UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2024

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2024

(Expressed in United States Dollar)

1.        GENERAL INFOMATION AND BASIS OF PREPARATION

The Company is a public company, limited by shares, and incorporated and domiciled in the United Kingdom. the company has its listing on the Aquis Growth Market with the ticker MCJ.

The address of its registered office and the principal place of business are located Unit 15 Drome Road, Deeside Industrial Park, Deeside, Wales, CH5 2NY, United Kingdom.

The financial statements are presented in United States Dollars (USD).

2.        BASIS OF PREPARATION AND ACCOUNTING POLICIES

On 8 March 2022, the Company acquired the entire shareholding of Majestic Corporation Limited via a share-for-share exchange. The insertion of the Company on top of the existing Majestic Corporation Group does not constitute a business combination under IFRS 3 Business Combinations. This transaction has been deemed to be an acquisition in line with guidance from the Interpretations Committee (IFRIC) and as such the consolidated accounts for the Group are treated as a continuation of the consolidated accounts of the Majestic Corporation Group.

Under the principles of continuation accounting the consolidated financial statement of the newly formed Group must reflect:

•  The assets and liabilities of the Majestic Corporation Group at pre-combination carrying amounts;

•  The retained earnings and other equity balances of the Majestic Corporation Group at pre-combination carrying amounts;

•  The assets and liabilities of the Company at fair value; and

•  The share capital of the Company.

Basis of preparation

These interim condensed consolidated financial statements (Interim Financial Statements) Majestic Corporation Group plc comprise the results of the Group for the 6 months ended 30 June 2024.

The consolidated reserves of the Group have been adjusted in the current period following the share-for-share exchange to reflect the share capital of the Company with the difference giving rise to a merger reserve.

The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting and the Disclosure and Transparency Rules of the Financial Conduct Authority. The annual financial statements of the Group will be prepared in accordance with UK adopted International Financial Reporting Standards. They do not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 and should be read in conjunction with the financial statements prepared for the Majestic Corporation Group for the twelve months ended 31 December 2023, which were prepared in accordance with International Financial Reporting Standards (IFRS) and are filed with the Companies Registry in Hong Kong and are available to shareholders on request"

The information for the period ended 30 June 2024 has neither been audited nor reviewed and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

3.        PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies adopted are set out below.

a.      Basis of accounting and accounting policies

The financial statements have been prepared under the historical cost basis.

b.      Revenue recognition

Revenue from the sales of goods is recognised when control of the goods has transferred, being when the goods have been shipped to the customer's specific location. Following delivery, the customer has full discretion over the usage of the goods, has the primary responsibility upon selling the goods and bears the risks in relation to the goods. A receivable is recognised by the Company when the goods are delivered to the customers as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due.

Interest income is recognised as other income as it accrues using the effective interest method.

c.      Cash and cash equivalents

Cash and cash equivalents include demand deposits and other short-term highly liquid investments with original maturities of three months or less.

d.     Trade and other receivables

Trade and other receivables are stated at estimated realisable value after each debt has been considered individually. Where the payment of a debt becomes doubtful a provision is made and charged to the income statement.

e.      Trade and other payables

Trade and other payables are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

f.      Translation of foreign currency

Foreign currency transactions during the period are translated into United States Dollars at the exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into United States Dollars at the market rates of exchange ruling at the reporting date. Exchange gains and losses on foreign currency translation are dealt with in the statement of income and retained earnings.

g.      Taxation

The tax expense in the consolidated income statement comprises current tax payable and deferred tax.

h.      Inventories

Inventories are stated at the lower of cost and net realisable value. In arriving at net realisable value an allowance has been made for deterioration and obsolescence.

i.       Good in transit

The risk and reward of the inventory transfers to customers once they have issued an analysis report confirming shipment has been accepted.

j.       Leases

Leases are classified as operating leases and the rentals receivable or payable under these leases are credited or charged to the statement of income and retained earnings on a straight-line basis over the duration of the leases.

k.      Going concern

The consolidated financial statements are prepared on the going concern basis. The financial position of the Company, its cash flows and liquidity position are described in the interim consolidated financial statements and notes. The Company has the financial resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of the report.

4.        TURNOVER AND OTHER INCOME

Turnover represents the amounts received and receivables for goods sold to the customers.

5.         PROFIT FROM OPERATION AND BEFORE TAXAION

Profit from operation and before taxation have been arrived at after charging:

9.        TRADE RECEIVABLES

 The ageing analysis of the trade receivables, based on invoice dates, is as follows:

Trade receivables disclosed above include amounts which are past due at the end of the reporting period against which the Company has not recognized an allowance for doubtful receivables because there has not been a significant change in credit quality and the amounts are recoverable subsequent to the reporting date. The Company does not hold any collateral or other credit enhancements over these balances, nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

10.       TRADE PAYABLES

The ageing analysis of the trade payables, based on invoice dates, is as follows:

11.      IMPORT LOANS

The Company has obtained credit facilities from its bankers as secured by guarantees of the director and a related company together with fixed deposit of the Company. The loans are interest bearing at LIBOR+2.5% and repayable in 120 days from the drawdown date which has multiple repayment dates.

12.       SHARE CAPITAL

13.      FINANCIAL RISK MANAGEMENT

Exposure to credit, liquidity, interest rate, foreign currency and equity price risks arises in the normal course of the Company's business. The Company's exposure to these risks and the financial risk management policies and practices used by the Company to manage these risks are described below.

a.          Credit risk management

In order to minimize credit risk, credit approvals and monitoring procedures are in place to ensure that follow-up action is taken to recover overdue debts.

b.          Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for management of the Company's short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

c.          Market risk management - interest rate risk

The Company draws import loans to maintain stable cashflow. The loan is interest bearing at LIBOR+2.5%. 5% is the sensitivity rate used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates. The Company's sensitivity to a 5% increase and decrease in LIBOR is as follow:

Unaudited               Unaudited

30.06.2024           31.06.2023

d.         Market risk management - foreign currency risk

The Company undertakes most of the transactions denominated in United States Dollar with few transactions denominated in Euro. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The Company's sensitivity to a 5% increase and decrease in Euro against United States Dollar is as follow:

      Unaudited            Unaudited

          30.06.2024            31.06.2023         

14.      EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit/(loss) for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares in issue during the period. 

The following reflects the income and share data used in the basic and diluted earnings per share computations:

There have been no other transactions involving actual ordinary shares or potential ordinary shares between the reporting date and the date of authorisation of this financial information. 

15.      EVENTS AFTER BALANCE SHEET DATE

On 3 September 2024, the Company entered into a conditional share purchase agreement to acquire the entire issued share capital of Telecycle Europe Limited for a consideration of up to £2 million, to be satisfied in cash (the "Acquisition").

As Peter Lai is a Director and 71.85% shareholder of Majestic, as well as a Director and the sole shareholder of Telecycle, this Acquisition is considered a related party transaction under the Aquis Stock Exchange Rules.

On 4 September 2024, the Company announced that it had been granted Enterprise Investment Scheme status.

On 5 September 2024, the Company announced the appointment of Andrew Male as an Independent Non-Executive Director of the Company.