CONNECTED TRANSACTIONS

The Company’s continuing connected transactions of the Year subject to the reporting, annual review and announcement requirements under Chapter 14A of the Listing Rules include: (i) the property leasing agreement entered into between the Company and PICC Investment; (ii) the asset management agreement entered into between the Company and PICC AMC; (iii) the framework agreement on reinsurance business cooperation entered into between the Company and PICC HK; and (iv) the contracts for purchasing life insurance products for the employees of the Company entered into successively between the headquarters and several branches of the Company and PICC Life. PICC Group is the controlling shareholder of the Company and holds respectively 100%, 81%, 75% and approximately 71% of the issued share capital of PICC Investment, PICC AMC, PICC HK and PICC Life. Therefore, according to the Listing Rules, PICC Investment, PICC AMC, PICC HK and PICC Life are connected persons of the Company.

(i) The Company and PICC Investment have entered into property leasing agreements since 19 September 2008. The Company and PICC Investment renewed the property leasing agreement on 15 December 2011. The term of this renewed agreement is three years commencing from 7 July 2011 and expiring on 6 July 2014. Pursuant to this renewed agreement, the Company and PICC Investment lease certain properties from each other. According to its operational needs, the Company needs to use certain properties owned by PICC Investment, primarily as offices for its business and operations. Under the renewed agreement, the annual cap for the rent expected to be paid by the Company to PICC Investment during the Year was RMB105 million. In the Year, the annual rent paid by the Company to PICC Investment amounted to RMB105 million and the annual rent paid by PICC Investment to the Company amounted to RMB2 million.

(ii) The Company and PICC AMC have entered into asset management agreements since 10 October 2003. With the experience and expertise in asset management, PICC AMC is principally engaged in the provision of asset management and asset management advisory services in the PRC, and the Company considered it appropriate for the Company to enter into the asset management agreements with PICC AMC. On 15 January 2010, the Company and PICC AMC renewed the asset management agreement for another term of three years commencing from 1 January 2010 and expiring on 31 December 2012. Under this renewed agreement, the Company would entrust assets to be managed and invested by PICC AMC from time to time and would pay management fee to PICC AMC for its services. The management fee would be calculated by multiplying the daily net asset value of the entrusted assets and the rates as agreed under the agreement. When the investment performance reaches the target and if the investment management and service capability appraisal satisfies certain conditions as agreed under the agreement, the Company would pay PICC AMC an appropriate

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(iii) The Company and PICC HK have entered into framework agreements on reinsurance business cooperation since 6 May 2010. PICC HK is principally engaged in general insurance business, reinsurance business and the application of its own fund and insurance fund in Hong Kong, and is one of the reinsurers of the Company. The Company entered into the framework agreement on reinsurance business cooperation with PICC HK for the purposes of risk diversification and stabilisation of operations. On 28 March 2012, the Company and PICC HK renewed the framework agreement on reinsurance business cooperation. The term of the renewed agreement was one year commencing from 1 January 2012 and expiring on 31 December 2012. Pursuant to the renewed agreement, the Company agreed to cede insurance premiums to PICC HK and receive commission, and PICC HK agreed to cede insurance premiums to the Company and receive commission. Under the framework provided in the renewed agreement, the parties to the agreement could enter into various types of reinsurance agreements in respect of particular reinsurance businesses. The amount of insurance premiums ceded and rate of commission received for each particular reinsurance business would be decided by the two parties by reference to the market level and after arm’s length negotiation. Under the renewed agreement, the annual caps for the insurance premiums ceded to PICC HK by the Company and the commission (excluding taxes) received by the Company from PICC HK were expected to be RMB520 million and RMB150 million, respectively. In the Year, the insurance premiums ceded to PICC HK by the Company and the commission (excluding taxes) received by the Company from PICC HK amounted to RMB446 million and RMB149 million, respectively. The insurance premiums ceded to the Company by PICC HK amounted to RMB4 million and the commission received by PICC HK from the Company was RMB1 million. On 25 March 2013, the Company and PICC HK renewed the framework agreement on reinsurance business cooperation. The term of this agreement is one year commencing from 1 January 2013 and expiring on 31 December 2013.

(iv) During the Year, for the purposes of further improving the retirement pension protection system and to realise long-term incentives for its employees, the headquarters and several branches of the Company successively entered into contracts for the purchases of life insurance products (i.e. purchased various life insurance products including group annuity insurance) from PICC Life for the employees of the Company.

The Company was aware that during the Year, its headquarters entered into contracts for the purchases of life insurance products (including group annuity insurance) from PICC Life. The insurance premiums paid by the headquarters of the Company to PICC Life for such purchases in the Year only amounted to approximately RMB64 million, not exceeding the threshold for disclosure under the Listing Rules. However, later, when reviewing statistics of the connected transactions entered into between the Company and connected persons for the Year, the Company noticed that several branches of the Company also successively entered into contracts for the purchases of life insurance products including group annuity insurance from PICC Life in the Year. In the Year, such insurance premiums paid by such branches to PICC Life amounted to a total sum of approximately RMB191 million and when aggregated with the premiums paid by the headquarters of the Company, the aggregate insurance premiums paid amounted to approximately RMB255 million, which exceeded the threshold for disclosure on an aggregate basis. The transactions were subject to the reporting, annual review and announcement requirements but were exempt from the independent shareholders’ approval requirement. As soon as the Company becoming aware of the total amount of such transactions, the Company promptly made an announcement on the purchases of life insurance products from PICC Life for the Year, and complied with the reporting and annual review requirements.

In the year 2011, the headquarters of the Company did not purchase any insurance products from PICC Life, and only one branch purchased insurance products from PICC Life with an aggregate amount of insurance premiums not exceeding the threshold for disclosure under the Listing Rules. Hence, the transaction in 2011 was exempt from the reporting, annual review, announcement and independent shareholders’ approval requirements.

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The Independent Non-executive Directors of the Company have reviewed the continuing connected transactions mentioned above and confirmed that:

1. the transactions were entered into in the ordinary and usual course of business;

2. the transactions were on normal commercial terms, fair and reasonable and in the interests of the shareholders of the Company as a whole; and

3. the transactions were carried out in accordance with the terms of the agreements governing the transactions. The Company has engaged the auditors to report on the Company’s continuing connected transactions in accordance with Hong Kong Standard on Assurance Engagements 3000 “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information”, and with reference to Practice Note 740 “Auditor’s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules” issued by the Hong Kong Institute of Certified Public Accountants. The auditors have issued their unqualified letter containing their conclusions in respect of the continuing connected transactions mentioned above in accordance with Rule 14A.38 of the Listing Rules. The Company has provided a copy of the letter to the Hong Kong Stock Exchange. The auditors of the Company have reviewed the continuing connected transactions mentioned above and confirmed to the Board of Directors that: 1. nothing has come to their attention that causes them to believe that the disclosed continuing connected

transactions mentioned above have not been approved by the Company’s Board of Directors;

2. for the aforementioned continuing connected transactions involving the provision of goods or services by the Company, nothing has come to their attention that causes them to believe that these continuing connected transactions were not, in all material respects, in accordance with the pricing policies of the Company; 3. nothing has come to their attention that causes them to believe that the continuing connected transactions

mentioned above were not entered into, in all material respects, in accordance with the relevant agreements governing such transactions; and

4. nothing has come to their attention that causes them to believe that the aggregate amount of each of the continuing connected transactions mentioned above has exceeded the annual caps disclosed in the previous announcements dated 15 December 2011, 12 August 2011, 28 March 2012 and 12 March 2013 made by the Company in respect of each of the disclosed continuing connected transactions mentioned above.

Save for item (iv) stated above, the Company has complied with the disclosure requirements under Chapter 14A of the Listing Rules. The Company made an announcement to disclose details of the continuing connected transaction set out in the above item (iv) on 12 March 2013.