In order for the Resource Compiler to know where the engine is currently located, a key is written to the registry which contains the current engine path info.
This key is obtained and written through the CRYENGINE Settings Manager which is located in:
The first time you run the Settings Manager, the dialog will state that an "Active build setup for CRYENGINE is not found" and should look something like this:
This means that there is no CRYENGINE path information written to the registry and gives you two options, use the path where the SettingsMgr was run from, or scan for builds in other locations.
It is recommended and easiest to "Use SettingsMgr.exe's location" as that's quite likely going to be where you want to run the engine from.
If everything with the build is correct, you should see two green ticks for the two different components:
If, for example, you're missing some RC files or cannot locate the tools , the Settings Manager will see this and report the problem:
For some extra functionality, you can also add additional RC commands from the "Resource Compiler" tab: