REG-Grand Vision Media: Final Results
01/03/2022 08:45
London, 1 March 2022
FOR IMMEDIATE RELEASE
Grand Vision Media Holdings plc
( “GVMH” or the “Company”)
Audited Final Results
Grand Vision Media Holdings plc announces its audited final results for the
year ended 31 December 2020. These are presented below and are available
(along with the Company's 2020 Annual Report) to download on the Company's
website at https://www.gvmh.co.uk/tag/financial-information/.
The Company is working towards finalising its interim results for the
six-month period ended 30 June 2021 and expects to announce these in the next
few weeks. At this time, it will seek to lift the suspension in trading in the
Company’s shares.
The audited results for the year ended 31 December 2021 are expected to be
released by 30 June 2022.
For more information contact:
Grand Vision Media Holdings plc Ajay Rajpal, Director gvmh.co.uk/ Tel: +44 (0) 20 7866 2145 or info@gvmh.co.uk
Alfred Henry Corporate Finance Ltd Nick Michaels / Jon Isaacs Tel: +44 (0) 203 772 0021 or jisaacs@alfredhenry.com
GRAND VISION MEDIA HOLDINGS PLC
DIRECTORS’ REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
COMPANY INFORMATION
Directors and Advisers
Directors: Ajay Kumar Rajpal – Non-Executive Director Jonathan Yat Pang Lo – Chief Executive Officer Frederick Chua Oon Kian (appointed 20 January 2020)
Company Number: Company Secretary 10028625 MSP Corporate Services Limited 27-28 Eastcastle Street London W1W 8DH
Registered Address: Finsgate 5-7 Cranwood Street London EC2M 7LD
Principal Banker: Metro Bank 1 Southampton Road London WC1B 5HA
Auditors: Jeffreys Henry LLP Finsgate 5-7 Cranwood Street London EC1V 9EE
Legal Adviser to the Company: Bracher Rawlins 77 Kingsway London WC2B 6SR
Registrar: SLC Registrars Limited Ashley Park House 42-50 Hersham Road Walton-on-Thames Surrey KT12 1RZ
GRAND VISION MEDIA HOLDINGS PLC
CONTENTS
Strategic review report 4
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 2020
The CEO Report
The onset of the COVID-19 pandemic in early 2020 has significantly adversely
affected the Group’s performance for the year. OOH revenues were severely
impacted by the closure of cinemas across China, and the closure of businesses
in Hong Kong, together with the travel restrictions, adversely affected
digital marketing revenues. There was a high degree of uncertainty throughout
the period, with a resulting loss in overall business confidence. Certain
new projects originally planned for the year were postponed and will resume
when pandemic restrictions are lifted. These include the introduction of
interactive and 3D panels into Singapore.
The disruption has lasted for the majority of the period under review, and
this is reflected in the poor results reported. In order to mitigate the
position, the Group has increased its focus on eCommerce marketing and
services, by leveraging its contact base and international business network.
These services are predominantly targeted at suppliers of medical equipment,
who have experienced a significant increase in activity levels as a result of
the pandemic.
Summary of Trading Results
Total revenue for the year was HK$5,827K [2019: HK$12,034K], a decline of 52%
compared to the prior year. Although the Group has been working on a number of
initiatives with suppliers of medical equipment throughout the period, the
impact of the majority of these is only expected to come to fruition in 2022
onwards.
The Group total comprehensive loss for the year was HK$9,793K [2019:
HK$14,957K]. This was as a direct result of the reduction is revenues across
the Group and the major disruption caused by the pandemic. The Group has
managed to achieve cost savings as a result of space consolidation and
headcount reductions, and has taken advantage of Government fiscal support
aimed at helping businesses through the pandemic. The Group has also
recognised a provision against trade receivables of HK$2,740K given the
material uncertainty in the region and the ongoing impact of the pandemic.
Given the material uncertainty and disruption faced by the Group, the Company
has fully impaired its investment in GVC Holdings Limited, and the
intercompany balances owed by Group entities, resulting in charges of
HK$114,572K and HK$18,512K respectively in the Company profit and loss
account. It is hoped that these impairments will be reviewed again when the
business and trading environment returns to normal, and there is more
visibility on the future outlook.
The Group has 180 panels [2019: 200] in cinemas across China, and is
evaluating other technologies to promote OOH advertising in the cinema space
as well as other locations.
Cash in hand at the end of the year was HK$855K. The Group continues to manage
its cash within its available resources.
Outlook
COVID-19 has had a significant adverse effect on the Group’s performance in
2020. Sales for 2021 will again be below historic levels as a result of the
ongoing travel disruption and intermittent business closures across the
region. Cinemas in China are still operating at reduced capacity., Unlike
many other parts of the world, Hong Kong is following a zero COVID policy,
which has resulted in more business disruption and closures than would
otherwise be seen elsewhere.
It is uncertain as to when trading conditions will return to normal, but the
disruption to the Group was experienced throughout 2021, and is expected to
last well into 2022.
Section 172 Statement
The Directors are well aware of their duty under s172 of the Companies Act
2006 to act in the way which they consider, in good faith, would be most
likely to promote the success of the Company for the benefit of its members as
a whole and, in doing so, to have regard (amongst other matters) to:
• the likely consequences of any decision in the long term;
• the interests of the Group’s employees;
• the need to foster the Group’s business relationships with suppliers,
customers and others;
• the impact of the Group’s operations on the community and the
environment;
• the desirability of the Group maintaining a reputation for high standards
of business conduct; and
• the need to act fairly between members of the Group.
The Board recognises that the long-term success of the Grand Vision Media
Holdings Group requires positive interaction with its stakeholders. Positive
engagement with stakeholders will enable our stakeholders to better understand
the activities, needs and challenges of the business and enable the Board to
better understand and address relevant stakeholder views which will assist the
Board’s in its decision making and to discharge its duties under Section 172
of the Companies Act 2006.
In the following section we identify our key stakeholders, how we engage with
them and key activities we have undertaken during the period in question.
Our Strategic Partners
The Company works closely with its major supplier Marvel Digital Limited and
its cinema partners Dadi Cinema Group and Perfect World Cinema Group, who are
important strategic partners with the Group. We continue to work with them
despite the business disruption caused by the pandemic, and have developed an
open and transparent relationship with these partners, which promotes the
long-term success for the Group.
We also continue to strengthen our relationships with CY Group in Korea
despite the closure of Korean cinemas caused by COVID-19 which stalled our OOH
expansion plan. We are looking to create new projects to introduce
branded products to Korea.
Our Shareholders
The Company has been well-supported by its shareholders for many years, who
have provided shareholder loans historically, and during 2020, some
shareholders participated in the convertible loan note issue. The Company
endeavours to keep shareholders updated on regulatory matters, and is
committed to provide transparent information to them, both through the annual
report and ad-hoc communications.
Our Customers
The Company strives to maintain strong relationships with its customers, which
will promote long term growth. The relationships with customers who advertise
with the Company are maintained through regular contact and relationship
management.
Our Employees
The Company believes that good staff morale engenders increased efficiency and
loyalty, and hence promotes staff welfare and well-being. Staff needs are
constantly monitored and improved on an ongoing basis.
Principal Risks and Uncertainties
The Directors consider the following risk factors to be of relevance to the
Group’s activities. It should be noted that the list is not exhaustive and
that other risk factors not presently known or currently deemed immaterial may
apply. The risk factors are summarised below:
i. Development Risk
The Group’s development will be, in part, dependent on the ability of the
Directors to continue to expand the current business and identify suitable
investment opportunities and to implement the Group’s strategy. There is no
assurance that the Group will be successful in the expansion of the business,
which is dependent on raising sufficient capital.
ii. Sector Risk
The OOH media sector is subject to competition from other marketing channels
and technologies, particularly the impact of digital marketing.
We also compete with other OOH media locations, such as traffic hubs,
elevators and other locations, which are more established.
There is a risk of 3D technology not being well received, given that it is a
new media platform in the OOH sector. The Company is continuously looking
for new and innovative platforms to differentiate itself, and there is no
guarantee that these new platforms will be effective.
The Group would also be looking at new opportunities and projects to enhance
our service capabilities and increase our scope of services, hence lessening
the reliance on OOH sector.
iii. Political and Regulatory Risk
The Group is subject to amendments to laws imposed by China and by other
jurisdictions where the Group does business, including laws that govern the
time, place and manner of advertising, that may impair or even prevent the
Group from conducting its business.
Furthermore, prior to distributing advertisements for certain commodities,
advertising distributors and advertisers are obligated to ensure compliance to
relevant regulations. Violation of these regulations may result in
penalties, including fines, confiscation of advertising income, orders to
cease dissemination of the advertisements.
In circumstances involving serious violations, the SAIC or its local branches
may revoke violators’ licenses or permits for advertising business
operations. In addition, advertisers, advertising operators or advertising
distributors may be subject to civil liability if they infringe on the legal
rights and interests of third parties in the course of their advertising
business. The Group has implemented procedures to ensure the content of our
advertisement are properly reviewed and the advertisement would only be
published upon the receipt of content approval from the relevant
administrative authorities. However, the Group can provide no assurance that
all the content of the advertisements is true and in full compliance with
applicable laws.
In the event that the Group was in violation of such regulations the
business, financial condition, results of operations and the prospects of
the Group could be materially and adversely affected.
iv. Environmental Risks and Hazards
All phases of the Group’s operations are subject to environmental regulation
in the areas in which it operates. Environmental legislation is evolving in a
manner that may require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for companies and
their officers, directors and employees.
There is no assurance that existing or future environmental regulation will
not materially adversely affect the Group’s business, financial condition
and results of operations. Environmental hazards may exist on the properties
on which the Group holds interests that are unknown to the Group at present.
The Board manages this risk by working with environmental consultants and by
engaging with the relevant governmental departments and other concerned
stakeholders.
v. Internal Control and Financial Risk Management
The Board has overall responsibility for the Group’s systems of internal
control and for reviewing their effectiveness. The Group maintains systems
which are designed to provide reasonable but not absolute assurance against
material loss and to manage rather than eliminate risk.
The key features of the Group’s systems of internal control are as follows:
o Management structure with clearly identified responsibilities;
o Production of timely and comprehensive historical management information
presented to the Board;
o Detailed budgeting and forecasting;
o Day to day hands on involvement of the Executive Directors and Senior
Management; and
o Regular board and meetings and discussions with the Non-executive
directors.
The Group’s activities expose it to several financial risks including cash
flow risk, liquidity risk and foreign currency risk.
vi. Environmental Policy
The Group is aware of the potential impact that its subsidiary and associate
companies may have on the environment. The Group ensures that it complies with
all local regulatory requirements and seeks to implement a best practice
approach to managing environmental aspects.
vii. Health and Safety
The Group’s aim is to achieve and maintain a high standard of workplace
safety. In order to achieve this objective, the Group provides ongoing
training and support to employees and sets demanding standards for workplace
safety.
viii. Financing Risk
The development of the Group’s business may depend upon the Group’s
ability to obtain financing primarily through the raising of new equity
capital or debt. The Group’s ability to raise further funds may be affected
by the success of existing and acquired investments. The Group may not be
successful in procuring the requisite funds on terms which are acceptable to
it (or at all) and, if such funding is unavailable, the Group may be required
to reduce the scope of its investments or the anticipated expansion. Further,
Shareholders’ holdings of Ordinary Shares may be materially diluted if debt
financing is not available.
ix. Credit Risk
The Group does not have bank loans or other borrowings except for shareholder
loans. The Group has benefitted from further shareholder loans, although
there is no guarantee that these will continue in the future. We have reviewed
the accounts receivable and have made adequate provisions as appropriate.
x. Liquidity Risk
The Directors have reviewed the working capital forecasts for the Group and
believe that there is sufficient working capital to fund the business as it
progresses to break even. The group is reliant on raising new capital for
expansion, which is not guaranteed.
xi. Market Risk
The group’s investments is in its subsidiary, GVC Holdings Ltd. The shares
are not readily tradable.
xii. Capital Risk
The Group manages its capital resources to ensure that entities in the Group
will be able to continue as a going concern, while maximising shareholder
return.
The capital structure of the Group consists of equity attributable to
shareholders, comprising issued share capital and reserves. The availability
of new capital will depend on many factors including a positive operating
environment, positive stock market conditions, the Group’s track record, and
the experience of management. There are no externally imposed capital
requirements. The Directors are confident that adequate cash resources exist
or will be made available to finance operations but controls over expenditure
are carefully managed.
xiii. Covid 19 Outbreak
The Group have been significantly affected by the Covid -19 outbreak, and the
impact of it on the Group financials and worldwide economy have been severe.
The Group are hoping for a return to normal trading conditions in the current
year, and until such time, the business will face disruption and uncertainty.
Going Concern
The day to day working capital requirements and investment objectives is met
by existing cash resources and the issue of equity. At 31 December 2020 the
Group had cash balance of HKD855k. The Group’s forecasts and projections,
taking into account reasonably planned changes in the level of overhead costs,
show that the Company should be able to operate within its available cash
resources but only with shareholder help. A major shareholder has committed to
provide the required level of support. The directors have, at the time of
approving the financial statements, a reasonable expectation that the Group
has adequate resources to continue in existence for the foreseeable future.
They therefore continue to adopt the going concern basis of accounting in
preparing the financial statements.
On behalf of the board
Jonathan Lo
Chief Executive Officer
28 February 2022
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors present their report together with the accounts of Grand Vision
Media Holdings Plc (‘’the Company’’) and its subsidiary undertakings
(together ‘the group’) for the year ended 31 December 2020.
Results and dividends
The trading results for the Group are set out in the consolidated statement of
comprehensive income and the consolidated statement of financial position at
the end of the year.
The directors have not recommended a dividend.
Directors
The following directors have held office during the period:
Edward Kwan-Mang Ng (resigned 20 January 2020)
Ajay Kumar Rajpal
Jonathan Yat Pang Lo
Federick Chua Oon Kian (appointed 20 January 2020)
Directors’ interests
At the date of this report the directors held the following beneficial
interest in the ordinary share capital and share options of the company:
Director Beneficial Shareholding (Held through Cyber Lion Limited) Beneficial Shareholdings Percentage of the Company’s ordinary Share Capital
Edward Kwan-Mang Ng Nil -
Ajay Kumar Rajpal Nil -
Jonathan Yat Pang Lo 22,438,842 23.3%
Federick Chua Oon Kian - -
Director Options
Edward Kwan-Mang Ng 3,000,000
Ajay Kumar Rajpal 3,000,000
Jonathan Yat Pang Lo 6,000,000
Totals 12,000,000
Substantial Interests
The Company has been informed of the following shareholdings that represent 3%
or more of the issued ordinary shares of the company as at 27 February 2022 :
Investor Shareholding (Ordinary shares of 10p) Percentage of the Company’s ordinary Share Capita
Jonathan Lo 22,438,842 23.3%
Pentawood Limited 12,439,779 12.92%
Stephen Lo 12,439,779 12.92%
Magic Carpet 8,064,486 8.38%
Win Network International Limited * 7,328,000 7.61%
Timenow Ltd 4,499,016 4.67%
Vaiatrax Holdings Ltd 3,936,639 4.09%
Tamperzem Holding Ltd 3,374,262 3.50%
*Beneficially owned by Stephen Lo
Financial risk and management of capital
The major balances and financial risks to which the company is exposed to and
the controls in place to minimise those risks are disclosed in Note 20.
A description of how the company manages its capital is also disclosed in Note
19.
The Board considers and reviews these risks on a strategic and day-to-day
basis in order to minimise any potential exposure.
Emissions
The Group is not an intensive user of fossil fuels or electricity. As a
result, it is not practical to determine carbon emission with any degree of
accuracy.
Financial instruments
The company has not entered into any financial instruments to hedge against
interest rate or exchange rate risk.
Supplier payment policy
It is the Group’s payment policy to pay suppliers in line with industry
norms. These payables are paid on a timely basis within contractual terms
which is generally 30 to 60 days from date of receipt of invoice.
Auditors
Jeffreys Henry LLP were appointed auditors to the company and in accordance
with section 485 of the Companies Act 2006, a resolution proposing that they
be re-appointed will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the Directors' Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent company
financial statements for each financial year. Under that law the directors
have elected to prepare the financial statements in accordance with
International Financial Reporting Standards (IFRS) as adopted for use in the
European Union. Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of
the state of affairs of the group and company and of the group’s profit or
loss for that period. In preparing these financial statements, the directors
are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether they have been prepared in accordance with IFRS as
adopted by the European Union
· prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the company’s transactions and disclose with
reasonable accuracy at any time the financial position of the group and
company. They are also responsible for safeguarding the assets of the group
and company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company’s website.
Corporate Governance
The Board recognizes that good standards of corporate governance help the
Company to achieve its strategic goals and is vital for the success of the
Company. The Company adopts proper standards of corporate governance and
follows the principles of best practice set out in Corporate Governance Code
(2019), as far as is appropriate for the size and nature of the Company and
the Group. These principles are disclosed on our website in the Corporate
Governance section
Application of principles of good governance by to board of directors
The board currently comprises the three directors: Frederick Chua Oon Kian,
Ajay Kumar Rajpal and Jonathan Yat Pang Lo.
There are regular board meetings each year and other meetings are held as
required to direct the overall Company strategy and operations. Board meetings
follow a formal agenda covering matters specifically reserved for decision by
the board. These cover key areas of the Company’s affairs including overall
strategy, acquisition policy, approval of budgets, major capital expenditure
and significant transactions and financing issues.
The board undertakes a formal annual evaluation of its own performance and
that of its committees and individual directors, through discussions and
one-to-one reviews with the chairman and the senior independent director.
Statement of disclosure to auditors
Each person who is a Director at the date of approval of this Annual Report
confirms that:
• So far as the Directors are aware, there is no relevant audit
information of which the Company’s auditors are unaware; and
• Each Director has taken all the steps that he ought to have
taken as Director in order to make himself aware of any relevant audit
information and to establish that the Company’s auditors are aware of that
information.
• Each Director is aware of and concurs with the information
included in the Strategic Report.
Post Balance Sheet Events
Further information on events after the reporting date is set out in note 24.
Branches Outside the UK
The Group head office is in Hong Kong and the subsidiaries are located in Hong
Kong and China.
The Directors’ have chosen to produce a Strategic Report that discloses a
fair review of the Group’s business, the key performances metrics that the
Directors review along with a review of the key risks to the business.
In accordance with Section 414C (1) of the Companies Act 2006, the group
chooses to report the review of the business, the future outlook and the risks
and uncertainties faced by the Company in The Strategic Report on page 4.
Directors’ Remuneration Report
The information included in this section is not subject to audit other than
where specifically indicated.
The remuneration committee consisted of Ajay Rajpal and Frederick Chua Oon
Kian. This committee's primary function is to review the performance of
executive directors and senior employees and set their remuneration and other
terms of employment.
2020 2019
Director Options Vested Options Vested
Edward Ng 1,000,000 1,000,000
Ajay Rajpal 1,000,000 1,000,000
Jonathan Lo 2,000,000 2,000,000
-
Totals 4,000,000 4,000,000
The Company has one executive director.
The remuneration policy
It is the aim of the committee to remunerate executive directors competitively
and to reward performance. The remuneration committee determines the company's
policy for the remuneration of executive directors, having regard to the UK
Corporate Governance Code and its provisions on directors' remuneration.
Service agreements and terms of appointment
The directors have service contracts with the company.
Directors' interests
The directors' interests in the share capital of the company are set out in
the Directors’ report.
Directors' emoluments
Salaries and Fees Group Company
2020 2019 2020 2019
HK$’000 HK$’000 HK$’000 HK$’000
Edward Ng - 60 - -
Ajay Rajpal 480 240 120 120
Jonathan Lo 1,080 1,080 480 480
1,320 1,380 600 600
No pension contributions were made by the company on behalf of its directors
apart for Jonathan Lo of HKD18K.
Approval by shareholders
At the next annual general meeting of the company a resolution approving this
report is to be proposed as an ordinary resolution.
This report was approved by the board on 28 February 2022
On behalf of the board
__________________
Jonathan Lo
Director
28 February 2022
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GRAND VISION MEDIA HOLDINGS PLC
Opinion
We have audited the financial statements of Grand Vision Media Holdings Plc
(the ‘parent company’) and its subsidiaries (the ‘group’) for the year
ended 31 December 2020 which comprise the consolidated statement of
comprehensive income, the consolidated and company statements of financial
position, the consolidated and company statements of cash flows, the
consolidated and company statements of changes in equity and notes to the
financial statements, including a summary of significant accounting policies.
In our opinion:
· the financial statements give a true and fair view of the state of
the group’s and of the parent company’s affairs as at 31 December 2020 and
of the group’s loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
· the parent company financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union and as applied in
accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report. We are independent of
the company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2.3 in the financial statements, which explains that
the Group has incurred significant operating losses and negative cash flows
from operations. The Group forecasts include additional shareholder funding
requirements upon which the Group is dependent. The directors are satisfied
that these funding requirements will be met. These events or conditions, along
with other matters as set out in note 2.3 indicate that a material uncertainty
exists that may cast doubt on the Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. This is not a complete list of
all risks identified by our audit.
· Going concern issues
· Carrying value of investments and recoverability of intercompany
loans
These are explained in more detail below:
Key audit matter How our audit addressed the key audit matter
Possible impairment of long-term investment and loans to subsidiaries (Parent) At the year end the Company had Investment in subsidiary of HK$114,572K and Loans of HK$ 18,512K. The directors have assessed whether the investment and made an impairment provision in full. We have reviewed the consolidated financials of the subsidiary and having reviewed the performance to date the subsidiary is profit making and is continuing to grow. We reviewed the latest management accounts post year end for the subsidiary. We have
reviewed the long term cashflow forecasts prepared and understood and assessed the methodology used by the directors in this analysis and determined it to be reasonable. We tested management sensitivity analysis through changing the assumptions used and re
- running the cash flow forecast. We discussed the results and the full impairment.
Going concern assumption The Group is dependent upon its ability to generate sufficient cash flows to meet continued operational costs and hence continue trading. Although the current loss-making status is as expected due to the impact of Covid and the stage in development , given the scale of cash outflows, the Group needs to be generating sufficient revenues to sustain its position. The going concern assumptions is dependent on future growth of the current businesses. No future capital raises were being considered to maintain the business. The Group relies on the Our audit procedures: · We obtained and reviewed the directors’ assessment, including challenging the liquidity position; · We agreed the assumed cash flows to the business plan, walked through the business planning process and tested the central
support of one of its key shareholders. assumptions and external data; · We audited the key assumptions; · We assessed the sensitivities of the underlying assumptions. · We assessed the financial support available from a key shareholder.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole.
Based on our professional judgment, we determined materiality for the
financial statements as a whole as follows:
Group financial statements Company financial statements
Overall materiality HK$ 343,000 (2019: HK$ 700,000) HK$ 56,000 (2019: HK$ 119,000)
How we determined it 5% of Net Loss (2019: 5% of Net Loss) 5% of Net Loss (2019: 5% of Net Loss)
Rationale for benchmark applied We believe that loss before tax is a primary measure used by shareholders in assessing the performance of the Group whilst gross asset values and revenue are a representation of the size of the Group; all are generally accepted auditing benchmarks. We believe that gross asset values are a representation of the size of the Company and is a generally accepted auditing benchmark.
For each component in the scope of our Group audit, we allocated a materiality
that is less than our overall Group materiality. The range of materiality
allocated across components was between HK$30,000 and HK$226,000.
We agreed with the Audit Committee that we would report to them misstatements
identified during our audit above HK$2,800 as well as misstatements below
those amounts that, in our view, warranted reporting for qualitative reasons.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular, we
looked at where the directors made subjective judgments, for example in
respect of significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain. As in all of our
audits we also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to
be able to give an opinion on the financial statements as a whole, taking into
account the structure of the Group and the Company, the accounting processes
and controls, and the industry in which they operate.
The Group financial statements are a consolidation of 8 reporting units,
comprising the Group’s operating businesses and holding companies.
We performed audits of the complete financial information of Grand Vision
Media Holdings Plc, and GVC Holdings Ltd reporting units, which were
individually financially significant and accounted for 100% of the Group’s
revenue and 100% of the Group’s absolute profit before tax (i.e., the sum of
the numerical values without regard to whether they were profits or losses for
the relevant reporting units). We also performed specified audit procedures
over goodwill and other intangible assets, as well as certain account balances
and transaction classes that we regarded as material to the Group at 8
reporting units.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report, other than the
financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors’
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors’ report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent
company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors’
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements [and the part of the
directors’ remuneration report to be audited] are not in agreement with the
accounting records and returns; or
· certain disclosures of directors’ remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement [set
out on page 9], the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group’s and parent company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
The extent to which the audit was considered capable of detecting
irregularities, including fraud
Our approach to identifying and assessing the risks of material misstatement
in respect of irregularities, including fraud and non-compliance with laws and
regulations, was as follows:
· the senior statutory auditor ensured the engagement team
collectively had the appropriate competence, capabilities and skills to
identify or recognise non-compliance with applicable laws and regulations;
· we identified the laws and regulations applicable to the company
through discussions with directors and other management, and from our
commercial knowledge and experience of the digital marketing and advertising
sector.
· we focused on specific laws and regulations which we considered may
have a direct material effect on the financial statements or the operations of
the company, including Companies Act 2006, taxation legislation, data
protection, anti-bribery, employment, environmental, health and safety
legislation and anti-money laundering regulations.
· we assessed the extent of compliance with the laws and regulations
identified above through making enquiries of management and inspecting legal
correspondence; and
· identified laws and regulations were communicated within the audit
team regularly and the team remained alert to instances of non-compliance
throughout the audit.
· We assessed the susceptibility of the company’s financial
statements to material misstatement, including obtaining an understanding of
how fraud might occur, by:
· making enquiries of management as to where they considered there
was susceptibility to fraud, their knowledge of actual, suspected and alleged
fraud;
· considering the internal controls in place to mitigate risks of
fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls,
we:
• performed analytical procedures to identify any unusual or
unexpected relationships;
• tested journal entries to identify unusual transactions;
• assessed whether judgements and assumptions made in determining
the accounting estimates set out in Note 3 of the Group financial statements
were indicative of potential bias;
• investigated the rationale behind significant or unusual
transactions.
In response to the risk of irregularities and non-compliance with laws and
regulations, we designed procedures which included, but were not limited to:
• agreeing financial statement disclosures to underlying
supporting documentation;
• reading the minutes of meetings of those charged with
governance;
• enquiring of management as to actual and potential litigation
and claims;
• reviewing correspondence with HMRC and the company’s legal
advisor.
There are inherent limitations in our audit procedures described above. The
more removed that laws and regulations are from financial transactions, the
less likely it is that we would become aware of non-compliance. Auditing
standards also limit the audit procedures required to identify non-compliance
with laws and regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than
those that arise from error as they may involve deliberate concealment or
collusion.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Other matters which we are required to address
We were appointed by the audit committee on 8 February 2017 to audit the
financial statements for the period ending 31 December 2016. Our total
uninterrupted period of engagement is 5 years, covering the years ending 31
December 2016 to 31 December 2020.
The non-audit services prohibited by the FRC’s Ethical Standard were not
provided to the group or the parent company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of this report
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work
has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we
have formed.
Sanjay Parmar (Senior Statutory Auditor)
For and on behalf of Jeffreys Henry LLP (Statutory Auditors)
Finsgate
5-7 Cranwood Street
London EC1V
9EE
28 February 2022
Statements of Comprehensive Income for the year ended 31 December 2020
Group Group Company Company
For the year For the year For the year For the year
ended ended ended ended
31 December 2020 31 December 2019 31 December 2020 31 December 2019
Note HK$’000 HK$’000 HK$’000 HK$’000
Revenue 4 5,827 12,034 - -
Cost of sales (5,129) (10,648) - -
Gross profit 698 1,386 - -
Other income 4 1,720 184 - -
2,418 1,570 - -
Administrative expenses 6 (9,839) (16,442) (1,329) (2,593)
Provision for the trade receivables (2,740) -
Impairment loss for investment in Subsidiary - - (114,571) -
Impairment loss on the intercompany current account - - (18,512) -
(Loss)/profit for the period from operations (10,161) (14,872) (134,412) (2,593)
Finance costs 5 111 (223) - -
(Loss)/profit for the period before tax (10,050) (15,095) (134,412) (2,593)
Income tax expense 7 - - - -
(Loss)/profit for the period (10,050) (15,095) (134,412) (2,593)
Other comprehensive income (loss)/income
Exchange differences arising on translation of foreign operations 257 138 - 87
Total comprehensive (loss)/ income for the period (9,793) (14,957) (134,412) (2,506)
(Loss)/ profit attributable to
Equity holders of parent company (9,761) (15,221) (134,412) (2,593)
Non-controlling interests (289) 126 - -
(10,050) (15,095) (134,412) (2,593)
Total comprehensive (loss) / income attributable to:
Equity holders of the parent company (9,504) (15,083) (134,412) (2,506)
Non-controlling interests (289) 126 - -
(9,793) (14,957) (134,412) (2,506)
Earnings/(loss) per shares - Basic and diluted HK$ 8 (0.10) (0.16) (1.40) (0.027)
Statements of financial position as at 31 December 2020
Group Group Company Company
As at As at As at As at
31 December 2020 31 December 2019 31 December 2020 31 December 2019
Notes HK$’000 HK$’000 HK$’000 HK$’000
Assets
Non-current assets
Property, plant and equipment 9 170 165 - -
Right of use assets (IFRS16) 11 1,108 1,710 - -
Investment in Subsidiaries 12 - - - 114,572
Total non-current assets 1,278 1,875 - 114,572
Current assets
Inventories 10 - 1,004 - -
Trade and other receivables 13 3,549 6,403 - -
Deposits and prepayments 13 400 395 55 52
Amount due from subsidiaries 13 - - - 18,107
Cash and cash equivalents 14 855 510 43 114
Total current assets 4,804 8,312 98 18,273
Total assets 6,082 10,187 98 132,845
Equity and liabilities
Equity
Share capital 19 96,017 96,017 96,017 96,017
Share premium 44,106 44,106 44,106 44,106
Group Re-organization Reserve (100,031) (96,631) - -
Capital Contribution arising from Shareholder’s Loan 844 844 - -
Other Reserves 4,824 3,849 3,849 3,849
Exchange Reserves 2,366 4,509 276 266
Accumulated deficit (79,109) (69,348) (152,489) (18,077)
Equity attributable to owners of the parent (30,983) (16,654) 8,241 126,161
Non-controlling interests (173) (3,284) - -
Total equity (31,156) (19,938) 8,241 126,161
Liabilities
Non-current liabilities
Convertible Bonds 17 5,968 5,822 5,968 5,822
Shareholder loans 18 9,227 8,893 477 -
Total non-current liabilities 15,195 14,715 6,445 5,822
Current liabilities
Trade and other payables 15 14,282 13,051 1,894 862
Lease Liabilities 21 1,156 1,761 - -
Amount due to a director 3,567 515 - -
Deposits received Shareholder loan 92 2,946 - 83 - - - -
Total current liabilities 22,043 15,410 1,894 862
Total liabilities 37,238 30,020 8,339 6,684
Total equity and liabilities 6,082 10,187 98 132,845
Approved by the Board and authorised for issue on 28 February 2022
Jonathan Lo
Director
? Company Registration No. 10028625
Statements of Changes in Equity
Share capital Share premium Other reserves Exchange reserves Retained earnings Total equity
Company HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Balance at 1 January 2019 96,017 44,106 1,447 - (3,985) 5,292
(Loss) for the year - - - 266 (1,186) (920)
Convertible loan note Share based payments - - 1,082 1,320 - - (1,320) 1,082 -
Total comprehensive income - - 2,402 266 (2,506) 3,240
Balance at 31 December 2019 96,017 44,106 3,849 266 (18,077) 126,161
Change in equity for 2020
(Loss) for the year - - - - (134,412) (134,412)
Other comprehensive income - - - 10 - 10
Share based payments - - - - - -
Total comprehensive income - - - 10 (134,412) (134,402)
Balance at 31 December 2020 96,017 44,106 3,849 276 (152,489) (8,241)
Statements of Changes in Equity
Attributable to the Group
Share capital Share premium Reverse Acquisition reserve Other reserve Exchange reserve Capital contribution reserves Retained earnings Total Non-controlling interests Total equity
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
GVMH PLC
Balance at 1 January 2019 96,017 44,106 (96,631) 1,447 450 - (54,215) (8,827) (3,410) (12,237)
Capital Contribution - - - - - - 844 - 844
Exchange Reserve - - - - 4,060 - - 4,060 - 4,060
Share based payment - - - 1,320 - - - 1,320 - 1,320
Loan note - - - 1,082 - - - 1,082 - 1,082
Non-Controlling Interest - - - - - - - - 126 126
Loss for the period - - - - - - (15,133) (15,133) - (15,133)
Balance at 31 December 2019 96,017 44,106 (96,631) 3,849 4,510 844 (69,348) (16,653) (3,284) (19,93 7 )
GVMH PLC
Balance at 1 January 2020 96,017 44,106 (96,631) 3,849 4,510 844 (69,348) (16,653) (3,284) (19,93 7 )
Exchange Reserve - - - - (2,144) - - (2,144) - (2,144)
Share based payment - - - 975 - - - 975 - 975
Other reserve - - (3,400) - - - - (3,400) 3,400 -
Non-Controlling Interest - - - - - - - - (289) (289)
Loss for the period - - - - - - (9,761) (9,761) - (9,761)
Balance at 31 DECEMBER 2020 96,017 44,106 (100,031) 4,824 2,366 844 (79,109) (30,983) (173) (31,15 6 )
Share capital is the amount subscribed for shares at nominal value.
The share premium has arisen on the issue of shares at a premium to their
nominal value.
Share-based payments reserve relate to the charge for share-based payments in
accordance with IFRS 2.
Retained earnings represent the cumulative loss of the Group attributable to
equity shareholders.
The reverse acquisition reserve arose in June 2019 on the reverse acquisition
by GVC.
Statements of Cash flows for the year ended 31 December 2020
Group Group Company For the year Company For the year
For the year For the year
ended ended ended ended
31 December 2020 31 December 2019 31 December 2020 31 December 2019
HK$’000 HK$’000 HK$’000 HK$’000
Operating activities
(Loss)/ profit before taxation (10,050) (15,095) (134,412) (2,593)
Adjustments for:
Depreciation 843 2,350 - -
Provision for the trade receivables 2,740
Impairment loss for the investment - - 114,571 -
Impairment loss on the intercompany current account - - 18,512 -
Share based payment 975 1,320 - 1,320
Finance costs 31 223 - -
Reverse of overprovided interest (143) -
Operating loss before changes in working capital (5,604) (11,202) (1,329) (1,273)
Decrease in inventories 1,004 702 - -
Decrease/ (increase) in trade and other receivables 109 (1,299) (3) -
Decrease/ (increase) in deposits and prepayments - 641 - (4)
Increase in trade and other payables 826 2,473 628 45
Increase in deposit received 10 (27) - -
Cash generated from/(used in) operating activities (3,655) (8,711) (704) (1,232)
Investing activities
Payment for purchase of property, plant and equipment (248) (10) - -
Net cash (outflow)/ inflow from investing activities (248) (10) - -
Financing activities
Increase in an amount due from director 3,052 211 - -
(Repayment of) /proceeds from shareholder loans 3,796 (850) - -
Increase in loans due from subsidiaries - - 895
Increase in convertible loans - 6,904 - 6,904
Principal portion of lease payment (636) (290) - -
Net cash generated from Financing activities 6,212 5,975 895 6,904
Net increase/(decrease) in cash and cash equivalents 2,309 (2,746) 191 (1,023)
Cash and cash equivalents at 1 January 510 2,552 113 783
Effect of foreign exchange rate changes (1,964) 704 (262) 353
Cash and cash equivalents at 31 December 855 510 42 114
Represented by:
Bank balance and cash 855 510 42 114
Notes to the financial statements
1. Reporting entities
The Company is a UK incorporated entity with a registered number of 10028625.
GVMH's head office is in Honk Kong from where it is managed. These
consolidated financial statements comprise GVMH and its subsidiaries. GVMH and
its subsidiaries are primarily involved in social media marketing and acting
as commission agents .
2. Accounting policies
2.1. Statement of compliance
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) as adopted by the EU.
2.2. Basis of preparation of the financial statements
The consolidated financial statements consolidate those of the Company and its
subsidiaries (together the “Group” or “Grand Vision Media Holdings
Plc”). The consolidated financial statements of the Group and the individual
financial statements of the Company are prepared in accordance with applicable
UK law and International Financial Reporting Standards ("IFRS") as adopted by
the European Union and as applied in accordance with the provisions of the
Companies Act 2006. The Directors consider that the financial information
presented in these Financial Statements represents fairly the financial
position, operations and cash flows for the period, in conformity with IFRS.
Consolidation
The consolidated financial statements include the financial statements of the
Company and its subsidiaries and associated undertakings. All of the
subsidiaries have the same reporting date of 31 December.
2.3. Application of new and revised International Financial Reporting
Standards (IFRSs)
Changes in accounting policies and disclosures
In the current year, the Group has applied the Amendments to References to the
Conceptual Framework in IFRS Standards and the following amendments to IFRSs
for the first time, which are mandatorily effective for the annual period
beginning on or after 1 January 2020 for the preparation of the consolidated
financial statements:
• IFRS 3 “Business Combinations”
• IFRS 9, IAS 39 and IFRS 7 ‘’Interest rate benchmark
reform’’
• IAS 1 and IAS 8 ‘’Definition of Material’’
Except as described below, the application of the new and amendments to IFRSs
in the current year has had no material impact on the Group’s financial
performance and positions for the current and prior years and/or on the
disclosures set out in these consolidated financial statements.
New and revised IFRSs in issue but not yet effective
GVMH PLC and its subsidiaries has not applied the following new and revised
IFRSs that have been issued but are not yet effective:
Reference Title Application date of standard (Periods commencing on or after)
IFRS 17 Insurance Contracts and the related Amendments 1 January 2023
Amendments to IFRS 3 Reference to the Conceptual Framework 1 January 2022
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 1 January 2021
Amendments to IFRS 16 COVID-19 Related Rent Concessions 1 June 2020
Amendments to IAS 1 Classification of Liabilities as Current or Non-current and related amendments to Hong Kong Interpretation 5 (2020) 1 January 2023
Amendments to IAS 16 Property, Plant and Equipment – Proceeds before Intended Use 1 January 2022
Amendments to IAS 37 Onerous Contracts – Cost of Fulfilling a Contract 1 January 2022
The Directors anticipate that the adoption of these standard and the
interpretations in future period will have no material impact on the financial
statements of the company.
Foreign currency
The functional currency of the Group is Hong Kong Dollars (HKD), its
subsidiaries are also in HKD. The presentational currency of the Group is HKD
because a significant amount of its transactions is in HKD.
Transactions entered by the Group’s entities in a currency other than the
reporting currency are recorded at the rates ruling when the transaction
occur. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the statement of financial position date. Exchange differences
arising on the re-translation of outstanding monetary assets and liabilities
are also recognised in the income statement.
Going concern
The Group meets its day to day working capital requirement through use of cash
reserves and existing shareholder loans. The Directors have considered whether
the going concern basis is applicable in the preparation of the financial
statements. This included the review of internal budgets, forecasts and
financial results which show that there is a reasonable expectation that the
Group should be able to operate within the level of its current funding
arrangement.
The COVID-19 pandemic has had a significant effect on the Group’s results
since January 2020, as digital marketing spends across the customer base
declined considerably. Furthermore, the closure of cinemas in China has
adversely affected the OOH revenue stream. To mitigate against this, the Group
has taken advantage of local stimulus wherever possible, and sought to cut
costs whilst revenues are reduced. In Hong Kong, the Employment Support Scheme
has provided assistance to pay wages from April 2020 to September 2020.
Savings have also been made through reductions in rents to cinemas, office
admin staff and some consolidation of office/storage space.
The Group incurred a loss of HKD 10,050,000 for the year ended 31 December
2020 and had net current liabilities of HK$ 17,239,000. This condition
indicates the existence of a material uncertainty which may cast significant
doubt on the Company's ability to continue as a going concern. Therefore, the
Company may be unable to realise its assets. The financial statements do not
include any adjustments that would result if the Group was unable to continue
as a going concern.
After careful consideration of the matters set out above and the support
provided by a key shareholder, the Directors are of the opinion that the group
will be able to undertake its planned activities for the period to 28 February
2023 from reserves and shareholder funding and have prepared the consolidated
financial statement on a going concern basis.
Nevertheless, due to the uncertainties inherent in meeting its revenue
predictions and obtaining obstacle funding these can be no certainty in these
respects. The financial statements do not include any adjustments that would
result if the group was unable to continue as a going concern.
2.4. Subsidiaries and non-controlling interests and GVMH PLC and its
subsidiaries reorganisation accounting
Subsidiaries are all entities over which Grand Vision Media Holdings Plc has
the power to govern the financial and operating policies generally
accompanying a shareholding of more than one half of the voting rights. The
existence and effect of potential voting rights that are currently exercisable
or convertible are considered when assessing whether the Group controls
another entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Company. They are de-consolidated from the date
that control ceases.
In June 2018, Grand Vision Media Holdings Plc (“Company”) acquired the
entire issued share capital of GVC Holdings Limited (“legal subsidiary”)
in exchange of issuance of shares to GVC Holdings Limited. As the legal
subsidiary is reversed into the Company (the legal parent), which originally
was a publicly listed cash shell company, this transaction cannot be
considered a business combination, as the Company, the accounting acquiree
does not meet the definition of a business, under IFRS 3 ‘Business
Combinations’. However, the accounting for such capital transaction should
be treated as a share- based payment transaction and therefore accounted for
under IFRS 2 ‘Share-based payment’. Any difference in the fair value of
the shares deemed to have been issued by the GVC Holdings Limited (accounting
acquirer) and the fair value of Grand Vision Media Holdings PLC’s (the
accounting acquiree) identifiable net assets represents a service received by
the accounting acquirer.
Although the consolidated financial information has been issued in the name of
Grand Vision Media Holdings PLC, the legal parent, it represents in substance
continuation of the financial information of the legal subsidiary.
The assets and liabilities of the legal subsidiary are recognized and measured
in the Group financial statements at the pre-combination carrying amounts and
not re-stated at fair value.
The retained earnings and other reserves balances recognized in the Group
financial statements reflect the retained earnings and other reserves balances
of the legal subsidiary immediately before the business combination and the
results of the period from June 2019 to the date of the business combination
are those of the legal subsidiary only.
The equity structure (share capital and share premium) appearing in the Group
financial statements reflects the equity structure of Grand Vision Media
Holdings PLC the legal parent. This includes the shares issued in order to
affect the business combination.
2.5. Available-for-sale investments
Available-for-sale investments represent an investment in the securities. At
the end of each reporting period the fair value is remeasured, with any
resultant gain or loss being recognised in other comprehensive income and
accumulated separately in equity in the fair value reserve. As an exception to
this, investments in equity securities that do not have a quoted price in an
active market for an identical instrument and whose fair value cannot
otherwise be reliably measured are recognised in the statement of financial
position at cost less impairment losses. Dividend income from equity
securities and interest income from debt securities calculated using the
effective interest method are recognised in profit or loss in accordance with
the policies. Foreign exchange gains and losses resulting from changes in the
amortised cost of debt securities are also recognised in profit or loss.
When the investments are derecognised or impaired, the cumulative gain or loss
recognised in equity is reclassified to profit or loss. Investments are
recognised/derecognised on the date GVMH PLC and its subsidiaries commits to
purchase/sell the investments or they expire.
2.6. Property, plant and equipment
The property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses. Gains or losses arising from the
retirement or disposal of an item of property, plant and equipment are
determined as the difference between the net disposal proceeds and the
carrying amount of the item and are recognised in profit or loss on the date
of retirement or disposal.
Depreciation is calculated to write off the cost of items of property, plant
and equipment, less their estimated residual value, if any, using the
straight-line method over their estimated useful lives as follows:
Display panels and CMS 30% - 33.33%
Computer equipment 30% - 33.33%
Furniture’s and fixtures 30% - 33.33%
Leasehold improvements 30% - 50%
Both the useful life of an asset and its residual value, if any, are reviewed
annually.
The carrying value of the property, plant and equipment is compared to the
higher of value in use and the fair value less costs to sell. If the carrying
value exceeds the higher of the value in use and fair value less the costs to
sell the asset, then the asset is impaired and its value reduced by
recognising an impairment provision.
2.7. Impairment of non-financial assets, other than inventories
At the end of each reporting period, property, plant and equipment and
investments in a subsidiary are reviewed to determine whether there is any
indication that those assets have suffered an impairment loss. If there is an
indication of possible impairment, the recoverable amount of any affected
asset (or GVC Holdings Ltd and its subsidiaries of related assets) is
estimated and compared with its carrying amount. If an estimated recoverable
amount is lower, the carrying amount is reduced to its estimated recoverable
amount, and an impairment loss is recognised immediately in profit or loss.
If an impairment loss subsequently reverses, the carrying amount of the asset
(or GVC Holdings Ltd and its subsidiaries of related assets) is increased to
the revised estimate of its recoverable amount, but not in excess of the
amount that would have been determined had no impairment loss been recognised
for the asset (GVC Holdings Ltd and its subsidiaries of related assets) in
prior years. A reversal of an impairment loss is recognised immediately in
profit or loss.
2.8. Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is
calculated using the weighted average cost formula and comprises all costs of
purchase, costs of conversion and other costs incurred in bringing the
inventories to their present location and condition. Net realisable value is
the estimated selling price in the ordinary course of business less the
estimated costs to completion and the estimated costs necessary to make the
sale.
When inventories are sold, the carrying amount of those inventories is
recognised as an expense in the period in which the related revenue is
recognised. The amount of any write-down of inventories to net realisable
value and all losses of inventories are recognised as an expense in the period
the write down or loss occurs. The amount of any reversal of any write-down of
inventories is recognised as a reduction in the amount of inventories
recognised as an expense in the period in which the reversal occurs.
2.9. Trade and other receivables
The Group classifies all its financial assets as trade and other receivables.
The classification depends on the purpose for which the
financial assets were acquired.
Trade receivables and other receivables that have fixed or determinable
payments that are not quoted in an active market are classified as loans and
receivables financial assets. Loans and receivables financial assets are
measured at amortised cost using the effective interest method, less any
impairment loss.
The Group’s loans and receivables financial assets comprise other
receivables (excluding prepayments) and cash and cash equivalents included in
the Statement of Financial Position.
2.10. Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balance. Bank overdrafts that
are repayable on demand and form an integral part of GVMH PLC’s cash
management are also included as a component of cash and cash equivalents for
the purpose of the consolidated cash flow statement.
2.11. Trade and other payables
Trade and other payables are initially recognised at fair value. They are
subsequently measured at amortised cost using the effective interest method
unless the effect of discounting would be immaterial, in which case they are
stated at cost.
2.12. Shareholders loan
Shareholders loans are initially recognised at fair value. They are
subsequently measured at amortised cost using the effective interest method.
The difference between the fair value and the carrying amortised cost (i.e.
the effective interest portion) is first recognized in equity as capital
contribution reserve.
2.13. Employee benefits
Short-term benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary
benefits are accrued in the period in which the associated services are
rendered by employees of the Group.
2.14. Taxation
(i) Current tax
The tax currently payable is based on taxable profit for the period. Taxable
profit differs from ‘profit before tax’ as reported in the statement of
profit or loss because of items of income or expense that are taxable or
deductible in other periods and items that are never taxable or deductible.
Grand Vision Media Holding Plc’s current tax is calculated using rates that
have been enacted during the reporting period
(ii) Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the statement of financial position differs from
its tax base, except for differences arising on:
• the initial recognition of goodwill;
• the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of the
transaction affects neither accounting or taxable profit; and
• investments in subsidiaries where the Group is able to
control the timing of the reversal of the difference and it is probable that
the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantially enacted by the balance sheet date and are
expected to apply when the deferred tax liabilities or assets are settled or
recovered. Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities.
The Group is entitled to a tax deduction on the exercise of certain employee
share options. A share-based payment expense is recorded in the income
statement over the period from the grant date to the vesting date of the
relevant options. As there is a temporary difference between the accounting
and tax bases, a deferred tax asset may be recorded. The deferred tax asset
arising on share option awards is calculated as the estimated amount of tax
deduction to be obtained in the future (based on the Group’s share price at
the balance sheet date) pro-rated to the extent that the services of the
employee have been rendered over the vesting period. If this amount exceeds
the cumulative amount of the remuneration expense at the statutory rate, the
excess is recorded directly in equity, against retained earnings. Similarly,
current tax relief in excess of the cumulative amount of the Share-based
payments expense at the statutory rate is also recorded in retained earnings.
2.15. Provision and contingent liabilities
Provisions are recognised for other liabilities of uncertain timing or amount
when GVMH PLC and its subsidiaries or GVMH PLC has a legal or constructive
obligation arising as a result of a past event, it is probable that an outflow
of economic benefits will be required to settle the obligation and a reliable
estimate can be made. Where the time value of money is material, provisions
are stated at the present value of the expenditure expected to settle the
obligation.
Where it is not probable that an outflow of economic benefits will be
required, or the amount cannot be estimated reliably, the obligation is
disclosed as a contingent liability, unless the probability of outflow of
economic benefits is remote. Possible obligations, whose existence will only
be confirmed by the occurrence or non-occurrence of one or more future events
are also disclosed as contingent liabilities unless the probability of outflow
of economic benefits is remote.
2.16. Revenue recognition
After the adoption of IFRS 15, the company recognise revenue from contracts
with customers when (or as) the company satisfies a performance obligation by
transferring a promised good or service (i.e., an asset) to a customer. An
asset is transferred When (or as) the customer obtains control of that asset.
When (or as) a performance obligation is satisfied, the company recognises as
revenue the amount of the transaction price (which includes estimates of
variable consideration that are constrained in accordance with IFRS 15) that
is allocated to that performance obligation. Further details of the
company’s revenue and other income recognition policies are as follows:
(i) Service income is recognised as income on a straight-line based over the
term, unless another systematic basis is more representative of the time
pattern of the user’s benefit.
(ii) Barter revenueis recognised only when the goods or services being
exchanged are of a dissimilar nature. Barter revenue is measured at the fair
value of goods or services rendered, adjusted by the amount of cash or cash
equivalents received or paid. If the fair value of the goods or services
rendered cannot be relaibly measured, the revenue is measured at the fair
value of the goods or services received, again adjusted by the amount of cash
or cash equivalents received
(iii) Interest income is recognised on a time-proportion basis using the
effective interest method. When a loan and receivable is impaired, the group
reduces the carrying amount to its recoverable amount, being the estimated
future cash flow discounted at the original effective interest rate of the
instrument, and continues unwinding the discount as interest income. Interest
income on impaired loan and receivables is recognised using the original
effective interest rate.
2.17. Translation of foreign currencies
Foreign currency transactions during the year are translated at the foreign
exchange rates ruling at the transaction dates. Monetary assets and
liabilities denominated in foreign currencies are translated at the foreign
exchange rates ruling at the end of the reporting period. Exchange gains and
losses are recognised in profit or loss.
Non-monetary assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated using the foreign exchange rates
ruling at the transaction dates.
Non-monetary assets and liabilities denominated in foreign currencies that are
stated at fair value are translated using the foreign exchange rates ruling at
the dates the fair value was measured.
The results of foreign operations are translated into Hong Kong dollars at the
exchange rates approximating the foreign exchange rates ruling at the dates of
the transactions. Statement of financial position items, including goodwill
arising on consolidation of foreign operations, are translated into Hong Kong
dollars at the closing foreign exchange rates at the end of the reporting
period. The resulting exchange differences are recognised in other
comprehensive income and accumulated separately in equity in the exchange
reserve.
On disposal of a foreign operation, the cumulative amount of the exchange
differences relating to that foreign operation is reclassified from equity to
profit or loss when the profit or loss on disposal is recognised.
Exchange rates used in these accounts :
GBP/HKD : 10.59
USD/HKD : 7.75
RMB/HKD : 1.12
SGD/HKD : 5.67
2.18. Borrowing costs
Borrowing costs represented a notional interest on shareholders’ loan, which
is accrued on time proportion basis taking into account of the shareholder
loan outstanding and the interest applicable.
2.19. Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
a) Classification
The Group classifies its financial assets in the following measurement
categories:
• those to be measured subsequently at fair value
(either through OCI or through profit or loss); and
• those to be measured at amortised cost.
The classification depends on the Group’s business model for managing the
financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded either in
profit or loss or in OCI. For investments in equity instruments that are not
held for trading, this will depend on whether the Group has made an
irrevocable election at the time of initial recognition to account for the
equity investment at fair value through other comprehensive income (FVOCI).
The Group classifies financial assets as at amortised costs only if both of
the following criteria are met:
• the asset is held within a business model whose
objective is to collect contractual cash flows; and
• the contractual terms give rise to cash flows that are
solely payment of principal and interest.
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that is,
the date on which the Group commits to purchase or sell the asset). Financial
assets are de-recognised when the rights to receive cash flows from the
financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus, in the case of a financial asset not at fair value through profit or
loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain
or loss arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange gains and
losses. Impairment losses are presented as a separate line item in the
statement of profit or loss.
d) Impairment
The Group assesses, on a forward-looking basis, the expected credit losses
associated with any debt instruments carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. For trade receivables, the Group applies the simplified
approach permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
2.20. Segmental analysis
In the opinion of the directors, the group has one class of business being
social media advertising. The groups primary reporting format is determined by
geographical segment. There is currently only one geographical reporting
segment which is People’s Republic of China.
2.21. Leases
Definition of a lease
A contract is, or contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for
consideration.
For contracts entered into or modified or arising from business combinations
on or after the date of initial application, the Group assesses whether a
contract is or contains a lease based on the definition under IFRS 16 at
inception, modification date or acquisition date, as appropriate. Such
contract will not be reassessed unless the terms and conditions of the
contract are subsequently changed.
The Group as a lessee
Allocation of consideration to components of a contract.
For a contract that contains a lease component and one or more additional
lease or non-lease components, the Group allocates the consideration in the
contract to each lease component on the basis of the relative stand-alone
price of the lease component and the aggregate stand-alone price of the
non-lease components and the aggregate stand-alone price of non-lease
components.
Non-lease components are separated from lease component on the basis of their
relative stand-alone prices.
As a practical expedient, leases with similar characteristics are accounted on
a portfolio basis when the Group reasonably expects that the effects on the
consolidated financial statements would not differ materially from individual
leases within the portfolio.
Short-term leases
The Group applies the short-term lease recognition exemption to leases that
have a lease term of 12 months or less from the commencement date and do not
contain a purchase option. Lease payments on short-term leases are recognised
as expense on a straight-line basis or another systematic basis over the lease
term.
Right-of-use assets
The cost of right-of-use asset includes:
? the amount of the initial measurement of the lease liability;
? any lease payments made at or before the commencement date, less any lease
incentives received;
? any initial direct costs incurred by the Group; and
? an estimate of costs to be incurred by the Group in dismantling and
removing the underlying assets, restoring the site on which it is located or
restoring the underlying asset to the condition required by the terms and
conditions of the lease.
Right-of-use assets are measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any remeasurement of lease
liabilities.
Right-of-use assets in which the Group is reasonably certain to obtain
ownership of the underlying leased assets at the end of the lease term are
depreciated from commencement date to the end of the useful life. Otherwise,
right-of-use assets are depreciated on a straight-line basis over the shorter
of its estimated useful life and the lease term.
The Group presents right-of-use assets as a separate line item on the
consolidated statement of financial position.
Refundable rental deposits
Refundable rental deposits paid are accounted under HKFRS 9 and initially
measured at fair value. Adjustments to fair value at initial recognition are
considered as additional lease payments and included in the cost of
right-of-use assets.
Lease liabilities
When recognising the lease liabilities for leases previously classified as
operating leases, the Group has applied incremental borrowing rates of the
relevant group entities at the date of initial application. The incremental
borrowing rates applied by the relevant group entities.
The lease payments include:
? fixed payments (including in-substance fixed payments) less any lease
incentives receivable;
? variable lease payments that depend on an index or a rate, initially
measured using the index or rate as at the commencement date;
? amounts expected to be payable by the Group under residual value
guarantees; • the exercise price of a purchase option if the Group is
reasonably certain to exercise the option; and
? payments of penalties for terminating a lease, if the lease term reflects
the Group exercising an option to terminate the lease.
The Group presents lease liabilities as a separate line item on the
consolidated statement of financial position.
The Group as a lessor
Classification and measurement of leases
Leases for which the Group is a lessor are classified as finance or operating
leases. Whenever the terms of the lease transfer substantially all the risk
and rewards incidental to ownership of an underlying asset to the lessee, the
contract is classified as a finance lease. All other leases are classified as
operating lease.
Amounts due from lessees under finance leases are recognised as receivables at
commencement date at amounts equal to net investments in the leases, measured
using the interest rate implicit in the respective lease. Initial direct costs
(other than those incurred by manufacturer or dealer lessors) are included in
the initial measurement of the net investments in the leases. Interest income
is allocated to accounting periods so as to reflect a constant periodic rate
of return on the Group’s net investment outstanding in respect of the
leases.
Sublease
When the Group is an intermediate lessor, it accounts for the head lease and
the sublease as two separate contracts. The sublease is classified as a
finance or operating lease by reference to the right-of-use asset arising from
the head lease, not with reference to the underlying asset.
2.22. Government grants
Government grants are not recognised until there is reasonable assurance that
the Group will comply with the conditions attaching to them and that the
grants will be received.
Government grants are recognised in profit or loss on a systematic basis over
the periods in which the Group recognises as expenses the related costs for
which the grants are intended to compensate. Specifically, government grants
whose primary condition is that the Group should purchase, construct or
otherwise acquire non-current assets are recognised as deferred income in the
consolidated statement of financial position and transferred to profit or loss
on a systematic and rational basis over the useful lives of the related
assets.
Government grants that are receivable as compensation for expenses or losses
already incurred or for the purpose of giving immediate financial support to
the Group with no future related costs are recognised in profit or loss in the
period in which they become receivable.
3. Summary of Critical Accounting Estimates and judgements
The preparation of financial information in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires the Directors
to exercise their judgement in the process of applying the accounting policies
which are detailed above. These judgements are continually evaluated by the
Directors and management and are based on historical experience and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances.
The key estimates and underlying assumptions concerning the future and other
key sources of estimation uncertainty at the statement of financial position
date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial period
are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods.
The estimates and judgements which have a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities, as well
as the recognition of revenue, within the next financial year are discussed
below:
• Recognising appropriate revenue in line with performance obligations
Management identifies the performance obligations associated with each
contract and then exercises judgement to establish an appropriate percentage
of the total transaction price to recognise once each identified performance
obligation is successfully completed.
• Useful lives of depreciable assets
Management reviews the useful lives and residual value of depreciable assets
at each reporting date to ensure that the useful lives represent a reasonable
estimate of likely period of benefit to the Group. Tangible fixed assets are
depreciated over their useful lives taking into account of residual values,
where appropriate. The actual lives of the assets and residual values are
assessed annually and may vary depending on a number of factors. In
re-assessing asset lives, factors such as technological innovation, product
life cycles and maintenance programmes are taken into account. Residual value
assessments consider issues such as future market conditions, the remaining
life of the asset and projected disposal values.
Company
• Impairment of investment in subsidiary and intercompany balances
Management reviews the expected future cashflows from the cash generating unit
which are discounted to their present value using a pre-tax discount rate
estimate of likely period of benefit to the Group. The estimation of future
cashflows is dependent on various factors and may vary . A full impairment
against the carrying value has been booked in these financial statements.
4. Revenue
Analysis of GVMH PLC and its subsidiaries’ revenue is as follows:
Year ended Year ended Year ended Year ended
31 December 2020 31 December 2019 31 December 2020 31 December 2019
HK$’000 HK$’000 HK$’000 HK$’000
Revenue
Advertising fee income 49 5,593 - -
Digital marketing income 2,627 6,441 - -
Other 3,151 - - -
5,827 12,034 - -
Other income
Sundry income 1,022 184 - -
Government grant 698
1,720 184 - -
7,547 12,218 - -
Other Income represents rent, management and ad hoc professional services
provided during the year.
5. Finance costs
Year ended Year ended Year ended Year ended
31 December 2020 31 December 2019 31 December 2020 31 December 2019
HK$’000 HK$’000 HK$’000 HK$’000
Finance costs
Interest expense on lease liabilities 31 7
Interest on shareholder loans - 216
Reverse on the overprovided shareholder loans (142) - - -
(111) 223
6. Administrative expenses
Year ended Year ended Year ended Year ended
31 December 2020 31 December 2019 31 December 2020 31 December 2019
HK$’000 HK$’000 HK$’000 HK$’000
Audit fees- Company and group 318 370 168 209
Business development and marketing 4 181 - -
Share based payment 975 1,319 - 1,320
Depreciation 843 2,350 - -
RTO, Legal and professional fee 607 490 281 304
Office rental 228 953 - -
Overseas travelling 11 153 - -
Other 2,203 2,838 280 239
Administrative expenses 5,189 8,655 729 2,072
Director’s fees and emoluments* 1,320 1,380 600 521
Wages and Salaries 3,330 6,407 - -
9,839 16,442 1,329 2,593
*No pension contributions or other benefits Employee numbers No. No. No. No.
Management 3 4 2 3
Operations 16 18 - -
19 22 2 3
7. Income tax expense
No Hong Kong profits tax provision made in the accounts as GVMH PLC and its
subsidiaries’ do not have any assessable profits for the period.
Reconciliation between tax expenses and accounting profit at applicable tax
rates of 16.5%:
Year ended Year ended Year ended Year ended
31 December 2020 31 December 2019 31 December 2020 31 December 2019
HK$’000 HK$’000 HK$’000 HK$’000
(Loss) / profit before tax (10,050) (15,095) (134,412) (2,593)
Notional tax on (loss) / profit before taxation, calculated at the rates applicable to (loss) / profit in the countries concerned (1,658) (2,491) (22,178) (428)
Tax effect of non-taxable income - - - -
Tax effect of not recognised tax loss 1,658 2,491 22,178 428
Actual tax expenses - - - -
GVMH PLC and its subsidiaries has not recognised deferred tax assets of
HK$3,102,251 (2019: HK$3,029,159) in respect of accelerated depreciation over
capital allowances. No deferred tax asset has been recognised on the
accumulated tax losses of HK$18,801,523 (2019:HK$18,358,340) as the
availability of future taxable profits against which the assets can be
utilised is uncertain at 31 December 2020.
The tax losses can be carried forward to offset against the taxable profits of
subsequent years for up to five years from the year in which they were
incurred or there is no restriction on their expiry, depending on the tax
jurisdiction concerned.
8. Earnings/ (Loss) per share
The calculation of basic earnings per share is based on GVMH PLC and its
subsidiaries’ loss attributable to shareholders of GVMH PLC and weighted
average number of shares in issue during the year, details are as follows:
Year ended Year ended Year ended Year ended
31 December 2020 31 December 2019 31 December 2020 31 December 2019
HK$’000 HK$’000 HK$’000 HK$’000
Profit/loss attributable to GVMH PLC (10,050) (15,095) (134,412) (2,593)
Weighted average number of shares 96,287,079 96,287,079 96,287,079 96,287,079
Basic and diluted loss per share HK$ (0.10) (0.16) (1.40) (0.027)
There were no potential dilutive ordinary shares in existence during the
period ended 31 December 2020 or the years ended 31 December 2019, and hence
diluted earnings per share is the same as the basic earnings per share.
Property, plant and equipment Displays panels and CMS Computer equipment Furniture, fixtures & equipment Leasehold improvement Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Cost
At 31 December 2018 16,278 288 301 82 16,949
Additions during the year 2019 - 9 - - 9
Exchange realignment (58) (1) - - (59)
At 31 December 2019 16,220 296 301 82 16,899
Additions during the year 2020 - - 42 206 248
Write-off - - - (36) (36)
Exchange realignment 166 2 - - 168
At 31 December 2020 16,386 298 343 252 17,279
Accumulated depreciation
At 31 December 2018 14,173 220 296 76 14,765
Charge for the year 2019 1,965 45 2 6 2,018
Written back on disposal (49) - - - (49)
At 31 December 2019 16,089 265 298 82 16,734
Charge for the year 2020 129 29 15 69 242
Write-off - - - (36) (36)
Exchange realignment 168 1 - - 170
At 31 December 2020 16,386 295 313 115 17,109
Net carrying amount
At 31 December 2020 - 3 29 137 170
At 31 December 2019 131 31 3 - 165
9. Inventories
As at As at As at As at
31 December 2020 31 December 2019 31 December 2020 31 December 2019
Inventories HK$’000 HK$’000 HK$’000 HK$’000
Goods - - - -
Online resources - 1,004
- 1,004 - -
As at 31 December 2020, no provision for impairment on goods for the group has
been made. The cost of inventory recognised as expenses is HK$1,004k (2019:
HK$703k).
10. Right of use assets
Set out below are the carrying amounts of right-of-use assets recognised and
the movements during the year:
Right of use assets Leasehold improvement
HK$’000
At 1/1/2019 308
Additions during the year 2019 1,734
Depreciation (332)
At 1/1/2020 1,710
Additions during the year 2020 -
Depreciation (602)
At 31/12/2020 1,108
11. Investments in Subsidiaries
Company 2020 2019
HK$’000 HK$’000
Cost
At 1 January 114,572 114,572
Loans to subsidiaries 18,512 18,107
??????? ???????
At 31 December 133,084 132,679
??????? ???????
Impairment
At 1 January - -
Loans to subsidiaries (18,512) -
Investment in subsidiaries (114,572) -
??????? ???????
At 31 December (133,084) -
??????? ???????
Net Carrying Amount - 132,679
_________ _________
See note 25 for list of subsidiaries and their respective holdings.
The recoverable amount of the investments has been determined to be the value
in use of the cash flows generated from the continuing operations of the GVC
Holdings Limited and its subsidiaries. In performing this assessment,
management has applied the following assumptions and estimates:
· cash flows have been projected over a period of five years from 31
December 2020, which management considers appropriate due to the nature of
its advertising services and related income of medical equipment;
· cash inflow projections reflect the following key assumptions:
· revenues from the continued performance of marketing and advertising
services for customers and commission revenues from medical equipment;
· revenues in the short to medium term are based on contracted amounts,
contracts currently in negotiation and estimates of services to be performed;
· cash outflows, which include contract delivery costs, operating
expenses, administrative expenses and capital spend are assumed to be
consistent with current experience;
· revenue and cost of sales from 2021 are forecasted for a year on year
growth of 0%, which is management’s estimate of the average growth for the
principal geography in which the entity operates; and
· a pre-tax discount rate of 5% has been applied in discounting cash
flows to their present value, which has been benchmarked against available
sources for comparable companies and geographical location of GVC Holdings
Limited.
Cash flow projections are most sensitive to the assumptions regarding:
· commission revenue from new contracts in completion;
- Growth in online marketing
· Changes to the level of panels currently in display at cinemas;
· Closing price for the panel per 2-week segments; and
· changes in the discount rate.
At 31 December 2020, there was no headroom in respect of the carrying value of
the parent company’s investment in GVC Holdings Limited resulting in an
impairment of the investment in GVC Holdings Limited would be necessary.
12. Trade and other receivables
Note: Amounts due from related companies are unsecured, interest-free and
repayable on demand.
Receivables that was not impaired was as follows:
As at As at As at As at
31 December 2020 31 December 2019 31 December 2020 31 December 2019
HK$’000 HK$’000 HK$’000 HK$’000
Prepayments 400 395 55 52
Amount due from Subsidiaries - - - 18,107
Neither past due or nor impaired 3,549 6,403 - -
3,949 6,798 55 18,159
Note: Trade receivables are stated after provisions for impairment of
HK$3,549k (2019: HK$6,403k). The directors consider that the carrying amount
of receivables is not materially different to their fair value. Amounts owed
by subsidiaries are stated after provisions for impairment of HK$18,512k
(2019: HK$Nil)
13. Cash and cash equivalents
As at As at As at As at
31 December 2020 31 December 2019 31 December 2020 31 December 2019
Cash and cash equivalents HK$’000 HK$’000 HK$’000 HK$’000
Cash at bank and in hand 855 510 43 114
855 510 43 114
14. Trade and other payables
As at As at As at As at
31 December 2020 31 December 2019 31 December 2020 31 December 2019
Trade and other payables HK$’000 HK$’000 HK$’000 HK$’000
Trade payables 14,282 13,051 1,894 862
Other payables - - - -
Total trade and other payables 14,282 13,051 1,894 862
15. Share based payments
The Group has a share ownership compensation scheme for Directors and Senior
employees of the Group. In accordance with the provisions of the
plan, Directors and Senior employees may be granted options to purchase
ordinary shares in the Company.
The company issued options over 12,000,000 ordinary shares on 19 June 2018.
The options vest annually over a 3 year period to 31 December 2020 and can be
exercised at 22.5p per share during this period. 12,000,000 options have
vested as at 31 December 2020.
The fair value of equity-based share options granted is estimated at the date
of grant using the Black-Scholes pricing model, taking into account the terms
and conditions upon which the options have been granted. The calculated fair
value of share options charged to the Group and Company financial statements
in the year is HK$975k.(2019: HK$1,320k)
The following are the inputs to the model for the options granted during the
prior year:
Share Options 2020 Share Options 2019
Exercise price 0.225p 0.15p
Share price at date of grant 0.15p 0.15p
Risk free rate 1.04% 1.04%
Volatility 50% 50%
Expected Life 3 Years 3 Years
Fair Value 0.0229999 0.03626798
No. of Options WAEP
As at 31 December 2018 4,000,000 0.15
Vested during the year 4,000,000 0.17
Forfeited/cancelled during the year - -
Exchanged for shares - -
As at 31 December 2019 8,000,000 0.16
Vested during the year 4,000,000 0.225
Forfeited/cancelled during the year - -
Exchanged for shares - -
As at 31 December 2020 12,000,000 0.1817
16. Convertible loan
On 19 July 2019 , the company issues £670k of convertible loan notes, which
are redeemable on 1 July 2021 or convertible into shares at 15p per share at
any time before this date.
The holders of the loan notes have agreed to defer repayment of the loan until
the Group has the funds available for repayment, and renegotiate the repayment
date.
Subsequent measurement at 2020 2019
Term of loan in years 1.5 1.5
Annual interest rate for equivalent non-convertible 12% 12%
Principal £670,000 £670,000
Present value of principal at HKD HKD5,968,259 HKD5,821,901
17. Shareholder loans
As at As at As at As at
31 December 2020 31 December 2019 31 December 2020 31 December 2019
Shareholders' loan HK$’000 HK$’000 HK$’000 HK$’000
Shareholders' loan at fair value 9,227 8,750 477 -
Capital contribution reserve arising from effective interest portion (844) (844) - -
Accrued effective interest paid to shareholders 844 987 - -
Shareholder's loan at amortised cost 9,227 8,893 477 -
The shareholders' loan is unsecured, interest-free and repayable on demand.
These loans will not be repaid until after 31 December 2021, and when funds
permit.
As the shareholders' loan is unsecured, interest-free and repayable on demand,
the directors assumes that the shareholder's loan is expected to repay in year
2023 and the available market interest rate for shareholder's loan of the same
kind is at the best landing rate in Hong Kong plus 1% per annum which is also
used to calculate the effective interest portion of such.
18. Share Capital
(a) Issued share capital
Allotted, called up and fully paid ordinary shares of 10p each Number of shares Share Capital Share Capital Share Premium Share Premium
£ HK$ £ HK$
Balance at 31 December 2019 96,287,079 9,628,708 96,017,186 4,422,954 44,105,565
New Share issue - - - - -
Balance at 31 December 2020 96,287,079 9,628,708 96,017,186 4,422,954 44,105,565
(b) Capital management
GVMH PLC and its subsidiaries’ objective when managing capital are to
safeguard GVMH PLC and its subsidiaries’ ability to continue as a going
concern, so that it can continue to provide returns for shareholders and
benefit for other stakeholders, and to provide an adequate return to
shareholders.
GVMH PLC and its subsidiaries manages the capital structure and makes
adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the
capital structure, GVMH PLC and its subsidiaries’ may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new
shares, or sell assets to reduce debt. No changes were made in the objectives,
policies and processes during the year/period of 2019 and 2020.
GVMH PLC and its subsidiaries’ monitors’ capital using a gearing ratio,
which are calculated by dividing consolidated debts by consolidated total
shareholder's equity. The Group’s policy is to keep the gearing ratio at a
reasonable level. The Group’s gearing ratio was54% , and 75% as at 31
December 2020 and 2019 respectively.
19. Financial instruments
GVMH PLC and its subsidiaries has classified its financial assets in the
following categories:
As at As at As at As at
31 December 2020 31 December 2019 31 December 2020 31 December 2019
Loans and receivables HK$’000 HK$’000 HK$’000 HK$’000
Accounts and other receivables 3,549 6,403 - -
Amounts due from related companies - - - -
Deposits and prepayments 400 395 55 52
Cash and cash equivalents 855 510 43 114
Loans and receivables 4,804 7,308 98 166
As at As at As at As at
31 December 2020 31 December 2019 31 December 2020 31 December 2019
Financial liabilities at amortised cost HK$’000 HK$’000 HK$’000 HK$’000
Trade and other payables 14,082 13,051 1,694 862
Deposits received 93 - - -
Shareholders' loan 15,195 14,715 6,444 5,822
Lease liability (IFRS16) 1115 1,761 - -
Amount due to a director 3,567 515 - -
Financial liabilities at amortised cost 32,937 30,042 8,138 6,684
GVMH PLC and its subsidiaries are exposed to credit risk, liquidity risk and
market risk arising in the normal course of its business and financial
instruments. GVMH PLC and its subsidiaries’ and GVMH PLC’s risk management
objectives, policies and processes mainly focus on minimising the potential
adverse effects of these risks on its financial performance and position by
closely monitoring the individual exposure.
(a) Credit risk
GVMH PLC and its subsidiaries are exposed to credit risk on financial assets,
mainly attributable to trade and other receivables. It sets credit limits on
each individual customer and prior approval is required for any transaction
exceeding that limit. The customer with sound payment history would accumulate
a higher credit limit. In addition, the overseas customers would normally be
required to transact with GVMH PLC and its subsidiaries’ and GVMH PLC by
letter of credit in order to minimise GVMH PLC and its subsidiaries’ credit
risk exposure.
At 31 December 2020, GVMH PLC and its subsidiaries has no concentration of
risk and the maximum exposure to credit risk is represented by the carrying
amount of each financial asset.
(b) Liquidity risk
GVMH PLC and its subsidiaries is exposed to liquidity risk on financial
liabilities. It manages its funds conservatively by maintaining a comfortable
level of cash and cash equivalents in order to meet continuous operational
need.
Liquidity risk Not later than one month Later than one month and not later than 5 years Carrying amount
As at 31 December 2020
Trade and other payables 14,282 - 14,282
Deposits received 92 - 92
Shareholders' loan – current 2,946 - 2,946
Convertible bonds - 5,968 5,968
Shareholders’ loan – non-current - 9,227 9,227
Amount due to Director 3,567 - 3,567
20,887 15,195 36,082
As at 31 December 2019
Trade and other payables 13,051 - 13,051
Deposits received - - -
Shareholders' loan - current 83 83
Convertible bonds - 5,822 5,822
Shareholders’ loan – non-current - 8,893 8,893
Amount due to Director 515 - 515
13,649 14,715 28,364
GVMH PLC
As at 31 December 2020
Trade and other payables 1,894 - 1,894
Convertible bonds - 5,968 5,968
Shareholders' loan – non current 477 477
1,894 6,445 8,339
As at 31 December 2019
Trade and other payables 862 - 862
Convertible bonds - 5,822 5,822
Shareholders' loan – non current - - -
862 5,822 6,684
(c) Interest rate risk
The Group has no exposure on fair value interest rate risk. It also has
exposure on cash flow interest rate risk which is mainly arising from its
deposits with banks.
GVMH PLC and its subsidiaries mainly holds fixed deposits with banks with
maturity within 3 months and the exposure is considered not significant. In
consequence, no material exposure on fair value interest rate risk is
expected. Even that, GVMH PLC closely monitors the fair value fluctuation of
the investments and disposes of them in case of significant increase in
interest rate is foreseen.
Sensitivity analysis
At 31 December 2020, if interest rates as that date had been 100 basis points
lower/higher with all other variables held constant, GVMH PLC loss for the
year would have been HK$151,950 (2019: HK$80,427) higher/lower.
(d) Currency risk
GVMH PLC and its subsidiaries purchases and sells in various foreign
currencies, mainly US dollars and RMB that expose it to currency risk arising
from such purchases and sales and the resulting receivables and the payables.
GVMH PLC and its subsidiaries closely and continuously monitors the exposure
on currency risk. Since HK dollars are pegged to US dollars, there is no
significant exposure expected on US dollars transactions and balances.
In respect of purchases and payables, GVMH PLC and its subsidiaries controls
its volume of purchase orders to a tolerable level and avoids concentrating
the purchases in a single foreign currency by diversifying such foreign
currency risk exposure.
In respect of sales and receivables, GVMH PLC and its subsidiaries sets a
prudent credit limit to individual customers who transact with it in other
foreign currencies. The directors’ approval is required on the exposure to
an individual customer or transaction that exceeds the limit.
20. Leases liabilities
The Group has lease contracts for leasehold land and building used in its
operations. Lease of leasehold land and building generally have lease terms
between 2 to 3 years. The Group's obligations under its leases are secured by
the lessor's title to the lease asset. Generally, the Group is restricted from
assigning and subleasing the leased assets and some contracts require the
Group to maintain certain financial ratios. There are several lease contracts
that include extension and termination options and variable lease payments,
which are further discussed below.
The Group also has certain leases of leasehold land and building with lease
terms of 12 months or less. The Company applies the ‘short-term lease’
recognition exemptions for these leases.
Set out below are the carrying amounts of lease liabilities and the movements during the year:
Lease liabilities HK$’000
At 1 January 2019 310
New Leases 1,734
Accretion of interes t recognised during the year 7
Payment (290)
At 31 December 2019 and 1 January 2020 1,761
New leases -
Accretion of interest recognised during the year 31
Payments (636)
At 31 December 2020 1,156
The following are the amounts recognised in profit or loss:
2020 2019
HK$’000 HK$’000
Interest on lease liabilities 30 7
Depreciation of right-of-use assets 601 332
Expenses relating to short-term leases 228 953
Total amount recognised in profit or loss 860 1,292
The Group had total cash outflows for leases of HK$636K and has non-cash
additions to right-of-use assets and lease liabilities of HK$1,155k for the
year (2019: HK$1,761k).
At the commencement date of the lease, the Company recognises lease
liabilities measured at the present value of lease payments to be made over
the lease term. The lease payments include fixed payments (including
in-substance fixed payments) less any lease incentives receivable, variable
lease payments that depend on an index or a rate, and amounts expected to be
paid under residual value guarantees. The lease payments also include the
exercise price of a purchase option reasonably certain to be exercised by the
Company and payments of penalties for terminating a lease, if the lease term
reflects the Company exercising the option to terminate. The variable lease
payments that do not depend on an index or a rate are recognised as expense in
the period on which the event or condition that triggers the payment occurs.
Between 1 Year Between 2 to 5 Year Over 5 years
HK$’000 HK$’000 HK $’000
At 31 December 2020
Lease Liabilities 32 1,124 -
At 31 December 2019
Lease Liabilities 554 1,180 -
21. Contingent liabilities
At 31 December 2020, GVMH PLC and its subsidiaries did not have any contingent
liabilities.
22. Material related party transactions
Key management personnel compensation
Key management are considered to be the directors of the Company. Details of
their remuneration and equity holdings are disclosed in the Directors Report.
Transactions with subsidiaries
Transactions between the Group and its subsidiaries, which are related
parties, have been eliminated on consolidation. The balance due from
subsidiaries at the year end was HK$18,512k (2019: HK$18,107k). An impairment
of HK$ 18,512k was booked at the year end.
Transactions with shareholders (please include convertible loans and
shareholder loans)
During the year the company recognised interest receivable of HK$143k (2019:
interest payable HK$216k). The balance due from shareholders which included
the shareholders’ loan and convertible bonds at the year end was HK$18,141k
(2019: HK$ 14,798k).
Save as those transactions and balances disclosed elsewhere in these financial
statements with shareholders and directors and Cyber Lion Limited (a company
controlled by Edward Ng and Ajay Rajpal), GVMH PLC and its subsidiaries had no
material transactions with related parties.
23. Event after reporting period
At 31 December 2020, GVMH PLC and its subsidiaries did not have material
non-adjusting events after the report period that have significant impact on
the financial position and operation of the Group.
24. List of subsidiaries
As at 31 December 2020 the following list contains only the particulars of
subsidiaries which principally affected the results, assets or liabilities of
GVMH PLC and its subsidiaries.
Proportion of ownership interest
Name of GVMH PLC Place of incorporation/ operation Particulars of issued and paid-up capital GVMH PLC and subsidiaries effective interest Held by GVMH PLC Held by the subsidiary Principal activities
GVC Holdings Ltd BVI/Hong Kong US$10,862 100% 100% - Investment holdings
Billion Wise Investment Ltd BVI / Hong Kong US$10,862 100.0% - 100% Investment holdings
Founding Technology (Int'l) Ltd Hong Kong HK$10,000 70.0% - 70% Social Media Marketing
Grand Vision Communication Ltd BVI / Hong Kong US$10,843 100% - 100% Investment holdings
(2019:79.87%) (2019:79.87%)
Grand Vision Media Limited Hong Kong HK$1,000,000 100% - 100% Advertising
(2019:79.87%) (2019:79.87%)
Grand Vision Media Network Limited Hong Kong HK$7,824,268 100.0% - 100.0% 3D panel advertising
Grand Vision Media (Technology) (Shenzhen) Ltd PRC/Hong Kong RMB832,987 100% - 100% Advertising
(2019:79.87%) (2019:79.87%)
Ying Interactive Marketing Services Ltd Hong Kong HK$4,900,000 55.0% 55% - Social Media Marketing
Shanghai Hongshi Culture Media Co., Ltd PRC RBM5,874,000 100.0% - 100.0% 3D panel advertising
25. Control
At 31 December 2020, there is no one controlling party.
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