24th annual report- 2019 - meghna life

24th ANNUAL REPORT- 2019

Registered OfficeBiman Bhaban (2nd Floor), 100, Motijheel Commercial Area, Dhaka-1000Phone : PABX : 9558297, 9558993, 9556204, Fax: 88-02-9578113

e-mail : [email protected], Web site : www.meghnalife.com

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1

Speedy & quality services to our policyholders.

Maintain sustainable growth.

Follow strong/high ethics of morality in all spheres of business

operation/activities.

Provide profitable return on shareholders' equity.

Maintain corporate social responsibilities (CSR).

Explore new areas/venues where Insurance awareness has not yet been

developed.

Protect policyholder's interest.

Develop honesty, sincerity, integrity among the service rendering

employees.

Our Vision

Our vision is to make the Company a market leader by virtue of service to be

rendered to our valued clients and shareholders. It is our aim to create an

enviable image in the insurance industry.

2

Our Mission

To provide prompt/speedy claim settlement. To procure Insurance premium in a transparent manner based on market mechanism within the legal and social framework. To provide efficient, innovative and quality products and services with excellent delivery system to the policyholders. To attract/retain efficient/capable employees and to enhance their career through training, motivation and remuneration. To contribute meaningfully towards the progress of the nation by providing corporate social responsibilities. To generate profit and fair returns to our shareholders ensuring sustainable growth.

Policyholder first (Customer Centricity) Ethics (Honesty/sincerity/devotion/Integrity/high moral). Transparency Responsibility Innovation Teamwork

Focus on policyholder's satisfaction Committed to deliver best financial services to policyholders. Catering high degree of professionalism by use of latest digital technology. Creating and maintaining long lasting relationship based on mutual trust and interest with the policyholders and share holders. Sharing the values and belief of our policyholders.

3

Strategic Objectives

Core Values

Our Commitment

Contents Page No.

01. Corporate Information 06

02. Our Journey 07

03. Transmittal Letter 09

04. Notice of the 24th Annual General Meeting 10

05. Products & Services 11

06. Board of Directors 12

07. Corporate Management & Committees 13

08. Shariah Council 14

09. Equity Performance 15

10. Operational Highlights 2019 16

11. Key Financial Indicators 17

12. Business Highlights 19

13. Financial Highlights 20

14. Achievement of Meghna Life (In Graphs) 21

15. Photographs 24

16. Profile of Directors 27

17. Profile of Independent Directors 31

18. Chairman's Message 32

19. Chief Executive Officer's Report 35

20. Report of the Audit Committee 37

21. Certification by The Chief Executive Officer and the

Chief Financial Officer on financial reporting 38

22. Certificate of Corporate Governance 39

23. Report on Corporate Governance 40

24. Status of Compliance of Corporate Governance 42

4

Contents Page No.

25. Director's Report 56

26. Independent Auditor's Report 64

27. Balance Sheet 70

28. Revenue Account 72

29. Statement of Changes in Shareholder's Equity 74

30. Cash Flow Statement 75

31. Notes to the Financial Statements 76

32. Statement of Life Insurance Fund 99

33. Form-AA 100

34. Director's Certificate 101

35. Consolidated Balance Sheet 102

36. Consolidated Revenue Account 104

37. Consolidated Statement of Changes in Shareholder’s Equity 106

38. Consolidated Cash Flow Statement 107

39. Consolidated Notes to the Financial Statements 108

40. Consolidated Statement of Life Insurance Fund 111

41. Consolidated Form-"AA" 112

42. Meghna Life Securities and Investment Limited 113

43. Independent Auditor’s Reports 114

44. Statement of Financial Position 117

45. Statement of Profit or Loss and Other Comprehensive Income 118

46. Statement of Changes in Shareholders' Equity 119

47. Statement of Cash flows 120

48. Property, Plant & Equipment 121

49. Notes to the Financial Statements 122

5

01. Name of Company : Meghna Life Insurance Company Limited

02. Year of Establishment : 1996

03. Date of Incorporation : 5th May 1996

04. Business Commencement Date : 5th May 1996

05. Authorised Capital : Tk. 60 Crore

06. Paid up Capital : Tk. 33,52,19,130/-

07. Nature of Business : Life Insurance Business

08. Registered Office : Biman Bhaban (2nd floor) 100, Motijheel Commercial Area Dhaka-1000, Bangladesh.

09. Auditors : M/S A. Wahab & Co. Chartered Accountants Hotel Purbani, Annex-2, (4th Floor) 1 Dilkusha C/A, Dhaka-1000.

10. Legal Adviser : Advocate M.A. Wadud The Law Society, Birds Bangladesh Agency Bhaban, (Ground Floor), 103 Motijheel C/A, Dhaka-1000.

11. Bankers :

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Corporate Information :

Sonali Bank Ltd., Janata Bank Ltd., Agrani Bank Ltd. Pubali Bank Ltd., Rupali Bank Ltd. Uttara Bank Ltd., Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, NCC Bank Ltd., Jamuna Bank Ltd. Islami Bank BD Ltd., The Trust Bank Ltd. Dhaka Bank Ltd., Prime Bank Ltd. National Bank Ltd., Bank Asia Ltd., EXIM Bank Ltd. Brac Bank Ltd., Al-Arafah Islami Bank Ltd. Eastern Bank Ltd., I.F.I.C Bank Ltd., One Bank Ltd. Bangladesh Commerce Bank Ltd., AB Bank Ltd. ICB Islamic Bank Ltd., First Security Islami Bank Ltd. Mercantile Bank Ltd., Social Islami Bank Ltd. Premier Bank Ltd., Southeast Bank Ltd. Standard Bank Ltd., Dutch Bangla Bank Ltd. Shahjalal Islami Bank Ltd., United Commercial Bank Ltd. Habib Bank Ltd., Mutual Trust Bank Ltd. South Bangla Agriculture & Commerce Bank Ltd. Padma Bank Ltd., NRB Global Bank Ltd. BDBL, Union Bank Ltd., The City Bank Ltd. Meghna Bank Ltd., Modhumoti Bank Ltd. NRB Commercial Bank Ltd.

19965th May Incorporation of the company

5th May Commencement of business

5th June Issuance of first insurance policy

199813th June Launching of Loko Bima (Micro insurance)

200122nd Feb. Launching of Islami Bima (Takaful)

19th Aug. First declaration of bonus to policyholder

200511th April Agreement signed with CDBL

27th April Consent received from BSEC for issuance of public share of Tk. 45 million

25th Aug. Start up demat settlement

1st Sept. Listing with Dhaka and Chattogram Stock Exchanges Limited

4th Sept. First trading at Dhaka and Chattogram Stock Exchanges Limited

200810th April Start up of Mobile SMS programme for the policyholder

20096th Aug. Purchase of eight (8) decimal land at Sagardi at Barishal town

14th Dec. start up the construction work of high rise company's own

building at 11B & 11D, Toyenbee Circular Road, Motijheel

C/A, Dhaka-1000.

2010

25th Feb. Purchase of 24.23 decimal land at Cumilla City.

25th March Purchase of 9.25 decimal land with 03 (three)

storied building at Patuakhali town.

201129th June Purchase of commercial space measuring 3641 sft.

with 0.011 decimal land at Nasirabad C/A, Chattogram.

7

Our Journey

201227th Aug. Purchase of 1.23 decimal land at 11/B, Toyenbee circular road,

Motijheel, Dhaka-1000.

19th Sep. Purchase of 758 sft. commercial space with 0.0023 acre land at

Nasirabad C/A, Chattogram.

13th Aug. Purchase of Membership Number-245 of Dhaka Stock Exchange Ltd.

201318th April Formation of subsidiary company in the name

and style: Meghna Life Securities and Investment Ltd.

20145th May Starting construction on 2.5 katha land attached to own Building

Meghna-Karnaphuli Biman Bhaban at 11/D, Toyenbee

Circular Road, Motijheel C/A, Dhaka-1000.

201515th March Start up construction work on 8 decimal land at Sagardi, Barishal City.

201715th March Shifting of Loko Bima, Islami Bima (Takaful) Division to newly

constructed Meghna-Karnaphuli Bima Bhaban at 11B & 11D,

Toyenbee Circular Road, Motijheel C/A, Dhaka-1000.

201828th January Shifting of Ekok Bima, Loko Bima & Islami Bima (Takaful) Division of

Barishal Division to newly constructed own building at Sagardi

Barishal.

20192nd October Purchase of 26.75 decimal land at Mouza Belail under

Bogura Municipality, Bogura. (Dhaka-Rangpur Highway)

8

Transmittal Letter

9

All Honorable Shareholders

Insurance Development and Regulatory AuthorityBangladesh Securi�es and Exchange Commission Registrar of Joint Stock Companies & Firms Dhaka Stock Exchange Limited Cha�ogram Stock Exchange LimitedCentral Depository Bangladesh LimitedAll other Stakeholders, Bangladesh.

Sub: Annual Report of Meghna Life Insurance Company Ltd. for the year ended 31st December, 2019.

Dear Sir,

We are pleased to present a copy of the above Annual Report together with the Audited

Accounts & Financial Statements for the year ended 31st December, 2019 for your kind

informa�on and record.

With Best Regards

(Aziz Ahmed)Company Secretary

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Website : www. meghnalife.com

Notice is hereby given that the 24th Annual General Meeting (AGM) of Meghna Life Insurance Company Limited will be held virtually by using digital platform through the link: https://meghnalife.bdvirtualagm.com on Thursday the 22nd day of October, 2020 at 11:00 a.m. to transact the following businesses:

AGENDA

Dhaka, Dated-the 17th September 2020.

Notes:

To confirm the minutes of the 23rd Annual General Meeting of the Company held on 26.09.20191.

The Record Date is 21.09.20201)

Shareholders whose names will appear in the share Register/Depository Register on the Record Date will be eligible to attend the meeting and will qualify for dividend.Pursuant to the Bangladesh Securities and Exchange Commission's Order No. SEC/SRMRC/ 04-231/25 dated 8th July 2020, the AGM will be a virtual Meeting of the members, which will be conducted via live webcast by using digital platform. The detailed procedures to attend the meeting will be communicated to the shareholder's e-mail ID in due course and it will also be available on the company's website at www.meghnalife.com A member eligible to attend and vote at the 24th Annual General Meeting, may appoint a proxy to attend and vote on his/her behalf. Proxy form must be affixed with a revenue stamp of TK. 20/- and submitted to Registered Office of the Company not later than 72 hours before the time fixed for holding the Annual General Meeting. Hon'ble shareholders are requested to update the particulars of their BO ID with mailing address, contact number, email ID and 12 Digit Taxpayer's Identification Number (e-TIN) through Depository participants (DP) before the Record date. If any shareholder fails to update their e-TIN before the Record date, Income Tax at source will be deducted from Dividend payable as per NBR Notification. Bank accounts of the individual shareholders shall also be updated as per statutory requirement. All BO Account holders are requested to convey the e-mail no. (if any) to the authority so that they may be communicated.The detailed procedures to participate in the virtual meeting along with link are available in the company's website at www.meghnalife.com. Shareholders will be able to join the virtual AGM through the link: https://meghnalife.bdvirtualagm.comThe shareholders will be able to submit their questions/comments through e-mail: address [email protected] 24 hours before commencement of the AGM and during the AGM.For logging into the system, the shareholders need to put their 16 digit Beneficial Owner (BO) ID number and other credential as proof of their identity by visiting the link: https://meghnalife.bdvirtualagm.comAnnual Report 2019 will be sent through the e-mail address of the shareholders and also available to the website of the company at www.meghnalife.com.

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7)

8)

9)

3)

To receive, consider and adopt the Revenue Accounts of the Company for the year ended 31st December, 2019 and the Balance Sheet as at that date together with the reports of the Directors and the Auditors thereon.

2.

To declare dividend for the year ended 31st December, 2019 as recommended by the Board of Directors.3.To elect/re-elect Directors as per Articles of Association of the Company.4.

To appoint/re-appoint Auditors for the year 2020 and to fix their remuneration.

Hon'able shareholders are requested to make it convenient to log in to the system well in time.

6.

Miscellaneous: To transact any other business with the permission of the chair. 8.

To appoint/re-appoint professionals who will provide certificate in compliance of corporate governance and to fix their remuneration for 2020.

7.

To elect/re-elect Independent Directors of the Company.5.

By order of the Board of Directors

(Aziz Ahmed)Company Secretary

NOTICE OF THE 24th ANNUAL GENERAL MEETING THROUGH DIGITAL PLATFORM

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Products & Services

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Company SecretaryAziz Ahmed

Chairman

Nizam Uddin Ahmed

Vice Chairman

Hasina Nizam

Chief Executive OfficerN.C. Rudra

Independent Directors

Md. Yousuf Ali Howlader

Md. Nurul Islam Miah

Mohammad Ahsan Ibne Kabir

Directors

Nasir Uddin Ahmed

Riaz Uddin Ahmed

Jannatul Fardous

Karnaphuli Insurance Company Ltd. (Nominated Director ANM Fazlul Karim Munshi)

Nizam-Hasina Foundation Hospital (Nominated Director Md. Moin Uddin)

Umme Khadija Meghna

Sharmin Nasir

Dilruba Sharmin

Professor Md. Mazharul Islam

Sabita Ferdaushi

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Board of Directors

13

Chief Executive Officer

N.C. Rudra

Management Committee

N. C. Rudra President

Lt. Col. (Retd) M. Shamsuddin Ahmed Member

D.S. Taiful Islam "

Mohammad Tarek FCA "

Md. Abul Bashar "

Md. Faruq Ahmed Siddique "

Saifuddin Ahmed "

Zahur Ahmed Choudhury "

Mian Mohd. Mashiur Rahman "

Md. Nizam Uddin (Anis) "

S.M. Shahadat Hossain "

Syed Enamul Hoque "

Md. Abu Sahed "

Md. Mohiuddin Chowdhury "

Aziz Ahmed Member Secretary

Director-Marketing & DevelopmentLt. Col. (Retd) M. Shamsuddin Ahmed

Audit CommitteeMd. Yousuf Ali Howlader Chairman(Independent Director)Nasir Uddin Ahmed (Director) MemberRiaz Uddin Ahmed (Director) "

N.R.C (Nomination and Remuneration Committee)

Mohammad Ahsan Ibne Kabir Chairman(Independent Director)Nasir Uddin Ahmed (Director) MemberNizam-Hasina Foundation Hospital "(Nominated Director Md. Moin Uddin)

Deputy Managing Director & CFOMohammad Tarek FCA

Deputy Managing DirectorsMd. Abul BasharMd. Rakibul Hasan

Addl. Managing DirectorD.S. Taiful Islam

General ManagerS.M. Shahadat Hossain

Joint Executive Director &Company SecretaryAziz Ahmed

Joint Executive DirectorsMian Mohd. Mashiur RahmanMd. Nizam Uddin (Anis)

Executive DirectorsMd. Faruq Ahmed SiddiqueSaifuddin AhmedZahur Ahmed Choudhury

Corporate Management & Committees

Professor Moulana Muhammad Salah Uddin ChairmanKhatib, National Mosque Baitul Mukarram, Dhaka

Justice Mohammad Abdur Rouf MemberFormer Chief Election Commissioner

Moulana & Poet Ruhul Amin Khan "Joint Secretary, Jamiatul Modarresin & Executive Editor, The Daily Inquilab, Dhaka.

Moulana Mohammad Nurul Huda Fayazi, Pir Saheb-Karimpur "Chairman, Quran Education Board, Dhaka.

Moulana Mohammed Saleh "Former Principal, Madrasha-e-Alia, Khulna

Dr. Moulana M.A Faruque "Chairman, Islamic Studies Department, South East University

Mufti Muhammad Amimul Ehsan Muraqib

Company Representative

Nizam Uddin Ahmed MemberChairman

D.S. Taiful Islam "Additional Managing Director

Md. Nizam Uddin (Anis) Member SecretaryJoint Executive Director (IBT)

14

Shariah Council

Number of outstanding share - 3,35,21,913

Book value per share - Tk. 10 each

Market value per share as on 31-12-2019 - Tk. 51.70

Earnings per Share - Tk. 4.19

Dividend per share - Tk. 2.00

Price earning ratio - 12.34 Times

Net Assets Value per Share - Tk. 42.00

Dividend pay out ratio - 47.73%

15

Equity Performance

Permanent Staff members - 938 Nos.

Casual & Temporary staff members - 375 Nos.

Branches - 244 Nos.

Gross Premium - Tk. 435.08 Crore

Net Premium - Tk. 434.54 Crore

Investment Income - Tk. 102.33 Crore

Other income - Tk. 3.18 Crore

Total Revenue - Tk. 540.59 Crore

Total Assets - Tk 1,932.81 Crore

Net Assets - Tk. 140.78 Crore

Life Insurance Fund - Tk. 1,790.77 Crore

Gross Surplus for the year (As per Valuation) - Tk. 98.11 Crore

Tax & VAT paid to the National Exchequer respectively:

a) Tax - Tk. 8.43 Crore

b) VAT - Tk. 2.10 Crore

Number of Life Policies - 79,548 Nos.(Issued during 2019)

Number of claims settled during the year 2019:

Death - 1,714 Nos.

Maturity - 71,143 Nos.

Number of policies surrendered: - 537 Nos.

16

Operational Highlights-2019

First Year and Renewal Premium Income (Amount in million BDT unless otherwise stated) Year 2015 2016 2017 2018 2019 Description 1,187.98 1,061.18 1,017.61 1,026.50 1,031.10 First Year Premium Income 2015 303.47 216.04 300.29 271.51 278.16 Renewal premium out of the policies issued in 2015 2016 372.51 255.80 171.14 336.09 331.63 Renewal premium out of the policies issued in 2016 2017 N/A N/A N/A 361.92 383.46 Renewal premium out of the policies issued in 2017 2018 N/A N/A N/A N/A 514.27 Renewal premium out of the policies issued in 2018N.A= Not ApplicableNumber of First Year and Renewal Policies

Year 2015 2016 2017 2018 2019 Description 1,61,910 1,14,605 89,193 88,020 79,548 Number of New Policies issued 2015 42,176 25,553 30,090 27,590 22,807 Number of policies renewed out of the policies issued in 2015 2016 45,763 27,631 16,584 31,520 24,268 Number of policies renewed out of the policies issued in 2016 2017 N/A N/A N/A 38,797 25,669 Number of policies renewed out of the policies issued in 2017 2018 N/A N/A N/A N/A 30,956 Number of policies renewed out of the policies issued in 2018N.A= Not Applicable Bar diagrams relating to the following, but not limited to, may also be included. Total Assets Life Fund Management Expenses Claims Gross Premium Income Investment Income Excess Expenses

SR Particulars Year No. 2015 2016 2017 2018 2019 33 Fourth policy year Lapse Ratio (%) by number of Policies 81.89 86.55 62.53 59.39 60.90 34 Fifth Policy year Lapse Ratio (%) by number of policies 85.37 85.54 59.08 57.18 68.33 35 Sixth Policy year Lapse Ratio (%) by number of policies 87.38 89.24 51.20 63.47 65.21 36 Second policy year Lapse Ratio (%) by premium amount 68.65 77.12 58.30 56.39 52.04 37 Third policy year Lapse Ratio (%) by premium amount 79.76 83.39 60.32 60.41 50.17 38 Fourth policy year Lapse Ratio (%) by premium amount 77.12 87.24 66.20 61.59 54.73 39 Fifth policy year Lapse Ratio (%) by premium amount 72.68 81.81 69.70 58.30 66.38 40 Sixth policy year Lapse Ratio (%) by premium amount 74.78 80.78 56.52 61.24 67.58 41 Market price per share (in BDT) at year end 57.00 55.70 59.90 77.90 51.70 42 Dividend yield (%) 4.39% 4.49% 3.34% 2.57% 3.87% 43 Outstanding premium s at 31st December 1,177.69 1,490.53 1,858.25 1,801.74 1,781.82 44 Total Investment as 31st December 11,379.93 11,728.09 12,214.87 13,420.14 14,566.18 45 Life Fund as at 31st December 13,773.04 14,689.90 15,634.62 16,867.33 17,907.73 46 Total Assets as at 31st December 15,179.42 15,921.59 16,979.78 18,385.54 19,328.09 47 paid up Capital as at 31st December 304.05 319.26 335.22 335.22 335.22 48 Paid up capital/Total Asset (%) 2.00% 2.00% 1.97% 1.82% 1.73% 49 Net cash flow from operating activities (220.07) 291.08 591.61 1,164.93 109.47 50 Net cash flow from investing activities (164.75) (293.94) (623.45) (297.68) 511.21 51 Net cash flow from financing activities 49.60 18.74 14.50 (0.63) (62.88) 52 Net change in cash and equivalent (335.22) 15.88 (17.34) 866.62 557.80

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Comparative Statement of New Business & Business Inforce

Ekok Bima 2015 2016 2017 2018 2019New BusinessNumber of Policies 55,095 48,308 43,227 45,023 35,431Sum Assured (In Crore Taka) 657.59 658.53 876.73 640.07 547.141st Year Premium (In Crore Taka) 59.02 59.32 60.27 60.66 54.27

Business In forceNumber of Policies 3,61,941 3,59,884 3,65,523 3,72,847 3,66,419Sum Assured (In Crore Taka) 3,315.26 2,372.35 1,394.5 1,483.3 4,084.16

Loko BimaNew BusinessNumber of Policies 67,460 44,506 26,038 22,838 28,938Sum Assured (In Crore Taka) 415.66 308.92 237.49 245.89 323.981st Year Premium (In Crore Taka) 32.7 24.17 20 20.99 28.81

Business In forceNumber of Policies 5,20,130 4,48,882 4,24,812 4,14,522 3,74,389Sum Assured (In Crore Taka) 1,774.42 975.01 1,686.43 1,748.15 1,811.25

Islami BimaNew BusinessNumber of Policies 28,204 21,791 19,928 20,159 15,179Sum Assured (In Crore Taka) 291.53 244.58 234.44 233.94 212.671st Year Premium (In Crore Taka) 27.08 22.62 21.49 21 20.04

Business In forceNumber of Policies 2,32,313 2,14,285 2,05,411 2,01,012 1,88,985Sum Assured (In Crore Taka) 1,455.45 918.83 817.94 836.72 1,602.64

GroupNew Business Number of Policies 8 6 5 6 5Sum Assured (In Crore Taka) 117.72 67.21 45.41 91.53 28.851st Year Premium (In Crore Taka) 2.64 2.95 3.05 3.23 3.07No. of Lives Insured 8,625 1,503 937 1,891 793

Business In forceNumber of Policies 48 54 50 52 52Sum Assured (In Crore Taka) 545.78 549.67 648.01 740.83 695.42No. of Lives Insured 18,464 19,395 19,305 19,777 23,413

19

Business Highlights

Business PerformanceTaka In Crore

20

Particulars 2015 2016 2017 2018 2019

1st Year Premium 118.80 106.12 101.76 102.65 103.11

Renewal Premium 313.71 315.19 323.79 327.03 328.89

Group Premium 2.64 2.95 3.05 3.23 3.07

Gross Premium 435.15 424.26 428.61 432.91 435.08

Investment Income 94.13 89.63 85.73 96.35 102.33

Claims 305.69 260.57 271.73 259.91 287.94

Management Expenses 158.38 144.05 133.74 123.50 125.30

a) Commission 71.35 64.26 57.94 56.79 61.19

b) Admn. Expenses 87.03 79.79 75.80 66.71 64.11

Claims to Premium % 70.24% 61.41 63.40% 60.03% 66.18%

Management Expenses to Premium % 36.39% 33.95% 31.20% 28.52% 28.80%

Assets 1517.94 1,592.16 1,697.98 1,838.55 1,932.81

Life Fund 1377.30 1,468.99 1,563.46 1,686.73 1,790.77

Business Growth

Particulars 2015 2016 2017 2018 2019

Premium income in % (1.83) (2.50) 1.02 1.00 0.50

Assets in % 3.24 4.88 6.65 8.27 5.13

Life Fund in % 2.73 6.65 6.43 7.88 6.17

Financial Highlights

21

Achievement of Meghna Life

435.15 424.26 428.61 432.91 435.08

410

415

420

425

430

435

440

445

2015 2016 2017 2018 2019

Premium In crore Taka

Year

Year

Life Fund In Crore Taka

2015 2016 2017 2018 2019

1377.301,468.99

1,563.461686.73

1790.77

22

CLAIM PAID IN CRORE TAKA

Year

2015 2016 2017 2018 2019

305.69

260.57 271.73 259.91287.94

ASSETS IN CRORE TAKA

Year

2000.00

2015 2016 2017 2018 2019

1500.00

1000.00

500.00

0.00

1517.94 1592.161697.98

1838.551932.81

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

DSE & CSE Share Value In Line

23

in Taka

0

20

60

40

100

80

in Taka

0

20

60

40

200

80

57.0055.70

59.5951.70

57.4055.40

58.59 57.00

77.90 78.00

Cash & Bank Balances

Investment

Fixed Assets

Loans

Others

Asset Allocation

Tk. in Crore

680.72

18.36

15.36428.28

790.09

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PhotographsPhotographs

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Profile of Directors

Nizam Uddin AhmedChairmanHe comes of a renowned Muslim family. He obtained Masters Degree in Journalism and obtained LLB Degree from Dhaka University in 1971. He is the founder Chairman of Nizam-Hasina Welfare Foundation and also the Chairman of Karnaphuli Insurance Co. Ltd., a leading non life Insurance Company in the country. Mr. Nizam Uddin Ahmed through his visionary thinking, dedication and skill engaged himself in many Socio-Cultural activities and established many charitable organizations in Bhola as well as in the capital. He was the Member of Federation of Bangladesh Chamber of Commerce and

Industries and also Bangladesh Chamber of Industries. He travelled many countries viz. USA, UK, Canada, Saudi Arabia, Malaysia, Thailand, Japan, Singapore, Taiwan, Korea, Indonesia, Australia, and India for the purpose of business. He is a simple living & high thinking man. He maintains ethics in business and holds up honesty, sincerity and high values.

Hasina NizamVice Chairman She comes of a respectable Muslim family of Barishal. She is a graduate in Political Science from Eden College, Dhaka. She is involved with various Social works and Welfare organizations. She is also the Director of Karnaphuli Insurance Co. Ltd. a leading General Insurance Company in the country, Vice-Chairperson of Nizam-Hasina Welfare Foundation, and Vice-chairperson of Nizam-Hasina Foundation Hospital.

Nasir Uddin AhmedDirectorMr. Nasir Uddin Ahmed was born in October,1975 in a respectable Muslim family. He obtained his BBA Degree from North South University in 1999. A visionary entrepreneur Mr. Nasir Uddin Ahmed is also the Vice-Chairman of Karnaphuli Insurance Co. Ltd. & Director Nizam-Hasina Welfare Foundation. He is an Executive Member of Bangladesh Insurance Association (BIA). He attended various Training, seminars, & Conferences in Bangladesh as well as in the foreign countries like U.K., USA, Australia, E-U Countries, Hong Kong, Malaysia, Thailand, Japan, Indonesia, Taiwan, Singapore etc. and

thus enriched his knowledge what he optimized best at the fields he is involved with.

27

Nizam-Hasina Foundation HospitalDirectorNizam-Hasina Foundation Hospital started its operation on 1st April 2012 with the approval obtained from the Directorate General of Health Services, Govt. of the People's Republic of Bangladesh. It has been established with a view to render eye treatment to the poor and destitute people of the island of Bhola. It aims at serving the suffering humanity. Apart from treating eye aliment the hospital also takes care of outdoor patients every day.

Karnaphuli Insurance Company LimitedDirectorKarnaphuli Insurance Company Limited was incorporated on 23rd November 1986 as a public limited company under the companies Act 1913, obtained the certificate of Registration for carrying on general Insurance Business from Controller of Capital Issues on 23rd November, 1986 being sponsored by a group of renowned business personalities, reputed industrialists and Journalist of the country. The Company started its commercial operation on 25th November, 1986 with a paid up capital of Tk. 30.00 million against Authorised Capital of Tk. 300.00 million. Presently Authorised Capital and paid up capital of the company have been raised up to Tk.600.00 Million and Tk. 407.04 Million respectively.Karnaphuli Insurance Company Limited is a first generation and top-tier non-life insurance company. The Company has been maintaining strong capital base, ethical business standards, corporate culture and corporate governance, superior underwriting skills and dynamic investment management since its inception.Nominated Director Mr. ANM Fazlul Karim Munshi, has joined Karnaphuli Insurance Company Limited as its Chief Executive Officer (CEO) recently. Prior to the assignment, he was the additional managing director and Head of marketing of the company.Mr. ANM Fazlul Karim Munshi joined Karnaphuli Insurance Co Ltd. in 1987 and served in different capacities for the last 30 years. He completed his BSS (Hons) and MSS in Economies from Dhaka University. He is the life member of Bangladesh Economic Association (BEA) and Bangladesh Young Economist Association (BYEA).


Riaz Uddin AhmedDirectorMr. Riaz Uddin Ahmed, a sponsor Director of Meghna Life Insurance Co. Ltd., comes from a well-educated and Industrialist family. He obtained his BBA degree from Sunway College, a renowned educational Institute of Kualalampur, Malaysia.A well experienced entrepreneur Mr. Riaz Uddin Ahmed believes in innovation and creativity, As such he also took part in Karnaphuli Insurance Co. Ltd. a leading General Insurance Company of the country as its sponsor Director. A very capable insurance personality Mr. Ahmed attended many Seminars, symposium, Conferences and

Summit in Bangladesh and abroad. His knowledge driven suggestion and guidance in the capacity of a Director of both Karnaphuli Insurance Co. Ltd. and Meghna Life Insurance Co. Ltd. rose to a reasonable height.A valiant social worker Mr. Riaz Uddin Ahmed visited India, Thailand, Singapore, Malaysia, Australia and Kingdom of Saudi Arabia.

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Sharmin NasirDirectorMrs. Sharmin Nasir was born in a renowned Muslim family in 1983. She obtained the Bachelor Degree in Social Welfare from Govt. Girls College, Barishal in 2004. With keen interest she invested in Meghna Life Insurance Co. Ltd. and Karnaphuli Insurance Co. Ltd. and became a member of Board of Directors of Meghna Life Insurance Co. Ltd. as well as the Director of Karnaphuli Insurance Co. Ltd. from Group-B. She travelled many countries for business purpose.

She is also involved with many socio-cultural activities and Welfare Organizations.


Dilruba SharminDirectorA well educated entrepreneur Mrs. Dilruba Sharmin was a meritorious student of Viqarunnessa Noon School and College. She is the daughter of a Banker and wife of an Industrialist. Mrs. Dilruba Sharmin takes keen interest in business, especially in Insurance business. As such she invested in Karnaphuli Insurance Company Limited and became a member of the Board of Directors of Karnaphuli Insurance Company Limited. She was duly elected as a Director of Meghna Life Insurance Company Limited from group-B. She traveled Singapore and Malaysia. She takes interest in serving the suffering humanity.

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Jannatul FardousDirectorMrs. Jannatul Fardous was born in 1984 in a respectable muslim family. Mrs. Jannatul Fardous married Mr. Hasan Ahmed who is a renowned business elite in Dhaka city. She took part in many social activities including employment of poor people in her locality and involved in serving the distressed people. She is a lady with pleasant personality and also involved in various development & social activities of the society for improvement of socio-economic condition of the common people.


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Prof. Md. Mazharul IslamDirector

Prof. Md. Mazharul Islam was born in 1965 in a respectable muslim family of Bhola. He is a highly qualified man and completed his MA in 1991 from Dhaka University. He is experienced in education line and working as Principal Incharge of 'Illisha Islamia Model College' Bhola. He is a local elite personality and respected by all and involved in social activities locally for promotion of life style of the poor/distressed people. He was the elected general secretary of district Shilpokola Academy & at present treasurer of executive committee Bhola District Rover Scout.

Umme Khadija MeghnaDirector

Umme Khadija Meghna was born in a family of entrepreneurs. She is a young lady with amiable disposition. She is promising and ambitious. She has keen interest in business affairs and is planning to build up a career accordingly. She traveled many countries.

Sabita FerdaushiDirector

Sabita Ferdaushi Director of Meghna Life Insurance Co. Ltd. comes from a respectable Muslim family. She is the daughter of Late Mustafizur Rahman, former Member of Parlament from Sandwip (Chattogram-3). Her brother Mr. Mahfuzur Rahman is also the Member of Parliament of the same constituency. She has obtained Masters Degree from University of Dhaka in 1992. She is involved with many social activities and Welfare Organizations. She traveled many countries of the world like India, Hong Kong, Thailand, Malaysia, U.K. & Australia.

Md. Nurul Islam MiahIndependent Director

Md. Nurul Islam Miah was born on May 1950 in a respectable Muslim family in the district of Shariatpur. He is a highly qualified person having vast experience in Banking and finance. Mr. Islam is a renowned Banker with long experience in operational Banking and was also related with the Training Academy of Rupali Bank Ltd. He is associated with many social and voluntary organization. He attended many seminars and symposiums relating in finance & banking.

Mr. Mohammad Ahsan Ibne KabirIndependent Director

Mr. Mohammad Ahsan Ibne Kabir was born in of Barishal. He obtained BBA (Major in Markeing) and MBA degree with excellent result from Dhaka University. He possesses a pleasant personality. He is a young entrepreneur & associated with socio-cultural activities.

Profile of Independent Directors

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Md. Yousuf Ali HowladerIndependent Director

Mr. Md. Yousuf ali Hawlader was born on 1st February 1945 in a respectable muslim family in Jhalakathi district. He is a commerce graduate & obtained M.Com (Management) degree from Dhaka University. He is a renowned Banker and obtained Banking Diploma (DAIBB). He became General Manager of Sonali Bank and Managing Director of Agrani Bank. He was also the MD of BSRS & Al-Arafa Islami Bank Ltd. He worked as Director ICB, Advisor BGMEA and Chairman Bangladesh Commerce Bank Ltd. He attended many Seminar/symposium at home and abroad. He visited Canada, UK. Pakistan and many others countries.

Chairman's MessageDear Shareholders,

Assalamu Alaikum,I take the privilege to convey my heartfelt felicitation to you all on behalf of the Board of Directors and on my own behalf for Participating in the 24th Annual General Meeting (virtual) of the Meghna Life Insurance Company Limited. I do now present before you the Annual Report on the overall performance of the Company together with the Audited Accounts and Financial Statements for the year ended 31st December 2019 and Auditor's Report thereon.

You know the scenario of insurance industry at present prevailing. We are facing unhealthy competitions and the circumstances are quite adverse and unfavorable. Even amidst such odd situations Meghna Life is trying to steer in right direction. In our endeavour we got guidance from respected members of the Board, support of the patrons and the most contribution made by the management team as well as our field force. We are confident that we shall be able to overcome all hurdles by virtue of our hard labour, dedication and sincerity. We are committed to our honorable policyholders and shareholders in particular. We shall try to maintain the same trend of our effort to achieve our targeted goal. I sincerely hope and expect that our shareholders will keenly feel the reality and extend their co-operation to run our business smoothly in the days to come.

In order to expand network of Meghna Life as well as to bring greater number of people under insurance coverage the Company sold policies under Ekok, Loko & Islami Bima (Takaful) Division all over the Country.

In conformity with the continuous success, the company declares yearly policy bonus. The bonus is paid at maturity or death which is earlier. In 2019, premium income of the Company stands at Tk. 435.08 crore. Since inception total premium income stood at Tk. 5,348.88 crore. Life fund increased to Taka 1,790.77 crore as on 31st December 2019. Meghna Life so far paid Tk. 74.81 crore as death claims, Tk. 1,013.48 crore as Survival Benefit, Tk. 772.07 crore as Maturity claims and Tk. 382.30 crore as Bonus to the policyholders. Presently a huge number of marketing personnel and 1,313 officials in Administration are engaged in Meghna Life Insurance Co. Ltd. to serve a huge number of honourable policyholders. Total asset of the Company stands at Tk. 1,932.81 crore. About Tk.1,470.81 crore have been invested in Government Securities and other approved Agencies/Sectors. If this trend of the premium income is continued, Life Fund by end of 2020 may increase substantially.

In our present competitive and dynamic environment it has become essential for organization to build and sustain competencies. Dynamic and growth oriented Company should recognise training as an important aspect. Training is a continuous learning process in human development. IDRA took initiative to impart training to Development officers of insurance sector in order to increase professional efficiency. We appreciate the effort. We believe training is a process through which a person enhances and develops his efficiency, capacity and effectiveness at work by improving and updating his knowledge and understanding the skills relevant to his or her job. During the year 2019 a substantial number of employees took professional training in various Training Academy, Centers and Institutes. Besides, our Public Relations Department publishes booklets, magazines, newsletters etc. on regular basis in order to educate our employees. Our prime purpose is to run the Company by people with sound professional knowledge and skills so that we may become market leader in due course.

It is needless to say that an insurance company basically belongs to the policyholders. So it is the prime duty of the Board to protect the interest of the policyholders so that they feel interested to buy insurance policy. Evil design should by all means be combated so that policyholders are not cheated. Utmost effort should also be given as to abide by the rules and regulations of the Regulators so that the image of the insurance industry is upheld. We will keep it in mind that the goodwill of a company is the capital of the company. So, under no circumstance the image of the company shall be jeopardized. I trust and believe that our work-force will have no stone unturned to render highest service to the existing policyholders as well as to prospective clients.

I have the privilege to inform you that the Board of Directors in a meeting held on 31-08-2020 recommended for declaration of 20% cash dividend to the Shareholders for the year 2019. I express my gratitude to Ministry of Finance, IDRA, BSEC, DSE, CSE, CDBL, Bangladesh Bank for their co-operation and support. We are ceaselessly trying to increase payment of dividend on investment of the Shareholders in future. By the grace of Almighty Allah we hope, in future, we will be in a position to reach the goal of success under the strict supervision of the new Insurance Laws to keep us fully equipped with the economic growth of the country.

Thank you all for your continuous support and co-operation.

Allah Hafez,

(Nizam Uddin Ahmed)Chairman

33

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34

Chief Executive Officer's ReportMeghna Life Insurance Company Limited was established in 1996 and gradually it became one of the largest insurance company in the life sector. The company has been operating its business activities abiding by the guidelines of Insurance Development and Regulatory Authority (IDRA), Bangladesh Securities and Exchange Commission (BSEC), Stock Exchanges. The Company has a wide network all over the country. The administrative and development work-force are engaged for earning premium and management of entire activities so as to achieve the overall target of the Company.

The Company could earn premium to the tune of Tk. 435.08 Crore in 2019.

The business growth of the Company for the last few years has been significant compared to other competitors. Up to 2019 the company made a steady and satisfactory growth both in earning of premium and income from investment which played a vital role to run the Company comfortably. We had to make tremendous effort for maintaining our continuous growth in respect of business, operational cost, investment, profit and to administer and train up Development people to cope with the hard and fast rule of IDRA. In spite of all the odd situations, we have been able to overcome the hurdles and could show a satisfactory performance during 2019. I extend my thanks to our Development personnel for their dedication, hard work for the achievement during 2019.

35

N.C. RudraChief Executive Officer

Mention may be made that the Insurance sector faced a new challenge in 2019 for implementation, compliance of IDRA guidelines and regulations though the rules were framed for betterment and good governance of the insurance industry as a whole. We express our sincere thanks to IDRA for their cooperation for operating our activities. It is worthwhile to state that Meghna Life Insurance Company is keen and very much particular to fulfill the regulatory requirements as well as to abide by the instructions of Regularity Authorities for the sake of good governance. It is expected that the Company will obtain benefits out of such compliances. In the field of investment as is required under rule, the Company maintained its tradition without any violation. The management of the Company gives priority to fulfill the statutory and regulatory requirements without fail for which we feel proud.

Since 2006 our Company's share are being traded in both the Stock Exchanges of the country. As at 31 December 2019, the market price of Company's share stood respectively at Tk. 51.70 in DSE and Tk. 57.00 in CSE.

It is to be noted that the Company has planned to maintain Central Data Base in the Head Office for the safety of the data of the policyholders. Apart from this the Company established 10 Nos. Composite Service Centers in Divisional Cities and places of business importance in order to ensure proper and prompt service to the policyholders. Meghna Life Insurance Company being a service organization considers the Human Resources as an effective tool for its development. The company pays due recognition to the employees for their contribution. Merit, seniority, managerial efficiency and sense of responsibility are given priority in promotion and to allow benefit to employees. The Company also gives highest importance to training for the development of human resources. As part of human resources development programs, Meghna Life Insurance Company endeavored to develop the skill, knowledge, attitude and professional competence of its manpower by arranging various local training. During 2019, many officers participated in local training programs on different subjects/courses and about 600 employees received in-service training. Finally, I take the privilege of extending my thanks to the valued policyholders, patrons and well-wishers for the trust, confidence and continuous support to the company. I also extend my thanks to the IDRA, BSEC, DSE, CSE, CDBL and Bankers for their co-operation and support for smooth functioning of the Company. I also convey my regards and gratefulness to the Chairman and Directors of the Board who provided generous cooperation to me which helped me to run the day to day activities smoothly and effectively. I am also pleased to put my appreciation for the commitment and dedication of the management team and all category of employees.

(N.C. Rudra)Chief Executive Officer

36

Report of the Audit CommitteeThe Audit Committee of Meghna Life Insurance Company Limited comprises of our Directors nominated by

the Board of Directors and it operates according to the Terms of Reference approved by the Board and in

compliance with the Bangladesh Securities and Exchange Commission Notification No.

BSEC/CMRRCD/2006/158/207/Admin/80 dated: 3rd June 2018.

The Committee ensures that a sound financial reporting system is well managed, providing accurate,

appropriate and timely information to the Board of Directors, management, regulatory bodies, shareholders

and other interested parties.

Four Meetings of the audit committee were held to carry out the following tasks:

(a) Oversee the financial reporting process;

(b) Monitor choice of accounting policies and principles;

(c) Monitor Internal Audit and Compliance process to ensure that it is adequately resourced, including

approval of the Internal Audit and Compliance Plan and review of the Internal Audit and Compliance

Report;

(d) Oversee hiring and performance of external auditors;

(e) Hold meeting with the external or statutory auditors for review of the annual financial statements before

submission to the Board for approval or adoption;

(f) Review along with the management, the annual financial statements before submission to the Board

for approval;

(g) Review along with the management, the quarterly and half yearly financial statements before

submission to the board for approval;

(h) Review the adequacy of internal audit function;

(i) Review the Management's Discussion and Analysis before disclosing in the Annual Report;

(j) Review statement of all related party transactions submitted by the management;

(k) Review Management Letters or Letter of Internal Control weakness issued by statutory auditors;

(l) Oversee the determination of audit fees based on scope and magnitude, level of expertise deployed

and time required for effective audit and evaluate the performance of external auditors.

Dated: Dhaka. August 31, 2020

(Md. Yousuf Ali Hawlader)Chairman,Audit Committee

37

38

Name of the Company (Megha Life Insurance Co. Ltd.)Declaration made by CEO and CFO

Date: 31-08-2020

The Board of Directors Meghna Life Insurance Co. Ltd. Head Office: Biman Bhaban 100, Motijheel C/A, Dhaka-1000.

Annexure-A[As per condition No. 1(5)(xxvi)]

Dear Sirs,

Subject: Declaration on Financial Statement for the year ended on 31st December 2019.

In this regard, we also certify that:-

(N.C. Rudra) Mohammad Tarek FCA.Chief Executive Officer (CEO) Chief Financial Officer (CFO)

Sincerely yours,

Pursuant to the condition No. 1(5)(xxvi) imposed vide the Commission's Notification No. BSEC/CMRRCD/2006/158/207/Admin/80: Dated 3rd June 2018 under section 2CC of the Securities and Exchange Ordinance, 1969, we do hereby declare that:

The Financial Statements of Meghna Life Insurance Co. Ltd. for the year ended on 31-12- 2019 have been prepared in compliance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in the Bangladesh and any departure there from has been adequately disclosed;

The estimates and judgments related to the financial statements were made on a prudent and reasonable basis, in order for the financial statements to reveal a true and fair view;

The from and substance of transactions and the Company's state of affairs have been reasonably and fairly presented in its financial statements;

To ensure above, the Company has taken proper and adequate care in installing a system of internal control and maintenance of accounting records;

Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures of the Company were consistently followed; and

The management's use of the going concern basis of accounting in preparing the financial statements is appropriate and there exists no material uncertainty related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern.

(1)

We have reviewed the financial statements for the year ended on 31-12-2019 and that to the best of our knowledge and belief:

(i)

There are, to the best of knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the code of conduct for the company's Board of Directors or its members.

(ii)

these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(a)

these statements collectively present true and fair view of the Company's affairs and are in compliance with existing accounting standards and applicable laws.

(b)

(2)

(3)

(4)

(5)

(6)

Report on Corporate Governance

IntroductionMeghna Life Insurance Company Ltd is keen and committed to establish high standard of corporate governance. Corporate governance aims at ensuring participation, transparency, accountability and responsibility. The Board of Directors formulates objectives and strategic plans, goals and the management plays the role of executing those plans under the directives of different Regulatory Authorities.

Composition of BoardThe Board is comprised of 15 (Fifteen) Directors out of which 08 (Eight) are from 'A' Group and 04 (Four) are from 'B' Group (Shareholder). There are 3 (Three) Independent Directors. The Board of Directors is in full control of the company's affairs and is also accountable to the shareholders. Audit committee is constituted with Directors of the Board. But the Chairman of the Board is not a member of the Committee. The Board reviews strategic issues on a regular basis and exercises control over the performance of the Company.

Responsibilities of the BoardThe Board meets regularly depending upon the requirement for decision on specific issues. The Board has a schedule of matters reserved for decision including major expenditure, significant investment proposals and policy matters. In certain cases, specific responsibilities are delegated to Committees within the defined Terms of Reference (TOR). Senior Management Personnel are being invited to attend the Board meeting to present matters on the business under transaction by the Board. One third of the Directors must retire and seek re-appointment in every Annual General Meeting as per Articles of Association of the Company as well as Companies Act 1994. The Chairman of the Board is appointed from amongst the Directors.

Separate role of Chairman and Chief Executive Officer (CEO)In the Company, the role of Chairman and the CEO is separate and independent from each other. The CEO is responsible for the Executive management of the company's business activities. The Chairman has got no executive management function/responsibility; he just runs the Board and formulates policy guidelines and directives which are beneficial for the company as well as to protect the interest of policy holders & shareholders.

Audit CommitteeThe Audit Committee is constituted by the Board consisting of 3 (Three) members from The Board of Directors. One of the Independent Directors is the Chairman of Audit Committee. Regular meetings are held as per requirement of the Regulatory Authorities. Different types of Audited and Unaudited accounts are placed before the committee which in turn recommend those to the Board for approval. Audit Committee follows the various guidelines, procedures, policies and directives of Regularly Authority to ensure better internal control. The Committee gives directives to follow in order to improve overall performance.

Relationship with shareholdersThe Company reports to its shareholders twice a year through Half-yearly (unaudited) report and detailed audited Annual Report. The Company also circulates Quarterly Accounts (unaudited) in 2 widely circulated national dailies & one online news paper for the information of the shareholders (as per the requirement of the regulatory authority). Normally once a year the Board meets with the shareholder in the AGM. Various price sensitive information are also circulated in the newspapers for the information of the shareholder with a view to establish a bridge between the company and the shareholders.

40

Annexure -1

Board Meeting Attendance:During the year 2019 Board Meetings were held and attendance by each Directors are given below:

Sl. No. 1 Mr. Nizam Uddin Ahmed 6

2. Mrs. Hasina Nizam 6

3. Mr. Nasir Uddin Ahmed 6

4. Mr. Riaz Uddin Ahmed 6

5. Mrs. Jannatul Fardous 6

6. Karnaphuli Insurance Co. Ltd. 6

7. Nizam-Hasina Foundation Hospital 6

8 Umme Khadija Meghna 6

9. Mrs. Sharmin Nasir 6

10 Mrs. Dilruba Sharmin 6

11. Prof. Md. Mazharul Islam 6

12. Mr. Md. Yousuf Ali Howlader 6

13. Mr. Md. Nurul Islam Miah 6

14. Mr. Md. Ahsan Ibne Kabir 6

Name of Directors Attendance

The pattern of share holding as at December 31, 2019.

i) Parent/Subsidiary/Associated companies and other related Parties : Nil

Shareholding of Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses & minor children : Nil

ii) Shareholding of Directors:

Sl. No. 1 Mr. Nizam Uddin Ahmed Chairman 10,31,327

2. Mrs. Hasina Nizam Vice Chairman 7,21,960

3. Mr. Nasir Uddin Ahmed Director 13,79,599

4. Mr. Riaz Uddin Ahmed Director 6,76,714

5. Mrs. Jannatul Fardous Director 10,06,161

6. Karnphuli Insurance Company Limited Director 13,48,000

7. Umme Khadija Meghna Director 1,67,715

8. Nizam-Hasina Foundation Hospital Director 8,04,050

9. Mrs. Sharmin Nasir Director 1,76,520

10. Mrs. Dilruba Sharmin Director 1,67,619

11. Professor Md. Mazharul Islam Director 5,825

12. Sabita Ferdoushi Director 6,73,900

Independent Directors

13. Mr. Md. Yousuf Ali Howlader Independent Director -

14. Mr. Md. Nurul Islam Miah Independent Director -

15. Mr. Md. Ahsan Ibne Kabir Independent Director -

Name Position No. of shares

iii) Shareholding of Executives : Niliv) Shareholders holding 10% or more voting interest in the company : Nil

Annexure -1

41

STATUS OF COMPALIANCE OF CORPORATE GOVERNANCEFor the year ended 31st December 2019

Status of compliance with conditions imposed by the Bangladesh Securities and Exchange Commission:

(Report under Condition No. 9.00)

ConditionNo.

Title Remarks( If any)

Board's SizeThe number of Board Directors should not be less than 5 (five) and more than 20(twenty).

At least one fifth (1/5) of the total number of directors in the company's board shall be independent directors.

Board of Directors

Status of compliance for the year ended 31st December 2019 with conditions imposed by the commission's Notification No. BSEC/CMRRCD/2006-158/207/Admin/80 dated June 03, 2018 issued under section 2CC of the Bangladesh Securities and Exchange Ordinance, 1969 is presented below:

1

Independent Directors1.(2)

1.(1)

(a)

Compliance Status(Put in the appropriate column)

Complied Not Complied

15 (Fifteen) Board member including 3 (three) independent Directors

There are three independent Directors in the Board

Purpose of Clause "Independent Director":(b)

Who is not a sponsor of the company and is not connected with the companies any sponsor or director or nominee director or shareholder of the company or any of its associates, sister concerns, subsidiaries and parents or holding Entities who holds one percent (1%) or more share of the total paid-up shares of the company on the basis of family relationship. His/her family members also should not hold above mentioned shares in the company.

(b) (ii)

Who has not been an executive of the company in immediately preceding 2(two) financial years.

(b) (iii)

Who does not have any other relationship whether pecuniary or otherwise, with the company or its subsidiary/ associated companies.

(b) (iv)

Who is not a member or TREC (Trading Right Entitlement Certificate) holder, director or officer of ant stock exchange;

(b) (v)

Annexure - C

42

Who either does not hold any share or holds less than 1% shares to the total paid-up shares of the company;

(b) (i)

Who is not a shareholder, director excepting independent director or officer of any member or TREC holder of stock exchange or an intermediary of the capital market;

(b) (vi)

Who is not a partner or an executive or was not a partner or an executive during the preceding 3(three) years of the concerned company's statutory audit firm or audit firm engaged in internal audit services or audit firm conducting special audit or professional certifying compliance of this Code.

(b) (vii)

Qualification of Independent Director (ID)1.(3)

43

ConditionNo.


Compliance Status(Put in the appropriate column)Complied Not Complied

Who shall not be an independent director in more than 5(five) listed companies.

(b) (viii)

Who has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan or any advance to a bank or a Non-Bank Financial Institution (NBFI).

(b) (ix)

Who has not been convicted for a criminal offence involving moral turpitude;

(b) (x)

The independent director(s) shall be appointed by the board of directors and approved by the shareholders in the Annual General Meeting (AGM).

(c)

The post of independent director(s) cannot remain vacant for more than 90 (ninety) days.

(d)

The tenure of office of an independent director shall be for a period of 3 (three) years, which may be extended for 1 (one) term only.

(e)

Independent Director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial, regulatory and corporate laws and can make meaningful contribution to business.

(a)

Independent director shall have following qualifications:

(b)

Business Leader who is or was a promoter or director of an unlisted company having minimum paid-up capital of Tk. 100.00 million or any listed company or a member of any national or international chamber of commerce or business association; or

(b) (i)

Corporate leader who is or was a top level executive not lower than Chief Executive Officer or managing Director or Deputy Managing Director or Chief Financial Officer or Head of Finance or Accounts or Company Secretary or Head of Internal Audit and Compliance or Head of Legal Service or a Candidate with equivalent position of an unlisted company having minimum paid up capital of Tk. 100.00 million or of a listed company; or

(b) (ii)

Former official of government or statutory or autonomous or regulatory body in the position not below 5th Grade of the national pay scale, who has a least educational background of bachelor degree in economics or commerce or business or law; or

(b) (iii)

University Teacher who has educational background in Economics or Commerce or Business Studies or Law; or

None

None

None(b) (iv)

44

ConditionNo.


The positions of the Chairman of the Board and the Managing Director (MD) and / or the Chief Executive Officer of the companies shall be filled by different individuals.

Chairman of the Board and Chief Executive Officer1.(4)

The Directors' Report to shareholders1.(5)

(a)

Professional who is or was an advocate practicing at least in the High court Division of Bangladesh supreme court or a chartered Accountant or cost and Management Accountant or chartered Financial Analyst or chartered certified Accountant or certified public Accountant or chartered management Accountant or chartered Secretary or equivalent Qualification;

(b) (v)

The independent director shall have at least 10(ten) years of experiences in any field mentioned in clause (b)

(c)

In special cases the above qualifications may be relaxed subject to prior approval of the commission.

(d)


The positions of the Chairman of the Board and the Managing Director (MD) and / or the Chief Executive Officer of the companies shall be filled by different individuals.

(b)

The Chairperson of the Board shall be elected from among the non-executive director of the company;

(c)

The Board shall clearly define respective roles and responsibilities of the chairperson and the managing Director and/or Chief Executive Officer;

(d)

In the absence of the Chairperson of the Board, the remaining members may elect one of themselves from non-executive directors as Chairperson for that particular Board's meeting the reason of absence of the regular Chairperson shall be duly recorded in the minutes.

(e)

Industry outlook and possible future development in the industry.

(i)

Segment-wise or product-wise performance.(i)

Risks and concerns.(iii)

A discussion on cost of Goods sold, Gross profit margin and Net Profit margin.

(iv)

Discussion on continuity of any Extra-ordinary gain or loss.

(v)

None

None

None

Basis for related party transactions-a statement of all related party transactions should be disclosed in the annual report.

(vi)None

Utilization of proceeds from public issues, rights issues and/ or through any others instrument.

(vii)N/A

N/A

45

ConditionNo.


An explanation if the financial result deteriorate after the company goes for Initial Public Offering (IPO),Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc.

(viii)

If significant variance occurs between Quarterly Financial performance and Annual Financial Statements the management shall explain about the variance on their Annual Report.

(ix)


N/A

None

Remuneration to directors including independent directors.

(x)

Proper books of account of the issuer company have been maintained.

(xii)

The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

(xi)

None

None

Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment.

(xiii)

International Accounting Standards (IAS)/ Bangladesh Accounting Standards (BAS)/international Financial Reporting Standards (IFRS)/ Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there from has been adequately disclosed.

(xiv)

The system of internal control is sound in design and has been effectively implemented and monitored.

(xv)

A Statement that minority shareholders have been protected from abusive actions by, or in the interest of, controlling shareholders acting either directly or indirectly and have effective means of redress.

(xvi)

Significant deviations from the last year's operating results of the issuer company shall be highlighted and the reasons thereof should be explained.

(xviii)

Key operating and financial data of at least preceding 5(five) years shall be summarized.

(xix)

There are no significant doubts upon the issuer company's ability to continue as a going concern. If the issuer company is not considered to be a going concern, the fact along with reasons thereof should be disclosed.

(xvii)

N/Aif the issuer company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given.

(xx) Dividend has been recommended for the year ended 31 December 2019

46

ConditionNo.


The pattern of shareholdings and name wise details disclosing the aggregate number of shares:

(xxiii)

Appointment/Reappointment of Directors:(xxiv)

Compliance Status(Put in the appropriate column)

Not Complied

None

None

None

None

None

N/A

Board's statement to the effect that no bonus share or stock dividend has been or shall be declared as interim dividend

The number of Board meetings held during the year and attendance by each director shall be disclosed.

(xxi)

Parent/Subsidiary/ Associated Companies and other related parties (Name wise details).

(xxiii) (a)

Directors, Chief Executive Officer, Company Secretary, chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details).

(xxiii) (b)

Executives (top five salaried employees of the company, other than the Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer and Head of Internal Audit).

(xxiii) (c)

Shareholders holding ten percent (10%) or more Voting interest in the company (name wise details).

(xxiii) (d)

A brief resume of the director.(xxiv)(a)

Nature of his/her expertise in specific functional areas.

(xxiv (b)

Names of companies in which the person also holds the directorship and the membership of committees of the board.

(xxi) (c)

A management's Discussion and Analysis signed by CEO or MD Presenting detailed analysis of the company's position and operations along with a brief discussion of changes in the financial statements, among other, focusing on:

(xxv)

Accounting policies and estimation for preparation of financial statements;

(xxv) (a)

Changes in Accounting policies and estimation, if any, clearly describing the effect on financial performance or results and financial position as well as cash flows in absolute figure for such changes;

(xxv) (b)

Comparative analysis (including effects of inflation) of financial performance or results and financial position as well as cash flows for current financial year with immediate preceding five years explaining reasons thereof;

(xxv) (c)

No bonus share or Stock dividend has been declared as interim dividend during the year 2019.

(xxii)

47

ConditionNo.


Governance of Board of Directors of Subsidiary Company

2.


compare such financial performance or results and financial position as well as cash flows with the peer industry scenario;

(xxv) (d)

briefly explain the financial and economic scenario of the country and the globe;

(xxv) (e)

risks and concerns issues related to the financial statements, explaining such risk and concerns mitigation plan of the company; and

(xxv)(f)

future plan or projection or forecast for company's operation, performance and financial position, with justification thereof, i.e., actual position shall be explained to the shareholders in the next AGM

(xxv) (g)

Declaration or certification by the CEO and the CFO to the Board as required under condition No. 3(3) shall be disclosed as per Annexure-A; and

(xxvi)

The report as well as certificate regarding compliance of conditions of this Code as required under condition No. 9 shall be disclosed as per Annexure-B and Annexure-C.

(xxvii)

The Board shall lay down a code of conduct, based on the recommendation of the Nomination and Remuneration Committee (NRC) at condition No. 6, for the Chairperson of the Board, other board members and Chief Executive Officer of the company;

(a)

The code of conduct as determined by the NRC shall be posted on the website of the company including, among others, prudent conduct and behavior; confidentiality; conflict of interest; compliance with laws, rules and regulations; prohibition of insider trading; relationship with environment, employees, customers and suppliers; and independency.

(b)

Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the composition of the board of Directors of the subsidiary company.

(a)

Meetings of the Board of Directors the company shall conduct its Board meetings and record the minutes of the meetings as well as keep required books and records in line with the provisions of the relevant Bangladesh Secretarial Standards (BSS) as adopted by the Institute of chartered secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this code.

1.(6)

Code of Conduct for the Chairperson, other Board members and Chief Executive officer:

1.(7)

48

ConditionNo.


Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit and Compliance (HIAC) and Company Secretary (CS):

3.

At least 1 (one) independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company.

(b)

The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company.

(c)


The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also.

(d)

The Audit Committee of the holding company shall also review the financial statements, in particular the investments made by the subsidiary company.

(e)

The Board shall appoint a Managing Director (MD) or Chief Executive Officer (CEO), a Company Secretary (CS), a Chief Financial Officer (CFO) and a Head of Internal Audit and Compliance (HIAC):

(a)Appointment:(e)

The positions of the Managing Director (MD) or Chief Executive Officer (CEO), Company Secretary (CS), Chief Financial Officer (CFO) and Head of Internal Audit and Compliance (HIAC) shall be filled by different individuals;

(b)

The MD or CEO, CS, CFO and HIAC of a listed company shall not hold any executive position in any other company at the same time;

(c)

The Board shall clearly define respective roles, responsibilities and duties of the CFO, the HIAC and the CS;

(d)

The MD or CEO, CS, CFO and HIAC shall not be removed from their position without approval of the Board as well as immediate dissemination to the commission and stock exchange(s).

(e)

Requirement to attend Board of Directors' Meetings: the MD or CEO, CS, CFO and HIAC of the company shall attend the meetings of the Board:

(2)

The MD or CEO and CFO shall certify to the Board that they have reviewed financial statements for the year and that to the best of their knowledge and belief:

(a)

Duties of Managing Director (MD) or Chief Executive Officer (CEO) and Chief Financial Officer (CFO):

(3)

49

ConditionNo.


4.

These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; and

(a) (i)

These statements together present a true and fair view of the company's affairs and are in compliance with existing accounting standards and applicable laws;

(a) (ii)


The MD or CEO and CFO shall also certify that there are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or in violation of the code of conduct for the company's board or its members:

(b)

The certification of the MD or CEO and CFO shall be disclosed in the Annual Report.

(c)

Audit Committee; and(i)

Responsibility to the Board of Directors(1)

Nomination and Remuneration Committee.(ii)

The company shall have an Audit Committee as a sub-committee of the Board of Directors.

(a)

The Audit Committee shall assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business.

(b)

Board of Director's committee: For ensuring good governance in the company, the Board shall have at least following subcommittees:

5. Audit Committee:

The Audit committee shall be responsible to the board of Directors. The duties of the Audit Committee shall be clearly set forth in writing.

(c)

The Audit Committee shall be composed of at least 3(three) members.

(a)

The Board shall appoint members of the Audit Committee who shall be non-executive directors of the company excepting chairperson of the Board and shall include at least 1 (one) independent director;

(b)

All members of the audit committee should be "financially literate" and at least 1 (one) member shall have accounting or related financial management background and 10(ten) years of such experience;

(c)

Constitution of the Audit Committee(2)

When the term of service of any Committee member expires or there is any circumstance causing any Committee member to be unable to hold office before expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed

(d)

50

ConditionNo.


number of 3 (three) persons, the Board shall appoint the new Committee member to fill up the vacancy immediately or not later than 1 (one) month from the date of vacancy in the Committee to ensure continuity of the performance of work of the Audit Committee;The company secretary shall act as the secretary of the Committee.

(e)

The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director.

(f)

The Board of Directors shall select 1 (one) member of the Audit Committee to be chairman of the Audit Committee, who shall be an independent director.

(a)

in the absence of the Chairperson of the Audit Committee, the remaining members may elect one of themselves as Chairperson for that particular meeting, in that case there shall be no problem of constituting a quorum as required under condition No. 5(4) (b) and the reason of absence of the regular Chairperson shall be duly recorded in the minutes.

(b)

The Audit Committee shall conduct at least its four meetings in a financial year: Provided that any emergency meeting in addition to regular meeting may be convened at the request of any one of the members of the committee;

(a)

The quorum of the meeting of the Audit Committee shall be constituted in presence of either two members or two third of the members of the Audit Committee, whichever is higher, where presence of an independent director is a must.

(b)

Oversee the financial reporting process.(a)

Chairman of the audit committee shall remain present in the Annual General meeting (AGM).

(c)


(3) Chairman of the Audit Committee:

Monitor choice of accounting policies and principles.

(b)

Monitor Internal control Risk management process.

(c)

Oversee hiring and performance of external auditors

(d)

hold meeting with the external or statutory auditors for review of the annual financial statements before submission to the Board for approval or adoption;

(e)

Review along with the management, the annual financial statements before submission to the board for approval.

(f)

(4) Meeting of the Audit committee:

(5) Role of Audit Committee:

51

ConditionNo.


Review along with the management, the quarterly and half yearly financial statements before submission to the board for approval.

(g)

Review the adequacy of internal audit function.(h)

Review the management's Discussion and Analysis before disclosing in the Annual Report;

(i)

Review statement of significant related party transactions submitted by the management.

(j)

Review Management letters/Letter of Internal Control weakness issued by statutory auditors.

(k)

Oversee the determination of audit fees based on scope and magnitude, level of expertise deployed and time required for effective audit and evaluate the performance of external auditors; and

(l)

Oversee whether the proceeds raised through Initial public offering (IPO) or Repeat Public Offering (RPO) or Rights Share Offer have been utilized as per the purposes stated in relevant offer document or prospectus approved by the commission;

(m)


(6) Reporting of the Audit Committee (a) Reporting to the Board of Directors

(i) The Audit Committee shall report on its activities to the Board of Directors.

(ii) The Audit Committee shall immediately report to the Board of Directors on the following findings, if any:

(ii)(a) Report on conflicts of interests.

(ii)(b) Suspected or presumed fraud or irregularity or material defect in the internal control system.

(ii)(c) Suspected infringement of laws, including securities related laws, rules and regulations.

(ii)(d) Any other matter which shall be disclosed to the Board of Directors immediately.

(b) Reporting to the Authorities: If the Audit Committee has reported to the Board of Directors about anything which has material impact on the financial condition and results of operation and has discussed with the Board of Directors and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignore, the Audit Committee shall report such finding to the Board of Directors for three times or completion of a period of 6(six) months from the date of first reporting to the Board of Directors, whichever is earlier.

(7) Reporting to the shareholders and General Investors: Report on activities carried out by the Audit Committee, including any report made to the Board of Directors under Condition 3.4.1 (ii) above during the year, shall be signed by the Chairman of the Audit Committee and disclosed in the annual report of the issuer company.

N/A

None

None

None

None

None

None

52

ConditionNo.



(a) The company shall have a Nomination and Remuneration Committee (NRC) as a subcommittee of the Board;

(b) The NRC shall assist the Board in formulation of the nomination criteria or policy for determining qualifications, positive attributes, experiences and independence of directors and to level executive as well as a policy for formal

(1) Responsibility to the Board of Directors

(2) Constitution of the NRC

(c) The Terms of Reference (TOR) of the NRC shall be clearly set forth in writing covering the areas stated at the condition No. 6(5) (b)

(a) The Committee shall comprise of at least three members including an independent director;

(b) All members of the Committee shall be non-executive directors;

(c) Members of the Committee shall be nominated and appointed by the Board;

(d) The Board shall have authority to remove and appoint any member of the Committee;

(e) In case of death, resignation, disqualification, or removal of any member of the committee or in any other cases of vacancies, the board shall fill the vacancy within 180 (one hundred eighty) days of occurring such vacancy in the Committee;

(f) The Chairperson of the Committee may appoint or co-opt any external expert and/or member(s) of staff to the Committee as advisor who shall be non-voting member, if the Chairperson feels that advice or suggestion from such external expert and/or member(s) of staff shall be required or valuable for the Committee;

(6) Nomination and Remuneration Committee (NRC)

(g) The company secretary shall act as the secretary of the Committee;

(3) Chairperson of the NRC

(h) The quorum of the NRC meeting shall not constitute without attendance of at least an independent director;

(h) The Board shall select 1 (one) member of the NRC to be Chairperson of the Committee, who shall be an independent director;

(i) No member of the NRC shall receive, either directly or indirectly, any remuneration for any advisory or consultancy role or otherwise, other than Director's fees or honorarium from the company.

None

None

53

ConditionNo.



(a) The Board shall select 1 (one) member of the NRC to be Chairperson of the Committee, who shall be an independent director;

(a) The NRC shall conduct at least one meeting in a financial year;

(b) In the absence of the Chairperson of the NRC, the remaining members may elect one of themselves as Chairperson for that particular meeting, the reason of absence of the regular Chairperson shall be duly recorded in the minutes;

(c) The Chairperson of the NRC shall attend the annual general meeting (AGM) to answer the queries of the shareholders.

(4) Meeting of the NRC

(5) Role of the NRC

(b) The Chairperson of the NRC may convene any emergency meeting upon request by any member of the NRC;

(c) The quorum of the meeting of the NRC shall be constituted in presence of either two members or two third of the members of the Committee, whichever is higher, where presence of an independent director is must as required under condition No. 6(2) (h)

(d) The proceedings of each meeting of the NRC shall duly be recorded in the minutes and such minutes shall be confirmed in the next meeting of the NRC.

(a) NRC shall be independent and responsible or accountable to the Board and to the shareholders;

(a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate suitable directors to run the company successfully;

(b) NRC shall oversee, among others, the following matters and make report with recommendation to the Board:

(b) The relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(i) Formulating the criteria for determining qualifications, positive attributes and independence of a director and recommend a policy to the Board, relating to the remuneration of the directors, top level executive, considering the following:

(c) Remuneration to directors, top level executive involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate o the working of the company and its goals;

54

ConditionNo.



(ii)6 ( 5 ) (b)

Devising a policy on Board's diversity taking into consideration age, gender, experience, ethnicity, educational background and nationality;

(c)6.(5) The company shall disclose the nomination and remuneration policy and the evaluation criteria and activities of NRC during the year at a glance in its annual report.

(i) Appraisal or valuation services or fairness opinions.

(1) The issuer Company shall not engage its external or statutory auditors to perform the following services of the company, namely:

(iv) Formulating the criteria for evaluation of performance of independent directors and the Board;

(iii) identifying persons who are qualified to become directors and who may be appointed in op level executive position in accordance with the criteria laid down, and recommend their appointment and removal to the Board;

7. External/Statutory Auditors

(ii) Financial information systems design and implementation.

(iii) Book-keeping or other services related to the accounting records or financial statements.

(iv) Broker-dealer services.

(v) Actuarial services.

(vi) Internal audit services.(vii) Any other service that the Audit Committee

determines.(viii) Audit or certification services on compliance of

corporate governance as required under condition No. 9(n); and

(ix) Any other service that creates conflict of interest.(2) No partner or employees of the external audit

firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that company.

(3) Representative of external or statutory auditors shall remain present in the Shareholder's Meeting (Annual General Meeting or Extraordinary General Meeting) to answer the queries of the shareholders.

(v) Identifying the company's needs for employees at different levels and determine their selection, transfer or replacement and promotion criteria; and

(vi) Developing, recommending and reviewing annually the company's human resources and training policies;

55

ConditionNo.



(2) The professional who will provide the certificate on compliance of this corporate Governance code shall be appointed by the shareholders in the annual general meeting.

(3) The directors of the company shall state, in accordance with the Annexure attached, in the directors' report whether the company has complied with these conditions.

(2) The company shall keep the website functional from the date of listing.

(1) The company shall have an Official website linked with the website of the stock exchange.

8. Maintaining a website by the company.

9. Reporting and Compliance of Corporate Governance

(3) The company shall make available the detailed disclosures on its website as required under the listing regulations of the concerned stock exchange(s).

(1) The company shall obtain a certificate from a practicing professional Accountant/ Secretary (Chartered Accountant/ Costand Management Accountant/ Chartered Secretary) regarding compliance of conditions of corporate Governance Guidelines of the commission and shall send the same to the shareholders along with the Annual Report on a yearly basis.

Director’s Report

56

Bismillahir Rahmanir Rahim,

Dear Shareholders, Assalamu Alaikum,

On behalf of the Board of Directors and on my own behalf, I have the privilege to welcome you all to the 24th

Annual General Meeting of the Meghna Life Insurance Company Limited and present before you the Annual

Report on the performance of the company together with the Audited Accounts and Financial Statements for

the year ended 31st December, 2019 and the Auditors' Report thereon.

It is with much pleasure to bring to the notice of the honorable Shareholders that inspite of unfavourable

economic condition prevailing in the country and tough competition among different insurers the year 2019

was another successful year of the company. This was possible because of the strength of our marketing

forces, soundness of our organisational structure and our constant endeavour to review our business

strategies wherever necessary keeping in view of the quality of business, improved customer services and

reduction of cost in all spheres of business operation.

Business performance:

During the year the Company has earned gross premium income to the tune of Tk. 435.08 crore as against

Tk. 432.91crore in the previous year. The quantum of premium earning is comprised of the following:

(a) Tk. 246.59 crore of premium is earned from 35,431 Ekok Bima valued policies as against Tk. 256.37

crore in the previous year. Rate of decrease is 3.81%.

(b) Tk. 92.19 crore of premium is earned from 28,938 Loko Bima (Micro) valued policies as against Tk. 83.26

crore in the previous year. Rate of increase is 10.13%.

(c) Tk. 93.22 crore of premium is earned from 15,179 Islami Bima (Takaful) valued policies as against Tk.

90.05 crore in the previous year showing an increase of 3.52%.

(d) Tk. 3.07 crore of premium is earned from 57 Group Bima covering lives against Tk. 3.23 crore in the

previous year. The rate of decrease is 4.96%.

Industry outlook & future development:Insurance Industry in Bangladesh passed a century long history of evolution. But it is needless to say that it

is trying hard to achieve its full potential. At present 32 Nos. life insurance companies including a state

owned corporation (JBC) are operating business activities in a small market. People in general do believe

that companies are not keen, cordial and careful in making payment of insurance claims in time. As a result

prospective clients are hesitant to buy life policies which has a negative impact on growth of business. This

negative attitude is an impediment to usual growth and plays a minimum contribution to GDP.

Bangladesh is a country of 170 million populations. These is an ample opportunity to flourish life insurance

business in Bangladesh. It is believed that in order to do better business ethical standard shall have to be

maintained so that people (prospective client) bank our us. Our field force should be trustworthy. Goodwill

and image of the industry shall have to be upheld. Our regulatory authority IDRA is now monitoring our

activities constantly for the sake of good governance of the sector. IDRA have taken many Initiatives for the

betterment of life insurance sectors. They deserve apperciotion.

Director’s ReportThe break-up of premium income into its components with corresponding figure of 2018 is given below: Particulars 2019 2018 Increase (Decrease) (In crore Taka) (In crore Taka) (%)First year premium:Ekok Bima 54.27 60.66 (10.53)%Loko Bima-Micro 28.80 20.99 37.21%Islami Bima (Takaful) 20.04 21.00 (4.57)% 103.11 102.65 0.45%Renewal premium: Ekok Bima 192.33 195.71 (1.73)%Loko Bima 63.39 62.27 (1.80)%Islami Bima (Takaful) 73.18 69.05 5.98% 328.89 327.03 0.57%Group Insurance premium 3.07 3.23 (4.95)%Total Gross premium 435.08 432.91 0.50%Reinsurance premium 0.54 1.45 (62.76)%Net premium 434.54 431.46 0.71%Investment Income 102.33 96.35 6.21%Other Income 3.18 1.60 (98.75)%Net Income 540.05 529.41 2.01% Life Fund 1,790.77 1,686.73 6.17%Management Expenses:Commission 61.19 56.79 7.75%Other overhead 64.11 66.71 (3.90)%Total Tk. 125.30 123.50 1.46%Management Expenses as % of Gross premium 28.80 28.52 0.98%Life Fund:Life Fund of the Company has continued to grow significantly. The gross accretion of life fund in the year 2019 is Tk. 104.04 crore. Total Life Fund of the Company as at 31st December, 2019 stood at Tk.1,790.77 crores as against Tk. 1,686.73 crore in the preceding year. Growth rate of Life Fund is 6.17%.Actuarial Valuation:The Board of Directors of the Company decided to conduct Actuarial Valuation and accordingly the Actuarial Valuation of the assets & liabilities of the company as on December 31, 2019 is carried out. The valuation results have shown a surplus of Tk. 98.11 crore out of which Tk. 76.48 crore have been allocated for Bonus to Policyholders.Investment Portfolio:Investment portfolio of the Company other than Fixed Deposits with Banks has increased to Tk. 680.72 Crore from Tk. 647.56 Crore in the previous year, the percentage of increase stands at 5.13% over the previous year. Fixed Deposit with Banks has increased to Tk. 571.66 Crore from Tk. 524.37 Crore in 2019 showing an increase of 9.02%. Besides the balances on short Term Deposit Accounts with various Banks at the end of the year stands at Tk. 188.88 Crore which is under process for further investment.During the year the company has earned Tk. 102.33 Crore from Investment portfolio as against Tk. 96.35 Crore in the Previous year. Services to Policyholder: The reputation and progress of the company largely depend on prompt and efficient services rendered to the policyholders. MLICL has accomplished an agreement with Dhaka Bank Ltd. in respect of electronic fund transfer (EFT) to ensure prompt, accurate & timely payment of claim to policyholder. Keeping this in view we have further strengthened our Servicing and IT Departments for rendering quick services to Policyholders and marketing personnel's.

Internal Control System:In order to safeguard the interest of the company as well as the policy holders and shareholders, the Board and management have adopted necessary steps and insurance to make sure that the policies and plans are implemented in operating the business. The Officials works in the internal Audit Department keep sharp eye for ensuring the accuracy, reliability as well as the integrity of each financial transaction. The Board aims at upholding the quality in every field of operations so that the Company enjoys a long lasting goodwill.

Bangladesh Economy:Bangladesh economy has maintained sustainable growth and attained GDP growth at 8.13% on average during the last decade according to Bangladesh Bureau of Statistics (BBS), The GDP growth stood at 7.86% in financial year 2018-2019.Provisional extimates of GDP for Financial Year 2018-2019 indicate an expansion of the economy with growth of 8.13 in real term as Company to 7.86 (final estimate) in Financial Year 2017-2018.

57

Directors' ReportThe services to policyholders prolongation has portrayed a steady picture Global growth for 2019 in estimated at 3.2% as in the october 2019 world Economic outlook woe forecast. The global economy is projected to grow at 3.5% in 2020.

Network with a few hundred offices in the rural as well as Urban Centres throughout the Country render all necessary services to the policyholders. During the year the management has decided to install computer in the outstation Zonal Offices gradually and by now activities of many Zonal Offices have already been computerised and data are transferred thoroughly online technology.

The settlement of claims is a very important aspect of services to the policyholders. Hence the company has laid great emphasis on expeditious settlement of Maturity, survival as well as death claims. Recently the Company has decentralised the claims settlement operation through 10 CSC Offices for rendering prompt services to the policyholders. During the year the company has settled claims for Tk. 287.94 Crore compared to claims for Tk. 259.91 Crore in the previous year.

IT Infrastructure and its Use:Information Technology and Communication system of MLICL is in advance stage. There is a full fledged Information Technology Department at Head Office with 24 IT professionals under the guidance of a Executive Director (Sr. System Analyst). The department is mainly responsible to provide all necessary automation services for day to day operation as well as to make all available information which are needed at each level of management for quick and timely dispensation of urgent and important issues. The entire work has been suitably divided into three Divisions on the basis of product lines. Presently all Divisions are working independently with stand-alone arrangements to computerize policy information of a zone for effective control and management of the respective product lines. At present, total 244 offices of three divisions all over the Country have been automated with computers. Moreover, all 244 offices are equipped with Wireless VPN Internet service to facilitate online data transfer and the plan is to provide this service to all other offices in near future. Ten (10) Composite service centres (CSC) in Dhaka, Cumilla, Hazigonj, Barishal, Chattogram, Sylhet, Jashore, Bogura, Tangail, Rangpur have been setup with real-time fiber optics network connection. All services of Head office have been decentralised through these CSC. The Company has a contingency plan to face any breakdown situation at any place with the quickest possible time from the Head Office. A good number of in house development and on shelf software are in use. Data backup is taken on daily basis on tapes and stored at a safe place other than the Computer Center. A separate server is used as data backup to face any disaster.

Mobile SMS Program:There is a special opportunity through Mobile SMS for the policyholders arranged by MLIC for better service. With this message any policyholder can get the information about any identified policy easily. Similar SMS service is also arranged for all the field officers of the company to receive their up to date business information.

Human Resources Management:Insurance industry is a place where services of experienced hand are absolutely necessary. MLICL is fully aware of this fact and from the beginning of its formation it tried to hire top and other executives from the insurance fields of the country with attractive compensation package. Apart from normal compensation package, MLICL has introduced shadow employee benefits like Festival Bonus, Incentive Bonus, gratuity, Contributory Provident Fund, Earned Leave, Sick Leave, Maternity Leave for Female Employees, Group Insurance, Housing loan, Motor Cycle Loan, Car Loan etc. In order to increase working efficiency, at different level of emplacement, MLICL organizes training for its employee on regular basis. MLICL organizes in house training from time to time for the field workers and others related with policy sales, underwriting, claim management, Re-insurance and practice of Takaful system. During the year 2019, about 600 officials attended in the training on various Insurance related subjects. The staff strength of the company at the end of 2019 was 1313.

Audit Committee of the Board:For ensuring transparency & accountability in the operations of the Company to ensure that the activities are conducted within the framework of principles and policies as laid down by the Board, as well as the guidelines of the Bangladesh Securities and Exchange Commission's Notification No.BSEC/CMRRCD/2006- 158/207/ Admin/80, dated the 3rd June, 2018. The Audit Committee reviewed the financial statements of the company for the year ended 31.12.2019 audited by the External Auditors stressing on the importance of the Compliance culture within the company.

58

Nomination and Remuneration CommitteeIn accordance with BSEC notification dated 3 June, 2018 Nomination and Remuneration Committee as a subcommittee of the Board was formed with the following members of the Board of Directors.

1. Mohammad Ahsan Ibne Kabir as Chairman, 2. Mr. Nasir Uddin Ahmed & 3. Md. Moin Uddin (Nominee of Nizam-Hasina Foundation Hospital).

Dividend:The Board of Directors has recommended for declaration of 20% cash dividend for all the shareholders.

Directors:In accordance with Article 96 of the Articles of Association of the Company, 01 (One) director shall retire from office at the 24th Annual General Meeting. The retiring Directors are being eligible they offer themselves for re-election.

Public Subscribers' Director:In accordance with the provision under Article 96 of the Articles of Association of the company and as provided under Insurance Act Dilruba Sharmin, Director shall retire from the office by rotation and being eligible offers herself for re-election. It is relevant to mention here that public notification in regard to election of Public Shareholder Director has been published in the two national dailies namely The Daily Kaler Kontha and The New Nation on 26-08-2020.

Auditors:Pursuant to Section 210 of the Companies Act. 1994, the Company's Statutory auditors M/s. A Wahab & Co., Chartered Accountants will retire at the 24th Annual General Meeting.

It may be noted that M/s. A Wahab & Co. Chartered Accountants express their wellingness to work as statutory auditors for 2020 of the company.

Business Plan for 2020:The company has set up its business strategy for boosting up of its Ordinary Life, Ekok Bima, Loko Bima and Islami Bima (Takaful) Division business and planned for achieving a premium target of Tk. 475 crore during the year, 2020. The management believes that this is achievable if the economic, political, and covid-19 pandemic scenario of the country remain steady and that there occurs no natural calamity in the Country.

Acknowledgements:On behalf of the Board of Directors, I take this unique opportunity to thank all of our honorable shareholders, Directors, Members of Shariah council and Chief Executive Officer for their continued support and cooperation. I also express my sincere gratitude to our valued policyholders, the office of the Insurance Development and Regulatory Authority, Concerned Ministry, Registrar of Joint Stock Companies & Firms, Bangladesh Securities and Exchange Commission, Office of Dhaka, Chattogram Stock Exchanges Ltd. & Bangladesh Bank, our Bankers and other esteemed well wishers for their co-operation, support and confidence.

We also put on record our deep appreciation of the efforts of the marketing personnel and devotion to duty of all categorie of employees of the Company.

On behalf of Board of Directors,

(Nizam Uddin Ahmed)Chairman

Directors' Report

59

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63

64

Opinion:We have audited the accompanying consolidated financial statements of Meghna Life Insurance Company Limited and its subsidiary(Meghna Life Securities and Investment Limited) as well as the separate financial statements of Meghna Life Insurance Company Limited which comprise the Consolidated and separate Balance sheets as at 31 December 2019, and the Consolidated Revenue Account and separate Revenue Account, Consolidated and separate Statements of Changes in Shareholder's Equity and Consolidated and separate Cash Flows Statements for the year then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Meghna Life Insurance Company Limited and its subsidiary as at 31 December 2019, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994, the Insurance Act 2010, the Securities and Exchange Rules 1987 and other applicable laws and regulations.

Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. opinion.

Emphasis of MatterIn forming our opinion on the financial statements, which in not modified, we considered the matter and the fact that as per the statement of financial position in Note # 8.00 the company reported unpaid dividend Tk.12,478,989.Whereas the designated bank account for dividend shows a balance of Tk. 3,978,987. Furthermore, the company declared cash dividend @ 20% in 2018 which is Tk. 67,043,826 out of this an amount of Tk. 58,821,901 was deposited to the designated bank account, resulting in shortfall of deposit to the tune of Tk. 8,221,925. This is a non-compliance of the section 28(1) of Dhaka Stock Exchange (Listing) Regulations, 2015.

Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Gross life insurance premiums amount of Tk.4,350,771,142 is comprise the net premiums amount of Tk.4,345,363,361 is received for the whole period of cover provided by contracts entered into during the accounting period.

With respect to Premium income we carried out the following procedures:

The design and operating effectiveness of key controls around premium income recognition process.

Key audit matter How our audit addressed the key matterPremium Income

Corporate Office:19, Road: 13C, Block: E, Banani, Dhaka-1213.Phone: 88-02-982-1943, 982-1946, 982-1950E-mail: [email protected], [email protected]

Registered Office

A. WAHAB & CO.Chartered Accountants

Hotel Purbani Annex 2, (4th Floor), 1 Dilkusha C/ADhaka-1000, Phone: 88-02-958-5626, 957-5293Web: www.awahabco.comA Member firm of The Leading Edge Alliance

leading edge allianceinnovation quality excellence

global

Independent Auditor's ReportTo The Shareholders of Meghna Life Insurance Company Limited

Report on the Audit of the Financial Statements

65

A. Wahab & CoChartered Accountants

Carried out analytical procedures and recalculated premium income for the period.

Carried out cut-off testing to ensure unearned premium income has not been included in the premium income.

On a sample basis reviewed policy to ensure appropriate policy stamp was affixed to the contract and the same has been reflected in the premium register.

Ensured on a sample basis that the premium income was being deposited in the designated bank account.

Tested on a sample basis to see that appropriate VAT was being collected and deposited to bank through Treasury Challan.

For a sample of insurance contracts tested to see if appropriate level of reinsurance was done and whether that reinsurance premium was deducted from the gross premium.

Applying specialist judgment ensured if there is any impairment of the reinsurer.

Finally assessed the appropriateness and presentation of disclosures against relevant accounting standards, Insurance Act 2010, Insurance Rules, 1958 and other applicable rules and regulations and regulatory guidelines.

We understood the governance process in place to determine the life insurance fund, including testing the associated financial reporting control framework.

We tested the design and operating effectiveness of controls over the accuracy and completeness of data used.

We tested the key judgments and controls over the liability, including the preparation of the manually calculated components. We focused on the consistency in treatment and

See note no 23:00 to the financial statementsValuation of life fund

Valuation of life fund involves complex and subjective judgments about future events, both internal. and external to the business, for which small changes in assumptions can result in material impacts to the valuation of these liabilities.

Given the important nature, connections to other items to the financial statements and sensitivity of the item we believe this area pose high level of risk. 4,350,771,142

The work to address the valuation of life insurance fund included the following procedures:

At 31 December 2019, the company reported total balance under the head of Life Insurance Fund of BDT 17,907,725,420 (2018: BDT 16,867,329,039).

66


methodology period-on-period and with reference to recognized actuarial practice.

We assessed the disclosures in the financial statements. As part of our consideration of the entire set of assumptions, we focused particularly on the Annuitant Mortality, Credit Default and Expense assumptions for the life fund given their significance to the Company's result and the level of judgment involved. These have been considered in greater detail below. Based on the work performed and the evidence obtained, we consider the assumptions used to be appropriate.

Insurance company makes a number of investments in the listed capital market with required regulatory permission. Income generated from the investments (realized gain and dividend received) is credited to the Revenue Account. Unrealized gain or loss if any is transferred to the Fair Value Change Account.

This item has significant impact on the earnings performance of the company and return to the shareholders and might be prone to misreporting as large unreported fall in the value of any holding may wipe out the value of the portfolio and hamper the distribution capability of the company.

At 31 December 2019, the company reported total balance under the head of Fair Value Change Account of BDT 90,595,799 (2017: BDT 91,265,057).

Other InformationManagement as well as Director are responsible for the other information. The other information comprises all of the information in the Annual report other than the financial statements and our auditors' report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

Obtained year-end share holding positions from the company and through directional testing assessed the completeness of the report.Ascertained the valuation of the holding as per IFRS 13.Recalculated unrealized gain or loss at the year end.Carried out cut-off testing to ensure unrealized gain or loss was recognized in correct period.

Checked the subsequent position of this unrealized amount.Finally assessed the appropriateness and presentation of disclosures against relevant accounting standards, The Companies Act 1994, Insurance Act 2010 and other applicable rules and regulations and regulatory guidelines.

Obtained the CDBL report and share portfolio and cross checked against each other to confirm unrealized gain or loss.

See note no 5:00 to the financial statements

See note no 8.09 to the financial statements

Fair Value Change AccountWe tested the design and operating effectiveness of key controls around monitoring, valuation and updating of prices of the positions held by the company from trusted sources. Additionally, we performed the following:

67


In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

Management as well as Director are responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, the Companies Act 1994, the Insurance Act 2010, the Insurance Rules 1958, the Securities and Exchange Rules 1987 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Auditor's Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal Controls

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other Legal and Regulatory RequirementsIn accordance with the Companies Act 1994, the Insurance Act 2010, the Insurance Rules 1958, the Securities and Exchange Rules 1987 and relevant notifications issues by Bangladesh Securities and Exchange Commission, we also report that:

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;

Financial Statements of Meghna Life Insurance Company Limited subsidiaries namely, Meghna Life Securities and Investment Limited have been audited by Mahfel Huq & Co. Chartered Accountants have been properly reflected in the consolidated financial statements.

a)

b)

In our opinion, proper books of accounts, records and other statutory books as required by law have been kept by the Company so far as it appeared from our examinations of those books;

c)

The Company management has followed relevant provisions of laws and rules in managing the affairs 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;

d)

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As per section 63(2) of the Insurance Act 2010, in our opinion to the best of our knowledge and belief an 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 Accounts of the Company;

e)

We report that to the best of our information 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 its business re-insured abroad;

f)

Balance Sheet, Revenue Account, related Revenue Accounts, Statement of Changes in Shareholder's and Cash Flow Statements of the Company together with the annexed notes dealt with by the report are in agreement with the books of account and returns; and

g)

The expenditure was incurred for the purpose of the Company's business.h)

For A. Wahab & Co.Chartered Accountants

Md. Showkat Hossain, FCA Partner

Dated: Dhaka, August 31, 2020

Dated: Dhaka, 31 August, 2020

TOTAL TAKA = 19,328,091,309 18,385,539,184

DIRECTORDMD & CFO CHIEF EXECUTIVE OFFICER

CAPITAL & LIABILITIES Notes 31-12-2019 31-12-2018

Taka Taka

SHARE CAPITAL :

AUTHORISED

60,000,000 Ordinary shares of Tk. 10 each 4 600,000,000 600,000,000

ISSUED, SUBSCRIBED & PAID UP

33,521,913 Ordinary Shares of Tk. 10 each 335,219,130 335,219,130

Fully Paid Up

BALANCE OF FUNDS AND ACCOUNTS 5 17,907,725,420 16,867,329,039

Life Insurance Fund (Annexure-I)

LIABILITIES AND PROVISIONS

Estimated Liabilities in respect of

Outstanding claims whether due or intimated 6 57,049,229 263,923,449

Amount due to other persons or bodies

carrying on Insurance Business. 7 10,438,742 6,191,773

Sundry Creditors 8 1,013,776,996 911,652,263

Premium Deposit 9 3,881,792 1,223,530

Balance Sheet as atMeghna Life Insurance

70

The annexed Notes 1 to 32 from an integral part of these financial statements. These financial

Subject to our Separate report of even date.

CHAIRMANDIRECTOR

Property & Assets Notes 2019 2018

Taka Taka

LOANS: 10 153,552,462 91,186,128On mortgage of properties 9,510,424 10,129,087On Insurer's Policies within their Surrender Value 39,042,038 31,057,041On Loan on Meghna Life Securities & Investment Ltd. 105,000,000 50,000,000.00 INVESTMENT : 11 6,807,174,528 6,475,564,183Statutory Deposit with Bangladesh Bank (BGTB) 15,000,000 15,000,000Bangladesh Govt. Treasury Bond 4,404,985,814 4,363,271,141Shares 1,076,916,710 982,509,607House Property (At Cost Less Depreciation) 914,272,004 718,783,435Meghna Life Securities & Investment Ltd. 396,000,000 396,000,000

Agents Balance 152,380,803 200,163,650Outstanding Premium 12 1,781,821,035 1,801,741,073Interest, Dividend and Rents accrued but not due 13 483,888,121 403,245,149Advance, Deposit and Prepayments 14 1,513,743,397 1,519,475,059Sundry Debtors 15 327,188,259 336,832,491 CASH AND BANK BALANCES 7,900,915,562 7,343,117,198Fixed Deposit with Banks 16 5,716,600,000 5,243,720,000Short Term Deposit 1,888,850,008 1,609,664,838Current Account 217,167,123 431,877,296Cash in Hand 78,298,431 57,855,064 Amount due from other persons or bodies Carrying on Insurance business 17 1,371,125 470,431Motor Cycle & Bi-Cycle Loan 18 4,058,861 4,114,441Stamps in Hand 11,522,128 10,236,505Printing & Stationary in Hand 6,895,623 9,392,826Fixed Assets (At Cost Less Depreciation) 19 183,579,405 190,000,050

31st December, 2019Company Limited

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TOTAL TAKA = 19,328,091,309 18,385,539,184

A. WAHAB & CO.CHARTERED ACCOUNTANTS

statements were approved by the Board of Directors on August 31, 2020 and were signed on its behalf by:

DIRECTORCHIEF EXECUTIVE OFFICERDated: Dhaka,31 August 2020

EXPENDITURE Notes 31-12-2019 31-12-2018 Claims under Policies (Including Provision for Claims due or intimated) Less-Reinsurance: 20 2,879,383,823 2,599,080,571

By Death 78,497,621 73,537,797 By Survival 1,096,624,470 1,092,488,962 By Maturity 1,049,234,894 832,595,892 By Surrenders 16,776,626 20,778,511 Bonus to Policy Holder 638,250,212 579,679,409 EXPENSES OF MANAGEMENT : 611,859,742 567,875,830 (a) Commission to Insurance Agents (Less that on re-insurance Agents). 21 441,522,343 392,607,075 (b) Allowances and Commission (Other than Commission included in Sub-item (a) above 170,337,399 175,268,755

Salaries etc.{Other than to Agents and those included in item (b) above} 398,877,666 408,827,402 Gratuity 5,733,261 7,311,232 Travelling and conveyance 12,061,237 9,270,958 Directors Fees 819,300 692,000 Auditors Fees 379,500 281,250 Actuarial Fees 661,250 667,500 Credit Rating Fees 215,000 214,000 Medical Fees 2,397,757 2,357,465 Registration Renewal Fee 4,978,469 7,156,342 Advertisement & Publicity 3,145,846 2,666,129 Printing & Stationary 18,424,124 16,700,669 Policy Stamp Expenses 8,235,885 8,542,829 Revenue Stamps 3,562,395 3,693,144 Postage & Telegrams 4,081,826 4,417,865 Telephone, Telex and Fax 6,043,053 8,980,675 Electricity, Gas & Water Charges 8,336,661 9,095,229 Entertainment 7,149,096 6,468,745 Bank Charges 9,885,203 11,762,745 Conference 501,924 612,101 Development Expenses 7,526,577 8,816,979 Prizes and Contest 13,111,075 9,026,120 Repairs and Maintenance 19,459,241 18,173,091 Fuel and Lubricants 11,650,348 18,651,217 Subscription and Donation 1,163,450 876,000 Rents for offices belonging to and occupied by the company 888,480 888,480 Rents for other offices occupied by the company 67,871,930 75,421,312 Rates & Taxes 1,902,300 1,994,735 Legal and Professional Fees 902,619 371,004 Insurance Expenses 998,789 1,253,848 Newspaper and Periodicals 361,953 573,212 Cleaning & Washing Charges 339,261 315,070 Training Expenses 798,830 1,596,150 A.G.M Expenses 2,190,363 2,520,785 General Expenses 3,653,783 4,530,400 Contribution to Employees Providend Fund 12,215,955 12,016,483 Employees Group Insurance Premium 602,195 363,671 641,126,602 667,106,837 OTHER EXPENSES:Dividend 67,043,826 67,043,826 Provision for Income Tax 78,551,642 61,607,305 Bad Debts Written off - 73,290 Loss on Investment in Share 20,634,011 8,039,108 Loss on Foreign Exchange 41,452 15,530 Provision for Loss on fluctuation of share value 9,934,497 64,280,502 VAT Expenses 21,046,372 - Depreciation 22 30,436,226 26,311,674 Balance of Fund at the end of the year as shown in the Balance Sheet 17,907,725,420 16,867,329,039 TOTAL TAKA = 22,267,783,613 20,928,763,512

Revenue Account For the yearMeghna Life Insurance

DMD & CFO

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The annexed Notes 1 to 32 from an integral part of these financial statements. These financial statements were approved

Taka Taka

DIRECTOR CHAIRMAN

Particulars Notes 31-12-2019 31-12-2018INCOMEBalance of Fund at the Beginning of the Year 16,867,329,040 15,634,617,054

Premium Less-Reinsurance 23 4,345,363,361 4,314,596,661 First year premium- (EB) 542,679,101 606,600,540 First year premium- (LB) 288,056,331 209,900,680 First year premium-(IB) 200,364,675 210,000,345 1,031,100,107 1,026,501,565 Renewal Premium- (EB) 1,923,251,729 1,957,100,325 Renewal Premium- (LB) 633,856,077 622,700,470 Renewal Premium- (IB) 731,840,729 690,500,522 Renewal Premium-(IKB) 3,288,948,535 3,270,301,317 Group Insurance 30,722,500 32,300,540 4,350,771,142 4,329,103,422 Less Re-Insurance Premium 5,407,781 14,506,761 Interest, Rent & Dividend 24 1,023,282,654 963,544,819 Miscellaneous Receipts 139,719 137,226 Alteration Assignment Late Fees 23,692,601 11,126,558 Profit on Sale of Cars 7,138,507 4,741,194 Profit Commission Earned 837,731 -

First year premium, where the maximumPremium paying period is:

Single 95,281,039 Two years - Three years - Four years - Five years 1,625,719 Six years 1,780,740 Seven years 880,306 Eight years 559,423 Nine years 161,389 Ten years 16,046,653 Eleven years 444,601 Twelve years & above 914,320,237 Total = 1,031,100,107

TOTAL TAKA = 22,267,783,613 20,928,763,512

ended December 31, 2019 Company Limited


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by the Board of Directors on August 31, 2020 and were signed on its behalf by:

Taka Taka

Meghna Life Insurance Company LimitedStatement of Changes in Shareholder's Equity

For the year ended December 31, 2019

For the year ended 31st December 2018

Particulars Share Capital Share General Retained Other Total Premium Reserve Earning Reserve

Balance as on 01 January 2019 335,219,130 - - - - 335,219,130

Bonus Share for the Year - - - - - -

Balance as on 31 December 2019 335,219,130 - - - - 335,219,130

Particulars Share Capital Share General Retained Other Total Premium Reserve Earning Reserve

Balance as on 01 January 2018 335,219,130 - - - - 335,219,130

Bonus Share for the Year - - - - - -

Balance as on 31 December 2018 335,219,130 - - - - 335,219,130



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The annexed Notes 1 to 32 from an integral part of these financial statements. These financialstatements were approved by the Board of Directors on August 31, 2020 and were signed on its behalf by:

DMD & CFO CHIEF EXECUTIVE OFFICER DIRECTOR DIRECTOR CHAIRMAN


31-12-2019 31-12-2018PARTICULARS TAKA TAKA (Restated)A. CASH FLOWS FROM OPERATING ACTIVITIES :

Collection from Premium 4,367,941,661 4,370,588,375Other income received 24,670,051 11,263,784Payment for Claims (3,086,258,043) (2,513,563,332)Payment for Re-insurance, Management Expenses, Commissionand others (1,130,129,763) (1,433,185,516)Income Tax paid/deducted (66,754,352) (72,730,950)Net Cash Flows from operating activities (A) 31.00 109,469,554 362,372,360

B. CASH FLOWS FROM INVESTING ACTIVITIES :Investment made (408,710,499) (226,808,703)Acquisition of Fixed Assets (22,549,437) (70,282,713)Disposal of Fixed Assets 7,138,507 4,741,194Loan paid against policies (15,039,934) (12,457,440)Other Loans paid (593,500) (175,327)Loan realized against Policies 7,054,937 6,191,817Other Loans realized 1,267,743 1,455,520Interest, dividend & rent received 942,639,682 869,255,647Net Cash Flows from investing activities (B) 511,207,499 571,919,995

CASH FLOWS FROM FINANCING ACTIVITIES :Cash Dividend Paid (62,878,689) (67,668,191)Net Cash used in financing activities (C) (62,878,689) (67,668,191)

Net increase in Cash & Cash equivalents (A+B+C) 557,798,364 866,624,164Cash and Cash equivalents at the beginning of the year 7,343,117,198 6,476,493,034Cash and Cash equivalents at the end of the year 7,900,915,562 7,343,117,198

Meghna Life Insurance Company LimitedCash Flow Statement


Dated: Dhaka,31 August, 2020


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The annexed Notes 1 to 32 from an integral part of these financial statements. These financialstatements were approved by the Board of Directors on August 31, 2020 and were signed on its behalf by:

Meghna Life Insurance Company LimitedNotes to the Financial Statements

For the year ended December 31 2019

A. GENERAL INFORMATION1.00 THE COMPANY :

Meghna Life Insurance Company Limited is a Public Limited company which came into operation on May 05, 1996 with an authorized share capital of Tk. 10 crore divided into 10 lac ordinary shares of Tk. 100 each. During the year 2011 this has been increased to Tk. 60 crore divided into 6 crore ordinary shares of Tk. 10 each as decided in the EGM held on August 04, 2011. The company has been listed with both the Dhaka and Chittagong Stock Exchanges since 04.09.2005. The company is engaged in life insurance business since its inception.

2.00 Components of the Financial Statements: The financial statements include the following components: i) Balance Sheet as at 31st December 2019. ii) Revenue Account for the year ended 31st December 2019. iii) Statement of Changes in Equity for the year ended 31st December 2019. iv) Statement of Cash Flows for the year ended 31st December 2019. v) Statement of Life Insurance Fund as at 31st December 2019 vi) Classified Summary of the Assets (Form AA) as at 31December 2019 and vii) Significant accounting policies, explanatory notes and information. viii) Comparative information of the preceding period ended 31st December 20183.00 Significant Accounting Policies: i) Basis of Preparation of Financial Statements and Statement of Compliance (IAS-1)

These financial statements have been prepared on the historical cost basis as going concern and therefore, do not take into consideration of the effect of inflation. The following underlying laws, rules, regulations and accounting pronouncements have been considered in presenting the financial statements:i) The Insurance Act, 2010ii) The Insurance Rule, 1958;iii) The Companies Act, 1994;iv) The Securities and Exchange Rules, 1987;v) The Income Tax Ordinance, 1984;vi) The Listing Regulations of Dhaka and Chattogram Stock Exchanges;vii) Application of International Financial Reporting Standards (IFRS) The International Financial Reporting Standards that are applicable for the financial statements for the year under review, include the following: IAS 1 Presentation of Financial Statements IAS 2 Inventories IAS 7 Statement of Cash Flows IAS 8 Accounting policies, Changing in Accounting Estimates and Errors IAS 10 Events after the Reporting Period IAS 12 Income Taxes IAS 16 Property, Plant and Equipment IAS 19 Employee Benefits IAS 21 The Effects of Changes in Foreign Exchange Rates IAS 24 Related Party Disclosures IAS 27 Seprate Financial Statements IAS 32 Financial Instruments: Presentation IAS 34 Interim Financial Reporting IAS 37 Provisions, Contigent Liabilities and Contingent Assets IAS 38 Intangible Assets IAS 39 Financial Instruments: Recognition and Measurement IFRS 10 Consolidated Financial Statements IFRS 13 Fair Value Measurement IFRS 15 Revenue from Contracts with Customers viii) Any other applicable legislation.

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ii) Basis of consolidation (IFRS-10):The consolidated financial statements have been prepared according to International financial reporting standard

iii) Risk and Uncertainties for use of estimates in preparation of Financial Statements: Preparation of Financial Statements in conformity with the International Accounting

Standards requires management to make estimates and assumption that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements and Revenues and Expenses during the period reported. Actual result could differ from those estimates. Estimates are used for accounting of certain items such as long-term contracts, depreciation and amortization, employees' benefit plans, taxes, reserves

iv) Responsibility for Preparation and Presentation of Financial StatementsThe Management as well as the Directors are responsible for the preparation and presentation of Financial Statements under Section 183 of Companies Act, 1994 and as per the provision of International Accounting Standard (IAS) "The Frame work for the preparation and presentation of Financial Statements" issued by the International Accounting Standards Board (IASB)..

v) Cash Flow Statement (IAS-7):Statement of Cash Flows is prepared in accordance with IAS-7 and Cash Flow from operating activities have been presented under direct method as outlined by the Securities and Exchange Commission Rule, 1987.Cash in hand, Cash at bank & Fixed deposits have been considered as the Cash and Cash equivalents for the preparation of the statement, which were held and available for use by the Company without any restriction and there was insignificant risk of changes in the value of these assets.

vi) Fixed Assets and Depreciation Procedures (IAS-16):Fixed assets have been stated at cost less accumulated depreciation. Depreciation on the assets has been charged on written down value method at the rates mentioned below. On addition during the year, depreciation is charged from the date of acquisition.

Category of Assets Rate of Depreciation 2019 2018

Furniture & Fixture 10% 10% Office, Electrical & Electronics Equipment 15% to 20% 15% to 20% Motor Vehicles 20% 20% House Properties 2.5% to 5% 2.5% to 5%

vii) Investment, Dividend and Interest (IAS-39):a) Bangladesh Govt. Treasury Bond (BGTB), Statutory Deposit with Bangladesh

Bank are stated in the accounts at their cost of acquisition.

b) In Compliance with IAS 39 Investment made in the Shares are accounted for at cost price. Any short fall in the market value of Share on the Balance Sheet date over cost price has been transferred to the fair value change account in accordance with IDRA Circular No Life 04/2012 dated 11 June, 2012 (Guideline for Preparation of Accounts and Financial Statements; Valuation of Equity Shares) in note 8.09.

c) Interest on Investment is calculated on accrual basis. Dividend income & entitlement to bonus shares are recognized, when right to receive such dividend and bonus share is established.

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ix) Claims: Provision for death claims on account of cases intimated within 31st December, 2019 has been made in accounts after adjusting re-insurance thereof.

viii) Stationery, Stamp and Printed materials (IAS-2):

Stock of stationery, stamp and printed materials have been valued at cost and such valuation was certified by the management.

x) Taxation & VAT (IAS-12):a) Current Tax :

Assessment of Income Tax for the assessment years 2012-2013, 2013-2014, 2014-2015, 2015-2016, 2016-2017 and 2017-2018 (Accounting year 2011, 2012, 2013, 2014, 2015 and 2016) have been completed.

Assessment of Income Tax for the assessment year 2018-2019 (Accounting year 2017) and 2019-2020(Accounting year 2018) have not yet been completed.

Provision for income tax amounting to Tk. 78,551,642 (Notes: 8.00) has been made for the accounting year 2019 (Assessment year 2020 – 2021) on the basis of part B of 4th schedule for Life Insurance Business during immediate preceding the income year.

Advance income tax amounting to Tk.51,271,277 (Notes: 14.01) has been deducted at source from interest on FDR, Treasury bond, Loan on MLSI, STD and Dividend Income.

The Company has paid advance income tax amounting to Tk. 33,051,746 (Notes: 14.01) during the year under Audit.

b) Deferred Tax:

As the profit and gain of the insurance business from all sources are to be computed in accordance with the provision in the fourth schedule of the Income Tax Ordinance, 1984 and not under different heads of income, the management feels it is not necessary to make estimate of deferred tax assets/liabilities at this stage as per the provision of IAS-12.

c) Value Added Tax (VAT): VAT is exempted on life insurance business according to section 4 of second schedule of VAT Act, 1991. VAT deducted at source for various services in accordance with relevant section of above VAT Act has been deducted and deposited to Sonali Bank Limited through treasury chalan.

xi) Employees Benefit Plans (IAS-19): a) Provident Fund (Notes: 8.00):

The management of the Company has introduced provident fund for its regular employees duly recognized by National Board of Revenue with effect from 1st July, 2007. The Provident fund is administerd by the Board of Trustee and is funded both by contributions from employees & the company at a pre determined rate @ 10% of the basic pay. The amount is invested seperately from the company fund. Financial Reporting Council issued a circular No: 179/Gd Avi wm/Gd Avi Gg/cÖÁvcb 2020/2 dated July 07, 2020 directing to take back forfeited amount of PF into company's accounts and to show as other Income in the financial statement. As the circular was issued in July 2020. So that no effect of this circular has in the accounts of 2019. It will include the forfeited amount as other income in the Financial Statements for the year 2020.

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i)

ii)

iii)

iv)

v)

Group Insurance: The Company operates group insurance scheme for its regular employees that was introduced in the Year 2010. The benefits are paid to the employees only on death.

Gratuity:The Company has an unfunded gratuity scheme for its permanent employees with effect from 1st July, 2007 under which an employee is entitled to the benefit of one month's basic pay for every year of service at minimum of 5 years continious service. Subject to maximum of 15 years. When an employee leave the job or retires from the service, gratuity as per above calculation is paid to the employee. The amount paid as gratuity is recognised in revenue accounts on cash basis. Hence no provision for gratuity has been recognised in the accounts but the company has calculated the amount which is around Tk. 12 core.

xi Life Insurance Fund(Annexure- 1):The surplus of revenue after adjusting the re-insurance premium and setting off the claim management and other expenses has been carried forward to Life Insurance Fund along with the surplus brought forward from previous year.

xii) Revenue Recognition (IFRS-15): Premium is recognized as income once the related

policies have been issued and the premium received. Collectable amount of premium due and outstanding up to the month of December 2019 for which grace period has not expired and previous installment have been paid, are also recognized.

xiii) Operation: a) During the year 2019 through the operation of divisional & agency offices the net

premium earned by the company amounted to Tk. 4,345,363,361 after ceding for re-insurance premium. The gross premium from different divisions amounting to Tk. 4,350,771,142 The details of gross premium from different divisions are as follows:

Division AmountEkok Bima Division 2,465,930,830Loko Bima Division 921,912,408Islami Bima Division 932,205,404Group 30,722,500 Total: 4,350,771,142

b) Management expenses inclusive of commission, salaries, etc. have been charged to Revenue Account for an aggregate amount of Tk. 1,252,986,342. The management expenses represents approximately 28.80% of gross premium and 28.83% of the net premium earned during the year-2019.

c) Payment of Commission to insurance agents and employer of agents represent 35.23% and 13.59% respectively of the management expenses. These expenses represent respectively 10.14% and 3.91% of gross premium for the year.

d) Renewal of policies during the year represents the policies underwritten in the preceding years.

xv) Going Concern:The Company has not provided Gratuity {Note: xi(b)} in the accounts although there is an unfunded gratuity scheme. This situation indicates that a material uncertainty may exist. However, management feels that the going concern uncertainty is not appropriate for the following circumstances:a) As per the accounts as on 31 December 2019 the company has profit and is

maintaining profit from its inception. The accumulated balance of Life Insurance Fund is Tk. 1,790.77 core.

b) As per the accounts as on 31 December 2019 net premium income has increased by Tk. 3.08 core (434.53 - 431.45), Life Insurance Fund has increased by Tk. 104.04 core (1,790.77-1,686.73) which clearly indicate the company's annual growth.

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c)

b)

BALANCE SHEET4.00 SHARE CAPITAL 31-12-2019 31-12-2018

Authorized Capital:

60,000,000 ordinary shares of Tk. 10 each 600,000,000 600,000,000

Issued, Subscribed and paid-up capital: 33,521,913 Ordinary Shares of Tk. 10 each fully paid-up 335,219,130 335,219,130

31-12-2019 31-12-20184.01 Opening Balance 335,219,130 319,256,320 Add. Bonus Share Issued During The Year - - Total: 335,219,130 319,256,320

31-12-2019 31-12-20184.02 Category of Shareholders Shareholding Shareholding Sponsor/Director 24.73% 82,907,160 60,571,130 Institution 32.55% 109,111,110 274,648,000 General Public 42.72% 143,200,860 - 100% 335,219,130 335,219,130

4.03 Distribution Schedule of Paid-up Capital: Tk. 335,219,130

As per listing rules of the Stock Exchange a distribution schedule of each class of equity shares and the number of shareholders and percentage as on December 31, 2019 is given below:

Category of Number of Share Holding Value of Shares Shareholdings Shares (%) Tk.

Sponsor/Director 8,290,716 24.73% 82,907,160

Institutions 10,911,111 32.55% 109,111,110

General Shareholders 14,320,086 42.72% 143,200,860

Total No. of Share 33,521,913 100.00% 335,219,130

Interval No. of Share No. of Shareholders Total Holding (%)

Below 500 489,903 3,100 1.46 500 to 5000 2,616,548 1,582 7.81 5001 to 10000 1,249,598 173 3.73 10001 and above 29,165,864 291 87.00 33,521,913 5,146 100.00

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Reporting Currency and Level of Precision:The figures in the financial statements represents Bangladesh currency (Taka), which have been rounded off to the nearest Taka, unless stated otherwise.

Comparative Information: Previous year's figures have been rearranged, where necessary, to conform to current year's presentation.

Reporting Period: Financial statements of the company cover one accounting year from 01 January to 31 December consistently.

xiv)

xv)

xvi)

5.00 Life Insurance Fund: Tk. 17,907,725,420 This consists of the accumulated balance of revenue surplus up to December

Particulars 31-12-2019 31-12-2018 Opening balance 16,867,329,039 15,634,617,054 Add: Increase in Life Revenue Account during the year 1,040,396,381 1,232,711,985 Closing balance 17,907,725,420 16,867,329,039

The detailed break up is shown in (Annexure-1)

The accretion to the Life Insurance Fund during the year is Tk. 1,040,396,381 as against the accretion to the fund of Tk. 1,232,711,985 during the preceding year.

6.00 Estimated Liabilities in respect of Outstanding Claims whether due or intimated: Tk. 57,049,229

The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018

a) Ekok Bima: Death Claim 14,160,142 11,034,464 Survival Benefit 2,169,303 2,182,995 Claim by Maturity 4,843,045 36,833,476 Bonus to Policy Holders 4,654,278 21,347,482

b) Loko Bima: Death Claim 2,559,428 1,617,360 Survival Benefit 2,453,682 52,699,386 Claim by Maturity 2,236,857 45,809,606 Claim by Surrender Bonus to Policy Holders 2,166,602 -

c) Islami Bima (Takaful) : Death Claim 3,757,436 2,600,879 Survival Benefit 307,737 5,586,820 Claim by Maturity 9,909,862 81,966,403 Claim by Surrender Bonus to Policy Holders 6,330,857 1,162,990

f) Group : Death 1,500,000 1,081,588

Total 57,049,229 263,923,449

The above amount constitutes share of claims liability of the company.

7.00 Amount due to other persons or bodies carrying on Insurance Business: Tk. 10,438,742 The amount of TK. 10,438,742 represents the premium payable to Score Global Life SE, Singapore Branch and General Insurance Corporation of India on Account of Share of re-insurance Premium after adjustment of share of re-insurance commission and claim due from them. The balance of Score Global Life SE, Singapore Branch, has been accounted for, up to the 4th Quarter ended December 31, 2019.

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8.00. Sundry Creditors: Tk. 1,013,776,996The details break-up is made up as follows:Particulars Notes 31-12-2019 31-12-2018Agency commission payable 29,530,961 34,450,213 Over-riding commission payable 85,798,284 81,421,209 Accrued Expenses 8.01 2,128,950 2,689,898 Tax Deduction at Source 8.02 138,795,852 112,869,108 VAT 8.03 2,328,390 425,431 License Fee 30,438,791 27,519,240 Loan Bond 121,830 134,753 Share Application Money 8.04 203,539 203,539 Provision for Doubtful Debt 8.05 6,549,271 6,549,271 Provision for Income Tax 8.06 602,612,810 541,629,839 Unpaid Dividend 8.07 12,478,989 8,313,853 Provident Fund Trustee A/C 8.08 4,579,714 3,313,873 Recovery of Motor Car Installment 835,907 736,979 Fair Value Change Account 8.09 90,595,799 91,265,057 Other Account 6,777,910 130,000

Total : 1,013,776,996 911,652,263

8.01. Accrued Expenses: Tk. 2,128,950 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018Salary & Allowances - 759,592 Office rent 833,800 1,574,656 Audit fees 418,900 355,650 Other Expense 876,250 - Total: 2,128,950 2,689,898

8.02 Tax deduction at Source: TK. 138,795,852The details break-up is made up as follows:Particulars 31-12-2019 31-12-2018Opening Balance 112,869,108 83,495,470 Add : Provision made during the year 78,597,743 85,573,950 191,466,851 169,069,420 Less : Provision written back 52,670,999 56,200,312 Total: 138,795,852 112,869,108

The above amount includes Tk. 75,570,366 being Tax deduction from Agency commission for the year which has been deposited to Sonali Bank Limited Subsequently.

8.03 VAT: Tk. 2,328,390The entire balance of this account has been deposited to Sonali Bank Subsequently.

8.04 Share Application Money :TK. 203,539The Company went for IPO in April, 2005 and after allotment of Shares on lottery refund warrants were sent to all unsuccessful applicants. The amount in question represents applicants who did not encash their refund warrants till 31st December 2019.

8.05 Provision for Doubtful Debt: Tk. 6,549,271The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Opening Balance 6,549,271 6,549,271 Add : Provision made during the year - - 6,549,271 6,549,271 Less : Provision written back - - Total: 6,549,271 6,549,271

Provision has been made for some debtors which is doubtful of recovery in the opinion of the management.


8.06 Provision for Income tax: Tk. 602,612,810a) The details break-up is made up as follows: Particulars Notes 31-12-2019 31-12-2018 Opening Balance 541,629,739 562,822,618 Add : Provision made during the year 60,983,071 61,607,205 602,612,810 624,429,823 Less : Provision written back - 82,800,084 Total: 602,612,810 541,629,739 b) The year wise break-up is as follows:

Accounting Year Assessment Year 30-06-2019 30-06-2018 2006 2007-2008 9,338,000 9,338,000 2007 2008-2009 17,184,179 17,184,179 2008 2009-2010 8,157,422 8,157,422 2009 2010-2011 29,929,435 29,929,435 2010 2011-2012 53,428,981 53,428,981 2011 2012-2013 11,444,905 11,444,905 2012 2013-2014 23,261,528 23,261,528 2013 2014-2015 92,619,869 92,619,869 2014 2014-2016 84,489,502 84,489,502 2015 2015-2017 44,379,393 44,379,393 2016 2016-2018 95,534,485 95,534,485 2017 2018-2019 93,054,919 93,054,919 2018 2019-2020 (21,192,779) (21,192,779) 2019 2020-2021 60,982,971 - Total: 602,612,810 541,629,839 8.07. Unpaid Dividend: Tk. 12,478,989 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018Opening Balance 8,313,853 8,938,219 Add : Provision made during the year 72,036,738 67,043,826 80,350,591 75,982,045 Less : Provision written back 67,871,602 67,668,192 Total 12,478,989 8,313,853

8.08. Provident Fund Trustee A/C: Tk. 4,579,714 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018Opening Balance 3,313,873 37,899,112 Add : Provision made during the year 13,481,796 12,016,483 16,795,669 49,915,595 Less : Provision written back 12,215,955 46,601,722 Total 4,579,714 3,313,873

8.09 Fair Value Change Account:During the year provision has been made against the difference amount between book value and market value of share to the tune of TK. 9,934,497 for unrealized loss due to decrease of market value of existing shares as at 31 December, 2019.The amount was shown under "Fair Value Change Account" as per IDRA circular on life 04/2012 dated 11 June, 2013,(Guideline for Preparation of Accounts and Financial Statements: Valuation of Equity Shares)

Particulars 31-12-2019 31-12-2018 Opening Balance 91,265,057 26,984,555 Add : Provision made during the year 9,934,497 64,280,502 101,199,554 91,265,057 Less: Adjusted during the year 10,603,755 - 90,595,799 91,265,057

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9.00 Premium Deposit: Tk. 3,881,792The amount of Tk.3,881,792 represents premium received against policies but for want of certain necessary information the premium could not be adjusted within December 31, 2019.

10.00 Loans:Tk. 153,552,462The details break-up is made up as follows:

Particulars Notes 31-12-2019 31-12-2018 Loans on Mortgage of Property 10.01 9,510,424 10,129,087 Loans on Insurance Policies within their surrender Value 10.02 39,042,038 31,057,041 Loan on Meghna Life Securities & Investment Ltd 10.03 105,000,000 50,000,000 Total: 153,552,462 91,186,128

10.01 Loan on Mortgage of Properties: Tk. 9,510,424 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Opening balance 10,129,087 11,066,487 Add : Loan paid during the year 300,000 - 10,429,087 11,066,487 Less: Loan adjusted during the year 918,663 937,400 Closing Balance: 9,510,424 10,129,087

10.02 Loan of Insurer’s Policies within their Surrender Value: Tk. 39,042,038 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Opening balance 31,057,041 24,791,418 Add : Loan paid during the year 15,039,934 12,457,440 46,096,975 37,248,858 Less: Loan recovered & adjusted during the year 7,054,937 6,191,817 Closing Balance: 39,042,038 31,057,041

The Loan paid during the year represents Tk. 11,451,934 on account of Ekok Bima,Tk. 319,000 of Loko Bima & Tk. 3,269,000 of Islami Bima.

10.03 Loan on Meghna Life Securities & Investment Ltd.: Tk. 105,000,000 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Opening Balance 50,000,000 - Add : Loan paid during the year 55,000,000 50,000,000 Closing Balance 105,000,000 50,000,000

11.00 Investment: Tk. 6,807,174,528 The details break-up is made up as follows:

Particulars Notes 31-12-2019 31-12-2018 Statutory Deposit with Bangladesh Bank (BGTB) 11.01 15,000,000 15,000,000 Bangladesh Govt. Treasury Bond 11.02 4,404,985,814 4,363,271,141 Shares 11.03 1,076,916,710 982,509,607 House Property (At Cost Less Depreciation) 11.04 914,272,004 718,783,435 Meghna life Securities &Investment Ltd. 11.05 396,000,000 396,000,000 Total 6,807,174,528 6,475,564,183


SL. Name of the Company No. of Average Book Value Market No. Shares Cost per Share at cost Value (Taka) (Taka)

Details of investment in shares are given below:

BANK 1 DUTCHBANGL 24,700 62.49 1,543,508.08 1,761,110.00 2 MERCANBANK 221,000 10.28 2,271,355.35 2,143,700.00 3 MERCANBANK 991,000 17.93 17,764,633.34 13,081,200.00 4 NBL 454,000 9.20 4,175,831.94 3,677,400.00 5 PREMIERBAN 38,000 12.41 471,516.00 475,000.00 6 RUPALIBANK 21,000 39.15 822,227.76 640,500.00 7 SIBL 192,500 16.36 3,150,049.23 2,656,500.00 8 TRUSTBANK 61,000 31.06 1,894,607.99 1,671,400.00 FINANCIAL INSTITUTIONS 9 FASFIN 1,948,750 15.35 29,905,282.98 13,056,625.00 10 FIRSTFIN 2,500 10.13 25,322.30 10,500.00 11 NHFIL 200,000 43.04 8,608,607.04 6,380,000.00 12 UNIONCAP 105,381 15.34 1,616,538.07 663,900.30

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11.01 Statutory Deposit with Bangladesh Bank: Tk. 15,000,000

In compliance with section 7 (1) of Insurance Act, 2010, the amount has been deposited in Bangladesh Bank for which the Bank has purchased 10 years Term Bangladesh Govt. Treasury Bond:


Particulars 31-12-2019 31-12-2018 Opening balance 15,000,000 15,000,000 Add : Addition during the year - - 15,000,000 15,000,000 Less: Encashment during the year - - Closing Balance: 15,000,000 15,000,000

11.02 Bangladesh Govt. Treasury Bond: Tk. 4,404,985,814 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Opening balance 4,363,271,141 4,475,799,996 Add : Addition during the year 139,342,965 338,620,140 4,502,614,106 4,814,420,136 Less: Encashment during the year 97,500,000 451,148,995 4,405,114,106 4,363,271,141 Less: Bank charge 128,292 - Closing balance 4,404,985,814 4,363,271,141

The above amount has been invested for 10 (ten) and 15 (fifteen) years term with interest rates varying from 7.50% to 13.20%. The interest accrued on the bond has been duly accounted for.

11.03 Shares: Tk. 1,076,916,710 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Opening balance 982,509,607 797,894,061 Add : Addition during the year 411,334,526 499,702,591 1,393,844,133 1,297,596,652 Less: Disposal during the year 316,927,423 315,087,045 Closing Balance: 1,076,916,710 982,509,607



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ENGINEERING 13 ATLASBANG 17,000 142.22 2,417,753.82 1,861,500.00 14 BDAUTOCA 14,100 250.04 3,525,517.74 2,088,210.00 15 COPPERTECH 4,978 9.52 47,410.00 116,983.00 16 DESHBANDHU 110,000 13.69 1,505,408.10 1,221,000.00 17 ECABLES 1,600 232.73 372,371.53 318,720.00 18 IFADAUTOS 27,000 93.71 2,530,278.33 1,247,400.00 19 MONNOSTAF 1,960 1,400.58 2,745,140.91 1,562,904.00 20 NAHEEACP 8,119 8.27 67,106.24 297,155.40 21 NPOLYMAR 1,500 63.48 95,222.12 92,850.00 22 OLYMPIC 39,400 244.10 9,617,535.57 6,501,000.00 23 RSRMSTEEL 487,000 56.85 27,687,227.65 11,444,500.00 24 SHURWID 110,100 31.31 3,447,527.72 3,413,100.00 25 SINGERBD 15,000 188.39 2,825,833.26 2,706,000.00 26 SSSTEEL 4,400 9.09 40,000.00 99,000.00 FOOD & ALLIED PRODUCT 27 BANGAS 13,020 299.78 3,903,199.10 1,770,720.00 28 BATBC 3,000 1,232.35 3,697,050.45 2,909,700.00 29 CVOPRL 4,000 170.09 680,363.47 361,200.00 FUEL & POWER 30 INTRACO 8,166 8.66 70,706.60 111,057.60 31 KPCL 263,600 60.51 15,950,912.85 12,310,120.00 32 TITASGAS 552,100 48.88 26,987,415.19 17,059,890.00 33 UPGDCL 3,200 289.97 927,906.02 784,960.00 TEXTILE 34 ACFL 449,000 43.97 19,743,169.55 9,473,900.00 35 AL-HAJTEX 4,500 61.77 277,963.02 139,500.00 36 APEXWEAV 90,000 16.43 1,478,746.00 495,000.00 37 GENNEXT 76,532 8.35 638,826.60 206,636.40 38 KTL 3,600 8.26 29,753.01 40,680.00 39 MHSML 230,733 15.53 3,582,971.87 2,168,890.20 40 MLDYEING 3,474 7.25 25,175.00 114,294.60 41 NEWLINE 8,038 9.35 75,130.00 118,962.40 42 NURANI 807,638 16.10 13,002,766.81 6,784,159.20 43 SHASHADNIM 159,300 50.01 7,965,936.94 3,934,710.00 44 VFSTDL 3,300 8.27 27,275.20 66,000.00 PHAMACEUTICALS & CHEMICALS 45 ACI 29,000 287.74 8,344,361.60 5,263,500.00 46 IBP 90 8.34 750.74 1,647.00 47 PHARMAID 17,650 627.64 11,077,898.00 6,968,220.00 48 RENATA 1,800 1,060.10 1,908,171.20 1,973,700.00 49 SILCOPHL 8,022 9.89 79,332.64 243,066.60 50 SILVAPHL 2,459 9.52 23,420.63 41,311.20 51 WATACHEM 11,200 421.40 4,719,713.99 4,096,960.00


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CEMENT 52 NILOYCEM 17,400 92.58 1,610,950.00 892,620.00PAPER & PRINTING 53 SKTRIMS 260 8.26 2,148.80 12,220.00IT SECTOR 54 GENEXIL 392 8.70 3,409.49 26,420.80TANNERY INDUSTRIES 55 LEGACYFOOT 18,550 185.04 3,432,534.47 1,155,665.00 56 MONNOCERA 20,870 226.95 4,736,457.78 2,573,271.00NON LIFE INSURANCE 57 KARNAPHULI 3,055,323 16.72 51,090,223.92 67,828,170.60LIFE INSURANCE 58 PADMALIFE 40,000 24.13 965,355.46 696,000.00 59 PRAGATILIF 2,600 117.86 306,446.34 328,380.00 60 SANDHANINS 186,000 27.90 5,189,901.46 4,147,800.00TELECOMMUNICATION 61 BSCCL 15,000 122.37 1,835,543.41 1,407,000.00TRAVEL & LEISURE 62 SEAPEARL 3,916 9.53 37,300.00 161,730.80MISCELLANEOUS 63 BEXIMCO 69,000 22.24 1,534,459.61 952,200.00CDBL (Central) 64 CDBL 100,000 10.00 1,000,000.00 1,000,000.00PRE - IPO PLACEMENT 6 5 GMG AIRLINES 110,000 46.36 5,100,000.00 5,100,000.00 66 ENERGY PRIMA 50,000 95.00 4,750,000.00 4,750,000.00 67 CDBL 56,945 10.00 569,450.00 569,450.00UNIT FUND 68 ICB1STUNIT 302,804 17.49 5,294,800.00 3,028,040.00 69 MTB UNIT FUND 10,000,000 10.58 105,750,000.00 105,750,000.00 70 UFS-Popular Life 8,500,000 11.94 101,315,000.00 101,315,000.00 71 Sandhani Life UF 10,000,000 10.55 105,500,000.00 105,500,000.00 72 Prime Finance2nd 5,000,000 10.80 54,000,000.00 54,000,000.00 73 Rupali Life 1st MF 5,000,000 10.40 52,000,000.00 52,000,000.00 74 BD Thai Food & Beverage Ltd. 2,250,000 10.00 22,500,000.00 22,500,000.00 75 Amulate Pharma 2,000,000 12.00 24,000,000.00 24,000,000.00 76 Alliance Capital Port Folio A/c 270,000,000.00 270,000,000.00 Grand Total: 1,076,916,710 986,320,911

Unrealized loss of Tk. 90,595,799 due to decrease of market value of existing shares as at 31 December, 2019 has been accounted for under "Fair Value Change Account" as per IDRA circular on life -04/2012 dated 11 June, 2012, (Guideline for Preparation of Accounts and Financial Statements: Valuation of Equity Shares) in note: 8.09.

Cost Depreciation

Addtion Written

Property Opening during the Total Opening Rate Charge Down

Balance year Balance the year Value

i) Land measuring 6 decimals with semi Pacca Building at Barguna

ii) Land measuring 3 Kathas with one four Stored Building at 70, R. K. Mission Road, Gopibag, Dhaka.

iii) (a) Land measuring 8.586Kathas at 11, Toyenbee Circular Road, Motijheel C/A, Dhaka.

iv) Land measuring 8 Decimals with one storied Building in the District town of Barishal.

v) Land measuring 19.35 Decimals thereon in the District town of Cumilla.

vi) Land measuring 9.25 Decimals with one three storied Building at Patuakhali.

viii) 2710.30 sqft. floor space including car parking with 1.238 Decimals Land At Mirpur,Dhaka

xi) 1305 sqft floor space (3rd floor) including car parking with 0.36 Decimals Land At afford Sultan Elesium.Chattagarm

vii) 3641 sqft floor Space (2nd floor) with .011 decimals Land at Afford Sultan Elesium, Nasirabad, Chattagarm.

614,019 - 614,019 246,674 5% 8,905 358,440

10,462,300 - 10,462,300 1,209,584 2.5% 64,078 9,188,638

533,985,134 159,512,258 693,497,392 - - 693,497,392

61,974,942 2,004,656 63,979,598 - - - 63,979,598

42,969,595 - 42,969,595 1,453,051 2.5% 342,764 41,173,780

16,933,091 - 16,933,091 810,193 2.5% 90,218 16,032,680

19,561,269 - 19,561,269 230,297 2.5% 113,756 19,217,216

7,001,600 - 7,001,600 126,280 2.5% 144,383 6,730,937

xiI) Land measuring 26.75 deci, Mouja-Belali, Dist.- Bogra, Hal, Dag-965 &966, CS-08/59, JL-124

- 35,437,798 35,437,798 - - - 35,437,798

29,388,800 - 29,388,800 5,246,104 2.5% 584,167 23,558,529

x) 758 sqft floor space (Grond floor)with .0023 Acre land at afford Sultan Elesium.Chattagarm

6,057,821 - 6,057,821 842,953 2.5% 117,872 5,096,996

Total 728,948,571 196,954,712 925,903,283 10,165,136 1,466,143 914,272,004

11.04 House property (At cost less depreciation): Tk. 914,272,004 The details break-up is made up as follows:

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i) Property at Barguna Tk. 358,440The company has purchased a plot of land measuring 6 decimals with a semi pacca Building thereon in the District Town of Barguna in 2001. Total cost of the property with Registration and legal fees Stands at Tk. 614,019. Depreciation has been charged for the year on the cost of semi Pacca building @ 5% per annum.

ii) Property at Gopibagh, Dhaka. Tk. 9,188,638The Company purchased one four storied Building on a 3 Kathas plot of land at 70, R.K. Mission Road, Gopibagh, Dhaka in 29/12/2002, Total cost of the property with Registration & Legal fee stands at Tk. 10,462,300. Depreciation has been charged on the cost of building @ 2.5% per annum.

iii) Property at Motijheel C/A, Dhaka Tk. 693,497,392The company purchased a Plot of Land Measuring 8.586 Kathas at 11, Toyenbee Circular Road, Motijheel C/A, Dhaka Total cost of the property with Registration & Legal fees stands at Tk. 533,985,134 During the year 2019 Tk. 159,512,258 has been paid for building construction & Land purpose.

iv) Property at Barishal: Tk. 63,979,598The Company purchased a plot of Land measuring 8 Decimals with one storied Building in the District town of Barishal. Total cost of the property with registration and legal fees stands at Tk. 61,974,942, During the year 2019 Tk.2,004,656 has been paid for building construction.

v) Property at Cumilla: Tk. 41,173,780The Company purchased a plot of Land measuring 24.23 Decimals thereon in the District town of Cumilla. Total cost of the property with registration and legal fees stands at Tk. 42,969,595

vi) Property at Patuakhali: Tk. 16,032,680The Company purchased Land measuring 9.25 Decimals with one three storied Building at Patuakhali. Total cost of the property with registration and legal fees stands at Tk. 16,933,091

vii) Property at Chattagram: Tk. 23,558,529The Company purchased a flat 3641 sq. ft. Land measuring .011 Decimals Land at Afford Sultan Elesium, Nasirabad, Chattagarm. Total cost of the property with registration and legal fees stands at Tk. 29,388,800

viii) Property at Mirpur, Dhaka: Tk.19,217,216The Company has paid Tk. 19,561,269 for purchased a flat 2710.30 sqft. floor space including car parking with 1.238 Decimals Land At Mirpur Mazar Road, Mirpur-10, Dhaka.

ix) Property at Chattagram: Tk. 5,096,996The Company purchased a flat 758 sqpt land measuring .0023 Acre land at afford elesium Nasirabad, Ctg.Total cost of the property with registration and legal fees stands at Tk. 6,057,821.

x) Property at Chattagram Tk.6,730,937The Company purchased a flat 1305 sqft floor space (3rd floor) iccluding car parking with 0.36 decimals at afford Sultan Elesium Nasirabad, Chattagarm.Total cost of the property with registration and legal fees stands at Tk. 7,001,600.

xi) Property at Bogra: Tk. 35,437,798The Company purchased a plot of Land measuring 26.75 Decimals thereon in the District town of Bogura. Total cost of the property with registration and legal fees stands at Tk. 35,437,798

11.05 Meghna Life Securities & Investment Ltd.Tk. 396,000,000The Company has purchased a membership from DSE.

12.00 Outstanding Premium: Tk. 1,781,821,035The amount represents premium due as at December 31, 2019 for which grace period has not expired within the above date. The details break-up is made up as follows:Division 31-12-2019 31-12-2018Ekok Bima 1,025,584,507 1,041,866,587Loko Bima 446,551,389 448,460,983Islami Bima 309,685,139 311,413,503 Total: 1,781,821,035 1,801,741,073

13.00 Interest, Dividend and Rent Accrued but not Due: Tk. 483,888,121 The details break-up is made up as follows:

Particulars Notes 31-12-2019 31-12-2018 Interest on F.D.R 13.01 332,629,989 255,256,949 Interest on Motor/Bi-Cycle Loan 13.02 304,379 304,379 Interest on Policy Loan 13.03 16,012,356 13,332,376 Interest on Mortgage Loan 13.04 1,836,587 1,559,255 Interest on Govt. Treasury Bond 13.05 132,104,810 132,792,190 Interest on Alliance Capital 13.06 1,000,000 - Total 483,888,121 403,245,149

13.01 Interest on Fixed Deposit: Tk. 332,629,989 The details break-up is made up as follows: Particulars 31-12-2019 31-12-2018 Opening balance 255,256,949 151,920,136 Add : Provision made during the year 495,450,642 402,176,502 750,707,591 554,096,638 Less: Recovered during the year 418,077,602 298,839,689 Closing Balance: 332,629,989 255,256,949

13.02 Interest on Motor Cycle/Bi-Cycle Loan: Tk. 304,379 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Opening balance 304,379 314,195 Add: Provision made during the year 7,121 13,805 311,500 328,000 Less: Recovered/Adjustment made during the year 7,121 23,621 Closing Balance: 304,379 304,379

13.03 Interest on Insurer’s Policies Loan within their Surrender Value: Tk. 16,012,356 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Opening balance 13,332,376 11,547,083 Add: Provision made during the year 4,723,786 3,652,120 18,056,162 15,199,203 Less: Recovered/Adjustment made during the year 2,043,806 1,866,827 Closing Balance: 16,012,356 13,332,376

13.04 Interest on Mortgage Loan: Tk. 1,836,587 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Opening balance 1,559,255 1,297,245 Add: Provision made during the year 968,053 1,033,994 2,527,308 2,331,239 Less: Recovered/Adjustment made during the year 690,721 771,984 Closing Balance: 1,836,587 1,559,255

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13.05 Interest on Govt. Treasury bond: Tk. 132,104,810 The details break-up is made up as follows: Particulars 31-12-2019 31-12-2018 Opening balance 132,792,190 143,877,318 Add: Provision made during the year 448,274,695 454,872,722 581,066,885 598,750,040 Less: Recovered/Adjustment made during the year 448,962,075 465,957,850 Closing Balance: 132,104,810 132,792,190

13.06 Interest on Alliance Capital: Tk. 1,000,000 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Opening balance - - Add: Provision made during the year 1,000,000 - 1,000,000 - Less: Recovered/Adjustment made during the year - - Closing Balance: 1,000,000 -

14.00 Advance, Deposit and Prepayments: Tk. 1,513,743,397 The details break-up is made up as follows:

Particulars Notes 31-12-2019 31-12-2018 Advance Income tax 14.01 775,522,901 708,768,549 Advance against Office Rent 14.02 19,754,781 19,867,521 Advance against salary & allowances 14.03 126,085,114 126,304,231 Amount due from Meghna Life Sec. & Inv. Ltd. 14.04 16,839,134 13,130,739 Security deposit 1,329,730 1,235,730 Advance against TA/DA 742,251 670,371 Advance for purchase 235,087,276 305,368,659 Advance against field officers 338,382,210 344,129,259 Total 1,513,743,397 1,519,475,059

14.01 Advance Income Tax: Tk. 775,522,907 The details break-up is made up as follows:

FDR interest Tk. 41,813,750 STD Interest Tk. 1,509,647 Dividend Income Tk. 7,345,956 and Loan on MLSI Tk. 601,924 These related to the accounting year 2019 corresponding to assessment year 2020-2021 which is eligible for adjustment upon finalization of assessment.

The movement of the above balance is given below:

Particulars 31-12-2019 31-12-2018 Opening balance 708,768,549 636,037,598 Add: Tax deduction at source during the year 51,271,277 46,945,297 760,039,826 682,982,895 Less: Adjustment 2010 & 2011 17,568,671 117,800,084 742,471,155 565,182,811 Add: Advance Tax paid during the year 33,051,746 143,585,738 Closing Balance: 775,522,901 708,768,549

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a)

b) Year-wise brak up is as below: Accounting Year Assessment Year 30-06-2019 30-06-2018 1996 1997-1998 19,081 19,081 1997 1998-1999 153,558 153,558 1998 1999-2000 133,681 133,681 1999 2000-2001 522,743 522,743 2000 2001-2002 305,065 305,065 2001 2002-2003 447,715 447,715 2002 2003-2004 974,281 974,281 2003 2004-2005 2,087,181 2,087,181 2004 2005-2006 1,984,507 1,984,507 2005 2006-2007 4,879,895 4,879,895 2006 2007-2008 10,111,552 10,111,552 2007 2008-2009 14,298,877 14,298,877 2008 2009-2010 8,865,696 8,865,696 2009 2010-2011 (1,243,523) (1,243,523) 2010 2011-2012 58,634,215 58,634,215 2011 2012-2013 24,355,768 24,355,768 2012 2013-2014 52,854,531 52,854,531 2013 2014-2015 142,376,616 142,376,616 2014 2014-2016 125,809,123 125,809,123 2015 2015-2017 6,527,432 6,527,432 2016 2016-2018 92,038,827 92,038,827 2017 2018-2019 89,900,777 89,900,777 2018 2019-2020 72,730,951 72,730,951 2019 2020-2021 66,754,352 - Total 775,522,901 708,768,549

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14.02 Advance against office rent: Tk. 19,754,781 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Opening balance 19,867,521 19,953,922 Add : Advance paid during the year 4,918,900 5,766,769 24,786,421 25,720,691 Less: Adjustment made during the year 5,031,640 5,853,170 Closing Balance: 19,754,781 19,867,521

14.03 Advance against salary & allowances: Tk. 126,085,114


Particulars 31-12-2019 31-12-2018 Opening balance 126,304,231 125,133,159 Add : Advance paid during the year 3,298,628 7,188,532 129,602,859 132,321,691 Less: Recovered during the year 3,517,745 6,017,460 Closing Balance: 126,085,114 126,304,231

14.04 Amount due from Meghna Life Securities & Investment Ltd.: Tk. 16,839,134


Particulars 31-12-2019 31-12-2018 Opening balance 13,130,739 7,947,237 Add : Advance paid during the year 9,685,379 5,183,502 22,816,118 13,130,739 Less: Recovered during the year 5,976,984 - Closing Balance: 16,839,134 13,130,739

15.00 Sundry Debtors: Tk. 327,188,259 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 Premium Short Deposit 318,751,579 329,165,696 Petty Cash Suspense A/c. 8,436,680 7,666,795 Total: 327,188,259 336,832,491

Out of total Sundry Debtors of Tk. 327,188,259, a sum of Tk. 6,549,271 has been considered doubtful of recovery for which provision has been made upto December 31, 2008 in the account as per note 8.05. It is also notable that an amount of Tk. 4.96 Crore has subsequently recovered.

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16.00 Fixed Deposit with Banks: Tk. 5,716,600,000 The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 A-B Bank Ltd. 340,000,000 315,000,000 Al-Arafah Islami Bank Ltd. 795,000,000 720,000,000 Bangladesh Commerce Bank Ltd. 110,000,000 90,000,000 Bangladesh Finance And Investment Co. Ltd. 110,000,000 110,000,000 Bank Asia Ltd. 35,000,000 20,000,000 BRAC Bank Ltd. 105,000,000 55,000,000 Dhaka Bank Ltd. 150,500,000 110,000,000 EXIM Bank Ltd. 600,000,000 570,000,000 First Security Islami Bank Ltd. 145,000,000 140,000,000 IFIC Bank Ltd. 250,000,000 225,000,000 International Leasing and Financial Services Ltd. 193,500,000 193,500,000 Islami Bank Bangladesh Ltd. 65,000,000 60,000,000 Jamuna Bank Ltd. 125,000,000 126,000,000 Lanka Bangla Finance Ltd. 47,500,000 47,500,000 Meghna Bank Ltd 15,000,000 15,000,000 Mercantile Bank Ltd. 167,400,000 162,400,000 Midland Bank Ltd. 40,000,000 35,000,000 Modhumoti Bank Ltd 25,000,000 20,000,000 Mutual Trust Bank Ltd. 80,000,000 85,000,000 National Bank Ltd 25,000,000 20,000,000 National Credit and Commerce Bank Ltd. 102,300,000 92,300,000 NRB Commercial Bank Ltd. 40,000,000 35,000,000 NRB Global Bank Ltd. 5,000,000 5,000,000 One Bank Ltd. 40,000,000 45,000,000 Padma Bank Ltd. 155,000,000 - Peoples Leasing and Financial Services Ltd. 70,000,000 70,000,000 Premier Leasing & Finance Ltd. 30,000,000 30,000,000 Pubali Bank Ltd. 55,000,000 60,000,000 Reliance Finance Ltd. 90,000,000 90,000,000 Shahjalal Islami Bank Ltd. 85,000,000 85,000,000 Social Islami Bank Ltd 568,000,000 548,000,000 South Bangla Agriculture & Commerce Bank Ltd 230,000,000 190,000,000 Southeast Bank Ltd. 105,000,000 100,000,000 Standard Bank Ltd. 248,500,000 223,500,000 The City Bank Ltd. 10,000,000 5,000,000 The Farmers Bank Ltd. - 156,620,000 The Premier Bank Ltd 288,900,000 273,900,000 The Trust Bank Ltd. 45,000,000 45,000,000 Union Bank Ltd. 40,000,000 40,000,000 United Commercial Bank Ltd. 85,000,000 30,000,000 Total: 5,716,600,000 5,243,720,000

Accrued interest on FDR is calculated at the rate fixed by the bank individually as agreed upon.

94


17.00 Amount due to Other Persons or bodies Carrying on Insurance Business: Tk. 1,371,125 The amount receivable from Re-Insurer on account of share of Re-Insurance commission & claim after adjustment of share of Re-Insurance Premium.

18.00 Motor Cycle & Bi-Cycle Loan: Tk. 4,058,861

Particulars 31-12-2019 31-12-2018 Opening balance 4,114,441 4,457,234 Add : Addition during the year 293,500 175,327 4,407,941 4,632,561 Less: Recovered during the year 349,080 518,120 Closing Balance: 4,058,861 4,114,441

The above balance includes some motor cycle loans which are outstanding since long 19.00 Fixed assets (at cost less depreciation) Tk. 183,579,405

Particulars Office Furniture & Electrical & Motor Total Fixture Electronics Vehicles Equipment

Cost

As at January 01, 2019 16,770,225 71,997,057 111,725,502 300,492,784

Addition during the year 18,783,110 6,492,131 42,400 25,317,641

135,553,335 78,489,188 111,767,902 325,810,425

Disposal/Adjustment during the year - - 3,906,245 3,906,245

As at December 31, 2019 135,553,335 78,489,188 107,861,657 321,904,180

Depreciation

As at January 01, 2019 24,256,423 23,385,429 62,850,883 110,492,735

Charged during the year 12,124,396 7,609,967 9,235,720 28,970,083

Disposal/Adjustment during the year 1,138,043 1,138,043

As at December 31, 2018 36,380,819 30,995,396 70,948,560 138,324,775

Written Down Value

As at December 31, 2019 99,172,516 47,493,792 36,913,097 183,579,405

As at December 31, 2018 92,513,803 48,611,628 48,874,619 190,000,050

i) Addition to Office Electrical & Electronics Equipment represents Tk. 1,520,731 for Telephone installation, Tk. 48,763 for Computer, Tk 4,903,487 for office equipment, Tk 19,150 for Air Conditioner purchased during the year, 2019.

95


REVENUE ACCOUNT:20.00 Claim under policies (Including Provision for Claims due or intimated) Less Re- Insurance: Tk. 2,879,483,823

Particulars Ekok Bima Loko Bima Islami Bima Total By Death 33,922,639 10,640,655 14,863,412 59,426,706 By Death Group 19,070,915 - - 19,070,915 By Survival 702,303,194 101,729,178 292,692,098 1,096,724,470 By Surrender 10,273,660 1,694,698 4,808,268 16,776,626 Bonus in Cash 386,421,450 132,905,586 119,523,176 638,850,212 Claim by Maturity 393,092,999 423,511,906 232,029,989 1,048,634,894 Total 2019 1,545,084,857 670,482,023 663,916,943 2,879,483,823 Total 2018 1,486,681,030 481,273,493 631,126,048 2,599,080,571

During the year 2019 the company has settled and adjusted Tk. 2,879,383,823 including last year outstanding claims worth Tk. 263,923,449 as death claim, maturity claims and survival benefit. The amount of Tk. 57,049,228 was outstanding as on December 31, 2019. Out of outstanding amount, the company has settled Tk. 243,987,905 as of the date of audit.

21.00 Commission to Insurance Agents ( Less that on Re-Insurance Agents) Tk. 441,522,343

The details break-up is made up as follows: Particulars 31-12-2019 31-12-2018 Agency Commission 441,816,699 394,427,049 Less: Commission earned on re-insurance ceded 294,356 1,819,974 Total: 441,522,343 392,607,075

At the year end the agency commission payable amounted to Tk.29,530,961 (Notes:)

22.00 Depreciation: Tk. 30,436,226 The details break-up is made up as follows:

Particulars Notes 31-12-2019 31-12-2018 House Property 11.04 1,466,143 1,479,793 Fixed Assets 19.00 28,970,083 24,831,881

Total: 30,436,226 26,311,674 23.00 Premium Less Re-insurance: Tk. 4,345,363,361 The above balance is made-up as follows:

Type of Gross Re- Ins. Dec.’2019 Dec.’2018 Premium Premium ceded Net Net EB First year Premium 542,679,101 5,407,781 537,271,320 592,093,779 LB First year Premium 288,056,331 - 288,056,331 209,900,680 IB First year Premium 200,364,675 - 200,364,675 210,000,345 Sub Total : 1,031,100,107 5,407,781 1,025,692,326 1,011,994,804 EB Renewal Premium 1,923,251,729 - 1,923,251,729 1,957,100,325 LB Renewal Premium 633,856,077 - 633,856,077 622,700,470 IB Renewal Premium 731,840,729 - 731,840,729 690,500,522 Sub Total : 3,288,948,535 - 3,288,948,535 3,270,301,317 Group Insurance premium 30,722,500 - 30,722,500 32,300,540 Grand Total : 4,350,771,142 5,407,781 4,345,363,361 4,314,596,661

Out of total premium, first year premium is 23.70% renewal premium 75.59% & group insurance premium is 0.71%.

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24.00 Interest, Rent & Dividend: Tk. 1,023,282,654 The details break-up is made up as follows: Particulars 31-12-2019 31-12-2018 Interest on fixed deposit 495,450,642 402,187,639 Interest of short term deposit 13,266,770 13,520,860 Interest on Motor Cycle and Bi-cycle loan 25,518 39,583 Dividend income 50,989,506 86,269,081 Interest on policy loan 4,723,786 3,652,120 Interest on mortgage loan 968,053 1,033,994 Rental Income 502,555 974,980 Interest on treasury bond 446,340,482 452,138,341 Interest on Loan to MLSIL 11,015,342 3,728,221 Total: 1,023,282,654 963,544,819

Tax deducted at source on the above income has been shown under advance income tax. (Note: 14.0)

25.00 Capital Expenditure Commitment: There was no Capital Expenditure Commitment authorized by the Board of Directors as on December 31, 2019.

26.00 Contingent Liability and Assets: a) Claim against the Company not acknowledged as debt is NIL as on December 31, 2019. b) Claim by the Company not acknowledged as receivable is also NIL as on December 31, 2019.

27.00 Credit facility available to the Company: There was no Credit facility available to the Company under any contract as on December 31, 2019 other than trade credit available in the ordinary course of business.

28.00 Related Party Disclosure (IAS-24): The company has no “Related Party” connection as described in IAS 24 with any body who can exercise significant influence in making financial and operating decision.There is a subsidiary company in the name of Meghna Life Securities & Investment Ltd. The balance of Meghna Life Securities & Investment Ltd. {Loan: 1,050,000,000 (Notes:10.03) and Advance: 16,839,432 (Note: 14.04)} has been accounted for the year ended December 31, 2019.

29.00 Requirement under company’s Act 1994, Schedule XI Part - II The details break-up is made up as follows:

Particulars 31-12-2019 31-12-2018 (i) Number of employees drawing salary above Tk. 5,000 P.M 946 1,004 (ii) Number of employees drawing salary below Tk. 5,000 P.M. 367 381 Total 1,313 1,385

30.00 Payments/Perquisites to Directors/Officers:During the year 2019 an amount of Tk. 819,300 inclusive of VAT was paid to the Directors of the company as Board Meeting attendance fee as per resolution in this respect and Tk. 319,193,356 was paid to officers as salary & allowances details are shown below:

Particulars 31-12-2019 31-12-2018 Directors CEO Officers Directors CEO Officers Board Meeting Fee 819,300 - - 692,000 - - Basic Salary - 2,160,000 173,312,346 - 1,800,000 176,845,782 Other Allowances - 1,920,000 141,801,010 - 1,920,000 144,692,005 Total: 819,300 4,080,000 315,113,356 692,000 3,720,000 321,537,787

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31.00 Reconciliation of Cash Flows:

Particulars 31-12-2019 31-12-2018 Cash flow from operating activities: as per direct method 109,469,554 362,372,360 109,469,554 362,372,360 Cash flow from operating activities as per indirect method: Increase of Life fund before tax for the year 1,040,396,381 1,232,711,985 Adjustments to reconcile net increase in life fund to net cash used by operating activity Depreciation 30,436,225 26,311,674 Provision for income tax 78,551,642 61,607,305 Fair value change account 9,934,497 64,280,502 Loss on investment in share 20,634,011 8,039,108 Dividend 67,043,826 67,043,826 Interest, dividend and rent (1,023,282,654) (963,544,819) Profit on sale of cars (7,138,507) (4,741,194) (823,820,960) (741,003,598)

Income tax paid in cash (66,754,352) (72,730,950) (Increase)/Decrease in Advance and deposits 72,486,014 (209,257,784) (Increase)/Decrease in sundry debtors 9,644,232 21,457,146 (Increase)/Decrease in Stock 1,211,580 (4,138,812) (Increase)/Decrease in outstanding premium 19,920,038 56,511,384 (Increase)/Decrease in Agent balances 47,782,847 31,034,763 (Increase)/Decrease in amount due from other person & bodies carrying on Insurance business (900,694) - Increase/(Decrease) in amount due from other person & bodies carrying on Insurance business 4,246,969 3,386,180 Increase/(Decrease) in estimated liabilities respect of outstanding claims whether due or intimated (206,874,220) 85,517,239 Increase/(Decrease) in Sundry creditors except unclaimed dividend 9,473,456 (40,595,523) Increase/(Decrease) in premium deposit 2,658,262 (519,670) (107,105,868) (129,336,027) Net Cash flows from Operating Activities 109,469,554 362,372,360

32.00 Events after the Reporting Period (IAS-10):There was no significant event that has occurred between the balance sheet date and the date when the financial statements are authorized for issue by the Board of Directors except the following.

The Board of Directors of Meghna Life Insurance Company Limited in its 142nd meeting held on 31.08.2020 has recommended for declaration of Cash dividend @ 20% (Twenty) to the shareholders for approval in the ensuing Annual General Meeting.

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Annexure - I

Particulars Amount AmountAssets:Loan on Mortgage of Properties 9,510,424 Loan against life insurance Policy 39,042,038 Loan on Meghna Life Securities & Investment Ltd. 105,000,000 Investment 6,807,174,528 Agent Balance 152,380,803 Outstanding premium 1,781,821,035 Interest, Dividend & Rents accrued but not due 483,888,121 Advance, Deposit & Prepayments 1,513,743,397 Sundry Debtors 327,188,259 Cash & Bank Balance 7,900,915,562 Amt. due from other persons or bodies carrying on Ins Business 1,371,125 Motor Cycle & Cycle Loan 4,058,861 Stock (Stamp & Stationary) 18,417,751 Fixed Assets (at cost less depreciation) 183,579,405 19,328,091,309 LIABILITIES :Estimated liabilities in respect of Outstanding claim 57,049,229 Amt. due to other person or bodies carrying on Ins. Business 10,438,742 Sundry Creditors 1,013,776,995 Premium Deposit 3,881,792 1,085,146,758 Gross Fund 18,242,944,551 Less : Share holder’s Capital (Paid-Up-Capital) 335,219,130 Life Insurance Fund Including accretion of Tk. 1,040,396,381 as on 31.12.2019 17,907,725,420

MEGHNA LIFE INSURANCE CO. LIMITEDStatement of Life Insurance Fund

As at December 31, 2019



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Annexure - II

Class of Assets Book Value Market Value Remarks

LOANS : 153,552,462 153,552,462Loan on Mortgage Properties 9,510,424 9,510,424 Realizable ValueLoan of Insurer’s Policies within their Surrender Value 39,042,038 39,042,038 Realizable ValueLoan on Meghna Life Securities & Investment Ltd. 105,000,000 105,000,000 Realizable Value Investment : 6,807,174,528 7,129,188,714 Statutory Deposit with Bangladesh Bank (BGTB) 15,000,000 15,000,000 Face ValueBangladesh Govt. Treasury Bond 4,404,985,814 4,727,000,000 Face ValueShares 1,076,916,710 1,076,916,710 Realizable ValueMeghna Life Securities & Investment Ltd. 396,000,000 396,000,000 At CostHouse Properties in Bangladesh 914,272,004 914,272,004 At cost Agent Balance 152,380,803 152,380,803 Book value Cash & Bank Balances : 7,900,915,562 7,900,915,562Fixed Deposit with Banks 5,716,600,000 5,716,600,000 Realizable ValueCash in hand, STD. & CD Account balance with Bank 2,184,315,562 2,184,315,562 Realizable Value Outstanding premium 1,781,821,035 1,781,821,035 Book ValueInterest, rent & Dividend accrued but not due 483,888,121 483,888,121 Realizable Value OTHER ASSETS : Advance, deposits & prepayments 1,513,743,397 1,513,743,397 Book ValueSundry Debtors 327,188,259 327,188,259 Book ValueAmount due from other persons or bodies carrying 1,371,125 1,371,125 Book Valueon Insurance businessMotor Cycle & Cycle Loan 4,058,861 4,058,861 Book ValueStamp, Printing & Stationary in hand 18,417,751 18,417,751 At costFixed Assets (at cost less depreciation) 183,579,405 183,579,405 Depreciated Value Total: 19,328,091,309 19,650,105,495

FORM-"AA"Classified Summary of the Assets




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DIRECTOR’S CERTIFICATE

As per Regulations contained in the First Schedule of the Insurance Act, 1938, as amended, as per Section 40-B of the said Act, we certify that:

1. The value of investment in shares have been taken at cost and the quoted value thereof mentioned wherever available.

2. The Values of all assets as shown in the Balance Sheet and as classified on Form "AA" annexed have been duly reviewed as at 31st December, 2015 and in our belief, the said assets have been set forth in the Balance Sheet at amounts not exceeding their realisable or market values under several headings as enumerated in the annexed form.

3. All expenses of management in respect of Life Insurance business transacted by the company in Bangladesh have been fully debited in the Life Revenue Account as expenses.

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DIRECTORDMD & CFO CHIEF EXECUTIVE OFFICER

PARTICULARS NOTES 31-12-2019 31-12-2018CAPITAL & LIABILITIES Taka Taka

SHARE CAPITAL : AUTHORISED 60,000,000 Ordinary shares of Tk. 10 each 1.00 600,000,000 600,000,000

ISSUED, SUBSCRIBED & PAID UP 33,521,913 Ordinary Shares of Tk. 10 each 1.01 335,219,130 335,219,130 Fully Paid Up -BALANCE OF FUNDS AND ACCOUNTS 2.00 17,907,321,808 16,856,336,510 Life Insurance Fund (Annexure-I)

LIABILITIES AND PROVISIONSEstimated Liabilities in respect ofOutstanding claims whether due or intimated 3.00 57,049,229 263,923,449 Amount due to other persons or bodies carrying on Insurance Business. 4.00 10,438,742 6,191,773 Sundry Creditors 5.00 1,056,855,100 975,362,518 Premium Deposit 6.00 3,881,792 1,223,530 Non Controlling Interest 3,995,923 3,888,964 AFS Reserve - 913,410 Long Term loan from MLICL -Retained earnings -

TOTAL TAKA = 19,374,761,724 18,443,059,284

Consolidated Balance Sheet as atMEGHNA LIFE INSURANCE COMPANY

102

The annexed Notes 1 to 21 from an integral part of these financial statements.


CHAIRMANDIRECTOR

PROPERTY & ASSETS NOTES 31-12-2019 31-12-2018 Taka Taka LOANS: 7.00 48,552,462 41,186,128 On mortgage of properties 9,510,424 10,129,087 On Insurer's Policies within their Surrender Value 39,042,038 31,057,041 INVESTMENT : 8.00 6,670,350,696 6,356,190,697 Statutory Deposit (BGTB) 15,000,000 15,000,000 Bangladesh Govt. Treasury Bond 4,404,985,814 4,363,271,141 Shares & Debentures 1,095,944,501 1,018,987,744 House Property (At Cost Less Depreciation) 914,272,004 718,783,435 Investment in DSE Membership 240,148,377 240,148,377 Agents Balance 152,380,803 200,163,650 Outstanding Premium 9.00 1,781,821,035 1,801,741,073 Interest, Dividend and Rents accrued but not due 10.00 483,888,121 403,245,149 Advance, Deposit and Prepayments 11.00 1,522,390,703 1,536,731,120 Sundry Debtors 12.00 566,463,027 495,219,229.00 CASH AND BANK BALANCES 7,939,246,434 7,392,171,321 Fixed Deposit with Banks 13.00 5,746,600,000 5,273,720,000 Short Term Deposit 1,896,560,660 1,609,664,838 Current Account 217,167,123 450,437,929 Cash in Hand 78,918,651 58,348,554 Amount due from other Persons or bodies carrying on Insurance Business. 14.00 1,371,125 470,431 Motor Cycle & Bi-Cycle Loan 15.00 4,058,861 4,114,441 Stamps in Hand 11,522,128 10,236,505 Printing & Stationary in Hand 6,895,623 9,392,826 Fixed Assets (At Cost Less Depreciation) 16.00 185,820,706 192,196,714 TOTAL TAKA = 19,374,761,724 18,443,059,284

31st December- 2019LIMITED AND IT'S SUBSIDIARY

103



DIRECTORCHIEF EXECUTIVE OFFICERDated: Dhaka,20 August, 2020

Particulars NOTES 31-12-2019 31-12-2018 Taka TakaClaims under Policies (Including Provision for Claims due or intimated) Less-Reinsurance: 17.00 2,879,383,823 2,599,080,571 By Death 78,497,621 73,537,797 By Survival 1,096,624,470 1,092,488,962 By Maturity 1,049,234,894 832,595,892 By Surrenders 16,776,626 20,778,511 Bonus to Policy Holder 638,250,212 579,679,409 EXPENSES OF MANAGEMENT : 611,859,742 567,875,830 (a) Commission to Insurance Agents (Less that on re-insurance Agents). 18.00 441,522,343 392,607,075 (b) Allowances and Commission (Other than Commission included in Sub-item (a) above 170,337,399 175,268,755

Salaries etc.(Other than to Agents and those included in item (b) above 404,872,901 413,191,703 Gratuity 5,733,261 7,311,232 Travelling and conveyance 12,150,514 9,319,808 Directors Fees 939,300 1,139,876 Auditors Fees 419,750 321,500 Actuarial Fees 661,250 667,500 Credit Rating Fees 215,000 214,000 Medical Fees 2,397,757 2,357,465 Registration Renewal Fee 5,410,378 7,446,687 Advertisement & Publicity 3,145,846 2,699,249 Printing & Stationary 18,577,972 16,876,681 Policy Stamp Expenses 8,235,885 8,542,829 Revenue Stamps 3,566,125 3,694,074 Postage & Telegrams 4,081,926 4,418,040 Telephone, Telex and Fax 6,457,650 9,432,235 Electricity, Gas & Water Charges 8,865,399 9,643,671 Entertainment 7,745,639 6,827,801 Bank Charges 9,982,166 11,856,125 Conference 501,924 612,101 Development Expenses 8,551,172 9,770,205 Prizes and Contest 13,111,075 9,026,120 Repairs and Maintenance 19,878,334 18,302,329 Fuel and Lubricants 11,776,198 18,761,217 Subscription and Donation 1,175,950 2,565,656 Rents for offices belonging to and occupied by the company 888,480 888,480 Rents for other offices occupied by the company 72,721,130 77,492,512 Rates & Taxes 1,902,300 1,994,735 Legal and Professional Fees 957,619 371,004 Insurance Expenses 998,789 1,253,848 Newspaper and Periodicals 376,468 585,422 Cleaning & Washing Charges 339,261 327,070 Training Expenses 798,830 1,596,150 A.G.M Expenses 2,261,388 2,588,820 General Expenses 5,685,599 4,496,526 Contribution to Employess PF. 12,215,955 12,016,483 Employess Group Insurance Premium 602,195 363,671

658,201,386 678,972,825 OTHER EXPENSES: Dividend 67,043,826 67,243,826 Provision for Income Tax 85,193,988 65,622,889 Bad Debts Written off - 73,290 Loss on Investment in Share 20,634,011 41,554,074 Loss on Foreign Exchange 41,452 15,530 Provision for Loss on fluctuation of share value 9,934,497 64,280,502 VAT Expenses 21,046,372 - Depreciation 19.00 30,816,060 26,687,725 Non Controlling Interest 106,959 - Balance of Fund at the end of the year as shown in the Balance Sheet 17,907,321,808 16,856,336,510

TOTAL TAKA = 22,291,583,924 20,967,743,572

Consolidated Revenue Account For theMEGHNA LIFE INSURANCE COMPANY

DMD & CFO

104


DIRECTOR CHAIRMAN

PARTICULARS NOTES 31-12-2019 31-12-2018 Taka Taka

Balance of Fund at the Beginning of the Year 16,867,329,040 15,634,617,054

Premium Less-Reinsurance 20.00 4,345,363,361 4,314,596,661 First year premium- (EB) 542,679,101 606,600,540 First year premium- (LB) 288,056,331 209,900,680 First year premium-(IB) 200,364,675 210,000,345 1,031,100,107 1,026,501,565

Renewal Premium- (EB) 1,923,251,729 1,957,100,325 Renewal Premium- (LB) 633,856,077 622,700,470 Renewal Premium- (IB) 731,840,729 690,500,522 3,288,948,535 3,270,301,317

Group Insurance 30,722,500 32,300,540

Less Re-Insurance Premium 5,407,781 14,506,761 Interest, Rent & Dividend 21.00 1,042,365,023 943,115,930 Miscellaneous Income 676,602 137,226 Alteration Assignment Late Fees 23,692,601 11,126,558 Profit on Sale of Cars 7,138,507 4,741,194 Profit Commission Earned 837,731 - Brokerage commission 15,173,588 14,080,264 Other Income - 15,881,862 Retained earnings of MLSIL (10,992,529) 29,042,429 Non Controling Interest - 404,394

TOTAL TAKA = 22,291,583,924 20,967,743,572

year ended 31st December- 2019LIMITED AND IT'S SUBSIDIARY

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Meghna Life Insurance Company Limited And It's SubsidiaryConsolidated Statement of Changes in Shareholder's Equity



Particulars Share Share General Retained Other Total Non Capital Premium Reserve Earnings Reserve Controling Interest

Balance as on 01 January 2018 335,219,130 - - - - 335,219,130 4,293,358

Add/less profit/loss during the year - - - - - - (404,394)

Balance as on 31 December 2018 335,219,130 - - - - 335,219,130 3,888,964

Particulars Share Share General Retained Other Total Non Capital Premium Reserve Earnings Reserve Controling Interest

Balance as on 01 January 2019 335,219,130 - - - - 335,219,130 3,888,964

Add/less profit/loss during the year - - - - - - 106,959

Balance as on 31 December 2019 335,219,130 - - - - 335,219,130 3,995,923



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PARTICULARS 2019 (MLIC) 2019 (MLI Sec.) 31-12-2019 31-12-2018CASH FLOWS FROM OPERATING ACTIVITIES :

Collection from Premium 4,367,941,661 - 4,367,941,661 4,370,588,375Interest, dividend & rent received 942,639,682 43,270,013 985,909,695 -Other income received 24,670,051 - 24,670,051 898,998,156Payment for Claims (3,086,258,043) - (3,086,258,043) 11,263,784Payment for Re-insurance, Management Expenses, - - - (2,513,563,332)Commission and others (1,197,118,008) - (1,197,118,008 (15,374,589)Income Tax paid/deducted (66,754,352) (41.189,215) (107,943,567) (1,499,886,549) - (8,137,076) (8,137,076) (76,784,033)Net Cash Flows from operating activities (A) 985,120,991 (6,056,278) 979,064,713 1,175,241,812

CASH FLOWS FROM INVESTING ACTIVITIES :Investment made (802,632,203) - (802,632,203) (985,005,636)Disposal of Investment 97,628,292 - 97,628,292 451,148,995 Acquisition of Fixed Assets (22,549,437) (424,472) (22,973,909) (33,514,966)Loan against Policies Paid (15,039,934) - (15,039,934) (3,634,625)Loan against Policies realized 7,054,937 - 7,054,937 2,879,715 Other Loans paid (300,000) (81,718,172) (82,018,172) (12,143,461)Other Loans realized 918,663 - 918,663 (70,296,785)Proceeds from sale of Fixed Assets 7,138,507 - 7,138,507 (73,719,838)Proceeds from sale of Investment 296,293,412 (22,475,670) 318,769,082 6,191,817 Investment in DSE Membership - - - 80,051,623 Other Loans realized - - - 937,400 Proceeds from sale of Fixed Assets - - - 4,741,194 Proceeds from sale of Investment - - - 297,047,937 Net Cash Flows from investing activities (B) (431,487,763) (59,666,974) (491,154,737) (335,316,630)

Cash Flows from Financing Activities :Increase of Share Capital - - - 50,000,000 Dividend Paid 4,165,136 55,000,000 59,165,136 (20,624,365)Net Cash used in financing activities (C) 4,165,136 55,000,000 59,165,136 29,375,635

Net increase in Cash & Cash equivalents (A+B+C) 557,798,364 (10,723,251) 547,075,113 869,300,817 Cash and Cash equivalents at the beginning of the year 7,343,117,198 49,054,124 7,392,171,322 6,512,870,506 Cash and Cash equivalents at the end of the year 7,900,915,562 38,330,873 7,939,246,434 7,382,171,323

Meghna Life Insurance Company Limited And It's SubsidiaryConsolidated Cash Flow Statement For the ended December 31, 2019



107




108


1.00 Share Capital : Tk. 600,000,000 Authorized Capital: The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 600,000,000 600,000,000 Meghna Life Securities & Inv. Ltd. - - 600,000,000 600,000,000

1.01 Issued Subscribed and paid-up Capital: Tk. 335,219,130 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 335,219,130 335,219,130 Meghna Life Securities & Inv. Ltd. - - Total: 335,219,130 335,219,130

2.00 Life Insurance fund: Tk. 16,856,336,510 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 17,907,725,421 16,867,329,039 Meghna Life Securities & Inv. Ltd. (403,613) (10,992,529) Total: 17,907,321,808 16,856,336,510

3.00 Estimated Liabilities in respect of outstanding claims whether due of intimated: Tk. 57,049,229 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 57,049,229 263,923,449 Meghna Life Securities & Inv. Ltd. - - Total: 57,049,229 263,923,449

4.00 Amount due to other persons of bodies carrying on Insurance Business: Tk. 10,438,742 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 10,438,742 6,191,773 Meghna Life Securities & Inv. Ltd. - - Total: 10,438,742 6,191,773

5.00 Sundry Creditors: Tk. 1,056,855,100 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 1,013,776,996 911,652,263 Meghna Life Securities & Inv. Ltd. 43,078,104 63,710,255 Total: 1,056,855,100 975,362,518

6.00 Premium Deposit: Tk. 3,881,792 The above balance is made-up as follows:

Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 3,881,792 1,223,530 Meghna Life Securities & Inv. Ltd. - - Total: 3,881,792 1,223,530

7.00 Loan Account: Tk. 48,552,462 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 48,552,462 91,186,128 Meghna Life Securities & Inv. Ltd. - - Total: 48,552,462 91,186,128

Meghna Life Insurance Company Limited And It's SubsidiaryConsolidated Notes to the Financial Statements

For the ended December 31,2019

109


8.00 Investment: Tk. 6,670,350,696 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 6,411,174,528 6,079,564,183 Meghna Life Securities & Inv. Ltd. 259,176,168 276,626,514 Total: 6,670,350,696 6,356,190,697

9.00 Outstanding Premium: Tk. 1,781,821,035 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 1,781,821,035 1,801,741,073 Meghna Life Securities & Inv. Ltd. - - Total: 1,781,821,035 1,801,741,073

10.00 Interest, Dividend and Rent accrued but not due: Tk. 483,888,121 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 483,888,121 403,245,149 Meghna Life Securities & Inv. Ltd. - - Total: 483,888,121 403,245,149

11.00 Advance, Deposit and Prepayments: Tk. 1,522,390,703 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 1,513,743,397 1,519,475,059 Meghna Life Securities & Inv. Ltd. 8,647,306 17,256,061 Total: 1,522,390,703 1,536,731,120

12.00 Sundry Debtors: Tk. 566,463,027 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 327,188,259 336,832,491 Meghna Life Securities & Inv. Ltd. 239,274,768 158,386,738 Total: 566,463,027 495,219,229

13.00 Fixed Deposit with Banks: Tk. 5,746,600,000 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 5,716,600,000 5,243,720,000 Meghna Life Securities & Inv. Ltd. 30,000,000 30,000,000 Total: 5,746,600,000 5,273,720,000

14.00 Amount due from other persons or bodies Carrying on Insurance business: Tk. 1,371,125 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 1,371,125 470,431 Meghna Life Securities & Inv. Ltd. - - Total: 1,371,125 470,431

15.00 Motor Cycle and Cycle Loan: Tk. 4,058,861

The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 4,058,861 4,114,441 Meghna Life Securities & Inv. Ltd. - - Total: 4,058,861 4,114,441

110


16.00 Fixed Assets (At cost less depreciation) : Tk. 185,820,706 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 183,579,405 190,000,050 Meghna Life Securities & Inv. Ltd. 2,241,301 2,196,664 Total: 185,820,706 192,196,714

17.00 Claims under Policies (Including Provision for Claims due or Intimated) Less-Reinsurance : Tk. 2,879,383,823 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 2,879,383,823 2,599,080,571 Meghna Life Securities & Inv. Ltd. - - Total: 2,879,383,823 2,599,080,571

18.00 Commission to Insurance Agents (Less that on re-insurance Agents) : Tk. 441,522,343 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 441,522,343 392,607,075 Meghna Life Securities & Inv. Ltd. - - Total: 441,522,343 392,607,075

19.00 Depreciation : Tk. 30,816,060 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 30,436,225 26,311,674 Meghna Life Securities & Inv. Ltd. 379,835 376,051 Total: 30,816,060 26,687,725

20.00 Premium Less-Reinsurance : Tk. 4,345,363,361 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 4,345,363,361 4,314,596,661 Meghna Life Securities & Inv. Ltd - - Total: 4,345,363,361 4,314,596,661

21.00 Interest, Rent & Dividend : Tk. 1,042,365,023 The above balance is made-up as follows: Particulars 31-12-2019 31-12-2018 Meghna Life Ins. Co. Ltd 1,023,282,654 940,016,598 Meghna Life Securities & Inv. Ltd. 18,987,926 3,099,332 Total: 1,042,365,023 943,115,930

Dated: Dhaka, 20 August, 2020 A. WAHAB & CO.CHARTERED ACCOUNTANTS


Annexure - I

Particulars Amount AmountAssets:Loan on Mortgage of Properties 9,510,424 Loan against life insurance Policy 39,042,038 Investment 6,670,350,696 Agent Balance 152,380,803 Outstanding premium 1,781,821,035 Interest, Dividend & Rents accrued but not due 483,888,121 Advance, Deposit & Prepayments 1,522,390,703 Sundry Debtors 566,463,027 Cash & Bank Balance 7,939,246,434 Amt. due from other persons or bodies carrying on Ins Business 1,371,125 Motor Cycle & Cycle Loan 4,058,861 Stock (Stamp & Stationary) 18,417,751 Fixed Assets (at cost less depreciation) 185,820,706 19,374,761,724 LIABILITIES :Estimated liabilities in respect of Outstanding claim 57,049,229 Amt. due to other person or bodies carrying on Ins. Business 10,438,742 Sundry Creditors 1,056,855,100 Premium Deposit 3,881,792 Non Controlling Interest 3,995,923 AFS Reserve - 1,132,220,786 Gross Fund 18,242,540,938

Less : Share holder’s Capital (Paid-Up-Capital) 335,219,130

Life Insurance Fund Including accretion of Tk. 1,050,985,298 as on 31.12.2019 17,907,321,808

MEGHNA LIFE INSURANCE CO. LIMITEDConsolidated Statement of Life Insurance Fund




111




Annexure - II

Class of Assets Book Value Market Value Remarks

LOANS : 48,552,462 48,552,462 Loan on Mortgage Properties 9,510,424 9,510,424 Realizable ValueLoan of Insurer’s Policies within their Surrender Value 39,042,038 39,042,038 Realizable Value

Investment : 6,670,350,696 6,992,364,882 Statutory Deposit with Bangladesh Bank (BGTB) 15,000,000 15,000,000 Face ValueBangladesh Govt. Treasury Bond 4,404,985,814 4,727,000,000 Face ValueShares 1,095,944,501 1,095,944,501 Realizable ValueHouse Properties in Bangladesh 914,272,004 914,272,004 At CostMeghna Life Securities & Investment Ltd. 240,148,377 240,148,377 At cost Agent Balance 152,380,803 152,380,803 Book value

Cash & Bank Balances : 7,939,246,434 7,939,246,434 Fixed Deposit with Banks 5,746,600,000 5,746,600,000 Realizable ValueCash in hand, STD. & CD Account balance with Bank 2,192,646,434 2,192,646,434 Realizable Value Outstanding premium 1,781,821,035 1,781,821,035 Book ValueInterest & Dividend accrued but not due 483,888,121 483,888,121 Realizable Value OTHER ASSETS : Advance, deposits & prepayments 1,522,390,703 1,522,390,703 Book ValueSundry Debtors 566,463,027 566,463,027 Book ValueAmount due from other persons or bodies carrying on Ins. Business 1,371,125 1,371,125 Book ValueMotor Cycle & Cycle Loan 4,058,861 4,058,861 Book ValueStamp, Printing & Stationary in hand 18,417,751 18,417,751 At costFixed Assets (At cost less depreciation) 185,820,706 185,820,706 Depreciated Value Total: 19,374,761,724 19,696,775,910

Consolidated Form-"AA"Classified Summary of the Assets




112




114

Estd. 1974

Mahfel Huq & Co.Chartered AccountantsThe first registered accounting firm in independent Bangladesh

An independent member firm of AGN International

Independent Auditor’s Report to the Shareholders of

Report on the Financial Statements

Opinion

Basis for Opinion

MEGHNA LIFE SECURITIES AND INVESTMENT LIMITED

INTERNATIONALagn

BGIC Tower (4th Floor)34, Topkhana RoadDhaka-1000, BangladeshTel: +88-02-9553143, 9581786Fax: +88-02-9571005E-mail : [email protected]: www.mahfelhuq.com

We have audited the financial statements of Meghna Life Securities and Investment Limited, which comprise the Statement of Financial Position as at 31 December 2019 and the Statement of Profit or Lose. and Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and_notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements give true and fair view, in all material respects. of the financial position of the Company as at 31 December 2019 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) and comply with the requirements of the Companies Act, 1994, The Securities and Exchange Rules, 1987 and other applicable laws and regulations.

We conducted our audit in accordance with International Standards on Auditing (1SAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical respOnsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Companies Act, 1994 require the Management to ensure effective internal audit, internal control and risk management functions of the Company.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Mahfel Huq & Co. is an independent member firm of AGN International, UK. AGN International is a worldwide association of separate and independent accounting and consulting firm. Each member of AGN operates under its own local or national name and remains autonomous.

Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal Controls

115

Estd. 1974

Mahfel Huq & Co.Chartered AccountantsAn independent member firm of AGN International INTERNATIONAL

agn

Auditor's Responsibilities for the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Those charged with governance are responsible for overseeing the Company's financial reporting process.

116

Estd. 1974

Mahfel Huq & Co.Chartered AccountantsAn independent member firm of AGN International INTERNATIONAL

agn

Report on other Legal and Regulatory Requirements

In accordance with the Companies Act, 1994 and The Securities and Exchange Rules, 1987, we also report the following:

we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of these books;

the statement of financial position and statements of profit or loss and other comprehensive income dealt with by the report are in agreement with the books of account and returns; and

the expenditure incurred was for the purposes of the Company's business.

a)

b)

c)

d)

Place: DhakaDated: 09 August 2020

Md. Abu Kaiser, FCAMahfel Huq & Co.Chartered Accountants

ASSETSNon-Current Assets: 261,617,469 279,023,178 Property, Plant & Equipment Schedule-A 2,241,301 2,196,664 Investment in DSE Membership 4.00 240,148,377 240,148,377 Investment in Share-at Market Value 5.00 19,027,791 32,843,512 Investment in IPO Share 6.00 - 3,634,625 Security Deposit 200,000 200,000

Current Assets: 302,892,080 224,496,922 Advance, Deposit & Prepayments 7.00 25,286,440 17,056,061 Trade and other Receivables 8.00 239,274,768 158,386,738 Investment in FDR 9.00 30,000,000 30,000,000 Cash & Cash Equivalents 10.00 8,330,872 19,054,124

Total Assets 564,509,549 503,520,100

EQUITY AND LIABILITIES

Shareholders' equity 402,162,736 389,809,845 Share Capital 11.00 400,000,000 400,000,000 Retained Earnings 12.00 (407,688) (11,103,565)Provision for change in fair value of share 5.01 2,570,424 913,410

Non Current Liabilities: 105,000,000 50,000,000 Long Term Loan From MLICL 13.00 105,000,000 50,000,000

Current Liabilities: 57,346,813 63,710,255 Trade and Other Payable 14.00 27,521,352 40,527,140 Provision for Tax 15.00 29,825,461 23,183,115

Total Equity and Liabilities 564,509,549 503,520,100

Off-Balance Sheet Items

Customers Investment in Shares-at cost 1,263,489,209 1,314,649,776

Net Asset Value per Share 23.00 10.05 9.75

Meghna Life Securities and Investment LimitedStatement of Financial Position

As at 31 December 2019


The accounting policies and explanatory notes form an integral part of the Financial Statements.

CHIEF EXECUTIVE OFFICER DIRECTORDIRECTOR CHAIRMAN

Subject to our separate report of even date annexed.

Mahfel Huq & Co.Chartered Accountants


117

Particulars Notes31 Dec 2019

Amount in Taka

31 Dec 2018

Operating Revenue 16.00 42,367,132 29,962,126

Less: Operating Expenses: 28,469,959 15,970,260 Brokerage Expenses 17.00 2,267,513 2,126,884 Financial Expenses 18.00 11,015,342 3,728,221 Administrative Expenses 19.00 15,187,104 10,115,155 Operating Profit/(Loss) 13,897,173 13,991,866 Add: Other Income 3,441,050 (30,415,634)Investment Income 20.00 94,443 (33,514,966)Interest Income 21.00 3,346,607 3,099,332 Net Profit/(Loss) Before Tax 17,338,223 (16,423,768)Less: Income Tax Provision 15.01 6,642,346 4,015,584 Net Profit/(Loss) After Tax 10,695,877 (20,439,352)Other Comprehensive Income:Provision for change in fair value of share 1,657,014 (1,143,298)Total Comprehensive Income 12,352,891 (21,582,650) Earnings per share 22.00 0.27 (0.51)

Meghna Life Securities and Investment LimitedStatement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2019







118

Particulars Notes 01 Jan 2019 to31 Dec 2019

Amount in Taka01 Jan 2018 to31 Dec 2018

Balance as on January 01, 2019 400,000,000 (11,103,565) 913,410 389,809,845

Net Profit/(Loss) after tax for the year - 10,695,877 - 10,695,877

Dividend Paid - - - -

Provision for change in fair value of share - - 1,657,014 1,657,014

Balance as on December 31, 2019 400,000,000 (407,688) 2,570,424 402,162,735

Meghna Life Securities and Investment LimitedStatement of Changes in Equity

For the year ended December 31,2019



Particulars Share Retained Unrealised Total Capital Earnings Gain/(Loss) Equity

Particulars Share Retained Unrealised Total Capital Earnings Gain/(Loss) Equity

Balance as on January 01, 2018 400,000,000 29,335,787 2,056,708 431,392,495

Net Profit/(Loss)a fter tax for the year - (20,439,352) - (20,439,352)

Dividend Paid - (20,000,000) - (20,000,000)

Provision for change in fair value of share - - (1,143,298) (1,143,298)

Balance as on December 31, 2018 400,000,000 (11,103,565) 913,410 389,809,845

Amount in Taka






119

120

A. Cash in Flow from Operating Activities Collection from customers: Cash received from interest and others 43,270,013 29,742,509 Cash paid for Operating expenses (41,189,215) (15,374,589) Advance Income tax paid (8,137,076) (4,053,083)

Net Cash flow from operating activities (6,056,278) 10,314,837

B. Cash Flow from Investing Activities:

Acquisition of property, plant and equipment (PPE) (424,472) (14,072) Loan paid to customer (Against margin Loan) (81,718,172) (61,262,398) Investment in DSE Membership - 80,051,623 Investment Profit 94,443 (33,514,966) Investment IPO 3,634,625 (3,634,625) Interest Income 3,273,868 2,879,715 Investment of FDR - (10,000,000) Investment in Share (Dealer Account) 15,472,735 (12,143,461)

Net cash flow from/(used in) investing activities (59,666,974) (37,638,184)

C. Cash Flow from Financing Activities: Long Term Loan From MLICL 55,000,000 50,000,000 Dividend Paid - (20,000,000)

Net cash flow from/(used in) Financing Activities 55,000,000 30,000,000

Net Increase(Decrease) in cash and cash equivalents (10,723,251) 2,676,653 Cash and cash equivalents at beginning of the year 19,054,124 16,377,471 Cash and cash equivalents at end of the year 8,330,872 19,054,124 Net operating cash flow per share 24.00 (0.15) 0.26

Meghna Life Securities and Investment LimitedStatement of Cash Flows

For the year ended 31 st December-2019







Particulars Notes01 Jan 2019 to31 Dec 2019

Amount in Taka

01 Jan 2018 to31 Dec 2018

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1.00 General:

1.01 Background of the Company: Meghna Life Securities & Investment Limited was incorporated on the April 18, 2013 under the Companies Act,1994 as a public Company Limited by shares. It is a Subsidiary Company of Meghna Life Insurance Co. Limited. Meghna Life Securities And Investment Limited is a TREC holder of Dhaka Stock Exchange Limited bearing No.245. The registered office of the company is situated at Biman Bhabon,100 Motijheel C/A (5th Floor) Dhaka-1000, Bangladesh.

1.02 Principal Activities and Nature of Operation:

The Principal objectives of the Company are to carry on the business of stock brokers and any business as permissible for a broker and dealer house duly licensed by the Bangladesh Securities and Exchange Commission (BSEC) and other service as mentioned in the Memorandum and Articles of association of the Company. The Company Commenced its commercial activities from September 30,2014.

2.00 Basis of Preparation of Financial Statements:

2.01 Statement of Compliance:

The Financial Statements of Meghna Life Securities And Investment Limited have been prepared in accordance with:a) International Financial Reporting Standards (IFRSs);b) International Accounting Standards (IASs);c) The Companies Act 1994;d) The Income Tax Ordinance 1984;e) The Vat Act 1991;f) Securities and Exchange Commission (Stock dealer, broker and authorized

representative) Rules 2000;g) Bangladesh Securities and Exchange Commission Rules -1987; and h) Other applicable Laws and regulations relevant in Bangladesh.

1.03.0 Basis of Accounting:The financial statements of the Company have been prepared on accrual basis of accounting and accordingly reflect all significant receivables, payables and other liabilities and assets.

2.02 Components of Financial StatementsThe presentation of these financial statements are in accordance with the guidelines provided by IAS 1, "Presentation of Financial Statements". The Financial Statements Comprise of:(a) Statement of Financial Position as at 31 December 2019; (b) Statement of Profit or Loss and other Comprehensive Income for the year ended 31 Dec 2019;(c) Statement of Changes in Equity for the year ended 31 December 2019; (d) Statement of Cash Flows for the year ended 31 December 2019; and (e) Notes comprising a summary of significant accounting policies and explanatory information.

2.03 Reporting Period The Financial Statements cover twelve months period from January 01, 2019 to December 31, 2019.

Meghna Life Securities and Investment LimitedNotes to the Financial Statements

As at and for the year ended 31st December 2019


123

2.04 Use of Estimates and Judgments The preparation of financial statements require management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and for contingent assets and liabilities that require disclosure, during and at the date of the financial statements.

Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on going basis. Any revision of accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

In particular, the key areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements include inventory valuation, accrued expenses, Property, Plant and Equipment, Advance, Deposits and pre-payments, Trade Receivables, Trade Payables, Income Tax Liability other payables.

2.05 Reporting Currency and Level of Precision:

The figures in the financial statements represent Bangladesh Currency (Taka), Which have been rounded-off to the nearest Taka.

2.06 Going Concern It has been reviewed by the management that there was no significant going concern threat to the operation of the company. The company has adequate resources to continue its operations for foreseeable future.

2.07 Comparative InformationPrevious year's figures have been re-arranged/re-classified, where necessary, to conform to change in presentation in the current year.

3.00 Significant Accounting PoliciesThe accounting principles and policies in respect of material items of financial statements set out below:

3.01 Revenue Recognition a) In compliance with the requirements of IFRS 15 : Revenue from contracts with customers, operating revenue is recognized at the time of service provided to customers and such amount is received with Bank.

3.02 Dividend as Bonus Share:Dividend receipt as Bonus Share are recorded into Investment in Shares without value which are increased only the Number of Invested Shares.

3.03 Property, Plant and Equipment:

3.03.1 Recognition and MeasurementProperty, Plant & Equipment are accounted for according to IAS 16 "Property, Plant and Equipment" at Historical cost less cumulative depreciation except land and land development which consider at revalued and includes expenditures that are directly attributable to the acquisition of the assets. The cost of self constructed/installed assets includes the cost of materials, direct labor and any other costs directly attributable to bringing the assets to the working condition for its intended use and cost of dismantling and removing the items and restoring the site on which they located.


3.03.2 Depreciation policy In accordance with the provisions of IAS-16: Property, Plant and Equipment. Depreciation charged on an asset when the assets are available for use. Depreciation is charged on all fixed assets except land and land development on reducing balance method.

Depreciation rates are consistently followed and as follows:

Category RateAir Conditioner 15%Furniture & Fixture 10%Computer & Software 20%Office equipment 15%Office Renovation 10%Installation of telephone & internet 15%Telephone 15%

3.04 Cash and Cash EquivalentsCash & Cash Equivalents consist of cash in hand and cash at banks that are readily convertible into cash.

3.05 Statement of Cash FlowsStatement of Cash Flows is prepared principally in accordance with IAS-7. Cash Flows from operating activities have been presented under Direct method as required by the Securities and Exchange Rules 1987.

3.06 Financial InstrumentsFinancial Instruments are accounted for according to IFRS 9 "Financial instruments" at Fair Value.Non- derivative financial instruments comprise of accounts and other receivables, cash & cash equivalents and other payables are shown at transaction cost.

3.07 Accrued Expenses and Other PayablesLiabilities are recognized for the services received, whether invoiced or not for those services. Payables are not interest bearing and stated at their nominal value.

3.08 Taxation3.08.1 Current Tax:

Current tax is the expected tax payable on the taxable income for the financial year, using tax rates enacted or subsequently enacted after the reporting date and any adjustment to tax payable in respect of previous years. Provision for taxation is calculated on the basis of applicable current tax rate and incompliance with Finance Act, 2019.

3.08.2 Deferred Tax: The Company did not recognize any deferred tax.

3.08.3 Advance Income Tax The Amount of Advance Income Tax are mainly deduction of tax at source by bank on profit arisen from bank deposits.

3.09 Provisions As per “IAS 37: Provisions, Contingent Liabilities and Contingent Assets’, a provision is recognized on the date of statement of financial position if, as a result of past event, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit will be required to settle the obligation.

3.10 Earning Per Share (EPS) This has been calculated in compliance with the requirements of IAS 33 “Earnings Per share” dividing basic earning by average number of shares outstanding at the end of the period.

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4.00 Investment in DSE Membership: This is made up as follows:

Particulars 31 Dec 2019 31 Dec 2018 Opening Balance 240,148,377 320,200,000 Less: 25% Share Sale - 80,051,623 240,148,377 240,148,377

5.00 Investment in Share-at Market Value This is made up as follows: 31 Dec 2019 31 Dec 2018 List of Financial Instruments Cost Market Value Cost Market Value

ACI 495,496 272,250 5,504,468 4,726,638 AND Telecom 569,040 569,040 - - BSC - - 4,024,041 3,510,000 CITY BANK - - 3,629,250 3,322,000 DBH 1,201,285 1,383,030 1,201,285 1,423,400 DELTA SPINN - - 825,000 620,000 RENATA 1,784,060 2,496,731 1,784,060 2,363,112 SQURPHARMA 1,060,695 1,169,070 1,060,695 1,461,904 BBSCABLES 46,180 394,901 46,180 588,008 BIFC - - 270,311 219,895 COPPERTECH 47,410 116,983 - - ESQUIRENIT 470,025 295,594 - - GENEXIL 26,170 202,807 - - IBP - - 29,440 100,702 INTRACO - - 43,967 123,709 KTL - - 109,776 305,498 METROSPIN - - 3,490,978 2,964,560 MLDYEING - - 60,400 215,266 NEWLINE 75,130 118,962 - - NURANI 482,686 260,820 - - NAHEEACP - - 20,405 39,946 QUEENSOUTH - - 4,882 20,460 RAHIMTEXT - - 5,642,500 5,006,375 RUNNERAUTO 1,080,825 900,295 - - SEAPEARL 37,300 161,731 - - SILCOPHL 72,930 243,067 - - SILVAPHL - - 91,930 276,709 SKTRIMS - - 50,420 256,780 SONALIPAPR - - 3,847,880 4,750,000 SSSTEEL 3,064 7,583 101,180 101,180 STANCERAMIC 9,005,072 10,434,930 - - VFSTDL - - 91,055 447,372 Total 16,457,367 19,027,791 31,930,102 32,843,512


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5.01 The difference of market value and cost of the Shares as at 31st December 2019 is Tk. 2,570,424.00 which is recognized as unrealized gain on Investment in Share.

31 Dec 2019 31 Dec 2018 a) Investment in securities at market price as on 31 December. 2019 19,027,791 32,843,512 b) Investment in securities at cost price as on 31 December. 2019 16,457,367 31,930,102 c) Total unrealized gain/(loss) as on 31 December. 2019 2,570,424 913,410

6.00 Investments in IPO Share: This is made up as follows: 31 Dec 2019 31 Dec 2018 - 3,634,625 - 3,634,625 7.00 Advance, Deposit & Prepayments:

Particulars Notes 31 Dec 2019 31 Dec 2018 Advance against Office Rent, Salaries & Allowances 330,802 237,499 Advance Income Tax 7.01 24,955,638 16,818,562 Total 25,286,440 17,056,061

7.01 Advances Income Tax: This is made up as follows:

Particulars 31 Dec 2019 31 Dec 2018 Opening Balance 16,818,562 12,802,978 Add: TDS against Bank Interest 327,387 287,972 TDS against Brokerage Commission 2,203,024 2,195,170 TDS against Dividend Income 607,023 1,532,442 Pay Order of Advance Income Tax 4,999,642 - Closing Balance 24,955,638 16,818,562

8.00 Trade and Other Receivables: This is made up as follows:

Particulars Notes 31 Dec 2019 31 Dec 2018 Interest Receivable 21.00 943,836 871,096 Receivable DSE 10,313,886 11,216,767 Receivable from Clients 228,017,047 146,298,875 Total 239,274,768 158,386,738

9.00 Investment in FDR: This is made up as follows:

Particulars 31 Dec 2019 31 Dec 2018 AB Bank Ltd. 20,000,000 20,000,000 Modhumoti Bank Ltd. 10,000,000 10,000,000 Total 30,000,000 30,000,000


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10.00 Cash & Cash Equivalents This is made up as follows:

Particulars Notes 31 Dec 2019 31 Dec 2018 Cash in Hand 620,220 493,491 Balance at Bank 10.01 7,710,652 18,560,633 Total: 8,330,872 19,054,124

The cash in hand Tk. 620,220 has been Certified by the management.

10.01 Cash at Bank This is made up as follows:

Particulars A/C No. 31 Dec 2019 31 Dec 2018 Name of the Bank: City Bank (SND) 3101434143001 4,395,662 10,029,813 City Bank 3101434143002 1,264,540 6,846,780 City Bank 3101434143003 7,044 7,310 City Bank 3101434143004 995,386 798,521 City Bank (Public Issue Application) 1101434143001 1,048,020 878,210 Total: 7,710,652 18,560,633

The above balances are in agreement with the respective bank statements.

11.00 Share Capital This is made up as follows:

Authorized Capital 31 Dec 2019 31 Dec 2018 125,000,000 ordinary shares of TK. 10 each 1,250,000,000 1,250,000,000

The Authorized Capital of the Company is Tk.1,250,000,000 only divided by 125,000,000 Ordinary Shares of Tk. 10 each.

Issued, Subscribed & Paid-up Capital 400,000,000 400,000,000

Paid-up capital of the company stands at Tk. 400,000,000 divided in to 40,000,000 Ordinary Shares of Tk. 10 each. Break down is as follows-

Total Share Holding Position is as below:

Meghna Life Insurance Co. Ltd. 39,600,000 99.00% 396,000,000 396,000,000 Mr. Nizam Uddin Ahmed 55,000 0.14% 550,000 550,000 Ms. Hasina Nizam 59,500 0.15% 595,000 595,000 Mr. Nasir Uddin Ahmed 59,500 0.15% 595,000 595,000 Mr. Riaz Uddin Ahmed 59,500 0.15% 595,000 595,000 Ms. Sharmin nasir 55,000 0.14% 550,000 550,000 Ms. Dilruba Sharmin 55,000 0.14% 550,000 550,000 Mr. Rashed Uddin Ahmed 55,000 0.14% 550,000 550,000 Mr. Towha-Bin-Kabir 500 0.00% 5,000 5,000 Mr. Moin Uddin 500 0.00% 5,000 5,000 Mr. Abdur Rahman 500 0.00% 5,000 5,000

Total: 40,000,000 100% 400,000,000 400,000,000

Name of Shareholders No. ofShare

% Shareholding 31 Dec 2019 31 Dec 2018


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12.00 Retained Earnings This is made up as follows: Particulars 31 Dec 2019 31 Dec 2018 Opening Balance (11,103,565) 29335787 Net Profit After Tax 10,695,877 (20,439,352) Dividend Paid - (20,000,000) Closing Balance (407,688) (11,103,565)

13.00 Long Term Loan: The above balance is made up as follows: Particulars 31 Dec 2019 31 Dec 2018 Long Term Loan from (MLICL): 105,000,000 50,000,000 Total: 105,000,000 50,000,000 14.00 Trade and Other Payables: The above balance is made up as follows :

Particulars Notes 31 Dec 2019 31 Dec 2018 Payable to DSE 764 - Payable to Clients 9,549,100 30,692,102 Payable to Meghna Life Insurance Co. Ltd 16,839,134 8,726,516 With holding Income Tax of Employees 3,240 2,770 With holding Income TDS & VDS of Suppliers 48,864 190,502 Audit Fee 40,250 40,250 Public Issue Application A/C (blocked) 1,040,000 875,000 Total: 27,521,352 40,527,140 15.00 Provision for Tax: This is made up as follows:

Particulars Notes 31 Dec 2019 31 Dec 2018 Opening Balance 23,183,115 19,167,531 Add. Current year's Tax Provision 15.01 6,642,346 4,015,584 Total: 29,825,461 23,183,115

15.01 Current Year's Tax Provision: The above balance is made up as follows : Particulars 31 Dec 2019 31 Dec 2018 Tax on operating income 35% 4,864,011 2,195,170 Tax on dividend income 20% 607,023 1,532,442 Tax on interest income 35% 1,171,313 287,972 Total: 6,642,346 4,015,584 16.00 Operating Revenue This is made up as follows: 01 June 2019 to 01 June 2019 to

Particulars 31 Dec 2019 31 Dec 2018 Brokerage Commission 15,173,588 14,080,264 BO Account Opening Fees 67,500 127,500 Annual BO Account Maintenance Fees 422,000 255,500 Income from other sources 16.01 31,798 1,725,454 Interest on Margin Loan 26,656,661 13,765,598 Income from IPO Application 15,585 7,810 Total: 42,367,132 29,962,126


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16.01 Income from other sources: This is made up as follows: 1 Jan 2019 to 1 Jan 2019 to Particulars 31 Dec 2019 31 Dec 2018 Sale of Scrap goods 1,600 1,450 OTC Share Trading 17,321 1,724,004 CDS Income 12,877 - Total 31,798 1,725,454

17.00 Brokerage Expenses: This is made up as follows:

1 Jan 2019 to 1 Jan 2019 to Particulars 31 Dec 2019 31 Dec 2018 Howla Charge - - Laga Charge 1,101,512 1,097,585 Lan/Wan/Networking/Link 346,830 396,550 CDS Charges & Fees 722,208 539,369 Bank & BACH charges 96,963 93,380 Total 2,267,513 2,126,884 18.00 Financial Expenses: This is made up as follows: 1 Jan 2019 to 1 Jan 2019 to Particulars 31 Dec 2019 31 Dec 2018

Interest on Loan from MLICL 11,015,342 3,728,221 Total 11,015,342 3,728,221 19.00 Administrative Expenses: This is made up as follows:

Notes 1 Jan 2019 to 1 Jan 2019 to Particulars 31 Dec 2019 31 Dec 2018 Salaries & allowances 5,979,835 4,364,301 Directors Fees 120,000 120,000 Rent for Office 4,849,200 2,071,200 Entertainment expenses 596,543 636,932 Fuel & Lubricant 125,850 110,000 DSE charges 62,085 51,602 Electricity, Gas & Water Charges 528,738 548,442 Registration and Renewal fees 136,159 111,845 Software maintenance fees 123,000 60,000 Telephone, Talex & Fax 67,767 55,010 Printing & stationery 153,848 183,509 Revenue Stamp 3,730 930 General Expenses 146,011 8,630 Wages 15,400 12,000 Auditors Fee 40,250 40,250 Annual Membership Subscription Expenses 12,500 - Business Promotion Expenses 1,024,595 953,226


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Repair & maintenance 296,093 69,238 Postage,Telegram & courier 100 175 Travelling & conveyance 89,277 48,850 Newspaper & periodicals 14,515 12,210 Annual account maint. Fees for BO renewal 295,750 178,500 AGM Expenses 71,025 68,035 Consultancy Fees 55,000 - Advertisement and Publicity - 33,120 Subscription and Donation - 1,100 Depreciation Schedule-A 379,835 376,051 Total 15,187,104 10,115,155

20.00 Investment Income This is made up as follows:

1 Jan 2019 to 1 Jan 2019 to Particulars 31 Dec 2019 31 Dec 2018 Gain/(Loss) from sale of share (2,940,900) 994,966 Dividend Income 3,035,342 7,662,374 Loss on DSE Share Sale - (42,172,306) Total 94,443 (33,514,966)

21.00 Interest Income This is made up as follows:

Notes 1 Jan 2019 to 1 Jan 2019 to Particulars 31 Dec 2019 31 Dec 2018

Interest from STD A/C The City Bank (A) 523,868 1,374,715 Interest from FDR (B) FDR Interest AB Bank Ltd. 1,850,000 755,000 FDR Interest Modhumoti Bank Ltd. 900,000 750,000 FDR Interest The City Bank Ltd. - - 2,750,000 1,505,000 Less: Accrued Interest - 2018 871,096 651,479 1,878,904 853,521 Add: Accrued Interest - 2019 8.00 943,836 871,096

FDR Interest 2,822,740 1,724,617

Total Bank Interest (A+B) 3,346,607 3,099,332

22.00 Earning per Share This is made up as follows:

1 Jan 2019 to 1 Jan 2019 to Particulars 31 Dec 2019 31 Dec 2018 Net Profit/(Loss) for the year 10,695,877 (20,439,352) Number of Ordinary Shares 40,000,000 40,000,000 Earning Per Share (EPS) 0.27 (0.51


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23.00 Net Asset Value (NAV) Per Share This is made up as follows:

1 Jan 2019 to 1 Jan 2019 to Particulars 31 Dec 2019 31 Dec 2018 Total Assets 564,509,549 503,520,100

Less: Total Liabilities (162,346,813) (113,710,255)

Net Assets Value 402,162,736 389,809,845 Total Number of Ordinary Shares 40,000,000 40,000,000

Net Asset Value (NAV) Per Share 10.05 9.75

24.00 Net Operating Cash Flow per Share (NOCFPS) This is made up as follows:

1 Jan 2019 to 1 Jan 2019 to Particulars 31 Dec 2019 31 Dec 2018 Net Cash Flow from Operating Activities (6,056,278) 10,314,837

Total Number of Ordinary Shares 40,000,000 40,000,000

Net Operating Cash Flow per Share (NOCFPS) (0.15) 0.26

25.00 Event after Statement of Financial Position DateThe Board of Directors has approved the Financial Statements in its 32nd meeting held

on May 22, 2019 and recommended for the payment of no dividend on paid up capital out

of the surplus available for distribution at the end of the year 2018, which is subject to the

approval of shareholders in the ensuring Annual General Meeting of the Company.

26.00 Related Party Disclosures During the year the company did not carry out any transaction with its related parties.





24th annual report- 2019 - meghna life

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