A report on

(Phoenix Insurance Company Limited)

Department of Finance

University of Dhaka

A report on

Lease Practice in Bangladesh (Phoenix Insurance Company Limited)

Course Title: Investment Banking and Lease Financing

Course Code: F-403

Prepared For

Farzana Lalarukh

Associate Professor

Department of Finance

University of Dhaka

Prepared By

Sl. No. Name ID

1. Robin Kumar Saha 16-039

2. Deepangkar Saha 16-089

3. Farhanur Rahman Naim 16-135

4. Muhammad Shamim Hossain 16-151

5. MD. Anowarul Hoque 16-253

6. MD. Omar Faruk 16-265

Date of Submission: 23 September, 2013

‘If you have any query about this document, you may consult issuer, issue manager and underwriter’

Public OfferOf

Phoenix Insurance Company Limited

Convertible Bonds (CB)

ISSUE SIZE

100,000 Convertible Bonds (CB) of Tk. 1,000 each at par worth Tk. 100,000,000

Private Placement 80,000 Convertible Bonds of Tk 1,000 each Total Tk 80,000,000Public Offering 20,000 Convertible Bonds of Tk 1000 each Total Tk 20,000,000

Conversion Strike Price1.70 times of Net Asset Value (NAV) per share based on the audited statements of preceding financial year.

OPENING DATE FOR SUBSCRIPTION: 31 January 2014CLOSING DATE FOR SUBSCRIPTION: 04 February 2014

For Non-Resident Bangladeshi (NRB) Quota, Subscription Closes on: 13 February 2014

MANAGER TO THE ISSUE

IDLC Finance Limited

FACILITY ARRANGER & TRUSTEE

Industrial & Infrastructure Development Finance Co. Ltd (IIdfc)Issue Date of the Prospectus: 30 December 2013

The issue shall be placed in “N” category

Credit Rating byCredit Rating Information and Services Limited (CRISL)

Issue Rating (Zero Coupon Bond)Rating – A+

Date of Rating Declaration 29 April 2013

“CONSENT OF THE SECURITIES AND EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE ISSUE/OFFER OF THESE SECURITIES UNDER THE SECURITIES AND EXCHANGE ORDINANCE, 1969, AND THE SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) RULES, 2006. IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS CONSENT THE COMMISSION DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE ISSUER COMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS SECURTIES OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER, ISSUE MANAGER, UNDERWRITERS AND/OR

AUDITOR.’’ TABLE OF CONTENTS

Item Page No

Disclosure in respect of issuance of securities in demat form 02Conditions under Section 2CC of the Securities and Exchange Ordinance, 1969 02General information 10Declarations and due diligence certificates 11Declaration about the responsibility of the Directors including the CEO of the Company in respect of the prospectus 12Consent of the Directors to Serve 12Declaration about filing of prospectus with the Registrar of Joint Stock Companies & Firms 12Due Diligence Certificate of Manger to the Issue 13Due Diligence Certificate of the Underwriter(s) 14Due Diligence Certificate of Trustee to The Issue 15Statement Regarding Holding Annual General Meeting since Inception 16Risk factors & management perceptions about 17Issue Size and Purpose of the Public Offering 20Information about the Company 21Description of Property 24Plan of Operation and Discussion of Financial Condition 25Information about Directors and Officers 28Directors’ Involvement in other organization 29Description of top executives 30Auditor’s Certificate Regarding Tangible Assets per Share 33Features of IPO 34Description of Securities Outstanding or Being Offered 35Other Rights of the Shareholders 36Features of Bond 37Features of Phoenix Insurance Convertible Bond 39Rationale for Investing in Convertible Bond of Phoenix Insurance Company Limited 46Trustee

47Objects and Undertakings of the Trust 47Plan of Distribution 53Commission for the Underwriters 54Relationship of Officers or Directors of The Underwriter(S) with The Member ofBoard of the Company 54Allotment, Subscription and Market 55Availability of Securities 56Trading and Settlement 60Material Contracts and Others 62

Disclosure in Respect of Issuance of Security in Demat Form

As per provision of the Depository Act, 1999 and regulations made there under, shares will only be issuedin dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system and further issuance of shares (right/bonus) will also be issued in dematerialized form only.

Conditions under Section 2CC of the Securities and Exchange Ordinance, 1969

PART-A

1. The company shall go for Public Offering (PO) for 200,000 Convertible Bonds (CB) of Tk. 1,000 each at par worth Tk. 20,000,000 (Taka Twenty Million Only) following the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2006, the Depository Act, 1999 and regulations made there under.

2. The Company shall disseminate the above information to the Stock Exchanges within half an hour of receipt of consent letter.

3. The Company shall disseminate the receipt of the Commission’s approval along with the purpose and amount of the issue, price of the bonds etc. as price sensitive information, as prescribed by the Commission.

4. The abridged version of the prospectus, as approved by the Commission, shall be published by the issuer in 4 (Four) national daily newspapers (two in Bangla and two in English), within 3 (Three) working days of issuance of this letter. The issuer shall post the full prospectus, vetted by the Securities and Exchange Commission in the issuer’s website and shall also put on the websites of the Commission, Stock Exchanges, Trustee and the Issue Manager within 3 (Three) working days from the date of issuance of this letter which shall remain posted till the closure of the subscription. The Issuer shall submit to BSEC, the stock exchanges, the Trustee and the issue manager a diskette containing the text of the vetted prospectus in “MS -Word” format.

5. Sufficient copies of the prospectus shall be made available by the issuer so that any person requesting a copy may receive one. A notice shall be placed on the front of the application form distributed in connection with the offering, informing that interested persons are entitled to a prospectus, if they so desire, and that copies of the prospectus may be obtained from the issuer and the issue manager. The subscription application shall indicate in bold type that no sale of securities shall be made, nor shall any money be

taken from any person, in connection with such sale until twenty five days after the prospectus has been published.

6. The company shall submit 40 (Forty) copies of the printed prospectus to the Securities and Exchange Commission for official record within 5 (Five) working days from the date of publication of the abridged version of the prospectus in the newspaper.

7. The issuer company and the issue manager shall ensure transmission of the prospectus, abridged version of the prospectus and relevant application forms for NRBs through e-mail, with publication of the abridged version of the prospectus, to the Bangladesh Embassies and Missions abroad and shall also ensure sending of the printed copies of abridged version of the prospectus and application forms to the said Embassies and Missions within 5 (Five) working days of the publication date by Express Mail Service (EMS) of the postal department. A compliance report shall be submitted in this respect to the SEC jointly by the issuer and the issue manager within 2 (Two) working days from the date of said dispatch of the prospectus and the forms.

8. The paper clipping of publication of price sensitive information and abridged version of prospectus, as mentioned at condition 3 & 4 above, shall be submitted to the Commission within 24 hours of the publication thereof.

9. The company shall maintain separate bank account(s) for collecting proceeds of the Repeat Public Offering and shall also open Foreign Currency (FC) account(s) to deposit the application money of the Non Resident Bangladeshis (NRBs) for RPO purpose, and shall incorporate full particulars of said FC account(s) in the prospectus. The company shall open the above mentioned accounts for RPO purpose; and close these accounts after refund of over-subscription money. Non-Resident Bangladeshi (NRB) means Bangladeshi citizens staying abroad including all those who have dual citizenship (provided they have a valid Bangladeshi passport) or those, whose foreign passport bears a stamp from the concerned Bangladesh Embassy to the effect that no visa is required for traveling to Bangladesh.

10. The issuer company shall apply to all the stock exchanges in Bangladesh for listing within 7(Seven) working days from the date of issuance of this letter and shall simultaneously submit the vetted prospectus with all exhibits, as submitted to SEC, to the stock exchanges.

11. The following declaration shall be made by the company in the prospectus, namely:

Declaration about Listing of Bonds with the Stock Exchange(s)

“None of the stock exchange(s), if for any reason, grants listing within 75 (Seventy Five) days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within 15 (Fifteen) days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (Seventy Five) days, as the case may be.

In case of non-refund of the subscription money within the aforesaid 15 (Fifteen) days, the Directors of the company, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (Two Percent) per month above the bank rate, to the subscribers concerned.

The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall submit compliance report thereon to the Commission within 7 (Seven) days of expiry of the aforesaid fifteen days time period allowed for refund of the subscription money.”

12. The subscription list shall be opened and the sale of securities commenced after 25 (Twenty Five) days of the publication of the abridged version of the prospectus and shall remain open for 5 (Five) consecutive banking days.

13. A Non Resident Bangladeshi (NRB) shall apply either directly by enclosing a foreign demand draft drawn on a bank payable at Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for through crossed bank cheque marking “Account Payee only”. Application shall be sent by the NRB applicants shall send applications to the issuer company by the closing date of the subscription for NRB applicants. Applications received by the company after the time period will not be considered for allotment purpose.

14. The company shall apply the spot buying rate (TT clean) in US Dollar, UK Pound Sterling and Euro of Sonali Bank, which shall be mentioned in the Prospectus, as prevailed on the date of opening of the subscription for the purpose of application of the NRBs and other non-Bangladeshi persons, wherever applicable.

15. The company and the issue manager shall ensure prompt collection/clearance of the foreign remittances of NRBs and other non-Bangladeshi(s), if applicable, for allotment of bonds.

16. Upon completion of the period of subscription for securities, the issuer and the issue manager shall jointly provide the Commission and the stock exchanges with the preliminary status of the subscription within 5 (Five) working days, in respect of the following matters, namely:

(a) Total number of securities for which subscription has been received;(b) Amount received from the subscription; and(c) Amount of commission paid to the bankers to the issue.

17. The issuer and the issue manager shall jointly provide the Commission and the stock exchanges with the list of valid and invalid applicants (i.e. final status of subscription) to the Commission within 3 (Three) weeks after the closure of the subscription along with bank statement (original), branch-wise subscription statement, NRB application forms (photocopy attested by the CEOs of the Issuer Company and the Issue Manager). The list of valid and invalid applicants shall be finalized after examination with the CDBL in respect of BO accounts and particulars thereof.

18. The RPO shall stand cancelled and the application money shall be refunded immediately (but not later than 5 (Five) weeks from the date of the subscription closure), if any of the following events occur:

(a) Upon closing of the subscription list it is found that the total number of valid applications (in case of under subscription including the number of the underwriter) is less than the minimum requirement as specified in the listing regulations of the stock exchange(s) concerned; or

(b) At least 50% of the RPO is not subscribed.

19. 10% of total public offering shall be reserved for Non-Resident Bangladeshis (NRBs) and 10% for mutual funds and collective investment schemes registered with the Commission and the remaining 80% shall be open for subscription by the general public. In case of under subscription under any of the 10% categories mentioned above, the unsubscribed portion shall be added to the general public category and, if after such addition, there is over subscription in the general public category, the issuer and the issue manager shall jointly conduct an open lottery of all the applicants added together.

20. All the applicants shall first be treated as applied for one minimum market lot of 5 bonds worth Taka 5,000 (Taka Five Thousand only). If, on this basis, there is over subscription, then lottery shall be held amongst the applicants allocating one identification number for each application, irrespective of the application money. In case of over-subscription under any of the categories mentioned hereinabove, the issuer and

the issue manager shall jointly conduct an open lottery of all the applications received under each category separately in presence of representatives from the issuer, the stock exchanges and the applicants, if there be any.

21. An applicant cannot submit more than two applications, one in his/her own name and the other jointly with another person. In case an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, whole or part of the application money may be forfeited by the Commission.

22. Lottery (if applicable) shall be held within 4 (Four) weeks from closure of the subscription date.

23. The company shall issue bond allotment letters to all successful applicants within 5 (Five) weeks from the date of the subscription closing. Within the same time, refund to the unsuccessful applicants shall be made in the currency in which the value of securities was paid for by the applicants without any interest, through direct deposit to the applicant’s bank account as far / Account Payee Cheque/ refund warrants with bank account number, bank’s name and branch as indicated in the securities application forms payable at Dhaka/ Chittagong/ Khulna/ Rajshahi/ Barisal/ Sylhet/ Bogra, as the case may be subject to condition no. 21 above.

Refund money of the unsuccessful applicants shall be credited directly to their respective bank accounts, which have chosen the option in the RPO application forms, as maintained with the bankers to the issue or any other banks mentioned in the application.

A compliance report in this regard shall be submitted to the Commission within 7 (Seven) weeks from the date of closure of subscription.

24. The company shall furnish the List of Allotees to the Commission and the stock exchange(s) simultaneously in which the bonds will be listed, within 24 (Twenty Four) hours of allotment.

25. In the event of under-subscription of the public offering, the unsubscribed portion of securities shall be taken up by the underwriter(s) (subject to Para 18 above). The issuer must notify the underwriters to take up the underwritten bonds within 10 (Ten) days of the closing of subscription on full payment of the bond money within 15 (Fifteen) days of the issuer’s notice. The underwriter shall not share any underwriting fee with the issue manager, other underwriters, issuer or the sponsor group.

26. Lock-in provision shall be applicable upon conversion of bonds as per rule.

27. The company and the Issue Manager shall apply to the stock exchanges for listing within 7(Seven) working days of issuance of this letter and shall simultaneously submit to then Commission attested copies of the application filed with the stock exchanges.

PART–B

1. The Issuer and IDLC Finance Limited, the Issue Manager shall ensure that the abridged version of the prospectus and the full prospectus is published correctly and in strict conformity without any error/omission, as vetted by the Bangladesh Securities and Exchange Commission.

2. The issue manager shall carefully examine and compare the published abridged version of the prospectus on the date of publication with the copy vetted by BSEC. If any discrepancy/inconsistency is found, both the issuer and the issue manager shall jointly publish a corrigendum immediately in the same newspapers concerned, simultaneously endorsing copies thereof to BSEC and the stock exchange(s) concerned, correcting the discrepancy/inconsistency as required under ‘Due Diligence Certificates’ provided with BSEC.

3. Both the issuer company and the issue manager shall, immediately after publication of the prospectus and its abridged version, jointly inform the Commission in writing that the published prospectus and its abridged version are verbatim copies of the same as vetted by the Commission.

4. The fund collected through Repeat Public Offering and private placement of bonds shall not be utilized prior to listing with stock exchanges and that utilization of the said fund shall be effected through banking channel, i.e. through account payee cheque, pay order or bank drafts etc.

5. The company shall furnish report to the Trustee and the Commission on utilization of RPO proceeds within 15 (Fifteen) days of the closing of each quarter until such fund is fully utilized, as mentioned in the schedule contained in the prospectus, and in the event of any irregularity or inconsistency, the Commission may employ or engage any person, at issuer’s cost, to examine whether the issuer has utilized the proceeds for the purpose disclosed in the prospectus.

6. All transactions, excluding petty cash expenses, shall be effected through the company’s bank account(s).

7. Proceeds of the Repeat Public Offering shall not be used for any purpose other than those specified in the prospectus. Any deviation in this respect must have prior approval of the bondholders in the bondholders meeting under intimation to BSEC and stock exchanges.

8. The Issuer and the Trustee shall jointly submit to the Commission an annual status report of the bonds containing among others, details about deployment of fund, return from the fund and profits paid to the bondholders, decisions of the bondholder’s meeting (if any) within 3 (three) months from the date of Annual General Meeting of the company.

9. The Trustee shall ensure compliance by the issuer in respect of bondholders’ rights as per the Trust deed and shall submit to the Commission an annual compliance report within three (3) months from the date of Annual General Meeting of the Company.

PART-C6

1. The Issuer shall execute the Trust Deed with the Trustee and register the same under the Trust Act, 1882 and shall submit a copy of the trust deed attested by the Chief Executive Officers of the Issuer, Trustee and the Issue Manager to the Commission.

2. The Issuer shall execute charge agreements with the Trustee.

PART-D

1. All the above conditions imposed under section 2CC of the Securities and Exchange Ordinance, 1969 shall be incorporated in the prospectus immediately after the page of the table of contents, with a reference in the table of contents, prior to its publication.

2. The Commission may impose further conditions/restrictions etc. from time to time as and when considered necessary which shall also be binding upon the issuer company.

PART-E

1. As per provision of the Depository Act, 1999 and regulations made there under, bonds will only be issued in dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system.

An applicant (including NRB) shall not be able to apply for allotment of bonds without Beneficial Owners (BO) account.

2. The issue manager shall also ensure due compliance of all the above conditions.

General Information

IDLC Finance Limited, the Issue Manager has prepared this prospectus based on the information provided by Phoenix Insurance Company Limited (Issuer) and also upon several discussions with the Managing Director and concerned executives of the issuer company. The Directors, including Managing Director, of Phoenix Insurance Company Limited, IDLC Finance Limited collectively and individually, having made all reasonable inquires, confirm that to the best of their knowledge and belief, the information contained herein is true and correct in all material aspects and that there are no other material facts, the omission of which would make any statement herein misleading.

No person is authorized to give any information or to make any representation not contained in this Prospectus, and if given or made, any such information or representation must not be relied upon as having been authorized by the Issuer Company or Issue Manager.

The Issue as contemplated in this document is made in Bangladesh and is subject to the exclusive jurisdiction of the courts of Bangladesh. Forwarding this Prospectus to any person resident outside Bangladesh in no way implies that the Issue is made in accordance with the laws of that country or is subject to the jurisdiction of the laws of that country.

A copy of this Prospectus may be obtained from the Head Office of Phoenix Insurance Company Limited, IDLC Finance Limited, the Underwriters and the Stock Exchanges where the securities will be listed.

Declarations and Due Diligence Certificates

Declaration about the Responsibility of the Director(S), Including the CEO of the “Phoenix Insurance Company Limited” in Respect of the Prospectus

This Prospectus has been prepared, seen and approved by us, and we, individually and collectively, accept full responsibility for the authenticity and accuracy of the statements made, information given in the prospectus, documents, financial statements, exhibits, annexes, papers submitted to the Commission in support thereof, and confirm, after making all reasonable

inquiries that all conditions concerning this public issue and prospectus have been met and that there are no other information or documents, the omission of which make any information or statements therein misleading for which the Commission may take any civil, criminal or administrative action against any or all of us as, it may deem fit.

We also confirm that full and fair disclosure has been made in this prospectus to enable the investors to make a well-informed decision for investment.

Sd/- Sd/- Sd/-

Mohammad Shoeb Deen Mohammad Mazharul Haque Chairman Director Director

Sd/- Sd/- Sd/-

Rafiqul Islam Khan Mobarak Ali Aziz-Al-Mahmood Director Director Director

Sd/- Sd/- Sd/-

Abdur Rahman Meherun Hoque Wasif Ahmed Director Director Director

Sd/- Sd/- Sd/-

Manzoorul Haque Mohammad Haider Ali Md. Jamirul Islam Mohammad Director Director Managin Director

Consent of Director(s) to Serve as Director(s)

We hereby confirm that we have been serving as Director(s) of Phoenix Insurance Company Limited and continue to act as a Director of the Company.

Sd/- Sd/- Sd/-

Mohammad Shoeb Deen Mohammad Mazharul Haque Chairman Director Director

Sd/- Sd/- Sd/-

Abdur Rahman Meherun Hoque Wasif Ahmed Director Director Director

Sd/- Sd/-

Manzoorul Haque Mohammad Haider Ali Mohammad Director Director

Declaration about Filing of Prospectus with the Registrar of Joint Stock Companies and Firms

A dated and signed copy of the Prospectus has been filed for registration with the Registrar of Joint Stock Companies and Firms, Government of the Peoples’ Republic of Bangladesh, as required under Section 138(1) of the Companies Act, 1994 on or before the date of publication of the prospectus.

Declaration by the Issuer about the Approval from Securities andExchange Commission for any Material Change

In case of any material changes in any agreement, contract, instrument, facts and figures, operational circumstances and statements made in the Prospectus subsequent to the preparation of the Prospectus and prior to its publication, shall be incorporated in the Prospectus and the said Prospectus should be published with the approval of the Commission.

For Issuer

Sd/-Md. Jamirul IslamManaging DirectorPhoenix Insurance Company Limited

Declaration by the Issue Manager about the Approval fromBangladesh Securities and Exchange Commission for any Material Change

In case of any material changes in any agreement, contract, instrument, facts and figures, operational circumstances and statement made in the Prospectus subsequent to the preparation of the Prospectus and prior to its publication, shall be incorporated in the Prospectus, and the said Prospectus should be published with the approval of the Commission.

For Manager to the Issue

Sd/-Selim R. F. HussainCEO & Managing DirectorIDLC Finance Limited

Due Diligence Certificate of the Mangers to the Issue

Subject: Repeat Public Offer of 20,000 Convertible Bonds (CB) ofTk. 1,000 each totaling to Tk. 20,000,000 of Phoenix Insurance Company Limited

We, the under-noted Manager to the Issue to the above-mentioned forthcoming issue, state as follows:

1. We, while finalizing the draft prospectus pertaining to the said issue, have examined various documents and other materials as relevant for adequate disclosures to the investors; and

2. On the basis of such examination and discussions with the issuer company, it’s Directors and officers, and other agencies, independent verification of the statements concerning objects of the issue, and the contents of the documents, and other materials furnished by the issuer company.

We Confirm That:a) The draft prospectus forwarded to the Commission is in conformity with the documents,

materials and papers relevant to the issue;b) All the legal requirements connected with the said issue have been duly complied with;

andc) The disclosures made in the draft prospectus are true, fair and adequate to enable the

investors to make a well informed decision for investment in the proposed issue.For Manager to the Issue

Sd/-Selim R. F. HussainCEO & Managing DirectorIDLC Finance Limited

Due Diligence Certificate of the Underwriter(s)

Subject: Repeat Public Offer of 20,000 Convertible Bonds (CB) ofTk. 1,000 each totaling to Tk. 20,000,000 of Phoenix Insurance Company Limited

We, the under-noted Underwriter(s) to the above mentioned forthcoming issue, state individually and collectively as follows:

1. We, while underwriting the above mentioned issue on a firm commitment basis, have examined the draft prospectus, other documents and materials as relevant for our underwriting decision; and

2. On the basis of such examination; and the discussions with the issuer company, it’s Directors and officers, and other agencies, independent verification of the statements concerning objects of the issue, and the contents of the documents, and other materials furnished by the issuer company.

We Confirm That:

a) All information as are relevant to our underwriting decision have been received by us and that the draft prospectus forwarded to the Commission has been approved by us;

b) We shall subscribe and take up the un-subscribed securities against the above-mentioned public issue within fifteen (15) days of calling up thereof by the issuer; and

c) This underwriting commitment is unequivocal and irrevocable.

For Underwriter(s)

Sd/-Managing Director/Chief Executive Officer/Director

Prime Bank Limited City Bank Limited LankaBangla Finance LimitedPrime Finance & Investment Limited IDLC Finance Limited

Due Diligence Certificate of Trustee to the Issue

Subject: Repeat Public Offer of 20,000 Convertible Bonds (CB) ofTk. 1,000 each totaling to Tk. 20,000,000 of Phoenix Insurance Company Limited

We, the under-noted Trustee to the Issue to the above mentioned forthcoming issue, state as follows:

1. We, while agree to act as trustee to the above mentioned issue, have examined the Information Memorandum/ draft prospectus, other documents and materials as relevant for our decision; and

2. On the basis of such examination; and the discussions with the issuer company, its Directors and officers, and other agencies, independent verification of the statements concerning objects of the issue, and the contents of the documents, and other materials furnished by the issuer company.

We Confirm That:

a) The Information Memorandum/ draft prospectus forwarded to the commission is in conformity with the documents, materials and papers relevant to the issue;

b) All the legal requirements connected with the said issue have been duly complied with;

c) The disclosures made in the Information Memorandum/ draft prospectus are true, fair and adequate to enable the investors to make a well informed decision for investment in the proposed issue; and

d) The Securities and Exchange Commission (public Issue) Rules, 2006 have been complied with.

For Trustee to the Issue

Sd/-Ali Reza IftekharManaging Director & CEOEastern Bank Limited

Statement Regarding Holding Annual General Meeting since Inception

Phoenix Insurance Company Limited incorporated on November 27, 1986. The Company was listed in Dhaka Stock Exchange Ltd (DSE) on December 4, 1994 and the next day, launched trading of shares in the DSE and has been holding Annual General Meeting (AGM) regularly since inception. The details about AGM of the company are given below:

No. of AGM Date of AGM Dividend

1st 25-10-1995 Nill2nd 15-10-1996 Nill3rd 21-09-1997 Nill4th 11-08-1998 Nill5th 29-07-1999 Nill6th 27-06-2000 Nill7th 21-05-2001 Nill8th 09-08-2002 5%9th 15-06-2003 5%10th 21-05-2004 25%11th 28-06-2005 25%12th 04-07-2006 30%13th 08-07-2007 20%14th 23-06-2008 22%15th 24-06-2009 25%16th 22-06-2010 25%17th 25-06-2011 5%18th 26-06-2012 25%

For Issuer

Sd/-Md. Jamirul IslamManaging DirectorPhoenix Insurance Company Limited

Risk Factors & Management’s Perception about the Risks

An investment in capital market involves a high degree of risk. The insurance company is operating in an industry involving both external and internal risk factors having direct as well as indirect effects on the investments made by the investors. All investors should carefully consider all of the information in this Prospectus, including the risk factors, both external and internal, and management perception thereabout enumerated hereunder before making an investment decision.

If any of the following risks actually occur, their business, results of operations and financial condition could suffer, the trading price of their bonds could decline, and investors may lose all or part of their investment.

(a) Interest Rate RisksInterest rate risk is concerned with borrowed funds of short term and long-term maturity. Interest rate risk is the risk that the company faces due to unfavorable movements in the interest rates. In case of any volatility in the money market the financial expenses may increase significantly which will ultimately reduce the profitability of the company.

Management perceptionThe management is aware of the impact of high financial expenses and continuously exploring attractive and competitive sources of fund. As a part of this initiative the management approved the issue of CB. Currently discount rate of the bond is comparatively lower than the current borrowing rate. So the raising of finance through issuance of CB is favorable for the company under the current situation. Again, as the consequences of unusual and abrupt increase in the borrowing rate cannot be avoided, Phoenix Insurance takes all the appropriate measures to minimize the negative consequences. For instance, the company currently pursues a policy under which interest rates can be revised for any unusual and abrupt change at its own discretion as and when required.

(b) Exchange Rate RisksExchange rate fluctuation may reduce the profitability of Phoenix Insurance because some of it’s’ services, such as marine insurance, overseas mediclaim insurance, riot &strike damage insurance, aviation insurance etc. may be affected by exchange rate fluctuation

Management perceptionExchange rate risk arises from exchange rate movements, which may affect the earning of the company from its foreign exchange open position taken from time to time. This risk is mainly managed by setting (i) determined limits on open foreign exchange position, (ii) monitoring open position against these limits & (iii) setting and monitoring of stop loss mechanism.

(c) Industry RisksThe bank is operating in a highly competitive market as modern insurance industry has brought greater business diversification. Taken together, these changes have made insurances an even more important entity in the global business community. The entry of new competitor may increase the market competition and profitability of the company.

Management perception

Financial Institution (FI) is a fast growing industry. There is a good potential for a well-established and growing financial institutions like Phoenix Insurance to expand and increase its market share. In order to do that we are drawing our attention to investment banking and financial engineering.

(d) Market & Technology Related RisksFinancial market of Bangladesh is currently very competitive and it is currently one of the fastest growing industries in Bangladesh. The entrance of new entities into the market is increasing the competitiveness of the market. Strong marketing and brand management would help the company to increase their customer base.

Management perceptionPhoenix Insurance has incorporated triple bottom like approach in its operation, first one of which is making profit by mobilizing fund from urban to rural areas, second is performing social responsibility by creating an entrepreneurial class and third is making the financial environment safer.

(e) Technology Related RisksTechnology plays vital role for ensuring better services to the customers and minimizing the cost in various aspects. The financial institutions and insurance companies must embrace new technology to be efficient enough to cope up with the future changing demand.

Management perceptionPhoenix Insurance is always trying to initiate new technology to make their business more advanced. As an insurance company they also need to have installed updated technology. We are also exploring our chances in financial technology.

(f) Potential or Existing Government RegulationsThe company operates under the specific guidelines laid down by Bangladesh Bank, Bangladesh Securities and Exchange Commission (BSEC) and other regulatory authorities. The Company also operates under Companies Act 1994 and other related regulations, Insurance Act 2010, Income Tax Rules 1984, Value Added Tax (VAT) Act 1991 and IDRA 2010. Any abrupt changes of the policies made by the regulatory authorities may adversely affect the business of the Company.

Management perceptionUnless any policy change that may negatively and materially affect the industry as a whole, the business of the company is expected not to be affected significantly. Before the Insurance Act of 2010, the insurance companies used to follow the Insurance Act 1938. This change was made in response to need to modernize and make precise the previous act in many manners.

(g) Potential Changes in Global or National PoliciesA financial institution’s ability to operate a profitable business is directly related to the monetary and fiscal policy of the country at any given time. Imposition of restrictive monetary and/or fiscal policy by the government at any time may affect a company’s profitability. Again, changes in the existing global or national policies can have either positive or negative impacts for the bank.

Management perceptionThe management of Phoenix Insurance is always concerned about the prevailing and upcoming future changes in the global or national policy and shall response appropriately and timely to safeguard its interest.18(h) Potential Changes in Political & Economic ConditionChanging economic conditions may affect the demand for the type of insurance service offered by the company. Downturn of economic activity or uncertainty may result in a downturn in demand for services in the industry.

Management perceptionGenerally, this risk applies to every financing institution in the country but they are normally mitigated by being aware of the circumstances and taking appropriate action in time. Phoenix Insurance’s performance has been steady during periods of political turmoil and natural calamities. On the other hand, political turmoil and the disturbance are bad for the economy as a whole and so also for the company.

Issue Size and Purpose of the Public Offering

Size of the Issue

The total size of Phoenix Insurance’s 25% Convertible Bonds is BDT 100,000,000 (Take One Hundred Million Only) of which face value of each bond is BDT 1,000. Out of the total issue size, 80% of the total issue, i.e. BDT 80,000,000 (Taka Eighty Million Only) has been allocated for private placement and allocation of these bonds will be made along with the public

subscription. The bank shall go for Public Offer for the rest of the amount, i.e. 20,000 (20% of the total issue size) Convertible Bonds (CB) of Tk. 1,000 each at par worth Tk. 20,000,000 (Taka Twenty Million Only).

Investor, who subscribed the amount offered through private placement are as under:

NameNo. of LotSubscribed

No. of UnitSubscribed

Issue Price(BDT)

Agrani Bank Limited 3,000 15,000 15,000,000

Delta Life Insurance 1,000 5,000 5,000,000The City Bank Limited 4,000 20,000 20,000,000Ab Bank 1st Mutual Fund 2,000 10,000 10,000,000Mutual Trust Bank Ltd 1,000 5,000 5,000,000Ific Bank 1st Mutual Fund 3,000 15,000 15,000,000Dutch-Bangla Bank 2,000 10,000 10,000,000

Total 16,000 80,000 80,000,000Note: Allotment of the bonds will be made at a time along with public subscriptions.

Use of PO Proceeds

Phoenix Insurance Company Limited is raising Tier II capital through repeat public offering in order to comply with the regulatory requirement of Bangladesh Bank. The proceeds of the public offering will strengthen the capital base of the company and augment business expansion. The fund thus raised would be generally used for undertaking additional insurance service and private investment.

Terms of Contract

There is no such contract for repayment of any liability.Information about the Company

Phoenix Insurance Company Ltd: Company Profile

The Phoenix Insurance Company Ltd, one of the first generation leading general insurance companies in Bangladesh embarked on its journey on November 27, 1986. Mr. Dean Mohammad, Chairman of the Phoenix Group in association with Maj. Gen. (Retd) Abdul Mannan Siddiqui who was the founder chairman along with a group of entrepreneurs founded the company with a paid-up capital of Tk 30 million.

The Company, headquartered in Dhaka, began operation in most parts of the country after obtaining certificate on December 1, 1986 and being registered with the department of insurance on December 4, the same year.

The company first announced first dividend for its shareholders on April 21, 1990 and issued prospectus for public floatation of shares on July 28, 1994. Under the Insurance act of 1938 with the slogan ‘Service for Security’ the Company was listed in Dhaka Stock Exchange Ltd (DSE) on December 4, 1994 and the next day, launched trading of shares in the DSE. The shares of first trading were valued at Taka 440 each. The first AGM of the company took place at the Sonargaon Hotel Dhaka on October 25, 1995 where all the sponsors, directors, shareholders, employees, clients, members of regulatory bodies were present. The company issued first bonus share on July 1, 2003 and signed agreement with CDBL on December 22, 2004. It started de-mat settlement on January 15, 2005.

The authorized capital of the company is BDT 1,000 million and paid-up capital of the company is BDT 322 million as of June 30, 2013.

Corporate Vision

Their vision is to be an innovative, profitable; customer-oriented insurance enterprise with a national focus, thereby assisting stakeholders and public to build a just, enlightened, healthy, and democratic and poverty free Bangladesh.

Corporate Mission

Their mission is to provide nonparallel service, protect our policy holders` interest and contribute to the stability of national economy.

Core Objectives:

To materialize the dreams inscribed in our vision and the targets spell in their mission, they have set a good number of objectives. These are as follows:

To conduct transparent and high quality general insurance service. To create best value for customers, shareholders and all stake holders. To utilize stronger IT-driven initiatives in order to meet the challenges and requirements

of the company and its clients. To improve administrative and organizational configuration in order to prepare the

platform for best practices of corporate governance. To meet the various insurance needs of the community that would arise in the changing

social and economic environment.

Nature of Business

Phoenix Insurance Ltd. has been the fastest growing insurance company from 1995 to till date. It operates under a "double bottom line" agenda where profit and social responsibility go hand in hand as it strives towards a poverty-free, enlightened Bangladesh.

Phoenix Insurance Company offers insurance for Fire, Motor, Marine, Cargo, Hull, Miscellaneous, Cyclone, Flood, Earthquake, Engineering, Riot and Strike damage, Overseas Mediclaim and Travel Insurance. The company has 31 branches located all over Bangladesh and provides online insurance service through most of its branches.

Principal Products and Services

Phoenix Insurance Ltd. serves all types of modern, progressive and dynamic business as well as insurance services to the customers of all strata of society. During the short span of time, the Bank has been highly recognized and praised by the business community, from small entrepreneurs to large traders and industrial conglomerates, and emerged as the fastest growing among the third generation insurance companies in respect of business and profitability.

Fire Insurance: Fire and Allied Perils Insurance Consequential Loss due to Fire Insurance Hotel Owners All Risks Insurance Industrial All Risks Insurance

Marine Insurance: Cargo Insurance Hull Insurance

Motor Insurance: Comprehensive Insurance Act Only Liability Insurance

Engineering Insurance: Machinery Breakdown Insurance (MBD) Contractors All Risks Insurance (CAR) Erection All Risks Insurance (EAR) Deterioration of Stock Insurance (DOS) Electronic Equipment Insurance (EEI) Boiler and Pressure Vessels Insurance (BPV) Power Point Insurance

Miscellaneous Insurance: Cash in Transit Insurance

Cash/Property in Premises Personal Accident Insurance All Risks Insurance General/Public Liability Insurance Overseas Medicaid Insurance Products Liability Insurance Employers Liability Insurance Fidelity Guarantee Insurance Safe Deposit Box (Bank Lockers)

Distribution of Products/Services

Phoenix Insurance Ltd. provides and processes its retail products and services through wide range of network. It currently has a wide coverage of 31 branches as on June 30, 2013.

Competitive Condition of Business

The Insurance Sector in Bangladesh comprises of 62 firms, which include two state owned firms, 43 non-life insurance companies and 17 life-insurance companies. All the companies compete with each other for customers and are in search of sound investment/lending targets. Despite of huge competition, the earnings of the private insurance companies have gone up significantly due to professionally managed operations.

Sources and Availability of Raw Materials and Principal Suppliers

Raw material for the company is the fund for lending which is being mobilized from an equity capital, insurance premium and interest on loans.

Sources of and Requirement for Power, Gas and Water or any other Utilities

The company does not require such utilities except for ordinary use in office work. The sources are:

Power: Sources of electricity supply is mainly Power Development Board (PDB) and the bank uses owned generator in absence of electricity from PDB.

Gas: Gas supply is ensured by Titas Gas Distribution Limited.

Water: Water supply is ensured by Water and Sewerage Authority (WASA).

Description of Material Patents, Trademarks, Licenses or Royalty Agreements

Phoenix Insurance Ltd. has not entered into any such agreements.

Number of Employees

The total number of employees including contractual engaged for the whole year or part thereof who received a total yearly remuneration of BDT 36,000 or above is 529 as on June 30, 2013.

Description of Property

Location of Principal Plants and Other Property of the Company and their Condition

Phoenix Insurance Ltd. operates its business through its Head Office at Purbani Annex Building (1st Froor), 1/A, Dilkusha C/A, Dhaka – 1000 and its branch offices at different location on rented premises. However, the following operating assets at written down value owned by the bank and taken on lease are given below:

(Written Down Value in Taka as per Audited Accounts)

Particulars As on June 30, 2013Land & Land Development 144,000,000Building 73,038,637Vehicles 91,097,544Furniture & Fixture 3,081,782Office Equipment 995,315Total 312,213,278

Plan of Operation and Discussion of Financial Condition

Internal & External Source of Cash:

As per Audited Accounts June 30, 2013

Internal Sources of Cash: June 30, 2013

Ordinary Share Capital 403,415,725Retained Earning 321,591,283Sub Total 725,005,008

External Sources of Cash:Long Term Loan From Bank 155,270,380Short Term Loans 412,791,730Sub Total 568,062,110Grand Total 1,293,069,118

Seasonal Aspects

In general there is no seasonal impact on the business of the Company.

Known Trends, Events or Uncertainties

Political unrest, strike and flood are the known events in our country. These may affect the business of the Company.

Changes in Assets to Pay off Liabilities

No asset of the Company has been used to pay off any liabilities.

Loans Taken/Given from Subsidiary or Associate Concern

The Company has not taken /given any loan from its subsidiary.

Future Contractual Liabilities

The Company has not, as June 30, 2013, entered into any future contractual liability.

Future Capital Expenditure

The company has planned to execute different projects for business expansion. The following schedule has been planned to be incurred in future:

VAT, Income Tax, or other Tax Liability

(i) VAT: Except income from fees, commission and charges all other income of the Company is exempt from VAT. There is no outstanding VAT liability as on June 30, 2013.

Expansion Estimated Amount in (Tk.)Branch 800,000Infrastructure 200,000ICT 150,000

(ii) Income Tax: Assessment completed and settled up to the assessment year 2011-2012. Tax return has been filed for the assessment year 2011-2012, the assessment yet to be finalized.

Financial Lease Commitments

Other than the lease mentioned in “Description of Property” the Company doesn’t have any lease commitment. The monthly dues of above lease rent liabilities will be paid out of the resources of the Company in terms of the provisions of the Lease Contracts.

Personnel Related Scheme

The Company undertakes various training schemes at home and abroad for human resource development. It also has a well-designed compensation packages for attracting highly capable professional with high degree of integrity. This includes salary and allowances, bonus, leave encashment, gratuity, provident fund, group life and health insurance scheme.

Break Down of Expenses for Issue Manager and Underwriters

IPO Expenses:

Head of Expenses Amount (appx)

Application fees 10,000

Issue Management Fees 1,600,000

Underwriting Commission 400,000

Bankers to the Issue (appx) 800,000

Publication 600,000

Printing 300,000

Data processing 5,000,000

Listing Fees DSE & CSE 2,000,000

Consent Fees to SEC 240,000

Lottery and others expenses 500,000

CDBL 200,000

Security deposit to CDBL 300,000

 Total 11,950,000

Revaluation of Company’s Assets and Summary Thereof

No revaluation has been made to the Bank’s assets and liabilities.

A Special Report from Auditor’s About Allotment of Shares to Promoters in Cash:

This is to certify that the Capital structure of Phoenix Insurance Ltd. as on June 30, 2013 is as follows:

Authorized Capital:100,000,000 Ordinary Shares @ Tk. 10 each 1,000,000,000Issued, Subscribed and Paid up Capital:40,300,000 Ordinary @ Tk. 10 each in fully in cashAt the time of Incorporation 96,000,000Issued as on 7/10/2000 90,000,000Issued as on 15/1/2004 100,000,000Issued as on 8/12/2007 104,000,000Issued as on 6/3/2010 40,000,000Total 240,000,000

We certify that the Company does not issue any shares otherwise than cash and the books of accounts of the Company have been verified and found in order.

Sd/-

Date:- 8th July, 2013 Khan Wahab Shafique Rahman & Co

Dhaka Chartered Accountants

Declaration Regarding Non-Suppression of Material Information:

This is to declare that to the best of our knowledge and belief no information, facts, circumstance, that are material have not been suppressed that can change the terms and conditions under which the offer has been made to the public.

Sd/-

Date:-8th July, 2013 Khan Wahab Shafique Rahman & Co

Dhaka Chartered Accountants

Information about Directors and Officers

Directors of the Company

NameDesignatio

nAge

ExperienceNominated

ByPeriod of

NominationMohammad Shoeb

Chairman 45 23Phoenix Group

N/A

Deen MohammadDirector 54 27 N/A N/A

Mazharul HaqueDirector 55 25 N/A N/A

Rafiqul Islam KhanDirector 50 28 N/A N/A

Mobarak AliDirector 62 38 N/A N/A

Aziz-Al-MahmoodDirector 45 20 N/A N/A

Abdur Rahman Director 45 22 N/A N/A

Meherun HoqueDirector 31 8 N/A N/A

Wasif AhmedDirector 32 10 N/A N/A

Manzoorul HaqueDirector 28 8 N/A N/A

Mohammad Haider AliDirector 48 24 N/A N/A

Evana Fahmida MohammadDirector 34 9 N/A N/A

Badrudozza MannanDirector 35 10 N/A N/A

Roxshana BegumDirector 58 26 N/A N/A

Sadia Anjum SiddiquiDirector 32 9 N/A N/A

Sadaf Shamsad HaqueDirector 27 4 N/A N/A

Directors’ Involvement in other organization

Name Name of Organisations

Mohammad ShoebPhoenix Finance, Phoenix Securities, Phoenix Group of Industries, Phoenix Spinning Mills, Phoenix Textiles Mills, Rangdhanu Spinning

Mills and Apollo Ispat Complex Ltd.Deen Mohammad

Apollo group

Mazharul HaqueEastern Foundry and Re-rolling Mills ltd.

Rafiqul Islam Khan Pakiza Group of Industries, City Bank Ltd., Phoenix Finance & Investments Ltd. and

Phoenix Securities Ltd.Mobarak Ali New United Industries Ltd., City Bank Ltd. and

Phoenix Securities Ltd.Aziz-Al-Mahmood Danish Condensed Milk Ltd., Star Particles and

Board Mills Ltd., Partex Group.

Abdur RahmanBuriganga Flotating Pumps and Bangladesh

Gasoline Pvt. Ltd.Meherun Hoque

City Bank Ltd, IDLC.

Wasif Ahmed Phoenix Holdings Ltd , Tiger Wire and Re-Rolling Mills.

Manzoorul Haque Lubab Airscape, Lubab Mens essentials and Phoenix Securities Ltd.

Mohammad Haider Ali-

Evana Fahmida Mohammad Phoenix Finance & Investments Ltd., City Bank Ltd and Phoenix Securities Ltd.

Badrudozza MannanMiraro Carriers Ltd. and Nautical Shipping.

Roxshana BegumPhoenix Finance & Investments Ltd

Sadia Anjum Siddiqui-

Sadaf Shamsad Haque-

Family Relationship among Directors and Top Officials

No Family relationship exists between the members of the Board of Directors and Officers of the Company. There is no family relationship among the Directors of the Board.

Credit Information Bureau (CIB) report

Neither Phoenix Insurance Ltd. nor any of its directors or shareholders, who hold 5% or more shares in the paid-up capital of the issuer, is loan defaulter in terms of Credit Information Bureau (CIB) of the Bangladesh Bank.

Description of top executives

Name Position Date of Joining ExperienceMd. Jamirul Islam Managing Director May, 2011 29Md. Imam Shaheen Additional Managing Director May, 2011 20Monoranjan Kundu Executive Director (F&A) January, 2011 24

Obaidullah Arif Khan General Manager March, 2000 26Md. Rafiqur Rahman Company Secretary April, 2007 18Sunil Krishna Saha General Manager (RI) January, 2009 39General Manager Assistant General Manager IT July, 1997 16

Involvement of Directors and Officers in Certain Legal Proceedings

No Officer or Director of the Company was involved in any of the following types of legal proceedings in the last ten years.

a) Any Bankruptcy Petition filed by or against any company of which any Officer or Director or

Nominee of the Company filing the Prospectus was a Director, Officer or General Partner at the time of the bankruptcy or within 2 (Two) years prior to that time;

b) Any conviction of an Officer, Director or Nominee in a criminal proceeding or any criminal proceeding pending against him;

c) Any Order, Judgment or Decree of any Court of competent jurisdiction against any Officer, Director or Nominee permanently or temporarily enjoining, barring, suspending or otherwise limiting the involvement of any Officer or Director or Nominee in any type of business, securities or other activities;

d) Any Order of the Securities and Exchange Commission, or other Regulatory Authority or Foreign Financial Regulatory Authority, suspending or otherwise limiting the involvement of any Officer or Director or in any type of business, securities or other activities.

Certain Relationships and Related Transactions

Phoenix Insurance Ltd. did not have any special arrangement/commitment with any of its Directors or nominee for Director, Executive Officer or officer or any person owing 5% or more of the outstanding stock of the company or any member of the immediate family (including spouse, parents, children and in-laws) or a person in a way connected with the Director of either the issuer company or any of its subsidiaries or sister concerns or who was a Director or connected in any way with a Director at any time during the last two years prior to the publication of the prospectus.

Executive Compensation

Remuneration paid to top five executives:

Name Position RemunerationMd. Jamirul Islam Managing Director 1,200,000Md. Imam Shaheen Additional Managing Director 700,000Monoranjan Kundu Executive Director (F&A) 525,000Obaidullah Arif Khan General Manager 500,000Md. Rafiqur Rahman Company Secretary 400,000Sunil Krishna Saha General Manager (RI) 375,000General Manager Assistant General Manager IT 425,000Remuneration Paid to Director who was Not an Officer of the Company

The company did not pay remuneration to any director who was not director during the last fiscal year.

Future Compensation

The company does not have any contract with any director or officer regarding future compensation.

Pay Increase Intention

The except for normal annual increment and allowance, the company has no plan to substantially increase the remuneration, salary etc.

Options Granted to Directors, Officers and Employees

The company did not grant any option for issue of shares to any officer, director and other employees of the company.

Transaction with the Directors and Subscribers to the Memorandum

Benefit from the Company

The directors and subscribers of the company have not received any benefits other than director’s fee which has also been disclosed in the audited statement for the period ended 30 September, 2009 and the company also has not received anything from its directors and subscribers except fund against allotment of shares.

Directors and Subscribers’ Assets to the Company

The directors and subscribers of the company have not transferred any asset to the company but deposited share money as required. The company acquired asses by investing its own funds.

Securities Owned by the Officers

The officers of the company does not own any share of the company

Auditor’s Certificate Regarding Tangible Assets per Share

We have examined the calculation of Net Tangible Asset per share of the Company as of June 30, 2013 which has been prepared by the management of Phoenix Insurance Limited. The preparation of the following calculation of Net Tangible Asset per share is the responsibility of the company's Management.

Our responsibility is to review and certify as to whether subject matter has been properly prepared using acceptable principles and on the basis of Audited Consolidated Financial Statements for the period ended June 30, 2013.

Based on our review, we hereby certify that the company has properly prepared the calculation of Net Tangible Asset per share using acceptable principles and on the basis of Audited consolidated Financial Statements for the nine month period ended June 30, 2013.

Particulars As on 30th June 2013 (Tk.)Current Assets (cash, bank balance, money at

call)900,610,728

Fixed and other assets 312,213,278Total Tangible Assets (A) 1,212,824,006

Total Liabilities (B) 568,062,110Net Tangible Assets (A-B) 644,761,896

Number of Shares Outstanding (C) 40,341,572Net Tangible Asset per Share 15.98

Sd/-

Khan Wahab Shafique & Co.Dhaka, July 8, 2013 Chartered Accounts

Features of IPO

Market for the Securities Being Offered

The issuer shall apply to all the stock exchanges in Bangladesh within seven (7) working days fromthe date of consent accorded by the Commission to issue prospectus.

The issuer will apply at:

And

Declaration about Listing of Bonds with Stock Exchange(s)

None of the stock exchange(s), if for any reason, grants listing within seventy five (75) days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within fifteen days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said seventy five (75) days, as the case may be.

In case of non-refund of the subscription money within the aforesaid fifteen (15) days, the company’s directors, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (Two Percent) per month above the bank rate, to the subscribers concerned.

The Issue Manager, in addition to the Issuer Company, shall ensure due compliance of the above mentioned conditions and submit compliance report, thereon, to the Commission within seven (7)days of expiry of the aforesaid fifteen (15) days time period allowed for refund of the subscription money.

Description of Securities Outstanding or Being Offered

Dividend, Voting, Pre-emption Rights

The share capital of the company is divided into ordinary shares and is eligible to receive dividend in terms of the relevant provisions of the Companies Act, 1994 and the Articles of

Dhaka Stock Exchange Limited.9/E, Motijheel Commercial Area, Dhaka 1000

Chittagong Stock Exchange LimitedCSE Building, 1080, Sheikh Mujib Road, Chittagong 4100

Association of the company. All Shareholders shall have the usual voting right in person or by proxy or power of attorney in connection with, among others, selection of Directors and Auditors and other usual General Meeting whether ordinary or extraordinary. On a show of hand, every shareholder present and every duly authorized representative of a shareholder present at a General Meeting shall have one vote and on a poll every shareholder present in person or by proxy shall have one vote for every share held by him/her.

In case of any additional issue of shares for raising further capital, the existing shareholders shall be entitled in terms of the guidelines issued by BSEC time to time.

Conversion and Liquidation Rights

If the Company at any time issues convertible preferences shares or debentures with the consent of BSEC or/and other regulatory authority, such holders of securities shall be entitled to convert such securities into ordinary shares if it is so determined by the Company.

In terms of the provisions of the Companies Act, 1994, Articles of Association of the Company and other relevant rules in force, the shares of the company are freely transferable. The company shall not charge any fee for registering transfer of bonds. No transfer shall be made to firms, minors or persons of unsound mind.

Dividend Policy

The profit of the company, subject to any special right relating thereto created or authorized to be created by the Memorandum of Association and subject to the provision of the Articles of Association, shall be divisible among the members in proportion to the capital paid up on the shares held by them respectively.

The Company in General Meeting may declare dividend to be paid to the members according to their rights and interests in the profits and may fix the time of payment. But no larger dividend shall be declared than is recommended by the Directors, but the Company at its General Meeting may declare a smaller dividend. The declaration of Directors as to the amount of net profit of the company shall be conclusive.

No dividend shall be payable except out of profits of the company or any other undistributed profits. Dividend shall not carry interest as against the Company.

The Directors may, from time to time, pay the members, such interim dividend, as in their judgment, the financial position of the Company may justify.

A transfer of shares shall not pass the right to any dividend declared thereon before the registration of transfer.

There is no limitation on payment of dividends to common stockholders.52

Other Rights of the Shareholders

In terms of provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are transferable. The Company shall not charge any fee, other than Government duties for registering transfer of shares. No transfer shall be made to a minor or person of unsound mind.

The shareholders shall have the right to receive all periodical reports and statements, audited as well as un-audited, published by the company from time to time. The Directors shall present the financial statements as required under the law and Bangladesh Accounting Standards (BAS). Financial Statements will be prepared in accordance with the Bangladesh Accounting Standards, consistently applied throughout the subsequent periods and present with the objective of providing maximum disclosure as per law and Bangladesh Accounting Standard to the shareholders regarding the financial and operational position of the Company.

In case of any declaration of stock dividend by issue of bonus shares, all shareholders shall be entitled to it, in proportion to their shareholdings, on the date of book closure for the purpose.

The shareholder holding not less than 10% of the issued/fully paid up capital of the company shall have the right to requisition Extra-Ordinary General Meeting of the company as provided under Section 84 of the Companies Act, 1994.

Features of Bond

Bond

In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. When a company, private or public Corporations or Banks (or government) wishes to borrow money from the public on a long term basis, it usually does so by issuing or selling debt securities that is generally called bonds. A bond is normally a fixed interest bearing loan instruments, meaning that the borrower will pay the interest on

predetermined time schedules but the principal will be repaid at the end of the loan i.e. on maturity. The amount that will be repaid at the end of the loan is called the bond’s face value or par value. The number of years until the face value is paid is called the bond’s time to maturity. Once the bond has been issued, the number of years to maturity declines as time goes by. Interest rates change over time. The cash flows from a bond, however, stay the same. As a result, the value of the bond will fluctuate. When interest rates rise, the present value of the bond’s remaining cash flows declines, and the bond is worth less. When interest rates fall, the bond is worth more. To determine the value of a bond at a particular point of time, we need to know the number of periods remaining until maturity, theface value, the coupon, and the market interest rate for bonds with similar features. This interest rate required in the market on a bond is called the bond’s Yield To Maturity (YTM). As mentioned earlier, bond prices and interest rates always move in opposite directions. When interest rates rise, a bond’s value will decline. Similarly, when interest rates fall, bond values rise. Good quality corporate bonds combine relative safety with an annual yield that is generally higher than that available elsewhere (even more than dividend yields on most listed common stocks).

Features of Bonds

Nominal, Principal or Face Amount - the amount on which the issuer pays interest and which, most commonly, has to be repaid at the end. Some structured bonds can have a redemption amount which is different to the face amount and can be linked to performance of particular assets such as a stock or commodity index, foreign exchange rate or a fund. This can result in an investor receiving less or more than his original investment at maturity.

Issue Price - the price at which investors buy the bonds when they are first issued, which will typically be approximately equal to the nominal amount. The net proceeds that the issuer receives are thus the issue price, less issuance fees.

Maturity Date - the date on which the issuer has to repay the nominal amount. As long as all payments have been made, the issuer has no more obligations to the bond holders after the maturity date. The length of time until the maturity date is often referred to as the term or tenor or maturity of a bond.

Coupon - the interest rate that the issuer pays to the bond holders.

Coupon Dates - the dates on which the issuer pays the coupon to the bond holders. Most of the bonds are semi-annual, which means that they pay a coupon every six months.

Optionality - Occasionally a bond may contain an embedded option; that is, it grants option-like features to the holder or the issuer:

Callability - Some bonds give the issuer the right to repay the bond before the maturity date on the call dates. These bonds are referred to as callable bonds. Most callable bonds allow the issuer to repay the bond at par. With some bonds, the issuer has to pay a premium which is called call premium. This is mainly the case for high-yield bonds. These have very strict covenants, restricting the issuer in its operations. To be free from these covenants, the issuer can repay the bonds early, but only at a high cost.

Putability - Some bonds give the holder the right to force the issuer to repay the bond before the maturity date on the put dates.

Call Dates and Put Dates - the dates on which callable and putable bonds can be redeemed early.

Convertible Bond - A convertible bond is a type of bond that the holder can convert into shares of common stock in the issuing company or cash of equal value, at an agreed-upon price. It is a hybrid security with debt and equity-like features. From the issuer's perspective, the key benefit of raising money by selling convertible bonds is a reduced cash interest payment. However, in exchange for the benefit of reduced interest payments, the value of shareholder's equity is reduced due to the stock dilution expected when bondholders convert their bonds into new shares. Conversion strike price determines how many shares can be converted from each bond.

Features of Phoenix Insurance Convertible Bond

Key Features of Convertible Bond of Phoenix Insurance Limited

Issuer : Phoenix Insurance Company Limited

Purpose : To raise Tier 2 Capital (subject to regulatory approval) andundertake normal commercial banking activities with theproceeds as permitted by the Bangladesh Bank.

Lead Arranger : Industrial & Infrastructure Development Finance Co. Ltd (IIDFC)

Issue Manager : IDLC Finance Limited

Trustee : The Eastern Bank Limited

Investors : 80% of the total Issue Size shall be offered to institutional investors including onshore and

offshore investors and the remaining 20% shall be offered to public through IPO.

Issue Size : BDT 100,000,000 (Bangladesh Taka 100 million)

Issue Type : Convertible Bond Issue (“Bond”) of Phoenix Insurance Ltd. with qualification as Tier 2 Capital.

Tenor : 84 Months from the date of issue, bullet repayment.

Face Value : Each Bond will have a Face Value of BDT 1,000 (One Thousand).

Market Lot : Each market lot will consist 5 (five) bonds each with a FaceValue of BDT 1,000 (One Thousand).

Listing Size : Public listing of BDT 100,000,000 Convertible Bond in the ratio of 80:20 for private placement and public offerings, respectively in DSE and CSE. .

Reference Rate : The Reference Rate is the latest 182-days Bangladesh Government T-Bill as published on Bangladesh

Bank website or other sources of publication. “Quotation Day” means, in relation to any period for which an interest rate is to be determined, 5 Business Days before the first day of that period. If the Reference Rate is not available on the Quotation Day, the Trustee will be entitled to apply a Treasury Bill rate with the next lower maturity; or if such a rate is unavailable then the Issuer shall negotiate in good faith with the Trustee (upon the request of the Investors) in order to arrive at a mutual agreement upon the applicable interest rate and period of interest for the Facility. Such determination thereof shall be conclusive and binding on the Issuer.

Interest Margin above the Reference Rate for the Issue: Margin is 6.50% determined during the book

building exercise and market conditions at the precise time of issuance.

Interest Floor : The Interest Margin plus the Reference Rate will be set at 12.50% (the Interest Floor) at all times.

.Increased Risk Interest : 2% above the Interest Floor or the Interest Margin and

the Reference Rate; whatever is higher. This will be triggered under the following conditions:

(i) Non-Payment: a default is made in the payment of any principal or in the payment of any interestdue in respect of the Bonds;

(ii) Breach of Financial Covenant: any financial covenant requirement is not satisfied at any timeas per terms and conditions of the bond;

(iii) Downgrade of Credit Rating: the credit rating of the Issuer and of the Bonds falling below Investment Grade;

(iv) Breach of Other Obligations: the Issuer does not perform or comply with one or more of its other obligations in the Bonds or the Trust Deed which default is incapable of remedy or, if in the opinion of the Trustee capable of remedy, is not in the opinion of the Trustee remedied within 30 days after written notice of such default shall have been given to the Issuer by the Trustee;

(v) Misrepresentation: any representation or statement made or deemed to be made by the Issuer in any Bond Document or any other document delivered by or on behalf of the Issuer under or in connection with any Bond Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made;

(vi) Failure to deliver Shares: any failure by the Issuer to deliver any Shares as and when the Shares are required to be delivered following Conversion of

Bonds and such failure continues for more than three days or a Delisting Event occurs;

(vii) Insolvency: the Issuer or any of its Subsidiaries is (or is, or could be, deemed by law or a court to be) insolvent or bankrupt or unable to pay its debt,

(viii) Cross-Default: any other present or future indebtedness (whether actual or contingent) of the Issuer or any of its Subsidiaries for or in respect of moneys borrowed or raised becomes (or becomes capable of being declared) due and payable prior to its stated maturity by reason of any actual or potential default, event of default or the like (howsoever described);

(ix) Enforcement Proceedings: a distress, attachment, execution, seizure before judgmentor other legal process is levied, enforced or sued out on or against any material part of the property, assets or turnover of the Issuer or any of its Subsidiaries and is not discharged or stayed within 30 days;

(x) Winding-up: an order is made or an effective resolution passed for the winding-up or dissolution or administration of the Issuer or any of its Subsidiaries (except for a members’ voluntary solvent winding up of a Subsidiary), or the Issuer or any of its Subsidiaries ceases or threatens to cease to carry on all or a material part of its business or operations, except for the purpose of and followed by a reconstruction amalgamation, reorganization , merger or consolidation;

(xi) Security Enforced: an encumbrance takes possession or an administrative or other receiver or an administrator or other similar officer is appointed of the whole or a material part of the property, assets or turnover of the Issuer or any of its Subsidiaries (as the case may be) and is not discharged within 30 days;

(xii) Governmental Intervention: by or under the authority of any government or of the Bangladesh Bank (as the case may be) (a) the management of the Issuer or any member of the Group is wholly or partially displaced; or (b) the authority of the Issuer

or any member of the Group in the conduct of its business is wholly or partially curtailed; or (c) any of the Shares of the Issuer or any member of the Group or any part of its revenues or assets is seized, nationalized, expropriated or compulsorily acquired;

(xiii) Nationalization: (a) any step is taken by any person with a view to the seizure, compulsory acquisition, expropriation or nationalization of all or a material part of the assets of the Issuer or any of its Subsidiaries or (b) the Issuer, or any of its Subsidiaries is prevented from exercising normal control over all or a material part of its property, assets and turnover;

(xiv) Repudiation: it rescinds or purports to rescind or repudiates or purports to repudiate a Bond Document or evidences an intention to rescind or repudiate a Bond Document;

(xv) Illegality: it is or will become unlawful for the Issuer to perform or comply with any one or more of its obligations under any of the Bonds or the Trust Deed;

(xvi) Material Adverse Change: any event or circumstance (or any series of events or circumstances) occurs which the Trustee reasonably believes might have a Material Adverse Effect; or

(xvii) Analogous Events: any event occurs which under the laws of any relevant jurisdiction an analogous effect to any of the events has referred to in any of the foregoing paragraphs.

The Bonds shall automatically bear interest from (and including) the date of the occurrence of any such event at the Step-Up Interest Rate. The Trustee shall notify the Bondholders in accordance not less than 3 business days after it has become aware of an Event of Default that the Step-Up Interest Rate has taken effect.

Interest Payment Dates : Interest on the “Bond” is to be paid semi-annually on the interest payment dates. The interest payment dates

currently are determined as 15th October

and 15th April during the tenor of the facility. Interest payment will be calculated on the actual number of days over a 360 day (year of twelve 30-day month) basis and will be payable semi-annually.

Interest Period : A 180 day period between an Interest Payment and the date falling immediately prior to the next occurring Interest

Payment Date.59Principal Payment and Principal Payment Date : Full Principal Payment, minus the converted portion of the

bond (if any), will be in the form of a single bullet payment at the end of maturity in the event the Investors decide not to convert into common shares for the eligible convertible portion. The Principal Payment Date will be the date of maturity of the Bond 84 months after the date of issue of the Bond to the Investors.

Conversion Option : The Investor at the predetermined Principal Payment Dates of the Bond reserve the right and option to convert

25% of the Face Value of the Bond at a pre-determined

Conversion Strike Price into the common shares of Phoenix Insurance Company Ltd. However, conversion is not

mandatory.

Conversion Date : The Conversion Date is the same date will be 5th, 6th & 7thanniversary of Bond issuance date.

The Conversion Strike Price : The Conversion Strike Price is the predetermined

conversion price of the available convertible portion of the bond.

(i) Conversion Strike Price = Conversion Multiple × NAV per share as per last audited financial statements of the Company

(ii) Conversion Multiple = (Daily average market price of the immediate previous 6 months average market price of Phoenix Insurance Company Ltd. shares in the Dhaka Stock Exchange, prior to signing date of the

transaction)/ (NAV per share as per last audited financial statements of the Company prior to signing date of the transaction) = 1.70

The Conversion Method : (i) 5% of issue size at the 5th Year at the above mentioned

predetermined multiple of book value of the immediately available last audited book value of Phoenix Insurance.Converted Face Value = 5% of the Face Value of the bonds held by the bondholders

(ii) 10% of issue size at the 6th Year at the above mentioned predetermined multiple of book value of the immediately available last audited book value of Phoenix Insurance. Converted Face Value = 10% of the Face Value of the bonds hold by the bondholders

(iii) 10% of issue size at the 7th Year at the above mentioned predetermined multiple of book value of the immediately available last audited book value of Phoenix Insurance. Converted Face Value = 10% of the Face Value of the bonds hold by the bondholders

In the event of Conversion, the Investors will receive exactly the amount of shares as determined by

dividing Face Value by Conversion Strike Price for determining the number shares to be received by each Investor, fractional amount of shares will be paid in cash at existing market price.

Converted No. of Shares = (Converted Face Value)/ (Conversion Strike Price)

Conversion Right : The right of a bondholder to convert 25% of the principal amount of any bond held by himself/ herself into

shares is called Conversion Right. A Conversion Right may only be exercised if in respect of one or more Bonds. If more than one Bond held by the same holder is converted at any one time by the same holder, the number

of Shares to be issued upon such conversion will be calculated on the basis of the relevant percentage of the aggregate principal amount of the Bonds to be converted.

Conversion Notice : The Conversion Right attaching to any Bond may be exercised, at the option of the holder thereof as at

the 42ndbusiness day prior to each Conversion Date, during the period commencing 40 business days prior to such Conversion Date up to the close of business on the twentieth business day prior to such Conversion Date. The Trustee shall notify the Bondholders in accordance with in less than 2 business days.

Rationale for Investing in Convertible Bond of Phoenix Insurance Company Limited

1. Difference between Bonds and Stocks

Bonds and stocks are both securities. But the major difference between the two is that stockholders have an equity stake in the company i.e. they are owners of the company. Ownership comes with voting rights and the right to share in any future profits. By purchasing bonds, bondholders have a creditor stake in the company. The primary advantage of being creditor is that the investor has a higher claim on assets than shareholders do; i.e. in case on bankruptcy, a bondholder will have the first charge on assets of the company (except specific charges). Another difference is that bonds usually have a defined term, or maturity, after which the bond is redeemed, whereas stocks may be outstanding indefinitely.

2. Convertibility Option

The investor at the predetermined principal payment dates of the bond reserve the right and option to convert 25% of the face value of the bond at a pre-determined conversion strike common shares of Phoenix Insurance Company Limited. The execution of the convertibility option will be beneficial for the investors when the stock price of Phoenix Insurance Company

Limited will be higher than the conversion strike price. Due to the high potential of Phoenix Insurance Company Limited the conversion option will be a beneficial option for the investors.

3. Volatility of the Capital Market

Investment in capital market involves a high degree of risk. In cases where investors cannot bear the short term volatility of the capital market, investment in the bonds is more secured and stable with guaranteed return.64

Trustee

Eastern Bank Limited a leading private commercial bank duly incorporated in Bangladesh under the Companies Act, 1994 and Bank Companies Act, 1991 having its registered office at 10, Dilkusha C/A Dhaka-1000, hereby declares and confirms that it is going to act in the capacity of a trustee with the execution of this Trust Deed subject to the power, provisions, agreements and declarations herein contained. The Trustee shall act for the benefit of the bond holders by ensuring full repayment on each bond maturity.

Objects and Undertakings of the Trust

The Trust has been created with the following objects and the Trustee covenants as follows:

to hold the benefit of the covenants made by the Issuer in this Trust Deed and the Conditions on trust for the Bondholders;

to open such accounts as the Trustee deems necessary for discharging the functions of Trustee;

to keep the money and assets representing the Trust Assets (including enforcement proceeds) and to deposit and withdraw such moneys and assets as may be required from time to time and in accordance with the terms of this Trust Deed;

to undertake all such actions for the recoveries of any outstanding payments in accordance with the provisions of this Trust Deed and to execute all such documents, deeds and papers and to do all acts in relation thereto;

to manage and administer the Bonds in accordance with the terms of this Trust Deed and to execute, acknowledge, confirm or endorse any agreements, documents, deeds, instruments and papers in connection therewith;

to administer and manage the conversion of the Bonds and issue and delivery of Shares upon such conversion in accordance with the Conditions;

to convene any meeting of the Bondholders in accordance with the provisions of the Trust Deed and the Conditions, and to facilitate the proceedings of such meeting as it deems appropriate in accordance with the terms of this Trust Deed;

to implement, give effect to and facilitate the Conditions and such other documents, deeds and agreements in contemplation thereof or in connection therewith;

upon receipt of the instructions of such requisite majority of the Bondholders in accordance with the terms of this Trust Deed, to sell or otherwise dispose of the Trust Assets and close any bank accounts that may have been opened in pursuance of this Trust Deed after the distribution of amounts standing to their credit; and

to do all such other acts, deeds and things as may be necessary and incidental to the above provisions unless such acts require the prior consent of the Bondholders in accordance with the terms of this Trust Deed.

65Trustee's Powers and Duties

Trustee's determination: The Trustee may determine whether or not a default in the performance or observance by the Issuer of any obligation under the provisions of this Trust Deed or contained in the Bonds is capable of remedy and if the Trustee shall certify that any such default is, in its opinion, not capable of remedy, such certificate shall be conclusive and binding upon the Issuer and the Bondholders;

Determination of questions: the Trustee as between itself and the Bondholders shall have full power to determine all questions and doubts arising in relation to any of the

provisions of this Trust Deed and every such determination, whether made upon a question actually raised or implied in the acts or proceedings of the Trustee, shall be conclusive and shall bind the Trustee and the Bondholders;

Trustee's discretion: the Trustee shall (save as expressly otherwise provided herein) as regards all the trusts, powers, authorities and discretions vested in it by this Trust Deed or by operation of law, have absolute and uncontrolled discretion as to the exercise or non-exercise thereof and the Trustee shall not be responsible for any Liability that may result from the exercise or non-exercise thereof (save as otherwise provided by applicable law) but whenever the Trustee is under the provisions of this Trust Deed bound to act at the request or direction of the Bondholders, the Trustee shall nevertheless not be so bound unless first indemnified and/or provided with security to its satisfaction against all actions, proceedings, claims and demands to which it may render itself liable and all costs, charges, damages, expenses and liabilities which it may incur by so doing;

Trustee's consent: any consent given by the Trustee for the purposes of this Trust Deed maybe given on such terms and subject to such conditions (if any) as the Trustee may require;

Conversion of currency: where it is necessary or desirable for any purpose in connection with this Trust Deed to convert any sum from one currency to another it shall (unless otherwise provided by this Trust Deed or required by law) be converted at such rate or rates available to the Trustee on the relevant date, in accordance with such method and as at such date for the determination of such rate of exchange, as may be specified by the Trustee in its absolute discretion as relevant and any rate, method and date so specified shall be binding on the Issuer and the Bondholders;

Application of proceeds: the Trustee shall not be responsible for the receipt or application by the Issuer of the proceeds of the issue of the Bonds or the delivery of any Bonds in the respective BO Accounts of the persons entitled to them;

Error of judgment: the Trustee shall not be liable for any error of judgment made in good faith by any officer or employee of the Trustee assigned by the Trustee to administer its corporate trust matters;

Agents: the Trustee may, in the conduct of the trusts of this Trust Deed instead of acting personally, employ and pay an agent on any terms, whether or not a lawyer or other professional person, to transact or conduct, or concur in transacting or conducting, any business and to do or concur in doing all acts required to be done by the Trustee (including the receipt and payment of money) and the Trustee shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the

misconduct, omission or default on the part of any person appointed by it hereunder or be bound to supervise the proceedings or acts of any such person provided that the Trustee had exercised reasonable care in the appointment of such person;

Delegation: the Trustee may, in the execution and exercise of all or any of the trusts, powers, authorities and discretions vested in it by this Trust Deed and having exercised reasonable care in so doing, act by responsible officers or a responsible officer for the time being of the Trustee and the Trustee may also whenever it thinks fit, whether by power of attorney or otherwise, delegate to any person or persons or fluctuating body of persons (whether being a joint trustee of this Trust Deed or not) all or any of the trusts, powers, authorities and discretions vested in it by this Trust Deed and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate with the consent of the Trustee) as the Trustee may think fit in the interests of the Bondholders and the Trustee shall not be bound to supervise the proceedings or acts of and shall not in any way or to any extent be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of such delegate or sub-delegate provided that the Trustee had exercised reasonable care in the appointment of such delegate;

Custodians and nominees: the Trustee may appoint and pay any person to act as a custodian or nominee on any terms in relation to such assets of the trust as the Trustee may determine, including for the purpose of depositing with a custodian this Trust Deed or any document relating to the trust created hereunder and the Trustee shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it hereunder or be bound to supervise the proceedings or acts of any such person provided that the Trustee had exercised reasonable care in the appointment of such person; the Trustee is not obliged to appoint a custodian if the Trustee invests in securities payable to bearer; and

Confidential information: the Trustee shall not (unless required by law or ordered so to do by a court of competent jurisdiction) be required to disclose to any Bondholder confidential information or other information made available to the Trustee by the Issuer in connection with this Trust Deed and no Bondholder shall be entitled to take any action to obtain from the Trustee any such information.

67Trustee Liability

Subject to applicable law, the Trustee shall not be liable to any person for any matter or thing done or omitted in any way in connection with or in relation to this Trust Deed or the Bonds save in relation to its own gross negligence, wilful default or fraud.

Notice

At least 21 days' notice (exclusive of the day on which the notice is given and of the day on which the relevant Meeting is to be held) specifying the date, time and place of the Meeting shall be given to the Bondholders (with a copy to the Issuer) where the Meeting is convened by the Trustee or, where the Meeting is convened by the Issuer, the Trustee. The notice shall set out the full text of any resolutions to be proposed unless the Trustee agrees that the notice shall instead specify the nature of the resolutions without including the full text and shall state that a Bondholder may appoint a Proxy either under a Block Voting Instruction by delivering written instructions to the Trustee or by executing and delivering a Form of Proxy to the Specified Office of the Trustee, in either case until 48 hours before the time fixed for the Meeting.

Chairman

An individual (who may, but need not, be a Bondholder) nominated in writing by the Trustee may take the chair at any Meeting but, if no such nomination is made or if the individual nominated is not present within 15 minutes after the time fixed for the Meeting, those present shall elect one of themselves to take the chair failing which, the Issuer may appoint a Chairman. The Chairman of an adjourned Meeting need not be the same person as was the Chairman of the original Meeting.

Poll

A demand for a poll shall be valid if it is made by the Chairman, the Issuer, the Trustee or one or more Voters representing or holding not less than one fiftieth of the aggregate principal amount of the outstanding Bonds. The poll may be taken immediately or after such adjournment as the Chairman directs, but any poll demanded on the election of the Chairman or on any question of adjournment shall be taken at the Meeting without adjournment. A valid demand for a poll shall not prevent the continuation of the relevant Meeting for any other business as the Chairman directs.

Votes

Every Voter shall have:

on a show of hands, one vote; and

on a poll, one vote in respect of each BDT [1,000] in aggregate face amount of the outstanding Bond(s) represented or held by him.

Unless the terms of any Block Voting Instruction state otherwise, a Voter shall not be obliged to exercise all the votes to which he is entitled or to cast all the votes which he exercises in the same way. In the case of a voting tie the Chairman shall have a casting vote.

Adjourned Meeting

The Chairman may, with the consent of, and shall if directed by, any Meeting adjourn such Meeting from time to time and from place to place, but no business shall be transacted at any adjourned Meeting except business which might lawfully have been transacted at the Meeting from which the adjournment took place.

Power of meeting of Bondholders

A Meeting shall have power (exercisable only by Extraordinary Resolution), without prejudice to anyother powers conferred on it or any other person:

to approve any Reserved Matter;

to approve any proposal by the Issuer for any modification, abrogation, variation or compromise of any provisions of this Trust Deed or the Conditions or any arrangement in respect of the obligations of the Issuer under or in respect of the Bonds;

to approve the substitution of any person for the Issuer (or any previous substitute) as principal obligor under the Bonds;

to waive any breach or authorize any proposed breach by the Issuer of its obligations under or in respect of this Trust Deed or the Bonds or any act or omission which might otherwise constitute an Event of Default under the Bonds;

to remove any Trustee;

to approve the appointment of a new Trustee;

to authorize the Trustee (subject to its being indemnified and/or secured to its satisfaction) or any other person to execute all documents and do all things necessary to give effect to any Extraordinary Resolution;

to discharge or exonerate the Trustee from any liability in respect of any act or omission for which it may become responsible under this Trust Deed or the Bonds;

to give any other authorization or approval which under this Trust Deed or the Bonds is required to be given by Extraordinary Resolution; and

to appoint any persons as a committee to represent the interests of the Bondholders and to confer upon such committee any powers which the Bondholders could themselves exercise by Extraordinary Resolution.

Plan of Distribution

Underwriting of Bonds

Total size of the repeat public offer is 100,000 convertible bonds Phoenix Insurance Company Limited of BDT 1,000 each totaling to BDT 100,000,000. Out of the total issue 80% has been subscribed through private placement. The rest 20% i.e. 20,000 convertible bonds amounting to BDT 20,000,000 has been fully underwritten by the following institutions as per Rule 4(6) of the Public Issue Rules 2006.

Name of UnderwritersNumber of Bonds

underwrittenAmount (Tk.)

Prime Bank Limited 6,000 6,000,000City Bank Limited 4,000 4,000,000LankaBangla Finance Limited 5,000 5,000,000Prime Finance & Investment Limited 2,000 2,000,000IDLC Finance Limited 3,000 3,000,000

20,000 20,000,000

Principal Terms and Conditions of Underwriting Agreement

1. If and to the extent that the bonds offered to the public by a Prospectus authorized hereunder shall not have been subscribed and paid for in cash in full by the closing date, the Company shall within 10 (Ten) days of the closure of subscription call upon the underwriter in writing with a copy of said writing to the Securities and Exchange Commission, to subscribe for the bonds not subscribed by the closing date and to pay for in cash in full for such unsubscribed bonds in cash in full within 15 (Fifteen) days of the date of said notice and the said amount shall have to be credited into bonds subscription account within the said period.

2. If payment is made by Cheque/Bank Draft by the underwriter it will be deemed that the underwriter has not fulfilled his obligation towards his underwriting commitment under the Agreement, until such time as the Cheque/Bank Draft has been en-cashed and the Company’s account has been credited.

3. In any case within 7 (Seven) days after the expiry of the aforesaid 15(Fifteen) days, the Company shall send proof of subscription and payment by the underwriter to the Commission.

4. In the case of failure by the underwriter to pay for the bonds under the terms mentioned above, the said Underwriter will not be eligible to underwrite any issue, until such time as he fulfills his underwriting commitment under the Agreement and also other penalties as may be determined by the Commission may be imposed on him.

5. In case of failure by any underwriter to pay for the bonds within the stipulated time, the Company/Issuer will be under no obligation to pay any underwriting commission under the Agreement.

6. In case of failure by the Company to call upon the underwriter for the aforementioned purpose within the stipulated time, the Company and its Directors shall individually and collectively be held responsible for the consequence and/or penalties as determined by the Securities and Exchange Commission under the law may be imposed on them.

Commission for the Underwriters

The company shall pay to the underwriter an underwriting commission at the rate of 0.5% of the entire public offer amount of the issue value of bonds underwritten by them out of the Public Issue.

Relationship of Officers or Directors of The Underwriter(S) with The Member of

Board of the Company

No Officer or Director of the Underwriter(s) is presently engaged as the Director of the company.

Allotment, Subscription and Market

Lock-in Provision

As per notification SEC/CMRRCD/2009-193/Admin/03-33 date July 9, 2009 issued by BSEC the equity security issued in part or in full against any convertible security by a listed company for which the consent has already been accorded under the Securities and Exchange Commission (Issue of Capital) Rules, 2001, shall be subject to a lock-in of (a) 3 (three) years in case of directors and those who hold 5% (five percent) or more shares, and (b) 1 (one) year in case of others, from the date of issuance of such security, or from the date of issuance of consent, whichever is later: Provided that the time involved in between the issuance of convertible security and converted equity security shall be counted for the lock-in period: Provided further that the said lock-in shall also be applicable in case of issuance of equity security against loan or debt security having no predetermined conversion feature if such equity security is not issued at a price equal to last 6 (six) months’ weighted average market price at the stock exchange(s).”

Refund of Subscription Money

As per BSEC Notification Dated February 9, 2010, the issuer shall refund application money to the unsuccessful applicant of the public offer by any of the following manner based on the option given by the applicant in the application form:

(a) Through banking channel for onward deposit of the refund money into the applicant’s bank account as provided in the respective application form for subscription; or

(b) Through issuance of refund warrant in the name and address of the applicant as provided in the respective application form for subscription: Provided that, in case of deposit into the applicant’s bank account, the applicant will bear the applicable service charge, if any, of the applicant’s banker, and the issuer shall simultaneously issue a letter of intimation to the applicant containing, among others, the date and amount remitted with details of the bank through and to which bank such remittance has been effected.”

Subscription by and Refund to Non Resident Bangladeshis (NRB)

1. A Non-Resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable at Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for through crossed bank cheque marking “Account Payee only”.

2. The value of securities applied for by such person may be paid in Taka or US dollar or UK pound sterling or EURO at the rate of exchange mentioned in the securities application form.

3. Refund against over subscription shall be made in the currency in which the value of securities was paid for by the applicant through Account Payee bank cheque payable at Dhaka with bank account number, Bank’s name and Branch as indicated in the securities application form. If the applicants’bank accounts as mentioned in their RPO Application Forms are maintained with the Bankers to the Issue and other banks as mentioned below, refund amount of those applicants will be directly credited into the respective bank accounts as mentioned in their RPO Applicant

Availability of Securities

1. Securities

SecuritiesNumber Of

BondsTotal Amount(TK.)

10% of public offer, i.e. 2,000 Bonds shall be reserved for Non Resident Bangladeshis [A]

2,000 2,000,000

10% of public offer of Bonds shall be reserved for Mutual funds and Collective Investment schemes registered with the Commission [B]

2,000 2,000,000

16,000 16,000,000

80% of public offer of Bonds shall be opened forsubscription by the General Public. [C]

Total (A+B+C) 20000 20,000,000

2. All as stated in 1 (A), 1(B) and 1(C) shall be offered for subscription and subsequent allotment by the Issuer, subject to any restriction, which may be imposed, from time to time, by the Securities and Exchange Commission.

3. In case of over-subscription, under any of the categories mentioned in the clause 1(A), 1(B) and 1(C), the Issue Manger shall conduct an open lottery of all the applications received under each category separately in accordance with the letter of consent issued by the Securities and Exchange Commission.

4. In case of under-subscription, under any of the 10% category as mentioned in clause 1(A) and 1(B), the unsubscribed portion shall be added to the general public category, and, if after such addition there is over-subscription in the general public category the issuer and the issue manager shall jointly conduct an open lottery of all the applicants added together.

5. In case of under-subscription of the public offering, the unsubscribed portion of bonds shall be taken up by the underwriter(s).

6. The lottery as stated in clause (3) and (4) should be conducted in the presence of the representatives of Issuer, Stock Exchange(s) and the applicants, if there be any.

Allotment

The company reserves the right of accepting any application, either in whole, or in part, successful applicants will be notified by the dispatch on an allotment letter by registered post/courier. Letter of allotment and refund warrants will be issued within 5(five) weeks from the closing of the subscription list. After allotment the company will have to transfer the bonds to the allotees’ Beneficiary Owners (BO) account, which has been mentioned in the application form.

The company shall issue bond allotment letter to all successful applicants, within 5(five) weeks, from the date of the subscription closing date. At the same time, the unsuccessful application shall be refunded with the application money within 5 (five) weeks from the closing of the subscription date, Account Payee Cheque, without interest payable at Dhaka, Chittagong, Khulna, Rajshahi, Barisal, Sylhet as the case maybe.

Where allotment is made, in whole or in part in respect of joint application, the allotment letter will be dispatched to the person whose name appears first in the application form

notwithstanding that the bonds have been allotted to the joint applicants. Where joint applicant is accepted in part, the balance of any amount paid on application will be refunded without interest to the person named first in the application form.

Application for Subscription

1. Application for bonds may be made for a minimum lot of 5 (five) bonds to the value of Tk. 5,000 (Taka Five Thousand only) and should be made on the company’s Printed Application Forms. Application Forms and Prospectus may be obtained from the Registered Office of the Company, members of Dhaka Stock Exchange Limited, Chittagong Stock Exchange Limited, or from the Bankers to the issue. In case, adequate forms are not available, applicants may use photocopied/cyclostyled/ handwritten/typed copies of the forms. Applications must not be for less than 5 (five)bonds. Any application not meeting this criterion will not be considered for allotment purpose.

2. Joint application form for more than two (2) persons will not be accepted. In the case of joint application, each party must sign the application form.

3. Application must be in full name of individuals, or limited companies, or trusts or societies, and not in the name of firms, minors or persons of unsound mind. Applications from insurance, financial and market intermediary companies must be accompanied by Memorandum and Articles of Association.

4. An applicant cannot submit more than two applications, one in his/her own name and another jointly with another person. In case an applicant makes more than two applications, all the application will be treated as invalid and will not be considered for allotment purpose. In addition whole or part of application money may be forfeited by the Commission.

5. Bangladeshi Nationals (including non-resident Bangladeshi Nationals working abroad) and foreign nationals shall be entitled to apply for the bond.

6. Payment for subscription by investors other than Non-Resident Bangladeshi may be made to thesaid branches/offices of the banks mentioned below in Cash/ Cheque/Pay Order/Bank Draft. The Cheque/ Pay Order/ Bank Draft shall be made payable to the bank to which it is sent, be marked “Phoenix Insurance Company Ltd.”, shall bear the crossing “A/C Payee Only” and must be drawn on a bank in the same town of the bank to which application form is deposited.

7. All completed application forms together with remittances for the full amount, payable on application, shall be lodged by investors other than Non-Resident Bangladeshis with any of the branches of the Bankers to the Issue.

8. A Non-Resident Bangladeshi (NRB) shall apply against the Public Offer either directly byenclosing a foreign demand draft, drawn on a bank payable at Dhaka, or through a nominee (including a Bank or a Company) by paying out of foreign currency deposit account maintained in Bangladesh, for the value of securities applied for. The value of securities applied for may be paid in Taka, US Dollars, Great Britain Pounds or Euro Dollars at the spot buying (TT Clean) rate of exchange prevailing the date of opening of subscription. Refund against over subscription of bonds shall be made in the currency, in which the value of bonds, applied for, was paid by the applicant. Bonds application form against the quota for NRB shall be sent by the applicant directly along with a draft or cheque to the company at its registered office. Copies of application form and prospectus shall be available with the Bangladesh Embassy/High Commission in USA, UK, Saudi Arabia, UAE, Qatar, Kuwait, Oman, Bahrain, Malaysia, and South Korea and on the website of the SEC, Issuer Company, Issue Manager, DSE & CSE.

9. The RPO subscription money collected from investors (other than non-resident Bangladeshis) by the Bankers to the Issue will be remitted to the Company’s STD A/C No. 0000050210900001 of Prime Bank Limited, Dhaka, Bangladesh for this purpose.

10. The subscription money collected from Non-Resident Bangladeshis in US Dollars or Great Britain Pounds or Euro Dollars shall be deposited to three FC accounts opened by the Company for RPO purpose as follows:

Name Of the FC account

Currency Account NO. Bank

BBL Bond Issue - USD

US Dollar 0000840310900001 Prime Bank Limited

BBL Bond Issue - GBP

GB Pound 0000820310900001 Prime Bank Limited

BBL Bond Issue - EUR

Euro 0000810310900001 Prime Bank Limited

11. In the case of over-subscription of securities to the NRB applicants, refund shall be made by Prime Bank Limited out of the “FC Account for RPO NRB Subscription”. Prime Bank Limited has already opened the aforesaid FC Accounts and shall close these FC Accounts after refund of over-subscription, if any.

12. Applications not in conformity with the above requirements and the instructions printed on the applicant form are liable to be rejected.

Trading and Settlement

Trading and settlement regulation of the stock exchanges shall apply in respect of trading andsettlement of the bonds of the bank.

The issue shall be placed in Category “N” with DSE and CSE.

Bankers to the Issue

Material Contracts and Others

Material Contracts

a) Underwriting Agreements between the Company and the Underwriters.

b) Issue Management Agreement between the company and IDLC Finance Limited.

c) Contract between the company and the Central Depository Bangladesh Limited (CDBL).

d) Trust Deed between the company and The Eastern Bank Limited

The copies of the aforementioned contracts and documents and a copy of Memorandum of Association and Articles of Association of the bank and the Consent Order from SEC may be inspected, on any working day, during office hours, at the Registered Office of the Company and the Issue Manager.

Manager to the Issue

IDLC Finance Limited, Registered office at Bay’s Galleria (1st Floor), 57 Gulshan Avenue, Dhaka 1212 is acting as the Issue Manager. The issuer shall pay an amount of Tk 2,000,000 (Taka Two Million Only) as issue management fee.

Commission to the Bankers to the Issue

Commission at the rate of 0.10% of the amount collected will be paid to the Bankers to the Issue for the services to be rendered by them.

Corporate Directory

Registered & Corporate Office Phoenix Insurance Company Ltd.1/A, Dilkusha Commercial AreaPurbani Annex Building (1st Floor)Dhaka - 1000, BangladeshG.P.O. Box No. : 3647

Auditors Khan Wahab Shafique Rahman & Co.Chartered Accountants

Legal Advisor Law ValleyShajan Tower, Commercial BlockSuit-202 ( First Floor)4, SegunbagichaDhaka 1000

Manager to the Issue IDLC Finance LimitedBay’s Galleria(1st Floor)57, Gulshan AvenueDhaka 1212

Company’s Compliance Officer Md. Rafiqur RahmanCompany Secretary

Head of Legal, Regulatory & Internal Control

Phoenix Insurance Company Ltd.

All investors are hereby informed that Md. Rafiqur Rahman, Company Secretary and Head of Legal, Regulatory & Internal Control would be designated as Compliance Officer who will monitor the compliance of the Acts, and rules, regulations, notification, guidelines, conditions, orders/directions etc. issued by the Commission and/or stock exchange(s) applicable to the conduct of the business activities of the Company so as to promote the interest of the investors in the security issued by the Company, and for redressing investors’ grievances.

Auditor’s Report and Related Certificates