TIDMRCGH
RNS Number : 6319K
RC365 Holding PLC
23 December 2022
23 December 2022
RC365 Holding Plc
("RC365" or the "Company")
Interim Results for the six months ended 30 September 2022
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 interim results for the six
months ended 30 September 2022.
Period Highlights
-- Completion of the acquisition of RCPAY Limited (Hong Kong)
and Regal Crown Technology (Singapore) Pte Limited in June 2022
-- Successful soft launch of the Catch AR service
-- Revenue up by 292.6% to HKD7.9m (Half Year 2021: HKD2.7m)
-- Trade and other receivables at HKD1.3m (Full Year 2022: HKD1.0m)
-- Cash balance as at 30 September 2022 HKD16.6m (As at 31 March 2022: HKD23.4m)
Post period highlights
-- Completion of the acquisition of RCPAY Limited (UK)
-- Opportunities to enter into a co-operation agreement with a
well-known Software and Application Development company in Hong
Kong
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
The CEO's report
Overview
The Group has completed two major acquisitions in June 2022 by
acquiring the entire issued share capital of RCPAY Limited (Hong
Kong) and Regal Crown Technology (Singapore) Pte Limited and a
further acquisition post period end in November 2022 of RCPAY
Limited (UK). These acquisitions offer an abundance of growth
opportunities for the Group by expanding the presence in Hong Kong,
Singapore, UK and other ASEAN countries and offering local and
cross border payment solutions to existing and potential clients
located in those regions.
The Group has enjoyed a stable growth in terms of revenue and
the number of clients during the last 6 month. With the soft launch
of the Catch AR in the last quarter, the Group has generated
revenue and positive cash flow for this new service.
Summary of Trading Results
Revenue in the period was HKD7.9 million (2021: HKD2.7million),
which represents an increase of 292%. The Group made a loss after
tax of HKD3.0 million (2021: profit after tax of HKD0.5Million).
The cash balance for the Group was HKD16.6 million (2021: HKD11.4
million) represents an increase of 46%. The Group continued to
adopt prudent cost control whilst exploring alternative revenue
streams and business opportunities.
Outlook
The Group is actively exploring a number of opportunities by
forming different types of business relationships with corporates
located in United Kingdom, Singapore and Hong Kong.
The Group expects to introduce different marketing campaigns
designed to promote the Company's Catch AR and Maid Maid Matching
offerings in the coming 6 months, which the Board expects to
provide opportunities for the continued growth for the Group's
target markets.
The Group is exploring an opportunity to enter a co-operation
agreement with a well-known Software and Application Development
company in Hong Kong. The focus of such a co-operation agreement
will be the development of an all-rounded Enterprise Resource
Planning (ERP) software which can be sold to existing and potential
clients. The ERP software is expected to encompass administrative,
payroll, sale and purchase functions together with a payment
function to enable subscriber to increase the effectiveness and
efficiency of their operations. The Group expects to introduce the
above services to Singapore and Malaysia market in Q1 of 2023.
Responsibility Statement
We confirm that to the best of our knowledge:
a) The condensed set of financial statements has been prepaid in
accordance with IAS34 "Interim Financial Reporting";
b) The interim management account includes a fair review of the
information required by DTR4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six month of the year); and
c) The interim management report includes a fair review of the
information required by DTR4.2.8R (disclosure of related parties'
transactions and changes therein).
Caution Statement
This Interim Management Report (IMR) has been prepared solely to
provide additional information to shareholders to assess the
Company's strategies and potential for those strategies to succeed.
The IMR should not be relied on by any other party or for any other
purpose.
The condensed accounts have not been reviewed by the
auditors.
Chi Kit LAW
Chief Executive Officer
Date: 23rd December 2022
Condensed Consolidated Statement of Profit or Loss and Other
Comprehensive Income
for the six months ended
30 September 2022
Six months Six months
ended ended
30 September 30 September
2022 2021
(unaudited) (unaudited)
Notes HK$ HK$
Revenue 4 7,924,000 2,700,000
Cost of sales (5,524,354) -
------------------------------------ ----- ------------ ------------
Gross profit 2,399,646 2,700,000
Other income 5 248,443 11,207
Subcontracting fee paid (669,883) (300,000)
Staff costs (1,987,750) (1,123,537)
Depreciation on property, plant
and equipment and right-of-use
assets (313,249) (390,900)
Other operating expenses (2,587,316) (382,112)
Finance charges 6 (80,337) (13,946)
(Loss)/ Profit before income
tax 7 (2,990,446) 500,712
Income tax expense 9 - -
(Loss)/ Profit for the period (2,990,446) 500,712
------------------------------------ ----- ------------ ------------
(Loss)/ Profit per share - basic
and diluted (HK$) 10 (2.78 cents) 0.67 cents
(Loss)/ Profit for the period (2,990,446) 500,712
Other comprehensive expense,
net of tax
Items that may be reclassified
subsequently to profit or loss: (396,559) -
Exchange differences on translation
of financial statements of foreign
operations (396,559) -
Total comprehensive (expense)/
income for the period (3,387,005) 500,712
The accompanying notes form an integral part of these
consolidated financial statements.
Condensed Consolidated Statement of
Financial Position
as at 30 September 2022
As at As at
30 September 31 March
Notes 2022 2022
(unaudited) (audited)
HK$ HK$
ASSETS
Non-current assets
Property, plant and equipment 12 353,550 141,720
Right-of-use assets 13 248,441 507,754
601,991 649,474
Current assets
Deposit and prepayment 15 110,865 152,875
Trade and other receivables 15 1,256,550 1,044,492
Loan receivables 16 3,000,556 700,000
Cash and cash equivalents 17 16,638,550 23,416,761
21,006,521 25,314,128
Current liabilities
Trade and other payables 18 151,326 643,138
Borrowings 19 5,674,470 5,800,000
Lease liabilities 20 252,018 515,158
6,077,814 6,958,296
Net current assets 14,928,707 18,355,832
Net assets 15,530,698 19,005,306
EQUITY
Share capital 21 11,500,995 11,500,995
Share premium 16,576,592 16,576,592
Group reorganisation reserve 662,873 750,476
Translation reserve (932,795) (536,236)
Accumulated losses (12,276,967) (9,286,521)
Total equity 15,530,698 19,005,306
The accompanying notes form an integral part of these
consolidated financial statements.
Condensed Consolidated S tatement of
Changes in Equity
for the six months ended
30 September 2022
Group
Share Share Translation reorganisation Accumulated
capital premium reserve reserve losses Total
HK$ HK$ HK$ HK$ HK$ HK$
At 31 March
2021 and at 1
April 2021
(audited) 10,300,001 - - - (5,389,105) 4,910,896
Profit for the
period - - - - 500,712 500,712
Share for share
exchange (2,203,751) - - 2,203,751 - -
-------------------- ------------ ----------- ------------ ---------------- ------------- ------------
At 30 September
2021 (unaudited) 8,096,250 - - 2,203,751 (4,888,393) 5,411,608
-------------------- ------------ ----------- ------------ ---------------- ------------- ------------
At 31 March 2022
and at 1 April
2022 (audited) 11,500,995 16,576,592 (536,236) 750,476 (9,286,521) 19,005,306
Loss for the
period - - - - (2,990,446) (2,990,446)
Exchange difference
on consolidation - - (396,559) - - (396,559)
Total comprehensive
expense - - (396,559) - (2,990,446) (3,387,005)
-------------------- ------------ ----------- ------------ ---------------- ------------- ------------
Acquisition of
subsidiaries
under common
control - - - (87,603) - (87,603)
At 30 September
2022 (unaudited) 11,500,995 16,576,592 (932,795) 662,873 (12,276,967) 15,530,698
-------------------- ------------ ----------- ------------ ---------------- ------------- ------------
The accompanying notes form an integral part of these
consolidated financial statements.
Condensed Consolidated Statement of
Cash Flows
f or the six months ended
30 September 2022
Six months Six months
ended ended
30 September 30 September
2022 2021
(unaudited) (unaudited)
HK$ HK$
Cash flows from operating activities
(Loss)/ Profit before income tax (2,990,446) 500,712
Adjustments for:
Depreciation 313,249 390,900
Finance charges on lease liabilities 80,337 11,252
Operating cashflow before working
capital changes (2,596,860) 902,864
(Decrease)/ Increase in trade and
other receivables 1,114,598 (2,937,100)
Decrease in deposit and prepayment 42,011 -
Increase in amount due from a director (1,238,178) -
Increase in loan receivables (2,300,556) -
(Decrease)/ Increase in trade and
other payables (989,733) 3,773,368
Net cash (used in)/ from operating
activities (5,968,718) 1,739,132
---------------------------------------- ------------------ ----------------------
Cash flows from investing activities
Acquisition of property, plant and
equipment (248,660) (72,000)
Net cash inflow for the acquisition
of subsidiaries 339,458 -
---------------------------------------- ------------------ ----------------------
Net cash from/ (used in) investing
activities 90,798 (72,000)
---------------------------------------- ------------------ ----------------------
Cash flows from financing activities
Interest paid (79,608) (11,252)
Inception of bank borrowings - 5,800,000
Repayment of bank borrowings (125,530) -
Rental paid for lease liabilities (285,800) (376,054)
---------------------------------------- ------------------ ----------------------
Net cash (used in)/ from financing
activities (490,938) 5,412,694
---------------------------------------- ------------------ ----------------------
Net (decrease)/ increase in cash
and cash equivalents (6,368,858) 7,079,826
Effect of exchange rate changes (409,353) -
Cash and cash equivalents at beginning
of the period 23,416,761 4,305,203
Cash and cash equivalents at the
end of the period 16,638,550 11,385,029
The accompanying notes form an integral part of these
consolidated financial statements.
Notes to the Condensed Consolidated
Financial Statements
f or the six months ended
30 September 2022
1. GENERAL INFORMATION
RC365 Holding Plc (the "Company") was incorporated as a private
limited company on 24 March 2021 in the United Kingdom (the "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 principal activity of the Company is to act as an investment
holding company. The Company together with its subsidiaries (the
"Group") are mainly engaged in provision of IT software development
and Payment Solutions. There were no significant changes in the
nature of the Group's principal activities during the period.
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 for the current and comparative periods.
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 2022
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 Classification of liabilities Not earlier than
1 as current or non-current 1 January 2024
IAS Disclosure of accounting 1 January 2023
1 policies
IAS Accounting estimates 1 January 2023
8
IAS Deferred tax related to 1 January 2023
12 assets 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
(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$2,990,446 for the six months
ended 30 September 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 six months ended 30 September 2022.
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 statements 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 the comparative figure of the
consolidated financial statements are the retained earnings and
other equity balances of the Company and RCT. The equity structure
appearing in the comparative figure of 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.
On 28 June 2022, the Group acquired 100% equity interest of
RCPay Ltd (Hong Kong) and Regal Crown Technology (Singapore) Pte
Ltd from Mr. Law Chi Kit. As RCPay Ltd (Hong Kong), Regal Crown
Technology (Singapore) Pte Ltd and the Group are under common
control of Mr. Law Chi Kit before and after the acquisition, the
acquisition and the business combination have been accounted for as
a business combination under common control.
In the consolidated financial statements, the results of
subsidiaries acquired or disposed of during the period 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.
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 Improvement 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 FVPL, 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 contain 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 contain 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 the group
reorganisation.
-- "Accumulated losses" include all current period results as
disclosed in the income statements.
No dividends are proposed for the period.
2 .11 Revenue recognition
Revenue arises mainly from contracts for IT software
development.
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 is 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 condensed
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
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, 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, 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 period the Group
operated in the single business segment of IT software
development.
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 consolidated 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 period, are also discussed below.
Depreciation
The Group depreciates the property, 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 bank borrowing's interest rate in Hong
Kong.
4. REVENUE
The Group is engaged in provision of IT software development and
Payment Solutions
5. OTHER INCOME
30 September 30 September
2022 2021
(unaudited) (unaudited)
HK$ HK$
Government subsidy (note) 243,200 -
Sundry income 5,012 11,191
Interest income 231 16
248,443 11,207
Note: During the six months ended 30 September 2022, the Group
received funding support amount HK$243,200 from the Employment
Support Scheme under the Anti-epidemic Fund, set up by the
Government of the Hong Kong Special Administrative Region. The
purpose of the funding is to provide financial support to
enterprises to retain their employees who would otherwise be made
redundant. Under the terms of the grant, the Group is required not
to make redundancies during the subsidy period and to spend all the
funding on paying wages to the employees.
6. FINANCE CHARGES
30 September 30 September
2022 2021
(unaudited) (unaudited)
HK$ HK$
Finance charges on lease liabilities 729 13,946
Interest on bank borrowings 79,608 -
-------------------------------------- ------------- -------------
80,337 13,946
7. (LOSS)/ PROFIT BEFORE INCOME TAX
(Loss)/ Profit before income tax is arrived at after
charging:
30 September 30 September
2022 2021
(unaudited) (unaudited)
HK$ HK$
Auditor's remuneration - -
Subcontracting fee paid 669,883 300,000
Depreciation
* Property, plant and equipment 36,830 10,084
* Right-of-use assets 276,419 380,816
8. DIRECTOR'S EMOLUMENTS
Details of director's emoluments are set out as follows:
30 September 30 September
2022 2021
(unaudited) (unaudited)
HK$ HK$
Fees - -
Other emoluments 681,382 100,000
681,382 100,000
9. Income tax expense
30 September 30 September
2022 2021
(unaudited) (unaudited)
HK$ HK$
Tax expense for the period - -
No provision for UK corporation tax has been made as the Company
has no assessable profits for taxation purpose during the period
(2021: Nil).
No provision for Hong Kong Profits Tax has been made as the Hong
Kong subsidiaries have no assessable profits. (2021: the Hong Kong
subsidiary has available tax losses brought forward from prior
years to offset the assessable profits generated during the
period).
No provision for Singapore corporation tax has been made as the
Singapore subsidiary has no assessable profits.
10. EARNINGS PER SHARE
30 September 30 September
2022 2021
(unaudited) (unaudited)
HK$ HK$
(Loss)/ Profit attributable to
equity shareholders (2,990,446) 500,712
------------------------------------- ------------- -------------
Weighted average number of ordinary
share 107,534,590 75,000,000
(Loss)/ Profit per share in HK$:
Basic (2.78 cents) 0.67 cents
Diluted (2.78 cents) 0.67 cents
There were no potential dilutive ordinary shares in existence
during the six months ended 30 September 2022 and 2021, and hence
diluted earnings per share is the same as the basic earnings per
share.
11. EMPLOYEE BENEFIT EXPENSES (including directors' emoluments)
30 September 30 September
2022 2021
(unaudited) (unaudited)
HK$ HK$
Staff costs
Salaries and other benefits 1,864,012 1,029,337
Pension costs - defined contribution
plan 123,738 94,200
Depreciation - right-of-use assets 63,469 380,816
Staff benefit 2,051,219 1,504,353
12. PROPERTY, PLANT AND EQUIPMENT
Furniture
Office Leasehold &
equipment improvement fixtures Total
HK$ HK$ HK$ HK$
Cost
At 1 April 2021 300,053 240,400 80,134 620,587
Addition 72,000 - - 72,000
Disposal - (240,400) (80,134) (320,534)
---------------------------- ----------- ------------- ---------- ----------
At 31 March 2022 (audited) 372,053 - - 372,053
Addition 188,951 - 59,709 248,660
At 30 September 2022
(unaudited) 561,004 - 59,709 620,713
Accumulated Depreciation
At 1 April 2021 220,962 55,260 78,111 354,333
Charge for the period 9,371 9,616 1,313 20,300
Elimination on written
off - (64,876) (79,424) (144,300)
---------------------------- ----------- ------------- ---------- ----------
At 31 March 2022 (audited) 230,333 - - 230,333
Charge for the period 32,579 - 4,251 36,830
At 30 September 2022
(unaudited) 262,912 - 4,251 267,163
Net Book Value
At 30 September 2022
(unaudited) 298,092 - 55,458 353,550
At 31 March 2022 (audited) 141,720 - - 141,720
---------------------------- ----------- ------------- ---------- ----------
13. RIGHT-OF-USE ASSETS
Lease assets HK$
Cost
As at 1 April 2021 and 31 March 2022 (audited) 1,523,265
Additions from acquisition of
subsidiaries under common
control 461,391
Termination of lease (1,523,265)
At 30 September 2022 (unaudited) 461,391
Accumulated Depreciation
At 1 April 2021 253,878
Charge for the period 761,633
---------------------------------- ------------
At 31 March 2022 (audited) 1,015,511
Charge for the period 276,419
Termination of lease (1,078,980)
At 30 September 2022 (unaudited) 212,950
Net Book Value
At 30 September 2022 (unaudited) 248,441
---------------------------------- --------
At 31 March 2022 (audited) 507,754
14. INTERESTS IN SUBSIDIARIES
Particulars of the Company's subsidiaries as at 30 September
2022 are as follows:
Name of subsidiary Place / Particulars Percentage Principal
country of issued of activities
of incorporation and paid-up interest
and operations share / registered held by
capital the Company
directly
Regal Crown Hong Kong HK$10,300,001 100% IT software
Technology development
Limited
RCPay Ltd (Hong Hong Kong HK$10,000 100% Prepaid card
Kong) ("RCPay consultancy
HK") services
and licensed
money service
operation
Regal Crown Singapore SGD100,000 100% IT consultancy
Technology and consultancy
(Singapore) management
Pte Ltd services
("RC Singapore")
15. TRADE AND OTHER RECEIVABLES AND DEPOSIT AND PREPAYMENT
30 September
2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Trade receivables - 680,000
Amount due from a director 1,238,178 -
Other receivables - 364,492
Due from related companies 18,372 -
Deposit and prepayment 110,865 152,875
1,367,415 1,197,367
Amount due from a director is unsecured, interest free and has
no fixed term of repayment.
The Directors of the Group considered 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. As at 30
September 2022 and 31 March 2022, no ECL has been provided for
trade and other receivables and deposit and prepayment .
16. LOAN RECEIVABLES
30 September
2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Receivables within one year 3,000,556 700,000
The loans to independent third parties are unsecured, bearing
interest at 0.1% (31 March 2022: 0.1%) per annum and repayable in
February 2023 (31 March 2022: February 2023). The Directors
consider that the fair values of the loan receivables are not
materially different from their carrying amounts.
17. CASH AND CASH EQUIVALENTS
30 September
2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Cash and bank balances 16,638,550 23,416,761
18. TRADE AND OTHER PAYABLES
30 September
2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Trade payables 6,428 408,000
Accrued charges and other
payables 144,898 151,567
Receipt in advance - 19,000
Amount due to a director - 64,571
151,326 643,138
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 materially different
from their fair values.
19. BORROWINGS
30 September
2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Bank loans - secured: 5,674,470 5,800,000
Presented by:
Repayable on demand or within
one year 505,588 505,588
Repayable after one year
with repayment on demand
clause 5,168,882 5,294,412
5,674,470 5,800,000
Less: Amount shown under
current liabilities (5,674,470) (5,800,000)
Non-current liabilities - -
Bank borrowings are variable interest bearing borrowings which
carry interest at 2.5% below Prime Rate per annum. At 30 September
2022 and 31 March 2022, the banking facilities were secured by the
guarantee given by Mr. Law Chi Kit, the ultimate controlling party
of the Company.
20. LEASE LIABILITIES
The following table shows the remaining contractual maturities
of the lease liabilities:
30 September
2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Total minimum leases payments:
Due within one year 255,382 520,000
Due in the second to fifth
years - -
255,382 520,000
Future finance charges on
lease liabilities (3,364) (4,842)
Present value of lease liabilities 252,018 515,158
Present value of liabilities:
Due within one year 252,018 515,158
Due in the second to fifth
years - -
252,018 515,158
Less: Portion due within
one year included under
current liabilities (252,018) (515,158)
Portion due after one year
included under non-current
liabilities - -
The Group has entered into lease arrangements for staff quarter,
car parking space and office with contractual period of two years.
The Group makes fixed payments during the contract periods. At the
end of the lease terms, the Group does not have the option to
purchase the properties and the leases do not include contingent
rentals.
During the six months ended 30 September 2022, the lease
arrangement for staff quarter has been terminated.
21. SHARE CAPITAL
30 September
2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Issued and fully paid:
At the beginning of the period 11,500,995 10,300,001
Issue of shares - 3,404,745
Group reorganisation - share
exchange - (2,203,751)
At the end of the period 11,500,995 11,500,995
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 LSE on 23 March 2022,
32,534,590 shares with nominal value of GBP0.01 each were
issued.
22. BUSINESS COMBINATION UNDER COMMON CONTROL
a) Acquisition of RCPay HK
On 28 June 2022, the Group acquired 100% equity interest in
RCPay HK at a cash consideration of GBP1 from the ultimate
controlling party. As the Group and RCPay HK are under the common
control of Mr. Law Chi Kit before and after the acquisition, the
business combination has been accounted as a business combination
under common control.
The Group elects to account for the common control combination
using the pooling-of-interest method and the results of RCPay HK
are consolidated by the Group from the date of acquisition, being
the date on which the Group obtains control, and continue to be
consolidated until the date that such control ceases.
The difference between the cash consideration and the carrying
amount of the net assets of RCPay HK at the completion date is
recognised in group reorganisation reserve amounting to
HK$24,792.
Details of the carrying amounts of the assets and liabilities of
RCPay HK at the date of acquisition are as follows:
At 28 June
2022
HK$
Right-of-use assets 461,391
Trade and other receivables 73,600
Cash and cash equivalents 63,362
Trade and other payables (107,335)
Lease liabilities (466,216)
----------------------------- -----------
Net assets of RCPay HK 24,802
Merger reserve recognised (24,792)
10
Net cash inflow arising on the acquisition:
Consideration (10)
Cash and cash equivalents acquired 63,362
63,352
b) Acquisition of RC Singapore
On 28 June 2022, the Group acquired 100% equity interest in RC
Singapore at a cash consideration of GBP1 from the ultimate
controlling party. As the Group and RC Singapore are under the
common control of Mr. Law Chi Kit before and after the acquisition,
the business combination has been accounted as a business
combination under common control.
The Group elects to account for the common control combination
using the pooling-of-interest method and the results of RC
Singapore are consolidated by the Group from the date of
acquisition, being the date on which the Group obtains control, and
continue to be consolidated until the date that such control
ceases.
The difference between the cash consideration and the carrying
amount of the net liabilities of RC Singapore at the completion
date is recognised in group reorganisation reserve amounting to
HK$112,395.
Details of the carrying amounts of the assets and liabilities of
RC Singapore at the date of acquisition are as follows:
At 28 June
2022
HK$
Trade and other receivables 14,879
Cash and cash equivalents 276,116
Trade and other payables (403,380)
--------------------------------- -----------
Net liabilities of RC Singapore (112,385)
Merger reserve recognised 112,395
10
Net cash inflow arising on the acquisition:
Consideration (10)
Cash and cash equivalents acquired 276,116
276,106
------------------------------------ --------
23. MAJOR NON-CASH TRANSACTIONS
During the six months ended 30 September 2022, the Group early
terminated the financial lease arrangement in respect of a staff
quarter, resulted in a decrease in the right-of-use assets and
lease liabilities of HK$444,285 and HK$451,231, respectively.
24. FINANCIAL RISK MANAGEMENT AND FAIR VALUE MEASUREMENTS
The Group is exposed to financial risks through its use of
financial instruments in its ordinary course of operations and in
its investment activities. The financial risks include market risk
(including foreign currency risk and interest rate risk), credit
risk and liquidity risk.
There has been no change to the types of the Group's exposure in
respect of financial instruments or the manner in which it manages
and measures the risks.
24 .1 Categories of financial assets and liabilities
The carrying amounts presented in the consolidated statement of
financial position relate to the following categories of financial
assets and financial liabilities:
30 September
2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Financial assets
Financial assets at amortised
costs
* Trade receivables - 680,000
* Other receivables - 364,492
- Due from a director 1,238,178 -
* Due from related companies 18,372 -
* Deposit and prepayment 110,865 152,875
* Loan receivables 3,000,556 700,000
* Cash and cash equivalents 16,638,550 23,416,761
21,006,521 25,314,128
Financial liabilities
Financial liabilities at amortised
cost
* Trade payables 6,428 408,000
* Accrued charges and other payables 144,898 151,567
* Receipt in advance - 19,000
- Amounts due to a director - 64,571
- Leases liabilities 252,018 515,158
- Borrowings 5,674,470 5,800,000
6,077,814 6,958,296
24 .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 the functional currency of
respective subsidiaries.
24 .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 pre-tax loss for the
period would increase/decrease by HK$56,745 (profit for the year
ended 31 March 2022: decrease/ increase HK$58,000). This is mainly
attributable to the Group's exposure to interest rates on its
variable-rate bank borrowings.
24 .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 condensed consolidated statement of financial
position at 30 September 2022 refers to the carrying amount of
financial assets as disclosed in note 24.1 .
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 period ended
30 September 2022 and year ended 31 March 2022 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, amount due from a director, 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, amount due
from a director, 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 director and related
parties is considered limited. The Directors have assessed the
financial position of the director and 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.
24 .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$
30 September
2022
* Trade and other payables 151,326 151,326 - - 151,326
- Leases liabilities 252,018 255,382 - - 255,382
* Bank borrowings 5,674,470 923,124 3,692,496 1,692,394 6,308,014
6,077,814 1,329,832 3,692,496 1,692,394 6,714,722
31 March 2022
* Trade and other payables 559,567 559,567 - - 559,567
* Amounts 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
24.6 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 .
25. 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.
26. EVENTS AFTER THE REPORTING PERIOD
On 1 November 2022, the Group has completed the acquisition of
the entire issued share capital of RCPAY Limited (UK). The
consideration payable was GBP1.
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END
IR UUARRUKUUUAA
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