Annex A

Format of the Annual Report and Accounts of an MPF Scheme

Format of Annual Report

The MPF subsidiary legislation will stipulate that an Annual Report of an MPF Scheme should consist of :

1. a scheme report including:
   1. a commentary on the financial development of the scheme as disclosed in the audited financial statements;

   2. an outline of any changes in the governing rules;

   3. such other information as is necessary, in the trustee's opinion, to provide scheme members with a proper understanding of the main aspects of the scheme;
2. an investment report setting out:
   1. an analysis of the investments held by the scheme and the investment income and returns earned by these investments during the period covered by the report;

   2. a commentary on this analysis;

   3. an outline of the investment policies pursued by the scheme in the period during the year;

   4. a three-year summary of the scheme's net investment income and investment assets.

3. contact details for scheme members to direct enquiries; and

4. the name of each auditor, bank, administrator, custodian, investment manager or other person or organisation acting for the trustee in respect of the scheme during the period being reported upon.

Format of Annual Accounts

Key features of the existing HKSA accounting guidelines to be incorporated into MPF subsidiary legislation

1. The financial statements of registered schemes should include the following items :
   1. An operating statement: The operating statement will contain details of the results of the scheme's investment activities and the costs of administration in respect of the financial period being reported.

   2. A statement of net assets: The statement of net assets will set out the disposition of assets and liabilities of the scheme at the end of the related financial period.

   3. A statement of accounting policies: The statement of accounting policies will set out the principal accounting policies followed by a registered scheme in preparing financial statements.

2. The amount for the previous year (comparative figure) should be shown for every amount included in the accounts (except in the first year for which the accounts are prepared).

3. The accounts should be accompanied by the auditor's report thereon.

Matters to be incorporated into the MPF rules which are not addressed in the accounting guideline

1. The statement of net assets should be signed by at least two trustees in the case of individual trustees, one of them must be independent trustee, or where the trustee is a corporate trustee by two directors of the trustee company, for and on behalf of the trustee company, as evidence of approval.

2. The accounts should include a statement as to whether the accounts have been prepared in accordance with the HKSA accounting guideline. The particulars of any material departures should be set out in a note to the accounts.