Company: MEGL
Filing Date: 2025-06-09
Form Type: F-1/A
Source: 0001641172-25-014301
Chunk: 96

Company: Magic Empire Global Ltd
Filing Date: 2025-06-09
Form: F-1/A
Chunk 96
---
 |   |     |  US$ |   |
| Wai Ho Chan          |     |                 | 38,066 |     |      | — |     |      | — |     |      | — |
| Sze Hon Johnson Chen |     |                 | 58,634 |     |      | — |     |      | — |     |      | — |

The balances are unsecured and interest-free. All balances with related parties were settled in March 2023.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Credit risk

Assets that potentially subject the Group to a significant concentration of credit risk primarily consist of cash, accounts receivable and other current assets.

The Group believes that there is no significant credit risk associated with cash, which were held by reputable financial institutions in the jurisdictions where the Company and its subsidiaries are located. The Hong Kong Deposit Protection Board pays compensation up to a limit of HK$500,000 (approximately US$64,369) if the bank with which an individual/a company hold its eligible deposit fails. With effect from 1 October 2024, the protection limit has been increased to HK$800,000 (approximately US$102,991). As of December 31, 2024, cash balance of HK$127,511,687 (US$16,415,630) was maintained at financial institutions in Hong Kong and an aggregate of HK$3,229,557 were insured by the Hong Kong Deposit Protection Board.

The Group has designed their credit policies with an objective to minimize their exposure to credit risk. The Group’s accounts receivable are short term in nature and the associated risk is minimal. The Group conducts credit evaluations on its clients and generally does not require collateral or other security from such clients. The Group periodically evaluates the creditworthiness of the existing clients in determining an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific clients.

Interest rate risk

The Group’s exposure on fair value interest rate risk mainly arises from its fixed deposits with bank. It also has exposure on cash flow interest rate risk which is mainly arising from its deposits with banks.

In respect of the exposure to cash flow interest rate risk arising from floating rate non-derivative financial instruments held by the Group, such as cash, at the end of the reporting period, the Group is not exposed to significant interest rate risk as the interest rates of cash at bank are not expected to change significantly.