SEALAND CAPITAL GALAXY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
SEALAND CAPITAL GALAXY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
CONTENTS
Corporate Information
Chairman’s Statement
Directors’ report
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Consolidated Statement of Profit or Loss
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
PAGES
1
2 - 3
4 - 7
8
9 - 10
11
12
13
14
15
Notes to the Consolidated Financial Statements
16 - 43
SEALAND CAPITAL GALAXY LIMITED
CORPORATE INFORMATION
Board of Directors
-
Executive Director:
- Non-executive Director:
Company Secretary
Registered Office
Independent Auditor
Mr Chung Lam Nelson Law (Chairman and Chief Financial Officer)
Mr Zhixuan Li
(appointed on 13 July 2018)
Mr Mark Barney Battles
(appointed on 19 February 2019)
Collas Crill Corporate Services Limited
Willow House, PO Box 709,
Cricket Square, Grand Cayman,
KY1 1107, Cayman Islands
Willow House, PO Box 709,
Cricket Square, Grand Cayman,
KY1 1107, Cayman Islands
PKF Littlejohn LLP
1 Westferry Circus,
London E14 4HD,
United Kingdom
Principal Banker
China Construction Bank (Asia) Corporation Limited
Legal advisers
to English law
Legal advisers
to Cayman Islands law
Hill Dickinson LLP
The Broadgate Tower,
20 Primrose Street,
London EC2A 2EW
Collas Crill & CARD
Willow House, PO Box 709,
Cricket Square, Grand Cayman,
KY1 1107, Cayman Islands
1
SEALAND CAPITAL GALAXY LIMITED
CHAIRMAN’S STATEMENT
Dear Shareholders
I hereby present the annual report of Sealand Capital Galaxy Limited (the “Company” or “Sealand”, together
with its subsidiaries, the “Group”) for the year ended 31 December 2018 (the “Year”).
PERFORMANCE FOR THE YEAR
During the Year, the Group reported a profit of 3,095,472 (2017: loss of £8,027,414) which was mainly due to
the gain on disposal of a subsidiary, SecureCom Media Holdings Limited ("SecureCom") of £3,809,051.
KEY DEVELOPMENTS
Social media (“Metalk”)
The Group invested in SecureCom in 2017 and were very excited about its prospects, but with new competitors
entering the market and offering similar products we felt our investment is better served somewhere else.
Following an extensive review, the Company's directors came to the conclusion that a disposal of SecureCom
was in the best interests of shareholders. Given the competitive environment in which SecureCom operates, the
business would require substantial additional capital in order to remain competitive, whilst the Group's focus
should be on the development of other businesses. The Company entered into a memorandum of understanding
and a legally binding agreement with a buyer in 19 April 2018 and 12 June 2018 respectively to dispose the
entire interest in SecureCom. On 22 June 2018, the disposal was completed and SecureCom left the Group.
Digital marketing and payment
The Group has been developing the payment and marketing solution business, alongside its licensed broker since
early 2018. The Group has also become involved in the sale of some Tencent products during this period.
Outside of the Hong Kong market, the Group is now in discussions with potential business partners to launch its
UK mobile payment gateway business.
Software development and support
During 2018, the Company has initiated another acquisition in Guangzhou Ruiyou Information Technologies
Co., Ltd (“Rightyoo”), an I.T. development and support services provider which focused on the mobile gaming
related sector. The Group has completed the acquisition by mean of a subscription of a 55% interest in Rightyoo.
PROSPECTS
Sealand’s stated goal is to build a portfolio of businesses with the potential to deliver strong growth and
synergies. The Group confirms strategic moves into the above-mentioned businesses which in our view, are well
positioned to deliver those in the future. Further to the existing operations, the Group will keep it pace to build
and enrich its product to match the market needs.
GOING CONCERN
As at 31 December 2018, the Group has cash and cash equivalent balances, net assets and net current assets of
£288,510, £911,281 and £743,356 respectively.
The director’s cash-flow projections for the forthcoming 12 months conclude there will be the need for
additional cash resources to fully implement the business plans. the directors are in discussions with a number of
individuals that may lead to further equity and/or loans being raised. There is no certainty that any such funds
will be forthcoming or the price and other terms being acceptable. The directors have considered the cash-flow
forecasts and stress-tested the assumptions within the cash forecasts. This stress testing included different
funding outcomes. The conclusion reached is that while there will always remain inherent uncertainty with the
cash-flow forecasts, the directors have a reasonable expectation that the Company and Group will have adequate
resources to continue in operational existence for the foreseeable future, and for a period of at least 12 months
from the date of signing these financial statements.
2
SEALAND CAPITAL GALAXY LIMITED
CHAIRMAN’S STATEMENT (CONTINUED)
ACKNOWLEDGEMENTS
We wish to express our appreciation to our shareholders, business partners and suppliers for their support during
the Year. We would like to thank our dedicated staff to their contributions to the success of the Group.
Chung Lam Nelson Law
Chairman
30 April 2019
3
SEALAND CAPITAL GALAXY LIMITED
DIRECTORS’ REPORT
The directors present their report, together with the audited financial statements of Sealand Capital Galaxy
Limited and its subsidiaries for the year ended 31 December 2018.
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 registered office of the Company 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, mobile payment, social media and other IT related businesses.
Results and dividends
The results are set out in the primary statements on pages 12 to 15 of the financial statements. The directors do
not recommend payment of a dividend for the year (2017: nil).
Business review and management report
Overview
During the Year, The Group recorded a consolidated profit attributable to shareholders of 3,060,897 (2017: loss
of £8,027,414). The profit for the year was mainly attributable to the gain on disposal of SecureCom Media
Holding Limited.
Operations
a)
Social media
The Group’s social media business was operated by its wholly owned subsidiary, SecureCom, which was
acquired in February 2017 and disposed of in the Year.
Subsequent to the acquisition date, the Securecom revenue deteriorated significantly. Following an
extensive review, the Company's directors concluded that a disposal of SecureCom was in the best interests
of shareholders, given the competitive environment in which it operated, the business would have required
substantial additional capital to remain competitive, whilst the Group's focus was on the development of
other businesses. The Company entered a memorandum of understanding on 19 April 2018 for the sale of
SecureCom and a legally binding agreement was signed on 12 June 2018 for the sale of their entire interest
in SecureCom. The disposal was completed on 22 June 2018 and a gain of £3,809,051 from the disposal
was recorded.
In 2018, SecureCom contributed a revenue of £1,316,107 and an operating net profit (i.e. excludes the gain
on disposal of SecureCom interests) of £116,091.
b) Digital marketing and payment solution
The Group has signed agreements with authorized business partners to provide marketing service and
digital payment solutions to merchants in mid-2018 and late-2017 respectively. The revenue and the net
operating loss form the sector was £47,948 and £90,312 respectively. Since 2018 was the start up period for
the segment, the operating loss was mainly due to the setup cost and branding cost. The management
believe that the firm base built in 2018 will definite benefit its operation and development in sequent year.
4
SEALAND CAPITAL GALAXY LIMITED
DIRECTORS’ REPORT (CONTINUED)
Business review and management report (continued)
c) Software development and support
On 4 October 2017, the Company, through its wholly-owned subsidiary, SCG Group Limited, entered into
a Subscription Agreement with Guangzhou Ruiyou Information Technologies Co., Ltd ("Rightyoo") and its
shareholders, in which the Group agreed to subscribe for a 55% interest in Rightyoo for the aggregate sum
of RMB1,222,000 (approximately £139,000) (the "Subscription"). After obtaining the approval from the
PRC government regarding the Subscription (as is required when incorporating a company with foreign
investors in PRC) in January 2018, Rightyoo became a subsidiary of the Company.
Rightyoo contributed revenue of £501,934 and a net profit attributable to the shareholders of the Company
of £32,401.
Our Strategy
The Group is committed to achieving long term sustainable growth of its business in order to preserve and
enhance shareholders’ value. The Group is focused on selecting attractive investment opportunities to strengthen
and extend its business scope, and has maintained prudent and disciplined financial management to ensure its
sustainability.
Apart from the diversification of business segment, the Group will diversify its presence from only the APAC
region to also the UK, Europe and United Arab Emirates regions. Advertising agreements have been signed in
both UK and United Arab Emirates before the signing of this report.
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.
Events that have occurred since the end of the financial year are detailed in Note 26 to financial statements.
5
SEALAND CAPITAL GALAXY LIMITED
DIRECTORS’ REPORT (CONTINUED)
Directors
The following directors served during the year ended 31 December 2018:
Mr Chung Lam Nelson Law
Mr Chih Hong Leon Lim*
Mr Nicholas James Lyth**
Mr Frazer Ian Macrae***
Mr Zhixuan Li****
(Chairman and Chief Financial Officer)
(Chief Executive Officer)
(Non-executive Director)
(Non-executive Director)
(Non-executive Director)
* Chih Hong Leon Lim resigned on 29 June 2018.
** Nicholas James Lyth resigned on 13 July 2018.
*** Frazer Ian Macrae resigned on 4 February 2019.
**** Zhixuan Li was appointed on 13 July 2018.
Substantial shareholding
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:
Name
Number of Ordinary Shares
Approximate % Holding
Mr Chung Lam Nelson Law
Mr Tien San Chua
Mr Mau Chung Ng
Directors’ interests
164,500,000
72,000,000
27,500,000
32.64%
14.28%
5.46%
The directors’ interests in the share capital of the company are shown below. All interests are beneficial.
Mr Chung Lam Nelson Law
Mr Chih Hong Leon Lim
164,500,000
10,000,000
Directors’ emoluments are detailed in Note 10 to the financial statements.
Number of ordinary shares at 31 December 2018
Share capital and voting rights
No shares were issued in the Year.
Financial risk management
The company’s financial risk management objective is to minimise, as far as possible, the Company’s exposure
to such risk as detailed in Note 5 to the financial statements.
6
SEALAND CAPITAL GALAXY LIMITED
DIRECTORS’ REPORT (CONTINUED)
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 UK 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 comparing 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 UK 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 UK 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 2019
7
SEALAND CAPITAL GALAXY LIMITED
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the annual report and the financial statements in accordance with
applicable laws and regulations. The directors are required to prepare financial statements for the Group in
accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS”).
The directors must not approve the financial statements unless they are satisfied that they give a true and fair
view of affairs of the Group and of the profit or loss of the Group for that period. In preparing the financial
statements, the directors are required to:
-
Select suitable accounting policies and then apply them consistently;
- Make judgments and accounting estimates that are reasonable and prudent;
-
-
State whether applicable IFRSs as adopted by the European Union have been followed, subject to any
material departures disclosed and explained in the financial statements; and
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Group’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and
enable them to ensure that the financial statements comply with applicable law. They are also responsible for
safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website.
Legislation in the Cayman Islands governing the preparation and dissemination of the accounts and the other
information included in annual reports may differ from legislation in other jurisdictions.
Directors’ Responsibility Statement Pursuant to Disclosure and Transparency Rules
Each of the directors, whose names and functions are listed on page 1, confirm that, to the best of their
knowledge and belief:
-
-
the financial statements prepared in accordance with IFRS as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and loss of the Group and parent company; and
the Annual Report and financial statements, including the Chairman’s Statement, includes a fair review of
the development and performance of the business and the position of the Group and parent company,
together with a description of the principal risks and uncertainties that they face.
By order of the board
Chung Lam Nelson Law
Chairman
30 April 2019
8
SEALAND CAPITAL GALAXY LIMITED
Independent Auditor’s Report to the Members of Sealand Capital Galaxy Limited
Disclaimer of Opinion
We were engaged to audit the group financial statements of Sealand Capital Galaxy Limited (the ‘Group’) for
the year ended 31 December 2018 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 a summary of significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
We do not express an opinion on the accompanying financial statements of the Group. Because of the
significance of the matter described in the Basis for disclaimer of opinion section of our report, we have not been
able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial
statements.
Basis for disclaimer of opinion
As explained in Note 4 ‘Accounting Policies – going concern’ to the financial statements, the Group does not
currently have sufficient funds to meet its working capital needs for the next 12 months and further funding will
be required. The Directors have been unable to provide sufficient appropriate audit evidence to support their
opinion that the going concern basis of preparation is appropriate. We were unable to satisfy ourselves, through
the performance of alternative audit procedures, that additional funds would be secured in the absence of further
funding activities. Consequently, we were unable to confirm the adequacy of the disclosures or conclude on the
adequacy of the going concern basis of preparation, for which the possible effects on the financial statements
could be both material and pervasive.
A significant component in the Group, SecureCom Media Holdings Limited (‘SecureCom’) was disposed of on
12 June 2018. The Consolidated Statement of Profit or Loss included £1,316,051 of revenue and £1,200,016 of
expenses for SecureCom as part of discontinued operations. The net assets of SecureCom were also included
within the calculation of the profit for the year from discontinued operations, net of tax, of £3,925,142 as
reported in the Consolidated Statement of Profit or Loss (see Note 22). We were unable to obtain sufficient
appropriate audit evidence on the amounts reported in the financial statements for the disposal because we were
not provided access to the accounting records for SecureCom. As a result of these matters, we were unable to
determine whether any adjustments might have been found necessary in respect of the revenue, expenses, assets
and liabilities associated with the disposal of SecureCom and the elements making up the Consolidated
Statement of Profit or Loss, Consolidated Statement of Comprehensive Income, Consolidated Statement of
Changes in Equity and Consolidated Statement of Cash Flows.
The Group included £99,200 within other receivables for the year ended 31 December 2018 which related to
Guangzhou Ruiyou Information Technologies Co LTd (‘Rightyoo’) subsidiary acquired during the financial
year. The Directors have not been able to provide sufficient appropriate audit evidence to support the recognition
of that receivable either at the date of acquisition or as at 31 December 2018. The inclusion of the receivable
also impacts the calculated goodwill from the acquisition of Rightyoo which was reported as £157,022 in Note
14 to the financial statements. We were unable to satisfy ourselves, through the performance of alternative audit
procedures, that the receivable is recoverable and that the goodwill, as disclosed in the Consolidated Statement
of Financial Position, is materially correct.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, 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 the 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.
9
SEALAND CAPITAL GALAXY LIMITED
Independent Auditor’s Report to the Members of Sealand Capital Galaxy Limited (continued)
Auditor’s responsibilities for the audit of the financial statements
Our responsibility is to conduct an audit of the Group's financial statements in accordance with International
Standards on Auditing (UK) and to issue an auditor’s report.
However, because of the matter described in the Basis for disclaimer of opinion section of our report, we were
not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial
statements.
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.
Use of our report
This report is made solely to the entity’s members, as a body in accordance with our engagement letter dated 21
December 2018. Our audit work has been undertaken so that we might state to the entity’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 entity and the entity's
members as a body, for our audit work, for this report, or for the opinions we have formed.
Mark Ling
(Engagement Partner)
For and on behalf of PKF Littlejohn LLP
Statutory auditor
1 Westferry Circus
Canary Wharf
London
E14 4HD
Date
10
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2018
Continuing operations
Revenue
Cost of services
Gross profit
Other income
Administrative expenses
Loss before tax
Income tax expense
Note
2018
£
2017
£
8
8
9
11
549,882
(274,706)
275,176
199,024
-
-
-
204
(1,301,382)
(1,112,476)
(827,182)
(1,112,272)
(2,488)
-
Loss for the year from continuing operations
(829,670)
(1,112,272)
Profit/(Loss) for the year from discontinued
operation, net of tax
Profit/(Loss) for the year
Attributable to:
Equity holders of the Company
Non-controlling interests
Profit/(Loss) per share attributable to equity
holders of the Company
Basic and diluted, continuing operations
Basic and diluted, discontinued operations
12
12
3,925,142
(6,915,142)
3,095,472
(8,027,414)
3,060,897
34,575
(8,027,414)
-
3,095,472
(8,027,414)
Pence
(0.002)
0.008
0.006
Pence
(0.002)
(0.016)
(0.018)
The notes to the financial statements form an integral part of these financial statements.
11
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
Profit/(Loss) for the year
3,095,472
(8,027,414)
Note
2018
£
2017
£
Other comprehensive income/(loss)
Other comprehensive income/(loss) to be reclassified to
profit or loss in subsequent periods:
Exchange differences on
operations
translation of foreign
(101,383)
85,628
Exchange differences reclassified to profit or loss
upon disposal of foreign subsidiaries
4,048
-
Net other comprehensive income/(loss) to be reclassified
to profit or loss in subsequent periods and other
comprehensive income/(loss) for the year, net of tax
(97,335)
85,628
Total comprehensive income/(loss) for the year
2,998,137
(7,941,786)
Attributable to:
Equity holders of the Company
Non-controlling interests
Total comprehensive income/(loss) attributable to
equity holders of the Company from:
Continuing operations
Discontinued operations
2,963,043
35,094
(7,941,786)
-
2,998,137
(7,941,786)
(888,076)
3,851,119
(1,100,667)
(6,841,119)
2,963,043
(7,941,786)
The notes to the financial statements form an integral part of these financial statements.
12
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2018
Non-current assets
Property, plant and equipment
Goodwill and intangible assets
Current assets
Amounts due from Directors
Prepayment and other receivables
Trade receivables
Cash and cash equivalents
Current liabilities
Contract liabilities
Trade Payables
Other payables and accrued expense
Current tax liabilities
Net current assets/(liabilities)
Net assets/(liabilities)
Capital and reserves
Share capital
Share premium
Exchange reserve
Accumulated losses
Non-controlling interests
Total Equity
Note
13
14
15
16
16
18
17
19
2018
£
2017
£
10,525
157,400
167,925
-
529,982
38,502
288,510
14,209
-
14,209
1,808
2,060,691
-
1,772,507
856,994
3,835,006
-
22,501
88,631
2,506
4,775,684
-
1,274,282
-
113,638
6,049,966
743,356
(2,214,960)
911,281
(2,200,751)
50,405
5,988,022
(12,226)
(5,263,909)
50,405
5,988,022
85,628
(8,324,806)
762,292
148,989
(2,200,751)
-
911,281
(2,200,751)
The notes to the Financial Statements form an integral part of these financial statements
These Financial Statements were approved by the Board of Directors and authorised for issue on 30 April 2019.
Signed on behalf of the Board of Directors
…………………………
Chung Lam Nelson Law
Chairman
30 April 2019
13
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
Attributable to equity holder of the Company
Share
capital
Share
premium
losses
reserve
Accumulated
Exchange
Total
Non-contro
Total equity
lling
interests
£
£
440,958
(8,027,414)
-
-
At 1 January 2017
3,000
735,350
(297,392)
£
£
£
£
Loss for the year
Exchange differences arising on
translation
Total comprehensive (loss)/
income for the year
-
-
-
-
-
-
(8,027,414)
-
85,628
85,628
(8,027,414)
85,628
(7,941,786)
Placing of shares
5,105
5,615,395
Bonus issue
Costs of issue
42,300
(42,300)
-
(320,423)
-
-
-
-
-
-
5,620,500
-
(320,423)
At 31 December 2017
50,405
5,988,022
(8,324,806)
85,628
(2,200,751)
At 1 January 2018
50,405
5,988,022
(8,324,806)
85,628
(2,200,751)
£
440,958
(8,027,414)
85,628
(7,941,786)
5,620,500
-
(320,423)
(2,200,751)
(2,200,751)
-
-
-
-
-
-
-
-
-
Profit for the year
Exchange differences arising on
translation
Exchange differences reclassified to
profit or loss upon disposal of
foreign subsidiaries
Total comprehensive (loss)/
income for the year
Non-controlling interests arising
from business combination
-
-
-
-
-
-
-
-
-
-
3,060,897
-
3,060,897
34,575
3,095,472
-
-
(101,902)
(101,902)
519
(101,383)
4,048
4,048
-
4,048
3,060,897
(97,854)
2,963,043
35,094
2,998,137
-
-
-
113,895
113,895
At 31 December 2018
50,405
5,988,022
(5,263,909)
(12,226)
762,292
148,989
911,281
The notes to the financial statements form an integral part of these financial statements
14
SEALAND CAPITAL GALAXY LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) before tax
Note
3,097,960
(8,027,414)
2018
£
2017
£
Adjustments for:
Depreciation
Amortisation
Gain on disposal of a subsidiary
Provision for impairment loss on goodwill
Provision for impairment loss on intangible assets
Bank interest income
10,452
-
(3,809,051)
-
-
(283)
4,969
587,553
-
5,997,734
1,586,394
(243)
Operating cash flows before movements in working capital
(700,922)
148,993
Increase in prepayment and other receivables
Decrease in amounts due to a director
Increase in trade receivables
Decrease in contract liabilities
Increase in other payables and accrued expenses
Decrease in trade payables
Income tax expense
414,348
1,808
(35,932)
(1,316,606)
812,670
(446,181)
(3,781)
10,514,918
-
-
(15,572,143)
2,713,701
-
-
Net cash used in operating activities
(1,274,596)
(2,194,531)
CASH FLOWS FROM INVESTING ACTIVITY
Purchase of property, plant and equipment
Purchase of subsidiary
Net cash inflow on acquisition of subsidiaries
Net cash outflow on disposal of a subsidiary
Interest income received
(6,650)
(139,201)
10,475
(37,433)
283
(18,360)
325,884
(55,090)
243
Net cash (used in)/generated from investing activities
(105,876)
252,677
CASH FLOWS FROM FINANCING ACTIVITY
Proceeds from issue of shares, net of expenses
Net cash generated from financing activities
-
-
3,300,077
3,300,077
Net (decrease)/increase in cash and cash equivalents
(1,447,122)
1,358,223
Foreign exchange gain
(36,875)
(43,313)
Cash and cash equivalents at the beginning of the year
1,772,507
457,597
Cash and cash equivalents at the end of the year
288,510
1,772,507
The notes to the financial statements form an integral part of these financial statements
15
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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, PO Box 709, Cricket Square, Grand Cayman, KY1-1107, Cayman Islands.
The Company's nature of operations is to act as a special purpose acquisition Company.
The Group engaged in digital marketing, mobile payment, social media and other IT related businesses.
2.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as adopted for use by the European Union and IFRIC interpretations applicable to
companies reporting under IFRS. The financial statements are presented in Great British Pounds (“£”)
rounded to the nearest Great British Pound and have been prepared under the historical cost convention..
The financial statements have been prepared on a going concern basis.
3.
STANDARDS AND INTERPRETATIONS
(i)
New and amended standards adopted by the Group
At the date of this report, the Group has applied the following standards and amendments for the first
time for its annual reporting period commencing 1 January 2018:
Standard / Interpretation
Title
IFRS 9
IFRS 15
IFRIC 22
Financial Instruments
Revenue from Contracts with Customers
Currency Transactions and Advance Consideration
The application of the new amendments to IFRSs and Interpretations in the current year had no
material impact on the Group’s financial performance and positions for the current and prior years
and/or on the disclosures set out in these Group financial statements, except as noted below.
16
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
3.
STANDARDS AND INTERPRETATIONS (CONTINUED)
(i)
New and amended standards adopted by the Group (continued)
IFRS 15 establishes a comprehensive framework for determining whether, how much and when
revenue is recognised. It replaced IAS 18 Revenue and related interpretations. Under IFRS 15,
revenue is recognised when a customer obtains control of the goods or services. Determining the
timing of the transfer of control over time requires judgement. The Group has adopted IFRS 15 using
the cumulative effect method (without practical expedients), with the effect of initially applying this
standard recognised at the date of initial application (i.e. 1 January 2018). Accordingly, the
information presented for 2017 has not been restated – i.e. it is presented, as previously reported,
under IAS 18 and related interpretations. Additionally, the disclosure requirements in IFRS 15 have
not generally been applied to comparative information. For additional information about the Group’s
accounting policies relating to revenue recognition, see Note 4a.
(ii) New and amended standards and interpretations issued but not yet effective or not yet endorsed for
the financial year beginning 1 January 2018 and not early adopted.
At the date of authorisation of these Financial Statements, the Group has not applied the following
new and revised IFRSs that have been issued but are not yet effective and (in some cases) have not
yet been adopted by the EU. The Group intends to adopt these standards, if applicable, when they
become effective.
Standard / Interpretation
IFRS 16
IFRIC 23
Title
Leases
Uncertainty over Income Tax Treatments
Amendments to IFRS 3
Definition of a Business
Amendments to IFRSs
Annual Improvements to IFRS Standards 2015–2017 Cycle1
The directors of the Company consider that the application of the other new and amendments to
IFRSs are unlikely to have a material impact on the Group’s financial position and performance as
well as
disclosure, except as noted below:
17
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
3.
STANDARDS AND INTERPRETATIONS (CONTINUED)
(ii) New and amended standards and interpretations issued but not yet effective or not yet endorsed for
the financial year beginning 1 January 2018 and not early adopted. (Continued)
IFRS 16 Leases
IFRS replaces the current guidance in IAS 17 – ‘Leases’ and is a far-reaching change in accounting
by lessees in particular. Under IAS 17, lessees were required to make a distinction between a finance
lease (on balance sheet) and an operating lease (off balance sheet). IFRS 16 requires lessees to
recognise a lease liability reflecting future lease payments and a ‘right-of-use asset’ for virtually all
lease contracts.
IFRS 16 includes an optional exemption for certain short-term leases and leases of low-value assets;
however, this exemption can only be applied by lessees. For lessors, the accounting remains
substantially unchanged. IFRS 16 provides updated guidance on the definition of a lease (as well as
the guidance on the combination and separation of contracts); under IFRS 16, a contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period
of time in exchange for consideration.
The standard is effective for annual periods beginning on or after 1 January 2019. The Group is
currently assessing the impact of IFRS 16.
Under IAS 17, the Group has already recognised an asset and a related finance lease liability for
finance lease arrangement where the Group is lessee. The application of IFRS 16 may result in
potential changes in classification of these assets depending on whether the Group presents
right-of-use assets separately or within the same line item at which the corresponding underlying
assets would be presented if they were owned.
Other than certain requirements which are also applicable to lessor, IFRS 16 substantially carries
forward the lessor accounting requirements in IAS 17, and continues to require a lessor to classify a
lease either as an operating lease or finance lease.
Furthermore, extensive disclosures are required by IFRS 16.
As at 31 December 2018, the Group has non-cancellable operating lease commitments of £44,922, as
disclosed in Note 23. A preliminary assessment indicates that these arrangements will meet the
definition of a lease under IFRS 16, and hence it is estimated the Group will recognise a right-of-use
asset and a corresponding liability in respect of all these leases approximated to the abovementioned
amount. In addition, the application of new requirements may result changes in measurement,
presentation and disclosure as indicated above, (i.e. depreciation on right-of-use asset over the lease
term of each lease. The directors have not yet completed their evaluation.
18
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4.
SIGNIFICANT ACCOUNTING POLICIES
a)
Revenue recognition
Revenue is recognised to depict the transfer of services to customers in an amount that reflects the
consideration to which the Group expects to be entitled in exchange for those goods or services.
Specifically, the Group uses a 5-step approach to revenue recognition:
•
•
•
•
•
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the contract; and
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
Under IFRS 15, the Group recognises revenue when (or as) a performance obligation is satisfied, i.e.
when “control” of the goods or services underlying the particular performance obligation is
transferred to customers.
A performance obligation represents a good or service (or a bundle of goods or services) that is
distinct or a series of distinct goods or services that are substantially the same.
Control is transferred over time and revenue is recognised over time by reference to the progress
towards complete satisfaction of relevant performance obligation if one of the following criteria is
met:
•
•
•
the customer simultaneously receives and consumes the benefits provided by the entity’s
performance as the Group performs;
the Group’s performance creates and enhances an asset that the customer controls as the Group
performs; or
the Group’s performance does not create an asset with an alternative use to the Group and the
Group has an enforceable right to payment for performance completed to date.
Otherwise, revenue is recognised at a point in time when the customer obtains control of the distinct
good or service.
A contract asset represents the Group’s right to consideration in exchange for services that the
Group has transferred to a customer that is not unconditional. It is assessed for impairment in
accordance with IFRS 9. In contrast, a receivable represents the Group’s unconditional right to
consideration, i.e. only the passage of time is required before payment of that consideration is due.
A contract liability represents the Group’s obligation to transfer services to a customer for which the
Group has received consideration (or an amount of consideration is due) from the customer.
A contract asset and a contract liability relating to a contract are accounted for and presented on a
net basis.
Revenue from marketing services is recognized when the performance obligation is satisfied
Interest income from a financial asset is accrued on a time basis using the effective interest method
19
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b)
Basis of consolidation
(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.
(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.
(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.
20
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c)
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 “£”), US Dollar and Hong Kong Dollar.
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
the Statement of
in foreign currencies, are recognised
Comprehensive Income.
in
(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).
21
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d)
Goodwill and intangible assets
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of
acquisition of the business less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating
units (or groups of cash-generating units) that is expected to benefit from the synergies of the
combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or
more frequently when there is indication that the unit may be impaired. For the goodwill arising on
an acquisition in a reporting period, the cash-generating unit to which goodwill has been allocated is
tested for impairment before the end of that reporting period. If the recoverable amount of the
cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce
the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a
pro rata basis based on the carrying amount of each asset in the unit. Any impairment loss for
goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not
reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in
the determination of the amount of profit or loss on disposal.
Intangible assets - Operating license agreement
The operating license agreement was arising from the acquisition of SecureCom made in 2017
which represent the operating license right on the Metalk application, a social media platform.
Operating license agreements acquired in business a combination are recognised initially at fair
value at the acquisition date. After initial recognition, those that have finite useful lives and are
subsequently carried at cost less accumulated amortisation and any impairment losses. Amortisation
for Operating license agreements is provided on the straight-line basis over the estimated useful life
of 37 months. Intangible assets, with finite and indefinite useful lives, are tested for impairment as
described below in Note 4(f).
22
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
4.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e)
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:
Office equipment
Leasehold improvement
36 - 60 months
lower of 36 months and 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.
f)
Impairment of non-financial assets
Goodwill and intangible assets with indefinite useful lives or those not yet available for use are not
subject to amortisation and are tested for impairment at least annually, irrespective of whether there
is any indication that they are impaired. All other assets are tested for impairment whenever there are
indications that the asset’s carrying amount may not be recoverable. An impairment loss is
recognised as an expense immediately for the amount by which the asset’s carrying amount exceeds
its recoverable amount. Recoverable amount is the higher of fair value, reflecting market conditions
less costs of disposal, and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessment
of time value of money and the risk specific to the asset. For the purposes of assessing impairment,
where an asset does not generate cash inflows largely independent from those from other assets, the
recoverable amount is determined for the smallest group of assets that generate cash inflows
independently (i.e., a cash-generating unit). As a result, some assets are tested individually for
impairment and some are tested at cash-generating unit level. Goodwill in particular is allocated to
those cash-generating units that are expected to benefit from synergies of the related business
combination and represent the lowest level within the Group at which the goodwill is monitored for
internal management purpose and not be larger than an operating segment.
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.
23
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
g)
Financial instruments
Financial assets and liabilities are recognised in the Group’s consolidated statement of financial
position when the Group becomes a party to the contractual provisions of the instrument. The Group
currently does not use derivative financial instruments to manage or hedge financial exposures or
liabilities.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are included in current assets, except for maturities greater than
12 months after the end of the reporting period. These are classified as non-current assets. The
Group’s receivables comprise prepayments and other receivables in the Statement of Financial
Position.
h)
Impairment of financial assets
The Company and Group assesses at each reporting date whether a financial asset is impaired an will
recognise the impairment loss immediately through the consolidated statement of comprehensive
loss.
i)
Trade debtors
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.
Starting from 1 January 2018, the Group applied simplified approach to provide the expected credit
losses prescribed by IFRS 9. The impairment methodology is set out in Note 4 and Note 5(iv)
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. Details of the credit risk assessment are included in Note 5(iv).
j)
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with banks.
24
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
k)
Current and deferred income tax
Income tax comprises current and deferred tax. Current income tax is recognised in the Income
Statement, except to the extent that it relates to items recognised directly in equity. In this case the
tax is also recognised directly in other comprehensive income or directly in equity, respectively.
Current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Company’s subsidiaries and associates operate
and generate taxable income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the Consolidated
Financial Statements. However, the deferred tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that, at the time
of the transaction, affects either accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end of
the reporting period and are expected to apply when the related deferred income tax asset is realised,
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.
l)
Leases
Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are
accounted for as operating leases. Rentals payable under operating leases are charged to profit or loss
on a straight-line basis over the term of the relevant lease.
m) Going concern
The director’s cash-flow projections for the forthcoming 12 months conclude there will be the need
for additional cash resources to fully implement the business plans. the directors are in discussions
with a number of individuals that may lead to further equity and/or loans being raised. There is no
certainty that any such funds will be forthcoming or the price and other terms being acceptable. The
directors have considered the cash-flow forecasts and stress-tested the assumptions within the cash
forecasts. This stress testing included different funding outcomes. The conclusion reached is that
while there will always remain inherent uncertainty with the cash-flow forecasts, the directors have a
reasonable expectation that the Company and Group will have adequate resources to continue in
operational existence for the foreseeable future, and for a period of at least 12 months from the date
of signing these financial statements.
25
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
n)
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
o)
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.
5.
FINANCIAL RISK MANAGEMENT
Financial risk factors
The Group’s activities expose it to a variety of financial risks as below.
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.
(i)
Interest rate risk
The Group has floating rate financial assets in the form of deposit accounts with major banking
institutions; and, it is not currently subjected to any other interest rate risk.
Any change in interest rate for interest bearing bank balances at the reporting date would not have
a material impact in profit or loss and as such is not disclosed.
(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
on-going basis by senior management of the Group.
26
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
5.
FINANCIAL RISK MANAGEMENT (CONTINUED)
(ii)
Foreign exchange risk (continued)
The following table demonstrates the sensitivity at the end of the reporting period to a reasonably
possible change in the Hong Kong dollar (“HKD”) with all other variables held constant, of the
Group’s profit/(loss) before tax (due to changes in the fair value of monetary assets and
liabilities).
HKD strength/weakened against GBP for 1 per
cent.
(iii)
Liquidity risk
Increase/(Decrease)
in profit before tax
2018
£
2,806 / (2,806)
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated
with financial liabilities. The Group manages liquidity risk by maintaining sufficient cash
facilities to meet the operating requirements of the business and investing excess funds in highly
liquid short-term investments. The responsibility for liquidity risk management rests with the
Board of Directors. Alternatives for sourcing our future capital needs include our existing cash
position, the issue of equity instruments and external borrowing. These alternatives are evaluated
to determine the optimal mix of capital resources for our capital needs.
Financial liabilities of the Group comprise trade and other payables. As at 31 December 2018,
£84,326 was repayable on demand and £2,757 was repayable within 3 months.
(iv)
Credit risk
Credit risk is the risk of loss associated with the counterparty’s inability to fulfil its obligations.
The Group’s credit risk is primarily attributable to trade receivables, other receivables and cash
and bank balances with the maximum exposure being the reported balance in the consolidated
statement of financial position.
The Group’s significant debtors are the refundable deposit of £199,918 paid to a vendor. In the
view that the vendor is still providing services to the Group and without any defraud, the Group
consider the credit risk is low. The maximum exposure of the receivable from the vendor is
included the other receivables mentioned in Note 16 (b). Further, the Group considers the credit
ratings of banks in which it holds funds in order to reduce exposure to credit risk.
27
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
5.
FINANCIAL RISK MANAGEMENT (CONTINUED)
(v)
Market risk
Market risk is the risk that changes in market prices, such as interest rates and foreign exchange
rates, will affect the Group's income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return. The Group does not hedge these risk
exposures due to the lack of any market to purchase financial instruments.
(vi)
Capital risk management
The Company manages its capital to ensure that the Company will be able to continue as a going
concern while maximising the return to shareholder through the optimisation of the debt and
equity balances.
The capital structure of the Company consists of debt, which includes equity attributable to the
owners of the Company, comprising share capital, share premium and accumulated losses.
The directors of the Company review the capital structure regularly. As part of this review, the
directors of the Company consider the cost of capital and the associated risks, and take
appropriate actions to adjust the Company’s capital structure. The overall strategy of the
Company remained unchanged.
6. CRITICAL ACCOUNTING JUDGEMENTS AND KEY UNCERTAINTIES OF ESTIMATION
UNCERTAINTY
The preparation of the Group’s financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their
accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions
and estimates could result in outcomes that could require a material adjustment to the carrying amounts of
the assets or liabilities affected in the future.
The estimates and underlying assumption are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.
Key source of estimation uncertainty
Valuation of identifiable assets and liabilities acquired through business combinations
The Group applies the acquisition method to account for business combinations, which requires the Group
to recognise assets acquired and liabilities assumed at their fair values on the date of acquisition.
Significant judgement is used to estimate the fair values of the assets and liabilities acquired, including
estimating future cash flows from the acquired business, determining appropriate discount rates and other
assumptions. The acquisitions of RightYoo is accounted for as business combination and details of the
fair value of the assets acquired and liabilities recognised at the date of acquisitions are set out in Note 20.
28
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
6. CRITICAL ACCOUNTING JUDGEMENTS AND KEY UNCERTAINTIES OF ESTIMATION
UNCERTAINTY (CONTINUED)
Impairment of goodwill and intangible assets
The Group determined whether goodwill is impaired at least on an annual basis, while for the acquired
intangible assets with finite useful lives, they are tested for impairment whenever there are indications that
the asset’s carrying amount may not be recoverable. This requires an estimation of the value in use of the
cash-generating units to which goodwill and the acquired intangible assets are allocated. Estimating the
value in use requires the Group to estimate the future cash flows expected to arise from the
cash-generating unit and a suitable discount rate in order to calculate present value of those cash flows.
Details of goodwill and intangibles assets are set out in Note 14.
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 for the year ended 31 December 2018 as follows:
(a)
(b)
(c)
The social media segment includes sales of secured social communication and advertising product
through Metalk;
The digital marketing and payment segment includes services on enlisting merchants to mobile
payment gateways and providing digital advertising services; and
Software development and support segment includes sales and distribution of mobile game and all
other I.T. related development and support services operated under Rightyoo.
For the year ended 31 December 2018
Social media
Digital marketing
and payment
£
£
Software
development
and support
£
Unallocated
Total
£
£
Revenue
1,316,607
47,948
501,934
-
1,866,489
Segment
profit/(loss)
Assets
Liabilities
3,925,142*
(90,312)
66,976
(806,334)
3,095,472*
-
-
298,855**
363,797
368,267
1,024,919**
13,597
40,635
45,406
113,638
*
**
The amount includes a gain on disposal of a subsidiary amounting to £3,809,051
The amount includes a goodwill amounting to £157,400
29
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
7.
SEGMENT INFORMATION (CONTINUED)
Social media
£
Digital
marketing
and payment
£
Software
development
and support
£
Unallocated
Total
£
£
Other segment information:
Depreciation
Amortisation
Provision for impairment
losses on goodwill
Provision for impairment
losses on intangible
assets
122
623
-
-
-
-
-
-
-
-
-
-
For the year ended 31 December 2017
Social media
£
Digital
marketing and
payment
£
Software
development
and support
£
Unallocated
Total
£
£
Revenue
4,491,997
-
-
-
Segment loss
6,915,142*
49,510
8,051
1,054,711
8,027,414*
Assets
Liabilities
2,079,434
-
200,482
1,569,299
3,849,215
5,920,553
14,225
7,193
107,995
6,049,966
*
includes provision for impairment loss on goodwill and intangible assets of £5,997,734 and
£1,586,394 respectively.
30
9,338
10,083
-
-
-
-
-
-
-
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
7.
SEGMENT INFORMATION (CONTINUED)
For the year ended 31 December 2017 (continued)
Other segment information:
Depreciation
Amortisation
Provision for impairment
losses on goodwill
Provision for impairment
losses on intangible
assets
Geographical information:
Revenue by Geography
Mainland China
Hong Kong
Republic of Singapore
Malaysia
Others
Social media
£
229
587,553
5,997,734
1,586,394
Digital
marketing
and payment
£
Software
development
and support
£
-
-
-
-
-
-
-
-
Unallocated
Total
£
£
4,740
4,969
-
-
-
-
5,997,734
1,586,394
2018
£
1,346,107
357,769
50,118
67,190
45,306
2017
£
2,878,653
1,128,448
178,327
147,459
159,110
1,866,490
4,491,997
Included within the above are amounts of £549,882 relating to continuing operations. Of this balance
£501,934 was derived in China and £47,948 in Hong Kong.
The Group's non-current assets are immaterial. Accordingly, no geographical information related to
non-current assets has been presented.
Information about major customers
For the year ended 31 December 2018, there are no single external customers contributed more than 2%
revenue of the Group.
31
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
8. REVENUE AND OTHER INCOME
REVENUE
Advertising services
Software development and support
Commission income
OTHER INCOME
Bank interest income
Government subsidy
License fee
Others
Handling fee income
2018
£
1,360,841
501,934
3,714
2017
£
4,491,997
-
-
1,866,489
4,491,997
283
45,344
143,364
10,036
-
243
-
-
-
119,368
199,027
119,611
The above revenue breakdown includes both continued and discontinued operations.
9. LOSS BEFORE TAX
Loss before tax has been arrived at after charging:
Depreciation
Exchange gains, net
Amortisation
Provision for impairment losses on goodwill
Provision for impairment losses on intangible assets
Staff cost (include Director Remuneration)
Audit fees
-
-
for the year
under provision for prior year
10. EMPLOYEES
The average number of employees during the year was made up as follows:
Directors
Staff
Staff costs, including directors’ costs comprise:
Wages, salaries and other staff costs
32
2018
£
10,452
65,242
-
-
-
491,512
55,071
15,965
2017
£
4,969
786,010
2,173,947
5,997,734
1,586,394
439,846
66,691
-
2018
2017
4
10
4
5
2018
£
491,512
2017
£
439,846
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
10. EMPLOYEES (CONTINUED)
Key Management Remuneration
The directors’ emoluments in respect of qualifying services, which all related to short-term employee
benefits, were as follows:
Chung Lam Nelson Law
Chih Hong Leon Lim
Ingvar Angus Sigurd Irvine
Nicholas James Lyth
Frazer Ian McRae
Zhixuan Li
2018
£
180,000
30,000
-
22,355
42,000
19,645
2017
£
150,000
50,000
18,000
31,500
3,968
-
294,000
253,468
No pension contributions were made on behalf of the directors of the Company.
No director currently has any share options and no share options were granted to or exercised by a Director
during the year (2017: Nil).
11.
INCOME TAX
No provision for profits tax has been made in these consolidated financial statements as the Group did not
have any assessable profits. The profits tax rate for Hong Kong is currently at 8.25% (2017: 16.5%) of the
first HK$2,000,000 and 16.5% (2017:16.5%) of the remaining estimated assessable profits for the year,
taking into account a reduction granted by the Hong Kong SAR Government of 75% of the tax payable for
the year of assessment 2017-18 subject to a maximum reduction of HK$$30,000 for each business (2017: a
maximum reduction of HK$$20,000 was granted for the year of assessment 2016-17 and was taken into
account in calculating the provision for 2017).
A reconciliation of income tax expense applicable to the loss before taxation at the statutory tax rate of
Hong Kong to the income tax expense at the effective tax rate of the Group are as follows:
Loss before tax
Tax at the statutory tax rate of 16.5 per cent.
(2017 — 16.5 per cent.)
Effect of different tax rates in other jurisdictions
Income not subject to tax
Expenses not deductible for tax
Benefits from tax losses/temporary differences previously
unrecognized
Tax losses/temporary differences not recognized for the year
Others
2018
£
3,097,960
2017
£
(8,027,414)
511,163
(1,324,523)
7,323
(628,536)
141,341
(25,109)
8,099
(11,793)
(34,580)
(34)
1,572,610
(213,473)
-
-
2,488
-
Potential deferred tax assets of approximately £87,011 (2017: 11,065,049) have not been recognised due to
uncertainty as to when taxable profits will be generated.
33
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
12. PROFIT/(LOSS) PER SHARE
Basic and diluted profit/(loss) per share
Basic profit per share is calculated by dividing the profit attributable to the owners of the Company of
£3,060,897 (2017: loss attributable to owners of the Company of £8,027,414) by the weighted average
number of 504,050,000 ordinary shares (2017: 454,154,384) in issue during year ended 31 December
2018.
Diluted profit/(loss) per share was the same as basic profit per share as there were no potential dilutive
ordinary shares outstanding for the years ended 31 December 2018 (2017: Same).
13. PROPERTY, PLANT AND EQUIPMENT
Office Equipment
At 1 January 2018
Additions
Acquisition of subsidiaries
Depreciation for the year
Eliminated on disposal of subsidiaries
Exchange differences
At 31 December 2018
At 1 January 2017
Additions
Acquisition of subsidiaries
Depreciation for the year
Exchange differences
At 31 December 2017
£
£
3,621
6,650
-
(3,139)
(253)
123
7,002
-
3,847
641
(847)
(20)
3,621
Leasehold
Improvement
£
Total
£
10,588
-
-
(7,313)
-
248
3,523
14,209
6,650
-
(10,452)
(253)
371
10,525
£
£
-
14,513
-
(4,121)
196
10,588
-
18,360
641
(4,968)
176
14,209
34
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
14. GOODWILL AND INTANGIBLE ASSETS
At 1 January 2018
Acquisition of subsidiaries
Exchange realignment
At 31 December 2018
At 1 January 2017
Acquisition of subsidiaries
Amortisation for the year
Impairment for the year
Exchange realignment
Goodwill
£
Intangible
assets
£
Total
£
-
157,022
378
157,400
-
-
-
-
-
157,022
378
157,400
£
£
£
-
6,218,231
-
(5,997,734)
(220,497)
-
2,253,869
(587,553)
(1,586,394)
(79,922)
-
8,472,100
(587,553)
(7,584,128)
(300,419)
At 31 December 2017
-
-
-
For year 2018, Goodwill and intangible assets was arising from the subscription of the 55% equity interest
in Guangzhou Ruiyou Information Technologies Co., Ltd ("Rightyoo").
For year 2017, Goodwill and intangible assets was arising from the acquisition of the 100% equity interest
in SecureCom Media Holdings Limited. Full provision for impairment losses was made as at 31 December
2017.
15. AMOUNTS DUE FROM DIRECTORS
The amounts were unsecured, interest-free and have no fixed terms of repayment.
35
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
16. TRADE RECEIVABLE, PREPAYMENT AND OTHER RECEIVABLES
a)
Trade receivables
The average credit period granted to all customers within 90 days. As at 31 December 2018, based
on the invoice dates, all trade receivables are within the 30 days aging group. As at 31 December
2017, there were no trade receivables.
As at the year ended date, none of trade receivables are past due and not impaired at reporting date.
The directors of the Company considered that the ECL for trade receivables is insignificant as at 31
December 2018.
b)
Prepayment and other receivables
Prepayment
Receivable from cash collection agent (Note
a)
Other receivables (Note b)
2018
£
2017
£
1,230
-
25,227
1,695,523
528,752
339,941
529,982
2,060,691
Note:
(a)
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.
(b)
The directors of the Company considered that the ECL on other deposit is insignificant as at 31
December 2018.
36
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
17. TRADE PAYABLES, OTHER PAYABLE AND ACCRUED EXPENSES
a)
Trade payables
The following is an aged analysis of trade payables presented based on the invoice date at the end of
each reporting period:
Within 30days
Over 180 days but less than 1 year
b)
Other payables and accrued expenses
Advertising credits payable *
Other payables and accrued expenses
2018
£
11,084
11,417
22,501
2018
£
-
88,631
2017
£
-
-
-
2017
£
436,672
837,610
88,631
1,274,282
*
Advertising credits payable can either be redeemed in cash or converted into broadcasting
units through purchase of one of SecureCom Group’s SecureChannel broadcasting plans. The
balance as at the reporting date represents the maximum exposure for cash redemption.
18. CONTRACT LIABILITIES
Contract liabilities represents payments received from customers that are related to services not yet
rendered.
Movement of deferred revenue during the period is as follows:
2018
£
2017
£
4,775,684
-
-
(1,316,606)
-
(3,507,104)
48,026
-
2,370,329
7,205,766
(4,491,997)
(68)
-
(308,346)
-
4,775,684
At 1 January
At acquisition (Note 20)
Addition
Revenue recognized
Others
Disposal of subsidiary
Exchange realignment
At 31 December
37
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
19.
SHARE CAPITAL
The allotted, called up and fully paid Ordinary shares were of £0.0001 each. There was no movement in
share capital during the years ended 31 December 2018. The movement in share capital during the year
ended 31 December 2017 was as follows:
At 1 January 2017
Placing of shares – 28 February 2017
Bonus Issue – 1 June 2017
Placing of shares – 19 July 2017
Placing of shares – 17 August 2017
Placing of shares – 25 October 2017
At 31 December 2017
Number of
shares
Share
capital
£
Notes
a
b
c
d
e
30,000,000
3,000
17,000,000
423,000,000
3,500,000
20,550,000
10,000,000
1,700
42,300
350
2,055
1,000
504,050,000
50,405
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 £1,000,000.
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") were issued, with Shareholders
receiving nine Bonus Shares for every one Ordinary Share held.
c) On 19 July 2017, the Company conducted a placing of 3.5 million shares at 2.5 pence per share.
d) On 17 August 2017, the Company conducted a placing of 20.55 million shares at 6 pence per share.
e) On 25 October 2017, the Company conducted a placing of 10 million shares at 9 pence per share.
f) There was no share capital movement for the year ended 31 December 2016.
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.
38
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
21. BUSINESS COMBINATIONS
Business combination for the year ended 31 December 2018
In October 2017, the Company entered into a Subscription Agreement with Rightyoo and its shareholders,
in which the Company agreed to subscribe for a 55% interest in Rightyoo for the aggregate sum of
RMB1,222,000 (approximately GBP 139,201) (the "Subscription"), which was satisfied by a cash payment.
Rightyoo is PRC-incorporated mobile games developer and distributor which has been active since 2015.
It primarily develops apps for the personalisation of user mobile devices, as well as being a distributor and
publisher for third party developers. This acquisition has been accounted for using the acquisition method.
The acquisition was completed on 9 January 2018.
Acquisition-related costs were insignificant and have been excluded from the consideration transferred and
have been recognised as an expense for the year 2018, within the “administrative expenses” in the
consolidated statement of profit or loss.
The fair value of the identifiable assets acquired and liabilities recognised at the date of acquisition as
follows:
Plant and equipment
Trade receivables
Prepayment and other receivables
Cash and cash equivalents
Trade payables
Other payables and accrued expense
Profit tax payable
Goodwill and intangible assets
Add: Fair value of the subscribed shares
£
-
775
461,537
10,475
(470,726)
(41,391)
(3,798)
157,022
113,894
139,201
253,095
The fair value of the identifiable assets acquired and liabilities recognized at the date of acquisition was
assessed by an independent professional valuer under a detailed purchase price allocation (the ‘PPA‘)
exercise.
Goodwill arose in the above business combination as the cost of combination included a control premium.
In addition, the consideration paid for the combination effectively included amounts in relation to the
benefit of expected synergies, revenue growth, future market development and the assembled workforce.
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 the above acquisition is expected
to be deductible for tax purposes.
Included in the Group's revenue and loss for the year ended 31 December 2018, revenue of approximately
£501,934 and profit of approximately £76,793 were attributable to Rightyoo.
The acquisition of Righyoo was executed on 9 January 2018. Due to the proximity to 1 January 2018
management have consolidated the results of Rightyoo from this date as they believe that the consolidated
revenue and profit for the six months ended 30 June 2018 of the Group would have not been any material
difference.
39
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
22. DISCONTINUED OPERATIONS
The Group’s social media business was operated by its wholly owned subsidiary, SecureCom Media
Holding Limited (“SecureCom”). Due to the deterioration in SecureCom’s performance, the Group had
entered a memorandum of understanding on 19 April 2018 and a legally binding agreement on 12 June
2018 with a buyer to dispose of the entire interest in SecureCom. On 22 June 2018, the disposal was
completed and the social media business is treated as a discontinued operating.
An analysis of the discontinued operation is as follows:
a) Net loss on disposal of discontinued operations
Operating profit/(loss) from discontinued operations
Gain on disposal of a subsidiary
b) Operating profit/(loss) from discontinued operations
Revenue
Other income
Selling and marketing expenses
Administrative and other operating expenses
Profit/(loss) before income tax
Income tax charge
Profit/(loss) for the period
c) Profit on disposal of interest
Proceeds from disposal
Add: Net liabilities disposed
Eliminate translation reserve
Profit on disposal of interest
2018
£
116,091
3,809,051
2017
£
(663,435)
-
3,925,142
(663,435)
2018
£
1,316,607
3
(765,178)
(435,341)
2017
£
1,629,688
29,631
(1,820,676)
(502,078)
116,091
-
(663,435)
-
116,091
(663,435)
£
10,000
3,803,099
(4,048)
3,809,051
40
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
22. DISCONTINUED OPERATIONS (CONTINUED)
d) Net liabilities disposed
Plant and equipment
Prepayment and other receivables
Cash and cash equivalents
Deferred Revenue
Other payables and accrued expense
Net liabilities disposed
e) Cash flow attributable to the discontinued operation
NET CASH FLOWS FROM OPERATING ACTIVITIES
Continued Operations
Discontinued operations
NET CASH FLOWS FROM INVESTMENT ACTIVITIES
Continued Operations
Discontinued operations
NET CASH FLOWS FROM FINANCING ACTIVITIES
Continued Operations
Discontinued operations
£
253
1,760,006
47,433
(3,507,104)
(2,103,687)
(3,803,099)
2018
£
2017
£
(1,335,259)
(77,474)
(761,038)
(1,433,493)
(1,412,733)
(2,194,531)
4,105
(37,430)
(33,325)
-
-
-
(73,242)
325,919
252,677
-
3,300,077
3,300,077
41
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
23. RELATED PARTY TRANSACTIONS
(a) Details of the compensation of key management personnel was disclosed in Note 10 to the financial
statements.
(b) Apart from the balances with related parties at the end of the reporting period disclosed elsewhere in
the financial statements, the Company had not entered into any other significant related party
transactions for the year.
24. COMMITMENTS
Operating leases commitment
The Group had outstanding commitments for future minimum lease payments on its office premises under
non-cancellable operating leases which fall due as follows:
No later than one year
Later than one year but no later than 5 years
Capital Commitment
2018
£
2017
£
44,922
-
44,922
44,382
18,492
62,874
2018
£
2017
£
Contracted, but not provided for
-
139,201
42
SEALAND CAPITAL GALAXY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
25. FINANCIAL INSTRUMENTS BY CATEGORY
The totals for each category of financial instruments is as follows:
2018
£
2017
£
-
38,502
528,752
288,510
1,808
-
2,035,464
1,772,507
1,035,164
3,809,779
22,501
88,631
-
1,247,282
111,132
1,274,282
Financial assets
- Amortised cost (2017: Loans and receivables)
Amounts due from directors
Trade receivables
Other receivables
Cash and cash equivalents
Financial liabilities
- Amortised cost
Trade Payables
Other payables and accrued expense
Prepayments are excluded from the summary above.
26. EVENTS AFTER THE REPORTING PERIOD
There were no material events after the year end to report
43