & Assistant General Manager & Head of Sylhet Branch Head of Uttara Branch Head of Jessore Branch Head of Kushtia Branch

Md. Borhan Uddin Chowdhury Md. Shamim Kabir Hasanuzzaman Khan Senior Manager & Manager & Head of Bogra Branch (C.C) Head of Narayangonj Branch Head of Dinajpur Branch

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Pictorial View

Pictorial View14TH AGM


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Pictorial View

Managing Director signing an agreement with IT Consultant

Claim Cheque hand over to DEPZ Foreign Client

Signing Ceremony between Nitol Insurance Company

Limited and FAS Finance & Investment Limited

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Pictorial View

Claim Cheque hand over to a Client at Khulna

Nitol Insurance sponsored Tech Fiesta IT Fair of North South University

Opening of Khatungonj Branch, Chittagong


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Branch Network

Dilkusha Corporate BranchI/A Dilkusha CA. (4th Floor), Dhaka 1000Phone : 9570600, 9515287 Fax : 02-9570266Email : [email protected]

Gulshan BranchSheba House (5th Floor)House 34, Road 46, Gulshan 2, Dhaka 1212Phone : 8812849, 8825547 Fax : 02-8825547 Email : [email protected]

Bijoy Nagar BranchSkylark Point (5th Floor)24/A Bijoynagar, Dhaka 1000Phone : 8318166 Fax : 02-8318716Email : [email protected]

Zonal Office, ChittagongYunusco City Centre (1 Oth Floor)809 CDA Avenue, GEC More, ChittagongPhone : 031 -2858171 -2 Fax : 031-2858173Email : [email protected]

Karwan Bazar BranchHafiz Mansion (1st Floor), 33 Kazi Nazrul Islam SarakKarwan Bazar, Dhaka 1215Phone : 9104337 Fax : 02-9126539Email : [email protected]

Joydevpur BranchM. N. A. Complex (1st Floor)Joydevpur Chowrasta, Mymenshing Road, GazipurPhone : 9262620 Fax : 02-92663795Email : [email protected]

Dhanmondi BranchCNS Tower (2nd Floor), 43/R/5-AWest Panthapath, Dhaka 1205Phone : 9101089 Fax : 02-8150863Email : [email protected]

Bangshal BranchMazed Court (2™ Floor), 16/1 North South RoadSiddique Bazar, Bangsal, DhakaPhone : 9578327Fax : 02-9578328Email : [email protected]

Jubillee Road Branch263 Hoo Plaza (3rd Floor), Jublee Road, ChittagongPhone : 031 -2858747 Fax : 031-2858198Email : [email protected]

Khulna Branch76 Khan-A-Sabur Road (2nd Floor)Friends Arcade Market KhulnaPhone : 041-2831177Fax : 041-723352Email : [email protected]

Khatungonj BranchSalma Tower (3rd Floor)398/A Khatungonj, ChittagongPhone : 031 -2855701Fax : 031 -2855700Email : [email protected]

Rajshahi BranchJamal Super Market (2nd Floor)96 Mia Bari,Word No 12,Boalia, RajshahiPhone : 072-177298Email : [email protected]

Rangpur BranchShorif Building (1st Floor)Station Road, RangpurPhone : 0521-56211Fax : 0521-56211,60717Email : [email protected]

Agrabad BranchDaar-E-Shahidi Building (3rd Floor)Room 8-9, 69 Agrabad CA, ChittagongPhone : 031 -2520757, Fax : 031-2517739Email : [email protected]

Comilla BranchSattar Khan Complex (4h Floor)Kandir Par, Comilla-3500Phone : 01711972062Email : [email protected]

Sylhet BranchShahib Shopping Complex (1st Floor)East Zindabazar, SylhetPhone : 0821-727884 Fax : 0821-727885Email : [email protected]

Uttara BranchA. B. Super Market (3rd Floor)Plot 60, Road 2, Sector 3, Uttara CA, Dhaka 1230Phone : 8952833 Fax : 02-8958944 Email : [email protected]

Jessore Branch36 M. K. Road, Jessore Town, JessorePhone : 0421-68436 Fax : 0421-68436Email : [email protected]

Branch Network

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Branch Netw

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Kushtia BranchLovely Tower (6th Floor)55/1 Shirajuddowla Road, KushtiaPhone : 071 -71675 Fax : 071 -71675Email : [email protected]

Narayangonj Branch127 (Old), 194 (New)BB Road (1st Floor), NarayangonjPhone : 7643953 Fax : 02-7643754Email : [email protected]

Dinajpur BranchHotel Shetal Plaza Station Road, DinajpurPhone : 0531 -63685 Fax : 0531-63068Email : [email protected]

Bogra BranchMunshi Plaza (3rd Floor) Jhawtala, BograPhone : 051-60717 Fax : 051-60717Email : [email protected]


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Financial Highlightsfigures in Taka

Particulars 2013 2012 2011 2010 2009

Financial Position Total Assets 769,825,676 618,658,747 554,250,679 504,720,396 417,326,636

Investment 343,290,113 274,011,113 257,094,843 235,667,843 196,514,420

Cash & Cash Equivalents 387,079,719 289,181,973 299,351,800 264,234,261 229,170,163

Fixed Assets 79,650,060 66,890,505 73,312,802 79,652,196 79,725,764

Investment & Other Income 38,569,804 34,768,016 24,638,895 18,798,602 36,204,567

Current Assets 274,511,784 250,002,156 171,491,234 147489096 97516289

Current Liabilities 204,333,399 165,186,772 152,140,807 130414993 98742092

Total Reserve & Surplus 352,125,077 249,351,975 213,109,872 206,305,403 168,584,544

Operational Position Gross Premium 425,993,247 294,617,735 348,127,065 336,535,513 215,283,863

Re-lns. Premium 60,732,722 78,118,001 83,945,500 69,181,161 49,418,869

Net Premium 365,260,525 216,499,734 264,181,565 267,354,352 165,864,994

Claim Paid 64,324,909 47,810,702 52,681,122 50,337,263 29,525,128

Underwriting profit 75,547,960 53,609,376 43,682,665 45,722,472 28,202,789

Net Profit Before Tax 97,625,892 72,671,727 55,852,237 52,986,037 52,859,016

Tax Provision 20,382,824 16,610,388 18,074,942 16,837,786 11,433,645

Net Profit After Tax 77,243,068 56,061,339 37,777,295 36,148,251 41,425,371

Net Operating Cash flow per share 3.85 3.19 2.52 2.68 3.41

Financial Ratio Dividend in stock 12% (Proposed) 6% 8% 12.50% 12%

Dividend in cash 5% (Proposed) 10% 5% - -

Earning Per Share 3.57 2.75 2.00 2.15 2.76

Equity Position Paid-up Capital 216,367,200 204,120,000 189,000,000 168,000,000 150,000,000

Net Asset Value per share 17.65 16.33 15.6 15.79 16.67

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0

100

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2009 2010 2011 2012 2013

Gross Premium Net Premium

010

20

30

40

50

60

70

80

Investment & Other IncomeUnderwriting profit

2009 2010 2011 2012 2013

0

20

40

60

80

100

2009 2010 2011 2012 2013

Net Profit After Tax Net Profit Before Tax

0100

200

300

400

500

600

700

800

2009 2010 2011 2012 2013

Investment Total Assets

010

20

30

40

50

60

70

80

2009 2010 2011 2012 2013

Claim Paid

FIGURE IN MILLION BDT


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Directors’ Report

Dear ShareholdersASSALAMUALAIKUM

On behalf of my colleagues in the Board of Directors of Nitol Insurance Company Limited, I take this opportunity to welcome you all to the 14th Annual General Meeting of the company and take the privilege of presenting the Annual Report together with the Audited Financial Statements including Balance Sheet as at 31st December, 2012 Profit & Loss Accounts, Revenue Accounts and the Cash Flow Statement for the year ended 31st December 2012 and the Auditors’ Report thereon.

REFERRALIn compliance to the provisions of Section 184 of the Companies Act 1994, Rule 12 (and the schedule there under) of the Securities and Exchange Rules 1987 and IAS-1 (International Accounting Standards - 1) codes as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), the Annual Report of the Directors containing the Audited Financial Statements are submitted.

INSURANCE BUSINESSThe economy of Bangladesh is a rapidly developing market-based economy. The per capita income in 2012 was estimated to be US$2,100 (adjusted by purchasing power parity). According to the International Monetary Fund, Bangladesh ranked as the 37th largest economy in the world in 2012 in PPP terms and 36th largest in nominal terms with a gross domestic product of US$397 billion in PPP terms and US$174 billion in nominal terms. The economy has grown at the rate of 6-7% per annum over the past few years. More than half of the GDP is generated by the service sector; while nearly half of Bangladeshis are employed in the agriculture sector. Other goods produced are textiles, jute, fish, vegetables, fruit, leather and leather goods, ceramics, ready-made goods. Bangladesh is considered as the next Asian Tiger Economy.

In Bangladesh, the Insurance business, after and early stage of dislocation, adventure and experimentation through last 40 years has now being established as a promising Industry distributed between the public and private sectors. At present there are 45 non-life insurance companies running in Bangladesh. The growth of Bangladeshi Non-life insurance companies’ premium income in 2012 was 11.6 percent. The 43 private insurers and one Government Corporation in the general insurance sector earned TK 21,475 million in 2012.

Honorable Shareholders, despite a lot of hurdles and obstacles in

our national life, we have achieved our business targets. As you are concerned our targets were to combine the whole branches under the umbrella through real time online branch network, to maintain Good Governance, to expand businesses through branches and to increase 18 branches to 23 branches. As a result, Nitol Insurance’s Gross Premium Income increased 44.59%, Net Premium Income increase 68.71%, Net Profit after Tax increase 30.65%, Net Asset Value increase 13.92% compare to the last year. In 2013, the Net Asset Value per share stand is 17.65 as against 16.33 in the previous year 2012 and Earning Per Share (EPS) after Tax is 3.57 as against 2.75 of the last year 2012. Therefore, our Board of Directors assures that we are in right path and in near future we will become a major Insurance Company in our Insurance sector.

CORPORATE PERFORMANCE :1. Gross Turnover (Premium) :

During the year 2013 the Company earned a premium of Tk. 425,993,247 in compared to Tk. 294,617,735 of 2012.

a) Fire Insurance

During the year 2013 Gross Premium under Fire Insurance Business is Tk. 76,520,187 as against Tk. 58,189,792 in 2012.

b) Marine Insurance

In the year 2013 Gross Premium Income from Marine Cargo & Hull Insurance business is Tk. 99,751,232 in compared to Tk. 85,699,727 in the previous year 2012.

c) Motor Insurance

In the year 2013 Motor Insurance Gross Premium income is Tk. 223,429,652 against Premium Income of Tk. 130,196,269 in 2012.

d) Miscellaneous Insurance

From Miscellaneous Insurance business the company earned Gross Premium Tk. 26,292,176 in the year 2013. The figure of the same was Tk. 20,531,947 in the previous year 2012.

2. Profit :

The Underwriting Profit of the company stood at Tk. 75,547,960 for the year 2013. In 2012 Underwriting Profit was Tk. 53,609,376 Company’s Profit before Tax is fixed at Tk. 97,625,892 in 2013 as against Tk. 72,671,727 in 2012.

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3. Earning Per Share :

In the year 2013 Company’s Net Profit after Tax stood at Tk. 77,243,068 which calculates earnings per share Tk 3.57 (@Tk. 10 per share) as compared to Tk 2.75 (@Tk. 10 per share) on Tk. 56,061,339 in the previous year 2012.

4. Appropriation of Profit

The Board of Directors have proposed and recommended for appropriation as follows:

a) The Un-appropriated Profit from Previous year 2012 32,727,561 b) The Un-appropriated Profit for Current year 2013 97,625,892 c) Total fund Available for Appropriation 130,353,453 i) Reserve for Exceptional Losses 36,526,053 ii) Provision for Taxes 20,382,824 iii) Deferred Tax 4,000,000 d) Net Un-appropriated Profit 36,785,576

(Balance to be transferred to next year’s Balance sheet)

The Company’s operating performance under the title “NITOL PERFORMANCE AT A GLANCE” is summarized below:

2013 2012 2011

Gross Premium 425.99 294.61 348.13

Net Premium 365.26 216.49 264.18

Claims Paid 64.32 47.81 52.68

Commission Earned 15.69 19.66 23.92

Underwriting Profit 75.54 53.6 43.68

Investment Income 38.56 34.77 24.64

Pre Tax Profit 97.62 72.67 55.85

Tax Provision 20.38 16.61 18.07

Fixed Assets 79.65 66.89 73.31

Fixed Deposit 314.70 261.42 245

Total Assets 769.82 618.65 554.25

DIVIDENDThe Board of Directors of the company after making necessary reserves and provisions as mentioned in the Appropriation of Profit, proposes and recommends for declaration of 12% Stock Dividend & 5% Cash

Dividend for all shareholders for the year 2013.

RESERVEIn line with our policy keep the Company in good financial position we have made an exceptional Loss Reserve for Tk. 157,291,614 for the year 2013.

INVESTMENTOur company has a total investment of Tk. 343.28 consisting of ‘ Bangladesh Govt. Treasury Bond (BGTB)’, ‘Fixed Deposit’ with different Banks & ‘Shares’ as follows:

Taka in Million1. Bangladesh Govt. Treasury Bond (BGTB) 25.002. Fixed Deposit with Banks 314.703. Shares 3.58

Total 343.28

HUMAN RESOURCESWe believe that only a quality & practically skilled hand can produce a quality work. Mere academic qualification cannot bring good performance unless there is a mix of educational & practical knowledge and training thereby. Keeping this in mind, Nitol Insurance, since its inception, put emphasis “On-Job Training”. Officers on selective basis, have sent to various training Institutions. To maintain our standard and efficiency we will continue to follow the above policy for keeping our Human Resources well trained for all purposes.

CREDIT RATINGThe Credit Rating of the Company comes out very satisfactory for the forth time since it has been made mandatory by the Chief Controller of Insurance in 2007. In 2012, the Company has been rated “A” (pronounced as single A). The above gradation was done in consideration of its satisfactory financial performance, sound solvency, good liquidity position and sound IT platform etc. The Credit Rating for the year 2013 is under process.

ON LINE OPERATIONSince inception of the company we are operating in computerized


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environment in our Head Office. Now we have established real time online connectivity with our all branches. In the mean time we have plan to cope up new technology i.e. internet telephone, video conferencing etc. to facilitate all our offices as well as our valued clients.

BRANCH NETWORKIn the year 2013 we have operated total 21 branches network all over the country. In current year another 02 (two) branches also operate all over Bangladesh and setup proper manpower in the branch. We are looking forward to open new branches at prospective locations. Opening of new branches will ensure our active presence in the market and make our insurance service available to the customer.

CORPORATE GOVERNANCENitol Insurance Company always looks at the development of good governance, both in the spheres of Public Service and Corporate Sector. It is the crying need of the day. This includes, among others, not being limited to accountability, disclosures, transparency, justice and uprightness. We stand for all these virtues of good governance and expect the same from our competitors, customers, patrons, and regulators.

We report that

The Financial Statements of the Company present a true and fair view of the company’s state of affairs, result of its operations, cash flows and changes in equity.

Proper books of accounts as required by law are being maintained.

Appropriate accounting policies have been followed in formulating the Financial Statements and Accounting estimates were reasonable and prudent.

The Financial Statements were prepared in accordance with International Accounting Standard (IAS) as applicable in Bangladesh

The Internal Control System is sound in design and effectively Implemented and monitored.

There is no significant deviation from the operating result of last year.

Securities and Exchange Commission’s Compliance Report is enclosed herewith as Annexure-1

Key operating and financial data of last three years have been presented in summarized form in this report under the head “NITOL PERFORMANCE AT A GLANCE”.

The Audit Committee of the Board of Directors consisting of

following four non Executive Directors are complying the guideline of

SEC’s Notification dated the 7th August, 2012.

i) Mr. Md. Mamunur Rashid FCMA Chairman ii) Mr. Md. Anowar Husain FCMA Memberiii) Mr. Zobair Humayun Khandaker Memberiv) Mr. Mahmudul Hoque Shamim Member

04 Board of Directors Meetings were held during 2013 and attendance by each Director were as follows:

Name of Directors No. of Attendance

Mr. A.K.M. Monirul Hoque 04

Mr. Md. Anowar Husain FCMA 03

Mr. Zobair Humayun Khandaker 04

Mr. Mahmudul Hoque Shamim 04

Mr. Md. Abul Hossain (Rep-ICB) 04

Mr. Chandra Shekher Das (Rep-Pragati Life) 01

Mr. Al-Batuni Mohammad Sayed Ahmed 04

Mr. Md. Mamunur Rashid FCMA 03

Dr. Mojib U Ahmed 02

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Pattern of Shareholding as at December 31, 2013 are as follows

S/L Shares held by Total Share

(i)Parent/Subsidiary Associated Companies and other relate parties

Nil

(ii)Directors, Cheif Executive Officer, Company Secretary, CFO and Head of Internal Audit and their Spouse and monior children

Chairman1730937

A. K. M. Monirul Hoque

Vice-Chairman1730937

Md. Anowar Husain

Directors

Zobair Humayun Khandaker 1514570

Mahmudul Hoque Shamim 1730937

Md. Abul Hossain (Representative-ICB) 573807

Chandra Shekher Das (Rep-Pragati Life Insurance Ltd.)

1482938

Al-Batuni Mohammad Sayed Ahmed 1591

Md. Mamunur Rashid FCMA (Non-Shareholder Independent Director)

Nil

Dr. Mojib U Ahmed(Non-Shareholder Independent Director)

Nil

Abdul Matlub Ahmad (Sponsor Shareholder) 1528994

Selima Ahmad (Sponsor Shareholder) 86546

Abdul Musabbir Ahmad (Sponsor Shareholder) 115395

Rekha Khandaker(Sponsor Shareholder

216367

Chief Executie OfficerS.M. Mahbubul Karim

Nill

Company SecretaryMd. Shakhawat Hossain

720

Chief Financial OfficerMd. Altaf Hossain

Nill

Head of Internal AuditMd. Jakir Hossin Bhuiyan Taupu

Nill

(iii) Executives 1440

5% or more shareholdings in the company as at December 31, 2013

Name of Shareholders No. of Shares % of total Shares

ICB Unit Fund 1245862 5.76%

ACKNOWLEDGEMENTThe Board of Directors expresses and records its deep appreciation to the Managing Director, Company Secretary & all Department In-charges for their dynamic leadership and also for the Management Team for their meritorious and relentless services towards the steady growth of the company.

RETIREMENT OF DIRECTORSFrom Group A

In accordance with the provision of section No. 112. 113 & 114 of the Articles of Association, Mr. Mahmudul Hoque Shamim retired and being eligible, offered himself for re-election.

b) From Group B

In accordance with the section referred above, the Director Mr. Al-Batuni Mohammed Sayed Ahmed from Group-B retired.

As required by Insurance Act. and Rules, Election of Director from Public Shareholders (from Group-B Shareholders) will be held in the 14th Annual General Meeting. A notification for Election was published in the National Daily.

AUDITORSAs per Order No. SEC/CMRRCD/2009-193/104/Admin/.. dated July 27, 2011 of Securities and Exchange Commission, the existing auditor of the company retire and being eligible has offered their services for another year. The auditor has to be appointed at the 15th Annual General Meeting scheduled to be held on June 09, 2014 for the year 2014.

Profile of the DirectorsBrief resume of the Directors as per clause 1.5 (xxii) of the BSEC Notification No: SEC/CMRRCD/2006-158/ 134/Admin/44 dated August 7, 2012 is shown in Page No 10 to 13.


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Directors’ Report

Report on the activities of the audit committeePursuant to the clause 3.5 of the BSEC Notification No: SEC/CMRRCD/2006-158/134/Admin/44 dated August 7, 2012 the activities of the audit committee has been shown in Page No. 56.

Corporate Governance Compliance ReportPursuant to the clause 7(ii) of the BSEC Notification No: SEC/CMRRCD/2006-158/134/Admin/44 dated August 7, 2012 we attach the Company’s compliance status shown in 44.

Certification on compliance of corporate GovernanceCertificate from professional accountants on compliance with the conditions as per clause 7(i) of the BSEC notification No: SEC/CMRRCD/2006/158/134/Admin/44 dated August 7, 2012 has been shown in Page No. 54.

PROSPECTSRight from its establishment, Nitol Insurance has remained committed to its slogan, “Your Security Is Our Responsibility”. This slogan shows the company’s determination to serve it’s valued customers faithfully. Nitol Insurance has not deviated from its goal and is determined to maintain it. For this, we need the co-operation of our valued clients and our employees. We will always welcome suggestions from our clients, partners and well wishers for improving the quality of our services. Quality is a never-ending process and we will strive to achieve it.

APPRECIATION On behalf of the Board, I take this opportunity to express my sincere appreciation to the valued Clients whose continuous supports have helped Nitol Insurance to achieve this remarkable position. I also express gratitude to the Insurance Development & Regulatory Authority, Ministry of Finance, Bangladesh Bank, Registrar of Joint Stock Companies, Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange Ltd., Chittagong Stock Exchange Ltd., all Commercial Banks and Financial Institutions, Bangladesh Insurance Association, Central Rating Committee, Central Depository Bangladesh Ltd., Bangladesh Insurance Academy,

Sadharan Bima Corporation, Kenya Reinsurance Corporation Nairobi Kenya, Asian Reinsurance Corporation Thailand, Malaysian Reinsurance Berhad Kuala Lumpur Malaysia, J.B. Boda & Co. (S) Pte. Ltd. Singapore, Protection Reinsurance Services W.L.L. Bahrain, Reliance Composite Insurance Broking Ltd. India and all related professional association for their co-operation extended to us throughout the year.

Last but not the least I would like to thank and record appreciation on the excellent work done by the officers and staff. Without their dedication and sincerity continued success would not have been possible.

On behalf of the Board

A. K. M. Monirul HoqueChairman

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mvavib exgv Lv‡Z wcÖwgqvg Dcvh©‡bi †gvU cÖe„w× wQj kZKiv 11.6%| miKvix mvavib exgv

K‡c©v‡ikb Ges 43 wU †emiKvix exgv †Kv¤úvbxi †gvU Avq wQj 21,475 wgwjqb UvKv|

m¤§vwbZ †kqvi †nvìviMY, RvZxq ch©v‡q, weiæc cÖwZKzjZv Ges ivR‰bwZK Aw¯’iZvi g‡aÏ

Avgiv Avgv‡ì Kvw•LZ jÿ¨ AR©b Ki‡Z †c‡iwQ| mgMÖ kvLvMy‡jv‡K Ab jvB‡bi AvIZvq wb‡q

Avmv, my-kvmb cÖwZôv, kvLvi msL¨v 18 †_‡K 23 wU ch©šÍ e„w×i gva¨‡g eëmv m¤úªmvib, Avgv‡ì

Aw½Kvi wQj Ges Avjøvni A‡kl ing‡Z Avgiv Zv AR©b Ki‡Z †c‡iwQ| djkÖæwZ‡Z, 2013 mv‡j,

Av‡Mi eQ‡ii Zzjbvq Avgv‡ì †gvU Avq e„w× ‡c‡q‡Q kZKiv 44.59%| 2012 mv‡ji Zzjbvq †bU

wcÖwgqvg Avq e„w× kZKiv 68.71%, AvqKi cieZx© gybvdv e„w× kZKiv 30.65% Ges bxU m¤ú`

g~j¨ 13.92% e„w× †c‡q‡Q| 2013 mv‡j, ‡kqvi cÖwZ bxU m¤ú` g~j¨ 17.65% e„w× †c‡q‡Q hv

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40

Directors’ Report


2012 mv‡j wQj 16.33% Ges ‡kqvi cÖwZ Avq, 2012 mv‡ji kZKiv

2.75% †_‡K e„w× †c‡q‡Q 2013 mv‡j `vuwo‡q‡Q 3.57%| ‡Kv¤úvbxi

cwiPvjK gÛjx Avcbv‡ì Avk¦¯Í Ki‡Q †h, Avgv‡ì †Kv¤úvbx mwVK

c‡_ mvg‡bi w`‡K AMÖmi n‡”Q| A`~i fwel¨‡Z BbkvAvjøvn Avgiv

Ab¨Zg cÖavb †emiKvix exgv †Kv¤úvbx iƒ‡c we‡ewPZ n‡ev|

K‡cv©‡iU Kvh©µg t

1. wcÖwgqvg Avq :

2013 A_© eQ‡i †Kv¤úvbx †gvU wcÖwgqvg Avq 425,993,247 UvKv

weMZ 2012 A_© eQ‡ii wcÖwgqvg Avq wQj 294,617,735 UvKv|

K) AwMœ exgv :

2013 A_© eQ‡i AMœx exgvLv‡Z wcÖwgqvg Avq n‡q‡Q

76,520,187 UvKv hv weMZ 2012 m‡b wQj 58,189,792

UvKv|

L) †bŠ exgv :

2013 A_© eQ‡i †bŠ Kv‡Mv© I †bŠ nvj exgvLv‡Z wcÖwgqvg Avq

n‡q‡Q 99,751,232 UvKv Gi wecix‡Z 2012 m‡bi Avq wQj

85,699,727 UvKv|

M) gUiexgv :

gUi Lv‡Z 2013 m‡b wcÖwgqvg Avq n‡q‡Q 223,429,652 UvKv

hv 2012 m‡b wQj 130,196,269 UvKv|

N) wewea :

2013 Avw_©K eQ‡i wewea exgv Lv‡Z Avq n‡q‡Q 26,292,176

UvKv hv 2012 m‡b wQj 20,531,947 UvKv|

2| gybvdv :

2013 m‡b †Kv¤úvbxi AewjLb gybvdv 75,547,960 UvKv n‡q‡Q

hv 2012 m‡b wQj 53,609,376 UvKv| Kic~e© gybvdv 2013 m‡b

97,625,892 UvKvq `vwo‡q‡Q, hv 2012 m‡b wQj 72,671,727

UvKv|

3| †kqvi cÖwZ Avq :

2013 m‡b †Kv¤úvbxi Ki cieZx© gybvdv `vwo‡q‡Q 77,243,068

UvKvq hvi †kqvi cÖwZ Avq `vwo‡q‡Q 3.57 UvKv (cÖwZ 10 UvKv

†kqvi)| weMZ 2012 m‡b †Kv¤úvbxi Ki cieZx© gybvdv wQj

56,061,339 UvKv hvi †kqvi cªwZ Avq wQj 2.75 UvKv (cÖwZ 10

UvKv †kqvi)|

1. e›Ub‡hvM¨ gybvdv:

cwiPvjbv cwil` wb¤œiæcfv‡e gybvdv e›U‡bi mycvwik K‡i‡Q|

K) weMZ 2012 m‡bi A-e›Ub‡hvM¨ gybvdv 32,727,561 UvKv

L) Kic~e© gybvdv 2013 97,625,892 UvKv

M) e›U‡bi Rb¨ cÖvc¨ †gvU Znwej 130,353,453 UvKv

1) AcÖZ¨vwkZ ¶wZi mwÂwZ 36,526,053 UvKv

2) Ki cÖwfkb 20,382,824 UvKv

3) mvaviY mwÂwZ 4,000,000 UvKv

N) bxU A-e›UbK…Z gybvdv 36,785,576 UvKv

(cieZx© eQ‡ii w¯’wZc‡Î ¯’vbvšÍi)

wbUj BÝy¨‡iÝ †Kv¤úvbx wjwg‡UW Gi weMZ 3 eQ‡ii cvidi‡gÝ :

(UvKv wgwjqb)

2013 2012 2011

MÖm wcÖwgqvg 425.99 294.61 348.13

bxU wcÖwgqvg 365.26 216.49 264.18

`vex cwi‡kva 64.32 47.81 52.68

KwgkY Avq 15.69 19.66 23.92

AewjLY gybvdv 75.54 53.60 43.68

wewb‡qvM Avq 38.56 34.77 24.64

Ki c~e©eZx© gybvdv 97.62 72.67 55.85

Ki cÖwfkb 20.38 16.61 18.07

¯’vqx m¤ú` 79.65 66.89 73.31

¯’vqx AvgvbZ 314.70 261.42 245.00

‡gvU m¤ú` 769.82 618.65 554.25

jf¨vsk

cwiPvjbv cl©` cÖ‡qvRbxq gybvdv e›Ub, mwÂwZ wiRvf© msi¶Y K‡i

†Kv¤úvbxi mKj †kqvi‡nvìvi‡ì 2013 m‡bi Rb¨ 12% ÷K jf¨vsk

Ges 5% bM` jf¨vsk cÖ¯Íve K‡i‡Q|

mwÂwZ

‡Kv¤úvbxi A_©‰bwZK Ae¯’v my`„p Kivi j‡¶¨ 2013 m‡b AcÖZ¨vwkZ

SzuwKi wiRvf© 157,291,614 UvKv ivLv n‡q‡Q|

wewb‡qvM

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Annual Report 2013

41

Directors’ Rep

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wb‡gœv³ wewb‡qvM K‡i‡Q t

UvKv wgwjqb

1| evsjv‡`k Mf©t †UªRvix eÛ 25.00

2| e¨vs‡K ¯’vqx AvgvbZ 314.70

3| †kqvi µq 3.58

‡gvU 343.28

gvbe m¤ú`

Avgiv wek¦vm Kwi eënvwiK `¶Zv I ¸bvejx n‡”Q ¸bMZ gvbm¤úbœ

Kv‡Ri Ab¨Zg kZ©| ïaygvÎ wk¶vMZ †hvM¨Zv Øviv fvj KvR cvIqv hvq

bv| fvj Kv‡Ri Rb¨ wk¶vMZ †hvM¨Zvi mv‡_ †ckvMZ wk¶v I eënvwiK

cÖwk¶b AZ¨šÍ ¸iæZ¡c~Y©| GB j‡¶¨ wbUj BÝy¨‡iÝ †Kv¤úvbx wjwg‡UW

Zvi Kgx©‡ì Kg©Kvjxb cÖwk¶b Gi Dci ¸iæZ¡ Av‡ivc K‡i| Avgiv

Avgv‡ì Kgx©‡ì ̧ bMZ gvb Dbœqb I †ckvMZ ̀ ¶Zv AR©‡bi Rb¨ wewfbœ

cÖwk¶Y †K‡›`ª cvVvB hv‡Z K‡i Zviv fwel¨‡Z `¶Zvi mv‡_ †Kv¤úvbxi

Kvh©vejx m¤úv`b Ki‡Z cv‡i|

‡µwWU †iwUs

2007 m‡b cÖavb exgv wbqš¿K KZ…©K †µwWU †iwUs eva¨Zvg~jK Kivi

ci PZz_© ev‡ii gZ Avgiv m‡šÍvlRbK †iwUs AR©b K‡iwQ| 2012 m‡b

†Kv¤úvbx ÓAÓ†iwUs †c‡q‡Q| GB †iwUs †Kv¤úvbxi m‡šÍvlRbK Avw_©K

eë¯’vcbv, Avw_©K ¯^”QjZv, Zvij¨ cÖevn Ges AvBwU eë¯’vcbvi dmj|

2013 Gi †iwUs eZ©gv‡b cÖwµqvaxb i‡q‡Q|

AbjvBb Kvh©µg

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Kw¤úDUvi c×wZ‡Z KvR Ki‡Q| eZ©gv‡b Avgiv Avgv‡ì mKj kvLv

mg~n‡K AbjvBb ms‡hv‡Mi AvIZvq G‡bwQ| BwZg‡a¨ Avgiv bZzb cÖhyw³

eënvi K‡i †hgb B›Uvi‡bU †Uwj‡dvb, wfwWI Kbdv‡ibwÝs BZ¨vwì

gva¨‡g Avgiv Avgv‡ì kvLv I K¬v‡q›U‡ì m‡e©v”P †mev †Ìqvi ‡Póv

KiwQ|

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K‡iwQ| Avgiv fv‡jv ¯’v‡b Av‡iv bZzb kvLv †Lvjvi Rb¨ †Póv Pvjvw”Q|

bZzb kvLv ‡Lvjvi gva¨‡g Avgiv evRv‡i Avgv‡ì mwµq Dcw¯’wZi gva¨‡g

Avgv‡ì exgv †mev RbM‡bi Rb¨ mnRjf¨ Ki‡Z PvB|

K‡c©v‡iU mykvmb

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mRvM I hZœkxj| eZ©gv‡b K‡c©v‡iU mykvmb GKwU mg‡qi `vex| Gig‡a¨

`vqe×Zv, Z_¨ cÖKvk, ¯^”QZv, b¨vqwePvi I mwVKZv AšÍf©~³| Avgiv

me©`v K‡c©v‡iU mykvm‡bi GB êwkó¨¸wj avib Kwi Ges Avgv‡ì

cÖwZ‡hvMx, MÖvnK I bxwZwba©viK‡ì wbKU Abyiƒc cÖZ¨vkv Kwi|

Avgiv RvbvwPQ †h,

• Avw_©K cÖwZ‡e`b †Kv¤úvbxi cwiPvjbvMZ djvdj, bM` Znwej

cÖevn cwieZ©bmn †Kv¤úvbxi Kvh©µg mwVK|

• AvB‡bi wewa wb‡la mv‡c‡¶ wnmve-wbKvk mwVKfv‡e msi¶b Kiv

n‡q‡Q|

• Avw_©K cÖwZ‡e`b ˆZixi e¨vcv‡i mwVK bxwZgvjv AbymiY Kiv n‡q‡Q

Ges Avw_©K wnmve weP¶YZvi mv‡_ m¤úbœ Kiv n‡q‡Q|

• Avw_©K cÖwZ‡e`b ‰Zixi e¨vcv‡i AvšÍR©vwZK GKvDw›Us gvb (IAS) AbymiY Kiv n‡q‡Q|

• Avf¨šÍixY wbqš¿Y eë¯’v mwVK Ges Kvh©Kixfv‡e ev¯ÍevwqZ Ges

ch©‡e¶Y Kiv n‡q‡Q|

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bvB|

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• weMZ 3 eQ‡ii cÖavb Avw_©K DcvË mshy³ Kiv n‡q‡Q|

• cwiPvjbv cl©` KZ…©K wb‡qvwRZ AwWU KwgwU wb‡¤œv³ 04 Rb Awbe©vnx

cwiPvjK weGmBwmi 7B AvMó 2012 cÖÁvcb Abyhvqx Kvh©vejx

m¤úv`b Ki‡Q|

1) Rbve †gvt gvgybyi iwk` GdwmGgG, ¯^Zš¿ cwiPvjK †Pqvig¨vb

2) Rbve Av‡bvqvi û‡mb, GdwmGgG m`m¨

3) Rbve ‡hvev‡qi ûgvqyb L›`Kvi m`m¨

4) Rbve gvngy`yj nK kvgxg m`m¨


42

Directors’ Report


• 2013 m‡b 04 wU †evW© mfv AbywôZ nq hvnv‡Z cwiPvjKgÛjxi

Dcw¯’wZ wb‡¤œ †Ìqv nj :

cwiPvjKgÛjxi bvg Dcw¯’wZi msL¨v

Rbve G. †K. Gg. gwbiæj nK 04

Rbve Av‡bvqvi û‡mb 03

Rbve †Rvev‡qi ûgvqb L›`Kvi 04

Rbve gvngy`yj nK kvgxg 04

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Rbve P›`ª †kLi `vm (cÖwZwbwa-cÖMwZ jvBd) 01

Rbve Avj evZzbx †gvt mvC` Avn‡g` 04

Rbve †gvt gvgybyi iwk` GdwmGgG 03

cÖ‡dmi Wt gwRe DwÏb Avn¤§` 02

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†nW Ae B›Uvib¨vj AwWU Ges Zv‡ì ¯¿x/¯^vgx I AcÖvß eq¯‹ mšÍvbMb

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Avj evZzbx †gvt mvC` Avn‡g`

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Avãyj gvZjye Avng`, (¯úbmi †kqvi‡nvìvi)

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cÖavb A_© Kg©KZ©v, ‡gvt AvjZvd †nv‡mb bvB

‡nW Ae BbUvibvj AwWU ‡gvt RvwKi †nv‡mb f‚Bqv Zcy bvB

(iii) wbe©vnxe„›` 1440

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AvBwmwe BDwbU dvÛ 12,45,862 5.76%

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cwiPvjKgÛjx †Kv¤úvbxi DË‡ivËi DbœwZ I m¤§„w×i Rb¨ wbijm

cÖ‡Pôv Pvjv‡bvi Ges MwZkxj †bZ…Z¡ I eë¯’vcbvq DrKl© mva‡bi Rb¨

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exgv AvBb I exgv wewa †gvZv‡eK RbM‡Yi As‡ki †kqvi‡nvìvi‡ì

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wb‡qvM Kiv n‡e|

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43

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†Kv¤úvbxi cwiPvjK‡ì mswÿß Rxebx 10 †_‡K 13 bs c„ôvq mshy³

Kiv n‡q‡Q|

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cwicvjb Ae¯’v 44 bs c„ôvq mshy³ Kiv n‡jv|

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MÖvnK‡ì cÖwZ †Kv¤úvbxi †mev`v‡bi A½xKv‡ii ewntcÖKvk| †Kv¤úvbx

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44

Status of Compliance

Status of Compliance with Corporate Governance Guidelines

Condition No.

Title

Compliance Status

RemarksComplied Not Complied

1 Board of Directors

1.1 Board’s Size √

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.

√

1.2 (ii) a)For the purpose of this clause “Independent Director” means a director who either does not hold any share in the company or holds less than one percent (1%) shares of the total paid-up shares of the company

√

Independent Directors does not

hold any sharesof the company

1.2 (ii) b)

who 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: Provided that spouse, son, daughter, father, mother, brother, sister, son-in-law and daughter-in-law shall be considered as family members;

√

1.2 (ii) c)who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associated companies;

√

1.2 (ii) d) who is not a member, director or officer of any stock exchange; √

1.2 (ii) e)who is not a shareholder, director or officer of any member of stock exchange or an intermediary of the capital market;

√

1.2 (ii) f)who is not a partner or an executive or was not a partner or an executive during the preceding 3 (three) years of the concerned company’s statutory audit firm;

√

1.2 (ii) g) who shall not be an independent director in more than 3 (three) listed companies; √

1.2 (ii) h)who 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);

√

1.2 (ii) i) who has not been convicted for a criminal offence involving moral turpitude. √

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) cannot remain vacant for more than 90 (ninety) days.

√

1.2 (v)the Board shall lay down a code of conduct of all Board members and annual com-pliance of the code to be recorded.

√

Report on Compliance of Corporate Governance Guidelines of Nitol Insurance Co. Ltd.SEC/CMRRCD/2006-158/134/Admin/44: dated August 07, 2012

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Status of Com

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Condition No.

Title

Compliance Status


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)

The person should be a Business Leader/Corporate Leader/ Bureaucrat/University Teacher with Economics or Business Studies or Law background/Professionals like Chartered Accountants, Cost & Management Accountants, Chartered Secretaries. The independent director must have at least 12 (twelve) years of corporate manage-ment/professional experiences.

√

1.3 (iii)In special cases the above qualifications may be relaxed subject to prior approval of the Commission.

No such deviation occurred

1.4 Chairman of the Board and Chief Executive Officer √

1.5 The Directors’ Report to Shareholders √

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 or loss. No such item exists

1.5 (vi)Basis for related party transactions- 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.

No such item exists

1.5 (viii)An explanation if the financial results deteriorate after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc.

No such item exists

1.5 (ix)If significant variance occurs between Quarterly Financial performance and Annual Financial Statements the management shall explain about the variance on their Annual Report.

√

1.5 (x) Remuneration to directors including independent directors. √

1.5 (xi)The financial statements prepared by the management of the issuer company pres-ent 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)

International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in prepara-tion of the financial statements and any departure there-from has been adequately disclosed.

√


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Condition No.

Title

Compliance Status


1.5 (xv)The system of internal control is sound in design and has been effectively imple-mented and monitored.

√

1.5 (xvi)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.

√

1.5 (xvii)Significant deviations from the last year’s operating results of the issuer company shall be highlighted and the reasons thereof should be explained.

N/A

1.5 (xvii)Key operating and financial data of at least preceding 5 (five) years shall be summarized.

√

1.5 (xix)If the issuer company has not declared dividend (cash or stock) for the year, the rea-sons thereof shall be given.

N/A

1.5 (xx)The number of Board meetings held during the year and attendance by each direc-tor shall be disclosed.

√

1.5 (xxi)The pattern of shareholding shall be reported to disclose the aggregate number of shares (along with name wise details where stated below) held by: -

√

1.5 (xxi) a)Parent/Subsidiary/Associated Companies and other related parties (name wise details);

√

1.5 (xxi) b)Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details);

√

1.5 (xxi) c) Executives; √

1.5 (xxi) d)Shareholders holding ten percent (10%) or more voting interest in the company (name wise details).

√

1.5 (xxii)In case of the appointment/re-appointment of a director the company shall disclose the following information to the shareholders:-

√

1.5 (xxii) 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 mem-bership of committees of the board.

√

2 Chief Financial Officer (CFO), Head of Internal Audit and Company Secretary (CS)

2.1 Appointment √

2.2 Requirement to attend the Board Meetings √

3 Audit Committee

3 (i)The company shall have an Audit Committee as a sub-committee of the Board of Directors.

√

3 (ii)The Audit Committee shall assist the Board of Directors in ensuring that the finan-cial 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 √

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Title

Compliance Status


3.1 (i) The Audit Committee shall be composed of at least 3 (three) members.

3.1 (ii)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.

√

3.1 (iii)All members of the audit committee should be “financially literate” and at least 1 (one) member shall have accounting or related financial management experience.

√

3.1 (iv)

When the term of service of the Committee members expires or there is any circum-stance causing any Committee member to be unable to hold office until expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed number of 3 (three) persons, the Board of Directors shall appoint the new Committee member(s) to fill up the vacancy(ies) immediately or not later than 1 (one) month from the date of vacancy(ies) in the Committee to ensure continuity of the performance of work of the Audit Committee.

N/A

3.1 (v) The company secretary shall act as the secretary of the Committee. √

3.1 (vi)The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director.

N/A

3.2 Chairman of the Audit Committee √

3.2 (i)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.

√

3.2 (ii)Chairman of the audit committee shall remain present in the Annual General Meeting (AGM).

√

3.3 Role of 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)Review along with the management, the annual financial statements before sub-mission to the board for approval.

√

3.3 (vi)Review along with the management, the quarterly and half yearly financial state-ments 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 statu-tory 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 market-ing 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 pre-pare a statement of funds utilized for the purposes other than those stated in the offer document/prospectus.

N/A


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Condition No.

Title

Compliance Status


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;No such item

Found

3.4.1 (ii) b)suspected or presumed fraud or irregularity or material defect in the internal control system;

No such item Found

3.4.1 (ii) c)suspected infringement of laws, including securities related laws, rules and regulations;

No such item Found

3.4.1 (ii) d) Any other matter which shall be disclosed to the Board of Directors immediately.No such item

Found

3.4.2 Reporting to the AuthoritiesNo such item

Found

3.5 Reporting to the Shareholders and General InvestorsNo such item

Found

4 External/Statutory Auditors

4 (i) Appraisal or valuation services or fairness opinions. √

4 (ii) Financial information systems design and implementation. √

4 (iii)Book-keeping or other services related to the accounting records or financial statements.

√

4 (iv) Broker-dealer services. √

4 (v) Actuarial services. √

4 (vi) Internal audit services. √

4 (vii) 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

5 (i)Provisions relating to the composition of the Board of Directors of the holding com-pany shall be made applicable to the composition of the Board of Directors of the subsidiary company.

N/A

5 (ii)At least 1 (one) independent director on the Board of Directors of the holding com-pany 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 state-ments, in particular the investments made by the subsidiary company.

N/A

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Condition No.

Title

Compliance Status


6 Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO)

6 (i) a)these statements do not contain any materially untrue statement or omit any mate-rial fact or contain statements that might be misleading;

√

6 (i) b)These statements together present a true and fair view of the company’s affairs and are in compliance with existing Accounting standards and applicable laws.

√

6 (ii)There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company’s code of conduct.

√

7 (i)

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 the Annual Report on a yearly basis.

√

7 (ii)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.

√


50


1.0 Conceptual FrameworkThe corporate governance philosophy of the Company is aimed at assisting the top management in efficient conduct of its affairs as well as in meeting obligations to all the stakeholders and is guided by strong emphasis on transparency, accountability and integrity. It provides the Company with strategic guidance as to how the objectives are set and achieved, how risk is monitored and assessed and how the performance is maximized.

Keeping in view the size, complexity and operations, the governance framework of the Company is based on the following principles:

• ThattheBoardisappropriateinsizeand members are committed to their respective duties and responsibilities

• ThattimelyflowofinformationtotheBoardand its Committees are ensured to enable

them discharge their functions effectively

• Thatasoundsystemofriskmanagementand internal control is in place.

• Thattimelyandbalanceddisclosureofall material information concerning the Company is made to all Stakeholders.

• ThatalltransactionsoftheCompanyaretransparent and accountability for the same is well established.

• Thatwearecompliantwithallregulatoryand statutory rules and regulations.

2.0 The Responsibilities of the BoardTo ensure effective maintenance of corporate governance, the Board of NICL formulates strategic objectives and policies for the company, provides leadership in implementing those objectives as well as supervises management of the company’s affairs. In


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Statement of C

orporate G

overnance

NICL, Board of Directors is in full control of the company’s affairs and is also accountable to the shareholders. The Board firmly believes that the success of the company depends largely on the prevalence of a credible corporate governance practice.

In discharging its responsibilities, the Board fulfills certain key functions, including:

• Reviewingandguidingcorporatestrategy, major plans of action, risk policy, annual budgets and business plans; setting performance objectives; monitoring implementation and corporate performance.

• Ensuringtheintegrityofthecompany’saccounting & financial reporting systems are in place, in particular, systems for risk management, financial and operational control, and compliance with the law and relevant standards.

• Reviewingcompany’sfinancialstatementsand oversee its compliance with applicable audit, accounting and reporting requirement.

• Monitoringimplementationandeffectiveness of the approved strategic and operating plans.

• Establishcompany’svalue.

• Overseethecorporategovernanceofthecompany

2.01 Composition of the Board

The Company’s policy is to maintain optimum combination of Directors from both Sponsors and general public. The Board of Directors of the Company comprises of nine Directors of which …..are from the sponsors, ……from general investors and one as independent Director. The short introduction of the Directors has been described in page……… The Board ensures that the activities of the Company

are always conducted with adherence to high ethical standard and in the best interest of the shareholders.

2.02 Separate role of the Chairman and Managing Director

The Chairman and Managing Director of the Company are different bodies and their duties & responsibilities are separated as mentioned in the Articles of Association of the Company. The Chairman is the Non Executive Director and Managing Director is Executive Director. The Chairman ensures to comply the policy of the company through the Board and the Managing Director confirmed to the Board about the implementation of the policy with the support of the management team.

2.03 Responsibilities of the Chairman

The Chairman is the lead managing person who manage overall business of the company by no participation in or interfere into the administrative or operational and routine affairs of the company. The overall responsibilities of the chairman are to:

• EnsurethattheBoardsetandimplementsobjective and strategy effectively;

• Actasthecompany’sleadrepresentative,explaining aims and policies to the shareholder;

• Determinethecompositionandorganization of the board;

• Clarifyingtheboardwithitsmanagementand responsibilities;

• Planandmanagetheboardandallboardcommittee meetings;

• Facilitiestheeffectivecontributionofthenon-executive Directors;

• ChairallBoardMeetingandAGMorothershareholder meeting;

• SignsontheBoardresolutionwiththe

The Chairman and Managing Director of the Company are different bodies and their duties & responsibilities are separated as mentioned in the Articles of Association of the Company.


52


discussion of the Board;

2.04 Responsibilities of the Managing Director

The Managing Director is the Executive Director of the Board. The Articles of Association of the Company refer his duties and responsibilities in the Company. Generally, he is responsible for running the business and implementing the Board strategy and policy. He looks after the day-to-day business and accountable to the Board for the financial and operational activities of the Company.

2.05 Board Committees

Nitol Insurance Company Limited has two Sub committees under the Board i.e. Claims Committee and Audit Committee. Every sub committees have separate scope of work and the Board must approve the terms of references. The Sub Committees are independent and responsible to provide their expertise opinion to the Board. At present, the following Committees are performing their duties on behalf of the Board:

2.06 Claims Committee

The Board formed the Claims Committee by 3 members including Managing Director of the Company. The Committee will look after the customer’s claims settlement procedure with the support of surveyors report. During the year 2012 the Committee hold 11 meeting and settle huge amount of claims for the benefit of the customers.

2.07 Audit Committee

The Board appointed the four members of the committee headed by an Independent Director. The Board authorizes the committee to follow up or investigate any activities within its terms of reference and accordingly recommended for reporting to the Board. Mr. Md. Mamunur Rashid, FCMA, Chairman of the committee appointed by the Board. Mr. Md. Mamunur Rashid, FCMA,

the Chairman of the audit committee has a vast knowledge, good understanding or experience in business, management with accounting or finance of the Company.

Activities of the Committee

1. To review the internal audit program to ensure that the internal audit function is adequately resourced and has an accurate standing in the company;

2. To consider the response of the management to any major external or internal audit recommendations;

3. To review the internal auditor’s reports about the effectiveness of systems for the internal financial control, financial reporting and risk management;

4. To ensure the implementation of the internal control measures.

5. To discuss with the internal auditors about any significant findings and to follow up there on.

6. To review and examine interim and annual financial statements before the submission to the board.

Report of the Audit Committee

The Committee reviewed the function of the above areas and found that

a. The adequate internal control system with management appropriate response have been running in the all areas of the Company;

b The Management follows the related laws, including SEC regulation and guidelines, Stock Exchanges requirements and others;

c The Management handling the operation and the financial activities of the company as per Insurance Act and with the advice of the Board.


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Statement of C

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overnance

3.0 Internal Control Framework

The Management recognizes its responsibilities to present a balanced and understandable assessment of the company’s position and prospect. The management has accountability for reviewing and approving the effectiveness of internal controls operated by the company, including financial, operational and compliance controls and risk management.

The company has adequate system of internal control in place. The well defined organization structure, predefined authority levels, documented policy guidelines and an extensive system of internal controls ensure optimal utilization and protection of resources, reporting of financial transactions and compliance with applicable laws and regulations. The system also ensures that assets are safeguarded against loss from unauthorized use or disposition.


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Certificate on Compliance

Certificate on Compliance of conditions of corporate governance guidelines to the Shareholders

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Responsib

ility Statement

Including Duties as per Condition No. 6 of Corporate Governance Guidelines

The financial statements are prepared in accordance with Bangladesh Accounting Standards issued by the Institute of Chartered Accountants of Bangladesh and in compliance with Insurance Act 2010,Company Act 1994, the Securities and Exchange rules 1987 and the Listing Regulations of the Dhaka and Chittagong Stock Exchanges.

We are responsible for establishing and maintaining proper internal control system. We have designed such control or caused such control to be designed under our supervision, to ensure that material information relating to the Company is made known to us and for safeguarding the Company’s assets and preventing and detecting fraud and error.

We have evaluated the effectiveness of the Company’s internal control system and are satisfied that the internal control system were effective as of the end of the period under review. Moreover significant estimates and accounting policies that involve a high degree of complexity and judgment were discussed with our external auditors and the audit committee of the Board.

We certify to the Board that:-

(a) We have reviewed financial statements for the year and that to the best of our knowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) These statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws.

(b) There are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company’s code of conduct.

Md. Altaf Hossain S.M. Mahbubul KarimChief Financial Officer Chief Executive Officer

Responsibility Statement of Chief Executive Officer and Chief Financial Officer

We have evaluated the effectiveness of the Company’s internal control system and are satisfied that the internal control system were effective as of the end of the period under review


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The Committee comprises of four non-executive directors one of them is independent director. The members of the committee are as follows:

Name of Director Position Position of Audit Committee

Mr. Mamunur Rashid, FCMA Independent Director Chairman of Audit Committee

Mr. Anowar Husain, FCMA Vice-Chairman Member

Mr. Zobair Humayun Khandaker Diractor Member

Mr. Mahmudur Hoque Shamim Director Member

Mr. Shakhawat Hossin, Company Sectary is the Member Secretary to the Committee.

Mr. S.M. Mahbubul Karim, Managing Director of the company attended the meeting as an invitee. Other invitees to the meetings were the Chief Financial Officer and the Head of Internal Audit. Relevant heads of department attended the meetings as required.

A total of 3(Three) meetings were held during 2013.

The following matters were discussed in the meetings and decisions taken were communicated to the Board of Directors:

• Reviewoftheunauditedfirstquarterreport2013.• Reviewoftheunauditedhalf-yearlyreport2013.• Reviewoftheunauditedthirdquarterreport2013.• ReviewofinternalauditreportsoftheHeadoffice/branches.

The committee was not aware of any issues in the followings area, which needs to be reported to the Board (i) Report on conflicts of interests; (ii) Suspected or presumed fraud or irregularity or material defect in the internal control system and (iii) Suspected infringement of laws, including securities related laws, rule and regulations.

Dated, Dhaka Chairman9 May 2014 Audit Committee


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Shareholding Pattern

Shareholding Pattern as at December 31, 2013

49.51 %Sponsor / Directors

21.83 %Institutional

(Including ICB, Banks, Insurance, MF etc. without Omnibus A/C)

28.66 %Individuals


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10.06% VAT & Stamp Duty 11.35% Net Re-Insurance Cost 11.63% Additional reserve for Unexpired Risks 37.36% Management Expenditure 12.02% Net Claim Incured 3.88% Tax 6.10% Dividends 7.58% Reserve & Surplus

VALUE ADDED STATEMENT 2013

10.06 %

11.35 %

11.63 %

37.36 %

12.02 %

3.88 %

6.10 %7.58 %

Particulars2013

%2012

%(BDT in million) (BDT in million)

Value Added

Gross Premium 425.99 294.62

VAT & Stamp Duty 53.84 34.69

Investment & Other Income 55.19 57.5

Total Value Added 535.02 100% 386.81 100%

Distribution of Value Addition

VAT & Stamp Duty 53.84 10.06% 34.69 8.97%

Net Re-Insurance Cost 60.74 11.35% 78.12 20.20%

Additional reserve for Unexpired Risks 62.2 11.63% (19.82) -5.12%

Management Expenditure 199.89 37.36% 173.33 44.81%

Net Claim Incured 64.33 12.02% 47.81 12.36%

Tax 20.78 3.88% 16.61 4.29%

Dividends 32.66 6.10% - 0.00%

Reserve & Surplus 40.58 7.58% 56.06 14.49%

Total Distribution 535.02 100.00% 386.81 100.00%


0

30

60

90

120

150

2009 2010 2011 2012 2013

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Contrib

ution to the National Econom

y

Nitol Insurance Company Limited recognizes that the company has certain responsibilities to the society for the development and the development of the nation as a whole. For this, company made significant contribution to the Government each year by payment of Tax,VAT, Stamp duty etc. During the year 2013 company contributed Tk.125.54 million to the national exchequer as against Tk.111.34 million in 2012.

NICL also make an economic impact by creating employment and trained them to served the country. Company paid Salary and allowances to its employees. And the company and the employees paid Tk. 73.12 as taxes to the Government. In addition to the above over the past many years Nitol Insurance Company Limited has been paying a satisfactory dividend to its shareholders.

Contribution to the National Economy

FIGURE IN MILLION BDT


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Company’s Properties

Company Properties

Barbhuiya Siddiq PlazaZindabazar, Sylhet944 SFT office floor at 2nd floor

Skylark PointBijoynagar, Dhaka1571 SFT office space at 5th floor

yunusco City CentreGEC More, Chittagong9852 SFT office space at 10th floor

Police Plaza ConcordGulshan 1, Dhaka6514 SFT office space at 6th floor

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Ref. No-SB/246/2014 Dated: April 10 , 2014

AUDITOR’S REPORT TO THE SHAREHOLDERS

We have audited the annexed Statement of Financial Position of NITOL INSURANCE COMPANY LIMITED, as on December 31, 2013 and its Statement of Comprehensive Income, Income Appropriation Accounts, related Fire, Marine, Motor & Miscellaneous Insurance Revenue Accounts, Cash Flow Statement and Statement of Changes in Equity for the year ended as

on that date together with the accompanying Notes thereto.

Respective Responsibilities of the Management and the Auditors:

The preparation of this Financial Statement is the responsibility of the company’s management. Our responsibility is to express an independent opinion on this Financial Statement based on our audit.

Scope:

We conducted our audit in accordance with BSA. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 Statement, prepared in accordance with Bangladesh Accounting Standard (BAS) give a true and fair view of the state of the company’s affairs as of December 31, 2013 and of the results of its operations and its cash flows for the year then ended and comply with the Companies Act1994, The Insurance Act 2010, The Securities and Exchange Rules 1987 and Other applicable laws and regulations.

We also report that:

(i) We have obtained all the information, explanations and documents which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof.

(ii) The Company management has followed relevant provision of law and rules in managing the affairs of the Company and that proper books of account, records and other statutory books have been properly maintained.

(iii) The Statement of Financial Position and Statement of Comprehensive Income, Statement of Changes in Equity are in agreement with the said books of account maintained by the Company and examined by us while the Cash Flow Statement conforms with the presentation laid out in the Bangladesh Financial Reporting Standard (BFRS);

(iv) The expenditure incurred and payments made were for the purpose of the Company’s business for the year.

(V) As per regulations of 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 year under Report have not paid any persons any Commission in any form outside Bangladesh in respect of any of its business re-insured abroad.

Dated – Dhaka SHAFIQ BASAK & COThe April 10, 2014. CHARTERED ACCOUNTANTS

PShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS : This is the Financial Position referred to in our report annexed.

Financials Nitol Insurance Company Limited

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FINANCIAL POSITION AS AT 31ST DECEMBER, 2013

Particulars Note2013 2012 2011

Taka Taka Taka

CAPITAL AND LIABILITIES :AUTHORISED CAPITAL 4(a) 500,000,000 500,000,000 500,000,00050,000,000 ordinary shares of Tk. 10 each

ISSUED, SUBSCRIBED & PAID UP CAPITAL 21,636,720 ordinary shares of Tk. 10 each 4(b) 216,367,200 204,120,000 189,000,000

RESERVE OR CONTINGENCY ACCOUNTS : 202,407,190 161,823,122 105,761,783

Reserve for Exceptional Losses 5(a) 157,291,614 120,765,561 99,115,588General Reserve 5(b) 8,330,000 8,330,000 6,630,000Profit & Loss Appropriation Account 36,785,576 32,727,561 16,195

BALANCE OF FUNDS AND ACCOUNTS : 18 149,717,887 87,528,853 107,348,089Fire Insurance Business 19,335,120 8,663,410 1,301,618Marine Insurance Business 35,231,727 27,614,932 35,369,757Motor Insurance Business 88,566,220 50,955,474 69,946,586Miscellaneous Insurance Business 6,584,820 295,037 730,128

PREMIUM DEPOSIT 6 21,685,486 8,102,852 9,885,507DIVIDEND 7 - - 24,570,000

LIABILITIES & PROVISION 57,392,679 68,156,759 48,390,997Estimated liability in respect of outstanding claims, whether due or intimated 8 23,113,241 19,071,229 28,384,368Amount due to other persons or bodies carrying on Insurance Business 9 34,279,438 49,085,530 20,006,629

SUNDRY CREDITORS (Including Outstanding and Accruing expenses) 10 122,255,234 88,927,161 69,294,303

769,825,676 618,658,747 554,250,679 * The accounting policis and other notes from 1 to 31 form an integral part of the Financial Statements.* The Financial Statements were authorised for issue by the Board of Directors on 08th April, 2014 and signed on its behalf by :

PShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS : This is the Financial Position referred to in our report annexed.

Annual Report 2013

63


Taka Taka Taka

PROPERTY AND ASSETS:INVESTMENT: 11 28,584,113 12,584,113 12,094,843

Bangladesh Govt. Tresaury Bond (BGTB) 11(a) 25,000,000 9,000,000 9,000,000Investment in Shares 11(b) 3,584,113 3,584,113 3,094,843

INTEREST, DIVIDENDS AND RENT RECEIVABLES (Accrued but not Due) 12 16,482,534 15,175,505 13,834,125

Amount due from other persons or bodies carrying on Insurance Business

13 49,256,014 40,547,456 -

SUNDRY DEBTORS 14 86,940,886 86,559,195 57,357,109

Advanced againest office space 14.02 121,832,350 107,720,000 98,300,000

CASH & BANK BALANCE : 15 385,680,928 287,732,071 297,762,263

Cash at Bank 70,076,249 25,907,237 51,854,147Fixed Deposit with Banks 314,706,000 261,427,000 245,000,000Cash in Hand 898,679 397,834 908,116

OTHER ACCOUNTS : 81,048,851 68,340,407 74,902,339

Fixed Assets (At cost less Depreciation) 16 79,650,060 66,890,505 73,312,802Stock of Printing 507,440 657,840 833,200Insurance Stamps in Hand 891,351 792,062 756,337

769,825,676 618,658,747 554,250,679

GShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS :This is the Income Statement & Income Appropriation Account referred to in our report annexed.


64

Comprehensive Income StatementFOR THE YEAR ENDED DECEMBER 31, 2013

Income Appropriation AccountFor The Year Ended December 31, 2013


Taka Taka Taka

Expenses of Management : (Not applicable to any particular Fund or Account) 16,491,872 15,705,665 12,469,323

Audit fees 77,000 77,970 151,650Advertisement and Publicity 2,893,558 5,946,033 1,336,146Subscription and Donation 3,171,625 298,500 727,000Legal & Professional Fees 35,000 98,525 170,869Depreciation 10,139,689 9,075,887 9,911,158Director Fee 175,000 208,750 172,500

Balance for the year carried to Profit & Loss Appropriation Account 97,625,892 72,671,727 55,852,237

114,117,764 88,377,392 68,321,560


Taka Taka Taka

Provision for Income Tax 10.01 20,382,824 16,610,388 22,739,696 Reserve for Exceptional Losses 17 36,526,053 21,649,973 13,209,078 General Reserve - 1,700,000 - Deffered Tax 10.02 4,000,000 - -Dividend Paid 7 32,659,000 - 24,570,000 Balance transferred to Balance Sheet 36,785,576 32,727,561 16,195 130,353,453 72,687,922 60,534,969

* The accounting policis and other notes from 1 to 31 form an integral part of the Financial Statements.* The Financial Statements were authorised for issue by the Board of Directors on 08th April, 2014 and signed on its behalf by :

GShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS :This is the Income Statement & Income Appropriation Account referred to in our report annexed.

Annual Report 2013

65


Taka Taka Taka

Interest, Dividends and Rents : (not applicable to any particular Fund of Account)

38,569,804 34,768,016 24,638,895

Interest received & accrued 24 33,181,898 30,645,291 23,644,910Dividend & Shares Income 25 2,349,367 328,257 215,111Office Space Rent 26 3,017,700 3,457,779 754,425 Others Income 27 20,839 336,689 24,449

Profit/(Loss) Transferred from Revenue Accounts: 75,547,960 53,609,376 43,682,665

Fire Ins. Revenue Account 12,878,511 (12,291,052) (691,041)Marine Ins. Revenue Account 27,915,317 37,288,382 28,275,989Motor Ins. Revenue Account 34,340,481 34,886,430 21,159,038Miscellaneous Ins. Revenue Account 413,651 (6,274,384) (5,061,321)

114,117,764 88,377,392 68,321,560


Taka Taka Taka

Balance brought forward from previous year 32,727,561 16,195 12,732 General Reserve - - 4,670,000 Net profit for the year brought down 97,625,892 72,671,727 55,852,237

130,353,453 72,687,922 60,534,969

RShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS : This is the Consolidated All Business Revenue Account referred to in our report annexed.


66

Consolidated All Business Revenue AccountFor The Year Ended December 31, 2013

Particulars NOTE2013 2012 2011

Taka Taka Taka

Claims under Policies, Less Re-insurance paid during the year: 60,282,897 57,123,841 40,525,123

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

23,113,241 19,071,229 28,384,368

83,396,138 76,195,070 68,909,491

Less : Outstanding claims at the end of the previous year 19,071,229 28,384,368 16,228,369

64,324,909 47,810,702 52,681,122

Agent Commission 58,049,910 41,037,465 59,229,326

Expenses of Management 19 125,350,998 116,588,565 134,250,623

Profit/Loss transferred to Profit and Loss Account 75,547,960 53,609,376 43,682,665

Balance of account at the end of the year as shown in the Balance Sheet :

Reserve for Unexpired Risks being 40% & 100% of Premium Income of the year. 149,717,887 87,528,853 107,348,089

472,991,664 346,574,961 397,191,825


RShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS : This is the Consolidated All Business Revenue Account referred to in our report annexed.

Annual Report 2013

67

Particulars NOTE2013 2012 2011

Taka Taka Taka

Balance of Account at the beginning of the year :

Reserve for Unexpired Risks 87,528,853 107,348,089 109,086,161

Premium Less Re-insurance 365,260,525 216,499,734 264,181,565

Commission on Re-insurance Ceded 15,695,409 19,661,380 23,924,099

Profit Commission 4,506,877 3,065,758 -

472,991,664 346,574,961 397,191,825

MShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS : This is the Fire Insurance Revenue Account referred to in our report annexed.


68

FIRE INSURANCE REVENUE ACCOUNTFor The Year Ended December 31, 2013


Taka Taka Taka

Claims under Policies Less Re-Insurance:

Paid during the year 3,469,107 14,657,975 (9,711,146)Total estimated liability in respect of outstanding claims at the end of the year, whether due or intimated 3,865,512 2,200,000 5,985,650

7,334,619 16,857,975 (3,725,496)

Less : Outstanding claims at the end of the previous year 2,200,000 5,985,650 486,474 5,134,619 10,872,325 (4,211,970)Agent Commission 11,002,361 8,904,665 9,571,367


Profit/Loss transferred to Profit and Loss Account 12,878,511 (12,291,052) (691,041)


Reserve for Unexpired Risks being 40% of Premium Income of the year. 19,335,120 8,663,410 1,301,618

70,552,543 38,826,706 25,587,878


MShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS : This is the Fire Insurance Revenue Account referred to in our report annexed.

Annual Report 2013

69


Taka Taka Taka





Profit Commission 4,366,226 3,065,758 -

70,552,543 38,826,706 25,587,878

TShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS : This is the Marine Insurance Revenue Account referred to in our report annexed.


70

Marine Insurance Revenue AccountFor The Year Ended December 31, 2013


Taka Taka Taka


Paid during the year 5,525,046 (1,286,726) 994,309


4,152,910 4,479,575 8,309,629

9,677,956 3,192,849 9,303,938 Less : Outstanding claims at the end of the previous year 4,479,575 8,309,629 2,764,780

5,198,381 (5,116,780) 6,539,158





Reserve for Unexpired Risks being 40% of Premium Income of the year (100% of Hull only) 35,231,727 27,614,932 35,369,757

110,774,286 106,745,398 123,270,557


TShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS : This is the Marine Insurance Revenue Account referred to in our report annexed.

Annual Report 2013

71


Taka Taka Taka





Profit Commission 48,885 -

110,774,286 106,745,398 123,270,557

OShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS :This is the Marine Insurance Revenue Account referred to in our report annexed.


72

Motor Insurance Revenue AccountFor The Year Ended December 31, 2013


Taka Taka Taka


Paid during the year 49,325,025 43,715,463 49,215,565


14,728,436 12,391,654 14,089,089

64,053,461 56,107,117 63,304,654Less : Outstanding claims at the end of the previous year 12,391,654 14,089,089 12,977,115

51,661,807 42,018,028 50,327,539




Balance of account at the end of the year as shown in the Balance Sheet :Reserve for Unexpired Risks being 40% of Premium Income of the year. 88,566,220 50,955,474 69,946,586

272,391,974 197,345,161 244,469,402


OShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS :This is the Marine Insurance Revenue Account referred to in our report annexed.

Annual Report 2013

73


Taka Taka Taka




Commission on Re-insurance Ceded - 9,890 170,785

Profit Commission 20,950 - -

272,391,974 197,345,161 244,469,402

XShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS :This is the Miscellaneous Insurance Revenue Account referred to in our report annexed.


74

Miscellaneous Insurance Revenue AccountFor The Year Ended December 31, 2013


Taka Taka Taka


Paid during the year 1,963,719 37,129 26,395 Total estimated liability in respect of outstanding claims at the end of the year, whether due or intimated 366,383 - - 2,330,102 37,129 26,395 Less : Outstanding claims at the end of the previous year - - - 2,330,102 37,129 26,395

Agent Commission 889,601 279,760 556,052Expenses of Management 19 9,054,687 9,320,154 7,612,734

Profit/Loss transferred to Profit and Loss Account 413,651 (6,274,384) (5,061,321)Balance of account at the end of the year as shown in the Balance Sheet :Reserve for Unexpired Risks being 40% of Premium Income of the year. 6,584,820 295,037 730,128

19,272,861 3,657,696 3,863,988


XShafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS :This is the Miscellaneous Insurance Revenue Account referred to in our report annexed.

Annual Report 2013

75


Taka Taka Taka


Reserve for Unexpired Risks 295,037 730,128 298,009

Premium Less Re-insurance 16,462,051 737,592 1,825,319


Profit Commission 70,816 -

19,272,861 3,657,696 3,863,988

BFinancials Nitol Insurance Company Limited

76

Cash Flow Statement For the Year Ended December 31, 2013

Particulars2013 2012 2011

Taka Taka Taka

A) Cash flows from Operating Activities:

Cash receipts from Premium and Others Income 399,574,097 193,623,601 290,212,578

Cash payment for Management Exp.Re-Insurance, Claim & Other Exp. (242,314,196) (191,060,933) (253,303,118)

Net cash provided by operating activities 157,259,901 2,562,668 36,909,460

B) Cash flows from Investing activities:

i. Investment, Fixed Deposit with Bank (69,279,000) (16,916,270) (21,427,000)

ii. Acquisition of Fixed Assets (22,899,244) (2,653,590) (3,571,764)

- - -

Net Cash used by investing activities (92,178,244) (19,569,860) (24,998,764)

C) Cash flows from Financial Activities:

Cash dividend paid (20,411,800) (9,450,000) -

Net cash used/provided by financing activities (20,411,800) (9,450,000) -

D) Net inflows/(out flows) for the year (A+B+C) 44,669,857 (26,457,192) 11,910,696

E) Opening Cash & Cash Equivalents 26,305,071 52,762,263 40,851,567

F) Closing cash & Cash Equivalents (D+E) 70,974,928 26,305,071 52,762,263


Shafiq Basak & Co. S. M. Mahbubul Karim Zobair Humayun Khandaker Md. Anowar Husain A.K.M. Monirul HoqueChartered Accountants Managing Director Director Vice Chairman Chairman

AUDITORS’ REPORT TO THE SHAREHOLDERS :This is the Financial Position referred to in our report annexed.

BAnnual Report 2013

77

STATEMENT OF CHANGES IN EQUITY

F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 3

ParticularsShare

CapitalGeneral Reserve

Reserve for Exceptional

LossesRetained Earning Total

Equity as at 01- 01- 2013 204,120,000 8,330,000 120,765,561 32,727,561 365,943,122

Dividend Paid (Stock) 12,247,200 - - (12,247,200) -

Dividend Paid (Cash) - - - (20,411,800) (20,411,800)

Net Profit During the year (after adjustment of tax and dividend)

- - - 73,243,068 73,243,068

Transfer to General Reserve - - - - -

Transfer to Reserve for Exceptional Losses - - 36,526,053 (36,526,053) -

Equity as at 31 -12 - 2013 216,367,200 8,330,000 157,291,614 36,785,576 418,774,390

F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 2

ParticularsShare

CapitalGeneral Reserve

Reserve for Exceptional

LossesRetained Earning Total

Equity as at 01- 01- 2012 189,000,000 6,630,000 99,115,588 16,195 294,761,783

Dividend Paid (Stock) 15,120,000 - - - 15,120,000

Net Profit During the year (after adjustment of tax and dividend)

- - - 56,061,339 56,061,339

Transfer to General Reserve - 1,700,000 - (1,700,000) -

Transfer to Reserve for Exceptional Losses - - 21,649,973 (21,649,973) -

Equity as at 31 -12 - 2012 204,120,000 8,330,000 120,765,561 32,727,561 365,943,122



AUDITORS’ REPORT TO THE SHAREHOLDERS :This is the Financial Position referred to in our report annexed.

LFinancials Nitol Insurance Company Limited

78

FORM -‟AA”CLASSIFIED SUMMARY OF THE ASSETSAS AT 31ST DECEMBER, 2013

Sl. No.

Class of Assets

Book Value Book Value Book Value

2013 2012 2011

Taka Taka Taka

1 Bangladesh Govt. Treasury Bond 25,000,000 9,000,000 9,000,000

2 Investment of Share & Others 125,416,463 111,304,113 101,394,843

3 Interest Accrued 16,482,534 15,175,505 13,834,125

4 Amount Due from others Person 49,256,014 40,547,456 -

5 Sundry Debtors 86,940,886 86,559,195 57,357,109

6 Fixed Deposit 314,706,000 261,427,000 245,000,000

7 Cash at Bank 70,076,249 25,907,237 51,854,147

8 Fixed Assets 79,650,060 66,890,505 73,312,802

9 Cash in Hand 898,679 397,834 908,116

10 Stamp in Hand 891,351 792,062 756,337

11 Stock of Printing 507,440 657,840 833,200

769,825,676 618,658,747 554,250,679


LAnnual Report 2013

79

Notes to the Financial Statements For The Year Ended 31St December 2013

FORMING AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

1. LEGAL STATUS AND NATURE OF THE COMPANY :1. LEGAL STATUS AND NATURE OF THE COMPANY :

Domicile, Legal Form, Country of Incorporation and Principal Activities :

The Company is incorporated on 4th October 1999 as a Public Limited Company under the Companies Act, 1994 with the object of carrying in Bangladesh all kinds of insurance business other than life insurance and obtained the Certificate of Commencement of business from the Registar of Joint Stock Companies, Bangladesh with effect from the same date. However, the Registration Certificate for carrying on insurance business from the Chief Controller of Insurance, Government of Bangladesh, was obtained with effect from 18th November, 1999. The Company is listed with both Dhaka Stock Exchange Ltd. & Chittagong Stock Exchange Ltd. as a Publicly traded company.

Address of Registered Office and Principal Place of Business :

The registered office of the Company is at Nitol Centre, 71 Mohakhali, C/A. , Dhaka-1212, Bangladesh and the address of operational head quarter is also at the said Nitol Centre, 71 Mohakhali.

2. BASIS OF PREPARATION OF ACCOUNTS & SIGNIFICANT ACCOUNTING POLICIES :2. BASIS OF PREPARATION OF ACCOUNTS & SIGNIFICANT ACCOUNTING POLICIES :

Basis of Accounting :

i) The accounting and reporting policies of the company generally conform to the Bangladesh Accounting Standards (BAS) and to the require-ments of the laws applicable to it. The company carries its assets and liabilities on historical cost convention on a consistent basis and it follows the accrual method of accounting except where noted otherwise.

ii) The Balance Sheet has been prepared in accordance with the regulations contained in part I of the first schedule and as per form “A” as set forth in part II of that schedule and the Revenue Account of each class of general insurance business is prepared in accordance with the regulations contained in part I of the third schedule and as per form “F” set forth in part II of that schedule of the Insurance Act, 1938 and 2010. The classi-fied summary of the assets are prepared in accordance with form “AA” of part II of the first schedule of the said Act.

iii) Figures have been rounded off to the nearest Taka.

Revenue Recognition :

Premium is recognized when insurance policies are issued, but the premium of company’s share of public sector insurance business (PSB) has been accounted for in the year in which the statements of account from Sadharan Bima Corporation are received. Upto 31st December, 2013 statements of account for the period of 4 Quarters from January’12 – March’12, April’12 – June’12, July’12 – September’12 & October’12 – December’12 have been received and accordingly the company’s share of PSB for those quarters have been recognized in these Financial Statements.

Interest on Bangladesh Govt. Treasury Bond, Interest on STD and Fixed Deposit Account with banks are recognized on accrual basis.

Provision for Unexpired Risks :

Before arriving at the surplus of each class of business, necessary provision for unexpired risk has been made @ 40% on all business except Marine Hull business for which 100% provision has been made.

Reserve for Exceptional Loss:

Reserve for Exceptional Loss as appropriated out of current years profit before tax, amount of Tk. 36,526,053/-

Going Concern:

The financial statements of the entity have been prepared by the management considering the entity as going concern because there is no uncer-tain about going concern and the entity is optimistic to continue business operation for the foreseeable future.

Premium Deposit Account :

Premium Deposit Account represents amount of premium deposited with the Company against Cover Notes for which no policy has been issued up to the end of the year .

YFinancials Nitol Insurance Company Limited

Notes to the Financial Statements As at and for The Year Ended 31St December 2013

80

Depreciation :

Fixed assets are depreciated on reducing balance method. Depreciation for the whole year has been charged on additions irrespective of the date of additions. No depreciation is charged on assets retired during the year. The rates of depreciation have been shown in note-16.

Stock of Stationery & Forms:

Stocks of stationery and Forms have been valued at the lower of cost and net realized value.

Management Expenses :

Management expenses have been allocated to the respective business on the basis of proportionate gross premium earned.

Employees’ Benefit plans :

The Company operates a contributory Provident Fund for its permanent employees, provision for which are being made annually as per rules administered by a Board of Trustees in which eligible employees contribute @ 10% of basic salary. The Company also makes equal contribution to the said Provident Fund. These contributions are invested separately. The permanent employees of the Company are covered under a Personal Accident Scheme, a Group Insurance Scheme etc. premium for which has been charged to Profit and Loss Account.

Employees are entitled to a unfunded Gratuity benefit after completion of minimum 10 years of confirmed service in the Company. The Gratuity is calculated on the last Basic pay and is payable at the rate of one month Basic pay for every completed year of service.

Cash and Cash Equivalent :

Cash comprises cash in hand, demand deposits, cash equivalents on short term, highly liquid investments that are readily convertible to know amounts of cash and those which are subject to an insignificant risk of changes in value. Cash and cash equivalents are not restricted in use and accordingly cash in hand and bank balances have been considered as cash and cash equivalents.

Foreign Currency Transaction:

Transactions denminated in foreign currencies are translated into Bangladesh Taka and recorded at rates of exchange ruling on the date transac-tion in accordance with IAS 21 as adopted by ICAB as BAS 21 : The effects of Changes in Foreign Currency Rates”.

Audit Fee:

As per decision of the Annual General Meeting held on 11th June, 2013 the Auditor’s remuneration of Tk. 72,000/- has been provided in the ac-counts which is the only sum to be paid to Auditors as remuneration.

Value of Assets :

The value of all assets as at 31st December, 2013 as shown in the Balance Sheet and in the classified summary of assets on FORM “AA” annexed have been reviewed by the Directors and the said assets have been set-forth in the Balance Sheet at amounts not exceeding their realizable or market value.

Impairment of Assets :

All assets of the company shown in the financial statement that are within the scope of BAS-36 are in physical existence and valued no more than their recoverable amount following International Accounting Standards adopted in Bangladesh, disclosures with regard to “Impairment of Assets” as per BAS-36 have not been considered necessary.

Earnings per share (EPS) :

The company calculates Earnings Per Share (EPS) in accordance with BAS 33 which has been shown in Note-22 .

Basic Earning :

This represents earning for the year attributable to Ordinary Shareholders. As there was no preference dividend, minority interest or extra ordinary items, the net profit after tax for the year has been considered as fully attributable to the Ordinary Shareholders.

YAnnual Report 2013

81

Basic Earning per share :

This has been calculated by dividing the basic earning by the weighted average number of ordinary shares outstanding during the year.

Diluted Earnings Per Shares :

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

Taxation :

The company is a Public Limited Company and accordingly, income tax @ 42.50% and an amount of Tk. 20,382,824.00 /- being Income Tax provision made for the accounting year ended on December 31, 2013 (Assessment Year 2014-2015) in accordance with the best estimate of the management on lump sum basis without considering the admissible and inadmissible expenses:

Deferred Taxation:

Provision for deffered Tax has been made on lump sum basis based on best estimate and in view of temporary difference due to the carrying amount of an asset or liability and its tax base.

3. ADDITIONAL INFORMATION ON FINANCIAL STATEMENTS :3. ADDITIONAL INFORMATION ON FINANCIAL STATEMENTS :

Responsibility for Preparation and Presentation of Financial Statements :

The Board of Directors is responsible for the preparation of financial statements under section 183 of the Companies Act 1994 and as per BAS –I. “Presentation of Financial Statements” the complete set of Financial Statements include the following components :

i) Financial Position as at 31st December, 2013.ii) Income Statement for the year ended 31st December, 2013.iii) Revenue Accounts for specific Class of Business for the year ended 31st December, 2013.iv) Statement of Cash Flows for the year ended 31st December, 2013.v) Statement of Change in Equity for the year ended 31st December, 2013 andvi) Accounting Policies and Explanatory Notes.

Reporting Currencies and Level of Precision :

The figures in the financial statements represent Bangladesh Taka Currency, and rounded off to the nearest Taka except where indicates otherwise.

Reporting Period :

Financial Statements of the Company cover one calendar year from 1st January to 31st December consistently.

Comparative Information :

Comparative information have been disclosed in respect of the year 2011, 2012 & 2013 for all numerical information in the financial statements when it is relevant for understanding of the current periods of financial statements.

Figures of the year 2011, 2012 & 2013 have been rearranged whenever considered necessary to ensure comparability with the current period.

VFinancials Nitol Insurance Company Limited


82


Taka Taka Taka

4 CAPITAL : TK.216,367,200.004 CAPITAL : TK.216,367,200.00

Details break up of Shareholder Capital is as below :

a) Authorised Capital : 50,000,000 Ordinary Shares of Tk 10/- 500,000,000 500,000,000 500,000,000

b) Issued, Subscribed and Paid-up Capital 21,636,720 Ordinary Shares of Tk. 10/- each 216,367,200 204,120,000 189,000,000

PAID UP CAPITAL

Pursuant to section 6(b) of Insurance Act, 1938 (The Seventh Schedule), and Section 4(A) of Insurance Rules, 1958 and Article 6(D) of Association of the Company, the Company raised its Paid -up Capital from Tk. 6.00 Crore to Tk. 15.00 Crore through Initial Public Offering.

Category of Shareholders No. of Shares % of Holding Taka

1. Sponsors & Director (Group-A) 8,654,683 40% 86,546,8302. General Public (Group-B) 12,982,037 60% 129,820,370

TOTAL : 21,636,720 100% 216,367,200

C L A S S I F I C A T I O N O F S H A R E H O L D E R S B Y H O L D I N GGROUP-A

S/N Name of ShareholdersInitial Paid up

SharesBonus Share

Total Share after cred-ited of Bonus Share

No. of Shareholders

% of Total Sponsor Share

% of Total Paid-up Capital

01. A. K. M. Monirul Hoque 1,200,000 530,937 1,730,937 1 20.00 8.00

02. Md. Anowar Husain 1,200,000 530,937 1,730,937 1 20.00 8.00

03. Zobair Humayun Khandaker 1,050,000 464,570 1,514,570 1 17.50 7.00

04. Mahmudul Hoque Shamim 1,200,000 530,937 1,730,937 1 20.00 8.00

05. Abdul Matlub Ahmad 1,060,000 468,994 1,528,994 1 17.67 7.07

06. Selima Ahmad 60,000 26,546 86,546 1 1.00 0.40

07. Abdul Musabbir Ahmad 80,000 35,395 115,395 1 1.33 0.53

08. Rekha Khandaker 150,000 66,367 216,367 1 2.50 1.00

Total : 6,000,000 2,654,683 8,654,683 8 100.00 40.00

C L A S S I F I C A T I O N O F S H A R E H O L D E R S B Y H O L D I N GGROUP-B (Public Shareholders as at 31, December, 2013)

S/N No. of Shares No. of Shareholders % of Total Paid-up Capital

01. 12,982,037 3506 60

VAnnual Report 2013

83


Taka Taka Taka

5 A RESERVE FOR EXCEPTIONAL LOSSES : TK 157,291,614.005 A RESERVE FOR EXCEPTIONAL LOSSES : TK 157,291,614.00

Opening Balance 120,765,561 99,115,588 85,906,510Add: Addition during the year 36,526,053 21,649,973 13,209,078

157,291,614 120,765,561 99,115,588

5 B GENERAL RESERVE : TK. 8,330,000.005 B GENERAL RESERVE : TK. 8,330,000.00

Opening Balance 8,330,000 6,630,000 11,300,000Add/Less: Addition/Adjustment during the year - 1,700,000 (4,670,000)

8,330,000 8,330,000 6,630,000

6 PREMIUM DEPOSIT : TK. 21,685,486.006 PREMIUM DEPOSIT : TK. 21,685,486.00

Details break up of premium Deposit as below

Fire Insurance Business - - -Marine Insurance Business 21,685,486 8,102,852 9,885,507Miscellaneous Insurance Business - - -

21,685,486 8,102,852 9,885,507

This is relating to Marine Business and balance on these account represents premium received against Cover Notes for which no Policies have been issued up to the end of the period.

7 PROPOSED DIVIDEND AND DIVIDEND PAID :7 PROPOSED DIVIDEND AND DIVIDEND PAID :

The Board has proposed and recommended Stock Dividend @ 12% & Cash Dividend @ 5% for the year 2013 subject to approval of Share holders in the ensuing Annual General Meeting (AGM), the details of dividend paid during the year is as under:

Stock Dividend (Year -2012) 12,247,200 - 15,120,000Cash Dividend (Year -2012) 20,411,800 - 9,450,000

32,659,000 - 24,570,000

8 ESTIMATED LIABILITY IN RESPECT OF OUTSTANDING CLAIMS WHETHER DUE OR INTIMEATED : TK. 23,113,241.008 ESTIMATED LIABILITY IN RESPECT OF OUTSTANDING CLAIMS WHETHER DUE OR INTIMEATED : TK. 23,113,241.00

Motor Insurance Business 14,728,436 12,391,654 14,089,089Marine Insurance Business 4,152,910 4,479,575 8,309,629Fire Insurance Business 3,865,512 2,200,000 5,985,650Misc. Insurance Business 366,383 - -

23,113,241 19,071,229 28,384,368

This is in respect of Motor Insurance Business, Marine Insurance Business ,Fire Insurance Business & Misc. Business. All claims of which intimations were received by the company within 2013, and have been taken into consideration while estimating the liability in respect of outstanding claims.

9 AMOUNT DUE TO OTHER PERSONS OR BODIES CARRYING ON INSURANCE BUSINESS : TK. 34,279,438.009 AMOUNT DUE TO OTHER PERSONS OR BODIES CARRYING ON INSURANCE BUSINESS : TK. 34,279,438.00

This is payable to the following Bodies

Sadharan Bima Corporation 18,115,603 26,441,186 20,006,629Foreign Re: 16,163,835 22,644,344 -

34,279,438 49,085,530 20,006,629

ZFinancials Nitol Insurance Company Limited


84


Taka Taka Taka

10 SUNDRY CREDITORS : TK. 122,255,234.0010 SUNDRY CREDITORS : TK. 122,255,234.00

This is made up as follows

Provision for Audit Fee 114,350 132,600 132,600Provision for Income Tax - Note- 10.01 & 10.02 75,905,912 77,725,572 61,115,184Provision for Office Rent 756,280 191,900 267,270Provision for Gratuity 124,700 124,700 124,700Short/Excess Premium 299,037 288,921 283,762Advance premium received 35,113,189 3,254,255 2,717,008Provision for Vat on Audit Fees - 650 650Provison for tax on office Rent - - 101,751Refund warrant - 6,000 6,000Provision for Income Tax on Office Rent - 386,488 -Provision for Salary - 3,161,331 -VAT Payable 4,282,666 2,902,556 3,708,571Share Application Fees - 95,279 95,279Payable to Nitol Motors Note- 10.03 5,659,100 - -Advance Against Office Rent - 594,363 678,982Provision for int on SOD A/c - 62,546 62,546

122,255,234 88,927,161 69,294,303

10.01 PROVISION FOR INCOME TAX: TK. 71,905,912.0010.01 PROVISION FOR INCOME TAX: TK. 71,905,912.00

The amount includes Tk. 20,382,824 being Income Tax provision made for the accounting year ended on December 31, 2013 (Assessment Year 2014-2015) in accordance with the best estimate of the management on lump sum basis without considering the admissible and inadmissible expenses:

Opening Balance 77,725,572 61,115,184 63,523,833Add. Provision during the year 20,382,824 16,610,388 18,074,942Short Provision Previous Year - - 4,664,754 98,108,396 77,725,572 86,263,529Less: Adjustment with Advance Income Tax 26,202,484 - 20,483,591Payment of Short Provision - - 4,664,754

71,905,912 77,725,572 61,115,184

10.02 PROVISION FOR DEFFERED TAX: TK. 4,000,000.0010.02 PROVISION FOR DEFFERED TAX: TK. 4,000,000.00

The amount includes Tk.4,000,000/- being Income Tax provision made for the accounting year ended on December 31, 2013 in accordance with the best estimate of the management on lump sum basis. Due to non-complitation of up to date Assessment.

Provision During the year 4,000,000 - -

4,000,000 - -

10.03 LOAN TO PURCHASE OFFICE CAR: TK. 5,659,100.0010.03 LOAN TO PURCHASE OFFICE CAR: TK. 5,659,100.00

Opening Balance -Loan Taken During the Year 6,213,988 - -Interest Charged During the Year 266,340 - -

6,480,328 - -Less; Repayment During the year 821,228 5,659,100 - -

ZAnnual Report 2013

85


Taka Taka Taka

11 INVESTMENT : TK. 28,584,113.0011 INVESTMENT : TK. 28,584,113.00

The Investment has been stated at the cost of acquisition. This represents investment made by the Company both listed and non-listed securities. The investment is made up are as follows:

(a) Bangladesh Govt. Tresaury Bond (BGTB) 25,000,000 9,000,000 9,000,000(b) Investment in Shares 3,584,113 3,584,113 3,094,843

28,584,113 12,584,113 12,094,843

(B) SHARES TK. 3,584,113.00

No. of Shares Book Value Taka Market Value Taka

Share of CDBL 425,000 1,250,000 1,250,000BOC 200 87,200 127,986AIMS 1 STMF 1,700 14,510 88,425Grameen Phone 200 14,000 34,300Lanka Bangla 3,254 246,028 222,132Modern Cement 3,000 438,000 369,800Dhaka Bank Ltd. 7,000 531,795 169,800Pubali Bank ltd. 5,000 529,580 173,569ICB Islami Bank 47,300 473,000 374,362 492,654 3,584,113 2,810,374


Taka Taka Taka

12 INTEREST, DIVIDENDS AND RENT RECEIVABLES : TK 16,482,534.0012 INTEREST, DIVIDENDS AND RENT RECEIVABLES : TK 16,482,534.00


Interest Accured on Fixed Deposits 15,513,930 15,175,505 13,834,125Interest Accured on BGTB 968,604 - -

16,482,534 15,175,505 13,834,125

The amount represents interest earned/ accrued but not received during the year

13 AMOUNT DUE FROM OTHER PERSONS OR BODIES CARRYING ON INSURANCE BUSINESS :TK. 49,256,014.0013 AMOUNT DUE FROM OTHER PERSONS OR BODIES CARRYING ON INSURANCE BUSINESS :TK. 49,256,014.00

This is receivable from the following Bodies

Sadharan Bima Corporation 28,229,952 20,756,191 -Foreign Re: 21,026,062 19,791,265 -

49,256,014 40,547,456 -

OFinancials Nitol Insurance Company Limited


86


Taka Taka Taka

14 SUNDRY DEBTORS : TK. 86,940,886.0014 SUNDRY DEBTORS : TK. 86,940,886.00


Advance against Office Rent 3,770,294 2,535,184 551,810Advance against Salary 1,522,500 865,000 699,000Advance against Agent Comm. 3,681,696 - -Advance against Income Tax Note: 14.01 71,700,397 76,651,439 49,697,961Security Deposit 2,388,727 2,129,207 998,000Car Loan 3,877,272 4,325,265 5,357,238IPO Aplication Fees - 53,100 53,100

86,940,886 86,559,195 57,357,10914.01 ADVANCE AGAINST INCOME TAX TK. 71,700,397.0014.01 ADVANCE AGAINST INCOME TAX TK. 71,700,397.00

Advance against Taxes (Co.) 63,566,648 71,589,777 44,723,188Tax on Interest 8,133,749 5,061,662 4,974,773

71,700,397 76,651,439 49,697,961

The Advance Income Tax will be adjusted with the completed assessment year.

14.02 ADVANCE AGAINST OFFICE SPACE TK. 121,832,350.0014.02 ADVANCE AGAINST OFFICE SPACE TK. 121,832,350.00

Advance against office Space 121,832,350 107,720,000 98,300,000

The Company has made agreement for purchase of office space at Police Plaza Concord, Gulshan-1, Dhaka for 6514 sft. And an office space at Sylhet and have deposited money against there office space which were shown in the Sundry debtors up to the previous year and is showing as separate item this year and are waiting for handover and registration.

15 CASH & BANK BALANCE : TK. 385,680,928.0015 CASH & BANK BALANCE : TK. 385,680,928.00


Cash at Bank 70,076,249 25,907,237 51,854,147

Fixed Deposit wth Bank 314,706,000 261,427,000 245,000,000

Cash in Hand 898,679 397,834 908,116

385,680,928 287,732,071 297,762,263

All Bank accounts are reconciled as on 31,December-2013

OAnnual Report 2013

87

16. FIXED ASSETS: TK. 79,650,060.0016. FIXED ASSETS: TK. 79,650,060.00

SCHEDULE OF FIXED ASSETS

PARTICULARS

COST

Rate

DEPRECIATION

W.D.V31-Dec-2013Cost on

1-Jan-2013Addition

2013 Sale 2013

Total on 31-Dec-2013

Deprecia-tion

1-Jan-2013

Deprecia-tion

31-Dec-2013

Adjustment 2013

Total on31-Dec-2013

Furniture & Fixture 3,273,414 358,174 3,631,588 10% 1,558,629 187,176 1,745,805 1,885,783

Office Equipment 1,380,842 637,100 2,017,942 20% 768,026 167,355 935,381 1,082,561

Computer 6,545,201 3,084,470 9,629,671 25% 5,152,741 824,007 5,976,748 3,652,923

Air Conditioner 2,434,710 1,010,180 3,444,890 20% 1,475,889 334,117 1,810,006 1,634,884

Refrigerator 41,700 - 41,700 20% 39,280 564 39,844 1,856

Telephone Installation 1,095,354 28,500 1,123,854 10% 640,994 45,168 686,162 437,692

Office Car 28,838,435 12,232,422 41,070,857 20% 15,727,020 3,601,123 19,328,143 21,742,714

Office Decoration 16,785,522 5,542,538 22,328,060 10% 7,016,624 1,177,859 8,194,483 14,133,577

Electrical Equipment 1,073,539 5,860 1,079,399 25% 637,596 100,218 737,814 341,585

Office Space 61,669,440 - 61,669,440 10% 23,230,853 3,702,102 26,932,955 34,736,485

Total 123,138,157 22,899,244 - 146,037,401 56,247,652 10,139,689 66,387,341 79,650,060


Taka Taka Taka

17 RESERVE FOR EXCEPTIONAL LOSSES (DURING THE YAER) TK. 36,526,053.0017 RESERVE FOR EXCEPTIONAL LOSSES (DURING THE YAER) TK. 36,526,053.00

This represents profit set-aside during the year under review at 10% of net premium as allowed as expenses by detailed below, to meet Exceptional Losses. The aforesaid set-aside of profit has been allowed as expenses by paragraph 6(2) of 4th Schedule of the Income Tax Ordinance, 1984.

Fire Insurance Business 4,833,780 2,165,853 162,702Marine Insurance Business 7,904,513 6,671,493 4,211,787Motor Insurance Business 22,141,555 12,738,869 8,743,323Miscellaneous Insurance Business 1,646,205 73,759 91,266

36,526,053 21,649,974 13,209,078

18 BALANCE OF FUNDS AND ACCOUNTS (RESERVE FOR UNEXPIRED RISK) TK. 149,717,887.0018 BALANCE OF FUNDS AND ACCOUNTS (RESERVE FOR UNEXPIRED RISK) TK. 149,717,887.00

Fire Insurance 19,335,120 8,663,410 1,301,618Marine Insurance 35,231,727 27,614,932 35,369,757Motor Insurance 88,566,220 50,955,474 69,946,586Miscellaneous Insurance 6,584,820 295,037 730,128

149,717,887 87,528,853 107,348,089

N.B. : Only for Marine Hull 100% reserve is made and rest of the Class made 40%.

UFinancials Nitol Insurance Company Limited


88


Taka Taka Taka

19 ALLOCATION OF MANAGEMENT OF EXPENSES: TK. 125,350,998.0019 ALLOCATION OF MANAGEMENT OF EXPENSES: TK. 125,350,998.00

All expenses of Management wherever incurred directly or indrectly in represent of Fire, Marine, Motor and Miscellaneous Insurance business of the company transacted in Banglaesh has been fully debited to respective Revenue Accounts and those do not relate to any particular business have been debited to the Profit and Loss Account .

Fire Insurance Business 22,201,932 22,677,358 19,617,904Marine Insurance Business 29,568,311 33,863,495 39,303,803Motor Insurance Business 64,526,068 50,727,558 67,716,182Misc Insurance Business 9,054,687 9,320,154 7,612,734

125,350,998 116,588,565 134,250,623

20 GENERAL20 GENERAL

a) Contigent Liability: The Company has no sum for which the company was contigently liable as on 31.12.2013

b) Capital Expenditure Commitment: There was no un -provided committment of Capital Expenditure as at 31,December 2013

21 CLAIM NOT ACKNOWLEDGED :21 CLAIM NOT ACKNOWLEDGED :

There was no claim against the company which is not acknowledged as on 31.12.2013

22 BASIC EARNINGS PER SHARE (EPS)22 BASIC EARNINGS PER SHARE (EPS)

EPS BEFORE TAX:

Net Profit before Tax 97,625,892 72,671,727 55,852,237Number share Outstanding during the Year 21,636,720 20,412,000 18,900,000

4.51 3.56 2.96EPS AFTER TAX:

Net Profit after Tax 77,243,068 56,061,339 37,777,295Number share Outstanding during the Year 21,636,720 20,412,000 18,900,000

3.57 2.75 2.00

23 AUDIT FEE: TK. 72,000.0023 AUDIT FEE: TK. 72,000.00

As per decision of the Annual General Meeting held on 11th June, 2013 the Auditor’s remuneration of Tk. 72,000/- has been provided in the ac-counts which is the only sum to be paid to Auditors as remuneration.

24 INTEREST RECEIVED AND ACCRUED TK. 33,181,898.0024 INTEREST RECEIVED AND ACCRUED TK. 33,181,898.00

The balance is made up as flows:Interest on FDR 29,968,907 29,699,728 22,436,953Interest on BGTB 2,319,104 765,000 681,164Interest on STD 956,251 853,489 772,068

33,244,262 31,318,217 23,890,185Less: Interest adjusted on SOD Account (62,364) (672,926) (245,275)

33,181,898 30,645,291 23,644,910

UAnnual Report 2013

89


Taka Taka Taka

25 DIVIDEND AND SHARE INCOME TK. 2,349,367.0025 DIVIDEND AND SHARE INCOME TK. 2,349,367.00

The balance is made up as flows:

Dividend 2,349,367 328,257 215,111

2,349,367 328,257 215,111

26 OFFICE SPACE RENT: TK 3,017,700.0026 OFFICE SPACE RENT: TK 3,017,700.00

Office Space Rent 3,017,700 3,457,779 754,425

3,017,700 3,457,779 754,425

27 OTHERS INCOME TK. 20,839.0027 OTHERS INCOME TK. 20,839.00

Salvage - 280,000 -Others 20,839 56,689 24,449

20,839 336,689 24,449

28 NET ASSET VALUE PER SHARE (NAV)28 NET ASSET VALUE PER SHARE (NAV)

17.65 16.33 15.60

29 NET OPERATING CASH FLOW PER SHARE (NOCF)29 NET OPERATING CASH FLOW PER SHARE (NOCF)

3.85 3.19 2.52

30 TRANSACTIONS WITH RELATED PARTIES:30 TRANSACTIONS WITH RELATED PARTIES:

Nitol Insurance, in normal course of business, carried out a number of transactions with other entities that fall within the defination of related party contained in Bangladesh Accounting Standard 24: Related Party Disclosures. All transactions involving related parties arising in normal course of business are conducted on an arm’s length basis at commercial rates on the same terms and conditions as applicable to the third parties. Details of transacctions with related parties as at December 31, 2013 were as follows:

Name of relate party Relationship Nature of Transaction Premium Earned in 2013 Claim Paid in 2013

Nita Company Ltd. Common Director Insurance 9,991,080 -

31 POST BALANCE SHEET EVENTS31 POST BALANCE SHEET EVENTS

There was no significant event that has occurred between the balance sheet date and the date when the financial statements are authorized for issue by the Board of Directors except that the Board of Directors of Nitol Insurance Company Limited in its 112th meeting held on 08th April, 2014 has recommended Stock Dividend @ 12% & Cash Dividend 5%, subject to approval of Shareholders in the ensuing Annual General Meeting (AGM).



90

Statement showing Business Underwritten, Re-Insurance Ceded & Accepted as on 31st December- 2013

CLASS OF BUSINESS

P R E M I U M C O M M I S S I O N C L A I M S

Direct BusinessR/I

AcceptedR/I

CededNet

Direct Busi-ness

R/I Accepted

R/I Ceded

NetDirect

BusinessR/I

AcceptedR/I

CededNet

Fire

Private 73,349,072 - 20,112,669 53,236,403 11,002,361 - 8,898,063 2,104,298 6,787,101 - 1,701,129 5,085,972

Public 3,171,115 - 8,069,719 -4,898,604 - - 287,045 (287,045) 48,646 - - 48,646

Total 76,520,187 - 28,182,388 48,337,799 11,002,361 - 9,185,108 1,817,253 6,835,747 - 1,701,129 5,134,618

Marine

Private 85,737,001 - 7,062,350 78,674,651 12,860,550 - 2,219,593 10,640,957 7,103,642 - 3,576,600 3,527,042

Public 14,014,231 - 13,643,757 370,474 - - 1,845,751 (1,845,751) 1,671,338 - - 1,671,338

Total 99,751,232 - 20,706,107 79,045,125 12,860,550 - 4,065,344 8,795,206 8,774,980 - 3,576,600 5,198,380

Motor

Private 221,982,653 - 1,898,750 220,083,903 33,297,398 - - 33,297,398 53,832,674 - 2,262,834 51,569,840

Public 1,446,999 - 115,352 1,331,647 - - - - 91,967 - - 91,967

Total 223,429,652 - 2,014,102 221,415,550 33,297,398 - - 33,297,398 53,924,641 - 2,262,834 51,661,807

Misc.

Private 5,930,675 - 1,998,876 3,931,799 889,601 - 534,042 355,559 2,223,915 - 1,781,643 442,272

Public 20,361,501 - 7,831,249 12,530,252 - - 1,910,915 (1,910,915) 1,887,830 - - 1,887,830

Total 26,292,176 - 9,830,125 16,462,051 889,601 - 2,444,957 (1,555,356) 4,111,745 - 1,781,643 2,330,102

TotalPrivate 386,999,401 - 31,072,645 355,926,756 58,049,910 - 11,651,698 46,398,212 69,947,332 - 9,322,206 60,625,126

Public 38,993,846 - 29,660,077 9,333,769 - - 4,043,711 (4,043,711) 3,699,781 - - 3,699,781

Grand Total 425,993,247 - 60,732,722 365,260,525 58,049,910 - 15,695,409 42,354,501 73,647,113 - 9,322,206 64,324,907

PROXY FORM

SHAREHOLDERS’ ATTENDANCE SLIPPLEASE COMPLETE THE ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE HALL.

I/We............................................................................................................................................................................................ of ..............................

.............................................................................................................................................................................................. being a member of Nitol

Insurance Company Limited and a holder of................................................................................. ( Number of shares ) ordinary shares do hereby

appoint Mr./Mrs. ............................................................................................................................................ of ..............................................................

..................................................................................................................................................................................................................... as my Proxy,

to vote for me/us and on my behalf at the 15th Annual General Meeting of the Company to be held on June 9, 2014 and adjournment thereof, or at

any Poll that may be take in cosequence.

Signed this ....................................... day of ................... 2014.

...................................................................... ...................................................................... Signature of the Shareholder (s) Signature of the Proxy

Number of Shares held ................................

Note :This Proxy From must be signed across Twenty Taka Revenue Stamp and it should be deposited at the registered office of the Company not later then 72 hours before the time of holding the meeting (As per Articles of Association proxy will be a member of the Company )

Signature Verified

...................................................................... Authorised Signatory

I do hereby record my attendance at the 15th Annual General Meeting being held on June 9, 2014 at 11:00 A.M. at “Trust Milonayaton”, Old Airport Road, Dhaka Cantonment, Dhaka.

Signature Verified by

...................................................................... ...................................................................... Signature of the Member/Proxy Authorised Signatory of the Company

NOTE :1. Please note that AGM can only be attended by the honourable shareholder or properly constituted proxy. Therefore, any friend or children

accompanying with honourable shareholder or proxy cannot be allowed into the meeting. 2. Please present this slip at the reception desk.

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Name of the member/Proxy(in Block Letter)

BO ID No.

Mobile Number

E-mail address (if any)

RevenueStamp

Tk. 20.00

BO ID NO.

BO ID NO.

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H E A D O F F I C ENitol Centre (5th Floor), 71, Mohakhali C/A, Dhaka 1212Tel : 9857247-8, 9853084, 8834321 (PABX)Fax : +880 2 8826184Email : [email protected]

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