Delta Life Insurance 2012 p3t3o

Annual Report 2012

A !^t Delta Life Insurance Company Ltd.

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TransmittalLetter.............................................................................

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Notice of the 27111 Annual General Meeting......................................

05

Boardof Directors ...........................................................................

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Corporate Management .................................................................... Vision/Goal/Values .........................................................................

07

FinancialStatistics ............................................................................

09

Graphical Presentation of Business Performance ............................ From the Chairman's Desk .............................................................

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Directors' Report .............................................................................

15

Report of the Audit Committee ......................................................

26

Report on Corporate Governance ..................................................

27

Auditors' Report .............................................................................. BalanceSheet ....................................................................................

35

Life Revenue ......................................................................

40

Cash Flow Statement ....................................................................... Statement of Life Insurance Fund ...................................................

43

Statement of Changes in Stockholders Equity................................

45

08

12

38

44

Form-AA ......................................................................................... 46 Notes to the Financial Statements .........................................................

48

Directors' Responsibility Statement ...................................................... 83 Certificate of CEO & CFO under Corporate Governance Guidelines.......... 84 Important Offices of the Company ......................................................... 85 Proxy Form & Attendance Slip ............................................................

87

Chronology 10 November 1986

Incorporation and Commencement of Business

17 December 1986

g of First Policy

February

1988

Launching of Grameen Bima

8 October

1993

Launching of Gono Bima

7 February

1994

Inauguration of Delta Care Hospitalisation Plan

13 September 1995

Listed in Dhaka Stock Exchange Ltd.

6 December

1995

March

2001 hip of Global Network for Banking Innovation in Microfinance (GNBI)

4 January

2003 Gono-Grameen Bima Merged

30 January

2012

Listed in Chittagong Stock Exchange Ltd.

Silver Jubilee of the Company

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Transmittal Letter All Shareholders Bangladesh Securities and Exchange Commission Insurance Development and Regulatory Authority Registrar of t Stock Companies & Firms Dhaka Stock Exchange Limited Chittagong Stock Exchange Limited Central Depository Bangladesh Limited All other stake holders

Dear Sirs, ANNUAL REPORT FOR THE YEAR ENDED 31st DECEMBER, 2012 We are pleased to enclose herewith a copy of the Annual Report - 2012 together with Audited Financial Statements for the year ended December 31 , 2012 along with notes thereon for your kind information and record.

Sincerely yours,

clet4

Abdullah Al-Mansur Company Secretary

-Dort 2012:

aII

Delta Life Insurance Company Ltd. 90 Motij heel Commercial Area, Dhaka-i000, Bangladesh.

Notice of the Twenty-seventh Annual General Meeting Notice is hereby given to all the shareholders of Delta Life Insurance Co. Ltd. that the 27' Annual General Meeting of the Company will he held on Saturday, the 16th November , 2013 at 3:00 P.M. at Delta Life Tower, Plot No. 37, Road No. 45 (South) & 90 (North), Gulshan Circle -2 , Dhaka to transact the following business Agenda: 1. To receive, consider and adopt the Directors' and Auditors' Report and the Audited s for the year ended December 31, 2012. 2. To declare dividend for the year 2012 (Please see note # b) as recommended by the Board of Directors. 3. To elect Directors as per Articles of Association of the Company. 4. To appoint Auditors for the year 2013 and to fix their remuneration. 5. To approve the appointment of Independent Directors (As per Bangladesh Securities and Exchange Commission's Corporate Governance Guidelines). Dated, Dhaka October 21, 2013 By order of the Board of Directors Sd/(Abdullah Al-Mansur) Company Secretary Notes a. The Record Date has been fixed on 30th October 2013. The shareholders whose name appears in the of of the Company or in the Depository (CDBL) on the Record Date 1.e.30th October , 2013 shall be entitled to attend the meeting and to receive the dividend. b. The Board of Directors recommends 21 (twenty one) bonus shares (stock dividend) for existing 1 (one) share of Tk. 10 each out of the surplus emerged in 2012 together with accumulated surplus for the years 2005 to 2011 c. A Shareholder entitled to attend and vote at the Annual General Meeting (AGM) may appoint a proxy who must be a shareholder of the Company to attend on his/her behalf. The proxy form, duly completed & stamped must be deposited at the ed Office of the Company not less than 48 hours before the time fixed for the Meeting. d. In accordance with the Judgement of the Appellate Division of the Hon'ble Supreme Court of Bangladesh dated 20th June , 2013 , all Directors shall retire at the AGM for the year 2012 and may, if eligible, offer themselves for re-election. Nomination Form and criteria for qualification of the Directors and Election schedule are available at the ed Office of the Company. e. ission to the Meeting will be on production of the attendance slip sent with the Annual Report. 05

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Directors Mr. Aziz Ahmed, FCA, CISA Mr. Borhanuddin Ahmed Mr. Kazi Faziur Rahman Mr. Golam Sarwar Mr. Md. Mujibur Rahman Mr. Zeyad Rahman Mr. Arif Ahmed Ms. Saika Rahman Ms. Anika Rahrnan Ms. Syeda Soyeli Ahmed Mr. Md. Abdul Wahab Mr. M. Anisul Haque, FCMA Mr. Joynul Abedin

Managing Director (In-Charge) Mr. Swapan Kumar Sarkar, FCA Consulting Actuary Mohammad Sohrab Uddin, PhD, AlA Company Secretary Mr. Abdullah Al-Mansur

II

Corporate Management Managing Director (In-Charge) Mr. Swapan Kumar Sarkar, FCA Consultant Mrs. Adeeba Rahman, ACII, Chartered Insurer (UK)

S

Executive Director Brigadier General M. Mosharraf Hossain (Retd.) Dr. Ashraf Uddin

4

Senior Executive Vice President Mr. Anwarul Haque

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Executive Vice President Mr. Md. Abdul Hai Mr. M. Abdullah Saadi Mr. Md. Ahsan Habib Mr. Kama] Kumar Sarker, FCCA t Executive Vice President Mr. Md. Hafizur Rahman Khan Mr. Khandaker Md. Nurullah Mr. Md. Kamarul Haque Mr. Abdullah Al-Mansur Mr. Md. Lutfor Rahman Mr. Md. Main Uddin Faruk Mr. Md. Manzure Mawla Senior Vice President Mr. Md. Farhad Jalil Mr. Tapan Kumar Biswas Ms. Umme Habiba Mr. Mohammad Abdul Hai Dr. Md. Nazrul Islam Mr. Mahmudur Rahman Chowdhury Mr. Nripendra Podder Mr. Md. Abdul Awal Mr. Md. Asaduzzaman Mallik Mr. Md. Asif Iqbal Mr. Md. Saiful Islam Mr. Mohyminul Islam Miltan Bepari

Bankers Uttara Bank Ltd HSBC Bank Ltd. Bangladesh Krishi Bank Ltd. Janata Bank Ltd. Mercantile Bank Ltd. City Bank Ltd. Islami Bank Bangladesh Ltd.

Auditors Hoda Vasi Chowdhury & Co. Chartered ants

Pubali Bank Ltd. Dutch Bangla Bank Ltd. Rajshahi Krishi Unnuan Bank Agrani Banak Ltd. Rupali Bank Ltd. Southeast Bank Ltd. National Bank Ltd.

Premier Bank Ltd. Sonali Bank Ltd. Citibank N.A. Dhaka Bank Ltd. Bank Asia Limited Jamuna Bank Ltd. Al-Arafah Bank Ltd.

VijiOn El We will be the premier life insurance Company in Bangladesh. El We will serve our customers with respect and will provide the best solution for their needs. 1 We will be a Company with qualified professionals who will work together as a team and serve with dignity and the highest level of integrity. We believe in excellence and will continuously improve our customer service and will obtain the loyalty of our customers with service beyond their expectations. El "Adding value' will he the operative words of our organization.

oat

El

Provide financial security to our customers with insurance policies that are most suitable for them.

1 Make life insurance an easy saving instrument and a profitable one with attractive bonus and improved customer service. El Collect small savings from the people of our country and invest the accumulated savings in profitable nation building enterprises.

Valuej -

TRUEST

I

Teamwork

El

Respect for all people

El

Unquestionable integrity

El

Excellence in everything we do

ci

Speed in servicing

[El

Truthfulness

Business Performance -2012 (Taka in Crore) 2012 81.07 386.19 25.36 16.06 508.68 232.76 284.29

2011 128.32 339.21 24.33 9.31 501.17 211.29 229.67

2010 120.45 327.13 21.27 14.43 483,28 300.79 220.95

2009 107.37 300.84 19.94 10.68 438.83 181.90 204.22

2008 95.32 266.79 16.17 5.23 383.51 127.64 243.40

63.05 77.73 2771.73 2633.16 55.89 27.68

98.11 73.78 2465.18 2328.20 45.83 34.30

94.69 68.45 2158.87 2013.06 45.72 33.76

82.43 58.35 1750.29 1613.59 46.54 32.08

70.71 53.24 1469.60 1342.47 63.47 32.32

2010 2009 % 4.42 1.50 3.70 1 10.13 Assets 12.44 14.19 23.34 19.10 Life Fund 13.10 15.65 24.76 20.20

2008

First Year Renewal Group Insurance Health Insurance Gross Investment Income Claims Management Expenses a) Commission b) . Expenses Assets Life Fund Claims to (%) Management Expenses to (%) Dividend on face value of share Stock

21 bonus shares (Stock dividend) for each share of Tk.1O

-

-

Business Growth 2012

2011

(1/ I0

1)1 I(_)

(1!

12.40 11.23 12.00

09

Income (Taka in Crore)

II Grou p & Health

GN-GRB

Ordinary Life

400 350 300 250.52

250

-

248.63

---

243.97 21891

212.47

2 220.06

197.06

200 16423

'J1i iJI

150 100 -

30.62

331.64

1°

2012

2011

2010

2009

2008

& Life Fund (Taka in Crore) —4— —0-- Life Fund

2700 2633.16 2400 2100 1800 1500 1200

..

900

---.---

... -

600

-4 51 .......

438.83

0

2008

10

508.68

2009

2010

2011

2012

Investment Income

& Claim

(Taka in Crore)

(Tuka in Crore)

Claim 350

600 508.06

501.17

483.27

300

438.83

500

250

383.51

400

200 243.40

300

2 422

22095

220.67

284. 29

150 100

200

50

0 2008

2009

2010

2008

2011

2009

2010

2011

2012

2012

I Assets (Taka in Crore)

2012

277173

2011

- 2465.18

2010

2158.87

2009

1700.29

2008

1469.60

400

800

1200

1600

2000

2400

2600

Analysis of Utilisation of Income (in %) U Management Expenses Claims

Provision • Life Fund

11

FROM THE CHAIRMAN'S DESK

ear Shareholders, Assalamualaikurn, I have the pleasure to warmly welcome you all to the 27' Annual General Meeting of Delta Life Insurance Company Ltd.(DLICL) on behalf of the Board of Directors of the company. We are delighted and overwhelmed with your presence at the Annual General Meeting at our own premises. Thank you all. I am pleased to inform you that DLICL has completed another year of profitable operations despite formidable challenges. Meanwhile, the Annual Report of the Company has already been sent to you. All of you are aware of the fact that Insurance Development and Regulatory Authority (IDRA) has laid down some rules and regulations as to the rate of commission and marketing hierarchy in 2012. We strictly restructured our commission schedule and marketing hierarchy in the light of those rules and regulations. It came heavily in the way of our first year income. Despite all these impediments, Delta Life achieved commendable growth in renewal income. It is indicative of a good conservation rate of businesses and sound underwriting practices. We ed a significant rate of growth in 2012 in of income, life fund, and claims payment compared to that of 2005-11. In 2005, our life fund was TK. 843.05 crore, in 2012, it stands at TK. 2633.15 crore. Similarly, our gross income in 2005 was TK. 257.51 crore, and for the year ending on December 31, 2012; it stands at TK. 508.68 crore. In claims payment, a noteworthy growth has been observed in 2012 compared to the year 2005. In 2012, we paid and provided TK. 284.28 crore as claim, while it was TK. 52.60 crore in the year 2005. 12

I believe that the Directors' Report would present a comprehensive view that would enable you to assess the financial position of the company. I assure you that we shall always stand beside you in securing your best return on investment. A brief result of the operational performance of the company during the year 2012 and 2011 is juxtaposed here for your kind convenience: Total income of the company has increased marginally to TK. 508.68 crores in 2012 from TK. 501.17 crores in 2011, that is, by around 1.50% despite decline in first year income. The management expenses as a percentage to total income (gross) has declined. The overall expenses ratio went down to 27.68% in 2012 from 34.30% in 2011. Claims paid and provided to the valued policy holders ed a significant growth of 23.78% in 2012 compared to the year 2011. In 2012, we paid TK.284.29 crore, it was TK. 229.67 crore in 2011. Investment and other income has also ed a positive growth of around 9.98% in 2012; as such income has increased from TK. 214.16 crores in 2011 to Tk. 235.53 crores in 2012. It became possible due to a prudent investment policy of the board. On behalf of the Board of Directors, I wish to extend my heartfelt thanks and gratitude to our valued policyholders, honourable shareholders, and well-wishers for their continuous and cooperation. I also express deep appreciation to the Sponsors, Patrons, and Company Management, all of our staff for the constant /effort they provided to the Company.

Dhaka, October 05, 2013

Monzurur Rahman

Chairman Board of Directors

4

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2)t peclopj k,epopt 0

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Directors' Report Bismillahir Rahmanir Rahim Respected Shareholders, Assalamualaikum, The Board of Directors welcome you all to the 27' Annual General Meeting of Delta Life Insurance Company Limited and present before you the Annual Report together with the Audited s for the year 2012 and the Auditors' Report thereon. The Board of Directors continued to focus on two key priorities in 2012; a) to sustain growth of business, to improve financial strength and b) to invest in the future. With appropriate attention to compliance with IDRA regulations, Delta Life made steady progress towards these two areas in 2012. (iro'v1

H of Rosiness & I inancial strength:

Delta life Insurance Company Ltd. completed another business year in 2012 '4

vidend)

Particulars

A. Income Gross Income Re-insurance Net Investment Income (Interest, Dividends) Other Income Total Income (Subtotal-A)

4

B. Expenses i) Claims ii) Management Exps. Total Outgo (i+ii) Ili) Reserve for unexpired risk Total Expenditure (B) C. Excess of Income Over Expenditure (A-B) D. Life Fund b/fwd E. Adjustment made during the year F. Life C/fwd (C + D + E)

(%) of Income

100

for the Year- 2012 is furnished below: 2011

2012 Amount in Taka

(%) Increase over

Amount in Taka

2011

5,086,791,956 (57,365,054) 5,029,426,902

5,011,684,328 (36,337,655) 4,975,346,673

1.50

2,327,639,110

2,112,903,816

10.16

27,682,381 7,384,748,393

28,734,217 7,116,984,706

(3.48) 3.76

55.89

2,842,866,842

2,296,733,387

27.68 83.56

1,407,782,425 4,250,649,267

1,719,473,793 4,016,207,180

192,184,968

4,442,834,235

121,472,139 4,137,679,319

2,941,914,158

2,9 79,305,387

(1.26)

20,130,605,300

23,282,041,204 107,622,750

26,331,578,112

1.09

172,130,517

23,282,041,204

13.10

15

II The operational results (before tax & dividend) of Delta Life Insurance Company Ltd. for the year ended 31 1t December, 2012 can be evaluated by various indicators,such as income, total income, total outgo, management expenses and life insurance fund as stated below: i. Income (Gross): The income of the company consists of from OL (Ordinary Life), GN-GRB (Gono Grameen Bima) and Group Insurance business. Although, the first year income (Tk.81.07 crores as against Tk.128.32 crores in 2011) declined (by 36.82%), the overall income has increased marginally to TK. 508.68 crores in 2012 from TK. 501.17 crores in 2011, that is, by around 1.50%. In March 2012, the Insurance Development and Regulatory Authority (IDRA) introduced identical commission rate and hierarchy for the marketing team applicable for all life insurers. As a result, first year income was affected and a significant negative growth was observed. However, growth in volume of renewal 13.85% is an indication of increased business conservation ratio as well as improvement in quality of underwriting. A significant rate of increase has been observed in Group Life and Health Insurance income. It stands at TK. 41.42 crore in 2012 as compared to TK. 33.64 crore in 2011 ing a growth of 23.13%.

11.

Total Income: Total income has also increased from TK. 711.70 crores in 2011 to TK. 738.47 crores in 2012 that is by 3.76% during the twelve months ended on 2012. Investment and other income has also ed positive growth of around 9.98% in 2012; as such income has increased from TK. 214.16 crores in 2011 to Tk. 235.53 crores in 2012.

111.

Yield on investment: Average rate of interest yielded in the year 2012 is 9.84% (10.23% FY 2011)

iv. Total outgo (Tk.425.06 crores) includes payment to policy holders (claims etc.) commission and other allowances paid to development staff and officers and management expenses. The total outgo as a percentage of income has increased to 83.56% in 2012 as against 80.14% in 2011. This is mainly due to the increase in claims payment- a clear indication of our commitment to the policyholders. V.

Expenses: The management expenses as a percentage to total income (gross) has declined. The overall expenses ratio went down to 27.68% in 2012 from 34.30% in 2011. The overall management expenses are well within the allowable limit.

vi.

Life insurance fund: The life insurance fund has increased from Tk. 2,328.20 crores on December 2011 to TK.2,633.15 crores on December 2012; that is by more than 13.10%. It is a sign of healthy growth of business and financial strength.

vii. Cash flows: Cash provided by operating activities stands at Tk.63.08 crore in 2012, which represents 12.54 % of net income. Net operating cash flow per share is Tk.140/-. Dividend: Bonus to the policyholders and shareholders are given from the surplus available for distribution as per the actuarial valuation report. Following the verdict/judgment of the honourable Supreme Court of Bangladesh (Appellate Division), pending AGMs for the years 2005-12 shall be held on the same day one after another with separate and distinct notices. Surplus for the years 2005-2006, 2007-2008, 2009-2010 & 2011 have been carried forward. Out of the surplus emerged in 2012 together with accumulated surplus for the years 2005 to 2011, 21(twenty one) bonus shares (stock dividend) for each share of TK. 10 has been proposed by the Board of Directors in its meeting held on October 5, 2013 for approval of the at the 27th Annual General Meeting to be held on November 16, 2013. 16

$

Press Conference

I L)elta Life Insurance Cornpan Ltd. ln,utanc* Company) (L!9Ot B*oGIad -

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41 Management: The Company has an appropriate number of officials with proper insurance expertise. The of the management team are working in the insurance industry for a long time and participated in various on-job training programs, seminars and conferences both at home and abroad. Timely action and prudent managerial decisions have enabled the company to withstand competition vis-a-vis other life insurers of the country and provide quality services to our policyholders. Investment for the Future: We put wholehearted efforts to ensure responsible and quality Corporate Governance with the highest level of integrity. We tried to streamline the organizational structure of the company in a bid to provide quality services to our clients at an affordable cost. We have been recruiting senior insurance professionals as well as dynamic young individuals who would provide leadership in future and contribute accordingly to the growth of the company. We continue to provide strategic directions in order to develop values; strengthen team spirit and improve our core capabilities. Combined together, all of these efforts would enable the company to sustain its growth and improve financial strength in the time to come by way of providing value added services to our clients. Risk and Concerns: In the competitive business environment, risk management is a vital issue to sustain a steady growth of business. In this regard, underwriting procedures have been streamlined to minimize the risks associated with writing of new businesses. Our policies above a certain amount of sum assured are reinsured with Munich Re-insurance, a globally reputed reinsurance company. This helps us spread the risks. The company adopts a prudent investment policy which is reflected in investment income over the years. Detail of the risk control mechanisms of the company is furnished in the notes to the financial statements (Note-3.13)

17

Appointment of Auditors: In compliance with the verdict of the honourable Appellate Division of the Supreme Court of Bangladesh and following the decision of the Board of Directors, two Chartered ant firms namely MIS. Hodavasi Chowdhury & Co. and M.N Islam & Co. Chartered ants were appointed as external auditors in the 19" AGM for the year 2004 to conduct the audits of the company's s for the years 2005 to 2012. External auditors for the year 2013 shall be appointed in accordance with article no.139 of the Memorandum and Articles of Association of the company and Section 210 & 213 of the Companies Act 1994. Some Chartered ant firms have expressed their willingness for appointment as auditors. The Board of Directors has evaluated the offers of the firms and recommends that M/S. S. F. Ahmed & Co. Chartered ants be appointed as the external auditors of the Company for the year 2013. The honorable shareholders will be requested to confirm the appointment of an external auditor firm for the year 2013 and fix their remuneration in the 27 AGM of the Company. Election of Directors: Pursuant to the verdict of the Appellate Division of the Supreme Court of Bangladesh, all the directors shall retire at the AGM for the year ending 2012 and may, if eligible, offer themselves for re-election. Notably, the number of directors to be elected shall be within the limit set by the Insurance Act 2010 and the Articles of Association of the Company. Directors' Responsibility Statement: In of condition no. 1.5 issued by the BSEC notifications no: SEC/CMRRCD/2006-158/134//44 dated 07 August 2012, the Board of Directors of the Company states that: a) in the preparation of financial statements, the applicable ing standards, principles and policies have been followed along with proper explanations relating to material departures, if any; b) the management has adopted ing policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company; c)

the management has taken proper and sufficient care for the maintenance of adequate ing records in accordance with the applicable provisions of the Insurance Act 2010 & Rules 1958/Companies Act, 1994, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the management has prepared the financial statements on a going concern basis and e) the system of internal control is sound in design iincl Fi;ms been effectively implemented and monitored.

e

Resume of the Directors who have been inducted/co-opted in the year 2012: Mr. Zeyad Rahman, Sponsor Director Mr. Zeyad Rahman, son of Mr. Monzurur Rahman was born in a respectable Muslim family of Dhaka in 1983. He was co-opted as the Director of the company on May 23, 2012. He did his BSC in Finance and Economics from The Pennsylvania State University, USA. He participated in a number of business training programs, seminars and conferences both at home and abroad. Mr. Rahman was a Policy Holder Director in Delta Life Insurance Company Ltd. from 2002-2005. He has been the CEO of Rema Tea Company Limited since January 2000 and CEO of Delta Capital Ltd. since January 2005. He is a former member of the Listing Committee of the Dhaka Stock Exchange Limited. Mr. Rahman is also involved in various social works. Mr. Md. Mujibur Rahman, Public Shareholder Director Mr. Md. Mujibur Rahman was born in 1952 in a respectable Muslim family. He did his B.Com (Hons) and M.Com from the University of Dhaka in 1972 and 1973 respectively. Mr. Rahman was inducted as a Director on May 23,2012. Beside regular academic education, he participated in various professional courses and seminars both at home and abroad. His area of work experience ranges from Management and istration of s, Finance, Internal Audit to Procurement and Supply Chain and Contract and Commercial Legal affairs since 1975 in the fields of hospitality, readymade garments and real estate development. He is presently working as the Executive Director of "Shanta Properties Limited" since 2005. He is also a member of the Board of Trustees and General Secretary and Treasurer of the philanthropic nonprofit healthcare provider "Centre for Women and Child Health - CWCH" operating at Ashulia since 2004. Mr. M. Anisul Haque, FCMA, Independent Director Mr. M. Anisul Haque is a professional ant and born in a respectable Muslim family. He was inducted as an Independent Director of the company on 14th November, 2012. His expertise has been established through experiences of working in different organizations for long 19 years. In 1996, he completed his Masters in Management and also did his MBA in 2005. He is a fellow member of The Institute of Cost and Management ants of Bangladesh. He is also associated with different social and professional organizations. Mr. Joynul Abedin, Independent Director Mr. Joynul Abedin, son of Haji Mohammad Abdul Gafur, was born in a respectable Muslim family of Dhaka in 1955. He was inducted as an Independent Director of the company on 14' November 2012. He is a reputed businessman with an experience of more than 16 years. He is also a Director of Haji Gafur Land Developers Ltd. since 2002 and Managing Director of Jass Leather Industries Ltd. since 1997. He is a well known social worker and is associated with various benevolent social services. Mr. Abedin is also the Chairman of Demra Union Parishad. 19

The segment-wise or product wise performance is furnished as follows: Segment wise operational result and capital employed based on the financial statements and revenue surplus are set out below: Amount in Thousand Taka 2011 2012 Life - Less Reinsurance

2,462,757

2,481,187

- Investment & other Income

1,691,616

1,563,982

2,200,581

2,189,076

660,526

575,793

366,089

305,084

Gono-Grameen Bima - Less Reinsurance - Investment & other Income Insurance Business - Less Reinsurance

1,837

- Other Income

-

1,165

7,383,406

7,116,287

(Excess of Revenue over Expenditure) before tax & interest 2,113,683 - Ordinary Life 1,035,282 - Gono - Grameen Bima 67,719 - Group Insurance Business L 3,216,684 Total Segment Results

2,207,735 990,903 121,139 3,319,777

Total Segment Revenue

Segment Results

(167,147) Add:/(Less): Un-allocable expenditure net of un-allocable Income

(168,341)

Total Revenue Surplus (Excess of Revenue over expenditure) before tax & dividend

3,049,537

3,151,436

Capital Employed (Segment Assets Less Liabilities) - Ordinary Life - Gono - Grameen Birna - Group Insurance Business Total Capital Employed in Segments Add: Unallocated Corporate Assets Less Corporate Liabilities

18,451,901 7,493,708 385,969 26,3 3 1,578 46,000

16,409,630 6,526,650 345,761 23,282,041 46,000

Total Capital Employed in Company

26,377,578

23,328,041

Notes on Segment information Instead of reporting separately Segment Assets and Liabilities, Capital Employed figures have been disclosed for an overall understanding of the Company's financial position. ii) Un-allocable expenditure, revenue, assets and liabilities are related to common service (not directly identifiable to the individual segments) iii) Un-allocable Corporate Assets Less Corporate Liabilities represents paid-up capital and dividend equalization reserve.

i)

20

*

Key Operating and Financial Statistics:

Amount in Crore Taka

2012

2011

2010

2009

2008

First Year

81.07

128.32

120.45

107.37

95.32

Renewal

386.19

339.21

327.13

300.84

266.79

Group Insurance

25.36

24.33

21.27

19.94

16.17

Health Insurance Gross Investment Income

16.06 508.68

9.31 501.17

14.43 483.28

10.68 438.83

5.23 383.51

232.76

211.29

300.79

181.90

127.64

284.29

229.67

220.95

204.22

243.40

63.05

98.11

94.69

82.43

70.71

77.73

73.78

68.45

58.35

53.24

Assets

2771.73

2465.18

2158.87

1750.29

1469.60

Life Fund

2633.16

2328.20

2013.06

1613.59

1342.47

Claims to (%)

55.89

45.83

45.72

46.54

63.47

Management Expenses to (%)

27.68

34.30

33.76

32.08

32.32

-

-

Claims Management Expenses a) Commission b) . Expenses

Dividend on face value of L snare Stock

21 bonus shares (Stock dividend) for each share of Tk.1O

-

.c1fltcf T11. /:\

: k

RI1*fTT,

1\2c?1

1!'> NOW

cTfl

-

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I. I

Industry's Outlook: Insurance Development and Regulatory Authority (IDRA), a new regulatory body has been formed in the year 2011. IDRA has been working hard to identify the drawbacks and streamline the insurance industry at the same time. IDRA has rightly observed that the insurance industry of Bangladesh suffers from a) lack of public awareness, b) lack of efficient human resources, c) lack of proper training, d) lack of ICT facilities, e) low quality customer services and f) high production cost. In light of the above findings, IDRA has taken a number of steps to undo the drawbacks of the industry. It is to be noted that Delta Life complies with all the rules & regulations issued by the body in a bid to ensure the development of the industry in the longrun. All Out cooperation by the insurers would enable IDRA to establish the insurance industry as a vibrant one that would ably contribute to the GDP and growth of the country.

Corporate Social Responsibility: Delta Life Insurance Company Ltd. (DLICL) has always played its part in carrying out corporate social responsibilities. The Gono-Grameen department of the company provides a low cost insurance net to the poor of Bangladesh, primarily in the rural areas. DLICL has been sponsoring the prizes of Bishya Sahitya Kendra's 'Boi Para Karmashuchi' under its Desh Vittik Utkarsha Karjakram for over a decade to promote reading habit among the school goers. Women's College and National Handball Tournament, Golf Tournaments, Bangladesh Police Football Championship-2010, BUET alumni association for national seminar on freeing the nation from Arsenic contamination are DLICL's major sites of sponsorship. DLICL has been sponsoring the women's handball tournament to promote female participation in games and sports in the country for over a decade and a half. DLICL has also made donations to the Bangladesh Thalassaemia Hospital for land procurement and a Braille printer to BERDO, an organization working towards the development of the blind. All the CSR activities have made Delta Life a trustworthy name in the country.

Outlook for the year 2013: Your company is one of the leading life insurers of the country. It is well known for its large base of policyholders, huge amount of claims payment, customized products and prudent management. The company is poised to further consolidate its activities in a bid to maintain its leading position relishing a healthy growth in all spheres by way of a) developing strong marketing strategy, and b) ensuring sound insurance practices. The operational results achieved so far in 2013 shows a healthy growth over that of the year 2012. Our activities would gain further momentum in the coming days of 2013.

I

* 1r4r r

k

TUT1

r.4 4

U.

The number of Board Meetings and attendance of Directors during the year - 2012 were as follows: SI. No. 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

Name

Total number of meetings held ii 11 11 11 11 11

Total number of meetings attended

11

8

11 11 11 11 11 11 11

10 8 11 8 8 11 1

11

1

Director

11

7

Ceased as Director and Chairman on 29/02/2012. Ceased as Director on 22/05/2012. " " " " " " " " " "

11

3

11

3

11 11 11 11 11 11 11 11 11 11

2 3 3 2 3 3 3 3 3 3

Designation

1'vU. M0n7,urur Rahman Chairman Mr. Aziz Ahmed, FCA, CISA (USA) Director Mr. Borhanuddin Ahmed Director Mr. Kazi Faziur Rahman Director Mr. Golam Sarwar Director Mr. Md. Mujibur Rahman Director Inducted as a Director on May 23, 2012) Mr. Zeyad Rahman Director (Inducted as a Director on May 23, 2012) Ms. Adeeba Rahman, ACII (UK) Director Ms. Anika Rahman Director Ms. Saika Rahman Director Mrs. Syeda Soyeli Ahmed Director Mr. Arif Ahmed Director Mr. Md. Abdul Wahab Director Mr. M. Anisul Haque, FCMA Independent (Inducted as a Director on November 14, 2012) Director Mr. Joynul Abedin Independent Inducted as a Director on November 14, 2012) Director

17

Mr. Md. Nurul Islam (Resigned on November 6, 2012) Mr. Syed Moazzem Hussain

18

Dr. Syed Mukarram All

19 20 21 22 23 24 25 26 27 28

Dr. Muhammad Raushan All Mr. Mohd. Syedul Islam Mr. Nurul Huda Mrs. Farida R. Ahmed Mrs. Fahrnida R. Naser Mrs. Farida Mostafa Dr. Nasiruddin Ahmed Dr. Sadigur Rahman Malik Mr. Mahrnud Hasan Mr. Habibur Rahman Khan

Ii 11 11 11 11 8

* Directors not being present in any particular Meeting of the Board of Directors were granted Leave of Absence. N.B: In the financial year 2012, a total number of 11 board meetings and 13 numbers of Committee meetings were held and an aggregate amount of meeting attendance fees incurred for the same stands at TK12,55,000/-

23

II

The Pattern of Shareholding as on December 31, 2012. 1.5 (xxi) (a) Shareholding by Parent/Subsidiaries/Associate companies and other related parties - Nil. 1.5 (xxi) (b) Shareholding by Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer Head of Internal Audit and their Spouse and minor Children:

Shareholding of Directors: Si. No.

Name of the Directors

No. of share 84,750

1

Mr. Monzurur Rahman

2

Mr. Aziz Ahmed, FCA, CISA (USA)

3

Mr. Borhanuddin Ahmed

16,810

4

Mr. Kazi Fazlur Rahman

1,200

5

Mr. Goiam Sarwar

20,000

6

Mr. Md. Mujibur Rahman

153,650

7

Mr. Zeyad Rahman

101,880

8

Mr. Arif Ahmed

20,000

9

Ms. Adeeba Rahman, ACII (UK)

10

Mrs. Syeda Soyeli Ahmed

11

Ms. Anika Rahman

102,630

12

Ms. Saika Rahman

101,900

13

Mr. Md. Abdul Wahab

14

Mr. M. Anisui Haque, FCMA (Independent Director)

Nil

15

Mr. Joynul Abedin (Independent Director)

Nil

1,000

102,260

3,200

1,000

Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit. 1.5 (xxi) (c) Shares held by Executives: 1.5 (xxi) (d) Shareholders holding 10% or more voting rights:

Nil Nil Nil 915tTT I9

g

1R 9T

,

itj'rT cifrW (T1) trii

irr

Ii

Appreciation: On behalf of the Board of Directors, I wish to extend my heartfelt gratitude to our valued policyholders, honourable shareholders, Office of the Insurance Development and Regulatory Authority IDRA, our bankers, Bangladesh Securities and Exchange Commission (BSEC), Dhaka and Chittagong Stock Exchanges and the Central Depository of Bangladesh Ltd. (CDBL) for their continuous and cooperation. The Board of Directors also expresses deep appreciation to the Sponsors, Patrons, and Company Management, all of our staff and well wishers whose continuous /effort and patronage have made these results possible. For and on Behalf of the Board,


Monzurur Rahman Chairman Board of Directors

25

Report of the Audit Committee The Audit Committee of the Board comprises of the following of the Board of Directors.

CIO)

Mr. Mii. \1nied, FCA. CISA (USA) Chairman

Mr. Rorl.iniiddin Ahmed bleniber

Mr. Md. Mujibur Rahman Member

Si. No Name Mr. Aziz Ahmed, FCA, CISA 1 Mr. Borhanuddin Ahmed 2 Mr. Md. MujiburRahman 3 Mr. Zeyad Rahman 4

Mr. 7eyad Rahinan Member

Status Chairman Member Member Member

During the year 2012 the Audit Committee of the Board of Directors conducted six meetings. Among other things of importance to the Company, the Committee discussed, reviewed and evaluated the following issues and provided guidelines and directives to improve risk management, internal and management controls and overall enhancement of the abilities of governing body to fulfill its legal responsibilities. • Considered and made recommendation to the Board on the appointment and remuneration of external auditors, M. N. Islam & Co. and Hoda Vasi Chowdhury & Co. Chartered ants for the year 2005 to 2012 in compliance with the verdict dated 20th June 2013 of the Appellate Division of the Supreme Court of Bangladesh Civil Appeal Nos.43 & 44 of 2012. • Reviewed the structure of the Internal Audit Department and recommended strengthening it to improve its ability to produce quality audits. • Reviewed the Internal Audit Plans of 2012 and later Audit Plans for 2013 and provided guidelines for appropriate audit coverage based on risk of exposure. Approved the audit plans for the two years. • Reviewed the Internal Audit reports and the findings in details of 75 assignments. • Evaluated Management's performance in setting up the appropriate corporate culture by communicating the importance of Internal Control and risk management to ensure that all employees of the company have understood their roles and responsibilities. • Monitored the corrective measures taken by Management as recommended by Internal Audit to improve risk management and the financial and operational performance of the Company. • Reviewed policy guidelines to comply with the rules and regulations of the SEC and Insurance Regulatory Authorities including anti money laundering processes adopted by the Company. • Reviewed the Annual Financial Statements of the Company.

4ø9J (Aziz Ahmed, FCA, CISA) Chairman 26

The Report on Corporate Governance Introduction: Delta Life Insurance Company Limited has set goals and targets to achieve a high standard of performance by offering innovative Life Insurance products and services to both village and city-dwellers. Our continued expansion and success in promoting micro-insurance at affordable rates is a glowing example that Life Insurance is not only meant for the rich and privileged but also for those who live on minimal income and savings. The Board of Directors and the Management of Delta Life Insurance Company Limited firmly believe that protecting the interests of the Shareholders as well as that of the Policyholders is the only way to take the Company forward. The Concept of Corporate Governance: Corporate Governance is a discipline by which a set of laws and regulations framed by the Regulatory Authorities have been put in place to protect the interests of the policyholders as well as shareholders. These laws ensure that the Board of Directors of a Company work in a manner assuring transparency, ability and integrity in all its activities. The principles of Corporate Governance help a corporate organization or a Company to minimize conflict of interest in order to safeguard the assets of the company. Composition of the Board: The Board of Directors of Delta Life Insurance Company Limited sets the basic plans and principles of Corporate Governance in compliance with the Regulatory Authorities and oversees that the Management materialize those plans into actions for the interest of both the Policyholders and the Shareholders. The Board of Directors of Delta Life Insurance Company Limited is comprised of 15 (fifteen) including 2 (two) Independent Directors, The review the implementation process of their strategic plans in the regular Board and Committee meetings and set internal control mechanism for the best interest of the Company. Responsibilities of the Board: The prime responsibilities of the Board of Directors of Delta Life Insurance Company Limited include setting the policies and guidelines on investment, recruitment of CEO and other posts, risk analysis and risk minimization, monitoring and overseeing internal control and compliance of statutory functions and taking decisions on any significant issue and policy matter of the Company. They sit together in regular meetings in order to take decisions that guide the management to run the Company smoothly and profitably. In certain cases the Board form different Sub-Committees and delegate specific responsibilities to the same to assist the management to solve certain operational and organizational problems, in order to safeguard the best interests of the Shareholders and Policyholders of the Company. The role of Chairman and CEO: The Chairman of the Board of Directors plays a vital role to oversee that the targets, guidelines and policies adopted by the Board are implemented by the Management properly. Apart from those functions the Chairman presides over all Board meetings, Annual General Meetings, Extra-Ordinary General Meetings and any other important internal business meetings and conferences called to motivate sales personnel and agents in order to improve sales and profitability. The Chairman appointed the Chief Executive Officer after consulting with the Board of Directors as per conditions set by the Regulatory Authorities. The Chief Executive Officer reports to the Chairman of the Board of Directors. His responsibilities include execution of Board decisions, organizational leadership for growth of income and profitability, development of human resources and setting a vision for future development of the Company. 27

Audit. coinulittec: The Audit Committee is constituted by 4 (four) from the Board of Directors. They hold meetings regularly under the directive of its Chairman. The major function of the Audit Committee is to oversee the operations of the internal audit department in their pursuit to ensure proper financial control in the Company. The also scrutinize all the Audited and Unaudited s submitted before them which are finally forwarded to the Board of Directors with recommendations for approval. Relationship with Shareholders and other Stakeholders: The Shareholders and other Stakeholders of Delta Life meet with the Board of Directors and the Management once a year in the Annual General Meeting where they exchange their views with the Board on financial and operational aspects of the Company based on audited and un-audited s published quarterly and half-yearly in the Newspapers and annually in the Annual Reports. Their suggestions are noted and duly implemented whenever deemed appropriate and necessary by the Board of Directors and the Management.

28

Annexure - I

CORPORATE GOVERNANCE COMPLIANCE REPORT Status of compliance with the conditions imposed by the Commission's Notification No. SEC/CMRRCD/ 2006-158/134//44 dated 07th August, 2012 issued under section 2CC of the Bangladesh Securities and Exchange Ordinance , 1969. Report under condition No.- 7.00. Title Condition No.______________ Board of Directors: 1. Board's Size 1.1 1.2 Independent Directors: At least t/5-of the total number of Directors of 1.2(i) board shall be Independent Directors. Who holds less than 1% shares of total paidup shares of the company; 1.2(1) h) Not a sponsor of the company and is not connected with the company's any sponsor or Director or shareholder who hold 1% or more shares: 1.2(u) c) Not have any other relationship with the company its subsidiary/associated companies: 1.2(u) d) Not a member, director or officer of any stock exchange; Not a shareholder, director or officer of any 1.2(1) e) member of stock exchage or Not or was not a partner or executive during the 1.2(u) 0 preceding 3 (three) years of the company's statutory audit firm; Not he an independent director in more than 3 1.2(1) g) (three) listed companies; 1.2(u) Is) Not been convied by a court of competent jurisdiction; Not been convicted for a criminal offence involving 1.2(u) i) moral turpitude; Appointed by the hoard of directors approved by 1.2 (iii) the shareholders in the Annual General Meeting (AGM); 1.2 (iv) Independent director's post can't remain vacant. for more than 90 days; 1.2 (v) The board shall lay down a code of conduct of all board and annual compliance be recorded; The tenure of office for a period of 3 (three) years, 1.2 (vi) which may be extended for 1 (one) termonly. Qualification of Independent Director 1.3 1.3(i) A knowledgeable individual with integrity and able to ensure compliance with financial regulatory and corporate laws and can make meaningful; Independent directors will he business leader 1.3(u) corporate leader with economics or businesstudies or law background and In special cases the above qualification may be 1.3(iii) relaxed subject to prior approval of the commission; Chairman of the Board and Chief Executive 1.4 Officer The Director's Report to Shareholders 1.5 Industry outlook & possible future development in 1.5(1) the industry.

Compliance Status Not complied Complied

.

-

Remarks (If any)

Independent Direett,r, have been appointedaeeordir,gly.

1.2(1) a)

'I

Will be complied when the AGM for the year 2012 is held.

'I 'I

29

Condition -No. 1.561) 1.5(iii) 1.5(1v) 1.5(v) 1.5(vi) 1.5(vii) 1.5(viii)

1.5(ix) 1.5(x) 1.5(xi) 1.5(xii) 1.5(xiii)

1.5(xiv)

1.5(xv) 1.5(xvi) 1.5(xvii) 1.5(xviii) 1.5(xix) 1.5(xx) 1.5(xxi) a) 1.5(xxi) b)

1.5(xxi) e) 1.5(xxi) d) 1.5(xxii) a) 1.5(xxii) b) 1.5(xxii) c) 2. 2.1

2.2

3. 3(i) 3(u)

30

Title

Compliance Status Not complied Complied

Segment wise performame or product wise perfor mance. Risks and concerns. Discussion on Cost of goods sold, Gross and Net Profit Margin. Discussion on continuity of any Extra-Ordinary gain or loss. Disclosure of related paity transaction in the Annual report. Utilization of proceeds from public issues, rights issues and/or through any others instruments. An explanation if the financial results deteriorate after the company goes for IPO, RPO, Rights offer, Direct listing etc. Significant variance between quarterly Financial Performance and Annual Financial Statement. Remuneration to directors including independent directors. Fairness of state of the affairs. Maintenance of proper hooks of s Appropriateing policies, consistency applied in preparation of the financial statement on prudent judgment. Followed the rules of IAS/BAS/IFRS/BFRS in preparing financial statements as applicable in Bangladesh. Sound and effective design of internal control has been implemented & monitored. Ability to continue as -a going concern. Significant deviations from last year's operating results shall he highlighted & reason be explained; Presentation of key operation and financial data for last 5 (five) years. If dividend has not declared for the years, reason should be given; Number of Board Meeting held during the financial year & attendance by each Shareholding pattern disclosure Disclosure of shareholding by Directors, CEO, Company Secretary, CFO, Head of Internal Audit & their Spouses and minor children. Disclosure of shareholding by Executives. Shareholders holding ten percent (10%) or more Brief resume of the director Nature of his /her expertise. Other companies' directorship & hip of committees of that Board. Chief Financial Officer (CFO), Head of Internal Audit and Company Secretary (CS); Appoirtmeritof: . . - Chief Financial Officer (CFO) - Head of Internal Audit - Company Secretary (CS) Requirement to attend Board Meetings; - Chief Financial Officer (CFO) Company _Secretary _(CS) Audit Committee Sub-committee of the Board of Directors. Assisting the Board of Directors for ensuring true and fair view of the state of affairs;

Remarks (If any)

N/A N/A N/A N/A N/A N/A

11 meetings held with an average of 92% attendance

1 N/A

Compliance Status Condition Title No._________________ Complied Not complied 3(iii) Duties of the audit committee clearly set forth in writing. Constitution of the Audit Committee 3.1 3.1 (i) Audit committee membes at least 3 (three) 3.1 (ii) Audit committee are appointed b y Board of Directors and inclusion of at least 1 (one) independent director. 3.1 (iii) Financial literacy having at least 1 (one) member with ing or related financial management experience. 3.1 (iv) Fill up the vacancy immediately or not later than 1 (one) month from vacancy(ies) 3.1 (v) Company Secretary will act as Secretary. 3.1 (vi) Quorum of the Audit Committee with at least 1 (one) Independent Director 3.2 Chairman of Audit Committee 3.2 (i) Selection of the Chairman of the Audit Committee who shall be an Independent Director

3.2 (ii) 3.3 3.3 (i) 3.3 (ii) 3.3 (iii) 3.3 (iv) 3.3 (v)

3.3 (vi)

3.3 (vii) 3.3 (viii) 3.3 (ix) 3.3 (x) 3.4 3.4.1 3.4.1 (i) 3.4.1 (ii) 3.4.1 (ii) a) 3.4.1 (ii) b) 3.4.1 (ii) c) 3.4.1 (ii) d) 3.4.2 3.5 4. 4 (i)

Chairman of Audit Committee shall remain present in AGM. Role of the Audit Committee Oversee the financial reporting process Monitor choice of ing policies and principles Monitor Internal Control Risk management process. Oversee hiring and performance of external auditors. Annual financial statements review along with the management before sabmission to the Board for approval. Quarterly and half yearly financial statements review along with the management before submission to the Board for approval. Review adequacy of internal audit function Significant related party transaction review. Statutory auditor's report review. Disclose the use / application of funds raised through IPO/RPO/Righi. Issue proceeds. Reporting of the Audit Committee Reporting to the Board of Directors Reporting its activities to the Board of Directors. Report to the Board by Audit Committee Conflict of interest. Suspected or presumed fraud or irregularity or —material defect in the internal control system; Suspected infringement of laws, including securities related laws, rules and regulations; Any other matter; Reporting to theAuthorities Reporting to the Shareholders and General Investors External /Statutory Auditors should not engage; Appraisal or valuation services or fairness opinions.

Remarks (If any)

Already complied on May 4, 2013.

Already complied on August 29 , 2013. Will be compliedin accordance vrith judgment of the Appellate Division of the Supreme Court on 20/06/2013

J N/A

N/A

N/A

31

Compliance Status Remarks Title Condition (If any) No._________________________ Complied [ Not complied Financial information systems design and 4 (ii) implementation. Book-keeping or ing records or financial 4 (iii) statements. Broker-dealer services. 4 (iv) Actuarial services 4 (v) Internal audit services. 4 (vi) Any other service determined by the audit 4 (vii) committee. Possess any share by the partneior employees of 4 (viii) the firm at least during the tenure of their audit assignment. Subsidiary Company; 5. N/A Composition of Board of Directors. 5. (i) At least 1 (one) Independent Director from holding 5. (ii) As disclosed in the N/A company. notes to the s N/A No. 12.05 Confirmation of minutes by holding company. 5. (iii) Confirmation of minutes of subsidiary company 5. (iv) at Page No. 71 N/A shown in holding company's minutes. Review the financial statements by holding 5. (v) N/A company's audit committee. Duties of Chief Executive Offiae(CEO) and 6. Chief Financial Officer (CFO): Reviewing financial statements 6.(1) No misleading statements 6.(1) a) Present a true and fair view in compliance with 6(1) b) existing ing standards and applicable laws. Declaration about/regarding authentication 6 (ii) Reporting and Compliance of Corporate 7. Governance: Compliance certificate from a Professional 7.(1) ant /Secretary. Statement of Directors in accordance with the 7. (ii) annexure attached whether the company has complied with.

32

Hoda Vasi Chowdhury & Co. Chartered ants Independent Correspondent Firm to Deloitte Touche Tohmatsu

CERTIFICATE OF COMPLIENCE TO THE SHAREHOLDERS OF DELTA LIFE IUNSURANCE COMPANY LIMITED FOR THE YEAR ENDED DECEMBER 31, 2012 (As required under the BSEC Corporate Governance Guidelines)

We have examined the compliances of conditions of the Corporate Governance Guidelines of the Bangladesh Securities and Exchange Commission by Delta Life Insurance Company Ltd. as stipulated in clause 7 (i) of BSEC Notification No. SEC/CMRRCD/2006-158/134//44 dated 07 August, 2012. The Compliances of conditions of The Corporate Governance Guidelines as stated in the aforesaid notification and reporting to the status of compliance is the responsibility of the company's management. Our examination for the purpose of issuing this certification is limited to the checking of procedures and implementations thereof, adopted by the company for ensuring the compliance of conditions of corporate Governance and correct reporting of compliance status on the attached statement on the basis of evidence gathered and representation received. To the best of our information and according to the explanations given to us , we certify that, except as reported on the attached status of compliance statement [1.2(i), 1.2(iii), 3.1(u), 3.1(vi), & 3.2(i)], the company has complied with the conditions of Corporate Governance stipulated in the above mentioned BSEC notification dated 7 August 2012. We also state those noncompliances were occurred due to delay in holding AGM because of pendency of CIVIL APPEAL NO: 43-44 of 2012 for the financial year 2005 to 2012.

Date, October 05, 2013

Hoda Vasi Chowdhury & Co. Chartered ants

33

Auditors' Report V

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Auditors' Report to the Shareholders We have audited the accompanying financial statements of Delta Life Insurance Company Limited, which comprises Balance Sheet as at 31 December, 2012 and the related Life Revenue s and Cash Flows Statement, Statement of Changes in Equity for the year ended, and a summary of significant ing policies and other explanatory notes. Management 's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRS), the Companies Act 1994, the Insurance Rules 1958, Insurance Act 2010, The Securities and Exchange Rules 1987 and other applicable laws and regulations. This responsibility includes: deg, implementing, and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate ing policies and making ing estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control . An audit also includes evaluating the appropriateness of ing policies used and the reasonableness of ing estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the Financial Statements prepared in accordance with Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the statement of the company's Affairs as at 31st December 2012 and of the results of its operations, its cash flows and statement of changes in equity for the year then ended and comply with the Companies Act 1994, the Insurance Rules 1958, Insurance Act 2010, the Securities and Exchanges Rules 1987 and other applicable laws and regulations. Further to our opinion in the above paragraph, we state that: We have obtained all the information and explanations which to the best of our knowledge and (i) belief were necessary for the purpose of our audit and made due verification thereof; 35

(ii)

in our opinion, proper books of as required by law have been kept by Delta Life Insurance Company Limited, so far as it appeared from our examination of those books;

(iii)

the company's Statement of Balance Sheet, Life Revenue s, Statement of Cash Flows and its Statement of Changes in Equity dealt with by the report are in agreement with the books of and returns;

(iv)

The expenditure incurred was for the purpose of the company's business.

(v)

As per section 62 (2) of the Insurance Act 1938 as amended, we certify that to the best of our knowledge and belief and according to the information and explanations given to us, all expenses of management whenever incurred and whether incurred directly or indirectly, in respect of insurance business of the Company transacted in Bangladesh during the period under report have been duly debited to the related Revenue of the Company and,

(vi)

As per the Insurance Act 2010 as amended, we certify that to the best of our knowledge and as shown by its books, the company during the period under report has not paid any person any commission in any form outside Bangladesh in respect of any of its business re-insured abroad.



Annual R I

-

iii -lia -

Financial Statements

rM

I

As at December 31, 2012 Notes

SHARE CAPITAL AND LIABILITIES SHAREHOLDERS' CAPITAL

2012 Taka

2011 Taka

4.00

Authorized 5,000,000,000 50,00,00,000 Ordinary Shares of Tk. 10 each

300,000,000

Issued, ubscri hc1 uiiJ 1 > uJ up 45,00,000 Ordinary Shares of Tk. 10 each

45,000,000

45,000,000

fully paid up in cash

1,000,000

Dividend Equalisation Reserve

23,282,041,204

5.00 26,331,578,112

life insurance Fund

Estimated liabilities in respect of outstanding claims, 6 .00 whether due or intimated Amount due to other persons or bodies carrying on 7.00 insurance business 8.00 Sundry Creditors 9.00 Provision for Doubtful Debts Reserve for Unexpired Risk 10.00 Deposits

1,000,000

665,191,938

551,180,711

67,197,302 329,371,461 73,363,920 192,184,968 12,400,090 1,339,709,679

27,717,287,791 [OTAL SHAKE CAPITAL AND LIABILITIES

31,409,897 532,578,735 75,699,494 121,472,139 11,462,899 1,323,803,875 24,651,845,079

The annex notes form an integral part of these financial statement

A4z4la 4M2PVn_

Swapan Kumar Sarkar, FCA Managing Director (In-charge)

38

Md. Mujibur Rahman Director

V. CL^

Aziz Ahmed, FCA, CISA Monzurur Rahman Director Chairman

-

As at December 31, 2012 2012 Taka

Notes PROPERTY AND ASSETS

509,955,906

1 LOAN 1.00 On Insurer's Policies within their surrender value 12.00 INVESTMENT (AT COST), Statutory Deposit with Bangladesh Bank (BGTB) Bangladesh Govt. Treasury Bond (BGTB) Shares Listed on Stock Exchanges Debentures and Bonds Mutual Fund Central Depository Bangladesh Ltd. DUG Securities Limited (Subsidiary) Other Loans

12.05

Agents' Balance Outstanding Interest, Dividends and Rents Accruing But Not Due Advances And Deposits Sundry Debtors

13.00 14.00 15.00 16.00

(\SI-1 ANT) BANK BALANCES

17.00

On Fixed Deposit with Banks On Current with Banks On STD with Banks Cash in Hand Cash in Transit Collection in Hand Branch Petty Cash

18.00

2011 Taka

444,369,078

2,000,000 8,385,482,195 5,131,994,379 476,518,717 30,000,000 3, 138,890 320,200,000 91,154,267

2,000,000 6,725,040,490 3,976,783,821 536,553,527 30,000,000 3,138,890

14,440,488,448

11,373,402,683

3,461,053 646,608,173 806,813,031 785,420,077 55,089,341

3,450,059 633,403,068 836,810,804 635,008,233 55,094,848

7,652,567,484 384,335,639 947,127,835 1,353,853 11,823,448 2,881,182 9,000,089,441

8,025,465,759 431,078,770 731,324,450 1,727,297 22,731,360 284,257,854 94,712,691 9,591,298,181

1,456,667,484 12,694,837 27,717,287,791

1,069,301,728 9,706,397 24,651,845,079

99,885,955

OTHER S Fixed Assets (At Cost Less Depreciation) Stamps, Printing and Stationery in Hand I 0 1 \I PROPERTY\ \NI) ASSETS

19.00


Swapan Kumar arkar, FCA Managing Director (In-charge)


Aziz Ahmed, FCA, CISA Monzurur Rahman Chairman Director

Signed as per annex report on even date WcL


Hoda Vasi Chowdhury & Co. Chartered ants 39

71-

T;fr

For the year ended December 31, 2012 Notes BALANCE OF FUND AT THE BEGINNING OF THE YEAR ADJUSTMENTS MADE DURING TIlE YEAR

20.00

I,F,SS REINSURANCE First Year (OL) First Year (GN-GRB)

21.00

Group Life Insurance Health Insurance Gross Reinsurance Net

TOTAL INCOME First Year , where the maximum paying period is; Single Four years Five years Six years Seven years Eight years Nine years Ten years Eleven years Twelve years or over (including throughout life)

40

2011 Taka

2012 Taka 23,282,041,204

20,130,605,300

107,622,750

172,130,517

371,198,513 439,48 1,594 810,680,107 2,100,825,850 1,761,099,104 3,861,924,954 253,61 1,545 160,575,350 414,186,895 5,086,791,956 (57,365,054) 5,029,426,902

Renewal (OL) Renewal (GN-GRB)

INTEREST, DIVIDENDS AND RENTS OTHER INCOME

22.00 2,327,639,110 23.00 27,682,381

30,774,412,347

39,127,770 24,626 1,907,326 133,871 268,491 182,533 60,963 326,121,651 10,290,786 432,562,090 810,680,107

726,365,569 556,788,527 L 1,283,154,096 1,759,858,543 1,632,287,401 3,392,145,944 243,315,189 93,069,099 336,384,288 5,011,684,328 (36,337,655) 4,975,346,673 2,112,903,816 28,734,217 27,419,720,523

38,882,371 3,228,114 640,651 200,979 251,038 221,602 440,689,182 17,601,978 781,438,181 1,283,154,096

For the year ended December 31, 2012 Notes CLAIMS UNDER POLICIES (INCLUDING PROVISION FOR CLAIMS DUE OR INTIMATED), LESS REINSURANCE

2012 Taka

2011 Taka

24.00

By Death By Maturity By Survival By Hospitalisation By Others By Surrenders Annuities Bonus in Cash Profit Commission

198,712,875 1,584,915,505 507,657,519 69,301,485 3,555,305 82,607,186 617,740 376,596,797 2,823,964,412 18,902,430 2,842,866,842

175,958,447 1,191,638,516 532,815,046 73,383,977 2,981,406 61,605,953 561,189 243,535,362 2,282,479,896 14,253,491 2,296,733,387

EXPENSES OF MANACFJ1ENT

Commission: 25.00 (a) Commission to Insurance Agents (Less that on reinsurance) (b) Allowances and Commission [other than commission including in sub-item (a) preceding] Salaries etc. (other than to agents and those contained in i. lie allowance and commission) Development Salaries & Allowances Development Incentive Traveling and Conveyance Directors Fees Auditors Fees Medical Fees Legal and Professional Fees 26.00 Insurance Policy Stamp ment and Publicity 27.00 Printing and Stationery Office Rent Bank Charges Repairs and Maintenance Car Fuel, Maintenance & Repairs Group Insurance Papers and Periodicals Telephone, Telex and Electricity etc. Training & Recruitment Expenses Fees, Subscriptions and Donation 28.00 Entertainment Insurance (General) Postage and Telegram

506,653,0

791,284,363

123,821,179 630,474,261

189,857,335 981,14 1,698

413,390,239 10,798,099 26,383,926 7,050,083 1,048,000 1,000,000 2,150,635 6,507,451 9,395,437 9,406,597 16,624,741 84,390,181 43,383,914 5,610,590 27,383,272 5,336,752 515,950 15,080,772 1,734,769 4,598,268 2,714,139 2,190,938 3,362,088

418,643,494

6,752,911 761,150 2,320,826 12,784,639 14,515,600 8,326,463 17,151,096 71,461,193 41,311,807 6,046,978 24,631,447 5,549,060 535,455 11,325,752 2,158,705 4,188,722 2,005,658 2,775,316 3,363,474 41

For the year ended December 31, 2012 2012 Taka

Notes

Uniform and Liveries Development Expenses Prizes and Awards Conference Company Registration (Renewal) Fees Stamps Staff Transport Expenses EGM Expenses Silver Jubilee Corporate Social Responsibilities (CSR) Depreciation on Fixed Assets CDBL Related Charges

Provision for Doubtful Debts Reserve for Unexpired Risk Provision for Income Tax

680,731 14,521,029 9,072,317 5,631,273 17,469,195 2,130,234 1,467,092 906,884 1,233,926

841,774 13,199,916 1,137,964 8,180,779 18,474,420 2,147,778 2,004,020 537,125 2,582,442 232,900 26,342,547 1,519,002 777,257,508

27,392,987 715,920 737,831,334

1,407,731,769

1,718,973,032

50,656 192,184,968 -

500,761 121,472,139

26,33 1,578,112 30,774,412,347

23,282,041,204 27,419,720,523

29.00

BALANCE OF THE FUND AT THE END OF THE YEAR AS SHOWN IN THE BALANCE SHEET TOTAL

2011 Taka





Signed as per annex report on even date


42


For the year ended December 31, 2012 2012 Taka Cash flows from Operating Activities Collection from Other Income received Payment for Claims Payments for Operating activities Source Tax (Income Tax) deducted Net cash from operating activities Cash flows from Investing Activities Investment made Acquisition of Fixed Assets Loan against Policies Paid Other Loans realised Interest, dividends & rents received Proceeds from sale of Fixed Assets Net Cash used in investing activities Cash flows from Financing Activities Dividend Paid Net cash used in financing activities Net increase in Cash & Cash equivalents Cash and Cash equivalents at the beginning of the period Cash and Cash equivalents at the end of the period

2011 Taka

5,073,586,851 25,625,794 (2,728,855,615) (1,588,289,324) (151,271,190) 630,796,516

[274,282j 27,770,916 (2,393,538,389) (1,589,780,318). --__(89,1944)1 1,229,540,521

(3,075,817,453) (453,442,559) (65,586,828) 8,731,688 2,361,900,087 2,209,809 (1,222,005,256)

(837,682,832) (393,282,511) (41,497,232) 3,174,725 1,790,169,702 1,343,042 522,224,894

L (591,208,740) 9,591,298,181 9,000,089,441 -

1,751,765,415 7,839,532,766 9,591,298,181





43

As at December 31, 2012 Taka AS1'1 Loan on Insurer's Policies within their surrender value Investments Agents' Balance Outstanding Interest, Dividends & Rents accruing but not due Advances & Deposits Sundry Debtors Cash & Bank Balances Fixed Assets (at cost less depreciation) Stamps, Printing and Stationery in Hand

509,955,906 14,440,488,448 3,461,053 646,608,173 802,549,827 785,420,077 55,089,341 9,000,089,441 1,456,667,484 12,694,837 27,713,024,587

LESS: LIABILITIES Estimated liabilities in respect of outstanding claims, whether due or intimated Amount due to other persons or bodies carrying on insurance business Sundry Creditors Provision for Doubtful Debts Reserve for Unexpired Risk Deposits Dividend Equalisation Reserve

665,191,938 67,197,302 325,108,257 73,363,920 192,184,968 12,400,090 1,000,000 1,336,446,475 26,376,578,112 (45,000,000) 26,331,578,112

Gross Fund (Assets - Liabilities) Shareholders' Capital (Paid-up Capital) Life Insurance Fund as at December 31, 2012


wi Swapan Kumar Sarkar, FCA Managing Director (In-charge)

44



For the year ended December 31, 2012

Particulars Balance as on 01 January 2012 Bonus Share for the Year 2011

Share Capital

Share

General Retained Other Reserve Earnings Reserve

45,000,000

-

-

-

-

-

-

-

-

-

45,000,000

-

-

-

-

Balance as on

31 December 2012

Total

45,000,000

45,000,000

The annexed Notes 1 to 37 form an integral part of these financial statements. These financial statement were approved by the Board of Directors on October 05, 2013 and were signed on its behalf by:


^^ijjjjjjjiii

W



^011/_/


45

As at December 31, 2012 FIR, WFIT^

LOAN On Insurers Policies within their surrender value

509,955,906

509,955,906 Realisable Value

INVESTMENT Statutory Deposit with Bangladesh Bank (BGTB) Bangladesh Govt. Treasury Bond (BGTB) Shares Listed on Stock Exchanges Debentures and Bonds Mutual Fund Central Depository Bangladesh Ltd. DLIC Securities Limited Other Loans

2,000,000 8,385,482,195 5,131,994,379 476,518,717 30,000,000 3,138,890 320,200,000 91,154,267

2,000,000 At Cost 8,385,482,195 At Cost 5,934,139,559 Market Value 476,518,717 At Cost 30,000,000 At Cost 3,138,890 Book Value 320,200,000 91,154,267 Realisable Value

CASH AND BANK BALANCES On Fixed Deposit with Banks On Current with Banks On STD with Banks Cash in Hand Cash in Transit Branch Petty Cash

7,652,567,484 384,335,639 947,127,835 1,353,853 11,823,448 2,881,182

7,652,567,484 Book Value 384,335,639 Book Value 947,127,835 Book Value 1,353,853 Book Value 11,823,448 Realisable Value 2,881,182 Realisable Value

OTHER S Agents' Balance Outstanding Interest, Dividends and Rents Accruing But Not Due Advances And Deposits Sundry Debtors Fixed Assets (At Cost Less Depreciation) Stamps, Printing and Stationery in Hand

3,461,053 646,608,173 802,549,827 785,420,077 55,089,341 1,456,667,484 12,694,837

3,461,053 Realisable Value 646,608,173 Realisable Value 802,549,827 Realisable Value 785,420,077 Realisable Value 55,089,341 Realisable Value 1,456,667,484 Carrying Value 12,694,837 At Cost



46

wz Md. Mujibur Rahman Director


Notes to the Financial Statements

Em

For the year ended December 31, 2012 1.00 LEGAL STATUS AND NATURE OF BUSINESS 1.01

Establishment and status of the Company Delta Life Insurance Company Ltd. was incorporated in Bangladesh in 10th November, 1986 as a public Limited Company under the Companies Act. Its shares are quoted on the Dhaka Stock Exchange and Chittagong Stock Exchange. The company started its business in December 1986.

1.C2

Nature of Business The company is also ed with the Controller of Insurance / The Insurance Development and Regulatory Authority (IDRA) in carrying on the business of life insurance. The company's life insurance business comprises of Individual life for urban and suburban people, micro insurance in the name of Gono-Grameen Bima (GN-GRB) for low income group with limited or no access to financial instruments and Group business for conglomerates. Most of the products are participating traditional while few products under individual life are non-participating traditional. To enhance the benefits of the plans accidental and disability riders are also offered.

2.00 BASIS OF PRESENTATION AND STATEMENT OF COMPLIANCE 2.01

Statement of Compliance The following underlying assumptions, measurement base, laws, rules, regulations and ing pronouncements have been considered in preparing and presenting the financial statements: Going Concern • Accrual unless stated otherwise except for Cash Flow Statement. • • Historical cost convention The Insurance Act / Rules 1958 • Provisions of the Companies Act 1994 • The Securities and Exchange (SE) Rules • The Listing Regulations of Dhaka and Chittagong Stock Exchanges • Income Tax Ordinance 1984 • The Bangladesh ing Standards (BAS) 1, 2, 7, 8, 10, 12, 16, 19, 24, 34, & 37 which • have been adopted by the Institute of Chartered ants of Bangladesh (ICAB), and Any other applicable laws, regulations, covenants and conventions etc. • In case requirements differ provision of Company's Act 1994, the Insurance Act/Rules and SE rules 1987 shall take precedence. These financial statements have been prepared on the format of financial statements prescribed in the Insurance Act/ Rules 1958 and SE rules 1987.

48

2.02 The Functional and Presentation Currency Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates. The financial statements are presented in Bangladeshi Taka, which is the company's functional and presentation currency. Figures in these financial statements have been rounded to the nearest Taka.

2.03

Use of Critical ing Estimates and Judgments The preparation of financial statements in conformity with the accepted ing principles and standards require that the company's management make estimates and assumptions that affect the reported amounts of income and expenses for the year and reported balances of assets and liabilities. The estimates and assumptions used in the accompanying financial statements are based upon management's evaluation of the relevant facts and circumstances of the date of financial statements. Actual results could differ from the estimates. Any revision to the ing estimate is recognized prospectively.

2.04

Reporting Period The financial statements of the company cover one financial year from January 01 to December 31 of the calendar year and are followed consistently.

2.05

Components of the Financial Statements The financial statements include the following components: • • • • • • •

Balance Sheet Life Revenue Cash Flow Statement Statement of Life Insurance Fund Statement of changes in stockholders equity Classified summary of the Assets (Form AA) and ing Policies and Explanatory Notes.

3.00 SUMMARY OF SIGNIFICANT ING POLICIES The ing policies adopted in the preparation of these financial statements are consistent with those followed in the preparation of the company's financial statements for the year ended December 31, 2012. 3.01

Revenue Recognitions All business is written in Bangladesh.

3.1.1

Individual life policies Individual life first year, renewal, and single s are recognized once the related policies are issued /renewed against receipt and realization of .

49

However, Provision for outstanding for the ing year is estimated on basis of collection in the following three (3) months taking into consideration the nature and practice in life insurance industry. Uncollected from lapsed policies is not recognized as income until such policies are revived. 3.1.2 Group Life and Health Policies The s of Group policies are recorded after receipt of the s and in certain circumstances s falling due under the policies within the financial period are also recognized if these s are subsequently received. 3.1.3 Reserve for Unexpired Risk- Group Business Gross proportionate to the unexpired duration of the period for which the respective s have been billed and received are held as reserve for unexpired risk. 3.02

Interest, Dividends and Rents Interest income is recognized on accrual basis (except project loan) unless otherwise stated. Accretion of discount and amortization of in respect of debt securities and other fixed income securities is amortized over the remaining period to maturity of such instruments on straight line basis. Realized gains and loses in respect of equity securities and units of mutual fund listed in the stock exchange are calculated as the difference between the net sales proceeds and their costs using the weighted average method. Policy loans are allowed to the policy holders to the extent of surrender values of their respective policies provided the policies are in force for not less than two years. Interest on policy loan is ed on accrual basis subject to the provisions of the Insurance Act/Rules. Profit or loss on sale of securities/equities is taken to revenue only in the year of sale. Income on debentures is recognized at prescribed rates except recovery is considered doubtful in which case the income is recognized on a receipt basis. Interest income on bank deposits (FDRs) is recognized on accrual basis. Dividend income is ed for when the dividend is received. Interest and dividend are ed at gross value (before deduction of Income Tax).

3.03

50

Provisions A provision is recognized in the Balance Sheet date if, as a result of past events, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Provision has been made against the loans and advances with small prospect of recovery. Provisions have not been made against advance for which legal cases instituted but remained pending for decision. 3.04

Contingent Liabilities Contingencies arising from claim, litigation, tax assessment, fines, penalties, etc. are recorded when it is probable that the obligation has been incurred and the amount can reasonably be measured. The Income Tax Department (DCT) has appealed to the High Court Division of Supreme Court in December, 2007 against the orders (ITA 3145 of 2004-2005) (Assessment year 2003-2004) of Appellate Tribunal dated 27/03/2005 and Commissioner of Taxes (CT) (Appeals) dated 26/12/2004 claiming that the Tribunal was not legally justified to uphold the order of the CT Appeals dated 26/12/2004 for deciding interest income (Tk. 1,70,000) on national investment bond (NIB) as exempt income in the assessment of tax of the company for the assessment year 2003-2004. The company has contended against the appeal of the DCT in that the Appellate Tribunal and CT Appeals have allowed the income on NIB as exempt one in the assessment year 2003-2004 and such income was also exempted from tax in previous years' tax assessment of the company. As the case has not yet been settled and their exists uncertainties or timing of deciding the tax liability of the company, if any, and the experts have advised that the company's grounds of reasoning against the appeal are well ed in law in view of which the company could not expect any further liability. (please refer to note 16.04). There are no any other liabilities.

3.05 Deposit deposit represents received but risk has not yet been accepted because of pending underwriting decision as on 31st December 2012. 3.06

Re-Insurance The company maintains risk Re-insurance with Munich-Re-insurance. Re-insurance ceded is recognized on due basis in accordance and and conditions of re-insurance treaties. A claim recovery from re-insurer is recognized at the same time as the claims are intimated and recorded in the books of of the company.

3.07

Claims Costs Claims costs consist of the policy benefit amount and claim settlement costs, where applicable. Death and rider claims are ed for on receipt of intimation. Annuity benefits and Maturity benefits are ed when due. Surrenders are ed for on the receipt of consent from the insured to the quote prescribed in the policy deed provided by the company.

51

_ • Maturity claims also include amounts payable on lapsed policies which are ed for on the date of maturity of policies. Re-insurance claims receivable are ed for in the period in which claims are settled. 3.08

Investments Investments are made in accordance with the provisions of the Insurance Act/Rules 1958 and the circulars/notifications issued by the Controller of Insurance! IDRA in this context from time to time. a) Classification of investment Investments with fixed or determinable payments and fixed maturity, where the company has positive intent and ability to maturity, are classified as Held-to-Maturity. Investments which are intended to be held for an indefinite period but may be sold in response to the need for liquidity or change in mark-up/ interest rates are classified as Available- For- Sale. b) Valuation of investments (i) Investment property Investment property represents land or building held for investment purpose. Investment property is valued at historical cost plus revaluation, if any. Cost of investment property includes their acquisition cost and costs of various phases of construction works including advance to contractors which have been completed at the balance sheet date. The construction works of office buildings on leasehold land at various places are in progress, which has not been fully completed at Balance Sheet date and hence classified as capital work in progress (CWIP) in the s. (ii) Debt Securities Debt securities with fixed income {(Bangladesh Govt. Treasury Bond), Private and Public Bonds and Debentures} are categorized by class and are ed for "held to maturity" and have been valued at cost. The discount in respect of the debt securities which is the difference between the purchase price and the redemption amount is amortized and recognized in the Revenue on straight line basis over the remaining period to maturity of these securities. For fair presentation, , if any, on acquisition of those bonds and debentures are however charged to Revenue in the year of acquisition. (iii) Shares listed in Stock Exchange Listed equity shares and units of mutual fund are categorized as an asset class "Available-For-Sale" and the asset is valued at the lower of their acquisition cost and the year end (last) lowest quoted closing prices on the Stock Exchanges. Adequate provision is however made for diminution if any, in the cost prices of such shares against such quoted prices in the Stock Exchanges. If the quoted prices of this class of shares are higher than the cost prices, no credit is taken to Revenue .

52

I

De-listed and OTC shares are also included in the class and valued at cost being nominal amount (0.25%) of total investment portfolios in listed shares. The equity investments and units of mutual fund that are quoted in active market are not presented at fair value. Abnormal ups and downs have been going on in the market of quoted shares and if the shares are measured at the fair value, the results of the financial performance may be seriously misleading for the objective of financial performance. Considering the circumstances and to reflect fair financial position of the company, the principle of presenting the quoted share in market value has been departed for the time being. (iv)

Loans are valued at historical cost (less repayments), subject to provision for impairment, if any.

(v)

All other investments are recognized at cost including their acquisition charges, if any, less impairment, if any.

3.09

Fixed Assets and Depreciation Fixed assets are reported at cost less accumulated depreciation and impairment, if any. Cost includes the purchase price and any cost directly attributable to bring the asset to its working condition for its intended use. Fixed assets of small value and assets for which useful lives can not be estimated properly are fully charged to the Revenue in the year of their purchases. Subsequent expenditures incurred on existing fixed assets are expensed out except where such expenditure increases the future economic benefits from the existing assets. Any addition to the original fixed asset is depreciated over the useful life of the asset. Depreciation is charged on pro-rata basis from the month of purchase and up to the previous month of sale. Methods and rates of providing depreciation are consistently applied in relation to the previous year. Capital works in progress (CWIP) is stated at cost less impairment, if any and consist of expenditure incurred and advances made in respect of fixed assets in the course of their acquisition, erection, construction and installation. The assets are transferred to relevant category of fixed asset when they are available for use. Gains! Losses on disposal of fixed asset are taken to revenue . Tangible Assets The company has adopted the straight line method of depreciation so as to depreciate 100% of the cost of the assets at rates in the following manner: 10% Furniture and Fixtures 20% Renovation 25% Computer Hardware & Software 20% Electrical Equipments 20% Vehicles In case of acquisition depreciation is calculated from purchasing month, and in case of disposal depreciation is charged up to previous month of sale.

53

Intangible Assets Intangible Assets are reported at acquisition value with deductions for impairment losses, if any. Intangible Asset comprises system software which is stated at cost of acquisition, including any cost attributable for bringing the same to its working condition less accumulated amortization. This is amortized over period of four (4) years. Any expenses on software for and maintenance payable annually are charged to Revenue . Impairment of Assets The carrying amounts of assets are reviewed at the Balance Sheet date if there is any indication of impairment based on internal/external factors. An impairment loss, if any, is recognised wherever carrying amount of an asset exceeds it's recoverable amounts. Encumbrances There were no encumbrances on assets of the company as at the Balance Sheet date (previous year Tk. nil). 3.10

Stamps, Printing, Stationary in hand Stock of stamps, printing and stationary in hand etc. are valued at cost determined on average basis.

3.11

Policy on Doubtful Debts Provision for doubtful debts has been provided as determined by the management.

3.12

Taxation Current Provision for taxation is based on taxable income determined under the Fourth Schedule of the Income Tax Ordinance, 1984. Charge for the current tax is calculated following the accepted method of income assessment and the using tax rate enacted at the Balance Sheet date and includes adjustments, where considered necessary, relating to prior years. Deferred tax Deferred tax is recognized using the Balance Sheet liability method on all temporary difference arising between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for taxation purpose. Deferred tax is the effect of timing difference. As the current tax has been measured using the rate, prescribed method of income assessment (annual average surplus) and tax laws that have been substantially enacted by the Balance Sheet date as per Income Tax Ordinance there is no possibility for arising any timing difference and thus creating of deferred tax asset/ liability at this stage does not arise. Further, sufficient tax refund due has been itted by Tax authority in the previous years which is virtually certain to reduce the future tax liabilities, if any, of the company.

54

I

3.13

Risk Minimization Strategies

3.13.01 Individual life business: Insurance underwriting risk is the risk that the Company will suffer losses due to economic situation or the rate of occurrence of an incident contrary to the forecast made at the time of setting up of the rate. The underwriting risk arises from death and sometimes due to permanent disability and critical illness. The Company may get exposed to poor risk due to unexpected experience in of claim severity or frequency. This can be a result of anti-selection, fraudulent claims or poor persistency. The Company may also face the risk of poor investment return, inflation of business expenses and liquidity issues on monies invested in the fund. The Company faces the risk of under pricing particularly due to nature of long-term contract. In addition to this, due to poor persistency, the Company would be unable to recover expenses of policy acquisition. The Company manages these risks through its underwriting, reinsurance, claims handling policy and other related control mechanisms. The Company has a well defined policy and avoids selling policies to high risk individuals. Underwriting procedures have been enhanced and rules have been structured to enable the Company to strike a balance between mitigating risk, ensuring control and providing better service. This puts a check on anti-selection. The Company seeks to reduce its risk exposure by reinsuring certain levels of risks with renowned re-insurance Munich-Re. The Company provides quality service to the policyholders and checks to minimize miss-selling and avoid poor persistency. A regular monitoring of lapsation rate is conducted. The Company has procedures in place to ensure avoidance of payment of fraudulent claim. The Claim Committee reviews high sum assured and early claims for verification and detailed investigation of all doubtful and early claims are conducted. The Company maintains adequate liquidity to cater for potentially sudden and high cash requirement. 3.13.02 Group Life: The major risk underwritten by the company is death which depends on mortality. Other risks underwritten include disability and major disease. Risk increases as a result of catastrophic events, business procurement without following underwriting guidelines, business procurement at low rate due to tough market competition and fraudulent claims. Non-receipt of in due time is an additional factor. The Company manages these risks through proper underwriting, reinsurance, effective claims handling and other claim control mechanism. The company also avoids underwriting group business with employees exposed to hazardous profession. Pricing is done in line with actuarial guideline, experience and the mortality exposure the concerned group faces. Moreover, rates of existing groups are also reviewed from time to time on the basis of claim experience. Reinsurance arrangements are made by the company with renowned re-insurer to limit the risk at affordable level. Beside, the company avoids payment of fraudulent claims through claim investigation. Strict monitoring is in place to keep the outstanding balances of at a minimum. 55

3.13.03 Group Health: The main risk underwritten by the company is morbidity that requires treatment as inpatient or outpatient. Risks are increased as a result of increasing incidences of fatal diseases, accident & catastrophic event, fraudulent practices, health over consciousness of insured etc. Consistent increase in charges of various hospital services, lack of adequate claim control mechanism and business procurement at low price in the competitive market are additional factors. The Company manages these risks through proper underwriting and other related claim control mechanism, rate review on claim experience and hospital agreements with discount facility etc. The Company has a well defined medical underwriting policy to avoid underwriting Group Health business with potentially high health risk. Any pre-existing conditions are also screened at this stage. Health plans are designed and -conditions are set in such a way that abuses of benefit utilization are minimized. Pricing is done in consultation with actuarial department on the basis of actual claim experience. Company has also pre-determined charges for certain illness and investigations with its hospitals. Those are treated as "Standard Rate" which is applied to restrict settlement of inflated bills. The company avoids settlement of any fraudulent claims through claims investigations which is managed by experienced technical staff. 3.13.04 Liquidity Risk: Liquidity risk is the risk that the Company will be unable to meet its funding requirements. To guard against the risk the Company has diversified funding sources and assets are managed with liquidity in mind, maintaining healthy balance of cash and cash equivalent and readily market securities. 3.13.05 Interest Rate Risk: The Company invests in securities and has deposits that are subject to interest rate risk. Interest rate risk to the Company is the risk of changes in market. Interest rate reducing the overall returns on its interest basis securities. The Company limits interest risk by monitoring changes in interest rates in the money market and by diversifying into various institutions (issuers' of securities). 3.13.06 Market Risk (investment pattern): Market risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether these changes are caused by factors specific to the individual security or its issuer or factors affecting all securities traded in the market. The Company is exposed to market risk with respect to its investment.

56

1

A

The Company continues to adopt a prudent policy in respect of investments. The fund of the Company has been invested as per provision of the Insurance Act. The investments are mainly in Govt. securities, Fixed Deposits Receipts (FDR's) with various commercial banks and financial institutions having acceptable performance parameters and ratings and equity shares in listed companies having good and positive fundamental and technical attributes. The Company also limits market risk maintaining a diversified profile and by continuous monitoring of developments in Govt. securities (bonds) equity and term finance certificates markets. In addition, the Company actively monitors the key factors that affect the underlying value of these securities. 3.13.07

Reinsurance Risk: The Company seeks to reduce its risk exposure by reinsuring certain levels of risk with re-insurer. Re-insurer ceded does not relieve the Company from its obligation to policyholders and as a result, the Company also remains liable for the portion of outstanding claims reinsured to the extent that re-insurer does not meet the obligations ultimately under the reinsurance agreements. In order to minimize the risk, the Company has obtained reinsurance cover from a renowned re-insurer, Munich-Re with proven sound financial health.

3.13.08 Foreign Currency Risk: As at the Balance Sheet Date there are no financial instruments denominated in foreign currency. Therefore, the Company is not exposed to risk from any foreign currency exchange rate risk fluctuation. 3.13.09

Credit Risk: Credit Risk is the risk, which arises with the possibility that one party to a financial instrument will fail to discharge its obligation and cause the other party to incur a financial loss. Major credit risk is in bank balance investments. The management monitors exposure to credit risk through regular review of credit exposure and assessing credit worthiness of counter parties.

3.14

Commission: Commission to Insurance Agents (Less that received on re-insurance) represents first year commission, renewal commission and Group commission. Allowances and Commission (Other than Commission to Insurance Agents less that on Re-insurance) represent Field Officers salary and allowances including bonuses.

* 57

:

Lash

,atciiicni.

Cash Flow Statement is prepared in accordance with BAS-7 and Cash Flow from operating activities has been presented under direct method as outlined in the Securities and Exchange Rules 1987. For the purpose of cash flow statement, cash and cash equivalents include the following: D U U

3.16

Cash at bank in current and STD s Term deposits (FDRs) with commercial banks Cash in hand and in transit

Comparative In formation: Relevant comparative information has been disclosed in respect of the year for all numerical information in the financial statements.

3.17

[)ivideiul to Sliare holders: Dividends in cash and stock (bonus shares) to share holders are recognized in the period in which they are approved.

3.18

General: The previous year's figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current financial statements and are to be read in relation to the amounts and other disclosures relating to the current year. Amounts presented have been rounded to the nearest taka. Figures in brackets ( ) indicate deduction/negative balances.

58

2012 Taka

2011 Taka

4.00 SHAREHOLDERS' CAPITAL Authorised Capital In the 8th EGM held on 20th September 2012, the Shareholders' of the Company approved the Authorized Capital Tk. 5,000,000,000.00 only, divided into 500,000,000 ordinary shares of Tk. 10 each. 50,00,00,000 Ordinary Shares of Tk. 10 each (FY-2011: 3,00,00,000 Ordinary Shares of Tk. 10 each) Issued, subscribed and paid-up capital 45,00,000 Ordinary Shares of Tk. 10 each. Category of Shareholders Sponsor General Public

Share holding (%) 36.76 63.24

Number of non-resident shareholders Number of shares held by non-resident shareholders

Category of Share Holders

Sponsor

General Public

below 500 500-5000 5001-10000 10001- Above Sub-total below 500 500-5000 5001-10000 10001-Above Sub-total Total

1,502 273 27 29 1,831 1,914

5.00 LIFE INSURANCE FUND Balance at the beginning of the year Add: Increase in Life Revenue during the year Balance at the end of the year

300,000,000

45,000,000

45,000,000

16,540,050 28,459,950J 45,000,000

16,54006 28,459,950 45,000,000 1,914

1,914

No. of Share Holders 3 39 8 33 83

Share Holding

5,000,000,000

No. of Share Percentage of Share Holding 525 0.01 2.43 109,275 59,430 1.32 1,484,775 33.00 1,654,005 36.76 181,080 371,475 183,390 2,110,050 2,845,995 4,500,000

4.02 8.26 4.08 46.89 63.24 100.00

Tk. 26,331,578,112 r23,282,041,204,130,605,300 3,049,536,908 3,151,435,904 23,282,041,204 26,331,578,112

59

6.00 ESTIMATED LIABILITIES IN RESPECT OF OUTSTANDING CLAIMS, WHETHER DUE OR INTIM ATFI) a) Ordinary Life Death Claim Maturity Claim Claim on Survival

2011 Taka

2012 Taka

Tk. 665,191,938

b) Gono Grameen Bima Death Claim Maturity Claim Claim on Surrender c) Group Insurance d) Wage Earners e) Health Insurance

-59,181,976 Lp5,265,171 430,655,296

145,614,439 174,575,101 376,232,580

12,844,674 153,865,145 1,842,899 168,552,718 40,545,753 7,492,000 17,946,171 665, 19 1,938

9,823,079 117,907,870 L249,851 128,980,800 30,800,117 7,592,000 7,575,214 551,180,711

i

7.00 AMOUNT DUE TO OTHER PERSONS OR BODIES CARRYING ON INSURANCE BUSINESS Munich Reinsurance Company

Tk. 329,371,461 8.00 SUNDRY CREDITORS Commission Payable (Note-8.01) Development Salary (Note-8.02) Agents' License Fees (Note-8.03) Insurance Policy Stamps (Note-8.04) Tax and VAT Deducted at Source Security Deposit (Note-8.05) Incentive Bonus (Note-8.06) Salaries & Allowances Payable (Staff) Unpaid Dividend Creditors for Expenses (Note-8.07) Provident Fund (Note-8.08) Group Insurance & Hospitalisation Insurance Provision for Income Tax (Note-8.09) Interest Suspense (Note-8.10) Unidentified Deposit (Note-8.11) LRK Securities Ltd. * Auditors Fees

67,197,302

31,409,897

118,208,917 24,071,253 7,771,815 750,403 160,405 63,663,156 33,967,847 12,896 880,547 5,072,640 1,456,990 9,324 38,563,596 26,056,421 8,124,045 (398,794) 1,000,000 329,371,461

318,013,172 33,084,188 6,837,150 4,970,305 47,172 54,993,588 34,029,100 9,302 880,547 10,966,479 1,465,186 18,745 38,563,596 21,793,217 7,305,782 (398,794) 532,578,735

* This represents current balance with the brokerage house at the end of routine and normal investment activities in listed shares.

2012 Taka 8.01

Commissions payable

1185208,917

2011 Taka 318,013,172

This represents the provision of commissions payable to OL and GN-GRB's agents and different level of development officers which were due in December 2012 against first year and renewal business. These were subsequently paid.

8.02

24,071,253

Development Salary

33,084,188

This represents provision of salary, performance and production bonus payable to GN-GRB development officers (other than agents). These were paid subsequently.

8.03

7,771,815

Agents' License Fees

6,837,150

This represents amounts received from various development staff for agent's licenses fees which were under process and deposited gradually to the IDRA.

8.04

750,403

Insurance Policy Stamps

4,970,305

This represents provision for expenses relating to policy stamps required to be affixed on the unissued policies.

8.05

It

Tk. 63,663,156 Security Deposit Courier Printing Materials Stationery Suppliers Car Repairs (Garage) Contractor's (Construction for office buildings) Computer Hardware & Software Suppliers Staff (Employment related) Car Loan Scheme * Others

L

54,720 2,013,793 4,000 210,100 51,169,377 393,625 4,657,541 5,048,835 111,165 63,663, 156

1,085,251 4,000 210,100 44,623 ,247 393,625 4,442,041 4,114,714 65,890 54,993,588

* This represents deposits received from the employees and adjustable under the Company's Car Scheme. 8.06

Incentive Bonus (Staff)

33,967,847

34,029,100

This represents provision of yearly incentive bonus payable to the employees' of the company on the basis of the yearly operation results. This was paid subsequently. 61

2012 Taka 8. 07

Creditors for Expenses

2011 Taka

Tk. 5,072,640

Printing and stationery Office Rent Prize and awards Telephone Bill Electricity Bill Postage and Courier Travelling and Conveyance Car Fuel & Maintenance Photostat Unit Office Expenses Bank Charges Entertainment Legal Expenses Office Maintenance Papers and Periodicals Others

61,250 375,451 56,204 432,960 50,879 260,144 500 1,277,191 425,657 1,265 1,868,298 44,002 924 217,915 5,072,640

1,120,391 281,155 5,500,000 71,631 508,476 47,648 70,122 536,620 2,500 1,415,371 452,498 1,834 67,420 1,188 889,625 10,966,479

This represents various expenses incurred by the Company in the ordinary course of business exclusively for the purpose of its operation and have been paid subsequently.

8.08

Provident Fund

1,456,990

1,465,186

This represents company's and employees' contribution to PF (Provident Fund Trust) for the month of December 2012 which was subsequently paid.

8.09

Provision for Income Tax

Balance at the beginning of the year Add: Provision for Income Tax - Current year Balance at the end of the year

Tk. 38,563,596 UN

38,563,596

38,563,596

38,563,596

38,563,596

-J

-

Provision for income tax has been made as required under the Income Tax Ordinance 1984. Assessment of income tax of the company has been finalized up to Financial Year (FY) 2003 with the exception of Financial Year (FY) 2001 for which assessment has become time barred (Note no-3.04).

62

2012 Taka 8.10

interest Suspcnsc Accowit

2011 Taka

Tk. 26,056,421

Overdue Interest on Home Loan Insurance Scheme Debenture Interest Receivable from Beximco Denims Ltd.

L

25,608,631 447 , 7 90 _ 26,056,421

21,345,427 447,790 21,793,217

Interest accrued and overdue from loanees under Home Loan insurance scheme related to the period after legal actions were instituted against those loanees has been credited to Interest Suspense .

Overdue debenture Interest receivable from the Beximco Denims Ltd. from FY 2003 but not yet received has been also credited to this .

8.11

Jnidentified Deposits Balance at the beginning of the year Adjustments/ reconciled Additions Balance at the end of the year

Tk. 8,124,045 r

7,3057821 (4,376,139) L_ 5,194,402 8,124,045

r

7,958,021 (2,539,568) 1,887,329 7,305,782

These represent deposits to company's various bank s which could not be reconciled and hence remained unidentified at year end due to lack of proper documents from banks. For fair representation, the balance in the aged more than three (3) years are credited to the Revenue but proper records are kept for audit-trail and any subsequent adjustment, if any. 9.00 PROVISION FOR DOUBTFUL DEBTS Tk. 73,363,920 Project loan Motor car, cycle and bicycle Loan Branch collection Other receivables Advance Salary Advance to agents

10.00 DEPOSITS Ordinary Life - 1st year Ordinary Life - Renewal GN-GRB Group & Health Insurance

5466,929 3,472,732 3,414,580 3,843,733 576,844 5,589,102 73,363,920

58,796,997 3,525,453 3,418,022 3,793,076 576,844 5,589,102 75,699,494

1,118,860 5,164,544 5,344,259 772,427j 12,400,090

1,001,639 2,977,282 5,925,547 1,558,431 11,462,899

Tk. 12,400,090

This represents payments made by policyholders awaiting adjustment against the policy s. 63

2011 Taka

2012 Taka 11.00 LOAN

1k. 509,955,906

On Insurer's Policies within their surrender value Opening balance Add: Loan disbursement during the Year (Note 11.01) Less: Loan recovery of loan during the year (Note 11.02) Balance as at December 31

444,369,078 180,636,668 5 ,049 , 840) 509,955,906

F402,871,846 43,021,567 01,524,335) 444,369,078

166,925,918 Ordinary Life (OL) 13,710,750 Gono-Grameen Bima (GN-GRB) 180,636,668

10,719,547 12,302,020 143,021,567

11.01 Loan disbursement during the year

11.02 Loan recovery during the year

1k. 180,636,668

Tk. (115,049,840)

Ordinary Life (OL) Gono-Grameen Bima (GN-GRB)

12.00 INVESTMENT (AT COST)

(103,653,138) (11,396,702) (115,049,840)

(89,366,832) (12,157,503) (101,524,335)

8,387,482,195 30,000,000 5,131,994,379 476,518,717 320,200,000 3,138,890 91,154,267 14,440,488,448

6,727,040,490 30,000,000 3,976,783,821 536,553,527

Tk. 14,440,488,448

Government Securities (Note-12.01) Mutual Fund (Note-12.02) Shares Listed on Stock Exchanges (Note-12.03) Debentures and Bonds (Note-12.04) DLIC Securities Ltd. (Subsidiary Company Note-12.05) Other Investment (Note-12.06) Other Loans Note-12.07)

64

3,138,890 99,885,955 11,373,402,683 I

2012 Taka

12.01 Government Securities

2011 Taka

Tk. 8,387,482,195

Statutory Deposit with Bangladesh Bank (BGTB): The amount represents investment made under statutory requirements which is made up as follows:

2,000,00o1 2,000,000

2,000,0J 2,000,000

The above amount is invested in 10-year Bangladesh Govt. Treasury Bond (BGTB) and deposited with Bangladesh Bank as Statutory Deposit as per provisions of the Insurance Act 1938.

8,385,482,13 L6,725,040,4 8,387,482,195 6,727,040,490

Bangladesh Govt. Treasury Bond (BGTB)

12.02 Mutual Fund Janata Bank Mutual Fund Prime Financial First Unit Fund (PFFUF)

Tk. 30,000,000

20,000,000 L. 10,000,000 30,000,000 [

20,000,000 10,000,000 30,000,000

65

2012 Taka

2011 Taka

5,131,994,379

3,976,783,821

Book Value at Cost (Taka) as at 31.12.2012

Market Value (Taka) as at 31.12.2012

84.44 34.45 19.31 31.03 20.14 159.99 25.11 33.79 10.01 69.43 26.15 25.78 23.03 26.37 26.47 97.23 43.13 26.42 47.93 36.10

35,915,433 10,110,741 3,280,954 3,657,521 3,937,649 14,239,186 9,258,811 5,402,715 20,851,052 19,989,229 11,703,990 2,706,993 1,752,821 22,556,368 1,109,654,722 7,271,486 9,105,829 3,436,607 55,930,879 4,184,161

14,333,149 7,366,674 3,652,506 4,101,389 4,848,574 10,413,000 11,689,692 2,958,391 15,630,000 10,421,509 19,154,070 2,299,281 1,232,917 31,648,246 1,383,549,420 5,937,850 4,222,880 3,251,300 27,539,949 4,415,828

- 71.01 128.93 10.00 105.89 19.84

- 8,623,626 12,730,794 270,099,123 2,890,728 2,053,866

223,970 12,739,476 26,136,478 888,667,822 7,118,475 3,167,100

110.20 144.82 55.77

286,514 94,570,595 28,714,989

169,000 37,092,388 14,005,579

763.43 1,000.00 965.58

27,430,916 20,000,000 11,417,984

29,122,076 11,739,269

12.03 Shares Listed on Stock Exchanges

SL

Name of the Institution

Face Value Per

No.of Unit

Average Cost Per Unit

Bank 425,316 1 ABBANK 10.00 10.00 293,493 2 ALARABANK 169,884 10.00 3 BANKASIA 117,856 10.00 4 BRACBANK 195,507 10.00 5 DHAKABANK 89,000 6 DUTCHBANGL 10.00 10.00 368,760 7 EBL 159,913 10.00 8 FIRSTSBANK 100.00 2,084,000 9 ICBIBANK 10.00 287,887 10 IFIC 447,525 11 ISLAMIBANK 10.00 104,990 10.00 12 MTBL 10.00 76,106 13 PREMIERBAN 10.00 855,358 14 PRIMEBANK 10.00 41,925,740 15 PUBALIBANK 74,784 16 RUPALIBANK 10.00 211,144 17 SOUTHEASTB 10.00 130,052 10.00 18 TRUSTBANK 10.00 1,166,947 19 1 UCBL 20 UTTARABANK 10.00 115,901 Cement 21 ARAMITCEM 10.00 3,505 10.00 121,444 22 CONFIDCEM 98,740 23 HEIDELBCEM 10.00 24 LAFSURCEML 10.00 27,011,180 25 NILOYCEM 10.00 27,300 103,500 26 PACEM 10.00 Ceramics sector 2,600 100.00 27 BENGALFINE 28 RAKCERAMIC 10.00 653,035 29 SPCERAMICS 10.001 514,911 Corporate Bond 30 ACIZCBOND 35,931 1,000.00 20,000 31 Brac Bank Cony Bonds 1,000.00 32 IBBLPBOND 1,000.00 11,825 66

S[


Engineering 33 ATLASBANG 34 BDTHAI 35 BSRMSTEEL 36 DESHBANDI-JU 37 ECABLES 38 MARKBD 39 NAVANACNG 40 NTLTUBES 41 RANFOUNDRY 42 SALAMCRST Financial Institutions 43 DBH 44 ICB 45 IDLC 46 IPDC 47 ISLAMICFIN 48 LANKABAFIN 49 MIDASFIN 50 PLFSL 51 PRIMEFIN 52 UNIONCAP Food and Allied 53 AMCL(PRAN) 54 BATBC 55 BIONICFOOD 56 FUWANGFOOD 57 MEGHNAVEG 58 MONAFOOD Fuel and Power 59 BDWELDING 60 DESCO 61 EASTRNLUB 62 JAMUNAOIL 63 KPCL 64 LINDEBD 65 MJLBD 66 MPETROLEUM 67 PAOIL 68 POWERGRID 69 SUMITPOWER 70 1 TITASGAS

Face Value Per




442,000 100,030

243.98 81.46 58.58 57.92 47.46 29.33 156.83 90.22 122.51 80.09

77,546,083 39,495,559 3,737,433 1,998,300 704,737 219,574 46,163,064 5,376,501 54,148,289 8,011,648

51,394,890 17,066,262 4,332,020 893,550 766,260 127,279 23,488,651 2,490,946 27,492,400 4,911,473

10.00 20,125,000 100.00 10,588 10.00 48,375 10.00 67,287 10.00 677,321 10.00 230,345 10.00 55,011 10.00 13,301 10.00 420,025 265,100 10.00

2.49 18.42 16.66 29.02 40.57 103.50 21.54 78.19 81.61 82.11

50,073,335 194,993 805,714 1,952,786 27,479,101 23,840,117 1,184,780 1,040,001 34,278,611 21,766,720

1,127,000,000 15,969,351 4,445,663 1,211,166 15,307,455 13,590,355 2,805,561 430,952 13,776,820 7,369,780

10.00 10.00 10.00 10.00 100.00 100.00

155,430 44,250 1,000 63,240 5,300 5,000

127.89 252.51 1.90 49.91 64.46 27.98

19,878,642 11,173,551 1,903 3,156,438 341,644 139,885

18,962,460 37,147,875 6,400 1,644,240 176,225 275,000

363,746 99,275 57,500 670,644 520,597 39,237 33,221 720,400 1,013,105 106,070 250,785 652,000

61.01 69.51 606.88 257.76 106.64 237.98 86.96 190.04 294.12 59.66 56.23 60.36

22,191,088 6,900,244 34,895,615 172,864,110 55,515,362 9,337,724 2,888,800 136,901,595 297,972,164 6,328,522 14,102,102 39,353,903

8,438,907 7,157,728 13,409,000 119,709,954 25,925,731 21,545,037 2,647,714 114,183,400 189,957,188 5,897,492 13,366,841 42,575,600

10.00 10.00 10.00 10.00 10.00 100.00 10.00 10.00 - 10.00 10.001

10.00 10.00 10.00 10.00 10.001 10.00 10.00 10.00 10.00 10.00 10.00 10.00

No.of Unit 317,841 484,837 63,800 34,500 14,850 7,487 294,344 59,592

67

S SL


Face Value Per

Insurance 10.00 71 BGIC 10.00 72 CONTININS 10.00 73 EASTERNINS 10.00 74 EASTLAND 10.00 75 FAREASTLIF 10.00 76 GREENDELT 10.00 77 MEGHNALIFE 10.00 78 NATLIFEINS 10.00 79 PEOPLESINS 10.00 80 PIONEERINS 10.00 81 PRAGATIINS 10.00 82 PRAGATILIF 10.00 83 PRIMELIFE 10.00 84 RELIANCINS 10.00 85 jUNITEDINS IT Sector 10.00 86 AGNISYSL 10.00 87 BDCOM 10.00 88 DAFODILCOM 10.00 89 INTECH 10.00 90 ISNLTD Miscellaneous 10.00 91 ARAMIT 10.00 92 BERGERPBI. 10.00 93 BEXIMCO 10,00 94 GQBALLPEN 10.00 95 MIRACLEIND 10.00 96 SINOBANGLA Mutual Funds 10.00 97 1JANATAMF 10.00 98 1STPRIMFMF 10.00 99 AIMS1STMF 10.00 100 DBH1STMF 101 EBL1STMF 10.00 10.00 102 EBLNRBMF 10.00 103 GRAMEEN1 04 GRAMEENS210.00 1 10.00 105 ICB1STNRB

68

No.of Unit


Book Value at Cost (Taka) as at 3 1.12.2012

Market Value (Taka) as at 3 1.12.2012

1,050,431 40,500 52,510 45,660 467,282 1,849,575 154,210 28,490 219,392 48,360 132,308 63,347 89,207 57,868 14,366

43.70 31.41 41.48 55.25 175.49 111.71 180.08 32.16 45.33 18.47 93.27 212.55 167.13 35.60 81.11

45,903,661 1,272,138 2,177,978 2,522,853 82,001,672 206,610,044 27,770,391 916,331 9,945,624 893,291 12,339,850 13,464,161 14,908,857 2,060,149 1,165,199

33,823,878 1,320,300 1,932,368 2,584,356 49,625,348 135,758,805 17,394,888 8,623,923 6,033,280 3,530,280 8,256,019 7,981,722 10,348,012 5,485,886 660,836

525,132 484,737 459,752 497,448 399,803

50.21 45.57 38.63 31.37 36.16

26,366,083 22,089,937 17,761,561 15,606,874 14,456,162

12,550,655 9,258,477 7,310,057 8,804,830 6,556,769

149,650 31,000 957,672 38,172 374,879 400,000

467.77 263.35 161.23 173.82 32.51 36.76

70,001,331 8,163,997 154,408,484 6,634,884 12,188,169 14,702,555

31,665,940 16,439,300 61,674,077 5,935,746 4,835,939 10,600,000

403,000 418,000 236,250 6,120,000 174,000 1,000,000 363,250 771,650 156,500

11.52 44.64 70.59 10.31 29.57 10.00 59.78 46.61 48.66

4,641,527 18,660,965 16,677,634 63,084,706 5,145,178 10,000,000 21,716,477 35,968,435 7,615,353

2,821,000 11,954,800 11,269,125 43,452,000 1,548,600 9,400,000 19,215,925 16,204,650 4,225,500

SL

Average Face No.of Cost Value Unit Per Per Unit 23.11 737,000 10.00


106 ICB2NDNRB

Book Value at Market Value (Taka) as at Cost (Taka) as 31.12.2012 at 31.12.2012 9,212,500 17,030,051

107 ICB3RDNRB

10.00

680,000

12.61

8,578,037

4,692,000

108 ICBAMCL1ST

10.00

258,000

47.44

12,238,876

10,474,800

109 ICBAMCL2ND

10.00

1,464,000

16.57

24,254,183

10,687,200

110 ICBEPMF1S1

10.00

647,000

16.68

10,793,169

5,240,700

111 ICBISLAMIC

10.00

516,500

39.49

20,399,125

11,363,000

112 LRGLOBMF1

10.00

500,000

10.00

5,000,000

5,000,000

113 PHP MF1

10.00

2,000,000

10.00

20,000,000

19,000,000

114 POPULAR1MF

10.00

500,000

10.00

5,000,000

3,600,000

115 PRIME11CBA

10.00

310,500

14.33

4,450,929

2,173,500

10,001

150,000 1

10.00 1

1,500,000 1

1,305,000

10.00]

161,500

57.54

118 ACI

10.00

371,700

278.36

103,467,630

52,484,040

119 ACIFORMULA

10.00

584,160

111.47

65,115,853

43,169,424

120 Activefine

10.00

146,280

84.53

12,364,604

10,634,556

121 BEACONPHAR

10.00

434,700

77.67

33,763,686

7,172,550

122 BXPHARMA

10.00

1,616,009

70.15

113,361,457

90,334,903

123 GLAXOSMITH

10.00

20,400

365,32

7,452,611

11,628,000

124 IBNSINA

10.00

50

125 IMAMBUTTON

10.00

30,850

23.47

723,941

283,820

126 MARICO

10.00

10,900

446.48

4,866,591

4,151,810

127 PHARMACO

100.00

200

54.43

10,885

24,250

128 RECKITTBEN

10.00

8,000

250.42

2,003,331

5,761,600

129 RENATA

10.00

12,725

159.51

2,029,763

9,410,138

10.00

980,148

74.82

73,330,951

165,252,953

131 CCL

10.00

468,585

131.53

61,634,596

14,010,692

132 SAPORTL

10.00

706,460

134.77

95,206,493

20,840,570

133 BATASHOE

10.00

35,000

338.38

11,843,463

18,749,500

134 LEGACYFOOT

10.00

144,760

41.47

6,003,744

3,054,436

100.00

10,235

37.04

379,102

163,760

10.00 1,130,400

255.48

116 TRUSTB1MF

1

Paper and printing 117 I-IAKKANIPUL

]

]_3,084,650

Pharmaceuticals and Chemicals

130 1 SQURPI-IARMA

1

Service and Real Estate

Tannery Industries

1 GI

135 PARAGON

-

11 11

-

4,205

Telecommunication 136

288,791,465 197,820,000 69

E, SL


Textile 137 APEXWEAV 138 CMCKAMAL 139 DACCADYE 140 DYNAMICTEX 141 HRTEX 142 MAKSONSPIN 143 MALEKSPIN 144 METROSPIN 145 MHOSSAIN 146 MITATEX 147 MONNOFABR 148 PRIMETEX 149 QSMSILK 150 SQUARETEXT

Face Value Per 10.00 10.00 10.00 100.00 10.00 10.00 10.00 10.00 100.00 100.00 10.00 10.00 10.00 1 10.001

No.of Unit




20.29 - 50.33 38.00 43.30 38.60 83.67 39.22 35.06 53.70 10.45 33.62 4.26 75.90

205,337 - 3,536,196 3,995,448 5,350,234 28,192,350 18,821,323 1,842,504 694,108 1,204,939 208,904 2,353,433 1,279 7,131,530

1,558,480 84,085 2,199,107 5,493,565 3,991,214 12,999,981 5,646,245 803,307 688,050 1,385,670 1,550,000 1,463,000 3,630 9,659,499

10,120 2,510 70,259 105,140 123,567 730,336 224,950 46,977 19,800 22,440 20,000 70,000 300 93,964

Total :

5,131,994,379 5,934,139,559 2012 Taka 476,518,717

2011 Taka

Si. No.

Name of the Debentures and Bonds

Face Value Per Debenture

1.00 Beximco Fisheries 2.00 Beximco Denims Ltd. 3.00 Prime Bank Bond 4.00 Banglalink Bond 5.00 Mutual Trust Bond 6.00 National Bank Bond 7.00 Trust Bank Bond Total

3,000 2,500 N/A N/A N/A N/A N/A

536,553,527

Total Book Value At Cost

No. of Unit 100 4,000 N/A N/A N/A N/A N/A

51,937 6,466,780 100,000,000 180,000,000 40,000,000 50,000,000 100,000,000 476,518,717

Si. No. 1.00: Procured in 1995. Defaulted in payment as per schedule and necessary legal action has been taken. Recheduled. 2.00: Procured in 1995. Defaulted in payment as per schedule and necessary legal action has been taken. Recheduled. 3.00: Private: 11.50% per annum. 4.00: Private: 13.50% per annum. 5.00: Private: 12.00% per annum. 6.00: Private: 11.50% per annum. 7.00: Private: 12.50% per annum. 70

I

L•..•• 2012 Taka I205 1)1Y' Secu ru s lid. (Subddiarv (OIiptIi

320,200,000

2011 Taka -

The IDRA has given permission to the Company on 20th September 2012 for setting up one subsidiary company for development and improvement of the life insurance fund as per section 42 of the Insurance Act 2010. The Company has obtained the name clearance letter from Registrar of t Stock Companies (RJSC) in the name of DUG Securities Limited being the name of the subsidiary company. The Company has recived the allotment letter on 28th September 2012 for 1 (one) share (hip) of Dhaka Stock Exchange Limited on payment of Tk. 320,200,000/- (Taka Thirty Two Crore Two Lacs Only) to DSE being the advance against the paid up Capital of the subsidiary company. The DLIC Securites Limited could not commence its operation during the year ended 31st December 2012 for non receipt of the consent letter of paid up Capital from SEC and registration from the RJSC & Firms (these were obtained later on in FY-2013).

12.06 Other Inve.stni'n

Tk. 3,138,890

Share of Central Depository Bangladesh Ltd. (Private)

10,00 Other Loans

13.00 OUTSTANDING

3,138,890 3,138,890

Tk. 91,154,267

Home Loan Insurance Scheme (HLIS) Project Loan (GN-GRB)

3,138,890 ] 3,138,890

Ordinary Life (OL) Group Insurance (GI) Health Insurance (HI) Gono-Grameen Bima (GN-GRB)

35,122,192 L,032,075 L 91 , 154,267

41,523,813 58,362,142 99,885,955

549,257,435 31,844,495 13,406,243 52,100,000 646,608,173

544,229,875 23,168,410 11,877,926 54,126,857 633,403,068

Tk. 646,608,173

The amount represents receivable as on December 3 1st, 2012 for which grace periods did not expire as on the above date. Most of the outstanding amounts have been realized subsequently.

71

2012

Taka 14.00 INTEREST, DIVIDENDS & RENTS Tk. 806,813,031 ACCRUING BUT NOT DUE Bangladesh Govt. Treasury Bond (BGTB) Fixed Deposit with Banks Home Loan Insurance Scheme Interest on Debentures & Bonds Dividend on Share Interest on Policy and Project Loan. Statutory Deposit with Bangladesh Bank (BGTB)

15.00 ADVANCES AND DEPOSITS

Adjustment during the year Balance at the end of the year

15.02 Other Advances

Taka

240,618,647 429,796,996 37,048,696 23,569,093 22,354,436 53,353,153 72,010 806,813,031

181,632,227 542,325,165 32,953,743 31,750,369 6,508,120 41,569,170 72,010 836,810,804

11,535,628 767,601,405 4,554,437 288,490 1,440,117 785,420,077

11,589,204 616,330,215 4,638,713 278,671 2,171,430 635,008,233

616,330,215 151,271,190 767,601,405

527,136,090 89,194,125 616,330,215

767,601,405

616,330,215

1,440,117

2,171,430

I

Tk. 767,601,405

Balance at the beginning of the year Add: Addition during the year

I

2011

Tk. 785,420,077

Advance Office Rent Advance Income Tax (AlT) (Note-15.01) Security Deposit Motor Cycle, Bicycles Loan Other Advances Note-15.02) 15.'.'A Advance Income Ta\ (AlT)

Others Advances include advances against staff salary and various expenses which have been adjusted subsequently.

16.00 SUNDRY DEBTORS

Motor Car & Cycle Loan (Note-16.0l) Bicycle Loan (Note-16.02) Project Loan Branch Collection (Note-16,03) Income Tax Refund due (Note-16.04) Other Receivables Note-16.05)

I Tk. 55,089,341 2,330,689 1,008,681 434,854 3,414,580 42,382,121 5,518,416 55,089,341

2,380,069 1,012,022 434,854 3,418,022 42,382,121 5,467,760 55,094,848

Adequate provision has been made against project loan (GN-GRB), branch collection , motor car & motor cycle loan, bicycle loan and other receivables (Note 9). 72

2012 Taka 16.01 Motor Car & Cycle Loan

2,330,689

2011 Taka 2,380,069

This represents the long outstanding of motor cycle and car loan lying with the development personnel.

16.02 Bicycle Loan

1,008,681

1,012,022

This represents the long outstanding of bi cycle and car loan of the insurance agents of GN-GRB.

16.03 Branch Collection

3,414,580

3,418,022

This represents the money receivable from various insurance agents at unit level offices of GN-GRB.

16.04 Income Tax Refund Due

42,382,121

42,382,121

This represents net income tax refundable to the company for the assessment years from 1996-1997 to 2001-2002 & 2003-2004 to 2004-2005 as per tax assessment orders by the Income Tax Department. The assessment of the income tax of the company for the assessment year 2004-05 has been completed and the necessary adjustments have been effected in the s. The company filed tax return for the year 2002-2003 FY 2001 with loss and the tax return has been barred by limitation of time. Regarding tax assessment for year 2003-2004, The Income Tax Department has assessed the tax liability of the company giving tax refund which have been duly ed for in the s. Later on The Income Tax Department PCT) has appealed to the High Court Division of the Supreme Court against the order of the Appellate Tribunal for allowing the interest income on national investment bond (NIB) as exempt income in the tax assessment of the company for 2003-2004. The case is still pending in court (Please refer to note 3.04).

mlrD

16.05

Other Receivables Sundry Advance Others *

Tk. 5,518,416 1,674,683 3,843,733 5,518,416

1,674,683 3,793,077 5,467,760

* This represent money lying with development staff against advance allowances, abuse of company's money for purchase of furniture and electrical equipments etc. of unit level offices of GN-GRB and have been brought forward from the of FY 1999. The amounts have been fully provided in the s (Please refer to note 9). 73

2012 Taka 17.00 BANK BALANCES

Tk. 8,984,030,958

On Fixed Deposit with Banks Note-17.01) On Current with Banks (Note-17.02) On STD with Banks (Note-17.03)

17.01 On Fixed Deposit with Banks Bank Asia Ltd. DBH Finance Corp. Ltd EXIM Bank Ltd. First Security Bank Ltd. Mercantile Bank Ltd. Mutual Trust Bank Ltd. National Bank of Pakistan Premier Bank Ltd. Southeast Bank Ltd. Standard Bank Ltd. Prime Bank Ltd. Dhaka Bank Ltd. Jamuna Bank Ltd. NCC Bank Ltd. One Bank Ltd. Shahjalal Islami Bank Ltd. State Bank of India Eastern Bank Ltd. IDLC of Bangladesh Ltd. IPDC of Bangladesh Ltd. Pheonix Leasing Co. Ltd. Prime Finance Ltd. United Leasing Company Ltd. Midas Financing Ltd. AB Bank Ltd. IFIC Bank Ltd. National Bank Ltd. Social Islami Bank Ltd. Standard Chartered Bank United Commercial Bank Ltd. Bay Leasing & Financial Ltd. Lanka Bangla Finance Ltd.

74

2011 Taka

7,652,567,48 384,335,639 I 947'Z'] 8,984,030,958

8,025,465,759 43 1,078,770 731,324,450 9,187,868,979

L

Tk. 7,652,567,484 28,837,077 1,486,117,325 894,460,270 486,091,036 219,782,448 196,203,022 454,867,923 143,965,527 861,123,719 579,792,635 47,382,967 222,640,960 892,003,277

134,695,741 266,803,364 171,210,013 30,686,638 54,365,954 46,614,648 251,198,940 11,214,000

172,510,000 7,652,567,484

94,329,866 1,055,297,787 827,009,850 510,044,696 21,070,002 383,350,000 735,845,455 40,000,000 693,865,109 114,172,405 10,000,000 45,594,043 637,712,777 170,151,803 179,965,816 173,516,264 239,872,972 20,546,509 202,070,501 426,310,234 285,272,168 519,514,926 330,380,200 63,507,276 110,520,226 35,000,000 10,000,000 10,000,000 20,000,000 20,544,874 20,000,000 20,000,000 8,025,465,759

2012 Taka 17.02 ( ) ii ( trrcit AL:ttJ1t oh Banks Tk. 384,335,639 Hongkong & Shanghai Banking Corporation Bangladesh Krishi Bank Pubali Bank Ltd. Rajshahi Krishi Unnyan Bank Uttara Bank Ltd. National Bank Ltd. Citibank N.A. Sonali Bank Ltd. Janata Bank Ltd. Agrani Bank Ltd. Rupali Bank Ltd. Islami Bank Bangladesh Ltd. Bank Asia Ltd. Trust Bank Ltd. Al-Arafah Bank Ltd. Social Islami Bank Ltd. Southeast Bank Ltd. Jamuna Bank Ltd. Standard Chartered Bank Brac Bank Ltd. 17.03 On Sf1) 6th Banks 1k. 947,127,835 Hongkong & Shanghai Banking Corporation Dutch Bangla Bank Limited Bangladesh Krishi Bank Pubali Bank Limited Rajshahi Krishi Unnyan Bank Uttara Bank Ltd. The City Bank Ltd. National Bank Ltd. Premier Bank Ltd. Agrani Bank Ltd. Sonali Bank Ltd. Janata Bank Ltd. Rupali Bank Ltd. Citibank N.A. Islami Bank Bangladesh Ltd. Dhaka Bank Ltd. Mercantile Bank Ltd. Southeast Bank Ltd. Bank Asia Limited Jamuna Bank Ltd. Al-Arafah Bank Ltd.

18.00 COLLECTION IN HAND

5,430,792 291,653,305 4,285,713 65,857,920 1,283,845 42,959 764,778 753 81,424 8,187,955 72,084 825,548 666,644 42,284 263,469 1,000 500 1,000 4,813,046 60.620 384,335,639

318,067 564,653 27,530,336 482,596,555 128,866,065 236,986,827 65,245 1,384,096 655 17,742,628 2,949,422 8,979,572 12,323,876 1,924,259 8,279,719 30,388 6,824,099 460,594 6,355,155 321,928 2,623,696 947,127,835

2011 Taka 1,351,195 286,306,608 59,582,639 61,093,417 (1,160,945) 42,959 1,282,642 753 5,305 22,558,297 6,900 1,500 2,000 1,000 2,000 1,000 500 1,000 431,078,770

480,695 337,804 25,028,131 468,170,423 137,966,027 37,071,285 65,245 35 655 13,947,366 4,672,960 9,512,063 13,603,281 5,864,259 5,853,915 29,180 4,094,169 2,318,683 1,827,274 481,000 731,324,450 284,257,854

Collection in hand represents first year outstanding as at 31st December for which proposals await for underwriting at different Service Centers. The s were received subsequently in full and the policies were issued with commencement date prior to 31st December. 75

Tk. 1,456,667,484 19.00 FIXED ASSETS (Annexure-A) Cost Land Capital Work In Progress (Building) (Note-19.01) Furniture & Fixture Renovation Computer Hardware & Software Electrical Equipment Vehicles Total Cost Accumulated depreciation at the end of the year Carrying Value at the end of the year

2012 Taka 128,191,043 1,269,122,484 76,532,182 3,178,710 47,802,987 46,381,681 150,333,305 1,721,542,392 (264,874,908) 1,456,667,484

2011 Taka 128,191,043 872,518,442 75,963,785 3,178,710 45,205,876 46,345,316 142,328,180 1,313,731,352 (244,429,624) 1.069.301.728

1k. 1,269,122,484 ork in Prutrcss (\\i Corporate Khulna Doctor's Bogra Office Office Total Office Particulars Building Tower Building Building (Guishan) Amount in Taka - 831,337,408 189,438,436 A. Contractor's Bills- Balance b/fwd 403,481,330 238,417,642 436,185,076 227,508,460 132,968,407 Add: Bills paid and adjusted 16,769,989 58,938,220 227,508,460 1,267,522,484 322,406,843 Sub Total (A) balance - c/fwd 420,251,319 297,355,862 - 41,181,034 24,544,000 9,060,818 B.Advance- Opening balance (b/fwd) 7,576,216 - (43,381,034) (24,544,000) Less: Adjusted during the year (9,776,216) (9,060,818) - 3,800,000 Add: Paid during the year 3,800,000 - - - 1,600,000 - - Sub Total (B) balance - c/fwd 1,600,000 227,508,460 1,269,122,484 322,406,843 1421,851,319 297,355,862 Total (A+ B) This represents expense incurred for office buildings under construction at various places. The break up of the figure is as above 20.00 ADJUSTMENTS MADE DURING THE YEAR Reserve for unexpired risk Claim provision Commission Incentive Bonus Re-Insurance Home Loan Sundry expenses provision Refund Prize & Awards

1k. 107,622,750 121,472,139 24,819,883 (1,239,097) (35,181,046) 1,818,687

2,382,587 (6,450,403) 7,

142,768,513 35,878,178 (2,310,114) 4,331,689 1,239,616 (355,000) 960,000 2,056,108 (11,372,450) (1,066,023) 172,130,517

This represents adjustments of over/under provisions of management expense, claims, and correction of prior- period material errors, if any, against the opening balance of the Life Insurance Fund. To give fair view and more appropriate presentation of financial position, the company has adopted the ing practice which is above consistently.

-

2011 Taka

2012 Taka

21.00 LESS REINSURANCE

5,029,426,902 4,975,346,673

GrossRI Net 366,575,593 4,622,920 371,198,513 - 439,481,594 439,481,594 806,057,187 4,622,920 810,680,107 2,096,181,085 4,644,765 2,100,825,850 - 1,761,099,104 1,761,099,104 4,644,765 3,857,280,189 3,861,924,954 209,355,689 44,255,856 253,611,545 156,733,837 3,841,513 160,575,350 366,089,526 48,097,369 414,186,895 57,365,054 5,029,426,902 5,086,791,956

Type of

p

-I

First Year -01, First Year - GN-GRB Sub-total Renewal -OL Renewal - GN-GRB Sub-total Group Insurance Health Insurance Sub-total Total Tk. in 2012 Total Tk. in 2011

I

5,011,684,328 1

36,337,655

1

4,975,346,673

OL, GN-GRB and RI represent Ordinary Life, Gono -Grameen Bima and Reinsurance respectively.

22.00 INTEREST, DIVIDENDS AND RENTS Tk. 2,327,639,110 Interest on Fixed Deposit Receipts (FDRs) Interest on Debentures and Bonds Interest on Policy and Project Loan Interest and Commission on Bangladesh Govt. Treasury Bond (BGTB) Interest on Short Term Deposit (STD A/Cs) Dividends on Shares Interest on Home Loan Profit/ (Loss) on Sale of Shares Interest on Motor & Bi cycle Loans Statutory Deposit with Bangladesh Bank (BGTB)

1,118,258,534 65,559,096 48,383,297

894,417,157 74,322,329 33, 122,044

867,672,413 16,737,504 102,599,315 1,137,658 107,096,873 18,020 176,400 2,327,639,110

686,324,309 11,351,827 94,307,272 2,943,212 316,115,666

2,112,903,816

77

23.00 OTHER INCOME

2012 Taka

Tk. 27,682,381

Service Charge & others Misc. Income Profit/(Loss) on disposal of Fixed Assets

24,084,921 1,540,873 2,056,587 27.682.381

24.00 CLAIMS UNDER POLICIES [INCLUDING PROVISION FOR CLAIMS DUE OR INTIMATED], LESS REINSURANCE

Ordinary GN-GRB Life By Death 51,255,680 28,180,873 6 17,181,257 956,972,414 By Maturit y By Survival 346,548,565 161,108,954 By Hospitalisation 3,570,431 - By Others 1,369,680 - By Surrenders 72,258,314 7,002,379 Annuities 527,500 - Bonus in Cash 376,596,797 - Sub-total 1,469,308,224 1,153,264,620 Profit Commission - - Total Tk. in 2012 1,469,308,224 1,153,264,620 Particulars

(Total Tk. in 2011

25.00 COMMISSIONS

2011 Taka

1,035,447,140 11,057,473,531

2,842,866,842

Group Insurance 119,276,322 10,761,834 - - 2,185,625 3,346,493 90,240

Health Insurance

2,296,733,387 V

Total

135,660,514 18,902,430 154,562,944

- 198,712,875 - 1,584,915,505 507,657,519 - 65,731,054 69,301,485 3,555,305 - - 82,607,186 - 617,740 - 376,596,797 65,731,054 2,823,964,412 18,902,430 - 65,731,054 1 2,842,866,842

132,906,250

70,906,466 1 2,296,733,387

Tk. 630,474,261

Ordinary Life 266,284,726 Gono-Grarneen Bima 360,298,152 Group Insurance 3,226,064 Health Insurance 665,319 630,474,261

78

25,382,196 2,299,965 1,052,056 28,734,217

574,858,375 403,018,903 2,533,059 731,361 981,141,698

2012 Taka 26.00 LEGAL AND PROFESSIONAL FEES

Ea

2011 Taka

Tk. 6,507,451

Legal advisers' fees for providing legal opinion and vet legal document etc. Lawyers' fees and expenses in respect of legal cases for condonation of delay in holding pending AGMs of the company. Legal Retainers' (in-house) fees and expenses for perusal of different types office matters/files for vetting and provide legal opinion and represents company in judicial matters. Other legal & professional fees and expenses (Mgt. & Special Audit 2005-2012)

429,375.00

1,030,500.00

1,176,607

10,881,399

1,401,469

863,115

3,500,000 6,507,451

9 12,784,639

27.00 MENT AND PUBLICITY Tk. 9,406,597 Corporate Social Responsibility (CSR) Contribution towards Women Handball Tournament, Bishay Shahittoy Kendro, etc.

958,867

Publicity in various medias- Newspapers, Television, Delta Barta, Calendar, Gift, Magazine etc. ment - Sign Board, Bill Board, etc.

1,136,906

7,846,090 601,640 9,406,597

7,109,909 79,648 8,326,463

28.00 FEES, SUBSCRIPTIONS AND DONATION Tk. 4,598,268 Annual Subscription (BIA, DSE, CSE, Trade License, RJSC & Firms) 4,391,268 Various Committee Meeting Fees 207,000 Charity & Donations 4,598,268

2,808,722 830,000 550,000 4,188,722

29.00 PROVISION FOR INCOME TAX

Tk.

-

-

Pursuant to the judgment of the Appellate Division of the Hon'ble Supreme Court of Bangladesh that the AGM for the year 2004 shall be held first and all subsequent AGMs up to the year 2012 shall be held on the same day. Accordingly, provision for tax is to be made on surplus disclosed in the Actuarial Valuation Report up to the year 2012.

79

2011 Taka

2012 Taka 30.00 CAPITAL EXPENDITURE COMMITMENT Tk. NIL

There was no capital expenditure commitment authorized by the Board as on December 31, 2012.

31.00 CREDIT FACILITY AVAILABLE TO THE COMPANY

Tk. NIL

There was no credit facility available to the Company under any contract as on December 31st, 2012 other than trade credit available in the ordinary course of business. 32.00 EXPENSES INCURRED IN FOREIGN CURRENCY

Tk. 57,365,054

During the year under review, following payments were made in foreign currencies: 57,365,054 For Reinsurance operation 57,365,054

1

3,637,074 3,637,074

33.00 COMPANIES ACT 1994, SCHEDULE XI PART- 11 [NOTE 3(P) (VI) 5] 2,410 i) Number of employees drawing salary above Tk. 3000 per month 465 ii) Number of employees drawing salary below Tk. 3000 per month 1

2,403 525

34.00 PAYMENTS / PERQUISITES TO DIRECTORS / OFFICERS 34.01 The aggregate amounts paid/provided during the year in respect of directors and officers of the company as defined in the Securities and Exchange Rules, 1987 are disclosed below: Particulars Board Meeting Fee Basic Salary Provident Fund Contribution House Rent Other Allowances Total

2012 Di rectors 1,048,000 1,048,0001

Officers - 193,408,255 17,195,885 68,420,572 134,365,527 413,390,239

2011 Officers Directors 761,150 - 100,792,560 - 17,286,589 - 68,110,323 - 232,454,022 418,643,494 761,150

34.02 Money was not spent by the company for compensating any member of the board for special services rendered except as stated above. 35.00 EMPLOYEES' BENEFIT PLANS

The Company, for its permanent employees, operates the following benefit schemes: i) Contributory Provident Fund. ii) Gratuity Scheme ill) Group Insurance iv) Health Insurance The Provident Fund is istered by a Board of Trustees and is funded by equal contributions from the employees and the Company at predetermined rates. The amount is invested separately from the company's fund. 80

The company has a gratuity scheme under which an employee is entitled to the benefits depending on the length of service. Gratuity is ed for in the year of payment.

36.00 EVENTS AFTER THE REPORTING PERIOD i) Surplus for the years 2005-2006, 2007-2008, 2009-2010 and 2011 have been carried forward. Out of the surplus emerged in 2012 together with accumulated surplus for the years 2005 to 2011, 21 (twenty one) bonus shares (stock dividend) for each share of Tk. 10 each has been proposed by the Board of Directors in its meeting held on October 5, 2013 for approval of the at the 27th Annual General Meeting to be held on November 16, 2013. As such the amount of dividend through declaration of bonus shares (stock dividend) would be Tk. 94.50 crore. These financial statements do not reflect these appropriations as explained above (please refer to note no. 3.17). ii) The company submitted return of income for the Assessment Year 2002-2003 (FY 2001). No Assessment Order has been ed by the Income Tax Department in time allowed by the Income Tax Ordinance 1984 and hence the Assessment has been barred by limitation of time. As a result the return submitted by the company has been deemed to have been accepted (please refer to note no 16.04)

37.00 DATE OF AUTHORISATION FOR ISSUE These financial statements were authorised for issue on October 05, 2013 by the Board of Directors of the Company.

81

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Delta Life Insurance Company Limited Directors' Responsibility Statement In of Section 62 of the Insurance Act 2010, the Board of Directors of the Company certify that: 1. 2. 3. 4.

The value of investment in shares and debentures has been taken at cost; The value of all assets as shown in the Balance Sheet and as classified on Form "AA" annexed have been duly reviewed as at 31 December, 2012; In our belief, the said assets have been set forth in the Balance Sheet at amounts not exceeding their realizable, carrying or market values under the several headings as enumerated and All expenses of management in respect of Life Insurance Business transacted by the Company in Bangladesh have been fully debited to the Life Revenue as expenses.



4^"

-0-1


83

Certificate of CEO & CFO under Corporate Governance guidelines issued by Bangladesh Securities and Exchange Commission (Condition no. 6 Notification 7 August 2012 no. SEC /CMRRCD/2006-158/n/44) The Board of Directors Delta Life Insurance Co. Ltd. Uttara Bank Bhaban 90, Motij heel C/A Motijheel C/A Dhaka -1000. We certify that i) We have reviewed the Financial Statements for the year 2012 and to the best of our knowledge and belief: a) These statements do not contain any materially untrue statement or omit any material fact or contain any statement that might be misleading; b) These statements together present a true and fair view of the Company's affairs and are in compliance with existing ing standards and applicable laws.

ii) There are, to the best of our knowledge and belief, no transaction entered into by the Company during the year 2012 which are fraudulent, illegal or violation of the Company's code of conduct.

Swapan Kumar Sarkar, FCA Managing Director (In Charge) & CFO

84

Important Offices of the Company Ordinary Life Servi:t, Cell & Centre (Address & Con 1ct Si No, 1

Address

No.)

Phone (T&T)

Mobile

02-9560407

01711664720

2 Dhaka. Baitul View Tower (111 Floor), 56/1 Purana Paltan, Dhaka-1000.

02-7124977

01713426867

3 Dhaka. Saleh Sadan (2nd Floor), 145, Motijheel C/A, Dhaka-1000 Chittagong. Ajmol Arcade (3: Floor), 1806, Shiekh Mojub Road, Agrabad C/A, Chittagong.

02-9568932

01911975855

031-713059 05 1-62625 051-61507

01716159569

081-68796

01716878859

0331-61348

01819460237

041-725636

01711957050

Munshiganj 607, Razia Hamid Plaza (1' Floor), Bagmamudali Para, Hospital Road, Munshiganj. 02-7620559

01713426850

Dhaka.

- ' Bogra

Gause-A-Pak Biponi Bitan Bhahan,28/G/1, Toyanabee Circular Road, Motijhcel C/A, Dhaka.

Surnon Complex (2n1 Floor),Moftz Paglar Mor, Sherpur Road, Bogra

6 Comilla Goni Bhuiya Mansion (2 Floor), Monoharpur, Comilla 7 Feni

Feni Super Market (3' Floor), Trank Road, Feni

8 Khulna Jalil Tower (3r5 Floor), 77, Lower Jessore Road, Khulna. 9

01712177976

10 Lakshamipur Poura Super Market (3rd Floor), Lakshamipur.

0381-55605

01776116886

ii Rajshahi CNB Mor, Kazihatta, Rajshahi.

0721-770693

01712084429

0431-64306

01712658808

13 Tangail Habib Super Market (2 Floor), Main Road, Tangail.

0921-63299

01711310930

14 Symet

0 82 1-7113 17 C821-714800

01712847773

15 Natore Sadek Complex (2nd Floor), Nicha Bazar, Natore

0771-61123

01913120675

16 Noakhali Rupsha Shopping Complex (2 Floor), Karimpur Road, Chowmuhony, Noakhali.

0321-54094

01713336245

17 Manikganj Rojoni Super Market (1" Floor), 76/77, Syed Rafiq Sarak, Manikganj.

02-7711210

01716469777

18 Thakurgaon Bangobandhu Sarak, Thakurgaon Sadar, Thakurgaon.

0561-61854

01713336267

19 Jessore

0421-65113

01727225604

20 Faridpur Shainsuddin Tower (5h Floor), Janata Bank Mor, 86/89, Mujib sarak, Faridpur. 0631-65799

01727248343

21 Chandpur 1300/1165, Comilla Road, Biponibag, Chandpur.

0841-63347

01816305600

22 Cox'sBazar Greenvall y Complex (3 Floor), 1, Main Sarak, Cox'sBazar.

0341-64141

01718227707

23 Kishorganj Mirja Loz (2nd Floor), 43, Isha Kha Road, Kishorganj.

094161406

01716977668

24 ShariatpurS.R. Plazza (1' Floor), Main Road, Shariatpur.

0601-51321

01614070731

12 Barisal

Ahsan Plaza (1st Floor), Bottola, Nobograin Road,Barisal.

Mannan Super Market (2 Floor), Amborkhana, Syihet.

43, M. K. Road, Jessore.

85

Important Offices of the Company Gono-Grameen Bima Division ii

1

Center (

è

0111 act

Dhaka Metropolitan

53, Purana Paltan Baitul Abed Bhaban (10th Floor) Dhaka-1000 02-9570324, 9570321.

Dhaka -1

132/B, A, Kazi Mokrna para Bazar Road, Savar, Dhaka. 02-7744916, 7744917

Dhaka-2

Fuizan Tower (2nd Floor), 80/c, Uttar Jatrabari, Bihir Bagicha, Gate No.1, Dhaka. 02-7540339, 7540329

Faridpur

1/1, Jhiltuli, Chourangi Faridpur.

5 Mymensingh Chittagong 6 7 Comilla

10 Swadeshi Bazar, Mymensingh

7

3

4

86

I

0631-65909, 0631-62069 091-66829, 091-51936

Municipal Housing Estate, 119/120 Mirzarpool, Muradpur, Chittagong 114/127 Nazrul Avenue, Kandirpar, Comilla

031-656333, 031-654939 081-64226, 081-67200

8 Chandpur 9 Barisal

Khan Villa, Biponibagh Chandpur.

0841-66451, 0841-65803

Shahida Villa (2r floor) Bogra Road, Barisal

0431-62943, 0431-64291

10 Jhalakathi

60, Post Office Road Jhalakathi.

0498-63149, 0498-63148

11 Khulna

Eden Plaza (3rd Floor), 18/A, KDA New Market Khulna.

041-730056, 041-731409

12 J essore

33/1 Rail Road, Jessore

0421-68565, 0421-68516

13 Kushtia

Shatabdee Bhaban, 92, N. S. Road, Kushtia

14 Moulvibazar

Noor Mahal, 120 Shantibag, Moulvibazar

15 Sylhet

House # 50, Road # 2, Block # E Shahjalal Upashahar Sylhet. 0821-2832772, 2832749.

16 Pabna

Square Road, Thanapara Shalgaria, Pabna.

17 Bogra

Judge Court Road, Jalcshwaritala, Bogra.

18 Naogaon

Par Naogaon (Adjacent to Hotel Abakash) Naogaon.

19 Rajshahi

Shaheb Bazar, Ghoramara, Boalia, Rajshahi

0721-773854, 0721-770063

20 Gaibandha

Eti Plaza (3rd Floor), D.B Road Gaibandha.

0541-51276, 0541-61268

21 Rangpur

House No- 271, Road No- 05 Mulatol, Rangpur.

0521-65942, 0521-61830

22 Thakurgoan

Islam Plaza, Bangabandhu Sarak Thakurgaon.

0561-52210, 0561-61811

071-62261, 071-73045 0861-53804, 0861-62096

0731-64379, 073 1-51859 051-78319, 051-63814, 051-61038 0741-61757, 0741-61163

Delta Life Insurance Company Limited Uttara Bank Bhaban 90, Motijheel C/A, Dhaka-1000, Bangladesh.

Proxy Form We...........................................................................................................................................of .................................................... .................................................................................................being the shareholder(s), Delta Life Insurance Company Limited hereby appoint Mr./Ms...................................................................................................................................failing which Mr/Ms. ............................................................................................................... as my/our proxy to attend and vote for me/us and on my/our behalf at the 275 Annual General Meeting of the Company to be held on Saturday, November 16. 2013 at 3:00 P.M. at Delta Life Tower, Plot No. 37, Road No. 45 (South) & 90 (North), Gulshan Circle-2, Dhaka and at any adjournment thereof. Signed this: .................................................... Day of ................................2013. Signature of Proxy:

1) .................................................................... Folio/BO ID No.............................................

Revenue stamp Tk. 20.00

Signature of Shareholder(s) Folio / BO ID No................................ No. of Shares ....................................

2) .................................................................... Folio/BO ID No ............................................. Note: A member entitled to attend and vote at the 27' Annual General Meeting may appoint a proxy who must be a shareholder of the Company to attend and vote in his/her stead. The proxy form, duly stamped, must he submitted at the ed Office of the Company not later than 48 hours before the time fixed for the AGM.

Signature Verified Delta Life Insurance Company Ltd.

• Delta Life Insurance Company Ltd. Shareholders' Attendance Slip I/We hereby record my attendance at the 27th Annual General Meeting being held on Saturday, November 16, 2013 at 3:00 P.M. at Delta Life Tower, Plot No. 37, Road No. 45 (South) & 90 (North), Gulshan Circle-2, Dhaka. Nameof the Shareholder(s)/Proxy ....................................................................................................................................... Folio/BO ID No . ................................................................................... Holding of.................................Ordinary Shares of Delta Life Insurance Company Limited Signature of Proxy: Signature of Shareholder(s)

1) ............................................ 2) ............................................

Notes: I. Please note that the AGM can only be attcndccl by the honorable shareholder or properly constituted proxy. Therefore any friend or children accompanying honorable shareholder or proxy cannot be allowed into the meeting. 2. Please present this slip at the Reception Desk.

US

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I S S

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Delta Life Insurance Company Ltd. ed Office Utara Bank Bhahan, 9() Mot i heel Commercial Area, Dhaka -1000, Bangladesh Phone : 956 5033 (PABX), FAX : 88-02-9562219 Web-ire : www.dcltalife.com

L

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