HONG WAI (CHAJUTY) FUNDING LIMITED

REPORT OF THE DIRECTORS AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2016

HONG WAI (CHARI TY) FUNDING LIMITED (incorporated in Hon g Kong with limited liabili ty by guarantee)

The directors have pleasure in presenting the report together with the audited financial statements for the year ended 31 December 2016.

PRINCIPAL ACTMTY The principal activity of the company providing non-profit social welfare services for the year ended 31 December 2016.

RESULTS The results of the company for the year ended 31 December 2016 and the state of the company's affairs as at that date are set out in the accompanying financial statements.

DIRECTOR Directors who held office during the year ended 31 December 2016 and up to the date of this report were:-

Lee Ming Fai Chui Kwan Siu

In accordance with the company's Articles of Association , all the directors retire and being eligible, offer themselves for re-election.

DIRECTORS' INTEREST CONTRACTS Except for the note 9 to the financial statements, no other contracts of significance in relation to the company's business to which the company was a party and in which a director had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year.

At no time during the year was the company a party to any arrangements to enable the directors of the company to acquire benefits by means of acquisition of shares in or debentures of the company or any other body corporate.

MANAGEMEN T CONTRACTS No contracts concerning the management and administration of the whole or any substantial part of the business of the association were entered into or existed during the year.

AUDITORS The financial statements have been audited by Cban Lai Kan1 Ce11ified Public Accountant (Practising), who retire and, being eligible offer themselves for re-appointment at the forthcoming Annual General Meeting.

By Order of the Committee

Chau an Hong Kong, 30 ugust 2017

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CHAN LAI KAM Ce rtifi ed Public Accounta nt

ROOM A(23), 3/F, CHEONG SUN TOWE R, 116-118 WING LOK STREET, SHEUNG WAN, HONG KONG Tel: 6018 999 3 Fax: 6018 999 3

INDEPENDENT AUDITORS' REP ORT TO THE SHAREH OLDER S OF HONG WAI (CHARITY) FUNDING LIMITED (incorporated in Hong Kong with Limited liability by guarantee)

Opinion We have audited the financial statements of Hong Wai (Charity) Funding Limited (the "Company") set out on pages 6 to 11, which comprise the statement of financial position as at 31 December 2016, and the income statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In om opinion, the financial statements of the Company are prepared, in all material respects, in accordance with the Hong Kong Small and Medium-Sized Entity Financial Reporting Standard ("SMEFRS") 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") and with reference to PN 900 (Revised) Audit of Financial Statements Prepared in Accordance with the Small and Medium-Sized Entity Financial Reporting Standard 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 Company in accordance with the HKICPA's Code of Ethics for Professional Accountants ("the Code"), and we have fulfilled ow· other responsib ilities 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.

Responsibilitie s of Directors and Those Charged with Governance for the Financial Statements The directors are responsible for the preparation of the financial statements in accordance with the SME-FRS 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 enor .

In preparing the financial statements, the directors are responsibl e for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

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CHAN LAI KAM Ce rtifi ed Public Acco ua tant

ROOM A(23), 3/F, CHEONG SUN TOWER , 116-1 18 WING LOK STREET, SHEUNG WAN, HONG KONG Tel: 6018 9993 Fax: 6018 9993

Auditor's Responsibilities for the Audit of the Financi al Statemen ts 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 repo1i that includes our opinion. This report is made solely to you, as a body, in accordance with the Hong Kong Companies Ordinance. We do not asswne responsibility towards or accept liability to any other person for the contents of this 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 ovenide of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedW"es that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company 's internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

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CHAN LAI KAM Certified Public Accountant ROOM A(23), 3/F, CHEONG SUN TOWER, 116-118 WJNG LOK STREET, SHEUNG WAN, HONG KONG Tel: 6018 9993 Fax: 6018 9993

Conclude on the approp riateness of the directors· use of the going concern basis of account ing and, based on the aud it evidence obtai ned, whe ther a material uncerta inty exists related to events or conditions that may cast significant doubt on the Company· s ability to continue as a go ing concern. 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 inadequat e, to modify our opinion. Our conclu sions are based on the audit ev idence obtained up to the date of our aud itor" s report. However. future events or conditions may cause the Company to cease to continue as a going concern.

Obtain sufficient appropriate aud it evidence regarding the financiaJ infonnation of the entities or business activ ities within the Company to express an opin ion on the financ ial statements. We are responsible for the direction, superv ision and performance of the Company audit. We rema in sole ly responsible for our audit op inion .

We communi cate with those charged with gove rnance regarding , among other matters , the planned scope and timing of the aud it and significant audit findings , including any significant deficiencies in internal control that we identify during our audit.

Chan Lai Kam Certified Publi c Accountant (Practising) Room A(23), 3/F , Cheong Sun Tower , l 16-1 I 8 Wing Lok Street, Sheung Wan , Hong Kong 30 August 2017

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HONG WAC (CHARITY) FUNDJNG LIMITED

INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2016

Revenue

Operating expenses

Profit/(loss) before taxation

Taxation

Profit/(loss) for the year/period

Note

3

4

5

01.01.2016 26.01.20] 5

TO TO 31. 12.2016 3 1.12.2015

HK$ HK$

17,316 10,520

(13,4 15) ( 14,520)

3,901 (4,000)

3,90 1 (4,000)

The accompany ing Accounting Polici es and Explanatory Notes form an integral pru.1 of, and should be read in conjunction with, these financial statements .

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HONG WAI (CHARITY) FUNDING LIMITED

ST A TEMENT OF FINANCIAL POSITION AS AT 31 DECEME R 2015

ASSETS Current assets Cas h and cash equivalents

Current liabiliti es Accounts payable and accruals

Net current liabil ties

Net liabilties

REP RESENTING : Accumulated deficit

De ficit

Note

7

8

by the Board of directors on 30 August 20 17

Lee Ming Fai Director

Chui Kwan Siu Direc tor

3J. 12.2016 HK$

3,90 1

3,90 1

4,000

4,000

(99)

(99)

(99)

(99)

31.12 .20 15 HK$

4,000

4 .000

(4,000)

(4,000)

(4 ,000)

(4,000)

The accompanyin g Accountin g Policies and Explanatory Notes form an integral part of, and should be read in conjunction with , these financial statements.

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HONG WAI (CHARITY) FUNDING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Hong Wai (Charity) Funding Lim ited is incorporated under the Hong Kong Companies Ordinance as a company limited by guara ntee without a sluu-e cap ital. Every member of the associat ion undertakes to contrib ute to the assets of the assoc iation, in the event of its being wound up, such amo unt as may be requr ied not exceed in~ one hundJed dollars. The address of its reg istered office is Fla t BI, 3/F, Fuk Mm~ Building, 32-40 Fuk 1 sun Street, Tai Kok Tsui, Kow loon, Hong Kong. The financial statemen ts 11ave been approved for issue by the Board of Di1·ectors on 30August2017.

The principa l activities of the Company are providing non-profit social welfare serv ices .

The financial sta tements ru·e presented in Hong Kong dollars wh ich is the same as the finctional currency of the Company.

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES

The company qualifies fo r the reporting exemption as a smal l private company under section 359(l)(a) of the Hong Kong Companies Ordinance (Cap. 622) and is therefore entitled to prepare and present its financial statements in accordance with the Small and Medium-sized Ent ity Financ ial Reporting Standard (SME-FRS) issued by the Hong Kong Institut e of Certified Public Accounta nts.

Th ese financial sta tements comp ly with the SME-FRS and have been prepared under the accrual basis of acco untin g and on the basis that the company is a going concern.

The measurement base adopted is the historical cost convent ion.

The foJ!owing are the specific accounting policies that are necessary for a proper understanding of the financial sta tements:

(a) Revenue

Revenue is recognised when it is probable that the economic benefits will flow to the company and when the revenue can be measured reliably, on the following bases:

(i) sale of goods is recognised when the goods are del ivered and the r isks and rewards of owners hip have passed to the custo mer; and

(ii) interest income is recognised on a time proportion basis taking into acco unt the principal outstand ing and the interest applicab le;

(b) Borrowing costs

Borrowing costs a.re recogn ised as an expense in the period in which they ru·e incurred.

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(c) Foreign exchan ge

The reportin g currency of the company is Hong Kon g Dol lars, which is the currency of the primar y eco nomic environm ent in which the compan y operaLes.

Foreign currency transactions are converted at the exchange rate applicable at the transaction date. Fore ign currency monetary items are tran slated into Hong Kon g Doll ars using exchange rates appli cable at the end of the reporting period. Gains and losses on foreign exc hange are recognised in the income statement.

(d) Taxa tion

Income tax expense represe nts current tax expense. The income tax payab le represe nts the amounts expected to be paid to the taxation authorit y, using the tax rates (and tax laws) that have been enacted or substanti vely enacted by the end of the reporting peri od.

Deferred tax is not provided.

(e) Prop erty, plant and equipm ent

Property , plant and equipm ent are stated at cost less accumulated depreciation and accumul ated impairment losses . Th e depre ciab le amount of an item of property, plant and equip ment is al located on a systematic basis over its estimat ed useful Life using the straight-line method . The principal annual rates used for depreciation are as fo llows:

Lease hold improvement Equipm ent

(f) Impainn ent of asse ts

Over the lease 25%

An assess ment is made at the end of each reporting period to determin e wheth er there is any indication of impairment or reversal of prev ious impairm ent, includin g items of prop erty, plant and equipm ent, intangib le asse ts and long-tem1 investments. ln the even t that an asse t's cmTying amount exceeds its recove rable amount, the carrying amount is reduced to recovera ble amount and an impairment loss is recog nised in the inco me statem ent. A previously recognised impairment loss is reverse d only if there has been a change in the estimates used to determine the recoverab le amount, however not to an amount higher than the carry ing amount that wou ld have been determined (net of amortisation or depreciation ), had no impairment losses been recogni sed for the asse t in prior years.

(g) Leases

Leases that transfer substantially all the rewar ds and risks of ownership of asse ts to the compan y are acco unted for as finance leases . At the incep tion of a finance lease, the cos t of the leased asse t is capitalised at the fair value of the leased asse t or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liabili ty so as to achieve a cons tant rate of interest on the remaining ba lance of the liability. Finan ce charges are charged to the income statement.

Capitali sed lease d assets are depreciated over the shorter of the estimated useful life of the asse t or the lease ter m.

Leases where substantially all the risks and reward s of ownership of asse ts are not transferred to the lessee are acco unted for as operating leases . Annu al rents applicable to such opera ting leases are charged to the income statement on a str aight-line basis over the lease term.

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(h) Inventories

Inventories are stated at the lower of cost (using a firs t-in-first-out basis) and net real isable value. ln arriving at net realisable value an allowance has been made for deterioration and obsolescence.

(i) Trade and other receivables

Trade and other receivab les are stated at estimated realisab le va lue after each debt has been considered individ ually. Where the payment of a debt becomes doubtful a provision is made and charged to the inco me statement.

(j) Cash and cash equiva lents

Cash and cash equivalents comprise cash at bank and on hand and short-term, hig h ly liquid investments that are readi ly convertible into known amounts of cash and which are subject to an insig11ificant risk of changes in value. Bank overdrafts that are repayable on demand and form an integral part of the company's cash management are also included as a component of cash and cash equivalents for the purpose of the cash flow statement.

3. REVENUE

Revenues recognised by the company during the year are as follows:

01.01.20 L6 26.01.20 15

TO TO 31.12.20 16 31.12.20 15

HK$ HK$ Donation income 17,3 16 10,520

4. OPERATING EXPENSES

01.01.2016 26.01.2015

TO TO 31.12.2016 31. 12.2015

HK$ HK.$

Audit fee 4,000 4,000 Bank charges 150 Business registerat ion fee 2,420 Professional fee 1,000 8,000 Sundry expenses 100 Printing and stationery 1,135 Telecommunciation 7, 130

13,4J 5 14,520

10

5. TAXATION

No Hong Kong profit s tax has been provided in the financia l statement s as in the opinion of the

members, the association is not deemed to be chargeable to profits tax under sec tion 24( l ) of the Inland Revenu e Ordinanc e

There was no materia l unprovided deferred income tax as at and for the yea r ended 3 1 Decemb er 2016.

6. CASH AND CASH EQUIVALENTS

31.12.2016

HK$

Cash at bank 3,901

7. ACCUMULATED DEFICIT

0L.0L.2016

TO

3 1. 12.2016

HK$

Opening balance (4,000) Profit/ (loss) for the year/period 3,901

Closing balance (99)

8 DIRECTORS ' REMUNERATION

3 1.12.2015

HK$

26.0 1.20 15

TO 3l.l2.2015

HK $

(4,000)

(4,000)

Di.rectors' remun era tion disclose d pursuant to sec tion 78 of Schedule I I to the Hong Kong Companies Ordinance (Cap. 622), which require s compliance with sec tion 161 of the predece ssor Hong Kong Companies Ordinance (Cap. 32), is as follows:-

Fees Other emoluments

9. RELATED PARTIES TRANSACTIONS

01.01. 2016

TO 31.12.20 I 6

HK$

26.01.2015

TO 31.12.20 I 5

HK$

Related pa rties are those parties which have the ability, directly or indirect ly, to control the other party or exercise significant influenc e over the other party in making financial and operatin g deci sions . Partie s are also considered to be related if Ibey are subject to co mmon control or common significant influence.

(a) Balances with related parties

There are no other significan t balance s with related parties.

(b) Key ma nagement personne l remuneration

Key management personne l remuneration was fully disclosed in note 8 to the financial sta tements.

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