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Karachi: We have to inform you that the Board of Directors of our Company in their meeting held on 7th April 2012 at 10:00 AM, at the Registered Office of the Company at Office# 1001, Uni Centre, 10th Floor, I.I. Chundrigar Road, Karachi, recommended the following:
Company is not in a position to declare any dividend now.
The financial results of the Company are as follows:
| Business Conducted | Nil |
| Loss before taxation | Rs. (143,110) |
| Taxation | Nil |
| Loss after taxation | Rs. (143,110) |
| Loss per share | Rs. (0.29) |
Complete Profit and Loss Account and draft initiated audit report have been enclosed for your consideration.
We have applied to your authority for the date and time of holding Annual General Meeting and we have not yet received any response thereof due to non payment of disputed listing fee.
Due to no business activity and no dividend announcement, the Company has not declared the “Closed Period” (from N/A to N/A) as required under Clause (xxvi) of the Code of Corporate Governance contained in the Listing Regulation No. 35 of the Exchange. Accordingly, no Director, CEO or Executive shall, directly / indirectly, deal in the shares of the Company in any manner during that Period.
Auditors’ Report to the Members
We have audited the annexed financial statements comprising of:
| (i) | balance sheet; |
| (ii) | profit and loss account; |
| (iii) | statement of comprehensive income |
| (iv) | statement of changes in equity; |
| (v) | statement of cash flows; |
| (vi) | statement of premiums; |
| (vii) | statement of claims; |
| (viii) | statement of expenses; and |
| (ix) | statement of investment income |
Of The Hallmark Insurance Company Limited as at December 31, 2011 together with the notes forming part thereof, for the year then ended.
Management’s Responsibility
It is the responsibility of the Company’s Board of Directors to establish and maintain a system of internal control, and prepare and present the financial statements in conformity with the approved accounting standards as applicable in Pakistan and the requirements of the Insurance Ordinance, 2000 (XXXIX of 2000) and the Companies Ordinance, 1984 (XLVII of 1984). Our responsibility is to express an opinion on these statements based on our audit.
Auditor’s Responsibility
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting policies used and significant estimates made by management, as well as, evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.
In forming our opinion on these financial statements, we are concerned on the following matters:
Sundry receivables shown on the balance sheet of an amount of Rs.591,106. In our opinion the company is unlikely to receive any payment and full provision of 591,106 should have been made. Accordingly, sundry receivables should be reduced and net loss for the year and accumulated losses should be increased by the same amount.
The Insurance Ordinance, 2000 has enhanced the requirement of minimum capital to Rs. 300 million up to end of the year 2010: the Company does not find itself in a position to increase its paid up capital: and does not comply with the solvency requirements.
The Company could not reconcile its accounts with Pakistan Insurance Corporation Limited (PICL).
The commercial operations of the Company were suspended from January 1, 2003, thus substantiating the company’s inability to continue as a going concern.
Due to discontinued operations, depreciation for the period of nine months from the month of April, 2011 to December 31, 2011 amounting to Rs. 84,329 has not been charged in these financial statements. Further the depreciation has not been charged for the years 2003 to 2008 for the same reason, however the depreciation had been charged for the year 2009 and 2010. If the depreciation would have been charged the net accumulated loss after tax would have been increased by Rs. 389,039 and the written down value of fixed assets would be Rs. 707,239.
We also draw attention to Note 1 in the financial statements which indicates that the Company incurred a net loss of Rs.143,110 during the year ended December 31, 2011 and, as of that date, the Company’s accumulated losses after taxation exceeded its equity by Rs.28,425 and its total current liabilities exceeded its current assets by Rs.1,124,704. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.
Disclaimer of opinion
Because of the potential significance, to the financial statements of the combined effects of the above matters, and as stated in note 1 to these financial statements, we are unable to form an opinion as to whether.
a) proper books of account have been kept by the Company as required by the Insurance Ordinance, 2000 and the Companies Ordinance, 1984;
b) the financial statements together with the notes thereon have been drawn up in conformity with the Insurance Ordinance, 2000 and the Companies Ordinance, 1984, and accurately reflect the books and records of the Company and are further in accordance with accounting policies consistently applied;
c) the financial statements together with the notes thereon present fairly, in all material respects, the state of the Company’s affairs as at 31 December 2011 and of its loss, its cash flows and changes in equity for the year then ended in accordance with approved cash flows and changes in equity for the year then ended in accordance with approved accounting standards as applicable in Pakistan. and give the information required to be disclosed by the Insurance Ordinance, 2000 and the Companies Ordinance, 1984; and
d) no Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).
Rafaqat Mansha Mohsin Dossani Masoom and Co.
Chartered Accountants
Engagement Partner
Afzal H. Dossani
Profit and Loss Account for the year ended December 31, 2011
(all amounts in PKR)
| Marine, | Others | ||||||
| Revenue Account | Note | Fire and | Aviation and | Motor | including | 2011 | 2010 |
| Property | Transport | Miscellaneous | Total | Total | |||
| Net Premium revenue | – | – | – | – | – | – | |
| ——– | ———- | —— | ———— | ——- | ———- | ||
| Administrative surcharge | – | – | – | – | – | – | |
| ——– | ———- | —— | ———— | ——- | ———- | ||
| Less: Net claims | – | – | – | – | – | – | |
| ——– | ———- | —— | ———— | ——- | ———- | ||
| Less: Expenses | – | – | – | – | – | – | |
| ——– | ———- | —— | ———— | ——- | ———- | ||
| Less: Net commission | – | – | – | – | – | – | |
| ——– | ———- | —— | ———— | ——- | ———- | ||
| Underwriting Result | – | – | – | – | – | – | |
| ——– | ———- | —— | ———— | ——- | ———- | ||
| Operating Expenses | |||||||
| General and administrative expenses | 8 | (143,110) | (1,846,162) | ||||
| ——- | ——— | ||||||
| Gain on sale of land | – | 1,500,000 | |||||
| ——- | ——— | ||||||
| (Loss) before Taxation | (143,110) | (346,162) | |||||
| ——- | ——— | ||||||
| Taxation | |||||||
| Taxation for the year | 9 | – | – | ||||
| ——- | ——— | ||||||
| (Loss) after Taxation | (143,110) | (346,162) | |||||
| ——- | ——— | ||||||
| (Loss) per Share | (0.29) | (0.69) |
For more information, contact:
Ahtesham Ashraf
Director
Hallmark Insurance Company Limited
Suit # 1001, Uni Centre,
10th Floor, I.I. Chundrigar Road,
Karachi, Pakistan
Off: 021-32414419
Fax: 021-32416288
Email: hallmark@bizcprei.com