Amãna Takaful Life Limited

Transcription

1 Amãna Takaful Life Limited Amãna Takaful Life Limited Initial Public Offering PAGE 1

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3 AMÃNA TAKAFUL LIFE LIMITED PROSPECTUS Amãna Takaful Life Invitation to Invest in the Initial Public Offering of amana Takaful Life Lmited through an offer for sale of fifty Million (50,000,000) existing Ordinary Voting Shares at LlKR 1.50/- per Share

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5 All resident Applicants should indicate in the Application for Shares, their NIC number or the company registration number as the case may be, the passport number may be indicated only if the Applicant does not have an NIC number. As per the Directive of the Securities and Exchange Commission made under Circular No. 08/2010 dated November 22, 2010 and Circular No. 13/2010 issued by the Central Depository System (Private) Limited (CDS) dated November 30, 2010, all Shares allotted must be directly uploaded to the CDS accounts. As such, all Applicants should indicate their CDS account number in the Application Form. Applicants who do not have a CDS account are advised to open a valid CDS account prior to submitting the Application, in order to facilitate the uploading of allotted Shares to their CDS account. Please note that upon the allotment of Shares under this Offer, the allotted Shares would be credited to the Applicant s CDS account so indicated. Please note that SHARE CERTIFICATES SHALL NOT BE ISSUED. Any Application which does not carry a valid CDS account number or indicates a number of a CDS account which is not opened at the time of closure of the subscription list or which indicates an inaccurate/incorrect CDS account number, shall be rejected and no allotment will be made. You can open a CDS account through any member/trading member of the Colombo Stock Exchange (CSE) as set out in Annexure F or through any custodian banks as set out in Annexure G of this Prospectus. The Company intends to meet the minimum public holding requirement set out in Rule (c) of the CSE Listing Rules which stipulates that 10% of the total number of shares for which a listing is sought to be in the hands of a minimum number of 200 public shareholders, on the completion of the Offer pursuant to which the listing of the entirety of the Ordinary Shares of the Company will take place on the Diri Savi Board of the CSE. However, in the event where the Company is unable to meet the aforementioned minimum public holding requirement, the Company will return all monies received from the Applicants for subscription of the Ordinary Voting Shares of the Company on or before the expiry of ten (10) Market Days from the Offer Closing Date (excluding the Offer Closing Date) and in such event the Ordinary Voting Shares of the Company will not be listed on the CSE. The delivery of this Prospectus shall not under any circumstance constitute a representation or create any implication or suggestion that there has been no material change in the affairs of the Company since the date of this Prospectus. Any material changes in the affairs of the Company will be notified via an addendum. If you are in doubt regarding the contents of this document or if you require any advice in this regard, you should consult your stockbroker, bank manager, lawyer or any other professional advisor. This Prospectus is dated 29 June, 2016 Amãna Takaful Life Limited Initial Public Offering PAGE 1

6 The Colombo Stock Exchange ( CSE ) has taken reasonable care to ensure full and fair disclosure of information in this Prospectus. However, the CSE assumes no responsibility for the accuracy of the statements made, opinions expressed or reports included in the Prospectus. Moreover, the CSE does not regulate the pricing of the Shares, which is decided solely by the Company/Issuer. This Prospectus has been prepared from information provided by Amana Takaful Life Limited (hereinafter referred to as Amana Takaful Life, atll or Company ) and its Directors and/or from publicly available sources. The Company and its Directors having made all reasonable inquiries, confirm that to the best of their knowledge and belief, the information contained herein is true and correct in all material respects and that there are no other material facts, the omission of which would make any statement herein misleading. Where representations regarding the future performance of Amana Takaful Life have been given in this Prospectus, such representations have been made after due and careful enquiry of the information available to the Company and making assumptions that are considered to be reasonable at the present point in time in their best judgment. The Company accepts responsibility for the information contained in this Prospectus. While the Company has taken reasonable care to ensure full and fair disclosure of information, prospective investors are advised to carefully read this Prospectus and rely on their own examination and assessment of the Company including the risks involved prior to making any investment decision. No person is authorized to give any information or make any representation not contained in this Prospectus and if given or made, any such information or representation must not be relied upon as having been authorized by the Company. 2 Page Amãna Takaful Life Limited Initial Public Offering

7 REGISTRATION OF THE PROSPECTUS A copy of this Prospectus has been delivered to the Registrar General of Companies in Sri Lanka for registration. The following documents were also attached to the copy of the Prospectus delivered to the Registrar General of Companies. The written consent of the Financial Advisor and Manager to the Offer the Financial Advisor and Manager to the Offer have given and have not before the delivery of a copy of the Prospectus for registration withdrawn their written consent for the inclusion of their name as Financial Advisor and Manager to the Offer and for the inclusion of their statements/declarations in the form in which it is included in the Prospectus. The written consent of the Registrars to the Offer and Company Secretary the Registrars to the Offer and Company Secretary have given and have not before the delivery of a copy of the Prospectus for registration withdrawn their written consent for the inclusion of their name as Registrars to the Offer and Company Secretary in the Prospectus. The written consent of the Auditors and Reporting Accountants to the Company and to the Offer the Auditors and Reporting Accountants to the Company and to the Offer have given and have not before the delivery of a copy of the Prospectus for registration withdrawn their written consent for the inclusion of their name as Auditors and Reporting Accountants to the Company and to the Offer and for the inclusion of their report in the form and context in which it is included in the Prospectus. The written consent of the Lawyers to the Offer the Lawyers to the Offer have given and have not before the delivery of a copy of the Prospectus for registration withdrawn their written consent for the inclusion of their name as Lawyers to the Offer in the Prospectus. The written consent of the Bankers to the Offer the Bankers to the Offer have given and have not before the delivery of a copy of the Prospectus for registration withdrawn their written consent for the inclusion of their name as Bankers to the Offer in the Prospectus. The written consent of the Directors of the Company a declaration made by each of the Directors of the Company confirming that each of them have read the provisions of the Companies Act relating to the issue of the Prospectus and that those provisions have been complied with. The written consent of the Independent Valuers to the Offer the Independent Valuers to the Offer have given and have not before the delivery of a copy of the Prospectus for registration withdrawn their written consent for the inclusion of their name as the Independent Valuers to the Offer in the Prospectus. The written consent of the Independent Actuary to the Company the Actuary to the Company have given and have not before the delivery of a copy of the Prospectus for registration withdrawn their written consent for the inclusion of their names as the Actuary to the Company in the Prospectus. Amãna Takaful Life Limited Initial Public Offering PAGE 3

8 Registration of the Prospectus in Jurisdictions Outside of Sri Lanka This Prospectus has not been registered with any authority outside of Sri Lanka. Non-resident investors may be affected by the laws of the jurisdictions of their residence. Such investors are responsible to comply with the laws relevant to the country of residence and the laws of Sri Lanka, when making their investment. Representation No person is authorized to give any information or make any representation not contained in this Prospectus and if given or made, any such information or representation must not be relied upon as having been authorized by the Company. Forward Looking Statements Any statements included in this Prospectus that are not statements of historical fact constitute Forward Looking Statements. These can be identified by the use of forward looking terms such as expect, anticipate, intend, may, plan to, believe, could and similar terms or variations of such terms. However, these words are not the exclusive means of identifying Forward Looking Statements. As such, all statements pertaining to expected financial position, business strategy, plans and prospects of the Company are classified as Forward Looking Statements. Such Forward Looking Statements involve known and unknown risks, uncertainties and other factors including but not limited to regulatory changes in the sectors in which the Company operates and its ability to respond to them, the Company s ability to successfully adapt to technological changes, exposure to market risks, general economic and fiscal policies of Sri Lanka, inflationary pressures, the performance of financial markets both globally and locally, changes in domestic and foreign laws, regulation of taxes and changes in competition in the industry and further uncertainties that may or may not be in the control of the Company. Such factors may cause actual results, performance and achievements to materially differ from any future results, performance or achievements expressed or implied by Forward Looking Statements herein. Forward Looking Statements are also based on numerous assumptions regarding the Company s present and future business strategies and the environment in which the Company will operate in the future. Given the risks and uncertainties that may cause the Company s actual future results, performance or achievements to materially differ from that expected, expressed or implied by Forward Looking Statements in this Prospectus, investors are advised not to place sole reliance on such statements. Investment Considerations It is important that this Prospectus is read carefully prior to making an investment decision. For information concerning certain risk factors, which should be considered by prospective investors, see Investment Considerations and Associated Risk Factors in Section 10.0 of this Prospectus. Presentation of Currency Information and Other Numerical Data The financial statements of the Company and currency values of economic data or industry data in a local context will be expressed in Sri Lanka Rupees. References in the Prospectus to LKR, Rupees, and Rs. are references to the lawful currency of Sri Lanka. Certain numerical figures in the Prospectus have been subject to rounding adjustments; accordingly, numerical figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them. Presentation of Macroeconomic and Industry Data Economic and industry data used throughout this Prospectus are derived from the Central Bank of Sri Lanka, Insurance Board of Sri Lanka and various other industry data sources, which the Company believes to be reliable, but the accuracy and completeness of that information is not guaranteed. Similarly, industry surveys and other publications, while believed to be reliable, have not been independently verified and neither the Company nor the Managers to the Offer make any representation as to the accuracy of that information. 4 Page Amãna Takaful Life Limited Initial Public Offering

9 TABLE OF CONTENTS SALIENT FEATURES OF THE OFFER AT A GLANCE 7 DEFINITIONS/INTERPRETATIONS CORPORATE INFORMATION RELEVANT PARTIES TO THE OFFER DETAILS OF THE OFFER The Offering Selling Shareholders Nature of the Existing Ordinary Voting Shares on Offer Size of the Offer Share Offer Price Objectives of the Offering Listing Cost of the Offer Brokerage Minimum Subscription and Underwriting Opening of Subscription List and Offer Closing Date Inspection of Documents and Compliance with Listing Rules PROCEDURE FOR APPLICATION Eligible Applicants Procedure for Application Payment of Application Monies Rejection of Applications Banking of Payments Returning of Monies on Rejected Applications Basis of Allotment Refunds on Applications Successful Applicants and CDS Lodgement Declaration to the CSE and Secondary Market Trading BUSINESS OPERATIONS OF AMANA TAKAFUL LIFE LIMITED Business Operations of Amana Takaful Life Limited Product Portfolio Group Structure Human Resources Accolades & Recognition Branch Network Future Plans for Amana Takaful Life Limited and Related Assumptions CORPORATE STRUCTURE Board of Directors Profiles of the Board of Directors Other Directorships Held by the Board Directors Interest in Shares 44 Amãna Takaful Life Limited Initial Public Offering PAGE 5

10 6.5 Corporate Governance Practices Senior Management Statement Chief Executive Officer OTHER INFORMATION Degree of Dependence on Customers, Borrowers or Suppliers Dividends Details of Material Indebtedness Working Capital Litigation, Disputes and Contingent Liabilities Management Agreements Material Contracts Details of Commissions Paid Details of Benefits Paid to Promoters Taxation Transfer of Shares of Amana Takaful (Maldives) PLC to Amana Takaful PLC Risk Based Capital Requirements of Amana Takaful PLC CAPITAL STRUCTURE An Overview of the Capital Structure Shareholding Structure Pre and Post IPO Free Transferability of Shares Other Securities Share Re-Purchases or Redemptions Takeover Offers MANAGEMENT DISCUSSION AND ANALYSIS INVESTMENT CONSIDERATIONS AND ASSOCIATED RISK FACTORS Risks Related to the Insurance Sector Risks Related to the Business Operations Capital Market Related Risks STATUTORY DECLARATIONS 65 ANNEXURE A: accountant's Report and Five Year Summary 67 ANNEXURE B: INDEPENDENT AUDITORS REPORT AND AUDITED FINANCIAL STATEMENTS for THE FINANCIAL YEAR ENDED 31 DECEMBER ANNEXURE C: INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDING 31 MARCH ANNEXURE D: INDEPENDENT VALUATION REPORT PUBLISHED BY THE INDEPENDENT VALUER to THE OFFER TO ASCERTAIN THE VALUE OF AMANA TAKAFUL LIFE LIMITED S ordinary SHARES 129 ANNEXURE E: Summarized APPRAISAL VALUATION REPORT BY THE ACTUARY 187 ANNEXURE F: COLLECTION POINTS 200 ANNEXURE G: CUSTODIAN BANKS 204 ANNEXURE H: INDEX OF TABLES ILLUSTRATED IN THE PROSPECTUS Page Amãna Takaful Life Limited Initial Public Offering

11 SALIENT FEATURES OF THE OFFER AT A GLANCE Company Amãna Takaful Life Limited Number and Type of Securities to be Offered 50,000,000 Existing Ordinary Voting Shares of the Company Share Offer Price LKR 1.50 per Share Amount to be Raised LKR 75,000,000 Minimum Subscription per Application Minimum subscription per Application is 1,000 Shares (LKR 1,500). Applications exceeding the minimum subscription should be in multiples of 1,000 Offered Shares. The minimum subscription of 1,000 Shares will be allocated to each Applicant. Offer Opening Date 21 July, 2016 Offer Closing Date Basis of Allotment CSE Listing 9 August, 2016 or such earlier date on which the Offer of 50,000,000 Existing Shares is oversubscribed Refer Section 3.11 of this Prospectus for further details on the Offer Closing Date. As described in Section 4.7 of this Prospectus To be listed on the Diri Savi Board of the CSE subject to compliance with the minimum public holding requirement stipulated in Rule (c) of the CSE Listing Rules and SEC Directives. In the event where such requirement is not met, the Company will return all monies received from the Applicants for subscription of the Ordinary Voting Shares of the Company on or before the expiry of ten (10) Market Days from the Offer Closing Date (excluding the Offer Closing Date) and in such event the Ordinary Voting Shares of the Company will not be listed on the CSE. Amãna Takaful Life Limited Initial Public Offering PAGE 7

12 DEFINITIONS/INTERPRETATIONS The following definitions/interpretations apply throughout this Prospectus, unless the context otherwise requires: 'Applicant/s' 'Application Form', 'Application' 'Articles of Association' 'ATLL', 'Amana Takaful Life' 'ATL' 'Auditors and Reporting Accountants to the Company and the Offer' 'AWPLR' 'Bn' 'bps' 'c.' 'CAGR' 'CAR' 'CBSL' 'CDS' 'Companies Act' 'Company' 'CSE' 'Directors' 'EPS' 'ESC' 'Foreign Investor' 'FY' 'GDP' 'GWP' 'IBSL' 'IPO' Any investor who submits an Application Form under this Prospectus The application form that constitutes part of this Prospectus through which the investors may apply for the Shares in Offer Articles of Association of Amana Takaful Life Limited Amana Takaful Life Limited Amana Takaful PLC Ernst & Young Last quoted Average Weighted Prime Lending Rate published by the Central Bank of Sri Lanka Billion Basis Points Circa Cumulative Annual Growth Rate Capital Adequacy Ratio Central Bank of Sri Lanka Central Depository Systems (Private) Limited Companies Act No. 07 of 2007 and any amendment made thereto Amana Takaful Life Limited Colombo Stock Exchange The Directors for the time being of the Company, unless otherwise stated Earnings Per Share Economic Service Charge Citizens of Sri Lanka who are resident outside Sri Lanka and above 18 years of age; Corporate bodies incorporated or established outside Sri Lanka; Foreign citizens above 18 years of age (irrespective of whether they are resident in Sri Lanka or overseas); Regional and country funds approved by the SEC Please refer Section 4.1 for further information. Financial Year Gross Domestic Product Gross Written Premium Insurance Board of Sri Lanka Initial Public Offering 8 Page Amãna Takaful Life Limited Initial Public Offering

13 'Financial Advisor and Manager to the Offer', 'Manager to the Offer' 'Lawyers to the Offer' 'LCB' 'LKR', 'Rs.', 'Rupees' 'Local Time' 'Market Day' 'MCR' 'Mn' 'NAV' 'NBT' 'NIC' Acuity Partners (Private) Limited Nithya Partners Licensed Commercial Bank Sri Lanka Rupees Sri Lanka Time Any day on which the CSE is open for trading Minimum Capital Requirement Million Net Asset Value Nation Building Tax National Identity Card 'Offer', 'Offering' 'Offered Shares', 'Existing Shares' 'Offer Closing Date' 'Ordinary Shares', 'Shares', 'Issued and Paid up Ordinary Shares' 'P/E' 'POA' 'Prospectus' 'RBC' An invitation to the public by the Company to subscribe to the Initial Public Offering through an Offer for Sale of Fifty Million (50,000,000) Existing Ordinary Voting Shares to be offered at a Share Offer Price of LKR 1.50 per Share by the Selling Shareholder Fifty Million (50,000,000) existing Ordinary Voting Shares offered to the public at the Share Offer Price, by the Selling Shareholder The date of closure of the subscription list as set out in Section 3.11 of this Prospectus Ordinary shares of the Company, with the right to one vote on a poll at a meeting of the Company on any resolution, the right to an equal share in dividends paid by the Company and the right to an equal share in the distribution of the surplus assets of the Company in liquidation Price Earnings Ratio Power of Attorney This Prospectus dated 29 June, 2016 issued by the Company Risk Based Capital 'Retail Individual Investor' Local and foreign investor/s who apply for up to a maximum of 66,000 Shares (including 66,000 Shares) (value of not more than LKR 100,000). 'Registrars to the Offer' 'ROE' 'SEC' 'Share Offer Price' 'SLAS', 'SLFRS', 'LKAS' 'Stated Capital' 'TAC' 'The Board', 'The Board of Directors' Managers and Secretaries (Pvt) Ltd. Return on Equity The Securities and Exchange Commission of Sri Lanka The price at which the Existing Shares will be offered to the Public, as detailed in this Prospectus Share Offer price of LKR 1.50 per Ordinary Voting Share Sri Lanka Accounting Standards The Stated Capital of Amana Takaful Life Limited Total Available Capital The Board of Directors of Amana Takaful Life Limited Amãna Takaful Life Limited Initial Public Offering PAGE 9

14 'Unit Trust Investor Category' 'Unit Holder' 'VAT' 'WHT' 'YTD' 'YoY' Growth and Balanced Unit Trusts operated by managing companies licensed under the SEC to operate such Unit Trusts, where such Unit Trusts comprises of not less than 500 Unit Holders resident in Sri Lanka who together hold at least 50% of that Unit Trust, as per SEC Directive dated 6 June, 2011 (Ref: SEC/Leg/11/06/01) An individual who has made an investment in units not exceeding the value of LKR 10,000,000/- in a particular Unit Trust Fund that subscribes for Shares, as per SEC Directive dated 6 June, 2011 (Ref: SEC/Leg/11/06/01) Value Added Tax Withholding Tax Year to Date Year on Year 10 Page Amãna Takaful Life Limited Initial Public Offering

15 1.0 CORPORATE INFORMATION The Company Registered Office Date, Place and Authority of Incorporation Amãna Takaful Life Limited 660-1/1, Galle Road, Colombo 03, Sri Lanka Tel: Fax: A Limited Liability Company Incorporated in Colombo, Sri Lanka on 10 July, 2014 under the Companies Act No. 07 of 2007 Company Registration Number PB 5202 Company Secretary Auditors to the Company Managers and Secretaries (Pvt) Ltd. 8, Tickell Road, Colombo 08, Sri Lanka Tel: Fax: Messrs. Ernst & Young (Chartered Accountants) 201, De Saram Place Colombo 10, Sri Lanka Tel: Fax: Board of Directors Tyeab Akbarally Non-Executive Chairman (Non-Independent Director) Mohamed Fazal Ghaffoor Ifthikarudeen Ahamed Ismail Dato Mohd Fadzli Bin Yusof Executive Director (Non-Independent Director) Non-Executive Independent Director Non-Executive Independent Director Mohamed Haniffa Mohamed Rafiq Non-Executive Independent Director Radhakrishnan Gopinath Ammar Shafik Kassim Non-Executive Independent Director Non-Executive Independent Director Amãna Takaful Life Limited Initial Public Offering PAGE 11

16 2.0 RELEVANT PARTIES TO THE OFFER Financial Advisor and Manager to the Offer Lawyers to the Offer Auditors and Reporting Accountants to the Offer Registrars to the Offer Bankers to the Offer Independent Valuer Acuity Partners (Private) Limited 53, Dharmapala Mawatha Colombo 03, Sri Lanka Tel: Fax: Nithya Partners 97A, Galle Road Colombo 03, Sri Lanka Tel: Fax: Messrs. Ernst & Young (Chartered Accountants) 201, De Saram Place Colombo 10, Sri Lanka Tel: Fax: Managers and Secretaries (Pvt) Ltd. 8, Tickell Road Colombo 08, Sri Lanka Tel: Fax: Amana Bank PLC 480, Galle Road Colombo 03, Sri Lanka Tel : Fax: Messrs. KPMG (Chartered Accountants) 32A, Sir Mohamed Macan Markar Mawatha Colombo 03, Sri Lanka Tel: Page Amãna Takaful Life Limited Initial Public Offering

17 3.0 DETAILS OF THE OFFER 3.1 The Offering The Offer contemplated herein shall constitute an invitation made to the general public to purchase Fifty Million (50,000,000) Existing Ordinary Voting Shares of the Company at the Share Offer Price of Sri Lanka Rupees One and Fifty Cents (LKR 1.50) per Ordinary Voting Share. 3.2 Selling Shareholders The Shareholder mentioned below is offering for sale, Fifty Million (50,000,000) Existing Ordinary Voting Shares constituting 10.00% of the Ordinary Voting Shares in order to facilitate the listing of the Ordinary Voting Shares on the CSE. Table 3.1 Divestiture of Existing Ordinary Voting Shares Selling Shareholder No. of Shares Offered Nature of the Shares Date of Acquisition Amana Takaful PLC 50,000,000 Ordinary Voting Nature of the Existing Ordinary Voting Shares on Offer The Ordinary Voting Shares transferred to the Applicant/s in accordance with the terms of this Prospectus, shall rank pari passu, in all respects with the other Existing Ordinary Voting Shares and such Shares shall confer on the holder thereof the right to one vote on a poll at a meeting of the Company on any resolution, the right to an equal share in any dividend that may be paid by the Company and the right to an equal share in the distribution of the surplus assets of the Company in a liquidation. the Selling Shareholder currently holds 500,000,000 Ordinary Voting Shares constituting 100% of the issued share capital of the Company. The acquisition of the said shareholding took place in the following manner; Date of Allotment Name No. of Ordinary Voting Shares Consideration (LKR) Amana Takaful PLC 120,000, Amana Takaful PLC 380,000, there are currently no other classes of shares which have been issued apart from the Ordinary Voting Shares. 3.4 Size of the Offer If the Offer for Sale is subscribed for in full, the Selling Shareholders shall transfer 50,000,000 Ordinary Voting Shares at a price of LKR 1.50 per share for a total consideration of Sri Lanka Rupees Seventy Five Million (LKR 75,000,000) to the public. 3.5 Share Offer Price The Share Offer Price for Ordinary Voting Shares will be Sri Lankan Rupees One and Fifty Cents (LKR 1.50) per Share. The Board of Directors of atll is of the opinion that the Share Offer Price is fair and reasonable to the Company and to all existing shareholders of the Company. the Share Offer Price was determined by the Company in consultation with the Independent Valuer to the Offer, and the Financial Advisor and Manager to the Offer in accordance with the independent valuation report compiled by the Independent Valuer to the Offer. A copy of the independent valuation report is enclosed as Annexure D of this Prospectus. Amãna Takaful Life Limited Initial Public Offering PAGE 13

18 The Net Asset Value of the equity share was LKR 1.03 as at 31 December, 2015, and the Share Offer Price is times the Net Asset Value. the investors should read the following summary with the risk factors included under Section 10 of this Prospectus and the details of the Company and its financial statements included in this Prospectus Quantitative Factors The following quantitative aspects were also taken into consideration; Earnings Per Share (EPS) and Return On Equity (ROE) For the Period Ended Basic Earnings per Share (LKR) Diluted Earnings per Share (LKR) Return on Equity (%) 31 December, Audited % Average EPS Months Ended 31 March, % Note: ATLL does not have any dilutive instruments in its capital structure Price Earnings Ratio (P/E) The P/E in relation to the Share Offer Price of LKR 1.50 was, a) Based on the basic EPS for the financial year ended 31 December, 2015 of LKR 0.04, the P/E is 37.5 times. b) Based on the average EPS of LKR 0.04, the P/E is 37.5 times. c) The P/E range of the industry peers is as given below; Name of the Peer Company P/E* Highest Arpico Insurance PLC times Lowest Union Assurance PLC 5.16 times Industry Composite** Source CSE (Comparable listed Insurance Companies), Company Annual Reports for FY 31 December, 2015 * Last traded price as at 19 May, 2016 & EPS for the FY 31 December, times ** Sector Classification Insurance (Includes all listed peers that are operating either as life insurers, general insurers or composite insurers.) Net Asset Value (NAV) and Price to Book Value Ratio (P/BV) The P/BV in relation to the Share Offer Price of LKR 1.50 was, a) Based on the nav for the financial year ended 31 December, 2015 of LKR 1.03, the PBV is times. b) The P/BV range of the industry peers is as given below; 14 Page Amãna Takaful Life Limited Initial Public Offering

19 Name of the Peer Company P/BV Highest Asian Alliance Insurance PLC 3.59 times Lowest Arpico Insurance PLC 1.36 times Industry Composite* 2.00 times Source CSE (Comparable listed Insurance Companies), Company Annual Reports for FY 31 December, 2015 * Last traded price as at 19 May, 2016 **Sector Classification Insurance (Includes all listed peers that are operating either as life insurers, general insurers or composite insurers.) Peer Entity Accounting Ratios A peer company comparison of the quantitative factors discussed above is provided below; Peer Company Net Asset Value per Share (LKR) Earnings Per Share (EPS) (LKR) P/E (x) P/BV (x) Return on Equity (%) Arpico Insurance PLC* % HNB Assurance PLC % Union Assurance PLC % Asian Alliance Insurance PLC % Source CSE (Comparable Listed Insurance Companies), Company Annual Reports for FY 31 December, 2015 Sector Classification Insurance (Includes all listed peers that are operating either as life insurers, general insurers or composite insurers.)the peer entities given above are the only comparable listed entities in terms of revenue and asset base. Trading price as at 19 May, 2016 * as at year ended 31 December, 2015 (unaudited) Qualitative Factors The qualitative factors that were considered by the Company when arriving at the Share Offer Price is directly linked with the future plans and strategies of the Company which are detailed out in Section 5.7 in this Prospectus. 3.6 Objectives of the Offering 3.7 Listing Pursuant to Section 52(1) of the Regulation of Insurance Industry (Amendment) Act No. 3 of 2011, the Company is required to be listed on a licensed stock exchange prior to 7 February, 2016 or any given extensions, which in atll s case is 31 December, As a result, atll is seeking a listing on the Colombo Stock Exchange. The Company will not receive any proceeds raised via this Offer. All proceeds from the sale of Existing Ordinary Voting Shares would be for the account of the Selling Shareholders. The Offer herein contemplated comprises of Fifty Million (50,000,000) Existing Ordinary Voting Shares of the Company. If fully subscribed, the Shares Offered will amount to 10.00% of the Issued and Paid up Ordinary Voting Shares of the Company, subsequent to the Offer. an Application has been made to the CSE for in-principle approval for a listing of the entire Issued and Paid up Ordinary Voting Shares of the Company subsequent to the Offer. Amãna Takaful Life Limited Initial Public Offering PAGE 15

20 ATLL has already complied with Rule (a), Rule (b) and Rule (d) of the CSE Listing Rules. it is expected that the Company will meet the minimum public holding requirement [specified in Rule (c)] of the CSE Listing Rules on the completion of the Offer pursuant to which the listing of the entire Ordinary Shares of the Company will take place on the Diri Savi Board of the CSE. The minimum public holding requirement stipulates that, 10.00% of the total number of shares for which a listing is sought should be in the hands of a minimum number of 200 public shareholders. however, in the event where atll is unable to meet the requirement of Rule (c) of the CSE Listing Rules as mentioned above, upon closure of the Offer, the Ordinary Voting Shares of the Company will not be listed on the CSE. In such an event the subscription amounts will be returned to the Applicants and such refunds will be made on or before the expiry of ten (10) Market Days from the Offer Closing Date (excluding the Offer Closing Date). it should be noted that the aforesaid public holding requirements would be calculated by considering all Shares that are freely tradable, on the Date of Listing. the shares mentioned in Section 8.2 will be locked in to be in compliance with CSE Listing Rules 2.1.1(e) and will not be available for trading. 3.8 Cost of the Offer The total costs associated with the Offer are estimated to be approximately LKR 11 Mn amounting to c % of the value of the IPO. These include all direct costs and expenses associated with the Offer, inclusive of but not limited to the initial listing fees to the CSE, management/advisory fees payable to the Financial Advisor and Manager to the Offer, brokerage commission, fees for the registrar function, legal, consultancy and accountancy fees, actuarial fees, independent valuer s fees, advertising and promotional costs, printing costs and stamp duty. The costs will be covered from internally generated funds. 3.9 Brokerage Brokerage at the rate of zero decimal five per centum (0.5%) of the value of the Shares will be paid in respect of the number of Offered Shares allotted on Applications bearing the original seal of any bank operating in Sri Lanka or a member/trading member of the CSE or Acuity Partners or any other intermediary appointed by the Company and Manager to the Offer involved in the marketing of the Offer Minimum Subscription and Underwriting There is no minimum amount required to be raised in this Offer. the Company has not entered into any underwriting arrangement with regards to this Offer. the Company shall seek a listing irrespective of whether the Offer is fully subscribed or not (subject to the Company satisfying the requirement of the CSE Listing Rules for such a listing as morefully described in Section 3.7 of this Prospectus). however, in the event of an undersubscription, and if the Company is unable to fulfil the minimum public holding requirement as stipulated in Rule (c) of the CSE Listing Rules, the money collected will be returned to Applicants on or before the expiry of ten (10) Market Days from the Offer Closing Date (excluding the Offer Closing Date) and the Company will not be listed on the CSE. 16 Page Amãna Takaful Life Limited Initial Public Offering

21 3.11 Opening of Subscription List and Offer Closing Date The subscription list for the Shares will open at 9.00 a.m. on 21 July, 2016 and shall, subject to the occurrence of the events in the following paragraph, remain open for fourteen (14) Market Days (including the date of opening) until closure at 4.30 p.m. on 9 August, in the event of an oversubscription of the 50,000,000 Shares prior to 9 August, 2016, the Company shall inform the CSE in writing immediately of such fact and the subscription list will be closed at 4.30 p.m. on the same day on which it is fully subscribed Inspection of Documents and Compliance with Listing Rules Articles of Association, Auditor s Reports and Audited Financial Statements for the financial year ended 31 December, 2015 (i.e. one (01) financial year immediately preceding the date of this Prospectus), Interim Financial Statements for the period ending 31 March, 2016, independent valuation report by the Independent Valuer to the Offer, management agreements and all other relevant documents referred to herein, would be made available for inspection by the public during normal working hours at the registered office of the Company, 660-1/1, Galle Road, Colombo 03 before seven (07) Market Days prior to the Offer Opening Date and for a period not less than fourteen (14) Market Days as per Rule (a) of the CSE Listing Rules. the Prospectus, Application Form and Articles of Association of the Company will be available on the website of the CSE, on the website of the Company, and on the website of the Manager to the Offer, for a period of not less than fourteen (14) Market Days as stipulated in Rule (b) of the CSE Listing Rules. the independent valuation report prepared by the Independent Valuer to the Offer, justifying the Share Offer Price will be available on the website of the CSE, on the Company website, and on the website of the Manager to the Offer, for a period of two (02) months commencing from the date of granting approval in-principle for listing of shares of the Company by the CSE, as stipulated in Rule (c) of the CSE Listing Rules. the Offer made in terms of this Prospectus would not constitute a related party transaction (in terms of the definition in the Listing Rules) for Amana Takaful PLC in so far as the actual Offer for Sale is between Amana Takaful PLC and members of the public. The Offer does not involve a transaction between atll and Amana Takaful PLC. Accordingly, the Offer would not be a related party transaction which needs to be vetted by the Related Party Transaction Review Committee of Amana Takaful PLC. Amãna Takaful Life Limited Initial Public Offering PAGE 17

22 4.0 PROCEDURE FOR APPLICATION 4.1 Eligible Applicants Applications are invited from the following categories of investors, having a valid CDS account in the Central Depository System (Private) Limited (CDS): i. Citizens of Sri Lanka who are resident in or outside Sri Lanka and above 18 years of age; or ii. Companies, corporations or institutions incorporated or established within Sri Lanka; or iii. Corporate bodies incorporated or established outside Sri Lanka; or iv. Approved unit trusts licensed by the SEC; or v. Approved provident funds and contributory pension schemes registered/incorporated/ established in Sri Lanka (in this case, Applications should be in the name of the trustee/board of management in order to facilitate the opening of the CDS account); or vi. Foreign citizens above 18 years of age (irrespective of whether they are resident in Sri Lanka or overseas); or vii. Global, regional and country funds approved by the SEC. applications made by individuals less than 18 years of age or those in the names of sole proprietorships, partnerships, unincorporated trusts and non-corporate bodies will be rejected. Applications from the Public shall be given priority when allocating Shares, Public as defined in the CSE Listing Rules. Applications submitted under the Unit Trust Investor Category should conform to the criteria defined by the SEC Directive (Ref: SEC/LEG/11/03/36 of 10 March, 2011). Eligible Applicants may fall into one of the following categories. i. Retail Individual Investor Category ii. Unit Trust Investor Category iii. Non-Retail Investor Category iv. Employee Category o Group Employees o Agents please refer Section for the definitions of the aforementioned categories. 4.2 Procedure for Application Applicants applying for the Shares should submit their Applications in the manner set out in this Prospectus. the Prospectus will be made available free of charge from the collection points listed in Annexure F. The Prospectus can also be downloaded from and How to Apply APPLICANTS, EXCEPT FOR THE APPLICANTS APPLYING UNDER THE EMPLOYEE CATEGORY SHOULD APPLY ONLY THROUGH ONE INVESTOR CATEGORY (INCLUDING JOINT APPLICANTS) AND WOULD BE PERMITTED TO SUBMIT ONLY ONE APPLICATION FORM. TWO OR MORE APPLICATIONS SUBMITTED BY THE SAME APPLICANT, EXCEPT FOR THE APPLICANTS APPLYING UNDER THE EMPLOYEE CATEGORY, EITHER UNDER THE SAME CATEGORY OR DIFFERENT CATEGORY WILL BE CONSTRUED AS MULTIPLE APPLICATIONS AND WILL BE REJECTED. 18 Page Amãna Takaful Life Limited Initial Public Offering

23 Only one Application should be made by an Applicant under the Employee Category. Additionally an Applicant may make a further Application (one [01] only) either under the Retail Individual Category or Non-Retail Category which will not be construed as multiple Applications and will not be rejected. only one Application should be made by an Applicant under the Unit Trust Category. applicants must apply for the Shares on the Application Form, which constitutes part of this Prospectus. The Application Form should be legibly completed and be received by the Registrars to the Offer. Retail Individual and Non-Retail Investor Category Applicants falling under the Retail Individual and Non-Retail Investor Categories should apply for the Shares on the WHITE coloured Application Form printed for this purpose, which constitutes part of this Prospectus. Such Application Forms will be made available from the collection points listed in Annexure F and can also be downloaded from and Exact size copies of the Application form printed on WHITE coloured paper as specified herein will also be permissible under the Retail Individual and Non-Retail Investor Categories. The completed Application Forms should be submitted to the Registrars to the Offer. In this instance, local and foreign individual investor/s who apply for up to a maximum of 66,000 Shares (including 66,000 Shares) (value of not more than LKR 100,000) will be deemed as Retail Individual investors for share allotment purposes. All non-resident applicants and corporate applicants should ensure that the passport number/company registration number and the CDS Identification Number (CDS ID) are stated in the relevant cages of the Application Form. Employee Category Employee Category includes Group Employees and Agents. Applicants applying under the Employee Category must apply for the Shares only using the separate GREEN coloured Application Form printed for this purpose, which constitutes part of this Prospectus. Such Application Forms will only be made available through the branches of Amana Bank PLC and Amana Takaful PLC. Group Employees and Agents applying under this category shall be required to apply under their respective individual names using only the correctly coloured application and should not apply as joint Applicants. Application Forms properly and legibly filled in accordance with the instructions thereof, along with the applicable remittance (cheque or bank draft or bank guarantee only) for the full amount payable on the Application and the company seal/rubber stamp of the respective employer placed thereon should be submitted to the Head of Human Resource (Amana Takaful Life Limited) for verification as eligible employees and for onward transmission to the Registrars to the Offer prior to 4.30 p.m. Local Time on the Offer Closing Date. Group Employees and Agents shall NOT submit Applications directly to the Registrars to the Offer. No photocopies of the coloured Application Form would be permissible. Group Employees category includes employees of: Amana Takaful Life Limited Amana Takaful PLC Amana Global Limited Amana Takaful (Maldives) PLC Amana Holdings Limited Amana Asset Management Limited Amãna Takaful Life Limited Initial Public Offering PAGE 19

24 Amana Wealth Management Limited Amana Capital Limited Amana Bank PLC who have been in service under the respective companies as at 31 March, 2016 and have not submitted their resignation as at the date of opening of the subscription list. Agents * category includes Agents of Amana Takaful Life Limited and Agents of Amana Takaful PLC. Agents* - Persons registered with ATL/ATLL, who in consideration of a commission solicits or procures insurance business and has qualified the specified industry examination for the purpose. Unit Trust Investor Category Applicants applying under the Unit Trust Investor Category must apply for the Shares using the separate YELLOW coloured Application Form printed for this purpose, which constitutes part of this Prospectus. Such Application Forms will be made available through the Manager to the Offer, Acuity Partners (Private) Limited, 53, Dharmapala Mawatha, Colombo 03. Exact size copies of the Application Form printed on YELLOW coloured paper as specified herein will also be permissible under the Unit Trust Investor Category. The completed Application Forms should be submitted to the Manager to the Offer who will forward the same to the Registrars to the Offer. Applications submitted under the Unit Trust Investor Category should submit a confirmation by the trustee confirming that such unit trust is in conformity with the criteria defined by the SEC Directive dated 6 June, 2011 (Ref: SEC/Leg/11/06/01) and CSE Listing Rules, 3.1.5(b)(iii). Unit Trust Investors as defined by the SEC Directive dated 6 June, 2011 (Ref: SEC/Leg/11/06/01), shall mean growth and balanced Unit Trusts operated by managing companies licensed under the SEC to operate such Unit Trusts, where such Unit Trusts comprises of not less than 500 Unit Holders resident in Sri Lanka who together hold at least 50% of that Unit Trust. An Applicant of a joint Application, applying through another Application Form, except under the Employee Category, is deemed to have made multiple Applications and will be rejected. an Applicant who has made an Application under a margin trading account should not apply individually or jointly on a separate Application Form, except under the Employee Category. Such Applications will also be construed as multiple Applications and will be rejected. subject to the above, the Company/the Manager/Registrars to the Offer reserve the right to reject multiple Applications and suspected multiple Applications which are not allowed or to accept only one Application Form at their discretion. Notwithstanding any provision contained herein, the Board of Directors shall reserve the right to refuse any Application or to accept any Application in full or part, for whatsoever reason. Please note that Applicant information such as full name, address, NIC number/passport number and residency will be downloaded from the database of CDS, based on the CDS account number/cds ID indicated in the Application Form. Such information shall take precedence over information provided in the Application Form. Application Forms stating third party CDS accounts instead of their own CDS account numbers, except in the case of margin trading accounts will be rejected. Care must be taken to follow the instructions on the reverse of the Application Form. Applications that do not strictly conform to such instructions and additional conditions set out hereunder or which are illegible may be rejected. 20 Page Amãna Takaful Life Limited Initial Public Offering

25 All resident Applicants should indicate in the Application for Shares, their NIC number or the company registration number as the case may be, the passport number may be indicated only if the Applicant does not have an NIC number. as per the Directive of the Securities and Exchange Commission made under Circular No. 08/2010 dated November 22, 2010 and Circular No. 13/2010 issued by the Central Depository System (Private) Limited (CDS) dated November 30, 2010, all Shares allotted must be directly uploaded to the CDS accounts. As such, all Applicants should indicate their CDS account number in the Application Form. Applicants who do not have a CDS account are advised to open a valid CDS account prior to submitting the Application, in order to facilitate the uploading of allotted Shares to their CDS account. please note that upon the allotment of Shares under this Offer, the allotted Shares would be credited to the Applicant s CDS account so indicated. Please note that SHARE CERTIFICATES SHALL NOT BE ISSUED. any Application which does not carry a valid CDS account number or indicates a number of a CDS account which is not opened at the time of closure of the subscription list or which indicates an inaccurate/incorrect CDS account number, shall be rejected and no allotment will be made. you can open a CDS account through any member/trading member of the Colombo Stock Exchange (CSE) as set out in Annexure F or through any Custodian Banks as set out in Annexure G of this Prospectus. PLEASE NOTE THAT AN ALLOTMENT OF SHARES WILL ONLY BE MADE IF YOU HAVE A VALID CDS ACCOUNT AT THE TIME OF SUBMISSION OF APPLICATION. Applicants have the option of having their Shares locked in the CDS. Shares that are locked will not be available for trading purposes and will not be visible to the participant. Such Applicants would have to fill in the relevant section in the Application Form for this purpose. If the Applicant has not specified that the Shares need to be deposited to his/her locked balance in the CDS account, the said Shares would be deposited to Applicant s trading balance in the CDS account. Operation of a locked balance in the CDS In order to preserve the confidentiality of shareholder information and to ensure that securities are not made available for trading for those shareholders who do not want to trade the securities, the CDS provides a mechanism where securities can be locked in the CDS account. the CDS maintains two balances for each CDS account, namely a trading balance and a locked balance. The trading balance would be visible to the CDS participant and all dealings and trading would be permitted on the said trading balance, as done normally. as opposed to the trading balance, the locked balance will not be visible to the CDS participant and all dealings on such locked balance would be suspended thereby maintaining the confidentiality of the information and also safeguarding the account holder from any unauthorised sale by a broker. at the option and request of an account holder, the CDS would transfer a named quantity of securities from the locked balance to the trading balance of a CDS account and/or from the trading balance to the locked balance. Amãna Takaful Life Limited Initial Public Offering PAGE 21

26 4.2.2 Number of Shares Applied Application should be made for a minimum of One Thousand (1,000) Shares [for a value of Sri Lankan Rupees One Thousand Five Hundred (LKR 1,500/-)] and in multiples of One Thousand (1,000) Shares thereof. Applications made for less than One Thousand (1,000) Shares or for a number which is not in multiples of One Thousand (1,000) Shares will be rejected and the accompanying cheques, bank drafts or bank guarantees will not be sent for clearing but be returned via ordinary post at the risk of the Applicant, or in the case of joint Applicants, the first named Applicant. The cheque or bank draft or bank guarantee should be issued/carried out to the exact value of the number of Shares applied for multiplied by the Share Offer Price. Cheques, bank drafts or bank guarantees not conforming to the above requirement will be rejected at the outset. please refer Section for details with respect to the mode of remittance Identification Information All Applicants should disclose their identification/registration information by filling in the space provided in the Application Form for this purpose. Applicants are requested to state their residency and nationality in the appropriate spaces provided in the Application Form. The NIC, passport, or company registration number as the case may be, must be stated in the Application Form and any Application Form which does not provide the appropriate identification information will be rejected. Resident Applicants may use the passport for purposes of identification only if they do not have a NIC number. tabulated below is the relevant identification information that a prospective investor should provide depending on the legal status: Citizenship/Legal Form Identification Information NIC Number Passport Number Company Registration Number Common Seal or Rubber Stamp CDS Account Number Sri Lanka Citizens ü ü Sri Lanka Citizens with no NIC Number* ü ü Foreign Citizens** ü ü Corporate Entities*** ü ü ü * In the case of Sri Lankan citizens, the passport number will be accepted only when the NIC number is not available. The CDS account must be for the same passport number. ** Foreign citizens must state the passport number in the space provided. *** The company registration number must be provided. The common seal or rubber stamp should be affixed and the Application Form duly signed as stipulated in the constitutional documents of such Applicants. A valid CDS account number must be stated in the Application Form and any Application Form which does not provide the appropriate identification information will be rejected. All non-resident Applicants and corporate Applicants should ensure that the passport number/company registration number and 22 Page Amãna Takaful Life Limited Initial Public Offering

27 the CDS Identification Number (CDS ID) are stated in the relevant cages of the Application Form. All information about the Applicant (i.e. name, address, nationality and NIC or passport number) will be downloaded from the database of the CDS, based on the number given in the Application Form. In the event of any discrepancy between the information in the CDS and in the Application Form, the information in the CDS shall take precedence. If the CDS account number is not indicated in the Application Form, or the number indicated in the form is found to be inaccurate/incorrect, or the account number indicated is not opened at the time of closing the Offering such Application will be rejected and no allotments of Shares will be made Key Responsibility of a Non-Resident Investor Non-resident investors may be affected by the laws of the jurisdiction of their residence. If non-resident investors wish to apply for the Offered Shares, it is their responsibility to comply with the laws relevant to the jurisdiction of their residence and of Sri Lanka Margin Trading Applicants who wish to apply through their margin trading account should submit the Applications in the name of the margin provider/applicant s name signed by the margin provider. the Applicants should state the relevant CDS account number relating to the margin trading account in the space provided for the CDS account number in the Application Form. The Shares shall be uploaded to the CDS account indicated in the Application Form. the nic, passport or company registration number of the Applicant as the case may be, must be stated in the Application Form. resident Applicants may use the passport for purposes of identification, only if they do not have a NIC number. a photocopy of the margin trading agreement must be submitted along with the Application. please note that the margin provider can apply under its own name and such Applications will not be construed as multiple Applications. Details of multiple Applications are available under Section Applications Made Under Power of Attorney In the case of Applications made under Power of Attorney (POA), a copy of the said poa, certified by a Notary Public to be a true copy of the original, should be lodged with the Registrars to the Offer along with the Application Form. The original POA should not be attached Joint Applications If the ownership of the Shares is desired in the name of one Applicant, full details should be given only under the heading, SOLE/FIRST APPLICANT in the Application Forms. In the case of joint Applicants, the signatures and particulars in respect of all Applicants must be given under the relevant headings in the Application Form. Joint Application Forms are permitted only for natural persons not exceeding three Applicants. Joint Applicants should note that there should not be a combination of residents of Sri Lanka and non-residents. An Applicant of a joint Application shall not apply through a separate Application Form either individually or jointly Submission of Applications Application Forms properly and legibly filled in accordance with the instructions thereof, along with the applicable remittance (cheque or bank draft or bank guarantee only) for the full amount payable on Amãna Takaful Life Limited Initial Public Offering PAGE 23

28 Application should be enclosed in a sealed envelope marked Amana Takaful Life Limited IPO on the top left-hand corner and be addressed and dispatched by post or courier or delivered by hand to the Registrars to the Offer at the following address prior to 4.30 p.m. Local Time on the Offer Closing Date. Managers and Secretaries (Pvt) Ltd. 8, Tickell Road Colombo 08, Sri Lanka Applications may also be handed over to the Financial Advisor and Manager to the Offer, Bankers to the Offer and its designated branches, members and trading members of the CSE as set out in Annexure F prior to 4.30 p.m. Local Time on the Offer Closing Date. in the case of investors applying under the Employee Category, the Application Forms should be submitted to the Head of Human Resource (Amana Takaful Life Limited) who will forward the same to the Registrars to the Offer. in the case of investors applying under the Unit Trust Category the Application Forms should be submitted to the Manager to the Offer who will forward the same to the Registrars to the Offer. in the case of Applications dispatched by post, such Applications should reach the Registrars to the Offer not later than 4.30 p.m. Local Time on the Market Day immediately following the Offer Closing Date. any Applications received after the above deadlines shall be rejected even though the courier or post mark is dated prior to the Offer Closing Date. 4.3 Payment of Application Monies Mode of Remittance (a) Payment in full for the total value of Shares applied for should be made separately in respect of each Application either by cheque or bank draft or bank guarantee drawn upon a licensed commercial bank operating in Sri Lanka, as the case may be subject to (b) and (c) below. The remittances on Applications will be deposited in a separate bank account in the name of Amana Takaful Life Limited IPO. (b) The amount payable should be calculated by multiplying the number of Shares applied for under a particular category by the Share Offer Price of LKR If there is a discrepancy in the amount payable and the amount specified in the cheque/bank draft or bank guarantee, the Application will be rejected. (c) Payments for Applications for Shares may be supported by a cheque or bank draft or bank guarantee. In such instances, Application Form should be accompanied by only one cheque or bank draft or bank guarantee and should be issued for the full amount indicated in the Application Form. Any Application for Shares accompanied by two or more cheques or bank drafts or bank guarantees will be rejected at the outset. Cash will not be accepted. Anyone wishing to pay cash should obtain a bank draft from a licensed commercial bank in Sri Lanka Cheques or Bank Drafts Resident Sri Lankan Investors Cheques or bank drafts should be drawn on any Licensed Commercial Bank in Sri Lanka and crossed Account Payee Only and made payable to Amana Takaful Life Limited IPO. Cheques or bank drafts accompanying Application Forms made for less than One Thousand (1,000) Shares, i.e. for a value less than Sri Lanka Rupees One Thousand Five Hundred Only (LKR 1,500/-) or for a 24 Page Amãna Takaful Life Limited Initial Public Offering

29 number which is not in multiples of One Thousand (1,000) Shares (as mentioned in Section 4.2.2) will not be sent for clearing and shall be returned via ordinary post at the risk of the Applicant, or in the case of joint Applicants, to the first named Applicant. in the event that cheques are not realised within two (02) Market Days from the date of presenting the same to the bank for clearing, the Directors reserve the right to reject the Applications and return the Application monies. No allocation of Shares will be made to such Applicants. Applicants residing in outstation areas from which cheque clearance may take over two (02) Market Days are advised to make payment via bank drafts to avoid any delays. Cheques must be honoured on the first presentation to the bank for the Application to be valid. Applications supported by cheques which are not honoured on first presentation will be rejected Bank Guarantees Resident Sri Lankan Investors Applications made by resident Sri Lankan investors backed by bank guarantees presented in line with the requirements set out in Section will be accepted. Bank guarantees will be presented to the respective banks only after the Offered Shares have been allotted. Bank guarantees should be issued by any Licensed Commercial Bank in Sri Lanka and in favour of Amana Takaful Life Limited IPO in a manner acceptable to the Company and payable on demand. Bank guarantees should be valid for a minimum of one (01) month from the date of opening of the Offering (i.e. 21 July, 2016). Applicants are advised to ensure that sufficient funds/facilities are available in order to honour the bank guarantees, inclusive of charges when called upon to do so by the Registrars to the Offer. It is advisable that the Applicants discuss with their respective bankers the matters with regard to the issuance of bank guarantees and all charges involved. All expenses with regard to such bank guarantees should be borne by the Applicants Foreign Currency Remittances This section is applicable to; i. Citizens of Sri Lanka who are above 18 years of age and resident overseas; ii. Corporate bodies incorporated or established outside Sri Lanka; iii. Regional or country funds approved by the SEC; iv. Foreign citizens (irrespective of whether they are resident in Sri Lanka or overseas) who are above 18 years of age. the above mentioned Applicants should make their payments using one of the following methods as the case may be. (a) A foreign investor may invest through a Securities Investment Account (SIA) maintained with any Licensed Commercial Bank in Sri Lanka. The procedure for arranging payments through a SIA is presented below; - A foreign investor may use the services of a custodian bank as an intermediary when investing in the Sri Lankan securities market; - The intermediary may open a SIA, on investor s behalf; - In conjunction with the SIA, an account with the CDS must be opened in case the investor does not already possess a valid CDS account; Amãna Takaful Life Limited Initial Public Offering PAGE 25

30 - In respect of regional or country funds investing for the first time in Sri Lanka, the intermediary will facilitate the approval process regulated by the SEC; - Payment for Shares should be made through a bank draft or bank guarantee issued by a licensed commercial bank in Sri Lanka against the funds arranged through the SIA and made payable to Amana Takaful Life Limited IPO. (b) A foreign investor may invest through inward remittances of foreign currency held in a Foreign Currency Banking Unit (FCBU) account of the Applicant maintained with any licenced commercial bank in Sri Lanka. The procedure for arranging payments through a FCBU account is presented below; - The Applicant should forward the Application Form supported by an unconditional bank guarantee drawn on the Applicant s FCBU account pending allotment of the Offered Shares with confirmation from the LCB that upon notification of the allotment of Shares, the allotment value would be remitted through the Applicant s SIA. - Upon allotment of Offered Shares, foreign currency to the extent of the Sri Lanka Rupee equivalent value of Offered Shares allotted would be called on the bank guarantee drawn on the Applicant s FCBU account. - The requisite funds would then be credited to a SIA opened in favour of the Applicant via the aforementioned FCBU account. This procedure would protect a prospective investor from any losses accruing due to fluctuating exchange rates. (c) In addition to the payments made through SIA and FCBU as mentioned above, a foreign citizen resident in Sri Lanka under the Resident Guest Scheme may invest through a Resident Guest Foreign Currency Account (RGFCA) or Resident Guest Rupee Current Account (RGRCA) that investors maintain with any LCB in Sri Lanka. An investor who wishes to avail him/herself of this facility should make the payment for Offered Shares through a bank draft or an unconditional bank guarantee in Sri Lanka Rupees or by converting foreign currency funds available in the rgfca/rgrca as the case maybe (based on the guidelines provided by the Exchange Control Department of the CBSL) and made payable to Amana Takaful Life Limited IPO. Cheques or bank drafts or bank guarantees should be endorsed by the issuing custodian bank, to the effect that, arrangements have been made to facilitate such payment to be made against funds available in the individual s SIA account. The endorsement must be clearly indicated on the cheque or bank draft or the bank guarantee. Alternatively, a document detailing the endorsement could be submitted along with the payment and Application. Any refund payments to foreign investors are made in terms of Section 4.6 of this Prospectus. Applications supported by foreign currency remittances should be made in conformity with requisite declarations accompanied by the documentation stipulated by the Controller of Exchange of the Central Bank of Sri Lanka Restrictions Applicable to Foreign Citizens Resident in Sri Lanka Foreign citizens resident in Sri Lanka may make payments through Sri Lanka Rupee Accounts, only if they possess dual citizenship where one such citizenship is Sri Lankan. Foreign citizens having Sri Lankan citizenship should attach a certified copy of the citizenship certificate with the Application Form. Foreign citizens residing in Sri Lanka having valid residency visas should note that they cannot make remittances via cheques or bank drafts or bank guarantees drawn upon Sri Lanka Rupee accounts maintained with any licensed commercial bank in Sri Lanka but may do so via SIA account as detailed in Section above. Applications made by foreign citizens not in accordance to the foregoing shall be rejected. 26 Page Amãna Takaful Life Limited Initial Public Offering

31 4.4 Rejection of Applications i. Application Forms which are incomplete in any way and/or are not in accordance with the terms and conditions set out in this Prospectus will be rejected at the absolute discretion of the Company/ Managers to the Offer/Registrars to the Offer. ii. Any Application Form which does not provide the NIC, passport (where NIC is not available) or company registration number as the case may be, will be rejected. iii. Applications delivered by hand or by courier after 4.30 p.m. Local Time on the Offer Closing Date will be rejected. Applications received by post after 4.30 p.m. Local Time on the succeeding Market Day immediately following the Offer Closing Date, will also be rejected even if they carry a postmark date earlier than the Closing Date. iv. Applications made for less than One Thousand (1,000) Shares or for a number which is not in multiple of One Thousand (1,000) Shares will be rejected. v. An Application which does not carry a CDS account number, or indicates a number of a CDS account which is not opened at the time of the closure of the subscription list (either at the time fixed for closing or on the date on which the Offering is subscribed), or which indicates an inaccurate/ incorrect CDS account number, shall be rejected and no allotment of Shares will be made. vi. Application Forms stating third party CDS accounts instead of their own CDS account numbers, except in the case of margin trading accounts, will be rejected. vii. Applicants (other than the Employee Applicants) should apply only through one investor category and would be permitted to submit only one Application Form. Two or more Applications submitted by the same Applicant (other than the Employee Applicants) either under the same category or different categories will be construed as multiple Applications and will be rejected. viii. Application Forms submitted under a respective investor category, using the incorrectly coloured Application Forms will be rejected. ix. The company reserves the right to reject multiple Applications and suspected multiple Applications which are not allowed, as mentioned in Section x. Payment for Applications of Offered Shares accompanying two or more cheques and bank drafts or bank guarantees as mentioned in Section 4.3.1, will be rejected at the outset. xi. Applications made by individuals below 18 years of age or those in the names of sole proprietorships, partnerships, unincorporated trusts and non-corporate bodies will be rejected. Notwithstanding any provision contained herein, the Board of Directors shall reserve the right to refuse any Application or to accept any Application in full or part, for whatsoever reason. 4.5 Banking of Payments All cheques or bank drafts or bank guarantees received in respect of Applications will not be banked or called on until the Market Day after the Offer Closing Date of the subscription list, in terms of the CSE Listing Rules. 4.6 Returning of Monies on Rejected Applications Where an Application Form is rejected, the cheque or bank draft or bank guarantee received in respect of the Application will be returned via ordinary post at the risk of the Applicant. In the case of joint Applicants, the cheque or bank draft or bank guarantee received in respect of the Application will be returned to the first named Applicant. Amãna Takaful Life Limited Initial Public Offering PAGE 27

32 Where the Application Form is accepted and the cheque or bank draft or bank guarantee is not honoured by the bank at the first presentation, the Application will also be rejected and the dishonoured cheque or bank draft or bank guarantee will be returned via ordinary post at the risk of the Applicant. In the case of joint Applicants, the dishonoured cheque or bank draft or bank guarantee will be returned to the first named Applicant. 4.7 Basis of Allotment The allotment of the Offered Shares will be made to the various categories of Applicants, as set out below: Investor Category Percentage of Offer (%) Unit Trusts * 10% Retail Individual 40% Employees ** 5% Non-Retail 45% 100% * Unit Trust Investors should be growth or balanced unit trusts operated by managing companies licensed by the SEC, where such unit trusts comprise of not less than 500 unit holders resident in Sri Lanka who together hold at least 50% of that fund as per the Direction issued by the SEC (Ref: SEC/ LEG/11/03/36 of 10 March, 2011). Only one Application should be made under each category. ** Employee Category includes Group Employees and Agents. Group Employees category includes employees of: Amana Takaful Life Limited Amana Takaful PLC Amana Global Limited Amana Takaful (Maldives) PLC Amana Holdings Limited Amana Asset Management Limited Amana Wealth Management Limited Amana Capital Limited Amana Bank PLC who have been in service under the respective companies as at 31 March, 2016 and have not submitted their resignation as at the date of opening of the subscription list. Agents * category includes Agents of Amana Takaful Life Limited and Agents of Amana Takaful PLC. The basis of allotment for the Employees category will be at the discretion of the Board of Directors of the Company taking into consideration factors such as seniority, etc. The employees will not be provided with any form of financial assistance from any of the aforementioned companies for the purpose of purchasing Shares. Agents* - Persons registered with ATL/ATLL, who in consideration of a commission solicits or procures insurance business and has qualified the specified industry examination for the purpose. Applications submitted under the Unit Trust Investor Category should accompany a confirmation by the trustee confirming that such unit trust is in conformity with the criteria defined by the SEC Directive dated 6 June, 2011 (Ref: SEC/Leg/11/06/01) and CSE Listing Rules, 3.1.5(b)(iii). Local and foreign investor/s who apply for up to a maximum of 66,000 Shares (including 66,000 Shares) (value of not more than LKR 100,000) will be deemed as Retail Individual investors for share allotment purposes. 28 Page Amãna Takaful Life Limited Initial Public Offering

33 Investors who do not fall under the Retail Individual investor definition stated above will be deemed as Non-Retail investors for share allotment purposes. In determining the basis of allotment within the Retail Individual Investor Category, investors who subscribe for a smaller number of shares shall be given priority. The investor categories have been selected to ensure the broadest possible spread of shareholders while treating all Applicants in a fair manner as may be decided by the Board at its discretion. In the event of an undersubscription in the Employee Category, the Retail Individual investor category shall be given first priority, followed by the Unit Trust Investor category in allotment of the under subscribed Shares. In the event of an undersubscription in the Unit Trust investor category, the Retail Individual investor category shall be given first priority followed by Employee Category, in allotment of the under subscribed Shares. In the event of an undersubscription in the Retail Individual investor category, the Unit Trust investor category shall be given first priority followed by Employee Category, in allotment of the under subscribed Shares. In the event of an undersubscription in the Non-Retail investor category, Retail Individual investor category will be given first priority followed by Unit Trust investor category in the allotment of the undersubscribed Shares. Redistribution will not apply in the event of an oversubscription or undersubscription in all four categories stated above. Subject to the above the Board of Directors of the Company will endeavour to decide and announce to the CSE the basis of allotment as soon as practicable so as to ensure compliance with the Listing Rules. Upon the allotment being decided, an announcement will be made to the CSE. In the event of an over subscription of any one or more of the categories mentioned above, the basis of allotment will be decided by the Board of Directors of the Company in a fair and equitable manner. A written confirmation informing successful Applicants on their allotment of Offered Shares will be dispatched within ten (10) Market Days from the Offer Closing Date as required by the CSE. 4.8 Refunds on Applications Where an Application is accepted only in part or rejected in its entirety subsequent to cheques being realised, or the shares cannot be listed on the CSE due to noncompliance with the minimum public holding requirement, the balance/entirety of the monies received on Application as the case may be, will be refunded, such refunds will be made on or before the expiry of ten (10) Market Days from the Offer Closing Date (excluding the Offer Closing Date) as required by the CSE Listing Rules. As required by Section 2.4(k) of the CSE Listing Rules, Applicants would be entitled to receive interest at the rate of last quoted Average Weighted Prime Lending Rate (AWPLR) published during the immediately preceding week by the CBSL or any other authority (in the event Central Bank of Sri Lanka ceases to publish the AWPLR) plus five per centum (5.00%) for the delayed period on any refunds not made by the expiry of the aforementioned period. It is the responsibility of Non-Residents/Foreign Investors to ensure that their SIA details are accurately provided under Refund Payment Instructions on the Application Form to forward the refund to SIA through which the Application was made. Amãna Takaful Life Limited Initial Public Offering PAGE 29

34 Refunds via Sri Lanka Inter-bank Payment Systems (SLIPS) 1. The refund payment will be made to the bank account specified by the Applicant through the SLIPS on or before the expiry of ten (10) Market Days from the Offer Closing Date (excluding the Offer Closing Date) as required by the CSE Listing Rules and a payment advice shall be issued to the Applicant provided that the Applicant has submitted accurate and complete details of Applicant s bank account in the Application Form. However, SLIPS transfers are subject to a maximum limit of Sri Lanka Rupees Five Million (LKR 5,000,000/-) imposed by the CBSL with effect from October 2010 as per Operating Instruction Circular No. 11/2010 dated 25 October, Even though the Applicant has requested for SLIPS transfer for refund amounts and submitted accurate and complete details of the bank account in the Application Form, refund amounts exceeding Sri Lanka Rupees Five Million (LKR 5,000,000/-) will be made by a crossed cheque in favour of the Applicant and sent by ordinary post at the risk of the Applicant. In the case of a joint Application, a crossed cheque will be drawn in favour of the Applicant whose name appears first in the Application Form. 3. In the event the refund payment is effected via SLIPS based on the bank account details provided by the Applicant in the Application Form, but is rejected by the Applicant s bank due to inaccurate or incomplete information, such refund payments would be made via a crossed cheque in favour of the Applicant and sent by ordinary post at the risk of the Applicant. In such instances, the Company together with the Registrars to the Offer will send the refund cheques to such Applicants at the earliest possible time and the Applicant should not hold the Company or the Registrars to the Offer accountable for such delays. Bank codes and branch codes could be obtained from the following website, through the quick link access; Refunds via Crossed Cheque 1. If the Applicant has not provided details of the bank account in the Application Form or has provided inaccurate or incomplete details of the bank account with respect to refunds via SLIPS, the refund payment will be made by a crossed cheque in favour of the Applicant and sent by ordinary post at the risk of the Applicant. In the case of a joint Application, a crossed cheque will be drawn in favour of the Applicant whose name appears first in the Application Form. 2. A request for cancellation of crossing on the refund cheque, in instances where the Applicant does not maintain a current account, should be addressed to the Registrars to the Offer in writing, stating the cheque number and the fact that the Applicant does not maintain a current account. The refund cheque and a clear photocopy of the Applicant s NIC should accompany the letter. In the event of a refund cheque being delivered by hand by a third party to the Registrars to the Offer for cancellation of crossing, a letter of authorisation signed by the Applicant stating the NIC number of such third party should also be presented with the refund cheque. Refund cheques on which the crossings have been cancelled by the Registrars to the Offer should preferably be collected in person or by third party authorised by the Applicant. Where an Applicant has requested the delivery of the cheque on which the crossing has been cancelled via post, such cheque will be sent at the risk of the Applicant. 30 Page Amãna Takaful Life Limited Initial Public Offering

35 4.9 Successful Applicants and CDS Lodgement The Shares allotted will be directly uploaded to the respective CDS accounts given in the Application Forms before the expiry of eighteen (18) Market Days from the Offer Closing Date as requested by the CSE Listing Rules. All resident Applicants should indicate in the Application for Shares, their NIC number or the company registration number as the case may be, the passport number may be indicated only if the Applicant does not have an NIC number. As per the Directive of the Securities and Exchange Commission made under Circular No. 08/2010 dated November 22, 2010 and Circular No. 13/2010 issued by the Central Depository System (Private) Limited (CDS) dated November 30, 2010, all Shares transferred must be directly uploaded to the CDS accounts. As such, all Applicants should indicate their CDS account number in the Application Form. Applicants who do not have a CDS account are advised to open a valid CDS account prior to submitting the Application, in order to facilitate the uploading of transferred Shares to their CDS account. Please note that upon the transfer of Shares under this Offer, the transferred Shares would be credited to the Applicant s CDS account so indicated. Please note that SHARE CERTIFICATES SHALL NOT BE ISSUED. Any Application which does not carry a valid CDS account number or indicates a number of a CDS account which is not opened at the time of closure of the subscription list or which indicates an inaccurate/incorrect CDS account number, shall be rejected and no allotment will be made. You can open a CDS account through any member/trading member of the Colombo Stock Exchange (CSE) as set out in Annexure F or through any Custodian Banks as set out in Annexure G of this Prospectus. A written confirmation, upon the completion of crediting the respective CDS accounts will be sent to the shareholder within two (02) Market Days of crediting the CDS accounts by ordinary post to the address provided by each shareholder in their respective Applications. Applicants have the option of having their Shares locked in the CDS. Shares that are locked will not be available for trading purposes and will not be visible to the participant. Such Applicants would have to fill in the relevant section in the Application Form for this purpose. If the Applicant has not specified that the Shares need to be deposited to his/her locked balance in the CDS account, the said Shares would be deposited to Applicant s trading balance in the CDS account. Refer Section for the definition of locked. Offered Shares shall not be transferable by the shareholders during the period between the date of transfer of the Offered Shares and up to the date of listing (excluding the date of listing) of the Ordinary Shares on the CSE. Further, the Company shall not allot any Shares of the Company or transfer Existing Ordinary Voting Shares (other than the transfer of Offered Shares) during the interim period between the date of the Initial Listing Application and the date of listing of the Shares of the Company. Upon the Ordinary Shares being listed on the CSE, such Shares shall be freely transferable except for those Shares mentioned in Section 8.2 of this Prospectus, which will be locked-in to be in compliant with CSE Listing Rules 2.1.1(e). Amãna Takaful Life Limited Initial Public Offering PAGE 31

36 4.10 Declaration to the CSE and Secondary Market Trading The Company will submit to the CSE a declaration on the Market Day immediately following the day on which the Applicants CDS accounts are credited with the Offered Shares. Trading of the Ordinary Shares on the secondary market will commence on or before the third (3 rd ) Market Day from the receipt of the declaration by the CSE as per the CSE Listing Rules. 32 Page Amãna Takaful Life Limited Initial Public Offering

37 5.0 BUSINESS OPERATIONS OF AMANA TAKAFUL LIFE LIMITED 5.1 Business Operations of Amana Takaful Life Limited Amana Takaful Life Limited and it s parent, Amana Takaful PLC are fully fledged Takaful companies, offering life and general insurance solutions, in accordance with established Shariáh practices. The Takaful concept was hitherto unknown in Sri Lanka and adopts a risk sharing model, whereas conventional companies operate on a risk transfer basis. atll and atl are the only insurance companies promoting only Takaful products while all other Takaful offerings in the market are offered through Takaful windows in conventional insurance companies or as products. atll s comprehensive portfolio of products consists of Savings & Protection, Investment Linked, Group Life, Retirement (Pension), with an array of add-ons, including comprehensive medical/health plans and critical illness covers. As at 31 May, 2016, atll distributed its products through an island wide network of 26 branches, covering 22 districts. as per Section 53 of the Regulation of Insurance Industry (Amendment) Act No. 3 of 2011, composite insurance companies were required to segregate the two business lines into two separate companies on or before February As a result, the incorporation of atll took place in 2014 as part of the pre-requisites to secure regulatory approval for the new company. However, atll was segregated from Amana Takaful PLC only on 1 January, Since 1999 and prior to segregation, the life business existed as part of the composite Amana Takaful PLC (ATL). atl, the parent company provides shared services in Human Resources, finance, marketing, IT, legal and compliance as permitted by IBSL. in its first year as an independent company, atll recorded LKR Mn as GWP FYE 2015, a growth of 37% over the previous year. atll has also recorded a CAGR of 31.9% over the last five years. However, the Company has no GWP for the five months ended 31 December, 2014 as the Company was segregated only on 1 January, 2015, from which point the GWP for atll was recorded. Therefore, there was no revenue recorded for the period of June 2014 to December 2015 for ATLL. This revenue was recorded as part of ATL s revenue and disclosed in its annual accounts separately. the life fund value also grew to LKR 1.84 Bn as of 31 March Product Portfolio ATLL has categorized its offerings into three main categories. Protection and Savings Adhyapana, Surakshitha, Platinum Protection and Savings Wealth Management Prosper, Deergayu Corporate and Micro Mortgage, Group Credit, Group Life, Micro A long term protection and savings plan that helps plan and provide for children s higher education. The plan also includes a comprehensive health insurance cover for the parent and child. An affordably packaged life cover to help families reap the benefits of insurance. With a host of add-ons that include hospitalisation and critical illness coverage, enabling everyone to face life s contingencies with confidence. Designed to provide the best protection and benefits that money can buy. Apart from a coverage for natural/accidental death, and critical illness coverage, it also includes a comprehensive hospitalization cover for the client and his/her family with an overseas treatment option. Apart from the coverage, the non-rider premiums* are judiciously invested to provide superior returns and maturity benefits Amãna Takaful Life Limited Initial Public Offering PAGE 33

38 Wealth Management Single premium Regular savings Retirement plan Prosper is Sri Lanka s first Sharia ah compliant, Investment Linked Life Insurance Plan. Helps build a retirement fund over a period of time, to facilitate an enjoyable retirement With a variable Takaful cover, it can be tailor made to maximise investments or provide high value protection. Four funds are available under the scheme to choose investment options that best suite individual risk / return preferences. Ideal mechanism to invest lump sum funds meant for retirement or just savings. Corporate & Micro Facilitates a regular build-up of funds, to be used in retirement or savings. The ensuing pension, can be obtained at the age of 55 as a lump sum or regular monthly pension. Safeguard helps protect loved ones from the burden of debt in the case of the unexpected loss of the breadwinner. This offering can also be tailor made to safeguard University education payments, in the event of death of a parent. A solution offered to corporates and SME s to provide the assurance, should calamity strike an employee. With 24/7 coverage, it provides protection and safety beyond the mandatory insurance, showing how much you care as an employer. The Micro Takaful offering, taking the benefits of insurance to deserving markets. Covers include natural and accidental death, critical illness, loss of income, funeral and medical expenses. The covers are uniquely priced and marketed through the Company's strategic partners * Non-rider premium The basic premium paid by the policy holders, which makes up the basic insurance cover, including death by natural causes or accident and disability arising from such situations. Non-rider premiums carry a maturity value (upon completion of policy period) and a surrender value (premature cancellation). Protection and Savings - These products offer combined death and living benefits aimed at fulfilling the needs of diverse market segments. Fully customizable to individual needs, the products have a basic cover, which also doubles up as a fund build up that can be withdrawn partially or at maturity. Living benefits include critical illness rider that covers 38 critical ailments, a comprehensive hospitalization rider and daily cash benefit rider. The basic covers of these policies are designed under IBSL s unit linked guidelines, in a unique and innovative blend of risk and fund management, to provide excellent maturity and protection benefits. The Platinum product offers a unique feature attached to the critical illness rider where the policy holder can seek a second opinion overseas on an ailment, including airfare. atll s renewal portfolio contains endowment based legacy products, sold since the Company s inception. 34 Page Amãna Takaful Life Limited Initial Public Offering

39 Wealth Management - The Wealth Management portfolio includes the flagship product Prosper, which is Sri Lanka s first and only Islamic unit linked investment policy. The main intention of this product is to build up a fund for a future purpose, either by setting aside a lump sum or regular savings. The single premium option of the product receives excellent demand and provides a Shariah compliant and ethical path to participate in equity investments with balanced liquidity. It also allows an investor to switch between funds, a mechanism meant to manage market risks and optimize fund growth. Prosper also allows a regular payment option to enable a regular savings build up. Corporate & Micro The Corporate channel consists of the Mortgage Protection Policies (MPP), which is mainly marketed via the banking channel and the Group life solutions. The Group life portfolio is mainly aimed at corporates and SMEs and is marketed via branches and brokers. The micro initiative embarked by the Company is still in early stages. The Company has embarked on a plan to tie-up with several strategic partners such as micro finance organizations, plantation companies and large factories where there is a large workforce and collective associations/affinity groups to grow this portfolio. Risk Premium In keeping with Takaful principles of solidarity and mutual benefit, atll s policy liabilities are serviced by a pool of funds consisting of donations (Tabarru) charged from the policy holders. The Tabarru rate for individual policies are determined by mortality assumptions approved by the appointed actuary and other factors relating to the individual policy holder such as health status, job/vocation, amongst others. The funds are annually valued by the appointed actuary. atll s risk funds have been determined as adequate as at 31 December, Investments All investments of atll are managed by a professional team of fund managers at Amana Wealth Management Limited. The Company adheres to strict policies and guidelines of the Shariah with regard to all investments and related activities. The Shariah Advisory Council audits investment related transactions on a quarterly basis and reports to the Board on a regular basis. The Board Investment Committee meets on a monthly basis to review the investment performances and provide directions based on the performance and market conditions. Retakaful ATLL s reinsurers (retakaful partners) are Hannover Re of Malaysia and SCOR Re of Singapore, who are considered industry leaders. Both companies are multinational reinsurers with global market leadership positions in Life Re-Insurance with investment grade financial ratings. Standard & Poor s AA- ( Very Strong ), stable outlook AM Best - A+ ( Superior ), stable outlook Standard & Poor s - AA- Stable outlook AM Best - A Positive Outlook Fitch - AA-Stable Outlook Amãna Takaful Life Limited Initial Public Offering PAGE 35

40 5.3 Group Structure Mentioned below is the group structure as at 31 May, Aberdeen Holdings Limited (Ultimate Parent) 85% Amana Holdings Limited (Parent) 60.44% Amana Takaful PLC (General) 100% Amana Asset Management Limited 100% Amana Capital Limited 100% AG Capital (Pvt) Limited 100% Amana Global Limited 100% Amana Takaful Life Limited 51.39% Amana Takaful Maldives PLC 100% AG Takaful (Pvt) Limited 100% AG Takaful Lebanon 55% Amana Wealth Management Limited amana Takaful Life Limited is a fully owned (100%) subsidiary of Amana Takaful PLC. amana Takaful PLC is principally held by Amana Holdings Limited which has a 60.44% stake and by Amana Bank PLC which has a 15.25% stake. However, as detailed under Sri Lanka Accounting Standard-LKAS 24, Amana Bank PLC and Amana Takaful PLC do not consider each other as related party companies for the purpose of audit and reporting. Amana Global Ltd. - Amana Global Limited was incorporated on 25 January, 2008 in Colombo. Principal activities of Amana Global Ltd. are providing services such as technical support, research and development, advisory services on business planning and co-ordination, financial and treasury management, marketing and sales promotion and sourcing of raw material and components under Section 17 of The Board of Investment of Sri Lanka Law No. 4 of Amana Takaful (Maldives) PLC - Amana Takaful (Maldives) PLC was incorporated on 18 May, 2010 in Maldives. Amana Takaful (Maldives) PLC initially operated through a local agent with a temporary license until 4 March, Upon receiving license to carryout general Takaful (insurance) business in 2010 from the Maldives Monetary Authority, it ceased its operations through the agent and commenced independent operations. 36 Page Amãna Takaful Life Limited Initial Public Offering

41 5.4 Human Resources As at 31 May, 2016, the Company had 67 employees and a further 73 staff who performed services on a shared services basis. Table 5.1 Break Up of Employees Category No. of Employees Total ATLL Shared Services* Senior Management Middle Management Executives Non-Executives Total * The Company obtains shared services only through Amana Takaful PLC. As at the date of this Prospectus, there were no labour unions, significant agreements entered into between the labour unions and the Company. Sales force - Nearing a middle income status, life insurance in Sri Lanka largely remains an unsought product, and therefore, is mostly carried out via personal selling. Even though the acceptability levels have seen an upward trend in the last three years, it still requires a presence of field personnel to educate the full benefits of a life policy as well as individual product options and features. as with the rest of the industry in Sri Lanka, atll s GWP is generated via a sales team exceeding 400, comprising of individual sales personnel, Agents and agency supervisors. Table 5.2 Sales Team Composition Category No. of Personnel Sales Management (HO) 5 Sales Administration 2 Regional & Branch Management 26 Field Supervision 69 Field Individual Accolades & Recognition Amana Takaful PLC has received the following accolades: Best Islamic Financial Services Provider 2013 International Finance Magazine, UK Turnaround Brand of the Year (Life) Bronze 2013 SLIM Brand Excellence Awards Islamic Finance Entity of the Year Silver 2013 Sri Lanka Islamic Banking and Finance Industry Awards Islamic Finance Product of the Year Kruthaguna Gold 2014 Sri Lanka Islamic Banking and Finance Industry Awards Islamic Finance Entity of the Year Gold 2014 Sri Lanka Islamic Banking and Finance Industry Awards Islamic Finance Entity of the Year Bronze 2014 Sri Lanka Islamic Banking and Finance Industry Awards Islamic Finance Product of the Year Suwasiri Gold Sri Lanka Islamic Banking and Finance Industry Awards Amãna Takaful Life Limited Initial Public Offering PAGE 37

42 5.6 Branch Network 5.7 Future Plans for Amana Takaful Life Limited and Related Assumptions Strategic Initiatives for Growth Key initiatives to achieve the stated growth have been formulated in the three year plan of the Company. These actions form the bedrock of the five year growth agenda, extending to Market Penetration A key component of atll s expansion will focus on expanding its 2% market share. The aggressive plans laid out in the strategic plans are; - Expansion of the Agency force - A larger agency network is imperative to effectively penetrate key market segments. Considering that life insurance penetration being just under 15% of the workforce, a larger, well trained agency force becomes a key to access these segments. The following table provides details on the current status of the agency network of ATLL. Table 5.3 Agency Force of atll Category No. of Personnel As at Dec No. of Personnel As at 31 May, 2016 Sales Management 4 5 Sales Administration 3 2 Regional & Branch Management Field Supervision Field Individual Page Amãna Takaful Life Limited Initial Public Offering

43 The plan aims to have an agency force of 1,300 by the end of The costs pertaining to the recruitment have been factored in to the financial forecasts provided. Recruitment and development of the agency force is considered an ongoing business expense for insurance companies. - Technology - Digitization of most sales processes has been already launched, with several initiatives, one of which is arming the sales personnel with Tabs and Digital devices. atll envisages that this will enhance the effectiveness and efficiency of the sales team and enable them to service their customers effectively. - Expansion of Footprint - atll envisages to expand its footprint to key townships via branches and area development offices in the future. This initiative will also feature maximizing revenue from existing branches/development offices. atll expects its presence to expand to 40 units by the end of Regulatory approval is not required for branches or development centres of insurance companies. Innovative Product Portfolio The Company has a track record of introducing innovative Shariah compliant products in Sri Lanka. A pension product was introduced at the end of 2015 with special features. More new product developments are in the pipeline to widen consumer choice. Bancassurance Bancassurance is where a licensed commercial bank refers their customers to an insurance company as part of its product offerings and is paid a referral fee for same. Generally, such a model involves, placement of an employee of an insurance company at the bank s premises, who will liaise with bank staff for such referrals. Licensed commercial banks increasingly see insurance, especially life insurance, as a means of generating significant fee based income. atll plans to invest heavily in this channel, commencing with Amana Bank PLC to promote the Deergayu Retirement plan. atll expects this to be a long term project that will seek to maximise synergies that both institutions share. several additional initiatives, including Malaysian expertise has already been commissioned. atll expects to develop this channel to be on par with agency channel, in terms of new business by Customer Service Excellence ATL and atll have always enjoyed excellent customer feedback and satisfaction levels due to the many initiatives actioned by the management. A study done by Actuarial Partners, Malaysia in 2013, revealed that atll was ahead of the industry in terms of first year policy retention. This position has since then improved, though industry statistics are not available for comparison. atll also enjoys comparatively higher average premium value, reflecting customer acquisition with a strong practice of need based selling. Mobile apps for customer information and policy information is also currently in practice, with plans to expand services offered through same. The Company has also embarked on a business process re-engineering exercise to elevate its capability to meet the needs of the Company Assumptions Relating to the Future Plans of ATLL The above mentioned future plans of the Company would be dependent on market and industry conditions prevailing at the time of execution. Furthermore, the strategies are also based on the primary assumption that there will be no material changes in the regulatory environment. Any significant changes in the economy, industry, competition or regulatory environment may require an amendment to the plans and strategies of ATLL. Amãna Takaful Life Limited Initial Public Offering PAGE 39

44 The following assumptions were made with regard to the economy, industry and level of competition when deducing the aforementioned plan. 1. GDP growth and insurance penetration Sri Lanka achieved a GDP growth rate in excess of 6% for the last five years and is expected to continue a similar growth trajectory according to the Central Bank of Sri Lanka. The Company is also of the view that the life insurance industry growth would be around 15% for the next five years and hence the industry would witness an increased industry penetration. 2. Increase in disposable income Despite recent tax increases, the Company believes that the growth in hospitality and leisure sector, construction, healthcare, private education, etc. will help disposable income to continue to grow at a pace not less than the expected GDP growth which would in return have a positive impact on new policies/policy renewals. 3. Changing demographic patterns According to the Annual Health Bulletin released by the Ministry of Health, Sri Lanka, the country s population aged >60 is expected to reach 28.5% by This increased longevity makes Sri Lanka one of the oldest populations among developing nations and one of the most rapidly aging societies in the world, according to the World Bank. This rapidly aging society is expected to amplify growth prospects for the life insurance sector. 4. Regional development and Megapolis projects the Company believes that the the key township developments will drive additional employment and entrepreneurship opportunities, which will result in increased job opportunities and higher income which again will have a positive impact on the insurance sector Risk Factors Associated with the Future Plans of ATLL 1. Non-materialization of desired agency expansion plans to mitigate this risk, considerable resources and effort is being placed on the development of the agency force, including induction of specific management level individual to drive same. Team development has been included as a Key Performance Indicator (KPI) for distribution management personnel. 2. Pressure on disposable income life insurance premiums have a positive relationship with the level of disposable income. Recent increase in taxes and depreciation of the rupee could have a negative impact on disposable income. in addition to the above mentioned factors, Section 10 details out other risk factors associated with the future plans of ATLL. 40 Page Amãna Takaful Life Limited Initial Public Offering

45 6.0 CORPORATE STRUCTURE 6.1 Board of Directors The Board of Directors guides and supervises the business and operations of the Company. The Board consists of five (05) Independent Non-Executive Directors and two (02) Non-Independent Directors including the Chairman. As at the date of this Prospectus, the composition of the Board is as follows. Table Details Of Amana Takaful Life Limited Board Of Directors Name Designation Address Tyeab Akbarally Mohamed Fazal Ghaffoor Ifthikarudeen Ahamed Ismail Dato Mohd Fadzli Bin Yusof Mohamed Haniffa Mohamed Rafiq Radhakrishnan Gopinath Ammar Shafik Kassim Non-Executive Chairman (Non - Independent Director) Executive Director (Non - Independent Director) Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director No. 15/16, Albert Crescent, Colombo 07 No. 428/31, Samagi Mawatha, Eden Gardens, Hokandara South No. 79/1, Barnes Place, Colombo 07 No. 132, Pinggir Zaaba Taman Tundr Ismail Kuala Lampur, Malaysia St James Court, Apt - 1/1, 14, Alfred House Gardens, Colombo 03 No. 02, Babu Street, Sambandanar Nagar Pammal, Chennai No. 23/4, Independence Avenue, Colombo Profiles of the Board of Directors Tyeab Akbarally Non-Executive Chairman (Non - Independent Director) Mr. Akbarally was appointed to the Board at its inception and he is also a Director of Akbar Brothers Ltd. Mr. Akbarally s business interests extend to many sectors of the economy including export of tea, pharmaceuticals, hydro power and commodity trading. He also serves on the Boards of Amana Bank PLC and several other companies in the Akbar Brothers Group. Mohamed Fazal Ghaffoor Executive Director (Non - Independent Director) Mr. Ghaffoor is the CEO of Amana Takaful PLC. During his career, he had various roles in marketing, financial services and logistics covering a span of 35 years. He was Director Marketing of Ceylon Tobacco Company and having progressed through a number of roles within the organization he later joined British American Tobacco s Horn & East African Cluster and thereafter a Board member at British American Tobacco s operations in Pakistan and Iran. Mr. Ghaffoor was also the General Manager of DHL and Whittals Insurance, Sri Lanka and also served as Head of Marketing at Bank of Ceylon from 2010 to Ifthikarudeen Ahamed Ismail Independent Non-Executive Director Dr. Ismail was appointed to the Board of Amana Takaful PLC in June He also presently serves on the Boards of Amana Holdings (Pvt) Limited and Asia Siyaka PLC. He holds a BSc (Hons) Degree from the University of Ceylon and a PhD from the University of St. Andrews UK. He has attended the Advanced Management Programme at the Harvard Business School, and has participated in a variety of senior functional and general management training courses, mainly in Europe. Amãna Takaful Life Limited Initial Public Offering PAGE 41

46 Whilst he was Vice Chairman of Unilever, he served in various capacities in state institutions, among them as a Director of the National Apprentice Board, a member of the advisory committee of the Ministry of Foreign Affairs, the Research Planning Council of the CISIR, the Tertiary Vocation Education Commission and the Council of the Open University. He has also served as Principal of Zahira College, Colombo, CEO of APIIT Lanka and as Chairman of the Board of the Sri Lanka Business Development Centre, Council Member of the Employers Federation, Chairman of the Board of Governors of the Symphony Orchestra, Chairman of the Colombo District Scouts Association and Patron of the Photographic Society of Sri Lanka. Dato Mohd Fadzli Bin Yusof Independent Non-Executive Director Dato Mohd Fadzli Bin Yusof was appointed to the Board on 10 February, He was the Founder Chief Executive Officer/Director of Syarikat Takaful Malaysia Berhad, the first Takaful operator in Malaysia and Asia. He obtained the Professional Diploma in Communication, Advertising and Marketing (CAM) from the CAM Foundation in the United Kingdom. He started his career in broadcasting, including six years with BBC in London. Currently, he is an independent member of the Board of Hei Tech Padu Berhad and MRC Data Sdn Bhd. He also serves as a member of the Board of Directors, Mains Zakat Sdn Bhd, for the state of Negeri Sembilan, Malaysia, and a member of the Board of Trustees Sultan Mizan Royal Foundation. He is also an Academic Fellow, University College Insaniah in the State of Kedah, Malaysia. Mohamed Haniffa Mohamed Rafiq Independent Non-Executive Director Mr. Rafiq has been on the Board since its inception. He has been involved in the insurance industry for over four decades. Mr. Rafiq started his career as a Trainee Executive at Ceylon Agricultural and General Insurance Co. and joined the National Mutual Life Insurance Co. of Australia as a Junior Executive from He then joined Carson Cumberbatch and Co. Ltd. of Australia Ltd from From , he was a Manager for the Insurance Department at James Finlay and Co. Ltd. He later joined Protection and Indemnity Co. Ltd. as a Director from and then joined P and I Insurance Brokers (Pvt) Ltd. as a Director. He also was the Managing Director at Wycherly International School. His interests are diverse and include education, healthcare and real estate, just to name a few. Mr. Rafiq, with his wealth of experience in the sphere of insurance, plays an active role in Amana Takaful PLC. Radhakrishnan Gopinath - Independent Non-Executive Director Mr. Gopinath was appointed to the Board on 6 June, He was formerly the Chief Executive Officer of Life Insurance Corporation Lanka Ltd. (LIC Lanka) having previously held several top positions at LIC India. Mr. Gopinath was also a Strategic Planning Director at Al Nabooda Insurance Brokers LLC Dubai. He has also served as a Vice President of the Insurance Association of Sri Lanka. Mr. Gopinath is a member of Chartered Insurance Institute (CII), UK and also a member of The Personal Finance Society and Society of Mortgage Professionals (PFS) London UK. He is also a member of Indian Management Association and also is the Alumnus of Madras Christian College, India. He holds a Bachelor of Science (Mathematics) and a Postgraduate Diploma in Business Management. His passion in training, coaching and mentoring along with his extensive experience in insurance led him to establish gopast Centre for Learning (Pvt) Ltd., a company dedicated towards building human potential. Ammar Shafik Kassim Independent Non-Executive Director Mr. Kassim was appointed to the Board on 07 March, He started his career as a Summer Intern in 2009 at The Hindustan Times, New Media Initiatives Division, New Delhi, India, where he analyzed outreach enhancement proposals. Later he joined Expolanka Holdings in June 2012 and worked as an M&A Analyst until August He currently serves as the Director Strategic Development at Fits Air from January Page Amãna Takaful Life Limited Initial Public Offering

47 He holds a BSc (Hons: Deans List 2011, Pennoni Honors College, University) in Economics (Minor: Finance) from Drexel University in Philadelphia, Pennsylvania. He was also selected to participate in residential professional development program in General Management from the Stanford Graduate School of Business, (Summer 2011). He also holds an MSc in Management Information Systems from the New York University. 6.3 Other Directorships Held by the Board Table Other Directorships Name of Director Other Directorships Held Tyeab Akbarally Amana Takaful PLC Amana Bank PLC Akbar Brothers Exports (Pvt) Ltd Quick Tea (Pvt) Ltd Akbar Pharmaceutical (Pvt) Limited Energy Reclamation (Pvt) Ltd Falcon Development (Pvt) Limited Falcon Trading (Pvt) Limited First Option (Pvt) Limited Flexi Print (Pvt) Limited Land & Building (Pvt) Ltd AB Developments (Pvt) Ltd Lina Manufacturing (Pvt) Ltd Zahra Exports (Pvt) Ltd Mohamed Fazal Ghaffoor None Ifthikarudeen Ahamed Ismail Dato Mohd Fadzli Bin Yusof Mohamed Haniffa Mohamed Rafiq Radhakrishnan Gopinath Ammar Shafik Kassim Amana Takaful PLC Amana Holdings Ltd APIIT Lanka Asia Siyaka Commodity Brokers PLC Amana Takaful PLC Hei-Tech Padu Berhad (Malaysia) MRC Data Sdn Bhd (Malaysia) Zakat Mains Sdn Bhd (Malaysia) Perbadanan Wakaf Sdn Bhd (Malaysia) Amana Takaful PLC Citrus Events (Pvt) Ltd Bayside Marketing (Pvt) Ltd Corporate Investments Management (Pvt) Ltd Asset Link Ltd Alnabooda Insurance Brokers LLC Dubai Gopast Centre for Learning (Pvt) Ltd Gopast Centre for Business Excellence (Pvt) Ltd Amana Takaful PLC fits Aviation (Private) Limited Amãna Takaful Life Limited Initial Public Offering PAGE 43

48 6.4 Directors Interest in Shares Directors Direct and Indirect Shareholdings in the Company There are no direct and/or indirect shareholdings in the Company as at 31 May, 2016 by Directors of the Company Sale or Purchase of Shares by the Directors There were no sales, transfers or purchases of shares made by the Directors of the Company during the last 12 months prior to the date of this Prospectus Directors Emoluments The Directors were remunerated in the form of fees during FY 2015 to an approximate extent of LKR 2,073, The Directors are expected to be remunerated in the form of fees during FY 2016 to an approximate extent of LKR 2,223, Directors Interest in Assets The Directors hold no interest in assets acquired, disposed or leased by the Company during the two years preceding the Listing. Furthermore, it is not proposed that the Directors will hold any interest in assets to be acquired, disposed or leased by the Company in the two years subsequent to the Listing Directors Interest in Material Contracts There were no contracts or arrangements in force as at 31 May, 2016 in which the Directors of the Company are materially interested in relation to the business of the Company Statement - Board of Directors no Director or a person nominated to become a Director of the Company is or was involved in any of the following events: A petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer; Convicted for fraud, misappropriation or breach of trust or any other similar offence which the CSE considers a disqualification. 6.5 Corporate Governance Practices The present business environment has become more challenging and as a result the Company strongly believes that it is vital for atll to adopt the highest standard of corporate governance. This would nurture a culture of transparency, accountability and integrity which are essential prerequisites in ensuring the Company s survival and growth in a competitive market. Corporate governance is described as a management process in which a corporate, business entity or Company is directed, managed and controlled. It is a concept which is now increasingly gaining prominence in the business world. To ensure that the trust placed in the Directors is secure, a company must adhere to the best corporate governance practices which embody integrity, accountability and transparency. Nevertheless, the success of any good governance practice initiative is dependent on how the people are led and the policies as well as the processes are implemented Board Committees The Board of Directors has been drawn from a cross-section of industries. Their expertise and experience in various fields as well as insights have contributed immensely to making effective and informed Board decisions. The selection of the appropriate and suitable candidates with the right skills and attributes is 44 Page Amãna Takaful Life Limited Initial Public Offering

49 crucial in order to ensure its efficiency and effectiveness. For it is believed that a healthy Board culture will help encourage and safeguard good governance practices which in turn will ensure shareholders interests are always protected. The Board is in compliance with the regulatory requirements of the Listing Rules of the Colombo Stock Exchange in its Corporate Governance practices. The constitution of the Board in compliance with the above rules is as follows; Table 6.3 Board Composition Type Number of Directors Executive Directors 1 Non-Executive Non-Independent Directors 1 Non-Executive Independent Directors 5 Total 7 Remuneration Committee Remuneration Committee of Amana Takaful PLC will function as the remuneration committee of ATLL as well. The Remuneration Committee is entrusted with the responsibility of maintaining reasonable and competitive remuneration in line with the financial performance of the Company. The Committee regularly reviews and compares the overall executive compensation programme, benchmarking against the industry, for the determination of the Board. It also recommends the emoluments for the Chief Executive Officer and other senior officers of the management staff taking into cognizance the practice of the industry. In relation to this, the Remuneration Committee takes into consideration key result areas that are linked to the performance of the individual officers concerned relative to the target set. Independent Directors may not receive, directly or indirectly, any consulting, advisory or other compensatory fees from the Company. The Remuneration Committee of the Board comprises of three (03) Non-Executive Directors, the majority of whom are Independent as shown below. Dato Mohd Fadzli Bin Yusof Chairman (Independent Director) Mohamed Haniffa Mohamed Rafiq (Independent Director) Aboobacker Admani Mohamed Haroon (Non-Executive Director) Audit Committee - Audit Committee of Amana Takaful PLC will function as the audit committee of atll as well. The committee meets at least four (04) times a year, usually at quarterly intervals, to review and approve both the annual external and internal audit plans, ensure the independence and objectivity of the external auditors, review the internal audit process, adequacy of internal controls, and assessment on various transactions of the related parties. The composition of the Committee is as follows: Dato Mohd Fadzli Bin Yusof Chairman (Independent Non-Executive Director) Mohamed Haniffa Mohamed Rafiq (Independent Non-Executive Director) Aboo Sally Mohamed Muzzammil - (Independent Non-Executive Director) Amãna Takaful Life Limited Initial Public Offering PAGE 45

50 Related Party Transaction Review Committee - The Related Party Transaction Review Committee of Amana Takaful PLC will function as the Related Party Transaction Review Committee of atll as well. The composition of the Committee is as follows: Ifthikarudeen Ahamed Ismail Chairman (Non-Executive Director) Mohamed Haniffa Mohamed Rafiq (Independent Non-Executive Director) Muhammad Ehsan Zaheed (Executive Director) 6.6 Senior Management ATLL operates under a semi shared services structure, where sales, underwriting, claims and actuarial are dedicated and direct life functions, with finance, human resources, marketing, information technology, legal, compliance and internal audit functioning as shared services. Dedicated functional heads report to the CEO of atll and heads of shared services report to the CEO of atl, with a reporting line to the CEO of Amana Takaful Life Limited on Life related functions. Reyaz Jeffrey - Chief Executive Officer (up to 31 July, 2016) address: No. 39C, M J C Fernando Road, Idama, Moratuwa Mr. Jeffrey joined Amana Takaful PLC as it s GM/CEO - Life in 2007 and was appointed as Chief Executive Officer of Amana Takaful Life Limited, consequent to its segregation in January He has played a significant role in developing the Family Takaful footprint in Sri Lanka, which includes several significant first to market developments, resulting in significant growth for Amana Takaful. Mr. Jeffrey s roots are in the banking sector, counting over 14 years of experience in operations, credit and electronic banking. He also served as CEO of a specialized bank for three years. a Fellow of the Chartered Institute of Marketing (UK), he is also a Chartered Marketer, Member of the Sri Lanka Institute of Marketing and holds an MBA with Distinction from the Western Sydney University, Australia. Mr. Gehan Rajapakse Chief Executive Officer (Designate)* address: 4A, Park Drive, Colombo 05 Mr. Rakapakse counts over 23 years in the financial services industry with primary focus in the insurance and asset management spheres. Having commenced his career at CTC Eagle Fund Management Company Ltd. in 1992, he functioned as the General Manager of the asset management business and later on as the General Manager for Bancassurance and partnerships at Aviva NDB Insurance, the successor of CTC Eagle Insurance. he served lolc Insurance as its Chief Executive Officer for nearly three years, until October He will join Amana Takaful Life Limited as CEO designate in June Mr. Rajapakse holds a BA Econ (Hons) Degree from the University of Colombo and an MBA from the University of Sri Jayewardenepura. He is also a Fellow of the Chartered Institute of Management Accountants UK. * Mr. Rajapakse will assume duties as the Chief Executive Officer of ATLL from 1 August, S H Asif Assistant General Manager Sales & Distribution Mr. Asif joined atl in 2006 as a Regional Manager in charge of its Central Region. He was transferred to Life in 2013 and currently serves as Assistant General Manager, Sales & Distribution and is responsible for the overall sales and distribution functions of the Company. He counts 18 years of experience in sales and marketing. 46 Page Amãna Takaful Life Limited Initial Public Offering

51 His career began in Glaxo Smithkline in 1997 and worked as a Medical Promotion Delegate for five years and as Key Account Executive for three years. G H A N Sooriyarachi Assistant General Manager Family Underwriting Ms. Sooriyarachi joined Amana Takaful PLC in 2008 and serves as the Assistant General Manager, Family Underwriting. She counts 31 years of experience in life insurance. Prior to joining atl she has served at Union Assurance PLC as Manager, Policyholder Servicing. SHARED SERVICES A Hashim General Manager, Sales & Marketing (ATL & ATLL) Mr. Hashim started his career as a Management Trainee at Dimo Mercedes Benz in 1981 and joined the insurance industry in 1983 and counts 26 years of insurance industry experience. Before joining Amana Takaful PLC, he has been in Sales & Marketing at Mercantile Credit, ACW Insurance (Pvt) Ltd., Union Assurance PLC, Janashakthi Insurance Company PLC & MBSL Insurance. His role at atll comes under shared services with ATL since 1 January, 2015 subsequent to the business segregation of the Group. M F Jabir Head of Human Resources (ATL & ATLL) Mr. Jabir obtained his Bachelor of Science degree in Management and Diploma in Economics from the London School of Economics in conjunction with the University of London in Having commenced his career as a Management Trainee at Timex Garments in 2004, he later joined atl in January With over 11 years of corporate experience, he was appointed as Head of human resources in January 2013 and is currently responsible for the Human Resource function for both ATL and ATLL. his role at atll comes under shared services with atl since 1 January, 2015 subsequent to the business segregation of the Group. A H M Dilshad Senior Manager Compliance & Regulatory Reporting (ATL & ATLL) Mr. Dilshad joined Amana Takaful PLC in December He is currently responsible for regulatory compliance and reporting having progressed through a number of roles in the organization. Finance and regulatory compliance are his areas of competence. He has undergone 3 years of training at Ernst and Young, Chartered Accountants, prior to joining Amana Takaful PLC. his role at atll comes under shared services with atl since 1 January, 2015 subsequent to the business segregation of the Group. R Niyas Senior Manager Finance & Administration (ATL) Mr. Niyas joined Amana Takaful PLC in 2011 and was appointed as the Senior Manager - Finance in Prior to the current role he has worked for KPMG as an Audit Supervisor. He holds a BBA from University of Colombo and is also a member of CA Sri Lanka and CMA. his role at atll comes under shared services with atl since 1 January, 2015 subsequent to the business segregation of the Group. M S M Iqbal Head of Information Technology (ATL) Mr. Iqbal joined Amana Takaful PLC in He is currently heading the Information Technology department. He holds an MBA from Cardiff Metropolitan University UK. his role at atll comes under shared services with atl since 1 January, 2015 subsequent to the business segregation of the Group. Amãna Takaful Life Limited Initial Public Offering PAGE 47

52 A L M Inamulla Manager Internal Audit (ATL) Mr. Inamulla has more than 17 years of experience in banking, finance, insurance, tourism, poultry, manufacturing and apparel manufacturing. He joined Amana Takaful PLC in 2006 and currently is the Head of Audit for Amana Takaful Group. Mr. Inamulla is a Member of the Institute of Chartered Accountants of Sri Lanka (ICASL) and holds a Bachelors in Business Administration in Finance Management from the University of Colombo. He is also a member of the Institute of Certified Management Accountants (CMA) and is currently reading for his MBA at the University of Colombo. his role at atll comes under shared services with atl since 1 January, 2015 subsequent to the business segregation of the Group. S L Mirihana Manager Marketing Activations Mr. Mirihana is a decorated ex-military officer who retired from active service in the rank of Captain. He is a Graduate of the General Sir John Kotelawala Defense University. he joined Amana Takaful in 2008 and served in several capacities including Regional Manager and Agency Development Manager. He was appointed as Manager Marketing Activations in 2013 and post segregation, overlooks the Marketing functions of ATL and ATLL. Azmy Saly Senior Manager Learning & Development (ATL) Mr. Saly is a professionally qualified trainer in the insurance industry and has been practicing as a sales trainer for the last ten years and has graduated from the University of Peradeniya. He started off his career at one of the largest insurance companies in Sri Lanka where he held various positions starting from Maintenance Officer and rose to the position of Manager-Sales Training and later became the Head of Training for General Insurance. In 2013 he joined Amana Takaful PLC as Senior Manager - Learning and Development. He is a Certified HR Auditor and a Certified NLP Practitioner. He is an Associate Member of Sri Lanka Institute of Training and Development and an Associate Member of Insurance Institute of India and also a Member of Certified Professional Managers of CPM. His role at atll comes under shared services with ATL since 1 January, 2015 subsequent to the business segregation of the Group. R Zarook Manager - Legal Mr. Zarook qualified as an Attorney-at-Law from Sri Lanka Law College with First Class Honours in December He has more than 13 years of experience in the legal profession with emphasis on administrative law, commercial law, civil law, criminal law and corporate financial frauds. His practice included appearing as counsel and litigating in Arbitration inquiries, Labour Tribunals, Magistrate Courts, District Courts, High Court of Civil Appeal and the Court of Appeal. Mr. Zarook is currently acting as the Manager-Legal, in-charge of all legal affairs at Amana Takaful PLC and Amana Takaful Life Limited from June N S Deen Specified Officer Ms. Deen joined Amana Takaful Life Limited in June 2015 as the Specified Officer of the Company. She is an Associate of The Chartered Insurance Institute, UK and was previously the Specified Officer of Amana Takaful PLC since January 2002 to January Senior Management Emoluments The Senior Management was remunerated in the form of salaries and bonuses during FY 2015 to an extent of LKR 10,546, The Senior Management is expected to be remunerated in the form of salaries and bonuses during FY 2016 to an approximate extent of LKR 11,000, Page Amãna Takaful Life Limited Initial Public Offering

53 6.7 Statement Chief Executive Officer The Chief Executive Officer of the Company has not been involved in any of the following: A petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer; Convicted for fraud, misappropriation or breach of trust or any other similar offence which the CSE considers a disqualification. Statement Chief Executive Officer (Designate) The Chief Executive Officer (Designate) of the Company has not been involved in any of the following: A petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer; Convicted for fraud, misappropriation or breach of trust or any other similar offence which the CSE considers a disqualification. Amãna Takaful Life Limited Initial Public Offering PAGE 49

54 7.0 OTHER INFORMATION 7.1 Degree of Dependence on Customers, Borrowers or Suppliers There is no material dependency on key customers, borrowers or suppliers in terms of the overall business operations of the Company. 7.2 Dividends Dividend Policy The Company may, subject to the provisions of the Articles of Association and the Companies Act No. 07 of 2007, make dividend payments by way of interim and final dividends to its shareholders in relation to the profits made from time to time. Such dividends will be paid after taking into consideration the Company s earnings, investment requirements and other financial conditions Dividend History The Company has passed a board resolution on 17 May, 2016, to declare a 2% (LKR 0.02 per share) dividend as a final dividend to its shareholder (ATL) out of the retained profits available as at 31 December, the information of the dividend computation is given below: TABLE 7.1 DIVIDEND COMPUTATION Number LKR Total number of shares issued as at date 500,000,000 Face value of each share 1.00 Fully paid Share Capital as at 17 May ,000,000 Profit After Tax for the year Shareholders Fund 18,000,000 Revenue reserves under Shareholders Fund 13,400,000 Amount of dividend payable at 2% 10,000,000 Dividend per share Details of Material Indebtedness ATLL is not materially indebted to any other institution or individual. The Company had no term loans, other borrowings, or indebtedness in the nature of borrowings, including bank overdrafts and liabilities under acceptance or acceptance credits as at 31 March, there were no lease, lease purchase, hire purchase and capital commitments as at 31 March, there were no material contingent liabilities, including acceptances and guarantees outstanding as at 31 March, there were no balances due from related parties of atll including inter-company balances as at 31 March, there were no balances due to related parties of atll including inter-company balances as at 31 March 2016 except for the following. This was the shared cost that was incurred by atll on behalf of Amana Takaful Life Limited for the shared services that was offered by ATL. 50 Page Amãna Takaful Life Limited Initial Public Offering

55 Table 7.2 Related Party Transactions Party Amount (LKR) Amana Takaful PLC 7,692, there were no mortgages or charges on assets of atll as at 31 March, The finance cost recorded in the audited financial statements for the year ended 31 December, 2015 amounts to LKR 429,933/-. This amount is the share of the finance cost pertaining to leased motor bikes which are used by the staff of Amana Takaful Life Limited where the assets are held by Amana Takaful PLC. there were no guarantees issued by the Company as at 31 March, there was no loan capital outstanding as at 31 March, there were no transactions relating to properties completed within the two (02) preceding years in which any vendor of the property to the Company or any person who is or was at the time of the transaction, a promoter or a director or proposed director of the Company and furthermore they had no interest, direct or indirect in the said transactions. 7.4 Working Capital The Board is of the opinion that the working capital is sufficient for the purpose of carrying out day to day operations of the Company. 7.5 Litigation, Disputes and Contingent Liabilities As at 31 May, 2016, the Company was involved in the following legal proceedings. Table 7.3 Pending Legal Proceedings Case Details A policy holder (K.P. Alamdeen/plaintiff) has filed an action against ATLL in the District Court of Colombo claiming a sum of LKR 5,102, being the total premiums made in relation to the life insurance policy obtained by him (DMR 2673/2014) Status The trial proceedings of this case is yet to commence. The trial was initially fixed for 29 April, 2016 and was delayed and now fixed for 10 October, The Company s liability for payment is LKR 2,095,538/- as at 31 May, 2016, there were no penalties imposed by regulatory and state authorities and there were no contingent liabilities that would affect the current and future profits of the Company except for what is mentioned above. 7.6 Management Agreements There are no management agreements as at 31 May, further, even though the Company operates under a shared services structure, there are no management agreements with regard to same. The details of the shared services and the basis of sharing the cost component have been submitted to the regulator (IBSL) in the process of segregating the composite business. Amãna Takaful Life Limited Initial Public Offering PAGE 51

56 7.7 Material Contracts ATLL entered into an agreement with Amana Wealth Management Limited for the purpose of managing the investment portfolio of the Company with effect from 11 February, Fund management fees are paid on a monthly basis and the total amount paid for the year 2015 was LKR 4,250, The fee for year 2016 is expected to be approximately LKR 4.5Mn. atl as a composite insurance company entered in to a contract with Amana Bank PLC on 19 August, 2013 to promote products of atl and Prosper product and Deergayu Retirement Plans of atll. However, as this contract was entered into by atl, atll expects to enter into a separate agreement in the future, if needed, in order to promote products only of ATLL. 7.8 Details of Commissions Paid No commission has been paid in the two (02) years preceding the listing or payable for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any Shares of the Company. 7.9 Details of Benefits Paid to Promoters No benefit has been paid or given within the two (02) years preceding the listing and there are no benefits intended to be paid or given to any promoter Taxation the Company is liable to the following taxes based on the regulations that are currently prevalent; Income Tax: The Company is liable for an income tax of 28% of its taxable profits in accordance with the provisions of the Inland Revenue Act, No. 10 of 2006 and subsequent amendments thereto. Cess Payments: Pays to IBSL for the purpose of creation of a Policyholders Protection Fund at the rate of 0.2% of the total net premium ESC: Pays only on investment income at the rate of 0.25% and life insurance premium income is deemed to be not part of the turnover in accordance to the provision of Sec. 2(3)(b) of the esc Charge Act No. 13 of 2006 Stamp Duty: Policies of insurance for every LKR 1,000 or part thereof LKR 1/- Crop Insurance Levy: Pays on quarterly after tax profit at the rate of 1% as enacted by Gazette Notification on 2013 with the view of covering natural disaster damages suffered by farmers 7.11 Transfer of Shares of Amana Takaful (Maldives) PLC to Amana Takaful PLC As per the audited financial statements of Amana Takaful PLC for FY 31 December, 2015, the Independent Auditor s Report carries the following Emphasis of Matter. We draw attention to Note 9.3 in the financial statements which describes the transfer of investment in the subsidiary to the Company* at no consideration that is accounted based on the policy stated in Note The financial statements of the Company* and the Group, comply with the requirements of Section 151 and 153 of the Companies Act No. 07 of * Company in this respect refers to Amana Takaful PLC The following comment is in respect of the above Emphasis of Matter pointed out by the Auditors. amana Global Limited, a fully owned subsidiary of Amana Takaful PLC transferred shares of Amana Takaful (Maldives) PLC being 51.39% of the total Shares of Amana Takaful (Maldives) PLC to Amana Takaful PLC without any purchase consideration. The Board of Directors decided the fair value of a share at six 52 Page Amãna Takaful Life Limited Initial Public Offering

57 Maldivian Rufiyaa based on an independent valuation. The reason for the above is to restructure the group and bring Amana Takaful (Maldives) PLC directly under the control of Amana Takaful PLC (Parent). amana Global Ltd being a fully owned subsidiary of Amana Takaful PLC, the fair value of Amana Takaful (Maldives) PLC in the restructuring as stated above transferred the said company without any cash consideration as form of a gift to the parent as there is no change in the ownership of Amana Takaful (Maldives) PLC. the details of the above transaction are as follows: Purpose/ Rationale Restructuring of Amana Takaful Group Transaction Date 31 December 2015 Parties Relationship Fair Value per Share Amana Takaful (Maldives) Plc Subsidiaries Six Maldivian Rufiyaa No. of Shares Transaction Value (LKR) 10,402, ,197,352 Amana Global Limited The Company has recorded the asset transferred amounting to LKR Mn under investment in subsidiaries and the fair value gain arising from the transfer in the Statement of Comprehensive Income. Consequently, this transfer resulted in a profit of LKR Mn for 2015 as per audited financial statements of Amana Takaful PLC. At the Group level, the above transaction is eliminated since the transfer is within the same group of Companies. even though the above mentioned transaction was not reviewed separately by the audit committee of the Company, the Board of Directors of which certain directors are members of the audit committee as well assessed and reviewed the above transfer, prior to the same being executed Risk Based Capital Requirements of Amana Takaful PLC As per the audited financial statements of Amana Takaful PLC for FY 31 December, 2015, the Independent Auditor s Report carries the following Emphasis of Matter. We draw attention to Note 2.7 in the financial statements which indicates that the Company* had not met the Solvency Margin as per the Regulation of Insurance Industry Act No 43 of 2000 and amendments thereto ( Act ) as at 31 December, 2015 and the Solvency Margin (Risk Based Capital) Rules reported to Insurance Board of Sri Lanka up to the date of audit report. These conditions, along with other matters as set forth in Note 2.7, indicate the existence of a material matter for which mitigating factors are explained therein. * Company in this respect refers to Amana Takaful PLC The following comment is in respect of the above Emphasis of Matter pointed out by the Auditors. amana Takaful Life Ltd has met its Risk based Capital requirements throughout the twelve months period and up to date. However, Amana Takaful PLC (General company) fell short on the Total Available Capital marginally in the month of December The auditors therefore raised their concerns through an emphasis of matter paragraph with regard to the said shortfall. The management has disclosed the following measures taken to rectify the above as detailed in note 2.7 in the Annual Report. - Additional measures to infuse new capital into the Company by 30th June 2016 has been planned, for which potential parties have been already identified and mutually agreed to, - Divest and dilute strategic investments including the investment in subsidiary. further capital infusion through a Rights Issue has been approved by the Board. Amãna Takaful Life Limited Initial Public Offering PAGE 53

58 8.0 CAPITAL STRUCTURE As at the date of this Prospectus, the Stated Capital of the Company is Sri Lankan Rupees Five Hundred Million (LKR 500,000,000.00) divided into Five Hundred Million (500,000,000) fully paid up Ordinary Voting Shares. 8.1 An Overview of the Capital Structure The detailed breakdown of the Stated Capital of ATLL is given below; Table Stated Capital of Amana Takaful Life Limited 31 December, March, 2016 Stated Capital (LKR) 500,000, ,000,000 Number of Ordinary Shares in Issue 500,000, ,000,000 The breakdown of the details of all classes of shares issued for the two (02) years preceding the date of the Prospectus is given below: Date of Allotment Name No. of Ordinary Voting Shares Consideration (LKR) Amana Takaful PLC 120,000, Amana Takaful PLC 380,000, Shareholding Structure Pre and Post IPO The current and the post IPO shareholding structures are illustrated below; Table Shareholding Structure Pre and Post IPO Name Pre IPO Post IPO Number of Ordinary Shares % Number of Ordinary Shares Existing Shareholders 500,000, % 450,000, % IPO Shareholders ,000, % Total 500,000, % 500,000, % % in terms of CSE Listing Rule 2.1.1(e)(ii), the shares continued to be held by all existing Non-Public shareholders, as defined in Section 8.3, namely 450,000,000 shares, held by Amana Takaful PLC as shown in Tables 8.3 and 8.4 below, would be subject to a lock-in for a period of six (06) months from the date of listing. As such, these shares would not be available for secondary market trading on the CSE upon atll obtaining listing of its shares subsequent to the IPO contemplated via this Prospectus until the expiry of the aforesaid six (06) months period from the respective dates of listing. Since there were no share allotments or share transfers during the period of twelve (12) months immediately preceding the date of an Initial Listing Application, no further shares will be subject to a lock-in, in terms of CSE Listing Rule (e)(iv) or (e)(v), except for the shares mentioned above. 54 Page Amãna Takaful Life Limited Initial Public Offering

59 Table 8.3 Shares Locked-in Pre IPO Category of Shareholders (Pre- Listing) Non-Public Locked-in Shares Shares held by Non-Public Shareholders prior to the date of the Initial Listing Application - Locked-in The time period after which the Shares will be available for trading 6 months from the date of listing No. of Shares No. of Shares as a percentage of Total Number of Shares in Issue (Pre-Listing) 450,000, % Public * Not Locked-in Total 450,000, % * Public defined under the definition mentioned in CSE Listing Rules 2.1.1(e) (Refer Section 8.3 of the Prospectus) The Company hereby confirms that the information furnished herewith shall remain unchanged to the date of listing. Pre-IPO Public Holding (Shares held by the Public as a percentage of the total Pre-IPO number of Shares), as per the Public definition provided in the CSE Listing Rules is 0%. Table 8.4 Shares Locked-in Post IPO Category of Shareholders (Post-Listing) Non-Public Public* Public* Locked-in Shares Locked-in (Pre IPO Shares) Not Locked-in (Pre ipo Shares) Not Locked-in (IPO Shares) The Months after which the Shares will be Available for Trading No. of Shares No. of Shares as a percentage of Total Number of Shares in Issue (Post-Listing) 6 months from the date of listing 450,000, % ,000, % Total 500,000, % * Public defined under the definition mentioned in CSE Listing Rules 2.1.1(e) (Refer Section 8.3 of the Prospectus) Post-IPO Public Holding (total unlocked-shares post-ipo that will be held by the Public as a percentage of the total Shares in issue Post-IPO), as per the Public definition provided in the CSE Listing Rules is 10.00%. tabulated below are the shareholding details of the Company as at 31 May, Table Shareholders Pre IPO Name Number of Ordinary Shares % Amana Takaful PLC (sole shareholder) 500,000, Total 500,000, there were no share transfers relating to the sole shareholder mentioned above, during the period of twelve (12) months immediately preceding the date of the Initial Listing Application. Amãna Takaful Life Limited Initial Public Offering PAGE 55

60 8.3 Free Transferability of Shares In accordance with CSE Listing Rule 2.1.1(e): All Shares held by Non-Public Shareholders * prior to the date of the initial listing application, which have not been divested through the Initial Public Offering shall be locked-in for a period of six (06) months from the date of listing of the entity. All Shares held by Public Shareholders ** prior to the date of the initial listing application shall not be locked-in. All shares acquired by way of a transfer from another shareholder (irrespective of being Non-Public or Public Shareholders) during the period of twelve (12) months immediately preceding the date of an Initial Listing Application shall be locked in for a minimum of six (06) months from the date of listing or 12 months from the date of acquisition of those shares, whichever is longer. All Shares acquired by way of an allotment during the period of twelve (12) months immediately preceding the date of an initial listing application shall be dealt with by the discretion vested in the Securities and Exchange Commission under Section 28A of the Securities and Exchange Commission of Sri Lanka Act No. 36 of 1987 where the Commission grants a waiver to an entity in terms of the said provision. * Non-Public Shareholders, shall mean the following parties who hold, directly or indirectly, shares of the Company; a) its parent, any subsidiary or associate companies or any subsidiaries or associates of its parent company; b) its Directors who are holding office as directors of the entity and their close family members; c) Chief Executive Officer and his/her close family members; d) Key Management Personnel and their close family members; e) Any party acting in concert with the parties set out in a), b), c) and d) above; f) Shareholders whose shares are in a locked account with the CDS due to a statutory or regulatory requirement other than those shareholders exempted under (h) below and whose shares have been subject to a voluntary lock-in at the option of the shareholder g) Employees of the Company, who have been allotted shares of a Listed Entity which are directly or indirectly controlled by the management or the majority shareholder of the Company h) Any Entity or an individual or individuals jointly or severally holding 5% or more of the shares of the Listed Entity if the Company is a Diri Savi Board Entity and 10% or more of the shares if the Company is a Main Board Entity, except where such shareholder is; i. a statutory institution managing funds belonging to contributors or investors who are members of the public; or ii. iii. an entity established as a unit trust or any other investment fund approved by the SEC; or not a related party declared in terms of Sri Lanka Accounting Standards or a party acting in concert declared in terms of the Company Takeovers and Mergers Code. Close Family Member shall mean the spouse or a financially dependent child. Key Management Personnel shall mean those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company. ** Public Shareholders shall mean any party who hold Shares of the Company other than the parties identified as Non-Public Shareholders above mentioned. 56 Page Amãna Takaful Life Limited Initial Public Offering

61 The details of the lock-in periods for the shares are mentioned in Table 8.1 and 8.2 above, and the shares that will be subject to a lock-in will not be will be available for trading. Subject to the lock-in mentioned above, there are no further restrictions on the free transferability of shares. 8.4 Other Securities The Company has not issued any convertible debt securities or any other class of shares other than the shares stated above. Further there are no securities of the same or other class subscribed or sold privately in conjunction with this IPO. 8.5 Share Re-Purchases or Redemptions The Company has not engaged in any share re-purchase, redemption or stated capital reduction exercises in the two years preceding the date of this Prospectus. 8.6 Takeover Offers There have been no takeover offers by third parties in respect of the Company s Shares during the past two years and no takeover offers have been made by the Company in respect of shares of third parties. Amãna Takaful Life Limited Initial Public Offering PAGE 57

62 9.0 MANAGEMENT DISCUSSION AND ANALYSIS Table below summarizes the income statement of atll for the past four years and three months ended 31 March, The Company was incorporated on 10 July, 2014, however, has been a part of the composite entity prior to the segregation. Below details are the carved out figures from the composite entity reflecting only the performance of ATLL. Table 9.1 Summary of Income Statement LKR Million Three Months Ended 31 March, 2016 (Unaudited) GWP NEP Income from Investments Total Revenue , Benefits, Losses & Expenses Takaful Claims Acquisition cost Change in Liability Other Expenses Total Expenses , Profit/(Loss) for the Year 1.08 (14.12) (2.34) Gross Written Premium ATLL recorded a GWP of LKR 928 Mn in 2015 over LKR 679 Mn in 2014, a growth of 36.7%. This growth was contributed by both Savings & Protection and Unit Linked portfolios. The Company witnessed a stepped growth since the introduction of its Unit Linked policies in Initially introduced as an investment linked policy, the unit linked framework was adapted as a base framework for its Savings and Protection platform as well. Whilst 90% of the revenue stems from the branches and agents, the Bancassurance, Broker and Corporate lines that were established in 2014, have been increasing in contribution. The four-year average growth rate from was 36.9% in comparison with an industry average of 8.7% over the same period. New business grew by 27.4%, whilst renewals grew by 23.4% in The table below depicts the GWP growth over the last four years, since the introduction of the Unit Linked product structure. 58 Page Amãna Takaful Life Limited Initial Public Offering

63 Table 9.2 Gross Written Premium LKR Million Non-Unitised Family Takaful Unitised - Savings and Protection Unitised Investment Mortgage and Group Life Total GWP Gross Written Premium Growth & Mix LKR Mn Non-Unitised Family Takaful Investment Unitised unitised Savings and Protection Mortgage and Group Life Prosper, the investment-based product recorded a contribution of LKR Mn in 2015, making up 36.8% of the Life Takaful products. Claims & Acquisition Cost Over the last four years, the Company has managed claims arising from policy liability at 5% of revenue. Other policy related payments which include part withdrawals, surrenders and maturities have also been managed at 17%. Acquisition cost of the Company has increased from 4.5% of GWP to 10.5% of GWP in 2015, reflecting the emphasis on new business acquisition and revenue growth stemming from introduction of Unit Linked products, which carry a higher commission to sales personnel. Product based incentives were also introduced in 2013, along with product based promotions, which are reflected in the above. Profitability As a Takaful entity atll considers the surplus in the Shareholders Fund, which earns the management fee from the Premium income and meets all the business related expenses including acquisition cost as the profit of the Company. In its first year of independent operations, ATLL recorded a Profit After Tax of LKR 18 Mn in Amãna Takaful Life Limited Initial Public Offering PAGE 59

64 Table 9.3 Summarized Financial Position Assets As at 31 March, 2016 Financial Assets , , Investments Financial Assets - Unit Linked , , Other Assets Total Assets , , , , Liabilities Family Takaful Fund Family Fund - Unit Linked , , Other Liabilities , , , , Equity Stated Capital and Reserves Accumulated Profit/ (Loss) Total Equity Total Equity & Liabilities , , , , The Life Fund has grown to LKR 1.7 Bn as at 31 December, 2015 from LKR 500 Mn at the beginning of The growth in 2015 alone was LKR Mn. The graph below depicts the fund growth and the movements since Long Term Fund (Family Takaful and Unit Linked Funds) 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 37.7% 37.8% 31.7% 31.6% 30.0% ,000 1,800 1,600 1,400 1,200 1, LKR Mn Family Takaful Fund LKR M family Growth Rate 60 Page Amãna Takaful Life Limited Initial Public Offering

65 Table 9.4 Growth and Movement of Life Fund LKR Million Gross Written Premium Net Earned Premium Income from Investments Claims and Expenses Fund Growth As depicted in the summarized financial position the Life Takaful Fund has gradually decreased, whilst the Life Takaful Unit Linked Fund has increased from LKR Mn in 2012 to LKR 1,191 Mn in This is reflection of the switch to the Unit-Linked product platform over the course of the last three years. Industry footing Amana Takaful Life has gradually strengthened its market share from 0.6% in 2007 to 1% in 2012 and since then has rapidly increased its market share in tandem with its excellent growth over the last three years. As depicted in the table below atl s 36.5% CAGR from in comparison to industry CAGR of 13.5% has led to market share moving up to 1.7% in Table 9.5 Market Share Industry 20,706 23,613 24,005 31,152 35,162 37,477 41,676 44,596 53,575 atl Market Share 0.6% 0.8% 0.9% 0.8% 0.9% 1.0% 1.3% 1.5% 1.7% Growth Industry 14.0% 1.7% 29.8% 12.9% 6.6% 11.2% 7.0% 20.0% ATL 44.3% 9.5% 15.9% 26.7% 20.1% 48.8% 25.0% 36.7% Source: IBSL Annual Reports and market shared data Solvency atll has complied with mandatory IBSL regulations to ensure that its solvency margins are above the stipulated solvency margin over the operational period. atll also is well within the stipulated Risk Based Capital (RBC) requirement determinations mandated by IBSL. Solvency (Minimum Requirement - 1) Solvency Ratio 5.52 Solvency Determination Under RBC Rules Risk-based Capital Adequacy Ratio (CAR) - Min 120% 239% Minimum Capital Requirement (MCR) LKR 500,000 Amãna Takaful Life Limited Initial Public Offering PAGE 61

66 10.0 INVESTMENT CONSIDERATIONS AND ASSOCIATED RISK FACTORS Risk Factors Prospective investors should pay particular attention to the fact that the Company and its business activities are subject to a number of risk factors which may be within or outside the control of the Company. the risk factors that follow may be considered material to investors in making an informed judgment on the Company. If any of the considerations and uncertainties given below develops into actual events, the Company s business, financial conditions or results of operations and prospects could be adversely affected. However, given the strategic initiatives employed by the Company, the business operations of the Company are expected to be sustainable in the foreseeable future Risks Related to the Insurance Sector Government Policy Regulations: The insurance sector is monitored and regulated by IBSL, with the primary intention of safeguarding the interest of the policyholders, while overseeing the development of the industry. Any major regulatory changes that are introduced, such as the Risk Based Capital framework and the business segregation, will have a direct impact on the operations and performance of insurance sector entities. However, the strict supervision by the regulators reduces the risk of liquidation and malpractice within the sector. This strict monitoring process provides a sense of security for the investors as well as the policyholders. ATLL currently has a comfortable margin of safety in terms of RBC. Macro-economic Risks: Change in economic factors such as the GDP growth rate, disposable income levels and the financial market performance pose a direct risk to the Company s financial performance. Additionally, prevailing interest rate regime and monetary policy of the country would also have an impact on the investment income in the insurance sector Risks Related to the Business Operations Underwriting Risks The Company is exposed to the following risks as a result of engaging in the insurance operations. Exposure Risk: The Company faces an exposure risk if a policy is accepted at a price which is not adequate to meet probable cost of claims. In order to mitigate this risk, the Company continuously reviews the policy profitability, pricing and the terms and conditions while also providing training, guidance, instructions and a proper procedure to the underwriting staff. Further, the Company also takes necessary steps to ensure that the reinsurance is confirmed prior to issuing the insurance policy. Claims Settlement Risk: This is the risk of disputes arising with regard to claim settlements. This can lead to customer dissatisfaction as well as the need for arbitration. Therefore, the Company adopts practices which help reduce this risk, such as, explaining the terms and conditions of the policy to the policyholder, maintaining and following a claim manual, checking the policy terms with the claim request, maintaining payment authority limits, carrying out cross analysis of information etc. Reserving Risk: Any unexpected and unbudgeted increases in claims give rise to reserving risk. Maintaining the reserves based on timely information and reviewing the reserves periodically, together with the quarterly use of the services of an independent actuary helps atll to maintain the reserving risk at an acceptable level. Reinsurance Risk: The risk of a default by a reinsurer and the inadequacy of the risk transferred to the reinsurer results in the reinsurance risk. Using reputed and stable reinsurers and reviewing the reinsurance panel and the rating of the reinsurers are some of the measures taken by the Company to reduce the reinsurance risk. 62 Page Amãna Takaful Life Limited Initial Public Offering

67 Credit Risk: This is the risk associated with the policyholders or intermediaries not settling dues owed to the Company. Granting credit only based on the approved policy, frequently follow-up procedures, and policy cancellations upon non-settlement and provisioning are some of the steps taken by atll to lessen the credit risk associated with its business operations Regulatory and Compliance Risk This is the risk of not complying with applicable regulatory requirements including but not limited to the Minimum Capital Requirement, solvency ratios and asset allocation. Not complying with regulatory requirements would result in the Company being warned by regulatory authorities leading up to a revocation of the Company s insurance license. Given the significance of this risk, the management reviews any regulatory changes frequently and assesses their impact on the Company. Additionally, a compliance checklist with relevant officials sign-off is maintained together with regular board papers on compliance and ongoing communications with the regulators Investment Related Risks Market Risk: Adverse movements in the market prices and the resultant fall in the value of investments would expose the Company to the risk of incurring losses. Due to the significant impact this could have on the profitability of atll, the Company does not take speculative investment decisions and bases all its investment decisions on fundamentals. Credit Risk: The credit risk with regard to the investment made by the Company would entail the potential risk of a borrower failing to meet the obligations as per the agreed terms, whereby atll may face difficulties in recovering the principal and interest payments. In order to reduce the exposure to credit risk, the Company evaluates the credit rating of the investee company prior to making the investment and ensures that the single exposure limits recommended by IBSL is strictly adhered to. Liquidity Risk: This is the risk that arises as a result of not being able to trade or convert an investment quickly into cash in order to prevent or minimize a loss. Considering the cash flow requirements of the Company prior to making investment decisions, regular review of maturity periods and maintaining adequate buffers to meet contingencies assist ATLL in reducing liquidity risk Operational Risk This is the risk caused by the failure in routine operational functions of the company, arising as a result of a failure in systems, procedures, processes, failure of the employees to comply with set rules and regulations or through human error. as a mitigation strategy, the company places special emphasis on maintaining a backup, ensuring the security and stability of information systems, training employees to ensure that they have comprehensive knowledge and skills required to perform their respective roles satisfactorily, reviewing and appraising the skills of employees, reviewing internal controls and carrying out internal audits Capital Market Related Risks Non-Existence of Prior Market for the Shares Prior to the IPO there has been no public market for the Company s Shares. There can be no assurance that an active trading market for the Shares will develop or if developed, will be sustained, or that the market price of the Shares shall not decline below the Share Offer Price. The Share Offer Price may not be indicative of the market price for the Company s Shares after completion of the IPO Price Volatility in the Secondary Market The price of the Shares may fluctuate due to and not limited to the following: variations in operating results, changes in operating environment, transitions in the regulatory front, strategic alliances or Amãna Takaful Life Limited Initial Public Offering PAGE 63

68 acquisitions, industrial or environmental laws, fluctuations in the market prices for products or raw materials, macroeconomic factors and external events. Price of Shares may follow general investor sentiment prevalent in the market at a given time. In addition, the price of the Shares in the market will fluctuate as a result of share trading volumes Shares May Not be a Suitable Investment for All Investors Each potential investor in Shares must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should: have sufficient knowledge and experience to evaluate Shares, the merits and risks of investing in Shares and the information contained or incorporated by reference in this Prospectus; have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in Shares and the impact the Shares will have on its overall investment portfolio; have sufficient financial resources and liquidity to bear all of the risks of an investment in Shares, including where the settlement currency is different from the currency in which such investor s principal financial activities are denominated; understand thoroughly the terms of Shares and be familiar with any relevant indices and financial markets; and be able to evaluate (either alone or with the help of a financial advisor) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks. 64 Page Amãna Takaful Life Limited Initial Public Offering

69 11.0 STATUTORY DECLARATIONS Statutory Declaration by the Directors 29 June, 2016 We the undersigned, who are named in the Prospectus as Directors of atll, hereby declare and confirm that we have read the provisions of the CSE Listing Rules and of the Companies Act No. 07 of 2007 and any amendments to it relating to the issue of this Prospectus, and that those provisions have been complied with. this Prospectus has been seen and approved by us and we collectively and individually accept full responsibility for the accuracy of the information given and confirm that after making all reasonable enquiries and to the best of our knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate. Where representations regarding the future performance of atll have been given in the Prospectus, such representations have been made after due and careful enquiry of the information available to atll and making assumptions that are considered to be reasonable at the present point in time in our best judgement. the parties to the Offer have submitted declarations to the Company declaring that they have complied with all regulatory requirements applicable to such parties, and that such parties have no conflict of interest with the Company. Name Designation Signature Tyeab Akbarally Mohamed Fazal Ghaffoor Non-Executive Chairman (Non-Independent Director) Executive Director (Non-Independent Director) Ifthikarudeen Ahamed Ismail Non-Executive Independent Director Sgd Dato Mohd Fadzli Bin Yusof Non-Executive Independent Director Sgd Mohamed Haniffa Mohamed Rafiq Non-Executive Independent Director Sgd Radhakrishnan Gopinath Non-Executive Independent Director Sgd Ammar Shafik Kassim Non-Executive Independent Director Sgd Statutory Declaration by the Financial Advisor and Manager to the Offer- Acuity Partners (Private) Limited 29 June, 2016 We, Acuity Partners (Private) Limited, of 53, Dharmapala Mawatha, Colombo 3 being the Financial Advisors and Managers to the Offer for Sale of atll, hereby declare and confirm to the best of our knowledge and belief that the Prospectus constitutes full and true disclosure of all material facts about the Offer and of atll, whose Ordinary Shares are being Offered for Sale and it has satisfied itself that profit forecasts have been stated by the directors after due and careful enquiry. the Common Seal of Acuity Partners (Private) Limited affixed on this 29 th day of June 2016 at Colombo in the presence of two Directors. Sgd Sgd Sgd. Director Sgd. Director Amãna Takaful Life Limited Initial Public Offering PAGE 65

70 Statutory Declaration by the Company 29 June, 2016 An application has been made to the CSE for permission to deal in and for a listing for all of the Ordinary Shares of the Company and those Ordinary Shares which are the subject of this Offer for Sale. Such permission will be granted when shares are listed on the CSE. The CSE assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports included in this Prospectus. Listing on the CSE is not to be taken as an indication of the merits of the Company or of the Shares Offered. Sgd. Director Sgd. Director 66 Page Amãna Takaful Life Limited Initial Public Offering

71 ANNEXURE A: ACCOUNTANT's Report and Five Year Summary Amãna Takaful Life Limited Initial Public Offering PAGE 67

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77 ANNEXURE B: INDEPENDENT AUDITORS REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 Amãna Takaful Life Limited Initial Public Offering PAGE 73

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121 ANNEXURE C: INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDING 31 MARCH 2016 Amãna Takaful Life Limited Initial Public Offering PAGE 117

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133 ANNEXURE D: INDEPENDENT VALUATION REPORT PUBLISHED BY THE INDEPENDENT VALUER TO THE OFFER TO ASCERTAIN THE VALUE OF AMANA TAKAFUL LIFE LIMITED S ORDINARY SHARES Amãna Takaful Life Limited Initial Public Offering PAGE 129

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191 ANNEXURE E: Summarized APPRAISAL VALUATION REPORT BY THE ACTUARY Amãna Takaful Life Limited Initial Public Offering PAGE 187

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204 ANNEXURE F: COLLECTION POINTS Copies of the Prospectus and the Application Form can be obtained free of charge from the following collection points. Manager to the Offer Acuity Partners (Private) Limited 53, Dharmapala Mawatha, Colombo 3 T: Members & Trading Members of the CSE Acuity Stockbrokers (Private) Limited 53, Dharmapala Mawatha, Colombo 3 T: Asia Securities (Private) Limited 2 nd Floor, 176/1-2/1, Thimbirigasyaya Road, Colombo 5 Tel Bartleet Religare Securities (Private) Limited Level G, Bartleet House 65, Braybrooke Place, Colombo 2 T: Capital Trust Securities (Private) Limited 42, Mohamed Macan Markar Mawatha, Colombo 3 T: CT CLSA Stockbrokers (Private) Limited 4-14, Majestic City, 10, Station Road, Colombo 4 T: Enterprise Ceylon Capital (Private) Limited 27 th Floor, East Tower, World Trade Centre Echelon Square, Colombo 1 T: , First Capital Equities (Private) Limited 1, Level 2, Lake Crescent, Colombo 2 T: Asha Phillips Securities Limited 2 nd Floor, Lakshmans Building, 321, Galle Road, Colombo 3 T: Assetline Securities (Private) Limited 120, 120A, Pannipitiya Road, Battaramulla T: Candor Equities Limited Level 8, South Wing, Millennium House, 46/58, Nawam Mawatha, Colombo 2 T: Claridge Stockbrokers (Private) Limited 10, Gnanartha Pradeepa Mawatha, Colombo 08 T: Capital Alliance Securities (Private) Limited Level 5, Millenium House, 46/58, Navam Mawatha, Colombo 2 T: First Guardian Equities (Private) Limited 32 nd Floor, East Tower, World Trade Centre, Echelon Square, Colombo 1 T: J B Securities (Private) Limited 150, St. Joseph Street Colombo 14 T: Page Amãna Takaful Life Limited Initial Public Offering

205 Lanka Securities (Private) Limited 228/1, Galle Road, Colombo 4, T: , Nation Lanka Equities (Private) Limited 44, Guildford Crescent, Colombo 7 T: , Navara Securities (Private) Limited 25 2/1, Milepost Avenue, Colombo 03 T: /20 SC Securities (Private) Limited 2 nd Floor, 55, D. R. Wijewardena Mawatha, Colombo 10 T: Softlogic Stockbrokers (Private) Limited 6, 37 th Lane, Queens Road, Colombo 3 T: Taprobane Securities (Private) Limited 2 nd Floor, 10, Gothami Road, Colombo 08 T: John Keells Stockbrokers (Private) Limited 186, Vauxhall Street, Colombo 2 T: , LOLC Securities Limited Level 18, West Tower, World Trade Centre Echelon Square, Colombo 1 T: NDB Securities (Private) Limited 5 th Floor, NDB Building, 40, Navam Mawatha Colombo 2 T: , Richard Pieris Securities (Private) Limited 55/20, Vauxhall Lane, Colombo 2 T: SMB Securities (Private) Limited 102/1, Dr. N M Perera Mawatha, Colombo 08 T: Somerville Stockbrokers (Private) Limited 137, Vauxhall Street, Colombo 2 T: , , TKS Securities (Private) Limited 4 th Floor, 245, Dharmapala Mawatha, Colombo 07 T: Amãna Takaful Life Limited Initial Public Offering PAGE 201

206 Branches of Amana Takaful PLC Branch Address Telephone No. Head Office 660-1/1, Galle Road, Colombo Akkaraipattu 77, Main Street, Akkaraipattu Akurana 207/B, Matale Road, Akurana Anuradhapura 81, Bank Site, Anuradhapura Batticaloa 23, Bar Street, Batticaloa Dehiwala 142, Galle Road, Dehiwala Galle 41, Sri Devamittha Mawatha, China Garden, Galle Gampola 134/A, Kandy Road, Gampola Hambantota 104, Tissa Road, Hambantota Jaffna 249/1, 1st Floor, Power House Road, Jaffna Kaduruwela 379A, Main Street, Kaduruwela Kalmunai 32, Mallika Building, Main Street, Kalmunia Kalpitiya 208, Main Street, Kalpitiya Kalutara 161, Main Street, Kalutara South, Kalutara Kandy 111-1/1, Kotugodella Street, Kandy Kattankudy 287, Main Street, Kattankudy Kinniya 124, Main Street, Kinniya Kurunegala 7, South Circular Road, Kurunegala Matale 106, King s Street, Matale Matara 36/1, St. Thomas Mawatha, Matara Mawanella 207, New Kandy Road, Mawanella Muttur 5, Main Street, Muttur Negombo 121 1/1, St. Joseph s Street, Negombo Pettah 51-53, 1st Floor, Bankshall Street, Colombo Puttalam 47, Mannar Road, Puttalam Ratnapura 310/1, Main Street, Kudugalwatta, Ratnapura Trincomalee 71, Thirugnanasambanthar Street, Trincomalee Vavuniya 6/80, 1st Cross Street, Vavuniya Page Amãna Takaful Life Limited Initial Public Offering

207 Branches of Amana Bank PLC Branch Address Telephone No. Main Branch 480, Galle Road, Colombo Ladies Branch 480, Galle Road, Colombo Dehiwala 28, Galle Road, Dehiwala Pettah 129, Main Street, Colombo Akkaraipattu 102, Main Street, Akkaraipattu Akurana 204/1, Matale Road, Akurana Badulla 18/1, Lower Kings Street, Badulla Eravur 108/5, Punnakuda Road, Eravur Galle 24, Old Matara Road, Galle Gampola 119, Kandy Road, Gampola Kaduruwela 379, Main Street, Kaduruwela Kalmunai 32, Main Street, Kalmunai Kalmunai Unity Square Kalmunai Unity Square Shopping Complex, Main Street, Kalmunai Kandy 105, Kotugodella Veediya, Kandy Kattankudy 187, Main Street, Kattankudy Kinniya 264, Main Street, Kinniya Kuliyapitiya 215-1/1, Main Street, Kuliyapitiya Kurunegala 137, Puttalam Road, Kurunegala Mawanella 22B, New Kandy Road, Mawanella Negombo 97, Colombo Road, Negombo Nintavur 40/5, Main Street, Ninthavur Oddamavadi Main Street, Mawadichennai Puttalam 23, Colombo Road, Puttalam Ratnapura , Main Street, Ratnapura Sammanthurai Hajiyar Place, Hijra Junction, Ampara Road, Sammanthurai Amãna Takaful Life Limited Initial Public Offering PAGE 203

208 ANNEXURE G: CUSTODIAN BANKS Bank of Ceylon Head Office,11 th Floor, 4, Bank of Ceylon Mawatha, Colombo 1 T: , , /55, Citi Bank, N A P.O Box 888, 65 C, Dharmapala Mawatha, Colombo 7 T: /8, , , Deutsche Bank AG P.O Box 314, 86, Galle Road, Colombo 3 T: , Banque Indosuez C/O Hatton National Bank PLC, Cinnamon Gardens Branch, 251, Dharmapala Mawatha, Colombo 7 T: Commercial Bank of Ceylon PLC Commercial House, 21, Sir Razik Fareed Mawatha, Colombo 1 T: , , , Hatton National Bank PLC Head Office, 5 th Floor, 479, T. B. Jayah Mawatha, Colombo 10 T: The Hong Kong and Shanghai Banking Corporation Limited 24, Sir Baron Jayathilake Mawatha, Colombo 1 T: , , , Pan Asia Banking Corporation PLC Head Office, 450, Galle Road, Colombo 3 T: Public Bank Berhad 340, R A De Mel Mawatha, Colombo 3 T: , Seylan Bank PLC Level 8, Ceylinco Seylan Towers, 90, Galle Road, Colombo 3 T: , , , State Bank of India 16, Sir Baron Jayathilake Mawatha, Colombo 1 T: , , Nations Trust Bank PLC 256, Sri Ramanathan Mawatha, Colombo 15 T: People s Bank Head Office, 5 th Floor, Sir Chittampalam A Gardiner Mawatha, Colombo 2 T: , , , Sampath Bank PLC 110, Sir James Peiris Mawatha, Colombo 2 T: Standard Chartered Bank P.O Box 112, 37, York Street, Colombo 1 T: , Union Bank of Colombo PLC 64, Galle Road, Colombo 3 T: Page Amãna Takaful Life Limited Initial Public Offering

209 ANNEXURE H: INDEX OF TABLES ILLUSTRATED IN THE PROSPECTUS List of Tables Table 3.1 Divestiture of Existing Ordinary Voting Shares 13 Table 5.1 Break Up of Employees 37 Table 5.2 Sales Team Composition 37 Table 5.3 Agency Force of ATLL 38 Table 6.1 Details Of Amana Takaful Life Limited Board Of Directors 41 Table 6.2 Other Directorships 43 Table 6.3 Board Composition 45 Table 7.1 Dividend Computation 50 Table 7.2 Related Party Transactions 51 Table 7.3 Pending Legal Proceedings 51 Table 8.1 Stated Capital of Amana Takaful Life Limited 54 Table 8.2 Shareholding Structure Pre and Post IPO 54 Table 8.3 Shares Locked-in Pre IPO 55 Table 8.4 Shares Locked-in Post IPO 55 Table 8.5 Shareholders Pre IPO 55 Table 9.1 Summary of Income Statement 58 Table 9.2 Gross Written Premium Table 9.3 Summarized Financial Position Table 9.4 Growth and Movement of Life Fund 61 Table 9.5 Market Share 61 Amãna Takaful Life Limited Initial Public Offering PAGE 205

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