Royal Catering : FURTHER ANNOUNCEMENT IN RELATION TO DISCLOSEABLE TRANSACTION AND EXEMPTED CONNECTED TRANSACTION IN RELATION TO THE ACQUISITIONS OF ISSUED SHARES IN DHY

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

皇 璽 餐 飲 集 團 控 股 有 限 公 司

(incorporated in Cayman Islands with limited liability)

(Stock Code: 8300)

FURTHER ANNOUNCEMENT IN RELATION TO

DISCLOSEABLE TRANSACTION AND

EXEMPTED CONNECTED TRANSACTION

IN RELATION TO THE ACQUISITIONS OF ISSUED SHARES IN DHY

INTRODUCTION

Reference is made to the announcement of Royal Catering Limited (the ''Company'' and together with its subsidiaries, the 2021 (the ''Announcement'') in relation to the discloseable connected transaction in respect of acquisitions of issued shares used in this announcement shall have the same meanings Announcement unless otherwise defined herein.

Group Holdings Company ''Group'') dated 10 March transaction and exempted in DHY. Capitalised terms as those defined in the

VALUATION

As stated in the Announcement, the considerations were determined after arm's length negotiations between the Group and each of the Previous Vendor and the Current Vendors with reference to the market value of 5% equity interest in DHY as of 31 December 2020 (the ''Valuation Date'') of approximately HK$700,000 as assessed by the Independent Valuer.

Since the Independent Valuer adopted the discounted cash flow method under the income approach, the valuation of the market value of 5% equity interest in DHY as of 31 December 2020 of approximately HK$700,000 contained in the valuation report issued by the Independent Valuer (the ''Valuation'') is regarded as a profit forecast under Rule 19.61 of the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited (the ''GEM Listing Rules'').

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The Valuation was prepared based on the following major assumptions, including commercial assumptions:

1. As advised by the management of the Company, the projected cashflows of DHY are based on business plans and validity periods of the existing franchise agreement entered into concerning the restaurant operations of DHY as of the Valuation Date. No cashflow is assumed after the expiration of the existing franchise agreement;
2. Management accounts of DHY for the nine months ended 31 December 2020 as provided by the management of the Company can reasonably represent its financial position and performance of DHY as of the Valuation Date since audited financial accounts as of Valuation Date was not available;
3. There will be no major changes in the current taxation laws in the territories (the ''Territories'') in which DHY operates or intends to operate and that the rates of tax payable shall remain unchanged and that all applicable laws and regulations will be complied with;
4. There will be no major changes in the political, legal, economic or financial conditions in the Territories in which DHY operates or intends to operate, which would adversely affect the revenues attributable to and the profitability of DHY;
5. DHY will retain and have competent management, key personnel, and technical staff to support its ongoing operation until the expiration of the existing franchise agreement;
6. All relevant legal approvals and business certificates or licenses to operate the business in the localities in which DHY operates or intends to operate has or would be officially obtained and renewable upon expiry until the expiration of the existing franchise agreement;
7. Industry trends and the market conditions for related industries will not deviate significantly from economic forecasts; and
8. All information and representations provided by the management of the Company, for which they are solely and wholly responsible for are true, accurate and complete in all material respect.

HLB Hodgson Impey Cheng Limited (''HLB'') has examined the calculations of the discounted stream of future free cash flow on which the Valuation was based, which did not involve the adoption of accounting policies.

Given there was no financial adviser appointed in connection with the Previous Transaction and Current Transactions, the Board confirms that they have made the discounted stream of future free cash flow in the valuation report after due and careful enquiry.

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A letter from Board and a report from HLB have been submitted to the Stock Exchange according to Rule 19.62 of the GEM Listing Rules, and are set out as Appendix I and Appendix II to this announcement, respectively.

EXPERTS AND CONSENTS

The Board also wishes to disclose that the following are the qualification of the experts who have given opinions or advice which are contained in this announcement:

Name	Qualification
International Valuation Limited	an independent valuer
HLB Hodgson Impey Cheng Limited	Certified Public Accountants

As at the date of this announcement, each of the Independent Valuer and HLB does not have any shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

To the best of the Directors' knowledge, information and belief, each of the Independent Valuer and HLB is a third party independent of and not connected with the Company or the connected persons (as defined in the GEM Listing Rules) of the Company and its subsidiaries.

Each of the Independent Valuer and HLB has given and has not withdrawn its written consent to the issue of the Announcement and this announcement with the inclusion of its letter and report and references to its name in the form and context in which it appears.

By order of the Board

Royal Catering Group Holdings Company Limited

Wong Man Wai

Chairman, Chief Executive Officer and Executive Director

Hong Kong, 31 March 2021

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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 at www.hkgem.com for at least 7 days from the date of its posting. This announcement will also be published on the Company's website at www.hkrcg.com.

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Appendix I - Letter from the Board

Date: 31 March 2021

Hong Kong Exchanges and Clearing Limited 8/F., Two Exchange Square

8 Connaught Place

Central, Hong Kong

Dear Sirs,

DISCLOSEABLE TRANSACTION AND

EXEMPTED CONNECTED TRANSACTION

We refer to the valuation report dated 22 February 2021 prepared by International Valuation Limited (the ''Valuer'') in relation to the valuation of the market value of 5% equity interest in Du Hsiao Yueh (Hong Kong) Limited (the ''Valuation''). The Valuation, which was prepared based on discounted cash flow method, is regarded as a profit forecast under Rule 19.61 of the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited.

We have discussed with the Valuer about different aspects including the bases and assumptions upon which the Valuation has been prepared, and reviewed the Valuation for which the Valuer is responsible. We have also considered the report from our reporting accountant, HLB Hodgson Impey Cheng Limited, regarding whether the Valuation was compiled properly so far as the calculations are concerned.

On the basis of the foregoing, we are of the opinion that the Valuation prepared by the Valuer has been made after due and careful enquiry.

Yours faithfully

For and on behalf of

Royal Catering Group Holdings Company Limited

Lam Wai Kwan

Executive Director

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