RC365 Holding plc.

Company Registration No. 13289422 (England and Wales)

RC365 HOLDING PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 MARCH 2024

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

COMPANY INFORMATION

Director

Chi Kit LAW, Executive Director and CEO

Timothy Wai Yiu TANG, Executive Director and CFO

Ajay Rajpal, Non Executive Director

Robert Cairns, Non Executive Director

Sunny Kwai Wan NG, Non Executive Director (resigned on 25 July 2023)

Company Number

13289422

Company Secretary

MSP Secretaries Limited

27-28 Eastcastle House

London, W1W 8DH

Registered address

Cannon Place

78 Cannon Street

London

United Kingdom

EC4N 6AF

Auditors

LB Group Limited

1 Vicarage Lane

London

England

E15 4HF

Company Solicitors (UK)

Chan Neill Solicitors

36 Upper Brook Street

London

W1K 7QJ

Financial Adviser

Guild Financial Advisory Limited

382 Russell Court

London

WC1H 0NH

Registrars

Share Registrars Limited

3 The Millennium Centre

Crosby Way

Surrey

GU9 7XX

Company Website

https://www.rc365plc.com/

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

CONTENTS

Page

Chairman’s Statement

3-5

Strategic Report

6-8

Board of Directors

9-10

Directors’ Report

11-19

Risk Management Report

20-22

Corporate Governance Statement

23-24

Audit Committee Report

25-26

Remuneration Committee Report

27-28

Independent Auditor’s Report

29-39

Consolidated Statement of Comprehensive Income

40-41

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

45-88

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

CHAIRMAN’S STATEMENT

I have great pleasure in presenting our audited financial statements to the shareholders of RC365 Holding

Plc (“RC365”, the “Company” or the “Group”) for the year ended 31 March 2024.

The Group delivered year-on-year revenue growth of 30% to HK$22.0 million (2023: HK$16.9 million),

reflecting increased sales across our business as well as the contribution from Mr. Meal Production

Limited (“Mr. Meal”) that we acquired during the year. The vast majority of Group revenue continued to

be generated by our wholly-owned Regal Crown Technology Limited (“RCTech”) subsidiary, where we

provide cutting-edge IT support and development for payment and financial systems, including Enterprise

Resource Planning (“ERP”) solutions, to SME clients in Hong Kong and the ASEAN region.

However, a growing proportion of revenue is being accounted for by our newer activities, in line with our

stated strategy, namely the provision of remittance and payment services, including foreign exchange and

premium card solutions, by RCPAY Limited (UK) and RCPAY Limited (HK) (“RCPAY UK” and “RCPAY HK”,

collectively “RCPAY”), licensed payment service providers in the United Kingdom (“UK”) and Hong Kong.

During the year, RCPAY handled approximately HK$47.0 million (2023: HK$0.9 million) in providing

payment and remittance services to clients (both individual and corporate) based in the UK and Asia.

The development of innovative products and services, as well as geographical expansion, to attract new

customers remained a key focus for the Group. A number of new partnerships were established during

the year to advance this goal.

Thanks to the increased revenue and improvement in gross margin to 99.6% (2023: 94.7%), operating loss

was significantly reduced to HK$3.9 million (2023: HK$5.3 million). Loss before tax was HK$36.8 million

(2023: HK$5.4 million), which reflects the fair value loss on an equity instrument – a non-cash expense.

We are also pleased to report a cash inflow from operating activities of HK$7.5 million compared with an

outflow of HK$6.0 million for 2023 and an increase in cash and cash equivalents to HK$19.3 million at year

end (31 March 2023: HK$9.5 million).

Now, let’s look at some of the major activities undertaken during the year in more detail.

Development of Artificial Intelligence

The Group entered an agreement with YouneeqAI Technical Services Inc (“YouneeqAI”), an artificial

intelligence based personalisation platform that improves customer experience (YQAI: OTC US). This

agreement gives RC365 the exclusive rights to YouneeqAI’s platform in the UK and a right for the first

refusal to purchase additional territories in the 24 months following the signing of the agreement. The

consideration is to be satisfied by the issue of 6,000,000 new Ordinary Shares, of which 3,000,000 were

issued on signing with the balance to be issued on or around 1 October 2024. In addition to the

consideration, YouneeqAI shall receive 1% of any and all gross revenue (excluding VAT) generated from

the use of the platform by RC365.

Development of Japan and Malaysia markets

A key development this year was our expansion into the Japanese and Malaysian markets, with RCPAY HK

and RCTech successfully attracting new customers in Japan and Malaysia, forming partnerships and the

Group establishing a Malaysian subsidiary. We signed agreements to issue and manage MasterCard card

services for a leading enterprise in Japan and for a well-known entity in Malaysia. RCPAY HK also signed a

memorandum of understanding with Koperasi Usaha Maju Kuala Berhad

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

(“KOMAJU”), a Malaysian organisation focused on helping its members embrace digital technology to

enhance their operational efficiency. Through this partnership, we will establish a collaborative platform

offering co-branded fintech solutions for corporate and SME clients, both domestically and on an

international basis. The Group had successfully secured eight new customers in Malaysia and Japan as at

the year end.

In addition, the Company established a new, wholly-owned subsidiary, RC365 Solutions Sdn Bhd, in

Malaysia. The new entity will enable the centralisation of the IT activities undertaken across the Group as

well as provide a base for further expansion in Malaysia and the ASEAN region.

Acquisition of Mr. Meal Production Limited

The Group acquired 100% of the issued share capital of Mr. Meal, a company providing media and

advertising services in Hong Kong, for a total consideration of HK$2.0 million, satisfied by a combination

of cash and the issue of new Ordinary Shares. The acquisition has assisted the Group’s entry into new

rapidly growing industries and has increased public awareness of the Group’s business activities, which

we intend to leverage as we expand our presence in the region.

Expansion of service offerings

RCPAY HK entered into agreements with Hong Kong based financial institutions, Unitrust Global Limited

and Key Solution Venture Limited (“KSV”). The agreement with Unitrust Global Limited enables RCPAY HK

to offer Custodian Accounts to its Hong Kong customers, attracting large corporates and high net worth

clients. The agreement with KSV permits RCPAY HK to issue branded cards in association with MasterCard

to Hong Kong residents. In addition to the agreements noted above with customers in Japan and Malaysia,

the Company has successfully issued over 1,100 cards to date.

Joint development of existing mobile application

RCTech signed an agreement with an associated company of Hatcher Group Limited (“Hatcher”) for the

development and upgrade of the Group’s existing RC2.0 App to an advanced RC3.0 App. The associated

company of Hatcher paid HK$15.0 million on signing the agreement and, following the upgrade, the

associated company of Hatcher and RC365 will be entitled to an equal share of any profit generated

through the operation of the RC3.0 App. Once launched, the RC3.0 App will provide users with additional

functionality, such as virtual banking facilities, enterprise resource planning and blockchain features.

RC2.5 was officially launched to the market in March 2024 and it is expected that the RC3.0 App will be

launched at the end of the 2024 calendar year.

Issuance of Convertible Loan Note

The Group entered into a Convertible Loan Note agreement with Mill End Capital for the issuance of up

to GBP4.0 million. In a high inflation environment and a 30-year high lending rate, the issuance of a

convertible note with zero interest rate is an attractive option in order to support the Group’s anticipated

CAPEX and OPEX growth plans. As at the date of the signing of this report, RC365 has drawn down GBP1.0

million of the facility of which GBP0.5 million has been converted through the issuance of new Ordinary

Shares.

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

STRATEGIC REPORT

The Directors present the Strategic Report of the Company for the year ended 31 March 2024.

Review of business and future developments

The Company was formed to undertake an acquisition of a controlling interest in a company or business.

With the Board’s experience, the Group is focused on the provision of IT Support and Security Services,

Payment Gateway Solutions (online and offline), Prepaid Card Issuance and Support Services and

Computer Graphic Design and Animation services to the clients located in the ASEAN region, UK and

Europe.

The Company is looking to expand the Prepaid Card Issuance Services, provision of virtual bank accounts

to high net worth Individuals and Corporates in the ASEAN region, including Hong Kong and Japan and

further to customers located in Europe and UK.

Key Performance Indicators

During the reporting period, the Company was focused on the evaluation of various opportunities in the

Fintech and Payment Gateway sector. The Directors track the following as the Company’s KPIs:

2024

HK$

2023

HK$

Revenue

22,029,649

16,883,359

Cash and cash equivalents

19,318,967

9,548,364

No. of Customers

•

Revenue

Reflects the element of billings generated and recognised during the period from all revenue streams

and measures the Group’s overall performance at a sales level.

•

Cash and cash equivalents

The Company’s cash balance provides a measure of the Group’s financial strength and self-sufficiency

to support operations while revenue streams continue to be developed.

•

Customers

The quantity of customers provides a basis to measure the growth and acceptance of the Company’s

services provided during the period.

Principal risks and uncertainties

The principal risks and uncertainties currently faced by the Company are set out further in the Risk

Management Report on page 20.

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

Corporate Social Responsibility

The Group aims to conduct its business with honesty, integrity and openness, respecting human rights

and the interests of shareholders and employees. The Group aims to provide timely, regular and reliable

information on the business to all its shareholders and conduct its operations to the highest standards.

The Group strives to create a safe and healthy working environment for the wellbeing of its staff and to

create a trusting and respectful environment, where all members of staff are encouraged to feel

responsible for the reputation and performance of the Group.

The Group aims to establish a diverse and dynamic workforce with team players who have the experience

and knowledge of the business operations and markets in which we operate. Through maintaining good

communications, members of staff are encouraged to realize the objectives of the Group and their own

potential.

Corporate environmental responsibility

The Board contains personnel with a good history of running businesses that have been compliant with

all relevant laws and regulations.

Section

172(1)

The Directors believe they have acted in the way most likely to promote the success of the Company for

the benefit of its members as a whole, as required by s172 of the Companies Act 2006.

The requirements of s172 are for the Directors to:

Consider the likely consequences of any decision in the long term;

Act fairly between the members of the Group;

Maintain a reputation for high standards of business conduct;

Consider the interest of the Group’s employees;

Foster the Group’s relationships with suppliers, customers and others; and

Consider the Impact of the Group’s operations and the community and the environment.

The Directors remain committed to engaging with the Group’s stakeholders and considering their

interests when making key strategic decisions. The Board considers its key stakeholders to be its

shareholders, its employees, its clients, its suppliers and the communities in which the Group

operates.

In the following section we identify our key stakeholders, how we engage with them and key activities we

have undertaken during the period in question.

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

BOARD OF DIRECTORS

Robert Cairns, Chairman and Non Executive Director

Mr. Robert Cairns, age 53, has over 25 years' experience in accounting and finance control and served in

senior positions at various private companies in the United Kingdom throughout his career. Robert is

currently the Finance Director and a member of the Board of Directors & Executive Committee of Les

Ambassadeurs Club. Robert graduated from Lancaster University with a Bachelor of Science Honours

degree in Geography and is a member of the Chartered Association of Management Accountants in the

United Kingdom.

Chi Kit Law, Executive Director and CEO

Mr. Law (Chinese name:

羅志杰

), age 43, has almost 20 years' of payment solution and banking leadership

experience, having previously held roles as Head of Banking Systems at MoneySwap plc and Assistant Vice

President of Group Technology and Operations at DBS Bank where he was awarded the Chairman's

Reward for each year he was there. Mr. Law was also awarded the JP Morgan Services Star Award. Mr.

Law has managed multi-national banking projects when he was at Standard Chartered Bank, HSBC, JP

Morgan Chase and DBS Bank. Mr. Law holds a Masters in Advanced Management from the University of

Liege and a Bachelor of Information Technology (Honours) from West Coast Institute of Management &

Technology, Perth, Western Australia.

Timothy Wai Yiu Tang, Executive Director and CFO

Mr. Tang

(Chinese name:

鄧煒堯

), aged 55, has held the role of Vice President, Finance of Regal Crown

Hong Kong since October 2020 and was promoted on 30 August 2022. Mr. Tang

has about 20 years of

audit and accountancy experience, having previously been a Partner at William Lee, Paul Tang & Co. and

a former senior Auditor at Ernst and Young. Mr. Tang

holds a Bachelor of Commerce in Accounting from

the University of New South Wales. Mr. Tang

is an associate member of CPA Australia and a member of

the Hong Kong Institute of Certified Public Accountants.

Ajay Rajpal, Non Executive Director

Mr. Ajay Rajpal, age 54 is a Chartered Accountant and member of the Institute of Chartered Accountants

in England & Wales (ICAEW). During his career, he has gained broad-ranging commercial experience

developed in the US, Europe, Middle East and Far East, with a particular focus on M&A, financial

management and insolvency/restructuring. Post qualification, Mr. Rajpal held a number of finance-related

roles which involved working for periods in the US, Europe, Middle East and Far East. Since 2011, Mr.

Rajpal has run his own consultancy business, NAS Corporate Services Ltd, providing companies with

various corporate services, such as assistance with their pre-IPO funding, the IPO process and post IPO

management. Mr. Rajpal assisted Grand Vision Media Holdings Plc, a special purpose acquisition company

listed on the standard segment of the London Stock Exchange, which successfully completed a reverse

takeover of an outdoor media business in Hong Kong/China. Mr. Rajpal is currently non-executive director

of Grand Vision (which continues to be listed on the standard segment).

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

Mr. Rajpal has also project managed the initial public offering process and assisted with the associated

funding of two businesses on AIM, namely New Trend Lifestyle Group Plc, which provides Feng Shui

products and services across Asia, and Zibao Metals Recycling Group Plc, a Hong Kong and China based

metals recycling company. He currently acts as a non-executive director for Phimedix Plc (formerly named

Zibao Metals Recycling Group Plc), and Dozens Savings Plc.

Kwai Wah Sunny Ng, Non Executive Director (resigned on 25 July 2023)

Mr. Kwai Wah Sunny Ng (Chinese name:

呉季驊

), age 45, has over 20 years' experience in corporate

restructuring, mergers and acquisitions, project financing, lending and investment management. He is the

founder and managing director of Davidsons Group, a business and private equity consultancy service

organization based in Hong Kong. He is an Executive Director of Times Universal Group Holdings Limited,

a company listed in the Hong Kong stock exchange. Mr. Ng graduated with a Bachelor of Commerce

degree in actual studies and accounting from the University of New South Wales. He is a member of both

the Certified Practising Accountants in Australia and the Hong Kong Institute of Certified Public

Accountants.

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

DIRECTORS’ REPORT

The Directors present their annual report together with the financial statements and the Auditor’s Report

for the year ended 31 March 2024.

Principal activities

The principal activity of the Company is to act as a holding company for a group of subsidiaries that are

involved in the IT software development sector.

The Group is a fintech solutions service provider based in Hong Kong and served customer in Greater

China, Japan, ASEAN countries with special focus in Malaysia and Singapore and United Kingdom and

Europe.

The subsidiaries of the Company providing IT and Security Services, ERP and prepaid card issuance and

supporting services to customers of the above region.

Results and dividends

The results of the Group for the year ended 31 March 2024 are set out in the financial statements.

The Directors do not propose to recommend a dividend for the year ended 31 March 2024. Given the

losses incurred to date, it is unlikely that the Board will recommend a dividend in the near-term.

Business review and future developments

Details of the business activities and developments made during the period can be found in the Strategic

Report.

Directors

The Directors of the Company who have served during the period and at the date of this report are:

Director

Role

Date of appointment

and resignation

Chi Kit LAW

Executive Director and CEO

Timothy Wai Yiu TANG

Executive Director and CFO

Robert CAIRNS

Chairman and Non Executive Director

Ajay RAJPAL

Non Executive Director

Kwai Wah Sunny NG

Non Executive Director

resigned on 25 July 2023

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

Diversity

The Company is committed to ensuring diversity, equality and inclusion and our goal is to foster a positive

work ethic. As at the date of this report, all four members of the board are male and therefore the targets

under LR 9.8.6 of 40% of the board being female and at least one of the four senior positions on the board

being occupied by a female have not been met. This is an area that remains under review by the

nomination committee.

Member of the Board

Ethnicity (Nationality)

Gender

Chi Kit LAW

Asian, Chinese

Male

Timothy Wai Yiu TANG

Asian, Chinese

Male

Robert CAIRNS

White, British

Male

Ajay RAJPAL

Black, British

Male

Directors’ interest in shares

The direct and beneficial shareholdings of the Board in the Company as at 31 March 2024 were as follows:

Number of Ordinary Shares

Percentage of Issued

Share Capital

Direct

Beneficial

Total

Chi Kit LAW *

64,000,000

49.80%

* Chi Kit Law holds his shares through LYS Limited.

Substantial

shareholders

As at the date of the Report, the total number of issued Ordinary Shares with voting rights in the Group

was 143,831,474. The Group has been notified of the following interests of 3 per cent or more in its issues

share capital as at the date of this report:

Number of ordinary

Percent of Issued share

capital

LYS Limited

64,000,000

44.50%

Going Concern

The Group's assets largely compromised of Cash at Bank and the ERP program (Intangible assets) for the

year ended 31 March 2024. The Directors have outlined their strategy for the Group in the Chairman's

Statement on page 3. As part of their assessment of going concern, the Directors have prepared cash

forecasts that show that the Group has sufficient cash resources for the next 12 months. It is proved that

the Group has ability to raise debt finance and equity finance for its operation and expansion.

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

Based on their enquiries and the information available to them and taking into account the other risks

and uncertainties set out herein, the Directors have a reasonable expectation that the Company and the

Group has adequate resources to continue operating for the foreseeable future. Thus, they continue to

adopt the going concern basis of accounting in preparing this financial information.

Events after the reporting period

On 8 April 2024, the Company issued 2,023,439 new Ordinary Shares of 1p each under the terms of the

Convertible Loan Note Agreement announced on 4 March 2024.

On 18 April 2024, Regal Crown Technology Limited, a wholly owned subsidiary of RC365 has received

conditional approval from The Trade and Industry Department of the Hong Kong SAR Government for a

grant of up to approximately HK$1 million. The funds will be used to facilitate the Company's projects in

Malaysia as it continues to expand operations within the region.

On 26 April 2024, the Company issued 3,409,090 new Ordinary Shares of 1p each under the terms of the

Convertible Loan Note Agreement announced on 4 March 2024.

On 20 May 2024, the Company issued 5,357,143 new Ordinary Shares of 1p each under the terms of the

Convertible Loan Note Agreement announced on 4 March 2024.

On 1 July 2024, the Company issued 4,507,211 new Ordinary Shares of 1p each under the terms of the

Convertible Loan Note Agreement announced on 4 March 2024.

Corporate Governance

The Group has set out is full Corporate Governance Statement on page 23. The Corporate Governance

Statement forms part of this Directors’ report and is incorporated into it by cross reference.

Statement of directors’ responsibilities

The directors are responsible for preparing the Directors’ Report and the financial statements in

accordance with applicable law and regulations.

Company law requires the directors to prepare Group and parent company financial statements for each

financial year. Under that law the directors have elected to prepare the financial statements in accordance

with UK adopted International Accounting Standards. Under company law the directors must not approve

the financial statements unless they are satisfied that they give a true and fair view of the state of affairs

of the group and company and of the group’s profit or loss for that period. In preparing these financial

statements, the directors are required to:

•

select suitable accounting policies and then apply them consistently;

•

make judgements and accounting estimates that are reasonable and prudent;

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

•

state whether they have been prepared in accordance UK adopted International Accounting

Standards

•

prepare the financial statements on the going concern basis unless it is inappropriate to presume

that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and

explain the company’s transactions and disclose with reasonable accuracy at any time the financial

position of the group and company. They are also responsible for safeguarding the assets of the group

and company and hence for taking reasonable steps for the prevention and detection of fraud and other

irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information

included on the Company’s website.

Emissions

The Group is not an intensive user of fossil fuels or electricity. As a result, it is not practical to determine

carbon emission with any degree of accuracy.

Supplier payment policy

It is the Group’s payment policy to pay suppliers in line with industry norms. These payables are paid on

a timely basis within contractual terms which is generally 30 to 60 days from date of receipt of invoice.

Branches outside the UK

The Group’s head office is in Hong Kong and the subsidiaries are located in Hong Kong, Malaysia, UK and

Singapore and Japan.

The Directors’ have chosen to produce a Strategic Report that discloses a fair review of the Group’s

business, the key performances metrics that the Directors review along with a review of the key risks to

the business.

Financial instruments and risk management

The Company is exposed to a variety of financial risks and the impact on the Company’s financial

instruments are summarized in the Risk Management Report. Details of the Company’s financial

instruments are disclosed in note 24 to the financial statements.

Environmental, social and Governance

A review of the Group’s approach to sustainability and societal impact during the year is set out below:

Climate Change

The Group recognise the importance of climate change triggered by Greenhouse Gases (GHG) from

burning fossil fuels.

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ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

Total emissions associated with activities under direct control of management (Scope 1 and 2 emissions)

remained at the same level in 2024 versus 2023. In terms of Energy efficiency, our energy usage was on

the same level in 2024 compared with 2023.

Environmental

The Group’s operations are conducted in such a manner that compliance is maintained with legal

requirements relating to the environment in areas where the Group conducts its business. During the

period covered by this report, the Group has not incurred any fines or penalties or been investigated for

any breach of environmental regulations.

The Directors consider that due to the nature of the Group’s operations. It does not have a significant

impact on the environment. However, the Group seeks to minimize its carbon impact and recognizes that

its activities should be carried out in an environmentally friendly manner where practicable.

The Group’s environment impact is under continual review and the Group considers related initiatives on

an ongoing basis. In 2024, these included: continued reduction of waste and, where practicable, re-use

and recycling of consumables; conducted reduction of energy, water and other resources.

Office Environments

Management engages with its office provider and its facilities management provider to ensure a safe

environment for our employees.

Environmental management is overseen by the Chief Executive Officer. RC365 Holding Plc complies with

the Companies Act 2006 (Strategic Report and Directors Report) Regulation 2013. We are also reporting

in compliance with the Companies (Directors’ Report) and Limited Liability Partnership (Energy and

Carbon Report) Regulations 2018 known as SECR (Streamlined Energy Carbon Reporting). Energy

consumption and GHG emissions have been calculated in line with the UK Government’s Environmental

Reporting Guidelines; including streamlined energy and carbon reporting guidance (March 2019). There

were no prosecutions or compliance notices for breaches of environmental legislation during the financial

year.

Supply Chain

We are committed to ensuring that there is no slavery or human trafficking in our supply chain or in any

part of our business. We maintain strong working relationship with our suppliers and partners, in order

to enhance the efficiency of our business and create value, and make sure we treat suppliers in line with

our values and ethical standards. We continually assess our supplier and partner network, and leverage

both internal and external expertise to ensure appropriate relationship and fair economics.

Governance

The Board takes issues of governance seriously and seeks to ensure transparency and streamlined

administration. The Directors bring a broad range of technical, commercial, business, accounting, auditor

and corporate finance expertise. Culturally, the Board demonstrates a high degree of integrity, fairness

and non-discrimination and promotes values through the organization.

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ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

TCFD Disclosure

Governance

a) Describe the Board’s

oversight of climate-

related risks and

opportunities.

The

Board

acknowledges

the

financial

implications of climate change and considers the

related risks and opportunities through regular

communication between the two Executive

Directors and the two Non-Executive Directors.

This communication is focused on risks and

opportunities that arise on an ongoing informal

basis.

Through

those

discussions

the

Board

has

assessed that at the current time there are no

climate-related risks or opportunities that would

have a material impact on the Group or the

wider community. This is in the context of the

Group currently having 25 employees and

substantially all of the climate impact of the

Group being driven by regulatory imperatives.

The Board will keep this assessment under

regular review.

b) Describe management’s

role in assessing

and managing

climate-related risks and opportunities.

The Board oversees the long-term impact of

climate-related risks and opportunities on the

organisation’s strategy and risk appetite. Senior

management regularly attend ESG seminars and

relevant updates are provided to the Board.

Each staff individually will seek to make personal

decisions so as to minimise climate-related risks.

This manifests itself in seeking to minimise travel

by, for example, working from home and/or use

the Zoom/Team portal meeting with business

travellers instead of travelling.

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ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

TCFD Disclosure (cont’d)

Strategy

c) Describe the climate-

related risks and

opportunities the

organisation has

identified over the

short, medium and long

term.

The Group has not identified any material

climate-related risks and opportunities in the

short-term.

Medium

and

longer-term

assessments will depend on what acquisitions

are made by the Group and accordingly the

Board will reassess those climate-related risks

and opportunities as soon as practically possible

following an acquisition.

d) Describe the impact

of climate-related risks

and opportunities on

the organisation’s

businesses, strategy

and financial planning.

The Group has assessed the impact of climate

change risks to ensure financial resilience and

operational continuity. The conclusion is that

climate change represents a negligible impact

and that these risks are not material. Individual

employees are encouraged to take climate

matters into account when planning how they

wish to work and management offer maximum

flexibility to facilitate this.

e) Describe the resilience of the organisation’s

strategy, taking into

consideration different climate-related

scenarios, including a

2°C or lower scenario.

The Group does not foresee any impact on its

resilience arising from all foreseeable climate-

related scenarios, including a full two degrees of

warming. All climate change risks will continue

to be monitored.

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ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

TCFD Disclosure (cont’d)

Risk

Management

) Describe the organisation’s

processes for identifying and

assessing climate- related risks

Climate Risk is considered as part of the annual

business review. This will be kept under review

as the organisation grows.

g) Describe the organisation’s

processes for managing

climate-related risks.

The process for managing such risks is to provide

all 25 employees with the flexibility to manage

those limited risks that are under their control.

) Describe how processes

for identifying, assessing and

managing climate-related risks are

integrated into the organisation’s overall risk

management.

The Board assessed the risks across short,

medium, and long-term timeframes, ultimately

determining that these were immaterial to the

balance sheet.

Metrics and Targets

(

i) Disclose the metrics

used by the organisation to assess

climate-related risks and

opportunities in line with its strategy and risk

management process.

The Group does not seek to measure climate-

related risks as they are not considered material.

The Board will reconsider this position on any

material change to the Group or its activities.

(j) Disclose Scope 1, 2, and, if appropriate, Scope

3 greenhouse gas emissions, and the related

risks.

The Group’s activities are outside the scope of

the Global GHG Accounting and Reporting

Standards

(k) Describe the targets

used by the organisation to manage climate-

related risks and

opportunities and performance against target.

The Group currently has not set specific targets

or commitments.

Notwithstanding, the Board is

pleased to note that employees continue to do

what they can to reduce climate risk by working

from home and minimise the business travel by

each employee. The Board will reconsider this

position on any material change to the Group or

its activities.

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

RISK MANAGEMENT REPORT

The Group has undertaken an evaluation of the risks it is exposed to which are summarised as follows:

If the Group cannot keep pace with rapid developments and change in its industry and provide new

services to its clients, the use of its services could decline, reducing its revenue and profitability

The Group faces competitive pressure from new or existing competitors which may have more significant

financial resources, consumer awareness and scale and may introduce new products and services.

The Group’s ability to remain competitive depends in part on its ability to offer competitive pricing

Certain of the Group’s competitors may have greater financial, technological and marketing resources

than it does or, in the case of certain markets (in particular any potential new markets), greater local

knowledge and presence, greater customer bases, volume, scale and market share.

Negative publicity could impact negatively on the Group’s business and reputation

The diminution in the perceived quality associated with the Group’s products or services as a result of

reputational damage or otherwise could harm the Group’s business, which can adversely affect its ability

to attract and retain customers. The Group’s reputation could be damaged by any number of issues,

including operational or user experience failures, data breaches, or negative press or social media reports.

The Group may fail to successfully execute its strategy, including expanding its share of its existing

markets, developing new capabilities and expanding into new geographies

The Group’s future growth and profitability depend upon the growth of the markets in which it currently

operates, the future expansion of those markets, its ability to develop new products and services (such as

RC3.0, RC ERP, Prepaid Card Issuance in Hong Kong, Japan and Malaysian market) that are commercially

successful and its ability to increase its penetration and service offerings within these markets, as well as

its ability to penetrate new markets, particularly in Europe.

Dependence on key personnel

The Group is managed by a number of key personnel, including the Key Executive Directors, some of

whom have significant experience within the payments sector and who may be difficult to replace. The

loss of the Key Executive Directors and/or key senior personnel could have a material adverse effect on

the Group.

Demand for the Group’s products and services may be affected by global and regional changes,

including economic, social and political changes

The Group may be affected by a number of macroeconomic factors, events and conditions, including

political and social conditions (such as any policy which might affect the ability of Regal Crown HK to do

business with Chinese customers), payment habits and trends including the number of transactions

involving the Hong Kong dollar, economic growth rates, and government outlook, spending and

regulation, such as protectionist policies and legislation.

Page

RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

Inability to manage growth

The Group intends to grow the business. The Group’s future growth may place increasing and significant

demands on its management, operational and financial systems, infrastructure and other resources and

will therefore depend on its ability to expand and improve operational, financial and management

information and control systems in line with its growth. Failure to do so could have an adverse effect on

the Group’s business and its operating results. Further, any acquisitions will carry an element of risk,

including the difficulty of integrating the operations and personnel of the acquired business and the

inability to obtain the anticipated return from such investment.

A decline in the use of debit cards as a payments mechanism or adverse developments with respect to

the digital payments industry in general could have a material adverse effect on the Group’s business,

financial condition and results of operations

If customers do not continue to use credit or debit cards as a payments mechanism for their transactions

or if there is a change in the mix of payments between cash, alternative currencies, credit and debit cards

or new payments systems which is adverse to the Group, it could have a materially adverse effect on it

business, financial condition and results of operations. A potential tightening of credit underwriting

criteria by financial institutions may make it more difficult or expensive for customers to gain access to

credit facilities such as credit cards. Moreover, if there is an adverse development in the digital payments

industry in general, such as new legislation or regulation that makes it more difficult for the Group’s clients

to do business or which results in financial institutions seeking to charge their customers additional fees

for card usage, cardholders may reduce their reliance on cards, which could have a material adverse effect

on the Group’s business, financial condition and results of operations.

The Group Is at risk of fraud

Combating fraud is a challenge because transactions are conducted between parties who are not

physically present, which in turn creates opportunities for misrepresentation and abuse. Online

businesses are especially vulnerable because of the convenience, immediacy and anonymity of

transferring funds from one account to another and subsequently withdrawing them.

The Group does not currently involve the supply of any regulated services which would require a licence

or authorisation (such as the processing of transactions) or the direct handling of client money and as such

it would not normally expect to be primarily responsible should any fraudulent activity impact a particular

transaction. However, it cannot however be excluded that the Group could be party in any litigation or

investigation in the future in relation to fraudulent transactions, even where the Group is not directly

involved. Examples of fraud could include organised criminal activity or when a person knowingly uses a

stolen or counterfeit credit or debit card, card number, or other credentials to record a false sale or credit

transaction, or intentionally fails to deliver the merchandise or services sold in an otherwise valid

transaction. Criminals are using increasingly sophisticated methods to engage in illegal activities such as

counterfeiting credit and debit cards and fraud. There is also a risk the Group’s employees could engage

in or facilitate fraudulent activity on their own behalf or on behalf of others. Moreover, is possible that

incidents of fraud could increase in the future.

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

CORPORATE GOVERNANCE STATEMENT

The Board of the Company is committed to high standards of corporate governance, which it considers

are critical to business integrity and to maintaining investors’ trust in the Company. For the year ended

31 March 2024, and up to the date of this report, the Company has applied the main principles of the

Quoted Companies Alliance (QCA) Code and complied with its detailed provisions throughout the period

under review.

Full details of our approach to governance are set out below and, as a Board, we continue to be committed

to good standards in governance practices and will continue to review the governance structures in place,

to ensure that the current practices are appropriate for our current shareholder base and that, where

necessary, changes are made.

Composition and independence of the board

The Board is comprised of two Executive Directors and two Independent Non-Executive Directors, including

the Independent Non-Executive Chairman. Each of the non-executive Directors is “independent” for the

purposes of the QCA Governance Code. The Board is of the opinion that its composition continues to

represent an appropriate balance between executive and non-executive directors, given the Group’s size

and operations.

Robert Cairns and Ajay Rajpal both have diverse experience holding senior positions in private and listed

companies in the United Kingdom. They are both considered independent as they are not involved in the

day-to-day running of the business and do not earn any performance-related remuneration.

The Company has a Board it believes is well suited for the purposes of implementing its business strategy.

Members have relevant consulting and industry experience. We intend to carry out periodic reviews of the

composition of the Board to ensure that its skillset and experience are appropriate for the effective

leadership and long-term success of the business as it develops.

Division of responsibilities

The Directors are responsible for carrying out the Group’s objectives, implementing its business

strategy and conducting its overall supervision.

The Board meet regularly to review performance. The roles of Chairman and Chief Executive Officer are

separate and clearly defined, in line with the recommendations of the QCA Corporate Governance Code.

Responsibility for overseeing the Board is the responsibility of the Chairman and the Chief Executive

Officer is responsible for overseeing the implementation of the Company’s strategy and its operational

performance.

The Executive Directors are encouraged to use their independent judgement and strong knowledge of the

Group in the discharging of their duties. They are responsible for the day-to-day management of the

business, including its financial and operational performance and the Group’s legal undertakings. Issues

and progress made are reported to the Board by the Chief Executive Officer.

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

AUDIT COMMITTEE REPORT

As Chair of the Audit and Risk Committee (“the Committee”), I am pleased to present our Audit Committee

Report for the year ended 31 March 2024.

The Board has established an audit committee and a remuneration committee and delegated various

responsibilities to these committees, to assist the Board in discharging its duties and overseeing its duties

and aspects of the Company and its subsidiaries’ activities.

The Audit Committee comprises two Non-Executive Directors: Robert Cairns (Chair) and Ajay Rajpal. The

Audit Committee receives, and reviews reports from the Group’s management and external auditors

relating to the interim and annual accounts and the accounting and internal control systems in use

throughout the Group.

The key responsibilities of the Committee are to:

• Review the significant issues and judgments of management, and the methodology and assumptions

used in relation to the Group’s financial statements and formal announcements on the Group’s financial

performance;

• Review the Group’s going concern assumptions;

• Assess the effectiveness of the Group’s system of internal controls, including financial reporting and

financial controls;

• Consider and make recommendations to the Board on the appointment, reappointment, dismissal or

resignation and remuneration of the external auditor; and

• Assess the independence and objectivity of the external auditor and approve and monitor the

application of the external auditor business standard.

External auditor

The Company’s external auditor is LB Group Limited, who were appointed with effect from the year ended

31 March 2024. Having reviewed the auditor’s independence and performance to date, the Committee

recommended to the Board to put them forward at the AGM to stand as auditors for the next financial

period.

Internal audit

The Board considers the internal control system to be adequate for the Company. The Audit Committee

reviews the scope and scale of the non-audit services undertaken by the auditors in order to ensure that

their independence and objectivity is safeguarded. The Directors recognise the business will increase in

complexity as it grows, and they will review the internal control system to ensure it responds to any

change.

RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARC

H 2024

Risk management and

internal cont

rols

The principal r

isks fac

ing the Group are summarised on page 20 of th

is Report. The

internal controls of

the Group are set out in the Financial Repo

rting Procedures Manual wh

ich was reviewed and

repo

rted

on by the Reporting Accountants

in connection w

ith the IPO. The Comm

ittee carries out an annual

risk assessment and rev

iew of mit

igating controls.

This report was approved by the board on 29 July 2024

Non Executive Chairman

Page

Page

RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

REMUNERATION COMMITTEE REPORT

The items included in this report are unaudited unless otherwise stated.

The remuneration committee consists of

Ajay Rajpal (Chair) and Robert Cairns. This committee’s primary

function is to review the performance of executive directors and senior employees and set their

remuneration and other terms of employment.

The Company has 2 Executive Directors and 2 Non-Executive Directors

The remuneration policy

It is the aim of the committee to remunerate executive directors competitively and to reward

performance. The remuneration committee determines the Group’s policy for the remuneration of

executive directors, having regard to the QCA Corporate Governance Code and its provisions on directors’

remuneration.

Although there is no formal Director or senior employee shareholding policy in place, the Board believe

that share ownership by Directors and senior employees strengthen the link between the personal

interest and those of shareholders.

No views were expressed by shareholders during the period on the remuneration policy of the Group.

Service agreements and terms of appointment

The Non-Executive Directors have service contracts with the Group.

Directors’ interests

The directors’ interests in the share capital of the Company are set out in the Directors’ report.

Directors’ emoluments (audited)

Group

RC365 Holding Plc

2024

HK$

2023

HK$

2024

HK$

2023

HK$

Chi Kit Law

2,183,561

2,591,996

Timothy Wai Yiu

Tang

240,000

275,500

Kwai Wah

Sunny Ng

47,704

Robert Cairns

47,704

Ajay Rajpal

260,000

238,521

260,000

238,521

Total

2,683,561

3,201,425

260,000

333,929

The highest paid Director of the Company in the period was Mr. Chi Kit Law, who was paid a total of

HK$2,183,561 (2023: HK$2,591,996).

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RC365 HOLDING PLC

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

Considerations of shareholder views

The Committee considers shareholder feedback received. This feedback, plus any additional feedback

received from the time to time, as part of the Group’s annual policy for remuneration.

Policy for salary reviews

The Committee may from time to time seek to review salary levels of Directors, taking into account

performance, time spent in the role and market data for the relevant role. It is intended that there will be

a salary review during the next fiscal year.

Policy for new appointment

It is not intended that there will be any new appointments to the Board in the near term. It is intended

that a full review of the Board will take place on an annual basis.

Other Matters

The Group does not currently have any annual or long term incentive schemes in place for any of the

Directors and senior employees.

Approval by shareholders

At the next annual general meeting of the Group a resolution approving this report is to be proposed as

an ordinary resolution.

This report was approved by the board on 29 July 2024

Ajay Rajpal

Non Executive Director

Page

ANNUAL REPORT FOR THE PERIOD ENDED 31 MARCH 2024

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF RC365 HOLDING PLC

Report on the audit of the financial statements

Opinion

In our opinion:



the financial statements of Rc365 Holding Plc (the ‘parent company’) and its subsidiaries (the

‘group’) give a true and fair view of the state of the group’s and of the parent company’s affairs as at

31 March 2024 and of the group’s loss for the year then ended;



the group financial statements have been properly prepared in accordance with United Kingdom

adopted international accounting standards and International Financial Reporting Standards (IFRSs)

as issued by the International Accounting Standards Board (IASB);



the parent company financial statements have been properly prepared in accordance with United

Kingdom adopted international accounting standards and as applied in accordance with the

provisions of the Companies Act 2006; and



the financial statements have been prepared in accordance with the requirements of the Companies

Act 2006.

We have audited the financial statements which comprise:



the consolidated income statement;



the consolidated statement of comprehensive income;



the consolidated and parent company balance sheets;



the consolidated and parent company statements of changes in equity;



the consolidated cash flow statement;



the statement of accounting policies; and



the related notes 1 to 38.

The financial reporting framework that has been applied in the preparation of the group financial

statements is applicable law, United Kingdom adopted international accounting standards and IFRSs as

issued by the IASB. The financial reporting framework that has been applied in the preparation of the

parent company financial statements is applicable law and United Kingdom adopted international

accounting standards and as applied in accordance with the provisions of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and

applicable law. Our responsibilities under those standards are further described in the auditor’s

responsibilities for the audit of the financial statements section of our report.

Page

We are independent of the group and the parent company in accordance with the ethical requirements

that are relevant to our audit of the financial statements in the UK, including the Financial Reporting

Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest entities, and we have fulfilled

our other ethical responsibilities in accordance with these requirements. We confirm that we have not

provided any non-audit services prohibited by the FRC’s Ethical Standard to the group or the parent

company.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for

our opinion.

Summary of our audit approach

Key audit matters

The key audit matter we identified in the current year was going concern

assumption.

Materiality

The materiality that we used for the group financial statements was HK$379,800

(2023: HK$776,418) which was determined on the basis of revenue (2023: on the

basis of gross assets).

Scoping

Those entities subject to audit represented 100% of the group’s consolidated

revenue (2023: 100% of Gross Assets) achieved through a combination of direct

testing and specified audit procedures, including substantive analytical review

procedures, performed by the group auditor and component auditors across the

world.

Significant changes in

our approach

There have been no significant changes in our approach in the current year.

Material Uncertainty related to going concern.

We draw attention to the going concern section in the notes 2.3 to the financial statements. The group's

ability to generate funds to meet short term operating cash requirements. The expected cash inflow is

relied on signed contracts with some key customers. However, the services have not been performed

yet. These events or conditions, along with other matters as set out in note 2.3 indicate that a material

uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in

our audit of the financial statements of the current period and include the most significant assessed

risks of material misstatement (whether or not due to fraud) that we identified. These matters included

those which had the greatest effect on: the overall audit strategy, the allocation of resources in the

audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in

forming our opinion thereon, and we do not provide a separate opinion on these matters.

Page

5.1.

Key audit matter title

Going concern

assumption

The financial statements have been prepared the notes to the financial

statements.

Historically, the Group has been loss making. Accumulated losses shown in the

Consolidated Balance Sheet totalled HK$51,545,412 as at 31 March 2024.

We included the going concern assumption as a key audit matter as it relies on

existing cash reserves and revenue growth generating sufficient cashflows to cover

necessary expenditure.

How the scope of our

audit responded to the

key audit matter

Our evaluation of the directors’ assessment of the group’s and parent company’s

ability to continue to adopt the going concern basis of accounting included:

– Testing controls over management’s going concern model, including the review

of the inputs and assumptions used in the model

– Identifying the key assumptions, including those relating to the current

macroeconomic uncertainty, and evaluating the appropriateness of these

assumptions and their consistency with management’s presentations to the Board

and Audit Committee

– Comparing the forecasts within the going concern model to recent historical

financial information

– Testing the mechanical accuracy of the going concern model

– Testing the covenant compliance calculations and headroom thereof, both under

the group’s forecasts and in severe downside scenarios

– Confirming the existence and availability of financing facilities

– Evaluating the appropriateness of management’s sensitivity analysis modelled

under their most severe scenario, including an evaluation of the mitigating actions

available to management

– Evaluating the disclosures on going concern

Key observations

Based on our procedures, we determined management’s assumptions used in the

going concern to be reasonable.

Impairment of

investment in

subsidiaries

Investments in and loans to subsidiaries – valuation and potential impairment. The

group holds investments in subsidiaries at cost.

There is a risk that investments in

group companies are impaired and so investment values may be misstated in the

parent company. Our audit procedures concluded that the balance in relation to

investments in and loans to subsidiaries is fully impaired.

Page

How the scope of our

audit responded to the

key audit matter

We have reviewed the consolidated financials of the subsidiary undertaking and

reviewed the performance to date.

We reviewed the latest management accounts post year end for the subsidiary;

We have reviewed the long term cashflow forecasts prepared and understood and

assessed the methodology used by the directors in this analysis and determined it

to be reasonable;

We tested the assumptions made by management through performing sensitivity

analysis through changing the assumptions used and re- running the cash flow

forecast.

Key observations

Based on our procedures, we determined management’s assumptions used in the

impairment of investment in subsidiaries to be reasonable.

Valuation of

convertible bonds

As at balance sheet date the group issued a bond of HK$35,402,946 to unrelated

third party. Per agreement terms, lender has an option to convert the bond into

share of the Group between year-end 2

March 2025.

How the scope of our

audit responded to the

key audit matter

The valuation work was performed by the independent third party, we have

reviewed the assumptions per the valuer’s report for reasonableness. Based work

performed no issue was noted regarding the valuation of financial assets (bond

and option).

Key observations

Based on our procedures, we determined management’s assumptions used in the

valuation of convertible bond to be reasonable.

Carrying value of ERP

development asset

We have reviewed the carrying value of the ERP development asset. Our

procedures in relation to management’s assessment of the carrying value of ERP

included but were not limited to.

How the scope of our

audit responded to the

key audit matter

Reviewing management’s assessment of the indicators of impairment. Reviewing

the agreement with prospective customers and discounted cashflows. Challenging

the key estimates and assumptions applied in the valuation model and carrying

out sensitivity analysis.

Key observations

Based on our audit work carried out we can confirm that the ERP development

asset is not impaired and the carrying value if therefore appropriate.

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Our application of materiality

6.1. Materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it

probable that the economic decisions of a reasonably knowledgeable person would be changed or

influenced. We use materiality both in planning the scope of our audit work and in evaluating the results

of our work.

Based on our professional judgement, we determined materiality for the financial statements as a whole

as follows:

Group financial statements

Parent company financial statements

Materiality

HK$379,800 (2023: HK$776,418)

HK$379,800 (2023: HK$582,314)

Basis for

determining

materiality

We have considered a number of metrics

when determining group materiality,

including Total assets; revenue; and total

equity. Our selected materiality figure

represents 2% of revenue.

The basis for materiality is total assets.

The materiality used is 2% of Net assets

(2023: 2% of Revenue), and is capped at

100% of group materiality (2023: 100%).

Rationale for

the benchmark

applied

We have determined that the critical

benchmark for the Group was revenue

because we consider this measure to be

the primary focus of users of the financial

statements.

Due to the nature of the company as a

parent entity holding company, we

consider total assets to be the most

appropriate basis for materiality.

6.2.

Performance materiality

We set performance materiality at a level lower than materiality to reduce the probability that, in

aggregate, uncorrected and undetected misstatements exceed the materiality for the financial

statements as a whole.

Group financial statements

Parent company financial statements

Performance

materiality

70% (2023: 70%) of group materiality

70% (2023: 70%) of parent company

materiality

Basis and

rationale for

determining

performance

materiality

In determining performance materiality, we considered the following factors:

the nature, volume and size of misstatements (corrected and

uncorrected) in the previous audit;

whether this was a first year audit or significant changes in the business

might affect our ability to forecast misstatements;

high turnover of management or key accounting personnel;

prior period adjustments; or

prior period errors found in the current year.

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6.3.

Error reporting threshold

We agreed with the Audit Committee that we would report to the Committee all audit differences in

excess of HK$19,000 (2023: HK$39,000), as well as differences below that threshold that, in our view,

warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure

matters that we identified when assessing the overall presentation of the financial statements.

An overview of the scope of our audit

7.1.

Identification and scoping of components

We performed a full scope audit on the Group. We designed our audit by determining materiality and

assessing the risks of material misstatement in the financial statements. In particular, we looked at areas

where the Directors made subjective judgements, which involved making assumptions and considering

future events that are inherently uncertain, such as their going concern assessment.

7.2.

Our consideration of the control environment

Rc365 Holding plc is reliant on the effectiveness controls to ensure that financial transactions are

processed and recorded completely and accurately. Accordingly, we perform testing of internal controls

over financial reporting in all areas of the audit.

7.3.

Our consideration of climate-related risks

Our risk assessment procedures in relation to the impact of climate-related risks involved obtaining an

understanding of management’s relevant processes and controls. We further reviewed management’s

paper assessing these risks. We evaluated these risks to assess whether they were complete and

consistent with our understanding of the entity and our wider risk assessment procedures.

Our procedures to address our identified risks involved considering the impact of the risks on the

financial statements overall, including in the application of individual accounting standards. Such

considerations included the impact of changes in regulation and reporting standards. We further

reconciled the disclosures made to underlying supporting evidence.

7.4.

Working with another auditor

The group audit team exercises its oversight of component auditor using a carefully designed

programme, which considers a variety of factors including the size and complexity of the entity. The

group audit team directs, supervises and evaluates the audit work performed by component audit team

by:

– Speaking regularly with teams about the status of their work

– Reviewing reporting and underlying workpapers where determined to be necessary

– Attending key meetings including close meetings

In order to drive consistency and comparability over the audit work performed by our component

auditor, the group engagement team directly leads the risk assessment process in all areas of the audit.

This process involves workshops with our local audit team to enhance and confirm the group teams

understanding of local processes and risks. After consideration of how the nature and extent of those

operating unit level risks contribute to risk of material misstatement at a group level the group

engagement team, in consultation with the local team, confirms the specific audit procedures that

component auditors are instructed to perform.

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In years when we elect to not visit a component, either physically or virtually, we:

– Include the component audit partner in our team planning meeting

– Discuss the results of the Group-led risk assessment

– Review the documentation of the findings from their work and discuss with them as needed

These are designed so that the Senior Statutory Auditor or a senior member of the group audit team can

have oversight of the work of our component auditor on a regular basis. In addition, we assess the

competence of each of our component auditor.

We also hold weekly meetings with management during our audit fieldwork at a global level in order to

update our understanding of the Group and its environment on an ongoing basis.

Other information

The other information comprises the information included in the annual report, other than the financial

statements and our auditor’s report thereon. The directors are responsible for the other information

contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent

otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other

information is materially inconsistent with the financial statements or our knowledge obtained in the

course of the audit, or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent material misstatements, we are required to

determine whether this gives rise to a material misstatement in the financial statements themselves. If,

based on the work we have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, the directors are responsible for the

preparation of the financial statements and for being satisfied that they give a true and fair view, and for

such internal control as the directors determine is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the

parent company’s ability to continue as a going concern, disclosing as applicable, matters related to

going concern and using the going concern basis of accounting unless the directors either intend to

liquidate the group or the parent company or to cease operations, or have no realistic alternative but to

do so.

10.Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report

that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that

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an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the

basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the

FRC’s website at:

www.frc.org.uk/auditorsresponsibilities

. This description forms part of our auditor’s

report.

11.Extent to which the audit was considered capable of detecting irregularities,

including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect

of irregularities, including fraud. The extent to which our procedures are capable of detecting

irregularities, including fraud is detailed below.

11.1.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud

and non-compliance with laws and regulations, we considered the following:



the nature of the industry and sector, control environment and business performance including

the design of the group’s remuneration policies, key drivers for directors’ remuneration, bonus

levels and performance targets;



results of our enquiries of management, the directors and the audit committee about their own

identification and assessment of the risks of irregularities, including those that are specific to the

group’s sector;



any matters we identified having obtained and reviewed the group’s documentation of their

policies and procedures relating to:

identifying, evaluating and complying with laws and regulations and whether they were

aware of any instances of non-compliance;

detecting and responding to the risks of fraud and whether they have knowledge of any

actual, suspected or alleged fraud;

the internal controls established to mitigate risks of fraud or non-compliance with laws and

regulations;



the matters discussed among the audit engagement team regarding how and where fraud might

occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within

the organisation for fraud and identified the greatest potential for fraud. In common with all audits

under ISAs (UK), we are also required to perform specific procedures to respond to the risk of

management override.

We also obtained an understanding of the legal and regulatory frameworks that the group operates in,

focusing on provisions of those laws and regulations that had a direct effect on the determination of

material amounts and disclosures in the financial statements. The key laws and regulations we

considered in this context included the Exchange Commission rules, the UK Listing Rules, and tax

legislation in the group’s various jurisdictions.

Page

In addition, we considered provisions of other laws and regulations that do not have a direct effect on

the financial statements but compliance with which may be fundamental to the group’s ability to

operate or to avoid a material penalty. These included the UK Bribery Act.

11.2.

Audit response to risks identified

As a result of performing the above, we did not identify any key audit matters related to the potential

risk of fraud or non-compliance with laws and regulations.

Our procedures to respond to risks identified included the following:

– Reviewing the financial statement disclosures and testing to supporting documentation to assess

compliance with provisions of relevant laws and regulations described as having a direct effect on the

financial statements.

– Enquiring of management, the audit committee and external legal counsel concerning actual and

potential litigation and claims.

– Performing analytical procedures to identify any unusual or unexpected relationships that may

indicate risks of material misstatement due to fraud.

– Reading minutes of meetings of those charged with governance, reviewing internal audit reports and

reviewing correspondence with relevant tax authorities.

– In addressing the risk of fraud through management override of controls, testing the appropriateness

of journal entries and other adjustments, including those made outside of local operational reporting;

assessing whether the judgements made in making accounting estimates are indicative of a potential

bias; and evaluating the business rationale of any significant transactions that are unusual or outside the

normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all

engagement team members including internal specialists and significant component audit teams, and

remained alert to any indications of fraud or non-compliance with laws and regulations throughout the

audit.

Report on other legal and regulatory requirements

12.Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors’ remuneration report to be audited has been properly prepared

in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:



the information given in the strategic report and the directors’ report for the financial year for

which the financial statements are prepared is consistent with the financial statements; and



the strategic report and the directors’ report have been prepared in accordance with applicable

legal requirements.

In the light of the knowledge and understanding of the group and the parent company and their

environment obtained in the course of the audit, we have not identified any material misstatements in

the strategic report or the directors’ report.

Page

13.Corporate Governance Statement

The Listing Rules require us to review the directors' statement in relation to going concern, longer-term

viability and that part of the Corporate Governance Statement relating to the group’s compliance with

the provisions of the UK Corporate Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the Corporate Governance Statement is materially consistent with the financial statements

and our knowledge obtained during the audit:



the directors’ statement with regards to the appropriateness of adopting the going concern basis of

accounting and any material uncertainties identified [set out on page 12-13];



the directors’ explanation as to its assessment of the group’s prospects, the period this assessment

covers and why the period is appropriate

[set out on page 3-5];



the directors' statement on fair, balanced and understandable

[set out on page 7-8]



the board’s confirmation that it has carried out a robust assessment of the emerging and principal

risks

[set out on page 17-18]; and



the section of the annual report that describes the review of effectiveness of risk management and

internal control systems

[set out on page 20 - 22].

14.Matters on which we are required to report by exception

14.1.

Adequacy of explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if, in our opinion:



we have not received all the information and explanations we require for our audit; or



adequate accounting records have not been kept by the parent company, or returns adequate

for our audit have not been received from branches not visited by us; or



the parent company financial statements are not in agreement with the accounting records and

returns.

We have nothing to report in respect of these matters.

14.2.

Directors’ remuneration

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of

directors’ remuneration have not been made or the part of the directors’ remuneration report to be

audited is not in agreement with the accounting records and returns.

We have nothing to report in respect of these matters.

15.Other matters which we are required to address

15.1.

Auditor tenure

Following the recommendation of the audit committee, we were appointed by the company at the

Annual General Meeting on

20 Jan 2024

to audit the financial statements for the year ending 31 March

2024 and subsequent financial periods. The period of total uninterrupted engagement including

previous renewals and reappointments of the firm is one year.

Page

Consolidated statement of comprehensive income

for the year ended 31 March 2024

The accompanying notes to the consolidated financial statements on pages 45 to 88 form an integral part of

these consolidated financial statements.

Notes

31 March 2024

31 March 2023

HK$

Revenue

22,029,649

16,883,559

Cost of sales

(87,228)

(898,533)

Gross profit

21,942,421

15,984,826

Other income

1,026,203

330,010

Subcontracting fee paid

(5,677,221)

(8,457,204)

Staff costs

(8,419,266)

(4,928,904)

Other operating expenses

(9,567,043)

(7,116,420)

Depreciation on property, plant and equipment and right-

of-use assets and amortisation of intangible assets

(3,210,772)

(1,065,313)

Operating loss

(3,905,678)

(5,253,005)

Fair value gain on contingent consideration

–

consideration shares

874,478

Fair value (loss)/gain on financial assets at FVPL

(33,511,816)

41,064

Finance charges

(208,662)

(166,510)

Loss before income tax

(36,751,678)

(5,378,451)

Income tax expense

(128,762)

Loss for the year

(36,880,440)

(5,378,451)

Loss per share

–

basic and diluted (HK$)

(29.00 cents)

(4.96 cents)

Page

Consolidated statement of comprehensive income

for the year ended 31 March 2024

The accompanying notes to the consolidated financial statements on pages 45 to 88 form an integral part of

these consolidated financial statements.

31 March 2024

31 March 2023

HK$

Loss for the year

(36,880,440)

(5,378,451)

Other comprehensive income, net of tax

Items that may be reclassified subsequently to profit

or loss:

594,955

265,012

Exchange differences on translation of financial

statements of foreign operations

594,955

265,012

Total comprehensive loss for the year

(36,285,485)

(5,113,439)

Page

Consolidated statement of financial position

as at 31 March 2024

The accompanying notes to the consolidated financial statements on pages 45 to 88 form an integral part of

these consolidated financial statements.

Approved by the Board and authorised for issue on 29 July 2024.

Robert Cairns

Director

Company Registration number: 13289422

Notes

202

HK$

ASSETS

Non

current assets

Goodwill

759,289

Loan receivables

3,257,981

Intangible assets

23,513,372

6,184,803

Property, plant and equipment

457,213

61,057

Right

use assets

503,955

204,684

28,491,810

6,450,544

Current assets

Financial assets

at FVPL

1,017,248

1,041,064

Deposit and prepayments

2,980,887

3,788,412

Trade and other receivables

34,862,948

17,698,025

Loan receivables

294,500

Cash and cash equivalents

19,318,967

9,548,364

58,180,050

32,370,365

Current liabilities

Trade and other payables

14,488,885

2,288,347

Borrowings

4,539,862

5,299,556

Lease

liabilities

412,284

135,711

Convertible loan

note

35,402,946

Tax payables

111,030

54,955,007

7,723,614

Net current assets

3,225,043

24,646,751

Non

current liabilities

ase

liabilities

65,529

65,143

Contingent consideration

consideration

70,486

136,015

65,143

Net assets

31,580,838

31,032,152

EQUITY

Share capital

29,925,945

28,801,920

Share premium

49,329,087

16,576,592

Group reorganisation reserve

589,836

Convertible loan note reserve

2,957,651

Translation reserve

323,731

(271,224)

Accumulated losses

(51,545,412)

(14,664,972)

Total equity

31,580,838

31,032,152

Page

Consolidated statement of changes in equity

for the year ended 31 March 2024

The accompanying notes to the consolidated financial statements on pages 45 to 88 form an integral part of

these consolidated financial statements.

capital

premium

Translation

reserves

Group

reorganisation

reserves

Convertible

loan note

reserve

Accumulated

losses

Total

HK$

At 1 April 2022

11,500,995

16,576,592

(536,236)

750,476

(9,286,521)

19,005,306

Loss for the year

(5,378,451)

Exchange difference

on consolidation

265,012

Total

comprehensive

expenses

265,012

(5,378,451)

(5,113,439)

Acquisition of

subsidiaries under

common control

(160,640)

Issue of share

capital

17,300,925

At 31 March 2023

and at 1 April

2023

28,801,920

16,576,592

(271,224)

589,836

(14,664,972)

31,032,152

Loss for the year

(36,880,440)

Exchange difference

on consolidation

594,955

Total

comprehensive

expenses

594,955

(36,880,440)

(36,285,485)

Issue of share

capital

1,124,025

32,752,495

33,876,520

Issue of convertible

loan note

2,957,651

At 31 March 2024

29,925,945

49,329,087

323,731

589,836

2,957,651

(51,545,412)

31,580,838

Page

Consolidated statement of cash flows

for the year ended 31 March 2024

The accompanying notes to the consolidated financial statements on pages 45 to 88 form an integral part of

these consolidated financial statements.

31 March 2024

31 March 2023

HK$

Cash flows from operating activities

Loss before income tax

(36,751,678)

(5,378,451)

Adjustments for:

Amortisation of intangible assets

2,711,515

475,957

Depreciation of property, plant and equipment

115,212

12,614

Depreciation of right-of-use-assets

384,045

576,742

Written-off of property, plant and equipment

50,239

Written-off of right-of-use-assets

136

Gain on termination of lease agreement

(38,132)

Impairment loss on loan receivables

42,019

Fair value loss/(gain) on financial assets at FVPL

33,511,816

(41,064)

Interest income

(597,441)

(13,649)

Fair value gain on contingent consideration

–

consideration

(874,478)

Net gain on disposal of financial assets at FVPL

(80,883)

Finance charges

208,662

166,510

Operating cashflow before working capital changes

(1,280,836)

(4,239,473)

(Increase)/decrease in trade and other receivable

(1,825,163)

736,523

Decrease/(Increase) in deposits and prepayments

844,045

(3,635,536)

(Increase)/decrease in loan receivables

(1,705,500)

405,500

Increase in trade and other payables

11,447,945

754,846

Cash generated from/ (used in) operating activities

7,480,491

(5,978,140)

Income tax paid

(35,769)

Net cash generated from/ (used in) operating activities

7,444,722

(5,978,140)

Cash flow from investing activities

Acquisition of intangible assets

(2,738,575)

(6,524,760)

Acquisition of property, plant and equipment

(65,380)

(67,951)

Purchase of financial assets at FVPL

(1,000,000)

Proceeds from disposal of financial assets at FVPL

379,496

Net cash (outflow)/ inflow for the acquisition of subsidiaries

(545,826)

546,139

Interest received

297,441

13,649

Net cash used in investing activities

(2,672,844)

(7,032,923)

Cashflow from financing activities

Interest paid

(175,755)

(149,430)

Repayment of bank borrowings

(759,694)

(500,444)

Proceeds from issue of convertible loan note

5,967,000

Rental paid for lease liabilities

(439,400)

(547,650)

Net cash from/ (used in) financing activities

4,592,151

(1,197,524)

Net increase/ (decrease) in cash and cash equivalents

9,364,029

(14,208,587)

Effect of exchange rate changes

406,574

340,190

Cash and cash equivalents at beginning of the year

9,548,364

23,416,761

Cash and cash equivalents at the end of the year

19,318,967

9,548,364

Page

Notes to the consolidated financial statements

for the year ended 31 March 2024

GENERAL INFORMATION

RC365 Holding Plc (the “Company”) was incorporated as a private limited company on 24 March

2021 in the United Kingdom (“UK”) under the Companies Act 2006.

The Company acted as a holding

company and converted to a public limited company on 22 September 2021.

The address of the

registered office is Cannon Place, 78 Cannon Street, London, United Kingdom, EC4N 6AF. The

Company was listed on the Standard List of the London Stock Exchange (“LSE”) on 23 March 2022.

The 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, and provision of media

production services.

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 except for financial assets at fair value through

profit or loss (“FVPL”) which are measured at fair value as explained in the accounting policies

set out below. 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.

Page

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 2023 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-	1 January 2024
	current
IAS 1	Amendments - Non-current liabilities with	1 January 2024
	covenants
IFRS 16	Amendments - Leases on sale and leaseback	1 January 2024
IAS 7 &	Amendments – Supplier finance arrangements	1 January 2024
IFRS 17
ISA 21	Amendments – Lack of exchangeability	1 January 2025
IFRS 18	Presentation and Disclosure in Financial	1 January 2027
	Statements
IFRS 19	Subsidiaries without Public Accountability:	1 January 2027
	Disclosures
IFRS10	Amendments – Sales or contribution of assets	To be determined
& IAS 28	between an investor and its 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 (the “Directors”) have considered the applicability of the going

concern basis in the preparation of the consolidated 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 Group incurred a loss of HK$36,880,440 for the year ended 31 March 2024. This included

a fair value loss on financial assets at FVPL of HK$33,511,816 as disclosed in note 15(b). The

loss (excluding a fair value loss on financial assets at FVPL) was HK$3,368,624 for the year

ended 31 March 2024. On the other hand, the remittance service fee and topup service fee

earned by RCPAY Limited (Hong Kong and UK), Regal Crown Technology Limited has a

large customer, Junca Japan LLC, in providing approximately USD280,000 for 18 months 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 enrol

for the MasterCard Whitelabel program on the coming 6 to 9 months. The management team

of the Group would like to state that the Group has a strong cash flow (approximately HK$9

million for 2023 and approximately HK$19 million for 2024) through the issuance of a

convertible bond with remaining approximately GBP3 million for the coming 9 months.

Page

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3

Going Concern (Continued)

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

value 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 ("RCTech") 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 RCTech. Therefore the assets and

liabilities of RCTech 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 RCTech 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. Chi Kit Law As

RCPay HK, RC Singapore, RCPAY UK and the Group are under common control of Mr.

Chi Kit Law before and after the acquisition, the acquisition and the business combination

have been accounted for as a business combination under common control.

Page

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.4

Basis of consolidation (Continued)

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.

Page

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.5

Foreign currency translation (Continued)

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.

Page

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.7

Goodwill (Continued)

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 note 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.

Page

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.9

Intangible assets (Continued)

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.

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 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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.10

Financial instruments (continued)

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, borrowings,

contingent consideration and convertible loan note.

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.10

Financial instruments (continued)

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

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 contains a lease component and one or more additional lease or non-lease

components, the

Group

allocates the consideration in the contract to each lease and non-lease

component on the basis of their relative stand-alone prices.

Measurement and recognition of leases as a lessee

At lease commencement date, the Group recognises a right-of-use asset and a lease liability

on the consolidated statement of financial position. The right-of-use asset is measured at cost,

which is made up of the initial measurement of the lease liability, any initial direct costs

incurred by the Group, an estimate of any costs to dismantle and

remove

the underlying asset

at the end of the lease, and any lease payments made in advance of the lease commencement

date (net of any lease incentives received).

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.12

Lease (continued)

Measurement and recognition of leases as a lessee (continued)

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 year.

2.14

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.14

Revenue recognition (continued)

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.14

Revenue recognition (continued)

For certain services provided by the Group, in accordance with the underlying service

agreements which 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

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) 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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.16

Impairment of non-financial assets (Continued)

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 year.

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.18

Related parties (Continued)

(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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.19

Accounting for income taxes (Continued)

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

reporting 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 year, in the opinion of the

Directors, there is only one reportable operating segment of IT software development in Hong

Kong due to its significant portion of operation among all business activities.

Page

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 year, 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 related party bank borrowing in Hong Kong.

Fair value measurements and valuation processes

Some of the Group’s financial assets 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 note 15, 22, 24 and 26.6.

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.

Page

REVENUE

The Group is engaged in provision of IT software development and payment solutions, remittance

and payment services and provision of media production services in Hong Kong. Revenue was

principally derived from IT software development and payment solutions for both years.

OTHER INCOME

	2024	2023
	HK$	HK$
Government subsidy (note)	110,000	263,200
Gain on termination of lease agreement	-	38,132
Sundry income	237,879	15,029
Net gain on disposal of financial assets at FVPL	80,883	-
Interest income	597,441	13,649
	1,026,203	330,010

Note: During the year ended 31 March 2024, the Group received funding support amount

HK$110,000 (2023: HK$263,200) from the Animation Support Program, set up by the Government

of the Hong Kong Special Administrative Region. The purpose of the funding is to provide financial

support to enterprises for producing animation works.

FINANCE CHARGES

	2024	2023
	HK$	HK$
Finance charges on lease liabilities	32,907	17,080
Interest on bank loan	175,755	149,430
	208,662	166,510

LOSS BEFORE INCOME TAX

Loss before income tax is arrived at after charging:

	2024	2023
	HK$	HK$
Subcontractors’ fee	5,677,221	8,457,204
Amortisation of intangible assets	2,711,515	475,957
Depreciation
- Property, plant and equipment	115,212	12,614
- Right-of-use assets	384,045	576,742

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LOSS BEFORE INCOME TAX (Continued)

During the year the Group obtained following audit and non-audit services:

	2024	2023
	HK$	HK$
Audit services:
Statutory audit – Group and Company	589,964	190,000
Non-audit services
Accountancy review fee – Group and Company	19,668	11,894

STAFF COSTS AND DIRECTOR’S EMOLUMENTS

The aggregate payroll costs (including Directors’ remuneration) were as follows:

	2024	2023
	HK$	HK$
Wages, salaries and other employee benefits	8,161,460	4,804,428
Contributions to defined contribution plans	257,282	124,476
Housing allowances	524	97,500

The average number of persons employed by the Group (including Directors) was 25 during the year

(2023:

The Directors’ remuneration for the year was as follows:

	2024	2023
	HK$	HK$
Fees	-	-
Other emoluments	2,683,561	3,201,425

INCOME TAX EXPENSE

	2024	2023
	HK$	HK$
Tax expense for the year	128,762	-

UK corporation tax is calculated at 19% of the estimated assessable profit for the year (2023: Nil).

Hong Kong Profits Tax calculated at 8.25% on the first HK$2 million of the estimated assessable

profits and at 16.5% on the estimated assessable profits above HK$2 million for the year (2023: Nil).

Deferred tax assets have not been recognised in respect of these losses due to the unpredictability of

future taxable profits streams of the subsidiaries in Hong Kong.

Page

INCOME TAX EXPENSE (CONTINUED)

Reconciliation between tax expense and accounting profit at applicable tax rates:

	2024	2023
	HK$	HK$
Loss before taxation	(36,751,678)	(5,378,451)
Tax at applicable income tax rate	42,975	(959,244)
Tax effect of non-deductible expense	269,383	870,841
Tax effect of non-taxable income	(124,820)	(55,096)
Tax effect on temporary differences	305,071	65,880
Tax effect of tax losses not recognised	359,313	77,619
Utilisation of tax losses brought forward	(687,192)	-
Tax reduction	(6,000)	-
Tax at applicable concessionary rate	(29,968)	-
Income tax expense	128,762	-

10.

EARNINGS PER SHARE

	2024	2023
	HK$	HK$
Loss attributable to equity shareholders	(36,880,440)	(5,378,451)
Weighted average number of ordinary shares	127,181,165	108,500,249
Loss per share in HK$:
Basic	(29.00 cents)	(4.96 cents)
Diluted	(29.00 cents)	(4.96 cents)

There were no potential dilutive ordinary shares in existence during the years ended 31 March 2024

and 2023, and hence diluted earnings per share is the same as the basic earnings per share.

11.

GOODWILL

	2024	2023
	HK$	HK$
Cost and net carrying amount
At 1 April	-	-
Additions	759,289	-
At 31 March	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 31 March 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.

Page

12.

INTANGIBLE ASSETS

Development cost	HK$
Cost
At 31 March 2023 and 1 April 2023	6,660,760
Additions	19,938,476
Exchange realignment	104,400
At 31 March 2023	26,703,636
Accumulated amortisation
At 31 March 2023 and 1 April 2023	475,957
Charge for the year	2,711,515
Exchange realignment	2,792
At 31 March 2024	3,190,264
Net Book Value
At 31 March 2024	23,513,372
At 31 March 2023	6,184,803

The above intangible assets have definite useful lives. Such intangible assets are amortised on a

straight-line basis ranged over 5 years and 10 years.

13.

PROPERTY, PLANT AND EQUIPMENT

	Office	Leasehold	Furniture &
	equipment	improvement	fixtures	Total
	HK$	HK$	HK$	HK$
Cost
At 31 March 2023 and 1 April 2023	273,004	-	31,000	304,004
Additions	-	-	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	661,063	101,474	91,180	853,718
Accumulated Depreciation
At 31 March 2023 and 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	362,166	20,295	14,044	396,505
Net Book Value
At 31 March 2024	298,897	81,179	77,137	457,213
At 31 March 2023	32,947	-	28,110	61,057

Page

14.

RIGHT-OF-USE ASSETS

Lease assets	HK$
Cost
At 31 March 2023 and 1 April 2023	981,425
Additions	746,470
Written off	(906,683)
At 31 March 2024	821,212
Accumulated Depreciation
At 31 March 2023 and 1 April 2023	776,741
Charge for the year	384,045
Written off	(843,528)
At 31 March 2024	317,258
Net Book Value
At 31 March 2024	503,954
At 31 March 2023	204,684

15.

FINANCIAL ASSETS AT FVPL

		2024	2023
	Notes	HK$	HK$
Convertible bonds with put option	15(a)	-	1,041,064
Equity investments listed in Hong Kong	15(b)	1,017,248	-
		1,017,248	1,041,064

(a)

The Group invested in convertible bonds in a principal amount of HK$1,000,000 with the

maturity date on 2 January 2024. The convertible bonds carry interest at 10% per annum. The

convertible bonds will be convertible into shares of the bond issuer at the option of the Group

upon the bond issuer being listed on the Hong Kong Stock Exchange on or before 13 March

2024. Exact number of shares to be issued upon conversion will depend on the total number

of shares of the bond issuer at the time of conversion and the amount of shares of the bond

issuer at the time of conversion and the amount of the convertible bonds to be converted into

shares. The put option may be exercised by the Group if and only if the exercise event occurs

to require the issuer to purchase all but not part of the convertible bonds. During the year

ended 31 March 2024, fair value loss on convertible bonds will put option of HK$41,064 was

recognised in profit of loss.

(b)

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 has conditionally agreed to subscribe for , and the Company has 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 shall 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.

Page

15.

FINANCIAL ASSETS AT FVPL (Continued)

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.

On 27 October 2023, the Company disposed of an aggregate of 8,000,000 shares. Net gain on

disposal of equity investments of HK$80,883 was recognised in profit of loss.

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 year ended 31 March 2024, fair value loss on equity investments of HK$33,470,752 was

recognised in profit or loss.

Details of the fair value measurements are set out in note 26 to the consolidated financial

statements.

16.

TRADE AND OTHER RECEIVABLES AND DEPOSIT AND PREPAYMENT

		2024	2023
	Notes	HK$	HK$
Trade receivables (note)	16(a)	2,349,282	-
Other receivables		32,513,666	17,698,025
Deposit and prepayment		2,980,887	3,788,412
		37,843,835	21,486,437

Note:

(a)

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. Credit

limits attributed to customers are reviewed regularly.

Age of trade receivables that are past due but not impaired are as follows:

	2024	2023
	HK$	HK$
Overdue by:
0 – 30 days	931,282	-
31 – 60 days	150,000	-
61 – 90 days	435,000	-
Over 90 days	342,500	-
	1,858,782	-

Page

16.

TRADE AND OTHER RECEIVABLES AND DEPOSIT AND PREPAYMENT (Continued)

Trade receivables that were past due but not impaired relate to a number of customers that have a

good track record with the Group. Based on past experience, the Directors believe that no impairment

allowance is necessary in respect of these balances as there has not been a significant change in credit

quality and the balances are still considered fully recoverable.

As at 31 March 2024 and 2023, no ECL has been provided for trade and other receivables, 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.

17.

LOAN RECEIVABLES

	2024	2023
	HK$	HK$
Receivables:
- within one year	-	294,500
- in the second to fifth years inclusive	3,300,000	-
	3,300,000	294,500
Less: Amount shown under current assets	-	(294,500)
Balance due after one year	3,300,000	-
Less: Impairment losses	(42,019)	-
	3,257,981	-

The loans to independent third parties are unsecured, bearing interest at 10% (2023: 0.1%) per annum

and with fixed terms of repayment. The Directors consider that the fair values of loan receivables are

not materially different from their carrying amounts.

18.

CASH AND CASH EQUIVALENTS

	2024	2023
	HK$	HK$
Cash and bank balance	19,318,967	9,548,364

Page

19.

TRADE AND OTHER PAYABLES

	2024	2023
	HK$	HK$
Trade payables	1,751,682	235,726
Accrued charges and other payables	2,215,699	354,038
Contract liabilities	8,424,227	750,035
Amount due to a director	2,097,277	948,548
	14,488,885	2,288,347

The amount due to a director is unsecured, interest free and repayable on demand.

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 value.

20.

BORROWINGS

	2024	2023
	HK$	HK$
Bank loans - secured	4,539,862	5,299,556
Presented by:
- Carrying amount repayable on demand or within one	785,841	763,429
year
- Carrying amount repayable after one year with	3,754,021	4,536,127
repayment on demand clause
	4,539,862	5,299,556
Less: Amount shown under current liabilities	(4,539,862)	(5,299,556)
Non-current liabilities	-	-

Bank borrowings are variable interest bearing borrowings which carry interest at 2.5% below

Prime Rate per annum. At 31 March 2024, the banking facilities were secured by the joint and

several guarantees given by Mr. Chi Kit Law, the ultimate controlling party of the Company.

Page

21.

LEASE LIABILITIES

The following table illustrates the remaining contractual maturities of the lease liabilities:

	2024	2023
	HK$	HK$
Total minimum lease payments:
Due within one year	432,300	142,100
Due in the second to fifth years	66,000	67,050
	498,300	209,150
Future finance charges on lease liabilities	(20,487)	(8,296)
Present value of lease liabilities	477,813	200,854
Present value of liabilities:
Due within one year	412,284	135,711
Due in the second to fifth years	65,529	65,143
	477,813	200,854
Less: Portion due within one year included under current	(412,284)	(135,711)
liabilities
Portion due after one year included under non-current	65,529	65,143
liabilities

The Group entered into lease arrangements for car parking space and office with contract 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.

22.

CONVERTIBLE LOAN NOTE

The convertible loan note recognised at the end of the reporting period are calculated as follows:

	2024	2023
	HK$	HK$
Liability component
At 1 April	-	-
Fair value of liabilities component at date of issue	35,265,495	-
Interest expenses	-	-
Conversion of convertible loan note	-	-
Exchange realignment	137,451	-
At 31 March	35,402,946	-
Portion classified as non-current	-	-
Current portion	35,402,946	-
Equity component
At 1 April	-	-
Fair value of convertible loan note at date of issue	2,957,651	-
Conversion of convertible loan note	-	-
At 31 March	2,957,651	-

Page

22.

CONVERTIBLE LOAN NOTE (Continued)

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 announcement dated on 4

March 2024.

23.

SHARE CAPITAL

	2024	2023
	HK$	HK$
Issued shares:
At the beginning of the reporting period	28,801,920	11,500,995
Issue of shares	1,124,025	17,300,925
At the end of the reporting period	29,925,945	28,801,920

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”), pursuant to which the Subscriber has conditionally

agreed to subscribe for , and the Company has 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 shall 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.

On 22 February 2023, 9,500,000 shares at £0.19 each were issued and allotted by the Company to the

Subscriber.

As at 31 March 2023, 9,500,000 shares had been issued and allotted by the Company to the Subscriber.

Completion of the Subscription took place on 17 April 2023.

On 3 April 2023, the Company further 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.

Page

24.

BUSINESS COMBINATION UNDER COMMON CONTROL

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. Chi Kit Law 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	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

Page

24.

BUSINESS COMBINATION UNDER COMMON CONTROL (CONTINUED)

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. Chi Kit Law 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	(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

Page

24.

BUSINESS COMBINATION UNDER COMMON CONTROL (CONTINUED)

Acquisition of RCPAY UK

On 7 November 2022, the Group acquired 100% equity interest in RCPAY UK at a cash consideration

of £1 from the ultimate controlling party. As the Group and RCPAY UK are under the common

control of Mr. Chi Kit Law 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 UK 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 RCPAY

UK at the completion date is recognised in group reorganisation reserve amounting to HK$73,037.

Details of the carrying amounts of the assets and liabilities of RCPAY UK at the date of acquisition

are as follows:

	At 7 November
	2022
	HK$
Cash and cash equivalents	206,691
Trade and other payables	(279,718)
Net liabilities	(73,027)
Merger reserve recognised	73,037
	10
Net cash inflow arising on the acquisition:
Consideration	(10)
Cash and cash equivalents acquired	206,691
	206,681

Page

24.

BUSINESS COMBINATION UNDER COMMON CONTROL (CONTINUED)

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

Page

24.

BUSINESS COMBINATION UNDER COMMON CONTROL (CONTINUED)

Acquisition of Mr. Meal Group (Continued)

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 31 March 2024, the fair

value of the Consideration Shares is estimated to be HK$70,486.

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)
	70,486

25.

MAJOR NON-CASH TRANSACTIONS

Following note 23 to the financial statements, the Subscription was completed on 17 April

2023, 8,500,000 shares at £0.19 each had been issued and allotted by the Company to the

Subscriber. As a result, there was an increase in share capital of HK$827,475, increase in share

premium of HK$15,849,145, increase in financial assets at FVPL of HK$34,776,000 and

decrease in other receivables of HK$18,099,380, respectively.

ii)

During the year ended 31 March 2024, the Group entered into acquisition agreement in respect

of the addition to intangible assets of 17,199,900, which was financed by way of the issue and

allotment of an aggregate of 3,000,000 shares at £0.58 each to the Subscriber. As a result, there

was an increase in share capital of HK$296,550 and increase in share premium of

HK$16,903,350, respectively.

iii)

During the year ended 31 March 2024, the Group entered into the financial lease arrangements

in respect of the office, resulted in an increase in the right-of-use assets and lease liabilities of

HK$746,470 respectively.

Page

26.

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.

26.1

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:

	2024	2023
	HK$	HK$
Financial assets
Financial assets at fair value
- Financial assets at FVPL	1,107,248	1,041,064
Financial assets at amortised costs
- Trade receivables	2,349,282	-
- Other receivables	32,513,666	17,698,025
- Deposit and prepayment	1,682,543	3,788,412
- Loan receivables	3,257,981	294,500
- Cash and cash equivalents	19,318,967	9,548,364
	60,229,687	25,314,128
	2024	2023
	HK$	HK$
Financial liabilities
Financial liabilities at amortised cost
- Trade payables	1,751,682	235,726
- Accrued charges and other payables	-	354,038
- Contract liabilities	8,424,227	750,035
- Amount due to a director	2,097,277	948,548
- Lease liabilities	477,812	200,854
- Borrowings	4,539,862	5,299,556
- Convertible loan note	35,402,946	-
	52,693,806	7,788,757

26.2

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.

Page

26.

FINANCIAL RISK MANAGEMENT AND FAIR VALUE MEASUREMENTS (CONTINUED)

26.3

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 year would increase/decrease by HK$45,399 (

2023: HK$52,996

). This is mainly

attributable to the Group’s exposure to interest rates on its variable-rate bank borrowings.

26.4

Credit risk

The Group’s exposure to credit risk mainly arises from granting credit to customers and other

counterparties in the ordinary course of its operations. The Group’s maximum exposure to

credit risk for the components of the consolidated statement of financial position at 31 March

2024 refers to the carrying amount of financial assets as disclosed in note 26.1.

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 years ended 31 March 2024 and 2023 is minimal as there has not been a

significant change in credit quality of the customers.

Page

26.

FINANCIAL RISK MANAGEMENT AND FAIR VALUE MEASUREMENTS (CONTINUED)

26.4

Credit risk (Continued)

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 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.

26.5

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.

Page

26.

FINANCIAL RISK MANAGEMENT AND FAIR VALUE MEASUREMENTS (CONTINUED)

26.5

Liquidity risk (Continued)

					Total
		Within	Over 1 year		contractual
	Carrying	1 year or	but within		undiscounted
	amount	on demand	5 years	Over 5 years	cash flow
	HK$	HK$	HK$	HK$	HK$
2024
- Trade and other payables	3,967,381	3,967,381	-	-	3,967,381
- Amount due to a director	2,097,277	2,097,277	-	-	2,097,277
- Lease 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
2023
- Trade and other payables	1,339,799	1,339,799	-	-	1,339,799
- Amount due to a director	948,548	948,548	-	-	948,548
- Lease liabilities	200,854	142,100	67,050	-	209,150
- Bank borrowings	5,299,556	930,552	3,722,208	1,240,736	5,893,496
	7,788,757	3,360,999	3,789,258	1,240,736	8,390,993

26.6

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 measured at fair value

During the year, there were no transfer between Level 1 and Level 2, nor transfer 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.

Page

27.

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.

28.

CAPITAL COMMITMENTS

There were no capital commitments at 31 March 2024.

29.

CONTINGENT LIABILITIES

There were no contingent liabilities at 31 March 2024.

30.

ULTIMATE CONTROLLING PARTY

The Directors are of the opinion that the ultimate controlling party was Mr. Chi Kit Law as at 31 March

2024.

31.

RECLASSIFICATION

Certain comparative figures have been reclassified to conform to the current year presentation.

32.

EVENTS AFTER THE REPORTING DATE

On 3 April 2024, pursuant to the convertible loan note agreement, further 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, further 3,409,090 shares of the

Company were issued and allotted at £0.01 each to the Subscriber.

On 25 April 2024, RC365 Business Advisory Limited was struck off and its investment cost had been

fully impaired as at 31 March 2024.

On 15 May 2024, pursuant to the convertible loan note agreement, further 5,357,143 shares of the

Company were issued and allotted at £0.01 each to the Subscriber.

On 22 July 2024, a money lender license was granted to the Group through the acquisition of the entire

issued share capital of its wholly owned subsidiary, HC Capital Group Limited, for a cash consideration

of approximately HK$230,000. HC Capital Group Limited is licenced and regulated in Hong Kong

under the Money Lenders Ordinance (Chapter 163).

On 26 June 2024, pursuant to the convertible loan note agreement, further 4,507,211 shares of the

Company were issued and allotted at £0.01 each to the Subscriber.

Page

Company statement of changes in equity

for the year ended 31 March 2024

The accompanying notes to the consolidated financial statements on pages 45 to 88 form an integral part of

these consolidated financial statements.

capital

premium

Translation

reserve

Convertible

loan note

reserve

Accumulated

losses

Total

HK$

At 1 April 2022

11,500,995

16,576,592

(26,281)

(6,279,560)

21,771,846

Loss for the year

(2,643,257)

Exchange differences on

translation of financial

statements of foreign

operations

(414,953)

Total comprehensive

expenses

(414,953)

(2,643,257)

(3,058,210)

Issue of share capital

17,300,925

At 31 March 2023 and at

1 April 2023

28,801,920

16,576,592

(441,134)

(8,922,817)

36,014,561

Loss for the year

(37,146,875)

Exchange differences on

translation of financial

statements of foreign

operations

827,070

Total comprehensive

expenses

827,070

(37,146,875)

(36,319,805)

Issue of share capital

1,124,025

32,752,495

33,876,520

Issue of convertible loan

note

2,957,651

At 31 March 2024

29,925,945

49,329,087

385,936

2,957,651

(46,069,692)

36,528,927

Page

Company statement of cash flows

for the year ended 31 March 2024

The accompanying notes to the consolidated financial statements on pages 45 to 88 form an integral part of

these consolidated financial statements.

2024

2023

HK$

Cash flows from operating activities

Loss before income tax

(37,146,875)

(3,058,210)

Adjustments for:

Amortisation of intangible assets

1,006,626

Fair value loss on financial assets at FVPL

33,470,752

Fair value gain on contingent consideration

(874,478)

Net gain on disposal of financial assets at FVPL

(80,883)

Impairment losses on investment in a subsidiary

821

Bank interest income

(280)

Operating cashflow before working capital changes

(3,624,317)

(3,058,210)

(Increase)/ decrease in amount due from a subsidiary

(2,331,954)

3,329,524

Increase in other payables

824,163

125,786

Increase in prepayments

(3,053)

Increase in other receivables

(517,876)

Increase in amount due to subsidiaries

831

Net cash (used in)/generated from operating activities

(5,652,206)

397,100

Cashflow from investing activities

Acquisition of subsidiaries

(1,420,534)

Proceeds from disposal of financial assets at FVPL

379,496

Interest received

280

Net cash used in investing activities

(1,040,758)

Cashflow from financing activities

Proceeds from issue of convertible loan note

5,967,000

Net cash from financing activities

5,967,000

Net change in cash and cash equivalents

(725,964)

Effect of exchange rate changes

767,062

(397,100)

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at the end of the year

41,098

Page

33.

SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation:

The separate financial statements of the Company are presented as required by the Companies Act

2006. As permitted by that Act, the separate financial statements have been prepared in accordance

with UK-adopted International Accounting Standards.

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

policies adopted are the same as those set out in note 2 to the consolidated financial statements. In

addition, investments in subsidiaries are stated at cost less, where appropriate, provision for impairment

34.

LOSS ATTRIBUTABLE TO SHAREHOLDERS

Under section 408 of the Companies Act 2006, the Company is exempt from the requirement to

present its own income statement. The loss attributable to the Company for the year ended 31 March

2024 was HK$3,676,123 before the effect of fair value loss on financial assets at FVPL of

HK$33,470,752 (2023: loss of HK$2,643,257)

35.

STAFF COSTS

During the years ended 31 March 2024 and 2023, all Directors and staff are employed by wholly owned

subsidiaries of the Company, and therefore there were no Directors’ remuneration and staff costs.

36.

AMOUNT DUE FROM A SUBSIDIARY/DUE TO A SUBSIDIARY

The amounts due are unsecured, interest-free and repayable on demand.

37.

FINANCIAL INSTRUMENTS

37.1

Credit risk

The main credit risk relates to the other receivables and amount due from a subsidiary. The

Directors are of the opinion that these is no significant increase in credit risk on other

receivables since payment record is closely monitored. The Directors have assessed the

financial position of the subsidiary and there is no indication of default.

37.2

Liquidity risk

The main liquidity risk relates to the other payables and amount due to a subsidiary. The

Company’s prudent policy is to regularly monitor its current and expected liquidity

requirements, to ensure that it maintains sufficient reserves to meet its liquidity requirements

in the short term and longer term.

37.3

Capital risk management

The Company’s capital management objectives are to ensure its ability to continue as a going

concern and to provide an adequate return for shareholders.

The Company actively and regularly reviews and manages its capital structure and makes

adjustments in light of changes in economic conditions. In order to maintain or adjust the

capital structure, the Company may adjust the amount of dividends paid to shareholders, issue

new shares or raises new debt financing.

Page

38.

INTERESTS IN SUBSIDIARIES

Particulars of the Company’s subsidiaries as at 31 March 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

RC365 Business

Advisory Limited

Malaysia

USD100

100%

Not yet

commenced