Royal Catering : THIRD QUARTERLY RESULTS ANNOUNCEMENT FOR THE NINE MONTHS ENDED 31 DECEMBER 2020

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (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.

ROYAL CATERING GROUP HOLDINGS COMPANY LIMITED ެᖗ᎛භණྠછٰϞࠢʮ̡

(incorporated in Cayman Islands with limited liability)

(Stock Code: 8300)

THIRD QUARTERLY RESULTS ANNOUNCEMENT FOR THE NINE MONTHS ENDED 31 DECEMBER 2020

The board (the "Board") of directors (the "Directors") of Royal Catering Group Holdings Company Limited (the "Company") is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (together, the "Group") for the nine months ended 31 December 2020. This announcement, containing the full text of the Third Quarterly Report of the Company for the nine months ended 31 December 2020 (the "Third Quarterly Report"), complies with the relevant requirements of the Rules Governing the Listing of Securities on GEM of the Stock Exchange (the "GEM Listing Rules") in relation to information to accompany preliminary announcement of third quarterly results. Printed version of the Third Quarterly Report will be dispatched to the shareholders of the Company and available for viewing on the GEM website atwww.hkgem.comand the website of the Company atwww.hkrcg.com.hkon 10 February 2021.

By order of the Board

Royal Catering Group Holdings Company Limited

Wong Man Wai

Chairman, Chief Executive Officer and Executive Director

Hong Kong, 10 February 2021

As at the date of this announcement, the executive Directors are Mr. Wong Man Wai, Mr. Chan Chak To Raymond and Ms. Lam Wai Kwan; and the independent non-executive Directors are Mr. Ma Yiu Ho Peter, Mr. Cai Chun Fai and Mr. Ng Sai Cheong.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to 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.

This announcement will remain on the "Latest Listed Company Information" page of the GEM website atwww.hkgem.hkfor at least seven days from the date of its posting. This announcement will also be published on the Company's website atwww.hkrcg.com.

CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE")

GEM has been positioned as a market designed to accommodate small and mid-sized 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.

Given that the companies listed on GEM are generally small and mid-sized companies, 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 report, 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 report.

This report, for which the directors (collectively the "Directors" and individually a "Director") of Royal Catering Group Holdings Company Limited (the "Company", together with its subsidiaries, the "Group") collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on GEM of the Stock Exchange (the "GEM Listing Rules") for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this report 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 report misleading.

Pages

Financial Highlights2

Unaudited Condensed Consolidated Statements of Profit or Loss

and Other Comprehensive Income3

Unaudited Condensed Consolidated Statement of Changes in Equity4

Notes to the Unaudited Condensed Consolidated Financial Statements5

Management Discussion and Analysis11

• •The Group recorded an unaudited revenue of approximately HK$33.0 million for the nine-month period ended 31

  December 2020 (nine-month period ended 31 December 2019: approximately HK$58.4 million), representing adecrease of approximately 43.5% over the same period of the previous year.

• •The Group recorded an unaudited loss and total comprehensive loss attributable to owners of the Company ofapproximately HK$1.2 million for the nine-month period ended 31 December 2020 (nine-month period ended 31December 2019: unaudited loss and total comprehensive income attributable to owners of the Company ofapproximately HK$21.6 million).

• •The basic and diluted loss per share attributable to owners of the Company for the nine-month period ended 31

  December 2020 was HK0.04 cents (nine-month period ended 31 December 2019: the basic and diluted loss pershare attributable to owners of the Company of HK0.82 cents).

• •The Board does not recommend the payment of an interim dividend for the nine-month period ended 31 December2020.

The board (the "Board") of the Company is pleased to announce the unaudited condensed consolidated results of theGroup for the three-month and nine-month period ended 31 December 2020, together with the unaudited comparativefigures for the respective corresponding period in 2019 as follows:

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OFPROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the three-month and nine-month period ended 31 December 2020

Three-month periodNine-month periodended 31 Decemberended 31 December 2020201920202019

Notes

(Unaudited) (Unaudited) (Unaudited)(Unaudited)

Cost of inventories sold

Other revenue and other incomeStaff costsDepreciation expenses

Amortisation on intangible assetsProperty rentals and related expensesFuel and utility expensesUnrealised loss arising from change in fair value of

Administrative expenses

RevenueCost of inventories sold 4	11,136 (2,309)	14,305 (2,821)	33,039 (6,899)	58,351 (11,573)
Gross profit Other revenue and other incomeStaff costsDepreciation expenses Amortisation on intangible assetsProperty rentals and related expensesFuel and utility expensesUnrealised loss arising from change in fair value offinancial assets at fair value through profit or lossAdministrative expenses	8,827 1,914 (5,129) (1,072) (35) (399) (436) - (3,441)	11,484 184 (8,554) (7,258) (301) (739) (637) - (4,730)	26,140 9,865 (15,627) (3,229) (104) (1,213) (1,247) - (14,007)	46,778 2,273 (27,601) (19,481) (898) (2,248) (2,245) (53) (16,231)
Profit/(loss) from operations Share of result of an associateFinance costs	229(10)(194)	(10,551) (35)(504)	578 (46)(726)	(19,706) (63) (1,567)
Profit/(loss) before taxIncome tax credit/(expenses) 6 7	25 77	(11,090) (192)	(194)(371)	(21,336) (1,247)
Profit/(loss) and total comprehensive income/ (loss) for the period	102	(11,282)	(565)	(22,583)
Profit/(loss) and total comprehensive income/ (loss) for the period attributable to: Owners of the Company Non-controlling interests	(23) 125	(11,116) (166)	(1,155) 590	(21,602) (981)
102	(11,282)	(565)	(22,583)
Loss per share attributable to owner of the Company Basic and diluted loss per share (HK cents) 8	-	(0.04)	(0.82)

Note: Share option reserve represents the fair value of services estimated to be received in exchange for the grant of the relevant shareoptions over the relevant vesting periods, the total of which is based on the fair value of the share options at grant date. Theamount for each period is determined by spreading the fair value of the share options over the relevant vesting period (if any) andis recognised as staff costs and related expenses with a corresponding increase in the share option reserve.

The Company was incorporated in the Cayman Islands on 19 August 2015 as an exempted company with limitedliability under the Companies Law of the Cayman Islands. The shares of the Company have been listed on GEM ofThe Stock Exchange of Hong Kong Limited (the "Stock Exchange") by way of placing (the "Listing") with effectfrom 8 August 2016. The address of the Company's registered office is Second Floor, Century Yard, CricketSquare, P.O. Box 902, Grand Cayman, KY1-1103, Cayman Islands. The principal place of business of theCompany is Unit 1201, 12th Floor, Great Smart Tower, 230 Wan Chai Road, Wan Chai, Hong Kong. Its ultimateholding company is Fortune Round Limited, a company incorporated in the British Virgin Islands ("BVI") with limitedliability and wholly-owned by Mr. Wong Man Wai ("Mr. Wong"), a director of the Company (the "Director").

The Company is an investment holding company and its subsidiaries (collectively referred to as the "Group") areprincipally engaged in provision of casual dining food catering services in Hong Kong.

The unaudited condensed consolidated financial statements (the "Quarterly Financial Statements") arepresented in Hong Kong dollar ("HK$"), which is also the functional currency of the Company and all values arerounded to the nearest thousand (HK$'000), unless otherwise stated.

2.

BASIS OF PREPARATION AND PRINCIPAL ACCOUNTING POLICIES

The Quarterly Financial Statements for the nine-month period ended 31 December 2020 have been prepared inaccordance with accounting principles generally accepted in Hong Kong which include Hong Kong FinancialReporting Standards, Hong Kong Accounting Standards and Interpretations (collectively, "HKFRSs") issued by theHong Kong Institute of Certified Public Accountants (the "HKICPA") and the applicable disclosures required by theGEM Listing Rules. Except for the application of new and amendment to HKFRSs issued by the HKICPA, which areeffective for the annual periods beginning on or after 1 April 2020, the principal accounting policies used in theQuarterly Financial Statements for the nine-month period ended 31 December 2020 are consistent with thoseadopted in the preparation of the Group's annual financial statements for the year ended 31 March 2020.

Application of new and amendments to HKFRSs

In the current period, the Group has applied all new and amendment to HKFRSs issued by the HKICPA that areeffective for the Group's financial year beginning on or after 1 April 2020:

Amendments to HKAS 1 and HKAS 8Definition of MaterialAmendments to HKFRS 3

Definition of a Business

Amendment to HKFRS 9, HKAS 39 and HKFRS 7

Interest Rate Benchmark ReformThe application of the new and amendment to HKFRSs in the current period has had no material effect on the amounts reported and/or the disclosures set out in the Quarterly Financial Statements.

The Quarterly Financial Statements for the nine-month period ended 31 December 2020 have not been audited by the Group's auditors but have been reviewed by the Company's audit committee.

3.

SEGMENT INFORMATION

The Group is principally engaged in the provision of catering services through a chain of casual dining food catering services restaurants. Information reported to the Group's management for the purpose of resources allocation and performance assessment, focuses on the operating results of the Group as a whole as the Group's resources are integrated and no discrete operating segment financial information is available. Accordingly, no additional reportable segment and geographical information have been presented.

Type of products and services: Restaurants operationsSales of food Franchise fee income	11,136--	14,29312-	33,039--	58,07165 215
11,136	14,305	33,039	58,351

Timing of revenue recognition: At a point in timeOver time	11,136-	14,305-	33,039-	58,136 215
11,136	14,305	33,039	58,351

Transaction price allocated to the remaining performance obligation for contracts with customers

The Group has applied the practical expedient in paragraph 121 of HKFRS 15 to its revenue such that the Group does not disclose information about revenue that the Group will be entitled to when it satisfies the remaining performance obligations under the contracts as all contract works have an original expected duration of one year or less.

Three-month periodNine-month periodended 31 Decemberended 31 December 2020201920202019

HK$'000HK$'000HK$'000HK$'000(Unaudited) (Unaudited) (Unaudited)(Unaudited)

Three-month periodNine-month periodended 31 Decemberended 31 December 2020 2019 2020 2019

HK$'000HK$'000HK$'000HK$'000(Unaudited) (Unaudited) (Unaudited)(Unaudited)

Cost of inventories sold2,309 11,573Depreciation of property, plant and equipment3022,1799052,32413,467

2,821

6,899

6,014

Depreciation of right-of-use assets7705,079

Amortisation on intangible assets35301104898Lease payments under operating leases in respect ofland and buildings----Employee benefit expenses (including directors'

Interest on bank borrowings Interest on lease liabilities	-194	44460	11715	2041,363
194	504	726	1,567

remuneration):
- Salaries, allowance and benefits in kind	4,946	8,325	15,072	26,697
- Retirement benefit scheme contributions	183	229	555	904
5,129	8,554	15,627	27,601
7

Current tax:- Hong Kong Profits Tax Deferred tax:- Tax credit	(59) (18)	210 (18)	425 (54)	1,301 (54)
(77)	192	371	1,247

On 21 March 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No.7) Bill 2017(the "Bill") which introduces the two-tiered profits tax rates regime. The Bill was signed into law on 28 March 2018and was gazetted on the following day. Under the two-tiered profits tax rates regime, the first HK$2 million of profitsof the qualifying group entity will be taxed at 8.25%, and profits above HK$2 million will be taxed at 16.5%. Theprofits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a flatrate of 16.5%.

Accordingly, the Hong Kong Profits Tax of the qualifying group entity is calculated at 8.25% on the first HK$2million of the estimated assessable profits and at 16.5% on the estimated assessable profits above HK$2 million forboth periods.

The computations of basic and diluted loss per share attributable to owners of the Company are based on thefollowing data:

Three-month periodNine-month periodended 31 Decemberended 31 December 2020201920202019

HK$'000HK$'000HK$'000HK$'000(Unaudited) (Unaudited) (Unaudited)(Unaudited)

Three-month periodNine-month periodended 31 Decemberended 31 December 2020201920202019'000'000'000'000(Unaudited) (Unaudited) (Unaudited)(Unaudited)

The calculation of basic loss per share for the three-month and nine-month periods ended 31 December 2019 and2020 was based on the loss for the three-month and nine-month period attributable to owners of the Companyand the weighted average number of ordinary shares.

The computation of diluted loss per share does not assume the exercise of the Company's options because the exercise price of those options was higher than the average market price for shares for both periods.

9.

DIVIDEND

No dividend has been paid or declared by the Company for the nine-month period ended 31 December 2020 (for the nine-month period ended 31 December 2019: Nil).

Loss - Loss for the purpose of basic and diluted loss per shares

(23)

(11,116)

(1,155)

(21,602)

Number of shares - Weighted average number of ordinary shares for the purpose of basic and diluted loss per share

2,643,360

2,643,360

2,643,360

2,643,360

• 10. MATERIAL RELATED PARTY TRANSACTIONS

  Save as disclosed elsewhere in the Quarterly Financial Statement, the Group had no other material transactionswith related parties during the period.

  The Group has entered into the master agreement dated 31 December 2018 and the supplemental agreementdated 30 September 2019 with Tensel Investment Limited ("Tensel") pursuant to which the transactions under themaster agreement and the supplemental agreement constituted continuing connected transactions under Chapter20 of the GEM Listing Rules. Details of the master agreement and the supplemental agreement are set out in theannouncements of the Company dated 31 December 2018 and 2 October 2019.

  Upon the completion of the acquisitions of 30% of issued share capital of DHY from Tao Heung Seafood and 40%,40% and 40% of issued share capital of Sky Grand, Forever Drinks and Bright Up from Charm Sky on 1 October2019, Tensel was no longer a connected person of the Company and the master agreement and the supplementalagreement no longer constituted continuing connected transactions of the Company. Further details are set out inthe announcement of the Company dated 2 October 2019.

• 11. EVENTS AFTER THE REPORTING PERIOD

The COVID-19 outbreak and the recent government anti-pandemic measures has brought about additionaluncertainties in the Group's operating environment and has impacted the Group's operations and financial position.The Group has been closely monitoring the impact of the developments on the Group's businesses and will reviewexisting contingency measures. The Group's existing contingency measures include, but is not limited to:

• (iii) revisiting the operational performance of each restaurant and adjusting our future restaurants expansion plan.

Since the development of the COVID-19 remains uncertain, it is not practicable to estimate the full financial effectthat the COVID-19 outbreak may have had on the Group's operations.

BUSINESS REVIEW

We are a food and beverage group in Hong Kong operating casual dining restaurants under a portfolio of brands both atthe HKIA and in the urban area of Hong Kong. As at 31 December 2020, we had six restaurants in operation including"Chinese Kitchen (ʕ਷ᄼג )" which was temporarily closed from 10 February 2020.

During the nine-month periods ended 31 December 2019 and 2020, we have been operating the following restaurants:

Proportion ofownership interest ofOperations duringthe restaurants heldSelf-owned/the nine-month period by the Group as at

ɽթ̨ᝄCentralSelf-owned100%

✔ (Note 1) - ✔✔ ✔ ✔-- ✔ -

100% -100% 90% 90% 90% - -100% -

• Du Hsiao Yueh Restaurant (ܓʃ˜ )Harbour City,Franchised90%

  Tsim Sha Tsui

• Du Hsiao Yueh Restaurant (ܓʃ˜ )Times Square,Franchised90%

  Causeway Bay

• Du Hsiao Yueh Restaurant (ܓʃ˜ )V Walk, Nam CheongFranchised90%

Flamingo BloomIFC, CentralFranchised100%

Flamingo Bloom Franchised100%Stanley Plaza, StanleyHanlin Tea Room/Hut (ጫ؍঩᎜ /಍)Harbour City,Franchised100%Tsim Sha Tsui

Hanlin Tea Room/Hut (ጫ؍঩᎜ /಍)Grand Plaza, Mong Kok Franchised100%

Notes:
1.	"Chinese Kitchen (ʕ਷ᄼג )" at the HKIA was temporarily closed from 10 February 2020 until further notice of reopening, further
details of which are set out in the Company's announcement dated 7 February 2020.
2.	"Macao Harbour (ڛီಥዦژ᎛ᝂ )" at the HKIA was closed in October 2019.
3.	"Flamingo Bloom" at IFC, Central was closed in November 2019.
4.	"Flamingo Bloom" at Stanley Plaza, Stanley was commenced of business in April 2019 and was closed in February 2020.
5.	"Hanlin Tea Room/Hut (ጫ؍঩᎜/಍ )" at Grand Plaza, Mong Kok was closed in January 2020.

The Group's operations, financial performance and condition were affected by the outbreak of the COVID-19 (the"Pandemic") during the nine-month period ended 31 December 2020. Since June 2019, consumers' sentiment becamesluggish and the demand for dining and catering was affected in the midst of widespread social movements across theterritory. The financial performance of the Group was further worsened by the Pandemic. The Pandemic severelydiminished the demand for dining and catering and in response to the Pandemic. The Hong Kong government imposedcertain anti-pandemic measures and consumers generally preferred to stay home, avoid dining out and maintain socialdistancing. Accordingly, the service capability of the restaurants operated by the Group was reduced and the number ofcustomers visiting the Group's restaurants has decreased. As a result, the Group's revenue and operating cash flowsworsened during the nine-month period ended 31 December 2020. As at the date of this quarterly report, thedevelopment of the Pandemic remains uncertain. In response to the uncertainty in the Hong Kong economy and inparticular the catering industry, the Group will take conservative and prudent business strategies in order to support dailybusiness operations and to cope with the economic uncertainty in the near future, as well as identifying and exploringother business opportunities to achieve stable return.

As disclosed in the Company's announcement dated 10 September 2020, the Group has obtained a money lenderslicence in Hong Kong under the Money Lenders Ordinance (Chapter 163 of Laws of Hong Kong) on 10 September 2020for a period of 12 months til 10 September 2021. In view of the uncertainty in the Hong Kong economy, the Group maycarry out the money lending business, which will be funded by the Group's internal resources, if the Group sees fit.During the nine-month period ended 31 December 2020, the Group has not yet commenced the money lendingbusiness.

The casual dining food catering services will continue to be the core business of the Group.

FINANCIAL REVIEWRevenue

The revenue of the Group decreased by approximately 43.5% from approximately HK$58.4 million for the nine-monthperiod ended 31 December 2019 to approximately HK$33.0 million for the nine-month period ended 31 December 2020.The decrease in revenue was mainly attributable to the negative impacts of the Pandemic to our existing restaurants.

Cost of inventories sold

Cost of inventories sold primarily consists of the cost of all the food and beverages used in restaurant operations. The cost of inventories sold of the Group decreased by approximately 40.5% from approximately HK$11.6 million for the nine-month period ended 31 December 2019 to approximately HK$6.9 million for the nine-month period ended 31 December 2020. The decrease in cost of inventories sold was mainly attributable to the decrease in revenue during the period.

Gross profit and gross profit margin

The Group's gross profit, which is equal to revenue minus cost of inventories sold, for the nine-month period ended 31 December 2020 was approximately HK$26.1 million, representing a decrease of approximately 44.2% from approximately HK$46.8 million for the nine-month period ended 31 December 2019. The decrease in gross profit was mainly attributable to the decrease in revenue during the period.

The gross profit margin for the Group's restaurants were 80.1% and 79.1% for the nine-month periods ended 31December 2019 and 2020, respectively.

The relatively high and stable gross profit margin for the restaurants operating for the nine-month periods ended 31December 2019 and 2020 were attributable to the centralisation of purchases in bulk orders and the discounts throughthe centralised warehouse services from a services provider to the Group.

Other revenue and other income

Dividend incomeSundry incomeTips incomeNet foreign exchange gainGain on the disposal of the trademarksGovernment subsidies

Interest incomeDividend incomeSundry incomeTips incomeNet foreign exchange gainGain on the disposal of the trademarksGovernment subsidies Rental concession	7-379---5,208 4,271	312 405 208 71 62 1,215- -
Total	9,865	2,273

Rental concession

Other revenue and other income primarily consist of interest income, sundry income, government subsidies and rentalconcession. The other revenue and other income of the Group increased by approximately 330.4% from approximatelyHK$2.3 million for the nine-month period ended 31 December 2019 to approximately HK$9.9 million for the nine-monthperiod ended 31 December 2020. The increase in other revenue and other income was mainly attributable to the government subsidies and rental concession for the nine-month period ended 31 December 2020.

Staff costs and employees

Staff costs primarily consist of salaries, wages and allowances, pension costs and other employee benefits. The staff costs of the Group decreased by approximately 43.5% from approximately HK$27.6 million for the nine-month period ended 31 December 2019 to approximately HK$15.6 million for the nine-month period ended 31 December 2020. As at 31 December 2020, the Group had 85 employees (as at 31 December 2019: 110 employees). The decrease in staff costs and number of employees was mainly due to decrease in revenue and number of operating restaurants during the nine-month period ended 31 December 2020 comparing to the same period of 2019, which was mainly because of the negative impacts of the Pandemic.

Remuneration is determined with reference to market terms and in accordance with the performance, qualification andexperience of each individual employee. Due to changes in local labour laws and the general increase in labour costs inHong Kong, the salary level of employees in the catering industry in Hong Kong has generally increased in recent years.The Directors expect that the staff costs per employee will continue to increase as inflationary pressures in Hong Kongcontinue to drive up wages after the Pandemic.

In addition to remuneration, the Group has adopted the Share Option Scheme (as defined below) and may grant optionsunder the Share Option Scheme (as defined below) to reward its employees, the Directors and other selected participantsfor their contributions to the Group. The Group also provide various types of trainings to our employees, including (i)inhouse continuous professional development seminars; and (ii) safety training programme to enhance safety awareness.

Depreciation

Our depreciation expenses mainly included the depreciation of right-of-use assets, building, leasehold improvements andcatering and other equipment and amounted to approximately HK$3.2 million for the nine-month period ended 31December 2020, representing a decrease of approximately 83.6% from approximately HK$19.5 million for the nine-month period ended 31 December 2019. The decrease in depreciation was mainly attributable to the impairment lossrecognised in respect of property, plant and equipment for the year ended 31 March 2020 and the drop in number ofoperating restaurants during the nine-month period ended 31 December 2020 comparing to the same period of 2019,which was mainly because of the negative impacts of the Pandemic.

Property rentals and related expenses

The property rentals and related expenses for the nine-month period ended 31 December 2020 amounted toapproximately HK$1.2 million, representing a decrease of approximately 45.5% from approximately HK$2.2 million forthe nine-month period ended 31 December 2019. The decrease in property rentals and related expenses was mainly dueto the drop in number of operating restaurants during the nine-month period ended 31 December 2020 comparing to thesame period of 2019, which was mainly because of the negative impacts of the Pandemic.

Fuel and utility expenses

Fuel and utility expenses primarily consist of fuel expenses, electricity expenses and water supplies of the Group. The fueland utility expenses of the Group decreased by approximately 45.5% from approximately HK$2.2 million for the nine-month period ended 31 December 2019 to approximately HK$1.2 million for the nine-month period ended 31 December

2020. The decrease in fuel and utility expenses was mainly attributable to the decrease in revenue mainly because of the negative impacts of the Pandemic.

Administrative expenses

The administrative expenses mainly represent expenses incurred for our operations, including cleaning expenses, consumables stores, transportation and travelling, credit card commission, entertainment, repair and maintenance, insurance, legal and professional fees and marketing and promotion expenses.

Administrative expenses decreased from approximately HK$16.2 million for the nine-month period ended 31 December 2019 to approximately HK$14.0 million for the nine-month period ended 31 December 2020, representing a decrease of approximately 13.6%, which was mainly due to the decrease in certain administration items, including travelling expenses, transportation and donation during the period.

Income tax expenses

The income tax expenses for the nine-month period ended 31 December 2020 amounted to approximately HK$0.4million, representing a decrease of approximately 66.7% as compared with that of approximately HK$1.2 million for thenine-month period ended 31 December 2019. The decrease in income tax expenses was mainly due to the decrease inthe taxable profit from certain of our restaurants during the period.

Finance costs

The Group's finance costs decrease from approximately HK$1.6 million for the nine-month period ended 31 December2019 to approximately HK$0.7 million for the nine-month period ended 31 December 2020. The decrease in financecosts was mainly due to the decrease in bank borrowings and lease liabilities during the period.

Loss

The Group recorded a loss of approximately HK$0.6 million for the nine-month period ended 31 December 2020 ascompared to a loss of approximately HK$22.6 million for the corresponding period in 2019. The decrease in loss wasmainly due to the government subsidies granted from Hong Kong government and rental concession during the period.The effect was partially offset by significant drop in revenue of the Group, which is mainly due to the drop in number ofoperating restaurants and negative impacts of the Pandemic during the period.

Use of unutilised proceeds from the Listing

The net proceeds from the Listing, after deducting the actual underwriting fees and expenses paid by the Company inconnection thereto, were approximately HK$41.3 million. The intended use of proceeds was set out in the prospectus ofthe Company dated 1 August 2016 (the "Prospectus") and has been subsequently amended as summarised in theannouncements of the Company dated 9 April 2018, 9 October 2018 and 24 June 2020 (the "Announcements"). Theamount of unutilised proceeds from the Listing for the intended use of proceeds as at 30 June 2020 and actual use ofproceeds from the Listing from 1 July 2020 to 31 December 2020 are set forth below:

Actual use ofproceeds fromproceeds fromthe Listing as at1 July to

unutilized

Amount of

Intended use	30 June 2020	31 December 2020
HK$'000	HK$'000
Staff costs in respect of restaurants' staff	12,797	6,135
Property rentals and related expenses	1,613	1,613
Total	14,410	7,748

For further details in relation to use of net proceeds from the Listing, please refer to the Prospectus and the Announcements. The Group plans to utilise the unutilised proceeds from the Listing during the year ending 31 March 2021. All the unutilised balances have been placed in licensed banks in Hong Kong.

Use of unutilised proceeds from issue of Shares

Apart from the net proceeds from the Listing, the Company raised funds from the following issue of shares of theCompany ("Shares"):

• 1.On 13 March 2017, the Company placed an aggregate of 202,800,000 new ordinary Shares to not less than sixplacees, who were independent third parties at the placing price of HK$0.15 per share (the "First Placing"). Thenet proceeds from the First Placing, after deducting the placing agent commission and other expenses incurred forthe First Placing, amounted to approximately HK$29.84 million. The net price per First Placing Share wasapproximately HK$0.147 and the closing price on the date of the First Placing agreement was HK$0.121 perShare.

2.

On 5 January 2018, the Company placed 440,560,000 new ordinary Shares to not less than six placees, who wereindependent third parties at the placing price of HK$0.105 per share (the "Second Placing"). The net proceedsfrom the Second Placing, after deducting the placing agent commission and other expenses incurred for theSecond Placing, amounted to approximately HK$45.2 million. The net price per Second Placing Share wasapproximately HK$0.103 and the closing price on the date of the Second Placing agreement was HK$0.101 perShare.

As disclosed in the Company's announcement dated 24 June 2020, the intended use of unutilised proceeds from theFirst Placing and the Second Placing (the "Placings Proceeds") was adjusted. The amount of unutilised PlacingProceeds for the intended use as at 30 June 2020 and the actual use of the Placing Proceeds from 1 July 2020 to 31December 2020 are set forth below:

Amount ofunutilizedActual use ofproceeds fromproceeds from

Intended usethe Placing as at

30 June 202031 December 2020

HK$'000HK$'000

1 July to

Acquiring a property in the urban area of Hong Kong

to operate a new restaurant by the Group	37,500	-
Property rentals and related expenses	5,710	4,335
Other operating expenses of restaurants	21,580	5,300
Total	64,790	9,635

The Company intends to utilise the unutilised Placing Proceeds as soon as practicable by 31 March 2021.

MATERIAL ACQUISITION AND DISPOSAL OF SUBSIDIARIES

There was no material acquisition or disposal of subsidiaries, associates or joint ventures for the nine-month periodended 31 December 2020.

SIGNIFICANT INVESTMENTS HELD

During the nine-month period ended 31 December 2020 and as at 31 December 2020, the Group did not hold anysignificant investments.

LIQUIDITY AND FINANCIAL RESOURCESCapital structure

There has been no material change in the capital structure of the Company since 31 March 2020.

Cash position

As at 31 December 2020, the cash and cash equivalents of the Group amounted to approximately HK$32.0 million (as at31 December 2019: approximately HK$49.5 million), which were mainly denominated in Hong Kong dollar, representinga decrease of approximately 35.4% as compared to that as at 31 December 2019. The decrease was mainly resultedfrom (i) repayment of bank borrowings and (ii) supporting the Group's daily business operations during the period underthe impact of the social movements during late 2019 and the Pandemic.

Borrowing

As at 31 December 2020, the total borrowings of the Group, all of which were denominated in Hong Kong dollars,amounted to approximately HK$13.4 million (as at 31 December 2019: approximately HK$34.3 million) and nooutstanding committed banking facilities (as at 31 December 2019: approximately HK$3.8 million), further details ofwhich are set out below:

• 1.bank borrowings of approximately HK$3.9 million, which bore the interest rate at 4.13% per annum, were repaidbefore 30 September 2020 (as at 31 December 2019 : approximately HK$ 3.9 million); and

• 2.approximately HK$13.4 million was derived from lease liabilities of the Group's properties and motor vehicles (as at

31 December 2019: HK$30.4 million), which had interest rate ranging from 1.99% to 5.19% per annum (as at 31

December 2019: ranging from 1.99% to 5.19% per annum). The decrease was mainly attributable to the drop in number of operating restaurants during the nine-month period ended 31 December 2020 comparing to the same period of 2019, resulting in decrease in lease liabilities arising from rental of operating restaurants.

Pledge of assets

As at 31 December 2020, the carrying amounts of motor vehicles of approximately HK$0.2 million was pledged (as at 31

December 2019: approximately HK$0.4 million).

Gearing ratio

As at 31 December 2020, the gearing ratio of the Group was approximately 23.7% (as at 31 December 2019:approximately 33.6%). The decrease was mainly attributable to the decrease in lease liabilities and bank borrowingsduring the period. The gearing ratio is calculated based on the total borrowings, which include bank borrowings andlease liabilities divided by the equity attributable to owners of the Company at the end of the respective period.

COMMITMENTS

As at 31 December 2020, the Group had no outstanding capital commitments (at 31 December 2019: approximatelyHK$2.6 million).

CONTINGENT LIABILITIES

As at 31 December 2020, the Group had no significant contingent liabilities (as at 31 December 2019: Nil).

FOREIGN EXCHANGE EXPOSURE

The Group operates in Hong Kong with majority of the transactions being settled in HK$, United States dollar ("USD")and Renminbi ("RMB"). Foreign exchange risk arises from future commercial transactions, recognised assets andliabilities, which are denominated in a currency that is not the functional currency of the Group.

The Group is not exposed to foreign exchange risk in respect of HK$ against the USD as long as this currency is pegged.

Since the transactions and monetary assets denominated in RMB are minimal for the nine-month periods ended 31December 2019 and 2020, the Group considers that there was no significant foreign exchange risk in respect of RMB forboth periods.

The Group did not have any foreign exchange contracts, interest or currency swaps, other financial derivatives or anyfinancial instruments for hedging purposes for the nine-month periods ended 31 December 2019 and 2020.

TREASURY POLICIES AND RISK MANAGEMENT

The main objective of the Group's treasury policies is to seek capital appreciation with the surplus fund in short term andnon-speculative in nature. The surplus fund is the fund after reserving the working capital requirement for the next12-month period of the Group and excluding any unused proceeds from the listing and other fund raising activities by the

Company including the Placing (as defined above). The investment activities of the Group shall be undertaken by the Investment Committee. Details of the Investment Committee is set out in the section "Corporate Governance Report" of 2020 annual report dated 30 June 2020.

As at 31 December 2020, the Group's credit risk is primarily attributable to trade receivables, deposits, other receivables and cash and cash equivalents.

As at 31 December 2019 and 2020, the Group's maximum exposure to credit risk which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties is arising from the carrying amount of the respective recognised financial assets as stated in the consolidated statement of financial position.

PRINCIPAL RISKS AND UNCERTAINTIES

The following are the principal risks and uncertainties faced by the Group, which may materially and adversely affect itsbusiness, financial condition or results of operations:

• 1.The Group's revenue derived from restaurants in Hong Kong may experience fluctuations from period to perioddue to seasonality and other factors.

• 2.All of the Group's revenue was derived from the restaurants in urban area in Hong Kong during the period underreview, therefore the Group's operation may be affected by any future development in urban area of Hong Kong.

• 3.During the period under review, the Group generated all of our revenue in Hong Kong. If Hong Kong experiencesany adverse economic condition due to events beyond our control, such as natural disasters, contagious diseaseoutbreaks, terrorist attacks, a local economic downturn, mass civil disobedience movements or if the localauthorities place additional restrictions or burdens on us or on our industry in general, our overall business andresults of operations may be materially and adversely affected. Recently, the Group's revenue decreased due to (i)the outbreak of the Pandemic; and (ii) the recent social unrest in Hong Kong arising from the widespread socialmovements across the territory.

Cost of inventories sold, staff costs and property rentals and related expenses contributed the majority of the Group'soperating cost. The following factors are uncertain and may affect the cost control measures of our Group:

• 1.The Group's business depends on reliable sources of large quantities of food ingredients such as vegetable andmeat. The price of food ingredients may continue to rise or fluctuate.

• 2.Minimum wage requirements in Hong Kong was raised from HK$34.5 per hour to HK$37.5 per hour with effectfrom 1 May 2019, and may further increase and affect our staff costs in the future.

• 3.As at 31 December 2020, the Group licensed or leased all the properties for its restaurants operating at the HKIAand in the urban area of Hong Kong. Therefore, the Group is exposed to risks relating to the commercial real estaterental market, including unpredictable and potentially high occupancy costs.

FUTURE PLANS FOR MATERIAL INVESTMENTS AND CAPITAL ASSETS

Saved as disclosed in this report, the Group did not have other plans for material investments and capital assets at 31

December 2020.

PROSPECTS

Our strategic objective is to continue to strengthen our position in operating restaurants at the HKIA and diversify our business in the urban area of Hong Kong, and strategically looking for opportunities to introduce popular restaurant brands to both the HKIA and the urban area of Hong Kong through franchising or other cooperative arrangements.

However, due to the adverse impact of the internal and external environment such as economic recession and thePandemic, we decided to take conservative and prudent business strategies in order to support daily businessoperations and to cope with the economic uncertainty in the near future. In view of these uncertainties and the existingmarket conditions, we will focus on maintaining sufficient general working capital to support the daily business operationof the Group, and also will carefully look at the business trends as well to determine if there is a strong entrepreneurialenvironment for us to lean on. We shall thus remain conservative and prudent towards its profitability in the comingmonths and will continue to manage the Group's expenditure and keep monitoring and searching for marketopportunities for our expansion plan in order to improve financial performance.

Looking ahead, we will endeavour to strengthen the development of its existing businesses and to provide steady returnas well as growth prospects for the Shareholders.

CORPORATE GOVERNANCE PRACTICE

The shares of the Company (the "Shares") have been successfully listed on the GEM of the Stock Exchange on 8 August2016 (the "Listing Date"). The Board recognized that the transparency and accountability are important to a listedcompany. Therefore, the Company is committed to maintaining high standards of corporate government in order touphold the transparency of the Group and safeguard interests of the Shareholders.

The Company has adopted the Corporate Governance Code (the "CG Code") as set out in Appendix 15 to the GEMListing Rules. In the opinion of the Board, the Company has complied with the CG Code for the nine-month period ended31 December 2020, except for the deviations of Code Provisions A.2.1.

CHAIRMAN AND CHIEF EXECUTIVE

Paragraph A.2.1 of the CG Code stipulates that the roles of Chairman and Chief Executive Officer should be separateand should not be performed by the same individual. Mr. Wong Man Wai is the Chairman and the Chief Executive Officerof the Company. Considering that Mr. Wong Man Wai has been operating and managing the Group since 2004, theBoard believes that it is in the best interest of the Group to have Mr. Wong Man Wai taking up both roles for effectivemanagement and business development. Therefore, the Board considers that the deviation from paragraph A.2.1 of theCode is appropriate in such circumstance.

COMPETING BUSINESS

Save as disclosed in the Prospectus and this report, the Directors are not aware of any business or interest of the Directors or the controlling Shareholders or any of their respective close associates (as defined in the GEM Listing Rules) that compete or may compete with the business of the Group and any other conflict of interests which any such person has or may have with the Group during the nine-month period ended 31 December 2020.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Shares during the period under review.

THE INTERESTS AND SHORT POSITIONS OF THE DIRECTORS AND THE CHIEFEXECUTIVE IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THECOMPANY AND ITS ASSOCIATED CORPORATIONS

As at 31 December 2020, the interests and short positions of the Directors and chief executive of the Company in theShares, underlying shares and debentures of the Company or any of its associated corporation (within the meaning ofPart XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the "SFO")) which wererequired to be notified to the Company and the Stock Exchange under Divisions 7 and 8 of Part XV of the SFO (includingany interests or short positions which they are taken or deemed to have under such provisions of the SFO) or asrecorded in the register of the Company required to be kept under Section 352 of the SFO, or which were required to benotified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules, were asfollows:

Long positions in the Shares

Number of ordinaryPercentage of

These 1,500,000,000 Shares are held by Fortune Round Limited, a company incorporated in the British Virgin Islandsand wholly-owned by Mr. Wong Man Wai. Therefore, Mr. Wong Man Wai is deemed to be interested in all the Sharesheld by Fortune Round Limited for the purpose of the SFO. Mr. Wong Man Wai is the sole director of Fortune RoundLimited.

Long positions in underlying shares

Number of ordinaryPercentage of

Name of DirectorCapacity

shares interestedshareholding

Ms. Lam Wai Kwan

Mr. Chan Chak To RaymondBeneficial owner Beneficial owner

20,000,000 0.76%

20,000,000 0.76%On 5 October 2016, each of Ms. Lam Wai Kwan and Mr. Chan Chak To Raymond was granted 20,000,000 options exercisable within 10 years from 5 October 2016 to subscribe for Shares at the exercise price of HK$0.163 per Share pursuant to the Share Option Scheme.

Long positions in the shares of associated corporation

Name of	Number of ordinary	Percentage of
Name of Director	associated corporation	Capacity	shares interested	shareholding
Mr. Wong Man Wai	Fortune Round Limited	Beneficial owner	one	100%
21

Save as disclosed above and so far as is known to the Directors, as at 31 December 2020, none of the Directors andchief executive of the Company had any interests or short positions in the Shares, underlying shares or debentures of theCompany or any of its associated corporation (within the meaning of Part XV of the SFO) which were required to benotified to the Company and the Stock Exchange under Divisions 7 and 8 of Part XV of the SFO (including interests orshort positions which they were taken or deemed to have under such provisions of the SFO) or as recorded in theregister of the Company required to be kept under Section 352 of the SFO, or which were required to be notified to theCompany and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules.

THE INTERESTS AND SHORT POSITIONS OF THE SUBSTANTIALSHAREHOLDERS AND OTHER PERSONS IN THE SHARES, UNDERLYINGSHARES AND DEBENTURES OF THE COMPANY

As at 31 December 2020 and so far as is known to the Directors, the following persons (other than the Directors or chiefexecutive of the Company) had interests and short positions in the Shares or underlying shares of the Company whichwere required to be notified to the Company under Divisions 2 and 3 of Part XV of the SFO or as recorded in the registerof the Company required to be kept under Section 336 of the SFO were as follows:

Long positions in the Shares

Notes:

• 1.Fortune Round Limited is a company incorporated in the British Virgin Islands and wholly-owned by Mr. Wong Man Wai.Therefore, Mr. Wong Man Wai is deemed to be interested in all the Shares held by Fortune Round Limited for the purposes of the

  SFO. Mr. Wong Man Wai is the sole director of Fortune Round Limited.

• 2. Ms. Li Wing Yin is the spouse of Mr. Wong Man Wai. She is deemed to be interested in all the Shares in which Mr. Wong Man Wai is interested under the SFO.

• 3. Keenfull Investments Limited, a company incorporated in the British Virgin Islands, is wholly owned by Mr. Li Chi Keung. Therefore, Mr. Li Chi Keung is deemed to be interested in the 317,280,000 Shares held by Keenfull Investments Limited for the purpose of the SFO. Mr. Li Chi Keung is the father of Ms. Li Wing Yin and accordingly, the father-in-law of Mr. Wong Man Wai, our controlling shareholder.

• 4. Ms. Wong Hoi Ping is the spouse of Mr. Li Chi Keung. She is deemed to be interested in all the Shares in which Mr. Li Chi Keung is interested under the SFO.

Save as disclosed above, as at 31 December 2020, the Directors were not aware of any interests or short positions ofany persons (other than the Directors or chief executive of the Company) in the Shares or underlying shares of theCompany which were required to be disclosed under Divisions 2 and 3 of Part XV of the SFO or which were required tobe recorded in the register of the Company to be kept under Section 336 of the SFO.

SHARE OPTION SCHEME

The Company adopted a share option scheme (the "Share Option Scheme") on 21 July 2016. On 5 October 2016, theCompany granted share options exercisable within 10 years to two executive Directors and one eligible participant for atotal of 60,000,000 ordinary shares of HK$0.01 each of the Company at the exercise price of HK$0.163 per share underthe share option scheme adopted by the Company on 21 July 2016. At the date of this report, no option has beenexercised.

The summary of the options granted under the Share Option Scheme that were still outstanding as at 31 December2020 is as follows:

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted a code of conduct regarding securities transactions by the Directors on terms no lessexacting than the required standard of dealings set out in Rule 5.48 to 5.67 of the GEM Listing Rules. The Companyperiodically issues notices to its Directors reminding them to the general prohibition on dealing in the Company's listedsecurities during the blackout periods before the publication of announcements of financial results of the Group. Havingmade specific enquiry with all the Directors, all Directors confirmed that they have complied with the required standard ofdealing and the Company's code of conduct regarding securities transactions by the Directors throughout the nine-month period ended 31 December 2020.

AUDIT COMMITTEE

The Company has established the audit committee pursuant to a resolution of the Directors passed on 21 July 2016 incompliance with Rule 5.28 of the GEM Listing Rules. Written terms of reference in compliance with paragraph C.3.3 ofthe CG Code has been adopted. Among other things, the primary duties of the audit committee are to makerecommendations to the Board on appointment or reappointment and removal of external auditor; review financialstatements of our Company and judgments in respect of financial reporting; and oversee the effectiveness of the internalcontrol procedures of the Group. The audit committee consists of three independent non-executive Directors, namelyMr. Ma Yiu Ho Peter, Mr. Cai Chun Fai and Mr. Ng Sai Cheong. Mr. Ma Yiu Ho Peter is the chairman of the auditcommittee. The audit committee has reviewed the Quarterly Financial Statements of the Group for the nine-month periodended 31 December 2020.

By order of the BoardRoyal Catering Group Holdings Company Limited

Wong Man Wai

Chairman, Chief Executive Officer and Executive Director

Hong Kong, 10 February 2021

At the date of this report, the executive Directors are Mr. Wong Man Wai, Mr. Chan Chak To Raymond and Ms. Lam WaiKwan; and the independent non-executive Directors are Mr. Ma Yiu Ho Peter, Mr. Cai Chun Fai and Mr. Ng Sai Cheong.