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GIPO Grand Grp

10.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Grand Grp LSE:GIPO London Ordinary Share KYG405631014 ORD £0.00004 (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 10.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Grand Group Investment PLC Half-year Report (1420S)

28/09/2017 3:17pm

UK Regulatory


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TIDMGIPO

RNS Number : 1420S

Grand Group Investment PLC

28 September 2017

 
   28 September 2017 
 

Grand Group Investment PLC

("Grand Group", the "Company" or the "Group")

Interim Results

Grand Group Investment PLC (AIM:GIPO), a provider of expansion capital and value added services to China-based SMEs with high growth potential, today announces its interim results for the period from 1 January 2017 to 30 June 2017(the "period").

Financial Highlights

-- Total assets stand at RMB 315.5 million, and net assets at RMB 297.8 million (approximately GBP36 million and GBP34 million respectively). This compares to RMB 316.1 million and RMB 299.6 million at 31 Dec 2016.

-- The company's cash position is RMB 260 million (approximately GBP29m). This compares to RMB 62.7 million at 30 June 2016.

-- There was a loss for the period of RMB 1.8 million (approximately GBP0.2 million). This compares to loss of RMB 2.2 million for the same period in 2016.

-- NAV per share as at 30 June 2017 stood at RMB 8.77 (vs RMB 8.82 at 31 December 2016).

*The illustrative exchange rate as at 30 June 2017 was 1 GBP: 8.83 RMB

Chairman's Statement

The first half of 2017 has been a peaceful but challenging year for Grand Group. In the first six months, we continued to receive the payments from our previous investments whilst busily looking at new potential investments that fits Grand's investing policy and have potential to bring good return for the company and shareholders. In order to be able to identify more investment opportunities in the market, Grand Group decided to expand its investing policy in the last AGM.

Grand will now expand its investing policy to invest in companies operating not only within the Greater China Region, but in the Asean region, Europe and North America as well. The regional strategy is now to seek investments that not only have a China focus, but potential to expand into other markets around the world as well. The Company will not invest in the natural resource or real estate sectors. In addition to its initial focus on the Education Technology ("EdTech") space, the Company will now consider investments in Financial Technology ("Fin Tech") and the broader Media Sector, where the management team have significant experience and expertise, with a specific emphasis on opportunities in the Financial Media space.

So far, Grand has been reviewing several projects within the expanded investing policy and walking to select the most appropriate ones to invest. Our goal is to make some good and substantial investments within the year 2017.

Yang Xiao

Executive Chairman

28 September 2017

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six month period ended 30 June 2017

 
                                        30 June   31 December   30 June 
                                           2017       2016         2016 
                                Note    RMB'000     RMB'000     RMB'000 
 
 Unrealised loss on              8            -                       - 
  unquoted financial 
  assets                                                    - 
 Gain on disposal                             -                       - 
  of unquoted financial 
  assets                                               21,760 
 Investment income                            -             -         - 
 Other income                                 -           500         - 
 Administrative expenses                (2,139)       (4,130)   (2,259) 
 Financial income/(expenses)                327           186        39 
 
 Profit /(Loss) before 
  tax                                   (1,812)        18,316   (2,220) 
 Taxation                        10           -       (4,579)         - 
                                      ---------  ------------  -------- 
 
 Profit /(Loss) after 
  tax                                   (1,812)        13,737   (2,220) 
                                      ---------  ------------  -------- 
 
 Other comprehensive                          -                       - 
  income                                                    - 
 
 Total comprehensive 
  profit /(loss) for 
  the year                              (1,812)        13,737   (2,220) 
                                      ---------  ------------  -------- 
 
 Attributable to: 
 Equity holders of 
  the parent                            (1,812)        13,737   (2,220) 
 Non-controlling interests                    -             -         - 
 
                                            RMB           RMB       RMB 
 Earnings per share              12 
 Basic                                   (0.05)          0.40    (0.07) 
                                      ---------  ------------  -------- 
 Diluted                                 (0.05)          0.39    (0.07) 
                                      ---------  ------------  -------- 
 
 

GRAND GROUP INVESTMENT PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

For the six month period ended 30 June 2017

 
                                        30June2017   31 December 
                                                            2016 
                                 Note      RMB'000       RMB'000 
 Assets 
 Non-current asset: 
 Unquoted financial assets 
  at fair value through 
  profit or loss                  8              -             - 
                                       -----------  ------------ 
 
 Current assets: 
 Other receivable                 8         55,210       175,210 
 Cash and cash equivalents        13       260,304       140,844 
                                       -----------  ------------ 
                                           315,514       316,054 
                                       -----------  ------------ 
 
 Total assets                              315,514       316,054 
                                       -----------  ------------ 
 
 Equity and liabilities 
 Shareholders' Equity: 
 Share capital                    15            14            14 
 Share premium                              66,936        66,936 
 Contributed capital                       196,000       196,000 
 Warrants reserve                 17        13,283        13,283 
 Retained earnings                          21,557        23,369 
                                       -----------  ------------ 
 Equity attributable to 
  owners of the Company                    297,790       299,602 
 Non-controlling interest                       10            10 
                                       -----------  ------------ 
 
 Total equity                              297,800       299,612 
                                       -----------  ------------ 
 
 Non-current liability: 
 Deferred tax liability           11             -             - 
                                       -----------  ------------ 
 
 Current liabilities: 
 Other payable and accruals                 16,497        15,451 
 Amounts due to shareholders      14         1,217           991 
                                       -----------  ------------ 
                                            17,714        16,442 
                                       -----------  ------------ 
 
 Total liabilities                          17,714        16,442 
                                       -----------  ------------ 
 
 Total equity and liabilities              315,514       316,054 
                                       -----------  ------------ 
 

GRAND GROUP INVESTMENT PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six month period ended 30 June 2017

 
 
                                                                                                     Non- 
                        Share     Share   Contributed     Warrants    Retained        Sub-    controlling        Total 
                      capital   Premium       capital      reserve    earnings       Total       Interest       Equity 
                      RMB'000   RMB'000       RMB'000      RMB'000     RMB'000     RMB'000        RMB'000      RMB'000 
 
 At 31 December 
  2014                     10         -       196,000            -     204,975     400,985              -      400,985 
                     --------  --------  ------------  -----------  ----------  ----------  -------------  ----------- 
 Issued share 
  capital                   4    66,936             -            -           -      66,940              -       66,940 
 Issued warrants            -         -             -       13,283           -      13,283              -       13,283 
 Total 
  comprehensive 
  loss for 
  the year                  -         -             -            -   (195,343)   (195,343)              -    (195,343) 
 Non- controlling 
  interest                  -         -             -            -           -           -             10           10 
                     --------  --------  ------------  -----------  ----------  ----------  -------------  ----------- 
 At 31 December 
  2015                     14    66,936       196,000       13,283       9,632     285,865             10      285,875 
 Total 
  comprehensive 
  profit for 
  the year                  -         -             -            -      13,737      13,737              -       13,737 
 At 31 December 
  2016                     14    66,936       196,000       13,283      23,369     299,602             10      299,612 
                     --------  --------  ------------  -----------  ----------  ----------  -------------  ----------- 
 Total 
  comprehensive 
  profit for 
  the year                  -         -             -            -       1,812       1,811              -       13,737 
                     --------  --------  ------------  -----------  ----------  ----------  -------------  ----------- 
 At 30 June 
  2017                     14    66,936       196,000       13,283      21,557     297,790             10      297,800 
                     --------  --------  ------------  -----------  ----------  ----------  -------------  ----------- 
 

GRAND GROUP INVESTMENT PLC

CONSOLIDATED CASH FLOW STATEMENT

For the six month period ended 30 June 2017

 
                                         30 June 2017   31 December 
                                                               2016 
                                  Note        RMB'000       RMB'000 
 Cashflows from operating 
  activities 
 Profit /(Loss) before 
  tax                                           (375)        18,316 
 Adjustments: 
   Unrealised loss on unquoted                      -             - 
    financial assets               8 
   Finance income                                   -      (21,760) 
   Warrant expenses                                 -             - 
 Increase in other payables 
  and accruals                                  689           (287) 
 Net cash outflow from 
  operating activities                            314       (3,731) 
                                        -------------  ------------ 
 
 Cash flows from investing 
  activity 
 Dividend received from                             -             - 
  unquoted financial assets 
  at fair value through 
  profit or loss 
 Cash received from disposal 
  of financial assets              8       120,000           90,000 
 Acquisition of unquoted 
  financial assets at 
  fair value through profit 
  or loss                          8                -             - 
 Net cash inflow / (outflow) 
  from investing activity                  120,000           90,000 
                                        -------------  ------------ 
 
 Cash flows from financing 
  activities 
 Cash proceeds from issue                           -             - 
  of shares 
 Amounts (repay) / from 
  shareholders                                    226      (12,057) 
                                        -------------  ------------ 
 Net cash (outflow) / 
  inflow from financing 
  activities                                      226      (12,057) 
                                        -------------  ------------ 
 
 Net increase in cash 
  and cash equivalents                        120,540        74,212 
 Cash and cash equivalents 
  at the beginning of 
  year                                        140,844        66,632 
                                        -------------  ------------ 
 Cash and cash equivalents 
  at the end of year                          261,384       140,844 
                                        -------------  ------------ 
 
 

GRAND GROUP INVESTMENT PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the six month period ended 30 June 2017

   1.     GENERAL INFORMATION 

Grand Group Investment Plc ("Grand Group" or the "Company") was incorporated and domiciled in the British Cayman Islands on 4 March 2014 and its registered office is 89 Nexus Way, Camana Bay, KY1-9007, British Cayman Islands. The principal place of business is Room 2023, South Building, Lihu Technology Innovation Center, No.11, Wuhu Road, Wuxi City, Jiangsu Province, People's Republic of China.

The Company's shares were listed on the AIM, a market operated by the London Stock Exchange on 27 January 2015.

The company is a value-added and technology innovation private equity investment vehicle, which principally focuses on investing in small & medium sized enterprises in the People's Republic of China.

   2.     RECENT ACCOUNTING PRONOUNCEMENTS 
   (a)      New interpretations and revised standards effective for the year ended 30 June 2017 

The Group has adopted the new interpretations and revised standards effective for the year ended 30 June 2017. The adoption of these interpretations and revised standards had no impact on the disclosures and presentation of the nancial statements during the year.

(b) Standards and interpretations in issue but not yet effective

Standards issued but not yet effective up to the date of issuance of the Group's financial statements, which the Group reasonably expects to be applicable at a further date, are listed below. The Group does not intend to adopt those standards until they become effective.

 
                                              Effective for 
                                                 accounting 
                                               period on or 
                                                     after: 
 IFRS 7 (amended)   Financial Instruments:   1 January 2018 
                     Disclosure 
 IFRS 9             Financial Instruments    1 January 2018 
 IFRS 15            Revenue from contracts   1 January 2018 
                     with customers 
 
 

The Directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements.

   3.     ACCOUNTING POLICIES 
   a)     Basis of Preparation 

The consolidated financial information has been prepared in accordance with International Financial Reporting Standards ("IFRS"), which collective term includes all applicable individual IFRS, International Accounting Standards ("IAS") and Interpretations issued by the International Accounting Standards Board ("IASB") and International Financial Reporting Interpretations Committee ("IFRIC").

The financial information has been prepared on the going concern basis and under the historical cost convention, except for the revaluation of certain financial assets, which have been measured at fair value.

The financial information is presented in Renminbi ("RMB"), rounded to the nearest thousand, unless otherwise stated.

   b)     Basis of consolidation 

The consolidated financial statements comprise the results of the Company and its subsidiaries altogether (the "Group") for the year ended 30 June 2017. Subsidiaries are all entities over which the Company exercises control or owns greater than 50 per cent of the voting rights during the year. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated in full on consolidation.

   c)     Business combination 

The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred and included in operating expenses before finance costs.

The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

   d)     Foreign currency translation 
   (i)    Functional and presentation currency 

The financial statements of the Group are presented in the currency of the primary environment in which the Company operates (its functional currency). The Directors have considered the currency to which the underlying investments are exposed. On balance, the Directors believe RMB best represents the functional currency of the Company. Therefore, the books and records are maintained in RMB and for the purpose of the financial statements the results and financial position of the Group are presented in RMB, which is also the presentation currency of the Group.

   (ii)        Transactions and balances 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income.

e) Financial Instruments

Financial assets and financial liabilities are recognised in the Consolidated Statement of Financial Position when the Group becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.

Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Unquoted financial assets at fair value through profit or loss

Classification

The Group classifies its unquoted equity interests as financial assets at fair value through profit or loss. These financial assets are designated by the Directors as at fair value through profit or loss at inception.

Financial assets designated as at fair value through profit or loss at inception are those that are managed as part of an investment portfolio and their performance evaluated on a fair value basis in accordance with the Group's investment strategy.

Recognition/derecognition

Purchases and sales of investments are recognised on the trade date - the date on which the Group commits to purchase or sell the investment.

A fair value through profit or loss asset is derecognised when the Group loses control over the contractual rights that comprise that asset. This occurs when rights are realised, expire or are surrendered and the rights to receive cash flows from the investments have expired or the Group has transferred substantially all risks and rewards of ownership. Fair value through profit or loss assets that are derecognised and corresponding receivables from the buyer for the payment are recognised as of the date the Group has transacted an unconditional disposal of the assets.

Measurement

Financial assets at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed through profit or loss. Subsequent to initial recognition, all financial assets at fair value through profit or loss are measured at fair value in accordance with IFRS13 'Fair value measurement'. For determining a suitable valuation technique the company applies International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines, as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income.

Gains and losses arising from changes in the fair value of the financial assets at fair value through profit or loss are presented in the period in which they arise.

Impairment of financial assets

An assessment for impairment is undertaken at least at the end of each reporting period whether or not there is objective evidence that a financial asset or a group of financial assets is impaired. Impairment loss on financial assets is recognised when there is objective evidence that the Group will not be able to collect all the amounts due to it in accordance with the original terms of the receivables. The amount of the impairment loss is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows.

   f)    Financial Instruments (Cont'd) 

Financial liabilities

The Group's financial liabilities include amounts due to shareholders and other payable and accruals. Financial liabilities are recognised when the Group becomes a party to the contractual provision of the instrument. All financial liabilities are recognised initially at their fair value, net of transaction costs, and subsequently measured at amortised cost, using the effective interest method, unless the effect of discounting would be insignificant, in which case they are stated at cost.

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

g) Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held on call with banks and other short term (having maturity within 3 months at inception) highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

   h)   Revenue recognition 

Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the revenue can be measured reliably and on the following basis:

l Dividend income is recognised when the Group's right to receive payment is established.

   i)   Deferred tax 

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable income, and is accounted for using the statement of financial position liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

   j)   Earnings per share 

Basic earnings per share is computed using the weighted average number of shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of shares during the period plus the dilutive effect of dilutive potential ordinary shares outstanding during the year.

   4.     ACCOUNTING ESTIMATES AND JUDGEMENTS 

Preparation of financial information in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. 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 judgements about carrying values of assets and liabilities that are not readily apparent from other sources.

In particular, significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial information are in the following areas:

Valuation of unquoted investments

In estimating the fair value for an investment, the Group applies a methodology that is appropriate in light of the nature, facts and circumstances of the investment and its materiality in the context of the total investment portfolio using reasonable market-data. Carrying values are dealt with in Note 8.

   5.     FINANCIAL RISK MANAGEMENT 
   a)       Categories of financial instruments 

The carrying amounts of the Group's financial assets and liabilities as at the end of each reporting year are as follows:

 
                                30 June2017      2016 
                                    RMB'000   RMB'000 
 Financial asset 
 Cash and cash equivalents          260,304   140,844 
 Other receivables                   55,210   175,210 
 Investments                              -         - 
                                    315,514   316,054 
 
 Financial liabilities 
 Other payables and accruals         16,497    15,451 
 Amounts due to shareholders          1,217       991 
                               ------------  -------- 
                                     17,714    16,442 
                               ------------  -------- 
 
   b)         Fair value measurement 
   i)   Fair value hierarchy 

The following table presents the fair value of the Group's financial instruments measured at the end of the reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined in IFRS 13, Fair value measurement. The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows:

-- Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

-- Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly or indirectly; and

-- Level 3 fair value measurements are those derived from inputs that are not based on observable market data.

 
                             Fair value measurement as at 
                                      30 June2017 
                           Level 1       Level 2      Level 3 
                           RMB'000       RMB'000      RMB'000 
 Unquoted financial 
  assets at fair value 
  through profit or 
  loss                           -             -            - 
                        ----------    ----------    --------- 
 
 
                             Fair value measurement as at 
                                   31 December 2016 
                           Level 1       Level 2      Level 3 
                           RMB'000       RMB'000      RMB'000 
 Unquoted financial 
  assets at fair value 
  through profit or 
  loss                           -             -            - 
                        ----------    ----------    --------- 
 

The Group did not hold any Level 1 or Level 2 financial assets at fair value through profit or loss in the period.

   c)       Financial risk management objectives and policies 

The Group is exposed to a variety of financial risks: market risk (including interest rate risk and currency risk), credit risk and liquidity risk. The risk management policies employed by the Group to manage these risks are discussed below. The primary objectives of the financial risk management function are to establish risk limits, and then ensure that exposure to risk stays within these limits. The operational and legal risk management functions are intended to ensure proper functioning of internal policies and procedures to minimise operational and legal risks.

   i)        Interest rate risks 

All cash holdings and cash equivalents are held in accounts with variable rates. The Group does not have any borrowings and therefore is not materially exposed to interest rate rise.

ii) Currency risks

Since the Group operates primarily within its local currency with little exposure to currency fluctuations, management considers that foreign currency exposure is not significant to the Group.

   c)         Financial risk management objectives and policies (Cont'd) 

iii) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. As at 30 June2017, the Group's exposure to credit risk is mainly from the collectability of other receivable from the original shareholder of the investments the Group disposed in 2016. As of the report date, the debtor's repayments complied with the agreements and management consider that the debtor have satisfactory credit quality. Besides, the Group's cash balances were placed with reputable banks.

iv) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The following tables show the remaining contractual maturities at the end of the reporting period of the Group's financial liabilities.

 
                                    More 
                                    than 
                                  1 year 
                                but less       More 
                      Within        than       than 
                      1 year     5 years    5 years     Total 
                     RMB'000     RMB'000    RMB'000   RMB'000 
 As at 30June 
  2017 
 Other payables 
  and accruals        16,497           -          -    16,497 
 Amounts due to 
  shareholders         1,217           -          -     1,217 
                    --------  ----------  ---------  -------- 
                      17,714           -          -    17,714 
                    --------  ----------  ---------  -------- 
 
 
                                       More 
                                       than 
                                     1 year 
                                   but less       More 
                         Within        than       than 
                         1 year     5 years    5 years     Total 
                        RMB'000     RMB'000    RMB'000   RMB'000 
 As at 31 December 
  2016 
 Other payables 
  and accruals           15,451           -          -    15,451 
 Amounts due to 
  shareholders              991           -          -       991 
                       --------  ----------  ---------  -------- 
                         16,442           -          -    16,442 
                       --------  ----------  ---------  -------- 
 

The Group's financial liabilities are primarily comprised of expected tax payables to PRC local tax authority.

   6.     SEGMENT REPORTING 

The Group has adopted IFRS 8, "Operating Segments". IFRS 8 defines operating segments as those activities of an entity about which separate financial information is available and which are evaluated by the Board of Directors to assess performance and determine the allocation of resources. The Board of Directors are of the opinion that under IFRS 8 the Group has only one operating segment, being the equity investment located in PRC. The Board of Directors assess the performance of the operating segment using financial information which is measured and presented in a manner consistent with that in the Financial Statements. Segmental reporting will be reviewed and considered in light of the development of the Group's businesses over the next reporting period.

   7.     INVESTMENT IN SUBSIDIARIES 

Details of the Group's subsidiaries at 31 December 2016 are as follows:

 
                                             Proportion      Proportion 
                        Place                 of ownership    of voting     Principal 
 Name of subsidiary      of incorporation     interest        power held     activity 
 Directly held 
 Great International 
  Wealth & Wisdom                                                          Investment 
  Holding Ltd           Hong Kong                     100%          100%      holding 
 
 Indirectly 
  held 
 Grand (Wuxi) 
  Investment 
  Management                                                               Investment 
  Co Ltd                PRC                           100%          100%      holding 
 Wuxi Gaoruibode 
  Management 
  Consulting 
  Co., Ltd              PRC                            99%           99%      Dormant 
 

As announced on 30 September 2016, the Group disposed of all the investments: Victory and JXT, for detail, please refer to Note 8.

   8.     UNQUOTED FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 
 
                               30June2017         2016 
                                  RMB'000      RMB'000 
 
 At 1 January                            -     243,440 
 Additions                              -            - 
 Fair value change through 
  profit or loss                        -            - 
 Disposal                                -   (243,440) 
                             -------------  ---------- 
 At 31 December                          -           - 
                             -------------  ---------- 
 

The Group is outside the scope of IAS 28 "Investments in associates" on the basis it is a private equity investment vehicle. The Group has therefore elected to measure its investment at fair value through profit or loss in accordance with IAS 39 "Financial Instruments: Recognition and Measurement".

On 30 September 2016, the Company announced that it has contracted for the sale of its entire holdings in each of Wuxi Victory Media and Culture Co., ("Victory") and Wuxi Jin Xun Tong Technology Limited ("JXT") on the following terms:

In respect of Victory, the sale of the Group's 33 per cent shareholding for a total consideration of RMB 235.2 million, to be settled in cash by instalments, with RMB 20.0 million paid within 10 working days of signature of the agreement, followed by ten monthly instalments of RMB 20.0 million with a final payment of RMB 15.2 million payable before 30 September 2017. This represents a premium of RMB 39.2 million to the Company's original April 2014 investment of RMB 196 million.

As at 30 June2017 installments had been received in a timely fashion and RMB 55.2 million was outstanding.

   9.     STAFF COSTS AND KEY MANAGEMENT EMOLUMENTS 
 
                                               31 December 
                                  30June2017          2016 
                                     RMB'000       RMB'000 
 (a) Staff costs 
 Wages and salaries                      346           481 
 Social security costs                    10            13 
                                         356           494 
                                 -----------  ------------ 
 
 (b) Key management emoluments 
 Remuneration                          1,080         2,305 
                                       1,436         2,799 
                                 -----------  ------------ 
 

The remuneration of the key management were as follows:

 
                         30June2017      2016 
                            RMB'000   RMB'000 
 Executive Directors 
 Xiao Yang                      250       500 
 Jiang Zhou                     225       450 
 Ying Ying Gu                     -       146 
 Chuang Li                      250       500 
 
 Non Executive 
  Directors 
 James Newman                   180       360 
 J. Mark Hemmann                135       270 
 Stephen Roberts                 40        79 
                        -----------  -------- 
                              1,080     2,305 
                        -----------  -------- 
 
   10.   TAXATION 
   (a)      Recognised in the statement of comprehensive income 
 
                                                 31 December 
                                   30June2017           2016 
                                      RMB'000        RMB'000 
 Corporation tax 
 Current year charge                         -         4,579 
 Deferred Enterprise Income 
  Tax credit (see note 11)                  -              - 
                                 ------------   ------------ 
 Income Tax expense / (credit) 
  attributable to the Group                  -         4,579 
                                 -------------  ------------ 
 
 

Under current British Cayman Island law, the Company is not obligated to pay any taxes in the British Cayman Islands on either income, profits or capital gains.

According to the PRC Enterprise Income Tax Law and its Detailed Implementing Rules, a foreign company established out of China where management is located inside China will be regarded as a Tax Resident Enterprise in China and subject to tax in China. Management is defined as the management and control on the overall production/business operation, personnel, books and records, and assets of the Company.

   (b)      Reconciliation of taxation 

Tax expense for the year can be reconciled to the profit / (loss) per the consolidated statement of comprehensive income as follows:

 
                                                31 December 
                                  30June2017           2016 
                                     RMB'000        RMB'000 
 
 Profit / (Loss) before tax                 -        18,316 
                                -------------  ------------ 
 
 Tax at the EIT rate of 25% 
  (2016: 25%)                               -         4,579 
 Tax effect of non-deductible 
  expenses                                 -              - 
 Tax charge for the year                    -         4,579 
                                -------------  ------------ 
 
   11.   DEFERRED TAX LIABILITY 

Under PRC Enterprise Income Tax Law unrealised gains on investment fair value reflected through profit or loss are not taxable in China. However, if Grand Group Investment Plc would be regarded as a Tax Resident Enterprise in China, it will have PRC tax exposure on the gains realised at transfer of shares in the future. The 2015 deferred tax liability is based on the tax rate and tax base that are consistent with the manner of recovery or settlement of the asset i.e. through sale, and has been determined based on a PRC corporate income tax rate of 25%.

 
                                          RMB'000 
 At 31 December 2014                       71,000 
 Credit to statement of comprehensive 
  income                                 (64,140) 
                                        --------- 
 At 31 December 2015                        6,860 
 Reclassified to current income tax 
  payable on sale of investments          (6,860) 
 At 31 December 2016                            - 
                                        --------- 
 At 30 June 2017                                - 
                                        --------- 
 
   12.   EARNINGS PER SHARE 

Basic earnings per share amounts are calculated by dividing net profit or loss for the year attributable to owners of the Parent by the weighted average number of ordinary shares outstanding the year.

The calculation of the basic profit per share is based on the following data:

 
                                               31 December 
                                  30June2017          2016 
                                     RMB'000       RMB'000 
 Profit / (Loss) 
 Profit / (Loss) attributable 
  to owners of the Group             (1.812)        13,737 
                                 -----------  ------------ 
 
                                      Number of shares 
 Shares 
 Basic 
 Weighted average number 
  of ordinary shares in issue 
  at the end of the year          33,952,631    33,952,631 
 
                                         RMB           RMB 
 Earnings per share                   (0.05)          0.40 
 
                                      Number of shares 
 Diluted 
 Weighted average number 
  of ordinary shares in issue 
  at the end of the year          33,952,631    33,952,631 
 Effect of dilutive potential 
  ordinary shares - warrants 
  (note 17)                        1,697,631     1,697,631 
 Weighted average number 
  of ordinary shares for the 
  purposes of diluted earnings 
  per share                       35,650,262    35,650,262 
                                 -----------  ------------ 
 
                                         RMB           RMB 
 Diluted earnings per share           (0.05)          0.39 
 
 There is no difference between the basic and 
  diluted earnings per share for 2015, as the 
  warrants were anti-dilutive in 2015. 
 
 
   13.   CASH AND CASH EQUIVALENTS 
 
                             30June2017      2016 
                                RMB'000   RMB'000 
 
 Cash at bank equivalents       260,304   140,844 
 
 

Cash at bank earns interest at floating rates based on daily bank deposit rates.

The China government has imposed foreign exchange controls on Renminbi that currency flows in and out of the China are restricted.

   14.   AMOUNTS DUE TO SHAREHOLDERS 
 
                       30June2017      2016 
                          RMB'000   RMB'000 
 
 Shareholders' loan         1,217       991 
 
 

The shareholders' loan as at 30 June 2017 is unsecured, interest free and repayable on demand.

   15.   SHARE CAPITAL 
 
                                      Number 
                                   of shares         Nominal value 
                                                        Equivalent 
                                                  GBP       to RMB 
 Authorised 
 Ordinary shares of GBP 
  0.00004 each (note i)          625,000,000   25,000      250,000 
                                              ------- 
 
 Issued and fully paid 
 At 31 December 2014              25,000,000    1,000       10,000 
 Issue of shares upon placing 
  (note ii)                        8,952,631      358        3,580 
                                ------------  -------  ----------- 
 At 31 December 2016 and 
  30 June 2017                    33,952,631    1,358       13,580 
                                ------------  -------  ----------- 
 

Note:

i) The Company was incorporated in Cayman Islands on 4 March 2014 and was authorised to issue 25,000 shares of GBP1.00 (approximately RMB 10) each.

On 4 September 2014, it was resolved to subdivide the Company's share capital by a ratio of 1:25,000. The resulting authorised and issued share capital amounts to 625,000,000 shares and 25,000,000 shares respectively.

The issued shares have nominal value of each share of GBP0.00004 and are fully paid at par. There are no restrictions on the distribution of dividends and the repayment of capital.

ii) On 27 January 2015, a total of 8,952,631 ordinary shares of GBP0.00004 each were issued by way of placing with institutional and other investors at a placing price of GBP0.825 per placing share for cash consideration GBP7.1 million (before expenses) (equivalent to RMB 70 million) on the AIM market of the London Stock Exchange. The excess of the placing price over the par value of the shares issued was credited to the share premium account.

Funds received were deposited in the bank account of Grand Wuxi Limited, the Company's wholly owned subsidiary. WOFE status was granted to this entity in May 2015, with effective ownership being transferred to the Company on 9 February 2015 through its new 100% interest in Great International Wealth and Wisdom, registered in Hong Kong.

   16.   CONTRIBUTED CAPITAL 
 
                        30 June      2016 
                           2017 
                        RMB'000   RMB'000 
 
 Contributed capital    196,000   196,000 
 
 

The capital reserve arose as a result of capital contributions made by the shareholders of the Company in transferring effective control and beneficial ownership of their interests in Victory under the VIE Agreements in 2014.

   17.   WARRANT RESERVE 

On 21 January 2015, the Company granted 1,697,631 warrants. Pursuant to the instrument, the warrant holder was entitled to subscribe for 1,697,631 Ordinary shares as is equal to 5%, of the fully diluted share capital of the Company on admission at an exercise price of GBP0.00004, until the fifth anniversary of the Company's admission to trading on AIM. None of the above warrants have been exercised as at 31 June 2017.

Details of the warrant movements in the year are as follows:

 
                                 Exercise       No. of 
                                    price      warrant   RMB'000 
 At the beginning of 
  2016                           GBP0.00004   1,697,631    13,283 
 Granted                                             -         - 
                                            ----------  -------- 
 At the end of 30June2017                    1,697,631    13,283 
                                            ----------  -------- 
 

The charge for the year ended 31 December 2015 of RMB13,283,000 has been charged to profit and loss in the Statement of Comprehensive Income with a corresponding credit to Warrant Reserve at 31 December 2015. No other changes occurred during 2016.

Valuation

Upon admission of the Company's shares to the AIM, the warrant holder could convert those warrants into the ordinary shares at once by paying the exercise price only, which would be disposable at the current trading price. As there was no other vesting condition, the valuation of the warrants was not subject to any adjustments and was considered the same as the market price of the underlying convertible shares at the date of admission to the AIM.

   18.   CAPITAL MANAGEMENT 

The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the balance between debt and equity.

The capital structure of the Group as at 30 June 2017 consisted of shareholders' loans of RMB 1,217,000 (Note 14) and equity attributable to the equity holders of the Company, comprising paid in capital of RMB66.950M, contributed capital of RMB196M, warrants reserve of RMB13.283M and retained earnings of RMB21.557M (disclosed in the statement of changes in equity).

The Group reviews the capital structure on an on-going basis. As part of this review, the directors consider the cost of capital and the risks associated with each class of capital. The Group will balance its overall capital structure through the payment of dividends, new share issues and the issue of new debt or the repayment of existing debt.

The Group monitors capital using the net debt-to-capital ratio, details of which as at 30 June 2017 and 31 December 2016 were as follows:

 
                                   30 June        2016 
                                      2017 
                                   RMB'000     RMB'000 
 
 Amounts due to shareholders         1,217         991 
 Less: bank balances and cash    (260,304)   (140,844) 
                                ----------  ---------- 
 Net debt                        (259,087)   (139,853) 
 Equity                            297,790     299,602 
                                ----------  ---------- 
 
   19.   RELATED PARTY TRANSACTIONS 

The remuneration of the Directors and Officers, the key management personnel of the Group, is set out in aggregate in note 9b.

   20.   LEGAL REPRESENTATIVE 

Every business established in China, whether domestic or foreign, is required to have a legal representative. He/she is the main principal of the Company and is the employee with the legal power to represent - and enter into binding agreements- on behalf of the Company in accordance with the law or articles of association of the Company. The legal representative is authorised to perform all acts regarding the general administration of a Company according to the Company's aims and objectives, which includes:

l Acting to conserve the company's assets;

l Executing powers of attorney on the company's behalf;

l Authorizing legal representation of and litigation by the company; and

l And executing any legal transactions that are within the nature and scope of that company's business.

In China, every company is required to have a "chop", or company seal, which will be in the custody of the legal representative. Control of the chop is important in order to minimise risks. The legal representative's chop is required on numerous company documents and is regarded as a signature. The legal representative can, by using the chop, bind the company. If a legal representative is to be changed, such a change has to be chopped and approved by the outgoing legal representative. The Company's legal representative in China is Mr. Xiaoyong Wu.

   21.   EVENTS AFTER REPORTING PERIOD 

As of the report day, no material subsequent events noted.

For further information:

 
 Grand Group Investment PLC 
 Yang Xiao, Executive Director   Tel: +86 (0) 510 8329 1718 
  Mark Hemmann, Non-Executive 
 
                                      www.grandgroupplc.com 
 
 
 ZAI Corporate Finance Limited 
 Ray Zimmerman / Ruby Qu          Tel: +44 (0) 
                                  20 7060 2220 
                                 www.zaicf.com 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR BSGDCGBDBGRI

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September 28, 2017 10:17 ET (14:17 GMT)

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