TIDMGFHG
RNS Number : 9001U
Grand Fortune High Grade Limited
27 November 2019
GRAND FORTUNE HIGH GRADE LIMITED
CONSOLIDATED REPORTS AND FINANCIAL STATEMENTS
FOR THE PERIODED 31 OCTOBER 2019
CONTENTS
PAGES
Officers and professional advisors 1
Chairman's statement
2
Directors' report
3 - 7
Consolidated Statement of comprehensive income 8
Consolidated Statement of financial position 9
Consolidated Statement of changes in equity 10
Consolidated Cash flow statement 11
Notes to the consolidated financial statements 12 - 24
GRAND FORTUNE HIGH GRADE LIMITED
OFFICERS AND PROFESSIONAL ADVISORS
Officers and Directors Kit Ling Law (Chairman and Chief
Financial Officer)
Wong Lee Chun (Chief Executive
Officer)
Angus Sigurd Irvine (Non-Executive
Director)
Anthony Wonnacott (Non-Executive
Director)
Registered Office Willow House
Cricket Square
PO Box 709
Grand Cayman
KY1-117
Cayman Islands
------------------------------------
Solicitors to the Group as to Fladgate LLP
English Law 16 Great Queen Street
London WC2B 5DG
------------------------------------
Attorneys to the Group as to Collas Crill
Cayman Island Law Floor 2, Willow House
PO Box 709
Cricket Square
Grand Cayman KY1-1107
Cayman Islands
------------------------------------
Auditors and Reporting Accountants Crowe U.K. LLP
St. Bride's House
10 Salisbury Square
London
EC4Y 8EH
------------------------------------
Broker Pello Capital Limited
7(th) Floor
10 Lower Thames Street
London
EC3R 6AF
------------------------------------
Registrar Computershare Investor Services
(Cayman) Limited
The R&H Trust Co Ltd
Winward 1
Regatta Office Park
West Bay Road
Grand Cayman KY1-1103
Cayman Islands
------------------------------------
Depositary Computershare Investor Services
PLC
The Pavilions
Bridgwater Road
Bristol BS99 7NH
United Kingdom
------------------------------------
Website www.gf-hg.com
------------------------------------
GRAND FORTUNE HIGH GRADE LIMITED
CHAIRMAN'S STATEMENT
FOR THE PERIODED 31 OCTOBER 2019
I am pleased to present the accounts for the period from 1 May
2019 to 31 October 2019. During the period, the Group reported a
loss of GBP192,302 (loss of GBP251,936 for the period from 1 May
2018 to 31 October 2018) 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 GBP2.6 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 has 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.). Additionally, on 22 May 2018, the
Group announced that it had acquired the exclusive perpetual rights
to utilise and market all of the educational materials owned by
Global Academy of Investment and Wealth Management in Asia and
Europe. As the cost related to the acquisition of these educational
materials did not prove to generate future benefits, it was fully
impaired during the year ended 30 April 2019.
Grand Fortune High Grade Limited held its shareholder meeting on
21 October 2019. All items proposed were approved by 100% of the
votes cast at the meeting. Following the meeting, the Board of
Directors was comprised of Kit Ling Law (re-elected), Angus Irvine
(re-elected), Wong Lee Chun (re-elected) and Anthony Wonnacott
(re-elected).
All of these efforts have resulted in the enrolment of students
into courses offered by the Group and the Group being pleased to
report revenue from these activities, albeit minimal, in these
consolidated reports and financial statements. 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.
KIT LING LAW
CHAIRMAN
18 NOVEMBER 2019
GRAND FORTUNE HIGH GRADE LIMITED
DIRECTORS' REPORT
FOR THE PERIODED 31 OCTOBER 2019
Directors' report
The directors present their report together with the
consolidated financial statements for the period ended 31 October
2019.
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.
Principles of consolidation
The consolidated financial statements comprise of the financial
statements of Grand Fortune High Grade Limited, its wholly owned
Hong Kong subsidiary, GFHG HK and GFHG HK's wholly owned Chinese
subsidiary Ji Fu Education.
Subsidiaries
Subsidiaries consist of entities through which Grand Fortune
High Grade Limited is exposed to, or has rights to, variable
returns as well as the ability to affect those returns through the
power to direct the relevant activities of the entity. Subsidiaries
are fully consolidated from the date control is transferred to
Grand Fortune High Grade Limited and are de-consolidated from the
date control ceases. The financial statements include all the
assets, liabilities, revenues, expenses and cash flows of Grand
Fortune High Grade Limited and its subsidiaries after eliminating
inter-entity balances and transactions.
Business review and management report
The loss on ordinary activities for the period from 1 May 2019
to 31 October 2019 was of GBP192,302 (loss of GBP251,936 for the
period from 1 May 2018 to 31 October 2018).
The Group had cash at bank and in hand of GBP2,651,979 at 31
October 2019. 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.
GRAND FORTUNE HIGH GRADE LIMITED
DIRECTORS' REPORT
FOR THE PERIODED 31 OCTOBER 2019
(CONTINUED)
Directors
The following directors served during the period to 31 October
2019:
KIT LING LAW - CHAIRMAN AND CHIEF FINANCIAL OFFICER
WONG LEE CHUN - CHIEF EXECUTIVE OFFICER
ANGUS SIGURD IRVINE - NON-EXECUTIVE DIRECTOR
ANTHONY WONNACOTT - 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 Approximate % Holding
Shares
Kit Ling Law 46,800,000 29.25%
Hundred River Ltd. (Wong
Lee Chun) 31,996,100 19.99%
Xia Ya Li 6,650,000 4.16%
Wu Mei Juan 6,650,000 4.16%
Directors' Remuneration
Directors' emoluments are detailed in Notes 9 and 12 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 21 October 2019.
GRAND FORTUNE HIGH GRADE LIMITED
DIRECTORS' REPORT
FOR THE PERIODED 31 OCTOBER 2019
(CONTINUED)
Share capital, Warrants and voting rights
On 17 May 2017, Grand Fortune High Grade Limited entered into
warrant agreements with each of Alice Lau, Vincent Poon, Wai Man
Hui and Pello Capital Limited (previously Cornhill Capital Limited)
conferring the right to subscribe for 4,800,000 ordinary shares
each (a total of 19,200,000 ordinary shares). Each Warrant
Agreement is in an identical form and confers the right to
subscriber for ordinary shares at GBP0.10. The warrants were
conditional on admission to the London Stock Exchange (which was
completed on 22 May 2017) and the warrants can be exercised at any
time until 22 May 2020.
On 22 May 2017, Grand Fortune High Grade Limited completed the
placing of 43,000,000 ordinary shares issued at a price of GBP0.10
per ordinary share for gross proceeds of GBP4,300,000. In
connection with the placing, the ordinary shares of Grand Fortune
High Grade Limited were admitted by the Financial Conduct Authority
(FC) to a Standard Listing on the Official List in accordance with
Chapter 14 of the Listing Rules and commenced trading on the London
Stock Exchange's main market for listed securities.
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 and a small amount of revenue from
certain course offerings, 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 2019, the Group's cash position was
GBP2,651,979.
After reviewing the Group's budget for the period ending 31
October 2020 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.
GRAND FORTUNE HIGH GRADE LIMITED
DIRECTORS' REPORT
FOR THE PERIODED 31 OCTOBER 2019
(CONTINUED)
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 2019, apart from a small amount of interest receivable and
a small amount of revenue from certain course offerings, the Group
currently had limited revenue - there are no guarantees that the
Group will develop a training business that will generate
significant revenue; 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.
Corporate governance
As a company with a Standard Listing, the Group is not required
to comply with the provisions of the Corporate Governance Code.
Although, the Group does not comply with the UK Corporate
Governance Code, the Group intends to adopt 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 Corporate Governance Code insofar as is
appropriate. A description of these procedures is set out
below:
-- As the Group is a start-up it will 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".
GRAND FORTUNE HIGH GRADE LIMITED
DIRECTORS' REPORT
FOR THE PERIODED 31 OCTOBER 2019
(CONTINUED)
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
KIT LING LAW
CHAIRMAN
18 NOVEMBER 2019
GRAND FORTUNE HIGH GRADE LIMITED
FOR THE PERIODED 31 OCTOBER 2019
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
1 May 2019 1 May 2018
Note to 31 October to 31 October
2019 2018
GBP GBP
Revenue (26) 9,688
Administrative expenses 4 (192,465) (261,784)
Operating Loss (192,492) (252,096)
Finance income 189 160
Loss before tax (192,302) (251,936)
Taxation 5 - -
Total comprehensive loss for
the period attributable to
the equity holders of the Group (192,302) (251,936)
Loss per Ordinary Share:
Basic and diluted (pence) 6 (0.12) (0.16)
The notes to the consolidated financial statements form an integral
part of these consolidated financial statements.
GRAND FORTUNE HIGH GRADE LIMITED
FOR THE PERIODED 31 OCTOBER 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At as As at
Note 31 October 2019 31 October 2018
GBP GBP
Assets
Current assets
Other receivables 7 9,688 9,688
Cash and cash equivalents 2,651,979 3,118,011
Total assets 2,661,667 3,127,699
Equity and liabilities
Capital and reserves
Share capital 10 4,311,700 4,311,700
Share Based Payment Reserve 11 646,637 646,637
Accumulated losses (2,314,972) (1,856,219)
Total equity attributable to
equity holders of the Group 2,643,365 3,102,118
Current liabilities
Amounts owing to Directors 12 18,302 19,981
Other payables 8 - 5,600
Total liabilities 18,302 25,581
Total equity and liabilities 2,661,667 3,127,699
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 November 2019 and signed on its behalf by;
..........................................Kit Ling Law -
Chairman
GRAND FORTUNE HIGH GRADE LIMITED
FOR THE PERIODED 31 OCTOBER 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Based
Note Share Payment Accumulated
Capital Reserve Losses Total
GBP GBP GBP GBP
Balance as at 30 April 2017 11,700 - (308,718) (297,018)
Balance on 30 April 2017 11,700 - (308,718) (297,018)
Loss for the year after taxation - - (1,295,565) (1,295,565)
Total comprehensive balances 11,700 - (1,604,283) (1,592,583)
Ordinary Shares Issued 10 4,300,000 - - 4,300,000
Share Based Payments 11 646,637 - 646,637
Transactions with owners 4,300,000 - - -
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
Transactions with owners - - - -
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 period after
taxation (192,302) (192,302)
Total comprehensive balances 4,311,700 646,637 (2,314,972) 2,643,365
Transactions with owners - - - -
Balance as at 31 October
2019 4,311,700 646,637 (2,314,972) 2,643,365
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 PERIODED 31 OCTOBER 2019
CONSOLIDATED CASH FLOW STATEMENT
1 May 2019 1 May 2018
to 31 October to 31 October
2019 2018
GBP GBP
Cash flows from operating activities
Loss for the period before taxation (192,302) (251,936)
Share based payment charge - -
Finance income (180) (159)
Adjustments for non-cash items:
Share based payment charge - -
Foreign currency loss/(gain) (3,697) (8,401)
Working capital adjustments:
Decrease in other receivables - (9,688)
(Decrease)/Increase in other payables (11,647) (14,733)
Foreign currency loss/gain (Bank
Charges) 3,697 8,401
Net cash used in operating activities (204,129) (276,516)
Cash flows from investing activities
Interest received 180 159
Net cash flow from investing activities 180 159
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 (203,949) (276,357)
Cash and cash equivalents, beginning
of the period 2,855,928 3,394,368
Cash and cash equivalents, end
of the period 2,651,979 3,118,011
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.
Comparative figures
The financial information presents the comparative figures for
the period from 1 May 2019 to 31 October 2019 and the financial
information for the period from 1 May 2018 to 31 October 2018.
These comparatives are comparable as they represent the same period
lengths.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. Accounting Policies (continued)
Adoption of new and revised International Financial Reporting
Standards
This is the first interim set of Group financial statements in
which IFRS 15 Revenue from Contract with Customers (in respect of
revenue recognition for revenue) and IFRS 9 Financial Instruments
(in respect of the impact of the expected loss model on the
impairment of receivables) have been applied.
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, specifically being the adoption of IFRS 16, 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 and a small amount of revenue from
certain course offerings, 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 2019, the Group's cash position was
GBP2,651,979.
After reviewing the Group's budget for the period ending 31
October 2020 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.
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 classified and measured at
fair value, with changes in fair value recognized in profit and
loss as they arise ("FVPL"), unless restrictive criteria are met
for classifying and measuring the asset at either amortised cost or
fair value through other comprehensive income ("FVOCI"). The
classification depends on the basis on which assets are
measured.
The Group has classified cash and cash equivalents as FVPL.
As at the consolidated balance sheet date, the Group did not
have any financial assets measured at amortised cost 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. Accounting Policies (continued)
Financial liabilities
All financial liabilities are measured at amortised cost.
Other financial liabilities
The Director's loan is initially measured at amortised cost, net
of transaction costs, and is 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.
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. Accounting Policies (continued)
Revenue Recognition
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the
consideration to which the Group expected to be entitled in
exchange for transferring goods or services to a customer.
Rendering of services
Revenue is recognised on the provision of the financial training
course in China.
Interest
Interest revenue is recognised as interest is received.
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
to be 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.
The Group's nature of operations is to develop and run financial
training courses in China. The Group acquired the rights to
training materials during the year ended 30 April 2019. The cost
related to this acquisition did not meet the criteria for
capitalization. Hence, it was fully impaired during the year ended
30 April 2019.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
4. Administrative expenses
1 May 2019 1 May 2018
to 31 October to 31 October
2019 2018
GBP GBP
Directors remuneration 69,000 80,994
Key Management personnel 4,765 15,955
Rental Expenses 3,434 573
Salaries/Wages 71,312 13,651
Legal and professional fees 45,832 156,989
Bank charges 1,819 2,023
Foreign currency (gain) /
loss (3,697) (8,401)
192,465 261,784
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 2019, it has not accrued any tax amount
payable.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 2019 1 May 2018
to 31 October to 31 October
2019 2018
Loss attributable to equity
holders (GBP) (192,302) (251,936)
Weighted average number of
Ordinary Shares 160,000,000 160,000,000
Earnings per share (pence) (0.12) (0.16)
7. Other receivables
As at As at
31 October 2019 31 October 2018
GBP GBP
Accounts Receivable 9,688 9,688
Prepayments - -
9,688 9,688
8. Other payables
As at As at
31 October 2019 31 October 2018
GBP GBP
Accounts Payable - 5,600
Accruals - -
- 5,600
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 31 October
2019 2018
GBP GBP
Zhao Zhijun 4,765 15,955
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 31 October
2019 2018
GBP GBP
Hong Lin Cao - -
Yan Wing Laurence Cheung 13 2,192
Wong Lee Chun 2,903 2,903
Angus Irvine 3,500 3,500
Sandy Jadeja - -
Kit Ling Law 1,500 4,500
Anthony Wonnacott 10,386 6,886
Yan Xu - -
Yong Yan - -
18,302 19,981
10. Share capital
As at As at
31 October 31 October
2019 2018
GBP GBP
117,000,000 Ordinary Shares of
GBP0.001 each, fully paid 11,700 11,700
43,000,000 Ordinary Shares of
GBP0.10 each, fully paid 4,300,000 4,300,000
4,311,700 4,311,700
On 22 May 2017, Grand Fortune High Grade Limited allotted a
further 43,000,000 Ordinary Shares at GBP0.10 each for total cash
consideration of GBP4,300,000.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
11. Share based payments
The following share-based payment amounts are included in the
consolidated statement of comprehensive income (included in
Administrative Expenses - see Note 0) and as a line item in the
consolidated cash flow statement:
Period Ended Period Ended
31 October 31 October
2019 2018
GBP GBP
Warrants - -
Total Share-Based Payments - -
On 17 May 2017 Grand Fortune High Grade Limited entered into
warrant agreements with each of Alice Lau, Vincent Poon, Wai Man
Hui and Pello Capital Limited (previously 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 GBP0.10. 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.
The following table summarizes the Group's outstanding
warrants:
Period Ended Share Based Period Ended Share Based
31 October Payment 31 October Payment
2019 Charge 2018 Charge
GBP GBP
Opening Position 19,200,000 646,637 19,200,000 646,637
------------- ------------------- ------------- -------------------
Granted - - - -
------------- ------------------- ------------- -------------------
Exercised - - - -
------------- ------------------- ------------- -------------------
Closing Position 19,200,000 646,637 19,200,000 646,637
------------- ------------------- ------------- -------------------
The aggregate fair value of the Warrants was estimated at
GBP646,637 (fair value of individual warrant was GBP0.0337) 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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
12. Amounts owing to Directors
As at As at
31 October 31 October
2019 2018
GBP GBP
Kit Ling Law - -
Directors Fees 18,302 19,981
18,302 19,981
During the period from incorporation 10 November 2015 to the
period ended 30 April 2018, Kit Ling Law loaned Grand Fortune High
Grade Limited a total of GBP100,402. During the year from 1 May
2017 to 30 April 2018 the Group repaid, in full, Kit Ling Law a
total of GBP100,402.
The maximum amount owing to Kit Ling Law during the period ended
30 April 2018 was GBP121,402, however the entire amount was repaid
and there is no amount outstanding as of 31 October 2019. Kit Ling
Law is a related party by virtue of her being Chairman and
shareholder of Grand Fortune High Grade Limited.
The above Directors fees payable relates to directors'
remuneration between April 2016 and the respective periods listed
above. As of 31 October 2019, the only amounts owing to Directors
are the amounts for fees accrued from August 2019 to October 2019
as all other outstanding amounts were paid during the period ended
31 October 2019.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
13. Financial instruments
As at As at
31 October 31 October
2019 2018
Financial assets GBP GBP
Loans and receivables
Cash and cash equivalents 2,651,979 3,118,011
Total financial assets 2,651,979 3,118,011
Financial liabilities at amortised
cost
Amounts owing to Directors 18,302 19,981
Other payables - 5,600
Total financial liabilities 18,302 25,581
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 GBP. 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
14. Financial risk management (continued)
The table below illustrates the hypothetical sensitivity of the
Group's statement of comprehensive income to a 10% increase and
decrease in the GBP/HKD and GBP/USD exchange rates at the year-end
date, assuming all other variables remain unchanged. The
sensitivity rate of 10% represents the directors' assessment of a
reasonably possible change, based on historic volatility. Positive
figures represent an increase in income.
Period Ended Period Ended
31 October 31 October
2019 2018
GBP GBP
----------------------------- -------------------- --------------------
GBP Increases by 10%
HKD 1,622 1,675
USD 531 988
RMB 8,035 -
----------------------------- -------------------- --------------------
GBP Decreases by 10%
HKD (1,058) (3,857)
USD (412) (2,341)
RMB (3,810) -
Period end exchange rates applied in the above analysis are HKD
10.0963 (2018 - HKD 10.0051), USD 1.28782 (2018 - USD 1.27549) and
RMB 9.08835 (2018 - no expenses in RMB).
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 GBP2,651,979 as at 31
October 2019. 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 2020. 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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
All other amounts owing to directors relate to directors'
remuneration accrued between April 2016 and the period ended 31
October 2019, see note 9 and 12 for a summary.
18. Ultimate controlling party
As at 31 October 2019, 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 or visit www.rns.com.
END
IR BLBDBDBDBGCR
(END) Dow Jones Newswires
November 27, 2019 11:30 ET (16:30 GMT)
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