31 March2019 - MPFA · MANULIFE GLOBAL SELECT (MPF) SCHEME CONTENTS Pages SCHEME REPORT 1 - 6...

MANULIFE GLOBAL SELECT (MPF) SCHEME

CONSOLIDATED REPORT

31 March2019

Building a better working world


CONTENTS

Pages

SCHEME REPORT 1 - 6

INVESTMENT REPORT 7 - 71

INDEPENDENT AUDITOR'S REPORT 72 - 74

AUDITED FINANCIAL STATEMENTS

Master trust scheme

Statement of profit or loss and other comprehensive income 75

Statement of net assets available for benefits 76

Statement of changes in net assets available for benefits 77

Statement of cash flows 78

Constituent funds

Statement of profit or loss and other comprehensive income 79 - 86

Statement of net assets available for benefits 87 - 94

Statement of changes in net assets available for benefits 95 - 102

Statement of cash flows 103 - 110

Notes to financial statements 111 - 142

INFORMATION FOR THE SCHEME MEMBERS 143

INDEPENDENT AUDITOR'S ASSURANCE REPORT 144 - 146

1


SCHEME REPORT

31 March 2019

DIRECTORS OF MANULIFE PROVIDENT FUNDS TRUST COMPANY LIMITED

Alan Taylor (Independent Director) (appointed on 22 August 2018)

22/F, Manulife Financial Centre

223-231 Wai Yip Street

Kwun Tong, Kowloon

Hong Kong

Alexander Lawrence Nutting

18/F, Manulife Tower

One Bay East

83 Hoi Bun Road

Kwun Tong, Kowloon

Hong Kong

Anthony Nigel Clifton Griffiths (Independent Director)

22/F, Manulife Financial Centre


Kwun Tong, Kowloon

Hong Kong

Ke Wing Siu, Nigel

10/F, Lee Garden One

33 Hysan Avenue

Causeway Bay

Hong Kong

Lam Choi Wah, Shirley (resigned on 1 July 2018)


33 Hysan Avenue

Causeway Bay

Hong Kong

Leung Siu Mei, Ellen (appointed on 1 July 2018)

21/F, Tower A

Manulife Financial Centre


Kwun Tong, Kowloon

Hong Kong

Luzia Rosa Hung (resigned on 1 July 2018)

21/F, Tower A



Kwun Tong, Kowloon

Hong Kong

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SCHEME REPORT

31 March 2019

DIRECTORS OF MANULIFE PROVIDENT FUNDS TRUST COMPANY LIMITED (continued)

Ng Ching Fat, Raymond (appointed on 1 July 2018)

21/F, Tower A



Kwun Tong, Kowloon

Hong Kong

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SCHEME REPORT

31 March 2019

MANAGEMENT AND ADMINISTRATION

Trustee and Manulife Provident Funds Trust Company Limited

Custodian: 22/F, Manulife Financial Centre


Kwun Tong, Kowloon

Hong Kong

Auditor: Ernst & Young

22/F, CITIC Tower

1 Tim Mei Avenue

Central, Hong Kong

Administrator of the Manulife (International) Limited

Scheme and MPF 22/F, Manulife Financial Centre

corporate intermediary: 223-231 Wai Yip Street

Kwun Tong, Kowloon

Hong Kong

Administrator of the HSBC Institutional Trust Services (Asia) Limited

Constituent Funds 1 Queen's Road, Central

of the Scheme: Hong Kong

Investment Manager*: Manulife Investment Management (Hong Kong) Limited

(Formerly known as "Manulife Asset Management (Hong Kong) Limited")


33 Hysan Avenue

Causeway Bay

Hong Kong

Principal Banks: The Hong Kong and Shanghai Banking Corporation Limited

Hong Kong Bank Main Building

1 Queen's Road, Central, Hong Kong

Citibank, N.A.

50/F Champion Tower, 3 Garden Road

Central, Hong Kong

Standard Chartered Bank Hong Kong

Standard Chartered Bank Building

4-4A Des Voeux Road, Central, Hong Kong

Manulife Provident Funds Trust Company Limited (the "Trustee") does not retain a regular external legal

adviser.

* Manulife Investment Management (Hong Kong) Limited ("MIMHK", formerly known as "Manulife Asset

Management (Hong Kong) Limited") is the Investment Manager of certain underlying investments of the

Manulife Global Select (MPF) Scheme. MIMHK is licensed with the Securities and Futures Commission

to carry out asset management activities in Hong Kong.

4


SCHEME REPORT

31 March 2019

Manulife Provident Funds Trust Company Limited ("MPFTC") is pleased to present the scheme report for

Manulife Global Select (MPF) Scheme (the "Scheme") together with its financial statements for the year

ended 31 March 2019.

The Scheme was constituted by a master trust deed dated 29 April 2000 which was amended through eleven

deeds of amendment dated 10 September 2001, 15 August 2002, 11 March 2003, 13 August 2003, 14

October 2004, 21 July 2005, 5 January 2006, 10 March 2008, 11 June 2009, 7 December 2010 and 13 March

2012. There were ten supplemental deeds dated 23 May 2003, 3 September 2012, 11 December 2013, 15

January 2014, 11 May 2015, 27 July 2015, 7 December 2015, 6 December 2016, 21 May 2018 and 1 April

2019. The offering document was updated according to the changes made to the deeds. The most updated

offering document for the scheme financial year ended 31 March 2019 was dated 1 April 2017 with its first

addendum and second addendum dated 25 May 2018 and 18 February 2019 respectively. Subsequent to the

financial year ended of 31 March 2019, the offering document has a third addendum dated 1 April 2019.

The Scheme is a master trust scheme which consists of twenty-nine constituent funds. Each constituent fund

has been structured as a feeder fund, the assets of which are invested directly in a corresponding approved

pooled investment fund ("APIFs"). These APIFs are structured as sub-funds of an umbrella unit trust fund

(each sub-fund is referred to as "First level UT APIF") with Manulife Investment Management (Hong Kong)

Limited ("MIMHK", formerly known as "Manulife Asset Management (Hong Kong) Limited") as the

investment manager except that the Interest Fund Policy and the Stable Fund Policy are in the form of an

insurance policy ("IP APIF") issued by Manulife (International) Limited ("MIL"). The Scheme also offers

an investment arrangement which is the Default Investment Strategy ("DIS") in accordance with the

Mandatory Provident Fund Schemes Ordinance (the "MPFSO").

The assets of the First level UT APIF invested by Manulife MPF Conservative Fund invest in direct

investments permissible under the Mandatory Provident Fund Schemes (General) Regulation (the "General

Regulation"). The assets of the First level UT APIF invested by Manulife MPF Hang Seng Index Tracking

Fund invest in an index-tracking collective investment scheme permissible under Section 6A of Schedule 1

to the General Regulation. The assets of the other First level UT APIFs as well as the two IP APIFs invested

by the respective constituent funds are invested in sub-funds of 2 umbrella unit trust funds. The investment

managers of the underlying investments are MIMHK, FIL Investment Management (Hong Kong) Limited

("FIL Investment") and Vanguard Investments Hong Kong Limited. The assets of the eleven First Level UT

APIFs invested by the Manulife MPF Aggressive Fund, Manulife MPF Growth Fund, Manulife MPF Stable

Fund, Manulife MPF International Equity Fund, Manulife MPF Smart Retirement Fund, Manulife MPF

2020 Retirement Fund, Manulife MPF 2025 Retirement Fund, Manulife MPF 2030 Retirement Fund,

Manulife MPF 2035 Retirement Fund, Manulife MPF 2040 Retirement Fund, Manulife MPF 2045

Retirement Fund of the Scheme are allowed to be invested in index-tracking collective investment scheme

("ITCIS") as permitted under the MPF legislative requirements.

With effect from 1 August 2018, the management fees of twenty-three constituent funds under the Scheme

have been reduced. Apart from that, there is no change of management fee level for Manulife MPF Interest

Fund, Manulife MPF Conservative Fund, Manulife MPF RMB Bond Fund, Manulife MPF Hang Seng Index

Tracking Fund, Manulife MPF Core Accumulation Fund and Manulife MPF Age 65 Plus Fund.

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SCHEME REPORT

31 March 2019

Members should also note that the Scheme had the scheme restructured effective 26 September 2018, under

which participating employers and members of another two MPF Schemes, Manulife MPF Plan – Advanced

and Manulife MPF Plan – Basic were transferred to the Scheme.

Changes to the Inland Revenue Ordinance will take effect on 1 April 2019. From 1 April 2019, similar to

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

account (namely, TVC account) set-up by scheme members can also enjoy tax concession in order for them

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

Tax Deductible Voluntary Contribution ("TVC") is a new type of contributions and can only be paid into

TVC account of an MPF scheme. TVC may enjoy tax concession. Other characteristics of TVC are as

follows:

• TVC can only be made directly by the person who is a current holder of a contribution account or

personal account of an MPF scheme; or who is a current member of an MPF exempted ORSO scheme.

• Involvement of employers is not required.

• Although it is voluntary in nature, TVC is subject to the same vesting, preservation and withdrawal

restrictions applicable to mandatory contributions.

Accordingly, any accrued benefits derived from TVCs (including the TVCs made in excess of the maximum

tax deduction limit during a tax assessment year) will be preserved. Members should note that accrued

benefits held in a TVC account can only be withdrawn upon retirement at age 65 or on other statutory

grounds under the MPF legislation.

Members of the Scheme can obtain information about the Scheme and its operation from the Scheme's

Offering Document. Members can download the Offering Document at www.manulife.com.hk or request a

copy in writing to Provident Funds Services, Manulife (International) Limited, 21/F, Tower A, Manulife

Financial Centre, 223-231 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong or call the Customer Service

Hotline on 2108 1388.

Members of the Scheme are also advised to review the terms of the Trust Deed. Copies of the Trust Deed

are available for inspection free of charge during normal working hours at the customer service centres

located at 23/F, The Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong and 21/F, Tower A,

Manulife Financial Centre, 223-231 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong.

Members of the Scheme may also request a copy of the consolidated reports of the Scheme for any specific

financial year within the seven years preceding the date of request. Members may also download the latest

consolidated report from the web site www.manulife.com.hk six months after the scheme financial year end.

MPFTC and MIL, which are both 100% owned by Manulife International Holdings Limited, and MIMHK

are members of the Manulife Financial Group. MIL is an associate of MPFTC under Schedule 8 of the

MPFSO.

http://www.manulife.com.hk/

6


SCHEME REPORT

31 March 2019

The particulars of the persons who were direct controllers of MIL during the financial year ended 31 March

2019 are:

1. Anil Wadhwani

10/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong

2. Christopher Alan Edwards


3. David Gareth Thomas (resigned on 16 April 2019)


4. David John Bell

22/F, Manulife Financial Centre, 223-231 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong

5. Diane Margaret Daly Bean

22/F, Manulife Financial Centre, 223-231 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong

6. Garry Alides Willinge


7. Guy Raymond Adam Mills

22/F, Tower A, Manulife Financial Centre, 223-231 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong

8. Jose C. DaSilveira


9. Kenneth Joseph Rappold Jr (appointed on 24 April 2018)


10. Manulife International Holdings Limited


11. Philip James Witherington (resigned on 24 April 2018)


At 31 March 2019, the Scheme recorded 102,233 participating employers and 1,874,727 accounts that are

held by employee members through participating employers, self-employed person members, personal

account members, and individual relevant employee members under the Flexi Retirement Contribution

("FRC") arrangement.

During the financial year ended 31 March 2019, total contributions and asset transfers to the Scheme were

HK$45.0 billion while benefits paid out totaled HK$10.9 billion. The assets under management at 31 March

2019 were HK$207.3 billion.

Separate detailed reports of each of the constituent funds of the Scheme are included in the section

"Investment Report"; the reports are prepared by MIMHK.

7


INVESTMENT REPORT

Year ended 31 March 2019

Investment Policies

At 31 March 2019 and during the year, Manulife Global Select (MPF) Scheme is a master trust scheme

offering the following twenty-nine constituent funds:

1. Manulife MPF Aggressive Fund (the "MGAG");

2. Manulife MPF Conservative Fund (the "MGCP");

3. Manulife MPF European Equity Fund (the "MGEE");

4. Manulife MPF Growth Fund (the "MGGR");

5. Manulife MPF Hong Kong Bond Fund (the "MGHB");

6. Manulife MPF Hong Kong Equity Fund (the "MGHE");

7. Manulife MPF Interest Fund (the "MGIT");

8. Manulife MPF International Bond Fund (the "MGIB");

9. Manulife MPF International Equity Fund (the "MGIE");

10. Manulife MPF Japan Equity Fund (the "MGJE");

11. Manulife MPF North American Equity Fund (the "MGNE");

12. Manulife MPF Pacific Asia Equity Fund (the "MGPE");

13. Manulife MPF Stable Fund (the "MGST");

14. Manulife MPF Fidelity Growth Fund (the "MGFG");

15. Manulife MPF Fidelity Stable Growth Fund (the "MGFS");

16. Manulife MPF China Value Fund (the "MGCV");

17. Manulife MPF Healthcare Fund (the "MGHC");

18. Manulife MPF Pacific Asia Bond Fund (the "MGPB");

19. Manulife MPF Hang Seng Index Tracking Fund (the "MGHS");

20. Manulife MPF RMB Bond Fund (the "MGRB");

21. Manulife MPF Smart Retirement Fund (the "MG15");

22. Manulife MPF 2020 Retirement Fund (the "MG20");






28. Manulife MPF Age 65 Plus Fund (the "MGAP"); and

29. Manulife MPF Core Accumulation Fund (the "MGCA").

Each of the constituent funds is managed in accordance with separate and distinct investment policies

reflecting the different risk profiles of the twenty-nine investment choices as set out below.

1. MGAG

The MGAG is a unitised equity fund that aims to provide long term capital growth. The underlying

investments are made on a diversified basis mainly in equities and equity-related investments. The

underlying portfolio may also include bonds, deposits and other investments as permitted under the

Mandatory Provident Fund Schemes (General) Regulation ("General Regulation") up to 30% of the net

asset value of MGAG. The investment manager may at its discretion invest in any region such as

America, Pacific Asia, Japan, Europe, etc, with a relative bias towards Hong Kong and Pacific Asia

region markets.

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INVESTMENT REPORT


Investment Policies (continued)

2. MGCP

The MGCP is a fund mandated by the Mandatory Provident Fund Schemes Ordinance (the "MPFSO")

that aims to provide a rate of return to match the prescribed savings rate published by the Mandatory

Provident Fund Schemes Authority (the "MPFA") but with no guarantee of capital or interest. The

underlying investments for MGCP are invested in fixed income instruments that comply with Section 37

and Schedule 1 of the General Regulation.

3. MGEE

The MGEE is a unitised equity fund that aims to achieve medium to long term capital growth. The

underlying investments are made on a diversified basis in shares of companies covering different sectors

of the economy in Europe and which are listed on any stock exchange. The underlying portfolio may

also include bonds, deposits and other investments as permitted under the General Regulation up to 30%

of the net asset value of the MGEE.

4. MGGR

The MGGR is a unitised balanced fund that aims to provide medium to long term capital growth. The

underlying investments are made on a diversified basis. Around 50% to 90% of the underlying portfolio

of the MGGR is indirectly invested in equities and equity-related investments, with the remainder of the

assets being indirectly invested in bonds, deposits and other investments as permitted under the General

Regulation. The investment manager may at its discretion invest in any region such as America, Pacific

Asia, Japan, Europe, etc.

5. MGHB

The MGHB is a unitised bond fund that aims to provide a competitive overall rate of return. The

underlying investments are made on a diversified basis with at least up to 70% of the net asset value of

the Hong Kong Bond Fund invested in Hong Kong Dollar denominated Permitted Deposits and Debt

Securities (in a range of portfolio remaining maturity periods) issued by the government of Hong Kong

or any government, central bank or multilateral international agency. It may also purchase Debt

Securities which satisfy the minimum credit rating stipulated by the MPFA or those which are listed on

any approved stock exchange, being a security issued by, or guaranteed by, a company whose shares are

so listed. The underlying portfolio may also include other investments as permitted under the General

Regulation up to 30% of the net asset value of the MGHB.

6. MGHE

The MGHE is a unitised equity fund that aims to provide medium to long term capital growth. The

underlying investments are made on a diversified basis mainly in shares of companies listed on The

Hong Kong Stock Exchange or companies covering different sectors of the economy in Hong Kong and

which are listed on any stock exchange. The underlying portfolio may also include bonds, deposits and

other investments as permitted under the General Regulation up to 30% of the net asset value of the

MGHE. The underlying portfolio may also, via the Stock Connect, invest up to 10% of its net asset

value in shares of companies listed in Mainland China.

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INVESTMENT REPORT



7. MGIT

The MGIT is a non-unitised bond fund that aims to provide a capital guarantee and to provide members

with interest each month at a rate that equals to or exceeds the prescribed savings rate published by the

MPFA. The underlying investments made for MGIT are invested at least up to 70% of the net asset

value of the MGIT in Hong Kong dollar fixed income instruments. The underlying portfolio may

include other investments as permitted under the General Regulation up to 30% of the net asset value of

the MGIT.

8. MGIB

The MGIB is a unitised bond fund that aims to provide competitive overall rates of return. The

underlying investments are made on a diversified basis mainly in Permitted Deposits and Debt Securities

issued by any government, central bank or multilateral international agency. It may also purchase Debt

Securities which satisfy the minimum credit rating stipulated by the MPFA or those which are listed on

any approved stock exchange being a security issued by, or guaranteed by, a company whose shares are

so listed. The investment manager may at its discretion invest in any region such as North America,

Europe, United Kingdom and Asia. The underlying portfolio may also include other investments as

permitted under the General Regulation up to 30% of the net asset value of the MGIB.

9. MGIE

The MGIE is a unitised equity fund that aims to provide medium to long term capital growth. The

underlying investments are made on a diversified basis in global equities and equity-related investments.

The investment manager may at its discretion invest in any region such as North America, Japan,

Europe, other Pacific Asia region markets and Hong Kong. The underlying portfolio may also include

bonds, deposits and other investments as permitted under the General Regulation up to 30% of the net

asset value of the MGIE.

10. MGJE

The MGJE is a unitised equity fund that aims to provide medium to long term capital growth. The


of the economy in Japan and which are listed on any stock exchange. The underlying portfolio may also

include bonds, deposits and other investments as permitted under the General Regulation up to 30% of

the net asset value of the MGJE.

11. MGNE

The MGNE is a unitised equity fund that aims to provide medium to long term capital growth. The


of the economy in North America and which are listed on any stock exchange. The underlying portfolio

may also include bonds, deposits and other investments as permitted under the General Regulation up to

30% of the net asset value of the MGNE.

12. MGPE

The MGPE is a unitised equity fund that aims to provide medium to long term capital growth. The


of the Asia Pacific markets, excluding Japan and which are listed on any stock exchange. The

underlying portfolio may also include bonds, deposits and other investments as permitted under the

General Regulation up to 30% of the net asset value of the MGPE.

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INVESTMENT REPORT



13. MGST

The MGST is a unitised balanced fund that aims to provide relatively stable medium to long term

growth. The underlying investments are made on a diversified basis. Up to 40% of the portfolio of the

MGST is indirectly invested in equities and equity-related investments, with the remainder of the assets

being indirectly invested in bonds, deposits and other investments as permitted under the General

Regulation. The investment manager may at its discretion invest in any region such as America, Pacific

Asia, Japan, Europe, etc, with a relative bias towards Hong Kong.

14. MGFG

The MGFG is designed to provide long term capital growth. The underlying investments of MGFG are

focused on the global equity markets while enjoying the flexibility of investing in global bonds. It is

managed with a view to limit the volatility of returns in the short term.

The assets of the first level pooled investment fund under the MGFG are invested as a feeder fund into

the respective APIF operated within the umbrella unit trust structure currently managed by FIL

Investment Management (Hong Kong) Limited. It is intended that the underlying investments of the

APIF managed by FIL Investment Management (Hong Kong) Limited are made on a geographically

diversified basis with a bias towards Hong Kong. Approximately 90% of the APIF is invested in global

equities in the markets of Hong Kong, Europe, Japan, America and the Asia Pacific region.

15. MGFS

The MGFS is designed to provide medium to long term capital growth. The underlying investments of

MGFS are diversified between equities and bonds and are managed with a view to limit the volatility of

returns in the short term.

The assets of the first level pooled investment fund under the MGFS are invested as a feeder fund into

the respective APIF operated within the umbrella unit trust structure currently managed by FIL

Investment Management (Hong Kong) Limited. It is intended that the investments of the APIF managed

by FIL Investment Management (Hong Kong) Limited are made on a geographically diversified basis

with a bias towards Hong Kong. Approximately 50% of the APIF is invested in global equities and 45%

of the APIF is invested in global bonds in the markets of Hong Kong, Europe, Japan, America and the

Asia Pacific region; with the remaining 5% of the assets being in cash deposits as permitted under the

General Regulation.

16. MGCV

The MGCV is a unitised equity fund that aims to provide medium to long term capital growth. The

underlying investments are made on a diversified basis mainly in shares of companies covering different

sectors of the economy in the Greater China region, including the People's Republic of China, Hong

Kong and Taiwan, and which are listed on any stock exchange subject to the restrictions in the General

Regulation and which have a value or growth proposition. The underlying portfolio may also include

bonds, deposits and other permitted investments as permitted under the General Regulation, up to 30%

of the net asset value of the MGCV.

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INVESTMENT REPORT



17. MGHC

The MGHC is a unitised equity fund that aims to provide long term capital growth. The underlying

investments are made on a diversified basis mainly consisting of equity-related investments and equities

of companies in health care and related industries and which are listed on any stock exchange. The

underlying portfolio may invest in shares of companies covering mainly the pharmaceutical, healthcare

equipment & services, food & drug retailers, managed care business and biotechnology sectors. The

investment manager may at its discretion invest in any region such as North America (including

Canada), Europe (including UK), Asia and Japan. The underlying portfolio may also include bonds,

deposits and other investments as permitted under the General Regulation, up to 30% of the net asset

value of the MGHC.

18. MGPB

The MGPB is a unitised bond fund that aims to provide competitive overall rates of return. The

underlying investments are made on a diversified basis mainly in debt securities issued by any

government, central bank, supra-national, multilateral international agency and corporate issuer in the

Asia Pacific region. The underlying portfolio may also include other investments as permitted under the

General Regulation, up to 30% of the net asset value of the MGPB.

19. MGHS

The MGHS is a unitised equity fund that aims to provide medium to long term capital growth. The

underlying investments are in shares of constituent companies of the Hang Seng Index in substantially

similar composition and weighting as they appear in the index through an approved index-tracking

collective investment scheme ("ITCIS") (currently, the Tracker Fund of Hong Kong managed by State

Street Global Advisors Asia Limited). The MGHS seeks to track the performance of the Hang Seng

Index of Hong Kong.

20. MGRB

The MGRB is a unitised bond fund that aims to provide competitive overall rates of return. The

underlying investments are made on a diversified basis with at least up to 70% of the net asset value of

the fund invested in Renminbi ("RMB") denominated debt securities which are issued, traded or

distributed by any government, central bank, supra-nationals, multilateral international agencies and

corporate issuers outside Mainland China. The MGRB may also, through the underlying APIF, invest

up to 30% of its net asset value in other RMB or non-RMB denominated investments including money

market instruments, certificates of deposits, cash and deposits, and non-RMB denominated debt

securities, as permitted under the General Regulation.

21. MG15

The MG15 is a unitised fund and is a matured Retirement Fund designed to enable accrued benefits

investing in any other Retirement Funds upon their maturity to be switched to the Smart Retirement

Fund. It aims to provide medium to long term capital growth for members who hold a longer term

investment view and who are prepared to accept significant fluctuations in the value of their investments

in order to achieve potential medium to long term returns. The underlying investments are made on a

diversified basis. Around 40% to 60% of the underlying portfolio is indirectly invested in equities and

equity-related investments, with the remainder of the assets being indirectly invested in bonds, deposits

and other investments as permitted under the General Regulation. The investment manager may at its

discretion invest in regions such as America, Pacific Asia, Japan and Europe, etc.

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INVESTMENT REPORT



22. MG20

The MG20 is a unitised fund designed for members expecting to attain their normal retirement age

around 2020. It aims to provide long term capital growth while lowering the risk of loss as the members

approach their normal retirement age. The underlying investments are made on a diversified basis. At

launch in 2011, around 65% - 85% of the underlying portfolio was indirectly invested in equities and



discretion invest in regions such as America, Pacific Asia, Japan and Europe, etc. As the MG20 gets

closer to its maturity date on the last business day of 2020, the asset allocation strategy of the underlying

portfolio will become less aggressive and increasingly contain fixed income securities.

23. MG25







discretion invest in regions such as America, Pacific Asia, Japan and Europe, etc. When the MG25 gets


portfolio will become less aggressive and will increasingly contain fixed income securities.

24. MG30










25. MG35










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INVESTMENT REPORT



26. MG40










27. MG45










28. MGAP

The MGAP is a unitised equity fund that aims to provide stable growth to members by investing in a

globally diversified manner. It is intended for members who hold a medium to long term investment

view and want to seek returns through some capital appreciation and current income generation. The

MGAP will adopt a passive investment strategy through indirectly investing in an underlying APIF

(currently the Vanguard Income Fund ("VIF")) in order to reduce the deviation of performance from the

MGAP Reference Portfolio. The investment manager of the VIF will use sampling techniques in its

passive investment strategy to select securities for investment for efficient portfolio management.

Sampling is an approach whereby the investment manager of the VIF tracks the MGAP Reference

Portfolio by investing in a representative portion, or "sample", of the full list of securities contained in

the MGAP Reference Portfolio, such that the overall characteristics of the portion of securities would be

similar to those of the full list of securities contained in the MGAP Reference Portfolio.

29. MGCA

The MGCA is a unitised fund that aims to provide capital growth to members by investing in a globally

diversified manner. It is intended for members who hold a medium to long term investment view and

want to seek returns through capital appreciation and modest income generation. The MGCA will adopt

a passive investment strategy through indirectly investing in an underlying APIF (currently the Vanguard

Moderate Growth Fund ("VMGF")) in order to reduce the deviation of performance from the MGCA

Reference Portfolio. The investment manager of the VMGF will use sampling techniques in its passive

investment strategy to select securities for investment for efficient portfolio management. Sampling is an

approach whereby the investment manager of the VMGF tracks the MGCA Reference Portfolio by

investing in a representative portion, or "sample", of the full list of securities contained in the MGCA

Reference Portfolio, such that the overall characteristics of the portion of securities would be similar to

those of the full list of securities contained in the MGCA Reference Portfolio.

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INVESTMENT REPORT


General Investment Climate

1. North American Equity Markets

Top contributors included a cloud-based software company that benefited from more companies shifting

to cloud-based platforms to help reduce costs and increase efficiency. Other standouts included a cellular

tower operator in the real estate sector. Secular tailwinds, driven by more mobile devices worldwide

increasing demand for its services, as well as the settlement of pending litigation, lifted the stock.

Conversely, security selection in the industrials, healthcare, financials and consumer discretionary

sectors hindered the Fund's performance. Individual detractors included a diversified industrials

conglomerate that was a top holding and large overweighting early in the period. Its shares declined due

to disappointing results in its power-generation unit, a dividend cut, an investigation into its accounting

practices and a profit warning. Despite new leadership and the sale of the company's biopharmaceuticals

business, we reduced our stake because the turnaround was taking longer than expected. In the consumer

discretionary sector, a non-benchmark position in a recreational vehicle company hurt, as new tariffs on

steel and aluminum imports boosted input costs, pressuring near-term earnings.

By period end, steadily rising risk around trade and tariff issues and an associated deceleration in global

economic growth had clouded the near-term outlook for the stock market. Many investors appeared to

be pricing in the possibility of a US recession later this year, despite the economy's continued resilience

and steady growth. However, we believe the foundations for continued expansion – a healthy US

consumer, steady housing demand and a solid financial system – remain intact, despite rising political

and capital spending uncertainties. We're also hopeful that escalation in the trade war can be averted.

2. European Equity Markets

Eurozone equities rose modestly in the second quarter of 2018 (in EUR terms), but lagged many other

developed markets amid heightened political risks and the fears over the impact of increased US tariffs

on trade. Italy was the region's weakest market. After weeks of negotiation, the anti-establishment Five

Star Movement and far-right League agreed to form a coalition government with policies that set it on a

confrontational path with the EU. At the overall Eurozone level, there were few signs of a rebound in

economic activity after the slowdown in the first quarter. Inflation accelerated, as rising oil prices caused

Eurozone consumer prices to jump to a year-on-year increase of 2.0% in June, compared to just 1.2% in

April. As widely expected, the European Central Bank announced that it would end its bond buying

programme by the end of this year. However, it kept interest rates on hold and stressed that interest rates

would remain at their current low levels until "at least mid-2019". UK equities rallied strongly over the

quarter (in GBP terms) as a fall in sterling boosted the overseas earnings of multinational companies.

However, investors and companies alike showed increasing frustration over the government's ability to

clarify its position over Brexit.

15


INVESTMENT REPORT


General Investment Climate (continued)

2. European Equity Markets (continued)

Eurozone equities recorded moderate gains (in EUR terms) in the third quarter of 2018. While returns

were positive, the region lagged many other developed markets amid uncertainty over the impact of

increased US tariffs on trade. There was also rising concern over Italian debt levels and the prospect of

political turmoil with the rest of the EU over the new coalition government's spending and budget plans.

Italy was the worst performing country, as its banking stocks came under pressure. Eurozone banks were

additionally hit by worries over their exposure to Turkey as the lira sold off sharply. September's flash

Eurozone composite purchasing managers' index fell to a four-month low, dragged lower by weaker

manufacturing activity and stagnant exports. The survey also revealed that business optimism was

hovering near two-year lows. Nevertheless, the European Central Bank confirmed it would continue

with plans to halve its monthly bond purchases starting in October as the uncertainty surrounding the

inflation outlook was "receding". In Germany, exporters continued to be affected by fears of US tariffs.

UK equities retreated slightly over the quarter (in GBP terms).

European equities recorded steep declines (in EUR terms) in the fourth quarter of 2018, touching a two-

year low as most markets delivered double-digit losses. Fears over the impact of higher tariffs added to

rising concerns over the outlook for global growth. Politics also remained a concern as France suffered

the worst street violence in many years, forcing President Emmanuel Macron to backtrack on key

policies. Political risks also remained elevated in Italy as Rome's proposed budget broke EU guidelines,

although a compromise was reached with Brussels during December. In economic news, Eurozone

economic activity faltered as exports were hit by higher tariffs, German carmakers struggled to comply

with new emissions tests and Italian growth stagnated due to the country's standoff with Brussels. The

flash estimate of the Eurozone composite purchasing managers' index fell to 51.3 in December, its

lowest level in four years. In Germany, equities fell into a bear market, posting their worst annual

performance since 2008. UK equities also suffered steep declines (in GBP terms), although they held up

better than many stock markets in the Eurozone, helped by weakness in the British pound. Prime

Minister Theresa May finally reached a withdrawal agreement with the EU. However, the deal faced

widespread criticism from both Leavers and Remainers, forcing her to postpone a key Common's vote to

ratify the deal until January.

European equities rallied strongly in the first quarter of 2019 (in EUR terms). Sentiment was lifted by

hopes of improved trade relations between the US and China and the associated implications for global

trade. Dovish comments from major central banks also buoyed shares, helping them overcome weak

Eurozone economic news and the uncertainty caused by the UK's impending Brexit deadline. Economic

news remained muted and Eurozone investor confidence, as measured by Sentix, reached the lowest

level since late 2014. The Eurozone economy expanded by just 0.2% in the final quarter of 2018, with

Italy falling into a recession, having recorded two successive quarters of negative growth. German

equities rose, but underperformed the broader region, with exports continuing to suffer from the

slowdown in global trade. With inflation remaining below target and growth subdued, the European

Central Bank reinstated its policy of offering cheap long-term loans to banks and pledged not to raise

rates until the end of 2019 at the earliest. UK equities rallied strongly (in GBP terms), but lagged most

other European markets. UK economic activity was marginally stronger than expected, helped by

resilient consumer spending and stockpiling ahead of the Brexit deadline.

16


INVESTMENT REPORT



3. Pacific Asia Equity Markets

Equity markets in Asia ex-Japan were volatile over the 12-month period amid increased China-US trade

tensions and continued macroeconomic challenges. Regional markets showed little movement amid the

announcement of US tariffs on Chinese imports and emerging concerns over Italy's 2019 budget.

Ongoing China-US trade tensions heightened volatility in regional markets for most of the second half

of 2018, and with both sides imposing escalating tariffs, risk-off sentiment took hold until a "trade truce"

was reached on the sidelines of the G20 summit at the end of November. Central banks in Asia were

raising rates at the beginning of the reporting period to defend their currencies against a stronger US

dollar but have taken a more accommodative stance in 2019 given concerns over slowing growth.

China's strong performance during the period was attributable to the first quarter of 2019 being driven

by positive developments in Sino-US trade talks, strengthened government stimulus measures, and

attractive valuations. At the annual National People's Congress in March, the government announced

broad-based tax cuts, and promised more affordable funding for private firms and an accommodative

monetary policy.

Trade concerns negatively impacted export-oriented countries like South Korea and Taiwan leading to

slower than expected gross domestic product growth and export figures.

ASEAN countries were lower on the back of a strong US dollar. The four interest rate hikes by the US

Federal Reserve Board (Fed) led to higher Treasury yields. This contributed to emerging market sell-

offs, which triggered substantial capital outflows as well as currency weakness and interest rate hikes in

Asian markets running current account deficits.

Concerns of twin deficits in India weighed on the country through the third quarter of 2018. In the fourth

quarter of 2018, lower oil prices and dampened inflation expectations were key drivers of India's

outperformance. However, there are liquidity concerns caused by defaults in the non-banking financial

company sector. Election overhang was addressed as the incumbent party was favored.

17


INVESTMENT REPORT



4. Global Bond Markets

Positive US economic growth, better-than-expected corporate earnings and higher oil prices pushed the

US stock market to a new high in September 2018. However, the market plunged in late 2018 amid

mounting global trade tensions, fears of slowing economic growth, declining oil prices and uncertainty

about US interest rates. Stocks rebounded in the New Year, buoyed by the US Federal Reserve Board's

decision to hold-off on further interest rate increases. The end of the partial US government shutdown

and progress toward resolving the trade dispute with China also helped US stocks, which hit another

record in April 2019. In May, escalating trade tensions between the US and both China and Mexico

spurred concern that economic growth and corporate earnings would decelerate, causing stocks to give

back some of their earlier gains.

In the US equity market, the more-defensive real estate, utilities and consumer staples sectors led the

way with sizable gains. In contrast, energy sector stocks saw a steep slide, as oil prices declined. The

economically sensitive materials and industrials sectors and the interest rate sensitive financials sector

were also weak performers.

5. Hong Kong Bond Market

In the US, the Federal Reserve Board (Fed) increased its federal funds target range three times over the

period to the target rate range between 2.25% and 2.50%, then announced a "pause" in interest rate

increases in January 2019. US Treasury yields trended towards the latter part of the period amid market

expectations that the Fed may be near the end of the current cycle for raising interest rates. In China, the

People's Bank of China (PBoC) leaned towards monetary policy easing towards the latter part of the

period. The PBoC reduced the reserve requirement ratio in early 2019, bringing the combined net

liquidity injection to around 800 billion renminbi after taking into account the injection from the targeted

medium-term lending facility.

Hong Kong bond yields mainly tracked the US market throughout the period. Hong Kong ten-year

government bonds fell from 1.99% to 1.47%. The Markit iBoxx ALBI Hong Kong Dollar Bond Index

returned 4.62% in Hong Kong dollar terms over the period.

Note: The General Investment Climate commentary above is provided by Manulife Investment

Management (Hong Kong) Limited (formerly known as "Manulife Asset Management (Hong Kong)

Limited"), one of the investment managers of underlying investments of the Manulife Global Select

(MPF) Scheme.

18


INVESTMENT REPORT


Trustee's Commentary

For the 12-month period ended 31 March 2019, most of the equity funds or constituent funds with exposure

to equities suffered significant loss due to unfavorable investment market sentiment in 2018. The top five

least performing funds (1-year performance) were Manulife MPF Japan Equity Fund (-8.06%), Manulife

MPF Hong Kong Equity Fund (-7.61%), Manulife MPF Pacific Asia Equity Fund (-6.07%), Manulife MPF

Aggressive Fund (-5.06%) and Manulife MPF Growth Fund (-4.63%).

Nine constituent funds under the Scheme recorded positive returns. The top five performing funds (1-year

performance) were Manulife MPF Healthcare Fund (11.68%), Manulife MPF Hong Kong Bond Fund

(4.60%), Manulife MPF Age 65 Plus Fund (2.70%), Manulife MPF Core Accumulation Fund (2.24%) and

Manulife MPF RMB Bond Fund (1.92%).

The Manulife MPF Healthcare Fund delivered excellent performance within the MPF market. In addition,

the fund also delivered excellent returns over a longer term period. The fund delivered a 10-year return of

202.17% ranking it #7 amongst all MPF constituent funds.

(Source: Lipper Inc. (31 March 2019)).

In addition, the Manulife MPF Interest Fund continued to maintain the declared interest rate at 0.50% per

annum. The declared interest rate far exceeds the MPFA prescribed savings rate which the fund targets to

achieve.

(Source: Manulife Global Select (MPF) Scheme Quarterly Fund Fact Sheet (31 March 2019)).

MPFTC continues to hold a positive view on the long term capability and suitability of the fund managers as

they all possess extensive experience in managing equity and fixed income portfolios.

19


INVESTMENT REPORT


Trustee's Commentary (continued)

A. Trustee's commentary on analysis of the investments held by the scheme and supporting

information of its commentary

Annualized return (in terms of %)

1 Year 5 Years 10 Years Since Launch

Manulife MPF Conservative Fund

Launch date: 01/12/2000 1.16 0.34 0.18 0.58

Benchmark / Performance Target

(MPFA Prescribed Saving Rate) 0.07 0.02 0.01 0.47

Deviation from the benchmark /

performance target

Out-

performed

Out-

performed

Out-

performed

Out-

performed

Trustee's commentary The fund's performance has outperformed in the 1 year, 5 years,

10 years term and since launch when compared to the MPFA

Prescribed Saving Rate ("PSR") as the benchmark.

No market median information is available for conservative

funds as fees and charges of a MPF conservative fund can be

deducted from either (i) the assets of the fund or (ii) members'

accounts by way of unit deductions.

The Manulife MPF Conservative Fund uses method (i) and,

therefore, any unit prices/NAV/fund performance quoted for the

constituent fund have incorporated the impact of fees and

charges.

20


INVESTMENT REPORT





Manulife MPF Interest Fund

Launch date: 01/12/2000 0.50 0.15 0.12 0.66


(MPFA Prescribed Saving Rate) 0.07 0.02 0.01 0.47


performance target

Out-

performed

Out-

performed

Out-

performed

Out-

performed

Trustee's commentary The declared interest rate has been 0.50% p.a. since November

2017 which far exceeds the MPFA Prescribed Saving Rate

("PSR") which the fund targets to achieve.

The fund's performance has outperformed in the 1 year, 5 years,

10 years term and since launch when compared to the MPFA

Prescribed Saving Rate ("PSR") as the benchmark.

There is no market median performance information available for

comparison as the fund is a hard guaranteed fund with

customized guarantee conditions.

Manulife MPF Stable Fund

Launch date: 01/12/2000 0.00 2.29 3.34 2.37

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


performance target 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 a soft guaranteed fund with customized

guarantee conditions.

21


INVESTMENT REPORT





Manulife MPF International Bond

Fund

Launch date: 01/12/2000

-1.94 0.11 1.90 2.81


(Lipper Global Bond Median) -0.73 0.07 1.91 1.93


performance target

Under-

performed

Out-

performed

Under-

performed

Out-

performed

Trustee's commentary The fund's performance has under-performed the market median in

the 1 year and 10 years term. Better performance was recorded at

the 5 years term and since launch.

According to the investment manager, the fund's duration

positioning (sensitivity to interest rates) detracted from

performance, particularly in the Eurozone, Australia and Japan,

where long-term interest rates moved lower, and the portfolio's

shorter-duration profile had a negative impact. Currency

positioning also detracted, driven by an overweight exposure to the

Norwegian krone, Australian dollar and New Zealand dollar.

Manulife MPF Hong Kong Bond

Fund


4.60 2.24 1.54 2.01


(Lipper Hong Kong Dollar Bond

Median)

3.58 2.09 1.54 1.81


performance target

Out-

performed

Out-

performed Inline

Out-

performed

Trustee's commentary The fund's performance has out-performed the market median in

the 1 year, 5 years periods and since launch and align with the

market median in the 10 years term.

According to the investment manager, the fund's overweight

duration positioning was the biggest contributor to performance as

Hong Kong bond yields declined over the period. Security selection

within the portfolio's Hong Kong corporate bonds exposure also

contributed to performance. Exposures to a Hong Kong utility

company and an Australian bank were among the contributors.

22


INVESTMENT REPORT




1 Year 5 Years 10 Years

Since

Launch

Manulife MPF Pacific Asia Bond

Fund


1.12 1.28 N/A 1.36


(Lipper Asian Bond Median) 1.43 1.31 N/A 0.93


performance target

Under-

performed

Under-

performed N/A

Out-

performed

Trustee's commentary The fund's performance has slightly under-performed the market

median in the 1 year and 5 years terms while outperforming the

market median since launch.

According to the investment manager, the fund's underweight in

Australian dollar interest rate duration detracted from

performance as local yields fell over the period.

Manulife MPF RMB Bond Fund

Launch date: 16/12/2013 1.92 1.58 N/A 1.26


(Lipper RMB Bond Median) -0.25 0.10 N/A 0.58


performance target

Out-

performed

Out-

performed N/A

Out-

performed


the 1 year, 5 years terms and since launch.

According to the investment manager, security selection was the

biggest contributor to performance. Selective holdings in

Australian banks and Chinese property names were among the

contributors.

23


INVESTMENT REPORT





Manulife MPF Age 65 Plus Fund

Launch date: 01/04/2017 2.70 N/A N/A 2.98


(Lipper DIS-Age 65 Plus Fund

Median)

2.48 N/A N/A 3.06


performance target

Out-

performed N/A N/A

Under-

performed


the 1 year term while slightly under-performing compared to the

since launch performance.

The fund is a passively managed fund tracked against the DIS

Reference Portfolio. During the period, the fund closely matched

the Reference Portfolio.

Manulife MPF Growth Fund

Launch date: 01/12/2000 -4.63 3.14 6.85 3.63


(Lipper Lifestyle- (>60-80% Equity)

Median)

-3.03 3.47 6.94 4.26


performance target

Under-

performed

Under-

performed

Under-

performed

Under-

performed


the 1 year, 5 years, 10 years terms and since launch.

According to the investment manager, both allocation and

underlying equity funds were the main detractors. The stock

selection of both Hong Kong Equity and North American equity

sleeves detracted most.

24


INVESTMENT REPORT





Manulife MPF Fidelity Stable

Growth Fund


-1.44 2.75 6.19 5.06


(Lipper Lifestyle - (>40-60%

Equity) Median)

-2.67 2.62 5.32 3.94


performance target

Out-

performed

Out-

performed

Out-

performed

Out-

performed



According to the investment manager, asset allocation added value

by overweighting US equities. In Asia, a selected position in

technology buoyed performance. In particular, Australia's leading

global data services provider for artificial intelligence, gained as it

upgraded its earning guidance for financial year 2019. Within Hong

Kong, a position in a liquor and beverage maker rose as sales

volume growth, higher average selling prices and cost controls

resulted in upbeat earnings.

For bonds, the fund's underweight positions in the peripheral bonds

of Italy were the key contributors to performance as spreads over

German bonds had widened amidst Italy's political crisis and

concerns around the Italian budget. The fund's overall overweight

duration position in US Dollars also aided returns as the yield curve

edged lower over the period.

25


INVESTMENT REPORT





Manulife MPF International

Equity Fund


-1.80 5.32 10.24 2.43


(Lipper Global Equity Fund Median) -0.55 4.59 9.15 4.52


performance target

Under-

performed

Out-

performed

Out-

performed

Under-

performed

Trustee's commentary The fund's performance has out -performed the market median in

the 5 years and 10 years terms but under-performed in the 1 year

term and since launch.


underlying equity funds were the main detractors. In particular, the

stock selection of both Hong Kong Equity and North American

equity sleeves detracted most.

Manulife MPF North American

Equity Fund


0.98 7.35 12.91 2.77


(Lipper United States Equity Median) 5.54 7.78 12.90 8.14


performance target

Under-

performed

Under-

performed

Out-

performed

Under-

performed


the 1 year, 5 years terms and since launch but out-performed the

market median in the 10 years term.

According to the investment manager, security selection in the

Industrials, Health Care, Financials and Consumer Discretionary

sectors hindered the Fund's relative performance. Individual

detractors included a diversified industrials conglomerate that was a

top holding and large overweight early in the period. Its shares

declined due to disappointing results in its power-generation unit, a

dividend cut, an investigation into its accounting practices and a

profit warning despite new leadership and the sale of the company's

biopharmaceuticals business. In the Consumer Discretionary sector,

a non-benchmark position in a recreational vehicle company hurt, as

new tariffs on steel and aluminum imports boosted input costs,

pressuring near-term earnings.

26


INVESTMENT REPORT





Manulife MPF European Equity

Fund


-0.78 0.98 8.01 0.34


(Lipper European Equity Median) -5.08 0.98 7.85 1.97


performance target

Out-

performed Inline

Out-

performed

Under-

performed


the 1 year and 10 years terms and is also inline with the market

median for the 5 years term.

The performance of the fund significantly improved after the

underlying sub-investment manager was replaced in mid-January

2019.

According to the newly appointed investment manager, both stock

selection and sector allocation had a positive effect on

performance, with the latter particularly due to the overweight of

Information Technology and the underweighting of Financials and

Communication Services.

Manulife MPF 2020 Retirement

Fund


-3.12 2.65 N/A 2.74





comparison as the fund is a customized target date fund.

27


INVESTMENT REPORT





Manulife MPF Smart Retirement

Fund


-3.52 2.15 N/A 2.22






Manulife MPF Core Accumulation

Fund


2.24 N/A N/A 5.64


(Lipper DIS-Core Accumulation

Fund Median)

2.04 N/A N/A 5.63


performance target

Out-

performed N/A N/A

Out-

performed


the 1 year term and since launch.

The fund is a passively managed fund tracked against the DIS

Reference Portfolio. During the period, the fund closely matched

against the Reference Portfolio.

28


INVESTMENT REPORT





Manulife MPF Healthcare Fund

Launch date: 02/04/2008 11.68 5.44 11.69 7.42


(Lipper Global Equity Median) -0.55 4.59 9.15 4.52


performance target Out-performed

Out-

performed

Out-

performed Out- performed


comparison as the fund is the only sector equity fund in the MPF

market during the reporting period.

Since this fund is an equity fund investing globally, the "Lipper

MPF Global Equity Fund category median" will be used as the

performance target for the fund.

The fund's performance has out-performed the market median in


According to the investment manager, the fund's security selection

within biotechnology companies contributed to performance.

Individual contributors included an American biotechnology

product development company that produced strong earnings

results on the back of robust organic top-line growth. An American

pharmaceuticals company that develops drugs for a rare disease

withstood volatility in the biotechnology sector owing to solid

earnings results driven by continued revenue growth for its leading

ultra-orphan drug and its newly launched follow-on version. A

healthcare products and services company benefited from a

rebound in its dental supply business associated with stabilising

trends in end-user demand.

29


INVESTMENT REPORT





Manulife MPF Aggressive Fund

Launch date: 01/12/2000 -5.06 4.11 8.38 3.63


(Lipper Lifestyle- (>80-100%

Equity) Median)

-4.08 4.22 8.21 4.61


performance target

Under-

performed

Under-

performed

Out-

performed

Under-

performed

Trustee's commentary The fund's performance has under-performed the market median

in the 1 year, 5 years terms and since launch and out-performed

the market median in the 10 years term.


underlying equity funds were the main detractors. In particular,

the stock selection of both the Hong Kong Equity and the North

American equity sleeves detracted most.

Manulife MPF Fidelity Growth

Fund


-2.50 4.53 9.02 6.94


(Lipper Lifestyle- (>80-100%

Equity) Median)

-4.08 4.22 8.21 4.61


performance target

Out-

performed

Out-

performed

Out-

performed

Out-

performed



According to the investment manager, asset allocation added value

by an overweight of US equities. In Asia, selected positions in

technology buoyed performance. In particular, Australia's leading

global data services provider for artificial intelligence, gained as it

upgraded its earning guidance for financial year 2019. Within

Hong Kong, a position in a liquor and beverage maker increased

in value as sales volume growth, higher average selling prices and

cost controls resulted in upbeat earnings.

For bonds, the fund's underweight positions in the peripheral

bonds of Italy were the key contributors to performance as spreads

over German bonds had widened amidst Italy's political crisis and

concerns around the Italian budget. The fund's overall overweight

duration position in US Dollar bonds also aided returns as the

yield curve edged lower over the period.

30


INVESTMENT REPORT





Manulife MPF Pacific Asia Equity

Fund


-6.07 4.43 8.09 5.02


(Lipper Pacific Basin ex Japan Equity

Median)

-4.82 3.73 8.04 5.28


performance target

Under-

performed

Out-

performed

Out-

performed

Under-

performed


the 5 years and 10 years terms but under-performed the market

median in the 1 year term and since launch.

According to the investment manager, the asset allocation decisions

at country level detracted from performance. An Australian life

insurance company was the biggest performance detractor on the

back of concerns regarding the company's restructuring plans amid

a change in senior management and a regulatory review.

Manulife MPF Japan Equity Fund

Launch date: 01/12/2000 -8.06 6.44 7.54 1.09


(Lipper Japanese Equity Median) -8.64 3.53 6.25 -0.06


performance target

Out-

performed

Out-

performed

Out-

performed

Out-

performed


the 1 year term, 5 years, 10 years terms and since launch.

According to the investment manager, the most positive

contributing stocks to the fund were a sushi restaurant chain, an

electronics/healthcare company specialising in optics and an

advertising agency.

31


INVESTMENT REPORT





Manulife MPF Hong Kong Equity

Fund


-7.61 5.96 8.63 4.85


(Lipper Hong Kong Equity Median) -3.83 6.48 9.22 7.41


performance target

Under-

performed

Under-

performed

Under-

performed

Under-

performed



According to the investment manager, security selection detracted

from performance with healthcare, consumer services and utilities

being the largest detractors. Within the healthcare sector, the fund's

focus has been on drug companies that have a strong pipeline of

innovative drugs but the sector was sold-off indiscriminately after

generic drug price cuts were worse than expected.


Fund


-4.44 4.26 N/A 4.10







Fund


-4.61 4.19 N/A 4.03






32


INVESTMENT REPORT





Manulife MPF 2035 Retirement Fund

Launch date: 21/02/2011 -4.58 4.16 N/A 4.00




Trustee's commentary There is no market median performance information

available for comparison as the fund is a customized target

date fund.


Launch date: 21/02/2011 -4.56 3.93 N/A 3.84






date fund.


Launch date: 21/02/2011 -4.39 3.38 N/A 3.41






date fund.

33


INVESTMENT REPORT





Manulife MPF Hang Seng Index

Tracking Fund


-0.76 8.21 N/A 7.52


(Lipper HK Equity (Index Tracking)

Median)

-0.87 8.21 N/A 7.51


performance target

Out-

performed Inline N/A

Out-

performed


the 1 year term and since launch, and was inline with the market

median for the 5 years term.

The fund is an index-tracking fund tracking the Hang Seng Index

(Total Return) and its performance was very much inline with the

underlying index for the reporting period.

Manulife MPF China Value Fund

Launch date: 01/02/2006 -4.27 6.86 9.24 7.67


(Lipper Greater China Equity

Median)

-6.34 6.70 8.35 6.01


performance target

Out-

performed

Out-

performed

Out-

performed Out- performed



According to the investment manager, the Fund's key holdings in

the real estate and financial sectors contributed most to the relative

performance, and the portfolio manager's bottom-up stock picking

in these sectors was the main source of outperformance. The top

outperformers include a leading property developer, which has a

sizeable land bank in the Greater Bay Area. A Hong Kong-

headquartered life insurance company was also among the top

contributors, with its strong growth of new business value

benefiting from growth in China business. A-share stocks have also

contributed positively, in particular the premium liquor sector,

which has enjoyed a good supply-demand dynamic.

34


INVESTMENT REPORT



B. Supporting information in relation to the Trustee's assessment framework for deriving its

commentary and the Trustee's actions, if any, to address its concerns raised in its commentary in

Section A

The Trustee has established an assessment and monitoring framework to assess and review the performance

of the investment funds via an Investment Control Committee comprising representatives from different

technical areas, reporting to the board of the Trustee on a regular basis. The committee reviews each

investment fund's absolute and relative performance (if applicable) over different periods to flush out

investment funds delivering unsatisfactory performance. If underperformance persists, further enhanced

monitoring and management action is arranged as required until the subject fund reaches a satisfactory level.

During the period, the Trustee saw continuing improvement in the underlying investment of the Manulife

MPF Interest Fund and hence sought the guarantor, Manulife (International) Limited to revise the declared

interest rate of the Manulife MPF Interest Fund. Both parties agreed to maintain the declared interest rate at

0.5% per annum, which far exceeds the target declared rate (i.e. MPFA Prescribed Saving Rate (PSR)) as

described in the Offering Document.

At the same time, 10 of the 18 investment funds in the Scheme outperformed the market median in the 1

year term. Those funds are: Manulife MPF China Value Fund, Manulife MPF Fidelity Growth Fund,

Manulife MPF Fidelity Stable Growth Fund, DIS Funds (Manulife MPF Core Accumulation Fund and

Manulife MPF Age 65 Plus Fund), Manulife MPF Hang Seng Index Tracking Fund, Manulife MPF Hong

Kong Bond Fund, Manulife MPF European Equity Fund, Manulife MPF Japan Equity Fund and Manulife

MPF RMB Bond Fund.

8 out of the 18 investment funds slightly underperformed the market median by a range of 0.31% to 4.56%.

The Manulife MPF Hong Kong Equity and the Manulife MPF North American Equity were the worst

performing funds. For the Manulife MPF North American Equity Fund, the fund significantly

underperformed the benchmark in 2018 but its performance rebounded in 2019. The Trustee conducted an

intensive review with the existing investment manager and also initiated a global manager search to

determine if replacement of the manager was required. The fund is still under close monitoring and action

will be concluded later.

For the Manulife MPF Hong Kong Equity Fund, the Trustee also conducted an intensive review with the

investment manager. The investment manager has committed to add additional resources to the investment

team to strengthen its research capabilities. The fund will be changed to a portfolio managed fund to be

effective in mid-Jul 2019 after which the fund will be split and managed by two managers. It is expected that

such change would help generate a more consistent and acceptable return in the long run.

The underlying sub-investment manager of the European Equity Fund was replaced in mid-January 2019.

The performance has shown significant improvement under the management of the new manager. It reflects

the Trustee's strong global manager search capability and its commitment to take appropriate action to

replace managers as and when required.

Source: Lipper and Manulife Global Select (MPF) Scheme Quarterly Fund Fact Sheet (31 March 2019)

35


INVESTMENT REPORT


Investment income and performance record for the year ended/at 31 March 2019

MGAG MGCP MGEE MGGR MGHB MGHE MGIB MGIE

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

Net income excluding

net appreciation/depreciation of investment - - - - - - - -

Net appreciation/(depreciation) of investment

- realised and unrealised ( 1,182,448,691) 108,381,617 ( 19,814,609) ( 734,503,824) 110,836,507 ( 769,353,019) ( 59,828,331) ( 101,327,102)

Income derived from investments - - - - - - - -

Interest on interest bearing securities

Net asset value per unit 19.212 11.122 10.640 19.231 14.393 23.808 16.622 15.520

Net assets available for benefits 23,341,901,072 10,476,036,171 2,145,899,331 17,176,679,172 2,545,165,853 11,594,124,105 4,074,424,934 4,646,987,261

Highest issue price per unit # 20.927 11.118 11.374 20.639 14.415 27.109 16.992 16.376

Lowest redemption price per unit # 17.105 10.992 9.187 17.491 13.526 20.281 16.153 13.352

Net annualised investment return (%) (5.19) 1.21 (0.78) (4.74) 4.61 (7.77) (1.94) (1.89)

The net annualised investment return of each unitised constituent fund is calculated based on the ratio of the unit price at 31 March 2019 to the unit price at 31 March

2018.

# Highest issue price per unit and lowest redemption price per unit are determined by reference to published fund prices during the scheme year.

36


INVESTMENT REPORT


Investment income and performance record for the year ended/at 31 March 2019 (continued)

MGIT MGJE MGNE MGPE MGST MGFG MGFS MGCV



net appreciation/depreciation of investment 94,650,621 - - - - - - -


- realised and unrealised - ( 135,435,524) 2,700,118 ( 512,656,190) 14,865,741 ( 172,621,751) ( 38,026,759) ( 1,232,586,625)

Income derived from investments

Interest on interest bearing securities 94,650,621 - - - - - - -

Net asset value per unit N/A 12.198 16.491 24.565 15.358 28.434 21.564 26.441


Highest issue price per unit # N/A 13.726 17.831 27.050 15.461 30.221 22.149 28.852

Lowest redemption price per unit # N/A 11.131 13.265 21.856 14.423 25.102 19.929 22.546

Net annualised investment return (%) 0.49 (8.72) 0.99 (6.24) (0.07) (2.50) (1.44) (4.43)


2018. The net annualised investment return for MGIT is the sum of credit interest from April 2018 to March 2019 divided by the average monthly net asset value

from 31 March 2018 to 31 March 2019.


37


INVESTMENT REPORT



MGHC MGHS MGPB MGRB MG15 MG20 MG25 MG30





- realised and unrealised 2,156,862,266 5,627,054 14,411,401 21,793,804 ( 11,541,326) ( 17,687,531) ( 26,883,694) ( 24,748,155)


Interest on interest bearing securities - - - - - - - -


Net assets available for benefits 21,984,098,643 4,715,047,227 1,266,750,029 1,222,242,506 371,573,910 559,575,668 622,950,561 580,568,639



Net annualised investment return (%) 11.68 (0.76) 1.09 1.94 (3.59) (3.21) (4.50) (4.69)


2018.


38


INVESTMENT REPORT



MG35 MG40 MG45 MGAP MGCA

HK$ HK$ HK$ HK$ HK$


net appreciation/depreciation of investment - - - - -


- realised and unrealised ( 26,027,643) ( 19,993,872) ( 35,621,497) 36,961,032 92,809,004


Interest on interest bearing securities - - - - -

Net asset value per unit 13.747 13.771 13.850 10.604 11.160

Net assets available for benefits 589,169,811 463,580,158 825,414,008 1,346,732,621 4,810,358,856

Highest issue price per unit # 14.901 14.934 15.004 10.603 11.195

Lowest redemption price per unit # 12.241 12.237 12.310 10.089 10.092

Net annualised investment return (%) (4.71) (4.73) (4.56) 2.72 2.26


2018.


39


INVESTMENT REPORT







Net appreciation of investment

- realised and unrealised 3,334,418,894 13,043,677 128,448,283 1,958,028,544 6,331,500 2,340,696,758 122,531,350 464,563,064







Net annualised investment return (%) 18.91 0.24 6.84 16.04 0.59 32.57 4.16 14.32


2017.


40


INVESTMENT REPORT






net appreciation/depreciation of investment 32,032,686 - - - - - - -


- realised and unrealised - 258,706,834 386,524,900 1,324,801,691 706,409,640 967,609,144 391,332,544 5,854,751,905


Interest on interest bearing securities 32,032,686 - - - - - - -

Net asset value per unit N/A 13.363 16.330 26.200 15.369 29.162 21.879 27.667


Highest issue price per unit # N/A 14.528 17.774 27.994 15.924 31.626 22.896 30.315

Lowest redemption price per unit # N/A 11.261 14.502 21.263 14.395 24.446 19.425 21.709






41


INVESTMENT REPORT








- realised and unrealised 774,705,812 768,746,521 26,580,210 56,892,527 29,141,056 54,236,060 68,965,178 66,495,113




Net assets available for benefits 17,722,641,767 3,954,002,198 1,150,495,676 1,070,450,728 325,793,272 547,647,368 576,465,704 515,349,593





2017.


42


INVESTMENT REPORT




HK$ HK$ HK$ HK$ HK$


net appreciation/depreciation of investment - - - - -


- realised and unrealised 72,342,649 57,722,306 104,334,354 8,148,980 87,398,516


Interest on interest bearing securities - - - - -

Net asset value per unit 14.426 14.455 14.512 10.323 10.913

Net assets available for benefits 533,908,614 416,007,260 748,624,271 673,866,385 2,280,552,863

Highest issue price per unit # 15.530 15.571 15.642 10.413 11.397

Lowest redemption price per unit # 12.083 12.079 12.123 9.998 9.979

Net annualised investment return (%) 18.60 18.86 18.89 N/A N/A


2017.


43


INVESTMENT REPORT








- realised and unrealised 2,045,133,547 2,949,777 209,311,696 1,031,352,816 ( 9,393,894) 944,672,413 ( 69,343,114) 412,091,880







Net annualised investment return (%) 13.24 0.07 13.04 9.48 (0.33) 16.05 (2.26) 16.50


2016.


44


INVESTMENT REPORT



MGIT MGJE MGNE MGPE MGST MGFG MGFS MGCV MGHC

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


net appreciation/depreciation of investment 1,194,970 - - - - - - - -


- realised and unrealised - 189,996,673 465,294,820 791,012,780 312,261,441 491,175,285 125,682,291 3,027,509,098 704,203,417


Interest on interest bearing securities 1,194,970 - - - - - - - -

Net asset value per unit N/A 11.489 14.779 21.501 14.382 24.666 19.443 21.812 18.800

Net assets available for benefits 13,358,384,190 1,422,884,315 3,440,606,268 5,720,971,176 10,119,136,246 5,117,595,684 2,949,401,899 21,725,478,808 16,362,512,276

Highest issue price per unit # N/A 11.781 15.018 21.676 14.493 24.864 19.612 22.342 19.742

Lowest redemption price per unit # N/A 9.384 11.914 17.664 13.779 21.327 18.183 17.376 17.227

Net annualised investment return (%) 0.01 15.58 20.08 16.77 3.34 11.09 4.84 16.21 5.15





45


INVESTMENT REPORT



MGHS MGPB MGRB MG15 MG20 MG25 MG30 MG35 MG40 MG45

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


net appreciation/depreciation of investment - - - - - - - - - -


- realised and unrealised 366,751,887 1,473,866 ( 9,986,431) 9,189,478 21,083,373 31,187,550 31,903,504 35,055,504 28,157,154 51,813,742


Interest on interest bearing securities - - - - - - - - - -

Net asset value per unit 13.115 10.536 9.668 10.961 11.355 11.845 12.059 12.164 12.161 12.206

Net assets available for benefits 2,568,277,798 824,794,508 529,551,814 204,148,373 370,917,493 383,287,235 329,268,598 345,649,652 273,136,172 498,824,942

Highest issue price per unit # 13.333 10.853 10.055 11.010 11.404 11.902 12.131 12.238 12.239 12.285

Lowest redemption price per unit # 10.473 10.138 9.559 10.197 10.424 10.455 10.410 10.408 10.390 10.410

Net annualised investment return /

actual net investment return (%) 18.92 0.56 (1.90) 5.59 6.59 9.96 11.99 12.75 12.89 13.06


2016.


46


INVESTMENT REPORT


Performance record for the year ended/at 31 March 2016





Net annualised investment return (%) (9.17) 0.00 (11.61) (7.30) 1.23 (17.03) 1.69 (5.32)


2015.


47


INVESTMENT REPORT


Performance record for the year ended/at 31 March 2016 (continued)





Net annualised investment return (%) 0.01 (4.05) (1.29) (10.81) (3.07) (9.47) (4.57) (15.67) (10.53)





48


INVESTMENT REPORT








actual net investment return (%) (14.62) 1.66 (1.32) (4.94) (5.33) (7.29) (8.33) (8.75) (8.91) (8.99)


2015.


49


INVESTMENT REPORT







Net annualised investment return (%) 5.50 0.23 (0.90) 4.01 5.21 13.43 (0.96) 4.74


2014.


50


INVESTMENT REPORT












51


INVESTMENT REPORT








actual net investment return (%) 15.88 0.03 1.09 1.69 2.99 4.52 4.99 5.43 5.42 5.53


2014.


52


INVESTMENT REPORT







Net annualised investment return (%) 10.70 0.05 17.93 7.72 (2.89) 5.72 (0.58) 16.12


2013.


53


INVESTMENT REPORT







Net annualised investment return (%) 0.01 11.61 20.87 3.13 0.75 10.30 6.32 (0.95) 23.57





54


INVESTMENT REPORT


Performance record for the period ended/year ended/at 31 March 2014 (continued)






actual net investment return (%) 1.07 (2.06) (1.21)* 4.65 7.02 8.83 9.65 9.95 10.05 10.07


2013.


* The actual net investment return of MGRB is calculated based on the ratio of the unit price at 31 March 2014 to the unit price at its launch date on 16 December

2013.

55


INVESTMENT REPORT









2012.


56


INVESTMENT REPORT












57


INVESTMENT REPORT


Performance record for the period ended/year ended/at 31 March 2013 (continued)

MGHS MGPB MG15 MG20 MG25 MG30 MG35 MG40 MG45


Highest issue price per unit # 11.732 10.545 10.367 10.328 10.355 10.346 10.344 10.341 10.359

Lowest redemption price per unit # 8.968 9.781 9.056 8.646 8.430 8.328 8.297 8.284 8.294


actual net investment return (%) 10.28* 5.20* 5.04 6.73 7.99 8.54 8.73 8.74 8.82

The net annualised investment return of each unitised constituent fund is calculated based on the ratio of the unit price at 31 March 2013 to the unit price at its launch

date at 23 Apr 2012 or 31 March 2012.


* The actual net investment return of MGHS and MGPB is calculated based on the ratio of the unit price at 31 March 2013 to the unit price at its launch date on

23 April 2012.

58


INVESTMENT REPORT







Net annualised investment return (%) (8.24 ) 0.01 (8.74 ) (5.97 ) 3.87 (16.33 ) 4.50 (2.36 )


2011.


59


INVESTMENT REPORT







Net annualised investment return (%) 0.01 (5.98 ) 5.19 (12.55 ) (0.92 ) (6.94 ) (1.76 ) (14.61) 6.73





60


INVESTMENT REPORT



MG15 MG20 MG25 MG30 MG35 MG40 MG45

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

Highest issue price per unit # 10.418 10.434 10.447 10.439 10.438 10.444 10.457

Lowest redemption price per unit # 8.689 8.238 8.008 7.908 7.879 7.870 7.870

Net annualised investment return (%) (3.58 ) (5.62 ) (6.79 ) (7.26 ) (7.49 ) (7.59 ) (7.56 )


2011.


61


INVESTMENT REPORT









2010.


62


INVESTMENT REPORT







Net annualised investment return (%) 0.06 (3.11) 15.16 14.58 4.97 9.94 7.73 17.23 8.30





63


INVESTMENT REPORT


Performance record for the year ended/period ended/at 31 March 2011 (continued)

MG15 MG20 MG25 MG30 MG35 MG40 MG45

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

Highest issue price per unit # 10.140 10.164 10.191 10.184 10.189 10.194 10.201

Lowest redemption price per unit # 9.835 9.727 9.678 9.643 9.639 9.638 9.646


actual net investment return (%) 1.33* 1.35* 1.48* 1.36* 1.38* 1.45* 1.52*

* The actual net investment return of each unitised constituent fund above is calculated based on the ratio of the unit price at 31 March 2011 to the unit price at its

launch date on 21 February 2011.


64


INVESTMENT REPORT









2009.


65


INVESTMENT REPORT












66


INVESTMENT REPORT


Investment portfolio at 31 March 2019

Name Quoted investments Holdings Market value Cost % of

of Fund - approved pooled investment fund Units HK$ HK$ net assets

MGAG Aggressive Unit Trust Fund 1,214,965,926 23,341,901,072 20,142,892,761 100.00

MGCP Conservative Unit Trust Fund 941,913,059 10,476,036,171 10,386,543,758 100.00

MGEE European Equity Unit Trust Fund 201,680,827 2,145,899,331 2,091,405,897 100.00

MGGR Growth Unit Trust Fund 893,168,007 17,176,679,172 15,480,152,085 100.00

MGHB Hong Kong Bond Unit Trust Fund 176,835,813 2,545,165,853 2,426,172,182 100.00

MGHE Hong Kong Equity Unit Trust Fund 486,984,420 11,594,124,105 11,063,330,307 100.00

MGIB International Bond Unit Trust Fund 245,125,182 4,074,424,934 4,045,384,012 100.00

MGIE International Equity Unit Trust Fund 299,426,151 4,646,987,261 3,922,971,603 100.00

MGIT Interest Fund Policy N/A 21,520,774,781 21,520,774,781 100.00

MGJE Japan Equity Unit Trust Fund 145,116,719 1,770,111,098 1,767,758,804 100.00

MGNE North American Equity Unit Trust Fund 321,511,406 5,302,027,239 4,920,198,083 100.00

MGPE Pacific Asia Equity Unit Trust Fund 350,513,046 8,610,329,481 7,992,034,338 100.00

MGST Stable Fund Policy 854,472,231 13,123,366,472 12,142,963,924 100.00

MGFG Growth Unit Trust Fund (Series I) 266,697,161 7,583,339,076 6,534,830,782 100.00

MGFS Stable Growth Unit Trust Fund 293,866,078 6,336,800,288 5,904,566,738 100.00

MGCV China Value Unit Trust Fund 999,659,749 26,431,770,505 22,616,059,250 100.00

MGHC Healthcare Unit Trust Fund 1,000,420,009 21,984,098,643 19,159,764,420 100.00

MGHS Hang Seng Index Tracking

Unit Trust Fund 285,100,043 4,715,047,227 4,419,343,243 100.00

MGPB Pacific Asia Bond Unit Trust Fund 115,386,468 1,266,750,029 1,228,477,624 100.00

MGRB RMB Bond Unit Trust Fund 114,383,106 1,222,242,506 1,173,963,471 100.00

67


INVESTMENT REPORT


Investment portfolio at 31 March 2019 (continued)

Name Quoted investments Holdings Market value Cost % of

of Fund - approved pooled investment fund Units HK$ HK$ net assets

MG15 Smart Retirement Unit Trust Fund 31,108,611 371,573,910 356,737,388 100.00

MG20 2020 Retirement Unit Trust Fund 44,934,734 559,575,668 522,973,576 100.00






MGAP Age 65 Plus Unit Trust Fund 127,004,502 1,346,732,621 1,304,692,127 100.00

MGCA Core Accumulation Unit Trust Fund 431,034,774 4,810,358,856 4,657,686,960 100.00

Note: Investments are accounted for on a trade day basis.

68


INVESTMENT REPORT


Statement of movement in portfolio holdings

Year Year

ended ended

31 March 2019 31 March 2018

Name Quoted investments % of % of

of Fund - approved pooled investment fund net assets net assets

MGAG Aggressive Unit Trust Fund 100.00 100.00

MGCP Conservative Unit Trust Fund 100.00 100.00

MGEE European Equity Unit Trust Fund 100.00 100.00

MGGR Growth Unit Trust Fund 100.00 100.00

MGHB Hong Kong Bond Unit Trust Fund 100.00 100.00

MGHE Hong Kong Equity Unit Trust Fund 100.00 100.00

MGIB International Bond Unit Trust Fund 100.00 100.00

MGIE International Equity Unit Trust Fund 100.00 100.00

MGIT Interest Fund Policy 100.00 100.00

MGJE Japan Equity Unit Trust Fund 100.00 100.00

MGNE North American Equity Unit Trust Fund 100.00 100.00

MGPE Pacific Asia Equity Unit Trust Fund 100.00 100.00

MGST Stable Fund Policy 100.00 100.00

MGFG Growth Unit Trust Fund (Series I) 100.00 100.00

MGFS Stable Growth Unit Trust Fund 100.00 100.00

MGCV China Value Unit Trust Fund 100.00 100.00

MGHC Healthcare Unit Trust Fund 100.00 100.00

MGHS Hang Seng Index Tracking Unit Trust Fund 100.00 100.00

MGPB Pacific Asia Bond Unit Trust Fund 100.00 100.00

MGRB RMB Bond Unit Trust Fund 100.00 100.00

69


INVESTMENT REPORT


Statement of movement in portfolio holdings (continued)

Year Year

ended ended

31 March 2019 31 March 2018

Name Quoted investments % of % of

of Fund - approved pooled investment fund net assets net assets

MG15 Smart Retirement Unit Trust Fund 100.00 100.00

MG20 2020 Retirement Unit Trust Fund 100.00 100.00






MGAP Age 65 Plus Unit Trust Fund 100.00 100.00

MGCA Core Accumulation Unit Trust Fund 100.00 100.00

70


INVESTMENT REPORT


Fund expense ratio

Year ended Year ended

Name Quoted investments 31 March 2019 31 March 2018

of Fund - approved pooled investment fund % %

MGAG Aggressive Unit Trust Fund 1.82 2.09

MGCP Conservative Unit Trust Fund 0.75 0.77

MGEE European Equity Unit Trust Fund 1.85 1.94

MGGR Growth Unit Trust Fund 1.80 2.06

MGHB Hong Kong Bond Unit Trust Fund 1.28 1.54

MGHE Hong Kong Equity Unit Trust Fund 1.82 1.95

MGIB International Bond Unit Trust Fund 1.28 1.53

MGIE International Equity Unit Trust Fund 1.81 2.33

MGIT Interest Fund Policy 1.78 1.79

MGJE Japan Equity Unit Trust Fund 1.84 1.94

MGNE North American Equity Unit Trust Fund 1.82 2.81

MGPE Pacific Asia Equity Unit Trust Fund 1.86 1.97

MGST Stable Fund Policy 1.82 1.98

MGFG Growth Unit Trust Fund (Series I) 1.86 2.00

MGFS Stable Growth Unit Trust Fund 1.79 1.98

MGCV China Value Unit Trust Fund 2.00 2.02

MGHC Healthcare Unit Trust Fund 1.92 1.98

MGHS Hang Seng Index Tracking Unit Trust Fund 1.00 1.01

MGPB Pacific Asia Bond Unit Trust Fund 1.36 1.59

MGRB RMB Bond Unit Trust Fund 1.22 1.24

71


INVESTMENT REPORT


Fund expense ratio (continued)

Year ended Year ended

Name Quoted investments 31 March 2019 31 March 2018

of Fund - approved pooled investment fund % %

MG15 Smart Retirement Unit Trust Fund 1.39 2.11







MGAP Age 65 Plus Unit Trust Fund 0.76 0.78

MGCA Core Accumulation Unit Trust Fund 0.75 0.74

Ernst & Young 22/F, CITIC Tower 1 Tim Mei Avenue Central, Hong Kong

INDEPENDENT AUDITOR'S REPORT

$.';;k~ttCifi!JJtrJr Tel 'l!W!i: +852 2846 9888 wif!q:iJi~~il':tl 51k Fax 11!1{: +852 2868 4432 'llffl*Ja:22tl ey.com

TO THE TRUSTEE OF MANULIFE GLOBAL SELECT (MPF) SCHEME

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Manulife Global Select (MPF) Scheme (the "Scheme") set out on pages 75 to 142, which comprise the statement of net assets available for benefits as at 31 March 2019, and the statement of profit or loss and other comprehensive income, the statement of changes in net assets available for benefits and statement of cash flows 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 March 2019, and 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 the information included in the consolidated report, other than the financial statements, our auditor's report and independent auditor's assurance report.

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 the fact. We have nothing to report in this regard.

72

A member fir'm Of Ernst & Young Global l imited

INDEPENDENT AUDITOR'S REPORT {continued) TO THE TRUSTEE OF MANULIFE GLOBAL SELECT {MPF) SCHEME

Responsibilities of trustee for the financial statements

The trustee is responsible for the preparation of 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 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 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 responslbllities 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. Our report is made solely to you, as a body, 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.

• 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.

73

A member firm of Ernst & Young Global limited

INDEPENDENT AUDITOR'S REPORT (continued) TO THE TRUSTEE OF MANULIFE GLOBAL SELECT (MPF) SCHEME

Auditor's responsibilities for the audit of the financial statements (continued)

• 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 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.

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

a. In our opinion, the financial statements have been properly prepared, in all material respects, 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 our knowledge and belief, are necessary for the purpose of our audit.

Certified Public Accountants Hong Kong 17 September 2019

A member firm ot Ernst & Young Global limited

74

75


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


2019 2018

HK$ HK$

INVESTMENT INCOME

Net realised gains on disposal of investments

at fair value through profit or loss 3,126,993,304 7,076,637,670

Net change in unrealised gains/losses on investments

at fair value through profit or loss (5,588,200,282) 13,389,303,026 ______________ _____________

(2,461,206,978) 20,465,940,696

OTHER INCOME

Interest income 322,928 7,374 ______________ _____________

(2,460,884,050) 20,465,948,070

EXPENSES

Bank charges 40,005 28,140 ______________ _____________

(LOSS)/PROFIT AND TOTAL COMPREHENSIVE

INCOME FOR THE YEAR (2,460,924,055) 20,465,919,930 ______________ _____________ ______________ _____________


STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS

At 31 March 2019

ASSETS Investments at fair value through profit or loss Contribution receivables from employers Contribution receivables from employees Amounts receivable on sale of investments Other receivables Cash and cash equivalents

TOTAL ASSETS

LIABILITIES Benefits payable Amounts payable on purchase of investments Other payables

TOTAL LIABILITIES

EQUITY Net assets available for benefits

TOTAL LIABILITIES AND EQUITY

Notes

6

ll(b) ll(b)

7

ll(b)

2019 HK$

206,037,799,476 546,278,981 349,485,370 534,650,435 41,424,800

581,265,446

208,090,904,508

107,008,330 504,181,480 189,000,687

800,190,497

207,290,714,011

208,090,904,508

For and on behalf of Manulife Provident Funds Trust Company Limited

\A,,... . .......................... . ~\fung Directot\

76

2018 HK$

174,656,784,757 455,651,362 308,937,723 620,526,661 41,982,049

441,726,902

176,525,609,454

110,610,810 529,770,320 212,294,911

852,676,041

175,672,933,413

176,525,609,454

77


STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS


Notes 2019 2018

HK$ HK$

BALANCE BROUGHT FORWARD 175,672,933,413 138,307,477,117 ______________ ______________

CONTRIBUTIONS RECEIVED AND RECEIVABLE 4

From employers

Normal or mandatory 5,983,202,559 5,063,916,535

Additional voluntary 1,176,207,048 844,626,717

From members

Normal or mandatory 5,873,953,969 4,975,899,607

Additional voluntary 384,599,898 573,925,760

Transfers in

Group transfers in from other schemes 3,886,529,097 5,244,687,392

Individual transfers in from other schemes 27,683,894,703 11,148,748,534 ______________ ______________

44,988,387,274 27,851,804,545 ______________ ______________

BENEFITS PAID AND PAYABLE 5

Death or disability benefits ( 224,269,058) ( 188,900,096)

Lump sum retirement benefits ( 1,997,411,303) ( 1,832,734,454)

Payments to and on account of leavers

Refunds of contributions ( 2,653,920,403) ( 2,409,136,227)

Group transfers out to other schemes ( 149,675,233) ( 155,821,542)

Individual transfers out to other schemes ( 5,522,288,987) ( 5,740,456,102)

Withdrawal from special voluntary contribution ( 362,117,637) ( 625,219,758) ______________ ______________

( 10,909,682,621) ( 10,952,268,179) ______________ ______________ 209,751,638,066 155,207,013,483

Total comprehensive income for the year ( 2,460,924,055) 20,465,919,930 ______________ ______________

BALANCE CARRIED FORWARD 207,290,714,011 175,672,933,413 ______________ ______________ ______________ ______________

78


STATEMENT OF CASH FLOWS


Note 2019 2018

HK$ HK$

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/profit for the year ( 2,460,924,055) 20,465,919,930

Adjustments for:


at fair value through profit or loss 5,588,200,282 ( 13,389,303,026)

Net realised gains on disposal of investments

at fair value through profit or loss ( 3,126,993,304) ( 7,076,637,670)

Interest income ( 322,928) ( 7,374) _______________ ______________

( 40,005) ( 28,140)

Decrease/(increase) in other receivables 557,249 ( 12,263,720)

(Decrease)/increase in other payables ( 23,294,224) 61,008,908 _______________ ______________

Net cash flows (used in)/from operating activities ( 22,776,980) 48,717,048 _______________ ______________

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of investments at fair value

through profit or loss – in cash (92,002,456,142) ( 84,606,131,795)


through profit or loss – in specie * ( 9,439,271,204) -

Sales of investments at fair value through profit or loss 67,754,443,656 67,842,602,824

Interest received 322,928 7,374 _______________ ______________

Net cash flows used in investing activities (33,686,960,762) ( 16,763,521,597) _______________ ______________

CASH FLOWS FROM FINANCING ACTIVITIES

Contributions received – in cash 35,323,290,183 27,697,744,508

Contributions received – in specie * 9,439,271,204 -

Benefits paid (10,913,285,101) ( 10,914,391,695) _______________ ______________

Net cash flows from financing activities 33,849,276,286 16,783,352,813 _______________ ______________

NET INCREASE IN CASH AND CASH EQUIVALENTS 139,538,544 68,548,264

Cash and cash equivalents at beginning of year 441,726,902 373,178,638 _______________ ______________

CASH AND CASH EQUIVALENTS AT END OF YEAR 581,265,446 441,726,902 _______________ ______________ _______________ ______________

ANALYSIS OF BALANCES OF CASH AND CASH

EQUIVALENTS

Bank balances 7 581,265,446 441,726,902 _______________ _____________ _______________ _____________

* The purchase and subscription were done in specie arising from the scheme merger arrangement. Please

refer to note 1 to the financial statements for details.

79


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME - CONSTITUENT FUNDS




INVESTMENT INCOME

Net realised gains/(losses) on disposal

of investments at fair value

through profit or loss 400,168,931 29,767,571 3,146,903 246,134,560 4,479,162 240,763,736 (3,782,914) 118,233,103

Net change in unrealised gains/losses on

investments at fair value

through profit or loss (1,582,617,622) 78,614,046 (22,961,512) (980,638,384) 106,357,345 (1,010,116,755) (56,045,417) (219,560,205) ____________ __________ ___________ ____________ __________ ____________ __________ __________

(LOSS)/PROFIT AND TOTAL

COMPREHENSIVE INCOME

FOR THE YEAR (1,182,448,691) 108,381,617 (19,814,609) (734,503,824) 110,836,507 ( 769,353,019) (59,828,331) (101,327,102) ____________ __________ ___________ ____________ __________ ____________ __________ __________ ____________ __________ ___________ ____________ __________ ____________ __________ __________

80


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME - CONSTITUENT FUNDS (continued)




INVESTMENT INCOME

Net realised (losses)/gains on disposal


through profit or loss - (143,390,709) 180,033,488 247,531,014 125,897,639 140,139,112 47,904,254 801,365,032



through profit or loss - 7,955,185 (177,333,370) (760,187,204) (111,031,898) (312,760,863) (85,931,013) (2,033,951,657) _________ ___________ ___________ ____________ ___________ ___________ __________ ____________

- (135,435,524) 2,700,118 (512,656,190) 14,865,741 (172,621,751) (38,026,759) (1,232,586,625)

OTHER INCOME

Interest income 94,650,621 - - - - - - - _________ ___________ ___________ ____________ ___________ ___________ __________ ____________

PROFIT/(LOSS) AND TOTAL


FOR THE YEAR 94,650,621 (135,435,524) 2,700,118 (512,656,190) 14,865,741 (172,621,751) (38,026,759) (1,232,586,625) _________ ___________ ___________ ____________ ___________ ___________ __________ ____________ _________ ___________ ___________ ____________ ___________ ___________ __________ ____________

81






INVESTMENT INCOME

Net realised gains/(losses) on disposal


through profit or loss 407,905,492 116,240,820 ( 1,431,534) 6,212,656 2,782,160 7,413,460 8,151,566 7,259,676


investment at fair value

through profit or loss 1,748,956,774 (110,613,766) 15,842,935 15,581,148 (14,323,486) (25,100,991) (35,035,260) (32,007,831) ____________ ___________ __________ __________ __________ __________ __________ __________

PROFIT/(LOSS) AND TOTAL


FOR THE YEAR 2,156,862,266 5,627,054 14,411,401 21,793,804 (11,541,326) (17,687,531) (26,883,694) (24,748,155) ____________ ___________ __________ __________ __________ __________ __________ __________ ____________ ___________ __________ __________ __________ __________ __________ __________

82





HK$ HK$ HK$ HK$ HK$

INVESTMENT INCOME

Net realised gains on disposal


through profit or loss 8,388,864 7,127,875 13,819,552 1,476,249 8,604,965



through profit or loss (34,416,507) (27,121,747) (49,441,049) 35,484,783 84,204,039 __________ __________ __________ _________ __________

(LOSS)/PROFIT AND TOTAL


FOR THE YEAR (26,027,643) (19,993,872) (35,621,497) 36,961,032 92,809,004 __________ __________ __________ _________ __________ __________ __________ __________ _________ __________

83


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME - CONSTITUENT FUNDS




INVESTMENT INCOME



through profit or loss 614,757,323 7,063,919 148,331,636 325,695,262 13,394,918 1,245,630,191 17,306,407 175,920,418



through profit or loss 2,719,661,571 5,979,758 ( 19,883,353) 1,632,333,282 ( 7,063,418) 1,095,066,567 105,224,943 288,642,646 ____________ _________ ___________ ____________ __________ ____________ __________ __________

PROFIT AND TOTAL


FOR THE YEAR 3,334,418,894 13,043,677 128,448,283 1,958,028,544 6,331,500 2,340,696,758 122,531,350 464,563,064 ____________ _________ ___________ ____________ __________ ____________ __________ __________ ____________ _________ ___________ ____________ __________ ____________ __________ __________

84






INVESTMENT INCOME



through profit or loss - 311,372,516 333,403,234 486,182,917 210,705,358 239,371,865 79,324,772 1,628,344,923



through profit or loss - ( 52,665,682) 53,121,666 838,618,774 495,704,282 728,237,279 312,007,772 4,226,406,982 _________ ___________ ___________ ____________ ___________ ___________ __________ ____________

- 258,706,834 386,524,900 1,324,801,691 706,409,640 967,609,144 391,332,544 5,854,751,905

OTHER INCOME

Interest income 32,032,686 - - - - - - - _________ __________ ___________ ____________ ___________ ___________ __________ ____________

PROFIT AND TOTAL


FOR THE YEAR 32,032,686 258,706,834 386,524,900 1,324,801,691 706,409,640 967,609,144 391,332,544 5,854,751,905 _________ __________ ___________ ____________ ___________ ___________ __________ ____________ _________ __________ ___________ ____________ ___________ ___________ __________ ____________

85






INVESTMENT INCOME



through profit or loss 513,854,754 552,119,572 12,222,217 12,046,196 7,744,021 12,377,942 14,139,472 13,722,356



through profit or loss 260,851,058 216,626,949 14,357,993 44,846,331 21,397,035 41,858,118 54,825,706 52,772,757 __________ __________ __________ __________ __________ __________ __________ __________

PROFIT AND TOTAL


FOR THE YEAR 774,705,812 768,746,521 26,580,210 56,892,527 29,141,056 54,236,060 68,965,178 66,495,113 __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

86





HK$ HK$ HK$ HK$ HK$

INVESTMENT INCOME



through profit or loss 12,680,206 11,287,819 25,080,841 1,593,270 18,930,659



through profit or loss 59,662,443 46,434,487 79,253,513 6,555,710 68,467,857 __________ __________ __________ _________ __________

PROFIT AND TOTAL


FOR THE YEAR 72,342,649 57,722,306 104,334,354 8,148,980 87,398,516 __________ __________ __________ _________ __________ __________ __________ __________ _________ __________

87


STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS - CONSTITUENT FUNDS

At 31 March 2019

Notes MGAG MGCP MGEE MGGR MGHB MGHE MGIB MGIE


ASSETS

Investments at fair value through profit or loss 6 23,341,901,072 10,476,036,171 2,145,899,331 17,176,679,172 2,545,165,853 11,594,124,105 4,074,424,934 4,646,987,261

Amounts receivable on subscription 11(b) 21,874,065 27,559,965 2,958,980 10,552,007 13,891,640 90,524,370 4,576,170 2,693,253

Amounts receivable on sale of investments 11(b) 12,909,605 44,867,278 2,668,274 64,157,805 4,104,314 112,720,327 3,377,871 2,150,608 _________ _________ _________ _________ _________ _________ _________ _________

TOTAL ASSETS 23,376,684,742 10,548,463,414 2,151,526,585 17,251,388,984 2,563,161,807 11,797,368,802 4,082,378,975 4,651,831,122 _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ LIABILITIES

Amounts payable on redemption 11(b) 12,909,605 44,867,278 2,668,274 64,157,805 4,104,314 112,720,327 3,377,871 2,150,608

Amounts payable on purchase of investments 11(b) 21,874,065 27,559,965 2,958,980 10,552,007 13,891,640 90,524,370 4,576,170 2,693,253 _________ _________ _________ _________ _________ _________ _________ _________

TOTAL LIABILITIES 34,783,670 72,427,243 5,627,254 74,709,812 17,995,954 203,244,697 7,954,041 4,843,861 _________ _________ _________ _________ _________ _________ _________ _________

EQUITY

Net assets available for benefits 23,341,901,072 10,476,036,171 2,145,899,331 17,176,679,172 2,545,165,853 11,594,124,105 4,074,424,934 4,646,987,261 _________ _________ _________ _________ _________ _________ _________ _________

TOTAL LIABILITIES AND EQUITY 23,376,684,742 10,548,463,414 2,151,526,585 17,251,388,984 2,563,161,807 11,797,368,802 4,082,378,975 4,651,831,122 _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ CAPITAL ACCOUNT'S UNITS

IN ISSUE 1,214,965,926 941,913,059 201,680,827 893,168,007 176,835,813 486,984,420 245,125,182 299,426,151 _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ NET ASSET VALUE PER UNIT 19.212 11.122 10.640 19.231 14.393 23.808 16.622 15.520 _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________

88


STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS - CONSTITUENT FUNDS (continued)

At 31 March 2019

Notes MGIT MGJE MGNE MGPE MGST MGFG MGFS MGCV


ASSETS



Amounts receivable on sale of investments 11(b) 58,860,774 18,762,757 9,000,899 78,835,204 17,665,205 5,711,353 4,368,411 27,941,789 __________ _________ _________ _________ _________ _________ _________ _________

TOTAL ASSETS 21,636,608,888 1,959,069,971 5,319,299,220 8,702,410,311 13,148,069,365 7,594,906,368 6,345,129,521 26,474,754,640 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________ LIABILITIES


Amounts payable on purchase of investments 11(b) 56,973,333 170,196,116 8,271,082 13,245,626 7,037,688 5,855,939 3,960,822 15,042,346 __________ _________ _________ _________ _________ _________ _________ _________

TOTAL LIABILITIES 115,834,107 188,958,873 17,271,981 92,080,830 24,702,893 11,567,292 8,329,233 42,984,135 __________ _________ _________ _________ _________ _________ _________ _________

EQUITY

Net assets available for benefits 21,520,774,781 1,770,111,098 5,302,027,239 8,610,329,481 13,123,366,472 7,583,339,076 6,336,800,288 26,431,770,505 __________ _________ _________ _________ _________ _________ _________ _________

TOTAL LIABILITIES AND EQUITY 21,636,608,888 1,959,069,971 5,319,299,220 8,702,410,311 13,148,069,365 7,594,906,368 6,345,129,521 26,474,754,640 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________ CAPITAL ACCOUNT'S UNITS

IN ISSUE N/A 145,116,719 321,511,406 350,513,046 854,472,231 266,697,161 293,866,078 999,659,749 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________ NET ASSET VALUE PER UNIT N/A 12.198 16.491 24.565 15.358 28.434 21.564 26.441 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________

89



At 31 March 2019

Notes MGHC MGHS MGPB MGRB MG15 MG20 MG25 MG30


ASSETS

Investments at fair value through profit or loss 6 21,984,098,643 4,715,047,227 1,266,750,029 1,222,242,506 371,573,910 559,575,668 622,950,561 580,568,639

Amounts receivable on subscription 11(b) 19,881,703 18,859,841 1,694,211 2,681,920 114,233 48,939 880,439 13,584

Amounts receivable on sale of investments 11(b) 17,663,321 30,624,184 3,858,852 2,673,664 985,766 567,586 479,782 335,362 __________ _________ _________ _________ _________ _________ _________ _________

TOTAL ASSETS 22,021,643,667 4,764,531,252 1,272,303,092 1,227,598,090 372,673,909 560,192,193 624,310,782 580,917,585 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________ LIABILITIES

Amounts payable on redemption 11(b) 17,663,321 30,624,184 3,858,852 2,673,664 985,766 567,586 479,782 335,362

Amounts payable on purchase of investments 11(b) 19,881,703 18,859,841 1,694,211 2,681,920 114,233 48,939 880,439 13,584 __________ _________ _________ _________ _________ _________ _________ _________

TOTAL LIABILITIES 37,545,024 49,484,025 5,553,063 5,355,584 1,099,999 616,525 1,360,221 348,946 __________ _________ _________ _________ _________ _________ _________ _________

EQUITY

Net assets available for benefits 21,984,098,643 4,715,047,227 1,266,750,029 1,222,242,506 371,573,910 559,575,668 622,950,561 580,568,639 __________ _________ _________ _________ _________ _________ _________ _________

TOTAL LIABILITIES AND EQUITY 22,021,643,667 4,764,531,252 1,272,303,092 1,227,598,090 372,673,909 560,192,193 624,310,782 580,917,585 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________ CAPITAL ACCOUNT'S UNITS

IN ISSUE 1,000,420,009 285,100,043 115,386,468 114,383,106 31,108,611 44,934,734 47,455,690 42,791,144 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________ NET ASSET VALUE PER UNIT 21.975 16.538 10.978 10.686 11.944 12.453 13.127 13.567 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________


STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS - CONSTITUENT FUNDS ( continued)

At 31 March 2019

Notes MG35 MG40 MG45 MGAP MGCA HK$ HK$ HK$ HK$ HK$

ASSETS Investments at fair value through

profit or loss 6 589,169,811 463,580,158 825,414,008 1,346,732,621 4,810,358,856 Amounts receivable on subscription I l(b) 738,567 113,818 541,937 2,159,526 1,239,360 Amounts receivable on sale of investments 11 (b) 258,176 267,317 291,059 3,582,115 4,960,777

TOTAL ASSETS 590,166,554 463,961,293 826,247,004 1,352,474,262 4,816,558,993

LIABILITIES Amounts payable on redemption ll(b) 258,176 267,317 291,059 3,582,11 5 4,960,777 Amounts payable on purchase of

investments ll(b) 738,567 I 13,818 541 ,937 2,159,526 1,239,360

TOTAL LIABILlTIES 996,743 381,135 832,996 5,741,641 6,200,137

EQUITY Net assets av<1ilable for benefits 589,169,811 463,580,158 825,414,008 1,346,732,621 4,810,358,856

TOTAL LIABILITIES AND EQUITY 590,166,554 463,961,293 826,247,004 1,352,474,262 4,816,558,993

CAPITALACCOUNT'S UNITS IN ISSUE 42,857,575 33,663,375 59,597,673 127,004,502 431,034,774

NET ASSET VALUE PER UNIT 13.747 13.771 13.850 10.604 11.160

For and on behalf of Manulife Provident Funds Tmst Company Limited

90

91


STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS - CONSTITUENT FUNDS

At 31 March 2018

Notes MGAG MGCP MGEE MGGR MGHB MGHE MGIB MGIE


ASSETS



Amounts receivable on sale of investments 11(b) 21,438,815 59,431,175 5,926,602 35,803,974 8,313,060 69,304,059 9,417,770 8,608,948 _________ _________ _________ _________ _________ _________ _________ _________

TOTAL ASSETS 20,522,931,453 6,904,643,696 2,200,757,646 14,310,332,282 2,071,325,914 10,242,612,889 3,487,447,747 3,874,440,068 _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ LIABILITIES


Amounts payable on purchase of investments 11(b) 14,055,125 46,469,831 4,326,764 28,738,412 4,999,240 42,674,839 9,357,751 3,345,654 _________ _________ _________ _________ _________ _________ _________ _________

TOTAL LIABILITIES 35,493,940 105,901,006 10,253,366 64,542,386 13,312,300 111,978,898 18,775,521 11,954,602 _________ _________ _________ _________ _________ _________ _________ _________

EQUITY

Net assets available for benefits 20,487,437,513 6,798,742,690 2,190,504,280 14,245,789,896 2,058,013,614 10,130,633,991 3,468,672,226 3,862,485,466 _________ _________ _________ _________ _________ _________ _________ _________

TOTAL LIABILITIES AND EQUITY 20,522,931,453 6,904,643,696 2,200,757,646 14,310,332,282 2,071,325,914 10,242,612,889 3,487,447,747 3,874,440,068 _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ CAPITAL ACCOUNT'S UNITS

IN ISSUE 1,011,035,309 618,684,852 204,254,993 705,672,754 149,570,954 392,466,281 204,631,916 244,174,046 _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ NET ASSET VALUE PER UNIT 20.264 10.989 10.724 20.188 13.759 25.813 16.951 15.819 _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________

92



At 31 March 2018

Notes MGIT MGJE MGNE MGPE MGST MGFG MGFS MGCV


ASSETS



Amounts receivable on sale of investments 11(b) 114,657,800 41,652,954 28,623,679 15,509,945 18,853,151 10,613,839 7,541,199 62,850,217 __________ _________ _________ _________ _________ _________ _________ _________

TOTAL ASSETS 17,177,986,007 1,963,921,108 4,440,661,266 7,814,511,091 12,332,097,293 6,522,265,711 3,932,260,906 27,300,915,182 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________ LIABILITIES


Amounts payable on purchase of investments 11(b) 98,939,131 90,326,638 9,953,485 25,066,419 17,519,100 6,035,728 7,132,246 30,643,651 __________ _________ _________ _________ _________ _________ _________ _________

TOTAL LIABILITIES 213,596,931 131,979,592 38,577,164 40,576,364 36,372,251 16,649,567 14,673,445 93,493,868 __________ _________ _________ _________ _________ _________ _________ _________

EQUITY

Net assets available for benefits 16,964,389,076 1,831,941,516 4,402,084,102 7,773,934,727 12,295,725,042 6,505,616,144 3,917,587,461 27,207,421,314 __________ _________ _________ _________ _________ _________ _________ _________

TOTAL LIABILITIES AND EQUITY 17,177,986,007 1,963,921,108 4,440,661,266 7,814,511,091 12,332,097,293 6,522,265,711 3,932,260,906 27,300,915,182 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________ CAPITAL ACCOUNT'S UNITS

IN ISSUE N/A 137,085,960 269,566,307 296,716,606 800,052,382 223,084,832 179,058,051 983,373,994 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________ NET ASSET VALUE PER UNIT N/A 13.363 16.330 26.200 15.369 29.162 21.879 27.667 __________ _________ _________ _________ _________ _________ _________ _________ __________ _________ _________ _________ _________ _________ _________ _________

93



At 31 March 2018

Notes MGHC MGHS MGPB MGRB MG15 MG20 MG25 MG30


ASSETS

Investments at fair value through profit or loss 6 17,722,641,767 3,954,002,198 1,150,495,676 1,070,450,728 325,793,272 547,647,368 576,465,704 515,349,593

Amounts receivable on subscription 11(b) 9,256,698 33,684,214 3,320,162 20,391,602 573,336 514,688 1,713,524 2,720,938

Amounts receivable on sale of investments 11(b) 39,158,334 31,887,802 3,726,256 8,992,989 1,336,877 533,344 980,702 529,566 _________ _________ ________ _________ _________ _________ _________ _________

TOTAL ASSETS 17,771,056,799 4,019,574,214 1,157,542,094 1,099,835,319 327,703,485 548,695,400 579,159,930 518,600,097 _________ _________ ________ _________ _________ _________ _________ _________ _________ _________ ________ _________ _________ _________ _________ _________ LIABILITIES

Amounts payable on redemption 11(b) 39,158,334 31,887,802 3,726,256 8,992,989 1,336,877 533,344 980,702 529,566

Amounts payable on purchase of investments 11(b) 9,256,698 33,684,214 3,320,162 20,391,602 573,336 514,688 1,713,524 2,720,938 _________ _________ ________ _________ _________ _________ _________ _________

TOTAL LIABILITIES 48,415,032 65,572,016 7,046,418 29,384,591 1,910,213 1,048,032 2,694,226 3,250,504 _________ _________ ________ _________ _________ _________ _________ _________

EQUITY

Net assets available for benefits 17,722,641,767 3,954,002,198 1,150,495,676 1,070,450,728 325,793,272 547,647,368 576,465,704 515,349,593 _________ _________ ________ _________ _________ _________ _________ _________

TOTAL LIABILITIES AND EQUITY 17,771,056,799 4,019,574,214 1,157,542,094 1,099,835,319 327,703,485 548,695,400 579,159,930 518,600,097 _________ _________ ________ _________ _________ _________ _________ _________ _________ _________ ________ _________ _________ _________ _________ _________ CAPITAL ACCOUNT'S UNITS

IN ISSUE 900,740,157 237,278,310 105,941,413 102,116,696 26,296,953 42,564,635 41,935,993 36,202,939 _________ _________ ________ _________ _________ _________ _________ _________ _________ _________ ________ _________ _________ _________ _________ _________ NET ASSET VALUE PER UNIT 19.676 16.664 10.860 10.483 12.389 12.866 13.746 14.235 _________ _________ ________ _________ _________ _________ _________ _________ _________ _________ ________ _________ _________ _________ _________ _________

94



At 31 March 2018

Notes MG35 MG40 MG45 MGAP MGCA

HK$ HK$ HK$ HK$ HK$

ASSETS

Investments at fair value through profit or loss 6 533,908,614 416,007,260 748,624,271 673,866,385 2,280,552,863

Amounts receivable on subscription 11(b) 606,401 981,612 812,205 14,269,044 1,341,882

Amounts receivable on sale of investments 11(b) 1,109,030 779,654 999,730 1,444,363 10,500,827 _________ _________ ________ _________ _________

TOTAL ASSETS 535,624,045 417,768,526 750,436,206 689,579,792 2,292,395,572 _________ _________ ________ _________ _________ _________ _________ ________ _________ _________ LIABILITIES

Amounts payable on redemption 11(b) 1,109,030 779,654 999,730 1,444,363 10,500,827

Amounts payable on purchase of investments 11(b) 606,401 981,612 812,205 14,269,044 1,341,882 _________ _________ ________ _________ _________

TOTAL LIABILITIES 1,715,431 1,761,266 1,811,935 15,713,407 11,842,709 _________ _________ ________ _________ _________

EQUITY

Net assets available for benefits 533,908,614 416,007,260 748,624,271 673,866,385 2,280,552,863 _________ _________ ________ _________ _________

TOTAL LIABILITIES AND EQUITY 535,624,045 417,768,526 750,436,206 689,579,792 2,292,395,572 _________ _________ ________ _________ _________ _________ _________ ________ _________ _________ CAPITAL ACCOUNT'S UNITS

IN ISSUE 37,009,052 28,779,286 51,586,038 65,275,113 208,966,605 _________ _________ ________ _________ _________ _________ _________ ________ _________ _________ NET ASSET VALUE PER UNIT 14.426 14.455 14.512 10.323 10.913 _________ _________ ________ _________ _________ _________ _________ ________ _________ _________

95


STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - CONSTITUENT FUNDS




BALANCE BROUGHT FORWARD 20,487,437,513 6,798,742,690 2,190,504,280 14,245,789,896 2,058,013,614 10,130,633,991 3,468,672,226 3,862,485,466 _____________ ____________ ____________ _____________ ____________ _____________ ____________ ____________

Proceeds on issue 6,565,096,077 10,089,388,529 770,963,644 5,877,456,624 1,134,204,743 9,534,131,047 1,641,922,189 1,573,370,028

Payments on redemption ( 2,528,183,827) ( 6,520,476,665) ( 795,753,984) ( 2,212,063,524) ( 757,889,011) ( 7,301,287,914) ( 976,341,150) ( 687,541,131) _____________ _____________ ____________ _____________ ____________ _____________ ____________ ____________

4,036,912,250 3,568,911,864 ( 24,790,340) 3,665,393,100 376,315,732 2,232,843,133 665,581,039 885,828,897 _____________ _____________ ____________ _____________ ____________ _____________ ____________ ____________

Total comprehensive income for the year ( 1,182,448,691) 108,381,617 ( 19,814,609) ( 734,503,824) 110,836,507 ( 769,353,019) ( 59,828,331) ( 101,327,102) _____________ _____________ ____________ _____________ ____________ _____________ ____________ ____________ BALANCE CARRIED FORWARD 23,341,901,072 10,476,036,171 2,145,899,331 17,176,679,172 2,545,165,853 11,594,124,105 4,074,424,934 4,646,987,261 _____________ _____________ ____________ _____________ ____________ _____________ ____________ ____________ _____________ _____________ ____________ _____________ ____________ _____________ ____________ ____________

UNITS OUTSTANDING AT BEGINNING OF YEAR 1,011,035,309 618,684,852 204,254,993 705,672,754 149,570,954 392,466,281 204,631,916 244,174,046

Units issued 335,859,198 913,466,819 73,539,626 303,299,276 82,358,826 406,150,942 99,793,207 100,182,678

Units redeemed ( 131,928,581) ( 590,238,612) ( 76,113,792) ( 115,804,023) ( 55,093,967) ( 311,632,803) ( 59,299,941) ( 44,930,573) _____________ _____________ ____________ _____________ ____________ _____________ ____________ ____________

UNITS OUTSTANDING AT END OF YEAR 1,214,965,926 941,913,059 201,680,827 893,168,007 176,835,813 486,984,420 245,125,182 299,426,151 _____________ _____________ ____________ _____________ ____________ _____________ ____________ ____________ _____________ _____________ ____________ _____________ ____________ _____________ ____________ ____________

96


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




BALANCE BROUGHT FORWARD 16,964,389,076 1,831,941,516 4,402,084,102 7,773,934,727 12,295,725,042 6,505,616,144 3,917,587,461 27,207,421,314 _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

Proceeds on issue 15,047,655,746 7,784,663,098 3,457,980,546 4,579,376,428 3,025,477,448 2,220,750,369 3,174,300,262 6,766,213,860

Payments on redemption (10,585,920,662) (7,711,057,992) (2,560,737,527) (3,230,325,484) ( 2,212,701,759) ( 970,405,686) ( 717,060,676) (6,309,278,044) _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

4,461,735,084 73,605,106 897,243,019 1,349,050,944 812,775,689 1,250,344,683 2,457,239,586 456,935,816 _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

Total comprehensive income for the year 94,650,621 ( 135,435,524) 2,700,118 ( 512,656,190) 14,865,741 ( 172,621,751) ( 38,026,759) (1,232,586,625) _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

BALANCE CARRIED FORWARD 21,520,774,781 1,770,111,098 5,302,027,239 8,610,329,481 13,123,366,472 7,583,339,076 6,336,800,288 26,431,770,505 _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

UNITS OUTSTANDING AT BEGINNING OF YEAR N/A 137,085,960 269,566,307 296,716,606 800,052,382 223,084,832 179,058,051 983,373,994

Units issued N/A 615,000,678 210,585,538 186,879,287 202,148,754 78,351,326 148,808,497 263,613,287

Units redeemed N/A ( 606,969,919) ( 158,640,439) ( 133,082,847) ( 147,728,905) ( 34,738,997) ( 34,000,470) ( 247,327,532) _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

UNITS OUTSTANDING AT END OF YEAR N/A 145,116,719 321,511,406 350,513,046 854,472,231 266,697,161 293,866,078 999,659,749 _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

97






BALANCE BROUGHT FORWARD 17,722,641,767 3,954,002,198 1,150,495,676 1,070,450,728 325,793,272 547,647,368 576,465,704 515,349,593 _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

Proceeds on issue 6,641,720,880 4,874,928,002 492,372,865 823,348,791 137,014,824 138,229,774 165,184,320 168,287,202

Payments on redemption ( 4,537,126,270) (4,119,510,027) ( 390,529,913) ( 693,350,817) ( 79,692,860) (108,613,943) ( 91,815,769) ( 78,320,001) _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

2,104,594,610 755,417,975 101,842,952 129,997,974 57,321,964 29,615,831 73,368,551 89,967,201 _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

Total comprehensive income

for the year 2,156,862,266 5,627,054 14,411,401 21,793,804 ( 11,541,326) ( 17,687,531) ( 26,883,694) ( 24,748,155) _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

BALANCE CARRIED FORWARD 21,984,098,643 4,715,047,227 1,266,750,029 1,222,242,506 371,573,910 559,575,668 622,950,561 580,568,639 _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________ _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

UNITS OUTSTANDING AT BEGINNING OF YEAR 900,740,157 237,278,310 105,941,413 102,116,696 26,296,953 42,564,635 41,935,993 36,202,939

Units issued 319,539,869 307,474,917 46,270,846 79,485,472 11,545,011 11,121,611 12,487,190 12,377,668

Units redeemed ( 219,860,017) ( 259,653,184) ( 36,825,791) ( 67,219,062) ( 6,733,353) ( 8,751,512) ( 6,967,493) ( 5,789,463) _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

UNITS OUTSTANDING AT END OF YEAR 1,000,420,009 285,100,043 115,386,468 114,383,106 31,108,611 44,934,734 47,455,690 42,791,144 _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________ _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

98





HK$ HK$ HK$ HK$ HK$

BALANCE BROUGHT FORWARD 533,908,614 416,007,260 748,624,271 673,866,385 2,280,552,863 ____________ ____________ ___________ ____________ ____________

Proceeds on issue 164,238,965 138,043,971 257,477,140 956,445,867 3,215,895,267

Payments on redemption ( 82,950,125) ( 70,477,201) (145,065,906) ( 320,540,663) ( 778,898,278) ____________ ____________ ___________ ____________ ____________

81,288,840 67,566,770 112,411,234 635,905,204 2,436,996,989 ____________ ____________ ___________ ____________ ____________


for the year ( 26,027,643) ( 19,993,872) ( 35,621,497) 36,961,032 92,809,004 ____________ ____________ ___________ ____________ ____________

BALANCE CARRIED FORWARD 589,169,811 463,580,158 825,414,008 1,346,732,621 4,810,358,856 ____________ ____________ ___________ ____________ ____________ ____________ ____________ ___________ ____________ ____________

UNITS OUTSTANDING AT BEGINNING OF YEAR 37,009,052 28,779,286 51,586,038 65,275,113 208,966,605

Units issued 11,908,035 10,033,341 18,538,484 92,863,365 293,744,138

Units redeemed ( 6,059,512) ( 5,149,252) ( 10,526,849) ( 31,133,976) ( 71,675,969) ____________ ____________ ___________ ____________ ____________

UNITS OUTSTANDING AT END OF YEAR 42,857,575 33,663,375 59,597,673 127,004,502 431,034,774 ____________ ____________ ___________ ____________ ____________ ____________ ____________ ___________ ____________ ____________

99


STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - CONSTITUENT FUNDS




BALANCE BROUGHT FORWARD 17,605,371,430 4,797,879,971 1,812,701,185 12,072,952,870 1,637,118,079 7,070,574,012 2,815,309,993 3,086,652,307 _____________ ____________ ____________ _____________ ____________ _____________ ____________ ____________


Payments on redemption (2,885,058,144) (4,834,761,253) (1,835,127,407) ( 1,907,533,793) ( 732,356,240) ( 6,785,547,444) ( 954,519,429) ( 705,981,501) _____________ ____________ ____________ _____________ ____________ _____________ ____________ ____________

( 452,352,811) 1,987,819,042 249,354,812 214,808,482 414,564,035 719,363,221 530,830,883 311,270,095 _____________ ____________ ____________ _____________ ____________ _____________ ____________ ____________

Total comprehensive income for the year 3,334,418,894 13,043,677 128,448,283 1,958,028,544 6,331,500 2,340,696,758 122,531,350 464,563,064 _____________ ____________ ____________ _____________ ____________ _____________ ____________ ____________ BALANCE CARRIED FORWARD 20,487,437,513 6,798,742,690 2,190,504,280 14,245,789,896 2,058,013,614 10,130,633,991 3,468,672,226 3,862,485,466 _____________ ____________ ____________ _____________ ____________ _____________ ____________ ____________ _____________ ____________ ____________ _____________ ____________ _____________ ____________ ____________

UNITS OUTSTANDING AT BEGINNING OF YEAR 1,033,098,925 437,624,177 180,598,977 693,962,370 119,691,142 363,136,232 172,999,438 223,067,270

Units issued 126,564,451 621,474,588 192,822,083 109,832,905 82,694,042 308,214,198 88,596,598 67,317,207

Units redeemed ( 148,628,067) ( 440,413,913) ( 169,166,067) ( 98,122,521) ( 52,814,230) ( 278,884,149) ( 56,964,120) ( 46,210,431) _____________ ____________ ____________ _____________ ____________ _____________ ____________ ____________

UNITS OUTSTANDING AT END OF YEAR 1,011,035,309 618,684,852 204,254,993 705,672,754 149,570,954 392,466,281 204,631,916 244,174,046 _____________ ____________ ____________ _____________ ____________ _____________ ____________ ____________ _____________ ____________ ____________ _____________ ____________ _____________ ____________ ____________

100






BALANCE BROUGHT FORWARD 13,358,384,190 1,422,884,315 3,440,606,268 5,720,971,176 10,119,136,246 5,117,595,684 2,949,401,899 21,725,478,808 _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________


Payments on redemption (10,916,299,661) (7,568,668,742) (2,043,398,020) (2,722,193,726) ( 2,194,685,558) (1,157,662,729) ( 610,825,674)( 7,955,077,521) _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

3,573,972,200 150,350,367 574,952,934 728,161,860 1,470,179,156 420,411,316 576,853,018 ( 372,809,399) _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

Total comprehensive income for the year 32,032,686 258,706,834 386,524,900 1,324,801,691 706,409,640 967,609,144 391,332,544 5,854,751,905 _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

BALANCE CARRIED FORWARD 16,964,389,076 1,831,941,516 4,402,084,102 7,773,934,727 12,295,725,042 6,505,616,144 3,917,587,461 27,207,421,314 _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

UNITS OUTSTANDING AT BEGINNING OF YEAR N/A 123,847,307 232,795,992 266,084,010 703,609,082 207,473,575 151,691,612 996,025,559

Units issued N/A 600,353,026 163,112,109 139,718,334 240,714,801 56,689,155 56,046,940 290,519,040

Units redeemed N/A ( 587,114,373) ( 126,341,794) ( 109,085,738) ( 144,271,501) ( 41,077,898) ( 28,680,501) ( 303,170,605) _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

UNITS OUTSTANDING AT END OF YEAR N/A 137,085,960 269,566,307 296,716,606 800,052,382 223,084,832 179,058,051 983,373,994 _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________

101






BALANCE BROUGHT FORWARD 16,362,512,276 2,568,277,798 824,794,508 529,551,814 204,148,373 370,917,493 383,287,235 329,268,598 _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

Proceeds on issue 6,099,209,442 4,468,340,518 769,670,638 1,407,024,756 182,268,582 230,219,759 222,521,406 204,941,131

Payments on redemption (5,513,785,763) (3,851,362,639) (470,549,680) ( 923,018,369) ( 89,764,739) (107,725,944) ( 98,308,115) ( 85,355,249) _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

585,423,679 616,977,879 299,120,958 484,006,387 92,503,843 122,493,815 124,213,291 119,585,882 _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________


for the year 774,705,812 768,746,521 26,580,210 56,892,527 29,141,056 54,236,060 68,965,178 66,495,113 _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

BALANCE CARRIED FORWARD 17,722,641,767 3,954,002,198 1,150,495,676 1,070,450,728 325,793,272 547,647,368 576,465,704 515,349,593 _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________ _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

UNITS OUTSTANDING AT BEGINNING OF YEAR 870,341,814 195,820,538 78,284,832 54,772,670 18,624,459 32,666,457 32,359,628 27,305,501

Units issued 305,162,401 285,367,603 71,117,331 138,927,456 15,218,213 18,510,169 16,970,843 15,127,820

Units redeemed ( 274,764,058) ( 243,909,831) ( 43,460,750) ( 91,583,430) ( 7,545,719) ( 8,611,991) ( 7,394,478) ( 6,230,382) _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

UNITS OUTSTANDING AT END OF YEAR 900,740,157 237,278,310 105,941,413 102,116,696 26,296,953 42,564,635 41,935,993 36,202,939 _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________ _____________ ____________ ___________ ____________ ___________ ____________ ____________ ___________

102





HK$ HK$ HK$ HK$ HK$

BALANCE BROUGHT FORWARD 345,649,652 273,136,172 498,824,942 - - ____________ ____________ ___________ ___________ ____________

Proceeds on issue 192,373,004 150,627,737 301,699,285 867,882,595 2,780,172,630

Payments on redemption ( 76,456,691) ( 65,478,955) (156,234,310) (202,165,190) ( 587,018,283) ____________ ____________ ___________ ___________ ____________

115,916,313 85,148,782 145,464,975 665,717,405 2,193,154,347 ____________ ____________ ___________ ___________ ____________


for the year 72,342,649 57,722,306 104,334,354 8,148,980 87,398,516 ____________ ____________ ___________ ___________ ____________

BALANCE CARRIED FORWARD 533,908,614 416,007,260 748,624,271 673,866,385 2,280,552,863 ____________ ____________ ___________ ___________ ____________ ____________ ____________ ___________ ___________ ____________

UNITS OUTSTANDING AT BEGINNING OF YEAR 28,416,877 22,459,149 40,866,706 - -

Units issued 14,104,836 11,009,139 21,982,750 85,013,605 263,675,430

Units redeemed ( 5,512,661) ( 4,689,002) ( 11,263,418) ( 19,738,492) ( 54,708,825) ____________ ____________ ___________ ___________ ____________

UNITS OUTSTANDING AT END OF YEAR 37,009,052 28,779,286 51,586,038 65,275,113 208,966,605 ____________ ____________ ___________ ___________ ____________ ____________ ____________ ___________ ___________ ____________

103


STATEMENT OF CASH FLOWS - CONSTITUENT FUNDS





(Loss)/profit for the year (1,182,448,691) 108,381,617 ( 19,814,609) ( 734,503,824) 110,836,507 ( 769,353,019) ( 59,828,331) ( 101,327,102) Adjustments for:


at fair value through profit or loss 1,582,617,622 ( 78,614,046) 22,961,512 980,638,384 ( 106,357,345) 1,010,116,755 56,045,417 219,560,205 Net realised (gains)/losses on disposal of

investments at fair value through profit or loss ( 400,168,931) ( 29,767,571) ( 3,146,903) ( 246,134,560) ( 4,479,162) ( 240,763,736) 3,782,914 ( 118,233,103) ____________ _____________ ____________ ____________ ____________ ____________ ____________ ____________

Net cash flows from operating activities - - - - - - - - ____________ _____________ ____________ ____________ ____________ ____________ ____________ ____________

CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments at fair value

through profit or loss – in cash (3,148,758,344) (8,339,471,466) (772,331,428) (4,197,586,255) (1,125,312,343) (9,486,281,516) (1,646,703,770) (1,574,022,429)


through profit or loss – in specie * (3,408,518,793) (1,768,826,929) - (1,698,056,774) - - - -

Sales of investments at fair value through profit or loss 2,536,713,037 6,535,040,562 799,012,312 2,183,709,693 762,097,757 7,257,871,646 982,381,049 693,999,471 ____________ _____________ ____________ ____________ ____________ ____________ ____________ ____________

Net cash flows (used in)/from investing activities (4,020,564,100) (3,573,257,833) 26,680,884 (3,711,933,336) ( 363,214,586) (2,228,409,870) ( 664,322,721) ( 880,022,958) ____________ _____________ ____________ ____________ ____________ ____________ ____________ ____________


Subscriptions received – in cash 3,148,758,344 8,339,471,466 772,331,428 4,197,586,255 1,125,312,343 9,486,281,516 1,646,703,770 1,574,022,429 Subscriptions received – in specie * 3,408,518,793 1,768,826,929 - 1,698,056,774 - - - -

Redemption paid (2,536,713,037) (6,535,040,562) (799,012,312) (2,183,709,693) ( 762,097,757) (7,257,871,646) ( 982,381,049) ( 693,999,471) ____________ _____________ ____________ ____________ ____________ ____________ ____________ ____________

Net cash flows from/(used in) financing activities 4,020,564,100 3,573,257,833 ( 26,680,884) 3,711,933,336 363,214,586 2,228,409,870 664,322,721 880,022,958 ____________ _____________ ____________ ____________ ____________ ____________ ____________ ____________

NET CHANGE IN CASH AND CASH EQUIVALENTS - - - - - - - -

Cash and cash equivalents at beginning of year - - - - - - - - ____________ _____________ ____________ ____________ ____________ ____________ ____________ ____________

CASH AND CASH EQUIVALENTS AT END OF YEAR - - - - - - - - ____________ _____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ _____________ ____________ ____________ ____________ ____________ ____________ ____________

* The purchase and subscription were done in specie arising from the scheme merger arrangement. Please refer to note 1 to the financial statements for details.

104


STATEMENT OF CASH FLOWS - CONSTITUENT FUNDS (continued)





Profit/(loss) for the year 94,650,621 ( 135,435,524) 2,700,118 ( 512,656,190) 14,865,741 ( 172,621,751) ( 38,026,759) (1,232,586,625) Adjustments for:


at fair value through profit or loss - ( 7,955,185) 177,333,370 760,187,204 111,031,898 312,760,863 85,931,013 2,033,951,657 Net realised losses/(gains) on disposal of

investments at fair value through profit or loss - 143,390,709 ( 180,033,488) ( 247,531,014) ( 125,897,639) ( 140,139,112) ( 47,904,254) (801,365,032)

Interest income ( 94,650,621) - - - - - - - _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________

Net cash flows from operating activities - - - - - - - - _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________



through profit or loss – in cash (14,269,954,422) (7,704,793,620) (3,459,662,949) (4,591,197,221) (3,035,958,860) (1,449,249,241) (3,177,471,686) (6,781,815,165)


through profit or loss – in specie * ( 819,667,122) - - - - ( 771,680,917) - -

Sales of investments at fair value through profit or loss 10,641,717,688 7,733,948,189 2,580,360,307 3,167,000,225 2,213,889,705 975,308,172 720,233,464 6,344,186,472 Interest received 94,650,621 - - - - - - - _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________

Net cash flows (used in)/from investing activities ( 4,353,253,235) 29,154,569 ( 879,302,642) (1,424,196,996) ( 822,069,155) (1,245,621,986) (2,457,238,222) ( 437,628,693) _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________


Subscriptions received – in cash 14,175,303,801 7,704,793,620 3,459,662,949 4,591,197,221 3,035,958,860 1,449,249,241 3,177,471,686 6,781,815,165

Subscriptions received – in specie * 819,667,122 - - - - 771,680,917 - - Redemption paid (10,641,717,688) (7,733,948,189) (2,580,360,307) (3,167,000,225) (2,213,889,705) ( 975,308,172) ( 720,233,464) (6,344,186,472) _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________

Net cash flows from/(used in) financing activities 4,353,253,235 ( 29,154,569) 879,302,642 1,424,196,996 822,069,155 1,245,621,986 2,457,238,222 437,628,693 _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________


Cash and cash equivalents at beginning of year - - - - - - - - _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________

CASH AND CASH EQUIVALENTS

AT END OF YEAR - - - - - - - - _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________ _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________


105




MGHC MGHS MGPB MGRB MG15 MG20 MG25 MG30 HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$


Profit/(loss) for the year 2,156,862,266 5,627,054 14,411,401 21,793,804 ( 11,541,326) ( 17,687,531) ( 26,883,694) ( 24,748,155)

Adjustments for:

Net change in unrealised gains/losses on investments at fair value through profit or loss (1,748,956,774) 110,613,766 ( 15,842,935) ( 15,581,148) 14,323,486 25,100,991 35,035,260 32,007,831

Net realised (gains)/losses on disposal of

investments at fair value through profit or loss ( 407,905,492) ( 116,240,820) 1,431,534 ( 6,212,656) ( 2,782,160) ( 7,413,460) ( 8,151,566) ( 7,259,676) ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

Net cash flows from operating activities - - - - - - - - ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________


Purchases of investments at fair value through profit or loss (6,631,095,875) (4,889,752,375) (493,998,816) (841,058,473) (137,473,927) (138,695,523) (166,017,405) (170,994,556)

Sales of investments at fair value through profit or loss 4,558,621,283 4,120,773,645 390,397,317 699,670,142 80,043,971 108,579,701 92,316,689 78,514,205 ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

Net cash flows used in investing activities (2,072,474,592) ( 768,978,730) (103,601,499) (141,388,331) ( 57,429,956) ( 30,115,822) ( 73,700,716) ( 92,480,351) ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

CASH FLOWS FROM FINANCING ACTIVITIES Subscriptions received 6,631,095,875 4,889,752,375 493,998,816 841,058,473 137,473,927 138,695,523 166,017,405 170,994,556

Redemption paid (4,558,621,283) (4,120,773,645) (390,397,317) (699,670,142) ( 80,043,971) (108,579,701) ( 92,316,689) ( 78,514,205) ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

Net cash flows from financing activities 2,072,474,592 768,978,730 103,601,499 141,388,331 57,429,956 30,115,822 73,700,716 92,480,351 ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________


Cash and cash equivalents at beginning of year - - - - - - - - ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

CASH AND CASH EQUIVALENTS AT END OF YEAR - - - - - - - - ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________ ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

106




MG35 MG40 MG45 MGAP MGCA HK$ HK$ HK$ HK$ HK$


(Loss)/profit for the year ( 26,027,643) ( 19,993,872) ( 35,621,497) 36,961,032 92,809,004

Adjustments for:

Net change in unrealised gains/losses on investments at fair value through profit or loss 34,416,507 27,121,747 49,441,049 ( 35,484,783) ( 84,204,039)

Net realised gains on disposal of

investments at fair value through profit or loss ( 8,388,864) ( 7,127,875) ( 13,819,552) ( 1,476,249) ( 8,604,965) ____________ ____________ ___________ ___________ _____________

Net cash flows from operating activities - - - - - ____________ ____________ ___________ ___________ _____________



through profit or loss – in cash (164,106,799) (138,911,765) (257,747,408) (794,529,340) (2,417,503,165) Purchases of investments at fair value

through profit or loss – in specie * - - - (174,026,045) ( 798,494,624)

Sales of investments at fair value through profit or loss 83,800,979 70,989,538 145,774,577 318,402,911 784,438,328 ____________ ____________ ___________ ___________ _____________

Net cash flows used in investing activities ( 80,305,820) ( 67,922,227) (111,972,831) (650,152,474) (2,431,559,461) ____________ ____________ ___________ ___________ _____________

CASH FLOWS FROM FINANCING ACTIVITIES Subscriptions received – in cash 164,106,799 138,911,765 257,747,408 794,529,340 2,417,503,165

Subscriptions received – in specie * - - - 174,026,045 798,494,624

Redemption paid ( 83,800,979) ( 70,989,538) (145,774,577) (318,402,911) ( 784,438,328) ____________ ____________ ___________ ___________ _____________

Net cash flows from financing activities 80,305,820 67,922,227 111,972,831 650,152,474 2,431,559,461 ____________ ____________ ___________ ___________ _____________

NET CHANGE IN CASH AND CASH EQUIVALENTS - - - - -

Cash and cash equivalents at beginning of year - - - - - ____________ ____________ ___________ ___________ _____________


AT END OF YEAR - - - - - ____________ ____________ ___________ ___________ _____________ ____________ ____________ ___________ ___________ _____________


107


STATEMENT OF CASH FLOWS - CONSTITUENT FUNDS





Profit for the year 3,334,418,894 13,043,677 128,448,283 1,958,028,544 6,331,500 2,340,696,758 122,531,350 464,563,064 Adjustments for:


at fair value through profit or loss (2,719,661,571) ( 5,979,758) 19,883,353 (1,632,333,282) 7,063,418 (1,095,066,567) ( 105,224,943) ( 288,642,646) Net realised gains on disposal of

investments at fair value through profit or loss ( 614,757,323) ( 7,063,919) ( 148,331,636) ( 325,695,262) ( 13,394,918) (1,245,630,191) ( 17,306,407) ( 175,920,418) ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________

Net cash flows from operating activities - - - - - - - - ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________

CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments at fair value through profit or loss (2,428,182,998) (6,792,746,816) (2,082,368,370) (2,100,301,845) (1,144,360,826) (7,532,271,482) (1,480,120,510) (1,018,592,638)

Sales of investments at fair value through profit or loss 2,882,290,311 4,797,156,960 1,832,710,818 1,881,448,857 727,791,165 6,777,963,952 950,268,021 701,243,943 ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________

Net cash flows from/(used in) investing activities 454,107,313 (1,995,589,856) ( 249,657,552) ( 218,852,988) ( 416,569,661) ( 754,307,530) ( 529,852,489) ( 317,348,695) ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________


Subscriptions received 2,428,182,998 6,792,746,816 2,082,368,370 2,100,301,845 1,144,360,826 7,532,271,482 1,480,120,510 1,018,592,638 Redemption paid (2,882,290,311) (4,797,156,960) (1,832,710,818) (1,881,448,857) ( 727,791,165) (6,777,963,952) ( 950,268,021) ( 701,243,943) ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________

Net cash flows (used in)/from financing activities ( 454,107,313) 1,995,589,856 249,657,552 218,852,988 416,569,661 754,307,530 529,852,489 317,348,695 ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________


Cash and cash equivalents at beginning of year - - - - - - - - ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________

CASH AND CASH EQUIVALENTS AT END OF YEAR - - - - - - - - ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________

108







Profit for the year 32,032,686 258,706,834 386,524,900 1,324,801,691 706,409,640 967,609,144 391,332,544 5,854,751,905 Adjustments for:


at fair value through profit or loss - 52,665,682 ( 53,121,666) ( 838,618,774) ( 495,704,282) ( 728,237,279) ( 312,007,772) (4,226,406,982) Net realised gains on disposal of

investments at fair value through profit or loss - ( 311,372,516) ( 333,403,234) ( 486,182,917) ( 210,705,358) ( 239,371,865) ( 79,324,772) (1,628,344,923)

Interest income ( 32,032,686) - - - - - - - _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________

Net cash flows from operating activities - - - - - - - - _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________


Purchases of investments at fair value through profit or loss (14,430,787,832) (7,719,078,710) (2,620,777,511) (3,441,212,219) (3,655,674,900) (1,577,074,910) (1,184,380,574) (7,569,155,608)

Sales of investments at fair value through profit or loss 10,887,658,110 7,540,418,265 2,022,282,385 2,713,863,849 2,186,401,403 1,152,487,279 607,958,628 7,976,136,556

Interest received 32,032,686 - - - - - - - _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________

Net cash flows (used in)/from investing activities ( 3,511,097,036) ( 178,660,445) ( 598,495,126) ( 727,348,370) (1,469,273,497) ( 424,587,631) ( 576,421,946) 406,980,948 _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________


Subscriptions received 14,398,755,146 7,719,078,710 2,620,777,511 3,441,212,219 3,655,674,900 1,577,074,910 1,184,380,574 7,569,155,608

Redemption paid (10,887,658,110) (7,540,418,265) (2,022,282,385) (2,713,863,849) (2,186,401,403) (1,152,487,279) ( 607,958,628) (7,976,136,556) _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________

Net cash flows from/(used in) financing activities 3,511,097,036 178,660,445 598,495,126 727,348,370 1,469,273,497 424,587,631 576,421,946 ( 406,980,948) _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________


Cash and cash equivalents at beginning of year - - - - - - - - _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________


AT END OF YEAR - - - - - - - - _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________ _____________ ____________ ____________ _____________ ____________ _____________ _____________ _____________

109




MGHC MGHS MGPB MGRB MG15 MG20 MG25 MG30 HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$


Profit for the year 774,705,812 768,746,521 26,580,210 56,892,527 29,141,056 54,236,060 68,965,178 66,495,113

Adjustments for:

Net change in unrealised gains/losses on investments at fair value through profit or loss ( 260,851,058) ( 216,626,949) ( 14,357,993) ( 44,846,331) ( 21,397,035) ( 41,858,118) ( 54,825,706) ( 52,772,757)


investments at fair value through profit or loss ( 513,854,754) ( 552,119,572) ( 12,222,217) ( 12,046,196) ( 7,744,021) ( 12,377,942) ( 14,139,472) ( 13,722,356) ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

Net cash flows from operating activities - - - - - - - - ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________


Purchases of investments at fair value through profit or loss (6,101,910,471) (4,449,232,720) (767,964,694) (1,387,459,282) (191,080,484) (230,121,379) (221,556,781) (203,094,197)

Sales of investments at fair value through profit or loss 5,494,939,667 3,839,867,813 468,882,041 915,550,854 88,776,630 107,865,956 97,768,028 85,019,813 ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

Net cash flows used in investing activities ( 606,970,804) ( 609,364,907) (299,082,653) ( 471,908,428) (102,303,854) (122,255,423) (123,788,753) (118,074,384) ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

CASH FLOWS FROM FINANCING ACTIVITIES Subscriptions received 6,101,910,471 4,449,232,720 767,964,694 1,387,459,282 191,080,484 230,121,379 221,556,781 203,094,197

Redemption paid (5,494,939,667) (3,839,867,813) (468,882,041) ( 915,550,854) ( 88,776,630) (107,865,956) ( 97,768,028) ( 85,019,813) ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

Net cash flows from financing activities 606,970,804 609,364,907 299,082,653 471,908,428 102,303,854 122,255,423 123,788,753 118,074,384 ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________


Cash and cash equivalents at beginning of year - - - - - - - - ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

CASH AND CASH EQUIVALENTS AT END OF YEAR - - - - - - - - ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________ ____________ ____________ ___________ ____________ ___________ ___________ ____________ ____________

110




MG35 MG40 MG45 MGAP MGCA HK$ HK$ HK$ HK$ HK$


Profit for the year 72,342,649 57,722,306 104,334,354 8,148,980 87,398,516

Adjustments for:

Net change in unrealised gains/losses on investments at fair value through profit or loss ( 59,662,443) ( 46,434,487) ( 79,253,513) ( 6,555,710) ( 68,467,857)


investments at fair value through profit or loss ( 12,680,206) ( 11,287,819) ( 25,080,841) ( 1,593,270) ( 18,930,659) ____________ ____________ ___________ ___________ _____________

Net cash flows from operating activities - - - - - ____________ ____________ ___________ ___________ _____________


Purchases of investments at fair value through profit or loss (192,894,516) (149,887,832) (301,397,391) (853,613,551) (2,778,830,748)

Sales of investments at fair value through profit or loss 75,587,508 65,152,423 155,840,620 200,720,827 576,517,456 ____________ ____________ ___________ ___________ _____________

Net cash flows used in investing activities (117,307,008) ( 84,735,409) (145,556,771) (652,892,724) (2,202,313,292) ____________ ____________ ___________ ___________ _____________

CASH FLOWS FROM FINANCING ACTIVITIES Subscriptions received 192,894,516 149,887,832 301,397,391 853,613,551 2,778,830,748

Redemption paid ( 75,587,508) ( 65,152,423) (155,840,620) (200,720,827) ( 576,517,456) ____________ ____________ ___________ ___________ _____________

Net cash flows from financing activities 117,307,008 84,735,409 145,556,771 652,892,724 2,202,313,292 ____________ ____________ ___________ ___________ _____________

NET CHANGE IN CASH AND CASH EQUIVALENTS - - - - -

Cash and cash equivalents at beginning of year - - - - - ____________ ____________ ___________ ___________ _____________

CASH AND CASH EQUIVALENTS AT END OF YEAR - - - - - ____________ ____________ ___________ ___________ _____________ ____________ ____________ ___________ ___________ _____________


NOTES TO FINANCIAL STATEMENTS

31 March 2019

111

1. THE SCHEME

The Manulife Global Select (MPF) Scheme (the "Scheme") is established and governed by its trust

deed dated 29 April 2000 (the "Trust Deed"), as amended. The Scheme is approved by the

Mandatory Provident Fund Schemes Authority (the "MPFA") as a master trust scheme under the

requirements of the Mandatory Provident Fund Schemes Ordinance (the "MPFSO") and Mandatory

Provident Fund Schemes (General) Regulation (the "General Regulation").

At 31 March 2019, the Scheme offers twenty-nine constituent funds. Each constituent fund has

been structured as a feeder fund, the assets of which are invested directly in a corresponding

approved pooled investment fund ("APIF").

Under a scheme merger arrangement (the "Scheme Merger"), there were subscriptions and

corresponding purchases in cash and in specie made in the Scheme after the Manulife MPF Plan -

Advanced and the Manulife MPF Plan – Basic transferred their participating employers and

members to the Scheme. Details of the subscription and purchase transactions arising from the

Scheme Merger are set out in the Statement of Cash Flows and note 11(a) to the financial

statements.

2.1 BASIS OF PREPARATION

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

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

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

Certified Public Accountants (the "HKICPA"), accounting principles generally accepted in Hong

Kong and the General Regulation. They have been prepared under the historical cost convention,

except for the remeasurement of investments at fair value through profit or loss as further explained

below. These financial statements are presented in Hong Kong Dollar.

2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The Scheme has adopted the following revised standards for the first time for the current year's

financial statements, which is applicable to the Scheme.

HKFRS 9 Financial Instruments

HKFRS 15 Revenue from Contracts with Customers

Amendments to HKFRS 15 Clarifications to HKFRS 15 Revenue from Contracts with

Customers

The nature and the impact of the amendments are described below:

HKFRS 9 Financial Instruments

HKFRS 9 Financial Instruments replaces HKAS 39 Financial Instruments: Recognition and

Measurement and introduces new requirements for the classification and measurement of financial

assets and financial liabilities; impairment for financial assets; and general hedge accounting.



31 March 2019

112

2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (continued)

HKFRS 9 Financial Instruments (continued)

(i) Classification and measurement

The following information sets out the impacts of adopting HKFRS 9 on the statement of

financial position, including the effect of replacing HKAS 39's incurred credit loss calculations

with HKFRS 9's expected credit losses ("ECLs"):

A reconciliation between the carrying amounts under HKAS 39 and the balances reported under

HKFRS 9 as at 1 April 2018 is as follows: HKAS 39 HKFRS 9

measurement measurement

Category Amount Reclassification Amount Category

HK$ HK$ HK$

Financial assets

Investments at fair value through profit or loss FVTPL3 174,656,784,757 - 174,656,784,757 FVTPL3

Contribution receivables from employers L&R1 455,651,362 - 455,651,362 AC2

Contribution receivables from employees L&R1 308,937,723 - 308,937,723 AC2

Amounts receivable on sale of investments L&R1 620,526,661 - 620,526,661 AC2

Other receivables L&R1 41,982,049 - 41,982,049 AC2

Cash and cash equivalents L&R1 441,726,902 - 441,726,902 AC2 ____________ ___________ ____________

176,525,609,454 - 176,525,609,454 ____________ ___________ ____________ ____________ ___________ ____________

Financial liabilities

Benefits payable AC2 110,610,810 - 110,610,810 AC2

Amounts payable on purchase of investments AC2 529,770,320 - 529,770,320 AC2

Other payables AC2 212,294,911 - 212,294,911 AC2 ____________ ___________ ____________

852,676,041 - 852,676,041 ____________ ___________ ____________ ____________ ___________ ____________

1 L&R: Loans and receivables 2 AC: Financial assets or financial liabilities at amortised cost 3 FVTPL: Fair value through profit or loss

There has been no impact on the Scheme's accounting for financial liabilities as the new

requirements under HKFRS 9 only affect the accounting for financial liabilities that are

designated at fair value through profit or loss and the Scheme does not have any such

liabilities.

(ii) Impairment

The Scheme has applied the general approach to assess the twelve-month expected credit losses

for all the receivables that are estimated based on the possible default events within the next

twelve months. Given the financial assets are due from creditworthy related parties which are

also major financial institutions located in Hong Kong, the Scheme has determined that the

opening expected credit loss ("ECL") allowances under HKFRS 9 upon the initial adoption of

the standard are immaterial.

(iii) Overall impact of adoption of HKFRS 9 on equity

The Scheme has taken an exemption not to restate comparative information for prior periods

with respect to classification and measurement in accordance with the transitional provision of

HKFRS 9. The adoption of HKFRS 9 did not affect the opening balances of equity, net of tax.



31 March 2019

113

2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (continued)

HKFRS 15 Revenue from Contracts with Customers

HKFRS 15 and its amendments replace HKAS 11 Construction Contracts, HKAS 18 Revenue and

related interpretations and it applies, with limited exceptions, to all revenue arising from contracts

with customers. HKFRS 15 establishes a new five-step model to account for revenue arising from

contracts with customers. Under HKFRS 15, revenue is recognised at an amount that reflects the

consideration to which an entity expects to be entitled in exchange for transferring goods or services

to a customer. The principles in HKFRS 15 provide a more structured approach for measuring and

recognising revenue. The standard also introduces extensive qualitative and quantitative disclosure

requirements, including disaggregation of total revenue, information about performance obligations,

changes in contract asset and liability account balances between periods and key judgements and

estimates. After assessment by the Scheme, the application of HKFRS 15 has had no impact on the

classification on financial statements, the financial performance of the Scheme, or the operating,

investing and financial cash flows of the Scheme. Hence, no cumulative effect of the initial

application of HKFRS 15 was recognised as an adjustment to the opening balance of equity at 1

April 2018.

2.3 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS

The Scheme has not early applied any of the following new and revised HKFRSs, that have been

issued but are not yet effective for the accounting year ended 31 March 2019 in these financial

statements. Among the new and revised HKFRSs, the following is expected to be relevant to the

Scheme's financial statements upon becoming effective:

HK(IFRIC)-Int 23 Uncertainty over Income Tax Treatments1 Amendments to HKAS 1 Definition of Material2

and HKAS 8

1 Effective for annual periods beginning on or after 1 January 2019 2 Effective for annual periods beginning on or after 1 January 2020

Further information about the HKFRS that is expected to be applicable to the Scheme is as follows:

HK(IFRIC)-Int 23

The interpretation was issued in July 2017 and addresses the accounting for income taxes when tax

treatments involve uncertainty that affects the application of HKAS 12. The interpretation does not

apply to taxes or levies outside the scope of HKAS 12, nor does it specifically include requirements

relating to interest and penalties associated with uncertain tax treatments. The interpretation

specifically addresses the following:

(i) Whether an entity considers uncertain tax treatments separately

(ii) The assumptions an entity makes about the examination of tax treatments by taxation

authorities

(iii) How an entity determines taxable profits (tax losses), tax bases, unused tax losses, unused

tax credits and tax rates

(iv) How an entity considers changes in facts and circumstances



31 March 2019

114

2.3 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS

(continued)

HK(IFRIC)-Int 23 (continued)

The Scheme expects to adopt the interpretation on 1 April 2019. The interpretation is not expected to

have any significant impact on the financial position or performance of the Scheme upon adoption. Amendments to HKAS 1 and HKAS 8 The amendments to HKAS 1 and HKAS 8 were issued in January 2019 to align the definition of "material" across the standards and to clarify certain aspects of the definition. The new definition states that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments clarify that materiality will depend on the nature or magnitude of information, or both. The amendments are effective for reporting periods beginning on or after 1 January 2020 and are not expected to have any impact on the financial position or performance of the Scheme upon adoption.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of financial statements of the Scheme

and its underlying constituent funds are set out below:

Revenue recognition (applicable from 1 April 2018) Revenue from contracts with customers Revenue from contracts with customers is recognised when control of goods or services is transferred to the customers at an amount that reflects the consideration to which the Scheme expects to be entitled in exchange for those goods or services. When the consideration in a contract includes a variable amount, the amount of consideration is estimated to which the Scheme will be entitled in exchange for transferring the goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. When the contract contains a financing component which provides the customer a significant benefit of financing the transfer of goods or services to the customer for more than one year, revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected in a separate financing transaction between the Scheme and the customer at contract inception. When the contract contains a financing component which provides the Scheme a significant financial benefit for more than one year, revenue recognised under the contract includes the interest expense accreted on the contract liability under the effective interest method. For a contract where the period between the payment by the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects of a significant financing component, using the practical expedient in HKFRS 15. There is no revenue from contracts with customers recognised during the year.



31 March 2019

115

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue recognition (applicable from 1 April 2018) (continued) Other income Interest income is recognised on an accrual basis using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset. Realised and unrealised gains and losses on investments at fair value through profit or loss are dealt with in profit or loss in the year in which they arise.

Revenue recognition (applicable before 1 April 2018)

Revenue is recognised when it is probable that the economic benefits will flow to the Scheme and its

underlying constituent funds, and when the revenue can be measured reliably on the following

bases:

(a) "Interest income", is recorded on an accrual basis using the effective interest rate method by

applying the rate that discounts the estimated future cash receipts over the expected life of

the financial instrument or a shorter period, when appropriate, to the net carrying amount of

the financial asset.

(b) Realised and unrealised gains and losses on investments at fair value through profit or loss

are dealt with in profit or loss in the year in which they arise.

Expenses

All expenses are accounted for on an accrual basis.

Contributions

Contributions are accounted for on an accrual basis.

Benefits

Benefits are accounted for on an accrual basis.

Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents comprise cash on hand

and demand deposits, and short term highly liquid investments that are readily convertible into

known amounts of cash, are subject to an insignificant risk of changes in value, and have a short

maturity of generally within three months when acquired, less bank overdrafts which are repayable

on demand and form an integral part of the Scheme's or its underlying constituent funds' cash

management.

For the purpose of the statement of net assets available for benefits, cash and cash equivalents

comprise cash at bank, including term deposits, which are not restricted as to use.



31 March 2019

116

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial assets

Trade receivables that do not contain a significant financial component or for which the Scheme has

applied the practical expedient of not adjusting the effect of a significant financial component are

measured at the transaction price determined under HKFRS 15. All the other financial assets are

initially recognised at fair value plus transaction costs that are attributable to the acquisition of the

financial assets, except in the case of financial assets recorded at fair value through profit or loss.

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

when the Scheme commits to purchase or sell the assets.

(a) Classification and measurement

(i) Under HKFRS 9

Debt instruments that do not meet the criteria for amortised cost or as financial assets at

fair value through other comprehensive income are measured at fair value through profit

or loss. Interest income for these financial assets is included in finance income.

Equity investments are measured at fair value through profit or loss unless, on initial

recognition, the Scheme has irrevocably elected to designate the investments that are not

held for trading as equity investments at fair value through other comprehensive income.

Dividends of such investments are recognised in the statement of profit or loss when the

Scheme's right to receive payment is established. Changes in the fair value of such

investments are recognised in other comprehensive income and are never transferred to

the statement of profit or loss even when the assets are sold.

(ii) Under HKAS 39

Financial assets are classified as financial assets at fair value through profit or loss if

held for trading, or, upon initial recognition, are designated at fair value through profit or

loss. Such investments are recognised initially at fair value, with transaction costs taken

directly to the statement of profit or loss, and are subsequently remeasured at fair value.

Gains and losses from changes in the fair value are recognised in the statement of profit

or loss as they arise, together with the related interest income and expenses and

dividends.

Non-derivative financial assets with fixed or determinable payments that are not quoted

in an active market are classified as loans and receivables. They are initially recorded at

fair value plus any directly attributable transaction costs and are subsequently measured

at amortised cost using the effective interest rate method, less impairment allowances.



31 March 2019

117


Financial assets (continued)

(a) Classification and measurement (continued)

(i) Under HKAS 39 (continued)

Available-for-sale financial investments are non-derivative financial assets in listed and

unlisted equity securities and debt securities. Such investments classified as available

for sale are those which are neither classified as held for trading nor designated as at fair

value through profit or loss. Available-for-sale financial investments are initially

measured at fair value plus directly attributable transaction costs. Subsequently, they are

remeasured at fair value with changes in fair value recognised as other comprehensive

income in the available-for-sale investment revaluation reserve until the securities are

either sold or impaired. On disposal of available-for-sale securities, cumulative gains or

losses are recognised in the statement of profit or loss and removed from the available-

for-sale investment revaluation reserve.

(b) Impairment

(i) Under HKFRS 9

The Scheme applies the expected credit loss model to all the financial assets that are

subject to impairment, financial guarantee contracts or contract assets under HKFRS 15.

For trade receivables and contract assets, without a significant financial component, if

any, the Scheme applies the simplified approach which requires impairment allowances

to be measured for lifetime expected credit losses.

For other financial assets, impairment allowances are recognised under the general

approach where expected credit losses are recognised in two stages. For credit

exposures where there has not been a significant increase in credit risk since initial

recognition, the Scheme is required to provide for credit losses that result from possible

default events within the next 12 months. For those credit exposures where there has

been a significant increase in credit risk since initial recognition, a loss allowance is

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

the timing of the default.

The Scheme considers a default has occurred when a financial asset is more than 90 days

past due unless the Scheme has reasonable and supportable information to demonstrate

that a more appropriate default criterion should be applied.

(ii) Under HKAS 39

The Scheme and its underlying constituent funds assess at the end of each reporting

period whether there is objective evidence that a financial asset or group of financial

assets is impaired. An impairment exists if one or more events that occurred after the

initial recognition of the asset have an impact on the estimated future cash flows of the

financial asset or the group of financial assets that can be reliably estimated. Evidence

of impairment may include indications that a debtor or a group of debtors is

experiencing significant financial difficulty, default or delinquency in interest or

principal payments, the probability that they will enter bankruptcy or other financial

reorganisation and observable data indicating that there is a measurable decrease in the

estimated future cash flows, such as changes in arrears or economic conditions that

correlate with defaults.



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Financial assets (continued)

(b) Impairment (continued)

(ii) Under HKAS 39 (continued)

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Scheme and its underlying constituent

funds first assess whether impairment exists individually for financial assets that are

individually significant, or collectively for financial assets that are not individually

significant. If the Scheme and its underlying constituent funds determine that no

objective evidence of impairment exists for an individually assessed financial asset,

whether significant or not, it includes the asset in a group of financial assets with similar

credit risk characteristics and collectively assesses them for impairment. Assets that are

individually assessed for impairment and for which an impairment loss is, or continues

to be, recognised are not included in a collective assessment of impairment.

The amount of any impairment loss identified is measured as the difference between the

asset's carrying amount and the present value of estimated future cash flows (excluding

future credit losses that have not yet been incurred). The present value of the estimated

future cash flows is discounted at the financial asset's original effective interest rate (i.e.,

the effective interest rate computed at initial recognition).

The carrying amount of the asset is reduced through the use of an allowance account and

the loss is recognised in profit or loss. Interest income continues to be accrued on the

reduced carrying amount and is accrued using the rate of interest used to discount the

future cash flows for the purpose of measuring the impairment loss. Receivables

together with any associated allowance are written off when there is no realistic prospect

of future recovery.

If, in a subsequent period, the amount of the estimated impairment loss increases or

decreases because of an event occurring after the impairment has been recognised, the

previously recognised impairment loss is increased or reduced by adjusting the

allowance account. If a write-off is later recovered, the recovery is credited to profit or

loss.

(c) Derecognition (under HKFRS 9 and HKAS 39)

Financial assets are derecognised when the rights to receive cash flows from the assets have

expired; or where the Scheme has transferred its contractual rights to receive the cash flows of

the financial assets and has transferred substantially all the risks and rewards of ownership; or

where control is not retained.


Financial liabilities include bank and other borrowings, trade payables, accruals and other monetary

liabilities. They are initially recognised at the fair value of the consideration received less directly

attributable transaction costs. After initial recognition, they are subsequently measured at amortised

cost using the effective interest rate method.

Financial liabilities are derecognised when they are extinguished, i.e., when the obligation is

discharged or cancelled, or expires.



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119


Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of

net assets available for benefits if there is currently an enforceable legal right to offset the

recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle

the liabilities simultaneously.

Fair value measurement

The Scheme and its underlying constituent funds measure their equity investments at fair value at

the end of each reporting period. 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. The fair value measurement is based on the presumption that the transaction to sell the asset or

transfer the liability takes place either in the principal market for the asset or liability, or in the

absence of a principal market, in the most advantageous market for the asset or liability. The

principal or the most advantageous market must be accessible by the Fund. The fair value of an

asset or a liability is measured using the assumptions that market participants would use when

pricing the asset or liability, assuming that market participants act in their economic best interest.

The Scheme and its underlying constituent funds use valuation techniques that are appropriate in the

circumstances and for which sufficient data is available to measure fair value, maximising the use of

relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are

categorised within the fair value hierarchy, described as follows, based on the lowest level input that

is significant to the fair value measurement as a whole.

Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 – based on valuation techniques for which the lowest level input that is significant to the fair

value measurement is observable, either directly or indirectly

Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair

value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the

Scheme and its underlying constituent funds determine whether transfers have occurred between

levels in the hierarchy by reassessing categorisation (based on the lowest level input that is

significant to the fair value measurement as a whole) at the end of each reporting period.

Proceeds and payments on issue and redemption of units

The net asset values of the constituent funds are computed on each business day. Prices for issues

and redemptions on each business day are based on the closing valuation of that business day, except

for Manulife MPF Interest Fund ("MGIT"), the valuation of which is performed on a monthly basis

on the last calendar day of each month. For MGIT, no price is issued as it is a non-unitised fund.

Proceeds and payments for units issued and redeemed are shown as movement in the statement of

changes in net assets available for benefits of the respective constituent funds.



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120


Related parties

A party is considered to be related to the Scheme and its underlying constituent funds if:

(a) the party is a person or a close member of that person's family and that person

(i) has control or joint control over the Scheme and its underlying constituent funds;

(ii) has significant influence over the Scheme and its underlying constituent funds; or

(iii) is a member of the key management personnel of the Trustee;

or

(b) the party is an entity where any of the following conditions applies:

(i) the entity and the Scheme and its underlying constituent funds are members of the

same group;

(ii) one entity is an associate or joint venture of the other entity (or of a parent,

subsidiary or fellow subsidiary of the other entity);

(iii) the entity and the Trustee 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 either

the Trustee or an entity related to the Trustee;

(vi) the entity is controlled or jointly controlled by a person identified in (a);

(vii) a person identified in (a)(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); and

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

personnel services to the Trustee.



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121


Associates

For the purpose of these financial statements, an associate of the Scheme and its underlying

constituent funds include each of the following:

(a) an officer, who may be an individual or a corporate entity, of the Scheme and its underlying

constituent funds;

(b) a close relative, partner or employee of an officer of the Scheme and its underlying

constituent funds;

(c) an associated company of the Scheme and its underlying constituent funds;

(d) an officer of an associated company; and

(e) a close relative, partner or employee of an officer of an associated company.

4. CONTRIBUTIONS

Mandatory contributions for both the employers and members are equal to 5% of the members'

relevant income up to HK$30,000 per month but in respect of members earning less than HK$7,100

per month, the members' mandatory contribution is nil.

Self-employed persons must contribute 5% of their relevant income subject to a maximum

contribution of HK$1,500 per month to the Scheme unless their relevant income is less than

HK$7,100 per month or HK$85,200 per year.

Any contributions made to the Scheme by the employers or members in excess of their mandatory

contributions are considered and recorded as additional voluntary contributions.

5. BENEFITS

Members will become entitled to benefits in respect of mandatory contributions to the Scheme under

the requirements of the MPFSO. Currently, these circumstances include where the member (i)

reaches the age of 65; (ii) permanently ceases employment after reaching the age of 60; (iii) retires

on the ground of total incapacity; (iv) has a terminal illness; (v) permanently departs from Hong

Kong; (vi) dies or (vii) has the right to claim a small balance pursuant to the MPFSO.

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.



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122

6. INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

The Scheme 2019 2018

HK$ HK$

Investments in quoted investments - constituent funds

MGAG 23,341,901,072 20,487,437,513

MGCP 10,476,036,171 6,798,742,690

MGEE 2,145,899,331 2,190,504,280

MGGR 17,176,679,172 14,245,789,896

MGHB 2,545,165,853 2,058,013,614

MGHE 11,594,124,105 10,130,633,991

MGIB 4,074,424,934 3,468,672,226

MGIE 4,646,987,261 3,862,485,466

MGIT 21,520,774,781 16,964,389,076

MGJE 1,770,111,098 1,831,941,516

MGNE 5,302,027,239 4,402,084,102

MGPE 8,610,329,481 7,773,934,727

MGST 13,123,366,472 12,295,725,042

MGFG 7,583,339,076 6,505,616,144

MGFS 6,336,800,288 3,917,587,461

MGCV 26,431,770,505 27,207,421,314

MGHC 21,984,098,643 17,722,641,767

MGHS 4,715,047,227 3,954,002,198

MGPB 1,266,750,029 1,150,495,676

MGRB 1,222,242,506 1,070,450,728

MG15 371,573,910 325,793,272

MG20 559,575,668 547,647,368

MG25 622,950,561 576,465,704

MG30 580,568,639 515,349,593

MG35 589,169,811 533,908,614

MG40 463,580,158 416,007,260

MG45 825,414,008 748,624,271

MGAP 1,346,732,621 673,866,385

MGCA 4,810,358,856 2,280,552,863 ______________ ______________

Investments at fair value 206,037,799,476 174,656,784,757 ______________ ______________ ______________ ______________

Investments at cost 188,592,449,016 151,623,234,015 ______________ ______________ ______________ ______________



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123

7. CASH AND CASH EQUIVALENTS

2019 2018

HK$ HK$

Cash and bank balances 579,685,446 441,726,902

Time deposit 1,580,000 - __________ __________

581,265,446 441,726,902 ___________ ___________ ___________ ___________

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term time

deposits are made for period of one month, and earn interest at the short term time deposit rate. The

carrying amounts of the cash and cash equivalents approximate their fair values.

8. BANK LOANS, OVERDRAFTS AND OTHER BORROWINGS

The Scheme and its underlying constituent funds had no bank loans, overdrafts and other

borrowings at 31 March 2019 (2018: Nil).

9. INCOME TAX

The Scheme and its underlying constituent funds are not subject to Hong Kong Profits tax as they

are not considered to be carrying on a business in Hong Kong. Reconciliations of the tax

expense/credit applicable to income/loss for the year using the statutory rate to tax expense/credit at

the effective tax rate have not been presented as the income/loss of the Scheme and its underlying

constituent funds are not subject to tax.

10. ACCRUED BENEFITS

The total accrued benefits vested in the members' accounts amounted to HK$205,464,257,708 at

31 March 2019 (2018: HK$174,239,904,836).



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124

11. TRANSACTIONS WITH ASSOCIATES AND RELATED PARTY TRANSACTIONS

(a) Transactions with associates and related parties

The assets of the constituent funds of the Scheme are invested directly in sub-funds of

corresponding approved pooled investment funds ("APIFs").

During the year, the constituent funds had the following transactions with the APIFs:

2019 2018

HK$ HK$

Investments in APIFs * 101,416,138,506 84,784,377,536

Redemption of investments in APIFs 67,668,567,430 68,068,953,455 ______________ _____________ ______________ _____________

The purchase cost and redemption price of investments in an APIF are determined based on

the net asset value of the APIFs at the time of purchase and redemption. All such

transactions were entered into in the ordinary course of business and on normal commercial

terms. The transaction fees of each subscription/redemption/transfer transacted between the

constituent funds and the APIFs are charged to the APIFs. Rebalancing transactions among

Manulife MPF funds are not counted as transactions and do not incur any transaction fee.

* The investments in APIFs include investments purchased in specie arising from the

Scheme Merger with a cost of HK$9,439,271,204 (2018: nil). For details, please refer to

note 1 to the financial statements.

Manulife Investment Management (Hong Kong) Limited (formerly known as "Manulife

Asset Management (Hong Kong) Limited") is the investment manager of underlying

investments under the Scheme. Depending on the investment strategies of any new

constituent funds established on or after 5 January 2006, assets of the relevant constituent

fund may be invested in an APIF for which annual performance fees may be levied.

In respect of the China Value Fund, an annual performance fee may be levied at the

underlying APIF depending on the net asset value of the underlying APIF.

Except for the above, there was no transaction entered into with the investment manager,

associates of the investment manager or its delegates, administrators, trustee, custodian

and/or any associates, during the year (2018: Nil).

(b) Outstanding balances with related parties

The Scheme and its underlying constituent funds had amounts receivable/payable on

sale/purchase of investments and other receivables at the end of the reporting period. The

balances are unsecured, interest-free and normally settled within one week. Their carrying

amounts approximate their fair values.



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125

11. TRANSACTIONS WITH ASSOCIATES AND RELATED PARTY TRANSACTIONS (continued)

(c) Compensation of key management personnel of the Scheme and its underlying constituent

funds

No key management personnel received any compensation in respect of their services

rendered to the Scheme and its underlying constituent funds during the year (2018: Nil).

12. SOFT COMMISSION ARRANGEMENTS

No soft commission has been arranged by the Scheme or its underlying constituent funds during the

year (2018: Nil).

13. SECURITY LENDING ARRANGEMENTS

During the year, the Scheme and its underlying constituent funds did not enter into any security

lending arrangements (2018: Nil).

14. NEGOTIABILITY OF ASSETS

At 31 March 2019, there was no statutory or contractual requirement restricting the negotiability of

the assets of the Scheme and its constituent funds (2018: Nil).

15. COMMITMENTS

The Scheme and its underlying constituent funds had no commitments at 31 March 2019

(2018: Nil).

16. CONTINGENT LIABILITIES

The Scheme and its underlying constituent funds had no contingent liabilities at 31 March 2019

(2018: Nil).

17. MARKETING EXPENSES

There were no advertising expenses, promotional expenses, commissions or brokerage fees payable

to the MPF intermediaries of the Scheme deducted from the constituent funds during the year (2018:

Nil).



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126

18. FINANCIAL INSTRUMENTS BY CATEGORY

The carrying amounts of each of the categories of financial instruments at the end of the reporting

period are as follows:

2019

Financial assets

Financial assets at Financial

fair value through assets at

profit or loss amortised cost Total

HK$ HK$ HK$

Investments at fair value through

profit or loss 206,037,799,476 - 206,037,799,476

Contribution receivables from employers - 546,278,981 546,278,981

Contribution receivables from employees - 349,485,370 349,485,370

Amounts receivable on sale of investments - 534,650,435 534,650,435

Financial assets included in other receivables - 41,424,800 41,424,800

Cash and cash equivalents - 581,265,446 581,265,446 ______________ ____________ ______________

206,037,799,476 2,053,105,032 208,090,904,508 ______________ ____________ ______________ ______________ ____________ ______________


Financial

liabilities at

amortised cost

HK$

Benefits payable 107,008,330

Amounts payable on purchase of investments 504,181,480

Financial liabilities included in other payables 189,000,687 ___________

800,190,497 ___________ ___________



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127

18. FINANCIAL INSTRUMENTS BY CATEGORY (continued)

2018

Financial assets

Financial assets at fair value Loans and

through profit or loss receivables Total

HK$ HK$ HK$

Investments at fair value through

profit or loss 174,656,784,757 - 174,656,784,757

Contribution receivables from employers - 455,651,362 455,651,362

Contribution receivables from employees - 308,937,723 308,937,723

Amounts receivable on sale of investments - 620,526,661 620,526,661

Financial assets included in other receivables - 41,982,049 41,982,049

Cash and cash equivalents - 441,726,902 441,726,902 ______________ ____________ ______________

174,656,784,757 1,868,824,697 176,525,609,454 ______________ ____________ ______________ ______________ ____________ ______________


Financial

liabilities at

amortised cost

HK$

Benefits payable 110,610,810

Amounts payable on purchase of investments 529,770,320

Financial liabilities included in other payables 212,294,911 ___________

852,676,041 ___________ ___________



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19. FAIR VALUE HIERARCHY

The Scheme uses the following hierarchy for determining and disclosing the fair values of financial

instruments:

Management has assessed that the fair values of financial receivables and payables, cash and cash

equivalents, and other payables approximate to their carrying amounts largely due to the short term

maturities of these instruments.

The following tables illustrate the fair value measurement hierarchy of the Scheme's financial

instruments:

Assets measured at recurring fair value

At 31 March 2019:

Fair value measurement using

Quoted prices Significant Significant

in active observable unobservable

Markets Inputs Inputs

(Level 1) (Level 2) (Level 3) Total

HK$'000 HK$'000 HK$'000 HK$'000

Investments at fair value through profit or loss:

APIFs 206,037,799 - - 206,037,799

206,037,799 - - 206,037,799

At 31 March 2018:

Fair value measurement using

Quoted prices Significant Significant

in active observable unobservable

Markets Inputs Inputs

(Level 1) (Level 2) (Level 3) Total

HK$'000 HK$'000 HK$'000 HK$'000

Investments at fair value through profit or loss:

APIFs 174,656,785 - - 174,656,785

174,656,785 - - 174,656,785

During the year, there were no transfers of fair value measurements between Level 1 and Level 2

and no transfers into or out of Level 3 (2018: Nil).



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129

20. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Scheme's principal financial instruments comprise investments at fair value through profit or

loss and cash and cash equivalents. The main risks arising from the Scheme's financial instruments

are price risk, foreign currency risk, interest rate risk, credit risk and liquidity risk. The policies for

managing each of these risks are summarised below.

Price risk

Price risk is the risk that the fair values of equity securities decrease as a result of changes in the

levels of equity indices and the value of individual securities. The Scheme and its underlying

constituent funds are exposed to price risk arising from investments in underlying APIFs classified

as trading equity investments at the end of the reporting period. Each constituent fund of the

Scheme is managed in accordance with separate and distinct investment policies reflecting the

different risk profiles of the investments and there is no concentration of price risk for each

constituent fund of the Scheme. The positions held by the Scheme and its underlying constituent

funds at the end of the reporting period are disclosed in the investment portfolios.

At 31 March 2019 and 2018, it is estimated that had the equity indices increased by 5%, with all

other variables held constant, net assets attributable to unitholders and profit would have increased

by the amounts shown below:



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130

20. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Price risk (continued)

At 31 March 2019

Market Indices (+5%) Change in net assets and income (HK$'000)

MGGR MGAG MGPE MGIE MGHE MGJE MGNE MGEE MGFG MGFS MGCV

FTSE MPF Europe 78,142 137,630 - 30,509 - - - 100,960 - - -

FTSE MPF Hong Kong 159,150 275,491 136,681 4,299 601,581 - - - - - -

FTSE MPF Japan 73,426 123,296 - 17,965 - 90,795 - - - - -

FTSE MPF USA 56,566 98,808 - 59,668 - - 314,246 - - - -

FTSE MPF Asia Pacific ex JP & HK 73,674 117,681 279,643 21,921 - - - - - - -

FTSE MPF Greater China - - - - - - - - - - 1,283,762

Russell 1000 49,926 88,664 - 51,944 - - - - - - -

S&P 500 52,878 93,906 - 55,015 - - - - - - -

MSCI AC World Information Technology 3,626 6,471 - - - - - - - - -

Citigroup WGBI Non-Exempt Auth 10%

Cap, 25% Hedged to HKDFTSE MPF Hong

Kong

FTSE AW North America Index

FTSE AW Europe Index

FTSE W Japan Index

FTSE AW Asia Pacific Ex Japan Ex HK1

month HIBOR

- - - - - - - - 390,841 320,281 -



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131

20. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)


At 31 March 2019 (continued)


MGHC MG15 MG20 MG25 MG30 MG35 MG40 MG45 MGHS MGAP MGCA MGST

FTSE MPF Europe - 1,232 1,827 2,889 3,229 3,569 2,847 5,141 - - - 20,948

FTSE MPF Hong Kong - 2,474 3,729 5,602 6,292 6,875 5,555 9,938 - - - 77,285

FTSE MPF Japan - 1,081 1,826 2,721 3,056 3,094 2,609 4,510 - - - 31,159

FTSE MPF USA - 924 1,386 2,112 2,376 2,574 2,046 3,630 - - - 13,795

FTSE MPF Asia Pacific ex JP & HK - 1,154 1,758 2,472 2,857 3,241 2,527 4,340 - - - 5,219

MSCI World Health Care 989,099 - - - - - - - - - - -

Russell 1000 - 730 1,160 1,761 1,911 2,083 1,653 3,006 - - - 11,531

S&P 500 - 773 1,228 1,865 2,024 2,206 1,751 3,184 - - - 12,213

MSCI AC World Information

Technology

- 54 86 130 141 153 122 221 - - - -

Hang Seng Index - - - - - - - - 236,900 - - -

FTSE MPF All-World Index

Citi MPF Government Bond Index

MPFA prescribed savings rate

- - - - - - - - - 66,333 236,608 -

A 5% drop in the equity indices would have resulted in an equal but opposite effect on the financial statements as shown above, on the basis that all other

variables remained constant. In practice, the actual trading results may differ from the above sensitivity analysis and the difference could be material.

MGCP, MGHB, MGIT, MGIB, MGPB and MGRB invest in underlying investments that are fixed-income instruments. Price of those securities is primarily

subject to fluctuations in interest rates for which the associated interest rate risk is covered in the later part of this note.



31 March 2019

132



At 31 March 2018


MGGR MGAG MGPE MGIE MGHE MGJE MGNE MGEE MGFG MGFS MGCV

FTSE MPF Europe 55,042 103,114 - 25,067 - - - 99,239 - - -

FTSE MPF Hong Kong 132,655 232,683 113,428 7,995 469,108 - - - - - -

FTSE MPF Japan 59,109 108,429 - 14,803 - 86,999 - - - - -

FTSE MPF USA 44,308 77,852 - 39,689 - - 184,765 - - - -

FTSE MPF Asia Pacific ex JP & HK 64,487 104,736 246,307 21,479 - - - - - - -

FTSE MPF Greater China - - - - - - - - - - 1,430,220

Russell 1000 46,937 91,432 - 45,008 - - - - - - -

S&P 500 46,937 91,432 - 45,008 - - - - - - -

MSCI AC World Information Technology 5,814 10,420 - - - - - - - - -

Citigroup WGBI Non-Exempt Auth 10%

Cap, 25% Hedged to HKDFTSE MPF Hong

Kong

FTSE AW North America Index

FTSE AW Europe Index

FTSE W Japan Index

FTSE AW Asia Pacific Ex Japan Ex HK1

month HIBOR

- - - - - - - - 332,346 203,934 -



31 March 2019

133





MGHC MG15 MG20 MG25 MG30 MG35 MG40 MG45 MGHS MGAP MGCA MGST

FTSE MPF Europe - 924 1,778 2,347 2,382 2,596 2,098 3,769 - - - 19,592

FTSE MPF Hong Kong - 2,325 5,660 6,520 6,136 6,357 5,055 8,973 - - - 73,660

FTSE MPF Japan - 942 1,850 2,523 2,557 2,759 2,153 3,936 - - - 31,119

FTSE MPF USA - 852 1,570 1,928 1,973 2,153 1,704 2,960 - - - 17,041

FTSE MPF Asia Pacific ex JP & HK - 903 2,158 2,810 2,610 2,660 2,108 3,764 - - - 11,041

MSCI World Health Care 941,136 - - - - - - - - - - -

Russell 1000 - 718 1,313 1,827 1,929 2,217 1,724 3,181 - - - 8,948

S&P 500 - 718 1,313 1,827 1,929 2,217 1,724 3,181 - - - 8,948

MSCI AC World Information

Technology

- 79 146 195 195 220 174 320 - - - -

Hang Seng Index - - - - - - - - 200,389 - - -

FTSE MPF All-World Index

Citi MPF Government Bond Index

MPFA prescribed savings rate

- - - - - - - - - 31,251 113,087 -

A 5% drop in the equity indices would have resulted in an equal but opposite effect on the financial statements as shown above, on the basis that all other

variables remained constant. In practice, the actual trading results may differ from the above sensitivity analysis and the difference could be material.

MGCP, MGHB, MGIT, MGIB, MGPB and MGRB invest in underlying investments that are fixed-income instruments. Price of those securities is primarily

subject to fluctuations in interest rates for which the associated interest rate risk is covered in the later part of this note.



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134


Foreign currency risk

Foreign currency risk is the risk that the value of financial assets or liabilities will fluctuate due to

changes in foreign exchange rates. The Scheme and its underlying constituent funds are exposed to

foreign currency risk from its cash and investments in underlying APIFs which are denominated in

currencies other than Hong Kong Dollars and United States Dollars which are officially linked to the

Hong Kong Dollar. The Scheme and its underlying constituent funds' overall currency positions are

monitored on a daily basis by the investment manager.

The Scheme and its underlying constituent funds primarily utilise forward exchange contracts and

futures to hedge foreign-currency-denominated financial assets and liabilities. Increases or

decreases in the Scheme and its underlying constituent funds' foreign-currency-denominated

financial assets and liabilities are partially offset by gains and losses on the economic hedging

instruments.

The tables below indicate currencies other than Hong Kong Dollars and United States Dollars to

which the Scheme and its underlying constituent funds had significant exposure at the end of the

reporting periods on its financial assets and liabilities. At 31 March 2019 and 2018, it is estimated

that had the Hong Kong Dollars or the United States Dollars strengthened by 5% in relation to the

foreign currencies with significant exposure, with all other variables held constant, net assets

attributable to unitholders and profit would have decreased by the amounts shown below.

At 31 March 2019

Currency MGGR MGAG MGPE MGIE MGIB MGJE MGST

(+5%) HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000

AUD - 35,194 82,295 - 7,060 - -

EUR 61,713 67,602 - 14,573 57,323 - -

GBP - - - - 11,459 - -

INR - - 49,643 - - - -

JPY 80,079 119,027 - 17,078 22,724 86,311 31,589

KOW - - 61,316 - - - -

SGD - - 15,223 - - - -

TWD - - 47,712 - - - -

Total 141,792 221,823 256,189 31,651 98,566 86,311 31,589



31 March 2019

135


Foreign currency risk (continued)


Currency MGEE MG15 MG20 MG25 MG30 MG35 MG40 MG45

(+5%) HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000

AUD - - - - 892 971 754 1,289

CHF 9,392 - - - - - - -

CNH - 637 1,126 - - - - -

DKK 14,139 - - - - - - -

EUR 45,021 1,791 2,127 2,166 1,885 1,760 1,377 2,427

GBP 19,452 - - - - - - -

JPY - 1,514 2,247 2,920 3,066 2,991 2,509 4,316

SEK 10,952 - - - - - - -

Total 98,956 3,942 5,500 5,086 5,843 5,722 4,640 8,032

Currency MGFG MGFS MGCV MGHC MGPB MGRB MGAP MGCA


AUD - - - - 5,746 - - -

CNH - - 90,909 - - 51,230 - -

EUR 43,714 51,150 - - - - 1,298 14,036

GBP - - - 63,598 - - 738 8,003

IDR - - - - 6,301 - - -

INR - - - - 2,559 - - -

JPY 46,977 29,586 - 36,455 - - 1,073 11,724

KOW - - - - 5,395 - - -

MYR - - - - 4,211 - - -

NZD - - - - 2,412 - - -

PHP - - - - 2,323 - - -

SGD - - - - 4,307 - - -

THB - - - - 2,545 - - -

TWD - - 266,231 - - - - -

Total 90,691 80,736 357,140 100,053 35,799 51,230 3,109 33,763

A 5% weakening of the Hong Kong Dollars or the United States Dollars against the foreign

currencies would have resulted in an equal but opposite effect on the financial statements as shown

above, on the basis that all other variables remained constant. In practice the actual trading results

may differ from the above sensitivity analysis and the difference could be material.



31 March 2019

136




MGCP, MGHB, MGHE, MGIT and MGHS are mainly denominated in Hong Kong Dollars and

MGNE is mainly denominated in United States Dollars. Therefore, there is no significant exposure

to foreign currency risk.

At 31 March 2018

Currency MGGR MGAG MGPE MGIE MGHE MGIB MGJE MGST


AUD - - 67,386 5,876 - 5,601 - -

CAD - - - - - 5,436 - -

CNH - - - - 18,931 - - -

EUR 51,796 53,187 - 12,909 - 51,658 - -

GBP 26,449 40,948 - 9,936 - 10,133 - -

INR - - 36,013 - - - - -

JPY 72,002 112,098 - 15,291 - 24,043 89,868 35,301

KOW - - 66,946 5,838 - - - -

NZD - - - - - 5,479 - -

SGD - - 17,130 - - - - -

TWD - - 47,591 - - - - -

Total 150,247 206,233 235,066 49,850 18,931 102,350 89,868 35,301

Currency MGEE MG15 MG20 MG25 MG30 MG35 MG40 MG45


CHF 10,353 - - - - - - -

CNH - 633 1,200 - - - - -

DKK 4,567 - - - - - - -

EUR 51,009 1,727 1,205 1,219 1,228 1,338 1,082 1,943

GBP 39,333 612 - 933 946 1,030 833 1,496

JPY - 1,556 2,047 2,612 2,643 2,852 2,226 4,069

Total 105,262 4,528 4,452 4,764 4,817 5,220 4,141 7,508



31 March 2019

137




Currency MGFG MGFS MGCV MGHC MGPB MGRB MGAP MGCA


AUD - - - - 4,618 - - -

CHF - - - 30,835 - - - -

CNH - - 88,818 - - 45,125 - -

EUR 33,235 31,178 - 71,514 - - 686 7,424

GBP 16,780 8,746 - 64,591 - - 375 4,058

IDR - - - - 5,549 - - -

INR - - - - 2,729 - - -

JPY 43,368 20,080 - - - - 557 6,064

KOW - - - - 4,460 - - -

MYR - - - - 1,873 - - -

NZD - - - - 2,433 - - -

SGD - - - - 2,793 - - -

TWD - - 282,695 - - - - -

Total 93,383 60,004 371,513 166,940 24,455 45,125 1,618 17,546

A 5% weakening of the Hong Kong Dollars or United States Dollars against the foreign currencies

would have resulted in an equal but opposite effect on the financial statements as shown above, on

the basis that all other variables remained constant. In practice the actual trading results may differ

from the above sensitivity analysis and the difference could be material.

MGCP, MGHB, MGIT and MGHS are mainly denominated in the Hong Kong Dollars and MGNE

is mainly denominated in the United States Dollars. Therefore, there is no significant exposure to

foreign currency risk.

Interest rate risk

Interest rate risk is the risk that the value of financial instruments or future cash flows will fluctuate

as a result of changes in market interest rates. The Scheme and its underlying constituent funds are

exposed to interest rate risk on the underlying APIFs which invest in interest-bearing securities and

cash deposits.

Interest rates are determined by factors of supply and demand in the international money markets

which are influenced by macro-economic factors. Fluctuations in short term and/or long term

interest rates may affect the value of the units. Fluctuations in interest rates of the currencies in

which the units are denominated and/or fluctuations in interest rates of the currencies in which an

underlying portfolio's investments are denominated may affect the value of the units.



31 March 2019

138


Interest rate risk (continued)

It is the Scheme and its underlying constituent funds' policies that the interest-bearing securities held

by the underlying APIFs of the constituent funds of the Scheme are selected on a diversified basis

mainly in short and medium term fixed income instruments in accordance with the investment

policies of the underlying APIFs which satisfy the minimum credit rating stipulated by the MPFA,

so as to minimise the interest rate risk of the Scheme and its underlying constituent funds from

changes in market interest rates.

At 31 March 2019 and 2018, it is estimated that an increase of interest rate by 25 basis points

("bps"), with all other variables held constant, would have resulted in a decrease in net assets

attributable to unitholders of the below constituent funds by the amounts shown below:

Change in interest rate (+25 bps)

At 31 March 2019 At 31 March 2018

HK$'000 HK$'000

MGAG ( 4,660) ( 1)

MGCP 6,192 3,560

MGGR ( 32,245) ( 24,324)

MGHB ( 33,901) ( 26,101)

MGIB ( 46,920) ( 37,685)

MGIT (188,503) (135,969)

MGST (107,543) ( 93,888)

MGFG ( 8,221) ( 3,460)

MGFS ( 46,521) ( 30,224)

MGPB ( 13,337) ( 13,723)

MGRB ( 10,818) ( 9,380)

MG15 ( 1,522) ( 1,224)

MG20 ( 1,763) ( 620)

MG25 ( 1,041) ( 126)

MG30 ( 485) ( 40)

MG35 ( 162) ( 4)

MG40 ( 92) ( 4)

MG45 ( 94) ( 7)

MGAP ( 3,832) ( 1,892)

MGCA ( 6,575) ( 3,235)

A decrease of the interest rate by 25 bps would have an equal but opposite effect on the net assets

attributable to unitholders of the above sub-funds. The other sub-funds may hold cash or cash

equivalents that may be subject to interest rate risk. This is relatively immaterial to the size of the

sub-funds' net asset value.



31 March 2019

139


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 the carrying

amount of these instruments.

It is the Scheme's constituent funds' policy to engage only with internally approved counterparties.

The investment manager continuously monitors the credit risk on financial instruments and

counterparties and does not expect any material losses due to credit risk.

Concentrations of credit risk are managed by geographical region and by industry sector. There are

no significant concentrations of credit risk within the Scheme and its underlying constituent funds.

Maximum exposure and year-end staging at 31 March 2019 The table below shows the maximum exposure to credit risk based on the Scheme's credit policy, which is mainly based on past due information unless other information is available without undue cost or effort, and year-end staging classification at 31 March 2019. The amounts presented are gross carrying amounts for financial assets.

12-month ECLs Lifetime ECLs

Simplified

Stage 1 Stage 2 Stage 3 approach

HK$ HK$ HK$ HK$ HK$

Contribution receivables from employers 546,278,981 - - - 546,278,981

Contribution receivables from employees 349,485,370 - - - 349,485,370

Amounts receivable on sale of investments 534,650,435 - - - 534,650,435

Other receivables 41,424,800 - - - 41,424,800

Cash and cash equivalents 581,265,446 - - - 581,265,446 ____________ ________ ________ _________ ____________

2,053,105,032 - - - 2,053,105,032 ____________ ________ ________ _________ ____________ ____________ ________ ________ _________ ____________

Maximum exposure at 31 March 2018

The carrying amounts of contribution receivables from employers, contribution receivables from employees, amounts receivables on sale of investments, other receivables and cash and cash equivalents represent the Scheme's maximum exposure to credit risk in relation to financial assets. All the Scheme's amounts receivables are held in major financial institutions located in Hong Kong, which management believes are of high credit quality. The Scheme has policies in place to evaluate credit risk to limit its credit exposure to individual unitholders.



31 March 2019

140


Liquidity risk

Liquidity risk is the risk that the Scheme and its underlying constituent funds will encounter

difficulty in raising funds to meet commitments. Liquidity risk may result from an inability to sell a

financial instrument within a reasonable time at an amount close to its fair value.

Considering that the Scheme invests the majority of the assets in actively traded markets,

management of the Scheme and its underlying constituent funds consider the liquidity risk of the

Scheme and its underlying constituent funds is minimal.

Capital management

The operation of the Scheme is regulated and supervised by the MPFA and the Scheme is governed

by the trust deed of the Scheme. The primary objective of the Scheme's capital management is to

achieve reasonable returns on investments for the Scheme assets.

The capital of the Scheme represents net assets attributable to unitholders. The Scheme does not

raise capital by issue of shares or debt, or in any other way other than contributions made to the

Scheme. During the financial period, the Scheme has complied with the General Regulations and

there has been no material change to the trust deed of the Scheme that has impacted how the Scheme

should manage its capital.



31 March 2019

141

21. PAYMENTS CHARGED TO DIS CONSTITUENT FUNDS

In accordance with the Mandatory Provident Fund legislation, the aggregate of the payments for

services of the MGAP and MGCA must not, in a single day, exceed a daily rate of 0.75% per annum

of the net asset value of each of the MGAP and MGCA divided by the number of days in the year.

The above aggregate payment for services includes, but is not limited to, the fees paid or payable for

the services provided by the Trustee, the Administrator, the Investment Manager, the Custodian and

the Sponsor and/or promoter (if any) of each of the MGCA and MGAP and its underlying

investment fund(s), and any of the delegates from these parties and such fees are calculated as a

percentage of the net asset value of each of the MGCA and MGAP and its underlying investment

fund(s), but do not include any out-of-pocket expenses incurred by each of the MGCA and MGAP

and their underlying investment fund(s).

In accordance with the Mandatory Provident Fund legislation, the total amount of all payments that

is charged to or imposed on a DIS constituent fund or members who invest in a DIS constituent

fund, for out-of-pocket expenses incurred by the Trustee on a recurrent basis in the discharge of the

Trustee's duties to provide services in relation to a DIS constituent fund, shall not in a single year

exceed 0.2% per annum of the net asset value of each of the MGCA and MGAP.

For this purpose, out-of-pocket expenses include, for example, annual audit expenses, printing or

postage expenses relating to recurrent activities (such as issuing annual benefit statements),

recurrent legal and professional expenses, safe custody charges which are customarily not calculated

as a percentage of the net asset value and transaction costs incurred by a DIS constituent fund in

connection with recurrent acquisition of investments for the DIS constituent fund (including, for

example, costs incurred in acquiring underlying funds) and annual statutory expenses (such as

compensation fund levy where relevant) of the DIS constituent fund.

Out-of-pocket expenses that are not incurred on a recurrent basis may still be charged to or imposed

on a DIS constituent fund and such out-of-pocket expenses are not subject to the above statutory

limit. Examples include audit, independent review or accounting expense related to an one-off issue

such as scheme merger, change of trustee or scheme administrator.

Payment for services, out-of-pocket expenses and other payment charged to the MGCA and MGAP

are disclosed below. Payments for services and out-of-pocket expenses are those defined in the MPF

Ordinance.



31 March 2019

142

21. PAYMENTS CHARGED TO DIS CONSTITUENT FUNDS (continued)

2019 2018

MGAP

HK$

MGCA

HK$

MGAP

HK$

MGCA

HK$

Payments for out-of-pocket expenses

- Audit Fees 18,620 22,915 47,710 47,710

- Accounting and Professional Fees 13,650 13,650 13,650 13,650

- Annual Fee 4,778 4,778 5,942 5,942

- Transaction Handling Fees 151,430 151,126 129,042 129,546

- Interest Expense 23,436 3,883 11,466 5,575

- Indemnity Insurance 2,334 8,799 574 2,277

- Expenses incurred in respect of

administration of scheme and

constituent funds

80,845

282,920

36,531

144,813

- Cash Payment Fee 6,440 6,325 2,875 2,875

Total out-of-pocket expenses 301,533 494,396 247,790 352,388

Payments for services

- Administration Fee 4,772,098 16,862,542 1,733,926 6,777,395

- Investment Management Fee 97,407 344,292 35,406 138,446

Total payments for services expenses 4,869,505 17,206,834 1,769,332 6,915,841

Total payments 5,171,038 17,701,230 2,017,122 7,268,229

Out-of-pocket expenses expressed as a

percentage of average net asset value at

the last dealing day of each month of

the DIS constituent funds 0.03% 0.01%

0.06% 0.02%

22. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved and authorised for issue by the Trustee on 17 September

2019.

143


INFORMATION FOR THE SCHEME MEMBERS

31 March 2019

Members of the Scheme are informed about the financial position of their MPF contributions through the

use of a secure PIN which provides access to Smart Call (an IVR service) or e-MPF online service (a web

based service). Both services allow members to enquire about their fund balances and perform routine

transactions such as changing investment instructions. Members can also find comprehensive information in

the online monthly Member Benefit Statement via e-MPF. After log on to e-MPF, members can set up a

fund price alert by selecting the fund and setting a target unit price by the MPF Fund Price Alert. An email

alert will be sent to members when the target unit price is reached. In addition, members are kept abreast of

the investment market with an online view of monthly fund performance through visiting

www.manulife.com.hk to access the e-MPF service. To further facilitate the provision of information to

members, a Manulife App for mobile devices has been launched allowing access to fund information as well

as login to the Customer Website for account balances etc.

Employers can understand the operation of the Scheme through the Employer's Operations Manual which

continues to be a valuable guide for administrative duties and compliance obligations. In addition,

employers may use the internet to access, at their convenience, information relating to their sub-scheme.

This includes the current Cash Account Balance and the status of Contribution Allocation.

As an additional service, for members that have an email address on its records, Manulife initiates timely

emails to alert members that contributions have been allocated to accounts and fund switch transactions have

been executed.

http://www.manulife.com.hk/

Ernst & Young 22/F. CITIC Tower 1 Tim Mei Avenue Central, Hong Kong

~;kiiittifi lJ-~tJiJi' Tel ~~i!i: +852 2846 9888 ~;f!cp !iU~~iillJJ/l Fax ffl:~: +852 2868 4432 4'1~ ::k@22~t ey.com

INDEPENDENT AUDITOR'S ASSURANCE REPORT TO THE TRUSTEE OF MANULIFE GLOBAL SELECT (MPF) SCHEME

We have audited the financial statements of Manulife Global Select (MPF) Scheme (the "Scheme") for the year ended 31 March 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 17 September 2019.

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 the Scheme, the Scheme assets and all financial transactions entered into in relation to the Scheme;

(b) the requirements specified in the guidelines made by the Mandatory Provident Fund Schemes Authority (the "MPFA") under Section 28 of the MPFSO with respect to forbidden investment practices and the requirements of Sections 37(2), 51 and 52 and Part X 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) and 3400(1) and (4) of the MPFSO are complied with; and

(d) the Scheme assets are not subject to any encumbrance, otherwise than as permitted by the General Regulation.

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.

Our firm applies Hong Kong Standard on Quality Control 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagement 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.

Auditors Responsibility

Our responsibility is to report on the Scheme's compliance with the above requirements based on the results of the procedures performed by us.

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.

144

A member firm o( Ernst & Yourig Global Limited

INDEPENDENT AUDITOR'S ASSURANCE REPORT {continued) TO THE TRUSTEE OF MANULIFE GLOBAL SELECT (MPF) SCHEME

Auditor's Responsibility (continued)

We have planned and performed such procedures as we considered necessary with reference to the procedures recommended in PN 860.1 (Revised) issued by the HKICPA, 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.

Opinion

Based on the foregoing:

1. in our opinion:

a) proper accounting and other records have been kept during the year ended 31 March 2019 in respect of the constituent funds of the Scheme, the Scheme assets and all financial transactions entered into in relation to the Scheme; and

b) the requirements specified in the guidelines made by the MPFA under Section 28 of the MPFSO with respect to forbidden investment practices and the requirements of Sections 37(2), 51 and 52 and Part X of, and Schedule 1 to, the General Regulation have been complied with, in all material respects, as at 31 March 2019, 31 December 2018 and 29 June 2018; and

c) the requirements specified in the MPFSO under sections 34DB(1)(a), (b), (c) and (d) 34DC(1) and 3400(1) and (4)(a) with respect to the investment of accrued benefits and control of payment for services relating to Manulife MPF Core Accumulation Fund and Manulife MPF Age 65 Plus Fund have been complied with, in all material respects, as at 31 March 2019, 31 December 2018 and 29 June 2018; and

d) the requirements specified in section 34DD(4)(b) of the MPFSO with respect to the controls of out-of-pocket expenses of the Manulife MPF Core Accumulation Fund and Manulife MPF Age 65 Plus Fund have been complied with, in all material respects, as at31 March 2019.

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

145

A member firm -Of Ernst & Vou11g Glob.al limited

INDEPENDENT AUDITOR'S ASSURANCE REPORT (continued) TO THE TRUSTEE OF MANULIFE GLOBAL SELECT (MPF) SCHEME

Other Matter

The requirement(s). specified in the MPFSO under section(s) 3401(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) and (5) with respect to locating scheme members relating to Manulife MPF Core Accumulation Fund and Manulife MPF Age 65 Plus Fund are not applicable to the trustee during the year ended 31 March 2019 as the trustee has completed the relevant transitional provisions. Accordingly, there is no reporting on these sections.

Intended Users and Purpose

This report is intended solely for submission by the trustee to the MPFA pursuant to Section 102 of the General Regulation, and is not intended to be, and should not be, used by anyone for any other purpose.

c1:: ::icco~nran~ Hong Kong 17 September 2019

146

A member fkm of Ernst & Young Global Umit&d

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