| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of presentation The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Principles
of consolidation The
consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. A subsidiary is an entity (including
a structured entity), directly or indirectly, controlled by the Company. The financial statements of the subsidiaries are prepared for
the same reporting period as the Company, using consistent accounting policies. All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions between members of the Group are eliminated in consolidation. MAGIC
EMPIRE GLOBAL LIMITED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Foreign
currency translation The
Group uses Hong Kong Dollar (“HK$”) as its reporting currency. The functional currency of the Company in British Virgin Islands
is United States Dollar (“US$”) and the Company’s subsidiaries in Hong Kong is HK$, which is its respective local currency
based on the criteria of ASC 830, “ Foreign Currency Matters In
the consolidated financial statements of the Company, transactions in currencies other than the functional currency are measured and
recorded in the functional currency using the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary
assets and liabilities that are denominated in currencies other than the functional currency are translated into the functional currency
using the exchange rate at the balance sheet date. All gains and losses arising from foreign currency transactions are recorded in the
income statements during the year in which they occur. Convenience
translation Translations
of amounts in the consolidated balance sheet, consolidated statements of operations and consolidated statements of cash flows
from HK$ into US$ as of and for the year ended December 30, 2022 are solely for the convenience of the reader and were calculated
at the noon buying rate of US$ 1
= HK$ 7.8015 ,
as published in H.10 statistical release of the United States Federal Reserve Board. No representation is made that the HK$ amounts could
have been, or could be, converted, realized or settled into US$ at such rate or at any other rate. Use
of estimates The
preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent
from other sources. Significant accounting estimates reflected in the Group’s consolidated financial statements include allowance
for doubtful accounts, the useful lives of property and equipment, interest rate of lease and impairment assessment on long-term investment.
Actual results may differ from these estimates. Cash Cash
mainly represent cash at bank and demand deposits which have original maturities less than three months and are unrestricted as to withdrawal
or use. As of December 31, 2022 and 2021, the Group did not have any cash equivalents. The Group maintains bank accounts in Hong Kong. MAGIC
EMPIRE GLOBAL LIMITED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounts
receivable Accounts
receivable mainly represent amounts due from clients for corporate finance services which are recorded net of allowance for the Group’s
doubtful accounts. The group does not grant credit terms to the clients. In evaluating the collectability of receivable balances, the
Group considers specific evidence including aging of the receivable, the client’s payment history, its current creditworthiness
and current economic trends. The Group regularly reviews the adequacy and appropriateness of the allowance for doubtful accounts. Accounts
receivable are written off after all collection efforts have ceased. As of December 31, 2022 and 2021, the allowance for doubtful accounts
was nil Deposits
and prepayments Deposits
and prepayments are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured
and are reviewed periodically to determine whether their carrying value has become impaired. As of December 31, 2022 and 2021, management
believes that the Company’s prepayments and deposits are not impaired. Property
and equipment, net Property
and equipment are stated at cost less accumulated depreciation and impairment if applicable. The Group computes depreciation using the
straight-line method over the estimated useful lives of the assets as follows: SCHEDULE
OF USEFUL LIVES OF PROPERTY AND EQUIPMENT
Office
equipment 1 3
Furniture
and fixtures 3
Leasehold
improvements Over
the shorter of the lease term or estimated useful life The
cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is
included in the consolidated statements of operations. Expenditures for maintenance and repairs are charged to earnings as incurred,
while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also
re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful
lives. Impairment
of long-lived assets The
Group evaluates the recoverability of its long-lived assets (asset groups), including property and equipment and operating lease right-of-use
assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of its asset (asset group) may not
be fully recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to the estimated
undiscounted future cash flows expected to result from the use of the asset (asset group) and their eventual disposition. If the sum
of the expected undiscounted cash flows is less than the carrying amount of the asset (asset group), the Group recognizes an impairment
loss based on the excess of the carrying amount of the asset (asset group) over their fair value. Fair value is generally determined
by discounting the cash flows expected to be generated by the asset (asset group), when the market prices are not readily available.
The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived
assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of
the cash flows of other assets and liabilities. For the years ended December 31, 2022, 2021 and 2020, no
impairment of long-lived assets was recognized. Long-term investment ASU
2016-01 (“ASU 2016-01”), Recognition and Measurement of Financial Assets and Financial Liabilities amends certain aspects
of recognition, measurement, presentation and disclosure of financial instruments. The main provisions require equity investments (except
those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair
value through earnings, unless they qualify for a measurement alternative. Equity
Investments with Readily Determinable Fair Values Equity
investments with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted
prices in active markets at the reporting date. Equity
investments without readily determinable fair values After
the adoption of this new accounting standard, the Company elected to record equity investments without readily determinable fair values
and not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring
basis, and report changes in the carrying value of the equity investment in current earnings. Changes in the carrying value of the equity
investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment
of the same issuer. Reasonable efforts shall be made to identify price changes that are known or that can reasonably be known. Contract
liabilities The
Group bills its clients based upon contractual schedules. The timing of revenue recognition, billings and cash collections result in
accounts receivable and contract liabilities. MAGIC
EMPIRE GLOBAL LIMITED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Contract
liabilities represent the upfront payments received upon signing of the contract for initial public offering/independent financial advisory/financial
advisory services and advances from clients related to compliance advisory services. Advance payments in excess of related accounts receivable
are presented as contract liabilities on the consolidated balance sheets. Lease The
Group is a lessee of non-cancellable operating leases for corporate office premise. The Group determines if an arrangement is a lease
at inception. Lease assets and liabilities are recognized at the present value of the future lease payments at the leases commencement
date. The interest rate used to determine the present value of the future lease payments is the Group’s incremental borrowing rate
based on the information available at the lease commencement date. The Group generally uses the base, non-cancellable lease term in calculating
the right-of-use assets and liabilities. The
Group may recognize the lease payments in the consolidated statements of operations on a straight-line basis over the lease terms
and variable lease payments in the periods in which the obligations for those payments are incurred, if any. The lease payments under
the lease arrangements are fixed. The
lease standard provides practical expedients for an entity ongoing accounting. The Group elected to apply the short-term lease exception
for lease arrangements with a lease term of 12 months or less at commencement. Lease terms used to compute the present value of lease
payments do not include any option to extend, renew or terminate the lease that the Group is not able to reasonably certain to exercise
upon the lease inception. Accordingly, operating lease right-of-use assets and liabilities do not include leases with a lease term of
12 months or less. The
Group did not adopt the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease
component. Non-lease components include payments for building management, utilities and property tax. It separates the non-lease components
from the lease components to which they relate. The
Group evaluates the impairment of its right-of-use assets consistent with the approach applied for its other long-lived assets. The Group
reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value
of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the
asset from the expected undiscounted future pre-tax cash flows of the related operations. The Group has elected to include the carrying
amount of finance and operating lease liabilities in any tested asset group and include the associated lease payments in the undiscounted
future pre-tax cash flows. For the years ended December 31, 2022, 2021 and 2020, the Group did not have any impairment
loss against its operating lease right-of-use assets. MAGIC
EMPIRE GLOBAL LIMITED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fair
value of financial instruments ASC
825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize
the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as
follows: Level
1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level
2 — Other inputs that are directly or indirectly observable in the marketplace. Level
3 — Unobservable inputs which are supported by little or no market activity. The
carrying amounts of cash, accounts receivable, interest receivables, other receivables from related parties, other payables to
related parties, and accruals and other payables approximate their fair values because of their generally short maturities. The
following table presents information about the Company’s assets that were measured at fair value on a recurring basis as of December
31, 2022 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. SCHEDULE OF FAIR VALUE ON A
RECURRING BASIS
Quoted Significant Significant
Prices Other Other
In Active Observable Unobservable
December 31, Markets Inputs Inputs
2022 (Level 1) (Level 2) (Level 3)
HK$ HK$ HK$ HK$
Assets: -
Non-marketable equity securities 14,500,000 — — 14,500,000 The
Company’s non-marketable equity securities are investments in privately held companies, which are without readily determinable
market values and are classified as Level 3, due to the absence of quoted market prices, the inherent lack of liquidity and the fact
that inputs used to measure fair value are unobservable and require management’s judgment. Fair
value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates
are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect the estimates. Revenue
recognition The
Group applied ASC Topic 606 “Revenue from Contracts with Customers” (“ASC 606”) for all periods presented. The
five-step model defined by ASC 606 requires the Group to (1) identify its contracts with customers, (2) identify its performance obligations
under those contracts, (3) determine the transaction prices of those contracts, (4) allocate the transaction prices to its performance
obligations in those contracts, and (5) recognize revenue when each performance obligation under those contracts is satisfied. Revenue
is recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in
exchange for those goods or services. The
Group has elected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance
obligations that have original expected durations of one year or less. The
Group elected a practical expedient that it does not adjust the promised amount of consideration for the effects of a significant financing
component if the Group expects that, upon the inception of revenue contracts, the period between when the Group transfers its promised
services or deliverables to its clients and when the clients pay for those services or deliverables will be one year or less. As
a practical expedient, the Group elected to expense the incremental costs of obtaining a contract when incurred if the amortization period
of the asset that the Group otherwise would have recognized is one year or less. The
Group is a financial services provider in Hong Kong which principally engages in the provision of corporate finance advisory services
and underwriting services. The service offerings mainly comprise the following: The
Group’s principal revenue stream includes:
1. IPO sponsorship services: The Group acts as sponsors to companies
pursuing listing on the Main Board of the Stock Exchange and GEM of the Stock Exchange advising and guiding them throughout the listing
process in return for sponsor’s fee. The
Group enters into a distinct contract with its clients for the provision of IPO sponsorship services. The revenues generated from IPO
sponsorship services are generally based on the fixed fee billing arrangements that require the clients to pay a pre-established fee
in exchange for a predetermined set of professional services. The clients agree to pay a fixed fee by instalments over the contract terms
as specified in the service agreements. The IPO sponsorship services include assisting the client to engage different professional parties
for its IPO, carrying out due diligence, preparation of and reviewing prospectus and other submission documents including accountants’
report, legal opinions and profit and cash flow forecast memorandum, assessing the suitability of listing of the client, and advising
on reorganization, assisting in preparation of roadshow materials and attending hearing for the listing application. There are
generally three performance obligations for IPO sponsorship services while fee is paid by the Group’s clients by instalments subject
to each milestone being achieved as stated in the contract. MAGIC
EMPIRE GLOBAL LIMITED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The
Group allocates the transaction price to each performance obligation based on the best estimate of relative standalone selling price
for each performance obligation identified in the contract. The Group utilizes key assumptions to determine the standalone selling
price, which may include other comparable transactions, pricing considered in negotiating the transaction, market conditions, project
complexity, customer demographics and the estimated costs. Generally, the standalone selling prices for each performance obligation of
the Group’s IPO sponsorship services are reasonably consistent across customers (that is, not highly variable), standalone selling
price estimates are derived from considering the Group’s pricing history and expected cost plus a margin approach. The
entire service fee from clients are non-refundable and the Group is entitled to receive upfront payment upon signing the contract. As
the preparation stage of a listing application involves a series of tasks which are interrelated and are not separable or distinct as
the Group’s clients cannot benefit from any standalone task, the Group concludes the stage of submission of listing application
as the first performance obligation and recognizes the revenue from upfront payment and fee received upon submission of listing
application together at the time of submission of listing application. For projects which the Group receives upfront payment upon signing
the contract but no listing application is submitted by the expiry of the contract, the Group recognizes revenue from the upfront
payment at the lapse of contract. For
service fee received upon attending the listing hearing of the Stock Exchange for the listing application, which is distinct and regarded
as the second performance obligation by the Group, revenue are recognized by the Group at the date the hearing is held and the Group
has an enforceable right to payment for such performance. For
service fee received upon listing, which is the third performance obligation of IPO sponsorship services, revenue is recognized upon
completion of the IPO, which is evidenced by listing of the clients on the Stock Exchange.
2. IFA services: The Group acts as an independent financial advisor
to give opinions or recommendations to the independent board committee and independent shareholders of the listed companies, in return
for advisory fee. The
Group enters a distinct contract with its clients for the provision of IFA services. The Group’s IFA services include (i) conducting
reviews and analyses on the proposed transactions and assessing the fairness and reasonableness of the terms of the proposed transactions;
(ii) issuing our opinion, in the form of an IFA letter, to the independent board committee and/or independent shareholders of listed
issuers with voting recommendations, which are incorporated in the circulars pursuant to the Listing Rules, the GEM Listing Rules and
the Takeovers Code; and (iii) obtaining the necessary clearance in relation to our opinion letters from the Stock Exchange and/or the
SFC. MAGIC
EMPIRE GLOBAL LIMITED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The entire service fee from clients are
non-refundable and the Group is entitled to receive upfront payment upon signing the contract. As the IFA services involve a series
of tasks which are interrelated and are not separable or distinct as the Group’s clients cannot benefit from any standalone
task, the Group concludes that the IFA services to be accounted for as a single performance obligation. The entire transaction
prices of IFA services are allocated to a single performance obligation
and the fees received upon signing the contract and upon issuance of circular which contains IFA letter, is recognized at the point
the issue of circular on the Stock Exchange because it is the time that the scope of work for acting as an IFA such as carrying out
due diligence, preparation of IFA letter to independent board committee and independent shareholders, and replying to queries from
the Stock Exchange and/or the SFC are completed. For projects which are terminated or lapsed at expiry of contracts, the revenue
from the upfront fee is recognized at the time of termination or lapse of contracts.
3. FA services: The Group acts as a financial advisor (i) to clients
to advise them on the terms and structures of the proposed transactions, and the relevant implications and compliance matters under the
Hong Kong regulatory framework including the Listing Rules, the GEM Listing Rules and the Takeovers Code; and (ii) to clients pursuing
listing on other stock exchange. The
Group enters a distinct contract with its clients for the provision of FA services. The scope of work under FA services can vary from
project to project and generally involves a series of tasks which are interrelated and are not separable or distinct as the Group’s
clients cannot benefit from any standalone task. Therefore, the entire transaction prices of FA services are generally allocated to a
single performance obligation. The
entire service fee from clients are non-refundable and the Group is entitled to receive upfront payment upon signing the contract. Revenue
from upfront payment and other installments is recognized based on the point in time either (a) at the time of completion; or (b) lapse
of the FA contract. For
FA services to clients pursuing listing on other stock exchange, the Group enters into a distinct contract with its clients. The revenues
are generally based on the fixed fee billing arrangements that require the clients to pay a pre-established fee in exchange for a predetermined
set of professional services. The clients agree to pay a fixed fee by instalments over the contract terms as specified in the service
agreements. The FA services include assisting the client to engage different professional parties for its listing exercise, advising
on reorganization, financial reporting, internal control and legal and compliance, advising on the market position of the Company,
coordinating roadshow and marketing activities. There are generally three performance obligations while fee is paid by the Group’s
clients by instalments subject to each milestone being achieved as stated in the contract. The
entire service fee from clients are non-refundable and the Group is entitled to receive upfront payment upon signing the contract. As
the preparation stage of a listing application involves a series of tasks which are interrelated and are not separable or distinct as
the Group’s clients cannot benefit from any standalone task, the Group concludes the stage of submission of listing application
as the first performance obligation and recognizes the revenue from upfront payment and fee received upon submission of listing
application together at the time of submission of listing application. In some cases, the payment upon signing of the contract is for
FA services (i) up to a time limit (which is stated in the contract); or (ii) upon the submission of a listing application, whichever
is earlier. In the case when the time is reached without a submission of listing application being made, the Group concludes this time
as the first performance obligation and recognizes revenue from upfront payment and fee received accordingly. For projects which
the Group receives upfront payment upon signing the contract but no listing application is submitted by the expiry of the contract, the
Group recognizes revenue from the upfront payment at the lapse of contract. For
service fee received upon listing, which is the third performance obligation, revenue is recognized upon completion of the FA service,
which is evidenced by listing of the clients.
4. CA services: The Group acts as a compliance advisor to the
listed companies on the Main Board or GEM and advise them on post-listing compliance matters in return for compliance advisory fee. The
Group enters a distinct contract with its clients for the provision of CA services. The Group concludes that each monthly CA service
(1) is distinct and (2) meets the criteria for recognizing revenue over time. In addition, the Group concludes that the services provided
each month are substantially similar and result in the transfer of substantially similar services to the clients each month. That is,
the benefit consumed by the clients is substantially similar for each month, even though the exact volume of services may vary. Therefore,
the Group concludes that the monthly CA services satisfy the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance
obligation. There is no variable consideration, significant financing components or noncash consideration in the contracts. Accordingly,
based on the output methods, the Group recognizes revenues from CA services on a monthly basis when it satisfies its performance obligations
throughout the contract terms. There is no contract asset that the Group has right to consideration in exchange for its CA services that
the Group has transferred to its clients. Such right is not conditional on something other than the passage of time.
5. Underwriting services: The Group provides underwriting services
by acting as a global coordinator, a bookrunner, a lead manager or an underwriter for the listing applicants in IPOs, in return for underwriting
commission income. The
Group enters a distinct underwriting agreement with its clients for the provision of underwriting services. The underwriting service
is distinct and is identified as one performance obligation. As stipulated in the underwriting agreement, the Company will charge an
underwriting income based on certain percentage of the funds raised in the transaction, either IPO or other fundraising activities. Revenue
from providing underwriting services to clients is recognized at a point in time when the transaction and the performance is completed,
which is generally at the completion of an IPO, i.e., listing of the clients on the Stock Exchange, or the completion of a placement. MAGIC
EMPIRE GLOBAL LIMITED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Disaggregation
of revenue from contracts with clients, in accordance with ASC Topic 606, by major service lines is as follows: SCHEDULE
OF DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CLIENTS
For
the years ended
2020 2021 2022 2022
HK$ HK$ HK$ US$
Revenue:
IPO
Sponsorship services 10,720,000 6,775,000 1,600,000 205,089
FA
and IFA services 1,666,900 4,927,550 5,035,000 645,389
CA
services 6,479,040 5,168,198 4,563,252 584,919
Underwriting
services 1,550,840 — — —
20,416,780 16,870,748 11,198,252 1,435,397 Revenue
disaggregated by timing of revenue recognition for 2022, 2021 and 2020 is disclosed in the table below: SCHEDULE
OF REVENUE DISAGGREGATED BY TIMING OF REVENUE RECOGNITION
For
the years ended
2020 2021 2022 2022
HK$ HK$ HK$ US$
Point in time 13,937,740 11,702,550 6,635,000 850,478
Over
time 6,479,040 5,168,198 4,563,252 584,919
20,416,780 16,870,748 11,198,252 1,435,397 The
Group also selected to apply the practical expedients allowed under ASC Topic 606 to omit the disclosure of remaining performance obligations
for contracts with an original expected duration of one year or less. As of December 31, 2022 and 2021, all contracts of the Group were
with an original expected duration within one year. Other
income Interest
income is mainly generated from savings and time deposits and short-term loans to a company, and is recognized on an accrual basis
using the effective interest method. In
2020 and 2022, the Group successfully applied for funding support from the Employment Support Scheme (“ESS”) under the Anti-epidemic
Fund, set up by the Hong Kong Government, to provide financial support to enterprises to retain their employees who may otherwise be
made redundant and to retain their current employees or even employ more staff when the business revives as soon as the epidemic situation
permits, respectively. For
2020 ESS, the wage subsidies provided to eligible employers under ESS are disbursed in two tranches: (i) the first tranche of subsidies
were used for paying wages of employees from June to August 2020; and (ii) the second tranche for paying wages of employees from September
to November 2020. Employers participating in ESS were required to undertake and warrant that they would: (i) not implement redundancies
during the subsidy period; and (ii) spend all the wage subsidies on paying wages to their employees. For
2022 ESS, the wage subsidies provided to eligible employers under ESS are disbursed in four tranches: (i) the first tranche of 100% subsidies
were used for paying wages of employees in May 2022; (ii) the second tranche of 100% subsidies for paying wages of employees in June
2022; (iii) the third tranche of 70% of subsidies for paying wages of employees in July 2022; and (iv) the fourth tranche of 30% of subsidies
for paying wages of employees in July 2022 after deducting subsidies to be returned to the Government and penalties to be paid (if any). If
an employer fails to use all the subsidies received to pay the wages of his/her employees, the Hong Kong Government will claw back the
unspent balance of the subsidy. If the total number of employees on the payroll in any one month of the subsidy period is less than the
“committed headcount of paid employees”, the employer will have to pay a penalty to the Hong Kong Government. For
the years ended December 31, 2022, 2021 and 2020, the Group recognized government grants of HK$ 216,000
US$ 27,687 ),
nil and
HK$ 702,000 ,
respectively, net in the consolidated statements of operations. As confirmed by the ESS, GCL is not required to return any subsidiary or pay any penalty to the Hong Kong Government. There
was no unfulfilled conditions nor other contingencies attached to the ESS funding. No such government grant was incurred in 2021. Employee
benefits The
principal employee’s retirement scheme is under the Hong Kong Mandatory Provident Fund Schemes Ordinance. Contributions are made
by both the employer and the employee at the rate of 5 30,000 3,845 MAGIC
EMPIRE GLOBAL LIMITED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES During
the years ended December 31, 2022, 2021 and 2020, the total amount charged to the consolidated statements of operations in respect
of the Company’s costs incurred on the Mandatory Provident Fund Scheme were HK$ 317,758
(US$ 40,730 ),
HK$ 421,292 and
HK$ 527,539 ,
respectively. Income
tax MEGL
is not subject to tax on income or capital gains
under the current laws of the British Virgin Islands. In addition, upon payments of dividends by MEGL and the Company’s
subsidiaries in Hong Kong to the Company’s shareholders, no British Virgin Islands withholding tax will be
imposed. GCL,
GIL, MEIL and GFHL are incorporated in and carry trade and business in Hong Kong and are subject to Hong Kong profits tax under Inland
Revenue Department Ordinance. In general, the Inland Revenue Department of Hong Kong has up to |
