YEARLY REPORT December 30, 2011 Management Division

2011 YEARLY REVIEW

2011 REVIEW Labor review 1 Activity review 2 Regulation & Policy review 3 Analysis and Improvement Plan 5

LABOR REVIEW 1.Employee statistics by Gender

LABOR REVIEW 2.Employee statistics by Age

LABOR REVIEW new recruitment Branch New recruitment Head office42 HCMC9 Ha Noi34 Da Nang5 Branch New recruitment Can Tho12 Dong Nai9 Hai Phong7 Total: 118 new comers

TRAINING REVIEW 1.Routine training courses conducted by HR dept. Name of training coursesNumber of courses Orientation training07 Functional training04 Training for staff under 01 year seniority 04 Management training course09 Total 24 courses

TRAINING REVIEW 2.Technical training courses from parent company No.Request divisionTraining course nameFacilitator 1 IT DB2 System Performance, Tuning and Problem solving Trainer from parent company 2 Network system Design, Routing and Security Trainer from parent company 3 The Introduction of Investment Product System Trainer from parent company 4Policy admin Medical knowledge of insurance fields - claim & UW Trainer from parent company 5 Finance and Accounting Reserve calculationPlanning div. in Vietnam 6 Relationship between actual premium collection and PFYP. Planning div. in Vietnam

TRAINING REVIEW 3.Management training course  Subject: How to coach and motivate employees to maximum performance  Participant: Vietnamese middle management level

ACTIVITY REVIEW Fresh graduated student recruitment program  Date and time: September 05-16, 2011  Number of recruited fresh graduated students: 07

ACTIVITY REVIEW 2.Competition regarding to stipulating company regulation  Date and time: April 2011 to June 2011  Result: ResultHead OfficeBranches No. 1IT Div. Dong Nai Hai Phong No. 2Policy Admin Div. No. 3Management & AuditingHo Chi Minh

ACTIVITY REVIEW Service Center Satisfaction Survey  Date and time: August 16 to September 01, 2011  Participants: All agency staff with level from EAS above  Purposes:  Enhance the service quality of service center  Find out how satisfactory agency staff feel toward CS staff  Receive feedback from agency staff to improve the working effectiveness of service center  Result: 06 best CS staff selected by agency staff and publicly awarded  Survey result was feedback to CRDs for improvement.

ACTIVITY REVIEW Company trip No.BranchDestination 1.Head officeMui Ne – Phan Thiet 2.HanoiCat Ba Island 3.DanangPhong Nha – Ke Bang 4.CanthoBa Dong beach – Tra Vinh 5.DongnaiNha Trang beach 6.HaiphongCat Ba Island

ACTIVITY REVIEW Company trip

ACTIVITY REVIEW Company trip

COMPANY REGULATION UPDATE Review and revise company policies: 1.Uniform regulation 2.LOMA regulation 3.Domestic business trip regulation 4.Leave regulation

ANALYSIS AND IMPROVEMENT ANALYSIS 1.Inflation rate is high. Employee also expects salary increase. 2.New life insurers keep entering Vietnam and try to find experienced talents SOLUTIONS & IMPROVEMENT 1.Market survey to understand the salary market situation. 2.Design some long-term investment program to retain key persons or excellent employees. 3.Design more benefits, special training programs to retain employees and encourge employees for long-term service

2012 PLAN Follow up 2012 recruitment plan 2012 Training Plan 1.Follow up routine training courses: Orientation, functional, courses for staffs under one year, management training. 2.Cooperate with training div. to design training courses for normal employee level. 3.Cooperate with external training supplier for middle management training. 4.Continue to organize training programs supported by parent company.

2012 PLAN Employee benefit and retention 1.Apply group insurance benefit for employee: Personal accident insurance & medical insurance. Effective from: January 01, Design some special training project for talent investment as well as talent retention. Improve HR working procedures 1.Cooperate with IT div. for online attendance system 2.Cooperate with IT div. for online business trip system

20 MONTHLY REPORT DECEMBER, 2011 General Affairs Department

ANNUAL REPORT - General Affairs I. REVIEW 2011 A.Office building B.Office relocation C.Expenses (Office rental, electricity, telephone) D.Regulations E.Others II.ANALISYS AND IMPROVEMENT A.Analysis B.Improvement III.PLAN 2012

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) A.Office Building  Can Tho new Agency Office (Hung Loi)

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) A.Office Building  Dong Nai new Office (Nguyen Ai Quoc)

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) B.Office Relocation  Bui Thi Xuan-6F&8F: relocating Staffs, Trainers & Collectors offices & Cathay Non-life office  Hai Phong-5F: renovating Meeting room into 02 BM rooms  Binh Thanh-2F&4F: shifting Training room and Agency office  N’orch-8F.3: setting up office for HCM6  N’orch-8F.1: re-arranging office for HCM1

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) C.Expense - Office Rental Total rental area increases m 2 P.S: There are 2 new offices: Hung Loi (Can Tho) & Nguyen Ai Quoc (Dong Nai)

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) C.Expense - Office Rental

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) C.Expense - Office Rental P.S: Reason is successful negotiation with Landlords to reduce office rental

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) C.Expense - Electricity

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) C.Expense - Electricity P.S: Reasons of electricity expense increasing: Increase of 2 more buildings in Can Tho and Dong Nai Full use of Bui Thi Xuan and Dong Khoi offices 2 times of unit price of electricity increase (15.28% then 5%) 2010: 11 buildings 2011: 13 buildings

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) C.Expense - Telephone

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) C.Expense - Telephone 2010: 11 buildings 2011: 13 buildings P.S: Because of business development and more buildings in 2011, telephone expense increases. However, it is still under control.

ANNUAL REPORT - General Affairs I.REVIEW 2011 (cont’d) D.Regulations  Regulation on Incoming / Outgoing Document Management (revised)  Regulation on Security and Property Management (revised)  Regulation on Furniture and Office Equipment Management (newly issued) E. Policies  Stationery ordering applied online  Uniforms purchased by Branches locally to save postal cost (Ha Noi, Hai Phong, Dong Nai)

ANNUAL REPORT - General Affairs II.ANALISYS AND IMPROVEMENT A.Analysis  Market price of office rental keeps remained or dropping.  The operation cost keeps increasing because of electricity, water, gasoline, labour cost, Vietnam Dong depreciation…  Many suppliers ask for increasing prices because of increase of material and operation cost

ANNUAL REPORT - General Affairs II.ANALISYS AND IMPROVEMENT (cont’d) B.Improvement  Office rental market is going down, GA Dept’s keep negotiating with Landlords to reduce rental when time comes even not mentioned in the contracts.  Cost control should be continued tightly and announced more publicly.  Negotiation skill with suppliers should be enhanced more through training courses and daily practice

ANNUAL REPORT - General Affairs III.PLAN 2012  Accommodation for new GA model : support some furniture and equipments if possible.  Adjust the office using area more properly and efficiently.  Review current suppliers and finding better suppliers who is more competent and reliable.  Keep monitoring the rental market to negotiate the rental price if possible.

ANNUAL REPORT - General Affairs III.PLAN 2012 (cont’d)  Cooperate with PR Department to keep good relationship with related Authorities, Landlords…  Find solutions for better cost control.  Cooperate with IT Division to apply online Asset management system on BCS.

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38 Terms & Conditions Company regulations Legal compliance & Legal consulting Contracts & Official letters Legal News letter Law suits & Disputes

39 Reviews Terms & Conditions approved in 2011 C10 - CATHAY ADVANCED WHOLE LIFE INSURANCE 1 C11 - CATHAY ADVANCED ENDOWMENT 2 C12 - ADVANCED CHILD EDUCATION 3 A05 - CATHAY ACCIDENTAL ENDOWMENT 4 R06 - CATHAY WAIVER RIDER 5

40 Reviews Terms & Conditions - Follow up I01 - Whole life universal life - Basic 1 I02 - Whole life universal life - Advance 2 I03 - Term universal life - Basic 3 I04 - Term universal life - Advance 4 C13 - Cathay Term Life Insurance 5 C14 - Cathay Advanced Lady Endowment 6 C15 - Cathay Critical Illness C16 - Cathay Accidental Endowment 8

41 Reviews Company Regulations Make sure all the company’s operations and policies will follow the Vietnamese rules

42 Reviews Legal consultancy & Policy Support to set up the GA model Help to authorize the Branch CRDs to review & sign routine contracts & travel contracts 2 Lawsuit (Mr. Lan’s case) & labor dispute (Mr. Tuyen’s case) 1 3

43 Strength:  Most of staffs are young & willing to learn Weakness: The legal staffs have not much experience in life insurance area Legal staffs have many difference ideas in T&C The Vietnamese regulations are changed frequently. Every depts. should pay attention to relevant issues. Analysis & Improvement

44 SOLUTIONS:  Set standard of common articles for applying to new products  Organize internal training course and seminar to improve legal skills and knowledge in life insurance area  Legal Dept. will update frequently new regulations and remind relevant depts. Analysis & Improvement

45  Improve legal skills and life insurance knowledge of the legal staffs  Follow up reviewing new products  Set standard of common articles for applying to the new products  Follow up lawsuits