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Rights Share Offer Document

Date: November 25, 2010Rights Offer of 1,866,240 Ordinary Shares of Tk.100 each at an issue price of Tk.300 each including a premium of Tk.200 per share totaling Tk.559,872,000.00offered on the basis of 1:1, 1 (one) rights share for 1 (one) shares held on record date. Record Date for Entitlement of Rights OfferDecember 26, 2010SUBSCRIPTION

Opens on : January 25,2011

Closes on : February 22,2011(Within banking hours, both days inclusive)

MANAGER TO THE ISSUE

Uttara Finance and Investments Limited

JBC Tower (6th Floor), 10 Dilkusha C/A., Dhaka-1000, Bangladesh

Phone : 9568207 (Hunting), Fax : 880-2-9552461E-mail : info@uttarafinance.com Web: www. uttarafinance.biz

ADVISER TO THE ISSUE

Amin Court, 4th Floor (Suit # 404), 31,Bir Uttam Shahid Ashfaqueus Samad Road

Phone: +88029559602, +88029567726, Fax: 880-2-9558330Web-site:www.aaawebbd.com, E-mail: info@aaawebbd.comCREDIT RATING STATUSSurveillance Rating -2008 : A

Outlook : Stable

Date of Declaration : March 31, 2010

RATING ASSIGNED BYCredit Rating Information and Services Limited(CRISL)

FULLY UNDERWRITTEN BYStandard bank LimitedMetropolitan Chamber Building (3rd floor) 122-124. Motijheel C/A. Dhaka-1000

Swadesh Investment Management Ltd.

House#35, Road#1/A, Banani,Dhaka-1213.Fidelity Assets & Securities Co. Ltd

Suvastu Imam Square (4th floor), 65, Gulshan Avenue Dhaka-1212

Eastern Insurance Company Limited44, Dilkusha commercial Area, Dhaka-1000

PABX: 9563033-34, 9564246-48.Fax: 88-02-9569735

E-mail: eicl@dhaka.net,Website: www.easterninsurancebd.comAs per provision of the Depository Act, 1999 and regulation made thereunder, rights share shall only be issued in dematerialized condition. An applicant must apply for allotment of rights shares mentioning his/her Beneficiary Owner (BO) Account number in the application form.Definition and Elaboration of the abbreviated words and

technical terms used in the Rights Share Offer Document

AAA:AAA Consultants & Financial Advisers Limited

Allotment:Allotment of Share

BB:Bangladesh Bank

Commission:Securities and Exchange Commission

Companies Act:Companies Act, 1994 (Act. No. XVIII of 1994)

CSE:Chittagong Stock Exchange Limited

DSEEICL::Dhaka Stock Exchange LimitedEastern Insurance Company Limited

Issue:Rights Issue

Issue Manager:Uttara Finance and Investments Limited

Issuer Company:Eastern Insurance Company Limited

NAV:Net Assets Value

Offering Price:Price of the Securities of Eastern Insurance Company Limited

Registered Office:Head Office of the Company

RI:Rights Issue

Rights Issue Rule:Securities and Exchange Commission(Rights Issue)Rules,2006

RJSC:Registrar of Joint Stock Companies & Firms

SEC:Securities and Exchange Commission

Securities:Shares of Eastern Insurance Company Limited

Securities Market:The Share Market of Bangladesh

Sponsor:The Sponsor Shareholders of Eastern Insurance Company Limited

Stockholder:Shareholder

Subscription:Application Money

UFIL:Uttara Finance and Investments Limited

TABLE OF CONTENTS

SL NOPARTICULARSPAGE NUMBER

1. The Rights Offer 1

2. Risk Factors1-3

3. Business Operation4

4. Utilization of IPO Fund

5

5. Purpose of the Rights Issue5

6. Highlights of the Company6

7. Board of Directors & Management 7-8

8. Corporate Information 9

9. Bankers to the Issue of Rights Share10

10. Ion Justification of the Issue Price of Rights Shares11-13

11. Projected Financial Statement14 -17

12. Implementation Schedule18

13. Length of time the Company has carried on business18

14. Quantity of shares held by Sponsor Directors and Shareholders19

15. Beneficial owners holding shares 5% or above 19

16. Classified information & Underwriters 19-20

17. Terms and Conditions of the Rights Issue21-22

18. Material Contracts

23

19. Declaration by the Issue Manager (Form-A), Underwriters (Form-B),Auditors (Form-C), Director (Form-D), Auditor (Form-C) and Directors (Form-D)24-27

20. Auditors Report in pursuance of Section-135(1) under Para-24(1) of part-II of the Third Schedule of the Companies Act, 1994

28-31

21. Auditors Report to the Shareholders, Audited financial Accounts32-54

22. Credit Rating Reports55-69

23. Letter of offer for Rights Issue to the Shareholders70

24. Form of Acceptance and Application for Shares, Form-A71-72

25. Form of Renunciation, Form-B 73

26. Application by Renouncee (s), Form-C 74

EASTERN INSURANCE COMPANY LIMITED44, Dilkusha commercial Area, Dhaka-1000PABX: 9563033-34, 9564246-48.Fax: 88-02-9569735,

E-mail: eicl@dhaka.net,Website: www.easterninsurancebd.com

RIGHTS ISSUE OF SHARES26 December, 2010Dear Shareholder(s)

We are pleased to inform you that the shareholders of the Company in the Extra Ordinary General Meeting (EGM) held on 07th July, 2010 approved to issue Rights Share 1,866,240 Ordinary Share of Tk.100 each at an issue price of Tk.300 each including a premium of Tk.200.00 totaling Tk.559, 872,000.00 offered on the basis of 1(one) new shares for every 1 (one) shares held on record date. The purpose of issuance of Rights Shares is to strengthen capital base of the Company and adaptation with capital structure of Insurance Act 2010.Due to satisfactory activities and services, the Company has earned Net Profit (before tax) Tk.19,179,771.00 on 30th April, 2010. This success has been achieved due to strong support from our customers and efficient direction of the Board of Directors as well as patronization and active participation of all our valued shareholders.

To maintain further growth and increase the capital base of our Company, we hope you would come forward with your full support and assistance to make the offer a success.

A self-explanatory Rights Share Offer Document prepared in the light of the Securities and Exchange Commission (Rights Issue) Rules, 2006 of the Securities and Exchange Commission is enclosed herewith for your kind information and evaluation.

On behalf of the Board of Directors

Sd/-

Mohammad Haroon PatwaryManaging Director

THE RIGHTS OFFER

The Company

Eastern Insurance Company Limited is a first generation general insurance company in Bangladesh. The company is a public listed Company which incorporated as a Public Limited Company under the Companies Act 1994 on July 10, 1985. In 1993 company raised capital through IPO and now company conducts its business operations according to Securities and Exchange Rules 1996, the Insurance Act, 2010 . Under the supervision of regulatory bodies the company established itself as one of the leading general insurance company of the country. In 30th April 2010 Company earned Net Profit (before tax) of Tk. 19,179,771 and EPS: 11. Over the last twenty five years of operation, it established a brand image as a prominent general insurance company of the country through product diversification and superior service quality. The Rights Issue

The Board of Directors of the Company in its 169th Board meeting held on April 28,2010 recommended for declaration of stock dividend 20% for the year ended 31st December 2009 totaling Tk.31,104,000on the paid up capital Tk. 155,520,000 simultaneously decided to raise paid up capital through issuance of Rights Share of 1,866,240 Ordinary Shares of Tk.100.00 each at an issue price at Tk.300.00 each including a premium of Tk.200.00 per share at a ratio of 1:1 (1(one) rights share for 1 (one) existing share held on record date) on the basis of paid up capital of Tk.186,624,000 after crediting bonus share as approved in the 24th AGM held on 7th July 2010.Issue Price

In the Extra Ordinary General Meeting (EGM) held on 7th July 2010 honorable shareholders approved Rights Offer of 1,866,240 Ordinary Shares of Tk.100.00 each at an issue price of Tk.300.00 each including a premium of Tk.200.00 per share totaling Tk.559,872,000 offered on the basis of 1 (one) rights share for 1 (one) existing share held.RISK FACTORS AND MANAGEMENTS PLAN FOR REDUCTION OF SUCH RISKS: Any investment always associates with some internal/ external risk factors and among the factors some can be averted, other are beyond control. The management of Eastern Insurance Company Limited considers some risk factors involving their business which are described as under:

Interest rate risks:

Volatility of money market, which ultimate influences the interest rate structure of fund. The Income from fixed & other deposits may fall with the reduction of Interest rate of commercial bank as per current trend.

Management perception:The Management of the Company is always aware of interest rate. If the interest rate increases, the cost of credit fund will increase as well as income from fixed & other deposits also be increased. On the other hand, if the interest rate decreases the Company will go for the alternative investment such as investment in shares and debentures instead of investing in FDR & NIB.Exchange rate risks:Devaluation of local currency against major international currencies i.e. USD, GBP and Euro may affect companys marine insurance business.

Management perception:Devaluation of local currency not only effected EICL but also total industry will be affected. Besides generally devaluation of local currency against international currencies increases premium income that will ultimately extend Net profit of the Company. Industry risks:

I. Liberalization of permission to set up more insurance companies by the Government

Liberalization of permission to set up more insurance companies by government may result in severe competition amongst insurers resulting in reduction of premium income and profitability of the company.

Management perception:As per Insurance Act 2010 every general insurance companys paid up capital must be 40 crore in which 50% will be sponsors capital and 50% open for general people. So it will not so easy to come new company and established in this industry. Besides insurance business largely depends on faith and reputation which already achieved EICL by more than twenty four years successful operations. Now EICL is a reputed brand in insurance sector. Moreover EICL continuously try to develop product diversification according to changeable market and demand which increase revenue as well as customer satisfaction. II. Natural calamities

The coverage of natural calamities like cyclone, flood by insurance may severely weaken the financial strength of the company by accruing heavy claims on its own retained account.

Management perception:The estimated losses arising from natural calamities are covered by higher rates of premium and reinsurance coverage for such losses. Management has taken into consideration statistical assessment of occurrence of natural calamities in setting its rates of premium and reinsurance risks. Moreover, most of our trained portfolios (Fire including flood, cyclone risks) are protected under Catastrophic Excess of Loss Treaty with Shadharan Bima Corporation. Besides company always maintain a reserve for exceptional losses as per paragraph 6(2) of the 4th schedule of Income Tax Ordinance 1984 for meeting unexpected future claims. Market & Technology related-risks:

To be competitive in the market, insurance companies need to develop new products and offer excellent clientele services and also to expand the market by bringing more and more items under the purview of insurance otherwise the competitors may capture the existing companys business share.

Management perception:Insurance business is increasing globally. New items are coming under the cover of various insurance as days pass by; the market is expanding as people are realizing the importance of insurance. EICL provides excellent services and plan to introduce new products giving importance on Research and Development (R&D) considering market & technology related risks.Potential or existing government regulations:

Government policy change in respect of rates of premium, underwriting commission, agents commission, reinsurance commission, interest on deposits etc. may affect income and profitability of the Company.Management perception:The government is not expected to change policies relating to insurance requirement for the interest of economy, as when insurance business is affected industrialization, trade and commerce of the country will be also affected. Moreover, considering the Insurance Act 2010 and regulations the company is raising its capital through issuing rights share to existing shareholders which also strengthen companys financial structure as well as earned more revenue by smooth operation of business.

Potential changes in global or national policies: Any structural change in the international insurance business adversely affecting reinsurance operations may have negative impact on the profitability of the Company. Management perception:

The history of insurance/re-insurance business for over two hundred years proves that any major structural change affecting our reinsurance business is unimaginable. Any such event would create a global destabilization that the major economies must not cause to happen.

History of non-operation, if any:Is there any History of non-operation of Eastern Insurance Company Limited?

Management perception:Eastern Insurance Company Limited is one of the private general insurance companies in Bangladesh which established in 1985 and already passed several successful years of business operation and the company does not have any history of non-operation of business.

Operational risks:Any Political and social unrest/unstable situation may affect smooth operation of the business resulting in drastic fall to the value of its investment.

Management perception:

Political unrest may reduce the premium income of the Company for a short span of time. The shortfall can be overcome by increased income in subsequent period.

Business Operation:The Company operates its business through a net work 24 Branches all over the country. These branches can directly underwrite all classes of business under guidance and supervision of Head Office. In addition there is a special booth at Head Office to meet any emergency requirement of any client or to take care of any special or exceptional risk coverage as may require by any client.

The business operation of the branches are monitored and controlled by Head Office through Underwriting Department. While claims are directly handled by Claims Department of Head Office as a centralized process and practiced all over the world.

The Company is authorized to transact all classes of Insurance business with un-restricted limits having a very wide range of re-insurance coverage from state owned Sadharan Bima Corporation (SBC). Currently the Company provides the following risk coverage at a very competitive premium rates within the tariff provisions in force.

Fire and allied risk of Flood, Cyclone, Earthquake, RSD, Malicious damage, Electrical short circuit and Burglary etc.

Marine Hull, Marine Cargo, Rail, Truck, Lorry Risk etc.

All classes of Motor Insurance including Act liability.

Engineering Risks, such as Contractor All risk, Erection All Risks, CPM, Machinery Break Down and Deterioration of stocks etc.

Aviation (Hull), Passenger, Crew and 3rd Party liability.

Misc. Insurance, Public liability, 3rd Party liability, Personal Accident, Workman Compensation, Cash in Transit, Cash in safe, Cash in counter, Fidelity guarantee and plate glass Insurance.

Besides the Company has the expertise to develop any other non-traditional coverage as and when required by any client.

Re-Insurance Arrangement :

The Company has an extensive Re-Insurance Treaty arrangement with SBC. Re-Insurer provides technical assistance in assessing risks, developing rates and fixing up terms and conditions in case of non-tariff business. In case of any big loss Re-insurers support the Company by cash payment for prompt settlement of claim.

Business Diversification :

The Company have also diversified its business with a view to ensure participation in other field of national economy besides insurance business. It has become a member of Chittagong Stock Exchange in the year 1996 and also invested a substantial amount of its fund in land and share market. It is also a sponsor shareholder of National Housing Co. Ltd. It has a plan for a both long and short term investment in other sectors of business and industry.

DATE OF OPENING AND CLOSING OF SUBSCRIPTION LISTS

Subscription opens for the rights share offer on Opens on : January 25,2011 and subscription closes for the rights share offer on Closes on : February 22,2011.Utilization of IPO fundEastern Insurance Company Limited went for public issue in the year 1993 by issuing 3,00,000 Ordinary Shares of Tk.100.00 each totaling Tk.30,000,000.00 with the objective to strengthen the capital base and business expansion. The Company has fully utilized the entire fund thus raised by investing in FDR and Capital market which has already been reflected in the audited accounts of the subsequent years of public issue.

AGM of the Company held in last five years as per following table: Year Date of AGM heldDividend declared

20057August,2006 20% Stock

20065 July,200720% Stock

200724 June,200820% Stock

200829 June,200920% Stock

20097 July,201020% Stock

PURPOSE OF THE RIGHTS ISSUE Eastern Insurance Company Limited is one of the first generation General Insurance Company in the private sector of Bangladesh, which provides diversified general insurance services. The company is presently operating with a paid up capital of Tk.155.52 million against authorized capital of Tk.1000 million. With the declaration of stock dividend for the year 2009 in the AGM dated 07.07.2010 this paid up capital will be increased to Tk.186.62 million.

As per insurance Act, 2010 (schedule-1) paid up capital of General Insurance Company should be raised up to Tk.400.00 million. Further more to enhance financial strength and to expand our activities we would like to increase our paid up capital to Tk.373.24 million as already approved in the EGM dated 07.07.2010.

Accordingly, Eastern Insurance Company Limited is going for rights issue of 1,866,240 ordinary shares of Tk.100 each at an issue price of Tk.300.00 each including a premium of Tk.200.00 per share totaling Tk.559,872,000.00. The additional paid up capital and premium will be deposited with scheduled bank and investment to be made in capital market as guided by the Insurance Act, 2010 to enhance net worth of the company for the benefit of shareholders.

HIGHLIGHTS OF THE COMPANY

01. The Company was incorporated on 7h June, 1986 as a Public Limited Company.

02. The Company commenced its business on July 1986 and has already completed 24 (twenty four ) years of successful operation.

03. The Company went for public issue in the year 1993 by issuing 3,00,000 Ordinary Shares of Tk.100.00 each totaling Tk.30,000,000.04. The Company was listed with the Dhaka Stock Exchange Limited on March 18, 1994 and Chittagong Stock Exchange Limited on the year November 12, 1996 .

05. The authorized capital of the Company is Tk.1000 million and paid up capital is Tk.186,624,000 after crediting 20% bonus share.

06. The Company has a network of 24 branches all over the country.

07. Total equity structure of the Company as on 30 April 2010 is shown below:-

(Amounts in BDT) Shareholders Equity 30.04.2010 31.12.2009

Share Capital 155,520,000155,520,000

Balance of fund52,050,79652,619,230

Revaluation reserve 294,372,587294,372,587

Reserve or contingency Account142,827,341126,094,549

Total Shareholders Equity644,770,724628,606,366

Additional Information

(Source DSE monthly review) ParticularsPrice

a)Market Price per Share as on 30 June, 2010Tk.834.80

b)Market Price per Share as on 31 May, 2010Tk.937.80

c)Market Price per Share as on 29 April, 2010Tk.1,003.75

d)Market Price per Share as on 31 March ,2010Tk.858.25

e)Market Price per Share as on 28 February,2010Tk.829.25

f)Market Price per Share as on 31 January, 2010Tk.889.25

Board of Directors

SL NoName of DirectorsAge

(Years)Educational QualificationPositionOccupationAddress

1.Mujibur Rahman51B.AChairmanBusinessHouse # 10, Road # 13, Block # k, Baridhara Model Town, Dhaka

2.Mohammad Ahsan54B.Sc. EngineerVice ChairmanBusiness12/13, Motijheel C/A, Dhaka.

3.Major (Retd) Abdul Mannan68B.Sc. DirectorBusinessRoad # 87, House # 13, Gulshan-2, Dhaka.

4.Matiur Rahman

53B.comDirector Business936/3, Sk. Mujib Road, Dewanhat, Chittagong.

5.Mohammed Mohsin53M.S.M.E.DirectorBusinessC/o. M/s. Rahim Steel Mills Co. (Pvt.) Ltd. 29/10, K.M. Das Lane, Tikatoli, Dhaka.

6.Syed Deedarul Alam65B.Sc.DirectorBusiness269, Dewanhat, Chittagong.

7.Umme Kulsum Mannan46M.A.Director BusinessRoad # 87, House # 13, Gulshan-2, Dhaka.

8.Durand Mehdadur Rahman40International Business AdministrationDirectorBusinessNew DOHS, 157, Mohakhali, Dhaka.

9.Khaled Salahuddin Ahmed50MBA (USA)DirectorBusinessAlhaj Mansion, 82, Motijheel, Dhaka.

10.Haji Abdur Rahim82B.A.DirectorBusinessC/o. M/s. Rahim Steel Mills Co. (Pvt.) Ltd. 29/10, K.M. Das Lane, Tikatoli, Dhaka.

11.Rawnak Karim

44B.ScDirectorBusiness79/1, Water Works Road, Posta, Dhaka.

12. Rokeya Ferdous38M.A.DirectorBusinessC/o. Sunman Sweaters Ltd. CDA Building # 2, 2nd floor, Ctittagong

13.Abdul Kader Mohammad Mohiuddin40B.Com.DirectorBusinessAlpha Textiles Ltd. CDA Building # 2, 2nd floor, Ctittagong

14.Zakia Rahman 48B.comDirectorBusiness41, Goaltoli lane, EnayetBazar,Chittagong.

15.Rais Uddin39B.A.DirectorBusinessRoad # 87, House # 13, Gulshan-2, Dhaka.

16.Kazi Imdad Hossain65B.ScDirector BusinessC/o. Uttara Apparels Ltd. Uttara Center, 102, Shahid Tajuddin Ahmed Sarani (15-17th Floor) Tejgaon,

17.Syed Abdullah Humayun Ahmed63B.Sc. Auto Mobile Engineer (L)DirectorBusinessUttara Properties Ltd.

20,21 &22 Majid Sarani, Sonadanga, KDA, Khulna.

18.Miah Mohammad Murshid71B.A. Hons. M.A.Independent DirectorBusinessHouse # 56, Road # 8, Sector #3, Uttara Model Town, Dhaka.

19.Mohammad Murshed Hossain67M.A.Independent DirectorBusinessHouse # 105, Road # 7, Sector # 4, Uttara Model Town, Dhaka.

MANAGEMENT COMMITTEESL NoName of OfficialsPositionEducational QualificationName of DepartmentAddress

1.Mohammad Haroon PatwaryManaging DirectorM.ComHouse #8/3, Block#C, Lalmatia Mohammadpur, Dhaka

2.Md. Habib Jamal, FCAExecutiveVice President & Company Secretary

Chartered AccountantBoard & ShareFalcon, 38, New Elephant Road, Dhaka-1205

3.A.K.M. Mustafizur RahmanDy. Executive Vice PresidentB.ComUnderwriting & ClaimsSetaras dream Flat36/d, (5th floor), 1/11, Pallabi, Dhaka

4.Khairul AlamVice PresidentB.ComAdministration & Establishment64/A,R.K. Mission Road, Dhaka

5.Arifur RahmanDy. Vice presidentM.ComFinance & AccountsFlat#8/B,R.P Tower, zoo Road, Mirpur-2 Dhaka.

6.Hosne AraDy. Vice PresidentM.AUnderwriting DepartmentHouse#11,Road #4,Old DOHS,Cantonment,Dhaka

7.P. K. ChakrabortyDy. Vice PresidentM.ScRe-Insurance DepartmentBlock#C, Road#1,House# 9,Banasree, Rampura, Dhaka

8.Swarup Kumar SahaDy. Vice PresidentM.ComInternal Audit62/10, Purana paltan lane, Dhaka

Corporate INFORMATIONREGISTERED OFFICE:44, Dilkusha commercial Area, Dhaka-1000

Date of Incorporation:June7,1986

Commencement Certificate of Business:July 7,1986

Listing with Dhaka Stock Exchange Limited:March 18, 1994

Listing with Chittagong Stock Exchange Limited:November12, 1996

Authorized Capital:1,000 Million

Paid-up-Capital**:186.62Million

Net Profit before tax on April 30, 2010 :19.17 Million

Number of Employees:556

Number of Branches:24

** After crediting 20% bonus for the year ended 31st December 2009. AuditorHoda Vasi Chowdhury & Co

Chartered Accountants

BtMC Bhaban (7-9 Karwan Bazar C/A,Dhaka-1215

BankerSIslami Bank Bangladesh LimitedPrime Bank Limited

Premier Bank Limited

One Bank Limited

REGISTERED OFFIICE44, Dilkusha commercial Area, Dhaka-1000

BankerS to the Issue for Rights Share OF Eastern INSURANCE COMPANY LIMITEDInvestment Corporation of Bangladesh (ICB)

1. Head Office, Dhaka

2. Chittagong Br. Chittagong

3. Rajshahi Br., Rajshahi

4. Khulna Br., Khulna

5. Barisal Br., Barisal.

6. Sylhet Br., Sylhet

7. Bogra Br., Bogra

8. Local Office, DhakaStandard Bank Limited

1. Principal Br., Dhaka

2. Foreign Exchange Br., Dhaka

1. 3. Topkhana Road Br. Dhaka

2. 4. Imamgonj Br., Dhaka

3. 5. Gulshan Br., Dhaka

4. 6. Dhanmondi Br., Dhaka

5. 7. Mirpur Br., Dhaka

6. 8. Uttara Br., Dhaka

7. 9. Panthapath Br., Dhaka

8. 10. Narayangonj Br. Narayangonj9. 11. Jubilee Road Br., Chittagong

10. 12. Agrabad Br., Chittagong

11. 13. Khatungonj Br., Chittagong

12. 14. Sylhet Br., Sylhet

15. Khulna Br, Khulna

JUSTIFICATION OF THE ISSUE PRICE OF RIGHTS SHARES:

The rights issue price of Tk. 300.00 each (including a premium of Tk.200 per share) is justified as per the guidelines of the Securities and Exchange Commission as detailed below:

1. Equity based Value per share (NAV):As on April 30, 2010, the Net Assets Value per share stands at Tk. 415 , The calculation of net assets value per share is given below:

ParticularsAmountNet Amount

Investment 240,945,686

Interest, Dividends and Rent Outstanding 6,090,155

Advances, Deposits and Prepayments 37,970,548

Cash in hand and cash at Bank245,090,276

Amount due from other persons or bodies carrying on insurance business35,046,708

Fixed Assets (at cost less depreciation )23,1174,502

Deferred tax assets 2,404

Stock of printing, stationery and stamps936,188

Total Tangible Assets (A)797,256,467

Deposit Premium 32,138,556

Liabilities and Provisions 18,527,637

Amount due to other persons or bodies carrying on insurance business55,874,314

Sundry Creditors17,913,182

Provision for Gratuity 6,936,036

Tax provision21,096,018

Total Liabilities (B)152,485,743

Net Tangible Assets (A-B) 664,770,724

Number of shares (C)1,555,200

Tangible Asset Per Share (A-B)/C 414.59

NB: The Company declare 20% stock dividend for the year ended 31st December 2009 and approved by the shareholders in the 24th AGM held on the July 07, 2010 and credited to the respective BO account. After issuance of 20% bonus shares total number of shares stands 1,866,240 and total shareholders equity Tk. 675,874,724and the net asset value per shares stands at Tk.345.The Net Assets Value (NAV) is also equivalent to the shareholders' equity as follows:ParticularsAmount

Share Capital 155,520,000

Balance of fund52,050,796

Revaluation reserve 294,372,587

Reserve or contingency Account142,827,341

Total Shareholders Equity644,770,724

No. of Shares of Taka 100.00 each1,555,200

Book Value per share of Taka 100.00 each414.59

2. Earning Based Value per Share:

PeriodNet Profit After Tax Lac in BDTEarning Per Sharein BDT

2005 242.3932.32

2006210.2823.36

2007291.7827.02

2008323.3925.00

2009 452.4529.08

Average304.0627.36

The weighted average net profit after tax for the last 5 (five) years stands at Tk.304.06 lac and the weighted average EPS stands at Tk. 27.36. The Price Earning Multiple (PE) at issue price of Tk.300 each (including a premium of Tk.200.00 per share) stands at PE 10.96 as opposed to the present PE 37.43 at market price of Tk. 900 per share on July 15, 2010 as per DSE record.

If we consider the share price of the Company on the basis of price earnings multiple of 37.43the earning based value of shares of the Company stands at Tk. 410.23 a price much higher than the price offered for rights shares.

3. Average Market Price:Market price per share at the last trading day of preceding six months is given in the following table that remained far above the offer price of Tk.300.00 each (including a premium of Tk. 200.00 per share). Price data is collected from Monthly Review, Dhaka Stock Exchange Limited: (Source DSE monthly review)STOCK PRICE IN TAKA

Market Price per Share as on 30 June, 2010Tk.834.80

Market Price per Share as on 31 May, 2010Tk.937.80

Market Price per Share as on 29 April, 2010Tk.1,003.75

Market Price per Share as on 31 March ,2010Tk.858.25

Market Price per Share as on 28 February,2010Tk.829.25

Market Price per Share as on 31 January, 2010Tk.889.25

Average six months priceTk.892.18

From the above analysis, it appears that the offered price of Tk.300.00 each (including a premium of Tk.200.00 per share) by the Company is quite justified and reasonable and also familiar and attractive to the Shareholders.

4. Projected Equity Based Value/ Book Value per Share:

PeriodEquity Based Value Per Share

(Amount in Tk.)

December 31, 2010337.25

December 31, 2011352.00

December 31, 2012361.38

Average350.21

5. Projected Earnings Based Value Per Share:PeriodProjected Earning Per Share

(Amount in Tk.)

December 31, 201017

December 31, 201127

December 31, 201226

Average EPS23.33

The weighted average EPS for next 3 years stands at Tk. 16.81. If we consider the share price of the Company on the basis of price earning multiple of 12.87 the earning based value of per share of the Company stands at Tk. 255.69.

From the foregoing as summed up below the determination of the offer price Tk.300.00 each is quite justified.

Justification of offering price under different methodsBDT

1. Equity based Value per share (on historical cost)414.59

2. Earning Based Value per Share410.23

3. Average Market Price892.18

4. Projected Equity Based Value/ Book Value Per Share350.21

5. Projected Earnings Based Value Per Share255.69

Average464.58

From the above analysis, it appear that the ordinary share of Tk.100.00 is being offered at Tk.300.00 each (including a premium of Tk.200.00 per share) by the Company is quite justified and reasonable and also familiar and attractive to the Shareholders.IMPLEMENTATION SCHEDULE [Rule-8(k)]

The additional paid up capital will be deposited with scheduled bank as guided by the Insurance Act 2010 and the share premium will be invested in different business to enhance net worth of the company for the benefit of shareholders .The entire process will be completed immediately after receiving allotment of rights share subscription. QUANTITY OF SHARES HELD BY EACH DIRECTOR ON THE DATE OF THE RIGHTS SHARE OFFER DOCUMENT [Rule-8(l)]SL No.Name of DirectorsPositionNumber of

Shares HeldPercentage

1.Mujibur RahmanChairman24,4681.57%

2.Mohammad AhsanVice Chairman103,6806.67%

3.Major (Retd) Abdul MannanDirector103,6806.67%

4.Matiur RahmanDirector75,1684.83%

5.Mohammed MohsinDirector32,4002.08%

6.Syed Deedarul AlamDirector38,8802.50%

7.Umme Kulsum MannanDirector51,8403.33%

8.Durand Mehdadur RahmanDirector104,5096.72%

9.Khaled Salahuddin AhmedDirector25,9201.67%

10.Haji Abdur RahimDirector32,4002.08%

11.Rawnak Karim Director69,5624.47%

12. Rokeya FerdousDirector54,4323.50%

13.Abdul Kader Mohammad MohiuddinDirector45,4632.92%

14.Zakia RahmanDirector2,3830.15%

15.Rais UddinDirector28,5121.83%

16.Kazi Imdad HossainDirector42,7152.75%

17.Syed Abdullah Humayun AhmedDirector5,9610.38%

18.Miah Mohammad MurshidIndependent DirectorNilNil

19.Mohammad Murshed HossainIndependent DirectorNilNil

LENGTH OF TIME DURING WHICH THE ISSUER HAS CARRIED ON BUSINESS [Rule-8(j)]

Eastern Insurance Company Limited is a public company categorized in private sector incorporated under the Companies Act, 1994 as a public company limited by shares on 7 June 1986 and engage in general insurance business as per Insurance Act 1938. The Company already completed twenty four (24) successful years from the date of commercial operation. Now Eastern Insurance Company Limited is one of the established general insurance company of Bangladesh.

SUMMARY OF SHARE HOLDING POSITION SL No.Name of DirectorsShares holdingPercentage

1.Sponsors &Directors 918,90459.08%

2.Institutions 402,64125.89%

3.General Public233,85515.03%

Total1,555,400100%

BENEFICIAL OWNERS HOLDING SHARES 5% OR ABOVE [Rule-8(l)]There is no shareholder holding 5% or above shares.

Sl. NoName of the DirectorsPositionNumbers of shares % of Shareholdings

1.Mohammad AhsanVice Chairman103,6806.67%

2.Major (Retd) Abdul MannanDirector103,6806.67%

3.Durand Mehdadur RahmanDirector104,5096.72%

PUBLIC LISTED COMPANY UNDER COMMON MANAGEMENTAs per [Rule-8(n)] of the Securities and Exchange Commission (Rights Issue) Rules-2006, there are no Director in public listed company under the common management of the company. CLASSIFIED INFORMATION & UNDERWRITERS [Rule-8(o)]Manager to the Issue Uttara Finance and Investments Limited

JBC Tower (6th Floor), 10 Dilkusha C.A., Dhaka-1000, Bangladesh.

Advisers to the Issue

AAA Consultants & Financial Advisers Limited

Amin Court, 4th Floor (Suit # 404),

31,Bir Uttam Shahid Ashfaqueus Samad Road

(Previous 62-63, Motijheel C/A), Dhaka-1000

AuditorHoda Vasi Chowdhury & Co., Chartered Accountants

BTMC Bhaban (8th Level) 7-9, Karwan Bazar C/A, Dhaka 1215.

Bankers to the IssueInvestment Corporation of Bangladesh (ICB)

8,DIT Aveue (12-15 Floor) Dhaka -1000Standard Bank Limited

Metropolitan Chamber Building (3rd Floor) 122-124 Motijheel C/A ,Dhaka-1000

UnderwritersStandard Bank Limited

Metropolitan Chamber Building (3rd floor) 122-124.Motijheel C/A. Dhaka-1000

Swadesh Investment Management Co. Ltd

House# 35, Road# 1/A, Banani,Dhaka-1213

Fidelity Assets & Securities Co. Ltd

Suvastu Imam Square (4th floor), 65, Gulshan Avenue Dhaka-1212

Eastern Insurance Company Limited is going to offer rights share of 1,866,240 Ordinary Shares of Tk.100.00 each issuing at Tk.300.00 each (including premium of Tk.200.00 each) share, totaling Tk.559,872,000. As per Securities and Exchange Commissions guideline the issuer of a listed security making rights issue shall appoint one or more underwriters licensed under wmwKDwiwUR I GP Kwgkb (gvPU evsKvi I cvUdvwjI gvbRvi) wewagvjv, 1996 to fully underwrite the rights issue on a firm commitment basis. Underwriting commission will be @0.10% on the underwritten amount and there will no additional commission for take-up unsubscribe portion of shares if any.Underwriters ObligationIf and to the extent that the shares offered to the existing shareholders by the Rights Share Offer Document 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 underwriters (for full unsubscribe amount) in writing with a copy of said writing to the Securities and Exchange Commission, to subscribe for shares not subscribed by the closing date and to pay for in cash in full, inclusive of any premium if applicable, for such unsubscribed shares within 15 (fifteen) days after being called upon to do so. 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 commitment under this Agreement, until such time as the Cheque/Bank Draft has been encashed and the Companys account has been credited. 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 underwriters, to the Commission. SL. No.Name of UnderwriterNumber of SharesUnderwriting Amount in BDT

1.Standard Bank Limited 700,000210,000,000

2.Fidelity Assets & Securities Co. Ltd1,000,000300,000,000

3.Swadesh Investment Management Co. Ltd166,24049,872,000

Total1,866,240559,872,000

DIRECTORS' TAKE-UP IN THE RIGHTS OFFER [Rule-8(q)Directors are expected to exercise in full their portion of Rights Offer.Sl. No.Name of DirectorsNumber of

Shares HeldRenounce from entitlement

1.Mujibur Rahman24,468Nil

2.Mohammad Ahsan103,680Nil

3.Major (Retd) Abdul Mannan103,680Nil

4.Matiur Rahman75,168Nil

5.Mohammed Mohsin32,400Nil

6.Syed Deedarul Alam38,880Nil

7.Umme Kulsum Mannan51,840Nil

8.Durand Mehdadur Rahman104,509Nil

9.Khaled Salahuddin Ahmed25,920Nil

10.Haji Abdur Rahim32,400Nil

11.Rawnak Karim 69,562Nil

12. Rokeya Ferdous54,432Nil

13.Abdul Kader Mohammad Mohiuddin45,463Nil

14.Zakia Rahman2,383Nil

15Rais Uddin28,512Nil

16Kazi Imdad Hossain42,715Nil

17Syed Abdullah Humayun Ahmed5,961Nil

18Miah Mohammad MurshidNilNil

19Mohammad Murshed HossainNilNil

TERMS AND CONDITIONS OF THE RIGHTS ISSUE

Basis of the OfferThe Company records its share register of members on December 26, 2010 for determining the shareholders who are eligible to receive this offer of shares on rights basis. The ordinary shares are now being offered on a rights basis to the shareholders holding shares on the book closure in the ratio of 1:1 i.e. 1 (one) rights shares for 1 (one) existing shares held. EntitlementAs a shareholder of the Company on the record date on December 26, 2010,the shareholders are entitled to this Rights Offer. Only the holder(s) of a minimum of one fully paid ordinary share is entitled to receive the Rights Offer. Acceptance of the Offer

A shareholder may accept and apply for the shares hereby offered, wholly or in part by filling in Application - Form A and submitting the same along with the application money to the Bankers to the Issue on or before the Closing Date of the Offer.

Renunciation

A shareholder may renounce all or part of the shares he/she is entitled to in favour of any other person(s) other than an infant or person of unsound mind. He/she can renounce his/her rights/entitlement of shares by signing Renunciation Form-B. Renouncee(s) shall fill in Form-C appropriately.

GeneralAll applications should be made on the printed form provided by the Company in this Rights Share Offer Documents only and should be completed in all respects. Applications, which are not completed in all respects or are made otherwise than as herein provided or are not accompanied by the proper application amount of deposit, are liable to be rejected and the application money received in respect thereof shall be refunded.

All communications in connection with the application for the Rights Share should be addressed to the Company quoting the registered folio number/BO ID number in the form.

Condition of SubscriptionOne Rights shares of Tk.300.00 each including a premium of Tk.200.00 per share is offered against 1 (one) existing share held by existing Shareholder(s) whose name(s) appeared in the Company's Share Register at the record date as on December 26, 2010..Payment of Share PricePayments for the full value of Shares applied for shall be made with designated branches of Bankers to the issue by Cash/Pay Order/Demand Draft payable to "Eastern Insurance Company Limited" and crossed. The Pay Order/Demand Draft for payment of share price must be drawn on a bank in the same town to which the application form has been submitted. It is to be noted that all transaction above TK.1.00(One) lac must be affected through demand draft/ crossed cheque/pay orders.SUBSCRIPTION

Opens on : January 25, 2011

Closes on : February 22, 2011

(Within banking hours, both days inclusive)

Any change or extension regarding subscription period will be notified through national dailies.

Lock-In On Rights ShareThe rights share of directors and other shareholders holding 5% or more shares shall be subject to lock-in for a period of three years from the date of closure of the rights share subscription. In the event of renunciation of rights share by aforesaid persons, the renounced shares shall also be subject to lock-in for the same period.OthersThe application not properly filled in shall be treated as cancelled and deposited money will be refunded. For any reason, no profit/compensation will be paid on the refunded amount.

The offer will be deemed to have been declined if completed Application Form-A with necessary payments have not been received by February 22, 2011or by such later date as may be notified through national dailies to that effect.MATERIAL CONTRACTSBankers to the IssueInvestment Corporation of Bangladesh (ICB), Standard Bank Limited is the Bankers to the Issue who will collect the subscription money of the Rights Offer. Commission @ 0.10% of the amount collected will be paid to the Bankers to the issue for their services to be rendered by them. The Rights Issue subscription money collected from the shareholders by the Bankers to the Issue will be remitted to the Southeast Bank Limited, Corporate Branch Dhaka. STD Account: 0031-13100000741. UnderwritersThere are three (03) underwriters have underwritten the full amount of Rights Offer of EICL as shown in the classified information part of ROD. Each underwriter will be paid underwriting commission @ 0.10 % of the underwritten amount. Simultaneously, with the calling upon an underwriter to subscribe or procure subscriber and pay for any number of shares, the company will pay no additional commission to that underwriter on the nominal value of shares required to be subscribed by them.

Manager to the IssueUttara Finance and Investment Limited is appointed as Manager to the Issue of the Right Issue of the Company. Accordingly, a tripartite agreement was made among the Issue Manager, the Advisor and the Company. The Issue management fee at 0.60% on total issue .The Company will pay 60% of total issue management fee for issue management service to the UFIL Advisers to the Issue

AAA Consultants & Financial Advisers Limited is appointed as Advisor to the Issue of the Right Issue of the Company. Accordingly, an tripartite agreement was made among the Issue Manager, the Adviser and the Company. The Issue management fee at 0.60% on total issue. The Company will pay 40% of total issue management fee for Advisory service to the AAA. Agreement to the Vendors:

The company is a general insurance company. There is no specific agreement with the vendors or other seller.

ACQUISITION OF PROPERTY, PLANT AND EQUIPMENTThe company has no plant equipment. The Company acquired the 18 decimal Commercial land located at 65/1 DIT extension Road Dhaka. After revaluation the value of land is Tk. 226,875,000.00 FORM A

[Rule 5 and rule 8(t)]Declaration (due diligence certificate) about responsibility of the Issue Manager In respect of the rights share offer document of Eastern Insurance Company LimitedThis rights share offer document has been reviewed by us and we confirm after due examination that the rights share offer document constitutes full and fair disclosures about the rights issue and the issuer and complies with the requirements of the Securities and Exchange Commission (Rights Issue) Rules, 2006; and that the issue price is justified under the provisions of the Securities and Exchange Commission (Rights Issue) Rules, 2006.

For Uttara Finance and Investments Limited

Sd/-

Place: Dhaka (S. M. Shamsul Arefin)

MANAGING DIRECTOR FORM-B

[Rule 6 and rule 8(t)]

Declaration (due diligence certificate) about responsibility of the Underwriter(s) in respect of the rights share offer document of Eastern Insurance Company LimitedThis rights share offer document has been reviewed by us and we confirm after due examination that the issue price is justified under the provisions of the Securities and Exchange Commission (Rights Issue) Rules, 2006, and also that we shall subscribe for the under-subscribed rights shares within fifteen days of calling thereof by the issuer. The issuer shall call upon us for such subscription within ten days of closure of the subscription lists for the rights issue.

Place: Dhaka For

Fidelity Assets & Securities Co. Limited.Swadesh Investment Management Limited.Standard Bank Limited

Sd/- Managing Director(s)/CEO(s)FORM-D[Rule 8(t)]

Due diligence certificate by the Directors about their personal

Responsibility in respect of the rights share offer document

This rights share offer document has been prepared, seen, reviewed and approved by us and we collectively and individually accept full responsibility for the accuracy of the information given in the rights share offer document, relevant documents and financial statements submitted to the Commission and others concerned under the Securities and Exchange Commission (Rights Issue) Rules, 2006.

We confirm, after making all reasonable enquiries, that all conditions concerning this rights issue and rights share offer document have been met. We further confirm that we have not concealed any information or statement which might have any bearing on the information already made.

In case of any default or failure on our part, civil, criminal or administrative action may be taken against us.

Sd/-

Mujibur Rahaman

ChairmanSd/-

Azmal Hossain

Vice Chairman Sd/-

Major (retd) A. Mannan

Director

Sd/-

Matiur Rahman DirectorSd/-

Mohammed MohsinDirectorSd/-

Syed Deedarul AlamDirector

Sd/-

Umme Kulsum Mannan DirectorSd/-

Durand Mehdadur Rahman DirectorSd/-

Khaled Salahuddin Ahmed Director

Sd/- Haji Abdur RahimDirector Sd/-

Rawnak Karim DirectorSd/-

Rokeya Ferdous Director

Sd/-

Abdul Kader Mohammad MohiuddinDirectorSd/-

Zakia Rahman DirectorSd/-

Rais Uddin Director

Sd/-

Kazi Imdad Hossain DirectorSd/-

Syed Abdullah Humayun Ahmed DirectorSd/-

Miah Mohammad Murshid Independent Director

Sd/-

Mohammad Murshed Hossain Independent Director

Sd/-

Mohammad Haroon PatwaryManaging Director

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