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
(END) Dow Jones Newswires
September 28, 2017 10:17 ET (14:17 GMT)
Grand Grp (LSE:GIPO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Grand Grp (LSE:GIPO)
Historical Stock Chart
From Jul 2023 to Jul 2024