sun life mpf comprehensive schemesun life mpf comprehensive scheme year ended 31 december 2019 ....

Sun Life MPF Comprehensive Scheme

31 December 2019

Sun Life MPF Comprehensive Scheme Year ended 31 December 2019

Content Page(s) Scheme report 1 - 9 Investment report 10 - 73 Independent auditor’s report 74 - 77 Independent auditor’s assurance report 78 - 81

Statement of assets and liabilities attributable to members 82 - 84

Statement of comprehensive income 85 - 87

Statement of changes in net assets attributable to members 88 - 90

Cash flow statement 91

Notes to the financial statements 92 - 127


1

Scheme Report for the year ended 31 December 2019 Sun Life Pension Trust Limited (the “Trustee”) has pleasure in presenting the annual report of Sun Life MPF Comprehensive Scheme (the “Scheme”) for the year ended 31 December 2019. The Scheme The Scheme is a master trust scheme set up for the purpose of providing benefits to members in accordance with the Mandatory Provident Fund Schemes Ordinance (the “Ordinance”). The Scheme was established by a trust deed dated 31 January 2000, as amended (the “Trust Deed”). Under the Trust Deed, the Trustee is required to establish and maintain separate constituent funds in which contributions are invested. The Trustee has established and maintained twelve constituent funds in respect of the Scheme for the year ended 31 December 2019. The constituent funds are only available for investment by members of the Scheme. Each constituent fund (except Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio which invests directly in permissible investments and Sun Life MPF Comprehensive Scheme US & Hong Kong Equity Portfolio which invests in two/more unit trust approved pooled investment funds (“APIFs”) and/or two or more approved index-tracking collective investment schemes (“ITCISs”)) primarily invests its assets in a single approved pooled investment fund (“APIF”), which is either a unit trust or an insurance policy. Each constituent fund has a separate and distinct investment objective and policy. The Scheme together with its constituent funds have been registered with and approved by the Mandatory Provident Fund Schemes Authority (the “MPFA” or “Authority”). As at 31 December 2019, the Scheme had twelve constituent funds as follows: - Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio - Sun Life MPF Comprehensive Scheme Capital Guaranteed Portfolio - Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio - Sun Life MPF Comprehensive Scheme Stable Portfolio - Sun Life MPF Comprehensive Scheme Stable Growth Portfolio - Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio - Sun Life MPF Comprehensive Scheme Balanced Growth Portfolio - Sun Life MPF Comprehensive Scheme Growth Portfolio - Sun Life MPF Comprehensive Scheme International Equity Portfolio - Sun Life MPF Comprehensive Scheme Asian Equity Portfolio - Sun Life MPF Comprehensive Scheme Hong Kong Equity Portfolio - Sun Life MPF Comprehensive Scheme US & Hong Kong Equity Portfolio


2

Scheme report for the year ended 31 December 2019 (continued) Financial development Contributions received and receivable for the year ended 31 December 2019 by the Scheme were HK$247,233,943. Benefits paid and payable and transfers out to other schemes (exclusive of forfeitures) for the year ended 31 December 2019 amounted to HK$222,915,071. The Scheme has recognised a net gain of HK$269,901,548 for the year ended 31 December 2019, arising mainly from fair value gains on investments in constituent funds. Changes during the year 1. Management fee breakdown

With effect from 31 January 2019, the Explanatory Memorandum has been updated to reflect the breakdown of the management fees payable in respect of each constituent fund. The disclosure of the management fee breakdown does not involve changing the overall level of management fees of the constituent funds or the structure of fees and charges of the Scheme. The disclosure of the management fee breakdown is to enhance transparency.

2. Change of address of the Custodian With effect from 8 July 2019, the address of the Custodian has been changed to 41/F & 42/F, One Taikoo Place, Taikoo Place, 979 King’s Road, Quarry Bay, Hong Kong.

3. Change to investment policies of the underlying funds

With effect from 13 September 2019, the investment policies of the underlying funds invested by Sun Life MPF Comprehensive Scheme Stable Portfolio, Sun Life MPF Comprehensive Scheme Stable Growth Portfolio, Sun Life MPF Comprehensive Scheme Balanced Growth Portfolio and Sun Life MPF Comprehensive Scheme Growth Portfolio (“Underlying Fund”) have been revised to allow the relevant Underlying Fund to invest its non-cash assets in index-tracking collective investment schemes approved by the MPFA (“ITCIS”). This would provide greater flexibility to the investment managers of the relevant Underlying Fund in achieving the investment objective of the relevant Underlying Fund.


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Scheme report for the year ended 31 December 2019 (continued) Changes during the year (continued) 4. Clarification to the investment policies of Sun Life MPF Comprehensive Scheme Asian

Equity Portfolio (the “Asian Equity Portfolio”) and Sun Life MPF Comprehensive Scheme Hong Kong Equity Portfolio (the “HK Equity Portfolio”)

With effect from 13 September 2019, the investment policy of the respective Underlying Fund invested by Asian Equity Portfolio and HK Equity Portfolio have been enhanced to clarify that the Underlying Fund may invest up to 10% of its net asset value in shares listed on a stock exchange that is not an approved stock exchange as defined in the Mandatory Provident Fund Schemes (General) Regulation, including without limitation shares of companies listed on the stock exchange(s) of the People’s Republic of China (“China A-Shares”) via the Stock Connect programme (the “Stock Connect”). In addition, clarification is made to reflect that the Underlying Fund invested by the HK Equity Portfolio may allocate up to 10% of its assets to equites other than Hong Kong equities. Further, investment in China-A Shares via the Stock Connect has been subject to additional risks.

5. Change of address of the Trustee and the Sponsor

With effect from 2 January 2020, the address of the Trustee and the Sponsor have been changed to 16/F, Cheung Kei Center Tower A, No. 18 Hung Luen Road, Hunghom, Kowloon, Hong Kong.

6. Other changes

Some other changes, apart from the above specified, are summarized as follows: • The provision in relation to disclosure of the flat fees for valuation and preparation of

financial statements to Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio is enhanced.

• The handling of withdrawal of the accrued benefits from voluntary contributions by

employed member is clarified.

• With effect from 1 January 2020, the disclosure to the Explanatory Memorandum (“EM”) has been amended to comply with the SFC Code on MPF Products.

• With effect from 31 March 2020, the EM has been renamed to an MPF Scheme

Brochure (“Brochure”), the previous issued addenda to the EM have been consolidated into the relevant parts of the Brochure, the contents of the EM have been rearranged in the Brochure to comply with the requirements in Part G of the Code on Disclosure for MPF Investment Funds, and various editorial amendments have been made to the Brochure to reflect the preceding changes.


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Scheme report for the year ended 31 December 2019 (continued) Directory of parties Details of the Trustee and the parties appointed by the Trustee for managing the Scheme during the year and up to the date of this report are set out below. Trustee Sun Life Pension Trust Limited

16/F, Cheung Kei Center Tower A No. 18 Hung Luen Road, Hunghom, Kowloon, Hong Kong

Sponsor of the Scheme1 Sun Life Hong Kong Limited


Guarantor for the approved pooled investment fund invested by Sun Life MPF Comprehensive Scheme Capital Guaranteed Portfolio

FWD Life Insurance Company (Bermuda) Limited 28/F FWD Financial Centre 308 Des Voeux Road Central Hong Kong


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Scheme report for the year ended 31 December 2019 (continued) Directory of parties (continued) Administrator of the Scheme1 BestServe Financial Limited

10/F, One Harbourfront 18 Tak Fung Street Hunghom, Kowloon Hong Kong

Custodian RBC Investor Services Trust Hong Kong Limited

41/F & 42/F, One Taikoo Place, Taikoo Place, 979 King’s Road Quarry Bay, Hong Kong

Auditor KPMG

8th Floor, Prince's Building 10 Chater Road, Central Hong Kong

1 Associates of the Trustee Investment Managers Schroder Investment Management (Hong Kong) Limited Suite 3301, Level 33 Two Pacific Place 88 Queensway Hong Kong Being the investment manager of the Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio and the relevant underlying approved pooled investment funds that the following constituent funds of the Scheme have invested in: 1. Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio 2. Sun Life MPF Comprehensive Scheme Stable Portfolio 3. Sun Life MPF Comprehensive Scheme Stable Growth Portfolio 4. Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio 5. Sun Life MPF Comprehensive Scheme Balanced Growth Portfolio 6. Sun Life MPF Comprehensive Scheme Growth Portfolio 7. Sun Life MPF Comprehensive Scheme Asian Equity Portfolio 8. Sun Life MPF Comprehensive Scheme Hong Kong Equity Portfolio


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Scheme report for the year ended 31 December 2019 (continued) Directory of parties (continued) Investment Managers (continued) State Street Global Advisors Asia Limited 68/F, Two International Finance Centre 8 Finance Street Central, Hong Kong Being the investment manager of the Sun Life MPF Comprehensive Scheme US & Hong Kong Equity Portfolio. FIL Investment Management (Hong Kong) Limited Level 21, Two Pacific Place 88 Queensway, Admiralty Hong Kong Being the investment manager of the underlying approved pooled investment fund that the Sun Life MPF Comprehensive Scheme International Equity Portfolio invested in. FWD Life Insurance Company (Bermuda) Limited 28/F, FWD Financial Centre 308 Des Voeux Road Central Hong Kong Being the investment manager of the insurance policy approved pooled investment fund that the Sun Life MPF Comprehensive Scheme Capital Guaranteed Portfolio invested in.


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Scheme report for the year ended 31 December 2019 (continued) Directors of the Trustee The directors of the Trustee during the year and up to the date of this report are as follows: Directors Address LEE Mei Yi


KWAN Hon Chung Gregory


YANG Judy


NGAN Kin Wa


YU Tin Yau Elvin (independent director)



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Scheme report for the year ended 31 December 2019 (continued) Directors of the Sponsor The directors can be contacted at the following address: 16/F, Cheung Kei Center Tower A No. 18 Hung Luen Road, Hunghom, Kowloon, Hong Kong During the year and up to the date of this report, the directors of the Sponsor are as follows: CHOU Chia Ling Niall Mario O’HARE Fabien Gerald JEUDY Jason Lee Clayton CARNE Stuart Edward HARRISON (appointed on 1 April 2019) Leo Michel GREPIN (appointed on 31 December 2019) Stuart John VALENTINE (resigned on 1 April 2019) Claude Alan ACCUM (resigned on 31 December 2019) Directors of the Administrator The directors can be contacted at the following address: 16/F, Cheung Kei Center Tower A No. 18 Hung Luen Road, Hunghom, Kowloon, Hong Kong During the year and up to the date of this report, the directors of the Administrator are as follows: LUK Kwai Sim Belinda Shiney PRASAD Jeffrey Todd KOZAN


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Scheme report for the year ended 31 December 2019 (continued)

Further information

Participating employers and scheme members can obtain further information about the Scheme and its operation from Sun Life Retirement Scheme Hotline 3183 1900.

For and on behalf of Sun Life Pension Trust Limited

Director Director

Hong Kong


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Investment report for the year ended 31 December 2019

Investment objectives and policies

Each constituent fund (except Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio which invests directly in permissible investments and Sun Life MPF Comprehensive Scheme US & Hong Kong Equity Portfolio which invests in two or more unit trust Approved Pooled Investment Funds (“APIFs”) and/or two or more approved Index-Tracking Collective Investment Schemes (“ITCISs”)) of the Scheme invests in an APIF which is either a unit trust or an insurance policy approved by the Mandatory Provident Fund Schemes Authority and authorised by the Securities and Futures Commission.

The constituent funds are classified into three categories in terms of risk level, namely low, medium or high risk. The risk level is an illustration of the amount of risks associated with the relevant constituent fund by reference to the type of investments made by the underlying APIF. The risk level is for reference only and is not an indication of the past or future performance of the constituent fund. The risk level is solely assessed by the Trustee on the assumption that equities are riskier than bonds, which in turn are riskier than cash. The actual risks associated with each constituent fund may differ from the projected risk level.

The common investment policies, which apply to all constituent funds of the Scheme, and the statement of investment objectives and policies for each constituent fund are as follows:

Common investment policies

- Each constituent fund, except Sun Life MPF Comprehensive Scheme MPF ConservativePortfolio (which invests directly in permissible investments) and Sun Life MPFComprehensive Scheme US & Hong Kong Equity Portfolio (which invests in two or moreunit trust APIFs and/or two or more approved ITCISs), invests its assets in a single APIFbut may also hold up to 5% of its assets in cash from time to time for ancillary purposessuch as for meeting redemption requests, or for defraying operating expenses.

- Except Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio, none of theother constituent funds has direct holdings of equities or bonds.

- None of the constituent funds will neither trade in futures or options nor lend securities.

- Each constituent fund is subject to the investment and borrowing restrictions in Schedule1 of the Mandatory Provident Fund Schemes (General) Regulation (the “GeneralRegulation”).


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Investment report for the year ended 31 December 2019 (continued)

Investment objectives and policies (continued)

Investment objectives and policies

Name of constituent fund

Investment objective of the constituent fund and the underlying APIF

Investment policy of the constituent fund or the underlying APIF

Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio

To provide a return, after administrative expenses, which matches or exceeds the Hong Kong dollar savings rate.

The fund is considered low risk.

The mix of the investments is 70%-100% in deposits and debt securities; 0%-30% in cash. It must hold 100% of its assets in Hong Kong dollar investments. The portfolio average remaining maturity must not exceed ninety days. It will not trade futures or options and will not engage in security lending.

Sun Life MPF Comprehensive Scheme Capital Guaranteed Portfolio

To provide capital security at the end of every 5 years and to seek long term capital appreciation. The return is expected to be stable and slightly in excess of Hong Kong inflation.

The fund is considered low risk.

The Capital Guaranteed Policy invests into the Schroder IPF Global Balanced Fund (the “Global Balanced Fund”) of the Schroder Institutional Pooled Funds, an APIF. The investment strategy of the Global Balanced Fund would include equities, bonds, and cash and cash equivalents. The current proposed asset allocation is Equities: 0%-33%, Bonds: 67%-95%, and Cash or cash equivalents: 0%-33% respectively. The investments are globally diversified but with a bias towards Hong Kong. It will hold a minimum of 67% of its assets in Hong Kong dollar investments at all times through direct holdings in equities, bonds and cash and/or through currency hedging. It will not trade futures or options and will not engage in security lending.


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Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio

To achieve stable growth by investing in a globally diversified manner. The fund is considered low risk.

Through its underlying investment, the Portfolio will hold 20% of its net assets in higher risk assets (such as global equities), with the remainder investing in lower risk assets (such as global fixed income and money market instruments). The asset allocation to higher risks assets may vary between 15% and 25% due to differing price movements of various equity and bond markets. It will hold a minimum of 30% of its assets in Hong Kong dollar investments at all times through investment in the underlying APIFs. It will not acquire any financial futures contracts or financial option contracts except for hedging purposes and will not engage in security lending.


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Sun Life MPF Comprehensive Scheme Stable Portfolio

To achieve a long term return in line with Hong Kong price inflation (as measured by the Consumer Price Index Type A). The fund is considered medium risk.

The principal underlying investments will be quoted securities, government and corporate bonds and cash deposits worldwide. It is thus globally diversified but is biased towards Hong Kong. The current proposed asset allocation is (1) Equities (15%-40%): Hong Kong (0%-20%), Asia ex Hong Kong ex Japan (0%-15%), the United States (0%-15%), Japan (0%-10%), Europe (0%-10%), Others (0%-5%), (2) Bonds (40%-70%): United States dollar (5%-60%), Global currencies ex the United States dollar ex Hong Kong dollar (5%-40%), Hong Kong dollar (0%-50%), (3) Cash or cash equivalents (0%-30%). It will hold a minimum of 30% of its assets in Hong Kong dollar investments at all times through investment in other Schroder managed funds and cash and/or through currency hedging. It will not engage in security lending but may trade in financial futures contracts or financial options contracts for hedging purposes only.


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Investment report for the year ended 31 December 2019 (continued) Investment objectives and policies (continued)




Sun Life MPF Comprehensive Scheme Stable Growth Portfolio

To achieve a long term return in excess of Hong Kong price inflation (as measured by the Consumer Price Index Type A). The fund is considered medium risk.

The principal underlying investments will be in quoted securities, government and corporate bonds and cash deposits worldwide. It is a globally diversified portfolio biased towards Hong Kong. The current proposed asset allocation is (1) Equities (30% - 60%): Hong Kong (5% - 30%), Asia ex Hong Kong ex Japan (0% - 15%), the United States (0% - 25%), Japan (0% - 15%), Europe (0% - 15%), Others (0% - 5%), (2) Bonds (20% - 60%): the United States dollar (5% - 55%), Global currencies ex the United States dollar ex Hong Kong dollar (5% - 60%), Hong Kong dollar (0% - 30%), (3) Cash or cash equivalents (0% - 20%). It will hold a minimum of 30% of its assets in Hong Kong dollar investments at all times through investment in other Schroder managed funds and cash and/or through currency hedging. It will not engage in security lending but may trade in financial futures contracts or financial options contracts for hedging purposes only.


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Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio

To achieve capital growth by investing in a globally diversified manner.

The fund is considered medium risk.

Through its underlying investment, the Portfolio will hold 60% of its net assets in higher risk assets (such as global equities), with the remainder investing in lower risk assets (such as global fixed income and money market instruments). The asset allocation to higher risks assets may vary between 55% and 65% due to differing price movements of various equity and bond markets. The Portfolio will hold a minimum of 30% of its assets in Hong Kong dollar investments at all times through investment in the underlying APIFs. The Portfolio will not acquire any financial futures contracts or financial option contracts except for hedging purposes and will not engage in security lending.


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Sun Life MPF Comprehensive Scheme Balanced Growth Portfolio

To achieve a long term return in excess of salary inflation in Hong Kong (as indicated by the Hong Kong Monthly Digest of Statistics as published by the Census and Statistics Department of the Government of Hong Kong Special Administrative Region). The fund is considered high risk.

The principal underlying investments will be in quoted securities, government and corporate bonds and cash deposits worldwide. It is thus globally diversified but is biased towards Hong Kong. The current proposed asset allocation is (1) Equities (45%-85%): Hong Kong (10%-40%), Asia ex Hong Kong ex Japan (0%-25%), the United States (5%-30%), Japan (0%-20%), Europe (0%-25%), Others (0%-10%), (2) Bonds (0%-40%): United States dollar (0%-25%), Global currencies ex United States dollar ex Hong Kong dollar (0%-40%), HK dollar (0%-20%), (3) Cash or cash equivalents (0%-20%). It will hold a minimum of 30% of its assets in Hong Kong dollar investments at all times through investment in other Schroder managed funds and cash and/or through currency hedging. It will not engage in security lending but may trade in financial futures contracts or financial options contracts for hedging purposes only.


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Sun Life MPF Comprehensive Scheme Growth Portfolio

To achieve a long term return in excess of salary inflation in Hong Kong (as indicated by the Hong Kong Monthly Digest of Statistics as published by the Census and Statistics Department of the Government of Hong Kong Special Administrative Region). The fund is considered high risk.

The principal underlying investments will be in quoted securities, government and corporate bonds and cash deposits worldwide. It is a globally diversified portfolio biased towards Hong Kong. The current proposed asset allocation of the portfolio is (1) Equities (60% - 100%): Hong Kong (0% - 50%), Asia ex Hong Kong ex Japan (0% - 30%), the United States (0% - 40%), Japan (0% - 20%), Europe (0% - 30%), Others (0% - 5%), (2) Bonds (0% - 20%): United States dollar (0% - 15%), Global currencies ex United States dollar ex Hong Kong dollar (0% - 20%), Hong Kong dollar (0% - 10%), (3) Cash or cash equivalents (0% - 30%). It will hold a minimum of 30% of its assets in Hong Kong dollar investments at all times through investment in other Schroder managed funds and cash and/or through currency hedging. It will not engage in security lending but may trade in financial futures contracts or financial options contracts for hedging purposes only.


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Sun Life MPF Comprehensive Scheme International Equity Portfolio

To focus investment into the global equity markets, to produce returns that are related to those achieved on the major world stock market indices and to manage the volatility of returns in the short term. The fund is considered high risk.

The indicative asset allocation is as follows: Equities 100%, Bonds 0%, Cash 0%. It should be noted that the actual portfolio will at times vary considerably as market, political, structural, economic and other conditions change. It may engage in security lending and repurchase transactions and may also acquire financial futures contracts and financial options contracts for hedging purposes only.

Sun Life MPF Comprehensive Scheme US & Hong Kong Equity Portfolio

To achieve long term capital appreciation. The fund is considered high risk.

The asset allocation of the US & Hong Kong Equity Portfolio (taking into account its investments in the underlying APIFs and/ or approved ITCISs) is (1) Equities (90% to 100%): the United States (50%-70%), Hong Kong (30%-50%), (2) Cash or cash equivalents (0%-10%). The US & Hong Kong Equity Portfolio will hold a minimum of 30% of its assets in Hong Kong dollar investments at all times through investment in APIFs and/ or approved ITCISs denominated in Hong Kong dollar, and cash and/or through currency hedging. The US & Hong Kong Equity Portfolio will not acquire any financial futures contracts or financial option contracts except for hedging purposes and will not engage in security lending.


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Sun Life MPF Comprehensive Scheme Asian Equity Portfolio

To achieve long term capital growth and the long term return is expected to be modestly in excess of Hong Kong price inflation (as measured by Consumer Price Index Type A). The fund is considered relatively high risk.

The non-cash investments primarily invest in Asian (ex-Japan) equities. It may invest up to 10% of its net asset value in shares listed on a stock exchange that is not an approved stock exchange as defined in the General Regulation, including without limitation shares of companies listed on the stock exchange(s) of the People’s Republic of China via the Stock Connect programme. It may hold cash, bank deposits or cash equivalents for ancillary purposes. The current proposed asset allocation is (1) Equities (60%-100%): Hong Kong (20%-70%), Singapore (0%-30%), Malaysia (0%-20%), Korea (0%-40%), Taiwan (0%-40%), Thailand (0%-20%), Philippines (0%-10%), India (0%-40%), others (0%-10%), (2) Cash or cash equivalents (0%-40%). It will hold a minimum of 30% of its assets in Hong Kong dollar investments at all times through investments in direct holdings in equities, and cash and/or through currency hedging. It will not acquire any financial futures contracts or financial options contracts except for hedging purposes and will not engage in security lending.


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Sun Life MPF Comprehensive Scheme Hong Kong Equity Portfolio

To achieve long term capital appreciation. The fund is considered relatively high risk.

The non-cash investments primarily invest in Hong Kong equities. It may invest up to 100% in quoted securities of companies established in or whose business is connected with the economy of Hong Kong. It may invest up to 10% of its net asset value in shares listed on a stock exchange that is not an approved stock exchange as defined in the General Regulation, including without limitation shares of companies listed on the stock exchange(s) of the People’s Republic of China via the Stock Connect programme. The current proposed asset allocation is (1) Equities (90%-100%): Hong Kong (90%-100%), Others (0%-10%), (2) Cash or cash equivalents (0%-10%). It will maintain a minimum Hong Kong currency exposure of 30% at all times. It will not acquire any financial futures contract or financial option contracts except for hedging purposes and has no current intention to engage in security lending.


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Investment report for the year ended 31 December 2019 (continued) Investment analysis and commentary Hong Kong equity market ended higher in the fourth quarter of 2019, recouping part of the losses in the previous two quarters. Hang Seng Index surged 8.0% over the quarter with the best part of gains incurred in December. Investors turned more upbeat towards the end of the year upon a slew of positive factors. US-China trade wars were poised to de-escalate, with the “phase one” trade deal likely to be struck soon thereby no further tariff hikes being imposed for Chinese exports to the US. China macro data remained soft over the quarter. That said, certain leading indicators such as Caxin and official manufacturing PMIs, and credit growth managed to show sequential improvement. Chinese government continued its countercyclical measures to buoy the economy, which consisted of cuts in money market interest rate and reserve requirement ratio for commercial banks, increased quotas over the local government special bonds, and relaxation of home purchase restriction in certain cities. In Hong Kong, ongoing protests weighed on consumption and the overall economy though posed only minimal impacts on the broad equity market. China onshore equity market also gained in the fourth quarter. Shanghai Composite Index, the benchmark A-share index, rose 5.0% in local currency terms, or 7.8% in USD terms. Central government’s pro-growth measures, which increased market liquidity, and positive development in the US-China trade talks, together sent equities higher. Risk-on sentiment was also reflected by the 2.7% appreciation in Chinese yuan in the quarter. Outperformers were old economy names such as property, basic materials, and machinery shares, which directly benefited from policy supports to both property and infrastructure industries. Taiwan equities were the largest gainers in Asian market during the fourth quarter. TWSE Index soared 10.8% and 15.0% in local currency and USD terms, respectively. Improving economy, backed by acceleration of export growth, boosted investors’ risk appetite to stocks. Gains in Apple supply chain counters, in the wake of stronger-than-expected sales of Apple’s new smartphone, buoyed the tech sector. The anticipated rollout of 5G technology further lifted sentiment towards certain fabless house, foundry, assembly companies, as well as handset components makers. Asian equities surged in the fourth quarter, supported by accommodative measures from central banks in the region and easing concern over US-China trade spat. Weakness in greenback also provided support to Asian equities. During the quarter, MSCI AC Asia ex-Japan Index rose 11.4%. In additional to strong contributions from Greater China markets, Korea equities were fueled by interest rate cut and investors’ more upbeat earnings expectation on DRAM and NAND flash memory makers. In contrast, India and ASEAN underperformed despite still recording decent positive returns. India was particularly dragged by rising fiscal pressure and concerns over slowing economy. Its GDP growth for the third quarter eased to a six-year low, hit by weakened consumption and manufacturing sector. Moody’s downgraded India’s outlook from stable to negative, which further weighed on the market.


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Investment report for the year ended 31 December 2019 (continued) Investments analysis and commentary (continued) Global equity markets advanced in the fourth quarter as geopolitical risks that dominated markets for much of 2019 subsided. US equities made decent gains as the deadlock of US-China trade negotiations was temporarily removed as the “phase one” trade deal would be reached soon. Better-than-expected earnings picture for the third quarter, robust job creation in the US, and one more round of interest rate cut in the quarter all provided firm support to the US market. European equities were supported by stronger data from Germany as well as slight improvement in the region’s manufacturing PMI. Japanese shares climbed on weakened yen. Despite still weak economy, Japanese government announced a supplementary fiscal package with focus on reconstruction, which was highly regarded by investors. Emerging market equities posted strong gains in the fourth quarter and outperformed developed market counterparts. Weaker greenback, US-China trade truce and rising commodity prices all led to their outperformance. Government bond yields rose globally in fourth quarter. US Federal Reserve further lowered Fed Fund rate by 25 bps in October as expected. Benchmark 10-year bond yields rose by more than 20 bps in all major regions, including the US, UK, Europe and Japan, thanks to the perceived reduction in geopolitical risk as US and China made progress on reaching of phrase one trade deal. Boris Johnson won the UK general election which provided green light for Brexit by end-January. The US treasury yield curve steepened and 10-year rate finished the year at 1.92% as risk aversion abated. Higher yields imply lowered bond prices. HKD swap rates and government bond yields moved higher following their US counterparts. The higher yields of Hong Kong dollar bond led to lower bond prices. The 2-year, 5-year and 10-year HK government bond ended the quarter with yields at 1.75% (+14bps), 1.74% (+50bps) and 1.80% (+58bps) respectively. Interest rate gap between HK and US narrowed, as credit rating of Hong Kong lowered and tension between the government and protestors continued. While capital outflows was not evidenced in the data releases, the city’s third quarter GDP grew at -3.2% quarter on quarter, much worse than the -0.6% quarter on quarter expected by market. One-month HIBOR spiked in mid-November to as high as 2.75% due to buoyant IPO activities. It then stayed elevated and above 2.4% throughout December, as banks prepared for year-end liquidity squeeze. The higher rates offered by the HKD compared to USD led the former to move away from the weak side of the trading band and finished the year at 7.79. RMB significantly trade up against USD in the fourth quarter given agreement on “Phase One” trade deal made in mid-December. China’s economy continued to show signs of stabilization. Retail sales and industrial production rebounded in November. Persistently high CPI inflation readings constrained PBoC to ease aggressively. CNH funding rates and forward points softened in-line with onshore rates as liquidity injection in onshore and expectation of RRR cut buoyed market liquidity and kept short-end rates low.


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Investment report for the year ended 31 December 2019 (continued) Trustee’s commentary Analysis of the investments held by the Scheme Annualized return (in terms of %)

1 year 5 years 10 years Since

Launch Sun Life MPF Comprehensive Scheme

MPF Conservative Portfolio Launch date: 01/12/2000

0.18 0.05 0.03 0.58

Benchmark/Performance Target Hong Kong Dollar Savings Rate

0.10 0.03 0.02 0.45

Deviation from the benchmark/performance target

above above above above

Trustee’s commentary

The performance was above the benchmark/ performance target for the specified periods. The year ending 31 December 2019 was a positive one for government bonds as they delivered positive returns on the back of weaker economic data and geopolitical tensions globally. The US 10-year Treasury yield fell by 77 basis points (bps) in 2019 to end the year at 1.92%. The US-China trade tensions continued to be a key event influencing financial markets in 2019. The uncertainty surrounding the trade war waged between the world’s two largest economies resulted in sluggish global growth during the year.

In Hong Kong, the local social incidents were the key events influencing the economic growth of the country in 2019. Real GDP growth has fallen from 0.6% in Q1 to -2.9% in Q4, mainly resulting from weakness in the consumption and tourism sectors. Uncertainties on the trade front caused Hong Kong’s exports of goods and services to suffer while the internal strife caused a slump in domestic consumption and tourism receipts. To boost its economy, the Hong Kong government rolled out four rounds of relief measures in 2019 from August to December to aid businesses and sectors that were suffering from the social unrests. Despite the ongoing political tensions in Hong Kong, its financial markets appeared resilient on an annual return basis with Hong Kong bonds coming in with positive returns overall. The HKD-denominated government bonds returned 2.31% (as measured by the iBoxx ALBI Hong Kong Government Bond Index, in HKD) while HKD-denominated corporates fared better with a 4.18% return (the iBoxx ALBI Hong Kong Non-Government Bond Index, in HKD) over 2019. Over the year, the HIBOR started the year at 2.33% and rose to end the year at 2.43%.


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Investment report for the year ended 31 December 2019 (continued) Trustee’s commentary (continued) Analysis of the investments held by the Scheme (continued)

Annualized return (in terms of %)



Capital Guaranteed Portfolio Launch date: 01/12/2000

4.00 0.84 1.46 2.86

Benchmark/Performance Target Hong Kong Inflation Rate

3.30 2.90 3.70 2.00


above below below above


The performance was above benchmark/ performance target for 1 year and since launch; below the benchmark/ performance target for 5 years and 10 years. Unlike the situation of 2018, 2019 was a good year for both fixed income and equity market. A sudden and unexpected fall in benchmark US Treasury yields and the strong performance of local equity market contributed positively to the return of the overall underlying fund. On a full-year basis, Hong Kong equities portion of the underlying fund performed strongly. In terms of fixed income portion of the underlying fund, it posted positive return in 2019 under the falling yield environment.


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Trustee’s commentary (continued)

Analysis of the investments held by the Scheme (continued) Annualized return (in terms of %)



Age 65 Plus Portfolio Launch date: 01/04/2017

8.78 N/A N/A 3.18

Benchmark/Performance Target MPF DIS Reference Portfolios

9.63 N/A N/A 4.18


below N/A N/A below


The performance was below the benchmark/ performance target for the specified periods. We entered 2019 against the backdrop of tightening monetary policy, slowing economic growth and a US-China trade war that had shown signs of significantly impacting global activity, all of which contributed to a challenging 2018. The start of the year saw equity markets rebounding from a weak end in 2018. Over the year, global central banks remained largely dovish, with the US Federal Reserve cutting rates for 3 times and the European Central Bank restarting its quantitative easing program. Such continuous liquidity provision has proved to provide a cure for short-term noises from geopolitics, as there were several bouts of sell-offs in the year amid concerns over US-China trade tensions and Brexit, as well as a global recession. Overall, market weakness were less pronounced and short-lived given supportive policies, and the equity markets delivered strong returns over the course of 2019. In fixed income, both government and corporate bonds advanced in 2019 in a more supportive policy environment, with the latter outperforming.

Government bond yields fell markedly over the year, reflecting the expectation of continued central bank dovishness among policy makers. Bond yields fell further in Q3 as US-China trade tensions re-escalated, with investors reaching for risk-reducing assets. In particular, the 10-year US Treasury yield dipped lower than the 2-year yield in August, i.e. yield curveinversion, indicating significant economic pessimism among bond investors at the time.Overall, the US 10-year yield fell by 76 bps to 1.92% by the end of December.

Regarding the performance attribution of the underlying fund, security selection was the major performance detractor. In particular, security selection within the equity sleeve was negative as the value style continued to underperform the broader market. Investors continued to favour stocks with quality and growth characteristics, in which both selection within fixed income and asset allocation were not able to offset the negative performance.


26





Stable Portfolio Launch date: 01/12/2000

8.01 1.77 2.01 2.14

Benchmark/Performance Target Consumer Price Index Type A

3.30 2.90 3.70 2.00


above below below above


The performance was above benchmark/ performance target for 1 year and since launch; below the benchmark/ performance target for 5 years and 10 years. We entered 2019 against the backdrop of tightening monetary policy, slowing economic growth and a US-China trade war that had shown signs of significantly impacting global activity, all of which contributed to a challenging 2018. The start of the year saw equity markets rebounding from a weak end in 2018. Over the year, global central banks remained largely dovish, with the US Federal Reserve cutting rates for 3 times and the European Central Bank restarting its quantitative easing program. Such continuous liquidity provision has proved to provide a cure for short-term noises from geopolitics, as there were several bouts of sell-offs in the year amid concerns over US-China trade tensions and Brexit, as well as a global recession. Overall, market weakness were less pronounced and short-lived given supportive policies, and the equity markets delivered strong returns over the course of 2019. In fixed income, both government and corporate bonds advanced in 2019 in a more supportive policy environment, with the latter outperforming.

Government bond yields fell markedly over the year, reflecting the expectation of continued central bank dovishness among policy makers. Bond yields fell further in Q3 as US-China trade tensions re-escalated, with investors reaching for risk-reducing assets. In particular, the 10-year US Treasury yield dipped lower than the 2-year yield in August, i.e. yield curve inversion, indicating significant economic pessimism among bond investors at the time. Overall, the US 10-year yield fell by 76 bps to 1.92% by the end of December.

Given the dovishness of central banks globally, fixed income contributed positively to the underlying fund’s return over the performance target. In particular, the underlying fund was able to benefit from the allocation to developed market fixed income, where both US and European bonds yields fell considerably over the year. In addition, although the underlying fund has a lower allocation to equities, the double digit return from this asset class also supported the underlying fund’s return.


27





Stable Growth Portfolio Launch date: 01/12/2000

11.21 2.92 2.62 2.55


3.30 2.90 3.70 2.00


above above below above


The performance was above benchmark/ performance target for 1 year, 5 years and since launch; below the benchmark/ performance target for 10 years. We entered 2019 against the backdrop of tightening monetary policy, slowing economic growth and a US-China trade war that had shown signs of significantly impacting global activity, all of which contributed to a challenging 2018. The start of the year saw equity markets rebounding from a weak end in 2018. Over the year, global central banks remained largely dovish, with the US Federal Reserve cutting rates for 3 times and the European Central Bank restarting its quantitative easing program. Such continuous liquidity provision has proved to provide a cure for short-term noises from geopolitics, as there were several bouts of sell-offs in the year amid concerns over US-China trade tensions and Brexit, as well as a global recession. Overall, market weakness were less pronounced and short-lived given supportive policies, and the equity markets delivered strong returns over the course of 2019. In fixed income, both government and corporate bonds advanced in 2019 in a more supportive policy environment, with the latter outperforming.


The underlying fund was able to benefit from the balanced allocation between fixed income and equities, where both asset classes delivered positive return for the underlying fund. For instance, the allocation to developed market fixed income, where both US and European bonds yields fell considerably, was positive. In addition, the double digit return from equities also supported the underlying fund’s return.


28





Core Accumulation Portfolio Launch date: 01/04/2017

14.37 N/A N/A 5.61

Benchmark/Performance Target MPF DIS Reference Portfolios

17.03 N/A N/A 7.17


below N/A N/A below


The performance was below the benchmark/ performance target for the specified periods. We entered 2019 against the backdrop of tightening monetary policy, slowing economic growth and a US-China trade war that had shown signs of significantly impacting global activity, all of which contributed to a challenging 2018. The start of the year saw equity markets rebounding from a weak end in 2018. Over the year, global central banks remained largely dovish, with the US Federal Reserve cutting rates for 3 times and the European Central Bank restarting its quantitative easing program. Such continuous liquidity provision has proved to provide a cure for short-term noises from geopolitics, as there were several bouts of sell-offs in the year amid concerns over US-China trade tensions and Brexit, as well as a global recession. Overall, market weakness were less pronounced and short-lived given supportive policies, and the equity markets delivered strong returns over the course of 2019. In fixed income, both government and corporate bonds advanced in 2019 in a more supportive policy environment, with the latter outperforming.


Regarding the performance attribution of the underlying fund, security selection was the major performance detractor. In particular, security selection within the equity sleeve was negative as the value style continued to underperform the broader market. Investors continued to favour stocks with quality and growth characteristics, in which both selection within fixed income and asset allocation were not able to offset the negative performance.


29

Investment report for the year ended 31 December 2019 (continued) Trustee’s commentary (continued) Analysis of the investments held by the Scheme (continued) Annualized return (in terms of %)



Balanced Growth Portfolio Launch date: 01/12/2000

14.51 4.32 4.59 4.06

Benchmark/Performance Target Hong Kong Salary Inflation Rate

3.40 3.90 4.50 N/A


above above above N/A


The performance was above the benchmark/ performance target for the specified periods. We entered 2019 against the backdrop of tightening monetary policy, slowing economic growth and a US-China trade war that had shown signs of significantly impacting global activity, all of which contributed to a challenging 2018. The start of the year saw equity markets rebounding from a weak end in 2018. Over the year, global central banks remained largely dovish, with the US Federal Reserve cutting rates for 3 times and the European Central Bank restarting its quantitative easing program. Such continuous liquidity provision has proved to provide a cure for short-term noises from geopolitics, as there were several bouts of sell-offs in the year amid concerns over US-China trade tensions and Brexit, as well as a global recession. Overall, market weakness were less pronounced and short-lived given supportive policies, and the equity markets delivered strong returns over the course of 2019. In fixed income, both government and corporate bonds advanced in 2019 in a more supportive policy environment, with the latter outperforming.


Over the one-year period, the underlying fund’s outperformance was largely driven by the strong performance form the equity market. Within equities, given the higher allocation in Hong Kong equities, the asset class was the major performance contributor for the underlying fund. In addition, given the strong earnings result and robust economy in the US, US equities also contributed positively to the underlying fund’s return. Last but not least, fixed income registered positive return given easing monetary policies globally.


30





Growth Portfolio Launch date: 01/12/2000

17.83 5.35 4.46 3.49

Benchmark/Performance Target Hong Kong Salary Inflation Rate

3.40 3.90 4.50 N/A


above above below N/A

Trustee’s commentary The performance was above benchmark/performance target for 1 year and 5 years; below the benchmark/ performance target for 10 years. We entered 2019 against the backdrop of tightening monetary policy, slowing economic growth and a US-China trade war that had shown signs of significantly impacting global activity, all of which contributed to a challenging 2018. The start of the year saw equity markets rebounding from a weak end in 2018. Over the year, global central banks remained largely dovish, with the US Federal Reserve cutting rates for 3 times and the European Central Bank restarting its quantitative easing program. Such continuous liquidity provision has proved to provide a cure for short-term noises from geopolitics, as there were several bouts of sell-offs in the year amid concerns over US-China trade tensions and Brexit, as well as a global recession. Overall, market weakness were less pronounced and short-lived given supportive policies, and the equity markets delivered strong returns over the course of 2019. In fixed income, both government and corporate bonds advanced in 2019 in a more supportive policy environment, with the latter outperforming.


Over the one-year period, the underlying fund’s outperformance was largely driven by the strong performance form the equity market. Within equities, given the higher allocation in Hong Kong equities, the asset class was the major performance contributor for the underlying fund. In addition, given the strong earnings result and robust economy in the US, US equities also contributed positively to the underlying fund’s return. Last but not least, fixed income registered positive return given easing monetary policies globally.


31



1 year 5 years 10

years Since


International Equity Portfolio Launch date: 01/12/2000

26.04 5.91 6.72 4.12

Benchmark/Performance Target Lipper MPF Global Equity Fund Category

Median

21.96 6.04 6.65 3.34


above below above above


The performance was above the benchmark/performance target for 1 year, 10 years and since launch and below the benchmark/performance target for 5 years. Over the year, the underlying fund manager increased the allocation to American and Asia Pacific equity strategies, while reducing the exposure to Japanese and Hong Kong equity markets. The position in European equities was broadly unchanged. Overall, the underlying fund retained significant exposure to American equities.

The underlying fund generated positive returns over the year as global equity markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Given this backdrop, the underlying holdings in American and European equity strategies added significant value. The allocation to Japan, Hong Kong and Asia Pacific equity strategies also supported performance.


32




Asian Equity Portfolio Launch date: 01/12/2000

12.29 4.40 4.96 6.18


3.30 2.90 3.70 2.00


above above above above


The performance was above the benchmark/ performance target for the specified periods. Stock selection had a negative effect on relative returns. It was notably weaker in industrials and consumer service sectors, but stronger in healthcare. At a regional level, stock selection effect was positive, driven mainly by stockpicking in Taiwan and Korea. Sector allocation had a positive impact on relative returns. The underlying fund’s underweight positions materials and overweight positions in technology were positive.

At stock level, Chinese train manufacturer Zhuzhou CRRC Times Electric traded lower during the year after the company cut guidance on full-year locomotive tendering numbers, suggesting railway equipment capital expenditure is not as high as the market expected. Chinese social media platform, Sina, also performed poorly, impacted by the lacklustre Q1 results of Weibo, its subsidiary. Moreover, Weibo’s management disappointed the market with the release of soft fourth-quarter guidance and cautious comments around the outlook for 2020. In India, one of the holdings Zee Entertainment fell on worries for addition stake sale by the promoters.

On the positive side, Chinese ecommerce company VIPshop outperformed, due to hopes on stimulus program by the government to boost Chinese consumption in early 2019. The company also released solid operating results during the year on the back of its cost cutting initiatives. An overweight position in Taiwan-based display IC solution provider Novatek was also helpful. Novatek rose higher on market expectations of contribution from new products (OLED DDI). Indian gas company Indraprastha Gas also contributed as it reported strong quarterly result, fuelled bye strong volume growth and expanding margin. Regulatory concern on access code policy which had earlier weighed negatively on the stock also eased a bit near the year end.


33




Hong Kong Equity Portfolio Launch date: 01/12/2000

16.09 5.36 4.41 8.32

Benchmark/Performance Target Lipper MPF Hong Kong Equity Fund Category

Median

14.49 5.37 4.34 7.49


above below above above


The performance was above benchmark/performance target for 1 year, 10 years and since launch; slightly below the benchmark/performance target for 5 years. Stock selection had a positive impact on the underlying fund’s relative returns. It was strongest in consumer goods and healthcare but weakest in financials. On a regional basis, stock selection is positive in both China and Hong Kong. Sector allocation was also positive. Being underweight utilities and overweight consumer goods benefited relative returns. However, being overweight oil and gas detracted from relative returns.

In terms of major stock contributors, the underlying fund’s overweight position in Li Ning was a key one. The sportswear company rose higher during the year as the market remained positive on China’s sportswear industry given the secular trends of rising sport participation and consumers trading up. Healthcare company Sino Biopharmaceutical also contributed as the company delivered strong quarterly results, revealed a better-than-expected drug pipeline, and on management guidance for 20%-plus growth in 2020. Luxury goods group Prada advanced on the back of a successful product launch and a positive outlook for 2020 driven mainly by the company’s restructuring efforts.

On the flip side, the underweight position in e-commerce platform Meituan detracted as shares of Meituan advanced on the back of strong operating results. The overweight in PetroChina detracted as shares of the oil company declined on the back of uncertainty surrounding its pipeline reform and also its high capex levels.


34


Trustee’s commentary (continued)

Analysis of the investments held by the Scheme (continued) Annualized return (in terms of %)



US & Hong Kong Equity Portfolio Launch date: 17/02/2014

21.50 8.40 N/A 8.78

Benchmark/Performance Target N/A N/A N/A N/A


N/A N/A N/A N/A

Trustee’s commentary There is no market median performance information available for comparison as the fund is the only fund in the MPF platform that invests in the US and Hong Kong equity markets. The main performance attribution factors include cash drag, transaction costs, cumulative security mis-weights, compounding effect, dividend withholding tax, ETF premium / discount against its net asset value, trading execution performance, FX execution performance, etc. State Street Global Advisors Asia Limited continue to position the portfolios to generate the returns of the benchmarks as closely as practicable, before expenses, and while attempting to minimize transaction costs. A series of controls exist to help limit any deviations in strategies, including daily tracking assessments, ex-ante and ex-post performance analyses, annual portfolio evaluations, etc.


35

Investment report for the year ended 31 December 2019 (continued) Trustee’s commentary (continued) Trustee’s assessment framework and action On a quarterly basis, the Board of Trustee meets to discuss the operational and investment performance of the Sun Life MPF Comprehensive Scheme (the “Scheme”). Evaluation of investment performance considers both qualitative and quantitative factors. These include a review of the firm (ownership, turnover of key personnel, assets under management, and regulation and/or compliance) and the fund (turnover of key investment professionals, investment process, investment policies, fund assets, and performance vs. benchmark and peers, as appropriate). Any issues of concern are monitored until the Board of Trustee is satisfied that they have been adequately addressed. In cases where serious concerns persist, the Trustee may take actions such as requesting a meeting with the investment manager to better understand causes of concern and actions taken to address such concerns and/or initiate a fund search to identify a suitable replacement manager. The constituent funds in the scheme had varied performance in 2019. In the last quarter of 2019, four strategies were added to the watch list (based on the governance policy). The four funds on watch list include the MPF Conservative portfolio, Stable portfolio, Stable Growth portfolio and Asian Equity portfolio. While the funds’ performance was below median over the year, these portfolios may have performed better than or in line with the median on a month-by-month basis. For example, both the Stable and Stable Growth portfolios were ranked in the 2nd and 1st quartiles respectively for the month of October 2019. The Asian Equity portfolio was ranked in the 2nd quartile in November 2019. The variation of returns in the MPF Conservative portfolio month-over-month were too small to determine a trend. At the same time, the range in returns between the 1st quartile and the 4th quartile was small with a difference of approximately 5 bps between the top quartile and bottom quartile. For constituent funds that performed less well, these are being closely monitored with clear communication made to the underlying investment manager to enhance investment returns over a reasonable period.


36

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Investment income and performance

Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio

2019 2018 2017 Net appreciation/(depreciation) of

investments - unrealised $ - $ - $ - Net return/(loss) from investments - realised - - -



investments - unrealised $ 16,494,132 $ (10,469,226) $ 20,388,934 Net return from investments - realised 5,982,311 6,108,810 5,911,994








37

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Investment income and performance (continued)














38

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Investment income and performance (continued)






investments - unrealised $ 16,131,759 $ (9,996,590) $ 15,802,103 Net return from investments - realised 1,063,531 1,865,987 740,387

Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio (Note)


investments - unrealised $ 1,154,088 $ (151,659) $ 113,795 Net return from investments - realised 343,589 24,051 19,686

Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio (Note)


investments - unrealised $ 7,906,093 $ (2,903,573) $ 1,248,864 Net return from investments - realised 565,263 327,260 80,075

Note: Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio and Sun Life MPF

Comprehensive Scheme Core Accumulation Portfolio were launched on 1 April 2017.


39

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Capital Guaranteed Portfolio Investment portfolio

Holdings Market value

% of net assets

Quoted investment Approved pooled investment fund FWD MPF Capital Guaranteed

Policy 19,547,227 $ 433,362,031 99.99

Total quoted investment* $ 433,362,031 99.99

Other net assets 31,052 0.01

Net assets attributable to the members at 31 December 2019 $ 433,393,083 100.00

Total investment at cost* $ 387,248,695

* Investment is accounted for on a trade date basis.


40

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Capital Guaranteed Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December

2018 Additions Deductions

As at 31 December

2019 Quoted investment Approved pooled investment fund FWD MPF Capital Guaranteed Policy 20,337,315 2,090,503 2,880,591 19,547,227


41

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Stable Portfolio Investment portfolio


% of net assets

Quoted investment Approved pooled investment fund Schroder MPF Capital Stable Fund

- Class A 4,384,965 $ 91,294,966 99.94

Total quoted investment* $ 91,294,966 99.94 Other net assets 57,508 0.06





42

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Stable Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December


As at 31 December

2019 Quoted investment Approved pooled investment fund Schroder MPF Capital Stable Fund -

Class A 4,375,099 529,805 519,939 4,384,965


43

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Stable Growth Portfolio Investment portfolio


% of net assets

Quoted investment Approved pooled investment fund Schroder MPF Stable Growth Fund

- Class A 6,246,725 $ 150,546,072 99.81






44

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Stable Growth Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December


As at 31 December

2019 Quoted investment Approved pooled investment fund Schroder MPF Stable Growth Fund -

Class A 6,052,161 852,733 658,169 6,246,725


45

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars)


Investment portfolio


% of net assets

Quoted investment

Approved pooled investment fund

Schroder MPF Balanced Investment Fund - Class A 7,275,342 $ 196,288,736 99.89

Total quoted investment* $ 196,288,736 99.89

Other net assets 225,640 0.11





46

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Balanced Growth Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December


As at 31 December

2019 Quoted investment Approved pooled investment fund Schroder MPF Balanced Investment

Fund - Class A 7,370,818 779,797 875,273 7,275,342


47

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Growth Portfolio Investment portfolio


% of net assets

Quoted investment Approved pooled investment fund Schroder MPF Growth Fund - Class

A 4,921,731 $ 148,882,365 99.94






48

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Growth Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December


As at 31 December

2019 Quoted investment Approved pooled investment fund Schroder MPF Growth Fund - Class A 4,917,534 520,774 516,577 4,921,731


49

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme International Equity Portfolio Investment portfolio

Holdings Market value % of net

assets Quoted investment Approved pooled investment fund Fidelity Global Investment Fund - Global Equity Fund - Class A 731,170 $ 187,640,095 100.12

Total quoted investment * $ 187,640,095 100.12 Other net assets (218,683) (0.12)


Total investments at cost * $ 129,224,452

* Investments are accounted for on a trade date basis.


50

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme International Equity Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December


As at 31 December

2019 Quoted investment Approved pooled investment fund Fidelity Global Investment Fund - Global Equity Fund - Class A 728,311 83,808 80,949 731,170


51

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Asian Equity Portfolio Investment portfolio


assets Quoted investment Approved pooled investment fund Schroder MPF Asian Fund - Class A 5,219,410 $ 276,837,488 99.88

Total quoted investment * $ 276,837,488 99.88 Other net assets 334,994 0.12



* Investments are accounted for on a trade date basis.


52

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Asian Equity Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December


As at 31 December

2019 Quoted investment Approved pooled investment fund Schroder MPF Asian Fund - Class A 5,334,979 558,856 674,425 5,219,410


53

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Hong Kong Equity Portfolio Investment portfolio


assets Quoted investment Approved pooled investment fund Schroder IPF Hong Kong Equity Fund

- Class A 9,185,735 $ 614,600,968 99.88






54

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Hong Kong Equity Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December


As at 31 December

2019 Quoted investment Approved pooled investment fund Schroder IPF Hong Kong Equity Fund -

Class A 9,700,339 1,043,519 1,558,123 9,185,735


55

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme US & Hong Kong Equity Portfolio Investment portfolio


assets Quoted investments Approved Index-Tracking Collective

Investment Schemes SPDR S&P 500ETF Trust S.1 25,682 $ 64,368,992 59.61 Tracker Fund of Hong Kong 1,532,500 43,599,625 40.37

Total quoted investments * $ 107,968,617 99.98 Other net liabilities 25,235 0.02





56

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme US & Hong Kong Equity Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December


As at 31 December

2019 Quoted investments Approved Index-Tracking Collective

Investment Schemes SPDR S&P 500ETF Trust S.1 24,586 2,770 1,674 25,682 Tracker Fund of Hong Kong 1,302,500 307,500 77,500 1,532,500


57

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio Investment portfolio


assets Quoted investment Approved pooled investment fund Schroder MPF Core 20/80 Fund

- Class B 1,807,951 $ 20,429,851 97.02






58

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December


As at 31 December

2019 Quoted investment Approved pooled investment fund Schroder MPF Core 20/80 Fund

- Class B 1,379,551 1,184,207 755,807 1,807,951


59

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio Investment portfolio


assets Quoted investment Approved pooled investment fund Schroder MPF Core 60/40 Fund

- Class B 6,591,524 $ 79,164,199 99.22






60

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio (continued) Statement of movements in investment portfolio Portfolio Holdings

As at 31 December


As at 31 December

2019 Quoted investment Approved pooled investment fund Schroder MPF Core 60/40 Fund

- Class B 4,289,869 3,460,317 1,158,662 6,591,524


61

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Performance table 2019

Total net asset Net asset value Fund expense

ratio Transaction cost value per unit % (1) Sun Life MPF Comprehensive

Scheme MPF Conservative Portfolio 217,690,156 11.16 1.42 -

(2) Sun Life MPF Comprehensive

Scheme Capital Guaranteed Portfolio 433,393,083 17.14 2.23 -


Scheme Stable Portfolio 91,352,474 14.97 1.89 - (4) Sun Life MPF Comprehensive

Scheme Stable Growth Portfolio 150,838,971 16.17 1.98 - (5) Sun Life MPF Comprehensive

Scheme Balanced Growth Portfolio 196,514,376 21.39 1.82 - (6) Sun Life MPF Comprehensive

Scheme Growth Portfolio 148,976,067 19.23 1.96 - (7) Sun Life MPF Comprehensive

Scheme International Equity Portfolio 187,421,412 21.59 2.17 -


Scheme Asian Equity Portfolio 277,172,482 31.43 2.22 - (9) Sun Life MPF Comprehensive

Scheme Hong Kong Equity Portfolio 615,339,026 45.96 2.11 -


Scheme US & Hong Kong Equity Portfolio 107,993,852 16.39 1.20 342,104


Scheme Age 65 Plus Portfolio 21,056,474 10.90 0.84 - (12) Sun Life MPF Comprehensive

Scheme Core Accumulation Portfolio 79,784,510 11.62 0.86 -


62


Performance table (continued)

2018


ratio Transaction cost value per unit %

(1) Sun Life MPF ComprehensiveScheme MPF ConservativePortfolio 214,185,283 11.14 1.19 -

(2) Sun Life MPF ComprehensiveScheme Capital GuaranteedPortfolio 428,541,767 16.48 2.23 -

(3) Sun Life MPF ComprehensiveScheme Stable Portfolio 83,507,295 13.86 1.87 -

(4) Sun Life MPF ComprehensiveScheme Stable Growth Portfolio 129,408,537 14.54 1.97 -

(5) Sun Life MPF ComprehensiveScheme Balanced Growth Portfolio 172,100,229 18.68 1.81 -

(6) Sun Life MPF ComprehensiveScheme Growth Portfolio 124,842,334 16.32 1.94 -

(7) Sun Life MPF ComprehensiveScheme International Equity Portfolio 146,382,869 17.13 2.04 -

(8) Sun Life MPF ComprehensiveScheme Asian Equity Portfolio 248,414,172 27.99 2.22 -

(9) Sun Life MPF ComprehensiveScheme Hong Kong EquityPortfolio 552,404,912 39.59 2.10 -

(10) Sun Life MPF ComprehensiveScheme US & Hong Kong EquityPortfolio 82,232,737 13.49 1.21 304,896

(11) Sun Life MPF ComprehensiveScheme Age 65 Plus Portfolio 14,494,638 10.02 0.87 -

(12) Sun Life MPF ComprehensiveScheme Core AccumulationPortfolio 45,328,814 10.16 0.89 -


63

Investment report for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Performance table (continued) 2017


ratio Transaction cost value per unit % (1) Sun Life MPF Comprehensive

Scheme MPF Conservative Portfolio 211,006,412 11.13 0.51 -


Scheme Capital Guaranteed Portfolio 437,164,307 16.86 2.23 -


Scheme Stable Portfolio 88,785,393 14.70 1.88 - (4) Sun Life MPF Comprehensive

Scheme Stable Growth Portfolio 140,739,066 15.87 2.01 - (5) Sun Life MPF Comprehensive

Scheme Balanced Growth Portfolio 200,900,473 20.88 1.84 - (6) Sun Life MPF Comprehensive

Scheme Growth Portfolio 144,390,900 18.80 1.96 - (7) Sun Life MPF Comprehensive

Scheme International Equity Portfolio 172,173,915 19.38 2.03 -


Scheme Asian Equity Portfolio 312,308,896 32.94 2.27 - (9) Sun Life MPF Comprehensive

Scheme Hong Kong Equity Portfolio 714,477,881 46.73 2.11 -


Scheme US & Hong Kong Equity Portfolio 88,271,244 14.66 1.19 267,859


Scheme Age 65 Plus Portfolio (Note) 8,072,815 10.19 N/A -


Scheme Core Accumulation Portfolio (Note) 26,106,377 10.80 N/A -

Note: Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio and Sun Life MPF



64


Highest

issue price Lowest

redemption price Net investment return (Note 2)

% (1) Sun Life MPF Comprehensive Scheme MPF

Conservative Portfolio $ 11.16 $ 11.14 0.18 (2) Sun Life MPF Comprehensive Scheme

Capital Guaranteed Portfolio 17.20 16.45 4.00 (3) Sun Life MPF Comprehensive Scheme

Stable Portfolio 14.97 13.83 8.01 (4) Sun Life MPF Comprehensive Scheme

Stable Growth Portfolio 16.18 14.44 11.21 (5) Sun Life MPF Comprehensive Scheme

Balanced Growth Portfolio 21.41 18.47 14.51 (6) Sun Life MPF Comprehensive Scheme

Growth Portfolio 19.26 16.03 17.83 (7) Sun Life MPF Comprehensive Scheme

International Equity Portfolio 21.63 16.86 26.04 (8) Sun Life MPF Comprehensive Scheme

Asian Equity Portfolio 31.83 27.30 12.29 (9) Sun Life MPF Comprehensive Scheme

Hong Kong Equity Portfolio 46.92 38.42 16.09 (10) Sun Life MPF Comprehensive Scheme US

& Hong Kong Equity Portfolio 16.41 13.14 21.50

(11) Sun Life MPF Comprehensive Scheme Age

65 Plus Portfolio 10.93 10.02 8.78 (12) Sun Life MPF Comprehensive Scheme Core

Accumulation Portfolio 11.66 10.08 14.37


65


Highest

issue price Lowest



Conservative Portfolio $ 11.14 $ 11.13 0.09 (2) Sun Life MPF Comprehensive Scheme

Capital Guaranteed Portfolio 17.06 16.27 (2.25) (3) Sun Life MPF Comprehensive Scheme

Stable Portfolio 15.21 13.74 (5.71) (4) Sun Life MPF Comprehensive Scheme

Stable Growth Portfolio 16.67 14.35 (8.38) (5) Sun Life MPF Comprehensive Scheme

Balanced Growth Portfolio 22.28 18.38 (10.54) (6) Sun Life MPF Comprehensive Scheme

Growth Portfolio 20.36 15.99 (13.19) (7) Sun Life MPF Comprehensive Scheme

International Equity Portfolio 20.70 16.44 (11.61) (8) Sun Life MPF Comprehensive Scheme

Asian Equity Portfolio 35.35 26.86 (15.03) (9) Sun Life MPF Comprehensive Scheme

Hong Kong Equity Portfolio 52.23 38.33 (15.28) (10) Sun Life MPF Comprehensive Scheme US

& Hong Kong Equity Portfolio 15.95 12.96 (7.98)


65 Plus Portfolio 10.28 9.93 (1.67) (12) Sun Life MPF Comprehensive Scheme Core

Accumulation Portfolio 11.23 9.92 (5.93)


66


Highest

issue price Lowest



Conservative Portfolio $ 11.13 $ 11.13 - (2) Sun Life MPF Comprehensive Scheme











65 Plus Portfolio (Note 1) 10.22 9.95 1.90 (12) Sun Life MPF Comprehensive Scheme Core

Accumulation Portfolio (Note 1) 10.81 9.98 8.00 Note 1: Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio and Sun Life MPF



67


Highest

issue price Lowest




Capital Guaranteed Portfolio 16.55 15.79 - (3) Sun Life MPF Comprehensive Scheme










68


Highest

issue price Lowest











Hong Kong Equity Portfolio 42.51 31.29 (6.47) (10) Sun Life MPF Comprehensive Scheme US

& Hong Kong Equity Portfolio 12.01 9.94 (2.28)


69


Highest

issue price Lowest












& Hong Kong Equity Portfolio (Note 3) 11.09 9.86 9.50 Note 3: Sun Life MPF Comprehensive Scheme US & Hong Kong Equity Portfolio was

launched on 17 February 2014.


70


Highest

issue price Lowest











Hong Kong Equity Portfolio 35.35 29.79 2.79


71


Highest

issue price Lowest











Hong Kong Equity Portfolio 33.67 26.80 26.27


72


Highest

issue price Lowest











Hong Kong Equity Portfolio 34.47 23.66 (20.14)


73


Performance table (continued)

2010 Highest

issue price Lowest



Conservative Portfolio $ 11.14 $ 11.13 -

(2) Sun Life MPF Comprehensive SchemeCapital Guaranteed Portfolio 15.79 14.79 3.22

(3) Sun Life MPF Comprehensive SchemeStable Portfolio 13.24 11.99 5.86

(4) Sun Life MPF Comprehensive SchemeStable Growth Portfolio 13.55 11.65 6.42

(5) Sun Life MPF Comprehensive SchemeBalanced Growth Portfolio 15.18 12.75 10.23

(6) Sun Life MPF Comprehensive SchemeGrowth Portfolio 13.86 11.12 9.89

(7) Sun Life MPF Comprehensive SchemeInternational Equity Portfolio 11.89 9.91 6.07

(8) Sun Life MPF Comprehensive SchemeAsian Equity Portfolio 22.55 17.09 13.99

(9) Sun Life MPF Comprehensive SchemeHong Kong Equity Portfolio 36.05 26.40 9.95

Note 2: The net investment return is calculated by comparing the net asset value per unit at the year end of current year against the net asset value per unit at the year ended of preceding year, except that for the first year, the actual net investment return for the relevant period should be shown without annualization but against the initial launch price of the portfolios of HK$10.00.

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Independent auditor’s report to the Trustee of Sun Life MPF Comprehensive Scheme Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Sun Life MPF Comprehensive Scheme (the “Scheme”) set out on pages 82 to 127, which comprise the statement of assets and liabilities attributable to members as at 31 December 2019, the statement of comprehensive income, the statement of changes in net assets attributable to members, and the cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements give a true and fair view of the financial position of the Scheme as at 31 December 2019, and of its financial transactions and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). Basis for Opinion We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) and with reference to Practice Note 860.1 (Revised), The Audit of Retirement Schemes issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Scheme in accordance with the HKICPA’s Code of Ethics for Professional Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Information Other Than the Financial Statements and Auditor’s Report Thereon The Trustee of the Scheme is responsible for the other information. The other information comprises all the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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Independent auditor’s report to the Trustee of Sun Life MPF Comprehensive Scheme (continued) Report on the Audit of the Financial Statements (continued) Responsibilities of the Trustee for the Financial Statements The Trustee of the Scheme is responsible for the preparation of the financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA and for such internal control as the Trustee determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustee of the Scheme is responsible for assessing the Scheme’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustee either intends to liquidate the Scheme or to cease operations, or has no realistic alternative but to do so. In addition, the Trustee of the Scheme is required to ensure that the financial statements have been properly prepared in accordance with sections 80, 81, 83 and 84 of the Mandatory Provident Fund Schemes (General) Regulation (“the General Regulation”). Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. This report is made solely to you, in accordance with section 102 of the General Regulation, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. In addition, we are required to assess whether the financial statements of the Scheme have been properly prepared, in all material respects, in accordance with sections 80, 81, 83 and 84 of the General Regulation. As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether

due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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Independent auditor’s report to the Trustee of Sun Life MPF Comprehensive Scheme (continued) Report on the Audit of the Financial Statements (continued) Auditor’s Responsibilities for the Audit of the Financial Statements (continued) Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Scheme’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Trustee of the Scheme.

Conclude on the appropriateness of the Trustee’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Scheme’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Scheme to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements,

including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Trustee of the Scheme regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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Independent auditor’s report to the Trustee of Sun Life MPF Comprehensive Scheme (continued)

Report on Matters under the Mandatory Provident Fund Schemes (General) Regulation

a. In our opinion, the financial statements have been properly prepared, in all materialrespects, in accordance with sections 80, 81, 83 and 84 of the General Regulation.

b. We have obtained all the information and explanations which, to the best of ourknowledge and belief, are necessary for the purpose of our audit.

Certified Public Accountants

8th Floor, Prince’s Building 10 Chater Road Central, Hong Kong

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Independent auditor’s assurance report to the Trustee of Sun Life MPF Comprehensive Scheme

We have audited the financial statements of Sun Life MPF Comprehensive Scheme (the “Scheme”) for the year ended 31 December 2019 in accordance with Hong Kong Standards on Auditing and with reference to Practice Note 860.1 (Revised), The Audit of Retirement Schemes (“PN 860.1 (Revised)”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), and have issued an unqualified auditor’s report thereon dated

Pursuant to section 102 of the Mandatory Provident Fund Schemes (General) Regulation (the “General Regulation”), we are required to report whether the Scheme complied with certain requirements of the Mandatory Provident Fund Schemes Ordinance (“MPFSO”) and the General Regulation.

Trustee’s Responsibility

The General Regulation requires the Trustee to ensure that:

a. proper accounting and other records are kept in respect of the constituent funds of theScheme, the Scheme assets and all financial transactions entered into in relation to theScheme;

b. the requirements specified in the guidelines made by the Mandatory Provident FundSchemes Authority (“the Authority”) under section 28 of the MPFSO with respect toforbidden investment practices and the requirements of sections 37(2), 51 and 52 andPart 10 of, and Schedule 1 to, the General Regulation are complied with;

c. the requirements under sections 34DB(1)(a), (b), (c) and (d), 34DC(1), 34DD(1) and (4)of the MPFSO are complied with; and

d. the Scheme assets are not subject to any encumbrance, otherwise than as permittedby the General Regulation.

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Independent auditor’s assurance report to the Trustee of Sun Life MPF Comprehensive Scheme (continued)

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.

The firm applies Hong Kong Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Auditor’s Responsibility

Our responsibility is to report solely to you, on the Scheme’s compliance with the above requirements based on the results of the procedures performed by us, in accordance with section 102 of the General Regulation, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and with reference to PN 860.1 (Revised) issued by the HKICPA. We have planned and performed our work to obtain reasonable assurance on whether the Scheme has complied with the above requirements.

We have planned and performed such procedures as we considered necessary with reference to the procedures recommended on PN 860.1 (Revised), which included reviewing, on a test basis, evidence obtained from the Trustee regarding the Scheme’s compliance with the above requirements.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Opinion

Based on the foregoing:

1. in our opinion:

a. proper accounting and other records have been kept during the year ended31 December 2019 in respect of the constituent funds of the Scheme, theScheme assets and all financial transactions entered into in relation to theScheme;

b. the requirements specified in the guidelines made by the Authority undersection 28 of the MPFSO with respect to forbidden investment practices and therequirements of sections 37(2), 51 and 52 and Part 10 of, and Schedule 1 to, theGeneral Regulation have been complied with, in all material respects, as at 31March 2019, 30 September 2019 and 31 December 2019;

c. the requirements specified in the MPFSO under section 34DB(1)(a), (b), (c) and(d), 34DC(1) and 34DD(1) and (4)(a) with respect to the investment of accruedbenefits and control of payment for services relating to Sun Life MPFComprehensive Scheme Core Accumulation Portfolio and Sun Life MPFComprehensive Scheme Age 65 Plus Portfolio have been complied with, in allmaterial respects, as at 31 March 2019, 30 September 2019 and31 December 2019; and

d. the requirements specified in section 34DD(4)(b) of the MPFSO with respect tothe controls of out-of-pocket expenses of the Sun Life MPF ComprehensiveScheme Core Accumulation Portfolio and Sun Life MPF Comprehensive SchemeAge 65 Plus Portfolio have been complied with, in all material respects, as at 31December 2019.

2. as at 31 December 2019, the Scheme assets were not subject to any encumbrance,otherwise than as permitted by the General Regulation.

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Other Matter

The requirements specified in the MPFSO under sections 34DI(1) and (2) and 34DK(2) with respect to the transfer of accrued benefits to an account and specified notice, and 34DJ(2), (3), (4), (5) with respect to locating scheme members relating to Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio and Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio are not applicable to the Trustee during the year ended 31 December 2019 as the Trustee has completed the relevant transitional provisions. Accordingly, there is no reporting on this section.

Intended Users and Purpose

This report is intended solely for submission by the Trustee to the Authority pursuant to section 102 of the General Regulation, and is not intended to be, and should not be, used by anyone for any other purposes.

Certified Public Accountants

8th Floor, Prince’s Building 10 Chater Road Central, Hong Kong

Sun Life MPF Comprehensive Scheme Financial statements for the year ended 31 December 2019

82

Statement of assets and liabilities attributable to members as at 31 December 2019 (Expressed in Hong Kong dollars)

Note Sun Life MPF Comprehensive

Scheme MPF Conservative Portfolio Sun Life MPF Comprehensive

Scheme Capital Guaranteed Portfolio Sun Life MPF Comprehensive

Scheme Stable Portfolio Sun Life MPF Comprehensive

Scheme Stable Growth Portfolio Sun Life MPF Comprehensive

Scheme Balanced Growth Portfolio Sun Life MPF Comprehensive

Scheme Growth Portfolio 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

Assets

Cash at bank $ 216,617,574 $ 214,911,711 $ 446,101 $ 583,025 $ 160,258 $ 153,104 $ 311,240 $ 43,433 $ 434,133 $ 365,250 $ 397,281 $ 172,765 Amounts receivable on sales of

investments - - 1,070,996 3,392,943 86,464 879,659 253,807 21,550 13,745 348,371 362,227 207,209 Amounts receivable on subscriptions 1,335,079 141,461 100,360 238,398 12,868 38,169 179,681 - 12,868 - 12,868 - Contributions receivable - - - - - - - - - - - - Interest, dividend and other

receivables 554,708 400,464 10,719 - 48,172 44,681 78,867 69,612 100,240 93,348 76,287 69,333 Investments - - 433,362,031 428,100,483 91,294,966 83,389,392 150,546,072 129,516,240 196,288,736 171,887,475 148,882,365 124,807,002

Total assets $ 218,507,361 $ 215,453,636 $ 434,990,207 $ 432,314,849 $ 91,602,728 $ 84,505,005 $ 151,369,667 $ 129,650,835 $ 196,849,722 $ 172,694,444 $ 149,731,028 $ 125,256,309 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------Liabilities

Amounts payable on redemptions $ 411,436 $ 917,106 $ 1,063,156 $ 3,256,442 $ 94,796 $ 853,084 $ 286,121 $ 28,232 $ 59,519 $ 347,870 $ 520,493 $ 209,157 Benefits payable - - - - - - - - - - - - Accruals and other payables 405,769 351,247 533,968 516,640 155,458 144,626 244,575 214,066 275,827 246,345 234,468 204,818

Liabilities (excluding net assets attributable to members) $ 817,205 $ 1,268,353 $ 1,597,124 $ 3,773,082 $ 250,254 $ 997,710 $ 530,696 $ 242,298 $ 335,346 $ 594,215 $ 754,961 $ 413,975 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------

Net assets attributable to members $ 217,690,156 $ 214,185,283 $ 433,393,083 $ 428,541,767 $ 91,352,474 $ 83,507,295 $ 150,838,971 $ 129,408,537 $ 196,514,376 $ 172,100,229 $ 148,976,067 $ 124,842,334

Number of units in issue 3 19,505,122.8953 19,235,027.8853 25,284,231.8911 25,996,965.4469 6,101,005.3489 6,025,710.5189 9,327,293.6169 8,902,625.3254 9,187,745.2152 9,211,427.3359 7,746,750.7599 7,647,516.2652

Net assets attributable to members per unit 11.16 11.14 17.14 16.48 14.97 13.86 16.17 14.54 21.39 18.68 19.23 16.32


83

Statement of assets and liabilities attributable to members as at 31 December 2019 (continued) (Expressed in Hong Kong dollars)


Scheme International Equity Portfolio Sun Life MPF Comprehensive Scheme Asian Equity Portfolio




Sun Life MPF Comprehensive Scheme Core Accumulation

Portfolio 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

Assets

Cash at bank $ 38,569 $ 135,220 $ 830,432 $ 157,138 $ 1,002,419 $ 1,149,208 $ 188,116 $ 213,851 $ 566,391 $ 266,219 $ 592,763 $ 429,029 Amounts receivable on sales of

investments 134,356 116,928 1,287,723 187,100 972,926 1,069,810 - - 60,232 59,810 533,088 63,398 Amounts receivable on subscriptions 28,271 - - - 327,332 519,046 29,937 198,466 119,494 54,590 105,295 313,091 Contributions receivable - - - - - - - - - - - - Interest, dividend and other

receivables 4,346 - 146,653 136,659 325,470 307,602 219,789 193,476 - - - - Investments 187,640,095 146,536,172 276,837,488 248,556,654 614,600,968 551,378,926 107,968,617 82,052,717 20,429,851 14,181,784 79,164,199 44,614,643

Total assets $ 187,845,637 $ 146,788,320 $ 279,102,296 $ 249,037,551 $ 617,229,115 $ 554,424,592 $ 108,406,459 $ 82,658,510 $ 21,175,968 $ 14,562,403 $ 80,395,345 $ 45,420,161 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------Liabilities

Amounts payable on redemptions $ 128,196 $ 162,522 $ 1,477,235 $ 213,237 $ 947,683 $ 1,155,308 $ 304,492 $ 342,227 $ 100,463 $ 57,328 $ 538,458 $ 61,066 Benefits payable - - - - - - - - - - - - Accruals and other payables 296,029 242,929 452,579 410,142 942,406 864,372 108,115 83,546 19,031 10,437 72,377 30,281

Liabilities (excluding net assets attributable to members) $ 424,225 $ 405,451 $ 1,929,814 $ 623,379 $ 1,890,089 $ 2,019,680 $ 412,607 $ 425,773 $ 119,494 $ 67,765 $ 610,835 $ 91,347 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------

Net assets attributable to members $ 187,421,412 $ 146,382,869 $ 277,172,482 $ 248,414,172 $ 615,339,026 $ 552,404,912 $ 107,993,852 $ 82,232,737 $ 21,056,474 $ 14,494,638 $ 79,784,510 $ 45,328,814

Number of units in issue 3 8,679,908.2526 8,543,714.0490 8,819,780.4791 8,874,662.3677 13,388,988.5209 13,953,724.6450 6,589,330.2640 6,094,941.6772 1,931,768.0059 1,446,221.3696 6,863,283.1836 4,460,751.5423

Net assets attributable to members per unit 21.59 17.13 31.43 27.99 45.96 39.59 16.39 13.49 10.90 10.02 11.62 10.16


84

Statement of assets and liabilities attributable to members as at 31 December 2019 (continued) (Expressed in Hong Kong dollars)

Note Scheme Total 2019 2018 2019 2018

Assets

Cash at bank $ 5,789,465 $ 9,017,968 $ 227,374,742 $ 227,597,921 Amounts receivable on sales of investments - - 4,775,564 6,346,778 Amounts receivable on subscriptions (2,264,053) (1,503,221) - - Contributions receivable 23,312,429 17,209,333 23,312,429 17,209,333 Interest, dividend and other receivables - - 1,565,251 1,315,175 Investments - - 2,307,015,388 2,025,021,488

Total assets $ 26,837,841 $ 24,724,080 $ 2,564,043,374 $ 2,277,490,695 ------------------------ ------------------------ ------------------------ ------------------------Liabilities

Amounts payable on redemptions $ (5,932,048) $ (7,603,579) $ - $ - Benefits payable 6,809,472 11,551,806 6,809,472 11,551,806 Accruals and other payables 2,502,139 3,419,959 6,242,741 6,739,408

Liabilities (excluding net assets attributable to members) $ 3,379,563 $ 7,368,186 $ 13,052,213 $ 18,291,214 ------------------------ ------------------------ ------------------------ ------------------------

Net assets attributable to members $ 23,458,278 $ 17,355,894 $ 2,550,991,161 $ 2,259,199,481

Approved and authorised for issue by the Trustee on

))) For and on behalf of ) Sun Life Pension Trust Limited ))

The notes on pages 92 to 127 are an integral part of the financial statements.


85

Statement of comprehensive income for the year ended 31 December 2019 (Expressed in Hong Kong dollars)


Scheme MPF Conservative Portfolio Sun Life MPF Comprehensive

Scheme Capital Guaranteed Portfolio Sun Life MPF Comprehensive




Scheme Growth Portfolio 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

Income

Net gain/(loss) on investments 5 $ - $ - $ 22,476,443 $ (4,360,416) $ 7,716,225 $ (4,335,662) $ 16,578,591 $ (10,238,457) $ 26,805,237 $ (18,397,387) $ 23,989,552 $ (17,278,203) Management fee rebate - - - - 270,853 276,733 430,670 433,136 567,658 601,501 420,648 439,802 Interest income 3,578,613 2,554,691 163 - 46 - 49 - 60 - 55 - Dividend income - - - - - - - - - - - - Other miscellaneous income - - 54 - - - - - - - - - Exchange gain/(loss) - - - - - - - - - - - -

Total income/(loss) $ 3,578,613 $ 2,554,691 $ 22,476,660 $ (4,360,416) $ 7,987,124 $ (4,058,929) $ 17,009,310 $ (9,805,321) $ 27,372,955 $ (17,795,886) $ 24,410,255 $ (16,838,401) ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------Expenses

Accounting fees 8(a) $ (6,249) $ (9,800) $ (9,800) $ (9,800) $ (9,800) $ (9,800) $ (9,800) $ (9,800) $ (9,800) $ (9,800) $ (9,800) $ (9,800) Administration fees 7(a) (2,089,846) (1,666,484) (4,126,195) (4,138,856) (839,371) (846,357) (1,340,229) (1,317,235) (1,765,512) (1,825,352) (1,309,817) (1,333,133) Auditor’s remuneration (48,059) (23,521) (50,875) (47,649) (50,875) (47,649) (50,875) (47,649) (50,875) (47,649) (50,875) (47,649) Bank charges (1,733) (1,501) (615) (615) (615) (615) (615) (615) (615) (615) (615) (615)Custodian fees - - - - - - - - - - - -Fund administration fees 8(a) (93,289) (42,015) (173,735) (174,268) (35,342) (35,636) (56,431) (55,463) (74,337) (76,857) (55,150) (56,132) MPFA indemnity insurance charges (6,953) (2,703) (12,842) (13,084) (2,577) (2,649) (3,972) (4,178) (5,370) (5,949) (3,922) (4,241) Legal and professional fees - - (13,191) (5,749) (2,732) (1,168) (4,303) (1,851) (5,553) (2,643) (4,084) (1,899) Management fees 8(b) (324,216) (312,775) - - - - - - - - - - MPFA contribution enquiry fees - (79) - (550) - (113) - (178) - (249) - (181)Other expenses (187,858) (101,459) (62,610) (67,408) (12,853) (13,952) (20,533) (21,619) (26,640) (29,778) (19,768) (21,740)Publishing fees (445) (2,692) (4,450) (5,340) (4,450) (5,340) (4,450) (5,340) (4,450) (5,340) (4,450) (5,340)SFC annual fees - - (625) (625) (625) (625) (625) (625) (625) (625) (625) (625) Sponsor fees 7(b) - - (434,336) (435,669) (136,066) (137,199) (437,338) (429,835) (286,199) (295,899) (358,476) (364,858) Transaction cost - - - - - - - - - - - - Trustee fees 7(c) (324,216) (312,775) (651,505) (653,504) (132,532) (133,635) (211,615) (207,985) (278,765) (288,213) (206,813) (210,495) Valuation fees 8(a) - - (6,500) (6,500) (6,500) (6,500) (6,500) (6,500) (6,500) (6,500) (6,500) (6,500)

Total operating expense $ (3,082,864) $ (2,475,804) $ (5,547,279) $ (5,559,617) $ (1,234,338) $ (1,241,238) $ (2,147,286) $ (2,108,873) $ (2,515,241) $ (2,595,469) $ (2,030,895) $ (2,063,208) ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------Increase/(decrease) in net assets

attributable to members $ 495,749 $ 78,887 $ 16,929,381 $ (9,920,033) $ 6,752,786 $ (5,300,167) $ 14,862,024 $ (11,914,194) $ 24,857,714 $ (20,391,355) $ 22,379,360 $ (18,901,609)


86

Statement of comprehensive income for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars)




Sun Life MPF Comprehensive Scheme US & Hong Kong Equity

Portfolio Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio


Portfolio 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

Income

Net gain/(loss) on investments 5 $ 40,265,326 $ (17,247,438) $ 34,050,261 $ (40,767,813) $ 95,553,660 $ (91,455,082) $ 17,195,290 $ (8,130,603) $ 1,497,677 $ (127,608) $ 8,471,356 $ (2,576,313) Management fee rebate 574,473 638,508 855,556 943,994 1,917,857 2,158,123 - - - - - - Interest income 69 - 104 - 343 - 323 33 79 - 92 - Dividend income - - - - - - 2,453,185 2,205,208 - - - - Other miscellaneous income 652 - - - - - - - - - - - Exchange gain/(loss) - - - - - - 870 (1,350) - - - -

Total income/(loss) $ 40,840,520 $ (16,608,930) $ 34,905,921 $ (39,823,819) $ 97,471,860 $ (89,296,959) $ 19,649,668 $ (5,926,712) $ 1,497,756 $ (127,608) $ 8,471,448 $ (2,576,313) ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------Expenses

Accounting fees 8(a) $ (9,800) $ (9,800) $ (9,800) $ (9,800) $ (9,800) $ (9,800) $ - $ - $ - $ - $ - $ - Administration fees 7(a) (1,597,152) (1,584,121) (2,528,960) (2,711,072) (5,648,347) (6,208,411) (839,315) (771,911) (69,313) (48,943) (247,480) (152,290) Auditor’s remuneration (50,875) (47,649) (50,875) (47,649) (50,875) (47,649) - - (7,317) (3,608) (23,252) (10,359) Bank charges (615) (615) (615) (615) (615) (615) - - - - - - Custodian fees - - - - - - - - (6,897) (4,870) (24,624) (15,153) Fund administration fees 8(a) (67,249) (66,700) (106,482) (114,150) (237,825) (261,407) - - - - - - MPFA indemnity insurance charges (4,813) (5,126) (7,370) (9,108) (16,592) (20,929) - - (79) (31) (913) (279) Legal and professional fees (5,081) (2,266) (7,644) (4,111) (17,240) (9,403) - - (81) (8) (939) (71) Management fees 8(b) - - - - - - (117,350) (117,554) (43,321) (30,590) (154,675) (95,181) MPFA contribution enquiry fees - (212) - (380) - (876) - - - (1) - (8) Other expenses (24,470) (25,750) (37,558) (44,149) (82,677) (101,427) - - (379) (137) (4,399) (1,233) Publishing fees (4,450) (5,340) (4,450) (5,340) (4,450) (5,340) - - (790) (383) (2,510) (1,100) SFC annual fees (625) (625) (625) (625) (625) (625) - - (92) (45) (294) (129) Sponsor fees 7(b) (571,612) (566,949) (1,331,032) (1,426,880) (3,091,727) (3,398,288) - - - - - - Transaction cost - - - - - - (342,104) (304,896) - - - - Trustee fees 7(c) (252,182) (250,124) (399,309) (428,064) (891,844) (980,275) (132,524) (121,881) (10,397) (7,342) (37,122) (22,844) Valuation fees 8(a) (6,500) (6,500) (6,500) (6,500) (6,500) (6,500) - - - - - -

Total operating expense $ (2,595,424) $ (2,571,777) $ (4,491,220) $ (4,808,443) $ (10,059,117) $ (11,051,545) $ (1,431,293) $ (1,316,242) $ (138,666) $ (95,958) $ (496,208) $ (298,647) ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------Increase/(decrease) in net assets

attributable to members $ 38,245,096 $ (19,180,707) $ 30,414,701 $ (44,632,262) $ 87,412,743 $ (100,348,504) $ 18,218,375 $ (7,242,954) $ 1,359,090 $ (223,566) $ 7,975,240 $ (2,874,960)


87

Statement of comprehensive income for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Note Scheme Total 2019 2018 2019 2018 Income Net gain/(loss) on investments 5 $ - $ - $ 294,599,618 $ (214,914,982) Management fee rebate - - 5,037,715 5,491,797 Interest income 89 114 3,580,085 2,554,838 Dividend income - - 2,453,185 2,205,208 Other miscellaneous income - - 706 - Exchange gain/(loss) - - 870 (1,350)

Total income/(loss) $ 89 $ 114 $ 305,672,179 $ (204,664,489) ------------------------- ------------------------- ------------------------- ------------------------- Expenses Accounting fees 8(a) $ - $ - $ (84,649) $ (88,200) Administration fees 7(a) - - (22,401,537) (22,604,165) Auditor’s remuneration - - (485,628) (418,680) Bank charges (800) (6,600) (7,453) (13,021) Custodian fees - - (31,521) (20,023) Fund administration fees 8(a) - - (899,840) (882,628) MPFA indemnity insurance charges - - (65,403) (68,277) Legal and professional fees - - (60,848) (29,169) Management fees 8(b) - - (639,562) (556,100) MPFA contribution enquiry fees - - - (2,827) Other expenses - - (479,745) (428,652) Publishing fees - - (39,345) (46,895) SFC annual fees - - (5,386) (5,174) Sponsor fees 7(b) - - (6,646,786) (7,055,577) Transaction cost - - (342,104) (304,896) Trustee fees 7(c) - - (3,528,824) (3,617,137) Valuation fees 8(a) - - (52,000) (52,000)

Total operating expenses $ (800) $ (6,600) $ (35,770,631) $ (36,193,421)

------------------------- ------------------------- ------------------------- -------------------------

Increase/(decrease) in net assets attributable to members $ (711) $ (6,486) $ 269,901,548 $ (240,857,910)



88

Statement of changes in net assets attributable to members for the year ended 31 December 2019 (Expressed in Hong Kong dollars)


Scheme MPF Conservative Portfolio Sun Life MPF Comprehensive Scheme

Capital Guaranteed Portfolio Sun Life MPF Comprehensive




Scheme Growth Portfolio 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Balance at the beginning of the year $ 214,185,283 $ 211,006,412 $ 428,541,767 $ 437,164,307 $ 83,507,295 $ 88,785,393 $ 129,408,537 $ 140,739,066 $ 172,100,229 $ 200,900,473 $ 124,842,334 $ 144,390,900 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Proceeds on subscriptions of units 3,12 $ 51,273,634 $ 76,924,487 $ 45,366,366 $ 72,783,574 $ 10,616,287 $ 17,146,689 $ 19,714,844 $ 22,885,393 $ 19,723,755 $ 23,402,150 $ 14,562,350 $ 17,104,736 Payments on redemptions of units 3,13 (48,264,510) (73,824,503) (57,444,431) (71,486,081) (9,523,894) (17,124,620) (13,146,434) (22,301,728) (20,167,322) (31,811,039) (12,807,977) (17,751,693)

Net subscriptions $ 3,009,124 $ 3,099,984 $ (12,078,065) $ 1,297,493 $ 1,092,393 $ 22,069 $ 6,568,410 $ 583,665 $ (443,567) $ (8,408,889) $ 1,754,373 $ (646,957) ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Increase/(decrease) in net assets

attributable to members $ 495,749 $ 78,887 $ 16,929,381 $ (9,920,033) $ 6,752,786 $ (5,300,167) $ 14,862,024 $ (11,914,194) $ 24,857,714 $ (20,391,355) $ 22,379,360 $ (18,901,609)

----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- Balances at the end of the year $ 217,690,156 $ 214,185,283 $ 433,393,083 $ 428,541,767 $ 91,352,474 $ 83,507,295 $ 150,838,971 $ 129,408,537 $ 196,514,376 $ 172,100,229 $ 148,976,067 $ 124,842,334


89

Statement of changes in net assets attributable to members for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars)







Portfolio 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Balance at the beginning of the year $ 146,382,869 $ 172,173,915 $ 248,414,172 $ 312,308,896 $ 552,404,912 $ 714,477,881 $ 82,232,737 $ 88,271,244 $ 14,494,638 $ 8,072,815 $ 45,328,814 $ 26,106,377 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Proceeds on subscriptions of units 3,12 $ 19,409,785 $ 17,669,501 $ 28,004,203 $ 27,339,561 $ 64,884,320 $ 79,637,145 $ 24,818,238 $ 21,986,384 $ 13,045,218 $ 12,416,740 $ 39,050,147 $ 34,117,687 Payments on redemptions of units 3,13 (16,616,338) (24,279,840) (29,660,594) (46,602,023) (89,362,949) (141,361,610) (17,275,498) (20,781,937) (7,842,472) (5,771,351) (12,569,691) (12,020,290)

Net subscriptions $ 2,793,447 $ (6,610,339) $ (1,656,391) $ (19,262,462) $ (24,478,629) $ (61,724,465) $ 7,542,740 $ 1,204,447 $ 5,202,746 $ 6,645,389 $ 26,480,456 $ 22,097,397 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Increase/(decrease) in net assets

attributable to members $ 38,245,096 $ (19,180,707) $ 30,414,701 $ (44,632,262) $ 87,412,743 $ (100,348,504) $ 18,218,375 $ (7,242,954) $ 1,359,090 $ (223,566) $ 7,975,240 $ (2,874,960)

---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Balances at the end of the year $ 187,421,412 $ 146,382,869 $ 277,172,482 $ 248,414,172 $ 615,339,026 $ 552,404,912 $ 107,993,852 $ 82,232,737 $ 21,056,474 $ 14,494,638 $ 79,784,510 $ 45,328,814


90

Statement of changes in net assets attributable to members for the year ended 31 December 2019 (continued) (Expressed in Hong Kong dollars) Note Scheme Total 2019 2018 2019 2018 Balance at the beginning of the year $ 17,355,894 $ 17,451,484 $ 2,259,199,481 $ 2,561,849,163 -------------------------- -------------------------- -------------------------- -------------------------- Proceeds on subscriptions of units 3,12 $ (103,235,204) $ (167,140,026) $ 247,233,943 $ 256,274,021 Payments on redemptions of units 3,13 109,338,299 167,050,922 (225,343,811) (318,065,793)

Net subscriptions $ 6,103,095 $ (89,104) $ 21,890,132 $ (61,791,772) -------------------------- -------------------------- -------------------------- -------------------------- Increase/(decrease) in net assets attributable to

members $ (711) $ (6,486) $ 269,901,548 $ (240,857,910)

-------------------------- -------------------------- -------------------------- --------------------------

Balances at the end of the year $ 23,458,278 $ 17,355,894 $ 2,550,991,161 $ 2,259,199,481



91

Cash flow statement for the year ended 31 December 2019 (Expressed in Hong Kong dollars) Note 2019 2018 Cash flows from operating activities Increase/(decrease) in net assets attributable to

members $ 269,901,548 $ (240,857,910) Adjustments for:

Net (increase)/decrease in investments (281,993,900) 302,846,774 Net decrease/(increase) in bank deposits with

original maturity over 3 months 12,387,155 (36,882,975) Change in amounts receivable/payable on

sales/purchases of investments 1,571,214 (56,243) Net increase in interest and other receivables (250,076) (86,428) (Decrease)/increase in accruals and other

payables (496,667) 612,083

Net cash inflow from operating activities $ 1,119,274 $ 25,575,301 ------------------- ------------------- Cash flows from financing activities Contributions and transfers in received $ 241,130,847 $ 256,363,123 Benefits and transfers out paid 9 (227,657,405) (314,338,118) Forfeitures paid 9 (2,428,740) (3,252,496)

Net cash inflow/(outflow) from financing activities $ 11,044,702 $ (61,227,491)

------------------- -------------------

Net increase/(decrease) in cash and cash equivalents $ 12,163,976 $ (35,652,190)

Cash and cash equivalents

at the beginning of the year $ 181,702,936 $ 217,355,126

Cash and cash equivalents at the end of the year $ 193,866,912 $ 181,702,936

Analysis of balance of cash and cash equivalents:

Cash at bank $ 227,374,742 $ 227,597,921 Less: Bank deposits with original maturity

over 3 months (33,507,830) (45,894,985)

$ 193,866,912 $ 181,702,936



92

Notes to the financial statements (Expressed in Hong Kong dollars)

1 The Scheme Sun Life MPF Comprehensive Scheme (the “Scheme”) is a master trust scheme established and governed by a Trust Deed dated 31 January 2000, as amended from time to time. The Scheme is registered under Section 21 of the Mandatory Provident Fund Schemes Ordinance (the “MPF Ordinance”) and is required to comply with the MPF Ordinance and the relevant regulations, guidelines and codes issued by the Mandatory Provident Fund Schemes Authority (the “MPFA” or “Authority”). The Scheme consists of twelve constituent funds which are presented separately on the face of the statement of assets and liabilities attributable to members, the statement of comprehensive income and the statement of changes in net assets attributable to members. The twelve constituent funds operating in the current and previous year are: (1) Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio (2) Sun Life MPF Comprehensive Scheme Capital Guaranteed Portfolio (3) Sun Life MPF Comprehensive Scheme Stable Portfolio (4) Sun Life MPF Comprehensive Scheme Stable Growth Portfolio (5) Sun Life MPF Comprehensive Scheme Balanced Growth Portfolio (6) Sun Life MPF Comprehensive Scheme Growth Portfolio (7) Sun Life MPF Comprehensive Scheme International Equity Portfolio (8) Sun Life MPF Comprehensive Scheme Asian Equity Portfolio (9) Sun Life MPF Comprehensive Scheme Hong Kong Equity Portfolio (10) Sun Life MPF Comprehensive Scheme US & Hong Kong Equity Portfolio (11) Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio (12) Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio


93

1 The Scheme (continued) The “Scheme” column represents: (i) the movement between the current year-end and prior year-end for contributions

receivable and contributions surcharge receivable. Contributions receivable and contributions surcharge receivable are contributions due, but not yet received from employers and members as at year-end;

(ii) the timing difference between contribution and redemption requests being received by

the Scheme and the transactions being processed by the constituent funds; (iii) expenses charged to, and income received by, the Scheme and not attributable to

specific constituent funds; and (iv) the elimination of the impact of fund switching between constituent funds and fund

classes. As at 31 December 2019 with the exception of the Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio, the constituent funds invested in one or more underlying funds managed by various investment managers. The underlying funds in which the constituent funds invest shall be referred to as the “Investment Funds”. All the Investment Funds are either pooled investments under Part 4 of Schedule 1 of the Mandatory Provident Fund Schemes (General) Regulation (the “Regulation”) or index-tracking collective investment schemes approved by the Authority pursuant to the Regulation (“Approved ITCISs”).


94

2 Summary of significant accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Statement of compliance

The financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (the “HKFRSs”), which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (the “HKASs”) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”), accounting principles generally accepted in Hong Kong, the relevant provisions of the Trust Deed, as amended from time to time, and the relevant disclosure requirements set out in the MPF Ordinance, the Hong Kong Mandatory Provident Fund Schemes (General) Regulation (the “General Regulation”), the Hong Kong Code on MPF Investments Funds (the “MPF Code”) and Guideline II.4 (the “MPF Guideline”) issued by the Hong Kong Mandatory Provident Fund Schemes Authority. A summary of the significant accounting policies adopted by the Scheme is set out below. The HKICPA has issued certain new and revised HKFRSs that are first effective or available for early adoption for the current accounting period of the Scheme. Note 2(c) provides information on any changes in accounting policies resulting from initial application of these developments to the extent that they are relevant to the Scheme for the current and prior accounting periods reflected in these financial statements.

(b) Basis of preparation The financial statements are presented in Hong Kong dollars. The measurement basis used in the preparation of the financial statements is historical cost basis except that financial assets and financial liabilities are stated at their fair value as explained in the accounting policies set out below. The preparation of financial statements in conformity with the HKFRSs requires the Trustee to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expense. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.


95

2 Summary of significant accounting policies (continued) (c) Changes in accounting policies

A number of new standards are effective from 1 January 2019 but they do not have a material effect on the Scheme’s financial statements. The Scheme has consistently applied the accounting policies as set out in note 2 to all periods presented in these financial statements.

(d) Financial assets and financial liabilities (i) Recognition and initial measurement

Financial assets and financial liabilities at fair value through profit or loss (“FVTPL”) are initially recognised on the trade date, which is the date on which the Scheme becomes a party to the contractual provisions of the instrument. Other financial assets and financial liabilities are recognised on the date on which they are originated. A financial asset or financial liability is measured initially at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue.

(ii) Classification On initial recognition, the Scheme classifies financial assets as measured at amortised cost or FVTPL. A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: - it is held within a business model whose objective is to hold assets to collect contractual

cash flows; and - its contractual terms give rise on specified dates to cash flows that are solely payments of

principal and interest (“SPPI”). All other financial assets of the Scheme are measured at FVTPL.


96

2 Summary of significant accounting policies (continued) (d) Financial assets and financial liabilities (continued) (ii) Classification (continued)

Business model assessment In making an assessment of the objective of the business model in which a financial asset is held, the Scheme considers all of the relevant information about how the business is managed. The Scheme has determined that it has two business models: - Held-to-collect: this includes cash at bank, amounts receivable on sales of investments,

amounts receivable on subscriptions, contributions receivable, dividend receivables, interest receivables and other receivables.

- Other: this includes investments where their performance is evaluated on a fair value

basis with frequent sales taking place. Assessment whether contractual cash flows are SPPI For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin. In assessing whether the contractual cash flows are SPPI, the Scheme considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.

(iii) Measurement All investments have been designated by the Trustee as “financial assets at fair value through profit or loss” at inception. Purchases and sales of investments are accounted for on the trade date basis. Investments are initially recognised at fair value, excluding transaction costs which are expensed as incurred, and are subsequently re-measured at fair value. Realised and unrealised gains and losses on investments are included in the statement of comprehensive income in the period in which they arise. Investments are derecognised when the rights to receive cash flows from the investments have expired or the Scheme has transferred substantially all risks and rewards of ownership.


97

2 Summary of significant accounting policies (continued) (d) Financial assets and financial liabilities (continued) (iii) Measurement (continued)

Investments that are listed or traded on an exchange are fair valued based on quoted bid prices. Investments which are not listed on an exchange are valued by using bid price quotes from brokers. Investments in debt securities are presented inclusive of accrued interest. Forward foreign exchange contracts are recognised initially on trade date at fair value. Outstanding forward foreign exchange contracts are valued at the year end date by reference to the forward rate of exchange applicable to the outstanding term of the contracts. Unrealised gains and losses on outstanding contracts and realised gains and losses on closed contracts are included in the “net gain/(loss) on investments” in the statement of comprehensive income.

(iv) Fair value measurement principles ‘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 in the principal or, in its absence, the most advantageous market to which the Scheme has access at that date. The fair value of a liability reflects its non-performance risk. When available, the Scheme measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as ‘active’ if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The Scheme measures instruments quoted in an active market at a bid price. If there is no quoted price in an active market, then the Scheme uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction. The Scheme recognises transfers between levels of the fair value hierarchy as at the end of the reporting period during which the change has occurred.

(v) Amortised cost measurement The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initial amount recognised and the maturity amount and, for financial assets, adjusted for any loss allowance.


98

2 Summary of significant accounting policies (continued) (d) Financial assets and financial liabilities (continued) (vi) Impairment

The Scheme recognises loss allowances for expected credit loss on financial assets measured at amortised cost. A loss allowance on financial assets carried at amortised cost would be recognised with reference to credit losses expected to arise on the financial asset, discounted where the effect would be material, and taking into account whether the credit risk of the financial asset had increased significantly since initial recognition. At each reporting date, the Scheme assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. The gross carrying amount of a financial asset is written off when the Scheme has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof.

(vii) Derecognition

The Scheme derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Scheme neither transfer nor retain substantially all of the risks and rewards of ownership and do not retain control of the financial asset. On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset that is derecognised) and the consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss. Any interest in such transferred financial assets that is created or retained by the Scheme is recognised as a separate asset or liability. The Scheme enters into transactions whereby they transfer assets recognised on the statement of assets and liabilities, but retain either all or substantially all of the risks and rewards of the transferred assets or a portion of them. If all or substantially all of the risks and rewards are retained, then the transferred assets are not derecognised. Transfers of assets with retention of all or substantially all of the risks and rewards include sale and repurchase transactions. The Scheme derecognises a financial liability when the contractual obligations are discharged or cancelled, or expire.


99

2 Summary of significant accounting policies (continued)

(d) Financial assets and financial liabilities (continued)

(viii) Offsetting Financial assets and financial liabilities are offset and the net amount presented in the statement of assets and liabilities when, and only when, the Scheme has a legal right to offset the amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Income and expenses are presented on a net basis for gains and losses from financial instruments at fair value through profit or loss and foreign exchange gains and losses.

(e) Income and expenses Realised and unrealised gains or losses on investments are included in the statement of comprehensive income. Realised gains or losses include net gains or losses on contracts which have been settled or for which offsetting contracts have been entered into. Interest income on assets other than those designated by the trustee as “financial assets at fair value through profit or loss” at inception is recognised on a time-apportioned basis using the effective interest method. Expenses are accounted for on an accruals basis.

(f) Translation of foreign currencies

Functional and presentation currency Items included in the financial statements of the Scheme and its constituent funds are measured using the currency of the primary economic environment in which they operate (the “functional currency”). This is the Hong Kong dollar as all contributions and benefit payments, subscriptions and redemptions of units, reporting to the members as well as settlement of fees and expenses are carried out in Hong Kong dollars. The Scheme and its constituent funds have adopted the Hong Kong dollar as their presentation currency as all members are based in Hong Kong.

(g) Subscription and redemption of units The price at which units are subscribed or redeemed is calculated by reference to the net asset value per unit as at the close of business on the relevant dealing day. Proceeds and payments for units subscribed and redeemed are included in the statement of changes in net assets attributable to members of the constituent funds.


100


(h) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, having been within three months of maturity at acquisition, net of bank overdrafts, if any, for the purpose of the cash flow statement.

(i) Amounts receivable on sales of investments Amounts receivable on sales of investments represent receivables for investments sold that have been contracted for but not yet delivered by the end of the year. Amounts receivable on sales of investments are initially measured at fair value plus incremental direct transaction costs, and subsequently measured at their amortised cost using the effective interest rate.

(j) Contributions Contributions are accounted for on an accrual basis.

(k) Benefits Benefits are accounted for on an accrual basis.

(l) Transfer values Transfer values are accounted for on the effective date of transfer.

(m) Forfeitures

If a member ceases to be a member, the part of the employer’s voluntary balance not otherwise disposed of in accordance with the rules of the Scheme may be applied in reducing the future contributions of the employer, or in such other manner as the trustee may determine, having consulted the employers (including payment to the employers). Forfeitures arising from such cases which have not been designated for the benefit of existing members and which have not been returned to the employers would be treated as liabilities of the Scheme.


101


(n) Related parties (1) A person, or a close member of that person’s family, is related to the Scheme if that

person: (i) has control or joint control over the Scheme; (ii) has significant influence over the Scheme; or (iii) is a member of the key management personnel of the Scheme.

(2) An entity is related to the Scheme if any of the following conditions applies:

(i) The entity and the Scheme are members of the same group (which means that

each parent, subsidiary and fellow subsidiary is related to the others); (ii) One entity is an associate or joint venture of the other entity (or an associate or

joint venture of a member of a group of which the other entity is a member); (iii) Both entities are joint ventures of the same third party; (iv) One entity is a joint venture of a third entity and the other entity is an associate of

the third entity; (v) The entity is a post-employment benefit plan for the benefit of employees of an

entity related to the Scheme; (vi) The entity is controlled or jointly controlled by a person identified in (1); or (vii) A person identified in (1)(i) has significant influence over the entity or is a

member of the key management personnel of the entity (or of a parent of the entity).

(viii) The entity, or any member of a group of which it is a part, provides key

management personnel services to the Scheme or to the Scheme’s parent. Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.


102

2 Summary of significant accounting policies (continued) (o) Units in issue

The Scheme classifies financial instruments issued as financial liabilities or equity instruments in accordance with the substance of the contractual terms of the instruments. A puttable financial instrument that includes a contractual obligation for the Scheme to repurchase or redeem that instrument for cash or another financial asset is classified as equity instruments if it meets all of the following conditions: - it entitles the holder to a pro rata share of the Scheme’s net assets in the event of its

liquidation; - it is in the class of instruments that is subordinate to all other classes of instruments; - all financial instruments in the class of instruments that is subordinate to all other classes

of instruments have identical features; - apart from the contractual obligation for the Scheme to repurchase or redeem the

instrument for cash or another financial asset, the instrument does not include any other features that would require classification as a liability; and

- the total expected cash flows attributable to the instrument over its life are based

substantially on the profit or loss, the change in the recognised net assets or the change in the fair value of the recognised and unrecognised net assets of the Scheme over the life of the instrument.

In addition to the instrument having all the above features, the Scheme must have no other financial instrument or contract that has: - total cash flows based substantially on the profit or loss, the change in the recognised net

assets or change in the fair value of the recognised and unrecognised net assets of the Scheme; and

- the effect of substantially restricting or fixing the residual return to the puttable instrument

holders. The redeemable units are not in the class of instruments that are subordinate to all other classes of instruments which have identical features. Therefore, they do not meet the criteria for equity classification and therefore are classified as financial liabilities. They are measured at the present value of the redemption amounts.


103

3 Number of units in issue 2019 2018 Sun Life MPF Comprehensive Scheme

MPF Conservative Portfolio Balance at the beginning of the year 19,235,027.8853 18,956,470.3448 Units issued 4,600,589.3262 6,911,439.7363 Units redeemed (4,330,494.3162) (6,632,882.1958)

Balance at the end of the year 19,505,122.8953 19,235,027.8853


Balance at the beginning of the year 25,996,965.4469 25,925,221.9695 Units issued 2,677,277.8712 4,355,941.2607 Units redeemed (3,390,011.4270) (4,284,197.7833)



Balance at the beginning of the year 6,025,710.5189 6,038,543.4730 Units issued 730,840.5655 1,176,787.8319 Units redeemed (655,545.7355) (1,189,620.7860)



104

3 Number of units in issue (continued) 2019 2018 Sun Life MPF Comprehensive Scheme

Stable Growth Portfolio Balance at the beginning of the year 8,902,625.3254 8,870,169.2590 Units issued 1,274,442.9611 1,462,816.7960 Units redeemed (849,774.6696) (1,430,360.7296)



Balance at the beginning of the year 9,211,427.3359 9,621,463.4923 Units issued 978,638.2280 1,141,113.4554 Units redeemed (1,002,320.3487) (1,551,149.6118)



Balance at the beginning of the year 7,647,516.2652 7,680,794.3751 Units issued 815,140.8516 928,483.3337 Units redeemed (715,906.3569) (961,761.4436)



Balance at the beginning of the year 8,543,714.0490 8,883,561.1060 Units issued 992,615.0658 917,885.3572 Units redeemed (856,420.8622) (1,257,732.4142)



Balance at the beginning of the year 8,874,662.3677 9,481,256.0750 Units issued 938,430.3372 870,155.9323 Units redeemed (993,312.2258) (1,476,749.6396)



105

3 Number of units in issue (continued) 2019 2018 Sun Life MPF Comprehensive Scheme

Hong Kong Equity Portfolio Balance at the beginning of the year 13,953,724.6450 15,289,989.6974 Units issued 1,502,213.0339 1,759,192.5627 Units redeemed (2,066,949.1580) (3,095,457.6151)






Balance at the beginning of the year 1,446,221.3696 792,221.7322 Units issued 1,228,128.4809 1,225,224.9668 Units redeemed (742,581.8446) (571,225.3294)






106

4 Financial risk management The Scheme and its constituent funds are exposed to various risks which are discussed below.

(a) Market risk The Scheme’s investment objective is to provide members with reasonable investment return or capital appreciation from their investment in accordance to the investment policies as set out in the investment report. The holding of securities and investing activities undertaken pursuant to this objective involves certain inherent risks of global investment markets.

(b) Price risk Price risk is the risk that value of investments will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. The Scheme is exposed to other price risk arising from changes in net assets of the underlying sub-funds. The Sub-Funds strive to invest in strong businesses with quality management and at sensible prices. Price risk is mitigated and monitored by the investment manager of the Sub-Funds on a regular basis by constructing a diversified portfolio of investments across difference issuers, sectors and markets.


107

4 Financial risk management (continued) (b) Price risk (continued)

Sensitivity analysis As at the reporting date, the investments in sub-funds held by each constituent fund were as follows. A 5% (2018: 5%) increase in prices of the investments held by each constituent fund at the reporting date, with all other variables held constant, would have increased the net assets of the respective constituent fund and the changes in net assets attributable to members by the amount shown below. A 5% (2018: 5%) decrease in prices would have an equal but opposite effect. The analysis is performed on the same basis for 2018. As at 31 December 2019 Sun Life MPF

Comprehensive Scheme Capital

Guaranteed Portfolio

Sun Life MPF Comprehensive Scheme Stable

Portfolio


Growth Portfolio

Sun Life MPF Comprehensive

Scheme Balanced

Growth Portfolio

Sun Life MPF Comprehensive Scheme Growth

Portfolio


Scheme International

Equity Portfolio


Scheme Asian Equity Portfolio


Scheme Hong Kong Equity

Portfolio


Scheme US & Hong Kong

Equity Portfolio

Sun Life MPF Comprehensive Scheme Age 65

Plus Portfolio


Scheme Core Accumulation

Portfolio Investments $ 433,362,031 $ 91,294,966 $ 150,546,072 $ 196,288,736 $ 148,882,365 $ 187,640,095 $ 276,837,488 $ 614,600,968 $ 107,968,617 $ 20,429,851 $ 79,164,199 Increase in net assets and changes in net

assets attributable to members 21,668,102 4,564,748 7,527,304 9,814,437 7,444,118 9,382,005 13,841,874 30,730,048 5,398,431 1,021,493 3,958,210

As at 31 December 2018 Sun Life MPF

Comprehensive Scheme Capital

Guaranteed Portfolio


Portfolio


Growth Portfolio


Scheme Balanced

Growth Portfolio


Portfolio


Scheme International

Equity Portfolio


Scheme Asian Equity Portfolio


Scheme Hong Kong Equity

Portfolio


Scheme US & Hong Kong

Equity Portfolio


Plus Portfolio



Portfolio Investments $ 428,100,483 $ 83,389,392 $ 129,516,240 $ 171,887,475 $ 124,807,002 $ 146,536,172 $ 248,556,654 $ 551,378,926 $ 82,052,717 $ 14,181,784 $ 44,614,643 Increase in net assets and changes in net

assets attributable to members 21,405,024 4,169,470 6,475,812 8,594,374 6,240,350 7,326,809 12,427,833 27,568,946 4,102,636 709,089 2,230,732


108

4 Financial risk management (continued) (c) Foreign currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The functional currency of all constituent funds is the Hong Kong dollars (“HKD”). As at 31 December 2019 and 2018, the constituent funds invest in APIFs denominated in HKD or USD and are not subject to direct currency risk. The underlying APIFs may directly or indirectly invest in a variety of financial instruments denominated in currencies other than HKD and USD, which may expose the constituents funds' investments to indirect currency risk. The investment manager of the underlying APIFs have policies and procedures to manage portfolios effectively and mitigate the currency risk. Details are provided in the financial statements of the underlying APIFs.

(d) Interest rate risk Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The majority of the financial assets and liabilities of the Scheme and its underlying constituent funds are non-interest bearing. Their interest bearing financial assets comprise bank balances. The trustee considers that these funds are not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. As a result, no sensitivity analysis on interest rate movements is required.

(e) Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Scheme and its underlying constituent funds are exposed to credit risk on financial instruments with a maximum exposure equal to carrying amount of these instruments. It is the Scheme’s policy to engage only with internally approved counterparties. The Trustee continuously monitors the credit on financial instruments and counterparties and does not expect any material losses due to credit risk.


109

4 Financial risk management (continued) (f) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Scheme is exposed to liquidity risk of benefit payments. It therefore invests the majority of its assets in underlying investments that are traded in an active market and can be readily disposed of. The Scheme’s objective with regard to liquidity is to ensure continuity of funding. The assets of the Scheme comprise mainly of readily realisable securities which can be sold freely to meet funding commitments if necessary. Liquidity positions are monitored on a regular basis and action taken as necessary to maintain an adequate level of liquidity to meet all known funding requirements. Apart from liquidity risk related to benefit payments, the Scheme does not consider that there is any other significant liquidity risk.

(g) Fair value information As at 31 December 2019 and 2018, the only financial investments of the Scheme carried at fair value were investments. The major method and assumptions used in estimating the fair values are stated in note 2(d)(iv) to the financial statements. The carrying amounts of the Scheme’s financial instruments carried at cost or amortised cost are not materially different from their fair values as at 31 December 2019 and 2018.

5 Net gain/(loss) on investments 2019 2018 Sun Life MPF Comprehensive Scheme Capital

Guaranteed Portfolio Change in unrealised gain or loss in value of

investments $ 16,494,132 $ (10,469,226) Realised gain on sale of investments 5,982,311 6,108,810

$ 22,476,443 $ (4,360,416)


110

5 Net gain/(loss) on investments (continued) 2019 2018 Sun Life MPF Comprehensive Scheme

Stable Portfolio Change in unrealised gain or loss in value of


$ 7,716,225 $ (4,335,662)


Change in unrealised gain or loss in value of


$ 16,578,591 $ (10,238,457)




$ 26,805,237 $ (18,397,387)




$ 23,989,552 $ (17,278,203)




$ 40,265,326 $ (17,247,438)


111

5 Net gain/(loss) on investments (continued) 2019 2018 Sun Life MPF Comprehensive Scheme Asian

Equity Portfolio Change in unrealised gain or loss in value of


$ 34,050,261 $ (40,767,813)




$ 95,553,660 $ (91,455,082)




$ 17,195,290 $ (8,130,603)


Change in unrealised gain or loss in value of investments $ 1,154,088 $ (151,659)

Realised gain on sale of investments 343,589 24,051

$ 1,497,677 $ (127,608)


Change in unrealised gain or loss in value of investments $ 7,906,093 $ (2,903,573)

Realised gain on sale of investments 565,263 327,260

$ 8,471,356 $ (2,576,313)


112

6 Involvement with unconsolidated structured entities The Scheme has concluded that the APIFs and approved ITCISs in which its constituent funds invest, but that they do not consolidate, meet the definition of structured entities because: - the voting rights in the APIFs and the ITCISs are not dominant rights in deciding who

controls them because they relate to administrative tasks only; - each APIF’s and the ITCIS’s activities are restricted by its prospectus; and - the APIFs and the ITCIS have narrow and well-defined objectives to provide investment

opportunities to investors. The table below describes the types of structured entities that the constituent funds do not consolidate but in which they hold an interest. Type of structured entity Nature and purpose

Interest held by the constituent funds

Approved pooled investment

funds and approved index-tracking collective investment schemes.

To manage assets on behalf of third party investors and generate fees for the investment managers. Financed through the issue of units to investors.

Investment in units issued by the funds.

The table below sets out interest held by the constituent funds in unconsolidated structured entities. The maximum exposure to loss is the carrying amount of the financial assets held. 31 December 2019

Investment in investment funds

Number of

investee funds

Total net assets (Rounded to the nearest million)

Carrying amount included in

financial assets at fair value through profit or

loss Sun Life MPF Comprehensive Scheme Capital

Guaranteed Portfolio - Approved pooled investment fund 1 $ 860,000,000 $ 433,362,031


- Approved pooled investment fund 1 $ 186,000,000 $ 91,294,966


- Approved pooled investment fund 1 $ 1,317,000,000 $ 150,546,072


113

6 Involvement with unconsolidated structured entities (continued) 31 December 2019 (continued)


Number of investee

funds




loss Sun Life MPF Comprehensive Scheme Balanced

Growth Portfolio - Approved pooled investment fund 1 $ 1,398,000,000 $ 196,288,736










- Approved index-tracking collective investment schemes 2 $ 2,380,351,000,000 $ 107,968,617






114

6 Involvement with unconsolidated structured entities (continued) 31 December 2018


Number of investee

funds




loss Sun Life MPF Comprehensive Scheme Capital

Guaranteed Portfolio - Approved pooled investment fund 1 $ 840,000,000 $ 428,100,483
















- Approved index-tracking collective investment schemes 2 $ 1,988,370,000,000 $ 82,052,717






115

6 Involvement with unconsolidated structured entities (continued) During the year, the constituent funds did not provide financial support to the APIFs and the ITCIS and has no intention of providing financial or other support. The constituent funds can redeem units in the APIFs and the ITCIS on a daily basis.

7 Transactions with associates The following is a summary of transactions with related parties during the year. All such transactions were entered into in the ordinary course of business and on normal commercial terms. Except as otherwise disclosed in the financial statements and in this note, the Scheme and its constituent funds did not have any material transactions with the Trustee, the Managers or their associates or delegates during the year.

(a) Administration fees The Administrator, BestServe Financial Limited, is entitled to receive an administration fee calculated at a rate up to 0.95% per annum on the net asset value of the respective constituent funds. The administration fee is borne by the constituent funds. For the Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio, no expenses, fees or charges may be made (other than expenses and charges permitted under the MPF legislation) unless its monthly return is above the savings rate published by the MPFA. Any expenses, fees or charges that are not deducted may be carried forward for up to 12 months. The administration fees payable as at 31 December were as follows: 2019 2018 Sun Life MPF Comprehensive Scheme MPF

Conservative Portfolio $ 174,869 $ 197,777

Sun Life MPF Comprehensive Scheme Capital

Guaranteed Portfolio $ 371,538 $ 369,036

Sun Life MPF Comprehensive Scheme Stable Portfolio $ 77,872 $ 72,366

Sun Life MPF Comprehensive Scheme Stable Growth

Portfolio $ 127,922 $ 111,462


Balanced Growth Portfolio $ 166,323 $ 149,311

Sun Life MPF Comprehensive Scheme Growth Portfolio $ 125,629 $ 109,004


116

7 Transactions with associates (continued) (a) Administration fees (continued)

2019 2018 Sun Life MPF Comprehensive Scheme International

Equity Portfolio $ 158,381 $ 128,349

Sun Life MPF Comprehensive Scheme Asian Equity

Portfolio $ 233,666 $ 215,629

Sun Life MPF Comprehensive Scheme Hong Kong



Age 65 Plus Portfolio $ 7,546 $ 5,137


Core Accumulation Portfolio $ 28,222 $ 15,855

(b) Sponsor fees

The Sponsor is entitled to receive a fee calculated at a rate up to 0.52% per annum of the net asset value of the respective constituent funds. The sponsor fee is borne by the constituent funds. The sponsor fees payable as at 31 December were as follows: 2019 2018 Sun Life MPF Comprehensive Scheme Capital

Guaranteed Portfolio $ 39,109 $ 37,667


Stable Portfolio $ 12,623 $ 11,374

Sun Life MPF Comprehensive Scheme Stable Growth

Portfolio $ 41,743 $ 35,263


117

7 Transactions with associates (continued) (b) Sponsor fees (continued)

2019 2018 Sun Life MPF Comprehensive Scheme Balanced

Growth Portfolio $ 26,962 $ 23,463



Sun Life MPF Comprehensive Scheme International



Asian Equity Portfolio $ 122,982 $ 110,018


Hong Kong Equity Portfolio $ 279,905 $ 255,190

(c) Trustee fees

The Trustee is entitled to receive a fee calculated at a rate up to 1.15% per annum on the net asset value of the respective constituent funds and underlying funds. The trustee fee is borne by the constituent funds. For the Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio, no expenses, fees or charges may be made (other than expenses and charges permitted under the MPF legislation) unless its monthly return is above the savings rate published by the MPFA. Any expenses, fees or charges that are not deducted may be carried forward for up to 12 months. The trustee fees payable as at 31 December were as follows: 2019 2018 Sun Life MPF Comprehensive Scheme

MPF Conservative Portfolio $ 27,611 $ 21,744


Capital Guaranteed Portfolio $ 58,664 $ 45,305




Stable Growth Portfolio $ 20,198 $ 13,665


118

7 Transactions with associates (continued) (c) Trustee fees (continued)

2019 2018 Sun Life MPF Comprehensive Scheme



Portfolio $ 19,836 $ 13,327

Sun Life MPF Comprehensive Scheme International






Sun Life MPF Comprehensive Scheme Age 65 Plus

Portfolio $ 1,132 $ 771

Sun Life MPF Comprehensive Scheme Core

Accumulation Portfolio $ 4,233 $ 2,378


119

8 Fees (a) Fund administration fees, valuation fees and accounting fees

RBC Investor Services Trust Hong Kong Limited, the administrator of the constituent funds ("the CF Administrator"), is charging a flat fee of HK$6,500 and HK$9,800 per annum on each constituent fund in relation to valuation and preparation of financial statements respectively. The flat fees in relation to the valuation and preparation of financial statements are waived for the Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio and Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio. In addition to the flat fee, the CF Administrator is also entitled to receive a fee calculated at a rate up to 0.04% per annum on net asset value of the respective constituent funds. The fund administration fee is borne by the constituent funds. For the Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio, no expenses, fees or charges may be made (other than expenses and charges permitted under the MPF legislation) unless its monthly return is above the savings rate published by the MPFA. Any expenses, fees or charges that are not deducted may be carried forward for up to 12 months. The fund administration fees payable as at 31 December were as follow: 2019 2018 Sun Life MPF Comprehensive Scheme MPF

Conservative Portfolio $ 28,585 $ 7,284

Sun Life MPF Comprehensive Scheme Capital Guaranteed Portfolio $ 15,170 $ 14,596




Stable Growth Portfolio $ 5,225 $ 4,406





Sun Life MPF Comprehensive Scheme International Equity Portfolio $ 6,470 $ 5,063




120

8 Fees (continued)

(a) Fund administration fees, valuation fees and accounting fees (continued) 2019 2018 Sun Life MPF Comprehensive Scheme


(b) Management fees

The Investment Managers are entitled to receive a fee calculated at a rate up to 0.30% per annum on the net asset value of the respective constituent funds. The management fee is borne by the constituent funds. For the Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio, no expenses, fees or charges may be made (other than expenses and charges permitted under the MPF legislation) unless its monthly return is above the savings rate published by the MPFA. Any expenses, fees or charges that are not deducted may be carried forward for up to 12 months. The management fees payable as at 31 December were as follows: 2019 2018 Sun Life MPF Comprehensive Scheme

MPF Conservative Portfolio $ 27,611 $ 27,316


US & Hong Kong Equity Portfolio $ 7,650 $ 5,852


Age 65 Plus Portfolio $ 4,575 $ 3,110

Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio $ 17,119 $ 9,594

(c) Guarantee fee

FWD Life Insurance Company (Bermuda) Limited ("FWD Life") is the guarantor of one of the APIFs, in which the constituent funds invested during the year. A guarantee fee was charged at a rate of 0.22% per annum on the net asset value of the relevant APIF and was reflected in the unit price of the APIF.


121

9 Cash and cash equivalents Reconciliation of liabilities arising from financing activities The table below details changes in the Scheme’s liabilities from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are liabilities for which cash flows were, or future cash flows will be, classified in the cash flow statement as cash flows from financing activities.

Benefits payable

Forfeitures payable Total

At 1 January 2019 $ 11,551,806 $ - $ 11,551,806 Changes from financing cash flows: Benefits and transfers out 222,915,071 - 222,915,071 Benefits and transfers out paid (227,657,405) - (227,657,405) Forfeitures - 2,428,740 2,428,740 Forfeitures paid - (2,428,740) (2,428,740)

At 31 December 2019 $ 6,809,472 $ - $ 6,809,472

At 1 January 2018 $ 11,076,627 $ - $ 11,076,627 Changes from financing cash flows: Benefits and transfers out 314,813,297 - 314,813,297 Benefits and transfers out paid (314,338,118) - (314,338,118) Forfeitures - 3,252,496 3,252,496 Forfeitures paid - (3,252,496) (3,252,496)

At 31 December 2018 $ 11,551,806 $ - $ 11,551,806

10 Contributions

Mandatory contributions for both the employers and members are equal to 5% of the members’ relevant income up to $30,000 per month except for members earning less than $7,100 per month where the members’ mandatory contribution is nil. Self-employed persons must contribute 5% of their relevant income subject to a maximum contribution of $1,500 per month or $18,000 per year to the Scheme unless their relevant income is less than $7,100 per month or $85,200 per year where the mandatory contribution is nil. Employers, members or self-employed persons under the Scheme may choose to make voluntary contributions as top-up contributions in addition to the mandatory contributions for each contribution period.


122

11 Benefits Members will become entitled to benefits in respect of mandatory contributions to the Scheme in the circumstances set out in the MPF Ordinance. Members will become entitled to benefits in respect of voluntary contributions to the Scheme in circumstances set out in the Trust Deed and the relevant participation agreement. With effect from 1 February 2016, benefits whether due to mandatory or voluntary contributions payable to an employee member or self-employed person on the grounds of retirement at age 65 or early retirement at age 60, may be paid in instalments, if the member so elects.

12 Subscriptions Proceeds on issue of units in the statement of changes in net assets attributable to members are derived from the following: 2019 2018 From employers - Mandatory $ 90,540,984 $ 86,113,053 - Voluntary 32,037,180 36,085,092 From employees - Mandatory 85,535,183 81,521,843 - Voluntary 1,069,437 1,172,108 From self-employed persons - Mandatory 4,027,109 4,769,550 - Voluntary 559,050 847,697

Contribution received and receivable $ 213,768,943 $ 210,509,343 Transfers in from other schemes 33,164,952 45,374,464 Contribution surcharge 300,048 390,214

$ 247,233,943 $ 256,274,021


123

13 Redemptions Payments on redemption of units in the statement of changes in net assets attributable to members are derived from the following: 2019 2018 Permanent departure $ 10,426,391 $ 19,311,621 Refund of additional voluntary contributions

to leavers 13,032,751 27,535,269 Death 1,760,893 2,150,500 Retirement 15,984,673 17,012,660 Early retirement 7,333,516 8,148,577 Total incapacity 462,071 961,498 Terminal illness - 50,439

Benefits paid and payable $ 49,000,295 $ 75,170,564 Transfers out to other schemes 173,914,776 239,642,733 Forfeitures 2,428,740 3,252,496

$ 225,343,811 $ 318,065,793

14 Capital management

The capital of the Scheme is represented by the net assets attributable to members. Subscriptions and redemptions during the year are shown in the statements of changes in net assets attributable to members. The amount of net assets attributable to members can change significantly on a daily basis as the constituent funds of the Scheme are subject to daily subscriptions and redemptions at the discretion of members. The constituent funds’ objective when managing capital is to safeguard their ability to continue as a going concern in order to provide retirement benefits to members and benefits for other stakeholders and to maintain a strong capital base to support the development of the investment activities of the constituent funds.

15 Accrued benefits The total accrued benefits vested in the members’ accounts amounted to $ 2,534,632,076 as at 31 December 2019 (2018: $2,241,941,540).


124

16 Tax status of the Scheme The Scheme is a registered scheme under the MPF Ordinance and is, therefore, a recognised scheme for Hong Kong Profits Tax purposes. The policy of the Inland Revenue Department (“IRD”), as set out in IRD Practice Note No. 23, is that “recognised retirement schemes and their trustees are not considered to be subject to profits tax on their investment income”. Accordingly, no provision for Hong Kong Profits Tax has been made in the Scheme’s financial statements.

17 Soft commission arrangements During the year, the Managers and their associates did not enter into any soft commission arrangements with brokers in relation to dealings in the assets of the Scheme and its constituent funds (2018: Nil).

18 Security lending arrangements During the year, the Scheme and its constituent funds did not enter into any security lending arrangements (2018: Nil).

19 Negotiability of assets At 31 December 2019 and 2018, there were no statutory or contractual requirements restricting the negotiability of the assets of the Scheme and its constituent funds.

20 Commitments The Scheme and its constituent funds had no commitments as at 31 December 2019 and 2018.

21 Contingent liabilities The Scheme and its constituent funds had no contingent liabilities as at 31 December 2019 and 2018.

22 Marketing expenses No advertising expenses, promotional expenses, commissions or brokerage fees paid and payable to the MPF intermediaries were deducted from the Scheme or its constituent funds during the years ended 31 December 2019 and 2018.

23 Deferred expenses In accordance with section 37 of the General Regulation, administrative expenses for the Sun Life MPF Comprehensive Scheme MPF Conservative Portfolio which have not been deducted in the respective months may be deducted in the following twelve months. As at 31 December 2019, the amount of deferred administrative expenses amounted to $Nil (2018: $579,248).


125

24 Payments charged to default investments strategy constituent funds or scheme members who invest in the constituent funds Sun Life MPF Comprehensive Scheme Age 65 Plus Portfolio and Sun Life MPF Comprehensive Scheme Core Accumulation Portfolio are designated as default investment strategy (“DIS”) constituent funds with effect from 1 April 2017. Payments for services, out-of-pocket expenses and other payments charged to the DIS constituent funds are disclosed below. Payments for services and out-of-pocket expenses are those defined in the MPF Ordinance. During the year ended 31 December 2019


Plus Portfolio



Portfolio (a) Payments for services

Administration fees $ 69,313 $ 247,480 Custodian fees 6,897 24,624 Management fees 43,321 154,675 Trustee fees 10,397 37,122

Total payments for services $ 129,928 $ 463,901 ------------------- -------------------

(b) Out-of-pocket expenses

Auditor’s remuneration $ 7,317 $ 23,252 Publishing fees 790 2,510 Legal and professional fees 81 939 MPFA Indemnity insurance charges 79 913 SFC annual fees 92 294 Other expenses 379 4,399

Total out-of-pocket expenses $ 8,738 $ 32,307 ------------------- -------------------

(c) Payments other than (a) and (b) above - - ------------------- -------------------

Total payments $ 138,666 $ 496,208

Out-of-pocket expenses expressed as a percentage of net asset value of the DIS constituent funds 0.050% 0.051%

The net asset value used for calculating the percentage is the average of the net asset value of the DIS constituent funds as at the last dealing day of each month during the year ended 31 December 2019.


126

24 Payments charged to default investments strategy constituent funds or scheme members who invest in the constituent funds (continued) During the year ended 31 December 2018


Plus Portfolio



Portfolio (a) Payments for services

Administration fees $ 48,943 $ 152,290 Custodian fees 4,870 15,153 Management fees 30,590 95,181 Trustee fees 7,342 22,844

Total payments for services $ 91,745 $ 285,468 ------------------- -------------------

(b) Out-of-pocket expenses

Auditor’s remuneration $ 3,608 $ 10,359 Publishing fees 383 1,100 Legal and professional fees 8 71 MPFA contribution enquiry fees 1 8 MPFA Indemnity insurance charges 31 279 SFC annual fees 45 129 Other expenses 137 1,233

Total out-of-pocket expenses $ 4,213 $ 13,179 ------------------- -------------------

(c) Payments other than (a) and (b) above - - ------------------- -------------------

Total payments $ 95,958 $ 298,647

Out-of-pocket expenses expressed as a percentage of net asset value of the DIS constituent funds 0.034% 0.034%

The net asset value used for calculating the percentage is the average of the net asset value of the DIS constituent funds as at the last dealing day of each month during the year ended 31 December 2018.


127

25 Non-adjusting event after the reporting period In early 2020, the global commercial activities were impacted by the emergence and rapid spread of the novel Coronavirus (“COVID-19”), which was declared a pandemic by the World Health Organization (“WHO”) on 11 March 2020. Disruptions caused by the COVID-19 pandemic are impacting the global economy, which has resulted in significant volatility in financial markets worldwide. The effect of COVID-19 remains an emerging and rapidly evolving issue, leading to a high degree of volatility and uncertainty. The Trustee has made an assessment of the impact of COVID-19 and did not aware of any material financial impact to the Financial Statements as at 31 December 2019 as a result of this subsequent event. The Trustee will continue to remain alert to the development of the COVID-19 outbreak and closely monitor its impact on the service providers of the Scheme based on existing business continuity measures. Other than those disclosed above, no subsequent events have occurred that would require adjustment or disclosure and have a material effect on the Financial Statements as at 31 December 2019.

26 Possible impact of amendments, new standards and interpretations issued but not yet effective for the year ended 31 December 2019 Up to the date of issue of these financial statements, the HKICPA has issued a few amendments and new standards which are not yet effective for the year ended 31 December 2019 and which have not been adopted in these financial statements. These include the following which may be relevant to the Scheme.

Effective for accounting periods

beginning on or after Amendments to HKAS 1 and HKAS 8, Definition of material 1 January 2020 The Scheme is in the process of making an assessment of what the impact of these amendments are expected to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a significant impact on the Scheme’s financial statements.

sun life mpf comprehensive schemesun life mpf comprehensive scheme year ended 31 december 2019 ....

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