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| 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 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMGIPO
RNS Number : 2948J
Grand Group Investment PLC
27 June 2017
Press Release 27 June 2017
Grand Group Investment PLC
("Grand Group", the "Company" or the "Group")
Final 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 audited Final Results for the period from 1 January 2016 to 31 December 2016 (the "period").
For further information:
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Grand Group Investment PLC
James Newman, Non-Executive Tel: +44 (0)
Chairman 20 7398 7714
Yang Xiao, Executive Director www.grandgroupplc.com
ZAI Corporate Finance Limited
Ray Zimmerman / Ruby Qu (Nomad) Tel: +44 (0)
20 7060 2220
Andrew Wilson (Broker) www.zaicf.com
CHAIRMAN'S STATEMENT
2016 was an eventful and challenging year. I refer you to the announcement of 30 September 2016 for a detailed explanation of the events leading to the delay in issuing both the 2015 audited financials and the 2016 interim statements.
As notified on 30 September 2016, the company disposed of its two investments: Victory and JXT. These disposals triggered paragraph 5.6 (sub-paragraph 2) of the AIM Note for Investing Companies, and as such the company became treated as an AIM Rule 15 cash shell. In accordance with AIM Rule 15, the company has until 30 September 2017, approximately 3 months from now, either to implement the current investing policy or to make an acquisition which would be considered a reverse takeover under the AIM Rules. If the company is unable to do so it will be suspended again, this time pursuant to AIM Rule 40.
The company started 2017 with a virtually clean slate, having sold its investments. As of 2016 year end, proceeds from the sales of Victory and JXT investments have been coming in on time, and cash had grown to RMB 140.8 million. As of the end of April, funds continued to arrive on time and total (unaudited) cash was RMB 221.2 million - approximately GBP25 million. No new investments have yet been made with the proceeds.
The group has much to do in 2017 - notably finishing collecting the proceeds from the investment exits, but as importantly developing the pipeline of investment opportunities and investing by the September 30 deadline.
Outlook
As the US Federal Reserve continues to look to raise interest rates, there has been a significant impact on the Chinese investment market, causing many asset prices to return to more rational levels. This provides a great opportunity for Grand. The sales of Victory and JXT have bolstered Grand's cash reserves for future investments. Now that Grand has regained listed status on AIM, it is in a better position to make those investments.
James Newman
Non-Executive Chairman
GRAND GROUP INVESTMENT PLC
CORPORATE GOVERNANCE REPORT
As an AIM-listed company, Grand Group Investment PLC ("Grand Group") does not comply with the UK Corporate Governance Code published by the Financial Reporting Council. However, the directors do place a high degree of importance on ensuring that high standards of corporate governance are maintained. The following sections note the governance procedures applied by Grand Group.
Board Responsibilities
Following Stephen Roberts and Ying Ying Gu resignations from Non-Executive Director and Executive Director respectively during 2016, the Board currently comprises two independent Non-Executive Directors ("NED") and three Executive Directors. The Directors expect to be kept fully informed of the Group's performance, and other matters that are relevant to the business of the Group and that should be brought to the attention of the Directors. The Directors have access to the nancial and legal advisers.
The Board has a breadth of experience relevant to the Group, and the Directors believe that any changes to the Board's composition can be managed without undue disruption. The Board believes that the mix of skills, experience, ages and length of service are appropriate to the requirements of the Group for the time being.
Audit Committee
The Audit Committee of the Group, comprising J. Mark Hemmann and James Newman, is chaired by J. Mark Hemmann. The Audit Committee is responsible for ensuring that the Group's nancial performance is properly monitored, controlled and reported. The Audit Committee is responsible for the scope and effectiveness of the external audit and compliance by the Group with statutory and regulatory requirements.
Auditor objectivity and independence is safeguarded through limiting non-audit services that fall within de ned categories. Non-audit work is approved by the Audit Committee if the committee concludes that it is in the interests of the Group to purchase non-audit work from the external Auditors (rather than another supplier). Any future non-audit work to be performed by Moore Stephens LLP will be monitored and approved by the Audit Committee.
Share Dealing
The Group has adopted a share dealing code for Directors' dealings. The Directors will comply with Rule 21 of the AIM Rules for Companies relating to Directors' dealings and will take all reasonable steps to ensure compliance by the Group's applicable employees as well.
GRAND GROUP INVESTMENT PLC
CORPORATE GOVERNANCE REPORT (CONTINUED)
The Takeover Code
As a company incorporated in the Cayman Islands, the Group will not be subject to the Takeover Code. As a result, certain protections that are afforded to Shareholders under the Takeover Code, for example in relation to a takeover of a company or certain stake-holding activities by Shareholders, do not apply to the Group.
However, certain protections have been incorporated into the Group's Articles which, to an extent, mirror the provisions of Rule 9 of the Takeover Code (the "Relevant Code Provisions"). The Articles provide that if an acquisition of Ordinary Shares were to increase the aggregate holding of the acquirer and its concert parties to shares carrying 30% or more of the voting rights of the Group, the acquirer and, depending on the circumstances, the concert parties, will be required (except with the agreement of the Group in a general meeting by ordinary resolution of independent Shareholders) to make a cash offer for the outstanding shares in the Group at a price not less than the highest price paid by the acquirer or its concert parties during the previous 12 months. This requirement would also be triggered by any acquisition of shares by a person holding (together with its concert parties) shares carrying between 30% and 50% of the voting rights in the Group if the effect of such acquisition were to increase the person's percentage of voting rights. The main difference between these provisions and the Relevant Code Provisions is that the Takeover Panel does not have any jurisdiction to enforce these provisions.
Independent Auditors' Report to the Shareholders of Grand Group Investment Plc
Opinion
We have audited the consolidated financial statements of Grand Group Investment Plc ("the Company") and its subsidiaries ("the Group"), which comprise the consolidated statement of financial position as at 31st December 2016 and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as at 31st December 2016, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
This report is made solely to the company's members, as a body, in accordance with our terms of engagement. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in British Cayman Islands and Auditing Practices Board's (APB's) Ethical Standards and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
-- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
-- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
-- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the relate disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However future events or conditions may cause the Group to cease to continue as a going concern.
-- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
-- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an option on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identity during our audit.
The engagement partner on the audit resulting in this independent auditor's report is Mark Ayres.
Moore Stephens LLP
150 Aldersgate Street
London, EC1A 4AB
GRAND GROUP INVESTMENT PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2016
31 December 31 December
2016 2015
Note RMB'000 RMB'000
Unrealised loss on unquoted
financial assets 8 - (256,560)
Gain on disposal of unquoted 21,760 -
financial assets
Investment income - 19,800
Other income 500 -
Administrative expenses (4,130) (9,585)
Financial income/(expenses) 186 (13,138)
Profit /(Loss) before
tax 18,316 (259,483)
Taxation 10 (4,579) 64,140
------------ ------------
Profit /(Loss) after
tax 13,737 (195,343)
------------ ------------
Other comprehensive income - -
Total comprehensive profit
/(loss) for the year 13,737 (195,343)
------------ ------------
Attributable to:
Equity holders of the
parent 13,737 (195,343)
Non-controlling interests - -
RMB RMB
Earnings per share 12
Basic 0.40 (5.86)
------------ ------------
Diluted 0.39 (5.86)
------------ ------------
GRAND GROUP INVESTMENT PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2016
2016 2015
Note RMB'000 RMB'000
Assets
Non-current asset:
Unquoted financial assets
at fair value through
profit or loss 8 - 243,440
-------- --------
Current assets:
Other receivable 8 175,210 10
Cash and cash equivalents 13 140,844 66,632
-------- --------
316,054 66,642
-------- --------
Total assets 316,054 310,082
-------- --------
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 23,369 9,632
-------- --------
Equity attributable to
owners of the Company 299,602 285,865
Non-controlling interest 10 10
-------- --------
Total equity 299,612 285,875
-------- --------
Non-current liability:
Deferred tax liability 11 - 6,860
-------- --------
Current liabilities:
Other payable and accruals 15,451 4,299
Amounts due to shareholders 14 991 13,048
-------- --------
16,442 17,347
-------- --------
Total liabilities 16,442 24,207
-------- --------
Total equity and liabilities 316,054 310,082
-------- --------
GRAND GROUP INVESTMENT PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2016
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
-------- -------- ------------ ----------- ---------- ---------- ------------- -----------
GRAND GROUP INVESTMENT PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2016
31 December 31 December
2016 2015
Note RMB'000 RMB'000
Cashflows from operating
activities
Profit /(Loss) before
tax 18,316 (259,483)
Adjustments:
Unrealised loss on unquoted
financial assets 8 - 256,560
Finance income (21,760) (19,800)
Warrant expenses - 13,283
Increase in other payables
and accruals (287) 2,981
Net cash outflow from
operating activities (3,731) (6,459)
------------ ------------
Cash flows from investing
activity
Dividend received from
unquoted financial assets
at fair value through
profit or loss - 19,800
Cash received from disposal
of financial assets 8 90,000 -
Acquisition of unquoted
financial assets at
fair value through profit
or loss 8 - (20,000)
Net cash inflow / (outflow)
from investing activity 90,000 (200)
------------ ------------
Cash flows from financing
activities
Cash proceeds from issue
of shares - 66,940
Amounts (repay) / from
shareholders (12,057) 6,340
------------ ------------
Net cash (outflow) /
inflow from financing
activities (12,057) 73,281
------------ ------------
Net increase in cash
and cash equivalents 74,212 66,622
Cash and cash equivalents
at the beginning of
year 66,632 10
------------ ------------
Cash and cash equivalents
at the end of year 140,844 66,632
------------ ------------
GRAND GROUP INVESTMENT PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
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 31 December 2016
The Group has adopted the new interpretations and revised standards effective for the year ended 31 December 2016. 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 31 December 2016. 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.
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.
f) 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.
g) 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.
h) 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.
i) 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:
2016 2015
RMB'000 RMB'000
Financial asset
Cash and cash equivalents 140,844 66,632
Other receivables 175,210 10
Investments - 243,440
316,054 310,082
Financial liabilities
Other payables and accruals 15,451 4,299
Amounts due to shareholders 991 13,048
-------- --------
16,442 17,347
-------- --------
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
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 - - -
---------- ---------- ---------
Fair value measurement as at
31 December 2015
Level 1 Level 2 Level 3
RMB'000 RMB'000 RMB'000
Unquoted financial
assets at fair value
through profit or
loss - - 243,440
------------ ------------ ---------
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 31 December 2016, 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 31 December
2016
Other payables
and accruals 15,451 - - 15,451
Amounts due to
shareholders 991 - - 991
-------- ---------- --------- --------
16,442 - - 16,442
-------- ---------- --------- --------
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
2015
Other payables
and accruals 4,299 - - 4,299
Amounts due to
shareholders 13,048 - - 13,048
-------- ---------- --------- --------
17,347 - - 17,347
-------- ---------- --------- --------
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
2016 2015
RMB'000 RMB'000
At 1 January 243,440 480,000
Additions - 20,000
Fair value change through
profit or loss - (256,560)
Disposal (243,440) -
---------- ----------
At 31 December - 243,440
---------- ----------
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 31 December 2016 installments had been received in a timely fashion and RMB 175.2 million was outstanding.
In respect of JXT, the sale of its 15 per cent shareholding was for a total consideration of RMB 30.0 million, settled in cash by two equal instalments of RMB 15.0 million, the first within 30 days of sale agreement, with the second instalment paid before 31 December 2016. The consideration of RMB 30.0 million represents a premium of RMB 10.0 million to the Company's original April 2015 investment of RMB 20.0 million.
9. STAFF COSTS AND KEY MANAGEMENT EMOLUMENTS
31 December 31 December
2016 2015
RMB'000 RMB'000
(a) Staff costs
Wages and salaries 481 1,502
Social security costs 13 41
494 1,543
------------ --------------
(b) Key management emoluments
Remuneration 2,305 2,862
2,799 2,862
------------ --------------
The remuneration of the key management were as follows:
2016 2015
RMB'000 RMB'000
Executive Directors
Xiao Yang 500 500
Jiang Zhou 450 450
Ying Ying Gu 146 500
Chuang Li 500 500
Non Executive
Directors
James Newman 360 384
J. Mark Hemmann 270 240
Stephen Roberts 79 288
-------- --------
2,305 2,862
-------- --------
10. TAXATION
(a) Recognised in the statement of comprehensive income
31 December 31 December
2016 2015
RMB'000 RMB'000
Corporation tax
Current year charge 4,579 -
Deferred Enterprise Income
Tax credit (see note 11) - (64,140)
------------ ------------
Income Tax expense / (credit)
attributable to the Group 4,579 (64,140)
------------ ------------
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 31 December
2016 2015
RMB'000 RMB'000
Profit / (Loss) before tax 18,316 (259,483)
------------ ------------
Tax at the EIT rate of 25%
(2015: 25%) 4,579 (64,871)
Tax effect of non-deductible
expenses - 731
Tax charge for the year 4,579 (64,140)
------------ ------------
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 -
---------
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 31 December
2016 2015
RMB'000 RMB'000
Profit / (Loss)
Profit / (Loss) attributable
to owners of the Group 13,737 (195,343)
------------ ----------------------
Number of shares
Shares
Basic
Weighted average number
of ordinary shares in issue
at the end of the year 33,952,631 33,314,909
RMB RMB
Earnings per share 0.40 (5.86)
Number of shares
Diluted
Weighted average number
of ordinary shares in issue
at the end of the year 33,952,631 33,314,909
Effect of dilutive potential
ordinary shares - warrants
(note 17) 1,697,631 -
Weighted average number
of ordinary shares for the
purposes of diluted earnings
per share 35,650,262 33,314,909
------------ ----------------------
RMB RMB
Diluted earnings per share 0.39 (5.86)
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
2016 2015
RMB'000 RMB'000
Cash at bank equivalents 140,844 66,632
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
2016 2015
RMB'000 RMB'000
Shareholders' loan 991 13,048
The shareholders' loan as at 31 December 2016 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 2015 and
31 December 2016 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
2016 2015
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 December 2016.
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 2016 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 31 December 2016 consisted of shareholders' loans of RMB 991,000 (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 RMB23.369M (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 31 December 2016 and 31 December 2015 were as follows:
2016 2015
RMB'000 RMB'000
Amounts due to shareholders 991 13,048
Less: bank balances and cash (140,844) (66,632)
---------- ---------
Net debt (139,853) (53,586)
Equity 299,602 285,865
---------- ---------
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEFSUWFWSEIM
(END) Dow Jones Newswires
June 27, 2017 06:03 ET (10:03 GMT)
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