Clarification

Reference is made to a news item carried by Business Recorder on March 14, 2011. The actual facts are as under:
-- The Chief Financial Officer (CFO) of PRCL, Mrs Farzana Munaf is a qualified Chartered Accountant of 1988 batch and she was selected and appointed through a process involving newspaper's advertisement, interviews of shortlisted results with executive committee of the board and board's approval.
-- Statement regarding external auditors raising a number of questions over the maintenance of book is baseless as their report does not contain any such observation.
-- The Statement about one of the board members' concern over the financial health of the company is baseless as PRCL has not received any such complain from any of the board member.
-- The significant portion of the management expenses comprise of salaries, benefits, retirement cost and utility expenses which have increased manifold in line with salaries and pension raise given by the government and inflationary trend prevailing in the country. Detail of management expenses are as follows:
As far as investment income is concerned, in respect of whatever has been stated, attention is drawn to the Audited/Published Financial Statements which very obviously reflects that PRCL has shown tremendous growth for the last three years. Some of the major financial achievements which point towards the strength of the company and the financial gains which it has achieved in the last four years are listed below:

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Year    Management     Salaries, benefits,      % of

           Expenses    Retirement Cost    Management

        & Utilities       Expenses

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2007    157,618,828      121,994,254          77.398

2008    250,091,008      233,348,709          93.306

2009    231,410,090      209,734,605          90.633

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Paid-up capital in 2006 was Rs 450 million only; in 2009 it has increased to Rs 3 billion.
General and capital reserves of the company, which were Rs 2.28 billion in 2006 increased to Rs 3.78 billion in 2009.
The owners' equity of the company in 2006 was Rs 2.73 billion whereas in 2009 it has increased to Rs 6.786 billion. The investments of the company which were Rs 3.58 billion in 2006 are Rs 5.48 billion in 2009. The total assets of the company have increased from Rs 6.46 billion in 2006 to Rs 12.37 billion in 2009.
Capital dividend paid-out to shareholders: Cash pay out to the Government of Pakistan in 2006 was only Rs 46 million whereas in 2009 cash transferred to the Government of Pakistan as dividend was Rs 404 million. The payout to SLIC in 2006 was Rs 23 million whereas in 2009 is Rs 220 million and other shareholders Rs 21 million in 2006 and Rs 221 million in the year 2009. The above statistics clearly show that PRCL has been the source of tremendous financial gain for Government of Pakistan, SLIC and all other shareholders.
-- Regarding PRCL's share prices quoted on the stock exchange, it is worth mentioning that PRCL has issued 455% bonus shares in April 2008 to increase the capital base of the company to Rs 3 billion. The increase in capital base is very important for reinsurance business to expend its operation. Further the share prices on the Stock Exchanges are regulated by a number of external factors.
-- Regular reports are sent to the Ministry of Commerce and recently a detailed presentation was made to the Federal Minister in Islamabad on February 12, 2011. Further the company's accounts are published on quarterly, half yearly and annual basis in accordance with Companies Ordinance, 1984.
Copyright Business Recorder, 2011