boc-prudential easy-choice mandatory ......tung savio wai-hok wang jiang (appointed on 20 march...

Reports and Audited Financial Statements

BOC-PRUDENTIAL EASY-CHOICE MANDATORY

PROVIDENT FUND SCHEME

中銀保誠簡易強積金計劃

31 March 2020

BOC-PRUDENTIAL EASY-CHOICE MANDATORY PROVIDENT FUND SCHEME


CONTENTS Pages

SCHEME REPORT 1 - 9

INDEPENDENT AUDITOR'S REPORT 10 - 13

INDEPENDENT AUDITOR'S ASSURANCE REPORT 14 - 16

AUDITED FINANCIAL STATEMENTS

Statement of net assets available for benefits - Scheme 17

Statement of changes in net assets available for benefits - Scheme 18

Statement of cash flows - Scheme 19

Revenue statement - Constituent Funds 20 - 22

Statement of assets and liabilities - Constituent Funds 23 - 25

Statement of changes in net assets - Constituent Funds 26 - 28

Notes to the financial statements 29 – 98

INVESTMENT REPORT 99 – 149

1



SCHEME REPORT

For the year ended 31 March 2020

OVERVIEW

BOC-Prudential Easy-Choice Mandatory Provident Fund Scheme (the "Scheme") is a mandatory provident

fund scheme governed by a master trust deed dated 27 January 2000 and its subsequent deeds of amendment

and subject to the laws of the Hong Kong Special Administrative Region of the People's Republic of China.

The Scheme is designed to provide retirement benefits to the members under the Scheme. In addition, subject

to the Trustee’s and the Investment Manager’s approval, any person who is or had been a member of a

registered scheme under the Mandatory Provident Fund Schemes Ordinance (the "MPFSO") or of an

occupational retirement scheme may participate in the Scheme as an SVC member by completing an

application form and executing a participation agreement. Subject to the provisions of the MPFSO and the

Trustee's and the Investment Manager's approval, any person who is an employee member of a scheme, a self-

employed person member of a scheme, a personal account holder of a scheme, or a member of an occupational

retirement scheme in respect of which an exemption has been granted under section 5 of the MPFS Ordinance

may participate in the Scheme as a Tax Deductible Voluntary Contributions (“TVC”) member by completing

an application form and executing a participation agreement.

The Scheme has been approved as a registered scheme by the Mandatory Provident Fund Schemes Authority

(the "MPFA") under the Mandatory Provident Fund Schemes Ordinance and authorised by the Securities and

Futures Commission of Hong Kong (the "SFC").

The Scheme is a master trust scheme which consists of sixteen constituent funds as at 31 March 2020. Each

constituent fund has a separate and distinct investment objective and policy. They are:

1. BOC-Prudential Growth Fund 2. BOC-Prudential Balanced Fund 3. BOC-Prudential Stable Fund 4. BOC-Prudential Global Equity Fund 5. BOC-Prudential Asia Equity Fund 6. BOC-Prudential China Equity Fund 7. BOC-Prudential Hong Kong Equity Fund 8. BOC-Prudential Japan Equity Fund 9. BOC-Prudential Bond Fund 10. BOC-Prudential MPF Conservative Fund 11. BOC-Prudential CSI HK 100 Tracker Fund

12. BOC-Prudential European Index Tracking Fund

13. BOC-Prudential North America Index Tracking Fund

14. BOC-Prudential MPF RMB & HKD Money Market Fund

15. BOC-Prudential Core Accumulation Fund

16. BOC-Prudential Age 65 Plus Fund

2



SCHEME REPORT (continued)


FINANCIAL DEVELOPMENT OF THE SCHEME

During the financial year ended 31 March 2020, the members' contributions were invested in the constituent

funds of the Scheme in accordance with their investment choices. The market value of the sixteen constituent

funds as at 31 March 2020 is as follows:

HK$

BOC-Prudential Growth Fund 9,406,975,120

BOC-Prudential Balanced Fund 6,060,885,795

BOC-Prudential Stable Fund 7,464,668,608

BOC-Prudential Global Equity Fund 3,646,816,424

BOC-Prudential Asia Equity Fund 2,088,913,215

BOC-Prudential China Equity Fund 5,544,508,512

BOC-Prudential Hong Kong Equity Fund 7,170,660,410

BOC-Prudential Japan Equity Fund 379,061,457

BOC-Prudential Bond Fund 2,538,943,032

BOC-Prudential MPF Conservative Fund 10,916,421,925

BOC-Prudential CSI HK 100 Tracker Fund 1,042,983,091

BOC-Prudential European Index Tracking Fund 409,222,475

BOC-Prudential North America Index Tracking Fund 1,702,404,314

BOC-Prudential MPF RMB & HKD Money Market Fund 655,170,805

BOC-Prudential Core Accumulation Fund 1,762,933,342

BOC-Prudential Age 65 Plus Fund 703,358,553 _____________

Total 61,493,927,078 _____________ _____________

The net loss on investments of the Scheme for the financial year ended 31 March 2020 amounted to

HK$6,326,272,931 (2019: net loss of HK$1,321,694,009).

CHANGES TO THE GOVERNING RULES OF THE SCHEME

During this financial year, the following amendment was made to the governing rules of the scheme.

1. Changes relating to tax deductible voluntary contributions

The Principal Brochure (renamed to MPF Scheme Brochure effective from 31 March 2020) of the

Scheme (“the Principal Brochure”) was amended in order to adopt the changes in relation to Tax

Deductible Voluntary Contribution which had been effect on 1 April 2019. From 1 April 2019, similar

to premiums paid for qualifying deferred annuity products, MPF voluntary contributions made in a

specified account set up by scheme members (namely, TVC account) can also enjoy tax concession in

order for them to meet the long-term saving objective for retirement protection.

3





CHANGES TO THE GOVERNING RULES OF THE SCHEME (continued)

2. Handling fee relating to withdrawal in instalments

The Trust Deed and the Principal Brochure were amended such that with effect from 1 April 2019, the

Trustee will not charge any handling fee for payment of the first twelve (12) instalments in each calendar

year and payment of the final instalment for all remaining and payable accrued benefits under the Scheme.

3. Regulatory changes relating to AEOI

The Principal Brochure was updated to reflect the disclosure relating to the automatic exchange of

financial account information ("AEOI") - the account holders and controlling persons (as defined below)

may be required to provide valid self-certification form and such other information as the Trustee and/or

any of its authorised person may require for the implementation of AEOI, but if member is not a tax

resident in any jurisdiction outside Hong Kong, such MPF account information will not be reported to

the Inland Revenue Department ("IRD") for transmission to any tax authority outside Hong Kong.

4. Fee reduction

Owing to the reduction of the trustee fee at the underlying fund level, the management fee payable out

of the underlying fund of the BOC-Prudential CSI HK 100 Tracker Fund has been reduced from 0.0875%

to 0.075% of NAV per annum, with effect from 3 December 2019. The management fee of the BOC-

Prudential CSI HK 100 Tracker Fund at the Constituent Fund level will remain unchanged. The Principal

Brochure was updated to reflect such changes.

5. Updates for compliance with Part G of the Code on Disclosure for MPF Investment Funds

The Principal Brochure was updated to reflect the latest requirements in Part G of the Code on Disclosure

for MPF Investment Funds. In particular, the sequence of the contents has been rejigged to be in line

with the requirements of the Code, and the contents have been updated in an easy-to-understand and

concise manner to enhance readability and clarity.

4





SERVICE PROVIDERS

Trustee and Custodian BOCI-Prudential Trustee Limited

12/F & 25/F, Citicorp Centre,

18 Whitfield Road,

Causeway Bay,

Hong Kong

Particulars of the directors are stated in Annex A of the Scheme Report.

Investment Manager BOCI-Prudential Asset Management Limited

27/F, Bank of China Tower,

1 Garden Road,

Hong Kong

The investment manager is an associate of the trustee. Particulars of the

controllers are stated in Annex B of the Scheme Report.

Auditors Ernst & Young

22/F, CITIC Tower,

1 Tim Mei Avenue,

Central,

Hong Kong

Solicitors Baker & Mckenzie

14th Floor, One Taikoo Place,

979 King’s Road, Quarry Bay,

Hong Kong

Bank Bank of China (Hong Kong) Limited

14/F, Bank of China Tower,

1 Garden Road,

Hong Kong

The bank is an associate of the trustee. Particulars of the controllers are

stated in Annex B of the Scheme Report.

5





SERVICE PROVIDERS (continued)

MPF Corporate 1. The Prudential Hong Kong Limited

Intermediaries 59/F, One Island East,

18 Westlands Road, Quarry Bay,

Hong Kong

2. BOCI-Prudential Asset Management Limited

27/F Bank of China Tower

1 Garden Road

Hong Kong

3. Convoy Financial Services Limited

Trust Tower,

Lee & Man Commercial Center,

68 Johnston Road, Wan Chai,

Hong Kong

The Prudential Hong Kong Limited and BOCI-Prudential Asset

Management Limited are associates of the trustee. Particulars of the

controllers are stated in Annex B of the Scheme Report.

General information BOCI-Prudential Trustee Limited

and enquiry Customer Service Centre

25/F Citicorp Centre

18 Whitfield Road

Causeway Bay

Hong Kong

Hotline: 2929 3030/ 2280 8888

Fax No.: 2151 0999/2530 4303

Website: www.bocpt.com/ www.boci-pru.com.hk

6


中銀保誠簡易強積金計劃 Annex A




PARTICULARS OF DIRECTORS OF TRUSTEE

DURING THE YEAR ENDED 31 MARCH 2020

Name

Business address

Law Lai Wah, Andrew

(appointed on 13 September 2019)

12/F, Citicorp Centre, 18 Whitfield Road, Causeway Bay,

Hong Kong

Gwee Siew Ping 10 Marina Boulevard, #32-01 Marina Bay Financial Centre,

Tower 2, Singapore 018983

Lau Tim 13/F, One International Finance Centre, 1 Harbour View

Street, Central, Hong Kong

Neil Anthony Torpey

c/o Paul Hastings LLP, 22/F, Bank of China Tower, Central,

Hong Kong

Wong Man Yee

Wang Bing

(appointed on 10 June 2019)

Ma Yuk Sheung, Loretta

(appointed on 8 July 2019)

Yuan Shu

(resigned on 10 June 2019)

Chu Wing Yiu

(resigned on 13 September 2019)

7/F, Bank of China Building, 2A Des Voeux Road Central,

Hong Kong

13/F, Bank of China Tower, 1 Garden Road, Hong Kong

17B, Tower D, The Grandville, 2 Lok Kwai Path, Shatin, New

Territories, Hong Kong

7


中銀保誠簡易強積金計劃 Annex B SCHEME REPORT (continued)



PARTICULARS OF CONTROLLERS OF

BANK OF CHINA (HONG KONG) LIMITED

DURING THE YEAR ENDED 31 MARCH 2020

Name

Central Huijin Investment Limited

Bank of China Limited

BOC Hong Kong (Group) Limited

BOC Hong Kong (BVI) Limited

BOC Hong Kong (Holdings) Limited

Liu Liange

(appointed on 5 July 2019)

Lin Jingzhen

Eva Cheng

Choi Koon Shum

Koh Beng Seng

Law Yee Kwan Quinn

Tung Savio Wai-Hok

Wang Jiang

(appointed on 20 March 2020)

Sun Yu

(appointed on 20 March 2020)

Chen Siqing

(resigned on 28 April 2019)

Gao Yingxin

(resigned on 25 May 2020)

Business/residential address

New Poly Plaza, 1 Chaoyangmen Beidajie, Dongcheng

District, Beijing, 100010, The People's Republic of China

1 Fuxingmen Nei Dajie, Beijing 100818, The People's

Republic of China


P.O. Box 957, Offshore Incorporations Centre, Road Town,

Tortola, British Virgin Islands



Republic of China


Republic of China

c/o 53/F, Bank of China Tower, 1 Garden Road, Hong Kong

Room 1608, 16/F, Bank of America Tower, 12 Harcourt Road,

Central, Hong Kong



c/o 53/F, Bank of China Tower, 1 Garden Road, Hong Kong 1 Fuxingmen Nei Dajie, Beijing 100818, The People's

Republic of China


Republic of China

8





PARTICULARS OF CONTROLLERS OF INVESTMENT

MANAGER AND MPF CORPORATE INTERMEDIARIES

DURING THE YEAR ENDED 31 MARCH 2020 (continued)

1. The Prudential Hong Kong Limited

Name

Prudential plc

Prudential Corporation Asia Limited

Yung Kai Ming, Derek

Ng Lup-yin, Lilian

Stephen Paul Bickell

Peter Martin Lloyd

Tan Shen Fong, Alan


13/F, One International Finance Centre, One Harbour

View Street, Central, Hong Kong



59/F, One Island East, 18 Westlands Road, Quarry Bay,

Hong Kong






Hong Kong


Hong Kong

9





PARTICULARS OF CONTROLLERS OF INVESTMENT

MANAGER AND MPF CORPORATE INTERMEDIARIES

DURING THE YEAR ENDED 31 MARCH 2020 (continued)

2. BOCI-Prudential Asset Management Limited

Name

Central Huijin Investment Limited

Bank of China Limited

BOC International Holdings Limited

BOCI Asset Management Limited

Prudential plc

Prudential Holdings Limited

Prudential Corporation Holdings

Limited

Prudential Corporation Asia Limited

Tse Yung Hoi

Wang Zhongze

Lee Yui Leung

Teo Thye Peng Bernard

(appointed on 30 Sep 2019)

Woo Tsung Yuan, Francis James

(appointed on 6 Mar 2020)

Seck Wai Kwong

(appointed on 15 Apr 2019 and

resigned on 30 Sep 2019)

Guy Robert Strapp

(resigned on 15 Apr 2019)


New Poly Plaza, 1 Chaoyangmen Beidajie, Dongcheng

District, Beijing, 100010, The People's Republic of

China


Republic of China





1 Angel Court, London EC2R 7AG, United Kingdom

Laurence Pountney Hill, London EC4R 0HH, United

Kingdom

13/F, One International Finance Centre, 1 Harbour View





13/F, One International Finance Centre, 1 Harbour View


10 Marina Boulevard, #32-01, Marina Bay Financial

Centre Tower 2, Singapore

Date: 25 September 2020

18



STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - SCHEME


2020 2019

HK$ HK$

INCREASE IN NET ASSETS ATTRIBUTABLE TO

SCHEMEHOLDERS FROM PARTICIPATING TRANSACTIONS

Contributions received and receivable

from employers

- mandatory 2,828,087,980 2,773,062,435

- additional voluntary 1,495,668,895 1,347,975,931

from employees

- mandatory 2,873,610,319 2,752,757,447

- additional voluntary 78,267,879 44,839,104

Transfers in from other schemes 1,016,660,259 1,257,195,245

Contributions surcharge 3,798,713 4,678,240 _____________ _____________

8,296,094,045 8,180,508,402 _____________ _____________

Benefits paid and payable

- Retirement (766,960,584) (658,793,128)

- Early retirement (211,101,343) (176,312,035)

- Death (61,843,379) (57,016,126)

- Permanent departure (201,784,181) (191,177,206)

- Total incapacity (17,334,104) (16,080,630)

- Refunds of additional voluntary contributions (25,341,181) (101,609,742)

- Small balance account (19,623) (39,215)

- Terminal illness (4,767,296) (6,033,499)

Transfers out to other schemes (4,052,887,044) (3,682,957,071) _____________ _____________

(5,342,038,735) (4,890,018,652)

Forfeitures (105,543) (2,737,528) _____________ _____________

Sub-total of Benefit paid and payable and forfeitures (5,342,144,278) (4,892,756,180) _____________ _____________

INCREASE IN NET ASSETS ATTRIBUTABLE TO

SCHEMEHOLDERS RESULTING FROM OPERATIONS 2,953,949,767 3,287,752,222

Investment loss:

Net loss on investments (6,326,272,931) (1,321,694,009) _____________ _____________

INCREASE IN NET ASSETS

ATTRIBUTABLE TO SCHEMEHOLDERS (3,372,323,164) 1,966,058,213

BALANCE AT BEGINNING OF THE YEAR 65,358,264,762 63,392,206,549 _____________ _____________

BALANCE AT END OF THE YEAR 61,985,941,598 65,358,264,762 _____________ _____________ _____________ _____________

19



STATEMENT OF CASH FLOWS - SCHEME


2020 2019

HK$ HK$

CASH FLOWS FROM OPERATING ACTIVITIES

Subscription of units in constituent funds (8,291,456,783) (8,152,773,330)

Redemption of units in constituent funds 5,342,512,844 4,901,741,980

Other operating cash receipts (64,187) 231,393 _____________ _____________

NET CASH USED IN OPERATING ACTIVITIES (2,949,008,126) (3,250,799,957) _____________ _____________

CASH FLOWS FROM FINANCING ACTIVITIES

Contributions received 8,422,861,142 8,179,846,574

Benefits paid (5,342,407,301) (4,899,004,452)

Forfeitures returned to employers (146,970) (2,617,123) _____________ _____________

NET CASH FROM FINANCING ACTIVITIES 3,080,306,871 3,278,224,999 _____________ _____________

NET INCREASE IN CASH AND CASH EQUIVALENTS 131,298,745 27,425,042

CASH AND CASH EQUIVALENTS AT

BEGINNING OF THE YEAR 249,094,700 221,669,658 _____________ _____________

CASH AND CASH EQUIVALENTS AT END OF THE YEAR,

represented by bank balances 380,393,445 249,094,700 _____________ _____________ _____________ _____________

20


中銀保誠簡易強積金計劃 REVENUE STATEMENT - CONSTITUENT FUNDS


BOC-Prudential BOC-Prudential BOC-Prudential BOC-Prudential BOC-Prudential Growth Fund Balanced Fund Stable Fund Global Equity Fund Asia Equity Fund

Notes 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019

HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$

INVESTMENT

(LOSS)/INCOME 7 (1,512,553,776) (141,762,360) (507,238,681) (75,967,955) (342,757,210) (88,898,873) (485,740,135) 97,184,945 (451,465,400) (83,807,705)

INVESTMENT

EXPENSES 8 (172,931,944) (171,112,876) (104,152,990) (102,026,025) (124,630,939) (123,601,583) (65,704,729) (59,707,554) (39,103,711) (37,830,102) _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________

(1,685,485,720) (312,875,236) (611,391,671) (177,993,980) (467,388,149) (212,500,456) (551,444,864) 37,477,391 (490,569,111) (121,637,807)

ADMINISTRATIVE

EXPENSES 9 (3,181,056) (2,035,588) (1,923,299) (1,218,763) (2,297,270) (1,471,362) (1,199,120) (728,129) (737,202) (463,984) _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________

(DECREASE)/INCREASE

IN NET ASSETS

ATTRIBUTABLE TO UNITHOLDERS

FROM OPERATIONS (1,688,666,776) (314,910,824) (613,314,970) (179,212,743) (469,685,419) (213,971,818) (552,643,984) 36,749,262 (491,306,313) (122,101,791) _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________

21



REVENUE STATEMENT - CONSTITUENT FUNDS (continued)


BOC-Prudential

BOC-Prudential BOC-Prudential BOC-Prudential BOC-Prudential BOC-Prudential MPF CSI HK 100

China Equity Fund Hong Kong Equity Fund Japan Equity Fund Bond Fund Conservative Fund Tracker Fund Notes 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019

HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$

INVESTMENT

(LOSS)/INCOME 7 (669,517,905) (344,762,314) (1,222,695,002) (121,989,081) (31,732,780) (20,037,532) 74,796,611 6,359,277 248,242,821 200,031,254 (156,152,500) (4,285,436)

INVESTMENT

EXPENSES 8 (92,477,908) (91,448,081) (121,266,336) (118,019,224) (6,666,551) (6,114,728) (34,309,784) (29,564,563) (85,388,644) (77,841,110) (9,091,408) (7,815,277) _____________ ____________ _____________ _____________ __________ __________ __________ __________ __________ __________ ___________ __________

(761,995,813) (436,210,395) (1,343,961,338) (240,008,305) (38,399,331) (26,152,260) 40,486,827 (23,205,286) 162,854,177 122,190,144 (165,243,908) (12,100,713)

ADMINISTRATIVE

EXPENSES 9 (1,702,038) (1,088,072) (2,249,754) (1,390,038) (140,929) (91,098) (688,047) (398,267) (3,018,264) (1,797,518) (331,241) (195,202) _____________ ____________ _____________ _____________ __________ __________ __________ __________ __________ __________ ___________ __________

(DECREASE)/INCREASE

IN NET ASSETS


FROM OPERATIONS (763,697,851) (437,298,467) (1,346,211,092) (241,398,343) (38,540,260) (26,243,358) 39,798,780 (23,603,553) 159,835,913 120,392,626 (165,575,149) (12,295,915) _____________ ____________ _____________ _____________ __________ __________ __________ __________ __________ __________ ___________ __________ _____________ ____________ _____________ _____________ __________ __________ __________ __________ __________ __________ ___________ __________

22



REVENUE STATEMENT - CONSTITUENT FUNDS (continued)


BOC-Prudential BOC-Prudential BOC-Prudential MPF

European Index North America RMB & HKD BOC-Prudential Core BOC-Prudential

Tracking Fund Index Tracking Fund Money Market Fund Accumulation Fund Age 65 Plus Fund Total NOTES 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019


INVESTMENT

(LOSS)/INCOME 7 (72,426,910) (1,230,206) (212,671,393) 74,378,611 (11,199,244) (7,930,350) (82,138,371) 39,729,088 22,277,870 14,188,512 (5,412,972,005) (458,800,125)

INVESTMENT

EXPENSES 8 (4,183,655) (3,604,852) (14,387,402) (9,604,158) (3,065,934) (2,044,190) (12,639,716) (8,368,926) (4,358,955) (2,508,525) (894,360,606) (851,211,774) __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ ____________ ____________

(76,610,565) (4,835,058) (227,058,795) 64,774,453 (14,265,178) (9,974,540) (94,778,087) 31,360,162 17,918,915 11,679,987 (6,307,332,611) (1,310,011,899)

ADMINISTRATIVE

EXPENSES 9 (149,188) (94,228) (424,408) (215,562) (230,873) (164,799) (481,044) (233,123) (186,587) (96,377) (18,940,320) (11,682,110) __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ ____________ ____________

(DECREASE)/INCREASE

IN NET ASSETS


FROM OPERATIONS (76,759,753) (4,929,286) (227,483,203) 64,558,891 (14,496,051) (10,139,339) (95,259,131) 31,127,039 17,732,328 11,583,610 (6,326,272,931) (1,321,694,009) __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ ____________ ____________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ ____________ ____________

23



STATEMENT OF ASSETS AND LIABILITIES - CONSTITUENT FUNDS

At 31 March 2020

BOC-Prudential BOC-Prudential BOC-Prudential BOC-Prudential BOC-Prudential

Growth Fund Balanced Fund Stable Fund Global Equity Fund Asia Equity Fund

Notes 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019


ASSETS

Investments in interest--

bearing securities 12 - - - - - - - - - -

Investments in approved pooled

investment funds/approved

index-tracking collective

investment schemes 9,356,212,167 11,191,623,849 5,556,465,282 6,357,675,109 6,880,120,201 7,349,821,603 3,644,425,833 3,987,260,879 2,067,467,838 2,504,791,193

Derivative financial instruments 10 - - 203,292 - 493,708 - - 261,037 1,430,254 -

Interest, other receivables

and prepayments 47,803 33,071 101,642 28,356 109,238 44,262 1,149 845 4,028 1,843

Contributions in transit 760,758 880,525 634,059 521,972 414,101 535,926 548,744 430,839 214,347 275,184

Accounts receivable

on fund switching 4,141,717 1,207,372 1,805,116 806,962 7,194,980 1,364,187 3,951,241 960,424 2,768,337 933,349

Amounts due from brokers - 8,168,000 2,842,000 - 6,902,000 - - 3,346,000 2,356,000 1,210,000

Bank deposits 11 - - 151,593,594 - 161,699,834 - - - - -

Bank balances 73,290,175 42,512,326 365,988,492 360,521,649 432,906,549 704,411,289 11,273,121 7,046,302 24,252,045 23,029,989 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

TOTAL ASSETS 9,434,452,620 11,244,425,143 6,079,633,477 6,719,554,048 7,489,840,611 8,056,177,267 3,660,200,088 3,999,306,326 2,098,492,849 2,530,241,558 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

LIABILITIES

Derivative financial instruments 10 - 14,916 - 41,584 - 70,060 713,420 - - 771,686

Amounts due to brokers - 333,300 - 929,200 - 1,565,500 - - - -

Accounts payable on

fund switching 8,462,584 3,126,771 5,960,426 9,193,004 6,838,931 19,588,720 5,562,187 970,816 5,320,654 795,629

Redemptions payable 5,927,429 10,335,180 4,289,433 5,224,437 7,869,077 6,761,360 2,026,945 2,975,824 1,294,884 1,809,665

Accounts payable and accruals 13,087,487 14,774,987 8,497,823 8,925,659 10,463,995 10,710,497 5,081,112 5,244,809 2,964,096 3,323,885 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

TOTAL LIABILITIES 27,477,500 28,585,154 18,747,682 24,313,884 25,172,003 38,696,137 13,383,664 9,191,449 9,579,634 6,700,865 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NET ASSETS ATTRIBUTABLE

TO UNITHOLDERS 9,406,975,120 11,215,839,989 6,060,885,795 6,695,240,164 7,464,668,608 8,017,481,130 3,646,816,424 3,990,114,877 2,088,913,215 2,523,540,693 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NUMBER OF UNITS IN ISSUE 491,263,065.6312 497,265,269.1329 314,877,366.9627 316,161,021.0128 403,417,620.6460 407,938,254.6682 148,995,106.3838 142,179,971.7601 172,625,287.3726 168,986,808.0552 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NET ASSETS VALUE PER UNIT 19.1485 22.5550 19.2484 21.1766 18.5035 19.6536 24.4760 28.0638 12.1008 14.9333 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

24


中銀保誠簡易強積金計劃 STATEMENT OF ASSETS AND LIABILITIES - CONSTITUENT FUNDS (continued)

At 31 March 2020

BOC-Prudential


China Equity Fund Hong Kong Equity Fund Japan Equity Fund Bond Fund Conservative Fund Tracker Fund

Notes 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019


ASSETS

Investments in interest-

bearing securities 12 - - - - - - - - 729,033,066 325,727,720 - -


investment funds/approved

index-tracking collective

investment schemes 5,545,317,883 6,189,917,381 7,171,190,788 8,099,358,104 377,517,073 384,722,147 2,526,719,395 2,197,254,530 - - 1,041,481,721 1,054,323,830

Derivative financial instruments 10 - - - - - - 583,772 - - - - -


and prepayments 1,350 986 1,841 998 851 288 2,791 1,508 47,895,227 40,400,122 774,182 726,813

Contributions in transit 605,753 589,758 924,173 974,268 40,333 50,325 263,721 276,441 1,457,846 976,581 206,917 132,835

Accounts receivable on fund switching 14,608,332 10,126,408 21,708,874 14,603,010 5,319,771 54,954,106 10,374,018 3,563,699 114,056,241 26,139,847 7,266,587 2,916,636

Amounts due from brokers 4,661,000 4,756,000 19,179,000 128,000 16,463,000 - 15,823,400 4,339,617 - - 951,693 -

Bank deposits 11 - - - - - - - - 9,992,793,089 9,901,228,063 - -

Bank balances 6,897,389 10,861,400 5,144,507 18,008,373 171,334 1,126,303 7,452,231 12,151,505 325,387,943 98,117,884 5,727,026 2,188,979 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

TOTAL ASSETS 5,572,091,707 6,216,251,933 7,218,149,183 8,133,072,753 399,512,362 440,853,169 2,561,219,328 2,217,587,300 11,210,623,412 10,392,590,217 1,056,408,126 1,060,289,093 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

LIABILITIES

Derivative financial instruments 10 - - - - 1,236,297 1,409,212 - 408,411 - - - -

Amounts due to brokers - - - - - - - - 219,776,739 - 550 1,107,766

Accounts payable on

fund switching 16,107,554 16,893,876 33,225,484 17,896,284 18,393,090 1,884,244 16,360,590 3,229,473 54,465,141 23,451,492 11,428,203 4,039,799

Redemptions payable 3,899,191 4,255,440 4,451,409 5,553,533 298,869 357,386 2,699,249 1,547,176 12,316,727 10,489,414 1,190,751 759,074

Accounts payable and accruals 7,576,450 8,171,439 9,811,880 10,666,341 522,649 523,354 3,216,457 2,621,438 7,642,880 7,093,275 805,531 765,173 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

TOTAL LIABILITIES 27,583,195 29,320,755 47,488,773 34,116,158 20,450,905 4,174,196 22,276,296 7,806,498 294,201,487 41,034,181 13,425,035 6,671,812 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________


TO UNITHOLDERS 5,544,508,512 6,186,931,178 7,170,660,410 8,098,956,595 379,061,457 436,678,973 2,538,943,032 2,209,780,802 10,916,421,925 10,351,556,036 1,042,983,091 1,053,617,281 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NUMBER OF UNITS IN ISSUE 705,539,467.1647 691,822,922.5792 188,944,603.3416 178,525,952.0922 49,659,239.3628 50,877,955.0458 183,265,775.4277 162,548,201.4126 906,924,506.7098 872,968,629.2785 82,852,994.3816 71,648,542.1067 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NET ASSETS VALUE PER UNIT 7.8585 8.9429 37.9511 45.3657 7.6332 8.5828 13.8538 13.5946 12.0367 11.8578 12.5883 14.7053 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

25



STATEMENT OF ASSETS AND LIABILITIES - CONSTITUENT FUNDS (continued)

At 31 March 2020



Tracking Fund Index Tracking Fund Money Market Fund Accumulation Fund Age 65 Plus Fund Total

Notes 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019


ASSETS

Investments in interest-

bearing securities 12 - - - - 186,324,371 218,547,345 - - - - 915,357,437 544,275,065


investment funds/

approved index-tracking collective

investment schemes 403,243,221 409,982,228 1,702,921,665 1,189,862,785 - - 1,737,290,998 1,345,627,736 692,618,354 429,662,050 48,702,992,419 52,691,883,424

Derivative financial instruments 10 4,808,426 1,895,208 1,767,905 - - - - - - - 9,287,357 2,156,245


and prepayments 363 122 1,081 245 1,805,058 1,799,513 116,499 88,716 36,169 22,491 50,899,272 43,150,179

Contributions in transit 72,244 98,982 600,927 223,955 56,643 89,566 854,746 913,206 112,311 100,435 7,767,623 7,070,798

Accounts receivable on fund switching 683,046 1,182,543 23,478,759 3,649,536 2,911,133 1,252,046 4,510,700 763,296 3,361,256 2,820,526 228,140,108 127,243,947

Amounts due from brokers 3,223,000 94,000 - 19,559,000 - - 2,000,000 - 2,000,000 - 76,401,093 41,600,617

Bank deposits 11 - - - - 459,451,499 439,603,436 - - - - 10,765,538,016 10,340,831,499

Bank balances 1,000,271 1,681,372 6,894,452 1,838,773 7,546,034 4,983,923 28,802,584 35,343,061 11,691,928 11,628,228 1,314,426,081 1,335,451,356 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

TOTAL ASSETS 413,030,571 414,934,455 1,735,664,789 1,215,134,294 658,094,738 666,275,829 1,773,575,527 1,382,736,015 709,820,018 444,233,730 62,070,809,406 65,133,663,130 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

LIABILITIES

Derivative financial instruments 10 - - - 33,249 - - - - - - 1,949,717 2,749,118

Amounts due to brokers - - - - - - - - - - 219,777,289 3,935,766

Accounts payable on fund switching 2,265,880 637,292 30,438,978 21,210,280 1,879,192 3,080,020 6,933,559 651,889 4,497,655 594,358 228,140,108 127,243,947

Redemptions payable 1,208,256 341,118 1,446,910 661,318 1,034,850 575,728 2,521,667 2,352,994 1,480,356 324,922 53,956,003 54,324,569

Accounts payable and accruals 333,960 320,811 1,374,587 914,138 9,891 8,307 1,186,959 875,280 483,454 279,658 73,059,211 75,219,051 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

TOTAL LIABILITIES 3,808,096 1,299,221 33,260,475 22,818,985 2,923,933 3,664,055 10,642,185 3,880,163 6,461,465 1,198,938 576,882,328 263,472,451 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________


TO UNITHOLDERS 409,222,475 413,635,234 1,702,404,314 1,192,315,309 655,170,805 662,611,774 1,762,933,342 1,378,855,852 703,358,553 443,034,792 61,493,927,078 64,870,190,679 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NUMBER OF UNITS IN ISSUE 32,780,722.8498 28,238,744.9219 96,490,442.1614 61,403,363.1910 61,596,015.4835 60,977,565.2973 163,787,335.7211 123,109,827.4485 63,832,100.8190 41,926,112.7889 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NET ASSET VALUE PER UNIT 12.4836 14.6477 17.6432 19.4177 10.6365 10.8664 10.7635 11.2002 11.0188 10.5670 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

26



STATEMENT OF CHANGES IN NET ASSETS - CONSTITUENT FUNDS


BOC-Prudential BOC-Prudential BOC-Prudential BOC-Prudential BOC-Prudential

Growth Fund Balanced Fund Stable Fund Global Equity Fund Asia Equity Fund

2020 2019 2020 2019 2020 2019 2020 2019 2020 2019


BALANCE BROUGHT FORWARD 11,215,839,989 11,548,539,580 6,695,240,164 6,812,935,058 8,017,481,130 8,276,342,940 3,990,114,877 3,772,590,546 2,523,540,693 2,567,080,211

UNITS ISSUED 1,009,038,190 1,029,976,786 657,058,081 673,611,705 716,040,129 725,813,620 562,727,007 542,155,994 336,461,987 349,826,381

UNITS REDEEMED (829,387,419) (847,592,641) (515,746,960) (487,907,304) (699,915,931) (668,770,391) (307,211,301) (279,464,436) (183,000,124) (169,256,828)

SWITCHING IN 449,796,575 397,616,515 449,447,878 444,965,394 888,612,533 766,371,814 521,391,232 297,089,938 459,197,358 380,916,306

SWITCHING OUT (749,645,439) (597,789,427) (611,798,398) (569,151,946) (987,863,834) (868,305,035) (567,561,407) (379,006,427) (555,980,386) (482,923,586) _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

11,095,641,896 11,530,750,813 6,674,200,765 6,874,452,907 7,934,354,027 8,231,452,948 4,199,460,408 3,953,365,615 2,580,219,528 2,645,642,484

(DECREASE)/INCREASE IN NET

ASSETS ATTRIBUTABLE

TO UNITHOLDERS

FROM OPERATIONS (1,688,666,776) (314,910,824) (613,314,970) (179,212,743) (469,685,419) (213,971,818) (552,643,984) 36,749,262 (491,306,313) (122,101,791) _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

BALANCE CARRIED FORWARD 9,406,975,120 11,215,839,989 6,060,885,795 6,695,240,164 7,464,668,608 8,017,481,130 3,646,816,424 3,990,114,877 2,088,913,215 2,523,540,693 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NUMBER OF UNITS ISSUED 65,219,436.6373 63,978,943.4956 52,195,752.8972 53,232,048.0538 81,386,697.2112 76,654,857.0202 37,697,974.1145 30,181,946.3672 54,598,561.7214 49,878,580.2080 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NUMBER OF UNITS REDEEMED 71,221,640.1390 64,548,728.3213 53,479,406.9473 50,194,344.1899 85,907,331.2334 78,876,634.1544 30,882,839.4908 23,704,998.0236 50,960,082.4040 44,521,894.4337 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

27



STATEMENT OF CHANGES IN NET ASSETS - CONSTITUENT FUNDS (continued)


BOC-Prudential


China Equity Fund Hong Kong Equity Fund Japan Equity Fund Bond Fund Conservative Fund Tracker Fund

2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019


BALANCE BROUGHT FORWARD 6,186,931,178 6,393,425,990 8,098,956,595 7,967,166,557 436,678,973 404,397,882 2,209,780,802 2,095,350,390 10,351,556,036 9,100,859,438 1,053,617,281 914,987,857

UNITS ISSUED 766,761,208 823,969,516 1,034,240,380 1,062,937,186 73,520,188 70,876,570 337,163,032 303,977,198 1,166,128,216 1,156,161,458 237,700,639 233,733,407

UNITS REDEEMED (442,804,815) (424,891,057) (585,790,235) (546,111,703) (32,584,158) (30,408,229) (199,803,382) (167,287,892) (1,017,320,622) (911,337,485) (94,313,017) (70,988,157)

SWITCHING IN 2,024,296,326 1,883,888,610 3,306,132,548 2,511,704,772 1,511,172,418 1,368,503,386 1,351,474,996 605,300,207 6,118,087,571 5,047,124,557 737,695,515 491,043,608

SWITCHING OUT (2,226,977,534) (2,052,163,414) (3,336,667,786) (2,655,341,874) (1,571,185,704) (1,350,447,278) (1,199,471,196) (603,955,548) (5,861,865,189) (4,161,644,558) (726,142,178) (502,863,519) _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

6,308,206,363 6,624,229,645 8,516,871,502 8,340,354,938 417,601,717 462,922,331 2,499,144,252 2,233,384,355 10,756,586,012 10,231,163,410 1,208,558,240 1,065,913,196


ASSETS ATTRIBUTABLE

TO UNITHOLDERS

FROM OPERATIONS (763,697,851) (437,298,467) (1,346,211,092) (241,398,343) (38,540,260) (26,243,358) 39,798,780 (23,603,553) 159,835,913 120,392,626 (165,575,149) (12,295,915) _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

BALANCE CARRIED FORWARD 5,544,508,512 6,186,931,178 7,170,660,410 8,098,956,595 379,061,457 436,678,973 2,538,943,032 2,209,780,802 10,916,421,925 10,351,556,036 1,042,983,091 1,053,617,281 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NUMBER OF UNITS ISSUED 326,800,755.3385 308,883,494.6420 102,296,236.4245 81,886,151.2616 183,833,973.7145 161,183,994.3402 121,740,743.1216 67,647,850.1209 609,275,655.6527 526,888,749.3912 69,789,313.2895 51,236,027.1735 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NUMBER OF UNITS REDEEMED 313,084,210.7530 282,663,302.4387 91,877,585.1751 73,247,143.3810 185,052,689.3975 153,492,759.6256 101,023,169.1065 57,428,453.0133 575,319,778.2214 430,896,789.7862 58,584,861.0146 40,584,648.2479 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

28



STATEMENT OF CHANGES IN NET ASSETS - CONSTITUENT FUNDS (continued)




Tracking Fund Index Tracking Fund Money Market Fund Accumulation Fund Age 65 Plus Fund Total

2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019


BALANCE BROUGHT FORWARD 413,635,234 380,332,248 1,192,315,309 894,102,541 662,611,774 630,663,697 1,378,855,852 905,455,287 443,034,792 267,469,332 64,870,190,679 62,931,699,554

UNITS ISSUED 99,863,102 90,856,127 367,170,680 259,139,857 125,523,966 134,183,202 607,242,810 529,090,518 195,513,993 166,631,789 8,292,153,608 8,152,941,314

UNITS REDEEMED (40,582,939) (29,268,314) (125,253,418) (70,050,466) (64,623,222) (58,032,443) (143,574,184) (93,460,122) (60,232,551) (37,928,712) (5,342,144,278) (4,892,756,180)

SWITCHING IN 236,962,016 169,572,452 2,239,114,334 1,145,621,728 351,248,588 364,700,322 481,960,676 253,551,978 782,699,084 216,585,002 21,909,289,648 16,344,556,589

SWITCHING OUT (223,895,185) (192,927,993) (1,743,459,388) (1,101,057,242) (405,094,250) (398,763,665) (466,292,681) (246,908,848) (675,389,093) (181,306,229) (21,909,289,648) (16,344,556,589) _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

485,982,228 418,564,520 1,929,887,517 1,127,756,418 669,666,856 672,751,113 1,858,192,473 1,347,728,813 685,626,225 431,451,182 67,820,200,009 66,191,884,688


ASSETS ATTRIBUTABLE

TO UNITHOLDERS

FROM OPERATIONS (76,759,753) (4,929,286) (227,483,203) 64,558,891 (14,496,051) (10,139,339) (95,259,131) 31,127,039 17,732,328 11,583,610 (6,326,272,931) (1,321,694,009) _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

BALANCE CARRIED FORWARD 409,222,475 413,635,234 1,702,404,314 1,192,315,309 655,170,805 662,611,774 1,762,933,342 1,378,855,852 703,358,553 443,034,792 61,493,927,078 64,870,190,679 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NUMBER OF UNITS ISSUED 22,529,268.8449 17,936,184.6248 127,714,973.0790 74,551,214.4098 44,548,032.4198 46,300,282.5107 93,485,217.9550 71,558,341.9079 88,507,735.4907 37,303,364.1030 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________

NUMBER OF UNITS REDEEMED 17,987,290.9170 15,392,770.7189 92,627,894.1086 62,645,183.9169 43,929,582.2336 42,495,402.5404 52,807,709.6824 31,138,595.8803 66,601,747.4606 21,342,410.6086 _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________



NOTES TO THE FINANCIAL STATEMENTS


29

1. GENERAL

BOC-Prudential Easy-Choice Mandatory Provident Fund Scheme (the "Scheme") is a mandatory

provident fund scheme constituted by a master trust deed dated 27 January 2000 and its subsequent

deeds of amendment governed by the laws of the Hong Kong Special Administrative Region of the

People's Republic of China. The Scheme is designed to provide retirement benefits to the members

of the Scheme.

The Scheme consists of sixteen constituent funds, namely BOC-Prudential Growth Fund (the "Growth

Fund"), BOC-Prudential Balanced Fund (the "Balanced Fund"), BOC-Prudential Stable Fund (the

"Stable Fund"), BOC-Prudential Global Equity Fund (the "Global Equity Fund"), BOC-Prudential

Asia Equity Fund (the "Asia Equity Fund"), BOC-Prudential China Equity Fund (the "China Equity

Fund"), BOC-Prudential Hong Kong Equity Fund (the "Hong Kong Equity Fund"), BOC-Prudential

Japan Equity Fund (the "Japan Equity Fund"), BOC-Prudential Bond Fund (the "Bond Fund"), BOC-

Prudential MPF Conservative Fund (the "MPF Conservative Fund"), BOC-Prudential CSI HK 100

Tracker Fund (the "CSI HK 100 Tracker Fund"), BOC-Prudential European Index Tracking Fund (the

"European Index Tracking Fund"), BOC-Prudential North America Index Tracking Fund (the "North

America Index Tracking Fund"), BOC-Prudential MPF RMB & HKD Money Market Fund (the "MPF

RMB & HKD Money Market Fund"), BOC-Prudential Core Accumulation Fund (the "Core Accumulation Fund") and BOC-Prudential Age 65 Plus Fund (the "Age 65 Plus Fund") (collectively

the "Constituent Funds").

The Scheme introduced two new constituent funds on 1 April 2017, namely Core Accumulation Fund

and Age 65 Plus Fund, in relation to the Default Investment Strategy (“DIS”), a standardized and fee-

controlled investment solution for scheme members. In accordance with the Ordinance, the payments

charged to DIS constituent funds are disclosed in note 15.

The financial statements are presented in Hong Kong dollars ("HK$"), which is also the functional

currency of the Scheme.

2.1 BASIS OF PREPARATION

These financial statements have been prepared in accordance with Hong Kong Financial Reporting

Standards ("HKFRSs") (which include all Hong Kong Financial Reporting Standards, Hong Kong

Accounting Standards ("HKASs") and Interpretations) issued by the Hong Kong Institute of Certified

Public Accountants ("HKICPA").

The financial statements have been prepared on a historical cost basis, except for financial assets and

liabilities at fair value through profit or loss that have been measured at fair value. The

financial statements are presented in Hong Kong Dollars (“HK$”) and all values are rounded to the

nearest HK$, except where otherwise indicated.





30

2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The Scheme adopted the following standard for the first time for the current year’s financial statements.

HK(IFRIC)-Int 23 Uncertainty over Income Tax Treatments

The interpretation addresses the accounting for income taxes when tax treatments involve uncertainty

that affects the application of HKAS 12. The interpretation does not apply to taxes or levies outside

the scope of HKAS 12, nor does it specifically include requirements relating to interest and penalties

associated with uncertain tax treatments. The interpretation specifically addresses the following:

• Whether the Scheme considers uncertain tax treatments separately

• The assumptions the Scheme makes about the examination of tax treatments by taxation authorities

• How the Scheme determines taxable profits (tax losses), tax bases, unused tax losses, unused tax credits and tax rates

• How the Scheme considers changes in facts and circumstances

The interpretation has had no impact on the financial position or performance of the Scheme.

2.3 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS

In the opinion of the Trustee, the standards and interpretations that are issued, but not yet effective,

up to the date of issuance of the Scheme’s financial statements, will clearly not impact these financial

statements. The Scheme intends to adopt these standards, if applicable, when they become effective.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies are set out below.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date, regardless of whether that price is

directly observable or estimated using another valuation technique. In estimating the fair value of an

asset or a liability, the Trustee takes into account the characteristics of the asset or liability if market

participants would take those characteristics into account when pricing the asset or liability at the

measurement date. Fair value for measurement and/or disclosure purposes in these financial

statements is determined on such a basis.





31

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value measurement (continued)

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2

or 3 based on the degree to which the inputs to the fair value measurements are observable and the

significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 − Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 − Valuation techniques for which the lowest level input that is significant to the fair value

measurement is directly or indirectly observable

Level 3 − Valuation techniques for which the lowest level input that is significant to the fair value

measurement is unobservable

Revenue recognition

Interest income from a financial asset is recognised when it is probable that the economic benefits will

flow to the Scheme and the amount of income can be measured reliably. Interest income is accrued

on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,

which is the rate that exactly discounts the estimated future cash receipts through the expected life of

the financial asset to that asset's net carrying amount on initial recognition.

Dividend income is recognised in the revenue statement - Constituent Funds when the rights to receive

payment have been established, provided that it is probable that the economic benefits will flow to the

Constituent Funds and the amount can be measured reliably.

Management fee rebate and trustee fee rebate are recognised in the revenue statement - Constituent

Funds when the rights to receive payment have been established, provided that it is probable that the

economic benefits will flow to the Constituent Funds and the amount can be measured reliably.

Financial instruments

Financial assets and financial liabilities are recognised in the statement of net assets available for

benefits - Scheme and the statement of assets and liabilities – Constituent Funds, when the Scheme

becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are

directly attributable to the acquisition or issue of financial assets or financial liabilities at fair value

through profit or loss are recognised immediately in the statement of changes in net assets available

for benefits - Scheme and the revenue statement - Constituent Funds. Transaction costs that are

directly attributable to the acquisition or issue of financial assets and financial liabilities (other than

financial assets and financial liabilities at fair value through profit or loss) are added to or deducted

from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.





32


Financial instruments (continued)

Financial assets

Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortised cost and

fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual

cash flow characteristics and the Scheme’s business model for managing them. The Scheme initially

measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through

profit or loss, transaction costs.

In order for a financial asset to be classified and measured at amortised cost or fair value through

other comprehensive income, it needs to give rise to cash flows that are solely payments of principal

and interest ("SPPI") on the principal amount outstanding.

The Scheme’s business model for managing financial assets refers to how it manages its financial

assets in order to generate cash flows. The business model determines whether cash flows will result

from collecting contractual cash flows, selling the financial assets, or both.

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the

date that the Scheme commits to purchase or sell the asset. Regular way purchases or sales are

purchases or sales of financial assets that require delivery of assets within the period generally

established by regulation or convention in the marketplace.

As at 31 March 2020, all the investments in constituent funds, approved pooled investment funds,

approved index-tracking collective investment schemes, foreign currency forward contracts and

quoted debt securities are classified, at initial recognition, as financial assets through profit or loss

while amount due from constituent funds, amounts due from brokers, interest receivables, accounts

receivable on fund switching, contributions receivable, contribution in transit, bank deposits, bank

balances and other receivables are classified as financial assets at amortised cost.





33



Financial assets (continued)

Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows:

Financial assets at amortised cost The Scheme measures financial assets at amortised cost if both of the following conditions are met:

• The financial asset is held within a business model with the objective to hold financial assets

in order to collect contractual cash flows.

• The contractual terms of the financial asset give rise on specified dates to cash flows that are

solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest method (see

accounting policy on the description for effective interest method at financial liabilities below) and

are subject to impairment (see accounting policy on impairment of financial assets below). Gains and

losses are recognised in the revenue statement - Constituent Funds when the asset is derecognised,

modified or impaired. Interest revenue is recognised in the revenue statement - Constituent Funds for

all interest-bearing financial instruments using the effective interest method.

Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading, financial

assets designated upon initial recognition at fair value through profit or loss, or financial assets

mandatorily required to be measured at fair value. Financial assets are classified as held for trading if

(a) they are acquired for the purpose of selling or repurchasing in the near term, (b) on initial

recognition, it is part of a portfolio of identified financial instruments that are managed together for

which, there is evidence of a recent actual pattern of short-term profit-taking, or (c) it is a derivative

(except for a derivative that is a financial guarantee contract or a designed and effective hedging

instruments). Financial assets with cash flows that are not solely payments of principal and interest

are classified and measured at fair value through profit or loss, irrespective of the business model.

Notwithstanding the criteria for debt instruments to be classified at amortised cost or at fair value

through other comprehensive income, as described above, debt instruments may be designated at fair

value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an

accounting mismatch. All investments in Constituent Funds by the Scheme, and all investments in approved pooled

investment funds/approved index-tracking collective investment schemes and interest-bearing

securities by the Constituent Funds are classified as financial assets designated at FVTPL.

Investments are recognised on a trade date basis and are initially measured at fair value. At the end

of the reporting period subsequent to initial recognition, investments at FVTPL are re-measured at

fair value, with changes in fair value recognised directly in the statement of changes in net assets

available for benefits - Scheme and the revenue statement - Constituent Funds in the year in which

they arise. The fair values of investments are based on their quoted market prices at the reporting date

without any deduction for estimated future selling costs.





34



Financial liabilities

Financial liabilities are classified as either financial liabilities in accordance with the substance of the

contractual arrangements and the definitions of a financial liability.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial liability and

allocating interest expense over the relevant period. The effective interest rate is the rate that exactly

discounts estimated future cash payments (including all fees and points paid or received that form an

integral part of the effective interest rate, transaction costs and other premiums or discounts) through

the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying

amount on initial recognition.

Interest expense is recognised on an effective interest basis.

Net assets attributable to schemeholders

The Scheme provides the schemeholders with the right to get their benefits for cash equal to their

proportionate share of the net assets value of the Scheme through their interests in the Constituent

Funds under certain circumstances, in accordance with the Mandatory Provident Fund Schemes

Ordinance (the "MPFSO"). Accordingly, net assets attributable to schemeholders are classified as

financial liabilities.

The liabilities to schemeholders are presented on the statement of net assets available for benefits -

Scheme as "net assets attributable to schemeholders" and are determined based on the aggregate of

residual assets of the Scheme after deducting other liabilities.

Net assets attributable to unitholders

The units issued by the Constituent Funds provide the unitholders with the right to redeem their units

for cash equal to their proportionate share of the net asset value of the Constituent Funds.

The liabilities to unitholders are presented on the statement of assets and liabilities as "net assets

attributable to unitholders" and are determined based on the residual assets of the Constituent Funds

after deducting other liabilities of the Constituent Funds.

Other financial liabilities

Other financial liabilities, including amounts due to Constituent Funds, benefits payable, forfeiture

payable and other payables of the Scheme, accounts payable, accounts payable on fund switching,

redemptions payable and amount due to brokers of the Constituent Funds, are subsequently measured

at amortised cost, using the effective interest method.





35



Derecognition

The Scheme derecognises a financial asset only when the contractual rights to the cash flows from the

asset expire, or when it transfers the financial asset and substantially all the risks and rewards of

ownership of the asset to another entity. If the Scheme neither transfers nor retains substantially all

the risks and rewards of ownership and continues to control the transferred asset, the Scheme continues

to recognise the asset to the extent of its continuing involvement and recognises an associated liability.

If the Scheme retains substantially all the risks and rewards of ownership of a transferred financial

asset, the Scheme continues to recognise the financial asset and also recognises a collateralised

borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount

and the sum of the consideration received and receivable is recognised in the statement of changes in

net assets available for benefits - Scheme and the revenue statement - Constituent Funds.

The Scheme and the Constituent Funds use the weighted average cost method to determine realised

gains and losses on derecognition.

The Scheme derecognises financial liabilities, when and only when, the Scheme's obligations are

discharged, cancelled or expire. The difference between the carrying amount of the financial liability

derecognised and the consideration paid and payable is recognised in the statement of changes in net

assets available for benefits - Scheme and the revenue statement - Constituent Funds.

Impairment of financial assets

The Scheme recognises an allowance for ECLs for all debt instruments not held at fair value through

profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance

with the contract and all the cash flows that the Scheme expects to receive, discounted at an

approximation of the original effective interest rate. The expected cash flows will include cash flows

from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

General approach

ECLs are recognised in two stages. For credit exposures for which there has not been a significant

increase in credit risk since initial recognition, ECLs are provided for credit losses that result from

default events that are possible within the next 12 months (a 12-month ECL). For those credit

exposures for which there has been a significant increase in credit risk since initial recognition, a loss

allowance is required for credit losses expected over the remaining life of the exposure, irrespective

of the timing of the default (a lifetime ECL).





36



Impairment of financial assets (continued)

Simplified approach

Since the Scheme holds short-term receivables which do not contain a significant financing

component or applies the practical expedient of not adjusting the effect of a significant financing

component, the Scheme applies an approach similar to the simplified approach in calculating ECLs.

Under the simplified approach, the Scheme does not track changes in credit risk, but instead

recognises a loss allowance based on lifetime ECLs at each reporting date. The Scheme has

established a provision matrix that is based on its historical credit loss experience, adjusted for

forward-looking factors specific to the debtors and the economic environment.

Derivative financial instruments

Derivative financial instruments, which include forward foreign currency contracts, are initially

recognised at fair value at the date when a derivative contract is entered into and are subsequently

remeasured to their fair value at the end of the reporting period. The resulting gain or loss is

recognised in the revenue statement - Constituent Funds.

Scheme contributions and benefits

Contributions are accounted for on an accrual basis. Benefits are accounted for on an accrual basis to

the extent of benefits becoming payable prior to the financial year end. Benefits payments represent

all valid claims paid or payable in respect of the year.

Issue and redemption of units in Constituent Funds

Issue and redemption of units are accounted for on a transaction date basis.

Forfeitures

Forfeitures arise from the employers' additional voluntary contributions which are unvested and

belong to the employers upon termination of employment. Forfeitures which have not been

designated for the benefit of existing members and which have not been returned to the employers are

treated as liabilities of the Scheme.





37


Foreign currencies

Transactions in currencies other than the functional currency of the Scheme (foreign currencies) are

recorded in the respective functional currency (i.e. the currency of the primary economic environment

in which the Scheme operates) at the rates of exchanges prevailing on the dates of the transactions.

At the end of the reporting period, monetary items denominated in foreign currencies are retranslated

at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in

foreign currencies are retranslated at the rates prevailing on the date when the fair value was

determined.

Exchange differences arising from the settlement of monetary items and retranslation of monetary

items, are recognised in the statement of changes in net assets available for benefits – Scheme and the

revenue statement – Constituent Funds in the period in which they arise. Exchange differences arising

from the retranslation of non-monetary items carried at fair value are included in statement of changes

in net assets available for benefits – Scheme and the revenue statement – Constituent Funds for the

period.

Structured entities

A structured entity is an entity that has been designed so that voting or similar rights are not the

dominant factor in deciding who controls the entity, such as when any voting rights relate to

administrative tasks only and the relevant activities are directed by means of contractual arrangements.

A structured entity often has some or all of the following features or attributes; (a) restricted activities,

(b) a narrow and well-defined objective, such as to provide investment opportunities for investors by

passing on risks and rewards associated with the assets of the structured entity to investors, (c)

insufficient equity to permit the structured entity to finance its activities without subordinated

financial support and (d) financing in the form of multiple contractually linked instruments to

investors that create concentrations of credit or other risks (tranches).

The Scheme and Constituent Funds consider all investments in approved pooled investment

funds/approved index-tracking collective investment schemes (collectively the “Investee Funds”)

unconsolidated structured entities. The Investee Funds are managed by the same asset manager and

apply various investment strategies to accomplish their respective investment objectives. The Investee

Funds finance their operations by issuing redeemable units which are puttable at the holder’s option

and entitles the holder to a proportional stake in the respective funds’ net assets. The Constituent

Funds hold redeemable units in its Investee Funds.

The Constituent Funds’ interest in its Investee Funds are the fair value of its investment in Investee

Funds as at the year end date and the related net gains/(losses) recognised in profit or loss during the

year.





38

4. FINANCIAL INSTRUMENTS

Categories of financial instruments of the Scheme

2020 2019

HK$ HK$

Financial assets

Designated at FVTPL investments 61,493,927,078 64,870,190,679

At amortised cost (including cash and cash equivalents) 553,817,124 549,646,946 _____________ _____________ _____________ _____________


Other financial liabilities 61,802,604 61,572,863

Net assets attributable to schemeholders 61,985,941,598 65,358,264,762 _____________ _____________ _____________ _____________

Categories of financial instruments of the Constituent Funds Growth Fund

2020 2019

HK$ HK$

Financial assets





Derivative financial liabilities - 14,916

Net assets attributable to unitholders 9,406,975,120 11,215,839,989 _____________ _____________ _____________ _____________

Balanced Fund

2020 2019

HK$ HK$

Financial assets


Derivative financial assets 203,292 -










39

4. FINANCIAL INSTRUMENTS (continued) Categories of financial instruments of the Constituent Funds (continued)

Stable Fund

2020 2019

HK$ HK$

Financial assets








Global Equity Fund

2020 2019

HK$ HK$

Financial assets


Derivative financial assets - 261,037




Derivative financial liabilities 713,420 -


Asia Equity Fund

2020 2019

HK$ HK$

Financial assets


Derivative financial assets 1,430,254 -










40


China Equity Fund

2020 2019

HK$ HK$

Financial assets






Hong Kong Equity Fund

2020 2019

HK$ HK$

Financial assets






Japan Equity Fund

2020 2019

HK$ HK$

Financial assets

Designated at FVTPL investments 377,517,073 384,722,147




Derivative financial liabilities 1,236,297 1,409,212

Net assets attributable to unitholders 379,061,457 436,678,973 _____________ _____________ _____________ _____________





41


Bond Fund

2020 2019

HK$ HK$

Financial assets



At amortised cost (including cash and cash equivalents) 33,916,161 20,332,770 _____________ _____

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