Vision Values Holdings Ltd. — Annual Report 2021

Oct 21, 2021

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Vision Values Holdings Limited

(Incorporated in the Cayman Islands with limited liability) Stock Code: 862

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2021 Annual Report

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CONTENTS

02 Corporate Information

• 03 Chairman’s Statement

• 08 Corporate Governance Report

• 19 Directors’ Profile

• 21 Directors’ Report

• 31 Independent Auditor’s Report

• 38 Financial Statements

• 103 Five-year Financial Summary

104 Schedule of Investment Properties

1

Annual Report 2021

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Corporate Information

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BOARD OF DIRECTORS

EXECUTIVE DIRECTORS

Mr. Lo Lin Shing, Simon (Chairman) Mr. Ho Hau Chong, Norman Ms. Yvette Ong Mr. Lo, Rex Cze Kei Mr. Lo, Chris Cze Wai

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Tsui Hing Chuen, William JP Mr. Lau Wai Piu Mr. Lee Kee Wai, Frank

REGISTERED OFFICE

Second Floor, Century Yard Cricket Square, P.O. Box 902 Grand Cayman, KY1-1103 Cayman Islands

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

Unit 902, 9th Floor Shui Hing Centre 13 Sheung Yuet Road, Kowloon Bay Hong Kong

COMPANY SECRETARY

Mr. Tang Chi Kei

INDEPENDENT AUDITOR

PricewaterhouseCoopers Certified Public Accountants Registered Public Interest Entity Auditor

PRINCIPAL SHARE REGISTRAR

Tricor Services (Cayman Islands) Limited Second Floor, Century Yard Cricket Square, P.O. Box 902 Grand Cayman, KY1-1103 Cayman Islands

HONG KONG BRANCH SHARE REGISTRAR

LEGAL ADVISER

Iu, Lai & Li Solicitors & Notaries

Tricor Abacus Limited Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong

PRINCIPAL BANKER

Public Bank (Hong Kong) Limited

STOCK CODE

862

AUDIT COMMITTEE

Mr. Lau Wai Piu (Chairman) Mr. Tsui Hing Chuen, William JP Mr. Lee Kee Wai, Frank

WEBSITE

www.visionvalues.com.hk

REMUNERATION COMMITTEE

Mr. Lau Wai Piu (Chairman) Mr. Tsui Hing Chuen, William JP Mr. Lee Kee Wai, Frank

2 Vision Values Holdings Limited

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Chairman’s Statement

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Dear Shareholders,

On behalf of the board of directors (the “ Board ”), I hereby present to the shareholders the annual results of Vision Values Holdings Limited (the “ Company ”) and its subsidiaries, (collectively the “ Group ”) for the year ended 30 June 2021 (the “ Financial Year ”).

FINANCIAL RESULTS SUMMARY

• Revenue for the Financial Year was HK$55.1 million (2020: HK$64.9 million).

• Loss attributable to owners of the Company was HK$68.9 million (2020: HK$108.3 million).

• Basic loss per share attributable to owners of the Company was HK cents 1.76 (2020: HK cents 2.76).

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW

1. Network Solutions and Project Services (“NSPS”)

2. The revenue achieved by NSPS during the Financial Year was HK$20.2 million (2020: HK$18.2 million). An increase of approximately 10.8% from last corresponding year. A breakdown of the revenue from NSPS was as follows:

3. (i) Telecom solutions was HK$1.7 million (2020: HK$1.6 million);

4. (ii) Enterprise solutions was HK$2.4 million (2020: HK$1.4 million);

5. (iii) Project services was HK$15.3 million (2020: HK$13.8 million); and

6. (iv) System maintenance was HK$0.8 million (2020: HK$1.4 million).

During the Financial Year, NSPS received subsidy of HK$0.7 million from the Employment Support Scheme fund (the “ Employment Fund ”) established by the Hong Kong Government. This subsidy helped to relieve the adverse impact on the NSPS’s business brought by the COVID-19 pandemic.

Among different revenue streams, the revenue generated from telecom solutions was lesser than enterprise solutions. However, in the foreseeable future, the revenue from telecom solutions is expected to expand since more projects on hand are belonging to telecom solutions.

NSPS achieved an increase in turnover when compared with last financial year despite the failure to renew an installation master contract for a major mobile network operator (the “ Mobile Operator ”) as disclosed in the Company’s announcement dated 30 October 2020. The completion of unfinished orders together with a new one off non-standard order from the Mobile Operator enabled the growth of revenue.

Annual Report 2021 3

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Chairman’s Statement (Continued)

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2. Property Investment

The policy of the Group’s investment properties is holding to earn rentals and/or for capital appreciation. The management will review the Group’s property portfolio from time to time to achieve this policy. The revenue for the Financial Year was HK$6.7 million (2020: HK$6.6 million). At the end of the Financial Year, all the investment properties were renting out except for the commercial building at 17/F., Henan Building, Wan Chai, Hong Kong. The rental contracts for our investment properties in Wan Chai and Central were renewed in 2021. The renewed tenancy agreements recorded reduction in rental by approximately 17.5% and 10.0% respectively. According to the rental indices for grade B private offices (all districts) issued by the Rating and Valuation department, the quarterly graph exhibited a sharp downward trend since the third quarter of 2019 and starting to stabilize at a lower lever from third quarter of 2020 onwards.

3. Yacht Construction and Trading

During the Financial Year, the sea trial of the yacht was conducted with satisfactory end-result. The construction of the yacht was officially finished but certain fine-tuning works were carried out from time to time. A shipping agent based in Hong Kong was appointed in March 2021 to promote the sale of the yacht inventory.

4. Exploration and Evaluation of Mineral Resources

FVSP LLC (“ FVSP ”), a 51% owned indirect subsidiary, holds a mining license number MV-021621 with gold and other mineral resources in Mongolia covering approximately 7,120 hectares (the “ Zoolon Gold Project ”). Based on the latest information, the estimated mineral resource in the main target area of Zoolon Gold Project is approximately 7.2 tonnes of gold under category B (measured) and 4.8 tonnes of gold under category C (indicated) under Mongolian official standard (the “ Zoolon Deposit ”).

During the Financial Year, FVSP officially commissioned the BGRIMM Technology Group, a leading institute incorporated in PRC providing innovative technology and process-orientated engineering services in mineral industries worldwide, to undertake the feasibility study of Zoolon deposit under Chinese and internationally accepted technical standards. Furthermore, Balchuluu LLC was appointed, a qualified institute in Mongolia, to undertake the feasibility study of Zoolon deposit under Mongolian technical standards. The technical assessment works are still ongoing and they may be completed by the end of 2021.

For the exploration works, FVSP was mainly working on Target 15 area. Based on the comprehensive interpretation and analysis of various data, we believe that the Target 15 area is similar to the Zoolon Deposit, with a low-temperature hydrothermal mineralization type. However, Target 15 area is more complicated in geology than Zoolon Deposit area because the ore bodies and rocks in Target 15 area have been severely destroyed by later fractured structures and magmatic intrusions, which has increased the difficulty of prospecting. Two (the southern and northern) mineralization zones were revealed in the Target 15 area and the northern zone initially revealed approximately 1.0 tonne of gold under category C (indicated) of Mongolian official standard at an average grade of 1.1g/t gold equivalent. It is indicated with more data and evidence that Zoolon Deposit and most of the target areas belong to the middle-low temperature hydrothermal mineralization type, and their genesis may be related to a porphyry mineralization system. We have been evaluating all data to determine potential targets of porphyry deposits and accordingly to make a follow-up exploration plan for next year.

4 Vision Values Holdings Limited

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Chairman’s Statement (Continued)

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5. Private Jet Management Services (“PJM”)

At the end of the Financial Year, three private jets (2020: four) were under aircraft management contracts (“ AMC ”) and two aircrafts (2020: one) were under ad hoc management contracts (“ AHC ”). The revenue for the Financial Year was HK$28.3 million (2020: HK$40.1 million). The worldwide travel restrictions continuously impacting private jet aviation causing a significant negative impact on the business of PJM. Furthermore, the business performance was also impacted by the COVID-19 related fee concessions of approximately HK$4.5 million (2020: Nil) granted to customers. One of the aircraft owners under AMC is considering to downgrade its management service to AHC. Another aircraft owner under AHC is considering to dispose of his aircraft therefore almost no ad hoc income derived from this aircraft since the second half of the Financial Year.

FINANCIAL REVIEW

1. Results Analysis

Revenue

During the Financial Year, the Group’s revenue decreased to HK$55.1 million (2020: HK$64.9 million). Around 51.3% (2020: 61.8%) of the Group’s revenue was generated from the private jet management services. The Group’s another core business is NSPS and it contributed around 36.6% (2020: 28.0%) of the total revenue. The remaining revenue was generated from property investment.

Other losses, net

Other losses, net was HK$11.0 million (2020: HK$17.8 million). At the end of the Financial Year, the management of the Group had assessed the net realizable value of the yacht inventory, taking the estimated costs to completion and the latest market prices of comparable yachts net of selling expenses into consideration. An independent valuer is appointed to carry out valuation and concluded that the assessed net realizable value was below the carrying amount. Accordingly, an impairment of HK$14.1 million (2020: HK$19.8 million) was made according to the Group’s accounting policies. Also included in the other losses, net was the Employment Fund received by the Group of HK$1.9 million (2020: HK$1.0 million).

Fair value losses on investment properties

The fair values of the Group’s investment properties at the end of the Financial Year were valued by an independent qualified valuer. The net decrease in carrying values consisted of (i) fair value loss on investment properties of HK$24.9 million (2020: HK$40.2 million) and (ii) gain on currency translation of HK$3.4 million on our investment properties in China (2020: loss on currency translation of HK$1.3 million). The COVID-19 outbreak has taken its toll on Hong Kong’s economy. The decrease in the fair values is mainly due to the persistent unfavorable property market conditions in Hong Kong influenced by the COVID-19 pandemic.

Other expenses

The major components of other expenses are: (a) auditor’s remuneration of HK$1.4 million (2020: HK$1.4 million); (b) legal and professional fee of HK$3.4 million (2020: HK$3.1 million); and (c) reimbursement of sharing of administrative services at cost basis of HK$7.3 million (2020: HK$6.9 million).

Finance costs

For the Financial Year, finance costs increased to HK$1.8 million (2020: HK$1.4 million). The increase in finance costs was mainly due to the increase in bank and other borrowings.

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Annual Report 2021

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Chairman’s Statement (Continued)

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2. Liquidity and Financial Resources

The Group had a short-term revolving bank loan facility totalling HK$68.0 million as at the end of the Financial Year (2020: HK$38.0 million), all of which had been drawn and outstanding. The bank loan facility is secured by an office premise and two parking spaces under the Group’s investment properties portfolio. The interest costs of the bank borrowings was charged at Hong Kong interbank offered rate (“ HIBOR ”) plus 1.5% per annum (2020: HIBOR plus 1.8%). Besides, Mr. Lo Lin Shing, Simon (“ Mr. Lo ”), being the Chairman and Director of the Company has provided a revolving standby facility to be matured on 30 June 2023 amounting to HK$50 million (2020: HK$16.0 million) by way of advances to the Group. The advances from Mr. Lo is unsecured and interest bearing at HK$ prime rate per annum. As at 30 June 2021, advances from Mr. Lo amounted to HK$29.1 million (2020: HK$8.7 million).

3. Gearing

As at 30 June 2021, the gearing ratio of the Group was 19.6% (2020: 9.7%) which was calculated based on the Group’s total borrowings to total assets.

4. Foreign Exchange

The Group’s key operations are located in Hong Kong, China and Mongolia. The Group’s assets and liabilities are mainly denominated in Hong Kong dollars, United States dollars and Renminbi. The Group does not establish a foreign currency hedging policy. However, management of the Group continues to monitor foreign exchange exposure and will consider hedging significant currency exposures should the need arise.

5. Contingent Liabilities

As at 30 June 2021, the Group did not have material contingent liabilities (2020: Nil).

BUSINESS OUTLOOK AND DEVELOPMENT

The global economy is recovered slowly and unevenly under the ongoing impact of COVID-19 pandemic. Though the COVID-19 vaccines are rolled out universally, the global pandemic is not yet over due to the emergence of more contagious new variants of COVID-19 virus. Hong Kong’s economy posted its fastest growth in more than a decade in the first quarter of 2021, though the recovery was an uneven one led mainly by exports and held back by weak consumer spending. All our business segments in the meantime are still negatively impacted by the COVID-19 pandemic.

As at 30 June 2021, the total amount of projects on hand for NSPS was approximately HK$9.5 million. Among them, HK$6.9 million belonged to the project services. Since NSPS failed to renew an installation contract with the Mobile Operator, we have strived our best to look for new sources of business. Cyber-on Air Asia Limited (“ COA ”), a subsidiary of the Group carrying on the business of NSPS, is enlisted by a major Hong Kong telecommunication operator to be its qualified cellular site contractor starting from July 2021. On the other hand, the Mobile Operator still considers COA to be a trust worthy partner and it will invite us to participate in other non-standard projects due to our good track record. Looking ahead, we have deep concern about the business prospects of NSPS. The Hong Kong economic outlook is still uncertain due to the coronavirus outbreaks driven by the delta variant in various countries. The persistent worldwide pandemic is causing the shortage of semiconductor and disruption in global supply-chain. Our key overseas suppliers such as Cambium, OSA and RAD etc., are adversely affected. These adverse factors causing more customers to delay or cancel their purchase decisions due to the price increment and long delivery time.

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Chairman’s Statement (Continued)

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For the property investment segment, we note that the tenants are extremely cautious on future development in view of the pandemic. For example, the tenant for our Wan Chai office preferred only to a shorter than normal lease term upon renewal of the tenancy agreement.

Hong Kong has a very mature yachting market. However, the majorities of marinas in Hong Kong offer berthing up to 35 meters, hence the market for 30-35 meters new-build yacht in Hong Kong are active. Apart from the berthing limitations of Hong Kong’s marinas, a further intricacy in the 35 meters plus sector is the more expensive price tag in the 35-60 meters size range. The size of our first built model is 43 meters therefore we need to spare more effort to find a prospective buyer.

For the private jet management segment, the business will only be resumed to normal until the recovery of global air traffic to pre-COVID-19 level.

In view of the present challenging environment, we will use our best endeavor to run our existing business. Besides, we will also actively look for other business opportunities which may add value to the Group and our shareholders. For example, we have started a new logistics business in Xinjiang, PRC after the Financial Year. Please refer to the Company’s announcement on 15 September 2021 for details.

APPRECIATION

On behalf of the Board, I would like to take this opportunity to express my sincere gratitude to all our management and colleagues for their valuable contribution to the Group. Moreover, I would also like to express appreciation to our valued shareholders, customers and business partners who have stood by the Group.

Lo Lin Shing, Simon Chairman

Hong Kong, 24 September 2021

Annual Report 2021 7

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Corporate Governance Report

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CORPORATE GOVERNANCE PRACTICES

The Board recognises the importance of maintaining a high standard of corporate governance practices to protect and enhance the benefits of the shareholders. The Board and the management of the Company have collective responsibility to maintain the interest of the shareholders and the sustainable development of the Group. The Board also believes that good corporate governance practices can facilitate growth of a company under a healthy governance structure and strengthen the confidence of shareholders and investors.

During the Financial Year, the Company had applied the principles of and complied with the code provisions of the Corporate Governance Code (the “ CG Code ”) as set out in Appendix 14 to the Rules Governing the Listing of Securities (the “ Listing Rules ”) on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”), save for the following deviations:

• i. Code provision A.2.1 of the CG Code stipulates that the roles of chairman and chief executive officer (“ CEO ”) should be separate and should not be performed by the same individual.

Mr. Lo is the chairman of the Company and has also carried out the responsibility of CEO. Mr. Lo possesses the essential leadership skills to manage the Board and extensive knowledge in the business of the Group. The Board considers the present structure is more suitable for the Company because it can promote the efficient formulation and implementation of the Company’s strategies.

• ii. Under the code provision A.4.1 of the CG Code, non-executive directors should be appointed for a specific term and subject to re-election.

None of the existing Independent Non-executive Directors, is appointed for a specific term which constitutes a deviation from the code provision A.4.1 of the CG Code. However, they are subject to retirement by rotation in accordance with the provisions of the Company’s articles of association (the “ Articles ”). Therefore, the Company considers that sufficient measures have been taken to ensure that the Company’s corporate governance practices are no less exacting than those of the CG Code.

iii. Code provisions A.5.1 to A.5.4 of the CG Code require a nomination committee to be set up, chaired by the chairman of the board or an independent non-executive director to review the structure, size and composition of the board at least annually to complement the issuer’s corporate strategy.

The Company has not set up a nomination committee as required. The Board considers that it should be the responsibility of the full Board to review these matters and make decisions from time to time. The Board has already set out the criteria for selection of a director under its internal policy. According to the Articles, any newly appointed Directors shall hold office only until the next annual general meeting (the “ AGM ”) and shall then be eligible for re-election at that meeting. Furthermore, the Director re-election process participating by the shareholders in the AGM and the rights of shareholders to nominate a Director both ensure a right candidate to be selected to serve the Board effectively.

• iv. Code provision E.1.2 of the CG Code stipulates that the chairman of the board should attend the AGM of the Company.

Due to another business engagement, the chairman of the Board did not attend the 2020 AGM. The chairman of the Audit and Remuneration committees of the Company had chaired the 2020 AGM and answered shareholders’ questions. The AGM of the Company provides a channel for communication between the Board and the shareholders.

8 Vision Values Holdings Limited

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Corporate Governance Report (Continued)

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COMPLIANCE WITH MODEL CODE FOR SECURITIES TRANSACTIONS

The Company has adopted its own Code for Securities Transactions by the Directors (the “ Code ”), which are on terms no less exacting than those set out in the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix 10 to the Listing Rules (the “ Model Code ”). The Code is sent to each Director on his/her initial appointment and from time to time when the same is amended or restated.

The Company has also established written guidelines on terms no less exacting than the Model Code (the “ Employees’ Guidelines ”) for securities transactions by relevant employees of the Group who are likely to be in possession of unpublished inside information of the Company. During the Financial Year, no incident of noncompliance with the Employees’ Guidelines by the employees was noted by the Company.

During the period of sixty days immediately preceding and including the publication date of the annual results or, if shorter, the period from the end of the relevant financial year up to and including the publication date of the annual results, all Directors and relevant employees are restricted to deal in the securities and derivatives of the Company until such results have been published.

During the period of thirty days immediately preceding and including the publication date of the half year results or, if shorter, the period from the end of the relevant financial quarterly or half year period up to and including the publication date of the half year results, all Directors and relevant employees are restricted to deal in the securities and derivatives of the Company until such results have been published.

The Company Secretary will send reminders prior to the commencement of such period to all Directors and relevant employees. Having made specific enquiry by the Company, all Directors have confirmed in writing that they have complied with the required standards set out in the Model Code and the Code throughout the Financial Year.

DIRECTORS AND OFFICERS LIABILITY INSURANCE

Good corporate governance and enterprise-wide risk management are essential for every business. The Company is convinced that corporate governance and Directors and Officers Liability Insurance (the “ D&O Insurance ”) complement each other. The Company has arranged appropriate D&O Insurance for the Directors and officers of the Group for indemnifying their liabilities arising from corporate activities. The D&O Insurance coverage is reviewed on an annual basis.

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Annual Report 2021

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Corporate Governance Report (Continued)

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BOARD OF DIRECTORS

BOARD COMPOSITION

The Board currently comprises five Executive Directors and three Independent Non-executive Directors, serving the important function of guiding the management. The Board members during the Financial Year and up to the date of this Report are:

Executive Directors

Mr. Lo Lin Shing, Simon (Chairman) Mr. Ho Hau Chong, Norman Ms. Yvette Ong Mr. Lo, Rex Cze Kei Mr. Lo, Chris Cze Wai

Independent Non-executive Directors

Mr. Tsui Hing Chuen, William JP

Mr. Lau Wai Piu

Mr. Lee Kee Wai, Frank

The Board will consider the following attributes or qualifications in evaluating membership in the Board:

• management and leadership experience;

• skills and diverse background;

• integrity and professionalism; and

• independency

The Company is in full compliance with the relevant Listing Rules relating to the appointment of at least three Independent Non-executive Directors, representing at least one-third of the Board, and at least one Independent Non-executive Director have appropriate accounting qualifications.

The Company has adopted a Board Diversity Policy (the “ Board Diversity Policy ”) setting out the approach to achieve diversity on the Board. In designing the Board’s composition, Board diversity would be considered from a number of aspects, including but not limited to gender, age, cultural and educational background, ethnicity, professional experience, skills, knowledge and length of service. All Board appointments will be based on meritocracy, and candidates would be considered against objective criteria, having due regard for the benefits of diversity on the Board. The Board Diversity Policy has been published on the Company’s website. Besides, the Company has also adopted a Nomination Policy for recruitment of members of the Board.

The Board will review its composition regularly to ensure that it has a balance of expertise, skills and experience appropriate to the business and development of the Company. The shareholders may propose a candidate for election as a director and the procedures have been published on the website of the Company.

10 Vision Values Holdings Limited

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Corporate Governance Report (Continued)

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All Independent Non-executive Directors are financially independent from the Company and any of its subsidiaries. The Company has received written annual confirmation of independence from each Independent Non-executive Directors pursuant to Rule 3.13 of the Listing Rules. Accordingly, the Company considers all Independent Nonexecutive Directors to be independent.

APPOINTMENT AND RE-ELECTION OF DIRECTORS

Potential new Directors are identified and considered for appointment by the Board. A Director appointed by the Board is subject to election by shareholders at the first AGM after his or her appointment, and all executive and non-executive Directors are subject to re-election by shareholders every three years. The general requirements for consideration include but not limited to his or her independence, availability, motivation, standing and business experience. The criteria have been set out in the Nomination Policy for Recruitment of Board Members, and published on the Company’s website.

Potential new Board members are identified on the basis of skills and experience with reference to the Nomination Policy for recruitment of Board members and Board Diversity Policy adopted by the Company which, in the opinion of the Directors, will enable them to make a positive contribution to the performance of the Board. Full details of the Board during the Financial Year and up to the date of this report are provided in the section of this annual report headed Directors’ Report.

RESPONSIBILITIES AND FUNCTIONS OF THE BOARD

The Board is responsible for formulating the strategic business development, reviewing and monitoring the business performance of the Group, as well as preparing and approving the consolidated financial statements. The Board is also responsible for developing and reviewing the Company’s policies on corporate governance and making recommendations. The Board as a whole and the management of the Company shall ensure good corporate governance practices and procedures are followed.

The Directors, collectively and individually, are aware of their responsibilities to shareholders, for the manner in which the affairs of the Company are managed and operated. In the appropriate circumstances and as when necessary, Directors will consent to the seeking of independent professional advice at the Group’s expense, ensuring that Board procedures, and all applicable rules and regulations, are followed.

The Board may delegate the management powers to the management of the Company. However, the delegation of power does not absolve the Directors from their responsibilities of exercising requisite skill, care and diligence in overseeing the performance of the Company. The Board can meet the management of the Company from time to time to discuss the operating issues of the Group. The Company has also issued formal appointment letters to all the Directors setting out the key terms and conditions of their respective appointments.

In order to enable the Directors to discharge their duties effectively, each Director has separate and independent access to members of the management to make enquiries or obtain necessary information. They may also seek advices and services from external experts and consultants at the Company’s expense for the purpose of facilitating them to make an informed decision.

All the independent non-executive Directors, are not involved in daily management. The independent non-executive Directors also give independent views on the deliberations of the Board and ensure high standards of corporate governance and financial probity.

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Corporate Governance Report (Continued)

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The Board is also responsible for performing the following corporate governance duties:

• i. to develop and review the Company’s policies on corporate governance and make recommendations;

• ii. to review and monitor the training and continuous professional development of the Directors and management;

• iii. to review and monitor the Company’s policies and practices on compliance with legal and regulatory requirements;

• iv. to develop, review, and monitor the code of conduct of employees and Directors; and

• v. to review the Company’s compliance with the code and disclosure in the Corporate Governance Report.

During the Financial Year, the Board:

• i. reviewed the performance of the Group and formulated business strategies of the Group;

• ii. reviewed and approved the annual and interim results of the Group;

• iii. reviewed the internal controls of the Group;

• iv. reviewed the corporate governance procedures;

• v. reviewed and proposed the general mandates to issue and repurchase shares of the Company at the AGM for the approval by the shareholders of the Company;

• vi. reviewed and approved the independent auditor’s remuneration and recommended the re-appointment of Messrs. PricewaterhouseCoopers (“ PwC ”) as the independent auditor of the Company respectively; and

• vii. reviewed and approved the inside information announcements.

During the Financial Year, the Board had not amended the Dividend Policy of the Company. Under the policy, the Board may propose payment of dividends for a financial year by taking into account the relevant factors when considering the proposal, and these factors include, among others, the actual and expected financial performances of the Group, retained earnings and distributable reserves, the level of the Group’s debts, return on equity and the relevant financial covenants that may be imposed by the Group’s lenders, the Group’s expected working capital requirements and future capital expenditure plans, general economic conditions, internal and/or external factors that may have an impact on the business or financial performance of the Group, etc. The Dividend Policy has been published and posted on the Company’s website.

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Corporate Governance Report (Continued)

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To the best knowledge of the Company, apart from the family relationship between Mr. Lo, Mr. Lo, Rex Cze Kei and Mr. Lo, Chris Cze Wai, there is no financial, business and family relationship among our Directors. All of them are free to exercise their independent judgments.

The Directors are aware of their commitments to the Company for contributing sufficient time and attentions to the management of the Company.

ACCOUNTABILITY AND AUDIT

The Directors acknowledge their responsibility for preparing the consolidated financial statements of each financial period, which give a true and fair view of the state of affairs of the Group and of the results and cash flow for that period. The Directors also ensure that the consolidated financial statements of the Group are prepared in accordance with the statutory requirements and applicable accounting policies.

The statement of the independent auditor of the Company about their reporting responsibilities on the consolidated financial statements is set out in the Independent Auditor’s Report on pages 31 to 37.

RISK MANAGEMENT AND INTERNAL CONTROL

The Board is responsible for the risk management and internal control systems of the Group so as to maintain sound and effective risk management and internal control to safeguard the shareholders’ investment and the assets of the Group.

The Board has established an on-going process for identifying, evaluating and managing the significant risks faced by the Group. This process includes continuous updating of the risk management and internal control systems of the Group in response to the changing business environment and regulatory requirements. The Group identifies risks relevant to its operations and activities, and assesses these risks in relation to their likelihood and potential impacts. The Group’s internal control system includes a well-defined management structure with clear lines of authority, which is designed to achieve business objectives, safeguard assets against unauthorized use or disposition, ensure proper maintenance of books and records for the provision of reliable financial information for internal use or publication, and ensure compliance with relevant legislations and regulations. Such systems are designed to manage, rather than eliminate the risk of failure to achieve business objectives, and aims to provide a reasonable, as opposed to an absolute assurance against material misstatement or loss. Besides, strict internal procedures and controls are implemented by the Group for the handling and dissemination of inside information.

The Board also conducts reviews of the risk management and internal control of the Group to ensure that the policies and procedures in place are adequate. The Board assesses the effectiveness of the Group’s risk management and internal control systems which covers all material control, including financial, operational and compliance control and risk management functions.

During the Financial Year, the Group engaged a professional advisory firm to be its internal auditor (the “ Internal Auditor ”). The Internal Auditor is reported directly to the Audit Committee. The Internal Auditor adopts a riskbased approach and independently review and test the controls over various selected operations and activities and evaluates their adequacy, effectiveness and compliance on an annual or ad hoc basis. Internal audit findings and recommendations are reported to the Audit Committee. In addition, progress on audit recommendations implementation will be followed up on a regular basis and discussed with the Audit Committee.

Annual Report 2021 13

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Corporate Governance Report (Continued)

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During annual review, the Audit Committee also considers the adequacy of resources, qualifications and experience of staff of the Group, and training programs and budgets of the Group’s accounting, internal audit and financial reporting functions. Based on the results of evaluations and representations made by the Internal Auditor and the independent auditor for the Financial Year, the Audit Committee was satisfied that there was an ongoing process for identifying, evaluating and managing the significant risks faced by the Group that would threaten the achievement of its business objectives; and an appropriate, effective and adequate system of internal control and enterprise risk management had been in place during the Financial Year.

To enhance the effectiveness of the risk management and internal control, the Company Secretary will ensure the Board and the Board Committees are provided with timely information and sufficient resources to enable them to efficaciously discharge their duties.

DIRECTORS’ TRAININGS AND CONTINUOUS PROFESSIONAL DEVELOPMENT

All Directors should participate in continuous professional development to develop and refresh their knowledge and skills in their roles as directors pursuant to code provision A.6.5 of the CG Code. The Company Secretary updates and provides written materials on the latest developments of applicable laws, corporate governance issues, rules and regulations to the Directors from time to time.

During the Financial Year, all the Directors, namely Mr. Lo, Mr. Ho Hau Chong, Norman, Ms. Yvette Ong, Mr. Lo, Rex Cze Kei, Mr. Lo, Chris Cze Wai, Mr. Tsui Hing Chuen, William JP, Mr. Lau Wai Piu and Mr. Lee Kee Wai, Frank, had participated in appropriate continuous professional development activities by ways of attending trainings and/or reading materials relating to the latest development of Listing Rules and other regulatory requirements relevant to the Group, general business or directors’ duties and responsibilities, etc.

CHAIRMAN AND CHIEF EXECUTIVE

The Chairman leads the Board in the determination of strategies and in the achievement of objectives and ensures that all directors are properly briefed on issues arising at the Board meetings and receive adequate, complete and reliable information. The Chief Executive is delegated with the authority and responsible for running the Company’s business, implementing the Company’s strategies in achieving business objectives. Both the Chairman and the Chief Executive positions are currently held by Mr. Lo. The Board believes that the current governance structure, with a combined Chairman and Chief Executive and more than one-third of the Board is non-executive directors, provides an effective balance of power and authority for the management of the Company and its in the best interest of the Company at the present stage.

INDEPENDENT NON-EXECUTIVE DIRECTORS

None of the existing Independent Non-executive Directors is appointed for a specific term.

14 Vision Values Holdings Limited

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Corporate Governance Report (Continued)

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BOARD COMMITTEES

The Board has established the Remuneration Committee and the Audit Committee, with specific terms of reference relating to their authorities and duties, which strengthen the Board’s functions and enhance its expertise.

Each committee makes decisions on matters within its terms of reference and applicable limits of authority. The terms of reference as well as the structure and membership of each committee will be reviewed from time to time.

REMUNERATION COMMITTEE

The Remuneration Committee is chaired by Mr. Lau Wai Piu with Mr. Tsui Hing Chuen, William JP and Mr. Lee Kee Wai, Frank as members. The Company has also appointed an external consultant to review and compare the level of compensation paid to the Directors with the prevailing market rates and give recommendation, and to review and study the remuneration level of the senior management of the Company and give recommendation.

The main responsibilities of the Remuneration Committee include, but are not limited to, making recommendations to the Board on the Company’s policy and structure for remuneration of all the Directors and senior management, reviewing and approving the special remuneration packages of all Executive Directors with reference to corporate goals and objectives resolved by the Board from time to time and by making recommendations to the Board on the remuneration packages of individual Executive Directors.

The terms of reference of the Remuneration Committee which was revised and adopted in March 2012 are in line with the requirements of the Listing Rules. Details of the terms of reference of the Remuneration Committee can be viewed on both the websites of the Stock Exchange and the Company.

During the Financial year, the Remuneration Committee:

• (i) reviewed and made recommendations on the remuneration policies; and

• (ii) reviewed the remuneration packages of the Directors and the senior management.

AUDIT COMMITTEE

The Audit Committee is chaired by Mr. Lau Wai Piu, with Mr. Tsui Hing Chuen, William JP, and Mr. Lee Kee Wai, Frank as members. All members are Independent Non-executive Directors. The Chairman of the Audit Committee has the appropriate professional qualification, accounting and related financial management expertise as required by the Listing Rules.

The main responsibilities of the Audit Committee include, but are not limited to, reviewing the Company’s current financial standing, considering the nature and scope of audit reports, and ensuring internal control and risk management systems operate in accordance with applicable standards and conventions.

The terms of reference of the Audit Committee, which was revised and adopted in December 2018, are in line with the requirements of the Listing Rules. Details of the terms of reference of the Audit Committee can be viewed on both the websites of the Stock Exchange and the Company.

Annual Report 2021 15

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Corporate Governance Report (Continued)

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During the Financial Year, the Audit Committee:

• (i) reviewed the consolidated financial statements for the year ended 30 June 2020 and for the six months ended 31 December 2020;

• (ii) reviewed the effectiveness of the internal control and risk management systems of the Group; and

• (iii) reviewed the independent auditor’s report.

ATTENDANCE RECORD OF DIRECTORS AND COMMITTEE MEMBERS

The attendance record of each Director and Board Committee meetings and the general meeting of the Company during the Financial Year is set out below:

					Continuous
					Professional
		Number of Meetings Attended/Held			Development
		Audit	Remuneration	Annual General	Type of
Name of Director	Board	Committee	Committee	Meeting	Training (Notes)
Mr. Lo	4/4	N/A	N/A	0/1	B
Mr. Ho Hau Chong, Norman	4/4	N/A	N/A	0/1	A, B
Ms. Yvette Ong	4/4	N/A	N/A	0/1	B
Mr. Lo, Rex Cze Kei	4/4	N/A	N/A	0/1	B
Mr. Lo, Chris Cze Wai	4/4	N/A	N/A	0/1	B
Mr. Tsui Hing Chuen, WilliamJP	4/4	2/2	1/1	0/1	B
Mr. Lau Wai Piu	4/4	2/2	1/1	1/1	B
Mr. Lee Kee Wai, Frank	4/4	2/2	1/1	0/1	B

Notes:

• A: attending seminars and/or professional conference and/or forums

• B: reading materials relating to the Group, general business or director’s duties and responsibilities, etc

For every Board and Board Committee meeting, each Director is required to declare whether he/she has any conflict of interests in the matters to be considered. If a substantial shareholder or a Director has a conflict of interests which is considered by the Board as material, the matters should be dealt with by a physical Board meeting rather than a written resolution.

Apart from the regular Board meetings, the Chairman had held a meeting with the Independent Non-Executive Directors without the presence of the other Executive Directors.

DIRECTORS’ TRAINING AND CONTINUOUS PROFESSIONAL DEVELOPMENT

All the Directors should participate in continuous professional development to develop and refresh their knowledge and skills in their roles as directors pursuant to Code Provision A.6.5 of the CG Code. Attendance to any professional courses recognised by registered professional bodies such as The Law Society of Hong Kong, The Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”), The Hong Kong Chartered Governance Institute (formerly known as The Hong Kong Institute of Chartered Secretaries) etc., are recognised by the Company for this purpose. The Directors will also be provided with materials from time to time to keep abreast of the latest legal and regulatory changes to enable them to effectively discharge their duties.

16 Vision Values Holdings Limited

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Corporate Governance Report (Continued)

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During the Financial Year, all the Directors had participated in appropriate continuous professional development activities by ways of attending training and/or reading material relevant to the Company’s businesses or to the Directors’ duties and responsibilities.

INDEPENDENT AUDITOR

During the Financial Year, PwC, the independent auditor of the Company, provided audit and non-audit services to the Group. The remuneration payable to PwC is set out below:

	HK$’000
Audit services	1,387
Non-audit services	26

INVESTOR RELATIONS

There is no change in the Company’s constitutional documents during the Financial Year. The latest version of the Articles is available on both the Company’s and the Exchange’s websites.

COMPANY SECRETARY

The Company Secretary of the Company is Mr. Tang Chi Kei. He has served as the Company Secretary since February 2007. He is a fellow member of the Association of Chartered Certified Accountants and a member of the HKICPA. Under the Articles, the appointment of the Company Secretary shall be determined by the Board. The Company Secretary shall attend all meetings of the shareholders and the Directors and shall keep minutes of such meetings and enter the same in the proper books provided for the purpose. For the year under review, the Company Secretary has taken no less than fifteen hours of relevant professional training under Rule 3.29 of the Listing Rules.

COMMUNICATION WITH SHAREHOLDERS

The Company is committed to maintaining an ongoing communication with the shareholders and providing timely disclosure of information concerning the Group’s material developments to the shareholders and investors.

Updated information about the announcements of the Group and the Company is posted on our website in a timely manner. The shareholders can communicate with the Company or the Board through the contact information provided on the website and in the general meetings of the Company.

The Company has complied with the Listing Rules regarding the requirements about voting by poll. An explanation will be provided by the chairman of a general meeting on the detailed procedures for conducting a poll. Specific enquiries by shareholders requiring the Board’s attention can be sent in writing to the Company Secretary at the Company’s principal place of business in Hong Kong.

Annual Report 2021 17

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Corporate Governance Report (Continued)

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SHAREHOLDERS’ RIGHTS

The Company has only one class of shares. All shares have the same voting rights and entitlement to any dividend declared. The rights of our shareholders are set out in, among others, the Articles and the Companies Law of the Cayman Islands.

CONVENING A GENERAL MEETING

Pursuant to Article 72 of the Articles, general meetings shall be convened on the written requisition of any two or more shareholders of the Company or on the written requisition of any one shareholder which is a recognised clearing house, deposited at the principal place of business of the Company in Hong Kong for the attention of the Company Secretary, specifying the objects of the meeting and signed by the requisitionists, provided that such requisitionists hold as at the date of deposit of the requisition not less than one-tenth of the paid up capital of the Company which carries the right of voting at the general meetings of the Company.

If the Board does not within twenty-one days from the date of deposit of the requisition proceed duly to convene the meeting, the requisitionists themselves or any of them representing more than one-half of the total voting rights of all of them, may convene a general meeting in the same manner, as nearly as possible, as that in which meeting may be convened by the Board provided that any meeting so convened shall not be held after the expiration of three months from the date of deposit of the requisition, and all reasonable expenses incurred by the requisitionists as a result of the failure of the Board to convene the meeting shall be reimbursed to them by the Company.

PROPOSING FOR ELECTION AS A DIRECTOR

If a shareholder wishes to propose a person other than a retiring Director of the Company for election as a Director at any general meeting, he/she can deposit a written notice to that effect at the principal place of business of the Company for the attention of the Company Secretary.

In order for the Company to inform its shareholders of that proposal, the written notice must state the full name of the person proposed for election as a Director, include the person’s biographical details as required by Rule 13.51(2) of the Listing Rules, and be signed by the shareholder concerned and that person indicating his/her willingness to be elected. The period for lodgment of such a written notice will commence no earlier than the day after the despatch of the notice and end no later than seven days prior to the date of any general meeting.

PUTTING FORWARD ENQUIRIES TO THE BOARD

Shareholders may send written enquiries together with their detailed contact information, by post to the Company’s principal place of business in Hong Kong or by e-mail to us at “Contact Us” of our website (www.visionvalues.com.hk) for the attention of the Company Secretary.

PUTTING FORWARD PROPOSALS AT GENERAL MEETING

Shareholders who wish to put forward a proposal for consideration at general meetings should convene an extraordinary general meeting by following the procedures set out in “Convening a General Meeting” above.

18 Vision Values Holdings Limited

Directors’ Profile

EXECUTIVE DIRECTORS

MR. LO LIN SHING, SIMON

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Mr. Lo, aged 65, joined the Company in March 2000 and is currently a Chairman and an Executive Director. He possess over 30 years of experience in the financial, securities and futures industries, including many trans-border transactions. Mr. Lo is a director of certain subsidiaries of the Company. He is also the chairman and executive director of Mongolia Energy Corporation Limited (“ MEC ”) which is listed on the Stock Exchange. He is the father of Mr. Lo, Rex Cze Kei and Lo, Chris Cze Wai, both are executive Directors of the Company.

MR. HO HAU CHONG, NORMAN

Mr. Ho, aged 66, was appointed as a Non-executive Director in November 2000 and re-designated as Executive Director in January 2007. He is an executive director of Honorway Investments Limited and Tak Hung (Holding) Company, Limited and has over 30 years of experience in management and property development. Mr. Ho is also an executive director of Miramar Hotel and Investment Company, Limited and an independent non-executive director of Hong Kong Ferry (Holdings) Company Limited, Lee Hing Development Limited and Shun Tak Holdings Limited respectively, all of which are listed on the Stock Exchange. Mr. Ho is a member of the Institute of Chartered Accountants in England and Wales, and a fellow member of the HKICPA.

MS. YVETTE ONG

Ms. Ong, aged 57, was appointed as an executive Director in February 2018. She has over 30 years of managerial experience in the Asia-Pacific region including worked as a managing director of AT&T EasyLink Services Asia Pacific Ltd. Ms. Ong holds an MBA degree in Management Information Systems and Marketing and a bachelor degree in Finance and Management from the University of San Francisco. She is a director of certain subsidiaries of the Company. Ms. Ong is also an executive director of MEC which is listed on the Stock Exchange.

MR. LO, REX CZE KEI

Mr. Rex Lo, aged 40, has been a Non-executive Director since November 2016 and re-designated as an executive Director since February 2018. He joined the Group in 2014. He has over 10 years of experience in property business and general management. Mr. Rex Lo holds a Master of Science in Electronic Commerce and Internet Computing and a Bachelor of Science in Business Administration. He is a director of certain subsidiaries of the Company. He is the son of Mr. Lo Lin Shing, Simon, the Chairman and the executive director of the Company and the brother of Mr. Lo, Chris Cze Wai, an executive director of the Company. Mr. Rex Lo is also an executive director of MEC which is listed on the Stock Exchange.

MR. LO, CHRIS CZE WAI

Mr. Chris Lo, aged 27, holds a master’s degree of Engineering in mechanical engineering from University of Bristol, UK. He joined the Group in 2017. He has experienced in property management and corporate finance. Mr. Chris Lo is a director of certain subsidiaries of the Company. He is the son of Mr. Lo Lin Shing, Simon, the chairman and the executive director of the Company and the brother of Lo, Rex Cze Kei, an executive director of the Company. Mr. Chris Lo is also an executive director of MEC which is listed on the Stock Exchange.

Annual Report 2021 19

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Directors’ Profile (Continued)

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INDEPENDENT NON-EXECUTIVE DIRECTORS

MR. TSUI HING CHUEN, WILLIAM JP

Mr. Tsui, aged 70, has been an Independent Non-executive Director since September 2006. He is the founding partner of Messrs. Lo, Wong & Tsui, Solicitors & Notaries, which was established in 1980. Mr. Tsui has been a solicitor of the High Court of Hong Kong since 1977, a solicitor of the Supreme Court of England & Wales since 1981, and a barrister and solicitor of the Supreme Court of Victoria, Australia since 1983. He has also been an advocate and solicitor in Singapore since 1985 and a notary public appointed by the Archbishop of Canterbury, England since 1988. Mr. Tsui was appointed as a Justice of the Peace by the Government of Hong Kong in 1997. He was admitted to the Roll of Honour of The Law Society of Hong Kong in 2013. Mr. Tsui is an independent non-executive director of MEC which is listed on the Stock Exchange.

MR. LAU WAI PIU

Mr. Lau, aged 57, has been an Independent Non-executive Director since March 2007. He has over 20 years of extensive experience in accounting and financial management. Mr. Lau is a member of the HKICPA and a fellow of the Association of Chartered Certified Accountants. Mr. Lau is an independent non-executive director of MEC which is listed on the Stock Exchange.

MR. LEE KEE WAI, FRANK

Mr. Lee, aged 62, has been an Independent Non-executive Director since April 2007 and is the Senior Partner of Messrs. Vincent T.K. Cheung, Yap & Co., Solicitors and Notaries. He holds a Bachelor of Laws from the London School of Economics & Political Science and obtained a Master of Law from University of Cambridge. Mr. Lee is a solicitor in the respective jurisdictions of Hong Kong, England, Singapore and the Australian Capital Territory (Australia). He is also a China-Appointed Attesting Officer and a member of the Chartered Institute of Arbitrators. Mr. Lee is also an independent non-executive director of Pico Far East Holdings Limited and MEC, both of which are listed on the Stock Exchange.

20 Vision Values Holdings Limited

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Directors’ Report

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The Directors present their report together with the audited consolidated financial statements of the Group for the Financial Year.

PRINCIPAL ACTIVITIES AND GEOGRAPHICAL ANALYSIS OF OPERATIONS

The Company acts as an investment holding Company and the key activities of its principal subsidiaries are set out in Note 20 to the consolidated financial statements. There were no significant changes in the nature of the Company’s and the Group’s principal activities during the year.

Analyses of the principal activities and geographical locations of the operations of the Group for the Financial Year are set out in Note 7 to the consolidated financial statements.

BUSINESS REVIEW

Reviews of the business of the Group during the Financial Year and discussions of the Group’s future business development are set out in the Management Discussion and Analysis and Business Outlook and Development on pages 3 to 5 and pages 6 to 7 respectively.

POSSIBLE RISKS AND UNCERTAINTIES

Descriptions of the possible risks and uncertainties facing the Group can be found throughout this Report, in particular, the Management Discussion and Analysis and Business Outlook and Development on pages 3 to 7 and Note 4 to the consolidated financial statements. The financial risk management objectives and policies of the Group can be found in Note 4.1 to the consolidated financial statements.

ENVIRONMENTAL PROTECTION AND COMPLIANCE WITH RELEVANT LAWS AND REGULATIONS

The Group is committed to contributing to the sustainability of the environment. The Group has implemented internal waste reduction program on a continuous basis, such as reuse the paper which has been used on one side only for scrap paper, make two-sided copies, etc.

During the Financial Year, the Board is of the opinion that the Group has complied with the relevant laws and regulations that have a significant impact on the Group in all material respects. The Group endeavours to refine the approach to addressing its environmental, social and ethical responsibilities along with improving our corporate governance and should generate greater value for all of our stakeholders including our shareholders, employees, customers, and suppliers as well as the communities.

Annual Report 2021 21

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Directors’ Report (Continued)

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KEY RELATIONSHIPS WITH STAKEHOLDERS

The Group provides a harmonious and professional working environment to employees and ensures they all are reasonable remunerated. The Company regularly reviews and updates its policies on remuneration and benefits, training, occupational health and safety.

The Group is committing to maintaining good relationship with business partners to achieve its long-term goals. During the Financial Year, there was no material and significant dispute between the Group and its business partners.

RESULTS AND APPROPRIATIONS

The results of the Group for the Financial Year are set out in the Consolidated Statement of Profit or Loss on page 38.

No interim dividend was declared (2020: Nil) and the Directors do not recommend the payment of a final dividend for the Financial Year (2020: Nil).

FIVE-YEAR FINANCIAL SUMMARY

A summary of the results for the Financial Year and of the assets and liabilities of the Group as at 30 June 2021 and for the last four financial years are set out on page 103.

SHARE CAPITAL

There was no movement in the share capital of the Company during the Financial Year.

PROPERTY, PLANT AND EQUIPMENT

Movements in property, plant and equipment of the Group during the Financial Year are set out in Note 16 to the consolidated financial statements.

DISTRIBUTABLE RESERVES

Distributable reserves of the Company at 30 June 2021, calculated under the Articles during the Financial Year are set out in Note 32 to the consolidated financial statements.

22 Vision Values Holdings Limited

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Directors’ Report (Continued)

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MAJOR SUPPLIERS AND CUSTOMERS

The percentages of purchases and sales for the Financial Year attributable to the Group’s major suppliers and customers are as follows:

PURCHASES

PURCHASES
the largest supplier	43%
five largest suppliers in aggregate	85%
SALES
the largest customer	28%
five largest customers in aggregate	90%

None of the Directors, their associates or any shareholder (which to the knowledge of the Directors owns more than 5% of the Company’s share capital) has any interest in the Group’s five largest suppliers or customers.

DIRECTORS

During the Financial Year and up to the date of this Report, the board composition and biographical details of the Directors of the Company are set out on pages 10 to 11, and pages 19 to 20 respectively.

In accordance with Article 116 of the Articles, Mr. Ho Hau Chong, Norman, Mr. Lo, Rex Cze Kei and Mr. Lee Kee Wai, Frank will retire by rotation and, being eligible, offer themselves for re-election at the forthcoming AGM.

The Directors, including the Independent Non-executive Directors, are subject to retirement by rotation and re-election at the AGM in accordance with the provisions of the Articles.

Annual Report 2021 23

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Directors’ Report (Continued)

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DIRECTORS’ INTERESTS AND SHORT POSITIONS IN SHARES OF THE COMPANY AND ITS ASSOCIATED CORPORATION

As at 30 June 2021, the interests or short positions of the Directors in the shares and underlying shares of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the “ SFO ”)) as recorded in the register required to be kept by the Company under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code were as follows:

LONG POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY

Name of Directors	Number of shares Personal interests Spouse interests Corporate interests Number of underlying shares pursuant to share options Total interests Percentage of shareholding
Mr. Lo Mr. Ho Hau Chong, Norman Ms. Yvette Ong Mr. Lo, Rex Cze Kei Mr. Lo, Chris Cze Wai Mr. Tsui Hing Chuen, WilliamJP Mr. Lau Wai Piu Mr. Lee Kee Wai, Frank	1,755,000 – 1,246,054,889 35,000,000 1,282,809,889 32.69% (Note) 17,821,973 – – 20,000,000 37,821,973 0.96% – – – 15,000,000 15,000,000 0.38% – – – 20,000,000 20,000,000 0.51% – – – 5,000,000 5,000,000 0.13% 1,365,131 – – 10,000,000 11,365,131 0.29% – – – 10,000,000 10,000,000 0.25% 6,404,605 – – 10,000,000 16,404,605 0.42%

Note: Moral Glory International Limited (“ Moral Glory ”), a company wholly-owned by Mr. Lo.

ASSOCIATED CORPORATION OF THE COMPANY

The following Director had interests in the shares of the associated corporation of the Company:

				Percentage of
			Number and class of	shareholding in the
Name of Director	Name of associated corporation	Capacity	securities interested	associated corporation
Mr. Lo	Mission Wealth Holdings Limited (Note)	Beneficial owner	490 ordinary shares	49%
			with no par value

Note: Mission Wealth Holdings Limited is a company incorporated in the British Virgin Islands which is a 51% owned subsidiary of the Company.

Save as disclosed above and the section headed “Share Option Scheme”, as at 30 June 2021, none of the Directors, chief executives and their respective associates had any interests in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be recorded in the register maintained by the Company under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

24 Vision Values Holdings Limited

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Directors’ Report (Continued)

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DISCLOSEABLE INTERESTS AND SHORT POSITIONS OF SUBSTANTIAL SHAREHOLDERS/ OTHER PERSONS UNDER THE SFO

The register of interests in shares and short positions maintained under section 336 of the SFO showed that as at 30 June 2021, the Company had been notified of the following interests in shares representing 5% or more of the Company’s issued share capital:

LONG POSITION AND SHORT POSITION OF SUBSTANTIAL SHAREHOLDERS/OTHER PERSONS IN THE SHARES AND/OR UNDERLYING SHARES

			Percentage of
			nominal value
		Number of	of issued share
Name of substantial shareholders	Capacity	shares	capital
Ms. Ku Ming Mei, Rouisa (Note)	Interest of spouse	1,282,809,889	32.69%
Moral Glory	Beneficial owner	1,246,054,889	31.75%

Note: Ms. Ku Ming Mei, Rouisa is the spouse of Mr. Lo and accordingly, she was deemed to be interested in 1,282,809,889 shares under the SFO.

DIRECTORS’ INTERESTS IN COMPETING BUSINESSES

During the Financial Year and up to the date of this Report, to the best knowledge of the Directors, none of the Directors and their respective associates were considered to have any interests in the businesses which compete or were likely to compete, either directly or indirectly, with the businesses of the Group, other than those businesses where the Directors were appointed as directors to represent the interests of the Company and/or the Group.

DIRECTORS’ INTERESTS IN CONTRACTS OF SIGNIFICANCE

Saved as disclosed elsewhere in the Directors’ Report, no contracts of significance to which the Company or any of its subsidiaries was a part 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 Financial Year.

PERMITTED INDEMNITY PROVISIONS

During the Financial Year and up to the date of this report, the Company has in force indemnity provisions as permitted under the relevant statutes for the benefit of the Directors (including former Directors) of the Company. The permitted indemnity provisions are provided for in the Articles and in the D&O Insurance maintained for the Group in respect of potential liability and costs associated with legal proceedings that may be brought against such Directors.

Annual Report 2021 25

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Directors’ Report (Continued)

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DIRECTORS’ SERVICE CONTRACTS

Mr. Lo has entered into a service contract with the Company for a fixed term of three years commencing on 1 April 2019, subject to retirement by rotation and re-election at AGM, and will continue thereafter until terminated in accordance with the terms of the service contract. The aforesaid service contract may be terminated by not less than one year’s notice in writing served by either party on the other. No Director proposed for re-election at the forthcoming AGM has a service contract which is not determinable by the Company or any of its subsidiaries within one year without payment of compensation, other than statutory compensation.

MANAGEMENT CONTRACTS

No contracts concerning the management and administration of the whole or any substantial part of the businesses of the Company was entered into or existed during the Financial Year.

EQUITY-LINKED AGREEMENTS

No equity-linked agreements which may result in the Company issuing shares was entered into or existing during the Financial Year, save for the share option scheme of the Company as set out in Note 27 to the consolidated financial statements and “Share Option Scheme” section contained in this Directors’ Report.

DIRECTORS’ RIGHTS TO ACQUIRE SHARES OR DEBENTURES

Save as disclosed under the section headed “Share Option Scheme” below, at no time during the Financial Year was the Company or any of its subsidiaries a party to any other arrangements to enable the Directors or chief executive or any of their spouse or children under 18 years of age to acquire benefits by means of the acquisition of shares in or debentures of the Company, its subsidiaries or any other body corporate.

SHARE OPTION SCHEME

Under the share option scheme adopted by the Company on 23 November 2011 (the “ Option Scheme ”), options were granted to certain Directors, employees and other eligible participants of the Company entitling them to subscribe for shares of HK$0.01 each in the capital of the Company.

The following is a summary of the terms of the Option Scheme:

1. PURPOSE

The purpose of the Option Scheme is to enable the Company to grant options to the participants as incentive or rewards for their contributions to the Group.

2. PARTICIPANTS

The participants of the Option Scheme include any Director, employee, consultant, agent, supplier, customer or shareholder of the Group or any entity in which the Group holds any equity interest.

26 Vision Values Holdings Limited

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Directors’ Report (Continued)

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3. NUMBER OF SHARES AVAILABLE FOR ISSUE

The total number of shares available for issue under the Option Scheme is 214,753,849 shares which represents 5.47% of the issued share capital of the Company as at 30 June 2021.

4. MAXIMUM ENTITLEMENT OF EACH PARTICIPANT

The total number of shares issued and to be issued upon exercise of the options granted to each participant (including exercised, cancelled and outstanding options) in any 12-month period must not exceed 1% of the shares of the Company in issue unless separately approved by the shareholders in general meeting.

5. OPTION PERIOD

An option may be exercised in accordance with the terms of the Option Scheme at any time during the period as the Board in its absolute discretion determines and in any event such period of time shall not be more than 10 years from the date upon which the offer of the option is made to the grantee.

6. VESTING PERIOD

The Directors may, if consider appropriate, determine the minimum period for which an option must be held before it can be exercised.

7. AMOUNT PAYABLE ON ACCEPTANCE OF OPTION

Upon acceptance of the offer for an option, the grantee shall pay HK$1.00 as consideration for the grant.

8. SUBSCRIPTION PRICE

The subscription price for a share in respect of any option granted shall be a price determined by the Board in its absolute discretion but shall be at least the highest of (i) the closing price of the shares as stated in the Stock Exchange’s daily quotations sheet on the date of grant; (ii) the average closing price of the shares as stated in the Stock Exchange’s daily quotations sheets for the five business day immediately preceding the date of grant; and (iii) the nominal value of a share.

9. LIFE OF THE OPTION SCHEME

The Option Scheme is valid and effective for a term of ten years commencing from 23 November 2011.

Annual Report 2021 27

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Directors’ Report (Continued)

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Details of the movement in outstanding share options, which have been granted under the Option Scheme, during the Financial Year were as below:

Name of category of participants Date of grant Exercise price Exercise period Vesting period HK$	Number of shares subject to options
	As at 1 July 2020 Granted during the Financial Year Lapsed during the Financial Year Exercised during the Financial Year As at 30 June 2021
Mr. Lo 07/04/2017 0.290 07/04/2017 to 06/04/2022 N/A 25/03/2020 0.274 25/03/2020 to 24/03/2025 N/A Mr. Ho Hau Chong, Norman 07/04/2017 0.290 07/04/2017 to 06/04/2022 N/A 25/03/2020 0.274 25/03/2020 to 24/03/2025 N/A Ms. Yvette Ong 07/04/2017 0.290 07/04/2017 to 06/04/2022 N/A 25/03/2020 0.274 25/03/2020 to 24/03/2025 N/A Mr. Lo, Rex Cze Kei 07/04/2017 0.290 07/04/2017 to 06/04/2022 N/A 25/03/2020 0.274 25/03/2020 to 24/03/2025 N/A Mr. Lo, Chris Cze Wai 25/03/2020 0.274 25/03/2020 to 24/03/2025 N/A Mr. Tsui Hing Chuen, WilliamJP 07/04/2017 0.290 07/04/2017 to 06/04/2022 N/A 25/03/2020 0.274 25/03/2020 to 24/03/2025 N/A Mr. Lau Wai Piu 07/04/2017 0.290 07/04/2017 to 06/04/2022 N/A 25/03/2020 0.274 25/03/2020 to 24/03/2025 N/A Mr. Lee Kee Wai, Frank 07/04/2017 0.290 07/04/2017 to 06/04/2022 N/A 25/03/2020 0.274 25/03/2020 to 24/03/2025 N/A Others categories in aggregate (including directors of subsidiaries and consultants) 07/04/2017 0.290 07/04/2017 to 06/04/2022 N/A 19/06/2018 0.496 19/12/2018 to 18/06/2023 19/06/2018 to 18/12/2018 19/06/2018 0.496 19/06/2019 to 18/06/2023 19/06/2018 to 18/06/2019 19/06/2018 0.496 19/12/2019 to 18/06/2023 19/06/2018 to 18/12/2019 19/06/2018 0.496 19/06/2020 to 18/06/2023 19/06/2018 to 18/06/2020 25/03/2020 0.274 25/03/2020 to 24/03/2025 N/A	17,000,000 – – – 17,000,000 18,000,000 – – – 18,000,000 10,000,000 – – – 10,000,000 10,000,000 – – – 10,000,000 5,000,000 – – – 5,000,000 10,000,000 – – – 10,000,000 10,000,000 – – – 10,000,000 10,000,000 – – – 10,000,000 5,000,000 – – – 5,000,000 5,000,000 – – – 5,000,000 5,000,000 – – – 5,000,000 5,000,000 – – – 5,000,000 5,000,000 – – – 5,000,000 5,000,000 – – – 5,000,000 5,000,000 – – – 5,000,000 63,000,000 – – – 63,000,000 6,250,000 – – – 6,250,000 6,250,000 – – – 6,250,000 6,250,000 – – – 6,250,000 6,250,000 – – – 6,250,000 83,000,000 – – – 83,000,000
Total	296,000,000 – – – 296,000,000

Save as disclosed above, at no time during the Financial Year was the Company or any of its subsidiaries a party to any other arrangements to enable the Directors or chief executive or any of their spouse or children under 18 years of age to acquire benefits by means of the acquisition of shares in or debentures of the Company, its subsidiaries or any other body corporate.

28 Vision Values Holdings Limited

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Directors’ Report (Continued)

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CONNECTED TRANSACTIONS

During the Financial Year, there were no connected transactions and continuing connected transactions which were required to be disclosed in accordance with the requirements of the Listing Rules.

None of the related party transactions as set out in Note 31 to the consolidated financial statements constituted a discloseable connected transaction under Chapter 14A of the Listing Rules.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

During the Financial Year, neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company’s listed securities.

TAX RELIEF AND EXEMPTION

The Company is not aware of any tax relief and exemption available to shareholders by reason of their holding of the Company’s securities.

PRE-EMPTIVE RIGHTS

There are no provisions for pre-emptive rights under the Articles and there was no restriction against such rights under the laws of Cayman Islands, which would oblige the Company to offer new shares on a pro-rata basis to existing shareholders.

EMOLUMENT POLICY

As at 30 June 2021, the Group had employed a total of 36 full-time employees (2020: 38). The emolument policy regarding the employees of the Group is based on their merit, qualifications and competence. The emoluments of the Directors are reviewed and determined by the Remuneration Committee, having regard to the Company’s operating results, individual performance and comparable market statistics. No Director, or any of his/her associates involved in deciding his/her own remuneration.

The Company has adopted a share option scheme as incentive to Directors and eligible employees, and details of the scheme are set out in Note 27 to the consolidated financial statement and the Share Option Scheme on page 26 to 28.

Annual Report 2021 29

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Directors’ Report (Continued)

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RETIREMENT BENEFITS SCHEME

Details of the retirement benefits scheme operated by the Group are set out in Note 3.18(a) to the consolidated financial statements.

SUFFICIENCY OF PUBLIC FLOAT

Based on the information that is publicly available to the Company and within the knowledge of the Directors, the Company maintained the prescribed public float under the Listing Rules throughout the Financial Year.

INDEPENDENT AUDITOR

The consolidated financial statements have been audited by PwC who retire and, being eligible, offer themselves for re-appointment.

On behalf of the Board

Lo Lin Shing, Simon

Chairman

Hong Kong, 24 September 2021

30 Vision Values Holdings Limited

Independent Auditor’s Report

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TO THE SHAREHOLDERS OF VISION VALUES HOLDINGS LIMITED

(incorporated in the Cayman Islands with limited liability)

OPINION

WHAT WE HAVE AUDITED

The consolidated financial statements of Vision Values Holdings Limited (the “ Company ”) and its subsidiaries (the “ Group ”) set out on pages 38 to 102, which comprise:

• the consolidated statement of financial position as at 30 June 2021;

• the consolidated statement of profit or loss for the year then ended;

• the consolidated statement of comprehensive income for the year then ended;

• the consolidated statement of changes in equity for the year then ended;

• the consolidated statement of cash flows for the year then ended; and

• the notes to the consolidated financial statements, which include a summary of significant accounting policies.

OUR OPINION

In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 30 June 2021, and of its consolidated financial performance and its consolidated 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 disclosure requirements of 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 Consolidated Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

INDEPENDENCE

We are independent of the Group 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.

Annual Report 2021 31

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Independent Auditor’s Report (Continued)

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KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters identified in our audit are summarised as follows:

• Fair values of investment properties

• Impairment of exploration and evaluation assets

• Impairment of yacht inventory

Key Audit Matter

How our audit addressed the Key Audit Matter

Fair values of investment properties

Refer to Note 5(a) and Note 18 to the consolidated financial statements.

As at 30 June 2021, the carrying amount of the investment properties was HK$279.6 million, which were stated at fair values. Fair value losses for investment properties of HK$24.9 million were accounted for in the Group’s consolidated statement of profit or loss for the year ended 30 June 2021.

Fair values of the investment properties of the Group were supported by valuations performed by an independent external valuer and are derived using the direct comparison method. The valuations of investment properties were dependent on certain key assumptions that required significant management judgement, including price per square metre.

Our audit procedures in relation to management’s assessment on the fair values of investment properties included:

• Evaluated the competence, capability and objectivity of the independent external valuer by considering their qualification, experience in the locations and segment of the investment properties valuation;

• Discussed with the independent external valuer and management to understand the valuation method and the key assumptions applied;

• Assessed the appropriateness of the valuation method used based on our knowledge of the industry and the assistance from our in-house valuation specialist; and

We focused on this area since the carrying amounts of the investment properties are significant to the consolidated financial statements and determination of key valuation assumptions requires the use of significant judgement and estimates.

• Assessed and challenged the reasonableness of key assumptions applied by comparing to market and industry data, including comparable properties’ market price.

Based on procedures described, we found that the valuation method used and key assumptions applied in the valuation to be supportable by available evidence.

32 Vision Values Holdings Limited

Independent Auditor’s Report (Continued)

KEY AUDIT MATTERS (Continued)

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Key Audit Matter How our audit addressed the Key Audit Matter

Impairment of exploration and evaluation assets

Refer to Note 5(b) and Note 19 to the consolidated financial statements.

As at 30 June 2021, the carrying amount of the exploration and evaluation assets of the Group was HK$69.3 million. Exploration and evaluation assets were stated at cost less any accumulated impairment loss. No impairment loss on exploration and evaluation assets was recognised in consolidated statement of profit or loss for the year ended 30 June 2021.

Management performed assessment at the end of each reporting period whether there is any indication that exploration and evaluation assets may be impaired. Should indication of impairment exists, an impairment assessment will be performed accordingly.

Management judgement was required to assess whether there is indication that the exploration and evaluation assets may be impaired. Areas of significant judgements involved in the management’s assessments included evaluating the status of mining licence, the likely future commercial viability of the exploration and evaluation assets and the budget for the future development cost.

Management also engaged independent external experts to determine the technical feasibility of the mining exploration and commercial viability of gold and other mineral resources.

Our	audit procedures in relation to management’s
assessment of impairment indicators of exploration and
evaluation assets included:
–	Evaluated management’s assessment on the status
	of mining license by checking to the mining license
	and discussed with management about the likelihood
	of renewal of the exploration rights upon expiry;

• Evaluated the competency and capabilities of the management’s internal mining expert and independent external experts, by assessing their qualifications and experience in the industry;

– Interviewed the management’s internal mining expert and understood the rationale in (i) determining the likely future commercial viability of the exploration and evaluation assets; and (ii) supporting management’s intention to continue the exploration and evaluation activities, based on the findings from the technical reports prepared by the management’s internal mining expert;

– Corroborated certain key information included in the technical reports which were prepared by the management’s internal mining expert with supporting from the relevant independent external expert reports. These reports include geophysical survey reports and laboratory reports for which the technical reports were based upon; and

We focused on this area due to the significant judgement and estimates involved in identifying the existence of any impairment indicator and reviewing the impairment assessment performed by management, if applicable.

– Compared the exploration and evaluation costs incurred during the year to prior year management’s approved budget to assess whether the cost incurred is budgeted or planned, and the reasonableness of the budget for the future development cost.

Based on the procedures described, we found that management’s assessments on existence of impairment indicators for exploration and evaluation assets were supportable by available evidence.

Annual Report 2021 33

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Independent Auditor’s Report (Continued)

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KEY AUDIT MATTERS (Continued)

Key Audit Matter How our audit addressed the Key Audit Matter

Impairment of yacht inventory

Refer to Note 5(c), Note 8 and Note 21 to the consolidated financial statements.

• Our audit procedures in relation to management’s assessment of impairment of the yacht inventory included:

As at 30 June 2021, the Group’s yacht inventory amounted to HK$92.1 million, net of provision for impairment of HK$33.9 million.

The carrying amount of the yacht inventory was stated at the lower of cost and net realisable value. Management assessed the net realisable value of the yacht inventory, taking into account the latest market prices less selling expenses based on the prevailing market conditions. The recoverable amount of the yacht inventory was supported by valuation performed by an independent external valuer and was derived using the market approach.

During the year ended 30 June 2021, an impairment provision of HK$14.1 million was recognised in consolidated statement of profit or loss.

We focused on this area due to the significant judgement involved in determining the net realisable value of the yacht inventory.

• Evaluated the competence, capability and objectivity of the independent external valuer by considering their qualification, experience in the locations and segment of the yacht valuation;

• – Discussed with the independent external valuer and management to understand the valuation method and the key assumptions applied;

• Assessed the appropriateness of the valuation method used based on our knowledge of the industry;

• Assessed and challenged the reasonableness of key assumptions adopted in the valuation prepared by the independent external valuer, including those relating to market selling prices, by comparing them with historical and available market data; and

• Evaluated management’s estimates on selling prices and selling expenses in determining the net realisable value based on prevailing market conditions by researching the selling prices and selling expenses of comparable yachts from public available resources.

Based on the procedures described, we found that management’s judgements and estimates on the net realisable value of the yacht inventory were supportable by available evidence.

34 Vision Values Holdings Limited

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Independent Auditor’s Report (Continued)

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OTHER INFORMATION

The directors of the Company are responsible for the other information. The other information comprises all of the information included in the annual report other than the consolidated financial statements and our auditor’s report thereon.

Our opinion on the consolidated 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 consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated 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.

RESPONSIBILITIES OF DIRECTORS AND AUDIT COMMITTEE FOR THE CONSOLIDATED FINANCIAL STATEMENTS

The directors of the Company are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors are responsible for assessing the Group’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 Group or to cease operations, or have no realistic alternative but to do so.

The Audit Committee is responsible for overseeing the Group’s financial reporting process.

Annual Report 2021 35

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Independent Auditor’s Report (Continued)

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AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the consolidated 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. We report our opinion solely to you, as a body, and for no other purpose. We do not assume 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 consolidated financial statements.

As part of an audit in accordance with HKSAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated 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.

• 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 Group’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 concern 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 Group’s ability to continue as a going 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 consolidated 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 Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

36 Vision Values Holdings Limited

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Independent Auditor’s Report (Continued)

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AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We communicate with the Audit Committee 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.

We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is Cheung Kin Bong.

PricewaterhouseCoopers

Certified Public Accountants

Hong Kong, 24 September 2021

Annual Report 2021 37

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Consolidated Statement of Profit or Loss

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		Year ended 30 June	Year ended 30 June
		2021	2020
	Note	HK$’000	HK$’000
Revenue	6	55,120	64,895
Other losses, net	8	(10,999)	(17,823)
Changes in inventories of finished goods and work in progress	21	(2,868)	(2,912)
Subcontracting fees for project services		(13,484)	(11,569)
Direct operating costs for private jet management services		(17,182)	(25,732)
Fair value losses on investment properties	18	(24,870)	(40,190)
Employee benefit expenses	11	(29,151)	(51,441)
Depreciation		(2,547)	(2,546)
Other expenses	10	(22,843)	(21,098)
Operating loss		(68,824)	(108,416)
Finance income	9	4	63
Finance costs	9	(1,804)	(1,382)
Loss before income tax		(70,624)	(109,735)
Income tax expense	13	(296)	(454)
Loss for the year		(70,920)	(110,189)
Loss attributable to:
Owners of the Company		(68,934)	(108,328)
Non-controlling interests		(1,986)	(1,861)
		(70,920)	(110,189)
Loss per share attributable to owners of
the Company for the year (HK cents)	14
Basic loss per share		(1.76)	(2.76)
Diluted loss per share		(1.76)	(2.76)

The notes on pages 45 to 102 are an integral part of these consolidated financial statements.

38 Vision Values Holdings Limited

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Consolidated Statement of Comprehensive Income

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Year ended 30 June	Year ended 30 June
2021	2020
HK$’000	HK$’000
Loss for the year (70,920)	(110,189)
Other comprehensive income/(loss) Item that may be reclassified subsequently to profit or loss: Currency translation differences 3,385	(1,309)
Total comprehensive loss for the year (67,535)	(111,498)
Total comprehensive loss attributable to: Owners of the Company (65,549)	(109,637)
Non-controlling interests (1,986)	(1,861)
Total comprehensive loss for the year (67,535)	(111,498)

Annual Report 2021 39

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Consolidated Statement of Financial Position

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		As at 30 June
		2021	2020
	Note	HK$’000	HK$’000
ASSETS
Non-current assets
Property, plant and equipment	16	6,216	6,752
Right-of-use assets	17	2,408	1,089
Investment properties	18	279,570	301,070
Exploration and evaluation assets	19	69,268	53,785
Rental deposit		192	–
		357,654	362,696
Current assets
Inventories	21	93,584	84,110
Trade receivables	22	4,515	5,814
Prepayments, deposits and other receivables		7,218	9,247
Contract assets		2,949	3,897
Cash and cash equivalents	23	30,819	15,940
		139,085	119,008
Total assets		496,739	481,704
EQUITY
Capital and reserves attributable to owners of the Company
Share capital	27	39,242	39,242
Other reserves		493,001	489,616
Accumulated losses		(232,963)	(164,029)
		299,280	364,829
Non-controlling interests		35,662	28,290
Total equity		334,942	393,119

40 Vision Values Holdings Limited

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Consolidated Statement of Financial Position (Continued)

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As at 30 June 2021 2020 Note HK$’000 HK$’000	As at 30 June 2021 2020 Note HK$’000 HK$’000
LIABILITIES Non-current liabilities Deferred income tax liabilities 24 3,200 Advances from a Director 31(b) 29,124 Lease liabilities 17 1,046	2,951 – –
33,370 Current liabilities Trade payables 25 3,594 Accrued charges and other payables 52,040 Contract liabilities 3,395 Bank borrowings 26 68,000 Advances from a Director 31(b) – Lease liabilities 17 1,398	2,951 1,468 31,711 4,599 38,000 8,732 1,124
128,427	85,634
Total liabilities 161,797	88,585
Total equity and liabilities 496,739	481,704
Net current assets 10,658	33,374

The consolidated financial statements on pages 38 to 102 were approved by the Board of Directors on 24 September 2021 and were signed on its behalf.

Lo Lin Shing, Simon Director

Lo, Rex Cze Kei Director

The notes on pages 45 to 102 are an integral part of these consolidated financial statements.

Annual Report 2021 41

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Consolidated Statement of Cash Flows

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		Year ended 30 June	Year ended 30 June
		2021	2020
	Note	HK$’000	HK$’000
Cash flows from operating activities
Net cash used in operating activities	28(a)	(25,535)	(38,333)
Cash flows from investing activities
Purchase of property, plant and equipment	16	(490)	(532)
Proceeds from disposal of property, plant and equipment	28(b)	28	–
Additions of exploration and evaluation assets	19	(15,483)	(21,254)
Interest received	9	4	63
Net cash used in investing activities		(15,941)	(21,723)
Cash flows from financing activities
Proceeds from bank borrowings	28(c)	71,000	32,500
Repayment of bank borrowings	28(c)	(41,000)	–
Increase in advances from a Director	28(c)	19,944	8,700
Contribution from non-controlling interests	28(c)	9,358	10,947
Payment of lease liabilities	28(c)	(1,576)	(1,584)
Interest paid		(1,386)	(1,317)
Net cash generated from financing activities		56,340	49,246
Net increase/(decrease) in cash and cash equivalents		14,864	(10,810)
Cash and cash equivalents at beginning of year		15,940	26,755
Effect on foreign exchange rate changes		15	(5)
Cash and cash equivalents at end of year	23	30,819	15,940

The notes on pages 45 to 102 are an integral part of these consolidated financial statements.

42

Vision Values Holdings Limited

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Consolidated Statement of Changes in Equity

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	Attributable to Owners of the Company Share capital Share premium Other reserve Share option reserve Currency translation reserve Accumulated losses Total Non- controlling interests Total equity HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At 1 July 2019 Comprehensive loss: – Loss for the year Other comprehensive loss: – Currency translation differences	39,242 443,727 2,366 46,091 (1,902) (76,450) 453,074 19,204 472,278 – – – – – (108,328) (108,328) (1,861) (110,189) – – – – (1,309) – (1,309) – (1,309)
Total comprehensive loss for the year	– – – – (1,309) (108,328) (109,637) (1,861) (111,498)
Share-based payment Share options lapsed	– – – 21,392 – – 21,392 – 21,392 – – – (20,749) – 20,749 – – –
Total contributions by owners of the Company recognised directly in equity Contribution from non-controlling interests (Note 28(c))	– – – 643 – 20,749 21,392 – 21,392 – – – – – – – 10,947 10,947
Total transactions with owners recognised directly in equity	– – – 643 – 20,749 21,392 10,947 32,339
At 30 June 2020	39,242 443,727 2,366 46,734 (3,211) (164,029) 364,829 28,290 393,119

Annual Report 2021 43

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Consolidated Statement of Changes in Equity (Continued)

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			Attributable to Owners of the Company	Attributable to Owners of the Company	Attributable to Owners of the Company
	Share capital	Share premium	Other reserve	Share option reserve	Currency translation reserve	Accumulated losses	Total	Non- controlling interests	Total equity
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
At 1 July 2020 Comprehensive loss: – Loss for the year Other comprehensive income: – Currency translation differences
	39,242	443,727	2,366	46,734	(3,211)	(164,029)	364,829	28,290	393,119
	–	–	–	–	–	(68,934)	(68,934)	(1,986)	(70,920)
	–	–	–	–	3,385	–	3,385	–	3,385
Total comprehensive income/(loss) for the year
	–	–	–	–	3,385	(68,934)	(65,549)	(1,986)	(67,535)
Contribution from non-controlling interests (Note 28(c))
	–	–	–	–	–	–	–	9,358	9,358
Total transactions with owners recognised directly in equity
	–	–	–	–	–	–	–	9,358	9,358
At 30 June 2021
	39,242	443,727	2,366	46,734	174	(232,963)	299,280	35,662	334,942

The notes on pages 45 to 102 are an integral part of these consolidated financial statements.

44 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements

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1 GENERAL INFORMATION

Vision Values Holdings Limited (the “ Company ”) and its subsidiaries (together the “ Group ”) are principally engaged in the provision of network solutions and project services, property investment, yacht building in Hong Kong, minerals exploration in Mongolia and provision of private jet management services in Hong Kong.

The Company is a limited liability company incorporated in the Cayman Islands. The address of its principal place of business is Unit 902, 9/F Shui Hing Centre, 13 Sheung Yuet Road, Kowloon Bay, Hong Kong.

The Company is listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”).

These consolidated financial statements are presented in Hong Kong dollars (“ HK$ ”), unless otherwise stated.

2 BASIS OF PREPARATION

The consolidated financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“ HKFRSs ”) issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”) and disclosure requirements of the Hong Kong Companies Ordinance (“ HKCO ”) Cap.622. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties, which are stated at fair value.

The preparation of financial statements in conformity with HKFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

3.1 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

(a) Amendments to existing standards and conceptual framework adopted by the Group

The following amendments to existing standards and conceptual framework are mandatory for the first time for the financial year beginning 1 July 2020 and have been adopted in the preparation of the consolidated financial statements.

Conceptual Framework for Revised conceptual framework for financial reporting Financial Reporting 2018 Amendments to HKAS 1 and HKAS 8 Definition of Material Amendments to HKFRS 3 Definition of a Business Amendments to HKAS 39, Interest Rate Benchmark Reform HKFRS 7 and HKFRS 9 Amendments to HKFRS 16 Covid-19-related rent concessions

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3.1 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Continued)

• (a) Amendments to existing standards and conceptual framework adopted by the Group (Continued)

The adoption of these amendments to existing standards and conceptual framework did not have any significant change on the Group’s accounting policies or any significant impact on the consolidated financial statements of the Group.

• (b) New standards, amendments to existing standards and interpretation that are not effective and have not been early adopted by the Group

The following new accounting standards, amendments to existing standards and interpretation have been issued but are not effective for the financial year beginning on 1 July 2020 and have not been early adopted by the Group:

		Effective for
		annual periods
		beginning
		on or after
Amendments to HKAS 39,	Interest Rate Benchmark Reform – Phase 2	1 January 2021
HKFRS 4, HKFRS 7,
HKFRS 9 and HKFRS 16
Amendments to Annual	Annual Improvements to HKFRSs	1 January 2022
Improvements Project	2018-2020 cycle
Accounting Guideline 5	Merger Accounting for Common Control	1 January 2022
(Revised)	Combination
Amendments to HKAS 16	Property, Plant and Equipment:	1 January 2022
	Proceeds before intended use
Amendments to HKAS 37	Onerous Contracts – Cost of Fulfilling	1 January 2022
	a contract
Amendments to HKFRS 3	Reference to the Conceptual Framework	1 January 2022
Amendments to HKAS 1	Classification of Liabilities as Current	1 January 2023
	or Non-current
HKFRS 17	Insurance Contracts	1 January 2023
Amendments to HKFRS 17	Amendments to HKFRS 17	1 January 2023
Hong Kong Interpretation 5	Presentation of Financial Statements –	1 January 2023
(2020)	Classification by the Borrower of
	a Term Loan that Contains a Repayment
	on Demand Clause
Amendments to HKFRS 10	Sale or Contribution of Assets between	Note
and HKAS 28	an Investor and its Associate
	or Joint Venture

Note: To be announced by HKICPA

46 Vision Values Holdings Limited

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3.1 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Continued)

• (b) New standards, amendments to existing standards and interpretation that are not effective and have not been early adopted by the Group (Continued)

• None of the above new standards, amendments to existing standards and interpretation is expected to have a significant impact on the consolidated financial statements of the Group in the current or future reporting periods and on foreseeable future transactions.

3.2 PRINCIPLES OF CONSOLIDATION

Subsidiaries are entities (including a structured entity) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the aggregate fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, noncontrolling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the consolidated statement of profit or loss.

Intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies.

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3.2 PRINCIPLES OF CONSOLIDATION (Continued)

When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

3.3 SEPARATE FINANCIAL STATEMENTS

Investments in subsidiaries are stated at cost less impairment. Cost also includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the basis of dividends received and receivable.

Loan to subsidiaries as a long term source of addition capital is treated as part of the investment cost.

Impairment testing of the investments in subsidiaries is required upon receiving dividends from these investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount in the consolidated financial statements of the investee’s net assets including goodwill.

3.4 SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (“ CODM ”). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Executive Directors who make strategic decisions.

3.5 FOREIGN CURRENCY TRANSLATION

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “ functional currency ”). The consolidated financial statements are presented in HK$, which is the Company’s functional and the Group’s presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. 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 consolidated statement of profit or loss.

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3.5 FOREIGN CURRENCY TRANSLATION (Continued)

(c) Group companies

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• (i) Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

• (ii) Income and expenses for each statement of profit or loss are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

• (iii) All resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

(d) Disposal of foreign operation and partial disposal

On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control over a joint venture that includes a foreign operation, or a disposal involving loss of significant influence over an associate that includes a foreign operation), all of the currency translation differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

In the case of a partial disposal that does not result in the Group losing control over a subsidiary that includes a foreign operation, the proportionate share of accumulated currency translation differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (that is, reductions in the Group’s ownership interest in associates or joint ventures that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange difference is reclassified to profit or loss.

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3.6 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

Property, plant and equipment are depreciated at rates sufficient to write off their cost less accumulated impairment losses over their estimated useful lives on a straight-line basis. The principal annual rates are as follows:

Building	Over the remaining term of lease or estimated remaining
	useful life
Computer equipment	20% – 33%
Furniture, fixtures and equipment	20% – 33%
Leasehold improvements	Shorter of the lease term or 20%
Motor vehicles	20% – 25%

Historical costs of property, plant and equipment include expenditures that are directly attributable to the acquisition of the assets. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are expensed in the statement of profit or loss during the financial period in which they are incurred.

The assets’ useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 3.8).

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within “other expenses” in the consolidated statement of profit or loss.

If a property, plant and equipment becomes to earn rentals and/or for capital appreciation, it is reclassified as investment property. The property is fair valued at the date of transfer and any revaluation gain or loss, being the difference between fair value and the previous carrying amount, is accounted for as a revaluation surplus or deficit in other comprehensive income.

3.7 INVESTMENT PROPERTIES

Investment properties are properties held to earn rentals and/or for capital appreciation.

Investment properties are initially measured at cost, including any directly attributable expenditure. Subsequent to initial recognition, investment properties are measured at their fair values. Gains or losses arising from changes in the fair value of the investment property are included in the consolidated statement of profit or loss for the period in which they arise.

If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment, and its fair value at the date of reclassification becomes its cost for accounting purposes.

50 Vision Values Holdings Limited

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• 3.8 IMPAIRMENT OF NON-FINANCIAL ASSETS (EXCLUDING EXPLORATION AND EVALUATION ASSETS)

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised immediately as an expense for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

3.9 EXPLORATION AND EVALUATION ASSETS

Exploration and evaluation assets are recognised at cost on initial recognition. Subsequent to initial recognition, exploration and evaluation assets are stated at cost less any accumulated impairment losses. Exploration and evaluation assets include the cost of mining and exploration rights and the expenditures incurred in the search for mineral resources as well as the determination of the technical feasibility and commercial viability of extracting those resources.

When the technical feasibility and commercial viability of extracting mineral resources become demonstrable, previously recognised exploration and evaluation assets are reclassified as mining structures and mineral properties under property, plant and equipment. These assets are assessed for impairment annually and before reclassification.

Exploration and evaluation assets shall be assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. Such circumstances, including but not limited to, are as follows:

• the period for which the Group has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed;

• substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned;

• exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities in the specific area; or

• sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.

An impairment loss is recognised in the consolidated statement of profit or loss whenever the carrying amount of an asset exceeds its recoverable amount.

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3.10 FINANCIAL ASSETS

(a) Classification

• The Group classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value through profit or loss, and

• those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will be recorded in profit or loss. For investments in debt instruments, this will depend on the business model in which the investment is held.

The Group reclassifies debt investments when and only when its business model for managing those assets changes.

(b) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.

(c) Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the consolidated statement of comprehensive income.

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. The Company classifies its debt instruments as financial assets carried at 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. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in “other expenses” together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the consolidated statement of profit or loss.

(d) Impairment

The Group assesses on a forward-looking basis the expected credit losses associated with its financial assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the Group applies the simplified approach permitted by HKFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. See Note 4.1(b) for further details.

52 Vision Values Holdings Limited

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3.11 OFFSETTING OF FINANCIAL INSTRUMENTS

Financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.

3.12 INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (“ FIFO ”) method, except for the cost of the yacht, which is determined using specific identification method. The cost of finished goods and work in progress comprises raw material, direct labour and related overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

3.13 TRADE AND OTHER RECEIVABLES

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. See Note 4.1(b) for further information about the Group’s impairment policies.

3.14 CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in hands, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

3.15 SHARE CAPITAL

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

3.16 TRADE AND OTHER PAYABLES

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables and other payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

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3.17 PROVISIONS

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

3.18 EMPLOYEE BENEFITS

(a) Retirement Benefits

For employees in Hong Kong, a mandatory provident fund scheme (“ MPF Scheme ”) has been established pursuant to the Hong Kong Mandatory Provident Fund Scheme Ordinance under which the Group’s Hong Kong eligible employees are compulsorily required to join the MPF scheme. Employer’s mandatory contributions are 100% vested in the employees as soon as they are paid to the MPF scheme.

Contributions made by the Group under the MPF Scheme are charged to the consolidated statement of profit or loss as they become payable in accordance with the rules of the scheme. The assets of the MPF Scheme are held separately from those of the Group and managed by independent professional fund managers.

The employees of the Group’s subsidiaries which operate in Mongolia are required to participate in the social insurance scheme operated by the local government. According to the “Social Insurance Law of Mongolia”, these subsidiaries have a duty to withhold 10% from employees’ salary or similar income and 13% as employers’ contribution. Employers’ contributions are charged to the consolidated statement of profit or loss as they become payable in accordance with the social insurance scheme.

(b) Employee Leave Entitlements

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.

Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.

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3.18 EMPLOYEE BENEFITS (Continued)

(c) Bonus

Provisions for bonus due wholly within twelve months after the end of the reporting period are recognised when the Group has a present legal or constructive obligation as a result of services rendered by employees and a reliable estimate of the obligation can be made.

(d) Share-based Compensation

The Group operates a share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted, excluding the impact of any service and non-market performance vesting conditions (for example, profitability and sales growth targets).

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.

At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-marketing performance and service conditions. It recognises the impact of the revision to original estimates, if any, in the consolidated statement of profit or loss, with a corresponding adjustment to equity.

When the options are exercised, the Company issues new shares, the proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.

3.19 CURRENT AND DEFERRED INCOME TAX

The tax expense for the period comprises current and deferred tax. Tax is recognised in the consolidated statement of profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

(a) Current Income Tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Group generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

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3.19 CURRENT AND DEFERRED INCOME TAX (Continued)

(b) Deferred Income Tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in the consolidated statement of profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

3.20 REVENUE RECOGNITION

The Group engaged in provision of network solutions and project services and private jet management services. Revenue from providing services is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided using the percentage of completion method, because the customer receives and uses the benefits simultaneously. If circumstances arise that may change the original estimates of revenues, costs or extent of progress toward completion, estimates are revised. These revisions may result in increases or decreases in estimated revenues or costs and are reflected in the consolidated statement of profit and loss in the period in which the circumstances that give rise to the revision become known by management. If the contract includes a monthly fee, revenue is recognised in the amount to which the Group has a right to invoice. Customers are invoiced on a monthly basis and consideration is payable when invoiced.

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3.20 REVENUE RECOGNITION (Continued)

A contract liability is recognised when a customer pays consideration, or is contractually required to pay consideration and the amount is already due, before the Group recognises the related revenue. The Group recognised its contract liabilities under other payables and accruals as receipt in advance from customers in the consolidated balance sheet.

Revenue derived from property investment is recognised on a straight-line basis over the terms of relevant leases.

3.21 LEASES

The Group as lessee

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

• fixed payments (including in-substance fixed payments), less any lease incentives receivable (if any);

• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date;

• amounts expected to be payable by the Group under residual value guarantees;

• the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and

• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

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3.21 LEASES (Continued)

The Group as lessee (Continued)

To determine the incremental borrowing rate, the Group:

• where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received;

• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group, which does not have recent third party financing; and

• makes adjustments specific to the lease, such as term, country, currency and security.

The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability;

• any lease payments made at or before the commencement date less any lease incentives received (if any);

• any initial direct costs; and

• restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

Payments associated with short-term leases and leases of low-value assets are recognised on a straightline basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.

58 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

3.21 LEASES (Continued)

The Group as lessor

Lease income from operating leases where the Group is a lessor is recognised in income on a straightline basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expenses over the lease term on the same basis as lease income. The respective leased assets are included in the consolidated statement of financial position based on their nature. The Group did not need to make any adjustments to the accounting for assets held as lessor as a result of adopting the new leasing standard.

3.22 GOVERNMENT GRANTS

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions.

Government grants relating to costs are deferred and recognised in the consolidated statement of profit or loss over the period necessary to match them with the costs that they are intended to compensate.

3.23 DIVIDEND DISTRIBUTION

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders for final dividend and Board of Directors for interim dividend.

4 FINANCIAL RISK MANAGEMENT

4.1 FINANCIAL RISK FACTORS

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, cash flow and fair value interest rate risk), credit risk, and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

Risk management is carried out by the senior management. Management manages and monitors these risk exposures to ensure appropriate measures are implemented on a timely and effective manner.

(a) Market Risk

(i) Foreign Exchange Risk

The Group operates in Hong Kong, Mainland China and Mongolia and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United States Dollars (“ US$ ”), Renminbi (“ RMB ”) and Mongolian Tugrik (“ MNT ”). Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

Annual Report 2021 59

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Notes to the Consolidated Financial Statements (Continued)

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4 FINANCIAL RISK MANAGEMENT (Continued)

4.1 FINANCIAL RISK FACTORS (Continued)

(a) Market Risk (Continued)

(i) Foreign Exchange Risk (Continued)

The Group manages its foreign exchange risk by engaging in transactions mainly in HK$, US$, RMB and MNT to the extent possible. The Group manages its exposure through constant monitoring to minimise the amount of its foreign currencies exposures.

As at 30 June 2021 and 2020, the Group did not use any financial instruments to hedge against foreign currency risk.

The foreign exchange risk on US$ is insignificant as the HK$ is pegged with the US$.

The Group is mainly exposed to the currencies of RMB and MNT against HK$, the functional currency of relevant Group entities.

The foreign exchange risk on RMB and MNT are insignificant as the Group does not have significant net assets denominated in RMB and MNT, respectively.

(ii) Cash Flow and Fair Value Interest Rate Risk

The Group’s cash flow interest rate risk mainly arises from banks deposits and borrowings carried at floating interest rates. The Group manages cash balances and deposits by comparing quotations from banks, with a view to selecting for the terms that are most favourable to the Group.

If the market interest rates for cash and cash equivalents and bank borrowings had been 50 basis points (2020: 50 basis points) higher/lower with all other variables held constant, the Group’s pre-tax loss for the year ended 30 June 2021 would have been approximately HK$186,000 higher/lower (2020: HK$111,000 higher/lower).

(b) Credit Risk

Credit risk is managed on a group basis. Credit risk arises from cash and bank balances and trade and other receivables (except for prepayments), including outstanding receivables and committed transactions. The Group’s maximum exposure to credit risk is the carrying amounts of these financial assets.

At the balance sheet date, the Group has certain concentration of credit risk as 80% (2020: 81%) of the total cash and bank balances were placed with a reputable bank.

The credit risk for cash at banks are limited because the counterparties are banks with high creditratings assigned by international credit rating agencies. The Group has policies that limit the amount of credit exposure to any one financial institution. The identified loss allowance for cash and cash equivalents was insignificant as at 30 June 2021 and 2020.

60 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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4 FINANCIAL RISK MANAGEMENT (Continued)

4.1 FINANCIAL RISK FACTORS (Continued)

(b) Credit Risk (Continued)

In order to minimise the credit risk, management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that followup action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual debt at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the Directors of the Company consider that the Group’s credit risk is significantly reduced.

The Group has concentration of credit risk. Top five customers constituted 62% of the Group’s trade receivables as at 30 June 2021 (2020: 61%).

Collections of outstanding receivable balances are closely monitored on an ongoing basis to minimise such credit risk.

The maximum exposure to credit risk at the reporting date is the carrying amounts of aforementioned assets.

Impairment of trade receivables

The Group applies the HKFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables has been grouped based on shared credit risk characteristics and the days past due.

The expected loss rates are based on probabilities of default and loss rates from external credit ratings, industry-specific data or internal and external credit data sources. The historical loss rates are further adjusted to reflect current and forward-looking information on macroeconomic factors on the global economic growth affecting the ability of the customers to settle the receivables, including but not limited to the impact of the COVID-19 pandemic.

The identified loss allowance for trade receivables was insignificant as at 30 June 2021 and 2020.

Trade receivables are written off when there is no reasonable expectation of recovery. Impairment losses on trade receivables are presented as net impairment losses within operating profit/(loss). Subsequent recoveries of amounts previously written off are credited against the same line item. As at 30 June 2021 and 2020, no trade receivables were written off.

Annual Report 2021 61

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Notes to the Consolidated Financial Statements (Continued)

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4 FINANCIAL RISK MANAGEMENT (Continued)

4.1 FINANCIAL RISK FACTORS (Continued)

(b) Credit Risk (Continued)

Impairment on other financial assets at amortised cost

The directors of the Group consider the probability of default upon initial recognition of asset and whether there has been significant increase in credit risk on an ongoing basis. To assess whether there is a significant increase in credit risk, the Group compares risk of a default occurring on the assets as at the reporting date with the risk of default as at the date of initial recognition. Especially the following indicators are incorporated.

• actual or expected significant adverse changes in business, financial economic conditions that are expected to cause a significant change to the company’s ability to meet its obligations;

• actual or expected significant changes in the operating results of the company; and

• significant changes in the expected performance and behavior of the company, including changes in the payment status of the third party.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group. The Group categories a receivable for write off when a debtor fails to make contractual payments/repayable demanded greater than 365 days past due. Where the receivables have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit or loss.

Other financial assets at amortised cost include certain deposits and other receivables. These financial assets are considered to be low credit risk primarily because they had no history of default and the counterparties had strong capacity to meet their contractual cash flow obligations in the near term. Management does not expect any losses from non-performance by these counterparties. The Group assessed that the expected credit losses for these receivables were insignificant under 12-month expected losses method. Thus, the loss allowance recognised for these balances was close to zero.

62 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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4 FINANCIAL RISK MANAGEMENT (Continued)

4.1 FINANCIAL RISK FACTORS (Continued)

(c) Liquidity Risk

Prudent liquidity risk management includes maintaining sufficient cash and cash equivalents, and the availability of funding through an adequate amount of banking facilities and committed facilities granted by a Director. Management maintains flexibility in funding by maintaining adequate amount of cash and cash equivalents.

The Group’s policy to monitor current and expected liquidity requirements regularly to ensure it maintains sufficient cash and cash equivalents and has available funding through adequate amount of committed credit facilities to meet its working capital requirements.

The table below analyse the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the consolidated balance sheet date to the contractual maturity date. The amounts disclosed in the tables are the contractual undiscounted cash flows.

			Between
	On	Less than	1 and 2
	demand	1 year	years	Total
	HK$’000	HK$’000	HK$’000	HK$’000
As at 30 June 2021
Trade payables	–	3,594	–	3,594
Advances from a Director Bank borrowings	– 72,110	– –	31,877 –	31,877 72,110
Lease liabilities Accrued charges and	–	1,489	1,070	2,559
other payables	–	49,563	–	49,563
	72,110	54,646	32,947	159,703
As at 30 June 2020
Trade payables	–	1,468	–	1,468
Advances from a Director	–	8,732	24	8,756
Bank borrowings	38,002	–	–	38,002
Lease liabilities	–	1,144	–	1,144
Accrued charges and
other payables	–	29,282	–	29,282
	38,002	40,626	24	78,652

Annual Report 2021 63

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4 FINANCIAL RISK MANAGEMENT (Continued)

4.1 FINANCIAL RISK FACTORS (Continued)

(c) Liquidity Risk (Continued)

The table below summarises the maturity analysis of the loans with a repayment on demand clause based on agreed scheduled repayments set out in the loan agreements. The amounts included interest payments computed using contractual rates. As a result, these amounts were greater than the amounts disclosed in the “on demand” time band in the maturity analysis contained above. Taking into account the Group’s financial position, the directors do not consider that it is probable that the banks will exercise their discretions to demand immediate repayment. The directors believe that such loans will be repaid in accordance with the scheduled repayment date set out in the loan agreements.

Maturity Analysis – Bank borrowings subject to a repayment on demand clause based on scheduled repayments:

				Between
			Less than	1 and 2
			1 year	years	Total
			HK$’000	HK$’000	HK$’000
30	June	2021	–	68,000	68,000
30	June	2020	38,000	–	38,000

4.2 CAPITAL RISK MANAGEMENT

The Group manages its capital to ensure that the entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balances. The Group’s overall strategy remains unchanged from the prior year.

The capital structure of the Group consists of cash and cash equivalents and equity attributable to owners of the Group comprising share capital and reserves.

Management of the Group reviews the capital structure regularly, taking into account of the cost and risk associated. The Group will then balance its capital structure through the payment of dividends and new shares issues.

64 Vision Values Holdings Limited

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4 FINANCIAL RISK MANAGEMENT (Continued)

4.2 CAPITAL RISK MANAGEMENT (Continued)

The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as total debts (including bank borrowings and advances from a Director) divided by total assets as shown in the consolidated statement of financial position.

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Bank borrowings|68,000|38,000|
|Advances from a Director|29,124|8,732|
|Total debts|97,124|46,732|
|Total assets|496,739|481,704|
|Gearing ratio|19.6%|9.7%|

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4.3 FAIR VALUE ESTIMATION

The different levels of financial instruments carried at fair value have been defined as follows:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The fair value estimation of the investment properties is categorised in level 3 hierarchy. See Note 18 for disclosures of the investment properties that are measured at fair value.

The carrying amounts of trade receivables, deposits and other receivables and accruals and other payables are reasonable approximations of their fair values as at 30 June 2021 and 2020 due to their short-term maturities.

The fair values of the bank borrowings as at 30 June 2021 and 2020 approximate their carrying amounts as they bear interest at floating rates that are market dependent. The fair values of advances from a Director are estimated by discounting the future contractual cash flows at the current market interest rate that are available to the Group for similar financial instruments.

Annual Report 2021 65

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5 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below:

(a) FAIR VALUES OF INVESTMENT PROPERTIES

Investment properties are carried in the statement of financial position at fair value as determined based on professional valuation. In determining the fair values of the investment properties, the valuer uses assumptions and estimates that reflect, amongst other things, comparable market transactions. Judgment is required to determine the principal valuation assumptions to determine the fair value of the investment properties. Changes in fair values of investment properties are recorded and presented separately in the consolidated statement of profit or loss. Details of the judgement and assumptions have been disclosed in Note 18.

(b) IMPAIRMENT OF EXPLORATION AND EVALUATION ASSETS

An entity shall assess at each reporting date whether there is an indication, based on either internal or external sources of information, that the carrying amount of exploration and evaluation assets acquired may be impaired. If an indication is identified, the Group shall undertake an impairment assessment. This assessment will determine whether the exploration and evaluation assets are impaired which requires an estimation of the recoverable amount of the cash-generating unit to which the exploration and evaluation assets have been allocated, by value in use and fair value less costs to sell approaches. The assessment will estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. No impairment loss was recognised in the consolidated statement of profit or loss for the years ended 30 June 2021 (2020: Nil).

(c) WRITE-DOWN OF INVENTORIES TO NET REALISABLE VALUE

The Group writes down inventories to net realisable value based on an estimate of the realisability of inventories. Write-downs of inventories are recorded where events or changes in circumstances indicate that the balances may not be realised. The identification of write-downs requires the use of estimates. Where the expectation is different from the original estimate, such difference will impact the carrying amount of inventories and write-downs of inventories in the periods in which such estimate has been changed.

66 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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5 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS (Continued)

(d) PROVISION OF CURRENT AND DEFERRED INCOME TAX

The Group is subject to income taxes in various jurisdictions. Judgment is required in determining the provision for income taxes in each of these jurisdictions. There are transactions and calculations during the ordinary course of business for which the ultimate tax determination is uncertain. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.

Deferred income tax assets relating to certain temporary differences and tax losses are recognised when management considers it is probable that future taxable profits will be available against which the temporary differences or tax losses can be utilised. When the expectation is different from the original estimates, such differences will impact the recognition of deferred income tax assets and taxation charges in the period in which such estimates is changed.

6 REVENUE

An analysis of the Group’s revenue for the year recognised over time is as follows:

2021	2020
HK$’000	HK$’000
Private jet management services income 28,277	40,074
Network solutions and project services fee 20,171	18,197
Rental income 6,672	6,624
55,120	64,895

Revenue of HK$4,599,000 was recognised for the year ended 30 June 2021 (2020: HK$5,872,000) related to carried-forward contract liabilities.

7 SEGMENT INFORMATION

The Group’s reportable operating segments are: (i) network solutions and project services; (ii) property investment; (iii) yacht building; (iv) minerals exploration and (v) private jet management services.

The CODM has been identified as the Executive Directors. The Executive Directors review the Group’s internal reporting in order to assess performance and allocate resources. The Executive Directors determined the operating segments based on these reports.

Annual Report 2021 67

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7 SEGMENT INFORMATION (Continued)

The Executive Directors assess the performance of operating segments based on a measure of segment results. This measurement basis is revenue less direct attributable expenses to revenue but excluding depreciation. Other information provided, except as described below, to the Directors is measured in a manner consistent with that in the consolidated financial statements. Segment assets exclude other assets that are managed on a central basis.

There are no sales or other transactions between business segments.

The segment revenue and results for the year ended 30 June 2021:

Network solutions and project services Property investment Yacht building Minerals exploration Private jet management services HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Total
	HK$’000
Segment revenue 20,171 6,672 – – 28,277
	55,120
Segment results 3,363 5,472 – – 11,095
	19,930
Depreciation (332) – (1) (203) (1,633) Fair value losses on investment properties – (24,870) – – – Impairment loss on inventories – – (14,125) – – Unallocated expenses (Note a) Finance costs Finance income Loss before income tax Other segment information – Capital expenditure (Note b) – – – 15,507 – – Unallocated capital expenditure
	(2,169)
	(24,870)
	(14,125)
	(47,590)
	(1,804)
	4
	(70,624)
	15,507
	466
	15,973

68 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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7 SEGMENT INFORMATION (Continued)

The segment revenue and results for the year ended 30 June 2020:

Network solutions and project services Property investment Yacht building Minerals exploration Private jet management services HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Total HK$’000
Segment revenue 18,197 6,624 – – 40,074	64,895
Segment results 3,099 5,277 – – 14,342	22,718 (2,253) (40,190) (19,836) (68,855) (1,382) 63
Depreciation (383) – (15) (206) (1,649) Fair value losses on investment properties – (40,190) – – – Impairment loss on inventories – – (19,836) – – Unallocated expenses (Note a) Finance costs Finance income Loss before income tax Other segment information – Capital expenditure (Note b) – – – 21,721 – – Unallocated capital expenditure
	(109,735)
	21,721 65
	21,786

Notes:

(a) Unallocated expenses mainly include unallocated employee benefit expenses, legal and professional fees and reimbursement of sharing of administrative services incurred at corporate level.

(b) This relates to additions to property, plant and equipment and exploration and evaluation assets.

Annual Report 2021 69

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Notes to the Consolidated Financial Statements (Continued)

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7 SEGMENT INFORMATION (Continued)

SEGMENT ASSETS

As at 30 June 2021

Network solutions and project services HK$’000	Property investment	Yacht building	Minerals exploration	Private jet management services	Total
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Total segment assets 4,185
	279,873	95,900	70,065	7,021	457,044
Unallocated –Cash and cash equivalents –Other unallocated assets Consolidated total assets
					30,819
					8,876
					496,739

As at 30 June 2020

Network solutions and project services Property investment Yacht building Minerals exploration Private jet management services HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Total HK$’000
Total segment assets 6,033 301,716 87,354 54,770 7,816	457,689 15,940 8,075
Unallocated –Cash and cash equivalents –Other unallocated assets Consolidated total assets
	481,704

The Company is domiciled in Hong Kong and the Group is operating in three main geographical areas:

Hong Kong

Hong Kong : Network solutions and project services, property investment, yacht building and private jet management services Mainland China : Property investment Mongolia : Minerals exploration

70 Vision Values Holdings Limited

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7 SEGMENT INFORMATION (Continued)

SEGMENT ASSETS (Continued)

There are neither sales nor other transactions between the geographical areas.

	Non-current assets Revenue
	2021 2020 2021	2020
	HK$’000 HK$’000 HK$’000	HK$’000
Hong Kong	243,629 270,945 53,993	64,096
Mainland China Mongolia	44,040 37,070 1,127 69,985 54,681 –	799 –
	357,654 362,696 55,120	64,895

The Group’s revenue by geographical location is determined by the places/countries in which the customers are located. The Group’s non-current assets by geographical location are determined by the places/countries in which the assets are located.

Revenue of approximately HK$42,398,000 (2020: HK$53,885,000) is derived from four (2020: five) largest customers who accounted for 10% or more of the Group’s revenue. The revenue is attributable to the segment of network solutions and project services and private jet management services in Hong Kong.

8 OTHER LOSSES, NET

OTHER LOSSES, NET
2021	2020
HK$’000	HK$’000
Impairment loss on inventories (Note 21) (14,125)	(19,836)
Government grants (Note) 2,103	1,078
Sundry income 1,023	935
(10,999)	(17,823)

Note: Government grants mainly represents benefits received from the HKSAR Government under COVID-19 related employment support schemes (“ ESS ”). The Group has complied all attached conditions before 30 June 2021 and recognised in the consolidated statement of profit or loss.

Annual Report 2021 71

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9 FINANCE INCOME AND COSTS

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Finance income|
|– Bank interest income|4|63|
|Finance costs|
|– Interest expense on bank loans|(1,300)|(1,271)|
|– Interest expense on advances from a Director (Note 31(a))|(448)|(32)|
|– Interest expense on lease liabilities (Note 17(b))|(56)|(79)|
|(1,804)|(1,382)|

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10 OTHER EXPENSES

Other expenses included the followings:

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Auditor’s remuneration|
|– Audit services|1,387|1,430|
|– Non-audit services|26|26|
|Direct operating expenses from investment properties|
|that generate rental income|1,199|1,347|
|Exchange losses, net|380|504|
|Operating lease rental for short-term leases (Note 17(b))|1,660|1,852|
|Legal and professional fee|3,419|3,126|
|Insurance|3,311|2,043|
|Reimbursement of sharing of administrative services (Note 31(a))|7,293|6,869|

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72 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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11 EMPLOYEE BENEFIT EXPENSES (INCLUDING BENEFITS AND INTEREST OF DIRECTORS)

DIRECTORS)
2021	2020
HK$’000	HK$’000
Wages and salaries 28,573	28,974
Share-based payment –	21,392
Pension costs – defined contribution plans 578	1,075
29,151	51,441

The retirement benefit costs under MPF Scheme charged to the consolidated statement of profit or loss represent the net contribution after netting off with forfeited contributions. There were no forfeited contributions for both years. At 30 June 2021, no contribution was outstanding to the scheme and there were no unutilised forfeited contributions (2020: Nil).

12 BENEFITS AND INTERESTS OF DIRECTORS AND SENIOR MANAGEMENT’S EMOLUMENTS

(a) DIRECTORS’ AND CHIEF EXECUTIVE’S EMOLUMENTS

The aggregate amounts of emoluments paid and payable to Directors and Chief Executive of the Company during the year are as follows:

	2021	2020
	HK$’000	HK$’000
Fees	760	660
Other	emoluments 8,472	17,581
	9,232	18,241

Annual Report 2021 73

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12 BENEFITS AND INTERESTS OF DIRECTORS AND SENIOR MANAGEMENT’S EMOLUMENTS (Continued)

(a) DIRECTORS’ AND CHIEF EXECUTIVE’S EMOLUMENTS (Continued)

Neither the Chief Executive nor any of the Directors of the Company waived any emoluments during the year (2020: Nil).

Details of the emoluments paid and payable to the Directors and the Chief Executive of the Company are as follows:

Name of Directors Fees HK$’000		2021
	Salaries and allowances	Share- based payment	Pension costs – defined contribution plans	Total
	HK$’000	HK$’000	HK$’000	HK$’000
Executive Directors Mr. Lo Lin Shing, Simon (“Mr. Lo”) 100 Mr. Ho Hau Chong, Norman 100 Ms. Yvette Ong – Mr. Lo, Rex Cze Kei 100 Mr. Lo, Chris Cze Wai 100 Independent Non-executive Directors Mr. Lau Wai Piu 120 Mr. Tsui Hing Chuen, William 120 Mr. Lee Kee Wai, Frank 120
	6,000	–	18	6,118
	–	–	–	100
	1,200	–	18	1,218
	600	–	18	718
	600	–	18	718
	–	–	–	120
	–	–	–	120
	–	–	–	120
760
	8,400	–	72	9,232

74 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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12 BENEFITS AND INTERESTS OF DIRECTORS AND SENIOR MANAGEMENT’S EMOLUMENTS (Continued)

• (a) DIRECTORS’ AND CHIEF EXECUTIVE’S EMOLUMENTS (Continued)

			2020
				Pension
				costs –
		Salaries	Share-	defined
		and	based	contribution
Name of Directors	Fees	allowances	payment	plans	Total
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Executive Directors
Mr. Lo	100	6,000	2,521	18	8,639
Mr. Ho Hau Chong, Norman	100	–	1,401	–	1,501
Ms. Yvette Ong	–	1,200	1,401	18	2,619
Mr. Lo, Rex Cze Kei	100	600	1,401	18	2,119
Mr. Lo, Chris Cze Wai	–	197	700	6	903
Independent Non-executive
Directors
Mr. Lau Wai Piu	120	–	700	–	820
Mr. Tsui Hing Chuen, William	120	–	700	–	820
Mr. Lee Kee Wai, Frank	120	–	700	–	820
	660	7,997	9,524	60	18,241

Mr. Lo is also the Chief Executive of the Company and his emoluments disclosed above include those for the services rendered by him as the Chief Executive.

(b) DIRECTORS’ RETIREMENT BENEFITS

None of the directors received or will receive any retirement benefits during the year (2020: Nil).

(c) DIRECTORS’ TERMINATION BENEFITS

None of the directors received or will receive any termination benefits during the year (2020: Nil).

• (d) CONSIDERATION PROVIDED TO THIRD PARTIES FOR MAKING AVAILABLE DIRECTORS’ SERVICES

During the year ended 30 June 2021, the Company did not pay consideration to any third parties for making available directors’ services (2020: Nil).

Annual Report 2021 75

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Notes to the Consolidated Financial Statements (Continued)

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12 BENEFITS AND INTERESTS OF DIRECTORS AND SENIOR MANAGEMENT’S

EMOLUMENTS (Continued)

(e) INFORMATION ABOUT LOANS, QUASI-LOANS AND OTHER DEALINGS IN FAVOUR OF DIRECTORS, CONTROLLED BODIES CORPORATE BY AND CONNECTED ENTITIES WITH SUCH DIRECTORS

Details of advances from a Director are set out in Note 31(b). Save for this, no loans, quasi-loans and other dealing arrangements were made available in favour of the directors, or controlled body corporate by and connected entities with such directors (2020: Nil).

(f) DIRECTORS’ MATERIAL INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS

Apart from the related party transactions in Note 31, no significant transactions, arrangements and contracts in relation to the Group’s business to which the Company was a party and in which a director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year.

(g) FIVE HIGHEST PAID INDIVIDUALS

Two (2020: Two) of the Directors were included in the five highest paid individuals for the year ended 30 June 2021. The emoluments payable to the remaining three (2020: three) individuals during the year were as follows:

2021	2020
HK$’000	HK$’000
Salaries and allowances 7,451	7,451
Share-based payment –	2,766
Pension costs – defined contribution plans 36	36
7,487	10,253

The emoluments fell within the following bands:

Number of individuals
2021	2020
Emolument bands HK$1,000,001 to HK$1,500,000 1 HK$2,500,001 to HK$3,000,000 1 HK$3,000,001 to HK$3,500,000 1 HK$4,000,001 to HK$4,500,000 – HK$4,500,001 to HK$5,000,000 –	1 – – 1 1
3	3

76 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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13 INCOME TAX EXPENSE

Hong Kong profits tax has been provided at the rate of 16.5% (2020: 16.5%) on the estimated assessable profits for the year. Taxation on overseas profits has been calculated on the estimated assessable profits for the year at the rates of taxation prevailing in the countries in which the Group operates.

The amount of income tax charged to the consolidated statement of profit or loss represents:

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Current income tax|
|– Hong Kong profits tax|47|425|
|Deferred income tax|
|– Origination of temporary differences (Note 24)|249|29|
|Total income tax expense|296|454|

----- End of picture text -----

The tax on the Group’s loss before income tax differs from the theoretical amount that would arise using the Hong Kong income taxation rate, as follows:

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Loss before income tax|(70,624)|(109,735)|
|Calculated at a taxation rate of 16.5% (2020: 16.5%)|(11,653)|(18,106)|
|Effect of different taxation rates in other countries|28|55|
|Income not subject to tax|(1,071)|(705)|
|Expenses not deductible for tax purposes|11,519|18,102|
|Tax losses not recognised|1,473|1,108|
|Income tax expense|296|454|

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Annual Report 2021 77

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Notes to the Consolidated Financial Statements (Continued)

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14 LOSS PER SHARE

(a) BASIC

Basic loss per share is calculated by dividing the loss attributable to owners of the Company by the weighted average number of ordinary shares in issue during the year.

2021	2020
Loss attributable to owners of the Company (HK$’000) (68,934)	(108,328)
Weighted average number of ordinary shares in issue (in thousands) 3,924,190	3,924,190
Basic loss per ordinary share (HK cents) (1.76)	(2.76)

(b) DILUTED

The calculation of the diluted loss per share for the years ended 30 June 2021 and 2020 is based on the loss for the year attributable to equity holders of the Company, adjusted to assume exercise of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares: share option. The weighted average number of ordinary shares used in the calculation is the weighted average number of the ordinary shares in issue during the year, as used in the basic loss per share calculation, and the weighted average number of ordinary shares assumed to have been issued at no consideration on the deemed exercise or conversion of share option.

During the years ended 30 June 2021 and 2020, the share options granted by the Company were not assumed to be exercised as they would have anti-dilutive impact to the basic loss per share.

15 DIVIDEND

The directors did not recommend the payment of a final dividend for the year ended 30 June 2021 (2020: Nil).

78 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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16 PROPERTY, PLANT AND EQUIPMENT

				Furniture,
		Leasehold	Computer	fixtures and	Motor
	Building	improvements	equipment	equipment	vehicles	Total
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Cost
As at 1 July 2019	5,050	652	501	2,764	3,604	12,571
Additions	–	–	136	396	–	532
Disposal	–	–	–	(5)	–	(5)
Written off	–	–	(31)	(35)	–	(66)
As at 30 June 2020	5,050	652	606	3,120	3,604	13,032
Additions	–	–	24	3	463	490
Disposals	–	–	(1)	(2)	(854)	(857)
Written off	–	–	–	(16)	–	(16)
As at 30 June 2021	5,050	652	629	3,105	3,213	12,649
Accumulated depreciation As at 1 July 2019 Charge for the year Disposal Written off	767 161 – –	205 110 – –	313 73 – (31)	2,206 241 (5) (35)	1,854 421 – –	5,345 1,006 (5) (66)
As at 30 June 2020 Charge for the year Disposals Written off	928 161 – –	315 109 – –	355 89 (1) –	2,407 176 (2) (16)	2,275 491 (854) –	6,280 1,026 (857) (16)
As at 30 June 2021	1,089	424	443	2,565	1,912	6,433
Net book value As at 30 June 2021	3,961	228	186	540	1,301	6,216
As at 30 June 2020	4,122	337	251	713	1,329	6,752

Annual Report 2021 79

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Notes to the Consolidated Financial Statements (Continued)

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17 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

(a) BALANCES RECOGNISED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Right-of-use assets|
|Office premises|2,408|1,089|
|Lease liabilities|
|Current portion|1,398|1,124|
|–|
|Non-current portion|1,046|
|2,444|1,124|

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Additions to the right-of-use assets during the year ended 30 June 2021 were approximately HK$2,840,000.

(b) AMOUNTS RECOGNISED IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS:

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Depreciation charge of right-of-use assets|1,521|1,540|
|Interest expense on lease liabilities (included in finance costs) (Note 9)|56|79|
|Expenses relating to short-term leases (Note 10)|1,660|1,852|

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The total cash outflow for leases during the year ended 30 June 2021 was approximately HK$3,236,000 (2020: HK$3,436,000).

(c) THE GROUP’S LEASING ACTIVITIES AND HOW THESE ARE ACCOUNTED FOR

The Group leases three office premises. Rental contracts are typically made for fixed periods of 2 years.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.

80 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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18 INVESTMENT PROPERTIES

INVESTMENT PROPERTIES
2021	2020
HK$’000	HK$’000
At beginning of the year 301,070	342,564
Net fair value losses on revaluation of investment properties (24,870)	(40,190)
Currency translation differences 3,370	(1,304)
At end of the year 279,570	301,070

Note:

AMOUNTS RECOGNISED IN PROFIT AND LOSS FOR INVESTMENT PROPERTIES

2021 HK$’000	2020 HK$’000
Rental income 6,672 Direct operating expenses from properties that generated rental income (1,199) Fair value losses on investment properties (24,870)	6,624 (1,347) (40,190)

As at 30 June 2021 and 2020, the Group had no unprovided contractual obligations for future repairs and maintenance.

As at 30 June 2021 and 2020, bank borrowings are secured by investment properties in relation to an office premise and two car parking spaces located at Wan Chai, Hong Kong (Note 26).

FAIR VALUE HIERARCHY

Under HKFRS 13 “Fair Value Measurement”, the fair value measurement should be illustrated based on the three-level fair value hierarchy and the classification is determined with reference to the observability and significance of the inputs used in the valuation technique as follows:

• Level 1 valuations: fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date;

• Level 2 valuations: fair value measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available; and

• Level 3 valuations: fair value measured using significant unobservable inputs.

Annual Report 2021 81

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Notes to the Consolidated Financial Statements (Continued)

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18 INVESTMENT PROPERTIES (Continued)

FAIR VALUE HIERARCHY (Continued)

Fair value hierarchy for recurring fair value measurements:

Quoted prices in active markets for identical assets (Level 1) HK$’000	Significant other observable inputs (Level 2) HK$’000	Significant unobservable inputs (Level 3) HK$’000	Total HK$’000
Investment properties – Residential property – Beijing – – Office unit – Beijing – – Office units – Hong Kong – – Industrial properties – Hong Kong – – Carparks – Hong Kong –
	–	30,120	30,120
	–	13,920	13,920
	–	216,100	216,100
	–	9,800	9,800
	–	9,630	9,630
As at 30 June 2021 –
	–	279,570	279,570
Investment properties – Residential property – Beijing – – Office unit – Beijing – – Office units – Hong Kong – – Industrial properties – Hong Kong – – Carparks – Hong Kong –	– – – – –	25,850 11,220 245,500 8,900 9,600	25,850 11,220 245,500 8,900 9,600
As at 30 June 2020 –	–	301,070	301,070

The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer.

82 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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18 INVESTMENT PROPERTIES (Continued)

VALUATION PROCESSES OF THE GROUP

The Group’s investment properties were valued at 30 June 2021 by an independent professionally qualified valuer, Eidea Professional Services Company Limited, who holds a recognised relevant professional qualification and has relevant experience in the locations and segments of the investment properties valued. In estimating the fair value of the properties, the highest and best use of the properties is their current use.

The Group’s finance department reviews the valuations performed by Eidea Professional Services Company Limited for financial reporting purpose. These valuation results are then reported to the Group’s management for discussions and review in relation to the valuation processes and the reasonableness of valuation results.

VALUATION TECHNIQUES

Fair value measurements using significant unobservable inputs

Fair values of the investment properties of the Group were supported by valuations performed by an independent external valuer and are generally derived using the direct comparison method under Level 3 approach (2020: same). Sales prices of comparable properties in close proximity were adjusted for differences in key attributes such as property size. The valuations of residential property, office units, industrial properties and carparks were dependent on certain key assumptions that required significant management judgement, including fair market price and age.

The ranges of unobservable input are similar between the residential property, office units, industrial properties and carparks.

Annual Report 2021 83

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18 INVESTMENT PROPERTIES (Continued)

VALUATION TECHNIQUES (Continued)

Fair value measurements using significant unobservable inputs (Continued) These significant unobservable inputs include:

				Range of significant	Relationship of
			Unobservable	unobservable inputs	unobservable inputs to
	Fair value	Valuation technique	inputs	(Note)	fair value
Residential property – Beijing	HK$30,120,000	Direct comparison	Price per square	RMB84,320 to	The higher the market
	(2020: HK$25,850,000)	method	metre (RMB)	RMB93,985	price, the higher the
				(2020: RMB72,537 to	value
				RMB77,143)
Office unit – Beijing	HK$13,920,000	Direct comparison	Price per square	RMB35,000 to	The higher the market
	(2020: HK$11,220,000)	method	metre (RMB)	RMB36,260	price, the higher the
				(2020: RMB26,880 to	value
				RMB31,178)
Industrial property – Fanling,	HK$5,000,000	Direct comparison	Price per square	HK$5,710 to	The higher the market
Hong Kong	(2020: HK$4,600,000)	method	foot (HK$)	HK$6,422	price, the higher the
				(2020: HK$5,387 to	value
				HK$5,901)
Industrial property – Fanling,	HK$4,800,000	Direct comparison	Price per square	HK$5,272 to	The higher the market
Hong Kong	(2020: HK$4,300,000)	method	foot (HK$)	HK$5,469	price, the higher the
				(2020: HK$4,444 to	value
				HK$4,945)
Carpark – Fanling, Hong Kong	HK$1,130,000	Direct comparison	Price per unit (HK$)	HK$1,340,000 to	The higher the market
	(2020: HK$1,000,000)	method		HK$1,480,000	price, the higher the
				(2020: HK$1,300,000 to	value
				HK$1,300,000)
Office unit – Central, Hong Kong	HK$55,100,000	Direct comparison	Price per square	HK$12,005 to	The higher the market
	(2020: HK$66,300,000)	method	foot (HK$)	HK$16,000	price, the higher the
				(2020: HK$23,494 to	value
				HK$29,701)
Carpark – Central, Hong Kong	HK$3,300,000	Direct comparison	Price per unit (HK$)	HK$3,900,000 to	The higher the market
	(2020: HK$3,100,000)	method		HK$3,900,000	price, the higher the
				(2020: HK$3,000,000 to	value
				HK$3,200,000)
Office unit – Wan Chai, Hong Kong	HK$42,600,000	Direct comparison	Price per square	HK$11,689 to	The higher the market
	(2020: HK$46,500,000)	method	foot (HK$)	HK$13,660	price, the higher the
				(2020: HK$13,552 to	value
				HK$14,755)
Office unit – Wan Chai, Hong Kong	HK$118,400,000	Direct comparison	Price per square	HK$14,549 to	The higher the market
	(2020: HK$132,700,000)	method	foot (HK$)	HK$18,138	price, the higher the
				(2020: HK$20,893 to	value
				HK$20,893)
Two carparks –Wan Chai,	HK$5,200,000	Direct comparison	Price per unit (HK$)	HK$3,000,000 to	The higher the market
Hong Kong	(2020: HK$5,500,000)	method		HK$3,000,000	price, the higher the
				(2020: HK$2,700,000 to	value
				HK$2,800,000)

Note: Taking into account of locations and other individual factors such as environment, building facilities, levels etc.

84 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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18 INVESTMENT PROPERTIES (Continued)

VALUATION TECHNIQUES (Continued)

The locations and lease terms of the investment properties are analysed as follows:

2021	2020
HK$’000	HK$’000
In Hong Kong, held on medium-term leases 235,530	264,000
In Mainland China, held on medium-term leases 44,040	37,070
279,570	301,070

19 EXPLORATION AND EVALUATION ASSETS

The Group owns a mineral mining license in western part of Mongolia. Additions to the exploration and evaluation assets represent the geological and geophysical costs, drilling and exploration expenses directly attributable to exploration activities.

Movement of exploration and evaluation assets is as follows:

	2021 2020 HK$’000 HK$’000
At beginning of the year Additions	53,785 32,531 15,483 21,254
At end of the year	69,268 53,785

Note: In July 2020, a mining license was issued and granted for an initial period of 30 years to replace the exploration license which was expired during the year ended 30 June 2020. The mining license can be extended for two successive periods of 20 years each.

Annual Report 2021 85

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20 PARTICULARS OF SUBSIDIARIES

All of the subsidiaries of the Company were incorporated/established as limited liability companies.

Particulars of the Company’s principal subsidiaries as at 30 June 2021 are as follows:

			Percentage of	Percentage of
			equity interest	attributable
			to the Company
	Place of	Particulars of				Principal activities and
Name	incorporation	issued share capital	Direct	Indirect		place of operation
Cyber On-Air (Asia) Limited	Hong Kong	100 ordinary shares of total HK$100	–	100%		Provision of network solutions and project
		and 100,000 non-voting deferred				services in Hong Kong
		shares of total HK$100,000
Jetco Technologies Limited	Hong Kong	1,250,000 ordinary shares of total	–	100%		Property investment in Mainland China
		HK$1,250,000
Lipro Prosper Limited	Hong Kong	2 ordinary shares of total HK$2	–	100%		Property investment in Mainland China
Greenham Development Limited	Hong Kong	2 ordinary shares of total HK$2	–	100%		Property investment in Hong Kong
Star Bright (HK) Holdings Limited	Hong Kong	1,600 ordinary shares of total	–	100%		Property investment in Hong Kong
		HK$1,600
Power Able Enterprises Limited	Hong Kong	1 ordinary share of total HK$1	–	100%		Property investment in Hong Kong
Vision Values Group Management	Hong Kong	2 ordinary shares of total HK$2	100%		–	Provision of management services in Hong
Limited						Kong
Vision Values Security Services Limited	Hong Kong	2 ordinary shares of total	100%		–	Provision of property management
		HK$3,000,000				services in Hong Kong
Silver Value Global Limited	Hong Kong	1 ordinary share of HK$1	100%		–	Yacht building in Hong Kong
FVSP LLC	Mongolia	100,000 ordinary shares of US$1	–		51%	Mineral exploration in Mongolia
		each
Vision Values Aviation Services Limited	Hong Kong	10 ordinary shares of total	–		90%	Provision of private jet management
		HK$10,000,000				services in Hong Kong

MATERIAL NON-CONTROLLING INTERESTS

The total non-controlling interests as at 30 June 2021 is HK$35,662,000 (2020: HK$28,290,000), which represents mainly the Mission Wealth Holdings Limited and its subsidiaries (collectively the “ Mission Wealth Group ”) and Vision Values Aviation Services Limited.

86 Vision Values Holdings Limited

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20 PARTICULARS OF SUBSIDIARIES (Continued)

SUMMARISED STATEMENT OF FINANCIAL POSITION ON SUBSIDIARIES WITH MATERIAL NONCONTROLLING INTERESTS

CONTROLLING INTERESTS
	Vision Values Aviation
	Services Limited	Mission Wealth	Group
	2021	2020 2021	2020
	HK$’000 HK$’000 HK$’000		HK$’000
Current
Assets Liabilities	40,942 35,550 353 (29,972) (24,063) (157,290)		643 (138,197)
Total current net assets/(liabilities)	10,970	11,487 (156,937)	(137,554)
Non-current
Assets	2,884	2,240 72,420	57,116
Net assets/(liabilities)	13,854	13,727 (84,517)	(80,438)

SUMMARISED STATEMENT OF PROFIT OR LOSS ON SUBSIDIARIES WITH MATERIAL NONCONTROLLING INTERESTS

Vision Values Aviation Services Limited Mission Wealth Group 2021 2020 2021 2020 HK$’000 HK$’000 HK$’000 HK$’000	Vision Values Aviation Services Limited Mission Wealth Group 2021 2020 2021 2020 HK$’000 HK$’000 HK$’000 HK$’000	Vision Values Aviation Services Limited Mission Wealth Group 2021 2020 2021 2020 HK$’000 HK$’000 HK$’000 HK$’000
Revenue 28,277	40,074 –	–
Profit/(loss) before income tax 176 Income tax expense (50)	2,545 (4,078) (435) –	(4,228) –
Total comprehensive income/(loss) 126	2,110 (4,078)	(4,228)
Total comprehensive income/(loss) allocated to non-controlling interests 14	211 (1,998)	(2,072)

Annual Report 2021 87

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20 PARTICULARS OF SUBSIDIARIES (Continued)

SUMMARISED STATEMENT OF CASH FLOWS ON SUBSIDIARIES WITH MATERIAL NONCONTROLLING INTERESTS

SUMMARISED STATEMENT OF CASH FLOWS ON SUBSIDIARIES WITH MATERIAL NON- CONTROLLING INTERESTS	SUMMARISED STATEMENT OF CASH FLOWS ON SUBSIDIARIES WITH MATERIAL NON- CONTROLLING INTERESTS	SUMMARISED STATEMENT OF CASH FLOWS ON SUBSIDIARIES WITH MATERIAL NON- CONTROLLING INTERESTS
Vision Values Aviation Services Limited Mission Wealth Group 2021 2020 2021 2020 HK$’000 HK$’000 HK$’000 HK$’000
Cash flows from operating activities Cash generated from/(used in) operations 5,345	9,441 (3,866)	(4,079)
Net cash generated from/(used in) operating activities 5,345 Net cash used in investing activities – Net cash generated from/(used in) financing activities 1,005	9,441 (3,866) (59) (15,507) (10,327) 19,092	(4,079) (21,721) 22,340
Net increase/(decrease) in cash and cash equivalents 6,350 Cash and cash equivalents at the beginning of year 18,451	(945) (281) 19,396 530	(3,460) 3,990
Cash and cash equivalents at end of year 24,801	18,451 249	530

The information above is the amount before inter-company eliminations.

88 Vision Values Holdings Limited

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21 INVENTORIES

INVENTORIES
2021	2020
HK$’000	HK$’000
Raw materials 678	–
Work in progress (Note) 379	83,846
Finished goods (Note) 92,527	264
93,584	84,110

Note: Capitalisation of construction costs ceased upon the completion of the yacht construction in the first half year of 2021 and the work in progress in respect of yacht building segment was transferred to finished goods totalling HK$92,100,000 as at 30 June 2021. Meanwhile, management assessed the net realisable value of the yacht inventory as at 30 June 2021, taking the latest market prices less selling expenses into consideration. Management engaged an independent professionally qualified valuer, Roma Appraisals Limited, to carry out valuation under market approach. The assessed net realisable value was below the carrying amount of the yacht inventory. Accordingly, an impairment of HK$14.1 million (2020: HK$19.8 million) (Note 8) was recognised in consolidated statement of profit or loss for the year ended 30 June 2021.

The cost of inventories recognised as expense in the consolidated statement of profit or loss amounted to approximately HK$2,868,000 (2020: HK$2,912,000).

22 TRADE RECEIVABLES

TRADE RECEIVABLES
	2021	2020
	HK$’000	HK$’000
Trade receivables	4,515	5,814

The carrying amounts of the Group’s trade receivables approximate their fair values.

The ageing analysis of trade receivables based on invoice date is as follows:

2021 HK$’000	2020 HK$’000
0 – 30 days 4,139 31 – 60 days 288 61 – 90 days 15 Over 90 days 73	5,566 190 – 58
4,515	5,814

Annual Report 2021 89

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22 TRADE RECEIVABLES (Continued)

All trade receivables are either repayable within one year or on demand. The Group generally grants credit terms of 30 to 90 days to its customers. The Group applies the HKFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for trade receivables. Note 4.1(b) provides for details about the calculation of the allowance.

In the opinion of the directors, the loss allowance for trade receivables as at 30 June 2021 and 2020 was insignificant.

The carrying amounts of the Group’s trade receivables are denominated in the following currencies:

2021	2020
HK$’000	HK$’000
HK$ 3,291	4,738
US$ 1,224	1,076
4,515	5,814

The maximum exposure to credit risk at the reporting date is the fair value of trade receivables mentioned above. The Group does not hold any collateral as security.

23 CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
	2021	2020 HK$’000
	HK$’000
Cash and cash equivalents		15,940
	30,819

Note: The cash and cash equivalents of certain subsidiaries of the Group as at 30 June 2021 included balances with banks in the Mainland China totalling approximately HK$534,000 (2020: HK$93,000) which were denominated in RMB and US$. The remittance of these balances outside the Mainland China is subject to the rules and regulations of foreign exchange control promulgated by the Mainland Chinese Government.

90 Vision Values Holdings Limited

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24 DEFERRED INCOME TAX LIABILITIES

		Fair value
		gain on
	Accumulated	investment
	depreciation	properties	Total
	HK$’000	HK$’000	HK$’000
As at 1 July 2019	186	2,736	2,922
(Credit)/charged to consolidated statement of profit or
loss (Note 13)	(92)	121	29
As at 30 June 2020	94	2,857	2,951
(Credit)/charged to consolidated statement of
profit or loss (Note 13)	(111)	360	249
As at 30 June 2021	(17)	3,217	3,200

Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. In this regard, the Group has estimated tax losses of approximately HK$106,248,000 (2020: HK$85,927,000) to carry forward against future taxation income. Other than the tax losses of approximately HK$169,000 (2020: HK$164,000) expiring within 5 years, the balance has no expiry date. These tax losses have not been recognised due to uncertainty of their future recoverability. As at 30 June 2021, the potential deferred tax losses which have not been recognised amounted to approximately HK$17,545,000 (2020: HK$14,192,000).

25 TRADE PAYABLES

The ageing analysis of the trade payables based on invoice date is as follows:

2021	2020
HK$’000	HK$’000
0 – 30 days 1,748	1,305
31 – 60 days 498 61 – 90 days – 91 – 180 days 1,348	12 129 22
3,594	1,468

Annual Report 2021 91

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Notes to the Consolidated Financial Statements (Continued)

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25 TRADE PAYABLES (Continued)

The carrying amounts of the Group’s trade payables are denominated in the following currencies:

	2021	2020
	HK$’000	HK$’000
HK$	1,894	1,191
US$ Euro	1,631 (“EUR”) 69	277 –
	3,594	1,468

The carrying amounts of the Group’s trade payables approximate their fair values.

26 BANK BORROWINGS

BANK BORROWINGS
2021	2020
HK$’000	HK$’000
Secured – Bank loan – within 1 year 68,000	38,000

As at 30 June 2021 and 2020, the Group’s borrowings contain a repayable demand clause and are repayable based on the scheduled date are as follows:

2021	2020
HK$’000	HK$’000
Within one year –	38,000
Between one and two years 68,000	–
68,000	38,000

92 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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26 BANK BORROWINGS (Continued)

The exposure of the Group’s borrowings to interest rate change as at 30 June 2021 and 2020 is disclosed in Note 4.1(a)(iii).

The Group has aggregate bank facilities of approximately HK$68,000,000 (2020: HK$38,000,000) for loans, which are secured by corporate guarantees provided by the Company and certain of its subsidiaries (2020: Same). There were no unused facilities as at 30 June 2021 and 2020.

As at 30 June 2021 and 2020, the Group’s investment properties in relation to an office premise and two car parking spaces located at Wan Chai with carrying amounts of HK$123,600,000 (2020: HK$138,200,000) were pledged as security for the Group’s bank borrowings.

In addition to the above, the Group is required to comply with certain restrictive covenants imposed by the banks.

The interest rate is charged at 1.5% per annum over Hong Kong Interbank Offered Rate (“ HIBOR ”) or 0.5% per annum over cost of fund of the banks, whichever is higher. As all the bank borrowings were at floating interest rates, the carrying amounts of the borrowings approximate their fair values and all balances are denominated in HK$.

27 SHARE CAPITAL

	No. of shares	HK$’000
Authorised
At 1 July 2019, 30 June 2020 and 30 June 2021	20,000,000,000	200,000
Issued and fully paid
At 1 July 2019, 30 June 2020 and 30 June 2021	3,924,190,467	39,242

The total authorised number of ordinary shares is 20,000 million (2020: 20,000 million) shares with a par value of HK$0.01 per share (2020: HK$0.01 per share).

Annual Report 2021 93

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Notes to the Consolidated Financial Statements (Continued)

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27 SHARE CAPITAL (Continued)

SHARE OPTION SCHEME

The share option scheme for the Group is valid and effective for a period of 10 years commencing on 23 November 2011 (the “ Share Option Scheme ”). The total number of shares issued and to be issued upon exercise of the options granted to each participant (including both exercised and outstanding options) in any 12-month period must not exceed 1% of the shares in issue from time to time unless separately approved by the shareholders in general meeting.

An option may be exercised in accordance with the terms of the scheme at any time during the period as the Board of Directors at their absolute discretion determine and in any event such period shall not be more than 10 years from the date upon which the offer of the option is made to the grantee. The Directors may, if consider appropriate, determine the minimum period for which an option must be held before it can be exercised.

Upon acceptance of the offer for an option, the grantee shall pay HK$1.00 as consideration for the grant. The subscription price of a share in respect of any option granted shall be determined by the board of Directors at their absolute discretion but shall be at least the highest of (i) the closing price of the shares as stated in the Stock Exchange’s daily quotations sheet on the date of grant; (ii) the average closing price of the shares as stated in the Stock Exchange’s daily quotations sheets for the 5 business days immediately preceding the date of grant; and (iii) the nominal value of a share.

Movements in the number of share options outstanding under Share Option Scheme and their related weighted average exercise prices are as follows:

	2021 Weighted average Number of	2020 Weighted average	Number of
	exercise price share	exercise price	share
	per share options HK$	per share HK$	options
At beginning of the year	0.299 296,000,000	0.402	214,810,629
Granted	– –	0.274	151,000,000
Lapsed	– –	0.560	(69,810,629)
At end of the year	0.299 296,000,000	0.299	296,000,000

94 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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27 SHARE CAPITAL (Continued)

SHARE OPTION SCHEME (Continued)

Share options outstanding under the Share Option Scheme at the end of the year have the following exercise periods and exercise prices:

			Number of shares
			subject to options
Date of grant	Exercise price	Exercise period	2021 2020
	HK$
7 April 2017	0.290	07/04/2017 to 06/04/2022	120,000,000 120,000,000
19 June 2018	0.496	19/12/2018 to 18/06/2023	6,250,000 6,250,000
19 June 2018	0.496	19/06/2019 to 18/06/2023	6,250,000 6,250,000
19 June 2018	0.496	19/12/2019 to 18/06/2023	6,250,000 6,250,000
19 June 2018	0.496	19/06/2020 to 18/06/2023	6,250,000 6,250,000
25 March 2020	0.274	25/03/2020 to 24/03/2025	151,000,000 151,000,000
			296,000,000 296,000,000

The fair values of options granted were determined as follows:

	7 April	19 June	19 June	19 June	19 June	25 March
	2017	2018	2018	2018	2018	2020
Option value (at grant date)	HK$21,022,540	HK$1,799,875	HK$1,834,125	HK$1,892,563	HK$1,938,438	HK$19,863,050
Fair value per option
(at grant date)	HK$0.16	HK$0.29	HK$0.29	HK$0.30	HK$0.31	HK$0.13
Significant inputs into
the valuation model:
Exercise price at grant date	HK$0.29	HK$0.50	HK$0.50	HK$0.50	HK$0.50	HK$0.27
Share price at grant date	HK$0.29	HK$0.49	HK$0.49	HK$0.49	HK$0.49	HK$0.27
Expected volatility	90.11%	86.49%	86.49%	86.49%	86.49%	72.73%
Risk-free interest rate	1.887%	2.735%	2.735%	2.735%	2.735%	0.720%
Life of options	5 years	5 years	5 years	5 years	5 years	5 years
Expected dividend yield	0%	0%	0%	0%	0%	0%
Valuation model applied	Binomial	Binomial	Binomial	Binomial	Binomial	Binomial

Note: The share options were granted to the Directors, employees and other eligible persons.

Annual Report 2021 95

Notes to the Consolidated Financial Statements (Continued)

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28 NOTE TO CONSOLIDATED STATEMENT OF CASH FLOWS

(a) Reconciliation of loss before income tax to net cash used in operations:

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Loss before income tax|(70,624)|(109,735)|
|Depreciation of property, plant and equipment|1,026|1,006|
|Depreciation of right-of-use assets|1,521|1,540|
|Fair value losses on investment properties|24,870|40,190|
|–|
|Gain on disposals of property, plant and equipment|(28)|
|Finance income|(4)|(63)|
|Finance costs|1,804|1,382|
|–|
|Share-based payment|21,392|
|Impairment loss on inventories|14,125|19,836|
|Changes in working capital|
|– trade receivables and contract assets|2,247|7,189|
|– prepayments, deposits and other receivables|1,837|231|
|– inventories|(23,598)|(19,646)|
|– trade payables|2,126|(2,496)|
|– accrued charges and other payables and contract liabilities|19,163|841|
|Net cash used in operations|(25,535)|(38,333)|

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(b) Proceeds from disposals of property, plant and equipment:

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|–|–|
|Net book value of property, plant and equipment (Note 16)|
|Gain on disposals of property, plant and equipment|28|–|
|Proceeds from disposals of property, plant and equipment|28|–|

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96 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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28 NOTE TO CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

• (c) Analysis of changes in financing during the year

The movements of liabilities from financing activities for the years ended 30 June 2021 and 2020:

		Advances		Non-
	Bank	from	Lease	controlling
	borrowings	a Director	liabilities	interests
	HK$’000	HK$’000	HK$’000	HK$’000
As at 1 July 2020	(38,000)	(8,732)	(1,124)	(28,290)
Cash flows, net	(30,000)	(19,944)	1,576	(9,358)
Non-controlling interests’ share of
total comprehensive loss	–	–	–	1,986
Non-cash – addition of lease
liabilities Non-cash – interest expense	– –	– (448)	(2,840) (56)	– –
As at 30 June 2021	(68,000)	(29,124)	(2,444)	(35,662)
As at 1 July 2019	(5,500)	–	(2,629)	(19,204)
Cash flows, net	(32,500)	(8,700)	1,584	(10,947)
Non-controlling interests’ share of
total comprehensive loss	–	–	–	1,861
Non-cash – interest expense	–	(32)	(79)	–
As at 30 June 2020	(38,000)	(8,732)	(1,124)	(28,290)

Annual Report 2021 97

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Notes to the Consolidated Financial Statements (Continued)

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29 OPERATING LEASE COMMITMENTS – THE GROUP AS LESSOR

During the year ended 30 June 2021, eight out of nine of the investment properties (2020: same) are leased to tenants under operating leases with rentals payable monthly/quarterly. The future minimum lease payments receivable on leases of the investment properties are as follows:

2021	2020
HK$’000	HK$’000
Less than one year 3,887	3,537
One to two years 994	1,577
Two to three years 640 Three to four years 53	813 586
Total 5,574	6,513

There is no contingent rents receivable from the leasing of investment properties.

30 CAPITAL COMMITMENTS

As at 30 June 2021, there is no capital expenditure of exploration activities in Mongolia which was authorised by management of the Group but not contracted for (2020: HK$24,775,000).

Capital expenditure contracted for at the end of the year but not yet incurred is as follows:

	2021	2020
	HK$’000	HK$’000
Yacht building	525	2,441

The Company did not have any other capital expenditure contracted for at the end of the year but not yet incurred (2020: Nil).

98 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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31 RELATED PARTY TRANSACTIONS

The Group is controlled by Moral Glory International Limited (“ Moral Glory ”) (incorporated in the British Virgin Islands) whereas the ultimate controlling party of Moral Glory is Mr. Lo. Moral Glory and Mr. Lo collectively owns 31.80% of the Company’s shares. The remaining 68.20% of the shares are widely held.

The Directors are of the view that the following entities were related parties that had transactions or balances with the Group during the year.

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|||||
|---|---|---|---|
|Name|Relationship with the Group|
|Mongolia Energy Corporation (Greater China)|A company of which Mr. Lo and Ms. Yvette Ong are the|
|Limited (“|MEC Greater China|”)|directors|
|Island Oasis Shipbuilding Limited|A company of which Mr. Lo, and Mr. Lo, Rex Cze Kei are the|
|(“|Island Oasis|”)|directors and Mr. Lo is the beneficial owner|
|Mongolia Energy Corporation Limited (“|MEC|”)|Except Mr. Ho Hau Chong, Norman, the Board of Directors|
|of the Company and the related company are the same|
|Cambo Management Limited|A company of which Mr. Lo, Mr. Lo, Rex Cze Kei and Mr. Lo,|
|(“|Cambo Management|”)|Chris Cze Wai are the directors and Mr. Lo is the beneficial|
|owner|
|Vision Aviation Services Limited|A company of which a director of a subsidiary of the Group|
|(“|Vision Aviation|”)|is the director and beneficial owner|

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(a) Other than transactions disclosed elsewhere in the financial statements, significant related party transactions, which were carried out in the normal course of the Group’s business and at terms negotiated between the Group and the respective parties, were as follows:

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Operating lease rental income from a related company|
|– MEC Greater China|367|317|
|Operating lease rental expenses to related companies|
|– Island Oasis|918|1,116|
|– Cambo Management|198|198|
|Unwinding of interests on lease liability to a related company|
|– Cambo Management|(37)|(70)|
|Reimbursement of sharing of administrative services to MEC (Note)|7,293|6,869|
|Interest expense paid/payable to a Director|448|32|

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Note: The administrative service is reimbursed at actual cost incurred.

Annual Report 2021 99

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Notes to the Consolidated Financial Statements (Continued)

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31 RELATED PARTY TRANSACTIONS (Continued)

(b) Year end balances arising from advances from a Director and the related party transactions as included in prepayments, deposits and other receivables, lease liabilities, and accrued charges and other payables are as follows:

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Amounts due from related companies (Note (i))|
|– Island Oasis|98|130|
|– Cambo Management|54|50|
|– MEC|–|12|
|Amounts due to related companies (Note (i))|
|– MEC Greater China|(49)|(53)|
|– MEC|(15,247)|(7,965)|
|Lease liability (Note (ii))|2,116|1,074|
|Advances from a Director (Note (iii))|(29,124)|(8,732)|

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Notes:

(i) The amounts due from/(to) related companies were unsecured and interest-free, and repayable on demand.

(ii) In May 2021, the Group renewed a lease agreement with a related company for 2 years. The Group recognised an addition of a right-of-use asset of HK$2,277,000 as at 30 June 2021.

(iii) The amounts are unsecured, interest-bearing at HK$ prime rate per annum (2020: HIBOR plus 2.5% per annum) and repayable by 30 June 2023 (2020: 31 December 2020). The undrawn revolving standby facilities as at year end amounted to HK$21,244,000 (2020: HK$7,300,000).

• (c) Key management compensation of the Group for the year is as follows:

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||||
|---|---|---|
|2021|2020|
|HK$’000|HK$’000|
|Salaries and other employee benefits|9,232|8,717|

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100 Vision Values Holdings Limited

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Notes to the Consolidated Financial Statements (Continued)

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32 STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENT OF THE COMPANY

STATEMENT OF FINANCIAL POSITION OF THE COMPANY

STATEMENT OF FINANCIAL POSITION OF THE COMPANY
	As at 30 June
	2021	2020
	HK$’000	HK$’000
ASSETS
Non-current assets
Investments in subsidiaries	328,705	367,614
	328,705	367,614
Current assets
Prepayments, deposits and other receivables	1,318	878
Cash and cash equivalents	1,228	–
	2,546	878
Total assets	331,251	368,492
EQUITY
Capital and reserves attributable to owners of
the Company
Share capital	39,242	39,242
Other reserves (Note)	490,461	490,461
Accumulated losses (Note)	(274,952)	(208,687)
Total equity	254,751	321,016
LIABILITY
Non-current liabilities
Advances from a Director	29,124	–
	29,124	–
Current liabilities
Bank overdrafts	–	6,810
Amounts due to subsidiaries	29,641	29,308
Accrued charges and other payables	17,735	2,626
Advances from a Director	–	8,732
Total liabilities	47,376	47,476
Total equity and liabilities	331,251	368,492

Annual Report 2021 101

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Notes to the Consolidated Financial Statements (Continued)

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32 STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENT OF THE COMPANY

(Continued)

Note:

Reserve movement of the Company

		Share
	Share	option		Accumulated
	Premium	reserve	Sub-total	losses	Total
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
At 1 July 2019	443,727	46,091	489,818	(130,039)	359,779
Loss for the year	–	–	–	(99,397)	(99,397)
Share-based payment	–	21,392	21,392	–	21,392
Share option lapsed	–	(20,749)	(20,749)	20,749	–
At 30 June 2020	443,727	46,734	490,461	(208,687)	281,774
Loss for the year	–	–	–	(66,265)	(66,265)
At 30 June 2021	443,727	46,734	490,461	(274,952)	215,509

33 EVENT OCCURRING AFTER THE REPORTING PERIOD

On 15 September 2021, 新疆遠見物流有限公司 (“ VVL ”), an indirect wholly owned subsidiary of the Group incorporated in the Mainland China, entered into an agreement and cooperated with 新疆鑫鵬鴻業物流有限公 司 (“ XPHY ”), a limited liability incorporated in the Mainland China, to set-up a new company for the provision of minerals and resources transportation services in the northwest of the Mainland China.

Pursuant to the terms of the agreement, VVL and XPHY will invest an aggregate registered capital of RMB37,050,000. VVL will contribute a total of RMB22,230,000 by way of cash representing 60% of the equity interest in this new company. The remaining RMB14,820,000 of the proposed registered capital representing the remaining 40% equity interest will be contributed by XPHY by way of cash and/or assets. All capital contribution will be paid within three years from the establishment of this new company. Upon establishment, 60% of the equity interest will be owned by VVL (and the Group) and since then, the company will become an indirect nonwholly owned subsidiary of the Group.

There is no financial impact on the consolidated financial statements for the year ended 30 June 2021.

102 Vision Values Holdings Limited

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Five-Year Financial Summary

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The historical figures represent financial information of the Group for the years from 2017 to 2021.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

		For the year ended 30 June	For the year ended 30 June
	2017	2018	2019	2020 2021
	HK$’000	HK$’000	HK$’000	HK$’000 HK$’000
Revenue	22,212	30,354	54,020	64,895 55,120
Profit/(loss) attributable to owners of the Company	(46,055)	9,819	(66,613)	(108,328) (68,934)
Basic earnings/(loss) per share (HK cents)	(1.42)	0.25	(1.70)	(2.76) (1.76)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

			As at 30 June
	2017	2018	2019	2020	2021
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Non-current assets
Property, plant and equipment	5,669	5,153	7,226	6,752	6,216
Right-of-use assets	–	–	–	1,089	2,408
Investment properties	149,175	350,012	342,564	301,070	279,570
Exploration and evaluation assets	57,267	69,890	32,531	53,785	69,268
Goodwill	3,334	–	–	–	–
Held-to-maturity financial assets	48,283	–	–	–	–
Rental deposit	–	–	75	–	192
Total non-current assets	263,728	425,055	382,396	362,696	357,654
Net current assets	264,019	128,246	92,804	33,374	10,658
Total assets less current liabilities	527,747	553,301	475,200	396,070	368,312
Equity
Capital and reserves attributable to owners of
the Company
Share capital	38,878	39,242	39,242	39,242	39,242
Other reserves	486,749	494,364	490,282	489,616	493,001
Accumulated losses	(28,145)	(18,326)	(76,450)	(164,029)	(232,963)
	497,482	515,280	453,074	364,829	299,280
Non-controlling interests	28,195	35,082	19,204	28,290	35,662
Total equity	525,677	550,362	472,278	393,119	334,942
Non-current liabilities
Deferred income tax liabilities	2,070	2,939	2,922	2,951	3,200
Advances from a Director Lease liabilities	– –	– –	– –	– –	29,124 1,046
Total non-current liabilities	2,070	2,939	2,922	2,951	33,370
Total equity and non-current liabilities	527,747	553,301	475,200	396,070	368,312
			As at 30 June
	2017	2018	2019	2020	2021
Net asset value per share attributable to owners of
the Company (HK$)	0.14	0.14	0.12	0.10	0.09
Number of shares issued (in thousand)	3,887,758	3,924,190	3,924,190	3,924,190	3,924,190

Annual Report 2021 103

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Schedule of Investment Properties

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INVESTMENT PROPERTIES AS AT 30 JUNE 2021

Location	Usage	Term of lease	Group Interest %
House No. 2B, Beijing Riviera	Residential	Medium term	100
1 Xiang Jiang North Road
Chaoyang District
Beijing, PRC
Office Unit 1002, 10th Floor	Commercial	Medium term	100
Jinyun Building
No. 43 Xizhimen North Avenue Jia
Haidian District
Beijing, PRC
Unit 2, Groud Floor, Fanling Industrial Centre	Commercial	Medium term	100
21 On Kui Street, On Lok Tsuen
Fanling, New Territories
Hong Kong
Unit 13, 2nd Floor, Fanling Industrial Centre	Commercial	Medium term	100
21 On Kui Street, On Lok Tsuen
Fanling, New Territories
Hong Kong
Car park space P4, 1st Floor	Commercial	Medium term	100
Fanling Industrial Centre
21 On Kui Street, On Lok Tsuen
Fanling, New Territories
Hong Kong
13th Floor, Wyndham Place	Commercial	Medium term	100
No. 44 Wyndham Street
Hong Kong
Carpark No. C15	Commercial	Medium term	100
3rd Carparking Floor, Wyndham Place
No. 44 Wyndham Street
Hong Kong
17th Floor, Henan Building	Commercial	Medium term	100
Nos. 90 and 92 Jaffe Road
Nos. 15, 17 and 19 Luard Road
Hong Kong
19th Floor, Fortis Bank Tower	Commercial	Medium term	100
Nos. 77, 78 –79 Gloucester Road
Hong Kong
Carpark Space Nos. 64 and 65	Commercial	Medium term	100
3rd Floor, Fortis Bank Tower
Nos. 77, 78-79 Gloucester Road
Hong Kong

104 Vision Values Holdings Limited