London, 1 March 2022
FOR IMMEDIATE RELEASE
Grand Vision Media Holdings plc
( “GVMH” or the “Company”)
Audited Final Results
Grand Vision Media Holdings plc announces its audited final
results for the year ended 31 December
2020. These are presented below and are available (along
with the Company's 2020 Annual Report) to download on the Company's
website at https://www.gvmh.co.uk/tag/financial-information/.
The Company is working towards finalising its interim results
for the six-month period ended 30 June
2021 and expects to announce these in the next few weeks. At
this time, it will seek to lift the suspension in trading in the
Company’s shares.
The audited results for the year ended 31
December 2021 are expected to be released by 30 June 2022.
For more information contact:
Grand Vision Media Holdings plc
Ajay Rajpal, Director |
gvmh.co.uk/
Tel: +44 (0) 20 7866 2145
or info@gvmh.co.uk |
|
|
Alfred Henry Corporate
Finance Ltd
Nick Michaels / Jon Isaacs |
Tel: +44 (0) 203 772
0021
or jisaacs@alfredhenry.com |
|
|
GRAND VISION MEDIA
HOLDINGS PLC
DIRECTORS’ REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2020
COMPANY INFORMATION
Directors and Advisers
Directors: |
Ajay Kumar Rajpal –
Non-Executive Director
Jonathan Yat Pang Lo – Chief Executive Officer
Frederick Chua Oon Kian (appointed 20 January 2020) |
Company
Number:
Company Secretary |
10028625
MSP Corporate Services Limited
27-28 Eastcastle Street
London
W1W 8DH |
Registered Address: |
Finsgate
5-7 Cranwood Street
London
EC2M 7LD |
Principal
Banker: |
Metro Bank
1 Southampton Road
London
WC1B 5HA |
|
|
Auditors: |
Jeffreys Henry
LLP
Finsgate
5-7 Cranwood Street
London
EC1V 9EE |
Legal Adviser to the
Company: |
Bracher
Rawlins
77 Kingsway
London
WC2B 6SR |
Registrar: |
SLC Registrars
Limited
Ashley Park House
42-50 Hersham Road
Walton-on-Thames
Surrey
KT12 1RZ |
GRAND VISION MEDIA HOLDINGS PLC
CONTENTS
|
Strategic review
report |
4 |
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Directors' report
|
9 |
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Independent auditors'
report |
14 |
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|
|
|
Statement of comprehensive
income |
20 |
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|
|
|
Statement of financial
position |
21 |
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|
|
|
Statement of changes in
equity |
23 |
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|
Statement of cash flows |
24 |
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Notes to the financial statements
|
25 |
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|
STRATEGIC REVIEW
REPORT
FOR THE YEAR ENDED
31 DECEMBER 2020
The CEO Report
The onset of the COVID-19 pandemic in early 2020 has
significantly adversely affected the Group’s performance for the
year. OOH revenues were severely impacted by the closure of cinemas
across China, and the closure of
businesses in Hong Kong, together
with the travel restrictions, adversely affected digital marketing
revenues. There was a high degree of uncertainty throughout the
period, with a resulting loss in overall business confidence.
Certain new projects originally planned for the year were
postponed and will resume when pandemic restrictions are
lifted. These include the introduction of interactive and 3D panels
into Singapore.
The disruption has lasted for the majority of the period under
review, and this is reflected in the poor results reported. In
order to mitigate the position, the Group has increased its focus
on eCommerce marketing and services, by leveraging its contact base
and international business network. These services are
predominantly targeted at suppliers of medical equipment, who have
experienced a significant increase in activity levels as a result
of the pandemic.
Summary of Trading Results
Total revenue for the year was HK$5,827K [2019: HK$12,034K], a decline of 52% compared to the
prior year. Although the Group has been working on a number of
initiatives with suppliers of medical equipment throughout the
period, the impact of the majority of these is only expected to
come to fruition in 2022 onwards.
The Group total comprehensive loss for the year was HK$9,793K [2019: HK$14,957K]. This was as a direct result of
the reduction is revenues across the Group and the major disruption
caused by the pandemic. The Group has managed to achieve cost
savings as a result of space consolidation and headcount
reductions, and has taken advantage of Government fiscal support
aimed at helping businesses through the pandemic. The Group has
also recognised a provision against trade receivables of
HK$2,740K given the material
uncertainty in the region and the ongoing impact of the
pandemic.
Given the material uncertainty and disruption faced by the
Group, the Company has fully impaired its investment in GVC
Holdings Limited, and the intercompany balances owed by Group
entities, resulting in charges of HK$114,572K and HK$18,512K respectively in the Company profit and
loss account. It is hoped that these impairments will be reviewed
again when the business and trading environment returns to normal,
and there is more visibility on the future outlook.
The Group has 180 panels [2019: 200] in cinemas across
China, and is evaluating other
technologies to promote OOH advertising in the cinema space as well
as other locations.
Cash in hand at the end of the year was HK$855K. The Group continues to manage its cash
within its available resources.
Outlook
COVID-19 has had a significant adverse effect on the Group’s
performance in 2020. Sales for 2021 will again be below historic
levels as a result of the ongoing travel disruption and
intermittent business closures across the region. Cinemas in
China are still operating at
reduced capacity., Unlike many other parts of the world,
Hong Kong is following a zero
COVID policy, which has resulted in more business disruption and
closures than would otherwise be seen elsewhere.
It is uncertain as to when trading conditions will return to
normal, but the disruption to the Group was experienced throughout
2021, and is expected to last well into 2022.
Section 172 Statement
The Directors are well aware of their duty under s172 of the
Companies Act 2006 to act in the way which they consider, in good
faith, would be most likely to promote the success of the Company
for the benefit of its members as a whole and, in doing so, to have
regard (amongst other matters) to:
• the likely consequences of any decision in the long term;
• the interests of the Group’s employees;
• the need to foster the Group’s business relationships with
suppliers, customers and others;
• the impact of the Group’s operations on the community and the
environment;
• the desirability of the Group maintaining a reputation for
high standards of business conduct; and
• the need to act fairly between members of the Group.
The Board recognises that the long-term success of the
Grand Vision Media Holdings Group requires positive interaction
with its stakeholders. Positive engagement with stakeholders will
enable our stakeholders to better understand the activities, needs
and challenges of the business and enable the Board to better
understand and address relevant stakeholder views which will assist
the Board’s in its decision making and to discharge its duties
under Section 172 of the Companies Act 2006.
In the following section we identify our key stakeholders, how
we engage with them and key activities we have undertaken during
the period in question.
Our Strategic Partners
The Company works closely with its major supplier Marvel Digital
Limited and its cinema partners Dadi Cinema Group and Perfect World
Cinema Group, who are important strategic partners with the Group.
We continue to work with them despite the business disruption
caused by the pandemic, and have developed an open and transparent
relationship with these partners, which promotes the long-term
success for the Group.
We also continue to strengthen our relationships with CY Group
in Korea despite the closure of Korean cinemas caused by COVID-19
which stalled our OOH expansion plan. We are looking to
create new projects to introduce branded products to
Korea.
Our Shareholders
The Company has been well-supported by its shareholders for many
years, who have provided shareholder loans historically, and during
2020, some shareholders participated in the convertible loan note
issue. The Company endeavours to keep shareholders updated on
regulatory matters, and is committed to provide transparent
information to them, both through the annual report and ad-hoc
communications.
Our Customers
The Company strives to maintain strong relationships with its
customers, which will promote long term growth. The relationships
with customers who advertise with the Company are maintained
through regular contact and relationship management.
Our Employees
The Company believes that good staff morale engenders increased
efficiency and loyalty, and hence promotes staff welfare and
well-being. Staff needs are constantly monitored and improved on an
ongoing basis.
Principal Risks and Uncertainties
The Directors consider the following risk factors to be of
relevance to the Group’s activities. It should be noted that the
list is not exhaustive and that other risk factors not presently
known or currently deemed immaterial may apply. The risk factors
are summarised below:
i.
Development Risk
The Group’s development will be, in part, dependent on the
ability of the Directors to continue to expand the current business
and identify suitable investment opportunities and to implement the
Group’s strategy. There is no assurance that the Group will be
successful in the expansion of the business, which is dependent on
raising sufficient capital.
ii. Sector Risk
The OOH media sector is subject to competition from other
marketing channels and technologies, particularly the impact of
digital marketing.
We also compete with other OOH media locations, such as traffic
hubs, elevators and other locations, which are more
established.
There is a risk of 3D technology not being well received, given
that it is a new media platform in the OOH sector. The
Company is continuously looking for new and innovative platforms to
differentiate itself, and there is no guarantee that these new
platforms will be effective.
The Group would also be looking at new opportunities and
projects to enhance our service capabilities and increase our scope
of services, hence lessening the reliance on OOH sector.
iii. Political and
Regulatory Risk
The Group is subject to amendments to laws imposed by
China and by other jurisdictions
where the Group does business, including laws that govern the time,
place and manner of advertising, that may impair or even prevent
the Group from conducting its business.
Furthermore, prior to distributing advertisements for certain
commodities, advertising distributors and advertisers are obligated
to ensure compliance to relevant regulations. Violation of
these regulations may result in penalties, including fines,
confiscation of advertising income, orders to cease dissemination
of the advertisements.
In circumstances involving serious violations, the SAIC or its
local branches may revoke violators’ licenses or permits for
advertising business operations. In addition, advertisers,
advertising operators or advertising distributors may be subject to
civil liability if they infringe on the legal rights and interests
of third parties in the course of their advertising business.
The Group has implemented procedures to ensure the content of
our advertisement are properly reviewed and the advertisement would
only be published upon the receipt of content approval from the
relevant administrative authorities. However, the Group can provide
no assurance that all the content of the advertisements is true and
in full compliance with applicable laws.
In the event that the Group was in violation of such
regulations the business, financial condition, results of
operations and the prospects of the Group could be materially
and adversely affected.
iv. Environmental Risks
and Hazards
All phases of the Group’s operations are subject to
environmental regulation in the areas in which it operates.
Environmental legislation is evolving in a manner that may require
stricter standards and enforcement, increased fines and penalties
for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for
companies and their officers, directors and employees.
There is no assurance that existing or future environmental
regulation will not materially adversely affect the Group’s
business, financial condition and results of operations.
Environmental hazards may exist on the properties on which the
Group holds interests that are unknown to the Group at present. The
Board manages this risk by working with environmental consultants
and by engaging with the relevant governmental departments and
other concerned stakeholders.
v. Internal Control
and Financial Risk Management
The Board has overall responsibility for the Group’s systems of
internal control and for reviewing their effectiveness. The Group
maintains systems which are designed to provide reasonable but not
absolute assurance against material loss and to manage rather than
eliminate risk.
The key features of the Group’s systems of internal control are
as follows:
o Management structure with clearly identified
responsibilities;
o Production of timely and comprehensive historical
management information presented to the Board;
o Detailed budgeting and forecasting;
o Day to day hands on involvement of the Executive
Directors and Senior Management; and
o Regular board and meetings and discussions with the
Non-executive directors.
The Group’s activities expose it to several financial risks
including cash flow risk, liquidity risk and foreign currency
risk.
vi. Environmental
Policy
The Group is aware of the potential impact that its subsidiary
and associate companies may have on the environment. The Group
ensures that it complies with all local regulatory requirements and
seeks to implement a best practice approach to managing
environmental aspects.
vii. Health and Safety
The Group’s aim is to achieve and maintain a high standard of
workplace safety. In order to achieve this objective, the Group
provides ongoing training and support to employees and sets
demanding standards for workplace safety.
viii. Financing Risk
The development of the Group’s business may depend upon the
Group’s ability to obtain financing primarily through the raising
of new equity capital or debt. The Group’s ability to raise further
funds may be affected by the success of existing and acquired
investments. The Group may not be successful in procuring the
requisite funds on terms which are acceptable to it (or at all)
and, if such funding is unavailable, the Group may be required to
reduce the scope of its investments or the anticipated expansion.
Further, Shareholders’ holdings of Ordinary Shares may be
materially diluted if debt financing is not available.
ix. Credit Risk
The Group does not have bank loans or other borrowings except
for shareholder loans. The Group has benefitted from further
shareholder loans, although there is no guarantee that these will
continue in the future. We have reviewed the accounts receivable
and have made adequate provisions as appropriate.
x. Liquidity
Risk
The Directors have reviewed the working capital forecasts for
the Group and believe that there is sufficient working capital to
fund the business as it progresses to break even. The group is
reliant on raising new capital for expansion, which is not
guaranteed.
xi. Market Risk
The group’s investments is in its subsidiary, GVC Holdings Ltd.
The shares are not readily tradable.
xii. Capital Risk
The Group manages its capital resources to ensure that entities
in the Group will be able to continue as a going concern, while
maximising shareholder return.
The capital structure of the Group consists of equity
attributable to shareholders, comprising issued share capital and
reserves. The availability of new capital will depend on many
factors including a positive operating environment, positive stock
market conditions, the Group’s track record, and the experience of
management. There are no externally imposed capital
requirements. The Directors are confident that adequate cash
resources exist or will be made available to finance operations but
controls over expenditure are carefully managed.
xiii. Covid 19 Outbreak
The Group have been significantly affected by the Covid -19
outbreak, and the impact of it on the Group financials and
worldwide economy have been severe. The Group are hoping for a
return to normal trading conditions in the current year, and until
such time, the business will face disruption and uncertainty.
Going Concern
The day to day working capital requirements and investment
objectives is met by existing cash resources and the issue of
equity. At 31 December 2020 the Group
had cash balance of HKD855k. The
Group’s forecasts and projections, taking into account reasonably
planned changes in the level of overhead costs, show that the
Company should be able to operate within its available cash
resources but only with shareholder help. A major shareholder has
committed to provide the required level of support. The directors
have, at the time of approving the financial statements, a
reasonable expectation that the Group has adequate resources to
continue in existence for the foreseeable future. They therefore
continue to adopt the going concern basis of accounting in
preparing the financial statements.
On behalf of the board
Jonathan
Lo
Chief Executive Officer
28 February
2022
DIRECTORS'
REPORT
FOR THE YEAR ENDED
31 DECEMBER 2020
The directors present their report together with the accounts of
Grand Vision Media Holdings Plc (‘’the Company’’) and its
subsidiary undertakings (together ‘the group’) for the year ended
31 December 2020.
Results and dividends
The trading results for the Group are set out in the
consolidated statement of comprehensive income and the consolidated
statement of financial position at the end of the year.
The directors have not recommended a dividend.
Directors
The following directors have held office during the period:
Edward Kwan-Mang Ng (resigned 20 January 2020)
Ajay Kumar Rajpal
Jonathan Yat Pang Lo
Federick Chua
Oon Kian (appointed 20 January
2020)
Directors’ interests
At the date of this report the directors held the following
beneficial interest in the ordinary share capital and share options
of the company:
Director |
Beneficial Shareholding
(Held through Cyber Lion Limited) |
Beneficial Shareholdings |
Percentage of the Company’s ordinary Share
Capital |
Edward Kwan-Mang Ng |
Nil
|
|
- |
Ajay Kumar
Rajpal |
Nil |
|
- |
Jonathan
Yat Pang Lo |
|
22,438,842 |
23.3% |
Federick
Chua Oon Kian |
|
- |
- |
|
|
|
|
|
|
Director |
|
Options |
|
|
Edward
Kwan-Mang Ng |
|
3,000,000 |
|
|
Ajay Kumar
Rajpal |
|
3,000,000 |
|
|
Jonathan
Yat Pang Lo |
|
6,000,000 |
|
|
Totals |
|
12,000,000 |
|
|
|
|
|
|
|
|
|
Substantial Interests
The Company has been informed of the following shareholdings
that represent 3% or more of the issued ordinary shares of the
company as at 27 February 2022 :
Investor |
Shareholding
(Ordinary shares of 10p) |
Percentage of the Company’s ordinary Share Capita |
Jonathan Lo |
22,438,842 |
23.3% |
Pentawood
Limited |
12,439,779 |
12.92% |
Stephen Lo |
12,439,779 |
12.92% |
Magic Carpet |
8,064,486 |
8.38% |
Win
Network International Limited * |
7,328,000 |
7.61% |
Timenow Ltd |
4,499,016 |
4.67% |
Vaiatrax Holdings
Ltd |
3,936,639 |
4.09% |
Tamperzem Holding
Ltd |
3,374,262 |
3.50% |
|
|
|
*Beneficially owned by
Stephen Lo |
|
|
|
|
|
|
|
|
|
|
Financial risk and management of
capital
The major balances and financial risks to which the company is
exposed to and the controls in place to minimise those risks are
disclosed in Note 20.
A description of how the company manages its capital is also
disclosed in Note 19.
The Board considers and reviews these risks on a strategic and
day-to-day basis in order to minimise any potential
exposure.
Emissions
The Group is not an intensive user of fossil fuels or
electricity. As a result, it is not practical to determine carbon
emission with any degree of accuracy.
Financial instruments
The company has not entered into any financial instruments to
hedge against interest rate or exchange rate risk.
Supplier payment policy
It is the Group’s payment policy to pay suppliers in line with
industry norms. These payables are paid on a timely basis within
contractual terms which is generally 30 to 60 days from date of
receipt of invoice.
Auditors
Jeffreys Henry LLP were appointed auditors to the company and in
accordance with section 485 of the Companies Act 2006, a resolution
proposing that they be re-appointed will be put at a General
Meeting.
Statement of directors'
responsibilities
The directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare Group and parent
company financial statements for each financial year. Under that
law the directors have elected to prepare the financial statements
in accordance with International Financial Reporting Standards
(IFRS) as adopted for use in the European Union. Under company law
the directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of
affairs of the group and company and of the group’s profit or loss
for that period. In preparing these financial statements, the
directors are required to:
· select suitable accounting policies
and then apply them consistently;
· make judgements and accounting
estimates that are reasonable and prudent;
· state whether they have been prepared
in accordance with IFRS as adopted by the European Union
· prepare the financial statements on
the going concern basis unless it is inappropriate to presume that
the company will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the group and company. They are also
responsible for safeguarding the assets of the group and company
and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website.
Corporate Governance
The Board recognizes that good standards of corporate governance
help the Company to achieve its strategic goals and is vital for
the success of the Company. The Company adopts proper
standards of corporate governance and follows the principles of
best practice set out in Corporate Governance Code (2019), as far
as is appropriate for the size and nature of the Company and the
Group. These principles are disclosed on our website in the
Corporate Governance section
Application of principles of good
governance by to board of directors
The board currently comprises the three directors: Frederick
Chua Oon Kian, Ajay Kumar Rajpal and
Jonathan Yat Pang Lo.
There are regular board meetings each year and other meetings
are held as required to direct the overall Company strategy and
operations. Board meetings follow a formal agenda covering matters
specifically reserved for decision by the board. These cover key
areas of the Company’s affairs including overall strategy,
acquisition policy, approval of budgets, major capital expenditure
and significant transactions and financing issues.
The board undertakes a formal annual evaluation of its own
performance and that of its committees and individual directors,
through discussions and one-to-one reviews with the chairman and
the senior independent director.
Statement of disclosure to
auditors
Each person who is a Director at the date of approval of this
Annual Report confirms that:
• So far as the Directors
are aware, there is no relevant audit information of which the
Company’s auditors are unaware; and
• Each Director has taken
all the steps that he ought to have taken as Director in order to
make himself aware of any relevant audit information and to
establish that the Company’s auditors are aware of that
information.
• Each Director is aware of
and concurs with the information included in the Strategic
Report.
Post Balance Sheet Events
Further information on events after the reporting date is set
out in note 24.
Branches Outside the UK
The Group head office is in Hong
Kong and the subsidiaries are located in Hong Kong and China.
The Directors’ have chosen to produce a Strategic Report that
discloses a fair review of the Group’s business, the key
performances metrics that the Directors review along with a review
of the key risks to the business.
In accordance with Section 414C (1) of the Companies Act 2006,
the group chooses to report the review of the business, the future
outlook and the risks and uncertainties faced by the Company in The
Strategic Report on page 4.
Directors’ Remuneration Report
The information included in this section is not subject to audit
other than where specifically indicated.
The remuneration committee consisted of Ajay Rajpal and Frederick Chua Oon Kian. This
committee's primary function is to review the performance of
executive directors and senior employees and set their remuneration
and other terms of employment.
|
|
2020 |
2019 |
Director |
|
Options
Vested |
Options
Vested |
Edward Ng |
|
1,000,000 |
1,000,000 |
Ajay Rajpal |
|
1,000,000 |
1,000,000 |
Jonathan Lo |
|
2,000,000 |
2,000,000 |
|
|
|
- |
Totals |
|
4,000,000 |
4,000,000 |
The Company has one executive director.
The remuneration policy
It is the aim of the committee to remunerate executive directors
competitively and to reward performance. The remuneration committee
determines the company's policy for the remuneration of executive
directors, having regard to the UK Corporate Governance Code and
its provisions on directors' remuneration.
Service agreements and terms of
appointment
The directors have service contracts with the company.
Directors' interests
The directors' interests in the share capital of the company are
set out in the Directors’ report.
Directors' emoluments
Salaries and
Fees |
Group |
Company |
|
2020 |
2019 |
2020 |
2019 |
|
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Edward Ng |
- |
60 |
- |
- |
Ajay Rajpal |
480 |
240 |
120 |
120 |
Jonathan Lo |
1,080 |
1,080 |
480 |
480 |
|
1,320 |
1,380 |
600 |
600 |
No pension contributions were made by the company on behalf of
its directors apart for Jonathan Lo
of HKD18K.
Approval by shareholders
At the next annual general meeting of the company a resolution
approving this report is to be proposed as an ordinary
resolution.
This report was approved by the board on 28 February 2022
On behalf of the board
__________________
Jonathan
Lo
Director
28 February 2022
INDEPENDENT
AUDITOR’S REPORT
TO THE MEMBERS OF
GRAND VISION MEDIA HOLDINGS PLC
Opinion
We have audited the financial statements of Grand Vision Media
Holdings Plc (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 31 December
2020 which comprise the consolidated statement of
comprehensive income, the consolidated and company statements of
financial position, the consolidated and company statements of cash
flows, the consolidated and company statements of changes in equity
and notes to the financial statements, including a summary of
significant accounting policies.
In our opinion:
· the financial statements give a true
and fair view of the state of the group’s and of the parent
company’s affairs as at 31 December
2020 and of the group’s loss for the year then ended;
· the group financial statements have
been properly prepared in accordance with IFRSs as adopted by the
European Union;
· the parent company financial
statements have been properly prepared in accordance with IFRSs as
adopted by the European Union and as applied in accordance with the
provisions of the Companies Act 2006; and
· the financial statements have been
prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. 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 the UK, including the
FRC’s Ethical Standard as applied to listed entities, 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.
Material uncertainty related to going
concern
We draw attention to note 2.3 in the financial statements, which
explains that the Group has incurred significant operating losses
and negative cash flows from operations. The Group forecasts
include additional shareholder funding requirements upon which the
Group is dependent. The directors are satisfied that these funding
requirements will be met. These events or conditions, along with
other matters as set out in note 2.3 indicate that a material
uncertainty exists that may cast doubt on the Group’s ability to
continue as a going concern. Our opinion is not modified in respect
of this matter.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. This is not a
complete list of all risks identified by our audit.
· Going concern issues
· Carrying value of investments and
recoverability of intercompany loans
These are explained in more detail below:
Key audit matter |
How our audit addressed the key
audit matter |
Possible impairment
of long-term investment and loans to subsidiaries (Parent)
At the year end the Company had Investment in subsidiary of
HK$114,572K and Loans of HK$ 18,512K.
The directors have assessed whether the investment and made an
impairment provision in full. |
We have reviewed the
consolidated financials of the subsidiary and having reviewed the
performance to date the subsidiary is profit making and is
continuing to grow.
We reviewed the latest management accounts post year end for the
subsidiary. We have reviewed the long term cashflow forecasts
prepared and understood and assessed the methodology used by the
directors in this analysis and determined it to be reasonable.
We tested management sensitivity analysis through changing the
assumptions used and re- running the cash flow forecast.
We discussed the results and the full impairment. |
Going concern
assumption
The Group is dependent upon its ability to generate sufficient cash
flows to meet continued operational costs and hence continue
trading.
Although the current loss-making status is as expected due to
the impact of Covid and the stage in development , given the
scale of cash outflows, the Group needs to be generating sufficient
revenues to sustain its position. The going concern assumptions is
dependent on future growth of the current businesses. No future
capital raises were being considered to maintain the business. The
Group relies on the support of one of its key shareholders. |
Our audit
procedures:
· We obtained and reviewed the directors’
assessment, including challenging the liquidity position;
· We agreed the assumed cash flows to the
business plan, walked through the business planning process and
tested the central assumptions and external data;
· We audited the key assumptions;
· We assessed the sensitivities of the underlying
assumptions.
· We assessed the financial support available
from a key shareholder. |
|
|
Our application of materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgment, we determined materiality
for the financial statements as a whole as follows:
|
Group financial statements |
Company financial statements |
Overall materiality |
HK$ 343,000 (2019: HK$ 700,000) |
HK$ 56,000 (2019: HK$ 119,000) |
How we determined it |
5% of Net Loss (2019: 5% of Net
Loss) |
5% of Net Loss (2019: 5% of Net
Loss) |
Rationale for
benchmark applied |
We believe that loss before tax is a
primary measure used by shareholders in assessing the performance
of the Group whilst gross asset values and revenue are a
representation of the size of the Group; all are generally accepted
auditing benchmarks. |
We believe that gross asset values
are a representation of the size of the Company and is a generally
accepted auditing benchmark. |
For each component in the scope of our Group audit, we allocated
a materiality that is less than our overall Group materiality. The
range of materiality allocated across components was between
HK$30,000 and HK$226,000.
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above HK$2,800 as well as misstatements below those
amounts that, in our view, warranted reporting for qualitative
reasons.
An overview of the scope of our
audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgments, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all
of our audits we also addressed the risk of management override of
internal controls, including evaluating whether there was evidence
of bias by the directors that represented a risk of material
misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
Group and the Company, the accounting processes and controls, and
the industry in which they operate.
The Group financial statements are a consolidation of 8
reporting units, comprising the Group’s operating businesses and
holding companies.
We performed audits of the complete financial information of
Grand Vision Media Holdings Plc, and GVC Holdings Ltd reporting
units, which were individually financially significant and
accounted for 100% of the Group’s revenue and 100% of the Group’s
absolute profit before tax (i.e., the sum of the numerical values
without regard to whether they were profits or losses for the
relevant reporting units). We also performed specified audit
procedures over goodwill and other intangible assets, as well as
certain account balances and transaction classes that we regarded
as material to the Group at 8 reporting units.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor’s
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We
have nothing to report in this regard.
Opinion on other matters
prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
· the information given in the strategic
report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the
financial statements; and
· the strategic report and the
directors’ report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to
report by exception
In the light of the knowledge and understanding of the group and
parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
· adequate accounting records have not
been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
· the parent company financial
statements [and the part of the directors’ remuneration report to
be audited] are not in agreement with the accounting records and
returns; or
· certain disclosures of directors’
remuneration specified by law are not made; or
· we have not received all the
information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement [set out on page 9], the directors are responsible for
the preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine 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, the directors are
responsible for assessing the group’s and parent company’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 the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
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 (UK) 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.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
The extent to which the audit was
considered capable of detecting irregularities, including fraud
Our approach to identifying and assessing the risks of material
misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations, was as follows:
· the senior statutory auditor ensured
the engagement team collectively had the appropriate competence,
capabilities and skills to identify or recognise non-compliance
with applicable laws and regulations;
· we identified the laws and regulations
applicable to the company through discussions with directors and
other management, and from our commercial knowledge and experience
of the digital marketing and advertising sector.
· we focused on specific laws and
regulations which we considered may have a direct material effect
on the financial statements or the operations of the company,
including Companies Act 2006, taxation legislation, data
protection, anti-bribery, employment, environmental, health and
safety legislation and anti-money laundering regulations.
· we assessed the extent of compliance
with the laws and regulations identified above through making
enquiries of management and inspecting legal correspondence;
and
· identified laws and regulations were
communicated within the audit team regularly and the team remained
alert to instances of non-compliance throughout the audit.
· We assessed the susceptibility of the
company’s financial statements to material misstatement, including
obtaining an understanding of how fraud might occur, by:
· making enquiries of management as to
where they considered there was susceptibility to fraud, their
knowledge of actual, suspected and alleged fraud;
· considering the internal controls in
place to mitigate risks of fraud and non-compliance with laws and
regulations.
To address the risk of fraud through management bias and
override of controls, we:
• performed analytical procedures
to identify any unusual or unexpected relationships;
• tested journal entries to
identify unusual transactions;
• assessed whether judgements and
assumptions made in determining the accounting estimates set out in
Note 3 of the Group financial statements were indicative of
potential bias;
• investigated the rationale
behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance
with laws and regulations, we designed procedures which included,
but were not limited to:
• agreeing financial statement
disclosures to underlying supporting documentation;
• reading the minutes of meetings
of those charged with governance;
• enquiring of management as to
actual and potential litigation and claims;
• reviewing correspondence with
HMRC and the company’s legal advisor.
There are inherent limitations in our audit procedures described
above. The more removed that laws and regulations are from
financial transactions, the less likely it is that we would become
aware of non-compliance. Auditing standards also limit the audit
procedures required to identify non-compliance with laws and
regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to
detect than those that arise from error as they may involve
deliberate concealment or collusion.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matters which we are required to
address
We were appointed by the audit committee on 8 February 2017 to audit the financial statements
for the period ending 31 December
2016. Our total uninterrupted period of engagement is 5
years, covering the years ending 31 December
2016 to 31 December 2020.
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with the additional report to
the audit committee.
Use of this report
This report is made solely to the company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
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.
Sanjay
Parmar (Senior Statutory Auditor)
For and on behalf of Jeffreys Henry
LLP (Statutory Auditors)
Finsgate
5-7 Cranwood Street
London EC1V
9EE
28 February
2022
Statements of Comprehensive Income for
the year ended 31 December 2020
|
|
Group |
Group |
Company |
Company |
|
|
For
the year |
For
the year |
For
the year |
For
the year |
|
|
ended |
ended |
ended |
ended |
|
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
|
Note |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Revenue |
4 |
5,827 |
12,034 |
- |
- |
Cost of sales |
|
(5,129) |
(10,648) |
- |
- |
Gross
profit |
|
698 |
1,386 |
- |
- |
|
|
|
|
|
|
Other income |
4 |
1,720 |
184 |
- |
- |
|
|
2,418 |
1,570 |
- |
- |
|
|
|
|
|
|
Administrative
expenses |
6 |
(9,839) |
(16,442) |
(1,329) |
(2,593) |
Provision for the
trade receivables |
|
(2,740) |
- |
|
|
Impairment loss for
investment in Subsidiary |
|
- |
- |
(114,571) |
- |
Impairment loss on the
intercompany current account |
|
- |
- |
(18,512) |
- |
(Loss)/profit for the
period from operations |
|
(10,161) |
(14,872) |
(134,412) |
(2,593) |
|
|
|
|
|
|
Finance costs |
5 |
111 |
(223) |
- |
- |
(Loss)/profit for the
period before tax |
|
(10,050) |
(15,095) |
(134,412) |
(2,593) |
|
|
|
|
|
|
Income tax
expense |
7 |
- |
- |
- |
- |
(Loss)/profit for the
period |
|
(10,050) |
(15,095) |
(134,412) |
(2,593) |
|
|
|
|
|
|
Other comprehensive
income (loss)/income |
|
|
|
|
|
Exchange differences
arising on translation of foreign operations |
|
257 |
138 |
- |
87 |
Total comprehensive
(loss)/ income for the period |
|
(9,793) |
(14,957) |
(134,412) |
(2,506) |
|
|
|
|
|
|
(Loss)/ profit
attributable to |
|
|
|
|
|
Equity holders of
parent company |
|
(9,761) |
(15,221) |
(134,412) |
(2,593) |
Non-controlling
interests |
|
(289) |
126 |
- |
- |
|
|
(10,050) |
(15,095) |
(134,412) |
(2,593) |
|
|
|
|
|
|
Total comprehensive (loss) / income
attributable to: |
|
|
|
|
Equity holders of
the parent company |
|
(9,504) |
(15,083) |
(134,412) |
(2,506) |
Non-controlling
interests |
|
(289) |
126 |
- |
- |
|
|
(9,793) |
(14,957) |
(134,412) |
(2,506) |
|
|
|
|
|
|
Earnings/(loss) per
shares - Basic and diluted HK$ |
8 |
(0.10) |
(0.16) |
(1.40) |
(0.027) |
Statements of financial position as at
31 December 2020
|
|
Group |
Group |
Company |
Company |
|
|
As
at |
As
at |
As
at |
As
at |
|
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
|
Notes |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
Property, plant and
equipment |
9 |
170 |
165 |
- |
- |
Right of use assets
(IFRS16) |
11 |
1,108 |
1,710 |
- |
- |
Investment in
Subsidiaries |
12 |
- |
- |
- |
114,572 |
Total non-current
assets |
|
1,278 |
1,875 |
- |
114,572 |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
Inventories |
10 |
- |
1,004 |
- |
- |
Trade and other
receivables |
13 |
3,549 |
6,403 |
- |
- |
Deposits and
prepayments |
13 |
400 |
395 |
55 |
52 |
Amount due from
subsidiaries |
13 |
- |
- |
- |
18,107 |
Cash and cash
equivalents |
14 |
855 |
510 |
43 |
114 |
Total current
assets |
|
4,804 |
8,312 |
98 |
18,273 |
Total
assets |
|
6,082 |
10,187 |
98 |
132,845 |
|
|
|
|
|
|
Equity and
liabilities |
|
|
|
|
|
Equity |
|
|
|
|
|
Share capital |
19 |
96,017 |
96,017 |
96,017 |
96,017 |
Share premium |
|
44,106 |
44,106 |
44,106 |
44,106 |
Group Re-organization
Reserve |
|
(100,031) |
(96,631) |
- |
- |
Capital Contribution
arising from Shareholder’s Loan |
|
844 |
844 |
- |
- |
Other Reserves |
|
4,824 |
3,849 |
3,849 |
3,849 |
Exchange Reserves |
|
2,366 |
4,509 |
276 |
266 |
Accumulated
deficit |
|
(79,109) |
(69,348) |
(152,489) |
(18,077) |
Equity attributable
to owners of the parent |
|
(30,983) |
(16,654) |
8,241 |
126,161 |
Non-controlling
interests |
|
(173) |
(3,284) |
- |
- |
Total
equity |
|
(31,156) |
(19,938) |
8,241 |
126,161 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
Convertible Bonds |
17 |
5,968 |
5,822 |
5,968 |
5,822 |
Shareholder loans |
18 |
9,227 |
8,893 |
477 |
- |
Total non-current
liabilities |
|
15,195 |
14,715 |
6,445 |
5,822 |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Trade and other
payables |
15 |
14,282 |
13,051 |
1,894 |
862 |
Lease Liabilities |
21 |
1,156 |
1,761 |
- |
- |
Amount due to a
director |
|
3,567 |
515 |
- |
- |
Deposits
received
Shareholder loan |
|
92
2,946 |
-
83 |
-
- |
-
- |
Total current
liabilities |
|
22,043 |
15,410 |
1,894 |
862 |
Total
liabilities |
|
37,238 |
30,020 |
8,339 |
6,684 |
|
|
|
|
|
|
Total equity and
liabilities |
|
6,082 |
10,187 |
98 |
132,845 |
Approved by the Board and authorised for issue on 28 February 2022
Jonathan Lo
Director
?
Company Registration No. 10028625
Statements of Changes in Equity
|
|
|
|
|
Share capital |
Share premium |
Other
reserves |
Exchange reserves |
Retained earnings |
Total
equity |
Company |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Balance at 1
January 2019 |
96,017 |
44,106 |
1,447 |
- |
(3,985) |
5,292 |
(Loss) for the
year |
- |
- |
- |
266 |
(1,186) |
(920) |
Convertible loan note
Share based payments |
- |
- |
1,082
1,320 |
- |
-
(1,320) |
1,082
- |
Total comprehensive
income |
- |
- |
2,402 |
266 |
(2,506) |
3,240 |
|
|
|
|
|
|
|
Balance at 31
December 2019 |
96,017 |
44,106 |
3,849 |
266 |
(18,077) |
126,161 |
|
|
|
|
|
|
|
Change in equity
for 2020 |
|
|
|
|
|
|
(Loss) for the
year |
- |
- |
- |
- |
(134,412) |
(134,412) |
Other comprehensive
income |
- |
- |
- |
10 |
- |
10 |
Share based
payments |
- |
- |
- |
- |
- |
- |
Total comprehensive
income |
- |
- |
- |
10 |
(134,412) |
(134,402) |
Balance at 31
December 2020 |
96,017 |
44,106 |
3,849 |
276 |
(152,489) |
(8,241) |
|
|
|
|
|
|
|
|
|
Statements of Changes in Equity
Attributable to the Group
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
Share premium |
Reverse Acquisition reserve |
Other reserve |
Exchange reserve |
Capital contribution reserves |
Retained earnings |
Total |
Non-controlling interests |
Total equity |
|
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
GVMH
PLC |
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2019 |
96,017 |
44,106 |
(96,631) |
1,447 |
450 |
- |
(54,215) |
(8,827) |
(3,410) |
(12,237) |
|
Capital
Contribution |
- |
- |
- |
- |
- |
|
- |
844 |
- |
844 |
|
Exchange
Reserve |
- |
- |
- |
- |
4,060 |
- |
- |
4,060 |
- |
4,060 |
|
Share
based payment |
- |
- |
- |
1,320 |
- |
- |
- |
1,320 |
- |
1,320 |
|
Loan
note |
- |
- |
- |
1,082 |
- |
- |
- |
1,082 |
- |
1,082 |
|
Non-Controlling
Interest |
- |
- |
- |
- |
- |
- |
- |
- |
126 |
126 |
|
Loss for the
period |
- |
- |
- |
- |
- |
- |
(15,133) |
(15,133) |
- |
(15,133) |
|
Balance at 31
December 2019 |
96,017 |
44,106 |
(96,631) |
3,849 |
4,510 |
844 |
(69,348) |
(16,653) |
(3,284) |
(19,937) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GVMH PLC |
|
|
|
|
|
|
|
|
|
|
|
Balance at 1
January 2020 |
96,017 |
44,106 |
(96,631) |
3,849 |
4,510 |
844 |
(69,348) |
(16,653) |
(3,284) |
(19,937) |
|
Exchange
Reserve |
- |
- |
- |
- |
(2,144) |
- |
- |
(2,144) |
- |
(2,144) |
|
Share
based payment |
- |
- |
- |
975 |
- |
- |
- |
975 |
- |
975 |
|
Other
reserve |
- |
- |
(3,400) |
- |
- |
- |
- |
(3,400) |
3,400 |
- |
|
Non-Controlling
Interest |
- |
- |
- |
- |
- |
- |
- |
- |
(289) |
(289) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the
period |
- |
- |
- |
- |
- |
- |
(9,761) |
(9,761) |
- |
(9,761) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31
DECEMBER 2020 |
96,017 |
44,106 |
(100,031) |
4,824 |
2,366 |
844 |
(79,109) |
(30,983) |
(173) |
(31,156) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital is the amount subscribed for shares at nominal
value.
The share premium has arisen on the issue of shares at a premium
to their nominal value.
Share-based payments reserve relate to the charge for
share-based payments in accordance with IFRS 2.
Retained earnings represent the cumulative loss of the Group
attributable to equity shareholders.
The reverse acquisition reserve arose in June 2019 on the reverse acquisition by GVC.
Statements of Cash flows for the year
ended 31 December 2020
|
Group
For the year |
Group
For the year |
Company For the year |
Company
For the year |
|
ended |
ended |
ended |
ended |
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
|
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Operating
activities |
|
|
|
|
(Loss)/ profit before
taxation |
(10,050) |
(15,095) |
(134,412) |
(2,593) |
Adjustments for: |
|
|
|
|
Depreciation |
843 |
2,350 |
- |
- |
Provision for the
trade receivables |
2,740 |
|
|
|
Impairment loss for
the investment |
- |
- |
114,571 |
- |
Impairment loss on the
intercompany current account |
- |
- |
18,512 |
- |
Share based
payment |
975 |
1,320 |
- |
1,320 |
Finance costs |
31 |
223 |
- |
- |
Reverse of
overprovided interest |
(143) |
- |
|
|
Operating loss
before changes in working capital |
(5,604) |
(11,202) |
(1,329) |
(1,273) |
Decrease in
inventories |
1,004 |
702 |
- |
- |
Decrease/ (increase)
in trade and other receivables |
109 |
(1,299) |
(3) |
- |
Decrease/ (increase)
in deposits and prepayments |
- |
641 |
- |
(4) |
Increase in trade and
other payables |
826 |
2,473 |
628 |
45 |
Increase in deposit
received |
10 |
(27) |
- |
- |
Cash generated
from/(used in) operating activities |
(3,655) |
(8,711) |
(704) |
(1,232) |
|
|
|
|
|
Investing
activities |
|
|
|
|
Payment for purchase
of property, plant and equipment |
(248) |
(10) |
- |
- |
Net cash (outflow)/
inflow from investing activities |
(248) |
(10) |
- |
- |
Financing
activities |
|
|
|
|
Increase in an amount
due from director |
3,052 |
211 |
- |
- |
(Repayment of)
/proceeds from shareholder loans |
3,796 |
(850) |
- |
- |
Increase in loans due
from subsidiaries |
- |
- |
895 |
|
Increase in
convertible loans |
- |
6,904 |
- |
6,904 |
Principal portion of
lease payment |
(636) |
(290) |
- |
- |
Net cash generated
from Financing activities |
6,212 |
5,975 |
895 |
6,904 |
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents |
2,309 |
(2,746) |
191 |
(1,023) |
Cash and cash
equivalents at 1 January |
510 |
2,552 |
113 |
783 |
Effect of foreign
exchange rate changes |
(1,964) |
704 |
(262) |
353 |
Cash and cash
equivalents at 31 December |
855 |
510 |
42 |
114 |
|
|
|
|
|
Represented by: |
|
|
|
|
Bank balance and
cash |
855 |
510 |
42 |
114 |
Notes to the financial statements
1. Reporting
entities
The Company is a UK incorporated entity with a registered number
of 10028625. GVMH's head office is in Honk Kong from where it is
managed. These consolidated financial statements comprise GVMH and
its subsidiaries. GVMH and its subsidiaries are primarily involved
in social media marketing and acting as commission agents .
2. Accounting
policies
2.1. Statement of
compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(“IFRS”) as adopted by the EU.
2.2. Basis of preparation
of the financial statements
The consolidated financial statements consolidate those of the
Company and its subsidiaries (together the “Group” or “Grand Vision
Media Holdings Plc”). The consolidated financial statements of the
Group and the individual financial statements of the Company are
prepared in accordance with applicable UK law and International
Financial Reporting Standards ("IFRS") as adopted by the European
Union and as applied in accordance with the provisions of the
Companies Act 2006. The Directors consider that the financial
information presented in these Financial Statements represents
fairly the financial position, operations and cash flows for the
period, in conformity with IFRS.
Consolidation
The consolidated financial statements include the financial
statements of the Company and its subsidiaries and associated
undertakings. All of the subsidiaries have the same reporting date
of 31 December.
2.3. Application of new
and revised International Financial Reporting Standards (IFRSs)
Changes in accounting policies and
disclosures
In the current year, the Group has applied the Amendments to
References to the Conceptual Framework in IFRS Standards and the
following amendments to IFRSs for the first time, which are
mandatorily effective for the annual period beginning on or after
1 January 2020 for the preparation of
the consolidated financial statements:
• IFRS 3 “Business
Combinations”
• IFRS 9, IAS 39 and IFRS 7
‘’Interest rate benchmark reform’’
• IAS 1 and IAS 8
‘’Definition of Material’’
Except as described below, the application of the new and
amendments to IFRSs in the current year has had no material impact
on the Group’s financial performance and positions for the current
and prior years and/or on the disclosures set out in these
consolidated financial statements.
New and revised IFRSs in issue but not
yet effective
GVMH PLC and its subsidiaries has not applied the following new
and revised IFRSs that have been issued but are not yet
effective:
Reference |
Title |
Application date of standard (Periods
commencing on or after) |
IFRS 17 |
Insurance
Contracts and the related Amendments |
1 January 2023 |
Amendments to IFRS
3 |
Reference to the
Conceptual Framework |
1 January 2022 |
Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16 |
Interest Rate
Benchmark Reform – Phase 2 |
1 January 2021 |
Amendments to IFRS
16 |
COVID-19 Related Rent
Concessions |
1 June 2020 |
Amendments to IAS
1 |
Classification of
Liabilities as Current or Non-current and related amendments to
Hong Kong Interpretation 5 (2020) |
1 January 2023 |
Amendments to IAS
16 |
Property, Plant and
Equipment – Proceeds before Intended Use |
1 January 2022 |
Amendments to IAS
37 |
Onerous Contracts –
Cost of Fulfilling a Contract |
1 January 2022 |
The Directors anticipate that the adoption of these standard and
the interpretations in future period will have no material impact
on the financial statements of the company.
Foreign currency
The functional currency of the Group is Hong Kong Dollars (HKD),
its subsidiaries are also in HKD. The presentational currency of
the Group is HKD because a significant amount of its transactions
is in HKD.
Transactions entered by the Group’s entities in a currency other
than the reporting currency are recorded at the rates ruling when
the transaction occur. Foreign currency monetary assets and
liabilities are translated at the rates ruling at the statement of
financial position date. Exchange differences arising on the
re-translation of outstanding monetary assets and liabilities are
also recognised in the income statement.
Going concern
The Group meets its day to day working capital requirement
through use of cash reserves and existing shareholder loans. The
Directors have considered whether the going concern basis is
applicable in the preparation of the financial statements. This
included the review of internal budgets, forecasts and financial
results which show that there is a reasonable expectation that the
Group should be able to operate within the level of its current
funding arrangement.
The COVID-19 pandemic has had a significant effect on the
Group’s results since January 2020,
as digital marketing spends across the customer base declined
considerably. Furthermore, the closure of cinemas in China has adversely affected the OOH revenue
stream. To mitigate against this, the Group has taken advantage of
local stimulus wherever possible, and sought to cut costs whilst
revenues are reduced. In Hong
Kong, the Employment Support Scheme has provided assistance
to pay wages from April 2020 to
September 2020. Savings have also
been made through reductions in rents to cinemas, office admin
staff and some consolidation of office/storage space.
The Group incurred a loss of HKD
10,050,000 for the year ended 31
December 2020 and had net current liabilities of
HK$ 17,239,000. This condition
indicates the existence of a material uncertainty which may cast
significant doubt on the Company's ability to continue as a going
concern. Therefore, the Company may be unable to realise its
assets. The financial statements do not include any adjustments
that would result if the Group was unable to continue as a going
concern.
After careful consideration of the matters set out above and the
support provided by a key shareholder, the Directors are of the
opinion that the group will be able to undertake its planned
activities for the period to 28 February
2023 from reserves and shareholder funding and have prepared
the consolidated financial statement on a going concern basis.
Nevertheless, due to the uncertainties inherent in meeting its
revenue predictions and obtaining obstacle funding these can be no
certainty in these respects. The financial statements do not
include any adjustments that would result if the group was unable
to continue as a going concern.
2.4. Subsidiaries and
non-controlling interests and GVMH PLC and its subsidiaries
reorganisation accounting
Subsidiaries are all entities over which Grand Vision Media
Holdings Plc has the power to govern the financial and operating
policies generally accompanying a shareholding of more than one
half of the voting rights. The existence and effect of potential
voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another
entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Company. They are de-consolidated
from the date that control ceases.
In June 2018, Grand Vision Media
Holdings Plc (“Company”) acquired the entire issued share capital
of GVC Holdings Limited (“legal subsidiary”) in exchange of
issuance of shares to GVC Holdings Limited. As the legal
subsidiary is reversed into the Company (the legal parent), which
originally was a publicly listed cash shell company, this
transaction cannot be considered a business combination, as the
Company, the accounting acquiree does not meet the definition of a
business, under IFRS 3 ‘Business Combinations’. However, the
accounting for such capital transaction should be treated as a
share- based payment transaction and therefore accounted for under
IFRS 2 ‘Share-based payment’. Any difference in the fair value of
the shares deemed to have been issued by the GVC Holdings Limited
(accounting acquirer) and the fair value of Grand Vision Media
Holdings PLC’s (the accounting acquiree) identifiable net assets
represents a service received by the accounting acquirer.
Although the consolidated financial information has been issued
in the name of Grand Vision Media Holdings PLC, the legal parent,
it represents in substance continuation of the financial
information of the legal subsidiary.
The assets and liabilities of the legal subsidiary are
recognized and measured in the Group financial statements at the
pre-combination carrying amounts and not re-stated at fair
value.
The retained earnings and other reserves balances recognized in
the Group financial statements reflect the retained earnings and
other reserves balances of the legal subsidiary immediately before
the business combination and the results of the period from
June 2019 to the date of the business
combination are those of the legal subsidiary only.
The equity structure (share capital and share premium) appearing
in the Group financial statements reflects the equity structure of
Grand Vision Media Holdings PLC the legal parent. This
includes the shares issued in order to affect the business
combination.
2.5. Available-for-sale
investments
Available-for-sale investments represent an investment in the
securities. At the end of each reporting period the fair value is
remeasured, with any resultant gain or loss being recognised in
other comprehensive income and accumulated separately in equity in
the fair value reserve. As an exception to this, investments in
equity securities that do not have a quoted price in an active
market for an identical instrument and whose fair value cannot
otherwise be reliably measured are recognised in the statement of
financial position at cost less impairment losses. Dividend income
from equity securities and interest income from debt securities
calculated using the effective interest method are recognised in
profit or loss in accordance with the policies. Foreign exchange
gains and losses resulting from changes in the amortised cost of
debt securities are also recognised in profit or loss.
When the investments are derecognised or impaired, the
cumulative gain or loss recognised in equity is reclassified to
profit or loss. Investments are recognised/derecognised on the date
GVMH PLC and its subsidiaries commits to purchase/sell the
investments or they expire.
2.6. Property, plant and
equipment
The property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses. Gains or losses
arising from the retirement or disposal of an item of property,
plant and equipment are determined as the difference between the
net disposal proceeds and the carrying amount of the item and are
recognised in profit or loss on the date of retirement or
disposal.
Depreciation is calculated to write off the cost of items of
property, plant and equipment, less their estimated residual value,
if any, using the straight-line method over their estimated useful
lives as follows:
Display panels and
CMS |
30% - 33.33% |
Computer
equipment |
30% - 33.33% |
Furniture’s and
fixtures |
30% - 33.33% |
Leasehold
improvements |
30% - 50% |
Both the useful life of an asset and its residual value, if any,
are reviewed annually.
The carrying value of the property, plant and equipment is
compared to the higher of value in use and the fair value less
costs to sell. If the carrying value exceeds the higher of the
value in use and fair value less the costs to sell the asset, then
the asset is impaired and its value reduced by recognising an
impairment provision.
2.7. Impairment of
non-financial assets, other than inventories
At the end of each reporting period, property, plant and
equipment and investments in a subsidiary are reviewed to determine
whether there is any indication that those assets have suffered an
impairment loss. If there is an indication of possible impairment,
the recoverable amount of any affected asset (or GVC Holdings Ltd
and its subsidiaries of related assets) is estimated and compared
with its carrying amount. If an estimated recoverable amount is
lower, the carrying amount is reduced to its estimated recoverable
amount, and an impairment loss is recognised immediately in profit
or loss.
If an impairment loss subsequently reverses, the carrying amount
of the asset (or GVC Holdings Ltd and its subsidiaries of related
assets) is increased to the revised estimate of its recoverable
amount, but not in excess of the amount that would have been
determined had no impairment loss been recognised for the asset
(GVC Holdings Ltd and its subsidiaries of related assets) in prior
years. A reversal of an impairment loss is recognised immediately
in profit or loss.
2.8. Inventories
Inventories are valued at the lower of cost and net realisable
value. Cost is calculated using the weighted average cost formula
and comprises all costs of purchase, costs of conversion and other
costs incurred in bringing the inventories to their present
location and condition. Net realisable value is the estimated
selling price in the ordinary course of business less the estimated
costs to completion and the estimated costs necessary to make the
sale.
When inventories are sold, the carrying amount of those
inventories is recognised as an expense in the period in which the
related revenue is recognised. The amount of any write-down of
inventories to net realisable value and all losses of inventories
are recognised as an expense in the period the write down or loss
occurs. The amount of any reversal of any write-down of inventories
is recognised as a reduction in the amount of inventories
recognised as an expense in the period in which the reversal
occurs.
2.9. Trade and other
receivables
The Group classifies all its financial assets as trade and other
receivables. The classification
depends on the purpose
for which the financial assets were acquired.
Trade receivables and other receivables that have fixed or
determinable payments that are not quoted in an active market are
classified as loans and receivables financial assets. Loans and
receivables financial assets are measured at amortised cost using
the effective interest method, less any impairment loss.
The Group’s loans and receivables financial assets comprise
other receivables (excluding prepayments) and cash and cash
equivalents included in the Statement of Financial Position.
2.10. Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balance. Bank
overdrafts that are repayable on demand and form an integral part
of GVMH PLC’s cash management are also included as a component of
cash and cash equivalents for the purpose of the consolidated cash
flow statement.
2.11. Trade and other payables
Trade and other payables are initially recognised at fair value.
They are subsequently measured at amortised cost using the
effective interest method unless the effect of discounting would be
immaterial, in which case they are stated at cost.
2.12. Shareholders loan
Shareholders loans are initially recognised at fair value. They
are subsequently measured at amortised cost using the effective
interest method. The difference between the fair value and the
carrying amortised cost (i.e. the effective interest portion) is
first recognized in equity as capital contribution reserve.
2.13. Employee benefits
Short-term benefits
Wages, salaries, paid annual leave and sick leave, bonuses and
non-monetary benefits are accrued in the period in which the
associated services are rendered by employees of the Group.
2.14. Taxation
(i) Current tax
The tax currently payable is based on taxable profit for the
period. Taxable profit differs from ‘profit before tax’ as reported
in the statement of profit or loss because of items of income or
expense that are taxable or deductible in other periods and items
that are never taxable or deductible. Grand Vision Media Holding
Plc’s current tax is calculated using rates that have been enacted
during the reporting period
(ii) Deferred tax
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the statement of
financial position differs from its tax base, except for
differences arising on:
• the initial
recognition of goodwill;
• the initial
recognition of an asset or liability in a transaction which is not
a business combination and at the time of the transaction affects
neither accounting or taxable profit; and
• investments in
subsidiaries where the Group is able to control the timing of the
reversal of the difference and it is probable that the difference
will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantially enacted by the
balance sheet date and are expected to apply when the deferred tax
liabilities or assets are settled or recovered. Deferred tax
balances are not discounted.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities.
The Group is entitled to a tax deduction on the exercise of
certain employee share options. A share-based payment expense is
recorded in the income statement over the period from the grant
date to the vesting date of the relevant options. As there is a
temporary difference between the accounting and tax bases, a
deferred tax asset may be recorded. The deferred tax asset arising
on share option awards is calculated as the estimated amount of tax
deduction to be obtained in the future (based on the Group’s share
price at the balance sheet date) pro-rated to the extent that the
services of the employee have been rendered over the vesting
period. If this amount exceeds the cumulative amount of the
remuneration expense at the statutory rate, the excess is recorded
directly in equity, against retained earnings. Similarly, current
tax relief in excess of the cumulative amount of the Share-based
payments expense at the statutory rate is also recorded in retained
earnings.
2.15. Provision and contingent
liabilities
Provisions are recognised for other liabilities of uncertain
timing or amount when GVMH PLC and its subsidiaries or GVMH PLC has
a legal or constructive obligation arising as a result of a past
event, it is probable that an outflow of economic benefits will be
required to settle the obligation and a reliable estimate can be
made. Where the time value of money is material, provisions are
stated at the present value of the expenditure expected to settle
the obligation.
Where it is not probable that an outflow of economic benefits
will be required, or the amount cannot be estimated reliably, the
obligation is disclosed as a contingent liability, unless the
probability of outflow of economic benefits is remote. Possible
obligations, whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future events are also
disclosed as contingent liabilities unless the probability of
outflow of economic benefits is remote.
2.16. Revenue recognition
After the adoption of IFRS 15, the company recognise revenue
from contracts with customers when (or as) the company satisfies a
performance obligation by transferring a promised good or service
(i.e., an asset) to a customer. An asset is transferred When (or
as) the customer obtains control of that asset. When (or as) a
performance obligation is satisfied, the company recognises as
revenue the amount of the transaction price (which includes
estimates of variable consideration that are constrained in
accordance with IFRS 15) that is allocated to that performance
obligation. Further details of the company’s revenue and other
income recognition policies are as follows:
(i) Service income is recognised as income on a
straight-line based over the term, unless another systematic basis
is more representative of the time pattern of the user’s
benefit.
(ii) Barter revenueis recognised only when the goods or services
being exchanged are of a dissimilar nature. Barter revenue is
measured at the fair value of goods or services rendered, adjusted
by the amount of cash or cash equivalents received or paid. If the
fair value of the goods or services rendered cannot be relaibly
measured, the revenue is measured at the fair value of the goods or
services received, again adjusted by the amount of cash or cash
equivalents received
(iii) Interest income is recognised on a time-proportion basis
using the effective interest method. When a loan and receivable is
impaired, the group reduces the carrying amount to its recoverable
amount, being the estimated future cash flow discounted at the
original effective interest rate of the instrument, and continues
unwinding the discount as interest income. Interest income on
impaired loan and receivables is recognised using the original
effective interest rate.
2.17. Translation of foreign
currencies
Foreign currency transactions during the year are translated at
the foreign exchange rates ruling at the transaction dates.
Monetary assets and liabilities denominated in foreign currencies
are translated at the foreign exchange rates ruling at the end of
the reporting period. Exchange gains and losses are recognised in
profit or loss.
Non-monetary assets and liabilities that are measured in terms
of historical cost in a foreign currency are translated using the
foreign exchange rates ruling at the transaction dates.
Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated using the
foreign exchange rates ruling at the dates the fair value was
measured.
The results of foreign operations are translated into
Hong Kong dollars at the exchange
rates approximating the foreign exchange rates ruling at the dates
of the transactions. Statement of financial position items,
including goodwill arising on consolidation of foreign operations,
are translated into Hong Kong
dollars at the closing foreign exchange rates at the end of the
reporting period. The resulting exchange differences are recognised
in other comprehensive income and accumulated separately in equity
in the exchange reserve.
On disposal of a foreign operation, the cumulative amount of the
exchange differences relating to that foreign operation is
reclassified from equity to profit or loss when the profit or loss
on disposal is recognised.
Exchange rates used in these accounts :
GBP/HKD : 10.59
USD/HKD : 7.75
RMB/HKD : 1.12
SGD/HKD : 5.67
2.18. Borrowing costs
Borrowing costs represented a notional interest on shareholders’
loan, which is accrued on time proportion basis taking into account
of the shareholder loan outstanding and the interest
applicable.
2.19. Financial instruments
IFRS 9 requires an entity to address the classification,
measurement and recognition of financial assets and
liabilities.
a) Classification
The Group classifies its financial assets in the following
measurement categories:
•
those to be measured subsequently at fair value (either through OCI
or through profit or loss); and
•
those to be measured at amortised cost.
The classification depends on the Group’s business model for
managing the financial assets and the contractual terms of the cash
flows.
For assets measured at fair value, gains and losses will be
recorded either in profit or loss or in OCI. For investments in
equity instruments that are not held for trading, this will depend
on whether the Group has made an irrevocable election at the time
of initial recognition to account for the equity investment at fair
value through other comprehensive income (FVOCI).
The Group classifies financial assets as at amortised costs only
if both of the following criteria are met:
•
the asset is held within a business model whose objective is to
collect contractual cash flows; and
•
the contractual terms give rise to cash flows that are solely
payment of principal and interest.
b) Recognition
Purchases and sales of financial assets are recognised on trade
date (that is, the date on which the Group commits to purchase or
sell the asset). Financial assets are de-recognised when the rights
to receive cash flows from the financial assets have expired or
have been transferred and the Group has transferred substantially
all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group measures a financial asset at
its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transaction costs that are
directly attributable to the acquisition of the financial
asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
Debt instruments
Amortised cost: Assets that are held for collection of
contractual cash flows, where those cash flows represent solely
payments of principal and interest, are measured at amortised cost.
Interest income from these financial assets is included in finance
income using the effective interest rate method. Any gain or loss
arising on derecognition is recognised directly in profit or loss
and presented in other gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as a
separate line item in the statement of profit or loss.
d) Impairment
The Group assesses, on a forward-looking basis, the expected
credit losses associated with any debt instruments carried at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk. For
trade receivables, the Group applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
2.20. Segmental analysis
In the opinion of the directors, the group has one class of
business being social media advertising. The groups primary
reporting format is determined by geographical segment. There is
currently only one geographical reporting segment which is People’s
Republic of China.
2.21. Leases
Definition of a lease
A contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period of
time in exchange for consideration.
For contracts entered into or modified or arising from business
combinations on or after the date of initial application, the Group
assesses whether a contract is or contains a lease based on the
definition under IFRS 16 at inception, modification date or
acquisition date, as appropriate. Such contract will not be
reassessed unless the terms and conditions of the contract are
subsequently changed.
The Group as a lessee
Allocation of
consideration to components of a contract.
For a contract that contains a lease component and one or more
additional lease or non-lease components, the Group allocates the
consideration in the contract to each lease component on the basis
of the relative stand-alone price of the lease component and the
aggregate stand-alone price of the non-lease components and the
aggregate stand-alone price of non-lease components.
Non-lease components are separated from lease component on the
basis of their relative stand-alone prices.
As a practical expedient, leases with similar characteristics
are accounted on a portfolio basis when the Group reasonably
expects that the effects on the consolidated financial statements
would not differ materially from individual leases within the
portfolio.
Short-term
leases
The Group applies the short-term lease recognition exemption to
leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option. Lease
payments on short-term leases are recognised as expense on a
straight-line basis or another systematic basis over the lease
term.
Right-of-use
assets
The cost of right-of-use asset includes:
? the amount of the initial measurement of the lease
liability;
? any lease payments made at or before the commencement
date, less any lease incentives received;
? any initial direct costs incurred by the Group; and
? an estimate of costs to be incurred by the Group in
dismantling and removing the underlying assets, restoring the site
on which it is located or restoring the underlying asset to the
condition required by the terms and conditions of the lease.
Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities.
Right-of-use assets in which the Group is reasonably certain to
obtain ownership of the underlying leased assets at the end of the
lease term are depreciated from commencement date to the end of the
useful life. Otherwise, right-of-use assets are depreciated on a
straight-line basis over the shorter of its estimated useful life
and the lease term.
The Group presents right-of-use assets as a separate line item
on the consolidated statement of financial position.
Refundable rental
deposits
Refundable rental deposits paid are accounted under HKFRS 9 and
initially measured at fair value. Adjustments to fair value at
initial recognition are considered as additional lease payments and
included in the cost of right-of-use assets.
Lease
liabilities
When recognising the lease liabilities for leases previously
classified as operating leases, the Group has applied incremental
borrowing rates of the relevant group entities at the date of
initial application. The incremental borrowing rates applied by the
relevant group entities.
The lease payments include:
? fixed payments (including in-substance fixed payments)
less any lease incentives receivable;
? variable lease payments that depend on an index or a
rate, initially measured using the index or rate as at the
commencement date;
? amounts expected to be payable by the Group under
residual value guarantees; • the exercise price of a purchase
option if the Group is reasonably certain to exercise the option;
and
? payments of penalties for terminating a lease, if the
lease term reflects the Group exercising an option to terminate the
lease.
The Group presents lease liabilities as a separate line item on
the consolidated statement of financial position.
The Group as a lessor
Classification and
measurement of leases
Leases for which the Group is a lessor are classified as finance
or operating leases. Whenever the terms of the lease transfer
substantially all the risk and rewards incidental to ownership of
an underlying asset to the lessee, the contract is classified as a
finance lease. All other leases are classified as operating
lease.
Amounts due from lessees under finance leases are recognised as
receivables at commencement date at amounts equal to net
investments in the leases, measured using the interest rate
implicit in the respective lease. Initial direct costs (other than
those incurred by manufacturer or dealer lessors) are included in
the initial measurement of the net investments in the leases.
Interest income is allocated to accounting periods so as to reflect
a constant periodic rate of return on the Group’s net investment
outstanding in respect of the leases.
Sublease
When the Group is an intermediate lessor, it accounts for the
head lease and the sublease as two separate contracts. The sublease
is classified as a finance or operating lease by reference to the
right-of-use asset arising from the head lease, not with reference
to the underlying asset.
2.22. Government grants
Government grants are not recognised until there is reasonable
assurance that the Group will comply with the conditions attaching
to them and that the grants will be received.
Government grants are recognised in profit or loss on a
systematic basis over the periods in which the Group recognises as
expenses the related costs for which the grants are intended to
compensate. Specifically, government grants whose primary condition
is that the Group should purchase, construct or otherwise acquire
non-current assets are recognised as deferred income in the
consolidated statement of financial position and transferred to
profit or loss on a systematic and rational basis over the useful
lives of the related assets.
Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related
costs are recognised in profit or loss in the period in which they
become receivable.
3. Summary of
Critical Accounting Estimates and judgements
The preparation of financial information in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires the Directors to exercise their judgement in the process
of applying the accounting policies which are detailed above. These
judgements are continually evaluated by the Directors and
management and are based on historical experience and other
factors, including expectations of future events that are believed
to be reasonable under the circumstances.
The key estimates and underlying assumptions concerning the
future and other key sources of estimation uncertainty at the
statement of financial position date, that have a significant risk
of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial period are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
The estimates and judgements which have a significant risk of
causing a material adjustment to the carrying amount of assets and
liabilities, as well as the recognition of revenue, within the next
financial year are discussed below:
• Recognising appropriate revenue in line with performance
obligations
Management identifies the performance obligations associated
with each contract and then exercises judgement to establish an
appropriate percentage of the total transaction price to recognise
once each identified performance obligation is successfully
completed.
• Useful lives of depreciable assets
Management reviews the useful lives and residual value of
depreciable assets at each reporting date to ensure that the useful
lives represent a reasonable estimate of likely period of benefit
to the Group. Tangible fixed assets are depreciated over their
useful lives taking into account of residual values, where
appropriate. The actual lives of the assets and residual values are
assessed annually and may vary depending on a number of factors. In
re-assessing asset lives, factors such as technological innovation,
product life cycles and maintenance programmes are taken into
account. Residual value assessments consider issues such as future
market conditions, the remaining life of the asset and projected
disposal values.
Company
• Impairment of investment in subsidiary and intercompany
balances
Management reviews the expected future cashflows from the cash
generating unit which are discounted to their present value using a
pre-tax discount rate estimate of likely period of benefit to the
Group. The estimation of future cashflows is dependent on
various factors and may vary . A full impairment
against the carrying value has been booked in these financial
statements.
4. Revenue
Analysis of GVMH PLC and its subsidiaries’ revenue is as
follows:
|
Year
ended |
Year
ended |
Year
ended |
Year
ended |
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
|
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Revenue |
|
|
|
|
Advertising fee
income |
49 |
5,593 |
- |
- |
Digital marketing
income |
2,627 |
6,441 |
- |
- |
Other |
3,151 |
- |
- |
- |
|
5,827 |
12,034 |
- |
- |
|
|
|
|
|
Other
income |
|
|
|
|
Sundry income |
1,022 |
184 |
- |
- |
Government grant |
698 |
|
|
|
|
1,720 |
184 |
- |
- |
|
7,547 |
12,218 |
- |
- |
Other Income represents rent, management and ad hoc professional
services provided during the year.
5. Finance costs
|
|
|
|
|
|
Year
ended |
Year
ended |
Year ended |
Year
ended |
|
31
December 2020 |
31
December 2019 |
31 December 2020 |
31
December 2019 |
|
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Finance
costs |
|
|
|
|
Interest expense on
lease liabilities |
31 |
7 |
|
|
Interest on
shareholder loans |
- |
216 |
|
|
Reverse on the
overprovided shareholder loans |
(142) |
- |
- |
- |
|
(111) |
223 |
|
|
6. Administrative expenses |
|
|
|
|
|
Year
ended |
Year
ended |
Year ended |
Year
ended |
|
31
December 2020 |
31
December 2019 |
31 December 2020 |
31
December 2019 |
|
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Audit fees- Company
and group |
318 |
370 |
168 |
209 |
Business development
and marketing |
4 |
181 |
- |
- |
Share based
payment |
975 |
1,319 |
- |
1,320 |
Depreciation |
843 |
2,350 |
- |
- |
RTO, Legal and
professional fee |
607 |
490 |
281 |
304 |
Office rental |
228 |
953 |
- |
- |
Overseas
travelling |
11 |
153 |
- |
- |
Other |
2,203 |
2,838 |
280 |
239 |
Administrative
expenses |
5,189 |
8,655 |
729 |
2,072 |
Director’s fees and
emoluments* |
1,320 |
1,380 |
600 |
521 |
Wages and
Salaries |
3,330 |
6,407 |
- |
- |
|
9,839 |
16,442 |
1,329 |
2,593 |
*No
pension contributions or other benefits
Employee numbers |
No. |
No. |
No. |
No. |
Management |
3 |
4 |
2 |
3 |
Operations |
16 |
18 |
- |
- |
|
19 |
22 |
2 |
3 |
|
|
|
|
|
|
|
|
|
|
|
7. Income tax
expense
No Hong Kong profits tax
provision made in the accounts as GVMH PLC and its subsidiaries’ do
not have any assessable profits for the period.
Reconciliation between tax expenses and accounting profit at
applicable tax rates of 16.5%:
|
|
|
|
|
|
Year
ended |
Year
ended |
Year
ended |
Year
ended |
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
|
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
(Loss) / profit before
tax |
(10,050) |
(15,095) |
(134,412) |
(2,593) |
|
|
|
|
|
Notional tax on (loss)
/ profit before taxation, calculated at the rates applicable to
(loss) / profit in the countries concerned |
(1,658) |
(2,491) |
(22,178) |
(428) |
|
|
|
|
|
Tax effect of
non-taxable income |
- |
- |
- |
- |
Tax effect of not
recognised tax loss |
1,658 |
2,491 |
22,178 |
428 |
Actual tax
expenses |
- |
- |
- |
- |
GVMH PLC and its subsidiaries has not recognised deferred tax
assets of HK$3,102,251 (2019:
HK$3,029,159) in respect of
accelerated depreciation over capital allowances. No deferred tax
asset has been recognised on the accumulated tax losses of
HK$18,801,523 (2019:HK$18,358,340) as the availability of future
taxable profits against which the assets can be utilised is
uncertain at 31 December 2020.
The tax losses can be carried forward to offset against the
taxable profits of subsequent years for up to five years from the
year in which they were incurred or there is no restriction on
their expiry, depending on the tax jurisdiction concerned.
8. Earnings/ (Loss)
per share
The calculation of basic earnings per share is based on GVMH PLC
and its subsidiaries’ loss attributable to shareholders of GVMH PLC
and weighted average number of shares in issue during the year,
details are as follows:
|
|
|
|
|
|
Year
ended |
Year
ended |
Year
ended |
Year
ended |
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
|
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Profit/loss
attributable to GVMH PLC |
(10,050) |
(15,095) |
(134,412) |
(2,593) |
|
|
|
|
|
Weighted average
number of shares |
96,287,079 |
96,287,079 |
96,287,079 |
96,287,079 |
Basic and diluted loss
per share HK$ |
(0.10) |
(0.16) |
(1.40) |
(0.027) |
There were no potential dilutive ordinary shares in existence
during the period ended 31 December
2020 or the years ended 31 December
2019, and hence diluted earnings per share is the same as
the basic earnings per share.
Property, plant and
equipment |
Displays panels and CMS |
Computer equipment |
Furniture, fixtures & equipment |
Leasehold improvement |
Total |
|
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Cost |
|
|
|
|
|
At 31 December
2018 |
16,278 |
288 |
301 |
82 |
16,949 |
Additions during the
year 2019 |
- |
9 |
- |
- |
9 |
Exchange
realignment |
(58) |
(1) |
- |
- |
(59) |
At 31 December
2019 |
16,220 |
296 |
301 |
82 |
16,899 |
Additions during the
year 2020 |
- |
- |
42 |
206 |
248 |
Write-off |
- |
- |
- |
(36) |
(36) |
Exchange
realignment |
166 |
2 |
- |
- |
168 |
At 31 December
2020 |
16,386 |
298 |
343 |
252 |
17,279 |
|
|
|
|
|
|
Accumulated
depreciation |
|
|
|
|
|
At 31 December
2018 |
14,173 |
220 |
296 |
76 |
14,765 |
Charge for the year
2019 |
1,965 |
45 |
2 |
6 |
2,018 |
Written back on
disposal |
(49) |
- |
- |
- |
(49) |
At 31 December
2019 |
16,089 |
265 |
298 |
82 |
16,734 |
Charge for the year
2020 |
129 |
29 |
15 |
69 |
242 |
Write-off |
- |
- |
- |
(36) |
(36) |
Exchange
realignment |
168 |
1 |
- |
- |
170 |
At 31 December
2020 |
16,386 |
295 |
313 |
115 |
17,109 |
|
|
|
|
|
|
Net carrying
amount |
|
|
|
|
|
At 31 December
2020 |
- |
3 |
29 |
137 |
170 |
At 31 December
2019 |
131 |
31 |
3 |
- |
165 |
9. Inventories
|
As
at |
As
at |
As
at |
As
at |
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
Inventories |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Goods |
- |
- |
- |
- |
Online resources |
- |
1,004 |
|
|
|
- |
1,004 |
- |
- |
As at 31 December 2020, no
provision for impairment on goods for the group has been made. The
cost of inventory recognised as expenses is HK$1,004k (2019: HK$703k).
10. Right of use assets
Set out below are the carrying amounts of right-of-use assets
recognised and the movements during the year:
Right of use
assets |
Leasehold improvement |
|
HK$’000 |
At 1/1/2019 |
308 |
Additions during the
year 2019 |
1,734 |
Depreciation |
(332) |
At 1/1/2020 |
1,710 |
Additions during the
year 2020 |
- |
Depreciation |
(602) |
At 31/12/2020 |
1,108 |
11. Investments in
Subsidiaries
Company |
|
2020 |
2019 |
|
|
HK$’000 |
HK$’000 |
Cost |
|
|
|
At 1 January |
|
114,572 |
114,572 |
Loans to
subsidiaries |
|
18,512 |
18,107 |
|
|
??????? |
??????? |
At 31 December |
|
133,084 |
132,679 |
|
|
??????? |
??????? |
Impairment |
|
|
|
At 1 January |
|
- |
- |
Loans to
subsidiaries |
|
(18,512) |
- |
Investment in
subsidiaries |
|
(114,572) |
- |
|
|
??????? |
??????? |
At 31 December |
|
(133,084) |
- |
|
|
??????? |
??????? |
Net Carrying
Amount |
|
- |
132,679 |
|
|
_________ |
_________ |
See note 25 for list of subsidiaries
and their respective holdings.
The recoverable amount of the investments has been determined to
be the value in use of the cash flows generated from the continuing
operations of the GVC Holdings Limited and its subsidiaries. In
performing this assessment, management has applied the following
assumptions and estimates:
· cash flows have been projected over a period
of five years from 31 December 2020,
which management considers appropriate due to the nature of
its advertising services and related income of medical
equipment;
· cash inflow projections reflect the
following key assumptions:
· revenues from the continued performance of
marketing and advertising services for customers and commission
revenues from medical equipment;
· revenues in the short to medium term are
based on contracted amounts, contracts currently in negotiation and
estimates of services to be performed;
· cash outflows, which include contract
delivery costs, operating expenses, administrative expenses and
capital spend are assumed to be consistent with current
experience;
· revenue and cost of sales from 2021 are
forecasted for a year on year growth of 0%, which is management’s
estimate of the average growth for the principal geography in
which the entity operates; and
· a pre-tax discount rate of 5% has been
applied in discounting cash flows to their present value, which has
been benchmarked against available sources for comparable companies
and geographical location of GVC Holdings Limited.
Cash flow projections are most sensitive to the assumptions
regarding:
· commission revenue from new contracts in
completion;
- Growth in online marketing
· Changes to the level of panels currently in
display at cinemas;
· Closing price for the panel per 2-week
segments; and
· changes in the discount rate.
At 31 December 2020, there was no
headroom in respect of the carrying value of the parent company’s
investment in GVC Holdings Limited resulting in an impairment of
the investment in GVC Holdings Limited would be necessary.
12. Trade and other receivables
Note: Amounts due from related companies are unsecured,
interest-free and repayable on demand.
Receivables that was not impaired was as follows:
|
As
at |
As
at |
As
at |
As
at |
|
31 December
2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
|
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Prepayments |
400 |
395 |
55 |
52 |
Amount due from
Subsidiaries |
- |
- |
- |
18,107 |
Neither past due or
nor impaired |
3,549 |
6,403 |
- |
- |
|
3,949 |
6,798 |
55 |
18,159 |
Note: Trade receivables are stated after provisions for
impairment of HK$3,549k (2019:
HK$6,403k). The directors consider
that the carrying amount of receivables is not materially different
to their fair value. Amounts owed by subsidiaries are stated after
provisions for impairment of HK$18,512k (2019: HK$Nil)
13. Cash and cash
equivalents
|
As
at |
As
at |
As
at |
As
at |
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
Cash and cash
equivalents |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Cash at bank and in
hand |
855 |
510 |
43 |
114 |
|
855 |
510 |
43 |
114 |
14. Trade and other payables
|
As
at |
As
at |
As
at |
As
at |
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
Trade and other
payables |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Trade payables |
14,282 |
13,051 |
1,894 |
862 |
Other payables |
- |
- |
- |
- |
Total trade and
other payables |
14,282 |
13,051 |
1,894 |
862 |
15. Share based payments
The Group has a share ownership compensation scheme for
Directors and Senior employees of the Group. In
accordance with the provisions
of the plan, Directors and Senior employees may be granted options
to purchase ordinary shares in the Company.
The company issued options over 12,000,000 ordinary shares on
19 June 2018. The options vest
annually over a 3 year period to 31 December
2020 and can be exercised at 22.5p per share during this
period. 12,000,000 options have vested as at 31 December 2020.
The fair value of equity-based share options granted is
estimated at the date of grant using the Black-Scholes pricing
model, taking into account the terms and conditions upon which the
options have been granted. The calculated fair value of share
options charged to the Group and Company financial statements in
the year is HK$975k.(2019:
HK$1,320k)
The following are the inputs to the model for the options
granted during the prior year:
|
Share
Options
2020 |
Share
Options
2019 |
Exercise price |
0.225p |
0.15p |
Share price at date of
grant |
0.15p |
0.15p |
Risk free rate |
1.04% |
1.04% |
Volatility |
50% |
50% |
Expected Life |
3 Years |
3 Years |
Fair Value |
0.0229999 |
0.03626798 |
|
|
|
|
|
No. of Options |
|
WAEP |
As at 31
December 2018 |
|
|
4,000,000 |
|
|
0.15 |
Vested
during the year |
|
|
4,000,000 |
|
|
0.17 |
Forfeited/cancelled during the year |
|
|
- |
|
|
- |
Exchanged
for shares |
|
|
|
- |
|
|
- |
As at 31
December 2019 |
|
|
8,000,000 |
|
|
0.16 |
Vested
during the year |
|
|
4,000,000 |
|
|
0.225 |
Forfeited/cancelled during the year |
|
|
- |
|
|
- |
Exchanged
for shares |
|
|
|
- |
|
|
- |
As at 31
December 2020 |
|
|
12,000,000 |
|
|
0.1817 |
16. Convertible loan
On 19 July 2019 , the company
issues £670k of convertible loan notes, which are redeemable on
1 July 2021 or convertible into
shares at 15p per share at any time before this date.
The holders of the loan notes have agreed to defer repayment of
the loan until the Group has the funds available for repayment, and
renegotiate the repayment date.
Subsequent measurement
at |
2020 |
2019 |
Term of loan in
years |
1.5 |
1.5 |
Annual interest rate
for equivalent non-convertible |
12% |
12% |
Principal |
£670,000 |
£670,000 |
Present value of
principal at HKD |
HKD5,968,259 |
HKD5,821,901 |
17. Shareholder loans
|
As
at |
As
at |
As
at |
As
at |
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
Shareholders'
loan |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Shareholders' loan at
fair value |
9,227 |
8,750 |
477 |
- |
Capital contribution
reserve arising from effective interest portion |
(844) |
(844) |
- |
- |
Accrued effective
interest paid to shareholders |
844 |
987 |
- |
- |
Shareholder's loan
at amortised cost |
9,227 |
8,893 |
477 |
- |
The shareholders' loan is unsecured, interest-free and repayable
on demand. These loans will not be repaid until after 31 December 2021, and when funds permit.
As the shareholders' loan is unsecured, interest-free and
repayable on demand, the directors assumes that the shareholder's
loan is expected to repay in year 2023 and the available market
interest rate for shareholder's loan of the same kind is at the
best landing rate in Hong Kong
plus 1% per annum which is also used to calculate the effective
interest portion of such.
18. Share Capital
(a) Issued share
capital
Allotted, called up
and fully paid ordinary shares of 10p each |
Number of
shares |
Share
Capital |
Share
Capital |
Share
Premium |
Share
Premium |
|
|
£ |
HK$ |
£ |
HK$ |
Balance at 31 December
2019 |
96,287,079 |
9,628,708 |
96,017,186 |
4,422,954 |
44,105,565 |
New Share issue |
- |
- |
- |
- |
- |
Balance at 31 December
2020 |
96,287,079 |
9,628,708 |
96,017,186 |
4,422,954 |
44,105,565 |
|
|
|
|
|
|
(b) Capital
management
GVMH PLC and its subsidiaries’ objective when managing capital
are to safeguard GVMH PLC and its subsidiaries’ ability to continue
as a going concern, so that it can continue to provide returns for
shareholders and benefit for other stakeholders, and to provide an
adequate return to shareholders.
GVMH PLC and its subsidiaries manages the capital structure and
makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets.
In order to maintain or adjust the capital structure, GVMH PLC and
its subsidiaries’ may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares, or
sell assets to reduce debt. No changes were made in the objectives,
policies and processes during the year/period of 2019 and 2020.
GVMH PLC and its subsidiaries’ monitors’ capital using a gearing
ratio, which are calculated by dividing consolidated debts by
consolidated total shareholder's equity. The Group’s policy is to
keep the gearing ratio at a reasonable level. The Group’s gearing
ratio was54% , and 75% as at 31 December
2020 and 2019 respectively.
19. Financial instruments
GVMH PLC and its subsidiaries has classified its financial
assets in the following categories:
|
As
at |
As
at |
As
at |
As
at |
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
Loans and
receivables |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Accounts and other
receivables |
3,549 |
6,403 |
- |
- |
Amounts due from
related companies |
- |
- |
- |
- |
Deposits and
prepayments |
400 |
395 |
55 |
52 |
Cash and cash
equivalents |
855 |
510 |
43 |
114 |
Loans and
receivables |
4,804 |
7,308 |
98 |
166 |
|
As
at |
As
at |
As
at |
As
at |
|
31
December 2020 |
31
December 2019 |
31
December 2020 |
31
December 2019 |
Financial
liabilities at amortised cost |
HK$’000 |
HK$’000 |
HK$’000 |
HK$’000 |
Trade and other
payables |
14,082 |
13,051 |
1,694 |
862 |
Deposits received |
93 |
- |
- |
- |
Shareholders'
loan |
15,195 |
14,715 |
6,444 |
5,822 |
Lease liability
(IFRS16) |
1115 |
1,761 |
- |
- |
Amount due to a
director |
3,567 |
515 |
- |
- |
Financial
liabilities at amortised cost |
32,937 |
30,042 |
8,138 |
6,684 |
GVMH PLC and its subsidiaries are exposed to credit risk,
liquidity risk and market risk arising in the normal course of its
business and financial instruments. GVMH PLC and its subsidiaries’
and GVMH PLC’s risk management objectives, policies and processes
mainly focus on minimising the potential adverse effects of these
risks on its financial performance and position by closely
monitoring the individual exposure.
(a) Credit risk
GVMH PLC and its subsidiaries are exposed to credit risk on
financial assets, mainly attributable to trade and other
receivables. It sets credit limits on each individual customer and
prior approval is required for any transaction exceeding that
limit. The customer with sound payment history would accumulate a
higher credit limit. In addition, the overseas customers would
normally be required to transact with GVMH PLC and its
subsidiaries’ and GVMH PLC by letter of credit in order to minimise
GVMH PLC and its subsidiaries’ credit risk exposure.
At 31 December 2020, GVMH PLC and
its subsidiaries has no concentration of risk and the maximum
exposure to credit risk is represented by the carrying amount of
each financial asset.
(b) Liquidity
risk
GVMH PLC and its subsidiaries is exposed to liquidity risk on
financial liabilities. It manages its funds conservatively by
maintaining a comfortable level of cash and cash equivalents in
order to meet continuous operational need.
Liquidity risk |
Not later than one month |
Later than one month and not later than 5 years |
Carrying amount |
|
|
|
As at 31 December
2020 |
|
|
|
|
Trade and other
payables |
14,282 |
- |
14,282 |
|
Deposits received |
92 |
- |
92 |
|
Shareholders' loan –
current |
2,946 |
- |
2,946 |
|
Convertible bonds |
- |
5,968 |
5,968 |
|
Shareholders’ loan –
non-current |
- |
9,227 |
9,227 |
|
Amount due to
Director |
3,567 |
- |
3,567 |
|
|
20,887 |
15,195 |
36,082 |
|
|
|
|
|
|
As at 31 December
2019 |
|
|
|
|
Trade and other
payables |
13,051 |
- |
13,051 |
|
Deposits received |
- |
- |
- |
|
Shareholders' loan -
current |
83 |
|
83 |
|
Convertible bonds |
- |
5,822 |
5,822 |
|
Shareholders’ loan –
non-current |
- |
8,893 |
8,893 |
|
Amount due to
Director |
515 |
- |
515 |
|
|
13,649 |
14,715 |
28,364 |
|
GVMH PLC |
|
|
|
|
As at 31 December
2020 |
|
|
|
|
Trade and other
payables |
1,894 |
- |
1,894 |
|
Convertible bonds |
- |
5,968 |
5,968 |
|
Shareholders' loan –
non current |
|
477 |
477 |
|
|
1,894 |
6,445 |
8,339 |
|
|
|
|
|
|
As at 31 December
2019 |
|
|
|
|
Trade and other
payables |
862 |
- |
862 |
|
Convertible bonds |
- |
5,822 |
5,822 |
|
Shareholders' loan –
non current |
- |
- |
- |
|
|
862 |
5,822 |
6,684 |
|
(c) Interest rate
risk
The Group has no exposure on fair value interest rate risk. It
also has exposure on cash flow interest rate risk which is mainly
arising from its deposits with banks.
GVMH PLC and its subsidiaries mainly holds fixed deposits with
banks with maturity within 3 months and the exposure is considered
not significant. In consequence, no material exposure on fair value
interest rate risk is expected. Even that, GVMH PLC closely
monitors the fair value fluctuation of the investments and disposes
of them in case of significant increase in interest rate is
foreseen.
Sensitivity analysis
At 31 December 2020, if interest
rates as that date had been 100 basis points lower/higher with all
other variables held constant, GVMH PLC loss for the year would
have been HK$151,950 (2019:
HK$80,427) higher/lower.
(d) Currency
risk
GVMH PLC and its subsidiaries purchases and sells in various
foreign currencies, mainly US dollars and RMB that expose it to
currency risk arising from such purchases and sales and the
resulting receivables and the payables.
GVMH PLC and its subsidiaries closely and continuously monitors
the exposure on currency risk. Since HK dollars are pegged to US
dollars, there is no significant exposure expected on US dollars
transactions and balances.
In respect of purchases and payables, GVMH PLC and its
subsidiaries controls its volume of purchase orders to a tolerable
level and avoids concentrating the purchases in a single foreign
currency by diversifying such foreign currency risk exposure.
In respect of sales and receivables, GVMH PLC and its
subsidiaries sets a prudent credit limit to individual customers
who transact with it in other foreign currencies. The directors’
approval is required on the exposure to an individual customer or
transaction that exceeds the limit.
20. Leases liabilities
The Group has lease contracts for leasehold land and building
used in its operations. Lease of leasehold land and building
generally have lease terms between 2 to 3 years. The Group's
obligations under its leases are secured by the lessor's title to
the lease asset. Generally, the Group is restricted from assigning
and subleasing the leased assets and some contracts require the
Group to maintain certain financial ratios. There are several lease
contracts that include extension and termination options and
variable lease payments, which are further discussed below.
The Group also has certain leases of leasehold land and building
with lease terms of 12 months or less. The Company applies the
‘short-term lease’ recognition exemptions for these leases.
Set out
below are the carrying amounts of lease liabilities and the
movements during the year: |
Lease
liabilities |
|
HK$’000 |
|
At 1 January 2019 |
|
310 |
|
New Leases |
|
1,734 |
|
Accretion of interes t
recognised during the year |
|
7 |
|
Payment |
|
(290) |
|
At 31 December 2019
and 1 January 2020 |
|
1,761 |
|
New leases |
|
- |
|
Accretion of interest
recognised during the year |
|
31 |
|
Payments |
|
(636) |
|
At 31 December
2020 |
|
1,156 |
|
The following are the amounts recognised in profit or loss:
|
2020 |
2019 |
|
HK$’000 |
HK$’000 |
Interest on lease
liabilities |
30 |
7 |
Depreciation of
right-of-use assets |
601 |
332 |
Expenses relating to
short-term leases |
228 |
953 |
Total
amount recognised in profit or loss |
860 |
1,292 |
The Group had total cash outflows for leases of HK$636K and has non-cash additions to
right-of-use assets and lease liabilities of HK$1,155k for the year (2019: HK$1,761k).
At the commencement date of the lease, the Company recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by
the Company and payments of penalties for terminating a lease, if
the lease term reflects the Company exercising the option to
terminate. The variable lease payments that do not depend on an
index or a rate are recognised as expense in the period on which
the event or condition that triggers the payment occurs.
|
|
Between 1 Year |
Between 2 to 5 Year |
|
Over 5
years |
|
|
HK$’000 |
HK$’000 |
|
HK
$’000 |
At 31 December
2020 |
|
|
|
|
|
|
|
|
|
|
|
Lease Liabilities |
|
32 |
1,124 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December
2019 |
|
|
|
|
|
|
|
|
|
|
|
Lease Liabilities |
|
554 |
1,180 |
|
- |
21. Contingent liabilities
At 31 December 2020, GVMH PLC and
its subsidiaries did not have any contingent liabilities.
22. Material related party
transactions
Key management personnel
compensation
Key management are considered to be the directors of the
Company. Details of their remuneration and equity holdings are
disclosed in the Directors Report.
Transactions with subsidiaries
Transactions between the Group and its subsidiaries, which are
related parties, have been eliminated on consolidation. The balance
due from subsidiaries at the year end was HK$18,512k (2019: HK$18,107k). An impairment of HK$ 18,512k was booked at the year end.
Transactions with shareholders (please
include convertible loans and shareholder loans)
During the year the company recognised interest receivable of
HK$143k (2019: interest payable
HK$216k). The balance due from
shareholders which included the shareholders’ loan and convertible
bonds at the year end was HK$18,141k
(2019: HK$ 14,798k).
Save as those transactions and balances disclosed elsewhere in
these financial statements with shareholders and directors and
Cyber Lion Limited (a company controlled by Edward Ng and Ajay
Rajpal), GVMH PLC and its subsidiaries had no material
transactions with related parties.
23. Event after reporting
period
At 31 December 2020, GVMH PLC and
its subsidiaries did not have material non-adjusting events after
the report period that have significant impact on the financial
position and operation of the Group.
24. List of subsidiaries
As at 31 December 2020 the
following list contains only the particulars of subsidiaries which
principally affected the results, assets or liabilities of GVMH PLC
and its subsidiaries.
|
|
|
Proportion of ownership interest |
|
|
Name of
GVMH PLC |
Place of
incorporation/ operation |
Particulars of issued and paid-up capital |
GVMH
PLC and subsidiaries effective interest |
Held by
GVMH PLC |
Held by
the subsidiary |
Principal activities |
|
|
|
|
|
|
|
|
|
|
|
GVC Holdings Ltd |
BVI/Hong Kong |
US$10,862 |
100% |
100% |
- |
Investment
holdings |
|
Billion Wise
Investment Ltd |
BVI / Hong Kong |
US$10,862 |
100.0% |
- |
100% |
Investment
holdings |
|
Founding Technology
(Int'l) Ltd |
Hong Kong |
HK$10,000 |
70.0% |
- |
70% |
Social Media
Marketing |
|
|
|
|
|
|
|
|
|
Grand Vision
Communication Ltd |
BVI / Hong Kong |
US$10,843 |
100% |
- |
100% |
Investment
holdings |
|
|
|
|
(2019:79.87%) |
|
(2019:79.87%) |
|
|
Grand Vision Media
Limited |
Hong Kong |
HK$1,000,000 |
100% |
- |
100% |
Advertising |
|
|
|
|
(2019:79.87%) |
|
(2019:79.87%) |
|
|
Grand Vision Media
Network Limited |
Hong Kong |
HK$7,824,268 |
100.0% |
- |
100.0% |
3D panel
advertising |
|
|
|
|
|
|
|
|
|
Grand Vision Media
(Technology) (Shenzhen) Ltd |
PRC/Hong Kong |
RMB832,987 |
100% |
- |
100% |
Advertising |
|
|
|
|
(2019:79.87%) |
|
(2019:79.87%) |
|
|
Ying Interactive
Marketing Services Ltd |
Hong Kong |
HK$4,900,000 |
55.0% |
55% |
- |
Social Media
Marketing |
|
|
|
|
|
|
|
|
|
Shanghai Hongshi
Culture Media Co., Ltd |
PRC |
RBM5,874,000 |
100.0% |
- |
100.0% |
3D panel
advertising |
|
25. Control
At 31 December 2020, there is no
one controlling party.