TIDMSCGL
RNS Number : 3341S
Sealand Capital Galaxy Limited
01 October 2017
SEALAND CAPITAL GALAXY LIMITED
"Sealand" or the "Company"
2017 Interim Results
2 October 2017
Sealand Capital Galaxy Limited (LSE:SCGL), the social media,
mobile gaming and payment processing group, is pleased to announce
its unaudited Interim Results for the six months ended 30 June
2017.
Financial Highlights
-- Revenue of GBP32.1m
-- Profit before Tax of GBP22.9m
-- Fully diluted EPS of GBP0.205
Operational Highlights
-- Successful acquisition of 100% of the share capital of
Securecom Media Limited ("SCM"), a developer of premium services
associated with Metalk, a social media app commonly used in APAC
region.
-- MOU signed with Guangzhou Ruiyou Information Technologies
Co., Ltd ("Rightyoo") to acquire a majority stake in this provider
of mobile gaming content via the Huawei InTouch platform.
-- Executed an agreement to become a party to a licenced
operator agency agreement of WeChat Pay services in Hong Kong
Enquiries:
Sealand Capital Galaxy
Nicholas Lyth, Non-Executive Director 07769 906 686
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Disclaimer
This announcement contains certain forward-looking statements
that are subject to the risks and uncertainties associated with
Group's business. These statements are made by the Company and its
Directors in good faith based on the information available to them
up to the time of their approval of this announcement but such
statements should be treated with caution due to inherent risks and
uncertainties, including both economic and business factors and/or
factors beyond the Company's control or within the Company's
control where, for example, the Company decides on a change of plan
or strategy. This announcement has been prepared solely to provide
additional information to shareholders to assess the Group's
strategies and the potential for those strategies to succeed. This
announcement should not be relied on by any other party or for any
other purpose.
MANAGEMENT DISCUSSION AND ANALYSIS
Sealand Capital Galaxy Limited, a rapidly developing independent
operator of social media, mobile gaming and payment processing,
today announces its results for the half year ended 30 June
2017.
Business review
Successful acquisition of 100% of the share capital of Securecom
Media Limited ("SCM"), a developer of premium services associated
with Metalk, a social media app commonly used in APAC region.
MOU signed with Guangzhou Ruiyou Information Technologies Co.,
Ltd ("Rightyoo") to acquire a majority stake in this provider of
mobile gaming content via the Huawei InTouch platform.
Executed an agreement to become a party to a licenced operator
agency agreement of WeChat Pay services in Hong Kong.
Financial review
During the six months ended 30 June 2017, profit attributable to
ordinary shareholders was GBP22,926,671 During the six months ended
30 June 2016: loss attributable to ordinary shareholders was
GBP85,844.
During the six months ended 30 June 2017, the revenue was
derived from our social media business amounting to GBP32,109,805.
This increase was in the main attributable to the acquisition of
SCM on 28 February 2017.
Cash balance at 30 June 2017 of GBP459,701.
Event after the reporting period
On 13 July 2017, the Company entered into a subscription
agreement with independent third parties, under which the
independent third parties agreed to subscribe 3,500,000 new
ordinary shares to be issued by the Company at subscription price
of GBP0.025 per share ("1st Placing").
The 1st Placing was completed on 19 July 2017, and 3,500,000 new
ordinary shares of the Company were issued and allotted at the
placing price of GBP0.025 per share. Proceeds of GBP87,500 were
received. Details of 1st Placing are set out, inter alia, in the
announcement of the Company dated 13 July 2017.
On 27 July 2017, the Company entered into a memorandum of
understanding with the majority shareholders in order to acquire at
least 51% of Guangzhou Ruiyou Information Technologies Co., Ltd..
Up to the date of annual report, the transaction is in process.
On 11 August 2017, the Company entered into a subscription
agreement with independent third parties, under which the
independent third parties agreed to subscribe 20,550,000 new
ordinary shares to be issued by the Company at subscription price
of GBP0.060 per share ("2nd Placing").
The 2nd Placing was completed on 17 August 2017, and 20,550,000
new ordinary shares of the Company were issued and allotted at the
placing price of GBP0.060 per share. Proceeds of GBP1,233,000 were
received. Details of 2nd Placing are set out, inter alia, in the
announcement of the Company dated 11 August 2017.
Outlook
The Company intends to restructure the Securecom business with
the objective being to reduce risk whilst generating shareholder
value
It is hoped to shortly migrate the Rightyoo MOU and complete the
acquisition of a majority stake
Wechat Pay represents a significant opportunity for the Company.
It intends to develop this in Hong Kong initially and then expand
to countries in Europe and elsewhere
Results for the Period from 1 January 2017 to 30 June 2017 show
a proft before tax of GBP22,926,671.
The Company had cash in the bank and in hand of GBP459,701 at 30
June 2017. The board does not consider it appropriate to declare a
dividend.
SEALAND CAPITAL GALAXY LIMITED
DIRECTORS' RESPONSIBILITY STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2017
The Directors confirm that to the best of their knowledge:
(a) the condensed set of financial statements, which has been
prepared in accordance with IAS 34 "Interim Financial Reporting",
gives a true and fair view of the assets, liabilities, financial
position and loss of the Group as a whole as required by DTR
4.2.4R;
(b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months of the year and a description of
principal risks and uncertainties for the remaining six months of
the year); and
(c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
By order of the board
Chung Nam Nelson Law
Chairman
29 September 2017
SEALAND CAPITAL GALAXY LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2017
01/01/2017 01/01/2016
to to
30/06/2017 30/06/2016
Note GBP GBP
(Unaudited) (Unaudited)
Revenue 6 32,109,805 -
Other income 6 2,673,436 521
Selling and marketing expenses (10,415,807) -
Employee benefits expenses (91,384) -
Administrative expenses (1,349,379) (86,365)
-------------- -------------
Profit (Loss) before tax 7 22,926,671 (85,844)
Income tax expense 9 - -
-------------- -------------
Profit (Loss) for the period 22,926,671 (85,844)
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss:
Exchange difference on translation of foreign subsidiaries 2,901,816 -
-------------- -------------
Total comprehensive profit (loss) for the period attributable to ordinary
shareholders 25,828,487 (85,844)
============== =============
Loss per share for profit (loss) attributable to ordinary shareholders
Basic and diluted earning (loss) per share (pence) 10 0.205 (0.003)
============== =============
The accompanying notes form part of these financial
statements.
SEALAND CAPITAL GALAXY LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
Note At 30 At 31
June 2017 December 2016
GBP GBP
(Unaudited) (Audited)
Non-current assets
Plant and equipment 11 3,207 -
Goodwill 17 81,328,467 -
-------------- ---------------
81,331,674 -
-------------- ---------------
Current assets
Amounts due from directors 12 1,808 1,808
Prepayments and other receivables 13 625,860 52
Receivable from cash collection agent 14 324,515 -
Bank balances and cash 459,701 457,597
-------------- ---------------
1,411,884 461,127
-------------- ---------------
Current liabilities
Accruals and other payables 717,468 18,499
Deferred revenue 15 52,356,645 -
-------------- ---------------
53,074,113 18,499
-------------- ---------------
Net current (liabilities) assets (51,662,229) 442,628
-------------- ---------------
Total assets 29,669,445 440,958
============== ===============
Capital and reserves
Share capital 16 47,000 3,000
Share premium 16 4,091,350 -
Translation reserve 2,901,816 -
Retained profits (Accumulated losses) 22,629,279 (437,958)
-------------- ---------------
Total equity 29,669,445 440,958
============== ===============
The accompanying notes form part of these financial
statements.
This report was approved by the board and authorised for issue
on and signed on its behalf by;
..............................
Chung Nam Nelson Law
Non-Executive Chairman
29 September 2017
SEALAND CAPITAL GALAXY LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2017
Foreign
Share Exchange (Accumulated losses)
capital Share premium reserve Retained profits Total
GBP GBP GBP GBP GBP
(Note 16)
As at 1 January 2016
(Audited) 3,000 735,350 - (46,553) 691,797
Loss and total
comprehensive loss for the
period - - - (85,844) (85,844)
At 30 June 2016 (Unaudited) 3,000 735,350 - (132,397) 605,953
=========== =============== ============= ============================ ============
As at 1 January 2017
(Audited) 3,000 735,350 - (297,392) 440,958
Profit and total
comprehensive income for
the period - - - 22,926,671 22,926,671
Exchange differences
arising on translation - - 2,901,816 - 2,901,816
----------- --------------- ------------- ---------------------------- ------------
Total comprehensive income
for the period - - 2,901,816 22,926,671 25,828,487
----------- --------------- ------------- ---------------------------- ------------
Placing of shares 1,700 3,398,300 - - 3,400,000
Bonus issue 42,300 (42,300) - - -
At 30 June 2017 (Unaudited) 47,000 4,091,350 2,901,816 22,926,671 29,669,445
=========== =============== ============= ============================ ============
The accompanying notes form part of these financial
statements.
SEALAND CAPITAL GALAXY LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2017
01/01/2017 01/01/2016
to to
30/06/2017 30/06/2016
GBP GBP
(Unaudited) (Unaudited)
OPERATING ACTIVITIES
Profit (Loss) before tax 22,926,671 (85,844)
Adjustment for:
Depreciation of plant and equipment 99 -
Bank interest income (41) (33)
Exchange difference (524,710) -
--------------- -------------
Operating cash flows before movements in working capital 22,402,019 (85,877)
Increase in deposits, prepayment and other receivables (378,284) (25,361)
Decrease in receivable from cash collection agent 1,941,458 -
Decrease in amount due to directors - (268)
Decrease in other payables and accrued expense (6,194,607) (21,662)
Decrease in advertising credits payable (9,316,884) -
Decrease in deferred revenue (10,117,804) -
--------------- -------------
CASH USED IN OPERATIONS AND NET CASH USED IN OPERATING ACTIVITIES (1,664,102) (133,168)
--------------- -------------
INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,693) -
Bank interest received 41 33
Net cash inflow on acquisition of a subsidiary 325,777 -
--------------- -------------
NET CASH USED IN INVESTING ACTIVITIES 323,125 33
--------------- -------------
FINANCING ACTIVITY
Placing of shares 1,400,000 -
--------------- -------------
NET CASH FROM FINANCING ACTIVITY 1,400,000 -
--------------- -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 59,023 (133,135)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD 457,597 733,187
Effect of foreign exchange rate changes (56,919) -
--------------- -------------
CASH AND CASH EQUIVALENTS AT THE OF PERIOD 459,701 600,052
=============== =============
The accompanying notes form part of these financial
statements.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2017
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. The registered office of
the Company is Willow House, Cricket Square, PO Box 709, Grand
Cayman, KY1-1107, Cayman Islands. The Company's nature of
operations is to act as a special purpose acquisition Company.
On 29 February 2017, the Company acquired the entire share
capital of SecureCom Media Holding Limited, as disclosed in note
17. The unaudited consolidated interim financial information set
out in this report represents the consolidated financial statements
of the Company and its newly acquired subsidiary companies
(together referred to as the "Group").
The comparative financial information for the year ended 31
December 2016 is not the Company's full annual accounts for that
period but has been derived from the annual financial statements
for that period. The auditors' report on those accounts was
unqualified and did not include references to any matters to which
the auditors drew attention by way of emphasis without qualifying
their report.
Items included in the consolidated interim financial statements
of the Company are measured using the currency of the primary
economic environment in which the Company operates (the "functional
currency"). The financial statements are presented in Great British
Pound ("GBP"), which is the functional currency of the Company.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
Basis of preparation
The unaudited consolidated interim financial statements for the
six months ended 30 June 2017 have been prepared in accordance with
International Accounting Standard ("IAS") No. 34 "Interim Financial
Reporting". This consolidated interim financial statement does not
include all the notes of the type normally included in an annual
report. This consolidated interim financial statement is to be read
in conjunction with the Company's annual report for the year ended
31 December 2016, and any public announcements made by the Company
during the interim reporting period. The annual financial report
for the year ended 31 December 2016 was prepared in accordance with
International Financial Reporting Standards ("IFRSs") as adopted
for use by the European Union and the accounting policies applied
in this consolidated interim financial statement are consistent
with the polices applied in the annual financial report for the
year ended 31 December 2016 unless otherwise noted.
The preparation of unaudited consolidated interim financial
information in conformity with IAS 34 requires the use of certain
critical accounting estimates. It also requires management to
exercise its judgment in the process of applying the Group's
accounting policies. (see note 4)
These unaudited consolidated financial statements were
authorised for issue by the Company's Board of Directors on 29
September 2017.
3. BASIS OF PREPARATION AND ACCOUNTING POLICIES
Going concern basis
The consolidated interim financial statements have been prepared
on a going concern basis notwithstanding net current liabilities of
GBP51,662,229 as at 30 June 2017.
In the opinion of the directors of the Company, the Group should
be able to maintain itself as a going concern in the coming year by
taking into consideration the proposed arrangements which include,
but are not limited to, the followings:
1. As detailed in note 17, subsequent to 30 June 2017,
GBP1,320,500 was received in cash for issuance of new ordinary
shares to an independent third party;
2. The Group incurred a positive operating cash flows for the
period and expects to continue to generate positive operating cash
flows in the futures; and
3. The deferred revenue of GBP52,356,645 represents prepayment
of advertising service and will be recognised as income rather than
refunded.
Summary of significant accounting policies
Except as described below, the accounting policies applied are
consistent with those of the annual financial statements for the
year ended 31 December 2016, as described in those annual financial
statements.
(a) Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable. Revenue is reduced for estimated customer
returns, rebates and other similar allowances.
Revenue from advertising services is recognised when the related
advertisements are broadcast. Payments received from customers that
are related to services not yet rendered are deferred and disclosed
as deferred revenue in the consolidated statement of financial
position. Upon the expiry of prepaid packages of advertising
services, the corresponding amount of deferred revenue remaining,
if any, will be fully recognised as income in profit or loss.
Advertising credit are earned by customers whenever the
customers chat through Metalk application. Advertising credit can
then be redeemed into cash or utilized through purchase of the
Company's broadcasting plans.
(b) 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.
(c) Subsidiaries
Subsidiaries are all entities over which the Group has control.
The Group controls an entity when the Group 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. Subsidiaries are consolidated from the date on which
control is transferred to the Group. They are deconsolidated from
the date that control ceases.
Intra-group transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Unrealised
losses are also eliminated. When necessary, amounts reported by
subsidiaries have been adjusted to conform to the Group's
accounting policies.
Investments in subsidiaries are accounted for at cost less
impairment. Cost includes direct attributable costs of investment.
The results of subsidiaries are accounted for by the company on the
basis of dividend received and receivable.
(d) Foreign currency
(i) Functional and presentation currency
Items included in the unaudited condensed consolidated interim
financial statements of each of the Group's entities are measured
using the currency of the primary economic environment in which the
entity operates (the "functional currency"). The unaudited
condensed consolidated interim financial statements are presented
in Great British Pound ("GBP"), which the functional currency of
the Company is United States dollars ("US$").
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the annual average
rate for the statement of comprehensive income and closing rate for
the statement of financial position. Foreign currency gains and
losses are recorded in the unaudited condensed consolidated
statement of comprehensive income.
(d) Foreign currency (continued)
(iii) Group companies
The results and financial position of all the Group entities
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
-- assets and liabilities for each statement of financial
position presented are translated at the closing exchange rate at
the date of that statement of financial position;
-- income and expenses for each statement of comprehensive
income are translated at average exchange rates; and
-- all resulting exchange differences are recognised in other comprehensive income (loss).
(e) Plant and equipment
Property, plant and equipment are recorded at historical cost
and are depreciated on a straight-line basis over their estimated
useful lives as follows:
Furniture and fixtures 5 years
Computer and equipment 3 years
The assets' residual values and useful lives are reviewed and
adjusted on a prospective basis, if appropriate, at the end of each
reporting year.
The Group reviews the carrying values of its plant and equipment
for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset or asset group might not be
recoverable. Assets are grouped at the lowest level for which
identifiable cash inflows are largely independent when testing for,
and measuring for, impairment (cash-generating units). In
performing its review of recoverability, the Group compares the
carrying values to either the value in use or fair value less costs
to dispose and if required an impairment charge is recognised in
the consolidated statements of comprehensive income to bring the
carrying value to its recoverable value.
The Group has not applied any new standard or interpretation
that is not yet effective for the current accounting period.
4. ESTIMATES AND JUDGEMENTS
The preparation of an interim financial report in conformity
with IAS 34 requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses on a year to
date basis. Actual results may differ from these estimates.
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 sources of estimation uncertainty
Determining whether goodwill is impaired requires an estimation
of the value in use of the CGUs
to which goodwill has been allocated. The value in use
calculation requires the Group to estimate
the future cash flows expected to arise from the CGUs and a
suitable discount rate in order to calculate the present value.
Where the actual future cash flows are less than expected, a
material impairment loss may arise. As at 30 June 2017, the
carrying amount of goodwill is GBP81,328,467. No impairment loss
has been recognised for the six months ended 30 June 2017.
5. SEGMENT INFORMATION
The Chief Operating Decision Maker ("CODM") has been identified
as the CEO 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.
The CODM assesses the performance based on a measure of profit
after income tax. The CODM considers all business is included in a
single operating segment.
The Group is principally engaged in the advertising services
through Metalk. Information reported to the CODM for the purpose of
resources allocation and performance assessment focuses on the
operation results of the Group as a whole as the Group's resources
are integrated and no discrete operating segment financial
information is available. Accordingly, the Group has identified one
operating segment - provision of advertising services and no
operating segment information is presented.
Information about major customers
For the period ended 30 June 2017, there are no single external
customers contributed more than 10% revenue of the Group.
Geographical information
The Group's operations are mainly carried out in Hong Kong.
Accordingly, no geographical information related to revenue has
been presented.
6. REVENUE AND OTHER INCOME
01/01/2017 01/01/2016
to to
30/06/2017 30/06/2016
GBP GBP
(Unaudited) (Unaudited)
Revenue from provision of
advertising services 32,109,805 -
============= =============
An analysis of the Group's other income is as follows:
01/01/2017 01/01/2016
to to
30/06/2017 30/06/2016
GBP GBP
(Unaudited) (Unaudited)
Bank interest income 41 33
Handling fee income 462,947 -
Exchange gains, net 2,187,276 488
Others 23,172 -
------------- -------------
2,673,436 521
============= =============
7. LOSS BEFORE TAX
01/01/2017 01/01/2016
to to
30/06/2017 30/06/2016
GBP GBP
(Unaudited) (Unaudited)
Loss before tax has been
arrived at after charging:
(a) Staff costs, including
directors' remuneration
Salaries and other benefits 226,830 31,510
============= =============
(b) Other items
Directors' remuneration 110,000 18,000
============= =============
8. EMPLOYEES
01/01/2017 01/01/2016
to to
30/06/2017 30/06/2016
(Unaudited) (Unaudited)
The average number of employees
during the period was made
up as follows:
Directors 4 3
============= =============
Staff(s) - 1
============= =============
9. INCOME TAX EXPENSE
Pursuant to the rules and regulations of the British Virgin
Islands (the "BVI") and Cayman Islands, the Company is not subject
to any income tax in the BVI and Cayman Islands for the six months
ended 30 June 2017.
No provision for Hong Kong profits tax has been made in these
consolidated financial statements as the subsidiary did not have
any assessable profits subject to tax in those jurisdictions. The
profits tax rates for Hong Kong are currently 16.5%.
10. PROFIT PER SHARE
Basic and diluted profit per share
Basic profit per share is calculated by dividing the profit
attributable owners of the Company of GBP22,926,671 (six months
ended 30 June 2016: loss attributable to owners of the Company of
GBP85,844) by the weighted average number of 111,662,983 ordinary
shares (six months ended 30 June 2016: 30,000,000) in issue during
the six months ended 30 June 2017.
Diluted profit per share was the same as basic profit per share
as there were no potential dilutive ordinary shares outstanding for
the six months ended 30 June 2017 and 2016.
11. PLANT AND EQUIPMENT
During the six months ended 30 June 2017, the Group acquired at
cost, plant and equipment of GBP2,693.
12. AMOUNTS DUE FROM DIRECTORS
The amounts are unsecured, interest-free and has no fixed terms
of repayment.
13. PREPAYMENT AND OTHER RECEIVABLES
At 30 At 31
June 2017 December 2016
GBP GBP
(Unaudited) (Audited)
Prepayment 36,156 -
Other receivables 589,704 52
------------- ---------------
625,860 52
============= ===============
14. RECEIVABLE FROM CASH COLLECTION AGENT
At 30 At 31
June 2017 December 2016
GBP GBP
(Unaudited) (Audited)
Receivable from cash collection agent 324,515 -
============= ===============
The Group has engaged a cash collection agent to manage
collection of subscription monies in certain territories and to
provide administrative services to the Group. The receivable from
the cash collection agent represents subscription monies received
on behalf of the Group under the terms of an agency agreement,
after deduction of attributable expenses.
15. DEFERRED REVENUE
Movement of deferred revenue during the period is as
follows:
At 30
June 2017
GBP
(Unaudited)
At acquisition 65,772,862
Gross receipts from the sales of prepaid advertising services 21,992,001
Revenue recognised for provision of advertising services through social media (32,109,805)
Exchange difference (3,298,413)
----------------
52,356,645
================
16. SHARE CAPITAL
Allotted, called up and fully paid (Ordinary shares of GBP0.0001
each)
Number Share Share
of shares capital premium
Notes GBP GBP
As at 31 December
2016 (audited)
and at 1 January
2017 (unaudited) 30,000,000 3,000 735,350
Placing of shares
- 28 February
2017 (a) 17,000,000 1,700 3,398,300
Bonus Issue -
1 June 2017 (b) 423,000,000 42,300 (42,300)
------------- ---------- ------------
As at 30 June
2017 (unaudited) 470,000,000 47,000 4,091,350
============= ========== ============
Notes:
(a) On 28 February 2017, the Company conducted a placing of 7
million shares at 20 pence per share.
In addition, the Company conducted a placing 10 million shares
at 20 pence per share for the acquisition of independent company
"SecureCom Media Holdings Limited" and with cash consideration of 1
million.
(b) On 1 June 2017, the Company increased share capital by the
way of the Bonus Issue. Pursuant to the Bonus issue, 423,000,000
new Ordinary Shares ("Bonus Shares") will be issued, with
Shareholders receiving nine Bonus Shares for every one Ordinary
Share held.
17. BUSINESS COMBINATION
Business combination for the period ended 30 June 2017
On 28 February 2017, the Company entered into a share transfer
agreement with the shareholder of SecureCom Media Holdings Limited
("SecureCom"), a company incorporated in British Virgin Islands, to
acquire 100% equity interest in SecureCom for a total consideration
of GBP3,000,000, which was satisfied by cash payment of
GBP1,000,000 and the issuance of 10,000,000 ordinary shares in the
Company at 20 pence per share. SecureCom is principally engaged in
investment holding and the provision of advertising services
through social media mainly in Hong Kong, People of Republic of
China and Singapore. This acquisition has been accounted for using
acquisition method.
Consideration transferred
GBP
(unaudited)
Consideration shares 2,000,000
Cash consideration 1,000,000
-------------
3,000,000
=============
Acquisition-related costs were insignificant and have been
excluded for the consideration transferred and have been recognised
as an expense for the period ended 30 June 2017, within the
'administrative expenses' in the consolidated statement of profit
or loss.
Assets acquired and liabilities recognised at the date of
acquisition are as follows:
GBP
(unaudited)
Plant and equipment 640
Deposits, prepayments and
other receivables 254,693
Receivable from cash collection
agent 2,382,981
Bank balances and cash 1,325,777
Accruals and other payables (7,202,812)
Advertising credits payable (9,316,884)
Deferred revenue (65,772,862)
--------------
(78,328,467)
==============
Goodwill arising on acquisition:
GBP
(unaudited)
Consideration transferred 3,000,000
Add: net liabilities acquired 78,328,467
-------------
Goodwill arising on acquisition 81,328,467
=============
Goodwill arose in the acquisition of SecureCom because the
consideration paid for the acquisition effectively included amounts
in relation to the benefit of expansion to social media sector.
These benefits are not recognised separately from goodwill because
they do not meet the recognition criteria for identifiable
intangible assets.
None of the goodwill arising on this acquisition is expected to
be deductible for tax purpose.
Net cash inflow on acquisition of SecureCom
GBP
(unaudited)
Consideration transferred (1,000,000)
Cash and cash equivalents
acquired 1,325,777
-------------
325,777
=============
Impact of acquisition on the results of the Group
Included in the Group's profit for the period ended 30 June 2017
is approximately profit of GBP23,434,061 attributable to SecureCom.
Revenue of the Group for the period ended 30 June 2017 includes
approximately GBP32,109,805 attributable to SecureCom.
Had the acquisition of SecureCom been effected on 1 January
2017, the consolidated revenue and profit for the six months ended
30 June 2017 of the Group would have been approximately
GBP142,156,914 and GBP60,461,550 respectively. The pro-forma
information is for illustrative purposes only and is not
necessarily an indication of revenue and results of operations of
the Group that actually would have been achieved had the
acquisition been completed at the beginning of the interim period,
nor is it intended to be a projection of future results.
18. RELATED PARTY TRANSACTIONS
(a) Compensation of key management personnel
The remuneration of members of key management non-director
personnel during the period was as follows:
01/01/2017 01/01/2016
to to
30/06/2017 30/06/2016
GBP GBP
(unaudited) (unaudited)
Short-term benefits 110,000 18,000
============= =============
(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 other significant
related party transactions for the period.
19. EVENT AFTER THE REPORTING PERIOD
i. On 13 July 2017, the Company entered into a subscription
agreement with independent third parties, under which the
independent third parties agreed to subscribe 3,500,000 new
ordinary shares to be issued by the Company at subscription price
of GBP0.025 per share ("1(st) Placing").
The 1(st) Placing was completed on 19 July 2017, and 3,500,000
new ordinary shares of the Company were issued and allotted at the
placing price of GBP0.025 per share. Proceeds of GBP87,500 were
received. Details of 1(st) Placing are set out, inter alia, in the
announcement of the Company dated 13 July 2017.
ii. On 27 July 2017, the Company entered into a memorandum of
understanding with the majority shareholders in order to acquire at
least 51% of Guangzhou Ruiyou Information Technologies Co., Ltd..
Up to the date of annual report, the transaction is in the
process.
iii.
iv. On 11 August 2017, the Company entered into a subscription
agreement with independent third parties, under which the
independent third parties agreed to subscribe 20,550,000 new
ordinary shares to be issued by the Company at subscription price
of GBP0.060 per share ("2(nd) Placing").
The 2(nd) Placing was completed on 17 August 2017, and
20,550,000 new ordinary shares of the Company were issued and
allotted at the placing price of GBP0.060 per share. Proceeds of
GBP1,233,000 were received. Details of 2(nd) Placing are set out,
inter alia, in the announcement of the Company dated 11 August
2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UAAKRBKARRAA
(END) Dow Jones Newswires
October 02, 2017 02:00 ET (06:00 GMT)
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