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24 YEARS OF COMPETENCE AND DILIGENCE ON THE WAY TO SILVER JUBILEE

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table of
Letter of Transmittal Awards & Recognitions Shareholders View Notice of the Twenty Fourth Annual General Meeting Vision and Mission Overall Strategic Objectives Core Values Prole of the Company Products of Reliance Company Information Directors Proles Organizational Chart Management & Core Executives Chairman s Review Managing Director and CEO s Round up Directors Report to the Shareholders Report on Corporate Governance Report on Corporate Social Responsibilities Redress of Investors Complaints Redress of Clients Complaints Financial History Performance Indicators Value Added Statement Economic Value Added Statement Market Value Added Statement Market Share Information

4 6 7 8 9 10 11 12 13 14 16-24 26-27 28-31 32-33 34 36-45 46-48 49 50 50 51 52-53 54 55 55 56

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contents
Accounting Ratios Pertaining to Insurance Sector Human Resource Management for all Managers Report on Information Technology Report on Going Concern Credit Rating Information Claims Management and Details of Outstanding Claims (IBNR & IBNER) Insurance Risk & its Mitigation Solvency Margin Review of Asset Quality Report of the Audit Committee Auditors' Report to the Shareholders' Statement of Financial Position Statement of Comprehensive Income Fire Insurance Revenue Account Marine Insurance Revenue Account Miscellaneous Insurance Revenue Account Classsied Summary of Assets Statement of Cash Flows Statement of Changes in Shareholders Equity Notes to the Financial Statements Quarterly Analysis 2011 Useful Information to the Shareholders' Corporate Milestones Branch Network Proxy Form

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Letter of Transmittal
All shareholders, Securities and Exchange Commission Insurance Development & Regulatory Authority Registrar of Joint Stock Companies & Firms Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited

Dear Sir(s): ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2011 Enclosed please nd a copy of the Annual Report together with the Audited Financial Statements including Statement of Financial Position as at December 31, 2011 and Statement of Comprehensive Income, Statement of Cash Flows for the year ended December 31, 2011 along with notes thereon of Reliance Insurance Limited for kind information and record. Best regards, Yours faithfully,

M. Sabir Ahmed FCA, FCS Company Secretary

Annual Report 2011

THE RECOGNITIONS

A TRIBUTE TO OUR VALUED CUSTOMERS


Reliance is privileged and delighted to share its honor and recognition for being awarded the Best Published Accounts and Reports 2010 by ICAB, Certicate of Merit for Best Presented Accounts and Corporate Governance Disclosure Awards 2010 by SAFA, 2nd Best Corporate Award 2010 by ICMAB, and HR Award 2010 by the Institute of Personnel Management.

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Awards & recognitions

Mr. Akhter Ahmed, Managing Director & CEO, Reliance Insurance Limited is receiving the ICMAB 2nd Best Corporate Award 2010.

Mr. Shamsur Rahman, Vice Chairman, Reliance Insurance Limited is receiving the 11th ICAB National Award (First Position) for Best Published Accounts and Reports 2010 under Financial Sector - Insurance.

Mr. Akhter Ahmed, Managing Director & CEO, Reliance Insurance Limited is receiving the HR Award 2010 given by Institute of Personnel Management (IPM), Bangladesh in the Co Corporate Category.

Certicate of Merit for Best Presented Accounts and Corporate Governance Disclosure Awards 2010

1st position in 11th ICAB Awards for Best Published Accounts and Reports 2010

2nd position in ICMAB Best Corporate Awards 2010

HR Award 2010 Presented by Institute of Personnel Management

Annual Report 2011

shareholders view
23RD ANNUAL GENERAL MEETING

Annual Report 2011

NOTICE OF THE
TWENTY FOURTH ANNUAL GENERAL MEETING
Notice is hereby given to all members of Reliance Insurance Limited that the Twenty Fourth Annual General Meeting of the Company will be held at La-Vita Hall, Lake Shore Hotel, House # 46, Road # 41, Gulshan-2, Dhaka-1212, on Monday, 30 April 2012 at 11:00 a.m. to transact the following business:

1.

To receive, consider and adopt the Directors Report and Audited Financial Statements for the year ended 31 December 2011 together with the Auditors Reports thereon. To declare dividend for the year ended 31 December 2011 as recommended by the Board of Directors. To elect/re-elect Directors. To appoint Auditors and x their remuneration. To transact any other business with permission of the Chair. By order of the Board of Directors

2.

3. 4. 6.

05 April 2012

M. Sabir Ahmed FCA, FCS Company Secretary

Notes: (a) The Record Date shall be on Thursday, 29 March 2012. Shareholders whose names appear in the members register of the Company on the record date will be eligible to attend the meeting and qualify for dividend. A member entitled to attend and vote at the Annual General Meeting may appoint a proxy to attend and vote in his/her stead. Duly stamped proxy must be submitted to the Share Department of the Company at least 72 hours before the meeting starts at 11:00 a.m. Shareholders and Proxies are requested to record their entry in the Annual General Meeting well in time. No entry will be recorded after 12:00 noon. Members are advised to update change of address (if any) through their respective Depository Participant.

(b)

(c)

(d)

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vision and MISSION


OUR VISION
Is to: become the premier insurance organization and the insurer of rst choice in Bangladesh with a sound reputation for dependability, professionalism and the highest standard of customer services.

OUR MISSION
Is to: grow signicantly and achieve signicant non-life insurance market share. continue delivering attractive returns to our shareholders. become a caring organization and employer of choice. invest in top quality human resources and develop full potentials of employees by providing continued training and insurance education. bring innovation in insurance products and selling techniques.

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Overall strategic objectives


We, at Reliance realize that, for us to prosper, we need to be exible and responsive, to satisfy our clients by providing them with what they want, when they want it and most importantly before other competitors can oer it. It is important to recognize the elements that make our intangible resources, such as, our ability to relate to customers regarding their needs and wants, management style, corporate culture and commitment. These elements will dierentiate us from our competitors and contribute towards the development of a sustainable competitive edge. Our corporate strategy and guiding principles rest rmly on this belief.

PROCESS FOCUS
To have all products meet standard of excellence guidelines To continually improve internal process to realize eciencies Improve system accuracy and responsiveness Improve organizational structure Improve performance measurement and reporting capability Reduce administrative overhead Improve nancial analysis, controls, and audit capability

BUSINESS FOCUS
Increase quality Reduce delivery time Implement change faster Increase customer retention Increase customer loyalty Introduce new products to new and existing markets Improve overall productivity and maximize market share Improve marketing, advertising and public relations Achieve and maintain outstanding customer service Continuously broaden customer database by obtaining new information on customer characteristics and needs

PEOPLE/LEARNING FOCUS
To hire, develop and maintain the right people in right place Employ professionals who create success for customers Develop broad set of skills useful for customer support To continually learn and adopt current best practices Transfer knowledge from leading-edge clients To align incentives and sta rewards with performance

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Our Core values


Transparency: We encourage and inculcate total transparency and communicate openly & honestly with all our stakeholders and clients. We accept our individual and team responsibilities and we make and support business decisions through experience and good judgment. Integrity: We are committed to employ the highest ethical standards, demonstrating honesty and fairness in all our actions. Professionalism & Excellence: We believe in developing a highly motivated, valued and diverse workforce. We strive constantly to be the best in quality and in everything we do in order to meet and exceed the highest expectations of our customers. Customer Focus: We are dedicated to satisfying customer needs and honoring commitments that we have made to them. Our customers are our partners and we remain committed to build strong relationship with them and value their loyalty as our best rewards. Result Focus: We are result focused. We strive to timely, tenaciously and consistently execute well developed plans, goals and objectives and we accept responsibility for the results they deliver. Teamwork: We are committed to a teamwork environment where every individual is a valued member, treated with respect, encouraged to contribute and recognized and rewarded for his/her eorts.

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Profile of the Company


A leading rst generation private sector Non-life Insurance company in Bangladesh, Reliance Insurance Limited (RIL) was incorporated in 1988 as a public limited company under the Companies Act, 1913 and subsequently was listed with Dhaka and Chittagong Stock Exchanges in 1995. Reliance transacts all classes of non-life insurance business in Bangladesh and its turnover was in excess of BDT 1,422.06 million, being total gross premium underwritten in 2011. The Company carries its insurance activities through thirty one branches spread across the whole country. RIL received AA (Double A) Surveillance Rating (Stable outlook) from CRISL based on its sound nancial performance and claim paying ability. Reliance has an authorized capital of Tk. 2,000 million and paid up capital of Tk 410.67 million. Shares of the Company are traded in both Dhaka Stock Exchange and Chittagong Stock Exchange and are listed in the A category. The Company has a total market capitalization of approximately Tk 4,192.94 million as at 31st December 2011. Reliance is focused on providing professional services of the highest quality to its clientele which include many reputed large national and multinational conglomerates. Over the years, Reliance has established its track record as a sound and dependable insurer, consistently able to meet its commitments and by providing insurance solution to the individual needs of its clients. The Board of Directors of Reliance comprises a good number of eminent entrepreneurs and personalities of the country. The management team is headed by Mr. Akhtar Ahmed ACII, Ex-Managing Director of SBC, with over 41 years of experience in the Insurance Industry of which a greater part was spent in the Far East, holding important positions with reputed professional reinsurance companies. Other members of the team are highly qualied professionals, who have been trained at home and abroad. Reliance emphasizes on imparting technical know how of highest standard to its employees and in ensuring that they keep abreast of latest developments in the world of insurance, through training and continued education. Financial performance of the Company has been consistently positive, delivering both underwriting and investment income and by giving attractive returns to its shareholders. The Company has over the years been maintaining strong corporate culture, corporate governance, ethical standards, corporate social responsibilities, superior underwriting skills and abilities and dynamic investment management. The future plans of Reliance encompass not only development of new products and services, but also marketing activities aimed at tapping the hitherto untapped segments of the market. The Company is fully aware of its social responsibilities and would like to aim its future developments activities in the direction which bring insurance services and benets to the reach of the common people of Bangladesh.

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Products of Reliance
Property Insurances Fire Insurance (including Allied Perils) Property Damage All Risks Industrial All Risks (IAR) including Business Interruption Comprehensive Machinery Insurance Marine Insurances Marine Cargo, Marine Hull and Builders Risks Insurances Engineering Insurances Machinery Insurance (Machinery Breakdown) Deterioration of Stocks (DOS) Boiler and Pressure Vessel (BPV) Electronic Equipment Insurance (EEI) Erection All Risks (EAR) Contractor s All Risks (CAR) Work Plant (WP) Oil & Gas Well Drilling Equipment Package (OGD) Contractors Plant & Machinery (CPM) Motor Insurances Motor Insurances for Commercial use Motor Insurances for Private use Miscellaneous Insurances Burglary Cash in Safe, Cash in Transit, Cash on Counter, Cash in Premises Fidelity Guarantee All Risks Product Liability Public Liability Workmen s Compensation Employer s Liability Marine Terminal Operators Liability (MTOL) Comprehensive General Liability Hole in One (Golf) Insurance/Event Cover Hotel Owner s All Risks (HOAR) Personal Accident Personal Accident (Air Travel) Health Insurance Overseas Mediclaim Business and Holiday (B&H) Corporate Frequent Travels (CFT) Employment and Study (E&S)

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Company Information
The Company was incorporated as a public limited company in Bangladesh in the year 1988 under the Companies Act 1913 (at present 1994). The Company within the stipulations laid down by Insurance Act 2010 and directives as received from time to time from Insurance Development & Regulatory Authority provides Nonlife Insurance services. The Company is listed with Dhaka Stock Exchange and Chittagong Stock Exchange as a Publicly Traded Company. The Company carries its insurance activities through thirty one branches spread across the country. Company Secretary M. Sabir Ahmed FCA, FCS Auditors Zoha Zaman Kabir Rashid & Co. Chartered Accountants Rupayan Karim Tower Level-7, Suite # 7A, 80, Kakrail Dhaka-1000 Legal Adviser Rokanuddin Mahmud Barrister-at-Law Registered Oce Shanta Western Tower Level-5, 186 Tejgaon I/A Dhaka 1208 Contacts Telephone : +88 02 8878836-45, 01714 014 895 Fax : +88 02 8878831 E-mail : info@reliance.com.bd Company Website www.reliance.com.bd

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Annual Report 2011

The Experienced Guidance

A tribute to our Board of Directors


The Board of Directors of Reliance is composed of renowned entrepreneurs and eminent personilities of the country. They possess wide range of experience and dynamic leadership skills to guide the company in proper direction.

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Board of Directors
FOR THE YEAR 2011

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Composition of board and its committee


Chairman 1. Mr. Rajiv Prasad Shaha Vice Chairman 2. Mr. Shamsur Rahman Directors 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Mr. Md. Nazmul Asad Ms. Zakia Rouf Chowdhury Mr. Md. Khalilur Rahman Choudhury Ms. Farah Huq Mr. Habibullah Khan Ms. Shahnaz Rahman Mr. Arshad Waliur Rahman Mr. Imran Faiz Rahman Mr. Amanullah Chowdhury Ms. Romana Rouf Chowdhury Mr. Iftikhar Arshad Husain Mr. Atiqur Rahman Ms. Faiza Rahman Managing Director & CEO 16. Mr. Akhtar Ahmed

Audit Committee 1. 2. 3. 4. Mr. Atiqur Rahman Mr. Md. Nazmul Asad Mr. Habibullah Khan Mr. Amanullah Chowdhury Chairman Member Member Member

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profiles OF the CURRENT Directors


AND THEIR REPRESENTATION ON BOARD OF OTHER COMPANIES

Mr. Rajiv Prasad Shaha Mr. Rajiv Prasad Shaha obtained his Graduation from the University of Dhaka. He has been the Managing Director of Kumudini Welfare Trust of Bengal (BD) Limited and Kumudini Pharma Limited since January 2000. Mr. Shaha was the Director of Kumudini Welfare Trust of Bengal (BD) Limited and Kumudini Pharma Limited since 1987 till December 1999. He is a Member of Micro Industries Development Assistance and Service (MIDAS), Dhaka, and a Committee Member of Bangladesh Employers Federation, Dhaka. He has visited many countries like USA, UK, Canada, Australia, Austria, Belgium, China, Denmark, France, Germany, Hong Kong, India, Indonesia, Italy, Nepal, Netherlands, Singapore, Sweden, Switzerland, Thailand, Venezuela etc. Mr. Shaha is a Sponsor Director and current Chairman of Reliance Insurance Limited.

Mr. Shamsur Rahman Mr. Shamsur Rahman is a member of the Board of Directors and current Vice Chairman of Reliance Insurance Limited. He is a Director of Bangladesh Lamps Limited (licensed manufacturers of PHILIPS lighting products), Mediastar Limited (publishers of Prothom Alo), Mediaworld Limited (publishers of The Daily Star), ABC Radio (FM Radio Station).

Mr. Md. Nazmul Asad Mr. Nazmul Asad is a member of the Board of Directors of Reliance Insurance Limited. He has completed Bachelor of Business Administration (BBA) from the University of Central Arkansas, USA in 2000 with CIS major and Economics minor. He is the Managing Director of Arefa Construction & Engineering Limited. He is also the Director of Jamuna Textiles Limited and Prantik Engineering Co. Limited.

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Proles of the current Directors

Ms. Zakia Rouf Chowdhury Ms. Zakia Rouf Chowdhury obtained her Bachelor of Arts degree from University of Dhaka. She is the Director of Rangs Limited, Rangs Motors Limited, Rangs Properties Limited, Rangs Industries Limited, Rangs Pharmaceuticals Limited, Rangs Workshop Limited, Rancon Motors Limited, Ranks ITT Limited, Ranks Telecom Limited, Ranks Interior Limited, Ranks Real Estate Limited, Shield Security Services Limited, Ranks Steels Limited, Ranks Agro Biotech Limited, Sash Limited, Zest Polymer Limited, Metro Foils Limited, Sea Resources Group.

Mr. Md. Khalilur Rahman Choudhury Mr. Md. Khalilur Rahman Choudhury obtained B.Com (Hons.) M.Com degree from Dhaka University in 1958 and 1959 respectively. He received training in USA and UK in the eld of Securities Regulations and Stock Exchanges under UNDP fellowship. He is a retired Joint Secretary of the Government of the Peoples Republic of Bangladesh. He served as Joint Secretary in the Ministry of Finance and Ministry of Commerce. While in government service, he was a member of the Board of Directors of several State owned organizations including Rupali Bank and Jibon Bima Corporation. He was also a Director of the Board of Karmasangsthan Bank. Mr. Khalilur Rahman has wide experiences in the eld of export and import as he was posted to Trading Corporation of Bangladesh and Bangladesh Jute Mills Corporation on deputation. He is associated with various social activities of his locality. Mr. Choudhury is representing EC Securities Limited in the Board of Union Capital Limited.

Ms. Farah Huq Ms. Farah Huq is a member of Board of Directors of Reliance Insurance Limited. She obtained her Graduation in English from Queen Mary University of London in 2009. Then she completed her LL.B (Hons.) and Bar Professional Training Course Certicate from the College of Law in 2011. In the same year she was called to the Bar by the Honourable Society of Lincolns Inn. After moving back to Bangladesh in 2011, she joined as a Research Fellow (Intern) at Dr. Kamal Hossain & Associates.

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Mr. Habibullah Khan Mr. Habibullah Khan is the Managing Director of Meenhar Group of Companies. Mr. Khan has been recognized as CIP by the Government of Bangladesh for many years for his outstanding contribution towards industrialization of the country.Under his dynamic leadership, Meenhar Sea Foods Limited and Meenhar Fisheries Limited was awarded National Export Trophy Gold by the Government of Bangladesh for its contribution in export sector of the country for several times. He was the founder Vice President and Former President, Chittagong Stock Exchange Ltd., former President of Bangladesh Frozen Food Exporters Association. He is also a Member of the Governing Council of Independent University, Bangladesh, Vice President, Bhatiary Golf and Country Club, Chittagong and the founder of Habibullah Khan High School, Feni. Mr. Khan is a sponsor Director and former Chairman of Reliance Insurance Limited.

Ms. Shahnaz Rahman Ms. Shahnaz Rahman is a Director of Transcom Group of Bangladesh, Transcom Beverages Limited (sole franchisee of PEPSI), Transcom Foods Limited (sole franchisee of Pizza Hut & KFC), Transcom Electronics Limited, Transcom Cables Limited (manufacturers of domestic and industrial cables), Transcom Mobile Limited, Eskayef Bangladesh Limited, Transcom Distribution Co. Limited, Mediastar Limited (publishers of Prothom Alo), Tea Holdings Limited (Tea Plantations). Major stakeholders in Mediaworld Limited (publishers of The Daily Star) and National Housing Finance and Investments Limited. Ms. Shahnaz Rahman is a Director and former Chairman of Reliance Insurance Limited.

Mr. Arshad Waliur Rahman Mr. Arshad Waliur Rahman is a Director of Transcom Beverages Limited (sole franchisee of PEPSI), Transcom Foods Limited (sole franchisee of Pizza Hut & KFC), Transcom Electronics Limited (licensed manufacturers of PHILIPS lighting products and TVs/Radios, manufacturers of TRANSTEC lighting and household appliances, sole distributor of WHIRLPOOL),Transcom Cables Limited (manufacturers of domestic and industrial cables), Transcom Mobile Limited (distributor for SAMSUNG mobile handsets), Eskayef Bangladesh Limited (leading pharmaceutical manufacturers formerly SmithKline & French), Transcom Distribution Co. Limited (distribution of pharmaceuticals SK&F, NOVO NORDISK, SERVIER, ALLERGAN and consumer brands Frito Lay, Heinz, Wrigley, Mars, Energizer, Schick, L Orel, Garnier, Ferrero, ConAgra Foods, Hemas) Mediastar Limited (publishers of PROTHOM ALO), Tea Holdings Limited (Tea Plantations). Major stakeholders in Mediaworld Limited (publishers of THE DAILY STAR), National Housing Finance and Investments Limited.

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Proles of the current Directors

Mr. Imran Faiz Rahman Mr. Imran Faiz Rahman is a member of the Board of Directors of Reliance Insurance Limited. He has completed Bachelor of Business Administration (BBA) from a reputed University of USA. He is the Chairman of Imaan Cold Storage Limited and Managing Director of Arlinks Limited and Imaan Cold Storage Limited. He is also the Director of R. R. Cold Storage Limited, Aris Holdings Limited, R R Estates Limited.

Mr. Amanullah Chowdhury Mr. Amanullah Chowdhury is the Vice Chairman of Rangs Group. He is also the Director of Rangs Pharmaceuticals Limited. He is Joint Managing Director of Sea Resources Group of Companies. He was the President of Superpharmacal Laboratories & Vice President of Superpharm Corporation (a pharmaceutical manufacturer in New York from 1979 to 1981). Mr. Chowdhury was District Sales Manager, Calibiochem Behring Corporation, USA from 1977 to 1979. He was a Senior Technical Representative Behring Corporation-a subsidiary of American Hoechst Corporation from 1974 to 1977. Mr. Amanullah Chowdhury was Marketing Manager of Hoechst (Bangladesh) Limited, Chittagong. He obtained his Bachelor of Pharmacy (Hons.) degree.

Ms. Romana Rouf Chowdhury Ms. Romana Rouf Chowdhury is a Director of Sea Resources Group of Companies consisting of three export oriented Deep sea Fishing Companies and four other Companies. She obtained Advance Level Mathematics degree.

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Mr. Iftikhar Arshad Husain Mr. Iftikhar Arshad Husain is a Director of Kumudini Welfare Trust of Bengal (BD) Limited. Mr. Husain obtained Bachelor of Science degree in Electrical Engineering from The Polytechnic, Regent St. London University in 1962. He also obtained a Diploma in Pharmaceutical from Brunswic, New Jersey, USA. He is an Associate Member of the Institute of Electrical Engineers (AIMEE), and a Member of the Institute of Electrical & Radio Engineers (MIERE). He is also a Chartered Engineer (C. Eng). He was the permanent Chairman of Bangladesh Electronics Manufacturers Association (BEMA) and the Managing Director of Kumudini Pharma Limited.

Mr. Atiqur Rahman Mr. Atiqur Rahman is a member of the Board of Directors of Reliance Insurance Limited. He is the Group Finance Director of Transcom Group of Companies and also a Director of Transcom Electronics Limited (licensed manufacturers of PHILIPS, the sole distributor of WHIRLPOOL), Bangladesh Lamps Limited, Transcraft Limited (modern printing company), Transn Trading Limited, Trinco Limited, Transcom Cables Limited, Transcom Mobile Limited, Eskayef Bangladesh Limited (leading pharmaceutical manufacturers), Transcom Beverages Limited (PEPSI), Transcom Foods Limited ( Pizza Hut & KFC), Mediastar Limited (publishers of Prothom Alo), ABC Radio (FM Radio Station), M. Rahman Tea Co. Limited, Monipur Tea Co. Limited, Marina Tea co. Limited (Tea Plantations)

Ms. Faiza Rahman Ms. Faiza Rahman obtained her Graduation from Brandeis University, USA. She started her career at UNICEF as a Project Ocer. Later she joined Aarong as a Manager, Design & Development. Currently, she is the Executive Director of Arlinks Limited, the company which deals in electrical engineering equipment and services. Ms. Rahman is the Director of R. R. Cold Storage Limited, Imaan Cold Storage Limited and R R Estates Limited.

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Proles of the current Directors

Mr. Akhtar Ahmed Managing Director & CEO After completing B.A. (Honours) and M.A. from Dhaka University in 1970, he joined Eastern Federal Union Insurance Company, the largest insurance company in the then Pakistan, as an Executive Ocer. Following the nationalization of insurance industry in Bangladesh in 1972, his services were absorbed in Sadharan Bima Corporation. In 1981 he joined Asian Reinsurance Corporation, Bangkok, an intergovernmental organization set up by the United Nations and served in various Managerial position till 1989. In 1989 he joined Arab Insurance Group, the largest insurance organization of the Middle East and served for 14 years in various positions as Chief Manager, Regional General Manager and Chief Executive of its Far East operations, based in Hong Kong and Kuala Lumpur. Mr. Akhtar Ahmed returned back home in 2003 and served as Managing Director of Sadharan Bima Corporation till February 2004. In early 2005 he completed an assignment as Consultant to KPMG, Abu Dhabi, on a project for setting up of a large Reinsurance company in the Middle East. He joined Reliance Insurance Limited as its Managing Director & CEO in March 2005.

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THE quAlified management

A tribute to our managerial experts


The Managerial Team at Reliance has a unique blend of academic excellence, professional knowledge and expertise to form a sound management committed to deliver the best.

Organizational Chart of
RELIANCE INSURANCE LIMITED

Board of Directors MD & CEO


Company Secretary
MS (1)

Chief of Share & Board Aairs Dept

DMD (Vacant)

NMS ( 3)

Head of Operation Division

Head of U/W & Re -I ns Div ision

Head of Marketing Div ision

Chief of Claims Dept

Chief of MktgSrv Dept

Chief of Branch Coord


& Dev Dept

Chief of HealthPlan Deptt

MS (3) NMS (2)

MS (1) NMS (0)

MS (2) NMS (3)

MS (2) NMS (1)

Chief of Specialized U/W Dept

Chief of Re -Ins Dept

Chief of Policy Issuing Dept

All Branches(32)

MS(3)
NMS(1)

MS(3) NMS(2)

MS(2) NMS(6)

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Head of Finance & Accts Div ision

Head of HR & Adm in Div ision

Head of IT Division

Head of Internal Audit & Control Division

Chief of Human Resource Dept

Chief of Admin & Gen Service Dept

Chief of Hardware Dept

Chief of Software Dept

MS (1) NMS (1)

MS (1) NMS (15)

MS (2) NMS (1)

MS (2) NMS (1)

MS (3)

Chief of Finance Dept

Chief of Accounts Dept

NMS (0)

MS (4) NMS (4)

MS (7) NMS (2)

MS indicates Management Sta NMS indicates Non-Management Sta

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MANAGEMENT & core EXECUTIVEs


SENIOR MANAGEMENT PROFILES

Enamul Haque Khandker Executive Director (HR & Admin) Mr. Enamul Haque Khandker has obtained his Masters with Honours in Public Administration from University of Dhaka. In a career spanning over nearly thirty years, Mr. Khandker worked mostly for International and Joint Venture Companies both in the country and abroad in the eld of Human Resources & Administration. Prior to joining Reliance Insurance Limited in 2005, he served in CARE-International, Bangladesh, Karnaphuli Fertilizer Company Limited (KAFCO), & Saudi-Bangladesh Industrial & Agricultural Investment Company Limited (SABINCO) as General Manager & Head of Human Resources & Administration Division. Mr. Khandker was entrusted with special assignments in CARE Sri Lanka. He is a fellow of Institute of Personnel Management (IPM) and Bangladesh Society for Human Resources Management (BSHRM).

Mohammad Khaled Mamun M.Sc, M. Demo, DDP, ABIA, ACII (UK) Executive Director (Underwriting & Marketing) Joined Reliance Insurance in June, 2005 after 11 years of service in Reinsurance Department of the State Owned Sadharan Bima Corporation. Apart from his Masters degree from Dhaka University, he also obtained Diploma in Development Planning from Academy for Planning and Development, Dhaka. He is an Associate Member of Bangladesh Insurance Academy, Dhaka and also the Associate Member of the Chartered Insurance Institute, United Kingdom. He received Advanced Non-Life Insurance & Reinsurance Training from Swiss Insurance Training Centre (SITC) of Swiss Re, Zurich, Switzerland and Reinsurance Management Training from Asian Re, Bangkok, Thailand. Mr. Khaled has also attended a number of seminars on Insurance and Reinsurance at home and abroad.

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Akhtar Ahmed M.A. ACII (UK), Chartered Insurer Managing Director & CEO After completing B.A. (Honours) and M.A. from Dhaka University in 1970, he joined Eastern Federal Union Insurance Company, the largest insurance company in the then Pakistan, as an Executive Ocer. Following the nationalization of insurance industry in Bangladesh in 1972, his services were absorbed in Sadharan Bima Corporation.

In 1981 he joined Asian Reinsurance Corporation, Bangkok, an intergovernmental organization set up by the United Nations and served in various Managerial position till 1989. In 1989 he joined Arab Insurance Group, the largest insurance organization of the Middle East and served for 14 years in various positions as Chief Manager, Regional General Manager and Chief Executive of its Far East operations, based in Hong Kong and Kuala Lumpur.

Mr. Akhtar Ahmed returned back home in 2003 and served as Managing Director of Sadharan Bima Corporation till February 2004. In early 2005 he completed an assignment as Consultant to KPMG, Abu Dhabi, on a project for setting up of a large Reinsurance company in the Middle East. He joined Reliance Insurance Limited as its Managing Director & CEO in March 2005.

Md. Anisur Rahman B.Com (Hons), M.Com (Marketing), MBA (Finance) DU ABIA, DAIBB Deputy Executive Director & Head of Operations Mr. Rahman joined Reliance Insurance Limited in October 2005. He had earlier served Pragati Insurance Limited and United Insurance Company Limited in senior positions. He also worked as an Instructor of Bangladesh Insurance Academy. Starting his career as a banker with Standard Chartered Bank in March 1982, he moved to Investment Corporation of Bangladesh and thereafter Bangladesh Krishi Bank. He received intensive training programme at the University of Philippines, Quezon City, Manila, Reinsurance Management in Bangkok organized by the Asian Re and Annual Seminar of Arab Insurance Group (ARIG) in Bahrain. Mr. Rahman has also attended a number of seminars on Insurance and claims at home and abroad.

Mohammed Sabir Ahmed M.com, FCA, FCS Deputy Executive Director & CFO Mr. Ahmed joined in Reliance Insurance Limited on 8th July 2007. Before joining Reliance Insurance Limited he worked with Bashundhara Group and TeleBarta Limited in Senior Management Positions. Mr. Ahmed is a Chartered Accountant and Chartered Secretary in profession and has been working in nancial management and internal audit & control functions for more than twelve years. He has also been serving as a member of dierent committees of The Instutitute of Chartered Accountants of Bangladesh (ICAB) including TRC, BCPAR and Audit Committee He is part time faculty member of ICAB. Mr. Ahmed has attended a number of seminars at home and abroad.

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Management & Core Executives

SENIOR EXECUTIVES

Mr. Shahadat Hossain Deputy Executive Vice President Re-insurance Mr. Md. Isral Deputy Executive Vice President Branch Control & Co-ordination Mr. Md. Golam Sarower Deputy Executive Vice President Internal Audit and Control Mr. Md. Jashim Uddin Senior Vice President Accounts Mr. Nirmal Chandra Roy Senior Vice President Marketing Service Mr. Tapas Chandra Saha Senior Vice President Claims

Mr. Md. Nazrul Islam Senior Vice President Human Resources & Admin Mr. Md. Mahbubur Rahman Deputy Senior Vice President Information Technology Mr. Md. Rakib Uddin Chowdhury Deputy Senior Vice President Re-insurance Mr. Md. Masud Rana Deputy Senior Vice President Finance Mr. Md. Abdul Matin Vice President Policy Issuing Section Mr. Syed Qayem Hussain Vice President Health Plan

Mr. Abu Saleh Md. Musha Khan Vice President Health Plan Mr. Kazi Altaf Hussain Vice President Specialised Underwriting Mr. Sanjay Kumar Basak Vice President Finance & Accounts Mr. Md. Zahurul Haque Deputy Vice President Share Department

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HEAD OF BRANCHES

Mr. A.K.M. Mohiuddin SEVP & In-charge Local Oce, Dhaka Mr. Syed Mohammad Akram SEVP & Branch Manager Kawran Bazar, Dhaka Mr. Hara Krishna Roy EVP & Branch Manager Motijheel, Dhaka Mr. Swapan Kumar Saha EVP & Branch Manager Narayangonj Mr. Rezwan Karim DEVP & Branch Manager Agrabad, Chittagong Mr. Md. Nurul Amin SVP & Branch Manager New Market, Dhaka Mr. S.M. Omar DSVP & Branch Manager Khatungonj, Chittagong Mr. Md. Harun Al Rashid DSVP & Branch Manager Jessore Mr. Ashiqur Rahman VP & Branch Manager Mohakhali, Dhaka Mr. Md. Bashirullah Sheikh DVP & Branch Manager Bangshal, Dhaka Mr. Kazi Abdul Bari DVP & Branch Manager Rajshahi

Mr. Abul Kalam Md. Rashedur Sazzad DVP & Branch Manager Dinajpur Mr. Md. Shah Jahan DVP & Branch Manager Moulvi Bazar, Dhaka Mr. Swapan Kumar Nag Chowdhury AVP & Branch Manager Kushtia Mr. Md. Arshad Hossain Bhuiyan AVP & Branch Manager Narshingdi Mr. Kamal Das AVP & Branch Manager Faridpur Mr. Md. Soyef Ali AVP & Branch Manager Thakurgaon Mr. Ruhie Das Karmaker DGM (Mkt) & Branch Manager Bijoynagar, Dhaka Mr. Reaz Ahmed Siddiqui AGM (Mkt) & Branch Manager Jubilee Road, Chittagong Mr. Md. Alamgir Hossain Khandaker AGM (Mkt) & Branch Manager Khulna Mr. Sujan Kanti Howlader AGM (Mkt) & Branch Manager Uttara, Dhaka Mr. Md. Nurul Anwar Branch Manager Cox s Bazar

Mr. Shaqul Islam Branch Manager Mogh Bazar, Dhaka Mr. Md. Ashraful Alam Mamun Branch Manager Pabna Mr. Md. Shahidul Islam Branch Manager Rangpur Mr. Ranjib Kanti Roy Branch Manager Comilla Mr. Md. Shariful Islam Branch Manager Sirajgonj Mr. Md. Abdul Malik Branch Manager Sylhet Mr. Md. Abdul Hai Shaikh Branch Manager Bogra Mr. Tota Miah Sikder Branch Manager Madaripur Mr. Md. Halimuzzaman Branch Manager (Acting) Mymensingh

Annual Report 2011

31

Chairmans Review

32

Annual Report 2011

Dear Shareholders, I am most delighted to welcome you all to the 24th Annual General Meeting (AGM) of Reliance Insurance Limited. The Annual Accounts of the Company for the year 2011 is being presented herewith, from which you will observe that the Company has completed yet another successful year of operation, another milestone in its operations and in fullling the avowed corporate objectives as determined by the Board of Directors. It has not been an easy task, particularly in a highly competitive non-life insurance market environment in Bangladesh. The Company attained a gross premium income of Taka 1,422 million in the year 2011, a growth of 14.6% and a pre-tax operating prot of Taka 304.96 million. The prot was contributed by both underwriting and investment incomes, and in particular the underwriting prot stood at Taka 194.25 million, the highest so far.

The Company has been diversifying its business portfolios by increasing segments of medium and smaller clients and thus achieving a desirable spread of business which is fundamental to Insurance. This is an on-going process and the Company will strive to develop a well balanced business portfolio which is not overly dependent on any particular type of business or client. The Company continues to be managed professionally by qualied personnel and development of proper human resources is one of the priorities of the Company to maintain its ability to provide services of the highest quality to its clients and thus have edge over its competitors. In these days of information technology, the Company is equally attentive to this area and has been upgrading its IT facilities. We are very much condent that the Company will maintain its momentum in achieving growth in business and protability in the years to come. We are greatly appreciative

of the continued support and patronage received from our clients and shareholders and would look forward to continuation of the same. Based on the operating prots for 2010, we have proposed a dividend of 30% in the form of 15% Bonus shares and 15% cash dividend. The Paid up capital of the company will now stand well above the minimum regulatory requirement. I would like to convey my sincere thanks to my fellow directors for their support and co-operation. The management team and the sta worked very hard to take the Company forward and in delivering excellent results; I would like to recognize their dedicated and uninching services and convey our appreciation and thanks to all of them.

Rajiv Prashad Shaha Chairman

Annual Report 2011

33

Managing Director & CEOs round up


obviously attract favourable considerations and terms from Reinsurers. Unfortunately, in both the counts mentioned above, we in Bangladesh are not favourably or even adequately placed. While the non-life insurance market of Bangladesh with a gross premium income of only Taka 1,654 crore in 2010 registered a growth of 18%, the penetration rate (insurance premium as % of GDP) has been stagnating at around 0.20% for many years 2002 to 2010, whereas during the same period the life sector has improved from 0.37% to 0.84%. Such low penetration rate in nonlife insurance sector points to serious deciencies and that no growth in real terms is being achieved. Large segments of population and insurable interests have not been brought under insurance coverage. The existence of 43 non-life insurance companies in a small market have been in general prejudicial to all, what are the untapped potential of businesses in Bangladesh? Without hesitation the answer is personal properties and personal lines business which are free of encumbrances from Banks and nanciers. The salvation of the nonlife insurance industry therefore lies in personal lines business. Although, no actual statistics exist, it is believed that perhaps as much 80 to 90% of non-life premium emanate from industrial and commercial risks. Insurance of personal lines business has remained weak mainly due to negative perception of the public at large of the insurance industry as a whole. Is it an indelible problem? Certainly not, since it is an industry-wide issue and not of any particular insurer, it can be overcome through concerted and sustained eort over a period of time. Reliance rmly believes in the potential of personal line business as a stable source for generating sustained volume of sizeable premium income in the long run and thereby help to balance and stabilize its business portfolios. Development of new products, introduction of superior selling techniques, eective use of IT and above all, earning the trusts of clients are the keys to success.

According to Munich Re, world wide natural catastrophe losses for 2011 were more than three times the 10 year average. The anticipated cost of natural catastrophes (hurricanes, tsunamis, earthquakes, volcanoes, oods) to the global insurance industry is placed at between US $105 billion and US $110 billion. Led by the Japan Earthquake and Tsunami (US $40BN) and the New Zealand Earthquake (US $20BN), the series of events included the Thailand oods (US $12BN) while widespread tornadoes hail and windstorm events across the USA produced in excess of an estimated US$21BN in insured losses. The responses from the international reinsurance market are being felt through increases in (property) reinsurance costs with the January 1, 2012 treaty renewals, however, rate increases have been focused more on those areas where the losses have originated rather than universally, as seen in the past. Regional Reinsurers in the Far East have particularly been aected by ood losses in Thailand which prompted them to introduce to higher rates and terms in general. In particular, Reinsurers have imposed event limit under all property proportional treaties, thereby limiting the reinsurers liability to any one catastrophic event. The business of Insurance, particularly of General Insurance, involves dealing with many types of Risks of divergent nature. Fundamentally, an insurer, apart from obtaining proper pricing of the products it sells, should strive to balance its portfolios through geographical spread and by writing many units of exposures or policies of insurance. Balanced portfolios enable an insurer to achieve long term stability of its net retained account and

Akhtar Ahmed Managing Director & CEO

34

Annual Report 2011

The proven strength

A tribute to our shareholders


A big thanks to our esteemed shareholders for their ongoing support and condence in the Company.

Directors Report to the Shareholders


FOR THE YEAR ENDED DECEMBER 31, 2011
Dear Shareholders, Ladies and Gentlemen, I, along with the Board of Directors of Reliance Insurance Limited, have great pleasure to welcome you all to the twenty fourth annual general meeting of the company and also to place before you the Directors Report along with the audited nancial statements and the auditors report for the year ended December 31, 2011 for your review and approval. The economy and business environment: The Global Economic Crisis According to IMF, the world economy slowed down in 2011. Financial conditions have deteriorated, growth prospects have dimmed, and downside risks have escalated. In addition, sovereign debt and banking sector problems in the euro area have added to the complexities. The disruptions resulting from the Great East Japan earthquake and tsunami, as well as the spreading unrest in the Middle East and North Africa (MENA) region and the related surge in oil prices, were major surprises. Global output is projected to expand by 3.3% in 2012 as against 3.8% in 2011. This is largely because the euro area economy is expected to go into a mild recession in 2012, with GDP going down by 0.5%. The IMF still believes America s GDP will grow by 1.8% this year as the US has prioritized economic stimulus measures over scal cutbacks. As a whole the advanced economies are expected to grow at an average rate of 1.2% in 2012 as against 1.6% in 2011. Growth in emerging and developing economies is also expected to slow because of the worsening external environment and a weakening of internal demand. The average growth in 2012 is projected at 5.4% in 2012, down from 6.2% in 2011. However the developing world and the high-growth Asian economies will continue to outpace the advanced economies of Europe, Japan and the US as the power balance shifts inexorably. Developing Asia is projected to grow at the rate of 7.3%, with China and India accounting for the highest growths at 8.2% and 7% respectively. State of the Bangladesh Economy According to Bangladesh Bank Report, the real GDP growth of Bangladesh economy is estimated to be 6.7% in FY 2011, as against 6.1% in the preceding year. The growth was contributed mainly by the industry and services sectors, which grew by 8.2% and 6.6% respectively, supported by strong growths exceeding 40.0 percent both in exports and imports. Agriculture sector output growth declined from 5.2 percent in FY11 to 5.0 percent in FY12. The National savings rate fell from 30.0 percent of GDP in FY11 to 28.4 percent in FY12, about two-third of this decline was due to slowdown in the growth in foreign savings. Economic growth was also aided by inow of workers remittances from abroad, although the growth of such remittances was down to 14.8% from 15.8% in FY 2010. Exports increased impressively by 41.7%. The high growth in exports of key items like ready-made garments, raw jute, jute goods, leather and frozen foods helped to attain higher export growth during FY11. The overall balance of payments recorded a surplus of USD 1.0 billion in FY2011. Gross foreign exchange reserves held by the Bangladesh Bank rose by USD 0.16 billion to USD 10.91billion at the end of FY11. The CPI ination rate remained high at 8.8%, increasing from 7.3% in FY 2010. Ination rose mainly due to increase of domestic food grains prices by 11.3% and imported essentials from international markets. Bangladesh economy will remain stable with over 6.0 percent GDP growth in the next two years when most of the countries including neighbouring India will see a slowdown, according to the World Bank (WB) Global Economic Prospects (GEP) 2012. The country s economic growth is particularly relevant to the growth of non-life insurance sector of Bangladesh. A robust economic growth covering trade, commerce and industry positively impacts on the non-life insurance business development. Insurance IndustryGlobal Global insurance premium stood at US$ 4,338 billion in 2010, out of which US$2,520 billion is attributable to

36

Annual Report 2011

life insurance and US$1,819 billion to non-life Insurance. After stagnating for two years, Global insurance industry returned to positive overall growth of 2.7% in 2010, 3.2% for life and 2.1% for non-life. Growth in industrialized countries was -1.8% for life and 1% for non-life insurance. However, emerging markets grew at an impressive rate of 13% for life and 8.5% for non-life insurance. China, India, Brazil, Russia had the highest growths in insurance. According to Munich Re, natural catastrophe losses for 2011 were more than three times the 10 year average. The anticipated cost of natural catastrophes (hurricanes, tsunamis, earthquakes, volcanoes, oods) to the global insurance industry is placed at between US $105BN and US $110BN. Led by the Japan Earthquake and Tsunami (US $40BN) and the New Zealand Earthquake (US $20BN), the series of events included the Thailand oods (US $10BN) while widespread tornadoes hail and windstorm events across the USA produced in excess of an estimated US$21BN in insured losses. The responses from the international reinsurance market are being felt through increases in (property) reinsurance costs with the January 1, 2012 treaty renewals, however, rate increases have been focused more on those areas where the losses have originated rather than universally, as we have seen in the past. Insurance IndustryBangladesh The growth of Non-life insurance companies in 2010 was 19.0 percent. The 43 private insurer and one Government Corporation in the general insurance sector earned Tk 16,544 million in 2010. Insurance market in Bangladesh remains extremely competitive due to existence and operation of a large number of companies, un-commensurate with the size of the market. The country s economy has deteriorated and this has aected the non-life insurance industry signicantly in the 4th quarter of 2011 year and this trend will possibly continue well into the next year. The IDRA s recent circulars, particularly withdrawing all special premium rates since august 2011 have created strong reaction from the large clients. It has also created signicant aversion from such clients to buying new insurance and many of them are reviewing their positions and are inclined to go for minimum or limited insurance covers to keep their insurance costs down. As a result this may negatively impact the growth of non-life insurance in Bangladesh.

However, the future expansion of Bangladesh non-life insurance market and increase of insurance penetration in the country lies in tapping the hitherto untapped segments of the market personal lines business which has remained neglected so far. Conducting insurance business in the true spirit of professionalism, bringing in modern management and sales techniques and new product developments are keys to the future growth and progress of the Industry. Information Technology RIL has highly experienced and trained professionals working on maintaining and developing the company s IT infrastructure. The IT professionals are constantly innovating and producing in-house programs to meet the needs of the company s ever increasing and diversied products and services industry. IT division has successfully implemented a Wide Area Network (WAN) to connect all of the branch oces in greater Dhaka region and in Chittagong on real time basis, thereby providing seamless connectivity and prompt customer services. Information and Communication Technology (ICT) has become indispensable for insurance companies in ensuring smooth operations and providing ecient service. RIL has recognized this fact and the Board of Directors have adopted a comprehensive ICT policy for the company. Operating Result of the Company In the year 2011, the Gross Premium Income and the overall business volume of RIL grew in accordance with its business plan, although the growth was lesser than of the preceding year. Gross Premium income attained Taka 1,422.06 million as against Taka 1,241 million in 2010 an increase of 14.6%, Net Premium income attained Taka 731 million as against Taka 618 million in 2010 an increase of 18.3%. Underwriting prot increased to Taka 194.25 million from Taka 161 million in 2010 an increase of 20.65%. Gross claims incurred Taka 331.1 million (Loss ratio 23.3%) and Net claims incurred Taka 152.04 million (Loss ratio 20.8%). Investment income increased by 4% to Taka 159.9 million from Taka 153.7 million in 2010 Net pre tax prot increased by 6.2% to Taka 304.96 million (before adjustment) from Taka 287.24 million in 2010.

Annual Report 2011

37

Directors Report to the Shareholders

Premium Development - Gross & Net


1,422.1

Premium Growth Rate


Percentage
43.7 33.1

Taka in Million
1101.5 1,241.0

827.5

1041.1

731.4

20.6

618.1

28.1 19.2

18.3 14.6

453.2

353.7

430.3

11.3 -5.1

-5.5

2007

2008

2009

2010
Net Premium

2011

2007

2008
Gross

2009

2010
Net

2011

Gross Premium

Class-Wise Gross Premium Income - 2011


Taka in Million
Misc 136.9 10% Motor 179.5 13%
827.5

Underwriting Results - All


1241.0 1422.1 618.1 731.4 360.8 470.6 137.7 161.0

Taka in Million

1101.5

453.2 323.8

353.7 262.0

M. Hull 37.6 3%

430.3 383.0

Fire678.6 47%

1041.1

M.Cargo389.4 27%

2007
Gross Premium Net Premium

2008

2009

105.1 56.8

85.6 76.6

103.7 96.3

2010

2011
U/W Result

M. Expenses (including Comm) Net Incurred Claim

Financial Results
Taka in Million
287.2 304.9

Source of Business - 2011


Taka in Million

In-house 259.2 18%


194.3 137.9 100.7 76.6 42.4 61.1 56.8 96.3 146.3 161.0 153.7 114.9 159.9

PSB 29.5 2% Sundry 383.3 27%

Multinational 497.0 35%

2007

2008

2009

2010

2011
Pre-tax Prot

Underwriting Income

Investment Income

Local Corporate 253.0 18%

Investment Income 2011


Taka in Million
Dividend 22.64 14% Other 61.16 38%

Interest 76.12 48%

38

Annual Report 2011

152.0 194.3

Some important statistics relating to the performance of the Company in the year 2011 are shown in Annexure-i. Human Capital Management RIL continued to implement appropriate human resource management policies and practices to develop its employees, and to ensure their optimum contribution towards the achievement of corporate goals. At RIL, we believe that our Human Resources (HR) give the organization a signicant competitive edge in terms of knowledge and experience. RIL continued their policy of recruiting the best people and implementing programs to develop and retain high quality human resources. Bearing this in mind, we continued our policy of recruiting the best people and implementing programs to develop and retain high quality human resources through providing need based internal and external training in both home and abroad, through ensuring competitive compensation and rewards and employee s health and safety. Corporate Governance Awareness of Corporate Governance has grown rapidly worldwide in recent years due to increased legislative and regulatory activities as well as evolving best practice recommendations. As a leading insurance company in Bangladesh led by professional people Reliance Insurance Limited is committed in adopting the highest governance standard and adjusting them as required in protecting the interest of interest of shareholders and policyholders. Good corporate governance system is vital for ecient and eective business operation to achieve the set goal. In line with the best practice, the corporate governance systems and practices in RIL are designed to ensure adequate internal control in operational process, transparency and accountability. The Board of Directors always put emphasis on and agreed to the point that the company conducts itself as a good corporate entity and comply with corporate behavior and guidelines as well as adherence to rules and regulations etc. It is also ensured that duties and responsibilities are appropriately segregated between the Board and management to provide sucient check and balance and exibility for smooth business operations. The Board provides leadership and direction to the management, approves strategic and major policy decisions and oversees management to attain predetermined goals and objectives of the company.

Corporate Social Responsibility The Company has continued its endeavours to deliver economic and social benets to the community in discharge of its CSR and has extended nancial assistance to SEID Trust and Pashchim Charmanorhar Besharkari Prathomic Biddalay & Maddha Charmanorhar Besharkari Prathomic Biddalay through MRDI. Contribution to the National Exchequer & to the Economy Reliance Insurance Limited recognizes that the company has certain responsibilities to the society for their development and the development of the nation as a whole. For this, company made signicant contribution to the Government each year by payment of Tax, VAT, Stamp duty etc. During the year 2011 company contributed Tk.284.81 million to the national exchequer as against Tk.269.99 million in 2010. Company also make an economic impact by creating employment and trained them to serve the country. Reliance Insurance Limited employed 326 employees as on 31st December 2011. During the year 2011 company spent Tk.1.33 million for training and HR development. Company also paid a total amount of Tk.136.16 million as salary and allowances to its employees and employees of the company paid Tk.5.08 million as taxes to the Government with highest payment of Tk.1.75 million by an individual employee. In addition to the above, over the past many years Reliance Insurance Limited has been paying a satisfactory dividend to its shareholders placing it among the top ranking non-life insurance company in the country. Business Risks and Steps to manage such Risks The business of insurance involves assumption of risks of many types physical as well as moral. Physical risks are identied as those caused by natural catastrophes, accidental losses and man made disasters. The key to proper management of insurance business risks is to ensure proper selection of risks as well as of the client through a vetting process known as underwriting. Non-life insurance business also closely follows the country s economic development and any slow down in the economic activities also has adverse impact on the insurance industry s growth. Reliance, being aware of these business risks, practices the following to protect its interests: (a) selection of risks which have the potential of making underwriting prot. (b) diversication into many

Annual Report 2011

39

Directors Report to the Shareholders

segments of business product wise as well as client wise so that the company is not over reliant on any particular segment (c) the company arranges adequate reinsurance back up of risks assumed by it with good quality securities. (d) the company maintains a conservative reserving policy and its various technical reserves have been created to adequately cater to unforeseen developments in the future. Future prospect Although Bangladesh non-life insurance market is rather small, considering that current penetration rate (non-life premium as % of country s GDP) is low at 0.2%, there is immense potential for future expansion. The future expansion of Bangladesh non-life insurance market and increase of insurance penetration in the country lies in tapping the hitherto untapped segments of the market personal lines business in particular which has remained neglected so far. The growth of the country s economy, in line with the growth in south Asian countries will also provide an impetus to the insurance sector by creating new business opportunities. Credit Rating The Company has been assigned a credit rating of AA (Double AA) by CRISL based on nancial statements for the year 2010, reecting the strong fundamentals and nancial strengths of the Company Financial Results & Appropriation We are pleased to report that due to eective underwriting, marketing, appropriate portfolio issue, technically sound reinsurance arrangements and eective monitoring, the company has been able to achieve favourable nancial results in 2011. Taking into consideration of the company s nancial needs and the shareholders short as well as long term interests the Board of Directors recommend the appropriation of after-tax prot of Tk. 220,342,401 as follows: Taka Reserve for Exceptional Losses Dividend @15% Bonus Share and 15% cash Dividend Retained Earnings Total 123,201,000 24,000,906 220,342,401 73,140,485

Corporate and Financial Reporting Framework The directors, in accordance with SEC Notication No. SEC/CMMRCD/ 2006158/Admin/ 02 -08 dated February 20, 2006 conrm compliance with the nancial reporting frame work for the following We report that: i) The nancial statements prepared by the management of the company present fairly its state of aairs, the result of its operations, cash ows and changes in equity. Proper books of account of the company have been maintained.

ii)

iii) Appropriate accounting policies have been consistently applied in preparation of the nancial statements and that the accounting estimates are based on reasonable and prudent judgment. iv) International Accounting Standards, as applicable in Bangladesh, have been followed in preparation of the nancial statements and any departure from there has been adequately disclosed. v) The system of internal control is sound in design and has been eectively implemented and monitored.

vi) There are no signicant doubts upon the company s ability to continue as a going concern. vii) There are no signicant deviations from last year in operating result of the company. viii) The key operating and nancial data of preceding ve years have been provided. ix) During the year ended December 31, 2011, the Board of Directors held 8 (Eight) meetings. During this period, all of the Directors serving on the Board attended 68.75% of the aggregate of the total number of meetings of the Board of Directors. x) As on December 31, 2011, shareholding patern of the Company are shown in Annexure-ii.

Status of Compliance with the conditions imposed by the Securities and Exchange Commission is enclosed in annexure-iii. Directors In terms of the Article 114 of the Articles of Association, the under-noted Directors from Group A shareholders retire from oce, but being eligible they oer themselves for re-election.

40

Annual Report 2011

1. 2. 3.

Mr. Shamsur Rahman Mr. Md. Nazmul Asad Mr. Imran Faiz Rahman

abroad for their wholehearted co-operation and active support in discharging the responsibilities reposed on me and the board during the year under review. I also thank the Ministry of Commerce and the Ministry of Finance, Chairman, IDRA, Registrar of Joint Stock Companies and rms, Securities and Exchange Commission, Government and Non-Government Organizations, Sadharan Bima Corporation, Dhaka and Chittagong Stock Exchange, Bangladesh Insurance Association and all the scheduled Banks and Leasing Companies for their sincere support and whole hearted co-operation. I, on behalf of the Board, also put on record my deep appreciation for the dedicated and loyal services extended by the executives, ocers and employees of the company at all levels without which we could not have achieved this result. The Board also acknowledges with thanks, the contribution made by the honorable Directors by guiding and giving proper directions from time to time which has made RIL a hallmark in general insurance industry of Bangladesh.. The Directors also take the opportunity to express their sincere appreciation for the contributions made by the executives and members of the sta for their praiseworthy contributions in increasing growth and continued progress of the company as well as their eorts towards putting Reliance among the top insurance companies in Bangladesh. Your Directors reiterate their commitment to rigidly following a policy of dedicated and personalized service of high professional standard to the ever-growing family of esteemed clients. Thank you all. For and on behalf of the Board of Directors

In accordance with the same provisions two directors from Group B shareholders retire from oce and as required by Insurance Rules, 1958 election of Directors from public shareholders will be held in the said Annual General Meeting. The necessary notice dated 29th February, 2012 for election of Directors from public shareholders was published in two national dailies, namely the Daily Star and the Samakal on February 29, 2012. Re-constitution of the Board In order to comply with the Section 75 of Insurance Act 2010, the following members of the Board of Directors resigned from the Board at the end of the year: Mr. Abdur Rouf Chowdhury Mr. Anwarul Huq Mr. Latifur Rahman Ms. Rokia Afzal Rahman Mr. Ahmed Sha Chowdhury Director Director Director Director Independent Director

They were subsequently replaced by the following new directors except for Mr. Ahmed Sha Chowdhury, Independent Director: Ms. Zakia Rouf Chowdhury Ms. Farah Huq Mr. Arshad Waliur Rahman Ms. Faiza Rahman Director Director Director Director

The Board paid glowing tribute to the outgoing directors who have been associated with the Company since inception of the Company and recorded deep appreciation of their support and contribution to the development of Reliance Insurance Ltd. over the years. Auditors The auditors of the Company, Zoha Zaman Kabir Rashid & Co. Chartered Accountants, will not be able to qualify for re-appointment. A resolution will be placed in the meeting for replacement of M/S. Zoha Zaman Kabir Rashid & Co., Chartered Accountants. Acknowledgement I take this opportunity on behalf of the Board of Directors, to express my heartfelt gratitude to all of our valued clients, shareholders and well wishers at home and

Rajiv Prashad Shaha Chairman

Annual Report 2011

41

Annexure-i

Summary of Accounts 2011


Taka in Million

DETAILS Gross Direct Premium Gross R/I Premium Total Gross Premium Reinsurance Premium ceded Net Premium Net Premium Reserve retained Net Earned Premium Commission Paid Net R/I Commission Earned Management Expenses (Revenue A/C) Management Expenses (P & L A/C) Gross Incurred Claims Net Incurred Claims U/W Result Investment Income (Before Tax) Net Prot before tax Return on Equity Shareholder's fund

FIRE 677.77 0.86 678.64 477.248 201.39 17.068 184.32 155.603 81.332 100.965 124.593 25.40 -16.32 -

MARINE CARGO 389.42 389.42 88.377 301.04 21.555 279.49 41.352 31.463 57.723 116.226 55.35 156.53 -

MARINE HULL 35.09 2.55 37.64 31.933 5.71 3.318 2.39 5.711 8.361 5.201 21.946 6.61 -6.78 -

MOTOR 179.47 179.47 2.601 176.87 2.053 174.81 34.292 0.066 27.292 52.852 52.85 60.44 -

MISC 136.90

2011 TOTAL 1,418.65 3.41

2010 TOTAL 1230.38 10.62 1241.00 622.93 618.07 75.27 542.80 178.55 116.71 182.27 27.45 244.93 137.69 161.00 153.68 287.24 23.93 3,513.07

136.90 1,422.06 90.493 46.41 3.329 43.08 22.072 11.550 20.350 15.532 11.83 0.38 690.65 731.41 47.32 684.08 259.03 132.77 211.53 49.2 331.15 152.04 194.25 159.91 304.97 19.50 3,427.52

42

Annual Report 2011

Annexure-ii

Pattern of shareholding
AS ON DECEMBER 31, 2011
Shareholding by Companies, Directors and their Spouse & Children: Taka in Million Name of Shareholders Prantik Engineering Co. Ltd. Rangs Limited General Produce International Ltd. FinAccord Trading Ltd. Meenhar Fisheries Ltd. Transn Trading Ltd. Arlinks Limited Trinco Limited Mr. Shamsur Rahman Kumudini Welfare Trust of Bengal (BD) Ltd. Rangs Workshop Ltd. Deep Sea Fishers Ltd. Kumudini Handicrafts Transcom Limited R. R. Cold Storage Ltd. Mr. Atiqur Rahman Ms. Nasa Rahman Siddiqui Daughter of Mr. Shamsur Rahman Ms. Fahreen Rahman Daughter of Mr. Shamsur Rahman Independent Director Managing Director & CEO B) Shareholders by others: Company Secretary CFO Head of Internal Audit Parent/Subsidiary/Associate and other related parties Shareholding of top ve executives Shareholders holding ten percent or more Nil Nil Nil Nil Nil Nil Represented by Mr. Md. Nazmul Asad Ms. Zakia Rouf Chowdhury Mr. Md. Khalilur Rahman Choudhury Ms. Farah Huq Mr. Habibullah Khan Mr. Arshad Waliur Rahman Mr. Imran Faiz Rahman Ms. Shahnaz Rahman Self Mr. Rajiv Prasad Shaha Mr. Amanullah Chowdhury Ms. Romana Rouf Chowdhury Mr. Iftikhar Arshad Husain Mr. Atiqur Rahman Ms. Faiza Rahman Self Self Self No. of Shares Held 6,70,490 25,19,480 12,75,270 12,75,270 25,19,680 25,19,430 25,19,650 25,19,500 16,05,670 22,08,430 14,55,730 26,03,430 7,13,520 9,74,290 4,89,340 29,020 4,50,280 4,50,280 Nil Nil Percentage 1.64 6.13 3.10 3.10 6.14 6.13 6.14 6.14 3.91 5.38 3.54 6.33 1.74 2.37 1.19 0.07 1.09 1.09

Annual Report 2011

43

Annexure-iii

Status of Compliance of Corporate Governance


Compliance Status Title 1.1 1.2 (i) 1.2 (ii) 1.3 1.4 (a) 1.4 (b) 1.4 (c) Board s size Number of Independent Director Appointment of Independent Director Chairman of the Board and CEO FS present fairly its state of aairs, results of its operation, cash ows & changes in equity Proper books of accounts maintained Appropriate accounting policies consistently applied in FS preparation & accounting estimates are based on reasonable & prudent judgment IASs, as applicable in Bangladesh, followed in FS preparation and departure adequately disclosed The system of internal control sound in designed and eectively implemented and monitored No signicant doubt upon its ability to continue as a going concern Signicant deviations from last year in operating results Key operating & nancial data of at least preceding three years If the company not declared dividend Number of board meetings held and attendance Pattern of shareholding Appointment of CFO, Head of Internal Audit and Company Secretary Requirement to attend Board Meetings Audit Committee Composition of Audit Committee Appointment of Audit Committee Service and tenure of Audit Committee Selection of the Chairman of Audit Committee Qualication of the Chairman of Audit Committee Reporting of Audit Committee Under process 8 meetings 68.75% attendance Complied Not complied Explanation for non-compliance/ Comments

1.4 (d) 1.4 (e) 1.4 (f) 1.4 (g) 1.4 (h) 1.4 (i) 1.4 (j) 1.4 (k) 2.1 2.2 3.00 3.1 (i) 3.1 (ii) 3.1 (iii) 3.2 (i) 3.2 (ii) 3.3.1 (i)

44

Annual Report 2011

Compliance Status Title 3.3.1 (ii) (a) 3.3.1 (ii) (b) 3.3.1 (ii) (c) 3.3.2 3.4 4.00 (i) 4.00 (ii) 4.00 (iv) 4.00 (v) 4.00 (vi) 4.00 (vii) Report on conicts of interest Suspected or presumed fraud or irregularity or material defect in the internal control system Suspected infringement of laws Reporting to the Authorities Reporting to the Shareholders and General Investors Appraisal or valuation services or fairness opinions Book Keeping or other services related to accounting records or nancial statements Broker-dealer services Actuarial services Internal Audit services Any other services Complied Not complied

Explanation for non-compliance/ Comments

3.3.1. (ii) (d) Any other matter

Annual Report 2011

45

Report on Corporate Governance


Corporate governance is the system by which companies are directed and controlled by the management in the best interest of all the stakeholders, thereby ensuring greater transparency and better and timely nancial reporting. The maintenance of eective corporate governance remains a key priority of the Board of Reliance Insurance Limited (RIL). To exercise clarity about directors responsibilities towards the shareholders, corporate governance must be dynamic and remain focused on the business objectives of the Company and create a culture of openness and accountability. RIL considers that its corporate governance practices comply with all the aspects of SEC Notication No. SEC/CMMRRCD/2006158/Admin/02-08 dated February 20, 2006. In addition, to establishing high standards of corporate governance, RIL also considers best governance practices in its activities. The independent role of Board of Directors, separate and independent role of Chairman and Chief Executive Ocer, distinct role of Company Secretary, Chief Financial Ocer and Chief Compliance Ocer, dierent Board Committees allows RIL to achieve excellence in best corporate governance practices. Board of Directors Composition The Board of RIL considers that its membership should comprise of directors with an appropriate mix of skills, experience and personal attributes that allow the directors, individually and the board, collectively, to discharge their responsibilities and duties, under the law, eciently and eectively, understand the business of the Company and assess the performance of the management. The Board of RIL comprise of sixteen directors who possess a wide range of skills and experience over a range of professions, business and service. All of them are nominated by their respective institutions except for one independent director. Each of our directors brings in independent judgment and considerable knowledge to perform their roles eectively. The Board of directors ensure that the activities of the Company are always conducted with adherence to strict and highest possible ethical standards and in the best interests of the stakeholders. The Directors are appointed by the shareholders in the Annual General Meeting (AGM). Casual vacancies if any are lled by the Board in accordance with the stipulations of the Companies Act, 1994 and Article of the Company. In addition, one third of the directors retires from the board every year in the AGM, but remains eligible for re election. Role and Responsibilities of the Board The Board is committed to the Company seeking to achieve superior nancial performance and long term prosperity, while meeting stakeholder s expectations of sound corporate governance practice. The Board determines the corporate governance arrangements for the Company. As with all its business activities, the Board is proactive in respect of corporate governance and puts in all place those arrangements which it consider are in the best interest of the Company and its shareholders, and consistent with its responsibilities to other stakeholders. The Board of Directors is in full control of the Company s aairs and is also fully accountable to the shareholders. They rmly believe that the success of the Company largely depends on the credible corporate governance practices adopted by the Company. Taking this into consideration, the Board of Directors of RIL set out its strategic focus and oversees the business and related aairs of the Company. The Board also formulates the strategic objectives and policy framework for the Company. In discharging the above responsibilities, the Board caries out, the following functions as per the charter of the Board. Determine, monitor and evaluate strategies, policy, management performance criteria and business plan. Periodic and timely reporting to the shareholders on the aairs, progress and performance of the Company. Ensuring proper decision making and accountability structure throughout the Company so that the sta down the line is fully accountable to the corporate management. Delegation to Board Committees and management and approval of transactions in excess of delegated level.

46

Annual Report 2011

Approval of annual budgets including major capital expenditure proposals. Critical evaluation of all proposals which require Board s approval and \ or directives. Regular review of nancial performance and overdue situation. Appointment and evaluation of the performance of the top management positions. Ensuring that the senior management team has the necessary skill and experience to perform their function eectively, in the best interest of the Company. Monitoring the adequacy, appropriateness and operation of internal controls. Role of the Chairman The Chairman of the Board is not the Chief Executive of the Company. The role of Chairman and Managing Director & CEO are independent and separate. The Chairman runs the Board while the CEO & Managing Director takes all executive decisions as delegated and empowered by the Board. Conduct for the Board of Members The Board of directors of RIL is committed to the highest standards of conduct in there relationships with its employees, customers, members, shareholders, regulator and the public. A director of RIL always seeks to use due care in the performance of his/her duties, be loyal to the Company, act in good faith and in a manner such Director reasonably believes to be not opposed to the best interests of the Company. Endeavour s to avoid having his or her private interest interfere with the interest of the Company. Ensures that management is causing the Company s assets, proprietary information and resources to be used by the Company and its employees only for legitimate business purposes of the Company. Maintains the condentially of information entrusted of them in carrying out their duties and responsibilities, except where disclosure is approved by the Company or legally mandated or if such information is in the public domain. Endeavours to deal fairly, and should promote fair dealing by the Company, its employees and agents with customers, suppliers, and employees. Complies and endeavours to ensure that the management is causing the Company to comply with applicable laws, rules and regulations. Board Meetings The meetings of the Board of Directors of RIL are normally held at the Registered and Corporate Head Oce of the

Company. The meetings are held frequently to discharge its responsibilities and functions as mentioned above. Meeting is scheduled well in advance and the notice of each Board Meeting is given, in writing, to each Director by the Company Secretary. The Company Secretary prepares the detailed agenda for the meeting. The Board papers comprising the agenda, explanatory notes and proposed regulations are circulated to the directors in advance for their review. The Members of the Board have complete access of all information of the company enabling them to work eciently. The Members of the Board are also free to recommend inclusion of any matter in the agenda for discussion. The Company Secretary and Chief Financial Ocer always attends the Board Meeting and other senior management is invited to attend Board Meeting to provide additional inputs to the items being discussed by the Board and make necessary presentations. Internal Control The Board is responsible for ensuring that the Company has an adequate and eective control system in place. Although no system of internal nancial control can provide absolute assurance against material misstatement or loss, The company s internal control system have been designed to provide the directors with reasonable assurance that assets are safeguarded against unauthorized use by the employees / or management and / or third parties, transactions are authorized and properly recorded and material error and irregularities are either prevented or detected with in a reasonable period of time. Properly designed management structure, clearly dened responsibilities, delegation or authorities, establishment of accountability at each level and system of periodic reporting and monitoring performance are the key elements of the internal control framework employed in RIL. Audit Committee Audit committee of Reliance Insurance Limited is the SubCommittee of the Board of Directors. Audit Committee comprises of four Directors nominated by the Board of Directors. The Committee is headed by a Director who is an Independent Director of the company. The Chief Internal Audit & Control ocer has direct access to the Committee and the Committee is directly reportable to the Board. It operates according to the Terms of Reference approved by the Board and in compliance with Section 3.00 of the Securities and Exchange Commission Notication No.SEC/CMRRCD/2006-158/02-08 dated 20th April 2006. Functions and responsibilities of the Committee:

Annual Report 2011

47

Report on Corporate Governance

i. ii.

To approve annual internal audit review activities and scope of such audit. To consider and review with the external and the internal auditors the adequacy of the Company s internal control, any related ndings and recommendations of the internal auditors and the external auditors together with the management response. To review with the management and the external auditors the Company s annual nancial statement and related footnotes including external auditor s reports on the nancial statements and any signicant changes required by the external auditors in the statements prepared by the management. To review legal and regulatory matters that may have a material impact on nancial statements, compliance, security or operations of the Company. To conduct or authorize investigations into any matters within the committee s scope of responsibilities. To assist the Board in fullling its overall responsibilities including implementation of the objectives, strategies and overall business plans set by the Board for eective functioning of the Company.

xii. To do any other functions as the Board may require from time to time. Human Capital: Reliance believes that Human capital is vitally important for the Company s success. It is prime asset of the Company. It is the stock of competencies, knowledge and personality attributes embodied in the ability to perform jobs as to produce economic value to the Company. Human capital can be increased through education, training and experience. Reliance Insurance Limited has the following policy to increase human capital: 1. Establish and administer transparent policies that enable Company to develop and implement opportunities of recruitment, promotion, remuneration, benets, rewards and recognition system, transfer and training and performance management system without any regard to age, sex, race, political belief and religion. Create a climate of trust and support within the Company which encourage the employees to work well together as a team and at the same time, to encourage them to be innovative and creative in order to achieve Company goals. Develop an eective internal communication and involvement mechanism which encourage employees to identify them with the Company and its activities. Adopt and institute a planned and systematic approach to anticipated changes and develop plans for preparing employees for technological and environmental changes and accordingly Identify employees training and developmental needs and provide them with necessary development opportunities for them to advance in their career. Ensure that the employment opportunities conform to the established and acceptable practices of the country. Ensure that there are proper manpower planning and forecasting system in place to ensure that there will be enough people with the right skills and talents to meet Company s current and future growths and needs Ensure that people with high capabilities proven by track record reach key management positions regardless of their sex, religion, cast creed, and more importantly age and seniority in addition to putting in place succession plans for all senior management positions in the company.

iii.

iv.

v.

2.

vi.

3.

vii. To review the nancial reporting process, the system of internal control and management of nancial risk and the Company s processes for monitoring compliance with laws and regulations and its own code of business conduct. viii. To evaluate whether management is setting the appropriate compliance culture by communicating the importance of internal control and the management of risk, and ensure that all employees have understanding of their respective roles and responsibilities. ix. To review the arrangements made by the management for building a suitable Management Information System (MIS) including information technology system and its applications. To review the corrective measures taken by the management as regard to the reports relating to fraud and forgery, deciency in internal control or other similar issues detected by internal and external auditors and inspectors of the regulatory authorities. To review the activities and organizational structure of internal audit functions and ensure that no unjustied restriction or limitation were made.

4.

5.

6.

x.

7.

xi.

48

Annual Report 2011

report on CORPORATE SOCIAL RESPONSIBILIties


We all have a personal responsibility to each other and the world around us. Everything we do has an eect on other people. It is the same for businesses, large or small, public or private, that their actions aect a large number of stakeholders. Such stakeholders include customers, shareholders, employees, suppliers and society in general. With growing scrutiny of business operations, organizations are increasingly being driven to satisfy the expectations of opinion formers, governments and customers in order to thrive. In essence, businesses adopting Corporate Social Responsibility (CSR) principles believe that by operating ethically and responsibly, they have a greater chance of success. Businesses are demonstrating that well managed CSR actually supports business objectives, especially among medium/large corporates where improved compliance, reputation and relationships have been shown to increase shareholder value and protability. With this end in view, Reliance Insurance Limited (RIL) over the years had been giving due importance & making contributions towards various activities as part of its CSR eorts. Our CSR eorts included making contributions in the elds of health, support to physically challenged children, education & training etc. During the year under report, RIL made signicant nancial assistance to Society for Education & Inclusion of the Disabled (SEID) Trust to support underprivileged children with autism, intellectual and multiple disabilities towards promoting the rights & rehabilitation of these disadvantaged children. RIL also contributed substantial sum of money towards school infrastructure development in remote areas at Char Fashion, Bhola via Management & Resources Development Initiative (MRDI), a multidisciplinary, not for prot, non government organization engaged in a wide spectrum of social development activities. Further, in response to the request of Bangladesh Cricket Board, RIL made a sizeable nancial contribution through Bangladesh Insurance Association (BIA) for the opening ceremony of ICC Cricket World Cup 2011 staged for the rst time in Bangladesh with an aim to promote Bangladesh s image abroad and to popularize the game countrywide.

Annual Report 2011

49

Redress of investors complaints


Reliance Insurance Limited is committed to maintaining highest standard of conduct and professional behavior in dealing with its shareholders. Share Department of the Company maintains systematic records and information relevant to the shareholders. Share Department ocials are always ready to help shareholders whenever in need of share related services like share transfer, transmission, dividend warrant issue, dividend warrant re-validation etc. Shareholders of the company are also free to raise their claim, if any, throughout the year. Shareholders get opportunity to speak on various issues relating to the operation of the Company at the Annual General Meeting which is held once a year, in which the Chairman/ Managing Director of the Company with the help of Company Secretary respond to all queries raised by the shareholders instantaneously. Generally, shareholders raise issues relating to utilization of Company s resources, yearly, half yearly and quarterly accounts, business turnover and protability, declaration of entitlements, issuance of share certicates, share transfer and transmission, changes of shareholders address, nonreceipt of Annual report, date and time of AGM, minutes of meetings of all AGM/EGM, implementation of decision of the AGM & EGM and so on. It is the responsibility of the Company Secretary to oversee that necessary actions are taken expeditiously so that these issues are resolved to the satisfaction of shareholders.

Redress of Clients complaints


Insurance being a service industry, clients satisfaction is of paramount importance in maintaining existing clientele base and tapping new business, thereby to achieve satisfactory business growth in the long run. Being fully aware of this, Reliance always attends to its clients complaints whether related to its services or claim settlement. Reliance encourages its clients to come forward with any complaint they may have and the top management is completely accessible to all them. Complaints can be lodged with the management in writing, over telephone, by e-mail or through the web site. During regular meetings with its clients of various types, the management actively solicits the clients views on the Company s services, shortcomings, if any, and their suggestions. Clients views and complaints are discussed at the management committee meeting held at head oce and also during meetings with Branch Managers. This aspect also features prominently at the Annual Conference of the Company.

50

Annual Report 2011

Financial History
Taka in Million

Sl. No. Particulars 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Paid-up capital Shareholders' equity Total Reserves Investments Cash & bank balance Total assets Investment & other income Gross premium Net premium Net claims Underwriting prot Net prot before tax Net prot ater tax Net asset value per share Market value per share Earnings per share Price earnings ratio Dividend in percentage (Stock) Dividend in percentage (Cash) Return on shareholders' fund * Current ratio Debt equity ratio Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Times % % % Ratio Ratio

2011 410.67 3,427.52 3,312.83 1,539.70 864.80 4,530.84 159.91 1,422.06 731.40 152.04 194.25 304.97 220.34 83.46 102.10 5.37 19.03 15 15 19.50 1.5 : 1 -

2010 304.20 3,513.07 3,457.53 2,673.34 791.88 4,605.93 153.68 1,241.00 618.07 137.68 161.00 287.23 217.64 115.49 173.80 7.15 24.29 35 23.93 1.32 : 1 1:.03

2009 234.00 952.44 891.84 190.52 759.87 1,880.29 114.94 1,041.13 430.25 105.09 56.78 146.30 119.75 40.70 133.93 5.12 26.17 30 17.31 1.49 : 1 -

2008 180.00 688.20 691.68 198.53 598.82 1,467.92 61.14 1,101.53 453.20 103.68 96.31 137.91 107.94 38.23 88.73 6.00 14.80 30 18.86 1.43 : 1 -

2007 150.00 580.26 573.98 169.52 463.12 1,205.62 42.42 827.53 353.66 85.60 76.56 100.68 66.39 38.68 32.20 4.43 7.28 20 14.30 1.4 : 1 -

* Land revaluation and Fair value reserve were not considered while calculating return on shareholders fund.

Annual Report 2011

51

Performance indicators
Earnings Per Share
Taka

Net Assets Value


Taka in Million

Market Value Per Share


Taka

3,513.07

3,427.52

133.93

580.27

952.44

688.20

32.20

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

2007

88.73

2008

2009

173.80

2010

102.10 2011 1,241.00 2010 2010 220.34 2011 1,422.06 2011

4.43

6.00

5.12

7.15

5.37

Shareholders' Fund
Taka in Million

Return on Shareholders' Fund


Percentage

Gross Premium
Taka in Million

23.93 18.86 17.31 14.30 19.50 827.53 1,101.53 1,041.13 2009

2007

2008

952.44

2009

3,513.07

2010

3,427.52 2011

580.26

688.20

2007

2008

2009

2010

2011

2007

2008

Underwriting Prot
Taka in Million
194.25 161.00

Net Prot Before Tax


Taka in Million

Net Prot After Tax


Taka in Million

96.31

100.68

287.23

304.97

137.91

146.30

56.78 2007 2008 2009 2010 2011

2007

2008

2009

2010

2011

2007

107.94

2008

52

Annual Report 2011

119.75

66.39

2009

217.64

76.56

Shareholders' Equity
Taka in Million

Property Plant & Equipments


Taka in Million

Net Current Assets


Taka in Million

3,513.07

3,427.52

352.14

185.74

188.07

539.78

1,400.88

244.00

952.44

580.26

688.20

322.91

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

2007

2008

438.60

2009

335.52

2010

Current Liabilites
Taka in Million

Net Assets Value Per Share


Taka

Return on Capital Employed


Percentage

1,057.29

1,058.59

115.49

606.35

758.41

899.02

38.68

38.23

40.70

83.46

18.25

529.11 2011
2010 19.03 2011 21.39 2011

16.56

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

2007

2008

Gross Prot Ratio


Percentage

Earnings Per Share


Taka

Price Earnings Ratio


Percentage

46.47

41.70

16.91

2009

28.47

34.00

7.15

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

2007

14.80

2008

26.17

7.28

2009

24.29 2010

30.43

4.43

6.00

5.12

5.37

24.80

Annual Report 2011

53

Value Added Statement


FOR THE YEAR ENDED DECEMBER 31, 2011
The Value Added Statement (VAS) provides a detailed account of total value creation by the Company during the year of account and its distribution for the same period. Reliance Insurance Limited contributed positively to the socio-economic development through payment of salaries and allowances of employees; by paying attractive and consistent dividend to the shareholders; and by paying Tax, VAT, Stamps duty etc. to the government. The Value Added Statement of Reliance Insurance Limited for the year 2011 mentioned below shows how the value is created and distributed among dierent stakeholders of the company: Particulars VALUE ADDED Gross Premium VAT & Stamp Duty Investment & Other Income TOTAL VALUE ADDED DISTRIBUTION OF THE VALUE ADDED VAT & Stamp Duty Net Reinsurance Cost Additional reserve for Unexpired Risks Management Expenses Net Claims Incurred Tax Dividends Reserve & Surplus TOTAL DISTRIBUTION 276.63 557.88 47.30 519.76 152.04 84.62 106.47 113.87 1,858.57 206.88 506.22 75.22 388.27 137.68 69.59 70.20 147.44 1,601.50 1,422.03 276.63 159.91 1,858.57 1,241.00 206.87 153.68 1,601.55 2011 Tk. (in Million) 2010 Tk. (in Million)

Dividends 106.47 Tax 84.62 Net Claims Incurred 152.04

Reserve & Surplus 113.87

VAT & Stamp Duty 276.63

Net Reinsurance Cost 557.88

Management Expenses 519.76 Addional reserve for Unexpired Risks 47.30

54

Annual Report 2011

Economic Value Added statement


Economic Value Added (EVA) is the nancial performance measure that attempts to measure the true economic prot of an organization. It provides a measurement of a company s economic achievement (success or failure) over a period of time. Such a metric is useful for investors who wish to determine how well a company has added value for its investors and it can be compared against company s peers for a quick analysis of how well the company is operating in its industry. Companies which earn higher returns than cost of capital create value, and companies which earn lower returns than cost of capital are deemed harmful for shareholder value. Economic value added is calculated by taking a company s net prot after tax less cost of capital. For the year ended 31st December Shareholders equity at the year end Accumulated provision for doubtful losses Average Shareholders equity *Cost of equity (%) Economic Value Added Net prot after tax Less: Cost of equity * 2011 Taka 1,129,949,307 1,129,949,307 13.46 68,251,224 220,342,401 152,091,177 2010 Taka 909,606,906 909,606,906 12.26 106,122,874 217,640,681 111,517,807 2009 Taka 691,966,225 691,966,225 12.26 34,911,017 119,746,076 84,835,059

It is the opportunity cost i.e. the expected risk free return on investments, plus a risk premium. Interest on Bangladesh Government Sanchaya Patra plus 2% risk premium has been assumed to be the cost of equity.

Market Value Added Statement


FOR THE YEAR ENDED DECEMBER 31, 2011
Market Value Added (MVA) is the dierence between the total market value (based on the quoted price in the main bourse) and total book value of the Company s shares. The higher the MVA, better the Company s position. A high MVA indicates the Company has created substantial wealth for the shareholders. A negative MVA means that the value of management s action and investments are less than that value of the capital contributed to the Company by the capital market (or that wealth and value have been destroyed). As of December 31, 2011, the total share market value of Reliance Insurance Limited stood at Taka 4,192.94 million whereas the book value of the Shareholder s Equity stood 3,427.45 million, resulting a Market Value Added of Taka 765.49 million. The calculation of Market Value is given below: Particulars Market Value Book Value Market Value Added Numbers of Shares 41,067,000 41,067,000 Value Per Share (Taka) 102.10 83.46 Total Value (Taka in Million) 4,192.94 3,427.45 765.49
Market Value Added 765.49

Book Value 3,427.45

Market Value 4,192.94

Annual Report 2011

55

market share information


Bangladesh Non-life Insurance Market Composition & Share Bangladesh Non-life insurance Premium in 2010 was Taka 16,544 million. Last 6 year s Premium growth and penetration rate (Non-life insurance premium as % of GDP) is shown in the chart below: The Non-life market is comprised of 43 insurance companies including one state enterprise. No single insurer has a large market share. The top 4 private sector insurers collectively account for a market share of 27%, out of which Reliance s market share is 7.5%.

Bangladesh Non-life Insurance Market


Taka in Million
16,544

12,583

13,898

9,020 7,981

10,653

0.22 2005

0.22 2006

0.23 2007
Premium

0.23 2008

0.23 2009

0.24 2010

Insurance Penetration (%)

accounting Ratios partaining to insurance sector


Particulars Reinsurance Premium Ceded as % of Gross Premium Commission Paid as % of Gross Premium Net R/I Commission Earned as % of Gross Premium Net R/I Commission Earned as % of Net Premium Management Expenses (Revenue A/C) as % of Gross Premium Management Expenses (Revenue A/C) as % of Net Premium Net Claims Incurred as % of Gross Premium Net Claims Incurred as % of Net Premium Underwriting Result as % of Gross Premium Underwriting Result as % of Net Premium 2011 48.57 18.22 9.34 18.15 14.87 28.92 10.69 20.79 13.66 26.56 2010 50.20 14.39 9.40 18.88 14.69 29.49 11.10 22.28 12.97 26.05

56

Annual Report 2011

THE employer of the choice

A tribute to our HR Team


The benets oered by Reliance to its employees are the most competitive in the industry. The dedicated HR team endeavors to retain its talent pool and keep all the employees motivated to obtain best individual and team performances.

Human Resource Management for All Managers


The success of an organization depends on various factors. Whilst it is dicult to determine which single factor is more crucial for the survival of the organization in comparison to other factors but it is commonly accepted fact that the role of human resource is very crucial in the survival and growth of any organization. Indeed, the role of HR is expanding and it is not limited to the selection and recruitment procedure but also aecting the day to day activity of an organization. The purpose of the HRM is to design and follow a strategic and coherent approach for the management of the people working in the organization and get the best out of them for the growth of the organization. The growth of the organization depends on the sincerity and commitment of the employees. The increasing competition among the employees and tough market condition has made it dicult for an organization to survive and manage all the available resources eectively. Therefore, it was soon realized that the practice of HR policies need to be practiced in all aspects of the organization and it should not remain restricted to selection process only. For the eective running of the organization now all the Departmental Managers need to follow HR policies in letter & spirit. The knowledge of HRM is a must for all Managers as it makes the functioning of the organization more productive and smooth. In the past, only big organizations used to manage a separate HR department and most of the small organizations did not have existence of separate HR department but now the trend is changing rapidly. Managers are now frequently getting involved in HRM activities. The concept of HR stands for three H s. These are Heart, Head and Hand. A Manager should know that one should feel by heart, think by head and implement by hand. The goal of HRM is to improve the organizational culture and help the organization in achieving its vision & mission. Considering its importance and expanding role, HR policy is currently percolated down to all top Managers for implementation in line with an organization s mission, vision and business strategies.

58

Annual Report 2011

report on information technology


Background: Since the very beginning of the Company till 2004, RIL had a computerized General Ledger for Central Accounts Department only. But like most other insurance companies, its operation was based on stand alone PC s and manual system. There was no IT enabled MIS system in place to help RIL analyze the business gures and to track performance of products, customers, branches, department and people. As a result RIL was severely handicapped in the eld of IT, resulting in ineciency and improper management negatively impacting its endeavor to maintain its position at the top of the Insurance fraternity. Formation of IT Division: Against the backdrop of the above mentioned situation, RIL management decided in the year 2000 to introduce a modern computer system to cater to future prospects of the Company. As part of that vision, an Information Technology Division was established to make the dream come true. The information technology s role in the business sector certainly can hardly be over emphasized. It is of utmost importance, which enables businesses to eectively and successfully plan, manage, execute strategies which lead to prot. Therefore the mission of this Division is to completely re-engineer and automate RIL s business processes to achieve higher productivity, lower cost, improved quality, enhanced service and ecient management. IT mainly deals with computer applications which are now completely automated. The technology has not only made communication cheaper, but also much faster. Information Technology Division has taken pragmatic approaches to bring the technological boon and advancement into RIL s business process to make it more competitive and adaptive for the 21st century. The software applications and the hardware devices are the main elements of use in information technology. So a modern and dynamic IT Division was created with two departments like Hardware and Software including a structured LAN for its smooth operation and getting the technical advantage. Operating the IT system at Reliance, there are seven experienced and professional IT personnel. Software development & implementation: Software is an important integral part of information technology which relates to computer applications that enable a company to generate, store, program, and retrieve data as and when needed. Like an ERP Software Computer Integrated Insurance System (CIIS) was jointly developed with the co-operation of IBCS PRIMAX (Bangladesh) Ltd. Under which all the business process and functionalities were included. After 14 months of development by IBCS and RIL s 10 programmers, it was completed and on 1st of July 2004 it was implemented successfully at RIL. On the job training was also provided to all end users. Key Benets of RIL IT system: Huge saving in working time in preparing document, Money Receipt and some large informative monthly reports with excellent print quality Getting 400 Plus system generated MIS report which helps management to take decisions properly and timely Integrated Accounts where 80% Journal Voucher are passing through system as well as Final Accounts report like Balance Sheet, Prot & Loss Account, Revenue Account, General Ledger and Trial Balance are being generating automatically through the system Controlling business procurement trough Computer Integrated Insurance System (CIIS) software Quick accessing the underwriting documents through CIIS for departmental integration with UW Dept. like Co-Insurance, Claims, Commission, ReInsurance and Accounts department On-line branches: During the seven years, the Head Oce, Local Oce and 13 (thirteen) Branches were connected to the RIL IT Network through optical ber. Future Plan: Connect all the RIL Branches to online network for running their daily business operations smoothly and get all the IT benets. Establish a Data Center for providing Information to the management from data archive as when required.

Annual Report 2011

59

Report on Information Technology

Establishing a Disaster Recovery Center to secure the company s valuable data in a professional manner. Higher Training on latest information technology to be provided to the IT professionals for development of new software to meet the users demand by using present technology. Development of IT in 2011: Software We have upgraded our oracle database from 9i - 9.2.0.1.0 (windows 32 bit) version to 10g 10.2.0.3.0 (Linux 64 bit) version as well as operating system from windows 32 bit to Linux 64 bit. As a result our oracle database performance has increased tremendously. A new module named Secondary Share Information System has been developed and added into our Computer Integrated Insurance System (CIIS) to manage our investment at secondary share market. Hardware/Network We moved to our new Head Oce at Tejgaon Link Road on the 6th Marth 2011. At the new Head Oce we have setup a new structured LAN, which is more reliable and secured. Oracle Server s RAM was upgraded from 4 GB DDR3 to 16 GB DDR3 and secondary storage system from SATA to SATA2 like Enterprise Storage Hard Disk. We have upgrade bandwidth of our dedicated broadband internet connectivity from 1 mbps to 1.5 mbps as a result our users can take more advantage of internet facilities.

A new branch named Mogh Bazar has connected into our on-line system through optical ber and they have already started their business operation through CIIS as like other on-line branches from the very beginning. Humanware An IT professional was recruited in our IT Hardware Department to extend the support to the end users. Conclusion: Information technology provides the ability to process a large amount of information and in a way which presents the information in a clear and concise manner to employees. Anticipated benets of implementing an information technology system include improvements in prot performance, and a higher degree of accuracy among information within the possible shortest time. Insurance business has made great strides in risk evaluation as well as their calculation and reporting abilities. Much of such analyses can be done by developing new software of risk infrastructure, data model governance and quality. In this perspective IT sector of Reliance have been playing an important role during the last 10 years and contributing to the economic stability of the Company.

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Report on Going Concern


Financial Statements are normally prepared on the assumption that an enterprise is a going concern and will continue in operation for the foreseeable future. Hence, it is assumed that the enterprise has neither the intention nor the need to liquidate or curtail materially the scale of its operations; if such an intention or need exits, the nancial statement may have to be prepared on a dierent basis and, if so, the basis used is disclosed. On the other hand Listed Companies are required by SEC to report on its ability to continue as going concern. The Board of Directors of Reliance Insurance Limited has made annual assessment about whether there exist material uncertainties which may cast signicant doubt upon the Company s ability to continue as going concern. The director s assessment of whether the Company is a going concern involves making appropriate inquiries including review of budget, forecast, assumptions and future outcome of inherent uncertainties in existence. The Directors are convinced from the following indications, which give reasonable assurance as to company s ability to continue as a going concern for the foreseeable future. Less reliance on short term borrowing Continuous nancial support by lenders Positive operating cash ows Positive key nancial ratios Consistent payment of dividends Credibility in payment of obligations Performance growth Positive underwriting results and trends

OPERATING INDICATIONS
No key management turnover Good business expansion Spread of business across diverse clientele . Good market reputation and clients satisfaction Good Corporate environment and employee satisfaction

OTHER INDICATIONS
Maintenance of sucient capital base as required by law Strong equity base Strong Claim Paying Ability (CPA) Anticipates no signicant change in legislation or government policy

FINANCIAL INDICATIONS
Positive net current assets Fixed term debt with realistic renewal or repayment

Annual Report 2011

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CLAIMS MANAGEMENT AND DETAILS OF OUTSTANDING CLAIMS (IBNR & IBNER)


The claims handling process starts with the notication of loss to Reliance Insurance and the company appoints a licensed loss adjuster immediately upon receipt of intimation. Reliance Insurance undertakes all necessary steps expeditiously in an orderly sequence: to contact the insured, arrange to inspect the loss through a loss adjuster, ascertain quantum of loss and company s liability etc. Reliance Insurance also suggests to their clients the preventive measures to be adopted to minimize the loss and to take steps to protect salvage. In order to ensure speedy disposal of claims, the insured and/or their agent are always requested to submit all available supporting documents without delay. A list of minimum requirement of supporting papers for claims arising under each class of business is maintained at the Head Oce. As soon as Reliance Insurance receives all necessary papers along with survey report from the loss adjuster, the company quickly scrutinizes all documents against its check list of requirements, veries the loss adjustment made by the Surveyor and, if in order, proceeds with settlement of claim without loss of time. Underwriting and claims settlement are the two vital aspects of the functioning of any insurance company. An insurance client obtains an insurance policy by paying a price called premium with the objective of obtaining nancial indemnication upon happening of a loss to the subject matter of insurance. Out of any insurance contract, the client therefore has the following expectations: a) b) Adequate insurance coverage, which does not leave him high and dry in time of need, with right pricing. Timely delivery of defect free policy documents with relevant endorsements/warranties/conditions/ guidelines. Should a claim happen, quick settlement to his satisfaction. INCURRED BUT NOT REPORTED (IBNR) LOSSES IBNR refers to the losses that are not led with the insurer or reinsurer until years after the insurance policy is sold. It is a reserve to provide for claims in respect of claim events that have occurred before the accounting date but had still to be reported to the insurer by that date. In the case of a reinsurer, the reserve needs also to provide for claims that, although known to the cedant, have not yet been reported to the reinsurer as being liable to involve the reinsurer. Some liability claims may be led long after the event that caused the injury to occur. Asbestos-related diseases, for example, do not show up until decades after the exposure. IBNR also refers to estimates made about claims already reported but where the full extent of the injury is not yet known, such as a workmen s compensation claim where the degree to which work-related injuries prevents a worker from earning what he or she earned before the injury unfolds over time. Reliance Insurance regularly adjusts reserves for such losses as new information becomes available. INCURRED BUT NOT ENOUGH REPORTED (IBNER) RESERVE IBNER refers a reserve reecting expected changes (increases and decreases) in estimates for reported claims only (i.e. excluding any true or pure IBNR claims). The abbreviation is sometimes stated as applying to incurred but not enough reserved . IBNR and IBNER these are two terms can be regarded as identical meaning. In some types of work, especially in reinsurance and in the London market, IBNR provisions include any IBNER provisions. Sometimes the provision for claims incurred on or before the valuation date and reported after the valuation date is referred to as the True IBNR or the Pure IBNR. Under the current Insurance laws of Bangladesh, it is not yet obligatory to provide reserves for IBNR and/or IBNER claims. However, under solvency margin regulations proposed under Insurance Act 2010, such reserves will be required to be maintained in the manner to be prescribed by the relevant Rules.

c)

Reliance Insurance has a corporate philosophy on claims management setting out broad approach aiming to provide high quality service and expeditious settlement of claims. It species the nature of claim service at each stage of the claim process, the speed of the claim service and also the IT enabled interactive process to know the status of the claim. Reliance Insurance manages the claims rather than handling them.

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63

insurance risk and its mitigation


Insurance is a mechanism of spreading the risk of one onto the shoulders of many. It has two fundamental characteristics: one is shifting of risk from one individual to a group and the other is sharing of losses on equitable basis by all members of the group. Whilst it becomes somewhat impossible for a man to bear by himself 100% loss to his own property or interest arising out of an unforeseen contingency, insurance is a method which distributes the burden of the loss on a number of persons within the group formed for this particular purpose. From an individual point of view, insurance is an economic device whereby the individual substitutes a small certain cost (the premium) for a large uncertain nancial loss (the risk insured against) which would exist if it were not for the insurance contract. One of the prime objectives of Reliance Insurance is the creation of the counterpart of risk which is security. Insurance does not take away the risk. The insurance company does not guarantee that the event insured against will not happen. The house may still burn down, the car may still be involved in an accident but at least a large element of the cost involved will be met by insurance company. Reliance Insurance imparts technical expertise in a professional manner to the clients and loss adjusters and renders connoisseur counsels to minimize losses. In turn, the loss adjusters and clients can improve the risk to a substantial degree and minimise the possibility of the number of misfortunes. The handling of salvage after loss by the loss adjusters also contributes much to the reduction of losses. An organisation needs to understand critically the risks to which it is exposed. One incident may cause a chain of damage that becomes unacceptable to the stakeholders. One type of incident may cause fairly low damage but happen frequently then logically the risk is unacceptable. On clear understanding of the risk an organisation is exposed, the organisation can make decisions about the acceptability or otherwise of those exposures. Once an understanding of those risks that have either a potential level of impact or a frequency of incident that is unacceptable has been established, then something needs to be done to bring these risks down to the acceptable level. Reliance Insurance, through their professionals, undertakes pre-insurance surveys of large and complicated risks which thus ultimately facilitates in the defence of national property and wealth. Services basically aim at reducing the happening of the casualty itself rather than minimising the extent of loss after the happening of the casualty. Apart from this, Reliance Insurance attempts proper handling of salvage (residue after incidence) with the ultimate object of minimizing the extent of loss which has already occurred thereby contributing to the economy or at least safeguarding the depreciation of the economy. Without such an understanding insurance premiums and other monies spent on managing the wrong risks can be wasted. Furthermore, potentially damaging exposures can be missed, leading to direct loss or even destruction of the Company. Risk management ensures proper understanding of the right level of risk acceptance, risk control and risk related expenditure. Furthermore, the risk and recovery planning expenditure can neither be less nor more, than the organization needs it to be. The pre-underwriting inspection of re hazards to the insurable property is of paramount importance. Before accepting risks it is prudent and essential to have the risks of the subject matter to be inspected for underwriting and reinsurance purposes. On the basis of the pre-inspection report the underwriter may recommend segregation of risk by installation of re proof door to reduce premium, cleanliness of factory premises and to reduce re hazards. Recommended re prevention measures not only reduce re hazards but also help the insured to get rebate on the rate of premium. Reliance Insurance assumes pre-inspection of risk which is very helpful for reinsurance purpose as well. Without pre-inspection it is dicult to segregate risks and make retention and cession to reinsurers. Inspection surveyor s advice for risk improvement largely contributes towards reducing the possibility of hazards rather than minimizing the extent of loss after the happening of the casualty. Risk can be considered as a state of nature or a state of the world in which we live. Perceived risk might be zero, whereas the actual risk is not zero. An eective

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framework for managing risk ensures full identication and awareness of signicant risks, which are then measured in a consistent manner across asset classes and businesses. A proper set of management controls for non quantiable risks should also form part of this framework. It should link risk-taking activities to capital consumption and performance evaluation at various levels product, customer, prot centre, business unit and enterprise. Reliance Insurance almost universally has embarked upon an upgrading of their nancial risk management and control systems to reduce their exposure to risk and better manage the amount they accept. Insurance Management of risk is a science though it is one of the most inexact of the social sciences. Risk management exists to provide value for its stakeholders. Risk management enables management to eectively deal with uncertainty and associated risk & opportunity, enhancing the capacity to build value. Reliance Insurance always considers and forecasts risk factors well so that risk can be minimized through employing risk management tools. Value maximization encompasses aligning risk appetite & strategy, enhancing risk response decisions, reducing operational surprises and losses, identify and

managing multiple and cross enterprise risks, seizing opportunities and improving deployment of capital. Reliance Insurance through their expert professionals imparts responsiveness with the clients with a view to achieve the objectives how to analyze the risk factors associated with dierent activities, observe how risk can aect decision making processes, how operational risk can be managed properly with the help of insurance. Reliance Insurance ensures proper risk management of their clients which benets them as saving resources: time, assets, income, property, and people are all valuable resources that can be saved if fewer claims occur, protecting the reputation and public image of the clientele, preventing or reducing legal liability and increasing the stability of operations, protecting people from harm, protecting the environment, enhancing the ability to prepare for various circumstances, reducing liabilities, assisting in clearly dening insurance needs. Reliance Insurance, through its eective risk management practice, cannot eliminate risks but the endeavour shows that the Company is committed to loss reduction or prevention and makes the client a better risk to insure as well.

Solvency Margin
Solvency margin is the amount by which the assets of an insurer exceed its liabilities, and will form part of the insurer s shareholder s funds. Method of valuations of assets and liabilities of an insurer are prescribed in the insurance regulations. The regulations stipulate the minimum solvency margin, which an insurer must maintain at all times. The solvency of an Insurance Company corresponds to its ability to pay claims. The solvency of insurance Company or its nancial strength depends chiey on whether sucient technical reserves have been set up for the obligations entered into and whether the Company has adequate capital as security. Moreover solvency margin assists nancial investment managers when making a decision on the risk or reward capability of a company to return dividends to stockholders. In Bangladesh regulations for solvency margin for non-life insurance Company has not yet been nalized by the regulator.

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REVIEW OF ASSETS QUALITY


Reliance Insurance Limited always focuses on the superior assets quality so that these will bring highest value to the Company , ensure satisfactory return to the stakeholders and ensure sustainable development. To perform the said objectives, Company has the policy to review of its assets periodically and as a result of continuous monitoring and development of the assets quality, company could achieve the hefty growth for the past years. Following gures showing Five years growth of the assets may demonstrate how the Company maintains its assets quality to increase value to the Company: Reliance ensures high degree of liquidity of its assets - more than 60% of its assets comprise of cash and quickly disposable shares and securities. Its share investment portfolio comprise of investments into companies with strong fundamentals. Notwithstanding rather adverse performance of stock markets in Bangladesh during the year 2011, Reliance could maintain its investment income at level similar to 2010, which bear testimony to the prudent investment poilicies followed by the Company.

POSITION OF TOTAL ASSETS


Year 2007 2008 2009 2010 2011 Property, plant & equipments 185.74 188.07 352.14 539.78 1,400.88 Investments 169.52 198.53 190.52 2,673.34 1,539.70 Cash, xed deposit and bank balances 463.12 598.82 759.87 791.89 864.80 Other assets 387.24 482.51 577.76 600.92 722.85

Taka in Million

Total 1,205.62 1,467.93 1,880.29 4,605.93 4,528.23

Total Assets

Investable Assets
Share & Debentures-long term 39%

Fixed assets and other 37%

1,880.29

1,467.93

4,605.93

2007

2008

2009

2010

4,528.23

1205.62

Share & Debentures-short term 1%

2011 Cash at bank 23%

POSITION OF INVESTABLE ASSETS


Particulars Share & Debentures Long term Current Total: Cash at bank Property, plant & equipments and other xed assets Total: 2011 1,478.70 61.00 1,539.70 864.80 1,403.44 3,807.94 % 38.80 1.60 40.40 22.70 36.80 100.00 2010 302.10 73.30 375.40 791.90 539.80 1,707.00

Taka in Million

% 17.70 4.30 22.00 46.40 31.60 100.00

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Annual Report 2011

Proposed oce building in own land at Bir Uttam A. K. Khandker Sarak, CWS (C) 11, Gulshan, Dhaka-1212

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67

Report of the Audit Committee

Audit Committee of the Reliance Insurance Limited comprises of four Directors nominated by the Board of Directors. The Chief Internal Audit & Control ocer has direct access to the Committee and the Committee is directly reportable to the Board. It operates according to the Terms of Reference approved by the Board and in compliance with Section 3.00 of the Securities and Exchange Commission Notication No.SEC/ CMRRCD/2006-158/02-08 dated April 20, 2006.The Audit Committee comprises as under : Mr. Atiqur Rahman Mr. Md. Nazmul Asad Mr. Habibullah Khan Mr. Amanullah Chowdhury Chairman Member Member Member

and branch activities and recommended appropriate measures to the management arising out of the ndings from such reports. Reviewed the status report of Audit Plan 2011 and also reviewed the Audit Plan for 2012. During its meeting on March 15, 2012, the Audit Committee reviewed and examined the internal audit reports on the draft annual nancial statements for the year 2011 and recommended the audited accounts for the year 2011 to the Board of Directors for their consideration and approval. The Audit committee is of the view that the internal control and procedures are adequate to present a true and fair view of the activities and nancial status of the Company. Finally the Audit Committee would like to convey their appreciation to the members of the Board, key Management personnel and Internal Audit Division for their generous cooperation and support during the year 2011.

During the year under review i.e. 2011, ve (5) meetings of the Audit Committee were held to carry out the following tasks: Reviewed and discussed the Management Report, by external auditor for the year ended December 31, 2011 and management s response(s) to the report. Reviewed the appointment of external auditors. Reviewed quarterly and half yearly nancial statements. Reviewed various reports of Internal Audit & Control Department on operational, nancial procedures

Mr. Atiqur Rahman Chairman Audit Committee

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Annual Report 2011

Auditors Report
TO THE SHAREHOLDERS OF RELIANCE INSURANCE LIMITED
We have audited the accompanying Statement of Financial Position of Reliance Insurance Limited as at 31st December 2011 and Statement of Comprehensive Income along with related Revenue Accounts, Statement of Cash Flows, Statement of Changes in Shareholders Equity and notes (1-34) to the Financial Statements for the year then ended. Respective Responsibilities of Management and Auditors The Company s management is responsible for preparing the nancial statements, which give true and fair view, in accordance with the Generally Accepted Accounting Principles (GAAP) and the Bangladesh Accounting Standards (BAS). Our responsibility is to express an independent opinion on the nancial statements, presented to us, based on Bangladesh Standards on Auditing (BSA). Basis of Audit Opinion We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An Audit includes examining on test basis evidence supporting the amounts and disclosures in the nancial statements. An audit also includes an assessing the accounting principle used and signicant estimates made by management as well as evaluating the overall nancial statements presentation. We believe that our audit provides a reasonable basis for our opinion. Opinion In our opinion, the nancial statements read in conjunction with the notes (1-34) to the nancial statements presents, in all material respects, gives a true and fair view of the nancial position of Reliance Insurance Limited as on 31st December 2011 and of the results of its operations and its cash ows for the year then ended and they comply with the Companies Act 1994, The Insurance Act 2010 , the Securities and Exchange Rules 1987, Bangladesh Accounting Standards and other applicable laws and regulations. c. We also report that a. b. We have conducted the audit as per applicable Bangladesh Standards on Auditing (BSA); Our examination and checking of records, relevant books of accounts, registers, schedules and nancial statements were sucient to enable us to form an informed and assessed opinion on the authenticity and accuracy of the nancial statements; We have obtained all the information, explanation and documents as required by us;

d. The Company management has followed relevant provisions of laws and rules in managing the aairs of the Company and proper books of accounts, records and other statutory books have been properly maintained and (where applicable) proper returns adequate for the purposes of our audit have been received from branches not visited by us; e. The expenditure incurred and payments made were for the purpose of the Company s business for the year; As per section 63(2) of the Insurance Act 2010, we certify that to the best of our knowledge and belief and according to the information and explanation given to us, all expenses of management wherever incurred and whether incurred directly or indirectly, in respect of insurance business of the Company transacted in Bangladesh during the year under report have been duly debited to the related Revenue Account and the Statement of Comprehensive Income of the Company; and

f.

g. We certied that to the best of our indormation and as shown by its books, the company during the year under report has not paid any person any commission in any form outside Bangladesh in respect of any of its business re-insured aboard.

Dated, Dhaka March 15 , 2012

Zoha Zaman Kabir Rashid & Co. Chartered Accountants Rupayan Karim Tower Level-7, Suite # 7A, 80, Kakrail Dhaka-1000

Annual Report 2011

69

RELIANCE INSURANCE LIMITED

Statement of Financial Position


(BALANCE SHEET)
as at December 31, 2011

Particulars

Notes

2011 Taka

2010 Taka Restated*

Shareholders' Equity & Liabilities Shareholders' Equity Share Capital Reserves and Surplus Liabilities and Provisions Balances of funds and accounts Premium deposit Deferred liability for employees gratuity Unpaid Dividend Estimated liability in respect of outstanding claims whether due or intimated Amounts due to other persons or bodies carrying on insurance business Outstanding refundable premium Sundry creditors Overdrawn on current account Total Shareholders' Equity & Liabilities 7.00 156,805,649 8.00 113,584,250 9.00 10.00 6,650,982 321,339,243 10,223,367 4,530,842,514 191,711,311 4,704,726 234,134,349 113,022,373 4,605,927,373 147,329,113 5.00 6.00 3.00 4.00 3,427,522,384 410,670,000 3,016,852,384 1,103,320,130 295,985,018 153,619,029 44,733,347 379,245 3,513,067,800 304,200,000 3,208,867,800 1,092,859,573 248,661,983 117,345,093 35,571,380 379,245

* Please see note 4.00 and 13.04 The annexed notes 1 to 34 form an integral part of these nancial statements

Dated, Dhaka, March 15, 2012

Rajiv Prasad Shaha Chairman

Amanullah Chowdhury Director

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Annual Report 2011

RELIANCE INSURANCE LIMITED

Statement of Financial Position


(BALANCE SHEET)
as at December 31, 2011

Particulars Assets Non-current assets Property plant & equipments Fixed assets under construction Investments At cost Fair value adjustment Current assets Inventories Sundry Debtors (including advance, deposit and prepayments) Premium control account Interest receivable account Amount due from other persons or bodies carrying on insurance business Cash and cash equivalents Deferred tax assets Total Assets

Notes

2011 Taka 2,943,142,644

2010 Taka 3,213,120,665 539,777,612 2,673,343,053 330,361,884 2,342,981,169 1,374,433,224 6,246,702 402,954,163 82,965,797 23,914,754 66,465,913 791,885,896 18,373,484 4,605,927,373

11.00 12.00 13.00

1,400,881,905 2,555,742 1,539,704,997 351,810,145 1,187,894,852 1,576,449,716

14.00 15.00 16.00 17.00 18.00 19.00

4,817,406 491,235,284 136,179,005 32,968,113 46,447,942 864,801,966 11,250,154 4,530,842,514

* Please see note 4.00 and 13.04 The annexed notes 1 to 34 form an integral part of these nancial statements

Habibullah Khan Director

Akhtar Ahmed Managing Director & CEO

Zoha Zaman Kabir Rashid & Co. Chartered Accountants

Annual Report 2011

71

RELIANCE INSURANCE LIMITED

Statement of Comprehensive Income


(PROFIT & LOSS ACCOUNT)
for the year ended December 31, 2011 Particulars Expenses of management (Not applicable to any particular fund or account) Directors meeting attendance fees Fees and charges Advertisement and sign board Donations Subscriptions Legal and professional fees Employees welfare expenses Securities services Provision for tax deduction at source on interest Depreciation Registration fees Provision for performance bonus Audit fees Prot before tax Provision for companies income tax Deferred tax assets/liabilities Prot after tax transferred to prot & loss appropriation account Total 20.00 Notes 2011 Taka 49,199,860 644,000 855,762 5,491,520 1,840,082 1,117,456 783,334 150,000 219,450 1,136,235 19,518,755 4,383,500 12,671,016 388,750 304,965,731 84,623,330 77,500,000 7,123,330 220,342,401 354,165,592 2010 Taka 27,447,895 753,250 2,938,691 2,039,066 576,343 81,000 -346,492 7,525,900 3,643,955 9,836,708 399,475 287,235,678 69,594,997 72,500,000 (2,905,003) 217,640,681 314,683,573

Profit & Loss Appropriation Account


Particulars Reserve for exceptional losses Dividend for the year- 2010 Balance transferred to balance sheet Total Notes 4.01 2011 Taka 179,610,485 73,140,485 106,470,000 216,692,208 396,302,693 2010 Taka 132,007,397 61,807,397 70,200,000 175,960,293 307,967,690

Other Comprehensive Income


Particulars Notes 2011 Taka 2010 Taka

Weighted average no. of outstanding shares Earnings per share (Basic earnings per share-par value Tk. 10 each) The annexed notes 1 to 34 form an integral part of these nancial statements

41,067,000 5.37

30,420,000 7.15

Dated, Dhaka, March 15, 2012

Rajiv Prasad Shaha Chairman

Amanullah Chowdhury Director

RELIANCE INSURANCE LIMITED

Statement of Comprehensive Income


(PROFIT & LOSS ACCOUNT)
for the year ended December 31, 2011 Particulars Prot/(Loss) transferred from: Fire revenue account Marine revenue account Miscellaneous revenue account Interest and Dividend income Other Income 21.00 22.00 Notes 2011 Taka 194,251,315 (16,315,688) 149,746,383 60,820,619 98,755,738 61,158,539 2010 Taka 161,002,687 (4,487,583) 104,428,320 61,061,950 70,656,490 83,024,396

Total

354,165,592

314,683,573

Profit & Loss Appropriation Account


Particulars Opening balance of appropriation accounts Net Prot after tax for the year brought down Total Notes 2011 Taka 175,960,292 220,342,401 396,302,693 2010 Taka 90,327,009 217,640,681 307,967,690

Other Comprehensive Income


Particulars Prot after tax Other comprehensive income: Gain on land revaluation Changes in fair value of available-for-sale nancial assets Total Comprehensive income for the year Notes 2011 Taka 220,342,401 (305,887,817) 849,198,500 (1,155,086,317) (85,545,416) 2010 Taka 217,640,681 1,290,895,003 1,290,895,003 1,508,535,684

13.04

Habibullah Khan Director

Akhtar Ahmed Managing Director & CEO

Zoha Zaman Kabir Rashid & Co. Chartered Accountants

RELIANCE INSURANCE LIMITED

Fire Insurance Revenue Account


for the year ended December 31, 2011 2011 Taka 25,399,338 130,878,867 57,861 (104,910,673) 116,059,131 (92,149,651) (24,536,197) 100,965,401 155,602,682 (16,315,688) 2010 Taka 19,269,229 71,973,090 74,055 (62,390,628) 122,402,950 (97,866,752) (14,923,485) 99,087,828 92,564,871 (4,487,583) Particulars Claims under policies less re-insurances Claims paid during the year Paid/Adjusted on PSB Recovered/Adjusted on re-insurance ceded Claims outstanding at the end of the year Recoverable on re-insurance cedence Claims outstanding at the end of the previous year Expenses of management Commission Prot/(Loss) transferred to statement of comprehensive income Balance of account at the end of the year as shown in the statement of nancial position being reserve for unexpired risks @ 40% of premium income of the year Total 80,554,973 63,487,134 Notes

346,206,706

269,921,479

Dated, Dhaka, March 15, 2012

Rajiv Prasad Shaha Chairman

Amanullah Chowdhury Director

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Annual Report 2011

RELIANCE INSURANCE LIMITED

Fire Insurance Revenue Account


for the year ended December 31, 2011 2011 Taka 63,487,134 201,387,432 689,554,688 (14,799,759) 3,018,900 (1,883,899) 862,358 (475,364,856) 81,332,139 81,088,879 243,260 2010 Taka 34,496,906 158,717,834 612,037,374 (12,399,002) 2,911,854 (2,226,056) 8,534,547 (450,140,884) 76,706,738 79,008,685 (2,566,950) 265,003 Particulars Balance of account at the beginning of the year Premium less re-insurances Premium underwritten Premium refunded Premium on PSB Re-insurance premium on PSB Premium on re-insurance accepted Re-insurance premium ceded Commission on reinsurances Commission earned on re-insurance ceded Commission paid on re-insurance accepted Commission earned on PSB Notes

Total

346,206,706

269,921,479

Habibullah Khan Director

Akhtar Ahmed Managing Director & CEO

Zoha Zaman Kabir Rashid & Co. Chartered Accountants

Annual Report 2011

75

RELIANCE INSURANCE LIMITED

Marine Insurance Revenue Account


for the year ended December 31, 2011 2011 Taka 61,962,749 87,381,981 477,338 (402,557) (37,134,051) 144,313,014 (47,997,382) (84,675,593) 62,924,007 47,063,161 149,746,383 126,121,468 120,416,337 2010 Taka 64,611,084 58,751,315 944,955 (782,223) (26,188,623) 94,000,214 (9,324,621) (52,789,934) 41,255,584 38,418,985 104,428,320 101,248,021 98,860,694 Particulars Claims under policies less re-insurances Claims paid during the year Paid/Adjusted on PSB Recovered/Adjusted on PSB Recovered/Adjusted on re-insurance ceded Claims outstanding at the end of the year Recoverable on re-insurance cedence Claims outstanding at the end of the previous year Expenses of management Commission Prot/(Loss) transferred to statement of comprehensive income Balance of account at the end of the year as shown in the statement of nancial position being reserve for unexpired risks @ 40% of premium income of the year (Marine Cargo) as shown in the statement of nancial position being reserve for unexpired risks @ 100% of premium income of the year (Hull) Total Notes

5,705,131

2,387,327

447,817,769

349,961,995

Dated, Dhaka, March 15, 2012

Rajiv Prasad Shaha Chairman

Amanullah Chowdhury Director

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Annual Report 2011

RELIANCE INSURANCE LIMITED

Marine Insurance Revenue Account


for the year ended December 31, 2011 2011 Taka 101,248,021 306,745,973 416,011,923 (3,386,760) 11,881,608 (8,683,077) 2,549,423 (111,627,145) 39,823,775 36,856,353 1,301,642 1,665,780 2010 Taka 70,364,757 249,539,061 342,092,746 (2,431,876) 8,635,498 (4,915,454) (93,841,852) 30,058,176 27,937,461 1,217,185 903,530 Particulars Balance of account at the beginning of the year Premium less re-insurances Premium underwritten Premium refunded Premium on PSB Re-insurance premium on PSB Premium on re-insurance accepted Re-insurance premium ceded Commission on re-insurances Commission earned on re-insurance ceded Prot commission Commission earned on PSB Notes

Total

447,817,769

349,961,995

Habibullah Khan Director

Akhtar Ahmed Managing Director & CEO

Zoha Zaman Kabir Rashid & Co. Chartered Accountants

Annual Report 2011

77

RELIANCE INSURANCE LIMITED

Miscellaneous Insurance Revenue Account


for the year ended December 31, 2011 2011 Motor Taka 52,851,995 53,487,450 201,514 24,591,000 (25,427,969) 27,291,980 34,292,659 60,441,612 2011 Misc. Taka 11,827,170 15,626,696 298,985 (254,223) 535,000 (3,679,473) 34,158,227 (22,168,690) (12,689,353) 20,349,807 22,071,858 379,006 2011 Total Taka 64,679,165 69,114,146 500,499 (254,223) 535,000 (3,679,473) 58,749,227 (22,168,690) (38,117,322) 47,641,787 56,364,518 60,820,619 2010 Total Taka 53,804,451 58,406,693 124,294 115,424 (3,515,844) 60,515,651 (22,398,329) (39,443,438) 41,925,276 47,566,564 61,061,949 Particulars Claims under policies less re-insurances Claims paid during the year Paid/Adjusted on PSB Recovered/Adjusted on PSB Paid on reinsurance accepted Recovered/Adjusted on re-insurance ceded Claims outstanding at the end of the year Recoverable on re-insurance cedence Claims outstanding at the end of the previous year Expenses of management Commission Prot/(Loss) transferred to statement of comprehensive income Balance of account at the end of the year as shown in the Statement of nancial position being reserve for unexpired risks @ 40% of premium income of the year Total 70,746,103 18,562,474 89,308,577 83,926,828 Notes

245,624,350

73,190,316

318,814,666

288,285,068

Dated, Dhaka, March 15, 2012

Rajiv Prasad Shaha Chairman

Amanullah Chowdhury Director

78

Annual Report 2011

RELIANCE INSURANCE LIMITED

Miscellaneous Insurance Revenue Account


for the year ended December 31, 2011 2011 Motor Taka 68,692,987 176,865,258 181,581,496 (3,161,794) 1,046,662 (13,419) (2,587,686) 2011 Misc. Taka 15,233,841 46,406,185 124,290,367 (924,671) 13,533,248 (12,997,484) (77,495,275) 2011 Total Taka 83,926,828 223,271,443 305,871,862 (4,086,465) 14,579,910 (13,010,903) (80,082,961) 2010 Total Taka 68,527,815 209,817,069 265,450,337 (1,855,794) 15,937,800 (14,754,967) 2,086,267 (57,046,574) Particulars Balance of account at the beginning of the year Premium less re-insurances Premium underwritten Premium refunded Premium on PSB Re-insurance premium on PSB Premium on re-insurance accepted Re-insurance premium ceded Commission on reinsurances Commission earned on re-insurance ceded Prot commission Commission earned on PSB Notes

66,105 66,105 -

11,550,289 9,846,289 316,611 1,387,390

11,616,394 9,912,394 316,611 1,387,390

9,940,184 8,403,330 281,697 1,255,157

Total

245,624,350

73,190,316

318,814,666

288,285,068

Habibullah Khan Director

Akhtar Ahmed Managing Director & CEO

Zoha Zaman Kabir Rashid & Co. Chartered Accountants

Annual Report 2011

79

RELIANCE INSURANCE LIMITED

CLASSIFIED SUMMARY OF ASSETS


as at December 31, 2011 (Amount in Taka) 2011 Book Value 2010 Book Value

Sl. No. Particulars

NON CURRENT ASSETS:


Property, Plant & Equipments (a) (b) (c) (d) (e) (f) (g) (h) (i) Land Building Furniture & Fixtures Oce Equipments & IT Installation Air Coolers Vehicles Fans Electrical Equipments Telephone Installation 1,182,187,500 174,952,950 17,991,532 3,495,090 242,647 15,220,055 57,720 6,014,664 719,747 1,400,881,905 2,555,742 1,539,704,997 4,500,000 3,078,758 1,365,996,546 1,569,450 16,000,000 37,460,243 111,100,000 331,969,110 181,679,890 8,220,784 3,690,144 258,439 11,379,445 61,643 2,432,855 85,301 539,777,611 2,673,343,053 4,500,000 3,799,224 2,520,892,947 14,150,882 20,000,000 110,000,000

Sub Total Fixed Assets Under Construction Investments (a) (b) (c) (d) (e) (f) (g) Bangladesh Govt. Treasury Bond Debentures Shares of Listed Companies Shares of Unlisted Companies Orascom Bond Investment through IDLC Reliance Mutual Fund - Scheme One

Sub Total

CURRENT ASSETS
(a) (b) (c) Fixed Deposits & SND Accounts with Bank Cash in Hand & Current Account with Bank Remittance in Transit 856,082,995 8,718,971 784,679,222 3,706,674 3,500,000

Dated, Dhaka, March 15, 2012

Rajiv Prasad Shaha Chairman

Amanullah Chowdhury Director

80

Annual Report 2011

RELIANCE INSURANCE LIMITED

CLASSIFIED SUMMARY OF ASSETS


as at December 31, 2011

(contd...) (Amount in Taka) 2011 Book Value 136,179,005 2,963,225 30,004,888 491,235,284 1,081,187 3,736,219 46,447,942 1,576,449,716 2010 Book Value 82,965,797 3,887,252 20,027,502 402,954,163 912,519 5,334,183 66,465,913 1,374,433,225

Sl. No. Particulars (d) (e) (f) (g) (h) (i) (j) Premium Control Account Interest Accrued & Overdue Interest Accrued but not Due Sundry Debtors Stock of Stationery Stamps in Hand Amount Due from other persons or bodies carrying on insurance business

Sub Total Other Assets (a) Deferred Tax Assets

11,250,154 11,250,154 4,530,842,514

18,373,484 18,373,484 4,605,927,373

Sub Total Total Assets

Habibullah Khan Director

Akhtar Ahmed Managing Director & CEO

Zoha Zaman Kabir Rashid & Co. Chartered Accountants

Annual Report 2011

81

RELIANCE INSURANCE LIMITED

Statement of Cash Flows


for the year ended December 31, 2011

Particulars Cash ow from operating activities : Collection from premium & other income Payment for management expense, re-insurance and claim VAT paid TDS & VDS paid Income tax paid Cash ow from investing activities : Acquisition of xed assets Proceeds from disposal of xed assets Payment against purchase of investments Redeemption of debentures Amortization of OTBL bond Proceeds from disposal of investments Dividend received Fixed deposit encashed / (opened) Interest received Cash ow from nancing activities : Loan received Loan re-paid Interest paid against loan Net increased / (decreased) Reconciliation: Cash at the beginning of the year Cash at the end of the year

Notes

2011 Taka 126,866,680 1,964,001,376 (1,560,501,373) (196,815,701) (20,477,909) (59,339,713) 56,294,234 (35,777,464) 2,472,725 (7,870,500) 720,466 4,000,000 75,717,774 18,147,462 (59,297,300) 58,181,071 (110,244,844) (99,337,000) (10,907,844) 72,916,070 72,916,070 791,885,896

2010 Taka 109,278,478 1,370,965,770 (1,037,400,663) (183,169,619) (19,251,217) (21,865,793) (175,543,002) (195,175,389) 1,316,880 (73,310,335) 73,164,731 11,299,342 (45,825,635) 52,987,404 98,276,000 100,000,000 (663,000) (1,061,000) 32,011,476 32,011,476 759,874,420 791,885,896

19.00

864,801,966

Dated, Dhaka, March 15, 2012

Rajiv Prasad Shaha Chairman

Amanullah Chowdhury Director

Habibullah Khan Director

Akhtar Ahmed Managing Director & CEO

Zoha Zaman Kabir Rashid & Co. Chartered Accountants

82

Annual Report 2011

RELIANCE INSURANCE LIMITED

Statement of Changes in Shareholders Equity


(Amount in Taka) Total 952,445,951 1,052,086,166

for the year ended December 31, 2011

Particulars Total 718,445,951 1,052,086,166 90,327,009 -

Share Capital Retained Earnings

234,000,000 260,479,726 1,052,086,166 428,319 365,960,897 1,250,000 1,052,086,166 -

Land Revaluation Reserve 260,479,726

Reserve & Surplus Reserve for General Fair Value Capital Exceptional Reserve Reserve Reserve Losses - 428,319 365,960,897 1,250,000

234,000,000

90,327,009 1,770,532,117 2,004,532,117

70,200,000 260,479,726 2,342,981,169 1,290,895,003 61,807,397 -

(70,200,000) 217,640,680 (61,807,397) -

(70,200,000) 217,640,680 1,290,895,003

217,640,680 1,290,895,003

304,200,000

428,319 427,768,294 1,250,000 175,960,292 3,208,867,800 3,513,067,800

106,470,000 849,198,500 (1,155,086,317) 1,109,678,226 1,187,894,852 -

73,140,485

- (106,470,000) - 220,342,401 (73,140,485)

(106,470,000) 220,342,401 -

220,342,401 -

Balance as at January 1, 2010 Impact of changes in accounting policy Restated balance as at January 1, 2010 Items involved in changes in equity: Dividend / Bonus Paid Net prot after tax Appropriation made during the year Other comprehensive income Restated balance as at December 31, 2010 Items involved in changes in equity: Dividend / Bonus Paid Net prot after tax Appropriation made during the year Other comprehensive income Balance as at December 31, 2011

410,670,000

- (305,887,817) (305,887,817) 428,319 500,908,779 1,250,000 216,692,208 3,016,852,384 3,427,522,384

Annual Report 2011


Amanullah Chowdhury Director

Dated, Dhaka, March 15, 2012

Rajiv Prasad Shaha Chairman

Habibullah Khan Director

Akhtar Ahmed
Managing Director & CEO

Zoha Zaman Kabir Rashid & Co. Chartered Accountants

83

RELIANCE INSURANCE LIMITED

Notes to the Financial Statements


For the Year ended 31 December 2011

1.00

LEGAL FORM OF THE COMPANY

Reliance Insurance Ltd was incorporated as a public limited Company in Bangladesh in the year 1988 under the Companies Act 1913 (present 1994). The Company, within the stipulations laid down by Insurance Act 2010 and directives as received from Insurance Development & Regulatory Authority (IDRA) time to time, provides Non-life Insurance services. The company is listed with Dhaka Stock Exchange and Chittagong Stock Exchange as a Publicly Traded Company .The Company carries its insurance activities through thirty one branches throughout the country. 1.01 Principal activities and nature of operations

The principal activity of the company continued to be carrying on insurance business. There were no signicant changes in the nature of the principal activities of the Company during the year 2011 under review. 1.02 Date of nancial statements authorized for issue

Financial Statements of the Company for the year ended December 31, 2011 were authorized for issue on March 15, 2012 in accordance with a resolution of the Board of Directors.

2.00
2.01

SUMMARY OF SIGNIFICANT ACCOUNTING AND RELATED POLICIES


Basis of preparation

The nancial statements of the Company under reporting have been prepared under historical cost convention in a going concern concept and on accrual basis in accordance with Generally Accepted Accounting Principles and practice in Bangladesh. Disclosure of nancial information as required by Insurance Act 2010 have been complied with while preparing statement of nancial position , statement of comprehensive income and revenue accounts for specic classes of insurance business in the form set forth in the rst, second and third schedule of the Insurance Act 1938 as amended 2010 in compliance with the Companies Act 1994. In addition, the Securities and Exchange Rules 1987, Listing Regulations of Dhaka Stock Exchange Ltd. (DSE) & Chittagong Stock Exchange Ltd. (CSE), International Accounting Standards (IAS) as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), as Bangladesh Accounting Standards (BAS) have also been complied with. 2.02 Premium recognition

Premium is recognized when insurance policies are issued, but the premium of Company s share of public sector insurance business (PSB) is accounted for in the year in which the statements of account from Sadharan Bima Corporation are received. Up to 31 December 2011 statements of account for the period 01 July 2010 through 30 June 2011 have been received and, accordingly, the Company s share of PSB for that period has been recognized in these nancial statements. 2.03 Accounting estimates

Preparation of nancial statements requires Management to make judgments, estimates and assumptions that aect the application of policies and reported amount of assets and liabilities, income and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments amount carrying values of assets and liabilities that are not readily apparent from other sources.

84

Annual Report 2011

While Management believes that the amounts included in the nancial statements reect the company s best estimates and assumptions. Actual result could dier from estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions of the accounting estimates are recognized in the period in which the estimates are revised. Signicant areas requiring the use of Management estimates in these nancial statements relate to the useful life of depreciable assets and provisions for loans. However, assumptions and judgments made by Management in the application of accounting policies that have signicant eect on the nancial statements are not expected the result in material adjustment to the carrying amount of assets and liabilities in the next year. 2.04 Functional and presentation currency

The Financial Statements are presented in Bangladeshi Taka which is the Company s functional currency. 2.05 Materiality and aggregation

Each material class of similar items is presented separately in the Financial Statements. Item of a dissimilar nature or function are presented separately unless they are immaterial. 2.06 Foreign currency transaction

All foreign exchange transactions are converted to Bangladeshi Taka, which is the reporting currency, at the rate of exchange prevailing at the time the transaction were eected. Insurance contracts which were underwritten in foreign currency are converted to Bangladeshi Taka at the rate of exchange prevailing at the time of underwriting and revenue is recognized accordingly. 2.07 2.07.01 Property, plant and equipments Recognition and measurement

Property, plant and equipments are recognized if it is probable that future economic benets associated with the asset will ow to the Company and cost of the asset can be measured reliably. Items of Property, plant and equipments are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use and the cost of dismantling and removing the items and restoring the site on which they are located. Gains and losses on disposal of an item of Property, plant and equipments are determined by comparing the proceeds from disposal with the carrying amount of Property, plant and equipments. When revalued assets are sold, the relevant amount included in the revaluation reserve is transferred to retained earnings. 2.07.02 Subsequent cost

The cost of replacing a component of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benets associated with the part will ow to the Company and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. 2.07.03 Revaluations

Revaluation on freehold land and building is performed by professionally qualied valuers . The frequency of revaluations depends upon the movements in the fair values of the items of Property, plant and equipments being revalued. Usually Land and buildings are revalued every two to three years. The revaluation surplus is recognised in the net carrying amount of the assets and is transferred to revaluation reserve after restating the asset at the revalued amount. Any revaluation loss is directly recognised in the Statement of Comprehensive

Annual Report 2011

85

Notes to the Financial Statements

Income but any revaluation loss arising from an asset which has been previously recognized in the revaluation reserve is debited to the extent of any credit balance existing in the revaluation reserve in respect of that asset. 2.07.04 Depreciation

Depreciation on Property, plant & equipments are charged on straight-line method on the estimated useful lives of the assets. Depreciation on newly acquired assets except land which is not depreciated, are charged for the full year irrespective of the date of acquisition, while no depreciation is charged during the year in which assets are disposed o. Asset category wise depreciation rates are as follows: Particulars Oce Building (SPL Tower) Furniture & Fixture Motor Vehicles Oce & Electrical Equipments Miscellaneous Items 2.07.05 De-recognition 2011 05% 10% 20% 15% 20% 2010 10% 20% 15% 20%

An item of property, plant and equipment is de-recognised upon disposal or when no future economic benets are expected from its use. Any gain or loss arising on de-recognition of the asset is included in the statement of Comprehensive income in the year the asset is de-recognized. 2.07.06 Impairment of assets

The carrying amounts of the company s non nancial assets, other than deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset s recoverable amount is estimated. An impairment loss is recognized if the carrying amount of an asset or its cash generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of comprehensive income. Considering the present conditions of the assets, management concludes that there is no such indications exist. 2.08 Investment in shares

All investments of RIL are initially recognized at cost, being the fair value of the consideration given which include transaction cost and these are classied into the following categories: 2.08.01 Held to Maturity

Investments with xed maturity that the management has the intent and ability to hold to maturity are classied as held to maturity and are initially measured at cost. 2.08.02 Held for Trading

These nancial assets are acquired principally for the purpose of generating prot from short-term uctuation in prices. 2.08.03 Available for Sale

Available for sale investments are those non-derivative investments that are designated as available for sale or are not classied in any other category. These are primarily those investments that are intended to be held for an undened period of time or may be sold in response to the need for liquidity are classied as available for sale. The Company follows trade date accounting for regular way purchase and sales of investments.

86

Annual Report 2011

2.09 2.09.01

Employee benets Dened contribution plan

Company operates a provident fund, recognized by the Income Tax Authorities. Conrm employees of the Company are eligible for the said provident fund. Employees of the Company will contribute ten percent of their basic salary and the employer will make a matching contribution. The provident fund is wholly administered by a Board of Trustees and no part of the fund is included in the assets of the Company. 2.09.02 Gratuity

The Company operates a gratuity scheme under which a regular conrmed employee is entitled to benet at a graduated scale based on the length of service. The Length of service for the purpose of gratuity shall be reckoned from the date of joining in the regular service of the Company. Calculation of gratuity is made on the basis of last drawn basic salary. An employee will receive one month s basic salary for each completed year of service if he/she completed ve years & above but less than ten years of continuous services and two month s basic salary for each completed year of service if he/she completed ten years & above of continuous services. Gratuity will be payable only on their separation from the company. 2.09.03 Long service awards

On completion of ten, fteen, twenty, twenty ve and thirty years of continuous service, a conrmed employee will be entitle to an award equivalent to one month, one & half months, two months, two & half months and three months basic salary along with a certicate of recognition. 2.09.04 Other benets

In addition to the above, Reliance Insurance limited providing other benets to its employees like Performance Linked Variable Bonus ( PLV), Group Life Scheme (GLS), Group Medical Benets plan, House Building Loan Scheme and Car/Motor Cycle Loan Scheme subject to fulllment of certain terms and conditions. 2.10 2.10.01 Investment income recognition Interest and dividend

Interest on debentures, National Investment Bond and FDRs are recognized on accrual basis after making provision for income tax deductible at source. Interest on STD/SND account, cash dividend on investment in shares and other income are recognized on cash basis. For stock dividend that received by the company against its investment, number of shares increased and average cost of investment decreased. 2.10.02 Others income

Other income is recognized on an accrual basis. Net gains and losses of the revenue nature on the disposal of Property, Plant & Equipment and other non-current assets including investments have been accounted for in the Statement of Comprehensive Income, having deducted from the proceeds on disposal, the carrying amount of the assets and related selling expenses. 2.11 2.11.01 Expenses and taxes Recognition of expenses

Expenses are recognised on the basis of a direct association between the cost incurred and the earning of specic heads of income. All expenditure incurred has been charged to the Statement of Comprehensive Income in the running of the business and in maintaining the Property, plant and equipments in a state of eciency.

Annual Report 2011

87

Notes to the Financial Statements

2.11.02

Borrowing costs

Borrowing costs that are directly attributable to the acquisition and construction of a qualifying asset form part of the cost of that asset and, therefore, should be capitalised. Other borrowing costs are recognised as an expense. 2.12 Income tax

Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in the Statement of Comprehensive Income. 2.12.01 Current tax

The tax currently payable is based on taxable prots for the year. Taxable prots diers from prots as reported in the Statement of Comprehensive Income because it excludes items of income or expenses that are taxable or deductible in other year or are never taxable or deductible. Company s liability for current tax is calculated using tax rates that have been enacted the balance sheet date. 2.12.02 Deferred tax assets

Deferred tax is recognized on dierences between the carrying amounts of assets and liabilities in the nancial statements and the corresponding tax bases used in the computation of taxable prot and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary dierence. Deferred tax assets are generally recognized for all deductible temporary dierences to the extent that it is probable that taxable prots will be available against which such dierences can be utilized. Deferred tax is charged or credited to the Statement of Comprehensive Income. 2.13 2.13.01 Reserve or contingencies accounts Reserve for exceptional losses

As per Para 6 of the 4th schedule, to meet the exceptional losses, Company sets aside ten percent of the premium income of the year in which it is set aside from the balance of the prot to the Reserve for exceptional losses. 2.13.02 Land revaluation reserve

The Land revaluation surplus is transferred to revaluation reserve after restating the asset at the revalued amount. Any revaluation loss is directly recognized in the Statement Comprehensive Income but any revaluation loss arising from an asset which has been previously recognized in the revaluation reserve is debited to the extent of any credit balance existing in the revaluation reserve in respect of that asset. 2.14 Segment reporting

A business segment is a distinguishable component of the Company that is engaged in providing services that are subject to risks and returns that are dierent from those of other business segments. The Company accounts for segment reporting of operating results using the classes of business .The performance of segments is evaluated on the basis of underwriting results of each segment. The Company has four primary business segments for reporting purposes namely re, marine, motor and miscellaneous. 2.15 Earnings per share

The Company presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the prot or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. 2.16 Statement of Cash Flows

Statement of Cash Flows has been prepared in accordance with BAS -7 and the cash from the operating activities has been presented under direct method.

88

Annual Report 2011

2.17

Heads of accounts re-arranged

To comply with the International Accounting Standards and International Financial Reporting Standards as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), as Bangladesh Accounting Standards and Bangladesh Financial Reporting Standards, during the year 2011 we have re-arranged Heads of Accounts. 2.18 General

The nancial statements are prepared in Bangladeshi Taka (BDT), rounded o to the nearest taka. These are prepared on the historical cost basis and therefore, do not take into consideration the eect of ination. Previous year s gures have been rearranged, whenever necessary, to conrm the current year presentation.

3.00
Particulars

AUTHORIZED, ISSUED, SUBSCRIBED AND PAID UP CAPITAL


2011 % Taka 2,000,000,000 % 2010 Taka 500,000,000

Authorized: 200,000,000 ordinary shares of Tk.10 each Issued, subscribed and paid up: Group A-Sponsors: 1,96,32,870 ordinary shares of Tk.10 each fully paid in cash Group B-Others: 2,14,34,130 ordinary shares of Tk.10 each fully paid in cash 1) Employees 2) Bank, ICB s MF, Insurance companies, BSRS 3) ICB Investors accounts 4) General public Total

47.81

196,328,700

47.81

145,428,700

52.19 0.04 4.87 2.93 44.35 100.00

214,341,300 183,200 20,000,200 12,026,700 182,131,200 410,670,000

52.19 0.04 3.38 2.11 46.66 100.00

158,771,300 126,100 10,293,700 6,424,500 141,927,000 304,200,000

Annual Report 2011

89

Notes to the Financial Statements

Classication of shareholders by holding The distribution schedule of shareholdings as on December 31, 2011 was as under: Holdings Group-A 600,000-2,000,000 2,000,001-3,000,000 Group-B 10-5000 5,001-10,000 10001-50,000 50,001-100,000 100,001-300,000 300,001-600,000 600,001-3,000,000 Total 1,181 68 75 8 12 9 8 1,287 55 52 10 20 6 6 3.21 1.23 3.45 1.28 5.01 8.93 29.08 100 7.04 1.18 3.47 2.12 11.41 8.11 18.86 100 4 6 4 6 11.76 36.05 11.76 36.05 Number of Holders 2011 2010 Total Holding % 2011 2010

4.00
Particulars

RESERVES & SURPLUS


Notes 4.01 2011 Taka 500,908,779 428,319 216,692,208 1,250,000 1,109,678,226 13.04 1,187,894,852 3,016,852,384 Reserve for exceptional losses 2010 Taka 427,768,294 428,319 175,960,292 1,250,000 260,479,726 2,342,981,169 3,208,867,800

Reserve for exceptional Losses Capital reserve Retained earnings General reserve Land revaluation reserve Fair Value reserve Total 4.01

As per paragraph 6 of the Fourth Schedule of Income Tax Ordinance 1984, as earlier, for the year 2011, 10% of the net premium was transferred to reserve for exceptional losses. Details calculation as under: Particulars Opening Balance Add: Provision made for the year 2011(10% of net premium Tk.731,404,848.00) Total 2011 Taka 427,768,294 73,140,485 500,908,779 2010 Taka 365,960,897 61,807,397 427,768,294

90

Annual Report 2011

4.02

Land revaluation reserve

During the 2011 Company revalued its land situated at Bir Uttam A. K. Khandker Sarak, C.W.S (C) 11, Gulshan 1, Dhaka 1212 from Tk. 332,989,000 to Tk.1,182,187,500. An amount of Tk. 849,198,500 was transferred to land revaluation reserve through other Comprehensive income.

5.00

BALANCE OF FUNDS AND ACCOUNTS

Balance of fund and account consist as follows: Business Fire Insurance Business Marine Insurance Business Misc. Insurance Business Total 2011 Taka 80,554,973 126,121,468 89,308,577 295,985,018 2010 Taka 63,487,134 101,248,021 83,926,828 248,661,983

6.00

PREMIUM DEPOSIT

The above mentioned amount includes premium received against cover notes for which policies have not been issued within 31st December 2011. While the risks against non-marine and marine hull have been assumed from the issuance of cover notes, risks against marine cargo have not been assumed until shipment advices are provided and accordingly, policies are issued. The class wise summary of the premium deposit is as follows: Business Fire Marine cargo Miscellaneous Total 2011 Taka 13,832,392 139,588,577 198,060 153,619,029 2010 Taka 12,052,529 105,222,004 70,560 117,345,093

7.00
Business Fire

ESTIMATED LIABILITY IN RESPECT OF OUTSTANDING CLAIMS WHETHER DUE OR INTIMATED


2011 Taka 23,909,480 95,741,117 574,515 24,591,000 11,989,537 156,805,649 2010 Taka 24,536,197 84,542,713 132,881 25,427,969 12,689,353 147,329,113

Marine cargo Marine hull Motor Miscellaneous Total

All the claims against which the Company received intimations within 31st December 2011 have been taken into consideration while estimating the liability in respect of outstanding claims.

Annual Report 2011

91

Notes to the Financial Statements

8.00
Particulars

AMOUNT DUE TO OTHER PERSONS OR BODIES CARRYING ON INSURANCE BUSINESS


2011 Taka 19,809,987 88,418 2,696,143 90,989,702 113,584,250 2010 Taka 72,667,966 88,418 3,911,193 104,094,002 10,949,732 191,711,311

Co-insurance premium payable Co-insurance salvage payable Green Delta Insurance Co. Ltd. for reinsurance ceded Sadharan Bima Corporation for reinsurance ceded Portfolio loss withdrawal / transfer ceded Total

9.00
Business Fire

OUTSTANDING REFUNDABLE PREMIUM


2011 Taka 4,668,563 1,720,240 180,595 2,026 79,558 6,650,982 2010 Taka 2,992,127 1,545,259 105,000 20,465 41,875 4,704,726

Marine cargo Marine hull Motor Miscellaneous Total

10.00
Particulars

SUNDRY CREDITORS
2011 Taka 235,125 520,000 29,843,111 (4,204,137) 26,029,965 3,728,869 14,069,279 268,246 17,883,227 203,060,990 50,754 173,237 3,185,118 28,003 0 26,277,041 190,415 321,339,243 2010 Taka 235,125 520,000 6,505,226 (4,300,624) 12,362,897 1,749,284 27,038,420 31,621 12,366,331 167,226,046 181,985 (744,145) 2,048,883 16,847 113,500 8,704,961 77,992 234,134,349

Statutory Audit fee Special Audit fee Premium received in advance VAT payable Bills payable Tax payable on misc. items VAT payable on money receipt VAT payable on misc. items Insurance stamps on deposit premium Provision for income tax ( Note 20.00) Employees income tax (Short)/Excess collection of premium Liability for income tax deductible at source Installment audio - video A/C (Transcom) Earnest money Agency commission payable Deposit against cancel document Total

92

Annual Report 2011

11.00

PROPERTY, PLANT AND EQUIPMENTS

Assets

Land & Building Computers Total

Motor Vehicle & Bicycle Furniture & Fixtures Telephone Installation Software Installation Signboard & Hoarding

Oce & Electrical Equipments

Cost 30,780,289 9,327,500 3,580,843 36,526,946 25,228,168 15,587,727 10,127,218 1,675,429 3,370,338 7,910,114 477,345 3,527,920 2,429,625 1,015,580 14,626,027 5,063,945 988,900 714,350 18,512,255 11,001,127 12,666,238 3,390,704 3,370,338 1,015,580 594,385,531 883,420,222 17,925,847 1,459,879,906

Balance at 01.01.2011

513,649,000

Additions -

852,699,500

Disposals/ adjustments

Balance at 31.12.2011

1,366,348,500

Accumulated Depreciation 5,364,860 3,458,813 21,306,891 7,236,636 8,825,680 7,083,200 5,386,587 443,007 3,489,330 2,350,936 955,682 2,331,752 1,419,954 1,036,843 155,280 19,400,844 10,291,471 7,848,733 9,535,687 3,151,338 3,370,321 3,370,321 1,009,525 2,016 1,011,541 54,607,919 19,518,755 15,128,673 58,998,001

Balance at 01.01.2011

Charge for the year -

9,208,050

Disposals/ Adjustments

Balance at 31.12.2011

9,208,050

Carrying Amount 17,991,532 8,220,784 3,152,394 6,762,047 3,044,018 3,130,551 719,747 239,366 17 17 4,039 6,055 1,400,881,905 539,777,612

Balance at 31.12.2011

1,357,140,450 15,220,055

Balance at 31.12.2010

513,649,000 11,379,445

Annual Report 2011

93

Notes to the Financial Statements

12.00

FIXED ASSETS UNDER CONSTRUCTION

Fixed assets under construction are stated at cost. These are expenses of a capital nature directly incurred in property, plant and equipment, waiting for capitalization.

13.00

INVESTMENTS

The investments comprise the following: SL. # 1 2 3 Investment Classication Held to Maturity Held for Trading Available for Sale Total 13.01 Held to Maturity Notes 13.01 13.02 13.03 2011 Taka 23,578,758 37,460,243 1,478,665,996 1,539,704,997 2010 Taka 28,299,224 2,645,043,829 2,673,343,053

Investments with xed maturity that the management has the intent and ability to hold to maturity are classied as held to maturity. During the year 2011 Company hold the following investments: SL. # 1 2 3 Particulars OTBL Bond BD Govt. Treasury Bond (5 yrs) 14% Debenture-Beximco Textiles Total 13.02 Held for Trading 2011 Taka 16,000,000.00 4,500,000.00 3,078,758.00 23,578,758.00 2010 Taka 20,000,000.00 4,500,000.00 3,799,224.00 28,299,224.00

These nancial assets are acquired principally for the purpose of generating prot from short-term uctuation in prices. Company appointed IDLC Finance Limited as portfolio manager to deal with held for trading securities and paid Tk.4.5 crore up to December 31, 2011.As per IDLC statement value of securities as of 31st December 11 was Tk.3.746 crore. So Tk.0.754 crore was recognized as loss in the accounts. 13.03 Available for Sale

As of December 31, 2011 Company designated the following shares as available for sale: SL. # 1 2 3 4 5 6 7 8 9 Name of the Company IDLC BD Ltd. National Housing & Finance Ltd. * Central Depository BD Ltd. Standard Bank Ltd. Bank Asia Ltd. Uttara Bank Ltd. National Bank Ltd. Mercantile Bank Ltd. One Bank Ltd. Value at cost 31/12/2011 86,762,760.00 24,621,800.00 1,569,450.00 803,952.00 577,500.00 4,315,930.00 59,978.00 1,276,953.00 1,259,432.00 Fair Market value 31/12/2011 959,805,000.00 263,601,822.00 1,569,450.00 2,422,946.00 7,020,014.00 6,068,400.00 2,220,899.60 8,650,584.00 11,333,997.00 Value at cost 31/12/2010 86,762,760.00 24,621,800.00 4,416,700.00 803,952.00 210,000.00 323,385.00 59,978.00 1,276,953.00 1,259,432.00 Fair Market value 31/12/2010 1,952,160,000.00 305,244,914.00 4,416,700.00 4,049,128.00 9,005,465.00 5,976,000.00 3,266,780.00 11,828,268.00 17,690,820.00

94

Annual Report 2011

SL. # 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Name of the Company Pubali Bank Ltd. Southeast Bank Ltd. The City Bank Ltd. Prime Bank Ltd. Square Pharmaceuticals Ltd. GrameenPhone Ltd. Malek Spinning Mills Ltd. Ocean Containers Ltd. RAK Ceramics (BD) Ltd. Khulna Power Co. Ltd. Niloy Cement Ltd. Maq Enterprise Ltd. Standard Ceramic BGIC Karnaphuli Insurance Co. Ltd. MI Cement Co. Ltd. MJL BD Ltd. (Mobil) BSRM Ltd. Grameen Mutual Fund:Scheme 2 ICB Employees Mutual Fund IBBL Bond RIL Mutual Fund:Scheme One Total

Value at cost 31/12/2011 10,491,938.00 9,847,873.00 2,832,017.00 865,920.00 18,058,085.68 5,945.00 360,864.00 7,840,125.00 3,100.00 3,800.00 0.00 0.00 0.00 37,720.80 1,264,080.00 6,796,028.14 1,115,892.00 110,000,000.00 290,771,143.62

Fair Market value 31/12/2011 7,205,436.00 6,068,160.00 2,051,400.00 660,825.00 77,121,517.00 3,690.40 648,289.60 3,497,834.40 3,100.00 3,800.00 3,501.00 1,133.90 12,072.00 50,388.00 1,262,736.00 5,935,000.00 344,000.00 111,100,000.00

Value at cost 31/12/2010 4,623,450.00 9,847,873.00 2,832,017.00 2,375,656.00 15,858,200.00 10,000,000.00 5,945.00 360,864.00 7,840,125.00 3,100.00 3,800.00 0.00 0.00 0.00 3,608,921.00 6,125,261.00 4,640,000.00 1,115,892.00 3,086,596.00 110,000,000.00

Fair Market value 31/12/2010 4,940,400.00 10,085,040.00 3,000,000.00 75,691,302.00 52,674,940.00 40,160,000.00 5,904.00 1,290,089.00 5,226,329.00 3,100.00 3,800.00 3,413.00 770.00 19,600.00 3,608,921.00 6,125,261.00 14,894,400.00 692,000.00 2,980,485.00 110,000,000.00 2,645,043,829.00

1,478,665,995.90 302,062,660.00

* Investment in shares that do not have any quoted market price in the active market and whose fair value can not be measured reliably, were recognized at cost. 13.04 Particulars Fair value of the investment Less: Cost price of the investment Fair value reserve at December 31,2011 Less: Fair value reserve at Jan 1 Fair value adjustment for the year Changes in fair value of the available for sale nancial assets 2011 Taka 1,478,665,996 290,771,144 1,187,894,852 2,342,981,169 (1,155,086,317) 2010 Taka 2,645,043,829 302,062,660 2,342,981,169 1,052,086,166 1,290,895,003

In compliance with the BAS: 39 Financial Instruments: Recognition and Measurement, investment made in the shares of the dierent companies is recorded at fair value which was earlier recorded at cost. As a consequence of adopting BAS :39, the value of the investments have been re-stated in the prior years. Dierence between fair market value and cost price transferred to Fair value reserve account.

Annual Report 2011

95

Notes to the Financial Statements

14.00

INVENTORIES

Inventories comprise as follows: Particulars Postage stamps Insurance stamps Stationeries Total 2011 Taka 1,260 3,734,959 1,081,187 4,817,406 2010 Taka 3,505 5,330,678 912,519 6,246,702

15.00
Particulars

SUNDRY DEBTORS (INCLUDING ADVANCES, DEPOSITS AND PREPAYMENTS)


2011 Taka 14,485,200 0 1,242,764 972,400 222,278,222 48,329,775 5,390,954 5,879,555 192,656,414 61,386,276 131,270,138 491,235,284 2010 Taka 0 424,032 1,373,308 800,400 151,666,192 20,182, 718 45,098,,972 183,408,541 69,495,264 113,913,277 402,954,163

Advance against Oce Space purchase ( Agrabad, Chittagong) VAT collectible on outstanding premium Insurance stamps collectible on outstanding premium Security deposit Advance against expenses, tax, rent, salary etc. Advance commission against cover notes Advance against registration cost-SPL Tower Receivable Amount Collection control account: For premium on policies For premium on cover notes Total

Out of the total amount Tk.192,656,414.00 mentioned above, Tk.145,801,153.00 was realized within 29th February 2012.

16.00
Business Fire

PREMIUM CONTROL ACCOUNT


2011 Taka 63,319,691 20,668,532 45,053,206 7,137,576 136,179,005 2010 Taka 21,886,249 21,763,971 30,599,772 8,715,805 82,965,797

Marine ( cargo and hull ) Motor Miscellaneous Total

Out of total outstanding Tk.136,179,005 of 2011 as mentioned above, Tk 67,848,934 was realized by 29th February 2012

96

Annual Report 2011

17.00
Particulars

INTEREST RECEIVABLE ACCOUNT


2011 Taka 2,963,225 1,116,938 1,846,287 30,004,888 30,004,888 32,968,113 2010 Taka 3,887,252 2,445,043 1,442,209 20,027,502 980,877 19,046,625 23,914,754

Accrued and overdue: Debentures of Beximco Textiles Limited Fixed Deposits Accrued but not due: National Investment Bond Fixed Deposits Total

18.00
Particulars

AMOUNT DUE FROM OTHER PERSONS OR BODIES CARRYING ON INSURANCE BUSINESS


2011 Taka 1,453,490 35,560,168 9,434,284 9,434,284 46,447,942 2010 Taka 1,704,429 35,367,530 22,289,489 22,984,991 (695,502) 7,104,465 66,465,913

Sundry co-insurance claims recoverable Co-insurance premium recoverable (including refund) Sadharan Bima Corporation For reinsurance acceptance For PSB premium For P/F Premium/Loss on acceptance Total

19.00
Particulars

CASH AND CASH EQUIVALENTS


2011 Taka 270,079 864,531,887 718,045,650 138,037,345 8,448,892 864,801,966 2010 Taka 516,564 791,369,332 658,748,350 125,930,872 3,190,110 3,500,000 791,885,896

Cash in hand Cash at bank Fixed deposits SND accounts Current accounts Remittances in transit Total

Under Rule 4A(5) of the Insurance Rules, 1958, xed deposit receipts amounting to Tk. 30,000,000 including statutory deposit of Tk. 4,500,000 cannot be en-cashed without prior permission from IDRA.

Annual Report 2011

97

Notes to the Financial Statements

20.00
Particulars

PROVISION FOR INCOME TAX


2011 Taka 167,226,046 77,500,000 (33,490,876) 211,235,170 (8,174,180) 203,060,990 77,500,000 7,123,330 84,623,330 2010 Taka 116,236,384 72,500,000 (14,087,043) 174,649,341 (7,423,295) 167,226,046 72,500,000 (2,905,003) 69,594,997

Balance as on 1st January 2011 Add: Provision made during the year Less: Payment & adjustment Less: Tax deducted at source for 2010 transferred to advance tax Balance at 31st December 2011 Total Tax Current Tax (as above ) Deferred Tax Liabilities Total

21.00
Particulars

INTEREST & DIVIDEND INCOME


2011 Taka 69,796,647 3,509,663 166,623 185,850 22,635,455 2,461,500 98,755,738 2010 Taka 52,987,404 4,014,744 382,500 0 11,299,342 1,972,500 70,656,490

Fixed Deposit SND Accounts 3 Years National Investment Bond 5-years Bangladesh Government Treasury Bond Dividend on shares Interest on OTBL Bond Total

22.00
Particulars

OTHER INCOME
2011 Taka (297,482) 56,840,690 3,540,221 1,075,110 61,158,539 2010 Taka 1,304,097 79,641,867 1,250,075 828,357 83,024,396

Prot on sale of assets Prot on sale of shares Service charges income (net) Sundry income Total

98

Annual Report 2011

23.00

AUDIT FEES

Annual audit fees include the following Particulars Annual audit fee (including VAT) Special audit fee (including VAT) Total 2011 Taka 258,750 130,000 388,750 2010 Taka 235,125 164,350 399,475

24.00
24.01

EARNINGS PER SHARE


Basic Earnings Per Share

The Company calculates Earnings Per Shares (EPS) in accordance with BAS 33: Earnings Per Share, which has been shown on the face of the income statement and this has been calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding for the year. Details calculations were as follows: Particulars Earnings attributable to ordinary shareholders ( Net prot after taxation and Provision) Ordinary Shares at 1st January Bonus Shares Issued Weighted Average number of ordinary Shares outstanding during the year Restated Weighted Average number of ordinary Shares Basic earnings Per share 2011 Taka 220,342,401 30,420,000 10,647,000 41,067,000 41,067,000 5.37 2010 Taka 217,640,681 23,400,000 7,020,000 30,420,000 41,067,000 5.30

Earning Per Share in 2010 was Tk. 71.55 while restating EPS of 2010 as per BAS 33, an adjustment has been given for 10,647,000 bonus shares in 2011. 24.02 Diluted Earnings Per Share

Diluted earnings per share reects the potential dilution that could occur if additional ordinary shares are assumed to be issued under securities or contracts that entitle their holders to obtain ordinary shares in future, to the extend such entitlement is not subject to unresolved contingencies. At 31st December 2011, there was no scope for dilution and hence no dilution EPS is required to be calculated.

25.00

TRANSACTIONS WITH RELATED PARTIES

Reliance insurance, in normal course of business, carried out a number of transactions with other entities that fall within the denition of related party contained in Bangladesh Accounting Standard 24: Related Party Disclosures. All transactions involving related parties arising in normal course of business are conducted on an arm s length basis at commercial rates on the same terms and conditions as applicable to the third parties. Details of transactions with related parties and balances with them as at December 31, 2011 were as follows:

Annual Report 2011

99

Notes to the Financial Statements

Name of the related party Kumudini Welfare Trust of Bengal (BD) Ltd. and related Companies Meenhar Fisheries Ltd. and related companies Rangs Limited and related companies Transcom Ltd. and related Companies Total

Relationship

Nature of transaction

Premium Earned in 2011

Premium Outstanding up to 31.12.2011

Amount Realized Subsequently

Claim paid in 2011

Common Director Common Director Common Director Common Director

Insurance

482,060

171,460

148,255

17,739

Insurance Insurance Insurance

6,369,308 60,661,055 157,814,136 225,326,559

1,985,580 46,760,670 4,653,168 53,570,878

1,945,705 16,284,024 4,392,120 22,770,104

3,584,488 12,070,860 30,849,081 46,522,168

26.00

CONTINGENT LIABILITY

There is dispute on claims amounting to Tk. 61,598,701 which has not been admitted by the company. Additionally cases, both in lower and superior courts, by or against the company were pending in respect of insurance claims; net eects of which, it is believed, will not materially aect the nancial statements.

27.00

NUMBER OF EMPLOYEES ENGAGED

The number of employees engaged for whole year who received a total remuneration of Tk. 36,000 and above per annum was 326.

28.00

MANAGEMENT EXPENSES

Management expenses as charged to Revenue Accounts amounting to Tk. 211,531,195 represents 14.87% of the gross premium of Tk.1,422,057,688 and 28.91% of net premium of Tk. 731,404,848 in 2011. Moreover, an amount of Tk. 10,544,403 was paid to the Directors and Managing Director & CEO as fees and remuneration.

29.00

COMPENSATION

No compensation was allowed to the Chief Executive Ocer of the Company or any member of the Board for any special services rendered except as noted in note 28.

30.00

CLAIMS

The Company had no claim against it which has not been acknowledged as debt at the balance sheet date.

31.00

CREDIT FACILITY

There was no credit facility as on 31st December 2011 availed by the Company under any contract other than trade credit available in the course of business.

100

Annual Report 2011

32.00

HEAD OFFICE & BRANCH OFFICES

The registered oce of the Company is located at Shanta Western Tower, Level-5, Space No. 503 & 504, 186, Tejgaon Industrial Area, Dhaka-1208, Bangladesh. The Company carries its insurance activities through 31 (thirty One) branches throughout the country.

33.00

CREDIT RATING REPORT

Credit Rating Information and Services Limited (CRISL) has upgraded the Claim paying ability (CPA) rating of the Company to AA ( Pronounced as double A) from previous rating of AA- (Pronounced as Double A Minus) based on the audited nancial statements up to December 31, 2010.

34.00

POST BALANCE SHEET EVENTS

Board of Director has recommended 15% cash and 15% stock dividend for the year ended December 31, 2011.

Dated, Dhaka, March 15, 2012

Rajiv Prasad Shaha Chairman

Amanullah Chowdhury Director

Habibullah Khan Director

Akhtar Ahmed Managing Director & CEO

Zoha Zaman Kabir Rashid & Co. Chartered Accountants

Annual Report 2011

101

Quarterly Analysis 2011


Particulars 1st Quarter Jan-Mar 11 Taka Net premium income Net R/I Commission earned Add : Investment & other income Total income M. Expenses-allocable M. Expenses-unallocable Total expenses Net prot before tax Provision for income tax Net prot after tax Number of Share Outstanding Earnings per share (EPS) 164,534,283 23,705,713 23,947,133 212,187,129 112,419,623 9,660,088 122,079,711 90,107,418 20,000,000 70,107,418 41,067,000 1.71 2nd Quarter Apr-Jun 11 Taka 199,138,856 40,440,809 36,417,604 275,997,269 233,270,400 18,644,237 251,914,637 24,082,632 4,000,000 20,082,632 41,067,000 0.49 3rd Quarter Jul-Sep 11 Taka 124,704,303 39,574,506 66,567,539 230,846,348 151,082,525 7,569,334 158,651,859 72,194,489 18,500,000 53,694,489 41,067,000 1.31 4th Quarter Oct-Dec 11 Taka 243,027,406 29,051,280 32,982,001 305,060,687 173,153,294 13,326,201 186,479,495 118,581,192 42,123,330 76,457,862 41,067,000 1.86 Total Jan-Dec 11 Taka 731,404,848 132,772,308 159,914,277 1,024,091,433 669,925,842 49,199,860 719,125,702 304,965,731 84,623,330 220,342,401 41,067,000 5.37

102

Annual Report 2011

Useful Information for the Shareholders


THE HISTORY OF RAISING OF SHARE CAPITAL OF RELIANCE INSURANCE LIMITED
One of the prime objectives of Reliance Insurance limited is to provide consistently good return to its shareholders. Below are the dividend and capital raising history. From the history it may be observed that company has been maintained a stable and attractive dividend policy in line with the sound underwriting and investment results. The Company has also adhered to a policy of timely preparation of its Accounts and holding of AGM, as may be noted from the Financial calendar below: Date 1988 1995 2003 2004 2005 2007 2008 2009 2010 2011 (Proposed) Particulars As per MOA & AOA Initial Public Oerings 50% Bonus shares 33.33% Bonus shares 25% Bonus shares 20% Bonus shares 30% Bonus shares 30% Bonus shares 35% Bonus Shares 15% Bonus & 15% Cash No. of Shares 3,00,000 3,00,000 3,00,000 3,00,000 3,00,000 3,00,000 5,40,000 7,02,000 10,64,700 61,60,050 Value in Taka 3,00,00,000 3,00,00,000 3,00,00,000 3,00,00,000 3,00,00,000 3,00,00,000 5,40,00,000 7,20,00,000 10,64,70,000 6,16,00,500 Cumulative Paid-up-capital 3,00,00,000 6,00,00,000 9,00,00,000 12,00,00,000 15,00,00,000 18,00,00,000 23,40,00,000 30,42,00,000 41,06,70,000 47,22,70,500

financial calendar
2009 Announcement of 2008 nal results Record date Annual report 2008 dispatched 21st Annual General Meeting Transfer of Stock dividend 2008 to BO Accounts Dispatch of sales proceeds of fractional shares 9 May 2009 28 May 2009 31 May 2009 15 June 2009 15 July 2009 2012 25 July 2009 Announcement of 2011 nal results Record date 2010 Announcement of 2009 nal results Record date Annual report 2009 dispatched 22nd Annual General Meeting Transfer of Stock dividend 2009 to BO Accounts Dispatch of sales proceeds of fractional shares 29 April 2010 17 May 2010 25 May 2010 12 June 2010 4 July 2010 14 July 2010 Annual report 2011 dispatched 24th Annual General Meeting 15 March 2012 29th March 2012 15 April 2012 30 April 2012 Announcement of 2010 nal results Record date Annual report 2010 dispatched 23rd Annual General Meeting 2011 22 March 2011 4th April 2011 13 April 2011 30 April 2011

Annual Report 2011

103

104

Annual Report 2011

Annual Report 2011

105

Corporate milestones
Incorporation of the Company Certicate of Commencement of Business License issued for operating the rst Branch Signing of First Insurance business Received consent from SEC for issuance of public share of BDT 30 million Publication of prospectus Listed with Dhaka Stock Exchange Limited Subscription Opened Subscription Closed First Trading of Shares on Dhaka Stock Exchange Limited Listed with Chittagong Stock Exchange Limited First Trading of Shares on Chittagong Stock Exchange Limited First Dividend Declared in the AGM 30% Cash Purchase of Land for the Company Issuance of rst Bonus Share (For the year 2003) 50% Stock & 10% Cash Agreement sign with CDBL Completion of 20 Years of Service Purchase of Oce Premises for the Company Received of 10th ICAB National Award (Second Position) for Best Published Accounts and Reports 2010 Shifting Registered Oce Received 11th ICAB National Award (First Position) for Best Published Accounts and Reports 2011 Received HR Award 2010 Presented by Institute of Personnel Management Received Certicate of Merit for Best Presented Accounts and Corporate Governance Disclosure Awards 2010 from SAFA Received ICMAB Second Best Corporate Awards 2010 20.03.1988 22.03.1988 21.04.1988 21.04.1988 12.04.1995 01.05.1995 08.05.1995 16.05.1995 25.05.1995 17.07.1995 10.10.1995 04.11.1995 18.06.1996 27.03.2002 28.05.2004 31.08.2004 20.03.2008 18.05.2010 19.12.2010 06.03.2011 04.10.2011 15.10.2011 29.11.2011 12.12.2011

106

Annual Report 2011

Branch NETWORK
LOCAL OFFICE MOULVI BAZAR BANGSHAL MOTIJHEEL KAWRAN BAZAR NEW MARKET BIJOYNAGAR MOHAKHALI UTTARA MOGH BAZAR MYMENSINGH COMILLA NARAYANGANJ BOGRA PABNA RANGPUR DINAJPUR NARSHINGDI AGRABAD KHATUNGONJ JUBILEE ROAD BDBL Building (Level-18), 8 RAJUK Avenue Dhaka-1000 Phone : T&T: 9567828, Mobile : 01711-593726 31/32, Moulvi Bazar Road, Dhaka-1100 Phone : T&T: 7315489, Mobile : 01713-440983 Eastern Bank Building (3rd Floor), 68, Shahid Nazrul Islam Sarani, North South Road, Bangshal, Dhaka-1100, Phone : T&T: 9556225, Mobile: 01713-010695 Rahman Chamber (2nd Floor) 12-13, Motijheel C/A, Dhaka 1000 Phone : T&T: 9567827, 7162313, Mobile : 01711-542452 BSEC Bhaban (3rd Floor) 102 Kazi Nazrul Islam Avenue, Kawran Bazar Dhaka-1215, Phone : T&T: 9112468, 8110455, Mobile : 01713- 440980 Khan Plaza (2nd Floor), 32/1, Mirpur Road, Dhaka-1205, Phone : T&T: 9669449, Mobile : 01713-440981 Akram Tower (6th Floor), 15/5, Bijoynagar, Dhaka-1000 Phone : T&T: 9341832, Mobile : 01711-593727 M.H.B. Bhaban (2nd Floor), 94, Mohakhali C/A, Dhaka-1212 Phone : T&T: 9886872, Mobile : 01678-029431 H.M. Plaza (8th Floor), Plot No. 34, Road No-2, Sector-3, Uttara, Dhaka -1230, Phone : T&T: 8956076, Mobile : 01713-031255 Gulfesha Tower (12th Floor), 69 Circular Road, Mogh Bazar, Dhaka-1217 Phone : T&T: 9332798, Mobile: 01755-550215 19, G. K. M. C. Saha Raod, (2nd Floor), Chotto Bazar, Mymensingh Phone : T&T: 091-52432, Phone : 01711-631087 163/149, Chati Patty, Rajgonj, Comilla-3500 Phone : T&T: 081-69617, Mobile : 01713-440988 71, B.B. Road, Narayangonj-1400 Phone : T&T: 7631962, Mobile : 01713-440982 Jhaotalabazar, Bogra-5800 Phone : T&T: 051-65828, Mobile : 01713-440994 Trac More, (1st Floor), A. Hamid Road, Pabna 6600 Phone : T&T: 0731-66073, Mobile : 01713-440958 Station Road, Rangpur-5400 Phone: T&T: 0521-63221, Mobile: 01713-440996 Charu Babur More, Khettri Para, Dinajpur-5200 Phone : T&T: 0531-63308, Mobile : 01713-440995 C & B Road, Narshingdi-1600 Phone : T&T: 9462677, Mobile: 01730-000778 58 Agrabad C/A, Chittagong- 4100 Phone : T&T: 031-712221, Mobile : 01713-440987 304, Khatungonj, Chittagong-4000 Phone : T&T: 031-615105, Mobile : 01713-106641 175, Jubilee Road, Chittagong -4000 Phone : T&T: 031-616506, Mobile : 01713-100891

Annual Report 2011

107

Branch Network

COX S BAZAR KHULNA JESSORE KUSHTIA MADARIPUR FARIDPUR RAJSHAHI THAKURGAON SIRAJGONJ SYLHET

1065, Bazar Ghata Main Road, Cox s Bazar-4700 Phone : T&T: 0341-64892, Mobile : 01713-440989 141, Sir Iqbal Road , Khulna-9000 Phone : T&T: 041-725475 Mobile : 01730-033001 7, N.S.C. Garikhana Road, Jessore-7400 Phone : T&T: 0421-68523, Mobile : 01713-440990 Lovely Tower, 55/1, N.S. Road, Kushtia 7000 Phone : T&T: 071-71384, Mobile : 01713-400508 Amin Super Market, Main Road, Madaripur- 7900 Phone : T&T: 0661- 61510, Mobile : 01713-014856 89/A, Mujib Sarak, Alipur, Faridpur-7800 Phone : T&T: 0631-64118, Mobile : 01711-430375 Kaimon Plaza, Mia Para, New Natore Road, Rajshahi-6000 Phone : T&T: 0721-773364, Mobile : 01713-209667 S.M. Ali Road, Thakurgaon-5100 Phone: T&T: 0561-52323, Mobile : 01713-440997 S.S. Road, Sirajgonj-6700 Phone : T&T: 0751-63350, Mobile : 01713-440998 Karimullah Market (5th Floor), Bandar Bazar, Sylhet-3100 Phone : T&T: 0821-724767, Mobile : 01713-440999

108

Annual Report 2011

shareholders note

Annual Report 2011

109

shareholders note

110

Annual Report 2011

Registered Office: Shanta Western Tower (Level-5), 186, Tejgaon I/A, Dhaka-1208

Proxy Form
I/We........................................................................................................................................................................................................................................................................................................................... of .................................................................................................................................................................................................................................................................................................................................. being a member of Reliance Insurance Limited do hereby appoint Mr./Mrs./Miss ..........................................................................................................
........................................................................................................................ ........................................................................

or (failing him/her) Mr./Mrs./Miss ..........................................................................................................

as my/our proxy, to vote for me/ us and on my/our behalf at the Twenty Fourth

Annual General Meeting of the Company to be held on 30th April 2012 and at any adjournment thereof or at any ballot to be taken in consequence thereof. Signed this ........................................................................................................................ day of April 2012

...........................................................................................

Signature of Proxy Folio/BO No........................................................................ N.B.: IMPORTANT: 1.

Revenue Stamp Tk. 10.00

................................................................................................

Signature of Shareholder Folio/BO No............................................................

This form of proxy, duly completed, must be deposited at least 72 hours before the meeting at the Company's Registered Oce. Proxy is invalid if not signed and stamped as explained above. Signature of the shareholder and the proxy should agree with the specimen signature registered with the Company.

2.

Registered Oce: Shanta Western Tower (Level-5), 186, Tejgaon I/A, Dhaka-1208

Attendance Slip
I hereby record my attendance at the TWENTY FOURTH ANNUAL GENERAL MEETING of the Company being held today, 30th April 2012, La-Vita Hall, Lake Shore Hotel, House # 46, Road # 41, Gulshan-2, Dhaka-1212, Name of Member/Proxy ................................................................................................................................................................................................................................................................... Register Folio/Bo No. ................................................................................................................................ holding .......................................................................................... share(s)

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N.B.: Please present this slip at the Reception Desk.

Signature

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