NOTES TO THE FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2005 (UNAUDITED)

1. The Company and its Operations

Pakistan Reinsurance Co. Ltd., (the company) was incorporated on March 30, 2000 under the Companies Ordinance, 1984. The object of the company is the development of insurance and reinsurance business in Pakistan and to carry on reinsurance business.

The registered office of the company is located at PIC Towers, 32-A, Lalazar Drive, M.T. Khan Road, Karachi. Its shares are quoted on Karachi and Lahore Stock Exchanges.

The compulsory cession to PRC by General Insurance Companies in Pakistan has ceased w.e.f. 1st January, 2005 as per the Ministry of Commerce Notification No.4(13)/2003-Lit/PRCL dated 10th September, 2003.

2. Significant Accounting Policies

These financial statements have been prepared in accordance with the requirements of S.R.O 938 issued by the Securities and Exchange Commission of Pakistan, in December, 2002, the insurance Ordinance 2000, the requirements of Companies Ordinance, 1984 and approved accounting standards as applicable in Pakistan.

3. Quarterly Returns for Surplus treaties:
PRC receives compulsory surplus business from all Insurance Companies doing General Insurance business as provided in Section 42(2) of the Insurance Ordinance, 2000. Because of the nature of business of PRCL, the preparation of its accounts depend on the returns from ceding insurance companies. The time prescribed for submission of returns as per amendment made in PIC Surplus Regulations, 1978 is ten days after the close of the Quarter.

For the 1st Quarter, 2005, PRC received returns from only three General Insurance Companies by 10th April, 2005 and as such above accounts have beden prepared by incorporating only these returns. The returns from other companies have not been received and, therefore, could not be incorporated. The rest of the business reflects facultative business as per record of the company. Moreover, statements for outstanding claims have also not been received from the ceding companies by the aforesaid date.

4. Date of Authorization for Issue

These financial statements have been authorized for issue on April 27, 2005 by
the Board of Directors of the Company.

5. Corresponding Figures

Corresponding figures have been restated wherever necessary for the purpose of comparison.

6. Contingencies

There has been no change in the contingent liabilities since last annual Balance sheet date.

7. All figures have been rounded off to the nearest thousand of rupees.

Karachi: April 27, 2005