Royal Century Resources : Announcement of Annual Results for the year ended 31 March 2017

Royal Century Resources Holdings Limited 仁德資源控股有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 8125)

ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2017 CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET ("GEM") OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement, for which the directors of Royal Century Resources Holdings Limited (the "Company") collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM of the Stock Exchange (the "GEM Listing Rules") for the purpose of giving information with regard to the Company. The directors of the Company (the "Directors"), having made all reasonable enquiries, confirm that, to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

THE FINANCIAL STATEMENTS Annual Results

The board of Directors (the "Board") of Royal Century Resources Holdings Limited (the "Company") announces the audited consolidated results of the Company and its subsidiaries (collectively referred to as the "Group") for the year ended 31 March 2017 together with the comparative audited figures for the previous year as follows:

C ON SO L ID AT E D S TA TE M EN T O F COMPREHENSIVE INCOME	PR O FI T	O R L OSS AN D	O TH ER
FOR THE YEAR ENDED 31 MARCH 2017
Notes	2017 HK$'000	2016 HK$'000
Revenue	4	54,524	101,048
Cost of sales	(64,435)	(86,352)
Gross (loss)/profit	(9,911)	14,696
Other income Increase/(Decrease) in fair value of an investment property	6	741 120	790 (2,144)
Administrative expenses	(25,787)	(20,713)
Finance costs	7	(185)	(158)
Share of results of a joint venture	-	(390)
Loss before tax	(35,022)	(7,919)
Income tax expense	8	(12)	(1,451)
Loss for the year attributable to owners of the Company	9	(35,034)	(9,370)

Other comprehensive (expense)/income for the year

Items that may be reclassified subsequently to profit or loss:

Exchange differences arising on translation

of foreign operations (122) 45

Total comprehensive expenses for the year

attributable to owners of the Company (35,156) (9,325)

Loss per share	11
Basic and diluted (HKcents)	(9.89)	(2.84)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2017

Notes	2017 HK$'000	2016 HK$'000
Non-current assets Plant and equipment	2,247	2,310
Investment property Investment in a joint venture	22,500 -	22,380 -
24,747	24,690
Current assets Loan receivables	12	26,080	-
Inventories	13	8,032	-
Trade and other receivables	14	21,242	43,214
Amounts due from customers for contract work	10,072	48,538
Amount due from a substantial shareholder	15	5	5
Amount due from a joint venture Tax recoverable	15	- 345	- 625
Pledged bank deposit	300	-
Bank balances and cash	60,027	25,268
126,103	117,650
Current liabilities Trade and other payables	16	4,140	32,534
Amounts due to customers for contract work	519	6,128
Income tax payable	237	929
Obligation under a finance lease	87	85
Secured bank borrowing	6,964	7,256
11,947	46,932
Net current assets	114,156	70,718
138,903	95,408

2017 2016

HK$'000 HK$'000

Capital and reserves

Share capital	154,851	76,113
Reserves	(16,263)	18,893
Total equity	138,588	95,006
Non-current liabilities Deferred tax liabilities	225	225
Obligation under a finance lease	90	177
315	402
138,903	95,408

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

   The Company was incorporated in Hong Kong as a company with limited liability and its share are listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited. The addresses of the registered office and principal place of business of the Company are disclosed in the corporate information section to the annual report.

   The Company is an investment holding company. The principal activities of the Company and its subsidiaries (hereinafter collectively referred to as the "Group") are provision of design and fitting-out service and provision of design and procurement of furnishings and decorative materials services. During the year, the Group has extended its business into money lending and sourcing and merchandising of fine and rare wines.

   The consolidated financial statements are presented in Hong Kong dollars ("HK$"), which is also the functional currency of the Company and its Hong Kong subsidiaries. Other than those Hong Kong subsidiaries, the functional currency of subsidiaries established in Singapore and the People's Republic of China ("PRC") is denominated in Singapore dollars ("SGD") and Renminbi ("RMB") respectively.

   The financial information relating to the years ended 31 March 2017 and 2016 included in this preliminary announcement of annual results for the year ended 31 March 2017 does not constitute the Company's statutory annual consolidated financial statements for those years but is derived from those financial statements. Further information relating to these statutory financial statements required to be disclosed in accordance with section 436 of the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) ("Companies Ordinance") is as follows:

   The Company has delivered the consolidated financial statements for the year ended 31 March 2016 to the Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Companies Ordinance and will deliver the consolidated financial statements for the year ended 31 March 2017 in due course.

   The Company's auditor has reported on the consolidated financial statements for the years. The auditor's report was unqualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report; and did not contain a statement under sections 406(2), 407(2) or (3) of the Companies Ordinance.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   The principal accounting policies applied in the preparation of these consolidated financial statements are set out in the annual report. These policies have been consistently applied to all the years presented, unless otherwise stated.

   2.1 Basis of preparation

   These consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs") (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards ("HKASs") and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants (the "HKICPA") and accounting principles generally accepted in Hong Kong. In addition, the consolidated financial statements include applicable disclosures required by the Rules Governing the Listing of Securities on the Growth Enterprise Market ("GEM") of the Stock Exchange of Hong Kong Limited (the "GEM Listing Rules") and the Companies Ordinance. These consolidated financial statements have been prepared on the historical cost basis except for investment property that is measured at fair values.

3. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ("HKFRSs")

   In the current year, the Group has applied the following new and revised HKFRSs, which include HKFRS, Hong Kong Accounting Standard ("HKAS(s)"), amendments and Interpretations ("Int(s)") issued by the Hong Kong Institute of Certified Public Accountants (the "HKICPA").

   Amendments to HKFRSs Annual Improvements HKFRSs 2012-2014 Cycle HKFRS 14 Regulatory Deferral Accounts

   Amendments to HKAS 1 Disclosure Initiative

   Amendments to HKAS 16 and HKAS 38

   Amendments to HKAS 16 and HKAS 41

   Clarification of Acceptable Methods of Depreciation and Amortisation

   Agriculture: Bearer Plants

   Amendments to HKAS 27 Equity Method in Separate Financial Statements

   Amendments to HKFRS 10, HKFRS 12 and HKAS 28

   Investment Entities: Applying the Consolidation Exception

   Amendments to HKFRS 11 Accounting for Acquisitions of Interests in Joint Operations

   The application of the new and revised HKFRSs in the current year has had no material impact on the Group's financial performance and positions for the current and prior years and/or on the disclosures set out in the consolidated financial statements.

   The Group has not early applied the following new and revised HKFRSs, that have been issued but are not yet effective.

   HKFRS 9 Financial Instruments2

   HKFRS 15 Revenue from Contracts with Customers and the related amendments2

   HKFRS 16 Leases3

   Amendments to HKAS 7 Disclosure Initiative1

   Amendments to HKAS 12 Recognition of Deferred Tax Assets for Unrealised Losses1

   Amendments to HKFRS 2 Classification and Measurement of Share-based Payment Transactions2

   Amendments to HKFRS 10 and HKAS 28

   Sale or Contribution of Assets between an Investor and its Associate or Joint Venture4

   1 Effective for annual periods beginning on or after 1 January 2017

   2 Effective for annual periods beginning on or after 1 January 2018

   3 Effective for annual periods beginning on or after 1 January 2019

   4 Effective date not yet been determined

   The directors of the Company anticipate that the application of the new and revised HKFRSs will have no material impact on the results and the financial position of the Group.

4. REVENUE

   Revenue represents revenue arising from design and fitting-out service provided, sales and procurement of furnishings and decorative materials service provided, interest income from money lending and sale of fine and rare wines. An analysis of the Group's revenue for the year is as follows:

   2017 HK$'000	2016 HK$'000
   Design and fitting-out service income Design and procurement of furnishings and decorative materials service income	45,890 5,228	97,043 4,005
   Interest income from money lending	1,715	-
   Sale of fine and rare wines	1,691	-
   54,524	101,048

5. SEGMENT INFORMATION

   Information reported to the Chief Executive Officer (the "CEO"), being the chief operating decision maker, for the purposes of resource allocation and assessment of segment performance focuses on types of goods or services delivered or provided. The directors of the Company have chosen to organise the Group around differences in services. No operating segments identified by the CEO has been aggregated in arriving at the reportable segments of the Group.

   Specifically, the Group's reportable and operating segments are as follows:

6. Provision of design and fitting-out service ("Design and fitting-out service");

7. Provision of design and procurement of furnishings and decorative materials service ("Design and procurement of furnishings and decorative materials service");

8. Money lending ("Money lending"); and

9. Sourcing and merchandising of fine and rare wines ("Wines merchandising").

Segment revenue and results

The following is an analysis of the Group's revenue and results by reportable and operating segment:

For the year ended 31 March 2017

Design and procurement of furnishings

Design and and decorative

fitting-out materials Money Wines

service service lending merchandising Total

HK$'000 HK$'000 HK$'000 HK$'000 HK$'000

Segment revenue 45,890 5,228 1,715 1,691 54,524

Segment profit/(loss) (17,665) 816 1,671 (730) (15,908)

Other income 691

Central administration costs (19,740)

Increase in fair value of an investment

property 120

Share of results of a joint venture -

Finance costs (185)

Loss before tax (35,022)

For the year ended 31 March 2016

Design and procurement of furnishings

Design and and decorative fitting-out materials

service service Total

HK$'000 HK$'000 HK$'000

(Restated) (Restated) (Restated)

Segment revenue 97,043 4,005 101,048

Segment profit 5,186 2,636 7,822

Other income 786

Central administration costs (13,835)

Decrease in fair value of an investment property (2,144)

Share of results of a joint venture (390)

Finance costs (158)

Loss before tax (7,919)

The accounting policies of the operating segments are the same as the Group's accounting policies. Segment profit/(loss) represents the profit/(loss) earned by each segment without allocation of other income, central administration costs (including directors' emoluments), increase/(decrease) in fair value of an investment property, finance costs and shares of results of a joint venture. This is the measure reported to the CEO for the purposes of resource allocation and performance assessment.

Segment assets and liabilities

The following is an analysis of the Group's assets and liabilities by reportable and operating segment:

2017 HK$'000	2016 HK$'000
Segment assets Design and fitting-out service	20,193	56,759
Design and procurement of furnishings and decorative materials service	5,580	32,747
Money lending	26,080	-
Wines merchandising	8,560	-
Total segment assets	60,413	89,506
Unallocated corporate assets	90,437	52,834
Total assets	150,850	142,340
Segment liabilities Design and fitting-out service	1,151	19,299
Design and procurement of furnishings and decorative materials service	887	17,713
Money lending Wines merchandising	- -	- -
Total segment liabilities	2,038	37,012
Unallocated corporate liabilities	10,224	10,322
Total liabilities	12,262	47,334

For the purpose of monitoring segment performance and allocating resources between segments:

• all assets are allocated to reportable segments other than certain plant and equipment, investment property, investment in a joint venture, certain prepayments, deposits and other receivables, amount(s) due from a substantial shareholder/a joint venture, tax recoverable and bank balances and cash as these assets are managed on a group basis.

• all liabilities are allocated to reportable segments other than certain accrued expenses and other payables, amount due to a director, obligation under a finance lease, income tax payable, secured bank borrowing, and deferred tax liabilities as these liabilities are managed on a group basis.

Other segment information

For the year ended 31 March 2017

Design and

procurement of furnishings

and Design and decorative

fitting-out materials Money Wines

service service lending merchandising Unallocated Total

HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000

Amounts included in the measure of segment profit or loss or segment assets:

Impairment loss on trade

receivables 661 - - - - 661

Reversal of impairment loss of trade and other

receivables (50) - - - - (50)

Amounts regularly provided to the CEO but not included in the measure of segment profit or loss or segment assets:

Increase in fair value of

an investment property - - - - 120 120

Impairment loss on amount due from a

joint venture - - - - 356 356

Depreciation of plant and

equipment 297 1 - 5 801 1,104

Additions to plant and

equipment	- - - 51 991	1,042
Bank interest income	- - - - 4	4
Finance costs	- - - - 185	185

For the year ended 31 March 2016

Design and procurement of furnishings

Design & and decorative fitting-out materials

service service Unallocated Total

HK$'000 HK$'000 HK$'000 HK$'000

(Restated) (Restated) (Restated) (Restated)

1,292	728	- 2,020
(4)	-	- (4)

Amounts included in the measure of segment profit or loss or segment assets:

Impairment loss on trade receivables Reversal of impairment loss of

trade and other receivables

Amounts regularly provided to the CEO but not included in the measure of segment profit or loss or segment assets:

Decrease in fair value of

an investment property - - 2,144 2,144 Impairment loss on amount due

from a joint venture - - 271 271

Share of results of a joint venture	-	-	390	390
Depreciation of plant and equipment	328	1	120	449
Additions to plant and equipment	29	-	1,662	1,691
Addition to an investment property	-	-	24,524	24,524
Bank interest income	-	-	(6)	(6)
Finance costs	-	-	158	158

Geographical information

The Group's operations are located in Hong Kong and the PRC.

The Group's revenue from external customers is presented based on the location of the operations and information about its non-current assets is presented based on the geographical location of the assets as detailed below:

Revenue from

external customers Non-current assets 2017 2016 2017 2016

HK$'000 HK$'000 HK$'000 HK$'000

Hong Kong 54,524 101,048 24,741 24,690 PRC - - 6 -

54,524 101,048 24,747 24,690