REG-Grand Vision Media: Final Results
02/07/2020 06:15
London, 30 June 2020
Grand Vision Media Holdings plc
( “GVMH” or the “Company”)
Final results
The CEO’s Report
The Company is pleased to present the first full year of trading following the
reverse takeover of GVC Holdings Limited in 2018. Following the reverse
takeover, the Group has continued to develop its business plan in line with
market conditions, and has looked to further expand its geographical presence
in Asia through strategic partnerships, whilst evaluating new technologies to
promote the Out-of-home (OOH) advertising business.
2019 was a difficult year for the Group, with major political unrest in Hong
Kong in the second half of the year having an adverse effect on the Group’s
performance.
Summary of Trading Results
Trading during the first half of the year was in line with the prior year,
with revenues exceeding the prior year by 6%. The conditions worsened in the
second half of the year due to the political unrest in Hong Kong. There was a
significant reduction in Chinese tourists to Hong Kong, and disruption to
daily life, which resulted in reduced revenues in OOH advertising revenues and
digital marketing revenues. Total revenue for the year was HK$12,034K [2018 :
HK$18,026K], a decline of 33% compared to the prior year.
The total comprehensive loss for the year was HK$14,957K [2018 : HK$32,290K].
Although this is significantly improved, the prior year included the costs of
the reverse takeover of HK$5,259K.
The Group has 200 panels [2018 : 180] 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$510K. The Group successfully raised
£670K in convertible loan notes in the year, and was pleased to be further
supported by existing shareholders in this regard
Outlook
COVID-19 has had a significant adverse effect on the Group’s performance in
2020. The major restrictions on travel and closure of businesses has caused
significant disruption and erosion of confidence. Sales for the first quarter
of the year are below the prior year as a result of the ongoing cinema
closures in China, resulting in reduced OOH advertising revenues, and reduced
marketing budgets in Hong Kong due to the pandemic, resulting in reduced
revenues for digital marketing. The outlook for 2020 remains uncertain due to
the ongoing effects of COVID-19 on the business environment in China and Hong
Kong.
It is uncertain as to when trading conditions will return to normal, but the
disruption to the Group is expected to last for a number of months.
The Group has increased its focus on eCommerce marketing and services to
mitigate against the decline in its traditional revenues, 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.
The Group are also looking at expanding the OOH business model into Singapore,
and to also include OOH advertising within vending machines and smart retail
channels.
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 have developed an open and
transparent relationship with these partners, which promotes the long-term
success for the Group. During 2019, we continued to work closely with Marvel
to evaluate new technologies for OOH advertising. And with our cinema
partners, we continued to evaluate their space to promote new ideas for mutual
benefit.
Our Shareholders
The Company has been well-supported by its shareholders for many years, who
have provided shareholder loans historically, and during 2019, 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.
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 acknowledge the Covid -19 outbreak and impact of it on the company
financials and worldwide economy which can be easily understandable. The
pandemic which started spreading from mid-February 2020 to the world is still
affecting a lot of people. Scientists are working to invent a proper vaccine
of Covid -19.
Going Concern
The day to day working capital requirements and investment objectives are met
by existing cash resources and the convertible loan notes issued during the
year . At 31 December 2019 the Group had cash balance of HKD510k. The
Group’s forecasts and projections, taking into account increase in revenue
from new streams and changes in the level of overhead costs, show that the
company should be able to operate within its available cash resources. 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
30 June 2020
The full accounts are published below and will be posted on the Company’s
website and to shareholders this week.
For more information:
Grand Vision Media Holdings plc http://gvmh.co.uk/
Ajay Rajpal, Director Tel: +44 (0) 20 7866 2145 or info@gvmh.co.uk
Alfred Henry Corporate Finance Ltd
Nick Michaels / Jon Isaacs Tel: +44 (0) 20 3772 0021 or enquiries@alfredhenry.com
GRAND VISION MEDIA HOLDINGS PLC
DIRECTORS’ REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
COMPANY INFORMATION
Directors and Advisers
Directors: Edward Kwan-Mang Ng (resigned 20 January 2020) 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 International Registrars Limited Finsgate 5-7 Cranwood Street London EC1V9EE
Registered Address: Finsgate 5-7 Cranwood Street London EC2M 7LD
Principal Banker: Metro Bank 1 Southampton Road London WC1B 5HA
Financial Adviser: Alfred Henry Corporate Finance Limited Finsgate 5-7 Cranwood Street London EC1V 9EE
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
Directors' report 9
Independent auditors' report 14
Statement of comprehensive income 20
Statement of financial position 21
Statement of changes in equity 23
Statement of cash flows 24
Notes to the financial statements 25
STRATEGIC REVIEW REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
The CEO Report
The Company is pleased to present the first full year of trading following the
reverse takeover of GVC Holdings Limited in 2018. Following the reverse
takeover, the Group has continued to develop its business plan in line with
market conditions, and has looked to further expand its geographical presence
in Asia through strategic partnerships, whilst evaluating new technologies to
promote the Out-of-home (OOH) advertising business.
2019 was a difficult year for the Group, with major political unrest in Hong
Kong in the second half of the year having an adverse effect on the Group’s
performance.
Summary of Trading Results
Trading during the first half of the year was in line with the prior year,
with revenues exceeding the prior year by 6%. The conditions worsened in the
second half of the year due to the political unrest in Hong Kong. There was a
significant reduction in Chinese tourists to Hong Kong, and disruption to
daily life, which resulted in reduced revenues in OOH advertising revenues and
digital marketing revenues. Total revenue for the year was HK$12,034K [2018 :
HK$18,026K], a decline of 33% compared to the prior year.
The total comprehensive loss for the year was HK$14,957K [2018 : HK$32,290K].
Although this is significantly improved, the prior year included the costs of
the reverse takeover of HK$5,259K.
The Group has 200 panels [2018 : 180] 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$510K. The Group successfully raised
£670K in convertible loan notes in the year, and was pleased to be further
supported by existing shareholders in this regard
Outlook
COVID-19 has had a significant adverse effect on the Group’s performance in
2020. The major restrictions on travel and closure of businesses has caused
significant disruption and erosion of confidence. Sales for the first quarter
of the year are below the prior year as a result of the ongoing cinema
closures in China, resulting in reduced OOH advertising revenues, and reduced
marketing budgets in Hong Kong due to the pandemic, resulting in reduced
revenues for digital marketing. The outlook for 2020 remains uncertain due to
the ongoing effects of COVID-19 on the business environment in China and Hong
Kong.
It is uncertain as to when trading conditions will return to normal, but the
disruption to the Group is expected to last for a number of months.
The Group has increased its focus on eCommerce marketing and services to
mitigate against the decline in its traditional revenues, 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.
The Group are also looking at expanding the OOH business model into Singapore,
and to also include OOH advertising within vending machines and smart retail
channels.
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 have developed an open and
transparent relationship with these partners, which promotes the long-term
success for the Group. During 2019, we continued to work closely with Marvel
to evaluate new technologies for OOH advertising. And with our cinema
partners, we continued to evaluate their space to promote new ideas for mutual
benefit.
Our Shareholders
The Company has been well-supported by its shareholders for many years, who
have provided shareholder loans historically, and during 2019, 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:
xiv. 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.
xv. 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.
xvi. 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.
xvii. 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.
xviii. 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.
xix. 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.
xx. 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.
xxi. 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.
xxii. 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.
xxiii. 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.
xxiv. Market Risk
The group’s investments is in its subsidiary, GVC Holdings Ltd. The shares
are not readily tradable.
xxv. 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.
xxvi. Covid 19 Outbreak
The group acknowledge the Covid -19 outbreak and impact of it on the company
financials and worldwide economy which can be easily understandable. The
pandemic which started spreading from mid-February 2020 to the world is still
affecting a lot of people. Scientists are working to invent a proper vaccine
of Covid -19.
Going Concern
The day to day working capital requirements and investment objectives are met
by existing cash resources and the convertible loan notes issued during the
year . At 31 December 2019 the Group had cash balance of HKD510k. The
Group’s forecasts and projections, taking into account increase in revenue
from new streams and changes in the level of overhead costs, show that the
company should be able to operate within its available cash resources. 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
30 June 2020
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
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 2019.
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
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 Shareholding Percentage of the Company’s ordinary Share Capital
Edward Kwan-Mang Ng - - -
Ajay Kumar Rajpal - - -
Jonathan Yat Pang Lo - 22,438,842 23.3%
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 the date of this
report.
Investor Shareholding (Ordinary shares of 10p) Percentage of the Company’s ordinary Share Capita
Jonathan Lo 22,438,842 23.3%
Pentwood 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 recognises 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
(2018), 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 two directors: 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 Edward Ng. 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.
2019 2018
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
2019 2018 2019 2018
HK$’000 HK$’000 HK$’000 HK$’000
Edward Ng 60 100 - -
Ajay Rajpal 240 286 120 70
Jonathan Lo 1,080 863 480 245
1,380 1,249 600 315
Note: Amounts for 2018 have been restated to actual amounts paid. Amounts for
2019 are based on actual amounts paid.
No pension contributions were made by the company on behalf of its directors
apart for Jonathan Lo of HKD18K.
Cyber Lion Limited, a company controlled by Edward Ng and Ajay Rajpal, charged
consultancy fees of HKD788K to GVC Holdings Limited in the period.
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 30(th) June 2020.
On behalf of the board
__________________
Jonathan Lo
Director
30 June 2020
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 2019 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 2019 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 trade of the Group had a significant negative impact due
to the political unrest in Hong Kong during 2019 and due to COVID-19 pandemic
during 2020 from the closure of cinemas across China and Hong Kong. The Group
forecasts include revenue derived from new revenue streams, upon which the
Group is dependent to meet its current cash requirements. The directors are
satisfied that the revenue from these ventures will commence during 2020 and
will generate sufficient cashflow to support the cash requirements of the
Group. 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) During the year the Company had Investment in subsidiary of HK$114,572K and Loans of HK$ 18,107k. The directors have assessed whether the investment and loans shows any indicators of impairment. The directors concluded that no impairment was required to the above balances. The risk is that the subsidiaries may not be able to generate sufficient profits and provide the expected return on capital invested. Our audit procedures: · We have reviewed the consolidated financials which incldues all the subsidiaries of the Company; · We reviewed the latest psot year end management accounts for all subsidiaries to confirm results achieved; · We assessed the
methodology used by management to estimate the future profitability of GVC Holdings Group and recoverable value of the investment, in conjunction with any intra-group balances, to ensure that the method used is appropriate; · We reviewed the long term
cashflow forecasts and impairment reviews prepared by management, challenged their assumptions and reviewed supprting evidence confirming the reasonability of the future revenues, profitability and cashflows; · We stress tested management’s conclusion that
no impairment was required, by carrying out sensitivity analysis on key assumptions used in the impairment review and forecasts; · We assessed the appropriateness and applicability of discount rate applied in arriving at the net present value of expected
results; Based on the audit work performed we are satisfied that the management have taken into account all factors surrounding the business in arriving at the valuation of the subsidiaries.
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 its relative newness, 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 business and emergence of new revenue streams. The Directors have considered the cash requirements of the business for the following 12 months. As part of this process, they have taken into account existing liabilities, along with detailed operating cashflow requirements. The projections prepared include ongoing running costs of the Group and committed expenditure at the date of approving the financial statements. Key assumptions are revenue from new commission only contracts and reduction in costs across the Group through various cost cutting measures. There are therefore inherent risks that the forecasts may overstate future revenue due to the timing of closure of future contracts, or understate future costs, and that the Group will not be able to operate within its cash resources and Our audit procedures: · We evaluated the suitability of management’s model for the forecast; The forecast includes a number of assumptions related to future cash flows and associated risks. Our audit work has focused on evaluating and challenging the
continue to operate as a going concern. reasonableness of these assumptions and their impact on the forecast period and ensuring that all key matters are correctly disclosed in the going concern note. Specifically, we obtained, challenged and assessed management’s going concern forecast and
performed procedures including: · Verifying the consistency of key inputs and fund raisers relating to future costs to other financial and operational information obtained during the audit; · Corroborated with management relating to future cash inflows; ·
We reviewed the latest management accounts to gauge the financial position; · We performed sensitivity analysis on the cash flow forecasts prepared by the directors. Based on the audit work performed we are satisfied that although there are material
uncertainties associated with the forecast, the Group’s revenue pipeline will provide required support to the business. We are also satisfied that all necessary disclosures have been made in the consolidated financial statements.
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 HKD 700,000. HKD 119,000.
How we determined it 5% of Net Loss. 10% 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 Company and is a generally accepted auditing benchmark. We believe that loss before tax is a primary measure used by shareholders in assessing the performance 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$1,000 and HK$343,000.
We agreed with the Audit Committee that we would report to them misstatements
identified during our audit above HK$14,000 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 10 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 10
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.
Other matters which we are required to address
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
30 June 2020
Statements of Comprehensive Income
Group Group Company Company
For the year For the year For the year For the year
ended ended ended ended
31 December 2019 31 December 2018 31 December 2019 31 December 2018
Note HK$’000 HK$’000 HK$’000 HK$’000
Revenue 4 12,034 18,026 - -
Cost of sales (10,648) (12,140) - -
Gross profit 1,386 5,886 - -
Other income 4 184 79 - -
1,570 5,965 - -
Administrative expenses 6 (16,442) (38,711) (2,593) (12,258)
(Loss)/profit for the period from operations (14,872) (32,746) (2,593) (12,258)
Finance costs 5 (223) (316) - -
(Loss)/profit for the period before tax (15,095) (33,062) (2,593) (12,258)
Income tax expense 7 - - - -
(Loss)/profit for the period (15,095) (33,062) (2,593) (12,258)
Other comprehensive income (loss)/income
Items that are or may be reclassified subsequently to profit or loss - - - -
Exchange differences arising on translation of foreign operations 138 772 87 672
Total comprehensive (loss)/ income for the period (14,957) (32,290) (2,506) (11,586)
(Loss)/ profit attributable to
Equity holders of parent company (15,221) (33,069) (2,593) (11,586)
Non-controlling interests 126 7 - -
(15,095) (33,062) (2,593) (11,586)
Total comprehensive (loss) / income attributable to:
Equity holders of the parent company (15,083) (33,297) (2,506) (11,586)
Non-controlling interests 126 7 - -
(14,957) (32,290) (2,506) (11,586)
Earnings/(loss) per shares - Basic and diluted HK$ 8 (0.16) (0.34) (0.027) (0.12)
Statements of financial position
Group Group Company Company
As at As at As at As at
31 December 2019 31 December 2018 31 December 2019 31 December 2018
Notes HK$’000 HK$’000 HK$’000 HK$’000
Assets
Non-current assets
Property, plant and equipment 9 165 2,183 - -
Right of use assets (IFRS16) 11 1,710 - - -
Investment in Subsidiaries 12 - - 114,572 114,572
Amount due from subsidiaries 12 - - 18,107 -
Total non-current assets 1,875 2,183 132,679 114,572
Current assets
Inventories 10 1,004 1,707 - -
Trade and other receivables 13 6,403 5,104 52 48
Deposits and prepayments 13 395 1,036 - -
Amount due from subsidiaries 13 - - - 11,412
Cash and cash equivalents 14 510 2,552 114 783
Total current assets 8,312 10,399 166 12,243
Total assets 10,187 12,582 132,845 126,815
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 (96,631) (96,631) - -
Capital Contribution arising from Shareholder’s Loan 844 - - -
Other Reserves 3,849 1,447 3,849 1,447
Exchange Reserves 4,509 449 266 -
Accumulated deficit (69,348) (54,215) (18,077) (15,571)
Equity attributable to owners of the parent (16,654) (8,827) 126,161 125,999
Non-controlling interests (3,284) (3,410) - -
Total equity (19,938) (12,237) 126,161 125,999
Liabilities
Non-current liabilities
Shareholder loans 18 14,715 8,676 5,822 -
Total non-current liabilities 14,715 8,676 5,822 -
Current liabilities
Trade and other payables 15 13,051 15,728 862 816
Lease Liability 21 1,761 - - -
Amount due to a director 515 304 - -
Deposits received 84 111 - -
Total current liabilities 15,410 16,143 862 816
Total liabilities 30,020 24,819 6,684 816
Total equity and liabilities 10,187 12,582 132,845 126,815
Approved by the Board and authorised for issue on 30 June 2020
Jonathan Lo
Director
? Company Registration No. 10028625
Statements of Changes in Equity
Attributable to the Company
Share capital Share premium Other reserves Exchange reserves Retained earnings Total Total equity
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Balance at 1 January 2018 6,571 2,706 - - (3,985) 5,292 5,292
(Loss) for the year - - 1,447 - (12,258) (10,811) (10,811)
Other comprehensive income - - - - 672 672 672
Total comprehensive income - - 1,447 - (11,586) (10,139) (10,139)
Issue of share capital 89,446 41,400 - - - 130,846 130,846
Balance at 31 December 2018 96,017 44,106 1,447 - (15,571) 125,999 125,999
Change in equity for 2019
(Loss) for the year - - - 266 (1,186) (920) (920)
Convertible loan note - - 1,082 - - 1,082 1,082
Share based payments - - 1,320 - (1,320) - -
Total comprehensive income - - 2,402 266 (2,506) 3,240 3,240
Balance at 31 December 2019 96,017 44,106 3,849 266 (18,077) 126,161 126,161
Statements of Changes in Equity
Attributable to the Group
Share capital Share premium Reverse Acquisition reserve Other reserve Exchange reserve Capital contribution reserves Retained earnings Total Non-controlling interests Total equity
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
GVMH PLC
Balance at 19 June 2018 99,782 45,835 - - - - (21,918) 123,699 - 123,699
Capital Contribution - 844 - - (844) - - - -
Share issue (3,765) - - - - - - (3,765) - (3,765)
Share Premium - (1,729) - - - - - (1,729) - (1,729)
Re-Organization Reserve - - (97,475) - - - - (97,475) - (97,475)
Exchange Reserve - - - - 449 - - 449 - 449
Share based payment - - - 1,447 - - - 1,447 - 1,447
Non-Controlling Interest - - - - - - - - 7 7
Loss for the period - - - - - - (32,297) (32,297) - (32,297)
Balance at 31 December 2018 96,017 44,106 (96,631) 1,447 449 - (54,215) (8,827) (3,410) (12,237)
GVMH PLC
Balance at 1 January 2019 96,017 44,106 (96,631) 1,447 449 - (54,215) (8,827) (3,410) (12,237)
Capital Contribution - - - - 844 - 844 - 844
Exchange Reserve - - - - 4,060 - - 4,060 - 4,060
Share based payment - - - 1,320 - - - 1,320 - 1,320
Loan note - - - 1,082 - - - 1,082 - 1,082
Non-Controlling Interest - - - - - - - - 126 126
Loss for the period - - - - - - (15,133) (15,133) - (15,133)
Balance at 31 DECEMBER 2019 96,017 44,106 (96,631) 3,849 4,509 844 (69,348) (16,654) (3,284) (19,938)
Share capital is the amount subscribed for shares at nominal value.
The share premium has arisen on the issue of shares at a premium to their
nominal value.
Share-based payments reserve relate to the charge for share-based payments in
accordance with IFRS 2.
Retained earnings represent the cumulative loss of the Group attributable to
equity shareholders.
The reverse acquisition reserve arose in June 2018 on the reverse acquisition
by GVC.
Statements of Cash flows
Group Group Company For the year Company For the year
For the year For the year
ended ended ended ended
31 December 2019 31 December 2018 31 December 2019 31 December 2018
HK$’000 HK$’000 HK$’000 HK$’000
Operating activities
(Loss)/ profit before taxation (15,095) (33,062) (2,593) (12,258)
Adjustments for:
Depreciation 2,350 3,982 - -
Share based payment 1,320 1,447 1,320 1,447
Premium on reverse acquisition - 5,259
Cyber Lion Limited - Non Cash success fee - 7,024 - 7,024
Finance costs 223 316 - -
Operating loss before changes in working capital (11,202) (15,034) (1,273) (3,787)
Increase/(decrease) in inventories 702 1,119 - -
(Increase) / decrease in trade and other receivables (1,299) 1,527 - (8,823)
Decrease/ (increase) in deposits and prepayments 641 (7,857) (4) -
Increase in trade and other payables 2,473 2,848 45 688
Decrease in deposit received (27) - - -
Cash generated from/(used in) operating activities (8,711) (17,397) (1,232) (11,922)
Investing activities
Payment for purchase of property, plant and equipment (10) (47) - -
Acquisition net of bank balance - 6,032 - -
Net cash (outflow)/ inflow from investing activities (10) 5,985 - -
Financing activities
Net proceeds from issue of shares - 6,714 - 6,714
Net proceeds from share premium - 3,357 - 3,357
Increase in an amount due from director 211 - - -
(Repayment of) /proceeds from shareholder loans (850) 2,500 - -
Increase in loans due from subsidiaries - - (6,695)
Increase in convertible loans 6,904 - 6,904 -
Principal portion of lease payment (290) - - -
Net cash generated from Financing activities 5,975 12,571 209 10,071
Net increase/(decrease) in cash and cash equivalents (2,746) 1,159 (1,023) (1,851)
Cash and cash equivalents at 1 January 2,552 1,136 783 2,785
Effect of foreign exchange rate changes 704 257 354 (151)
Cash and cash equivalents at 31 December 510 2,552 114 783
Represented by:
Bank balance and cash 510 2,552 114 783
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.
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
(a) New and amended standards adopted by the Group
The Group has applied any applicable new standards, amendments to standards
and interpretations that are mandatory for the financial year beginning on or
after 1 January 2019.
The nature and impact of amendment is described below:
IFRS 16 Leases
IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRIC 4
Determining whether an arrangement contains a Lease, SIC-15 Operating
Leases-Incentives and SIC-27 Evaluating the Substance of Transactions
Involving the Legal Form of a Lease. IFRS 16 sets out the principles for the
recognition, measurement, presentation and disclosure of leases and requires
lessees to account for all leases under a single on-balance sheet model
similar to the accounting for finance leases under IAS 17. The standard
includes two recognition exemptions for lessees – leases of ‘low-value’
assets (e.g. personal computers) and short-term leases (i.e. leases with a
lease term of twelve months or less). At the commencement date of a lease, a
lessee will recognise a liability to make lease payments (i.e. the lease
liability) and an asset representing the right to use the underlying asset
during the lease term (i.e. the right-of-use asset).
Lessees will be required to separately recognise the interest expense on the
lease liability and the depreciation expense on the right-of-use asset.
Lessees will be also required to remeasure the lease liability upon the
occurrence of certain events (e.g., a change in the lease term, a change in
future lease payments resulting from a change in an index or rate used to
determine those payments). The lessee will generally recognise the amount of
the remeasurement of the lease liability as an adjustment to the right of use
asset.
IFRS 16, which is effective for annual periods beginning on or after 1 January
2019, requires lessees and lessors to make more extensive disclosures than
under IAS 17.
(b) New, amended standards, interpretations not adopted by the Group
A number of new standards, amendments to standards and interpretations to
existing standards have been published that are mandatory for the Group’s
accounting periods beginning after 1 January 2019, or later periods, where the
Group intends to adopt these standards, if applicable, when they become
effective. The Group has disclosed below those standards that are likely to be
applicable to the Group and is currently assessing the impact of these
standards.
• IFRS 3 “Business Combinations”, effective date 1 January
2020 clarifies application of business combination for the group.
• IFRS 9, IAS 39 and IFRS 7 ‘’Interest rate benchmark
reform’’ effective date 1 January 2020 clarifies Interest rate benchmark
for all the entities of the group.
• IAS 1 and IAS 8 ‘’Definition of Material’’ effective
date 1 January 2020 clarifies presentation of Financial Statements:
Classification of Liabilities as current and non-current.
• References to the conceptual framework effective date 1
January 2020 clarifies new IFRS standards with conceptual fraework.
Management has not yet fully assessed the impact of these standards but does
not believe they will have a material impact on the 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 (null) Title Summary Application date of standard (Periods commencing on or after)
IFRS 9 Prepayment features with Negative Compensation 01 January 2020
IFRS 17 Insurance Contracts 01 January 2021
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 are 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 Directors have reasonable expectation that the Group has
adequate resources to continue operation for the foreseeable future for the
reason they have adopted to going concern basis in the preparation of
financial statement.
The Group incurred a loss of HKD 14,957,306 for the year ended 31 December
2019. 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.
The COVID-19 pandemic has had a significant effect on the Group’s results
since January 2020, as digital marketing spend 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.
After careful consideration of the matters set out above, the Directors’ are
of the opinion that the group will be able to undertake its planned activities
for the period to 30 June 2021 from reserves and ordinary 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 2018 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
effect 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:
Opening Average Closing
GBP/HKD 10.29 10.02 10.33
RMB/HKD 1.17 1.14 1.12
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. Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call,
together with other short term highly liquid investments which are not subject
to significant changes in value and have original maturities of less than
three months. Bank overdrafts are shown within borrowings in current
liabilities on the Statement of Financial Position.
2.21. Related parties
a) A person, or a close member of that person’s family, is related to
GVMH PLC and its subsidiaries if that person:
(i) has control or joint control over GVMH PLC and its subsidiaries;
(ii) has significant influence over GVMH PLC and its subsidiaries; or
(iii) is a member of the key management personnel of GVMH PLC and its
subsidiaries or GVMH PLC and its subsidiaries’ parent.
b) An entity is related to GVMH PLC and its subsidiaries if any of the
following conditions applies:
(i) The entity and GVMH PLC and its subsidiaries are members of the same
GVMH PLC and its subsidiaries (which means that each parent, subsidiary and
fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or
an associate or joint venture of a member of a GVMH PLC and its subsidiaries
of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity
is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of
employees of either GVMH PLC and its subsidiaries or an entity related to GVMH
PLC and its subsidiaries.
(vi) The entity is controlled or jointly controlled by a person identified
in (a).
(vii) A person identified in (a)(i) has significant influence over the
entity or is a member of the key management personnel of the entity (or of a
parent of the entity).
(viii) The entity, or any member of a GVMH PLC and its subsidiaries of which
it is a part, provides key management personnel services to GVMH PLC and its
subsidiaries or to GVMH PLC and its subsidiaries’ parent
Close members of the family of a person are those family members who may be
expected to influence, or be influenced by, that person in their dealings with
the entity.
Operating leases
All leases are treated as operating leases. Where the Group is a lessee,
payments on operating lease agreements are recognised as an expense on a
straight-line basis over the lease term. Associated costs, such as maintenance
and insurance, are expensed as incurred.
2.22. 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.
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.
4. Revenue
Analysis of GVMH PLC and its subsidiaries’ revenue is as follows:
Year ended Year ended Year ended Year ended
31 December 2019 31 December 2018 31 December 2019 31 December 2018
HK$’000 HK$’000 HK$’000 HK$’000
Revenue
Advertising fee income 5,593 8,985 - -
Digital marketing income 6,441 8,575 - -
Other - 466 - -
12,034 18,026 - -
Other income
Other income 184 79 - -
184 79 - -
12,218 18,105 - -
Other Income represents rent, management and ad hoc professional services
provided during the year.
5. Finance costs
Year ended Year ended Year ended Year ended
31 December 2019 31 December 2018 31 December 2019 31 December 2018
HK$’000 HK$’000 HK$’000 HK$’000
Finance costs
Interest on shareholder loans 223 316 - -
6. Administrative expenses
Year ended Year ended Year ended Year ended
31 December 2019 31 December 2018 31 December 2019 31 December 2018
HK$’000 HK$’000 HK$’000 HK$’000
Audit fees 370 417 209 165
Business development and marketing 181 464 - 42
Share based payment 1,319 - - -
Depreciation 2,350 3,982 - -
Premium on reverse - 5,259 - -
RTO, Legal and professional fee 490 9,672 304 14,488
Office rental 953 2,124 - 47
Overseas travelling 153 786 - 219
Other 2,838 7,061 239 1,739
Administrative expenses 8,655 29,765 752 16,700
Directors fees and emoluments 1,380 1,435 521 816
Wages and Salaries 6,407 7,511 - -
16,442 38,711 1,273 17,516
Employee numbers No. No. No. No.
Management 4 5 3 3
Operations 18 30 - -
22 35 3 3
7. Income tax expense
No Hong Kong profits tax provision made in the accounts as GVMH PLC and its
subsidiaries’ do not have any assessable profits for the period.
Reconciliation between tax expenses and accounting profit at applicable tax
rates of 16.5%:
Year ended Year ended Year ended Year ended
31 December 2019 31 December 2018 31 December 2019 31 December 2018
HK$’000 HK$’000 HK$’000 HK$’000
(Loss) / profit before tax (15,095) (33,062) (2,593) (17,516)
Notional tax on (loss) / profit before taxation, calculated at the rates applicable to (loss) / profit in the countries concerned (2,491) (5,455) (428) (2,890)
Tax effect of non-taxable income - - - -
Tax effect of not recognised tax loss 2,491 5,455 428 2,890
Actual tax expenses - - - -
GVMH PLC and its subsidiaries’ has not recognised deferred tax assets of
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$18,358,540 as the availability of future taxable profits against which the
assets can be utilised is uncertain at 31 December 2019.
The tax losses can be carried forward to offset against the taxable profits of
subsequent years for up to five years from the year in which they were
incurred or there is no restriction on their expiry, depending on the tax
jurisdiction concerned.
8. Earnings/ (Loss) per share
The calculation of basic earnings per share is based on GVMH PLC and its
subsidiaries’ loss attributable to shareholders of GVMH PLC and weighted
average number of shares in issue during the year, details are as follows:
Year ended Year ended Year ended Year ended
31 December 2019 31 December 2018 31 December 2019 31 December 2018
HK$’000 HK$’000 HK$’000 HK$’000
Profit/loss attributable to GVMH PLC (15,095) (33,063) (2,593) (11,586)
Weighted average number of shares 96,287,079 96,287,079 96,287,079 96,287,079
Basic and diluted loss per share HK$ (0.16) (0.34) (0.027) (0.12)
There were no potential dilutive ordinary shares in existence during the
period ended 31 December 2019 or the years ended 31 December 2018, and hence
diluted earnings per share is the same as the basic earnings per share.
9. 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$’000
Cost
At 31 December 2018 16,278 288 301 82 16,949
Additions during the year 2019 - 9 - - 9
Disposals during the year 2019 (58) (1) - - (59)
At 31 December 2019 16,220 296 301 82 16,899
Accumulated depreciation
At 31 December 2018 14,173 220 296 76 14,765
Charge for the year 2019 1,965 45 2 6 2,018
Written back on disposal (49) - - - (49)
At 31 December 2019 16,089 265 298 82 16,734
Net carrying amount
At 31 December 2019 131 31 3 - 165
At 31 December 2018 2,105 68 5 6 2,183
10. Inventories
As at As at As at As at
31 December 2019 31 December 2018 31 December 2019 31 December 2018
Inventories HK$’000 HK$’000 HK$’000 HK$’000
Goods - 537 - -
Online resources 1,003 1,170
1,003 1,707 - -
As at 31 December 2019, no provision for impairment on goods for the group has
been made.
11. Right of use assets
Set out below are the carrying amounts of right-of-use assets recognised and
the movements during the year:
Right of use assets Leasehold improvement Total
HK$’000 HK$’000
At 1/1/2019 307 307
Additions during the year 2019 1,734 1,734
Depreciation (332) (332)
At 31/12/2019 1,710 1,709
12. Investments in Subsidiaries
Company 2019 2018
HK$’000 HK$’000
Cost
At 1 January 114,572 114,572
Loans to subsidiaries 18,107 -
??????? ???????
At 31 December 132,679 114,572
??????? ???????
??????? ???????
Disclosed as non-current 132,679 114,572
_________ _________
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 2019, which management considers appropriate due to the nature of
its advertising services and related returns;
· cash inflow projections reflect the following key assumptions:
· revenues from the continued performance of marketing and advertising
services for customers and commission revenues from new business ventures;
· revenues in the short to medium term are based on contracted amounts,
contracts currently in negotiation and estimates of services to be performed;
· for financial modelling purposes, it has been assumed that total
revenue increases to approximately HK$514 million for the five years to 2024;
· from year six onwards the revenue is assumed to remain constant at
HK$38 million;
· cash outflows, which include contract delivery costs, operating
expenses, administrative expenses and capital spend are assumed to be
consistent with current experience;
· revenue and cost of sales from 2021 are forecasted for a year on year
growth of 5%, which is management’s estimate of the average growth for the
principal geography in which the entity operates; and
· a pre-tax discount rate of 8% has been applied in discounting cash
flows to their present value, which has been benchmarked against available
sources for comparable companies and geographical location of GVC Holdings
Limited.
Cash flow projections are most sensitive to the assumptions regarding:
· commission revenue from new contracts in completion;
· Changes to the level of panels currently in display at cinemas;
· Closing price for the panel per 2-week segments; and
· changes in the discount rate.
At 31 December 2019, there is limited headroom in respect of the carrying
value of the parent company’s investment in GVC Holdings Limited. Should any
of the future events and cash flow assumptions upon which management has based
its value in use calculation not occur or change adversely, an impairment of
the investment in GVC Holdings Limited would be necessary.
13. Trade and other receivables
Note: Amounts due from related companies is unsecured, interest-free and
repayable on demand.
Receivable that were not impaired was as follows:
As at As at As at As at
31 December 2019 31 December 2018 31 December 2019 31 December 2018
HK$’000 HK$’000 HK$’000 HK$’000
Prepayments 395 1,036 52 -
Amount due from Subsidiaries - - - 11,412
Neither past due or nor impaired 6,403 5,104 - 48
6,798 6,140 52 11,460
14. Cash and cash equivalents
As at As at As at As at
31 December 2019 31 December 2018 31 December 2019 31 December 2018
Cash and cash equivalents HK$’000 HK$’000 HK$’000 HK$’000
Cash at bank and in hand 510 2,552 114 783
510 2,552 114 783
15. Trade and other payables
As at As at As at As at
31 December 2019 31 December 2018 31 December 2019 31 December 2018
Trade and other payables HK$’000 HK$’000 HK$’000 HK$’000
Trade payable 13,051 10,577 862 816
Other payables - 5,151 - -
Total trade and other payables 13,051 15,728 862 816
16. Share based payments
The Group has a share ownership compensation scheme for Directors and Senior
employees of the Group. In accordance with the provisions of the
plan, Directors and Senior employees may be granted options to purchase
ordinary shares in the Company.
The company issued options on 12,000,000 ordinary shares on 19 June 2018. The
options vest annually over a 3 year period to 31 December 2020 and can be
exercised at 15p per share during this period. 8,000,000 options have vested
as at 31 December 2019.
The fair value of equity-based share options granted is estimated at the date
of grant using the Black-Scholes pricing model, taking into account the terms
and conditions upon which the options have been granted. The calculated fair
value of share options charged to the Group and Company financial statements
in the year is HK$ 1,319,827.
The following are the inputs to the model for the options granted during the
prior year:
Share Options 2019
Exercise price 0.15p
Share price at date of grant 0.15p
Risk free rate 1.04%
Volatility 50%
Expected Life 3 Years
Fair Value 0.03626798
The following table illustrates the number and weighted average exercise price
(WAEP) of, and movements in share options during the year. The options
outstanding at 31 December 2019 had a WAEP of 16p (2018: 15p). All share
options are settled in form of equity issued.
No. of Options W AEP
As at 31 December 2017 - -
Granted during the year 4,000,000 0.15
As at 31 December 2018 4,000,000 0.15
Granted during the year 4,000,000 0.17
As at 31 December 2019 8,000,000 0.16
17. 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.
Subsequent measurement at
2019
Term of loan in years 1.5
Annual interest rate for equivalent non-convertible 12%
Principal 670,000
Present value of principal 565,259
18. Shareholder loans
As at As at As at As at
31 December 2019 31 December 2018 31 December 2019 31 December 2018
Shareholders' loan HK$’000 HK$’000 HK$’000 HK$’000
Shareholders' loan at fair value 15,654 8,750 - -
Capital contribution reserve arising from effective interest portion (844) (390) - -
Equity element of convertible loan note (1,082) - - -
Accrued effective interest paid to shareholders 987 316 - -
Shareholder's loan at amortised cost 14,715 8,676 - -
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
2020 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.
19. 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 2018 96,287,079 9,628,708 96,017,186 4,422,954 44,105,565
New Share issue - - - - -
Balance at 31 December 2019 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 2018 and 2019.
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 was 75%, and 122% as at 31
December 2019 and 2018 respectively.
20. 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 2019 31 December 2018 31 December 2019 31 December 2018
Loans and receivables HK$’000 HK$’000 HK$’000 HK$’000
Accounts and other receivables 6,403 5,104 - 48
Amounts due from related companies - - - 11,412
Deposits and prepayments 395 1,036 52 -
Cash and cash equivalents 510 2,552 114 783
Loans and receivables 7,308 8,692 166 12,243
As at As at As at As at
31 December 2019 31 December 2018 31 December 2019 31 December 2018
Financial liabilities at amortised cost HK$’000 HK$’000 HK$’000 HK$’000
Trade and other payables 13,051 15,728 862 816
Deposits received - 111 - -
Shareholders' loan 14,715 8,676 5,822 -
Lease liability (IFRS16) 1,761 - - -
Amount due to a director 515 304 - -
Financial liabilities at amortised cost 30,042 24,819 6,684 816
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 2019, 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. Various banking facilities and credit lines have also been arranged with
different banks in order to fund any emergency liquidity requirements.
Liquidity risk Not later than one month Later than one month and not later than 5 years Carrying amount
As at 31 December 2019
Trade and other payables 13,051 - 13,051
Deposits received - - -
Shareholders' loan 84 14,610 14,693
Amount due to Director 515 - 515
13,566 15,692 29,258
As at 31 December 2018
Trade and other payables 15,728 - 10,577
Deposits received 111 - 111
Shareholders' loan - 8,676 8,676
Amount due to Director 304 - 304
16,143 8,676 24,819
GVMH PLC
As at 31 December 2019
Trade and other payables 862 - 862
Shareholders' loan - 6,904 6,904
862 - 7,766
As at 31 December 2018
Trade and other payables (816) - (816)
(816) - (816)
(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 2019, 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$80,427 (2018: HK$25,090) higher/lower.
(d) Currency risk
GVMH PLC and its subsidiaries purchases and sells in various foreign
currencies, mainly US dollars and RMB that expose it to currency risk arising
from such purchases and sales and the resulting receivables and the payables.
GVMH PLC and its subsidiaries closely and continuously monitors the exposure
on currency risk. Since HK dollars are pegged to US dollars, there is no
significant exposure expected on US dollars transactions and balances.
In respect of purchases and payables, GVMH PLC and its subsidiaries controls
its volume of purchase orders to a tolerable level and avoids concentrating
the purchases in a single foreign currency by diversifying such foreign
currency risk exposure.
In respect of sales and receivables, GVMH PLC and its subsidiaries sets a
prudent credit limit to individual customers who transact with it in other
foreign currencies. The directors’ approval is required on the exposure to
an individual customer or transaction that exceeds the limit.
21. Leases liabilities
The Group has lease contracts for leasehold land and building used in its
operations. Lease of leasehold land and building generally have lease terms
between 2 to 3 years. The Group's obligations under its leases are secured by
the lessor's title to the lease asset. Generally, the Group is restricted from
assigning and subleasing the leased assets and some contracts require the
Group to maintain certain financial ratios. There are several lease contracts
that include extension and termination options and variable lease payments,
which are further discussed below.
The Group also has certain leases of leasehold land and building with lease
terms of 12 months or less. The Company applies the ‘short-term lease’
recognition exemptions for these leases.
Set out below are the carrying amounts of lease liabilities and the movements during the year:
Lease liabilities HK$’000
At 1 January 2019 310
New leases 1,734
Accretion of interest recognised during the year 7
Payments (290)
At 31 December 2019 1,761
The following are the amounts recognised in profit or loss:
HK$’000
Interest on lease liabilities 7
Depreciation of right-of-use assets 332
Expenses relating to short-term leases 953
Total amount recognised in profit or loss 1,292
The Group had total cash outflows for leases of HK$289,800 and has non-cash
additions to right-of-use assets and lease liabilities of HK$ 1,733,804 for
the year.
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.
At 31 December 2019 Between 1 Year Between 2 to 5 Year Over 5 years
HK$’000 HK$’000 HK $’000
Lease Liabilities 554 1,180 -
22. Contingent liabilities
At 31 December 2019, GVMH PLC and its subsidiaries did not have any
significant contingent liabilities.
23. Material related party transactions
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.
During the year, Cyber Lion Limited provided consultancy services to GVC
Holdings Limited amounting to HKD 787,500. This balance was owed to Cyber Lion
Limited at the year end (2018: HKD Nil).
24. Non-adjusting events after the reporting period
At 31 December 2019, 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.
25. List of subsidiaries
As at 31 December 2019 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$13,620 100% 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 79.9% - 79.9% Investment holdings
Grand Vision Media Limited Hong Kong HK$1,000,000 79.9% - 79.9% Advertising
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 79.9% - 79.9% Advertising
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
26. Control
At 31 December 2019, there is no one controlling party.
Copyright (c) 2020 PR Newswire Association,LLC. All Rights ReservedRecent news on Grand Vision Media Holdings
See all newsREG-Grand Vision Media Holdings Plc: Appointment of Auditor
AnnouncementREG-Grand Vision Media Holdings Plc: Appointment of Auditor
AnnouncementREG-Grand Vision Media Holdings Plc: Resignation of Auditor
AnnouncementREG-Grand Vision Media Holdings Plc: Half-year Report
AnnouncementREG-Grand Vision Media Holdings Plc: Result of AGM
Announcement