2.1 Formation

CLIL is a Public Company with limited liability, incorporated on 22nd April 2014, bearing Registration No. PB 5183, licensed as an insurance company by the Insurance Regulatory Commission of Sri Lanka (IRCSL) to carry on long-term life insurance business, under the Regulation of Insurance Industry Act No. 43 of 2000 (as amended). The Company was incorporated as a legal requirement that arose out of Section 53 of an amendment to the said Act, which required segregating the long term and general insurance business from the composite insurance Companies. The Company is domiciled in Sri Lanka and the registered office and the Head Office is situated at No. 106, Havelock Road, Colombo 05.

2.2 Corporate Vision, Mission and Values

The Company is strategically aligned to its Vision and Purpose which are set out on pages 14-15 of the Annual Report. The Board of Directors and the employees collectively conduct their activities adhering to the highest level of ethics reflecting their unwavering commitment to maintain high standards of business conduct and transparency.

2.3 Principal Activity

The Company’s principal activity is underwriting all classes of Life Insurance, which has remained unchanged since it received the license to carry out its business as a long-term insurance provider from the IRCSL on 01st June 2015.

The Directors declared that the Company did not engage in any activity, which contravenes with laws and regulations of the country during the said period.

The ultimate Holding Company is Ceylinco Holdings PLC. Subsidiaries of the Company as of 31st December 2024 were Serene Resorts Limited and Ceylinco Healthcare Services Limited. Citizens Development Business Finance PLC and Kings Hospital Colombo (Pvt) Ltd were Associate Companies of CLIL.

Ceylinco Healthcare Services Limited

CLIL holds a 99.60% stake, and the registered number of the Company is PB 135.

Ceylinco Healthcare Services Limited was established in 2000 and it is one of the most specialized cancer care hospitals in Sri Lanka, with the latest state-of-the-art equipment and services.

Serene Resorts Limited

CLIL holds a 98.88% stake, and the registered Number of the Company is PB 19.

Serene Resorts Limited seeks to provide assisted retirement living facilities for the elderly population of the country by establishing a retirement home.

2.4 Review Of Operations Of The Company

The Message from the Chairman given on pages 40 to 43, the Managing Director/CEO’s Review on pages 44 to 48 and the ‘Strategy and resource allocation" and resource allocation’ on pages 107 to 120 together with the Audited Financial Statements provide an overall review of the business performance and the state of affairs of the Company together with the important events which took place during the year under review as required by Section 168 of the Companies Act No.07 of 2007 and the recommended best accounting practices.

The Company has an established presence across the country covering all districts. As at the end of the year under review, there were 127 branches. The sector-wise contribution to the Company’s revenue, results, assets and liabilities is disclosed in Note 05 to the Financial Statements on pages 286 to 292.

2.5 Future Developments

Likely future developments of the business are discussed in the Chief Executive Officer’s Review on pages 44 to 48. The Company has taken into consideration the wider developments in the business environment and demographic changes which has increased the need for insurance and retirement planning in the country. In this context the Company has set in place a strategic plan which aims to affirm its market leadership position to achieve its strategic objectives.

4.4 Reserves

A summary of the Company’s reserves is given below;

Total reserves of the Company stood at Rs. 60.75 Bn as at 31st December 2024. This includes the Restricted Regulatory Reserve of Rs. 3.46 Bn recognised in compliance with the IRCSL Direction 16 on Identification and Treatment of One-off Surplus. 2023 750,001 Information on the movement of reserves is given in the Statement of Changes in Equity on page 279 and the Note 21 to the Financial Statements on pages 350 to 353.

4.5 Taxation

Tax expense has been computed at the rates given in Note 35 to the Financial Statements, appearing on pages 370 of this report.

4.6 Property, Plant and Equipment

The net book value of property, plant and equipment of the Company, as at the reporting date amounted to Rs.13.72 Bn. Total capital expenditure during the year for the acquisition of property, plant and equipment by the Company, amounted to Rs. 614.4 Mn. More information on Property, Plant and Equipment is given in Notes 7 to the Financial Statements.

Specific information on the extent, location and the valuation of the land and buildings held by the Company are given in Notes 7 (i) to the Financial Statements.

The details of capital expenditure approved and contracted for are given in Note 7(c) to the financial Statements.

4.7 Market Value of Land and Buildings

The Company carried out a re-valuation of all its freehold land and buildings as at 31st December 2024. The revaluation of the land and buildings of the Company was carried out by professionally qualified independent valuers and the Board of Directors of the Company is of the opinion that the revalued amounts are not in excess of the current market values of such properties.

Details of the market value (re-valued amounts) of freehold properties of the Company are given in Note 7 (i) to the Financial Statements.

The next revaluation exercise on the freehold land and buildings of the Company will be carried out as at 31st December 2025.

4.8 Investments

Total investments of the Company and other equity investments amounted to Rs. 222.5 Bn as of 31st December 2024.

4.9 Provisions, Liabilities and Capital Commitments

The Directors have taken all reasonable steps to ensure that adequate provisions were made for all known liabilities and commitments.

4.10 Donations

During the year, the Company has not made any contributions to charities or other donations. The CSR initiatives of the Company are detailed under ‘building resilient communities’ on pages 197 to 200.

5.1 Stated Capital

The stated capital is the total of all amounts received by the Company, in respect of the issue of shares. The stated capital of the Company, as at 31st December 2024, amounted to Rs. 500,000,500.00 (Five Hundred Million and Five Hundred Rupees), which is represented by issued and fully paid 50,000,050 ordinary shares.

The Company did not purchase its own shares during the year under review.

5.2 Substantial Shareholding

The Company is a fully owned subsidiary of Ceylinco Holdings PLC (formerly known as Ceylinco Insurance PLC). The Company has issued 50,000,050 ordinary shares to the said Sole Shareholder of the Company. Information relating to dividends and net assets per share are stated under Note 37 and 38 to the Financial Statements on pages 372 to 373.

5.3 Information on Ratios and Net Assest Value of Shares

Ratios relating to dividends, net assets, net assets value price per share are presented below.

5.4 Issue of Shares or Debentures

During the year the Company did not raise any funds either through a public issue, right issue, debenture issue or through a private placement.

6.1 Appointment of Auditors and the Audit Report

The Company’s Independent External Auditors, Messrs. Ernst and Young, Chartered Accountants, who were re-appointed by a resolution passed at the 10th Annual General Meeting, carried out an audit on the Financial Statements of the Company for the year ended 31st December 2024. The Auditors’ Report issued thereon, is given on pages 273 to 274 as required by Section 168 (1) (c) of the Companies Act No. 07 of 2007.

A resolution will be proposed to the shareholder at the forthcoming Annual General Meeting for the approval pertaining to their re-appointment and to authorize the Directors to determine their remuneration.

6.2 Auditors’ Remuneration

The fees paid to the Auditors are disclosed in Note 33 (b) to the Financial Statements.

6.3 Auditors’ Independence

A confirmation of Independence has been provided by Messrs. Ernst & Young as required by Section 163 (3) of the Companies Act No. 07 of 2007, in connection with the audit for the year ended 31st December 2024, confirming that Ernst & Young is not aware of any relationship or interest in the Company or any subsidiary audited by Ernst & Young, that in their judgment, may reasonably be thought to have an impairment on their independence within the meaning of the Code of Professional Conduct and Ethics issued by CA Sri Lanka, applicable as at the reporting date.

7.1 Information On Directors of the Company

The Board of Directors of the Company as at 31st December 2024 consisted of 15 Directors with a wide knowledge and experience on economic, financial, banking, IT, commerce, HR, marketing, engineering and healthcare backgrounds as detailed in the Board of Directors’ profiles on pages 53 to 57.

Names of the Directors of the Company during and as end of 31 December 2024, as required by Section 168 (1) (h) of the Companies Act No. 07 of 2007 are given below;

7.2 Directors of the Subsidiary Companies

7.3 Changes to the Board of Directors

Mr. H M Hennayake Bandara resigned from the Board with effect from 31st December 2024. Alternate Directors were not appointed to the Board during the year under review.

7.4 Directors Meetings

Five Regular meetings of the Board of Directors were held during the year. The details of the Board and Board Sub-committee meetings and the attendance of Directors at these meetings, are given on page 225 and in the respective Committee reports on pages 251 to 261.

7.5 Board Sub-Committees

The Board of Directors of the Company has formed the following five (05) Board Sub-Committees in terms of the Rules of the Colombo Stock Exchange and the Code of Best Practice on Corporate Governance 2023 issued by CA Sri Lanka.

1. Board Nominations and Governance Committee
2. Board Remuneration Committee
3. Board Audit Committee
4. Board Risk Management Committee
5. Related Party Transactions Review Committee

The Board has formed a Board Investment Committee and a Board Environmental, Social and Governance Committee on voluntary basis to assist the Board of Directors. These Sub-Committees play a critical role in ensuring that the activities of the Company are conducted with the highest ethical standards and in the best interest of all its stakeholders. The terms of reference of these Sub-committees conform to the recommendations made by various regulatory bodies such as IRCSL, The Institute of Chartered Accountants of Sri Lanka and the CSE.

The Composition of Board Sub committees as at 31st December 2024 is tabulated in the respective Committee reports on pages 251 to 261.

7.6 Declarations by Non Executive Directors

All Non-Executive Directors of the Board as at the date of this Report have submitted signed declarations confirming their independent/ non-independent status in compliance with Rule 9.8.5 of the CSE Rules on Corporate Governance as well as in compliance with Principle A.5.5 of the Code of Best Practice on Corporate Governance 2023 issued by CA Sri Lanka and the Board determined that eight Non-Executive Directors are independent by nature based on the Directors’ Declarations submitted and the other information available to the Company.

7.7 Declarations By Directors and CEO – ‘Fit and Proper’ Status

In terms of Section 9.7.4 of the CSE Rules and Principle A.7.2 of the Code of Best Practice on Corporate Governance 2023, both the Executive Directors (including Managing Director/CEO) and Non-Executive Directors as at the date of this Report submitted Declarations confirming their fit and proper status in terms of the above rules and regulations and the Board noted that all the Directors of the Company comply with the above criteria.

7.8 List Of Directorships of the Directors in Other Entities

Directorships held by the Directors in other entities as at 31st December 2024 are provided in the Annexure that follows this Report of the Directors. The list has also identified the status of directorships (executive/ non-executive/ independent status) and the status where an entity is a listed entity.

7.9 Appraisal of Board Performance

The Board carried out an annual self evaluation of its own performance, Executive Directors’ performance, Non Executive Directors’ performance and that of the Sub-Committees to ensure that they discharge their duties and responsibilities satisfactorily in terms of the Code of Best Practice on Corporate Governance 2023 and the CSE Rules on Corporate Governance.

The Directors completed separate questionnaires for each evaluation processes and the outcome was summarized and tabled at the Board Nominations and Governance Committee meeting held on 6th February 2025 for discussion/review purposes. The recommendations of the Board Nominations and Governance Committee meeting were further discussed at the Board Meeting held on 20th February 2025 and those evaluations are maintained with the records of the Company Secretary.

The Senior Independent Director at a meeting of the Non-Executive Directors held on 20th February 2025 appraised the performance of the Chairperson and the Board of Directors assessed the performance of the Managing Director/ CEO based on the criteria agreed at the beginning of the year which consists of short ,medium and long-term objectives as required in the Code of Best Practice on Corporate Governance 2023 and the CSE Rules on Corporate Governance. Separate Individual questionnaires were completed by the Directors in respect the above and the outcome was summarized by the Company Secretary and submitted to the meetings.

7.10 Remunerations and Other Benefits of Directors

Directors’ remuneration in respect of the Company for the financial year ended 31st December 2024 is given in Note 44 (iv) to the Financial Statements as required by Section 168 (1) (f) of the Companies Act No. 07 of 2007.

7.11 Entries in the Interest Register

The Company maintains an Interest Register in compliance with the Companies Act No. 07 of 2007. All Directors have made declarations as required by Section 192 (1) and (2) of the Companies Act No. 07 of 2007.

7.12 Disclosure of Directors' Dealings In Shares

Neither shares nor debentures of the Company were held by the Directors of the Company during the year under review.

7.13 Directors Interest in Contracts or Proposed Contracts

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, as requested by Sec.192 of the Companies Act No.07 of 2007.

The Directors have disclosed all material interests in contracts in this Annual Report and have refrained from voting on matters in which they were materially interested.

7.14 Related Party Transactions With the Company

The Company carried out transactions in the ordinary course of business at an arm’s length basis with entities where a Director of the Company is a Director of such entities.

In addition, Related Party Disclosures as per Sri Lanka Accounting Standards are detailed in Note 44 to the Financial Statement on pages 392 of this Annual Report and the report of the Related Party Transactions Review Committee given on page 256.

There were no non-recurrent related party transactions exceeding 10% of the equity or 5% of the total assets whichever is lower or recurrent related party transactions exceeding 10% of the gross revenue/income requiring disclosure in the Annual Report.

The Board of Directors confirm that the Rules pertaining to Related Party Transactions have been duly complied with by the Company.

7.15 Directors’ and Officers’ Insurance

During the year the Company paid an insurance premium in respect of insurance policy for the benefit of the Company and the Directors and further details on the same are given in Note 44 (iii) (d) to the Financial Statements on page 392.

7.16 Register of Directors and Secretaries

As required under Section 223 (1) of the Companies Act No. 07 of 2007, the Company maintains a Register of Directors and Secretaries, which contains information of each Director and the Company Secretary.

As per the Gazette dated 7th May 2013 issued by the Insurance Regulatory Commission of Sri Lanka (IRCSL) the minimum capital requirement for all insurance companies was increased to Rs. 500,000,000/- with effect from 11th February 2015. The Company has an issued and paid-up capital of Rs.500,000,500/- and has abided by this statutory requirement.

Insurance companies are required to maintain a Total Available Capital of Rs.500,000,000/- as per Solvency Margin (Risk Adjusted Capital) Rules imposed with effect from 01st January 2016. The Company maintains a TAC of Rs. 100.83 Bn as at 31st December 2024.

The Company has complied with all statutory requirements imposed by the IRCSL and has submitted all returns and information on the stipulated due dates in conformity with the rules and regulations. In addition, the Company complies with the Financial Transactions Reporting Act No. 06 of 2006.

The Company has laid in place the necessary platform for transition to SLFRS 17 which will be effective from 01st January 2026 by educating all stakeholders. KPMG and Wills Towers Watson have been engaged as independent consultancy teams to assist the Company for a smooth transition. The Company had already completed the operational and impact analysis to the financial statements. SLFRS 9 implimentation process is in place and Ernst & Young acts as the consultant. The latest developments are given in detail under ‘Financial Performance’ on pages 127-151.

The Directors acknowledge their responsibility for the Company’s system of internal controls. The systems are designed to provide reasonable assurance that the assets of the Company are safeguarded and to ensure that proper accounting records are maintained. The Board of Directors, having reviewed the systems of internal control, is satisfied with the systems and measures in effect at the date of signing this Annual Report.

The Board Risk Management Committee reviews the policy development for risk management of the Company. Steps taken by the Company in managing risks are given on pages 76 under the topic of ‘Enterprise Risk Management’ .

The Company has embedded sustainability into its strategic planning process and focuses on business expansion and growth in a sustainable and responsible manner. More details are provided on pages 107 to 120.

The Company is committed to maintaining a superior workplace which provides equal opportunities for individuals to grow and realise their potential irrespective of gender, race or religion. The Company’s employee cadre as at 31st December 2024 was 729 (2023 – 740). The Company offers a comprehensive array of benefits including medical insurance under group cover for all confirmed employees. The Company has created an environment for growth and development by offering training and development opportunities. The Company’s HR Policy and other details are given in "Nurturing Empowered ,Progressive People" on pages 183 to 196.

All employees and Directors of the Company are strongly anchored on the Company’s values when conducting their day-to-day operations. Furthermore, the Company has a Code of Ethics in place which has been communicated to all employees and Directors.

The Company has a whistle-blower policy and all employees have been educated on this policy through relevant training programmes.

The Directors declare that the Company has made all endeavors to ensure fair treatment for all stakeholders.

The Company has not engaged in any activity that is detrimental to the environment and has been in due compliance with all applicable laws and regulations of the country to the best of its ability. Since 2017 the Company has committed to preserving the environment through its ‘Go Green’ initiatives with all branches and operations complying with green practices in conserving natural resources. These initiatives are detailed in the ‘Environmental Sustainability’ section set out on pages 153 to 166.

The Board of Directors confirm that, to the best of their knowledge and belief, all taxes, duties and levies payable by the Company and in respect of the employees of the Company and all other known statutory dues, that were due and payable by the Company, as at the reporting date have been paid or where relevant provided for.

As per the opinion of the Board of Directors and the lawyers of the Company, there will not be a significant impact on the financial position of the Company or its future operations from the pending litigation by and against the Company.

The Board of Directors is committed towards maintaining an effective Corporate Governance Framework and implementing systems and structures as required to ensure best practices in Corporate Governance and their effective implementation. The Company’s compliance with relevant sections of the Code of Best Practice on Corporate Governance together with the compliance with provisions of the Corporate Governance framework issued by IRCSL and Section 9 of the Rules of the Colombo Stock Exchange on Corporate Governance are given on pages 205 to 240.

The Board has made themselves aware of applicable laws, rules and regulations and are aware of changes particularly to the Directions of the Insurance Regulatory Commission of Sri Lanka, Rules of the Colombo Stock Exchange on Corporate Governance and Principles of the Code of Best Practice on Corporate Governance issued by CA Sri Lanka.

The Company recognizes digitalization as a key enabler to business transformation. Over the last three years the Company has accelerated its digital initiatives to transition to a future-ready organization. Digital transformation will be a key strategic pillar which will drive the Company towards process and customer service excellence. Key achievements for the year are detailed in the section "safeguarding Policyholders and their Needs" on pages 171-177.

As a socially responsible corporate citizen, the Company carries out a range of CSR activities. The details of Corporate Social Responsibility activities are given under 'Building Resilient Communities’ section on pages 197 to 200.

The Company has significantly transformed its processes to reach operational excellence. This has derived many benefits to policyholders by enhancing service levels greatly. Technology has been a key enabler in reaching operational excellence.

The eleventh Annual General Meeting of CLIL will be held at the Board Room of Ceylinco Life Insurance Limited at No. 106, Havelock Road, Colombo 05 on 27th March 2025 at 2.00 p.m. The Notice of the AGM appears on page 425 of the Annual Report.

As required by Section 168 (1) (k) of the Companies Act No. 07 of 2007, the Board of Directors hereby acknowledges the contents of the Annual Report.Signed for and on behalf of the Board of Directors,