TIDMRCGH
RNS Number : 2585B
RC365 Holding PLC
30 September 2022
30 September 2022
RC365 Holding Plc
("RC365" or the "Company")
Annual Financial Report
RC365 Holding Plc ("RC365"), a company focusing on payment
gateway solutions and IT support and security services, is pleased
to announce the publication of its audited Annual Report and
Accounts for the year ended 31 March 2022.
Financial highlights
-- Revenue up by 9.6% to HKD8.07m (2021: HKD7.4m)
-- Net assets up 287% to HKD19m (2021: HKD4.9m)
-- Cash balance as at 31 March 2022 HKD23.4m (2021: HKD4.3m)
Operational highlights
-- Soft launch of CATCH AR, the Group's proprietary, internally
developed mobile application, October in 2021
-- Company raised GBP2.1m before expenses in an initial public
offering on the Main Market of the London Stock Exchange
-- Acquisition of RCPAY Limited (Hong Kong), Regal Crown
Technology (Singapore) Pte Limited and RCPAY Limited (UK) post year
end
For further information please contact:
RC365 Holding plc T: +852 2251 1621
Chi Kit LAW, Chief Executive Officer E: ir@rc365plc.com
Guild Financial Advisory Limited - T: +44 (0)7973 839767
Financial Adviser E: ross.andrews@guildfin.co.uk
R oss Andrews
CHAIRMAN'S STATEMENT
I have great pleasure in presenting our maiden Annual Report as
a public company. RC365 Holding plc ("RC365" or the "Group") was
incorporated on 24 March 2021 as RC365 Holding Limited and
re-registered as a public limited company on 22 September 2021. On
23 March 2022, the Company raised GBP2.1 million before expenses in
an initial public offering on the Main Market of the London Stock
Exchange (the "IPO").
The Group delivered revenues during the year of HK$8,069k. The
Group continued to support its clients by providing competitive
fintech solutions, helping them to adapt and to stay ahead of
competition. A key focus for the Group continues to be to develop
innovative products and services to attract new customers. Loss
before tax was HK$3,897k and cash at 31 March 2022 was
HK$23.4m.
"Catch AR", the Group's proprietary, internally developed mobile
application for Android and iOS, which is aimed at providing
clients in businesses, such as catering and entertainment, a
platform to promote their services and branding through the Group's
innovative AR (augmented reality) and VR (visual reality) system,
is expected to officially launch in October 2022. The product soft
launched in 2021 and the current users have expressed a strong
intention that they will join the fee payment program as the trial
period comes to an end. Once it has been fully developed, the Group
plans to expand Catch AR to clients in China and Singapore.
The "Maid-Maid Matching" platform that allow prospective maids
searching for jobs to find an employer online without having to pay
a high commission to a local employment service company is also set
to officially launch in October 2022.
These exciting developments taking place next month puts RC365
ahead of the market and the Company is well positioned to expand
its products and services in other jurisdictions.
Strategy
RC365's strategy is to grow its share of its existing markets,
develop new capabilities and expand into new geographies within the
fast growing and attractive markets in which it operates. We will
remain alert to opportunities and this Annual Report will explain
the developments we have made over the course of the year and post
year end. The Board believes these advances have positioned the
firm well for FY23 and continued future growth.
Management team
In order to successfully execute on its strategy, RC365 has
strengthened the management team by appointing two experienced
individuals from the Fintech Industry; Yee Leong Wong and Wai Siang
Ang. RC365 will continue to build up and enhance the team to enable
the Group to meet its objectives.
Post year end
The Company announced the acquisition of RCPAY Limited (a
private limited company incorporated in Hong Kong), Regal Crown
Technology (Singapore) Pte Limited (a private limited company
incorporated in Singapore) and, subject to FCA approval, RCPAY
Limited (a private limited company incorporated in UK). The
consideration payable was GBP1 per acquisition. These acquisitions
will provide growth opportunities for the Group to expand and
consolidate in the Hong Kong, Singapore, UK and other ASEAN markets
and providing cross border payment solutions around the world. The
UK and Hong Kong companies will also provide money remittance and
exchange services and have obtained the relevant licenses from the
regulatory authorities in UK and Hong Kong.
On 30 August 2022, the Company announced the appointment of Mr.
Tang as Chief Financial Officer and Company Secretary, replacing
Mr. Cheung who has resigned due to personal health concerns. Mr.
Tang joined the group in October 2020 as an executive manager and
over the years he has built a strong understanding of the fintech
solutions industry.
Outlook
Hong Kong continues to be one of the principal markets for the
Group and as the City begins to relax its quarantine requirements,
we expect this to stimulate cross-border activity, enabling RC365
to carry out its strategy.
With a strong balance sheet and our recent acquisitions, the
Board is looking to the future with optimism. Moving forward the
Company will continue to seek at opportunities in and around the
fintech solutions sector.
Finally, we would like to take this opportunity to thank our
shareholders for their continued support and look forward to
reporting on our progress as we deliver on our growth strategy.
Kwai Wah Sunny NG
Non Executive Chairman
30 September 2022
STRATEGIC REPORT
The Directors present the Strategic Report of the Company for
the period ended 31 March 2022.
Review of business and future developments
The Company was incorporated and registered in England and Wales
on 24 March 2021 as RC365 Holding Limited and re-registered as
RC365 Holding Plc on 22 September 2021 and was admitted to the
Standard Listing segment of the Official List of the UK Listing
Authority and to trading on the London Stock Exchange, having
raised about GBP2.1 million (before expenses) from the issue of
32,534,590 ordinary shares at a placing price of 6.67p.
The Company was formed to undertake an acquisition of a
controlling interest in a company or business. Given their
experience, the Board focused on the provision of IT support and
Security Services and Payment Gateway solutions (online and offline
basis) to China and Hong Kong customers and looking to expand the
payment gateway services into Europe and the UK.
Key Performance Indicators
During the reporting period, the Company was focused on the
evaluation of various opportunities in the Fintech and Payment
Gateway sector. The Directors track the following as the Company's
KPIs:
2022 2021
HK$ HK$
Revenue 8,069,000 7,363,061
Cash and cash equivalents 23,416,761 4,305,203
-- Revenue
Reflects the element of billings generated and recognised during
the period from all revenue streams and measures the Group's
overall performance at a sales level.
-- Cash and cash equivalents
The Company's cash balance provides a measure of the Group's
financial strength and self-sufficiency to support operations while
revenue streams continue to be developed.
Principal risks and uncertainties
The principal risks and uncertainties currently faced by the
Company are set out further in the Risk Management Report on page
14.
Corporate Social Responsibility
The Group aims to conduct its business with honesty, integrity
and openness, respecting human rights and the interests of
shareholders and employees. The Group aims to provide timely,
regular and reliable information on the business to all its
shareholders and conduct its operations to the highest
standards.
The Group strives to create a safe and healthy working
environment for the wellbeing of its staff and to create a trusting
and respectful environment, where all members of staff are
encouraged to feel responsible for the reputation and performance
of the Group.
The Group aims to establish a diverse and dynamic workforce with
team players who have the experience and knowledge of the business
operations and markets in which we operate. Through maintaining
good communications, members of staff are encouraged to realize the
objectives of the Group and their own potential.
Corporate environmental responsibility
The Board contains personnel with a good history of running
businesses that have been compliant with all relevant laws and
regulations.
Section 172(1)
The Directors believe they have acted in the way most likely to
promote the success of the Company for the benefit of its members
as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
1. Consider the likely consequences of any decision in the long term;
2. Act fairly between the members of the Group;
3. Maintain a reputation for high standards of business conduct;
4. Consider the interest of the Group's employees;
5. Foster the Group's relationships with suppliers, customers and others; and
6. Consider the Impact of the Group's operations and the community and the environment.
The Directors remain committed to engaging with the Group's
stakeholders and considering their interests when making key
strategic decisions. The Board considers its key stakeholders to be
its shareholders, its employees, its clients, its suppliers and the
communities in which the Group operates.
In the following section we identify our key stakeholders, how
we engage with them and key activities we have undertaken during
the period in question.
Our Strategic Partners
The Company works closely with its major service provider, a
technology limited located in Hong Kong, who is an important
strategic partner with the Group. We kept working with this service
provider despite during the COVID-19 pandemic, and have developed
an open and transparent relationship with this partner, which
promotes the long-term success for the Group.
We also continue to build our reputations and strengthen our
relationships with our clients based in Hong Kong and China by
providing outstanding services. Furthermore, we are expanding to
clients located in Singapore and the UK having seen the recovery of
economy from COVID-19 of these countries in the second half of year
2022.
Our Shareholders
The Company has been well-supported by its shareholders, who
have subscribed for our shares in the IPO. The Company endeavours
to keep shareholders updated on regulatory matters, and is
committed to provide transparent information to them, both through
the annual report and ad-hoc communications.
Our Customers
The Company strives to maintain strong relationships with its
customers, which will promote long term growth. The relationships
with customers who advertise with the Company are maintained
through regular contact and relationship management.
Our Employees
The Company believes that good staff morale engenders increased
efficiency and loyalty, and hence promotes staff welfare and
well-being. Staff needs are constantly monitored and improved on an
ongoing basis.
Kwai Wah Sunny NG
Non Executive Chairman
30 September 2022
Chi Kit Law, Executive Chairman and CEO (appointed 24 Mar
2021)
Mr. Law (Chinese name: ), age 41, has almost 20 years' of
payment solution and banking leadership experience, having
previously held roles as Head of Banking Systems at MoneySwap plc
and Assistant Vice President of Group Technology and Operations at
DBS Bank where he was awarded the Chairman's Reward for each year
he was there. Mr. Law was also awarded the JP Morgan Services Star
Award. Mr. Law has managed multi-national banking projects when he
was at Standard Chartered Bank, HSBC, JP Morgan Chase and DBS Bank.
Mr. Law holds a Masters in Advanced Management from the University
of Liege and a Bachelor of Information Technology (Honours) from
West Coast Institute of Management & Technology, Perth, Western
Australia.
Timothy Wai Yiu Tang, Executive Director and CFO and Company
Secretary (appointed on 30 August 2022)
Mr. Tang (Chinese name: ), aged 53, has held the role of Vice
President, Finance of Regal Crown Hong Kong since October 2020 and
was promoted on 30 August 2022. Mr. Tang has about 20 years of
audit and accountancy experience, having previously been a Partner
at William Lee, Paul Tang & Co. and a former senior Auditor at
Ernst and Young. Mr. Tang holds a Bachelor of Commerce in
Accounting from the University of New South Wales. Mr. Tang is an
associate member of CPA Australia and a member of the Hong Kong
Institute of Certified Public Accountants.
Hon Keung Cheung, Executive Director and CFO (appointed on 14
September 2021 and resigned on 30 August 2022)
Mr. Cheung (Chinese name: ), age 46, has 20 over years' of
operational and financial leadership experience in banking and
payment solutions, having previously been Chief Consultant of Mondo
Consulting Company providing cross-border taxation and business
advisory services to SME clients located in Hong Kong, China and
Korea, from 2016 to 2018, and various accounting and audit roles,
from 1997 to 2016. Mr. Cheung holds a Masters in Business
Administration from Deakin University, Australia and a Bachelor of
Accountancy (Honours) from City University of Hong Kong. Mr. CHEUNG
is a member of The Association of Chartered Certified Accountants
and the Hong Kong Institute of Taxation.
Kwai Wah Sunny Ng, Non Executive Director (appointed on 9 March
2022)
Mr. Kwai Wah Sunny Ng (Chinese name: ), age 42, has over 20
years' experience in corporate restructuring, mergers and
acquisitions, project financing, lending and investment management.
He is the founder and managing director of Davidsons Group, a
business and private equity consultancy service organization based
in Hong Kong. He is an Executive Director of Times Universal Group
Holdings Limited, a company listed in the Hong Kong stock exchange.
Mr. Ng graduated with a Bachelor of Commerce degree in actual
studies and accounting from the University of New South Wales. He
is a member of both the Certified Practising Accountants in
Australia and the Hong Kong Institute of Certified Public
Accountants.
Robert Cairns, Non Executive Director (appointed on 9 March
2022)
Mr. Robert Cairns, age 50, has over 25 years' experience in
accounting and finance control and served in senior positions at
various private companies in the United Kingdom throughout his
career. Robert is currently the Finance Director and a member of
the Board of Directors & Executive Committee of Les
Ambassadeurs Club. Robert graduated from Lancaster University with
a Bachelor of Science Honours degree in Geography and is a member
of the Chartered Association of Management Accountants in the
United Kingdom.
Ajay Rajpal, Non Executive Director (appointed on 9 Mar
2022)
Mr. Ajay Rajpal, age 52 is a Chartered Accountant and member of
the Institute of Chartered Accountants in England & Wales
(ICAEW). During his career, he has gained broad-ranging commercial
experience developed in the US, Europe, Middle East and Far East,
with a particular focus on M&A, financial management and
insolvency/restructuring. Post qualification, Mr. Rajpal held a
number of finance-related roles which involved working for periods
in the US, Europe, Middle East and Far East. Since 2011, Mr. Rajpal
has run his own consultancy business, NAS Corporate Services Ltd,
providing companies with various corporate services, such as
assistance with their pre-IPO funding, the IPO process and post IPO
management. Mr. Rajpal assisted Grand Vision Media Holdings Plc, a
special purpose acquisition company listed on the standard segment
of the London Stock Exchange, which successfully completed a
reverse takeover of an outdoor media business in Hong Kong/China.
Mr. Rajpal is currently non-executive director of Grand Vision
(which continues to be listed on the standard segment). Mr. Rajpal
has also project managed the initial public offering process and
assisted with the associated funding of two businesses on AIM,
namely New Trend Lifestyle Group Plc, which provides Feng Shui
products and services across Asia, and Zibao Metals Recycling Group
Plc, a Hong Kong and China based metals recycling company. He
currently acts as a non-executive director for Phimedix Plc
(formerly named Zibao Metals Recycling Group Plc), and Dozens
Savings Plc.
DIRECTORS' REPORT
The Directors present their annual report together with the
financial statements and the Auditor's Report for the period ended
31 March 2022.
Principal activities
The principal activity of the Company is to act as a holding
company for a group of subsidiaries that are involved in the IT
software development sector.
The Group is a fintech solutions service provider in Hong Kong
and China provided payment gateway services, IT support and
security services. The Group are looking to expand the payment
gateway services into the UK and Singapore.
Results and dividends
The results of the Group for the period ended 31 March 2022 are
set out in the financial statements.
The Directors do not propose to recommend a dividend for the
period ended 31 March 2022. Given the losses incurred to date, it
is unlikely that the Board will recommend a dividend in the
near-term.
Business review and future developments
Details of the business activities and developments made during
the period can be found in the Strategic Report.
Directors
The Directors of the Company who have served during the period
and at the date of this report are:
Director Role Date of appointment
Chi Kit LAW Executive Director and CEO 24/03/2021
Hon Keung CHEUNG* Executive Director and CFO 22/09/2021
Timothy Wai Yiu TANG Executive Director and CFO 30/08/2022
Kwai Wah Sunny NG Chairman and Non Executive Director 09/03/2022
Robert CAIRNS Non Executive Director 09/03/2022
Ajay RAJPAL Non Executive Director 09/03/2022
*Resigned 30 August 2022
Directors' interest in shares
The direct and beneficial shareholdings of the Board in the
Company as at 31 March 2022 were as follows:
Number of Ordinary Shares Percentage of Issued Share Capital
Direct Beneficial Total
Chi Kit LAW * - 75,000,000 75,000,000 69.75%
Chi Kit Law holds his shares through LYS Limited.
Substantial shareholders
As at the date of the Report, the total number of issued
Ordinary Shares with voting rights in the Group was 107,534,590.
The Group has been notified of the following interests of 3 per
cent or more in its issues share capital as at the date of this
report:
Number of ordinary shares Percent of Issued share capital
LYS Limited 75,000,000
69.75%
MacKay Preston Glen Kimpton 4,839,057 4.5%
Tunkamack Limited 4,839,057
4.5%
Central Worldwide (Hong Kong) Limited 4,839,057 4.5%
S.E.M. Distribution Limited 3,763,711
3.5%
Going Concern
The Group's assets are comprised almost entirely of cash. The
Directors have outlined their strategy for the Group in the
Chairman's Statement on page 4. As part of their assessment of
going concern, the Directors have prepared cash forecasts that show
that the Group has sufficient cash resources in order to complete
the acquisition executed after the period end and execute the
Group's strategy. It is proved that the Group has ability to raise
debt finance and equity finance for its operation and expansion.
The Group has not been significantly affected by the Covid-19
outbreak, nevertheless the business of the Group is still facing
uncertainty subject to Covid-19.
Based on their enquiries and the information available to them
and taking into account the other risks and uncertainties set out
herein, the Directors have a reasonable expectation that the
Company and the Group has adequate resources to continue operating
for the foreseeable future. Thus, they continue to adopt the going
concern basis of accounting in preparing this financial
information.
Events after the reporting period
In June 2022, we announced the acquisition of subsidiaries RCPAY
Limited (a private limited company incorporated in UK and subject
to FCA final approval), RCPAY Limited (a private limited company
incorporated in Hong Kong) and Regal Crown Technology (Singapore)
Pte Limited (a private limited company incorporated in Singapore).
These acquisitions will provide growth opportunities for RC365 by
enabling expansion into the UK, Hong Kong and Singapore and other
ASEAN countries and providing cross border payment solutions around
the world. The UK and Hong Kong companies will also provide money
remittance and exchange services and have obtained the relevant
licenses from the regulatory authorities in UK and Hong Kong.
On 30 August 2022, the Company announced the appointment of Mr.
Tang as Chief Financial Officer and Company Secretary, replacing
Mr. Cheung who has resigned due to personal health concerns.
Corporate Governance
The Group has set out is full Corporate Governance Statement on
page 17. The Corporate Governance Statement forms part of this
Directors' report and is incorporated into it by cross
reference.
Statement of directors' responsibilities
The directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare Group and parent
company financial statements for each financial year. Under that
law the directors have elected to prepare the financial statements
in accordance with UK adopted International Accounting Standards.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and company and of the
group's profit or loss for that period. In preparing these
financial statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance UK
adopted International Accounting Standards
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's
transactions and disclose with reasonable accuracy at any time the
financial position of the group and company. They are also
responsible for safeguarding the assets of the group and company
and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website.
Emissions
The Group is not an intensive user of fossil fuels or
electricity. As a result, it is not practical to determine carbon
emission with any degree of accuracy.
Supplier payment policy
It is the Group's payment policy to pay suppliers in line with
industry norms. These payables are paid on a timely basis within
contractual terms which is generally 30 to 60 days from date of
receipt of invoice.
Branches outside the UK
The Group's head office is in Hong Kong and the subsidiaries are
located in Hong Kong and Singapore.
The Directors' have chosen to produce a Strategic Report that
discloses a fair review of the Group's business, the key
performances metrics that the Directors review along with a review
of the key risks to the business.
Financial instruments and risk management
The Company is exposed to a variety of financial risks and the
impact on the Company's financial instruments are summarized in the
Risk Management Report. Details of the Company's financial
instruments are disclosed in note 21 to the financial
statements.
Disclosures of Information to Auditors
The Directors confirm that
-- So far as each Director is aware, there is no relevant audit
information of which the Group's auditor is unaware; and
-- The Directors have taken all steps that they ought to have
taken as Directors in order to make themselves aware of any
relevant audit information and to establish that the auditors are
aware of this information.
Independent auditors
A resolution proposing the re-appointment of Jeffreys Henry LLP
as auditor will be put to the shareholders at the Annual General
Meeting.
The Directors' Report has been approved by the Board and signed
on its behalf by:
Kwai Wah Sunny NG
Non Executive Chairman
30 September 2022
RISK MANAGEMENT REPORT
The Group has undertaken an evaluation of the risks it is
exposed to which are summarised as follows:
If the Group cannot keep pace with rapid developments and change
in its industry and provide new services to its clients, the use of
its services could decline, reducing its revenue and
profitability.
The Group faces competitive pressure from new or existing
competitors which may have more significant financial resources,
consumer awareness and scale and may introduce new products and
services.
The Group's ability to remain competitive depends in part on its
ability to offer competitive pricing
Certain of the Group's competitors may have greater financial,
technological and marketing resources than it does or, in the case
of certain markets (in particular any potential new markets),
greater local knowledge and presence, greater customer bases,
volume, scale and market share.
Negative publicity could impact negatively on the Group's
business and reputation
The diminution in the perceived quality associated with the
Group's products or services as a result of reputational damage or
otherwise could harm the Group's business, which can adversely
affect its ability to attract and retain customers. The Group's
reputation could be damaged by any number of issues, including
operational or user experience failures, data breaches, or negative
press or social media reports.
The Group may fail to successfully execute its strategy,
including expanding its share of its existing markets, developing
new capabilities and expanding into new geographies
The Group's future growth and profitability depend upon the
growth of the markets in which it currently operates, the future
expansion of those markets, its ability to develop new products and
services (such as CatchAR) that are commercially successful and its
ability to increase its penetration and service offerings within
these markets, as well as its ability to penetrate new markets,
particularly in Europe.
Dependence on key personnel
The Group is managed by a number of key personnel, including the
Key Executive Directors, some of whom have significant experience
within the payments sector and who may be difficult to replace. The
loss of the Key Executive Directors and/or key senior personnel
could have a material adverse effect on the Group.
Demand for the Group's products and services may be affected by
global and regional changes, including economic, social and
political changes
The Group may be affected by a number of macroeconomic factors,
events and conditions, including political and social conditions
(such as any policy which might affect the ability of Regal Crown
HK to do business with Chinese customers), payment habits and
trends including the number of transactions involving the Hong Kong
dollar, economic growth rates, and government outlook, spending and
regulation, such as protectionist policies and legislation.
Inability to manage growth
The Group intends to grow the business. The Group's future
growth may place increasing and significant demands on its
management, operational and financial systems, infrastructure and
other resources and will therefore depend on its ability to expand
and improve operational, financial and management information and
control systems in line with its growth. Failure to do so could
have an adverse effect on the Group's business and its operating
results. Further, any acquisitions will carry an element of risk,
including the difficulty of integrating the operations and
personnel of the acquired business and the inability to obtain the
anticipated return from such investment.
A decline in the use of credit and debit cards as a payments
mechanism or adverse developments with respect to the digital
payments industry in general could have a material adverse effect
on the Group's business, financial condition and results of
operations
If customers do not continue to use credit or debit cards as a
payments mechanism for their transactions or if there is a change
in the mix of payments between cash, alternative currencies, credit
and debit cards or new payments systems which is adverse to the
Group, it could have a materially adverse effect on its business,
financial condition and results of operations. A potential
tightening of credit underwriting criteria by financial
institutions may make it more difficult or expensive for customers
to gain access to credit facilities such as credit cards. Moreover,
if there is an adverse development in the digital payments industry
in general, such as new legislation or regulation that makes it
more difficult for the Group's clients to do business or which
results in financial institutions seeking to charge their customers
additional fees for card usage, cardholders may reduce their
reliance on cards, which could have a material adverse effect on
the Group's business, financial condition and results of
operations.
The Group is at risk of fraud
Combating fraud is a challenge because transactions are
conducted between parties who are not physically present, which in
turn creates opportunities for misrepresentation and abuse. Online
businesses are especially vulnerable because of the convenience,
immediacy and anonymity of transferring funds from one account to
another and subsequently withdrawing them.
The Group do not currently involve the supply of any regulated
services which would require a licence or authorisation (such as
the processing of transactions) or the direct handling of client
money and as such it would not normally expect to be primarily
responsible should any fraudulent activity impact a particular
transaction. However, it cannot however be excluded that the Group
could be party in any litigation or investigation in the future in
relation to fraudulent transactions, even where the Group is not
directly involved. Examples of fraud could include organised
criminal activity or when a person knowingly uses a stolen or
counterfeit credit or debit card, card number, or other credentials
to record a false sale or credit transaction, or intentionally
fails to deliver the merchandise or services sold in an otherwise
valid transaction. Criminals are using increasingly sophisticated
methods to engage in illegal activities such as counterfeiting
credit and debit cards and fraud. There is also a risk the Group's
employees could engage in or facilitate fraudulent activity on
their own behalf or on behalf of others. Moreover, is possible that
incidents of fraud could increase in the future.
The Group nonetheless takes measures to detect and reduce the
risk of fraud, by carrying out checks on the Dow Jones database
before the transaction can proceed. Separate checks are also
carried out by other parties involved in the value chain. These
measures may however not be effective against new and continually
evolving forms of fraud or in connection with new product
offerings. If these measures do not succeed, the Group's business,
financial condition, results of operations and prospects may be
materially and adversely affected.
COVID-19
The Group is committed to ensuring the safety and wellbeing of
all employees, contractors and stakeholders and accordingly will
regularly assess developments and the ability to recommence
operations in a safe and appropriate manner.
Further escalation of the COVID-19 pandemic, and the
implementation of any additional government-regulated restrictions
which delays the Group in carrying out its business activities
ultimately delays the Group's ability to reach production and start
to generate cash and so could have a material adverse impact on
the
Group's operations and financial results. --
This Risk Management Report has been approved by the Board and
signed on its behalf by
Kwai Wah Sunny NG
Non Executive Chairman
30 September 2022
CORPORATE GOVERNANCE STATEMENT
The Board of the Company is committed to high standards of
corporate governance, which it considers are critical to business
integrity and to maintaining investors' trust in the Company. For
the year ended 31 March 2022, and up to the date of this report,
the Company has applied the main principles of the Quoted Companies
Alliance (QCA) Code and complied with its detailed provisions
throughout the period under review.
Full details of our approach to governance are set out below
and, as a Board, we continue to be committed to good standards in
governance practices and will continue to review the governance
structures in place, to ensure that the current practices are
appropriate for our current shareholder base and that, where
necessary, changes are made.
Composition and independence of the board
The Board is comprised of two Executive Directors and three
Independent Non-Executive Directors, including the Independent
Non-Executive Chairman. Each of the non-executive Directors is
"independent" for the purposes of the QCA Governance Code. The
Board is of the opinion that its composition continues to represent
an appropriate balance between executive and non-executive
directors, given the Group's size and operations.
Kwai Wah Sunny Ng has extensive experience in corporate
restructuring, merges and acquisitions, project financing, loan and
investment management and as an executive and non-executive in
other organisations. He is considered independent as he is not
involved in the day-to-day running of the business and does not
earn any performance-related remuneration.
Robert Cairns and Ajay Rajpal both have diverse experience
holding senior positions in private and listed companies in the
United Kingdom. They are both considered independent as they are
not involved in the day-to-day running of the business and do not
earn any performance-related remuneration.
The Company has a Board it believes is well suited for the
purposes of implementing its business strategy. Members have
relevant consulting and industry experience. We intend to carry out
periodic reviews of the composition of the Board to ensure that its
skillset and experience are appropriate for the effective
leadership and long-term success of the business as it
develops.
Division of responsibilities
The Directors are responsible for carrying out the Group's
objectives, implementing its business strategy and conducting its
overall supervision.
The Board meet regularly to review performance. The roles of
Chairman and Chief Executive Officer are separate and clearly
defined, in line with the recommendations of the QCA Corporate
Governance Code. Responsibility for overseeing the Board is the
responsibility of the Chairman and the Chief Executive Officer is
responsible for overseeing the implementation of the Company's
strategy and its operational performance.
The Executive Directors are encouraged to use their independent
judgement and strong knowledge of the Group in the discharging of
their duties. They are responsible for the day-to-day management of
the business, including its financial and operational performance
and the Group's legal undertakings. Issues and progress made are
reported to the Board by the Chief Executive Officer.
The Board considers the non-Executive Directors to be
sufficiently competent and to function effectively as a unit and in
their respective Committees. They provide objectivity and
substantial input to the activities of the Board, from their
various areas of expertise.
The Board meets regularly throughout the year (either in person
or by video conference call). Additionally, special meetings will
take place or other arrangements will be made when Board decisions
are required in advance of regular meetings. During the period
ended 31 March 2022, one board meeting was held. All Directors were
in attendance at the meeting, either in person or by video
conference call.
Meeting shareholders' needs and expectations
The Board seek to build on a mutual understanding of objectives
between the Company and its shareholders by offering meetings to
discuss long-term issues and receive feedback and issuing updates
to the market as appropriate. The Board also seeks to use the
Annual General Meeting to communicate with its shareholders and
encourage questions from shareholders at the Annual General
Meetings (AGMs).
Risk management and internal control
Mitigating the risks that a Company faces as it seeks to create
long-term value for its shareholders is the positive by-product of
applying good corporate governance. At RC365, all employees are
responsible for identifying and monitoring risks across their
areas. However, the Board sets the overall risk strategy for the
business and is ultimately accountable.
Performance evaluation
The Chairman considers the operation of the Board and
performance of the Directors on an ongoing basis as part of his
duties and will bring any areas of improvement he considers are
needed to the attention of the Board. The effectiveness of the
Board, its Committees and Directors will be reviewed on an annual
basis.
Kwai Wah Sunny NG
Non Executive Chairman
30 September 2022
AUDIT COMMITTEE REPORT
As Chair of the Audit and Risk Committee ("the Committee"), I am
pleased to present our Audit Committee Report for the year ended 31
March 2022.
The Board has established an audit committee and a remuneration
committee and delegated various responsibilities to these
committees, to assist the Board in discharging its duties and
overseeing its duties and aspects of the Company and its
subsidiaries' activities.
The Audit Committee comprises two Non-Executive Directors:
Robert Cairns (Chair) and Ajay Rajpal. The Audit Committee
receives, and reviews reports from the Group's management and
external auditors relating to the interim and annual accounts and
the accounting and internal control systems in use throughout the
Group.
The key responsibilities of the Committee are to:
-- Review the significant issues and judgements of management,
and the methodology and assumptions used in relation to the Group's
financial statements and formal announcements on the Group's
financial performance;
-- Review the Group's going concern assumptions;
-- Assess the effectiveness of the Group's system of internal
controls, including financial reporting and financial controls;
-- Consider and make recommendations to the Board on the
appointment, reappointment, dismissal or resignation and
remuneration of the external auditor; and
-- Assess the independence and objectivity of the external
auditor and approve and monitor the application of the external
auditor business standard.
External auditor
The Company's external auditor is Jeffreys Henry Audit Limited,
who were appointed with effect from the year ended 31 March 2022.
Having reviewed the auditor's independence and performance to date,
the Committee recommended to the Board to put them forward at the
AGM to stand as auditors for the next financial period.
Internal audit
The Board considers the internal control system to be adequate
for the Company. The Audit Committee reviews the scope and scale of
the non-audit services undertaken by the auditors in order to
ensure that their independence and objectivity is safeguarded. The
Directors recognise the business will increase in complexity as it
grows, and they will review the internal control system to ensure
it responds to any change.
Risk management and internal controls
The principal risks facing the Group are summarised on page 14
of this Report. The internal controls of the Group are set out in
the Financial Reporting Procedures Manual which was reviewed and
reported on by the Reporting Accountants in connection with the
IPO. The Committee carries out an annual risk assessment and review
of mitigating controls.
This report was approved by the board on 30 September 2022
Kwai Wah Sunny NG
Non Executive Chairman
REMUNERATION COMMITTEE REPORT
The items included in this report are unaudited unless otherwise
stated.
The remuneration committee consists of Kwai Wah Sunny Ng (Chair)
and Ajay Rajpal. This committee's primary function is to review the
performance of executive directors and senior employees and set
their remuneration and other terms of employment.
The Company has 2 executive director and 3 non executive
director.
The remuneration policy
It is the aim of the committee to remunerate executive directors
competitively and to reward performance. The remuneration committee
determines the Group's policy for the remuneration of executive
directors, having regard to the QCA Corporate Governance Code and
its provisions on directors' remuneration.
Although there is no formal Director or senior employee
shareholding policy in place, the Board believe that share
ownership by Directors and senior employees strengthen the link
between the personal interest and those of shareholders.
No views were expressed by shareholders during the period on the
remuneration policy of the Group.
Service agreements and terms of appointment
The non executive directors have service contracts with the
Group.
Directors' interests
The directors' interests in the share capital of the Company are
set out in the Directors' report.
Directors' emoluments (audited)
Group RC365 Holding Plc
2022 2021 2022 2021
HK$ HK$ HK$ HK$
Chi Kit Law 951,633 2,596,502 -
-
Hon Keung Cheung 375,500 285,000 - -
Timothy Wai Yiu Tang 240,000 144,000 - -
Kwai Wah Sunny Ng - - -
-
Robert Cairns - - -
-
Ajay Rajpal 15,914 - 15,914
-
Total 1,583,047 3,025,502 15,914
-
The highest paid Director of the Company in the period was Mr.
Chi Kit Law, who was paid a total of HKD951,633 (HKD2,596,503 for
2021).
Considerations of shareholder views
The Committee considers shareholder feedback received. This
feedback, plus any additional feedback received from the time to
time, as part of the Group's annual policy for remuneration.
Policy for salary reviews
The Committee may from time to time seek to review salary levels
of Directors, taking into account performance, time spent in the
role and market data for the relevant role. It is intended that
there will be a salary review during the next fiscal year.
Policy for new appointment
It is not intended that there will be any new appointments to
the Board in the near term. It is intended that a full review of
the Board will take place on an annual basis.
Other Matters
The Group does not currently have any annual or long term
incentive schemes in place for any of the Directors and senior
employees.
Approval by shareholders
At the next annual general meeting of the Group a resolution
approving this report is to be proposed as an ordinary
resolution.
This report was approved by the board on 30 September 2022
Kwai Wah Sunny NG
Non Executive Chairman
Independent auditor's report to the members of RC365 Holdings
Plc for the year ended 31 March 2022
Opinion
We have audited the financial statements of RC365 Holdings Plc
(the 'group') for the year ended 31 March 2022 which comprise the
consolidated statement of income and other comprehensive income,
the consolidated and company statement of financial position, the
consolidated and company statements of changes in equity, the
consolidated and company statements of cash flows and notes to the
financial statements including a summary of significant accounting
policies and the financial reporting framework that has been
applied in the preparation of the group financial statements and
applicable law.
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the parent company's affairs as at 31
March 2022 and of the Group's loss for the year then ended;
-- the group financial statements have been properly prepared in
accordance with UK adopted International Accounting Standards;
-- the parent company financial statements have been properly
prepared in accordance with UK adopted International Accounting
Standards and as applied in accordance with the provisions of the
Companies Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2.3 in the financial statements, which
explains that the Group has incurred significant operating losses
and negative cash flows from operations, which may affect the
future prospects and trading activities of the group.
The Group forecasts include additional funding requirements upon
which the Group is dependant. The directors are satisfied that
these funding requirements will be met. The cause of this is
largely to do with the growth in revenues and ongoing impact of
Covid-19 within the main operational regions. These events or
conditions, along with other matters as set out in note 2.3
indicate that a material uncertainty exists that may cast
significant doubt on the Group's ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
Management performed an assessment in relation to group's
ability to continue as a going concern and the overall assessment
includes key assumptions considered by management that required
significant judgement in relation to the estimation of future
revenue generated by franchisees.
We assessed the significant judgements made by the management
and performed the reverse stress test to ensure that these are
adequately considered and in line with current events and trading
performance.
We performed the following audit procedures to assess the
management's judgements, key assumptions and entity's ability to
continue as a going concern:
-- Obtaining and understanding of how management prepare their
base case and sensitised forecasts for the period to 30(th)
September 2023;
-- Assessing the accuracy of management's forecasting by
comparing the reliability of past forecasts to management's actual
results, and considering whether management's historic forecasting
accuracy impacts upon the reliance we can place upon the forecasts
provided;
-- Obtaining and understanding of the key trading, balance sheet
and cash flow assumptions and testing those key assumptions to
underlying historical financial data, post period end trading
information and market analysis data;
-- Assessing the terms of the covenants attached to external
debt held challenging management's assessment of a breach of
covenants during the going concern period;
-- Assessing the plausibility of the mitigating actions
available to management to continue as a going concern if downside
sensitivities were to crystalise;
-- Considered forecasts prepare in respect of the most likely
impact of Covid-19 and whether these will give rise to a material
uncertainty;
-- Evaluating and performing reverse stress test of the most
likely outcome and worse-case forecasts;
-- Performing arithmetical and consistency checks on
management's going concern base case model; and
-- Assessing the adequacy of related disclosures within the annual report
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. This is not a
complete list of all risks identified by our audit.
-- Carrying value of investments in subsidiaries and recoverability of intercompany loans
These are explained in more detail below.
Key audit matter How our audit addressed the
key audit matter
Carrying value of investments
in subsidiaries and recoverability
of intercompany loans - parent
company financial statements
only. We have reviewed the consolidated
financials of the subsidiary
The Company had investments and having reviewed the performance
of HKD 8,096,239 at the year to date the subsidiary is profit
ended 31 March 2022. making and is continuing to
The Directors have confirmed grow;
all investments, including additions
were correctly calculated and We reviewed the latest management
being held at cost. accounts post year end for the
The amounts due from subsidiaries subsidiary;
amounts to
HKD 13,675,597. We have reviewed the long term
cashflow forecasts prepared
We identified a risk that the and understood and assessed
investment held within the parent the methodology used by the
company financial statements directors in this analysis and
in its subsidiaries and amounts determined it to be reasonable;
receivable, may be impaired.
We tested the assumptions made
Management's assessment of the by management through performing
recoverable amount of investments sensitivity analysis through
in subsidiaries requires estimation changing the assumptions used
and judgement around assumptions and re- running the cash flow
used, including the cash flows forecast.
to be generated from continuing
operations. Changes to assumptions
could lead to material changes
in the estimated recoverable
amount, impacting the value
of investment in the subsidiary
and impairment charges.
--------------------------------------
Our application of materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole as follows:
Group financial statements Company financial
statement
Overall materiality HKD 203,000 HKD 202,000
------------------------------ ------------------------------
How we determined 5% of net losses 2.5% of gross assets
it
------------------------------ ------------------------------
Rationale for We believe that net We believe that gross
benchmark applied losses is a primary assets is a primary
measure used by shareholders measure used by shareholders
in assessing the performance in assessing the performance
of the Group. of the Group.
------------------------------ ------------------------------
For each component in the scope of our Group audit, we allocated
a materiality that is less than our overall Group materiality. The
materiality allocated across components was HKD 202,000.
We agreed with the Audit and Risk Committee that we would report
to them misstatements identified during our audit above HKD 17,100
(Group audit) as well as misstatements below those amounts that, in
our view, warranted reporting for qualitative reasons.
Our approach to the audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made
subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all
of our audits we also addressed the risk of management override of
internal controls, including evaluating whether there was evidence
of bias by the Directors that represented a risk of material
misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in
which they operate.
The Group financial statements are a consolidation of 2
reporting units, comprising the Group's operating business and
holding company.
We performed audits of the complete financial information of
RC365 Holdings Plc (the parent). The subsidiary, Regal Crown
Technology Limited, was also individually financially significant
and was audited by local component auditors. The sum of these
significant entities accounted for 100% of the Group's revenue and
100% of the Group's absolute loss before tax (i.e. the sum of the
numerical values without regard to whether they were profits or
losses for the relevant reporting units). We also performed
specified audit procedures over account balances and transaction
classes that we regarded as material to the Group at all reporting
units.
Other information
The Directors are responsible for the other information. The
other information comprises the information included in the Annual
Report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. 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.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006. In our opinion, based on the work undertaken in
the course of our audit :
-- the information given in the strategic report and the
Directors' report for the financial period for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the Directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements [and the part of the
directors' remuneration report to be audited] are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by
law are not made; or
-- we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the Directors' responsibilities
statement set out on page 12, the Directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the Directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group's and parent Company's ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the
Group or the parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
The extent to which the audit was considered capable of
detecting irregularities including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above and on the Financial Reporting
Council's website, to detect material misstatements in respect of
irregularities, including fraud.
Our approach to identifying and assessing the risks of material
misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations, was as follows:
-- the senior statutory auditor ensured the engagement team
collectively had the appropriate competence, capabilities and
skills to identify or recognise non-compliance with applicable laws
and regulations;
-- we identified the laws and regulations applicable to the
company through discussions with directors and other management,
and from our commercial knowledge and experience of the Fintech
solutions and IT services sector.
-- we focused on specific laws and regulations which we
considered may have a direct material effect on the financial
statements or the operations of the company, including Companies
Act 2006, taxation legislation, data protection, anti-bribery,
employment, environmental, health and safety legislation and
anti-money laundering regulations.
-- we assessed the extent of compliance with the laws and
regulations identified above through making enquiries of management
and inspecting legal correspondence; and
-- identified laws and regulations were communicated within the
audit team regularly and the team remained alert to instances of
non-compliance throughout the audit.
-- We assessed the susceptibility of the company's financial
statements to material misstatement, including obtaining an
understanding of how fraud might occur, by:
-- making enquiries of management as to where they considered
there was susceptibility to fraud, their knowledge of actual,
suspected and alleged fraud;
-- considering the internal controls in place to mitigate risks
of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and
override of controls, we:
-- performed analytical procedures to identify any unusual or unexpected relationships;
-- tested journal entries to identify unusual transactions;
-- assessed whether judgements and assumptions made in
determining the accounting estimates set out in Note 3 of the Group
financial statements were indicative of potential bias;
-- investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance
with laws and regulations, we designed procedures which included,
but were not limited to:
-- agreeing financial statement disclosures to underlying supporting documentation;
-- reading the minutes of meetings of those charged with governance;
-- enquiring of management as to actual and potential litigation and claims;
-- reviewing correspondence with HMRC and the company's legal advisor.
There are inherent limitations in our audit procedures described
above. The more removed that laws and regulations are from
financial transactions, the less likely it is that we would become
aware of non-compliance. Auditing standards also limit the audit
procedures required to identify non-compliance with laws and
regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to
detect than those that arise from error as they may involve
deliberate concealment or collusion.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor's report.
Other matters which we are required to address
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our
audit. Our audit opinion is consistent with the additional report
to the audit committee.
Use of this report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Sanjay Parmar (Senior Statutory Auditor)
For and on behalf of Jeffreys Henry LLP (Statutory Auditors)
Finsgate
5-7 Cranwood Street
London EC1V 9EE
30 September 2022
Consolidated statement of comprehensive income for the year
ended 31 March 2022
Notes 31 March 2022 31 March 2021
HK$ HK$
Revenue 4 8,069,000 7,363,061
Other income 5 11,288 376,080
Subcontracting fee paid (2,646,000) (896,000)
Staff costs 8 (2,492,068) (3,315,962)
Depreciation on property, plant
and equipment and right-of-use
assets 7 (781,933) (868,738)
Listing expense (4,826,285)
Loss on disposal of a subsidiary - (39,060)
Other operating expenses (1,101,915) (1,112,250)
Finance charges 6 (129,503) (23,306)
(Loss)/Profit before income tax 7 (3,897,416) 1,483,825
Income tax expense 9 - -
(Loss)/Profit for the year (3,897,416) 1,483,825
(Loss)/Profit per share - basic
and diluted (HK$) 10 (5.15 cents) 582.64 cents
Notes 31 March 2022 31 March 2021
HK$ HK$
(Loss)/Profit for the year (3,897,416) 1,483,825
Other comprehensive (expense)/income,
net of tax
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on translation
of financial statements of foreign
operations (536,236) -
Reclassification of exchange differences
upon disposal of a subsidiary - 24,845
Total comprehensive (loss)/income
for the year (4,433,652) 1,508,670
Consolidated statement of financial position
as at 31 March 2022
Notes 2022 2021
HK$ HK$
ASSETS
Non-current assets
Property, plant and equipment 11 141,720 266,254
Right-of-use assets 12 507,754 1,269,387
649,474 1,535,641
Current assets
Deposit and prepayments 13 152,875 74,290
Trade and other receivables 13 1,044,492 3,039,098
Loan receivables 14 700,000 -
Cash and cash equivalents 15 23,416,761 4,305,203
25,314,128 7,418,591
Current liabilities
Trade and other payables 16 643,138 2,771,345
Borrowings 17 5,800,000 -
Lease liabilities 18 515,158 756,832
6,958,296 3,528,177
Net current assets 18,355,832 3,890,414
Non-current liabilities
Lease liabilities 18 - 515,159
Net assets 19,005,306 4,910,896
EQUITY
Share capital 19 11,500,995 10,300,001
Share premium 16,576,592 -
Group reorganisation reserve 750,476 -
Translation reserve (536,236) -
Profit or loss reserve (9,286,521) (5,389,105)
Total equity 19,005,306 4,910,896
Approved by the Board and authorised for issue on 30 September
2022
Law Chi Kit
Director
Company Registration number: 13289422
Consolidated s tatement of changes in equity
f or the year ended
31 March 2022
Share Translation Group reorganisation Accumulated Total
capital Share reserves reserve losses
premium
HK$ HK$ HK$ HK$ HK$ HK$
At 31 March
2020 and at
1 April 2020 1 - (24,845) - (6,872,930) (6,897,774)
Share allotment 10,300,000 - - - - 10,300,000
Profit for the
year - - - - 1,483,825 1,483,825
Reclassification
of exchange
differences
upon disposal
of a subsidiary - - 24,845 - - 24,845
---------------------- ------------ ------------ ------------ --------------------- ------------ ------------
Total comprehensive
income - - 24,845 - 1,483,825 1,508,670
At 31 March
2021 and at
1 April 2021 10,300,001 - - - (5,389,105) 4,910,896
Loss for the
year - - - - (3,897,416) (3,897,416)
Exchange difference
on consolidation - - (536,236) - - (536,236)
---------------------- ------------ ------------ ------------ --------------------- ------------ ------------
Total comprehensive
income - - (536,236) - (3,897,416) (4,433,652)
---------------------- ------------ ------------ ------------ --------------------- ------------ ------------
Group reorganisation
- Share exchange (2,203,751) - - 750,476 - (1,453,275)
Issue of share
capital 3,404,745 18,645,000 - - - 22,049,745
Share issue
costs - (2,068,408) - - - (2,068,408)
At 31 March
2022 11,500,995 16,576,592 (536,236) 750,476 (9,286,521) 19,005,306
---------------------- ------------ ------------ ------------ --------------------- ------------ ------------
Consolidated statement of cash flows
f or the year ended
31 March 31 March 2021
2022
HK$ HK$
Cash flows from operating activities
(Loss)/Profit before income tax (3,897,416) 1,483,825
Adjustments for:
Depreciation of property, plant
and equipment 761,633 60,236
Depreciation of right-of-use-assets 20,300 808,502
Gain on termination of lease agreement - (8,087)
Interest income - (41)
Written-off of property, plant and
equipment 176,234 -
Listing expense 4,826,285 -
Exchange differences (536,236)
Loss on disposal of a subsidiary - 39,060
Finance charges 129,503 23,306
Operating cashflow before working
capital changes 1,480,303 2,406,801
Decrease/(Increase) in trade and
other receivable 541,332 (2,652,724)
(Increase)/Decrease in trade deposits
and prepayments (78,586) 143,553
(increase) in loan receivables (700,000) -
(Decrease) in trade and other payables (2,128,207) (840,334)
Decrease in contract liabilities - (1,630,000)
Net cash (used in) operating activities (885,158) (2,572,704)
----------------------------------------- ----------- -------------
Cash flow from investing activities
Acquisition of property, plant and
equipment (72,000) (64,000)
Proceeds from sale of a subsidiary,
net of cash disposed of - (543,749)
Interest received - 41
----------------------------------------- ----------- -------------
Net cash (used in) investing activities (72,000) (607,708)
----------------------------------------- ----------- -------------
Cashflow from financing Activities
Interest paid (106,336) -
Inception of bank borrowings 5,800,000 -
Proceeds from listing 22,049,745 -
Payment for listing costs (6,894,693) -
Rental paid for lease liabilities (780,000) (828,000)
----------------------------------------- ----------- -------------
Net cash from (used in) financing
activities 20,068,716 (828,000)
----------------------------------------- ----------- -------------
Net increase/(decrease) in cash
and cash equivalents 19,111,558 (4,008,412)
Effect of exchange rate changes - -
Cash and cash equivalents at beginning
of the year 4,305,203 8,313,615
Cash and cash equivalents at the
end of the year 23,416,761 4,305,203
Notes to the consolidated financial statements
For the year end31 March 2022
1. GENERAL INFORMATION
RC365 Holding Plc (the "Company") was incorporated as a private
limited company on 24 March 2021 in the United Kingdom ("UK") under
the Companies Act 2006. The Company acted as a holding company and
converted to a public limited company on 22 September 2021. The
address of the registered office is Cannon Place, 78 Cannon Street,
London, United Kingdom, EC4N 6AF. The Company was listed on the
Standard List of the London Stock Exchange ("LSE") on 23 March
2022.
The wholly owned subsidiary of the Company, Regal Crown
Technology Limited (together with the Company, the "Group") is a
private limited company incorporated in Hong Kong. The address of
the registered office and principal place of business is 19/F, IFC
Tower 2, 8 Finance Street, Central, Hong Kong.
The principal activity of Regal Crown Technology Limited is
provision of IT software development and office administration.
There were no significant changes in the nature of the Group's
principal activities during the year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
On 31 December 2020, International Financial Reporting Standards
("IFRS") as adopted by the European Union at that date was brought
into UK law and became UK-adopted International Accounting
Standards, with future changes being subject to endorsement by the
UK Endorsement Board. RC365 Holding Plc adopted the UK-adopted
International Accounting Standards in its Group and Parent Company
financial statements on 1 April 2021.
These Group and Parent Company financial statements were
prepared in accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006 as
applicable to companies reporting under those standards.
The financial statements of the Group and Parent Company have
been prepared on accrual basis and under historical cost
convention. The financial statements are presented in Hong Kong
Dollars ("HK$"), which is the Group's functional and presentational
currency, and rounded to the nearest dollar.
2.2 New Standards and Interpretations
No new standards, amendments or interpretations, effective for
the first time for the period beginning on or after 1 April 2021
have had a material impact on the Group and the Parent Company.
Standards, amendments and interpretations that are not yet
effective and have not been early adopted are as follows:
Standard Impact on initial application Effective date
--------- ---------------------------------- -----------------
IAS 1 Classification of liabilities Not earlier than
as current or non-current 1 January 2024
IAS 1 Disclosure of accounting policies 1 January 2023
IAS 8 Accounting estimates 1 January 2023
IAS 12 Deferred tax related to assets 1 January 2023
and liabilities arising from
a single transaction
IFRS Insurance contracts 1 January 2023
17
2.3 Going Concern
The Group meets its day to day working capital requirement
through use of cash reserves and bank borrowings. The Directors
have considered the applicable of the going concern basis in the
preparation of the financial statements. This included review of
forecasts which show that the Group should be able to sustain its
operation within the level of its current debt and equity funding
arrangements. The Directors have reasonable expectation that the
Group has adequate resources to continue operation for the
foreseeable future for the reason they have adopted to going
concern basis in the preparation of financial statement.
The Group incurred a loss of HK$3,897,416 for the year ended 31
March 2022. This condition indicates the existence of a material
uncertainty which may cast significant doubt on the Company's
ability to continue as a going concern. Therefore, the Company may
be unable to realise its assets. The financial statements do not
include any adjustments that would result if the Group was unable
to continue as a going concern. The COVID-19 pandemic has not
constituted significant effect on the Group's results for the year
ended 31 March 2022, however listing expenses of HK$4,826,285
resulted the Group in a loss position during the year.
After careful consideration of the matters set out above, the
Directors are of the opinion that the group will be able to
undertake its planned activities for the period to 30 September
2023 from debt and/or equity fundings and have prepared the
consolidated financial statement on a going concern basis.
2.4 Basis of consolidation
The Company acquired its 100% interest in Regal Crown Technology
Limited ("RCT") on 31 August 2021 by way of a share for share
exchange. This is a business combination involving entities under
common control and the consolidated financial statements are issued
in the name of the Group but they are a continuance of those of
RCT. Therefore the assets and liabilities of RCT have been
recognised and measured in these consolidated financial statements
at their pre combination carrying values. The retained earnings and
other equity balances recognised in these consolidated financial
statements are the retained earnings and other equity balances of
the Company and RCT. The equity structure appearing in these
consolidated financial statements (the number and the type of
equity instruments issued) reflect the equity structure of the
Company including equity instruments issued by the Company to
effect the consolidation. The difference between consideration
given and net assets of RCT at the date of acquisition is included
in a group reorganisation reserve.
The prior year financial information presented in these
consolidated financial statements relates to that of Regal Crown
Technology Limited.
In the consolidated financial statements, the results of
subsidiaries acquired or disposed of during the year are included
in the consolidated statement of profit or loss and other
comprehensive income from the effective date of acquisition and up
to the effective date of disposal, as appropriate.
Intra-group transactions, balances and unrealised gains and
losses on transactions between group companies are eliminated in
preparing the consolidated financial statements. Profits and losses
resulting from the inter-group transactions that are recognised in
assets are also eliminated. Amounts reported in the financial
statements of subsidiaries have been adjusted where necessary to
ensure consistency with the accounting policies adopted by the
Group .
When the Group loses control of a subsidiary, the profit or loss
on disposal is calculated as the difference between (i) the
aggregate of the fair value of the consideration received and the
fair value of any retained interest and (ii) the previous carrying
amount of the assets (including goodwill), and liabilities of the
subsidiary.
2.5 Foreign currency translation
In the individual financial statements of the consolidated
entities, foreign currency transactions are translated into the
functional currency of the individual entity using the exchange
rates prevailing at the dates of the transactions. At the reporting
date, monetary assets and liabilities denominated in foreign
currencies are translated at the foreign exchange rates ruling at
that date. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the reporting date
retranslation of monetary assets and liabilities are recognised in
profit or loss.
Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing on the
date when the fair value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign currency are
not retranslated.
In the consolidated financial statements, all individual
financial statements of foreign operations, originally presented in
a currency different from the Group's presentation currency, have
been converted into Hong Kong dollars. Assets and liabilities have
been translated into Hong Kong dollars at the closing rates at the
reporting date. Income and expenses have been converted into the
Hong Kong dollars at the exchange rates ruling at the transaction
dates, or at the average rates over the reporting period provided
that the exchange rates do not fluctuate significantly. Any
differences arising from this procedure have been recognised in
other comprehensive income and accumulated separately in the
translation reserve in equity.
On the disposal of a foreign operation (i.e., 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, loss of joint control over a joint venture that includes
a foreign operation, or loss of significant influence over an
associate that includes a foreign operation), all of the
accumulated exchange differences in respect of that operation
attributable to the Group are reclassified to profit or loss. Any
exchange differences that have previously been attributed to
non-controlling interests are derecognised, but they are not
reclassified to profit or loss.
Exchange rates used in these accounts:
Average rate during year ended
31 March 2022: GBP/HKD 10.565
Closing rate as at 31 March
2022: GBP/HKD 10.365
2 .6 Property, plant and equipment
Property, plant and equipment (other than cost of right-of-use
assets as described in 2.9) are stated at acquisition cost less
accumulated depreciation and impairment losses. The acquisition
cost of an asset comprises of its purchase price and any direct
attributable costs of bringing the assets to the working condition
and location for its intended use. Depreciation of assets commences
when the assets are ready for intended use.
Depreciation on property, plant and equipment, is provided to
write off the cost over their estimated useful life, using the
straight-line method, at the following rates per annum:
Furniture & Fixtures 20% per annum
Leasehold Improvements 4% per annum
Office Equipment 20% per annum
The assets' depreciation methods and useful lives are reviewed,
and adjusted if appropriate, at each reporting date.
In the case of right-of-use assets, expected useful lives are
determined by reference to comparable owned assets or the lease
term, if shorter. Material residual value estimates and estimates
of useful life are updated as required, but at least annually.
The gain or loss arising on the retirement or disposal is
determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in profit or
loss.
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. The carrying amount of the replaced part is derecognised.
All other costs, such as repairs and maintenance, are charged to
profit or loss during the financial period in which they are
incurred.
2 .7 Financial instruments
IFRS 9 requires an entity to address the classification,
measurement and recognition of financial assets and
liabilities.
i) Classification
The Company classifies its financial assets in the following
measurement categories:
-- those to be measured at amortised cost.
The classification depends on the Company's business model for
managing the financial assets and the contractual terms of the cash
flows.
The Company classifies financial assets as at amortised cost
only if both of the following criteria are met:
-- the asset is held within a business model whose objective is
to collect contractual cash flows; and
-- the contractual terms give rise to cash flows that are solely
payment of principal and interest
ii) Recognition
Purchases and sales of financial assets are recognised on trade
date (that is, the date on which the Company 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 Company has transferred substantially
all the risks and rewards of ownership.
iii) Measurement
At initial recognition, the Company measures a financial asset
at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that
are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
Debt Instruments
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 gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as a
separate line item in the statement of profit or loss.
(iv) Impairment
The Company assesses, on a forward looking basis, the expected
credit losses associated with any debt instruments carried at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk. For
trade receivables, the Company applies the simplified approach
permitted by IFRS 9, which requires lifetime expected credit losses
("ECL") to be recognised from initial recognition of the
receivables.
The Group measures the loss allowance for other receivables
equal to 12-month ECL, unless when there has been a significant
increase in credit risk since initial recognition, the Group
recognises lifetime ECL. The assessment of whether lifetime ECL
should be recognised is based on significant increase in the
likelihood or risk of default occurring since initial
recognition.
Financial liabilities
The Group's financial liabilities include lease liabilities,
trade and other payables.
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or
loss.
Subsequently, financial liabilities are measured at amortised
cost using the effective interest method except for derivatives and
financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognised in
profit or loss (other than derivative financial instruments that
are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an
instrument's fair value that are reported in profit or loss are
included within finance costs or finance income.
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires.
Where an existing financial liability is replaced by another
from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the
original liability and the recognition of a new liability, and the
difference in the respective carrying amount is recognised in
profit or loss.
2.8 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call
deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
2.9 Lease
Definition of a lease and the Group as a lessee
At inception of a contract , the Group considers whether a
contract is, or contains a lease. A lease is defined as "a
contract, or part of a contract, that conveys the right to use an
identified asset (the underlying asset) for a period of time in
exchange for consideration". To apply this definition, the Group
assesses whether the contract meets three key evaluations which are
whether:
- the contracts contains an identified asset, which is either
explicitly identified in the contract or implicitly specified by
being identified at the time the asset is made available to the
Group ;
- the Group has the right to obtain substantially all of the
economic benefits from use of the identified asset throughout the
period of use, considering its rights within the defined scope of
the contract; and
- the Group has the right to direct the use of the identified
asset throughout the period of use. The Group assess whether it has
the right to direct "how and for what purpose" the asset is used
throughout the period of use.
For contracts that contains a lease component and one or more
additional lease or non-lease components, the Group allocates the
consideration in the contract to each lease and non-lease component
on the basis of their relative stand-alone prices.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use
asset and a lease liability on the consolidated statement of
financial position. The right-of-use asset is measured at cost,
which is made up of the initial measurement of the lease liability,
any initial direct costs incurred by the Group, an estimate of any
costs to dismantle and remove the underlying asset at the end of
the lease, and any lease payments made in advance of the lease
commencement date (net of any lease incentives received).
The Group depreciates the right-of-use assets on a straight-line
basis from the lease commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease
term unless the Group is reasonably certain to obtain ownership at
the end of the lease term. The Group also assesses the right-of-use
asset for impairment when such indicator exists.
At the commencement date, the Group measures the lease liability
at the present value of the lease payments unpaid at that date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group 's incremental
borrowing rate.
Lease payments included in the measurement of the lease
liability are made up of fixed payments (including in-substance
fixed payments) less any lease incentives receivable, variable
payments based on an index or rate, and amounts expected to be
payable under a residual value guarantee. The lease payments also
include the exercise price of a purchase option reasonably certain
to be exercised by the Group and payment of penalties for
terminating a lease, if the lease term reflects the Group
exercising the option to terminate.
Subsequent to initial measurement, the liability will be reduced
for lease payments made and increased for interest cost on the
lease liability. It is remeasured to reflect any reassessment or
lease modification, or if there are changes in in-substance fixed
payments. The variable lease payments that do not depend on an
index or a rate are recognised as expense in the period on which
the event or condition that triggers the payment occurs.
When the lease is remeasured, the corresponding adjustment is
reflected in the right-of-use asset, or profit and loss if the
right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases using the
practical expedients. Instead of recognising a right-of-use asset
and lease liability, the payments in relation to these leases are
recognised as an expense in profit or loss on a straight-line basis
over the lease term. Short-term leases are leases with a lease term
of 12 month or less.
On the consolidated statement of financial position,
right-of-use assets and lease liabilities have been presented
separately.
2.10 Equity
-- "Share capital" represents the nominal value of equity
shares.
-- "Share premium" represents the amount paid for equity shares
over the nominal value.
-- "Translation reserve" comprises foreign currency translation
differences arising from the translation of financial statements of
the Group's foreign entities to HK$.
-- "Group reorganisation reserve" arose on 31 August 2021 on the
group reorganisation.
-- "Accumulated losses" include all current period results as
disclosed in the income statements.
No dividends are proposed for the year.
2 .11 Revenue recognition
Revenue arises mainly from contracts for IT software development
and office administration.
To determine whether to recognise revenue, the Group follows a
5-step process:
Step 1: Identifying the contract with a customer
Step 2: Identifying the performance obligations
Step 3: Determining the transaction price
Step 4: Allocating the transaction price to the performance
obligations
Step 5: Recognising revenue when/as performance obligation(s)
are satisfied
In all cases, the total transaction price for a contract is
allocated amongst the various performance obligations based on
their relative stand-alone selling prices. The transaction price
for a contract excludes any amounts collected on behalf of third
parties.
Revenue is recognised either at a point in time or over time,
when (or as) the Group satisfies performance obligations by
transferring the promised goods or services to its customers.
Where the contract contains a financing component which provides
a significant financing benefit to the customer for more than 12
months, revenue is measured at the present value of the amount
receivable, discounted using the discount rate that would be
reflected in a separate financing transaction with the customer,
and interest income is accrued separately under the effective
interest method. Where the contract contains a financing component
which provides a significant financing benefit to the Group,
revenue recognised under that contract includes the interest
expense accreted on the contract liability under the effective
interest method.
Further details of the Group's revenue and other income
recognition policies are as follows:
Services income
Revenue from IT software development and office administration
are recognised over time as the Group's performance creates and
enhances an asset that the customer controls. The progress towards
complete satisfaction of a performance obligation is measured based
on input method, i.e. the costs incurred up to date compared with
the total budgeted costs, which depict the Group's performance
towards satisfying the performance obligation.
When the outcome of the contract cannot be reasonably measured,
revenue is recognised only to the extent of contract costs incurred
that are expected to be recovered.
Interest income
Interest income is recognised on a time-proportion basis using
the effective interest method.
2 .12 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 are deferred and recognised in profit or loss
over the period necessary to match them with the costs that the
grants are intended to compensate . Government grants relating to
income is presented in gross under other income in the consolidated
statement of profit or loss and other comprehensive income.
2.13 Impairment of non-financial assets
Property, plant and equipment (including right-of-use assets)
and the Company's interests in subsidiaries are subject to
impairment testing.
An impairment loss is recognised as an expense immediately for
the amount by which the asset's carrying amount exceeds its
recoverable amount. Recoverable amount is the higher of fair value,
reflecting market conditions less costs of disposal, and value in
use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessment of time value of money and
the risk specific to the asset.
For the purposes of assessing impairment, where an asset does
not generate cash inflows largely independent from those from other
assets, the recoverable amount is determined for the smallest group
of assets that generate cash inflows independently (i.e. a
cash-generating unit). As a result, some assets are tested
individually for impairment and some are tested at cash-generating
unit level. Goodwill in particular is allocated to those
cash-generating units that are expected to benefit from synergies
of the related business combination and represent the lowest level
within the Group at which the goodwill is monitored for internal
management purpose and not be larger than an operating segment.
Impairment loss is charged pro rata to the other assets in the
cash generating unit, except that the carrying value of an asset
will not be reduced below its individual fair value less cost of
disposal, or value in use, if determinable.
Impairment loss is reversed if there has been a favourable
change in the estimates used to determine the assets' recoverable
amount and only to the extent that the assets' carrying amount does
not exceed the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had been
recognised.
2 .14 Employee benefits
For the year ended 31 March 2022, the Group's only employees due
benefits were within its subsidiary, Regal Crown Technology
Limited.
Retirement benefits
Retirement benefits to employees are provided through defined
contribution plans.
The Group operates a defined contribution Mandatory Provident
Fund retirement benefit plan (the "MPF Scheme") under the Mandatory
Provident Fund Schemes Ordinance of Hong Kong, for those employees
who are eligible to participate in the MPF Scheme. Contributions
are made based on a percentage of the employees' basic salaries
.
Contributions are recognised as an expense in profit or loss as
employees render services during the year. The Group's obligations
under the MPF Scheme are limited to the fixed percentage
contributions payable.
Short-term employee benefits
Liability for wages and salaries, including non-monetary
benefits, annual leave, long service leave and accumulating sick
leave expected to be settled within 12 months of the reporting date
are recognised in other payables in respect of employees' services
up to the reporting date and are measured at the amounts expected
to be paid when the liabilities are settled.
2 .15 Related parties
For the purposes of these consolidated financial statements, a
party is considered to be related to the Company if:
(a) the party is a person or a close member of that person's family and if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group.
(b) the party is an entity and if any of the following conditions applies:
(i) the entity and the Group are members of the same group.
(ii) one entity is an associate or joint venture of the other
entity (or an associate or joint venture of a member of a group of
which the other entity is a member).
(iii) the entity and the Group are joint ventures of the same third party.
(iv) one entity is a joint venture of a third entity and the
other entity is an associate of the third entity.
(v) the entity is a post-employment benefit plan for the benefit
of employees of either the Group or an entity related to the
Group.
(vi) the entity is controlled or jointly controlled by a person identified in (a).
(vii) a person identified in (a)(i) has significant influence
over the entity or is a member of the key management personnel of
the entity (or of a parent of the entity).
(viii) the entity, or any member of a group of which it is a
part, provides key management personnel services to the Group or to
the parent of the Group.
Close family members of an individual are those family members
who may expected to influence, or be influenced by, that individual
in their dealings with the entity.
2.16 Accounting for income taxes
Taxation comprises current tax and deferred tax.
Current tax is based on taxable profit or loss for the period.
Taxable profit or loss differs from profit or loss as reported in
the income statement because it excludes items of income and
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
asset or liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial information and
the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Company is able
to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, except where
the Group is able to control the reversal of the temporary
differences and it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred tax is calculated, without discounting, at tax rates
that are expected to apply in the period the liability is settled
or the asset realised, provided they are enacted or substantively
enacted at the reporting date.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered. Deferred tax is
calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset realised.
Deferred tax is charged or credited to profit or loss, except when
it relates to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Company intends to settle
its current tax assets and liabilities on a net basis.
2.17 Earnings per Ordinary Share
The Company presents basic and diluted earnings per share data
for its Ordinary Shares.
Basic earnings per Ordinary Share is calculated by dividing the
profit or loss attributable to Shareholders by the weighted average
number of Ordinary Shares outstanding during the period.
Diluted earnings per Ordinary Share is calculated by adjusting
the earnings and number of Ordinary Shares for the effects of
dilutive potential Ordinary Shares.
2.18 Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-makers.
The chief operating decision-makers, who are responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the executive Board of
Directors.
All operations and information are reviewed together so that at
present there is only one reportable operating segment
In the opinion of the Directors, during the year the Group
operated in the single business segment of IT software development
and office administration.
3. KEY SOURCES OF ESTIMATION UNCERTAINTY
In the process of applying the Group's accounting policies which
are described in note 2, Directors have made the following
judgement that might have significant effect on the amounts
recognised in the financial statements. The key assumptions
concerning the future, and other key sources of estimation
uncertainty at the statement of financial position date, that might
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year, are also discussed below.
Depreciation
The Group depreciates the plant and equipment on a straight-line
basis at the rate 4 to 20% per annum commencing from the date the
property, plant and equipment are placed into productive use. The
estimated useful lives that the Group places the property, plant
and equipment into use reflect the director's estimate of the
periods that the Group intends to derive future economic benefits
from the use of the Group's property, plant and equipment.
Discount rate of lease liabilities and right-of-use assets
determination
In determining the discount rate, the Group is required to
exercise considerable judgement in relation to determining the
discount rate taking into account the nature of the underlying
assets, the terms and conditions of the leases, at the commencement
date and the effective date of the modification. The Group's rate
is referenced to the related party bank borrowing in Hong Kong.
4. REVENUE
The Company is engaged in provision of IT software development
and office administration. Revenue recognised during the year is as
follows:
2022 2021
HK$ HK$
IT software and office administration
contract 8,069,000 7,363,061
5. OTHER INCOME
2022 2021
HK$ HK$
Government subsidy (note) - 336,976
Exchange gain - 7,976
Gain on termination of lease agreement - 8,087
Sundry income 11,288 23,000
Interest income - 41
11,288 376,080
Note: During the year ended 31 March 2021, the Group received
funding support amount HK$298,500 from the Employment Support
Scheme under the Anti-epidemic Fund, set up by the Government of
the Hong Kong Special Administrative Region. The purpose of the
funding is to provide financial support to enterprises to retain
their employees who would otherwise be made redundant. Under the
terms of the grant, the Group is required not to make redundancies
during the subsidy period and to spend all the funding on paying
wages to the employees.
6. FINANCE CHARGES
2022 2021
HK$ HK$
Finance charges on lease liabilities 23,167 23,306
Interest on bank loan 106,336 -
129,503 23,306
7. LOSS BEFORE INCOME TAX
Loss before income tax is arrived at after charging:
2022 2021
HK$ HK$
Subcontractors' fee 2,646,000 896,000
Loss on disposal of a subsidiary - 39,060
Depreciation
* Property, plant and equipment 20,300 60,236
* Right-of-use assets 761,633 808,502
During the year the Group obtained following services from its
auditor:
2022 2021
HK$ HK$
Audit Services:
Statutory audit - Group and Company 120,000 230,000
8. STAFF COSTS AND DIRECTOR'S EMOLUMENTS
The aggregate payroll costs (including directors' remuneration)
were as follows:
2022 2021
HK$ HK$
Wages and salaries 2,374,868 3,162,682
Contributions to defined contribution
plans 117,200 153,280
Housing allowances (represented as
depreciation - Right-of-use assets) 761,633 808,502
The average number of persons employed by the Group (including
Directors) was 11 during the year (2021: 7).
The Directors' remuneration for the year was as follows:
2022 2021
HK$ HK$
Remuneration 821,414 2,217,000
Housing allowances (represented as
depreciation - Right-of-use assets) 761,633 808,502
9. Income tax expense
2022 2021
HK$ HK$
Tax expense for the year - -
No provision for UK corporation tax has been made as the Company
has no assessable profits for taxation purpose during the year
(2021: Nil).
No provision for Hong Kong Profits Tax has been made as the
Regal Crown Technology Limited has available tax losses brought
forward from prior years to offset the assessable profits generated
during the year (2021: Nil). At 31 March 2022, Regal Crown
Technology Limited had estimated unused tax losses arising in Hong
Kong of approximately HK$4,266,779 (2020: HK$5,419,815), subject to
the agreement by the Hong Kong Inland Revenue Department, that are
available indefinitely for offsetting against future taxable
profits of the Company. Deferred tax assets have not been
recognised in respect of these losses due to the unpredictability
of future taxable profits streams of Regal Crown Technology
Limited.
Reconciliation between tax expense and accounting profit at
applicable tax rates:
2022 2021
HK$ HK$
(Loss)/Profit before taxation (3,897,416) 1,483,825
------------------------------------------ ------------ ----------
Tax at applicable income tax rate
of UK and Hong Kong (763,731) 244,831
Tax effect of non-deductible expense 991,772 16,384
Tax effect of non-taxable income - (50,575)
Tax effect on temporary differences (37,790) (12,388)
Utilisation of tax losses not recognised (190,251) (198,252)
-
Income tax expense - -
10. EARNINGS PER SHARE
2022 2021
HK$ HK$
(L oss)/Profit attributable to equity
shareholders (3,897,416) 1,483,285
--------------------------------------- ------------- -------------
Weighted average number of ordinary
share 75,715,046 254,671
(Loss)/Profit per share in HK$:
Basic (5.15 cents) 582.64 cents
Diluted (5.15 cents) 582.64 cents
There were no potential dilutive ordinary shares in existence
during the years ended 31 December 2022 and 2021, and hence diluted
earnings per share is the same as the basic earnings per share.
11. PROPERTY, PLANT AND EQUIPMENT
Office Leasehold Furniture Total
equipment improvement &
fixtures
HK$ HK$ HK$ HK$
Cost
At 31 March 2021 and 1
April 2021 300,053 240,400 80,134 620,587
Addition 72,000 - - 72,000
Write-offs - (240,400) (80,134) (320,534)
At 31 March 2022 372,053 - - 372,053
Accumulated Depreciation
At 31 March 2021 and 1
April 2021 220,962 55,260 78,111 354,333
Charged for the year 9,371 9,616 1,313 20,300
Eliminated on write-offs - (64,876) (79,424) (144,300)
At 31 March 2022 230,333 - - 230,333
Net Book Value
At 31 March 2022 141,720 - - 141,720
At 31 March 2021 79,091 185,140 2,023 266,254
12. RIGHT-OF-USE ASSETS
Staff Quarter HK$
Cost
At 31 March 2021 and 31 March 2022 1,523,265
Accumulated Depreciation
At 31 March 2021 and 1 April 2021 253,878
Charge for the year 761,633
At 31 March 2022 1,015,511
Net Book Value
At 30 March 2022 507,754
At 31 March 2021 1,269,387
13. TRADE AND OTHER RECEIVABLES AND DEPOSIT AND PREPAYMENT
2022 2021
HK$ HK$
Trade receivables (note) 680,000 1,330,000
Other receivables 364,492 346,118
Due from related companies - 1,362,980
Deposit and prepayment 152,875 74,290
1,197,367 3,113,388
Note:
The Group allows an average credit period of 14 days to its
trade customers. Before accepting any new customer, the Group
assesses the potential customer's credit quality and defines its
credit limits. Credit sales are made to customers with a
satisfactory trustworthy credit history.
Age of trade receivables that are past due but not impaired are
as follows:
2022 2021
HK$ HK$
Overdue by:
0 - 30 days 680,000 1,330,000
Trade receivables that were past due but not impaired relate to
a number of customers that have a good track record with the Group.
Based on past experience, Directors believe that no impairment
allowance is necessary in respect of these balances as there has
not been a significant change in credit quality and the balances
are still considered fully recoverable.
As at 31 March 2022 and 2021, no ECL has been provided for trade
and other receivables and deposit and prepayment. The Group does
not hold any collateral over these balances.
The Directors consider that the fair values of trade and other
receivables and deposit and prepayment are not materially different
from their carrying amounts because these balances have short
maturity periods on their inception.
14. LOAN RECEIVABLES
2022 2021
HK$ HK$
Receivables within one year 700,000 -
The loans to independent third parties are unsecured, bearing
interest at 0.1% per annum and repayable in February 2023. The
Directors consider that the fair values of loan receivables are not
materially different from their carrying amounts.
15. CASH AND CASH EQUIVALENTS
2022 2021
HK$ HK$
Cash and bank balance 23,416,761 4,305,203
16. TRADE AND OTHER PAYABLES
2022 2021
HK$ HK$
Trade payables 408,000 906,494
Accrued charges and other payables 151,567 1,834,596
Receipt in advance 19,000 -
Amount due to a director 64,571 30,255
643,138 2,771,345
The amount due to a director is unsecured, interest free and
have no fixed term of repayment.
All amounts are short-term and hence the carrying values of
trade and other payables are considered not to have material
differences from their fair value.
17. BORROWINGS
2022 2021
HK$ HK$
Bank loans - secured 5,800,000 -
Presented by:
505,588 -
* Carrying amount repayable on demand or within one
year
5,294,412 -
* Carrying amount repayable after one year with
repayment on demand clause
5,800,000 -
Less: Amount shown under current (5,800,000) -
liabilities
Non-current liabilities - -
Bank borrowings are variable interest bearing borrowings which
carry interest at 2.5% below Prime Rate per annum. At 31 March
2022, the banking facilities were secured by the guarantees given
by Mr. Law Chi Kit, the ultimate controlling party of the
Company.
18. LEASES LIABILITIES
The following table illustrates the remaining contractual
maturities of the lease liabilities:
2022 2021
HK$ HK$
Total minimum leases payments:
Due within one year 520,000 780,000
Due in the second to fifth years - 520,000
520,000 1,300,000
Future finance charges on lease
liabilities (4,842) (28,009)
Present value of lease liabilities 515,158 1,271,991
Present value of liabilities:
Due within one year 515,158 756,832
Due in the second to fifth years - 515,159
515,158 1,271,991
Less: Portion due within one year
included under current liabilities (515,158) (756,832)
Portion due after one year included
under non-current liabilities - 515,159
The Group entered into a lease arrangement for staff quarter
with contract period of two years. The Group makes fixed payments
during the contract period. At the end of the lease term, the Group
does not have the option to purchase the property and the lease
does not include contingent rentals.
19. SHARE CAPITAL
2022 2021
HK$ HK$
Issued and fully paid:
At the beginning balance 10,300,001 1
Issue of shares 3,404,745 10,300,000
Group reorganisation - share exchange (2,203,751) -
At the closing balance 11,500,995 10,300,001
In the prior year the share capital relates to that of Regal
Crown Technology Limited.
On 31 August 2021, in addition to the 100 ordinary shares of
GBP0.01 issued in RC365 Holding Plc, 74,999,900 ordinary shares of
GBP0.01 each were allotted and issued as consideration for the
entire issued share capital of Regal Crown Technology Limited via a
share-for-share exchange. Such exercise resulted in a transfer of
share capital of HK$2,203,751 to the group reorganisation
reserve.
On admission to the Standard List of the LSE on 23 March 2022,
32,534,590 shares with nominal value of GBP0.01 were issued.
20. RELATED PARTIES TRANSACTIONS
During the year, the Group entered into the following
transaction with its related parties:
Name of related Nature of transactions 2022 2021
parties
HK$ HK$
RCGH Cruise Services Office Administration
Limited (Note) service income - 90,036
Gallant Horse Limited
(Note) Rental expense - 50,000
Note: Choi Yiu Keung, a former director of the Regal Crown
Technology Limited, was the director of these related companies as
at 31 March 2021.
21. FINANCIAL RISK MANAGEMENT AND FAIR VALUE MEASUREMENTS
The Group is exposed to financial risks through its use of
financial instruments in its ordinary course of operations and in
its investment activities. The financial risks include market risk
(including foreign currency risk and interest rate risk), credit
risk and liquidity risk.
There has been no change to the types of the Group's exposure in
respect of financial instruments or the manner in which it manages
and measures the risks.
21 .1 Categories of financial assets and liabilities
The carrying amounts presented in the consolidated statement of
financial position relate to the following categories of financial
assets and financial liabilities:
2022 2021
HK$ HK$
Financial assets
Financial assets at amortised
costs
* Trade receivables (note) 680,000 1,330,000
* Other receivables 364,492 346,118
* Due from related companies - 1,362,980
* Deposit and prepayment 152,875 74,290
700,000 -
* Loan receivables
* Cash and cash equivalents 23,416,761 4,305,203
25,314,128 7,418,591
Financial liabilities
Financial liabilities at amortised cost
* Trade payables 408,000 906,494
* Accrued charges and other payables 151,567 1,834,596
19,000 -
* Receipt in advance
* Amount due to a director 64,571 30,255
- Leases liabilities 515,158 1,271,991
- Bank Loan 5,800,000 -
6,958,296 4,043,336
21 .2 Foreign currency risk
Foreign currency risk refers to the risk that the fair value or
future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. The Group has no significant
exposure to foreign currency risk as substantially all of the
Group's transactions are denominated in Hong Kong dollars and the
exchange rate between Hong Kong dollars and British pounds remains
stable.
21 .3 Interest rate risk
The Group has no significant interest-bearing assets. Cash at
bank earns interest at floating rates based on daily bank deposits
rates.
The Group is exposed to cash flow interest rate risk in relation
to variable-rate bank borrowings. It is the Group's policy to keep
its borrowings at floating rate of interest to minimize the fair
value interest rate risk. The Group currently does not have hedging
policy. However, the Directors monitor interest rate exposure and
will consider necessary action when significant interest rate
exposure is anticipated.
Sensitivity analysis
The sensitivity analyses below have been determined based on the
exposure to interest rates for variable-rate borrowings. The
analysis is prepared assuming the borrowings outstanding at the end
of the reporting period were outstanding for the whole year. A 100
basis point increase or decrease is used when reporting interest
rate risk internally to Directors and represents Directors'
assessment of the reasonably possible change in interest rates. If
interest rates had been 100 basis point higher/lower and all other
variables were held constant, the Group's post-tax profit for the
year would decrease/increase by HK$48,000 (2020: Nil). This is
mainly attributable to the Group's exposure to interest rates on
its variable-rate bank borrowings.
21 .4 Credit risk
The Group's exposure to credit risk mainly arises from granting
credit to customers and other counterparties in the ordinary course
of its operations. The Group's maximum exposure to credit risk for
the components of the consolidated statement of financial position
at 31 March 2022 refers to the carrying amount of financial assets
as disclosed in note 21.1 .
The exposures to credit risk are monitored by the Directors such
that any outstanding debtors are reviewed and followed up on an
ongoing basis. The Group's policy is to deal only with creditworthy
counterparties. Payment record of customers is closely monitored.
Normally, the Group does not obtain collateral from debtors.
Trade receivables
The Group has applied the simplified approach to assess the ECL
as prescribed by HKFRS 9. To measure the ECL, trade receivables
have been grouped based on shared credit risk characteristics and
the past due days. In calculating the ECL rates, the Group
considers historical elements and forward looking elements.
Lifetime ECL rate of trade receivables is assessed minimal for all
ageing bands as there was no recent history of default and
continuous payments were received. The Group determined that the
ECL allowance in respect of trade receivables for the years ended
31 March 2022 and 2021 is minimal as there has not been a
significant change in credit quality of the customers.
Other financial assets at amortised cost
Other financial assets at amortised cost include deposits, other
receivables, amounts due from related companies, loan receivables
and cash and cash equivalents.
The Directors are of opinion that there is no significant
increase in credit risk on deposits, other receivables, amounts due
from related companies, loan receivables and cash and cash
equivalents since initial recognition as the risk of default is low
after considering the factors as following:
- any changes in business, financial or economic conditions that
affects the debtor ' s ability to meet its debt obligations;
- any changes in the operating results of the debtor;
- any changes in the regulatory, economic, or technological
environment of the debtor that affects the debtor's ability to meet
its debt obligations.
The Group has assessed that the ECL for deposits, other
receivables and loan receivables are minimal under the 12-months
ECL method as there is no significant increase in credit risk since
initial recognition. The credit risk with related parties is
limited because the counterparties are fellow subsidiaries. The
Directors have assessed the financial position of these related
parties and there is no indication of default.
The credit risk for cash and cash equivalents are considered
negligible as the counterparties are reputable banks with high
quality external credit ratings.
21 .5 Liquidity risk
Liquidity risk relates to the risk that the Group will not be
able to meet its obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset.
The Group's prudent policy is to regularly monitor its current
and expected liquidity requirements, to ensure that it maintains
sufficient reserves of cash and cash equivalents to meet its
liquidity requirements in the short term and longer term.
Analysed below are the Group's remaining contractual maturities
for its non-derivative financial liabilities as at the reporting
date. When the creditor has a choice of when the liability is
settled, the liability is included on the basis of the earliest
date when the Group is required to pay. Where settlement of the
liability is in instalments, each instalment is allocated to the
earliest period in which the Group is committed to pay.
Total
Within Over contractual
1 year 1 year undiscounted
Carrying or but within Over cash
amount on demand 5 years 5 years flow
HK$ HK$ HK$ HK$ HK$
2022
* Trade and other payables 559,567 559,567 - 559,567
- Amount due to
a director 64,571 64,571 - 64,571
- Leases liabilities 515,158 520,000 - 520,000
* Bank borrowings 5,800,000 661,048 3,647,280 2,127,616 6,435,944
6,939,296 1,805,186 3,647,280 2,127,616 7,580,082
2021
* Trade and other payables 2,741,090 2,741,090 - 2,741,090
* Amount due to a director 30,255 30,255 - 30,255
- Lease liabilities 1,271,991 780,000 520,000 1,300,000
- Bank borrowings - - - -
4,043,336 3,551,345 520,000 4,071,345
21.6 Fair values
The fair values of the Group's financial assets and financial
liabilities are not materially different from their carrying
amounts because of the immediate or short term maturity of these
financial instruments .
22. CAPITAL MANAGEMENT
The Group's capital management objectives are to ensure its
ability to continue as a going concern and to provide an adequate
return for shareholders by pricing services commensurately with the
level of risks.
The Group actively and regularly reviews and manages its capital
structure and makes adjustments in light of changes in economic
conditions. In order to maintain or adjust the capital structure,
the Group may adjust the amount of dividends paid to shareholders,
issue new shares or raises new debt financing.
23. CAPITAL COMMITMENTS
There were no capital commitments at 31 March 2022.
24. CONTINGENT LIABILITIES
There were no contingent liabilities at 31 March 2022
25. ULTIMATE CONTROLLING PARTY
The Directors are of the opinion that the ultimate controlling
party was Mr. Law Chi Kit as at 31 March 2022.
26. EVENTS AFTER THE REPORTING DATE
On 30 August 2022, Mr. Hon Keung CHEUNG resigned as the CFO and
Executive Director of the Company and Mr. Timothy Wai Yiu TANG
appointed as the CFO and Executive Director of the Company.
On 28 June 2022, RC365 has completed the acquisition of the
entire issued share capital of RCPAY Limited (UK) (subject to FCA
approval), RCPAY Limited (Hong Kong) and Regal Crown Technology
(Singapore) Pte Limited. The Consideration payable was GBP1 per
acquisition.
Company s tatement of financial position
as at 31 March 2022
Notes 2022 2021
HK$ HK$
ASSETS
Non-current assets
Investment in a subsidiary 30 8,096,239 -
8,096,239 -
Current assets
Amount due from a subsidiary 31 13,675,597 -
Other receivables 10 10
13,675,607 10
Current liabilities
Amount due to a related
company 31 - 1,453,275
- 1,453,275
Net current assets/(liabilities) 13,675,607 (1,453,265)
Net assets/(liabilities) 21,771,846 (1,453,265)
EQUITY
Share capital 19 11,500,995 10
Share premium 16,576,592 -
Profit or loss reserve (6,305,741) (1,453,275)
Total equity/(capital
deficiency) 21,771,846 (1,453,265)
Approved by the Board and authorised for issue on 30 September
2022
Law Chi Kit
Director
Company Registration number: 13289422
Company s tatement of changes in equity
for the year ended 31 March 2022
Share Share premium Accumulated Total
capital losses
HK$ HK$ HK$ HK$
At at 1 April - - -
2020 -
Share allotment
upon incorporation 10 - - 10
Loss for the year - - (1,453,275) (1,453,275)
At 31 March 2021
and at 1 April
2021 10 - (1,453,275) (1,453,265)
Loss for the year - - (4,852,466) (4,852,466)
Total comprehensive
expenses - - (4,852,466) (4,852,466)
--------------------- ----------- -------------- ------------ ------------
Share allotment 8,096,240 - - 8,096,240
Issue of share
capital 3,404,745 18,645,000 - 22,049,745
Share issue costs - (2,068,408) - (2,068,408)
At 31 March 2022 11,500,995 16,576,592 (6,305,741) 21,771,846
--------------------- ----------- -------------- ------------ ------------
Company statement of cash flows for the year ended 31 March
2022
For the period
from 24 March
2021
31 March to 31 March
2022 2021
HK$ HK$
Cash flows from operating activities
(Loss) before income tax (4,852,466) (1,453,275)
Adjustments for:
Listing expense 4,826,285
Exchange differences (26,181)
Operating cashflow before working
capital changes - (1,453,275)
Increase in amount due to a related
company - 1,453,275
Net cash (used in) operating activities - -
---------------------------------------- ----------- --------------
Cashflow from financing Activities
Proceeds from listing 6,920,874 -
Payment for listing costs (6,894,693) -
----------------------------------------- ----------- --------------
Net cash from financing activities 26,181 -
----------------------------------------- ----------- --------------
Net change in cash and cash equivalents - -
Effect of exchange rate changes - -
Cash and cash equivalents at beginning - -
of the year
Cash and cash equivalents at the - -
end of the year
27. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation:
The separate financial statements of the Company are presented
as required by the Companies Act 2006. As permitted by that Act,
the separate financial statements have been prepared in accordance
with UK-adopted International Accounting Standards.
The financial statements have been prepared on the historical
cost basis. The principal accounting policies adopted are the same
as those set out in note 2 to the Consolidated Financial
Statements. In addition, Investments in subsidiaries are stated at
cost less, where appropriate, provision for impairment .
28. LOSS ATTRIBUTABLE TO SHAREHOLDERS
Under section 408 of the Companies Act 2006, the Company is
exempt from the requirement to present its own income statement.
The loss attributable to the Company for the period ended 31 March
2022 was HK$4,852,466 (For the period from 24 March 2021 to 31
March 2021: loss of HK$1,453,275)
29. STAFF COSTS
During the year ended 31 March 2022 and period from 24 March
2021 to 31 March 2021, all Directors and staff are employed by
Regal Crown Technology Limited, a wholly owned subsidiary of the
Company, and therefore there were no Directors' remuneration and
staff costs.
30. INVESTMENT IN A SUBSIDIARY
Particulars of the Company's subsidiary as at 31 March 2022 are
as follows:
Name of subsidiary Place / Particulars Percentage Principal
country of of issued of activities
incorporation and paid-up interest
and operations share / registered held by
capital the Company
directly
Regal Crown
Technology IT software
Limited Hong Kong 10,300,001 100% development
31. AMOUNT DUE FROM A SUBSIDIARY/DUE TO A RELATED PARTY
These amounts refer to the amounts due from/to Regal Crown
Technology Limited, which are unsecured, interest-free and
repayable on demand.
32. FINANCIAL INSTRUMENTS
32 .1 Credit risk
The main credit risk relates to the amount due from a
subsidiary. The Directors have assessed the financial position of
the subsidiary and there is no indication of default.
32.2 Capital risk management
The Company's capital management objectives are to ensure its
ability to continue as a going concern and to provide an adequate
return for shareholders.
The Company actively and regularly reviews and manages its
capital structure and makes adjustments in light of changes in
economic conditions. In order to maintain or adjust the capital
structure, the Company may adjust the amount of dividends paid to
shareholders, issue new shares or raises new debt financing.
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END
FR UKRARURUKUUR
(END) Dow Jones Newswires
September 30, 2022 02:00 ET (06:00 GMT)
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