TIDMSCGL
RNS Number : 6926B
Sealand Capital Galaxy Limited
05 June 2023
For immediate release
Sealand Capital Galaxy Limited
("Sealand", or the "Company", or "the Group")
Final results for the year ended 31 December 2022
Sealand Capital Galaxy Limited (LSE: SCGL) announces that it has
published its Annual Report and Financial Statements for the year
ended 31 December 2022 with respect to the Company and its
subsidiaries (the "Group").
The Annual Report and Financial Statements are available to view
on the Company's website at http://scg-ltd.com/ .
A copy of the Annual Report and Financial Statements has also
been submitted to the National Storage Mechanism and is available
for inspection.
Nelson Law, Executive Chairman of the Company commented:
"In 2022, the Company experienced significant growth, albeit
from a low base, in new markets in Hong Kong through its wholly
owned subsidiary, SCG GROUP LIMITED. The Company's revenues
increased by 27.6%, primarily driven by multiple reselling
channels, with a major contribution from the local market in Hong
Kong. In addition, SCG GROUP LIMITED achieved further success by
implementing a reselling model in Hong Kong, collaborating with
chain store retailers, individual live stream platforms, and luxury
department stores.
Commenting on outlook he added:
"Looking ahead, SCG GROUP LIMITED is committed to further
expanding its operations both horizontally and vertically in the
upcoming year. The Company aims to diversify its product lines for
each brand while simultaneously expanding its geographic presence.
Emphasising new channel development, SCG GROUP LIMITED will forge
partnerships with additional channel parties to align with its core
focus and ensure cohesiveness.
-Ends-
Enquiries:
Sealand Capital Galaxy Limited
Law Chung Lam Nelson, Executive + 44 (0) 753 795
Chairman 9788
Notes to Editors:
Further information on Sealand please visit:
http://www.scg-ltd.com/
CHAIRMAN'S STATEMENT
Dear Shareholders
I hereby present the annual report of Sealand Capital Galaxy
Limited (the "Company" or "Sealand", together with its
subsidiaries, the "Group") for the year ended 31 December 2022 (the
"Year").
PERFORMANCE FOR THE YEAR
The Group reported a loss of GBP179,569 (2021: GBP1,033,713)
during the Year. Our business was continuously impacted by the
COVID-19 epidemic over our overseas subsidiaries' operations during
the Year. The Group's revenue for the Year increased by 27.6% to
GBP226,750 (2021: GBP177,667) due to the development of distributor
business in the Hong Kong market.
KEY DEVELOPMENTS FOR THE YEAR
In 2022, the Company experienced significant growth, albeit from
a low base, in new markets in Hong Kong through its wholly owned
subsidiary, SCG GROUP LIMITED. The Company's revenues increased by
27.6%, primarily driven by multiple reselling channels, with a
major contribution from the local market in Hong Kong. In addition,
SCG GROUP LIMITED achieved further success by implementing a
reselling model in Hong Kong, collaborating with chain store
retailers, individual live stream platforms, and luxury department
stores.
FUTURE PROSPECTS AND OUTLOOK
Looking ahead, SCG GROUP LIMITED is committed to further
expanding its operations both horizontally and vertically in the
upcoming year. The Company aims to diversify its product lines for
each brand while simultaneously expanding its geographic presence.
Emphasising new channel development, SCG GROUP LIMITED will forge
partnerships with additional channel parties to align with its core
focus and ensure cohesiveness.
ACKNOWLEDGEMENTS
We wish to express our appreciation to our shareholders,
business partners and suppliers for their continued support during
what has been a difficult time for all. We would like to thank our
dedicated staff for their contributions to the success of the
Group.
Chung Lam Nelson Law
Chairman
31 May 2023
SEALAND CAPITAL GALAXY LIMITED
DIRECTORS' REPORT
The directors present their report, together with the audited
financial statements of Sealand Capital Galaxy Limited and its
subsidiaries for the year ended 31 December 2022 (the "Year").
The Company
Sealand Capital Galaxy Limited was incorporated in the Cayman
Islands on 22 May 2015 as an exempted company with limited
liability under the Companies Law. The Company's registered office
is Willow House, PO Box 709, Cricket Square, Grand Cayman,
KY1-1107, Cayman Islands.
Principal activities
The Company's nature of operations is to act as a Special
Purpose Acquisition Company.
The Group engaged in digital marketing and other IT and
e-Commerce related businesses.
Results and dividends
The results are set out in the primary statements on pages 12 to
13 of the financial statements. The directors do not recommend a
payment of dividend for the Year (2021: Nil).
Business review and management report
Overview
During the Year, The Group recorded a consolidated loss of
GBP179,569 (2021: GBP1,033,713) as set out on page 12 of these
financial statements.
Operations
(a) Digital marketing and payment solution
The revenue from the digital marketing and payment solution
segment for the Year decreased from GBP148,530 to GBP887. The
decrease is mainly due to the closure of one of the major customers
of a flagship subsidiary of the Group.
(b) e-Commerce
The Group has been developing the e-Commerce business and
recorded the revenue from e-Commerce of GBP225,863 (2021:
GBP29,137) for the Year. The Group has now been successful in
securing exclusive distribution contracts with a number of premium
brands.
Going concern
As at 31 December 2022, the Group has cash and cash equivalent
balances and net liabilities and net current liabilities of
GBP35,567,GBP892,843 and GBP922,437, respectively.
The director's cash-flow projections for the forthcoming 12
months conclude there will be the need for additional cash
resources to fully implement the business plans. The directors are
in discussions with a number of individuals that may lead to
further equity and/or loans being raised. There is no certainty
that any such funds will be forthcoming or the price and other
terms being acceptable and as such there is a material uncertainty
over going concern.
Our strategy
The Group is committed to achieving long term sustainable growth
of its business in order to preserve and enhance shareholders'
value. The Group is focused on selecting attractive investment
opportunities to strengthen and extend its business scope, and has
maintained prudent and disciplined financial management to ensure
its sustainability.
Outlook
The Group will continue to monitor market developments and will
manage its businesses and investment portfolio with a view to
further improving its overall asset quality and potential growth.
The Group will also continue to manage its assets and assess new
investment opportunities to achieve stable growth and enhance
shareholders' value.
Event after the reporting period
The forthcoming financial year is expected to be challenging.
The Directors will monitor developments they consider relevant and
assess and react actively to their impact on the financial position
and operating results of the Group.
Directors
The following directors served during the year ended 31 December
2022:
Mr Chung Lam Nelson Law (Chairman and Chief Financial Officer)
Mr Geoffrey John Griggs (Non-executive Director)
Substantial shareholding
At 31 December 2022, the Company has been notified of the
following interests of 3 per cent or more in its issued share
capital as at the date of approval of this report:
Number of Approximate
Name Ordinary Shares % Shareholding
Chung Lam Nelson Law * 363,061,357 50.72%
Computershare Company Nominees Limited 92,525,104 12.93%
Tien San Chua 72,000,000 10.06%
Ahead Eternity Limited 70,000,000 9.78%
Premium Full Limited 65,000,000 9.08%
(* indicates a director of the Company)
Directors' interests
The directors' interests in the share capital of the Company as
at 31 December 2022 are shown below. All interests are
beneficial.
Number of
Ordinary Shares
Mr Chung Lam Nelson Law 363,061,357
Directors' emoluments are detailed in Note 10 to the financial
statements.
Share capital and voting rights
Details of the share capital and movements in share capital
during the year are disclosed in Note 19 to the financial
statements. During the year, the issued share capital has been
increased by GBP12,012 by the issue of 120,120,695 ordinary
shares.
Ratio of men to women
At 31 December 2022, there was one women (2021: 1) employed
across the Group making 14% (2021: 13%) of
our Group-wide employee base.
The Directors are satisfied that it has the appropriate balance
of skills, experience and expertise necessary, and will give due
regard to diversity in the event of further changes to both its own
membership and/or the membership of the senior management team.
Greenhouse gas emissions
The Group is aware that it needs to measure its operational
carbon footprint in order to limit and control its environmental
impact. However, given the very limited nature of its operations
during the year under review, it has not been practical to measure
its carbon footprint. In the future, the Group will only measure
the impact of its direct activities, as the full impact of the
entire supply chain of its suppliers cannot be measured
practically.
Financial risk management
The Group's financial risk management objective is to minimise,
as far as possible, the Group's exposure to each risk as detailed
in Note 5 to the financial statements.
Corporate governance
As a company with a Standard Listing, the Group is not required
to comply with the provisions of the Corporate Governance Code.
Although the Company has not adopted the Corporate Governance Code,
it intends to adopt such procedures as are appropriate for the size
and nature of the Company and the size and composition of the
Board. These corporate governance procedures have been selected
with due regard to the provision of the UK Corporate Governance
Code in particular:
- given the size of the Board, certain provisions of the
Corporate Governance Code (in particular the provisions relating to
the composition of the Board and the division of responsibilities
between the Chairman and chief executive and executive
compensation), are not being complied with by the Company as the
Board considers these provisions to be inapplicable to the
Company;
- given the size of the Board, the board has not established an
audit committee, a remuneration committee and a nomination
committee comprising at least one non-executive director in each
committee. The Board is taking the responsibilities to review audit
and risk matters, as well as the Board's size, structure and
composition and the scale and structure of the directors' fees,
taking into account the interests of Shareholders and the
performance of the Company, and will take responsibility for the
appointment of auditors and payment of their audit fee, monitor and
review the integrity of the Company's financial statements and take
responsibility for any formal announcements on the Company's
financial performance.
- the Corporate Governance Code recommends the submission of all
directors for re-election at annual intervals. None of the
directors will be required to retire by rotation and be submitted
for re-election; and
- the Board has complied with the provision of the Corporate
Governance Code that at least half of the Board, excluding the
Chairman, should comprise non-executive directors determined by the
Board to be independent.
Auditors
The auditors, PKF Littlejohn LLP, have expressed their
willingness to continue in office and a resolution to reappoint
them will be proposed at the Annual General Meeting.
Disclosure of Information to Auditors
So far as the directors are aware, there is no relevant audit
information of which the Company's auditors are unaware, and each
Director has taken all the steps that he ought to have taken as a
Director in order to make himself aware of any relevant audit
information and to establish that the Company's auditors are aware
of that information.
By order of the board
Chung Lam Nelson Law
Chairman
31 May 2023
SEALAND CAPITAL GALAXY LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the annual report
and the financial statements in accordance with applicable laws and
regulations. The directors are required to prepare financial
statements for the Group in accordance with International Financial
Reporting Standards ("IFRSs").
The directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of affairs
of the Group and of the profit or loss of the Group for that
period. In preparing the financial statements, the directors are
required to:
- Select suitable accounting policies and then apply them consistently;
- Make judgments and accounting estimates that are reasonable and prudent;
- State whether applicable IFRSs have been followed, subject to
any material departures disclosed and explained in the financial
statements; and
- Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and enable them to ensure that the
financial statements comply with applicable law. They are also
responsible for safeguarding the assets of the Group and hence for
taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website.
Legislation in the Cayman Islands governing the preparation and
dissemination of the accounts and the other information included in
annual reports may differ from legislation in other
jurisdictions.
Directors' Responsibility Statement Pursuant to Disclosure and
Transparency Rules
Each of the directors, whose names and functions are listed on
page 1, confirms that, to the best of their knowledge and
belief:
- the financial statements prepared in accordance with IFRSs,
give a true and fair view of the assets, liabilities, financial
position and loss of the Group and parent company; and
- the Annual Report and financial statements, including the
Business review, includes a fair review of the development and
performance of the business and the position of the Group and
parent company, together with a description of the principal risks
and uncertainties that they face.
By order of the board
Chung Lam Nelson Law
Chairman
31 May 2023
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF SEALAND CAPITAL
GALAXY LIMITED
Opinion
We have audited the Group financial statements of Sealand
Capital Galaxy Limited ('the Group') for the year ended 31 December
2022 which comprise the Consolidated Statement of Profit or loss,
the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash
Flows and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs).
In our opinion, the Group financial statements:
-- give a true and fair view of the state of the Group's affairs
as at 31 December 2022 and of its loss for the year then ended;
and
-- have been properly prepared in accordance with International
Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to note 4(p) in the Group financial
statements, which indicates that the Group incurred a net loss of
GBP179,569 during the year ended 31 December 2022 and, as of that
date, the Group was in a net liability position of GBP892,843. As
stated in note 4(p), the directors' cash flow projections for the
following 12 months conclude that there will be the need for
additional cash resources, but there is no certainty that any such
funds will be forthcoming. These events or conditions, along with
the other matters as set forth in note 4(p), indicate that a
material uncertainty exists that may cast significant doubt on the
Group's ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
In auditing the Group financial statements, we have concluded
that the director's use of the going concern basis of accounting in
the preparation of the Group financial statements is appropriate.
Our evaluation of the directors' assessment of the Group's ability
to continue to adopt the going concern basis of accounting included
obtaining managements' forecasts to the period ended 31 May 2024
and challenging the significant assumptions within. In order for
the Group to meet their liabilities as they fall due, the Group
will need to raise funds either from existing shareholders or the
open market. We have obtained confirmation from the majority
shareholder of his commitment to provide financial support to the
Group.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of
materiality. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature, timing
and extent of our audit procedures. The materiality applied to the
Group financial statements was GBP31,200 (2021: GBP52,100) based on
5% of both the loss made during the financial year and the net
liabilities at the year end. The performance materiality was
GBP21,840 (2021: GBP36,470), being 70% of overall materiality to
ensure sufficient coverage for group reporting purposes. For each
component in the scope of our Group audit, we allocated a
materiality that is less than our overall Group materiality. As a
Group whose main aim is profitability through investments and
acquisitions, loss before tax and net liabilities of the Group were
considered the most appropriate benchmarks to shareholders.
We agreed with those charged with governance that we would
report all differences identified during the course of our audit in
excess of GBP1,560 (2021: GBP2,605). There were no revisions made
to these levels during the course of the audit. We agreed with
those charged with governance that we would also report any
qualitative differences arising.
Our approach to the audit
In designing our audit, we determined materiality and assessed
the risks of material misstatement in the Group financial
statements. In particular we looked at areas involving significant
accounting estimates and judgements by the directors and considered
future events that are inherently uncertain. As in all of our
audits, we also addressed the risk of management override of
internal controls, including among other matters consideration of
whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
Of the 19 components of the Group, a full scope audit was
performed on the complete financial information of 8 components,
and the remaining components were subject to analytical review only
because they were not significant to the Group.
Of the 5 reporting components of the Group, 5 are located in
Hong Kong and audited by a network firm operating under our
instruction, and the audit of the remaining components were
performed in London, conducted by PKF Littlejohn LLP using a team
with specific experience of auditing groups and publicly listed
entities. The engagement partner interacted regularly with the
component audit teams during all stages of the audit and was
responsible for the scope and direction of the audit process. This,
in conjunction with additional procedures performed, gave us
appropriate evidence for our opinion on the Group financial
statements.
Key audit matters
Except for the matter described in the Material uncertainty
related to going concern section, we have determined that there are
no other key audit matters to communicate in our report.
Other information
The other information comprises the information included in the
annual report, other than the Group financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the Group financial statements does not cover the other
information and, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the Group financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the Group
financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the Statement of Directors'
Responsibilities, the directors are responsible for the preparation
of the Group financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of Group
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the Group financial statements, the directors are
responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the Group financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these Group
financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the Group and the sector in
which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the Group
financial statements. We obtained our understanding in this regard
through discussions with management, and application of our
cumulative audit knowledge and experience of the sector.
-- We determined the principal laws and regulations relevant to
the Group in this regard to be those arising from LSE rules, Cayman
Islands laws and local regulations applicable to the
subsidiaries.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the Group with those laws and regulations. These procedures
included, but were not limited to: enquiries of management, review
of Board minutes and Regulatory News Service (RNS) announcements
and review of legal and regulatory correspondence.
-- We also identified the risks of material misstatement of the
Group financial statements due to fraud. We considered, in addition
to the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that the potential for management
bias was identified in relation to the impairment assessment of
trade and other receivables. We addressed this by challenging the
assumptions and judgements made by management when evaluating any
indicators of impairment.
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
-- We engaged with our component auditors to ensure they
assessed whether there were any instances of non-compliance with
laws and regulations at a local level and ensured they reported any
such breached or concerns to us. None were noted at the component
or Group level.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the Group financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the Group financial statements, as we
will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the Group financial statements is located on the Financial
Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities . This description forms
part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance our engagement letter dated 3 May 2023. Our audit
work has been undertaken so that we might state to the company's
members those matters we are required to state to them in an
auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Mark Ling (Engagement Partner) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEARED 31 DECEMBER 2022
2022 2021
Note GBP GBP
Revenue 8 226,750 177,667
Cost of services (133,962) (161,236)
Gross profit 92,788 16,431
Other income 8 20,484 88,098
Administrative expenses (449,007) (1,050,049)
Finance cost arising from finance
lease 18 (738 ) (656 )
Impairment loss on trade and
contract assets - (91,757)
Share of results of an associate - 290
Gain on disposal of subsidiaries 153,000 -
Gain on deregistration of subsidiaries 3,904 -
Gain on bargain purchase of
a subsidiary 21 - 3,930
Loss before tax 9 (179,569) (1,033,713)
Income tax expense 11 - -
----------- -------------
Loss for the year (179,569) (1,033,713)
=========== =============
Attributable to:
( 177,096
Equity holders of the Company ) (962,473)
Non-controlling interests (2,473) (71,240)
----------- -------------
(179,569) (1,033,713)
=========== =============
Loss per share attributable
to equity holders of the Company
Pence Pence
Basic and diluted 12 (0.03) (0.2)
=========== =============
The notes to the financial statements form an integral part of
these financial statements.
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2022
2022 2021
Note GBP GBP
(179,569 (1,033,
Loss for the year ) 713)
Other comprehensive income
Items not to be reclassified subsequently
to profit or loss:
* Share of other comprehensive income of an associate - (27)
Items to be reclassified subsequently
to profit or loss:
* Exchange differences on translation of foreign (17 0,292
operations ) (12,187)
* Release of translation reserve upon disposal and
deregistration of foreign subsidiaries 104,362 -
----------- -------------
Other comprehensive income for the
year, net of tax (65,930) (12,214)
----------- -------------
Total comprehensive loss for the
year (245,499) (1,045,927)
=========== =============
Attributable to:
Equity holders of the Company (186,197) (972,055)
Non-controlling interests (59,302) (73,872)
(245,499) (1,045,927)
=========== =============
The notes to the financial statements form an integral part of
these financial statements.
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2022
2022 2021
Note GBP GBP
Non-current assets
Property, plant and equipment 13 44,791 15,650
------------- ---------------
Current assets
Inventories 14 106,088 81,823
Deposit, prepayments and other receivables 15 58,305 66,520
Trade receivables 15 26,430 15,123
Cash and cash equivalents 35,567 8,198
------------- ---------------
226,390 171,664
------------- ---------------
Current liabilit ies
Trade payables 16 36,110 117,853
Other payables and accrued expense 480,213 429,255
Amount due to a director 17 602,646 649,621
Finance lease liabilities 18 29,858 14,750
------------- ---------------
1,148,827 1,211,479
------------- ---------------
Net current liabilities (922,437) (1,039,815)
Total assets less current liabilities (877,646) (1,024,165)
Non-current liabilities
Finance lease liabilities 18 15,197 -
------------- ---------------
Net liabilities (892,843) (1,024,165)
============= ===============
Capital and reserves
Share capital 19 71,581 59,569
( 643,122
Reserve s ) (713,857)
------------- ---------------
Total equity attributable to equity ( 571,541
shareholders of the Company ) (654,288)
Non-controlling interests (321,302) (369,877)
------------- ---------------
Total deficit (892,843) (1,024,165)
============= ===============
The notes to the Financial Statements form an integral part of
these financial statements.
These Financial Statements were approved by the Board of
Directors and authorised for issue on 31 May 2023.
Signed on behalf of the Board of Directors
...................................................
Chung Lam Nelson Law
Chairman
31 May 2023
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2022
Attributable to equity holders of the Company
-------------------------------------------------------------------------------------------------------- ---
Share-based Non-
Share Share payment Exchange Accumulated controlling Total
capital Premium reserve Reserve losses Total interests deficit
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January 2022 59,569 6,660,898 357,417 5,381 (7,737,553) (654,288) (369,877) (1,024,165)
Loss for the year - - - - (177,096) (177,096) (2,473) (179,569)
Exchange differences
arising
in translation - - - (113,463) - (113,463) (56,829) (170,292)
--------- ----------------- ------------ ---------- ------------- ----------- ---------------- --------------
Total comprehensive loss - - - (113,463) (177,096) (290,559) (59,302) (349,861)
Issue of ordinary shares
(Note 19) 12,012 256,932 - - - 268,944 - 268,944
Disposal and
deregistration
of subsidiaries - - - 104,362 - 104,362 107,877 212,239
At 3 1 December 2022 71,581 6,917,830 357,417 (3,720) (7,914,649) (571,541) (321,302) (892,843)
========= ================= ============ ========== ============= =========== ================ ==============
At 1 January 2021 50,983 6,012,444 - 14,963 (6,775,080) (696,690) (296,005) (992,695)
Loss of the year - - - - (962,473) (962,473) (71,240) (1,033,713)
Exchange differences
arising
in translation - - - (9,582) - (9,582) (2,632) (12,214)
--------- ----------------- ------------ ---------- ------------- ----------- ---------------- --------------
Total
comprehensive
loss - - - (9,582) (962,473) (972,055) (73,872) (1,045,927)
Issue of ordinary shares
(Note 19) 8,586 648,454 - - - 657,040 - 657,040
Issue of employee stock
options
(Note 22(a)) - - 357,417 - - 357,417 - 357,417
--------- ----------------- ------------ ---------- ------------- ----------- ---------------- --------------
At 31 December 2021 59,569 6,660,898 357,417 5,381 (7,737,553) (654,288) (369,877) (1,024,165)
========= ================= ============ ========== ============= =========== ================ ==============
The notes to the financial statements form an integral part of
these financial statements.
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2022
2022 2021
Note GBP GBP
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax (179,569) (1,033,713)
Adjustments for:
Depreciation 34,746 31,340
Gain on disposal of subsidiaries (153,000) -
Gain on deregistration of subsidiaries (3,904) -
Share of profit of an associate - (290)
Provision for impairment loss on
trade and contract assets - 91,757
Share based payment expense - 384,917
Gain on bargain purchase of a subsidiary - (3,930)
Interest expenses 738 656
Bank interest income (10) (9)
------------ -------------
Operating cash flows before movements
in working capital (300,999) (529,272)
( 24,265
Increase in inventories ) (81,823)
Increase in deposit, prepayments
and other receivables (14,525) (21,868)
Increase in amounts due to a director 235,618 264,538
(Increase)/Decrease in trade receivables
and contract assets (11,307) 7,981
Increase/(Decrease) in trade payables
and contract liabilities 16,005 (11,464)
Increase in other payables and accrued
expenses 311,158 270,978
------------ -------------
211,685 (100,930)
Payment of interest portion of lease
liabilities (738) (656)
Net cash generated from/(used in)
operating activities 210,947 (101,586)
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash inflow on acquisition of
a subsidiary - 43,685
Disposal of subsidiaries (1,018) -
Interest income received 10 9
------------ -------------
Net cash (used in)/generated from
investing activities (1,008) 43,694
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of shares - 89,540
Payment of principal portion of lease
liabilities (33,582) (28,566)
------------ -------------
Net cash (used in)/generated from
financing activities (33,582) 60,974
------------ -------------
Net increase in cash and cash equivalents 176,357 3,082
Foreign exchange realignment (148,988) (10,886)
Cash and cash equivalents at 1 January 8,198 16,002
------------ -------------
Cash and cash equivalents at 31
December 35,567 8,198
============ =============
The notes to the financial statements form an integral part of
these financial statements.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
1. GENERAL INFORMATION
Sealand Capital Galaxy Limited (the "Company") was incorporated
in the Cayman Islands on 22 May 2015 as an exempted company with
limited liability under the Companies Law of the Cayman Islands.
The Company's registered office is at Willow House, PO Box 709,
Cricket Square, Grand Cayman, KY1-1107, Cayman Islands. These
consolidated financial statements comprise the Company and its
subsidiaries (together referred to as the "Group")
The Company's nature of operations is to act as a special
purpose acquisition company.
The Group engaged in digital marketing and other IT and
e-Commerce related businesses.
2. BASIS OF PREPARATION
These financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRSs") and IFRIC
interpretations applicable to companies reporting under IFRSs.
These financial statements are presented in Great British Pounds
(" GBP ") rounded to the nearest Great British Pound, except for
otherwise indicated, and have been prepared under the historical
cost convention.
These financial statements have been prepared on a going concern
basis.
3. STANDARDS AND INTERPRETATIONS
(i) New standards, amendments and interpretations adopted by the Group and Company
The following IFRS or IFRIC interpretations were effective for
the first time for the financial year beginning 1 January 2022 .
Their adoption has not had any material impact on the disclosures
or on the amounts reported in these financial statements:
Standard / Interpretation Application
IAS 1 & IAS 8 amendments Definition of Material
IFRS 3 amendments Business Combinations - Reference to
Conceptual Framework
Amendments to IAS 16 Property, Plant and Equipment
Amendments to IAS 37 Provisions, Contingent Liabilities and
Contingent Assets
Annual Improvements to IFRS Standards 2018-2020 cycle
(ii) New standards, amendments and interpretations not yet adopted
Standard / Interpretation Application
IAS 1 amendments Presentation of Liabilities as Current or
Non-current
Effective : Annual periods beginning on or after 1 January
2023
IAS 1 amendments Classification of Liabilities as Current or
Non-current
Effective: Annual periods beginning on or after 1 January
2023
IAS 1 amendments Presentation of Financial Statements and IFRS
Practice Statement 2: Disclosure of Accounting Policies
IAS 8 amendments Accounting policies Changes in Accounting
Estimates and Errors - Definition of Accounting Estimates
IAS 12 amendments Income Taxes - Deferred Tax related to Assets
and Liabilities arising from a Single Transaction
There are no IFRSs or IFRIC interpretations that are not yet
effective that would be expected to have a material impact on the
Company or Group.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
4. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of consolidation
These financial statements comprise the financial statements of
the Company and entities controlled by the Company (its
subsidiaries) for the year ended 31 December 2022.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only
if, the Group has:
Power over the investee (i.e., existing rights that give it the
current ability to direct the relevant activities of the
investee)
Exposure, or rights, to variable returns from its involvement
with the investee
The ability to use its power over the investee to affect its
returns
Generally, there is a presumption that a majority of voting
rights results in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
The contractual arrangement(s) with the other vote holders of
the investee
Rights arising from other contractual arrangements
The Group's voting rights and potential voting rights
(i) Business combinations
The Group accounts for business combinations using the
acquisition method when control is transferred to the Group. The
consideration transferred in the acquisition is generally measured
at fair value, as are the identifiable net assets acquired. Any
goodwill that arises is tested annually for impairment. Any gain on
a bargain purchase is recognised in profit or loss immediately.
Transaction costs are expensed as incurred, except if related to
the issue of debt or equity securities.
The consideration transferred does not include amounts related
to the settlement of pre-existing relationships. Such amounts are
generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the
date of acquisition. If an obligation to pay contingent
consideration that meets the definition of a financial instrument
is classified as equity, then it is not remeasured and settlement
is accounted for within equity. Otherwise, other contingent
consideration is remeasured at fair value at each reporting date
and subsequent changes in the fair value of the contingent
consideration are recognised in profit or loss.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the
consolidated financial statements from the date on which control
commences until the date on which control ceases.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Basis of consolidation (Continued)
(iii) Loss of control
When the Group loses control over a subsidiary, it derecognises
the assets and liabilities of the subsidiary, and any related NCI
and other components of equity. Any resulting gain or loss is
recognised in profit or loss. Any interest retained in the former
subsidiary is measured at fair value when control is lost. A change
in the ownership interest of a subsidiary, without a loss of
control, is accounted for as an equity transaction.
(iv) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated.
Unrealised gains arising from transactions with equity-accounted
investee are eliminated against the investment to the extent of the
Group's interest in the investee. Unrealised losses are eliminated
in the same way as unrealised gains, but only to the extent that
there is no evidence of impairment.
(b) Revenue recognition
Revenue is recognised to depict the transfer of services to
customers in an amount that reflects the consideration to which the
Group expects to be entitled in exchange for those goods or
services. Specifically, the Group uses a 5-step approach to revenue
recognition:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the contract; and
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
The Group recognises revenue when (or as) a performance
obligation is satisfied, i.e. when "control" of the goods or
services underlying the particular performance obligation is
transferred to customers.
A performance obligation represents a good or service (or a
bundle of goods or services) that is distinct or a series of
distinct goods or services that are substantially the same.
Control is transferred over time and revenue is recognised over
time by reference to the progress towards complete satisfaction of
relevant performance obligation if one of the following criteria is
met:
- the customer simultaneously receives and consumes the benefits
provided by the entity's performance as the Group performs;
- the Group's performance creates and enhances an asset that the
customer controls as the Group performs; or
- the Group's performance does not create an asset with an
alternative use to the Group and the Group has an enforceable right
to payment for performance completed to date.
Otherwise, revenue is recognised at a point in time when the
customer obtains control of the distinct good or service.
A contract asset represents the Group's right to consideration
in exchange for services that the Group has transferred to a
customer that is not unconditional. It is assessed for impairment
in accordance with IFRS 9. In contrast, a receivable represents the
Group's unconditional right to consideration, i.e. only the passage
of time is required before payment of that consideration is
due.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Revenue recognition (Continued)
A contract liability represents the Group's obligation to
transfer services to a customer for which the Group has received
consideration (or an amount of consideration is due) from the
customer.
A contract asset and a contract liability relating to a contract
are accounted for and presented on a net basis.
Revenue from marketing service and e-commerce service is
recognised when the performance obligation is satisfied.
Interest income from a financial asset is accrued on a time
basis using the effective interest method.
(c) Government grants
Government grants are recognised where there is reasonable
assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an
expense item, it is recognised as income on a systematic basis over
the periods that the related costs, for which it is intended to
compensate, are expensed. When the grant relates to an asset, it is
recognised as income in equal amounts over the expected useful life
of the related asset.
When the Group receives grants of non-monetary assets, the asset
and the grant are recorded at nominal amounts and released to
profit or loss over the expected useful life of the asset, based on
the pattern of consumption of the benefits of the underlying asset
by equal annual instalments.
(d) Foreign currency transactions
(i) Functional and presentational currency
Items included in the Financial Statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ("functional
currency"), being British Pound Sterling ("GBP" or " GBP "),
Chinese Yuan ("CNY") and Hong Kong Dollar ("HKD"). The Group
Financial Statements are presented in GBP.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Monetary assets and liabilities denominated in
foreign currencies are translated at the rates of exchange ruling
at the Statement of Financial Position date. Foreign exchange gains
and losses resulting from the settlement of such transactions, and
from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies, are recognised
in the Statement of Comprehensive Income.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Foreign currency transactions (Continued)
(iii) Group companies
The results and financial position of all the Group entities
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
- assets and liabilities for each statement of financial
position presented are translated at the closing exchange rate at
the date of that statement of financial position;
- income and expenses for each statement of comprehensive income
are translated at average exchange rates; and
- all resulting exchange differences are recognised in other comprehensive income (loss).
(e) Goodwill and intangible assets
Goodwill
Goodwill arising on an acquisition of a business is carried at
cost as established at the date of acquisition of the business less
accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to
each of the Group's cash-generating units (or groups of
cash-generating units) that is expected to benefit from the
synergies of the combination.
A cash-generating unit to which goodwill has been allocated is
tested for impairment annually, or more frequently when there is
indication that the unit may be impaired. For the goodwill arising
on an acquisition in a reporting period, the cash-generating unit
to which goodwill has been allocated is tested for impairment
before the end of that reporting period. If the recoverable amount
of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to the other assets of
the unit on a pro rata basis based on the carrying amount of each
asset in the unit. Any impairment loss for goodwill is recognised
directly in profit or loss. An impairment loss recognised for
goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the determination of
the amount of profit or loss on disposal.
Intangible assets - Customer contract
The acquired customer contracts in a business combination are
recognised at fair value at the acquisition date. They have a
finite useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated using the percentage of
revenue recognised of the corresponding contract.
(f) Property, plant and equipment
Property, plant and equipment is measured on the cost basis and
therefore stated at historic cost less accumulated depreciation.
Historic cost includes expenditure that is directly attributable to
the acquisition of the items.
All repairs and maintenance expenditure is charged to the
Consolidated Statement of Profit or Loss during the financial
period in which they are incurred.
Depreciation is calculated using the straight-line method to
allocate their cost over their estimated useful lives, as
follows:
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Property, plant and equipment (Continued)
Owned assets
Office equipment 36 - 60 months
Leasehold improvement lower of 36 months and the lease term
Right-of-use assets
Buildings Over the lease term
The assets' useful lives are reviewed, and, if appropriate,
asset values are written down to their estimated recoverable
amounts, at each reporting date. Gains and losses on disposals are
determined by comparing proceeds with the carrying amounts, and are
included in profit or loss.
(g) Impairment of non-financial assets
Goodwill and intangible assets with indefinite useful lives or
those not yet available for use are not subject to amortisation and
are tested for impairment at least annually, irrespective of
whether there is any indication that they are impaired. All other
assets are tested for impairment whenever there are indications
that the asset's carrying amount may not be recoverable. An
impairment loss is recognised as an expense immediately for the
amount by which the asset's carrying amount exceeds its recoverable
amount. Recoverable amount is the higher of fair value, reflecting
market conditions less costs of disposal, and value in use. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessment of time value of money and
the risk specific to the asset. For the purposes of assessing
impairment, where an asset does not generate cash inflows largely
independent from other assets, the recoverable amount is determined
for the smallest group of assets that generate cash inflows
independently (i.e. a cash-generating unit). As a result, some
assets are tested individually for impairment and some are tested
at cash-generating unit level. Goodwill in particular is allocated
to those cash-generating units that are expected to benefit from
synergies of the related business combination and represent the
lowest level within the Group at which the goodwill is monitored
for internal management purpose and not be larger than an operating
segment.
Impairment losses recognised for cash-generating units, to which
goodwill has been allocated, are credited initially to the carrying
amount of goodwill. Any remaining impairment loss is charged
pro-rata to the other assets in the cash generating unit, except
that the carrying value of an asset will not be reduced below its
individual fair value less cost of disposal, or value in use, if
determinable. An impairment loss on goodwill is not reversed in
subsequent periods. In respect of other assets, an impairment loss
is reversed if there has been a favourable change in the estimates
used to determine the asset's recoverable amount and only to the
extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised. Impairment losses recognised in an interim period in
respect of goodwill are not reversed in a subsequent period. This
is the case even if no loss, or a smaller loss, would have been
recognised had the impairment been assessed only at the end of the
financial year to which the interim period relates.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Financial instruments
Financial assets and financial liabilities are recognised in the
statements of financial position when a group entity becomes a
party to the contractual provisions of the instrument. Financial
assets and financial liabilities within the scope of IFRS 9 are
initially measured at fair value and transaction costs that are
directly attributable to the acquisition or issue of financial
assets and financial liabilities are added to or deducted from the
fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition.
The Group's financial assets, including deposits, receivables,
contract assets and cash and cash equivalents, are subsequently
measured at amortised cost using the effective interest method,
less identified impairment charges (see Note 4(i)) as the assets
are held within a business model whose objective is to hold assets
in order to collect contractual cash flows and the contractual
terms of the financial assets give rise on specific dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial liabilities include lease liabilities, trade payables,
amount due to a director, other payables and accruals. All
financial liabilities are subsequently measured at amortised cost
using the effective interest method.
(i) Impairment of financial assets
The Group recognises loss allowances for expected credit loss on
the financial instruments that are not measured at fair value
through surplus or deficit. The Group considers the probability of
default upon initial recognition of financial assets and assesses
whether there has been a significant increase in credit risk on an
ongoing basis.
The Group considers the credit risk on a financial instrument is
low if the financial instrument has a low risk of default, the
debtor has a strong capacity to meet its contractual cash flow
obligations in the near term and adverse changes in economic and
business conditions in the longer term may, but will not
necessarily, reduce the ability of the debtor to fulfill its
contractual cash flow obligations.
The carrying amount of the receivables is reduced through the
use of the receivable impairment charges account. Changes in the
carrying amount of the receivable impairment charges account are
recognised in surplus or deficit. The receivable is written off
against the receivable impairment charges account when the Group
has no reasonable expectations of recovering the receivable.
If, in a subsequent period, the amount of expected credit losses
decreases, the reversal would be adjusted to the receivable
impairment charges account at the reporting date. The amount of any
reversal is recognised in surplus or deficit.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j) Derecognition of financial assets and financial liabilities
Financial assets are derecognised when the contractual rights to
receive the cash flows of the financial assets expire; or where the
Group transfers the financial assets and either (i) it has
transferred substantially all the risks and rewards of ownership of
the financial assets; or (ii) it has neither transferred nor
retained substantially all the risks and rewards of ownership of
the financial assets but has not retained control of the financial
assets.
Financial liabilities are derecognised when they are
extinguished, i.e. when the obligation is discharged, cancelled or
expires.
(k) Inventories
Inventories are stated at the lower of cost or net realisable
value, with cost determined using the first-in, first-out ("FIFO")
cost method. Net realisable value is the estimated selling price in
the ordinary course of business, less estimated cost necessary to
make the sale. Allowances are established to reduce the cost of
excess and obsolete or damaged inventories to their estimated net
realiable value.
(l) Trade Receivables
In determining the recoverability of trade receivables, the
Group considers any change in the credit quality of the trade
receivables from the initial recognition date to the end of each of
the reporting period. In the opinion of the directors of the
Company, apart from those balances for which allowances have been
provided, other trade receivables at the end of each reporting
period are of good credit quality which considering the high
credibility of these customers, good track record with the Group
and subsequent settlement, the management believes that no
impairment allowance is necessary in respect of unsettled
balances.
The Group applied the simplified approach to provide the
expected credit losses ("ECL") prescribed by IFRS 9. The impairment
methodology is set out in Note 4 and Note 5(iii) respectively. As
part of the Group's credit risk management, the Group assesses the
impairment for its customers based on different group of customers
which share common risk characteristics that are representative of
the customers' abilities to pay all amounts due in accordance with
the contractual terms.
(m) Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held
at call with banks.
(n) Current and deferred income tax
Income tax comprises current and deferred tax. Current income
tax is recognised in the profit or loss, except to the extent that
it relates to items recognised directly in equity. In this case the
tax is also recognised directly in other comprehensive income or
directly in equity, respectively.
Current income tax is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period
in the countries where the Company's subsidiaries operate and
generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n) Current and deferred income tax (Continued)
Deferred income tax is recognised, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the Consolidated
Financial Statements. However, the deferred tax is not accounted
for if it arises from initial recognition of an asset or liability
in a transaction other than a business combination that, at the
time of the transaction, affects neither accounting nor taxable
profit or loss. Deferred income tax is determined using tax rates
(and laws) that have been enacted, or substantially enacted, by the
end of the reporting period and are expected to apply when the
related deferred income tax asset is utilised, or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities, and when the deferred income tax assets
and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
(o) Leases
Lessee
All leases with a term of more than 12 months are recognised as
an asset representing the right to use of the underlying asset and
a liability representing the obligation to make lease payments,
unless the underlying asset is of low value. Both the asset and the
liability are initially measured on a present value basis.
Right-of-use assets are recognised under fixed assets and are
measured at cost less any accumulated depreciation and impairment
losses and adjusted for any remeasurement of the lease liabilities.
Right-of-use assets are depreciated on a straight-line basis over
the shorter of the useful life of the assets and the lease term.
Lease liabilities are initially measured at the present value of
unpaid lease payments and subsequently adjusted by the effect of
the interest on and the settlement of the lease liabilities, and
the re-measurement arising from any reassessment of the lease
liabilities or lease modifications.
Lessor
Leases where substantially all the risks and rewards of
ownership of assets remain with the Group are classified as
operating leases. Assets leased under operating leases are included
in fixed assets and rentals receivable are credited to surplus or
deficit on the straight-line basis over the lease term.
(p) Going Concern
The director's cash-flow projections for the forthcoming 12
months conclude there will be the need for additional cash
resources to fully implement the business plans. The directors are
in discussions with a number of individuals that may lead to
further equity and/or loans being raised. There is no certainty
that any such funds will be forthcoming or the price and other
terms being acceptable.
(q) Employee benefits
Salaries, wages, paid annual leave, bonuses and non-monetary
benefits are accrued in the Year in which the associated services
are rendered by the employees of the Group.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(r) Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
(s) Share-based payments
Equity-settled share-based payment transactions in exchange for
services of goods are measured at the fair value of the goods or
services received, except where that fair value cannot be estimated
reliably, in which case they are measured at the fair value of the
equity instruments granted, measured at the date the entity obtains
the goods or the counterparty renders the service. The fair value
excludes the effect of non-market-based vesting conditions. Details
regarding the determination of the fair value of equity-settled
share-based transactions are set out in Note 22.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of the
number of equity instruments that will eventually vest. At each
reporting date, the Group revises its estimate of the number of
equity instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of
the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to reserves.
5. FINANCIAL RISK MANAGEMENT
The Board's overall risk management strategy seeks to assist the
Group in meeting its financial targets, while minimising potential
adverse effects on financial performance. Its functions include the
review of future cash flow requirements.
The Group's activities expose it to a variety of financial risks
as below.
(i) Interest rate risk
The Group has floating rate financial assets in the form of
deposit accounts with major banking institutions of GBP 35,567.
Apart from the abovementioned amount, no other financial instrument
is subjected to interest rate risk. If the interest rate increases
or decreases for 100 basis points, the effect in profit and loss
will increase or decrease for GBP 356.
(ii) Foreign exchange risk
Foreign currency risk is the risk to earnings or capital arising
from movements in foreign exchange rates. The Group's foreign
currency risk primarily arises from currency exposures originating
from its foreign exchange dealings and other investment
activities.
The Group monitors the relative foreign exchange positions of
its assets and liabilities to minimise foreign currency risk. The
foreign currency risk is managed and monitored on an ongoing basis
by senior management of the Group.
The following table demonstrates the sensitivity at the end of
the reporting period to a reasonably possible change in CNY with
all other variables held constant, of the Group's loss before tax
(due to changes in the fair value of monetary assets and
liabilities).
Increase/(decrease)
in loss before tax
------------------------
2022 2021
GBP GBP
CNY strength/weakened against GBP
for 1 per cent 347/(347) 718/(718)
=========== ===========
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
5. FINANCIAL RISK MANAGEMENT (CONTINUED)
(iii) Credit risk
Credit risk is the risk that one party to a financial instrument
will cause a financial loss for the other party by failing to
discharge an obligation. The carrying amount of financial assets
and contract assets recognised on the consolidated statement of
financial position, which is net of impairment losses, represents
the Group's exposure to credit risk without taking into account the
value of any collateral held or other credit enhancements. The
Group's maximum exposure to credit risk is summarised in Note
24.
Most of the Group's cash in banks have been deposited with
reputable and creditworthy banks in Hong Kong. Management considers
there is minimal credit risk associated with those balances.
(iv) Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting obligations associated with financial
liabilities. The responsibility for liquidity risk management rests
with the Board of Directors.
As at the reporting date, the Group was in a net current
liabilities positions. The Group is currently obtaining cash
advances from one of a director to meet its temporary operating
needs. Further, the Board of Directors is sourcing alternatives for
the Group's future capital needs include the issue of equity
instruments and external borrowing. These alternatives are
evaluated to determine the optimal mix of capital resources for our
capital needs.
(v) Market risk
Market risk is the risk that changes in market prices, such as
interest rates and foreign exchange rates, will affect the Group's
income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market
risk exposures within acceptable parameters, while optimising the
return. The Group does not hedge these risk exposures due to the
lack of any market to purchase financial instruments.
(vi) Capital risk management
The Company manages its capital to ensure that the Company will
be able to continue as a going concern while maximising the return
to shareholder through the optimisation of the debt and equity
balances.
The capital structure of the Company consists of debt, which
includes equity attributable to the owners of the Company,
comprising share capital, share premium and accumulated losses.
The directors of the Company review the capital structure
regularly. As part of this review, the directors of the Company
consider the cost of capital and the associated risks, and take
appropriate actions to adjust the Company's capital structure. The
overall strategy of the Company remained unchanged.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
6. CRITICAL ACCOUNTING JUDGEMENTS AND KEY UNCERTAINTIES OF ESTIMATION UNCERTAINTY
The preparation of the Group's financial statements requires
management to make judgements, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and
liabilities, and their accompanying disclosures and the disclosure
of contingent liabilities. Uncertainty about these assumptions and
estimates could result in outcomes that could require a material
adjustment to the carrying amounts of the assets or liabilities
affected in the future.
The estimates and underlying assumption are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
Key source of estimation uncertainty
Trade receivables and contract assets
The Group's customer base consists of a wide range of clients
and the trade receivables and contract assets are categorised by
common risk characteristics that are representative of the
customers' abilities to pay all amounts due in accordance with the
contractual terms. The Group applies a simplified approach in
calculating ECL for trade receivables and contract assets and
recognises a loss allowance based on lifetime ECL at each reporting
date and has established a provision matrix that is based on its
historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment. The
expected loss rate used in the provision matrix is calculated for
each category based on actual credit loss experience over the prior
years and adjusted for current and forward-looking factors to
reflect differences between economic conditions during the period
over which the historical data has been collected, current
conditions and the Group's estimate on future economic conditions
over the expected lives of the receivables. There was no change in
the estimation techniques or significant assumptions made during
the Year.
At 31 December 2022, a provision for impairment loss on trade
receivables and contract assets of GBPNil (2021: GBP91,757) was
recognised according to the management expected loss rate on the
ageing group. The Group's trade receivables which are past due but
which the Group has not impaired as there have not been any
significant changes in credit quality of customers and the
management believes that the amounts are fully recoverable.
Receivables that were neither past due nor impaired at 31 December
2022 relate to a wide range of customers for whom there was no
history of default.
The Group does not hold any collateral over trade receivables
and contract assets at 31 December 2022 (2021: Nil).
Allowance for obsolete inventories
Allowance for obsolete inventories is made for those identified
obsolete and slow-moving inventories and inventories with a
carrying amount higher than net realisable value. The assessment of
the allowance involves management's judgement and estimates on
which are influenced by assumptions concerning future sales and
judgements in determining the appropriate level of inventory
allowance against identified surplus or obsolete items. Where the
actual outcome in future is different from the original estimate,
such difference will impact the carrying value of inventories and
allowance charge/write-back in the period in which such estimate
has been changed.
At 31 December 2022 and 2021, no allowance for obsolete
inventories was recognised.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
7. SEGMENT INFORMATION
The Chief Operating Decision Maker ("CODM") has been identified
as the executive directors of the Company who reviews the Group's
internal reporting in order to assess performance and allocate
resources. The CODM has determined the operating segments based on
these reports.
For management purposes, the Group is organised into business
units based on their products and services, and has reportable
operating segments as follows:
(a) The digital marketing and payment segment includes services
on enlisting merchants to mobile payment gateways and providing
digital advertising services;
(b) The software development and support segment includes sales
and distribution of mobile game and all other I.T. related
development and support services; and
(c) The e-commerce segment includes sales of goods through
internet and provision for consultancy services related to
e-commerce.
Digital
marketing Software
and payment development
and support e-Commerce Unallocated Total
GBP GBP GBP GBP GBP
Year ended 31 December
2022
Revenue 887 - 225,863 - 226,750
============== =============== ============== =============== ===============
Segment (loss)/profit (53,128) (7,920) 4,534 (123,055) (179,569)
============== =============== ============== =============== ===============
Depreciation - - - 34,746 34,746
============== =============== ============== =============== ===============
Assets 443 - 196,419 74,319 271,181
============== =============== ============== =============== ===============
Liabilities 21,767 - 125,892 1,016,365 1,164,024
============== =============== ============== =============== ===============
Year ended 31 December
2021
Revenue 148,530 - 29,137 - 177,667
============== =============== ============== =============== ===============
Segment (loss)/Profit (162,520) 24,641 (174,093) (721,741) (1,033,713)
============== =============== ============== =============== ===============
Depreciation - - 137 31,204 31,341
============== =============== ============== =============== ===============
Provision for impairment
loss on trade and
other receivables 78,881 - 12,876 - 91,757
============== =============== ============== =============== ===============
Assets 30,402 200 99,161 57,551 187,314
============== =============== ============== =============== ===============
Liabilities 258,425 43,484 96,713 812,857 1,211,479
============== =============== ============== =============== ===============
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
7. SEGMENT INFORMATION (CONTINUED)
Geographical information:
2022 2021
Revenue by Geography GBP GBP
Macau - 148,192
Hong Kong 226,750 21,103
Mainland China - 8,372
226,750 177,667
========= =========
Information about major customers
For the years ended 31 December 2022, no external customer
contributed more than 10% to the Group revenue (2021: one external
customer, amounting to GBP144,839 (approximately 82% to the Group
revenue)).
8. REVENUE AND OTHER INCOME
2022 2021
GBP GBP
REVENUE
Advertising services 887 148,530
Commission income 1, 301 1,670
eCommerce sales 224,562 27,467
---------- ---------
226, 750 177,667
========== =========
OTHER INCOME
Bank interest income 10 9
Gain on reversal of overprovision
of expenses - 6,660
Government subsidy 2,730 65,995
Others 17,744 15,434
20,484 88,098
========== =========
9. LOSS BEFORE TAX
2022 2021
GBP GBP
Loss before tax has been arrived at
after charging:
Depreciation - Owned assets 1,387 2,772
Depreciation - Right of use assets 33,359 28,568
Cost of inventories sold 133,462 16,903
Exchange gain, net (125,886) (22,907)
Provision for impairment losses on
trade and contract assets - 91,757
Staff cost (including Director Remuneration) 307,105 352,036
Share-based payment expense - 357,417
Audit fees
* for the year 52,241 19,411
* underprovision for prior years - 1,276
=========== ==========
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
10. EMPLOYEES
The average number of employees during the Year was made up as
follows:
2022 2021
Directors 2 3
====== ======
Staff 7 11
====== ======
2022 2021
GBP GBP
Staff costs, including directors'
costs comprise:
Wages, salaries and other staff costs 307,105 352,036
Share-based remuneration - 357,417
--------- ---------
307,105 709,453
========= =========
Key Management Remuneration
The directors' emoluments in respect of qualifying services,
which all related to short-term employee benefits, were as
follows:
2022 2021
GBP GBP
Chung Lam Nelson Law
Salaries and fees - paid
in cash 180,000 180,000
Share-based payment - 119,139
Geoffrey John Griggs
Salaries and fees - paid
in cash 18,000 18,000
Share-based payment - 119,139
--------- ---------
198,000 436,278
========= =========
No pension contributions were made on behalf of the directors of
the Company.
No share options were granted to directors during the year.
Share options to the value of GBP238,278 were granted to directors
during year ended 31 December 2021.
Mr. Mark Barney Battles resigned as director of the Company on
31 March 2021.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
11. INCOME TAX
No provision for profits tax has been made in these consolidated
financial statements as the Group did not have any assessable
profits. The profits tax rate for Hong Kong is currently at 16.5%
(2021: 16.5%) of the estimated assessable profits for the Year.
A reconciliation of income tax expense applicable to the loss
before tax at the statutory tax rate of Hong Kong to the income tax
expense at the effective tax rate of the Group is as follows:
2022 2021
GBP GBP
Loss before tax (179,569) (1,033,713)
=========== =============
Tax at the statutory tax rate of 16.5% (29,629) (182,715)
Effect of different tax rates in other
jurisdictions 51,135 836
Income not subject to tax (178,623) (4,129)
Expenses not deductible for tax 157,216 130,090
Tax losses not recognized for the
year 4,856 55,918
Utilisation of tax losses not recognised (4,955) -
for the year
----------- -------------
- -
=========== =============
Potential deferred tax assets arising from operating loss
carryforward totalling approximately GBP 570,000 (2021: GBP
924,000) have not been recognised due to uncertainty as to when
taxable profits will be generated.
12. BASIC AND DILUTED LOSS PER SHARE
Basic loss per share is calculated by dividing the loss
attributable to the Company's owners of GBP 177,096 (2021: GBP
962,473 ) by the weighted average number of 602,495,699 ordinary
shares (2021: 595,695,385) in issue during 2022.
The following potential ordinary shares are anti-diluted and
therefore excluded from the weighted average number of ordinary
shares for the purpose of diluted loss per share.
2022 2021
GBP GBP
Effect of potential ordinary shares
Employee share options (Note 22(a)) 105,122,539 105,122,539
============= =============
Diluted loss per share was the same as basic loss per share as
no potential dilutive ordinary shares were outstanding for both the
years ended 31 December 2022 and 2021.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
13. PROPERTY, PLANT AND EQUIPMENT
Office equipment Leasehold Right-of-use
improvement Assets Total
GBP GBP GBP GBP
At 1 January 2022 - 1,159 14,491 15,650
Additions for the
year - - 59,721 59,721
Depreciation for
the year - (1,387) (33,359) (34,746)
Exchange differences - 228 3,938 4,166
At 31 December 2022 - - 44,791 44,791
================== ============== ============== ==========
At 1 January 2021 489 3,461 43,300 47,250
Depreciation for
the year (489) (2,283) (28,568) (31,340)
Exchange differences - (19) (241) (260)
At 3 1 December 2021 - 1,159 14,491 15,650
================== ============== ============== ==========
1 4 . INVENTORIES
2022 2021
GBP GBP
Finished goods 106,088 81,823
========= ========
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
15 . TRADE RECEIVABLES, DEPOSIT, PREPAYMENT AND OTHER RECEIVABLES
(a) Trade receivables
2022 2021
GBP GBP
Trade receivables - billed 26,430 28,186
Trade receivables - unbilled - 54,827
Less: Provision for impairment
loss - (67,890)
26,430 15,123
======== ==========
During the year, the Group has recognised a provision for
impairment loss on trade receivables of Nil (2021: GBP66,918). The
Group normally grants credit periods of up to 90 days to its
customers as approved by the management on a case by case
basis.
The ageing analysis of trade receivables - billed (net of loss
allowance) based on invoice date at the end of the reporting period
is as follows:
2022 2021
GBP GBP
Within 30 days 9,305 4,010
31 to 60 days 6,134 3,651
61 to 90 days 2,006 1,822
91 to 180 days 8,985 5,640
26,430 15,123
======== ========
At the reporting period end, all the trade receivables - billed
are past due but not impaired at the reporting date. The directors
of the Company considered that the ECL for trade receivables is
insignificant as at 31 December 2022 (2021: same) since the ageing
of all the trade receivables is within 180 days.
The carrying amount of the Group's trade receivables as at 31
December 2022 and 2021 was denominated in Hong Kond Dollars.
(b) Deposit ,p repayments and other receivables
2022 2021
GBP GBP
Prepayments 35,814 51,577
Deposit and other receivables 22,491 14,943
-------- --------
58,305 66,520
======== ========
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
16. TRADE PAYABLES
The following is an ageing analysis of trade payables presented
based on the invoice date at the end of each reporting period:
2022 2021
GBP GBP
Within 30 days - 36,110
31 to 60 days - -
61 to 90 days - -
91 to 180 days - -
181 to 365 days - 2,213
More than 365 days 36,110 79,530
-------- ---------
36,110 117,853
======== =========
17. AMOUNT DUE TO A DIRECTOR
The amount was unsecured, interest-free and had no fixed terms
of repayment.
18. LEASE LIABILITIES
The total minimum lease liabilities under finance leases and
their present values at the reporting date are as follows:
2022 2021
GBP GBP
Current portion:
Gross finance lease liabilities 30,544 14,823
Finance expense not recognised (686) (73)
-------- --------
29,858 14,750
======== ========
Non-current portion:
Gross finance lease liabilities 15,272 -
Finance expense not recognised (75) -
-------- --------
15,197 -
======== ========
45,055 14,750
======== ========
2022 2021
GBP GBP
The net finance lease liabilities are
analysed as follows:
* Not later than 1 year 29,858 14,750
15,197 -
* Later than 1 year but not more than 5 years
-------- --------
Net finance lease liabilities 45,055 14,750
======== ========
The interest on lease liabilities for the year ended 31 December
2022 was GBP 738 (2021: GBP656). The Group does not recognise
right-of-use assets and lease liabilities for short-term leases and
leases where the underlying asset is of low value. The expenses for
these leases for the year ended 31 December 2022 were GBP Nil
(2021: GBP 6,940 ).
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
19. SHARE CAPITAL
2022 2021
--------------------------- ------------------------
Number Number
of shares of shares
GBP GBP
Ordinary shares
issued and fully
paid
At 1 January 5 95,694,385 59,569 509,830,346 50,983
Issue of shares 120,120,695 12,012 85,864,039 8,586
At 31 December 715,815,080 71,581 595,694,385 59,569
============== =========== ============= =========
On 20 December 2022, the Company has issued 115,211,604 new
ordinary shares of 0.21 pence each to Mr. Nelson Law, the Company's
Chairman and Chief Financial Officer, for the conversion of the
loan owned to him of GBP 241,944.
On 4 April 2022, the Company has issued 4,909,091 new ordinary
shares of the Company in lieu of professional service provided.
On 30 March 2021, Mr Nelson Law, the Company's Chairman and
Chief Financial Officer, subscribed for 6,206,896 new ordinary
shares of the Company of 1.45 pence each for a cash consideration
of GBP90,000 in aggregate.
On 26 July 2021, the Company entered into an advisory and
consultancy agreement with an independent third party and settled
the service fee of GBP22,500 by issuing 1,800,000 ordinary of 1.25
pence each.
On 19 October 2021, the Company issued 77,142,857 new ordinary
shares of 0.7 pence each to Mr. Nelson Law, the Company's Chairman
and Chief Financial Officer, for the conversion of the loan owned
to him of GBP540,000.
On 19 October 2021, the Company entered into a service agreement
with an entity related to Mr. Geoffrey John Griggs, a director of
the Company, and settled the service fee by issuing 714,286
ordinary shares of 0.7 pence each.
20. CAPITAL AND RESERVES
The nature and purpose of equity and reserves are as
follows:
Share capital comprises the nominal value of the ordinary issued
share capital of the Company.
Share Premium represents consideration less nominal value of
issued shares and costs directly attributable to the issue of new
shares.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
21. BUSINESS COMBINATION
During the year ended 31 December 2021, the Company have
acquired additional interest in Hyrax from 40% to 100%. Hyrax had
no material impact on the Group's consolidated financial statements
of comprehensive income, both from the date of the acquisition as
well as assuming its acquisition had been effected as at 1 January
2021.
The fair value of the identifiable assets acquired and
liabilities recognised at the date of acquisition as follows:
GBP
Trade and other receivables 13,298
Due from immediate holding company 257
Cash and bank balance 43,428
Trade and other payables (50,433)
Total identifiable net assets at fair value 6,550
Amount previously accounted for as an associate (2,620)
Gain on bargain purchase (3,930)
Net assets acquired -
Payment of nominal cash consideration -
Total purchase consideration -
Assumption of receivable from immediate holding
company 257
Cash and bank balance acquired 43,428
Net cash flow on acquisition of a subsidiary 43,685
==========
The fair value of the identifiable assets acquired and
liabilities recognised at the date of acquisition in this annual
report was assessed by the management with their reasonable
estimation. The Group did not engage any professional party to
perform a detailed purchase price allocation exercise due to the
size of the acquisition and the consideration of cost-saving.
22. SHARE-BASED PAYMENTS
(a) Share Options
During the year ended 31 December 2021, the Group has
implemented a stock option plan (the "Plan") for the employees and
directors, which awards options over the ordinary share of the
Company. The Board of Directors (the "Board") approves all grants
and the terms of all grants. Options awarded under the Plan
generally vest on issue and exercisable over a period from one year
after the grant date to four years after the grant date.
The fair value of each option granted is estimated on grant date
using the Black-Scholes option-pricing model by applying the
following assumptions:
Share price GBP0.0007
Risk-free interest rate 0.0022%
Expected life of warrant (years) 4
Expected annualised volatility 0.66
Expected dividend yield Nil
For the year ended 31 December 2021, the Company recorded
share-based compensation expenses in the amount of GBP357,417.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
22. SHARE-BASED PAYMENTS (CONTINUED)
(a) Share Options (Continued)
At 31 December 2022 and 2021, the Group had 105,122,539 share
options outstanding as follows.
Date of Exercise Expiry Exercise Number Exercisable at
Grant start date date price granted 31 December 2021
19/10/2021 19/10/2021 18/10/2025 0.7p Nil 105,122,539
(b) Shares issued for services
On 4 April 2022, the Company has issued 4,909,091 new ordinary
shares of the Company in lieu of professional service provided.
On 26 July 2021, the Company entered into an advisory and
consultancy agreement with an independent third party and settled
the service fee of GBP22,500 by issuing 1,800,000 ordinary of 1.25
pence each.
On 19 October 2021, the Company entered into a service agreement
with an entity related to Mr. Geoffrey John Griggs, a director of
the Company, and settled the service fee by issuing 714,286
ordinary of 0.7 pence each.
23. RELATED PARTY TRANSACTIONS
(a) Details of the compensation of key management personnel was
disclosed in Note 10 to the financial statements.
(b) Apart from the balances with related parties at the end of
the reporting period disclosed elsewhere in the financial
statements, the Company had not entered into any significant
related party transactions for the Year.
24. FINANCIAL INSTRUMENTS BY CATEGORY
The totals for each category of financial instruments is as
follows:
2022 2021
Financial assets GBP GBP
Financial assets at amortised
cost
Trade receivables 26,430 15,123
Deposit and other receivables 22,491 14,943
Cash and cash equivalents 35,567 8,198
84,488 38,264
=========== ===========
Financial liabilities
Liabilities at amortised cost
Trade payables 36,110 117,853
Other payables and accrued expense 480,213 429,255
Amounts due to directors 602,646 649,621
Lease liabilities 45,055 14,750
1,164,024 1,211,479
=========== ===========
Prepayments are excluded from the summary above.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
25. CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
Lease liabilities
----------------------
2022 2021
GBP GBP
At 1 January 14,750 43,556
New lease 59,721 -
( 33,582
Financing cash flows ) (28,566)
Exchange adjustment 4,166 (240)
At 31 December 45,055 14,750
========== ==========
26. CAPITAL COMMITMENTS
There were no capital commitments as at the year ended 31
December 2022 (2021: Nil).
27. MAJOR NON-CASH TRANSACTIONS
During the year ended 31 December 2022, the Group had entered
the following major non-cash transactions:
(a) The issuance of 4,909,091 shares of the Company of
approximately GBP27,000 was settled against the amount due to a
director in relation to the professional service paid on behalf
(Note 17).
(b) The issuance of 115,211,604 shares of the Company of
approximately GBP242,000 was settled against the amount due to a
director (Note 17).
28. DISPOSAL OF SUBSIDIARIES
On 16 March 2022 and 16 December 2022, the Group entered into
sales and purchase agreements pursuant to which the Group agreed to
transfer its equity interests in the following subsidiaries at
aggregate consideration of HK$2 to independent third parties.
Name of subsidiaries
GZ Ruiyou Information Technologies Co., Limited
Hyrax Holdings Limited
ecWay Group Limited
ecWay (UK) Limited
ecWay (France) Limited
New Sky Global Media Limited
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
28. DISPOSAL OF SUBSIDIARIES (CONTINUED)
The following summarises the aggregate consideration and the
carrying amount of the assets and liabilities at the date of
disposal:
GBP
Net liabilities disposed of
Deposit, prepayment and other receivables 24,446
Cash and cash equivalent 1,018
Amount due to a director (13,649)
Trade and other payables (356,891)
(345,076)
Derecognition of reserves upon disposal of
subsidiaries 105,574
Derecognition of non-controlling interest
upon disposal of subsidiaries 107,806
Exchange difference (21,304)
Gain on disposal of subsidiaries 153,000
-
Net cash flow on disposal of subsidiaries
Cash consideration -
Cash and cash equivalents disposed of (1,018)
Net outflow of cash and cash equivalents (1,018)
===========
29. DEREGISTRATION OF SUBSIDIARIES
In November 2022, the Group deregistered the subsidiaries of
Tengbafong Holdings Limited, Tengbayang Holdings Limited and ePurse
(China) Limited. The principal activities of the subsidiaries are
inactive.
The following summarises the carrying amount of the assets and
liabilities at the date of deregistration:
GBP
Net liabilities of the deregistered subsidiaries
Trade and other payables (2,764)
(2,764)
Derecognition of reserves upon deregistration
of subsidiaries (1,212)
Derecognition of non-controlling interest
upon deregistration of subsidiaries 72
Gain on deregistration of subsidiaries 3,904
-
Net cash flow on deregistration of a subsidiary -
Net outflow of cash and cash equivalents -
=========
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(END) Dow Jones Newswires
June 05, 2023 10:02 ET (14:02 GMT)
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