TIDMGFHG
RNS Number : 0793W
Grand Fortune High Grade Limited
17 December 2021
GRAND FORTUNE HIGH GRADE LIMITED
CONSOLIDATED REPORTS AND FINANCIAL STATEMENTS
FOR THE PERIODED 31 OCTOBER 2021
GRAND FORTUNE HIGH GRADE LIMITED
CHAIRMAN'S STATEMENT
FOR THE PERIODED 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 GBP156,975 (loss of
GBP174,815 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 GBP1.85 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 PERIODED 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 GBP156,975 (loss of GBP174,815 for the
period from 1 May 2020 to 31 October 2020) .
The Group had cash at bank and in hand of GBP1,870,687 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 Approximate % Holding
Shares
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 GBP1,870,687.
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 PERIODED 31 OCTOBER 2021
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
1 May 2021 1 May 2020
Note to 31 October to 31 October
2021 2020
GBP GBP
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 the Group (156,975) (174,815)
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 PERIODED 31 OCTOBER 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At as As at
Note 31 October 2021 31 October 2020
GBP GBP
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 PERIODED 31 OCTOBER 2021
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 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 PERIODED 31 OCTOBER 2021
CONSOLIDATED CASH FLOW STATEMENT
1 May 2021 1 May 2020
to 31 October to 31 October
2021 2020
GBP GBP
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 GBP1,870,687 .
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 to 31 October
2021 2020
GBP GBP
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 to 31 October
2021 2020
Loss attributable to equity
holders (GBP) (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 31 October
2021 2020
GBP GBP
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 31 October
2021 2020
GBP GBP
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 31 October
2021 2020
GBP GBP
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
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 (see Note 17).
The following table summarizes the Group's outstanding
warrants:
Period Ended Share Based Period Ended Share Based
31 October Payment 31 October Payment
2020 Charge 2020 Charge
GBP GBP
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
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.
12. Amounts owing to Directors
As at As at
31 October 31 October
2021 2020
GBP GBP
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
As at As at
31 October 31 October
2021 2020
Financial assets GBP GBP
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 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.
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 31 October
2021 2020
GBP GBP
------------------------------------------------- -------------------- --------------------
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 GBP1,870,687 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.
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END
IR BXBDDXXBDGBR
(END) Dow Jones Newswires
December 17, 2021 08:39 ET (13:39 GMT)
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