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2Union Assurance PLC

Interim Report 06 months ended 30 June

Balance Sheet

Unaudited Auditedas at as at

As at 30.06.20Rs. 000 Rs. 000

AssetsInvestments 13,551,462 12,817,417Investments -unit linked 312,535 168,109Quoted equities at market value 1,244,640 767,431Intangible assets 49,500 49,500Property, plant and equipment 1,109,948 1,108,723Loans to lie policyholders 243,883 232,618Reinsurance receivable 628,342 579,009Premiums receivable 813,118 1,237,594Other assets 1,718,837 1,540,932Other assets - unit linked 1,541 11,157Cash and cash equivalents 412,754 390,138Total assets 20,086,559 18,902,628Liabilities and equityLiabilitiesInsurance provision - lie-conventional 12,912,819 11,769,308Insurance provision - unit linked 315,600 165,835Insurance provision - general 2,790,447 2,716,888Reinsurance payable 460,305 405,764Retirement beneft obligation 140,089 132,422Other liabilities 765,172 898,429Other liabilities - unit linked 1,758 13,672Current tax liabilities 105,712 81,558Deerred tax liability 13,948 13,948

Bank overdrat 58,620 71,695Total liabilities 17,564,470 16,269,519EquityStated capital 388,433 388,433Capital reserves 584,178 584,178Revenue reserves 1,549,478 1,660,498Total equity 2,522,089 2,633,109Total liabilities and equity 20,086,559 18,902,628The notes to the interim fnancial statements orm an integral part o the interim fnancial statements.

I certiy that the above fnancial statements comply with the requirements o the Companies Act No. 7 o 2007

Indika PrematungaChie Financial Ofcer

The Board o Directors is responsible or the preparation and presentation o these fnancial statementsSigned on behal o the Board

A D Gunewardene J.R.F.Peiris

Chairman Director

Colombo02 August 2011

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Statement of Income

For the 06 months ended 30 June Note 2011 2010 Change

Rs. 000 Rs. 000 %

Revenue 4 4,307,687 3,609,503 19

Gross written premium 5 3,973,949 3,111,783 28

Less: premium ceded to reinsurers (551,653) (519,205) 6

Net written premium 3,422,296 2,592,578 32

Net change in reserve or unearned premium (9,031) (15,105) (40)

Net earned premium 3,413,265 2,577,473 32

Benets, losses and expenses

Insurance claims and benefts (net) (1,356,046) (1,166,481) 16

Increase in provision or lie business (1,292,231) (1,066,333) 21

Underwriting and net acquisition costs

(including reinsurance) (526,934) (366,755) 44

Total benets, losses and expenses (3,175,211) (2,599,569) 22

Net premium less benets, losses and expenses 238,054 (22,096) (1,177)

Other revenue

Income rom investments 849,507 985,645 (14)

Other income 44,914 46,385 (3)

Expenses

Other operating, investment related and

administrative expenses (922,284) (811,186) 14

Depreciation on property, plant and equipment (62,194) (49,936) 25

Prot beore income tax 6 147,998 148,812 (1)

Income tax expense 7 (24,643) (44,318) (44)

Prot ater taxation 123,355 104,494 18

Earnings Per Share (Rs.) 1.64 1.39

(Restated)

The notes to the interim fnancial statements orm an integral part o the interim fnancial statements.

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Statement of Income

For the 03 months ended 30 June 2011 2011 2010 Change

Rs. 000 Rs. 000 %

Revenue 2,095,614 1,862,312 13

Gross written premium 1,899,386 1,499,566 27

Less: premium ceded to reinsurers (233,924) (223,969) 4

Net written premium 1,665,462 1,275,597 31

Net change in reserve or unearned premium 54,632 14,259 283

Net earned premium 1,720,094 1,289,856 33

Benets, losses and expenses

Insurance claims and benefts (net) (672,656) (546,342) 23

Increase in provision or lie business (563,270) (608,436) (7)

Underwriting and net acquisition costs

(including reinsurance) (267,808) (179,814) 49

Total benets, losses and expenses (1,503,734) (1,334,592) 13

Net premium less benets, losses and expenses 216,360 (44,736) (584)

Other revenue

Income rom investments 354,835 538,415 (34)

Other income 20,685 34,041 (39)

Expenses

Other operating, investment related and

administrative expenses (483,066) (422,959) 14

Depreciation on property, plant and equipment (32,752) (26,071) 26

Prot beore income tax 76,062 78,690 (3)

Income tax expense (11,515) (25,325) (55)

Prot ater taxation 64,547 53,365 21

Earnings Per Share (Rs.) 0.86 0.71

(Restated)

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Statement of changes in Equity

Capital reserves

For the 6 months ended Stated Revaluation Reserve on Retained

30 June 2011 capital reserve merger earnings Total

Rs. 000 Rs. 000 Rs. 000 Rs. 000 Rs. 000

Balance as at 01 January 2010 388,433 567,607 16,752 1,332,359 2,305,151

Final dividend 2009 - - - (187,500) (187,500)

Net proft or the period - - - 104,494 104,494

Unaudited balance as at

30 June 2010 388,433 567,607 16,752 1,249,353 2,222,145

Tax eect o revaluation reversed

in equity - 3,487 - - 3,487

Transer rom revaluation reserve

to retained earnings - (3,668) - 3,668 -


Balance as at 31 December 2010 388,433 567,426 16,752 1,660,498 2,633,109

Final dividend 2010 - - - (234,375) (234,375)


Balance as at 30 June 2011 388,433 567,426 16,752 1,549,478 2,522,089

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Cash Flow Statement

For the 6 Months ended 30 June 2011 2010

Rs. 000 Rs. 000Cash fow rom operating activitiesPremium received rom customers 4,398,425 3,155,762

Reinsurance premium paid (412,243) (404,104)Claims paid (1,464,699) (1,177,143)Reinsurance receipts in respects o claims 126,593 75,456Cash paid to and on behal o employees (446,372) (348,220)Interest received 789,462 909,060Dividends received 8,813 60Other operating cash payments (1,257,810) (1,078,145)Cash fow rom operating activities (Note A) 1,742,170 1,132,724Retiring gratuity paid (2,661) (8,299)Income tax and ESC paid (31,543) (12,828)Net cash rom operating activities 1,707,967 1,111,598

Cash fow rom investing activities Acquisition o liquid investments (other than cash equivalents) (1,598,581) (582,247) Acquisition o other investments (other than cash equivalents) (1,524,753) (2,075,229)Proceeds rom Sale rom liquid investments (other than cash equivalents) 886,902 264,735Proceeds rom Sale rom other investments (other than cash equivalents) 834,825 1,511,002 Acquisition o property, plant and equipment (63,452) (56,942)Proceeds on sale o property, plant and equipment 4,374 4,353Net cash rom investing activities (1,460,684) (934,328)

Net cash infow beore nancing activities 247,282 177,270Cash fow rom nancing activities

Dividends paid (211,238) (187,500)Net cash rom nancing activities (211,238) (187,500)Increase in cash and cash equivalents (Note B) 36,045 (10,230)Notes to the cash fow statementA. Reconciliation o prot beore taxation with

cash rom operating activitiesProft beore taxation 147,998 148,812Depreciation on property, plant and equipment 62,194 49,936Change in debtors 202,422 (54,941)Change in lie insurance und 1,315,836 1,066,333Change in unearned premiums and deerred

acquisition costs 11,901 7,046

Change in claims provisions 67,273 158,947Change in creditors (85,566) (96,268)Exchange (gain) / loss 353 (207)(Gain) on sale o property, plant and equipment (4,341) (4,353)Loss /(proft) on sale o investments and unrealised loss/(gain) on equities 13,773 (146,735)Change in provision or retiring gratuity 10,328 4,155Cash rom operating activities 1,742,170 1,132,724B. Increase in cash and cash equivalentsCash at bank and in hand and cash equivalents 412,754 296,602Bank overdrat (58,620) (56,913)Net cash at bank and in hand and cash equivalents 354,135 239,689Eect o exchange rate changes 353 (207)

Net cash and cash equivalents or the current period 354,488 239,482Net cash and cash equivalents or the previous year 318,443 249,712Increase/(Decrease) in cash and cash equivalents 36,045 (10,230)

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Notes to the Financial Statements

1. Accounting policies and methods o computation as stated in the annual report 2010 are

ollowed in the preparation o these interim fnancial statements . Further, provisions o the

new Companies Act No. 7 o 2007 have been considered in preparing the interim fnancial

statements o the Company.

2. Figures or the six months are provisional and subject to audit

3. Comparative inormation has not been restated.

4. Revenue

Unaudited Unaudited

For the 6 months ended 30th June 2011 2010

Rs. 000 Rs. 000

General 1,697,541 1,354,129

Lie 2,610,145 2,255,374

Total 4,307,687 3,609,503

General revenue consists o net earned premium and income rom investments and other income.

Lie revenue consists o net written premium and income rom investments and other income.

5. Gross written premium

Unaudited Unaudited


Rs. 000 Rs. 000

General 1,938,077 1,593,553

Lie 2,035,873 1,518,230

3,973,949 3,111,783

6. Prot beore income tax

Unaudited Unaudited


Rs. 000 Rs. 000

General 147,998 148,812

Lie - -

Total 147,998 148,812

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Notes to the Financial Statements contd.

7. Income tax expense

Unaudited Unaudited


Rs. 000 Rs. 000

Income tax on current year proft 24,643 43,663

Social responsibility levy - 655

Total income tax expense or the period 24,643 44,318

8. No provision or appropriation has been made in respect o transer to or rom lie und.

9. Stated capital represented by shares in issue as given below:

Unaudited Audited

Number o shares as at 30.6.2011 31.12.2010

Ordinary shares 75,000,000 37,500,000

10. Events ater the Balance Sheet date

There have been no material events subsequent to the balance sheet date, that require adjustments

to or disclosure in the interim fnancial statements.

11. New standards and interpretations not yet adopted

The Institute o Chartered Accountants o Sri Lanka (ICASL) has issued a new volume o Sri Lanka

Accounting Standards 2011, applicable or fnancial periods beginning on or ater 1 January 2012.

These Standards have many changes and consequential changes rom the adoption o SLAS 44and 45. These new accounting standards are prefxed both SLFRS and LKAS which correspond to

the relevant IFRS and IAS. The ollowing accounting standards are newly adopted to the Sri Lankan

fnancial ramework and directly relate to the insurance industry.

1. SLFRS 1- First-time adoption o Sri Lanka Accounting Standards

2. SLFRS 4 - Insurance Contracts

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Accounting Standards which relates to fnancial instruments are presented below as a summary orm;

1. Sri Lanka Accounting Standard 32 - Financial Instruments: Presentation (LKAS 32)

2. Sri Lanka Accounting Standard 39 - Financial Instruments: Recognition and Measurement

(LKAS 39)3. Sri Lanka Accounting Standard 6 - Financial Instruments: Disclosures (SLFRS 7)

12. The nature o the related party transactions in the current period is similar to those reported in the

Audited Financial Statements 2010.

13. At an Extraordinary General Meeting held on 23rd June 2011,the shareholders approved a sub

division o the company shares, whereby one (1) existing share was sub divided in to two (2),

thereby increasing the ordinary shares in issue rom 37,500,000 to 75,000,000 ordinary shares.

For the purpose o calculating Earnings Per Share (EPS), the increased number o ordinary shares

has been considered or all periods.

14. In the opinion o Directors and in consultation with the company lawyers litigation currently

pending against the company will not have a material impact on the reported results or uture

operations o the company.

All pending litigation or claims have been evaluated and adequate provisions have been made in

the fnancial statements.

15. Share Inormation

30.06.2011 30.06.2010 31.12.2010

Rs. Rs. Rs.

Net assets per share 67.26 59.29 70.22

Market price per share 106.70 115.50 122.10

Highest price per share or the period 299.00 119.50 198.00

Lowest price per share or the period 100.00 94.00 90.75

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Notes to the Financial Statements contd.

16. Twenty Largest Shareholders

30th June 2011

Name o Shareholder No. o Shares %

1 John Keells Holdings PLC 63,695,530 84.932 Whittall Boustead Limited 5,552,618 7.403 Mackinnons & Keells Financial services Limited 2,492,336 3.324 Waldock Mackenzie Ltd/Hi-Line Trading (Pvt) Ltd 329,400 0.445 Waldock Mackenzie Ltd/S.N.P.Palihena and

Waldock Mackenzie Ltd/S.N.P.Palihena and A.S.Palihena 301,000 0.406 R. Senathirajah 121,206 0.167 J.D. Bandaranayake 65,400 0.098 A.A. Mashoor 45,600 0.069 H.A.D. Ratnapala 56,250 0.0810 J.W. Nanayakkara 56,250 0.0811 R.Z. Wikramanayake 48,364 0.06

12 N.I. Wikramanayake 47,978 0.0613 G.M. Abdulhussein 41,810 0.0614 T.G. Perera 39,000 0.0515 H.A. Rehmanjee 37,122 0.0516 L. Amaradasa 33,750 0.0517 S. Nishyanthan 30,300 0.0418 M.R. Wijetunga 28,124 0.0419 A.C. Visvalingam 69,600 0.0920 S. Vasudewan 25,200 0.03

73,116,838 97.49Others 1,883,162 2.51

Total 75,000,000 100.00

17. Directors Shareholdings

No. o Shares No. o Shares

30.06.2011 31.12.2010

Mr.A.D. Gunewardene 7,492 3,746Mr.J.R.F. Peiris Nil NilMr.K. N. J. Balendra Nil NilMr.A. K. Gunaratne 3,200 1,600Mr.A. S. De Zoysa Nil Nil

Mr.G. F. C. De Saram Nil Nil

18. Share holding-Chie Executive Ocer

Mr. Dirk Pereira Nil Nil

19. Public Shareholding

30.06.2011 31.12.2010

No. o Shares % o Shares No. o Shares % o Shares

Public shareholding 3,248,824 4.33% 7,228,612 19.28

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Supplementary Information - Balance sheet of the life insurance fund

Unaudited Audited

As at 30.06.2011

Rs. 000 Rs. 000

Assets

Investments 10,139,767 9,840,485

Investments -unit linked 312,535 168,109

Quoted equities at market value 1,168,854 766,291

Property, plant and equipment 923,432 912,001

Loans to lie policyholders 243,883 232,618

Reinsurance receivable 53,348 49,785

Other assets 803,641 738,270

Other assets-unit linked 1,541 11,157

Cash and cash equivalents 216,605 269,127

Total assets 13,863,604 12,987,842

Reserves

Reserve on Cornhill merger 16,752 16,752

Revaluation reserve 91,566 91,566

108,318 108,318

Liabilities

Insurance provision-lie-conventional 12,912,818 11,769,308

Insurance provision - unit linked 315,600 165,834

Reinsurance creditors 89,055 42,681

Provision or retirement benefts 88,057 81,949

Other liabilities 323,093 776,969

Other liabilities- unit linked 1,758 13,672

Bank overdrat 24,904 29,109

Total liabilities 13,755,286 12,879,523

Total liabilities and reserves 13,863,604 12,987,842

Insurance Provision - lie

As at 30.06.2011

Rs. 000 Rs. 000

Insurance Provision - lie 12,717,002 11,579,107

Unclaimed benefts 195,816 190,201

Total 12,912,818 11,769,308

ual_jun2011

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