Ceylinco Life Insurance Limited - IAR 2017 PDF

Ceylinco Life Insurance Limited Integrated Annual Report 2017
OUR VISION
To take the message of Life Insurance and
Retirement Planning to every Sri Lankan and
provide protection to every family.
OUR PURPOSE
To become the most trusted, acclaimed
and progressive life insurance company
in Sri Lanka, by providing need based
life insurance solutions to our customers,
recognising and rewarding our employees,
creating successful partnerships with
stakeholders and ensuring sustainable
business practices for sustainable, responsible
and profitable growth, while leaving a
smaller carbon footprint on the planet.
Life insurance is for life. It brings a
policyholder and the Company together in
a close knit relationship that spans a lifetime.
As this relationship progresses through the
years, it also grows immense trust between
the policyholder and the Company.
At Ceylinco Life, such relationships and trust are
invaluable as we understand life policies don’t
merely protect the policyholder but whilst building
peace of mind and a secured life, they also
provide succour and comfort to their loved ones –
and this is a pact that we hold sacrosanct.
2
CONTENTS
1–10 Preamble 37–79 Business Model

CEYLINCO LIFE INSURANCE LIMITED
INTEGRATED ANNUAL REPORT 2017
About this Report 06 Organisational Overview 38
Highlights of the Year 08 Operating Environment 42
Strategic Direction 57
Our Business Model 67
11–36 Messages and Stakeholders and Materiality 70
Management
Profiles 81–153 Management
Message from the Chairman 12
Chief Executive Officer’s Review 16

Discussion
Board of Directors 22 and Analysis
Corporate Management 30 Financial capital 82
Managers 34 Intellectual Capital 92
Manufactured Capital 98
Social and Relationship Capital 104
– Investor Capital 106
– Customer Capital 108
– Business Partner Capital 119
– Social Capital 126
Employee Capital 132
Natural Capital 148
Events 154
3
157–216 Stewardship 217–308 Financial Reports

Risk Management 158 Financial Calendar 217
Corporate Governance 165 Understanding Our Financials 218
Annual Report of the Board of Directors 186 Actuarial Report 221
Board Subcommittees 194 Independent Auditors' Report 222
Report of the Remuneration Committee 196 Statement of Financial Position 223
Report of the Nomination Committee 197 Statement of Comprehensive Income 224
Report of the Audit Committee 198 Statement of Changes in Equity 226
Report of the Related Party Transactions Statement of Cash Flow 227
Review Committee 200
Insurance Revenue Account 229
Investment Committee Report 201
Notes to the Consolidated
Board Investment Committee Report 212 Financial Statements 230
Statement of Directors' Responsibility
to Financial Reporting 213
214
Chief Financial Officer’s Statement
The Board’s Statement on Internal Control 215
309–330 Supplementary
Information
Quarterly Analysis 310
Ten Year Summary 312
Milestones 314
GRI Content Index 316
Sustainability Assurance Report 321
Branch Network 322
Glossary of Key Terms 329
Stakeholder Feedback Form – Enclosed

Corporate Information – Inner Back Cover
4
OUR VALUES
“We have nearly one million Sri Lankan lives covered

by active life policies and have been the market
leader in Sri Lanka’s life Insurance industry for
fourteen consecutive years”
5
OUR PRIDE

PROFESSIONALISM
In delivering life insurance and
retirement planning solutions
to meet the individual needs of
our customers.
REWARDING
Customers, sales force, staff for
their dedication and loyalty.
INTEGRITY
In everything we do,
individually and collectively.
DEDICATION
In communicating the
importance of Life Insurance
and Retirement Planning to
every Sri Lankan.
EXCELLENCE
In customer service, product
development, innovation and
fulfilling our social responsibility.
6
ABOUT
PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
THIS REPORT
This Report presents a detailed yet

concise account of the Company’s value This is the third consecutive

creation process over the short, medium Integrated Annual Report of
and long-term towards its stakeholders. Ceylinco Life Insurance Limited.
It offers a detailed view into the strategy,
governance and capital management
and detailed information about the
financial performance in the context of the
surrounding operating environment in 2017.
Finally, the Report addresses all queries
pertaining to making sound decisions about
the Company and its activities.
Report structure
The Annual Report 2017 covers the
12-month period from 1 January to
31 December 2017, which is consistent
with the usual annual reporting cycle
for financial and sustainability reporting.
The most recent report of the Company
for the year ended 31 December
2016 is available on our website:
http://www.ceylincolife.com. There are no
significant changes from previous reporting
periods in the scope and topic boundaries
neither are there any restatements as
compared to the Annual Report issued in
previous reporting years.
The Annual Report 2017 discusses

the strategy, governance, financial and
non-financial performance and future The materiality determination process is Precautionary principle
prospects in the context of the value discussed under Materiality Assessment
that begins on page 76. The precautionary principle is applied in
creation process, in a holistic manner.
relation to our social and environmental
sustainability. Being mindful of the impact
Report boundary External assurance of our actions, we have taken necessary
This Report covers the entirety of The Financial Statements and related notes measures to mitigate the risks caused to
operations of Ceylinco Life Insurance and disclosures published in this Report society and environment. Such impacts
Limited together with its three subsidiaries have been audited by the Company’s are also considered in new product
– Serene Resorts Limited, Ceylinco Seraka Independent External Auditors, Messrs developments. These are detailed under
Limited and Ceylinco Healthcare Services Ernst & Young, Chartered Accountants Social and Relationship Capital on pages
Limited and associate company – Citizens and the Independent Auditors’ Report is 104 to 130.
Development Business Finance PLC, given on page 222. We also engaged our
which are in unrelated businesses and are External Auditor, to provide reasonable Compliance
collectively referred to as “Group” in this assurance on the non-financial content of
Annual Report. Whilst the key financial this Report within the Global Reporting The Financial Statements of Ceylinco Life
aspects are discussed in the context of Initiative (GRI) Sustainability Reporting Insurance Limited has been prepared in
the Company as well as the Group, the Guidelines. The report and conclusions accordance with the Sri Lanka Accounting
non-financial aspects are discussed from of Ernst and Young can be found in their Standards issued by The Institute of
the perspective of the Company. Assurance Report on page 321. Chartered Accountants of Sri Lanka.
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION About this report 7

We continuously adopted the
theme titled “Know Your Life
Insurer” for the third consecutive
year in our Annual Report. This is
because we want our customers
and all our stakeholders to know
us: our personality, our ethics, our
business acumen and strengths.
It is our intent on making
ourselves better understood by
all our stakeholders.
The Company has followed additional we have opted for the “In accordance –
guidelines as established by the Core” option, the United Nations Queries
Companies Act No. 07 of 2007, Regulation Sustainable Development Goals (UNSDG)
of Insurance Industry Act No. 43 of 2000 as and the Smart Integrated Reporting We welcome your comments
amended and Rules and Regulations issued MethodologyTM. or inquiries on this Integrated
by the Insurance Regulatory Commission of Annual Report 2017 which could
Sri Lanka (IRCSL). For governance-related matters, where be addressed to the Company
applicable, we voluntarily comply with Secretarial Department:
In writing this Report, we bridge the the Code of Best Practice on Corporate Ms Chalana Waidyasekera,
mandatory standards applicable to Ceylinco Governance issued jointly by The Institute Company Secretary
Life for financial reporting, with voluntary of Chartered Accountants of Sri Lanka and Ceylinco Life Insurance Limited,
frameworks and standards, such as those the Securities and Exchange Commission No. 106, Havelock Road,
from the International Integrated Reporting of Sri Lanka. Colombo 5,
Council (IIRC) and the Global Reporting Sri Lanka
Initiative (GRI).
Tel : +94 11 246 1117
In particular, we have drawn on concepts, E-mail : chalanaw@ceylife.lk
principles and guidance, of Global Website : www.ceylincolife.com
Reporting Initiative (GRI) Sustainability Call Centre : +94 11 246 1461
Reporting Guidelines GRI Standards, where Skype ID : companysecretary_ceylife
8
HIGHLIGHTS
OF THE YEAR
Financial Highlights
Company
Year Ended 31 December 2017 2016 Change

Rs. ’000 Rs. ’000 %
Results for the Year

Gross written premium 15,765,484 15,027,600 4.91
Net claims/net benefits 6,686,980 6,651,682 0.53
Increase in long-term insurance fund 7,258,502 8,397,889 (13.57)
Investments and other income 10,280,547 8,780,689 17.08
Transfer to retained earnings (Annual shareholder transfer) 4,500,000 2,300,000 95.65
Transfer to retained earnings (One-off surplus transfer) 3,456,184 –
Profit before taxation (Including one-off surplus transfer) 9,807,535 3,743,727 161.97
Profit before taxation (Excluding one-off surplus transfer) 6,351,351 3,743,727 69.65
Profit after taxation (Including one-off surplus transfer) 9,467,426 3,079,042 207.48
Profit after taxation (Excluding one-off surplus transfer) 6,011,241 3,079,042 95.23
Position at the Year End

Shareholder's equity (Including one-off surplus transfer) 20,646,898 11,911,830 73.33
Shareholder's equity (Excluding one-off surplus transfer) 17,190,714 11,911,830 44.32
Long-term insurance fund 81,723,759 77,925,114 4.87
Investments 92,264,065 84,220,630 9.55
Total assets 106,094,505 96,458,089 9.99
Year Ended 31 December 2017 2016 Change

%
Per Ordinary Share

Earnings (Basic) (Including one-off surplus transfer) (Rs.) 189.35 61.58 207.48
Earnings (Basic) (Excluding one-off surplus transfer) (Rs.) 120.22 61.58 95.23
Interim dividends (Rs.) 8.64 5.42 59.34
Final dividends (Rs.) 0.36 2.08 (82.67)
Total dividends (Rs.) 9.00 7.50 20.00
Net asset per share (Including one-off surplus transfer) (Rs.) 412.94 238.2 73.33
Net asset per share (Excluding one-off surplus transfer) (Rs.) 343.81 238.2 44.32
Ratios
Return on total assets (Including one-off surplus transfer) (%) 8.92 3.19 179.55
Return on total assets (Excluding one-off surplus transfer) (%) 5.67 3.19 77.50
Return on equity (Including one-off surplus transfer) (%) 45.85 25.85 77.39
Return on equity (Excluding one-off surplus transfer) (%) 34.97 25.85 35.28
Dividend cover (Times) (Including one-off surplus) 21.04 8.21 156.23
Dividend cover (Times) (Excluding one-off surplus) 13.36 8.21 62.69
Dividend payout ratio (Excluding one-off surplus) 4.75 12.18 (60.97)
Dividend payout ratio (Including one-off surplus) 7.49 12.18 (38.53)
Capital Adequacy Ratio

Total Available Capital (TAC) (Rs. Mn.) 52,477 43,094 22.36
Risk-based Capital Requirement (RCR) (Rs. Mn.) 13,985 12,848 5.72
Risk-based Capital Adequacy Ratio (CAR) (%) 375 335 15.82
Minimum CAR required by regulator (%) 120 120 –
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Highlights of the Year 9

A remarkable profit after tax Rs. 9.5 Bn.
FINANCIAL Capital Regulatory
Life fund grew to Total assets reached Adequacy vs Minimum
CAPITAL
Ratio (CAR) CAR
Rs. 81.7 Bn. Rs. 106 Bn.
375% 120%
333 Employees
EMPLOYEE over 15 years
CAPITAL
of service out of
890 employees
INTELLECTUAL
People's life Insurance Brand of
CAPITAL the Year for 11th Consecutive Year
MANUFACTURED
Rs. 903 Mn. investment in Property,
CAPITAL Plant and Equipment in 2017
SOCIAL AND Rs. 6.6 Bn. Rs. 5.2 Bn. Rs. 75 Mn.
RELATIONSHIP Worth of net claims Profits retained in 2017 Increase in dividend
CAPITAL and benefits paid for future growth payout
10 Highlights of the Year PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Non-Financial Highlights
Indicator 2017 2016
Manufactured capital
Total number of branches 273 259
Investments in property, plant and equipment Rs. ’000 903,536 366,349
Intellectual capital
New products introduced 2 1
Investment in IT systems Rs. Mn. 75 23
Top of the mind recall % 46 53
Brand equity index 3.9 4.1
Customer capital
Number of new policies 126,838 143,622
Claims and benefits paid Rs. ’000 6,884,013 6,800,076
Number of claims paid over one million 353 444
Breaches of customer privacy – –
Non-compliance with laws and regulations – –
Business partner capital

Reinsurance expense Rs. ’000 422,217 373,829
Reinsurance claim recoveries Rs. ’000 197,033 148,394
Commission paid to agents Rs. ’000 1,720,414 1,645,363
Employee capital
Total workforce 890 910
Total number of new employees hired during the reporting period 54 68
Employee turnover during the period – (count) 78 88
Attrition of new hires (as a percentage of total new hires) % 15 20
Number of injuries – –
Percentage of employees receiving performance reviews % 100 100
Social and environmental capital

Electricity consumption KW 2,251,964 2,481,371
Fuel consumption within the Organisation litres 283,058 302,423
Water consumption units 28,584 34,724
Waidya hamuwa projects 13 14
School development projects 3 2
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION 11
MESSAGES

AND
MANAGEMENT
PROFILES
Message from the Chairman 12
Chief Executive Officer’s Review 16
Board of Directors 22
Corporate Management 30
Managers 34
Dynamic vision and bold choices, together

with a clear focus on long-term value creation
for our stakeholders, we continue to build a
robust organisation that our customers trust
and society value.
12
MESSAGE FROM
THE CHAIRMAN
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Message from the Chairman 13

It is also my pleasant duty to thank my fellow
Directors, who through their individual expertise
and disciplines have blended into a truly
professional team which ensures that the concept
of “Good Governance” is observed both in spirit
and in letter and at the same time stimulating the
attainment of the highest level of corporate values.
Our journey began in 1987 which means It is a responsibility now lying on our
that 2017 marks a memorable milestone shoulders which was handed over to us
Asking the customer
of 30 years of success, first as a division by our predecessors even as we will have
to “Know Your Life of Ceylinco Insurance PLC and since mid to, at some point of time, hand it over to
Insurer” we on our 2015, as a separate legal entity. During our successors.
part must “Know our entire history, success never became
a destination. It was a journey moving During this entire 30-year journey there
Our Customer”. from one success to another. During was only one leader whose integrity,
This is a long-term this period challenges were overcome, enthusiasm and determination set the
process and Keeping threats were subdued and attempts to standard for everyone else to follow.
usurp the leadership were thwarted. Our He set the goal each year and was
In Touch (KIT) is very Company moved. So now it is a time for uncompromising when any overture was
important. celebration. A time for rewarding. A time made to change it. Mr R Renganathan has
for recognition. to me personally and to the entire team at
Ceylinco Life Insurance been a role model.
Now that we have reached the 30th This makes it my privilege to serve as
milestone let us not be complacent. Chairman. Ceylinco Life is what it is today
Let us remember that it is not a due to the leadership of Mr Renganathan.
destination. It is only a way-side stop.
A stop, during which we will reflect as to
why we succeeded? And if at any point A commendable
we failed however temporarily, why we performance
failed? We will also look at the future and
“Success is a journey ask ourselves the question – what will be Details of performance, relevant figures
not a destination.” the scenario? Worst case or best case, we and facts can be found in this Integrated
will strategies. We will get re-energised. Annual Report and content has been made
Arthur Ashe
– Wimbledon Champion and author of the best We will be prepared, because it is a more descriptive and understandable with
seller “A Hard Road to Glory” continuous journey of success. diagrams and charts.
14 Message from the Chairman PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
However, I wish to refer to some of the long-term value of life insurance or to customer gets to know his Life Insurer and
highlights which have made 2017 a very put it conversely what they are depriving the Life Insurer gets to know its customer.
special year in keeping with the significance themselves of by not taking a life More importantly it is a relationship based
of the Company’s 30-year history. insurance policy. The problem is two-fold. on trust.
Firstly the adage that “The customer is
Ceylinco Life has for the 14th successive always right” has been disproved and Getting the concept of Life Insurance
year become the industry market discredited over the last few decades. entwined into the social fabric of society
leader recording an increase of 4.9% in When it comes to life insurance the should be the aim of the entire life
Gross Written Premium (GWP) totalling customer presumes to know but really insurance industry. In this regard, I am
Rs. 15.7 Bn.; the highest ever in the does not know what its true worth is. proud to mention that Ceylinco Life has
Company’s history. Sadly, the reality dawns when it is too taken and will continue to take the
late. Leading from this is the second lead role.
Company’s Life Fund which is the point namely that the selling process is
fastest growing in the industry reached really a consultative process which when I have always maintained that the selling
Rs. 81.7 Bn. This feat as yet unmatched effectively done ends with the customer of life insurance is not a mere business
in Sri Lanka was achieved in a span of wanting to buy a policy rather than being transaction. It is a social service, much like
30 years of operations. sold a policy. This consultative process education and healthcare.
calls for a high level of professionalism
Ceylinco Life continued to deliver increased for which our Company takes much time
value for its policyholders with unparalleled and effort in training the sales staff. The Awards and accolades
benefits such as the Avurudu Cash Bonus key to this area of consultancy is product While there is a separate section in this
and the exciting Family Savaris. The unique knowledge and the ability to explain the report which describes comprehensively
and innovative product portfolio caters to benefits and necessity of the product with the many awards and accolades won,
the specific long-term needs of customers in a very understandable manner. As as Chairman, it is my duty to congratulate
belonging to a variety of market segments. Albert Einstein said “If you cannot explain Mr R Renganathan for the unique honour
something simply it means that you have he has brought to the Company, to the
Company’s expanded branch network not understood it at all”. industry and indeed to the country by
spread across Sri Lanka has made Life being conferred the title of “Grandmaster”,
Insurance more accessible and more by the Foundation for the Advancement of
convenient. Leveraging on modern Strong customer
Life Insurance Around the World (FALIA).
technology, the sales force is equipped to relationships He is the only Sri Lankan to be conferred
reach a wider market, increase efficiency this title.
Our Company got it absolutely right when
and lower the cost of policy servicing.
“Know Your Life Insurer” was the recurring
message in last year’s Annual Report. It is I must also refer to the international
Ceylinco Life remained committed to recognition of “Best Life Insurance
a message which needs to be carried year
corporate social responsibility and to Company in Sri Lanka” awarded for the 4th
after year. It is a message which openly
integrating sound environmental, social consecutive year to Ceylinco Life Insurance
claims transparency, welcomes scrutiny
and governance practices into its business Limited, at the World Finance Global
and invites a close relationship. From
operations as reflected through the Insurance Awards Ceremony.
asking the customer to “Know Your Life
education and healthcare CSR projects for
Insurer” we on our part must “Know Our
the underserved areas in our land. As a former President of the Sri Lanka
Customer”. This is a long-term process and
Keeping In Touch (KIT) is very important. Institute of Marketing (SLIM) who
The decisive, sustainable “Green Projects” was on the Committee that initiated
During a long-term relationship there will
has significantly reduced Company’s carbon the National Sales Congress (NASCO)
be changes in the customer’s life style
footprint as well. Awards, it is with much pride that I
and socio-economic status-marriage,
parenthood, financial growth and an congratulate N L Fernando, K S Priyanthi,
Responsible selling increase in assets. All these means that T C G Rajapaksha, S Dharshan and
life insurance plan can be modified or A D U Kumara for winning salesmanship
One reason for the low penetration levels awards. You have brought honour to
new policies can be added on. Therefore,
of life insurance is that the majority our Company.
it is truly “A relationship for Life” as the
of people do not fully understand the
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Message from the Chairman 15
Opening of La Serena assistance, co-operation and goodwill, I thank each and every member of our

we as a Company would not be at the very staff for their sincere commitment to fulfil
Retirement Resort apex of the life insurance market. their responsibilities through the year.
Located on a beach front site at They have worked as a team and reaped
Uswetakeiyawa, La Serena is a set of First is the institution which directly the rewards of their sustained effort,
luxury chalets for active senior citizens. regulates our industry, Insurance specially the rewards given in celebration
There is a fully-equipped gymnasium Regulatory Commission of Sri Lanka of our 30th anniversary. Individually and
and swimming pool. Each chalet is self (IRCSL). Thank you to the Chairperson collectively, I am confident that they will
contained with modern equipment and Ms Indrani Sugathadasa, the Director also ensure that success is a journey and
facilities. It is a home away from home General Ms Damayanthi Fernando and the not a destination.
without the stress of domestic chores. rest of the Board for the services given.
The initial response has been very We as a company will offer our fullest And now I extend my sincere thanks to
positive. What is most encouraging are the co-operation regarding all regulatory our customers – the most important of our
numerous inquiries from Sri Lankans living matters and endeavour to maintain a stakeholders. As you get to know us better
overseas who wish to escape the winter cordial relationship. we in turn will get to know you better, and
season of their adopted country and relax for your sake we will enhance our passion
in the summer sunshine of Sri Lanka. To our Reinsurers who are internationally for excellence in customer service, product
recognised as being in the top most development and innovation.
rung-Swiss Re and Munich Re, I extend
Ceylinco Healthcare
a very special word of gratitude for the
Services Limited continuing close co-operation, assistance
This fully-owned subsidiary with four and loyalty given. As our valued business
specialised centres continues to provide partners ours will be “A Relationship for Life”.
state-of-the-art technology for the
treatment of Diabetes and Cancer. To Mr R Renganathan our Managing
The expertise of the internationally Director/CEO who for the last 30 years
has demonstrated his sterling leadership Godwin Perera
qualified medical team, the dedication
qualities. Taking the Company to the Chairman
and care provided by the para-medical
staff and the overall ambience of all top would have been challenging, but
maintaining that leadership is much more 30 March 2018
the units has attracted both local and
challenging, specially with ever increasing Colombo
overseas patients. Treatment for Diabetes
and Cancer are invariably long-term and competition. But Mr Renganathan has done
therefore “A Relationship for Life” holds true it. Therefore, I am confident that with his
to our Healthcare Services just as much as integrity, experience and commitment,
it holds true to life insurance. he will guide the Company from success
to success. He will be more determined
than ever to make success a journey and
Corporate governance not a destination.
The Company firmly believes that strong
governance is an important foundation for It is also my pleasant duty to thank
its sustainable performance. Significant my fellow Directors, who through their
progress was made during the year, individual expertise and disciplines have
upholding the highest standards of blended into a truly professional team
integrity, transparency and accountability in which ensures that the concept of “Good
all aspects of its operations. Governance” is observed both in spirit and
in letter and at the same time stimulating
the attainment of the highest level of
My thanks corporate values. And they too, through
In concluding this message, it is my very their professionalism will ensure that
pleasant duty to express my sincere success for our Company will not be a
gratitude to those without whose destination but a journey.
16
CHIEF EXECUTIVE
OFFICER’S REVIEW
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Chief Executive Officer’s Review 17

Our shareholder and policyholders are fully
cognisant of the fact that Ceylinco Life has a full
annual calendar of activities that range from
interactive promotions, network expansion,
product development, process improvement, staff
training, market expansion, community projects,
exploration of new business opportunities, and
motivation and recognition of staff.
Life is all about relationships. industry of Sri Lanka, and it gives me great
pleasure to present to you the highlights of
For the year reviewed Ask anyone about the secret to a stable the year in the pages that follow.
while reaffirming its and happy relationship and the answer
will be trust, reciprocated, and mutual Read on, secure in the knowledge that,
market leadership
understanding of, and respect for, the shareholder or policyholder, you already
in Sri Lanka’s life views and needs of those in it. “Know Your Life Insurer” not only through
insurance industry for this report, but through the Company’s
the 14th year running, This may sound rudimentary enough, deeds and contributions, over 79 years,
yet how many businesses can sustain going back to its trail-blazing predecessor
with premium income “A Relationship for Life” with its customers Ceylon Insurance Company, the first
of Rs. 15.7 Bn. as your Company does, and does so better Sri Lankan company to be registered
than anyone else in our industry? in 1939 under No. 06 of Companies
Ordinance 1939 introduced that year.
The importance of the million relationships
we nurture and enrich is something
we visit and revisit virtually 365 days
Performance
of the year, in our engagements with I am proud to report that your Company
policyholders and other stakeholders, in posted a net profit of Rs. 9.46 Bn. for the
“Relationships of new product development, streamlining year reviewed while reaffirming its market
trust depend on our of processes, training of staff, community leadership in Sri Lanka’s life insurance
welfare initiatives, and in the interactions, industry for the 14th year running, with
willingness to look in every district of Sri Lanka, of our over premium income of Rs. 15.7 Bn.
not only to our own 3,500-strong sales team.
interests, but also the Our net profit reflects a robust growth of
That is the secret behind our performance 207.5% and reached Rs. 9.46 Bn., which
interests of others.” in 2017 – the 14th successive year of includes a one-off surplus of Rs. 3.46 Bn.
– Peter Farquharson market leadership in the life insurance recognised as per the guidelines issued
18 Chief Executive Officer’s Review PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Total assets grew by a noteworthy 10% to

Rs. 106 Bn. in 2017 and the Company’s net assets
value per share stood at Rs. 412.94 at the end of
the year an improvement of Rs. 174.7 or 73.3%.
Earnings per share for the review period totalled
Rs. 189.3, an increase of Rs. 127.7 or 207.5%.
by the Insurance Regulatory Commission per month and paid out Rs. 6.7 Bn. in net insurance is “A Relationship for Life”.
of Sri Lanka (IRCSL). The Company claims and benefits to policyholders. The commitment this demands, in every
posted profit before tax of Rs. 9.8 Bn. an aspect of our operation and at every level
improvement of 161.9%. Total income, Our Life Fund recorded growth of 4.8% in the Company, is the foundation of our
comprising premium income and to reach Rs. 81.7 Bn. at the end of 2017, continuing leadership in the sector.
investment and other income, grew by 9% following a transfer of Rs. 7.3 Bn. to the
to Rs. 25.6 Bn. fund after the final shareholder transfer. Most importantly, our policyholders know
that profit is not the sole objective of
Investment and other income improved Total assets grew by a noteworthy 10% to the Company. Ceylinco Life has the most
by 17% to Rs. 10.3 Bn., underlining the Rs. 106 Bn. in 2017 and the Company’s net generous policyholder rewards programme
success of the investment strategies assets value per share stood at Rs. 412.94 in the industry and our commitments to
deployed by your Company. Ceylinco Life’s at the end of the year an improvement of community welfare are substantial and
investment portfolio grew by 9.5% to Rs. 174.7 or 73.3%. Earnings per share for long term. In that context, our financial
Rs. 92.2 Bn. as at 31 December 2017. the review period totalled Rs. 189.3, an performance assumes even greater
increase of Rs. 127.7 or 207.5%. significance, because it is not detrimental
At the end of the year under review, to any stakeholders.
the Ceylinco Life investment portfolio Our Capital Adequacy Ratio, a key indicator
comprised Government Securities (53%); of your Company’s financial strength and
Fixed Deposits (12%); Real Estate (7%); ability to meet its financial obligations in
Highlights of the year
Corporate Debt (26%) and Others (3%). respect of its insurance contracts stood at Our shareholder and policyholders are
These investments are made in conformity 375% at the end of 2017, more than 3 fully cognisant of the fact that Ceylinco
with the investment guidelines stipulated times the statutory requirement of 120%. Life has a full annual calendar of activities
under the Regulation of the Insurance that range from interactive promotions,
Industry Act No. 43 of 2000 as amended As I have noted in many previous reports network expansion, product development,
and are subject to regular monitoring by as well, our financial performance process improvement, staff training,
the Insurance Regulatory Commission of demonstrates the importance of market expansion, community projects,
Sri Lanka (IRCSL), formerly known as the concentrating on the core elements of exploration of new business opportunities,
Insurance Board of Sri Lanka (IBSL). the business: selling the most appropriate and motivation and recognition of staff.
and effective life insurance products, and The concluded year was no less busy than
In our core business of life insurance, prudent management of investments in any of its predecessors, but in the interest
we sold 126,838 new life policies in the the interest of all stakeholders. Everything of brevity, I will touch on just a few key
year reviewed at an average of 10,570 we do is inspired by our credo that life activities in this Report.
Branch network Degree Saver policy. We believe this new Support to the community

product was one of the contributors to our
We laid the foundation stones for two growth in the year reviewed. We believe that when it comes to
purpose-designed eco-friendly buildings corporate citizenship, actions must speak
to accommodate our branches in Chilaw louder than words, but in the interest of
and Kadawatha in 2017 and opened a new Policyholder engagement all-encompassing and complete disclosure,
branch in Hettipola in the Matale District. devote some space every year to report on
Your Company paid mammoth Rs. 3.8 Bn.
The new Chilaw branch was ceremonially our community initiatives across Sri Lanka.
in annual bonuses, the highest bonus
inaugurated in January 2018 as part of our One of these is the “Waidya Hamuwa” or
pay-out in the history of Ceylinco Life, to
30th anniversary celebrations. “Meet the doctor” programme comprising
some 300,000 policyholders in April and
of a series of free health camps held in
May 2017. This represented an increase
Your Company operates the largest towns and villages across the country,
of Rs. 900 Mn. or 31% over that of 2016.
network of 273 branches in Sri Lanka’s to provide free medical examinations by
Recipients of annual bonuses who were
life insurance industry, giving it a physical a team of travelling doctors, ophthalmic
under the age of 55 were also made a
presence in 142 cities, towns and villages technicians and nurses. Necessary
limited-time offer – an opportunity to
in every one of the island’s 25 districts. diagnostic tests such as random blood
New branches built on Company- invest in a “Platinum Plan” that combines sugar, ECG and blood pressure and optical
owned land are designed for optimal a new life cover and a fund, offering check-ups are provided free. In 2017,
use of natural light, are solar powered, policyholders extra protection through more than 3,000 people benefited from
minimise use of timber, are equipped a life cover as well as an attractive this programme, taking the number of
with the latest energy-efficient lighting savings fund. people assisted over nearly one and a half
and air conditioning systems and have decades, to approximately 138,000.
a facility for rainwater harvesting where Additionally, we helped enhance the
possible. Conforming to the “Go Green” “Avurudu” cheer of more than 15,000 Using the expertise and facilities
programme of Ceylinco Life, as many trees policyholders with cash bonuses totalling accumulated through the “Waidya
on the property as possible are preserved Rs. 92 Mn., taking the cumulative value Hamuwa” programme, your Company also
during construction. of cash bonuses paid to more than conducted three special medical camps
Rs. 500 Mn. for flood victims in the Southern Province,
to assist 356 residents of Akuressa, 368
New product development residents of Neluwa and 256 people
Our “Pranama” scholarships programme,
Promoting, facilitating and supporting which does not require elaboration, from Kamburupitiya. They were screened
education has always been a focus area for celebrated its 16th year in 2017 with the for possible infections and diseases
your Company in terms of its engagements presentation of another 160 scholarships which are common after such natural
with policyholders and the community. to high-achieving students and young disasters and were educated on how to
We have now taken this concern into our protect themselves from such infections
people, taking your Company’s cumulative
product portfolio with a new life policy in addition to being provided with the
investment in the future leaders of
launched in 2017. Combining the features medications they needed.
Sri Lanka to Rs. 120 Mn.
of a life insurance policy and a savings
scheme, “Degree Saver” is structured Our initiative to build classrooms for
to create an education fund based on The “Family Savari” programme, another
underprivileged schools resulted in the
an agreed premium and policy term, initiative with which our stakeholders are Kuda Oya Primary School in Wellawaya,
while offering life cover for the duration. familiar, marked its 10th edition in the year the Werodogama Primary School in
It is intended to help parents save for reviewed, and benefited another 2,260 Kariyamadiththa, Talawa and the Narawila
the higher education of their children, people from 565 policyholder families, Muslim Kanishta Vidyalaya in Koswatta
in recognition of the ever-escalating who were rewarded with fully-paid visits of Moneragala, Hambantota and Putlam
costs of overseas university education. to England, Dubai and Singapore, and a Districts respectively, each receiving a
Policyholders may also purchase additional day’s outing at the Leisure World theme classroom. These buildings were the 67th,
benefits such as cover for critical illness, park. It is noteworthy to mention that 68th and 69th classrooms projects donated
major surgery, hospitalisation and about 20,000 people, representing 4,000 by your Company.
accidental death or disability, expanding policyholder families have now enjoyed
the scope of the protection offered by the the Ceylinco Life Family Savari experience.
20 Chief Executive Officer’s Review PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Our net profit reflects a robust growth of 207.5%

and reached Rs. 9.46 Bn., which includes a one-off
surplus of Rs. 3.46 Bn. recognised as per the
guidelines issued by the Insurance Regulatory
Commission of Sri Lanka (IRCSL).
Responding to appeals from three other our status as the most popular insurer It is also my duty to record our
schools we donated furniture, clothing in the country for the 11th consecutive congratulations to Our Chief Digital Officer,
and equipment to St. Joseph’s College year. The SLIM-Nielsen Peoples Awards Mrs Upamalika Ratnayake who was
and Sri Koneswara Hindu College in recognise brands and personalities that named Chief Information Officer (CIO)
Trincomalee and to St. Cecilia’s Girls have made a profound impression in the of the Year at the first ever Women in IT
College, Batticaloa. minds of the people of Sri Lanka and are Awards (WITA) organised by the Women
one of the most awaited marketing events in IT Association in Sri Lanka in 2017. The
in the corporate calendar as the nominees award was presented after an assessment
Awards and recognition
and awardees are chosen by the people, of projects and achievements of exemplary
It gives me great pleasure to report that through a comprehensive nation-wide female CIOs who have demonstrated
Ceylinco Life was crowned the “Best Life research conducted by Nielsen Sri Lanka. innovation, leadership and IT excellence.
Insurer in Sri Lanka” by World Finance for Their achievements were judged on
the fourth consecutive year in 2017, on Stakeholders would also appreciate the industry best practices, alignment with
the basis of the Company’s performance fact that our 2016 Annual Report won organisational goals, leadership and
in 2016. This authoritative UK-based global three awards at the ARC Awards in Tokyo, ROI generation.
magazine scrutinises multiple aspects of one of the largest and most prestigious
operational and financial performance competitions in the world honouring I am pleased too, to report that five of
before awarding this coveted accolade. excellence in annual reports. Your Company our sales personnel won awards at the
The assessment for the award was by won the Silver award for “Financial Data” 2017 National Sales Congress (NASCO)
a judging panel representing 230 years and two Honours awards for “Written Text” Awards presented by the Sri Lanka Institute
of cumulative financial and business and “Interactive Annual Report” improving of Marketing (SLIM). The haul of awards
journalism. It covered the Company’s on its showing at the ARC Awards last included two awards in the “Frontliner”
underwriting processes and process year, when the Company won two awards. category and awards in the Sales Executive
efficiency; policy maintenance – the The ARC Awards are based on the values category and Territory Manager category,
process of reviewing clients’ policies, of creativity, clarity, effectiveness and all in the life insurance sector.
appropriateness of coverage and cost per excellence as represented by elements
policy; exposure to risk; customer retention
rate; time taken to settle claims; new
such as cover design, Chairman's letter, The policy and
interior design, clarity of written text,
customer acquisition rate and financial regulatory environment
photography, presentation of corporate
stability – Premium income, Market share, We welcome a move by the Department
information, expression of financial data
Life fund and Company profits. of Inland Revenue to tax the surplus
and how well the spirit of the Organisation
is communicated. from life insurance businesses effective
We were also adjudged the Peoples Life 1 April 2018, following lobbying by
Insurance Brand of the Year at the 2017 the industry against a proposal to tax
SLIM-Nielsen Peoples Awards, reaffirming
interest income less expenses incurred preferences and other useful information Healthcare

by the investment units of life insurance that can help organisations make more
companies. It is now proposed to tax the informed business decisions. Our fully-owned subsidiary Ceylinco
surplus transferred from the Life fund Healthcare Services Limited (CHSL)
to shareholders at 28%. However, the Your Company set up a Data Analytics continued to make satisfactory progress
industry as a whole is unhappy with a Department in 2017 under our Chief in the year reviewed. The Company
proposal to tax bonuses declared by life Digital Officer. Insights in trends and operates four centres of excellence, the
insurance companies at 14% for three patterns related to policyholders and data Ceylinco Healthcare Centre specialising in
years and at 28% thereafter. This would pertaining to Sales Officers are provided screening for cancer, the Ceylinco Radiation
make life insurance less attractive as to the management by this department Treatment Unit which introduced the Linear
an investment. It also conflicts with the for necessary action and for business Accelerator to Sri Lanka several years ago,
provision in the Inland Revenue Act which process Improvements. the Ceylinco TomoTherapy Centre, which
makes the proceeds of an insurance policy offers one of the most advanced forms of
tax exempt. We hope to continue to make We continue to explore opportunities 3-D image-guided radiation treatment in
representations to the authorities on to augment convenience in premium Sri Lanka and the Ceylinco Diabetes Centre.
this matter. payments for our policyholders as well.
One such example is our partnership New ventures –
We also commend the IRCSL for passing with the Postal Department to enable
the payment of premiums at about 4,000
Serene Resorts
a regulation preventing insurance
companies employing sales agents post offices across Sri Lanka. I am happy As reported last year, your Company’s
terminated by a competitor for fraud. This to report that already 10% of premium beachside property in Hendala was
is in the interest of the companies and the collections are via this new channel, and refurbished, re-furnished and soft-launched
industry as a whole. we hope to increase this figure to 20% in 2017 as Sri Lanka’s first retirement resort
by the end of 2018. This would result for active retirees. We are now
in saving time spent by sales agents in in the process of promoting the property
The future premium collection, enabling them to to prospective tenants and hope to look
Digitisation, we believe, is the way increase productivity. at select overseas markets too.
forward for most businesses, and life As explained in my review for 2016, this
insurance is no exception. Your Company Another area that we hope to focus groundbreaking project is intended to
intends to work towards ensuring that attention on in the year ahead is be the first in a series of investments in
every member of our sales force will developing Bancassurance. Ceylinco Life infrastructure and care for the elderly,
have a smartphone or a tab in the near was the pioneer of this channel, but we taking into consideration the needs of our
future. All the information, templates and feel it has not been tapped adequately. ageing population.
guidelines required by the sales team is More resources are to be allocated to
increase the channel’s contribution to our
already in the system, and means that
premium income.
Thank you
a sales agent can service the needs of a
potential customer or existing policyholder My sincere gratitude to my colleagues
without generating paper. Digitising Your Company is also looking at a model on the Board of Directors, the staff,
information and processes will make our where it can work with the Government to policyholder shareholder and regulators
sales agents more productive, will enhance provide the infrastructure and facilities that for their guidance and support in what has
their image as professionals, offer greater a large number of schools in our country been a busy year. I look forward to their
convenience and speed to customers and lack. Given the shortage of funds faced by continued assistance in 2018.
aid supervision. the authorities to fulfil these needs, we are
hopeful that the Government would see
We are also increasingly using Big Data the merit of using the funds at our disposal
to provide the needed infrastructure, and
Analytics to assess our products and
repay the Company with Government
processes. Big Data Analytics is the process
securities. R Renganathan
of examining large and varied data sets
Managing Director
to uncover hidden patterns, unknown
correlations, market trends, customer 30 March 2018
Colombo
22
BOARD
OF DIRECTORS
Name of Director Date of first appointment Date of last Length of service Board committees
as a Director with effect re-election as a Director (as at served on

of incorporation of the as a Director 31 December 2017)
segregated company
J Godwin Perera 10 April 2014 30 March 2017 3 years None

Chairman/Non-Executive
Director
R Renganathan 10 April 2014 N/A* 3 years Chairman –

Managing Director/ Board
Chief Executive Officer
Investment
Committee
E T L Ranasinghe 10 April 2014 N/A* 3 years Member –

Deputy Chief Executive Officer Board
Investment
Committee
P D M Cooray 10 April 2014 N/A* 3 years None

Executive Director/Head
of Human Resources and
Training
* Refer page 176

STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Board of Directors 23
Academic/professional Skill and Experience Other Current Appointments Previous Appointments

qualifications More details of number of Board seats, Executive and
Non-executive Directorships are given on page 177
Postgraduate Diploma in Honorary Member of SLIM Chairman – Ceylinco Insurance PLC Former President –
Marketing Sri Lanka Institute of
Conferred tittle of “Practicing Marketer” by
Marketing (SLIM).
Fellow of The Chartered SLIM in 1970.
Institute of Marketing, UK
Member of Sri Lanka Institute of Directors.
Fellow of The Institute of Joined Ceylinco Limited in 1983 and has Director – Ceylinco Insurance PLC
Chartered Accountants of had a long career in the Group's insurance Chairman – Ceylinco Healthcare
Sri Lanka business. He was responsible for setting Services Limited
up the Life Division of Ceylinco Insurance
Fellow of the Chartered Chairman – Serene Resorts Limited
after the Government of Sri Lanka
Institute of Management Director – Ceylinco Seraka Limited
permitted private insurers to enter the
Accountants, Sri Lanka
insurance industry in 1987.
He functioned as the MD/CEO of Ceylinco

Insurance PLC – Life Division until the
segregation became fully operational
in 2015.
MBA – Postgraduate Joined Ceylinco Limited as a Product Executive Director – Founder Member –
Institute of Management Manager in 1986. Counting 39 years in Ceylinco Insurance PLC Chartered Institute of
(PIM), University of sales, marketing and strategic planning, Director – Ceylinco Healthcare Marketing, Sri Lanka.
Sri Jayewardenepura he is one of the pioneer members who Services Limited Executive Committee
set up Ceylinco Insurance PLC.
Fellow of The Chartered Director – Serene Resorts Limited memberships
Institute of Marketing, UK Director – Ceylinco Seraka Limited including the post of
Senior Vice Chairman
of CIM.
Fellow of the Life Having joined Ceylinco Insurance as Director – Ceylinco Insurance PLC
Underwriters Training Council Assistant Manager – Training in 1987, Director – Serene Resorts Limited
LUTCF (USA) Mr Cooray played a key role in setting up
the sales force for Ceylinco's life insurance
A Chartered Insurance
business.
Agency Manager (CIAM)
Certified Manager of He’s an internationally reputed speaker
Financial Advisors (CMFA) on life insurance and the first South
Asian non-member to address the Million
Executive Diploma in
Dollar Round Table (MDRT); a prestigious
Business Administration,
international life insurance convention.
University of Colombo
24 Board of Directors PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
segregated company
Palitha Jayawardena 10 April 2014 N/A* 3 years Member –

Executive Director/CFO Board
Investment
Committee
Member –
RPTR
Committee
Ranga Abeynayake 10 April 2014 N/A* 3 years Member –

Executive Director/Deputy CFO Board
Investment
Committee
Herschel Gunawardena 10 April 2014 30 March 2017 3 years Chairman –

Non-Executive Director RPTR
Committee
Member –
Audit and
Remuneration
Committees
Gen C S Weerasooriya 10 April 2014 30 March 2017 3 years None

(Retired)
Non-Executive Director
* Refer page 176


Fellow of The Institute of Joined the Life Division of Ceylinco Insurance Director – Ceylinco Insurance PLC
Chartered Accountants PLC in 1990 as Chief Accountant (Branches) Director – Serene Resorts Limited
of Sri Lanka and counts over 25 years experience in the
finance industry. Director – Ceylinco Healthcare Services
Fellow of The Institute of Limited
Certified Management Director – Ceylinco Seraka Limited
MBA from the Postgraduate Joined the Life Division of Ceylinco Insurance Director – Citizens Development
Institute of Management PLC as the Financial Accountant in 1998 and Business Finance PLC
(PIM), University of has over 19 years of experience in finance. Director – Ceylinco Insurance PLC
Sri Jayewardenepura
Director – Serene Resorts Limited
Fellow of The Institute of
Chartered Accountants,
Sri Lanka
Fellow of The Institute of

Certified Management
Fellow of The Chartered He counts for over 45 years of experience Chairman – Citizens Development
Institute of Management in various industries including shipping, Business Finance PLC
Accountants, UK airline, finance, mining, and export and Director – Hunter & Company PLC
import trade.
Chartered Global Management Director – Lanka Canneries (Pvt)
Accountant Limited
Director – Heath & Co. (Ceylon) Limited
Director – Pelwatte Dairy Industries
Limited
Director – Ceylinco Insurance PLC
A graduate of the Pakistan Following a 37-year career in the military, Gen Director – Ceylinco Insurance PLC He was the High
Military Academy, Kakul and Weerasooriya was appointed Commander of (w.e.f. 2010) Commissioner to
the National Defence College the Sri Lanka Army in 1998. Pakistan and also was
in India Master's Degree in the Ambassador
Defence Studies He was conferred the prestigious Civil Award Extraordinary and
Sitar-e-Pakistan by the President of Pakistan Plenipotentiary for
in 2014. Sri Lanka to Tajikistan
and Kyrgyzstan.
segregated company
Rohan Senanayake 10 April 2014 30 March 2017 3 years Member – Risk,

Non-Executive Director RPTR, Board
Investment,
and
Remuneration
Committees
J A Setukavalar 10 April 2014 30 March 2017 3 years Chairman

Independent Non-Executive of the Audit
Director Committee
Prof Mohan de Silva 10 April 2014 None 3 years Chairman

Independent Non-Executive of the
Director Remuneration
Committee

Associate of The Chartered Serves as a member of the Investment Director – Kenanga Investment
Institute of Management Committee of the Company having Corporation Limited
Accountants, UK previously served Ceylinco Insurance Director – SMB Securities (Pvt) Limited
PLC from 1995 to 2009 in the field of
Fellow of The Certified investments. He has over 25 years Director – SMB Real Estate Limited
Management Accountants, experience in financial markets including Director – SMB Money Brokers (Pvt)
Sri Lanka insurance, stock broking, fund management, Limited and
and corporate finance. Director – K Seeds Investments (Pvt)
Limited
Fellow of The Institute of Mr Setukavalar has over 40 years of Director – A. Baur & Co. (Pvt) Limited
Chartered Accountants experience in auditing, accounting, and Director – Baurs Air Services Limited
of Sri Lanka finance.
Director – A. Baur & Company (Travel)
Fellow of The Chartered A recipient of scholarships awarded by the Limited
Institute of Management British Foreign and Commonwealth Office, Director – A. Baur Trading (Pvt) Limited
Accountants, UK, and Certified UK and the Colombo Plan Bureau, he has
Management Accountants, Director – Baurs Agri Exports (Pvt)
been trained at INSEAD – France, IBM – Limited
Sri Lanka; Rochester, USA and JICA – Japan.
Swiss Trading Group (Pvt) Limited
A Certified Global
Management Accountant; He also had worked for KPMG Colombo and Director – Swiss Hotel Management
and a Fellow of the Institute PricewaterhouseCoopers in Dubai. Academy (Pvt) Limited
of Certified Professional Director – Singer Finance (Lanka) PLC
Managers
Member of the Board of Governors
of the CMS schools in Sri Lanka and
is the current Chairman of its Finance
Committee.
Master's Degree in Surgery Temporary advisor to WHO-SEARO on Chairman – University Grants President – College of
from the University of Patient Safety. Commission of Sri Lanka. Surgeons of
Colombo, Fellow of the Sri Lanka
Royal College of Surgeons, Prof de Silva has served as a Civil Volunteer Senior Professor and Chair in Surgery.
Edinburgh Surgeon for the Sri Lanka Armed Forces Vice President –
and has received several accolades in Sri Lanka Medical
Honorary Fellow of the Asia recognition of his outstanding contributions. Association
Pacific Society of Digestive
Endoscopy and an Honorary Director-Education
Consultant Surgeon, Colombo of the College
South Teaching Hospital of Surgeons of
Sri Lanka and the
Former Dean of the
Faculty of Medical
Sciences, University of
Sri Jayewardenepura.
segregated company
Dr Gamini de Silva 10 April 2014 None 3 years Chairman of

Independent Non-Executive the Nomination
Director Committee
Jayantha 10 April 2014 None 3 years Member –

Wickramasinghe Risk and Audit
Independent Non-Executive Committees
Director
Sugath Caldera 10 April 2014 None 3 years None

Independent Non-Executive
Director
Ms A K Seneviratne 10 April 2014 None 3 years Chairperson –

Independent Non-Executive Risk Committee
Director

BDS (Sri Lanka) Dr de Silva is a Consultant Dental Surgeon Director – Intercom (Pvt) Limited Past President of the
with nearly 40 years experience. Sri Lanka Dental
Degree from the University of Association
Peradeniya FFDRCS (Ireland) in
Oral Surgery Past Chairman of the
Commission on Oral
Diseases Asia Pacific
Dental Association
Member of the Chartered He counts over 35 years experience in Chairman/Managing Director – CEO – Lanka
Institute of Logistics and Engineering and Information Technology. Linta Enterprises (PVt) Limited Logistics and
Transport Technologies Limited
(state owned)
Member – Board of
Management of the
Urban Development
Authority
Director – Information
and Communication
Technology Agency
(ICTA) of Sri Lanka
An active member of the Mr Caldera is a practitioner in the Civil

Bar Association of Sri Lanka, Courts in the areas of civil, corporate
Attorney-at-Law and commercial litigation together with
commercial arbitrations, fundamental rights,
Graduate of the Faculty of administrative law and constitutional law.
Law, University of Colombo
BSc Degree with specialisation Ms Seneviratne is an actuary with over 20 Director – Technical Activities of the
in Actuarial Mathematics years of experience, including 16 years International Actuarial Association
from Concordia University in the life insurance industry in Sri Lanka.
(Canada) the Canadian She had previously served as the in-house
Risk Management (CRM) actuary of the Life Division of Ceylinco
designation awarded by the Insurance PLC.
Global Risk Management
Institute (GRMI). Associate of
the Society of Actuaries (USA)
and the Canadian Institute of
Actuaries
30
CORPORATE
MANAGEMENT
Our talented leadership team employ their skills

and expertise to drive business success and build
our Organisation.
P A J Jayawardena Ms R M U K Ratnayake A H R Udayasiri

LUTCF (USA), CIAM, CMFA MSc (CompSc), MBCS, CITP, CISA (USA), MCS BSc (Cey), LUTCF (USA), CIAM, MBA (Colombo)
General Manager – Business Development General Manager/Chief Digital Officer Senior Deputy General Manager –
Business Development
T N Y Morseth E R S G S Hemachandra J P Abhayaratne

CMFA, CIAM, LUTCF (USA) MBA (Australia), Dip Mkt (UK), FCIM (UK), Chartered Marketer Dip Mgt, BBA (USA), MBA (UK)
Senior Deputy General Manager – TAKAFUL Senior Deputy General Manager – Marketing Senior Deputy General Manager – Operations
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION corporate management 31

M Thenuwara W A W C Wijesinghe H G A Sirisena
LUTCF (USA), CIAM LUTCF (USA), CIAM, MBA (AUS) FCII (UK), Chartered Insurer, MBA (India),
DMU (AMS)
Deputy General Manager – Bancassurance Deputy General Manager – Business Development
Deputy General Manager – Technical
S Kumarapperuma T D De Silva C B Herath

BSc (Hons), PG Dip Act Sci (UK), MBA (Colombo) BBA (Hons), ACCA, MBA (Colombo) BSc, MBA (Sri J), MBCS, PG Dip (Bus & Fin Admin)
Deputy General Manager – Actuarial Services Senior Assistant General Manager – Projects Senior Assistant General Manager –
ICT/CIO
M S J L B Weerakoon R M P Bandara T Vijayananth

Senior Assistant General Manager – LUTCF (USA), CIAM Senior Assistant General Manager –
Business Development Senior Assistant General Manager – Business Development
Business Development
P P D V Hemakumara L V Keragala D S Thilakarathne

CISA (USA), MBCS (UK), Dip Mgt (India), MBA (India), Dip Mkt (UK), Chartered Marketer, ACIM Assistant General Manager – Business Development
MCSSL (SL)
Assistant General Manager – Customer Relations
Assistant General Manager – ICT/Assistant Chief
Information Officer
32 corporate management PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
H A Suraweera J L N Jayawardena B S E M Perera

MBA (Colombo), BSc (Mkt Mgt) (Special), Chartered Marketer Assistant General Manager – Customer Services Senior Manager – Customer Services
Assistant General Manager – Agency Administration
P Silva R M S Wijeyesekera R D Vipulatheja

MBA (USA), AEIA (UK) MBA (India), MBCS (UK) MBA – Wales (UK), CIAM, CMFA, LUTC Fellow (USA),
MFA, NLP, Business Practitioner
Senior Manager – Administration Senior Manager – Systems
Senior Manager – Training
G A H Chandana B A Nandalal V M G Kariyawasam

BSc Mgt (Sp) (Hons), FCA, ACMA, FCAA CIAM, LUTCF (USA) MSc (IT), BSc (Hons), MIS, ACSA, PG Dip (IT), OCA
Senior Manager – Finance Senior Manager – Business Development Senior Manager – Database Administration
L G H A S Kumara P A C D Wijayasekara P U C Pathinagoda

ACII, AIII, LLB, Attorney-at-Law, Chartered Insurer FCA, MBA (Colombo) MBA in IT (Moratuwa), BSc (Colombo), CISA (USA), LICA
Senior Manager – Technical Senior Manager – Internal Audit Senior Manager – Information Systems Audit
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION corporate management 33

C R P Liyanage K I Weththasinghe M J N S A Jayatilake
Dip M (UK), BBDM (Aust), MBA (AUS) Attorney-at-Law & Notary Public, MBA (Colombo), BSc (Business Administration), PQHRM
Registered Company Secretary (IPM), AMIPM
Senior Manager – Group Insurance
Senior Manager – Legal Senior Manager – Human Resources
D M G L Alwis M H Y A Silva Ms A A T S A Weerakody

CFA (US), MBA (India), MSc (Actuarial Science), ACMA (UK), LUTCF (USA) BSc (Hons) Statistics Special (1st Class), MSc Act Mgt (UK),
CGMA, MCSI, AIB (SL), BSc Dip Actuarial Techniques (UK), CFI (UK)
Senior Manager – Business Development
Senior Manager – Portfolio Senior Manager – Actuarial Services
P Vincent W S Dabarera D H Canagasabey

BSc (Engineering), AMIE (SL) BSc Accounting & Financial Special (Hons), ACA, ACMA (UK), Chartered Marketer, Dip M, MCIM (UK)
CGMA (UK)
Senior Manager – Projects Senior Manager – Brand Development
Senior Manager – Finance
34
MANAGERS
S K N De Silva J S K Ratnayaka M R N L Fonseka

Pg Dip (Busi Fin & Admin), CBA Dip LIM, CIMA, CFMO AIII, ACII (UK), Chartered Insurer
Manager – Financial Services Manager – Business Development Manager – Operations
S P K Senadeera S P Mamaduwa M A C P Wijeratne

BSc (Engineering) Training Manager MCSSL, MBCS, Advanced Dip (CIMA), MBA (IT), BSc (IM)
PGD (W&C)
Manager – Projects
Manager – IT Projects
D A Wijewardena K M S N Karunanayake G K S Sriyananda

MSC (Comp Sc), BSc (Hons), MBCS, MCS ACII, Chartered Insurer, AIII BSc (Hons), AIII, ACII, Chartered Insurer
Manager – IT Projects Manager – Claims Manager – Operations
K Sumanthiran K L U Priyantha N K Subapanditha

Dip LIM, CIAM CIAM ACIM, CIAM
Manager – Business Development Manager – Business Development Manager – Business Development
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION managers 35

P P S Kalyaniwansa D R M T N D Bandara N T Senavirathne
CIAM, MFA CIAM Dip LIM CFMC LUTCF (USA), CIAM, Associate Trainer
Manager – Business Development Manager – Business Development Manager – Business Development
M T A Peiris A K D D C Perera T Nirojan

LUTCF (USA), CIAM, CMFA, MFA LUTCF (USA) Zonal Manager
Manager – Business Development Manager – Business Development
I B L Wijesinghe M N Abdeen D S Hettiarachchi

PGDBM, MBA, CIAM, BASP (University of Colombo) Dip LIM LUTC, AMTC, MSSAMTC, FMS, PMW – LIMRA
Zonal Manager Acting Zonal Manager Acting Zonal Manager
L P K Rupasiri B A K S M Dharmasena K A D R Menaka

BSc (Hons), AII (India), ACII (UK), Chartered Insurer MSc, IT, MBCS, CCNA ASA, BSc (Maths) Special, Dip in CMA
Manger – Operations Manager – ICT Manager – Actuarial
36 managers PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Regional Sales Managers
H M J Banda E H D J Shantha E B J I Kumara J M S Jayasundara M A S N Peter

Branch Head Branch Head Branch Head Branch Head Branch Head
S S Wettasinghe I M G D Jayasundara A R P S Amarakoon S A S Chandralal H H U S C Fernando

M L Joseph
Branch Head
Acting Regional Sales Managers
J A R S Jayasinghe S N Hettiarachchi S A A S Kumara
Assistant Regional Sales Managers

P D H Rasanga
Branch Head
Acting Assistant Regional Sales Managers
N Kiriwandeniya K M P D Chandradasa R P L Dammika S Dharshan D R J Silva
T J R Perera T V M Lakmal P Premnath W S R Fernando M P W Cooray
N L C Aruna Shantha R K Hettiarachchi M M R L Perera T Thayaseelan V M Ranthilake
K H A Kumara
Senior Branch Sales Managers
H L Munasinghege A P Perera S A S R Senanayaka W H Sarathchandra N Pushpaharan

R Mayuran
Branch Head
Corporate Sales
M Priyaviraj A I P Manjula W G T K Danapala K B A Thushara W A Ravindranath

LUTCF (USA) Senior Business Promotion Senior Business Promotion Business Promotion Manager Business Promotion Manager
Manager – Corporate Sales Manager Manager
W S Fernando H K B Ariyasinghe
Business Promotion Manager Business Promotion Manager
BUSINESS

MODEL
Organisational Overview 38
Operating Environment 42
Strategic Direction 57
Our Business Model 67
Stakeholders and Materiality 70
Our Business Model supports

our growth and defines the
activities we engage, the
relationships we nurture and
the outputs and outcomes we
aim to achieve to create value
for our stakeholders.
38
ORGANISATIONAL
OVERVIEW
About Ceylinco Life insurance. Giving effect to the mandatory our commitment to excellent service and
segregation introduced in terms of Section our expansive reach to meet the needs of
Insurance Limited 53 of the Regulation of Insurance Industry our broad customer base. Our customers
Our Company, Ceylinco Life Insurance (Amendment) Act No. 03 of 2011. Ceylinco are at the heart of what we do.
Limited (CLIL) is the market leader in Life Insurance Limited was incorporated on
Sri Lanka’s life insurance industry for 14 22 April 2014 and commenced operations Our strengths include our well-known
consecutive years, since 2004. We are in June 2015. The Company carries out strong brand with positive recognition
a fully-owned subsidiary of Ceylinco operations only in Sri Lanka. from customers, strong financial position
Insurance PLC (CIP) and commenced and wide distribution strategy. We
business in January 1988 as the Life There are now more than 800 employees are acknowledged as the benchmark
Division of CIP; a composite insurance and the largest network of agents and for innovation in the local insurance
company offering both life and general branches in the industry covering nearly industry for our work in product research
million lives with active life policies. We and development, customer service,
draw on our experience and expertise, professional development, and corporate
social responsibility.
Group structure
100%
CEYLINCO LIFE
INSURANCE
LIMITED
98.15% 99.45% 30.25%

5% Serene Resorts Ceylinco Healthcare Citizens Development
Limited Services Limited Business Finance PLC
Premium living standards Treatment of cancer Finance

for active senior individuals and diabetes company
Ceylinco Seraka
Limited
95%
Investment Advisory
Services
Subsidiary companies Associate company

STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION ORGANISATIONAL OVERVIEW 39

Subsidiary companies Associate company
Company name Serene Resorts Limited Ceylinco Seraka Limited Ceylinco Healthcare Services Limited Citizens Development Business
Finance PLC
Overview Makes investments in Investment advisory Specialised in the treatment A leading non-bank financial
retirement living and services of cancer and diabetes. institution, offering a broad
set up Sri Lanka’s first It is only cancer treatment range of financial services,
retirement resort in 2017. centre in Sri Lanka to offer promotes financial inclusion
Tomo Therapy; world’s most and financial empowerment
advanced radiation treatment in Sri Lanka.
for cancer.
Year of incorporation 1994 1997 2000 1995
Ceylinco Life's interest 98.15% 100% 99.45% 30.25%
Nature of business Premium living standards Investment advisory Healthcare services Financial services
for active senior individuals services
Financial period/ 31 December 31 December 31 December 31 March

Year-end
Profit/(Loss) after tax (0.8) 0.1 71 1,007

(Rs. Mn.)
Asset base (Rs. Mn.) 319 49 982 53,934
Our standing
Industry Strong An extensive Largest

leader balance sheet branch network sales force
14 years Rs. 81.7 Bn. 273 branches Over 3,500 sales

We are the industry leader We have the fastest We take pride in setting
consultants
amongst life insurance companies growing life fund in the up branch buildings in We employ the largest sales
in Sri Lanka since 2004. industry. company-owned property. force in the industry.
Attractive Community Wide product

value addition investment range
Growth in bonus Rs. 120 Mn. Pranama Protection-based

payments 31% YoY scholarships in 2017 solutions
We maintain a sector leading growth in bonus We have one of the largest portfolios of We offer products which are
payments and industry-leading policyholder community-related activities in Sri Lanka's unique, flexible, and tailor-made.
reward campaigns. corporate sector.
40 ORGANISATIONAL OVERVIEW PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
testament of our financial stability and

Life fund and assets

Our Life Fund crossed Rs. 80 Bn. sustainability. In addition we have the
(Rs. Bn.) (%)
in April 2017, making it the fastest- largest number of “Green Branches” in the
growing Life Fund in the local 125 25 industry, contributing towards reducing the
industry. A reflection of our financial environmental footprint.
stability and strength, this milestone 100 20
was achieved in a little more than 29
Number of branches (No.)
years of operation which is a feat as
75 15
yet unmatched in Sri Lanka. 275
50 10 270
Leader in the industry

25 5
We retained our position as the market 265
leader in Sri Lanka’s life insurance industry

for the 14th consecutive year. This is a feat 0 0 260
as yet unmatched in any other regional 2013 2014 2015 2016 2017
nation, where market leadership is held by
international insurance companies. World Total assets (Rs. Bn.) Life fund (Rs. Bn.) 255
Finance, the respected UK-based magazine, Asset growth (%) Life fund growth (%)
reaffirmed Ceylinco Life as the “Best Life
250
Insurance Company in Sri Lanka” for the
2015 2016 2017
fourth consecutive year. This is a strong Profit before and after tax (Rs. Bn.)
endorsement of the strength and stability
10
of our Company. Our strategy of focusing
on the core message of life insurance and Number of new green branches (No.)
on the importance of trust when entering 8
5
into “A Relationship for Life” has clearly
been successful over the years.
6
4
Financial stability 4
3
With strong growth in new business and
noteworthy returns on investments, we
2
steadily grew our total income whilst 2
generating sustainable profits. Our Life
Fund crossed Rs. 80 Bn. in April 2017, 0
1
making it the fastest-growing Life Fund 2016 2017
in the local industry. A reflection of our Profit before tax Profit after tax
financial stability and strength, this 0
milestone was achieved in a little more 2013 2014 2015 2016 2017
than 29 years of operation which is a feat
as yet unmatched in Sri Lanka. In tandem, Largest distribution
we have grown our bottom line sustainably network
over the years. Through professional Professional sales force
We have the largest geographical reach
management of the investment fund, the We have the highest life insurance sales
investment income for the year recorded in the life insurance industry of a network
of 273 branches. Our reach spans across in Sri Lanka and employ the largest sales
a steady increase of 21% YoY. A measure
the island’s 25 Districts and with a physical team in Sri Lanka’s life insurance industry,
ability to meet our financial obligations in
presence in almost all the cities, town numbering around 3,600 sales consultants.
respect of our insurance contracts is our
and villages. We are the only insurer in They are highly acclaimed for their
Capital Adequacy Ratio, which stood at
Sri Lanka to set up branch buildings in professionalism and integrity. This year,
375% at the end of 2017, more than three
Company-owned land, which a strong five of our sales personnel won awards at
times the statutory requirement of 120%.
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION ORGANISATIONAL OVERVIEW 41
the 2017 National Sales Congress (NASCO) to disburse another 160 scholarships to Commitment to

Awards presented by the Sri Lanka Institute high-achieving students and young people.
of Marketing (SLIM). Family Savari is one of the largest customer
society and well-being
promotions in Sri Lanka’s life insurance We have one of the largest portfolios of
industry which has benefited more than community-related activities in Sri Lanka's
Number of NASCO award winners (No.)
20,000 policyholders to date. corporate sector focusing predominantly on
6 the poorest segments of the population.
As Sri Lanka's largest life insurer, our
5 Number of Pranama scholarships (No.)
involvement with the community is for the
162 long-term and the benefits devolve across
4 racial, religious, and geographic boundaries.
These projects focused on the education,
160
3 health, and quality of life of residents of
underprivileged areas in Sri Lanka.
2 158
Whilst being the first Life Insurer in Sri Lanka
1
to open eco-friendly branch buildings,
156
our commitment to environmental
0
sustainability continued with the adoption
2015 2016 2017 154 on environmental-friendly initiatives.
These include, opening up green branches,
installing rain water harvesting systems in
152
branches, planting-and maintaining trees
Product range 2015 2016 2017
under the “Go Green” drive.
We understand the importance of
identifying customers and selling
strategically. Therefore, we place great
emphasis on the importance of needs
Scale of operations
analysis before we develop a policy 2017 2016 Growth
proposal for a customer, because we
know that a business relationship can only Our strength
be sustained if the product satisfies the Gross written premium (Rs. Mn.) 15,765 15,028 4.9%
needs of the customer. Accordingly, we
Net policyholder benefits (Rs. Mn.) 6,687 6,651 0.5%
launch tailor-made to our wide customer
base aligned to our unique positioning Investment and other income (Rs. Mn.) 10,281 8,780 17.1%
“A Relationship for Life”. These innovative
Our stability
products cater to each stage of their life
and offer a “unique” proposition based on Life insurance fund (Rs. Mn.) 81,724 77,925 4.9%
needs that arise at each life stage. Investments (Rs. Mn.) 92,264 84,221 9.6%
Profit before tax (Rs. Mn.) 9,808 3,744 161.97%

Unique value addition Total assets (Rs. Mn.) 106,094 96,458 9.9%
Everything we do is centred on adding Total number of employees 890 910 (20)

value to our policyholders, and unstinted Total number of sales consultants 3,696 3,915 (219)
generosity is a key word at Ceylinco Life.
Total number of branches 273 259 14
We paid the highest bonus payout in the
history of our Company in 2017, reflecting Value of Pranama scholarships 120 100 20%
a sector-leading growth 31% YoY. Also we Number of schools
invested Rs. 10 Mn. marking Ceylinco Life’s development projects 3 2 1
investment in the future leaders of Sri Lanka
Policyholder bonus (Rs. Bn.) 3.8 2.9 31%
Rs. 120 Mn. up to date in future leaders
42
OPERATING
ENVIRONMENT
Global economic growth the label of being the fastest growing rates are expected to moderate gradually
emerging economy. The Indian economy, from 6.8% in 2017 to 6.6% in 2018 and
The International Monetary Fund (IMF) which grew at 7.1% in 2016, slowed in further to 6.4% 2019.
in its World Economic Outlook Update in 2017 due to demonetisation in November
January 2018 stated that year 2017 saw 2016 and GST rollout on 1 July 2017. Emerging and developing Asia will
the best global growth in seven years. continue to account for over half of world
The growth in some 120 economies which Capital flows to emerging economies growth and is expected to grow at around
accounted for three quarters of world GDP 6.5% over 2018/19, broadly the same
have remained resilient through the third
picked up year-on-year in 2017. This was pace as in 2017. India is projected to grow
quarter of 2017, with continued strength in
the broadest synchronised global growth at 7.4% of its gross domestic product (GDP)
non-resident portfolio inflows.
upsurge since 2010. in 2018 as against China’s 6.8%, making
it the fastest growing economy among
Accordingly, global economic growth is Economic growth (%)
emerging economies.
projected to grow at 3.7% in 2017; 0.5 5
percentage point higher than the 3.2% Inflation in the advanced economies is
growth in 2016. Strong growth was projected to increase by 1.9% in 2018 and
4
evident in world trade in the last few 2.1% in 2019 while that of emerging market
months of 2017, supported by a pickup in economies will grow at 4.5% in 2018 and
investment, particularly among advanced 3
expected to moderate 4.3% in 2019.
economies, and increased manufacturing
output in Asia.
2
Global life insurance
industry
Advanced economies 1
Emerging markets continued to provide
Advanced economies, especially Germany, growth opportunities for insurers with
Japan, Korea, and the United States grew 0 emerging Asia once again becoming the
at high rate than the projected rated in World Advanced Emerging
Economies Economies
main driver of overall emerging market
Q3-2017.
premium growth.
2016 2017* 2018* 2019*
On account of the rise in fuel prices,

* Projected Life premium growth is estimated to have
headline inflation increased in advanced
Source: IMF World Economic Outlook increased to 3% in 2017 compared to
economies, but wage and core-price January 2018 Update 2% in 2016. This has been supported by
inflation remained weak. The increase
robust performance of savings products in
in fuel prices was due to the increase in
Future outlook emerging markets, particularly in Asia, with
crude oil prices between August 2017 and
China accounting for most of the recent
mid December 2017. The stronger momentum experienced in acceleration.
2017 is expected to carry into 2018 and
As of early January 2018, the U.S. dollar 2019, with global growth revised up to Real premium growth in different regions
and the euro remain close to their August 3.9% for both years. The revision reflects has been mixed in 2017
2017 level in real effective terms. The
increased global growth momentum zzNorth America – premiums are
Japanese yen has depreciated by 5% on
and the expected impact of the recently estimated to have declined by 2%
widening interest differentials, while the
approved U.S. tax policy changes.
Sterling has appreciated by close to 4% as zzWestern Europe – life premium income
the Bank of England raised interest rates in is estimated to have stagnated after
The growth forecast for U.S. has been
November 2017 and as expectations of a adjusting for inflation
raised to 2.7% in 2018 and to 2.5% in
Brexit deal rose. zzDeveloped Asia-Pacific – life premium
2019. For Euro area, the growth rates have
been revised upwards, by 0.3 percentage income is estimated to have risen
modestly by+1%
Emerging and developing points, reflecting stronger demand.
zzAdvanced markets – premiums remain
economies The growth forecast for emerging and sluggish, down an estimated 0.2%;
China’s GDP growth rate of 6.8% was developed economies remain more or less an improvement from the 2% decline
ahead of India’s at 6.7%, giving the former unchanged. However, for China, the growth in 2016
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION OPERATING ENVIRONMENT 43

Real premium income growth for traditional life insurance (%)
20
15
10
-5
World North Western Developed Emerging
America Europe Asia-Pacific markets
2015 2016 2017E 2018F 2019F
Note: Figure provides real growth rates for life business alone (ie. Excluding medical expense insurance).
Source: Swiss Re Institute
E: Estimated F: Forecasted
Profitability Future outlook

Overall profitability as measured by Return Premiums are forecast to increase by close
on Equity (ROE) remains under pressure on to 4% annually over the next two years.
account of the low interest rates generating Profitability remains challenging given
lower investment income. ROE for the life the global low interest rate environment,
industry was 8.1% at end of 2016, down which is putting pressure on investment
from 10.8% in 2015. The strain on rates of returns and existing long-duration books
return was apparent across regions; North of business.
America, ROE was 7.9%, in Europe 9.1%
and in Asia 7.5% in 2016. Emerging markets will remain the major
driver Life premium growth to be around
Life insurer’s Return on Equity (ROE) (%) 10% in 2018 and 2019. This positive
outlook is underpinned by stable, robust
20
economic growth; expanding populations;
urbanisation; and, a rising middle class.
16 Premiums in advanced markets are
expected to grow by a more modest
1-2% after adjusting for inflation and
12
developed Asia-Pacific are forecasted to
grow premiums by 2-3% in 2018 and 2019
8 respectively.
4 Increase in inflation implies a rise in

the general price levels. This leads
0 to a decrease in disposable income,
North Europe Asia Weighted which will lower the demand for life
America average
insurance products.
2007 2010 2013 2016
Source: Swiss Re Institute

44 OPERATING ENVIRONMENT PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Sri Lanka
Key economic performance indicators impact on Ceylinco Life

Key indicator Movement Impact insurance industry/Ceylinco Life Level of
impact
GDP (1H of 2017 Vs 1H 2016) Increased from 3.7% to 3.9% YoY Increased demand for life insurance products Low
Inflation – NCPI based headline Increased to 8.6% Increase in inflation implies a rise in the general price
as at September 2017 levels. This leads to a decrease in disposable income,
which will lower the demand for life insurance products. Low
Exchange Rates Sri Lankan Rupees depreciated by 2.2% Depreciation in LKR against foreign currencies cause an
(September 2017) against U.S. Dollar YoY increase in the value of foreign currency payments in
local currency. Low
Interest rates Both standing lending rate and standing Increased investment income
deposit rate increased by 25 basis points Moderate
GDP Growth GDP growth rate (%)
The economic growth in the first half of 6.0

2017 was 3.9% compared to 3.7% in the
preceding comparable period. 4.8
The industrial and the services activities 3.6

recorded higher growth rates of 5.8% and
4.0% respectively. Affected by adverse 2.4
weather, agricultural activities reported
a negative growth rate of 3.1% in the 1.2
first half of 2017. The spillover effects of
adverse weather conditions tricked down 0
to other sectors of the economy through Q1 Q2 1H Q3 Q4 Q1 Q2 1H Q3
2016 2016 2016 2016 2016 2017 2017 2017 2017
increased import expenditure amid rising
international commodity prices, higher Source: CBSL
prices of domestic food supplies and cost
incurred on relief measures.
Industry growth rates (%)
10.0
7.5
5.0
2.5
-2.5
-5.0
-7.5
-10.0
Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3
2016 2016 2016 2016 2016 2017 2017 2017
Agriculture, Forestry and Fishing Industries Services
Source: CBSL
Inflation External sector The improved external environment

facilitated the Central Bank to implement
Consumer price inflation remained higher Continuing the upward trend since March a more market based exchange rate policy
than the desired levels up to mid 2017 2017, cumulative export earnings grew in 2017. Overall, the Sri Lankan rupee
as a result of the combined effect of at a healthy rate of 7.6% YoY as at end depreciated by 2.2% against the US dollar
tax revisions, domestic weather related August 2017. This was largely on account during the year up to end September 2017.
disturbances and rising international of the gradual recovery in key export
commodity prices. Headline inflation, markets, increased commodity prices in
Overall balance and (USD Mn.)
measured using the National Consumer international markets, the restoration of
gross official reserves
Price Index (NCPI, 2013=100) as well as the GSP+ concessions coupled with a few
the Colombo Consumer Price Index (CCPI, other key contributory factors. 10,000
2013=100) remained high during the first

quarter of 2017. Import expenditure also grew substantially 8,000
by 9.6% YoY for the first eight months of

NCPI based headline inflation increased the year, mainly due to increase in imports 6,000
to 8.6 % YoY, in September 2017, mainly of fuel, gold and rice.
reflecting the high food inflation while CCPI 4,000
based headline inflation also increased to
7.1% YoY. 2,000
Inflation (%) 0
10
-2,000
2013 2014 2015 2016 Sep.
8
2017
Overall balance
6
Gross official reserves
4
Source: CBSL
2
Fiscal policy
0
There were notable developments in the
fiscal sector in the first half of 2017 as
-2
Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. reflected in the revenue, as a percentage
2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 of estimated GDP, increasing to 9% during
Headline Core the first eight months of 2017 from 8.2%
in the corresponding period of 2016.
Source: CBSL
Although the trade deficit widened to
USD 6,186 Mn. during the first eight The Central Bank continued to maintain
months of 2017, the Balance of Payment a tight monetary policy stance by raising
(BOP) registered an overall surplus of policy interest rates by 25 basis points in
USD 2,027 Mn. by end September 2017. March 2017. The Standing Deposit Facility
This resulted from the higher inflows to the Rate (SDFR) and the Standing Lending
Colombo Stock Exchange (CSE), increased Facility Rate (SLFR) of the Central Bank
foreign direct investments (FDI) and stood at 7.25% and 8.75%, respectively,
proceeds from the eleventh International since then.
Sovereign Bond (ISB) and the foreign
currency term financing facility obtained by Responding to the monetary policy stance
the Government. The gross official reserves and the resultant high market interest
of Sri Lanka also swelled to USD 7.3 Bn. as rates, the growth of credit extended to the
at end September 2017 from USD 6.0 Bn. private sector decelerated during the first
at end 2016. eight months of 2017.
knowledge-based, highly competitive,

Movement of selected market interest rates (%)

social-market economy.
20
Therefore, effective and sustainable

16 long-term policy measures would be
implemented for accessing foreign
markets through exploiting trade and
12
investment opportunities. In particular, the
Central Bank seeks avenues to capitalise
8 opportunities created by the revival of
global growth supported by synchronised
economic expansion in Europe, Japan and
4
the US for the first time since the Global
Financial Crisis. Sri Lanka is also steadily
0 progressing towards an effective Flexible
Sep. Dec. Mar Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Inflation Targeting (FIT) framework to
2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017
ensure price stability by targeting an
AWLR Monthly AWPR AWFDR AWDR
inflation range of 4-6 % in 2018.
Source: CBSL
Non-debt creating FDI flows is expected
to increase from 2018 onwards with
Social ranking Sri Lanka’s economy is transitioning
the commencement of the Hambantota
from being predominantly rural-based
Sri Lanka made significant progress in Industrial Zone and the continuation of
to urbanised economy-oriented around
human development and is ranked among the Colombo Port City project. With the
manufacturing and services. Whilst
the highest in South Asia and compare expected increase in FDIs the Government
carrying out fiscal reforms, improving
favourably with those in middle-income will adopt foreign exchange intervention
public financial management, increasing
countries in social indicators. The national policies which are consistent with a flexible
public and private investments, addressing
poverty headcount ratio declined from exchange rate regime and supportive
infrastructure constraints and improving
15.3% in 2006/07 to 6.7% in 2012/13. of improving foreign exchange market
competitiveness, the Government launched
However, unlike other South Asian functionality. Accordingly, maintaining
its Vision 2025 on 4 September 2017 to
countries, Sri Lanka is having one of the a competitive exchange rate will be an
strengthen democracy and reconciliation,
oldest and fasted ageing populations in important objective of the Central Bank.
inclusive and equitable growth and ensure
the world.
good governance.
In addition, promoting a dynamic
Population aged 65 and above (%) and resilient financial sector to lower
10 Future outlook vulnerabilities in the financial system
remains a key priority for achieving
The real economic growth during 2017 is objectives in relation to growth,
8 projected to be between 4.0 – 4.5%, on employment and incomes in the future.
a YoY basis, in comparison to the 4.4%
expansion in 2016. Growth is envisaged
6
to improve thereafter with the support Sri Lanka’s life insurance
of conducive macroeconomic policies industry
4 and the realisation of growth promotion
strategies of the Government, and Sri Lanka’s life insurance industry has
the resultant increase in domestic and been growing at a higher rate compared
2
foreign investments. to the economic growth of Sri Lanka.
In 2016 Life insurance industry grew by
18% YoY compared to the GDP growth of
0 The Government’s Vision 2025 unveils
4.4%. However, Sri Lanka’s life insurance
Sri Lanka India Bangladesh Pakistan Nepal the future policy direction of Sri Lanka,
penetration remains low, compared to its
Source: Sri Lanka paradigm shift in population,
envisioning to transform Sri Lanka
regional peers.
W Indralal De Silva, World Bank into a hub of the Indian Ocean, with a
Ceylinco Life remained the market leader

Long-term insurance industry (%) Long-term insurance industry (Rs. Bn.)
for the 14th consecutive year with a share
growth Vs GDP growth Gross written premium
Quarterly comparison of 23.7% in 2016. The market leadership
25
position has been retained by Ceylinco Life
60
for the nine months ended September 2017.
20
48 Market share of long-term
insurance industry – Q3 2017
15
36
22%
10
24
5
78%
12
0
2013 2014 2015 2016 0
Life insurance asset growth Life insurance Q1 Q2 Q3 Ceylinco Life Others
GDP growth 2016 2017
GDP growth Source: Insurance Regulatory Commission of
Sri Lanka
Source: Insurance Regulatory Commission of Source: Insurance Regulatory Commission of
Sri Lanka and CBSL Sri Lanka
The top five players in the long-term Claims incurred

Gross written premium (GWP) insurance industry in terms of GWP in 2016 Total claims increased by 8% to
Long-term insurance industry performed
were Ceylinco Life, Sri Lanka Insurance Rs. 22,622 Mn. in 2016, of which maturity
commendably in 2016, generating a
Corporation (SLIC), AIA Life, Union Life, and benefits represented the largest share
GWP of Rs. 63 Bn. in 2016, reflecting a
Softlogic Life. Collectively, they accounted of claims amounting to 56% of total.
18% growth YoY, compared to Rs. 54 Bn.
for 80% of market share, whilst the rest of The rest of the claims comprised death
recorded in 2015. In terms of quarterly
performance, GWP of Rs. 52 Bn. for the the 10 players in the industry accounted for benefits, surrenders, disability benefits
third quarter of 2017 was an increase of the balance 20% of market share in 2016. and other benefits.
12% compared to Rs. 46 Bn. recorded in
the third quarter of 2016.
Long-term insurance industry (Rs. Bn.) Claims incurred (Rs. Mn.)
gross written premium

14,000
75
11,200
60
8,400
45
5,600
30
2,800
15
0
0 2012 2013 2014 2015 (a) 2016 (b)
2013 2014 2015 2016 Q3
2017 Disability benefits Death Surrenders Maturity benefits Others
Source: Insurance Regulatory Commission of Sri Lanka Source: Insurance Regulatory Commission of Sri Lanka
Total assets A larger chunk of total assets were Except for one long-term insurance
invested in government debt securities company, all other long-term insurers had
Total assets increased by 10% YoY to followed by corporate debts and equities. maintained a TAC more than the minimum
Rs. 345,675 Mn. as at 31 December 2016 requirement of Rs. 500 Mn., as at
compared to Rs. 312,713 Mn. recorded as The long-term insurance industry has 31 December 2016. Further, all insurance
at 31 December 2015. complied with the requirement of the companies had satisfied the minimum CAR
Insurance Regulatory Commission of requirement of 120% as at 31 December
Sri Lanka that a minimum of 30% of the 2016 and all except one insurer maintained
investment of the long-term Insurance a CAR of over 160%.
fund should be in government securities.
Long-term Insurance Industry – Concentration of Assets (%)

Profit before tax
50 Profit before tax of long-term insurance
companies amounted to Rs. 5.1 Bn. for
40 the third quarter of 2017, marginally lower
than Rs. 5.2 Bn. recorded in the previous
30
comparable period of 2016.
20
Profit before tax (Rs. Mn.)
10 6,000
0 4,800
Government Equities Investment in Corporate Deposits Land and Unit Trusts Mortgage Policy
Debt Securities Subsidiaries Debt Buildings Loans Loans
and Associates
3,600
2016 2017
Source: Insurance Regulatory Commission of Sri Lanka 2,400
Investment income increased by 18% YoY Number of policies 1,200

to Rs. 27,652 Mn. in 2016. Investment
Yield has shown an improving trend The number of policies issued in 2016
for each of the three quarters in 2017, declined by 11% YoY to 662,701 compared 0
compared to 2016 as shown below: to 740,511 policies in 2015. However, Q1 Q2 Q3
there has been a gradual increase in the 2016 2017
total life insurance policies in force over the

Long-term insurance industry (%) Source: Insurance Regulatory Commission of Sri Lanka
investment yield ratio last five years, reflecting the continuous
expansion of the long-term insurance
12.5
business in Sri Lanka. National vision and
10.0
the life insurance sector
The number of new life insurance policies
The national vision is to establish
lapsed recorded an increase of 3.76%
7.5 Sri Lanka’s insurance industry to be a pillar
to 96,502 in 2016 compared to 93,008
of the financial sector, as Sri Lanka moves
in 2015.
5.0
forward to be a middle income country.
Solvency position Several measures have been implemented

2.5
to increase the operational efficiency
Under RBC Rules 2015, the capital and strengthen the balance sheets of
0 adequacy requirements are to maintain insurance companies to meet customer
Q1 Q2 Q3 a minimum Total Available Capital (TAC) requirements. In addition, steps have been
2016 2017 of Rs. 500 Mn. and a Capital Adequacy taken to increase insurance penetration in
Ratio (CAR) of 120%. Sri Lanka as well.
Source: Insurance Regulatory Commission of Sri Lanka

“As a life insurer, we have a broader understanding of our
sensitivity to changes in these external factors. Sustainability of
our business is largely impacted by macroeconomic conditions,
performance of financial markets, changes in regulations of the
Insurance Regulatory Commission of Sri Lanka (IRCSL) and other
competitive factors. Being a local life insurer, our operations and
financial performance, is heavily dependent on Sri Lanka’s
economic conditions”
Future outlook
Sri Lanka’s long-term insurance industry
has a high growth potential due to a Threat
of new life
combination of factors. Sri Lanka is
insurers
significantly underpenetrated compared
to its peer nations giving strong potential Moderate
for growth. Sri Lanka also has one of
the fastest ageing populations in the
world which creates more demand for life
insurance products. Also the higher trend Bargaining Rivalry among Bargaining
of urbanisation and low unemployment power of existing Life power of
suppliers Insurers Policyholders
levels in Sri Lanka increases the demand
for life insurance products. Moderate Moderate Low
Industry attractiveness
and competitiveness Threat
of substitutes
Understanding the competitiveness of
our business environment is imperative Low
to formulate effective strategies for
organisational growth and profitability.
Therefore, we constantly monitor and
evaluate the dynamics of the life insurance
industry to ascertain the factors influencing
industry attractiveness. Using Michael
Porter’s Five Forces Model we have
assessed the competitiveness of Sri Lanka’s
life insurance industry. Based on the
analysis, Sri Lanka’s life insurance industry
has a high growth potential.
Force Description Strength of the force
Rivalry among There is a positive correlation between demand for life insurance and disposable income Moderate
existing life insurers and aging population.
Demand for life insurance increases in tandem with the rise in people’s disposable income
and increasing aging population.
Life insurance penetration in Sri Lanka remains low (2016 – 0.54% of GDP) compared
to regional peers. Therefore, even though competition is high, there’s high potential for
market growth. There is untapped market to be penetrated and high exit barriers for
existing players in the industry due to stringent regulations.
Threat of new life There are moderate entry barriers in the industry. The IRCSL has imposed stringent Moderate
insurers requirements for the registration of new life insurance companies such as the imposing of
the minimum capital requirement of Rs. 500 Mn. These regulatory requirements deter new
players entering the industry.
It is also not easy for a new entrant to compete with the established players in the industry
and acquire specialised staff such as actuaries and underwriters. Despite these deterrents,
a few financially stable companies are entering the industry and the industry is being
disrupted by information technology as well.
Although new entrants are attracted by the increased demand created by the rising
ageing population of Sri Lanka, the life insurance market is comparatively small. This too
deters new entrants.
Threat of substitutes There are only a few substitutes for life insurance products such as pension plans and Low
savings plans offered by other financial institutions. These are not considered as direct
substitutes and as they do not feature substantial life insurance elements.
Bargaining power of Re-insurers and actuaries have a high bargaining power as many are international Moderate
suppliers companies and the volume of business with Sri Lankan clients is relatively small. Their
expertise and know-how is also unique.
Other vendors and service providers have low bargaining power as a life insurer can shift
from one supplier to another with ease.
Bargaining power of The industry largely serves individual policyholders who have significantly low bargaining Low
policyholders power.
High switching costs, such as surrender penalties discourage customers from switching to
other life insurers.
Regulatory environment subordinate regulations issued. IRCSL has

adopted several regulatory measures to
Overview increase transparency and safeguard the
interests of life insurance policyholders.
Insurance companies are regulated by
the Insurance Regulatory Commission of The Regulation of Insurance Industry
Sri Lanka (IRCSL) through Regulation of (Amendment) Act No. 23 of 2017
Insurance Industry Act No. 43 of 2000 and amended the name of the regulatory
amendments thereto, coupled with the body to "Insurance Regulatory Commission
of Sri Lanka" (formerly Insurance Board A set of guidelines on complaints handling create a negative profitability impact to

of Sri Lanka). This Amendment Act has by insurers and brokers was issued in life insurers.
granted exemptions to insurers from being October 2016 with the objective of
listed on the Stock Exchange. According to ensuring that processes are in place, for
the Amendment Act, if a local subsidiary timely and fair handling of complaints by
Risks and opportunities
insurance company is held by a company insurers and brokers. In addition, the IBSL, Scanning the external environment for risks
that is listed on a stock exchange licensed under its overall objective of safeguarding and opportunities and executing effective
under the Securities and Exchange the interests of policyholders, inquires into strategies to mitigate risks and capitalise
Commission of Sri Lanka Act No. 36 of policyholders’ grievances in connection on the opportunities is an integral aspect
1987, such local subsidiary insurance with insurance claims pertaining to of strategic management at Ceylinco Life.
company shall be exempted from being insurance policies.
listed on the Colombo Stock Exchange.
Risks and challenges
New Inland Revenue Significant social, technological,
Risk based capital
Act No. 24 of 2017 economic, and environmental forces are
and capital adequacy reshaping the needs and expectations
The new Inland Revenue Act No. 24 of
requirement 2017 passed by the Parliament of Sri Lanka
of insurance customers, as well as the
business environment in which insurance
Risk Based Capital (RBC) rules compel on 7 September 2017 becomes operative
providers operate.
companies to become financially secure with effect from 1 April 2018. Under the
and more liquid. The minimum stated Act, several corporate tax and dividend
As a life insurer, we have a broader
capital is Rs. 500 Mn. tax-related changes pertaining to life
understanding of our sensitivity to changes
insurance industry have been approved.
in these external factors. Sustainability
Guidelines on investments of our business is largely impacted by
Under the existing Income Tax Law macroeconomic conditions, performance
These guidelines issued by the IRCSL set of section 92 of the Inland Revenue of financial markets, changes in regulations
out the minimum policies that need to Act No. 10 of 2006, the profits of a life of the IRCSL and other competitive factors.
be observed in governance of investment insurance company deem for income Being a local life insurer, our operations
management, management of investment tax are calculated by deducting the and financial performance,
portfolios and associated risks. A key management expenses such as admin is heavily dependent on Sri Lanka’s
change is the requirement for the Board to expenses, agents’ commission and economic conditions. Shown below are
establish an Investment Committee which finance cost from the investment income. external factors that posed risks to our
may include Independent Directors, Principal However, under the new law, the taxable Company in 2017, as well as their potential
Officer and Chief Investment Officer. The profit of a life insurer will include the impact and mitigating actions taken by
new guidelines aim to institute effective “surplus attributable to shareholders”, us. For a comprehensive overview of our
and efficient governance of investment in addition to the excess of investment enterprise risk management, refer to
activities of an insurance company. income over the expenses incurred in the pages 158 to 163.
production of such income of shareholders
resulting in a higher taxable profit and
Regulatory guidelines thereby a higher tax expense. Moreover,
issued by IRCSL bonus declared to policyholders will also
be subject to income tax at the rate of
IRCSL has directed life insurance companies
14% for 3 years and at 28% thereafter.
to grant policyholders a cooling-off
period (free look period) of 21 days to
examine the terms and conditions of the Also restriction on deduction of losses
policy documents. This is to provide the (35% of statutory income) from life
policyholder an opportunity to terminate insurance businesses has also been
the policy during the free look period removed by the new Act and can now be
and the insurer is liable to refund the claimed in full, but can be carried forward
initial deposits or premium paid by the only to six years instead of indefinite
prospective policyholder. period previously. These amendments
Risks/Challenge Impact on the Company Our response
Economic Volatility in interest rates affect the Affects the Company’s profits and pose We adopt prudent assumptions in
demand for life insurance products challenges to projecting the long-term forecasting and implement investment
and investment income earned. returns of the Company which is done strategies that optimise returns with
for 10 to 15 years. minimal risk. We do this by investing in
real estate, government securities, bank
savings and corporate debt. We do not
invest in the Stock Market.
Maintain a well diversified investment

portfolio.
Social Changes in demography and We need to offer more retirement Invested in developing customer-agent
consumer needs disrupt the benefit and medical related insurance relationships to build trust and increases
industry solutions to cater to the increasing aging cross-selling and up-selling.
population and urbanisation.
Effecting continuous improvements to
Being active in InsurTech to discover our systems, processes, and products.
emerging coverage needs and risks that
Actively monitoring new trends and
require new insurance products and
changes in consumer demands by
services is also imperative.
setting up a data analytics unit and by
conducting a brand health study through
an independent research agency.
Invest in La Serena, a retirement resort

at Uswetakeiyawa.
Technological Keeping abreast with changes We need to cater to an increasingly Conduct regular information system
in technology, cyber attacks and sophisticated customer base who are audits, maintenance, and system
data security. technologically savvy. updates.
Also new technologies pose threats to Maintain a disaster recovery site.

information security.
Leverage on technology to drive product
innovation and customer convenience.
Legal/ Impact of regulatory changes on High cost of compliance and limited Regular consultations with our in-house
Regulatory financial reporting, operations, expert knowledge on regulatory legal officers.
and the business overall. changes.
Conducting regular compliance audits.
Provide training to our employees on

regulatory aspects.
Opportunities

Opportunity Description Impact Ceylinco Life response
Low insurance Sri Lankan life insurance Develop products to

Life premium as a percentage of GDP
penetration industry remains reach the young and
3.75 underpenetrated rural customers by
compared to its offering affordable,
3.00
regional peers who tailor-made solutions
have comparable GDP which are conveniently
per capita. accessible.
2.25
Promote inclusion
through product
1.50 diversification and
innovation.
0.75
Invest in branch
expansion and increase
0 the number of insurance
Sri Lanka Vietnam Indonesia Philippines India Malaysia Thailand agents.
Source: Swiss Re sigma No. 3/2016 Leverage on technology

to improve reaching
untapped segments.
Urbanisation Sri Lanka is expected to Developing customised

Urban population as a percentage of total population
see rapid urbanisation life insurance solutions
18.5 with annual growth targeting urban
rate of 3.3% over next customer segments.
18.4
15 years. This gives an
impetus for the industry
growth as the need
18.3 to have life insurance
coverage increases.
18.2 Also the boom in the
housing market and
18.1 low unemployment
rate is also poised
well for urban living,
18.0
creating an opportunity
2012 2013 2014 2015 2016
for life industry growth.
Source: World Bank
Rapid growth Sri Lanka’s population Taking into consideration

Rapid growth in ageing population (%)
in ageing is one of the oldest the needs of our ageing
population 40 and fastest ageing in population, develop
the world with total retirement resorts and
32
population at the age assisted care homes.
of 65+, surpassing
most of the South
24 Asian regional peers.
By 2041 it is expected
16
to increase up to 18%.
People are expected to
set aside more money
8
for health risk that
they would potentially
0 expose to.
2000 2020 2040 2060 2080 2100
60 – 69 70 – 79 80 +
Source: World Bank, “Sri Lanka – Addressing the Needs of an

Ageing Population – 2008”
Increased deaths Non-communicable Launch new health-based

Increased deaths due to
due to non- diseases (NCDs) have products in the health
Non-communicable diseases
communicable Number GDP per
shown an increasing industry space, related to
diseases of Deaths Capita trend, with 71% of our core business of life
(’000) (USD)
annual deaths being insurance.
12 4,800 attributed to chronic
Continue to expand
NCDs. Compared to
the operations and
10 4,000 the past, people have
healthcare services
become more aware of
offered by the four
8 3,200 the risks of NCDs and
centres of excellence
are looking for life/
of Ceylinco Healthcare
6 2,400 health covers.
Services Limited.
4 1,600
2 800
0 0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*
Cancer Heart diseases Diabetes GDP per capita
Source: Health Ministry and the World Bank


Mobile phone The mobile phone Increasingly partner

Mobile phone penetration
penetration penetration has been with mobile network
(Mn.) (%)
high (107%). Hence, operators to use their
25 125
there’s more potential platforms to conveniently
to conveniently approach a large
20 100 reach more and new pool of mobile phone
customers with the subscribers.
development in IT and
15 75 Reinforce the
mobile technology.
Customer Relationship
Management (CRM) unit
10 50
to improve customer
reach.
5 25
Launch more mobile
payment methods and
0 0 SMS notifications.
2010 2011 2012 2013 2014 2015
Population (Mn.) Mobile phones (Mn.) Penetration (%)
Source: CBSL Socio-economic Data – 2016
Opportunity to Introduced the Degree

Opportunity to support tertiary education (No.)
support tertiary Saver Plan which has
education 300,000 an education fund and
a comprehensive life
240,000 insurance plan to ensure
a child’s higher studies.
180,000
120,000
60,000
0
2011 2012 2013 2014 2015
No. of candidates sitting for A/L Exam
No. of admissions to State Universities
Source: CBSL Socio-economic Data – 2016

SWOT analysis
We also carry out a SWOT analysis to

analyse the strengths and weaknesses,
and the opportunities and threats faced
by our Organisation. This helps us to focus
on our strengths, minimise threats, and
take the greatest possible advantage of
opportunities available to us.
zzVisionary leadership
zz14 years of market leadership
zzFinancial strength and stability
Strengths zzIndustry expertise
zzProfessional sales team
zzProfessionally-qualified staff
Weaknesses zzSales force turnover
zzLow market penetration

zzUrbanisation
Opportunities zzRapid growth in aging population

zzMobile phone penetration
zzOpportunity to support tertiary education
zzNew entrants
zzVolatility in financial markets
Threats
zzAd hoc changes in legislation
zzPolitical instability
STRATEGIC DIRECTION 57
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION

In 2017, we continued to build a sustainable and
stronger organisation, maintaining our leadership
position in the industry whilst delivering increased
value to all our stakeholders.
Delivering sustainable value
Determine Develop Build Manage

position strategy the plan performance
Insights from Vision Strategic priorities Performance

industry and market Mission Key performance measurement
analysis indicators Reviews
Values
Stakeholder insights Goals Training
Core competences
SWOT analysis (short-term, Monitoring
Strategy medium-term and
Objectives long-term)
Forecasts Resources
In 2017, we continued to build a organisation, comprising the heads of managing risks within acceptable tolerance
sustainable and stronger organisation, departments, headed by the Managing levels. Thereafter, the departmental heads
maintaining our leadership position in the Director/CEO of the Company. decide on the departmental objectives,
industry whilst delivering increased value the action plans and KPIs, aligned to
to all our stakeholders. Clear and solid The steps of our strategic planning process the overall corporate objective of the
progress was made on each of our six involves, determining our position in the Company. Short-term goals are set in line
strategic priorities during the year which industry through stakeholder insights and with the medium and long-term goals and
consisted of defined Key Performance market analysis and by conducting a SWOT communicated to stakeholders. A progress
Indicators (KPIs) and a set of target value analysis of our Company. The corporate review meeting is convened at least every
drivers to be achieved each year. strategy and objectives are formulated two months, to ascertain progress, KPI
aligned to the corporate vision and achievement, and to take apt measures.
Our strategic planning process is mission, based on our core competencies
comprehensive and is driven by the and strengths. It also involves mitigating
Strategic Planning Committee of the threats, capitalising on opportunities and
58 STRATEGIC DIRECTION PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Short, medium and long-term goals of the Company

Shown below are the goals of our Organisation for each capital:
Financial Capital
Short-term Medium-term Long-term

goals 2018 goals goals
zzIncrease GWP by 15% zzIncrease GWP by 15%. zzRetain market leadership in the
zzAchieve a profit after tax zzMaintain a healthy profit after tax life insurance industry whilst
of Rs. 6.5 Bn. growth of 8% maintaining a healthy and
zzMaintain an Investment yield sustainable profit growth
zzMeet the regulatory minimum
above 7% zzSustainable growth of the Life Fund
Capital Adequacy Ratio (CAR)
zzConsistently meet the regulatory whilst providing the best-in-industry
zzLife Fund of Rs. 90 Bn.
minimum CAR customer benefits
zzGrow the Life Fund to Rs. 100 Bn. in
the next three years
Strategies
Market Need based product Development of Prudent investment Develop need-based Prudent investment
penetration development other channels of management by products management
distribution such as investing in high
Bancassurance quality investment
products
KPIs
GWP growth PAT growth Total assets GWP generated from Capital Adequacy Ratio Life Fund growth
other channels
Employee Capital

zzIncrease the training hours by 10% zzMaintain employee retention rate zzMaintain a competent and loyal
zzExtend leadership training to the above 90% workforce with integrity who makes
second tier of management zzProvide enhanced employee a significant contribution to the
benefits growth of the Company
Strategies
Create a unique, Provide improved Provide the best work- Promote a continuous Provide comprehensive
challenging and retirement benefits life fit learning environment training
rewarding environment
KPIs
Average service Retention ratio Employee turnover ratio Training hour per Investment in training per
period employee employee
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION STRATEGIC DIRECTION 59

Social and Relationship Capital – Customers

zzContinue with Family Savari promotions zzImprove customer loyalty and zzContinue to establish healthy, long-
zzReducing the time taken for settling inquiry per customer satisfaction term customer relationship through
customer by 10% zzGrow customer base by 5% an excellent customer experience
zzIncrease customer experience zzMaintain customer complaints as
zzStrengthen distribution channels a percentage of active policies
zzConduct customer satisfaction surveys regularly below 5%
Strategies
Promote “A Relationship Ensure a stable financial position Develop and maintain an Promote a customer centric culture
for Life” with customers for customers exceptional product offering
KPIs
LIMRA Average length of customer Claims and benefits paid No. of complaints as a percentage of
relationship customer base
Social and Relationship Capital – Investors

zzImprove Net Assets Per Share (NAPS) zzAchieve a consistent and sustainable zzIncrease value delivered to investors
by 12% growth in EPS and DPS
zzIncrease earnings per share (EPS) by 8%
zzIncrease dividend per share (DPS) by 10%
Strategies
Prudent investment management Improve governance systems and transparency Operation of a sound risk management system
KPIs
Increase in EPS Increase in DPS Increase in NAPS
Social and Relationship Capital – Sales Agents


zzIncrease the MDRT/High Flyer Club qualifiers by 10% zzDevelop exceptional sales professionals who are loyal to the Company
zzIncrease minimum hours of Continuous Professional zzEmpowering entire sales force with latest ICT technologies
Development (CDP) per agent by 10%
zzReduce agent turnover
Strategies
Creating a unique, challenging, Develop sales agents as ambassadors Inculcate a training culture to develop
and rewarding environment of life insurance trainers from within the sales force
KPIs
Number of MDRT/High Flyers Club qualifiers Hall of Fame qualifiers Size of the training budget Training hours per sales agent
Social and Relationship Capital – Society
Short- term Medium-term Long-term

zzConduct 12 Waidya Hamuwa clinics zzImprove the quality of health in Sri Lanka by making
zzConduct 5 school development projects meaningful investments in the health sector
Strategies
Make investments to develop health and education in Sri Lanka Create positive impacts on the society by granting
Pranama Scholarships
KPIs
Corporate Social Responsibility Number of Waidya Hamuwa Number of government Donations made through the
budget clinics conducted hospitals developed Cancer Fund
Manufactured Capital

zzConstruction of two new buildings zzExpansion of our distribution regions zzTake the message of protection to
zzPurchasing of two new blocks of land by 10 more regions every Sri Lanka island-wide with our
expansive network of branches
Strategies
Expand our geographical presence Leverage on Information Technology
KPIs
Number of branches opened Investment in Information Technology Investment in furniture and fittings
Natural Capital

zzReduce fuel consumption by 2% zzPromote and invest in green zzSetting a standard in the industry
zzReduce electricity consumption initiatives that contribute towards to implement green initiatives to
by 5% reduced carbon footprint and contribute towards environmental
dependence on natural resources sustainability
zzReduce paper consumption by 5%
over the next three years
zzReduce greenhouse emissions by 5%
Strategies
Align business model to the Green Policy of the Company Process re-engineering to reduce carbon footprint
KPIs
Reduction in fuel Reduction Increase in solar Reduction in paper Increase in recycled Increase in water
consumption in electricity energy units consumption e-waste recycled
consumption
Intellectual Capital

zzImproved our LMD ranking by 2 zzMaintain brand equity at 4 zzContinuous enhancement of our
positions zzEnhance our brand reputation brand positioning and brand
reputation whilst nurturing a
zzNurture a knowledge culture zzEnhance the expertise and
knowledge based culture
zzTechnology development knowledge of our staff
zzKeep pace with digitalisation and
zzContinuous improvement in
offer increased value to customers
Information Technology and
processes to increase productivity
and efficiency of our workforce
Strategies
Offer protection Continuous Invest in process Extend IT related Digitalising of Invest in state-of-
based life insurance knowledge improvement training to our processes the-art information
solutions to development of our workforce systems
customers workforce
KPIs
Improvement in top Brand value Improvement in Training hours per Number of new Investment in
of the mind recall brand rankings employee systems introduced Information
Technology
Our strategic priorities We aim to do this by delivering industry- Staying ahead of the pack
leading, innovative protection-based

Our strategy addresses sustainable growth solutions and outstanding service to our We have been the market leader in
and our enduring strategic aim is to customers, by providing engaging and Sri Lanka’s life insurance industry for 14
demonstrate the values and performance rewarding work for employees, generating consecutive years since 2004. Adjudged
that make Ceylinco Life Insurance the sustainable growth and returns for our Sri Lanka’s Best Life Insurer in 2017 for the
Company that provides “A Relationship shareholders and delivering increased fourth consecutive year by World Finance,
for Life” for customers, employees, value to other stakeholders. These aims we have close to a million lives covered by
shareholders, business partners and are underpinned by the six strategic active policies. Compared to regional peers
other stakeholders. priorities which frame our decision-making in Asia, Sri Lanka is the only country where
and enable us gauge progress over market leadership of the life insurance
the long-term. The priorities are industry is held by a local insurance
detailed below: company. This has been a tremendous
feat for Ceylinco Life for 14 consecutive
years. In other regional nations, the market
leadership position is held by multinational
insurance companies.
Staying ahead
of the pack Our goal is to maintain this position.
We aim to do this by being benchmarked
for innovation in the local insurance
industry for product research and
Strengthening development, customer service,
relationships and professional development, and corporate
collaborations
social responsibility.
Championing
Environmental
These aims are underpinned by the
Sustainability six strategic priorities which frame
and Corporate our decision-making and enable us
Citizenship gauge progress over the long-term.
Technology
development
Reaping the
result of smart
investing
Investing
in people

Value driver Overview Key risks KPIs
Exceptional We offer a broad range of protection-based Volatility in interest rates Growth in Gross Written Premium
product portfolio insurance solutions through our sales team and and tax regulations
Number of new products launched
develop innovative value-added solutions to meet
Demographic transition
evolving needs of different customer segments. Number of new policies issued
Our solutions are tailor-made and flexible and cater Customer evaluations
Increase in customer base
to diverse customer requirements.
Competitors deviating
Growth of the Life Fund
Unmatched We build long-term customer relationships based from core insurance
customer on trust and loyalty and deliver exceptional business Growth in investment income
experience customer value. We also extend a dedicated and Growth in profit after tax
professional service to every customer through
our full-time sales force and continuously enhance Improvement in brand ranking
customer convenience. We also nurture a customer- Capital adequacy ratio
centric work culture in the organisation.
Market share growth
Growing our Maintain the growth momentum of our Life Fund
Life Fund which is the fastest growing Fund in the industry.
This is a strong reflection of the financial strength
and stability of our Organisation.
Capital adequacy Continue to enhance our capital adequacy level

by implementing prudent investment strategies.
This is an indication of the stability, strength,
and confidence of our Organisation to meet the
policyholder benefits.
Increasing There is untapped potential in Sri Lanka’s life

market share insurance industry with life insurance penetration
at just 13%. We will use our expertise, large sales
force, and our wide branch network to increase
market penetration, especially in the rural areas.
We will continue to offer innovative tailor-made life
insurance solutions to meet customer requirements
and also launch new products by understanding
demographics and lifestyle trends in Sri Lanka.
Developing our Continue to enhance our brand value and

brand brand equity.
Investing in people
Our employees are critical to our Organisation's success. Therefore, we invest in nurturing a winning team of professionals to underpin our
commitment to delivering consistent service excellence and high standards of ethical and legal compliance. We recruit, develop and deploy
the best people in the industry. Whilst every department is headed by a qualified and experienced professional, a culture of continuous
learning is promoted by providing regular training to our employees. We also promote a healthy work-life balance.
We have an exceptional sales force in the industry. Our goal is to recruit, train and retain the best by investing in training and development
programmes.
Training and Investing in the professional development Unethical poaching of our sales agents Training hours per employee
development of our employees by offering a wide Dearth of competent talent in the Training hours per sales agent
range of training and career development industry Employee satisfaction score
programmes. Maintaining high ethical standards Employee attrition rate
among sales consultants Average service period
Work-life balance Promote a healthy work-life balance
in the Organisation. MDRT/High Flyers Club qualifiers
Hall of fame qualifiers
Strengthening relationships and collaborations

We build and nurture relationships for life, which is our forte. These relationships which are founded on trust, transparency and integrity
extend to our key stakeholders and to every individual and corporate whom we work with.
Caring for We continually strive to build best client relationships throughout the Average length of customer
policyholders customer value chain. From customised policies to prompt payment of relationships
claims and benefits to creating a culture where “customer comes first”, Number of new policyholders
we retain the trust and loyalty of our
Value of bonuses paid
policyholders.
Number of customer complaints
Collaboration with We maintain excellent professional relationships with our suppliers, per average policy
stakeholders regulators, reinsurers, and actuaries.
Reaping results of smart investing

We ensure secure, smooth and steady returns through prudent investment of the long-term Insurance Fund, whilst abiding by the relevant
guidelines issued by the Regulation of the Insurance Industry Act No. 43 of 2000 as amended and subject to regular monitoring by the
Insurance Regulatory Commission of Sri Lanka (IRCSL).
Prudent The Board Investment Committee formulates Volatility in interest rates and tax Increase in investment income
investments investment strategies which maximise regulations Investment income as a
returns whilst keeping risks at minimal level. percentage of total revenue
Volatile macroeconomic environment
High quality We maintain an investment portfolio of the Growth in investment portfolio
Ad hoc implementation of policies without
investment highest quality comprising of government
proper understanding of the life insurance
portfolio securities, fixed deposits, real estate,
industry
corporate debt and other.
Technology development

Invest in state-of-the-art information systems to support our business operations and drive productivity and efficiency in
the Organisations. We also take apt measures to enhance the reliability and security of the IT systems through proactive maintenance and
upgrades. Data security and privacy is given high importance as well.
Investment in We continually upgrade our IT systems and The risk of data loss or unauthorised Number of new systems
Information implement new systems to enhance our access causing a security issue, data or implemented
Technology operations. In particular, our sales agents systems abuse, cyber attack, or denial of Number of sales agents enabled
are equipped with necessary smart devices service to systems. with IT
and given comprehensive training on IT.
Number of hours of IT related
training per sales agent
Championing environmental sustainability and corporate citizenship

We are committed to enhance the lives of the communities around us. Focusing on health, we aim to develop healthy communities that
make a productive output to our economy. We also aim to create opportunities for higher learning and sustainable employment for the
next generation by developing education infrastructure in Sri Lanka. Additionally, we take great effort to preserve the environment by
implementing green concepts that reduce carbon footprint, and conserve energy and natural resources.
Focus on We have been developing health and education infrastructure Number of medical clinics conducted
community health of our nation. We will continue to uplift community health Number of schools developed
and education and provide better educational facilities to underdeveloped
Hospitals developed
schools in rural areas through the Waidya Hamuwa medical
clinics, schools development project, and the Cancer Fund. Cancer Fund
Carbon footprint
Caring for the Under the ‘Go Green’ initiatives we have implemented
environment measures to drive environmental sustainability including the Number of kilograms of paper recycled
tree planting project, setting up green branches, rainwater Number of kilograms of e-waste recycled
harvesting, water recycling, and waste management. Number of trees saved
Number of Green Branches
Strategic priority Target for 2017 Actual for 2017 Status Objective for 2018
Staying ahead of the pack

Gross written premium Rs. 18.7 Bn. Achieved GWP of Rs.15.7 Bn. 84% Rs. 17.8 Bn. (Company budget)
achieved
Capital Adequacy Ratio (CAR) Meet minimum CAR was 375% as at end 2017 Achieved Continue to meet the minimum
Internal – 200% Regulatory – 120% requirement CAR Ratio
Profit after tax Rs. 3.5 Bn. Profit after tax was Rs. 9.4 Bn. Achieved Profit after tax was Rs. 6.5 Bn.
Growth in Life Fund 10% growth Life Fund grew by 4.8% after the Achieved Grow the Life Fund by 10%
one-off surplus transfer. Excluding the
one-off surplus transfer, Life Fund was
Rs. 85.1 Bn. as at end 2017, which
reflects a 9.3% growth
Investing in people
Employee turnover ratio Below 15% 8.64% Achieved Below 15%
Employee service period Average of 8 13 years Achieved Average of 8 years
years
Strategic priority Target for 2017 Actual for 2017 Status Objective for 2018
Employee training budget Rs. 8 Mn. Spent Rs. 8 Mn. on local training and Achieved Rs. 9 Mn. for local training
Rs. 14 Mn. on foreign training Rs. 15 Mn. for foreign training
MDRT/High Flyers Club qualifiers 30 qualifiers 44 MDRT qualifiers and 59 High Flyers Achieved 10% increase in the number of
Club qualifiers qualifiers
Sales staff training budget Rs. 25 Mn. Spent Rs. 26 Mn. on sales staff training Achieved Rs. 30 Mn.
Relationships and collaboration
Average length of customer relationships Average Average length of customer relationship – Maintain length of customer
10-15 years 15 years relationship at an average of
10-15 years
Customer complaints as a percentage of Below 5% 0.24% Achieved Maintain customer complaints
average policies as a percentage of active
policies below 3%
Net benefits and claims Rs. 7 Bn. Rs. 6.6 Bn. worth of benefits and 96% Rs. 9 Bn.
claims paid Achieved
Reaping the result of
smart investing
Investment income Rs. 8 Bn. Rs. 10.2 Bn. investment income earned Achieved Rs. 9 Bn.
Investment portfolio growth 15% Investments grew by 9.5% 63% Maintain investment portfolio
Achieved growth at 15%
Technology development
Percentage of sales officers enabled with IT 40% of sales 60% of sales officers are IT enabled Achieved Enabling 70% of sales officers
officers Achieved with IT
Championing environmental sustainability
and corporate citizenship
Reduction in fuel consumption By 10% Fuel consumption was reduced by 6% 63% Reduce fuel consumption by
over 2016 Achieved 10%
School development projects 4 schools 3 schools renovated 75% School development projects – 5
Achieved
Waidya Hamuwa medical clinics 12 clinics 13 medical camps were conducted Achieved Waidya Hamuwa medical
benefiting over 3,200 people clinics – 12
Strategic priorities for 2018

Strategic priorities for 2018 Value drivers
Growth in profit after tax zzPrudent underwriting of risk

zzPrudent investment management
zzContinuous control over costs
High performance of the sales officers zzIT ennoblement of sales officers
zzContinuous training
zzPride of praise for integrity and honesty
Customer centricity zzExpansion of the branch network
zzContinuous adoption of the “Treating Customers Fairly” concept
Corporate stewardship zzContinue to invest in health and education infrastructure development of Sri Lanka
zzContinue to spearhead environmental friendly initiatives in the industry
Nurture a motivated and dedicated workforce zzEnhance the work-life balance of employees
zzNon-discrimination and non-interference in payments and rewards
zzContinuous investment in training
OUR BUSINESS MODEL 67
Our Business Model is based on a value Our value creation model, illustrated

cycle and each component of the value below, is a simplified way of showing how
cycle is important to achieve our strategic we create such value for and with our
objectives. As the market leader in stakeholders.
Sri Lanka’s life insurance industry, we add
significant value for all our stakeholders.
The value creation model shows the

critical resources we rely on, to offer life
FINANCIAL The pool of funds available for Ceylinco Life to
insurance solutions and create value for
CAPITAL use in the provision of life insurance products
our stakeholders. Consistent delivery of
and related services.
sustainable value to all our stakeholders
has always been the key to our success.
We apply six different forms of capitals
in our processes to deliver a range of
outcomes. These capitals are stocks of
value that are affected or transformed by MANUFACTURED Physical infrastructure that support the
our Organisation’s activities. Therefore, we CAPITAL business process including branch buildings.
manage our capitals and processes in an
efficient and effective manner to ensure
consistent delivery of value. This year, we
have changed the way of categorising
our capitals, in an effort to improve the
presentation of our value creation process Knowledge based intangibles including
in accordance with the International INTELLECTUAL Ceylinco Life’s corporate culture, organisational
Integrated Reporting (IR) Framework. As CAPITAL knowledge and learning, systems and software
we continue on our journey in integrated and corporate brand.
reporting and integrated thinking, we can
better understand how these forms of
value relate to one another. The six capitals
are detailed as shown in the diagram.
HUMAN Competencies and experience of the highly

We also take equal importance to
CAPITAL motivated Ceylinco Life employees.
managing the economic, social and
environmental impacts of our value
creation activities. This entire value
creation process is overseen by the
governance body to ensure performance
and conformance. This also ensures that Cordial relationships with customers, society,
SOCIAL
we stand by the principles of integrity and AND community and business partners such as
the standards of governance, on which our RELATIONSHIP actuaries, independent contractual agents,
stakeholders’ trust depends. CAPITAL reinsurers, suppliers, and industry associations.
This is how we make sure that every

day at Ceylinco Life is a brand new day,
opening up new opportunities and new
insights into improving what we are NATURAL All renewable and non-renewable
already doing well. The trust placed in us CAPITAL resources from the environment employed by
by our countless stakeholders proves how Ceylinco Life.
well we have interwoven value creation
into our business.
68 OUR BUSINESS MODEL PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
EXTERNAL ENVIRONMENT
VISION AND PURPOSE
GOVERNANCE STRUCTURE
Opportunities and
CAPITALS INPUTS threats pages 51 to 55
PRIMARY AND
SUPPORT ACTIVITIES
Financial capital The financial resources contributed by Stated Capital Rs. 500 Mn.
pages 82 to 90 the shareholders, generated through Gross Reserves Rs. 20.1 Bn. SALES AND
retained earnings and secured through Gross Written Premium Rs. 15.7 Bn. DISTRIBUTION
other funding sources are invested in Agency Administration,
our activities Group Sales
Intellectual capital This includes our specialised skills and Brand equity
pages 92 to 97 expertise in the life insurance industry, Brand development.
our brand and innovative capabilities System development Rs. 75 Mn. PRODUCT
that optimise customer experience Research & development MANAGEMENT
Product Development,
Product Profit Testing,
Product Pricing
Manufactured capital Using our branch network and IT Investment on land and buildings
pages 98 to 102 infrastructure to creating value to our Rs. 561 Mn.
stakeholders 1,143.83 perches of land and 304,377
square feet of building space.
INVESTMENT
MANAGEMENT
Investment and Fund
Management, Asset-liability
Social and relationship We maintain strong relationships with Marketing communications Management, Financial Risk
Management, Arbitraging
capital our key stakeholders by delivering value Sales force 3,696 and Proprietary Trading,
– Investor to and deriving value from them which Reinsurance premium paid Rs. 422 Mn. Cash and Liquidity
– Customer makes us a better organisation and a Management
– Business partners good corporate citizen
– Community
pages 104 to 130
CUSTOMER
SERVICE AND
RELATIONS
Handling Customer Inquiries
and Complaints, Customer
Education, Customer
Relationship
Management
Employee capital Our talented and committed employees Staff strength 890
pages 132 to 147 make a difference for our clients, now Training and development Rs. 22 Mn.
and in to the future Gender diversity
Skills and talent of staff
TECHNOLOGY
DEVELOPMENT
Upgrading IT systems,
Maintaining System
Security, Automation
Natural capital As a responsible company we aim to “Go Green” drive
pages 148 to 153 minimise the environmental impact Green branches 1
of our supply chain, our operations, Solar installation at Head Office
and also our solutions to generate Energy saving initiatives
sustainable stakeholder value GHG emission analysis Performance
pages 82 to 153
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION OUR BUSINESS MODEL 69

Strategy and resource
allocation pages 57 to 65 OUTPUTS OUTCOMES
MARKETING Life Fund Rs. 81.7 Bn. We contribute to a strong Sri Lankan
Market Research, Brand
Investment Income Rs. 10.2 Bn. economy with stable and sustainable
Development and Increase in reserves Rs. 8.7 Bn. financial capital growth
Positioning, Campaign Return on shareholders’ funds 45.85%
Management, Advertising
and Promotions, Corporate Total dividend per share Rs. 9.00
Communications Net assets per share Rs. 412.94
Capital Adequacy Ratio (CAR) 375%
New products developed – 2 We continuously strengthen our

UNDERWRITING Moved up to 12th position in Business Today Brand ranking capabilities, expand our product offering
AND CLAIMS People's Life Insurance Brand for the 11th consecutive year and augment our distribution model to
MANAGEMENT
respond to changing client needs
Quote Illustration,
Document Submission,
Claims Registration,
Claims Validation, Claims One new branch opened We are augmenting our network and
Adjudications, Litigations,
Fraud Management Rs. 76 Mn. rental income generated from investment property ensure a stable, secure IT landscape
Branch network enhanced to 273 with high availability while protecting
client data and guaranteeing privacy
HUMAN
RESOURCE
MANAGEMENT
Talent Management, Commission paid Rs. 1,782 Mn. We offer personalised advice and
Knowledge Management 44 MDRT qualifiers and 59 High Flyers Club qualifiers tailor-made products and services,
Recovery of claims Rs. 197 Mn. increased returns, greater value
New policies issued 126,838 additions and build sustainable
EPS - Rs. 189.35 communities
DPS - Rs. 9.00
ROE - 45.85%
13 Waidya Hamuwa clinics treating 3,200 patients
FINANCIAL 3 school renovations
ACCOUNTING Claims and benefits paid Rs. 6.6 Bn.
Budgeting, Financial,
Accounting, Dividend
Policy
Training hours per employee 18.45 Our engaged staff share their expertise
Employee benefits Rs. 1.7 Bn. with our clients and partners to deliver
Average service period 13 years increased value
Low attrition 8.64% or 1% reduction in attrition
SUPPORT Work-family balance 54% of annual leave used
SERVICES
Security services and
Waste Management
Paper recycled 11,064 kg We minimise the environmental

Fuel 19,365 litres saved footprint of our operations by
197,330 kwh of power generated from renewable sources embedding environmental principles
65 tonnes of CO2 reduced in our corporate strategy
Future Outlook
(Each Capital Report)
70
STAKEHOLDERS AND
MATERIALITY
At Ceylinco Life, we have diverse stakeholders, without whom our

business wouldn’t exist.
Stakeholders
At Ceylinco Life, we have diverse with them for deeper insight and mutual Stakeholder identification
stakeholders, without whom our business benefit. This results in efficient resource
Our stakeholders are individuals, groups
wouldn’t exist. We assure sustainable allocation, effective strategic delivery and
or entities that can reasonably be
benefits and effective value creation optimised value creation.
expected to be significantly affected
through successful dialogue and committed by our organisation’s business decisions;
engagement. Therefore, we actively Following is the stakeholder engagement
and whose actions can reasonably be
maintain regular interactions with our process of our Company. As illustrated, it
expected to affect the operations of
stakeholders, and continuously strive to is a cyclical process of identifying, ranking,
our organisation. The broad range of
address and honour their varied needs. prioritising, and engaging with high priority
stakeholders are categorised based on
We also work hard to listen to their stakeholders, assessing their needs and
marketplace, workplace, financial and
expectations and views on how well we finally reporting and reviewing which again
business community, and environment
are meeting them, as well as collaborate leads to identifying relevant stakeholders.
and society as shown below:
Stakeholder
Shareholders
STAKEHOLDERS Customers
IDENTIFICATION Business partners:
– Actuaries
– Independent sales agents
– Reinsurers
REVIEW AND STAKEHOLDER – Industry associations

REPORTING ENGAGEMENT Suppliers and service providers
Employees
Community and environment
Government
Regulators:
– Insurance Regulatory Commission of
Sri Lanka
ASSESSMENT – Central Bank of Sri Lanka
STAKEHOLDER
MAPPING AND OF STAKEHOLDER – Department of Inland revenue
PRIORITISATION CONCERNS AND
EXPECTATIONS Professional bodies
Ombudsman
Banks and financial institutions
Competitors
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION STAKEHOLDERS AND MATERIALITY 71
Stakeholder mapping

and prioritisation
KEEP SATISFIED WORK IN COLLABORATION
The extent of our engagement with our Employees Shareholders
stakeholders is based on stakeholder Independent sales agents Customers
mapping and prioritisation. This is
High
Actuaries
dependent on the relative significance of Reinsurers
each stakeholder group to our organisation, Power of Stakeholder
Banks and financial
based on their power of influence and the institutions
degree of interest in our Company’s value Competitors
creation process. This mapping enables
to prioritise stakeholder categories and MINIMAL EFFORT KEEP INFORMED
efficiently allocate Company’s resources Professional bodies Government
and managerial effort. Using Mendelow’s Regulators
matrix for prioritising stakeholders we Community
Low
have categorised our stakeholders as

shown in the diagram.
Low High
Interest of Stakeholder
Marketplace Workplace Financial Environment/

and business Society
community
 Stakeholder engagement assessed. This enables to have a clear

understanding of the varying concerns

Once stakeholder mapping and and expectations of each group. By using
prioritisation is done, engaging effectively the stakeholder engagement model, we
 with each stakeholder group is critical. assess issues/concerns identified through

Engaging in long-term dialogue helps engagement with the stakeholder. This
to ascertain their needs, aspirations and facilitates us to achieve lasting and

concerns which are important input for sustainable outcomes.
 our decision-making and to make steady
 progress towards our strategic agenda. Listed below are the primary concerns and
 In particular, crucial decisions are made expectations of the identified stakeholders.
to address aspects which are deemed as

being important. These in turn contributes

towards sustainable growth of our The extent of our engagement with
organisation and maximising the value our stakeholders is based
 creation process of delivering value to on stakeholder mapping and
stakeholders and deriving value for our prioritisation. This is dependent
 organisation. on the relative significance of
 each stakeholder group to our
 Assessment of stakeholder organisation, based on their power of
influence and the degree
 concerns and expectations of interest in our Company’s value

The expectations and concerns of each creation process.
 stakeholder group is identified and
72 STAKEHOLDERS AND MATERIALITY PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Stakeholder Primary concerns and expectations
Shareholders Healthy financial returns

Timely payment of dividends
Financial information and disclosures
Customers Service standards

Policy bonuses/delivery of claims, maturity payments, policy payments on time
Financial stability of the insurer
Actuaries Data for the actuarial valuation

Timely payment of actuarial fees
Independent sales agents Healthy commissions

Job satisfaction
Job security
Reinsurers Timely payment of reinsurance premium
Industry associations Participation in industry-related seminars, forums and conferences

Contribution towards industry development
Employees Competitive salary and remuneration

Bonuses and other incentives
Promotions and career advancement
Job satisfaction
Job security
Community and environment Corporate social responsibility (CSR)

Employment opportunities
Contribution to the preservation of environment
Government, regulators, professional bodies, Financial prudence and stability of the industry
ombudsman Compliance with laws and regulations
Innovation
Payment of taxes
Business ethics
Fair settlement of claims
Adherence to best practices
Banks and financial institutions Investment opportunities

Cross-selling opportunities
Facilitate continuous relationships
Competitors Fair competition

Industry development and growth
Given below is an overview of our engagement approach and frequency of engagement together with a summary of the feedback we’ve

received and how we responded:
Method of Engagement Frequency of Key Topics and Concerns Raised How the Company Responded to Such Topics and Concerns
Engagement
Shareholders
Annual General Meeting Annually Review of the prior financial year’s The Company held the third AGM on
performance and discussions with the 30 March 2017
Board of Directors
Approval of dividends re-appointment
and re-election of Directors', Auditors and
approval of Auditors' remuneration
Annual Report Annually Financial information and disclosures Timely publication of the Interim Financial
Statements and making them easily accessible
to shareholders.
Quarterly interim Financial Quarterly Condensed financial information and Voluntary publication of the Interim Financial
Statements disclosures Statements in newspapers.
Corporate website Continuous Company news and latest information The corporate website is regularly updated with
and updates on current affairs latest information.
Customers
Complaints, inquiries and Ongoing Queries pertaining to their policies and Easily accessible hotline/website to provide
requests received from service offered information and customer service points at all
customers our branches.
Sales force feedback Ongoing basis Concerns of policyholders about their Establishing the most extensive island-wide
policies and services offered branch network and increasing the interaction
between the sales personnel and the customers.
Customer surveys As required Monitor service standards Conduct regular customer satisfaction surveys and
take corrective action promptly where necessary.
Inquiries/complaints received Ongoing basis Concerns of policyholders regarding their Easily accessible hotline to provide information
through the Call Centre policies and services offered and monitor service levels.
Individual sales agents
Annual and mid year awards Annually Motivate by recognising and rewarding Giving awards, cash rewards and foreign tours
ceremonies outstanding performance including media publicity.
Sports Meet Annually Opportunity to showcase talents and Reward best performers and give recognition in
interact with colleagues the Company newsletters.
Grievance handling Ongoing basis Work-related issues Discussions with immediate supervisors.
Dedicated sales support centre.
Frequent visits by senior management to branches
and divisions.
Actuaries
Year-end actuarial valuation Annually Data required for the year-end The data was validated and submitted to the
of the long-term insurance valuation, data validations done, new Actuary with the necessary information including
business product introductions during the year, the assumptions used and product-wise reserves
assumptions used, computation of to determine the bonuses for the participating
product-wise reserves and capital policyholders.
adequacy ratios and preparation of
Computed the Company’s capital adequacy ratio
information required by the regulator
and prepared the relevant information required by
the regulator for the final review of the Actuary.
Engagement
Reinsurers
Long-term treaty Ongoing basis Continue a long-term and mutually Actively maintaining business relationships.
beneficial partnership with Sri Lanka’s Honour contractual obligation including timely
leading life insurer payment of the reinsurance premium.
Formal interactions with Ongoing basis Maintain a healthy portfolio Implement international underwriting and claim
reinsurance partners management processes with technical guidelines.
Mitigate losses.
On site visits and meetings As required Support product development and knowledge
sharing.
Industry associations
Participation for industry As required Formulate joint industry initiatives Ceylinco Life Participates in Life Insurance
forums and meetings on technical updates, regulatory Awareness Month which is a joint industry effort
matters, grievances and coordinate aimed at highlighting the importance of life
correspondence with IRCSL insurance among the general public.
Ceylinco Life plays a key role in the industry
associations as the market leader and holds the
position of Chairmanship of both MSF and Life
forums of the Insurance Association of Sri Lanka.
Employees
Succession planning Annually and as Increase internal competition Introduce a career progression and develop on
required special projects.
Leadership training to second tier of management.
Share information and New year message, Create high expectations on rewards and Implementation of a performance-based reward
Company performance year-end reviews, recognition system.
mid-year
conferences,
monthly messages
Departmental forums with Quarterly Communication of employee opinions Forums within departments to obtain employee
the CEO and suggestions ideas and suggestions.
Celebrate financial and As required Recognition for exceptional performance High performers are rewarded through annual
non-financial achievements awards and promotions.
Encourage volunteering Company events Lack of opportunities to engage all Creating new opportunities and allocation of
and other official volunteers opportunities based on competencies.
activities
Give and receive feedback Inculcated in the Encourage constructive feedback from Conduct regular training on counselling and
corporate culture, all levels coaching.
at biannual
appraisals and at
different stages of
the projects
Show respect Embedded as a Generational gap Encourage all to practice corporate values.
core value in the
corporate culture

Engagement
Encourage learning Promote a culture Encourage continuous learning in all age Encourage team performance.
of learning, groups
performance-
based promotions
Align with the Company goals Annual objective Changes in objectives due to changes in Set new key performance indicators and rewards
and strategies formulation and the operating environment through regular review.
biannual appraisals
Programmes for work-life Daily
balance
Regulator: Insurance
Regulatory Commission
of Sri Lanka (IRCSL)
Submission of statutory returns Quarterly and Clarifications about information furnished Timely submission of all statutory returns.
annually as in the returns Prompt responses to all clarifications required by
stipulated the IRCSL.
Submission of other documents Ongoing Submission of other documentation (e.g. new
product details, new advertisements etc.) as
stipulated by the IRCSL.
Industrial forums, meetings As and when New developments and concerns in the Participation in industrial forums, meetings and
and discussions required industry discussions organised by the IRCSL.
Regulator: Central Bank of

Sri Lanka
Submission of monthly and Monthly and Timely submission of all information.
quarterly information to the quarterly
Central Bank
Contribution to surveys and Monthly and Clarifications on information furnished Timely submission of information for Purchasing
indices of the Central Bank quarterly Mangers’ Index, Business Outlook Surveys and
National Accounts Estimates.
Regulator: Department of
Inland Revenue
Submission of tax returns and Quarterly and Timely payment of all applicable taxes and timely
payment of taxes annually submission of tax returns.
Meetings and discussions As and when Clarifications about information furnished Participation in discussions and providing
with the Department of Inland required in tax returns explanations to queries.
Revenue
Community
CSR projects Ongoing basis Identifying groups who need assistance Deserving beneficiaries are identified and assisted
in the areas of healthcare and education through school development projects and “Waidya
Hamuwa” medical camps.
Sustainability initiatives Ongoing basis Minimising adverse environmental Set up green branches, installed solar energy
impacts, optimal use non-renewable in the head office, launched environment
natural resources sustainability initiative in the branches.
Review and reporting stakeholder engagement process, and are

depicted in a two-dimensional materiality

The stakeholder engagement process is an matrix, based on the GRI guidelines, shown
ongoing process in our organisation that on page 77. This helps us to identify,
evolves and adapts to the developments prioritise and review material economic,
in the business environment. Given social and environmental topics and
the dynamic nature of the business formulate strategies accordingly to create
environment and its effect on shareholder sustainable value for all our stakeholders.
concerns and expectations, this process These are rated for its importance to the
is regularly reviewed and the key Company and the stakeholder with cross
developments are reported to the reference to the GRI Content Index on
management. pages 316 to 320 of the Annual Report.
Considering the dynamic nature of the

Stakeholder Inclusiveness environment, we update the list annually
It is imperative to define key stakeholder to keep current with the priorities and
groups to ensure materiality in concerns of our stakeholders.
engagement and reporting. Stakeholder
inclusiveness enables us to derive
Topic Importance to Importance to
numerous benefits by embedding opinions Company Stakeholder
of key stakeholders in business activities,
ensuring active stakeholder engagement Economic
and facilitating optimal resource allocation 1. Economic performance Very high Very high
and managerial effort based on materiality.
The key stakeholder groups of our 2. Indirect economic impacts High High
Company are given on page 72. 3. Procurement practices Medium Medium
4. Anti-competitive behaviour Medium Medium

Materiality Assessment
Environmental
We conduct a stringent materiality
assessment to identify material topics 5. Energy High High
which impact our Company and our
6. Emissions High High
stakeholders. Since it is impractical to
address all possible issues that may have 7. Effluents and waste High High
a bearing on our organisational activities,
8. Environmental compliance High High
we address only the topics which are
deemed material.
Social
Materiality of topics is considered from 9. Employment Very high Very high

the perspective of the Company and the 10. Training and education Very high Very high
stakeholders. Topics deemed material if
it substantially affects our organisation’s 11. Diversity and equal opportunity High High
ability to create value over the short,
12. Non-discrimination High High
medium and long-term. Additionally,
relevance and significance is also taken 13. Local communities High Very high
into consideration to determine materiality
14. Marketing and labelling Very high High
while taking into account the probability
of occurrence and the magnitude of the 15. Customer privacy Very high Very high
impact. Topics material to our orgainsation
16. Socioeconomic compliance Very high Very high
are identified through an effective
Materiality Matrix our focused CSR strategy to improve

educational and health facilities in local
communities. Whilst we have set targets
and made budget allocations for these
CSR activities, the progress is reviewed
Very High
regularly by the top management.

13 1, 9, 10, 15, 16
Procurement practices
Importance to Stakeholders
Being a service organisation, we do not

procure as much as a manufacturing
organisation. However, we always strive
2, 5, 6, 7,
High
14 to procure from the localities in which

8, 11, 12 we operate and support local suppliers.
Our branches source their daily supplies
from the localities. We have an approved
list of suppliers for procurement of items
such as assets and stationery. We also
maintain signed service agreements with
Medium
3, 4 key service providers, such as janitorial

services, office maintenance and courier
services etc. Our procurement process
is monitored and evaluated by the
Administration Department.
Medium High Very High
Importance to the Organisation

Anti-Competitive behaviour
Even though we operate in the highly
competitive life insurance industry, our
Economic performance our stakeholders. Results of our investment stakeholders expect us to uphold the
strategies are regularly evaluated by highest standards of ethics. We maintain
For business survival, it is essential to have a zero tolerance policy for fraud and
the Operational Investment Committee
a satisfactory economic performance. We customer exploitation. We also train
and monitored by the Board Investment
need to maintain our leadership position our staff members who are directly
Committee. Financial results are evaluated
in the life insurance industry through or indirectly involved with sales and
by the Board.
healthy economic performance that leads marketing; especially our sales staff on
to business growth, market expansion ethical sales practices. We comply with
and increased capacity. To create financial Indirect economic impacts all regulatory requirement and meet the
value, we adopt prudent and effective We believe we have a responsibility requirements of our stakeholders.
investment strategies to maximise to be a responsible corporate citizen
the financial value we can create. The in the communities in which we We complied with all the regulatory
financial value is distributed among our operate, and contribute to infrastructure requirements of the life insurance business,
stakeholders including our employees, development and support services of advertising and fair competition. The IRCSL
sales staff, Government, community those communities. We also believe that closely monitors the sales and marketing
and shareholders. This also results in as the market leader we have to set the practices of life insurers to safeguard
infrastructure development, generation benchmark in infrastructure development policyholders’ interests. The Compliance
of new employment opportunities and and social services, with special focus on Officer of the Company evaluates overall
environmental and social sustainability. enhancing educational and health facilities compliance with regulatory requirements
By achieving a commendable economic in underdeveloped communities. We in this area. The sales staff is evaluated
performance we aim to create and deliver implement “Waidya Hamuwa” clinics and on their ethical standards as part of their
value through our Business Model to all “School Development” projects through performance appraisals.
Energy Environmental compliance programmes, special projects or foreign

training programmes. The Company

As a service organisation, we do not use We are an environmentally responsible has set aside a training budget and its
energy extensively. However, energy is entity. Therefore, we prioritise compliance utilisation is regularly reviewed by the top
important for us to perform efficiently. with relevant environmental laws management. Actual training statistics
Therefore, we analyses our energy and regulations. The Regulatory Risk are compared against the related targets.
consumption and take measures to Committee, under the ERM structure, Trainings are evaluated using participants’
reduce usage. We also monitor the use discusses changes in regulatory feedback.
of non-renewable energy sources such as requirements and the status of compliance
the fuel consumption of managers and of the Company. The Compliance Officer of
promote the use of fuel efficient hybrid the Company evaluates overall compliance Diversity and equal
vehicles. We use renewable sources of with relevant environmental laws and opportunity
energy such as solar energy at our Head regulations.
Office and green branches. Energy saving Diversity enhances company performance
initiatives are implemented in all our new and power of innovation and spurs
branches. Energy consumption of branches
Employment creativity, motivation and identification
is monitored by the management and Our employees are critical to our service with the Company. Our leadership plays
motivational incentives are granted to delivery. Therefore, we nurture an engaged an important role in promoting and
branches that achieve energy savings. and motivated workforce who makes appreciating inclusion and diversity in
an outstanding contribution to excellent our Organisation. The Company’s HR
policy promotes inclusion, diversity and
Emissions results and growth of our Company. Their
unique skills and shared values are focused equal opportunities. The policy serves as
We are an environmentally responsible on delivering an exceptional service to a reference for evaluation of our equal
entity and strive to reduce our emissions. our many customers. We foster a culture opportunities. Employees provide their
We reduced paper consumption and of continuous learning and development, comments on their perceptions of diversity
recycled paper, which results in prevention high work ethics, open communication, and equal opportunities.
of carbon dioxide emissions. We aim to rewards and recognition, and promoting a
adopt an electronic system to handle
issuing of policies and underwriting in
healthy work-life balance. All recruitments Non-Discrimination
are done based on the talent acquisition
the ensuing year. The management policy of the Company. The Company has Non-discrimination enhances Company
monitors paper consumption and evaluates a competent HR team that uses various performance by ensuring that the right
most emission-free options in our KPIs to measure employee contributions. individuals get the right opportunities.
procurement process. Satisfaction surveys are conducted to It also improves the image of the
measure the level of satisfaction. Training Company in the eyes of both internal
Effluents and waste need analysis is carried out to identify and external stakeholders. Our leadership
opportunities for career development. plays an important role in promoting
Generation and improper disposal of non-discrimination. If any individual is
waste could pose a threat to human treated unequally, they can inform their
health and the environment. Dumping Training and education grievances to the HR. Our marketing
of waste and waste management is also communications are conducted in all
We believe that our ability to develop
a burning issue in Sri Lanka. Hence, we three languages. The Company’s HR policy
employees internally is an important
prioritise the reduction and management promotes non-discrimination. The policy
competitive advantage. Training and
of waste generation. Accordingly, we take serves as a reference for evaluation of our
education is important to inculcate and
measures to reduce paper consumption equal opportunities. If any grievance is
maintain a high performing culture that
and we obtain the services of a third party received, they are evaluated and necessary
underpins our leadership. A training need
to recycle our used paper and e-waste. rectification is done.
analysis is conducted in all departments
To minimise water wastage, we have
through the performance evaluation
installed sensor-controlled valves. Our
Bandarawela and Panadura branches have
system to ascertain training needs at Local communities
the beginning of each year. Based on
a sewerage water treatment plant. Our We believe we have a responsibility to
the training gaps identified, appropriate
paper consumption is monitored by the be a responsible corporate citizen in the
training programmes are designed,
management to evaluates more efficient
which are either internal or external communities in which we operate. As the
options to reduce paper waste.
market leader, we strive to conduct local a life-long relationship with policyholders.

community development programmes The Company collects policyholders’
based on local communities’ needs. personal data only to the extent required
When recruiting staff for our branches, for establishing an insurance contract
we hire from the local neighborhood. We and for meeting regulatory guidelines on
understand the needs of local communities customer identification. The IT Security
when we offer our insurance policies. Our Department is dedicated to ensuring IT
School Development Projects and Waidya infrastructure security, including safeguard
Hamuwa medical camps are planned of customer data. The ICT Risk Committee,
after taking into account the needs of under the ERM structure, discusses IT
the local communities affected by those security matters in detail. The Chief
programmes. Ceylinco Life has targets Information Officer evaluates the adequacy
for School Development Projects and of measures on protecting customer
Waidya Hamuwa clinics. There are budgets data privacy. The Company employs
dedicated for these projects and budget independent consultants to assess the
utilisation is regularly reviewed by the level of IT security periodically.
top management. Progress of the School
Development projects is reviewed by the
top management.
Socioeconomic compliance
Ceylinco Life is a socially responsible
entity and takes importance in complying
Marketing and labelling with relevant laws and regulations
It is important that we disseminate clear, in the social and economic area. The
accurate, timely, and relevant information Regulatory Risk Committee, under the ERM
about our products and services because structure, discusses changes in regulatory
this enables customers to make informed requirements and the status of compliance
decisions. Our marketing communications of the Company. The Compliance Officer of
are conducted in all three languages. the Company evaluates overall compliance
Our product brochures contain all the with relevant laws and regulations.
information mandated by the IRCSL.
Policyholders are also made aware about
our products and their features by sales
staff through a product quotation at the
time of purchasing a policy. After the
proposal form is filled along with the
consent of the policyholder, the policy
document is issued. The product brochures
we give our customers are evaluated
against the information required to be
disclosed by the IRCSL. Our product details
are made available to customers through
website, brochures available at all our
branches and through the Call Centre.
Customer privacy
We believe that ensuring customer
privacy is important for us since we need
to develop a trusting relationship with
customers. This trust is crucial for us to
enhance our reputation and to build
80
81
MANAGEMENT

DISCUSSION
AND
ANALYSIS
Financial Capital 82
Intellectual Capital 92
Manufactured Capital 98
Social and Relationship Capital 104
Investor Capital 106
Customer Capital 108
Business Partner Capital 119
Social Capital 126
Employee Capital 132
Natural Capital 148
Events 154
With a holistic view and strong focus on

continuous improvement, we develop solutions
that add value to our stakeholders.
82
FINANCIAL
CAPITAL
We leverage on our financial capital including, equity and

policyholders’ liabilities to fund our business operations to
achieve sustainable growth and maintain our leadership position
in the industry. By focusing on our business fundamentals and
adopting judicious investment strategies we increase the value
of financial capital which enables us to deliver increased value to
our stakeholders.
Financial capital value creation model
INPUT PROCESS OUTPUT OUTCOME
zzStated capital - Prudent fund zzNet income zzEmployees Benefits and

Rs. 500 Mn. management Rs. 25.62 Bn. rewards
zzGross written zzProfit after tax zzInvestors – High returns
premium - Rs. 9.4 Bn.
zzGovernment Tax
Rs. 15.7 Bn. zzEarnings per share Rs.
payments and
189.35 infrastructure
zzReturn on net assets development
45.85%
zzEnvironment and
zzReturn on total assets
community – Investment
8.92%
in community projects
zzInvestors –
and environmental
Shareholders' equity conservation
Rs. 17.1 Bn.
zzPolicyholders – Claims
zzInsurance
and other benefits
policyholders –
Insurance contract zzReinsurers – Reinsurance
liabilities Rs 82.1 Bn. payments
Highlights for 2017

Long-term Insurance Gross written premium Investment income Assets increased to
Fund increased increased to Rs. 15.7 Bn. increased to Rs. 10.2 Bn. Rs. 106 Bn.
to Rs. 81.7 Bn.
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION FINANCIAL CAPITAL 83

Financial capital contributing to value creation
Maintaining a healthy bottom line with adequate liquidity and comfortable capital levels through prudent
and efficient management of our financial resources enables us to deliver optimal value to our stakeholders.
Increasing our financial capital value
We increase the value of our financial capital by maintaining a well-balanced product mix and a high
quality investment portfolio. We also maintain adequate liquidity levels and maintain a healthy growth
in the bottom line.
Financial performance
Highlights
Description 2017 2016 Change
Rs. Mn. Rs. Mn. %
Gross written premiums 15,765 15,028 5

Premiums ceded to reinsurers (422) (374) 13
Investment and other income 10,281 8,781 17
Change in contract liabilities due to transfer of one-off surplus 3,456 – 0
Net benefits and claims paid (6,687) (6,652) 1
Acquisition cost (1,782) (1,694) 5
Expenses (3,545) (2,947) 20
Income tax expense (340) (665) -49
Profit after tax (including one-off surplus) 9,467 3,079 207
Profit after tax (excluding one-off surplus) 6,011 3,079 95
Underwriting results
For the year ended 31 December, 2017 2016 Change
Rs. Mn. Rs. Mn. %
Gross written premiums 15,765 15,028 5

Premiums ceded to reinsurers (422) (374) 13
Net written premiums 15,343 14,654 5
Investment and other income attributable to policyholders 9,459 7,975 19
Net benefits and claims paid (6,687) (6,652) 1
Increase in long-term insurance fund (7,259) (8,398) -14
Acquisition cost (1,782) (1,694) 5
Operating and administrative expenses attributable to policyholders (4,195) (2,969) 41
Interest expense (11) (9) 17
Tax expense (369) (607) -39
Surplus from life insurance business/underwriting result 4,500 2,300 96
One-off surplus generated from non-participating fund 3,456 – –
Total surplus transferred to shareholders 7,956 2,300 246
84 FINANCIAL CAPITAL PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Gross written Composition of GWP Average premium per policy

premium (GWP) GWP comprises four categories premiums – Description 2017 2016 Change
new business premium, single premium,
Gross Written Premium is the total
renewal premium and Group life premium. Annualised new
premium paid by the policyholders to business premium
The largest category in 2017 was the
the insurance company, before deducting – Rs. ’000 4,318,763 3,820,601 13.03
renewal premium which recorded a growth
reinsurance and ceding commission. Number of new
of 8.8% YoY.
This is our main source of income. We policies issued
have maintained market leadership in during the period 126,838 143,622 -11.69
the life insurance industry for the past Description 2017 2016 Change
Rs. Mn. Rs. Mn. % Average premium
14 consecutive years by recording the
per policy – Rs. 34,049 26,608 27.99
highest GWP in the industry. In 2017, our New business 3,530 3,538 -0.23
Company’s GWP increased by 4.9% Year-on Single premium 2,398 2,659 -9.82 The average premium per policy has
Year (YoY) to Rs. 15,765 Mn. The increase
Renewal premium 9,396 8,634 8.83 increased to Rs. 34,049/- reflecting by
in GWP was largely due to due to the
Group life premium 441 196 125.00 28% YoY in 2017.
increase in group insurance premium from
Rs. 196 Mn. in 2016 to Rs. 441 Mn. in 2017 Total 15,765 15,027 4.91
Ceylinco Life has recorded a 4% increase
and due to the increase in normal premium
in GWP for the third quarter (nine months
collected from existing policyholders.
Composition of GWP – 2017 ended September 2017), whilst the life
insurance industry had recorded a GWP
Year GWP GWP growth 3%
growth rate of 12% for the same period.
Rs. Mn. % 22%
2013 11,125 2.71 Description Industry Company

2017 Q3 2017 Q3
2014 12,002 7.91
2105 13,456 12.12 60% 15%

GWP (Rs. Mn.) 51,932 11,487
2016 15,028 11.67 GWP growth (YoY) 12% 4%

2017 15,765 4.91
New business Single premium Investment income

Gross written premium (Rs. Bn.)
Renewal premium Group life premium
Year 2017 2016
17.5
Rental income 76 72
Composition of GWP – 2016 from investment
14.0
property
1%
24% Investment income 269 55
10.5 from FVTPL assets
Investment income 7,518 6,501
7.0 from HTM assets
57% 18% Investment income 375 149
3.5 from AFS assets
Investment income 1,631 1,404
from AFS assets
0 New business Single premium
2013 2014 2015 2016 2017
Renewal premium Group life premium
Investment income for 2017 increased
by 20.6% YoY to Rs. 9.8 Bn. The increase
is mainly due to the prudent investment
strategies adopted by the Company’s
Investment Committee; the details
of which are given in the Investment

Description 2017 2016 Change
Committee Report on pages 201 to 211. Rs. ’000 Rs. ’000 %
Investment income was mainly driven by Gross claims and benefits (excluding
gross change in contract liabilities)
held-to-maturity financial assets, which
swelled by an impressive 15.6% from Claim – death, disability and hospitalisation 783 648 21
Rs. 6,501 Mn. in 2016 to Rs. 7,518 Mn. Policy maturities 3,900 4,220 -8
in 2017. Interim payments on anticipated
endowment plans 783 750 4
Company’s insurance liabilities which
Policy surrenders 1,127 907 24
are long-term in nature, are largely
matched by investments made through Encashment of bonus to policyholders – 266
cash and loyalty bonus 261 2
held-to-maturity assets, which mainly
comprise long-term Treasury Bonds and Annuities 25 14 79
corporate debentures. Life insurance gross claims and benefits 6,884 6,800 1
Reinsurance recoveries (197) (148) 33
Investment income (Rs. Mn.)
Life insurance net benefits and claims 6,687 6,652 1
10,000
Rs. 7,258 Mn. was transferred to the Long-
Year Net benefits Transfer to
and claims long-term
term Insurance Fund in 2017, compared
8,000 insurance fund to Rs. 8,398 Mn. transferred in 2016. This
reflects an decrease of 13.57% YoY.
2013 4,757 7,654
6,000
2014 4,893 7,256 The main reason for the decrease in
2105 5,957 7,135 the amount transferred to the Log-term
4,000 Insurance Fund in 2017 was the increase
2016 6,652 8,398
in the shareholder fund transfer from
2017 6,687 7,259 Rs. 2.3 Bn. in 2016 to Rs. 4.5 Bn. in 2017.
2,000
This was also affected by the one-off
surplus transfer of Rs. 3.45 Bn, in 2017,
0 Net benefits and claims and (Rs. Mn.) as required by the Insurance Regulation
2016 2017 transfer to long-term Commission of Sri Lanka (IRCSL).
insurance fund – 2017
Rental income from investment property
Investment income from FVtPL assets

8,750 The increased transfer to the Long-term
Insurance Fund is attributed to the growth
Investment income from HTM assets
in GWP and the higher investment income
Investment income from AFS assets 7,000
generated through prudent investments in
Investment income from L&R assets
2017. The funds were more than sufficient
5,250 to absorb the escalation in acquisition cost,
higher value of customer benefits and
Net benefits and claims 3,500
claims and the increase in tax expense.
Net benefits and claims of the life

insurance business, excluding net change 1,750
Acquisition cost
in contract liabilities, increased marginally
Acquisition cost mainly represents
by 0.5% to Rs. 6,687 Mn. in 2017,
the commission expenses incurred in
compared to Rs. 6,652 Mn. in 2016. The 0
2013 2014 2015 2016 2017 underwriting life insurance policies. We
main reason for this increase was due to
deploy our large number of independent
the increase in surrenders in 2017, which
Net benefits and claims sales agents to take the message of life
recorded a 24% growth from 2016 to
Transfer to long-term insurance fund insurance to every family in Sri Lanka.
Rs. 1.13 Bn.
Therefore, the 5% YoY increase in
acquisition cost in 2017, correlates with the Selling expenses increased by 22% YoY Life insurance specific ratios
5% increase in GWP in the same period. largely due to advertising and business
promotion expenses incurred during Description
2017, to generate more businesses and

Year Acquisition cost
Rs. Mn. defend our market share in an intensely Claims and benefit ratio
competitive market.
2013 1,265 Claims ratio
(without maturities and surrenders)
2014 1,389 Employee benefit expenses increased
due to provision of higher benefits to Reinsurance ratio
2105 1,610
reward our exceptional staff members Acquisition ratio
2016 1,694
who contributed to the organisation’s Capital adequacy ratio (CAR)
2017 1,782 value creation during the year. Employee
benefits are discussed in detail under
Employee Capital on pages 132 to 142.
Performance dashboard 2017
Acquisition cost (Rs. Mn.) and targets for 2018
2,000 Profitability
PBT, income tax and PAT (Rs. Mn.) Performance indicator
1,600
11,250
Gross written premiums
1,200
9,000
Investment and other income
Net benefits and claims
800
6,750 Acquisition cost
Expenses
400
4,500 Profit after tax (excluding one-off
surplus transfer)
0
2013 2014 2015 2016 2017 2,250
Financial position
0
Total assets
2016 2017
Operating and Profit before tax

2017
Rs. Mn.
administrative expenses Income tax expense
Total assets 106,095
Operating and administrative expenses Profit after tax
increased by 20.26% YoY, from Assets growth (%) 9.99

Rs. 2,937 Mn. in 2016 to Rs. 3,532 Mn.
in 2017. The Company's profit after tax (excluding
Company’s total assets crossed the
one-off surplus transfer) soared by
Rs. 106 Bn. mark in December 2017,
95.23% and reached Rs. 6 Bn. Further, the
Component 2017 2016 Growth recording a 10% growth YoY. This increase
Rs. Mn. Rs. Mn. % Company recognised a one-off surplus of
was fuelled mainly by the investments in
Rs. 3.46 Bn. as per the guidelines issued
Administration new software, growth in financial assets at
by the IRCSL, boosting the net profit to Rs.
expenses 1,318 1,203 10 fair value through profit or loss and increase
9.46 Bn.
in financial assets available for sale.
Selling Expenses 453 370 22
Employee
benefits 1,761 1,364 29
Total 3,532 2,937 20

Property, plant and

2017 2016 Explanation
equipment
% % %
Property, plant and equipment increased
44 45 Claims and other benefits paid as a percentage of premium income by 4.3% from Rs. 7,068 Mn. in 2016 to
Rs. 7,371 in 2017. Freehold land and
5
buildings, considered as an admissible
4 Claims paid as a percentage of premium income
asset in capital adequacy calculations
3 2 Percentage of the risk transferred to reinsurers accounted for 89% of the value of property,
12 12 Acquisition cost as a percentage of premium Income plant and equipment. During the year, the
375 335 Total Available Capital (TAC) as a percentage of Risk Based Capital Company acquired land and buildings to
the value of Rs. 903 Mn., which includes
Requirement (RCR)
one new branch constructed in 2017. More
information about Company’s property,
plant and equipment are given on pages
238 to 244.
2017 2018
Actual Target Achievement Target Expected growth Investment property
Rs. Mn. Rs. Mn. % Rs. Mn. %
Investment property includes land and
15,765 18,780 84 17,853 13 buildings held by the Company for
10,281 8,369 123 10,795 5 investment purposes. Such property
generates rental income for the Company
(6,687) (7,065) 95 (8,055) 20
and gains from capital appreciation.
(1,782) (1,880) 95 (1,874) 5 Additional details on investment property
(3,545) (3,162) 112 (3,911) 10 are given on pages 244 to 246.
6,011 3,711 162 6,500 8 Investments in subsidiaries

Investments in subsidiaries were
Rs. 1,036 Mn. as at end 2017. This includes
investments in Ceylinco Healthcare
Total assets Services Limited and Serene Resorts
(Rs. Bn.) (%)
Limited amounting to Rs. 771 Mn. and
2016 2015 2014 2013
Rs. Mn. Rs. Mn. Rs. Mn. Rs. Mn.
125 25 Rs. 265 Mn. respectively.
96,458 80,235 71,068 63,946

20.22 12.90 11.14 20.90
100 20 Financial instruments
2017 2016
75 15 Rs. Mn. Rs. Mn.
Held-to-maturity
50 10
financial assets 65,273 66,582
Loans and receivables 17,199 12,998
25 5
Available-for-sale
financial assets 3,808 1,220
0 0 Financial assets at
2013 2014 2015 2016 2017 fair value through
profit or loss 2,350 166
Total assets (Rs. Bn.)
Total financial
Assets growth (%)
instruments 88,629 80,966
prudent life insurer, Ceylinco Life holds long

Financial instruments (Rs. Bn.) Composition of HTM

term investments to match its long-term
75
financial assets – 2017
insurance liabilities. Therefore, 64% of the
HTM financial assets are held in “risk-free” 64%
60 Treasury Bonds, and the remaining
assets are held in quoted debentures.
The Company mainly invests in corporate
45
debentures of issuers bearing credit ratings 36%
between AAA to A-. The objective of this
30 strategy is to earn steady returns from
relatively lower-risk investments, while
adhering to the stringent regulatory and Treasury bonds
15
internal investment guidelines. Quoted debentures
0
Held-to- Loans Available- Financial
Loans & receivables (L&R)
maturity and for-sale assets at
Composition of loans and
These are non-derivative financial assets
financial receivables financial fair value receivables – 2017
assets assets through with fixed or determinable payments
profit or loss and are not quoted in an active market. 3%
2016 2017 8%
Our Company holds 19% of its financial 2%
instruments in the L&R category. Loans
and receivables are made-up of 88%
Company’s investments in financial investments in term deposits, of which
instruments grew by 9.47% YoY to 99% are term deposits with licensed 88%
Rs. 88.6 Bn. in 2017. Financial instruments commercial banks and the balance are
account for 84% of our Company’s total with licensed finance companies.
asset base.
Staff loans Debentures
A larger percentage of the Life Insurance Available-for-Sale financial Repo Term deposits
Fund is invested in Government Securities instruments

and other fixed income securities such as AFS financial assets are financial assets
quoted debentures and term deposits, as designated as available for sale and are not Composition of AFS
per the guidelines issued by the Insurance financial assets – 2017
classified in any of the other categories.
Regulatory Commission of Sri Lanka. AFS financial assets account for a mere 4% 5% 3%
of the investments in financial instruments.
In compliance with the Sri Lanka 75% of the AFS financial assets are held in 17%
Accounting Standards (SLFRS/LKAS), we Treasury Bonds, 17% in quoted debentures 75%
have segregated financial instruments into and 5% in quoted shares. 3% is held in
four categories; Held to Maturity (HTM), preference shares.
Loans & Receivables (L&R), Available for
Sale (AFS) and Fair Value through Profit or
Fair Value through Profit or Loss
Loss (FVtPL).
(FVtPL) financial assets Treasury bonds Quoted debentures
Quoted shares Preference shares

These financial assets are held for trading.
Held-to-Maturity financial
The proportion of the FVtPL assets in
instruments
the financial instruments portfolio of
HTM financial assets are those with fixed our Company is relatively insignificant,
or determinable payments and fixed accounting for a mere 3% of the
maturities. We have held such assets until investments in financial instruments.
maturity, with 74% of Company’s financial Government Securities account for 99% of
instruments in the HTM category. As a the FVtPL financial assets.
Regulation of Insurance Industry Act,

Composition of financial assets at fair Life fund
as amended. The size of the life fund
value through profit or loss – 2017 (Rs. Bn.) (%)
indicates the financial strength and solidity
1% of a life insurer. A bigger fund indicates 87.5 20
that the insurance company is financially

strong and sound. 70.0 16
Our Life Fund reached Rs. 81.7 Bn. as

52.5 12
at end 2017, recording a 4.87% growth
99% compared to Rs. 77.9 Bn. as at end 2016.
This is the net growth after a transfer of 35.0 8
Rs. 4.5 Bn. and the one-off surplus transfer
Treasury bonds
of Rs. 3.4 Bn to the shareholders’ funds
Quoted debentures 17.5 4
in 2017.
The actuarial valuation of the Life Fund as 0 0
Shareholders’ equity at 31 December 2017 was carried out by 2013 2014 2015 2016 2017
the independent consulting actuary, Willis
Shareholders’ equity increased from Towers Watson, whose report is given on
Life fund
Rs. 11,912 Mn. in 2016 to Rs. 17,190 Mn., page 221. Life fund growth
excluding the Restricted Regulatory

Reserve, recognised due to transfer of As recommended by the independent
the one-off surplus in 2017, reflecting a consulting actuary, adequate provisions, Capital Adequacy
44.3% YoY growth. Including the Restricted including those for bonuses to Ratio (CAR)
Regulatory Reserve, shareholders' equity policyholders have been made.
was Rs. 20,647 Mn. Company’s stated The Company's CAR ratio as at
capital remained unchanged at Rs. 500 Mn. 31 December 2017 stood at 375%,
Rs. 5,575 Mn. was transferred to retained compared to 335% recorded as at
earnings in 2017, increasing the retained end 2016.
earnings balance as at end 2017 to
Rs. 9,279 Mn. In compliance with Direction
16 issued by the IRCSL, the Company
Value added and distributed statement
recognised a Restricted Regulatory Reserve For the period ended December 2017 2017 % 2016
Rs. ’000 Rs. ’000
of Rs. 3,456 Mn. in 2017. This is the
one-off surplus transfer from other than Net Earned Premium 15,343,267 14,653,771
participating business to shareholders.
Investment and other income 10,280,547 8,780,689
Shareholders’ equity also includes a Special
25,623,814 23,434,460
Reserve of Rs. 7,311 Mn., which represents
the value of net assets transferred to Net claim incurred (6,686,980) (6,651,682)
Ceylinco Life from Ceylinco Insurance PLC Cost of external services (772,565) (824,665)
on 1 June 2015 as part of the regulatory 18,164,269 15,958,113
segregation of the life insurance business
from Ceylinco Insurance PLC. To employees as remuneration 1,761,122 29.09 1,364,300
To intermediaries as commission 1,782,479 5.22 1,693,985

To the Government as tax 722,158 35.30 533,729
Insurance contract
To the Shareholders as dividend 432,000 (37.16) 687,500
liabilities – Life
Increase in life fund 7,258,502 (13.57) 8,397,889
Insurance Contract Liabilities (or simply Retained as depreciation 196,765 (2.43) 201,669
the “Life Fund”) is the fund maintained
Retained as reserves 6,011,241 95.23 3,079,041
for the long-term insurance business
by our Company in accordance with the 18,164,269 13.82 15,958,113
As a prudent life insurer, Ceylinco Life holds long-term invest-

ments to match its long-term insurance liabilities. Therefore, 64%
of the HTM financial assets are held in “risk-free” Treasury Bonds,
and the remaining assets are held in quoted debentures.
For the period ended December 2017 2017 % 2016

Rs. ’000 Rs. ’000
Distribution of Income 2017

To employees 10% 9%
To intermediaries 10% 11%
To Government 4% 3%
To Shareholders 2% 4%
To Life Policyholders 40% 53%
To expansion and growth 34% 21%
100% 100%
Challenges faced
Distribution of Income – 2017
Volatility in interest rates had a significant
effect on our investment income and
10%
profitability. Also changes in taxes and lack
of consistency in Government’s fiscal policy 34% 10%
significantly impacts Company’s profitability
4%
as well. 2%
Focus for 2018

We will utilise our financial capital 40%
prudently to enhance our profitability. We
To Employees To Intermediaries
will adopt effective cost management
To Government To Shareholders
initiatives to improve efficiency and
To Life Policy Holders To Expansion and Growth
thereby increase profits. We will also
maintain sound capital and liquidity levels.
Future outlook
We will continue to optimise our
investment income through prudent
investment management. We will achieve
a sustainable growth in the bottom line
and maintain optimal liquidity levels to
meet cash requirements.
STEWARDSHIP
OUR CLIENT...THE UNIVERSE
FINANCIAL REPORT SUPPLEMENTARY INFORMATION 91
The Ceylinco portfolio truly enshrines sustainability...

across people and planet.

92
INTELLECTUAL
CAPITAL
The intellectual capital of our Company comprises the knowledge-based

assets which includes our brand, product innovations, IT systems, awards
and accolades, compliance, corporate culture and business ethics. Tacit
knowledge, which is the expert knowledge gained by working in the
organisation for a long period of time, is an important resource which has
a significant impact on innovation. This is a very relevant asset in the value
creation process of our Company.
Intellectual capital value creation model
zzTotalInvestment in IT Campaign zzBest Life Insurance brand zzEnhanced brand equity

systems Rs. 340 Mn. Management, research zzService enhancement zzEfficient
systems and
zzInvestment in brand and development, zzInnovative Products processes
building process and service zzSystem upgrades zzEnhanced service
zzInvestment in Product enhancement zzAutomation and delivery and
innovations Digitisation convenience
zzEmployeetraining zzEmployee skills and zzCustomer centricity
programmes experience
zzEnhanced brand value
Highlights for 2017
Peoples Life Insurance Ceylinco Life Brand moved up to Best Life Insurer for the 4th
Brand of the Year for the the 12th position in Business time by World Finance UK
11th consecutive year Today Brand ranking
Only insurance company Staff experience – 333 employees

selected amongst the top with over 15 years of service
20 brands by InterBrands
Sri Lanka
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Intellectual Capital 93

Intellectual capital contributing to value creation
By nurturing an effective knowledge sharing and learning organisation with a strong brand
reputation we are able to achieve an improved performance, create innovative products and thereby
boost our competitiveness in the market. In particular, Company’s tacit knowledge is an important
driver of the innovation process which is a significant success factor. This in turn improves the
profitability and sustainability of our Organisation.
Increasing our intellectual capital value
We increase the value of intellectual capital by fostering a culture of innovation and continuous
improvement, maintaining a strong compliance culture, developing our processes and systems,
nurturing an open and proactive work environment, strengthening our positive brand reputation and
brand image and being always customer-centric in our operations.
Organisational knowledge
We have nearly one million Sri Lankan lives
covered by active life policies and have
been the market leader in Sri Lanka’s life
insurance industry for 14 consecutive years.
We have won the trust and confidence CONFIDENCE, AMBITION
of nearly a million people. Our in-depth AND PROGRESSION
knowledge of the industry and expertise
have enabled us to build a reputation
of having the best and innovative life
insurance plans, of being the best in claim
settlements, offering exceptional customer
service and rewarding our policyholders
with industry-leading benefits.
In addition to operating the largest branch

network in Sri Lanka’s life insurance
industry, we employ the industry’s largest
sales consultants. Adopting effective PROTECTION AND
LOVE AND CARE
strategies, we sustain our growth TRUST
momentum by successfully adapting to
the changing environment. We inspire our
policyholders to successfully progress in
life by offering innovative products for each
life stage.
94 Intellectual Capital PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Corporate culture Brand and its development Brand equity

Culture encompasses who we are and Ceylinco Life Brand is synonymous with The brand equity is a brand’s value
is an enabler to live our purpose. It is trust, leadership, innovation and inclusivity. determined by consumer perception of
about how we interact with one another, Our brand mission is to be the most and experiences with the brand. A strong,
our customers and society, and how we trusted, acclaimed and progressive life positive brand is a powerful factor in
live our values. We can only maintain insurer in Sri Lanka, providing innovative driving customer loyalty which is a strong
our position as the undisputed leader if need-based life insurance solutions to factor in winning greater market share.
we have the right cultural norms and customers, industry leading rewards The drivers of brand equity includes, brand
behaviours in place. Hence, maintaining to employees, creating successful awareness and consideration, product
high employee engagement, customer partnerships with stakeholders and and service offering and Company image.
centricity, fostering a high-performance ensuring sustainable business practices. Whilst we continually portray ourselves as
company culture and open communication Even as our logo symbolises protection, the number one life insurer in Sri Lanka,
are important focus areas for us. love, care, trust, confidence, ambition the brand index for Ceylinco Life ranked on
and progression to our policyholders, our top compared to peers, which has helped
We nurture an open culture, sharing and tagline “A Relationship for Life” signify the us to consolidate our market leadership in
celebrating success and best practices long standing relationships we nurture the industry.
to create a sense of pride and trust with each of our stakeholders based on
among our people. Customer centricity trust. Our brand also demonstrates our
and delivering unwavering quality and key values – PRIDE; which stands for
excellence are other important aspect of Professionalism, Rewarding, Integrity,
our Organisation. Dedication and Excellence.
We also believe in developing leaders During the year under review, we invested
internally which is an important in revitalising the Ceylinco Life Brand. We
competitive advantage. Hence, succession also invested in corporate brand related
planning is an integral aspect of our campaigns. These expenses were made in
corporate strategy as we seek to build a order to develop and maintain our brand
strong bench of inspirational leaders across reputation in the market. The success of
all leadership levels to ensure continuity these initiatives is reflected in the positive
and long-term growth for our business. results we continue to achieve as per the
At the same time we focus on developing independent brand health study conducted
our people by creating opportunities to track our brand positioning.
for faster development, building the
correct knowledge, skills and experience, Based on brand tracking studies conducted
embedding our corporate values. by an independent market research
organisation over a period of time, Ceylinco
We also foster a workforce that reflects Life Brand is perceived in the market as a
diversity by actively attracting and socially responsible and customer Oriented
retaining employees from a range of company, offering attractive benefits and
backgrounds. Whilst work-life balance is promotions, competitive premiums and
an important aspect of our culture, our flexible insurance solutions. According to
employees are encouraged to present the study, our brand maintained high top of
themselves in a professional manner, mind brand recall, high brand equity index
with a deep commitment to integrity. and a strong brand leverage.
All our activities are reinforced with good
governance and ethics. It’s an environment
where our people are proud to work. As
per our tagline, we nurture a relationship
for life with all our stakeholders, creating
a deep commitment and loyalty as their
progress drives our own.
Our new brand campaign

IT systems and processes Whilst our business processes are systems which provide business insight for
centralised, we have introduced a sales effective decision-making.
We make the best use of all our systems app and electronic devices to our sales
and processes to deliver the best value force to provide an efficient service to our
to all our stakeholders. In doing so, we
SAP implementation
customers. We have provided a host of
constantly monitor the security of our applications for users such as simplified
and e–submission
systems and effect the necessary upgrades version of collection modules and policy We initiated the implementation of the
to ensure data protection and system level benefits, information required by state-of-the-art ERP system SAP HANA for
uptime. We also constantly develop our business heads for team evaluation the Finance and Investment Divisions. SAP,
internal processes to ensure smooth and purposes and document management as a world renowned application system,
efficient operations. solutions. We also develop in-house is very strong in the finance sector. The
96 Intellectual Capital PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
implementation was started in November on ethical compliance. Employees can Awards and recognition
2017 and the full benefits of the project approach their immediate supervisor, Head
will be derived in the latter part of the of the Department on any ethical matters. We have made every effort to improve
next year. Further, they can also consult the Senior our corporate ranking in the market which
Manager – HR if needed. is a strong testament of the strong brand
E-Submission System will digitalise the reputation and our standing in the industry.
manual proposal processing, and leverage We continued to be felicitated for our
the process from prospect creation to
Employee skills efforts as evidenced through the numerous
policy issuance, while reducing the and tacit knowledge awards and recognitions received during
turnaround time and operational cost the year.
Having been in the life insurance
and increasing the productivity of the business for over 30 years, we have For the 4th consecutive year, we were
sales personnel. This project will also be acquired a wealth of expertise in the adjudged the best life insurer in Sri Lanka,
completed in 2018. areas of underwriting, actuary, claim by World Finance, U.K., having emerged
management, investment management, on top on a number of parameters
Governance structure financial management and risk including customer retention rate; average
management. A majority; 77% of our time in claim settlement; new customer
Our governance structure plays a crucial
employees have been with the Company acquisition rate; average cost per policy
role in building the intellectual capital
for over 5 years. They have accumulated and net premium.
providing strategic direction and ensuring
a vast store of tacit knowledge which is
rigorous review of performance against
usually a part of a long-term accumulated We were also adjudged the Peoples Life
agreed goals. Pages 165 to 185 give a
learning process. This is an important Insurance Brand of the Year at the 2017
comprehensive description about our
driver of innovation and a competitive SLIM-Nielsen Peoples Awards, reaffirming
Corporate Governance framework and
advantage for our Company. We have our status as the most popular insurer in
practices. Evolving over time and fit for
enhanced the tacit knowledge by retaining the country for the 11th consecutive year.
purpose, they safeguard the Company’s
our employees and providing opportunities This is a reflection that we do everything
reputation and risk profile on daily basis,
for sharing and transferring of tacit for our policyholders, and we insure
providing guidance on conduct of business
knowledge. We are also in the process the lives of about 5% of our country’s
throughout the organisation.
of documenting the tacit knowledge for population, making us truly the life
future reference. insurance company of the people.
Ethics and Code of Conduct
We are committed to upholding the Service Category 2> 3-5 6-10 11-15 16-20 21-25 25< Total
highest level of ethics in all our operations.

Executive Directors 0 0 0 0 1 0 4 5
We also conduct operations in a fair
and transparent manner. All our staff Senior Managers 1 4 9 5 4 8 10 41
members voluntarily comply with Ceylinco Manager 0 0 2 3 9 10 1 25
Life’s Code of Conduct which is a list of Asst. Manager 6 7 5 8 3 9 4 42
stringent guidelines. These guidelines are
Branch Head 6 1 41 29 17 12 2 108
communicated throughout the Organsiation
through an effective communication Career Sales 0 0 13 8 15 11 2 49
process. The basics of the Code of Conduct, Executive 83 91 130 92 69 75 37 577
values and ethics are explained to the Staff 1 1 7 4 6 16 8 43
new recruits at the induction programme.
Total 97 104 207 149 124 141 68 890
In addition, the Code of Conduct is made
available on the Company’s HR portal
for easy reference of our employees.
Our corporate culture, values and ethics
are reinforced to employees at quarterly
employee induction programmes as well.
In addition, all heads of departments are
empowered to guide their associates

In recognition for his contribution towards
the finance industry Mr Palitha Jayawardena
received the CMA Professional Excellence
Award and the Professional Excellence Award
for Digital Transformation from the Institute
of Certified Management Accountants of
Sri Lanka.
In addition, we were chosen amongst to foster an open and rewarding culture,

Sri Lanka’s Best 20 Brands and is steeped on our corporate values and strong
incidentally the only insurance company compliance.
selected amongst the elite list of brands
by Interbrands, the world’s leading brand
listing agency.
Future outlook
We will strengthen our brand by offering
For the fifth consecutive year, we earned industry-leading benefits and promotions,
the honour of being the only insurance competitive premiums and flexible
company amongst the “Business Today insurance solutions to our policyholders,
Top 30” companies in Sri Lanka. We have being socially and environmentally
moved up the corporate ladder to the 12th responsible, customer-centric and
position, achieving a truly unique feat. promoting the well-being and motivation Ms Upamalika Ratnayake received the CIO
of the Year Award at the FITIS Women in IT
of our employees. We will continue to
Awards 2017.
reach out to customers around their
Challenges faced important life triggers to grow our product
Redefining our value proposition based sales even more significantly in the years
demographic changes and consumer ahead through product innovation and
preferences. Need to offer our products exploiting new distribution channels.
and services to an increasingly digitally
savvy customer segments by exploiting
new avenues of distribution.
Focus for 2018

We will continue to reinforce our brand
through brand visibility and awareness
campaigns. Through training and
development the knowledge and expertise
of our employees will be developed further
whilst providing awareness and training
on the Code of Conduct. We will continue
98
MANUFACTURED
CAPITAL
Manufactured capital which is integral to our value creation

process consists of the physical infrastructure, particularly our
branch network, IT infrastructure and fixed assets that support
the provision of life insurance solutions.
Manufactured capital value creation model
zzInvestments in Utilising available zzExpanded branch zzExpanded customer

physical assets physical resources network reach
zzInvestmentin and optimise the zzRental income from zzEnhanced customer
new branches usage properties service
zzInvestments for zzNumber of new zzEnvironmental
upgrading the IT branches opened friendly branches
facilities
zzTraining space zzEnhanced
zzNew look to the productivity and
zzUpgraded IT facilities
branch network efficiency
Highlights for 2017
One new branch and shifted Invested Rs. 903 Mn. in 35 own buildings islandwide
one rented branches to our property, plant and equipment
own buildings
More than Rs. 100 Bn.

of Total Asset
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Manufactured Capital 99

Investment in (Rs. Mn.)
freehold and buildings
Manufactured capital contributing to value creation 500
Efficient use of manufactured capital enables us to be flexible, 400
responsive to market and societal needs, innovative and

faster in getting our products and services to the market. Also, 300
manufactured capital and technology reduces resource use and

enable us to focus more on human creativity, thereby enhancing 200
both efficiency and sustainable development of
our organsiation.
100
0
2016 2017
Increasing our manufactured capital value Freehold land
Buildings
We continue to invest in the growth of these assets, reducing

our environmental footprint and enabling compliance with Our branch network
regulatory requirements. Given the increasing concerns about
environmentally-sustainable business practices, we have Our aim is to reach the unpenetrated
customer segments in our nation through
reformulated our branch expansion strategies to reduce the
our wide branch network; the largest in
environmental footprint, while expanding our physical presence the industry. Through our network of 273
in Sri Lanka to reach the underpenetrated customer segments branches, we are present in every province
across the island. We have also allocated sufficient capital in Sri Lanka.
to maintain and upgrade our manufactured capital to ensure
smooth and sustainable business operations. Our branch expansion strategy is to own
our office buildings for cost-saving and
investment purposes by operating from
company-owned buildings. We believe,
a relationship for life cannot be built on
an unstable foundation. Just like a family
needs a strong and secure home to make
a positive contribution; we too continuously
strive to build a strong, secure platform by
setting up branches mainly in company-
owned property.
100 Manufactured Capital PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Shown below is an analysis of our own and leasehold branch network.

Branch Branch Branch
Akkaraipattu Hettipola Middeniya

Akuressa Ja-ela Nattandiya
Aluthgama/Beruwala Jaffna Negombo
Ambalangoda Ingiriya Nittambuwa Lease Buildings 119
Ambalantota Kalmunai Nochchiyagama
Ampara Kadawatha Nugegoda Own Building 21
Anamaduwa Kekirawa Nuwara Eliya
Anuradhapura Kaduruwela Nelliadi Total 140
Athurugiriya Kaduwela Nikaweratiya
Avissawella Kalutara Neluwa
Alawwa Kandana Narammala
Atchuvely Kandy Padaviya
Aralaganwila Kantale Panadura
Badulla Katugastota Panduwasnuwara
Balangoda Kegalle Pannala
Bandaragama Kelaniya Pilimathalawa
Bandarawela Kesbewa Piliyandala
Battaramulla Kirindiwela Puttalam/Norochchole
Batticaloa Kolonnawa Pelmadulla
Beliatta Jampetta Street Ratnapura
Bambalapitiya Kottawa/Homagama Rikillagaskada
Boralesgamuwa Kuliyapitiya Ruwanwella
Baddegama Kurunegala Rambukkana
Bibile Kalawana Sooriyawewa
Chilaw Kirulapane Tissamaharama
Chunnakam Kamburupitiya Trincomalee
Chavakachcheri Kahatagasdigiliya Teldeniya
Chenkalady Kochchikade Thambuththegama
Dambulla Kaluwanchikudy Uragaha
Dankotuwa Kilinochchi Valachchanai
Deniyaya Maharagama Vavuniya
Divulapitiya Mahiyangana Veyangoda
Dehiattakandiya Maho Warakapola
Delgoda Maradana Wattala
Elpitiya Matale Welimada
Embilipitiya Matara Weliweriya
Eheliyagoda Matugama Wennappuwa
Galgamuwa Mawanella Wellawatta
Galle Medawachchiya Wadduwa
Gampaha Minuwangoda Wariyapola
Gampola Mirigama Wellawaya
Godakawela Monaragala Wattegama
Ganemulla Moratuwa Yakkala
Galenbindunuwewa Malabe Mt Lavinia
Hatton Mawathagama
Hingurakgoda Melsiripura
Horana Manipay
Hanwella Mannar
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Manufactured Capital 101
Iconic branch buildings of Ceylinco Life.

102 Manufactured Capital PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
New branches Information technology Focus for 2018

During the year, we opened a new branch Our IT Department is a key support We will continue to expand our branch
at Chilaw and shifted our rented branch department that impacts the entire network. The construction of the Kadawatha
at Hettipola to our own building. Whilst business operations of our Organsiation. Branch will be completed and will be
expanding our reach, we strive keep the IT enables operational efficiencies which opened in January 2018. Further, we will
carbon footprint at minimal levels by provide us a competitive edge through commence construction of three new
installing more environmental-friendly enhanced customer experience. Hence, green buildings in Jaffna, Ja-ela and
features in our branch buildings. These we conduct regular maintenance and Nugegoda. These are expected to be
branches have minimal impact on the necessary upgrades to keep pace with opened in 2019.
environment. The construction cost of the increasingly complex operating and
company-owned branches is borne by regulatory environment. We continued
internally-generated funds, which is a
Future outlook
to streamline our business processes
strong indication of the financial stability to achieve operational efficiencies as We will continue to expand our branch
of our Company. well. Accordingly, certain processes were network to reach untapped customer
streamlined through IT during the year segments in line with our vision of
resulting in significant productivity gains taking the message of life insurance and
Investment in property,
and cost savings. retirement planning to every Sri Lankan.
plant and equipment Our strategy is to set up company-owned
During the year under review, we invested buildings to realise cost-saving and for
Challenges faced investment purposes.
Rs. 903 Mn., to secure new land and
property in order to facilitate the expansion zzAvailability
of strategic locations to
of our branch network. purchase property to set up branches We will conduct necessary operational
zzManagement of construction projects evaluations, regular upgrades and
Our investments in property, plant and and meeting the project deadlines and needed IT investments to ensure smooth
equipment has significantly grown during budget targets business operations, enhance customer
the past years which has added a great experience, strengthen internal controls
zzCyber security and vulnerability of
value to the business. and compliance and provide improved
IT infrastructure
information to facilitate effective
Significant investments were also made decision-making.
to develop and upgrade Company’s IT
infrastructure which is essential to the
We will continue to expand our branch network to reach untapped customer
rapid digitalisation goals of our Company.
segments in line with our vision of taking the message of life insurance and
These goals are designed to empower
retirement planning to every Sri Lankan.
employees to consistently deliver an
outstanding customer service.
Rs. Mn. Growth in property, Rs. Mn.
plant and equipment

234 280 123 154
2016 2017 2016 2017 2016 2017 2016 2017
Motor vehicles Computer equipment
Rs. Mn. PROPERTY, PLANT Rs. Mn.

AND EQUIPMENT
225 225 124 115

2016 2017 2016 2017 2016 2017 2016 2017
Office equipment Furniture and fittings
THE VALUE OF SENSITIVITY
STEWARDSHIPManufactured
FINANCIALCapital
REPORT SUPPLEMENTARY INFORMATION Manufactured Capital 103
In life’s more vulnerable moments such as death or

disability, Ceylinco enshrines empathy and understanding
across all its interactions.

104
SOCIAL AND
RELATIONSHIP CAPITAL
Social and relationship capital at Ceylinco Life includes a diverse

range of relationships fostered mainly with our investors,
customers, business partners, and the community. We continually
strive to nurture relationships for life with each of our
stakeholders, on which the success of our operations depends on.
Social and relationship capital value creation model
zzMore than 3,600 Compliance and zzBonuses to zzCustomer loyalty

sales consultants policyholders
governance, zzStrong business
Rs. 3.8 Bn.
zzBusiness customer value partnerships
zz44 MDRT qualifiers
partnerships addition, social zzEnhanced branch
zzReinsurers, share
zzReinsurance relationships, of customer claims, network
premium paid environmental Rs. 197 Mn.
zzResponsible
Rs. 422 Mn. stewardship, zzReinsurance
corporate
product innovation, commission and
zzInvestment citizenship
profit received,
in community business ethics Rs. 78 Mn. zzMotivated sales
projects customer profiling zzCommissions to force
zzRegulatory sales consultants
compliance Rs. 1.7 Bn.
zzEnvironmental
conservation
zzProducts and
services
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Social and Relationship Capital 105

Social and relationship capital contributing to value creation
The success of our business depends on the strength of stakeholder relationships and the well-being of
communities we operate in.
Increasing our social and relationship capital value
We increase the value of social and relationship capital by building trust through responsible operations
and sustainable business practices. We work in partnership with communities, government, customers,
business partners and investors to deliver winning solutions that increase sustainable stakeholder value.
Highlights for 2017
Society Business partners
zz Thirteen Waidya Hamuwa Rs. 1.7 Bn. commissions

zz
projects in 2017 paid to independent

contractual agents
zz Three school development
projects in 2017 44 Mn. Dollar Round Table
zz
(MDRT) qualifiers
59 Highflyers Club
zz
qualifiers
Customers
Reinsurance expense of
zz
zz Rs. 3.8 Bn. as bonus payments Rs. 422 Mn.
zz 2,260 Family Savari participants
Investors
zz Rs. 75 Mn. increase in dividend payout

zz Rs. 3.4 Bn. transferred to investors as one-off surplus
zz Rs. 5.2 Bn. accumulated in 2017 in retained earnings
106 Social and Relationship Capital PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
INVESTOR CAPITAL
Net assets per share (Rs.)
Our Company, Ceylinco Life is a fully-owned 500
subsidiary of Ceylinco Insurance PLC. 400
We focus on prudent profitability growth 300
whilst strengthening our financial stability.

200
100
By definition, investors are stakeholders

Return on equity (%)
that allocate capital with the expectation 0
of a future financial return. At Ceylinco Life, 37.5 2015 2016 2017
our investors play a key role in our value

creation process. They provide the capital 30.0
necessary to fuel our operations. We Economic value added
continually strive to maximise shareholder
wealth through sustainable and increased 22.5 This is a measure of our performance
returns. We do this by growing our profits focused more on value creation for
and delivering healthy financial returns 15.0
our shareholders rather than just the
whilst maintaining transparency, integrity, accounting profits. Through efficient use
and sustainability in our operations. of capital and higher profits we have
7.5 delivered increased returns to shareholders
over the years.
Shareholder profile
0
Our Company, Ceylinco Life is a fully-owned 2015 2016 2017 Year ended 31 December
subsidiary of Ceylinco Insurance PLC. We
focus on prudent profitability growth whilst
Invested equity
strengthening our financial stability. That’s
why we have recorded a steady increase Shareholders’ funds
in profits and assets over the years as Add: cumulative loan loss provision/
detailed under “our standing” on page 39. provision for impairment
Total
Return to shareholders Earnings
Description 2017 2016 2015 YoY Growth (2017)

Profit after tax and dividend on
% preference shares
Add: Impairment provisions and
Profit for the year (Rs. Mn.) 9,467 3,079 2,060 207
other losses
Return on equity (%) 45.85 25.85 21.81 35
Less: Loan Losses Written Off
Net Assets per share (Rs.) 412.93 238.24 188.93 44
Total
Earnings per share (Rs.) 189.35 61.58 38.03 95
Dividends per share (Rs.) 9.00 7.50 6.25 20 Cost of equity (based on 12 months
weighted average t-bill rate plus 2%
Dividend payout ratio (%) 7.49 12.18 16.44 39
for risk premium) (%)
Dividend cover (Times) 21.04 8.21 6.08 63
Cost of average equity
Economic value added
Dividend policy We maintain an optimal balance between

Economic value added (Rs. Mn.)
dividend payment and retention to ensure
4,000 The dividend policy of our Company is shareholder wealth maximisation.
based on providing a dividend that is fair
both to the shareholder and the Company.
3,200 EPS and DPS (Rs.)
Therefore, we ensure that we pay an
attractive dividend whilst maintaining 375
2,400 adequate funds to meet solvency
requirements of the Companies Act No. 07
300
of 2017.
1,600
The profitability of a life insurance 225

800 company is decided by the actuary after
the annual actuarial valuation. Once the
150
0
actuary ascertains the surplus for the year,
2015 2016 2017 the Company’s Board of Directors declares
the dividend. 75
Dividends 0
2015 2016 2017
In the year under review, Rs. 450 Mn. was
paid as dividend to our sole shareholder, EPS
Ceylinco Insurance PLC. The Board has DPS
declared a dividend of Rs. 9 per share for
the financial year ended 31 December 2017.
Challenges faced
We did not raise additional capital during
the year under review. This was because
2017 2016 2015 2014 2013
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
we had adequate retained earnings
and reserves for growth and expansion
whilst satisfying the capital adequacy
17,190,714 11,911,829 9,446,370 8,890,550 7,628,393 requirements. Hence, we did not encounter
challenges pertaining to capital during the
fiscal year.
– – – – –
17,190,714 11,911,829 9,446,370 8,890,550 7,628,393
Focus for 2018
9,467,426 3,079,041 2,060,046 1,362,987 1,240,387
We will continue to maximise shareholder
wealth through sustainable and increased
returns. We will do this by generating
– – – – –
increased profits and delivering attractive
financial returns. We will also maintain
– – – – – a healthy capital base to meet capital
9,467,426 3,079,041 2,060,046 1,362,987 1,240,387 adequacy requirements.
Future outlook
12.05 11.92 8.60 8.69 12.62
We will continue to grow the positive
2,071,481 1,419,890 812,388 772,589 962,703 economic value generated by our
7,395,945 1,659,151 1,247,658 590,398 277,684 operations.
CUSTOMER CAPITAL
We have nearly one million lives covered by active life policies,

equivalent to approximately 5% of our nation’s population. Broadly,
our customers comprise mainstream and upper mainstream
individuals in the 25 to 45 age category.
Overview Analysis of ambitious, and driven by achievement. Our

customers give high priority to stability and
The customer is at the heart of our our customers security and are interested in investing in
business. We have built our product and We have nearly one million lives retirement planning.
service offerings around the specific needs covered by active life policies, equivalent
of our customers and built Sri Lanka’s to approximately 5% of our nation’s Customers in force – 2017
largest life insurance company that make a population. Broadly, our customers
significant difference to people’s lives. comprise mainstream and upper
We are protecting the lives of nearly mainstream individuals in the 25 to 45
one million Sri Lankans by offering a age category. 58% of our customers
wide product range, outstanding value 42%
are male whilst the balance 42% are
propositions, extensive distribution female. In terms of employment, they
channel, unmatched quality, and service comprise executives, middle managers, 58%
standards. This has enabled us to build a professionals, entrepreneurs, Government
strong customer capital over the years. employees, and self-employed individuals.
They are largely from the urban,
Male
semi-urban, and rural economies of
Female
Sri Lanka, and are strongly family oriented,
Product portfolio
Our product offering is innovative, flexible and cost effective. They cater to every life stage of our customers.
Life insurance plans Ceylinco Life Ran Daru

This is the only product in the market providing a high
Ceylinco Life Endowment life cover to children along with educational and medical
This is a unique plan which enables the policyholder to benefits. In case of accidental death, a life cover of ten to
customise the insurance cover. Whilst it guarantees a twenty times the basic sum assured is provided.
return at maturity, the cover can be customised based on
policyholder’s income and add on optional protection covers
as well. The product offers affordable premium payments
and higher benefits to the policyholder.
Ceylinco Life Advance Payment Ceylinco Life Uthum

A unique and innovative product which pays advance Provides a comprehensive cover to policyholder and
payments regularly and the balance amount at maturity dependants and a free life time cover even after the
with bonuses. Even though advance payments are made, policyholder receives the maturity value. The death
the life cover is not reduced. benefit in the event of a sudden loss of life can be
increased up to six times the basic sum assured as well.

Ceylinco Life Degree Saver Ceylinco Life Double Growth
The Degree Saver product was introduced as a solution The life cover of the policy is increased
for parents who dream to provide their children the best by 5% to 10% each year to compensate
education possible. Higher education, especially overseas, for inflation.
is an expensive investment and there was a void in the
market where a long-term product which would act as an
education fund and provide protection to the policyholder
was not available.
The Degree Saver plan is a product which has the two

vital components of an accumulation fund which would
grow to provide a substantial maturity for the policyholders'
children to use for their tertiary education and a life
insurance component which would provide peace of
mind to the family.
Ceylinco Life Sipsetha Ceylinco Life Retirement Plan

Sipsetha is a unique plan that provides support to children Facilitates the policyholder to build a large retirement
during their decisive GCE Ordinary Level, GCE Advance Level fund with personalised benefits. This product has a range
and higher studies. If a child is left without parental support, of attractive features as well, including flexible monthly
Sipsetha triples the annuities and waive future premium contributions, selection of the age of retirement, and the
payments. period over which contributions are made.
Ceylinco Life Supreme Ceylinco Life Whole Life Plans

This is a rewarding policy that combines a life insurance This is a personalised policy with added protection for a
policy and an investment policy. The policy provides a lower premium. Policyholder can select from two product
comprehensive life cover and optional rider covers such options based on the requirement.
as critical illness, major surgery and hospitalisation. It also
provides financial returns every four years through lump
sum payments and an above average maturity value.
Ceylinco Life Saubhagya Family Takaful Pilgrimage Plan

This is a specially designed policy for women providing A plan specially designed to enable spiritual pilgrimages
a comprehensive life insurance cover and lump sum to Mecca. The plan has four options and additional
payments with attractive savings. benefits to select.
Family Takaful Education Plan Rider Benefits

The Family Takaful Education Plan is the second Takaful
Ceylinco Life Family Digasiri Plus
product that has been introduced by the Company. The
plan provides financial benefits to the participants children Covers the whole family against 36 critical illnesses and
to continue their education uninterrupted. It also stands as provides financial support to obtain treatment from either
an asset that could be made use of in the future for the local or overseas hospitals.
children's higher education.
Micro Insurance Ceylinco Life Major Surgery Benefit

Provides cover against expenses for 526 types of
Ceylinco Life Pradeepa surgeries and benefits include annual incremental benefits
A policy for low income earners that provides adequate and permitting the policyholder to draw up to three times
cover at an affordable price. A life cover of Rs.100,000/- for the value of the policy.
a term of five years is provided for a single premium of
Rs. 1,250/-.
Ceylinco Life Family Hospital Ceylinco Life Extra Cover

Cash Benefit A cover specially designed to enhance cancer
Upto Rs. 12,500/- per day is provided to the policyholder and treatment benefit, provided under Digasiri plan scheme in
his family including children over six months of age for each the event the insured is diagnosed with cancer.
day spent in hospital. An additional Rs. 5,000/- is paid daily
for Intensive Care Unit treatment irrespective of daily benefits.
The claims are paid based without the submission of bills.
Ceylinco Life Health Support Ceylinco Life Jeewa Yathra

The Health Support rider which can be added on to the In the event permanent disability prevents the
main life cover, reimburses hospitalisation expenses for policyholder from earning a permanent income, Jeewa
hospitalisation due to a pre-agreed number of critical Yathra guarantees a steady monthly income. Benefits
include a guaranteed lump sum payment, in the event of
illnesses, major surgeries and day care surgeries.
a death due to accident or partial disability.
Family Income Benefit Family Protection Benefits

The policyholder receives an annual payment for Policyholder receives the option of enhancing the life
10 years. insurance coverage.
Ceylinco Life Yugadivi

This is a special benefit offered to the spouse of the
policyholder. Yugadivi enables the policyholder to
extend the same cover to his/her spouse for a small
additional payment.
New products higher education will continue even if they rights to have fair information. This enables
lose their lives before the policy matures. customers to make informed decisions.
launched in 2017
Our marketing communications which
Degree Saver The policyholder can select the frequency are conducted in all three languages
This product is structured combining the of premium payments, term of the policy reflect and support our corporate image.
features of a life insurance policy and a and has the option to purchase additional Communication of our products and
savings scheme, to create an education benefits such as critical illness, major services is always based on principles of
fund-based on an agreed premium and surgery, hospitalisation and accidental ethical and responsible advertising. Hence,
policy term, while offering life cover for death or disability. all communications comply with technical
the duration. guidelines of the product and its features
Protection PLus ensuring the customer is not misled.
The Education Fund will accumulate for the We provide all information mandated
This is a life insurance plan targeting the
term of the policy with interest calculated by the IRCSL and avoid racial content or
Sectors A and B customers. It is a 5-year
at an accumulation rate, declared by the inappropriate imagery. We also ensure
product with higher returns at maturity.
Company on a monthly basis, ensuring the information is transparent and doesn’t
that a fund adequate to meet the family's infringe intellectual property rights.
higher education costs will be available Product and service
Our product details are made available
when the policy matures. labelling and marketing to customers through website, brochures
communications available at all our branches and through
The protection component of the Degree
Saver policy provides life insurance cover to We disseminate clear, accurate, timely, and the Call Centre which operates from
the parents, offering them peace of mind relevant information about our products 8.30am to 5.00pm on all business days.
knowing that their child's or children's and services because we respect customer The policyholders are also made aware
about our products by sales officers Operational excellence Bancassurance

through a product quotation at the time
of purchasing a policy. After the proposal We focus on delivering unwavering In our efforts to take the message of life
form is filled along with the consent of quality and excellence that goes beyond insurance into every Sri Lankan household,
the policyholder, the policy document is the expectations of our customers. One we tie up with banking institutions
issued. At the time of delivery of the policy of our important strategic initiatives to sell our life insurance products and
document, the officer further explains the in this regard is to ensure quality. We collect premiums from customers with
features of the policy. do this by continuous investments to convenience.
improve efficiency and effectiveness
of our operations and by nurturing a
Customer touch points customer-centric organisation culture. Premium payments
We offer our broad range of life insurance at post offices
solutions across all 25 Districts in Sri Lanka, Fund transfers and We have partnered with Sri Lanka Post, to
through our widest network of branches
across the island. In addition, we have
premium collections give our policyholders in Sri Lanka another
4,000 plus outlets to pay their premiums.
deployed multiple channels to connect In our continuous efforts to provide The milestone agreement signed by
with our customers including our over an excellent quality of service to our Postmaster General and Ceylinco Life has
3,600 Strong sales force, bancassurance, customers, we have taken steps to paved the way for 653 Post Offices and
online channels and direct marketing. Our enhance customer convenience by offering 3,410 Sub Post Offices to collect insurance
Head Office provides after sales service multiple channels of fund transfer and premiums from Ceylinco Life policyholders.
to any walk-in customer and anyone can make premium payments. Hence, in A fine example of a private sector – public
obtain our services by calling the Ceylinco addition to our 270 plus branches which sector partnership, has a win-win for
Life Call Centre (hotline: +94 11 246 1461). operates across the country, we have both sides. Whilst this is a new source
made available the option of paying of revenue for the Postal Department,
Additionally, information about us, premiums from their Dialog mobile phones we have reduced the cost of premium
including our product and services via the “eZ cash” m-commerce programme, collection through this arrangement.
are made available on our website via the mCash Mobitel network and via the Premium collected from post offices was
www.ceylincolife.com. Our life insurance Company’s website www.ceylincolife.com. Rs. 886 Mn. in 2017.
products can be purchased online without The policyholders can also receive their
the presence and assistance of an claims through their respective banks,
insurance representative, increasing the including the transfer of hospital claims, Customer Relations
convenience of our customers. surrender benefits and policy loans. Department (CRD)
We have expanded this facility to include
The CRD, established in 2004 with team of
Our multiple channels of distribution are death claims, maturities and advance
just four members has expanded to over
shown below: payments as well.
sixty members with five sub-departments.
The department, which is a key “service
arm” of our organisation comprise of a
team of dedicated individuals who are
website 273 committed to delivering an excellent
www.ceylincolife.com Branches
service to our customers.
The sub departments are the Call Centres,

CUSTOMER Customer Customer Retention Unit (CRU), Sales
3,696
Relation
Sales force TOUCH POINTS Department
Support Centre (SSC), Direct Marketing
Unit (DMU), and Customer Relationship
Management Unit (CRM).
Bancassurance Each unit plays a vital role within the

organisation structure to collectively
provide our customers with best service
experience in the industry.
Shown below is how our CRD is organised to deliver a better customer service:
CRD
Customer Relations Call Direct Marketing Sales Support Customer Relationship

Unit Centre Unit Centre Management Unit
Our customer contact points

Service levels

We are happy to maintain high service
levels over 90% as illustrated in the graph
below. This is a testament of our excellent
customer service standards.
Service Level (%) Complaint handling process

100
Customer complaint
98
96 Lodge to the CRM system
94
Issue a reference number
92
Acknowledge the customer according

90
to the mood of complaint
Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
2016 Service Level 2017 Service Level Inform the end result to the customer
Call count comparison (No.) policyholder from the day of opening a Follow-up on the complaint
policy till the policy matures, including
115,000
after sales services.
114,000
Complaint handling Number of complaint handled
In 2010, we introduced the Customer Given below are the details of the
113,000 Relationship Management (CRM) system complaints received for the year ended
to handle complaints and inquiries in an 2017. A total of 2,223 complaints were
efficient and speedy manner and to add received during this period.
112,000
increased value to customers to maintain
Description Total
their trust.
111,000 Brought forward from 2016 442
The CRM system was made available in all
Number of complaints received 2,223
110,000
our branches and the Customer Service and
Contact Centre was made responsible to Number of complaints resolved
2016 2017
in-house by the Company 2,550
Received calls
handle all complaints methodically.
Number of complaints not
Answered calls
resolved and escalated to disputes 66
Carried forward to August 2017 115

Calls management
We have in operation an inbound and Outbound operation
outbound unit to manage phone calls. The outbound division handles the
The inbound unit handles all incoming policyholder from the day of opening a
complaints, claim related calls and policy till the policy matures, including
inquiries. The outbound unit handles the after sales services.
who are unreachable through conventional Performance

channels, through our innovative online The revenue generated by the Sales
Outbound products and efficient online delivery
Operations Support Centre has been consistently
channels. Accordingly, we are able to increasing over the years.
effectively reach the urban and semi-urban
customers and Sri Lankan expatriates
through non-traditional direct marketing Customer Relationship
Welcome calls methods. Management Unit (CRM)
The Customer Relationship Management
Outbound direct marketing Unit was established in 2007 under the
The Direct Marketing Executives call CRD to retain and maintain high value
Lapse policy call current, former and potential customers customers. It is mandatory to for this Unit
from a directory/database listing to to maintain exceptional service standards,
promote Company’s insurance products. as they serve, the Company’s Premium
They also respond to customer queries, Club members.
and establish point of sale opportunities
Call on the advance payment for future referrals or leads. The Unit provides, value addition to
and future maturity
customers through loyalty programmes
and by implementing new processes
Inbound direct marketing
and IT infrastructure to support such
Inbound Direct Marketing Executives, value additions. The functions of this Unit
Maturity call respond to new leads generated through includes, conducting Premium Club loyalty
customer requests made to the Call Centre programmes to reward Ceylinco Life's
and through the digital channels. They also high value customers, make available an
help customers to complete online policy organised online e-document process for
purchasing documentations and offer policyholders to manage their policies
Database marketing quotations as well. with utmost ease and security, handling
rejected credit card standing orders and
Performance returned cheques of policyholders and
cleaning up and eliminating redundant
Year 2017 was a tremendous year for the
Direct Marketing Unit documents while reducing the number
DMU with commendable results generated
of complaints. In addition, cost effective
The Direct Marketing Unit (DMU) is a both online and traditional direct marketing
and user-friendly auto-settlement options
newly established unit which drives channels. The DMU contributed Rs. 25 Mn.
have been introduced to offer ultimate
the Company’s sales through online to the Company’s annual premium income,
customer convenience.
delivery channels. of which Rs. 21 Mn. was collected by the
Direct Marketing Channel and Rs. 4 Mn. by
Even as Sri Lanka’s insurance industry the online channel. Customer satisfaction
is witnessing a strong growth inclination
with the rise in per capita income Customer feedback
Sales Support Centre
and growing insurance awareness,
The Sales Support Centre was established We constantly strive to deliver an excellent
non-traditional delivery channels are
in 2013 to support Company’s sales force customer service. By investing in capability,
growing in popularity and showing major
and the branch network. The Centre processes and performance measures
potential for development.
facilitates the sales force to deliver a that drive growth, customer retention and
strong performance by providing consistent customer satisfaction, we aim to maintain
The emergence of online insurance
support. This has resulted in increased a high level of customer satisfaction. We
services and increasing foreign
LIMRA persistency, direct payment ratio obtain customer feedback to measure
investments in the industry is expected to
and increase in new business. The Centre customer satisfaction which is one of
drive insurance penetration in Sri Lanka.
also introduces new reward schemes and our main performance indicators. This
In this milieu, we have tremendous enables us to monitor whether we are
provides assistance to branches as well.
potential to reach customer segments
providing our customers with products and Key touch points are as follows: learning to the Company. It also to show

services that meet their needs through an zzFirst impression and background our commitment to the guidelines issued
accessible and responsible manner. information, by the IRCSL pertaining to fair treatment
of customers, complaint handling by
zzInquiry process,
Customer feedback is obtained by a customer insurance brokers, following good practices
feedback systems installed at selected zzPayment-related observations and in conducting inquiries on insurance
branches. We are extremely happy that our overall feedback. agents and conducting investigations of
customer satisfaction score is above 85%. insurance claims.
Treating Customers Fairly

Mystery customer audit To demonstrate our commitment to
Campaigns and promotions
We conducted a mystery shopper audit promotion of fair treatment to customers As the most profitable life insurer in
through a reputed research agency In we launched the Treating Customers Fairly Sri Lanka, we reward our policyholders
order to provide a superior customer (TFC) programme. Phase I of the training with numerous benefits, including the
service, Ceylinco Life wishes to understand programme was conducted by Global Ceylinco Life Family Savari programme and
and track the current service standards Business Counseling (GBC) Singapore the Pranama scholarships for their children.
across key touch points through a mystery and Sri Lanka and TCF Consulting UK
shopper programme in February to March in association with Sri Lanka Insurance
2017 for eight branches. Institute (SLII). This programme was
designed to provide Company’s senior
The objective was to assess and track management with an appraisal of the
our service levels and to identify areas concept of Conduct Risk to develop a
on improvement. Total score for the wave comprehensive understanding of the
4 is 84%. principles of fair treatment and transfer the
Policyholders Annual bonuses worth

304,000 received Rs. 3,800 Mn.
Policyholders Claims and benefits

147,000 received worth Rs. 6,800 Mn.
Policyholders and their

Family Savari
2,260 families received
rewards
Children of Pranama Rs. 120 Mn. worth

2,200 policyholders received scholarships
Pranama Scholarships
The Pranama scholarships programme

is to acknowledge and honour academic
Year 5
excellence while helping parents with Scholarship
the burden of the high cost of educating Examination
their children. Rs. 120,000/-
each
Our investment in the future leaders
of Sri Lanka surpassed Rs. 120 Mn. in
2017 when we disbursed another 160
scholarships to high-achieving students
and young people at our 16th “Pranama”
Pranama
scholarships presentation. Among
Scholarships
the recipients of the latest round of
in 2017
scholarships presented by our Company
were 28 children who excelled at the
Year 5 scholarship examination of 2017,
24 high scorers at the GCE Ordinary Level GCE GCE
Examination of 2016, 98 high achievers Ordinary Level Advance Level
Rs. 84, 000/- Rs. 144,000/-
at the GCE Advanced Level Examination of each each
2016 and 10 young people that excelled at
the national or international level in sports,
culture, arts, drama, or invention.
Scholarship recipients in the Year 5

category receive 25 scholarships worth
Rs. 120,000/- each over five years, whilst
high achievers at the GCE (Ordinary Level)
examination receive Rs. 84,000/- each
over two years and students who excel at
the GCE (Advanced Level) receive
Rs. 144,000/- each over three years.
Students placed 2nd, 3rd, and 4th in

their districts at the GCE Advanced Level
examination also receive a one-time cash
payment of Rs. 30,000/- each. The national
merit awards presented by us are each
worth Rs. 35,000/-.
To date we have conferred Pranama

scholarships to over 2,200 high achievers
since the programme began, and we are
extremely proud that many past recipients
are now excelling as doctors, engineers,
lawyers and in academia.
Family Savari The promotion rewards over 2,200 policyholder families won an all-expenses-

people every year with all-expenses-paid, paid holiday to England at the Family
Ceylinco Life Family Savari remains the overseas holidays to multiple destinations Savari grand draw, while another 10
biggest, most anticipated and most and a day-long excursion to a local theme families were selected to visit Dubai, and a
engaging promotion in Sri Lanka's park. Overseas holiday destinations have further 50 families for a tour of Singapore,
insurance industry focused on promoting included Singapore, China, Paris, Japan, and 500 families for a day at the Leisure
family bonding, and making memories that Switzerland, Dubai, and Germany. Five World theme park in 2017.
last a lifetime.
England
Germany
Switzerland
France
China Japan
Dubai
Sri Lanka Singapore

Bonuses to policyholders at our Kandy branch and were provided Developing products and services
refreshments and dinner by the Company catering to the changing consumer needs
We recorded excellent growth in 2017. In as a special reward for their loyalty. The and preferences is also a challenge in
our efforts to share this success with our Premium Club Members also receive particular with the increasing ageing
policyholders, a mammoth Rs. 3.8 Bn. in numerous gifts and benefits such as dining population in Sri Lanka. The emerging
annual bonuses were awarded, close to and accommodation packages, power younger generation requires specific
300,000 policyholders in April and May banks and many more. long-term insurance products and prefers a
2017. This reflects a staggering 31% multichannel, digital-enabled experience.
increase of Rs. 900 Mn. over the previous
year making it the highest bonus pay-out Compliance
in the history of our Company. There were no incidents of non-
Focus for 2018
compliance with regulations and We will continue to launch more
All those who purchased their policies up voluntary codes concerning product and initiatives to generate increased value to
to December 2017 were eligible to receive service information and labelling and our customers during 2018. More products
a bonus, in line with our Company’s policy marketing communications, there were focused on retirement planning and
of declaring bonuses from the very first no substantiated complaints received medical plans will be launched to cater to
year of issue of a policy. concerning breaches of customer privacy the growing demand for such products.
and losses of customer data. In addition, In particular, the medical reimbursement
In addition, Avurudu cheer was spread there were no fines imposed for non- plan will be launched during the year,
to more than 15,000 policyholders with compliance with laws and regulations covering 38 critical illnesses and surgeries.
cash bonuses totalling Rs. 92 Mn. in the concerning the provision and use of We will also continue to reward our
form of immediately encashable cheques products and services during the year. policyholders with exceptional benefits.
during the Sinhala and Tamil New Year.
The Avurudu Cash Bonus which is a feature There were no legal actions filed against
unique to our organisation was 39% the Company for anti-competitive
Future outlook
higher in 2017 than the cash bonuses behaviour, anti-trust or monopoly practices. By understanding our customers’ needs
paid in 2016. The cumulative value of and offering them value-added, innovative,
cash bonuses paid by us thus far exceeds cost-effective life insurance solutions
Rs. 500 Mn. Challenges faced we will continue to build enduring
The disposable income in many population relationships – based on our sustainable
The annual bonus payout in 2017 was segments is relatively low, which has business model. We will also increase the
based on the surplus generated by the generally made life insurance a low efficiency of our distribution channel and
Company’s Life Fund in 2016. priority in Sri Lanka, despite the high level enhance our service standards to deliver
of education and literacy in the country. increased value to our customers.
Viewing of the Kandy Perahara There is high incidence of policies lapsing,
for Premium Club Members due to a combination of factors, including
The Premium Club Members received low disposable incomes, inadequate
the opportunity to view the Kandy Esala understanding of products, incorrect
Perahara from one of the best vantage selling, and the existing commission
points in the Kandy city. Accordingly, structure, which makes it more profitable
a group of 100 people comprising 25 for an agent to sell a new policy rather
policyholders from different parts of than follow-up on overdue premium
Sri Lanka and their families watched the incomes. Many of these issues trickle
grand pageant from a special viewing area down to a lack of awareness regarding
life insurance.
BUSINESS PARTNER
CAPITAL
In business, it is often said that you are only as strong as your weakest link, with this in mind we at Ceylinco Life ensure that every link

we make is one that is well-judged and build on a solid foundation, with long-term potential and strong mutual benefit. The Life Insurance
Business is one that requires a network of professional service providers and our business partners, both locally and overseas, are all
seasoned veterans, committed to the highest standards of service, and the zenith of professional expertise and endeavour.
Business partner Ceylinco Life’s expectations Ceylinco Life’s offer
Suppliers zzGoods and services of specified quality zzCompetitive and fair prices
zzEthical business practices zzTimely payments
zzCommitment to delivery on-time zzRepeat business
Reinsurers zzFinancial strength and stability zzTransparency
zzDue settlement of reinsurance claims zzGood governance and ethical practices

zzContribution to develop best underwriting practices and zzTimely payments
professional advice zzLong-standing business relationship
Consulting actuaries zzProfessional and independent advice zzAccurate and quality data
zzFinancial strength and stability zzGood governance and ethical practices
zzTimely payments
zzLong-standing business relationship
Industry associations zzCo-operation for betterment of the industry zzBusiness expertise
zzSharing of good practices
Contractual agents zzAchievement of premium targets zzUnmatched career development and growth
zzProfessionalism and integrity zzMonetary and other benefits
zzServing as a brand ambassador
Supply chain management The table below show the key types of Selection process
suppliers we obtain services. We mostly
A trusted supplier base is an essential We source external service providers in
engage with local suppliers and about 94%
element for the smooth functioning of our the event a higher value could be derived
of our spending on such external services
business operations. Since we are a service by doing so. All outsourced services are
is made to local suppliers.
organisation, the supplies we obtain are based on signed written agreements.
usually support services. Suppliers are selected via a stringent
supplier evaluation process which includes
an inspection of the supplier’s business
Local suppliers Foreign suppliers
premises by an independent team from
Type of supplier No. of Payments in 2017 Type of No. of Payments in 2017 our company. We follow a transparent
suppliers Rs. Mn. suppliers suppliers Rs. Mn.
procurement process taking into
consideration factors such as price, quality,
Capital items 110 641 Actuarial services 1 17
after sales support, timely delivery and
Financial services 7 16 IT services 5 28 technical capacity during the evaluation
Health services 26 31 Training 5 10 and selection process.
Office space providers 165 77
Security services 1 15
Local supplies
Stationery and material Provided our quality standards are
suppliers 27 55 maintained, we give priority to local
suppliers, as it makes a positive
Telecommunication contribution to the economic development
services 11 94 of our nation. If local suppliers are
Total 347 929 11 55 unable to meet the given procurement
specifications, we source foreign suppliers.
Monitoring including disciplined underwriting, prudent regular basis to offer optimal benefits to
portfolio management, innovative product our policy holders:

We maintain excellent long-term development and staff training is provided
relationships through a clear and up to zzFacultivereinsurance is used when
by them.
date communication strategy, in addition the magnitude of the contract is
to making prompt payments. We are also considerably large that it requires its
The knowledge sharing sessions with our
consistent in monitoring our procurement own reinsurance (for example, when
reinsurers helps us to be up-to-date, and
process. We reviewed and evaluate formulating a policy for an extremely
aligned with global best practices in terms
our procurement contracts at regular wealthy life).
of underwriting. This allows us to provide
review meetings and carryout site visits zzTreaty reinsurance covers a large pool
complete protection for insurance portfolios
periodically to ascertain any potential and better terms for customers. of similar risks.
sustainability risks, and to select products zzProportional reinsurance allows us to
and services which have positive social There are five main methods of divide a proportional share of risk and
and environmental impacts. reinsurance; they are Facultative, Treaty, claims with the reinsurer.
Proportional, Non-proportional and
There were no negative impacts reported Retrocession. We use three of these on a We also purchase Catastrophe reinsurance
in the supply chain during the financial to limit the accumulated total loss
year 2017. we would incur in case of natural or
man-made disasters.
Reinsurers
Our relationship with reinsurers
Reinsurers provide the financial strength
and flexibility needed by primary insurers
to maximise growth and profitability within Premium/Risk Reinsurance premium/Risk
the boundaries of their risk appetite and
tolerance. Reinsurers also provide the
additional financial protection required
when the magnitude of the risk is too
large for a primary insurer to take on. This
enables the primary insurer to take on the
risk, as well as to obtain more business
and offer a wide range of insurance Consumer Primary Insurer Reinsurer
products and services to customers.
We have a long-standing association with

world’s top two reinsurers; Swiss Re of
Switzerland and Munich Re of Germany.
Claims/Payments Claims/Payments
Munich Re in Germany, founded in 1880,

is the world’s leading reinsurer, employing
over 40,000 people worldwide. Swiss Re, Gross premium ceded
based in Zurich, Switzerland is the world’s
second-largest reinsurer. Founded in 1863, Ceded gross premium refers to a portion of risk in insurance policies that is transferred
Swiss Re operates through offices in more from the primary insurer to the reinsurer, in exchange for a predefined premium. The gross
than 25 countries. premium ceded to reinsurers during 2017 amounted to Rs. 422 Mn.
Description 2017 2016 2015 2014 2013

We maintain close relationships with Rs. Mn. Rs. Mn. Rs. Mn. Rs. Mn. Rs. Mn.
our two reinsurers having frequent
meetings to discuss matters relevant to Swiss Re 306 267 216 187 172
both parties. In addition to reinsurance Munich Re 116 107 102 93 84

protection, a host of support services Total 422 374 318 280 256
Industry associations Independent contractual

Reinsurance premium ceded (Rs. Mn.)
375
agents
Insurance Association We engage the largest team of
300
of Sri Lanka independent contractual agents in
Ceylinco Life is a member of the Insurance Sri Lanka’s life insurance industry who
Association of Sri Lanka (IASL) which is works exclusively for us. They are the
225
the representative body of the insurance best in the industry and serves as an
industry in Sri Lanka. The IASL Executive essential link between the Company and
150 Committee functions as the apex forum the customer, generating new business by
that takes up for discussion matters contacting potential customers and selling
of relevance to member companies insurance solutions based on need. They
75
pertaining to the insurance industry. also handle a host of related services such
This forum formulates joint industry as collecting premiums, policy renewals
0 initiatives, takes up important issues and claim settlements.
2013 2014 2015 2016 2017 that come up from the Subcommittees,
and coordinates correspondence with Our 3,696 strong sales cadre works across
Swiss Re
the Insurance Regulatory Commission of our branch network in the local industry
Munich Re Sri Lanka (IRCSL). comprising 273 branches island-wide.
Close to 96% of our business is generated
Seven Subcommittees function under the by our sales agents.
Reinsurance ratio stewardship of this Executive Committee.
We actively participate through nominees The recruitment process of our agents
Description 2017 2016 in its committees and forums. is handled by the management of the
respective branches. They are hired from
Premium income localities of the branches and are selected
excluding CRA and Memberships in based on their qualifications and the
investments (Rs. Mn.) 12,301 11,046
industry associations needs of the locality in which they will be
Reinsurance gross serving. Close to 1,200 agents are based in
Member of Insurance Association of
premium ceded the Western Province where we have the
including catastrophe Sri Lanka (IASL)
largest concentration of branches.
cover (Rs. Mn.) 422 376 Our nominees for IASL Executive
Reinsurance ratio (%) 3.4 3.4 Committee and Subcommittees are given
below:
Consulting actuaries zzExecutive Committee Thushara Ranasinghe (Alternate: Palitha Jayawardene)
We have enjoyed a long-term relationship zzLegal Advisory Forum Kushan Weththasinghe (Alternate: Saman Prematathne)
with Willis Towers Watson, a leading global zzLife Insurance Forum Asoka Sirisena (Alternate: Saman Kumara)
advisory, broking and solutions company,
zzFinance and Technical Ranga Abeynayake (Alternate: Hemantha Chandana)
obtaining actuarial advisory services
covering the long-term insurance business Subcommittee
since inception. zzMarketing and Sales Forum Samitha Hemachandra (Alternate: Sushan Sirisena)
zzHR Forum Sudharshana Jayathilake (Alternate: H A Suraweera)
Willis Towers Watson employs close
to 40,000 people and serves over 140 zzIT Forum Mrs Upamalika Rathnayake (Alternate: Chandana Herath)
countries. The Company which has been
zzActuarial Subcommittee Sujeewa Kumrapperuma (Alternate: Roshan Menaka)
in business for almost 200 years, designs
and delivers solutions that manage risk, Sri Lanka Insurance Institute (SLII)
optimise benefits, cultivate talent, and Mr Asoka Sirisena, Deputy General Manager – Technical holds the President post of SLII.
expand the power of capital to protect and The Institute operates as the main body supporting insurance professionals in Sri Lanka by
strengthen institutions and individuals. offering management courses for furthering of their careers.
We are proud to have an equal opportunity Impact to our business

Independent contractual agents by

policy when it comes to our sales agents.
geographical distribution The largest volume of our business is
This is proven by the fact that 51% of our
independent contractual agents are female. 8% generated by the contractual agents
6% amounting to a share of 96%. As the
Independent contractual agents by gender 7% market leader in Sri Lanka’s life insurance
35% industry for 14 consecutive years, we
and geographic distribution:
serve close to a million customers across
12%
Province Male Female Total the nation. Our contractual agents play a
pivotal role in the business operations of
Central 137 142 279
6% 9% our company. Therefore, we have initiated
Eastern 139 89 228 10% 7% several strategies to communicate,
North-Central 151 115 266 Central Province Sabaragamuwa Province develop, empower, reward and motivate
them. This leads to increased level of
North-Western 217 243 460 Eastern Province Southern Province
customer service.
North Central Province Uva Province
Northern 168 171 339
North Western Province Western Province
Sabaragamuwa 110 135 245
Southern 169 203 372

Northern Province Rewards
Uva 124 90 214 Hall of fame
Western 589 704 1,293 This is a sales competition launched
during 2017 to reward high performing
Total 1,804 1,892 3,696
sales agents. The top prize is a company-
maintained Mercedes Benz car. Apart from
rewarding top performers, this competition
Independent contractual agents by gender and geographical distribution No.
was launched to motivate and enhance
750 the performance and productivity of all our
sales agents.
600
Annual awards
This is the most anticipated annual event
450
of our sales force calendar. The event,
which was held with the participation of
300 over 1,500 agents this year, recognised
and honoured the top achievers who
have made a noteworthy contribution to
150
the growth of our Organisation. Winners
are selected on categories including best
0 branch head, unit head and consultants
A B C D E F G H I and are awarded with plaques, medals,
certificates, cash prizes and overseas trips.
Male A Central Province D North Western Province G Southern Province
Female B Eastern Province E Northern Province H Uva Province

We are proud that over one hundred
C North Central Province F Sabaragamuwa Province I Western Province contractual agents qualified to travel
to Singapore, Malaysia, China and the
United Kingdom on a combined training
programme and vacation in 2017. The cost
was borne by the Company.
Mid-year awards to undergo a six-day training programme Underwriting and

This is a biannual event held in July each and thereafter sit for a pre-contract servicing examination
year to honour and reward outstanding examination before being absorbed into This was conducted for all sales agents to
performance of sales agents. The winners the Company. They are also required to enhance their knowledge. Branch heads,
are awarded plaques, medals and obtain the license issued by the IRCSL agency supervisors, life insurance advisors,
certificates and cash prizes. This year, to sell life insurance, after passing the financial advisors, financial planners,
238 sales officers were recognised and examination conducted by the Insurance master financial planners, special sales
rewarded for their performance. Association of Sri Lanka (IASL). consultants, business promotion officers,
business promotion executives, business
Various training modules have been promotion managers and senior business
Sports meet
introduced to enhance the knowledge of promotion managers were nominated to
Annual sports meets are held regionally our contractual agents on areas such as
and for the Company as a whole to participate. A special refresher training
life insurance, customer service, selling course was conducted prior to the
encourage sales agents to be involved policies and best management practices.
in sports as it results in close interaction examination, and the examination was
An examination is conducted at the end held in fourteen centres across the island.
and enhanced team spirit. It also helps to of each training programme, and the
inculcate the Company culture and values successful participants are rewarded.
in our sales agents. This year Company’s Training by international trainers
main sports meet was held in November It is also mandatory for contractual agents A special training programme was
at the Diyagama Mahinda Rajapaksha to follow training courses prior to being conducted for all Tamil speaking sales
Stadium grounds with participation of promoted to the positions of team leader, agents in Jaffna, Batticoloa and Colombo.
many sales officers. agency supervisor and agency head. The programme was conducted by
Mr Haridas Kandasamy, a renowned
Sales Staff Outing Local and international trainers and trainer from Malaysia.
The sales staff outing is another annual professionals are engaged from within
event organised by the Company for the and outside the industry to conduct a Ceylinco Life Field Officers
sales agents and their families. This too broad range of training aspects including, Professional Development
is an excellent opportunity for the sales customer service to selling policies and
Course (CFPDC)
officers and their families to interact and best management practices. These are
conducted on a regular basis, at least Launched in 2017, the course is designed
develop friendships.
every quarter. Participants are awarded to help sales officers to enhance their
certificates and this has proved to be a personal performance, income and skills.
This year’s outing was to Pegasus Reef
success in exposing our contractual agents It also provides an ideal platform to discuss
Hotel Wattala.
to some of the best industry training and compare their experiences and insights
programmes available locally and globally. gained while working in the life insurance
sector. This course is an adaptation of
In addition, special training programmes the American College module – LUTC,
were carried out locally in 2017. These translated into Sinhala and Tamil for local
include: implementation. Ceylinco Life pioneered
this twenty five week course in Sri Lanka,
Motivational training program and the 2017 inaugural batch produced
A full-day training programme was seventy two qualifiers.
conducted by Mr Dananjaya Hettiarachchi,
the 2014 world champion of public Asia Pacific Life Insurance
speaking at Toastmasters International. The Congress (APLIC)
Training and development training was scheduled for selected agency
High achieving members of the sales force
We continuously train and develop our supervisors and all heads of branches.
were nominated to receive foreign training
contractual sales agents to empower them and exposure at the renowned APLIC.
to deliver an outstanding professional
service. It is compulsory for every newly The 16th APLIC was held in May 2017 in
recruited independent contractual agent Malaysia, organised by the Asia Pacific
and National Association of Malaysian Foreign tours

Life Insurance Field-force and Advisors

(NAMLIFA). APLIC gathers life insurance Foreign tours for nominated agents
sales professionals and financial advisors
1% 10%
from the Asia Pacific Region. In 2017,
1%
we nominated a group of twenty 7%
sales consultants to participate in this
event, including Manager – Business
Development, regional sales managers, 19% 62%
Zonal managers heads of branches and
trainers. The sessions covered sales,
marketing and IT, which are essential areas
of expertise to have successful careers in Star Cruise – Singapore
Star Cruise Malaysia UK
the life insurance industry. A total of 59 Highflyers’ Club members were
Dubai Singapore China
selected for a Star Cruise tour in 2017.
Our training summary
Annual award tours
Names of Training Number of Number of
programmes participants training The high performing sales agents are
programmes
selected to the Highflyers’ Club. There
are four main membership titles namely,
Sales Skills 1,395 31
Associate Member, Member, Court of
Agent orientation 996 20
the Table and Top of the Table. The club
Basic sales skills 721 28
membership is awarded at the annual
Cross road 340 20
awards ceremony along with a foreign
HOB programmes 206 13 tour package.
Leadership
development
programme 871 14 Malaysia tour
China tour
Management The Malaysian tour is entitled for Associate
Ten COT (Court of the Table) members
training courses 231 18 Members of the Highflyers’ Club. This year,
were nominated for the China Tour which
Sales Refresher 3,205 61 18 agents were selected as Associate
included a city tour, theme park tours and
Skill sharpening 493 34 Members.
a visit to the Great Wall.
Sale skills
programmes 359 17
No. of participants
3,500
2,800
2,100
1,400
700
The competitive advantage
0 Whilst continuous training and
A B C D E F G H I J
development is given to our contractual
A ADS C BSK E HOB G Management I Skill Sharpening agents, their knowledge is tested from
B Agent Orientation D Cross Road F LDR H Sales Refresher J SKS time to time through examinations and
competitions. This not only creates a
vibrant and rewarding atmosphere but also tabs. This year, we further enhanced the Future outlook

promotes a spirit of friendly competition usage of tabs by providing our heads of
among the agents. branches with tabs or laptops, whilst 93% We will build long-lasting customer
of the unit heads are equipped with tabs. relationships and create a strong
Every time a new product is launched, the bond between our sales force and our
agents are given a thorough training about The Company intranet is one of the most Organisation. In addition, communication
the product and its features. Based on the efficient tools available to the sales force. among all stakeholders will be enhanced
post evaluation test, only the contractual Accessible to all, the intranet provides and we will equip every sales agent with a
agents who passed the test are permitted instant recognition and motivation for high smart phone to facilitate access to required
to promote the product. performers and winners of the intranet based knowledge and information.
competitions conducted weekly and monthly.
More training and development
Million Dollar Round programmes will be introduced to ensure
Table (MDRT) Challenges faced our sales force has access to the latest
The Million Dollar Round Table (MDRT) information and is kept motivated in terms
Agent poaching by our competitors in
is the premier association of financial of their personal development within
the industry is still one of the primary
professionals that recognise excellence in the Company.
challenges we face. Every agent represents
the life insurance industry.
an investment of time, resources and
finance for the Company. Therefore,
In 2017, forty-four of our contractual sales
poaching of agents adversely impacts
agents qualified for the MDRT, which
not only our organisation but the industry
included three life members and two Court
as well. This is because it stunts the
of the Table members. Further, thirty-one
growth and development of agents whilst
non-members were selected for MDRT
preventing new jobs opportunities being
Experience Conference held at the Bangkok
created in the industry.
International Trade and Exhibition Centre
(BITEC) Thailand in 2018. The decreasing unemployment rate in
Sri Lanka while being a positive sign overall
This elite group includes ten business creates a highly competitive environment in
development managers, three regional sales which recruiting suitable candidates for the
managers, seventeen head of branches and industry becomes a challenge.
one senior training manager.
Also although rapid digitisation is
mandatory and is a positive development
IT empowerment for the industry, it necessitates
We have invested in equipping our considerable investment and the
contractual sales agents with the latest immediate acquisition of digital tools,
in tabs, mobile point-of-sale devices and technology and resources. This in turn
laptops to facilitate their work and enhance creates the need for further training and
convenience for customers. They are given development for our sales force.
access to all the required information Requirements to comply with financial,
on their device which has resulted in underwriting, and governance standards of
improving service levels. the reinsurers is also a challenge.
This is because digitalisation is an integral

aspect of our industry. Technology not only Focus for 2018
keeps our sales agents up-to-date, but
We will maintain our customer service
enables customers to conveniently access
standards at the highest level and ensure
and purchase life insurance products.
proper systems are in place to provide
During the year under review,
an excellent service at all times. We will
we continued with our extensive
continue to focus on retaining our trained
digitisation drive which commenced in
sales force through increased rewards and
2016 by equipping 173 sales agents with
recognition schemes.
SOCIAL CAPITAL
The success of our business depends on the strength and

well-being of the communities in which we operate. Therefore,
based on a clear direction and focus, we make community
investments to enable our communities to grow.
We are committed to creating a sustainable Additionally, our support to the long-term for all. It also generates equitable returns
business environment even in the most capital markets leads to social and for the Company, which is passed on to
remote areas of our country through environmental benefits such as better the policyholders in the form of claims
meaningful interventions in areas such as infrastructure facilities, new employment and benefits with residual profit for
healthcare and education for needy people. opportunities and a cleaner environment shareholders.
Miracle of life insurance

Life insurance business, due to its long-
term nature, fuels capital formation and Profits Interest
economic development of a country. The
premiums collected from policyholders Investment Investment
are accumulated in a Life Insurance
Fund, which is an investment vehicle
that targets both the private and public Private Sector Life Fund Government
sectors. Bulk of the investments are made
through risk free, long-term financial
instruments that provide a long-term yield.
These include Government Securities,
deposits in State-owned banks and non-
speculative real estate and infrastructure
development projects.
Our Life Fund which has grown over the

DEVELOPMENT DEVELOPMENT
years is one of Sri Lanka’s largest funds. It is
a pillar of strength and a source of wealth
that facilitates smooth and timely payment
of customer benefits. Our investment in
gilt-edged securities supports long-term
capital needs of the Government to fund
various infrastructure projects. The Life Fund
Premium Benefits
also makes direct investments in the private
sector which infuse capital and long-term
Employment Employment
financing that fuel entrepreneurship and
growth. Through productive investments
from the Life Fund we indirectly support
employment creation and wealth creation Labour force
which helps to improve the quality of life
across the nation.
Social responsibility CSR programme that includes business commitment to uplifting underprivileged

operations, volunteerism and philanthropy. communities across the island, mainly is
In our efforts to make a positive difference Through the Ceylinco Life Social the areas such as healthcare and education
in the communities in which we operate, Responsibility projects we extend our for needy people.
we consciously work on a structured
Jaffna
velanai Erlalai
Killinochchi
Our CSR initiatives have

Mannar
benefited communities Padaviya
islandwide Vavuniya
Trincomalee
Kahatagasdigiliya
Kantale
Anuradhapura
Galgamuwa
Kaduruwela
Anamaduwa
Sittandy
Maho
Chilaw Batticaloa
Nikeweratiya
Matale
Boraluwewa
Rideegama
Yakwila Madulkele
Giriulla Rambukkana Sainthamaruthu
Beligala Pilimatalawa Mahiyanganaya
Divulapitiya Kegalle Ampara
Aranayaka
Nittambuwa
Avissavella
Ja-ela
Yakkala Ruwanwella
Rikillagaskada
Gonawala
Boragas Bandarawela
Ingiriya
Kuruvwita Balangoda Monaragala
Ratnapura Wellawaya
Matugama Doloswalakanda
Deniyaya
Ambalangoda Lunugamwehera
Elpitiya Neluwa Embilipitiya
Talawa
Akuressa
Kamburupitiya
Health in Wellawaya, Embilipitiya and Narawila all people enjoy peace and prosperity. They
bringing the total number of schools we’ve provide clear guidelines and targets for all
Good health is essential to achieving a assisted to 69. countries to adopt. Working in the spirit of
high quality of life. Therefore, we build “A partnership and pragmatism they enable
relationship for life” with our communities to make the right choices now to improve
by providing access to quality medical care. life, in a sustainable way for
future generations.
Ceylinco Life ”Waidya Hamuwa”
The “Waidya Hamuwa” project initiated As a responsible and sustainable corporate
in 2006 and has since served 138,000 citizen, we are equipped to meet these
people across 350 locations. During the goals and make a meaningful contribution
year under review, 13 medical camps were towards building a sustainable nation.
conducted benefiting over 3,200 people in The following diagrams illustrate the
13 locations. process of embedding SDGs into our
Our contribution integrated thinking process.
Among areas where medical camps were
conducted during 2017 were Akuressa and to sustainable
Neluwa. The programme is conducted by development goals
a team of doctors, medical and ophthalmic
technicians and nurses who travel across Sustainable Development Goals (SGD)
Sri Lanka offering free consultancy and which came into effect in January 2016,
diagnostic checks. are a universal call to action to end
poverty, protect the planet and ensure that
Step 1
Understand sustainable
development issues
relevant to the
organisation’s external
Education environment
Our focus is to provide a quality

educational environment for children and Step 5 Step 2
youth in rural communities by improving
Prepare the integrated Identify material
educational infrastructure and facilities. Value
report sustainable development
creation aligned issues that influence
with sustainable value creation
development through
School development projects increases, decreases
For over 14 years we have continued to and transformation
of the capitals
focus on educating children and youth
in rural communities to provide them
a better future. Majority of children in
Sri Lanka are dependent on free education Step 4 Step 3
provided by State schools. However, Develop strategy
Develop integrated
many schools in remote areas desperately thinking, connectivity
to contribute to
the SDGs through the
need aid to develop basic facilities. We and governance
business model
have assisted many such rural schools by
reconstructing classrooms and donating
furniture and other basic amenities. In the
year under review, we supported schools
Our commitment to Sustainability Development Goals is exemplified in the table shown below:

Sustainable development goal Ceylinco Life’s commitment Ceylinco Life’s contribution
zzPromoting health in communities through “Waidya Hamuwa” Social and Relationship Capital,
project pages 104 to 130
zzHealthcare services provided through Ceylinco Healthcare
Services Limited
zzHealth check-ups packages at concessionary rates for employees
and customers
zz Group medical insurance cover for staff and their families
zzFully-equipped company-maintained gymnasium for staff
members
zzEnsure inclusive and quality education for all through the school Social and Relationship Capital,
development project pages 104 to 130
zzCeylinco Pranama and Pranama Weerayo scholarships
zzProducts to support education – Sipsetha, Ran Daru, Family
Takaful Education Plan and Degree Saver Plan
zzTraining and development for sales force and permanent staff
zzGender equality in our sales force Employee Capital, pages 132 to 147
zzRecruitment of female employees Social and Relationship Capital,
zzProducts targeted at women – Ceylinco Life Saubhagya pages 104 to 130
zzUse of sustainable energy in our “Green branches” and Natural Capital, pages 148 to 153
implementing measures to promote clean energy
zzIncentiveschemes to encourage reduction of electricity
consumption at branches
zzLargest solar installation in Colombo city
zzPromoting an inclusive and sustainable work environment Employee Capital, pages 132 to 147
focused on employee development
zzGrowth in GWP contributing to economic growth
zz Investments in Government securities and other financial
instruments
zz Employee benefits and rewards
zzCommitment to anti-corruption and non-discrimination
zzHealthy work-life balance
Sustainable development goal Ceylinco Life’s commitment Ceylinco Life’s contribution
zzContribute to national development through indirect investment Social and Relationship Capital,
in infrastructure development pages 104 to 130
zzProviding innovative products to suit customers’ evolving needs
zzRepresentation in industry committees
zzLeading Sri Lanka’s life insurance industry
zzLargest branch network in the industry
zzBranches in Company-owned buildings
zzHiring sales staff from all across the country contributes to Social and Relationship Capital,
reducing income inequality pages 104 to 130
zzProducts offered for low income earners (Pradeepa) and for
needs of all stages of life
zzThe islandwide branch network established providing
employment opportunities contributes to reducing income
inequality
zzManaging the direct environmental impact of our operations Natural Capital, pages 148 to 153
zzPromoting resource conservation and optimal usage of resources
zzRecycling of paper waste and e-waste
zzSewerage water recycling plant in Bandarawela and Panadura
zzComplying with all statutory requirements and regulations Social and Relationship Capital,
zzPromoting ethical practices in our Organisation pages 104 to 130
zzBest practices of corporate and enterprise governance to ensure

transparency
Challenges faced Focus for 2018

Delivery of our CSR strategy to ensure We will continue our efforts to improve
that desired social impact is created the impacts on the society created by our
through the Waidya Hamuwa and School Company. We will hold more medical
Development projects. Difficulties in camps in identified locations and develop
sourcing needed resources for successful needy schools through the provision of
completion of our CSR projects. educational infrastructure and facilities.
Compliance Future outlook

There were no incidents of non-compliance We will continue to build sustainable
with laws and regulations in the social communities by developing health and
and economic area. There were no fines education. We will also contribute towards
or non-monetary sanctions imposed for Sri Lanka’s economic development by
non-compliance with laws and regulations building a sustainable Life Fund.
in the social and economic area.
STEWARDSHIP
INVALUABLE...BESTOWING KNOWLEDGE AND EXPERIENCE
FINANCIAL REPORT SUPPLEMENTARY INFORMATION 131
The transference of the knowledge and experience of

seniors across Ceylinco is of incalculable value.

132
EMPLOYEE
CAPITAL
Our employees are critical to our service delivery. We nurture an

engaged and motivated workforce who makes an outstanding
contribution to excellent results and growth of our Company. We
attract and retain talented individuals and support them in their
development through life-long learning. Their unique skills and
shared values are focused on delivering an exceptional service to our
many customers. Whilst promoting a well-balanced life, we cultivate
a working environment that inspires and motivates people to excel
in their roles. It is founded on engaged leadership based on mutual
trust, respect, integrity, and commitment to high performance.
Human capital value creation model
zz890 Employees Employee relations, zzTraininghours per zzEmployee
zzEqual opportunity performance employee 18.45 satisfaction

zzConducivework management, zzRevenue per zzDedicated and
environment talent development, employee motivated workforce
leadership Rs. 17.7 Mn. zzLong service period
zzInvestment in training
and development development, zzPerformance review zzHealthy work-life
employee and rewards balance
zzHealth and safety
engagement zzEmployee
grievance handling zzEmployeepersonal
recognition development
zzCompetitive
remuneration and zzExceptional customer zzSuccession planning
benefits service
zzLow staff turnover
zzHigh performance zzHazards free working
and Learning culture environment
zzTalent acquisition
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Employee Capital 133

Employee capital contributing to value creation
The value creation process of our Organisation has been built around our loyal and committed
employees. By motivating and encouraging our employees to perform to the best of their ability
through a performance oriented culture based on transparent and ethical behaviour, enables our
Company to achieve a sustainable and profitable growth.
Increasing our employee capital value
We increase the value of employee capital by fostering a culture of continuous learning and
development, high work ethics, open communication, rewards and recognition, and promoting a
healthy work-life balance.
Highlights for 2017
18.45 hours of training per 54 new recruitments Employee retention rate of 91%
employee
333 employees with over Employee attrition reduced 160 employee promotions
15 years of service by 10%
Employees at Ceylinco Life consistent service excellence and high

standards of ethical and legal compliance.
Our HR strategy
Additionally, we engage employees from
Our Company’s human resource strategy diverse backgrounds and cultures to even
is aligned to our corporate strategy. Our better understand the expectations of
employee value proposition is executed customers and offer an efficient service
through well designed, transparent HR every time.
policies and procedures. Our strong
financial performance is underpinned by Therefore, our key HR strategic functions
recruiting, developing and deploying the that add value to our employees include,
best people in the industry. We do this by HR planning, talent acquisition, training
investing in building robust recruitment, and development, reward management
screening, vetting, and training processes and talent development.
to underpin our commitment to delivering
134 Employee Capital PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Shown below are the key strategic functions of our corporate HR strategy. shape the future of our employees by
understanding them better.
Our main methods of talent acquisition are

internal recruitment, external recruitment,
subcontracting and outsourcing. Highest
High priority is given for internal recruitment.
performance
culture
Our talent acquisition process
Talent Internal recruitment

development HR
and succession planning
planning External recruitment
(If there is a competency gap with the
CORPORATE
immediate successor.)
HR STRATEGY
Long listing of candidates based on

basic criteria
Shortlisting of candidates based on

specific criteria
Performance Talent
Management acquisition
Interview with HOD and
Senior Manager – HR
Conduct knowledge test

(presentation for certain positions)
Conduct reference check

HR planning Talent acquisition
Interview with executive director
HR planning is a key HR function that The ability to identify, attract and retain
ensures our Organisation is appropriately the best talent who drive business success
Select the candidate for Appointment
staffed with the right calibre of people in is a significant competitive advantage.
order to achieve our strategic objectives. Therefore, our HR Department has
Conduct medical check for the
In this context, HR planning entails developed an effective process to attract,
selected candidate
identifying current and future human recruit, train, motivate, and retain the best
resource requirements as per our corporate talent in the industry based on the HR plan
Issue the offer letter to
plan. Effective HR planning enables us to of the Company. All recruitments are done selected candidate
remain flexible and successfully adapt to based on the talent acquisition policy of
changes in the business environment. the Company. Clear job descriptions are
prepared for each position that has to be
filled along with minimum competency Induction
At the beginning of every year, each
levels. Through a comprehensive and We have in place a comprehensive
department develops a set of objectives
effective interviewing and screening induction process for all new recruits.
aligned to the corporate objectives. Based
processes the right candidate is selected The main four induction programmes are:
on these objectives, a gap analysis is
and given a thorough induction. An
conducted to identify skill gaps and zzInduction by the Head of Department
effective talent acquisition process has (HOD) – introducing the new employee
training needs, which form the input
enabled us to deploy the right person for to the rest of the Organisation.
for the overall human resource plan of
the right position which has helped us
the Company. zzCrossfunctional induction – depending
to retain our top talent and successfully
on the position, new employee is
enabled to get an understanding of the Setting Key Performance Talent development and

different functions of our Company.
Indicators (KPIs) succession planning
zzE-induction – it is mandatory for every We use the balanced scorecard to set
new employee to refer the HR portal We believe that our ability to develop
departmental KPIs at the beginning of every
on the Company’s intranet and get leaders internally is an important
year. Each department is required
an in depth understanding of the competitive advantage. Therefore, we seek
to set at least one objective and a minimum
Organisation. Thereafter, an online to build a strong bench of inspirational
of three KPIs for each quadrant of the
test is conducted within 14 days and leaders across all leadership levels in
balanced scorecard. The departmental KPIs
the score is a prerequisite for the our organisation, to ensure continuity
are linked to the overall corporate objective
employee’s confirmation. and long-term growth for our business.
and the KPIs of each employee are based
zzQuarterly induction – this is a one We also continue to create opportunities
on the respective departmental KPIs.
day programme conducted by the HR for faster development, building the
Department for all new employees correct knowledge, skills, and experience,
within the first quarter of recruitment, Our balanced scorecard whilst embedding our values. This is why
to introduce Company’s vision, mission This is a management system we use year 2017 was declared as the year of
and values, key functional areas to translate our Organisation's strategic leadership development at Ceylinco Life.
etc. This is followed by a visit to our objectives into a set of departmental
corporate head office. performance objectives that, in turn, are
measured, monitored and changed if
necessary to ensure that our corporate
Performance appraisal strategic goals are met.
We seek to treat our employees fairly,
offer meaningful professional development
and deliver rewards commensurate with
their performance. Therefore, a bi-annual
performance appraisal is implemented Financial
for all our staff to appraise, evaluate and stewardship
reward employee performance. Additionally, “Financial
our employees are expected to demonstrate Performance”
the corporate values daily at work.
The performance evaluation process of

our Organisation:
zzEach employee conducts a
self- evaluation based on the key
performance indicators (KPIs) set
at the beginning of the year. This is Customer/ Internal
Stakeholder CORPORATE business process
followed by a discussion with the
“Satisfaction” OBJECTIVES “Efficiency”
respective Head of the Department
(HOD).
zzThe HOD conducts a 180 degree one-to
one evaluation of the direct reports,
biannually.
zzEmployee’s final rating is agreed
through mutual discussion.
zzAny performance gaps, training
Organisational
and development requirements are
capacity
discussed and ascertained for each
“Knowledge
employee through the evaluation. and Innovation”
zzEvaluation ratings of each HOD is
reviewed by their immediate supervisor
for amendments or comments
Succession planning Our succession planning process Employee engagement

Building a pipeline of talented future includes selecting two successors from

each functional area and designing a We engage with our employees at regular
leaders remains a key strategic intent
development plan for each selected intervals to address a range of concerns.
for our business. Whilst sourcing
employee in consultation with the The details of employee engagement is
new talent externally to bring fresh
respective HOD. given on pages 74 to 75 of the report.
ideas and expertise, we also strive to
promote from within the Organisation.
Succession planning is an acute need
High performance culture Our team
for our Organistion, given the fact
that our workforce over the age of 55 Our success is underpinned by the way we At the end of 2017, we had 890
years has increased from 2% to 2.5% . lead and engage with our people, the way employees excluding our sales force
Approximately, 235 employees are in the we work, and the way we are organised. who are independent contractual agents
46 to 55 age category. This shows that The end result of our HR process is a high included under Business Partner Capital on
we will face a significant talent vacuum performance culture, where employees pages 119 to 125.
in the next ten years. Hence, taking apt are recognised and promoted based on
steps now through succession planning is Our staff numbers had reduced compared
performance. Our performance incentive
to the previous year from 910 in 2016 to
imperative for our Organisation’s continued schemes are reviewed and refreshed
890 in 2017. This is because we made
success in the future. annually so they align with our business
a conscious decision not to replace
priorities with a clear link between
our manpower as a result of increased
performance and rewards.
automation of our processes and
Our organisation chart
Chairman Audit Committee Business Risk Committee
Board of Directors Nomination Committee Financial Risk Committee
Remuneration Committee Insurance and

MD/CEO
Demographic Risk
Risk Committee Committee
Deputy CEO/Director
Related Party Transactions ICT Risk Committee
Review Committee
Operations Risk Committee
Board Investment
Committee Regulatory Risk Committee
Investment Committee Internal Audit and IS Audit
Director Director Director

(HR and Training) (Deputy CFO) (CFO)
Human Resources Investment Finance ICT
Training Business Intelligence Administration Marketing
Group Insurance Actuarial Legal Business Development
Technical and Claims Operations
Company Secretarial Projects

centralisation of many branch operational Employees by type of employment and category

functions. The additional staff requirements
at our branches were also reduced Employment type
significantly by recruiting multi-skilled Category Contract Permanent Special Contract Total

individuals.
Executive Directors – 5 – 5
Majority (97%) of our staff members were Senior managers 2 35 4 41
in the permanent cadre. Managers – 24 1 25
Assistant managers – 39 3 42
Employment type 2017 2016
Executives 5 564 8 577
Permanent staff 865 884 Branch heads – 107 1 108
Contract staff 7 11 Career sales – 49 – 49
Special contract 18 15 Staff – 42 1 43
Total 890 910 Grand total 7 865 18 890
Employees by (Nos.)
type of employment Employees by category (%)
1,000
4.8%
4.6%
800 4.7% 2.8%
12.1%
600
5.6%
0.6%
400
200 64.8%
0
Staff Executives Branch heads
A B C
Senior managers Directors Assistant
2016 A Permanent staff C Special contract managers
Managers Career sales
2017 B Contract staff
Employees by category Employees by type of employment and region

and gender
Employment Type
19% of our employees are female. The
Category Contract Permanent Special Contract Grand Total
highest percentage (65%) of employees
were executives and 74% of executives Central 53 2 55
were male. Eastern 32 32
North 38 38
North Central 37 37
North Western 61 1 62
Sabaragamuwa 37 37
Southern 53 2 55
Uva 29 29
Western 7 525 13 545
Grand Total 7 865 18 890
Employees by category and gender (%)
2 3 2
100
4
8
80 149
60
40
20
5 39 25 34 105 47 428 39
0
A B C D E F G H (No.)
Male A Executive Directors C Managers E Branch heads G Executives
Female B Senior managers D Assistant managers F Career sales H Staff
Age 18-25 26-35 36-45 46-55 55< Total

Category Male Female Male Female Male Female Male Female Male Female
Executive Directors – – – – – – 1 – 4 – 5
Senior managers – – 3 – 10 – 21 1 5 1 41
Managers – – 1 – 9 – 14 – 1 – 25
Assistant Managers – – 11 5 11 1 10 1 2 1 42
Branch heads – – 9 – 61 2 34 1 1 – 108
Career sales – – 2 – 16 1 29 1 – – 49
Executives 36 29 174 69 147 14 67 35 4 2 577
Staff – – 3 1 15 3 20 – 1 – 43
Total 36 29 203 75 269 21 196 39 18 4 890

Employees by employment type and gender

Analysis of female employees (%)
Category Female Male Total Female Male Total

No. No. % % %
1.0%
Permanent staff 158 707 865 18 82 100 2.0% 5.0% 2.0%
1.0%
Contract staff 3 4 7 43 57 100
Special contract 7 11 18 39 61 100
Total 168 722 890
89.0%
Senior managers Branch heads Executives
Assistant managers Career sales Staff
Service analysis of employees

54% of our employees have served the
Company for over 10 years, whilst 77%
of our employees have served for over
five years.
Employees by service and gender (Years)
> 25
21-25
16-20
11-15
6-10
3-5
<2
100 80 60 40 20 0 20 40 60 80 100 (No.)
Male Female
Employees by region
and gender
Of the total, 168 (19%) were female
employees and majority of 545 (61%)
employees were based in the Western
Province.
Province Female Male Total

4%
No. No. No. Northern
Province
Central 7 48 55
38
Eastern 2 30 32 31 7
82% 18%
Northern 7 31 38
North Central – 37 37
North Western
Sabaragamuwa
4
6
58
31
62
37 4%
Southern 6 49 55 North Central
Province
Uva 4 25 29
37
Western 132 413 545 37 0
100% 0%
Total 168 722 890
7%
North Western
Province
4% Eastern
Province
62 32
58
94%
4
6% 6% 30
94%
2
6%
Central
Province
55
48
87%
7
13% 3%
61% Uva
Province
Western
Province 4%
Sabaragamuwa 25
29
4
545 Province 86% 14%
413 132
37
31 6
76% 24%
84% 16%
55
6% 49
89%
6
11%
Southern
Province
Employee recruitment

Age of employees (Years)
We have a comprehensive recruitment

policy to ensure the right candidate
> 55
is appointed to the right position. We
continuously strive to enrich our Company’s
46-55 talent pool that enables us to successfully
meet our corporate objectives and
maintain our leadership position.
36-45
A total of 54 employees were recruited

26-35 in 2017 of which 44% were females.
The highest number of recruits were
from the Western Province to the
18-25
executive category.
300 250 200 150 100 50 0 50 100 (No.)
Male
Female
Recruitment by age group, category and gender
Age (Years) 18-25 26-35 36-45 46-55 >55

**Special contracts
Category Male Female Male Female Male Female Male Female Male Female Total
Executive Directors – – – – – – – – – – –
Senior managers – – – – – – – – 2 – 2
Managers – – – – – – – – – – –
Assistant managers – – 2 – – – 1 – 1 – 4
Branch heads – – 1 – 3 – 1 – – – 5
Career sales – – – – – – – – – – –
Executives 6 13 10 6 – – – – 3 5 43
Staff – – – – – – – – – – –
Total 6 13 13 6 3 – 2 – 6 5 54
** Employee who have reached 55 and granted post retirement orientations.

Recruitment by region and gender

Recruitment by age group (%)
and gender
Gender Total
100
Province Female Male 2017 2016
Central 2 2 4 2
80
32 Eastern – – – 4
Northern – 3 3 4
60 45
North Central – – – 4
North Western 1 1 2 4
40
68 Southern 2 2 4 2
Uva – – – 1
20
Western 19 22 41 47
32 68 100 100 55 Total 24 30 54 68

0
18-25 26-35 36-45 46-55 > 55 (No.)
Male
Female
Our training and development model
Parental Leave
Only female employees are entitled to
Analyse
parental (maternity) leave as per the
Sri Lankan labour laws. Given below are
the numbers of employees who took
parental leave in 2017.
No. of
employees
Entitled to parental leave 168
Took parental leave 8

Returned to work after Implement EVALUATE Design
parental leave 4
Did not return to work after
parental leave 1
Due to return in 2018 3
Employee training
During the year under review, we spent
a significant amount on training and
development needs of our staff members. Develop
Our Company’s training and development
is conducted based on the training and
development model.

We declared year 2017 as the year of leadership development
with the intention of preparing our employees for future
leadership of the Company. This is a part of Company’s succession
planning agenda.
The model comprises five main processes; into three leadership groups namely, Health and safety
analyse, design, develop, implement emerging leaders comprising executives,
and evaluate. A training need analysis leadership challenge comprising senior Ensuring employee well-being, health
is conducted in all departments through executives and assistant managers and and safety are key priorities for us.
the performance evaluation system to leadership development comprising Therefore, we have a Health and Safety
ascertain training needs at the beginning managers and above. Committee, comprising representatives
of each year. Based on the training from the management and executive
gaps identified, appropriate training Participants faced a 360o leadership skills staff to execute first aid, fire fighting and
programmes are designed, which are assessment conducted by an independent evacuation, and psychological assistance
either internal or external programmes, third party. The programme includes a to ensure a hazard free and safe working
special projects or foreign training pre and post evaluation mechanisms, environment. We also ensure our cafeteria
programmes. Required resources and continuous follow-up sessions, team maintains high hygiene standards and
materials are then allocated to develop building activities and personality our employees can avail themselves
the training programmes, Thereafter, time assessment tests. A self-development to a modern fully-equipped company
and action plans are formulated including plan was formulated for each participant maintained gymnasium.
costs structures to implement each training as well.
programme. A post evaluation is conduct Training summary
after the implementation of each training
programme to obtain feedback from the Soft skills development Key area focused No. of No. of
participants training
employee and ascertain improvement In order to develop the soft skills of our hours
in skills and competencies. In addition, employees, we have formed our own
an evaluation is conducted by the trainer Toastmasters Club to harness the power of Leadership training 85 1,604
six months after the training programme effective public speaking for their personal Soft skills 865 6,105
as well. In the event of foreign training and professional advancement. The fourth development
programmes, the employee is expected installation ceremony of Ceylinco Life’s Functional training 1,238 5,998
to make a presentation to the Board of Toastmasters Club was held in 2017.
Directors after participating in the training Health and Safety 11 33
programme on how they could execute the

learning in improving performance. Functional training Training hours
Functional trainings enable the operational 2017
Leadership development and other supportive associates to deliver

an exceptional service to the stakeholders. Training (hours) 13,739.5
We declared year 2017 as the year of Operational, Finance, Customer Service, Average hours of training per 18 hours
leadership development with the intention IT and Technical are the areas touched and 45
employee
of preparing our employees for future minutes
under this.
leadership of the Company. This is a part
of Company’s succession planning agenda.
The selected employees were categorised
Average training per employee Key performance measures

by gender
Aspect Measurement 2017 2016 2015
2017
hrs. Attrition Turnover as a percentage of
average employees (%) 8.64 9.67 6.33
Male 17
Employee tenure Average service period of
Female 24 an employee (years) 13 12.37 11.44
Knowledge and skills Average training hours per
Average training hours per development employee (hours) 18.45 13.00 –
employee by employee category
Internal job hires Internal promotions as a
Category 2017
percentage of average
hrs. employees (%) 18 9.55 16.25
Work-family balance Percentage of vacation days
Senior managers 18
used (annual leave) (%) 54 59.00 68.05
Managers 19
Assistant managers 36
Executives 18
Attrition
Staff 6 Attrition is the reduction in the number the reasons for exit. During the year
of employees due to retirement and under review 78 employees exited our
During the year, 35 employees resignations. Attrition helps to measure the Organisation.
were trained on effective English health of a company’s workforce with a
communication, 236 employees on moderate attrition rate reflecting a healthy Highest attrition in 2017 was in the
personal grooming and social etiquette, workforce. Our employment separation executive cadre in the Western Province
188 employees on Psychological relaxation process fully complies with the applicable whilst more males left our Organsiation.
and another 35 employees on creative labour laws and we track and monitor
thinking. Additionally, 40 employees were
trained on conflict management and
Employee turnover by age group, gender and employee category
decision making whilst 130 employees
attended a Music Therapy programme. Age 18-25 26-35 36-45 46-55 >55
A total of 80 employees were trained on
Category Male Female Male Female Male Female Male Female Male Female Total
service enhancement through relationships
and 90 employees were trained on service Executive Directors – – – – – – – – – – –
excellence under our tag line “Relationship
Senior managers – – – – – – – – 3 1 4
for life.”
Manager – – – 1 – 1 – – – – 2
Employee satisfaction Assistant managers – – – – 1 – 1 – 1 – 3
Branch head – – – – 5 – 3 – – – 8
We continuously strive to maintain a high
level of employee satisfaction. Therefore, Career sales – – – – 3 – 2 – 1 – 6
we periodically assess employee Executives 6 9 13 5 3 1 2 6 6 4 55
satisfaction levels to ascertain whether
Staff – – – – – – – – – – –
we are delivering our commitments to our
employees. We obtain employee feedback Total 6 9 13 6 12 2 8 6 11 5 78
at regular intervals during performance
appraisals, post training evaluations and
exit interviews.
Employees turnover by region and category

Province
Category Central Eastern North North Central North Western Sabaragamuwa Southern Uva Western Grand Total
Executive Directors – – – – – – – – – –
Senior managers – – – – – – – – 4 4
Managers – – – – – – – – 2 2
Assistant manager – – – – – – – – 3 3
Branch Heads 1 – – 1 1 1 2 – 2 8
Career sales – – – – – 1 – 1 4 6
Executives 2 1 1 1 2 – 4 1 43 55
Staff – – – – – – – – – –
Total 3 1 1 2 3 2 6 2 58 78
Employee attrition by gender (%) Employee attrition by category and region (Provinces)
Central
36.0% Eastern
Northern
North Central
64.0%
North Western
Sabaragamuwa
Southern
Male
Uva
Female
Western
During 2017, 50 male employees and 28 0 10 20 30 40 50 60 70 80 90 100 (%)
female employees exited our Company. Directors Branch heads

Senior managers Career sales
Managers Executives
Employee turnover (%)
by category Assistant managers Staff
0.0% 5.1%
2.6%
0.0% 3.8% Employee tenure Knowledge and
10.3% We have maintained a healthy employee skills development
tenure ratio over the past three years The average training hours per employee
indicating that our employee retention is is a strong reflection of the adequate
7.7%
extremely healthy. The average tenure employee development process we have
70.5% of employees has increased to 13 years implemented in our Organisation. On
during the year under review, compared average, an employee undergoes 18.45
to the previous year. This, a reflection of hours of training per annum, both foreign
the effective orientation programmes (4%) and local (96%). This indicates a
Directors Assistant managers Executives
and the successful career planning healthy level, and is a reflection of our
Senior managers Branch heads Staff
and succession planning processes commitment to effectively developing and
Managers Career sales
implemented in the Organisation. empowering our people.

Ceylinco Life Toastmasters Club is one among associates and their families. The
of the salient development modules, maintenance of a holiday bungalow in

which creates leaders and competent Nuwara Eliya, allows employees to spend
communicators. quality time with their family members.
Internal job hires

With the exception of positions filled
through succession planning all other
vacancies are advertised internally by the
HR Department through the “Ceylife Ladder”
concept. We strive to promote within
and develop knowledge and capabilities
of our employees so that we retain our
competitive advantage in the market place.
During the year, 18% of our employees
were given career promotions.
Work-family balance
We support our employees to balance
their personal and professional lives by
instituting policies, procedures, actions,
and expectations. We also give fair
consideration to our employees’ individual
needs through various offers and
opportunities. We strive to strengthen their
identification with the Company and bolster Employee benefits We extend our employees with due
our position as an attractive employer. and rewards compensation on a par with industry
standards maintaining an equitable
Therefore, we encourage employees to Our compensation and benefit policy is
remuneration structure. There is no
utilise their annual leave on a pre-planned geared to attract and retain employees
systematic difference in remuneration for
basis. The percentage of annual leave of the highest calibre. We acknowledge
men and women, provided the position
that has been utilised by employees has and recognise their efforts through a
and qualifications are comparable.
been increasing over the years. We have performance-based reward system and a
implemented a five days a week, eight benefit structure which includes bonuses
We also ensure that all employee EPF,
hours a day work plan, encouraging all based on performance, medical benefits,
ETF and gratuity payments are executed
employees to complete their work by wellness programmes, opportunities for
on time as per the relevant regulations.
5.00pm every weekday. career development, and many more. By
Accordingly, Ceylinco Life contributes
implementing service-based employee
12% EPF and 3% to ETF and an employee
We also organised several events during oriented pension schemes and retirement
contributes 8% to EPF. The company pays
the year, to promote a healthy work-life benefit schemes, we encourage our
gratuity to those employees who have
balance and encourage employee employees for a long tenure of service.
completed five years of service on their
engagement. These included the annual
resignation or retirement, as per the
sports meet, held with the participation of All employees are given two
legislation.
3000 employees and sales consultants at comprehensive life insurance policies
Mahinda Rajapaksha Stadium – Diyagama apart from the staff health insurance cover
Our benefits include:
and the annual Bhakthi Gee and Christmas and the contributory medical fund. The
carols, which encouraged volunteerism employees have the option of enhancing zzFree
medical cover for all staff
and camaraderie. The family day outing their life and critical illness covers at a members including contract employees
to Pegasus Reef Hotel – Wattala was concessionary rate as well. zzLifeinsurance cover for employee and
another event, which promoted bonding family
zzSalary advances and staff sundry loans their concerns and grievances at any union Challenges faced

zzEmployee distress loans forum. There were no cases filed against
Ceylinco Life at the Labour Tribunal on any Matching the expertise of the retiring
zzMotor vehicle loans employees, especially of those senior staff
employee-related issues during the year.
zzWedding grant for employees members who are nearing retirement is
Nor were there any cases pertaining to
zzDeath donations incidents of discrimination or human a key challenge. Our trained and skilled
rights violations. people being hired by competitors and
zzReimbursement of fuel expenses
other companies not behaving in line with
our values is another challenge.
The entire permanent cadre is covered Collective bargaining
by the collective bargaining agreements
signed by the union. All employees are covered by the Focus for 2018
terms and conditions of the collective
bargaining agreement of the Ceylinco We will continue to focus on developing
Occupational health Insurance Employees Union. All operational leadership talent, promote operational
and safety changes are executed based on business excellence, and improving employee
requirements after discussion and engagement.
We places the highest importance to
concurrence of key stakeholders.
ensuring a safe working environment
for all our employees, taking steps to Future outlook
As per our tagline; building relationships
ensure that health and safety concerns We will strengthen our position as an
for life, we foster strong relationships with
are prioritised and addressed across attractive employer by creating shared
our employees. Freedom of association
the Company. Employees are granted values that promote employee well-being.
and expression is encouraged and we
a special health check-up package at a We will continue to nurture a team that
maintain a constant dialogue with
concessionary rate, to assess their health is best in the industry and build strong
our employees ensuring they are well
and take necessary preventive measures. leaders across all leadership levels in our
informed and engaged. We conduct regular
Appropriate number of staff members have organisation, to ensure continuity and long-
staff meetings, use the intranet and hold
been trained, equipped and empowered term growth for our organisation.
informal staff gatherings to promote
as fire fighters to handle any emergency
open communication and active staff
as well.
engagement.
Grievance handling
Diversity and equality
We consider grievances to be opportunities
for improvement. We approach this in a As an equal opportunity employer, we
productive manner. The grievance handling encourage workplace diversity, bringing
procedure is absolutely transparent about innovative thinking while creating an
and the speed of the process has been enabling environment which promotes a
accelerated through right sizing the span productive workforce.
of control. Through our open door policy,
Heads of Departments are empowered to Diversity enhances company performance
address any relevant grievance through and power of innovation and spurs
established procedures. Unsolved issues creativity, motivation and identification
are elevated for equitable resolution with with the Company. Our leadership plays
due process. Ceylinco Life Employees an important role in promoting the
Union often acts as a key mediator in appreciation and inclusion in diversity in
conveying employment related grievances our Organisation. There were no incidents
to Management irrespective of the type of of discrimination reported during the year
issue or category of the employee. under review.
Branch employees are encouraged to table
148
NATURAL
CAPITAL
Natural capital includes all renewable and non-renewable resources

sourced from environment that we utilise internally in the value
creation process. We strongly believe that a sound Natural Capital
management Strategy is vital for long-term and sustainable value
creation. Therefore, we have established policies and procedures
that enable sustainable and efficient business operations.
Our environmental management system is focused on energy
conservation, reduction of carbon footprint, optimum water usage
and efficient waste management. Through these initiatives we
contribute to achieving the Sustainable Development Goals (SDGs)
as an environmentally responsible organisation.
Natural capital value creation model
zzWaste management Rain water zz73 MT GHG emissions zzEfficient

electricity
zzEnergy conservation harvesting, waste offset consumption
zzTree planting and paper recycling, zz197,330 KWh of zzOptimal use of water
“Green” concepts sewerage power generated from and resources
water recycling, renewable sources zzEmployee
zzRecycling
environmental zzActive adoption of “Go commitment to
zzEnergy management
sustainability Green” concept green initiatives
zzCarbon footprint initiatives zzSet up two Green zzEnvironmental
analysis
branches (Kalutara – sustainability
conversion and Chilaw
– new building)
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Natural Capital 149

Natural capital contributing to value creation
Reducing the environmental impact of our business improves the sustainability and long-term success
of our business which helps to deliver increased value to all our stakeholders.
Increasing our natural capital value
We increase the value of natural capital by developing green consciousness in our Organisation,
reducing our carbon footprint, implementing energy and water conservation initiatives and adopting
responsible methods of waste management.
Highlights for 2017
Set up two green branches Kalutara branch was Recycled 11,064 kg of paper
(Kaluthara – Conversion and converted solar energy
Chilaw – new building)
Reduced electricity Reduced water consumption

consumption by 9.2% by 2.6%
Going green water and energy conservation method These buildings are designed to make
to all our branches. Under the Green optimal use of natural light and are
Our deep commitment to preserving the
vehicle scheme we have taken a policy entirely solar powered with a high power
natural environment was reflected when
decision that all new vehicles purchased generating capacity. They are built with
we launched the “Go Green” sustainability
by the Company would be hybrid vehicles. minimal use of timber and are equipped
initiative in 2016 in the head office and
Additionally, we started using only recycled with the latest energy-efficient lighting and
in all our branches. The concept was
material for our corporate rebranding air conditioning systems with facilities for
constructed on three pillars of “Reuse”,
campaigns across the branches. rainwater harvesting and its own car park
“Reduce” and “Encourage”. During the
as well.
year under review, we continued to make
steady progress in the “Go Green” drive Green branches To commemorate our 30 anniversary,
across the Organisation with significant
A key aspect of the “Go Green” campaign a two-storey, 6,000 square feet Green
investments and resource allocations to
is our commitment that every new branch building was constructed in Chilaw in 2017.
make a deep impact in environmental
constructed on Company-owned land will During the next year, two more green
stewardship. We continued to set up new
be a “Green” building. branches to be opened in Kadawatha and
green branches, maintain the 4,000 plus
Ja-Ela increasing the number of green
trees planted in 2016, install solar energy
branches to 13.
in more branch buildings and introduce
150 Natural Capital PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
zzUse of energy saving lighting

We only use energy saving LED lights

in all our newly constructed buildings,
11 whilst all our existing branches are
being installed with energy saving
Green
lighting. During the year under review,
Branches one floor of our head office building
and branches in Kotahena, Wennapuwa
and Negombo were installed with
zz Batticaloa
LED lights. We also strive to make the
zz Horana branches located in hired buildings
zz Panadura energy efficient by converting customer
service areas which are high in light
zz Wennapuwa usage to LED lighting.
zz Colombo 05
zz Kurunegala zzAbandoning suspended ceilings
zz Ratnapura Sourcing of mineral fibers required
for the construction of suspended
zz Bandarawela zzBlend with topography and ceilings has detrimental effects on
zz Trincomalee natural surroundings the environment. Therefore, we have
zz Chilaw Green buildings are designed to stopped installation of suspended
embrace and blend in with their natural ceilings in buildings. This strategy has
zz Kalutara contributed to optimised space in
surroundings, and thereby decrease the
necessity for landfill and cutting down buildings as more height is available
of trees. Our branches in Bandarawela in each floor.
Key Green features of every new building and Kadawatha are prime examples
of our commitment to constructing zzAbandoning the use of
we construct include:
structures that blend with the natural granite and tiles
zzSolar energy contours of the respective sites. In our efforts to preserve natural
All our new buildings are solar powered resources and minimise mining of non-
as part of our commitment to use zzSpace saving designs renewable resources, our buildings are
renewable energy in adherence to the made with cement floors and surface
All new buildings are designed to
corporate “Go Green” strategy. Our head areas are installed with stainless steel
optimise space with 85% of the floor
office, which is one of the largest of sheets and melamine boards instead of
area allocated as usable space and
its kind in the city, generates 63.18kW using granite.
approximately 750 square feet allocated
of electricity annually through solar
for sales. This has a positive effect in
energy. Kalutara branch was converted
optimising consumption of utilities and zzSaving trees
to solar energy during the year under
improving waste management. We also To contribute towards reducing
review increasing the total of solar
hire smaller buildings when operating deforestation, we have used aluminum
powered branches to 11.
branches in leased properties as this instead of timber doors and windows
helps to optimise utilisation of our in our green branches at Kadawatha
resources. and Horana. We also repair and recycle
wooden furniture to use them for a
zzNatural light longer period.
All new buildings are designed to make
optimal use of natural light to minimise
energy consumption.
zzRegulation of air conditioning less energy. In addition, several other consumption of water and implemented

A larger chunk of energy is consumed energy saving initiatives such as installing apt measures to reduce wastage and water
for air conditioning. In order to minimise LED lighting, repairing and reusing old consumption.
our energy consumption, we have furniture, designing branch interiors
that optimise natural light have been
made low usage spaces in our new
implemented as well.
Our Carbon Footprint
buildings such as lobbies, corridors
and lunch rooms non-air-conditioned. In line with our commitment to
We also maintain the temperature environmental stewardship, we measure
of the centralised and regulated air
Water conservation and disclose our greenhouse gas (GHG)
conditioning at 26 degrees across Water is a natural resource which needs to emissions on a voluntary basis. The
our branches. be managed responsibly. We make best computation is based on the GHG Protocol
efforts to reduce our water requirement Corporate Standard developed by the World
through implementing measures that Resources Institute and the World Business
zzEco-friendly pest control measures Council for Sustainability Development.
conserve water and reduce wastage.
We adopt the “Queen sterilisation During the year, we have utilised 720,000
treatment” which is an environmentally litres of water in our Head Office and This assessment includes our Head
friendly termite treatment method that branches. Office and branch offices. The Scope 1
doesn’t contaminate the soil nor adversely computation is completed except for
affect the environment. Rainwater water harvesting system fugitive emissions from air conditioning
plant and equipment (which are relatively
was installed in all our green branches.
negligible), whilst Scope 2 is completed.
A sewerage water recycling plant is
Energy saving installed in the Panadura branch. Both the
Scope 3 disclosure, which is optional, is
limited to data availability and materiality.
We have made firm commitment to Wennappuwa and Panadura branches are
contribute towards energy saving by installed with urinals which are sensor-
Thus, for benchmarking purposes, our GHG
optimising the use of renewable energy controlled. In addition, all three branches
emissions for 2017 arising from Scopes 1
in our buildings. Our head office has the in Wennappuwa, Horana and Panadura
and 2 is 1,183.19 tonnes carbon dioxide
largest installation of solar energy system are installed with flow controlled, flushing
equivalent (tCO2e).
in Colombo which has a system capacity systems, valves and taps. These measures
of 63.18Kw, contributing to reduction of have reduced water consumption
As will be seen in the analysis given
65 tonnes of CO2 emissions annually and significantly by reducing water wastage.
below, purchased grid electricity accounts
saving of 7,580 units of electricity per
for a large 55% slice of our total GHG
month. Whilst all our new branch buildings All our branches use pipe borne water
emissions of 1,763.67 tCO2e. This is a
are installed with solar energy, the rest sourced from the National Water
major reduction of 27.5% compared to
of the branches are being converted to Supply and Drainage Board, except the
last year. Hence, our efforts on energy
solar energy gradually. All the old air Bandarawela branch which use ground
efficiency and switching to renewable
conditioners are being replaced by energy water. During the year, we continued to
energy sources are positive steps towards
efficient air conditions which consume monitor branches that have the highest
reducing our carbon footprint.
2017 2016
Scope Source tCO2e % tCO2e %
Scope 01 (Direct) Stationary Combustion 17.77 1.01 8.69 0.40

Mobile Combustion 643.11 36.46 687.11 31.68
Total Scope 1 660.87 37.47 695.79 32.08
Scope 02 (Indirect) Purchased Electricity (CEB) 522.32 29.62 851.46 39.26
Total scopes 1 and 2 1,183.19 67.09 1,547.25 71.33
Scope 03 (Indirect) Purchased Electricity (CEB) 452.14 25.64 493.45 22.75
Employee Air Travel 128.34 7.28 128.34 5.92
Total Scope 3 580.48 32.91 621.79 28.67
Total Scopes 1, 2 and 3 1,763.67 100.00 2,169.04 100.00
152 Natural Capital PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Waste Management There has been no substantial e-waste

Electricity Consumption (MW)

collected during the year 2017 and the
We make a conscious effort to minimise Company is expecting to re-initiate the 3,000
waste across our network. Waste that campaign in 2018.
cannot be avoided is disposed in a
2,400
responsible manner. Reduction in paper
consumption throughout the Organisation Energy consumption
continued to be an important initiative. 1,800
Waste paper was recycled through a Fuel consumption from

recognised recycler. non-renewable sources 1,200
During the year under review, we recycled Petrol and diesel are the non-renewable
11,064 kg of paper which has saved sources of fuel we use. Total usage for 600
approximately: the year 2017 is 283,058 litres, which

translates into a saving of 19,365 litres of
188 fully grown trees fuel compared to 2016. We encourage our
0
2015 2016 2017
19,417 litres of oil employees to use hybrid vehicles to reduce
44,256 kWh of electricity fuel consumption form non-renewable
sources.
351,614m3 of water 80% of total electricity consumption is for
33 cubic metre of landfill cooling of our premises. We widely use
Fuel consumption (Litres ’000)
solar energy in our buildings. All our new
Reduced 11,064 kg's of Carbon equivalent
400 branches are equipped with solar energy
in GHG emissions
and we have the biggest solar electricity
system in the city of Colombo to date.
Due to the nature of our business, we 320
During the year under review, we have
do not release any significant effluents
reduced 405.37 tonnes of CO2 emissions to
or spills neither do we encounter issues 240 the environment as a result of the energy
pertaining to the transportation of
saving measures implemented. This has
hazardous waste. Also the locations of our
160
enabled us to minimised consumption of
business operations do not affect water
power from the National grid and thermal
bodies or related habitats. Our e-waste
power generators.
waste is stored in a suitable site and when 80
the bulk builds up, tenders are called for its
We do not operate businesses in the
safe disposal.
0 vicinity of protected environmental
2015 2016 2017 areas, neither do our operations pose
any significant impact on biodiversity in
e-waste campaign
protected areas.
During the year 2016 we prevented
4056 Kg's of e-waste from being Electricity usage
dumped into land filling through our 2017 Progress towards
Total electricity consumption for rented and
e-waste campaign.
Company owned buildings for 2017 is
our environmental
This translates into preventing of 2,251,964 kWh, which is a 229,407 Kw sustainability objectives
approximately 26,970 lbs of carbon savings compared to 2016.
Objective Status
emissions from entering the atmosphere,
saving 1,040 trees and recycling 39,047 Reduction of fuel
plastic bottles. consumption by 10% Reduced by 6%
Save electricity
consumption by 10% Reduced by 9.2%
Compliance

There were no incidents of non-compliance
with environmental laws and regulations.
There were no fines or non-monetary
sanctions imposed for non-compliance
with laws and regulations.
Challenges faced
Maintaining good quality construction,
timely completions and maintaining
construction cost within budget of our
branch buildings.
Focus for 2018

We will continue to reduce our carbon
footprint by promoting green practices and
energy efficient improvements throughout
our Company. We will open two green
branches in Chilaw and Kadawatha and
commission the construction of three
new Green branches in Jaffna, Ja-ela and
Nugegoda.
Future outlook
We will continue to minimising our
environmental impact by consistently
reducing our water and energy use
and carbon emissions. We will also use
resource saving processes in our operations
to make products that create value for
our customers and the environment. We
will also set up more new green branches
island-wide, particularly in Piliyandala and
Malabe in the upcoming years.
154
EVENTS
JANUARY FEBRUARY MARCH
Foundation stone laying Family Savari 10 Grand Draw Annual Awards

ceremony at Kadawatha Five policy holder families won Sales and Non-Sales members
Ceylinco Life celebrated its 29th the opportunity to holiday in were awarded with performance
anniversary by laying the founda- selected countries and a day at awards under various categories.
tion stone for a new Green Branch Leisure World at the family savari Foundation Stone laying at
building. promotion. Chilaw Branch
Pranama Awards Ceremony Construction of a new Green
At the 16th Pranama scholarships Branch building in Chilaw
presentation, Ceylinco Life commenced to reduce the
disbursed scholarships to high Company’s carbon footprint.
achieving students.
JULY AUGUST SEPTEMBER
Waidya Hamuwa Pranama relaunch Family Savari Launch 11

Ceylinco Life provided free medical The search for youngsters to be 20 people from five policyholder
consultations and medicines at rewarded with scholarships families wan a holiday to Rome
medical camps organised by the commenced through the in 2018 as the grand prize while
Company for the benefit of 17th round of the “Pranama” 10 policyholders with families
thousands affected by the floods. Scholarships programme which won a trip to China and another
was presented in early 2018. 50 won a trip to Singapore.
Kandy Perahara
A chance to view the Kandy Esala
Perahera from one of the best
points in the city was accorded to
policyholders of Ceylinco Life who
belong to the company’s Premium
Club and members of their families.

APRIL MAY JUNE
Annual Bonus and Cash Bonus Retirement Planning Month Launch of education plan
Rs. 3.8 Bn. in annual bonuses Ceylinco Life’s 10th annual -Degree saver
reached some 300,000 policyhold- Retirement Planning Month
ers of Ceylinco Life in April and May commenced with the company’s Family Savari 10 Tours
this year. Cash bonuses totaling entire sales force being tasked with - Dubai
Rs. 92 Mn. in the form of generating wider awareness of the A visit to Dubai was won by a
immediately encashable cheques importance of retirement planning. group of Ceylinco Life policyholder
were sent during the Sinhala and Family Savari 10 Tours families in the second phase of
Tamil New Year to more than - Leisure World the life insurance leader’s ‘Family
15,000 policyholders. Savari’ mega promotion.
500 policy holders and their fami-
lies were selected for a day of fun Family Savari 10 Tours
at Leisure World under the Ceylinco - Singapore
Life “Family Savari” programme.
OCTOBER NOVEMBER DECEMBER
Seminar series for students Ceylinco Life Sports Festival Family Savari 11 Mid Draw
taking Grade 5 Scholarship The draw identified 24 families
Examination The athletics segment of
the festival was worked out at the and 285 families that would
Students who sat the Year 5 schol- Mahinda Rajapaksa International visit Singapore and Leisure
arship Examination this year re- Stadium, after the cricket, volleyball and World respectively.
ceived valuable prepping courtesy netball tournaments were concluded a
of Ceylinco Life which conducted a few days before.
series of 10 seminars for them.
Launch of protection plus
BEYOND LINKS IN A CHAIN PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Empathy and warmth characterise Ceylinco’s relationship

with our support community.
STEWARDSHIP

Risk Management 158
Corporate Governance 165
Annual Report of the Board of Directors 186
Board Subcommittees 194
Report of the Remuneration Committee 196
Report of the Nomination Committee 197
Report of the Audit Committee 198
Report of the Related Party Transactions

Review Committee 200
Investment Committee Report 201
Board Investment Committee Report 212
Statement of Directors' Responsibility
to Financial Reporting 213
Chief Financial Officer’s Statement 214
The Board’s Statement on Internal Control 215
Ethical conduct provides confidence to our

stakeholders that they are working with an
ethical organisation. Acting with integrity is a
key element of our business strategy and a
positive differentiator with customers. Our well
defined and effective governance structure
promotes the success of our Organisation and
promotes sustainability.
158
RISK MANAGEMENT
Governance of Risk management is inextricably linked The line management and staff
to our strategy and control is exercised are responsible for day-to-day risk
Risk Management by way of a governance framework, management and are represented at
At Ceylinco Life, the Board of Directors which includes principles based on ISO the Sub-Committee level. The six Sub-
retains overall accountability for the 31000:2009(E) Risk Management – Committees, namely the Operations Risk
governance of risk and is committed to Principles and Guidelines. Committee, Financial Risk Committee,
effective risk management in pursuit of our Insurance and Demographic Risk
strategic objectives. It is the responsibility The Executive Risk Committee, headed by Committee, ICT Risk Committee, Business
of the Board, in conjunction with the Board the Chief Risk Officer, is responsible for Risk Committee and Regulatory Risk
Risk Committee, to review the Company’s developing, facilitating and monitoring the Committee, ensure timely identification of
portfolio of risks and assess them against control framework and execution of proper risks, initiation of controls and reporting
the risk appetite. risk management strategies. to the Chief Risk Officer and higher-level
management.
Board
Internal Audit and Board Board
Committee Level
IS Audit of Directors Risk Committee
(3rd Line Defence)
Executive Executive
Committee Level Risk Committee and CRO
(2nd Line Defence)
Insurance and
Operations Business Financial Regulatory ICT
Demographic
Risk Risk Risk Risk Risk
Risk
Committee Committee Committee Committee Committee
Committee
Subcommittee Level
(1st Line Defence)
Technical Risks
Investment
Operations Business (Underwriting/ Regulatory ICT
Risks Liquidity
Risks Risks Claims/ Risks Risks
Risks
Actuarial )
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION risk management 159
The Risk Management Governance Structure of Ceylinco Life incorporates the Three Lines of Defence Model, which identifies, defines and

segregates duties and responsibilities in relation to risk management at Ceylinco Life. This model brings all the key functions into the Risk
Management Governance Structure and provides simple but comprehensive clarity on roles and responsibilities in managing risks.
Three Lines of Defence Model at Ceylinco Life
First Line of Defence zzCompliance with operational policies and procedures

Subcommittees including zzProactive risk identification, assessment, control and monitoring
departments and island wide
zzCollaborative communication to promote a strong risk culture and risk awareness
branches
zzWhistle-blowing to alert others about potential risks
Second Line of Defence zzImplementation of the Risk Management Governance Structure

Executive Risk Committee zzReview and reporting of risks of the departments, branches, products, processes, systems to the Board
Risk Committee, as required
zzIdentification and assessment of risks and monitoring risks against the Board-approved risk appetite
zzRecommending appropriate action to mitigate risks, if any, that have exceeded beyond tolerance levels
Third Line of Defence zzMonitoring compliance with the Risk Management Governance Structure
Board of Directors, Board Risk zzAssessment of the effectiveness of risk management tools and techniques adopted
Committee, Internal Audit and
zzObtaining reasonable assurance from Executive Risk Committee that all known and emerging risks have
IS Audit
been identified and appropriately managed
zzIndependent assurance on the effectiveness of the first and second lines of defence by Internal Audit
and Information Systems (IS) Audit
Risk Management Process

The risk management process of Ceylinco Life is continuous and sequential, as depicted in the diagram. We strongly believe that an ongoing
commitment to risk management is necessary in the modern business context, and also recognise the importance of improving the risk
management process, while ensuring smooth flow of the activities within the process.
Recording
Risk Risk Monitoring
Assessment and Reporting
Identification Response and Control
Rating
Identify all uncertain Assess risks in terms Identify responses Report risks at Track the current
future events that of consequence and controls to different levels status of the risk
may impact the and likelihood, rate manage inherent through the defined profile, detect
achievement of them and plot them risk to an acceptable reporting line changes in the risk
objectives. This on risk matrix residual risk level context and ensure
forms the basis for that the responses
further analysis and controls are
adequate
160 risk management PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Mitigating Our Top Risks environment. Top risks include those

risks that have a direct potential impact

We determine our top risks through a on achievement of longer-term strategic
review process that analyses the risks priorities, reputation and delivery of key
facing Ceylinco Life, in relation to our business plans. Such top risks also have
strategy and longer-term aspirations, in a material impact on our ability to
the context of the external and internal create value.
Ceylinco Life risk portfolio at a glance
Likelihood Insignificant Minor Moderate Major Catastrophic
Almost Certain
Likely 1
Possible 2, 9
Unlikely 6 7 3, 4, 5, 8
Rare
The following table shows the key risks of Ceylinco Life. It provides a snapshot of the potential impact on the Company and what strategic
priorities will be affected if the risks materialise. It also shows the controls and actions we have set in place to address these risks and to
mitigate the potential impact on the Company.
Risk Potential Impact Strategic Priorities Mitigation

Impacted
Strategic Risks
1. Risk of political and zzImpact on long-term Staying ahead of zzPESTEL analysis to identify any emerging risks as well as
regulatory changes planning and forecasting the pack opportunities arising from the external environment
This includes risks due to unpredicted zzThe socioeconomic and political environment is
emerging in the political changes to laws and comprehensively evaluated by the Strategic Planning
and regulatory landscape regulations Committee
that could have an zzIncrease in tax expenses
impact on the Company’s zzIncreased costs to ensure
activities. compliance
2. Maintaining a high zzInability to meet customer Staying ahead of zzUpdate the profiles of sales designations to meet the
calibre sales force service and satisfaction the pack changing expectations of customers
This risk includes internal standards zzA dedicated team of internal trainers, as well as local
and external factors zzReduced profitability and Investing in and foreign trainers, provide training to sales force
that affect our ability to financial strength People based on individual training needs
maintain a best-of-the- zzNegative impact on zzCreate a high performance, ethical and inclusive culture
class sales force which Strengthening
reputation of the for our sales professionals
is essential to providing Relationships and
Company zzUse of a wide range of KPIs to measure agents’
an unmatched customer Collaborations
performance and rewarding based on performance
experience.

Impacted
3. Compliance risk zzRegulatory sanctions and Staying ahead of zzSet the tone at the top through appropriate policies and
The risk of legal or fines the pack procedures to improve the control environment
regulatory sanction, zzNegative impact on zzCompliance Officer supervises the departments on
financial loss or damage corporate image Championing compliance matters and is responsible to the Board on
to reputation as a result Environmental overall compliance of the Company
zzChanges in tax regulations
of failure to comply Sustainability and
impact bottom line zzIdentify changes in the regulatory landscape through the
with applicable laws, Corporate
Regulatory Risk Committee and ensuring preparedness
regulations, codes of Citizenship
to respond to these changes
conduct and standards of
zzInternalaudits on status of compliance with applicable
good practice.
laws and regulations
zzRegular consultation with in-house legal officers
zzProvide training to relevant staff on compliance
requirements and any regulatory changes
4. Generic investment Impact on the revenues and Staying ahead of zzCompliance with the Investment Policy of the Company,
concentration risk profitability by way of; the pack which formally specifies investment concentration limits
This risk arises due to zzReduced benefits of zzThe Company has more stringent internal limits in
excessive concentration diversification Reaping the addition to the limits stipulated by the IRCSL
of the investment zzLikelihood of higher Result of Smart
zzBoth internal and regulatory limits are reviewed and
portfolio. Unless the correlation and volatility Investing
updated in line with business and regulatory changes
investment portfolio is in the market value of
zzReview of actual concentration against the limits by the
sufficiently diversified, assets
Board Investment Committee on a periodic basis
excessive concentration
in one or more asset zzReview the list of financial markets, asset classes,
classes, entities (issuers), issuers and counterparties periodically.
currencies or markets
would create investment
concentration risk.
5. Generic interest Impact on the revenues and Staying ahead of zzMonitor and evaluate the impact of interest rate risk
rate risk profitability by way of; the pack charge to the Capital Adequacy Ratio (CAR)
The risk that the market zzincreased volatility of zzMonitor maturities and interim cash flows falling due
value or future cash flows investment returns and Reaping the and make suitable arrangements for reinvestments or
of a financial instrument market value of assets Result of Smart recalling
will fluctuate due to zzStrain on the capital Investing
zzMonitor the exposure and the impact of the proprietary
changes in interest rates. adequacy if assets trading portfolio to short-term interest rate movements
This includes reinvestment and liabilities are not and trends
risk and inflation risk, adequately matched
zzOversee the overall strategy to manage the interest rate
which eventually impacts
risk and to revisit, change or fine-tune the strategy as
the interest rate. Interest
required
rate changes will affect
reported earnings and the zzContinuous monitoring of the asset and liability position,
underlying value of the including the duration, convexity and sensitivity of the
current asset and liability same to market interest rate changes
position. zzAligning the portfolio duration to optimise the fit with
the liability structure and the interest rate outlook
zzPeriodic monitoring of the Central Bank’s monetary
policy, Government fiscal policy and key economic
variables
162 risk management PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS

Impacted
6. Liquidity risk Impact on the revenues, Staying ahead of zzEnsure interim cash flows and maturity proceeds are
Liquidity risk is the risk profitability and reputation of the pack notified and collected on time without delay
that Ceylinco Life will the Company by way of; zzEnsure investments are assessed and made only in
not be able to meet zzinability to meet Reaping the sufficiently liquid assets, unless where such increased
efficiently both expected liabilities and financial Result of Smart level of liquidity risk is properly compensated through its
and unexpected current commitments as and Investing expected return
and future cash flow and when they fall due
zzMonitor and review the current and future cash flows to
collateral needs, without zzpossible losses due to assess the exposure to liquidity risk
affecting either daily sale of illiquid assets
zzMonitor the current and expected money market
operations or the financial zzpossible loss of liquidity position to ensure that sufficient liquidity or
condition of the firm. confidence among credit lines are available to meet expected funding/
counterparties, financial lending requirements
market participants and
zzVerify all the transactions entered/agreed against
policyholders
confirmations to ensure that all the settlements are
accounted and funded and to avoid any unexpected
cash flows
7. Credit risk Impact on the revenues and Staying ahead of zzEnsure that all maturity and interim cash flows proceeds
Credit risk is the risk that a profitability of the Company the pack are collected duly, on time and without any delay
borrower or counterparty by way of; zzEnsure that outright, repurchase and reverse repurchase
will fail to meet its zzimpairment/write-off Reaping the transactions are entered only with Board Investment
obligations towards of assets leads to a Result of Smart Committee approved counterparties
Ceylinco Life. reduction in profitability Investing
zzEnsure that proper Board Investment Committee
and possible strain on
approval is obtained for all significant investment
the financial and capital
transactions
adequacy position
zzMonitor the current exposure to credit risk and
zzMay lead to liquidity risk
compliance with relevant IRCSL limits, determinations
(explained above) due
and guidelines
to non-realisation of
expected cash inflows zzReview the list of financial markets, asset classes,
issuers and counterparties periodically
8. Insurance and zzUnexpected claim Staying ahead of zzDetermination and application of best estimates and
demographic risk payments which may the pack assumptions and monitoring deviations
These risks include impact profitability zzIndependent sign-off on statutory valuation of life fund
changes in mortality zzReduced financial Strengthening by Messrs Towers Watson and defined employee benefit
and morbidity, strength Relationships and plans by Messrs K A Pandit
changes in policyholder Collaborations
zzUse of Algo Financial Modeler for actuarial analysis
behaviour, reinsurance
zzReview of underwriting limits periodically
basis risk and deviation in
experience. zzContinually monitor non-disclosures, anti-selections,
fraudulent claims, high lapse ratios, free look
cancellation, changes in types of claims etc.
zzObtain professional advice and service on pricing,
reinsurance, etc. (Towers Watson/Munich-re, Milliman
actuarial consultants)

Impacted
Operational Risks
9. Cyber risk zzOperational disruptions Staying ahead of zzAdherence to the Board-approved Information Security
Any risk of financial loss, zzLoss of critical and the pack Policy, which is regularly reviewed for changes in local
disruption or damage sensitive data and and global IT and communication technologies
to the reputation of the information Technology zzContinuous scanning of IT control environment and
Company from failure of Development strengthen security activities and measures as required
zzUnauthorised access to
its information technology corporate information zzAdvanced firewall filters on data being transmitted
systems.
zzRegular virus definitions update
zzAccess controls on external devices
zzRegular health checks on the servers
zzRegular training is provided to all staff on cyber security
zzPenetration testing and vulnerability assessment by an
external consultant
zzIndependent audits on adequacy of the IT security
measures adopted by the Company
Key Developments in 2017 zzSelected and commenced the Looking Ahead

implementation of a state-of-the-art
zzDeveloped a Key Risk Indicator (KRI) Through the continuous assessment of
Finance and Investment Management
dashboard to monitor movements System current and emerging risks, Ceylinco
in key quantifiable risks against the Life is equipped to identify, manage and
zzUpdated the investment operations
Company’s risk appetite mitigate risks more effectively. Increased
based on the recent stringent
zzReviewed the Business Continuity Plan attention will be placed on maintain
guidelines issued by the IRCSL on
and IT Disaster Recovery Plan of the market leadership, mitigating risks to the
investment management
Company by an external consultant value of our investment portfolio and
zzRedrafted the Investment Policy of the income generated thereon, mitigating
zzReviewed adequacy of the backup Company to better align with the recent risks from changing business dynamics
methods and IT controls in protection regulatory and industry changes and compliance with changes in laws and
of critical data and information of the
zzReaped benefits of our conservative regulations. Cyber risk remains a key focus
Company
and cautious counterparty selection and, given the increase in the number
zzEnhanced escalation process for major strategy, thereby assuring the safety and sophistication of cyber-attacks against
decisions to a central risk screening unit of policyholder funds, while averting business entities, we will continue to
zzReviewed the IT Policy to mitigate cyber reputations risks faced by certain invest in our capabilities to mitigate
risks financial institutions due to adverse such attacks.
zzGradually extended the duration of the selection of investment/dealing
portfolio to provide an optimum match counterparties
against the liabilities
164
A QUALITY RESPONSE
risk management PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
The Ceylinco Customer Experience...high quality,

comprehensive solutions that lead to “premier” relationships.
CORPORATE 165
GOVERNANCE

Good corporate governance creates lasting value. We therefore
apply the highest standards to our operations and activities,
complying with all the recommendations and proposals of the
relevant rules, regulations and codes.
We believe that corporate governance numerous challenges and risks over the Code of Conduct and Ethics, by any
stands for a form of responsible the years. Company’s Board of Directors Director or any member of the corporate
company management and control geared provides governance oversight, management team of the Company/Group.
to loan-term creation of value. One of executing their collective and individual
our aims in this context is to foster the responsibilities in an ethical and
confidence of our stakeholders such professional manner. The Board is assisted
as investors, clients, employees and by subcommittees operating under
general public. approved charters/terms of reference
developed in accordance with applicable
Efficient practices on the Board of regulations. J Godwin Perera
Directors, good collaboration between Chairman
staff and the Board, open and transparent During the year, our company implemented
corporate communications are also very several initiatives to improve the corporate 30 March 2018
important to us. governance process. These include forming Colombo
the Board Investment Committee as
per the guidelines issued by Insurance
Chairman’s Statement on Regulatory Commission of Sri Lanka (IRCSL), Key Initiatives Taken
Corporate Governance developing terms of reference for the Board During the Year 2017
Investment Committee, obtaining Board
Our company firmly believes that strong zzForming the Board Investment
approval for the Company’s remuneration
governance is an important foundation Committee as per the guidelines issued
policy and Investment policy statement and
for sustainable performance and is by IRCSL and Terms of Reference for
developing the key risk indicator dashboard.
fundamental to its success. Accordingly, the Board Investment Committee was
your Board strives to ensure good developed.
The Corporate Governance Report
governance is embedded throughout the zzThe Remuneration Policy was formally
presented on pages 166 to 185 details the
organisation, which goes beyond mere approved by the Board or Directors.
governance framework of our company.
compliance with corporate governance
This report shows the status of compliance zzKey Risk Indicator dashboard was
requirements and best practices.
with the Code of Best Practice on Corporate developed.
Therefore, Ceylinco Life, though not a
Governance, issued jointly by the Securities zzInvestment
Policy Statement of the
listed entity, voluntarily adopts best
and Exchange Commission of Sri Lanka Company was approved by the Board.
corporate governance practices to ensure
(SEC) and The Institute of Chartered
transparency, integrity and accountability.
Accountants of Sri Lanka (CA Sri Lanka).
As required by the above Code, I hereby
It is these sound governance practices
confirm that I am not aware of any
that has enabled our company to
material violations of the provisions of
successfully withstand and overcome
166 CORPORATE GOVERNANCE PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Corporate Governance Model of Ceylinco

Life Insurance Limited (CLIL) depicts

the framework used by the Board of
Directors to discharge its leadership with
prudent and effective controls, enabling
the risk of the Company to be assessed
and managed.
STRATEGIC
REGULATORY ASSURANCE BUSINESS
FRAMEWORK MECHANISMS PLANNING
COMMITTEE
Mandatory External Shareholder Board Audit

Compliance Auditors at AGM Committee
Companies Board
Act No. 07 of 2007 Remuneration
Committee
Regulation of
Internal Chairman
Insurance Industry
Controls and Board of
Act No. 43 of 2000 as
Directors
amended
Board
Nomination
IRCSL Rules and Committee
Determinations
Code of
Ethics Managing
Director/CEO
Inland Revenue Act Board
as amended Related Party
Transactions
Review
Committee
Other Applicable External
Legislation Controls
Board Risk
Committee
Voluntary
Compliance Board
Investment
Code of Best Committee
Practice issued by Employee
CA Sri Lanka and SEC Participation (Union)
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION CORPORATE GOVERNANCE 167

Board of
Expertise Meetings
Directors
Finance 5
Board
Executive Marketing 2
Directors HR 1 6 Meetings
Military 1
Rajkumar Investment 1
Renganathan
Medicine 2
Thushara IT 1 Remuneration
Ranasinghe Committee
Legal 1
Devaan Cooray Actuarial 1
Palitha 1 Meeting
Jayawardena
Ranga
Abeynayake
Audit Committee
4 Meetings
Non-Executive
Senior Manager
Directors
Internal Audit
Senior Manager Gender Nomination
Godwin Perera
IS Audit Committee
Herschel
Female 1
Gunawardena 1 Meeting
Male 14
Chandrika Sirilal
Weerasooriya
Rohan
Senanayake RPTR Committee
Chief Risk Executive Risk
Officer Committee 4 Meetings
Independent
Non-Executive
Directors
Sustainability Risk Committee
Committee J A Setukavalar
Mohan De Silva Age 4 Meetings
Gamini De Silva
Jayantha 41–50 Years Male 1
Wickramasinghe 51–60 Years Male 5
Board Investment
Sugath Caldera Female 1 Committee
Amali Kaushala 61–70 Years Male 6
Seneviratne 71 and above Male 2 2 Meetings
Code of Best Practice on Corporate Governance issued jointly by The Institute of Chartered Accountants of Sri Lanka (CASL) and Security
Exchange Commission (SEC).
The Code of Best Practice on Corporate Governance was introduced in 2003 and revised in 2008, 2013 and recently in 2017.
The Code revised in 2017 is applicable from 1st January 2018 onwards. Therefore, this Annual Report does not include revised sections
of the new Code. The main objective of a Code of Corporate Governance is to reduce the agency problem between those charged with
governance (Directors) of a business entity and the shareholders, which arises when the Directors do not act in the best interest of
the shareholders.
Section How the Code is complied with Status of

Compliance
A Directors
A.1 The Board – Every public company should be headed The Company is headed by an effective Board and it directs,
by an effective Board, which should direct, lead and leads, and controls the Company to ensure long-term success.
control the Company.
The Board of Directors is the highest and central governance
body of Ceylinco Life Insurance Limited (CLIL). The Board of
Directors acts as the custodians of the Company’s Vision,
Purpose and Values.
The Board and the Committees provide direction to the

Senior Management and provide entrepreneurial leadership
to pursue best interests of the Company.
A.1.1 The Board should meet regularly at least once in every Frequency of meetings √
quarter of a financial year The Board of Directors meets once in every two months to
discharge their duties, responsibilities towards the Company.
Name of the Director No. of Attendance Additionally, subcommittee meetings were held as the
meetings requirements. For the year 2017 the Board met six times.
1. Rajkumar Renganathan 6 6/6

Provision of information to the Board
2. Thushara Ranasinghe 6 4/6 The Company Secretary prepares Board agendas in
3. Devaan Cooray 6 5/6 consultation with the Directors and this is shared among the
4. Palitha Jayawardena 6 6/6 Directors at least one week before meetings. This enables
the Directors to prepare well for the meetings and contribute
5. Ranga Abeynayake 6 6/6
effectively to Board discussions.
6. Godwin Perera 6 6/6
The minutes of previous Board meetings, as well as of
7. Herschel Gunawardena 6 6/6
subcommittee meetings, are sent to all Directors in a timely
8. Chandrika Sirilal Weerasooriya 6 4/6 manner for their comments and record. All subcommittee
9. Rohan Senanayake 6 6/6 minutes are tabled at the Board meeting that follows
10. J A Setukavalar 6 5/6 immediately.
11. Mohan de Silva 6 3/6
12. Gamini de Silva 6 5/6
13. Jayantha Wickramasinghe 6 5/6

14. Sugath Caldera 6 6/6
15. Amali Kaushala Seneviratne 6 6/6


Compliance
A.1.2 The Board's role and responsibilities; Corporate Governance Model of Ceylinco Life Insurance Limited √
(CLIL) depicts (Pages 166 to 167) the framework used by the
Board to discharge its entrepreneurial leadership with prudent
and effective controls enabling the risk of the Company to be
assessed and managed.
ensuring the formulation and implementation of a The Board of Directors provides strategic direction to the √
sound business strategy; Management to develop short, medium and long-term
corporate business strategies. The objectives of the Company
are disclosed to the Board at the first Board meeting of
the year and progress is monitored throughout the year.
Accordingly, Director/CFO presented to the Board the
objectives for 2017 which were reviewed by the Board
throughout the year. Board approval is sought for major
decisions and substantial investments. Strategies are
implemented by the Senior Management of the Company.
ensuring that the CEO and Management team possess The Board has taken into consideration, the necessity of the √
the skills, experience and knowledge to implement right mix of skills and professional experience to implement
the strategy; the Company's strategy. Management Team also possess the
skills, experience, and knowledge (Refer pages 30 to 36 for
Corporate Management profiles) to implement the strategies
executed through the Strategic Business Planning Committee.
ensuring the adoption of an effective CEO and Key Key Management Personnel succession is considered vital √
Management Personnel succession strategy; in the Company. To this end, the Company launched a
project in 2016 to recognise and develop the second tier of
management with a long-term view of enabling them to
assume key management positions.
ensuring effective systems to secure integrity of Effective systems and procedures are in place to ensure √
information, internal controls, business continuity and the integrity of information, internal controls and
risk management; information security. Accordingly, Board Subcommittees
such as the Audit, Remuneration, Nomination, Related
Party Transactions Review Committee (RPTRC), Investment,
and Risk Committees have been formed. Such systems are
continuously monitored by the Management, Internal and
External Auditors, and at times by independent experts.
The Company has a Business Continuity Plan (BCP) which

is implemented through the BCP team. During 2017, a BCP
review was conducted by the Company.
ensuring compliance with laws, regulations and In compliance with Insurance Regulatory Commission of √
ethical standards; Sri Lanka (IRCSL) regulations, the Board has appointed a
Compliance Officer, who monitors compliance with all applicable
laws, rules and regulations. Compliance reports, signed by the
Compliance Officer, are submitted quarterly to the Board through
the Audit Committee. The Company submitted all statutory
returns to the IRCSL, Central Bank of Sri Lanka (CBSL), Registrar
of Companies (ROC) and other regulatory bodies and all statutory
payments were duly made.

Compliance
ensuring all stakeholder interests are considered in Strategic Business Planning Committee (SBPC) brings all √
corporate decisions; the stakeholder concerns to the overview of the Executive
Directors who thereby inform the Board to consider all
the stakeholder interests are addressed to ensure that the
interests of all stakeholders are considered and safeguarded in
making corporate decisions.
The Company's stakeholder engagement process is described

on pages 71 to 75.
recognising sustainable business development in The Board recognises the necessity of sustainable business √
Corporate Strategy, decisions and activities; development in the corporate strategy, decisions, and
activities. Please refer to Management Discussion and
Analysis on pages 82 to 153 for more information on the
Company’s activities with regard to sustainable business
development.
ensuring that the Company’s values and standards are The Board is committed to adopting most appropriate √
set with emphasis on adopting appropriate accounting accounting policies, based on Sri Lanka Accounting Standards
policies and fostering compliance with financial (SLFRS/LKAS). They are reviewed periodically in the light of
regulations; and changes in business requirements and best industry practices.
Refer to the Independent Auditors’ Report given on page 222.
fulfilling such other Board functions as are vital, given The Board assumes responsibility for functions that are √
the scale, nature and complexity of the business vital and complex given the nature of the Life Insurance
concerned. business, for example Actuarial, Underwriting and
Investment Functions.
A.1.3 The Board collectively, and Directors individually, Members of the Board collectively and the Directors √
must act in accordance with the laws and a procedure individually, act in accordance with the laws of the country,
agreed by the Board of Directors should be in place, as applicable and the Board obtains professional advice from
to obtain independent professional advice, at the most qualified external independent parties at the expense
Company’s expense. of the Company.
During the year under review, the Company sought advice

on various matters regarding actuarial valuation, marketing,
legal, tax and accounting aspects etc.
A.1.4 All Directors should have access to the advice and Advice and services of the Company Secretary √
services of the Company Secretary. Any question of the The Company Secretary's role is to support the Chairman,
removal of the Company Secretary should be a matter the Board and the subcommittees of the Board by ensuring
for the Board as a whole. the proper flow of information and that Board policies and
procedures are followed. Any Director may call upon her
at any time for advice and assistance in respect of their
duties and the effective operation of the Board and Board
subcommittees. The Company Secretary also plays a critical
role in maintaining the relationship between the Company
and its stakeholders, including assisting the Board in
discharging its obligations to the shareholder. The role of the
Company Secretary is in line with Schedule ‘F’ of the Code.

Compliance
Removal of the Company Secretary

Removal of the Company Secretary, if the need arises, will be
decided by the Board as a whole.
A.1.5 All Directors should bring independent judgement to All Directors are expected to make decisions objectively, √
bear on issues of strategy, performance, resources and avoiding conflicts of interest and in the best interests of
standards of business conduct. the Company. The Board has established a Related Party
Transactions Review Committee (RPTRC) to review all related
party transactions and an Interests Register is maintained
to preserve independence of the Directors. Particularly,
Non-Executive Directors are encouraged and welcomed to
provide their independent analysis and opinion using their
professional knowledge and experience. (Refer Composition
of skills and expertise on page 172).
A.1.6 Every Director should dedicate adequate time and The Board met once in every two months in 2017
effort to matters of the Board and the Company, to to discharge its duties. In addition to attending the
ensure that the duties and responsibilities owed to the Board meetings, Directors contribute by attending the
Company are satisfactorily discharged. Subcommittee meetings. Details of the members of the
said Committees, meetings and attendance in respective
committee reports on pages 196 to 212.
A.1.7 Every Director should receive appropriate training New Directors are inducted to the Board by providing them √
when first appointed to the Board of a company, and with a comprehensive understanding of their duties and
subsequently as necessary. The Board should regularly responsibilities. Continuous self-development is decided upon
review and agree the training and development needs by the Directors and executed. The Board is kept constantly
of the Directors. updated on key industry and regulatory changes and their
effects on Company operations.
A.2 Clear division of responsibilities between Chairman and The posts of Chairman and MD/CEO were held separately by √
Chief Executive Officer to ensure a balance of power Mr Godwin Perera and Mr R Renganathan respectively.
and authority.
This segregation ensures a clear division between the
Chairman’s responsibility to manage the Board and the
MD/CEO’s responsibility to manage the Company’s business,
which thereby ensures a balance of power and authority.
A.2.1 A decision to combine the posts of Chairman and The positions of the Chairman and the MD/CEO are separated. Not
CEO in one person should be justified and highlighted applicable
in the Annual Report.
A.3 The role of the Chairman to preserve order and The Chairman is responsible for ensuring that the Board √
facilitate the effective discharge of Board functions. operates under the highest standards of governance. He
is charged with ensuring effective discharge of the Board
functions.

Compliance
A.3.1 Role of the Chairman. The Non-Executive Chairman is responsible for chairing and √
managing the operations of the Board. He encourages all
Directors to contribute effectively to decision-making. He
particularly encourages Independent Non-Executive Directors
and Non-Executive Directors to voice their views and concerns
openly, which ensure a balance of power between Executive
and Non-Executive Directors. He also builds constructive
relations between the MD/CEO and Non-Executive Directors
to reach consensus in Board decisions. He takes appropriate
steps to provide effective communication with stakeholders
and to ensure that stakeholders’ views are communicated to
the Board as a whole.
A.4 Financial Acumen

Composition of qualified accountants
40%
60%
Qualified accountants
Other
The Board should ensure the availability within it of The Board comprises four (4) Fellow Chartered Accountants √
those with sufficient financial acumen and knowledge including the Managing Director/CEO and two (2) Chartered
to offer guidance on matters of finance. Management Accountants, who provide guidance on financial
matters. The Board also comprises a qualified Actuary. Please
refer to their profiles on pages 22 to 29.
A.5 Board Balance – The Board to have a balance of The Board comprises ten Non-Executive Directors and five √
Executive and Non-Executive Directors such that no Executive Directors. Refer to composition of the Board
individual or small group of individuals can dominate on page 173.
the Board’s decision-taking.

Compliance
A.5.1 The Board should include at least two Non-Executive Number of Non-Executive Directors √
Directors or such number of Non-Executive Directors The CLIL’s Board of Directors comprises 15 members of whom
equivalent to one-third of total number of Directors, 5 are Executive Directors and 10 are Non-Executive Directors.
whichever is higher.
Role of Non-Executive Directors
Executive and Non-executive (No.) The 10 Non-Executive Directors are highly experienced
director composition professionals in their respective fields and bring a worth mix of
experience to the Board. The Non-Executive Directors scrutinise
10
the Management’s performance in achieving agreed corporate
goals and objectives. They also constructively challenge the
8 Executive Management in all areas.
0
Non-Executive Executive
Directors Directors
Independent Directors
A.5.2 Two or one-third of Non-Executive Directors appointed The Board consists of six Independent Directors, who √
to the Board of Directors whichever is higher should be represents more than one-third of the Non-Executive
“independent”. Directors in the Board.
A.5.3 For a Director to be deemed “independent” such All Independent Non-Executive Directors are independent √
Director should be independent of management of management and free of any business or other interest
and free of any business or other relationship that that could materially interfere with or could reasonably be
could materially interfere with or could reasonably be perceived to materially interfere with the exercise of their
perceived to materially interfere with the exercise of unfettered and independent judgement.
their unfettered and independent judgement.
A.5.4 Each Non-Executive Director should submit a Each Non-Executive Director submitted a signed declaration √
signed and dated declaration annually of his/her of independence/non-independence, against specified criteria
independence or non-independence. for the year 2017.
A.5.5 The Board should make a determination annually as The Board has determined the independence or √
to the independence or non-independence of each non-independence of each Director based on the signed
Non-Executive Director based on such a declaration declarations submitted to the Board.
made and other information available to the Board.
The Board determines that a Director is independent No Director was determined to be independent by the Not
notwithstanding the existence of relationships or Board, notwithstanding the existence of relationships or applicable
circumstances which indicate the contrary, the names circumstances which indicate the contrary.
of Directors so determined to be “independent” should
be set out in the Annual Report.

Compliance
A.5.6 Appointment of an Alternate Director by a An Alternate Director has been appointed by an Independent √
Non-Executive Independent Director. Non-Executive Director and the person so appointed
satisfies the criteria of independence and the appointment
of Alternative Director does not violate the provision on
minimum number of Independent Directors.
A.5.7 In the event of the Chairman and CEO is the same

person, the Board should appoint one of the
Independent Non-Executive Directors to be the
“Senior Independent Director” (SID) and disclose this
appointment in the Annual Report. As the positions of Chairman and CEO are separated, the
need to appoint a Senior Independent Director has not Not
A.5.8 The Senior Independent Director should make himself arisen. However, if the need arises, the Company will make applicable
available for confidential discussions with other provisions.
Directors who may have concerns which they believe
have not been properly considered by the Board as a
whole and which pertain to significant issues that are
detrimental to the Company.
A.5.9 The Chairman should hold meetings with the If a need arises, Non-Executive Directors shall meet without √
Non-Executive Directors only, without the Executive the presence of the Executive Directors. Further Chairman
Directors being present, as necessary and at least once consults Non-Executive Directors to obtain their assessment
each year. on matters of importance as and when necessary.
A.5.10 Where Directors have concerns about the matters of During the year 2017 the Board made all decisions √
the Company which cannot be unanimously resolved, unanimously and there were no concerns raised by the
they should ensure their concerns are recorded in the Directors which needed to be recorded in the Board minutes.
Board Minutes. However, if such concerns do arise, the Company’s policy is to
record them accordingly.
A.6 Supply of Information – The Board should be provided with timely information in a form and of quality appropriate to √
enable it to discharge its duties.
A.6.1 Management has an obligation to provide the Board Board Papers, Minutes, Reports and other documents to be √
with appropriate and timely information. The Chairman tabled at Board meetings are sent to members of the Board
should ensure all Directors are properly briefed on well in advance, giving adequate time for Directors to study
issues arising at Board meetings the said documents and prepare for a meaningful discussion
at respective Board meetings. Also, when the Board finds
that the information provided is insufficient or not clear, they
can request additional information.
A.6.2 The Minutes, Agenda and Papers required for a Board The minutes, agenda and other Board papers are circulated √
meeting should ordinarily be provided to Directors at within the Board of Directors one week before the meeting
least seven (7) days before the meeting, to facilitate to be held.
its effective conduct.
Similar processes apply to Board Subcommittee meetings
as well. All Board Subcommittee minutes are tabled at the
Board meeting that follows immediately.
A.7 Appointments to the Board – There should be a formal and transparent procedure for the appointment of new √
Directors to the Board.

Compliance
A.7.1 A Nomination Committee should be established to The Nomination Committee of CLIL makes recommendations √
make recommendations to the Board on all new to the Board on all new Board appointments if any arises.
Board appointments. Details on the Nomination Committee are given on page 197
For the year 2017 there were no new appointments
A.7.2 The Nomination Committee should assess Board The Nomination Committee met once for the year 2017 and √
composition to ascertain whether the combined assessed the Board composition to ascertain whether the
knowledge and experience of the Board matches the combined knowledge and experience of the Board matches
strategic demands facing the Company. the strategic demands facing the Company, considering
changes in the business environment. Details are given in
Composition of skills the Nomination Committee Report in page 197.
and expertise
7%
7% 30%
7%
14%
7% 14%
7% 7%
Finance Military IT
Marketing Investment Legal
HR Medicine Actuary
A.7.3 Upon the appointment of a new Director to the Board, No new Directors were appointed during the year under √
the Company should disclose such appointment and review.
the relevant information of the Director to shareholders
A.8 Re-election – The Board mandate clearly defines the procedure to be adopted in appointing new members to the √
Board. Nomination Committee shall make recommendations to the Board on all new Board appointments.
A.8.1 Non-Executive Directors should be appointed for The Articles of Association of the Company do not allow √
specified terms subject to re-election and their automatic re-election of Non-Executive Directors. According
re-appointment should not be automatic. to the Articles 18B one-third of the Non-Executive Directors
should let themselves re–elected by rotation.
The Directors who retire by rotation are those who have been
longest in office since their appointment/reappointment.

Compliance
A.8.2 All Directors including the Chairman of the Board All Directors including the Chairman of the Board √
should be subject to election by shareholders at the were re-elected by the shareholder at the AGM held
first opportunity after their appointment, and to re- on 30 March 2016.
election thereafter at intervals of no more than three
According to the Articles of Association of the Company, all
years.
Directors except for the Executive Directors are subject to
re-election at intervals of 3 years.
In terms of Section 210 of the Companies Act No. 07 of 2007,

Directors reaching the age of 70 years are recommended
for re-election by way of an ordinary resolution by the
shareholder.
A.9 Appraisal of Board Performance – Boards should periodically appraise their own performance in order to ensure that √
Board responsibilities are satisfactorily discharged.
A.9.1 The Board should annually appraise itself on its The Board has in place a system of self-assessment and √
performance. appraisal.
A.9.2 The Board should also undertake an annual self- The Board undertakes annual self-evaluation of its own √
evaluation of its own performance and that of its performance and that of its committees.
committees.
A.9.3 The Board should state how such performance The Board evaluates the performance by using the evaluation √
evaluations have been conducted, in the Annual stated in the Code.
Report.
A.10 Disclosure of Information in respect of Directors – Shareholders should be kept advised of relevant details in respect √
of Directors
A.10.1 Details with regards to each Director to be disclosed in Disclosure Requirement Page No.
the Annual Report. Name, qualifications and brief profile 22-29
The nature of his/her expertise in relevant functional areas 22-29
Executive, Non-Executive and/or Independent Director 22-29
Number of Board meetings of the Company attended 168
during the year
The total number of Board seats held by each Director 177
indicating listed and unlisted companies and whether in an
Executive or Non-Executive capacity
Names of Board Subcommittees in which the Director serves 194-195
as Chairman or a member
Number of committee meetings attended during the year 196-212

Compliance
Board seats
Name of the Directors Listed Unlisted Executive Non Executive
1. Rajkumar Renganathan 1 9 1 9
2. Thushara Ranasinghe 1 5 4 2
3. Devaan Cooray 1 1 1 1
4. Palitha Jayawardena 1 4 4 1
5. Ranga Abeynayake 2 1 1 2
6. Godwin Perera 1 1
7. Herschel Gunawardena 3 3 3 3
8. Chandrika Sirilal Weerasooriya 1 1
9. Rohan Senanayake 9 9
10. J A Setukavalar 1 6 6 1
11. Mohan De Silva

12. Gamini De Silva 1 1
13. Jayantha Wickramasinghe 1 1
14. Sugath Caldera

15. Amali Kaushala Seneviratne
A.11 Appraisal of CEO – The Board should be required, at least annually, to assess the performance of the CEO. √
A.11.1 The Board in consultation with the CEO should set, The Board has set out financial and non-financial targets √
short, medium and long-term objectives of the and short medium and long-term objectives that need to be
Company, reasonable financial and non-financial achieved by the CEO.
targets that should be met by the CEO.
A.11.2 The performance of the CEO should be evaluated by This is an ongoing process and performance at the end of the √
the Board at the end of each fiscal year. financial year is assessed by comparing performance with
budgeted targets.
B Directors remuneration
B.1 Remuneration Procedure – Companies should establish a formal and transparent procedure for developing policy on √
executive remuneration.
B.1.1 The Board of Directors should set up a remuneration The Board of Directors of CLIL has set up a remuneration √
Committee to make recommendations to the Board, Committee and the Committee acts according to the Board
within agreed Terms of Reference, on the Company’s approved Terms of Reference.
framework of remunerating Executive Directors.
The Remuneration Committee makes recommendations to
the Board on the remuneration payable to the Directors. They
compile and review the guidelines and recommendations for
the remuneration of the Senior Management of
the Company.
The Board makes the final determination, having considered

the recommendations of this Committee and also its
performance.

Compliance
B.1.2 Remuneration Committee should consist exclusively of The Remuneration Committee comprises 3 (three) √
Non-Executive Directors, and should have a Chairman, Non-Executive Directors, out of whom the Chairman of
who should be appointed by the Board. the Committee is an Independent Non-Executive Director
appointed by the Board.
B.1.3 The Chairman and members of the Remuneration Details on the members of the Committee are given on the √
Committee should be listed in the Annual Report Remuneration Committee on page 196.
each year.
B.1.4 The Board as a whole should determine the The Board decides upon the remuneration of the √
remuneration of Non-Executive Directors, including Non-Executive Directors who do not play a part in the
members of the Remuneration Committee, within the determination of their own remuneration. This is done within
limits set in the Articles of Association. the limits of the Articles of Association.
B.1.5 The Remuneration Committee should consult the The Remuneration Committee consults the MD/CEO about its √
Chairman and/or CEO about its proposals relating to proposals relating to remuneration. The Terms of Reference
the remuneration of other Executive Directors and have of the Remuneration Committee set out provisions to obtain
access to professional advice. professional advice from within and outside the Company.
The Remuneration Committee has the access to professional

advice from within and outside the Company to effective
discharge of their duties.
B.2 The Level and Make up of Remuneration – Levels of remuneration of both Executive and Non-Executive Directors √
should be sufficient to attract and retain the Directors needed to run the Company successfully.
B.2.1 The Remuneration Committee should provide the The Remuneration Policy is structured in a manner to attract √
packages needed to attract, retain and motivate and retain high calibre professionals as Executive Directors,
Executive Directors. in line with industry standards. Details of the Directors’
remunerations are given in page 304.
B.2.2 Comparison of remuneration with other companies. Industry standards and trends are taken in to consideration √
by the Remuneration Committee when deciding upon levels
of remuneration and links are made between remuneration
levels and performance.
B.2.3 Comparison of remuneration with other companies in The Remuneration Committee takes in to consideration
the Group. the remuneration levels elsewhere in the Group when
determining the remuneration levels and increments
B.2.4 The performance-related elements of remuneration The performance-related elements of remuneration have
of Executive Directors should be designed and tailored been designed in a way that individual performance and
to align their interests with those of the Company and increases in company performance are positively linked.
main stakeholders.
B.2.5 Executive share options should not be offered at No executive share options exist in the Company. Not
a discount. applicable
B.2.6 In designing schemes of performance-related The Remuneration Policy of the Company has encapsulated √
remuneration, Remuneration Committee should follow the guidelines provided in Schedule E of the Code.
the provisions set out in Schedule E in the Code.

Compliance
B.2.7 Remuneration Committees should consider Termination of the Executive Directors is governed by the √
compensation commitments on early termination. contract of service/employment of each Director.
B.2.8 Where the initial contract does not explicitly provide The Remuneration Policy of the Company has been designed √
for compensation commitments, Remuneration to be in line with all applicable legal requirements.
Committees should, within legal constraints, tailor their
approach in early termination cases to the relevant
circumstances.
B.2.9 Levels of remuneration for Non-Executive Directors The time, commitment and responsibilities that the role √
should reflect the time, commitment and responsibilities entails are taken in to consideration when determining the
of their role, taking into consideration market practices. remuneration of Non-Executive Directors. Remuneration for
Non-Executive Directors does not include share options.
Remuneration for Non-Executive Directors should not
normally include share options.
B.3 Disclosure of Remuneration – The Company’s Annual Report should contain a Statement of Remuneration Policy and √
details of remuneration of the Board as a whole and a specimen of a Remuneration Committee report followed by
Schedule D.
B.3.1 The Annual Report should set out the names of Details on the members of the Committee and a statement √
Directors comprising the remuneration committee, of the Remuneration Policy are given on page 196.
contain a statement of remuneration policy and set
The aggregate remuneration paid to the Directors is disclosed
out the aggregate remuneration paid to Executive and
on page 304.
Non-Executive Directors.
C Relations with shareholders
C.1 Constructive use of the AGM and Conduct of General Meetings – Boards should use the AGM to communicate with √
shareholders and should encourage their participation.
C.1.1 Companies should count all proxy votes. The Company is a 100% owned subsidiary of Ceylinco
Insurance PLC. The Company solicits the Holding Company’s
views, promoting a healthy dialogue. The Company held its
third AGM on 30 March 2017. The Sole shareholder appointed
a proxy who attended the meeting and all the resolutions
proposed were carried out unanimously.
C.1.2 Companies should propose separate resolutions for Each substantially different issue is proposed as a separate √
each substantially separate issue and adoption of the resolution at the AGM. The adoption of the Annual Report
Annual Report and Accounts. of the Board of Directors on the Affairs of the Company and
Financial Statements with Independent Auditors’ Report
thereon, is also proposed as a separate resolution.
C.1.3 Availability of Chairmen of Board committees at The Chairmen of the Audit, Remuneration, Nomination, √
the AGM. RPTR and Risk Committees were present at the last AGM to
answer questions and concerns raised by the shareholder.
A representative (usually the engagement partner) of the
External Auditors also attends the AGM and takes questions
from the shareholder relating to their audit of the Company’s
Financial Statements, if required.

Compliance
C.1.4 Adequate notice of the AGM. The Company has given more than 15 working days notice √
as per the Companies Act No. 07 of 2007 and the Articles of
Association of the Company.
C.1.5 Circulation of a summary of the procedures governing The summary of the procedure governing the voting is √
voting at General Meetings with the Notice of General circulated with the Proxy Form.
Meetings.
C.2 Communication with Shareholders – The Board should implement effective communication with shareholder. √
C.2.1 A channel to reach all shareholders of the Company in The Company maintains a healthy dialogue with its sole √
order to disseminate timely information. shareholder, Ceylinco Insurance PLC at all times. The Company
uses the AGM, Annual Report, Quarterly Financial Statements,
MEMOs, notices in the newspapers and the Company website
to reach the shareholder.
C.2.2 The Company should disclose the policy and The Company's policy with regard to the communication √
methodology for communication with shareholders. with shareholders is as per applicable statutory requirements
and adopted best practices. This involves the utilisation of
a variety of effective and formal channels to ensure that
accurate information is given in a timely manner.
C.2.3 The Company should disclose how they implement the The implementation of this policy is done through the √
above policy and methodology. utilisation of a variety of channels mentioned under C.2.1
C.2.4 The Company should disclose the contact person for The contact person to contact is the Company Secretary and √
such communication. the contact Nos. are disclosed in the Annual Report on Page 7.
C.2.5 A process to make all Directors aware of major issues If there are any major issues and/or concerns raised by √
and concerns of shareholders, and this process has to shareholder, they are brought to the attention of all Directors
be disclosed by the Company. by the Company Secretary. No such issues and/or concerns
were raised by the shareholder during the year.
C.2.6 The Company should decide the person to contact in The shareholder is encouraged to maintain direct √
relation to shareholders’ matters. communication with the Company. The Company Secretary
is the main contact person in relation to such matters whose
contact details are provided on page 7.
C.2.7 The process for responding to shareholder matters. Appropriate responses and action, if any are decided upon √
by the Board and then the Company Secretary communicates
this to the shareholder in the most appropriate manner
depending on the circumstances.
C.3 Major and Material Transactions – Directors should disclose to shareholders all proposed material transactions, which if √
entered into, would materially alter/vary the Company’s net assets base.
C.3.1 Directors responsibility to disclose the details of major RPTR Committee is appointed to review all related party √
and material transactions to the shareholders for transactions and if there is any major and material related
their approval. party transaction the Company discloses such transactions
according to the statutory requirements.

Compliance
D Accountability and audit

D.1 Financial Reporting – Board responsibility for statutory and regulatory reporting. √
D.1.1 Board responsibility for statutory and regulatory The Board of Directors of CLIL takes all steps to present a √
reporting. balanced and understandable assessment of the Company's
financial position, performance and prospects. The Board
assumes the responsibility to present such balanced and
understandable assessment and that they extend it to
interim and other price-sensitive public reports and reports
to regulators as well as to information to be presented by
statutory requirements.
Also the Company presents its Financial Statements in line

with Sri Lanka Accounting Standards (SLFRS/LKAS) and other
applicable laws and regulations. The Board’s responsibility
for financial reporting is given on page 213 The Company
voluntarily published its Interim Financial Statements on
time during the year under review to promote a culture or
transparency and the all regulatory reports were filed by
their due dates. More details are given in the Statement of
Directors Responsibility to financial reporting on page 213.
D.1.2 Declarations by Directors in the Annual Report of Board The following information has been declared in the Annual √
of Directors'. Report of the Board of Directors from pages 186 to 193.
– Declaration that the Company has not engaged in any

activity which contravenes laws and regulations page 192
– Declaration that the Directors have declared all material
interests in contracts involving the Company is given on
page 190
– Declaration that the Company has made all endeavours to
ensure the equitable treatment of the shareholder is given
on page 73 and 189
– Declaration that the business is a going concern is given
on page 191
– Declaration that the Directors have conducted a review of
the internal controls, covering financial, operational and
compliance controls’ and risk management is given on
page 191
D.1.3 Statements by Directors and Independent External Refer the Statement of Internal Control on page 215 and the √
Auditors. Independent Auditors’ report on page 222.
D.1.4 The Annual Report should contain a “Management Management Discussion and Analysis is given in the pages √
Discussion and Analysis”. 82 to 153 which includes the disclosures set in the code as
given below.
D.1.5 Declaration on the going concern of the Business by The declaration of the Company as a “going concern” is given √
the Directors. in the Statement of Directors responsibility on page 191.

Compliance
D.1.6 Summoning of an Extraordinary General Meeting (EGM) During the year under review, there has not been a √
in the event the net asset fall below 50% of the value requirement to summon an EGM to notify serious loss of
of the Company's shareholders’ funds. capital yet if such an event arises, an EGM would be called to
notify the shareholder of the position and remedial action to
be taken.
D.1.7 Disclosure of related party transactions in the Related party transactions (RPT) during the year 2017 are √
Annual Report given on page 304.
The Related Party Transactions Review Committee (RPTR)

reviews and approves all related party transactions of the
Company and the details of the duties discharged during the
year are given in the Report of the Related Party Transactions
Review Committee on page 200.
D.2 Internal Control – The Board should have a process of risk management and a sound system of internal control to √
safeguard shareholders’ investments and the Company’s assets.
D.2.1 The Directors should, at least annually, conduct a The ultimate responsibility for the system of internal √
review of the risks facing the Company and the controls lies with the Board of Directors. Some of these
effectiveness of the system of internal controls. responsibilities have been delegated to the subcommittees
to better discharge. These committees review internal
control processes of the Company. Particularly Board Risk
and Audit Committees take necessary measures and steps
to ensure the proper systems are designed to safeguard the
Company’s assets, proper and accurate accounting records are
maintained, accurate management information is presented
etc. The Company conducts regular reviews of risks through
the comprehensive risk management process in place.
D.2.2 Companies should have an internal audit function. The internal audit function of the Company is monitored by √
the Internal Audit Department and IS Audit Department of
the Company, subject to the direct supervision of the Audit
Committee. They monitor the Company’s adherence to the
procedures and guidelines, developed based on the policies
adopted by the Company as well as laws and regulations.
Prior to each Audit Committee meeting the senior manager

Internal Audit and IS Audit meet the Chairman of the Audit
Committee without the presence of the Management.
D.2.3 Audit Committee to carry out reviews of the process The Audit Committee also assesses the efficiency and √
and effectiveness of risk management and internal effectiveness of the risk review process and systems
controls. of internal control on a regular basis. Further, the Audit
Committee reviews the compliance system of the Company
on a quarterly basis. Minutes of both Audit Committee and
the Risk Committee meetings are tabled at Board meetings
for review.
D.2.4 Statement of Internal Control. Refer the Statement of Internal Control on page 215. √

Compliance
D.3 Audit Committee – The Board should establish formal The broad purposes of the Audit Committee is to oversee √
and transparent arrangements for considering how the preparation, presentation and adequacy of the disclosure
they should select and apply accounting policies, of information in Financial Statements, in accordance with
financial reporting and internal control principles and prevailing Accounting Standards and all other statutory
maintaining an appropriate relationship with the requirements.
Company’s Auditors.
The Audit Committee also ensures the Company’s internal
control system is up to the industrial/international standards.
The Committee monitors the compliance of statutory

requirements by the Management. The Committee also
assesses the independence and performance of the
Company’s Auditors.
D.3.1 Composition of the Audit Committee Full detailed report on the Audit Committee, names of the √
members of the Committee and the External Auditors are
disclosed on pages 198 and 199 under “The Report of the
Audit Committee”
Audit Committee comprises three Non-Executive Directors,

two of whom are Independent Directors. The Chairman of the
Audit Committee is a Non-Executive Director appointed by
the Board.
D.3.2 The duties of the Audit Committee The Audit Committee monitors and reviews the External √
Auditors’ independence, objectivity and the effectiveness
of the audit process, taking into account the relevant
professional and regulatory requirements.
Messrs Ernst & Young, the External Auditors of the Company,

has given a declaration of its independence to the Audit
Committee, as per the relevant rules.
D.3.3 The Audit Committee should have a written Terms of The Audit Committee Charter adopted by the Board of √
Reference, dealing clearly with its authority and duties. Directors governs the Committee. More details are given on
pages 198 to 199 under “Audit Committee Report”.
D.3.4 Disclosures required by the Audit Committee in the Names of the Directors in the Audit Committee, √
Annual Report. determination of the independence of the Auditors, basis of
such determination and more details on the audit function
of the Company are given under the Report of the Audit
Committee on pages 198 to 199.
D.4 Code of Business Conduct and Ethics – Companies must adopt a Code of Business Conduct and Ethics for Directors, and √
Key Management Personnel and must promptly disclose any waivers of the Code for Directors or others.

Compliance
D.4.1 All Companies must disclose whether they have a The Company practices a Code of Best Business Conduct √
Code of Business Conduct and Ethics and Ethics requiring all employees to exercise honesty,
objectivity and due diligence in performing their duties,
maintain confidentiality of commercial and price sensitive
information, work within applicable laws and regulation,
safeguard the Company’s assets and avoid conduct which will
badly reflect on them or the Company’s image. The said Code
of Conduct and Ethics, addresses issues relating to conflict
of interest situations, bribery and corruption, entertainment
and gifts, accurate accounting and record keeping, corporate
opportunities, confidentiality, fair dealing, protection and
proper use of Company assets, compliance with laws and
regulations and encouraging the reporting of any illegal or
unethical behaviour.
D.4.2 Affirmation by the Chairperson There has been no violation of the Code of Conduct of the √
Company by any Director or any member of the Corporate
Management of the Company during the year. The Chairman
has affirmed this in his statement on page 165 that there is
no violation of the Code of Business Conduct and Ethics.
D.5 Corporate Governance Disclosures – Directors should be required to disclose the extent to which the Company adheres √
to established principles and practices of Good Corporate Governance.
D.5.1 Disclosure of compliance with the Corporate Board of Directors of CLIL have taken steps within their √
Governance Code. full power to sure that the Company has complied to the
corporate governance principles and practices. The Corporate
Governance Report is included in the Annual Report. Pages
168 to 185 set out the manner and extent to which the
Company has complied with the principles and provisions of
the Code of Best Practice on Corporate Governance issued
jointly by CA Sri Lanka and SEC.
Section Shareholders Compliance

02
E Institutional investors
E.1 Shareholder Voting – Institutional shareholders have a responsibility to make considered use of their votes and should Not
be encouraged to ensure their voting intentions are translated into practice. applicable
E.1.1 Communication with shareholders Not

applicable
E.2 Evaluation of Governance Disclosures The Company’s Corporate Governance Framework and √
Practices are discussed in detail from pages 168 to 185 giving
due attention to the interests of institutional investors.

Section Shareholders Compliance
02
F Other investors
F.1 Investing/Divesting Decision – Individual shareholders, Not
investing directly in shares of companies should be applicable
encouraged to carry out adequate analysis or seek
independent advice in investing or divesting decisions.
F.2 Shareholder Voting – Individual shareholders should be The Company is a 100%-owned subsidiary of Ceylinco Not
encouraged to participate in General Meetings Insurance PLC. applicable
of companies and exercise their voting rights.
G Sustainability reporting
G.1 Principles of Sustainability Reporting The Company, having identified the importance of √
sustainability reporting, provides a detailed review of its
sustainability initiatives during the year under review in the
below mentioned sections of the Annual Report.
G.1.1 Economic sustainability “Operating Environment” and “Financial Capital” on pages 42 √
to 56 and 82 to 90.
G.1.2 The Environment “Social and Relationship Capital” on pages 104 to 130. √
G.1.3 Labour Practice “Employee Capital” on pages 132 to 147. √
G.1.4 Society “Social and Relationship Capital” on pages 104 to 130. √
G.1.5 Product Responsibility “Customer Capital” on pages 108 to 118. √
G.1.6 Stakeholder identification, engagement and effective “Operating Environment” on pages 42 to 56. √
communication
G.1.7 Sustainable reporting and disclosure should be The report is done according to the GRI guidelines. Refer √
formalised as part of the Company’s reporting "Social and Relationship Capital" for more details on pages
processes and take place on a regular basis. 104 to 130.
Accountability and disclosure

The members of the Board of Directors have reviewed in detail the Financial Statements in order to satisfy themselves that they present a
true and fair view of the Company’s affairs.
By Order of the Board,
A C H Waidyasekara
Company Secretary
Ceylinco Life Insurance Limited
30 March 2018
Colombo
186
ANNUAL REPORT OF
THE BOARD OF DIRECTORS
General The details set out in the following report

are guided by the Companies Act No. 07

The Directors of Ceylinco Life Insurance of 2007 and by the recommended best
Limited (CLIL) are pleased to submit the practices on Corporate Governance
04th Annual Report of Directors for the depicted in the Code of Best Practices on
year ending 31 December 2017 on the Corporate Governance 2013, issued jointly
affairs of the Company together with by the Institute of CA Sri Lanka and SEC
the Audited Financial Statements and of Sri Lanka.
the Auditors Report on those Financial
Statements conforming to all relevant Following table depicts the information
statutory requirements in terms of Section disclosed in this report as required by
168 of the Companies Act No. 07 of 2007. Section 168 of the Companies Act No. 07
of 2007.
Reference to the Companies Companies Act No. 07 2007 requirement Annual Report
Act No. 07 2007 Sections page reference
Section 168 (1) (a) The nature of the business of the Company together with any changes thereof during the 187
accounting period.
Section 168 (1) (b) Signed Financial Statements of the Company for the accounting period completed in 223
accordance with Section 152.
Section 168 (1) (c) Independent Auditors’ Report on the Financial Statements of the Company. 222
Section 168 (1) (d) Accounting Policies of the Company and any changes therein. 230-308
Section 168 (1) (e) Particulars of the entries made in the Interest Registers of the Company during 190
the accounting period
Section 168 (1) (f) Remuneration and other benefits paid to Directors of the Company during 304
the accounting period.
Section 168 (1) (g) Total amount of donations made by the Company and its subsidiaries during the accounting 188
period.
Section 168 (1) (h) Information on Directorate of the Company during and at the end of the accounting period. 22-29
Section 168 (1) (i) Separate disclosure on amounts payable to the Auditors as Audit Fees and Fees for other 188
services rendered during the accounting period by the Company.
Section 168 (1) (j) Auditors’ relationship or any interest with the Company. 188
Section 168 (1) (k) Acknowledgement of the contents of this report/Signatures on behalf of the Board of 193
Directors.
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION ANNUAL REPORT OF THE BOARD OF DIRECTORS 187
This report was approved by the Board the Company has not engaged in any are duly certified by the Director/CFO,

of Directors on 30 March 2018. The activity, which contravene with laws and recommended by the Audit Committee,
appropriate no. of copies of the Annual regulations of the country during the said approved by the Board of Directors and
report will be submitted to the Central period. Further, there were no significant signed by the Director/CFO and the
Bank, Insurance Regulatory Commission changes in the nature of the principal Managing Director, in compliance with the
of Sri Lanka (IRCSL) and to the Sri Lanka activities of the Company during the requirements of Sections 151, 152 and
Accounting and Auditing Standards financial year under review. 168 (1) (b) of the Companies Act No. 07 of
Monitoring Board within the statutory 2007 are given on pages 223 to 308 of this
deadlines. The ultimate holding Company is Ceylinco Annual Report.
Insurance PLC. Subsidiaries of the Company
are Serene Resorts Limited, Ceylinco Seraka
Nature of the business Limited and Ceylinco Healthcare Services The Auditors’ Report
of the Company and Limited. Citizens Development Business Further, the Company Auditors performed
Finance PLC is an Associate Company the audit on the Financial Statements for
its subsidiaries of CLIL. the year ended 31 December 2017 and the
CLIL is a Public Company with limited Auditors’ Report issued thereon, is given on
liability incorporated on 22 April 2014 Ceylinco Healthcare Services page 222 as required by Section 168 (1) (c)
bearing Registration No. PB 5183, licensed CLIL has 99.45% stake and the registered of the Companies Act No. 07 of 2007.
as a Company authorised by IRCSL number of the Company is PB 135.
(formerly known as Insurance Board of Sri
Lanka) to carry on long-term life insurance Ceylinco Healthcare Services Limited was
Changes to the group
business, under the control of Regulation established in the year 2000 and it is the structure and accounting
of Insurance Industry (Amendment) Act No.
43 of 2000. The Company was incorporated
only private sector “Radiation Treatment polices
Centre” for treating cancer patients in
as a legal requirement that arose out of Sri Lanka. There were no changes to the group
Section 53 of the said Act, which required structure or to the accounting policies
segregating long term and general during the Financial year ended
insurance business from the composite
Serene Resorts Limited
31 December 2017.
insurance companies. The Company is CLIL has 98.15% stake and the registered
domiciled in Sri Lanka and the registered number of the Company is PB 19.
office is situated at No. 106, Havelock Entries in the
Serene Resorts Limited is aimed at serving
Road, Colombo 05 where the Company’s
the elderly population of the country by
interest register
head office is operated.
establishing a retirement home. The Company maintains an Interest
Register in compliance with the Companies
The Company’s Vision and Purpose are
Ceylinco Seraka Limited Act No. 07 of 2007. All Directors have
exhibited on the inner cover page of the
CLIL has 98.2425% stake and the made declarations as required by Section
Annual Report.
registered number of the Company is 192 (1) and (2) of the Companies
PB 1786. Act No. 07 of 2007.
In achieving its Vision and Purpose, all
Directors and employees conduct their
activities to the highest level of ethical Ceylinco Seraka Limited is engaged in
offering investment advisory services.
Remunerations and
standards, reflecting the commitment
to high standards of business conducts other benefits of Directors
and ethics. More details are given on page 38 under Directors’ remuneration in respect of the
the topic of “Group Structure”. Company for the financial year ended
The Company’s principal activity is 31 December 2017 is given in Note 42 to
carrying out underwriting all classes of Financial Statements the Financial Statements as required by
Life Insurance. The Company received the Section 168 (1) (f) of the Companies
license to carry out its business as a long
of the Company Act No. 07 of 2007.
term insurance provider by the IRCSL on The Financial Statements of the Company,
1 June 2015. The Directors declare that for the year ended 31 December 2017,
188 ANNUAL REPORT OF THE BOARD OF DIRECTORS PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Donations and with the Audited Financial Statements On this basis, the dividend payout ratio
provide an overall review of business amounts to 4.75% of the profit after tax of
other corporate performance and the state of affairs of 2017, compared to 12.18% in year 2016.
social responsibility the Company, together with the important
events took place during the year under
During the year, the Company has made Dividends on
review as required by Section 168 of the
donations amounting to Rs. 4.4 Mn. in
terms of the Shareholder Resolution passed
Companies Act. No. 07 of 2007 and the ordinary shares
recommended best accounting practices.
by the shareholders, in the AGM held on The Directors recommend to pay a final
30 March 2017. dividend of Rs. 0.36 per share which will
Further, the Company has opened branches
be paid partly out of Rs. 9 per share.
across all districts of the country. As at
The CSR initiatives of the Company are
end of the year under review there were
detailed under the “Social and Relationship The Board of Directors provided the
273 branches.
Capital” in the section on “Management Statement of Solvency to the Auditors
Discussion and Analysis” in the Annual and obtained Certificates of Solvency from
Sector wise contribution to the Company’s
Report on pages 82 to 153. Auditors in terms of Section 56 (2) of the
revenue, results, assets and liabilities
Companies Act No. 07 of 2007 and they
is disclosed in Note 5 to the Financial
also will fulfil the requirements of the
Amount payable Statements on pages 232 to 235.
Solvency Test in terms of Section 56(3)
to the Auditors of the Companies Act No. 07 of 2007
The fees paid to the Auditors are disclosed Future developments immediately after the payment
in the Note 31 in the Financial Statements of dividend.
Likely future developments in business
attached. are discussed in the Review of Managing
The Board was satisfied that the Company
Director on pages 16 to 21.
would meet the solvency test after the
Auditors’ relationship declaration of the aforesaid dividend and
or any interest Gross income/gross written required to obtain a solvency certificate
from the Company’s Auditors to that effect.
with the Company premium
The Board authorised the distribution, in
Independence confirmation has been The Gross Income of the Company for year terms of Section 56 of the Companies
provided by Messrs Ernst & Young as 2017 was Rs. 15.7 Bn. (Rs. 15 Bn. in 2016). Act No. 07 of 2007. The said dividend
required by the Section 163 (3) of The sources of external operating income, will be paid, subject to the approval by
the Companies Act No. 07 of 2007, in net operating profit and asset allocation the Shareholder Rs. 5,275 Mn. (net of
connection with the audit for the year of the Company together with their dividend) was transferred during the year
ended 31 December 2017 confirming proportions are given in Note 24 (a) to the to retained earnings.
that Ernst & Young is not aware of Financial Statements on page 281.
any relationship with or interest in the
Reserves
Company or any subsidiary audited by Dividends and reserves
Ernst & Young that in their judgement, may A summary of the Company’s reserves are
reasonably be thought to have a bearing Performance of the Company and given below:
on their independence within the meaning Transfers to reserves.
Total reserves of the Company stood at
of the Code of Professional Conduct
The profit before tax of the Company Rs. 20.65 Bn. as at 31 December 2017. This
and Ethics issued by The CA Sri Lanka,
amounted to Rs. 9.8 Bn. in 2017 includes the Restricted Regulatory Reserve
applicable as at the Reporting date.
(Rs. 3.7 Bn. in 2016) and this was an of Rs. 3.46 Bn. recognised in compliance
increase of 162% (72% in 2016). Further with the IRCSL Direction 16 on Transfer
Review of the business the net profit after tax of the Company of the One-off Surplus. Information on
amounted to Rs. 9.4 Bn. in 2017 and this the movement of reserves is given in the
The Chairman’s Review on pages 12 to 15,
was an increase of 207% compared to Statement of Changes in Equity on page
The Managing Director's Review on pages
2016. 226 and the Notes 19 (b) to 19 (d) to the
16 to 21 and the Management Discussion
Financial Statements on pages 272 to 273.
and Analysis on pages 82 to 153, together
Property, plant and Issue of shares Substantial shareholding

equipment or debentures The Company is a fully owned subsidiary
The net book value of property, plant and of Ceylinco Insurance PLC. The Company
During the year the Company has not
equipment of the Company, as at the has issued 50,000,050 ordinary shares
raised any funds either through a public
Reporting date amounted to Rs. 7.4 Bn. to the said Sole Shareholder. Information
issue, right issue or in a private placement.
Total capital expenditure during the year relating to dividends and net asset per
for acquisition of property, plant and share are stated under Investor Capital on
equipment by the Company, amounted Share information pages 106 to 107.
to Rs. 903.5 Mn. More information on The stated capital is the total of all
property, plant and equipment are given amounts received by the Company, in Directors of the Company
in Notes 7, of the Financial Statements on respect of the issue of shares. The stated
pages 237 to 244. The Board of Directors of the Company
capital of the Company, as at 31 December
as at 31 December 2017, consisted
2017, amounts to Rs. 500,000,500.00
Specific information on extent, location, of 15 Directors with wide knowledge
(Rupees Five Hundred Million and Five
valuation of the land and buildings held by and experience on economic, financial,
Hundred), which is represented by issued
the Company are given in Notes 7 (i) to the commercial and healthcare as detailed
and fully paid 50,000,050 ordinary shares.
Financial Statements on pages 242 to 243. in the Board of Directors profiles
on pages 22 to 29.
The Company has not purchased its own
The details of capital expenditure approved shares during the year under review.
and contracted for are given in Notes 7 (b) Names of the Directors of the Company
and 7 (c) to the Financial Statements on during and as end of 31 December 2017 as
pages 240 to 241. required by the Section 168 (1) (h) of the
Companies Act No. 07 of 2007 are given
below:
Market value of
the properties J G P Perera – Chairman/Non-Executive Director
The Company carried out a revaluation R Renganathan – Executive Director/Managing Director/
of all its freehold land and buildings as Chief Executive Officer
at 31 December 2016. The revaluation of E T L Ranasinghe – Executive Director/Deputy Chief Executive Officer
the land and buildings of the Company
P D M Cooray – Executive Director/Head of HR and Training
was carried out by professionally qualified
independent valuers and the Board of Palitha Jayawardena – Executive Director/Chief Financial Officer
Directors of the Company is of the opinion Ranga Abeynayake – Executive Director/Deputy Chief Financial Officer
that the revalued amounts are not in D H J Gunawardena – Non-Executive Director
excess of the current market values of such
Gen C S Weerasooriya (Retired) – Non-Executive Director
properties.
R S W Senanayake – Non-Executive Director
Details of the market value (revalued J A Setukavalar – Non-Executive Independent Director
amounts) of freehold properties of the Prof Mohan de Silva – Non-Executive Independent Director
Company are given in Note 7 (i) to the
Dr B G S De Silva – Non-Executive Independent Director
Financial Statements on pages 242 to 243.
Jayantha Wickramasinghe – Non-Executive Independent Director
The next revaluation exercise on the Sugath Caldera – Non-Executive Independent Director
freehold land and buildings of the Ms A K Seneviratne – Non-Executive Independent Director
Company will be carried out as at
31 December 2019.
Directors of the subsidiary companies

Ceylinco Healthcare Services Limited Ceylinco Seraka Limited Serene Resorts Limited
R Renganathan – Chairman R Renganathan – Director R Renganathan – Chairman/Director

E T L Ranasinghe – Director E T L Ranasinghe – Director E T L Ranasinghe – Director
Palitha Jayawardena – Director Palitha Jayawardena – Director P D M Cooray – Director
Dr S Larry Lessin – Director Palitha Jayawardena – Director
Dr W M James – Director Ranga Abeynayake – Director
E R S G S Hemachandra – Director R M U K Ratnayake – Director
Prof M M R W Jayasekara – Director A H R Udayasiri – Director
Disclosure of Directors’ dealings in shares

As the Company is not listed in the CSE, there were no shares nor debentures of the Company held by the Directors.
Directors’ disclosure of interest
Directors’ interests in contracts or proposed contracts (as requested by S 192 of

the Companies Act No. 07 of 2007)
The Directors of the Company have no direct or indirect interest in any contract or proposed contract with the Company, except for those
specified which have been disclosed and declared at meetings of Directors.
The Company carried out transactions in the ordinary course of business on an arm’s length basis with entities where a Director of the
Company is the Chairman or a Director of such entities, as details below:
D H J Gunawardena
R S W Senanayake
P A Jayawardena
E L T Ranasinghe
S R Abeynayake
R Renganathan
Weerasooriya
P D M Cooray
J P G Perera
Gen. C S
Name of the Company/Trust
1. Ceylinco Healthcare Services Limited   

2. Ceylinco Insurance PLC        
3. Ceylinco Seraka Limited   
4. Citizen Development Business Finance PLC  
5. Seraka Investment Limited 
6. Serene Resorts Limited     
7. SMB Real Estate Limited 
8. SMB Securities (Pvt) Limited 
9. Castle Realty Private Limited 
10. Ciesot Private Limited 
In addition, Related Party Disclosures as per Sri Lanka Accounting Standards are detailed in Note 42 to the Financial Statement on pages 303
to 307 of this Annual Report.
Directors’ and The Board recommended the Exposure to risk

re-election of the following
officers’ insurance Directors after considering the
internal control
The Company has, during the financial recommendations of the Nomination The Directors acknowledge their
year paid an insurance premium in respect Committee: responsibility for the Company’s system of
of insurance policy for the benefit of the zzProf Mohan De Silva internal control. The systems are designed
Company and the Directors are given in to provide reasonable assurance that the
zzDr Gamini De Silva
Note to the Financial Statement on assets of the Company are safeguarded
zzJayantha Wickramasinghe
Page 305. and to ensure that proper accounting
records are maintained. The Board of
Retirement and Re-election Environmental protection Directors, having reviewed the system
of internal control, is satisfied with the
The Company has not engaged in any systems and measures in effect at the
(i) In accordance with the Section 210
activity that was detrimental to the date of signing this Annual Report.
of Companies Act No. 07 of 2007,
environment and has been in due
J Godwin Perera will retire and be
compliance with all applicable laws and
eligible himself to be re-elected as
a Director of the Company. J Godwin
regulations of the country to the best Risk management
of its ability. The Company has chosen
Perera will be 81 years of age in The Company has a separate Board
“Go Green” as the theme for the year under
December 2018 and the shareholders Risk Committee, to look after the policy
review. The Company’s effort in this
approval shall be sought by way development for risk management of
regard is described in the Natural Capital
of an ordinary resolution that J the Company. Risk Management of the
on pages 148 to 153.
Godwin Perera to be re-elected as a Company is given in pages 158 to 163
Companies Act No. 07 of 2007, shall under the topic of ‘Risk Management’.
not apply to J Godwin Perera. Statutory payments
In accordance with the Section 210 The Board of Directors confirm that to the Appointment of Auditors
of Companies Act No. 07 of 2007, best of their knowledge and belief, all
Gen C S Weerasooriya will retire and The Financial Statements for the year have
taxes, duties and levies payable by the
be eligible himself to be re-elected been audited by Messrs Ernst & Young
Company and in respect of the employees
as a Director of the Company. (Chartered Accountants) and in accordance
of the Company and all other known
Gen C S Weerasooriya will be 74 with the Companies Act No. 07 of 2007
statutory dues, as were due and payable
years of age in December 2018 a resolution will be proposed to the
by the Company, as at the Reporting
and the shareholders approval shall shareholder for the approval pertaining to
date have been paid or, where relevant
be sought by way of an ordinary their reappointment and authorising the
provided for.
resolution that No. 07 of 2007, shall Directors to determine their remuneration.
not apply to Gen C S Weerasooriya. The retiring Auditors, Messrs Ernst &
Events after reporting date Young (Chartered Accountants) have
Both appointments were considered
No material events have taken place signified their willingness to continue to
at the Nomination Committee of the
after the Reporting date, which require function as the Auditor to the Company.
Company and recommended to the
an adjustment to or a disclosure in the Auditors’ remuneration The fees paid to
Board of Directors to notify to the
Financial Statements and disclosed in the Auditors are disclosed in the Note
Shareholder.
Note no. 43 to the Financial Statement on 31 to the Financial Statements on page
(ii) In terms of Articles 18 (B) of the 286. The Auditors of the Company, Messrs
page 307.
Articles of Association, one third Ernst & Young have confirmed that they
out of the Non-Executive Directors do not have any relationship with the
are required to retire by rotation at Going concern Company other than that as the Auditors
each AGM. Article 18 provides that The Board of Directors is satisfied that which would have an impact on their
the Directors to retire by rotation at the Company has adequate resources to independence.
an AGM shall be those who (being continue in operational existence for the
subject to retirement by rotation) foreseeable future, to justify adopting the
have been longest in office, since going concern basis in preparing these
their last election or appointment. Financial Statements.
Ratios and market regulatory bodies such as IRCSL, CBSL, Corporate Governance
The institute of Chartered Accountants

price information of Sri Lanka and the SEC. Directors’ declarations
2017 2016 %
(i) The Company complied with all
The Composition of Board Subcommittees applicable laws and regulations in
Dividend per share 9.0 7.5 20.0
as at 31 December 2017 and the details conducting its business and has not
Dividend Payout 7.5 12.2 (38.5) of the attendance by Directors at meetings engaged in any activity contravening
Net assets value are tabulated on respective Committee the relevant laws and regulations.
per share 412.9 238.2 73.3 reports on pages 196 to 212. Compliance officer, who has the
ultimate responsibility for ensuring
compliance with the provisions in
Directors’ meetings Directors’ responsibility for various laws and regulations, confirm
The details of the Board and Board financial reporting compliance in each quarter to the
Subcommittees meetings and the Audit Committee of the Company,
attendance of Directors at these The Directors assume the responsibility
through the Internal Auditor.
meetings, are given on page 168 and in for preparing Financial Statements, which
reflect a true and fair view of the state of (ii) The Directors have declared all
the respective Committee reports. material interests in contracts
affairs of the Company. The Directors are
of the view that the Income Statement, involving the Company and refrained
Board subcommittees Statement of Comprehensive Income, from voting on matters in which they
Statement of Financial Position, Statement were materially interested.
The Board of Directors of the Company
of Changes in Equity, Statement of Cash (iii) The business is a going concern with
has formed three main Board Committees
Flows, Significant Accounting Policies and supporting assumptions as necessary,
namely Nomination Committee,
Notes thereto appearing on pages 223 to and that the Board of Directors has
Remuneration Committee and Audit
308 have been prepared in accordance reviewed the Company’s business
Committee as suggested by the Code of
with Sri Lanka Accounting Standards plans and is satisfied that the
Best Practices on Corporate Governance
(SLFRS/LKAS). The said Accounting Policies Company has adequate resources
issued jointly by CA Sri Lanka and SEC
adopted in the Financial Statements, are to continue its operations in the
of Sri Lanka. Also the Board formed
given on pages 223 to 308 as required by foreseeable future. Accordingly the
the Related Party Transaction Review
the Section 168 (1) (d) of the Companies Financial Statements to the Company,
Committee to assist the Board in reviewing
Act No. 07 of 2007. The Board of Directors its Subsidiaries and Associates are
all related party transactions carried out
wish to confirm that there were no prepared on the Going Concern
by the Company by adopting the Code of
material changes in the Accounting Policies assumption.
Best Practice on Related Party Transactions
as issued by the Securities and Exchange adopted by the Company, during the year (iv) They have conducted a review of
Commission of Sri Lanka. under review. internal controls covering financial,
operational and compliance controls,
The Board has formed two more The Statement of Directors' Responsibility risk management and have obtained
voluntary Board Subcommittees to assist to Financial Reporting appearing on page a reasonable assurance of their
the Board of Directors. They are Board 213 forms as integral part of this Report. effectiveness and proper adherence.
Risk Committee and Board Investment
Committee. Tax expenses The Board of Directors have shown
their commitment to maintain an effective
Tax expense has been computed at the
These committees play a critical role in Corporate Governance structure and
rates given in Note 33 to the Financial
order to ensure that the activities of the always be in compliance with all
Statements, appearing on pages 287 to
Company are conducted with the highest relevant rules, regulations and best
289 of this Report.
ethical standards and in the best interest of practices on Corporate Governance,
all its stakeholders. extending beyond regulatory requirements.
Investments More details are given in the Corporate
The terms of reference of these Governance report on pages 165 to 185.
subcommittees conform to the Total investments of the Company and
recommendations made by various other equity investments amounted to
Rs. 92.26 Bn.
Sustainability Annual General Meeting

The Company has considered the The fourth Annual General Meeting of
sustainability aspects when formulating its CLIL, will be held by way of a resolution
business strategies and the more details in accordance with S (144) (3) of the
are given on pages 57 to 61. Companies Act No. 07 of 2007 on
30 March 2018 and the approval of the
sole shareholder, Ceylinco Insurance PLC
Human resources will be sought for all important matters on
The Company continued to develop separate resolutions.
appropriate human resources management
policies and focus their contribution
towards the achievement of corporate
Acknowledgement of
goals. The Company’s HR Policy and more the contents of the report
other details are given in Employee Capital
As required by the Section 168 (1) (k) of
section on pages 132 to 147.
the Companies Act No. 07 of 2007, the
Board of Directors does acknowledge
Register of Directors the contents of the Annual Report and is
signed for and on behalf of the Board of
and Secretaries Directors.
As required under Section 223 (1) of
the Companies Act No. 07 of 2007, the Signed in accordance with the resolution
Company maintains a Register of Directors adopted by the Directors.
and Secretaries, which contain information
of each Director and the Company
Secretary.
P A Jayawardena
Technology Director/CFO
All of our processes involve information
technology and the Company use
technology to deliver superior products
and services to our customers. Key
achievements for the year are detailed on R Renganathan
page 95. Managing Director/CEO
30 March 2018
Operational excellence
To increase efficiency and reduce operating
cost the Company has ongoing initiatives
to drive policy and process standardisation
and to optimise the use of existing
technology platforms.
194
BOARD SUBCOMMITTEES
Board Meeting Members Secretary Invitees Notice of the

subcommittees frequency meeting
1. Remuneration Once in six Prof Mohan De Silva Independent Company Managing Director/CEO, Director/ CFO Week before
Committee months (Chairman) Non-Executive Secretary and Director/Deputy CFO
Director
Herschel Non-Executive
Gunerwardena Director
Rohan Senanayake Non-Executive
Director
2. Audit Committee Quarterly J A Setukavalar Independent Company Director/CFO, Director/Deputy CFO, Week before
(Chairman) Non-Executive Secretary Senior Manager – Internal Audit.
Director Senior Manager – IS Audit, Senior
Herschel Non-Executive manager – Finance and External Audit
Gunerwardena Director Partners (If necessary)
Jayantha Independent
Wickramasinghe Non-Executive
Director
3. Nomination As and Dr Gamini De Silva Independent Company Director/CFO Week before

Committee when (Chairman) Non-Executive Secretary
necessary Director
or once a Jayantha Independent
year Wickramasinghe Non-Executive
Director
R Renganathan Executive Director –
MD/CEO
4. Related Party Quarterly Herschel Non-Executive Company Senior Manager – Finance Week before
Transaction Gunerwardena Director Secretary
Review (Chairman)
Committee Rohan Senanayake Non-Executive
Director
Palitha Jayawardena Executive Director
– CFO
5. Risk Committee Quarterly Ms A K Seneviratne Independent Company Director/CRO and Senior Manager – Week before
(Chairperson) Non-Executive Secretary Finance
Director
Jayantha Independent
Wickramasinghe Non-Executive
Director
Director
6. Board Investment Quarterly R Renganathan Executive Director Company AGM – Actuarial and Senior Manager – Week before
Committee (Chairman) Secretary Portfolio
E T L Ranasinghe Executive Director
Palitha Jayawardena Executive Director
Ranga Abeynayake Executive Director
Director
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION BOARD SUBCOMMITTEES 195

Professional Terms of reference/ Objectives
advise charters
Available Available – Term The objective of the Committee is to set the principles, parameters and governance framework of the Company’s
and Reference remuneration policy and to recommend the terms and conditions of employment of the Chairman of the Board, Executive
of Remuneration Directors, members of the Executive and the Company Secretary.
Committee
Available Available – The objectives of the Committee are to assist the Board of Directors to carry out its responsibilities relating to the following
Audit Charter areas:
Committee 1. Preparation, presentation and adequacy of disclosure in the Financial Statements, in accordance with Sri Lanka
Accounting Standards comprising SLFRS and LKAS.
2. Company’s compliance with financial reporting requirements, information requirements of Companies Act, IBSL, SEC
of Sri Lanka and other regulations and requirements.
3. Processes to ensure that the Company’s internal controls and risk management procedures are adequate to meet the
requirements of the Sri Lanka Auditing Standards.
4. Assessing the Company’s ability to continue as a going concern in the foreseeable future.
5. Independence and performance of the Company’s External Auditors.
Available Available – Terms The primary function is to assist the Board with making recommendations on Board appointments and on maintaining a
of Reference of balance of skills and experience on the Board and its committees.
the Nomination
Committee
Available Available – The main objective of the Committee is to safeguard the shareholder's interests and to prevent directors, chief executives or
Mandate of RPTR substantial shareholders taking advantage of their positions.
Committee
Available Available – Risk Primary function is to oversee and approve the company-wide risk management practices to assist the Board in:
Committee zzSetting the tone and developing a culture of the Company vis-à-vis risk;
Mandate
zzOverseeing that the executive team has identified and assessed all risks that the Company faces and has established a
risk management framework, capable of addressing those risks;
zzOverseeing, in conjunction with other Board level committees, all principal risks facing the Company such as strategic,
financial, market, IT, legal, regulatory, reputational and other risks;
zzMonitoring risk management capabilities within the Company, including communication about escalating risk and crisis
preparedness and recovery plans; and
zzOverseeing the division of risk-related responsibilities to each Board Committee as clearly as possible and performing a
gap analysis to determine that the oversight of any risks is not missed.
Available Available – Board The goals and objectives of the Committee with respect to the Company's investment strategy, management, policies,
Investment guidelines and operations are:
Committee zzExercise due care to ensure that the interests and rights of policyholders are not compromised at any time;
Charter
zzEnsure full compliance with laws, rules, regulations, determinations and guidelines issued by the Insurance Regulatory
Commission of Sri Lanka and any other relevant regulatory authority, as the case may be;
zzInstitute effective and efficient governance of investment activities of the Company;
zzEnsure that the Company develops investment strategies and implements policies and procedures to execute the
strategies at the operational level;
zzEnsure that the Company develops appropriate risk management framework for identifying, monitoring and mitigating
various risks arising from investment activities and that the Company controls their investment portfolio effectively and
efficiently; and
zzEnsure that the Company establishes internal control mechanisms specifically with respect to investment activities.
196
REPORT OF THE
REMUNERATION COMMITTEE
Composition The said Terms of Reference defines zzTo ensure that no Director or Senior
the Objective, Membership, Quorum Executive or any of their associates
Remuneration Committee of Ceylinco is involved in deciding their own
and Meetings, Responsibilities of the

Life Insurance Limited (CLIL) comprises Committee Chairman and reporting remuneration.
the following Non-Executive and responsibilities of the Committee. zzTo review and disclose, as appropriate,
Non-Executive Independent Directors:
in the Directors’ Remuneration Report
Prof Mohan de Silva (Independent/ Purpose of the Committee in the Annual Report and accounts
Non-Executive Director) – Chairman whether any Executive Director or
The purpose of the Committee is to set Senior Executive has the right or
Herschel Gunawardena
the principles, parameters and governance opportunity to receive enhanced
(Non-Executive Director) – Member
framework of the Company’s remuneration benefits beyond those already disclosed
Rohan Senanayake policy and to recommend the terms and and whether the Committee has
(Non-Executive Director) – Member conditions of employment of the Chairman exercised its discretion during the
of the Board, Executive Directors, members year to enhance such benefits either
Brief profiles of the Directors are given on of the Executive and the Company generally or for any member of
pages 22 to 29 of this Annual Report. Secretary (together, the “Senior Executives” the Company.
being those whose appointment requires zzTo review and endorse the content of
Meetings, attendance Board approval; employees who perform the Directors’ Remuneration Report in
a significant influence function; employees the Annual Report and accounts for
and secretary whose activities have or could have submission to the Board as a whole.
a material impact on the Company’s risk
The Chairman of the Committee is an zzEnsure that contractual terms on
profile; and any other employee
Independent Non-Executive Director who termination and any payments made
as determined by the Committee
is free from any business or any other are fair to the individual, and the
from time to time).
relationship which may interfere with the Company, that failure is not rewarded
execution of his independent judgement. and that the duty to mitigate loss is
The overall focus and responsibilities of the
Remuneration Committee are: fully recognised.
The Committee has the authority to seek
zzTo give due consideration to laws,
external professional advice on matters zzTo determine the remuneration
policy of the Company and to make regulations and any published
within its purview.
recommendations to the Board on the guidelines or recommendations
Company’s policy and structure. regarding the remuneration of Directors
The Remuneration Committee formally met
of listed and non-listed companies
once during the year 2017. The Managing zzTo periodically review the adequacy and and formation and operation of
Director/CEO, Director/CFO attended the effectiveness of the remuneration policy. share schemes in determining
said meeting by invitation and assisted zzTo give the Board additional assurance recommendations.
in the discussions by providing relevant as it may reasonably require regarding
information, except when matters zzTo undertake on behalf of the Chairman
the Human resources policies of the or the Board such other related tasks
concerning them were discussed. Company, pertaining to the terms as the Chairman or the Board may from
and conditions of employment which time to time entrust to it.
The Company Secretary functions as are fair and will attract and retain
the Secretary to the Committee. The high calibre staff.
attendance of Committee members at Initiatives taken during
meetings is given below:
the year 2017
Board subcommittee Members No. of Attendance
meetings The Remuneration Policy of the Company
was approved by the Board of Directors
Remuneration Prof Mohan de Silva Independent – 1 1/1 upon the recommendation of the
Committee (Chairman) Non-Executive Director Committee.
Herschel Gunerwardena Non-Executive Director 1 1/1
On behalf of the Remuneration Committee,
Rohan Senanayake Non-Executive Director 1 1/1
zzTo review and approve any statement

The proceedings of the Committee required by the Company’s regulators
meetings have been regularly circulated to from the Committee on the Company’s
and confirmed by the Board of Directors. remuneration policy.
zzTo go through the proposals for
Terms of Reference of employee share plans for the Company Prof Mohan de Silva
Chairman – Remuneration Committee
the Committee and make recommendations to the
Main Board.
The Committee is governed by the “Terms and 30 March 2018
Reference for the Remuneration Committee” Colombo
approved by the Board of Directors.
REPORT OF 197
THE NOMINATION
COMMITTEE
Composition There shall be a quorum of two-thirds of is approved by the Board of Directors. It

the members of the Committee to hold a clearly states the purpose of establishing
Nomination Committee of Ceylinco meeting. The Company Secretary functions the Committee, its composition, authority,
Life Insurance Limited (CLIL) comprises as the Secretary to the Nomination duties and scheduling of the meetings.
following Executive and Non-Executive Committee. The proceedings and the
Independent Directors: minutes of the Committee meetings have The power and authority of the Committee
Dr Gamini De Silva (Independent/ been regularly circulated to and confirmed is subject to the provisions of Companies
Non-Executive Director) – Chairman by the Board of Directors. Act No. 07 of 2007 and other applicable
law, responsibilities as set forth in the
Jayantha Wickramasinghe Terms of Reference of Company’s Articles of Association, Code of
(Independent/Non-Executive Director –
the Committee Best Practices on Corporate Governance –
Member
2013 (Issued jointly by The Institute of
R Renganathan (Managing Director/ The Committee is governed by the
Chartered Accountants of Sri Lanka and
Chief Executive Officer – Member “Terms and Reference for the Nomination
the Security Exchange Commission of
Committee” approved by the Board of
Sri Lanka), applicable policies, practices,
Directors.
Brief profiles of the members of the other statutory, and regulatory obligations.
Committee are given on pages 22 to 29 of
The above defines the Objective,
the Annual Report. The Committee is authorised by the Board
Membership, Secretary, Advisors, Quorum,
to seek appropriate professional advice
Duties, Frequency of Meetings, Notice
The Chairman of the Committee is an inside and outside the Company.
of Meetings, Minutes of Meetings,
Independent Non-Executive Director who The relevant provisions are given in
Annual General Meeting and Reporting
is free from any business or any other the said Terms of Reference for
Responsibilities of the Committee.
relationship which may interfere with the Nomination Committee.
execution of his independent judgment.
Also majority of the membership of the Purpose of the Committee
Committee are Non-Executive Directors.
Initiatives taken during
Primary function of the Nomination
the year 2017
Committee is to assist the Board with
Meetings, attendance making recommendations on Board The Committee recommended the
and secretary appointments and on maintaining a re-election of Directors, taking into
balance of skills and experience on the consideration the contribution made by
The Committee assessed Board Board and its Committees. In order to fulfil them towards the overall discharge of the
composition and decided members of this, they follow the “Terms of Reference Board’s responsibilities.
the Board contain the required combine for Nomination Committee” as guidance to
knowledge and experience in order to the members of the Committee as to their The Committee continued to work closely
match the strategic demands of the duties and responsibilities. with the Board of Directors on matters
Company. assigned to the Committee and reported
The “Terms of Reference for Nomination back to the Board of Directors with its
The Nomination Committee formally met Committee” which has been prepared recommendations.
once during the year 2017. The attendance as per the rules set out in the Code of
of Committee members at meetings is Best Practices on Corporate Governance On behalf of the Nomination Committee,
given below. Director/CFO also was present
at the meetings by invitation.

meetings Dr Gamini De Silva
Nomination Dr Gamini de Silva Independent – 1 1/1 Chairman – Nomination Committee
Committee (Chairman) Non-Executive Director
30 March 2018
Jayantha Wickramasinghe Independent – 1 1/1
Colombo
Non-Executive Director
R Renganathan Executive Director – 1 1/1
MD/CEO
198
REPORT OF THE
AUDIT COMMITTEE
Composition Director/CFO, Director/Deputy CFO, in order to address new concerns and

Senior Manager – developments in the current business

The Audit Committee which was Internal Audit, Senior Manager – context. It was approved by the Board of
established on 25 April 2014, appointed by Information Systems Audit and Directors on 27 August 2015.
and responsible to the Board of Directors, Senior Manager – Finance attended
comprised the following Non-Executive these meetings on the invitation of
Purpose of the Committee
Directors: the Committee. The principal purpose of the Audit
J A Setukavalar Committee is to assist the Board of
(FCA, FCMA-UK, FCMA-SL, CGMA, FCPM) The engagement Partner and the Manager Directors in fulfilling its oversight
– Chairman – (Independent, of the Company’s External Auditors, Ernst responsibilities for the financial
Non-Executive Director) & Young attended on the invitation of the reporting process of the Company, by
Committee, after finalising the audit for the way of safeguarding the interests of all
Herschel Gunawardena period ended 31 December 2017. stakeholders including, shareholders of
(FCMA-UK, CGMA) – Member – the Company.
(Non-Executive Director) The Audit Committee’s activities were
Jayantha Wickramasinghe communicated to the Board of Directors
at the quarterly Board meetings by way of Authority and rules
(CILT) – Member (Independent,
Non-Executive Director) tabling the reports of the Audit Committee The Committee is authorised to seek any
meetings, held during the period. information as it considers necessary, from
Each of the members has the finance the Management of the Company in order
literacy whereas the Chairman is a Fellow There shall be a quorum of two-thirds of to carry out its monitoring and reviewing
member of The Institute of Chartered the members of the Committee to hold a activities on the following core areas:
Accountants of Sri Lanka and the Chartered meeting. The Company Secretary functions
zzPreparation, presentation and
Institute of Management Accountants (UK) as the Secretary to the Audit Committee.
The proceedings and the minutes of the adequacy of disclosures in the Financial
and profiles of members which consist of
Committee meetings have been regularly Statements, in accordance with
qualifications and experience are given on
circulated to and confirmed by the Board Sri Lanka Accounting Standards
pages 22 to 29 of this Annual Report.
of Directors. comprising SLFRS and LKAS.
zzThe Company’s compliance with
Meetings, attendance financial reporting requirements,
Charter of the Committee
and secretary requirements of the Companies Act, the
The Charter of the Committee which clearly IRCSL, the Inland Revenue Department
The Audit Committee formally met and other regulatory bodies.
defines the Term of Reference of the
four times during the year 2017. The
Committee was reviewed on 15 July 2015 zzProcesses to ensure that the Company’s
attendance of Committee members at
by the Audit Committee and amended internal controls and risk management
meetings is given below:
procedures are adequate to meet the
Board subcommittee Members No. of Attendance requirements of the Sri Lanka Auditing
meetings Standards.
Audit Committee J A Setukavalar (Chairman) Independent – 4 3/4 zzAssessing the Company’s ability to
Non-Executive Director continue as a going concern in the
Herschel Gunerwardena Non-Executive Director 4 4/4 foreseeable future.
zzIndependence and performance of the
Jayantha Wickramasinghe Independent – 4 4/4
Non-Executive Director Company’s External Auditors.
Compliance
The Committee reviewed the effectiveness
of the system for monitoring compliance
with the laws and regulations and the
results of Management’s investigation and
follow-up, including disciplinary action of
any instances of non-compliance.
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION REPORT OF THE AUDIT COMMITTEE 199
The Committee reviewed the quarterly The Committee had a meeting with the zzProgress the implementation of internal

regulatory Compliance Reports, submitted External Auditors to review the External audit recommendations
to it and observed that the Company’s Auditors’ proposed audit scope and zzQualityassurance and improvement
compliance framework provides reasonable timeline set out in the plan, including programmes of the Internal Audit
assurance that all relevant laws, approach and coordination of audit effort Department
regulations, code of ethics and standards of with the Internal Auditors.
conduct have been followed.
The Committee also discussed the Conclusion
Any instances of non-compliance is key audit issues and their resolution,
The Committee is satisfied that the
included in the Audit Committee’s Reports Management responses with both the
Company’s internal controls are effectively
to the Board of Directors and followed up External Auditors and the Management and
implemented as designed to assess and
to ensure that appropriate, corrective and continuously monitored the action taken
manage risks and that the Company’s
timely action is taken. by the Management to implement the
assets are adequately safeguarded.
recommendations.
The Committee is satisfied that the
Financial reporting The Committee reviewed the performance
Company’s Internal and External Auditors
have been effective and independent
The Committee reviewed and approved of the External Auditor and made the
throughout the period under review.
the Quarterly Financial Statements and recommendation on the remuneration of
Annual Financial Statements, prior to the Auditor for approval to the Board.
The Committee is also satisfied that the
its submission for Board approval and
operational controls and the application of
filing with regulators, in order to ensure
compliance with Sri Lanka Accounting
Initiatives taken appropriate Accounting Policies, provide
during the year 2017 reasonable assurance that the Financial
Standards, the Companies Act No. 07 of
Statements of the Company are true
2007 and the Regulation of Insurance The Audit Committee reviewed and and fair.
Industry Act No. 43 of 2000. Further, the approved the internal audit activity after
Committee reviewed and discussed the concerning new developments in the The Audit Committee has proposed to
audit issues communicated by the External current business context in order to set the Board of Directors that Ernst & Young,
Auditors, through their Management Letter. clear guidelines to assist the Company in Chartered Accountants, be recommended
accomplishing its objectives, by bringing for reappointment as Statutory Auditors of
The Committee reviewed the financial a systematic and disciplined approach to the Company for the financial year ending
reporting processes in order to ensure the evaluate and improve the effectiveness 31 December 2018, subject to approval
reliability of the information provided for of the Company’s governance, risk by the shareholders at the next Annual
the determination of the most appropriate management and internal controls. General Meeting.
accounting policies and the fairness of
the disclosures made in the Financial As a part of this process, the Committee On behalf of the Audit Committee,
Statements. Further, the Committee reviewed the following areas, in order
reviewed the involvement of the Internal to strengthen the internal control
and External Auditors with regard to the environment of the Company:
financial reporting process.
zzRisk management system J A Setukavalar
Chairman – Audit Committee
zzDepartmental risk registers
External audit
zzRisk-based internal audit plan 30 March 2018
The Committee reviewed the Colombo
zzInternal audit budget and resource plan
independence of the External Auditors by
obtaining Statements from the Auditors zzIndependence and objectivity of the
on relationships between the Auditors and Internal Auditors
the Company, including non-audit services zzResponsibilities of the Internal Auditors
and discussing the relationships with zzReporting and monitoring process
the Auditors.
zzSignificant
audit findings and
management responses
200
REPORT OF THE
RELATED PARTY TRANSACTIONS

REVIEW COMMITTEE
As a voluntarily adoption of the Code Meetings, attendance
of Best Practices on related party

transactions, issued by the Securities
and secretary
Exchange Commission of Sri Lanka, The Related Party Transaction Review
the Related Party Transaction Review Committee formally met four times during
Committee (RPTRC) was established by the the year 2017. The Director/CFO and
approval of the Board of Directors of CLIL Director/Deputy CFO and Senior Manager
to ensure compliance of the said code and Finance attended the said meetings by
good governance. invitation and assisted in the discussions
by providing relevant information. The
attendance of Committee members at
Composition meetings is given below:
The Board appointed RPTRC of CLIL
comprises the following Executive and
meetings
Non-Executive Directors:
Related Party Herschel Gunerwardena Non-Executive Director 4 4/4
Herschel Gunawardena Transaction Review (Chairman)
(Non-Executive Director) – Chairman Committee Rohan Senanayake Non-Executive Director 4 4/4
Rohan Senanayake
Palitha Jayawardena Executive Director – CFO 4 4/4
(Non-Executive Director) – Member
Palitha Jayawardena
(CFO – Executive Director) – Member The proceedings of the Committee
meetings have been regularly circulated to
and confirmed by the Board of Directors.
The Company Secretary acts as the
The main purpose of the Committee is
Secretary to the Committee.
to review the proposed related party
transactions other than what is exempted
from the code, in advance to safeguard Initiatives taken during
the shareholders’ interests by preventing
Directors, Chief Executives or substantial
the year
shareholders taking advantage of During the year under review, the Board
their positions. of Directors approved a procedure of
reporting the RPTs in the Company upon
recommended by the Committee. Also
Terms of Reference of the Committee continued to consistently
the Committee update the list of related parties and to
monitor the related party transactions of
The Committee is governed by the
the Company which comes within the
“Mandate of the Related Party Transaction
purview of the Committee.
Review Committee” and the said mandate
defines the General Purpose and Authority,
On behalf of the RPTR Committee,
Membership, Process and Operations,
Report to the Board and Stakeholders,
Specific responsibilities, Independent
Consultants, and Reporting and Review.
D H J Gunawardena
Chairman – RPTR Committee
30 March 2018
Colombo
INVESTMENT 201
COMMITTEE REPORT
The long-term Insurance Fund of Ceylinco On the Economic front, however, 2017 Oil prices moved higher in the second half

Life is overseen by the Board Investment ended on a high note, with Gross of the year, ending at a two-year high
Committee to ensure it provides a secure Domestic Product (GDP) continuing to close to USD 70 a barrel. This upward
and a steady return for its policyholders. accelerate in most parts of the world in momentum was largely due to the success
the broadest cyclical upswing since the of the output limitation agreements arrived
As an adaptation of the Guidelines on start of the decade. at by the OPEC-led coalition of oil producing
Investment for Insurance Companies issued nations that included Russia, with the
by Insurance Regulatory Commission of 2017 started off with uncertainty on intention of ending the supply glut that has
Sri Lanka (IRCSL), the Board Investment what a Trump Presidency in the US would kept prices low. Geopolitical tensions in the
Committee was established by the mean for the global economy. 45th Middle East also helped to push the prices
approval of the Board of Directors of President of the United States, Donald higher. However, gains were capped by
Ceylinco Life to ensure compliance of Trump’s unpredictable foreign policy and concerns that the US and other Non-OPEC
the said code and good governance. “America First” policies did have their nations will increase their output amidst
The Committee is acting in a fiduciary impacts – from heightened tensions with the higher prices.
capacity with respect to the Fund, and North Korea to the isolation of Qatar by
is accountable to the Board of Directors its Gulf neighbours.
of Ceylinco Life. The Board Investment 1.1 Looking ahead to
Committee formulates investment On the other end, elections in Europe 2018 and beyond
Investment strategies and overviews attracted much attention due to the
the performance of the investments “Don’t let a good recovery go to waste.” –
upsurge in populist politics. Elections in
on a quarterly basis. In order to make Says International Monetary Fund (IMF).
Netherlands, France and Germany ended
timely decisions to execute strategies fears of further gains for populism following
implemented, Board Investment While the end of accommodative monetary
the Brexit and Trump victories, allowing
Committee has delegated its authority policy has raised concerns about how
markets to focus more clearly on changes
by appointing an Operational Investment investor behaviour will change over the
happening in global monetary policy.
Committee who meets on a weekly basis. coming years, forward guidance provided
by the major central banks have prevented
The major central banks, led by the US
In order to ensure a return that is secure, markets from returning to a 2013 “taper
Federal Reserve, carried out measures
smooth and steady, investments are made tantrum” like scenario. 2018 is likely to see
intended to winding up unconventional
prudently according to diverse investment markets watching central banks for signals
accommodative monetary policies brought
objectives and varied risk preferences. By on where monetary policy is headed, with
about following the 2008 financial crisis.
crafting investment strategies that add the US Fed projected to carry out three
As expected by the markets, US Fed hiked
value, continually monitoring the execution more rate hikes during the year.
rates thrice in the year and announced the
of the set strategies to ensure conformity, shrinking of its balance sheet, while the
and making timely calls deemed necessary As Janet Yellen concludes as the 15th Chair
European Central Bank (ECB) stated that it
to ensure probity, the Committee ensures of US Federal Reserve, the current gradual
would halve its quantity of monthly bond
that the funds are well positioned, ideally rate hike policy, which was carried out by
purchases beginning in 2018 and signalled
invested and coherently managed to meet her administration is expected to continue
the possibility of ending this practice of
the objectives of various stakeholders such thanks to President Trump’s nomination
quantitative easing from September 2018.
as policyholders, shareholders and regulators. of Jerome Powell to be its next Chair from
February 2018. However, with US economic
Despite the outlook for tighter monetary
As at 31 December 2017, the long-term growth being buoyant, despite stubbornly
policy, financial markets continued to ease
Insurance Fund of Ceylinco Life kept low inflation, alongside the impact of the
in 2017 helped by the weakening of the US
growing as a formidable force and stood tax reforms finalised in December, there is
Dollar and rallies in global stock markets.
firm for its policyholders, at Rs. 81.7 Bn. a concern that the Fed might have to hike
Emerging Markets (EM) benefited from the
rates at a faster pace than projected.
continued search for yields by investors,
YEAR IN REVIEW with the Institute for International Finance
IMF, in their World Economic Outlook, has
(IIF) reporting that the year saw USD 235
called the current economic upsurge the
1. Global Markets Bn. in portfolio inflows into Emerging
broadest since 2010 and has upgraded the
Market equities and debt – the highest
It was a tumultuous year marked by many global growth forecasts for 2017, 2018
since 2014.
natural disasters, geopolitical tensions, and
deep political divisions in many countries.
202 Investment Committee Report PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
and 2019. Global growth for 2017 has been upgraded to 3.7%, driven by upsides in Asia, Europe and the US. However, it was highlighted
that there is little space for complacency since most of the growth was simply cyclical and further reforms are needed to sustain it into the
2020s and beyond, while higher inflation and interest rates also could puncture the buoyant mood in the years ahead.
Key global indicators – History and beyond 2017

GDP growth and forecasts
GDP Growth – Advanced Economies (%)
3.5
2.8
2.1
1.4
0.7
0
2015 2016 2017* 2018* 2019* 2020* 2021* 2022*
United States of America Australia United Kingdom Germany Japan
* Projected
Source: World Economic Outlook 2017
On the Advanced Economies, we see a clear demarcation from Japan to the rest of the countries. As expected by most economists, US to
overcome all economies and head the way for its peers.
GDP Growth – Developing Economies (%)
9.0
7.8
6.6
5.4
4.2
3.0
2015 2016 2017* 2018* 2019* 2020* 2021* 2022*
India China Bangladesh Vietnam Philippines Sri Lanka Pakistan
*Projected
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Investment Committee Report 203
India to dominate the Developing Nations from 2017 and beyond with their monetary and fiscal policies placed firmly with the new

administration of Prime Minister Narendra Modi. Though Sri Lanka is lagging behind with several turbulences and uncertainties, it is
expected to see a steady growth from 2018 onwards.
Oil Oil Oil – Brent Oil analyst forecasts

In the short term, analysts forecasts Brent Oil to hover around USD 60-70 per barrel. This will highly depend on the output limitation by
OPEC, whether US would re-establish the Iranian sanctions and US Brent Oil productions output.
Oil – Brent Oil Analyst Forecasts (USD/Barrel)
70
66
62
58
54
50
Q1 Q2 Q3 Q4 2019* 2020* 2021* 2022*
2018 2018 2018 2018
Barclays Citi Credit Suisse Deutsche Bank JP Morgan Thomson Reuters Mean
*Projected
US Economy – Reviving with interest rates edging higher
Average US Interest Rates for (%)

Projected Median of (%)
Past 03 Years US Fed Fund Rates
2.5 3.5
2.0 2.8
1.5 2.1
1.0 1.4
0.5 0.7
0 0
2015 2016 2017 2017 2018 2019 2020
10 Year T Bond US Fed Fund Rates

Source: US Fed Monetary Update 2017
5 Year T Bond
Source: US Fed Monetary Update 2017

Best way to see the future – Stock Indexes – MSCI Market Indexes
Morgan Stanley Capital International, better known as MSCI Inc, compiles influential indices tracked by global investment managers.
The following graph depicts the performance of MSCI World Index over the last three (3) years.
MSCI World Index
MSCI World Market (stock) Index

2,200
2,000
1,800
1,600
1,400
1,200
01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01
Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Dec.
2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2017
Source: Bloomberg
The MSCI World Index measures the market performance of 4,500 large and mid-cap companies that have a global presence. It is often
quoted by financial media to describe how the world's stock market is doing. It includes the following 23 countries: Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal,
Singapore, Spain, Sweden, Switzerland, United Kingdom and the United States.
MSCI Emerging Markets Index
MSCI Emerging Market (Stock) Index

1,300
1,160
1,020
880
740
600
01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01
2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2017
Source: Bloomberg
The MSCI Emerging Markets Index tracks the performance of stock markets in the following 24 developing countries: Brazil, Chile, China,
Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar,
Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates. The Index is considered a good measurement of the stock
performance of emerging markets. It represents 13% of the world's total market capitalisation. It is estimated that USD 1.7 Tn. is invested in
all emerging market funds.
MSCI Frontier Markets to Index

MSCI Frontier Market (stock) Index
3,250
3,000
2,750
2,500
2,250
2,000
01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01
2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2017
Source: Bloomberg
The MSCI Frontier Market Index was 2. Sri Lankan Economy The overall growth was mainly driven by the
created in 2007 and tracks the stock robust growth seen in the construction and
markets of countries which are even more The year 2017, saw a number of key mining sectors as well as increased activity
volatile than emerging markets. The 21 developments taking place in the domestic in Financial Services, Telecommunication and
countries in the Index are: Argentina, economy with cautious monetary policy, Wholesale and Retail trade.
Bahrain, Bangladesh, Croatia, Estonia, an exchange rate which is increasingly
Jordan, Kazakhstan, Kenya, Kuwait, determined by the market and a focus
Real GDP Growth – Sri Lanka (%)
Lebanon, Lithuania, Mauritius, Morocco, on reforms being the theme of the
year. However, the country continued 5.0
Nigeria, Oman, Romania, Serbia, Slovenia,
Sri Lanka, Tunisia, and Vietnam. to be challenged by events such as the
unfavourable changes in the global political 4.0
When you consider all three market landscape and harsh weather conditions –
indexes, we can clearly see a huge growth droughts, floods and tropical storms –
3.0
in 2017. In addition, to further expand having widespread effects on the domestic
on this growth, MSCI plans to add 222 economy as a whole.
Chinese A-shares to its Emerging Markets 2.0
Index. The full inclusion of domestic Real GDP Growth

Chinese stocks in the widely tracked MSCI The persistent cycle of droughts, floods and 1.0
Emerging Markets Index could pull more tropical storms, experienced since 2016,
than USD 400 Bn. of funds from asset resulted in continuous poor performance
managers, pension funds and insurers into 0
in the agriculture sector. During the first
2013 2014 2015 2016 2017
mainland China’s equity markets over the three quarters of the year, the economic
next decade, according to analysts. growth moderated to 3.7% from the 4.0%
Source: Central Bank of Sri Lanka (CBSL)
YoY growth seen during the corresponding
A greater inflow of funds into Chinese period in 2016 – weighed down by the
equities is expected in the long run from poor performance in the agriculture sector,
actively-managed funds. What’s more which recorded consistent contractions of
important, the inclusion is a milestone in around 3% YoY in each quarter. However, the
the opening up of the mainland Chinese services and industrial sectors continued to
equity market to the world, bolstering the record healthy growth, rising by 4.2% and
country’s credibility as the world’s second- 4.5% YoY respectively during the period.
largest economy and allow China to take a
bigger role on the international stage.
GDP (Quarterly) – Sri Lanka (%)
40.0 12.0
30.0 9.0
20.0 6.0
10.0 3.0
0 0
-10.0 -3.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
’13 ’13 ’13 ’13 ’14 ’14 ’14 ’14 ’15 ’15 ’15 ’15 ’16 ’16 ’16 ’16 ’17 ’17 ’17
Services (LHS) Industry (LHS) Agriculture,Forestry and Fishing (LHS) Gross Domestic Product (RHS)
Source: CBSL
Private Sector Credit Growth

Even after two rounds of rate hikes in 2016, credit to the private sector continued to grow strong, rising at a pace of around 20% YoY in
the first four months of 2017. Accordingly, the CBSL opted for a third round of policy rate hike , amounting to 25 basis points in March.
Consequently, credit growth saw signs of moderation from May onwards, reducing to 14.6% YoY by end-December. In absolute terms,
however, credit growth remained strong, with a monthly average of Rs. 51.5 Bn. during the year.
Private Sector Credit Growth

(Rs. Bn.) (%)
175 30
140 24
105 18
70 12
35 6
0 0
Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov.
2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017
Credit to the Private Sector Annual Change
Source: CBSL
Inflation
In January 2017, the Department of Census and Statistics (DCS) rebased the Colombo Consumer Price Index (CCPI) from 2006/07 to 2013;
with the weightage of F&B (Food & Beverages) inflation being reduced to 28% (previously 41%), while the weightage for Non-Food
category being increased to 72%. The Utilities category now holds the largest weightage in the overall index.
Under the new base, overall YoY headline inflation recorded a considerable acceleration, remaining at around 6-8% levels during most of

the year. The impacts of both the tax revisions reintroduced in late 2016 and the adverse weather conditions disrupting food supplies in the
domestic market were the main contributors to this increased pace in prices.
By end-December, Food inflation recorded a 14.4% YoY growth, while Non-Food inflation slowed down to 4.2% YoY. In contrast, core
inflation observed an overall declining trend through most of the year. moderating to 4.3% YoY in December from a high of 7.3% YoY
reached in March. Since the underlying inflationary trends in the economy seem to moderate towards the end of the year, Central Bank
expressed less concern regarding the high levels in headline inflation, attributing the rising trend mainly to supply side shocks.
CCPI Base (%)
10
0
2017 2017 2017 2017 2017 2015 2017 2016 2017 2017 2017 2017
Core Inflation YOY Headline Inflation YOY
Source: CBSL
External Sector Performance

The external sector trade deficit widened by 7.4% at the end of 2017 on a YoY basis, driven by the improvement in export earnings by
18.7% YoY witnessed compared to 12.8% YoY expanding in import expenditure. The recovery in exports is mainly attributable to improved
global market conditions amidst domestic supply constraints. Tea exports recorded a strong growth during the year due to higher prices in
the international market, while increased access to the EU market following the lifting of the seafood exports ban and regaining of the GSP+
concession led to the substantial rises in Seafood and Garment exports.
Meanwhile, import expenditure also accelerated during the year, led by increased fuel imports for coal and thermal power generation under
the adverse weather conditions, while higher rice imports to meet domestic market shortages also contributed significantly. Nevertheless,
import of vehicles recorded a contraction due to the measures taken to curtail demands, and the growth in imports of investment goods
remained subdued.
Trade Deficit (YoY) (%)
45
30
15
-15
-30
2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017
Source: CBSL
Higher inflows from investments

Tourism
We also witnessed a higher capital
(Nos.) (USD Mn.)
inflows, reversing the continuous outflows
250,000 500
experienced in the past into both Colombo
Stock Exchange and Government Securities 200,000 400
market reflecting improved investor
sentiment. 150,000 300
100,000 200
Capital Inflows to CSE (Rs. Bn.)
50,000 100
20
0 0
15
2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017
10 Tourist Arrivals (Nos.) Tourist Earnings (USD Mn.)
5
Source: CBSL
0 Tourism
(USD Mn.) (%)
-5 4,000 75
2015 2016 2017
3,200 60
Source: CBSL
2,400 45
Capital Inflows to (Rs. Bn.)
Government Securities 1,600 30
150
800 15
75
0 0
2010 2011 2012 2013 2014 2015 2016 2017
0
Tourist Earnings (USD Mn.) Growth (%)
-75
Source: CBSL
-150
Adding fuel to the fire, workers’ remittances reported a (-1.07%) contraction YoY, which
-225 is largely attributed to the unexpected geopolitical tensions that arose in the Middle East,
2015 2016 2017 aggravated by the Qatar crisis.
Source: CBSL Worker Remittances

Tourism and Worker Remittances (USD Mn.) (%)
7,500 28
However, Tourism earnings and Workers’
Remittances saw a below par performance
6,000 21
in 2017, providing minimal cushion to
the current account deficit unlike before. 4,500 14
Although, the slowdown of tourist arrivals
during the first few months of the year 3,000 7
was attributed to the renovations of the

1,500 0
Bandaranaike International Airport, adverse
climate conditions coupled with the spread 0 -7
of Dengue epidemic saw tourist earnings 2010 2011 2012 2013 2014 2015 2016 2017
reducing further and the year ended with
Total (USD Mn.) Growth (%)
mere growth of 11.60%.
Source: CBSL
Exchange Rate Movement

The LKR saw some depreciatory pressure during the first half of 2017, owing to net foreign outflows from domestic Government Securities
market and high debt repayments. However, along with the return of foreign inflows and fall in debt repayments, the pressures eased off
towards the latter part of the year, enabling Central Bank of Sri Lanka (CBSL) to maintain a more flexible exchange rate regime as advocated
by the IMF. As at 31 December, the rupee recorded a 1.83% depreciation Year-to-Date (YTD) against the USD. As the sterling pound gained
ground, putting behind it the Brexit uncertainty, the LKR weakened considerably against the sterling pound, depreciating 10.5% during the
same period.
Rs./USD Exchange Rate Movement

(%) (Rs./USD)
20 300
10 150
0 0
-10 -150
-20 -300
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Depreciation (%) Exchange Rate (Rs./USD)
Source: CBSL
Gross Official Reserves – Silver Lining

Gross official reserves strengthened during the year from a low of USD 5.4 Bn. in January to USD 7.9 Bn. by the end of the year, supported
by the issuance of a USD 1.5 Bn. dual-tranche sovereign bond and inflows from the IMF’s Extended Fund Facility (EFF) agreement. Foreign
Direct Investments (FDI) also contributed with a sizable improvement in the first three quarters of 2017, reaching USD 766 Mn., compared
to the USD 397 Mn. in the same period in 2016.
Gross Official Reserves (USD Bn.)
4
2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2017
Source: CBSL
2.1 2018 and beyond the demand for insurance, which will increase revenues while extending much needed
protection for policyholders.

Dr Indrajit Coomaraswamy, will be the
most highlighted personality on the
Sri Lankan Economy who will be put to task
3. Ceylinco Life Insurance Limited – Another Name
in the coming year, which promises to be a for Stability
testing year, as it has to maintain a flexible
exchange rate policy while maintaining a i. Life Fund – Breaking Records Each Year
growth biased accommodative monetary The long-term Insurance Fund of Ceylinco Life, which is considered as a safe haven for
policy. investors, has surged over the 80 Bn. mark, which depicts the superior performance and
stability of its investments, and the continuous trust and loyalty placed by the policyholders.
Moving forward, the Budget for 2018 is
expected to bring in a number of policies Life Fund Growth (Rs. Bn.)
geared towards reforms, liberalisations
100
and tax simplification. The budget met a
number of guidelines set by the IMF as
prerequisites for the third review of the EFF 80
programme. The fourth tranche of about
USD251.4 Mn. was approved as scheduled; llion
60 8 0 Bi
putting the country back on track with the sing
Su rpas
program following the previous delays on
disbursements. Many experts, including 40
ratings agencies such as Fitch and Moody’s,
commended the Government’s efforts
20
to keep in line with the IMF program
milestones, but highlighted the need for
further fiscal consolidation. Further, it was 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
noted that the country remains vulnerable
to changes in the political and economic
environment, both domestic and global,
which could alter this stable course. ii. Quality of Investments – In order to emphasise the prudence and
diligence of Life Fund investments, the
Why we strive forward below chart elaborates the asset allocation
With the introduction of the New Inland
The Investment Division of Ceylinco Life, of investments of the long-term Insurance
Revenue Act along with the tax reforms
with the recommendations and guidance Fund as at 31 December 2017.
such as increase in value added tax rate
of the Operational Investment Committee
from 11% to 15% and new taxes on
along with the oversight and supervision Asset Allocation
capital gains and property, abolishment
of Board Investment Committee, manages
of notional tax credit and tax exemption
the long-term Insurance Fund, which is
on corporate debentures are few revenue 7% 3%
regarded as one of the largest and thriving
reforms expected to boost Government 12%
portfolios in Sri Lanka.
revenue.
Risk and Return, although carrying an
If Sri Lanka’s Government begins to 52%
inherent trade-off, are two aspects which
deliver on reforms, being in line with
hold paramount importance in crafting an 26%
IMF proposals, which will create a more
investment strategy. Ceylinco Life takes
conducive macroeconomic environment,
utmost accountability in providing the
there will be phenomenal progress
best investment solutions to maintain an Government Securities Corporate Debt
towards a Sri Lankan economic resurgence.
optimum and cautious balance between Term Deposits Real Estate
the two aspects. Others

On the insurance aspect, this would create
a favourable climate for long-term insurers
and policyholders which would drive-up
iii. Investment Income – Making History off 7. D M G L Alwis (Senior Manager –

Portfolio) – Member
Amidst challenging and volatile market conditions, for the first time in the company’s
8. C S Kumarasinghe (Assistant
history, Investment Income surpassed the legendary figure of 10 Bn. mark in 2018.
Manager) – Member
9. K V Wickramasuriya (Assistant
Investment and Other Income (Rs. Bn.)
Manager) – Member
12.5
The Committee members contribute

10.0 immensely and add value to the
investment decision making process
n
illio through their vast knowledge and diverse
7.5 10 B
sing experience. In addition, the Committee
Su rpas obtains external professional advice on
5.0 matters within its purview.
2.5 Meeting and Attendance

The Board Investment Committee of
0 Ceylinco Life met twice during the year to
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
review the investment performance and
set medium term investment strategies.
Board Investment Committee
The Operational Investment Committee
As an adaptation of the Guidelines on Investment for Insurance Companies issued by met fifty (50) times during the year,
Insurance Regulatory Commission of Sri Lanka (IRCSL), the Board Investment Committee recognising the prominence of the
was established by the approval of the Board of Directors of Ceylinco Life to ensure investment decision making function, to
compliance of the said code and good governance. The Board has appointed a five-member proactively monitor the implementation of
committee, out of whom four are executive directors and a Non-Executive Director who is a investment strategies, and to timely face
veteran in financial markets as the Board Investment Committee. the challenges posed from ever-changing
global and domestic macroeconomic
The following members served in the Board Investment Committee during the year: landscapes.
1. R Renganathan (Managing Director/CEO) – Chairman
2. E T L Ranasinghe (Director/Deputy CEO) – Member Managing Director/CEO of Ceylinco Life
3. P A Jayawardena (Director/CFO) – Member chairs the meeting and Management
4. S R Abeynayake (Director/Deputy CFO) – Member representatives from the areas such
as Actuarial, Finance, Life Operation,
5. R S W Senanayake (Non-Executive Director) – Member
Marketing and Systems attend the
meetings on the invitation of the
Operational Investment Committee Committee.
In order to make timely decisions to execute investment strategies formulated, Board

Investment Committee has delegated its authority by appointing an Operational Investment
Committee which meets on a weekly basis.
The following members served in the Operational Investment Committee during the year:
R Renganathan
1. R Renganathan (Managing Director/CEO) – Chairman Chairman – Operational Investment
2. E T L Ranasinghe (Director/Deputy CEO) – Member Committee
3. P A Jayawardena (Director/CFO) – Member Chairman – Board Investment Committee
4. S R Abeynayake (Director/Deputy CFO) – Member
5. R S W Senanayake (Non-Executive Director) – Member 30 March 2018
6. S Kumarapperuma (DGM – Actuarial) – Member
212
BOARD INVESTMENT
COMMITTEE REPORT
As a voluntarily adoption of the “Guidelines Meetings, attendance

on Investment for Insurance Companies”

issued by IRCSL, the Investment Committee
and secretary
was established by the approval of the The Investment Committee formally
Board of Directors of CLIL to ensure met four times during the year 2017.
compliance of the said code and good The AGM-Actuarial and Senior Manager
governance. – Portfolio attended the said meetings
by invitation and assisted in the discussions
by providing relevant information.
Composition The attendance of Committee members at
The Board-appointed Investment meetings is given below:
Committee of CLIL comprises the following
Executive and Non-Executive Directors:
meetings
R Renganathan Board R Renganathan Executive Director 2 2/2

(Managing Director/CEO) – Chairman Investment
E T L Ranasinghe Executive Director 2 2/2
E T L Ranasinghe Committee
(Deputy CEO) – Member Palitha Jayawardena Executive Director 2 2/2
Palitha Jayawardena Ranga Abeynayake Executive Director 2 2/2

(CFO – Executive Director) – Member
Rohan Senanayake Non-Executive Director 2 2/2
Ranga Abeynayake
(Deputy CFO – Executive Director) –
Member The proceedings of the Committee
Rohan Senanayake meetings have been regularly circulated to
(Director – Non-Executive Director) – and confirmed by the Board of Directors.
Member The Company Secretary acts as the
Secretary to the Committee.
The main purpose of the Committee is to Initiatives taken
ensure that funds under management are
invested in a sound and prudent manner.
during the year
The Committee is accountable for setting During the year under review, the Board of
out the policies that need to be observed Directors formally approved the updated
in governance of investment management, Investment Policy Statement of the
management of investment portfolios and Company upon recommendation of the
associated risks. Committee. Also the Terms of Reference for
the Board Investment Committee Charter
was recommended to the Board by the
Charter of the Committee Committee and got the approval.
The Committee is governed by the
“The Investment Committee Charter” On behalf of the Board Investment
and the charter defines the purpose, Committee,
membership, secretary, meeting,
duties and responsibilities, authority to
engage advisers and evaluation of the
Committee’s performance.
R Renganathan
Chairman – Board Investment Committee
30 March 2018
STATEMENT OF 213
DIRECTORS' RESPONSIBILITY TO
FINANCIAL REPORTING
The Directors are responsible under the Further, the Directors confirm that with every opportunity to take whatever

Companies Act No. 07 of 2007, to ensure the Financial Statements have been steps and undertake whatever inspections
compliance of the requirements set out prepared on a going concern basis and that may be considered being appropriate
therein to prepare Financial Statements are of the view that sufficient funds and to enable them to give their audit opinion.
for each financial year, giving a true and other resources are available within the The said Messrs Ernst & Young were
fair view of the state of affairs of the Company to continue its operations and to reappointed at the last Annual General
Company as at the balance sheet date facilitate planned future expansions and Meeting held on 30 March 2017.
and the profit of the Company for the capital commitments.
financial period. Further, the Board of The Directors confirm that to the best
Directors ensures the compliance of all They are also responsible for taking of their knowledge and belief that all
regulatory requirements imposed by the reasonable measures to safeguard statutory payments in relation to regulatory
said act and other applicable statutory and the assets of the Company and in that and statutory authorities that were due, in
regulatory provisions. context, to have a proper regard to the respect of the Company as at the balance
establishment of appropriate systems of sheet date have been duly paid or where
The Board of Directors accepts the internal control, with a view to preventing relevant, provided for.
responsibility for the integrity and and detecting fraud and other irregularities.
objectivity of the Financial Statements Accordingly, the Directors have taken steps The Directors are of the view that they
prepared and presented. The Directors to establish appropriate systems of internal have duly discharged their responsibilities
confirm that in preparing the Financial controls comprising of internal audit, as set out in this Statement.
Statements, appropriate accounting checks, risk assessment tests and financial
policies have been selected and applied and other controls to mitigate, prevent and By Order of the Board,
in a consistent manner and material detect fraud and other irregularities.
departures, if any have been disclosed
and explained. The Directors provided the Statement of
Solvency to the Auditors, in respect of
Also, reasonable and prudent judgements dividend payable (proposed) conforming
and estimates have been used so that the to the Section 57 of the Companies A C H Waidyasekara
form and substance of transactions are Act No. 07 of 2007. Company Secretary
appropriately reflected. Ceylinco Life Insurance Limited
The Board of Directors also wishes to
The Directors are responsible for ensuring confirm that, as required by the Sections 30 March 2018
that the Company keeps sufficient 166 (1) and 167 (1) of the Companies Act; Colombo
accounting records to disclose with they have prepared this Annual Report in
reasonable accuracy, the financial position time and ensured that a copy thereof is
of the Company and for ensuring that sent to Ceylinco Insurance PLC, the sole
the Financial Statements have been shareholder of the Company.
prepared and presented in accordance with
the Sri Lanka Accounting Standards and The Directors are required to prepare the
provide the information required by the Financial Statements and to provide its
Companies Act No. 07 of 2007. External Auditors; Messrs Ernst & Young,
214
CHIEF FINANCIAL PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
OFFICER’S STATEMENT
Chief Financial Officer’s All accounting controls are continually

updated to ensure prudence and

Statement of Responsibility completeness, prevention and detection of
fraud and other irregularities. This ensures
The Financial Statements are prepared in accounting records are free from error and
compliance with the Sri Lanka Accounting omission. The internal control system in
Standards (SLFRS/LKAS) issued by The place functions properly and it is regularly
Institute of Chartered Accountants of evaluated. All procedure manuals are
Sri Lanka (ICASL), the Companies Act updated continuously and are accessible to
No. 07 of 2007 and the Regulation of all the staff.
Insurance Industry Act No. 43 of 2000
as amended, Sri Lanka Accounting and The Internal Auditors of the Company
Auditing Standards Act No. 15 of 1995, have conducted periodic audits to provide
Code of Best Practice on Corporate reasonable assurance that the established
Governance issued jointly by CA Sri Lanka policies and procedures of the Company
and Securities Exchange Commission have been consistently followed. However,
of Sri Lanka (SEC) Directions issued there are inherent limitations that should
thereunder relating to Financial Statement be recognised in weighing the assurances
formats and disclosure of information. provided by any system of internal controls
and accounting.
The Accounting Policies used in preparation
of the Consolidated Financial Statements The Financial Statements of the Company
are appropriate and consistently applied, for the financial year end of 31 December
except unless otherwise stated in the 2017 were audited by Messrs E & Y and
Notes accompanying the Financial the Financial Statements of the subsidiary
Statements. There are no deviations from companies were audited by the appointed
the prescribed Accounting Standards in Auditors.
their adoption.
The Audit Committee of the Company
Comparative information has been meets once in a quarter with the Internal
reclassified wherever necessary to comply Auditors and the Independent Auditors
with the current presentation. Significant when necessary to review the manner
accounting policies and estimates that in which these Auditors perform their
involved a high degree of judgement and responsibilities and to discuss major
complexity were discussed with the Audit variations or observations, internal control
Committee. and financial reporting issues. To ensure
complete independence, the Independent
The Board of Directors of the Company Auditor and the Internal Auditors have full
is responsible for preparation and and free access to the members of the
presentation of these Financial Statements Audit Committee to discuss any matters
which give a true and fair view of the of substance.
financial performance and the position
of the Company. The estimates and
judgements relating to the Financial
Statements were made on a prudent and
reasonable basis.
P A Jayawardena
Director/Chief Financial Officer
To ensure this, the Company has taken
proper and adequate care in implementing
30 March 2018
a system of internal control and accounting
records, which are reviewed, evaluated
and updated on an ongoing basis.
THE BOARD’S 215
STATEMENT ON
INTERNAL CONTROL
Requirement Internal control processes The annual audit plan is drawn up by the

Internal Audit Department and Information
As per the requirement of the Risk Management System Audit Department and is reviewed
Section D 1.3 of the Code of Best Practice
on Corporate Governance – 2013, jointly
Committee and approved by the Audit Committee.
issued by the Securities and Exchange The Board Risk Committee is responsible
Commission of Sri Lanka and The Institute for assisting the Board in all matters Audit Committee
of Chartered Accountants of Sri Lanka, the relating to the overall management of
The Audit Committee conducts quarterly
Board of Directors presents this Report on principal areas of risk to the Company. The
reviews to address significant findings
internal control mechanisms of Ceylinco Board Risk Committee implements the risk
with respect to non-compliances or
Life Insurance Limited (“the Company”). management framework via executive risk
ineffectiveness of internal controls that
committees. Monthly meetings are held
are identified by the Internal Audit
during which key risk areas are discussed
Responsibility and required action initiated, All areas
Department and Information Systems Audit
Department.
The Board of Directors is responsible for that come under discussion are escalated
the Company’s system of internal controls to Board level. A detailed account of the
The Audit Committee is also responsible for
and reviewing its design and effectiveness activities carried out by the Board and
taking action to deal with significant issues
in order to safeguard shareholders’ Executive Risk Committees is available in
and control weaknesses highlighted by
investment and the Company’s assets. the Risk Management section from pages
External Auditors.
158 to 163 of this Report.
This system is designed to manage
The Audit Committee reviews the quality
the Company’s key areas of risk within
an acceptable risk profile, rather than Internal Audit Departments assurance and improvement programmes
of the Internal Audit Departments and the
eliminating the risk of failure to achieve The Internal Audit Department and performance of External Auditors, in order
the business objectives and policies of Information System Audit Department to evaluate the adequacy and effectiveness
the Company. Accordingly, a reasonable are responsible for reviewing the design of the Company’s risk management and
but not absolute assurance can be and effectiveness of the internal control internal control system.
provided, against material misstatement of systems, management information
management and financial information and systems, as well as the systems for The minutes of the Audit Committee
records or against financial losses or fraud. compliance with applicable laws, meetings, and recommendations
regulations, rules and directives. with regard to the requirements for
The Company has established key
improvements, are tabled for the
processes that aid in ensuring the Audits are carried out on all the branches information of the Board on a periodic
integrity and efficacy of the system of and departments. The frequency of these basis. Further details of the activities
internal controls that has been adopted audits is determined using a risk-based undertaken by the Audit Committee of the
with respect to financial reporting. These methodology which factors in the input of Company are available in the report of the
processes are overseen by Committees senior management. An independent and audit committee on pages 198 to 199.
which assist the Board in matters relating objective report is mandatory.
to the Company’s operations, and ensure
that approved corporate objectives, Some reviews are outsourced to external
strategies and policies are adhered to. parties with specialist knowledge in the
relevant area. These external audits are
carried out depending on the nature and
complexity of the area requiring review.
216 The Board’s Statement on Internal Control PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Confirmation
Backed by the Internal Audit Department’s

continued review and verification of
the suitability and effectiveness of
pre-existing procedures and controls,
the Board of Directors confirms that
the financial reporting system of the
Company has been designed to provide
a reasonable assurance regarding the
reliability of financial reporting; and that
the preparation of Financial Statements
for various stakeholders has been done
in accordance with Sri Lanka Accounting
Standards, and comply with regulatory
requirements including the Companies Act
No. 07 of 2007 and the Insurance Industry
Act No. 43 of 2000.
By Order of the Board,
J A Setukavalar
Chairman – Audit Committee
P A Jayawardena
R Renganathan
Managing Director/Chief Executive Officer
Colombo
30 March 2018
FINANCIAL

REPORTS
Financial Calendar 217
Understanding Our Financials 218

Actuarial Report 221
Independent Auditors’ Report 222
Statement of Financial Position 223
Statement of Comprehensive
Income 224
Statement of Changes In Equity 226
Statement of Cash Flows 227
Insurance Revenue Account 229
Notes to The Consolidated
Financial Statements 230
FINANCIAL CALENDAR
2018 2017
Annual Report 30 March 23 February

Annual General Meeting 30 March (By resolution) 30 March
Interim Dividend Paid – In the Second half of 2017
Final Dividend Proposed 30 March 30 March
218
UNDERSTANDING
OUR FINANCIALS
The Statement of Income of a life insurance company contains the income and expenses pertaining to the underwriting of life insurance. Thus,
the Statement of Income of a life insurer contains income and expense items that do not appear in a Statement of Income of a manufacturing
and trading business. Similarly, the Statement of Financial Position of a life insurer also contains some industry-specific assets and liabilities.
This brief note is aimed at helping the reader to understand our financials and is to be read along with the explanatory Notes to
the Financial Statements and the glossary.
Income statement
For the Year Ended 31 December 2017 Comment Rs. ’000
Gross Written Premiums The main source of income of a life insurer is the premium paid by customers
for the risks transferred to the life insurer through the insurance contract.
GWP is comparable to the “turnover” of a manufacturing and trading company. 15,765,484
Premiums Ceded to Reinsurers Reinsurance is the process by which part of the risks undertaken by the life
insurer is transferred to a reinsurer, for which reinsurance premium paid by
the insurer to the reinsurer. (422,217)
Net Written Premiums Net earned premium is the premium earned by the insurer for the financial year. 15,343,267
Fees and Commission Income Fees and commission income includes the charges and policy fees paid by
customers, as well as commission received from the reinsurer. 127,129
Investment Income Investment income contains the interest income, dividend income and rental
income on investments made by the Company, after deducting the related
investment expenses. 9,866,801
Realised Gains Realised gains and losses include gains and losses arising on sale of financial assets. 39,421
Fair Value Gains and Losses Fair value gains and losses are gains and losses that arise from changes in fair
values of financial assets which one held for trading. 215,095
Other Operating Revenue Other income comprises fees charged for policy administration services, disposal
gains and losses on property, plant and equipment, gains and losses on foreign
currency translations, and miscellaneous income. 32,101
Other Revenue 10,280,547
Net Income 25,623,814
Gross Benefits and Claims Paid Gross benefits and claims paid refer to the total amount of claims and
claim-related expenses incurred during the year. (6,884,013)
Claims Ceded to Reinsurers Claims ceded to reinsurers contain the proportion of claims paid, which
was recovered from reinsurers. 197,033
Gross Change in Contract Liabilities Gross change in contract liabilities is the net transfer to the Life Fund
during the period. (7,258,502)
Change in Contract Liabilities Due to Transfer Include amount which was transferred to sharehodlders’ Fund as one-off
of One-Off Surplus surplus attributable to other than participation business. 3,456,184
Net Benefits and Claims (10,489,299)
Acquisition Cost Acquisition cost refers to the commission expenses incurred for the financial
year. Life insurance business is predominantly transacted through independent
contractual agents who are paid commission based on premium they collected. (1,782,479)
Other Operating and Other operating and administrative expenses include administration, staff,
Administrative Expenses sales and marketing expenses related to the Company. (3,532,496)
Finance Cost Finance cost includes charges on the financial services provided by
financial institutions, particularly bank charges. (12,005)
Total Other Expenses (5,326,981)
Profit Before Tax 9,807,535
Income Tax Expense Income tax expense comprises the current and deferred tax. Current tax is the
expected tax payable on the taxable income for the year and any adjustment
to tax payable in respect of previous year. (340,109)
Profit for the Year 9,467,426
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION UNDERSTANDING OUR FINANCIALS 219
Statement of Financial Position

As at 31 December 2017 Comment Rs. ’000
Assets
Intangible Assets 56,950
Property, Plant and Equipment 7,371,482
Investment Properties 2,160,914
Investment in Subsidiaries 1,036,000
Investment in Associates 437,994
Financial Instruments Financial instruments represent the financial investments made by
the Company, with the aim of earning investment income to increase
profitability of the Company. 88,629,157
Employee Gratuity Benefit Asset 1,149,672
Employee Pension Benefit Asset 1,048,119
Reinsurance Receivables Reinsurance receivables represent the amounts receivable by the Company
for the claims made the policyholders. 115,010
Income Tax Receivables 787,539
Deferred Tax Assets 181,589
Loans to Life Policyholders Loans to life policyholders include the loans granted by the Company to
policyholders. Eligible policyholders can obtain loans up to a predetermined
percentage of the surrender value of their policy. 1,630,346
Premium Receivables Premium receivables represent the gross written premium accrued up
to the reporting date. 247,393
Other Assets 359,035
Cash and Cash Equivalents 883,303
Total Assets 106,094,505
Equity and Liabilities

Equity
Stated Capital 500,001
Retained Earnings 9,278,621
Revaluation Reserves 100,501
AFS Reserve (60)
Restricted Regulatory Reserve Include a surplus generated from other than participation business. 3,456,184
Special Reserve Represents the value (Net book value) of net assets transferred from
Ceylinco Insurance PLC on 1 June 2015 as a result of the segregation. 7,311,651
Total Equity 20,646,898
220 UNDERSTANDING OUR FINANCIALS PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
As at 31 December 2017 Comment Rs. ’000
Liabilities
Insurance Contract Liabilities – Life Due to the long-term nature of life insurance business, life insurers are
required to maintain a separate fund to meet future policyholder obligations.
This fund is known as “Insurance Contract Liabilities – Life”, or more commonly
as “Life Fund”. An actuarial valuation is performed at each year end to
determine the size of the fund necessary in comparison to the assets
maintained out of the fund. Any excess of assets over the policy liabilities of
the fund, known as the “Life Surplus”, is transferred to the shareholders’ funds
of the Company. 81,723,759
Insurance Contract Liabilities – These items represent the balances of the other separately identifiable funds,
Unit Linked in addition to the Life Fund, maintained by the Company. 315,943
Insurance Contract Liabilities –
Family Takaful 16,970
Individual Investment Fund ISF 94,233
Reinsurance Payables Reinsurance payables contain amounts outstanding to be paid to reinsurers
by the Company as at the reporting date. 165,715
Trade and Other Payables 2,781,246
Bank Overdraft 349,745
Total Liabilities 85,447,611
Total Equity and Liabilities 106,094,505
ACTUARIAL REPORT 221

30 March 2018
To the Directors of Ceylinco Life Insurance Limited
Actuarial Valuation as at 31 December 2017

I have carried out an actuarial valuation of the Life Fund of Ceylinco Life Insurance Limited (“the Company”) as at 31 December 2017.
I hereby certify that:
1. I have satisfied myself about the accuracy of the valuation data furnished to me by making a number of reasonableness checks;
2. Adequate and proper reserves have been provided as at 31 December 2017 for all known liabilities in respect of the long term
business of the Life Fund, taking into account all bonus declared as at that date in accordance with the requirements of Solvency
Margin (Risk Based Capital) Rules 2015 dated 15 December 2015; and
3. Based on information on assets extracted from the audited accounts of the Company for the year ended 31 December 2017, the
Company has adequate financial resources to cover its capital requirements in accordance with the Solvency Margin (Risk Based
Capital) Rules 2015 dated 15 December 2015.
Yours faithfully
Mark Birch, FIA

Head of Core Actuarial Solutions
Insurance Consulting & Technology, Asia Pacific
63 Chulia Street
#09-01 OCBC Centre East
Singapore 049514
T +65 6880 5688

D +65 6880 5688
F +65 6880 5699
W willistowerswatson.com
Willis Towers Watson Consulting (Singapore) Pte Ltd (198600361K)

222
INDEPENDENT
AUDITORS’ REPORT
Ernst & Young Tel : +94 11 2463500

Chartered Accountants
Fax Gen : +94 11 2697369

201 De Saram Place Tax : +94 11 5578180
P.O. Box 101 eysl@lk.ey.com
Colombo 10 ey.com
Sri Lanka
INDEPENDENT AUDITORS’ REPORT reasonable assurance about whether the As required by Section 163(2) of the
TO THE SHAREHOLDERS OF CEYLINCO LIFE financial statements are free from material Companies Act No. 07 of 2007, we state
INSURANCE LIMITED misstatements. the following:
Report on the An audit involves performing procedures a) The basis of opinion, scope and
Financial Statements to obtain audit evidence about the limitations of the audit are as stated
amounts and disclosures in the financial above.
We have audited the accompanying
statements. The procedures selected b) In our opinion :
financial statements of Ceylinco Life
depend on the auditor’s judgement,
Insurance Limited, (“the Company”), and – we have obtained all the
including the assessment of the risks of
the consolidated financial statements of information and explanations
material misstatement of the financial
the Company and its subsidiaries (“Group”), that were required for the audit
statements, whether due to fraud or error.
which comprise the statement of financial and, as far as appears from our
In making those risk assessments, the
position as at 31 December 2017, and examination, proper accounting
auditor considers internal control relevant
the statement of comprehensive income, records have been kept by the
to the entity’s preparation of the financial
statement of changes in equity and, cash Company,
statements that give a true and fair view
flows statement for the year then ended, – the financial statements of the
in order to design audit procedures that are
and a summary of significant accounting Company give a true and faire view
appropriate in the circumstances, but not
policies and other explanatory information. of the financial position as at 31
for the purpose of expressing an opinion
(set out in Pages 223 to 308) December 2017 and of its financial
on the effectiveness of the entity’s internal
control. An audit also includes evaluating performance and cash flows for the
the appropriateness of accounting policies year then ended in accordance with
Board’s Responsibility for Sri Lanka Accounting Standards, and
used and the reasonableness of accounting
the Financial Statements estimates made by the Board, as well as – the financial statements of the
The Board of Directors (“Board”) evaluating the overall presentation of the Company and Group, comply with
is responsible for the preparation of these financial statements. the requirements of Sections 151
financial statements that give a true and and 153 of the Companies Act No.
fair view in accordance with Sri Lanka We believe that the audit evidence we 07 of 2007.
Accounting Standards, and for such internal have obtained is sufficient and appropriate
controls as Board determines is necessary to provide a basis for our audit opinion. As required by the Section 47(2) of the
to enable the preparation of financial regulation of Insurance Industry Act. No.43
statements that are free from material of 2000, we state that, the accounting
misstatement, whether due to fraud Opinion records of the Company have been
or error. In our opinion, the consolidated financial maintained in the manner required by the
statements give a true and fair view of rules issued by the Insurance Regulatory
the financial position of the Group as at Commission of Sri Lanka, so as to clearly
Auditor’s Responsibility 31 December 2017, and of its financial indicate the true and fair view of the
performance and cash flows for the year financial position of the Company.
Our responsibility is to express an opinion
on these financial statements based then ended in accordance with Sri Lanka
on our audit. We conducted our audit Accounting Standards.
in accordance with Sri Lanka Auditing
Standards. Those standards require that Report on Other Legal and Regulatory
we comply with ethical requirements Requirements
30 March 2018
and plan and perform the audit to obtain Colombo
STATEMENT OF 223
FINANCIAL POSITION
GROUP COMPANY
As at 31 December Page Note 2017 2016 2017 2016
No. Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Assets

Intangible Assets 235 6 57,337 3,250 56,950 2,759
Property, Plant and Equipment 237 7 8,929,678 8,313,787 7,371,482 7,068,635
Investment Properties 244 8 1,026,000 1,032,000 2,160,914 1,796,000
Investment in Subsidiaries 247 9 – – 1,036,000 1,021,000
Investment in Associate 249 10 2,077,665 1,745,146 437,994 437,994
Financial Instruments
Held-to-Maturity Financial Assets 251 11. (a) 65,272,728 66,581,929 65,272,728 66,581,929
Loans and Receivables 251 11. (b) 17,973,682 13,664,301 17,199,112 12,998,491
Available-for-Sale Financial Assets 251 11. (c) 3,851,240 1,219,654 3,807,709 1,219,654
Financial Assets at Fair Value Through Profit or Loss 251 11. (d) 2,349,607 165,562 2,349,607 165,562
Employee Gratuity Benefit Asset 262 12 1,149,672 697,338 1,149,672 697,338
Employee Pension Benefit Asset 262 13 1,048,119 891,933 1,048,119 891,933
Reinsurance Receivables 266 14 115,010 41,298 115,010 41,298
Income Tax Receivables 268 15. (a) 789,139 1,044,662 787,539 1,042,571
Deferred Tax Assets 269 15. (d) 181,589 – 181,589 –
Loans to Life Policyholders 270 16 1,630,346 1,378,954 1,630,346 1,378,954
Premium Receivables 247,395 214,604 247,393 214,604
Other Assets 271 17 396,326 343,380 359,035 315,112
Cash and Cash Equivalents 271 18 894,540 600,104 883,303 584,256
Total Assets 107,990,074 97,937,903 106,094,505 96,458,089
Equity and Liabilities
Equity Attributable to Equity Holders of Parent
Stated Capital 272 19. (a) 500,001 500,001 500,001 500,001
Retained Earnings 272 19. (b) 10,628,715 5,165,535 9,278,621 4,003,754
AFS Reserves 272 19. (b) 46,196 24,212 (60) (60)
Revaluation Reserves 272 19. (b) 318,887 290,772 100,501 96,484
Restricted Regulatory Reserves 273 19. (d) 3,456,184 – 3,456,184 –
Special Reserves 272 19. (c) 7,311,651 7,311,651 7,311,651 7,311,651
Total Ordinary Shareholders’ Equity 22,261,634 13,292,171 20,646,898 11,911,830
Non-Controlling Interests 6,013 6,464 – –
Total Equity 22,267,646 13,298,635 20,646,898 11,911,830
Liabilities
Insurance Contract Liabilities – Life 274 20 81,726,139 77,927,494 81,723,759 77,925,114
Insurance Contract Liabilities – Unit Linked 274 20 315,943 265,685 315,943 265,685
Insurance Contract Liabilities – Family Takaful 274 20 16,970 10,563 16,970 10,563
Individual Investment Fund – ISF 274 20 94,233 56,881 94,233 56,881
Employee Gratuity Benefit Liability 262 12 11,683 12,750 – –
Other Financial Liabilities 279 21. (a) – 2,980,013 – 2,980,013
Deferred Tax Liabilities 269 15. (c) 176,807 261,847 – 227,716
Reinsurance Payables 280 22 165,715 25,837 165,715 25,837
Trade and Other Payables 280 23 2,849,523 1,853,052 2,781,246 1,824,372
Interest-Bearing Borrowings 279 21. (b) – 1,000,000 – 1,000,000
Bank Overdraft 271 18 365,414 245,142 349,745 230,080
Total Liabilities 85,722,427 84,639,264 85,447,611 84,546,260
Total Equity and Liabilities 107,990,074 97,937,903 106,094,505 96,458,089
Certification
The above Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements on pages 230 to 308 which form an integral part of the
Financial Statements.
These Financial Statements have been prepared in compliance with the requirements of the Companies Act No. 07 of 2007.
P A Jayawardena
The Board of Directors is responsible for these Financial Statements.

Approved and signed on behalf of the Board by,

R Renganathan E T L Ranasinghe
Managing Director/Chief Executive Officer Director/Deputy Chief Executive Officer
30 March 2018
224
STATEMENT OF
COMPREHENSIVE INCOME
GROUP COMPANY
For the Year Ended 31 December Page Note 2017 2016 Change 2017 2016 Change
No. Rs. ’000 Rs. ’000 % Rs. ’000 Rs. ’000 %
Net Income 25,979,885 23,604,912 10.06 25,623,814 23,434,460 9.34

Gross Written Premiums 281 24. (a) 15,765,392 15,027,469 4.91 15,765,484 15,027,600 4.91
Premiums Ceded to Reinsurers 281 24. (b) (422,217) (373,829) 12.94 (422,217) (373,829) 12.94
Net Written Premiums 15,343,175 14,653,641 4.71 15,343,267 14,653,771 4.71
Revenue from Subsidiaries 282 24. (e) 328,917 332,235 (1.00) – – –
15,672,093 14,985,876 4.58 15,343,267 14,653,771 4.71
Fees and Commission Income 282 25 127,129 120,399 5.59 127,129 120,399 5.59
Investment Income 282 26 9,894,635 8,195,998 20.73 9,866,801 8,180,786 20.61
Realised Gains 283 27 39,421 (829) 4,855.17 39,421 (5,283) 846.18
Fair Value Gains and Losses 284 28 215,095 287,643 (25.22) 215,095 470,023 (54.24)
Other Operating Revenue 31,513 15,825 99.13 32,101 14,763 117.44
Other Revenue 10,307,793 8,619,036 19.59 10,280,547 8,780,689 17.08
Gross Benefits and Claims Paid 284 29. (a) (6,883,413) (6,800,076) 1.23 (6,884,013) (6,800,076) 1.23
Claims Ceded to Reinsurers 284 29. (b) 197,033 148,394 32.78 197,033 148,394 32.78
Gross Change in Contract Liabilities 284 29. (c) (7,258,502) (8,397,889) (13.57) (7,258,502) (8,397,889) (13.57)
Change in Contract Liabilities Due to
Transfer of One-Off Surplus 284 29. (d) 3,456,184 – – 3,456,184 – –
Net Benefits and Claims (10,488,698) (15,049,571) (30.31) (10,489,299) (15,049,571) (30.30)
Direct Costs of Subsidiaries (181,627) (142,333) 27.61 – – –

Acquisition Cost 285 30 (1,782,479) (1,686,858) 5.67 (1,782,479) (1,693,985) 5.22
Other Operating and Administrative Expenses 286 31 (3,706,968) (3,063,490) 20.52 (3,532,496) (2,937,262) 20.26
Finance Cost 286 32 (13,244) (9,934) 33.31 (12,005) (9,915) 21.08
Total Benefits, Claims and
Other Expenses (16,173,017) (19,952,187) (18.94) (15,816,279) (19,690,733) (19.68)
Profit Before Share of Associates 9,806,868 3,652,725 168.48 9,807,535 3,743,727 161.97
Share of Profit of Associate 250 10. (b) 346,032 319,658 8.25 – – –
Profit Before Tax 10,152,900 3,972,384 155.59 9,807,535 3,743,727 161.97
Tax Expense 288 33. (c) (495,892) (680,635) (27.14) (340,109) (664,686) (48.83)
Profit for the Year 9,657,009 3,291,748 193.37 9,467,426 3,079,042 207.48
Profit Attributable to:
Equity Holders of the Parent 9,656,646 3,291,610 193.37 9,467,426 3,079,042 207.48
Non-Controlling Interests 290 34. (b) 363 138 163.04 – –
9,657,009 3,291,748 193.37 9,467,426 3,079,042 207.48

Basic Earnings Per Share (Including
One-Off Surplus Transfer) 290 35 (a) 193.13 65.83 193.37 189.35 61.58 207.48
Basic Earnings Per Share (Excluding
One-Off Surplus Transfer) 291 35 (b) 124.01 65.83 88.37 120.22 61.58 95.23
Dividend Per Share 291 36 9.00 7.50 20.00 9.00 7.50 20.00
The above Statement of Comprehensive Income is to be read in conjunction with the Notes to the Financial Statements on pages 230 to
308 which form an integral part of the Financial Statements.
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION statement of comprehensive income 225
GROUP COMPANY

For the Year Ended 31 December Page Note 2017 2016 2017 2016
No. Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Profit for the Year 9,657,009 3,291,748 9,467,426 3,079,042

Other Comprehensive Income
Items that will not be Reclassified Subsequently
to Income Statement
Revaluation Surplus/(Deficit) During the Year – 1,887,085 – 1,704,705
Actuarial Gain on Defined Benefit Plans 292 37 (206,728) (221,053) (206,728) (221,053)
Share of Other Comprehensive Income of Equity
Accounted Investees 16,252 14,222 – –
Items that may be Reclassified Subsequently

to Income Statement
Share of Other Comprehensive Income of Equity
Accounted Investees 21,983 17,474 – –
Net Gain/(Loss) on Available-for-Sale Assets 292 37 (20,685) 27,001 (20,685) 27,001
Income Tax Relating to Components of

Other Comprehensive Income 292 37 27,257 (24,919) 27,257 (24,919)
Other Comprehensive Income for the Year,
Net of Tax (161,920) 1,699,810 (200,156) 1,485,733
Total Comprehensive Income for the Year,

Net of Tax 9,495,088 4,991,558 9,267,270 4,564,776
Total Comprehensive Income Attributable to:

Equity Holders of the Parent 9,494,725 4,991,420 9,267,270 4,564,776
Non-Controlling Interests 363 138 – –
9,495,088 4,991,558 9,267,270 4,564,776
The above Statement of Comprehensive Income is to be read in conjunction with the notes to the Financial Statements on pages 230 to
308 which form an integral part of the Financial Statements.
226
STATEMENT OF
CHANGES IN EQUITY
Attributable to Equity Holders of the Parent

Group Note Stated Special Restricted Revaluation Retained Available- Total Ordinary Non- Total
Capital Reserve Regulatory Reserves Earnings for-Sale Share-holders’ Controlling Equity
Reserve Reserve Equity Interests
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Balance as at 1 January 2016 500,001 7,311,651 – – 2,683,456 (92,663) 10,402,445 6,326 10,408,771
Net Profit for the Year – – – – 3,291,610 – 3,291,610 138 3,291,748
Other Comprehensive Income for
the Year – – – 1,880,345 (225,906) 45,371 1,699,810 – 1,699,810
Total Comprehensive Income
for the Year – – – 1,880,345 3,065,704 45,371 4,991,420 138 4,991,558
Final Dividend Paid – 2015 36 – – – – (312,500) – (312,500) – (312,500)
Interim Dividend Paid – 2016 36 – – – – (271,125) – (271,125) – (271,125)
Transferred to Long-term
Insurance Fund – – – (1,589,573) – 71,504 (1,518,069) – (1,518,069)
Balance as at 31 December 2016 500,001 7,311,651 – 290,772 5,165,535 24,212 13,292,171 6,464 13,298,635
Net Profit for the Year – – 3,456,184 – 6,200,461 – 9,656,645 363 9,657,008
for the Year – – – 28,115 (208,345) 18,310 (161,921) – (161,921)
Total Comprehensive Income
for the Year – – 3,456,184 28,115 5,992,116 18,310 9,494,725 363 9,495,088
Final Dividend Paid – 2016 36 – – – – (103,875) – (103,875) – (103,875)
Interim Dividend Paid – 2017 36 – – – – (425,061) – (425,061) (814) (425,875)
Transferred to Long-term
Insurance Fund – – – – – 3,674 3,674 – 3,674
Balance as at 31 December 2017 500,001 7,311,651 3,456,184 318,887 10,628,715 46,196 22,261,634 6,013 22,267,646
Company Note Stated Special Restricted Revaluation Retained Available- Total Ordinary Total
Capital Reserve Regulatory Reserves Earnings for-Sale Share-holders’ Equity
Reserve Reserve Equity
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Balance as at 1 January 2016 500,001 7,311,651 – – 1,733,281 (98,563) 9,446,370 9,446,370

Net Profit for the Year – – – – 3,079,042 – 3,079,042 3,079,042
Other Comprehensive Income for the Year – – – 1,683,677 (224,944) 27,001 1,485,734 1,485,734
Total Comprehensive Income for the Year – – – 1,683,677 2,854,098 27,001 4,564,776 4,564,776
Final Dividend Paid – 2015 36 – – – – (312,500) – (312,500) (312,500)
Interim Dividend Paid – 2016 36 – – – – (271,125) – (271,125) (271,125)
Transferred to Long-term Insurance Fund – – – (1,587,193) – 71,502 (1,515,691) (1,515,691)
Balance as at 31st December 2016 500,001 7,311,651 – 96,484 4,003,754 (60) 11,911,830 11,911,830
Net Profit for the Year – – 3,456,184 – 6,011,241 – 9,467,426 9,467,426
Other Comprehensive Income for the Year – – – 4,017 (200,499) (3,674) (200,156) (200,156)
Total Comprehensive Income for the Year – – 3,456,184 4,017 5,810,742 (3,674) 9,267,270 9,267,270
Final Dividend Paid – 2016 36 – – – – (103,875) – (103,875) (103,875)
Interim Dividend Paid – 2017 36 – – – – (432,000) – (432,000) (432,000)
Transferred to Long-Term Insurance Fund – – – – – 3,674 3,674 3,674
Balance as at 31 December 2017 500,001 7,311,651 3,456,184 100,501 9,278,621 (60) 20,646,898 20,646,898
The above Statement of Cash Flow is to be read in conjunction with the Notes to the Financial Statements on pages 230 to 308 which form
an integral part of the Financial Statements.
STATEMENT OF 227
CASH FLOWS

GROUP COMPANY
For the Year Ended 31 December Note 2017 2016 2017 2016
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Cash Flows from Operating Activities

Premiums/Revenue Received from Customers 15,817,109 15,038,006 15,817,201 15,038,136
Reinsurance Premiums (Net of Commission) Paid (282,338) (406,145) (282,338) (406,145)
Commission Paid (1,759,704) (1,855,514) (1,760,304) (1,862,641)
Claims and Benefits Paid (6,613,051) (6,529,593) (6,613,051) (6,529,593)
Reinsurance Receipts in Respect of Claims and Benefits 4,598 90,071 4,598 90,071
Interest and Dividends Received 10,664,230 7,296,843 10,598,198 7,282,047
Other Operating Cash Payments (3,176,422) (2,739,305) (3,249,950) (2,671,123)
Other Income 75,727 198,060 65,990 49,800
Contributions to Gratuity Fund/Gratuity Payments (162,129) (151,158) (158,794) (151,158)
Income Taxes Paid (8,075) (2,091) – –
Interest Paid (39,977) (9,919) (12,005) (9,915)
Net Cash Flows from Operating Activities Note A 14,519,968 10,929,255 14,409,545 10,829,478
Cash Flows from Investing Activities

Investments in/Proceeds from Subsidiaries/Associates – – – (572,441)
Proceeds from Sale of Investment Property 7,425 – 7,425 –
Acquisition of Financial Investments (377,482,324) (340,354,067) (376,305,598) (335,311,989)
Proceeds from Financial Investments 368,502,930 326,618,872 367,460,490 322,238,586
Acquisition of Property, Plant and Equipment 7 (916,780) (289,528) (885,631) (281,328)
Proceeds from Disposal of Property, Plant and Equipment 29,194 181,054 29,194 177,454
Acquisition of Intangible Assets 6 (57,038) (3,103) (57,038) (3,103)
REPO Borrowings (Net) (2,923,131) 2,680,202 (2,980,013) 2,680,203
Net Cash Flows from Investing Activities (12,839,724) (11,166,570) (12,731,171) (11,072,618)
Cash Flows from Financing Activities

Proceeds from Short-Term Borrowing (999,335) 1,000,000 (1,000,000) 1,000,000
Dividends Paid to Equity holders (506,745) (557,380) (498,992) (557,380)
Net Cash Flows from Financing Activities (1,506,079) 442,620 (1,498,992) 442,620
Increase/(Decrease) in Cash and Cash Equivalents Note B 174,164 205,304 179,382 199,480
228 statement of cash flows PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
GROUP COMPANY
For the Year Ended 31 December Note 2017 2016 2017 2016
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Note A
Reconciliation of Profit Before Tax with
Net Cash Flows from Operating Activities
Profit Before Tax 9,806,868 3,972,384 9,807,535 3,743,727
Adjustments for:
Depreciation 7 275,010 269,947 196,765 201,669
Provision for Gratuity and Pension (41,847) 153,550 (45,741) 151,158
Amortisation of Intangible Assets 6 2,951 1,093 2,847 989
Change in Trade and Other Receivables (213,329) (1,832,641) (204,767) (1,627,307)
Change in Reinsurance Receivables (73,712) 4,709 (73,712) 4,709
Increase in Life Insurance Funds 29 (c) 7,258,502 8,397,889 7,258,502 8,397,889
Increase in Unit-Linked Fund 50,258 25,031 50,258 25,031
Increase in Takaful Fund 6,406 5,855 6,406 5,855
Increase in Individual Investment Fund (IFS) 37,353 34,181 37,353 34,181
Change in Contract Liabilities due to Transfer of
One-Off Surplus 19 (d) (3,456,184) – (3,456,184) –
Change in Trade and Other Payables 1,357,990 528,973 1,227,510 517,033
Realised Gain (17,859) (7,875) (23,341) (4,275)
Fair Value Gain Recorded in Income Statement (300,610) (470,023) (215,095) (470,023)
Income Tax Paid (8,075) (2,659) – –
Payment to Gratuity and Pension Funds (163,755) (151,158) (158,794) (151,158)
Net Cash Flows from Operating Activities 14,519,968 10,929,255 14,409,545 10,829,478
Note B
Cash and Cash Equivalents at 1 January 354,962 149,657 354,176 154,696
Cash and Cash Equivalents at 31 December Note C 529,126 354,962 533,558 354,176
Increase/(Decrease) in Cash and Cash Equivalents 174,164 205,304 179,382 199,480
Note C
Cash at Bank and in Hand 18 894,540 600,104 883,303 584,256
Bank Overdraft 18 (365,414) (245,142) (349,745) (230,080)
18 529,126 354,962 533,558 354,176
The above Statement of Cash Flow is to be read in conjunction with the Notes to the Financial Statements on pages 230 to 308 which form
an integral part of the Financial Statements.
INSURANCE REVENUE 229
ACCOUNT

COMPANY
For the Year Ended 31 December Glossary Item 2017 2016 Change
Rs. '000 Rs. '000 %
Gross Written Premium 15 15,765,484 15,027,600 4.91

Net Written Premium (Net of Premium Ceded to Reinsurers) 27 15,343,267 14,653,771 4.71
Investment and Other Income Attributable to Policyholders 9,459,168 7,975,299 18.61
Net Benefits and Claims Paid (6,686,980) (6,651,682) 0.53
Increase in Long-Term Insurance Fund (7,258,502) (8,397,889) (13.57)
Acquisition Cost 1 (1,782,479) (1,693,985) 5.22
Operating and Administrative Expenses Attributable to Policyholders (4,194,810) (2,969,190) 41.28
Interest Expense (10,531) (8,984) 17.22
Tax Expenses (369,131) (607,340) (39.22)
Surplus from Life Insurance Business 20 4,500,000 2,300,000 95.7
Change in Contract Liabilities Due to Transfer of One-Off Surplus 3,456,184 – –

Surplus from Life Insurance Business 4,500,000 2,300,000 95.65
Investment and Other Income Not Attributable to Policyholders 821,379 805,390 1.99
Operating and Administrative Expenses Not Attributable to Policyholders 662,315 31,929 1,974.34
Interest Expense Not Attributable to Policyholders (1,474) (932) 58.17
Tax Expenses Not Attributable to Policyholders 29,022 (57,346) (150.61)
Profits from Operations After Interest Expense 9,467,426 3,079,041 207.48
230
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
1. Corporate Information No adjustments have been made for 2.2. Basis of Measurement
inflationary factors affecting the Financial

Entity information Statements. The Financial Statements, except for
information on cash flows, have been
1.1. Reporting Entity prepared on accrual basis under the
Ceylinco Life Insurance Limited (the

1.4. Responsibility for Financial historical cost convention except for the
Statements following:
Company) is a public limited liability
company incorporated and domiciled in The Board of Directors is responsible for Item Basis of Measurement
Sri Lanka. The registered office of the the Financial Statements of the Group/
Company is located at No. 106, Havelock Company as per the provisions of the Land and buildings Initially at
Road, Colombo 05. Additional corporate Companies Act No. 07 of 2007 and the cost and
information is given on the inner back cover. Sri Lanka Accounting Standards. The subsequently at
responsibility of the Directors in relation to revalued amount
the Financial Statements is set out in detail Investment property Fair value
1.2. Nature of Operations and Principal in the Statement of Directors’ Responsibility Financial assets at fair Fair value
Activities to Financial Reporting is on page 213. value through profit or
Descriptions of the nature of operations loss and available-for-
and principal activities of the Company, sale financial assets
its Subsidiaries and Associate are given
1.5. Approval of Financial Statements Policyholder liabilities Valued
on page 38. There were no significant The Consolidated Financial Statements actuarially
changes in the nature of the principal of Ceylinco Life Insurance Limited and its Net defined benefit Valued
activities of the Company and the Group Subsidiaries (collectively, the Group) for assets or liabilities actuarially and
during the financial year under review. the year ended 31 December 2017 were recognised at
authorised for issue by the Directors on present value
The parent of Ceylinco Life Insurance 30 March 2018.
Limited is Ceylinco Insurance PLC, which is
incorporated and domiciled in Sri Lanka. 2.3. Functional and Presentation
2. Basis of Accounting
Currency
Financial Statements 2.1. Statement of Compliance Items included in the Financial Statements of
the Group are measured using the currency
1.3. Consolidated Financial Statements The Consolidated Financial Statements
of the primary economic environment in
have been prepared in accordance with
The Consolidated Financial Statements of which the Company operates (the Functional
the Sri Lanka Accounting and Auditing
Ceylinco Life Insurance Limited, as at and Currency). These Financial Statements are
Standards Act. No. 15 of 1995, which
for the year ended 31 December 2017 presented in Sri Lankan rupees, the Company’s
requires compliance with Sri Lanka
encompass the Company, its Subsidiaries Functional and Presentation Currency. There
Accounting Standards (hereinafter
(together referred to as the “Group”) and was no change in the Company’s Presentation
referred to as SLFRS/LKAS) promulgated
the Group’s interest in Associates. All and Functional Currency during the year under
by The Institute of Chartered Accountants
companies in the Group are limited liability review. All amounts presented in rupees have
of Sri Lanka (CA Sri Lanka), and with the
companies incorporated and domiciled in been rounded to the nearest rupees thousand
requirements of the Companies Act. No. 07
Sri Lanka. (Rs. ’000), except when otherwise indicated.
of 2007 and the requirements of the
Regulation of Insurance Industry
The assets and liabilities presented in
the Statement of Financial Position are
Act. No. 43 of 2000 as amended. 2.4. Materiality and Aggregation
grouped by nature and listed in an order Each item which is similar in nature is
that reflects their relative liquidity and presented separately if material. Items of
maturity pattern. dissimilar nature or function are presented
separately unless they are immaterial
as permitted LKAS 1 – “Presentation of
Financial Statements”.
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 231
2.5. Going Concern (a) Insurance Receivables any future periods affected. Information

Insurance receivables are recognised when about significant areas of estimation under
The Board of Directors have made an uncertainty and critical judgements in
assessment of the Group’s ability to due and measured on initial recognition
at the fair value of the consideration applying accounting policies that have the
continue as a going concern and are most significant effect on the amounts
satisfied about the ability to continue receivable. The carrying value of insurance
receivables is reviewed for impairment recognised in the Financial Statements is
in business for the foreseeable future. included in the following Notes:
Furthermore, the Board of Directors is whenever events or circumstances indicate
not aware of any material uncertainties that the carrying amount may not be
Critical Accounting Judgements, Disclosure
that may cast significant doubt upon recoverable, with the impairment loss Estimates and Assumptions Reference
the Group’s ability to continue as a recorded in the Income Statement.

Note Page
going concern. Therefore, the Financial
Statements continue to be prepared on a Insurance receivables are derecognised Insurance Provision – Life 20 274
going concern basis. when the derecognition criteria for
Valuation of Investment 8. (a) 245
financial assets have been satisfied.
Property
Deferred Tax – 33. (e) 289
2.6. Comparative Information (b) Cash Flow Statement Utilisation of Tax Losses
The presentation and classification of The Statements of Cash Flows has been Measurement of Defined 12-13 262
assets and liabilities in the Financial prepared using the “Direct Method”. Interest Benefit Obligation
statements of the previous year have paid is classified as an operating cash flow.
been amended, where relevant for better Dividend and interest income are classified
presentation and to be comparable as operating cash flows. Dividends paid are
with those of the current year and classified as financing cash flows. For cash
reclassifications are presented in note 44 flow purposes, cash and cash equivalents
on page 307. are presented net of bank overdrafts.
3. Summary of Significant 4. Use of Judgements, Estimates and

Accounting Policies Assumptions
Policies disclosed within The preparation of Financial Statements
in conformity with Sri Lanka Accounting
individual notes
Standards (SLFRS and LKAS) requires
A summary of significant accounting management to make judgements,
policies have been disclosed along with estimates and assumptions that affect
the relevant individual notes to the the application of accounting policies and
Financial Statements. The accounting the reported amounts of assets, liabilities,
policies presented within each note have income and expenses. Actual results may
been applied consistently by the Group. differ from these estimates.
Estimates and underlying assumptions are

Policies not covered with based on historical experience and various
individual notes other factors that are believed to be
reasonable under the circumstances, the
Following accounting policies which have
results of which form the basis for making
been applied consistently by the Group,
the judgements about the carrying amount
are considered to be significant but are not
of assets and liabilities that are not readily
covered with individual notes.
apparent from other sources. Estimates and
underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting
estimates are recognised in the period in
which the estimates are revised and in
232 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
5. Segment Information
Accounting policy
A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment), or
in providing products or services within a particular economic environment (geographical segment), which is subject to risks and returns that are
different from those of other segments. The Group’s primary format for segment reporting is based on business segments. The business segments
are determined based on the Group’s Management and internal reporting structure.
Inter-segment pricing is determined on an arm’s length basis.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
The activities of the Group are located mainly in Sri Lanka. Consequently, the economic environment in which the Group operates is not subject to
risks and rewards that are significantly different on a geographical basis. Hence, disclosure by geographical region is not provided.
For Management purposes, the Group is organised into business units based on their products and services and has following reportable operating
segments as follows:
(i) The Company offers a wide range of whole life, endowment, anticipated endowment, term insurance, mortgage protection, retirement and
Group insurance products.
(ii) Healthcare segment includes Healthcare Centre for Cancer Screening, Radiation Treatment Unit and Diabetes Centre.
(iii) Other segment includes Investment Management Services.
Transaction between operating segments are set on an arm’s length basis in a manner similar to transactions with third parties. Segment income,
expenses and results will include those transfers between business segments which will then be eliminated on consolidation.
5. (a) Segment Income Statement for the Year Ended 31 December 2017
Life Insurance Healthcare Other Adjustments and Total
Segment Segment Operations Eliminations
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Gross Premiums 15,765,484 – – (91) 15,765,392

Premiums Ceded to Reinsurers (422,217) – – – (422,217)
Net Premiums 15,343,267 – – (91) 15,343,176
Income from Subsidiaries – 341,195 161 (12,440) 328,917
Fees and Commission Income 127,129 – – – 127,129
Investment Income 9,866,801 57,884 31,353 (61,403) 9,894,635
Realised Gains 39,421 – – – 39,421
Fair value Gains and Losses 215,095 – – – 215,095
Other Operating Revenue 32,101 (181) 1,467 (1,873) 31,513
Other Revenue Including Revenue from Subsidiaries 10,280,547 398,898 32,981 (75,716) 10,636,710
Segment Revenue 25,623,814 398,898 32,981 (75,808) 25,979,886
Gross Benefits and Claims Paid (6,884,013) – – 600 (6,883,413)
Claims Ceded to Reinsurers 197,033 – – – 197,033
Gross Change in Contract Liabilities (7,258,502) – – – (7,258,502)
Change in Contract Liabilities due to Transfer of One-Off Surplus 3,456,184 – – – 3,456,184
Net Benefits and Claims (10,489,298) – – 600 (10,488,698)
Direct Cost of Subsidiaries – (176,364) (5,264) – (181,627)
Acquisition Cost (1,782,479) – – – (1,782,479)
Other Operating and Administrative Expenses (3,532,496) (140,042) (21,357) (13,073) (3,706,968)
Finance Costs (12,005) – (1,239) – (13,244)
Other Expenses (5,326,980) (316,406) (27,860) (13,073) 5,684,319
Segment Benefits, Claims and Other Expenses (15,816,280) (316,406) (27,860) 12,473 16,173,017
Share of Profit of Associates – – – 346,032 346,032
Segment Results before Tax 9,807,536 82,493 5,122 257,752 10,152,901
5. (b) Segment Income Statement for the Year Ended 31 December 2016

Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Gross Premiums 15,027,600 – – (130) 15,027,470

Premiums Ceded to Reinsurers (373,829) – – – (373,829)
Net Premiums 14,653,771 – – (130) 14,653,641
Income from Subsidiaries – 338,904 8,324 (23,317) 323,911
Fees and Commission Income 120,399 – – – 120,399
Investment Income 8,180,786 12,873 4,408 (2,069) 8,195,998
Realised Gains (5,283) 3,600 – 854 (829)
Fair Value Gains and Losses 470,023 – – (182,380) 287,643
Other Operating Revenue 14,763 921 141 – 15,825
Other Revenue Including Revenue from Subsidiaries 8,780,688 356,298 12,873 (206,912) 8,942,947
Segment Revenue 23,434,459 356,298 12,873 (207,042) 23,596,588
Gross Benefits and Claims Paid (6,800,076) – – – (6,800,076)
Claims Ceded to Reinsurers 148,394 – – – 148,394
Gross Change in Contract Liabilities (8,397,889) – – – (8,397,889)
Change in Contract Liabilities due to Transfer of One-Off Surplus – – – – –
Net Benefits and Claims (15,049,571) – – – (15,049,571)
Direct Cost of Subsidiaries – (142,333) – – (142,333)
Acquisition Cost (1,693,985) – – 7,127 (1,686,858)
Other Operating and Administrative Expenses (2,937,262) (130,206) (5,235) 9,213 (3,063,490)
Finance Costs (9,915) – (19) – (9,934)
Other Expenses (4,641,162) (272,539) (5,254) 16,340 (4,902,615)
Segment Benefits, Claims and Other Expenses (19,690,733) (272,539) (5,254) 16,340 (19,952,186)
Share of Profit of Associates – – – 319,658 319,658
Segment Results before Tax 3,743,726 83,759 7,619 128,956 3,964,060
5. (c) Segment Statement of Financial Position as at 31 December 2017

Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Intangible Assets 56,950 388 – – 57,338

Property, Plant and Equipment 7,371,482 414,419 23,450 1,120,324 8,929,675
Investment Property 2,160,914 – – (1,134,914) 1,026,000
Investment in Associates 437,994 – – 1,639,671 2,077,665
Investments in Subsidiaries 1,036,000 – 44,649 (1,080,649) –
Financial Instruments 88,629,157 540,577 277,524 – 89,447,265
Reinsurance Assets 115,010 – – – 115,010
Loans to Policyholders 1,630,346 – – – 1,630,346
Premium Receivables 247,393 – – – 247,393
Other Assets 4,409,259 27,329 22,798 – 4,459,386
Total Assets 106,094,505 982,713 368,422 544,433 107,990,074
Insurance Contract Liabilities 82,150,905 – – 2,380 82,153,285
Other Liabilities 3,296,706 79,705 53,771 138,961 3,569,143
Total Liabilities 85,447,611 79,705 53,771 141,341 85,722,428
5. (d) Segment Statement of Financial Position as at 31 December 2016


Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Intangible Assets 2,759 491 – – 3,250

Property, Plant and Equipment 7,068,635 478,272 2,879 764,000 8,313,786
Investment Property 1,796,000 – – (764,000) 1,032,000
Investment in Associates 437,994 – – 1,307,152 1,745,146
Investments in Subsidiaries 1,021,000 – – (1,021,000) –
Financial Instruments 80,965,635 417,308 248,504 – 81,631,447
Reinsurance Assets 41,298 – – – 41,298
Loans to Policyholders 1,378,954 – – – 1,378,954
Premium Receivables 214,604 – – – 214,604
Other Assets 3,531,210 25,588 20,619 – 3,577,417
Total Assets 96,458,090 921,659 272,002 286,152 97,937,903
Insurance Contract Liabilities 78,258,243 – – 2,380 78,260,623
Other Liabilities 6,288,017 82,278 3,257 5,088 6,378,640
Total Liabilities 84,546,260 82,278 3,257 7,468 84,639,263
5. (e) Summarised information of Significant Subsidiaries Including NCI

Summarised Statement of Comprehensive Income
Ceylinco Healthcare Services
Limited
2017 2016
Rs. ’000 Rs. ’000
Revenue 341,195 338,904

Cost of Sales (176,364) (142,333)
Other Income 821 4,521
Administrative Expenses (134,006) (129,062)
Selling and Distribution Expenses (6,036) (1,143)
Net Finance Income/(Cost) 56,881 12,873
Profit Before Tax 82,493 83,759
Summarised Statement of Financial Position

Limited
2017 2016
Rs. ’000 Rs. ’000
Current Assets 567,906 442,896

Non-Current Assets 414,806 478,763
Total Assets 982,712 921,659
Current Liability 31,751 36,413
Non-Current Liability 47,953 45,865
Total Equity 903,007 839,381
Total Assets and Liabilities 982,712 921,659
Summarised Statement of Cash Flows

Limited
2017 2016
Rs. ’000 Rs. ’000
Net Cash flow from Operating activities 73,536 152,838

Net Cash flow from Investing activities (70,296) (399,537)
Net Cash flow from Financing activities (7,753) 250,000
Net Increase/(Decrease) In cash and cash equivalents (4,513) 3,301
Cash and Cash Equivalents at the Beginning of the Year (2,413) (5,715)
Cash and Cash Equivalents at the End of the Year (6,926) (2,413)
6. Intangible Assets
Accounting policy
An intangible asset is recognised if it is probable that the future economic benefits that are attributable to the asset will flow to the Group
and the cost of the asset can be measured reliably. An intangible asset is initially measured at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangibles are
not capitalised and the related expenditure is reflected in profit or loss in the year in which the expenditure is incurred.
Intangible assets with finite useful lives

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication
that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful
life are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated
as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the Income Statement
in the expense category consistent with the function of the intangible asset.
The estimated useful lives for Intangible Assets are as follows:
Item Useful life
Computer Software 3-5 years
Intangible assets with indefinite useful lives

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at cash generating unit level,
irrespective of whether there is an indication of impairment. Such intangibles are not amortised. The useful life of an intangible asset with
an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the
useful life assessment from indefinite to finite is made on a prospective basis.
Derecognition
The carrying amount of an intangible asset is derecognised on disposal or when no future economic benefits are expected from its use. Gain
or loss arising from derecognition of an intangible asset is calculated as the difference between the net disposal proceeds and the carrying
amount of the asset as at the date of disposal, and are recognised in the Statement of Profit or Loss when the asset is derecognised.
GROUP COMPANY
Note Computer Software Total Computer Software Total
and License and License
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Cost
As at 1 January 2016 291,354 291,354 279,893 279,893
Addition During the Year 3,103 3,103 3,103 3,103
As at 1 January 2017 294,457 294,457 282,996 282,996
Addition During the Year 57,038 57,038 57,038 57,038
As at 31 December 2017 351,495 351,495 340,034 340,034
Accumulated Amortisation and Impairment

As at 1 January 2016 290,114 290,114 279,248 279,248
Amortisation for the Year 31 1,093 1,093 989 989
As at 1 January 2017 291,207 291,207 280,237 280,237
Amortisation for the Year 31 2,951 2,951 2,847 2,847
As at 31 December 2017 294,158 294,158 283,084 283,084
Carrying Amount
As at 1 January 2017 3,250 3,250 2,759 2,759
As at 31 December 2017 57,337 57,337 56,950 56,950
6. (a) Acquisition of Intangible Assets During the Year

During the year, the Group/Company acquired intangible assets to the aggregate value of Rs. 57 Mn. and cash payments amounting to
Rs. 57 Mn. were made during the year of purchase of intangible assets.
6. (b) Fully-Amortised Intangible Assets in Use

Intangible Assets includes fully amortised Computer Software which are in the use of normal business activities having a gross carrying
amounts of Rs. 280.1 Mn. (2016 – Rs. 277 Mn.).
6. (c) Title Restriction on Intangible Assets

There were no restrictions that existed on the title of the Intangible Assets of the Company/Group as at the reporting date.
6. (d) Assessment of Impairment of Intangible Assets

The Board of Directors has assessed potential impairment indicators of Intangible Assets as at 31 December 2017. Based on the
assessment, no impairment indicators were identified.
6. (e) Capitalisation of Borrowing Costs

There were no capitalised borrowing costs related to the acquisition of Intangible Assets during the year (2016 – Nil).
7. Property, Plant and Equipment

Accounting policy
Property, plant and equipment are tangible items that are held for use in the production or supply of goods or services, for rental to others
or for administrative purposes and are expected to be used during more than one period.
Basis of recognition
Property, plant and equipment are recognised if it is probable that future economic benefits associated with the asset will flow to the Group
and the cost of the asset can be measured reliably in accordance with "LKAS 16 – Property, Plant and Equipment”.
Basis of measurement
Items of property, plant and equipment are stated at cost or revalued amount less accumulated depreciation and accumulated
impairment losses.
Initially items of property, plant and equipment are measured at its cost. Cost includes expenditure that is directly attributable to the
acquisition or construction of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs
directly attributable to bringing the assets to a working condition for their intended use and the costs of dismantling and removing the
items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is
capitalised as part of that equipment. Borrowing costs related to the acquisition or construction of qualifying assets are also capitalised.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
Subsequent Costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that
the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of
the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss
as incurred.
Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant
and equipment. Lands are not depreciated. The assets are depreciated from the month it is available for use and cease to depreciate from
the month of disposal. Depreciation methods, useful lives and residual values are reviewed at each reporting date.
The estimated useful lives for property, plant and equipment are as follows:
Item Useful Life
Buildings 50-70 years

Furniture and Fittings 5-10 years
Office Equipment 3-10 years
Computer Equipment 2-5 years
Motor Vehicles 4-5 years
Plant and Machinery/Project Equipment 3-5 years
Medical Equipment 5 years
Electrical Equipment 5 years
Revaluation
Revaluation is performed on freehold land and buildings by professionally qualified valuers using the open market value. Land and buildings
are revalued in every three years. The revaluation surplus is recognised on the net carrying value of the asset.
Any revaluation gain or loss attributable to policyholders is recognised in the Life Insurance Fund, whereas any revaluation gain or loss
attributable to shareholders is recognised in revaluation reserve.
Impairment
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication
of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount.
Impairment losses are recognised in Income Statement. Impairment losses recognised in respect of cash-generating units are allocated first
to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit
on a pro rata basis.
For assets excluding goodwill, impairment losses recognised in prior periods are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
The impairment analysis is principally based upon discounted estimated cash flows from the use and eventual disposal of the assets.
Factors like lower than anticipated sales and resulting decreases of net cash flows and changes in the discount rates could lead to
impairment.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on derecognition of the asset (calculated of the difference between the net disposal proceeds and the
carrying amount of the asset) is recognised in Income Statement in the year the asset is derecognised. When a previously revalued asset is
derecognised, the revaluation reserve pertaining to such asset is transferred to retained earnings.
Group Note Freehold Building Plant and Motor Office Computer Furniture Capital Total
Land Machinery Vehicles Equipment Equipment and Fittings WIP
Cost/Valuation
As at 1 January 2016 2,953,726 2,207,108 861,413 478,743 483,594 567,944 365,165 1,953 7,919,646
Additions During the Year 94,836 102,711 – 19,953 40,404 20,525 11,102 87,900 377,431
Transfers – – – – – – – (63,915) (63,915)
Disposals (30,000) – – (28,296) (1,884) (130,493) (1,189) – (191,862)
Revaluation 1,602,438 171,681 – – – – – – 1,774,119
As at 1 January 2017 4,621,000 2,481,500 861,413 470,400 522,114 457,976 375,078 25,938 9,815,419
Additions During the Year 486,977 157,293 40 115,002 68,139 72,271 10,986 104,789 934,686
Transfers – – – – – – – (104,575) 104,575
Disposals – – – (46,316) (4,591) (20) (2,306) – (53,233)
As at 31 December 2017 5,107,977 2,638,793 861,453 539,086 585,662 530,227 383,758 26,152 10,673,108

Group Note Freehold Building Plant and Motor Office Computer Furniture Capital Total
Land Machinery Vehicles Equipment Equipment and Fittings WIP
Accumulated
Depreciation
As at 1 January 2016 – 65,052 349,496 190,380 253,751 390,354 206,891 – 1,455,924
Depreciation for the Year 31 – 39,414 60,133 55,960 41,780 44,123 28,538 – 269,948
Disposals – (104,466) – (17,020) (1,218) (100,482) (1,054) – (224,240)
As at 1 January 2017 – – 409,629 229,320 294,313 333,995 234,375 – 1,501,632
Depreciation for the Year 31 – 54,645 55,472 56,519 44,598 39,641 24,135 – 275,010
Disposals – – – (27,189) (4,141) (11) (1,871) – (33,212)
As at 31 December 2017 – 54,645 465,101 258,650 334,770 373,625 256,639 – 1,743,430
Carrying Amount
As at 1 January 2017 4,621,000 2,481,500 451,784 241,080 227,801 123,981 140,703 25,938 8,313,787
As at 31 December 2017 5,107,977 2,584,149 396,352 280,436 250,891 156,602 127,119 26,152 8,929,678
Company Note Freehold Building Motor Vehicles Office Computer Furniture Capital WIP Total
Land Equipment Equipment and Fittings
Cost/Valuation
As at 1 January 2016 2,678,726 1,900,488 473,893 470,186 556,803 290,451 1,953 6,372,500
Additions During the Year 94,836 102,711 12,478 40,255 20,018 11,030 85,021 366,349
Transfers – – – – – – (63,915) (63,915)
Disposals (30,000) – (23,446) (1,884) (130,493) (1,189) – (187,012)
Revaluation 1,449,438 142,301 – – – – – 1,591,739
As at 1 January 2017 4,193,000 2,145,500 462,925 508,557 446,328 300,292 23,059 8,079,661
Additions During the Year 486,977 74,502 115,002 40,863 70,492 10,911 104,789 903,536
Transfers (141,000) (146,000) – – – – (104,575) (391,575)
Disposals – – (38,841) (4,591) (20) (2,306) – (45,758)
As at 31 December 2017 4,538,977 2,074,002 539,086 544,829 516,800 308,897 23,273 8,545,864
Accumulated Depreciation –
As at 1 January 2016 – 65,052 186,015 243,640 379,330 154,710 – 1,028,747
Depreciation for the Year 31 – 39,414 54,602 41,067 43,984 22,602 – 201,669
Disposals – – (12,170) (1,218) (100,482) (1,054) – (114,924)
Revaluation – (104,466) – – – – – (104,466)
As at 1 January 2017 – – 228,447 283,489 322,832 176,258 – 1,011,026
Depreciation for the Year 31 – 42,433 55,398 40,322 39,524 19,088 – 196,765
Disposals – – (25,196) (4,141) (11) (1,871) – (31,219)
Transfers – (2,190) – – – – – (2,190)
As at 31 December 2017 – 40,243 258,649 319,670 362,345 193,475 – 1,174,382
Carrying Amount
As at 1 January 2016 4,193,000 2,145,500 234,478 225,068 123,496 124,034 23,059 7,068,635
As at 31 December 2017 4,538,977 2,033,759 280,437 225,158 154,455 115,422 23,273 7,371,482
7. (a) Valuation of Freehold Land and Building

As at 31 December 2017, the fair values of the freehold land and buildings are based on valuations performed by an accredited
independent valuer, Mr Chandrasena Weerasinghe.
Valuation models used for valuation include Cost Basis method, Investment Method and Comparison Method are in compliance with the
SLFRS/LKAS and also in accordance with the 8th Edition of International Valuation Standards recommended by the International Valuation
Standards Committee.
There were no transfers between Levels 1 and 2 or to Level 3 during the year.
The Effective date of valuation of the property, plant and equipments is 31 December 2016
Description of the above valuation techniques together with narrative descriptions on sensitivity of the fair value measurement to changes
in significant unobservable inputs are tabulated below:
The fair value measurement for all of the Freehold Land and Building has been categorised as a Level 3 based on the inputs to the valuation
techniques used.
Valuation technique Sensitivity of the fair valuation inputs Significant unobservable value
measurement to inputs
Market Comparable Method Price per perch for Land Estimated fair value would increase
This method considers the selling price of a similar property Price per square foot (decrease) if; Price per perch
within a reasonably recent period of time in determining increases (decreases) Price per
the fair value of the property being revalued. This involves square foot increases (decreases)
evaluation of recent active market prices of similar assets, Depreciation rate for building
making appropriate adjustments for differences in size, nature, (decreases)/increases
location, condition of specific property in this process outlier
transactions, indicative of particularly motivated buyers or
sellers are too compensated for since the price may not
adequately reflect the fair market value.
Investment Method Gross Monthly Rental Years Estimated fair value would increase
This method involves capitalisation of the expected rental (decrease) if; Gross Annual Rental
income at an appropriate Rate of years purchase currently increases (decreases) Years
characterised by the real estate market. Purchase increases (decreases)
Void Period (decrease)/increases
7. (b) Acquisition of Property, Plant and Equipment During the Year

Group
During the financial year the Group acquired property, plant and equipment to the aggregate value of Rs. 934 Mn. (2016 – Rs. 377 Mn.).
Cash payments amounting to Rs. 916 Mn. (2016 – Rs. 289 Mn.) were made for the purchase of property, plant and equipment.
Company
During the financial year, the Company acquired property, plant and equipment to the aggregate value of Rs. 903 Mn. (2016 – Rs. 366 Mn.).
Cash payments amounting to Rs. 886 Mn. (2016 – Rs. 281 Mn.) were made during the year for purchase of property, plant and equipment.
7. (c) Capital Commitments

The Company has committed to pay an amount of Rs. 43,336,727/- (2016 – Rs. 209,651,784/-) as at the reporting date under contract
entered into on Capital expenditure projects.
7. (d) Title Restriction on Property, Plant and Equipment

There are no restrictions that existed on the title of the property, plant and equipment of the Group and Company as at the Reporting date.
7. (e) Temporarily Idle Property, Plant and Equipment

There were no temporarily idle properties as at year ended 31 December 2017.
7. (f) Assessment of Impairment

The Board of Directors has assessed the potential impairment indicators of property, plant and equipment as at 31 December 2017. Based
on the assessment, no impairment indicators were identified.
7. (g) Capitalisation of Borrowing Cost

There were no capitalised borrowing costs relating to the acquisition construction or production of property, plant and equipment during the
year (2016 – Nil).
7. (h) Fully-Depreciated Property, Plant and Equipment

The initial cost of fully-depreciated property, plant and equipment still in use as at the reporting date is as follows:
GROUP COMPANY
As at 31 December 2017 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Plant and Machinery 330,816 14,336 – –

Computer Equipment 223,076 186,759 212,501 181,935
Office Equipment 124,437 88,948 117,814 87,634
Furniture and Fittings 142,198 62,267 109,211 44,950
Motor Vehicles 189,954 77,022 189,954 77,022
Total 1,010,482 429,332 629,481 391,542
7. (i) Details of Freehold Land and Buildings of Company

Address Building Land Extent Method of Significant Estimation for Value of Value of Cost/ Date of the
Sq. Ft. Valuation Unobservable Unobservable Inputs Land Buildings Revaluation Valuation
Inputs Rs. Rs. ’000 Rs. ’000 Rs. ’000
Company
No. 115, 13,169 A-0-R-0-P-15.00 Contractor’s Price per perch 2,000,000 30,000 46,000 76,000 12.25.2016
Greens Road, Negombo Test Method Price per Sq.ft. 5,000
No. 63, – A-0-R-0-P-13.84 Residual Price per perch 10,000,000 138,500 – 138,500 12.15.2016
Janadhipathi Mawatha, Method
Colombo 01
No. 60, Colombo Road, 11,385 A-0-R-0-P-15.00 Contractor’s Price per perch 2,500,000 37,000 59,000 96,000 12.2.2016
Kaluwella, Galle Test Method Price per Sq.ft. 6,500
Harichchandra Mawatha, Test Method Price per Sq.ft. 6,500
Anuradhapura
No. 144, 8,130 A-0-R-1-P- 01.00 Replacement Price per perch 738,000 30,000 41,000 71,000 12.4.2016
Hambantota Road, Cost Method Price per Sq.ft. 6,000
Kachcheriyagama,
Tissamaharama
No. 45, 2,560 A-0-R-0-P-35.50 Investment Price per perch 2,000,000 71,000 9,200 80,200 12.2.2016
Dharmapala Mawatha, Method Price per Sq.ft. 4,500
Ratnapura
No. 45, Dharmapala 8,102 – Investment Price per Sq.ft. 8,500 – 72,420 72,420 12.2.2016
Mawatha, Ratnapura Method
(New Building)
No. 401, Main Street, 7,116 A-0-R-1-P-4.12 Contractor’s Price per perch 3,500,000 154,000 60,689 214,689 12.2.2016
Panadura Test Method Price per Sq.ft. 7,200
Main Street, Kalutara Test Method Price per Sq.ft. 8,000
No. 327, 8,970 A-0-R-0-P-17.01 Market Price per perch 900,000 15,000 88,000 103,000 12.20.2016
Badulla Road, Comparable Price per Sq.ft. 9,800
Bandarawela Method
No. 106, 61,630 A-0-R-0-P-35.27 Contractor’s Price per perch 10,000,000 353,000 673,000 1,026,000 12.1.2016
Havelock Road, Test Method Price per Sq.ft. 11,500
Colombo 05
No. 32, 5,227 A-0-R-0-P-26.9 Direct Price per perch 450,000 12,000 22,000 34,000 12.17.2016
Mistry Hills, Comparison Price per Sq.ft. 2,000 – 5,000
Nuwara Eliya Method
No. 15, Rex dias 9,114 A-0-R-0-P-37.40 Contractor’s Price per perch 750,000 28,000 60,797 88,797 12.26.2016
Mawatha, Wennappuwa Test Method Price per Sq.ft. 6,500
No. 91, Bauddhaloka 9,458 A-0-R-0-P-32.5 Contractor’s Price per perch 2,750,000 89,000 68,000 157,000 11.20.2016
Mawatha, Gampaha Test Method Price per Sq.ft. 8,000
No. 40, Rajapihilla Road, 10,485 A-0-R-0-P-15.5 Contractor’s Price per perch 2,000,000 31,000 89,000 120,000 12.20.2016
Kurunegala Test Method Price per Sq.ft. 9,000
No. 90/4, Kurunegala 6,150 A-0-R-0-P-30.0 Direct Price per perch 600,000 18,000 23,764 41,764 12.26.2016
Road, Chilaw Comparison
Method
No. 38, Abdul Gafoor – A-0-R-1-P-4.5 Income Price per perch 10,000,000 445,000 – 445,000 12.2.2016
Mawatha, Colombo 03 Capitalisation
Method
No. 406, Galle Road, 6,874 A-0-R-0-P.39.73 Contractor’s Price per perch 2,500,000 99,000 16,000 115,000 12.5.2016
Rawatawatta, Moratuwa Test Method Price per Sq.ft. 4,000 - 4,500
Nos. 37, 39 & 41, 4,144 A-0-R-1-P-7.9 Contractor’s Price per perch 1,800,000 86,000 12,000 98,000 12.29.2016
Kannarthiddy Road, Test Method Price per Sq.ft. 4,500
Jaffna

Address Building Land Extent Method of Significant Estimation for Value of Value of Cost/ Date of the
Sq. Ft. Valuation Unobservable Unobservable Inputs Land Buildings Revaluation Valuation
Inputs Rs. Rs. ’000 Rs. ’000 Rs. ’000
No. 22 (New 32), 11,690 A-0-R-0-P-23.83 Market Price per perch 1,500,000 35,000 82,000 117,000 12.5.2016
Lloyd's Avenue, Comparable Price per Sq.ft. 7,000
Batticaloa Method
No. 2, 5,210 A-0-R-1-P-27.25 Market Price per perch 10,000,000 672,500 14,500 687,000 12.18.2016
Gower Street, Comparable Price per Sq.ft. 5,000
Colombo 05 Method
Nos. 20 & 22/3, 11,340 A-0-R-1-P-20 Contractor’s Price per perch 750,000 40,000 90,000 130,000 12.15.2016
Kandy Road, Trincomalee Test Method Price per Sq.ft. 8,000
Nos. 38, 38/B, – A-0-R-0-P-23.93 Market Price per perch 2,000,000 48,000 – 48,000 12.20.2016
Rajapihilla Road, Comparable
Kurunegala Method
Nos. 92 & 98, 19,470 A-0-R-1-P-11.22 Market Price per perch 3,000,000 146,000 71,000 217,000 12.6.2016
Jampettah Street, Comparable Price per Sq.ft. 5,000 – 6,000
Colombo 13 Method
No. 70, Park Street, 4,510 A-0-R-1-P-32.4 Replacement Price per perch 10,000,000 724,000 122,000 846,000 12.22.2016
Colombo 02 Cost Method Price per Sq.ft. 27,000
No. 615, Galle Road, 4,315 A-0-R-1-P-12.5 Market Price per perch 3,000,000 157,500 19,500 177,000 12.18.2016
Mount Lavinia Comparable Price per Sq.ft. 5,000
Method
Panadura Road, Horana Test Method Price per Sq.ft. 7,000
No. 65, King Street, 14,650 A-0-R-1-P-1.25 Contractor’s Price per perch 5,500,000 227,000 49,000 276,000 12.5.2016
Kandy Test Method Price per Sq.ft. 5,000
No. 45, Anagarika 7,232 A-0-R-0-P-26.44 Replacement Price per perch 4,250,000 112,500 19,500 132,000 12.2.2016
Dharmapala Mawatha, Cost Method Price per Sq.ft. 4,500
Matara
No. 213, – A-0-R-0-P-23.75 Market Price per perch 3,350,000 80,000 – 80,000 12.15.2016
High Level Road, Comparable
Nugegoda Method
No. 15A, – A-0-R-0-P-19.5 Market Price per perch 870,000 17,000 – 17,000 12.24.2016
Jaya Mawatha, Comparable
Kadawatha Method
No. 26, – A-0-R-0-P-32 Market Price per perch 1,500,000 50,000 – 50,000 2.23.2017
Gammedda Road, Comparable
Ja-ela Method
No. 190, Horana Road, – A-0-R-0-P-25.35 Market Price per perch 2,500,000 66,517 – 66,517 10.4.2017
Mampe, Kesbewa Comparable
Method
No. 43 & 45, 12,676 A-0-R-0-P-25.31 Contractor's Price per perch 15,000,000 370,460 30,831 401,292 8.24.2017
Galle Road, Wellawatta, Test Method Price per Sq ft 6,500
Colombo 6
Total 4,538,977 2,074,002 6,612,979
7 (j) Movement of Revalued Freehold Land and Building if Accounted on Cost

Freehold land Building

Rs. ’000 Rs. ’000
At Cost
As at 1 January 2016 2,678,726 1,900,487
Addition 94,836 102,710
Disposal (30,000) –
As at 31 December 2016 2,743,562 2,003,197
Addition 486,977 74,502
Disposal – –
Transfers (94,000) (149,714)
As at 31 December 2017 3,136,539 1,927,985
Depreciation
As at 1 January 2016 – 65,053
Addition – 39,413
Disposal – –
As at 31 December 2016 – 104,466
Addition – 42,433
Disposal – –
Transfers – (11,709)
As at 31 December 2017 – 135,190
Carrying amount
As at 1 January 2016 2,678,726 1,835,434
As at 31 December 2016 2,743,562 1,898,731
As at 31 December 2017 3,136,539 1,792,795
8. Investment Properties
Accounting policy
Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of
an existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes the costs of day-to-day
servicing of an investment property. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market
conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are included in the Income
Statement in the year in which they arise.
Fair values are evaluated annually by an accredited external, independent valuer, applying a valuation model, when there are indications of
fair value changes in investment property.
There were no indication triggered that will result in changes in fair value of the investment property when compared to prior year.
Transfers
Transfers are made to or from investment property only when there is a change in use evidenced by the end of owner-occupation,
commencement of an operating lease to another party or completion of construction or development. For a transfer from investment
property to owner occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use.
If owner-occupied property becomes investment property, the Company and the Group account for such property in accordance with the
policy stated under property, plant and equipment up to the date of the change in use.
Derecognition

Investment properties are derecognised either when they have been disposed of, or when the investment property is permanently
withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of
an investment property are recognised in the Income Statement in the year of retirement or disposal.
GROUP COMPANY
Note 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
At 1 January 1,032,000 817,551 1,796,000 1,399,171

Transfers – – 370,914 –
Disposal During the Year (6,000) – (6,000) –
Fair Value Gains 28 – 214,449 – 396,829
At 31 December 1,026,000 1,032,000 2,160,914 1,796,000
8. (a) Valuation of Investment Properties

The fair values of the freehold land and building are based on valuations performed by an accredited independent valuer, Mr Chandrasena
Weerasinghe.
Valuation models used for valuation include Cost Basis Method, Investment Method and Comparison Method are in compliance with the
SLFRS/LKAS and also in accordance with the 8th Edition of International Valuation Standards recommended by the International Valuation
Standards Committee.
There were no transfers between Levels 1 and 2 or to Level 3 during the year.
Description of the above valuation techniques together with narrative descriptions on sensitivity of the fair value measurement to changes
in significant unobservable inputs are tabulated below:
The fair value measurement for all of the Freehold Land and Building has been categorised as a Level 3 based on the inputs to the valuation
techniques used.
Valuation Technique Sensitivity of the fair valuation inputs Sensitivity of the Fair Value
Measurement to Inputs
Market Comparable Method Price per perch for Land/Price per Estimated fair value would
This method considers the selling price of a similar property square foot increase/(decrease) if; Price per
within a reasonably recent period of time in determining perch increases/(decreases)
the fair value of the property being revalued. This involves Price per square foot increases/
evaluation of recent active market prices of similar assets, (decreases) Depreciation rate for
making appropriate adjustments for differences in size, nature, building (decreases)/increases.
location, condition of specific property in this process outlier
transactions, indicative of particularly motivated buyers or
sellers are too compensated for since the price may not
adequately reflect the fair market value.
Investment Method Gross Monthly Rental Years Estimated fair value would
This method involves capitalisation of the expected rental increase/(decrease) if; Gross
income at an appropriate rate of years purchase currently Annual Rental increases/
characterised by the real estate market. (decreases) Years Purchase
increases/(decreases) Void Period
(decrease)/increases.
The Effective date of valuation of the investment property is 31 December 2016.

8. (b) Temporarily Idle Investment Properties

There were no temporarily idle investment property as at year ended 31 December 2017.
8. (c) Assessment of Impairment

The Board of Directors has assessed the potential impairment indicators of investment property as at 31 December 2017. Based on the
assessment, no impairment indicators were identified.
8. (d) Details of Investment Property of Company

Addresses Building Land Extent Method of Significant Estimation Value of Value of Cost/ Date of the
Sq. Ft. Valuation Unobservable for Land Buildings Revaluation Valuation
Inputs Unobservable Rs. ’000 Rs. ’000 Rs. ’000
No. 36, Talbot Town, Galle 6,668 A-0-R-0-P-20 Investment Rent per Sq.ft. Rs. 85 – 90,000 16,000 106,000 12/2/2016
Method per month Rs. 130
No. 24 A, New Galle Road, 4,614 A-0-R-0-P-20 Investment Rent per Sq.ft. Rs. 75 – 55,000 17,000 72,000 12/2/2016
Nambimulla, Ambalangoda Method per month Rs. 100
No. 115, Green Road, Negombo A-0-R-0-P-37.5 Market Price per perch Rs. 2,500,000 94,000 – 94,000 12/25/2016
Comparable
Method
Nos. 428, 428/2/1, R. A. De Mel 8,249 Condominium Investment Rent per Sq.ft. Rs.120 – 125,000 125,000 12/28/2016
Mawatha, Colombo 03 Method per month Rs. 160
No. 60, Park Street, Colombo 02 34,854 A-0-R-1-P-2.82 Investment Rent per Sq.ft. Rs.125 – 428,000 210,000 638,000 12/22/2016
No. 70, Park Street, Colombo 02 4,510 Market Rent per Sq.ft. Rs. 125 – – 126,000 126,000 12/18/2016
Comparable per month Rs. 160
Method
No. 06, Railway Station Road, Matara 2,982 A-0-R-0-P-25.88 Investment Rent per Sq.ft. Rs. 40 – 52,000 5,000 57,000 12/3/2016
Ceylinco House, No. 69, Janadhipathi 11,323 Investment Rent per Sq.ft. Rs. 160 226,000 226,000 12/15/2016
Mawatha, Colombo 01 (5th Floor) Method per month
Ceylinco House, No. 69, Janadhipathi 11,323 Investment Rent per Sq.ft. Rs. 165 – 233,000 233,000 12/15/2016
Ceylinco House, No. 69, Janadhipathi 5,318 Investment Rent per Sq.ft. Rs. 170 – 113,000 113,000 12/15/2016
Serene Resorts, Bopitiya Road, 37,184 A-2-R-3-P-30 Market Price per perch Rs. 300,000 141,000 229,914 370,914 12/25/2016
Uswetakeiyawa Comparable Price per Sq.ft. Rs. 3,000 –
Method 5,500
Total 860,000 1,300,914 2,160,914
The fair value of investment properties reflects the actual market value as at the Reporting date.
8. (e) Rental Income

GROUP COMPANY
For the year ended 31 December Note 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Rental Income Derived from Investment Properties 26 74,438 70,032 76,147 72,101
Direct Operating Expenses Generating Rental Income (1,348) (1,439) (1,348) (1,439)
Direct Operating Expenses that did not Generating
Rental Income (4,409) (4,513) (4,409) (4,513)
Net Profit Arising from Investment Properties 68,681 66,149 70,390 66,149
9. Investment in Subsidiaries -Company

Accounting policy
Business combinations are accounted for using the purchase method. Transaction costs directly attributable to the acquisition form part of
the acquisition costs. Non-controlling interests are measured at the proportionate share of the acquiree’s identifiable net assets.
The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the
amount of any non-controlling interest in the acquiree. For each business combination, the Group measures the non-controlling interest
in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Transaction costs, other than those
associated with the issue of debt or equity securities that the Group incurs in connection with a business combinations are expensed and
included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation
in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. If the business
combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain
or loss is recognised in Income Statement. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at
the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability, will
be recognised in accordance with LKAS 39 either in Income Statement or as a change to Other Comprehensive Income. If the contingent
consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the
contingent consideration does not fall within the scope of LKAS 39, it is measured in accordance with the appropriate SLFRS/LKAS.
Transactions Eliminated on Consolidation

Intra-group balances and transactions, and any unrealised income expenses arising from intra-group transactions and dividend, are
eliminated in preparation of the Consolidated Financial Statements.
Subsidiaries
Subsidiaries are entities controlled by the Parent Company. Control is achieved when the Group is exposed or has the right, to variable
returns from its involvement with the investee and when it has the ability to affect those returns through its power over the investee.
Specially, the Group controls an investee if, and only if, the Group has:
zzPower over the investee (i.e., Existing rights that give it the current ability to direct the relevant activities of the investee)
zzExposure or rights, to variable returns from its involvement with the investee
zzThe ability to use its power over the investee to affect its return
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less
than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether
it has power over an investee including:
zzThe contractual agreement with the other vote holders of the investee
zzRightsarising from other contractual agreements
zzThe Group’s voting rights and potential voting rights
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of
the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when
the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are
included in the Consolidated Financial Statements from the date the Group gains control until the date the Group ceases to control
the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the Parent of the Group and
to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments
are made to the Financial Statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. A
change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses
control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of
equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.
The Financial Statements of the subsidiaries are prepared for the same reporting year as the Parent Company, using consistent
accounting policies.
Unquoted Shares

% of Direct Holding Number of shares Cost
As at 31 December 2017 2016 2017 2016 2017 2016
% % Rs. ’000 Rs. ’000
Serene Resorts Limited 98.15 98.15 26,500,000 26,500,000 265,000 250,000

Ceylinco Seraka Limited 5.0 5.00 5,000 5,000 – –
Ceylinco Healthcare Services Limited 99.45 99.45 77,100,000 77,100,000 771,000 771,000
Total 1,036,000 1,021,000
Transactions with Non-Controlling Interests

The profit or loss and net assets of a subsidiary attributable to equity interests that are not owned by the parent, directly or indirectly
through subsidiaries, is disclosed separately under “Non-Controlling Interest”. Losses within a subsidiary are attributed to the non-controlling
interest even if that results in a deficit balance.
10. Investment in Associate

Accounting policy
Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies.
Significant influence is the power to participate in the financial and operating policy decisions of the investee, but it is not control or joint
control over those policies. Associates are accounted for using the equity method.
Under the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to
recognise changes in the Group’s share of net assets of the associate since the acquisition date.
The Income Statement reflects the Group’s share of the results of operations of the associate. Any change in Other Comprehensive Income
of those investees is presented as part of the Group’s Other Comprehensive Income. In addition, when there has been a change recognised
directly in the equity of the associate, the Group recognises its share of any changes and discloses this, when applicable, in the Statement
of Changes in Equity. Unrealised gains and losses resulting from transactions between the Group and the associate are eliminated to the
extent of the interest in the associate.
The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the Income Statement outside operating profit
and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.
The Financial Statements of the associate is prepared for the same Reporting period as the Group. When necessary, adjustments are made
to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the
Group’s investment in associates. At each reporting date, the Group determines whether there is any objective evidence that the investment
in the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the
recoverable amount of the associate and its carrying value and recognises the amount in the “share of profit of an associate” in the
Income Statement.
Upon loss of significant influence over the associate, the Group measures and recognises any remaining investment at its fair value. Any
differences between the carrying amount of the associate upon loss of significant influence and the fair value of the remaining investment
and proceeds from disposal are recognised in Income Statement.
10. (a) Company/Group Investments in Associates

Holding Number of shares Value

2017 2016 2017 2016 2017 2016
% % Nos. Nos. Rs. ’000 Rs. ’000
Company
Quoted Investments
Citizens Development
Business Finance PLC 30.25 30.25 16,429,116 16,429,116 437,994 437,994
Company/Group Investments in
Associate (at Cost) – – – – 437,994 437,994
Group
Negative Goodwill on
Acquisition Over Consideration
Citizens Development Business
Finance Limited – – – – 103,749 103,749
Group's Share of Retained
Assets of Associates
Citizens Development Business
Finance PLC – – – – 1,535,922 1,203,402
Group Investment in Associates
(Equity Basis) – – – – 2,077,665 1,745,146
10. (b) Summarised Financial Information of the Associate

GROUP
2017 2016
Rs. ’000 Rs. ’000
Share of Associate’s Statement of Financial Position

Total Assets 20,361,748 17,191,933
Total Liabilities 18,284,083 15,446,787
Net Assets 2,077,665 1,745,146
Share of Associate’s Revenue and Profit

Revenue 3,229,598 2,486,412
Profit Before Tax 459,270 389,630
Profit After Tax 346,032 319,658
Other Comprehensive Income 38,229 31,697
Dividend Received 51,752 48,917
Citizens Development Business Finance PLC (CDB) is a public limited liability company incorporated in Sri Lanka. CDB is a listed Company on
the Colombo Stock Exchange and provides a wide range of financial services including accepting deposits, leasing, hire purchase and loan
facilities etc.
10. (c) Fair Value of the Investment

Fair value of investments as at reporting date Rs. 1,041 Mn. (2016 Rs.1,150 Mn.)
11. Financial Instruments and Fair Values of Financial Instruments

Accounting policy
Depending on the intention and ability to hold the invested assets, the Company classifies its non-derivative financial assets into following
categories:
zzFinancialassets at fair value through profit or loss (FVTPL);
zzHeld to maturity (HTM);
zzLoans and receivables (L&R); and
zzAvailable-for-sale (AFS) financial assets as appropriate.
Initial Recognition
The Group/Company initially recognises loans and receivables, and deposits on the date that they are originated. All other financial assets
(including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Group/Company
becomes a party to the contractual provisions of the instrument. In the case of financial assets not at fair value through profit or loss, a
financial asset is measured initially at fair value plus transaction costs that are directly attributable to its acquisition or issue.
Income and expenses are presented on a net basis only when permitted under SLFRS/LKAS, or for gains and losses arising from a group of
similar transactions such as in the Group/Company’s trading activity.
The following table consists of the fair values of the financial investments together with their carrying values.
Fair Value through Profit or Loss investments and Available-For-Sale investments have been valued at fair value. Held-to-maturity
investments and loans and receivable investments are valued at amortised cost.
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Note Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Held-to-Maturity Financial Assets 11 (a) 65,272,728 66,581,929 65,272,728 66,581,929

Loans and Receivables 11 (b) 17,973,682 13,664,301 17,199,112 12,998,491
Available-for-Sale Financial Assets 11 (c) 3,851,240 1,219,654 3,807,709 1,219,654
Financial Assets at Fair Value through Profit or Loss 11 (d) 2,349,607 165,562 2,349,607 165,562
Total Financial Instruments 89,447,258 81,631,446 88,629,157 80,965,635
The following table compares the fair values of the financial instruments to their carrying values:
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Carrying Fair Carrying Fair Carrying Fair Carrying Fair

value value value value value value value value
Held-to-Maturity Financial Assets 65,272,728 65,785,966 66,581,929 63,026,213 65,272,728 65,785,966 66,581,929 63,026,213
Loans and Receivables 17,973,682 17,973,682 13,664,301 13,664,301 17,199,112 17,199,112 12,998,491 12,998,491
Available-for-Sale Financial Assets 3,851,240 3,851,240 1,219,654 1,219,654 3,807,709 3,807,709 1,219,654 1,219,654
Financial Assets at Fair Value through
Profit or Loss 2,349,607 2,349,607 165,562 165,562 2,349,607 2,349,607 165,562 165,562
Total Financial Instruments 89,447,258 89,960,495 81,631,446 78,075,730 88,629,157 89,142,394 80,965,635 77,409,919
Impairment of Financial Assets

The Group assesses, at each reporting date, whether there is any objective evidence that a financial asset or a group of financial assets is
impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment
as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event
has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default
or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial re-organisation and when
observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.
Offsetting
Financial assets and financial liabilities are offset and the net amount is reported in the Consolidated Statement of Financial Position if, and
only if, there is a currently enforceable legal right to offset derecognised amounts and there is an intention to settle on a net basis, or to
realise the assets and settle the liabilities simultaneously. Income and expense will not be offset in the Consolidated Income Statement
unless required or permitted by any accounting standard or interpretation, as specifically disclosed in the accounting policies of the Group.
Derecognition of Financial Assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:
zzThe rights to receive cash flows from the asset have expired; or
zzThe Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in
full without material delay to a third party under a “pass-through” arrangement; and either:
(a) the Group has transferred substantially all the risks and rewards of the asset; or
(b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of
the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates
if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all
of the risks and rewards of the asset, nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing
involvement in the asset. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying
amount of the asset and the maximum amount of consideration that the Group could be required to repay.
11. (a) Held-to-Maturity Financial Assets

Accounting policy
Financial assets with fixed or determinable payments and fixed maturities are classified as held to maturity when the Group has the positive
intention and ability to hold it to maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, held-to-maturity financial assets are measured at amortised cost using the effective
interest method, less any impairment losses.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the
effective interest rate (EIR). The EIR amortisation is included in finance income in the Income Statement.
The losses arising from impairment are recognised as finance cost in the Income Statement.

GROUP COMPANY
As at 31 December Note 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Amortised Cost
Treasury Bonds 41,750,734 43,473,354 41,750,734 43,473,354
Debentures – Quoted 11 ( j) (1) 23,521,994 23,108,575 23,521,994 23,108,575
Total Held-to-Maturity Financial Assets at Amortised Cost 65,272,728 66,581,929 65,272,728 66,581,929
Fair Value
Treasury Bonds 42,577,694 39,627,302 42,577,694 39,627,302
Debentures – Quoted 23,208,271 23,398,910 23,208,271 23,398,910
Total Held-to-Maturity Financial Assets at Fair Value 65,785,966 63,026,213 65,785,966 63,026,213
11. (b) Loans and Receivables

Accounting policy
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR),
less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance income in the Income Statement. The losses arising from impairment are
recognised in the Income Statement in finance costs for loans and in other operating expenses for receivables.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Staff Vehicle Hire 399,283 343,503 399,283 369,157

Staff Loans Other than Vehicle Hire 168,627 160,599 168,627 134,945
Repo Investment 241,199 3,035,856 236,199 2,987,652
Debentures – Unquoted 11. ( j) (2) 1,301,203 1,001,072 1,301,203 1,001,072
Term Deposits 11. ( j) (3) 15,863,370 9,123,270 15,093,799 8,505,664
Total Loans and Receivables Financial Assets
at Amortised Cost 17,973,682 13,664,301 17,199,112 12,998,491
The carrying value of the staff loan and the Car hire to sales agents have been computed based on the market interest rates prevailed at
the time of granting the loan.
Impairment of Financial Assets Carried at Amortised Cost

For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually
for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group
determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it
includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets
that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a
collective assessment of impairment.
If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet
been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a
loan has a variable interest rate, the discount rate for measuring any impairment loss is the current EIR.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the
Income Statement. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used
to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance
income in the Income Statement. Loans together with the associated allowance are written off when there is no realistic prospect of future
recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, the amount of the estimated
impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised
impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited
to finance costs in the Income Statement.
11. (c) Available-for-Sale Financial Assets

Accounting policy
Available-for-sale financial assets are financial assets that are designated as Available-for-Sale and that are not classified in any of the
previous categories. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses on
available-for sale equity instruments are recognised in Other Comprehensive Income and presented within equity in the available-for-sale
reserve. When an investment is derecognised, the cumulative gain or loss in Other Comprehensive Income is transferred to the
Income Statement.
Available-for-sale financial investments include equity and debt securities. Equity investments classified as available for sale are those that
are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those that are
intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in
the market conditions.
The Group evaluates its available-for-sale financial assets to determine whether the ability and intention to sell them in the near term
would still be appropriate. In the case where the Group is unable to trade these financial assets due to inactive markets and Management’s
intention significantly changes to do so in the foreseeable future, the Group may elect to reclassify these financial assets in rare
circumstances. Reclassification to loans and receivables is permitted when the financial asset meets the definition of loans and receivables
and Management has the intention and ability to hold these assets for the foreseeable future or until maturity. There classification to held to
maturity is permitted only when the entity has the ability and intention to hold the financial asset until maturity.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Treasury Bonds and Bills 2,844,923 141,997 2,844,923 141,997

Unquoted Preference Share Investment 11. ( j) (6) 131,886 131,886 131,886 131,886
Quoted Debentures 11. ( j) (4) 656,091 717,328 656,091 717,328
Quoted Share Investment 11. ( j) (5) 218,341 228,443 174,810 228,443
Total Available-for-Sale Financial Assets at Fair Value 3,851,240 1,219,654 3,807,709 1,219,654
Impairment of Available-for-Sale Financial Investments

The Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired.
In the case of equity investments classified as Available for sale, objective evidence would include a significant or prolonged decline in the
fair value of the investment below its cost. “Significant” is evaluated against the original cost of the investment and “prolonged” against the
period in which the fair value has been below its original cost. When there is evidence of impairment, the cumulative loss – measured as
the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised
in the Income Statement – is removed from Other Comprehensive Income and recognised in the Income Statement. Impairment losses on
equity investments are not reversed through the Income Statement; increases in their fair value after impairment are recognised directly in
Other Comprehensive Income.
In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried
at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised
cost and the current fair value, less any impairment loss on that investment previously recognised in the Income Statement. Future interest
income continues to be accrued based on the reduced carrying amount of the asset and is accrued using the rate of interest used to
discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income.
If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after
the impairment loss was recognised in the Income Statement, the impairment loss is reversed through the Income Statement.
The determination of what is “significant” or “prolonged” requires judgement. In making this judgment, the Group evaluates among other
factors, the duration or extent to which the fair value of the investment is less than its cost.
11. (d) Financial Assets at Fair Value through Profit or Loss

Accounting policy
A financial asset is classified as fair value through profit or loss if it is held for trading or is designated as such upon initial recognition.
Financial assets are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale
decisions based on their fair value in accordance with the Group’s investment strategy. Attributable transaction costs are recognised in
Income Statement as incurred.
Financial assets at fair value through profit and loss investments are carried in the Statement of Financial Position at fair value with changes
in fair value recognised in the Income Statement. Financial assets designated at fair value through profit or loss comprises quoted equity
instruments and Treasury Bonds unless otherwise have been classified as available for sale.
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Note Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Fair Value
Treasury Bonds 2,336,205 148,331 2,336,205 148,331
Short Term Investment – Quoted 11. ( j) (7) 13,402 17,231 13,402 17,231
Total Financial Assets at Fair Value Through
Profit or Loss 2,349,607 165,562 2,34s9,607 165,562
11. (e) Accrued Income

GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Held-to-Maturity Investments 2,012,385 2,029,044 2,012,385 2,029,044

Financial assets at fair value through profit or loss 65,557 7,172 65,557 7,172
Loans and Receivables 565,268 1,421,846 557,388 1,417,829
Available for sale investments 102,565 15,478 102,565 15,478
2,745,775 3,473,540 2,737,895 3,469,523
Accrued Income of Financial Instruments, which were shown separately in the Statement of Financial Position in year 2016 are
amalgamated to the each instruments and shown under each class of financial instruments above.
11. (f) Determination of Fair Value and Fair Values Hierarchy

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either;
zzIn the principal market for the asset or liability or;
zzIn the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using
the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their
economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All
assets and liabilities for which fair value is measured or disclosed in the Financial Statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or
indirectly; and
Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable
market data.
For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period. For the purpose of fair value disclosures, the Group has determined classes
of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Fair Value Basis – Instrument-Wise

Instrument Measurement Basis
Government Securities
Treasury Bonds Average of the buy/sell yields included in the weekly economic indicators published by the Central
Bank of Sri Lanka
Treasury Bills Average of the buy/sell yields included in the weekly economic indicators published by the Central
Bank of Sri Lanka
Investment in Listed Shares Volume Weighted-Average (VWA) prices
Corporate Debt
Listed Last traded price
Unlisted Fixed Rate Discounted Cash Flow (DCF) Method (Cost plus accrued interest)
Fixed and Term Deposits

Deposit > 1 Year Discounted Cash Flow (DCF) Method (Cost plus accrued interest)
Fixed Rate Financial The fair values of fixed rate financial assets and liabilities carried at amortised cost are estimated by
Instruments comparing market interest rates when they were first recognised with current market rates for similar
financial instruments
Quoted debt instruments Quoted market prices
Unquoted debt instruments Carrying amounts approximate the fair value of the investments
The following table shows an analysis of assets and liabilities recorded at fair value by level of the fair value hierarchy:
2017 2016
Instrument Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3 Total Fair Value
Company
Financial Assets
Financial Assets at
Fair Value through
Profit or Loss
Equity Securities 13,402 – – 13,402 17,231 – – 17,231
Debt Securities 2,336,205 – – 2,336,205 148,331 – – 148,331
2,349,607 – – 2,349,607 165,562 – – 165,562
Available-for-Sale
Financial Assets
Equity Securities 174,810 – 131,886 306,696 228,443 – 131,886 360,329
Debt Securities 3,501,014 – – 3,501,014 859,325 – – 859,325
3,675,823 – 131,886 3,807,709 1,087,768 – 131,886 1,219,654
Held to Maturity
Financial Assets – 65,785,966 – 65,785,966 63,026,213 – 63,026,213
Total Financial Assets 6,025,431 65,785,966 131,886 71,943,282 1,253,330 63,026,213 131,886 64,411,429
Property, Plant &
Equipment
Land – – 4,538,977 4,538,977 – – 4,193,000 4,193,000
Buildings – – 2,033,759 2,033,759 – – 2,145,500 2,145,500
– – – – – – 6,338,500 6,338,500
Investment Properties – – 2,160,914 2,160,914 – – 1,796,000 1,796,000
Total Assets 6,025,431 65,785,966 2,292,800 74,104,196 1,253,330 63,026,213 8,266,386 72,545,929
11. (g) Reconciliation of Movements in Level 3 Financial Instruments Measured at Fair Value
The following table shows a reconciliation of the opening and closing recorded amount of Level 3 financial assets which are recorded
at fair value:
Company As at Total Gains/(Loss) Additions/ As at

1 January Recorded in Other Settlements 31 December
2017 Comprehensive 2017
Income
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Financial Assets
Available-for-Sale Financial Assets
Equities 131,886 – – 131,886
Total Level 3 Financial Assets 131,886 – – 131,886
In case of a change in the assumptions having a 10% variation, the effect on Other Comprehensive Income would be as follows:
Carrying Amount Effect of Possible Carrying Amount Effect of Possible

as at Alternate as at Alternate
31 December 2017 Assumptions 31 December 2016 Assumptions
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Equity Securities 131,886 13,189 131,886 13,189

131,886 13,189 131,886 13,189
11. (h) Carrying Values of Financial Instruments

The movement of carrying value of above financial instruments as of reporting date is as follows:
Group Held to Loans and Available Fair Value through Total

Maturity Receivables for Sale Profit or Loss
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
As at 1 January 2016
Transferred from Ceylinco Insurance PLC 46,856,946 16,730,897 1,051,072 214,936 64,853,852
Purchases 22,959,940 291,371,596 9,222,531 16,800,000 340,354,067
Maturities (4,861,274) (295,845,838) – – (300,707,112)
Disposals – – (9,061,761) (16,850,000) (25,911,761)
Fair Value Gains Recorded in the Income Statement – – – 73,194 73,194
Fair Value Gains Recorded in Other Comprehensive Income – – 27,001 – 27,001
Interest Accrual Adjustment 2,029,043 1,421,847 15,478 7,172 3,473,540
Amortisation Adjustment (402,727) (14,201) (28,966) (79,741) (525,635)
As at 1 January 2017 66,581,928 13,664,302 1,219,654 165,561 81,631,445
Purchases 2,535,876 333,359,363 16,865,157 24,765,278 377,525,675
Maturities (3,224,095) (328,228,001) – – (331,452,096)
Disposals – – (14,331,726) (22,719,107) (37,050,834)
Fair Value Gains Recorded in Other Comprehensive Income – – (20,685) – (20,685)
Interest Accrual Adjustment (16,658) (856,579) 92,788 58,385 (722,064)
Amortisation Adjustment (604,322) 34,598 26,052 (135,605) (679,277)
As at 31 December 2017 65,272,728 17,973,682 3,851,240 2,349,607 89,447,258
Company Held to Loans and Available Fair Value through Total

Maturity Receivables for Sale Profit or Loss

Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
As at 1 January 2016
Transferred from Ceylinco Insurance PLC 46,856,946 16,730,897 1,051,072 214,936 64,853,852
Purchases 22,959,940 286,329,518 9,222,531 16,800,000 335,311,989
Maturities (4,861,274) (291,465,554) – – (296,326,828)
Disposals – – (9,061,761) (16,850,000) (25,911,761)
Fair Value Gains Recorded in Other Comprehensive Income – – 27,001 – 27,001
Interest Accrual Adjustment 2,029,043 1,417,830 15,478 7,172 3,469,523
Amortisation Adjustment (402,727) (14,201) (28,966) (79,741) (525,635)
As at 1 January 2017 66,581,928 12,998,491 1,219,654 165,561 80,965,634
Purchases 2,535,876 332,182,817 16,821,626 24,765,278 376,305,598
Maturities (3,224,095) (327,185,561) – – (330,409,656)
Disposals – – (14,331,726) (22,719,107) (37,050,834)
Fair Value Gains Recorded in Other Comprehensive Income – – (20,685) – (20,685)
Interest Accrual Adjustment (16,658) (860,443) 92,788 58,385 (725,928)
Amortisation Adjustment (604,322) 63,808 26,052 (135,605) (650,067)
As at 31 December 2017 65,272,728 17,199,111 3,807,709 2,349,607 88,629,156
11. (i) Assets for which Fair Value Approximates Carrying Value
For financial assets and financial liabilities that have a short-term maturity (less than three months), it is assumed that the carrying amounts
approximate their fair value. This assumption is also applied to demand deposits and savings accounts without a specific maturity.
11. (j) Entity-Wise Details of Financial Instruments – Company
11. (j) (1) Held-to-Maturity Financial Assets – Debentures (Quoted)
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Bank of Ceylon 2,829,938 2,830,793 2,829,938 2,830,793

Central Finance PLC 320,247 320,480 320,247 320,480
Citizens Development Business Finance PLC 100,339 100,339 100,339 100,339
Commercial Bank of Ceylon PLC 1,371,753 1,201,698 1,371,753 1,201,698
Commercial Credit & Finance PLC 14,226 14,226 14,226 14,226
DFCC Bank PLC 4,474,600 4,501,564 4,474,600 4,501,564
Hatton National Bank PLC 4,612,188 5,143,461 4,612,188 5,143,461
National Development Bank PLC 1,829,636 1,771,516 1,829,636 1,771,516
Nations Trust Bank PLC 496,437 485,890 496,437 485,890
People’s Leasing & Finance PLC 749,363 990,033 749,363 990,033
Sampath Bank PLC 5,161,228 4,185,578 5,161,228 4,185,578
Seylan Bank PLC 1,562,040 1,562,995 1,562,040 1,562,995
23,521,994 23,108,575 23,521,994 23,108,575
11. (j) (2) Loans and Receivables – Debentures (Unquoted)

As at 31 December 2017 2016 2017 2016

Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Regional Development Bank 300,132 – 300,132 –

National Savings Bank 1,001,071 1,001,072 1,001,071 1,001,072
1,301,203 1,001,072 1,301,203 1,001,072
11. (j) (3) Loans and Receivables – Term Deposits

GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Bank of Ceylon 100,093 1,739,224 100,093 1,739,224

Citizens Development Business Finance PLC 271,267 263,795 271,267 263,795
Commercial Bank of Ceylon PLC – 2,070,136 – 2,070,136
DFCC Bank PLC 3,449,214 – 3,345,214 –
Hatton National Bank PLC 95,298 193,853 42,608 150,263
National Development Bank PLC 1,770,399 516,216 1,750,399 12,200
Nations Trust Bank PLC 1,053,885 10,201 1,053,885 10,201
Pan Asia Bank PLC 2,115 25,523 2,115 25,523
People’s Bank 3,972,198 – 3,842,198 –
Regional Development Bank – 25,079 – 25,079
Sampath Bank PLC 4,376,728 3,669,119 3,913,848 3,599,119
Seylan Bank PLC 772,173 610,125 772,173 610,125
Total 15,863,370 9,123,270 15,093,799 8,505,664
11. (j) (4) Available-for-Sale Financial Assets – Quoted Debentures

GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Bank of Ceylon 2,183 2,365 2,183 2,365

Central Finance PLC 25,123 25,121 25,123 25,121
Commercial Bank of Ceylon PLC 46,603 51,068 46,603 51,068
DFCC Bank PLC 50,926 86,305 50,926 86,305
Hatton National Bank PLC 54,205 54,156 54,205 54,156
National Development Bank PLC 125,870 137,717 125,870 137,717
Nations Trust Bank PLC 126,124 134,388 126,124 134,388
People’s Leasing & Finance PLC 1,016 1,055 1,016 1,055
Sampath Bank PLC 73,986 73,644 73,986 73,644
Seylan Bank PLC 25,051 26,504 25,051 26,504
Siyapatha Finance PLC 125,005 125,005 125,005 125,005
Total 656,091 717,328 656,091 717,328
11. (j) (5) Available-for-Sale Financial Assets – Quoted Shares

GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Blue Diamonds Jewellery Worldwide Limited 2,160 3,601 2,160 3,601

Commercial Credit and Finance PLC 172,638 224,831 172,638 224,831
Merchant Bank of Sri Lanka 11 11 11 11
Investrust Wealth Management Limited 43,531 – – –
Total 218,341 228,443 174,810 228,443
11. (j) (6) Available-For-Sale Financial Assets – Unquoted Preference Shares

GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Unquoted preference shares – Castle Realty (Pvt) Limited 131,886 131,886 131,886 131,886
Total 131,886 131,886 131,886 131,886
11. (j) (7) Financial Assets at Fair Value Through Profit or Loss – Shares
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Banking, Finance and Insurance

National Development Bank PLC 14 16 14 16
Commercial Bank of Ceylon PLC 45 47 45 47
DFCC Bank PLC 223 221 223 221
Central Finance PLC 19 21 19 21
Manufacturing, Plantations
Chevron Lubricants Lanka PLC 60 79 60 79
Tokyo Cement Company PLC 77 58 77 58
Dipped Products PLC 30 30 30 30
Chemical Industries Colombo PLC 12,480 16,320 12,480 16,320
Hayleys PLC 24 28 24 28
Kotagala Plantations 1 1 1 1
Services
John Keels Holdings PLC 62 60 62 60
Aitken Spence PLC 120 145 120 145
Hemas Holdings PLC 154 121 154 121
Dialog Axiata PLC 46 37 46 37
Royal Palms Beach Hotels PLC 2 2 2 2
Asiri Surgical Hospital Holdings PLC 32 32 32 32
Ceylon Hospitals PLC 14 14 14 14
Total 13,402 17,231 13,402 17,231
12/13 Pensions, Gratuity and Other Post-Employment Benefits

Accounting Policy
(a) Pensions and Other Post-Employment Benefits
The Group operates a defined benefit pension plan, which requires contributions to be made to a separately administered fund. The
cost of providing benefits under the defined benefit plan is determined separately using the projected unit credit valuation method as
recommended by LKAS 19 – “Employee Benefits”. Actuarial gains and losses are recognised immediately in retained earnings through Other
Comprehensive Income (OCI) in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of:
zzThe date of the plan amendment or curtailment; and
zzThe date that the Group recognises restructuring-related costs.
The defined benefit asset or liability comprises the present value of the defined benefit obligation less the fair value of plan assets out of
which the obligations are expected to be settled directly.
Plan assets are assets that are held by a long-term employee benefit fund. Plan assets are not available to creditors of the Group nor can
they be paid directly to the Group.
Fair value is based on market price information and, in the case of quoted securities, it is the published market price. The value of any
defined benefit asset is restricted to the sum of any past service cost and actuarial gains and losses not yet recognised and the present
value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.
The amount recognised as defined benefit liabilities has been netted with the fair value of the plan assets of the reporting period. Any
surplus in plan assets has been measured based on the requirements of LKAS 19 – “Employee Benefits”, Para 58 and IFRIC 14 – “The Limit on
a Defined Benefit Asset, Minimum Funding Requirements and their Interaction”. However, according to the Payment of Gratuity Act No. 12
of 1983, the liability for gratuity payments to an employee arises on the completion of five years of continued service with the Group. The
provision is externally funded.
The present value of the defined benefit obligations depends on a number of factors that are determined on an actuarial basis using a
number of assumptions. Key assumptions used in determining the defined retirement benefit obligations are given in Notes 12 and 13 to
the Financial Statements. Any changes in these assumptions will impact the carrying amount of defined benefit obligations.
(b) Short-Term Benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus if the Group has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
12. Gratuity Benefit Liability/(Asset)

The amounts recognised in the Income Statement are as follows:
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Current Service Cost 37,940 36,174 37,940 36,174

Interest Cost on Benefit Obligation 116,066 86,847 116,066 86,847
Expected Return on Plan Assets (199,747) (159,419) (199,747) (159,419)
(45,741) (36,399) (45,741) (36,399)
Net actuarial gain/(loss) recognised in the other
comprehensive income (203,444) (102,956) (203,444) (102,956)
The amounts recognised in the Statement of Financial Position at the reporting date are as follows:

GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Present Value of the Defined Benefit Obligation 12. a (1,219,289) (967,216) (1,219,289) (967,216)
Fair Value of Plan Assets 12. b 2,368,961 1,664,554 2,368,961 1,664,554
Net Defined Benefit Obligation 1,149,672 697,338 1,149,672 697,338
Total Net Defined Benefit Asset 1,149,672 697,338 1,149,672 697,338
12. (a) The Movement in the Defined Benefit Liability is as Follows:

GROUP COMPANY
2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Defined Gratuity Benefit Obligation

As at 1 January 967,217 868,467 967,217 868,467
Current Service Cost 37,940 36,174 37,940 36,174
Interest Cost 116,066 86,847 116,066 86,847
Benefits Paid (64,828) (38,169) (64,828) (38,169)
Actuarial Gains/(Losses) 162,894 13,898 162,894 13,898
As at 31 December 1,219,289 967,217 1,219,289 967,217
Gratuity Liability – Subsidiaries 11,683 12,750 – –
As at 31 December 2017 and as at the end of the comparative period, the gratuity liability was actuarially valued under the Projected
Unit Credit (PUC) Method by Consultant Actuary Mr K A Pandit as required by Sri Lanka Accounting Standard (LKAS) 19 – “Employee Benefits”.
According to LKAS 19 – “Employee Benefits”, the remeasurement of the net defined benefit liability,assets, which comprise actuarial gains
and losses are recognised in Other Comprehensive Income.
12. (b) The Movement in the Plan Assets is as Follows:

GROUP COMPANY
2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
As at 1 January 1,664,555 1,594,193 1,664,555 1,594,193
Contribution Paid by Employer 610,038 – 610,038 –
Expected Return on Plan Assets 199,747 159,419 199,747 159,419

Actuarial Gains (40,550) (89,058) (40,550) (89,058)
Benefit Paid (64,828) – (64,828) –
As at 31 December 2,368,961 1,664,554 2,368,961 1,664,554
The overall expected rate of return on assets is determined based on market expectations prevailing on that date, applicable to the period
over which the obligation is to be settled.
The principal actuarial assumptions used in determining the gratuity benefit obligation for the Group’s plan assets are as follows:
COMPANY
2017 2016
Future Salary Increases 10.00% 10.00%

Discount Rate 10.50% 12.00%
Expected Rate of Return on Plan Assets 10.00% 10.00%
Retirement Age 55 Yrs 55 Yrs
Attrition Rate 1% 1%
Mortality Table IALM2006-08 IALM2006-08
Changes in the Defined Benefit Obligation and Fair Value of Plant Assets
Company
Amounts Charged to Amounts Charged Remeasurement Gains/(Losses)
Profit or Loss to Profit or Loss in Other Comprehensive Income
31 December 2017 1 January Service Net Subtotal Benefit Return on Actuarial Experience Subtotal Contribution 31 December
Group/Company 2017 Cost Interest Included in Paid Plan Assets Changes Adjustments Included in by 2017
Profit or Loss (Excluding Arising from OCI Employers
Amounts Changes in
Included in Financial
Net Interest Assumptions
Expenses)
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Defined Benefit Obligation (967,217) (37,940) (116,066) (154,006) 64,828 – (79,957) (82,937) (162,894) (1,219,289)
Fair Value of Plan Assets 1,664,554 – – – (64,828) 199,747 – (40,550) (40,550) 610,038 2,368,961
Benefit Assets/(Liability) 697,337 (37,940) (116,066) (154,006) – 199,747 (79,957) (123,487) (203,444) 610,038 1,149,672
Amounts Charged to Amounts Charged Remeasurement Gains/(Losses)

Profit or Loss to Profit or Loss in Other Comprehensive Income
31 December 2016 1 January Service Net Subtotal Benefit Return on Actuarial Experience Subtotal Contribution 31 December
Group/Company 2016 Cost Interest Included in Paid Plan Assets Changes Adjustments Included in by 2016
Profit or (Excluding Arising from OCI Employers
Loss Amounts Changes in
Included in Financial
Net Interest Assumptions
Expenses)
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Defined Benefit Obligation (868,467) (36,174) (86,847) (123,021) 38,169 – 471 (14,369) (13,898) – (967,217)
Fair Value of Plan Assets 1,594,193 – – – – 159,419 – (89,058) (89,058) – 1,664,554
Benefit Assets/(Liability) 725,726 (36,174) (86,847) (123,021) 38,169 159,419 471 (103,427) (102,956) – 697,337
Gratuity benefit asset has been excess over the gratuity benefit liability due to share investment which has share appreciation annually.
A Quantitative Sensitivity Analysis for Significant Assumptions as at 31 December 2017 is Shown Below:
Discount Rate Future Salary Increasement Rate Rate of Employee Turnover
Increase Decrease Increase Decrease Increase Decrease
Sensitivity Level 1% 1% 1% 1% 1% 1%
Impact on Defined Benefit Obligation (54,933) 62,415 62,115 (55,642) 1,768 (1,989)
Following payments are expected contributions to the defined benefit plan obligation on the future years:

2017 2016
Rs. ’000 Rs. ’000
Within the Next 12 Months 483,575 377,814

Between 2 and 5 Years 228,464 232,482
Between 5 and 10 Years 751,434 457,218
13. Pension Benefit Obligation

The Company has two defined benefit pension plans, both of which require contributions to be made to separately administered funds
namely Pension Trust Fund of Ceylinco Insurance PLC and pension fund of Ceylinco Insurance PLC.
As at 31 December 2017, and as at the end of the comparative period the gratuity liability was actuarially valued under the Projected Unit
Credit (PUC) Method by Consultant Actuary K A Pandit, as required by Sri Lanka Accounting Standard (LKAS) 19 – “Employee Benefits”.
Pension benefit obligation is valued by K A Pandit Actuarial Valuers.
According to LKAS 19 – “Employee Benefits”, the remeasurement of the net defined benefit liability,assets, which comprise actuarial gains
and losses are recognised in Other Comprehensive Income.
Remeasurement Gains/(Losses) in
31 December 2017 1 January Current Interest Subtotal Benefit Return on Recognised Actuarial Actuarial Experience Subtotal Contributions Total
Group/Company 2017 Service Cost Included in Paid Plan Assets in Income Changes Changes Adjustments Included by 31 December
Cost on Benefit Profit/Loss (Excluding Statement Arising from Arising from in OCI Employers 2017
Obligation Amounts Note Changes in Changes in
in Net Demographic Financial
Interest Assumptions Assumptions
Expenses) Rs. ’000 Rs. ’000 Rs. ’000
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Defined Benefit
Obligation (576,251) (352) (69,150) (69,502) 8,853 – (60,650) – (738) 13,066 12,328 – (624,573)
Fair Value of
Plan Assets 1,468,184 – – – (4,275) 176,182 171,907 – – (20,190) (20,190) 52,792 1,672,692
Total Recognised
Benefit
(Liability)/Asset 891,933 (352) (69,150) (69,502) 4,578 176,182 111,257 – (738) (7,125) (7,863) 52,792 1,048,119
Pension benefit asset has been excess over the gratuity benefit liability due to share investment which has share appreciation annually.
Remeasurement Gains/(Losses) in
31 December 2016 1 January Current Interest Subtotal Benefit Return on Recognised Actuarial Actuarial Experience Subtotal Contributions Total
Group/Company 2016 Service Cost on Included in Paid Plan Assets in Income Changes Changes Adjustments Included by 31 December
Cost Benefit Profit/Loss (Excluding Statement Arising from Arising from in OCI Employers 2016
Obligation Amounts Note Changes in Changes in
in Net Demographic Financial
Interest Assumptions Assumptions
Expenses)
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Defined Benefit
Obligation (454,707) (3,149) (45,471) (48,620) 4,012 – (44,608) (8,418) (49,850) (18,668) (76,936) – (576,251)
Fair Value of Plan
Assets 1,327,788 – – – (4,012) 132,779 128,766 – (41,162) – (41,162) 52,792 1,468,184
Total Recognised
Benefit
(Liability)/Asset 873,081 (3,149) (45,471) (48,620) – 132,779 84,158 (8,418) (91,012) (18,668) (118,098) 52,792 891,933
Plan Assets include investment in equity shares of Ceylinco Insurance PLC, market value amounting to Rs. 2,166,129,278/- at the reporting
date. (2016 – Rs. 2,020,997,259/- )
The principal assumptions used in determining pension and post-employment benefit obligations for the Company’s plans are
shown below:
2017 2016
Discount Rate 10.50% 12%

Rate of Return on Plan Assets Current 10.50% 10%
Salary Escalation Rate Scheme A, B & D 0% 0%
Scheme C 10% 10%
Attrition Rate 1% p.a 1% p.a
Retirement Age Scheme A, B & D 55Yrs 55Yrs
Scheme C 60 Yrs 60 Yrs
Mortality Table PA 90 PA 90
14. Reinsurance Receivables

Accounting policy
Reinsurance receivables consist of short-term balances due from reinsurers that are dependent on the expected claims and benefits arising
under the related reinsured insurance contracts. Amounts recoverable from reinsurers are estimated in a manner consistent with the
outstanding claims provision or settled claims associated with the reinsurer’s policies and are in accordance with the related reinsurance
contract. Reinsurance is recorded gross in the Statement of Financial Position unless a right to offset exists.
Impairment
Reinsurance assets are reviewed for impairment at each reporting date or more frequently when an indication of impairment arises during
the reporting year. Impairment occurs when there is objective evidence as a result of an event that occurred after initial recognition of the
reinsurance asset that the Group/Company may not receive all outstanding amounts due under the terms of the contract and the event has
a reliably measurable impact on the amounts that the Group/Company will receive from the reinsurer. The impairment loss is recorded in
the Income Statement.
Derecognition
Reinsurance assets are derecognised when the contractual rights are extinguished or expired or when the contract is transferred to an
another party.
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Reinsurance Receivable – Swiss RE 83,742 27,268 83,742 27,268

Reinsurance Receivable – Munich RE 31,268 14,030 31,268 14,030
Total Reinsurance Receivable 115,010 41,298 115,010 41,298
The carrying amounts disclosed above is in respect of the reinsurance of insurance contracts approximate fair value at the reporting date.
The amount recognised as reinsurance recievable is the amount due from reinsurers only for less than 3 months.
15. Taxation

Accounting Policy
(a) Income Tax Expense
Income tax expense comprises current and deferred tax.
(i) Current Tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date and any adjustment to tax payable in respect of previous years.
The Inland Revenue Act No. 10 of 2006 and amendments thereto are applied in determining the taxable income/loss of the Company and
its subsidiaries.
Business income of Ceylinco Health Care Services Limited is taxable under concessionary rates at 12% and investment income is taxed at 28%.
(ii) Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and amounts used for taxation purposes. Deferred tax is not recognised for:
zzTemporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss;
zzTemporary differences related to investments in subsidiaries, associates and jointly-controlled entities to the extent that the
Group/Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not
reverse in the foreseeable future; and
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group/Company expects, at the
end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally-enforceable right to offset current tax liabilities and assets, and they relate to
taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax
losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:
zzWhen the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit
or loss.
zzIn respect of deductible temporary differences associated with investments in subsidiaries, equity accounted investee and interests in
joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are
reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the
deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the
liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside Income Statement is recognized outside Income Statement. Deferred tax items are
recognised in correlation to the underlying transaction either in Other Comprehensive Income or directly in equity.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be
recognised subsequently if new information about facts and circumstances changed.
(iii) Withholding Tax on Dividends

Withholding tax that arises from the distribution of dividends by the Company is recognised at the time the liability to pay the related
dividend is recognised.
15. (a) Tax Receivable

GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
As at 1 January 1,044,662 1,183,836 1,042,571 1,183,836

Income Tax Change (764,188) (603,163) (747,211) (603,163)
Notional Tax/WHT Recognised 500,591 461,897 492,180 461,897
Payments Made on Account During the Year 8,075 2,091 – –
As at 31 December 789,139 1,044,662 787,539 1,042,571
Included in the Income Tax Recoverable is an amount of Rs. 787,539,483/- recognised as Notional Tax Credit available in the life business.
15. (b) Deferred Tax Assets – Group

Consolidated Other Consolidated Consolidated Statement of
Comprehensive Income Income Statement Financial Position
Statement
As at 31 December 2017 2016 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Losses carried forward – – – 67,257 – –

Temporary Difference from
Retirement Benefit Liability –
Gratuity 45,610 3,891 (116,190) (31,821) 341,401 211,785
Pension (4,734) – (170,147) – 174,880 –
Property Plant and Equipment – – (121,937) 110,009 (308,466) (428,927)
Revaluation reserve (68,134) 68,134 – – – (44,704)
Available for sale financial assets – (47,106) – – – –
Temporary Difference from Land
(Capital gain) – – 26,226 – (26,226) –
Share of Profit of the Associate – – 138,963 – (138,963) –
Deferred Tax Expense/(Income) (27,257) 24,919 (239,371) 145,445 – –
Deferred Tax Assets – – – – 181,589 –
Deferred Tax Liabilities – – – – (176,847) (261,847)
15. (c) Total Deferred Tax Liability

GROUP
2017 2016
Rs. ’000 Rs. ’000
As at 1 January 261,847 91,483

Deferred Tax Assets Recognised for Ceylinco Life Insurance Limited 181,589 –
Amounts Recorded in the Income Statement (239,371) 145,445
Amounts Recorded in Other Comprehensive Income (27,257) 24,919
Share of Profit of Associate 138,963 –
As at 31 December 176,807 261,847
15. (d) Deferred Tax Asset – Company

Consolidated Other Consolidated Consolidated Statement of
Comprehensive Income Income Statement Financial Position
Statement
As at 31 December 2017 2016 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Losses Carried Forward – – – 44,803 – –

Gratuity 45,610 3,891 (116,190) (31,541) 341,401 270,821
Pension (4,734) – (170,147) – 174,880 –
Property, Plant and Equipment – – (121,937) 117,695 (308,466) (430,403)
Revaluation Reserve (68,134) 68,134 – – – (68,134)
Available-for-sale Financial Assets – (47,106) – – – –
Temporary Difference from Land
(Capital Gain) – – 26,226 – (26,226) –
Deferred Tax Expense/(Income) (27,257) 24,919 (382,048) 130,956 – –
Deferred Tax (Asset)/Liability – – – – 181,589 (227,716)
15.(e) Total Deferred Tax (Assets)/Liability

COMPANY
2017 2016
Rs. ’000 Rs. ’000
As at 1 January 227,716 71,840

Amounts Recorded in the Income Statement (382,048) 130,956
Amounts Recorded in Other Comprehensive Income (27,257) 24,919
As at 31 December (181,590) 227,716
A deferred tax asset is recognised for a tax loss carried forward only to the extent that realisation of the related tax benefit is probable.
The Inland Revenue Act No. 24 of 2017 is applied in determining the deferred tax asset/liability of the Group.
Deferred tax assets are recognised in respect of tax losses to the extent that it is probable that future taxable profits will be available
against which such tax losses can be utilised.
16. Loans to Policyholders

Policyholder loans are granted up to 90% of the surrender value of a Life Insurance Policy at a rate equivalent to market rate. Policyholder
loans are initially measured at fair value of loan amount granted and subsequently measured at the amortised cost. If the policyholder dies
before the full repayment of the loan, the loan balance is deducted from the death benefit. Policyholder loans are reviewed for impairment
at each reporting date. Loans receivable as at reporting date as follows:
16. (a) Movement of Policy Loans

GROUP COMPANY
2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
As at 1 January 1,378,954 1,335,634 1,378,954 1,335,634

Loans Granted During the Period 1,037,829 883,372 1,037,829 883,372
Repayment During the Period (786,437) (840,052) (786,437) (840,052)
Total Policyholder Loans 1,630,346 1,378,954 1,630,346 1,378,954
16. (b) Fair Value of Loans to Life Policyholders

The fair value of the policyholder loans are equal to its carrying value as those are given at competitive market rates.
16. (c) Concentration Risk of Loans to Life Policyholders

There is lower concentration of credit risk with respect to policyholders, as the Company has a large number of dispersed receivables. The
total receivable of the loan, including interest due and accrued, exceeds the cash surrender value, the policy terminates and becomes void.
The Company has a first lien on all policies which are subject to policy loans. This mitigates the Company’s credit exposure on policy loans.
16. (d) Impairment of Loans to Life Policyholders

The Board of Directors has assessed the potential impairment loss of loans to life policyholders as at 31 December 2017. Based on the
assessment, no impairment provision is required to be made in the Financial Statements as at the reporting date in respect of loans to life
policyholders
17. (e) Number of Policy Loans

Number of policy loans due as at 31 December 2017 was 43,159 (2016 – 43,715).
16. (f) Collateral Details

The Company does not hold any collateral as security against potential default by policyholders other than surrender value.
17. Other Assets

Accounting Policy – Inventories
Inventories include all consumable items and are measured at the lower of cost and net realisable value. Cost is generally determined by
reference to weighted average cost. Net realisable value is the estimated market price in the ordinary course of business less any estimated
expense to sell. The cost of the inventories include all expenses incurred in bringing inventories to the present location and condition.
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Advances, Deposits and Prepayments 174,292 134,791 137,002 109,188

Inventories 59,597 65,517 59,597 62,853
Deferred Staff Benefits 162,437 127,287 162,437 127,287
Other Receivables – 15,784 – 15,784
396,326 343,380 359,035 315,112
18. Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand and cash at bank. Bank overdrafts that are repayable on demand and form an integral
part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the Statement of Cash
Flows.
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Cash in Hand and at Bank 894,540 600,104 883,303 584,256

Bank Overdraft (365,414) (245,142) (349,745) (230,080)
Total Cash and Cash Equivalents 529,126 354,962 533,558 354,176
The carrying amounts disclosed above reasonably approximate fair value at the Reporting date.
19. EQUITY
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Note Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Ordinary Shares – Voting 19. (a) 500,001 500,001 500,001 500,001

Other Reserves 19. (b) 21,761,633 12,792,170 20,146,898 11,411,829
Total Equity 22,261,633 13,292,171 20,646,898 11,911,830
19. (a) Ordinary Shares - Voting (Stated Capital)

Accounting Policy
Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction
from equity, net of any tax effects.
GROUP COMPANY
2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
As at 1 January 500,001 500,001 500,001 500,001

50,000,050 Ordinary Shares Voting 500,001 500,001 500,001 500,001
All issued shares are fully-paid. There is one class of ordinary shares. All shares issued carry equal voting rights. The holders of ordinary
shares – voting are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the
Company. The holders of ordinary shares – voting are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at meetings of the Company.
19. (b) Other Reserves

GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Retained Earnings 10,628,715 5,165,535 9,278,621 4,003,754

Available-for-Sale Reserve 46,196 24,212 (60) (60)
Revaluation Reserve 318,887 290,772 100,501 96,484
Restricted Regulatory Reserve 19. (d) 3,456,184 – 3,456,184 –
Special Reserve 19. (c) 7,311,651 7,311,651 7,311,651 7,311,651
21,761,633 12,792,170 20,146,898 11,411,829
19. (c) Special Reserve

GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Special Reserve 7,311,651 7,311,651 7,311,651 7,311,651

7,311,651 7,311,651 7,311,651 7,311,651
This special reserve represents the value (net book value) of net assets transferred from Ceylinco Insurance PLC on 1 June 2015 as a result
of the segregation.
19. (d) Restricted Regulatory Reserve

GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Restricted Regulatory Reserve 3,456,184 – 3,456,184 –

3,456,184 – 3,456,184 –
Restricted Regulatory reserve is created as a result of One-Off Surplus generated due to change in valuation method from “Net Premium
Valuation” to “Gross Premium Valuation” as specified in Direction 16, issued by IRCSL on 20 March 2018, for identification and treatment of
One-Off Surplus. Complying with the same, the transfer made from policyholders’ to shareholders' fund is limited to surplus generated from
other than participating business, whereas the One-Off surplus generated from the participating business will be maintained within the
participating fund.
The basis for computation of One-Off Surplus is in line with the Direction issued by IRCSL titled “Directions on the Identification and
Treatment of One-Off Surplus” dated 20 March 2018.
The Company’s One-Off Surplus is equal to the minimum One-Off Surplus prescribed in the recommendations in the Direction issued by the
IRCSL. The basis is same for both participating business and other than participating business.
The One-Off Surpluses in amounts, created for participating business and other than participating business are as follows:
Line item One-Off Surplus

Rs. '000
Participating Business 2,736,685

Other than Participating Business 3,456,184
Tabarru Reserve 1,920
Total 6,194,789
Distribution of One-Off Surplus to Shareholders, held as part of the Restricted Regulatory Reserve, is subject to meeting governance
requirements stipulated by the IRCSL and can only be released upon receiving approval from IRCSL. The One-Off Surplus in the SHF will
remain invested in assets in below Note as per Directions of IRCSL:
One-Off surplus of participating business amounted to Rs. 2,736,685,339/- will be held within the participating fund as part of the
unallocated valuation surplus and may only be transferred to the shareholders by means of bonuses to policyholders in line with Section 38
of the “Regulation of Insurance Industry Act No. 43 of 2000”.
The composition of the assets, which will be held to support the Restricted Regulatory Reserves (One-Off Surplus for other than participating
business) are disclosed below at their market values:
Assets Market Value

Rs. ’000
Government Debt Securities 2,761,756

Deposits
Deposits with a licensed commercial bank
People’s Bank 488,617
DFCC Vardhana Bank PLC 205,811
Total 3,456,184
20. Insurance Contract Liabilities

Accounting Policy
(a) Classification of Insurance Contracts
SLFRS 4 requires contracts written by insurers to be classified as either “insurance contracts” or “investment contracts” depending on the
level of insurance risk transferred.
Insurance contracts are contracts under which one party (the Insurer) accepts significant insurance risk from another party (the policyholder)
by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. The
classification of contracts identifies both, the insurance contracts that the Company issues and reinsurance contracts that the Company holds.
Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its lifetime, even if the
insurance risk reduces significantly during this period, unless all rights and obligations are extinguished or expired. Investment contracts can,
however, be reclassified as insurance contracts after inception, if insurance risk becomes significant. Insurance and investment contracts are
further classified as being either with or without discretionary participating features (DPF).
(b) Discretionary Participating Features (DPF)

DPF is a contractual right to receive, as a supplement to guaranteed benefits, additional benefits that are –
zzlikely to be a significant portion of the total contractual benefits;
zzthe amount or timing of which is contractually at the discretion of the issuer; and that are contractually based on:
zzthe performance of a specified pool of contracts or a specified type of contracts;
zzrealised and or unrealised investment returns on a specified pool of assets held by the issuer; and
zzthe profit or loss of the Company, fund or other entity that issues the contract.
IRCSL regulations and the terms and conditions of these contracts set out the bases for the determination of the amounts on which the

additional discretionary benefits are based (the DPF eligible surplus) and within which the Company may exercise its discretion as to the
quantum and timing of their payment to contract holders.
At least 90% of the eligible surplus must be attributed to contract holders as a group (which can include future contract holders) and
the amount and timing of the distribution to individual contract holders is at the discretion of the Company, subject to the advice of the
Appointed Actuary. All DPF liabilities including unallocated surpluses, at the end of the reporting period are held within insurance contract
liabilities, as appropriate.
(c) Unit-Linked Contracts

Unit-linked contracts are those contracts that do not meet the definition of insurance or investment contracts with discretionary participating
features. For these Unit-linked contracts, the liabilities are valued at current unit value, i.e., on the basis of the fair value of the financial
investments backing those contracts at the reporting date together with rights to future management fees.
(d) Life Insurance Contract Liabilities

These liabilities are calculated as the total of best estimate liability and a risk margin for adverse deviation. The best estimate liabilities
are measured by using the gross premium method. The liability is determined as the sum of the discounted value of the expected future
benefits, claims handling and policy administration expenses, policyholder options and guarantees, investment income from assets
backing such liabilities and investment management expenses, which are directly related to the contract, less the discounted value of the
expected premiums that would be required to meet the future cash outflows, based on the valuation assumptions used, charges and fees.
Adjustments to the liabilities at each reporting date are recorded in the Statement of Comprehensive Income in “Increase in life insurance
contract liabilities”.
The liability is released when the contract expires, discharged or cancelled.
At each reporting date, an assessment is made of whether the recognised life insurance liabilities are adequate, by using an existing liability
adequacy test in accordance with SLFRS 4.
(e) Liability Adequacy Test (LAT)

At each reporting date, an assessment is made of whether the recognised life insurance liabilities are adequate by using an existing
liability adequacy test as laid out under SLFRS 4. The liability value is adjusted to the extent that it is sufficient to meet future benefits
and expenses. In performing the adequacy test, current best estimates of future contractual cash flows, including related cash flows such
as claims handling and policy administration expenses, policyholder options and guarantees, as well as investment income from assets
backing such liabilities, are used. A number of valuation methods are applied, including discounted cash flows to the extent that the test
involves discounting of cash flows, the interest rate applied based on Management’s prudent expectation of current market interest rates.
Any deficiency shall be recognised in the Income Statement by setting up a provision for liability adequacy.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Insurance Contract Liability – Long term 20. (h) 81,726,139 77,927,494 81,723,759 77,925,114
Insurance Contract Liability – Unit linked 315,943 265,685 315,943 265,685
Insurance Contract Liability – Takaful 16,970 10,563 16,970 10,563
Individual Investment Fund 94,233 56,881 94,233 56,881
Total Insurance Contract Liabilities 82,153,285 78,260,623 82,150,905 78,258,243
The Company's actuaries have performed Liability Adequacy Test in accordance with SLFRS – 4 “Insurance Contracts Requirements”.
The valuation of the Life Insurance business as at 31 December 2017 was carried out by our Consulting Actuary, Mr Mark Birch, FIA, on
behalf of Willis Towers Watson. In the opinion of the Consulting Actuary, proper reserves have been provided for all known liabilities in
respect of the Life Insurance business and the Company has adequate financial resources to cover its capital requirements in accordance
with the Solvency Margin (risk-based capital) Rules 2015 dated 15 December 2015.
Following the actuarial valuation as at 31 December 2017 the Consulting Actuary has approved a transfer of Rs. 4.5 Bn. (2016 – Rs. 2.3 Bn.)
from the Life Fund to the Shareholder’s Account.
The Company’s Capital Adequacy Ratio (CAR) as at 31 December 2017 is 375% and is well above the minimum requirement of 120%.
Key assumptions
The Company exercises a significant judgement in determining the policy liabilities and in selecting assumptions. The key assumptions
for which the liability value can be sensitive are mortality, morbidity, expenses, discount rates, lapse and surrender rates. The choice of
assumptions depends on the past and current experience of the Company and other available information. Assumptions on future expenses
are based on current expense levels, adjusted for expected expense inflation, if appropriate. Lapse and surrender rates are based on the
Company’s historical experience. Discount rates are based on current industry risk free rates. All these assumptions are within the guidelines
issued by the IRCSL.
Mortality rate
Mortality assumptions are based on standard mortality tables.
Lapse rates
Lapses occur due to non-payment of premiums before the policy acquires a surrender value. Surrenders occur due to termination of
policies by policyholders after acquiring a surrender value.
Risk-Free Rate
Risk-free discount rate is used to discount the cash flows for corresponding durations for guaranteed benefits of non-participating and
participating insurance fund policies. The applicable risk free rates are shared by the IRCSL every quarter.
Fund-Based Yield
Fund-based yield was used in the participating fund to discount the cash flows for corresponding durations where total benefits are
considered.
Management Expense
The assumptions for Management expenses are determined based on the expense investigation into the expenses of the Company over
the last two calendar years. Each expense is classified as acquisition/maintenance/termination and then classified as fixed/variable.
20. (f) Sensitivity of the Value of Insurance Liabilities for Change in Assumptions

Sensitivity of the Value of Insurance Liabilities Changes in Impact on Net Best
31 December 2017 Assumptions Estimate Liability
Expenses +10% 1.9%

Mortality +10% 0.4%
-10% -0.4%
20. (g) Nature and Extent of Risk Arising From Insurance Contracts
Company determines its capital requirement in accordance with the Solvency Margin (Risk-Based Capital) Rules 2015 dated 15 December
2015. Best estimate assumptions required to be used by the regulation to assess Company's capital adequacy have been reviewed by
the Appointed Actuary and updated as specified in RBC rules. Mortality, expense and lapse assumptions have been estimated based on
Company's past experience. Morbidity assumption has been determined based on reinsurance risk premium rates.
According to RBC rules, the concentration risk is considered under risk charges. Company calculates the concentration risk capital charge
as specified in the said rules in determining its capital requirement. For contracts where death is the insured risk, the factors that can
significantly impact Company's expected claim patterns are epidemics, natural disasters and changes in factors affecting life style such as
smoking and exercise habits. Company manages its insurance risk mainly through reinsurance and underwriting. The underwriting strategy
used by the Company is intended to ensure a better selection of risks in terms of level of insured benefit and type of risk. Company
maintains a retention limit of Rs. 1.5 Mn. on any single life insured. Substandard lives are charged higher insurance premiums based on
their health conditions and types of occupation. Further, with regard to computing the total liability, the mortality rates were stressed by
10% upward and as a result, the overall liability was increased by 0.4%.
20. (h) Life Insurance Contract Liabilities of Company

Insurance Contract Insurance Contract Total
Liabilities Liabilities Gross Insurance
with DPF without DPF Contract Liabilities
Rs. ’000 Rs. ’000 Rs. ’000
As at 1 January 2017 41,725,814 36,199,300 77,925,114

Gross Premium Income 6,390,098 9,352,874 15,742,972
Premiums Ceded to Reinsurers (17,123) (404,930) (422,052)
Liabilities Paid for Death, Maturities, Surrenders, Benefits and Claims (3,053,219) (3,633,761) (6,686,980)
Investment Return 4,909,644 4,471,213 9,380,857
Reinsurance Commission Income 4,689 73,621 78,310
Other Operating and Admin Expenses Including Income Tax (2,057,350) (2,494,775) (4,552,125)
Underwriting and Net Acquisition Cost (864,329) (918,150) (1,782,479)
Net Transfer to Shareholder (204,758) (4,295,242) (4,500,000)
Change in Contract Liabilities Due to Transfer of One-Off Surplus – (3,456,184) (3,456,184)
Revaluation Reserve and AFS Reserve Transferred to Life Fund (10,847) 7,174 (3,674)
As at 31 December 2017 46,822,618 34,901,141 81,723,759

Insurance Contract Insurance Contract Total

Liabilities Liabilities Gross Insurance
with DPF without DPF Contract Liabilities
Rs. ’000 Rs. ’000 Rs. ’000
As at 1 January 2016 36,485,976 31,525,560 68,011,536

Gross Premium Income 6,048,253 8,850,822 14,899,075
Premiums Ceded to Reinsurers (16,458) (357,156) (373,614)
Liabilities Paid for Death, Maturities, Surrenders, Benefits and Claims (3,181,160) (3,470,522) (6,651,682)
Investment Return 4,187,682 3,702,255 7,889,937
Reinsurance Commission Income 3,854 81,509 85,362
Other Operating and Admin Expenses Including Income Tax (1,694,640) (1,792,732) (3,487,372)
Underwriting and Net Acquisition Cost (779,234) (884,584) (1,663,818)
Net Transfer to Shareholder (116,530) (2,183,470) (2,300,000)
Revaluation Reserve and AFS Reserve Transferred to Life Fund 788,072 727,618 1,515,690
As at 31 December 2016 41,725,814 36,199,300 77,925,114
21. Financial Liabilities

Accounting Policy
(i) Initial Recognition and Measurement
Financial liabilities within the scope of LKAS 39 are classified as Financial Liabilities at Fair Value through Profit or Loss, loans and borrowings
as appropriate. The Group determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value plus, in the case of loans and borrowings, directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, bank overdrafts, loans and borrowing and amounts due to equity accounted
investees.
(ii) Subsequent Measurement

The measurement of financial liabilities depends on their classification as described below:
(a) Financial Liabilities at Fair Value through Profit or Loss

Financial liabilities at Fair Value through Profit or Loss include financial liabilities held for trading and financial liabilities designated upon
initial recognition as at Fair Value through Profit or Loss. Financial liabilities are classified as held for trading if they are acquired for the
purpose of selling in the near term. Gains or losses on liabilities held for trading are recognised in the Statement of Comprehensive Income.
Financial liabilities designated upon initial recognition at Fair Value through Profit and Loss are so designated at the initial date of
recognition, if and only if the criteria of LKAS 39 are satisfied.
(b) Loans and Borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains
and losses are recognised in the Statement of Comprehensive Income when the liabilities are derecognised as well as through the EIR
amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included in finance costs in the Statement of Comprehensive Income.
(iii) Derecognition of Financial Liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the
recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Comprehensive Income.
(iv) Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Consolidated Statement of Financial Position if,
and only if, there is a currently enforceable legal right to offset derecognised amounts and there is an intention to settle on a net basis,
or to realise the assets and settle the liabilities simultaneously. Income and expenses will not be offset in the Consolidated Statement of
Comprehensive Income unless required or permitted by any accounting standard or interpretation, as specifically disclosed in the accounting
policies of the Group.
21. (a) Other Financial Liabilities
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Repo Borrowings – 2,980,013 – 2,980,013

– 2,980,013 – 2,980,013
21. (b) Interest-Bearing Borrowings
GROUP COMPANY
2017 2016 2017 2016

Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
As at 1 January 1,000,000 – 1,000,000 –

Addition during the year – 1,000,000 – 1,000,000
Settlement during the year (1,000,000) – (1,000,000) –
As at 31 December – 1,000,000 – 1,000,000
22. Reinsurance Payables

Accounting policy
Reinsurance liabilities represent balances due to reinsurance companies. Amounts payable are estimated in a manner consistent with the
related reinsurance contract. Reinsurance assets or liabilities are derecognised when the contractual rights are extinguished or expired or
when the contract is transferred to an another party.
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Reinsurance Payables of Insurance Contracts 165,715 25,837 165,715 25,837

165,715 25,837 165,715 25,837
23. Trade and Other Payables

Accounting policy
(a) Insurance Payables
Insurance payables are recognised when due and measured on initial recognition at the fair value of the consideration payable less
directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest
rate method.
Insurance payables are derecognised when the obligation under the liability is discharged, cancelled or expired.
(b) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of
the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as
a separate asset, but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the Income
Statement net of any reimbursement.
GROUP COMPANY
As at 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Policyholders Payment in Advance 570,990 486,483 570,990 486,483

Agency Commission Payable 219,392 197,216 219,392 197,216
Government Levies 5,820 1,258 – –
Trade Creditors and Accrued Expenses 1,988,164 1,069,755 1,925,707 1,042,332
Death Claims Payable 65,157 98,340 65,157 98,340
2,849,523 1,853,052 2,781,246 1,824,372
The carrying amounts disclosed above reasonably approximate fair value at the reporting date.
All amounts are payable within one year.
24. Net Premiums

24. (a) Gross premiums
Accounting policy
Gross recurring premiums are recognised as revenue when receivable from the policyholder. Premiums received in advance are not
recognised as revenue but as a liability until the premiums become due. For single premium business, revenue is recognised on the date
on which the policy is effective.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Life Insurance 24.( c) 15,765,392 15,027,469 15,765,484 15,027,600

Gross Written Premiums 15,765,392 15,027,469 15,765,484 15,027,600
24. (b) Premiums ceded to reinsurers on insurance contracts

Accounting Policy
Gross reinsurance premiums are recognised as an expense on the earlier of the date when premiums are payable or when the policy
becomes effective.
GROUP COMPANY
For the year ended 31 December 2017 2016 2017 2016
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Life Insurance 422,217 373,829 422,217 373,829

Premiums Ceded to Reinsurers 422,217 373,829 422,217 373,829
24. ( c) Life Insurance Premium
COMPANY
For the year ended 31 December 2017 2016
Rs. ’000 Rs. ’000
New Businesses 3,530,010 3,537,775

Single Premium 2,398,444 2,659,154
Renewal Premium 9,395,987 8,634,272
Group Life Premium 441,043 196,399
Total 15,765,484 15,027,600
COMPANY
Rs. ’000 Rs. ’000
24. (d) Annualised New Business Life Premium 4,318,763 3,820,601

24. ( e) Revenue From Subsidiaries

COMPANY
Rs. ’000 Rs. ’000
Ceylinco Health Services Limited

Packages 296,650 290,762
Tests 43,399 46,009
Registration Fees 1,147 2,133
341,196 338,904
Serene Resorts
Resident Income 161 –
161 –
Consolidation Adjustments (12,440) (6,669)

Total Revenue from Subsidiaries 328,917 332,235
25. Fees and Commission Income

Accounting Policy
Reinsurance Commission Income
Commission received or receivable in respect of premium paid or payable to a Reinsurer. Reinsurance commission income on outwards
reinsurance contracts are recognised as revenue when receivable.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Reinsurance Commission Income 78,310 85,362 78,310 85,362

Other Fees 48,819 35,037 48,819 35,037
Total Fees and Commission Income 127,129 120,399 127,129 120,399
26. Investment Income

Accounting Policy
Finance Income
Finance income comprises interest income on funds invested (including available–for–sale financial assets) and dividend income. Interest
income is recognised in the Income Statement as it accrues and is calculated by using the Effective Interest Rate (EIR) Method. Fees
and commissions that are an integral part of the effective yield of the financial asset or liability are recognised as an adjustment to the
effective interest rate of the instrument.
Dividend Income
Dividend income is recognised when the Group’s right to receive the payment is established.
Rental Income

Rental income from property is recognised in profit or loss on a straight line basis over the term of the lease.
Other Income
Other income comprises fees charged for policy administration services, and miscellaneous income.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Rental Income from Investment Properties 74,438 70,032 76,147 72,101

Financial Assets at Fair Value Through
Profit or Loss (Held for Trading Purposes) – – – –
Interest Income 269,651 55,084 268,986 55,084
Held–to–Maturity Financial Assets Interest Income 7,517,873 6,500,670 7,517,873 6,500,670
Available–for–Sale Financial Assets
Interest Income 304,422 88,665 304,422 88,665
Dividend Income 10,152 60,140 68,843 60,140
Loans and Receivables Interest Income 1,700,350 1,387,839 1,612,781 1,370,558
Interest Income from Staff Loan 17,749 33,568 17,749 33,568
Total Investment Income 9,894,635 8,195,998 9,866,801 8,180,786
27. Realised Gains

Accounting Policy
Realised gains and losses recorded in the Income Statement include gains and losses on sale of financial assets and on disposal of property,
plant and equipment. Gains and losses on the sale of investments are calculated as the difference between net sales proceeds and the
original or amortised cost and are recorded on occurrence of the sale transaction.
Gains and losses on disposal of property, plant and equipment are calculated as the difference between net sales proceeds and the carrying
amount on the date of disposal.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Property, Plant and Equipment
Realised Gains 16,080 (5,104) 16,080 (9,558)

Available–for–Sale Financial Assets – – – –
Realised Gains
Debt Securities 23,341 4,275 23,341 4,275
Realised Losses
Equity Securities – – – –
Total Realised Gains for Available–for–Sale Financial Assets 23,341 4,275 23,341 4,275
Total Realised Gains 39,421 (829) 39,421 (5,283)
28. Fair Value Gains and Losses

Accounting Policy
Fair value gains and losses recorded in the Income Statement on investments include fair value gains and losses on financial assets at fair
value through profit or loss, and on investment property.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Fair Value Gains on Investment Properties – 214,449 – 396,829

Fair Value Gains on Financial Assets at Fair Value Through Profit or Loss
(Held for Trading Purposes) 215,095 73,194 215,095 73,194
Total Fair Value Gains and Losses 215,095 287,643 215,095 470,023
29. Net Benefits and Claims

Accounting Policy
Gross Benefits and Claims Expense
Gross benefits and claims for life insurance contracts include the cost of all claims arising during the year, including internal and external
claims handling costs that are directly related to the processing and settlement of claims and policyholder bonuses. Death claims and
surrenders are recorded on the basis of notifications received. Maturities, annuity payments and interim payments are recorded when due.
Reinsurance Claims Recoveries

Reinsurance claims are recognised when the related gross insurance claim is recognised according to the terms of the relevant contract.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
29. (a) Gross Benefits and Claims Paid 29. (e) 6,883,413 6,800,076 6,884,013 6,800,076
29. (b) Claims Ceded to Reinsurers 29. (e) (197,033) (148,394) (197,033) (148,394)
29. (c) Gross Change in Contract Liabilities 7,258,502 8,397,889 7,258,502 8,397,889
29. (d) Change in Contract Liabilities Due to Transfer
of One-Off Surplus (3,456,184) – (3,456,184) –
Net Benefits and Claims 10,488,698 15,049,571 10,489,299 15,049,571
According to Direction No. 16 – Identification and Treatment of One-off Surplus, issued by the Insurance Regulatory Commission of Sri Lanka
(IRCSL), life insurance companies were directed to transfer the One-off Surplus attributable to other than participating business to the
Shareholders' Fund as at the financial year ending 31 December 2017. This transfer has been presented in the Statement of Comprehensive
Income as “Change in contract liabilities due to transfer of One-off surplus”, which amounts to Rs. 3,456,184,283/-. As a result of this, the
profit for the year increased by the amount of the One-off Surplus and it is accumulated in “Restricted Regulatory Reserve”, presented in the
Statement of Financial Position.
The Group/Company has presented its financial highlights and financial ratios both with and without the impact of the One-off Surplus
Transfer, wherever applicable, in order to provide a clearer understanding to the users of the Financial Statements.
29. (e) Gross Claims and Benefits (Excluding Life Fund Increase)

GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Claims – Death, Disability and Hospitalisation 782,929 647,858 783,529 647,858

Policy Maturities 3,900,156 4,220,388 3,900,156 4,220,388
Interim Payments on Anticipated Endowment Plans 783,377 750,286 783,377 750,286
Surrenders 1,127,385 907,419 1,127,385 907,419
Encashment of Bonus to Policyholders
Cash and Loyalty Bonus Expenses 266,092 260,584 266,092 260,584
Annuities 23,473 13,541 23,473 13,541
6,883,413 6,800,076 6,884,013 6,800,076
Share of Claim (197,033) (148,394) (197,033) (148,394)
Life Insurance Net Claims and Benefits 6,686,380 6,651,682 6,686,980 6,651,682
30. Acquisition Costs

Accounting Policy
Commission expense is charged to the period in which it is incurred. Commission payable on accrued premium is recognised to the extent
that these costs are recoverable out of future premiums. All expenses vary with, and are primarily related to, the acquisition of new
insurance contracts.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Fees and Commission Expenses 1,782,479 1,686,858 1,782,479 1,693,985

1,782,479 1,686,858 1,782,479 1,693,985
31. Other Operating and Administrative Expenses

Accounting Policy
Expenditure Recognition
Expenses are recognised in the Income Statement on the basis of a direct association between the cost incurred and the earning of specific
items of income. All expenditure incurred in the running of the business and in maintaining the property, plant and equipment in a state of
efficiency has been charged to the Income Statement.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Amortisation of Intangible Assets 2,951 1,093 2,847 989

Depreciation on Property and Equipment 275,010 269,947 196,765 201,669
Other Operating Expenses 1,119,812 982,354 1,104,928 986,800
Auditors’ Remuneration 5,701 4,495 5,288 4,098
Employee Benefits Expense 31. (a) 1,834,240 1,425,052 1,761,122 1,364,300
Selling Expenses 465,520 371,290 453,311 370,147
Legal Expenses 8,234 9,259 8,234 9,259
Total Other Operating and
Administrative Expenses 3,706,968 3,063,490 3,532,496 2,937,262
31. (a) Employee Benefits Expense

GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Wages and Salaries Including Bonus and Incentives 1,752,703 1,250,963 1,679,585 1,206,053
Employees' Provident Fund 95,642 94,504 95,642 89,114
Employees' Trust Fund 23,910 23,627 23,910 22,279
Defined Gratuity Benefit and Pension Costs (45,741) 30,455 (45,741) 27,838
Other Staff-Related Cost 7,726 25,504 7,726 19,017
Total Employee Benefits Expense 1,834,240 1,425,052 1,761,122 1,364,300
32. Finance Costs

Accounting Policy
Finance cost mainly includes the charges and commission paid on financial services provided by financial institutions, particularly
bank charges.
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Interest Expense 13,244 9,934 12,005 9,915

Total Finance Cost 13,244 9,934 12,005 9,915
33. Income Tax Expense

Accounting Policy
Income tax expense comprises current and deferred tax.
(a) Current Tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date and any adjustment to tax payable in respect of previous years.
The Inland Revenue Act No. 10 of 2006 and amendments thereto are applied in determining the taxable income/loss of the Company and
its subsidiaries.
Subsidiaries of the Company, are taxable under concessionary rates. [Please refer Note 33 (e)]
(b) Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and amounts used for taxation purposes. Deferred tax is not recognised for:
zzTemporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss;
zzTemporary differences related to investments in subsidiaries, associates and jointly-controlled entities to the extent that the Company
is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable
future; and
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Company expects, at the end of
the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to
taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax
losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except;
zzWhen the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit
or loss.
zzIn respect of deductible temporary differences associated with investments in subsidiaries, equity accounted investee and interests in
joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are
reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the
deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the
liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside Income Statement is recognised outside Income Statement. Deferred tax items are
recognised in correlation to the underlying transaction either in Other Comprehensive Income or directly in equity.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be
recognised subsequently if new information about facts and circumstances changed.
Uncertainties exist with respect to the interpretation of complex tax regulation, changes in tax laws and the amount and timing of future
taxable income. Given the long-term nature and the complexity of existing contractual agreements, differences arising between the
actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and
expense already recorded. The Group establish provisions, based on reasonable estimates, for possible consequences of audits by the tax
authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience of
previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences
of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the Group
companies.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which
the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be
recognised, based on upon the likely timing and the level of future taxable profits together as with future tax planning strategies.
The major components of income tax expense for the years ended 31 December 2017 and 2016 are:
33. (c) Current Year Tax Charge

GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Current Tax
Income Tax 33 (c) 764,188 503,199 747,211 503,199
(Over)/Under Provision in Respect of Previous year (28,925) 26,819 (25,054) 26,819
WHT Refund – 3,712 – 3,712
Total Current Tax 735,264 533,730 722,158 533,729
Deferred Tax
Origination of Temporary Differences 15 (b) & (d) (239,372) 146,906 (382,048) 130,956
Total Income Tax Expense 495,892 680,635 340,109 664,686
33. (d) Tax Recorded in Other Comprehensive Income

GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Deferred Tax 37 (27,257) 9,053 (27,257) 9,053

Total Tax Charge to Other Comprehensive Income (27,257) 9,053 (27,257) 9,053
33. (e) Reconciliation of Tax Charge

Company
A reconciliation between income tax expense and the product of accounting profit multiplied by the statutory tax rate is as follows:

Rs. ’000 Rs. ’000
Accounting Profit Before Tax 9,807,535 3,743,727

Less – Income Not a Part of Taxable Income
Net Premium Income (15,765,484) (15,027,600)
Non–Investment Income (127,129) (276,396)
Add – Benefits, Claims and Other Expenses 15,816,279 19,690,733
Investment Income from the Business 9,731,201 8,130,464
Less – Exempted Interest Income (1,543,652) (1,434,461)
Less – Management Expenses (5,518,937) (4,626,108)
Total Statutory Income 2,668,612 2,069,894
Tax Losses Utilised During the Year – (272,756)
Taxable Income 2,668,612 1,797,138
Income Tax @ 28% 747,211 503,199

Rs. ’000 Rs. ’000
Tax Losses
Tax Losses Brought Forward – –
Tax Losses Transferred from Ceylinco Insurance PLC – 272,756
Tax Losses Utilised during the Year – (272,756)
Tax Losses Carried Forward – –
The Company is liable to pay income tax at the rate of 28% of its taxable profits in accordance with the provisions of the Inland
Revenue Act No. 10 of 2006 and subsequent amendments thereto. There is no payment due to the Department of Inland Revenue as the
tax liability is fully absorbed by payments made in lieu of credit available on the Withholding Tax on Corporate Debt and Notional Tax credits
generated from investments in Government Securities
Ceylinco Health Care Services Limited is liable to pay 12% on its business income and 28% on its investment income.
The Company has received tax assessments for the years of assessments 2010/11, 2011/12, 2012/13 and 2013/14. Assessments have
been issued by the Department of Inland Revenue in contrary to the Inland Revenue Act No. 10 of 2006.
Therefore, the Company is of the view that these assessments will not materialise and there will be no additional tax liabilities arising
against the Company. Hence, no provision has been made for the assessments received. The Company has made representations against
the assessments issued to the Department of Inland Revenue in consultation with the tax consultants of the Company.
34. Non-Controlling Interests (NCI)

34. (a) Accumulated Balances of Non-Controlling Interest
Name of Company 2017 2016 Effective

Ownership
Rs. ’000 Rs. ’000 by NCI %
Ceylinco Sereka Limited (25) (25) 0.01%

Ceylinco Healthcare (Pvt) Limited 3,839 4,651 0.55%
Serene Resort Limited 2,201 1,838 1.85%
6,013 6,464 –
34. (b) Profit Allocated to Non-Controlling Interest

Name of Company 2017 2016
Rs. ’000 Rs. ’000
Ceylinco Sereka Limited (1) (25)

Ceylinco Healthcare (Pvt) Limited 2 498
Serene Resort Limited 362 (335)
363 138
35. Basic/Diluted Earnings Per Share (EPS)

Accounting Policy
The Group/Company presents basic and diluted Earnings Per Share (EPS) data for its ordinary shares.
Basic EPS of the Company is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the period.
Basic Earnings Per Share of the Group has been calculated by dividing profit after taxation attributable to ordinary shareholders of the parent
by the weighted average Ordinary Shares in issue at the year-end.
35. (a) Earnings Per Share (Including One-Off Surplus Transfer)

GROUP COMPANY
Profit for the Year (Rs. ’000) 9,657,009 3,291,610 9,467,426 3,079,042
Weighted Average Number of Ordinary Shares (’000) 50,000 50,000 50,000 50,000
Basic Earnings Per Ordinary Share (Rs.) 193.13 65.83 189.35 61.58
35. (b) Earnings Per Share (Excluding One-Off Surplus Transfer)

GROUP COMPANY
Profit for the Year (Rs. ’000) 6,200,461 3,291,610 6,011,241 3,079,042
Weighted Average Number of Ordinary Shares (’000) 50,000 50,000 50,000 50,000
Basic Earnings Per Ordinary Share (Rs.) 124.01 65.83 120.22 61.58
There were no potential dilutive ordinary shares outstanding at any time during the year. Therefore, diluted earnings per share is same as
basic earnings per share shown above.
36. Dividends Paid and Proposed

COMPANY
Interim Dividend (Rs. ’000) – Paid 432,000 271,125

Final Dividend (Rs. ’000) – Proposed 18,000 103,875
Total Proposed Dividend (Rs. ’000) 450,000 375,000
No. of Shares in Issue for the Year (’000) 50,000 50,000
Dividend per Share (Rs.)

Proposed Final 9.00 7.50
The Board of Directors has recommended a total dividend of Rs. 9.00 per share inclusive of interim dividend of Rs. 8.64 per share (paid)
and a final dividend of Rs. 0.36 per share proposed for the year ended 31 December 2017 (2016 – Rs. 7.50 – per share) which is to be
approved by the shareholders at the Annual General Meeting to be held on 30 March 2018. As stipulated by LKAS 10 – “Events after the
Reporting Period”, this proposed dividend is disclosed, but not recognised as a liability as at 31 December 2017.
However, for the purpose of computing Dividend per Share, the final dividend proposed has been taken into consideration.
As required by Section 56 of the Companies Act No. 07 of 2007, the Board of Directors of the Company has satisfied the solvency test in
accordance with Section 57, prior to recommending the interim and final dividend for the year ended 31 December 2017. A statement of
solvency was completed and duly signed by Directors on 13 December 2017 and 23 February 2018 respectively and has been audited by
Messrs Ernst & Young Chartered Accountants.
37. Income Tax Effects Relating to Other Comprehensive Income

2017 2016
Group Before Tax (Expense) Net of Tax Before Tax (Expense) Net of Tax
Tax Amount Benefit Amount Tax Amount Benefit Amount
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Net Gain/(Loss) on Available–for–

Sale Financial Assets (20,685) – (20,685) 27,001 47,106 74,107
Actuarial Gain on Defined
Benefit Plans (206,728) (40,877) (247,605) (221,053) (3,891) (224,944)
Share of Other Comprehensive
Income of Equity Accounted
Investees 38,236 – 38,236 31,696 – 31,696
Revaluation Surplus/(Deficit)
During the Year – 68,134 68,134 1,887,085 (68,134) 1,818,951
Total (189,178) 27,257 (161,920) 1,724,729 (24,919) 1,699,810
2017 2016
Company Before Tax (Expense) Net of Tax Before Tax (Expense) Net of Tax
Tax Amount Benefit Amount Tax Amount Benefit Amount
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Net Gain/(Loss) on Available–for–

Sale Financial Assets (20,685) – (20,685) 27,001 47,106 74,107
Actuarial Gain on Defined
Benefit Plans (206,728) (40,877) (247,605) (221,053) (3,891) (224,944)
Revaluation Surplus/(Deficit)
During the Year – 68,134 68,134 1,704,705 (68,134) 1,636,571
Total (227,413) 27,257 (200,156) 1,510,652 (24,919) 1,485,733
38. Risk Management Framework

38. (a) Governance Framework
The primary objective of the Group's financial risk management is to manage financial risks with its risk appetite and provide
reasonable assurance on the achievement of financial objectives.
Financial risk management is embedded into the Group's broader Risk Management Framework and spans across the Group with clear
objectives, duties and responsibilities specified at each level. The Board of Directors, with the assistance of the Board Risk Committee, bears
the overall responsibility for establishment and oversight of the Risk Management Framework. The Executive Risk Management Committee,
headed by the Chief Risk Officer, is responsible for developing, facilitating and monitoring the control framework and execution of proper
risk management strategies. The line management and staff are responsible for day-to-day risk management and are represented at the
Sub committee level. Regular review of risks and effective risk mitigation strategies ensure consistent corporate performance, while risks
are managed within the risk appetite of the Group.
38. (b) Capital Management Objectives, Policies and Approach

The Group has established the following capital management objectives, policies and approach to managing the risks that affect its capital
position:
zzTo maintain the required level of stability of the Group thereby providing a degree of security to policyholders
zzTo allocate capital efficiently and support the development of business by ensuring that return on capital
zzEmployed meet the requirements of its capital providers
zzTo retain financial flexibility by maintaining strong liquidity and access to a range of capital markets
zzTo align the profile of assets and liabilities taking account of risks inherent in the business
zzTo maintain financial strength to support new business growth and to satisfy the requirements of the policyholders, regulators and
stakeholders
Operations of the Group are also subject to regulatory requirements within the jurisdictions in which it operates. Such regulations not only
prescribe approval and monitoring of activities, but also impose certain restrictive provisions (e.g., capital adequacy) to minimise the risk of
insolvency on the part of the insurance companies to meet unforeseen liabilities as these arise.
The Group maintains capital, investments and solvency as per the regulations prescribed by Insurance Regulatory Commission of
Sri Lanka. (IRCSL). New changes in regulations are timely adopted and necessary changes are made to internal processes.
Approach to capital management

The Group allocates capital to businesses as required and ensures the sufficient returns to shareholders and policyholders. The assets and
liabilities Management establishes the required level of liquidity and reduces the risks of the Company and achieves the required capital
levels of the Company.
The primary source of capital used by the Company is equity shareholders’ funds.
The return expectations are regularly forecasted and comparisons are made in order to ensure the requirements of stakeholders are
achieved.
The Group has had no significant changes in its policies and processes to its capital structure during the past year from previous years.
38. (c) Regulatory Framework

Regulators are primarily interested in protecting the rights of policyholders and monitor them closely to ensure that the Group is
satisfactorily managing affairs for their benefit. At the same time, regulators are also interested in ensuring that the Group maintains an
appropriate Capital Adequacy position to meet unforeseen liabilities arising from economic shocks or natural disasters.
The Company is regulated by IRCSL with the objective of protecting shareholders and policyholders. There are various regulations and
directive the Company is expected to adhere in order to achieve the expected norms, which leads the Company to maintain required
solvency and maintain sufficient capital.
Financial risks arise due to movements in market variables. The risks mainly involve interets rate risk and equity price risk. The Company
manages these risks through various strategies adopted at the Investment Committee and Financial Risk Committee.
The new “Risk-Based Capital framework” or RBC is focused on managing the risks rather than complying with solvency margin rules. The
RBC framework has been tested and refined since 2011 and full implementation of RBC started from January 2016. RBC reporting to the
regulator consists of templates and questionnaires developed over the past years.
The insurance industry was going through a challenging phase in the recent past with increase in capital requirements, segregation of
composite companies and future listing requirements in addition to the implementation of RBC.
RBC is a flexible framework for maintenance of minimum capital requirements based on riskiness of respective insurance company.
It consists of risk factors exposed by insurance companies such as Credit Risk, Concentration Risk, Market Risk, Operational Risk and
Liability Risk.
It also includes quantified capital charges for those risk factors and valuation methodology for assets and liabilities of insurance companies.
The implementation of RBC is intended to increase transparency and establish appropriate risk management systems. It is expected to
create a more stable industry with greater public confidence.
This framework will help to develop a culture of risk awareness in the industry while encouraging efficient use of capital to improve return
based on the risk exposure. This will be advantageous to the companies with good risk management practices.
38. (d) Asset Liability Management (ALM) Framework

ALM framework is used to manage the risks arising from mismatch of cash flows from assets and liabilities. ALM is the ongoing process
of formulating, implementing, monitoring and revising strategies related to assets and liabilities to achieve an organisation's financial
objectives, given the organisation's risk appetite, tolerance and other constraints. ALM deals with the optimal investment of assets in view
of meeting current goals and future liabilities.
Various financial risks arise from open positions in interest rates, currency and equity products, all of which are exposed to general and
specific market movements. The main risk that the Company faces, due to the nature of its investments and liabilities, is the interest rate
risk.
The Board Investment Committee, along with the inputs from Operational Investment Committee, identifies the nature of the liabilities
arising from the product portfolio and evaluates the investment options that best suit to hedge/manage the liability. The Company manages
these selected positions within a strategically crafted ALM framework that has been developed considering the cyclical nature of the
domestic interest rates to achieve risk-adjusted investment returns in excess of its obligations in the long term.
39. Insurance and Financial Risk
39. (a) Insurance Risk

The principal insurance risk the Company faces is that the actual claims and benefit payments or the timing thereof, differ from
expectations. This is influenced by the frequency of claims, severity of claims, actual benefits paid and subsequent development of
long-term claims. Therefore, the objective of the Company is to ensure that sufficient financial and reinsurance protection is available to
cover these liabilities.
The variability of risks is also improved by careful selection and implementation of underwriting strategy guidelines, as well as the use of
reinsurance arrangements.
The Company has entered into long-term reinsurance treaties with world's leading reinsurers as a part of its risks mitigation programme.
The reinsurance programme is designed to mitigate the Group’s net exposure to a single claim as well as to catastrophic losses.
39. (a) (1) Life insurance contracts

Life insurance contracts offered by the Company include: whole life, term assurance, endowment plans, retirment plans, critical illness
benefit, disability insurance, daily hospital cash, and major surgery benefit.
The main risks that the Company is exposed to are as follows:
zzMortality risk – risk of loss arising due to policyholder’s death experience being different than expected;
zzMorbidity risk – risk of loss arising due to policyholder health experience being different than expected
zzInvestment return risk – risk of loss arising from actual returns being different than expected
zzExpense risk – risk of loss arising from expense experience being different than expected;
zzPolicyholder decision risk – risk of loss arising due to policyholder experiences (lapses and surrenders) being different than expected
The Company's underwriting strategy is designed to ensure that risks are properly assessed and correct premium is charged.
The use of scientifically designed proposal forms and medical screening ensures that appropriate data related to the risks to be covered are
collected and arrive at a premium which takes into account of current health conditions and additional risks of the life to be insured.
The strategy also addresses regular review of actual claims experience and product pricing, as well as detailed claims
handling procedures. Underwriting limits are in place to enforce appropriate risk selection criteria.
For contracts in which death or disability is the insured risk, the significant factors that could increase the overall frequency of claims
are epidemics, widespread changes in lifestyle and natural disasters, resulting in earlier or more claims than expected.
39. (b) Credit Risk

Credit Risk (in ALM context) is the risk that a borrower or counterparty will fail to meet its obligations towards Ceylinco Life in accordance
with agreed terms, due to various reasons such as declining financial strength.
The sub-categories of credit risk include –

i. Default risk: the risk that the issuer will fail to make timely interest or principal payments.
ii. Downgrade risk: the risk that the debt instrument will be downgraded, reducing its market value.
iii. Credit spread risk: the risk that credit spreads (in general) will widen or narrow, decreasing or increasing, respectively, the market value
of a debt instrument.
To minimise credit risk, financial investments (such as term deposits, debentures, etc.) are placed, investment transactions (such as
Government Security purchases and sales, repurchase/reverse repurchase agreements) are entered into, strictly with Board Investment
Committee-approved counterparties only.
In addition, the individual exposures to such approved counterparties are set and monitored based on Insurance Regulatory Commission
of Sri Lanka (formerly known as Insurance Board of Sri Lanka) IRCSL determinations and internal limits. The internal exposure limits are
reviewed and refined periodically.
Since a default by an issuer could create a significant credit loss, Ceylinco Life usually invests in credit debt instruments (term deposits,
corporate debentures, etc.) issued by reputed and stable issuers such as top tier Licensed Commercial Banks.
While this check for the credit rating floor is applied at the point of purchase, the subsequent rating upgrades/downgrades are monitored
periodically.
zzReinsurance is placed with counterparties that have a good credit rating. At each reporting date, an assessment of creditworthiness of
reinsurers are performed and updates the reinsurance purchase strategy, ascertaining suitable allowance for impairment.
zzThe credit risk in respect of customer balances incurred on non-payment of premiums or contributions will only persist during the grace
period specified in the policy document until expiry, when the policy is either paid up or terminated. Commission paid to intermediaries
is netted off against amounts receivable from them to reduce the risk of doubtful debts.
Credit Exposure
The table below shows the maximum exposure to credit risk for the components of the Statement of Financial Position and items such as
future commitments:
GROUP COMPANY
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Held-to-Maturity Financial Assets
Debt Securities 11. (a) 65,272,728 66,581,929 65,272,728 66,581,929
Loans and Receivables
Debt Securities 11. (b) 17,405,772 13,160,198 16,631,201 12,494,388
Other 11. (b) 567,911 504,103 567,911 504,103
Debt Securities 11. (c) 3,501,014 859,325 3,501,014 859,325
Equity Securities 11. (c) 350,227 360,329 306,696 360,329
Financial Assets at Fair Value through Profit or Loss
Equity Securities 11. (d) 13,402 17,231 13,402 17,231
Debt Securities 11. (d) 2,336,205 148,331 2,336,205 148,331
Reinsurance Assets 14 115,010 41,298 115,010 41,298
Loans to Life Policyholders 16 1,630,346 1,378,954 1,630,346 1,378,954
Premium Receivables 247,393 214,604 247,393 214,604
Cash and Cash Equivalents 18 894,540 600,104 883,303 584,256
Total Credit Risk Exposure 92,334,548 83,866,406 91,505,210 83,184,749
Industry Analysis – Company

As at 31 December 2017 Financial Government Services Manufacturing Others Total
Services and Power
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Assets
Debt Securities 23,521,994 41,750,734 – – – 65,272,728
23,521,994 41,750,734 – – – 65,272,728

Term Deposits 15,093,799 – – – – 15,093,799
Repo Investments 236,199 – – – – 236,199
Unquoted Debentures 1,301,203 – – – – 1,301,203
Staff and Vehicle Loans (Hire) – – – – 567,911 567,911
Other Loans – – – – – –
16,631,201 – – – 567,911 17,199,112

Equity Securities 172,649 – 2,160 131,886 306,696
Debt Securities 656,091 2,844,923 – – – 3,501,014
828,740 2,844,923 – 2,160 131,886 3,807,709
Financial Assets at Fair Value through Profit or Loss

Equity Securities 301 – 430 12,671 – 13,402
Debt Securities – 2,336,205 – – – 2,336,205
301 2,336,205 430 12,671 – 2,349,607
Total Credit Risk Exposure 40,982,237 46,931,862 430 14,831 699,796 88,629,158
As at 31 December 2016 Financial Government Services Manufacturing Others Total

Services and Power
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000

Debt Securities 23,108,574 43,473,354 – – – 66,581,929
23,108,574 43,473,354 – – – 66,581,929

Term Deposits 8,505,664 – – – – 8,505,664
Repo Investments 2,987,653 – – – – 2,987,653
Unquoted Debentures 1,001,072 – – – – 1,001,072
Staff and Vehicle Loans – – – – – –
Other Loans – – – – 504,102 504,102
12,494,389 – – – 504,102 12,998,491

Equity Securities 224,842 – – 3,601 131,886 360,329
Debt Securities 717,328 141,997 – – – 859,325
942,170 141,997 – 3,601 131,886 1,219,654
Financial Assets at Fair Value through

Profit or Loss
Equity Securities 304 – 412 16,516 – 17,232
Debt Securities – 148,331 – – – 148,331
304 148,331 412 16,516 – 165,563
Total Credit Risk Exposure 36,545,437 43,763,683 412 20,117 635,988 80,965,637
The below table indicates the rating of investments as at 31 December 2017 and 2016.
As at 31 December 2017 AAA AA+ AA AA- A+ A A-

Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Held-to-Maturity
Financial Assets
Debt Securities 41,750,734 2,829,938 1,371,753 9,836,150 7,311,603 496,437 1,562,040
Loans and Receivables 1,237,270 3,942,290 – 3,387,822 5,664,247 1,053,885 1,072,305
Available-for-Sale
Financial Assets
Equity Securities – – – – – 11 –
Debt Securities 2,844,923 – 2,183 224,415 153,314 – 251,129
Financial Assets at Fair Value

through Profit or Loss
Equity Securities 46 – – 446 33 – –
Debt Securities 2,336,205 – – – – – –
Total 48,169,179 6,772,228 1,373,935 13,448,833 13,129,197 1,550,334 2,885,474
As at 31 December 2016 AAA AA+ AA AA- A+ A A-

Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Held-to-Maturity
Financial Assets
Debt Securities 43,473,354 2,830,793 1,201,699 10,635,058 6,277,575 485,890 1,563,004
Loans and Receivables 3,987,335 1,740,614 2,070,136 150,263 3,611,319 35,201 610,204
Available-for-Sale
Financial Assets
Equity Securities – – – – – 11 –
Debt Securities 147,044 2,316 50,049 140,359 233,660 133,820 152,077

Through Profit or Loss
Equity Securities 37 – 47 369 36 – –
Debt Securities 148,331 – – – – – –
Total 47,756,102 4,573,723 3,321,930 10,926,049 10,122,590 654,922 2,325,284

BBB+ BBB BBB- B+ Not Rated Total
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
99,847 14,226 – – – 65,272,728

271,267 – 2,115 – 567,911 17,199,112
– 172,638 – – 134,046 306,696

25,051 – – – – 3,501,014
– – – – 12,878 13,403
– – – – – 2,336,205
396,165 186,864 – – 714,835 88,629,158
BBB+ BBB BBB- B+ Not Rated Total

Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
– 114,556 – – – 66,581,929
– 263,795 25,523 – 504,102 12,998,491
– 224,831 – – 135,487 360,329

– – – – – 859,325
– – – 1 16,741 17,231
– – – – – 148,331
– 603,182 – 1 656,330 80,965,637
39. (c) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet efficiently, both expected and unexpected current and future cash flow
and collateral needs, without affecting either daily operations or the financial condition of the firm.
In the context of providing financial protection to policyholders through Life Insurance, timely settlement of financial commitments such as
customer benefits and claims is essential. In addition, preserving the confidence of the policyholders and investors are vital for a financial
service provider such as Ceylinco Life.
Since a strain on liquidity would lead to fire sale of assets which would adversely affect the profitability and policyholder/investor
confidence, zero tolerance is maintained for adverse deviations. The investment strategy of the Company ensures that sufficient liquid
assets/credit lines are available to meet any such unforeseen cash outflows.
39. (d) Market Risk

Market risk is the risk that the market value or future cash flows of a financial instrument will fluctuate due to changes in market prices
and/or financial variables directly/indirectly related to financial markets.
The sub-categories of market risk include –

i. Interest rate risk: the risk that the market value or future cash flows of a financial instrument will fluctuate due to changes in market
interest rates. This includes reinvestment risk and inflation risk, which eventually impacts the interest rate.
ii. Currency rate risk: the risk that the market value or future cash flows of a financial instrument will fluctuate due to changes in
exchange rates.
iii. Equity price risk: the risk that the market value or future cash flows of a financial instrument will fluctuate due to changes in equity
prices.
iv. Commodity price risk: the risk that the market value or future cash flows of a financial instrument will fluctuate due to changes in
commodity prices.
In addition Ceylinco Life is also exposed to adverse changes in real estate values.
39. (e) Currency Risk

The Group has no significant exposure to currency risk.
39. (f) Interest Rate Risk

Interest rate risk is the risk that the market value or future cash flows of a financial instrument will fluctuate due to changes in the absolute
level of interest rates, in credit spreads or in the shape of yield curve. This includes reinvestment risk and inflation risk, which eventually
impacts the interest rate.
Since financial investments of Ceylinco Life consist mainly of Fixed Income Securities (such as Government Securities, term deposits,
corporate debt, etc.), interest rate risk is one of the most significant prominent risks faced by Ceylinco Life.
Given (a) unavailability of long-term financial instruments with adequate yields; (b) cyclical and volatile movements in the domestic interest
rates, and (c) frequent changes to taxation, to optimise the returns on its investment portfolio, Ceylinco Life diligently carries a duration
mismatch in its asset; liability management.
The Group’s Investment policy identifies the volatile and cyclical nature of Sri Lankan interest rate environment. The Group/Company closely
monitors the current and future expected shifts in the monetary and fiscal policy, movements in domestic and global interest rates, inflation
expectations, movements in exchange rates, balance of payment, changes in taxation and other key macroeconomic indicators when
making investment decisions and fine tune the investment horizons/vehicles accordingly.
In addition to internal expertise, to ensure prudence and probity, the Group/Company seeks the views of independent macro research
providers in crafting investment strategy.
39. (g) Equity Price risk

The equity price risk is relatively negligible insignificant due to diminutive exposure to equity market. However, the Company maintains a
closer watch on the movements in stock prices and indices.
39. (h) Operational risks

"This is the risk that the Group may not meet its objectives due to failed, inadequate or incomplete internal processes, people, systems,
controls, or due to external events." In the context of financial risk management, this involves management of operational risks which could
lead to financial losses.
The Group manages operational risks by initiating a rigorous control framework and by monitoring and responding to potential risks.
Controls include effective segregation of duties, access controls, authorisation and reconciliation procedures, ethical business practices and
standards, staff education, training and assessment processes, including the use of internal audit.
39. (i) Maturity Profile – Company

The following table summarises the maturity profile of the financial assets, financial liabilities and insurance contract liabilities of the
Company based on remaining undiscounted contractual obligations, including interest payable and receivable.
For insurance contracts liabilities, maturity profiles are determined based on estimated timing of net cash outflows from the recognised
insurance liabilities.
Asset and Liabilities Note Total Less than 1 Year to 3 Years to 5 Years to More than
31 December 2017 1 Year 3 Years 5 Years 15 Years 15 Years
Rs. Rs. Rs. Rs. Rs. Rs.
Assets
Debt Securities 11. (a) 65,272,728 11,883,273 9,435,193 10,977,793 27,545,776 5,430,692
Loans and Receivables 11. (b) 17,199,112 15,398,013 63,833 1,319,621 417,644 –

Equity Securities 11. (c) 306,696 – – – – 306,696
Debt Securities 11. (c) 3,501,013 361,106 2,774,849 144,429 144,939 75,691

through Profit or Loss
Equity Securities 11. (d) 13,402 – – – – 13,402
Debt Securities
11. (d) 2,336,205 65,557 610,064 101,631 417,748 1,141,205
Reinsurance Receivables 14 115,010 115,010 – – – –
Loans to Life Policyholders 16 1,630,346 153,339 217,316 203,797 798,179 257,716
Premium Receivables 247,393 247,393 – – – –
Cash and Cash Equivalents 18 883,303 883,303 – – – –
91,505,209 29,106,994 13,101,256 12,747,272 29,324,285 7,225,402
Liabilities
Reinsurance Payables 22 165,715 165,715 – – – –
Trade and Other Payables 23 2,781,246 2,781,246 – – – –
Bank Overdraft 18 349,745 349,745 – – – –
3,296,706 3,296,706 – – – –
Asset and Liabilities Note Total Less than 1 Year to 3 Years to 5 Years to More than
31 December 2016 1 Year 3 Years 5 Years 15 Years 15 Years
Rs. Rs. Rs. Rs. Rs. Rs.
Assets
Debt Securities 11. (a) 66,581,929 6,130,124 13,810,222 10,598,050 30,608,030 5,435,504
Loans and Receivables 11. (b) 12,998,490 11,570,540 74,723 1,017,710 335,517 –

Equity Securities 11. (c) 360,329 – – – – 360,329
Debt Securities 11. (c)
859,325 49,435 428,714 136,977 174,129 70,069

Through Profit or Loss
Equity Securities 11. (d) 17,231 – – – – 17,231
Debt Securities 11. (d) 148,331 7,172 – – 141,159 –
Reinsurance Receivables 14 41,298 41,298 – – – –
Loans to Life Policyholders 16 1,378,955 72,977 192,714 176,839 697,054 239,370
Premium Receivables 214,604 214,604 – – – –
Cash and Cash Equivalents 18 584,256 584,256 – – – –
83,184,747 18,670,406 14,506,373 11,929,576 31,955,888 6,122,503
Liabilities
Other Financial Liabilities 21 3,980,013 3,980,013 – – – –
Reinsurance Payables 22 25,837 25,837 – – – –
Trade and Other Payables 23 1,824,372 1,824,372 – – – –
Bank Overdraft 18 230,080 230,080 – – – –
6,060,301 6,060,301 – – – –
40. Contingencies and Commitments
(a) Legal Proceedings and Regulations

There are no any contingencies due to legal proceeding and regulations. Capital commitments relating to property, plant and equipment
have been disclosed separately in Note 7 (c).
(b) Capital Commitments

Capital Commitment relating to property, plant and equipment has been discussed separately in Note 7(c).
41. Assets Pledged

The following assets have been pledged as security for banking facilities:
Nature of Assets Nature of Liability Carrying Amount Included Under

Pledged
Rs. ’000
Treasury Bonds Pledged to Seylan Bank PLC to obtain banking facilities. 155,700 Held to Maturities
Fixed Deposits Pledged to Seylan Bank PLC to obtain banking facilities. 134,000 Loans and Receivables
Fixed Deposits Pledged to Seylan Bank PLC to obtain banking facilities. 50 Loans and Receivables
Fixed Deposits Pledged to Nations Trust Bank PLC to obtain banking facilities. 100 Loans and Receivables
42. Related Party Disclosures

According to Sri Lanka Accounting Standard (LKAS) 24 Related Party Disclosure, “Key Management Personnel (KMP)” are those having
authority and responsibility for planning, directing and controlling the activities of the entity. Accordingly, the Directors (including Executive
and Non-Executive Directors) of the Company and their immediate family members have been classified as Key Management Personnel
of the Company. In addition, Chief Executive Officer together with their immediate family members have also been classified as Key
Management Personnel of the Company.
Immediate family member is defined as spouse or dependent. A dependent is defined as anyone who depends on the respective KMP
for his/her financial needs. As the Ceylinco Insurance PLC (CIPLC) is the Ultimate Parent of the Company, and the Board of Directors of the
CIPLC have the authority and responsibility of planning, directing and controlling the activities of the Company, the Directors of the CIPLC
and their immediate family members have also been identified as Key Management Personnel of the Company.
COMPANY
Rs. Rs.
42. i Amounts Received from Related Parties

Subsidiaries 7,059,420 4,557,997
Equity Accounted Investees 352,231,816 335,054,935
Other Related Companies 41,550,186 42,954,999
Key Management Personnel 656,745 1,224,744
Total 401,498,167 383,792,675
42. ii Amounts Paid to Related Parties

Subsidiaries (16,400,546) (514,993,271)
Equity Accounted Investees (250,000,000) (327,491,060)
Other Related Companies (48,325,819) (621,738,931)
Key Management Personnel (360,894,589) (324,617,446)
(675,620,954) (1,788,840,708)
42. i. a Transaction with Related Parties Amount Received from Related Parties
Subsidiaries
Ceylinco Health Care Services Limited 7,059,420 4,557,997
Serene Resorts Limited – –
7,059,420 4,557,997
COMPANY
Rs. Rs.
42. i. b Equity Accounted Investees

Citizen Development Business Finance PLC 352,231,816 335,054,935
352,231,816 335,054,935
42. i. c Other Related Companies

Ceylinco General Insurance Limited 41,550,186 42,954,999
41,550,186 42,954,999
42. i. d Key Management Personnel

Premium Received 656,745 1,224,744
656,745 1,224,744
COMPANY
Rs. Rs.
42. ii. a Amounts Paid to Related Parties

Subsidiaries
Ceylinco Health Care Services Limited (16,400,546) (257,126,976)
Serene Resorts Limited – (257,866,295)
(16,400,546) (514,993,271)
42. ii. b Equity Accounted Investees

Citizen Development Business Finance PLC (250,000,000) (327,491,060)
(250,000,000) (327,491,060)
42. ii. c Other Related Companies

Ceylinco General Insurance Limited (47,789,944) (38,113,619)
Ceylinco Insurance PLC (535,875,535) (583,625,313)
(583,665,479) (621,738,931)
42. ii. d Key Management Personnel

Short-Term Employee Benefits (292,741,313) (254,493,555)
Post-Employment Benefits (68,152,521) (68,097,224)
Legal Fees Paid (754,501) (2,026,667)
(361,648,335) (324,617,446)

COMPANY
Rs. Rs.
42. iii Transaction with Related Parties

42. iii. a Subsidiaries
Premium Received/(Paid) 91,492 130,430
Fund Management Fees Received/(Paid) (600,000) –
Claim (Received)/Paid 6,939,000 –
Rent Received/(paid) 2,112,245 2,069,388
Investment in shares – (500,000,000)
Medical Fees for staff and Customers (16,400,546) (7,126,976)
Reimbursement of Expenses 4,855,683 2,358,179
Training Expenses – (7,866,295)
(3,002,126) (510,435,274)
42. iii. b Equity Accounted Investees

Insurance Premium Received/(Paid) 6,875,742 5,707,490
Purchase of Shares by the Company – (72,441,000)
Investment in Fixed Deposit (250,000,000) (250,000,000)
Maturity of Fixed Deposit 250,000,000 250,000,000
Claim (Received)/Paid – (5,050,060)
Dividend Received/(Paid) 51,751,715 48,916,715
Rent Received/(Paid) 2,230,200 2,434,653
Interest Received/(Paid) 41,374,159 27,996,077
102,231,816 7,563,875
42. iii. c Other Related Companies

Premium Paid (42,464,924) (34,438,619)
Premium Received 21,395,296 19,441,618
Dividend Received/(Paid) (5,325,020) (3,675,000)
(6,239,758) 4,841,381
42. iii. d Key Management Personal

Premium Received 656,745 1,224,744
Legal Fees Paid (754,501) (2,026,667)
(97,756) (801,923)
COMPANY
Rs. Rs.
42. iv Transactions with Related Parties

42. iv. a Transaction with Related Parties – Subsidiaries
Ceylinco Health Care Services Limited
Premium Received/(Paid) 91,492 130,430
Claim (Received)/Paid (600,000) –
Dividend Received/(Paid) 6,939,000 –
Rent Received/(paid) 2,112,245 2,069,388
Investment in Shares – (250,000,000)
Medical Fees for Staff and Customers (16,400,546) (7,126,976)
Reimbursement of Expenses 4,855,683 2,358,179
(3,002,126) (252,568,979)

Investment in Shares – (250,000,000)
Rent Received/(Paid) 600,000 –
Training Expenses Paid – (7,866,295)
600,000 (257,866,295)
42. iv. b Transaction with Related Parties – Associates

Citizen Development Business Finance PLC
Insurance Premium Received 6,875,742 5,707,490
Purchase of Shares by the Company – (72,441,000)
Investment in Fixed Deposit (250,000,000) (250,000,000)
Maturity of Fixed Deposit 250,000,000 250,000,000
Claims Paid – (5,050,060)
Dividend Received/(Paid) 51,751,715 48,916,715
Interest Received/(Paid) 41,374,159 27,996,077
102,231,816 7,563,875
42. iv. c Transaction with Related Parties – Other Related Companies

Ceylinco General Insurance Limited
Premium Paid (42,464,924) (34,438,619)
Premium Received 21,395,296 19,441,618
Claim Paid (5,325,020) (3,675,000)
Rent Received 20,154,890 23,513,381
(6,239,758) 4,841,381
Ceylinco Insurance PLC

Dividend Paid (535,875,535) (583,625,313)
(535,875,535) (583,625,313)

COMPANY
Rs. Rs.
42. iv. d Compensation of Key Management Personnel

Short-Term Employee Benefits (292,741,313) (254,493,555)
Post Employment Benefits (68,152,521) (68,097,224)
(360,893,834) (322,590,779)
Investment in Associate
No restrictions are placed on the ability of the associate to transfer funds to the Parent Company in the form of cash dividends or for the
repayment of loans when due.
No guarantees or collaterals were provided to the associate.
43. Events after the Reporting Period

Events after the reporting period are those events, favourable and unfavourable, that occur between the reporting date and the date when
the Financial Statements are authorised for issue.
All material post reporting date events have been considered and where appropriate, adjustments or disclosures have been made in the
respective Notes to the Financial Statements.
44. Reclassification of Comparatives

Interest Receivable which was included under Accrued Income has been reclassified under Financial Instruments for better presentation
and fair valuation purposes.
Impact on the Statement of Financial Position Previously Impact of Reclassified

31 December 2016 Reported Adjustment Amount
Rs. ’000 Rs. ’000 Rs. ’000
Group
Accrued Income 3,473,540 (3,473,540) –
Held to Maturity Financial Assets 64,552,885 2,029,044 66,581,929
Loans and Receivables 12,242,455 1,421,846 13,664,302
Available-For-Sale Financial Assets 1,204,176 15,478 1,219,654
Financial Assets at Fair Value Through Profit or Loss 158,390 7,172 165,562
78,157,906 – 81,631,446
Company
Accrued Income 3,469,523 (3,469,523) –
Held-to-Maturity Financial Assets 64,552,885 2,029,044 66,581,929
Loans and Receivables 11,580,660 1,417,829 12,998,490
Available-For-Sale Financial Assets 1,204,176 15478 1,219,654
Financial Assets at Fair Value Through Profit or Loss 158,390 7,172 165,562
77,496,111 – 80,965,634
45. Standards Issued But Not Yet Effective

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of Financial Statements of the Group are
disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.
SLFRS 15 – Revenue from Contracts with Customers

SLFRS 15 establishes a five-step model to account for revenue arising from contracts with customers. Under SLFRS 15, revenue is recognised
at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a
customer. It replaces existing revenue recognition guidance, including LKAS 18 – Revenue, LKAS 11 – Construction Contracts, and IFRIC 13 –
Customer Loyalty Programmes.
Either a full retrospective application or a modified retrospective application is required for 1 January 2018.Contracts within the scope of
SLFRS 4 Insurance Contracts are scope out according to scope (paragraph 5 (b)) of SLFRS 15. The Group is evaluating the impact of other
revenue contacts currently.
SLFRS 16 – Leases
SLFRS 16 will replace Sri Lanka Accounting Standard LKAS 17 – “Leases”, IFRIC 4 – “Determining whether an Arrangement contains a Lease,
SIC 15 – Operating Leases Incentives” and SIC 27 – Evaluating the Substance of Transactions Involving the Legal Form of a Lease. SLFRS 16
sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases
under a single on balance sheet model similar to the accounting for finance leases under LKAS 17. The standard includes two recognition
exemptions for lessees – leases of “low-value” assets and short-term leases. At the commencement date of a lease, a lessee will recognise
a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. Lessees will be
required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessor
accounting under SLFRS 16 is substantially unchanged from today’s accounting under LKAS 17. Lessors will continue to classify all leases
using the same classification principle as in LKAS 17 and distinguish between two types of leases: operating and finance leases. SLFRS 16
also requires lessees and lessors to make more extensive disclosures than under LKAS 17.
SLFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted, Lessee can choose to apply the
standard using either a full retrospective or a modified retrospective approach. The standard’s transition provisions permit certain reliefs. The
impact on the implementation of the above Standard has not been quantified yet.
SLFRS 9 – Financial Instruments

SLFRS 9 replaces the existing guidance in LKAS 39 – “Financial Instruments: Recognition and Measurement”. SLFRS 9 includes revised
guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment
on financial assets, and new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition
of financial instruments from LKAS 39.
SLFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted.
The Group meets the eligibility criteria of the temporary exemption from SLFRS 9 and intend to defer the application of SLFRS 9 until annual
reporting periods beginning on or after 1 January 2021.
SUPPLEMENTARY

INFORMATION
Quarterly Analysis 310
Ten Year Summary 312
Milestones 314
GRI Content Index 316
Sustainability Assurance Report 321
Branch Network 322
Glossary of Key Terms 329
310
QUARTERLY ANALYSIS
2017
Company Statement of Income 1 Quarter 2 Quarter 3 Quarter 4 Quarter Total
(Values are to the Nearest Rupees Thousand) Jan. – Mar. 17 Apr. – Jun. 17 Jul. – Sep. 17 Oct. – Dec. 17 Jan. – Dec. 17
Gross Written Premiums 3,560,155 3,858,389 4,068,339 4,278,601 15,765,484
Premiums Ceded to Reinsurers (103,590) (110,142) (107,798) (100,687) (422,217)
Net Written Premiums 3,456,565 3,748,247 3,960,541 4,177,914 15,343,267
Net Change in Reserve for Unearned Premium –
Net Earned Premium 3,456,565 3,748,247 3,960,541 4,177,914 15,343,267
Investment and Other Income 2,306,201 2,438,343 2,826,170 2,709,833 10,280,547
Net Income 5,762,766 6,186,590 6,786,711 6,887,747 25,623,814
Net Benefits and Claims (1,602,999) (1,659,623) (1,841,626) (1,582,132) (6,686,980)
Gross Change in Contract Liabilities (2,052,947) (2,428,845) (2,838,937) 62,227 (7,258,502)
Change in Contract Liabilities Due to Transfer of

One-Off Surplus – – – 3,456,184 3,456,184
Acquisition Cost (452,941) (398,812) (415,798) (514,928) (1,782,479)
Other Operating and Administrative Expenses (829,368) (888,785) (792,334) (1,022,009) (3,532,496)
Finance Cost (1,773) (4,620) (2,685) (2,927) (12,005)
Total Benefits, Claims and Other Expenses (4,940,029) (5,380,684) (5,891,380) 396,414 (15,816,279)
Profit Before Tax 822,738 805,905 895,331 7,284,161 9,807,535
Income Tax Expense (149,390) (122,157) (223,069) 154,507 (340,109)
Profit for the Year 673,347 683,749 672,262 7,438,668 9,467,426

STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Quarterly Analysis 311

2016
Company Statement of Income 1 Quarter 2 Quarter 3 Quarter 4 Quarter Total
(Values are to the nearest Rupees thousand) Jan. – Mar. 16 Apr. – Jun. 16 Jul. – Sep. 16 Oct. – Dec. 16 Jan. – Dec. 16
Gross Written Premiums 3,319,266 3,853,870 3,832,051 4,022,414 15,027,600
Premiums Ceded to Reinsurers (89,123) (87,630) (95,510) (101,566) (373,829)
Net Written Premiums 3,230,143 3,766,240 3,736,540 3,920,848 14,653,771
Net Change in Reserve for Unearned Premium – – – – –
Net Earned Premium 3,230,143 3,766,240 3,736,540 3,920,848 14,653,771
Investment and Other Income 1,899,862 1,955,944 2,304,900 2,619,983 8,780,689
Net Income 5,130,005 5,722,184 6,041,440 6,540,831 23,434,460
Net Benefits and Claims (1,738,709) (1,545,657) (1,651,656) (1,715,660) (6,651,682)
Gross Change in Contract Liabilities (1,636,497) (2,534,313) (2,539,484) (1,687,595) (8,397,889)
Change in Contract Liabilities Due to Transfer of

One-Off Surplus – – – – –
Acquisition cost (414,278) (417,464) (419,991) (442,251) (1,693,985)
Other Operating and Administrative Expenses (794,164) (775,666) (770,806) (596,625) (2,937,262)
Finance Cost (1,326) (3,090) (2,275) (3,224) (9,915)
Total Benefits, Claims and Other Expenses (4,584,974) (5,276,190) (5,384,213) (4,445,355) (19,690,733)
Profit Before Tax 545,031 445,993 657,227 2,095,475 3,743,727
Income Tax Expense (118,376) (19,031) (130,403) (396,876) (664,686)
Profit for the Year 426,655 426,963 526,824 1,698,599 3,079,041

312
TEN YEAR SUMMARY
Statement of Financial Position

Company 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008
Assets
Intangible Assets 56,950 2,759 645 2,198 4,609 15,105 42,396 82,695 135,077 154,284
Property, Plant and

Equipment 7,371,482 7,068,634 5,343,752 4,760,395 4,596,053 3,906,294 3,396,144 3,090,739 2,763,072 2,414,207
Investments 92,264,065 84,220,630 67,139,575 57,209,653 50,751,773 44,198,752 40,410,190 29,836,507 23,361,974 19,421,328
Other Assets 6,402,008 5,166,066 7,751,193 9,096,076 8,593,577 4,771,500 4,845,898 3,991,859 4,383,642 3,041,298
Total Assets 106,094,505 96,458,089 80,235,165 71,068,322 63,946,012 52,891,651 48,694,628 37,001,800 30,643,765 25,031,117
Liabilities
Insurance Provision – Life 81,723,759 77,925,114 68,011,535 60,021,879 52,765,411 45,110,789 38,203,473 31,868,141 26,449,967 21,300,965
Unit Linked Fund and

Other Funds 427,146 333,129 268,062 228,872 190,135 157,657 146,659 115,269 102,671 101,428
Equity and 23,943,600 18,199,847 11,955,567 10,817,572 10,990,466 7,623,205 10,344,494 5,018,390 4,091,127 3,628,724
Other Liabilities
Total Liabilities 106,094,505 96,458,089 80,235,165 71,068,322 63,946,012 52,891,651 48,694,628 37,001,800 30,643,765 25,031,117
Investor Information 2017 2016 2015
Return on Net Assets (Including One-Off Surplus Transfer) (%) 45.85 25.85 21.81
Return on Net Assets (Excluding One-Off Surplus Transfer) 34.97
Return on Total Assets (Including One-Off Surplus Transfer) (%) 8.92 3.19 2.57
Return on Total Assets (Excluding One-Off Surplus Transfer) 5.67
Net Assets Per Share (Including One-Off Surplus Transfer) Rs. 412.94 238.24 188.93
Net Assets Per Share (Excluding One-Off Surplus Transfer) 343.81
Earnings Per Share (Including One-Off Surplus Transfer) Rs. 189.35 61.58 38.03
Earnings Per Share (Excluding One-Off Surplus Transfer) 120.22
Dividend Per Share Rs. 9.00 7.50 6.25
Dividend Cover (Times) 21.04 8.21 6.08
Dividend Payout Ratio (%) 4.75 12.18 16.44
Note:
Company financial information has been disclosed for the Life insurance business, including the operation of Ceylinco insurance PLC up to year 2015.
Further financial information for the years 2011, 2012, 2013, 2014 and 2015 are based on LKAS/SLFRS and balance years are based on SLAS.
Investments include financial instruments for the years 2011, 2012, 2013 and 2014.
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Ten Year Summary 313
Statement of Comprehensive Income

Company 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008
Gross Written Premium 15,765,484 15,027,600 13,456,828 12,002,524 11,122,906 10,829,470 9,833,905 8,786,121 7,522,328 8,257,279
Net Written Premium 15,343,267 14,653,771 13,146,773 11,715,219 10,866,904 10,576,066 9,597,478 8,639,853 7,395,301 8,060,219
Investment Income and

Other Income 10,280,547 8,780,689 6,740,775 6,826,012 6,706,341 4,825,823 3,889,608 3,454,269 3,352,433 2,639,208
Net Claims and Benefit (6,686,980) (6,651,682) (5,956,745) (4,893,847) (4,757,321) (3,990,881) (2,946,295) (2,685,361) (2,698,277) (2,113,092)
Acquisition Cost (1,782,479) (1,693,985) (1,610,178) (1,389,842) (1,353,905) (1,427,626) (1,237,818) (1,171,497) (1,079,487) (1,244,224)
Increase in Long-Term
Insurance Fund (7,258,502) (8,397,889) (7,135,304) (7,256,468) (7,654,622) (6,765,658) (6,335,332) (5,418,174) (4,417,313) (4,374,916)
Change in Contract
Liabilities Ceded to
Reinsurers 3,456,184 – – – – – – – – –
Operating and
Administrative Expenses (3,532,496) (2,937,262) (2,994,099) (2,673,594) (2,517,219) (2,213,918) (2,163,561) (2,217,267) (2,056,341) (2,517,582)
Finance Expenses (12,005) (9,915) (10,214) (29,394) (9,817) (7,974) (7,890) (10,828) (13,490) (30,241)
Profit Before Tax 9,807,535 3,743,727 2,181,009 2,298,086 1,280,361 995,832 796,190 590,995 482,826 419,372
Taxation (340,109) (664,686) (120,963) (935,099) (39,973) – – – – –
Profit After Tax 9,467,426 3,079,041 2,060,046 1,362,987 1,240,388 995,832 796,190 590,995 482,826 419,372
Employee Information 2017 2016 2015
Revenue per employee (Including One-Off

Surplus Transfer) Rs. Mn. 28.79 25.75 21.22
Net profit per employee (Including One-Off
Surplus Transfer) Rs.'000 11,020 4,114 2,328
Net profit per employee (Excluding One-Off
Surplus Transfer) Rs.'000 7,137 – –
Number of employees Nos. 890 910 937
Note:
Company financial information has been disclosed for the Life insurance business, including the operation of Ceylinco insurance PLC up to year 2015.
Further, financial information for the years 2010, 2011, 2012 , 2013, 2014 and 2015 are based on LKAS/SLFRS and balance years are based on SLAS.
314
MILESTONES
1939 Ceylon Insurance Company Limited, the forerunner of

Ceylinco Insurance PLC, becomes the first Sri Lankan
public company to be registered in British-ruled
Ceylon (now Sri Lanka).
Ceylon Insurance Company Limited later changed its

name to Ceylinco Limited.
Ceylinco Limited becomes the 1962

leading insurer in Sri Lanka
following the nationalisation of
the insurance industry. 1987 1988
Ceylinco Limited becomes Taking over the business of Ceylinco Limited,

the leading principal Agent of the Ceylinco Insurance Limited established on 14
National Insurance Company when the January 1988 and listed on 21 April 1988, thus
insurance sector was liberalised. becoming Ceylinco Insurance PLC.
Recognised as the No. 1 Life Division set up as a separate business

Service Brand in Sri Lanka by segment within Ceylinco Insurance PLC.
the SLIM Brand Excellence
Awards, a feat repeated for
2005 and 2008 as well.
2004 2003 2001
Life Division becomes market
leader in the country's life
insurance industry, a position it
has retained ever since. ”Waidya Hamuwa“ ”Pranama“ Scholarship
the nationwide Programme launched.
community health
First ever CSR Award for an 2005 programme,
insurance company in the launched.
Asia Pacific Region won by
Life Division at the 9th Asian
Insurance Industry Awards in
Singapore.
2007
2009 2010 2011
The country's first Dedicated Ceylinco Life moves to Recognised as

private radiation residential its new corporate head the Best in Asia
treatment training centre office in Havelock Road, for CSR at the
unit established. established. Colombo 5. CMO Asia Awards
in India.
Awarded the Social
Marketing Award by the
World Brand Congress.
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Milestones 315

1989 1991 1992
Life Division sells 8,799 The first critical illness Life Division emerges
policies, earning a premium insurance product as the leader of the
income of Rs. 23.7 Mn. launched in Sri Lanka, life insurance segment
branded as “Ceylinco among private sector
1993 Life Division sets up its
Life Digasiri ”. insurance companies own Actuarial Division
in the country. with international
consultancy assistance
and forms its own
strategic planning
process.
1999 1998 1996
Ceylinco Cancer Detection Centre Life Division's annual Ceylinco Insurance PLC is ranked 20th
(the present Ceylinco Healthcare premium income among Sri Lanka's "Top 50 Companies by
Centre) set up in partnership with crosses the Rs. 1 Bn. Lanka Monthly Digest (LMD) magazine.
Washington Cancer Center. milestone as Ceylinco
Ceylinco Life produces 1st MDRT (Million
Insurance PLC
The first private sector insurer to Dollar Round Table) winner in Sri Lanka.
celebrates its 10th
introduce pension plans.
Anniversary.
2014 2015 2016 2017
Recognised as the Best Life Insurance Ceylinco Life Insurance Ceylinco Life unveiled its new brand Wining the 4th World
Company in Sri Lanka at the World Finance Limited commences logo of father and child, reflecting Finance Award
Global Insurance Award 2014. business on 1 June 2015, progress, confidence and trust with
having seamlessly taken the new tagline “Relationship for Life”. 11th People's Choice Award
Ceylinco Life Insurance Limited established
over the business of the The new brand positioning reflects the Ranked among the Top
on 22 April 2014 following the segregation
Life Division of Ceylinco Company's confidence and progression 20 Brands in Sri Lanka by
of the long-term (life) insurance business
Insurance PLC. to capitalise new sources of growth
and general (non-life) insurance business Inter-Brand
and move into new markets whilst
of Ceylinco Insurance PLC by setting up
keeping its promise to its customers.
two separate legal entities.
316
GRI CONTENT INDEX
GRI Standard Disclosure Page number(s)

and/or URL(s)
GRI 101: Foundation 2016 [GRI 101 does not include any disclosures]
General Disclosures
GRI 102: General Disclosures 2016 Organisational Profile
102-1 Name of the organisation Page 38
102-2 Activities, brands, products, and services Pages 108-110 and
Inner back cover
102-3 Location of headquarters Inner back cover
102-4 Location of operations Page 38
102-5 Ownership and legal form Inner back cover
102-6 Markets served Page 108, pages
322-328
102-7 Scale of the organisation Page 41
102-8 Information on employees and other workers Pages 137-139
102-9 Supply chain Page 119
102-10 Significant changes to the organisation and its Page 102
supply chain
102-11 Precautionary Principle or approach Page 6
102-12 External initiatives Pages 6-7
102-13 Membership of associations Page 121
Strategy
102-14 Statement from senior decision-maker Pages 16-21
102-15 Key impacts, risks, and opportunities Pages 51-55
Ethics and integrity

102-16 Values, principles, standards, and norms of behaviour Page 5, 94 and 96
102-17 Mechanisms for advice and concerns about ethics Page 96
Governance
102-18 Governance structure Pages 166-167
102-22 Composition of the highest governance body and its Pages 22-29
committees
102-23 Chair of the highest governance body Page 172
102-24 Nominating and selecting the highest governance body Page 175
102-25 Conflicts of interest Pages 171, 190, 200
102-30 Effectiveness of risk management processes Pages 158-159
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION GRI Content Index 317

and/or URL(s)
Stakeholder engagement
102-40 List of stakeholder groups Page 72
102-41 Collective bargaining agreements Page 147
102-42 Identifying and selecting stakeholders Pages 70-71
102-43 Approach to stakeholder engagement Pages 73-75
102-44 Key topics and concerns raised Pages 73-75
Reporting practice
102-45 Entities included in the Consolidated Financial Page 38
Statements
102-46 Defining report content and topic boundaries Page 6
102-47 List of material topics Pages 76-77
102-48 Restatements of information Page 6
102-49 Changes in reporting Page 6
102-50 Reporting period Page 6
102-51 Date of most recent report Page 6
102-52 Reporting cycle Page 6
102-53 Contact point for questions regarding the report Page 7
102-54 Claims of reporting in accordance with the GRI Standards Page 7
102-55 GRI content index Pages 316-320
102-56 External assurance Page 6 and Page 321
Material Topics
Economic Performance
GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundaries Page 77
103-2 The management approach and its components Page 77
103-3 Evaluation of the management approach Page 77
GRI 201: Economic Performance 2016 201-1 Direct economic value generated and distributed Page 89
201-3 Defined benefit plan obligations and other retirement plan Pages 262-266
Indirect Economic Impacts

GRI 203: Indirect Economic Impacts 2016 203-1 Infrastructure investments and services supported Page 128
203-2 Significant indirect economic impacts Page 128
318 GRI Content Index PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS

and/or URL(s)
Procurement Practices
GRI 204: Procurement Practices 2016 204-1 Proportion of spending on local suppliers Page 119
Anti-Competitive Behaviour
GRI 206: Anti-Competitive Behaviour 2016 206-1 Legal actions for anti-competitive behaviour, anti-trust, Page 118
and monopoly practices
Energy
GRI 302: Energy 2016 302-1 Energy consumption within the organisation Page 152
302-4 Reduction of energy consumption Page 152
Emissions
GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions Page 151
305-2 Energy indirect (Scope 2) GHG emissions Page 151
305-3 Other indirect (Scope 3) GHG emissions Page 151
305-5 Reduction of GHG emissions Page 151
Effluents and Waste

GRI 306: Effluents and Waste 2016 306-2 Waste by type and disposal method Page 152
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION GRI Content Index 319

and/or URL(s)
Environmental Compliance
GRI 307: Environmental Compliance 2016 307-1 Non-compliance with environmental laws and regulations Page 153
Employment
GRI 401: Employment 2016 401-1 New employee hires and employee turnover Pages 141-142 and
pages 144-145
401-2 Benefits provided to full-time employees that are not Pages 146-147
provided to temporary and part-time employees
401-3 Parental leave Page 142
Training and Education

GRI 404: Training and Education 2016 404-1 Average hours of training per year per employee Page 143-144
404-2 Programmes for upgrading employee skills and transition Page 143
assistance programmes
404-3 Percentage of employees receiving regular performance Page 135
and career development reviews
Diversity and Equal opportunity

GRI 405: Diversity and Equal Opportunity 2016 405-1 Diversity of governance bodies and employees Page 137 and page 167
320 GRI Content Index PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS

and/or URL(s)
Non-Discrimination
GRI 406: Non-Discrimination 2016 406-1 Incidents of discrimination and corrective actions taken Page 147
Local Communities
GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundaries Pages 78-79
103-2 The management approach and its components Pages 78-79
103-3 Evaluation of the management approach Pages 78-79
GRI 413: Local Communities 2016 413-1 Operations with local community engagement, impact Page 128
assessments, and development programmes
Marketing and Labelling

GRI 417: Marketing and Labelling 2016 417-1 Requirements for product and service information and Pages 110-111
labelling
417-2 Incidents of non-compliance concerning product and Page 118
service information and labelling
417-3 Incidents of non-compliance concerning marketing Page 118
communications
Customer Privacy
GRI 418: Customer Privacy 2016 418-1 Substantiated complaints concerning breaches of Page 118
customer privacy and losses of customer data
Socioeconomic Compliance
GRI 419: Socioeconomic Compliance 2016 419-1 Non-compliance with laws and regulations in the social Page 130
and economic area
SUSTAINABILITY 321
ASSURANCE REPORT
Ernst & Young Tel : +94 11 2463500
Chartered Accountants Fax Gen : +94 11 2697369
201 De Saram Place Tax : +94 11 5578180
P.O. Box 101 eysl@lk.ey.com
Colombo 10 ey.com

Sri Lanka
Independent Assurance Report to Ceylinco become aware of all significant matters that zzChecking the calculations performed by
Life Insurance Limited on the Sustainability might be identified in a reasonable assurance the Company on a sample basis through
Reporting Criteria Presented in the Integrated engagement. Accordingly, we do not express recalculation.
Annual Report – 2017 an opinion providing reasonable assurance. zzReconciling and agreeing the data on
financial performance are properly
Introduction and scope of the engagement Management of the Company’s derived from the Company’s audited
responsibility for the Report financial statements for the year ended
The management of Ceylinco Life Insurance
31 December 2017.
Ltd. (“the Company”) engaged us to provide The management of the Company is
an independent assurance on the following responsible for the preparation of the self- zzComparison of the content of the Report
elements of the sustainability reporting declaration, the information and statements against the criteria for a Global Reporting
criteria presented in the annual report – 2017 contained within the Report, and for Initiative, GRI Standards:
(“the Report”). maintaining adequate records and internal “In accordance” – Core guidelines.
controls that are designed to support the
Our procedures did not include testing
zzReasonable assurance on the information sustaining reporting process in line with the
electronic systems used to collect and
on financial performance as specified on GRI Sustainability Reporting Guidelines.
aggregate the information.
page 222 of the Report.
zzLimited assurance on other information Ernst & Young’s responsibility
presented in the Report, prepared in
Limitations and considerations
Our responsibility is to express a conclusion
accordance with the requirements Environmental and social performance data
as to whether we have become aware of
of the Global Reporting Initiative are subject to inherent limitations given their
any matter that causes us to believe that the
GRI Standards: “In accordance” – Core nature and the methods used for determining,
Report is not prepared in accordance with
guidelines. calculating and estimating such data.
the requirements of the Global Reporting
Initiative, GRI Standards: “In accordance” –
Basis of our work and level of assurance Comprehensive guidelines. This report is Conclusion
made solely to the Company in accordance Based on the procedures performed, as
We performed our procedures to provide
with our engagement letter dated 20 March described above, we conclude that;
limited assurance in accordance with Sri Lanka
2018. We disclaim any assumption of zzThe information on financial performance
Standard on Assurance Engagements (SLSAE
responsibility for any reliance on this report as specified on page 224 of the Report are
3000): “Assurance Engagements Other than
to any person other than the Company or for properly derived from the audited financial
Audits or Reviews of Historical Financial
any purpose other than that for which it was statements of the Company for the year
Information”, issued by The Institute of
prepared. In conducting our engagement, ended 31 December 2017.
Chartered Accountants of Sri Lanka (“CASL”).
we have complied with the independence
zzNothing has come to our attention
requirements of the Code for Ethics for
The evaluation criteria used for this limited that causes us to believe that other
Professional Accountants issued by the CASL.
assurance engagement are based on the information presented in the Report
Sustainability Reporting Guidelines (“GRI are not fairly presented, in all material
Guidelines”) and related information in Key assurance procedures respects, in accordance with the
particular, the requirements to achieve GRI We planned and performed our procedures Company’s sustainability practices and
Standards “In accordance” – Core guideline to obtain the information and explanations policies some of which are derived from
publication, publicly available at GRI’s global considered necessary to provide sufficient Sustainability Reporting Guideline, GRI
website at “www.globalreporting.org”. evidence to support our limited assurance Standards – “In accordance” Core.
conclusions. Key assurance procedures
Our engagement provides limited assurance included:
as well as reasonable assurance. A limited zzInterviewing relevant the Company’s
assurance engagement is substantially personnel to understand the process
less in scope than a reasonable assurance for collection, analysis, aggregation and
engagement conducted in accordance with presentation of data. Ernst & Young
SLSAE-3000 and consequently does not Chartered Accountants
zzReviewing and validation of the
enable to obtain assurance that we would 30 March 2018
information contained in the Report.
Colombo
322
BRANCH NETWORK
273
Western
Branches Province
Athurugiriya – 03
21
No. 28/2B, Godagama Road, Athurugiriya
Tel:  – 011-2742433  – 011-2760950
Avissawella – 01
Northern
Province No. 23/1/1, Kudagama Road, Avissawella
Tel:  – 036-2222134  – 036-2231620
Avissawella – 04
No. 23/1/1, Kudagama Road, Avissawella
Tel:  – 036-2222134  – 036-2231620
Bandaragama – 01
No. 51, Panadura Road, Bandaragama
17
North Central
Tel:
Bandaragama – 03
 – 038-2289033  – 038-2293066
No. 51, Panadura Road, Bandaragama

Province Tel:  – 038-2289033  – 038-2293066
Battaramulla
No. 956/A, Pannipitiya Road, Pelawatta, Battaramulla
Tel:  – 011-2177109  – 011-2177110
35
North Western 21
Beruwala – 01
No. 303, Galle Road, Aluthgama
Tel:  – 034-2271557  – 034-2271761
Province Eastern Boralesgamuwa
Province
No. 215A, Raththanapitiya, Boralesgamuwa
22
Tel:  – 011-2509659  – 011-2509149
Borella – 01
No. 85, Cotta Road, Colombo 08
Central
Province Tel:  – 011-2687512  – 011-2691546
Colombo – 09
91 No. 92, Jampettah Street, Colombo 13
Western
Province
15 Uva
Tel:
Colombo – 10
 – 011-2423196  – 011-2421589
No. 92, Jampettah Street, Colombo 13
19
Province Tel:  – 011-2423196  – 011-2421589
Colombo North – 01
Sabaragamuwa No. 92, Jampettah Street, Colombo 13

Tel:  – Operations  – Sales
Province Tel:  – 011-2423196  – 011-2421594

Colombo North – 02
30
No. 92, Jampettah Street, Colombo 13
Tel:  – 0112-423196  – 0112-337106
Southern Colombo North – 03

Province No. 92, Jampettah Street, Colombo 13
Tel:  – 011-2423196  – 011-2421596
STEWARDSHIP FINANCIAL REPORT SUPPLEMENTARY INFORMATION Branch Network 323

Colombo North – 10 Horana – 05 Kandana – 01
No. 92, Jampettah Street, Colombo 13 No. 274, Panadura Road, Horana No. 76/1/1, Station Road, Kandana
Tel:  – 011-2423196  – 011-2421586 Tel:  – 034-2265095  – 034-2261570 Tel:  – 011-2242892  – 011-2240956
Colombo North – 11 Horana – 06 Kelaniya – 01
No. 92, Jampettah Street, Colombo 13 No. 274, Panadura Road, Horana No. 27/1/1/1, Kandy Road, Kiribathgoda
Tel:  – 011-2423196  – 011-2336005 Tel:  – 034-2265095  – 034-2263951 Tel:  – 011-2914429  – 011-2907309
Corporate Sales – 04 Horana – 07 Kesbewa – 01
Ceylinco Life, Training Centre, No. 02, Gower Street, No. 274, Panadura Road, Horana No. 130/A/3, Horana Road, Kesbewa
Colombo 05 Tel:  – 034-2265095  – 034-2263488 Tel:  – 011-2602233  – 011-2703507
Tel: –  – 011-2506036 Ingiriya – 01 Kirindiwela – 01
Corporate Sales – 09 Panadura Road, Ingiriya No. 129, Colombo Road, Kirindiwela
No. 141, High Level Road, Nugegoda Tel:  – 034-2268035  – 034-2269896 Tel:  – 033-2268423  – 033-2268424
Tel:  – 011-2824115  – 011-2816004 Ja-Ela – 01 Kirindiwela – 02
Delgoda – 01 No. 81, Negombo Road, Ja-Ela No. 129, Colombo Road, Kirindiwela
No. 335/1, New Kandy Road, Delgoda Tel:  – 011-2247010  – 011-2247728 Tel:  – 033-2268423  – 033-2247677
Tel:  – 0112-403633  – 0112-402505 Ja-Ela – 02 Kirulapone – 02
Dematagoda – 01 No. 81, Negombo Road, Ja-Ela No. 98 A/2/1, High Level Road, Kirulapone
No. 58, Symonds Road, Colombo 10 Tel:  – 011-2247010  – 011-2243006 Tel:  – 011-2513090  – 011-2513091
Tel:  – 011-2687269  – 011-2687255 Ja-Ela – 04 Kochchikade – 01
Divulapitiya – 01 No. 81, Negombo Road, Ja-Ela No. 24, Negombo Road, Manaweriya, Kochchikade
No. 73/2, Kurunegala Road, Divulapitiya Tel:  – 011-2247010  – 011-2247044 Tel:  – 031-2274452  – 031-2274545
Tel:  – 031-2243043  – 031-2248987 Kadawatha – 01 Kolonnawa – 01
Divulapitiya – 03 No. 134/10C, Jaya Mawatha, Kandy Road, N0. 260A, Rajagiriya Road, Kotikawatta,
No. 73/2, Kurunegala Road, Divulapitiya Kadawatha Mulleriyawa New Town
Tel:  – 031-2243043  – 031-2248987 Tel:  – 011-2927233  – 011-2901030 Tel:  – 011-2549052  – 011-2567990
Gampaha – 01 Kadawatha – 03 Kolonnawa – 02
No. 91, Bauddhaloka Mawatha, Gampaha No. 134/10C, Jaya Mawatha, Kandy Road, N0. 260A, Rajagiriya Road, Kotikawatta,
Tel:  – 033-2222905  – 033-2234222 Kadawatha Mulleriyawa New Town
Gampaha – 03 Tel:  – 011-2927233  – 011-2901030 Tel:  – 011-2549052  – 011-2157163
No. 91, Bauddhaloka Mawatha, Gampaha Kaduwela – 01 Kolonnawa – 03

Tel:  – 033-2222905  – 033-2220188 No. 510/2, Avissawella Road, Kaduwela N0. 260A, Rajagiriya Road, Kotikawatta,
Tel:  – 011-2539937  – 011-2579980 Mulleriyawa New Town
Gampaha – 04
Kaduwela – 02 Tel:  – 011-2549052  – 011-2157163
No. 91, Bauddhaloka Mawatha, Gampaha
No. 510/2, Avissawella Road, Kaduwela Kotahena – 01
Tel:  – 033-2222905  – 033-2220188
Tel:  – 011-2539937  – 011-2538139 No. 92, Jampettah Street, Colombo 13
Gampaha – 05
Kaduwela – 03 Tel:  – 011-2423196  – 011-2543708
No. 91, Bauddhaloka Mawatha, Gampaha
No. 510/2, Avissawella Road, Kaduwela Kottawa – 01
Tel:  – 033-2222905  – 033-2236773
Tel:  – 011-2539937  – 011-2538139 No. 496/3, High Level Road, Makumbura,
Ganemulla – 01
Kottawa, Pannipitiya
No. 236 E1, Kirindivita Road, Ganemulla Kalutara – 01
Tel:  – 011-2781142  – 011-2783414
Tel:  – 033-2264117  – 033-2264922 No. 423, Galle Road, Kalutara
Maharagama – 01
Hanwella – 01 Tel:  – 034-2221526  – 034-2228490
No. 223, 1/1, High Level Road, Maharagama
137/3C, 2nd Floor, Main Street, Hanwella Kalutara – 03
Tel:  – 011-2745768  – 011-2838820

Tel:  – 036-2251488  – 036-2253947 No. 423, Galle Road, Kalutara
Malabe – 01
Homagama – 01 Tel:  – 034-2221526  – 034-2228036
No. 743/12/B, Thalangama North, Battaramulla
No. 496/3, High Level Road, Makumbura, Kalutara – 04
Tel:  – 011-2791958  – 011-2791623
Kottawa, Pannipitiya No. 423, Galle Road, Kalutara
Maradana – 02
Tel:  – 011-2781142  – 011-2172501 Tel:  – 034-2221526  – 034-2236750
No. 58, Symonds Road, Colombo 10
Horana – 03
Tel:  – 011-2687269  – 011-2687268
No. 274, Panadura Road, Horana
Tel:  – 034-2265095  – 034-2261474
324 Branch Network PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
Mathugama – 06 Nugegoda – 01
No. 98/2, Agalawatte Road, Mathugama No. 141, High Level Road, Nugegoda
Tel:  – 034-2248059  – 034-2249228 Tel:  – 011-2824115  – 011-2816004
Mathugama – 07 Panadura – 01
North Western
No. 98/2, Agalawatte Road, Mathugama No. 401, Galle Road, Panadaura
Province
Tel:  – 034-2248059  – 034-2249227 Tel:  – 038-2232370  – 038-2240372
Anamaduwa – 01
Minuwangoda – 01 Panadura – 04
Chandrika Motors, 2nd Floor, Chilaw Road,
No. 52B, Negombo Road, Minuwangoda No. 401, Galle Road, Panadaura
Anamaduwa
Tel:  – 011-2295480  – 011-2297122 Tel:  – 038-2232370  – 038-2241289
Tel:  – 032-2263585  – 032-2263343
Minuwangoda – 03 Panadura – 05
Chilaw – 01
No. 52B, Negombo Road, Minuwangoda No. 401, Galle Road, Panadaura
No. 66/1, Puttalam Road, Chilaw
Tel:  – 011-2295480  – 011-2297122 Tel:  – 038-2232370  – 038-2246175
Tel:  – 032-2223310  – 032-2220079
Mirigama – 01 Panadura – 06
Dankotuwa – 01
No. 93B, 1st Floor, Giriulla Road, Mirigama No. 401, Galle Road, Panadaura
No. 90A, Negombo Road, Dankotuwa
Tel:  – 033-2274318  – 033-2275475 Tel:  – 038-2232370  – 038-2246176
Tel:  – 031-2259401  – 031-2253515
Moratuwa – 01 Piliyandala – 01
Dankotuwa – 02
No. 509, Galle Road, Rawathawatte, Moratuwa No. 48/1/1, Colombo Road, Piliyandala
No. 90A, Negombo Road, Dankotuwa
Tel:  – 011-2641843  – 011-2641100 Tel:  – 011-2608450  – 011-2613269
Tel:  – 031-2259401  – 031-2261947
Mount Lavinia – 04 Piliyandala – 04
Galgamuwa – 01
No. 615, Galle Road, Mt. Lavinia No. 48/1/1, Colombo Road, Piliyandala
No. 18, Opposite Pradeshiya Sabawa,
Tel:  – 011-2761654  – 011-2724698 Tel:  – 011-2608450  – 011-2615508
Kurunegala Road, Galgamuwa
Negombo – 01 Ragama – 01 Tel:  – 037-2254002  – 037-2254001
No. 115, 3rd Floor, Greens Road, Negombo No. 61B, Kadawatha Road, Ragama Giriulla – 01
Tel:  – 031-2228006  – 031-2224417 Tel:  – 011-2951698  – 011-2951692
No. 64/1, Kuliyapitiya Road, Narammala
Negombo – 02 Veyangoda – 01 Tel:  – 037-2248965  – 037-2248965
No. 115, Ground Floor, Greens Road, Negombo No. 177 1/1, Negombo Road, Veyangoda Hettipola
Tel:  – 031-2236455  – 031-2236456 Tel:  – 033-2297065  – 033-2297064
No. 152 A, Kandegedara House, Hettipola
Negombo – 03 Wadduwa – 02 Tel:  – 066-2250133  – 066-2250144
No. 115, 2nd Floor, Greens Road, Negombo No. 560/D/1/1, 1st Floor, Galle Road, Wadduwa Kuliyapitiya – 01
Tel:  – 031-2228006  – 031-2236457 Tel:  – 038-2284002  – 038-2285605
No. 257, Madampe Road, Kuliyapitiya
Negombo – 05 Wattala – 01 Tel:  – 037-2281844  – 037-2283348
No. 115, 2nd Floor, Greens Road, Negombo No. 492A, Negombo Road, Wattala Kurunegala – 01
Tel:  – 031-2228006  – 031-2227400 Tel:  – 011-2943354  – 011-2945579
No. 40, Rajapihilla Road, Kurunegala
Negombo – 07 Weliveriya – 01 Tel:  – 037-2223894  – 037-2228880
No. 115, 1st Floor, Greens Road, Negombo No. 43/1, Palliyawatte, New Kandy Road, Kurunegala – 02
Tel:  – 031-2228006  – 031-2238305 Weliveriya
Negombo – 09 Tel:  – 033-2255891  – 032-2256095
Tel:  – 037-2223894  – 037-2222074
No. 115, 4th Floor, Greens Road, Negombo Wellawatte – 01
Kurunegala – 06
Tel:  – 031-2228006  – 031-2232519 No. 124/1, Collingwood Place, Wellawatte,
Colombo 06
Negombo – 11 Tel:  – 037-2223894  – 037-2220713
Tel:  – 011-2362229  – 011-2362339
No. 115, 4th Floor, Greens Road, Negombo Kurunegala – 07
Yakkala – 01
Tel:  – 031-2228006  – 031-2232518

No. 104, Kandy Road, Yakkala
Nittambuwa – 01 Tel:  – 037-2223894  – 037-2220613
Tel:  – 033-2234805  – 033-2234109
No. 198, Kandy Road, Nittambuwa Kurunegala – 08
Yakkala – 02
Tel:  – 033-2295013  – 033-2293632
No. 104, Kandy Road, Yakkala
Nittambuwa – 02 Tel:  – 037-2223894  – 037-2230655
Tel:  – 033-2234805  – 033-2234109
No. 198, Kandy Road, Nittambuwa Maho – 01
Tel:  – 033-2295013  – 033-2294650
Main Street, Maho
Tel:  – 037-2275242  – 037-2275501

Malsiripura Puttalam – 02 Hingurakgoda – 01
Ramyasiri Pharmacy Building, Dambulla Road, No. 116A, Opposite Base Hospital, Kurunegala No. 55, Airport Road, Hingurakgoda
Malsiripura Road, Puttalam Tel:  – 027-2247582  – 027-2246356
Tel:  – 037-3986665  – 037-3986664 Tel:  – 032-2267072  – 032-2267733 Hingurakgoda – 02
Mawathagama Puttalam – 04 No. 55, Airport Road, Hingurakgoda
No. 226/A, Kandy Road, Mawathagama No. 116A, Opposite Base Hospital, Kurunegala Tel:  – 027-2247582  – 027-2245056
Tel:  – 037-2296052  – 037-2296033 Road, Puttalam
Kaduruwela – 01
Mawathagama – 03 Tel:  – 032-2267072  – 032-2267733
No. 245/1, Saw Mill Junction, Kaduruwela
No. 226/A, Kandy Road, Mawathagama Wariyapola
Tel:  – 027-2225957  – 027-2223164
Tel:  – 037-2296052  – 037-2296033 No. 141, Chilaw Road, Wariyapola
Kahatagasdigiliya – 01
Narammala – 01 Tel:  – 037-2268658  – 037-2268643
Anuradhapura Road, Kahatagasdigiliya
No. 64/1, Kuliyapitiya Road, Narammala Wennappuwa – 01
Tel:  – 025-2247002  – 025-2247010
Tel:  – 037-2248965  – 037-2248964 No. 15, Rev. Rex Dias Mawatha, Wennappuwa
Kekirawa – 01
Nattandiya – 01 Tel:  – 031-2255971  – 031-2254832
Opposite Hospital, Maradankadawala Road,
No. 106, Kuliyapitiya Road, Nattandiya Wennappuwa – 05 Kekirawa
Tel:  – 032-2251285  – 032-2255415 No. 15, Rev. Rex Dias Mawatha, Wennappuwa Tel:  – 025-2263069  – 025-2264083
Nattandiya – 02 Tel:  – 031-2255971  – 031-2262592 Medawachchiya – 01
No. 106, Kuliyapitiya Road, Nattandiya Wennappuwa – 07 No. 102, 1st Floor, Jaffna Road, Medawachchiya
Tel:  – 032-2251285  – 032-2252333 No. 15, Rev. Rex Dias Mawatha, Wennappuwa Tel:  – 025-2245962  – 025-2245511
Nattandiya – 03 Tel:  – 031-2255971  – 031-2262594 Nochchiyagama – 01
No. 106, Kuliyapitiya Road, Nattandiya No. 395, Puttalam Road, Nochchiyagama
Tel:  – 032-2251285  – 032-2252330 Tel:  – 025-2257015  – 025-2257542
Nattandiya – 05 Nochchiyagama – 03
Tel:  – 032-2251285  – 032-2252332 Tel:  – 025-2257015  – 025-2257542
Nattandiya – 06 Nochchiyagama – 04
Tel:  – 032-2251285  – 032-2252330 Tel:  – 025-2257015  – 025-2257020
North Central
Nikaweratiya – 01 Padaviya – 01
Province
Senarathne Building, Puttalam Road, Nikaweratiya Opposite Hospital, No. 04, Padaviya
Alawwa – 01
Tel:  – 037-2260960  – 037-2260903 Tel:  – 025-2253010  – 025-2253280
No. 28, Colombo Road, Wariyagoda, Alawwa
Nikaweratiya – 02 Thambuththegama – 01
Tel:  – 037-2277114  – 037-2277113
Senarathne Building, Puttalam Road, Nikaweratiya No. 272, Rajangana Junction, Anuradhapura Road,
Anuradhapura – 01 Thambuththegama
Tel:  – 037-2260960  – 037-2260903
No. 54, Dharmapala Mawatha, Anuradhapura Tel:  – 025-2275492  – 025-2275034
Norochcholai – 01
Tel:  – 025-2234886  – 025-2222004
No. 116A, Opposite Base Hospital, Kurunegala
Road, Puttalam Anuradhapura – 02
Tel:  – 032-2267072  – 032-2266368 No. 54, Dharmapala Mawatha, Anuradhapura
Panduwasnuwara – 01 Tel:  – 025-2234886  – 025-2234377
No. 14, Bogolla Road, Hettipola Anuradhapura – 08
Tel:  – 037-2291929  – 037-2291788 No. 54, Dharmapala Mawatha, Anuradhapura

Tel:  – 025-2234886  – 025-2235302
Eastern
Pannala
Province
No. 112, Negombo Road, Pannala Aralaganwila – 01

No. 26/14, New Town, Aralaganwila Akkaraipattu – 01
Tel:  – 037-2245069  – 037-2245070
Tel:  – 027-2257270  – 027-2257271 No. 288, Main Street, Akkaraipattu
Puttalam – 01
Galenbindunuwewa – 01 Tel:  – 067-2278547  – 067-2278446
No. 116A, Opposite Base Hospital, Kurunegala
Kahatagasdigiliya Road, Galenbindunuwewa Ampara – 01
Road, Puttalam
Tel:  – 032-2267072  – 032-2266101 Tel:  – 025-2258003  – 025-2258004 No. 63A, Lakshmi Building, D S Senanayake
Mawatha, Ampara
Tel:  – 063-2223704  – 063-2222682
Ampara – 02 Valaichchenai Monaragala – 01

No. 63A, Lakshmi Building, D S Senanayake Trinco Road, Valaichchenai No. 75, Sampath Bank Building, 1st Floor,
Mawatha, Ampara Tel:  – 065-2257699  – 065-2258022 Pothuvil Road, Monaragala
Tel:  – 063-2223704  – 063-2222682 Valaichchenai – 02 Tel:  – 055-2277059  – 057-2276332
Batticaloa – 01 Trinco Road, Valaichchenai Monaragala – 03
No. 32, Lloyd’s Avenue, Batticaloa Tel:  – 065-2257699  – 065-2258487 No. 75, Sampath Bank Building, 1st Floor,
Tel:  – 065-2226364  – 065-2226363 Valaichchenai – 03 Pothuvil Road, Monaragala
Batticaloa – 04 Trinco Road, Valaichchenai Tel:  – 055-2277059  –
No. 32, Lloyd’s Avenue, Batticaloa Tel:  – 065-2257699  – 065-2258486 Welimada – 01
Tel:  – 065-2226364  – 065-2227474
No. 11B, Boralanda Road, Welimada
Batticaloa – 06
Tel:  – 057-2244784  – 057-2244565
No. 32, Lloyd’s Avenue, Batticaloa
Welimada – 02
Tel:  – 065-2226364  – 065-2222673
No. 11B, Boralanda Road, Welimada
Chenkalady – 01
Tel:  – 057-2244784  – 057-2244134
Main Street, Chenkalady
Uva Welimada – 04
Tel:  – 065-2054039  – 065-2258078
Province
Dehiyattakandiya – 01 No. 11B, Boralanda Road, Welimada
Badulla – 02 Tel:  – 057-2244784  – 057-2244134
No. 32, Main Street, Dehiattakandiya
No. 07, Badulupitiya Road, Badulla
Tel:  – 027-2250400  – 027-2274099 Wellawaya – 01
Tel:  – 055-2223299  – 055-2228288
Dehiyattakandiya – 03 No. 45/1A, Monaragala Road, Wellawaya
Badulla – 04
No. 32, Main Street, Dehiattakandiya Tel:  – 055-2274911  – 055-2274901
Tel:  – 027-2250400  – 027-2274099 No. 07, Badulupitiya Road, Badulla
Tel:  – 055-2236175  – 055-2242613
Kalmunai – 01
No. 105, 1st Floor, Main Street, Batticaloa Road, Badulla – 05
Kalmunai No. 07, Badulupitiya Road, Badulla
Tel:  – 067-2224531  – 067-2224530 Tel:  – 055-2236175  – 055-2242613
Kalmunai – 02 Bandarawela – 01 Southern
No. 105, 1st Floor, Main Street, Batticaloa Road, No. 496, Badulla Road, Bandarawela Province
Kalmunai Tel:  – 057-2222531  – 057-2232529 Akuressa – 01
Tel:  – 067-2224531  – 067-2225638 Bandarawela – 02 No. 50/1, D C Wanigasekara Road, Akuressa
Kaluwanchikudy – 01 No. 496, Badulla Road, Bandarawela Tel:  – 041-2283971  – 041-2283644
Main Street, Kaluwanchikudy Tel:  – 057-2222531  – 057-2233236 Akuressa – 03
Tel:  – 065-2250062  – 065-2250212
Bandarawela – 04 No. 50/1, D C Wanigasekara Road, Akuressa
Kaluwanchikudy – 03 Tel:  – 041-2283971  – 041-2283970
No. 496, Badulla Road, Bandarawela
Main Street, Kaluwanchikudy Tel:  – 057-2222531  – 057-2233365 Akuressa – 04
Tel:  – 065-2250062  – 065-2251633
Bandarawela – 05 No. 50/1, D C Wanigasekara Road, Akuressa
Kantale – 01
No. 496, Badulla Road, Bandarawela Tel:  – 041-2283971  – 041-2283970
No. 259, 1st Floor, Main Street, Kantale
Tel:  – 057-2222531  – 057-2232065 Aluthgama – 01
Tel:  – 026-2234000  – 026-2234110
Bibile – 01 No. 303, Galle Road, Aluthgama
Trincomalee – 01
Monaragala Junction, Bibile Tel:  – 034-2271557  – 034-2275424
No. 20, Kandy Road, Trincomalee
Tel:  – 055-2265955  – 055-2265950 Ambalangoda – 02
Tel:  – 026-2227724  – 026-2227740
Mahiyangana – 01 No. 17, Kularathne Road, Ambalangoda
Trincomalee – 02
Kandy Road, Mahiyangana Tel:  – 091-2257937  – 091-2258030

Tel:  – 055-2257772  – 055-2257980 Ambalangoda – 04
Tel:  – 026-2227724  – 026-2227303
Mahiyangana – 02 No. 17, Kularathne Road, Ambalangoda
Trincomalee – 05
Kandy Road, Mahiyangana Tel:  – 091-2257937  – 091-2254088
Tel:  – 055-2257772  – 055-2257066 Ambalanthota – 03
Tel:  – 026-2227724  – 026-2055070
No. 177/A, Tangalle Road, Ambalanthota
Trincomalee – 06 Mahiyangana – 03
Tel:  – 047-2225059  – 047-2225242
No. 20, Kandy Road, Trincomalee Kandy Road, Mahiyangana
Tel:  – 026-2227724  – 026-2055070 Tel:  – 055-2257772  – 055-2051499

Baddegama Middeniya – 02 Kandy – 02
No. 112, Diyawagura, Kumme, Baddegama “Nelsha Building”, 1st Floor, Walasmulla Road, No. 65, Kings Street, Kandy
Tel:  – 091-2292130  – 091-2292131 Middeniya Tel:  – 081-2234891  – 081-2234895
Baddegama – 02 Tel:  – 047-2248445  – 047-2248511 Kandy – 05
No. 112, Diyawagura, Kumme, Baddegama Middeniya – 03 No. 65, Kings Street, Kandy
Tel:  – 091-2292130  – 091-2292131 “Nelsha Building”, 1st Floor, Walasmulla Road, Tel:  – 081-2234891  – 081-2234895
Middeniya
Beliatta Kandy – 06
Tel:  – 047-2248445  – 047-2248443
No. 59, Walasmulla Road, Beliatta No. 65, Kings Street, Kandy
Neluwa – 01
Tel:  – 047-2251242  – 047-2251132 Tel:  – 081-2234892  – 081-2234896
Morawaka Road, Neluwa
Deniyaya – 01 Katugastota – 01
Tel:  – 091-2285210  – 091-3919350
No. 153/1, Main Street, Deniyaya No. 278-1/2, 1st Floor, Katugastota Road, Kandy
Sooriyawewa – 01
Tel:  – 041-2273755  – 041-2273407 Tel:  – 081-2213399  – 081-2213400
No. 6712, 1st Floor, Main Street, Sooriyawewa
Elpitiya – 01 Matale – 01
Tel:  – 047-2289221  – 047-2289222
No. 10/1, Pituwala Road, Elpitiya No. 186/2/1, Trincomalee Street, Matale
Tissamaharama – 01
Tel:  – 091-2291312  – 091-2291310 Tel:  – 066-2223203  – 066-2233158
No. 223, Kachcheriyagama, Tissamaharama
Elpitiya – 02 Matale – 02
Tel:  – 047-2239637  – 047-2239057
No. 10/1, Pituwala Road, Elpitiya No. 186/2/1, Trincomalee Street, Matale
Tissamaharama – 03
Tel:  – 091-2291312  – 091-2291036 Tel:  – 066-2223203  – 066-2230205
No. 223, Kachcheriyagama, Tissamaharama
Galle – 01 Matale – 03
Tel:  – 047-2239637  – 047-2237116
No. 60, Colombo Road, Kaluwella, Galle No. 186/2/1, Trincomalee Street, Matale
Uragaha – 01
Tel:  – 091-2234158  – 091 2246010 Tel:  – 066-2223203  – 066-2230205
Aluthgama Road, Uragasmanhandiya
Galle – 02 Matale – 04
Tel:  – 091-2264701  – 091-2264762
No. 60, Colombo Road, Kaluwella, Galle No. 186/2/1, Trincomalee Street, Matale
Tel:  – 091-2234158  – 091-2227450 Tel:  – 066-2223203  – 066-2230205
Galle – 05 Nuwara Eliya – 01
No. 60, Colombo Road, Kaluwella, Galle No. 72, Tharanga Complex, Park Road, Nuwara Eliya
Tel:  – 091-2234158  – 091-2232174 Tel:  – 052-2223185  – 052-2235152
Kamburupitiya – 01 Nuwara Eliya – 02
No. 03, Akuressa Road, Kamburupitiya Central No. 72, Tharanga Complex, Park Road, Nuwara Eliya
Tel:  – 041-2294451  – 041-2294450 Tel:  – 052-2223185  – 052-2235152
Province
Kamburupitiya – 02 Peradeniya – 01
Dambulla – 01
No. 03, Akuressa Road, Kamburupitiya No. 65, Kings Street, Kandy
No. 669, Anuradhapura Road, Dambulla
Tel:  – 041-2294451  – 041-2292522 Tel:  – 081-2387227  – 081-2387228
Tel:  – 066-2285281  – 066-2284523
Matara – 02 Pilimathalawa – 01
Gampola – 01
No. 45, Anagarika Dharmapala Mawatha, Matara No. 169/1, Colombo Road, Pilimathalawa
No. 191/A, Ambagamuwa Road, Gampola
Tel:  – 041-2224824  – 041-2225533 Tel:  – 081 2579707  – 081 2577064
Tel:  – 081-2352769  – 081-2350923
Matara – 03 Pilimathalawa – 03
Gampola – 02
No. 45, Anagarika Dharmapala Mawatha, Matara No. 169/1, Colombo Road, Pilimathalawa
No. 191/A, Ambagamuwa Road, Gampola
Tel:  – 041-2224824  – 041-2236580 Tel:  – 081 2579707  – 081 2577064
Tel:  – 081-2352769  – 081-2065879
Matara – 04 Rikillagaskada – 01
Hatton – 01
No. 45, Anagarika Dharmapala Mawatha, Matara No. 127, Kandy Road, Rikillagaskada
No. 66, Liberty Building, Dunbar Road, Hatton
Tel:  – 041-2224824  – 041-2236579 Tel:  – 081-3993360  – 081-3808908
Tel:  – 051-2224480  – 051-2224629

Matara – 06 Teldeniya – 01
Hatton – 02
No. 45, Anagarika Dharmapala Mawatha, Matara No. 226/3, Kandy Road, Teldeniya
No. 66, Liberty Building, Dunbar Road, Hatton
Tel:  – 041-2224824  – 041-2233703 Tel:  – 081-3808909  – 081-3993575
Tel:  – 051-2224480  – 051-2261300
Middeniya – 01 Wattegama – 01
Kandy – 01
“Nelsha Building”, 1st Floor, Walasmulla Road, No. 97, Matale Road, Wattegama
No. 65, Kings Street, Kandy
Middeniya Tel:  – 081-2476974  – 081-2476975
Tel:  – 081-2234803  – 081-2236407
Tel:  – 047-2248445  – 047-2248444
Ratnapura – 02 Jaffna – 06
No. 45, Dharmapala Mawatha, Ratnapura No. 37, Kannathiddy Road, Jaffna
Tel:  – 045-2224036  – 045-2224901 Tel:  – 021-2225061  – 021-2219937
Ratnapura – 03 Kilinochchi – 01
Sabaragamuwa
No. 45, Dharmapala Mawatha, Ratnapura No. 32, A9 Kandy Road, Killinochchi
Province
Tel:  – 045-2224036  – 045-2230165 Tel:  – 021-2060973  – 021-2060972
Balangoda – 01 Ratnapura – 04 Mannar – 01
No. 118, Barnes Ratwatte Mawatha, Balangoda
No. 45, Dharmapala Mawatha, Ratnapura Parameshwary Building, Hospital Road, Mannar
Tel:  – 045-2286654  – 045-2287474
Tel:  – 045-2224036  – 045-2230165 Tel:  – 023-2223211  – 023-2223210
Balangoda – 03
Ruwanwella – 01 Manipay – 01
No. 93 1/1, Main Street, Ruwanwella Sangarapillai Road, Manipay
Tel:  – 045-2286654  – 045-2287474
Tel:  – 036-2268696  – 036-2268686 Tel:  – 021-2255296  – 021-2255997
Balangoda – 04
Warakapola – 01 Nelliady – 01
No. 177, Kandy Road, Warakapola Kathigesu Building, Point Pedro Road, Nelliady
Tel:  – 045-2286654  – 045-2287474
Tel:  – 035-2268420  – 035-2267823 Tel:  – 021-2264807  – 021-2264183
Eheliyagoda – 01
Nelliady – 02
No. 13/1/1, Main Street, Eheliyagoda
Kathigesu Building, Point Pedro Road, Nelliady
Tel:  – 036-2259964  – 036-2259963
Tel:  – 021-2264807  – 021-2262807
Embilipitiya – 01
Nelliady – 03
No. 122, 1st Floor, New Town Road, Embilipitiya Northern
Tel:  – 047-2230023  – 047-2261071 Province
Tel:  – 021-2264807  – 021-2264050
Embilipitiya – 02 Achchuveli – 01 Nelliady – 04
No. 122, 1st Floor, New Town Road, Embilipitiya Raja Vidhee, Achchuveli
Tel:  – 047-2230023  – 047-2261562 Tel:  – 021-2058044  – 021-2058045
Tel:  – 021-2264807  – 021-2261300
Embilipitiya – 03 Achchuveli – 03
Vavuniya – 01
No. 122, 1st Floor, New Town Road, Embilipitiya Raja Vidhee, Achchuveli
No. 52, 2nd Cross Street, Vavuniya
Tel:  – 047-2230023  – 047-2261218 Tel:  – 021-2058044  – 021-2058045
Tel:  – 024-2221536  – 024-2221584
Godakawela – 01 Chavakachcheri – 01
Vavuniya – 02
2nd Floor, Saru Building, Main Street, Godakawela No. 179, 2nd Floor, Kandy Road, Chavakachcheri
Tel:  – 045-2240792  – 045-2240791 Tel:  – 021-2270725  – 021-2270064
Tel:  – 024-2221536  – 024-3248128
Kalawana – 01 Chavakachcheri – 02
Vavuniya – 03
Rathnapura Road, Manana, Kalawana No. 179, 2nd Floor, Kandy Road, Chavakachcheri
Tel:  – 045-2255989  – 045-2255955 Tel:  – 021-2270725  – 021-2270064
Tel:  – 024-2221536  – 024-2227265
Kegalle – 03 Chunnagam – 01
Vavuniya – 05
No. 290/28, Main Street, Kegalle No. 145, K K S Road, Chunnagam
Tel:  – 035-2222280  – 035-2223126 Tel:  – 021-2242099  – 021-2240274
Tel:  – 024-2221536  – 024-2227265
Mawanella – 01 Chunnagam – 02
No. 269, Kandy Road, Beligammana, Mawanella No. 145, K K S Road, Chunnagam
Tel:  – 035 2247777  – 035 2247092 Tel:  – 021-3216413  – 021-2242274
Pelmadulla – 01 Jaffna – 01
No. 122A, Main Street, Pelmadulla No. 37, Kannathiddy Road, Jaffna
Tel:  – 045-2275985  – 045-2275984 Tel:  – 021-2225061  – 021-2228488
Rambukkana – 01 Jaffna – 04
No. 152, Kurunegala Road, Rambukkana No. 37, Kannathiddy Road, Jaffna
Tel:  – 035-2266451  – 035-2266450 Tel:  – 021-2225061  – 021-2219937
Ratnapura – 01 Jaffna – 05
No. 45, Dharmapala Mawatha, Ratnapura No. 37, Kannathiddy Road, Jaffna
Tel:  – 045-2224036  – 045-2230049 Tel:  – 021-2225061  – 021-2219937
GLOSSARY OF 329
KEY TERMS
1. Acquisition Expenses – Long-Term Insurance 7. Bonus 14. Earnings Per Share

All expenses which vary with and are Bonus is a method of distribution of surplus Net profits of the Company after tax,
primarily related to, the acquisition of new amongst the participating policyholders of divided by the number of ordinary shares
insurance contracts. a Life Insurance Company. A bonus is an in issue.
enhancement to the basic sum assured
2. Actuary under a contract and is declared as a 15. Gross Written Premium – Life
percentage of the sum assured.
An expert concerned with the application Premium to which the insurer is
of probability and statistical theory to contractually entitled and receivable in the
problems of insurance, investment, 8. Claims accounting period.
financial management and demography. The amount payable under a contract of
insurance arising from the occurrence of an 16. Global Reporting Initiative (GRI)
3. Actuarial Valuation insured event.
A leading organisation in the sustainability
A determination by an actuary at a specific field. GRI promotes the use of sustainability
date of the value of a life insurance 9. Claim Incurred reporting as a way for organisations to
company’s assets and its liabilities. The The aggregate of all claims paid during become more sustainable and contribute
purpose of a valuation is to ensure that the the accounting period together with to sustainable development allied with the
Company holds adequate assets to fund attributable claims handling expenses, UN Global Compact.
the Company’s liabilities. where appropriate, adjusted by the gross
claims reserve at the beginning and end of 17. Insurance
4. Admissible Assets the accounting period.
Insurance is a contract whereby one party-
Assets that are included in determining the insurer, in return for a consideration
an insurer’s statutory solvency margin, 10. Claims Outstanding – Long-Term Insurance i.e, the premium, undertakes to pay to
specified under the rules made by the The amounts provided to cover the the other party – the insured, a sum of
IRCSL under the regulation of Insurance estimated ultimate cost of settling claims money or its equivalent in kind, upon the
Industry Act No. 43 of 2000. arising out of events which have been happening of a specified event that is
notified by the Balance Sheet date, being contrary to the interest of the insured.
5. Annuity sums due to beneficiaries together with
claims handling expenses, less amounts 18. Insurance Provision – Life
A series of regular payments. Annuities
already paid in respect of those claims.
include annuities certain, where payments The funds or funds to be maintained by
are made at definite times and life an insurer in respect of its life insurance
annuities where payments depend on the 11. Commission business in accordance with the Regulation
survival of an annuitant. A life annuity is a Remuneration to an intermediary for of Insurance Industry Act No. 43 of 2000.
contract that provides a regular payment, services such as selling and servicing an
typically monthly, during the life time of insurer’s products. This is one component 19. Interim Payments
the policyholder or a fixed period if less. of acquisition expenses.
Periodic payments to the policyholders on
If the payment starts at the outset of the
a specific type of policy.
contract, it is an immediate annuity. If it 12. Dividend Cover
starts at some point in the future, it is a
Profits after tax divided by dividend 20. Life Surplus
deferred annuity.
measures the number of times dividends
The excess of the assets over the liabilities
are covered by distributable profits for
as determined by the actuary and after the
6. Beneficiary the period.
distribution of dividends to policyholders.
The person or financial institution (for e.g.
a trust fund) named in the policy as the 13. Earned Premium
recipient of insurance money in the event 21. Lapsed Policy
Written premium adjusted by the unearned
of the policyholder’s death. A policy terminated at the end of the
premium reserve at the beginning and end
grace period because of non-payment
of the accounting period.
of premiums.
330 GLOSSARY OF KEY TERMS PREAMBLE MESSAGES AND MANAGEMENT PROFILES BUSINESS MODEL MANAGEMENT DISCUSSION AND ANALYSIS
22. Life Insurance Business company deducts the amount borrowed,

Insurance (including reinsurance) business plus any accumulated interest, from the
falling within the classes of insurance amount payable.
specified as Long-Term Insurance Business
under the Regulation of Insurance Industry 31. Price Earning Ratio
Act No. 43 of 2000. Market price of a share divided by earnings
per share.
23. Market Capitalisation
Number of shares in issue multiplied by 32. Premium
the market value of each share as at the The payment, or one of the periodic
Balance Sheet date. payments, a policyholder agrees to make
for an insurance policy. Depending on
24. Maturity the terms of the policy, the premium may
The time at which payment of the sum be paid in one payment or a series of
insured under a life insurance policy falls regular payments.
due at the end of its term.
33. Reinsurance Commission
25. Net Earned Premium Commission received or receivable in
Gross written premium adjusted for the respect of premium paid or payable to a
reinsurance incurred and for the increase or reinsurer.
decrease in unearned premium.
34. Reinsurance Premium
26. Net Assets Per Share The premium payable to the reinsurer.
Net assets attributable to shareholders’
equity divided by the number of ordinary 35. Return on Shareholders’ Equity
shares issued. Profits after tax divided by the Capital
employed as at Balance Sheet date.
27. Net Written Premium
Gross written premium less reinsurance 36. Return on Total Assets
payable. Profits after tax divided by total assets
attributable to shareholders.
28. Net Claims Incurred
Claims incurred less reinsurance recoveries. 37. Revenue Reserve
An account which shows a financial
29. Policy summary of the insurance related revenue
The printed document issued to the transactions for the accounting period.
policyholder by the Company stating the
terms of the insurance contract. 38. Risk-based Capital (RBC)
An amount of capital based on an
30. Policy Loan assessment of risks that a company should
Under an insurance policy, the amount hold to protect policyholders against
that can be borrowed at a specific rate adverse developments.
of interest from the issuing company by
the policyholder, who used the value of 39. Surrender
the policy as collateral for the loan. In the The amounts refundable to life
event the policyholder dies with the debt policyholders when they terminate their
partially or fully unpaid, the insurance insurance contracts after a specific period.
STAKEHOLDER
FEEDBACK FORM
Your opinion matters, please share your views with us.

___________________________________________________________________________________________________________________
Which stakeholder group you belong to?
Employee Supplier
Shareholder Community
Investor Customer NGO
Analyst Other
Does the report address issues of greatest interest to you?
Comprehensively
Partially
Not at all
Please identify any additional matters that you think should be reported on?
…………………………………………………………………………………………………………………………………………………………………………………………………..............…....
…………………………………………………………………………………………………………………………………………………………………………………………………..............…....
…………………………………………………………………………………………………………………………………………………………………………………………………..............…....
What was your overall impression of the Report in terms of:
Excellent Good Fair Poor

1. Content and scope
2. Design and layout
Do you have any additional comment on the Report?
…………………………………………………………………………………………………………………………………………………………………………………………………..............…....
……………………………………………………………………………………………..............……………………………………………………………………………………………….............
…………………………………………………………………………………………..........................................................................................................................…………….
To request information or submit a comment/query to the Company, please provide the following details and return this page to:
The Company Secretary,

Ceylinco Life Insurance Limited,
No. 106, Havelock Road,
Colombo 05,
Sri Lanka
Name : …………………………………………………………………………………………………………………………………………….……
Permanent Mailing Address : ……………………………………………………………………………………………………………………………………………….…
Contact Numbers
– Tel : ………………………………………………………………………………………………………………………………...................…
– Fax : …………………………………………………………………………………………………………………………………………….......
– E-mail : …………………………………………………………………………………………………………………………………………....……
Name of the Company (if applicable) : …………………………………………………………………………………………………………………………………………....……
Designation (if applicable) : ……………………………………………………………………………………………………………………………………………....…
Company address (if applicable) : ……………………………………………………………………………………………………………………………………………....…
CORPORATE INFORMATION
Company name Bankers E T L Ranasinghe – Deputy CEO
– Executive Director
Ceylinco Life Insurance Limited Bank of Ceylon
P D M Cooray – Head of HR and Training
Commercial Bank of Ceylon PLC – Executive Director
Registered office Deutsche Bank AG (Custodian Bank)
Palitha Jayawardena – Chief Financial
DFCC Bank PLC Officer – Executive Director
No. 106, Havelock Road, Colombo 05,
Hatton National Bank PLC
Sri Lanka Ranga Abeynayake – Deputy Chief Financial
National Savings Bank Officer – Executive Director
Nations Trust Bank PLC
Company registration National Development Bank PLC
D H J Gunawardena – Non-Executive
Director
number Pan Asia Banking Corporation PLC
Gen C S Weerasooriya (Retired)
PB 5183 People’s Bank – Non-Executive Director
Sampath Bank PLC
R S W Senanayake – Non-Executive Director
Standard Chartered Bank
Legal form J A Setukavalar – Independent
Seylan Bank PLC
A Public Company with limited liability – Non-Executive Director
Union Bank of Colombo Limited
incorporated on 22 April 2014, Licensed Prof Mohan de Silva – Independent
as a Company authorised by the Insurance – Non-Executive Director
Regulatory Commission of Sri Lanka Consulting actuaries Dr B G S de Silva – Independent
(IRCSL) formerly known as Insurance Board Towers Watson Consulting – Non-Executive Director
of Sri Lanka (IBSL) to carry-on long-term (Singapore) Pte. Limited J Wickramasinghe – Independent
life insurance business under No. 135, Cecil Street, – Non-Executive Director
the Regulation of Insurance Industry #09-01, Singapore 069536
Act No. 43 of 2000 as amended. Sugath Caldera – Independent
– Non-Executive Director
Accounting year end Ms A K Seneviratne – Independent
Main place of business – Non-Executive Director
31 December
No. 106, Havelock Road, Colombo 05,
Sri Lanka
Board of Directors Company secretary
Telephone : +94 11 4261000 A C H Waidyasekara
J Godwin Perera – Chairman
Call Centre : +94 11 2461461 (Hotline) – Non-Executive Director
Fax : +94 11 2437613,
R Renganathan – Managing Director/CEO Compliance officer
+94 11 2555959
– Executive Director Ranga Abeynayake
Email : service@ceylife.lk
Website : www.ceylincolife.com
Principal activities
Underwriting all classes of life insurance
Subsidiaries
Ceylinco Healthcare Services Limited
Ceylinco Seraka Limited
Associate company
Citizen Development Business Finance PLC
Auditors
Ernst & Young
Chartered Accountants
No. 201, De Saram Place,
Colombo 10
Ceylinco Life Insurance Limited
No. 106, Havelock Road, Colombo 5, Sri Lanka.
T: +94 11 246 1000 F: +94 11 255 5959 E: service@ceylife.lk W: www.ceylincolife.com

Ceylinco Life Insurance Limited - IAR 2017 PDF

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Ceylinco Life Insurance Limited - IAR 2017 PDF

Hochgeladen von

Copyright:

Verfügbare Formate

Ceylinco Life Insurance Limited Integrated Annual Report 2017

1–10 Preamble 37–79 Business Model

About this Report 06 Organisational Overview 38

Highlights of the Year 08 Operating Environment 42

Our Business Model 67

11–36 Messages and Stakeholders and Materiality 70

Chief Executive Officer’s Review 16

Managers 34 Intellectual Capital 92

Social and Relationship Capital 104

– Investor Capital 106

– Customer Capital 108

– Business Partner Capital 119

– Social Capital 126

Employee Capital 132

Natural Capital 148

157–216 Stewardship 217–308 Financial Reports

INTEGRATED ANNUAL REPORT 2017

Ten Year Summary 312

GRI Content Index 316

Sustainability Assurance Report 321

Branch Network 322

Glossary of Key Terms 329

Stakeholder Feedback Form – Enclosed

“We have nearly one million Sri Lankan lives covered

INTEGRATED ANNUAL REPORT 2017

This Report presents a detailed yet

concise account of the Company’s value This is the third consecutive

The Annual Report 2017 discusses

INTEGRATED ANNUAL REPORT 2017

Year Ended 31 December 2017 2016 Change

Results for the Year

Position at the Year End

Year Ended 31 December 2017 2016 Change

Per Ordinary Share

Capital Adequacy Ratio

INTEGRATED ANNUAL REPORT 2017

Indicator 2017 2016

Business partner capital

Social and environmental capital

INTEGRATED ANNUAL REPORT 2017

Chief Executive Officer’s Review 16

Dynamic vision and bold choices, together

INTEGRATED ANNUAL REPORT 2017

INTEGRATED ANNUAL REPORT 2017

INTEGRATED ANNUAL REPORT 2017

Total assets grew by a noteworthy 10% to

INTEGRATED ANNUAL REPORT 2017

Our net profit reflects a robust growth of 207.5%

INTEGRATED ANNUAL REPORT 2017

as a Director with effect re-election as a Director (as at served on

J Godwin Perera 10 April 2014 30 March 2017 3 years None

R Renganathan 10 April 2014 N/A* 3 years Chairman –

E T L Ranasinghe 10 April 2014 N/A* 3 years Member –

P D M Cooray 10 April 2014 N/A* 3 years None

* Refer page 176

Academic/professional Skill and Experience Other Current Appointments Previous Appointments

INTEGRATED ANNUAL REPORT 2017

He functioned as the MD/CEO of Ceylinco

Palitha Jayawardena 10 April 2014 N/A* 3 years Member –

Ranga Abeynayake 10 April 2014 N/A* 3 years Member –

Herschel Gunawardena 10 April 2014 30 March 2017 3 years Chairman –

Gen C S Weerasooriya 10 April 2014 30 March 2017 3 years None

* Refer page 176