Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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MILLION STARS HOLDINGS LIMITED 萬星控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8093)

ANNOUNCEMENT OF UNAUDITED ANNUAL RESULTS FOR THE YEAR ENDED 30 JUNE 2022

CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE “STOCK EXCHANGE”)

GEM has been positioned as a market designed to accommodate small and midsized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

This announcement, for which the directors (the “Directors”) of Million Stars Holdings Limited (the “Company”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on GEM of the Stock Exchange (the “GEM Listing Rules”) for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

– 1 –

FINANCIAL RESULTS

The board of Directors (the “Board”) of the Company is pleased to announce the unaudited consolidated results of the Group for the year ended 30 June 2022, together with the audited comparative figures for the year ended 30 June 2021 as follows, which are presented in Hong Kong dollars (“HK$”):

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 30 June 2022

Notes Revenue 3 Cost of sales Gross profit Other income, gains and losses, net 4 Selling and distribution expenses Administrative expenses Impairment loss recognised on trade and other receivables, net Impairment loss recognised on property, plant and equipment Impairment loss recognised on goodwill Reversal of impairment loss recognised on amount due from an associate Share of results of associates Finance costs 5	2022 *HK$’000* (Unaudited) 46,774 (44,953) 1,821 2,311 (433) (24,120) (7,963) (7,652) – – – (114)	2021 HK$’000 (Audited) 209,261 (193,473) 15,788 2,887 (578) (27,108) (21,432) (270) (2,406) 1,415 (11,031) (1,128)

– 2 –

Notes Loss before tax Income tax expense 6 Loss for the year attributable to owners of the Company Other comprehensive income: Items that may be reclassified to profit or loss: Exchange differences arising on translating foreign operations Share of exchange differences of associates Other comprehensive income for the year, net of tax Total comprehensive expense for the year attributable to owners of the Company Loss per share 8 Basic Diluted	2022 *HK$’000* (Unaudited) (36,150) – (36,150) 3,466 – 3,466 (32,684) 2022 *HK cents* (Unaudited) (7.49) N/A	2021 HK$’000 (Audited) (43,863) (267) (44,130) 7,436 3,630 11,066 (33,064) 2021 HK cents (Audited) (10.51) N/A

– 3 –

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 June 2022

Notes Non-current assets Property, plant and equipment Right-of-use assets Intangible assets Interests in associates Goodwill Prepayment for acquisition of property, plant and equipment Current assets Trade receivables 9 Deposits, prepayments and other receivables Bank and cash balances Assets classified as held-for-sale Current liabilities Trade payables 10 Accruals and other payables Advance payments received from share subscription Amount due to a shareholder Amount due to a director Borrowings Loan from a director Lease liabilities Current tax liabilities Liabilities associated with assets classified as held-for-sale Net current assets Total assets less current liabilities	2022 *HK$’000* (Unaudited) 4,324 469 – – – – 4,793 4,783 115,128 19,917 139,828 – 139,828 – 16,014 – – – 9,327 604 286 2,127 28,358 – 28,358 111,470 116,263	2021 HK$’000 (Audited) 18,400 445 – – – 29,607
		48,452
		28,819 66,724 1,446
		96,989 52,861
		149,850
		7,907 14,031 6,300 354 654 10,162 – 454 4,258
		44,120 22,412
		66,532
		83,318
		131,770

– 4 –

Notes Non-current liabilities Lease liabilities NET ASSETS Capital and reserves Share capital 11 Reserves TOTAL EQUITY	2022 *HK$’000* (Unaudited) 177 177 116,086 4,880 111,206 116,086	2021 HK$’000 (Audited) –
		–
		131,770
		4,200 127,570
		131,770

– 5 –

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

The Company was incorporated in the Cayman Islands with limited liability. The address of the registered office of the Company is Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands. The principal place of business of the Company is Room 702 A&B, 7/F, Harbour Crystal Centre, 100 Granville Road, Tsim Sha Tsui, Kowloon, Hong Kong. The Company’s shares are listed on GEM of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

The Company is an investment holding company. The principal activities of its subsidiaries are mainly provision of internet advertising agency services, mobile payment technical support services and digital assets business.

The trading of shares of the Company was suspended as from 4 October 2021 and resumed trading on 26 September 2022.

The consolidated financial statements have been prepared on the historical cost basis.

The consolidated financial statements are presented in Hong Kong dollars (“HK$”), which is also the functional currency of the Company, unless otherwise stated.

2. APPLICATION OF NEW AND AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”)

Amendments to HKFRSs that are mandatorily effective for the current year

In the current year, the Company has applied the “Amendments to References to the Conceptual Framework in HKFRS Standards” and the following amendments to HKFRSs issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) for the first time, which are mandatorily effective for the annual period beginning on or after 1 January 2021 for the preparation of the financial statements:

Amendments to HKFRS 9, HKAS 39, Interest Rate Benchmark Reform — Phase 2 HKFRS 7, HKFRS 4 and HKFRS 16 Amendment to HKFRS 16

Covid-19-Related Rent Concessions beyond 30 June 2021

– 6 –

New and amendments to HKFRSs in issue but not yet effective

The Group has not early applied the following new and amendments to HKFRSs that have been issued but are not yet effective:

Amendments to HKAS 1	Classification of Liabilities as Current or Non-current and
	Hong Kong Interpretation 5 (2020), Presentation of
	Financial Statements — Classification by the Borrower of
	a Term Loan that Contains a Repayment on
	Demand Clause3
Amendments to HKAS 1 and	Disclosure of Accounting Policies3
HKFRS Practice Statement 2
Amendments to HKAS 8	Definition of Accounting Estimates3
Amendments to HKAS 12	Deferred Tax related to Assets and Liabilities arising from
	a Single Transaction3
Amendments to HKAS 16	Property, Plant and Equipment: Proceeds before Intended Use1
Amendments to HKAS 37	Onerous Contracts — Cost of Fulfilling a Contract1
Amendments to HKFRS 3	Reference to the Conceptual Framework2
Annual Improvements to	Amendments to HKFRS 1, HKFRS 9, Illustrative Examples
HKFRSs 2018–2020	accompanying HKFRS 16, and HKAS 411

1 Effective for annual periods beginning on or after 1 January 2022 2 Effective for business combinations for which the date of acquisition is on or after the beginning of the first annual period beginning on or after 1 January 2022
3 Effective for annual period beginning on or after 1 January 2023

The directors of the Company anticipate that the application of these new and amendments to HKFRSs, which are not yet effective, will have no material impact on the consolidated financial statements in the foreseeable future.

3. REVENUE AND SEGMENT INFORMATION

The Group’s reportable segments are as follows:

Internet advertising agency	—	provision of internet advertising agency services which
services		included promotion of online game and etc.
Mobile payment technical	—	provision of mobile payment technical support services
support services
Digital assets business	—	cryptocurrency related business

The Group’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies.

Disaggregation of revenue from contracts with customers by major products or service line for the year is as follows:

Internet advertising agency services Digital assets business	2022 *HK$’000* (Unaudited) 39,649 7,125 46,774	2021 HK$’000 (Audited) 209,261 – 209,261

– 7 –

Disaggregation of revenue from contracts with customers by timing of recognition for the year is as follows:

Over time Point in time 4. OTHER INCOME, GAINS AND LOSSES, NET Gain on deemed disposal of an associate Gain on disposal of an intangible asset Gain on termination and revision of acquisition of intangible assets Gain on termination of lease contracts Loss on disposal of property, plant and equipment Loss on written off of property, plant and equipment Interest income on bank deposits Interest income on loans receivable Exchange gain/(losses), net Gain on disposal of available-for-sale assets Sundry income 5. FINANCE COSTS Interest on bank and other borrowings Interest on lease liabilities 6. INCOME TAX EXPENSE Current tax: Hong Kong Profit Tax	2022 *HK$’000* (Unaudited) 39,649 7,125 46,774 2022 *HK$’000* (Unaudited) – – – – (7,799) – 1 496 7 9,592 14 2,311 2022 *HK$’000* (Unaudited) 107 7 114 2022 *HK$’000* (Unaudited) –		2021 HK$’000 (Audited) 209,261 – 209,261 2021 HK$’000 (Audited) 211 2,444 3,741 1,366 – (7,665) 5 1,834 (116) – 1,067 2,887 2021 HK$’000 (Audited) 858 270 1,128 2021 HK$’000 (Audited) 267

– 8 –

Pursuant to the rules and regulations of the Cayman Islands and the BVI, the Group is not subject to any income tax in the Cayman Islands and the BVI for both years.

Under the two-tiered Hong Kong profits tax regime, the first HK$2 million of assessable profits of qualifying corporations will be taxed at 8.25% with effect from the year assessment 2018/2019. Profits above HK$2 million will continue to be subject to the tax rate of 16.5%. The profits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed at the rate of 16.5%.

PRC enterprise income tax (“EIT”) has been provided at a rate of 25% (2020: 25%). No provision for PRC EIT has been made in the consolidated financial statements as the Group has no profit for both years presented that are assessable to PRC EIT.

Pursuant to the Notice of the Ministry of Finance and the State Administration of Taxation on Enterprise Income Tax Policies for Xinjiang Uygur Autonomous Region and Xinjiang Kashgar Autonomous Region (《財政部、國家稅務總局關於新疆喀什霍爾果斯兩個特殊經濟開發區企業所得稅優惠政策的通知》) promulgated by the State Council on 29 November 2011, if a corporate enterprise is newly established within calendar years 2010 to 2021 in two specific regions with business fallen in the scope of the Catalogue of Preferred Enterprise Income Tax for Key Encouraged Industries in Poor Areas of Xinjiang (《新疆困難地區重點鼓勵發展產業企業所得稅優惠目錄》), the corporate enterprise can enjoy a preferential treatment of 5-year exemption from the first year when the entity begins to generate revenue. The Company’s subsidiaries, 霍爾果斯思凡信息科技有限公司 (Horgos Sifan Information Technology Limited), 霍爾果斯香蕉超人信息科技有限公司 (Horgos Xiangjiao Chaoren Information Technology Limited) and 霍爾果斯東潤網絡科技有限公司 (Horgos Dongrun Network Technology Limited) are exempted from income tax from calendar years 2017 to 2021 upon approval by the State Taxation Bureau of the Xinjiang Uygur Autonomous Region in 2017.

Taxation for other jurisdictions are calculated at the applicable rates prevailing where the group entities operate.

7. DIVIDENDS

No dividend was paid or proposed for ordinary shareholders of the Company during the year, nor has any dividend been proposed since the end of the reporting period (2021: Nil).

8. LOSS PER SHARE

The calculation of the basic loss per share is based on the following data:

Loss for the purpose of calculating basic loss per share Loss for the year attributable to owners of the Company Weighted average number of ordinary shares for the purpose of basic loss per share	2022 *HK$’000* (Unaudited) (36,150) 2022 *’000* (Unaudited) 482,900	2021 HK$’000 (Audited) (44,130) 2021 ’000 (Audited) 420,000

No diluted loss per share for both of the years ended 30 June 2022 and 30 June 2021 were presented as there were no potential ordinary shares in issue for both of the years.

– 9 –

9. TRADE RECEIVABLES

Trade receivables Less: Allowances	2022 *HK$’000* (Unaudited) 27,815 (23,032) 4,783	2021 HK$’000 (Audited) 43,888 (15,069
		28,819

The Group’s trading terms with other customers are mainly on credit. The Group generally allows an average credit period from not more than 60 days for its internet advertising agency business customers. The Group does not hold any collateral over these balances.

Before accepting any new customer, the management assesses the potential customer’s credit quality and defines credit limits by customer.

The ageing analysis of trade receivables (net of allowances), based on dates on which revenue was recognised, and net of allowance, is as follows:

Within 30 days 31 to 60 days 61 to 90 days 91 to 180 days 181 to 365 days	2022 *HK$’000* (Unaudited) – – – – 4,783 4,783	2021 HK$’000 (Audited) 7,038 7,271 7,583 6,927 –
		28,819

As at 30 June 2022, allowances were made for estimated irrecoverable trade receivables of approximately HK$23,032,000 (2021: HK$15,069,000).

10. TRADE PAYABLES

	2022	2021
	*HK$’000*	HK$’000
	(Unaudited)	(Audited)
Trade payables	–	7,907

– 10 –

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

Within 30 days 31 to 60 days 61 to 90 days Over 90 days 11. SHARE CAPITAL Ordinary shares of HK$0.01 each Authorised: At 1 July 2020, 30 June 2021 (Audited), 1 July 2021 and 30 June 2022 (Unaudited) Issued and fully paid: At 30 June 2021 and 1 July 2021 (Audited) Issue of ordinary shares under share subscription As at 30 June 2022 (Unaudited) 12. CAPITAL COMMITMENT Acquisition of property, plant and equipment contracted for but not provided in the consolidated financial statements	2022 *HK$’000* (Unaudited) – – – – – Number of shares ’000 4,000,000 420,000 68,000 488,000 2022 *HK$’000* (Unaudited) –		2021 HK$’000 (Audited) – – – 7,907
			7,907
			Share capital HK$’000 40,000
			4,200 680
			4,880
			2021 HK$’000 (Audited) 13,931

13. EVENTS AFTER THE REPORTING PERIOD

Save as disclosed in this announcement, there is no significant event that took place subsequent to 30 June 2022.

– 11 –

14. USE OF PROCEEDS

On 28 April 2021, the Company entered into two subscription agreements (the “Subscription Agreements”) with two subscribers (the “Subscribers”) pursuant to which the Subscribers have conditionally agreed to subscribe for, and the Company has conditionally agreed to allot and issue 84,000,000 shares of the Company at the subscription price of HK$0.25 per share. On 1 July 2021, the Company and Mr. Gan Xiaohua (the “Subscriber B”) entered into a second supplemental agreement pursuant to which the parties agreed, amongst other things, to reduce the number of subscription shares from 32,000,000 shares to 16,000,000 shares. The Subscription Agreements have been completed on 28 July 2021 and 68,000,000 shares have been allotted and issued to the Subscribers.

Each of the gross proceeds and net proceeds from the issue of the shares is estimated to be HK$17,000,000 and approximately HK$16,955,000 respectively. The Company intends to use the net proceeds for general working capital of the Group and for the future development of the Group’s business. The net price of each share is approximately HK$0.25.

The table below gives out the details of the use of proceeds:

		Allocation of
		advance
		payments
		received		Remaining
		from share	Amount	Balance of
		subscription	Utilized	Net Proceeds
	Allocation of	as at 30 June	as at 30 June	as at 30 June
	Net Proceeds	2022	2022	2022
	HK$’000	HK$’000	HK$’000	HK$’000
Issue of 68,000,000 shares
on 28 July 2021
Future business development,
including but not limited to data
centre and other potential
business development	10,000	10,000	10,000	0
Repayment of borrowing	6,000	6,000	6,000	0
General working capital of the
Group	955	955	955	0

– 12 –

FINAL DIVIDEND

The Board does not recommend the payment of any final dividend for the year ended 30 June 2022 (2021: HK$Nil).

MANAGEMENT DISCUSSION AND ANALYSIS

Introduction

The Group is an integrated group, which is principally engaged in internet advertising agency services and digital assets business during the year.

Business Review

The Group and its subsidiaries are principally engaged in the provision of internet advertising agency services, including the provision of game promotion, big data support, integrated marketing solutions, local language support and other services for its customers. During the second half of 2021, the Group has relied on its team with expertise in the field of digital assets business to expand its overseas cryptocurrency business.

Internet Advertising Agency Services

Million Stars Internet Media Limited (“MSIM”), a wholly-owned subsidiary of the Group, develops the overseas internet advertising market. Through global mainstream online platforms, including Facebook and Google, MSIM provides customers with access to global advertising, including the provision of game promotion, big data support, integrated marketing solutions, local language support and account stabilisation services for its customers. Seizing the opportunity of the rapid development of the Internet, the Group will continue to adjust the investments in the internet advertising business and seek to tap on revenue streams of the Internet.

Digital Assets Business

With professional management and team in the field of digital assets business that possess specialized knowledge in the structure, quality and operation of cryptocurrency mining equipment, the Company is fed with the supply and demand information in the market. The management of the Company closely monitors the movement and volatility of the prices of digital currencies to formulate reasonable and competitive pricings with reference to the conditions of the competitors.

– 13 –

Since the end of 2021, a new round of COVID-19 pandemic has continued to spread in Mainland China. In respond to this, the Chinese government has implemented precise prevention and control measures, which has certain effects on the Group’s business activities in the PRC. In particular, Shanghai Municipality, where the headquarter of the Group is located, locked down in March to June 2022 due to COVID-19 pandemic, leading to the suspension of intra-city transportation and inter-city logistics, which greatly affected business operations.

During the period, total operating income of the Group of approximately HK$46.8 million was achieved, in which revenue from internet advertising agency services amounted to HK$39.7 million, and revenue from the digital assets business under the mining business and custody business was HK$7.1 million during the reporting period.

Outlook

Internet advertising agency services business undertaken by the Group are still progressing normally. The Group and its wholly-owned subsidiary will continue to develop its overseas internet advertising market, and with the opportunities emerged from the new rural areas, new retail and new consumption in the Mainland China that facilitate the digital empowerment to the real industries, the Group plans to expand its advertisement services into the following new segments, including offline mobile devices advertising, digitalized smart terminals advertising, offline on-screen advertising, O2O platforms advertising and in-app advertising, through which more suppliers and government authorities could be served with our advertising services and more target audiences could be reached, and hence, the business of agricultural products and other consumer goods could be extended.

In the second half of 2021, the Group gradually expanded its scope of business to digital assets business from its single internet advertising agency services. As there will be enormous room of development and promising prospects for the digital assets business in the future, the Group will leverage the existing competitive edges and rely on the professional technology, operation and marketing teams to continuously increase its investment on the construction of global supercomputing centres so as to build an ecosystem based on computing power, which provides global customers with professional hosting of supercomputing servers, and the rental and sales of cloud computing and cloud storage services. In the future, apart from continuous investment on cryptocurrency servers purchasing, the Group will endeavor to expand the global trade and development of supercomputing servers.

The Group will continue to proactively seek for potential business opportunities, and explore new customers, businesses and sources of revenue to deliver better returns to the shareholders.

– 14 –

Financial Review

Revenue

The Group’s revenue principally represented income derived from the provision of internet advertising agency services and digital assets business.

The Group has recorded a revenue of approximately HK$46.8 million for the year ended 30 June 2022, representing a decrease of approximately 77.7% as compared with about HK$209.3 million for the year ended 30 June 2021.

Cost of Sales and Gross Profit

Cost of sales mainly represents costs incurred for provision of internet advertising agency services and digital assets business during the year.

The Group’s cost of sales amounted to approximately HK$45 million for the year ended 30 June 2022. Cost of sales decreased by approximately 76.8% as compared with the cost of sales for the year ended 30 June 2021.

Gross profit margin of approximately 3.9% for the year ended 30 June 2022 decreased by 3.6% comparing to the gross profit margin of approximately 7.5% for the year ended 30 June 2021, mainly due to the decreased advertisement budgets from the clients of internet advertisement business, which resulted in lowering the fees by the Company while providing quality services.

Other Income, Gains and Losses, net

Other income, gains and losses, net, mainly represents sundry income or (losses) incidental to our business, principally including interest income, gain on disposal of available-for-sale asset and loss on disposal of certain fixed assets.

Other income, gains and losses, net, amounted to net gains of approximately HK$2.3 million for the year ended 30 June 2022 compared to net gains of approximately HK$2.9 million for the year ended 30 June 2021.

Selling and Distribution Expenses

Selling and distribution expenses comprise mainly payroll expenses. The selling and distribution expenses for the year ended 30 June 2022 and 2021 were approximately HK$0.4 million and HK$0.6 million respectively. The decline in selling and distribution expenses was mainly due to the tight cost control exercised for internet advertising agency business and decrease in the number of practising staff of internet advertising agency business.

– 15 –

Administrative Expenses

Administrative expenses comprised mainly payroll expenses, rent, depreciation, operating expenses and other office administrative expenses. Administrative expenses were approximately HK$24.1 million for the year ended 30 June 2022, while amounted to approximately HK$27.1 million for the year ended 30 June 2021, representing an decrease of approximately 11%.

The higher administrative expenses for the year ended 30 June 2022 were recorded mainly due to the decrease in staff costs and the decrease depreciation of property, plant and equipment.

Finance Costs

Finance costs decreased to HK$0.1 million in FY2022 from HK$1.1 million in FY2021, primarily due to decrease in interest on bank and other borrowings and interest on lease liabilities.

Income tax expense

Income tax represents Hong Kong profits tax at 16.5% for the Company’s subsidiaries in Hong Kong and PRC Enterprise Income Tax at 25% for the Company’s subsidiaries in the PRC. Certain subsidiaries of the Company, which are incorporated in the Horgos Economic Development Zone and engaged in industries particularly encouraged by the local government, are entitled to a preferential tax treatment of five years exemption from enterprise income tax.

Loss for the year

The Group recorded a loss for the year of approximately HK$36 million and HK$44.1 million for the year ended 30 June 2022 and 2021 respectively.

Financial Position, Liquidity and Financial Resources

The Group adopts a prudent cash and financial management policy. In order to achieve better cost control and minimise the costs of funds, the Group’s treasury activities are centralised and cash is generally deposited with banks in Hong Kong and Mainland China.

The Group has maintained its funds at a sound and healthy financial resource level during the year under review. As at 30 June 2022, included in net current assets were cash and bank balances (including pledged bank deposits) totalling approximately HK$19.9 million (30 June 2021: HK$1.4 million), the increase in which was mainly attributable to the extension of payment terms on the settlement with suppliers.

– 16 –

The Group’s outstanding borrowings as at 30 June 2022 amounting to HK$9.3 million (30 June 2021: HK$10.2 million) were principally denominated in HKD and carried at fixed interest rates.

The Group monitored capital using gearing ratio, which is total debt of the Group divided by total equity of the Group.

Total debt to equity ratio of the Group expressed as a percentage of interest bearing borrowings over the total equity was approximately 8% as at 30 June 2022 (30 June 2021: 7.7%).

As at 30 June 2021, there was no seasonality as to the Group’s borrowing requirements and no committed borrowing facilities.

Financial Management Policies

The Group in its ordinary course of business is exposed to market risks such as currency risk and interest rate risk. The Group’s risk management policy aims to minimise the adverse effects of these risks on its financial performance.

Cash is generally deposited with banks in Hong Kong and Mainland China, which is denominated mostly in United States dollars, Hong Kong dollars and Renminbi. Hong Kong dollars are pegged to United States dollars under the current policy of the Government of Hong Kong.

As the Group’s trading transactions, monetary assets and liabilities in Mainland China are denominated mainly in Renminbi, and trading transactions, monetary assets and liabilities in Hong Kong and overseas are denominated mainly in Hong Kong dollars (being the Group’s operating and reporting currencies) and United States dollars (to which Hong Kong dollars were pegged), the impact of foreign exchange exposure to the Group was minimal and the changes in foreign exchange rates did not have a significant adverse effect on normal operations during the reporting periods.

With the current interest rates staying at relatively low levels, the Group has not entered into any interest rate hedging contracts or any other interest rate related derivative financial instrument. However, the Group continues to monitor its related interest rate exposure closely.

Charge Over Assets of the Group

As at 30 June 2022, there is no pledged bank deposits of the Group to support the Group’s banking facilities (30 June 2021: Nil).

– 17 –

Capital Commitments

As at 30 June 2022, the Group did not have any significant capital commitment (30 June 2021: capital commitment of the Group relating to the acquisition of property, plant and equipment amounting to HK$13.9 million).

Contingent Liabilities

As at 30 June 2022, the Group did not have any significant contingent liability (30 June 2021: Nil).

Risk management and uncertainties

The Board believes that risk management is essential to the Group’s efficient and effective operation. The Group’s management assists the Board in periodic evaluation of principal risks exposed to the Group and estimation made for the uncertainties; and participates in formulating appropriate risk management and internal control measures for the purpose of on-going monitoring of such risks and assessing the appropriateness of such estimations.

Material Acquisitions and Disposals

During the year ended 30 June 2022, the Group did not have any material acquisition or disposal in FY2022.

Events after the reporting period

Save as disclosed in this announcement, there is no significant event that took place subsequent to 30 June 2022.

Employees and Remuneration Policy

As at 30 June 2022, the Group had a workforce of 28 employees (2021: 48). Total staff costs for FY 2022 were approximately HK$5.5 million, as compared to total staff costs of HK$7.3 million in FY 2021.

The emolument policy of the employees of the Group is formulated by the Remuneration Committee (as defined below) with reference to the duties, responsibilities, experience and competence of individual employees. The same policy also applies to the Directors. In addition to salaries and discretionary bonuses relating to the performance of the Group, employee benefits included pension scheme contributions. The emoluments of the Directors are reviewed annually by the remuneration committee of the Company (“Remuneration Committee”).

– 18 –

As incentives and rewards for their contributions to the Group, the employees of the Group and all the Directors (including the independent non-executive Directors) may also be granted share options by the Company from time to time pursuant to the share option scheme of the Company adopted on 28 January 2015.

The Group provides various training to its employees to enhance their technical skills and knowledge relevant to the employees’ responsibilities. The Group also provides its employees with quality control standards and work safety standards training to enhance their safety awareness.

The employees in Hong Kong are enrolled in the Mandatory Provident Fund under the Hong Kong Mandatory Provident Fund Schemes Ordinance. Monthly contributions are made by the Group which are 5% of the monthly income of the employees as stipulated under the relevant requirements (if applicable), with the maximum contributions of HK$1,500 monthly.

Pursuant to the regulations of the relevant authorities in the PRC, the employees in PRC shall be enrolled in the respective government retirement benefit schemes (the “Schemes”) whereby the Group is required to contribute to the Schemes to fund the retirement benefits of the eligible employees. Contributions made to the Schemes are calculated based on certain percentages of the applicable payroll costs as stipulated under the requirements in the PRC. The relevant authorities of the PRC are responsible for the entire pension obligations payable to the retired employees. The only obligation of the Group with respect to the Schemes is to pay the ongoing required contributions under the Schemes.

During the year under review, the Group did not experience any strikes, work stoppages or significant labour disputes which affected its operations in the past and it did not experience any significant difficulties in recruiting and retaining qualified staff. The Directors consider that the Group has maintained good working relationship with its employees.

DIRECTORS’ AND CONTROLLING SHAREHOLDERS’ INTEREST IN COMPETING BUSINESS

During the FY 2022, the Directors are not aware of any business or interest of the Directors or the controlling shareholders of the Company that competes or may compete with the business of the Group and any other conflicts of interest which any such person has or may have with the Group.

– 19 –

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

During the FY 2022, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities.

MODEL CODE FOR SECURITIES TRANSACTIONS

The Company has adopted a code of conduct for securities transactions and dealing (the “Code of Conduct”) by Directors on terms no less exacting than the required standard set out in Rules 5.48 to 5.67 of the GEM Listing Rules (the “Model Code”). The Company has made specific enquiry of all Directors as to whether they have complied with the required standard set out in the Model Code and the Code of Conduct during the year ended 30 June 2022.

All the Directors have confirmed that they have complied with the required standards set out in the Model Code and the Code of Conduct throughout the year ended 30 June 2022.

CORPORATE GOVERNANCE CODE

The Company has adopted the code provisions on Corporate Governance Code and Corporate Governance Report in force during the year ended 30 June 2022 as set out in Appendix 15 (version up to 31 December 2021) to the GEM Listing Rules.

The requirements under the new Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules (the “New CG Code”) which came into effect on 1 January 2022 shall apply to the Company’s corporate governance report for the financial year commencing on 1 January 2022.

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During the year ended 30 June 2022, the Group was in compliance with the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules, except the deviations disclosed below:

			Considered Reason
	Code Provision	Deviation	for Deviation
A.2.1 (which	The roles of chairman and	Mr. Zhu Yongjun, the	The Board believes that the
was rearranged	chief executive officer should	Chairman and Executive	present arrangement enables the
to code	be separated and should not be	Director, has been	Company to make and implement
provision C.2.1	performed by the same	appointed as Chief	decisions promptly, and thus
of the New CG	individual.	Executive Officer of the	achieve the Company’s
Code)		Company (the “CEO”)	objectives efficiently and
		with effect from 11	effectively in response to the
		November 2020.	changing environment. The
			Company will periodically
			review the Board’s structure in
			light of the evolving needs of the
			Group and consider segregation
			of the two roles if and when
			appropriate.
A.2.7 (which	The chairman should at least	Due to the outbreak of	The independent non-executive
was rearranged	annually hold meetings with	Covid-19, the chairman	directors were able to
to code	the independent non-executive	fail to hold physical	communicate their views
provision C.2.7	Directors without the presence	meeting at least annually	individually to the chairman by
of the New CG	of other directors.	with the independent	different electronic means.
Code)		non-executive Directors
		without the presence of
		other directors.
C.1.2 (which	Management should provide	The management could	The Board members of the
was rearranged	all members of the Board	not provide the Directors	Company were still informed by
to code	with monthly updates giving	with updated financial	the management of the Company
provision D.1.2	a balanced and	information of the	by email, by WeChat or by phone
of the New CG	understandable assessment	Company each month	on the updated information of the
Code)	of the Company’s	due to the lockdown of	Company’s performance and
	performance, position and	certain cities in China	future business plan from time to
	prospects in sufficient detail	during the outbreak of	time.
	to enable the Board as a	Covid-19.
	whole and each Director to
	discharge their duties under
	Rule 5.01 and Chapter 17 of
	the GEM Listing Rules.

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Considered Reason for Deviation

Deviation

Code Provision

C.2.1 (which	The Board should oversee the	During the period, the	The Company had engaged
was rearranged	issuer’s risk management and	Company failed to have	external consultants to review its
to code	internal control systems on an	effective risk	certain existing internal control
provision D.2.1	ongoing basis, ensure that a	management and internal	measures on the areas agreed by
of the New CG	review of the effectiveness of	control systems within	the Board of Directors and
Code)	the issuer’s and its	the Group, i.e.	provide suggestions to improve
	subsidiaries’ risk management	deficiencies in internal	the internal control systems and
	and internal control systems	control over compliance	risk management systems of the
	has been conducted at least	matters.	Group.
	annually and report to
	shareholders that it has done so		The management has taken steps
	in its Corporate Governance		to set up and improve the risk
	Report. The review should		management and internal control
	cover all material controls,		systems as recommended by the
	including financial, operational		external consultant.
	and compliance controls.

AUDIT COMMITTEE AND REVIEW OF FINANCIAL STATEMENTS

The Audit Committee has been established in accordance with the GEM Listing Rules. Members of the Audit Committee comprise Mr. Chen Ce (Chairman), Ms. Jiang Ying and Ms. Zhu Minli, all of them being independent non-executive Directors. The Audit Committee has reviewed with the management this announcement, the accounting principles and practices adopted by the Group, financial reporting matters including a review of the unaudited consolidated annual results for the year ended 30 June 2022 prior to recommending them to the Board for approval.

REVIEW OF UNAUDITED ANNUAL RESULTS

Since the end of 2021, a new wave of COVID-19 outbreak has continued to spread in Mainland China. The stringent pandemic prevention and control measures implemented by the Chinese government have had a material adverse impact on the Group’s business activities and audit reviews in the PRC. Personnel of the Group’s subsidiaries in different regions in the PRC have been restricted from travelling from time to time, which became a hindrance to the Group’s business development and auditing work. It was not until July that the financial team of the Company gradually and orderly resumed the auditing work with CCTH. The annual results contained herein is only based on a preliminary assessment by the Board with reference to the information currently available which have not been agreed by CCTH as required under the GEM Listing Rules. An announcement relating to the audited results will be made when the auditing process has been completed in accordance with Hong Kong Standards on Auditing issued by HKICPA.

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Material Uncertainty and Outstanding Audit Procedures

Due to COVID-19 outbreak, travel restrictions and quarantine policies imposed by the government in the PRC, our auditor was unable to obtain certain balance confirmations from the customers, suppliers and banks in the PRC.

The COVID-19 outbreak also led to delay in preparation of the impairment assessment of certain assets in the PRC. Our auditor has not completed the review of the impairment assessment on certain assets of the Group, including trade and other receivables and property, plant and equipment. The impairment assessment of these assets involved the use of significant management judgements and estimates.

The finalization of the audited results for the year ended 30 June 2022 will be subject to the completion of the above audit procedures.

FURTHER ANNOUNCEMENT(S)

Following the completion of the auditing process, the Company will issue further announcement(s) in relation to the audited results for the year ended 30 June 2022 as agreed by the Company’s auditor and the material differences (if any) as compared with the unaudited annual results contained herein. The Company expects the auditing process will be completed on or before 30 October 2022.

The financial information contained herein in respect of the annual results of the Group have not been audited and have not been agreed by our auditor, and are subject to adjustments (if any). Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

PUBLICATION OF ANNUAL REPORT

The 2022 audited annual report containing all the information required by the GEM Listing Rules is expected to be dispatched to the shareholders of the Company and published on the respective websites of the Stock Exchange and the Company on or before 30 November 2022.

By Order of the Board Million Stars Holdings Limited Zhu Yongjun Chairman and Chief Executive Officer

Hong Kong, 30 September 2022

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As at the date hereof, the Board comprises Mr. Zhu Yongjun, Mr. Gan Xiaohua and Ms. Tian Yuan as executive Directors; and Mr. Chen Ce, Ms. Jiang Ying and Ms. Zhu Minli as independent non-executive Directors.

This announcement will remain on the GEM website at http://www.hkgem.com on the “Latest Listed Company Announcements” page for at least 7 days from the day of its publication and on the website of the Company at http://www.millionstars.hk.

for identification only

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