Gowin New Energy Grp - Half-year Report
30/09/2020 07:00
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RNS Number : 5051A Gowin New Energy Group Limited 30 September 2020
Gowin New Energy Group Limited
("Gowin" or the "Group")
(AQSE: GWIN)
Interim Results for the Six Months Ended 30 June 2020
Gowin New Energy Group Limited, engaged in the research and development,
outsourcing and sales of LED lighting products, and the tea trading business,
today announces its unaudited financial results for the six months ended 30
June 2020.
2020 Interim Report Chairman's Statement
Gowin is pleased to release its 2020 Interim Report for the period 1 January
2020 to 30 June 2020. There have been no material financial outcomes changes
to the LED and Tea businesses compared to that reported in the 2019 Annual
Report.
Gowin is engaged in the sale and investment of LED related products based in
Taiwan. In addition, Gowin is launching a new tea trading business, focused on
the collection, distribution and sale (including auction market) of
high-quality Chinese Pu-erh tea and Taiwan high-mountain tea, with benefits
that include promoting Chinese tea culture and healthy drinking in daily life.
As previously disclosed, management is working hard on launching the new Tea
business. Besides reporting good news that new preference shares were admitted
to trading on the AQSE Growth Market on 7 February 2020, significant risk
management work has been carried out by the Group ahead of launching the Tea
business and further announcements will be made in the near future. The
GBP250,000 proceeds received from an investor Mr Wen Sheng-Tung that resulted
in the issue of 12,500,000 2% Preference Shares at GBP0.02 each, remain in a
Group bank account and will not be released for use for Tea business working
capital until its formal launch. The previously disclosed small pilot
operation of the Tea business will then commence, after which the Group is
confident in the growth potential of the Tea business, subject to global
pandemic, geopolitical and economic conditions.
The Group has made every effort to introduce a safe working environment for
its workforce and introduced preventive measures to reduce the spread of
COVID-19 in the workplace. The Group will continue to impose appropriate
measures to minimise the adverse impact on the business operation of the Group
and will pay close attention to the development of the COVID-19 outbreak and
evaluate its impact on the financial position, operating results and cash
flows of the Group. As before, the Group's board will be vigilant in its
deliberations, risk management and decision making and adjust business plans
as necessary.
On 30 June 2020, the Group was notified by the AQUIS Stock Exchange (AQSE) of
the need to seek a replacement for the Group's AQSE Corporate Adviser
Alexander David Securities. The Group immediately began discussions with
potential new AQSE Corporate Advisers and commenced working with its preferred
firm towards their appointment. It was not possible to complete this process
by the AQSE deadline of 31 August 2020 and as a result the Group's shares were
suspended from trading on 1 September 2020, in accordance with Rule 31 of the
AQSE Growth Market Rules for Issuers.
The Directors believe that the appointment of the Group's new AQSE Corporate
Adviser is now close to being concluded which will then enable the lifting of
the share suspension. Clearly, the economic, business and COVID-19 related
timing of this event was very unfortunate and the Group needed to participate
in a rigorous due diligence process with the prospective new Corporate
Adviser. I am proud of the Group's hard work and professionalism during this
difficult time, which was a major distraction to say the least. A number of
life principles guide me, but two in particularly come to mind now. Tough
times never last; tough people do. What goes around comes around - the Group
has characteristics of integrity and right mindedness - it will be rewarded
for this.
CEO Mr Chen Chih-Lung has committed to continue to fund short term liquidity
to support the Group's working capital requirements as and when required. His
most recent working capital loan was announced on 6 July 2020.
The Directors would like to take this opportunity to express sincere gratitude
to all shareholders for their continued support and to thank all staff members
of the Group for their dedication and contribution to the Group.
Events Post Reporting Date
On 6 July 2020, the Group announced that it had entered into a Loan Agreement
(the "Loan Agreement") with Mr Chen Chih-Lung, the Chief Executive Officer.
The amount of the loan is GBP 70,000, and the purpose of the loan is to
provide short term liquidity to meet its financial obligations.
REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION
INDEPENDENT REVIEW REPORT TO GOWIN NEW ENERGY GROUP LIMITED
Introduction
We have been engaged by the Group to review the condensed set of consolidated
financial statements in the half-yearly financial report for the six months
ended 30 June 2020 which comprises the Condensed Consolidated Balance Sheet,
Condensed Consolidated Statements of Comprehensive Income, Changes in Equity
and Cash Flows and related notes. We have read the other information
contained in the half-yearly financial report and considered whether it
contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the AQSE Rules for Issuers.
The annual financial statements of the Group are prepared in accordance with
IFRSs as adopted by the European Union. The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim Financial
Reporting".
Our responsibility
Our responsibility is to express to the Group a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
This report, including the conclusion, is made solely to the Group for the
purpose of the AQSE Rules for Issuers. We do not, in producing this report,
accept or assume responsibility to anyone, other than the Company, for our
work, for this report, or for the conclusion we have formed. This report may
not be provided to third parties without our prior written consent.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing, and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2020 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 and
the AQSE Rules for Issuers.
PKF Littlejohn LLP
15 Westferry Circus
Statutory
Auditor
Canary Wharf
London E14 4HD
29 September 2020
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2020
Six months Six months
ended ended
30 June 2020 30 June 2019
RMB'000 RMB'000
Continuing Operations Note (Unaudited) (Unaudited)
Revenue 7 8 4
Cost of sales - -
Gross profit 8 4
Administrative expenses 10 (1,842) (2,035)
Investment gain(loss) (76) 2
Selling expenses (3)
Operating loss (1,910) (2,032)
Finance costs 9 (91) (86)
Other Income/ (loss) 10
Foreign exchange gain/(loss) 178 59
Loss before tax (1,823) (2,049)
Tax 11 - -
Loss from continuing operations (1,823) (2,049)
Other comprehensive income - -
Total comprehensive loss for the period attributable to owners of the parent (1,823) (2,049)
Loss per share attributable to owners of the parent during the period
expressed in RMB per share
Basic and diluted loss per share 12 (0.006) (0.007)
Condensed consolidated statement of financial position
As at 30 June 2020
As at As at As at
Note 30 June 30 June 31 December 2019
2020 2019
RMB'000 RMB'000 RMB'000
(Unaudited) (Unaudited) (Audited)
Assets
Non-Current Assets
Long-term Investments 14 2,217 2,269 2,232
Current assets
Trade and other receivables 15 87 150 158
Cash in bank 16 2,338 203 2,747
4,642 2,622 5,137
Total assets 4,642 2,622 5,137
Non-Current Liabilities
Loans from equity holders 17 (11,272) (4,428) -
Current liabilities
Trade and other payables 17 (9,203) (11,790) (21,354)
Total liabilities (20,475) (16,218) (21,354)
Net assets (15,833) (13,596) (16,217)
Equity attributable to owners of the Company
Share capital 18 29,000 29,000 29,000
Preference share 18 2,196
Retained loss (47,029) (42,596) (45,217)
Total equity (15,833) (13,596) (16,217)
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2020
Attributable to owners of the Company
Share capital Preference share Retained losses Total
RMB'000 RMB'000 RMB'000 RMB'000
29,000 - (40,547) (11,547)
For the six months ended 30 June 2019 (Unaudited)
Balance as at 1 January 2019 (Audited)
Loss for the period - - (2,049) (2,049)
Other comprehensive income for the period - - - -
Total comprehensive income for the period - - (2,049) (2,049)
Total transactions with owners, recognized directly in equity
Issue of shares
Balance as at 30 June 2019 29,000 - (42,596) (13,596)
29,000 - (45,206) (16,206)
For the six months ended 30 June 2020 (Unaudited)
Balance as at 1 January 2020 (Audited)
Loss for the period - - (1,823) (1,823)
Issue of preference shares - 2,196 - 2,196
for the period
Total comprehensive income for the period - 2,196 (1,823) 373
Total transactions with owners, recognized directly in equity
Issue of shares
Balance as at 30 June 2020 29,000 2,196 (47,029) (15,833)
Condensed consolidated statement of cash flows
For the six months ended 30 June 2020
Six months Six months
ended ended
30 June 2020 30 June
2019
RMB'000 RMB'000
((Unaudited) (Unaudited)
Cash Flows used in Operating Activities
Loss before tax (1,823) (2,049)
Finance income - -
Finance cost 87 83
Investment loss/(gain) 76 (2)
Foreign currency loss/(gain) (88) (55)
Decrease/(Increase) in trade and other receivables 35 (69)
(Decrease)/Increase in trade and other payables 854 1,237
Net cash used in operating activities (859) (855)
Cash Flows generated from Financing Activities
Shareholders' loans 455 728
Issue of shares - -
Repayment of loans - -
Finance income (5) -
Net cash generated from financing activities (450) 728
Net increase in cash and cash equivalents (409) (127)
Cash and cash equivalents at beginning of period 2,747 330
Cash and cash equivalents at end of period 2,338 203
Notes to the condensed consolidated interim financial information
1. General information
Gowin New Energy Group Limited ("the Company") was incorporated in the Cayman
Islands. The registered office of the Company is located at Cricket Square,
Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands and the
main business office is located at 4F., No. 5, Ln. 332, Siyuan Rd.,Xinzhuang
Dist., New Taipei City,Taiwan (R.O.C.).
The principal activity of Gowin New Energy Group Limited and its subsidiaries
("the Group'') has historically been the research and development, outsourcing
and sales of LED lighting products, and the tea trading business. The Group is
continuing with its corporate restructuring including investing in businesses
in related fields.
During this period of corporate restructuring, the CEO, Mr. Chen Chih Lung,
has supported the Group financially by way of loans and guarantees.
The Company's shares are listed on the AQUIS Stock Exchange (AQSE).
The condensed consolidated interim financial information is presented in
Renminbi ("RMB"), which is the presentational and functional currency of the
Group, and all values are rounded to the nearest thousand except where
indicated otherwise.
2. Basis of Preparation
The non-statutory condensed interim consolidated financial statements have
been prepared in accordance with International Financial Reporting Standards
(IFRS) and IFRS Interpretations Committee (IFRS IC) Interpretations.
The condensed interim consolidated financial statements have been prepared
under the historical cost convention.
The preparation of the condensed interim consolidated financial statements in
conformity with IFRS requires the use of certain critical accounting
estimates. It also requires Management to exercise its judgement in the
process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the Consolidated non-statutory Financial
Statements, are disclosed in Note 5.
-New and amended accounting standards adopted by the Group
Effective during the year
During the year, the Group has adopted the following standards and
amendments:
• IFRS 4 － The Amendments of extension of the provisional exemption of
applicable IFRS 9 is effective from the date of publication.
•IFRS 10& IAS 28 －The Amendments of asset sales or investment between
investors and their affiliates or joint ventures" are subject to the decision
of the international accounting standards board.
The adoption of the above standards and amendments did not have any impact on
the financial position or performance of the Group.
Not yet effective
At the date of authorisation of these non-statutory condensed interim
consolidated financial statements, the following Standards, amendments and
interpretations were not yet effective:
•Annual improvements for the 2018-2020 cycle will take effect in January
2022.
•IFRS 3 － The Amendments of the updated index to conceptual framework will
take effect on 1 January 2022.
•IFRS 17 － The Amendments of Insurance contract will take effect on 1
January 2021.
•IFRS 17 － The Amendments will take effect on 1 January 2023.
•IAS 1 － The Amendments of classification of liabilities as current or
non-current are effective on 1 January 2022.
•IAS 16 － The Amendments of real estate, plant and equipment: price before
reaching the intended state of use will take effect on 1 January 2022.
•IAS 37 － The Amendments of loss contracts-cost of performance of
contracts will take effect on 1 January 2022.
The Group is evaluating the impact of the new and amended standards above. The
Directors do not expect that these new and amended standards will have a
material impact on the Group's results or shareholders' funds.
3. Going Concern
The non-statutory condensed interim consolidated financial statements have
been prepared on a going concern basis.
The Group reported a net loss after tax of RMB 1,823,000 for the six months
ended 30 June 2020 (six months ended 30 June 2019: loss of RMB 2,049,000).
Management's assessment of the ability of the Group to continue as a going
concern has considered cashflow forecasts, including assumptions regarding the
Group's activities, raising funds from existing shareholders and the open
market, and the Group's ability to settle liabilities as and when they fall
due.
Mr Chen has recommitted his personal financial support to provide loans for
business operations as and when required for a period of no less than 12
months from the date of signing the Financial Statements.
3. Going Concern (continued)
Additionally, the Group expects to make a placement for new preferred shares
to support the Tea Business.
Based on the above, the Directors consider there are reasonable grounds to
believe that the Group will be able to fund the Group's future operating
expenses. Should the Group not be able to continue trading, adjustments would
have to be made to reduce the value of assets to their recoverable amounts, to
provide for further liabilities which might arise and to re-classify
non-currents assets as current.
The non-statutory condensed interim consolidated financial statements do not
include any adjustments that may be required should the Group be unable to
continue as a going concern.
4. Risks and uncertainties
The additional activities planned for the Group will add new challenges, risks
and uncertainties. The Board is activity reviewing the impact of its plans but
does not immediately see any variations in the key financial risks other than
the valuation of investments.
5. Critical accounting estimates and judgements
The preparation of condensed consolidated interim financial information
requires Management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the end of the reporting period. Significant items subject to
such estimates are set out in Note 5 of the Group's 2019 Annual Report and
Financial Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
6. Significant accounting policies
The condensed consolidated interim financial information has been prepared
under the historical cost convention as modified by the revaluation of
financial assets and financial liabilities at fair value through profit or
loss.
The accounting policies and methods of computation used in the preparation of
these condensed consolidated interim financial information are consistent with
those used in the Group's 2019 Annual Report and Financial Statement, except
for the adoption of the amendments and interpretations issued by the
International Accounting Standards Board that are mandatory for accounting
periods beginning 1 January 2020.
The effect of the adoption of these amendments and interpretations was not
material to the Group's results or financial position.
7. Segment information
The business of the Group consists the outsourcing production, sales of LED
lighting products in China and abroad and sales of tea. For the purpose of
IFRS 8, the chief operating decision makers are the Directors. All of the
Group's income is derived from Taiwan and China. Internal and external
reporting is on a consolidated basis, with transactions between Group
companies eliminated on consolidation. Therefore, the financial information of
the single segment is the same as that set out in the consolidated statement
of comprehensive income,
the consolidated statement of financial position, the consolidated statement
of changes in equity and the consolidated statement of cash flows.
8. Financial assets
All financial assets are recognised and de-recognised on a trade date basis
where the purchase or sale of an investment is under a contract whose terms
require delivery of the investment within the timeframe established by the
market concerned, and are initially measured at fair value plus transaction
costs, except for those financial assets classified as at fair value through
profit or loss which are initially measured at fair value.
Financial assets are classified into the following specified categories:
financial assets "at fair value through profit or loss", "held-to-maturity
investments", "available-for-sale" financial assets and "loans and
receivables". The classification depends on the nature and purpose of
financial assets and is determined at the time of initial recognition.
The Group assesses at the end of each reporting period whether there is
objective evidence that a financial asset, or a group of financial assets, is
impaired. For equity investments, a significant or prolonged decline in the
fair value of the security below its cost is also evidence that the assets are
impaired. If any such evidence exists the cumulative loss - measured as the
difference between the acquisition cost and the current fair value, less any
impairment loss on that financial asset previously recognised in profit or
loss - is removed from equity and recognised in profit or loss. Impairment
losses recognised in the consolidated income statement on equity instruments
are not reversed through the consolidated income statement.
9. Finance cost
Six months Six months
ended ended
30 June 2020 30 June 2019
RMB'000 RMB'000
(Unaudited) (Unaudited)
Interest cost 88 83
Bank charge 3 3
Total finance cost 91 86
10. Expense by nature
Six months Six months
ended ended
30 June 2020 30 June 2019
RMB'000 RMB'000
(Unaudited) (Unaudited)
Staff costs 525 532
Directors' remuneration 763 756
Auditors' remuneration 78 277
Other professional fees 409 300
Other operating expenses 67 170
Total administrative expenses 1,842 2,035
11. Income tax
Six months Six months
ended ended
30 June 30 June 2019
2020
RMB'000 RMB'000
(Unaudited) (Unaudited)
Current income tax for the period - -
- -
The Group is not subject to taxation in the Cayman Islands, British Virgin
Islands or Samoa Islands.
No provision for Hong Kong or Chinese taxation has been made as the Group has
not generated any profit in Hong Kong, Taiwan or China.
12. Loss per share
Loss per share for the period ended 30 June 2020 is calculated by dividing RMB
1,823,000 loss for the period attributable to the equity holders of the
Company by the average number of shares, of 290,000,659 (30 June 2019:
2,048,041).
Six months Six months
ended ended
30 June 30 June 2019
2020
RMB RMB
(Unaudited) (Unaudited)
Basic and diluted loss per share (RMB) (0.006) (0.007)
No diluted loss per share are presented as there are no potential ordinary
shares outstanding for the six months ended 30 June 2020 and 2019.
13. Dividend
No dividends were proposed during the reporting period and the Directors do
not recommend the payment of an interim dividend for the six months ended 30
June 2020.
14. Long term investments
Quoted equity securities RMB'000
As at 1 January 2020 2,282
Investment gain(loss) (76)
Foreign Exchange gain(loss) 11
As at 30 June 2020 2,217
The Company holds 1,081,600 shares in Taiwan Thick-Film Industries Corp., a
company listed on Taipei Stock Exchange.
15. Trade and other receivables As at As at
30 June 30 June
2020 2019
RMB'000 RMB'000
(Unaudited) (Audited)
Guarantee deposits paid 17 12
Trade receivables - -
Prepayment 48 73
Loans to related party 13 53
Amounts due from related party 9 12
87 150
The amounts due from related party and the loans to related party were
unsecured, interest-free and repayable on demand. The related party is
controlled by a director of the Group.
The ageing analysis of the Group's trade receivables after impairment based on
delivery date is as follows:
As at As at
30 June 30 June
2020 2019
RMB'000 RMB'000
(Unaudited) (Audited)
Current trade receivables
0 - 30 days - -
31 - 60 days - -
61 - 365 days - -
- -
16. Cash and cash equivalents As at As at
30 June 30 June
2020 2019
RMB'000 RMB'000
(Unaudited) (Audited)
Cash on hand 9 11
Cash at bank and in hand 2,329 191
2,338 203
17. Trade and other payables As at As at
30 June 30 June
2020 2019
RMB'000 RMB'000
(Unaudited) (Audited)
368
Trade payables 369
Accruals and other payables 642 584
Loans from equity holders 11,272 9,021
Management personnel 8,191 6,242
Receipt in advance 2 2
20,475 16,218
The amounts due to equity holders were unsecured, interest-free and repayable
on demand.
The loans from equity holders bear interest rate of 2% and are repayable in
2021.
An ageing analysis of the Group's trade payables based on the invoice date is
as follows:
As at As at
30 June 30 June
2020 2019
RMB'000 RMB'000
(Unaudited) (Audited)
Current trade payables
31 to 60 days - -
61 to 365 days 368 369
368 369
18. Share capital
No. of 1p RMB'000
ordinary
shares
As at 1 January 2020 290,000,533 29,000
Issue of shares - -
As at 30 June 2020 290,000,533 29,000
No. of 1p RMB'000
preference
shares
As at 1 January 2020 - -
Issue of shares 2,195,400 2,196
As at 30 June 2020 2,195,400 2,196
19. Related party transactions
The ultimate controlling party of the Group is the CEO Mr Chen Chih Lung.
20. Approval of interim financial information
The condensed consolidated interim financial information was approved by the
Board of Directors on 29 September 2020.
21. Events after reporting date
The Group has obtained loans from the CEO Mr. Chen Chih Lung of £70,000 on 6
July 2020. These loans demonstrate his continuous commitment to support the
working capital needs of the Group as when required.
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