TIDMSCGL
RNS Number : 7317Q
Sealand Capital Galaxy Limited
30 June 2022
For release: 30 June 2021
Sealand Capital Galaxy Limited
("Sealand", or the "Company", or "the Group")
Final results for the year ended 31 December 2021
Sealand Capital Galaxy Limited (LSE: SCGL) announces that it has
today published its Annual Report and Financial Statements for the
year ended 31 December 2021 with respect to the Company and its
subsidiaries (the "Group").
Nelson Law, Executive Chairman of the Company commented:
" The COVID-19 pandemic continues to have a serious impact on
various economies in which the Group operates. We are now
leveraging our partner relationships with Tmall to build bridges
between Chinese consumers and European merchants of high quality
brands. We believe that our ability to offer commercial and
logistical solutions to businesses in a world that is certainly
moving ever more rapidly towards online shopping and away from
physical stores will be critical for the growth of the business.
"
-Ends-
Enquiries:
Sealand Capital Galaxy Limited
Law Chung Lam Nelson, Executive + 44 (0) 753 795
Chairman 9788
Novum Securities Limited
+ 44 (0) 20 7399
David Coffman 9400
Notes to Editors:
The Company's Shares are traded on the Official List of the
London Stock Exchange's main market for listed securities under the
ticker SCGL.
Further information on Sealand is available on its website http://www.scg-ltd.com/
SEALAND CAPITAL GALAXY LIMITED
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 2021 (the
"Year").
PERFORMANCE FOR THE YEAR
The Group reported a loss of GBP1,026,639 (2020: GBP525,156)
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 decreased by 74.34% to
GBP177,667 (2020: GBP692,410) following the closure of one of our
major customers related to the Group's digital marketing
segment.
Despite this the Group was able to make certain achievements in
successfully launching certain consumer brands on a global direct
sales platform.
KEY DEVELOPMENTS FOR THE YEAR
The Company, through one of its wholly owned subsidiaries, has
successfully deepened its presence on Tmall by securing and
launching a number of consumer brands on the Tmall Global Direct
Sales Brand Stations, including Carter Beauty, Czech & Speake,
Heath London, HH Simonsen, Inari, Living Garden Honey, Missguided
Beauty, Silllk Aromas Beauty, and The Gruff Stuf. Tmall is a
leading Chinese-language website for business-to-consumer online
retail, allowing local Chinese and international businesses to sell
brand name goods to consumers in greater China. After entry on the
Tmall Global Direct Sales Brand Station, the Group believed that
our brands would have far greater exposure to online shoppers.
FUTURE PROSPECTS AND OUTLOOK
The COVID continued to have serious impact on various economies
that the Group operates. We are now leveraging our partner
relationships with Tmall to build bridges between Chinese consumers
and European merchants of high quality brands. We continue to
believe that our ability to offer commercial and logistical
solutions to businesses in a world that is certainly moving ever
more rapidly towards online shopping and away from physical stores
will be critical for the growth of the business.
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
29 June 2022
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 2021 (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 11 to
12 of the financial statements. The directors do not recommend a
payment of dividend for the Year (2020: Nil).
Business review and management report
Overview
During the Year, The Group recorded a consolidated loss of
GBP1,026,639 (2020: GBP525,156) as set out on page 11 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 GBP641,511 to GBP148,530. The
decrease is mainly due to the closure of one of the major customers
of a flagship subsidiary of the Group.
(b) Software development and support
During the Year, the Group's software development and support
segment generated no revenue (2020: GBP6,590).
(c) e-Commerce
The Group has been developing the e-Commerce business and
recorded the revenue from e-Commerce of GBP29,137 (2020: GBP44,309)
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 2021, the Group has cash and cash equivalent
balances and net liabilities and net current liabilities of
GBP8,198 and GBP1,033,767, 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.
SEALAND CAPITAL GALAXY LIMITED
DIRECTORS' REPORT (CONTINUED)
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 closely monitor the developments of the COVID-19
epidemic, assess and react actively to its impacts on the financial
position and operating results of the Group as set out in Note 31
to the financial statements.
Directors
The following directors served during the year ended 31 December
2021:
Mr Chung Lam Nelson Law (Chairman and Chief Financial Officer)
Mr Geoffrey John Griggs (Non-executive Director)
Mr Mark Barney Battles (Non-executive Director) (Resigned on 31 March 2021)
Substantial shareholding
At 31 December 2021, 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 * 247,849,753
41.61%
Tien San Chua
72,000,000 12.09%
Computershare Company Nominees Limited 78,663,679 13.21%
Mau Chung Ng
40,000,000 6.71%
Wing Chak Victor Lam 25,580,000
4.29%
(* indicates a director of the Company)
Directors' interests
The directors' interests in the share capital of the Company as
at 31 December 2021 are shown below. All interests are
beneficial.
Number of
Ordinary Shares
Mr Chung Lam Nelson Law
247,849,753
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 21 to the financial
statements. During the year, the issued share capital has been
increased by GBP8,586 by the issue of 85,864,039 ordinary shares.
On 19 October 2021, the Company granted 105,122,539 shares options
to directors and employees. Details of these share options are
detailed in Note 25 to the financial statements.
SEALAND CAPITAL GALAXY LIMITED
DIRECTORS' REPORT (CONTINUED)
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
29 June 2022
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 as adopted by the European Union ("IFRS").
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 as adopted by the European
Union 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 IFRS as
adopted by the European Union, 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
29 June 2022
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF SEALAND CAPITAL
GALAXY LIMITED
Opinion
We have audited the Group financial statements of Sealand
Capital Galaxy Limited ('the Group') for the year ended 31 December
2021 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 2021 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 (q) in the Group financial
statements, which indicates that the Group incurred a net loss of
GBP1,026,639 during the year ended 31 December 2021 and, as of that
date, the Group was in a net liability position of GBP1,018,117. As
stated in note 4, 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, 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 company's
ability to continue to adopt the going concern basis of accounting
included obtaining managements' forecasts to the period ended 30
June 2023 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 GBP52,100 (2020: GBP42,550) based on
5% of the loss made during the financial year and the net
liabilities at the year end. The performance materiality was
GBP36,470 (2020: GBP29,785), 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 GBP2,605 (2020: GBP2,128). 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 6 components,
and the remaining components were subject to analytical review only
because they were not significant to the Group.
Of the 7 reporting components of the Group, 6 are located in
Hong Kong and China 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 company 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 company 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 company with those laws and regulations. These procedures
included, but were not limited to: enquiries of management, review
of 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
customer contracts and the amortisation charged thereon. We
addressed this by challenging the assumptions and judgements made
by management when evaluating any indicators of impairment.
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
-- We engaged with our component auditors to ensure they
assessed whether there were any instances of non-compliance with
laws and regulations at a local level and ensured they reported any
such breached or concerns to us. None were noted at the component
or Group level.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the Group financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the Group financial statements, as we
will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the Group financial statements is located on the Financial
Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities . This description forms
part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance our engagement letter dated 29 April 2022. 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
29 June 2021
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEARED 31 DECEMBER 2021
2021 2020
Note GBP GBP
Revenue 8 177.667 692,410
Cost of services (161,236) (480,295)
Gross profit 16,431 212,115
Other income 8 54,246 48,366
Administrative expenses (1,009,123) (786,292)
Finance cost arising from finance
lease 20 (656 ) (1,644)
Impairment loss on trade and -
contract assets (91,757)
Share of results of an associate 14 290 2,482
Gain on bargain purchase of
a subsidiary 24 3,930 -
Loss before tax 9 (1,026,639) (524,973)
Income tax expense 11 - (183)
------------- -----------
Loss for the year (1,026,639) (525,156)
============= ===========
Attributable to:
Equity holders of the Company (940,166) (515,328)
Non-controlling interests (86,473) (9,828)
------------- -----------
(1,026,639) (525,156)
============= ===========
Loss per share attributable
to equity holders of the Company
Pence Pence
Basic and diluted 12 (0.002) (0.001)
============= ===========
The notes to the financial statements form an integral part of
these financial statements.
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2021
2021 2020
Note GBP GBP
Loss for the year (1,026,639) (525,156)
Other comprehensive income
Items not to be reclassified subsequently
to profit or loss:
* Share of other comprehensive income of an associate 14 (27) (129)
Items to be reclassified subsequently
to profit or loss:
* Exchange differences on translation of foreign
operations (13,213) 26,084
------------- -----------
Other comprehensive income for the
year, net of tax (13,240) 25,955
------------- -----------
Total comprehensive loss for the
year (1,039,879) (499,201)
============= ===========
Attributable to:
Equity holders of the Company (950,312) (490,877)
Non-controlling interests (89,567) (8,324)
(1,039,879) (499,201)
============= ===========
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 2021
2021 2020
Note GBP GBP
Non-current assets
Property, plant and equipment 13 15,650 47,250
Investment in an associate 14 - 2,357
------------- -------------
15,650 49,607
------------- -------------
Current assets
Inventories 15 81,823 -
Prepayments and other receivables 16 66,520 44,610
Trade receivables 16 15,123 77,738
Contract assets 17 - 25,099
Cash and cash equivalents 8,198 16,002
------------- -------------
171,664 163,449
------------- -------------
Current liabilit ies
Trade payables 18 81,743 75,202
Other payables and accrued expense 459,317 698,277
Amount due to a director 19 649,621 385,034
Contract liabilities 17 - 3,682
Finance lease liabilities 20 14,750 28,865
------------- -------------
1,205,431 1,191,060
------------- -------------
Net current liabilities (1,033,767) (1,027,611)
------------- -------------
Total assets less current liabilities (1,018,767) (978,004)
------------- -------------
Non-current liabilit ies
Finance lease liabilities 20 - 14,691
------------- -------------
- 14,691
------------- -------------
Net liabilities (1,018,117) (992,695)
============= =============
Capital and reserves
Share capital 21 59,569 50,983
Reserve s (692,114) (747,673)
------------- -------------
Total equity attributable to equity
shareholders of the Company (632,545) (696,690)
Non-controlling interests (385,572) (296,005)
------------- -------------
Total equity (1,018,117) (992,695)
============= =============
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 30 June 2022.
Signed on behalf of the Board of Directors
...................................................
Chung Lam Nelson Law
Chairman
30 June 2022
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2021
Attributable to equity holders of the Company
-------------------------------------------------------------------------- ---------------- ------------
Share-based Non-controlling
Share Share payment Exchange Accumulated interests Total
capital Premium Reserve Reserve losses Total equity
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
GBP GBP GBP GBP GBP GBP GBP GBP
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
At 1 January
2021 50,983 6,012,444 - 14,963 (6,775,080) (696,690) (296,005) (992,695)
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Loss for the
year - - - - (940,166) (940,166) (86,473) (1,026,639)
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Exchange
differences
arising in
translation - - - (10,146) - (10,146) (3,094) (13,240)
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Total
comprehensive
loss - - - (10,146) (940,166) (950,312) (89,567) (1,039,879)
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Issue of
ordinary shares
(Note 21) 8,586 648,454 - - - 657,040 - 657,040
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Issue of
employee stock
options (Note
25(a)) - - 357,417 - - 357,417 - 357,417
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
At 3 1 December
2021 59,569 6,660,898 357,417 4,817 (7,715,246) (632,545) (385,572) (1,018,117)
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
At 1 January
2020 50,405 5,988,022 - 3,543 (6,542,918) (500,948) (45,978) (546,926)
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Loss of the year - - - - (515,328) (515,328) (9,828) (525,156)
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Exchange
differences
arising in
translation - - - 24,451 - 24,451 1,504 25,955
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Total
comprehensive
income/(loss) - - - 24,451 (515,328) (490,877) (8,324) (499,201)
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Issue of
warrants (Note
25(c)) - - 27,746 - - 27,746 - 27,746
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Exercise of
warrants (Note
25(c)) 578 24,422 (27,746) - 27,746 25,000 - 25,000
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Issue of shares
of a subsidiary
to
non-controlling
interest - - - - - - 686 686
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
Changes in
non-controlling
interests
without change
in control
(Note 23) - - - (13,031) 255,420 242,389 (242,389) -
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
At 31 December
2020 50,983 6,012,444 - 14,963 (6,775,080) (696,690) (296,005) (992,695)
----------------- --------- ---------- ------------ ---------- ------------- ---------- ---------------- ------------
The notes to the financial statements form an integral part of
these financial statements.
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2021
2021 2020
Note GBP GBP
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax (1,026,639) (524,973)
Adjustments for:
Depreciation 13 31,340 57,435
Amortisation - 35,280
Share of profit of an associate 14 (290) (2,482)
Provision for impairment loss on 91,757 -
trade and contract assets
Share based payment expense 25 384,917 27,746
Gain on forgiveness of lease payments 20 - (2,995)
Gain on early termination of a lease 20 - (898)
Gain on bargain purchase of a subsidiary 24 (3,930) -
Interest expenses 656 1,644
Bank interest income (9) (19)
------------- -----------
Operating cash flows before movements
in working capital (522,198) (409,262)
Increase in inventories (81,823) -
(Increase)/Decrease in prepayments
and other receivables (21,868) 13,193
Increase in amounts due to a director 264,538 255,764
Decrease/(Increase) in trade receivables
and contract assets 7,981 (91,392)
Decrease in trade payables and contract
liabilities (47,574) (22,293)
Increase in other payables and accrued
expenses 301,040 276,796
------------- -----------
(99,904) 22,806
Payment of interest portion of lease
liabilities (656) (1,644)
Income tax paid - (183)
------------- -----------
Net cash (used in)/generated from
operating activities (100,560) 20,979
------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment - (4,615)
Capital invested into an associate - (4)
Net cash inflow on acquisition of
a subsidiary 24 43,685 -
Interest income received 9 19
------------- -----------
Net cash generated from/(used in)
investing activities 43,694 (4,600)
------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of shares 89,540 -
Proceeds from exercise of warrants - 25,000
Issue of shares of a subsidiary to
non-controlling interests - 686
Payment of principal portion of lease
liabilities (28,566) (61,848)
------------- -----------
Net cash generated from/(used in)
financing activities 60,974 (36,162)
------------- -----------
Net increase/(decrease) in cash
and cash equivalents 4,108 (19,783)
Foreign exchange realignment (11,912) 24,897
Cash and cash equivalents at 1 January 16,002 10,888
------------- -----------
Cash and cash equivalents at 31
December 8,198 16,002
============= ===========
The notes to the financial statements form an integral part of
these financial statements.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
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") as adopted
for use by the European Union ("EU") and IFRIC interpretations
applicable to companies reporting under IFRS.
These financial statements are presented in Great British Pounds
(" GBP ") rounded to the nearest Great British Pound, except for
otherwise indicated, and have been prepared under the historical
cost convention.
These financial statements have been prepared on a going concern
basis.
3. STANDARDS AND INTERPRETATIONS
(i) New and amended standards adopted by the Group
At the date of this report, the Group has applied the following
standards and amendments for the first time for its annual
reporting period commencing 1 January 2021:
Standard / Interpretation Title
Amendments to IFRS 4 Extension of the Temporary Exemption from
Applying IFRS 9
The application of the new amendments to IFRSs and
Interpretations in the current year had no material impact on the
Group's financial performance and positions for the current and
prior years and/or on the disclosures set out in these financial
statements.
(ii) New and amended standards and interpretations issued but
not yet effective or not yet endorsed for the financial year
beginning 1 January 2022 and not early adopted.
At the date of authorisation of these Financial Statements, the
Group has not applied the following new and revised IFRSs that have
been issued but are not yet effective and (in some cases) have not
yet been adopted by the EU. The Group intends to adopt these
standards, if applicable, when they become effective.
Standard / Interpretation Title
IFRS 17 Insurance Contracts (3)
Amendments to IFRS 3 Reference to the Conceptual Framework (2)
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture(1)
Amendments to IAS 1 Classification of Liabilities as Current or
Non-current (3)
Amendments to IAS 16 Property, Plant and Equipment - Proceeds
before Intended Use (2)
Amendments to IAS 37 Onerous Contracts - Cost of Fulfiling a
Contract (2)
Annual Improvements to IFRS Standards Amendments to IFRS 1
First-time Adoption of International
2018-2020 Cycle Financial Reporting Standards, IFRS 9 Financial
Instruments, IFRS 16 Leases, and IAS 41 Agriculture (2)
(1) Effective for annual periods beginning on or after a date to be determined
(2) Effective for annual periods beginning on or after 1 January
2022
(3) Effective for annual periods beginning on or after 1 January 2023
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
3. STANDARDS AND INTERPRETATIONS (CONTINUED)
The directors of the Company consider that the application of
the other new and amendments to IFRSs is unlikely to have a
material impact on the Group's financial position and performance
as well as disclosure.
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 2021.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only
if, the Group has:
Power over the investee (i.e., existing rights that give it the
current ability to direct the relevant activities of the
investee)
Exposure, or rights, to variable returns from its involvement
with the investee
The ability to use its power over the investee to affect its
returns
Generally, there is a presumption that a majority of voting
rights results in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
The contractual arrangement(s) with the other vote holders of
the investee
Rights arising from other contractual arrangements
The Group's voting rights and potential voting rights
(i) Business combinations
The Group accounts for business combinations using the
acquisition method when control is transferred to the Group. The
consideration transferred in the acquisition is generally measured
at fair value, as are the identifiable net assets acquired. Any
goodwill that arises is tested annually for impairment. Any gain on
a bargain purchase is recognised in profit or loss immediately.
Transaction costs are expensed as incurred, except if related to
the issue of debt or equity securities.
The consideration transferred does not include amounts related
to the settlement of pre-existing relationships. Such amounts are
generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the
date of acquisition. If an obligation to pay contingent
consideration that meets the definition of a financial instrument
is classified as equity, then it is not remeasured and settlement
is accounted for within equity. Otherwise, other contingent
consideration is remeasured at fair value at each reporting date
and subsequent changes in the fair value of the contingent
consideration are recognised in profit or loss.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the
consolidated financial statements from the date on which control
commences until the date on which control ceases.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
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) Associates
An associate is an entity over which the Group has significant
influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee, but is
not control or joint control over those policies.
The considerations made in determining significant influence or
joint control are similar to those necessary to determine control
over subsidiaries. The Group's investment in its associate is
accounted for using the equity method.
Under the equity method, the investment in an associate is
initially recognised at cost. The carrying amount of the investment
is adjusted to recognise changes in the Group's share of net assets
of the associate since the acquisition date. Goodwill relating to
the associate is included in the carrying amount of the investment
and is not tested for impairment separately.
The statement of profit or loss reflects the Group's share of
the results of operations of the associate. Any change in other
comprehensive income ("OCI") of those investees is presented as
part of the Group's OCI. In addition, when there has been a change
recognised directly in the equity of the associate, the Group
recognises its share of any changes, when applicable, in the
statement of changes in equity. Unrealised gains and losses
resulting from transactions between the Group and the associate are
eliminated to the extent of the interest in the associate.
The aggregate of the Group's share of profit or loss of an
associate is shown on the face of the statement of profit or loss
outside operating profit and represents profit or loss after tax
and non-controlling interests in the subsidiaries of the
associate.
(c) 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.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c) Revenue recognition (Continued)
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.
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 services 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.
(d) 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.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Foreign currency transactions
(i) Functional and presentational currency
Items included in the Financial Statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ("functional
currency"), being British Pound Sterling ("GBP" or " GBP "),
Chinese Yuan ("CNY") and Hong Kong Dollar ("HKD"). The Group
Financial Statements are presented in GBP.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Monetary assets and liabilities denominated in
foreign currencies are translated at the rates of exchange ruling
at the Statement of Financial Position date. Foreign exchange gains
and losses resulting from the settlement of such transactions, and
from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies, are recognised
in the Statement of Comprehensive Income.
(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).
(f) 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.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Goodwill and intangible assets (Continued)
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.
(g) 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:
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.
(h) 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 those 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.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Impairment of non-financial assets (Continued)
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.
(i) 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(j)) 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.
(j) Impairment of financial assets
The Group recognises loss allowances for expected credit loss on
the financial instruments that are not measured at fair value
through surplus or deficit. The Group considers the probability of
default upon initial recognition of financial assets and assesses
whether there has been a significant increase in credit risk on an
ongoing basis.
The Group considers the credit risk on a financial instrument is
low if the financial instrument has a low risk of default, the
debtor has a strong capacity to meet its contractual cash flow
obligations in the near term and adverse changes in economic and
business conditions in the longer term may, but will not
necessarily, reduce the ability of the debtor to fulfill its
contractual cash flow obligations.
The carrying amount of the receivables is reduced through the
use of the receivable impairment charges account. Changes in the
carrying amount of the receivable impairment charges account are
recognised in surplus or deficit. The receivable is written off
against the receivable impairment charges account when the Group
has no reasonable expectations of recovering the receivable.
If, in a subsequent period, the amount of expected credit losses
decreases, the reversal would be adjusted to the receivable
impairment charges account at the reporting date. The amount of any
reversal is recognised in surplus or deficit.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k) 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.
(l) 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.
(m) 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.
(n) Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held
at call with banks.
(o) Current and deferred income tax
Income tax comprises current and deferred tax. Current income
tax is recognised in the Income Statement, 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 and associates
operate and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) 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 either 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.
(p) Leases
Lessee
All leases with a term of more than 12 months are recognised
(i.e. 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.
(q) 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.
(r) 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.
(s) 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.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t) 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 25.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of the
number of equity instruments that will eventually vest. At each
reporting date, the Group revises its estimate of the number of
equity instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of
the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to reserves.
5. FINANCIAL RISK MANAGEMENT
The Board's overall risk management strategy seeks to assist the
Group in meeting its financial targets, while minimising potential
adverse effects on financial performance. Its functions include the
review of future cash flow requirements.
The Group's activities expose it to a variety of financial risks
as below.
(i) Interest rate risk
The Group has floating rate financial assets in the form of
deposit accounts with major banking institutions of GBP 5,497.
Apart from the abovementioned amount, no other financial instrument
is subjected to interest rate risk. If the interest rate increases
or decreases for 100 basis points, the effect in profit and loss
will increase or decrease for GBP 55.
(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 profit/(loss)
before tax (due to changes in the fair value of monetary assets and
liabilities).
Increase/(decrease)
in profit before tax
----------------------------
2021 2020
GBP GBP
CNY strength/weakened against GBP
for 1 per cent 1,067/(1,067) 305/(305)
=============== ===========
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
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
27.
Most of the Group's in banks have been deposited with reputable
and creditworthy banks in Hong Kong. Management considers there is
minimal credit risk associated with those balances.
(iv) Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting obligations associated with financial
liabilities. The responsibility for liquidity risk management rests
with the Board of Directors.
As at the reporting date, the Group was in a net current
liabilities positions. The Group is currently obtaining cash
advances from one of a director to meet its temporary operating
needs. Further, the Board of Directors is sourcing alternatives for
the Group's future capital needs include the issue of equity
instruments and external borrowing. These alternatives are
evaluated to determine the optimal mix of capital resources for our
capital needs.
(v) Market risk
Market risk is the risk that changes in market prices, such as
interest rates and foreign exchange rates, will affect the Group's
income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market
risk exposures within acceptable parameters, while optimising the
return. The Group does not hedge these risk exposures due to the
lack of any market to purchase financial instruments.
(vi) Capital risk management
The Company manages its capital to ensure that the Company will
be able to continue as a going concern while maximising the return
to shareholder through the optimisation of the debt and equity
balances.
The capital structure of the Company consists of debt, which
includes equity attributable to the owners of the Company,
comprising share capital, share premium and accumulated losses.
The directors of the Company review the capital structure
regularly. As part of this review, the directors of the Company
consider the cost of capital and the associated risks, and take
appropriate actions to adjust the Company's capital structure. The
overall strategy of the Company remained unchanged.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2020
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
Valuation of identifiable assets and liabilities acquired
through business combinations
The Group applies the acquisition method to account for business
combinations, which requires the Group to recognise assets acquired
and liabilities assumed at their fair values on the date of
acquisition. Significant judgement is used to estimate the fair
values of the assets and liabilities acquired, including estimating
future cash flows from the acquired business, determining
appropriate discount rates and other assumptions. The acquisitions
of entities are accounted for as business combination and details
of the fair value of the assets acquired and liabilities recognised
at the date of acquisitions are set out in Note 24.
Share-based payments
Estimating fair value for share-based payment transactions
requires determination of the most appropriate valuation model,
which depends on the terms and conditions of the grant. This
estimate also requires determination of the most appropriate inputs
to the valuation model including the expected life of the share
option or appreciation right, volatility and dividend yield and
making assumptions about them. The assumptions and models used for
estimating fair value for share-based payment transactions are
disclosed in Note 25.
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 2021, a provision for impairment loss on trade
receivables and contract assets of GBP91,757 (2020: Nil) 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
2021 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 2021 (2020: Nil).
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
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; and
(b) The software development and support segment includes sales
and distribution of mobile game and all other I.T. related
development and support services operated under Rightyoo.
(c) The e-commerce segment includes sales of goods through
internet and provision for consultancy services related to
e-commerce.
Digital
marketing Software
and payment development
and support e-Commerce Unallocated Total
GBP GBP GBP GBP GBP
Year ended 31 December
2021
Revenue 148,530 - 29,137 - 177,667
============== =============== ============== =============== ===============
Segment loss (162,520) (9,211) (174,093) (680,815) (1,026,639)
============== =============== ============== =============== ===============
Depreciation - - 137 31,204 31,341
============== =============== ============== =============== ===============
Amortisation - - - - -
============== =============== ============== =============== ===============
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 78,362 96,713 771,931 1,205,431
============== =============== ============== =============== ===============
Year ended 31 December
2020
Revenue 641,511 6,590 44,309 - 692,410
============== =============== ============== =============== ===============
Segment (loss)/Profit (76,777) (3,230) 8,545 (453,488) (525,156)
============== =============== ============== =============== ===============
Depreciation 1,134 - - 31,204 31,341
============== =============== ============== =============== ===============
Amortisation 35,280 - - - 35,280
============== =============== ============== =============== ===============
Assets 113,920 7,373 3,829 87,934 213,056
============== =============== ============== =============== ===============
Liabilities 234,306 75,185 7,013 889,247 1,205,751
============== =============== ============== =============== ===============
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
7. SEGMENT INFORMATION (CONTINUED)
Geographical information:
2021 2020
Revenue by Geography GBP GBP
Macau 148,192 628,681
Hong Kong 21,103 56,986
Mainland China 8,372 6,743
177,667 692 ,410
========= ==========
Information about major customers
For the year ended 31 December 2021, one external customer
contributed more than 10% to the Group revenue, amounting to GBP
144,839 (approximately 82% to the Group revenue).
For the year ended 31 December 2020, one external customer
contributed more than 10% to the Group revenue, amounting to GBP
395,404 (approximately 57% to the Group revenue).
8. REVENUE AND OTHER INCOME
2021 2020
GBP GBP
REVENUE
Advertising services 148,530 639,294
Software development and support - 6,590
Commission income 1,670 46,372
eCommerce sales 27,467 -
Others - 154
--------- ---------
177,667 692,410
========= =========
OTHER INCOME
Bank interest income 9 19
Gain on concessionary rental
(Note 20) - 2,995
Gain on early termination of
a lease (Note 20) - 898
Gain on reversal of overprovision 6,660 -
of expenses
Government subsidy 32,143 24,494
Others 15,434 19,960
54,246 48,366
========= =========
9. LOSS BEFORE TAX
2021 2020
GBP GBP
Loss before tax has been arrived at
after charging:
Depreciation - Owned assets 2,772 4,148
Depreciation - Right of use assets 28,568 53,287
Exchange (gain)/loss, net (22,907) 46,098
Amortisation of intangible assets - 35,280
Provision for impairment losses on 91,757 -
trade and contract assets
Staff cost (including Director Remuneration) 352,036 358,184
Share-based payment expense 384,917 27,746
Audit fees
* for the year 19,411 44,873
* underprovision for prior years 1,276 300
========== =========
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
10. EMPLOYEES
The average number of employees during the Year was made up as
follows:
2021 2020
Directors 3 3
====== ======
Staff 10 11
====== ======
2021 2020
GBP GBP
Staff costs, including directors'
costs comprise:
Wages, salaries and other staff costs 352,036 358,184
Share-based remuneration 357,417 -
--------- ---------
709,453 358,184
========= =========
Key Management Remuneration
The directors' emoluments in respect of qualifying services,
which all related to short-term employee benefits, were as
follows:
2021 2020
GBP GBP
Chung Lam Nelson Law
Salaries and fees - paid
in cash 180,000 180,000
Share-based payment 119,139 -
Geoffrey John Griggs
Salaries and fees - paid
in cash 18,000 18,000
Share-based payment 119,139 -
--------- ---------
436,278 198,000
========= =========
No pension contributions were made on behalf of the directors of
the Company.
Share options to the value of GBP238,278 (2020: Nil) were
granted to directors during the year.
Mr. Mark Barney Battles resigned as director of the Company on
31 March 2021.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
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 8.25%
(2020: 8.25%) of the first HK$2,000,000 and 16.5% (2020:16.5%) of
the remaining estimated assessable profits for the Year.
A reconciliation of income tax expense applicable to the loss
before taxation at the statutory tax rate of Hong Kong to the
income tax expense at the effective tax rate of the Group is as
follows:
2021 2020
GBP GBP
Loss before tax (1,026,639) (524,973)
============= ===========
Tax at the statutory tax rate of 16.5% (181,548) (86,621)
Effect of different tax rates in other
jurisdictions (2,041) (2,023)
Income not subject to tax (4,129) (409)
Expenses not deductible for tax 123,337 66,352
Tax losses not recognised for the
year 64,381 24,111
Others - (1,227)
------------- -----------
- 183
============= ===========
Potential deferred tax assets arising from operating loss
carryforward totalling approximately GBP 959,000 (2020: GBP
569,955) have not been recognised due to uncertainty as to when
taxable profits will be generated.
12. BASIC AND DILUTED LOSS PER SHARE
Basic loss per share is calculated by dividing the loss
attributable to the Company's owners of GBP 940,358 (2020:
GBP515,328) by the weighted average number of 595,695,385 ordinary
shares (2020: 509,831,346) in issue during 2021.
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.
2021 2020
GBP GBP
Effect of potential ordinary shares
Employee share options (Note 25(a)) 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 2021 and 2020.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
13. PROPERTY, PLANT AND EQUIPMENT
Office Leasehold Right of
equipment improvement use Total
Assets
GBP GBP GBP GBP
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
============ ============== ========== ==========
At 1 January 2020 3,410 - 105,200 108,610
Additions - 4,615 60,899 65,514
Depreciation for
the year (2,931) (1,217) (53,287) (57,435)
Elimination on early
termination - - (69,780) (69,780)
Exchange differences 10 63 268 341
At 3 1 December 2020 489 3,461 43,300 47,250
============ ============== ========== ==========
14. INVESTMENT IN AN ASSOCIATE
During the year, the Company had acquired an additional interest
in Hyrax Holdings Limited ("Hyrax") from 40% to 100% (Note 23).
Upon completion of the acquisition, Hyrax has ceased to be an
associate of the Group and has become a subsidiary of the
Group.
Hyrax is a private company incorporated in Hong Kong in 2020,
and mainly engaged in e-Commerce. Before Hyrax became a
wholly-owned subsidiary of the Group, the Group accounted for its
interest in Hyrax using the equity method in the financial
statements. The Group's share of Hyrax's profits and other
comprehensive loss of GBP 290 (2020: GBP 2,482) and GBP 27 (2020:
GBP 129), respectively.
The following table illustrates the summarised financial
information of the Group's investment in Hyrax.
2020
GBP
Current assets 54,696
Current liabilities (48,804)
----------
Equity 5,892
==========
Group's carrying amount of the investment
(40% thereon) 2,357
==========
15. INVENTORIES
2021 2020
GBP GBP
Finished goods 81,823 -
======== ======
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
16. TRADE RECEIVABLES, PREPAYMENT AND OTHER RECEIVABLES
(a) Trade receivables
2021 2020
GBP GBP
Trade receivables - billed 28,186 9,880
Trade receivables - unbilled 54,827 67,858
Less: Provision for impairment (67,890) -
loss
15,123 77,738
========== ========
During the year, the Group has recognised a provision for
impairment loss on trade receivables of GBP66,918 (2020: Nil). 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:
2021 2020
GBP GBP
Within 30 days 4,010 2,536
31 to 60 days 3,651 1,230
61 to 90 days 1,822 1,230
91 to 180 days 5,640 4,884
15,123 9,880
======== =======
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 2021 (2020: same) since the ageing
of all the trade receivables is within 180 days.
(b) Prepayments and other receivables
2021 2020
GBP GBP
Prepayments 51,577 28,315
Other receivables 14,943 16,295
-------- --------
66,520 44,610
======== ========
17. CONTRACT ASSETS/LIABILITIES
2021 2020
GBP GBP
Contracts in progress
Opening balance 21,417 3,982
Contract costs incurred plus
recognised profit less recognised
losses to date 157,660 290,712
Progress billings received and
receivables (157,660) (267,802)
Impairment loss (24,839) -
Exchange realignment 3,422 (5,475)
----------- -----------
- 21,417
=========== ===========
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
17. CONTRACT ASSETS/LIABILITIES (CONTINUED)
2021 2020
GBP GBP
Analysed for the reporting purpose
Contract assets - 25,099
Contract liabilities - (3,682)
- 21,417
====== =========
There was no retention held by customers on service contracts at
31 December 2021 and 2020.
All the contract assets and liabilities are expected to be
received or settled within 12 months.
The movement of contract assets and contract liabilities with
customers are as follows:
(a) Contract assets
2021 2020
GBP GBP
At 1 January 25,099 5,891
Receipt in advance - 261,565
Recognition of revenue - (236,727)
Impairment loss (24,839) -
Exchange realignment (260) (5,630)
---------- -----------
At 31 December - 25,099
========== ===========
(b) Contract Liabilities
2021 2020
GBP GBP
At 1 January 3,682 1,909
Receipt in advance 157,660 31,075
Recognition of revenue (157,660) (29,147)
Exchange realignment 3,682 (155)
----------- ----------
At 31 December - 3,682
=========== ============
The Group expects the transaction price allocated to the
unsatisfied performance obligations will be recognised as revenue
within one year.
18. TRADE PAYABLES
The following is an ageing analysis of trade payables presented
based on the invoice date at the end of each reporting period:
2021 2020
GBP GBP
Within 30 days - 73,726
31 to 60 days - -
61 to 90 days - -
91 to 180 days - -
181 to 365 days 2,213 -
More than 365 days 79,530 1,476
-------- --------
81,743 75,202
======== ========
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
19. AMOUNTS DUE TO A DIRECTOR
The amounts were unsecured, interest-free and had no fixed terms
of repayment.
20. LEASE LIABILITIES
The total minimum lease liabilities under finance leases and
their present values at the reporting date are as follows:
2021 2020
GBP GBP
Current portion:
Gross finance lease liabilities 14,823 29,528
Finance expense not recognised (73) (663)
-------- --------
14,750 28,865
======== ========
Non-current portion:
Gross finance lease liabilities - 14,764
Finance expense not recognised - (73)
-------- --------
- 14,691
======== ========
14,750 43,556
======== ========
2021 2020
GBP GBP
The net finance lease liabilities are
analysed as follows:
* Not later than 1 year 14,750 28,865
* Later than 1 year but not more than 5 years - 14,691
-------- --------
Net finance lease liabilities 14,750 43,556
======== ========
The interest on lease liabilities for the year ended 31 December
2021 was GBP656 (2020: GBP1,644). 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 2021 were GBP6,940
(2020: GBP3,715).
During 2020, the Group had non-cash additions to right-of-assets
(see Note 13) and lease liabilities of LIR60,899 and early
terminated a lease of an office used by a subsidiary. As a result,
the related right-of-use asset of LIR69,780 (see Note 13) and a
lease liability of LIR70,678 was eliminated, and a gain on early
termination of LIR898 has been charged to profit or loss.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
21. SHARE CAPITAL
2021 2020
----------------------- -----------------------
Number Number
of shares of shares
GBP GBP GBP GBP
Ordinary shares
issued and fully
paid
At 1 January 509,830,346 50,983 504,050,000 50,405
Issue of shares 85,864,039 8,586 5,780,346 578
At 31 December 595,694,385 59,569 509,830,346 50,983
============= ======== ============= ========
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 LIR90,000 in aggregate.
On 26 July 2021, the Company entered into an advisory and
consultancy agreement with an independent third party and settled
the service fee of GBP22,500 by issuing 1,800,000 ordinary of 1.25
pence each.
On 19 October 2021, the Company issued 77,142,857 new ordinary
shares of 0.7 pence each to Mr. Nelson Law, the Company's Chairman
and Chief Financial Officer, for the conversion of the loan owned
to him of LIR540,000.
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.
In 2020, the issued share capital was increased by LIR578 by the
issue of 5,780,346 Ordinary Shares on exercise of warrants.
22. 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.
23. CHANGE IN OWNERSHIP INTERESTS OF A SUBSIDIARY IN 2020
In 2020, the Group transferred the entire interest in ePurse
(HK) Limited ("ePurse"), a subsidiary of the Company, from a
wholly-owned subsidiary to a 75%-owned subsidiary, namely
Tengwuyang Holdings Ltd ("TWY"). Subsequent to the transfer, ePurse
entered into a capital contribution agreement with a third party
investor to issue 7,250 ordinary shares to the investor for cash.
Upon the completion of the transfer and the share issue, the
Group's equity interest (through TWY) in ePurse had been diluted
from 100% to 58%, while the Group's effective ownership interest in
ePurse was diluted from 75% to 43.5%. ePurse remained as an
indirect subsidiary of the Company as the majority of voting rights
in ePurse was held by the Company's subsidiary, TWY.
As such, the Group accounted for the above deemed disposal of
partial interest in a subsidiary as equity transactions with
non-controlling interests. The difference between the consideration
and the related share of the carrying amount of the net assets of
ePurse, being LIR242,388, was charged to equity directly.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
24. BUSINESS COMBINATION
During the year, the Company have acquired additional interest
in Hyrax from 40% to 100%. Hyrax had no material impact on the
Group's consolidated financial statements of comprehensive income,
both from the date of the acquisition as well as assuming its
acquisition had been effected as at 1 January 2021.
The fair value of the identifiable assets acquired and
liabilities recognised at the date of acquisition as follows:
GBP
Trade and other receivables 13,298
Due from immediate holding company 257
Cash and bank balance 43,428
Trade and other payables (50,433)
Total identifiable net assets at fair value 6,550
Amount previously accounted for as an associate (2,620)
Gain on bargain purchase (3,930)
Net assets acquired -
Payment of nominal cash consideration -
Total purchase consideration -
Assumption of receivable from immediate holding
company 257
Cash and bank balance acquired 43,428
Net cash flow on acquisition of a subsidiary 43,685
==========
The fair value of the identifiable assets acquired and
liabilities recognised at the date of acquisition in this annual
report was assessed by the management with their reasonable
estimation. The Group did not engage any professional party to
perform a detailed purchase price allocation exercise due to the
size of the acquisition and the consideration of cost-saving.
25. SHARE-BASED PAYMENTS
(a) Share Options
During the year, 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
LIR0.0007
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 LIR357,417.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
25. SHARE-BASED PAYMENTS (CONTINUED)
(a) Share Options (Continued)
For the year ended 31 December 2021, the Company recorded
share-based compensation expenses in the amount of LIR357,417.
At 31 December 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 26 July 2021, the Company entered into an advisory and
consultancy agreement with an independent third party and settled
the service fee of GBP22,500 by issuing 1,800,000 ordinary of 1.25
pence each.
On 19 October 2021, the Company entered into a service agreement
with an entity related to Mr. Geoffrey John Griggs, a director of
the Company, and and settled the service fee by issuing 714,286
ordinary of 0.7 pence each.
(c) Brokers' warrants
The Company issued 5,780,346 warrants to the Brokers ("Brokers'
Warrants") with an exercise price of GBP0.004325 per warrant in
connection with the broker services agreement entered into by the
Company during 2019. These warrants would expire 36 months from the
date of issue. Upon exercise of the Brokers' Warrants, the Company
would issue one ordinary share.
The Company valued the warrants using the Black-Scholes option
pricing model to establish the fair value of the Brokers' Warrants
granted by applying the following assumptions:
Share price
LIR0.0045
Risk-free interest rate
1.6611%
Expected life of warrant (years)
3
Expected annualised volatility
1.60
Expected dividend yield
Nil
Volatility was estimated with reference to the historical
volatility of the Company. The expected life in years represents
the period of time that options granted are expected to be
outstanding. The risk-free rate was based on the zero-coupon UK
treasury bonds with a remaining term equal to the expected life of
the warrants.
During 2020, all Brokers' Warrants were exercised for proceeds
of LIR25,000 and exchanged for 5,780,346 Ordinary Shares of the
Company. There were no Brokers' Warrants outstanding at 31 December
2020.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
26. 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.
27. FINANCIAL INSTRUMENTS BY CATEGORY
The totals for each category of financial instruments is as
follows:
2021 2020
Financial assets GBP GBP
Financial assets at amortised
cost
Contract assets - 25,099
Trade receivables 15,123 77,738
Other receivables 14,943 16,295
Cash and cash equivalents 8,198 16,002
38,264 135,134
=========== ===========
Financial liabilities
Liabilities at amortised cost
Trade Payables 81,743 75,202
Other payables and accrued expense 460,217 698,277
Amounts due to directors 649,621 385,034
Lease liabilities 14,750 43,556
1,260,331 1,202,069
=========== ===========
Prepayments are excluded from the summary above.
28. CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
Lease liabilities
----------------------
2021 2020
GBP GBP
At 1 January 43,556 117,612
Forgiveness of lease payments - (2,995)
Early termination of a lease - (70,678)
New lease - 60,899
Financing cash flows (28,566) (61,848)
Exchange adjustment (240) 566
At 31 December 14,750 43,556
========== ==========
29. CAPITAL COMMITMENTS
There were no capital commitments as at the year ended 31
December 2021 (2020: Nil).
30. EVENTS AFTER THE REPORTING PERIOD
On 16 March 2022, the Company entered into a sale and purchase
agreement with an independent third party for the disposal of our
entire 55% stake in Rightyoo for nil consideration. Rightyoo
recorded net liabilities of GBP9,000 at 31 December 2021.
On 30 March 2022, the Company has issued 4,909,091 new ordinary
shares of the Company in lieu of professional service provided.
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END
FR PPUMCQUPPPPB
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June 30, 2022 02:00 ET (06:00 GMT)
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