1 BASIS OF PREPARATION (Continued) Changes in Accounting Policies and Restatement (Continued) Amendments to HKAS 12 Deferred Tax Recovery of Underlyin

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1 Notes to the Unaudited Condensed Consolidated Financial Statements 1 BASIS OF PREPARATION The unaudited condensed consolidated financial statements have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules ), and with HKAS 34 Interim financial reporting issued by the Hong Kong Institute of Certified Public Accountants (the HKICPA ). It was authorized for issuance on 30 August The financial information relating to the financial year ended 31 December 2011 included in the interim financial statements does not constitute the Company s statutory financial statements for that financial year but is derived from those financial statements. Statutory financial statements for the year ended 31 December 2011 are available from the Company s registered office. The auditor has expressed an unqualified opinion on those financial statements in their report dated 19 March The accounting policies and methods of computation adopted in the 2011 annual financial statements have been applied consistently to these condensed consolidated financial statements except for the following: In the current interim period, the Group has applied, for the first time, the following amendments to Hong Kong Financial Reporting Standards ( HKFRSs ) issued by the HKICPA HKFRS 7 (Amendments) 7 HKAS 12 (Amendments) 12 Financial Instrument Disclosures Transfer of Financial Assets Deferred Tax Recovery of Underlying Assets Changes in Accounting Policies and Restatement Amendments to HKAS 12 Deferred Tax Recovery of Underlying Assets Under the amendments to HKAS 12 Deferred Tax: Recovery of Underlying Assets, investment properties that are measured using the fair value model in accordance with HKAS 40 Investment Property are presumed to be recovered through sale for the purposes of measuring deferred taxes, unless the presumption is rebutted in certain circumstances

2 1 BASIS OF PREPARATION (Continued) Changes in Accounting Policies and Restatement (Continued) Amendments to HKAS 12 Deferred Tax Recovery of Underlying Assets (Continued) The Group measures its investment properties using the fair value model. As a result of the application of the amendments to HKAS 12, the directors reviewed the Group s investment property portfolios and concluded that all investment properties of the Group located in Hong Kong are not held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, and that the presumption set out in the amendments to HKAS 12 is not rebutted with respect to those properties located in Hong Kong. For those investment properties of the Group located in the PRC, they are depreciable and are held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale, and that the presumption is rebutted. As a result of the application of the amendments to HKAS 12, the Group does not recognize any deferred taxes on changes in fair value of the Group s investment properties located in Hong Kong as the Group is not subject to any income taxes on disposal of its investment properties. Previously, the Group recognized deferred taxes on changes in fair value of investment properties on the basis that the entire carrying amounts of the properties were recovered through use. The directors consider that the impact of the adoption of the amendments to HKAS 12 is insignificant for prior years and current period, and accordingly, the amendments to HKAS 12 have not been applied retrospectively. Computation of Unearned Premium Provisions In the current period, there is a change in the accounting policy in relation to the method of computation of unearned premium provisions for Re Business. In prior years, the acquisition costs of the re contracts were fully charged to profit or loss when the re contracts were entered into during the period. Under the new accounting policy, the acquisition costs of the re contracts are deferred and amortized throughout the coverage period of the re contracts in order to match with the recognition of premiums written. Such deferred acquisition costs are directly deducted from the unearned premium provisions at the end of each reporting period. After the change, the method of computation of unearned premium provisions of the Re Business will be consistent with other business of the Group and be more comparable with other industry players to provide the best estimation of liabilities China Taiping Insurance Holdings Company Limited 2012 Interim Report

3 1 BASIS OF PREPARATION (Continued) Changes in Accounting Policies and Restatement (Continued) Computation of Unearned Premium Provisions (Continued) The effects of the change in accounting policy on the results for the six months ended 30 June 2012 are as follows: 1 Decrease in change in unearned premium provisions, net of re ,530 Increase in profit for the period 101,530 Attributable to: Owners of the Company 101,

4 1 BASIS OF PREPARATION (Continued) Changes in Accounting Policies and Restatement (Continued) 1 The effects of the above change in accounting policy on the condensed consolidated income statement for the six months ended 30 June 2011 are summarized below: For the six months ended 30 June 2011 (Originally stated) For the six months ended 30 June 2011 Adjustment (Restated) Income Gross premiums written and policy fees 27,158,755 27,158,755 Less: Premiums ceded to reinsurers and retrocessionaires (1,161,064) (1,161,064) Net premiums written and policy fees 25,997,691 25,997,691 Change in unearned premium provisions, net of re (595,662) 66,663 (528,999) Net earned premiums and policy fees 25,402,029 66,663 25,468,692 Net investment income 2,709,269 2,709,269 Net realized investment gains 466, ,159 Net unrealized investment losses and impairment (38,772) (38,772) Other income 142, ,307 Other gains 81,832 81,832 Total income 28,762,824 66,663 28,829,487 Benefits, losses and expenses Net policyholders benefits (5,457,601) (5,457,601) Net commission expenses (2,320,281) (2,320,281) Administrative and other expenses (3,978,705) (3,978,705) Change in life contract liabilities, net of re (15,695,252) (15,695,252) Total benefits, losses and expenses (27,451,839) (27,451,839) Profit from operations 1,310,985 66,663 1,377,648 Share of results of associates 4,154 4,154 Finance costs (278,070) (278,070) Profit before taxation 1,037,069 66,663 1,103,732 Income tax credit 14,586 14,586 Profit after taxation 1,051,655 66,663 1,118,318 Attributable to: Owners of the Company 725,777 66, ,440 Non-controlling interests 325, ,878 1,051,655 66,663 1,118, China Taiping Insurance Holdings Company Limited 2012 Interim Report

5 1 BASIS OF PREPARATION (Continued) Changes in Accounting Policies and Restatement (Continued) The effects of the above change in accounting policy on the condensed consolidated statement of financial position as at 31 December 2011 are summarized below: 1 As at 31 December 2011 (Originally stated) As at 31 December 2011 Adjustment (Restated) Assets Statutory deposits 2,332,794 2,332,794 Fixed assets Property and equipment 4,048,360 4,048,360 Investment properties 2,915,574 2,915,574 Prepaid lease payments 167, ,813 7,131,747 7,131,747 Goodwill 303, ,647 Intangible assets 264, ,791 Interest in associates 1,580,272 1,580,272 Deferred tax assets 145, ,524 Investments in debt and equity securities 130,571, ,571,536 Securities purchased under resale agreements 119, ,279 Amounts due from group companies 29,348 29,348 Insurance debtors 2,030,782 2,030,782 Reinsurers share of contract provisions 2,437,071 (11,771) 2,425,300 Policyholder account assets in respect of unit-linked products 3,729,117 3,729,117 Other debtors 5,252,836 5,252,836 Pledged deposits at banks 187, ,677 Deposits at banks with original maturity more than three months 17,520,847 17,520,847 Cash and cash equivalents 17,735,080 17,735, ,372,348 (11,771) 191,360,

6 1 BASIS OF PREPARATION (Continued) Changes in Accounting Policies and Restatement (Continued) The effects of the above change in accounting policy on the condensed consolidated statement of financial position as at 31 December 2011 are summarized below (Continued) : 1 As at 31 December 2011 (Originally stated) As at 31 December 2011 Adjustment (Restated) Liabilities Life contract liabilities 91,195,983 91,195,983 Unearned premium provisions 4,808,347 (166,715) 4,641,632 Provision for outstanding claims 9,208,802 9,208,802 Investment contract liabilities 31,368,490 31,368,490 Deferred tax liabilities 557, ,891 Interest-bearing notes 11,040,734 11,040,734 Securities sold under repurchase agreements 19,618,855 19,618,855 Amounts due to group companies 36,763 36,763 Insurance creditors 2,855,056 2,855,056 Other payables and accrual 3,477,250 3,477,250 Current taxation 296, ,282 Insurance protection fund 33,848 33, ,498,301 (166,715) 174,331,586 Net assets 16,874, ,944 17,028,991 Capital and reserves attributable to the owners of the Company Share capital 85,264 85,264 Reserves 11,349, ,944 11,504,376 11,434, ,944 11,589,640 Non-controlling interests 5,439,351 5,439,351 Total equity 16,874, ,944 17,028, China Taiping Insurance Holdings Company Limited 2012 Interim Report

7 1 BASIS OF PREPARATION (Continued) Changes in Accounting Policies and Restatement (Continued) The effects of the above change in accounting policy on the condensed consolidated statement of financial position as at 1 January 2011 are summarized below: 1 As at 1 January 2011 (Originally stated) As at 1 January 2011 Adjustment (Restated) Assets Statutory deposits 1,466,793 1,466,793 Fixed assets Property and equipment 3,280,857 3,280,857 Investment properties 1,304,112 1,304,112 Prepaid lease payments 693, ,751 5,278,720 5,278,720 Goodwill 303, ,647 Intangible assets 261, ,408 Interest in associates 1,179,096 1,179,096 Deferred tax assets 141, ,609 Investments in debt and equity securities 102,948, ,948,026 Securities purchased under resale agreements 53,471 53,471 Amounts due from group companies 9,257 9,257 Insurance debtors 1,348,755 1,348,755 Reinsurers share of contract provisions 2,048,350 (10,660) 2,037,690 Policyholder account assets in respect of unit-linked products 4,909,273 4,909,273 Other debtors 6,590,021 6,590,021 Pledged deposits at banks 160, ,613 Deposits at banks with original maturity more than three months 11,495,414 11,495,414 Cash and cash equivalents 16,289,214 16,289, ,483,667 (10,660) 154,473,

8 1 BASIS OF PREPARATION (Continued) Changes in Accounting Policies and Restatement (Continued) The effects of the above change in accounting policy on the condensed consolidated statement of financial position as at 1 January 2011 are summarized below (Continued) : 1 As at 1 January 2011 (Originally stated) As at 1 January 2011 Adjustment (Restated) Liabilities Life contract liabilities 60,391,614 60,391,614 Unearned premium provisions 4,067,314 (113,276) 3,954,038 Provision for outstanding claims 7,638,859 7,638,859 Investment contract liabilities 36,278,241 36,278,241 Deferred tax liabilities 1,491,467 1,491,467 Interest-bearing notes 10,231,074 10,231,074 Securities sold under repurchase agreements 9,829,946 9,829,946 Amounts due to group companies 1,113,915 1,113,915 Insurance creditors 1,865,265 1,865,265 Other payables and accrual 2,567,830 2,567,830 Current taxation 476, ,005 Insurance protection fund 50,264 50, ,001,794 (113,276) 135,888,518 Net assets 18,481, ,616 18,584,489 Capital and reserves attributable to the owners of the Company Share capital 85,181 85,181 Reserves 12,627, ,616 12,729,822 12,712, ,616 12,815,003 Non-controlling interests 5,769,486 5,769,486 Total equity 18,481, ,616 18,584, China Taiping Insurance Holdings Company Limited 2012 Interim Report

9 1 BASIS OF PREPARATION (Continued) Changes in Accounting Policies and Restatement (Continued) Impact on basic earnings per share 1 Basic earnings per share before adjustment Adjustment arising from change in accounting policy Six months ended 30 June cents cents Reported basic earnings per share Impact on diluted earnings per share Diluted earnings per share before adjustment Adjustment arising from change in accounting policy Six months ended 30 June cents cents Reported diluted earnings per share

10 1 BASIS OF PREPARATION (Continued) Changes in Accounting Policies and Restatement (Continued) The Group has not early applied the following amendments, standards and interpretations that have been issued but not yet effective. 1 HKFRSs (Amendments) Annual Improvements Cycle 1 1 HKFRS 7 (Amendments) Disclosures Offsetting Financial Assets and Financial Liabilities HKFRS 9 and HKFRS 7 (Amendments) Mandatory Effective Date of HKFRS 9 and Transition Disclosures HKFRS 9 Financial Instruments HKFRS 10, HKFRS 11 and HKFRS 12 (Amendments) Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance 1 1 HKFRS 10 Consolidated Financial Statements HKFRS 11 Joint Arrangements HKFRS 12 Disclosure of Interests in Other Entities HKFRS 13 Fair Value Measurement HKAS 1 (Amendments) Presentation of Items of Other Comprehensive Income HKAS 19 (Revised 2011) Employment benefit HKAS 27 (Revised 2011) Separate Financial Statements HKAS 28 (Revised 2011) Investments in Associates and Joint Ventures HKAS 32 (Amendments) Offsetting Financial Assets and Financial Liabilities HK(IFRIC) Int 20 Stripping Costs in the Production Phase of a Surface Mine Note: 1 Effective for annual periods beginning on or after 1 January Effective for annual periods beginning on or after 1 January Effective for annual periods beginning on or after 1 July Effective for annual periods beginning on or after 1 January 2014 The directors of the Company are in the process of assessing the impact of these standards, amendments and interpretation on the results and the financial position of the Group China Taiping Insurance Holdings Company Limited 2012 Interim Report

11 2 OPERATING SEGMENTS The Group is organized primarily based on different types of businesses. The information reported to the Board, being the chief operating decision maker, for the purpose of resources allocation and performance assessment, are prepared and reported on such basis. Accordingly, the Group s operating segments are detailed as follows: Life business; Property and casualty business; Re business; and Other businesses which comprised the asset management business, intermediary business, pension and group life business. Information regarding the above segments is reported below. Management monitors the operating results of the Group s business units separately for the purpose of performance assessment

12 2 OPERATING SEGMENTS (Continued) 2 (a) Segmental income statement for the six months ended 30 June 2012 Life Property and casualty (a) For the six months ended 30 June 2012 Other businesses Intersegment elimination and adjustment Re Total Income Gross premiums written 23,656,929 5,073,323 2,127, ,924 (43,443) 31,411,365 Policy fees 77,723 77,723 Less: Premiums ceded to reinsurers and retrocessionaires 23,734,652 5,073,323 2,127, ,924 (43,443) 31,489,088 (93,269) (779,839) (229,193) (192,416) (1,294,717) Net premiums written and policy fees 23,641,383 4,293,484 1,898, ,508 (43,443) 30,194,371 Change in unearned premium provisions, net of re 20,800 (556,914) (329,961) (57,952) (924,027) Net earned premiums and policy fees 23,662,183 3,736,570 1,568, ,556 (43,443) 29,270,344 Net investment income (note (i)) (i) 3,167, , ,065 69,960 (15,608) 3,652,759 Net realized investment losses (note (ii)) (ii) (301,904) (31,025) (7,060) (2,231) (342,220) Net unrealized investment (losses)/ gains and impairment (note (iii)) (iii) (832,019) 97, (8,275) 3,475 (738,359) Other income 108,132 15, ,055 (146,493) 180,084 Other gains/(losses) 3,146 7,484 (36,605) 2,559 (23,416) Segment income 25,807,426 4,100,004 1,682, ,624 (202,069) 31,999,192 Benefits, losses and expenses Net policyholders benefits (4,078,431) (1,850,278) (1,222,458) (160,775) (7,311,942) Net commission expenses (1,897,999) (266,280) (480,629) (21,706) 92,913 (2,573,701) Administrative and other expenses (2,666,941) (1,553,220) (38,549) (398,274) 102,467 (4,554,517) Change in life contract liabilities, net of re (16,144,026) (37,210) (16,181,236) (24,787,397) (3,669,778) (1,741,636) (617,965) 195,380 (30,621,396) Profit/(loss) from operations 1,020, ,226 (59,429) (6,341) (6,689) 1,377,796 Share of results of associates 71,609 16,215 87,824 Finance costs (221,974) (27,073) (462) (41,492) 462 (290,539) Profit/(loss) before taxation 869, ,153 (59,891) (31,618) (6,227) 1,175,081 Income tax (charge)/credit (80,620) (86,104) (15,724) (7,080) (2,177) (191,705) Profit/(loss) after taxation 789, ,049 (75,615) (38,698) (8,404) 983,376 Non-controlling interests (446,704) Profit attributable to owners 536,672 Segment revenue (including gross premiums written and policy fees) and segment profit/(loss) represent the revenue and profit/(loss) earned by each segment which is the measure reported to the Board for the purpose of resources allocation and assessment of segment performance. 22 China Taiping Insurance Holdings Company Limited 2012 Interim Report

13 2 OPERATING SEGMENTS (Continued) (a) Segmental income statement for the six months ended 30 June 2012 (Continued) 2 (a) Life Property and casualty For the six months ended 30 June 2012 Other businesses Intersegment elimination and adjustment Re Total Note (i): Net investment income (i) Interest income from debt securities Held-to-maturity 1,849,296 19,264 89,287 1,049 1,958,896 Available-for-sale 371, ,197 36,949 23, ,028 Held-for-trading ,692 Loans and receivables 345,102 27,799 10,029 5, ,980 Dividend income from equity securities Available-for-sale 98,280 8,718 1,985 1, ,563 Held-for-trading Dividend income from investment funds Available-for-sale 12,017 7, ,633 Held-for-trading Bank deposits and other interest income 631,306 79,341 13,785 37,672 (4,820) 757,284 Net rentals receivable from investment properties 22,194 30, (10,788) 42,425 Net interest (expenses)/income on securities sold/purchased under repurchase/resale agreements (162,182) (36) 1,999 3 (160,216) 3,167, , ,065 69,960 (15,608) 3,652,759 Note (ii): Net realized investment gains/ (losses) (ii) Debt securities Available-for-sale ,253 20,454 2,390 46,341 Held-for-trading 2, , ,932 Equity securities Available-for-sale (474,680) (47,342) (31,374) (5,351) (558,747) Held-for-trading Investment funds Available-for-sale 170,182 (7,361) (79) ,812 Held-for-trading (301,904) (31,025) (7,060) (2,231) (342,220)

14 2 OPERATING SEGMENTS (Continued) (a) Segmental income statement for the six months ended 30 June 2012 (Continued) 2 (a) Life Property and casualty For the six months ended 30 June 2012 Other businesses Intersegment elimination and adjustment Re Total Note (iii): Net unrealized investment gains/ (losses) and impairment (iii) Debt securities Held-for-trading 323 1, ,287 Equity securities Held-for-trading (394) (394) Investment funds Held-for-trading 142 (76) 66 Surplus on revaluation of investment properties 35, ,680 3,390 3, ,420 Impairment loss recognized on available-forsale equity securities and investment funds (867,894) (3,541) (4,488) (7,815) (883,738) (832,019) 97, (8,275) 3,475 (738,359) 24 China Taiping Insurance Holdings Company Limited 2012 Interim Report

15 2 OPERATING SEGMENTS (Continued) (b) Segmental statement of financial position as at 30 June (b) Life Property and casualty 30 June 2012 Other businesses Intersegment elimination and adjustment Re Total Statutory deposits 1,471, ,837 34, ,998 2,381,961 Property and equipment 2,588, ,276 85,323 47,611 99,746 3,721,173 Investment properties 2,379,014 1,508,600 78,150 (444,262) 3,521,502 Prepaid lease payments 62, , ,090 Debt securities (note (i)) (i) 113,571,378 5,848,833 4,599,846 1,058, ,078,129 Equity securities (note (ii)) (ii) 7,277, ,880 94, ,154 (10,741) 8,046,415 Investment funds (note (iii)) (iii) 6,149, ,293 42,966 54,366 6,878,887 Cash and bank deposits 46,018,194 5,310,601 1,930,550 1,800,877 55,060,222 Goodwill 303, ,647 Intangible assets 3, , ,650 Interest in associates 1,463,002 20, ,509 1,608,859 Reinsurers share of contract provisions 142,020 1,561, , ,702 2,594,956 Policyholder account assets in respect of unit-linked products 3,572,125 3,572,125 Other segment assets 5,987,983 1,833,885 1,533, ,928 (904,302) 9,189,459 Segment assets 190,683,133 18,677,605 9,128,276 4,467,056 (568,995) 222,387,075 Life contract liabilities 106,666, , ,824,701 Unearned premium provisions 257,985 3,825,460 1,328, ,083 5,764,826 Provision for outstanding claims 197,637 4,742,305 4,598, ,162 9,678,172 Investment contract liabilities 27,773, ,008 28,244,435 Interest-bearing notes 8,770, ,662 1,355,992 10,985,273 Securities sold under repurchase agreements 30,607,449 1,226, ,716 32,065,825 Deferred tax liabilities 951,832 51,764 2, ,784 1,033,323 Other segment liabilities 3,656,480 2,752, ,942 1,732,304 (637,515) 8,127,767 Segment liabilities 178,881,556 13,457,407 6,552,541 4,443,549 (610,731) 202,724,322 Non-controlling interests (6,696,853) Net assets attributable to the owners of the Company 12,965,900 Segment assets and segment liabilities represent the assets/ liabilities recorded by each segment which is the measure reported to the Board for the purpose of resources allocation and assessment of segment performance

16 2 OPERATING SEGMENTS (Continued) (b) Segmental statement of financial position as at 30 June 2012 (Continued) 2 (b) Note (i): Debt securities (i) Life Property and casualty 30 June 2012 Other businesses Intersegment elimination and adjustment Re Total By category: Held-to-maturity 80,595, ,753 3,221,151 46,662 84,685,635 Available-for-sale 19,800,494 3,976, , ,470 25,462,178 Held-for-trading 11,912 20,028 39,051 70,991 Loans and receivables 13,175,815 1,037, , ,889 14,859, ,571,378 5,848,833 4,599,846 1,058, ,078,129 By class: Central governments and central banks 31,946, , , ,050 33,369,843 Public sector entities 12,863, ,740 84,639 13,669,396 Banks and other financial institutions 44,956,723 2,633,999 2,295, ,781 50,123,470 Corporate entities 23,805,121 1,898,970 1,667, ,602 27,915,420 Note (ii): Equity securities (ii) 113,571,378 5,848,833 4,599,846 1,058, ,078,129 By category: Available-for-sale 7,277, ,880 94, ,204 (10,741) 8,034,465 Held-for-trading 11,950 11,950 7,277, ,880 94, ,154 (10,741) 8,046,415 By class: Public sector entities Banks and other financial institutions 75,213 49,532 5, ,306 Corporate entities 7,277, ,667 45, ,461 (10,741) 7,915,977 Note (iii): Investment funds (iii) 7,277, ,880 94, ,154 (10,741) 8,046,415 By category: Available-for-sale 6,148, ,294 13,569 49,425 6,660,112 Held-for-trading ,999 29,397 4, ,775 6,149, ,293 42,966 54,366 6,878,887 By class: Banks and other financial institutions 6,149, ,352 23,140 6,789,754 Corporate entities 19,826 54,366 74,192 Others 14,941 14,941 6,149, ,293 42,966 54,366 6,878, China Taiping Insurance Holdings Company Limited 2012 Interim Report

17 2 OPERATING SEGMENTS (Continued) 2 (c) Segmental income statement for the six months ended 30 June 2011 Life (c) For the six months ended 30 June 2011 (Restated) Property and casualty Other businesses Intersegment elimination and adjustment Re Total Income Gross premiums written 21,002,227 3,966,864 1,861, ,302 27,047,259 Policy fees 111, ,496 Less: Premiums ceded to reinsurers and retrocessionaires 21,113,723 3,966,864 1,861, ,302 27,158,755 (151,345) (696,866) (269,830) (43,023) (1,161,064) Net premiums written and policy fees 20,962,378 3,269,998 1,592, ,279 25,997,691 Change in unearned premium provisions, net of re 47,580 (154,259) (327,683) (94,637) (528,999) Net earned premiums and policy fees 21,009,958 3,115,739 1,264,353 78,642 25,468,692 Net investment income (note (i)) (i) 2,343, , ,180 26,873 (1,653) 2,709,269 Net realized investment gains/ (losses) (note (ii)) (ii) 378,910 92,957 (18,516) 12, ,159 Net unrealized investment (losses)/ gains and impairment (note (iii)) (iii) (82,894) 52,962 (5,841) (2,999) (38,772) Other income 83,807 6, ,219 (161,881) 142,307 Other (losses)/gains (35,401) 38,365 82,407 (3,539) 81,832 Segment income 23,697,433 3,515,575 1,455, ,004 (163,534) 28,829,487 Benefits, losses and expenses Net policyholders benefits (2,942,712) (1,698,797) (788,292) (27,800) (5,457,601) Net commission expenses (1,849,195) (156,231) (402,511) (20,483) 108,139 (2,320,281) Administrative and other expenses (2,449,953) (1,261,426) (36,370) (282,815) 51,859 (3,978,705) Change in life contract liabilities, net of re (15,695,252) (15,695,252) (22,937,112) (3,116,454) (1,227,173) (331,098) 159,998 (27,451,839) Profit/(loss) from operations 760, , ,836 (6,094) (3,536) 1,377,648 Share of results of associates (1,586) 5,740 4,154 Finance costs (211,962) (26,021) (40,087) (278,070) Profit/(loss) before taxation 546, , ,836 (40,441) (3,536) 1,103,732 Income tax credit/(charge) 22,391 (58) (3,784) (3,956) (7) 14,586 Profit/(loss) after taxation 569, , ,052 (44,397) (3,543) 1,118,318 Non-controlling interests (325,878) Profit attributable to owners 792,440 Segment revenue (including gross premiums written and policy fees) and segment profit/(loss) represent the revenue and profit/(loss) earned by each segment which is the measure reported to the Board for the purpose of resources allocation and assessment of segment performance

18 2 OPERATING SEGMENTS (Continued) (c) Segmental income statement for the six months ended 30 June 2011 (Continued) 2 (c) Life For the six months ended 30 June 2011 (Restated) Property and casualty Other businesses Intersegment elimination and adjustment Re Total Note (i): Net investment income (i) Interest income from debt securities Held-to-maturity 1,359,983 23,820 81,646 2,665 1,468,114 Available-for-sale 309,552 80,955 29,207 12, ,306 Held-for-trading , ,550 Loans and receivables 132,390 8, ,126 Dividend income from equity securities Available-for-sale 58,834 10,923 9,517 4,149 83,423 Held-for-trading 1, ,003 Dividend income from investment funds Available-for-sale 151,614 9, ,427 Held-for-trading 6 1,364 1,370 Bank deposits and other interest income 385,625 47,549 6,569 5, ,375 Net rentals receivable from investment properties 28, (1,653) 27,108 Net interest (expenses)/income on securities sold/purchased under repurchase/resale agreements (56,552) (1,209) (57,533) 2,343, , ,180 26,873 (1,653) 2,709,269 Note (ii): Net realized investment gains/ (losses) (ii) Debt securities Held-to-maturity 1,655 1,655 Available-for-sale 3,176 16,963 10,789 14,030 44,958 Held-for-trading 16,057 1,165 1,546 (515) 18,253 Equity securities Available-for-sale 312,616 82,421 (32,310) (40) 362,687 Held-for-trading (7,583) (1,101) (8,684) Investment funds Available-for-sale 54,644 (7,592) (196) (192) 46,664 Held-for-trading ,910 92,957 (18,516) 12, , China Taiping Insurance Holdings Company Limited 2012 Interim Report

19 2 OPERATING SEGMENTS (Continued) (c) Segmental income statement for the six months ended 30 June 2011 (Continued) 2 (c) Life For the six months ended 30 June 2011 (Restated) Property and casualty Other businesses Intersegment elimination and adjustment Re Total Note (iii): Net unrealized investment gains/ (losses) and impairment (iii) Debt securities Held-for-trading , ,141 Equity securities Held-for-trading (1,040) (1,040) Investment funds Held-for-trading (576) (844) (1,420) Surplus on revaluation of investment properties 52,231 3,960 56,191 Impairment loss recognized on available-for-sale equity securities and investment funds (83,026) (11,151) (1,467) (95,644) (82,894) 52,962 (5,841) (2,999) (38,772)

20 2 OPERATING SEGMENTS (Continued) (d) Segmental statement of financial position as at 31 December (d) Life Property and casualty 31 December 2011 (Restated) Other businesses Intersegment elimination and adjustment Re Total Statutory deposits 1,480, ,669 33, ,375 2,332,794 Property and equipment 2,815, ,602 85,470 50, ,895 4,048,360 Investment properties 2,023,896 1,389,854 74,760 (572,936) 2,915,574 Prepaid lease payments 63, , ,813 Debt securities (note (i)) (i) 105,395,247 5,839,732 4,120, , ,230,210 Equity securities (note (ii)) (ii) 7,667, , , ,811 (12,300) 8,668,884 Investment funds (note (iii)) (iii) 5,391, ,439 43,866 22,232 5,672,442 Cash and bank deposits 28,078,965 3,905,669 1,535,459 1,923,511 35,443,604 Goodwill 303, ,647 Intangible assets 3, , ,791 Interest in associates 1,399,099 55, ,509 1,580,272 Reinsurers share of contract provisions 168,772 1,436, ,370 66,717 2,425,300 Policyholder account assets in respect of unit-linked products 3,729,117 3,729,117 Other segment assets 5,349,380 1,469,338 1,066, ,024 (620,517) 7,577,769 Segment assets 163,564,045 16,257,812 8,133,770 3,727,244 (322,294) 191,360,577 Life contract liabilities 91,073, ,177 91,195,983 Unearned premium provisions 308,986 3,169, , ,755 4,641,632 Provision for outstanding claims 227,012 4,623,942 4,286,130 71,718 9,208,802 Investment contract liabilities 30,945, ,140 31,368,490 Interest-bearing notes 8,819, ,450 1,357,759 11,040,734 Securities sold under repurchase agreements 19,002, ,750 19,618,855 Deferred tax liabilities 510,911 31, , ,891 Other segment liabilities 2,935,814 2,477, ,691 1,571,792 (606,828) 6,699,199 Segment liabilities 153,823,509 11,783,025 5,552,940 3,763,614 (591,502) 174,331,586 Non-controlling interests (5,439,351) Net assets attributable to the owners of the Company 11,589,640 Segment assets and segment liabilities represent the assets/ liabilities recorded by each segment which is the measure reported to the Board for the purpose of resources allocation and assessment of segment performance. 30 China Taiping Insurance Holdings Company Limited 2012 Interim Report

21 2 OPERATING SEGMENTS (Continued) (d) Segmental statement of financial position as at 31 December 2011 (Continued) 2 (d) Life Property and casualty 31 December 2011 (Restated) Other businesses Intersegment elimination and adjustment Re Total Note (i): Debt securities (i) By category: Held-to-maturity 79,962, ,283 2,651,975 35,539 83,475,816 Available-for-sale 16,106,353 4,132, , ,836 21,846,261 Held-for-trading 11,655 45,376 40,403 97,434 Loans and receivables 9,326, , , ,585 10,810, ,395,247 5,839,732 4,120, , ,230,210 By class: Central governments and central banks 28,921, , , ,155 30,339,583 Public sector entities 9,012, ,766 37,005 23,436 9,609,539 Banks and other financial institutions 44,376,714 2,723,009 2,105, ,826 49,460,008 Corporate entities 23,084,402 1,985,803 1,349, ,946 26,821, ,395,247 5,839,732 4,120, , ,230,210 Note (ii): Equity securities (ii) By category: Available-for-sale 7,667, , ,883 92,403 (12,300) 8,648,476 Held-for-trading 20,408 20,408 7,667, , , ,811 (12,300) 8,668,884 By class: Public sector entities 32,796 32,796 Banks and other financial institutions 79, ,024 14, ,481 Corporate entities 7,667, , ,063 98,533 (12,300) 8,358,607 7,667, , , ,811 (12,300) 8,668,

22 2 OPERATING SEGMENTS (Continued) (d) Segmental statement of financial position as at 31 December 2011 (Continued) 2 (d) Life Property and casualty 31 December 2011 (Restated) Other businesses Intersegment elimination and adjustment Re Total Note (iii): Investment funds (iii) By category: Available-for-sale 5,391, ,439 14,561 5,620,474 Held-for-trading ,305 22,232 51,968 5,391, ,439 43,866 22,232 5,672,442 By class: Banks and other financial institutions 5,391, ,931 23,299 18,503 5,621,638 Corporate entities 20,567 3,729 24,296 Others 26,508 26,508 5,391, ,439 43,866 22,232 5,672, China Taiping Insurance Holdings Company Limited 2012 Interim Report

23 2 OPERATING SEGMENTS (Continued) Geographical distribution: More than 95% (30 June 2011: 95%) of the Group s segment revenue is derived from its operations in the PRC (other than Hong Kong and Macau). The Group s information about its non-current assets by geographical location of the assets is detailed below: 2 95% 95% Hong Kong and Macau As at 30 June 2012 PRC (other than Hong Kong and Macau) Total Non-current assets (other than financial instruments, deferred tax assets, rights arising under contracts and interest in associates) 1,983,614 5,992,448 7,976,062 Hong Kong and Macau As at 31 December 2011 PRC (other than Hong Kong and Macau) Total Non-current assets (other than financial instruments, deferred tax assets, rights arising under contracts and interest in associates) Information about major customers: 1,870,782 5,829,403 7,700,185 There were no customers for the six months ended 30 June 2012 and 2011 contributing over 10% of the total gross premiums written and policy fees of the Group. 10%

24 3 GROSS PREMIUMS WRITTEN AND POLICY FEES Principal activities The principal activity of the Company is investment holding. The principal activities of the Company s subsidiaries are the underwriting of direct life business, property and casualty business and all classes of re business. Apart from these, the Group also carries on operations in pensions, asset management and intermediaries. 3 Life and investment contracts Six months ended 30 June 2012 Property and casualty contracts Re contracts Other businesses group life contracts Total Gross premiums written 23,656,929 5,073,323 2,127, ,481 31,411,365 Policy fees 77,723 77,723 23,734,652 5,073,323 2,127, ,481 31,489,088 Life and investment contracts Six months ended 30 June 2011 Property and casualty contracts Re contracts Other businesses group life contracts Total Gross premiums written 21,002,227 3,966,864 1,861, ,302 27,047,259 Policy fees 111, ,496 21,113,723 3,966,864 1,861, ,302 27,158, China Taiping Insurance Holdings Company Limited 2012 Interim Report

25 4 INVESTMENT INCOME 4 Six months ended 30 June Net investment income (note (a)) (a) 3,652,759 2,709,269 Net realized investment (losses)/gains (b) (note (b)) (342,220) 466,159 Net unrealized investment losses (c) and impairment (note (c)) (738,359) (38,772) 2,572,180 3,136,656 (a) Net investment income (a) Interest income from (i) debt securities (note (i)): Held-to-maturity 1,958,896 1,468,114 Available-for-sale 533, ,306 Held-for-trading 1,692 3,550 Loans and receivables 387, ,126 2,881,596 2,046,096 Dividend income from (ii) equity securities (note (ii)) : Available-for-sale 110,563 83,423 Held-for-trading 589 2, ,152 85,426 Dividend income from (iii) investment funds (note (iii)) : Available-for-sale 19, ,427 Held-for-trading 885 1,370 20, ,797 Bank deposits and other interest income 757, ,375 Gross rentals receivable from investment properties 43,821 27,862 Less: direct outgoings (1,396) (754) Net rentals receivable from investment properties 42,425 27,108 Net interest expenses on securities sold/purchased under repurchase/ resale agreements (160,216) (57,533) Notes: 3,652,759 2,709,269 Six months ended 30 June (i) Interest income from debt securities: (i) Listed 396, ,991 Unlisted 2,485,335 1,701,105 2,881,596 2,046,096 (ii) Dividend income from equity securities: (ii) Listed 109,589 83,991 Unlisted 1,563 1, ,152 85,426 (iii) Dividend income from investment funds: (iii) Listed 4,682 90,511 Unlisted 15,836 72,286 20, ,

26 4 INVESTMENT INCOME (Continued) 4 Six months ended 30 June (b) Net realized investment (losses)/gains (b) Debt securities (note (i)) : (i) Held-to-maturity 1,655 Available-for-sale 46,341 44,958 Held-for-trading 6,932 18,253 53,273 64,866 Equity securities (note (ii)) : (ii) Available-for-sale (558,747) 362,687 Held-for-trading 442 (8,684) (558,305) 354,003 Investment funds (note (iii)) : (iii) Available-for-sale 162,812 46,664 Held-for-trading ,812 47,290 (342,220) 466,159 Notes: Six months ended 30 June (i) (ii) (iii) Net realized investment gains on debt securities: (i) Listed 49,921 43,823 Unlisted 3,352 21,043 53,273 64,866 Net realized investment (losses)/gains on (ii) equity securities: Listed (558,305) 346,484 Unlisted 7,519 (558,305) 354,003 Net realized investment gains/(losses) on (iii) investment funds: Listed 19,913 (8,539) Unlisted 142,899 55, ,812 47, China Taiping Insurance Holdings Company Limited 2012 Interim Report

27 4 INVESTMENT INCOME (Continued) 4 Six months ended 30 June (c) Net unrealized investment (losses)/gains and impairment (c) Debt securities (note (i)) : (i) Held-for-trading 2,287 3,141 Equity securities (note (ii)) : (ii) Held-for-trading (394) (1,040) Investment funds (note (iii)) : (iii) Held-for-trading 66 (1,420) Surplus on revaluation of investment properties Impairment loss recognized on: Available-for-sale equity securities and investment funds 143,420 56,191 (883,738) (95,644) (738,359) (38,772) Notes: Six months ended 30 June (i) Net unrealized investment gains on debt securities: (i) Listed 2,287 2,026 Unlisted 1,115 (ii) 2,287 3,141 Net unrealized investment (ii) losses on equity securities: Listed (394) (1,040) (iii) (394) (1,040) Net unrealized investment (iii) gains/(losses) on investment funds: Listed (102) (1,744) Unlisted (1,420)

28 5 OTHER INCOME/OTHER (LOSSES)/GAINS (a) Other income 5 (a) Six months ended 30 June Fee income from provision of asset management services 30,587 20,967 Fee income from provision of intermediary services 20,965 17,077 Fee income from provision of pension administration services 49,425 44,300 Interest income on secured loans to policyholders 48,992 26,950 Others 30,115 33, , ,307 (b) Other (losses)/gains (b) Six months ended 30 June Net (loss)/gain on disposal of property and equipment (213) 256 Net impairment losses written back on property and equipment 11,638 11,585 Net exchange (loss)/gain (32,360) 67,270 (Recognition)/reversal of net impairment losses on debtors and other debtors (2,481) 2,721 (23,416) 81, China Taiping Insurance Holdings Company Limited 2012 Interim Report

29 6 NET POLICYHOLDERS BENEFITS AND NET COMMISSION EXPENSES (a) Net policyholders benefits 6 (a) Life and investment contracts Six months ended 30 June 2012 Property and casualty contracts Re contracts Other businesses group life contracts Total Claims and claim adjustment expenses 387,450 2,135,344 1,286, ,277 4,030,312 Less: Reinsurers and Retrocessionaires share (66,565) (285,066) (63,783) (72,805) (488,219) 320,885 1,850,278 1,222, ,472 3,542,093 Surrenders 1,789, ,789,293 Annuity, dividends and maturity payments 1,441,647 12,217 1,453,864 Interest allocated to investment contracts 526, ,692 4,078,431 1,850,278 1,222, ,775 7,311,942 Life and investment contracts Six months ended 30 June 2011 Property and casualty contracts Re contracts Other businesses group life contracts Total Claims and claim adjustment expenses 427,440 1,704,009 1,020,686 35,114 3,187,249 Less: Reinsurers and retrocessionaires share (77,518) (5,212) (232,394) (7,314) (322,438) 349,922 1,698, ,292 27,800 2,864,811 Surrenders 1,144,173 1,144,173 Annuity, dividends and maturity payments 799, ,001 Interest allocated to investment contracts 649, ,616 2,942,712 1,698, ,292 27,800 5,457,

30 6 NET POLICYHOLDERS BENEFITS AND NET COMMISSION EXPENSES (Continued) (b) Net commission expenses 6 (b) Life and investment contracts Six months ended 30 June 2012 Property and casualty contracts Re contracts Other businesses group life contracts Total Gross commission expenses 1,871, , ,726 42,544 2,909,290 Re commission income (10,240) (255,286) (40,097) (29,966) (335,589) Net commission expenses 1,861, , ,629 12,578 2,573,701 Life and investment contracts Six months ended 30 June 2011 Property and casualty contracts Re contracts Other businesses group life contracts Total Gross commission expenses 1,800, , ,240 20,483 2,600,913 Re commission income (25,281) (218,622) (36,729) (280,632) Net commission expenses 1,775, , ,511 20,483 2,320, China Taiping Insurance Holdings Company Limited 2012 Interim Report

31 7 PROFIT BEFORE TAXATION Profit before taxation is arrived at after charging: 7 Six months ended 30 June (a) Finance costs: (a) Interest on interest-bearing notes 289, ,070 Interest on other loan 1, , ,070 (b) Staff costs (including directors (b) remuneration): Salaries, wages and other benefits 2,630,665 2,214,350 Employee share-based compensation benefits 2,694 4,017 Contributions to defined contribution retirement plans 144, ,257 2,777,368 2,360,624 (c) Other items: (c) Auditor s remuneration 3,738 3,398 Depreciation of property and equipment 112, ,959 Operating lease charges in respect of properties 214, ,687 Share of associates taxation charge 28, Amortization of prepaid lease payments 1,800 6,303 Amortization of intangible assets

32 8 INCOME TAX CHARGE/(CREDIT) Income tax charge/(credit) in the consolidated income statement represents: 8 Six months ended 30 June Current tax Hong Kong Profits Tax Provision for the period 10,203 12,774 10,203 12,774 Current tax Outside Hong Kong Provision for the period 193,215 4,049 (Over)/under-provision in respect of prior years (22,595) ,620 4,069 Deferred tax credit Origination and reversal of temporary differences 10,882 (31,429) Income tax charge/(credit) 191,705 (14,586) The provision for Hong Kong Profits Tax represents the Group s estimated Hong Kong Profits Tax liability calculated at the standard tax rate of 16.5% (2011: 16.5%) on its assessable profits from property and casualty, re, asset management and intermediary businesses except for its assessable profits from the business of re of offshore risks, which is calculated at 8.25% (2011: 8.25%), one-half of the standard tax rate. Taxation outside Hong Kong for subsidiaries outside Hong Kong is calculated at the rates prevailing in the relevant jurisdictions. Under the Enterprise Income Tax Law of the PRC, the enterprise income tax rates for domestic companies in different provinces in the PRC of 25% (2011: range from 24% to 25%). At 30 June 2012, the Group did not recognize deferred tax assets in respect of tax losses of approximately $1,036,000,000 (31 December 2011: $1,160,000,000). Of this amount, $690,800,000 (31 December 2011: $753,000,000) will expire after 5 years under current tax legislation of PRC, while the remaining tax losses do not expire under current tax legislation. 16.5% 16.5% 8.25% 8.25% 25% 24% 25% 1,036,000,000 1,160,000, ,800, ,000, China Taiping Insurance Holdings Company Limited 2012 Interim Report

33 9 DIVIDENDS (a) No interim dividend in respect of the interim period was declared during the interim period ended 30 June 2012 (2011: $Nil). (b) No final dividend in respect of the previous financial year was declared or paid during the interim period (2011: $Nil). 10 EARNINGS PER SHARE (a) Basic earnings per share The calculation of basic earnings per share is based on the profit attributable to owners of the Company of $536,672,000 (2011: $792,440,000 as restated) and the weighted average number of ordinary shares in issue during the period, excluding shares held under the Share Award Scheme, of 1,703,886,094 (2011: 1,702,406,892). (b) Diluted earnings per share The calculation of diluted earnings per share is based on the profit attributable to owners of the Company of $536,672,000 (2011: $792,440,000 as restated) and the weighted average number of 1,713,504,165 ordinary shares (2011: 1,714,148,521) after adjusting for the effects of the potential dilution from ordinary shares issuable under the Company s Share Option Scheme and Share Award Scheme. (c) Reconciliations 9 (a) (b) 10 (a) 536,672, ,440,000 1,703,886,094 1,702,406,892 (b) 536,672, ,440,000 1,713,504,165 1,714,148,521 (c) Weighted average number of ordinary shares less shares held for Share Award Scheme used in calculating basic earnings per share At 30 June Number of Number of shares shares 1,703,886,094 1,702,406,892 Effect of Share Option Scheme 8,081,271 10,173,429 Effect of Share Award Scheme 1,536,800 1,568,200 Weighted average number of ordinary shares used in calculating diluted earnings per share 1,713,504,165 1,714,148,

34 11 FIXED ASSETS The Group leases out investment properties under operating leases. The leases typically run for an initial period of two to three years, with an option to renew the lease after that date at which time all terms are renegotiated. Lease payments are usually reviewed every two to three years to reflect market rentals. None of the leases includes contingent rentals. During the period, certain own-use buildings had been leased out under operating leases. Accordingly, a carrying amount of land and buildings of $300,729,000 has been transferred to investment properties at fair value of $415,799,000, based on revaluation by independent external property valuer. The valuation was arrived at by reference to market evidence of transaction prices for similar properties. The time period in which the Group s total future minimum lease payments under non-cancellable operating leases are receivable is as follows: ,729, ,799,000 At 30 June At 31 December Within 1 year 100,663 73,522 In the second to fifth year inclusive 117,095 96,230 After 5 years 9,537 10, , ,607 The investment properties of the Group as at 30 June 2012 were fair valued by external valuers. The valuation was arrived at by reference to market evidence of transaction price for similar properties. A revaluation surplus of $143,420,000 (30 June 2011: $56,191,000) has been recognized in the consolidated income statement during the period. 143,420,000 56,191, China Taiping Insurance Holdings Company Limited 2012 Interim Report

35 12 INVESTMENTS IN DEBT AND EQUITY SECURITIES 12 At 30 June 2012 At 31 December 2011 Held-to-maturity (Note (i)) : (i) Debt securities 84,685,635 83,475,816 Available-for-sale (Note (ii)) : (ii) Debt securities 25,462,178 21,846,261 Equity securities 8,034,465 8,648,476 Investment funds 6,660,112 5,620,474 40,156,755 36,115,211 Held-for-trading (Note (iii)) : (iii) Debt securities 70,991 97,434 Equity securities 11,950 20,408 Investment funds 218,775 51, , ,810 Loans and receivables (Note (iv)) : (iv) Debt securities 14,859,325 10,810,699 Total 140,003, ,571,

36 12 INVESTMENTS IN DEBT AND EQUITY SECURITIES (Continued) 12 Central governments and central banks Public sector entities Banks and other financial institutions Corporate entities Others Total (i) Held-to-maturity (i) At 30 June 2012 Listed in Hong Kong 172, , ,055 Listed outside Hong Kong 103,114 1,420,454 2,660,581 4,184,149 Unlisted 22,088,072 42,480,567 15,363,792 79,932,431 22,191,186 44,073,513 18,420,936 84,685,635 Fair value of securities 23,046,345 43,984,299 18,482,687 85,513,331 Market value of listed securities 111,925 1,658,928 3,212,772 4,983,625 At 31 December 2011 Listed in Hong Kong 160, , ,157 Listed outside Hong Kong 103,623 1,119,662 2,641,770 3,865,055 Unlisted 22,221,676 41,901,346 15,138,582 79,261,604 22,325,299 43,181,217 17,969,300 83,475,816 Fair value of securities 23,113,590 42,713,111 17,689,723 83,516,424 Market value of listed securities 111,275 1,272,869 2,869,935 4,254,079 The held-to-maturity debt securities include an amount of $370,118,000 (31 December 2011: $275,639,000) which is maturing within one year. None of the securities are past due or impaired. The fair value of the unlisted debt securities were determined by reference to recent market transactions or in accordance with generally accepted pricing models including discounted cash flow technique. 370,118, ,639, China Taiping Insurance Holdings Company Limited 2012 Interim Report

37 12 INVESTMENTS IN DEBT AND EQUITY SECURITIES (Continued) 12 Central governments and central banks Public sector entities Banks and other financial institutions Corporate entities Others Total (ii) Available-for-sale (ii) At 30 June 2012 Listed debt securities in Hong Kong 41, , , ,219 outside Hong Kong 3,591,878 27,450 1,707,034 5,449,523 10,775,885 Listed equity securities in Hong Kong , , ,600 outside Hong Kong 22,181 5,002,194 5,024,375 Listed investment funds outside Hong Kong 4,029,373 18,729 4,048,102 Unlisted debt securities 6,291,120 4,198,655 3,842,299 14,332,074 Unlisted equity securities, at cost 2,533,490 2,533,490 Unlisted investment funds 2,566,374 30,695 14,941 2,612,010 9,924,478 27,582 12,749,967 17,439,787 14,941 40,156,755 Level 1 Quoted market price 3,633,358 27,582 8,537,743 11,063,998 23,262,681 Level 2 Valuation techniques using observable inputs 6,291,120 4,212,224 3,842,299 14,941 14,360,584 Level 3 Valuation techniques with significant unobservable inputs Fair value of securities 9,924,478 27,582 12,749,967 14,906,297 14,941 37,623,265 Market value of listed securities 3,633,358 27,582 5,984,938 11,033,303 20,679,181 Current 6, , , ,831 Non-current 9,918,323 27,450 12,149,516 17,052,694 14,941 39,162,924 9,924,478 27,582 12,749,967 17,439,787 14,941 40,156,755 The unlisted equity securities are issued by private entities incorporated in the PRC. They are measured at cost at the end of the reporting period as the management considers that their fair values cannot be measured reliably. The Group invests in open-ended or close-ended investment funds with underlying assets of equity, bond or composite funds. The fair values of the unlisted debt securities were determined by reference to recent market transactions or in accordance with generally accepted pricing models including discounted cash flow technique