REG - Sealand Capital - Final results for the year ended 31 December 2022
05/06/2023 15:15
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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/ (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 Chairman + 44 (0) 753 795 9788
Notes to Editors:
Further information on Sealand please visit: http://www.scg-ltd.com/
(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 £179,569 (2021: £1,033,713) 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 £226,750 (2021: £177,667) 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 £179,569 (2021:
£1,033,713) 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 £148,530 to £887. 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 £225,863 (2021: £29,137) 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 £35,567,£892,843 and
£922,437, 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 £12,012 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
INDEPENDENT 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 £179,569 during the year
ended 31 December 2022 and, as of that date, the Group was in a net liability
position of £892,843. 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 £31,200 (2021:
£52,100) based on 5% of both the loss made during the financial year and the
net liabilities at the year end. The performance materiality was £21,840
(2021: £36,470), 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 £1,560
(2021: £2,605). 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
(http://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 YEAR ENDED 31 DECEMBER 2022
2022 2021
Note £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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:
Equity holders of the Company (177,096) (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 YEAR ENDED 31 DECEMBER 2022
2022 2021
Note £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Loss for the year (179,569) (1,033,713)
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 operations (170,292) (12,187)
- Release of translation reserve upon disposal and deregistration of 104,362 -
foreign subsidiaries
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 £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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 liabilities
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
Reserves (643,122) (713,857)
Total equity attributable to equity shareholders of the Company
(571,541) (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 YEAR ENDED 31 DECEMBER 2022
Attributable to equity holders of the Company
Share-based payment reserve Non-
Share capital Share Premium Exchange Accumulated losses controlling interests Total deficit
Reserve Total
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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 31 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 YEAR ENDED 31 DECEMBER 2022
2022 2021
Note £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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)
Increase in inventories (24,265) (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 YEAR ENDED 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 ("£
(https://en.wikipedia.org/wiki/Pound_sign) ") 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 YEAR ENDED 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:
Ÿ Power over the investee (i.e., existing rights that give it the
current ability to direct the relevant activities of the investee)
Ÿ Exposure, or rights, to variable returns from its involvement with the
investee
Ÿ 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:
Ÿ The contractual arrangement(s) with the other vote holders of the
investee
Ÿ Rights arising from other contractual arrangements
Ÿ 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 YEAR ENDED 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 YEAR ENDED 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 "£ (https://en.wikipedia.org/wiki/Pound_sign) "), 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 YEAR ENDED 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 YEAR ENDED 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 YEAR ENDED 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 YEAR ENDED 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 YEAR ENDED 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 YEAR ENDED 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 £
(https://en.wikipedia.org/wiki/Pound_sign) 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 £
(https://en.wikipedia.org/wiki/Pound_sign) 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
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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 YEAR ENDED 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 YEAR ENDED 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 £Nil (2021: £91,757) 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 YEAR ENDED 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 and payment
Software development and support
e-Commerce Unallocated Total
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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 YEAR ENDED 31 DECEMBER 2022
7. SEGMENT INFORMATION (CONTINUED)
Geographical information:
2022 2021
Revenue by Geography £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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
£144,839 (approximately 82% to the Group revenue)).
8. REVENUE AND OTHER INCOME
2022 2021
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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 YEAR ENDED 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
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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 £238,278 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 YEAR ENDED 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
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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 for the year (4,955) -
- -
Potential deferred tax assets arising from operating loss carryforward
totalling approximately £ (https://en.wikipedia.org/wiki/Pound_sign) 570,000
(2021: £ (https://en.wikipedia.org/wiki/Pound_sign) 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 £ (https://en.wikipedia.org/wiki/Pound_sign) 177,096
(2021: £ (https://en.wikipedia.org/wiki/Pound_sign) 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
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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 YEAR ENDED 31 DECEMBER 2022
13. PROPERTY, PLANT AND EQUIPMENT
Office equipment Leasehold improvement Right-of-use
Assets Total
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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 31 December 2021 - 1,159 14,491 15,650
14. INVENTORIES
2022 2021
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Finished goods 106,088 81,823
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
15. TRADE RECEIVABLES, DEPOSIT, PREPAYMENT AND OTHER RECEIVABLES
(a) Trade receivables
2022 2021
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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: £66,918). 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
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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,prepayments and other receivables
2022 2021
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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 YEAR ENDED 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
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
The net finance lease liabilities are analysed as follows:
- Not later than 1 year 29,858 14,750
- Later than 1 year but not more than 5 years 15,197 -
Net finance lease liabilities 45,055 14,750
The interest on lease liabilities for the year ended 31 December 2022 was
£738 (2021: £656). 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 £Nil (2021: £6,940).
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
19. SHARE CAPITAL
2022 2021
Number of shares Number of shares
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Ordinary shares issued and fully paid
At 1 January 595,694,385 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 £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 £90,000 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
£22,500 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 £540,000.
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 YEAR ENDED 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:
£ (https://en.wikipedia.org/wiki/Pound_sign)
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
£0.0007
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 £357,417.
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
£22,500 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 £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
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
£ (https://en.wikipedia.org/wiki/Pound_sign) £
At 1 January 14,750 43,556
New lease 59,721 -
Financing cash flows (33,582) (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
£27,000 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
£242,000 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:
£ (https://en.wikipedia.org/wiki/Pound_sign)
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:
£ (https://en.wikipedia.org/wiki/Pound_sign)
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 FR FLFEVRSIEIIVRecent news on Sealand Capital Galaxy
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