REG - RC365 Holding PLC - Interim Report
23/12/2022 07:00
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RNS Number : 6319K RC365 Holding PLC 23 December 2022
23 December 2022
RC365 Holding Plc
("RC365" or the "Company")
Interim Results for the six months ended 30 September 2022
RC365 Holding Plc ("RC365"), a company focusing on payment gateway solutions
and IT support and security services, is pleased to announce the publication
of its interim results for the six months ended 30 September 2022.
Period Highlights
· Completion of the acquisition of RCPAY Limited (Hong Kong) and Regal
Crown Technology (Singapore) Pte Limited in June 2022
· Successful soft launch of the Catch AR service
· Revenue up by 292.6% to HKD7.9m (Half Year 2021: HKD2.7m)
· Trade and other receivables at HKD1.3m (Full Year 2022: HKD1.0m)
· Cash balance as at 30 September 2022 HKD16.6m (As at 31 March 2022:
HKD23.4m)
Post period highlights
· Completion of the acquisition of RCPAY Limited (UK)
· Opportunities to enter into a co-operation agreement with a well-known
Software and Application Development company in Hong Kong
For further information please contact:
RC365 Holding plc T: +852 2251 1621
Chi Kit LAW, Chief Executive Officer E: ir@rc365plc.com
Guild Financial Advisory Limited - Financial Adviser T: +44 (0)7973 839767
Ross Andrews E: ross.andrews@guildfin.co.uk
The CEO's report
Overview
The Group has completed two major acquisitions in June 2022 by acquiring the
entire issued share capital of RCPAY Limited (Hong Kong) and Regal Crown
Technology (Singapore) Pte Limited and a further acquisition post period end
in November 2022 of RCPAY Limited (UK). These acquisitions offer an abundance
of growth opportunities for the Group by expanding the presence in Hong Kong,
Singapore, UK and other ASEAN countries and offering local and cross border
payment solutions to existing and potential clients located in those regions.
The Group has enjoyed a stable growth in terms of revenue and the number of
clients during the last 6 month. With the soft launch of the Catch AR in the
last quarter, the Group has generated revenue and positive cash flow for this
new service.
Summary of Trading Results
Revenue in the period was HKD7.9 million (2021: HKD2.7million), which
represents an increase of 292%. The Group made a loss after tax of HKD3.0
million (2021: profit after tax of HKD0.5Million). The cash balance for the
Group was HKD16.6 million (2021: HKD11.4 million) represents an increase of
46%. The Group continued to adopt prudent cost control whilst exploring
alternative revenue streams and business opportunities.
Outlook
The Group is actively exploring a number of opportunities by forming different
types of business relationships with corporates located in United Kingdom,
Singapore and Hong Kong.
The Group expects to introduce different marketing campaigns designed to
promote the Company's Catch AR and Maid Maid Matching offerings in the coming
6 months, which the Board expects to provide opportunities for the continued
growth for the Group's target markets.
The Group is exploring an opportunity to enter a co-operation agreement with a
well-known Software and Application Development company in Hong Kong. The
focus of such a co-operation agreement will be the development of an
all-rounded Enterprise Resource Planning (ERP) software which can be sold to
existing and potential clients. The ERP software is expected to encompass
administrative, payroll, sale and purchase functions together with a payment
function to enable subscriber to increase the effectiveness and efficiency of
their operations. The Group expects to introduce the above services to
Singapore and Malaysia market in Q1 of 2023.
Responsibility Statement
We confirm that to the best of our knowledge:
a) The condensed set of financial statements has been prepaid in accordance
with IAS34 "Interim Financial Reporting";
b) The interim management account includes a fair review of the information
required by DTR4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six month of the year); and
c) The interim management report includes a fair review of the information
required by DTR4.2.8R (disclosure of related parties' transactions and changes
therein).
Caution Statement
This Interim Management Report (IMR) has been prepared solely to provide
additional information to shareholders to assess the Company's strategies and
potential for those strategies to succeed. The IMR should not be relied on by
any other party or for any other purpose.
The condensed accounts have not been reviewed by the auditors.
Chi Kit LAW
Chief Executive Officer
Date: 23rd December 2022
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive
Income
for the six months ended
30 September 2022
Six months ended Six months ended
30 September 2022 30 September 2021
(unaudited) (unaudited)
Notes HK$ HK$
Revenue 4 7,924,000 2,700,000
Cost of sales (5,524,354) -
Gross profit 2,399,646 2,700,000
Other income 5 248,443 11,207
Subcontracting fee paid (669,883) (300,000)
Staff costs (1,987,750) (1,123,537)
Depreciation on property, plant and equipment and right-of-use assets (313,249) (390,900)
Other operating expenses (2,587,316) (382,112)
Finance charges 6 (80,337) (13,946)
(Loss)/ Profit before income tax 7 (2,990,446) 500,712
Income tax expense 9 - -
(Loss)/ Profit for the period (2,990,446) 500,712
(Loss)/ Profit per share - basic and diluted (HK$) 10 (2.78 cents) 0.67 cents
(Loss)/ Profit for the period (2,990,446) 500,712
Other comprehensive expense, net of tax
Items that may be reclassified subsequently to profit or loss: (396,559) -
Exchange differences on translation of financial statements of foreign (396,559) -
operations
Total comprehensive (expense)/ income for the period (3,387,005) 500,712
The accompanying notes form an integral part of these consolidated financial
statements.
Condensed Consolidated Statement of
Financial Position
as at 30 September 2022
Notes As at As at
30 September 2022
31 March 2022
(unaudited) (audited)
HK$ HK$
ASSETS
Non-current assets
Property, plant and equipment 12 353,550 141,720
Right-of-use assets 13 248,441 507,754
601,991 649,474
Current assets
Deposit and prepayment 15 110,865 152,875
Trade and other receivables 15 1,256,550 1,044,492
Loan receivables 16 3,000,556 700,000
Cash and cash equivalents 17 16,638,550 23,416,761
21,006,521 25,314,128
Current liabilities
Trade and other payables 18 151,326 643,138
Borrowings 19 5,674,470 5,800,000
Lease liabilities 20 252,018 515,158
6,077,814 6,958,296
Net current assets 14,928,707 18,355,832
Net assets 15,530,698 19,005,306
EQUITY
Share capital 21 11,500,995 11,500,995
Share premium 16,576,592 16,576,592
Group reorganisation reserve 662,873 750,476
Translation reserve (932,795) (536,236)
Accumulated losses (12,276,967) (9,286,521)
Total equity 15,530,698 19,005,306
The accompanying notes form an integral part of these consolidated financial
statements.
Condensed Consolidated Statement of
Changes in Equity
for the six months ended
30 September 2022
Share Share premium Translation Group reorganisation reserve Accumulated Total
capital reserve losses
HK$ HK$ HK$ HK$ HK$ HK$
At 31 March 2021 and at 1 April 2021 (audited) 10,300,001 - - (5,389,105) 4,910,896
-
Profit for the period - - - 500,712 500,712
-
Share for share exchange (2,203,751) - 2,203,751 - -
-
At 30 September 2021 (unaudited) 8,096,250 - 2,203,751 (4,888,393) 5,411,608
-
At 31 March 2022 and at 1 April 2022 (audited) 11,500,995 16,576,592 750,476 (9,286,521) 19,005,306
(536,236)
Loss for the period - - - (2,990,446) (2,990,446)
-
Exchange difference on consolidation - - - - (396,559)
(396,559)
Total comprehensive expense - - - (2,990,446) (3,387,005)
(396,559)
Acquisition of subsidiaries under common control - - - (87,603)
- (87,603)
At 30 September 2022 (unaudited) 11,500,995 16,576,592 662,873 (12,276,967) 15,530,698
(932,795)
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 2022
Six months ended Six months ended
30 September 2022 30 September 2021
(unaudited) (unaudited)
HK$ HK$
Cash flows from operating activities
(Loss)/ Profit before income tax (2,990,446) 500,712
Adjustments for:
Depreciation 313,249 390,900
Finance charges on lease liabilities 80,337 11,252
Operating cashflow before working capital changes (2,596,860) 902,864
(Decrease)/ Increase in trade and other receivables 1,114,598 (2,937,100)
Decrease in deposit and prepayment 42,011 -
Increase in amount due from a director (1,238,178) -
Increase in loan receivables (2,300,556) -
(Decrease)/ Increase in trade and other payables (989,733) 3,773,368
Net cash (used in)/ from operating activities (5,968,718) 1,739,132
Cash flows from investing activities
Acquisition of property, plant and equipment (248,660) (72,000)
Net cash inflow for the acquisition of subsidiaries 339,458 -
Net cash from/ (used in) investing activities 90,798 (72,000)
Cash flows from financing activities
Interest paid (79,608) (11,252)
Inception of bank borrowings - 5,800,000
Repayment of bank borrowings (125,530) -
Rental paid for lease liabilities (285,800) (376,054)
Net cash (used in)/ from financing activities (490,938) 5,412,694
Net (decrease)/ increase in cash and cash equivalents (6,368,858) 7,079,826
Effect of exchange rate changes (409,353) -
Cash and cash equivalents at beginning of the period 23,416,761 4,305,203
Cash and cash equivalents at the end of the period 16,638,550 11,385,029
The accompanying notes form an integral part of these consolidated financial
statements.
Notes to the Condensed Consolidated
Financial Statements
for the six months ended
30 September 2022
1. GENERAL INFORMATION
RC365 Holding Plc (the "Company") was incorporated as a private limited
company on 24 March 2021 in the United Kingdom (the "UK") under the Companies
Act 2006. The Company acted as a holding company and converted to a public
limited company on 22 September 2021. The address of the registered office is
Cannon Place, 78 Cannon Street, London, United Kingdom, EC4N 6AF. The Company
was listed on the Standard List of the London Stock Exchange ("LSE") on 23
March 2022.
The principal activity of the Company is to act as an investment holding
company. The Company together with its subsidiaries (the "Group") are mainly
engaged in provision of IT software development and Payment Solutions. There
were no significant changes in the nature of the Group's principal activities
during the period.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
On 31 December 2020, International Financial Reporting Standards ("IFRS") as
adopted by the European Union at that date was brought into UK law and became
UK-adopted International Accounting Standards, with future changes being
subject to endorsement by the UK Endorsement Board. RC365 Holding Plc adopted
the UK-adopted International Accounting Standards in its Group and parent
company financial statements for the current and comparative periods.
These Group and parent company financial statements were prepared in
accordance with UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards.
The financial statements of the Group and parent company have been prepared on
accrual basis and under historical cost convention. The financial statements
are presented in Hong Kong Dollars ("HK$"), which is the Group's functional
and presentational currency, and rounded to the nearest dollar.
2.2 New Standards and Interpretations
No new standards, amendments or interpretations, effective for the first time
for the period beginning on or after 1 April 2022 have had a material impact
on the Group and the parent company.
Standards, amendments and interpretations that are not yet effective and have
not been early adopted are as follows:
Standard Impact on initial application Effective date
IAS 1 Classification of liabilities as current or non-current Not earlier than 1 January 2024
IAS 1 Disclosure of accounting policies 1 January 2023
IAS 8 Accounting estimates 1 January 2023
IAS 12 Deferred tax related to assets and liabilities arising from a single 1 January 2023
transaction
IFRS 17 Insurance contracts 1 January 2023
2.3 Going Concern
The Group meets its day to day working capital requirement
through use of cash reserves and bank borrowings. The directors (the
"Directors") have considered the applicable of the going concern basis in the
preparation of the financial statements. This included review of forecasts
which show that the Group should be able to sustain its operation within the
level of its current debt and equity funding arrangements. The Directors have
reasonable expectation that the Group has adequate resources to continue
operation for the foreseeable future for the reason they have adopted to going
concern basis in the preparation of financial statement.
The Group incurred a loss of HK$2,990,446 for the six
months ended 30 September 2022. This condition indicates the existence of a
material uncertainty which may cast significant doubt on the Company's ability
to continue as a going concern. Therefore, the Company may be unable to
realise its assets. The financial statements do not include any adjustments
that would result if the Group was unable to continue as a going concern. The
COVID-19 pandemic has not constituted significant effect on the Group's
results for the six months ended 30 September 2022.
After careful consideration of the matters set out above, the
Directors are of the opinion that the Group will be able to undertake its
planned activities for the period to 30 September 2023 from debt and/or equity
fundings and have prepared the consolidated financial statements on a going
concern basis.
2.4 Basis of consolidation
The Company acquired its 100% interest in Regal Crown Technology Limited
("RCT") on 31 August 2021 by way of a share for share exchange. This is a
business combination involving entities under common control and the
consolidated financial statements are issued in the name of the Group but they
are a continuance of those of RCT. Therefore the assets and liabilities of
RCT have been recognised and measured in these consolidated financial
statements at their pre combination carrying values. The retained earnings and
other equity balances recognised in the comparative figure of the consolidated
financial statements are the retained earnings and other equity balances of
the Company and RCT. The equity structure appearing in the comparative
figure of these consolidated financial statements (the number and the type of
equity instruments issued) reflect the equity structure of the Company
including equity instruments issued by the Company to effect the
consolidation. The difference between consideration given and net assets of
RCT at the date of acquisition is included in a group reorganisation
reserve.
On 28 June 2022, the Group acquired 100% equity interest of RCPay Ltd (Hong
Kong) and Regal Crown Technology (Singapore) Pte Ltd from Mr. Law Chi Kit. As
RCPay Ltd (Hong Kong), Regal Crown Technology (Singapore) Pte Ltd and the
Group are under common control of Mr. Law Chi Kit before and after the
acquisition, the acquisition and the business combination have been accounted
for as a business combination under common control.
In the consolidated financial statements, the results of subsidiaries acquired
or disposed of during the period are included in the consolidated statement of
profit or loss and other comprehensive income from the effective date of
acquisition and up to the effective date of disposal, as appropriate.
Intra-group transactions, balances and unrealised gains and losses on
transactions between group companies are eliminated in preparing the
consolidated financial statements. Profits and losses resulting from the
inter-group transactions that are recognised in assets are also eliminated.
Amounts reported in the financial statements of subsidiaries have been
adjusted where necessary to ensure consistency with the accounting policies
adopted by the Group.
When the Group loses control of a subsidiary, the profit or loss on disposal
is calculated as the difference between (i) the aggregate of the fair value of
the consideration received and the fair value of any retained interest and
(ii) the previous carrying amount of the assets (including goodwill), and
liabilities of the subsidiary.
2.5 Foreign currency translation
In the individual financial statements of the consolidated entities, foreign
currency transactions are translated into the functional currency of the
individual entity using the exchange rates prevailing at the dates of the
transactions. At the reporting date, monetary assets and liabilities
denominated in foreign currencies are translated at the foreign exchange rates
ruling at that date. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the reporting date retranslation of
monetary assets and liabilities are recognised in profit or loss.
Non-monetary items carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing on the date when the fair
value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
In the consolidated financial statements, all individual financial statements
of foreign operations, originally presented in a currency different from the
Group's presentation currency, have been converted into Hong Kong dollars.
Assets and liabilities have been translated into Hong Kong dollars at the
closing rates at the reporting date. Income and expenses have been converted
into the Hong Kong dollars at the exchange rates ruling at the transaction
dates, or at the average rates over the reporting period provided that the
exchange rates do not fluctuate significantly. Any differences arising from
this procedure have been recognised in other comprehensive income and
accumulated separately in the translation reserve in equity.
On the disposal of a foreign operation (i.e., a disposal of the Group's entire
interest in a foreign operation, or a disposal involving loss of control over
a subsidiary that includes a foreign operation, loss of joint control over a
joint venture that includes a foreign operation, or loss of significant
influence over an associate that includes a foreign operation), all of the
accumulated exchange differences in respect of that operation attributable to
the Group are reclassified to profit or loss. Any exchange differences that
have previously been attributed to non-controlling interests are derecognised,
but they are not reclassified to profit or loss.
2.6 Property, plant and equipment
Property, plant and equipment (other than cost of right-of-use assets as
described in 2.9) are stated at acquisition cost less accumulated depreciation
and impairment losses. The acquisition cost of an asset comprises of its
purchase price and any direct attributable costs of bringing the assets to the
working condition and location for its intended use. Depreciation of assets
commences when the assets are ready for intended use.
Depreciation on property, plant and equipment, is provided to write off the
cost over their estimated useful life, using the straight-line method, at the
following rates per annum:
Furniture &
Fixtures
20% per annum
Leasehold
Improvement
4% per annum
Office
Equipment
20% per annum
The assets' depreciation methods and useful lives are reviewed, and adjusted
if appropriate, at each reporting date.
In the case of right-of-use assets, expected useful lives are determined by
reference to comparable owned assets or the lease term, if shorter. Material
residual value estimates and estimates of useful life are updated as required,
but at least annually.
The gain or loss arising on the retirement or disposal is determined as the
difference between the sales proceeds and the carrying amount of the asset and
is recognised in profit or loss.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced
part is derecognised. All other costs, such as repairs and maintenance, are
charged to profit or loss during the financial period in which they are
incurred.
2.7 Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
i) Classification
The Company classifies its financial assets in the following measurement
categories:
• those to be measured at amortised cost.
The classification depends on the Company's business model for managing the
financial assets and the contractual terms of the cash flows.
The Company classifies financial assets as at amortised cost only if both of
the following criteria are met:
• the asset is held within a business model whose objective is to collect
contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payment of
principal and interest
ii) Recognition
Purchases and sales of financial assets are recognised on trade date (that is,
the date on which the Company commits to purchase or sell the asset).
Financial assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Company has
transferred substantially all the risks and rewards of ownership.
iii) Measurement
At initial recognition, the Company measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through profit
or loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets
carried at FVPL are expensed in profit or loss.
Debt Instruments
Amortised cost: Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain
or loss arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange gains and
losses. Impairment losses are presented as a separate line item in the
statement of profit or loss.
(iv) Impairment
The Company assesses, on a forward looking basis, the expected credit losses
associated with any debt instruments carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. For trade receivables, the Company applies the simplified
approach permitted by IFRS 9, which requires lifetime expected credit losses
("ECL") to be recognised from initial recognition of the receivables.
The Group measures the loss allowance for other receivables equal to 12-month
ECL, unless when there has been a significant increase in credit risk since
initial recognition, the Group recognises lifetime ECL. The assessment of
whether lifetime ECL should be recognised is based on significant increase in
the likelihood or risk of default occurring since initial recognition.
Financial liabilities
The Group's financial liabilities include lease liabilities, trade and other
payables.
Financial liabilities are initially measured at fair value, and, where
applicable, adjusted for transaction costs unless the Group designated a
financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the
effective interest method except for derivatives and financial liabilities
designated at FVPL, which are carried subsequently at fair value with gains or
losses recognised in profit or loss (other than derivative financial
instruments that are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an instrument's
fair value that are reported in profit or loss are included within finance
costs or finance income.
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires.
Where an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amount is recognised
in profit or loss.
2.8 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
2.9 Lease
Definition of a lease and the Group as a lessee
At inception of a contract, the Group considers whether a contract is, or
contains a lease. A lease is defined as "a contract, or part of a contract,
that conveys the right to use an identified asset (the underlying asset) for a
period of time in exchange for consideration". To apply this definition, the
Group assesses whether the contract meets three key evaluations which are
whether:
- the contracts contain an identified asset, which is either explicitly
identified in the contract or implicitly specified by being identified at the
time the asset is made available to the Group;
- the Group has the right to obtain substantially all of the
economic benefits from use of the identified asset throughout the period of
use, considering its rights within the defined scope of the contract; and
- the Group has the right to direct the use of the identified
asset throughout the period of use. The Group assess whether it has the right
to direct "how and for what purpose" the asset is used throughout the period
of use.
For contracts that contain a lease component and one or more additional lease
or non-lease components, the Group allocates the consideration in the contract
to each lease and non-lease component on the basis of their relative
stand-alone prices.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a
lease liability on the consolidated statement of financial position. The
right-of-use asset is measured at cost, which is made up of the initial
measurement of the lease liability, any initial direct costs incurred by the
Group, an estimate of any costs to dismantle and remove the underlying asset
at the end of the lease, and any lease payments made in advance of the lease
commencement date (net of any lease incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from
the lease commencement date to the earlier of the end of the useful life of
the right-of-use asset or the end of the lease term unless the Group is
reasonably certain to obtain ownership at the end of the lease term. The Group
also assesses the right-of-use asset for impairment when such indicator
exists.
At the commencement date, the Group measures the lease liability at the
present value of the lease payments unpaid at that date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up
of fixed payments (including in-substance fixed payments) less any lease
incentives receivable, variable payments based on an index or rate, and
amounts expected to be payable under a residual value guarantee. The lease
payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payment of penalties for terminating
a lease, if the lease term reflects the Group exercising the option to
terminate.
Subsequent to initial measurement, the liability will be reduced for lease
payments made and increased for interest cost on the lease liability. It is
remeasured to reflect any reassessment or lease modification, or if there are
changes in in-substance fixed payments. The variable lease payments that do
not depend on an index or a rate are recognised as expense in the period on
which the event or condition that triggers the payment occurs.
When the lease is remeasured, the corresponding adjustment is reflected in the
right-of-use asset, or profit and loss if the right-of-use asset is already
reduced to zero.
The Group has elected to account for short-term leases using the practical
expedients. Instead of recognising a right-of-use asset and lease liability,
the payments in relation to these leases are recognised as an expense in
profit or loss on a straight-line basis over the lease term. Short-term leases
are leases with a lease term of 12 month or less.
On the consolidated statement of financial position, right-of-use assets and
lease liabilities have been presented separately.
2.10 Equity
• "Share capital" represents the nominal value of equity shares.
• "Share premium" represents the amount paid for equity shares over the
nominal value.
• "Translation reserve" comprises foreign currency translation differences
arising from the translation of financial statements of the Group's foreign
entities to HK$.
• "Group reorganisation reserve" arose on the group reorganisation.
• "Accumulated losses" include all current period results as disclosed in
the income statements.
No dividends are proposed for the period.
2.11 Revenue recognition
Revenue arises mainly from contracts for IT software development.
To determine whether to recognise revenue, the Group follows a 5-step process:
Step 1: Identifying the contract with a customer
Step 2: Identifying the performance obligations
Step 3: Determining the transaction price
Step 4: Allocating the transaction price to the performance obligations
Step 5: Recognising revenue when/as performance obligation(s) are satisfied
In all cases, the total transaction price for a contract is allocated amongst
the various performance obligations based on their relative stand-alone
selling prices. The transaction price for a contract excludes any amounts
collected on behalf of third parties.
Revenue is recognised either at a point in time or over time, when (or as) the
Group satisfies performance obligations by transferring the promised goods or
services to its customers.
Where the contract contains a financing component which provides a significant
financing benefit to the customer for more than 12 months, revenue is measured
at the present value of the amount receivable, discounted using the discount
rate that would be reflected in a separate financing transaction with the
customer, and interest income is accrued separately under the effective
interest method. Where the contract contains a financing component which
provides a significant financing benefit to the Group, revenue recognised
under that contract includes the interest expense accreted on the contract
liability under the effective interest method.
Further details of the Group's revenue and other income recognition policies
are as follows:
Services income
Revenue from IT software development is recognised over time as the Group's
performance creates and enhances an asset that the customer controls. The
progress towards complete satisfaction of a performance obligation is measured
based on input method, i.e. the costs incurred up to date compared with the
total budgeted costs, which depict the Group's performance towards satisfying
the performance obligation.
When the outcome of the contract cannot be reasonably measured, revenue is
recognised only to the extent of contract costs incurred that are expected to
be recovered.
Interest income
Interest income is recognised on a time-proportion basis using the effective
interest method.
2.12 Government grants
Grants from the government are recognised at their fair value where there is a
reasonable assurance that the grant will be received and the Group will comply
with all attached conditions. Government grants are deferred and recognised in
profit or loss over the period necessary to match them with the costs that the
grants are intended to compensate. Government grants relating to income is
presented in gross under other income in the condensed consolidated statement
of profit or loss and other comprehensive income.
2.13 Impairment of non-financial assets
Property, plant and equipment (including right-of-use assets) and the
Company's interests in subsidiaries are subject to impairment testing.
An impairment loss is recognised as an expense immediately for the amount by
which the asset's carrying amount exceeds its recoverable amount. Recoverable
amount is the higher of fair value, reflecting market conditions less costs of
disposal, and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessment of time value of money and the risk
specific to the asset.
For the purposes of assessing impairment, where an asset does not generate
cash inflows largely independent from those from other assets, the recoverable
amount is determined for the smallest group of assets that generate cash
inflows independently (i.e. a cash-generating unit). As a result, some
assets are tested individually for impairment and some are tested at
cash-generating unit level. Goodwill in particular is allocated to those
cash-generating units that are expected to benefit from synergies of the
related business combination and represent the lowest level within the Group
at which the goodwill is monitored for internal management purpose and not be
larger than an operating segment.
Impairment loss is charged pro rata to the other assets in the cash generating
unit, except that the carrying value of an asset will not be reduced below its
individual fair value less cost of disposal, or value in use, if determinable.
Impairment loss is reversed if there has been a favourable change in the
estimates used to determine the assets' recoverable amount and only to the
extent that the assets' carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
2.14 Employee benefits
Retirement benefits
Retirement benefits to employees are provided through defined contribution
plans.
The Group operates a defined contribution Mandatory Provident Fund retirement
benefit plan (the "MPF Scheme") under the Mandatory Provident Fund Schemes
Ordinance, for those employees who are eligible to participate in the MPF
Scheme. Contributions are made based on a percentage of the employees' basic
salaries.
Contributions are recognised as an expense in profit or loss as employees
render services during the year. The Group's obligations under the MPF
Scheme are limited to the fixed percentage contributions payable.
Short-term employee benefits
Liability for wages and salaries, including non-monetary benefits, annual
leave, long service leave and accumulating sick leave expected to be settled
within 12 months of the reporting date are recognised in other payables in
respect of employees' services up to the reporting date and are measured at
the amounts expected to be paid when the liabilities are settled.
2.15 Related parties
For the purposes of these consolidated financial statements, a party is
considered to be related to the Company if:
(a) the party is a person or a close member of that person's family and if
that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a
parent of the Group.
(b) the party is an entity and if any of the following conditions applies:
(i) the entity and the Group are members of the same group.
(ii) one entity is an associate or joint venture of the other entity (or
an associate or joint venture of a member of a group of which the other entity
is a member).
(iii) the entity and the Group are joint ventures of the same third party.
(iv) one entity is a joint venture of a third entity and the other entity
is an associate of the third entity.
(v) the entity is a post-employment benefit plan for the benefit of
employees of either the Group or an entity related to the Group.
(vi) the entity is controlled or jointly controlled by a person identified
in (a).
(vii) a person identified in (a)(i) has significant influence over the
entity or is a member of the key management personnel of the entity (or of a
parent of the entity).
(viii) the entity, or any member of a group of which it is a part, provides
key management personnel services to the Group or to the parent of the Group.
Close family members of an individual are those family members who may
expected to influence, or be influenced by, that individual in their dealings
with the entity.
2.16 Accounting for income taxes
Taxation comprises current tax and deferred tax.
Current tax is based on taxable profit or loss for the period. Taxable profit
or loss differs from profit or loss as reported in the income statement
because it excludes items of income and expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The asset or liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial information and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises
from initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, except where the Group is able to
control the reversal of the temporary differences and it is probable that the
temporary differences will not reverse in the foreseeable future.
Deferred tax is calculated, without discounting, at tax rates that are
expected to apply in the period the liability is settled or the asset
realised, provided they are enacted or substantively enacted at the reporting
date.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled, or the asset realised.
Deferred tax is charged or credited to profit or loss, except when it relates
to items charged or credited directly to equity, in which case the deferred
tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Company intends to settle its current tax assets and liabilities on a net
basis.
2.17 Earnings per ordinary share
The Company presents basic and diluted earnings per share data for its
ordinary shares.
Basic earnings per ordinary share is calculated by dividing the profit or loss
attributable to shareholders by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per ordinary share is calculated by adjusting the earnings
and number of ordinary shares for the effects of dilutive potential ordinary
shares.
2.18 Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-makers. The chief operating
decision-makers, who are responsible for allocating resources and assessing
performance of the operating segments, has been identified as the executive
board of Directors.
All operations and information are reviewed together so that at present there
is only one reportable operating segment
In the opinion of the Directors, during the period the Group operated in the
single business segment of IT software development.
3. KEY SOURCES OF ESTIMATION UNCERTAINTY
In the process of applying the Group's accounting policies which are described
in note 2, Directors have made the following judgement that might have
significant effect on the amounts recognised in the consolidated financial
statements. The key assumptions concerning the future, and other key sources
of estimation uncertainty at the statement of financial position date, that
might have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial period, are also
discussed below.
Depreciation
The Group depreciates the property, plant and equipment on a straight-line
basis at the rate 4 to 20% per annum commencing from the date the property,
plant and equipment are placed into productive use. The estimated useful lives
that the Group places the property, plant and equipment into use reflect the
Director's estimate of the periods that the Group intends to derive future
economic benefits from the use of the Group's property, plant and equipment.
Discount rate of lease liabilities and right-of-use assets determination
In determining the discount rate, the Group is required to exercise
considerable judgement in relation to determining the discount rate taking
into account the nature of the underlying assets, the terms and conditions of
the leases, at the commencement date and the effective date of the
modification. The Group's rate is referenced to the bank borrowing's interest
rate in Hong Kong.
4. REVENUE
The Group is engaged in provision of IT software development and Payment
Solutions
5. OTHER INCOME
30 September 2022 30 September 2021
(unaudited) (unaudited)
HK$ HK$
Government subsidy (note) 243,200 -
Sundry income 5,012 11,191
Interest income 231 16
248,443 11,207
Note: During the six months ended 30 September 2022, the Group received
funding support amount HK$243,200 from the Employment Support Scheme under the
Anti-epidemic Fund, set up by the Government of the Hong Kong Special
Administrative Region. The purpose of the funding is to provide financial
support to enterprises to retain their employees who would otherwise be made
redundant. Under the terms of the grant, the Group is required not to make
redundancies during the subsidy period and to spend all the funding on paying
wages to the employees.
6. FINANCE CHARGES
30 September 2022 30 September 2021
(unaudited) (unaudited)
HK$ HK$
Finance charges on lease liabilities 729 13,946
Interest on bank borrowings 79,608 -
80,337 13,946
7. (LOSS)/ PROFIT BEFORE INCOME TAX
(Loss)/ Profit before income tax is arrived at after charging:
30 September 2022 30 September
2021
(unaudited) (unaudited)
HK$ HK$
Auditor's remuneration - -
Subcontracting fee paid 669,883 300,000
Depreciation
- Property, plant and equipment 36,830 10,084
- Right-of-use assets 276,419 380,816
8. DIRECTOR'S EMOLUMENTS
Details of director's emoluments are set out as follows:
30 September 2022 30 September 2021
(unaudited) (unaudited)
HK$ HK$
Fees - -
Other emoluments 681,382 100,000
681,382 100,000
9. Income tax expense
30 September 2022 30 September 2021
(unaudited) (unaudited)
HK$ HK$
Tax expense for the period - -
No provision for UK corporation tax has been made as the Company has no
assessable profits for taxation purpose during the period (2021: Nil).
No provision for Hong Kong Profits Tax has been made as the Hong Kong
subsidiaries have no assessable profits. (2021: the Hong Kong subsidiary has
available tax losses brought forward from prior years to offset the assessable
profits generated during the period).
No provision for Singapore corporation tax has been made as the Singapore
subsidiary has no assessable profits.
10. EARNINGS PER SHARE
30 September 2022 30 September 2021
(unaudited) (unaudited)
HK$ HK$
(Loss)/ Profit attributable to equity shareholders (2,990,446) 500,712
Weighted average number of ordinary share 107,534,590 75,000,000
(Loss)/ Profit per share in HK$:
Basic (2.78 cents) 0.67 cents
Diluted (2.78 cents) 0.67 cents
There were no potential dilutive ordinary shares in existence during the six
months ended 30 September 2022 and 2021, and hence diluted earnings per share
is the same as the basic earnings per share.
11. EMPLOYEE BENEFIT EXPENSES (including directors' emoluments)
30 September 2022 30 September 2021
(unaudited) (unaudited)
HK$ HK$
Staff costs
Salaries and other benefits 1,864,012 1,029,337
Pension costs - defined contribution plan 123,738 94,200
Depreciation - right-of-use assets 63,469 380,816
Staff benefit 2,051,219 1,504,353
12. PROPERTY, PLANT AND EQUIPMENT
Office Leasehold Furniture & Total
equipment improvement fixtures
HK$ HK$ HK$ HK$
Cost
At 1 April 2021 300,053 240,400 80,134 620,587
Addition 72,000 - - 72,000
Disposal - (240,400) (80,134) (320,534)
At 31 March 2022 (audited) 372,053 - - 372,053
Addition 188,951 - 59,709 248,660
At 30 September 2022 (unaudited) 561,004 - 59,709 620,713
Accumulated Depreciation
At 1 April 2021 220,962 55,260 78,111 354,333
Charge for the period 9,371 9,616 1,313 20,300
Elimination on written off - (64,876) (79,424) (144,300)
At 31 March 2022 (audited) 230,333 - - 230,333
Charge for the period 32,579 - 4,251 36,830
At 30 September 2022 (unaudited) 262,912 - 4,251 267,163
Net Book Value
At 30 September 2022 (unaudited) 298,092 - 55,458 353,550
At 31 March 2022 (audited) 141,720 - - 141,720
13. RIGHT-OF-USE ASSETS
Lease assets HK$
Cost
As at 1 April 2021 and 31 March 2022 (audited) 1,523,265
Additions from acquisition of 461,391
subsidiaries under common
control
Termination of lease (1,523,265)
At 30 September 2022 (unaudited) 461,391
Accumulated Depreciation
At 1 April 2021 253,878
Charge for the period 761,633
At 31 March 2022 (audited) 1,015,511
Charge for the period 276,419
Termination of lease (1,078,980)
At 30 September 2022 (unaudited) 212,950
Net Book Value
At 30 September 2022 (unaudited) 248,441
At 31 March 2022 (audited) 507,754
14. INTERESTS IN SUBSIDIARIES
Particulars of the Company's subsidiaries as at 30 September 2022 are as
follows:
Name of subsidiary Place / country of incorporation and operations Particulars of issued and paid-up share / registered capital Percentage of Principal activities
interest held by the Company directly
Regal Crown Technology Limited Hong Kong HK$10,300,001 100% IT software development
RCPay Ltd (Hong Kong) ("RCPay HK") Hong Kong HK$10,000 100% Prepaid card consultancy services and licensed money service operation
Regal Crown Technology (Singapore) Pte Ltd Singapore SGD100,000 100% IT consultancy and consultancy management services
("RC Singapore")
15. TRADE AND OTHER RECEIVABLES AND DEPOSIT AND PREPAYMENT
30 September 2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Trade receivables - 680,000
Amount due from a director 1,238,178 -
Other receivables - 364,492
Due from related companies 18,372 -
Deposit and prepayment 110,865 152,875
1,367,415 1,197,367
Amount due from a director is unsecured, interest free and has no fixed term
of repayment.
The Directors of the Group considered that the fair values of trade and other
receivables and deposit and prepayment are not materially different from their
carrying amounts because these balances have short maturity periods on their
inception. As at 30 September 2022 and 31 March 2022, no ECL has been provided
for trade and other receivables and deposit and prepayment.
16. LOAN RECEIVABLES
30 September 2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Receivables within one year 3,000,556 700,000
The loans to independent third parties are unsecured, bearing interest at 0.1%
(31 March 2022: 0.1%) per annum and repayable in February 2023 (31 March 2022:
February 2023). The Directors consider that the fair values of the loan
receivables are not materially different from their carrying amounts.
17. CASH AND CASH EQUIVALENTS
30 September 2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Cash and bank balances 16,638,550 23,416,761
18. TRADE AND OTHER PAYABLES
30 September 2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Trade payables 6,428 408,000
Accrued charges and other payables 144,898 151,567
Receipt in advance - 19,000
Amount due to a director - 64,571
151,326 643,138
The amount due to a director is unsecured, interest free and have no fixed
term of repayment.
All amounts are short-term and hence the carrying values of trade and other
payables are considered not materially different from their fair values.
19. BORROWINGS
30 September 2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Bank loans - secured: 5,674,470 5,800,000
Presented by:
Repayable on demand or within one year 505,588 505,588
Repayable after one year with repayment on demand clause 5,168,882 5,294,412
5,674,470 5,800,000
Less: Amount shown under current liabilities (5,674,470) (5,800,000)
Non-current liabilities - -
Bank borrowings are variable interest bearing borrowings which carry interest
at 2.5% below Prime Rate per annum. At 30 September 2022 and 31 March 2022,
the banking facilities were secured by the guarantee given by Mr. Law Chi Kit,
the ultimate controlling party of the Company.
20. LEASE LIABILITIES
The following table shows the remaining contractual maturities of the lease
liabilities:
30 September 2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Total minimum leases payments:
Due within one year 255,382 520,000
Due in the second to fifth years - -
255,382 520,000
Future finance charges on lease liabilities (3,364) (4,842)
Present value of lease liabilities 252,018 515,158
Present value of liabilities:
Due within one year 252,018 515,158
Due in the second to fifth years - -
252,018 515,158
Less: Portion due within one year included under current liabilities (252,018) (515,158)
Portion due after one year included under non-current liabilities - -
The Group has entered into lease arrangements for staff quarter, car parking
space and office with contractual period of two years. The Group makes fixed
payments during the contract periods. At the end of the lease terms, the Group
does not have the option to purchase the properties and the leases do not
include contingent rentals.
During the six months ended 30 September 2022, the lease arrangement for staff
quarter has been terminated.
21. SHARE CAPITAL
30 September 2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Issued and fully paid:
At the beginning of the period 11,500,995 10,300,001
Issue of shares - 3,404,745
Group reorganisation - share exchange - (2,203,751)
At the end of the period 11,500,995 11,500,995
On 31 August 2021, in addition to the 100 ordinary shares of £0.01 issued in
RC365 Holding Plc, 74,999,900 ordinary shares of £0.01 each were allotted and
issued as consideration for the entire issued share capital of Regal Crown
Technology Limited via a share-for-share exchange. Such exercise resulted in a
transfer of share capital of HK$2,203,751 to the group reorganisation reserve.
On admission to the Standard List of LSE on 23 March 2022, 32,534,590 shares
with nominal value of £0.01 each were issued.
22. BUSINESS COMBINATION UNDER COMMON CONTROL
a) Acquisition of RCPay HK
On 28 June 2022, the Group acquired 100% equity interest in RCPay HK at a cash
consideration of £1 from the ultimate controlling party. As the Group and
RCPay HK are under the common control of Mr. Law Chi Kit before and after the
acquisition, the business combination has been accounted as a business
combination under common control.
The Group elects to account for the common control combination using the
pooling-of-interest method and the results of RCPay HK are consolidated by the
Group from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that such control
ceases.
The difference between the cash consideration and the carrying amount of the
net assets of RCPay HK at the completion date is recognised in group
reorganisation reserve amounting to HK$24,792.
Details of the carrying amounts of the assets and liabilities of RCPay HK at
the date of acquisition are as follows:
At 28 June 2022
HK$
Right-of-use assets 461,391
Trade and other receivables 73,600
Cash and cash equivalents 63,362
Trade and other payables (107,335)
Lease liabilities (466,216)
Net assets of RCPay HK 24,802
Merger reserve recognised (24,792)
10
Net cash inflow arising on the acquisition:
Consideration (10)
Cash and cash equivalents acquired 63,362
63,352
b) Acquisition of RC Singapore
On 28 June 2022, the Group acquired 100% equity interest in RC Singapore at a
cash consideration of £1 from the ultimate controlling party. As the Group
and RC Singapore are under the common control of Mr. Law Chi Kit before and
after the acquisition, the business combination has been accounted as a
business combination under common control.
The Group elects to account for the common control combination using the
pooling-of-interest method and the results of RC Singapore are consolidated by
the Group from the date of acquisition, being the date on which the Group
obtains control, and continue to be consolidated until the date that such
control ceases.
The difference between the cash consideration and the carrying amount of the
net liabilities of RC Singapore at the completion date is recognised in group
reorganisation reserve amounting to HK$112,395.
Details of the carrying amounts of the assets and liabilities of RC Singapore
at the date of acquisition are as follows:
At 28 June 2022
HK$
Trade and other receivables 14,879
Cash and cash equivalents 276,116
Trade and other payables (403,380)
Net liabilities of RC Singapore (112,385)
Merger reserve recognised 112,395
10
Net cash inflow arising on the acquisition:
Consideration (10)
Cash and cash equivalents acquired 276,116
276,106
23. MAJOR NON-CASH TRANSACTIONS
During the six months ended 30 September 2022, the Group early terminated the
financial lease arrangement in respect of a staff quarter, resulted in a
decrease in the right-of-use assets and lease liabilities of HK$444,285 and
HK$451,231, respectively.
24. FINANCIAL RISK MANAGEMENT AND FAIR VALUE MEASUREMENTS
The Group is exposed to financial risks through its use of financial
instruments in its ordinary course of operations and in its investment
activities. The financial risks include market risk (including foreign
currency risk and interest rate risk), credit risk and liquidity risk.
There has been no change to the types of the Group's exposure in respect of
financial instruments or the manner in which it manages and measures the
risks.
24.1 Categories of financial assets and liabilities
The carrying amounts presented in the consolidated statement of financial
position relate to the following categories of financial assets and financial
liabilities:
30 September 2022 31 March 2022
(unaudited) (audited)
HK$ HK$
Financial assets
Financial assets at amortised costs
- Trade receivables - 680,000
- Other receivables - 364,492
- Due from a director 1,238,178 -
- Due from related companies 18,372 -
- Deposit and prepayment 110,865 152,875
- Loan receivables 3,000,556 700,000
- Cash and cash equivalents 16,638,550 23,416,761
21,006,521 25,314,128
Financial liabilities
Financial liabilities at amortised cost
- Trade payables 6,428 408,000
- Accrued charges and other payables 144,898 151,567
- Receipt in advance - 19,000
- Amounts due to a director - 64,571
- Leases liabilities 252,018 515,158
- Borrowings 5,674,470 5,800,000
6,077,814 6,958,296
24.2 Foreign currency risk
Foreign currency risk refers to the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of changes in foreign
exchange rates. The Group has no significant exposure to foreign currency
risk as substantially all of the Group's transactions are denominated in the
functional currency of respective subsidiaries.
24.3 Interest rate risk
The Group has no significant interest-bearing assets. Cash at bank earns
interest at floating rates based on daily bank deposits rates.
The Group is exposed to cash flow interest rate risk in relation to
variable-rate bank borrowings. It is the Group's policy to keep its borrowings
at floating rate of interest to minimize the fair value interest rate risk.
The Group currently does not have hedging policy. However, the Directors
monitor interest rate exposure and will consider necessary action when
significant interest rate exposure is anticipated.
Sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to
interest rates for variable-rate borrowings. The analysis is prepared assuming
the borrowings outstanding at the end of the reporting period were outstanding
for the whole year. A 100 basis point increase or decrease is used when
reporting interest rate risk internally to Directors and represents Directors'
assessment of the reasonably possible change in interest rates. If interest
rates had been 100 basis point higher/lower and all other variables were held
constant, the Group's pre-tax loss for the period would increase/decrease by
HK$56,745 (profit for the year ended 31 March 2022: decrease/ increase
HK$58,000). This is mainly attributable to the Group's exposure to interest
rates on its variable-rate bank borrowings.
24.4 Credit risk
The Group's exposure to credit risk mainly arises from granting credit to
customers and other counterparties in the ordinary course of its operations.
The Group's maximum exposure to credit risk for the components of the
condensed consolidated statement of financial position at 30 September 2022
refers to the carrying amount of financial assets as disclosed in note 24.1.
The exposures to credit risk are monitored by the Directors such that any
outstanding debtors are reviewed and followed up on an ongoing basis. The
Group's policy is to deal only with creditworthy counterparties. Payment
record of customers is closely monitored. Normally, the Group does not obtain
collateral from debtors.
Trade receivables
The Group has applied the simplified approach to assess the ECL as prescribed
by HKFRS 9. To measure the ECL, trade receivables have been grouped based on
shared credit risk characteristics and the past due days. In calculating the
ECL rates, the Group considers historical elements and forward looking
elements. Lifetime ECL rate of trade receivables is assessed minimal for all
ageing bands as there was no recent history of default and continuous payments
were received. The Group determined that the ECL allowance in respect of trade
receivables for the period ended 30 September 2022 and year ended 31 March
2022 is minimal as there has not been a significant change in credit quality
of the customers.
Other financial assets at amortised cost
Other financial assets at amortised cost include deposits, other receivables,
amount due from a director, amounts due from related companies, loan
receivables and cash and cash equivalents.
The Directors are of opinion that there is no significant increase in credit
risk on deposits, other receivables, amount due from a director, amounts due
from related companies, loan receivables and cash and cash equivalents since
initial recognition as the risk of default is low after considering the
factors as following:
- any changes in business, financial or economic conditions that
affects the debtor's ability to meet its debt obligations;
- any changes in the operating results of the debtor;
- any changes in the regulatory, economic, or technological
environment of the debtor that affects the debtor's ability to meet its debt
obligations.
The Group has assessed that the ECL for deposits, other receivables and loan
receivables are minimal under the 12-months ECL method as there is no
significant increase in credit risk since initial recognition. The credit risk
with director and related parties is considered limited. The Directors have
assessed the financial position of the director and these related parties and
there is no indication of default.
The credit risk for cash and cash equivalents are considered negligible as the
counterparties are reputable banks with high quality external credit ratings.
24.5 Liquidity risk
Liquidity risk relates to the risk that the Group will not be able to meet its
obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset.
The Group's prudent policy is to regularly monitor its current and expected
liquidity requirements, to ensure that it maintains sufficient reserves of
cash and cash equivalents to meet its liquidity requirements in the short term
and longer term.
Analysed below are the Group's remaining contractual maturities for its
non-derivative financial liabilities as at the reporting date. When the
creditor has a choice of when the liability is settled, the liability is
included on the basis of the earliest date when the Group is required to
pay. Where settlement of the liability is in instalments, each instalment is
allocated to the earliest period in which the Group is committed to pay.
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 2022
- Trade and other payables 151,326 151,326 - - 151,326
- Leases liabilities 252,018 255,382 - - 255,382
- - Bank borrowings 5,674,470 923,124 3,692,496 1,692,394 6,308,014
6,077,814 1,329,832 3,692,496 1,692,394 6,714,722
31 March 2022
- Trade and other payables 559,567 559,567 - - 559,567
- Amounts due to a director 64,571 64,571 - - 64,571
- Leases liabilities 515,158 520,000 - - 520,000
- Bank borrowings 5,800,000 661,048 3,647,280 2,127,616 6,435,944
6,939,296 1,805,186 3,647,280 2,127,616 7,580,082
24.6 Fair values
The fair values of the Group's financial assets and financial liabilities are
not materially different from their carrying amounts because of the immediate
or short term maturity of these financial instruments.
25. CAPITAL MANAGEMENT
The Group's capital management objectives are to ensure its ability to
continue as a going concern and to provide an adequate return for shareholders
by pricing services commensurately with the level of risks.
The Group actively and regularly reviews and manages its capital structure and
makes adjustments in light of changes in economic conditions. In order to
maintain or adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, issue new shares or raises new debt financing.
26. EVENTS AFTER THE REPORTING PERIOD
On 1 November 2022, the Group has completed the acquisition of the entire
issued share capital of RCPAY Limited (UK). The consideration payable was £1.
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. END IR UUARRUKUUUAARecent news on RC365 Holding
See all newsREG - RC365 Holding PLC - Appointment of auditors
AnnouncementREG - RC365 Holding PLC - Directorate Change
AnnouncementREG - RC365 Holding PLC - Change of Adviser
AnnouncementREG - RC365 Holding PLC - Repayment of Convertible Loan Amount
AnnouncementREG - RC365 Holding PLC - Interim Results
Announcement