CHINA LIFE INSURANCE CO LTD (ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory)

8	INVESTMENTS IN ASSOCIATES AND JOINT VENTURES


	2017 RMB million			2016 RMB million
As at 1 January		119,766			47,175
Change of the cost		37,110			68,387
Share of profit or loss		7,143			5,855
Declared dividends		(1,862	)		(820	)
Other equity movements		(685	)		(831	)

As at 31 December		161,472			119,766


							Movement
	Accounting method		Cost		As at 31 December 2016		Change of the cost			Share of profit or loss			Declared dividends			Other equity movements			Provision of impairment		As at 31 December 2017		Percentage of equity interest			Accumulated amount of impairment
Associates
China Guangfa Bank Co., Ltd. (“CGB”) (i)		Equity Method		32,162		50,229		—			4,186			—			(956	)		—		53,459		43.686	%		—
Sino-Ocean Group Holding Limited (“Sino-Ocean”) (ii)		Equity Method		11,245		12,680		—			1,201			(553	)		298			—		13,626		29.79	%		(1,010	)
China Life Property & Casualty Insurance Company Limited (“CLP&C”)		Equity Method		6,000		7,929		—			328			(69	)		(3	)		—		8,185		40.00	%		—
COFCO Futures Company Limited (“COFCO Futures”)		Equity Method		1,339		1,419		—			47			—			—			—		1,466		35.00	%		—
Sinopec Sichuan to East China Gas Pipeline Co., Ltd. (“Pipeline Company”)		Equity Method		20,000		20,000		—			1,351			(20	)		16			—		21,347		43.86	%		—
China United Network Communications Limited (“China Unicom”) (iii)		Equity Method		21,829		—		21,829	(Note)		(18	)		—			(28	)		—		21,783		10.56	%		—
Others (iv)		Equity Method		9,948		10,407		—			567			(776	)		(466	)		—		9,732					—

Subtotal				102,523		102,664		21,829			7,662			(1,418	)		(1,139	)		—		129,598					(1,010	)

Joint ventures
China Life (Sanya) Health Investments Co., Ltd (“Sanya Company”)		Equity Method		306		301		—			(10	)		—			—			—		291		51.00	%		—
Others (iv)		Equity Method		33,349		16,801		15,281			(509	)		(444	)		454			—		31,583					—

Subtotal				33,655		17,102		15,281			(519	)		(444	)		454			—		31,874					—

Total				136,178		119,766		37,110			7,143			(1,862	)		(685	)		—		161,472					(1,010	)

Note: Including the amount originally held by the Company.

(i)

The Company proposed to subscribe for 1,869,586,305 additional shares offering of CGB at no more than RMB7.01 per share, with a total consideration of RMB13.2 billion. The specific subscription price and quantity will be subject to the adjustment based on the valuation result filed to state-owned assets authority. Upon the completion of transaction, the Company will hold 43.686% of CGB’s ownership interest, unchanged from prior to the transaction. As at 31 December 2017, the transaction has been reviewed and approved by the Board of Directors of the Company, and the relevant parties of the transaction have not entered into the contracts.

(ii)

The 2016 final dividend of HKD0.12 in cash per ordinary share was approved and declared in the Annual General Meeting of Sino-Ocean on 18 May 2017. The Company received a cash dividend amounting to RMB239 million. The 2017 interim dividend of HKD0.167 in cash per ordinary share was approved and declared by the board of directors of Sino-Ocean on 23 August 2017. The Company received a cash dividend amounting to RMB314 million.

Sino-Ocean, the Group’s associate is listed in Hong Kong. On 29 December 2017 (the last trading day in 2017), the stock price of Sino-Ocean was HKD5.39 per share. As at 31 December 2017, an impairment loss of RMB1.01 billion for the investment in Sino-Ocean had been made by the Group. The Group performed an impairment test to this investment on 31 December 2017. The recoverable amount of this investment valued by the Group approximated to the carrying amount and therefore no impairment loss was made for this investment in 2017.

(iii)

On 16 August 2017, the Company entered into an agreement to acquire 3,177,159,590 non-public offering of A ordinary shares of China Unicom, with a total consideration of RMB21.7 billion to participate into the Mixed Ownership Reform of China Unicom. Upon the completion of the transaction as at 31 October 2017, the Group’s share percentage of China Unicom increased from 0.08% to 10.56%, making the Company the second largest shareholder of China Unicom. In accordance with the articles of China Unicom, the Company is entitled to nominate candidates for the Board of Directors and Supervisors. The candidate of Board of Directors nominated by the Company was approved in the General Meeting of China Unicom on 8 February 2018. The management considered that the Group can exert significant influence upon China Unicom, and therefore accounted for it as an associate. On 29 December 2017 (the last trading day in 2017), the stock price of China Unicom was RMB6.33 per share. As at 31 December 2017, the Company had not yet completed the valuation for fair value of the identifiable net assets of China Unicom.

(iv)

The Group invested in real estate, industrial logistics assets and other industries through these enterprises.

(v)

Except for a 36-month restricted period of the investment in China Unicom, as mentioned in (iii), the Group has no restrictions to transact other investments in associates and joint ventures.

As at 31 December 2017, the major associates and joint venture of the Group are as follows:


Name	Country of incorporation		Percentage of equity interest held
Associates
CGB		PRC		43.686	%
Sino-Ocean		Hong Kong, PRC		29.79	%
CLP&C		PRC		40.00	%
COFCO Futures		PRC		35.00	%
Pipeline Company		PRC		43.86	%
China Unicom		PRC		10.56	%

Joint venture
Sanya Company		PRC		51.00	%

As at 31 December 2016, the major associates and joint venture of the Group are as follows:


Name	Country of incorporation		Percentage of equity interest held
Associates
CGB		PRC		43.686	%
Sino-Ocean		Hong Kong, PRC		29.991	%
CLP&C		PRC		40.00	%
COFCO Futures		PRC		35.00	%
Pipeline Company		PRC		43.86	%

Joint venture
Sanya Company		PRC		51.00	%

The following table illustrates the financial information of the Group’s major associates and joint venture as at 31 December 2017 and for the year ended 31 December 2017:

CGB
RMB
million

Sino-Ocean
RMB
million

CLP&C
RMB
million

COFCO
Futures
RMB
million

Pipeline
Company
RMB
million

China
Unicom
RMB
million

Sanya
Company
RMB
million

Total assets

2,072,915

191,894

79,601

10,651

36,243

573,617

888

Total liabilities

1,959,069

133,166

59,138

8,020

934

266,599

317

Total equity

113,846

58,728

20,463

2,631

35,309

307,018

571

Total equity attributable to equity holders of the associates and joint ventures

113,846

48,502

20,463

2,631

35,309

135,393

571

Total adjustments (i)

2,267

(2,617

)

—

676

—

Total equity attributable to equity holders of the associates and joint ventures after adjustments

116,113

45,885

20,463

2,631

35,985

135,393

571

Proportion of the Group’s ownership

43.686

29.79

40.00

35.00

43.86

10.56

51.00

Gross carrying value of the investments

53,459

14,636

8,185

1,466

21,347

21,783

291

Impairment

—

(1,010

)

—

Net carrying value of the investments

53,459

13,626

8,185

1,466

21,347

21,783

291

Total revenues

50,531

49,236

61,142

399

5,644

274,829

—

Net profit/(loss)

10,204

6,259

820

135

3,055

1,684

(20

)

Other comprehensive income

(2,332

)

912

(35

)

—

(230

)

—

Total comprehensive income

7,872

7,171

785

135

3,055

1,454

(20

)

The following table illustrates the financial information of the Group’s major associates and joint venture as at 31 December 2016 and for the year ended 31 December 2016:


	CGB RMB million			Sino-Ocean RMB million			CLP&C RMB million			COFCO Futures RMB million			Pipeline Company RMB million			Sanya Company RMB million
Total assets		2,047,592			151,265			72,773			11,287			37,231			799
Total liabilities		1,941,618			101,935			52,950			8,710			5,014			208
Total equity		105,974			49,330			19,823			2,577			32,217			591
Total equity attributable to equity holders of the associates and joint ventures		105,974			43,999			19,823			2,496			32,217			591
Total adjustments (i)		3,163			(1,576	)		—			—			—			—
Total equity attributable to equity holders of the associates and joint ventures after adjustments		109,137			42,423			19,823			2,496			32,217			591
Proportion of the Group’s ownership		43.686	%		29.991	%		40.00	%		35.00	%		43.86	%		51.00	%
Gross carrying value of the investments		50,229			13,690			7,929			1,419			20,000			301
Impairment		—			(1,010	)		—			—			—			—
Net carrying value of the investments		50,229			12,680			7,929			1,419			20,000			301

Total revenues		55,276			37,748			55,728			375			2,339			1
Net profit/(loss)		9,504			4,446			1,157			66			631			(9	)
Other comprehensive income		(1,070	)		(164	)		(526	)		—			—			—
Total comprehensive income		8,434			4,282			631			66			631			(9	)

The Group had no contingent liabilities with the associates and joint ventures as at 31 December 2017 and 31 December 2016. The Group had a capital contribution commitment of RMB20.996 billion with a joint venture as at 31 December 2017 (31 December 2016: RMB2,991 million). The capital contribution commitment amount has been included in the capital commitments in Note 38.

(i)

Including adjustments for the difference of accounting policies, fair value and others.

CHINA LIFE INSURANCE CO LTD | CIK:0001268896 |

ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory