Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 172

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 18
Chunk 172
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 during the reporting period. Assets and liabilities
denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date.
The equity denominated in the functional currencies is translated at the historical rates of exchange at the time of capital contributions.
Because cash flows are translated based on the average translation rates, amounts related to assets and liabilities reported on the consolidated
statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation
adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated
other comprehensive income included in consolidated statements of changes in shareholders’ equity. Transaction gains and losses
that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency in the consolidated
statement of income and comprehensive income.

The
functional currency of RLHL, Fenbo Industries and Able Industries are HK$. The functional currency of Fenbo SZ is Renminbi (“ RMB”).
An entity’s functional currency is the currency of the primary economic environment in which it operates, normally that is the
currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine
the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company
transactions and arrangements.

For
the purpose of presenting these financial statements of subsidiary using RMB as functional currency, the Company’s assets and liabilities
are expressed in HK$ at the exchange rate on the balance sheet date, which is 0.9424 0.9126 0.9233 0.9070

The
value of foreign currencies including the US Dollar may fluctuate against the Hong Kong Dollar. Any significant variations of the foreign
currencies relative to the Hong Kong Dollar may materially affect the Company’s financial condition in terms of reporting in HK$.

Translations
of the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from HK$
into US$ as of and for the year ended December 31, 2024 are solely for the convenience of the reader and were calculated at the rate
of US$ 0.12874 1

Cash

Cash
comprises of cash at banks and on hand. Cash held in accounts at financial institutions located in the PRC is not freely convertible
into foreign currencies. In addition, these balances are not covered by insurance. While management believes that these financial institutions