REG - Sealand Capital - Final Results
30/04/2024 12:45
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RNS Number : 6377M Sealand Capital Galaxy Limited 30 April 2024
Sealand Capital Galaxy Limited
("Sealand", or the "Company", or "the Group")
Final Results for the year ended 31 December 2023
Sealand Capital Galaxy Limited (LSE: SCGL) announces that it has published its
Annual Report and Financial Statements for the year ended 31 December 2023
with respect to the Company and its subsidiaries (the "Group").
The Annual Report and Financial Statements are available to view on the
Company's website at: http://scg-ltd.com/ (http://scg-ltd.com/)
A copy of the Annual Report and Financial Statements has also been submitted
to the National Storage Mechanism and is available for inspection.
Nelson Law, Executive Chairman of the Company, commented:
"The Group encountered an economic downturn marked by rising interest rates,
resulting in escalated operational expenses for our regular customers and
becoming more conservative in placing orders. Moreover, the devaluation of the
RMB by 10% had a profound impact on Chinese travelers, leading to reduced
purchasing power. The Group's revenue for the Year decreased by 44.52% to
£125,793 (2022: £226,750). These circumstances posed significant challenges
for the Group, requiring us to reevaluate and adapt to the changing economic
landscape. Despite these obstacles, the Group remains steadfast in overcoming
these hurdles and seizing potential avenues for sustainable growth.
"We will enhance sales by implementing strategic product combinations that
effectively reduce the retail price, thereby enticing customers to make
additional purchases. Emphasizing larger quantities sold at a lower gross
profit margin, our primary objective is to maximize revenue generation.
"The Company, through one of its wholly owned subsidiaries, has achieved a
significant milestone by successfully extending the sole distributorship for
the brand HH Simonsen in the Hong Kong area for an additional three years.
This contract renewal underscores the strong partnership and commitment to
representing the brand in this thriving market. The extension of this
distributorship contract comes with a projected moderate growth of 5% in sales
each year. This consistent growth trajectory reflects the Group's dedication
to maximizing sales potential and capturing market demand."
Commenting on Future Prospects and Outlook, he added:
"Despite the global economy experiencing sluggish growth in the aftermath of
the pandemic, the Group remains dedicated to enhancing its performance.
However, the Group acknowledges the challenges posed by ongoing political
conflicts between nations. Nevertheless, the Group is steadfast in the belief
that the Group can expand our sales within our region, employing a strategic
approach that emphasizes the expansion of direct sales through online shopping
platforms.
In response to the evolving business landscape, the Group is committed to
leveraging the power of e-commerce to reach a wider customer base. By
capitalizing on the convenience and accessibility of online shopping, the
Group aims to tap into new markets and optimize our sales potential. The Group
focus on expanding direct sales channels aligns with the goal of fostering
meaningful customer relationships and delivering unparalleled value."
Enquiries:
Sealand Capital Galaxy Limited + 44 (0) 753 795 9788
Law Chung Lam Nelson, Executive Chairman
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 please visit: http://www.scg-ltd.com/
(http://www.scg-ltd.com/)
CHAIRMAN'S STATEMENT
Dear Shareholders
I hereby present the annual report of Sealand Capital Galaxy Limited (the
"Company" or "Sealand", together with its subsidiaries, the "Group") for the
year ended 31 December 2023 (the "Year").
PERFORMANCE FOR THE YEAR
The Group reported a loss of £427,046 (2022: £179,569) during the Year. The
Group encountered an economic downturn marked by rising interest rates,
resulting in escalated operational expenses for our regular customers and
becoming more conservative in placing orders. Moreover, the devaluation of the
RMB by 10% had a profound impact on Chinese travelers, leading to reduced
purchasing power. The Group's revenue for the Year decreased by 44.52% to
£125,793 (2022: £226,750). These circumstances posed significant challenges
for the Group, requiring us to reevaluate and adapt to the changing economic
landscape. Despite these obstacles, the Group remain steadfast in overcoming
these hurdles and seizing potential avenues for sustainable growth.
The Group will enhance sales by implementing strategic product combinations
that effectively reduce the retail price, thereby enticing customers to make
additional purchases. Emphasizing larger quantities sold at a lower gross
profit margin, our primary objective is to maximize revenue generation.
KEY DEVELOPMENTS FOR THE YEAR
The Company, through one of its wholly owned subsidiaries, has achieved a
significant milestone by successfully extending the sole distributorship for
the brand HH Simonsen in the Hong Kong area for an additional three years.
This contract renewal underscores the strong partnership and commitment to
representing the brand in this thriving market.
The extension of this distributorship contract comes with a projected moderate
growth of 5% in sales each year. This consistent growth trajectory reflects
the Group's dedication to maximizing sales potential and capturing market
demand. With the Group's deep understanding of the product's unique features
and our proven sales expertise, the Group is confident of achieving the
ambitious sales targets in the upcoming years.
This achievement not only solidifies our position as the exclusive distributor
but also highlights our unwavering commitment to delivering exceptional
products to our valued customers. The Group remains focused on enhancing
customer satisfaction and fostering long-term relationships with the
clientele.
FUTURE PROSPECTS AND OUTLOOK
Despite the global economy experiencing sluggish growth in the aftermath of
the pandemic, the Group remains dedicated to enhancing its performance.
However, the Group acknowledges the challenges posed by ongoing political
conflicts between nations. Nevertheless, the Group is steadfast in the belief
that the Group can expand our sales within our region, employing a strategic
approach that emphasizes the expansion of direct sales through online shopping
platforms.
In response to the evolving business landscape, the Group is committed to
leveraging the power of e-commerce to reach a wider customer base. By
capitalizing on the convenience and accessibility of online shopping, the
Group aim to tap into new markets and optimize our sales potential. The Group
focus on expanding direct sales channels aligns with the goal of fostering
meaningful customer relationships and delivering unparalleled value.
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
30 April 2024
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 2023 (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 13 to 14 of the
financial statements. The directors do not recommend a payment of dividend for
the Year (2022: Nil).
Business review and management report
Overview
During the Year, The Group recorded a consolidated loss of £427,046 (2022:
£179,569) as set out on page 13 of these financial statements.
Operations
The revenue from the e-Commerce business for the Year decreased from £224,562
to £124,492. The decrease is mainly due to the rising interest rates and
devaluation of RMB, resulting in conservative approach in placing orders by
customers and decrease in purchasing power of the end-consumers.
Going concern
As at 31 December 2023, the Group has cash and cash equivalent balances and
net liabilities and net current liabilities of £9,111, £1,268,073 and
£1,282,251, 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. A director has confirmed to provide financial support to the
Group and granted loan of approximately £80,000 to the Group subsequent to
the reporting period for supporting the Group's operation for the forthcoming
12 months. In addition, the directors are in non-binding discussions with
individuals and institutions that may lead to further equity and/or loans
being raised. There may be uncertainty that any such funds will be forthcoming
or the price and other terms being acceptable and as such there is a material
uncertainty over going concern.
Our strategy
As the Company strives for long-term growth, we remain committed to pursuing a
strategic approach that encompasses various facets of our business. In line
with this vision, the Group actively seeks out selective and attractive
investment opportunities that align with our goals and values.
Notably, the Group have observed significant progress in certain business
categories within the China region. This development serves as a promising
signal, prompting us to explore potential cooperative opportunities through
partnerships and collaborations. By leveraging the strengths and expertise of
like-minded entities, the Group aims to drive mutual growth and unlock new
avenues of success.
Our approach to identifying and pursuing these opportunities is rooted in
thorough analysis, meticulous evaluation, and prudent decision-making. The
Group prioritizes partnerships that complement the existing capabilities and
align with our strategic objectives. Through these collaborative ventures, we
seek to enhance our market position, expand our customer base, and diversify
our offerings.
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
Subsequent to the reporting period, the Company remains actively engaged in
pursuing potential capital injections through various avenues within the
capital market. We recognize the importance of securing additional financial
resources to support our growth strategies and enhance our operational
capabilities.
The Group is currently in non-binding negotiations with individuals and
institutions regarding potential loan grants. These discussions reflect our
commitment to exploring viable funding options that align with our long-term
objectives. By leveraging external financial support, the Group aims to
strengthen our financial position and maximize our potential for sustainable
growth.
Directors
The following directors served during the year ended 31 December 2023:
Mr Chung Lam Nelson Law (Chairman and Chief Financial
Officer)
Mr Geoffrey John Griggs (Non-executive
Director)
Substantial shareholding
At 31 December 2023, 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
*
349,854,461
48.87%
Computershare Company Nominees Limited
117,525,104
16.42%
Premium Full Limited
93,786,896
13.10%
Tien San Chua
72,000,000
10.06%
Ahead Eternity Limited
55,000,000
7,68%
(* indicates a director of the Company)
Directors' interests
The directors' interests in the share capital of the Company as at 31 December
2023 are shown below. All interests are beneficial.
Number of Ordinary Shares: 349,854,461
Mr Chung Lam Nelson Law
Directors' emoluments are detailed in Note 10 to the financial statements.
Share capital and voting rights
Details of the share capital and movements in share capital during the year
are disclosed in Note 19 to the financial statements.
Ratio of men to women
At 31 December 2023, there was one women (2022: 1) employed across the Group
making 33% (2022: 14%) of our Group-wide employee base.
The Directors are satisfied that it has the appropriate balance of skills,
experience and expertise necessary, and will give due regard to diversity in
the event of further changes to both its own membership and/or the membership
of the senior management team.
Climate - Related Financial Disclosure
The Company's objective is to enhance the Company's strategies, structures,
resources, and tools in order to adeptly address and leverage climate-related
risks and opportunities.
The Company ensures that its financial disclosures related to climate issues
adhere to internationally recognized standards, with particular emphasis on
the four fundamental components established by the Task Force on
Climate-related Financial Disclosures (TCFD).
Core Elements Description
Governance Structures and processes in place to oversee climate-related issues, including
the role of the board, management, and relevant committees.
Strategy Insights into the company's actual and potential impacts of climate-related
risks and opportunities on its business, strategy, and financial planning
Risk Management Processes used to identify, assess, and manage climate-related risks
integrated into overall risk management. Adaptations to strategies in response
to climate considerations.
Metrics and targets Disclosure of metrics and targets used to assess and manage relevant
climate-related risks and opportunities, providing quantitative information on
performance and progress.
The table below shows our current progress against TCFD Recommendations
TCFD pillar Recommended Disclosure Cellular Goods Summary
Governance The Board's supervision of risks and opportunities associated with The Board of Directors exercises oversight over climate-related issues,
climate-related factors. integrating them within the broader framework of governance.
Strategy The influence of climate-related risks and opportunities on the business, The Board are aware that air transportation has higher carbon emissions
strategic decisions, and financial planning. compared to sea transportation. Therefore, starting from 2023, the company is
gradually transitioning our transportation method from air to sea freight.
Risk Management The company's protocols for effectively managing climate-related risks. The process of identifying climate-related risks is seamlessly integrated into
our regular operations. Although we may not have a dedicated task force, every
team member is accountable for considering climate-related risks within their
specific areas of responsibility.
This decentralized approach guarantees that climate considerations are
incorporated into our day-to-day decision-making processes. Given our small
team size, collaboration plays a vital role. We regularly facilitate
cross-functional discussions to collectively evaluate climate-related risks.
By leveraging the expertise of each team member, we ensure a comprehensive
understanding of potential impacts on our supply chain, production, and market
dynamics. This collaborative effort cultivates a shared awareness of the
challenges posed by climate-related factors.
Metrics and targets Metrics used by the organization to assess climate related risks and The carbon capture initiative entails goals for mitigating emissions and
opportunities in line with its strategy and risk management process. actively contributing to wider climate initiatives. These metrics underscore
the Company's steadfast dedication to comprehensive sustainability practices
throughout its diverse business portfolio.
Greenhouse gas emissions
The Group recognizes the importance of assessing its operational carbon
footprint to effectively manage and reduce its environmental impact. However,
due to the limited scale and nature of its activities during the reviewed
period, the Company's operations involve only a small number of employees and
directors, and it operates from rented offices. Consequently, the Company's
carbon emissions are minimal, and it is currently impractical to gather
emissions data at this stage. In Hong Kong, the Company's energy consumption
was below 14,000 KWh in 2023, and it is currently exempt from the obligation
to disclose its sources of greenhouse gas and other emissions as stipulated by
the Companies Act 2006 (Strategic Report and Directors Report) Regulations
2014.
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
30 April 2024
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the annual report and the
financial statements in accordance with applicable laws and regulations. The
directors are required to prepare financial statements for the Group in
accordance with International Financial Reporting Standards ("IFRSs").
The directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of affairs of the Group and of
the profit or loss of the Group for that period. In preparing the financial
statements, the directors are required to:
- Select suitable accounting policies and then apply them
consistently;
- Make judgments and accounting estimates that are reasonable
and prudent;
- State whether applicable IFRSs have been followed, subject to any
material departures disclosed and explained in the financial statements; and
- Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and enable
them to ensure that the financial statements comply with applicable law. They
are also responsible for safeguarding the assets of the Group and hence for
taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the Cayman Islands governing the preparation and dissemination
of the accounts and the other information included in annual reports may
differ from legislation in other jurisdictions.
Directors' Responsibility Statement Pursuant to Disclosure and Transparency
Rules
Each of the directors, whose names and functions are listed on page 1,
confirms that, to the best of their knowledge and belief:
- the financial statements prepared in accordance with IFRSs, give a
true and fair view of the assets, liabilities, financial position and loss of
the Group and parent company; and
- the Annual Report and financial statements, including the Business
review, includes a fair review of the development and performance of the
business and the position of the Group, together with a description of the
principal risks and uncertainties that they face.
By order of the board
Chung Lam Nelson Law
Chairman
30 April 2024
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEALAND CAPITAL GALAXY LIMITED
Opinion
We have audited the Group financial statements of Sealand Capital Galaxy
Limited ('the Group') for the year ended 31 December 2023 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 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 2023 and of its loss for the year then ended; and
· have been properly prepared in accordance with International
Financial Reporting Standards (IFRSs).
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 Group in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 4(p) in the Group financial statements, which
indicates that the Group incurred a net loss of £427,046 during the year
ended 31 December 2023 and, as of that date, the Group was in a net liability
position of £1,268,073. As stated in note 4(p), the directors' cash flow
projections for the following 12 months conclude that there will be the need
for additional cash resources to fully implement the business plans. A
director has confirmed to provide financial support to the Group and granted
loan of approximately £80,000 to the Group subsequent to the reporting period
for supporting the Group's operation for the forthcoming 12 months. In
addition, the directors are in non-binding discussions with individuals and
institutions that may lead to further equity and/or loans being raised. There
may be uncertainty that any such funds will be forthcoming. These events or
conditions, along with the other matters as set forth in note 4(p), indicate
that a material uncertainty exists that may cast significant doubt on the
Group's ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
In auditing the Group financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the preparation of
the Group financial statements is appropriate. Our evaluation of the
directors' assessment of the Group's ability to continue to adopt the going
concern basis of accounting included obtaining managements' forecasts to the
period ended 30 April 2025 and challenging the key assumptions and inputs
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.
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 £61,000 (2022:
£31,200) based on 5% (2022: 5%) of the net liabilities at the year end. The
performance materiality was £42,700 (2022: £21,840), being 70% (2022: 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 to maintain its operation as a going concern, 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 £3,050
(2022: £1,560) as well as those that we believe warranted reporting on
qualitative grounds.
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 10 components of the Group, a full scope audit was performed on the
complete financial information of 5 components, and the remaining components
were subject to analytical review only because they were not significant to
the Group.
Of the above 5 components of the Group, 4 are located in Hong Kong and audited
by a component audit team operating under our instruction, and the audit of
the remaining component were performed by us using a team with specific
experience in auditing groups and publicly listed entities. The engagement
partner interacted regularly with the component audit team during all stages
of the audit and was responsible for the scope and direction of the audit
process. This, in conjunction with additional procedures performed, gave us
appropriate evidence for our opinion on the Group financial statements.
Key audit matters
Except for the matter described in the Material uncertainty related to going
concern section, we have determined that there are no other key audit matters
to communicate in our report.
Other information
The other information comprises the information included in the annual report,
other than the Group financial statements and our auditor's report thereon.
The directors are responsible for the other information contained within the
annual report. Our opinion on the Group financial statements does not cover
the other information and, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the
Group financial statements or our knowledge obtained in the course of the
audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the Group
financial statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the Group financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of Group financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the Group financial statements, the directors are responsible for
assessing the Group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the Group
financial statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the Group and the sector in which
they operate to identify laws and regulations that could reasonably be
expected to have a direct effect on the Group financial statements. We
obtained our understanding in this regard through discussions with management,
and application of our cumulative audit knowledge and experience of the
sector.
· We determined the principal laws and regulations relevant to the
Group in this regard to be those arising from LSE Listing Rules, Disclosure
Guidance and Transparency Rules, Cayman Islands laws and local regulations,
like local Companies Ordinances, local tax laws and local employment laws
applicable to the subsidiaries.
· We designed our audit procedures to ensure the audit team considered
whether there were any indications of non-compliance by the Group with those
laws and regulations. These procedures included, but were not limited to:
enquiries of management, review of board minutes and Regulatory News Service
(RNS) announcements and review of legal and regulatory correspondence.
· We also identified the risks of material misstatement of the Group
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that the potential for management bias was identified in relation
to the impairment assessment of trade and other receivables. We addressed this
by challenging the assumptions and judgements made by management when
evaluating any indicators of impairment.
· As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
· We engaged with our component auditors to ensure they assessed
whether there were any instances of non-compliance with laws and regulations
at a local level and ensured they reported any such breaches 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 financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
our engagement letter dated 6 February 2024. 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
Registered Auditor
London E14
4HD
30 April 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
Note £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Revenue 8 125,793 226,750
Cost of services (71,893) (133,962)
Gross profit 53,900 92,788
Other income 8 16,067 20,484
Administrative expenses (537,554) (449,007)
Finance cost arising from finance lease 18 (666) (738)
Gain on disposal of subsidiaries - 153,000
Gain on deregistration of subsidiaries 41,207 3,904
Loss before tax 9 (427,046) (179,569)
Income tax expense 11 - -
Loss for the year (427,046) (179,569)
Attributable to:
Equity holders of the Company (414,232) (177,096)
Non-controlling interests (12,814) (2,473)
(427,046) (179,569)
Loss per share attributable to equity holders of the Company
Pence Pence
Basic and diluted 12 (0.06) (0.03)
The notes to the financial statements on pages 18-40 form an integral part of
these financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
Note £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Loss for the year (427,046) (179,569)
Other comprehensive income/(loss)
Items to be reclassified subsequently to profit or loss:
- Exchange differences on translation of foreign operations 51,816 (170,292)
- Release of translation reserve upon disposal and deregistration of - 104,362
foreign subsidiaries
Other comprehensive income for the year, net of tax 51,816 (65,930)
Total comprehensive loss for the year (375,230) (245,499)
Attributable to:
Equity holders of the Company (375,246) (186,197)
Non-controlling interests 16 (59,302)
(375,230) (245,499)
The notes to the financial statements on pages 18-40 form an integral part of
these financial statement
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2023
2023 2022
Note £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Non-current assets
Property, plant and equipment 13 14,178 44,791
Current assets
Inventories 14 49,224 106,088
Deposit, prepayments and other receivables 15 45,531 58,305
Trade receivables 15 35,435 26,430
Cash and cash equivalents 9,111 35,567
139,301 226,390
Current liabilities
Trade payables 16 36,110 36,110
Other payables and accrued expense 630,524 480,213
Amount due to a director 17 740,486 602,646
Finance lease liabilities 18 14,432 29,858
1,421,552 1,148,827
Net current liabilities (1,282,251) (922,437)
Total assets less current liabilities (1,268,073) (877,646)
Non-current liabilities
Finance lease liabilities 18 - 15,197
Net liabilities (1,268,073) (892,843)
Capital and reserves
Share capital 19 71,581 71,581
Reserves (1,018,368) (643,122)
Total equity attributable to equity shareholders of the Company
(946,787) (571,541)
Non-controlling interests (321,286) (321,302)
Total deficit (1,268,073) (892,843)
The notes to the Financial Statements on pages 18-40 form an integral part of
these financial statements.
These Financial Statements were approved by the Board of Directors and
authorized for issue on 30 April 2024.
Signed on behalf of the Board of Directors
……………………………………………
Chung Lam Nelson Law
Chairman
30 April 2024
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Attributable to equity holders of the Company
Share-based payment reserve Non-
Share capital Share Premium Exchange Accumulated losses controlling interests Total deficit
Reserve Total
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
At 1 January 2023 71,581 6,917,830 357,417 (3,720) (7,914,649) (571,541) (321,302) (892,843)
Loss for the year - - - - (414,232) (414,232) (12,814) (427,046)
Exchange differences arising in translation - - - 38,986 - 38,986 12,830 51,816
Total comprehensive (loss)/income - - - 38,986 (414,232) (375,246) 16 (375,230)
( ) ( )
At 31 December 2023 ( ) 71,581 6,917,830 357,417 35,266 (8,328,881) (946,787) (321,286) (1,268,073)
( ) ( )
At 1 January 2022 ( ) 59,569 6,660,898 357,417 5,381 (7,737,553) (654,288) (369,877) (1,024,165)
( ) ( )
Loss of the year ( ) - - - - (177,096) (177,096) (2,473) (179,569)
Exchange differences arising in translation ( ) - - - (113,463) - (113,463) (56,829) (170,292)
( ) ( )
Total comprehensive loss ( ) - - - (113,463) (177,096) (290,559) (59,302) (349,861)
( ) ( )
Issue of ordinary shares (Note 19) ( ) 12,012 256,932 - - - 268,944 - 268,944
Disposal and deregistration of subsidiaries ( ) - - - 104,362 - 104,362 107,877 212,239
( ) ( )
At 31 December 2022 ( ) 71,581 6,917,830 357,417 (3,720) (7,914,649) (571,541) (321,302) (892,843)
The notes to the financial statements on pages 18-40 form an integral part of
these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax (427,046) (179,569)
Adjustments for:
Depreciation 29,010 34,746
Exchange difference 50,955 -
Gain on disposal of subsidiaries - (153,000)
Gain on deregistration of subsidiaries (41,207) (3,904)
Share of profit of an associate - -
Provision for impairment loss on trade and other receivables 17,811 -
Provision for impairment loss on inventories 42,413 -
Interest expenses 666 738
Bank interest income (11) (10)
Operating cash flows before movements in working capital (327,409) (300,999)
Decrease/(increase) in inventories 14,451 (24,265)
Decrease/(increase) in deposit, prepayments and other receivable 12,393 (14,525)
Increase in amounts due to a director 137,840 235,618
Increase in trade receivables (26,816) (11,307)
Increase in trade payables - 16,005
Increase in other payables and accrued expenses 192,912 311,158
Net cash generated from operations 3,371 211,685
Payment of interest portion of lease liabilities (666) (738)
Net cash generated from operating activities 2,705 210,947
CASH FLOWS FROM INVESTING ACTIVITIES
Disposal of subsidiaries (1,013) (1,018)
Interest income received 11 10
Net cash used in investing activities (1,002) (1,008)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of principal portion of lease liabilities (30,623) (33,582)
Net cash used in financing activities (30,623) (33,582)
Net (decrease)/increase in cash and cash equivalents (28,920) 176,357
Foreign exchange realignment 2,464 (148,988)
Cash and cash equivalents at 1 January 35,567 8,198
Cash and cash equivalents at 31 December 9,111 35,567
The notes to the financial statements on pages 18-40 form an integral part of
these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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
The financial statements have been prepared in accordance with the
International Financial Reporting Standard ("IFRSs") and IFRIC interpretations
applicable to companies reporting under IFRSs.
These financial statements are presented in Great British Pounds ("£")
rounded to the nearest Great British Pound, except for otherwise indicated,
and have been prepared under the historical cost convention.
Details of going concern are included in note 4(p).
3. STANDARDS AND INTERPRETATIONS
(i) New standards, amendments and interpretations adopted by
the Group and Company
The following IFRS or IFRIC interpretations were effective for the first time
for the financial year beginning 1 January 2023. Their adoption has not had
any material impact on the disclosures or on the amounts reported in these
financial statements:
Standard / Interpretation
Application
Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of
Accounting Policies
Amendments to IAS
8
Definition of Accounting Estimates
Amendments to IAS
12
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
(ii) New standards, amendments and interpretations not yet
adopted
Standard / Interpretation
Application
IAS 1 amendments
Classification of Liabilities as Current or Non-current
Effective: Annual periods beginning on or after 1 January 2024
IAS 1 amendments
Non-current Liabilities with Covenants
Effective: Annual periods beginning on or after 1 January 2024
IFRS 16 amendments Lease
liability in a Sale and Leaseback
Effective: Annual periods beginning on or after 1 January 2024
IAS 7 & IFRS 7 amendments Supplier
finance arrangements
Effective: Annual periods beginning on or after 1 January 2025
IAS 21 amendments Lack
of Exchangeability
Effective: Annual periods beginning on or after 1 January 2025
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
Effective: To be determined
There are no IFRSs or IFRIC interpretations that are not yet effective that
would be expected to have a material impact on the Company or Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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 2023.
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
(iii) Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and
liabilities of the subsidiary, and any related NCI and other components of
equity. Any resulting gain or loss is recognised in profit or loss. Any
interest retained in the former subsidiary is measured at fair value when
control is lost. A change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction.
(iv) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses
arising from intra-group transactions, are eliminated. Unrealised gains
arising from transactions with equity-accounted investee are eliminated
against the investment to the extent of the Group's interest in the investee.
Unrealised losses are eliminated in the same way as unrealised gains, but only
to the extent that there is no evidence of impairment.
(b) Revenue recognition
Revenue is recognised to depict the transfer of goods and services to
customers in an amount that reflects the consideration to which the Group
expects to be entitled in exchange for those goods or services. Specifically,
the Group uses a 5-step approach to revenue recognition:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in
the contract; and
Step 5: Recognise revenue when (or as) the entity satisfies a performance
obligation.
The Group recognises revenue when (or as) a performance obligation is
satisfied, i.e. when " control" of the goods or services underlying the
particular performance obligation is transferred to customers.
A performance obligation represents a good or service (or a bundle of goods or
services) that is distinct or a series of distinct goods or services that are
substantially the same.
Control is transferred over time and revenue is recognised over time by
reference to the progress towards complete satisfaction of relevant
performance obligation if one of the following criteria is met:
- the customer simultaneously receives and consumes the benefits provided
by the entity's performance as the Group performs;
- the Group's performance creates and enhances an asset that the customer
controls as the Group performs; or
- the Group's performance does not create an asset with an alternative
use to the Group and the Group has an enforceable right to payment for
performance completed to date.
Otherwise, revenue is recognised at a point in time when the customer obtains
control of the distinct good or service.
A contract asset represents the Group's right to consideration in exchange for
goods and 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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 e-commerce service is recognised when the performance obligation
is satisfied. Interest income from a financial asset is accrued on a time
basis using the effective interest method.
(c) Government grants
Government grants are recognised where there is reasonable assurance that the
grant will be received and all attached conditions will be complied with. When
the grant relates to an expense item, it is recognised as income on a
systematic basis over the periods that the related costs, for which it is
intended to compensate, are expensed. When the grant relates to an asset, it
is recognised as income in equal amounts over the expected useful life of the
related asset.
When the Group receives grants of non-monetary assets, the asset and the grant
are recorded at nominal amounts and released to profit or loss over the
expected useful life of the asset, based on the pattern of consumption of the
benefits of the underlying asset by equal annual instalments.
(d) Foreign currency transactions
(i) Functional and presentational currency
Items included in the Financial Statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ("functional currency"), being British Pound Sterling ("GBP"
or "£ (https://en.wikipedia.org/wiki/Pound_sign) "), Chinese Yuan ("CNY") and
Hong Kong Dollar ("HKD"). The Group Financial Statements are presented in GBP.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies are translated at the
rates of exchange ruling at the Statement of Financial Position date. Foreign
exchange gains and losses resulting from the settlement of such transactions,
and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies, are recognised in the Statement
of Comprehensive Income.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
(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:
- the contractual arrangement(s) with the other vote holders of the
investee assets and liabilities for each statement of financial position
presented are translated at the closing exchange rate at the date of that
statement of financial position;
- income and expenses for each statement of comprehensive income are
translated at average exchange rates; and
- all resulting exchange differences are recognised in other
comprehensive income (loss).
(e) Goodwill and intangible assets
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as
established at the date of acquisition of the business less accumulated
impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the
Group' s cash-generating units (or groups of cash-generating units) that is
expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for
impairment annually, or more frequently when there is indication that the unit
may be impaired. For the goodwill arising on an acquisition in a reporting
period, the cash-generating unit to which goodwill has been allocated is
tested for impairment before the end of that reporting period. If the
recoverable amount of the cash-generating unit is less than its carrying
amount, the impairment loss is allocated first to reduce the carrying amount
of any goodwill allocated to the unit and then to the other assets of the unit
on a pro rata basis based on the carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised directly in profit or loss. An
impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of
goodwill is included in the determination of the amount of profit or loss on
disposal.
(f) Property, plant and equipment
Property, plant and equipment is measured on the cost basis and therefore
stated at historic cost less accumulated depreciation. Historic cost includes
expenditure that is directly attributable to the acquisition of the items.
All repairs and maintenance expenditure is charged to the Consolidated
Statement of Profit or Loss during the financial period in which they are
incurred.
Depreciation is calculated using the straight-line method to allocate their
cost over their estimated useful lives, as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
(f) Property, plant and equipment (Continued)
Owned assets
Office equipment 36 - 60
months
Leasehold improvement lower of 36 months and the
lease term
Right-of-use assets
Buildings
Over the lease term
The assets' useful lives are reviewed, and, if appropriate, asset values are
written down to their estimated recoverable amounts, at each reporting date.
Gains and losses on disposals are determined by comparing proceeds with the
carrying amounts, and are included in profit or loss.
(g) Impairment of non-financial assets
Goodwill and intangible assets with indefinite useful lives or those not yet
available for use are not subject to amortisation and are tested for
impairment at least annually, irrespective of whether there is any indication
that they are impaired. All other assets are tested for impairment whenever
there are indications that the asset's carrying amount may not be recoverable.
An impairment loss is recognised as an expense immediately for the amount by
which the asset' s carrying amount exceeds its recoverable amount. Recoverable
amount is the higher of fair value, reflecting market conditions less costs of
disposal, and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessment of time value of money and the risk
specific to the asset. For the purposes of assessing impairment, where an
asset does not generate cash inflows largely independent from other assets,
the recoverable amount is determined for the smallest group of assets that
generate cash inflows independently (i.e. a cash-generating unit). As a
result, some assets are tested individually for impairment and some are tested
at cash-generating unit level. Goodwill in particular is allocated to those
cash-generating units that are expected to benefit from synergies of the
related business combination and represent the lowest level within the Group
at which the goodwill is monitored for internal management purpose and not be
larger than an operating segment.
Impairment losses recognised for cash-generating units, to which goodwill has
been allocated, are credited initially to the carrying amount of goodwill. Any
remaining impairment loss is charged pro-rata to the other assets in the cash
generating unit, except that the carrying value of an asset will not be
reduced below its individual fair value less cost of disposal, or value in
use, if determinable. An impairment loss on goodwill is not reversed in
subsequent periods. In respect of other assets, an impairment loss is reversed
if there has been a favourable change in the estimates used to determine the
asset's recoverable amount and only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been
recognised. Impairment losses recognised in an interim period in respect of
goodwill are not reversed in a subsequent period. This is the case even if no
loss, or a smaller loss, would have been recognised had the impairment been
assessed only at the end of the financial year to which the interim period
relates.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
(h) Financial instruments
Financial assets and financial liabilities are recognised in the statements of
financial position when a group entity becomes a party to the contractual
provisions of the instrument. Financial assets and financial liabilities
within the scope of IFRS 9 are initially measured at fair value and
transaction costs that are directly attributable to the acquisition or issue
of financial assets and financial liabilities are added to or deducted from
the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition.
The Group's financial assets, including deposits, receivables, contract assets
and cash and cash equivalents, are subsequently measured at amortised cost
using the effective interest method, less identified impairment charges (see
Note 4(i)) as the assets are held within a business model whose objective is
to hold assets in order to collect contractual cash flows and the contractual
terms of the financial assets give rise on specific dates to cash flows that
are solely payments of principal and interest on the principal amount
outstanding.
Financial liabilities include lease liabilities, trade payables, amount due to
a director, other payables and accruals. All financial liabilities are
subsequently measured at amortised cost using the effective interest method.
(i) Impairment of financial assets
The Group recognises loss allowances for expected credit loss on the financial
instruments that are not measured at fair value. 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 profit or loss. 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 profit or
loss.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
(j) Derecognition of financial assets and financial
liabilities
Financial assets are derecognised when the contractual rights to receive the
cash flows of the financial assets expire; or where the Group transfers the
financial assets and either (i) it has transferred substantially all the risks
and rewards of ownership of the financial assets; or (ii) it has neither
transferred nor retained substantially all the risks and rewards of ownership
of the financial assets but has not retained control of the financial assets.
Financial liabilities are derecognised when they are extinguished, i.e. when
the obligation is discharged, cancelled or expires.
(k) Inventories
Inventories are stated at the lower of cost or net realisable value, with cost
determined using the first-in, first-out ("FIFO") cost method. Net realisable
value is the estimated selling price in the ordinary course of business, less
estimated cost necessary to make the sale. Allowances are established to
reduce the cost of excess and obsolete or damaged inventories to their
estimated net realiable value.
(l) Trade Receivables
In determining the recoverability of trade receivables, the Group considers
any change in the credit quality of the trade receivables from the initial
recognition date to the end of each of the reporting period. In the opinion of
the directors of the Company, apart from those balances for which allowances
have been provided, other trade receivables at the end of each reporting
period are of good credit quality which considering the high credibility of
these customers, good track record with the Group and subsequent settlement,
the management believes that no impairment allowance is necessary in respect
of unsettled balances.
The Group applied the simplified approach to provide the expected credit
losses ("ECL") prescribed by IFRS 9. The impairment methodology is set out in
Note 4 and Note 5(iii) respectively. As part of the Group's credit risk
management, the Group assesses the impairment for its customers based on
different group of customers which share common risk characteristics that are
representative of the customers' abilities to pay all amounts due in
accordance with the contractual terms.
(m) Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with
banks.
(n) Current and deferred income tax
Income tax comprises current and deferred tax. Current income tax is
recognised in the profit or loss, except to the extent that it relates to
items recognised directly in equity. In this case the tax is also recognised
directly in other comprehensive income or directly in equity, respectively.
Current income tax is calculated on the basis of the tax laws enacted or
substantively enacted at the end of the reporting period in the countries
where the Company's subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of amounts expected
to be paid to the tax authorities.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
(n) Current and deferred income tax (Continued)
Deferred income tax is recognised, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the Consolidated Financial Statements. However, the
deferred tax is not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business combination that, at
the time of the transaction, affects neither accounting nor taxable profit or
loss. Deferred income tax is determined using tax rates (and laws) that have
been enacted, or substantially enacted, by the end of the reporting period and
are expected to apply when the related deferred income tax asset is utilised,
or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is
probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax
liabilities, and when the deferred income tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the taxable
entity or different taxable entities where there is an intention to settle the
balances on a net basis.
(o) Leases
Lessee
All leases with a term of more than 12 months are recognised as an asset
representing the right to use of the underlying asset and a liability
representing the obligation to make lease payments, unless the underlying
asset is of low value. Both the asset and the liability are initially measured
on a present value basis. Right-of-use assets are recognised under fixed
assets and are measured at cost less any accumulated depreciation and
impairment losses and adjusted for any remeasurement of the lease liabilities.
Right-of-use assets are depreciated on a straight-line basis over the shorter
of the useful life of the assets and the lease term. Lease liabilities are
initially measured at the present value of unpaid lease payments and
subsequently adjusted by the effect of the interest on and the settlement of
the lease liabilities, and the re-measurement arising from any reassessment of
the lease liabilities or lease modifications.
Lessor
Leases where substantially all the risks and rewards of ownership of assets
remain with the Group are classified as operating leases. Assets leased under
operating leases are included in fixed assets and rentals receivable are
credited to surplus or deficit on the straight-line basis over the lease term.
(p) Going Concern
The director's cash-flow projections for the forthcoming 12 months conclude
there will be the need for additional cash resources to fully implement the
business plans. A director has confirmed to provide financial supports to the
Group and granted loan of approximately £80,000 to the Group subsequent to
the reporting period for supporting the Group's operation for the forthcoming
12 months. In addition, the directors are in non-binding discussions with
individuals and institutions that may lead to further equity and/or loans
being raised. There may be uncertainty that any such funds will be forthcoming
or the price and other terms being acceptable and as such there is a material
uncertainty over going concern.
(q) Employee benefits
Salaries, wages, paid annual leave, bonuses and non-monetary benefits are
accrued in the Year in which the associated services are rendered by the
employees of the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
(r) Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(s) Share-based payments
Equity-settled share-based payment transactions in exchange for services of
goods are measured at the fair value of the goods or services received, except
where that fair value cannot be estimated reliably, in which case they are
measured at the fair value of the equity instruments granted, measured at the
date the entity obtains the goods or the counterparty renders the service. The
fair value excludes the effect of non-market-based vesting conditions. Details
regarding the determination of the fair value of equity-settled share-based
transactions are set out in Note 21.
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 £9,111. Apart from the abovementioned
amount, no other financial instrument is subjected to interest rate risk. The
interest rate risk is therefore considered minimal.
(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.
It is considered by the management of the Group that the exposure to foreign
exchange risk is minimal.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
(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 23.
Most of the Group' s cash in banks have been deposited with reputable and
creditworthy banks in Hong Kong. Management considers there is minimal credit
risk associated with those balances.
(iv) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
obligations associated with financial liabilities. The responsibility for
liquidity risk management rests with the Board of Directors.
As at the reporting date, the Group was in a net current liabilities
positions. The Group is currently obtaining cash advances from one of a
director to meet its temporary operating needs. Further, the Board of
Directors is sourcing alternatives for the Group' s future capital needs
include the issue of equity instruments and external borrowing. These
alternatives are evaluated to determine the optimal mix of capital resources
for our capital needs.
(v) Market risk
Market risk is the risk that changes in market prices, such as interest rates
and foreign exchange rates, will affect the Group's income or the value of its
holdings of financial instruments. The objective of market risk management is
to manage and control market risk exposures within acceptable parameters,
while optimising the return. The Group does not hedge these risk exposures due
to the lack of any market to purchase financial instruments.
(vi) Capital risk management
The Company manages its capital to ensure that the Company will be able to
continue as a going concern while maximising the return to shareholder through
the optimisation of the debt and equity balances.
The capital structure of the Company consists of debt and 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
6. CRITICAL ACCOUNTING JUDGEMENTS AND KEY UNCERTAINTIES OF
ESTIMATION UNCERTAINTY
The preparation of the Group' s financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and their accompanying disclosures
and the disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that could require a
material adjustment to the carrying amounts of the assets or liabilities
affected in the future.
The estimates and underlying assumption are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
Key source of estimation uncertainty
Trade receivables and contract assets
The Group's customer base consists of a wide range of clients and the trade
receivables and contract assets are categorised by common risk characteristics
that are representative of the customers' abilities to pay all amounts due in
accordance with the contractual terms. The Group applies a simplified approach
in calculating ECL for trade receivables and contract assets and recognises a
loss allowance based on lifetime ECL at each reporting date and has
established a provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific to the debtors and
the economic environment. The expected loss rate used in the provision matrix
is calculated for each category based on actual credit loss experience over
the prior years and adjusted for current and forward- looking factors to
reflect differences between economic conditions during the period over which
the historical data has been collected, current conditions and the Group's
estimate on future economic conditions over the expected lives of the
receivables. There was no change in the estimation techniques or significant
assumptions made during the Year.
At 31 December 2023, a provision for impairment loss on trade receivables and
contract assets of £9,500 (2022: Nil) was recognised according to the
management expected loss. 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 2023 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 2023 (2022: Nil).
Allowance for obsolete inventories
Allowance for obsolete inventories is made for those identified obsolete and
slow-moving inventories and inventories with a carrying amount higher than net
realisable value. The assessment of the allowance involves management' s
judgement and estimates on which are influenced by assumptions concerning
future sales and judgements in determining the appropriate level of inventory
allowance against identified surplus or obsolete items. Where the actual
outcome in future is different from the original estimate, such difference
will impact the carrying value of inventories and allowance charge/write-back
in the period in which such estimate has been changed.
At 31 December 2023, allowance for obsolete inventories of £42,413 (2022:
Nil) was recognised.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
7. SEGMENT INFORMATION
The Chief Operating Decision Maker ("CODM") has been identified as the
executive directors of the Company who reviews the Group's internal reporting
in order to assess performance and allocate resources. The CODM has determined
the operating segments based on these reports.
For management purposes, the Group is organised into business units based on
their products and services, and has reportable operating segments as follows:
(a) The digital marketing and payment segment includes services
on enlisting merchants to mobile payment gateways and providing digital
advertising services;
(b) The software development and support segment includes sales
and distribution of mobile game and all other I.T. related development and
support services; and
(c) The e-commerce segment includes sales of goods through
internet and provision for consultancy services related to e-commerce.
Digital marketing and payment
Software development and support
e-Commerce Unallocated Total
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Year ended 31 December 2023
Revenue - - 125,793 - 125,793
Segment loss (1,691) - (11,838) (413,517) (427,046)
Depreciation - - - 29,010 29,010
Assets 6 - 110,393 43,080 153,479
Liabilities 6,470 - 99,858 1,315,224 1,421,552
Year ended 31 December 2022
Revenue 887 - 225,863 - 226,750
Segment (loss)/Profit (53,128) (7,920) 4,534 (123,055) (179,569)
Depreciation - - - 34,746 34,746
Assets 443 - 196,419 74,319 271,181
Liabilities 21,767 - 125,892 1,016,365 1,164,024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
7. SEGMENT INFORMATION (CONTINUED)
Geographical information:
2023 2022
Revenue by Geography £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Hong Kong 125,793 226,750
Information about major customers
For the year ended 31 December 2023, 2 external customer contributed more than
10% to the Group revenue (2022: no external customer contributed more than 10%
to the Group revenue).
8. REVENUE AND OTHER INCOME
2022 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
REVENUE
Advertising services - 887
Commission income 1,301 1,301
eCommerce sales 124,492 224,562
125,793 226,750
OTHER INCOME
Bank interest income 11 10
Government subsidy - 2,730
Others 16,056 17,744
16,067 20,484
9. LOSS BEFORE TAX
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Loss before tax has been arrived at after charging:
Depreciation - Owned assets - 1,387
Depreciation - Right of use assets 29,010 33,359
Cost of inventories sold 71,893 133,462
Exchange gain, net 50,520 (125,886)
Provision for impairment losses on trade and other receivables 17,811 -
Allowance for obsolete inventories 42,413 -
Staff cost (including Director Remuneration) 206,861 307,105
Audit fees 52,500 52,241
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10. EMPLOYEES
The average number of employees during the Year was made up as follows:
2023 2022
Directors 2 2
Staff 3 7
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Staff costs, including directors' costs comprise:
Wages, salaries and other staff costs 206,861 307,105
Share-based remuneration - -
206,861 307,105
Included in the wages, salaries and other staff cost, £
(https://en.wikipedia.org/wiki/Pound_sign) 3,827 (2022: £
(https://en.wikipedia.org/wiki/Pound_sign) 26,616) represents the salaries
paid to the daughter of a director.
Key Management Remuneration
The directors' emoluments in respect of qualifying services, which all related
to short-term employee benefits, were as follows:
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Chung Lam Nelson Law
Salaries and fees - in cash 180,000 180,000
Share-based payment - -
Geoffrey John Griggs
Salaries and fees - in cash 18,000 18,000
Share-based payment - -
198,000 198,000
No pension contributions were made on behalf of the directors of the Company.
No share options were granted to directors during the year and year ended 31
December 2023 and 2022.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11. INCOME TAX
No provision for profits tax has been made in these consolidated financial
statements as the Group did not have any assessable profits. The profits tax
rate for Hong Kong is currently at 16.5% (2022: 16.5%) of the estimated
assessable profits for the Year.
A reconciliation of income tax expense applicable to the loss before tax at
the statutory tax rate of Hong Kong to the income tax expense at the effective
tax rate of the Group is as follows:
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Loss before tax (427,046) (179,569)
Tax at the Hong Kong statutory tax rate of 16.5% (70,463) (29,629)
Effect of different tax rates in other jurisdictions - 51,135
Income not subject to tax (7,319) (178,623)
Expenses not deductible for tax 74,833 157,216
Tax losses not recognized for the year 4,380 4,856
Utilisation of tax losses not recognised for the year (1,431) (4,955)
- -
Hong Kong statutory tax rate of 16.5% is adopted in the tax reconciliation
since the Group's major operating subsidiaries are incorporated and operated
in Hong Kong and subject to Hong Kong Profits Tax.
Potential deferred tax assets arising from operating loss carryforward
totalling approximately £588,000 (2022: £570,000) have not been recognised
due to uncertainty as to when taxable profits will be generated.
12. BASIC AND DILUTED LOSS PER SHARE
Basic loss per share is calculated by dividing the loss attributable to the
Company' s owners of £414,232 (2022: £177,096) by the weighted average
number of 715,815,080 ordinary shares (2022: 602,495,699) in issue during
2023.
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.
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Effect of potential ordinary shares
Employee share options (Note 21(a)) 105,122,539 105,122,539
Diluted loss per share was the same as basic loss per share as no potential
dilutive ordinary shares were outstanding for both the years ended 31 December
2023 and 2022.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
13. PROPERTY, PLANT AND EQUIPMENT
Office equipment Leasehold improvement Right-of-use
Assets Total
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
At 1 January 2023 - - 44,791 44,791
Depreciation for the year - - (29,010) (29,010)
Exchange differences - - (1,603) (1,603)
At 31 December 2023 - - 14,178 14,178
At 1 January 2022 - 1,159 14,491 15,650
Additions for the year - - 59,721 59,721
Depreciation for the year - (1,387) (33,359) (34,746)
Exchange differences - 228 3,938 4,166
At 31 December 2022 - - 44,791 44,791
14. INVENTORIES
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Finished goods:
Gross amount 91,637 106,088
Allowance for obsolete inventories (42,413) -
49,224 106,088
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
15. TRADE RECEIVABLES, DEPOSIT, PREPAYMENT AND OTHER RECEIVABLES
(a) Trade receivables
2022 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Trade receivables - billed 25,935 26,430
Less: Provision for impairment loss (9,500) -
35,435 26,430
During the year, the Group has recognised a provision for impairment loss on
trade receivables of £9,500 (2022: 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:
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Within 30 days 14,431 9,305
31 to 60 days 1,769 6,134
61 to 90 days 1,310 2,006
91 to 180 days 17,925 8,985
35,435 26,430
The carrying amount of the Group's trade receivables as at 31 December 2023
and 2022 was denominated in Hong Kond Dollars.
(b) Deposit,prepayments and other receivables
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Prepayments 32,684 35,814
Deposit and other receivables 21,158 22,491
Less: Provision for impairment loss (8,311) -
45,531 58,305
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
16. TRADE PAYABLES
The following is an ageing analysis of trade payables presented based on the
invoice date at the end of each reporting period:
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Within 30 days - -
31 to 60 days - -
61 to 90 days - -
91 to 180 days - -
181 to 365 days - -
More than 365 days 36,110 36,110
36,110 36,110
17. AMOUNT DUE TO A DIRECTOR
The amount was unsecured, interest-free and had no fixed terms of repayment.
18. LEASE LIABILITIES
The total minimum lease liabilities under finance leases and their present
values at the reporting date are as follows:
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Current portion:
Gross finance lease liabilities 14,503 30,544
Finance expense not recognised (71) (686)
14,432 29,858
Non-current portion:
Gross finance lease liabilities - 15,272
Finance expense not recognised - (75)
- 15,197
14,432 45,055
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
The net finance lease liabilities are analysed as follows:
- Not later than 1 year 14,432 29,858
- Later than 1 year but not more than 5 years - 15,197
Net finance lease liabilities 14,432 45,055
The interest on lease liabilities for the year ended 31 December 2023 was
£666 (2022: £738). 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
2023 were £Nil (2022: £ Nil).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
19. SHARE CAPITAL
2023 2022
Number of shares Number of shares
£ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Ordinary shares issued and fully paid
At 1 January 715,815,080 71,581 595,694,385 59,569
Issue of shares - - 120,120,695 12,012
At 31 December 715,815,080 71,581 715,815,080 71,581
On 20 December 2022, the Company has issued 115,211,604 new ordinary shares of
0.21 pence each to Mr. Nelson Law, the Company's Chairman and Chief Financial
Officer, for the conversion of the loan owned to him of £241,944.
On 4 April 2022, the Company has issued 4,909,091 new ordinary shares of the
Company in lieu of professional service provided.
20. CAPITAL AND RESERVES
The nature and purpose of equity and reserves are as follows:
Share capital comprises the nominal value of the ordinary issued share capital
of the Company.
Share Premium represents consideration less nominal value of issued shares and
costs directly attributable to the issue of new shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
21. SHARE-BASED PAYMENTS
(a) Share Options
During the year ended 31 December 2021, the Group has implemented a stock
option plan (the "Plan") for the employees and directors, which awards options
over the ordinary share of the Company. The Board of Directors (the "Board")
approves all grants and the terms of all grants. Options awarded under the
Plan generally vest on issue and exercisable over a period from one year after
the grant date to four years after the grant date.
The fair value of each option granted is estimated on grant date using the
Black-Scholes option-pricing model by applying the following assumptions:
Share
price
£0.0007
Risk-free interest
rate
0.0022%
Expected life of warrant
(years)
4
Expected annualised volatility
0.66
Expected dividend yield
Nil
For the year ended 31 December 2021, the Company recorded share-based
compensation expenses in the amount of £357,417.
At 31 December 2023 and 2022, the Group had 105,122,539 share options
outstanding as follows.
Date of Exercise
Expiry Exercise Number
Grant start date date
price granted
19/10/2021 19/10/2021 18/10/2025
0.7p
Nil
(b) Shares issued for services
On 4 April 2022, the Company has issued 4,909,091 new ordinary shares of the
Company in lieu of professional service provided.
22. 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
23. FINANCIAL INSTRUMENTS BY CATEGORY
The totals for each category of financial instruments is as follows:
2023 2022
Financial assets £ (https://en.wikipedia.org/wiki/Pound_sign) £ (https://en.wikipedia.org/wiki/Pound_sign)
Financial assets at amortised cost
Trade receivables 35,435 26,430
Deposit and other receivables 12,847 22,491
Cash and cash equivalents 9,111 35,567
57,393 84,488
Financial liabilities
Liabilities at amortised cost
Trade payables 36,110 36,110
Other payables and accrued expense 630,524 480,213
Amounts due to directors 740,486 602,646
Lease liabilities 14,432 45,055
1,421,552 1,164,024
Prepayments are excluded from the summary above.
24. CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
Lease liabilities
2023 2022
£ (https://en.wikipedia.org/wiki/Pound_sign) £
At 1 January 45,055 14,750
New lease - 59,721
Financing cash flows (29,674) (33,582)
Exchange adjustment (949) 4,166
At 31 December 14,432 45,055
25. CAPITAL COMMITMENTS
There were no capital commitments as at the year ended 31 December 2023 (2022:
Nil).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
26. DEREGISTRATION OF SUBSIDIARIES
In April 2023, the Group deregistered the subsidiaries of Taohui Limited (PRC)
and Ptp Media Limited (PRC). The principal activities of the subsidiaries are
inactive.
The following summarises the carrying amount of the assets and liabilities at
the date of deregistration:
£ (https://en.wikipedia.org/wiki/Pound_sign)
Net liabilities of the deregistered subsidiaries
Prepayments and other receivables 381
Cash and cash equivalents 1,013
Other payables and accrued expenses (42,601)
(41,207)
Gain on deregistration of subsidiaries 41,207
-
Net cash flow on deregistration of subsidiaries -
Net outflow of cash and cash equivalents (381)
27. SUBSEQUENT EVENT
On 26 January 2024, the Company has issued 9,090,909 new ordinary shares of
the Company in lieu of professional service provided. The management expects
share premium of approximately £ (https://en.wikipedia.org/wiki/Pound_sign)
9,000 will be generated as a result.
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