Shaping The Future The Tangram The theme of our Annual Report 2019 is ‘Shaping The Future’. We have used a Tangram to illustrate this theme. The Tangram is an ancient Chinese puzzle said to have been invented 4,000 years ago during the Song Dynasty. The Tangram puzzle consists of seven flat shapes, called tans. These different pieces can be reconfigured to form various shapes. The puzzle helps develop creative thinking skills as one uses imagination to make different patterns from the given seven geometrical pieces. This is much like how we at EFU work. Our core competencies bound by a common vision, come together in different ways, demonstrating creativity and flexibility to piece together winning strategies and help shape the company’s future. EFU GENERAL INSURANCE LTD ISO 9001: 2015 Certified efuinsurance.com Access to Reports and Enquiries 45 Decisions taken at the last Indicators and Performance Measures 96 Security Clearance of a Foreign Director 62 46 Adherence to the International Annual General Meeting held on April 23, 2019 Internal Control Framework 65 Sensitivity Analysis of Company's Profitability 84 78 22 Integrated Reporting Framework (IR) Directors Profile Investors Grievance Policy 45 Sensitivity to the Fluctuation 98 67 85 Analysis of Financial Statements Directors' Remuneration Policy IT Governance Policy 64 in Foreign Currency Exchange Rate 77 47 Analysis of Prior Period's Forward Looking Disclosure Directors' Report to the Members on Key Financial Data 86 Share Price Analysis 178 47 Analysis of Variation in Consolidated Financial Statements (English & Urdu) Key Financial Highlights 2019 04 Share Price Sensitivity Analysis 102 61 Results Reported in Quarterly Accounts Directors' Training and Orientation Key Measures for Key Performance Indicators (KPIs) 75 Shariah Compliance 109 101 66 Annual Shari’ah Review Report DuPont Analysis Key Sources of Estimating Uncertainty 83 Mechanism for Window Takaful Operations 96 29 Anti-money Laundering and Economic Value Added Liquidity Management Strategy 76 Significant Changes From Last Year Countering of Terrorism Financing Policy 66 38 76 EFU’s Culture Looking Ahead 19 Significant Changes in Assets & Liabilities Assumptions in Compiling Indicators 96 69 62 Employment of Special Persons Management 32 Significant Changes in Board Committees 63 68 25 Avoiding Actual and Perceived Conflict of Interest Energy Conservation Management Committees 62 Significant Changes in the Board of Directors 72 79 68 Awards & Achievements Enterprise Risk Management - ERM Market Capitalization 47 Sports Activities 61 68 Board and Board Committees Meetings Environmental Protection Measures Materiality Approach 82 Statement of Compliance with the Code of Corporate Board Committee 60 29 25 Governance for Insurers, 2016 & Listed Companies External Environment Effecting The Company Matters Delegated by the Board of Directors 105 21 44 74 (Code of Corporate Governance) Regulations, 2019 Board of Directors Financial Calendar Membership of Industry, Associations and Trade Bodies 119 300 70 Statement of Compliance with the Shari’ah Principles Branch Network Financial Contribution to the National Exchequer Moving Ahead 13 Statement of Management Responsibilities Towards Business Continuity Plan / Disaster Recovery Plan 67 Financial Ratios 94 70 Natural Catastrophe Impact the Preparation and Presentation of Financial Statements 77 Business Ethics and Anti-corruption Measures 70 Forward Looking Statement 76 191 Notes to the Consolidated Financial Statements Statement of Value Added 87 Capital Structure 75 Free Cash Flow 96 129 Notes to the Unconsolidated Financial Statements Steps Taken by the Management to Encourage 94 297 39 Cash Flow Summary Glossary Notice of Meeting Minority Shareholders to Attend the General Meetings 46 48 64 70 Chairman's Review (English & Urdu) Grievance Function Occupational Safety and Health Strategic Objectives 74 16 82 Challenges & Opportunities Horizontal Analysis of Statement Opportunity Report Succession Planning 63 75 of Financial Position & Profit and Loss Account 90 38 Changes in Objectives / Strategies from Prior Years Organizational Ethics SWOT Analysis 71 38 Human Resource Management Policy 63 36 Code of Conduct Organogram The Leader 09 97 Implementing Governance 295 25 Comments on Key Financial Data 67 Pattern of Shareholding The Role of Chairman and Managing Director 70 Practices Exceeding Legal Requirements 64 Community Investment and Welfare Schemes Policy and Procedure for Stakeholder Engagement Unconsolidated Cash Flow Statement 127 Independent Auditor's Review Report 20 Policy for Related Party Transactions 66 125 Company Information To the members of EFU General Insurance Limited Unconsolidated Profit and Loss Account 28 64 Company Overview Review of the Statement of compliance Policy for Safety of Records of the Company Unconsolidated Statement of Changes in Equity 128 Company Profile (www.efuinsurance.com) 28 with the Code of Corporate Governance for Presence of Chairman - 126 46 Unconsolidated Statement of Comprehensive Income Insurers, 2016 & Listed Companies (Code Audit Committee in the Annual General Meeting 124 Compliance with International 118 Unconsolidated Statement of Financial Position Financial Reporting Standards (IFRS) 78 of Corporate Governance) Regulations, 2019 Procedure Adopted for Quality 15 69 Unmatched Expertise 189 Independent Auditor’s Report To the members Assurance of Products Industrial Relations Consolidated Cash Flow Statement 30 Value of Investments in Provident, Gratuity & Pension Funds 63 187 of EFU General Insurance Limited Report on the Product Portfolio Consolidated Profit and Loss Account Audit of the Consolidated Financial Statements 180 104 Vertical Analysis of Statement of 190 Profile of Shari’ah Advisor - Window Takaful Operations Consolidated Statement of Changes in Equity Financial Position & Profit and Loss Account 88 Independent Auditor’s Report To the Prospects of the Company Including Consolidated Statement of Comprehensive Income 188 27 members of EFU General Insurance Limited Report Targets for Financial and Non-financial Measures 85 Vision & Mission 186 on the Audit of the Unconsolidated Financial Statements 111 68 Consolidated Statement of Financial Position Proud Heritage 07 Water Conservation 69 Independent Auditor’s Report To the members 64 Consumer Protection Measures Report of the Audit Committee 103 Whistle Blowing Policy 10 of EFU General Insurance Limited Report on 254 Core Strengths 116 Report of the Directors to Shareholders (English & Urdu) 50 Window Takaful Operations Annexure - A 75 the Audit of the Window Takaful Operations Corporate Restructuring, Expansion and Discontinuance Resource Allocation 75 Form of Proxy (English & Urdu) 68 Independent Reasonable Assurance Report to the Corporate Social Responsibility Board of Directors on the Statement of Management's Risk Identification, Evaluation Form of E-Voting (English & Urdu) Corporate Social Responsibility Policy 67 Assessment of Compliance with the Shari’ah Principles 120 and Management Opportunities 80 Bank Mandate Form (English & Urdu) ANNUAL REPORT Investment & Properties Underwriting Result Breakup Value 25 881 505 96.48 Cash Dividend Total Assets Book Value (Rupees in million) (Rupees in million) (Rupees) 2 000 45 699 (Rupees in million) (Rupees in million) Investment Claims Paid (Gross) & Other Income Profit After Tax 4 897 2 808 2 609 (Rupees in million) (Rupees in million) (Rupees in million) Premium Shareholders Equity (including Takaful Contribution) 19 296 22 064 (Rupees in million) (Rupees in million) 04 EFU GENERAL INSURANCE LTD. EFU GENERAL INSURANCE LTD. 05 ANNUAL REPORT Proud Heritage Established in 1932 and moving to Pakistan in 1947, the company has a long and proud heritage as a national institution of Pakistan. We have helped in nation building by protecting the country’s assets from the very beginning. 06 EFU GENERAL INSURANCE LTD. EFU GENERAL INSURANCE LTD. 07 ANNUAL REPORT The Leader We have the honour to lead the insurance industry with our long experience, commitment to customer interest and proven record of delivering on promises for over 85 years. Today, we are acknowledged worldwide as the flagship of Pakistan’s insurance industry. 08 EFU GENERAL INSURANCE LTD. EFU GENERAL INSURANCE LTD. 09 ANNUAL REPORT Core Strengths The three peaks of the mountain reflect EFU’s strengths - the highest rating, over eight decades of experience and quality personnel. We have the scale, expertise and capabilities that ensure our customers the finest protection. 10 EFU GENERAL INSURANCE LTD. EFU GENERAL INSURANCE LTD. 11 ANNUAL REPORT Moving Ahead Change is the law of life. EFU presses on despite the challenging economic times and, like a powered windmill, continues to drive itself forward to keep building its business and shaping the company’s future. 12 EFU GENERAL INSURANCE LTD. EFU GENERAL INSURANCE LTD. 13 ANNUAL REPORT Unmatched Expertise Our highly experienced teams have a breadth and depth of knowledge that distinguishes us in the industry. We specialize by types of insurance coverages as well as by industries. 14 EFU GENERAL INSURANCE LTD. EFU GENERAL INSURANCE LTD. 15 ANNUAL REPORT Challenges & Opportunities People drive our success. We remain committed to searching out, training and retaining the finest. We keep them challenged and motivated, recognize and reward performance and offer diverse careers. The combination of challenge and opportunity at EFU, attracts the very best. 16 EFU GENERAL INSURANCE LTD. EFU GENERAL