REG - RC365 Holding PLC - Interim Results
25/11/2024 07:15
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RNS Number : 4866N RC365 Holding PLC 25 November 2024
25 November 2024
RC365 Holding plc
("RC365", the "Company" or the "Group")
Interim Results
RC365 Holding plc (LSE: RCGH), an established payment solutions and fintech
company, is pleased to announce its interim results for the six months ended
30 September 2024.
Financial Summary
· Revenue was HK$6.1 million (H1 2024: HK$6.8 million)
· Gross margin of 89.2% (H1 2024: 99.5%)
· Loss after tax reduced to HK$7.4 million (H1 2024: HK$34.9 million loss)
· Cash and cash equivalents at 30 September 2024 were HK$16.3 million (31 March
2024: HK$19.3 million)
Operational & Strategic Summary
· Significant growth in new payment card services offering: 891 cards issued
during the period (H1 2024: nil) - bringing the total to over 1,500 to date
· Sustained demand for the provision of IT services
· Progressed strategy to expand product offering into virtual banking
o Gained a Money Lenders Licence to be able to offer digital lending services
o Advanced development of the upgraded RCPAY app - RC3.0 App - which will
offer additional functionality such as virtual banking features
· Expanded in new key target geographies of Japan and Malaysia
o Number of corporate customers in Japan more than doubled over the period
o Development of new RC365 Solutions subsidiary in Malaysia continued,
supported by the Group's receipt of a HK$0.7 million grant from the Hong Kong
government
· Post period, the Group completed the divestiture of its RCPAY Limited
subsidiary incorporated in Hong Kong for a cash consideration of HK$0.4
million
Chi Kit (Michael) LAW, Chief Executive Officer of RC365, said: "We are pleased
to have continued to execute on our growth strategy during the first half of
our 2025 financial year. We have made excellent progress with the rollout of
our card programmes, with over 1,500 issued to date, and in growing our
customer base in Japan, which is a key target market for RC365. We also took
important steps to enable us to expand our offering into virtual banking -
most notably with gaining a Money Lenders Licence in Hong Kong. We are excited
to launch these new services as well as our upgraded RC3.0 App in the coming
months, and we look forward to reporting on our progress."
For further information please contact:
RC365 Holding plc
Chi Kit LAW, Chief Executive Officer T: +852 2251 1621
E: ir@rc365plc.com (mailto:ir@rc365plc.com)
Guild Financial Advisory Limited - Financial Adviser
Ross Andrews T: +44 (0)7973 839767
E: ross.andrews@guildfin.co.uk
Evangeline Klaassen T: +44 (0)7972 841276
E: evangeline.klaassen@guild.co.uk
Gracechurch Group - Financial PR
Claire Norbury, Heather Armstrong T: +44 (0)204 582 3500
E: rc365@gracechurchpr.com
About RC365 Holding plc
RC365 Holding plc (LSE: RCGH) is an established payment solutions and fintech
company. It operates primarily in East and Southeast Asia through its core
subsidiaries of Regal Crown Technology and RCPAY, and the recently-established
RC365 Solutions.
For over 10 years, the Company has delivered efficient and secure payment
gateway solutions and IT support and development services for payment and
financial systems, including ERP solutions. In 2021, it commenced providing
digital remittance and payment services, which expanded to include foreign
exchange and premium card solutions. These services are provided to
multinational merchants, SMEs and individuals. RC365 intends to expand into
the virtual banking market and geographically, including in the UK and wider
Europe.
For more information, visit: https://www.rc365plc.com
(https://www.rc365plc.com)
Overview
The first half of the financial year represented a period of continued
advancement for RC365 as the Group progressed its strategy to expand
geographically and expand its service offering, particularly into virtual
banking. A key development in this regard was gaining a Money Lenders Licence,
via the acquisition of the licence holder, in Hong Kong. Solid progress was
made with the provision of premium card solutions by the Group's RCPAY payment
services business. There was significant growth in the number of active RC365
payment card holders, which increased to more than 1,500 as at 30 September
2024, and the Group anticipates this strong growth rate to continue over the
next two to three quarters. In addition, while revenue was slightly lower
compared with the first half of the prior year, loss before tax was
significantly reduced.
Summary of Trading Performance
Financial
Revenue for the six months ended 30 September 2024 was HK$6.1 million (H1
2024: HK$6.8 million). The vast majority of revenue continued to be generated
by the Group's wholly-owned Regal Crown Technology Limited ("RCTech")
subsidiary, which provides cutting-edge IT support and development for
payment and financial systems, including Enterprise Resource Planning
solutions. The slight reduction in total revenue reflects a lower contribution
from RCPAY, with growth from Hong Kong being offset by a decrease in revenue
from the UK.
Gross margin was 89.2% (H1 2024: 99.5%). This reflects the contribution to
cost of sales in H1 2025 from the card payment programmes.
Loss after tax was significantly reduced to HK$7.4 million (H1 2024: HK$34.9
million). This was primarily due to fair value loss on financial assets being
HK$0.5 million compared with HK$31.9 million in H1 2024. As at 30 September
2024, the cash balance of the Group was HK$16.3 million (31 March 2024:
HK$19.3 million). The Group continued to adopt a prudent approach to cost
control whilst exploring new revenue streams and business opportunities. In
addition, as at 30 September 2024, the Group had drawn down GBP 1.0
million of its convertible loan facility for up to GBP 4.0 million, of
which GBP 0.6 million had been converted through the issuance of new
ordinary shares (for further information, see note 24).
Operational
RCPAY handled approximately HK$18.7 million (H1 2024: HK$47.0 million) in
providing payment and remittance services to clients (both individual and
corporate) based in Asia and United Kingdom during the interim period. This
reflects the Group experiencing exceptionally high demand in the first half of
the prior year, and a return to more typical levels in H1 2025.
The Group supplied 891 new payment cards (H1 2024: 0) to clients from Hong
Kong, Japan and the ASEAN region during the period to 30 September 2024,
bringing the total to date to over 1,500. The Board is pleased with the number
of RC365 Asset Link Credit Cards (formerly the 'RC365 MasterCard'), issued by
MasterCard, supplied during the interim period.
Strategic Execution
During the first half of financial year 2025, RC365 continued to execute on
its strategy to expand and enhance its service offerings and to expand
geographically.
A key element of this was the gaining of a Money Lenders Licence in Hong Kong
via the acquisition of HC Capital Group Ltd, the licence holder, which allows
the Group to provide money lending services to customers and represents
progress on its strategy to expand its offering into virtual banking. The
Group intends to expand its card offering, which currently consists of
MasterCard debit facilities, to include credit facilities to existing and
potential RC365 card holders during Q1 2025.
As noted above, the Board is very pleased with the progress that the Group is
making with its card programmes to date, which is a core element of the growth
strategy. This is a new service offering and also part of the Group's
geographic expansion - in particular, it has spearheaded the entrance into
Japan, which is regarded as a key growth market. The Group's number of
corporate customers in Japan more than doubled during the period.
The Group continued to develop its new, wholly-owned subsidiary, RC365
Solutions Sdn Bhd, in Malaysia that was established in the prior year. This
was supported by the receipt, during the period, by RCTech of a grant of
HK$0.7 million from the Hong Kong government under the Dedicated Fund on
Branding, Upgrading and Domestic Sales. The new entity will enable the
centralisation of IT activities undertaken across the Group as well as provide
a base for further expansion in Malaysia and the ASEAN region.
Development and upgrade work also continued on the RCPAY app that currently
provides the Group's FX, remittance and card services, and which will be
expanded with the introduction of the RC3.0 App to offer additional
functionality. The RC2.5 App was officially launched at the end of the prior
financial year, in March 2024, and RC3.0 App is expected to be introduced in
early calendar year 2025. The launch of RC3.0 App will be pivotal in enabling
the Group to expand into offering virtual banking facilities as well as other
services such as enterprise resource planning and blockchain features.
Outlook
Post period, as also announced today, the Group completed the divestiture of
its RCPAY Limited subsidiary incorporated in Hong Kong ("RCPAY HK") for a cash
consideration of HK$0.4 million. This enables the Group to realise value from
the restructuring of the RCPAY business without having any impact on the
Group's ability to continue to service its customers or execute on its
partnership agreements.
Looking ahead, the Group is continuing to explore opportunities and form
different types of business relationships with corporates located in Hong
Kong, Japan, the UK and wider Europe. The Board is very pleased with the
momentum that the Group is experiencing with its existing card programmes,
which is expected to continue, and also excited about the launch of the RC3.0
App and the introduction of credit services in the second half of the year,
which will mark a key milestone in RC365's strategy to expand into virtual
banking. The Board looks forward to reporting on the Group's progress.
Condensed consolidated statement of profit or loss and other comprehensive
income
for the six months ended 30 September 2024
Six months ended Six months
ended
30 September 2024 30 September
2023
(unaudited) (unaudited)
Notes HK$ HK$
Revenue 4 6,138,632 6,803,749
Cost of sales (661,632) (30,832)
Gross profit 5,477,000 6,772,917
Other income 5 1,290,970 236,835
Subcontracting fee paid (2,365,189) (1,600,066)
Staff costs (4,711,855) (3,500,633)
Depreciation on property, plant and equipment and right-of-use assets (2,122,972) (296,782)
Fair value gain on contingent consideration - consideration shares 26 56,067 708,357
Fair value loss on financial assets at FVPL 16 (527,008) (31,878,000)
Other operating expenses (4,403,811) (5,189,507)
Finance charges 6 (90,710) (105,117)
Loss before income tax 7 (7,397,508) (34,851,996)
Income tax expense 9 - -
Loss for the period (7,397,508) (34,851,996)
Loss per share - basic and diluted (HK$) 10 (5.23 cents) (27.78 cents)
Loss for the period (7,397,508) (34,851,996)
Other comprehensive income/(expense), net of tax
Items that may be reclassified subsequently to profit or loss: 733,281 (204,651)
Exchange differences on translation of financial statements of foreign 733,281 (204,651)
operations
Total comprehensive loss for the period (6,664,227) (35,056,647)
The accompanying notes form an integral part of these consolidated financial
statements.
Condensed consolidated statement of financial position
as at 30 September 2024
Notes As at As at
30 September 2024
31 March 2024
(unaudited) (audited)
HK$ HK$
ASSETS
Non-current assets
Goodwill 12 1,001,089 759,289
Intangible assets 13 22,546,033 23,513,372
Property, plant and equipment 14 406,264 457,213
Right-of-use assets 15 264,395 503,955
Loan receivables 19 3,257,981 3,257,981
27,475,762 28,491,810
Current assets
Financial assets at FVPL 16 490,240 1,017,248
Deposit and prepayments 18 3,105,749 2,980,887
Trade and other receivables 18 31,607,191 34,862,948
Cash and cash equivalents 20 16,250,880 19,318,967
51,454,060 58,180,050
Current liabilities
Trade and other payables 21 12,464,899 14,488,885
Borrowings 22 4,150,497 4,539,862
Lease liabilities 23 271,368 412,284
Tax payables 115,868 111,030
Convertible loan note 24 31,034,278 35,402,946
48,036,910 54,955,007
Net current assets 3,417,150 3,225,043
Non-current liabilities
Lease liabilities 23 - 65,529
Contingent consideration - consideration shares 26 16,301 70,486
16,301 136,015
Net assets 30,876,611 31,580,838
EQUITY
Share capital 25 32,112,391 29,925,945
Share premium 53,102,641 49,329,087
Group reorganisation reserve 589,836 589,836
Convertible loan note reserve 2,957,651 2,957,651
Translation reserve 1,057,012 323,731
Accumulated losses (58,942,920) (51,545,412)
Total equity 30,876,611 31,580,838
The accompanying notes form an integral part of these consolidated financial
statements.
Condensed consolidated statement of changes in equity
for the six months ended 30 September 2024
Share Share premium Translation Group reorganisation reserve Convertible Accumulated Total
capital reserve loan note losses
reserve
HK$ HK$ HK$ HK$ HK$ HK$ HK$
At 31 March 2023 and at 1 April 2023 (audited) 28,801,920 16,576,592 589,836 (14,664,972) 31,032,152
(271,224) -
Loss for the period - - - (34,851,996) (34,851,996)
- -
Exchange difference on consolidation - - - - (204,651)
(204,651) -
Total comprehensive expense - - - (34,851,996) (35,056,647)
(204,651) -
Issue of share capital 827,475 15,849,145 - - - 16,676,620
-
At 30 September 2023 (unaudited) 29,629,395 32,425,737 589,836 (49,516,968) 12,652,125
(475,875) -
At 31 March 2024 and at 1 April 2024 (audited) 29,925,945 49,329,087 589,836 (51,545,412) 31,580,838
323,731 2,957,651
Loss for the period - - - - (7,397,508) (7,397,508)
-
Exchange difference on consolidation - - - - - 733,281
733,281
Total comprehensive expense - - - - - (6,664,227)
733,281
Issue of share capital 2,186,446 3,773,554 - - - - 5,960,000
At 30 September 2024 (unaudited) 32,112,391 53,102,641 589,836 2,957,651 (58,942,920) 30,876,611
1,057,012
The accompanying notes form an integral part of these consolidated financial
statements.
Condensed consolidated statement of cash flows
for the six months ended 30 September 2024
Six months ended Six months ended
30 September 2024 30 September 2023
(unaudited) (unaudited)
HK$ HK$
Cash flows from operating activities
Loss before income tax (7,397,508) (34,851,996)
Adjustments for:
Amortisation of intangible assets 1,821,534 800,392
Depreciation of property, plant and equipment 61,879 65,862
Depreciation of right-of-use assets 239,559 230,920
Fair value loss on financial assets at FVPL 527,008 31,878,000
Fair value gain on contingent consideration (56,067) (708,357)
Bank interest income (231,140) (93,544)
Finance charges 90,710 105,117
Operating cashflow before working capital changes (4,944,025) (2,573,606)
Increase/ (Decrease) in trade and other receivables 834,431 (610,205)
Decrease in deposit and prepayments (108,003) (828,139)
Increase in loan receivables - (1,970,000)
(Decrease)/ Increase in trade and other payables (1,996,936) 16,387,854
Net cash (used in)/ from operating activities (6,214,533) 10,405,904
Cash flow from investing activities
Acquisition of intangible assets - (1,664,733)
Acquisition of property, plant and equipment (9,185) (54,500)
Net cash outflow for the acquisition of subsidiaries (230,000) (545,826)
Interest received 231,140 93,544
Proceeds from convertible loan note receivable 4,053,333 -
Net cash from/ (used in) investing activities 4,045,288 (2,171,515)
Cash flow from financing activities
Interest paid (79,355) (89,417)
Repayment of bank borrowings (389,365) (377,312)
Rental paid for lease liabilities (217,800) (236,300)
Net cash used in financing activities (686,520) (703,029)
Net (decrease)/ increase in cash and cash equivalents (2,855,765) 7,531,360
Effect of exchange rate changes (212,322) (277,840)
Cash and cash equivalents at beginning of the period 19,318,967 9,548,364
Cash and cash equivalents at the end of the period 16,250,880 16,801,884
The accompanying notes form an integral part of these consolidated financial
statements.
Notes to the condensed consolidated financial statements
for the six months ended 30 September 2024
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 equity shares (transition) category (formerly 'standard list
(shares)' category) 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,
remittance and payment services, provision of media production services and
money lending services.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
On 31 December 2020, the International Financial Reporting Standards ("IFRS")
as adopted by the European Union at that date were brought into UK law and
became the 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 the 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
an 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 2024 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
ISA 21 Amendments - Lack of exchangeability 1 January 2025
IFRS 9 & IFRS 7 Amendments - Classification and measurement of financial instruments 1 January 2026
Annual Improvement Project Annual improvements to IFRS accounting standards - Volume 11 1 January 2026
IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027
IFRS 19 Subsidiaries without Public Accountability: Disclosures 1 January 2027
IFRS 10 & IAS 28 Amendments - Sales or contribution of assets between an investor and its To be determined
associate/joint venture
2.3 Going Concern
The Group meets its day-to-day working capital requirement through use of cash
reserves and bank borrowings. The directors of the Company (the "Directors")
have considered the applicability of the going concern basis in the
preparation of the consolidated financial statements. This included a review
of forecasts that show that the Group should be able to sustain its operations
within the level of its current debt and equity funding arrangements. The
Directors have reasonable expectation that the Group has adequate resources to
continue operations for the foreseeable future and for this reason they have
adopted the going concern basis in the preparation of the consolidated
financial statements.
The Group incurred a total comprehensive loss of HK$6,664,227 for the six
months ended 30 September 2024. This condition indicates the existence of an
uncertainty which may cast 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.
On the other hand, the remittance service fee and top-up service fees earned
by RCPAY Limited (Hong Kong and UK) from Regal Crown Technology Limited's new
large customer, Junca Japan LLC, is expected to provide approximately
USD280,000 for the 18 months ended 30 June 2025 for the MasterCard Whitelabel
program. The business development team expects that there will be another 3-4
sizeable customers similar to Junca Japan LLC from the Japan region to enroll
for the MasterCard Whitelabel program in the coming 6 to 9 months.
Accordingly, the Directors have a reasonable expectation that the Group has
adequate resources to continue operation for the foreseeable future for the
reason they have adopted a going concern basis in the preparation of the
consolidated financial statements.
2.4 Basis of consolidation
i) Business combination not under common control
The Group applies the acquisition method to account for business combinations
not under common control. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity interest issued
by the Group, as appropriate. The consideration transferred also includes the
fair value of any asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination not under common control is
measured initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
Allocation of total comprehensive income
Profit or loss and each component of other comprehensive income are attributed
to the owners of the Company and to the non-controlling interests (if
applicable). Total comprehensive income is attributed to the owners of the
Company and the non-controlling interest (if applicable) even if this results
in the non-controlling interest having a deficit balance. The results of
subsidiaries are consolidated from the date on which the Group obtains control
and continue to be consolidated until the date that such control ceases.
ii) Merger accounting for common control combinations
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 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.
On 28 June 2022 and 7 November 2022, the Group acquired 100% equity interest
of RCPay Ltd (Hong Kong) ("RCPay HK"), Regal Crown Technology (Singapore) Pte
Ltd ("RC Singapore") and RCPAY Limited ("RCPay UK"), respectively from Mr. Law
Chi Kit. As RCPay HK, RC Singapore, RCPAY UK 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
intra-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 presentational 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 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 Contingent consideration
Contingent consideration to be transferred by the Group as the acquirer in a
business combination is recognised at acquisition-date fair value. Subsequent
adjustments to consideration are recognised against goodwill only to the
extent that they arise from new information obtained within the measurement
period (a maximum of 12 months from the acquisition date) about the fair value
at the acquisition date. The subsequent accounting for changes in the fair
value of the contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration is classified.
Contingent consideration that is classified as equity is not remeasured at
subsequent reporting dates and its subsequent settlement is accounted for
within equity. Contingent consideration that is classified as an asset or a
liability is remeasured at subsequent reporting dates with the corresponding
gain or loss being recognised in profit or loss.
2.7 Goodwill
Goodwill arising on an acquisition of a subsidiary is measured at the excess
of the consideration transferred, the amount of any non-controlling interest
in the acquiree and the fair value of any previously held equity interests in
the acquiree over the acquisition date amounts of the identifiable assets
acquired and the liabilities assumed of the acquired subsidiary.
Goodwill on acquisition of subsidiary is recognised as a separate asset and is
carried at cost less accumulated impairment losses, which is tested for
impairment annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired. For the purpose of
impairment test and determination of gain or loss on disposal, goodwill is
allocated to cash-generating units ("CGU"). An impairment loss on goodwill is
not reversed.
On the other hand, any excess of the acquisition date amounts of identifiable
assets acquired and the liabilities assumed of the acquired subsidiary over
the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree and the fair value of the acquirer's previously held
interest in the acquiree, if any, after reassessment, is recognised
immediately in profit or loss as an income from bargain purchase.
Any resulting gain or loss arising from remeasuring the previously held equity
interests in the acquiree at the acquisition-date fair value is recognised in
profit or loss or other comprehensive income, as appropriate.
Goodwill impairment reviews are undertaken annually or more frequently if
events or changes in circumstances indicate a potential impairment. The
carrying value of goodwill is compared to the recoverable amount, which is the
higher of value in use and the fair value less costs of disposal. Any
impairment is recognised immediately as an expense and is not subsequently
reversed.
2.8 Property, plant and equipment
Property, plant and equipment (other than cost of right-of-use assets as
described in 2.12) 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 20% 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.
2.9 Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are
carried at costs less accumulated amortisation and accumulated impairment
losses. Amortisation is recognised on a straight-line basis over their
estimated useful lives. The estimated useful lives and amortisation method are
reviewed at the end of each reporting period, with the effect of any changes
in estimate being accounted for on a prospective basis. Intangible assets with
indefinite useful lives that are acquired separately are carried at cost less
accumulated impairment losses.
Research and development expenditure
Expenditure on research activities is recognised as an expense in the period
in which it is incurred.
An internally-generated intangible asset arising from development (or from the
development phase of an internal project) is recognised if, and only if, all
of the following have been demonstrated:
• the technical feasibility of completing the intangible asset so
that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell
it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic
benefits;
• the availability of adequate technical, financial and other
resources to complete the development and to use or sell the intangible asset;
and
• the ability to measure reliably the expenditure attributable to
the intangible asset during its development.
The amount initially recognised for an internally-generated intangible asset
is the sum of the expenditure incurred from the date when the intangible asset
first meets the recognition criteria listed above. Where no
internally-generated intangible asset can be recognised, development
expenditure is recognised to profit or loss in the period in which it is
incurred.
Subsequent to initial recognition, internally-generated intangible assets are
reported at cost less accumulated amortisation and accumulated impairment
losses, on the same basis as intangible assets that are acquired separately.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic
benefits are expected from use or disposal. Gains and losses arising from
derecognition of an intangible asset, measured as the difference between the
net disposal proceeds and the carrying amount of the asset, are recognised in
profit or loss when the asset is derecognised.
2.10 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:
1) 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
2) those to be measured at fair value through profit or loss (FVPL)
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.
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 financial assets carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. For trade receivables, the 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, borrowings and contingent consideration.
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.
Convertible loan note
The component of the convertible loan note that exhibits characteristics of a
liability is recognised as a liability in the statement of financial position,
net of issue costs. The corresponding dividends on those shares are charged as
interest expense in profit or loss.
On the issue of the convertible loan note, the fair value of the liability
component is determined using a market rate for a similar note that does not
have a conversion option; and this amount is carried as a long-term liability
on the amortised cost basis until extinguished on conversion or redemption.
The remainder of the proceeds is allocated to the conversion option that is
recognised and included in the convertible loan note equity reserve within
shareholders' equity, net of issue costs. The value of the conversion option
carried in equity is not changed in subsequent years. When the conversion
option is exercised, the balance of the convertible loan note equity reserve
is transferred to share capital or other appropriate reserve. When the
conversion option remains unexercised at the expiry date, the balance remained
in the convertible loan note equity reserve is transferred to accumulated
profits/losses. No gain or loss is recognised in profit or loss upon
conversion or expiration of the option.
Issue costs are apportioned between the liability and equity components of the
convertible loan note based on the allocation of proceeds to the liability and
equity components when the instruments are first recognised. Transaction costs
that relate to the issue of the convertible loan note are allocated to the
liability and equity components in proportion to the allocation of proceeds.
2.11 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.
2.12 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 assesses 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 months or less.
On the consolidated statement of financial position, right-of-use assets and
lease liabilities have been presented separately.
2.13 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.
2.14 Revenue recognition
Revenue arises mainly from contracts for IT software development during the
period.
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.
Remittance and payment service fee income
Remittance and payment service fee income are recognised at the time the
related services are rendered.
Media production service income
Media production service income is recognised on an appropriate basis over the
relevant period in which the services are rendered.
Interest income
Interest income is recognised on a time-proportion basis using the effective
interest method.
Contract assets and contract liabilities
If the Group performs by transferring goods or services to a customer before
the customer pays consideration or before payment is due, the contract is
presented as a contract asset, excluding any amounts presented as a
receivable. Conversely, if a customer pays consideration, or the Group has a
right to an amount of consideration that is unconditional, before the Group
transfers a good or service to the customer, the contract is presented as a
contract liability when the payment is made or the payment is due (whichever
is earlier). A receivable is the Group's right to consideration that is
unconditional or only the passage of time is required before payment of that
consideration is due.
For a single contract or a single set of related contracts, either a net
contract asset or a net contract liability is presented. Contract assets and
contract liabilities of unrelated contracts are not presented on a net basis.
For certain services provided by the Group, in accordance with the underlying
service agreements which are negotiated on a case-by-case basis with customer,
the Group may receive from the customer the whole or some of the contractual
payments before the services are completed or when the goods are delivered
(i.e. the timing of revenue recognition for such transactions). The Group
recognises a contract liability until it is recognised as revenue. During that
period, any significant financing components, if applicable, will be included
in the contract liability and will be expensed as accrued unless the interest
expense is eligible for capitalisation.
2.15 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.
2.16 Impairment of non-financial assets
Property, plant and equipment (including right-of-use assets), intangible
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 purposes 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.
2.17 Employee benefits
Retirement benefits
Retirement benefits to employees are provided through defined contribution
plans.
The Group participates in various defined contribution retirement benefit
plans which are available to all relevant employees. These plans are generally
funded through payments to schemes established by governments or
trustee-administered funds. A defined contribution plan is a pension plan
under which the Group pays contributions on a mandatory, contractual or
voluntary basis into a separate fund. The Group has no legal or constructive
obligations to pay further contributions if the fund does not hold sufficient
assets to pay all employees the benefits relating to employee services in the
current and prior years. The Group's contributions to the defined contribution
plans are recognised as an expense in profit or loss as employees render
services during the reporting period.
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.
2.18 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.
2.19 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.
2.20 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.
2.21 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. During the period, in
the opinion of the Directors, there is only one reportable operating segment,
i.e. the IT software development in Hong Kong due to its significant portion
of operation among all business activities.
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 judgements 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.
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.
Fair value measurements and valuation processes
Some of the Group's financial assets and liabilities are measured at fair
value for financial reporting purposes.
In estimating the fair value of an asset or a liability, the Group uses
market-observable data to the extent it is available. Where Level 1 and Level
2 inputs are not available, the Group engages an independent firm of
professional valuers to perform the valuation. In relying on the valuation
report, the Directors have exercised their judgement and are satisfied to
establish the appropriate valuation techniques and inputs to the model. The
fluctuation in the fair value of the assets and liabilities is reported and
analysed periodically.
The Group uses valuation techniques that include inputs that are not based on
observable market data to estimate the fair value of certain types of
financial instruments. Judgement and estimation are required in establishing
the relevant valuation techniques and the relevant inputs thereof. Whilst the
Group considers these valuations are the best estimates, the ongoing changes
in market conditions that may result in greater market volatility and may
cause further disruptions to the investees'/issuers' businesses, which have
led to higher degree of uncertainties in respect of the valuations in the
current year. Changes in assumptions relating to these factors could result in
material adjustments to the fair value of these consolidated financial
instruments. Detailed information about the valuation techniques, inputs and
key assumptions used in the determination of the fair value of various assets
and liabilities are set out in notes 16, 26 and 28.6.
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis.
This requires an estimation of the value in use of the CGU to which the
goodwill is allocated. Estimating the value in use requires the management to
choose a suitable valuation model and make estimation of the key valuation
parameter and other relevant business assumptions.
4. REVENUE
The Group is engaged in provision of IT software development and payment
solutions, remittance and payment services, provision of media production
services and money lending services. Revenue was principally derived from IT
software development and payment solutions for both periods.
5. OTHER INCOME
30 September 2024 30 September 2023
(unaudited) (unaudited)
HK$ HK$
Government subsidy (note) 684,458 -
Sundry income 375,372 143,291
Interest income 231,140 93,544
1,290,970 236,835
Note: During the six months ended 30 September 2024, the Group received
funding support amounting to HK$684,458 from the Hong Kong Productivity
Council relating to the Dedicated Fund on Branding, Upgrading and Domestic
Sales ("BUD Fund"). The purpose of the funding is to provide financial support
to enterprises in developing brands, upgrading and restructuring operations
and promoting sales in the Free Trade Agreement (FTA) and/or Investment
Promotion and Protection Agreement (IPPA) economies, so as to enhance their
competitiveness and facilitate their business development in the FTA and/or
IPPA economies.
6. FINANCE CHARGES
30 September 2024 30 September 2023
(unaudited) (unaudited)
HK$ HK$
Finance charges on lease liabilities 11,355 15,700
Interest on bank borrowings 79,355 89,417
90,710 105,117
7. LOSS BEFORE INCOME TAX
Loss before income tax is arrived at after charging:
30 September 2024 30 September 2023
(unaudited) (unaudited)
HK$ HK$
Auditor's remuneration - -
Subcontracting fee paid 2,365,189 1,600,066
Amortisation of intangible assets 1,821,534 800,392
Depreciation
- Property, plant and equipment 61,879 65,862
- Right-of-use assets 239,559 230,920
8. DIRECTORS' EMOLUMENTS
Details of directors' emoluments are set out as follows:
30 September 2024 30 September 2023
(unaudited) (unaudited)
HK$ HK$
Fees - -
Other emoluments 1,761,715 2,272,756
1,761,715 2,272,756
9. INCOME TAX EXPENSE
30 September 2024 30 September 2023
(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 for both periods.
No provision for Hong Kong Profits Tax has been made as the Hong Kong
subsidiaries have no assessable profits for taxation purpose for both periods.
No provision for Singapore corporation tax has been made as the Singapore
subsidiary has no assessable profits for taxation purpose for both periods.
No provision for Malaysia corporation tax has been made as the Malaysia
subsidiary has no assessable profits for taxation purpose for both periods.
10. LOSS PER SHARE
30 September 2024 30 September 2023
(unaudited) (unaudited)
HK$ HK$
Loss attributable to equity shareholders (7,397,508) (34,851,996)
Weighted average number of ordinary share 141,418,518 125,441,183
Loss per share in HK$:
Basic (5.23 cents) (27.78 cents)
Diluted (5.23 cents) (27.78 cents)
There were no potential dilutive ordinary shares in existence during the six
months ended 30 September 2024 and 2023, and hence diluted earnings per share
is the same as the basic earnings per share.
11. EMPLOYEE BENEFIT EXPENSES (including directors'
emoluments)
30 September 2024 30 September 2023
(unaudited) (unaudited)
HK$ HK$
Staff costs
Salaries and other benefits 4,586,225 3,390,921
Pension costs - defined contribution plan 124,690 109,712
Housing allowances 940 -
Staff benefit 4,711,855 3,500,633
12. GOODWILL
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Cost and net carrying amount
At beginning of the reporting period 759,289 -
Additions 241,800 759,289
At the end of the reporting period 1,001,089 759,289
Goodwill was derived from the acquisition of 100% equity interests in Mr. Meal
Production Limited ("Mr. Meal") and its subsidiary (together the "Mr. Meal
Group") at an aggregate consideration of HK$2,000,000 in July 2023. The excess
of the consideration transferred over the acquisition-date fair values of the
identifiable assets acquired and the liabilities assumed of HK$759,289 is
recognised as goodwill. At 30 September 2024, the Group assessed the
recoverable amount of the goodwill with reference to the cash flow projection
of Mr. Meal for the next twelve months and determined that no impairment for
goodwill was required.
In addition, goodwill was derived from the acquisition of 100% equity
interests in HC Capital Group Limited ("HC Capital") at an aggregate
consideration of HK$230,000 in July 2024. The excess of the consideration
transferred over the acquisition-date fair values of the identifiable assets
acquired and the liabilities assumed of HK$241,800 is recognised as goodwill.
At 30 September 2024, the Group assessed the recoverable amount of the
goodwill with reference to the cash flow projection of HC Capital for the next
twelve months and determined that no impairment for goodwill was required.
13. INTANGIBLE ASSETS
Development cost HK$
Cost
At 31 March 2024 and 1 April 2024 26,703,636
Exchange realignment 939,600
At 30 September 2024 27,643,236
Accumulated amortisation
At 31 March 2024 and 1 April 2024 3,190,264
Charge for the period 1,821,534
Exchange realignment 85,405
At 30 September 2024 5,097,203
Net Book Value
At 30 September 2024 22,546,033
At 31 March 2024 23,513,372
The above intangible assets have definite useful lives. Such intangible assets
are amortised on a straight-line basis over 5 years and 10 years.
14. PROPERTY, PLANT AND EQUIPMENT
Office Leasehold Furniture & Total
equipment improvement fixtures
HK$ HK$ HK$ HK$
Cost
At 1 April 2023 273,004 - 31,000 304,004
Addition - - 65,380 65,380
Acquisition of a subsidiary 433,099 100,000 - 533,099
Written off (45,040) - (5,199) (50,239)
Exchange realignment - 1,474 - 1,474
At 31 March 2024 (audited) 661,063 101,474 91,180 853,718
Addition - - 9,185 9,185
Exchange realignment - 2,429 - 2,429
At 30 September 2024 (unaudited) 661,063 103,903 100,365 865,332
Accumulated Depreciation
At 1 April 2023 240,057 - 2,890 242,947
Charge for the year 83,610 20,448 11,154 115,212
Acquisition of a subsidiary 38,499 - - 38,499
Exchange realignment - (153) - (153)
At 31 March 2024 (audited) 362,166 20,295 14,044 396,505
Charge for the period 41,651 10,191 10,037 61,879
Exchange realignment - 684 - 684
At 30 September 2024 (unaudited) 403,817 31,170 24,081 459,068
Net Book Value
At 30 September 2024 (unaudited) 257,246 72,733 76,284 406,264
At 31 March 2024 (audited) 298,897 81,179 77,137 457,213
15. RIGHT-OF-USE ASSETS
Lease assets HK$
Cost
At 1 April 2023 981,425
Additions 746,470
Written off (906,683)
At 31 March 2024 (audited) 821,212
Additions -
At 30 September 2024 (unaudited) 821,212
Accumulated Depreciation
At 1 April 2023 776,741
Charge for the year 384,045
Written off (843,528)
At 31 March 2024 (audited) 317,258
Charge for the period 239,559
At 30 September 2024 (unaudited) 556,817
Net Book Value
At 30 September 2024 (unaudited) 264,395
At 31 March 2024 (audited) 503,954
16. FINANCIAL ASSETS AT FVPL
As at As at
30 September 2024 31 March 2024
(unaudited) (audited)
Notes HK$ HK$
Equity investments listed in Hong Kong 16(a) 490,240 1,017,248
(a) On 22 February 2023, the Company as issuer entered into a share
subscription agreement with Hatcher Group Limited (a company listed on the
Growth Enterprise Market of the Hong Kong Stock Exchange, stock code: 8365)
(the "Subscriber" or "Hatcher Group"), pursuant to which the Subscriber
conditionally agreed to subscribe for, and the Company conditionally agreed to
issue and allot, an aggregate of 18,000,000 shares at the subscription price
of £0.19 per subscription share for a total consideration of £3,420,000 (the
"Subscription"). The consideration for the Subscription was to be settled by
the Subscriber by way of the issue and allotment of an aggregate of 38,640,000
shares of the Subscriber at the issue price of HK$0.90 per share to the
Company upon completion of the Subscription.
The Subscription was completed on 17 April 2023 and the consideration was
settled by way of issue and allotment of an aggregate of 38,640,000 shares of
the Subscriber at the issue price of HK$0.90 each, totalling HK$34,776,000.
The fair values of the equity investments were determined on the basis of
quoted market bid price at the end of the reporting period.
During the six months ended 30 September 2024, fair value loss on equity
investments of HK$527,008 was recognised in profit or loss.
Details of the fair value measurements are set out in note 26 to the
consolidated financial statements.
17. INTERESTS IN SUBSIDIARIES
Particulars of the Company's subsidiaries as at 30 September 2024 are as
follows:
Name of subsidiary Place/country of incorporation and operations Particulars of issued and paid-up share/ registered capital Percentage of interest held by the Company Principal activities
Directly Indirectly
Regal Crown Technology Limited Hong Kong HK$10,300,001 100% - IT software development
RCPay Ltd (Hong Kong) Hong Kong HK$10,000 100% - Prepaid card consultancy services and licensed money service operation
Regal Crown Technology (Singapore) Pte Ltd Singapore SGD100,000 100% - IT consultancy and consultancy management services
RC365 Global Limited British Virgin Islands USD50,000 - 100% Finance and treasury centre of the Group
RCPAY Limited England and Wales GBP 1 100% - Provision of exchange and remittance services and licensed small payment
services
Mr. Meal Production Limited Hong Kong HK$ 11,111 100% - Provision of media production services
美得妙 (珠海)文化傳播有限公司 The People's Republic of China CNY100,000 - 100% Media production
RC365 Solution Sdn. Bhd. Malaysia RM 1 100% - Business management consultancy services
Cast Great Investments Limited British Virgin Islands USD 1 100% - Investment
holding
HC Capital Group Limited Hong Kong HK$ 10,000 - 100% Provision of money lending services
18. TRADE AND OTHER RECEIVABLES AND DEPOSIT AND PREPAYMENT
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Trade receivables 1,439,330 2,349,282
Other receivables 30,167,861 32,513,666
Deposit and prepayment 3,105,749 2,980,887
34,712,940 37,843,835
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.
As at 30 September 2024 and 31 March 2024, 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.
19. LOAN RECEIVABLES
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Receivables:
within one year - -
in the second to fifth years inclusive 3,300,000 3,300,000
3,300,000 3,300,000
Less: Amount shown under current assets - -
Balance due after one year 3,300,000 3,300,000
Less: Impairment losses (42,019) (42,019)
3,257,981 3,257,981
The loans to independent third parties are unsecured, bearing interest at 10%
(31 March 2024: 10%) per annum and with fixed terms of repayment. The
Directors consider that the fair values of the loan receivables are not
materially different from their carrying amounts.
20. CASH AND CASH EQUIVALENTS
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Cash and bank balances 16,250,880 19,318,967
21. TRADE AND OTHER PAYABLES
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Trade payables 2,018,980 1,751,682
Accrued charges and other payables 1,326,289 2,215,699
Contract liabilities 6,707,725 8,424,227
Amount due to a director 2,411,905 2,097,277
12,464,899 14,488,885
The amount due to a director is unsecured, interest free and has no fixed term
of repayment.
Contract liabilities represent receipt in advance from a customer in relation
to its projects placed with the Group. Changes in contract liabilities
primarily relate to the Group's performance of services under the projects.
All amounts are short-term and hence the carrying values of trade and other
payables are considered not materially different from their fair values.
22. BORROWINGS
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Bank loans - secured: 4,150,497 4,539,862
Presented by:
- Carrying amount repayable on demand or within one year 800,192 785,841
- Carrying amount repayable after one year with repayment on 3,350,305 3,754,021
demand clause
4,150,497 4,539,862
Less: Amount shown under current liabilities (4,150,497) (4,539,862)
Non-current liabilities - -
Bank borrowings are variable interest bearing borrowings which carry interest
at 2.5% below Prime Rate per annum. At 30 September 2024 and 31 March 2024,
the banking facilities were secured by the joint and several guarantees given
by Mr. Law Chi Kit, the ultimate controlling party of the Company.
23. LEASE LIABILITIES
The following table shows the remaining contractual maturities of the lease
liabilities:
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Total minimum leases payments:
Due within one year 277,200 432,300
Due in the second to fifth years - 66,000
277,200 498,300
Future finance charges on lease liabilities (5,832) (20,487)
Present value of lease liabilities 271,368 477,813
Present value of liabilities:
Due within one year 271,368 412,284
Due in the second to fifth years - 65,529
271,368 477,813
Less: Portion due within one year included under current liabilities (271,368) (412,284)
Portion due after one year included under non-current liabilities - 65,529
The Group entered into lease arrangements for 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.
24. CONVERTIBLE LOAN NOTE
The convertible loan note liability and equity recognised at the end of the
reporting period are calculated as follows:
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Liability component
At the beginning of the period 35,402,946 -
Fair value of liabilities component at date of issue - 35,265,495
Interest expenses - -
Conversion of convertible loan note (5,960,000) -
Exchange realignment 1,591,332 137,451
31,034,278 35,402,946
Portion classified as non-current - -
Current portion 31,034,278 35,402,946
Equity component
At the beginning of the period 2,957,651 -
Fair value of convertible loan note at date of issue - 2,957,651
Conversion of convertible loan note - -
2,957,651 2,957,651
On 2 March 2024, the Group entered into an unsecured convertible loan note
with an independent third party (the "lender" or "Noteholder"). The
convertible loan note bears no interest with nominal value of GBP4,000,000.
The Group may redeem all of the convertible loan note outstanding by paying to
the Noteholder in immediately available cleared funds an amount equal to 120%
of the outstanding amount of the convertible loan note.
The fair values of the liability component and the equity conversion component
were determined at issuance of the convertible loan note. The fair value of
the liability component was calculated using cash flows and payoffs discounted
at a market interest rate. The value of the conversion option, representing
the value of equity component, is credited to a convertible loan note reserve.
The market interest rate is based on comparable bonds with similar credit
rating and maturity. It is assumed to be constant along the holding period of
the convertible loan note. The fair value assessment of the convertible loan
note was performed by an independent professional valuer.
For more details of the terms of convertible loans, please refer to the
Company's announcement dated 4 March 2024.
25. SHARE CAPITAL
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Issued and fully paid:
At the beginning of the period 29,925,945 28,801,920
Issue of shares 2,186,446 1,124,025
At the end of the period 32,112,391 29,925,945
On 3 April 2023, the Company issued and allotted 8,500,000 shares at £0.19
each to the Subscriber and the Subscription was completed in April 2023.
On 7 September 2023, 3,000,000 shares at £0.58 each were issued and allotted
by the Company to the Subscriber.
On 3 April 2024, pursuant to the convertible loan note agreement, 2,023,439
shares of the Company were issued and allotted at £0.01 each to the
Subscriber.
On 23 April 2024, pursuant to the convertible loan note agreement, 3,409,090
shares of the Company were issued and allotted at £0.01 each to the
Subscriber.
On 15 May 2024, pursuant to the convertible loan note agreement, 5,357,143
shares of the Company were issued and allotted at £0.01 each to the
Subscriber.
On 26 June 2024, pursuant to the convertible loan note agreement, 4,507,211
shares of the Company were issued and allotted at £0.01 each to the
Subscriber.
On 21 August 2024, pursuant to the convertible loan note agreement, 6,578,947
shares of the Company were issued and allotted at £0.01 each to the
Subscriber.
26. ACQUISITION OF SUBSIDIARIES
a) Acquisition of Mr. Meal Group
On 12 July 2023 (the "Completion Date"), the Group entered into sale and
purchase agreements (the "Agreement") with certain independent third parties
(the "Vendors") pursuant to which the Group and the Vendors both agree to
acquire/ sell the entire equity interests of Mr. Meal Group (the "Mr. Meal
Acquisition"). Mr. Meal Group is primarily engaged in the provision of media
production services.
Pursuant to the Agreement, the consideration of the Mr. Meal Acquisition is to
be satisfied by the Group as follows:
(i) Initial consideration
HK$1,000,000 to be paid in cash on completion of the Group being registered as
the sole shareholder of Mr. Meal with the Companies Registry in Hong Kong and
all the existing key employees shall have entered into the retention agreement
with Mr. Meal;
(ii) Contingent consideration
HK$1,000,000 to be settled by the allotment of 915 new ordinary shares
(determined according to the closing price of the Company's shares listed on
the London Stock Exchange on the Completion Date) of the Company (the
"Consideration Shares"). The Consideration Shares are contingent on the
retention of key employees for a 12-month period and if satisfied will be
issued 18 months after the Completion Date of the Mr. Meal Acquisition.
Details of the carrying amounts of the assets and liabilities of Mr. Meal
Group at the date of acquisition are as follows:
At 12 July 2023
HK$
Consideration
Cash paid 1,000,000
Contingent consideration - Consideration Shares 1,000,000
2,000,000
Recognised amounts of identifiable assets acquired and liabilities assumed
Property, plant and equipment 494,600
Deposits and prepayments 36,099
Trade and other receivables 1,047,000
Cash and cash equivalents 454,174
Trade and other payables (791,162)
Net assets of Mr. Meal Group 1,240,711
Goodwill arising on acquisition 759,289
Net cash outflow arising on the acquisition:
HK$
Cash consideration paid (1,000,000)
Cash and cash equivalents acquired 454,174
(545,826)
The value of the Consideration Shares is mainly based on the trading price of
the Company and the relevant indicators, which considered as significant
inputs to the valuation. At 30 September 2024, the fair value of the
Consideration Shares was estimated to be HK$16,301.
The movements of the Consideration Shares are as follows:
HK$
Initial recognition on 12 July 2023 1,000,000
Fair value changes (874,478)
Exchange realignments (55,036)
At 31 March 2024 70,486
Fair value changes (56,067)
Exchange realignments 1,882
At 30 September 2024 16,301
b) Acquisition of HC Capital
On 22 July 2024 (the "Completion Date"), the Group entered into sale and
purchase agreements (the "Agreement") with certain independent third parties
(the "Vendors") pursuant to which the Group and the Vendors both agree to
acquire/ sell the entire equity interests of HC Capital at a cash
consideration of HK$230,000. HC Capital is a licensed money service provider
and primarily engaged in the provision of money lending services in Hong Kong.
The difference between the cash consideration and the carrying amount of the
net liabilities of HC Capital at the completion date is recognised in goodwill
amounting to HK$241,800.
Details of the carrying amounts of the assets and liabilities of HC Capital at
the date of acquisition are as follows:
At 22 July 2024
HK$
Consideration
Cash paid 230,000
Recognised amounts of identifiable assets acquired and liabilities assumed
Other receivables 10,000
Deposit and prepayments 27,000
Other payables (48,800)
Net liabilities of HC Capital (11,800)
Goodwill arising on acquisition 241,800
Net cash outflow arising on the acquisition:
HK$
Cash consideration paid (230,000)
Cash and cash equivalents acquired -
(230,000)
27. MAJOR NON-CASH TRANSACTIONS
Following note 25 to the financial statements, pursuant to the convertible
loan note agreement, 21,875,830 shares had been issued and allotted by the
Company to the Subscriber during the period from 1 April 2024 to 30 September
2024. As a result, there was an increase in share capital of HK$2,186,446 and
share premium of HK$3,773,554, respectively.
28. FINANCIAL RISK MANAGEMENT AND FAIR VALUE MEASUREMENTS
The Group is exposed to financial risks through its use of financial
instruments in its ordinary course of operations and in its investment
activities. The financial risks include market risk (including foreign
currency risk and interest rate risk), credit risk and liquidity risk.
There has been no change to the types of the Group's exposure in respect of
financial instruments or the manner in which it manages and measures the
risks.
28.1 Categories of financial assets and liabilities
The carrying amounts presented in the consolidated statement of financial
position relate to the following categories of financial assets and financial
liabilities:
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Financial assets
Financial assets at fair value
- Financial assets at FVPL 490,240 1,107,248
Financial assets at amortised costs
- Trade receivables 1,439,330 2,349,282
- Other receivables 30,167,861 32,513,666
- Deposit and prepayment 1,292,628 1,682,543
- Loan receivables 3,257,281 3,257,981
- Cash and cash equivalents 16,250,880 19,318,967
52,898,220 60,229,687
30 September 2024 31 March 2024
(unaudited) (audited)
HK$ HK$
Financial liabilities
Financial liabilities at amortised cost
- Trade payables 2,018,980 1,751,682
- Accrued charges and other payables 206,974 -
- Receipt in advance 6,707,725 8,424,227
- Amounts due to a director 2,411,905 2,097,277
- Leases liabilities 271,368 477,812
- Borrowings 4,150,497 4,539,862
- Convertible loan note 31,034,278 35,402,946
46,801,727 52,693,806
28.2 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.
28.3 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$41,505 (loss for the year ended 31 March 2024: increase/ decrease
HK$45,399). This is mainly attributable to the Group's exposure to interest
rates on its variable-rate bank borrowings.
28.4 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 2024
refers to the carrying amount of financial assets as disclosed in note 28.1.
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 IFRS 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 2024 and year ended 31 March
2024 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,
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, 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 considered 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.
28.5 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.
Carrying Within Over 1 year Total
amount 1 year or but within contractual
on demand 5 years undiscounted
Over 5 years cash flow
HK$ HK$ HK$ HK$ HK$
30 September 2024
- Trade and other payables 3,345,269 3,345,269 - - 3,345,269
- Amount due to a director 2,411,905 2,411,905 - - 2,411,905
- Leases liabilities 271,368 277,200 - - 277,200
- Bank borrowings 4,150,497 937,440 3,593,520 - 4,530,960
- Convertible loan note 31,034,278 31,034,278 - - 31,304,278
41,213,317 38,006,092 3,593,520 - 41,869,612
31 March 2024
- Trade and other payables 3,967,381 3,967,381 - - 3,967,381
- Amounts due to a director 2,097,277 2,097,277 - - 2,097,277
- Leases liabilities 477,812 432,300 66,000 - 498,300
- Bank borrowings 4,539,862 937,440 4,062,240 - 4,999,680
- Convertible loan note 35,402,946 35,402,946 - - 35,402,946
46,485,278 42,837,344 4,128,240 - 46,965,584
28.6 Fair values measurement
The following presents the assets and liabilities measured at fair value or
required to disclose their fair value in the consolidated financial statements
on a recurring basis across the three levels of the fair value hierarchy
defined in IFRS 13 "Fair Value Measurement" with the fair value measurement
categorised in its entirety based on the lowest level input that is
significant to the entire measurement. The levels of inputs are defined as
follows:
• Level 1 (highest level): quoted prices (unadjusted) in active
markets for identical assets or liabilities that the Group can access at the
measurement date;
• Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly;
• Level 3 (lowest level): unobservable inputs for the asset or
liability.
(a) Assets and liabilities measured at fair value
Equity investment listed in Hong Kong classified as financial assets at FVPL
of HK$490,240 was categorised under Level 1 fair value measurement.
Consideration shares classified as contingent consideration of HK$16,301 was
categorised under Level 1 fair value measurement.
During the year, there were no transfers between Level 1 and Level 2, nor
transfers into and out of Level 3 fair value measurements.
(b) Assets and liabilities with fair value disclosure, but not measured at
fair value
The carrying amounts of financial assets and liabilities that are carried at
amortised costs are not materially different from their fair values at the end
of each reporting period.
29. 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.
31. STRIKE OFF OF A SUBSIDIARY
During the period from 1 April 2024 to 30 September 2024, RC365 Business
Advisory Limited was struck off on 25 April 2024. This subsidiary did not
contribute to the profit or loss of the Group for the period from 1 April 2024
to 30 September 2024.
32. CAPITAL COMMITMENTS
There were no capital commitments at 30 September 2024.
33. POST BALANCE SHEET EVENTS
On 21 November 2024, the Company completed the divestiture of the entire
issued share capital of RCPay Ltd (Hong Kong) for a cash consideration of
HK$400,000.
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