Form 20-F þ | Form 40-F o |
Yes o | No þ |
Exhibit | Description | |||
99.1 | Announcement, dated March 22, 2011 |
China Life Insurance Company Limited | ||||
(Registrant) | ||||
By: | /s/ Wan Feng | |||
(Signature) | ||||
March 22, 2011
|
Name: | Wan Feng | ||
Title: | President and Executive Director |
1 | The Persistency Rate for long-term individual policy is an important operating
performance indicator for life insurance
companies. It measures the ratio of in-force policies in a pool of policies after a certain
period of time. It refers to the proportion of policies that are still effective during the
designated month in the pool of policies whose issue date was 14 or 26 months ago. |
|
2 | The Surrender Rate = current surrender payment/(premium reserve balance of life
insurance at start of year or long-term
health insurance + current premium of life insurance or long-term health insurance). |
2
3
4
I | Analysis of Major Items of Consolidated Statement of Comprehensive Income |
(1) | Total Revenues |
For the year ended 31 December | RMB million |
2010 | 2009 | |||||||
Net premiums earned |
318,088 | 275,077 | ||||||
Individual life insurance business |
302,753 | 261,694 | ||||||
Group life insurance business |
468 | 189 | ||||||
Short-term insurance business |
14,867 | 13,194 | ||||||
Investment income |
48,872 | 38,890 | ||||||
Net realized gains on financial assets |
15,841 | 21,244 | ||||||
Net fair value gains through income |
280 | 1,449 | ||||||
Other income |
2,757 | 2,630 | ||||||
Total |
385,838 | 339,290 | ||||||
1 | Individual Life Insurance Business |
||
During the Reporting Period, net premiums earned from individual life insurance
business increased by 15.7% from 2009. This was primarily due to the increase of
first-year regular premiums and renewal premiums. |
|||
2 | Group Life Insurance Business |
||
During the Reporting Period, net premiums earned from group life insurance business
increased by 147.6% from 2009. This was primarily due to a considerable increase in
premiums from group term life insurance products and whole life insurance products. |
5
3 | Short-term Insurance Business |
||
During the Reporting Period, net premiums earned from short-term insurance business increased
by 12.7% from 2009. This was primarily due to our increased efforts on the development for
short-term accident insurance business. |
Gross written premiums | ||||||||
2010 | 2009 | |||||||
Individual Life Insurance Business |
302,781 | 261,715 | ||||||
First-year business |
174,808 | 156,293 | ||||||
Single |
122,659 | 116,586 | ||||||
First-year regular |
52,149 | 39,707 | ||||||
Renewal business |
127,973 | 105,422 | ||||||
Group Life Insurance Business |
473 | 190 | ||||||
First-year business |
469 | 183 | ||||||
Single |
459 | 178 | ||||||
First-year regular |
10 | 5 | ||||||
Renewal business |
4 | 7 | ||||||
Short-term Insurance Business |
14,975 | 14,065 | ||||||
Short-term accident insurance business |
7,657 | 7,076 | ||||||
Short-term health insurance business |
7,318 | 6,989 | ||||||
Total |
318,229 | 275,970 | ||||||
For the year ended 31 December | RMB million |
2010 | 2009 | |||||||
Investment income from securities at fair value through income |
126 | 335 | ||||||
Investment income from available-for-sale securities |
20,173 | 16,688 | ||||||
Investment income from held-to-maturity securities |
10,538 | 9,882 | ||||||
Investment income from term deposits |
16,363 | 10,805 | ||||||
Investment income from loans |
1,583 | 1,172 | ||||||
Other investment income |
89 | 8 | ||||||
Total |
48,872 | 38,890 | ||||||
6
1 | Investment Income from Securities at Fair Value through Income |
||
During the Reporting Period, investment income from securities at fair value through income
decreased by 62.4% from 2009. This was primarily due to a decrease in interest income from
debt securities of financial assets at fair value through income. |
|||
2 | Investment Income from Available-for-Sale Securities |
||
During the Reporting Period, investment income from available-for-sale securities
increased by 20.9% from 2009. This was primarily due to an increase in dividends from
funds and an increase in interest income from debt securities in available-for-sale securities. |
|||
3 | Investment Income from Held-to-Maturity Securities |
||
During the Reporting Period, investment income from held-to-maturity securities increased by
6.6% from 2009. This was primarily due to the increased volume of investment in debt
securities. |
|||
4 | Investment Income from Term Deposits |
||
During the Reporting Period, investment income from term deposits increased by 51.4% from
2009. This was primarily due to the increased volume of deposits and an increase in the
floating interest rates of deposits. |
|||
5 | Investment Income from Loans |
||
During the Reporting Period, investment income from loans increased by 35.1% from 2009. This
was primarily due to the increased volume of policy loans business. |
7
(2) | Benefits, Claims and Expenses |
For the year ended 31 December | RMB million |
2010 | 2009 | |||||||
Insurance benefits and claims |
||||||||
Individual life insurance business |
270,341 | 228,968 | ||||||
Group life insurance business |
551 | 262 | ||||||
Short-term insurance business |
8,740 | 7,808 | ||||||
Investment contracts benefits |
1,950 | 2,142 | ||||||
Policyholder dividends resulting from participation in profits |
13,224 | 14,487 | ||||||
Underwriting and policy acquisition costs |
27,256 | 22,936 | ||||||
Administrative expenses |
20,285 | 18,719 | ||||||
Other operating expenses |
3,655 | 2,390 | ||||||
Statutory insurance fund contribution |
599 | 537 | ||||||
Total |
346,601 | 298,249 | ||||||
1 | Individual Life Insurance Business |
||
During the Reporting Period, insurance benefits and claims attributable to individual life
insurance business increased by 18.1% from 2009. This was primarily due to an increase in
business volume and the accumulation of insurance liabilities. |
|||
2 | Group Life Insurance Business |
||
During the Reporting Period, insurance benefits and claims attributable to group life
insurance business increased by 110.3% from 2009. This was primarily due to an increase in
claims payments resulting from an increase in the volume of one-year term insurance products. |
|||
3 | Short-term Insurance Business |
||
During the Reporting Period, insurance benefits and claims attributable to short-term
insurance business increased by 11.9% from 2009. This was primarily due to an increase in
business volume. |
8
(3) | Profit Before Income Tax |
For the year ended 31 December | RMB million |
2010 | 2009 | |||||||
Individual life insurance business |
37,690 | 39,769 | ||||||
Group life insurance business |
740 | 467 | ||||||
Short-term insurance business |
385 | 420 | ||||||
Other |
2,193 | 1,089 | ||||||
Total |
41,008 | 41,745 | ||||||
9
1 | Individual Life Insurance Business |
||
During the Reporting Period, profit before income tax of the Company in the individual
life insurance business decreased by 5.2% from 2009. This was primarily due to an increase
in underwriting cost. |
|||
2 | Group Life Insurance Business |
||
During the Reporting Period, profit before income tax of the Company in the group life
insurance business increased by 58.5% from 2009. This was primarily due to favorable
adjustment of group insurance business structure. |
|||
3 | Short-term Insurance Business |
||
During the Reporting Period, profit before income tax of the Company in the short-term
insurance business decreased by 8.3% from 2009. This was primarily due to increased market
competition and an increase in claims payments. |
(4) | Income Tax |
(5) | Net Profit |
10
II | Analysis of Major Items of Consolidated Statement of Financial Position |
(1) | Major Assets |
31 December | 31 December | |||||||
2010 | 2009 | |||||||
Investment assets |
1,336,245 | 1,172,145 | ||||||
Term deposits |
441,585 | 344,983 | ||||||
Held-to-maturity securities |
246,227 | 235,099 | ||||||
Available-for-sale securities |
548,121 | 517,499 | ||||||
Securities at fair value through income |
9,762 | 9,133 | ||||||
Cash and cash equivalents |
47,854 | 36,197 | ||||||
Loans |
36,543 | 23,081 | ||||||
Statutory deposits restricted |
6,153 | 6,153 | ||||||
Other assets |
74,334 | 54,112 | ||||||
Total |
1,410,579 | 1,226,257 | ||||||
11
31 December 2010 | 31 December 2009 | |||||||||||||||
Amount | Percentage | Amount | Percentage | |||||||||||||
Cash and cash equivalents |
47,854 | 3.58 | % | 36,197 | 3.09 | % | ||||||||||
Term deposits |
441,585 | 33.05 | % | 344,983 | 29.43 | % | ||||||||||
Bonds |
608,192 | 45.51 | % | 582,315 | 49.68 | % | ||||||||||
Funds |
96,329 | 7.21 | % | 76,367 | 6.52 | % | ||||||||||
Common stocks |
99,580 | 7.45 | % | 103,038 | 8.79 | % | ||||||||||
Other investment form |
42,705 | 3.20 | % | 29,245 | 2.49 | % | ||||||||||
Total |
1,336,245 | 100 | % | 1,172,145 | 100 | % | ||||||||||
12
(2) | Major Liabilities |
31 December | 31 December | |||||||
2010 | 2009 | |||||||
Insurance contracts |
1,018,135 | 818,164 | ||||||
Investment contracts |
70,171 | 67,326 | ||||||
Securities sold under agreements to repurchase |
23,065 | 33,553 | ||||||
Policyholder dividends payable |
52,828 | 54,587 | ||||||
Annuity and other insurance balances payable |
8,275 | 5,721 | ||||||
Deferred tax liabilities |
11,776 | 16,361 | ||||||
Other liabilities |
15,854 | 17,769 | ||||||
Total |
1,200,104 | 1,013,481 | ||||||
13
(3) | Equity Holders Equity |
III | Analysis of Cash Flow |
(1) | Liquidity Sources |
14
(2) | Liquidity Uses |
(3) | Consolidated Cash Flows |
For the year ended 31 December | RMB million |
2010 | 2009 | |||||||
Net cash inflow from operating activities |
178,600 | 149,700 | ||||||
Net cash outflow from investing activities |
(135,937 | ) | (163,751 | ) | ||||
Net cash (outflow)/inflow from financing activities |
(30,681 | ) | 16,167 | |||||
Foreign currency losses on cash and cash equivalents |
(325 | ) | (4 | ) | ||||
Net increase of cash and cash equivalents |
11,657 | 2,112 | ||||||
15
IV | Solvency Ratio |
31 December | 31 December | |||||||
2010 | 2009 | |||||||
Actual capital |
123,769 | 147,119 | ||||||
Minimum capital |
58,385 | 48,459 | ||||||
Solvency ratio |
211.99 | % | 303.59 | % |
16
Note | 2010 | 2009 | ||||||||
RMB million | RMB million | |||||||||
REVENUES |
||||||||||
Gross written premiums |
318,229 | 275,970 | ||||||||
Less: premiums ceded to reinsurers |
(177 | ) | (158 | ) | ||||||
Net written premiums |
318,052 | 275,812 | ||||||||
Net change in unearned premium reserves |
36 | (735 | ) | |||||||
Net premiums earned |
318,088 | 275,077 | ||||||||
Investment income |
1 | 48,872 | 38,890 | |||||||
Net realised gains on financial assets |
2 | 15,841 | 21,244 | |||||||
Net fair value gains through income |
3 | 280 | 1,449 | |||||||
Other income |
2,757 | 2,630 | ||||||||
Total revenues |
385,838 | 339,290 | ||||||||
BENEFITS, CLAIMS AND EXPENSES |
||||||||||
Insurance benefits and claims expenses |
||||||||||
Life insurance death and other benefits |
4 | (71,237 | ) | (74,858 | ) | |||||
Accident and health claims and
claim adjustment expenses |
4 | (8,740 | ) | (7,808 | ) | |||||
Increase in insurance contracts liabilities |
4 | (199,655 | ) | (154,372 | ) | |||||
Investment contract benefits |
5 | (1,950 | ) | (2,142 | ) | |||||
Policyholder dividends resulting
from participation in profits |
(13,224 | ) | (14,487 | ) | ||||||
Underwriting and policy acquisition costs |
(27,256 | ) | (22,936 | ) | ||||||
Administrative expenses |
(20,285 | ) | (18,719 | ) | ||||||
Other operating expenses |
(3,655 | ) | (2,390 | ) | ||||||
Statutory insurance fund contribution |
6 | (599 | ) | (537 | ) | |||||
Total benefits, claims and expenses |
(346,601 | ) | (298,249 | ) | ||||||
Share of results of associates |
7 | 1,771 | 704 | |||||||
Profit before income tax |
8 | 41,008 | 41,745 | |||||||
Income tax |
9 | (7,197 | ) | (8,709 | ) | |||||
Net profit |
33,811 | 33,036 | ||||||||
Attributable to: |
||||||||||
equity holders of the Company |
33,626 | 32,881 | ||||||||
non-controlling interests |
185 | 155 | ||||||||
Basic and diluted earnings per share |
10 | RMB | 1.19 | RMB | 1.16 | |||||
3 | The Group refers to China Life Insurance Company Limited and its
subsidiaries in this part. |
17
Note | 2010 | 2009 | ||||||||
RMB million | RMB million | |||||||||
Other comprehensive income/(loss) |
||||||||||
Fair value (losses)/gains on available-for-sale securities |
(13,666 | ) | 39,470 | |||||||
Amount transferred to net profit from other comprehensive income |
(15,763 | ) | (21,040 | ) | ||||||
Portion of fair value (losses)/gains on available-for-sale
securities allocated to participating policyholders |
7,983 | (3,999 | ) | |||||||
Share of other comprehensive loss of associates |
(131 | ) | (70 | ) | ||||||
Others |
(1 | ) | | |||||||
Income tax relating to components of other comprehensive income/(loss) |
9 | 5,362 | (3,607 | ) | ||||||
Other comprehensive (loss)/income for the year |
(16,216 | ) | 10,754 | |||||||
Total comprehensive income for the year |
17,595 | 43,790 | ||||||||
Attributable to: |
||||||||||
equity holders of the Company |
17,423 | 43,626 | ||||||||
non-controlling interests |
172 | 164 | ||||||||
18
1 | INVESTMENT INCOME |
For the year ended 31 December | ||||||||
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
Debt securities |
||||||||
held-to-maturity securities |
10,538 | 9,882 | ||||||
available-for-sale securities |
14,962 | 13,580 | ||||||
at fair value through income |
86 | 297 | ||||||
Equity securities |
||||||||
available-for-sale securities |
5,211 | 3,108 | ||||||
at fair value through income |
40 | 38 | ||||||
Bank deposits |
16,363 | 10,805 | ||||||
Loans |
1,583 | 1,172 | ||||||
Securities purchased under agreements to resell |
89 | 8 | ||||||
Total |
48,872 | 38,890 | ||||||
2 | NET REALISED GAINS ON FINANCIAL ASSETS |
For the year ended 31 December | ||||||||
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
Debt securities |
||||||||
Net realised gains |
508 | 3,146 | ||||||
Reversal of impairment |
76 | 200 | ||||||
Subtotal |
584 | 3,346 | ||||||
Equity securities |
||||||||
Net realised gains |
17,028 | 20,248 | ||||||
Impairment |
(1,771 | ) | (2,350 | ) | ||||
Subtotal |
15,257 | 17,898 | ||||||
Total |
15,841 | 21,244 | ||||||
19
Net realised gains on financial assets are from available-for-sale securities. |
During the year ended 31 December 2010, the Group recognized impairment expense of RMB 1,771
million (2009: RMB 2,350 million) of available-for-sale securities for which the Group
determined that objective evidence of impairment existed. |
3 | NET FAIR VALUE GAINS THROUGH INCOME |
For the year ended 31 December | ||||||||
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
Debt securities |
403 | (250 | ) | |||||
Equity securities |
(486 | ) | 1,726 | |||||
Stock appreciation rights |
363 | (27 | ) | |||||
Total |
280 | 1,449 | ||||||
4 | INSURANCE BENEFITS AND CLAIMS EXPENSES |
Gross | Ceded | Net | ||||||||||
RMB million | RMB million | RMB million | ||||||||||
For the year ended 31 December 2010 |
||||||||||||
Life insurance death and other benefits |
71,255 | (18 | ) | 71,237 | ||||||||
Accident and health claims and claim
adjustment expenses |
8,835 | (95 | ) | 8,740 | ||||||||
Increase in insurance contracts liabilities |
199,673 | (18 | ) | 199,655 | ||||||||
Total insurance benefits and claims |
279,763 | (131 | ) | 279,632 | ||||||||
For the year ended 31 December 2009 |
||||||||||||
Life insurance death and other benefits |
74,876 | (18 | ) | 74,858 | ||||||||
Accident and health claims and claim
adjustment expenses |
7,909 | (101 | ) | 7,808 | ||||||||
Increase in insurance contracts liabilities |
154,374 | (2 | ) | 154,372 | ||||||||
Total insurance benefits and claims |
237,159 | (121 | ) | 237,038 | ||||||||
5 | INVESTMENT CONTRACT BENEFITS |
Benefits of investment contract are mainly the interest credited to investment contracts and
universal life contracts. |
20
6 | STATUTORY INSURANCE FUND |
As required by CIRC Order [2008] No. 2, all insurance companies have to pay statutory
insurance fund contribution to the CIRC from 1 January 2009. The Group is subject to
statutory insurance fund contribution, (i) at 0.15% and 0.05% of premiums and accumulated
policyholder deposits from life policies with guaranteed benefits and life policies without
guaranteed benefits, respectively. (ii) at 0.8% and 0.15% of premiums from short-term health
policies and long-term health policies, respectively. (iii) at 0.8% of premiums from accident
insurance contracts, at 0.08% and 0.05% of accumulated policyholder deposits from accident
investment contracts with guaranteed benefits and without guaranteed benefits, respectively.
When the accumulated statutory insurance fund contributions reach 1% of the Groups total
assets, no additional contribution to the statutory insurance fund is required. |
7 | INVESTMENTS IN ASSOCIATES |
|
Group |
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
As at 1 January |
8,470 | 7,891 | ||||||
Additional capital contribution to associates (i) (ii) |
5,777 | | ||||||
Transfer in associates (ii) |
5,123 | | ||||||
Share of results |
1,771 | 704 | ||||||
Other equity movements |
(131 | ) | (70 | ) | ||||
Dividend received |
(118 | ) | (55 | ) | ||||
As at 31 December |
20,892 | 8,470 | ||||||
The Groups investments in associates are unlisted except for Sino-Ocean which is listed in
Hong Kong. As at 31 December 2010, the stock price of Sino-Ocean is HK$5.19 per share. The
Groups share of associates assets and liabilities at 31 December 2010 and revenue and
profit/(loss) after tax for the year then ended are as followings: |
||
Assets and liabilities of associates |
Country of | Interest | |||||||||||||||
Name | incorporation | held | Assets | Liabilities | ||||||||||||
RMB million | RMB million | |||||||||||||||
Guangdong Development Bank (GDB) |
PRC | 20 | % | 165,979 | 154,356 | |||||||||||
China Life Property & Casualty
Insurance Company Limited (CLP&C) |
PRC | 40 | % | 6,042 | 4,870 | |||||||||||
Sino-Ocean Land Holdings Limited
(Sino-Ocean) (ii) |
Hong Kong | 24.07 | % | 22,409 | 14,312 | |||||||||||
Total as at 31 December 2010 |
194,429 | 173,547 | ||||||||||||||
GDB |
PRC | 20 | % | 136,344 | 128,859 | |||||||||||
CLP&C |
PRC | 40 | % | 4,855 | 3,876 | |||||||||||
China Life Insurance Brokers (CIB) |
PRC | 49 | % | 6 | | |||||||||||
Total as at 31 December 2009 |
141,205 | 132,735 | ||||||||||||||
21
Profit/(Loss) | ||||||||
Name | Revenue | after tax | ||||||
RMB million | RMB million | |||||||
GDB |
4,392 | 1,237 | ||||||
CLP&C |
3,558 | 245 | ||||||
Sino-Ocean |
3,303 | 289 | ||||||
Total for the year ended 31 December 2010 |
11,252 | 1,771 | ||||||
GDB |
3,023 | 673 | ||||||
CLP&C |
2,946 | 32 | ||||||
CIB |
| (1 | ) | |||||
Total for the year ended 31 December 2009 |
5,969 | 704 | ||||||
Company | 2010 | 2009 | ||||||
RMB million | RMB million | |||||||
As at 1 January |
7,278 | 7,278 | ||||||
Additional capital contribution to GDB (i) |
2,999 | | ||||||
Investment in Sino-Ocean (ii) |
7,907 | | ||||||
Reduce capital from CIB |
(6 | ) | | |||||
As at 31 December |
18,178 | 7,278 | ||||||
(i) | In July 2010, the Group injected additional capital of RMB2,999 million in cash, at a price
of RMB4.38 per share to GDB, representing shares offered to all existing owners of GDB on a
pro-rata basis. The Group holds 3.08 billion shares of GDB, and its interest in GDB remains
at 20% of GDBs registered capital. |
|
(ii) | On 27 December 2009, the Group purchased 934 million shares of Sino-Ocean at the total cost
of HKD5,819 million. As a result of this acquisition, the Group held 16.57% of the total
outstanding shares of Sino-Ocean as at 31 December 2009. |
On 12 January 2010, the Group exchanged certain of its Hong Kong listed equity investments at
their market value on the transaction date of RMB2,784 million for additional 423 million shares of Sino-Ocean. As a result of this acquisition, the Group held 24.08% equity interest
of Sino-Ocean and recognized it as an associate. In 2010, the ESOP (Employee Stock Option
Plan) of Sino-Ocean was partially exercised. As at 31 December 2010, the Companys ownership
in Sino-Ocean was diluted to 24.07%. |
22
8 | PROFIT BEFORE INCOME TAX |
Profit before income tax is stated after charging the following: |
For the year ended 31 December | ||||||||
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
Employee salary and welfare cost |
8,240 | 7,773 | ||||||
Housing benefits |
507 | 472 | ||||||
Contribution to the defined contribution pension plan |
1,344 | 1,182 | ||||||
Depreciation and amortisation |
1,802 | 1,560 | ||||||
Interest expenses on securities sold under the agreements to repurchase |
304 | 111 | ||||||
Exchange loss |
392 | 28 | ||||||
Auditors remuneration |
65 | 71 |
9 | TAXATION |
Deferred income tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets against current tax liabilities and when the deferred
income tax relate to the same fiscal authority. |
(a) | The amount of taxation charged to the net profit represents |
For the year ended 31 December | ||||||||
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
Current taxation Enterprise income tax |
6,420 | 6,299 | ||||||
Deferred taxation |
777 | 2,410 | ||||||
Taxation charges |
7,197 | 8,709 | ||||||
(b) | The reconciliation between the Groups effective tax rate and the statutory tax
rate of 25% in the PRC (for the year ended 31 December 2009: 25%) is as follows: |
For the year ended 31 December | ||||||||||||
2010 | 2009 | |||||||||||
RMB million | RMB million | |||||||||||
Profit before income tax |
41,008 | 41,745 | ||||||||||
Tax computed at the statutory tax rate |
10,252 | 10,436 | ||||||||||
Non-taxable income |
(i) | (3,413 | ) | (2,627 | ) | |||||||
Additional tax liability from expenses not deductible for tax purposes |
(i) | 317 | 520 | |||||||||
Unused tax losses |
41 | 25 | ||||||||||
Other |
| 355 | ||||||||||
Income taxes at effective tax rate |
7,197 | 8,709 | ||||||||||
(i) | Non-taxable income mainly includes interest income from government bonds and fund.
Expenses not deductible for tax purposes mainly include commission, brokerage and
donation expenses that do not meet the criteria for deduction set by relevant tax
regulations. |
23
(c) | As at 31 December 2010, deferred income taxation was calculated in full on temporary
differences under the liability method using a principal taxation rate of 25%. The movements
in deferred tax assets and liabilities during the year are as follows: |
Deferred tax |
|||
Group |
Insurance | Investment | Others | Total | |||||||||||||
RMB million | RMB million | RMB million | RMB million | |||||||||||||
(i) | (ii) | (iii) | ||||||||||||||
As at 1 January 2009 |
(9,452 | ) | (1,473 | ) | 581 | (10,344 | ) | |||||||||
(Charged)/credited to net profit |
(79 | ) | (2,404 | ) | 73 | (2,410 | ) | |||||||||
(Charged)/credited to other
comprehensive income |
||||||||||||||||
Available-for-sale securities |
| (4,607 | ) | | (4,607 | ) | ||||||||||
Portion of fair value gains on
available-for-sale securities
allocated to participating
policyholders |
1,000 | | | 1,000 | ||||||||||||
Subtotal |
1,000 | (4,607 | ) | | (3,607 | ) | ||||||||||
As at 31 December 2009 |
(8,531 | ) | (8,484 | ) | 654 | (16,361 | ) | |||||||||
As at 1 January 2010 |
(8,531 | ) | (8,484 | ) | 654 | (16,361 | ) | |||||||||
(Charged)/credited to net profit |
(604 | ) | (376 | ) | 203 | (777 | ) | |||||||||
(Charged)/credited to other
comprehensive income |
||||||||||||||||
Available-for-sale securities |
| 7,358 | | 7,358 | ||||||||||||
Portion of fair value losses
on available-for-sale Securities
allocated to participating
policyholders |
(1,996 | ) | | | (1,996 | ) | ||||||||||
Subtotal |
(1,996 | ) | 7,358 | | 5,362 | |||||||||||
As at 31 December 2010 |
(11,131 | ) | (1,502 | ) | 857 | (11,776 | ) | |||||||||
(i) | The deferred tax brought forward as at 1 January 2009 arising from the insurance
category represented mainly the tax impact of the change of long term insurance
contracts liabilities at 31 December 2008 due to change of accounting policy in 2009.
Change during the year is mainly related to the temporary difference of short duration
insurance contracts liabilities and policyholder dividend payables. |
|
(ii) | The deferred tax arising from the investment category is mainly related to the
temporary difference of unrealised gains/(losses) of available-for-sale securities and
securities at fair value through income; |
|
(iii) | The deferred tax arising from the other category is mainly related to the
temporary difference of employee salary and welfare cost payables. |
24
Company |
Insurance | Investment | Others | Total | |||||||||||||
RMB million | RMB million | RMB million | RMB million | |||||||||||||
As at 1 January 2009 |
(9,452 | ) | (1,460 | ) | 561 | (10,351 | ) | |||||||||
(Charged)/credited to net profit |
(79 | ) | (2,398 | ) | 49 | (2,428 | ) | |||||||||
(Charged)/credited to other
comprehensive income |
||||||||||||||||
Available-for-sale securities |
| (4,598 | ) | | (4,598 | ) | ||||||||||
Portion of fair value losses on
available-for-sale securities
allocated to participating
policyholders |
1,000 | | | 1,000 | ||||||||||||
Subtotal |
1,000 | (4,598 | ) | | (3,598 | ) | ||||||||||
As at 31 December 2009 |
(8,531 | ) | (8,456 | ) | 610 | (16,377 | ) | |||||||||
As at 1 January 2010 |
(8,531 | ) | (8,456 | ) | 610 | (16,377 | ) | |||||||||
(Charged)/credited to net profit |
(604 | ) | (378 | ) | 193 | (789 | ) | |||||||||
(Charged)/credited to other
comprehensive income |
||||||||||||||||
Available-for-sale securities |
| 7,334 | | 7,334 | ||||||||||||
Portion of fair value losses
on available-for-sale securities
allocated to participating
policyholders |
(1,996 | ) | | | (1,996 | ) | ||||||||||
Subtotal |
(1,996 | ) | 7,334 | | 5,338 | |||||||||||
As at 31 December 2010 |
(11,131 | ) | (1,500 | ) | 803 | (11,828 | ) | |||||||||
(d) | The analysis of deferred tax assets and deferred tax liabilities is as follows: |
||
Group |
As at 31 | As at 31 | |||||||
December | December | |||||||
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
Deferred tax assets: |
||||||||
deferred tax assets to be recovered after more than 12 months |
3,217 | 6,063 | ||||||
deferred tax assets to be recovered within 12 months |
617 | 592 | ||||||
Subtotal |
3,834 | 6,655 | ||||||
Deferred tax liabilities: |
||||||||
deferred tax liabilities to be settled after more than 12 months |
(15,262 | ) | (22,668 | ) | ||||
deferred tax liabilities to be settled within 12 months |
(348 | ) | (348 | ) | ||||
Subtotal |
(15,610 | ) | (23,016 | ) | ||||
Total net deferred income tax liabilities |
(11,776 | ) | (16,361 | ) | ||||
25
Company |
As at 31 | As at 31 | |||||||
December | December | |||||||
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
Deferred tax assets: |
||||||||
deferred tax assets to be recovered after more than 12 months |
3,161 | 6,020 | ||||||
deferred tax assets to be recovered within 12 months |
617 | 592 | ||||||
Subtotal |
3,778 | 6,612 | ||||||
Deferred tax liabilities: |
||||||||
deferred tax liabilities to be settled after more than 12 months |
(15,258 | ) | (22,641 | ) | ||||
deferred tax liabilities to be settled within 12 months |
(348 | ) | (348 | ) | ||||
Subtotal |
(15,606 | ) | (22,989 | ) | ||||
Total net deferred income tax liabilities |
(11,828 | ) | (16,377 | ) | ||||
10 | EARNINGS PER SHARE |
There is no difference between basic and diluted earnings per share. The basic and diluted
earnings per share for the year ended 31 December 2010 are based on the weighted average
number of 28,264,705,000 ordinary shares (for the year ended 31 December 2009:
28,264,705,000). |
26
As at 31 | As at 31 | |||||||
December | December | |||||||
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
ASSETS |
||||||||
Property, plant and equipment |
18,946 | 17,467 | ||||||
Investments in associates |
20,892 | 8,470 | ||||||
Held-to-maturity securities |
246,227 | 235,099 | ||||||
Loans |
36,543 | 23,081 | ||||||
Term deposits |
441,585 | 344,983 | ||||||
Statutory deposits restricted |
6,153 | 6,153 | ||||||
Available-for-sale securities |
548,121 | 517,499 | ||||||
Securities at fair value through income |
9,762 | 9,133 | ||||||
Accrued investment income |
18,193 | 14,208 | ||||||
Premiums receivable |
7,274 | 6,818 | ||||||
Reinsurance assets |
830 | 832 | ||||||
Other assets |
8,199 | 6,317 | ||||||
Cash and cash equivalents |
47,854 | 36,197 | ||||||
Total assets |
1,410,579 | 1,226,257 | ||||||
LIABILITIES AND EQUITY |
||||||||
Liabilities |
||||||||
Insurance contracts |
1,018,135 | 818,164 | ||||||
Investment contracts |
70,171 | 67,326 | ||||||
Securities sold under agreements to repurchase |
23,065 | 33,553 | ||||||
Policyholder dividends payable |
52,828 | 54,587 | ||||||
Annuity and other insurance balances payable |
8,275 | 5,721 | ||||||
Premiums received in advance |
1,880 | 1,804 | ||||||
Other liabilities |
13,746 | 11,978 | ||||||
Deferred tax liabilities |
11,776 | 16,361 | ||||||
Current income tax liabilities |
34 | 3,850 | ||||||
Statutory insurance fund |
194 | 137 | ||||||
Total liabilities |
1,200,104 | 1,013,481 | ||||||
Equity holders equity |
||||||||
Share capital |
28,265 | 28,265 | ||||||
Reserves |
100,512 | 102,787 | ||||||
Retained earnings |
79,933 | 80,020 | ||||||
Total equity holders equity |
208,710 | 211,072 | ||||||
Non-controlling interests |
1,765 | 1,704 | ||||||
Total equity |
210,475 | 212,776 | ||||||
Total liabilities and equity |
1,410,579 | 1,226,257 | ||||||
27
Attributable to equity holders | ||||||||||||||||||||
of the Company | Non- | |||||||||||||||||||
Retained | controlling | |||||||||||||||||||
Share capital | Reserves | earnings | interests | Total | ||||||||||||||||
RMB million | RMB million | RMB million | RMB million | RMB million | ||||||||||||||||
As at 1 January 2009 |
28,265 | 84,447 | 61,235 | 924 | 174,871 | |||||||||||||||
Net profit |
| | 32,881 | 155 | 33,036 | |||||||||||||||
Other comprehensive income for the
year |
| 10,745 | | 9 | 10,754 | |||||||||||||||
Total comprehensive income |
| 10,745 | 32,881 | 164 | 43,790 | |||||||||||||||
Transactions with owners |
||||||||||||||||||||
Capital contribution |
| | | 720 | 720 | |||||||||||||||
Appropriation to reserve |
| 7,595 | (7,595 | ) | | | ||||||||||||||
Dividends paid |
| | (6,501 | ) | | (6,501 | ) | |||||||||||||
Dividends to non-controlling interests |
| | | (104 | ) | (104 | ) | |||||||||||||
Total transactions with owners |
| 7,595 | (14,096 | ) | 616 | (5,885 | ) | |||||||||||||
As at 31 December 2009 |
28,265 | 102,787 | 80,020 | 1,704 | 212,776 | |||||||||||||||
28
Attributable to equity holders | ||||||||||||||||||||
of the Company | Non- | |||||||||||||||||||
Retained | controlling | |||||||||||||||||||
Share capital | Reserves | earnings | interests | Total | ||||||||||||||||
RMB million | RMB million | RMB million | RMB million | RMB million | ||||||||||||||||
As at 1 January 2010 |
28,265 | 102,787 | 80,020 | 1,704 | 212,776 | |||||||||||||||
Net profit |
| | 33,626 | 185 | 33,811 | |||||||||||||||
Other comprehensive income
for the year |
| (16,203 | ) | | (13 | ) | (16,216 | ) | ||||||||||||
Total comprehensive income |
| (16,203 | ) | 33,626 | 172 | 17,595 | ||||||||||||||
Appropriation to reserve |
| 13,928 | (13,928 | ) | | | ||||||||||||||
Dividends paid |
| | (19,785 | ) | | (19,785 | ) | |||||||||||||
Dividends to non-controlling
interests |
| | | (111 | ) | (111 | ) | |||||||||||||
Total transactions with owners |
| 13,928 | (33,713 | ) | (111 | ) | (19,896 | ) | ||||||||||||
As at 31 December 2010 |
28,265 | 100,512 | 79,933 | 1,765 | 210,475 | |||||||||||||||
29
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Profit before income tax: |
41,008 | 41,745 | ||||||
Adjustments for: |
||||||||
Investment income |
(48,872 | ) | (38,890 | ) | ||||
Net realised and unrealised gains on financial assets |
(16,121 | ) | (22,693 | ) | ||||
Insurance contracts |
199,978 | 155,252 | ||||||
Depreciation and amortisation |
1,802 | 1,560 | ||||||
Amortisation of premiums and discounts |
(5 | ) | 10 | |||||
Loss on foreign exchange |
392 | 28 | ||||||
Share of results of associates |
(1,771 | ) | (704 | ) | ||||
Changes in operating assets and liabilities: |
||||||||
Financial assets at fair value through income |
(809 | ) | 6,435 | |||||
Receivables and payables |
13,056 | 9,917 | ||||||
Income tax paid |
(10,236 | ) | (3,995 | ) | ||||
Interest received |
135 | 291 | ||||||
Dividends received |
43 | 40 | ||||||
Net cash inflow from operating activities |
178,600 | 149,700 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Sales and maturities: |
||||||||
Sales of debt securities |
38,245 | 95,197 | ||||||
Maturities of debt securities |
8,199 | 25,730 | ||||||
Sales of equity securities |
133,111 | 101,112 | ||||||
Property, plant and equipment |
240 | 420 | ||||||
Purchases: |
||||||||
Debt securities |
(74,324 | ) | (148,559 | ) | ||||
Equity securities |
(171,379 | ) | (149,523 | ) | ||||
Property, plant and equipment |
(4,849 | ) | (3,261 | ) | ||||
Additional capital contribution to associates |
(2,999 | ) | | |||||
Increase in term deposits, net |
(96,602 | ) | (116,711 | ) | ||||
Decrease in securities purchased under agreements to resell, net |
89 | 8 | ||||||
Interest received |
38,873 | 34,139 | ||||||
Dividends received |
5,321 | 3,159 | ||||||
Increase in policy loan, net |
(10,146 | ) | (5,155 | ) | ||||
Other |
284 | (307 | ) | |||||
Net cash outflow from investing activities |
(135,937 | ) | (163,751 | ) | ||||
30
2010 | 2009 | |||||||
RMB million | RMB million | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
(Decrease)/increase in investment in securities
sold under agreements to repurchase, net |
(10,488 | ) | 22,163 | |||||
Interest paid |
(297 | ) | (111 | ) | ||||
Contribution from non-controlling equity holders |
| 720 | ||||||
Dividends paid to the Companys equity holders |
(19,785 | ) | (6,501 | ) | ||||
Dividends paid to non-controlling interests |
(111 | ) | (104 | ) | ||||
Net cash (outflow)/inflow from financing activities |
(30,681 | ) | 16,167 | |||||
Foreign currency losses on cash and cash equivalents |
(325 | ) | (4 | ) | ||||
Net increase in cash and cash equivalents |
11,657 | 2,112 | ||||||
Cash and cash equivalents |
||||||||
Beginning of year |
36,197 | 34,085 | ||||||
End of year |
47,854 | 36,197 | ||||||
Analysis of balance of cash and cash equivalents |
||||||||
Cash at bank and in hand |
45,143 | 23,640 | ||||||
Short-term bank deposits |
2,711 | 12,557 |
31
1 | Operating segments |
(i) | Individual life insurance business (Individual life) |
||
Individual life insurance business relates primarily to the sale of long-term life
insurance contracts and universal life contracts which are mainly term life, whole
life, endowment and annuity products, to individuals and assumed individual reinsurance
contracts. |
|||
(ii) | Group life insurance business (Group life) |
||
Group life insurance business relates primarily to the sale of insurance contracts and investment
contracts, which are mainly term life, whole life and annuity products, to group entities. |
|||
(iii) | Short-term insurance business (Short-term)
|
||
Short-term insurance business relates primarily to the sale of short-term insurance
contracts, which are mainly the short-term accident and health insurance contracts. |
|||
(iv) | Corporate and other business (Corporate and other) |
||
Corporate and other business relates primarily to income and allocated costs of
insurance agency business in respect of the provision of services to China Life
Insurance (Group) Company, share of results of associates, income and expenses of
subsidiaries, unallocated income and expenditure of the Group. |
2 | Allocation basis of income and expenses |
|
Investment income, net realised gains on financial assets, net fair value gains through
income and foreign exchange losses within other operating expenses are allocated among
segments in proportion to each respective segments average liabilities of insurance
contracts and investment contracts at the beginning and end of the year. Administrative
expenses and certain other operating expenses are allocated among segments in proportion to
the unit cost of respective products in the different segments. Except for those arising
from investment contracts which can be allocated to the corresponding segments above, other
income and other operating expenses are presented in the Corporate & Other segment
directly. Income tax is not allocated. |
||
3 | Allocation basis of assets and liabilities |
|
Financial assets and securities sold under agreements to repurchase are allocated among
segments in proportion to each respective segments average liabilities of insurance
contracts and investment contracts at the beginning and end of the year. Insurance
liabilities are presented under the respective segments. The remaining assets and
liabilities are not allocated. |
32
For the year ended 31 December 2010 | ||||||||||||||||||||||||
Individual | Group | Short- | Corporate | |||||||||||||||||||||
life | life | term | & other | Elimination | Total | |||||||||||||||||||
(RMB million) | ||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Gross written premiums |
302,781 | 473 | 14,975 | | | 318,229 | ||||||||||||||||||
Term Life |
1,964 | 287 | | | | |||||||||||||||||||
Whole Life |
37,783 | 165 | | | | |||||||||||||||||||
Endowment |
220,505 | | | | | |||||||||||||||||||
Annuity |
42,529 | 21 | | | | |||||||||||||||||||
Net premiums earned |
302,753 | 468 | 14,867 | | | 318,088 | ||||||||||||||||||
Investment income |
45,535 | 2,691 | 448 | 198 | | 48,872 | ||||||||||||||||||
Net realised gains on financial assets |
14,738 | 871 | 145 | 87 | | 15,841 | ||||||||||||||||||
Net fair value gains through income |
247 | 14 | 2 | 17 | | 280 | ||||||||||||||||||
Other income |
614 | 244 | | 2,583 | (684 | ) | 2,757 | |||||||||||||||||
Including: inter-segment revenue |
| | | 684 | (684 | ) | | |||||||||||||||||
Segment revenues |
363,887 | 4,288 | 15,462 | 2,885 | (684 | ) | 385,838 | |||||||||||||||||
Benefits, claims and expenses |
||||||||||||||||||||||||
Insurance benefits and claims |
||||||||||||||||||||||||
Life insurance death and other benefits |
(70,872 | ) | (365 | ) | | | | (71,237 | ) | |||||||||||||||
Accident and health claims and claim
adjustment expenses |
| | (8,740 | ) | | | (8,740 | ) | ||||||||||||||||
Increase in insurance contracts
liabilities |
(199,469 | ) | (186 | ) | | | | (199,655 | ) | |||||||||||||||
Investment contract benefits |
(1,264 | ) | (686 | ) | | | | (1,950 | ) | |||||||||||||||
Policyholder dividends resulting from
participation in profits |
(12,277 | ) | (947 | ) | | | | (13,224 | ) | |||||||||||||||
Underwriting and policy acquisition costs |
(24,182 | ) | (88 | ) | (2,794 | ) | (192 | ) | | (27,256 | ) | |||||||||||||
Administrative expenses |
(14,927 | ) | (429 | ) | (2,952 | ) | (1,977 | ) | | (20,285 | ) | |||||||||||||
Other operating expenses |
(2,717 | ) | (833 | ) | (495 | ) | (294 | ) | 684 | (3,655 | ) | |||||||||||||
Including: Inter-segment expenses |
(640 | ) | (38 | ) | (6 | ) | | 684 | | |||||||||||||||
Statutory insurance fund contribution |
(489 | ) | (14 | ) | (96 | ) | | | (599 | ) | ||||||||||||||
Segment benefits, claims and expenses |
(326,197 | ) | (3,548 | ) | (15,077 | ) | (2,463 | ) | 684 | (346,601 | ) | |||||||||||||
Share of results of associates |
| | | 1,771 | | 1,771 | ||||||||||||||||||
Segment results |
37,690 | 740 | 385 | 2,193 | | 41,008 | ||||||||||||||||||
Income tax |
| | | | | (7,197 | ) | |||||||||||||||||
Net profit |
37,690 | 740 | 385 | 2,193 | | 33,811 | ||||||||||||||||||
Attributable to |
||||||||||||||||||||||||
equity holders of the Company |
33,626 | |||||||||||||||||||||||
non-controlling interests |
185 | |||||||||||||||||||||||
Unrealised losses from Available-for-sale securities included in
equity holders equity |
(15,088 | ) | (892 | ) | (148 | ) | (75 | ) | | (16,203 | ) | |||||||||||||
Depreciation and amortisation |
1,418 | 40 | 283 | 61 | | 1,802 |
33
As at 31 December 2010 | ||||||||||||||||||||||||
Individual | Group | Short- | Corporate | |||||||||||||||||||||
life | life | term | & other | Elimination | Total | |||||||||||||||||||
(RMB million) | ||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||
Financial assets (including cash
and cash equivalents) |
1,263,081 | 73,241 | 12,185 | 5,931 | | 1,354,438 | ||||||||||||||||||
Other |
719 | | 89 | 20,892 | | 21,700 | ||||||||||||||||||
Segment assets |
1,263,800 | 73,241 | 12,274 | 26,823 | | 1,376,138 | ||||||||||||||||||
Unallocated |
||||||||||||||||||||||||
Property, plant and equipment |
18,946 | |||||||||||||||||||||||
Other |
15,495 | |||||||||||||||||||||||
Total |
1,410,579 | |||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||
Insurance contracts |
1,008,201 | 695 | 9,239 | | | 1,018,135 | ||||||||||||||||||
Investment contracts |
15,664 | 54,507 | | | | 70,171 | ||||||||||||||||||
Securities sold under agreements
to repurchase |
21,199 | 1,253 | 208 | 405 | | 23,065 | ||||||||||||||||||
Other |
331 | 223 | | | | 554 | ||||||||||||||||||
Segment liabilities |
1,045,395 | 56,678 | 9,447 | 405 | | 1,111,925 | ||||||||||||||||||
Unallocated |
||||||||||||||||||||||||
Other |
88,179 | |||||||||||||||||||||||
Total |
1,200,104 | |||||||||||||||||||||||
34
For the year ended 31 December 2009 | ||||||||||||||||||||||||
Individual | Group | Short- | Corporate | |||||||||||||||||||||
life | life | term | & other | Elimination | Total | |||||||||||||||||||
(RMB million) | ||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Gross written premiums |
261,715 | 190 | 14,065 | | | 275,970 | ||||||||||||||||||
Term Life |
805 | 112 | | | | |||||||||||||||||||
Whole Life |
37,860 | 60 | | | | |||||||||||||||||||
Endowment |
184,841 | | | | | |||||||||||||||||||
Annuity |
38,209 | 18 | | | | |||||||||||||||||||
Net premiums earned |
261,694 | 189 | 13,194 | | | 275,077 | ||||||||||||||||||
Investment income |
35,693 | 2,614 | 408 | 175 | | 38,890 | ||||||||||||||||||
Net realised gains on financial assets |
19,522 | 1,430 | 222 | 70 | | 21,244 | ||||||||||||||||||
Net fair value gains through income |
1,330 | 97 | 16 | 6 | | 1,449 | ||||||||||||||||||
Other income |
283 | 331 | | 2,586 | (570 | ) | 2,630 | |||||||||||||||||
Including: inter-segment revenue |
| | | 570 | (570 | ) | | |||||||||||||||||
Segment revenues |
318,522 | 4,661 | 13,840 | 2,837 | (570 | ) | 339,290 | |||||||||||||||||
Benefits, claims and expenses |
||||||||||||||||||||||||
Insurance benefits and claims |
||||||||||||||||||||||||
Life insurance death and other benefits |
(74,416 | ) | (442 | ) | | | | (74,858 | ) | |||||||||||||||
Accident and health claims and claim
adjustment expenses |
| | (7,808 | ) | | | (7,808 | ) | ||||||||||||||||
Increase in insurance contracts liabilities |
(154,552 | ) | 180 | | | | (154,372 | ) | ||||||||||||||||
Investment contract benefits |
(560 | ) | (1,582 | ) | | | | (2,142 | ) | |||||||||||||||
Policyholder dividends resulting from
participation in profits |
(13,181 | ) | (1,306 | ) | | | | (14,487 | ) | |||||||||||||||
Underwriting and policy acquisition costs |
(20,881 | ) | (113 | ) | (1,877 | ) | (65 | ) | | (22,936 | ) | |||||||||||||
Administrative expenses |
(13,057 | ) | (779 | ) | (3,236 | ) | (1,647 | ) | | (18,719 | ) | |||||||||||||
Other operating expenses |
(1,702 | ) | (131 | ) | (387 | ) | (740 | ) | 570 | (2,390 | ) | |||||||||||||
Including: Inter-segment expenses |
(504 | ) | (37 | ) | (6 | ) | (23 | ) | 570 | | ||||||||||||||
Statutory insurance fund contribution |
(404 | ) | (21 | ) | (112 | ) | | | (537 | ) | ||||||||||||||
Segment benefits, claims and expenses |
(278,753 | ) | (4,194 | ) | (13,420 | ) | (2,452 | ) | 570 | (298,249 | ) | |||||||||||||
Share of results of associates |
| | | 704 | | 704 | ||||||||||||||||||
Segment results |
39,769 | 467 | 420 | 1,089 | | 41,745 | ||||||||||||||||||
Income tax |
| | | | | (8,709 | ) | |||||||||||||||||
Net profit |
39,769 | 467 | 420 | 1,089 | | 33,036 | ||||||||||||||||||
Attributable to |
||||||||||||||||||||||||
equity holders of the Company |
32,881 | |||||||||||||||||||||||
non-controlling interests |
155 | |||||||||||||||||||||||
Unrealised gains/(losses) from Available-for-sale securities included in equity holders equity |
9,953 | 729 | 113 | (50 | ) | | 10,745 | |||||||||||||||||
Depreciation and amortisation |
1,169 | 69 | 289 | 33 | | 1,560 |
35
As at 31 December 2009 | ||||||||||||||||||||||||
Individual | Group | Short- | Corporate | |||||||||||||||||||||
life | life | term | & other | Elimination | Total | |||||||||||||||||||
(RMB million) | ||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||
Financial assets (including cash
and cash equivalents) |
1,089,127 | 78,752 | 12,250 | 6,224 | | 1,186,353 | ||||||||||||||||||
Other |
701 | | 114 | 8,470 | | 9,285 | ||||||||||||||||||
Segment assets |
1,089,828 | 78,752 | 12,364 | 14,694 | | 1,195,638 | ||||||||||||||||||
Unallocated |
||||||||||||||||||||||||
Property, plant and equipment |
17,467 | |||||||||||||||||||||||
Other |
13,152 | |||||||||||||||||||||||
Total |
1,226,257 | |||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||
Insurance contracts |
808,591 | 632 | 8,941 | | | 818,164 | ||||||||||||||||||
Investment contracts |
14,579 | 52,747 | | | | 67,326 | ||||||||||||||||||
Securities sold under agreements
to repurchase |
30,250 | 2,215 | 345 | 743 | | 33,553 | ||||||||||||||||||
Other |
120 | 436 | | | | 556 | ||||||||||||||||||
Segment liabilities |
853,540 | 56,030 | 9,286 | 743 | | 919,599 | ||||||||||||||||||
Unallocated |
||||||||||||||||||||||||
Other |
93,882 | |||||||||||||||||||||||
Total |
1,013,481 | |||||||||||||||||||||||
36
1 | Basis of preparation |
The Group adopted International Financial Reporting Standards (IFRS) in 2009. The Group
prepared these consolidated financial statements in accordance with IFRS, its amendments and
interpretations issued by the International Accounting Standards Board (IASB). These
consolidated financial statements also comply with the applicable disclosure provisions of the
Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the
requirements of the Hong Kong Companies Ordinance. The Group prepared the consolidated financial
statements under the historical cost convention, as modified by financial assets and financial
liabilities at fair value through profit or loss, available-for-sale securities, insurance
contract liabilities and certain property, plant and equipment at deemed cost. The preparation
of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgment in the process of applying the
Companys accounting policies. The areas involving a higher degree of judgment or complexity, or
areas where assumptions and estimates are significant to the consolidated financial statements
are disclosed in the Notes of the Groups financial statements. |
(a) | New and amended standards adopted by the group |
The following revised standards are mandatory for the first time for the financial year
beginning 1 January 2010. |
| IFRS 3 (Revised), Business combinations, and consequential amendments to IAS
27, Consolidated and separate financial statements, IAS 28, Investments in
associates, and IAS 31, Interests in joint ventures, are effective prospectively to
business combinations for which the acquisition date is on or after the beginning of
the first annual reporting period beginning on or after 1 July 2009. The revised
standard continues to apply the acquisition method to business combinations, with some
significant changes, such as the recognition and measurement of the identifiable assets
acquired, the liabilities assumed, the non-controlling interest in the acquire and the
acquisition-related costs. |
||
IAS 27 (Revised) requires the effects of all transactions with non-controlling interests
to be recorded in equity if there is no change in control and these transactions will no
longer result in goodwill or gains and losses. The standard also specifies the
accounting when control is lost. Any remaining interest in the entity is re-measured to
fair value, and a gain or loss is recognised in profit or loss. |
37
The Group adopted these revised standards on 1 January 2010 and they did not have any material
impacts on the Groups financial position and comprehensive income. |
|||
(b) | New and revised standards, amendments and interpretations mandatory for the first time for
the financial year beginning 1 January 2010 but not currently relevant to the Group. |
||
The following standards and amendments to existing standards have been published and are
mandatory for the groups accounting periods beginning on or after 1 January 2010 or later
periods but not currently relevant to the Groups operation. |
Applicable for | ||||
Standard/Amendment | financial years | |||
/interpretation | Content | beginning on/after | ||
IFRIC 17
|
Distribution of non-cash assets to owners | 1 July 2009 | ||
IFRIC 18
|
Transfers of assets from customers | 1 July 2009 | ||
IFRIC 9
|
Reassessment of embedded derivatives | 1 July 2009 | ||
IFRIC 16
|
Hedges of a net investment in a foreign operation | 1 July 2009 | ||
IAS 39
|
Eligible hedge items | 1 July 2009 | ||
IAS 1 (Amendment)
|
Presentation of financial statements | 1 January 2010 | ||
IAS 17 (Amendment)
|
Leases | 1 January 2010 | ||
IAS 36 (Amendment)
|
Impairment of assets | 1 January 2010 | ||
IFRS 2 (Amendments)
|
Group cash-settled share-based payment transactions | 1 January 2010 | ||
IFRS 5 (Amendment)
|
Non-current assets held for sale and discontinued operations | 1 July 2009 |
(c) | New standards, amendments and interpretations have been issued but are not effective for the
financial year beginning 1 January 2010. |
| IFRS 9 and IFRS 9 (Amendment), Financial instruments, issued in November 2009 and
October 2010 respectively. This standard is the first step in the process to replace IAS
39, Financial instruments: recognition and measurement. IFRS 9 and IFRS 9 (amendment)
introduce new requirements for classifying, measuring and derecognizing financial assets
and financial liabilities and are likely to affect the groups accounting for its
financial assets. The standard is not applicable until 1 January 2013 but is available for
early adoption. The Group is in the process of making an assessment of the impact of the
standard and is considering the timing of adoption. |
| Revised IAS 24 (Revised), Related party disclosures, issued in November 2009. It
supersedes IAS 24, Related party disclosures, issued in 2003. IAS 24 (revised) is
mandatory for periods beginning on or after 1 January 2011. The Group early adopted IAS 24
Related Party Disclosures (Revised 2009) since 2009. The adoption of IAS 24 Related Party
Disclosures (Revised 2009) only affect disclosure and did not have any impact on the
Groups financial position and comprehensive income. |
38
| Classification of rights issues (Amendment to IAS 32), issued in October 2009. The
amendment applies to annual periods beginning on or after 1 February 2010. Earlier
application is permitted. The amendment addresses the accounting for rights issues that
are denominated in a currency other than the functional currency of the issuer. Provided
certain conditions are met, such rights issues are now classified as equity regardless of
the currency in which the exercise price is denominated. Previously, these issues had to
be accounted for as derivative liabilities. The amendment applies retrospectively in
accordance with IAS 8 Accounting policies, changes in accounting estimates and errors.
The Group will apply the amended standard from 1 January 2011. The Group will make an
assessment of the impact of the standard when applicable. |
| IFRIC-Int 19, Extinguishing financial liabilities with equity instruments, effective
for annual periods beginning on or after 1 July 2010. The interpretation clarifies the
accounting by an entity when the terms of a financial liability are renegotiated and
result in the entity issuing equity instruments to a creditor of the entity to extinguish
all or part of the financial liability (debt for equity swap). It requires a gain or loss
to be recognised in profit or loss, which is measured as the difference between the
carrying amount of the financial liability and the fair value of the equity instruments
issued. If the fair value of the equity instruments issued cannot be reliably measured,
the equity instruments should be measured to reflect the fair value of the financial
liability extinguished. The Group will apply the interpretation from 1 January 2011. It
is not expected to have any impact on the Groups financial position and comprehensive
income. |
| Prepayments of a minimum funding requirement (Amendments to IFRIC-Int 14). The
amendments correct an unintended consequence of IFRIC-Int 14, IAS 19 The limit on a
defined benefit asset, minimum funding requirements and their interaction. Without the
amendments, entities are not permitted to recognise as an asset some voluntary
prepayments for minimum funding contributions. This was not intended when IFRIC-Int 14
was issued, and the amendments correct this. The amendments are effective for annual
periods beginning 1 January 2011. Earlier application is permitted. The amendments should
be applied retrospectively to the earliest comparative period presented. The Group will
apply these amendments for the financial reporting period commencing on 1 January 2011.
It is not expected to have any impact on the Groups financial position and comprehensive
income. |
| Improvements to IFRS 2009 and Annual Improvements 2010 were issued in April 2009
and May 2010 respectively, containing numerous technical and conforming amendments to
IFRS, which the IASB consider non-urgent but necessary. These amendments comprise
amendments that result in accounting changes for presentation, recognition or measurement
purposes as well as terminology or editorial amendments related to a variety of
individual IFRS standards. Apart from the early adoption of the amendments to IFRS 1 and
IFRS 7 from Annual Improvements 2010, no other amendments effective for annual periods
after 1 January 2010 was early adopted by the Group and no material changes to accounting
policies were made in 2010 or are expected in 2011 as a result of these amendments. |
39
ITEM | 2010 | 2009 | ||||||
A Adjusted Net Worth |
144,655 | 159,948 | ||||||
B Value of In-Force Business before Cost of Solvency Margin |
183,008 | 149,387 | ||||||
C Cost of Solvency Margin |
(29,564 | ) | (24,106 | ) | ||||
D Value of In-Force Business after Cost of Solvency Margin (B+C) |
153,444 | 125,282 | ||||||
E Embedded Value (A + D) |
298,099 | 285,229 | ||||||
F Value of One Years Sales before Cost of Solvency Margin |
23,726 | 21,352 | ||||||
G Cost of Solvency Margin |
(3,887 | ) | (3,638 | ) | ||||
H Value of One Years Sales after Cost of Solvency Margin (F + G) |
19,839 | 17,713 |
Notes: 1) | Numbers may not be additive due to rounding. |
|
2) | Taxable income is based on distributable earnings calculated using solvency reserves. |
40
ITEM | RMB million | |||
A Embedded Value at Start of Year |
285,229 | |||
B Expected Return on Embedded Value |
23,922 | |||
C Value of New Business in the Period |
19,839 | |||
D Operating Experience Variance |
(3 | ) | ||
E Investment Experience Variance |
(9,297 | ) | ||
F Methodology, Model and Assumption Changes |
413 | |||
G Market Value Adjustment |
(1,937 | ) | ||
H Exchange Gains or Losses |
(391 | ) | ||
I Shareholder Dividend Distribution |
(19,785 | ) | ||
J Other |
109 | |||
K Embedded Value as at 31 Dec 2010 (sum A through J) |
298,099 |
Notes: 1) | Numbers may not be additive due to rounding. |
|
2) | Items B through J are explained below: |
B | Reflects unwinding of the opening value of in-force business and value of new business sales in 2010 plus the expected return on investments supporting the 2010 opening net worth. | ||
C | Value of new business sales in 2010. | ||
D | Reflects the difference between actual experience in 2010 (including lapse, mortality, morbidity, and expense etc.) and the assumptions. | ||
E | Compares actual with expected investment returns during 2010. | ||
F | Reflects the effect of projection method, model enhancements and assumption changes. | ||
G | Change in the market value adjustment from the beginning of 2010 to the end of 2010, and other related adjustments. | ||
H | Reflect the gains or losses due to change in exchange rate. | ||
I | Reflects dividends distributed to shareholders during 2010. | ||
J | Other miscellaneous items. |
41
Sensitivity Results |
RMB million |
VALUE OF IN-FORCE | VALUE OF ONE YEARS | |||||||
BUSINESS AFTER COST OF | SALES AFTER COST OF | |||||||
SOLVENCY MARGIN | SOLVENCY MARGIN | |||||||
Base case scenario |
153,444 | 19,839 | ||||||
1. Risk discount rate of 11.5% |
145,375 | 18,794 | ||||||
2. Risk discount rate of 10.5% |
162,126 | 20,959 | ||||||
3. 10% increase in investment return |
182,023 | 22,667 | ||||||
4. 10% decrease in investment return |
125,022 | 17,040 | ||||||
5. 10% increase in expenses |
151,002 | 18,014 | ||||||
6. 10% decrease in expenses |
155,882 | 21,664 | ||||||
7. 10% increase in mortality rate for non-annuity
products and 10% decrease in mortality rate for annuity
products |
151,791 | 19,757 | ||||||
8. 10% decrease in mortality rate for non-annuity
products and 10% increase in mortality rate for annuity
products |
155,118 | 19,920 | ||||||
9. 10% increase in lapse rates |
152,080 | 19,756 | ||||||
10. 10% decrease in lapse rates |
154,857 | 19,916 | ||||||
11. 10% increase in morbidity rates |
151,609 | 19,756 | ||||||
12. 10% decrease in morbidity rates |
155,294 | 19,922 | ||||||
13. 10% increase in claim ratio of short term business |
153,162 | 19,249 | ||||||
14. 10% decrease in claim ratio of short term business |
153,725 | 20,429 | ||||||
15. Solvency margin at 150% of statutory minimum |
139,372 | 17,865 | ||||||
16. Using 2009 EV assumptions |
153,452 | 19,809 | ||||||
17. Taxable income based on accounting profit
in accordance to the Provisions on the Accounting
Treatment Related to Insurance Contracts |
148,722 | 19,990 | ||||||
Adjusted Net Worth |
||||||||
Base Case Scenario |
144,655 | |||||||
18. Taxable income based on accounting profit in
accordance to the Provisions on the Accounting
Treatment Related to
Insurance Contracts |
137,155 |
Note: | Taxable income is based on distributable earnings calculated using solvency
reserves for Scenarios 1 to 16. |
42
43
Executive Directors:
|
Mr. Yang Chao, Mr. Wan Feng, Mr. Lin Dairen, Ms. Liu Yingqi | |
Non-executive Directors:
|
Mr. Miao Jianmin, Mr. Shi Guoqing, Ms. Zhuang Zuojin | |
Independent non-executive Directors:
|
Mr. Ma Yongwei, Mr. Sun Changji, Mr. Bruce Douglas Moore, | |
Mr. Anthony Francis Neoh |
By order of the Board of | ||
CHINA LIFE INSURANCE COMPANY LIMITED | ||
Yang Chao | ||
Chairman |
44
K#`` M<]```N`:+GU"*;W2+?VK1*@%'AP-;-#1;6/,ND@"$["3I9IZ.?"5)E``%)`# MS-9A28!E;>P!@TW\@UI=&=(.`!F:-U@,:9S7P M`$2``B,P`0&&`6@H:7\=;(KPV$W]U$D0U=1LDD3@`1PY`HVQB(#;8'P@WOMJ9PA`!+ JJA-AF8)@-B`A@B^!Y.%$,5^4.*$<.(O[G$]X(H$(& MD&AB*PAQ4```P-N'L&Q;;H(9'F[OVG`U0&QQ8'07T`.^E'4=UJ>"@'E4.JX) M/&=:D)X7P-V#,+D,,.$,..`\2P@7R[SUUY&%(`%8SM8Y]LN'P,D_*@A:\)4/ M/`@$H*\U0`@0<&GF:IA#@$7"=Y)H,`+;5[%Z/<<.P'^$<-D:!@$-D'E'=@5J M=@$Y2H(PF60'EV1N.@BL"68'D'=),,NC-[9_P&P\BF11+G&S'H,S3@@B8'4Y M)O]Y)-#C@^!^6.D!>>>K!Y>>?(S5A)#5;/X'#@!F7+9FQ/:M'9;( *("4 MRYYCS8[L6'G9(E!/8SX(>WF:ZMCNA'`%61WL(V"&NM=AOCH&^HJ5)I#`E#X( M0P"XE*KMTHNWHHRO`#AE7+B'HHRY&,"AA%B&A#`'#(##?Y!CT&Z:T$T(!X`` M`WZX'S$"H?SD?W!I,"D!V]GJAQJ*69VH-"`!U-QD@Y#R-3"=.&:1:CSL2@^H M.7Z1!$[S38"S,&D"8_L!.>:?V%7M-W?MZ-MAWO8.&A#JW9YZZU8!H>Z59Y[# M#NX'"QB;N0C=$ZY[Z][QA/#N?2_VT=YAJ4X(*0_8A7#_`%F?8UN?;_M.B89P MG00/\W\0!\DF`.I*"(`KXE$?MO)>",*'`#8W@#E6H(*0!/&^\8/@<<%F[.:< MI4^(""80B0C`2B=?"%JK=8.PU;\;][#?8>TI"#5O>TJ[]!T@?#SO\X/`A4(O M"!0`JD4O"/[IJY5YMV/[8(Y,[9T_]H:_ M?&;?T&";?U4_!0@/]P9OSQ@PC51*;`=7W?D&H.P."'^"@@X(@W\.?GX`!X,H MB@N'@QT`BB.2@@ '*9U^'J^-?QV*#)AS MGG6#)@=-E@F"'D2)?A<.AR**_ZY_!8H76I(Y"-)9IR9_$YY)@A@BDFR>XG]3 M31"O@ZOK?R:YAP<($)5^$H,B#AZEDA>*)$[Q2_;JVJP_%"YA(J$(`#-/8CP% M<">H0<-#%A79"J7(4"IQ*?XE0_-NE"0--9#YF4@Q(R-WGF@-PN!IP)\ 0;/CPAU@]XH MN"*RB;8_$`SZZ4'4W"$0TNY`J'&'XI]VZPKK2F6H6[(W?UY\&YASD,B`F`9> M**B(UO^"J8<8+CK4PQ,-3\M:2F-`G('DC>\ZRC/70&2-+&4E$2GP9X0B%)Y= M(L<4\U!1/TD07&C-3E$'!8,](UU[R,-0"$0\;4LJ*$&2I1>2\#D$55*A0\@` MT$,=#U2"@E/Y-+!9/)*`]4=SBCP7W5S.>*:6'R,\XA8F#P#GS@?E8#(`77E! M@)X?N@2#B#3!"=(,>#D( 5)`#RB0)XB8"P#_L.$I0+4WU!\) M,.!)#V#^<04)]N2"V!_]`8@;8"*(A,)1F+S0@2"8)5/C1X/(Z0>=)E5PEX6> MD)#HHH>X6N8K*80HR8B*U`4,49F)0,.*R;3XQXLHB#!$#W-L*L@;$O")ADB@ M2,+C@_;40()EA\17BHZ>*:D-@YEX5%@-$)C0&96'O'8E0:<8-`0!*'0IR)<8 M]>*)#=E=-$A&;![BYG*'X)@,@CT\4\$C?CCFCG:8B%'>08$J8I,&AGZFT1\+ MX"I)HX.X-T@\XV"+D)D""2'P`+TND@_]%<%<&P2?*L(/4H,D"I\05`B MG9I6.P6(7,R_[D`@TK:I>/)`7I#9_W,>5 _)7NR%R0![S;P3@8KQ^H@ M%4C*WB!9C*#`Y`ID2M(Z%!^"!F6'[IVQ'S7BI=/'`D0B"$N,/BX4+)D>8KH@ M&E@7\5,5'D*#0EB_].(%64E2`^658X,PXX[[$93L-=#*7@7/#)"M)`*(]/HK M0W2$6K_)H#[L']4K\BA@RKZHM`D`4)XI@E#_H:=A6:)],8+<_(+N'_,($@ MR#RXDTO)@:125U0!S@722,.7F,`,201!PT YO?\B X M0R<\^"+1E4QBN6N$&$YTP]Q,;PXB01+]P$6_"P["!B))H3RB]C@!K`X3$#!- M#19XB`:B\!\7V)4@Y"2!Z[W#%A6H!`#&@+7`*"4]K[B#";A(`<>-0%KIBT-A MF$@[.)9+=:?S()-(D[%M[>\/_9.$;+(D$VH\R(,%_`/$\'*`2ER``))(P`1& M&"8(=K)@$WP3'VGP#Z=T`$$O4D`*,-<0*;[@`GPBH1*_LRKN?&P0:`"`%5]! MLBL.`@(+4$3:%K`I"$@JEG^H0RZXF(4.8'4(,*.!< 5\", M((!<'^C$)764`!HPX)W!3`:Y;N*;0S@N>8/HP0A6.@@"Q+`8NI3$;Q3QSFIX M@@`#&$`*"O`('/Y!`YX@`F\\,<]#(%41/1A`&%[@@7\8=4C2.T02%O5-%1(! M,1BX@`:G=:(A'`4-)F!BW"[`R53Y80K[\@--60K5F,X4$S9U2@(*(X'+?6`" M",B&(';J!R*$80!4!8#*XHB>D4+*I#U]_\`%+A"S,,"C!E+DQ`N;LTJX,8UG M7NL`V`01/>H<@AR*2`*Y.+&=/]P!``+]PXG2]XJG&N:P&J#!?4S+J>N(#0!< M]`"83`,`,U+(#SU%E2?F>E192(`/`SA``3K!V^Y=X``I&%,3:GD3\20#``QP M)-\D`+P1F%4""*#<"'Y&@"0`KP,8"(,$"L4`=7K3)!.8W`@\N``&`&^L@Y!O MH8!'8$$0P;^30X$):!"&)@Q8`2,``:D$00$1I)?`ZJ6>Y"@G`0'H=G))>":D MR,.``#0!``CX'6]/!H),*<`&FT*#@RF'``V.8<,H6(`))L<`A8)@PPI`P0,$ MK(#Z8D("\$-#!X+`.!X,F'$"0,:PT=Q1`.]>`+SB/<0'1`"`\HV'`-(B0GIK MS#-?"&+&DT.`8PAP'LHEX5(*H"$&`9-K_W#V*>,X#!D5P1('AR)K#OD(@0 M90POPP;NI5P'(F%A"*NS`MFB`7G5ZXK^4@X%?<7E?-4+K@-C^-+40,.F+]T! (#USA$($``#L_ ` end