WAH YAN ONE FAMILY Ft A TION LIMITED REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2020 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 8 STATEMENT OF CASH FLOWS 9 NOTES TO THE FINANCIAL STATEMENTS 10-30WAH YAN FAMILY FOUNDATI LIMITED REPORT OF THE DIRECTORS ‘The directors present their report and the audited financial statements of the Foundation for the year ended 31% December, 2020. PRINCIPAL ACTIVITY 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, 2020 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. Cheung Hon Kit ~ Chairman Mr. Wu Ting Yuk Anthony — Vice-Chairman (Appointed on 30/9/2020) Rev. Fr. Chow Sau Yan Stephen 8.]. Mr. Lai Wing Hong Joseph Rev. Fr. Lo Pak Huen William S.J. ‘Mr. Kwan Ping Yiu Martin Mr. Chui Man Lung Everett Mr. Tse Lin Fung Charles Mr. Liu Wai Lun Jeffrey Mr. Lau Fu Wing Eddie Rev. Fr. Tsui Lap Yan Clement 8.J. Mr. Lam Sze Wai Stephen Mr. Tse Kam Ming Laurence (Appointed on 30/9/2020) Mr. Cheung Kin Kwong Clement (Appointed on 30/9/2020) Mr. Fong Hup (Retired on 30/9/2020) Mr. Yuen Tin Fan Francis (Retired on 30/9/2020) Mr. Zen Wei Peu (Retired on 30/9/2020) 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 ‘Mr. Fong Hup — Hon. Advisor (Appointed on 30/ 2020) 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 TRANSACTIONS, ARRANGEMENTS OR CONTRACTS No transactions, arrangements or contracts of significance to which the Foundation was a party and in which a director of the Foundation or an entity connected with a director is or was materially interested, whether directly or indirectly, subsisted during or at the end of the financial year. DIRECTORS’ RIGHTS TO ACQUIRE DEBENTURES Atno 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 Cheung Hon Kit Chairman Hong Kong 29 JUL 2021PAUL W.C. HO & COMPANY Aye Eat BAT Certified Public Accountants (Practising) Unit 1701, 17° Floor, The Sun's Group Centre, AME Hr 200 8 No. 200 Gloucester Road, Wanchai, Hong Kong. SEAM Pe 1TH TOL Tel “& #5 852) 2815 4212/ (852) 2815 4546 Fox A (852) 2854 3761 Email ‘© info@paulho.com.hk Website #93: 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) Opinion We have audited the financial statements of Wah Yan One Family Foundation Limited (“the Foundation”) set out on pages 6 to 30, which comprise the statement of financial position as at 31 December, 2020, and the statement of income and expenditure and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements give a true and fair view of the financial position of the Foundation as at 31° December, 2020 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, ur 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 Ate ERS AT Certified Public Accountants (Practising) Unit 1701, 17" Floor, The Sun's Group Centre, HG EL rth 200 a No. 200 Gloucester Road, Wanchai, Hong Kong. AK Pos 17 aR TOL = Tel &25(852) 2815 4212 / (852) 2815 4546 Fax 4H (852) 2854 3761 Email ‘© #% info@pautho.com.hk Website #3: 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 concen and using the going concer 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, misrepresentations, or the override of internal control.PAUL W.C. HO & COMPANY Aq AE SS Bt BRAT Certified Public Accountants (Practising) Unit 1701, 17 Floor, The Sun's Group Centre, SME a Arik 200 ot No. 200 Gloucester Road, Wanchai, Hong Kong aR Poe 17 A TOL = Tel “$25 (852) 2815 4212 / (852) 2815 4546 Fax 48 (852) 2854 3761 Email €f info@paulho.com.hk Website dE 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) Auditor’s responsibilities for the audit of the financial statements (Cont'd) = Obtain an understanding of intemal 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 intemal 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 concer 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 concem. ~ 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 intemal control that we identify during our audit. Paul W. C. Ho & Company Certified Public Accountants (Practising) Hong Kong 29 JUL 2021WAH YAN ONE FAMILY FOUNDATION LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31°" DECEMBER, 2020 NOTES 2020 2019 HKS HKS CURRENT ASSETS Accounts receivable and deposits 7 64,600.00 1,039,800. Time and call deposits 8 557,308.57 5,565,006.32 Bank balances 1,877,786.98 1,913,984.65, 2,499,695.55 _8,518,790.97 DEDUCT: CURRENT LIABILITY Accounts payable and accruals 3 (5,186,146.39) (6,697,341.78) NET CURRENT (LIABILITYYASSETS (2,686,450.84) _1,821,449.19 NON-CURRENT ASSETS Ayailable-for-sale financial assets - Listed equity securities 106) 1,335,700.00 _3,995,081.10 - Unlisted equity securities 10(4i) 7,513,829.64_ __12,524,362.90 8,849,529.64 __16,519,444.00 TOTAL NET ASSETS 6,163,078.80_ __18,340,893.19 REPRESENTING:- ACCUMULATED FUND GENERAL FUND Balance brought forward 61 29,524,094.13 Deficit for the year (12,947,058.15) _(8,724,258.52) Balance carried forward 7,852,777.46 — 20,799,835.61 INVESTMENT REVALUATION RESERVE, 14 (1,689,698.66) __(2,458,942.42) 6,163,078.80__ 18,340,893.19 The notes on pages 10 to 30 form an integral part of these financial statements. The financial statements were approved and authorised for issue by the Board of Directors on 29 JUL 202 _ Mr. Cheung Hon Kit Mr. Wu Ting Yuk Anthony Chairman. Vice-Chairman ZWAH YAN ONE FAMILY FOUNDATION LIMITED STATEMENT OF INCOME AND EXPENDITURE AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 315" DECEMBER, 2020, NOTES 2020 2019 HKS HKS INCOME Surplus from fund raising activities Gross donations and collections u 549,050.10 _2,189,861.10 Less: Direct expenditure u (715,545.00) __(117,441.30) Net (deficit)/surplus 2,072,419.80 OTHER INCOME Bank and bond interest income 660,901.27 840,502.98 Rebates and commissions received 47,480.00 61,543.00 Dividends received 54,430.70 275,951.10 TOTAL INCOME 596,317.07 3,250,416.88 LESS: EXPENDITURE Ee Insurance 16,522.48 16,464.87 ‘Staff salary and MPF contribution 963,500.00 1,018,999.99 Subsidies for school projects 12 | 10,343,248.17 — 10,476,738.92 Other expenses 13 61,228.31 60,976.60 Loss on disposal of listed shares and bonds 2,158,876.26 401,495.02 13,543,375.22) 11,974,675.40) DEFICIT FOR THE YEAR (12,947,058.15) _ (8,724,258.52) OTHER COMPREHENSIVE INCOME - - TOTAL COMPREHENSIVE DEFICIT (12,947,058.15) __(8,724,258.52) The notes on pages 10 to 30 form an integral part of these financial statements,WAH YAN ONE FAMILY FOUNDATION LIMITED STATEMENT OF CHANGES IN FUNDS AND RESERVES FOR THE YEAR ENDED 315? DECEMBER, 2020 2020 2019 HKS HKS Balance as at 1 January _18,340,893.19__26,013,991.02 Investment revaluation reserve Reversal for loss in value of listed equity securities 946,425.70 561,969.24 | (Deficit)/surplus on valuation of unlisted equity securities (177,181.94) 489,191.45 | 769,243.76 _1,051,160.69. Deficit for the year (12,947,058.15) _(8,724,258.52) TRANSFER TO ACCUMULATED FUND, 6,163,078.80__ 18,340,893.19 The notes on pages 10 to 30 form an integral part of these financial statements.WAH YAN ONE FAMILY FOUNDATION LIMITED. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 315" DECEMBER, 2020, 2020 2019 HKS HKS CASH FLOWS FROM OPERATING ACTIVITIES Deficit for the year (12,947,058.15) _(8,724,258.52) CHANGES IN WORKING CAPITAL Decrease/(increase) in accounts receivable and deposits 975,200.00 (594,300.00) (Decrease)/increase in accounts payable and accruals (1,511,195.39) __1,671,809.48 NET CASH USED IN OPERATING ACTIVITIES, (13,483,053.54) __(7,646,7 t). CASH FLOWS FROM INVESTING ACTIVITIES Purchase of listed equity securities (1,348,005.44) —_(1,508,627.75) Sale of listed equity securities and bonds 9,787,163.56 7,128,736.39 NET CASH FROM INVESTING ACTIVITIES, 8,439,158.12. 5,620,108.64 NET DECREASE IN CASH AND CASH EQUIVALENTS —_(5,043,895.42)__(2,026,640.40) CASH AND CASH EQUIVALENTS AT 1/1/2020 (Note 8) __7,478,990.97_ _9,505,631.37 CASH AND CASH EQUIVALENTS AT 31/12/2020 (Note 8)_2,435,095.55_ __7,478,990.97 The notes on pages 10 to 30 form an integral part of these financial statements.WAH YAN ONE FAMILY FOUNDATIC LIMITED TES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 315" DECEMBER, 2020, GENERAL INFORMATION 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 S DARDS The Foundation’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 prineiples 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 2020, 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, 2020. A summary of the changes in accounting policies resulting from the Foundation’s application of these HKFRSs is set out in Note 4.3. WAH YAN ONE FAMILY FOU. A TION LIMITED \TES TO THE FINANCIAL STAT FOR THE YEAR ENDED 31°" DECEMBER, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) 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)] (b) FOREIGN CURRENCY TRANSLATION @ Gi) Functional and presentation currency Items included in the financial statements of the Foundation are measured using the curreney 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, 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. (c) CASH AND CASH EQUIVALENTS, Cash comprises cash on hand and at bank and demand deposits with bank. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, bank overdrafts which are repayable on demand and form an integral part of the Foundation’s cash management are included as a ‘component of cash and cash equivalents.3. WAH YAN ONE FAMILY FOUNDATIC LIMITED )TES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2020 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 becomes party to the contractual provisions of the investments and are initially measured at fair value plus, in the case of investments other than trading securities, transaction costs. Investments are further categorised into the following classifications for the measurement after initial recognition, (Investments in equity instruments An investment in equity instruments is classified as fair value through statement of income and expenditure and other comprehensive income, except for those investments in equity instrument not held for trading and are designated as financial assets at fair value through other comprehensive income. The Foundation makes an irrevocable election at initial recognition for the investment in equity instruments to present subsequent changes in fair value in other comprehensive income. This election is made on an instrument-by-instrument (i.e. share-by-share) basis, Amounts presented in other comprehensive income for such investment are not be subsequently transferred to statement of income and expenditure and other comprehensive income until the investment is disposed of. At the time of disposal of an investment in equity instruments, the cumulative gain or loss of the investment is transferred from fair value reserves to retained earnings. 2WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31° DECEMBER, 2020 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) (©) INVESTMENTS (CONT'D) (i) Investments in non-equity instruments ‘An investment in non-equity instruments is classified as at: (@) Amortised cost — if the investment is held within a business model whose objective is to hold the investment in order to collect contractual cash flows, and the contractual terms of the investment give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. (b) Fair value through other comprehensive income ~ if the investment is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A gain or Joss on an investment in non-equity instruments measured at fair value through other comprehensive income is recognised in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the investment is derecognised, When such investment is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from fair value reserves equity to statement of income and expenditure and other comprehensive income as a reclassification adjustment. (©) Fair value through statement of income and expenditure and other comprehensive income — if the investments are not classified as at amortised cost and at fair value through other comprehensive income. (ii) Trading securities Investments in securities held for trading are classified as trading securities included in current assets and are stated at fair value. Any attributable transaction costs and gain or loss on the fair value changes of trading securities are recognised in statement of income and expenditure and other comprehensive income,WAH YAN FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS, FOR THE YEAR ENDED 31°" DECEMBER, 2020 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (© INVESTMENTS (CONT'D) (iv) Fair value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value of an investment on initial recognition is normally the transaction price, unless it is estimated by using a valuation technique when part of the consideration given or received is for something other than the investments, After initial recognition, the fair value of an investment quoted in an active market is based on the unadjusted quoted price and, for investments not quoted in an active market, the Foundation establishes the fair value of such investment by using a valuation technique. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models (¥)_ Impairment of investments and other financial assets The Foundation recognises loss allowances for expected credit loss on the financial instruments that are not measured at fair value through statement of income and expenditure and other comprehensive income. The Foundation considers the probability of default upon initial recognition of financial assets and assesses whether there has been a significant increase in credit risk on an ongoing basis. The Foundation considers the credit risk on a financial instrument is low if the financial instrument has a low risk of default, the debtor has a strong capacity to meet its contractual cash flow obligations in the near term and adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the debtor to fulfil its contractual cash flow obligations. The carrying amount of the receivables is reduced through the use of the receivable impairment charges account. Changes in the carrying amount of the receivable impairment charges account are recognised in statement of income and expenditure and other comprehensive income. The receivable is written off against the receivable impairment charges account when the Foundation has no reasonable expectations of recovering the receivable. If, in a subsequent period, the amount of expected credit losses decreases, the reversal would be adjusted to the receivable impairment charges account at the reporting date, The amount of any reversal is recognised in statement of income and expenditure and other comprehensive income. 43, WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) () ACCOUNTS RECEIVABLES Receivables are stated at amortised cost using the effective interest method less allowance for credit losses [see Note 3(h)]. (g) 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 liebilities unless the probability of outflow of economic benefits is remote.WAH YAN ONE FAMILY FOUNDATION LIMITED \TES TO THE FINANCIAL STATEMENTS, FOR THE YEAR ENDED 31°" DECEMBER, 2020 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (n) FINANCIAL INSTRUMENTS (@ Financial assets A financial asset (unless it is a accounts receivables without a significant financing component) is initially measured at fair value plus, for an item not at fair value through statement of income and expenditure and other comprehensive income CFVTPL”), transaction costs that are directly attributable to its acquisition or issue. ‘A accounts receivables without a significant financing component is initially measured at the transaction price. All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the Foundation commits to purchase or sell the asset Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the market place. Financial assets with embedded derivatives are considered in their entirely when determining whether their cash flows are solely payment of principal and interest. Subsequent measurement of debt instruments depends on the Foundation’s business model for managing the asset and the cash flow characteristics of the asset. The Foundation classifies its debt instruments as amortised cost. Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost, Financial assets at amortised cost are subsequently measured using the effective interest rate method. Interest income, foreign exchange gains and losses, and impairment are recognised in statement of income and expenditure and other comprehensive income. Any gain on derecognition is recognised in statement of income and expenditure and other comprehensive income.3 WAH YAN FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS, FOR THE YEAR ENDED 31°" DECEMBER, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) (h) FINANCIAL INSTRUMENTS (CONT'D) (ii) Impairment loss on financial assets ‘The Foundation recognises loss allowances for expected credit loss (“ECL”) on accounts receivables, financial assets measured at amortised cost. The ECLs are measured on either of the following bases: (1) 12 months ECLs: these are the ECLs that result from possible default events within the 12 months after the reporting date: and (2) lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument. The maximum period considered when estimating ECLs is the maximum contractual period over which the Foundation is exposed to credit risk. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the difference between all contractual cash flows that are due to the Foundation in accordance with the contract and all the cash flows that the Foundation expects to receive. The shortfall is then discounted at an approximation to the assets’ original effective interest rate. ‘The Foundation has elected to measure loss allowances for accounts receivables using HKFRS 9 simplified approach and has calculated ECLs based on lifetime ECLs. The Foundation has established @ provision matrix that is based on the Foundation’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. For other debt financial assets, the ECLs are based on the 12-months ECLs. However, when there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECLs. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Foundation considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information analysis, based on the Foundation’s historical experience and informed credit assessment and including forward-looking information. The Foundation assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due. The Foundation considers a financial asset to be credit-impaired when: (1) the borrower is unlikely to pay its credit obligations to the Foundation in full, without recourse by the Foundation to actions such as realising security (if any is held); or (2) the financial asset is more than 90 days past due. Interest income on credit-impaired financial assets is calculated based on the amortised cost (i.e. the gross carrying amount less loss allowance) of the financial asset. For non credit-impaired financial assets interest income is calculated based on the gross carrying amount. 73, WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL Si 'EMENTS FOR THE YEAR ENDED 315" DECEMBER, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) (h) FINANCIAL INSTRUMENTS (CONT’D) (iii) @) ) wi) Financial liabilities The Foundation classifies its financial liabilities depending on the purpose for which the liabilities were incurred. The Foundation’s financial liabilities at amortised cost including accounts and other payables and other short-term monetary liabilities. They are initially recognised at fair value, net of directly attributable costs incurred, and are subsequently measured at amortised cost, using the effective interest method. The related interest expense is recognised in statement of income and expenditure and other comprehensive income. Gains or losses are recognised in statement of income and expenditure and other comprehensive income when the liabilities are derecognised as well as through the amortisation process. Effective interest method The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial asset or liability, ot where appropriate, a shorter period. Equity instruments Equity instruments issued by the Foundation are recorded at the proceeds received, net of direct issue costs, Derecognition Financial assets are derecognised when the contractual rights to receive the cash flows of the financial assets expire; or where the Foundation transfers the financial assets and either (i) it has transferred substantially all the risks and rewards of ownership of the financial assets; or (ii) it has neither transferred nor retained substantially all the risks and rewards of ownership of the financial assets but has not retained control of the financial assets. Financial liabilities are derecognised when they are extinguished, i.e. when the obligation is discharged, cancelled or expires.3. WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°! DECEMBER, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) () STAFF RETIREMENT SCHEME. ‘The Foundation operates a defined contribution Mandatory Provident Fund retirement benefits scheme (the ‘MPE” 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, ) ACCOUNTS AND OTHER PAYABLES, Accounts and other payables are initially measured at fair value and, after initial recognition, at amortised cost, except for short-term payables with no stated interest rate and the effect of discounting being immaterial, that are measured at their original invoice amount. 19WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2020 CHANGES IN ACCOUNTING POLICIES In 2020, the Foundation has initially applied the new and revised HKFRSs issued by the HKICPA that are relevant to the Foundation’s financial statements, including: - Amendments to HKFRS 3, Business Combinations: Definition of a Business - Amendments to HKAS 1 and HKAS 8 Presentation of Financial Statements and Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Material - Amendment to HKFRS 16, Leases: Covid-19-Related Rent Concessions Other than the amendment to HKFRS 16, the Foundation has not applied any new standard or interpretation that is not yet effective for the current accounting period. The effects of the adoption of the amended HKERS is summarised below: Amendment to HKFRS 16, Leases: Covid-19-Related Rent Concessions The amendment provides a practical expedient that allows a lessee to by-pass the need to evaluate whether certain qualifying rent concessions occurring as a direct consequence of the COVID-19 pandemic (“COVID-19-related rent concessions”) are lease modifications and, instead, account for those rent concessions as if they were not lease modifications. ‘The Foundation has elected to early adopt the amendments and applies the practical expedient to all qualifying COVID-19-related rent concessions granted to the Foundation during the year. Consequently, rent concessions received have been accounted for as negative variable lease payments recognised in statement of income and expenditure and other comprehensive income in the year in which the event or condition that triggers those payments occurred. There is no impact on the opening balance of equity at 1* January, 2020. 20WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°! DECEMBER, 2020 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS, ‘The Foundation’s management makes assumptions, estimates and judgements in the process of applying the Foundation’s accounting policies that affect the assets, liabilities, income and expenses in the financial statements prepared in accordance with HKFRSs. The assumptions, estimates and judgements are based on historical experience and other factors that are believed to be reasonable under the circumstances. While the management reviews their judgements, estimates and assumptions continuously, the actual results will seldom equal to the estimates. (a) Key assumption Certain key assumptions and risk factors in respect of the financial risk management are set out in Note 6. (b) Critical judgements in applying the Foundation’s accounting policies Certain critical judgements in applying the Foundation’s accounting po follows (Significant increase in credit risk HKFRS 9 does not define what constitutes significant increase in credit risk. In assessing whether the credit risk of an asset has significantly increased the Foundation takes into account qualitative and quantitative reasonable and supportable forward looking information. There are no significant effects on amounts recognised in the financial statements arising from the judgment or estimates used by management. a6. WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 315T DECEMBER, 2020 FINANCIAL INSTRUMENTS ‘The Foundation has classified its financial assets in the following categories: Financial assets at amortised cost, 2020 2019 HKS HKS Accounts receivables and deposits 64,600.00 1,039,800.00 Cash at banks 1,877,786.98 —1,913,984.65 Time deposits 557,308.57 _ 5,565,006.32 2,499,695.55 _ 8,518,790.97 ‘The Foundation has classified its financial liability in the following categories: Financial liabilities at amortised cost 2020 2019 HK$ HK$ Accounts payable and accruals 5,186,146.39_ _ 6,697,341.78 All of the Foundation’s financial assets and financial liabilities are measured at amortised cost as at 31 December, 2020 and 2019. The director considers that the carrying amounts of financial assets and financial liabilities carried at amortised cost approximate their fair values. ‘The Foundation is exposed to credit risk, liquidity risk and market risk arising in the normal course of its business and financial instruments. The Foundation’s risk management objectives, policies and processes mainly focus on minimising the potential adverse effects of these risks on its financial performance and position by closely monitoring the individual exposure, (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, 2WAH YAN O! E FAMILY FOUNDATION LIMITED, NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31‘ DECEMBER, 2020 6. FINANCIAL INSTRU: § (CONT'D) (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 2M to 5® 1 year Years Total 1020 HKS HKS HKS. Accounts payable and accruals 5,186,146.39 = _5,186,146.39 Within 2 to 5* 1 year Years Total 2019 HKS HKS HKS Accounts payable and accruals 6,697,341.78 = _6,697,341.78 (@)_ 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, 23WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2020 6. FINANCIAL INSTRUMENTS (CONT'D) (©) 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 2020 2019 HKS HK$ Available-for-sale financial assets - Listed equity securities, at market value 1,335,700.00 _3,995,081.10 - Equities, bonds and convertibles, at market value _7,513,829.64_ _12,524,362.90 8,849,529.64_ _16,519,444.00 Sensitivity analysis A 10% increase in stock prices at 31° December, 2020 with all other variables held constant would have decreased deficit for the year by HK$884,952.96 (2019: HK$1,651,944.40) and increased equity by HK$884,952.96 (2019: HKS1,651,944.40). Conversely, if a 10% decrease in stock prices at 31 December, 2020 with all other variables held constant would have increased deficit for the year by HK$884,952.96 (2019: HKSI,651,944.40) and decreased equity by HK$884,952.96 (2019: HK$1,651,944.40). The sensitivity analysis has been prepared with the assumption that the change in equity price had oceurred 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 managements 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 2019. 4WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2020 ACCOUNTS RECEIVABLE AND DEPOSITS 2020 2019 HKS HKS Deposit for Anniversary Dinner - 990,000.00 Prepaid expenses for other anniversary programme 64,600.00 49,800.00 64,600.00_ _ 1,039,800.00 CASH AND CASH EQUIVALENTS 2020 2019 HKS. HKS, Short-term bank deposits 557,308.57 _§,565,006.32 Cash at banks 1,877,786.98 1,913,984.65 2,435,095.55__7,478,990.97 ‘The effective interest rates on short-term bank deposits were 0.05143% to 1.85000% (2019: 0.03101% to 1.81571%); these deposits have an average maturity period of 24 hours to one week, ACCOUNTS PAYABLE AND ACCRUALS 2020 2019 HKS HKS Subsidies committed to schools 5,000,000.00 —6,100,000.00 Accrued payroll and other expenses 82,344.90 126,829.90 Donations collected for special scholarship and projects __103,801.49 470,511.88 5,186,146.39__6,697,341.78WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°! DECEMBER, 2020 10. AVATLABLE-FOR-SALE FINANCIAL ASSETS (Listed equity securities 2020 2019 HKS HKS Listed equity securities in Hong Kong, at cost 1,348,005.44 4,953,812.24 (Less)/add: (Provision)/reversal for impairment loss transferred to investment revaluation reserve At 1* January (958,731.14) (1,520,700.38) Deduction 946,425.70 561,969.24 At31" December (12,305.44) (958,731.14) Market value of listed equity securities at 31% December 1,335,700.00_ _3,995,081.10 (ii) Unlisted equity securities 2020 2019 HK$ HK$ Bonds and convertible bonds, at cost 7,815,818.61 —12,727,376.90 Less: Deficit on valuation transferred to investment revaluation reserve At 1* January (1,500,211.28) — (1,989,402.73)| (Addition)/deduction (177,181.94) 489,191.45 At 31% December (1,677,393.22) _(1,500,211.28) Interest income receivable 122,434.81 217,110.51 Exchange differences 1,252,969.44 _1,080,086.77 Market value of unlisted equity securities at 31% December 7,513,829.64 —_12,524,362.90 26WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINAN JAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2020 il, SURPLUS FROM FUND RAISING ACTIVITIES 2020 2019 Donations and Direct Net surplus/ Net surplus/ collec expenditure (deficit) (deficit) HKS HK$ HKS HK$ General 144,977.00 ~~ 144,977.00 2,023,771.10 Marathon: 11,673.00 (6,720.00) 4,953.00 59,617.00 Blessing bags 392 0 _ (708,825.00) (316,424.90) (10,968.30) 549,050.10 _ (715,545.00) __ (166,494.90) _2,072,419.80 12. SUBSIDIES FOR SCHOOL PROJECTS 2020 2019 HKS HKS Small class teaching, educational psychologist, sports and other learning experiences 10,206,991.61 _ 10,200,000.00 Other sponsorship 136,256.56 276,738.92 10,343,248.17__10,476,738.92 13, OTHER EXPENSES 2020 2019 HKS HKS Bank and custodian charges 4,726.38 7,077.52 Office expenses 34,501.93 51,979.08 Computer and website expenses 22,000.00 1,920.00 61,228.31 60,976.60 214. 15, 16, 17, WAH YAN ONE FAMILY FOUNDATIOI UTED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31*' DECEMBER, 2020 INVESTMENT REVALUATION RESERVE Listed Unlisted securities securities Total HKS HKS HKS At 1/1/2019 (1,520,700.38) (1,989,402.73) _(3,510,103.11) Provision in the year [Note 10(i)&(ii)] 561,969.24 489,191.45 1,051,106.69 At31/12/2019 and 1/1/2020 (958,731.14) (1,500,211.28) _(2,458,942.42 Written back in the year [Note 10(i)&Gi)] 946,425.70 _(177,181.94) 169,243.76 At31/12/2020 12,305.44) —_(1,677,393.22)_(1,689,698.66) 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. TAXATIOI ‘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. 28WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°" DECEMBER, 2020 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 Level? __Level 3 Total HKS ‘KS HKS KS 2020 Available-for-sale financial assets - Unlisted equity securities 7,513,829.64 = ~ 1,513,829.64 - Listed equity securities in Hong Kong 1,335,700.00 1,335,700.00 8,849,529.64 8,849,529.64 Level Level? _Level 3 Total HKS HKS HKS 2019 Available-for-sale financial assets - Unlisted equity securities 12,524,362.90 ~ 12,524,362.90 - Listed equity securities in Hong Kong 3,995,081.10 3,995,081.10 16,519,444.00 7 16,519,444.00 During the year, the Foundation had no transfers between instruments in Level 1 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, 2919, WAH YAN ONE FAMILY FOUNDATION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31°' DECEMBER, 2020 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 concem, 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$6,163,078.80 (2019: HK$18,340,893.19). 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, 2020 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, 2020 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. 30