REG - Grand FortHigh Grade - Half-year Report
17/12/2021 13:40
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20211217:nRSQ0793Wa&default-theme=true
RNS Number : 0793W Grand Fortune High Grade Limited 17 December 2021
GRAND FORTUNE HIGH GRADE LIMITED
CONSOLIDATED REPORTS AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 OCTOBER 2021
GRAND FORTUNE HIGH GRADE LIMITED
CHAIRMAN'S STATEMENT
FOR THE PERIOD ENDED 31 OCTOBER 2021
I am pleased to present the consolidated reports and financial statements s
for the period from 1 May 2021 to 31 October 2021. During the period, the
Group reported a loss of £156,975 (loss of £174,815 for the period from 1
May 2020 to 31 October 2020) which arose from professional fees, rent, wages
and general administration expenses in connection with the ongoing operations
of the Group. As at the date of signing this report the Group has
approximately £1.85 Million of cash balances.
Following its listing on the London Stock Exchange on 22 May 2017, the Group
has been focused on the development, by organic growth, of its financial
training business in order to satisfy the significant demand for financial
sector specialists in China. To assist in that development, the Group
established a 100% owned subsidiary in Hong Kong - Grand Fortune High Grade
(HK) Limited which in turn has a 100% owned subsidiary in mainland China -
Shen Zhen Shi Ji Fu Education Information Consulting Co. Ltd. (and the
consolidated financial statements presented herein comprise of the financial
statements of Grand Fortune High Grade Limited, Grand Fortune High Grade (HK)
Limited and Shen Zhen Shi Ji Fu Education Information Consulting Co. Ltd.).
Grand Fortune High Grade Limited held its shareholder meeting on 5 November
2021. All items proposed were approved by 100% of the votes cast at the
meeting. Following the meeting, the Board of Directors was comprised of Wong
Lee Chun (re-elected), Angus Irvine (re-elected) and Ko Kwan (elected). Kit
Ling Law resigned from the Board of Directors on 1 June 2021. Ko Kwan was
appointed to the Board of Directors on 1 October 2021, which followed the
resignation of Anthony Wonnacott from the Board of Directors on the same date.
The past two years have been challenging. The challenges of the COVID-19
pandemic have had had a devastating effect on the global economy and on the
ability of the Group to offer financial training courses in person. Despite
the Group's best efforts, there has not been any revenue generated from its
financial training business and the Group has not yet been successful in
developing an online training platform. The implementation and success of
the online training platform remains one of the biggest tests for the Group.
As the business activities develop, the Group will keep shareholders advised
of its activities. We appreciate the assistance of our officers, directors
and advisors as we work towards the development of our business.
WONG LEE CHUN
CHIEF EXECUTIVE OFFICER
17 DECEMBER 2021
GRAND FORTUNE HIGH GRADE LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 OCTOBER 2021
Directors' report
The directors present their report together with the consolidated financial
statements for the period ended 31 October 2021.
Principal activity and future developments
Grand Fortune High Grade Limited (individually, or collectively with its
subsidiary, Grand Fortune High Grade (HK) Limited ("GFHG HK") and GFHG HK's
wholly owned subsidiary Shen Zhen Shi Ji Fu Education Information Consulting
Co. Ltd. ("Ji Fu Education"), as applicable, the "Group") is focused on the
development, by organic growth, of its financial training business in order to
satisfy the significant demand for financial sector specialists in China.
Business review and management report
The loss on ordinary activities for the period from 1 May 2021 to 31 October
2021 was of £156,975 (loss of £174,815 for the period from 1 May 2020 to 31
October 2020).
The Group had cash at bank and in hand of £1,870,687 at 31 October 2021. The
principal risks and uncertainties that the Group faces are in developing its
financial training business in China, which is a new market. The Group is
aiming to tailor and deliver courses that are appropriate for the market but
there is no guarantee there will be a sufficient demand for the courses
offered.
The Group has not carried out any activities in the field of research and
development.
Events that have occurred since the end of the financial period are detailed
in note 16 to the accounts.
Dividends
The directors do not recommend the payment of a final dividend for the period.
Directors
The following directors served during the period to 31 October 2021:
KIT LING LAW
- CHAIRMAN
WONG LEE CHUN -
CHIEF EXECUTIVE OFFICER
ANGUS SIGURD IRVINE -
NON-EXECUTIVE DIRECTOR
KO
KWAN
- NON-EXECUTIVE DIRECTOR
ANTHONY WONNACOTT - NON-EXECUTIVE
DIRECTOR
**Kit Ling Law resigned on 1 June 2021
**Ko Kwan commenced serving as a non-executive director on 1 October 2021
which is the same day that Anthony Wonnacott resigned
Substantial shareholdings
Except for the interests of those persons set out below, the Directors are not
aware of any interest (other than the interests of the Directors) which, at
the date of this document would amount to 3% or more of Grand Fortune High
Grade Limited's issued share capital:
Name Number of Ordinary Shares Approximate % Holding
Kit Ling Law 32,339,084 20.21%
Hundred River Ltd. (Wong Lee Chun) 31,996,100 19.99%
Directors' Remuneration
Directors' emoluments are detailed in Notes 0 and 0 to the accounts.
Auditors
A resolution re-appointing Crowe U.K. LLP as auditors of the Group was
approved by shareholders at the annual general meeting held on 5 November
2021.
Going concern
The Group is focused on the development, by organic growth, of a financial
training business in China, and, apart from a small amount of interest
receivable, it currently has no significant income stream. Until the training
business has been adequately developed and is generating significant revenue,
it is therefore dependent on its cash reserves to fund ongoing costs. At 31
October 2021, the Group's cash position was £1,870,687.
After reviewing the Group's budget for the period ending 31 October 2022 and
its medium-term plans, the directors have a reasonable expectation that the
Group will have adequate resources to continue in operational existence for
the foreseeable future.
For this reason, they continue to adopt the going concern basis in preparing
the accounts.
Financial risk management
The Group's financial risk management objective is to minimise, as far as
possible, the Group's exposure to such risk as detailed in note 14 to the
accounts.
Principle Risks and Uncertainties Facing the Group
The principle risks and uncertainties facing the Group are: (1) The Group's
success is dependent on the successful development of a financial training
business in China, and for the period ended 31 October 2021, apart from a
small amount of interest receivable, the Group did not generate any revenue
and there are no guarantees that the Group will develop a training business
that will generate significant revenue to cover the expenses of the Group; and
(2) Until the training business has been adequately developed and generating
revenue, the Group is dependent on its cash reserves to fund ongoing costs -
there are no guarantees that the Group will be successful in replenishing
those cash reserves once depleted.
COVID-19 Risks
The worldwide emergency measures taken to combat the COVID-19 pandemic may
continue, could be expanded, and could also be reintroduced in the future
following relaxation. As governments implement monetary and fiscal policy
changes aimed to help stabilize economies and capital markets, we cannot
predict legal and regulatory responses to concerns about the COVID-19 pandemic
and related public health issues and how these responses may impact our
business. The COVID-19 pandemic, actions taken globally in response to it, and
the ensuing economic downturn has caused significant disruption to business
activities and economies. The depth, breadth and duration of these disruptions
remain highly uncertain at this time. Furthermore, governments are developing
frameworks for the staged resumption of business activities. As a result, it
is difficult to predict how significant the impact of the COVID-19 pandemic,
including any responses to it, will be on the global economy and our business.
The impact of COVID-19 has significantly reduced the ability of the Group to
currently provide its training programs in a face-to-face setting and the
ability to provide face-to-face training programs in the future is
uncertain. As a result, the Group is developing an online training platform
for its offered programs. The implementation and success of this online
training platform is uncertain.
Corporate governance
Due to the size and nature of the Group, it does not comply with the UK
Corporate Governance Code. However, it has adopted corporate governance
procedures as are appropriate for the size and nature of the Group and the
size and composition of the Board. These corporate governance procedures have
been selected with due regard to for the provisions of the UK Corporate
Governance Code insofar as is appropriate. A description of these procedures
is set out below:
· Due to the nature and size of the Group, it does not have
separate audit, remuneration and nomination committees. The Board as a whole
will instead review risk, compliance, and nominations matters, as well as the
Board's size, structure, and composition, taking into account the interests of
the Shareholders and the performance of the Group. Once the Group has achieved
sufficient growth, the Board intends to put in place audit, remuneration and
nomination committees.
· One-third of Directors (or, where their number is not
divisible by three, the nearest number not exceeding one-third) will be
required to retire and seek re-elections on an annual basis.
Directors' responsibility statement
The Directors are responsible for preparing the management report, annual
report and the non-statutory consolidated financial statements in accordance
with the Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority ("DTR") and with International Financial Reporting Standards
("IFRS") as adopted by the European Union.
International Accounting Standard 1 requires that consolidated financial
statements present fairly for each financial year the Group's consolidated
financial position, consolidated financial performance and consolidated cash
flows. This requires the faithful representation of transactions, other events
and conditions in accordance with the definitions and recognition criteria for
the assets, liabilities, income and expenses set out in the International
Accounting Standards Board's "Framework for the Preparation and Presentation
of Financial Statements".
In virtually all circumstances, a fair representation will be achieved by
compliance with all IFRS. Directors are also required to:
- make judgments and accounting estimates that are reasonable and
prudent;
- state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the financial
statements;
- prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group will continue in business;
- select suitable accounting policies and then apply them
consistently;
- present information, including accounting policies, in a manner that
provides relevant, reliable, comparable, and understandable information; and
- provide additional disclosures when compliance with the specific
requirements in IFRS is insufficient to enable users to understand the impact
of particular transactions, other events and conditions on the Group's
consolidated financial position and financial performance.
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. 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 maintenance and integrity of the Grand Fortune High Grade Limited website
is the responsibility of the Directors; work carried out by the auditors does
not involve the consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred in the
accounts since they were initially presented on the 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.
The directors confirm, to the best of their knowledge that:
· the consolidated financial statements, prepared in accordance with
the relevant financial reporting framework, give a true and fair view of the
consolidated assets, liabilities, financial position and profit or loss of the
Group;
· the consolidated financial statements include a fair review of the
development and performance of the business and the consolidated financial
position of the Group, together with a description of the principal risks and
uncertainties that it faces; and
· the annual report and consolidated financial statements, taken as a
whole, are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Group's performance, business model
and strategy.
By order of the board
"Wong Lee Chun"
CHIEF EXECUTIVE OFFICER
17 DECEMBER 2021
GRAND FORTUNE HIGH GRADE LIMITED
FOR THE PERIOD ENDED 31 OCTOBER 2021
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
1 May 2021 1 May 2020
Note to 31 October 2021 to 31 October 2020
£ £
Revenue - -
Administrative expenses 4 (157,028) (175,012)
Operating Loss (157,028) (175,012)
Finance income 53 197
Loss before tax (156,975) (174,815)
Taxation 5 - -
Total comprehensive loss for the period attributable to the equity holders of (156,975) (174,815)
the Group
Loss per Ordinary Share:
Basic and diluted (pence) 6 (0.10) (0.11)
The notes to the consolidated financial statements form an integral part of
these consolidated financial statements.
GRAND FORTUNE HIGH GRADE LIMITED
FOR THE PERIOD ENDED 31 OCTOBER 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At as As at
Note 31 October 2021 31 October 2020
£ £
Assets
Current assets
Other receivables 7 - -
Cash and cash equivalents 1,870,687 2,267.429
Total assets 1,870,687 2,267,429
Equity and liabilities
Capital and reserves
Share capital 10 4,311,700 4,311,700
Share Based Payment Reserve 11 - -
Accumulated losses (2,447,513) (2,066,271)
Total equity attributable to equity holders of the Group 1,864,187 2,245,429
Current liabilities
Amounts owing to Directors 12 6,500 18,500
Other payables 8 - 3,500
Total liabilities 6,500 22,000
Total equity and liabilities 1,870,687 2,267,429
The notes to the consolidated financial statements form an integral part of
these consolidated financial statements.
This report was approved by the board and authorised for issue on 17 December
2021 and signed on its behalf by;
"Wong Lee Chun" - Chief
Executive Officer
GRAND FORTUNE HIGH GRADE LIMITED
FOR THE PERIOD ENDED 31 OCTOBER 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Based
Note Share Payment Accumulated
Capital Reserve Losses Total
£ £ £ £
Balance as at 30 April 2018 4,311,700 646,637 (1,604,283) 3,354,054
Balance on 30 April 2018 4,311,700 646,637 (1,604,283) 3,354,054
Loss for the year after taxation - - (518,387) (518,387)
Total comprehensive balances 4,311,700 646,637 (2,122,670) 2,835,667
Balance as at 30 April 2019 4,311,700 646,637 (2,122,670) 2,835,667
Balance on 30 April 2019 4,311,700 646,637 (2,122,670) 2,835,667
Loss for the year after taxation - - (415,423) (415,423)
Total comprehensive balances 4,311,700 646,637 (2,538,093) 2,420,244
Balance as at 30 April 2020 4,311,700 646,637 (2,538,093) 2,420,244
Balance on 30 April 2020 4,311,700 646,637 (2,538,093) 2,420,244
Loss for the period after taxation (399,083) (399,083)
Share Based Payments 11 (646,637) 646,637 -
Total comprehensive balances 4,311,700 - (2,290,539) 2,021,161
Balance as at 30 April 2021 4,311,700 - (2,290,539) 2,021,161
Balance on 30 April 2021 4,311,700 - (2,290,539) 2,021,161
Loss for the period after taxation (156,975) (156,975)
Total comprehensive balances 4,311,700 - (2,447,513) 1,864,187
Balance as at 31 October 2021 4,311,700 - (2,447,513) 1,864,187
The share capital comprises the Ordinary Shares of Grand Fortune High Grade
Limited.
Accumulated losses represent the aggregate retained loss of Grand Fortune High
Grade Limited since incorporation.
The notes to the consolidated financial statements form an integral part of
these consolidated financial statements.
GRAND FORTUNE HIGH GRADE LIMITED
FOR THE PERIOD ENDED 31 OCTOBER 2021
CONSOLIDATED CASH FLOW STATEMENT
1 May 2021 1 May 2020
to 31 October 2021 to 31 October 2020
£ £
Cash flows from operating activities
Loss for the period before taxation (156,975) (174,815)
Share based payment charge - -
Finance income (53) (197)
Adjustments for non-cash items:
Share based payment charge - -
Foreign currency loss/(gain) (9,695) 4,309
Working capital adjustments:
Decrease in other receivables - -
(Decrease)/Increase in other payables (27,000) (9.302)
Foreign currency loss/gain (Bank Charges) 9,695 (4,309)
Net cash used in operating activities (184,028) (184,314)
Cash flows from investing activities
Interest received 53 197
Net cash flow from investing activities 53 197
Cash flows from financing
Receipt of Director's loan - -
Proceeds from the issue of Ordinary Shares - -
Net cash inflow from financing activities 0 0
Increase in cash (183,975) (184,117)
Cash and cash equivalents, beginning of the period 2,054,661 2,451,546
Cash and cash equivalents, end of the period 1,870,687 2,267,429
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General Information
Grand Fortune High Grade Limited is incorporated under the laws of the Cayman
Islands under the Companies Law. Grand Fortune High Grade Limited was
incorporated on 10 November 2015 as an exempted company. Grand Fortune High
Grade Limited's registered number is 305700 and its registered office is at
Willow House, Cricket Square, PO Box 709, Grand Cayman KY1-1107, Cayman
Islands.
The Group's objective is to take advantage of opportunities to establish a
financial training business.
This financial information has been prepared in accordance with IFRS as
adopted by the European Union ("EU"). The standards have been applied
consistently during the period under review.
2. Accounting Policies
Basis of preparation
The principal accounting policies adopted by the Group in the preparation of
the financial information are set out below.
The financial information has been presented in pound sterling, being the
functional currency of the Group.
The financial information has been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union ("IFRS"),
including interpretations made by the International Financial Reporting
Interpretations Committee (IFRIC) issued by the International Accounting
Standards Board (IASB). The standards have been applied consistently.
Standards and interpretations issued but not yet applied
A number of new standards and amendments to standards and interpretations have
been issued but are not yet effective and, in some cases, have not yet been
adopted by the European Union. The directors do not expect that the adoption
of these standards will have a material impact on the consolidated financial
statements of the Group in future periods.
.
Going concern
The Group is focused on the development, by organic growth, of a financial
training business in China, and, apart from a small amount of interest
receivable, it currently has no income stream. Until the training business has
been adequately developed and is generating revenue, it is therefore dependent
on its cash reserves to fund ongoing costs. At 31 October 2021, the Group's
cash position was £1,870,687.
After reviewing the Group's budget for the period ending 31 October 2022 and
its medium-term plans, the directors have a reasonable expectation that the
Group will have adequate resources to continue in operational existence for
the foreseeable future. In making this assessment, the directors have
considered current and developing impact on the business as a result of the
COVID-19 virus. Whilst this has had an immediate impact on the Group's
operations and the Group's ability to offer financial training courses in
person, the Group is developing an online training platform for its offered
programs. The directors are aware that the implementation and success of the
online training platform remains one of the biggest tests for the Group, in
particular if the current situation with COVID-19 becomes prolonged and in
person training is not possible or limited.
The financial information does not include any adjustments that would result
if the Group were unable to continue as a going concern.
Taxation
The tax currently payable is based on the taxable profit for the period.
Taxable profit differs from net profit as reported in the income statement
because it excludes items of income or expense that are taxable or deductible
in other periods and it further excludes items that are never taxable or
deductible. The Group's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet
date.
Financial instruments
Financial assets and financial liabilities are recognised on the consolidated
statement of financial position when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets
Under IFRS 9, financial assets are measured at amortised cost or fair value
through other comprehensive income ("FVOCI") depending on the business model
and contractual cash flow characteristics. The classification depends on the
basis on which assets are measured and if either criteria is not met, then the
financial assets are held at fair value through profit or loss ("FVPL").
The Group holds cash and cash equivalents at amortised cost.
As at the consolidated balance sheet date, the Group did not have any
financial assets measured at FVPL or FVOCI.
Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Group are
classified according to the substance of the contractual arrangements entered
into and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. Equity instruments
are recorded at the proceeds received, net of direct issue costs.
Financial liabilities
All financial liabilities are measured at amortised cost and are subsequently
measured at amortised cost, where applicable, using the effective interest
method, with interest expense recognised on an effective yield basis.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group's
obligations are discharged, cancelled or they expire.
Foreign currencies
Profit and loss account transactions denominated in foreign currencies are
translated into sterling and recorded at the rate of exchange ruling at the
date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate of exchange ruling at the
balance sheet date.
All differences are taken to the profit and loss account.
Cash and cash equivalents
The Group considers any cash on short-term deposits and other short-term
investments to be cash equivalents.
Leases/Rentals
The only leases the Group has entered into are short term leases. As permitted
by IFRS 16 the Group has taken advantage of the exemption not to apply the
requirements of IFRS 16 to short term leases and is recognising the expense in
profit and loss evenly over the lease contract. The total expense incurred on
short term leases is disclosed as rental expenses in note 4 to these financial
statements.
Segment Information
In the Directors' opinion, the Group has only one operating segment - the
development and operation of financial training courses in China. The
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 set out in the
consolidated statement of comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of financial position and
cash flows.
3. Critical accounting estimates and judgement
The preparation of the financial information in conformity with IFRS requires
the Directors to make estimates and assumptions that affect the reported
amounts of income, expenditure, assets, and liabilities. Estimates and
judgements are continually evaluated, including expectations of future events
to ensure these estimates remain reasonable.
The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
4. Administrative expenses
1 May 2021 1 May 2020
to 31 October 2021 to 31 October 2020
£ £
Directors Remuneration 58,000 69,000
Directors Remuneration (adjustment) - 198
Key Management personnel 3,248 3,521
Rental Expenses 1,144 2,080
Salaries/Wages 44,422 42,866
Office/General Expenses 2,477 9.588
Legal and Professional Fees 55,786 41,330
Bank Charges 1,645 2,210
Foreign currency (gain) / loss (9,695) 4,309
157,028 175,012
5. Taxation
Grand Fortune High Grade Limited is incorporated in the Cayman Islands. The
operations of Grand Fortune High Grade Limited are, with the exception of
regulatory filings, outside of the Cayman Islands. Accordingly, the costs
and revenues of Grand Fortune High Grade Limited are subject to Cayman Islands
taxation legislation where the prevailing taxation rate is 0%.
As GFHG HK is incorporated in Hong Kong it is subject to Hong Kong taxation
legislation and as Ji Fu Education is incorporated in China it is subject to
China taxation legislation. Any revenue earned by GFHG HK would be subject
to Hong Kong taxation and any revenue earned by Ji Fu Education would be
subject to China taxation. It is the intention of the Group to attempt to
offset any revenue against historic costs incurred where such revenue is
earned and a taxation reduction on such future revenue may be available. As
the Group's expenses exceeded its revenue for the period ended 31 October
2021, it has not accrued any tax amount payable.
6. Loss per Ordinary Share
The calculation for earnings per Ordinary Share (basic and diluted) for the
relevant period is based on the profit after income tax attributable to equity
holder is as follows:
1 May 2021 1 May 2020
to 31 October 2021 to 31 October 2020
Loss attributable to equity holders (£) (156,975) (174,815)
Weighted average number of Ordinary Shares 160,000,000 160,000,000
Earnings per share (pence) (0.10) (0.11)
7. Other receivables
None
8. Other payables
None
9. Key management personnel
Zhao Zhijun, the management director of GFHG HK, is considered a key
management personnel and below is the remuneration that was paid in the
periods below.
As at As at
31 October 2021 31 October 2020
£ £
Zhao Zhijun 3,428 3,521
The Directors are also considered the key management personnel and the
following directors' remuneration was accrued in the periods below.
As at As at
31 October 2021 31 October 2020
£ £
Wong Lee Chun 18,000 18,000
Angus Irvine 21,000 21,000
Ko Kwan - -
Kit Ling Law 1,500 9,000
Anthony Wonnacott 17,500 21,000
58,000 69,000
10. Share capital
As at As at
31 October 2021 31 October 2020
£ £
160,000,000 Ordinary Shares 4,311,700 4,311,700
4,311,700 4,311,700
11. Share based payments
The Group has recognized NIL in respect of share-based payment amounts in each
of the periods ended 31 October 2021 and 31 October 2020.
On 17 May 2017 Grand Fortune High Grade Limited entered into warrant
agreements with each of Alice Lau, Vincent Poon, Wai Man Hui and Cornhill
Capital Limited conferring the right to subscribe for 4,800,000 Ordinary
Shares each (a total of 19,200,000 Ordinary Shares) as remuneration for
assistance with the admission on the London Stock Exchange. Each Warrant
Agreement is in an identical form and confers the right to subscribe for
Ordinary Shares at £0.10. The Warrants were conditional on admission on the
London Stock Exchange (which was completed on 22 May 2017) and can be
exercised at any time until 22 May 2020 (see Note 17).
The following table summarizes the Group's outstanding warrants:
Period Ended Share Based Period Ended Share Based
31 October 2020 Payment Charge 31 October 2020 Payment Charge
£ £
Opening Position - - 19,200,000 646,637
Granted - - - -
Exercised - - - -
Expired - - 19,200,000 (646,637)
Closing Position - - - -
The aggregate fair value of the Warrants was estimated at £646,637 (fair
value of individual warrant was £0.0337) using the Black-Scholes valuation
model with the following assumptions: expected volatility of 50%, risk-free
interest rate of 0.1799% and an expected life of 3 years. Calculation of
volatility involves significant judgement by the Directors. Volatility number
was estimated based on the range of 36-month end volatilities of the main
market index.
12. Amounts owing to Directors
As at As at
31 October 2021 31 October 2020
£ £
Directors Fees 6,500 18,500
6,500 18,500
The above Directors fees payable relates to directors' remuneration between 1
May 2018 and the respective periods listed above. As of 31 October 2021, the
only amounts owing to Directors are the amounts for fees accrued for October
2021 as all other outstanding amounts were paid during the period ended 31
October 2021.
13. Financial instruments
Financial assets As at As at
31 October 2021 31 October 2020
£ £
Loans and receivables
Cash and cash equivalents 1,870,687 2,267,429
Total financial assets 1,870,687 2,267,429
Financial liabilities at amortised cost
Amounts owing to Directors 6,500 18,500
Other payables - 3,500
Total financial liabilities 6,500 22,000
14. Financial risk management
The Group uses a limited number of financial instruments, comprising cash and
amounts owing to Directors, which arise directly from operations. The Group
does not trade in financial instruments.
General objectives, policies and processes
The Directors have overall responsibility for the determination of the Group's
risk management objectives and policies. Further details regarding these
policies are set out below:
Currency risk
As the Group operates internationally, its exposure to foreign exchange risk
relates to transactions and balances that are denominated in currencies other
than £. The Directors manage the Group's exposure to currency risk by
operating foreign currency bank accounts, being GBP, HKD, RMB and USD. It is
the Directors' view that the size and complexity of the Group's trade does not
warrant financial hedging arrangements currently, although this view will be
regularly reviewed as the Group develops.
The table below illustrates the hypothetical sensitivity of the Group's
consolidated statement of financial position to a 10% increase and decrease in
the GBP/HKD, GBP/USD and GBP/RMB exchange rates at the year-end date. The
sensitivity rate of 10% represents the directors' assessment of a reasonably
possible change, based on historic volatility.
Period Ended Period Ended
31 October 2021 31 October 2020
£ £
GBP Increases by 10%
HKD portion of Cash and cash equivalents (37,818) (24,971)
USD portion of Cash and cash equivalents (6,579) (7,960)
RMB portion of Cash and cash equivalents (1,449) (4,663)
GBP Decreases by 10%
HKD portion of Cash and cash equivalents 46,221 30,520
USD portion of Cash and cash equivalents 8,041 9,729
RMB portion of Cash and cash equivalents 1,771 5,699
Period end exchange rates applied in the above analysis are HKD 10.83480 (2020
- HKD 10.0336), USD 1.39549 (2020 - USD 1.29421) and RMB 8.75894 (2020 - RMB
8.65494).
Credit risk
Credit risk is the risk that a counter party will not meet its obligations
under a contract, leading to a financial loss. The Group had cash and cash
equivalents of £1,870,687 as at 31 October 2021. The credit risk from its
liquid funds is limited as the counter parties are banks with high credit
ratings which have not experienced any losses in such accounts.
Liquidity risk
Liquidity risk arises from the Directors' management of working capital. It is
the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due.
The Directors' policy is to ensure that the Group will always have sufficient
cash to allow it to meet its liabilities when they become due. To achieve this
aim, the Directors seek to maintain a cash balance sufficient to meet expected
requirements.
The Directors have prepared cash flow projections on a monthly basis through
to 31 October 2022. At the end of the period under review, these projections
indicated that the Group expected to have sufficient liquid resources to meet
its obligations under all reasonably expected circumstances.
15. Capital risk management
-
The Directors' objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
Shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. Historically, the Group had
been financed by equity and Directors' loans. In the future, the capital
structure of the Group is expected to consist of equity attributable to equity
holders of the Group, comprising issued share capital and reserves.
16. Subsequent events
None
17. Related party transactions
During the year ended 30 April 2020, Grand Fortune High Grade Limited entered
into an employment agreement with Derek Law. Derek Law is a related party by
virtue of being the brother of Kit Ling Law (a significant shareholder and
former member of the Board of Directors of Grand Fortune High Grade
Limited). Under the terms of the employment agreement, Derek Law was
employed on a continuous basis as an Executive Deputy Director of Grand
Fortune High Grade Limited effective 1 December 2019 and entitled to a monthly
salary of HKD 20,000 and a monthly housing allowance of HKD 5,000.
All other amounts owing to directors relate to directors' remuneration accrued
between May 2018 and the period ended 31 October 2021, see note 9 and 0 for a
summary.
18. Ultimate controlling party
As at 31 October 2021, the Group did not have any one identifiable controlling
party.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BXBDDXXBDGBRRecent news on Grand Fortune High Grade
See all newsREG - Official List - Removal - Grand Fortune High Grade Limited
AnnouncementREG - Stock Exch Notice Grand FortHigh Grade - Cancellation - Grand Fortune High Grade Limited
AnnouncementREG - Grand FortHigh Grade - Cancellation of Listing
AnnouncementREG - Grand FortHigh Grade - Correction to Previous Announcment
AnnouncementREG - Grand FortHigh Grade - Half-year Report
Announcement