G-Vision International (Holdings) Limited
環 科 國 際 集 團 有 限 公 司
Stock Code : 657
INTERIM REPORT
2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 1 |
CONTENTS | |
Corporate Information | 2 |
Independent Review Report | 3 |
Condensed Consolidated Statement of Profit or Loss | |
and Other Comprehensive Income | 5 |
Condensed Consolidated Statement of Financial Position | 7 |
Condensed Consolidated Statement of Changes in Equity | 9 |
Condensed Consolidated Statement of Cash Flows | 10 |
Notes to the Condensed Consolidated Financial Statements | 11 |
Management Discussion and Analysis | 22 |
Other Information | 26 |
INTERIM REPORT 2019/20
2 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
CORPORATE INFORMATION
DIRECTORS
Executive Directors
Cheng Hop Fai
(Chairman and Managing Director)
Cheng Pak Ming, Judy
Cheng Pak Man, Anita
Cheng Pak Lai, Lily
Independent Non-executive Directors
Leung Tai Chiu
Law Toe Ming
Mark Yiu Tong, William
(resigned on 18 June 2019)
Hung Chi Yuen, Andrew
(appointed on 18 June 2019)
COMPANY SECRETARY
Cheng Pak Ming, Judy
PRINCIPAL BANKERS
The Hongkong and Shanghai Banking
Corporation Limited
Hang Seng Bank Limited
Fubon Bank (Hong Kong) Limited
Industrial and Commercial Bank of
China (Asia) Limited
AUDITOR
RSM Hong Kong
HONG KONG LEGAL ADVISERS
MinterEllison LLP
BERMUDA LEGAL ADVISERS
Conyers Dill & Pearman
REGISTERED OFFICE
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
PRINCIPAL PLACE OF
BUSINESS
Unit 108, 1st Floor East Ocean Centre 98 Granville Road Tsimshatsui East Kowloon
Hong Kong
PRINCIPAL SHARE REGISTRAR MUFG Fund Services (Bermuda)
Limited
4th floor North Cedar House
41 Cedar Avenue
Hamilton HM 12 Bermuda
BRANCH SHARE REGISTRAR
Computershare Hong Kong Investor
Services Limited
46th Floor
Hopewell Centre
183 Queen's Road East
Hong Kong
CORPORATE WEBSITE
www.g-vision.com.hk
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 3 |
INDEPENDENT REVIEW REPORT
TO THE BOARD OF DIRECTORS OF
G-VISION INTERNATIONAL (HOLDINGS) LIMITED (Incorporated in the Bermuda with limited liability)
INTRODUCTION
We have reviewed the interim financial information set out on pages 5 to 21 which comprises the condensed consolidated statement of financial position of the Company and its subsidiaries as at 30 September 2019 and the related condensed consolidated statement of profit or loss, condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and Hong Kong Accounting Standard 34 "Interim Financial Reporting" ("HKAS 34") issued by the Hong Kong Institute of Certified Public Accountants (the "HKICPA"). The directors are responsible for the preparation and presentation of this interim financial information in accordance with HKAS 34. Our responsibility is to express a conclusion on this interim financial information based on our review and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.
SCOPE OF REVIEW
We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the HKICPA. A review of interim financial information consists of making inquires, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
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4 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
CONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that the interim financial information is not prepared, in all material respects, in accordance with HKAS 34.
RSM Hong Kong
Certified Public Accountants
Hong Kong
29 November 2019
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 5 |
The board of directors of G-Vision International (Holdings) Limited (the "Company") announces the unaudited condensed consolidated interim results of the Company and its subsidiaries (the "Group") for the six months ended 30 September 2019, together with the comparative results. The condensed consolidated interim results have not been audited, but have been reviewed by the Company's auditor, RSM Hong Kong, and the Company's audit committee.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the six months ended 30 September 2019
Six months ended | |||||||
30 September | |||||||
2019 | 2018 | ||||||
Note | HK$'000 | HK$'000 | |||||
(Unaudited) | (Unaudited) | ||||||
Revenue | 4 | 36,579 | 41,929 | ||||
Cost of inventories consumed | (11,604) | (13,477) | |||||
Gross profit | 24,975 | 28,452 | |||||
Other income and other gains and losses | 890 | 790 | |||||
Staff costs | (16,128) | (17,686) | |||||
Operating lease rentals | - | (8,707) | |||||
Depreciation | (7,949) | (21) | |||||
Other operating expenses | (8,982) | (9,514) | |||||
Loss from operations | (7,194) | (6,686) | |||||
Finance costs | (2,387) | - | |||||
Loss before tax | (9,581) | (6,686) | |||||
Income tax expense | 5 | - | - | ||||
Loss for the period attributable to | |||||||
owners of the Company | 6 | (9,581) | (6,686) | ||||
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6 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Continued)
For the six months ended 30 September 2019
Six months ended | |||||||
30 September | |||||||
2019 | 2018 | ||||||
Note | HK$'000 | HK$'000 | |||||
(Unaudited) | (Unaudited) | ||||||
Other comprehensive income: | |||||||
Items that will not be reclassified | |||||||
to profit or loss: | |||||||
Fair value changes of equity | |||||||
investments at fair value through | |||||||
other comprehensive income | |||||||
("FVTOCI") | (188) | (298) | |||||
Items that may be reclassified subsequently | |||||||
to profit or loss: | |||||||
Fair value changes of debt instruments | |||||||
at FVTOCI | - | (79) | |||||
Other comprehensive income for the | |||||||
period, net of tax | (188) | (377) | |||||
Total comprehensive income for the | |||||||
period attributable to owners of the | |||||||
Company | (9,769) | (7,063) | |||||
Loss per share | |||||||
- Basic (HK$ cents) | 8 | (0.49) | (0.34) | ||||
- Diluted (HK$ cents) | N/A | N/A | |||||
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 7 |
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION | |||||||
As at 30 September 2019 | |||||||
As at | As at | ||||||
30 September | 31 March | ||||||
2019 | 2019 | ||||||
Note | HK$'000 | HK$'000 | |||||
(Unaudited) | (Audited) | ||||||
Non-current assets | |||||||
Property, plant and equipment | 9 | 3,729 | 2,104 | ||||
Right-of-use assets | 45,407 | - | |||||
Property rental deposits | 4,214 | 5,294 | |||||
Total non-current assets | 53,350 | 7,398 | |||||
Current assets | |||||||
Inventories | 1,275 | 1,052 | |||||
Trade and other receivables | 10 | 1,935 | 1,660 | ||||
Property rental deposits | 1,080 | - | |||||
Equity instruments as at FVTOCI | 11 | 1,150 | 1,338 | ||||
Pledged bank deposits | 415 | 415 | |||||
Short-term bank deposits | |||||||
- with original maturity | |||||||
over three months | - | 2,503 | |||||
- with original maturity | |||||||
within three months | 60,532 | 61,464 | |||||
Bank and cash balances | 5,522 | 12,273 | |||||
Total current assets | 71,909 | 80,705 | |||||
TOTAL ASSETS | 125,259 | 88,103 | |||||
EQUITY | |||||||
Share capital | 12 | 194,631 | 194,631 | ||||
Reserves | (123,805) | (114,341) | |||||
Total equity | 70,826 | 80,290 | |||||
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8 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION (Continued)
As at 30 September 2019
As at | As at | |||||
30 September | 31 March | |||||
2019 | 2019 | |||||
Note | HK$'000 | HK$'000 | ||||
(Unaudited) | (Audited) | |||||
Non-current liabilities | ||||||
Lease liabilities | 35,670 | - | ||||
Total non-current liabilities | 35,670 | - | ||||
Current liabilities | ||||||
Trade and other payables | 13 | 7,202 | 7,813 | |||
Lease liabilities | 11,561 | - | ||||
Total current liabilities | 18,763 | 7,813 | ||||
TOTAL EQUITY AND | ||||||
LIABILITIES | 125,259 | 88,103 | ||||
Net current assets | 53,146 | 72,892 | ||||
Total assets less current liabilities | 106,496 | 80,290 | ||||
Approved by the Board of Directors on 29 November 2019:
Cheng Hop Fai | Cheng Pak Man, Anita |
Director | Director |
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 9 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 September 2019
Attributable to owners of the Company | ||||||||||||||||
Investment | Share | |||||||||||||||
Share | Share | Capital | revaluation | options | Accumulated | |||||||||||
capital | premium | reserve | reserve | reserve | losses | Total | ||||||||||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||||||||||
At 1 April 2018 (audited) | 194,631 | 88,794 | 84,123 | 327 | 1,470 | (277,058) | 92,287 | |||||||||
Total comprehensive income | ||||||||||||||||
for the period | - | - | - | - | - | (6,686) | (6,686) | |||||||||
Change in fair value of equity | ||||||||||||||||
instruments at FVTOCI | - | - | - | (298) | - | - | (298) | |||||||||
Change in fair value of debt | ||||||||||||||||
instruments at FVTOCI | - | - | - | (79) | - | - | (79) | |||||||||
Share-based payments | - | - | - | - | 736 | - | 736 | |||||||||
Changes in equity for the period | - | - | - | (377) | 736 | (6,686) | (6,327) | |||||||||
At 30 September 2018 (unaudited) | 194,631 | 88,794 | 84,123 | (50) | 2,206 | (283,744) | 85,960 | |||||||||
At 1 April 2019 (audited) | 194,631 | 88,794 | 84,123 | 39 | 2,563 | (289,860) | 80,290 | |||||||||
Total comprehensive income | ||||||||||||||||
for the period | - | - | - | - | - | (9,581) | (9,581) | |||||||||
Change in fair value of equity | ||||||||||||||||
instruments at FVTOCI | - | - | - | (188) | - | - | (188) | |||||||||
Share-based payments | - | - | - | - | 305 | - | 305 | |||||||||
Changes in equity for the period | - | - | - | (188) | 305 | (9,581) | (9,464) | |||||||||
At 30 September 2019 (Unaudited) | 194,631 | 88,794 | 84,123 | (149) | 2,868 | (299,441) | 70,826 | |||||||||
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10 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 September 2019
Six months ended | ||||||
30 September | ||||||
2019 | 2018 | |||||
HK$'000 | HK$'000 | |||||
(Unaudited) | (Unaudited) | |||||
Net cash used in operating activities | (6,571) | (7,058) | ||||
Purchases of property, plant and equipment | (1,978) | (24) | ||||
Withdrawal of short-term bank deposits with | 2,503 | |||||
original maturity over three months | 52,426 | |||||
Placement of short-term bank deposits with | - | |||||
original maturity over three months | (13,953) | |||||
Interest received | 750 | 790 | ||||
Net cash generated from investing | ||||||
activities | 1,275 | 39,239 | ||||
Finance costs | (2,387) | - | ||||
Net cash used in financing activities | (2,387) | - | ||||
NET (DECREASE)/INCREASE IN CASH | ||||||
AND CASH EQUIVALENTS | (7,683) | 32,181 | ||||
CASH AND CASH EQUIVALENTS AT | ||||||
BEGINNING OF THE PERIOD | 73,737 | 17,781 | ||||
CASH AND CASH EQUIVALENTS AT | ||||||
END OF THE PERIOD | 66,054 | 49,962 | ||||
ANALYSIS OF CASH AND CASH | ||||||
EQUIVALENTS | 5,522 | |||||
Bank and cash balances | 8,058 | |||||
Short-term bank deposits with original maturity | 60,532 | |||||
within three months | 41,904 | |||||
66,054 | 49,962 | |||||
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 11 |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 September 2019
-
BASIS OF PREPARATION
These condensed financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants (the "HKICPA") and the applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") (the "Listing Rules").
These condensed financial statements should be read in conjunction with the 2018/19 annual financial statements. The accounting policies (including the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty) and methods of computation used in the preparation of these condensed financial statements are consistent with those used in the annual financial statements for the year ended 31 March 2019 except as stated below. - ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS
In the current period, the Group has adopted all the new and revised Hong Kong Financial Reporting Standards ("HKFRSs") issued by the HKICPA that are relevant to its operations and effective for its accounting year beginning on 1 April 2019. HKFRSs comprise Hong Kong Financial Reporting Standards ("HKFRS"); Hong Kong Accounting Standards ("HKAS"); and Interpretations. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
The Group has initially adopted HKFRS 16 Leases from 1 April 2019. A number of other new standards are effective from 1 April 2019 but they do not have a material effect on the Group's consolidated financial statements.
HKFRS 16 Leases
HKFRS 16 supersedes HKAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. HKFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Group, as a lessee, has recognised right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments.
The Group has applied HKFRS 16 using the modified retrospective approach to operating lease commitment that existed at 1 April 2019 in accordance with the transition requirements. Comparative information has not been restated and continues to be reported under HKAS 17. The details of the changes in accounting policies are disclosed below.
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12 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
2. ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (Continued)
HKFRS 16 Leases (Continued)
- Definition of a lease
Previously, the Group determined at contract inception whether an arrangement was or contained a lease under HK(IFRIC)-Int 4. The Group now assesses whether a contract is or contains a lease based on the new definition of a lease. Under HKFRS 16, a contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.
On transition to HKFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which transactions are leases. It applied HKFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under HKAS 17 and HK(IFRIC)-Int 4 were not reassessed. Therefore, the definition of a lease under HKFRS 16 has been applied only to contracts entered into or changed on or after 1 April 2019.
At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. However, for leases of properties in which it is a lessee, the Group has elected not to separate non-lease components and will instead account for the lease and non-lease components as a single lease component. - As a lessee
The Group leases many properties, including office, restaurants and director's quarter.
As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under HKFRS 16, the Group recognises right-of-use assets and lease liabilities for most leases.
However, the Group has elected not to recognise right-of-use assets and lease liabilities for leases with remaining lease terms of less than 12 months from 31 March 2019 and for some leases of low-value assets. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 13 |
2. ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (Continued)
HKFRS 16 Leases (Continued)
- As a lessee (Continued)
The recognised right-of-use assets relate to the following types of assets:
30 September | 1 April | ||||
2019 | 2019 | ||||
HK$'000 | HK$'000 | ||||
Properties | 45,407 | 53,004 | |||
Significant accounting policies
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.
The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognised.
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14 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
2. ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (Continued)
HKFRS 16 Leases (Continued)
- As a lessee (Continued) Transition
Previously, the Group classified property leases as operating leases under HKAS 17.
At transition, for leases classified as operating leases under HKAS 17, lease liabilities were measured at the present value of the remaining lease payments, discounted at the Group's incremental borrowing rate as at 1 April 2019. Right-of-use assets are measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments, and discounted using the lessee's incremental borrowing rate at the date of initial application.
The Group used the following practical expedients when applying HKFRS 16 to leases previously classified as operating leases under HKAS 17. - Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term.
- Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
- Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.
-
Impacts of financial statements Impact on transition
On transition to HKFRS 16, the Group recognised additional right-of-use assets and additional lease liabilities. The impact on transition as at 1 April 2019 is summarised below.
Impact on initial | |||||||
At 31 March | application of | At 1 April | |||||
2019 | HKFRS 16 | 2019 | |||||
HK$'000 | HK$'000 | HK$'000 | |||||
Non-current assets | |||||||
Right-of-use assets | - | 53,004 | 53,004 | ||||
Non-current liabilities | |||||||
Lease liabilities | - | (40,183) | (40,183) | ||||
Current liabilities | |||||||
Lease liabilities | - | (12,821) | (12,821) | ||||
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 15 |
2. ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (Continued)
HKFRS 16 Leases (Continued)
- Impacts of financial statements (Continued) Impact on transition (Continued)
When measuring lease liabilities for leases that were classified as operating leases, the Group discounted lease payments using its incremental borrowing rate with the range from 7.50% to 9.65% at 1 April 2019.
1 April 2019 HK$'000
Operating lease commitment as at 31 March 2019 under | ||
HKAS 17 | 30,298 | |
Add/less: Adjustments as a result of a different treatment of | ||
extension and termination options | 46,711 | |
Adjusted operating lease commitment as at 31 March 2019 | ||
under HKAS 17 | 77,009 | |
Less: Total future interest expenses under HKFRS 16 | (24,005) | |
Lease liabilities recognised as at 1 April 2019 under | ||
HKFRS 16 | 53,004 | |
Representing: | ||
Non-current lease liabilities | 40,183 | |
Current lease liabilities | 12,821 | |
53,004 | ||
Impacts for the period
As a result of initially applying HKFRS 16, in relation to the leases that were previously classified as operating leases under HKAS 17, the Group recognised right-of-use assets of HK$45,407,000 and lease liabilities of HK$47,231,000 as at 30 September 2019.
Also in relation to those leases under HKFRS 16, the Group has recognised depreciation and finance costs, instead of operating lease rental and staff costs. During the six months ended 30 September 2019, the Group recognised depreciation charges of HK$7,597,000 and finance costs of HK$2,387,000 from these leases.
INTERIM REPORT 2019/20
16 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
3. FAIR VALUE MEASUREMENTS
The carrying amounts of the Group's financial assets and financial liabilities as reflected in the condensed consolidated statement of financial position approximate their respective fair values.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following disclosures of fair value measurements use a fair value hierarchy that categorises into three levels the inputs to valuation techniques used to measure fair value:
Level 1 inputs: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.
Level 2 inputs: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs: unobservable inputs for the asset or liability.
The Group's policy is to recognise transfers into and transfers out of any of the three levels as of the date of the event or change in circumstances that caused the transfer. During the six months ended 30 September 2019 and 2018, there was no transfer between level 1, level 2 and level 3.
The following table shows the carrying amounts and fair value of financial assets, including their levels in the fair value hierarchy. It does not include fair value information for financial assets not measured at fair value if the carrying amount is a reasonable approximation of fair value. Further, for the current period the fair value disclosure of lease liabilities is also not required.
Disclosures of level in fair value hierarchy at 30 September 2019:
Fair value measurements | |||
as at 30 September 2019 | |||
(unaudited) | |||
Description | Level 1 | ||
HK$'000 | |||
Recurring fair value measurements: | |||
Equity instruments at FVTOCI | 1,150 | ||
- Listed equity securities | |||
Fair value measurements | |||
as at 31 March 2019 | |||
Description | (audited) | ||
Level 1 | |||
HK$'000 | |||
Recurring fair value measurements: | |||
Equity instruments at FVTOCI | |||
- Listed equity securities | 1,338 | ||
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 17 |
- REVENUE AND SEGMENT INFORMATION
Revenue represents the net amounts received or receivable for goods sold and services rendered by the Group, net of discounts and sales related taxes, during the year.
Financial information provided to the chief operating decision makers, being the executive directors, for performance assessment and resources allocation is based on the overall operating results and financial position of the Group which constitute the condensed consolidated statement of profit or loss and other comprehensive income and the condensed consolidated statement of financial position. Financial information regarding the segment for the six months ended 30 September 2019 and 2018 can be made with reference to the results as set out in the condensed consolidated statement of profit or loss and other comprehensive income.
No geographical information is presented as all external revenue for both periods and non-current assets are either derived from or located in Hong Kong, an analysis of the consolidated revenue and non-current assets by geographical location is not presented.
Operation of Chinese restaurants (revenue recognised at a point in time)
For operation of Chinese restaurants, revenue is recognised when food and beverages are served to the customers. - INCOME TAX EXPENSE
No provision for Hong Kong profits tax has been made in the condensed consolidated financial statements as the Group did not have assessable profit for both periods. - LOSS FOR THE PERIOD
The Group's loss for the period is stated after charging the following:
Six months ended | |||||
30 September | |||||
2019 | 2018 | ||||
HK$'000 | HK$'000 | ||||
(Unaudited) | (Unaudited) | ||||
Cost of inventories consumed | 11,604 | 13,477 | |||
Depreciation | |||||
- property, plant and equipment | 353 | 21 | |||
- right-of-use assets | 7,596 | - | |||
Equity-settledshare-based payments | 305 | 736 | |||
Finance costs | |||||
- interest on lease liabilities | 2,387 | - | |||
Net exchange loss | 212 | 186 | |||
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18 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
-
DIVIDENDS
The directors do not recommend the payment of an interim dividend (six months ended 30 September 2018: HK$ Nil). - LOSS PER SHARE
The calculation of basic and diluted loss per share is based on the following:
Six months ended | |||||
30 September | |||||
2019 | 2018 | ||||
HK$'000 | HK$'000 | ||||
(Unaudited) | (Unaudited) | ||||
Loss | |||||
Loss attributable to owners of the Company | 9,581 | 6,686 | |||
Number of shares | |||||
Weighted average number of ordinary shares for the | |||||
purpose of calculating basic loss per share (Note) | 1,946,314,108 | 1,946,314,108 | |||
Note:
There was no dilutive potential ordinary share for the Company's share option for the six months ended 30 September 2018 and 2019.
-
PROPERTY, PLANT AND EQUIPMENT
During the six months ended 30 September 2019, the Group incurred HK$1,978,000 (six months ended 30 September 2018: HK$24,000) mainly on fittings, furniture and restaurant equipment for the restaurant operations. - TRADE AND OTHER RECEIVABLES
The ageing analysis of trade receivables, based on the invoice date, and net of allowance, is as follow:
30 September | 31 March | ||||
2019 | 2019 | ||||
HK$'000 | HK$'000 | ||||
(Unaudited) | (Audited) | ||||
0 to 60 days | 377 | 472 | |||
More than 60 days | 4 | - | |||
381 | 472 | ||||
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 19 |
11. EQUITY INSTRUMENTS AS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
30 September | 31 March | ||||
2019 | 2019 | ||||
HK$'000 | HK$'000 | ||||
(unaudited) | (audited) | ||||
Listed equity securities in Hong Kong | 1,150 | 1,338 | |||
All of the equity instruments as at FVTOCI are denominated in HK$. | |||||
12. SHARE CAPITAL | |||||
30 September | 31 March | ||||
2019 | 2019 | ||||
HK$'000 | HK$'000 | ||||
(Unaudited) | (Audited) | ||||
Authorised: | |||||
5,000,000,000 ordinary shares of HK$0.1 each | 500,000 | 500,000 | |||
Issued and fully paid: | |||||
1,946,314,108 ordinary shares of HK$0.1 each | 194,631 | 194,631 | |||
13. TRADE AND OTHER PAYABLES
The ageing analysis of trade payables, based on the date of invoice, is as follows:
30 September | 31 March | ||||
2019 | 2019 | ||||
HK$'000 | HK$'000 | ||||
(Unaudited) | (Audited) | ||||
0 to 60 days | 2,394 | 2,816 | |||
More than 60 days | 35 | 90 | |||
2,429 | 2,906 | ||||
INTERIM REPORT 2019/20
20 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
14. SHARE OPTION SCHEME
The Company adopted a share option scheme on 10 May 2010. This share option scheme shall be valid and effective until 8 May 2020. Details of movements in the share options granted under the share option scheme during the current interim period are set out below:
Outstanding | Lapsed/ | Outstanding | Lapsed/ | Outstanding | ||||
Exercise | as at | expired | as at | expired | as at | |||
Date of | price | 1 April | during | 1 April | during | 30 September | ||
Participants | grant | Exercisable period | per share | 2018 | the year | 2019 | the period | 2019 |
HK$ | ||||||||
Directors and consultant | 23 October 2017 | 23 October 2017 to | 0.177 | 30,000,000 | - | 30,000,000 | - | 30,000,000 |
22 October 2025 |
No share options were granted to, or exercised by, the Company's directors during the current interim period (six months ended 30 September 2018: Nil).
No share options were lapsed during the six months ended 30 September 2019 (six months ended 30 September 2018: Nil).
Note: The total estimated fair value at the date of grant of the share options on 23 October 2017 was HK$2,906,000. 30% of total number of the share options were vested immediately on the date of grant, 23 October 2017. 30% of total number of the share options were vested on 23 October 2018 and the remaining 40% were vested on 23 October 2019. The closing price of the Company's share immediately before the date of grant was HK$0.177.
15. RELATED PARTY TRANSACTIONS
-
The Group leased certain properties for its restaurant operations from Homley Development Limited ("Homley"). Rentals charged by Homley during the current interim period amounted to HK$2,160,000 (six months ended 30 September 2018: HK$2,160,000). At 30 September 2019, rental deposit paid to Homley of HK$1,080,000 was included in current property rental deposits (at 31 March 2019: HK$1,080,000 included in non-current property rental deposits). At 30 September 2019, no accrued rental was payable to Homley (31 March 2019: nil). The monthly rental was determined by both parties with reference to market rent.
Certain directors who are also the key management personnel of the Company and beneficial owners of the ultimate holding company of the Group are beneficially interested in Homley. - The Group leased a unit of residential building from Hover City Industrial Limited ("Hover City"). Rental charged by Hover City during the current interim period amounted to HK$450,000 (six months ended 30 September 2018: HK$450,000). At 30 September 2019, rental deposit paid to Hover City of HK$150,000 was included in non-current property rental deposits (at 31 March 2019: HK$150,000 included in non-current property rental deposits). At 30 September 2019, no accrued rental was payable to Hover City (31 March 2019: nil). The monthly rental was determined by both parties with reference to market rent.
Certain directors who are also the key management personnel of the Company and beneficial owners of the ultimate holding company of the Group are beneficially interested in Hover City.
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 21 |
15. RELATED PARTY TRANSACTIONS (Continued)
- The Group leased an office from Sky Global Investments Limited ("Sky Global"). Rentals charged by Sky Global during the current interim period amounted to HK$600,000 (six months ended 30 September 2018: HK$600,000). At 30 September 2019, rental deposit paid to Sky Global of HK$240,000 was included in non-current property rental deposits (at 31 March 2019: HK$240,000 included in non-current property rental deposits). At 30 September 2019, no accrued rental was payable to Sky Global (31 March 2019: nil). The monthly rental was determined by both parties with reference to market rent.
Certain directors who are also the key management personnel of the Company and beneficial owners of the ultimate holding company of the Group are beneficially interested in Sky Global. - The remuneration of directors, which are key management personnel during the period was as follows:
30 September | 30 September | ||||
2019 | 2018 | ||||
HK$'000 | HK$'000 | ||||
Fee | 108 | 108 | |||
Salaries and other benefits | 2,025 | 2,025 | |||
Retirement benefits cost | 27 | 27 | |||
Share-based payments | 293 | 736 | |||
2,453 | 2,896 | ||||
- CONTINGENT LIABILITIES
The Group did not have any significant contingent liabilities at 30 September 2019 (As at 31 March 2019: HK$ Nil). - COMPARATIVE FIGURES
The Group has initially applied HKFRS 16 at 1 April 2019 under the modified retrospective approach with no restatement on the comparative information. Details of changes in accounting policies are disclosed in note 2 to this interim financial information.
Certain comparative figures have been reclassified to conform to the current period's presentation. The new classification of the accounting items was considered to provide a more appropriate presentation of the state of affairs of the Group. - APPROVAL OF FINANCIAL STATEMENTS
The condensed consolidated interim financial statements were approved and authorised for issue by the Board of Directors on 29 November 2019.
INTERIM REPORT 2019/20
22 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
Financial Results
The Group is principally engaged in the operations of Chinese restaurants in Hong Kong which specialise in Chiu Chow cuisine.
For the six months ended 30 September 2019, the Group recorded a consolidated revenue of approximately HK$36.6 million, a decrease of 12.8% compared to the last corresponding period's revenue of approximately HK$41.9 million.
The net loss for the period under review amounted to approximately HK$9.6 million compared to the net loss of approximately HK$6.7 million in the last corresponding period. The net loss would have been approximately HK$7.8 million before the negative impact of the adoption of HKFRS 16.
Review of Operations
Revenue from the restaurant operation amounted to approximately HK$36.6 million for the period under review, a decrease of approximately HK$5.3 million from the last corresponding period. The decline in revenue was mainly due to the widespread protests in Hong Kong since the month of June 2019 and the restaurant renovation at Hover City Chiu Chow Restaurant in April 2019.
The revenue contributed by the Tsim Sha Tsui branch was stable in the first two months of the reporting period but had continued to deteriorate since the month of June with double-digit percentage drop in revenue recorded for the month of August and September. There has been a notable decline in the revenue from the tourist business as well as the corporate patrons in the midst of the social and economic turmoil in Hong Kong.
For the branch at Cheung Sha Wan Plaza, revenue was adversely affected in April due to a renovation which last for five weeks since mid of March. The new image of the restaurant did help to boost business in the two months following the renovation but the trend was reversed since the month of July with revenue fall over 20% below our revenue target. Revenue from dinner time was affected the most due to frequent and last minute cancellations of booking reservation. Customers are also deterred to dine out at night and in the weekends due to safety reason. The constant disruption in the public transportation system caused further inconvenience to the restaurant's patrons.
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 23 |
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Review of Operations (Continued)
The net loss for the Group had increased by approximately HK$2.9 million during the period under review which was mainly attributable to the year-on-year decrease in revenue and hence a drop in gross profit of approximately HK$3.5 million and the adoption of HKFRS 16. The gross profit margin remained stable compared to the last corresponding period.
The application of HKFRS 16 has resulted in the recognition of right-of-use assets of approximately HK$45.4 million and lease liabilities of HK$47.2 million for the Group as at 30 September 2019. In addition, the total expenditure on operating lease rentals and staff quarter costs are now being accounted for as depreciation on right-of-use assets of approximately HK$7.6 million and interest on lease liabilities of approximately HK$2.4 million and are presented in the financial statement as depreciation and finance costs respectively. Please refer to Note 2 of the "Notes to the Condensed Consolidated Financial Statements" for detailed explanation of the impact of the application of HKFRS 16. Under HKFRS 16, the total of the depreciation and finance costs in relation to the leases amounted to approximately HK$10.0 million for the six months ended 30 September 2019 and were approximately HK$1.8 million higher than the total rental amount if it had not been accounted for under HKFRS 16. The total cash outflows on lease payments, however, are substantially the same under the old and the new accounting standard.
Total staff costs reduced by approximately HK$1.6 million from last corresponding period. Besides the reclassification of the HK$0.5 million staff quarter costs to depreciation and finance costs, the actual costs saving was mainly due to a decrease in some turnover-based staff costs such as service charges and payments to freelance workers.
There was also approximately HK$0.5 million costs reduction in other operating expenses due to approximately HK$0.3 million decrease in utility charges and approximately HK$0.2 million decrease in professional fees.
INTERIM REPORT 2019/20
24 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Events after the Reporting Period
Subsequent to the end of the reporting period, on 18 October 2019, GV Australia Pty Ltd (a wholly-owned subsidiary of the Company) entered into the agreement with a connected party in relation to the development and construction of a low-rise apartment block on the land comprising 26 apartments and certain communal facilities situated in Camden, Sydney, New South Wales, Australia.
Implication under the listing rules
As one or more of the applicable percentage ratios for the arrangement contemplated under the agreement were more than 25% but all of them were less than 100%, the arrangement contemplated under the agreement constituted a major transaction of the Company under Chapter 14 of the Listing Rules. By virtue of certain executive directors and senior management personnel's interests in the land, the arrangement also constituted a connected transaction of the Company under Chapter 14A of the Listing Rules. Accordingly, the arrangement contemplated under the agreement was subject to the announcement, reporting and independent shareholders' approval requirements of the Listing Rules. Details of the arrangement were set out in the announcement dated 18 October 2019 and the circular dated 12 November 2019 issued by the Company. The resolution in relation to the above transaction as set out in the notice of the special general meeting was duly passed by the independent shareholders, by way of poll, at the special general meeting held on 29 November 2019.
Prospects
The months of political unrest as well as the US-China trade war have complicated and undermined the business environment for the food and beverage industry in Hong Kong. The continued social and economic turmoil in Hong Kong resulted in an overall worsened consumer sentiment. Amid the challenging operating environment, the Group will continue to operate its Chinese restaurant business. However, it will adopt a more cautious approach in committing further capital expenditure and will implement various costs control measures to mitigate the loss during this difficult time such as seeking rental concession from landlords and suspending the hiring of full time and freelance workers.
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 25 |
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Prospects (Continued)
The Group will continue to review and revise its business strategies from time to time with the aim to better position itself to meet the challenges ahead and to capture any new investment opportunities as they arise. The commencement of the development and construction business in Australia in the second half of the financial year will mark a new era for the Group and is considered as a suitable opportunity for the Group to expand its business activities and diversify risks with an aim to improve the returns for its shareholders.
Liquidity and Financial Resources
The Group's cash and bank balances (including pledged bank deposits and short-term bank deposits) amounted to approximately HK$66.5 million as at 30 September 2019. As the Group had no bank borrowings, the Group's gearing ratio was zero as at 30 September 2019 and 31 March 2019.
With the cash generated from the Group's operations in its ordinary course of business and the existing unutilised banking and credit facilities, the directors consider that the Group has sufficient working capital for its operations.
Foreign Exchange Exposure
Most of the Group's sales, purchases, cash and bank balances were denominated in Hong Kong dollars. The Group is exposed to foreign currency risk primarily through certain bank deposits which are denominated in Renminbi and United States Dollar. The management would closely monitor such risk and would consider hedging significant foreign currency exposure should the need arise.
Contingent Liabilities
As at 30 September 2019, the Group did not have any significant contingent liabilities.
Employees and Remuneration Policies
As at 30 September 2019, the Group had approximately 120 staff. Review of the employees' remuneration packages is normally conducted annually and as required from time to time. The salary and benefit levels of the Group's employees are competitive and individual performance is rewarded through the Group's bonus scheme. Other benefits including medical coverage and mandatory provident fund scheme are also provided to employees.
INTERIM REPORT 2019/20
26 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Interim Dividend
The board of directors has resolved not to declare any interim dividend for the six months ended 30 September 2019 (for the six months ended 30 September 2018: nil).
OTHER INFORMATION
SHARE OPTIONS
The Company by shareholders' resolutions passed at the special general meeting held on 10 May 2010 has adopted a share option scheme which shall be valid and effective until 8 May 2020 (the "Option Scheme").
The purpose of the Option Scheme is to recognize the commitments and contributions of the following eligible participants by granting options to them as incentives or rewards:
- any employee or director (including executive director, non-executive director and independent non-executive director) of any member of the Group or any entity in which any member of the Group holds an equity interest (the "Invested Entity");
- any advisor, consultant, professional, agent, contractor, customer, provider of goods and/or services, business or joint-venture partner of any member of the Group or any Invested Entity whom the board of directors in its sole discretion considers eligible for the Option Scheme on the basis of his or her contribution to the Group or the Invested Entity (as the case may be); and
- any person whom the board of directors in its sole discretion considers has contributed or will contribute to the Group or to the Invested Entity (as the case may be).
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 27 |
SHARE OPTIONS (Continued)
As at 30 September 2019, the Company had 30,000,000 (2018: 30,000,000) share options outstanding under the Option Scheme, which represented approximately 1.5% of the shares of the Company in issue at that date. A summary of the share options movement is set out below:
Number of share options | ||||||||||
Exercise price | Outstanding | Expired during | Outstanding | |||||||
Option holders | Date of grant | Exercisable period | per share | as at 1.4.2019 | the period | as at 30.9.2019 | ||||
HK$ | ||||||||||
Cheng Hop Fai | 23.10.2017 | 23.10.2017 - 22.10.2025 | 0.177(1) | 6,000,000 | - | 6,000,000 | ||||
Cheng Pak Ming, Judy | 23.10.2017 | 23.10.2017 - 22.10.2025 | 0.177(1) | 6,000,000 | - | 6,000,000 | ||||
Cheng Pak Man, Anita | 23.10.2017 | 23.10.2017 - 22.10.2025 | 0.177(1) | 6,000,000 | - | 6,000,000 | ||||
Cheng Pak Lai, Lily | 23.10.2017 | 23.10.2017 - 22.10.2025 | 0.177(1) | 6,000,000 | - | 6,000,000 | ||||
Leung Tai Chiu | 23.10.2017 | 23.10.2017 - 22.10.2025 | 0.177(1) | 2,000,000 | - | 2,000,000 | ||||
Law Toe Ming | 23.10.2017 | 23.10.2017 - 22.10.2025 | 0.177(1) | 2,000,000 | - | 2,000,000 | ||||
Mark Yiu Tong, William | 23.10.2017 | 23.10.2017 - 22.10.2025 | 0.177(1) | 2,000,000 | - | 2,000,000 | ||||
30,000,000 | - | 30,000,000 | ||||||||
Note:
- The total estimated fair value at the date of grant of the share options on 23 October 2017 was HK$2,906,000, 30% of total number of the share options were vested immediately on the date of grant, 23 October 2017, 30% of total number of the share options were vested on 23 October 2018 and the remaining 40% were vested on 23 October 2019. The closing price of the Company's share immediately before the date of grant was HK$0.177.
INTERIM REPORT 2019/20
28 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
DIRECTORS' INTERESTS IN SHARES, UNDERLYING SHARES AND DEBENTURES
As at 30 September 2019, the interests of the directors and the chief executive and their associates in the shares, underlying shares or debentures of the Company or any associated corporations which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the Securities and Futures Ordinance (the "SFO"); or (b) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") contained in Appendix 10 to the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:
Approximate | ||||
percentage of | ||||
Number of | the issued | |||
Capacity and nature | issued ordinary | share capital | ||
Name of director | of interest | shares held | of the Company | |
Cheng Hop Fai | Beneficial owner | 6,900,000 | 0.35% | |
Beneficiary of trusts | (note 1) | 1,450,037,841 | 74.50% | |
Cheng Pak Ming, Judy | Beneficiary of trusts | (note 1) | 1,450,037,841 | 74.50% |
Cheng Pak Man, Anita | Beneficiary of trusts | (note 1) | 1,450,037,841 | 74.50% |
Cheng Pak Lai, Lily | Beneficiary of trusts | (note 1) | 1,450,037,841 | 74.50% |
Law Toe Ming | Interest of controlled corporation | (note 2) | 2,000,000 | 0.10% |
Notes:
- Golden Toy Investments Limited ("Golden Toy") and Kong Fai International Limited ("Kong Fai") held 172,869,780 shares (or 8.88% interest) and 1,277,168,061 shares (or 65.62% interest) of the Company, respectively. Golden Toy and Kong Fai are wholly-owned by two discretionary trusts of which family members of Mr. Cheng Hop Fai, including Mr. Cheng Hop Fai, Ms. Cheng Pak Ming, Judy, Ms. Cheng Pak Man, Anita and Ms. Cheng Pak Lai, Lily are discretionary objects.
- Mr. Law Toe Ming is deemed to be interested in the 2,000,000 shares held by Jubilee Trade Holdings Limited ("Jubilee") by virtue of his interest in Jubilee.
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 29 |
DIRECTORS' INTERESTS IN SHARES, UNDERLYING SHARES AND
DEBENTURES (Continued)
Save as disclosed above and in the section titled "Share Options", as at 30 September 2019, none of the directors and the chief executive of the Company was, under Divisions 7 and 8 of Part XV of the SFO, taken to be interested or deemed to have any other interests or short positions in the shares, underlying shares or debentures of the Company or any associated corporations which (a) would have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, or (b) which were required to be entered into the register referred to therein pursuant to Section 352 of the SFO, or (c) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code.
SUBSTANTIAL SHAREHOLDERS
Other than the interests disclosed above, as at 30 September 2019, the register of substantial shareholders maintained by the Company pursuant to Section 336 of the SFO indicated that the following persons had notified the Company of interests or short positions in the issued share capital of the Company which fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO:
Approximate | |||
percentage of | |||
Number of | the issued | ||
issued ordinary | share capital | ||
Name | Capacity and nature of interest | shares held | of the Company |
Golden Toy | Beneficial owner | 172,869,780(a) | 8.88% |
Kong Fai | Beneficial owner | 1,277,168,061(a) | 65.62% |
Alpadis Trust (HK) Limited | Trustee of trusts | 1,450,037,841(a) | 74.50% |
Alpadis Group Holding SA | Interest of controlled corporation | 1,450,037,841(b) | 74.50% |
Alain Esseiva | Interest of controlled corporation | 1,450,037,841(c) | 74.50% |
INTERIM REPORT 2019/20
30 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
SUBSTANTIAL SHAREHOLDERS (Continued)
Notes:
- Alpadis Trust (HK) Limited is deemed under the SFO to have an interest in the same 1,450,037,841 shares, in aggregate, beneficially owned by Golden Toy and Kong Fai by virtue of it being the trustee of the two discretionary trusts which own 100% of the shares of Golden Toy and Kong Fai.
- The corporate substantial shareholder notice filed by Alpadis Group Holding SA indicated that it is deemed to be interested in the 1,450,037,841 shares under the SFO by virtue of its interest held in Alpadis Trust (HK) Limited.
- The individual substantial shareholder notice filed by Alain Esseiva indicated that he is deemed to be interested in the 1,450,037,841 shares under the SFO by virtue of their interests held in Alpadis Group Holding SA.
Save as disclosed above, the directors are not aware of any other persons who, as at 30 September 2019, had any interests or short positions in the shares or underlying shares of the Company that were required to be entered into the register kept by the Company pursuant to Section 336 of the SFO.
PURCHASE, SALE OR REDEMPTION OF SHARES
There was no purchase, sale or redemption of the Company's shares by the Company or any of its subsidiaries during the current interim period.
CORPORATE GOVERNANCE CODE
The Company has adopted the Corporate Governance Code (the "Code") contained in Appendix 14 to the Listing Rules as its own corporate governance code. The Company has complied with the code provisions set out in the Code throughout the six months ended 30 September 2019 except for code provision A.2.1 in respect of the role separation of the chairman and the chief executive; code provision A.4.1 in respect of the service term of non-executive directors ("NEDs"); and code provision D.1.4 in respect of the letters of appointment for directors.
INTERIM REPORT 2019/20
G-VISION INTERNATIONAL (HOLDINGS) LIMITED | 31 |
CORPORATE GOVERNANCE CODE (Continued)
Code provision A.2.1 sets out that the roles of the chairman and the chief executive should be separate and should not be performed by the same individual. Currently, Mr. Cheng Hop Fai assumes the role of both the chairman and the managing director (equivalent to the role of a chief executive) of the Company. The board of directors considers that such arrangement will not result in undue concentration of power and is, at this stage, conducive to the efficient formulation and implementation of the Group's strategies thus allowing the Group to develop its business more effectively.
Code provision A.4.1 stipulates that NEDs should be appointed for a specific term, subject to re-election. The independent non-executive directors ("INEDs") of the Company are not appointed for a specific term. This constitutes a deviation from the code provision A.4.1. However, as all the INEDs of the Company are subject to retirement by rotation at the annual general meetings of the Company at least once every three years in accordance with the Company's Bye-laws, in the opinion of the directors, this meets the objective of the code provision A.4.1.
Code provision D.1.4 sets out that issuers should have formal letters of appointment for directors setting out the key terms and conditions of their appointment. The Company did not have formal letters of appointment for certain directors. All of the directors of the Company are, however, required to refer to the guidelines set out in "A Guide on Directors' Duties" issued by the Companies Registry and "Guidelines for Directors" and "Guide for Independent Non-Executive Directors" published by the Hong Kong Institute of Directors in performing their duties and responsibilities as directors of the Company. In the opinion of the directors, this meets the objective of the code provision D.1.4.
AUDIT COMMITTEE
The audit committee comprises the three INEDs of the Company, namely, Mr. Leung Tai Chiu as the chairman, and Mr. Law Toe Ming and Mr. Hung Chi Yuen, Andrew as members. The terms of reference of the audit committee are consistent with the code provisions set out in the Code. The audit committee has reviewed with management the accounting principles and practices adopted by the Group and discussed with the board of directors the internal control and financial reporting matters including the unaudited interim financial statements for the six months ended 30 September 2019.
INTERIM REPORT 2019/20
32 G-VISION INTERNATIONAL (HOLDINGS) LIMITED
REMUNERATION COMMITTEE
Pursuant to rule 3.25 of the Listing Rules, the Company has established a remuneration committee comprising the three INEDs of the Company, namely, Mr. Law Toe Ming as the chairman, and Mr. Leung Tai Chiu and Mr. Hung Chi Yuen, Andrew as members. The terms of reference of the remuneration committee are consistent with the code provisions set out in the Code. The principal function of the remuneration committee is to make recommendation to the board of directors on the Group's policy and structure for the remuneration of directors and senior management.
NOMINATION COMMITTEE
Pursuant to code provision A.5.1 set out in the Code, the Company has established a nomination committee comprising Mr. Cheng Hop Fai as the chairman and two INEDs of the Company, namely, Mr. Law Toe Ming and Mr. Hung Chi Yuen, Andrew as members. The terms of reference of the nomination committee are consistent with the code provisions set out in the Code. The principal function of the nomination committee is to review the structure, size, composition and diversity of the board of directors at least annually with reference to the business needs and development of the Company and make recommendations to the board of directors on any proposed changes to the board of directors to complement the Group's corporate strategy.
DIRECTORS' SECURITIES TRANSACTIONS
The Company has adopted the Model Code contained in Appendix 10 to the Listing Rules as its own code of conduct regarding securities transactions by the directors. Following specific enquiry by the Company, all the directors confirmed that they have complied with the required standards as set out in the Model Code during the six months ended 30 September 2019.
By Order of the Board
Cheng Hop Fai
Chairman
Hong Kong, 29 November 2019
INTERIM REPORT 2019/20
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G-Vision International (Holdings) Ltd. published this content on 12 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 December 2019 08:35:05 UTC