WAH YAN iE FAMILY FOUNDATION LIMITED, REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2019 CONTENTS PAGES REPORT OF THE DIRECTORS 1-2 INDEPENDENT AUDITOR'S REPORT 3-5 STATEMENT OF FINANCIAL POSITION 6 STATEMENT OF INCOME AND EXPENDITURE 7 AND OTHER COMPREHENSIVE INCOME, STATEMENT OF CHANGES IN FUNDS AND RESERVES, 8g STATEMENT OF CASH FLOWS 9 NOTES TO THE FINANCIAL STATEMENTS 10-257 WAH YAN ONE FAMILY FOUNDATION LIMITED REPORT OF THE DIRECTORS ‘The directors present their report and the audited financial statements of the Foundation for the year ended 31" December, 2019. PRINCIPAL ACTIVI The Foundation is engaged in raising funds to promote educational and charitable activities and in particular, to raise the standard of education and to support extra-curricular activities of Wah Yan College, Hong Kong and Kowloon. RESULTS The results of the Foundation for the year ended 31° December, 2019 are set out in the statement of income and expenditure and other comprehensive income on page 7. COUNCIL MEMBERS ‘The directors of the Foundation during the year and up to the date of this report were: Mr. Fong Hup ~ Vice-Chairman Mr. Yuen Tin Fan Francis — Vice-Chairman Rev. Fr. Chow Sau Yan Stephen S.J. Mr. Cheung Hon Kit Mr. Lai Wing Hong Joseph Rev. Fr. Lo Pak Huen William $.J. Mr. Kwan Ping Yiu Martin Mr. Chui Man Lung Everett Mr. Zen Wei Pew Mr. Tse Ling Fung Charles Mr. Liu Wai Lun Jeffrey Mr. Lau Fu Wing Eddie Mr. Yu Chun Sing Sam (Retired on 22/8/2019) Rev. Fr. Tsui Lap Yan Clement S.J. (Appointed on 22/8/2019) Mr. Lam Sze Wai Stephen (Appointed on 22/8/2019) Other office bearers of the Foundation during the year and up to the date of this report were: ‘Mr. Chui Man Lung Everett — Hon, Secretary Mr. Ho Siu Tong — Hon, Treasurer Mr. Fong Wing Hong Monty Chief Executive Officer In accordance with Article 36 of the Foundation’s Articles of Association, all existing directors shall remain in office until the following Annual General Meeting of the Foundation.WAH YAN ONE FAMILY FOUNDATION LIMITED REPORT OF THE DIRECTORS (Continued) DIRECTORS’ INTERESTS IN CONTRACTS, No contract of significance to which the Foundation was a party and in which a director of the Foundation had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year. DIRECTORS’ RIGHTS TO ACQUIRE DEBENTURES ‘At no time during the year was the Foundation a party to any arrangements to enable the directors of the Foundation to acquire benefits by means of the acquisition of debentures of the Foundation or any other body corporate. AUDITORS A resolution will be submitted to members at the forthcoming annual general meeting to re-appoint Messrs. Paul W.C. Ho & Company, Certified Public Accountants (Practising), as auditors of the Foundation for the ensuing year. On behalf of the Board Hong Kong ~ 2 JUL 2020‘PAUL W.C. HO & COMPANY Certified Public Accountants (Practising) at RAT Unit 1701, 17" Floor, The Sun's Group Centre, SE Ltr 200 No, 200 Gloucester Road, Wanchai, Hong Kong. sR Ps TARO Tel *€ 26(852) 2815 4212 / (852) 2815 4546 Fox #8 (852) 28543761 Email ‘€ info@pautho.com.hk Website 898: www-paulho.com.hk INDEPENDENT AUDITOR’S REPORT. TO THE MEMBERS OF WAH YAN ONE FAMILY FOUNDATION LIMITED (incorporated in Hong Kong with liability limited by guarantee) Report on the financial statements We have audited the financial statements of Wah Yan One Family Foundation Limited (“the Foundation”) set out on pages 6 to 25, which comprise the statement of financial position as at 31° December, 2019, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. In our opinion, the financial statements give a true and fair view of the financial position of the Foundation as at 31° December, 2019 and of its financial performance and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards (“HKFRSs") issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and have been properly prepared in compliance with the Hong Kong Companies Ordinance. Basis for opinion We conducted our audit in accordance with Hong Kong Standards on Auditing ("HKSAs") issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Foundation in accordance with the HKICPA’s Code of Ethics for Professional Accountants ("the Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis, for our opinion. Information other than the financial statements and auditor's report thereon The directors are responsible for the other information. The other information comprises the information included in the directors’ report, but does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated, If, based on the work we have performed, we conclude that there is a material misstatement of this, other information, we are required to report that fact. We have nothing to report in this regard.PAUL W.C. HO & COMPANY AT AE at BAT Certified Public Accountants (Practising) Unit 1701, 17* Floor, The Sun's Group Centre, SRM Beir 200 No. 200 Gloucester Road, Wanchai, Hong Kong. SSM Ps THE TOL Tel "5 (852) 2815 4212 / (852) 2815 4546 Fax 48.94 (852) 2854 3761 Email info@pautho.com.hk Website 4: www.paulho.com.hk INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WAH YAN ONE FAMILY FOUNDATION LIMITED (incorporated in Hong Kong with liability limited by guarantee) (Continued) Responsibilities of directors and those charged with governance for the financial statements The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA and the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Foundation's ability to continue as a going concem, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Foundation or to cease operations, or have no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Foundation's financial reporting process. Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. This report is made solely to you, as a body, in accordance with Section 405 of the Hong Kong Companies Ordinance (Cap. 622), and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of the report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. ‘As part of an audit in accordance with HKSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: = Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. ‘The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, mistepresentations, or the override of internal control.PAUL W.C. HO & COMPANY AE Est BHAT Certified Public Accountants (Practising) Unit 1701, 17° Floor, The Sun's Group Centr, RMT ah 200 No. 200 Gloucester Road, Wanchai, Hong Kong. RRM Pos ITH LTOL E Tel $6 (852) 2815 4212 / (852) 2815 4546 Fax, 44 H(852) 2854 3761 Email ‘© info@pautho.com.hk. Website #444 www.paulho.com.bk INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WAH YAN ONE FAMILY FOUNDATION LIMITED (incorporated in Hong Kong with liability limited by guarantee) (Continued) Auditor's responsibilities for the audit of the financial statements (Cont'd) - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation’s internal control = Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors’ use of the going concem basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Foundation's ability to continue as a going concem. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Foundation to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. ‘We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit, Paul W. C. Ho & Company Certified Public Accountants (Practising) Hong Kong ~ 2 JUL 2020WAH YAN ONE FAMILY FOUNDATION LIMITED STATEMENT OF FINANCIAL POSITION AS AT 315 DECEMBER, 2019 CURRENT ASSETS ‘Accounts receivable and deposits Time and call deposits Bank balances DEDUCT: CURRENT LIABILITY ‘Accounts payable and accruals NET CURRENT ASSETS NON-CURRENT ASSETS Available-for-sale financial assets - Listed securities - Unlisted securities TOTAL NET ASSETS REPRESENTING:- ACCUMULATED FUND GENERAL FUND Balance brought forward Deficit for the year Balance carried forward INVESTMENT REVALUATION RESERVE NOTES 106i) 106i) 14 2019 HK$ 1,039,800.00 5,565,006.32 1,913,98: 8,518,790.97 (6,697,341.78) _1,821,449.19, 3,995,081.10 12,524,362.90 _16,519.444.00 18,340,893.19 29,524,094.13 2018 HKS 445,500.00 5,029,256.47 4,476,374.90 pan 476,378.98 9,951,131.37 (5,025,532.30) __4,925,599.07 7,424,318.80 13,664,073.15 21,088,391.95 26,013,991.02 35,919,492.44 (8,724,258.52) _(6,395,398.31) 20,799,835.61 (2,458,942.42) 18,340,893.19 The notes on pages 10 to 25 form an integral part of these financial statements. 29,524,094.13 (3,510,103.11)_ 2 013,991.02 The financial statements were approved and authorised for issue by the Board of Directors on ~ 2 JUL 2020 ‘uen Tin Fan Francis Vice-Chairman, Vide-ChairmanWAH YAN ONE FAMILY FOUNDATION LIMITED STATEMENT OF INCOME AND EXPENDITURE AND OTHER COMPREHENSIVE INCOME, FOR THE YEAR ENDED 31°' DECEMBER, 2019 NOTES 2019 2018 HKS HKS INCOME Surplus from fund raising activities Gross donations and collections n 2,189,861.10 _3,710,751.01 Less: Direct expenditure ul (117,441.30) (12,473.00) Net surplus 2,072,419.80__3,698,278.01_ OTHER INCOME Bank and bond interest income 840,502.98 922,246.43 Rebates and commissions received 61,543.00 64,008.00 Dividends received 275,951.10 340,746.27 Gain on disposal of listed shares and bonds 350,376.48 Gain on exchange differences - 407.17 1,677,784.35_ TOTAL INCOME 3,250,416.88 —_5,376,062.36 LESS: EXPENDITURE, Insurance 16,464.87 16,430.65 Staff salary and MPF contribution 1,018,999.99 968,419.38 Subsidies for school projects 12 10,476,738.92 10,679,262.84 Other expenses 13 60,976.60 107,347.80 Loss on disposal of listed shares and bonds 401,495.02 - (11,974,675.40) _(11,771,460.67 DEFICIT FOR THE YEAR (8,724,258.52) _(6,395,398.31) OTHER COMPREHENSIVE INCOME TOTAL COMPREHENSIVE DEFICIT (8,724,258.52) __(6,395,398.31) The notes on pages 10 to 25 form an integral part of these financial statements.WAH YAN ONE FAMILY FOUNDATION LIMITED FU STATEMENT OF CHANGES 1S AND RESERVES FOR THE YEAR ENDED 31°" DECEMBER, 2019 Balance as at 1% January Investment revaluation reserve Reversal/(provision) for loss in value of listed securities Surplus/(deficit) on valuation of unlisted securities Deficit for the year TRANSFER TO ACCUMULATED FUND __26,013,991.02__35,706,702.70_ (2,614,484.31) (682,829.06) 561,969.24 489,191.45, 41,051,160.69__(3.297,313.37) _(8,724,258.52)_(6,395,398.31)_ 18,340,893.19_ __26,013,991.02 The notes on pages 10 to 25 form an integral part of these financial statements.WAH YAN ONE FAMILY FOUNDATION LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31°" DECEMBER, 2019 CASH FLOWS FROM OPERATING ACTIVITIES Deficit for the year CHANGES IN WORKING CAPITAL (Increase)/decrease in accounts receivable and deposits Increase in accounts payable and accruals NET CASH USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Purchase of listed securities Purchase of unlisted securities Sale of listed securities and bonds NET CASH FROM INVESTING ACTIVITIES NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT 1/1/2019 (Note 8) CASH AND CASH EQUIVALENTS AT 31/12/2019 (Note 8) 2019 HK$ (8,724,258.52) (594,300.00) 1,671,809.48 (646,749.04) (1,508,627.75) 7,128,736.39 6: (2,026,640.40) 9,505,631.37, 7,478,990.97 The notes on pages 10 to 25 form an integral part of these financial statements. 2018 KS (6,395,398.31) 2,167,250.00 2,816,440.95 (1,411,707.36) (1,011,585.57) (B,200,556.37) 7,262,154.90 050,012.96 1,638,305.60 7,867,325.77 9,505,631.37WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 315" DECEMBER, 2019 GENERAL INFORMATI Organization and activities Wah Yan One Family Foundation Limited (the “Foundation”) is a body corporate established under the Hong Kong Companies Ordinance (Chapter 622) for the purpose of promoting educational and charitable activities and in particular, to raise the standard of education and to support extra-curricular activities of Wah Yan College, Hong Kong and Kowloon. ‘On winding up or dissolution of the Foundation, there remains, after the satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the members of the Foundation, but shall be given or transferred to some other institution or institutions having objects similar to the objects of the Foundation and which shall prohibit the distribution of its or their income and property amongst its or their members. STATEMENT OF COMPLIANCE WITH HONG KONG FINANCIAL REPORTING STANDARDS The Company's financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRSs”), which includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards CHKASs”) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (‘HKICPA”), accounting principles generally accepted in Hong Kong, and the requirements of the Hong Kong Companies Ordinance. A summary of the significant accounting policies adopted by the Foundation is set out in Note 3. In 2019, the Foundation has initially applied the new and revised HKFRSs issued by the HKICPA that are first effective for accounting periods beginning on or after 1 January, 2019. ‘A summary of the changes in accounting policies resulting from the Foundation's application of these HKFRSs is set out in Note 4. 103 WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 315? DECEMBER, 2019 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES @ () © BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS, ‘The measurement basis used in preparing the financial statements is historical cost, except for investments in trading securities and available-for-sale financial assets, which are stated at fair value [see Note 3(e)] FOREIGN CURRENCY TRANSLATION (Functional and presentation currency Items included in the financial statements of the Foundation are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The financial statements are presented in Hong Kong dollars, which is the functional and presentation currency of the Foundation, (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of income and expenditure and other comprehensive income. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and short-term highly liquid investments which are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on demand and form an integral part of the Foundation’s cash management are also included as a component of cash and cash equivalents for the purpose of the statement of cash flows. nl3 WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2019 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) (@) INCOME RECOGNITION Income is accounted for on an accruals basis, except for donations which are accounted for when the right to receive payment is established. Donation not designated for any specific purpose is utilised at the discretion of the Board of Directors. Interest income is recognised on a time proportion basis, taking into account the principal amounts outstanding and the interest rates applicable. Dividend income is recognised when the shareholder’s right to receive payment is established. (©) INVESTMENTS Investments are recognised and derecognised on the trade date when the Foundation commits itself to purchase or sell an asset and are initially measured at fair value plus, in the case of investments other than trading securities, transaction costs. At the end of each reporting period, the Foundation assesses whether there is any objective evidence that an investment or group of investments is impaired. Investments are further categorised into the following classifications for the measurement after initial recognition. (i) Trading securities Investments in securities held for trading are classified as trading securities included in current assets and are stated in the statement of financial position at fair value. Any attributable transaction costs and gain or loss on the fair value changes of trading securities are recognised in the statement of income and expenditure and other comprehensive income. 23, WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2019 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) (&) INVESTMENTS (CONT'D) (ii) Available-for-sale financial assets Investments other than those held for trading and held to maturity are classified as available-for-sale financial assets and are stated in the statement of financial position at fair value. Gain or loss on the fair value changes of available-for-sale financial assets is recognised directly in equity in the investment revaluation reserves, except for impairment losses and, in the case of monetary items such as debt securities, foreign exchange gains and losses are recognised directly in the statement of income and expenditure and other comprehensive income. When the available-for-sale financial assets are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the statement of income and expenditure and other comprehensive income. Where the available-for-sale financial assets are interest-bearing, interest calculated using the effective interest method is recognised in the statement of income and expenditure and other comprehensive income. ‘When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the asset is impaired, the cumulative loss that had been recognised directly in equity is removed from equity and recognised in the statement of income and expenditure and other comprehensive income even though the financial asset has not been derecognised. ‘The amount of the cumulative loss that is removed from equity and recognised in the statement of income and expenditure and other comprehensive income is the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognised in the statement of income and expenditure and other comprehensive income. Impairment losses recognised in the statement of income and expenditure and other comprehensive income for an investment in an equity instrument classified as available-for-sale are not reversed through the statement of income and expenditure and other comprehensive income. If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the statement of income and expenditure and other comprehensive income, the impairment loss is reversed, with the amount of the reversal recognised in the statement of income and expenditure and other comprehensive income. B3 WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31? DECEMBER, 2019 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) © (s) IMPAIRMENT OF ASSETS. Internal and external sources of information are reviewed at the end of each reporting period to identify indications that investments in trading securities may be impaired, The impairment loss is measured as the difference between the carrying amount of the financial assets and the fair values or the estimated future cashflows, discounted at the current rate of retum for a similar financial asset where the effect of discounting is material PROVISION AND CONTINGENT LIABILITIES Provisions are recognised for liabilities of uncertain timing or amount when the Foundation has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditures expected to settle the obligation Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. 43. WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2019 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (h) FINANCIAL INSTRUMENTS @ Financial assets The Foundation’s financial assets include accounts and other receivables and are classified and accounted for as loans and receivables. Financial assets are recognised on the trade date. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are initially recognised at fair value plus any directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method, less impairment loss, if any. Any changes in their value are recognised in the statement of income and expenditure and other comprehensive income. Derecognition of financial assets occurs when the rights to receive cash flows from the assets have expired; or where the Foundation has transferred its contractual rights to receive the cash flows of the financial assets and has transferred substantially all the risks and rewards of ownership; or where control is not retained. ‘An assessment for impairment is undertaken at least at the end of each reporting period whether or not there is objective evidence that a financial asset or a group of financial assets is impaired. Impairment loss on loans and receivables is recognised when there is objective evidence that the Foundation will not be able to collect all the amounts due to it in accordance with the original terms of the receivables. The amount of the impairment loss is determined as the difference between the asset’s carrying amount and the present value of estimated future cash flows. If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed and the amount of any reversal is recognised in the statement of income and expenditure and other comprehensive income. 15WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°* DECEMBER, 2019 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) (bh) FINANCIAL INSTRUMENTS (CONT'D) (ii) Financial liabilities The Foundation’s financial liabilities include accounts and other payables. Financial liabilities are recognised when the Foundation becomes a party to the contractual provisions of the instrument. Financial liabilities are initially recognised at fair value of the consideration received less directly attributable transaction costs incurred and subsequently measured at amortised cost using the effective interest method. Financial liabilities are derecognised when the obligation is discharged or cancelled, or expires. (i) STAFF RETIREMENT SCHEME The Foundation operates a defined contribution Mandatory Provident Fund retirement benefits scheme (the ‘MPF’ Scheme) under the Mandatory Provident Fund Schemes Ordinance, for those employees who are eligible to participate in the MPF Scheme. Contributions are made based on a percentage of the employees’ relevant income and charged to the statement of income and expenditure and other comprehensive income as they become payable in accordance with the rules of the MPF Scheme. The assets of the MPF Scheme are held separately from those of the Foundation in an independently administered fund.WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2019 CHANGES IN ACCOUNTING POLICIES In 2019, the Foundation has initially applied the new and revised HKFRSs issued by the HKICPA that are first effective for accounting periods beginning on or after 1* January, 2019 and are relevant to the Company’s financial statements, including: - HKERS 16, Leases - HK(IFRIC) 23, Uncertainty over income tax treatments The application of the new and revised HKFRSs has no material effects on the Foundation’s financial performance and positions. ‘RITICAL ACCOUNTING ESTIMATES AND JUDGEM) The Foundation makes estimates and assumptions conceming the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. There are no estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year. 7WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2019 FINANCIAL INSTRUMENTS Exposure to foreign currency, credit, liquidity, cash flow interest rate and equity price risks arises in the normal course of the Foundation’s business. These risks are limited by the Foundation’s financial management policies and practices described below: (a) Foreign exchange risk Foreign exchange risk arises where future transactions, recognised assets and liabilities are denominated in a currency that is not the functional currency of the Foundation. The directors are of opinion that the Foundation does not have significant foreign exchange risk under the current operations. (b) Credit risk ‘The Foundation has no significant credit risk from third parties, including risks resulting from counterparty default and risks of concentration. The Foundation has policies in place for the control and monitoring of relevant credit risk, (©) Liquidity risk The liquidity of the Foundation is managed by maintaining sufficient cash and bank balances ‘The table below summarises the maturity profile of the Foundation’s financial liabilities at the end of each reporting period based on contractual undiscounted payments. Within 28to 5™ Lyear Years Total 2019 KS HKS HKS Accounts payable and accruals 6,697,341.78 6,697,341.78 Within 2" to s™ Lyear ‘Total 2018 HKS HKS Accounts payable and accruals __5,025,532.30 = _5,025,532.30 186. WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31* DECEMBER, 2019 FINANCIAL INSTRUMENTS (CONT'D) (@_ Cash flow and fair value interest rate risk ‘The Foundation has significant deposits placed with banks which expose the Foundation to cash flow interest rate risk, At present, the Foundation does not enter into any derivative to hedge against its interest rate risk exposure. (©) Equity price risk The investments in equity securities classified as trading securities and available-for-sale financial assets expose the Foundation to price risk. As the Foundation’s policy is only to invest on such investments by its surplus funds, the exposure may not have significant impact on the Foundation’s financial position. ‘Summary of quantitative data 2019 2018 HKS HKS Available-for-sale financial assets - Listed equity securities, at market value 3,995,081.10 7,424,318.80 ~ Equities, bonds and convertibles, at market value __12,524,362.90 _13,664,073.15, 16,519,444.00 _21,088,391.95 Sensitivity analysis ‘A 10% increase in stock prices at 31* December, 2019 with all other variables held constant would have decreased deficit for the year by HK$1,651,944.40 (2018: HK3$2, 108,839.20) and increased equity by HK$1,651,944.40 (2018: HK$2,108,839.20). Conversely, if a 10% decrease in stock prices at 31 December, 2019 with all other variables held constant would have increased deficit for the year by HK$1,651,944.40 (2018: HK$2,108,839.20) and decreased equity by HK$1,651,944.40 (2018: HKS2, 108,839.20), The sensitivity analysis has been prepared with the assumption that the change in equity price had occurred at the end of the reporting period and had been applied to the exposure to equity price risk for the relevant financial instrument in existence at that date. The changes in equity price represent management's assessment of a reasonably possible change in equity price at that date over the period until the end of the next annual reporting period. ‘The analysis is prepared on the same basis for 2018.WAH YAN ONE FAMILY FOUNDATION LIMITED, |OTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2019 )UNTS RECEIVABLE AND DEPOSITS 2019 2018 HKS HKS Deposit for Anniversary Dinner 990,000.00, 445,500.00 Prepaid expenses for other anniversary programme 49,800.00 1,039,800.00 445,500.00 CASH AND CASH EQUIVALENTS 2019 2018 HKS HKS Short-term bank deposits 5,565,006.32 $,029,256.47 Cash at banks 1,913,984,65 __4,476,374.90 7,478,990.97___9,505,631.37 ‘The effective interest rates on short-term bank deposits were 0.03101% to 1.81571% (2018: 1.42286% to 1.81429%); these deposits have an average maturity period of 24 hours to one week, ACCOUNTS PAYABLE AND ACCRUAI 2019 2018 HKS HK$ Subsidies committed to schools 6,100,000.00 _4,500,000.00 Accrued payroll and other expenses 126,829.90 75,500.00 Donations collected for special scholarship and projects __470,511.88 450,032.30 6,697,341.78__5,025,532.30WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS, FOR THE YEAR ENDED 31°" DECEMBER, 2019 10. AVAILABLE-FOR-SALE FINANCIAL ASSETS (Listed securities 2019 2018 HKS HKS Listed securities in Hong Kong, at cost 4,953,812.24 —8,945,019.18 (Less)/add: Provision/reversal for impairment - loss transferred to investment revaluation reserve Atl January (1,520,700.38) __1,093,783.93 Deduction/(addition) 561,969.24 (2,614,484.31) At 31% December (958,731.14) _ (1,520,700.38) Balance at 31 December 3,995,081.10_ __7,424,318.80 Market value of listed securities at 31" December __3,995,081.10_ __7,424,318.80 Gi) Unlisted seourities 2019 2018 HKS HKS Bonds and convertible bonds, at cost 12,727,376.90 14,442,196.41 Less: Deficit on valuation transferred to investment revaluation reserve At 1" January (1,989,402.73) _(1,306,573.67) Deduction/(addition) 489,191.45 (682,829.06) At31* December (1,300,211.28) _(1,989,402.73) Interest income receivable 217,110.51 237,454.56 Exchange differences 1,080,086.77 973,824.91 Market value of unlisted securities at 31" December 12,524,362.90_ __13,664,073.15 aML. 12, 13. WAH YAN ONE FAMILY FOUNDATION LIMITED. |OTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2019 SURPLUS FROM FUND RAISING ACTIVITIES Donations and collection HK$ General 2,023,771.10 Marathon 106,090.00 Blessing bags 60,000.00 2,189,861.10, SUBSIDIES FOR SCHOOL PROJECTS ‘Small class teaching, educational psychologist, sports and other learning experiences Other sponsorship OTHER EXPENSES Bank and custodian charges Miscellaneous expenses Office expenses Computer and website expenses 2019 Net surplus! 2018 (deficit) Net surplus HKS HKS 2,023,771.10 3,522,449.01 59,617.00 67,367.00 70,968.30 __(10,968.30) __ 108,462.00 2,072,419.80_ _ 3,698,278.01 2019 2018 HKS HKS 10,200,000.00 _10,560,000.00 276,738.92 119,262.84 10,476,738.92_ __10,679,262.84 2019 2018 HKS HKS 7,077.52 6,852.91 - 217.64 51,979.08 50,977.25 1,9: 10 49,300.00 60,9 107,347.8014, 15, 16. 17. WAH YAN ONE FAMILY FOUNDATION LIMITED OTES TO THE FINANCIAL STATI S FOR THE YEAR ENDED 31°" DECEMBER, 2019 MENT REVALUATION RESERVE Listed Unlisted securities securities Total HKS HKS HKS At I/1/2018 1,093,783.93 _(1,306,573.67) (212,789.74) Provision in the year {Note 10(i)Gi)] (2,614,484.31) (682,829.06) _(3,297,313.37) At 31/12/2018 and 1/1/2019 (1,520,700.38) _(1,989,402.73) __(3,510,103.11) Written back in the year [Note 10(i)& (ii) 561,969.24 489,191.45 1,051,106.69 At 31/12/2019 (958,731.14) _(1,500,211.28) _(2,458,942.42) DIRECTORS’ REMUNERATION None of the directors received or will receive any fees or other remuneration in respect of their services rendered to the Foundation during the year. TAXATION ‘The Foundation is exempted from Hong Kong taxation under Section 88 of the Inland Revenue Ordinance. LIMITED BY GUARANTEE The Foundation is limited by guarantee and not having a share capital. Every member of the Foundation undertakes to contribute to the assets of the Foundation, in the event of the same being wound up while he is a member or within one year after he ceases to be a member, for payment of the debts or liabilities of the Foundation contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for the adjustment of the rights of contributories amongst themselves, such amounts as may be required, not exceeding HKS100.WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2019 18. FAIR VALUE MEASUREMENT OF FINANCIAL STATEMENTS, Financial assets and liabilities measured at fair value in the statement of financial position are categorised in its entirety into the following three levels of the fair value hierarchy based on the basis of the lowest level input that is significant to the entire fair value measurement: Level 1: fair value measured using quoted prices (unadjusted) in active markets for identical financial assets or liabilities that the entity can access at the measurement date; Level 2: fair value measured using inputs other than quoted prices included within Level 1 that are observable for the financial asset or liability, either directly or indirectly; and Level 3: fair value measured using significant unobservable inputs for the financial asset or liability. Recurring fair value measurement: Level 1 Level2 __Level3 Total HKS HKS HKS HK$ 2019 Available-for-sale financial assets - Unlisted equity securities 12,524,362.90 - 12,524,362.90 - Listed securities in Hong Kong 3,995,081.10 = 3,995,081.10 16,519,444.00 = 16,519,444.00 2018 “Available-for-sale financial assets - Unlisted equity securities 13,664,073.15, - - 13,664,073.15 - Listed securities in Hong Kong _7,42 0 = 7,424,318.80 21,088,391.95 __- 21,088,391.95 During the year, the Foundation had no transfers between instruments in Level | and Level 2. ‘There are no fair values of the financial assets and financial liabilities included in Level 2 and Level 3. During the year, the Foundation had no transfers of instruments into or out of Level 3. No financial assets that changing one or more of the inputs to reasonably possible alternative assumptions in their fair value measurements would change their fair value significantly. 2419. 20. WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°' DECEMBER, 2019 CAPITAL MANAGEMENT, Capital represents accumulated fund stated in the statement of financial position. The Foundation’s objective when managing capital is to safeguard its ability to continue as a going concern, so that it can continue to promote educational and charitable activities. The Foundation manages capital by regularly monitoring its current and expected liquidity requirements rather than using debt/equity ratio analyses. The Foundation’s accumulated fund at the end of the reporting period was HK$18,340,893.19 (2018: HK$26,013,991.02). The Foundation’s operation is wholly sourced from its accumulated fund. ‘The Foundation is not subject to either internally or externally imposed capital requirements. POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVCE FOR ‘THE ANNUAL ACCOUNTING YEAR ENDED 31°? DECEMBER, 2019 Up to the date of issue of these financial statements, the HKICPA has issued a number of amendments, new standards and interpretations which are not yet effective for the year ended 31° December, 2019 and which have not been adopted in these financial statements. ‘The Foundation is in the process of making an assessment of what the impact of these amendments, new standards and new interpretations is expected to be in the period of initial application, So far it has concluded that the adoption of them is unlikely to have a significant impact on the Foundation’s results of operations and financial position.