REG - Grand FortHigh Grade - Half-year Report
21/12/2023 13:30
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RNS Number : 6640X Grand Fortune High Grade Limited 21 December 2023
GRAND FORTUNE HIGH GRADE LIMITED
CONSOLIDATED REPORTS AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 OCTOBER 2023
GRAND FORTUNE HIGH GRADE LIMITED
CHAIRMAN'S STATEMENT
FOR THE PERIOD ENDED 31 OCTOBER 2023
I am pleased to present the consolidated reports and financial statements for
the period from 1 May 2023 to 31 October 2023. During the period, the Group
reported a loss of £336,568 (loss of £161,660 for the period from 1 May 2022
to 31 October 2022) which arose from professional fees, rent, wages and
general administration expenses in connection with the ongoing operations of
the Group. As at 31 October 2023, the Group has approximately £1,092763 of
cash balances.
Following its listing on the London Stock Exchange on 22 May 2017, the Group
has been focused on the development 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 3 November
2022. 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 (re-elected).
The past three 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
18 DECEMBER 2023
GRAND FORTUNE HIGH GRADE LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 OCTOBER 2023
Directors' report
The directors present their report together with the consolidated financial
statements for the period ended 31 October 2023.
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 2023 to 31 October
2023 was of £336,568 (loss of £161,660 for the period from 1 May 2022 to 31
October 2022).
The Group had cash at bank and in hand of £1,092,763 at 31 October 2023. 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.
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 2023:
WONG LEE CHUN -
CHAIR AND CHIEF EXECUTIVE OFFICER
ANGUS SIGURD IRVINE -
NON-EXECUTIVE DIRECTOR
KO
KWAN
- NON-EXECUTIVE DIRECTOR
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 8 and 10 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 3 November
2022. During the year, the Group received the resignation of Crowe U.K. LLP
as auditors. Following such resignation, the Group appointed MHA as the
auditors of the Group and will seek the approval of the shareholders for such
appointment at the next annual general meeting of shareholders.
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 2023, the Group's cash position was £1,092,763.
After reviewing the Group's budget for the period ending 31 October 2024 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 12 to the
accounts.
Principle Risks and Uncertainties Facing the Group
The principal 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 2023, 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 sufficient revenue to cover the expenses of the Group; and
(2) Until the training business has been adequately developed and generating
significant 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 emergency measures taken within mainland China and Hong Kong to combat the
COVID-19 pandemic may continue, could be expanded, and could also be
reintroduced in the future following relaxation. As these 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
within mainland China and in Hong Kong 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, these 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 has not adopted 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 as far 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, considering 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;
· the Board is not subject to the provisions of a formal governance
code and given its present size do not intend to formally adopt any specific
code nor any diversity policy, but will apply the principles of governance,
set out in the UK Corporate Governance Code, once the Group has achieved
sufficient growth;
· the Corporate Governance Code recommends the submission of all
directors for re-election at annual intervals. 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; and
· the Company may seek to transfer from a Standard Listing to either a
Premium Listing or other appropriate listing venue, based on sufficient
growth, subject to fulfilling the relevant eligibility criteria at the time.
If the Group is successful in obtaining a Premium Listing, further rules will
apply to the Company under the Listing Rules and Disclosure and Transparency
Rules and the Company will be obliged to comply with the Model Code and to
comply or explain any derogation from the UK Corporate Governance Code.
Directors' responsibility statement
The Directors are responsible for preparing the management report, annual
report (and mid-year 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.
Legislation in the Cayman Islands governing the preparation and dissemination
of the accounts and the other information included in annual reports (and mid
year 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 mid-year 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
18 DECEMBER 2023
GRAND FORTUNE HIGH GRADE LIMITED
FOR THE PERIOD ENDED 31 OCTOBER 2023
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
1 May 2023 1 May 2022
Note to 31 October 2023 to 31 October 2022
£ £
Revenue - 18,395
Administrative expenses 4 (348,888) (180,146)
Operating Loss (348,888) (161,750)
Finance income 12,320 90
Loss before tax (336,568) (161,660)
Taxation 5 - -
Loss after tax and total comprehensive loss for the period attributable to the (336,568) (161,660)
equity holders of the Group
Loss per Ordinary Share:
Basic and diluted (pence) 6 (0.21) (0.10)
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 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At as As at
Note 31 October 2023 31 October 2022
£ £
Assets
Current assets
Cash and cash equivalents 1,092,763 1,595,832
Total assets 1,092,763 1,595,832
Equity and liabilities
Capital and reserves
Share capital 9 4,311,700 4,311,700
Accumulated losses (3,269,182) (2,734,066)
Total equity attributable to equity holders of the Group 1,042,518 1,577,634
Current liabilities
Amounts owing to Directors 10 9,745 7,698
Other payables 7 40,500 10,500
Total liabilities 50,245 18,198
Total equity and liabilities 1,092,763 1,595,832
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 18 December
2023 and signed on its behalf by;
"Wong Lee Chun"
Chief Executive Officer
GRAND FORTUNE HIGH GRADE LIMITED
FOR THE PERIOD ENDED 31 OCTOBER 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Based
Note Share Payment Accumulated
Capital Reserve Losses Total
£ £ £ £
Balance as at 30 April 2021 4,311,700 - (2,290,539) 2,021,161
Loss for the year after taxation (281,868) (281,868)
Balance as at 30 April 2022 4,311,700 - (2,572,407) 1,739,293
Loss for the period after taxation (360,212) (360,212)
Balance as at 30 April 2023 4,311,700 - (2,932,619) 1,379,081
Loss for the period after taxation (336,568) (336,568)
Balance as at 31 October 2023 4,311,700 - (3,269,187) 1,042,513
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 2023
CONSOLIDATED CASH FLOW STATEMENT
1 May 2023 1 May 2022
to 31 October 2023 to 31 October 2022
£ £
Cash flows from operating activities
Loss for the period before taxation (336,568) (161,660)
Adjustments
Bank interest income (12,320) (90)
Foreign currency (gain)/loss (8,323) (34,985)
Operating loss before working capital adjustments (357,211) (196,735)
Working capital adjustments:
(Decrease)/Increase in other payables - (9,540)
(Decrease)/Increase Amounts due to Directors 2,853 166
Net cash used in operating activities (354,358) (206,109)
Cash flows from investing activities
Interest received 12,320 90
Net cash flow from investing activities 12,320 90
(Decrease) in cash (206,019)
(342,038)
Cash and cash equivalents, beginning of the period 1,426,479 1,766,865
Effects of currency translation on cash and cash equivalents 8,323 34,985
Cash and cash equivalents, end of the period 1,595,832
1,092,763
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 principal place of business is Flat/Rm 1, 8/F, Metex House, No.
28 Fui Yiu Kok Street, Tsuen Wan, New Territories, Hong Kong.
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 both years presented.
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 Grand Fortune High Grade Limited.
The financial statements are presented on a consolidated basis and include the
accounts of Grand Fortune High Grade Limited, Grand Fortune High Grade (HK)
Limited and Shen Zhen Shi Ji Fu Education Information Consulting Co. Ltd.
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.
2. Accounting Policies (continued)
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 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 2023, the Group's
cash position was £1,092,763.
After reviewing the Group's budget for the period ending 31 October 2024 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 the 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 year. 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.
2. Accounting Policies (continued)
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.
2. Accounting Policies (continued)
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. There
were no critical estimates during the period ended 31 October 2023.
4. Administrative expenses
1 May 2023 1 May 2022
to 31 October 2023 to 31 October 2022
£ £
Directors Remuneration 62,709 45,691
Key Management personnel 4,806 3,136
Rental Expenses 36,428 5,090
Salaries/Wages 80,314 60,597
Office/General Expenses 15,016 10,678
Legal and Professional Fees 155,794 88,139
Bank Charges 2,144 1,799
Foreign currency (gain) / loss (8,323) (34,985)
348,888 180,145
The remuneration of the auditors for the audit of the annual financial
statements was £40,000 (2022: £17,500).
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. As the Group's expenses exceeded its revenue for
the period ended 31 October 2023, 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 2023 1 May 2022
to 31 October 2023 to 31 October 2022
Loss attributable to equity holders (£) (336,568) (161,660)
Weighted average number of Ordinary Shares 160,000,000 160,000,000
Earnings per share (pence) (0.21) (0.10)
7. Other payables
As at As at
31 October 2023 31 October 2022
£ £
Accurals 40,500 10,500
40,500 10,500
8. 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 2023 31 October 2022
£ £
Zhao Zhijun 4,806 3,136
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 2023 31 October 2022
£ £
Wong Lee Chun 30,500 18,000
Angus Irvine 21,000 21,000
Ko Kwan 11,209 6,691
62,709 45,691
9. Share capital
As at As at
31 October 2023 31 October 2022
£ £
160,000,000 Ordinary Shares 4,311,700 4,311,700
4,311,700 4,311,700
Grand Fortune High Grade Limited is authorized to issue up to 100,000,000,000
ordinary shares with a par value of £0.0001 per ordinary share.
10. Amounts owing to Directors
As at As at
31 October 2023 31 October 2022
£ £
Directors Fees 9,745 14,198
9,745 14,198
The above Directors fees payable relate to directors' remuneration between 1
May 2018 and the respective periods listed above. As of 31 October 2023, the
only amounts owing to Directors are the amounts for fees accrued for October
2023 as all other outstanding amounts were paid during the period ended 31
October 2023.
11. Financial instruments
Financial assets at amortized cost As at As at
31 October 2023 31 October 2022
£ £
Other receivables - -
Cash and cash equivalents 1,092,763 1,595,832
Total financial assets 1,092,763 1,595,832
Financial liabilities at amortised cost
Amounts owing to Directors 9,745 7,698
Other payables 40,500 10,500
Total financial liabilities 50,245 18,198
12. 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.
12. Financial risk management (continued)
Period Ended Period Ended
31 October 2023 31 October 2022
£ £
GBP Increases by 10%
HKD portion of Cash and cash equivalents (12,229) (26,966)
USD portion of Cash and cash equivalents (2,136) (6,645)
RMB portion of Cash and cash equivalents (4,356) (4,601)
GBP Decreases by 10%
HKD portion of Cash and cash equivalents 14,946 32,958
USD portion of Cash and cash equivalents 2,611 8,121
RMB portion of Cash and cash equivalents 5,325 5,623
Period end exchange rates applied in the above analysis are HKD 9.49051 (2022
- HKD 9.1118, USD 1.21349 (2022 - USD 1.16083) and RMB 8.86093 (2022 - RMB
8.41247).
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 £1,092,763 as at 31 October 2023. The credit risk from its
liquid funds is limited as the counter parties are banks with high credit
ratings.
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 (all amounts due within 30 days).
The Directors have prepared cash flow projections on a monthly basis through
to 31 October 2024. 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.
13. 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.
14. 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. The total
amount of entitlement increased to HKD 40,000 per month on May 1, 2023.
At the same time as the resignation of Anthony Wonnacott (1 October 2021) from
the board of directors of the Company, Grand Fortune High Grade Limited
entered into a consulting agreement with Wonnacott Consulting Professional
Corporation (an entity controlled by Anthony Wonnacott) pursuant to which Mr.
Wonnacott was engaged as a corporate advisor to the Company with remuneration
of £2,500 per month (total charged by Mr. Wonnacott of £15,000 during the
period ended 31 October 2022). Mr. Wonnacott is a related party by virtue of
being a former director of the Company.
Additionally, on 1 June 2023, Grand Fortune High Grade Limited entered into a
consulting agreement with Kit Ling Law pursuant to which Ms. Law was engaged
as a consultant to the Company with remuneration of HKD 40,000 per month
(total charged by Ms. Law of HKD 200,00 during the period ended 31 October
2023). Ms. Law is a related party by virtue of being a significant
shareholder as well as a former director of the Company.
All other amounts owing to directors relate to directors' remuneration accrued
between May 2018 and the period ended 31 October 2023, see note 8 and 10 for a
summary.
15. Ultimate controlling party
As at 31 October 2023, the Group did not have any one identifiable controlling
party.
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