Register for Digital Look

Company Announcements

Final Results

Related Companies

RNS Number : 7397Y
UniVision Engineering Ltd
10 September 2015
 

UniVision Engineering Limited

 

 

 

 

 

 

 

 

 

Annual Report

Year ended 31 March 2015

 

 

 


UNIVISION ENGINEERING LIMITED

Annual Report

Year ended 31 March 2015

 

 

 

 

 

Contents

Page

 

 

Board of Directors, Officers and Professional Advisers

2

 

 

Chairman's Statement

3

 

 

Directors' and Senior Management's Biographies

7

 

 

Directors' Report

9

 

 

Remuneration Report

14

 

 

Report on Corporate Governance

15

 

 

Statement of Directors' Responsibilities

18

 

 

Independent Auditor's Report to the Shareholders of UniVision Engineering Limited

 

19

 

 

Consolidated Statement of Comprehensive Income

21

 

 

Consolidated Statement of Financial Position

22

 

 

Company Statement of Financial Position

23

 

 

Consolidated Statement of Changes in Equity

24

 

 

Company Statement of Changes in Equity

25

 

 

Consolidated Statement of Cash Flows

26

 

 

Company Statement of Cash Flows

27

 

 

Notes to the Financial Statements

28

 

 

Notice of Annual General Meeting

75

 

 


BOARD OF DIRECTORS, OFFICERS

AND PROFESSIONAL ADVISERS

 

 

Board of Directors


Nominated Adviser and Broker

Stephen Sin Mo KOO, Executive Chairman


ZAI Corporate Finance Limited

Chun Pan WONG, Chief Executive Officer


Staple Court,

Danny Kwok Fai YIP, Finance Director


11 Staple Inn,

Peter Yip Tak CHAN, Director of Sales and Marketing


London WC1V 7QH,

Nicholas James LYTH, Non-Executive Director


UK.




Senior Management


Principal bankers

Mike Chiu Wah CHAN, Director of Operations


Bank of China (Hong Kong)



Hong Kong and Shanghai Banking Corporation Citibank, N.A.



Hua Nan Commercial Bank (Taiwan)







Audit Committee


Auditor

Nicholas James LYTH, Chairman


HKCMCPA Company Limited

Stephen Sin Mo KOO


Certified Public Accountants



Unit 602, 6/F., Hoseinee House,



69 Wyndham Street,



Central, Hong Kong




Remuneration Committee


Registrars

Nicholas James LYTH, Chairman


Computershare Investor Services

Stephen Sin Mo KOO


(Jersey) Limited



Queensway House,



Hilgrove Street,

AIM Stock Code


St Helier,

UVEL


Jersey JE1 1ES.







Company Secretary


UK Depositary

Danny Kwok Fai YIP


Computershare Investor Services PLC



The Pavilions,

Registered Office


Bridgwater Road,

Unit 01A, 2/F., Sunbeam Centre,


Bristol BS99 6ZZ,

27 Shing Yip Street,


UK

Kwun Tong, Kowloon,



Hong Kong



Tel: (852) 2389 3256



Fax: (852) 2797 8053



E-mail: uvel@hk.uvel.com



Website: www.uvel.com





CHAIRMAN'S STATEMENT

 

 

INTRODUCTION

 

I am pleased to report the Group's audited results for the financial year ended 31 March 2015.

 

Notwithstanding that the revenue from the Group's Security and Surveillance Systems business recorded a 24.4% decrease compared with last financial year, the maintenance contract income maintained growth of 9.7%. The Board has continued to focus on this segment, that generates much higher gross profit and more stable cash flow to the Group.  We anticipate that large infrastructure projects and the line extension of the MTR in Hong Kong will provide the Company more opportunities for business growth in the coming years.

 

Recognising the Board's confidence in UniVision, it is declaring an increased final dividend of 0.39 HK cents (gross) per share for the financial year ended 31 March, 2015 (2014: 0.31 HK cents), consistent with its dividend policy since the 2013 financial year.

 

The Directors remain confident of the future of UniVision and are optimistic about the Group's prospects.

 

 

DEMERGER OF LEADER SMART GROUP

 

The Group has completed the procedure to demerge its Electrical and Mechanical ("E&M") and property division (the "Demerger") through an "in-specie" distribution of shares to UniVision's shareholders. The Board believes that the Demerger is in the best interests of the Company and UniVision's shareholders. After the demerger, it allows UniVision to focus on its core Security and Surveillance business whilst the Leader Smart Group focuses on properties which are not related to UniVision's core security and surveillance systems business.The Leader Smart website  http://www.lshld.com/en/index.html# has been set up to update its shareholders about the company's activities..

 

The E&M business of Leader Smart has been effectively demerged from UniVision and is now an independent operating entity under Leader Smart Holding Limited which is incorporated in the BVI (British Virgin Islands). This move should improve the appeal of UniVision's business to existing as well as potential investors. The strategy also optimises the Group's operational efficiency.

 

The value of the net assets of Leader Smart Group of £727K as 31 March, 2015 were distributed to the UniVison Group's shareholders in specie as a special dividend at 0.2 pence per ordinary share. The demerger is treated as the distribution of non-cash assets to owners and the dividend in specie has been debited to the retained earnings accordingly.

 

The effect of the demerger of the Leader Smart Group on UniVision has resulted in a debit of £4.74m directly to equity.

 

 

FINANCIAL REVIEW 

 

The profit from the continuing operation attributable to the equity holders of the Company is £91K (2014: £2.9m). The main reason for the big variance was that the Group recognised a gain from forgiveness of debt due to its former major shareholder of £2.5m in the 2014 financial year. Besides this, the revenue from the construction contracts division recorded a decrease of 53% in the Taiwan subsidiary. This led to the decrease in revenue of £1.9m in this business segment.



CHAIRMAN'S STATEMENT

(Continued)

 

 

The Group generated positive net cash of £368K from its operating activities in the year (2014: £548K). The decrease was mainly due to the deposit paid of £0.45m for the software fee for a major project in Taiwan. The Hong Kong Company has a relatively strong cash position that generated positive net cash of £883K from its operating activities in the year (2014: negative £12K) and maintained a cash balance of £1m at the year end. This was contributed to by the effective control of working capital. Net cash of £420K was generated from financing activities in the year (2014: negative £673K) mainly from the proceeds from a bank loan to the Taiwan subsidiary for securing new orders. The Group maintained cash and cash equivalents at 31 March 2015 of £1.2m (31 March 2014: £0.4m).

 

During the year under review, the relative strengthening closing rate at the year-end of the HK$ against Sterling has led to 11% appreciation in the GBP reporting amount in the Consolidated Statement of Financial Position. All figures in the said Statement therefore needed to be adjusted for comparison purposes.

 

Turnover in the year decreased by 24.2% to £6.7m (2014: £8.9m).  This decrease was mainly due to the significant drop in the construction contracts division in the Group's Taiwan subsidiary that recorded a decrease of revenue of 53% as compared with last year. Facing slow economic growth, local customers cut down their capital expenditure and budgets. There was lower demand for improving or replacing Security and Surveillance Systems.

 

The revenue from the construction contracts division (excluded the discontinued operations - E&M business) recorded a decrease of 15.5% and 53% respectively in Hong Kong and Taiwan as compared with last year. The drop of construction revenue in Hong Kong was mainly due to the delay of civil works in the major project (the Hong Kong-Zhuhai-Macao Bridge Project) that slowed down the progress of the construction works. There was also increased competition in job tendering for new projects.

 

The Group's maintenance contracts increased 9.7% overall compared with last year. The revenue and profit margin of the Hong Kong maintenance business are relatively stable. Nevertheless, it recorded a 11.5% decrease in revenue mainly due to the change of scope in the service provided in the new maintenance contract to MTR Corporation Limited for three years commencing on 1 January 2015. The main maintenance contract and its sub-contracts provided regular cash flow for the Group's operations. The remarkable growth of 75.5% (£467K) in the Taiwan maintenance business partly offsets the significant fall in revenue in its construction business. This growth was contributed to by more orders from a local customer and also the release of maintenance budget by a major customer. 

 

The Group's Security and Surveillance Systems business is relatively stable and generates cash flows for operations. The major customers in the Security and Surveillance Systems business are public organisations and sizeable private enterprises, such as the various departments of the Hong Kong Government and MTR Corporation Limited in Hong Kong and Formosa Group in Taiwan.

 

Gross profit margin slightly increased to 27.2% (2014: 25.9%). The major reason was the increase in gross profit from 35% to 41% in the Group's maintenance contracts, mainly due to effective control of material costs, logistics and sub-contracting charges, and efficiency control to minimize the replacement of equipment during the year. The gross margin in the Taiwan maintenance contracts was much improved to 39% in the year. The decrease in Gross Profit from 22% to 18% in the Group's construction contracts was due to keen competition in tendering projects.

 



CHAIRMAN'S STATEMENT

(Continued)

 

 

Administration expenses remain constant at £1.6m (2014: £1.6m) mainly due to effective cost control to offset the effect of inflation. Finance costs were increased to £26K (2014: £21K) during the year due to increase in borrowing from a bank by the Taiwan subsidiary.

 

The effect of the demerger of the Leader Smart Group with resulting in a debit of £4.74m to the equity is related to the amount of the provision that was made by the Parent Company for the balance due from the Leader Smart Group, which has been eliminated on consolidation in previous years. It does not affect the profit and loss for the year.

 

'Continuing operations' represents the Group's Security and Surveillance Systems business which is undertaken by the Hong Kong Company and the Taiwan subsidiary. The E&M business undertaken by the Leader Smart Group is classified as discontinued operations. The loss for the business during the year was £31K (2014: £80K).  

 

Profit before Interest and Tax (PBIT) from continuing operations was £156K (2014: £3m). Net profit before income tax from continuing operations was £130K (2014: £3m). Basic profit from continuing operations per share for this year was 0.02p (2014: 0.76p).

 

The Taiwan subsidiary declared a dividend of TWD2.8m (HK$0.73m) during the year. The dividend was paid to the holding company in December 2014 after deducting the withholding tax.

No significant capital investment occurred in the year.

 

The directors propose the payment of a final dividend of 0.39 HK cents (gross) per share for the financial year ended 31 March 2015 (2014: 0.31 HK cents). The dividend timetable is as follows:

 

Ex date                 17 September 2015

Record date          18 September 2015

Payment date        12 October 2015

 

The dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in the financial statements.

 

 

BUSINESS REVIEW

 

Markets

 

According to Tech Navio's analysts forecast, the Global IP Video Surveillance market will grow at a CAGR (Compound Annual Growth Rate) of 24.89 per cent over the period of four years from 2014 to 2018. The increase in concern over security and safety, and also the demand for high-quality images to replace older surveillance systems, are two contributing factors to the growth of the CCTV market.

 

OnVIF and PSIA are expected to bring a standard in open markets in coming years. Apart from megapixel resolution network security cameras, which are predicted to out-sell standard resolution network security cameras, High Definition Serial Digital Interface (HD-SDI) cameras, which provide high definition real time and no latency video via coaxial cable, are becoming another popular choice.

 

To overcome existing CCTV networks using coaxial cables, a strong tendency towards Ethernet Over Coaxial devices will also play an important role in months to come.

 



CHAIRMAN'S STATEMENT

(Continued)

 

 

The Group will explore M&A opportunities in related businesses, both locally and overseas, for growth and expansion. Furthermore, the Group would like to expand its market geographically. The target markets include United Arab Emirates and South East Asian countries.

 

Business

 

During the year, the Hong Kong Company was awarded a new construction contract for the Hong Kong-Zhuhai-Macao Bridge Project with a contract value of HK$11.25m. It is another remarkable project following the Kai Tak Cruise Terminal project. Further, the Company also obtained the Central-Wanchai Bypass Tunnel Project. These strengthen the Group's position in the Security and Surveillance Systems business in Hong Kong.

 

Listing

 

This year 2015 is the 10th anniversary of UniVision's listing on the London Stock Exchange's AIM market. It is a milestone that signifies the Group's standing in the Security and Surveillance Systems business sector. The Group has grown to be one of the leading providers of integrated security systems in our markets.

 

 

PROSPECTS

 

UniVision will remain stable with a strong pipeline of infrastructure projects in the coming year.

.

The Board expects that the growing demand for its Network and High Definition Security and Surveillance products will enable the Group to continue to prosper in these markets.

 

The Demerger allows the management of UniVision to have a more defined business focus on their core Security and Surveillance Systems business and enhance their responsiveness to market changes.

 

The Board expects that the business will improve following the announcement of several major proposed infrastructure projects in the coming years, including the High Speed Railway extension (Hong Kong Section), the new runway for Hong Kong International Airport and the extension of MTR lines in Hong Kong. The new line - Shatin-Central - is currently under construction. The Directors believe the demand for Security and Surveillance Systems will remain high and that the Group's core competence relies on our dedicated and experienced management and personnel.

 

Finally, on behalf of the Board, I would like to thank our customers, suppliers and shareholders for their continued support of UniVision. I would also like to acknowledge the hard work of the management and all the staff for their contribution and dedication to the Group.

 

 

 

 

 

 

MR. STEPHEN SIN MO KOO

EXECUTIVE CHAIRMAN

 

10 September 2015



DIRECTORS' AND SENIOR

MANAGEMENT'S BIOGRAPHIES

 

 

DIRECTORS' BIOGRAPHIES 

 

Nicholas James LYTH - Non-executive Director (aged 49)

Mr. Lyth is a qualified chartered management accountant and has over 15 years experience as a finance professional, having spent a number of years as director of UK companies.  He has lived and worked in China and can speak and write Mandarin.  Nicholas is currently Non Executive Chairman of Taihua plc, an AIM quoted manufacturer of pharmaceuticals, based in China. He is responsible for day to day liaison with UK investors.

 

 

Stephen Sin Mo KOO - Executive Chairman (aged 58)

Mr. Koo joined UniVision in 1998 and was appointed as a Director on 3 March 2003.  He is responsible for overall strategic planning of our Group. He holds both a Bachelor Degree from the University of Technology, Sydney, and a Masters Degree in Business from the Royal Melbourne Institute of Technology in Australia.  He is the Director of Up Sky Investments Limited, the Group's ultimate parent company.  He is a Fellow of the Institute of Certified Public Accountants of Australia.

 

 

Chun Pan WONG - Chief Executive Officer (aged 55)

Mr. Wong joined UniVision in 1991 and was appointed as a Director on 25 March 1992.  He holds a Master Degree in Religious Studies in Chinese University of Hong Kong and a Bachelor Degree in Computer Science from the University of Edinburgh, Scotland, and over 18 years experience in the surveillance industry.  Mr. Wong is responsible for formulating and overseeing the implementation of UniVision's business development strategies and for the management of the Company's operations. He is also responsible for the development of UniVision's state of the art CCTV control and monitoring systems and smart card access systems.

 

 

Danny Kwok Fai YIP -Finance Director (aged 51)

Mr. Yip was appointed as Finance Director on 18 September 2007. He was the Financial Controller for the Group before the appointment. Mr. Yip obtained a Master of Corporate Finance degree from The Hong Kong Polytechnic University and a Bachelor of Commerce (Accounting) degree from The Curtin University of Technology, Australia. Before joining the Group, Mr. Yip was the Accounting Manager of Nissin Food Group, the leading instant noodle manufacturing MNC. Mr. Yip has over 20 years experience in finance and accounting in different industries. He is a member of Hong Kong Institute of Certified Public Accountants. He also acts as Company Secretary for the Corporation.



DIRECTORS' AND SENIOR

MANAGEMENT'S BIOGRAPHIES

(Continued)

 

 

Peter Yip Tak CHAN - Director of Sales and Marketing (aged 51)

Mr. Chan joined UniVision in 1995 and was appointed as a Director on 3 October 2014.  He holds a Degree in Computing from the University of Northwest Missouri and has over 10 years experience in sales and project management.  He is responsible for the management of UniVision's Sales and Marketing Division.

 

 

SENIOR MANAGEMENT'S BRIEF BIOGRAPHIES

 

Mike Chiu Wah CHAN - Director of Operations (aged 40)

Mr. Chan joined UniVision as Assistant Engineer in December 1996, and was promoted to a number of increasingly senior positions in maintenance and project department, prior to being appointed to his present position on 2 January 2008. He is now responsible for the management of UniVision's Project and Maintenance Division.  Mr. Chan holds a Bachelor of Engineering degree in Industrial and Manufacturing System Engineering from The University of Hong Kong.

 

 



UNIVISION ENGINEERING LIMITED

DIRECTORS' REPORT

 

 

The Directors have pleasure in presenting their annual report together with the audited financial statements of the Group and the Company for the year ended 31 March 2015.

 

Principal Activities

The principal activities of the Company are the supply, design, consultation, installation and maintenance of closed circuit television and surveillance systems, and the sale of security related products.

 

Discontinued Operation

 

The Group discontinued its electrical and mechanical services (E & M business) at 31 March, 2015 by demerging Leader Smart Group through a dividend in specie of shares under the group restructuring.

 

Review of the Business

A review of the Group and its future development is included in the Chairman's Statement.

 

Assignment of Debt

The Company entered into the assignment of debt deed and agreed to transfer the balance with its former subsidiaries to Leader Smart Holdings Limited, their new holding company after the demerger, on 1 April, 2015.   

 

Financial Position

The Group's profit for the year ended 31 March 2015 and the state of affairs of the Group at that date are set out in the consolidated statement of comprehensive income on page 19 and in the consolidated balance sheet on page 20, respectively.

 

The Group's and the Company's changes in shareholders' equity for the year ended 31 March 2015 are set out in the consolidated and the Company's statement of changes in equity on page 22 and 23, respectively.

 

The Group's and the Company's cash flow for the year ended 31 March 2015 is set out in the consolidated and the Company's statement of cash flows on pages 24 to 26.   

 

 

 



DIRECTORS' REPORT

(Continued)

 

 

Key Performance Indicators (KPI)





2015

2014







Current Ratio:


Current Assets / Current Liabilities

:

1.6

2.6







Average Collection Period :

Trade receivables (net of allowance for doubtful debts) / Sales per day

:

52 days

39 days






Inventory Turnover :


Cost of sales / Inventories

:

4.1

6.2







Gross profit Margin :


Gross profit / Sales

:

27%

26%







Debt to Equity Ratio :

Debt / Equity

:

0.21

0.04







Quick Ratio :


(Current Assets -Inventories)/ Current Liabilities

:

1.3

2.4

 

Share Capital and Reserves

Details of the movements in share capital are set out in note 27 on page 63.

 

The movements in reserves during the year are set out in the consolidated statement of changes in equity on page 22.  

 

Dividends

The Directors propose that the payment of a final dividend of 0.39 HK cents (gross) per share for the financial year ended 31 March 2015.

 

Plant and Equipment

Details of the movements in plant and equipment are set out in note 16 on pages 54 to 55.

 

Directors

The directors who held office during the year and to the date of this report were as follows:

 

Stephen Sin Mo KOO

Nicholas James LYTH

Chun Pan WONG

Danny Kwok Fai YIP

Peter Yip Tak CHAN   (appointed on 3 October, 2014)

 

Mr. Stephen Sin Mo KOO, Mr. Nicholas James LYTH and Mr. Danny Kwok Fai YIP retire by rotation at the forthcoming annual general meeting in accordance with the Company's Articles of Association and, being eligible, the current directors offer themselves for re-election.

 



DIRECTORS' REPORT

(Continued)

 

 

Directors' Interests in Contracts

No director had a material interest in any contract of significance to the business of the Company to which the Company, its holding company, or its subsidiaries was a party at the end of the year or at any time during the year.

 

Directors' Interests in Shares

According to the register of Directors' Shareholdings kept by the Company, particulars of interests of the Directors (or their immediate families) who held office at the end of the financial year in the ordinary shares of the Company are as set out in the table below:

 


Ordinary Shares held as at 31 March 2015

 

Stephen Sin Mo KOO

279,703,700*

Nicholas James LYTH

             -

Chun Pan WONG

             -

Danny Kwok Fai YIP

             -

Peter Yip Tak CHAN

             -

 

 

* 78,744,000 ordinary shares are registered under the name of Up Sky Investments Limited which is an investment holding company incorporated under the laws of the British Virgin Islands and is wholly-owned by Mr. Stephen Sin Mo KOO.  Mr. Stephen Sin Mo KOO, is deemed to be interested in all the ordinary shares registered in the name of Up Sky Investments Limited. 

 

Following the Share Transaction on 8 July 2011, the entire stake of UniVision Holdings Limited (it holds 183,736,000 shares of the Company) was transferred to Up Sky Investments Limited, a company that is wholly owned by Mr. Stephen Koo.  He is also interested in 17,223,700 ordinary shares in the Company. Therefore following the Share Transaction, he has a total direct and indirect interest in 279,703,700 ordinary shares in the Company, equivalent to 72.9% of the Company's total issued share capital.

 

Save as disclosed in this report, none of the Directors (or their immediate families) who held office at the end of the financial year had interests in the share capital of the Company during the financial year.

 

 

Directors' Rights to Acquire Shares or Debentures

At no time during the year were rights to acquire benefits by means of the acquisition of shares in or debentures of the Company granted to any director or their respective spouse or minor children, or were any such rights exercised by them; or was the Company, its holding company, or its subsidiaries a party to any arrangement to enable the directors of the Company to acquire by means of the acquisition of shares in, or debentures of any other body corporate.

 

 

 



DIRECTORS' REPORT

(Continued)

 

 

Substantial Shareholdings

As at 7 September 2015, the Directors had been informed of the following companies that held 3% or more of the Company's issued ordinary share capital:

 


Number of ordinary shares

% of total issued share capital

UniVision Holdings Limited (1)

183,736,000

47.9

Up Sky Investments Limited (2)

78,744,000

20.5

Hargreaves Lansdown (Nominees) Limited

31,260,820

8.1

Beaufort Nominees Limited

24,467,998

6.4

 

 

(1)    UniVision Holdings Limited is an investment holding company incorporated under the laws of the British Virgin Islands and was formerly owned by Mayne Management Limited. Up Sky Investments Limited acquired the entire stake from Mayne Management Limited on 8 July 2011 and became the major shareholder.

 

(2)  Up Sky Investments Limited is an investment holding company incorporated under the laws of the British Virgin Islands and is wholly-owned by Mr. Stephen Sin Mo KOO.

 

Payments to Creditors

The Group does not follow any code or standard on payment practice but instead the Group policy is to pay all creditors in accordance with agreed terms of business.

 

Political and Charitable Donations

During the year the Company made £80 charitable contributions (2014: Nil). No political contribution was made.

 

Employees

The Group values staff involvement at all levels of operations, and uses various means to train, inform and consult the employees.  The Group encourages the management to discuss regularly with the employees on both corporate and individual matters and discloses information to them that will increase their awareness of the financial and economic factors affecting the Group.

 

The Group recognises its obligations to provide a fair consideration on all vacancies towards people with disability and to ensure that such persons are not discriminated against on the grounds of their disability.  For those employees who become disabled during their employment period, the Group will make every effort to ensure that their employment will continue and that sufficient training is arranged.

 



DIRECTORS' REPORT

(Continued)

 

 

Annual General Meeting

The Annual General Meeting of the Company will be held at UniVision Engineering Limited, Unit 01A, 2/F Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong, on 10 October 2015 at 5:00 p.m.  The Notice of Meeting appears on page 75.

 

Annual Report

The annual report for the year ended 31 March 2015 will be uploaded on the Company's website www.uvel.com on 10 September, 2015 and the hard copy will be sent to shareholders by our Registrars, Computershare Investor Services (Jersey) Limited.

 

Auditor

HKCMCPA Company Limited, Certified Public Accountants remain as our auditor for the year. A resolution to re-appoint HKCMCPA Company Limited, Certified Public Accountants as auditor of the Company will be put to the forthcoming Annual General Meeting.

 

 

 

 

By Order of the Board

 

 

 

 

 

 

Mr. Stephen Sin Mo KOO 

Executive Chairman

 

Hong Kong

10 September 2015



REMUNERATION REPORT

 

 

The Remuneration Committee presents this report to shareholders on behalf of the Board.

 

Membership of Remuneration Committee

The Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH.

 

Policy Statement

The Remuneration Committee sets the remuneration and all other terms of employment of the Executive Directors with a vision to provide a package which is suitable for the responsibilities involved.  The remuneration of the Executive Directors is determined by the Remuneration Committee having regard to the performance and experience of individuals, the overall performance of the Group and market trends.

 

Directors' Remuneration

Details of individual director's remuneration for the year are set out in the table below:

 


Salary and

fees

Pension

scheme

contribution

Bonus

2015

Total

2014

Total


£

£

£

£

£







Executive Directors






Stephen Sin Mo KOO

23,996

120

-

24,116

-

Chun Pan WONG

50,474

1,400

4,159

56,033

50,318

Chun Hung WONG

-

-

-

-

62,685

Danny Kwok Fai YIP

40,379

1,400

3,327

45,106

43,584

Peter Yip Tak CHAN

20,512

720

3,343

24,575

-

Chun Hung WONG




-

49,542







Non-executive Director






Nicholas James LYTH

11,518

-

-

11,518

11,747







 

Directors' Interests in Contracts and Interests in Shares

Details of Directors' Interests in Contracts and Interests in Shares are given in the Directors' Report.

 



REPORT ON CORPORATE GOVERNANCE

 

 

Introduction

The Directors believe that their foremost function is to generate continuous profits for the Company's investors, and that this should be achieved by a policy of high standards of corporate governance, integrity and ethics.  As the Company is listed on AIM and not subject to the Listing Rules of the UK Listing Authority, it is not officially required to comply with the provisions detailed in the Combined Code on Corporate Governance.  However, it is the intention of the Board to manage the Company's and Group's affairs in accordance with this Code, in so far as is practical and appropriate for a public company of this size and complexity.  The following are a few examples on how the Directors have applied the principles of good corporate governance to manage the Company throughout the year.

 

Board of Directors

The Board directs and controls the Company and is responsible for strategy and operating performance.  It meets regularly throughout the year and has adopted a schedule of matters specifically reserved for its decision.

 

All Directors are elected by shareholders at the first opportunity after their initial appointment to the Board and to be re-elected thereafter at intervals of not more than three years.  Biographical information on all the Directors is listed in the Directors' and Senior Management's Biographies section to the annual report, which may help the shareholders to make a decision at the time of re-election.

 

Upon their appointments, the Directors are offered an opportunity to request information and training relevant to their legal and other duties.  They are also given written guidelines and rules defining their responsibilities within an AIM listed company.

 

The Board considers that all Non-executive Directors are independent of management and day to day operation, and free from any commercial relationship with the Company.  These Non-executive Directors do not participate in any of the Company's pension schemes or bonuses.  The Chairman of the Audit and Remuneration Committees is a Non-executive Director.

 

Nomination Committee

As the Board of Directors of the Company is relatively small, there is no separate Nomination Committee. All nominations to the Board are considered by all of the Directors.

 

Audit Committee

Our Audit Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH.  The Chairman of the Audit Committee has full discretion to invite any Executive Directors to attend its meetings.  The Audit Committee meets not less than twice per annum.

 



REPORT ON CORPORATE GOVERNANCE

(Continued)

 

 

The responsibilities of the Committee are to:

-     monitor the quality of the overall internal control system of all financial matters;

-     review the Company's Accounting Policies and ensure compliance with accounting standards;

-     ensure that the financial performance of the Company is properly measured and reported on;

-     consider the appointment/re-appointment of the external auditor;

-     review the conduct of the audit and discuss the audit fees;

-     review reports from the Auditors relating to the Company's accounting and internal controls;

-     to ensure the Company complies with the AIM Rules.

 

Remuneration Committee

Our Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH.  The Remuneration Committee meets as required. 

 

The responsibilities of the Committee are to:

-     determine the specific remuneration package for each Director including Director's fees, salaries, allowances, bonuses, options, benefits-in-kind; and

-     seek professional advice, including comparison with similar businesses, in order to correctly fulfil its duties, as the Committee deems appropriate.

 

In discharging its functions, the Committee may obtain independent external legal and other professional advices as it deems necessary.  The expense of such advice shall be borne by the Company.

 

Internal Control

The Board of Directors is responsible for ensuring that the Company maintains an internal financial control system with appropriate monitoring procedures for all Group companies.  The purpose of this system is to safeguard Company assets, maintain proper accounting records, and ensure that reliable financial information is used within the Group and for publication purposes.  However, the system is designed to manage rather than completely eliminate risk and can only provide reasonable but not absolute assurance against material misstatement.

 

In order to achieve the above responsibilities, the Board meets regularly and monitors the Company's internal financial control by reviewing the overall process and the performance of the systems, setting annual budgets and periodic forecasts, and seeking any prior approval for all significant expenditure.

 

The Group currently does not have an internal audit department and after extensive review and consideration, the Board has concluded that the existing control mechanisms are sufficient for the size of the Group.  This decision will be kept under review.

 

 



REPORT ON CORPORATE GOVERNANCE

(Continued)

 

 

Going Concern

After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future.  For this reason, they continue to adopt the going concern basis in preparing the Company's and Group's financial statements.

 

Investor Relations

The Company realises that effective communication can increase transparency and accountability to its shareholders; as such, the Company discloses its information to its shareholders through RNS (i.e. the news distribution service operated by the London Stock Exchange plc).  The same information can also be found on the Company's website (www.uvel.com).  The Company will make every effort to ensure that all price-sensitive information is released publicly and immediately.  If an immediate announcement is not possible, the Company will try to publicize the information at the earliest time possible to ensure that the shareholders and the public have fair access to it.

 

The Company will send the Annual Report and the notice of the Annual General Meeting (AGM) to all its shareholders.  This notice is also made available on RNS.  The Company recognises the importance of the shareholders' views and encourages them to attend the AGMs where they can share their opinions and raise direct queries and concerns towards the Directors, including the chairperson of each of the Board Committees.  The shareholders are also welcomed to discuss any issues on an informal basis at the conclusion of the AGMs.



STATEMENT OF DIRECTORS' RESPONSIBILITIES

 

 

The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.

 

The Directors are responsible for preparing financial statements for each financial year which give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss for that year. 

 

In preparing those financial statements, the Directors are required to:

 

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business.

 

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company.  They have general responsibility for taking such steps as are reasonably available to them to safeguard the assets of the Group and the Company to prevent and detect fraud and other irregularities.   

 


INDEPENDENT AUDITOR'S REPORT

TO THE SHAREHOLDERS OF

UNIVISION ENGINEERING LIMITED

(Incorporated in Hong Kong with limited liability)

 

 

We have audited the financial statements of UniVision Engineering Limited (the "Company") and its subsidiaries (collectively referred to as the "Group") set out on pages 21 to 74, which comprise the Consolidated and the Company's Statement of Financial Position as at 31 March 2015, and the Consolidated Statement of Comprehensive Income, the Consolidated and the Company's Statement of Changes in Equity and the Consolidated and the Company's Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

 

This report is made solely to the Company's shareholders, as a body, in compliance with the Alternative Investment Market Rules ("AIM Rules") for companies as published by the London Stock Exchange plc. Our audit work has been undertaken so that we might state to the Company's shareholders 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 shareholders as a body for this report or for the opinions we have formed.

 

Directors' responsibility for the financial statements

 

The Directors are responsible for the preparation of these financial statements in accordance with International Financial Reporting Standards 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.

 

Auditor's responsibility

 

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

 

Scope of the audit of the financial statements

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.


INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE SHAREHOLDERS OF

UNIVISION ENGINEERING LIMITED

(Incorporated in Hong Kong with limited liability)

 

 

Opinion

 

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company and the Group as at 31 March 2015 and their financial performance and cash flows for the year then ended, in accordance with International Financial Reporting Standards.

 

 

 

 

 

 

 

 

HKCMCPA Company Limited

Certified Public Accountants

 

PANG KING SZE, RUFINA

Practising Certificate number P05228

 

Hong Kong, China

10 September 2015

 

 


UNIVISION ENGINEERING LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2015

 


Notes

2015


2014



£


£

Continuing operations





Revenue

7(a)

6,713,991


8,854,802






Cost of sales

10

(4,885,202)


(6,562,989)






Gross profit


1,828,789


2,291,813






Other income

8

2,926


10,518

Other gains and losses

9

3,084


2,494,562

Selling and distribution expenses

10

(103,185)


(137,963)

Administrative expenses

10

(1,575,024)


(1,640,200)

Finance costs

12

(26,401)


(20,787)






Profit before income tax


130,189


2,997,943






Income tax credit/(expense)

13

13,023


(13,499)






Profit for the year from continuing operations


143,212


2,984,444






Discontinued operations





Loss for the year from discontinued operations


(30,657)


(79,714)






Profit for the year


112,555


2,904,730






Other comprehensive income/(loss), net of tax





Item that may be reclassified subsequently to profit or loss:





Exchange differences on translation foreign operations


51,339


(985,245)






Total comprehensive income for the year


163,894


1,919,485






Profit attributable to :





Equity shareholders of the Company





Profit from continuing operations


90,594


2,900,301

Loss from discontinued operations


(30,657)


(79,714)

Equity shareholders of the Company


59,937


2,820,587

Non-controlling interests


52,618


84,143








112,555


2,904,730






Total comprehensive income attributable to:




Equity shareholders of the Company


78,311


1,870,597

Non-controlling interests


85,583


48,888








163,894


1,919,485






Earnings per share - Basic and Diluted





Continuing and discontinued operations

14

0.02p


0.74p

Continuing operations

14

0.02p


0.76p



 

UNIVISION ENGINEERING LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2015

 


Notes

2015


2014



£


£

ASSETS





Non-current assets





Plant and equipment

16

47,629


43,886

Goodwill

17

25,830


25,830

Trade and other receivables

21

2,973,435


1,324,331






Total non-current assets


3,046,894


1,394,047






Current assets





Inventories

19

1,205,464


1,059,065

Trade and other receivables

21

4,323,003


14,299,649

Bank deposits

22

251,641


223,865

Cash and cash equivalents

22

1,221,707


379,860






Total current assets


7,001,815


15,962,439






Total assets


10,048,709


17,356,486






LIABILITIES AND EQUITY





Current liabilities





Trade and other payables

23

3,242,616


4,544,953

Current tax liability

24(a)

34,442


1,226,973

Loan and borrowings

25

1,122,052


440,582

Obligations under finance lease

26

7,694


6,844






Total current liabilities


4,406,804


6,219,352






Non-current liability





Obligations under finance lease

26

641


7,415






Total liabilities


4,407,445


6,226,767






Equity





Share capital

27

1,697,617


1,697,617

Reserves


3,551,167


9,098,833






Equity attributable to equity shareholders of the Company


5,248,784


10,796,450






Non-controlling interests


392,480


333,269






Total equity


5,641,264


11,129,719






Total liabilities and equity


10,048,709


17,356,486

 

The financial statements on pages 21 to 74 were authorised for issue by the board of directors on 10 September 2015 and were signed on its behalf by:

 

 

 

 

 

Stephen Sin Mo KOO, Director


Chun Pan WONG, Director



UNIVISION ENGINEERING LIMITED

COMPANY STATEMENT OF FINANCIAL POSITION

As at 31 March 2015

 


Notes

2015


2014



£


£

ASSETS





Non-current assets





Plant and equipment

16

32,248


17,297

Interests in subsidiaries

18

106,384


2,767,277

Trade and other receivables

21

2,973,435


-






Total non-current assets


3,112,067


2,784,574






Current assets





Inventories

19

841,910


744,381

Trade and other receivables

21

1,839,318


1,868,816

Bank deposits

22

251,641


223,865

Cash and cash equivalents

22

1,044,484


160,210






Total current assets


3,977,353


2,997,272






Total assets


7,089,420


5,781,846






LIABILITIES AND EQUITY





Current liabilities





Trade and other payables

23

2,257,803


1,444,776

Obligations under finance lease

26

7,694


6,844






Total current liabilities


2,265,497


1,451,620






Non-current liability





Obligations under finance lease

26

641


7,415






Total liabilities


2,266,138


1,459,035






Equity





Share capital

27

1,697,617


1,697,617

Reserves


3,125,665


2,625,194






Total equity


4,823,282


4,322,811






Total liabilities and equity


7,089,420


5,781,846

 

 

The financial statements on pages 21 to 74 were authorised for issue by the board of directors on 10 September 2015 and were signed on its behalf by:

 

 

 

 

 

Stephen Sin Mo KOO, Director


Chun Pan WONG, Director



UNIVISION ENGINEERING LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2015

 



Attributable to the equity shareholders of the Company







Share

capital


Share

premium


Retained earnings


Special capital reserve "A"


Special

capital reserve "B"


Statutory surplus reserves


Translation

reserve


Sub-total


Non-controlling interest


Total

equity



£


£


£


£


£


£


£


£


£


£





(Note 1)




(Note 2)


(Note 3)











Balance at 1 April 2013


1,697,617


2,192,640


2,349,944


155,876


143,439


7,927


2,620,968


9,168,411


284,381


9,452,792






















Comprehensive income:





















Profit or loss


-


-


2,820,587


-


-


-


-


2,820,587


84,143


2,904,730






















Other comprehensive income/(loss):





















Exchange difference arising on translation of foreign operations


-


-


-


-


-


-


(949,990)


(949,990)


(35,255)


(985,245)

Total other comprehensive loss for the year, net of tax


-


-


2,820,587


-


-


-


(949,990)


(949,990)


(35,255)


(985,245)






















Total comprehensive income


-


-


2,820,587


-


-


-


(949,990)


1,870,597


48,888


1,919,485






















Dividend paid in respect of 2013 year


-


-


(242,558)


-


-


-


-


(242,558)


-


(242,558)






















Total transactions with owners, recognised directly in equity


-


-


(242,558)


-


-


-


-


(242,558)


-


(242,558)






















Balance at 31 March 2014


1,697,617


2,192,640


4,927,973


155,876


143,439


7,927


1,670,978


10,796,450


333,269


11,129,719

Comprehensive income:





















Profit or loss


-


-


59,937


-


-


-


-


59,937


52,618


112,555






















Other comprehensive income:





















Exchange difference arising on translation of foreign operations


-


-


-


-


-


-


18,374


18,374


32,965


51,339

Total other comprehensive income for the year, net of tax


-


-


-


-


-


-


18,374


18,374


32,965


51,339






















Total comprehensive income


-


-


59,937


-


-


-


18,374


78,311


85,583


163,894






















Transfer to statutory surplus reserves


-


-


(6,926)


-


-


6,926


-


-


-


-

Effect on demerger


-


-


(4,014,851)


-


-


6,850


(722,990)


(4,730,991)


-


(4,730,991)

De-merger by dividend in specie


-


-


(791,425)


-


-


-


-


(791,425)


-


(791,425)

Dividend distributed by a subsidiary


-


-


-


-


-


-


-


-


(26,372)


(26,372)

Dividend paid in respect of 2014 year


-


-


(103,561)


-


-


-


-


(103,561)


-


(103,561)






















Total transactions with owners, recognised directly in equity


-


-


(4,916,763)


-


-


13,776


(722,990)


(5,625,977)


(26,372)


(5,652,349)






















Balance at 31 March 2015


1,697,617


2,192,640


71,147


155,876


143,439


21,703


966,362


5,248,784


392,480


5,641,264

 

The currency translation from Hong Kong Dollars ("HK$") to the presentation currency of Sterling Pound ("£") used in the financial statements has no impact on the available distributable reserves of the Company at 31 March 2015.

 

Notes:

 

1.          Share premium

 

The Company may by resolution reduce the share premium account in any manner authorised and subject to any conditions prescribed by law.

 

2.          Special capital reserve "A"

 

Pursuant to the Order of the High Court dated 20 November 2004, any future recoveries of the Company's accumulated provision for obsolete inventories and provision for bad debts amounting to HK$1,935,002 and HK$3,592,540 respectively will be credited to non-distributable special capital reserve "A" account.

 

3.          Special capital reserve "B"

 

By a special resolution passed on 30 July 2004 and Order of the High Court dated 20 November 2004, the authorised and issued capital of the Company was reduced from HK$159,245,000 divided into 31,849 ordinary shares of HK$5,000 each to HK$16,405,000 divided into 3,281 ordinary shares of HK$5,000 each. The reduction of capital was effected by cancellation of 28,568 ordinary shares of HK$5,000 each in the issued and paid up share capital of the Company. The Company established a non-distributable special capital reserve "B" account into which HK$2,071,307 was credited as a result of the capital reduction.



UNIVISION ENGINEERING LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2015

 



Attributable to equity shareholders of the Company





 

Share

capital


 

Share

premium


 Accumulated

losses


Special

capital

 reserve "A"


Special

capital

reserve "B"


Translation

reserve


Total

equity



£


£


£


£


£


£


£





(Note 1)




(Note 2)


(Note 3)




















Balance at 1 April 2013


1,697,617


2,192,640


(2,741,866)


155,876


143,439


608,479


2,056,185
















Comprehensive income:















Profit or loss


-


-


2,807,923


-


-


-


2,807,923
















Other comprehensive loss:















Exchange difference arising on translation of foreign operations


-


-


-


-


-


(298,739)


(298,739)

Total other comprehensive loss for the year, net of tax


-


-


-


-


-


(298,739)


(298,739)
















Total comprehensive income


-


-


2,807,923


-


-


(298,739)


2,509,184
















Dividend paid in respect of 2013 year


-


-


(242,558)


-


-


-


(242,558)
















Total transactions with owners, recognised directly in equity


-


-


(242,558)


-


-


-


(242,558)
















Balance at 31 March 2014


1,697,617


2,192,640


(176,501)


155,876


143,439


309,740


4,322,811
















Comprehensive income:















Profit or loss


-


-


789,219


-


-


-


789,219
















Other comprehensive income:















Exchange difference arising on translation of foreign operations


-


-


-


-


-


606,238


606,238

Total other comprehensive income for the year, net of tax


-


-


-


-


-


606,238


606,238
















Total comprehensive income


-


-


789,219


-


-


606,238


1,395,457
















Demerger by dividend in specie


-


-


(791,425)


-


-


-


(791,425)

Dividend paid in respect of 2014 year


-


-


(103,561)


-


-


-


(103,561)
















Total transactions with owners, recognised directly in equity


-


-


(894,986)


-


-


-


(894,986)
















Balance at 31 March 2015


1,697,617


2,192,640


(282,268)


155,876


143,439


915,978


4,823,282

 

The currency translation from Hong Kong Dollars ("HK$") to the presentation currency of Sterling Pound ("£") used in the financial statements has no impact on the available distributable reserves of the Company at 31 March 2015.

 

Notes:

 

1.          Share premium

 

The Company may by resolution reduce the share premium account in any manner authorised and subject to any conditions prescribed by law.

 

2.          Special capital reserve "A"

 

Pursuant to the Order of the High Court dated 20 November 2004, any future recoveries of the Company's accumulated provision for obsolete inventories and provision for bad debts amounting to HK$1,935,002 and HK$3,592,540 respectively will be credited to non-distributable special capital reserve "A" account.

 

3.          Special capital reserve "B"

 

By a special resolution passed on 30 July 2004 and Order of the High Court dated 20 November 2004, the authorised and issued capital of the Company was reduced from HK$159,245,000 divided into 31,849 ordinary shares of HK$5,000 each to HK$16,405,000 divided into 3,281 ordinary shares of HK$5,000 each. The reduction of capital was effected by cancellation of 28,568 ordinary shares of HK$5,000 each in the issued and paid up share capital of the Company. The Company established a non-distributable special capital reserve "B" account into which HK$2,071,307 was credited as a result of the capital reduction.



UNIVISION ENGINEERING LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 March 2015

 


Notes

2015


2014



£


£






Cash flows from operating activities





Profit before income tax


130,189


2,918,229






Adjustments for:





Interest expense

12

26,401


20,787

Interest income

8

(1,223)


(1,293)

Depreciation of plant and equipment

16

36,172


49,086

Impairment loss recognised on trade and other receivables

21

40,594


99,907

Allowance for obsolete inventories

19

-


9,660

Reversal of allowance for obsolete inventories

19

(25,427)


-

Write-off of inventories

9

-


47,444

(Gain)/loss on disposal of plant and equipment

9

(155)


2,675

Gain from forgiveness of debt

9

-


(2,496,353)








206,551


650,142

Changes in operating assets and liabilities:





Decrease/(increase) in inventories


11,652


(84,614)

Increase in trade and other receivables


(676,696)


(125,309)

Increase in trade and other payables


865,642


121,747






Cash generated from operations


407,149


561,966

Income tax paid


(39,120)


(13,360)






Net cash generated from operating activities


368,029


548,606






Cash flows from investing activities





Interest received

8

1,223


1,293

Purchase of plant and equipment


(35,554)


(16,002)

Proceeds from disposal of plant and equipment


673


365






Net cash used in investing activities


(33,658)


(14,344)






Cash flows from financing activities





Interest paid

12

(26,401)


(20,787)

Dividend paid to shareholders of the Company

15

(95,137)


(242,558)

Dividend paid to non-controlling interests


(27,342)


-

Repayment of finance lease liabilities


(7,068)


(7,162)

Proceeds from loan and borrowings


575,816


-

Repayment of loan and borrowings


-


(402,126)






Net cash generated from/(used in) financing activities


419,868


(672,633)






Net increase/(decrease) in cash and cash equivalents


754,239


(138,371)






Cash and cash equivalents at beginning of year


379,860


585,046






Effect of foreign exchange rate changes


87,608


(66,815)






Cash and cash equivalents at end of year

22

1,221,707


379,860

 



UNIVISION ENGINEERING LIMITED

COMPANY STATEMENT OF CASH FLOWS

For the year ended 31 March 2015

 


Notes

2015


2014



£


£






Cash flows from operating activities





Profit before income tax


789,219


2,807,923






Adjustments for:





Interest expense


1,149


1,164

Interest income


(869)


(986)

Depreciation of plant and equipment

16

14,605


16,494

Write-off of inventories

9

-


47,444

Loss on disposal of plant and equipment


38


2,675

Reversal of impairment loss


(727,046)


-

Gain from forgiveness of debt

9

-


(2,496,353)








77,096


378,361

Changes in operating assets and liabilities:





Increase in inventories


(4,750)


(61,579)

Decrease/(increase) in trade and other receivables


199,516


(587,051)

Decrease in amounts due from former subsidiaries


28,302


50,213

Increase in trade and other payables


582,765


208,025






Net cash generated from/ (used in) operating activities


882,929


(12,031)






Cash flows from investing activities





Interest received


869


986

Purchase of plant and equipment


(26,886)


(5,715)

Proceeds from disposal of plant and equipment


480


365






Net cash used in investing activities


(25,537)


(4,364)






Cash flows from financing activities





Interest paid


(1,149)


(1,164)

Dividend paid to shareholders of the Company


(95,137)


(242,558)

Repayment of finance lease liabilities


(7,068)


(7,162)






Net cash used in financing activities


(103,354)


(250,884)






Net increase/(decrease) in cash and cash equivalents


754,038


(267,279)






Cash and cash equivalents at beginning of year


160,210


456,758






Effect of foreign exchange rate changes


130,236


(29,269)






Cash and cash equivalents at end of year

22

1,044,484


160,210







1.      GENERAL

 

UniVision Engineering Limited ("the Company") is incorporated in Hong Kong with limited liability and its shares are listed on the Alternative Investment Market of the London Stock Exchange ("AIM").  The address of the registered office is Unit 1A, 2/F., Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong.

 

The financial statements are presented in Sterling Pound ("£"), which is the presentation currency of the Company.

 

The Company acts as an investment holding company. The Company and its subsidiaries (hereinafter collectively referred to as the "Group") are engaged in the supply, design, installation and maintenance of closed circuit television and surveillance systems and the sale of security system related products. The electronic and mechanical business was discontinued and demerged on 31 March 2015 and further details are presented in note 31 to the financial statements.  The principal activities of its subsidiaries are set out in note 18 to the financial statements.

 

 

2.      BASIS OF PREPARATION

 

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as issued by the International Accounting Standards Board ("IASB").

 

The financial statements have been prepared under the historical cost convention basis, as modified by the revaluation of financial assets and liabilities at fair value through profit or loss.

 

The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

 

The estimates and underlying assumptions 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.

 

Judgements made by management in the application of IFRSs that have significant effect on the financial statements and major sources of estimation uncertainty are discussed in note 4 in the financial statements.

 

 



3.      APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRSs")

 

(a)   New and revised  IFRSs that have been issued and effective

 

The following standards have been adopted by the Group and the Company for the first time for the year ended 31 March 2015:

 

-      Amendments to IAS 32 "Offsetting Financial Assets and Financial Liabilities" clarify the requirements relating to the offset of financial assets and liabilities.  Specifically, the amendments clarify the meaning of 'currently has a legally enforceable right of set-off' and 'simultaneous realisation and settlement'. The amendments require retrospective application.

 

-      Amendments to IAS 36 "Recoverable amount disclosures for non-financial assets" remove the requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives had been allocated when there has been no impairment or reversal of impairment of the related CGU. Furthermore, the amendments introduce additional disclosure requirements applicable to when the recoverable amount of an asset or a CGU is measured at fair value less costs of disposal. These new disclosures include the fair value hierarchy, key assumptions and valuation techniques used which are in line with the disclosure required by IFRS 13 "Fair Value Measurements". The amendments require retrospective application.

 

-      Amendments to IAS 39 "Novation of derivatives and continuation of hedge accounting" provide relief from the requirement to discontinue hedge accounting when a derivative designated as a hedging instrument arising from the novation should be included in the assessment and measurement of hedge effectiveness. The amendments require retrospective application.

 

-      IFRIC 21 "Levies" addresses the issue of when to recognise a liability to pay a levy. The interpretation defines a levy, and specifies that the obligation event that gives rise to the liability is the activity that triggers the payment of the levy, as identified by legislation. The interpretation provides guidance on how different levy arrangements should be accounted for, in particular, it clarifies that neither economic compulsion nor the going concern basis of financial statements preparation implies that an entity has a present obligation to pay a levy that will be triggered by operating in a future period.  IFRIC 21 requires retrospective application.

 

 

 

 



 

3.      APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRSs") (CONTINUED)

 

(b)   New and revised IFRSs that have been issued but are not yet effective

 

The following new and revised IFRSs, potentially relevant to the Group's and the Company's operations, have been issued and are mandatory for adoption by the Group and the Company for accounting periods beginning on or after 1 January 2015 or later periods. However, the Group and the Company have not early adopted them.

 

   IFRS 9 (2014) "Financial instruments"

   IFRS 14 "Regulatory deferral accounts"

   IFRS 15 "Revenue from contracts with customers"

   Amendments to IFRS 11 "Accounting for acquisitions of interests in joint operations"

   Amendments to IAS 16 and IAS 38 "Clarification of acceptable methods of depreciation and amortisation"

   Amendments to IAS 1 "Disclosure initiative"

   Amendments to IAS 19 "Defined benefit plans: employee contributions"

   Amendments to IAS 27 "Equity method in separate financial statements"

   Amendments to IFRS 10 and IAS 28 "Sale or contribution of assets between an investor and its associate or joint venture"

   Amendments to IFRS 10, IFRS 12 and IAS 28 "Investment entities: applying the consolidation exemption"

   Annual improvements to IFRSs 2010-2012 cycle

   Annual improvements to IFRSs 2011-2013 cycle

   Annual improvements to IFRSs 2012-2014 cycle

 

The Group and the Company have not applied any new or revised IFRSs that are not yet effective for the accounting year ended 31 March 2015.

 

 

 



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

 

4.1     Basis of consolidation

 

(a)     Subsidiaries

 

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.   Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

 

The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.

 

Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.

 

(b)     Separate financial statements

 

In the individual Company's statement of financial position, interests in subsidiaries are accounted for at cost less impairment loss. Cost includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the basis of dividend received and receivable.

 

Impairment testing of the interests in subsidiaries is required upon receiving a dividend from these investments if the dividend exceeds the total comprehensive income of the subsidiary for the period the dividend is declared or, if the carrying amount of investment in the separate financial statements exceeds the carrying amount in the consolidated financial statements, of the investee's net assets including goodwill.



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.1     Basis of consolidation (continued)

 

(c)     Non-controlling interests

 

Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to the Company, and in respect of which the Group has not agreed any additional terms with the holders of those interests which would result in the Group as a whole having a contractual obligation in respect of those interests that meets the definition of a financial liability. For each business combination, the Group can elect to measure any non-controlling interests either at fair value or at the non-controlling interest's proportionate share of the subsidiary's net identifiable assets.

 

Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from equity attributable to the equity shareholders of the Company. Non-controlling interests in the results of the Group are presented on the face of the consolidated statement of comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-controlling interests and the equity shareholders of the Company.

 

4.2     Segment reporting

 

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incurs expenses, including revenues and expenses that relate to transactions with other components of the Group. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Group's Executive Director, Mr. Stephen Sin Mo KOO is responsible for allocating resources and assessing performance of the operating segments.

 

4.3     Foreign currency

 

(a)     Functional and presentation currency

 

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The Consolidated and Company financial statements are presented in Sterling Pound ("£"), which is the Group's presentation currency. As the Company is listed on AIM, the directors consider that this presentation is more useful for its current and potential investors.

 

The functional currency of the Group's entity is summarised as follows:

 

1.

UniVision Engineering Limited


Hong Kong Dollars

("HK$")

2.

T-Com Technology Co. Limited


New Taiwan Dollars

("NTD")

3.

Leader Smart Engineering Limited


Hong Kong Dollars

("HK$")

4.

Leader Smart Engineering (Shanghai) Limited ("LSSH")


Renminbi Yuan

("RMB")

 

 



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.3     Foreign currency (continued)

 

(b)     Transactions and balances

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured.  Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges. 

 

Foreign exchange gains and losses that relate to borrowings and cash and bank balances are presented in the statement of comprehensive income within "finance income or cost". All other foreign exchange gains and losses are presented in the statement of comprehensive income within "administrative expense" or "other income".

 

Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences in respect of changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income.

 

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets, such as equities classified as available for sale, are included in other comprehensive income.

 

(c)     Group companies

 

The results and financial position of all the group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

 

(i)      assets and liabilities for each statement of financial position presented are translated at the closing rate at the end of the reporting period;

 

(ii)      income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

 

(iii)     all resulting exchange differences are recognised in other comprehensive income.

 

On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of loan and borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive income. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in the statement of comprehensive income as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.4     Plant and equipment

 

Plant and equipment is initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment loss. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use.

 

On disposal of an item of plant and equipment, the difference between the net disposal proceeds and its carrying amount is taken to profit or loss.

 

Depreciation is calculated using the straight-line method to allocate their depreciable amounts over the estimated useful lives as follows:

 

Furniture and fixtures

3 - 5 years

Computer equipment

2 - 5 years

Motor vehicles

3 years

Research assets

3 - 5 years

 

Fully depreciated plant and equipment is retained in the financial statements until the items are no longer in use and no further charge for depreciation is made in respect of these assets.

 

The residual values, useful life and depreciation method are reviewed at the end of each reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of plant and equipment. The effects of any revision are recognised in profit or loss when the changes arise.

 

Subsequent expenditure relating to plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in profit or loss when incurred.

 

4.5     Goodwill

 

Goodwill represents the excess of:

 

(a)     the aggregate of the fair value of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the Group's previously held equity interest in the acquiree; over

 

(b)     the net fair value of the acquiree's identifiable assets and liabilities measured as at the acquisition date.

 

When (b) is greater than (a), then this excess is recognised immediately in profit or loss as a gain on a bargain purchase.

 

Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business combination is allocated to each cash-generating unit, or groups of cash generating units, that is expected to benefit from the synergies of the combination and is tested annually for impairment. On disposal of a cash generating unit during the year, any attributable amount of purchased goodwill is included in the calculation of the profit or loss on disposal.



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.6     Impairment of assets

 

The carrying amounts of non-current assets, such as plant and equipment, are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated. In addition, for goodwill, the recoverable amount is estimated annually whether or not there is any indication of impairment.

 

Calculation of recoverable amount

 

The recoverable amount of an asset is the greater of its fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit).

 

Recognition of impairment losses

 

An impairment loss is recognised in profit or loss if the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds the recoverable amount. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs of disposal (if measurable), or value in use (if determinable).

 

Reversals of impairment losses

 

In respect of assets other than goodwill, an impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount. An impairment loss in respect of goodwill is not reversed (including those provided during the interim financial reporting).

 

A reversal of an impairment loss is limited to the asset's carrying amount that would have been determined had no impairment loss been recognised in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised.

 

4.7     Inventories

 

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method and comprises design costs, raw materials, direct labour, other direct costs 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 of completion and the estimated costs necessary to make the sale.

 



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.8     Financial instruments

 

Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument.

 

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.

 

4.8.1  Financial assets

 

Loans and receivables

 

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables (including trade and other receivables and bank balances and cash) are measured at amortised cost using the effective interest method, less any impairment (see accounting policy on impairment of loans and receivables below).

 

Interest income is recognised by applying the effective interest rate, except for short-term receivables where the recognition of interest would be immaterial.

 

 

Type of item


Nature and terms of item

 

1.

Bills receivable


Certain customers pay accounts receivable with bills receivable from Taiwan banks with maturities less than twelve months. These are also referred to as "bankers" acceptances, which are unsecured, interest-free and to be matured in twelve months.

 






2.

Loans


Unsecured temporary advances to the subsidiaries, which are interest-free and eliminated upon consolidation.

 






3.

Other receivables


They include:

 




a. Retention receivable under warranty provision among certain construction contracts for a period of twelve months

 




b. Accrued income from maintenance contracts, which are billed or collected within twelve months.

 

 



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.8     Financial instruments (continued)

 

4.8.1  Financial assets (continued)

 

Impairment of loans and receivables

 

Loans and receivables are assessed for indicators of impairment at the end of each reporting period.  Loans and receivables are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the loans and receivables, the estimated future cash flows of loans and receivables have been affected.

 

Objective evidence of impairment could include:

 

•      significant financial difficulty of the issuer or counterparty; or

 

•      breach of contract, such as default or delinquency in interest and principal payments; or

 

•      it becoming probable that the borrower will enter bankruptcy or financial re-organisation.  

 

For certain categories of loans and receivables, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

 

The amount of the impairment loss recognised is the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the loans and receivables' original effective interest rate.

 

The carrying amount of loans and receivables is reduced by the impairment loss directly for all loans and receivables with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss.

 

If, in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that, the carrying amount of the loan and receivable at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

 

 



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.8     Financial instruments (continued)

 

4.8.2  Financial liabilities and equity instruments

 

Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

 

Equity instrument

 

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

 

Financial liabilities

 

Financial liabilities (including trade and other payables and loan and borrowings) are subsequently measured at amortised cost, using the effective interest method.

 

Effective interest method

 

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Interest expense is recognised on an effective interest basis.

 

Derecognition

 

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

 

On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.

 

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

 

4.8.3  Offsetting financial instruments

 

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.9     Trade and other receivables

 

Trade and other receivables are initially recognised at fair value and thereafter stated at amortised cost less allowance for impairment of bad and doubtful debts, except where the receivables are interest-free loans made to related parties without any fixed repayment terms or the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less allowance for impairment of bad and doubtful debts.

 

4.10   Bank deposits

 

They represent bank deposits with maturities greater than three months, which are restricted as bank deposits held as collateral for performance bonds issued by the bank to customers.

 

4.11   Cash and cash equivalents

 

In the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

 

4.12   Trade and other payables

 

Trade and other payables are initially recognised at fair value and subsequently stated at amortised cost unless the effect of discounting would be immaterial, in which case they are stated at cost.

 

4.13   Interest-bearing borrowings

 

Interest-bearing borrowings are initially recognised at fair value less transaction costs. Subsequent to initial recognition, the interest-bearing borrowings are stated at amortised cost with any difference between the amount initially recognised and redemption value being recognised in the consolidated statement of comprehensive income over the period of the borrowings together with any interest and fees payable using the effective interest method.

 

4.14   Share capital

 

Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities.  Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

 



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.15   Revenue recognition

 

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and rendering of services in the ordinary course of the Group's activities. Revenue is shown net of business tax, value-added tax, rebates and discounts, and after eliminating sales within the Group.

 

The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that future economic will flow to the entity and when specific criteria have been met for each of the Group's activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

 

(i)      Construction contracts

 

Revenue from construction contracts is recognised when the outcome of a construction contract can be estimated reliably:

 

§  revenue from a fixed price contract is recognised using the percentage of completion method, measured by reference to the percentage of contract costs incurred to date to estimated total contract costs for the contract; and

 

§  revenue from a cost plus contract is recognised by reference to the recoverable costs incurred during the period plus an appropriate proportion of the total fee, measured by reference to the proportion that costs incurred to date bear to the estimated total costs of the contract.

 

When the outcome of a construction contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs incurred that it is probable will be recoverable.

 

(ii)      Maintenance contracts

 

Revenue from maintenance contracts is recognised on a straight line basis over the term of the maintenance contract.

 

(iii)     Product sales

 

Revenue from product sales is recognised on the transfer of risks and rewards of ownership, which generally coincides with the delivery of goods to customers and the passing of title to customers.

 

(iv)     Interest income

 

Interest income is recognised as it accrues using the effective interest method.

 

(v)     Dividend income

 

Dividend income from investments is recognised when the shareholder's right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably).



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.16   Construction contracts

 

When the outcome of a construction contract can be estimated reliably, contract costs are recognised as an expense by reference to the stage of completion of the contract at the end of the reporting period. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. When the outcome of a construction contract cannot be estimated reliably, contract costs are recognised as an expense in the period in which they are incurred.

 

Contracts in progress at the end of the reporting period are recorded in the statement of financial position at the net amount of costs incurred plus recognised profit less recognised losses and progress billings, and are presented under the caption of "Trade and other receivables" or "Trade and other payables" in the statement of financial position as the "Amounts due from customers for contracts-in-progress" (as an asset) or the "Amounts due to customers for contracts-in-progress" (as a liability), as applicable. Progress billings not yet paid by the customer are included in the statement of financial position. Amounts received before the related work is performed are included in the statement of financial position, as a liability, as "Advances received".

 

4.17   Borrowing costs

 

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale are added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale.  Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

 

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

 

4.18   Leases

 

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

 

The Group as lessor

 

Rental income from operating leases is recognised in profit or loss on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised as an expense on a straight-line basis over the lease term.

 

The Group as lessee

 

Operating lease payments are recognised as an expense on a straight-line basis over the lease term.  In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis.



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.19   Employee benefit

 

These comprise short term employee benefits and contributions to defined contribution retirement plans.

 

Short-term employee benefits, including salaries, annual bonuses, paid annual leave, leave passage, contributions to defined contribution retirement plans and the cost of non-monetary benefits are accrued in the year in which the associated services are rendered by employees of the Group. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values.

 

Contributions to the defined contribution scheme are charged to profit or loss when incurred.

 

4.20   Income tax

 

Income tax expense for the year comprises current and deferred tax. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

 

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

 

Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

 

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.  

 

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

 

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.



4.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

4.21   Financial guarantees issued, provisions and contingent liabilities

 

(i)       Financial guarantees issued

 

Financial guarantees are contracts that require the issuer (i.e. the "guarantor") to make specified payments to reimburse the beneficiary of the guarantee (the "holder") for a loss the holder incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument.

 

Where the Group issues a financial guarantee, the fair value of the guarantee is initially recognised as deferred income within trade and other payables. The fair value of financial guarantees issued at the time of issuance is determined by reference to fees charged in an arm's length transaction for similar services, when such information is obtainable, or is otherwise estimated by reference to interest rate differentials, by comparing the actual rates charged by lenders when the guarantee is made available with the estimated rates that lenders would have charged, had the guarantees not been available, where reliable estimates of such information can be made. Where consideration is received or receivable for the issuance of the guarantee, the consideration is recognised in accordance with the Group's policies applicable to that category of asset. Where no such consideration is received or receivable, an immediate expense is recognised in profit or loss on initial recognition of any deferred income.

 

The amount of the guarantee initially recognised as deferred income is amortised in profit or loss and provisions are recognised in accordance with (ii) below if and when (1) it becomes probable that the holder of the guarantee will call upon the Group under the guarantee, and (2) the amount of that claim on the Group is expected to exceed the amount currently carried in trade and other payables in respect of that guarantee, i.e. the amount initially recognised, less accumulated amortisation.

 

(ii)      Other provisions and contingent liabilities

 

Provisions are recognised for other liabilities of uncertain timing or amount when the Group or the Company 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.

 

4.22   Dividend distributions

 

Dividend distributions to the Company's shareholders are recognised as liabilities in the Group's and the Company's financial statements in the period in which the dividends are approved by the Company's shareholders or directors, where appropriate.

 

4.23   Events after the reporting period

 

Events after the reporting period that provide additional information about the Group's and the Company's position at the end of the reporting period or those that indicate the going concern assumption is not appropriate are adjusting events and are reflected in the financial statements. Events after the reporting period that are not adjusting events are disclosed in the notes to the financial statements when material.

 



5.      CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

 

Critical judgements in applying accounting policies

 

In the process of applying the accounting policies, Management has made the following judgements that have the most significant effect on the amounts recognised in the financial statements (apart from those involving estimations, which are dealt with below).

 

(i)       Estimation of contract costs

 

Estimated costs to complete contracts are judged by the Directors through the application of their experience and knowledge of the industry in which the Group operates. However, contract performance can be difficult to predict accurately.  The Directors believe that contract budgets do not deviate materially from actual costs incurred due to a strong cost control system with regular reviews of budgets which highlight any incidences that could affect estimated costs to completion.

 

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting periods, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

 

Key sources of estimation uncertainty

 

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

 

(i)       Impairment of assets

 

The Group has to exercise judgement in determining whether an asset is impaired or the event previously causing the asset impairment no longer exists, particularly in assessing: (1) whether an event has occurred that may affect the asset value or such event affecting the asset value has not been in existence; (2)  whether the carrying value of an asset can be supported by the net present value of future cash flows which are estimated based upon the continued use of the asset or derecognition; and (3) the appropriate key assumptions to be applied in preparing cash flow projections including whether these cash flow projections are discounted using an appropriate rate. Changing the assumptions selected by management to determine the level of impairment, including the discount rates or the growth rate assumptions in the cash flow projections, could materially affect the net present value used in the impairment test.

 



5.      CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

 

Key sources of estimation uncertainty (continued)

 

(ii)      Impairment of trade and other receivables

 

The estimation of impairment of trade and other receivables includes an assessment of recoverability of individual account balances and a review of ageing analysis of trade and other receivables by the Directors.  The Directors will also review the credit history of customers in assessing the recoverability of trade and other receivables.  When any indication comes to their attention that a trade and other receivable might not be recovered in full, impairment will be made and recognised as an expense in the consolidated statement of comprehensive income.  As at 31 March 2015, the total carrying amount of trade and other receivables was £4,323,003 (2014: £14,299,649).

 

(iii)     Plant and equipment and depreciation

 

The Group determines the estimated useful lives, residual values and related depreciation charges for the Group's plant and equipment. This estimate is based on the historical experience of the actual useful lives and residual values of plant and equipment of similar nature and functions. The Group will revise the depreciation charge where useful lives and residual values are different to those previously estimated, or it will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold.

 

(iv)     Income taxes

 

The Group is subject to income tax in different jurisdiction in Hong Kong, Taiwan and the PRC.  Significant estimates are required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

 

As at 31 March 2015, the Group has unused tax losses of £4,746,391 (2014: £4,561,755) available for offset against future profits. A deferred tax asset of £783,154 (2014: £752,681) has not been recognised in respect of the unused tax losses. In cases where there are future profits generated to utilise the tax losses, a material deferred tax asset may arise, which would be recognised in the consolidated statement of comprehensive income for the period in which such future profits are recorded.

 



6.      FINANCIAL INSTRUMENTS

 

(a)      Categories of financial instruments

 



2015


2014



£


£






Financial assets:





Loans and receivables





- Trade and other receivables


4,323,003


14,299,649

- Bank deposits


251,641


223,865

- Cash and bank balances


1,221,707


379,860






Financial liabilities:





- Trade and other payables


3,242,616


4,544,953

- Loan and borrowings


1,122,052


440,582

- Obligation under finance lease


8,335


14,259

 

(b)     Financial risk management objectives and policies

 

The Group's major financial instruments include loan and borrowings, trade and other receivables and trade and other payables. Details of these financial instruments are disclosed in the respective notes. The risks associated with these financial instruments include currency risk, interest rate risk, credit risk and liquidity risk.  The policies on how these risks are mitigated are set out below.  Management manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.

 

(i)      Market risk

 

(1)   Currency risk

 

Certain entities in the Group have foreign currency transactions and have foreign currency denominated monetary assets and liabilities, which expose the Group to foreign currency risk. The Company has foreign currency transactions, which expose the Company to foreign currency risk.

 

The carrying amounts of the Group's and the Company's foreign currency denominated monetary assets and monetary liabilities, mainly represented by trade and other receivables, cash and bank balances, trade and other payables and loan and borrowings, at the end of the reporting period are as follows:

 



The Group


The Company



Assets


Liabilities


Assets


Liabilities



2015


2014


2015


2014


2015


2014


2015


2014


















NTD


123,413,717


77,729,425


100,013,562


56,222,390


-


-


-


-

RMB


1,129


113,969,896


5,009,660


42,914,220


-


-


5,009,660


5,081,515

USD


54,560


23,444


21,320


-


-


-


-


-

HK$


34,982,030


29,993,818


19,577,077


12,218,181


34,980,407


28,884,579

`

19,481,353


12,034,097

 

The Group currently does not have any policy on hedges of foreign currency risk.  However, management monitors the foreign currency risk exposure and will consider hedging significant foreign currency risk should the need arise.



6.      FINANCIAL INSTRUMENTS (CONTINUED)

 

(b)     Financial risk management objectives and policies (continued)

 

(i)      Market risk (continued)

 

(1)   Currency risk (continued)

 

Sensitivity analysis

 

The following table details the Group's sensitivity to a 5% increase and decrease in Sterling against the relevant foreign currencies and all other variables were held constant.  5% (2014: 5%) is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currencies denominated monetary items and adjusts their translation at the end of the reporting period for a 5% (2014: 5%) change in foreign currency rates.  A positive/(negative) number indicates a decrease/(increase) in post-tax profit/(loss) for the year when Sterling strengthens 5% (2014: 5%) against the relevant foreign currencies.  For a 5% (2014: 5%) weakening of Sterling against the relevant currency, there would be an equal but opposite impact on the post-tax profit/(loss) for the year.

 



2015


2014



£


£

NTD





Post-tax profit for the year


26,609


22,310






RMB





Post-tax (loss)/profit for the year


(28,670)


361,753






USD





Post-tax profit for the year


1,188


746






HK$





Post-tax profit for the year


70,595


72,468

 

(2)   Interest rate risk

 

The Group and the Company is exposed to fair value interest rate risk in relation to fixed rate bank deposits and borrowings at fixed rates. The Group and the Company is exposed to cash flow interest rate risk due to fluctuation of the prevailing market interest rate on certain bank borrowings which carry at prevailing market interest rates as shown in note 25.  The Group currently does not have an interest rate hedging policy.  However, Management monitors interest rate exposure and will consider hedging significant interest rate exposure should the need arises.

 

The Group's and the Company's exposures to interest rates on financial liabilities are detailed in the liquidity risk management section of this note.

 



6.      FINANCIAL INSTRUMENTS (CONTINUED)

 

(b)     Financial risk management objectives and policies (continued)

 

(i)      Market risk (continued)

 

(2)   Interest rate risk (continued)

 

Sensitivity analysis

 

The sensitivity analysis below has been determined based on the change in interest rates and the exposure to interest rates for the non-derivative financial liabilities at the end of the reporting period and on the assumption that the amount outstanding at the end of the reporting period was outstanding for the whole year and held constant throughout the financial year.  The 25 basis points increase or decrease represents the Management's assessment of a reasonably possible change in interest rates over the period until the next fiscal year.  The analysis is performed on the same basis for 2014.

 

For the year ended 31 March 2015, if interest rates had been 25 basis points higher/lower, with all other variables held constant, the Group's post-tax profit for the year would increase/decrease by approximately £2,117 (2014: £1,425).

 

(ii)     Credit risk

 

At 31 March 2015, the Group's and the Company's maximum exposure to credit risk in the event of the counterparties' failure to perform their obligations in relation to each class of recognised financial assets is the carrying amount of those assets as stated in the consolidated statement of financial position.

 

The Group's credit risk is primarily attributable to its trade and other receivables. In order to minimise the credit risk, the Management of the Group has a credit policy in place and the exposures to these credit risks are monitored on an ongoing basis.  Credit evaluations of its customers' financial position and condition are performed on each and every major customer periodically.  These evaluations focus on the customer's past history of making payments when due and current ability to pay, and take into account information specific to the customer as well as pertaining to the economic environment in which the customer operates.  Debts are usually due within 90 days from the date of billing.

 

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer.  The default risk of the industry and country in which customers operate also has an influence on credit risk. At the end of the reporting period, the Group had no significant concentrations of credit risk where individual trade and other receivables balance exceed 10% of the total trade and other receivables at the end of the reporting period.

 

The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies. Also, the Group has no significant concentration of credit risk, with exposure spread over a number of counterparties and customers.

 

Further quantitative disclosures in respect of the Group's and the Company's exposure to credit risk arising from trade and other receivables are set out in note 21.

 



6.      FINANCIAL INSTRUMENTS (CONTINUED)

 

(b)     Financial risk management objectives and policies (continued)

 

(iii)    Liquidity risk

 

In managing the liquidity risk, the Group's policy is to regularly monitor and maintain an adequate level of cash and cash equivalents determined by Management to finance the Group's operations. Management also needs to ensure the continuity of funding for both the short and long terms, and to mitigate the effects of cash flow fluctuation. At 31 March 2015, the Group had aggregate banking facilities of £2,412,189 (2014: £2,194,840), of which £1,290,137 were unused (2014: £1,754,258).

 

The following table details the contractual maturities of the Group's and the Company's financial liabilities at the end of the reporting period, which is based on the undiscounted cash flows and the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.

 

The Group

 


2015


Weighted


Within


More than


More than




Carrying


average


1 year


1 year but


2 years but


Total


amount


effective


or on


less than


less than


undiscounted


at 31


interest rate


Demand


2 years


5 years


cash flow


March 2015


%


£


£


£


£


£

Non-derivative financial liabilities:












Loan and borrowings

3.64% - 3.76%


1,127,117


-


-


1,127,117


1,122,052

Trade and other payables



3,242,616


-


-


3,242,616


3,242,616

Obligations under finance lease

3.25%


8,944


745


-


9,689


8,335
















4,378,677


745


-


4,379,422


4,373,003













Financial guarantee











Maximum amount guaranteed



-


-


-


-


-

 

 



6.      FINANCIAL INSTRUMENTS (CONTINUED)

 

(b)     Financial risk management objectives and policies (continued)

 

(iii)    Liquidity risk (continued)

 

The Group

 


2014


Weighted


Within


More than


More than




Carrying


average


1 year


1 year but


2 years but


Total


amount


effective


or on


less than


less than


undiscounted


at 31


interest rate


Demand


2 years


5 years


cash flow


March 2014


%


£


£


£


£


£

Non-derivative financial liabilities:












Loan and borrowings

3.64% - 3.76%


445,213


-


-


445,213


440,582

Trade and other payables



4,544,953


-


-


4,544,953


4,544,953

Obligations under finance lease

3.25%


7,956


7,956


664


16,576


14,259
















4,998,122


7,956


664


5,006,742


4,999,794













Financial guarantee












Maximum amount guaranteed



7,860,000


-


-


7,860,000


7,860,000

 

The Company

 


2015


Weighted


Within


More than


More than




Carrying


average


1 year


1 year but


2 years but


Total


Amount


effective


or on


less than


less than


undiscounted


at 31


interest rate


demand


2 years


5 years


cash flow


March 2015


%


£


£


£


£


£

Non-derivative financial liabilities:












Loan and borrowings



-


-


-


-


-

Trade and other payables



2,257,803


-


-


2,257,803


2,257,803

Obligations under finance lease

3.25%


8,944


745


-


9,689


8,335
















2,266,747


745


-


2,267,492


2,266,138


 



6.      FINANCIAL INSTRUMENTS (CONTINUED)

 

(b)     Financial risk management objectives and policies (continued)

 

(iii)    Liquidity risk (continued)

 

The Company

 


2014


Weighted


Within


More than


More than




Carrying


average


1 year


1 year but


2 years but


Total


Amount


effective


or on


less than


less than


undiscounted


at 31


interest rate


demand


2 years


5 years


cash flow


March 2014


%


£


£


£


£


£

Non-derivative financial liabilities:












Loan and borrowings



-


-


-


-


-

Trade and other payables



1,444,776


-


-


1,444,776


1,444,776

Obligations under finance lease

3.25%


7,956


7,956


664


16,576


14,259
















1,452,732


7,956


664


1,461,352


1,459,035

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c)      Fair value

 

The fair values of financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis. Balances with subsidiaries are unsecured, interest free and have no fixed repayment terms.

 

The Directors of the Company consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate to their fair values at the end of the reporting period.

 

(d)     Capital risk management

 

The Group's primary objectives when managing capital are to safeguard the Group's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

 

The Group actively and regularly reviews and manages its capital structure to maintain a balance between the higher shareholder returns that might be possible with a higher level of borrowings and the advantages and security afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic conditions.

 

The Group monitors its capital structure on the basis of a net debt-to-adjusted capital ratio.  For this purpose the Group defines net debt as total debt (which includes bank borrowings and other financial liabilities) less bank deposits and cash and cash equivalents. Adjusted capital comprises all components of equity less unaccrued proposed dividends.

 



6.      FINANCIAL INSTRUMENTS (CONTINUED)

 

(d)     Capital risk management (continued)

 

During 2015, the Group's strategy, which was unchanged from 2014, was to maintain the net debt-to-adjusted capital ratio as low as feasible.  In order to maintain or adjust the ratio, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. 

 

Neither the Company nor any of its subsidiary undertakings are subject to externally imposed capital requirements.

 

The net debt-to-adjusted capital ratios of the Group and the Company at the end of the reporting period were as follows:

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£

Current liabilities









Trade and other payables


3,242,616


4,544,953


2,257,803


1,444,776

Loan and borrowings


1,122,052


440,582


-


-

Current tax liability


34,442


1,226,973


-


-

Obligation under finance lease


7,694


6,844


7,694


6,844



4,406,804


6,219,352


2,265,497


1,451,620

Non-current liabilities









Obligation under finance lease


641


7,415


641


7,415










Total debt


4,407,445


6,226,767


2,266,138


1,459,035










Less: cash and bank balances


1,221,707


379,860


1,044,484


160,210










Net debt


3,185,738


5,846,907


1,221,654











Total equity


5,641,264


11,129,719


4,823,282











Net debt-to-adjusted capital ratio


56%


53%


25%


 

 



7.      SEGMENT INFORMATION

 

Management has determined the operating segments based on the reports reviewed by the chief operating decision maker, being the chief executive officer, that are used to make strategic decisions.

 

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on types of goods or services delivered or provided. The Group's reportable operating segments are summarised as follows:

 

-        Security and surveillance

-        Electrical and mechanical #

 

# Electrical and mechanical business was discontinued in the current year and demerged from the Group by distribution of a dividend in specie to its shareholders on 31 March 2015 (see note 31).

 

(a)      Segment revenues and results

 

The following is an analysis of the Group's revenue and results by operating segment:

 



Year ended 31 March 2015



Security and surveillance


Electrical and mechanical #


 

Total



£


£


£

Segment revenue by major products and services:







- Construction contracts


3,334,783


51,129


3,385,912

- Maintenance contracts


2,778,722


-


2,778,722

- Product sales


600,486


-


600,486

Revenue from external customers


6,713,991


51,129


6,765,120








Segment profit/(loss)


156,590


(30,657)


125,933

Finance costs


(26,401)


-


(26,401)

Profit/(loss) before income tax


130,189


(30,657)


99,532

 



Year ended 31 March 2014



Security and surveillance


Electrical and mechanical #


 

Total



£


£


£

Segment revenue by major products and services:







- Construction contracts


5,634,350


71,158


5,705,508

- Maintenance contracts


2,564,746


-


2,564,746

- Product sales


655,706


-


655,706

Revenue from external customers


8,854,802


71,158


8,925,960








Segment profit/(loss)


3,018,730


(79,714)


2,939,016

Finance costs


(20,787)


-


(20,787)

Profit/(loss) before income tax


2,997,943


(79,714)


2,918,229

 



7.      SEGMENT INFORMATION (CONTINUED)

 

(b)     Segment assets and liabilities

 

The following is an analysis of the Group's assets and liabilities by operating segment:

 



At 31 March 2015



Security and surveillance


Electrical and mechanical #


 

Total



£


£


£








Segment assets


10,048,709


-


10,048,709

Unallocated assets


-


-


-

Consolidated total assets


10,048,709


-


10,048,709








Segment liabilities


4,407,445


-


4,407,445

Unallocated liabilities


-


-


-

Consolidated total liabilities


4,407,445


-


4,407,445

 



At 31 March 2014



Security and surveillance


Electrical and mechanical #


 

Total



£


£


£








Segment assets


4,913,700


12,442,786


17,356,486

Unallocated assets


-


-


-

Consolidated total assets


4,913,700


12,442,786


17,356,486








Segment liabilities


2,567,164


3,659,603


6,226,767

Unallocated liabilities


-


-


-

Consolidated total liabilities


2,567,164


3,659,603


6,226,767

 

 

 



7.      SEGMENT INFORMATION (CONTINUED)

 

(c)      Other segment information

 

Amounts regularly provided to the chief operating decision maker but not included in the measure of segment profit or segment assets and not allocated to any operating segments:

 



Year ended 31 March 2015



Security and surveillance


Electrical and mechanical #


 

Total



£


£


£








Capital expenditure


35,554


-


35,554

Depreciation


36,172


-


36,172

 



Year ended 31 March 2014



Security and surveillance


Electrical and mechanical #


 

Total



£


£


£








Capital expenditure


16,002


-


16,002

Depreciation


49,086


-


49,086

 

*        Capital expenditure represented plant and equipment.

 

(d)     Geographical segments

 

In determining the Group's geographical segments, revenues are attributed to the segments based on the location of the customers and assets are attributed to the segments based on the location of the assets.

 

No further geographical segment information is presented as the Group's revenue is materially derived from customers based in one geographic segment comprising Hong Kong, Macau, Taiwan and the PRC, and all of the Group's assets are located in the same geographic segment.

 

(e)     Information about major customers

 

Revenues of approximately £1,695,699 (2014: £4,485,347) are derived from one single external customers (2014: three), who contributed to 10% or more of the Group's revenue for 2015 fiscal year.

 

 



8.      OTHER INCOME

 



2015


2014



£


£






Interest income


1,223


1,293

Sundry income


1,703


9,225








2,926


10,518

 

 

9.      OTHER GAINS AND LOSSES

 



2015


2014



£


£






Gain/(loss) on disposal of plant and equipment


155


(2,675)

Foreign exchange gains


1,588


7,601

Impairment loss recognised on trade and other receivables


(40,594)


(99,907)

Recovery from bad debts (note 21(a))


16,508


44,617

Reversal of allowance for obsolete inventories


25,427


-

Write-off of inventories


-


(47,444)

Gain from forgiveness of debt


-


2,496,353








3,084


2,398,545

 

 

10.    EXPENSES BY NATURE

 



2015


2014



£


£






Cost of inventories recognised as expenses


2,215,363


3,342,475

Sub-contracting costs


1,582,967


2,264,316

Allowance for obsolete inventories


-


9,660

Depreciation - leased plant and equipment


8,835


10,742

Depreciation - owned plant and equipment


27,340


38,344

Operating lease charges - minimum lease payments


138,273


155,669

Research and development costs


13,204


11,037

Selling and distribution cost


23,678


24,039

Other expenses


700,968


664,191

Staff costs, including directors' remuneration





Wages and salaries


1,717,344


1,766,704

Pension scheme contributions


98,171


70,788



1,815,515


1,837,492

Auditor's remuneration





- audit services (parent company)


37,268


38,042

Total cost of sales, selling and distribution and administrative expenses


6,563,411


8,396,007



11.    DIRECTORS' REMUNERATION

 

Directors' remuneration for the year is disclosed as follows:

 

 
 
Salaries, bonuses and allowances
 
Pension scheme contributions
 
 
2015
 
 
£
 
£
 
£
Executive directors
 
 
 
 
 
 
Stephen Sin Mo KOO
 
23,996
 
120
 
24,116
Yip Tak CHAN(appointed on 3 October 2014)
 
23,855
 

720
 
24,575
Chun Pan WONG
 
54,633
 
1,400
 
56,033
Danny Kwok Fai YIP
 
43,706
 
1,400
 
45,106
 
 
146,190
 
3,640
 
149,830
 
 
 
 
 
 
 
Non-executive director
 
 
 
 
 
 
Nicholas James LYTH
 
11,518
 
-
 
11,518
 
 
 
 
 
 
 
 
 
157,708
 
3,640
 
161,348

 

 

 
 
Salaries, bonuses and allowances
 
Pension scheme contributions
 
 
2014
 
 
£
 
£
 
£
Executive directors
 
 
 
 
 
 
Stephen Sin Mo KOO
 
                    -
 
-
 
-
Chun Pan WONG
 
49,102
 
1,216
 
50,318
Chun Hung WONG(resigned on 31 December 2013)
 
48,630
 
911
 
49,541
Danny Kwok Fai YIP
 
 42,369
 
1,216
 
43,585
 
 
140,101
 
3,343
 
143,444
 
 
 
 
 
 
 
Non-executive director
 
 
 
 
 
 
Nicholas James LYTH
 
11,671
 
-
 
11,671
 
 
 
 
 
 
 
 
 
151,772
 
3,343
 
155,115

       

 

 

12.    FINANCE COSTS

 



2015


2014



£


£






Interest on bank loans and other borrowings wholly repayable within one year


25,252


19,623

Finance charge on obligation under finance lease


1,148


1,164








26,400


20,787

 



13.    INCOME TAX IN THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

(a)   Income tax in the consolidated statement of comprehensive income:

 



2015


2014



£


£






Income tax (credit)/expense










Hong Kong profits tax


-


-

PRC income tax


-


-

Taiwan income tax


(13,023)


13,499








(13,023)


13,499

 

No Hong Kong profits tax has been provided for in the financial statements as the Company has unused tax losses to offset against its taxable profit during the year.

 

Taxes for subsidiaries are calculated using the rates prevailing in their local jurisdictions, whereas PRC income tax rate is charged at 25% (2014: 25%) and Taiwan income rate is charged at 17% (2014: 17%).

 

(b)   Reconciliation between income tax expense and accounting profit at the applicable tax rates:

 



2015


2014



£


£






Profit before income tax


130,189


2,918,229






Notional tax on profit before income tax, calculated at the rates applicable to profit in the tax jurisdictions concerned


26,778


480,655

Tax effect of non-taxable income


(7,272)


(421,138)

Tax effect of non-deductible expenses


14,647


33,618

Tax effect of temporary differences not recognised


(2,403)


(2,341)

Utilisation of tax losses unrecognised deferred tax assets


(22,361)


(58,541)

Tax adjustments


(22,412)


(18,754)






Income tax (credit)/expense


(13,023)


13,499

 

 

14.    EARNINGS PER SHARE

 

The calculation of basic earnings per share is based on the profit attributable to the equity shareholders of the Company for the year of £59,937 from continuing and discontinued operations (2014: £2,820,587) and for the year of £90,594 (2014: £2,900,301), and the weighted average of 383,677,323 (2014: 383,677,323) ordinary shares in issue during the year.

 

There were no potential dilutive instruments at either financial year end.

 

 



15.    DIVIDENDS

 

(i)     Dividends payable to equity shareholders of the Company attributable to the year:

 



2015


2014



£


£






Special dividend declared and payable of 0.2 pence per ordinary share


791,425


-






Final dividend proposed after the end of the reporting period of 0.034 pence per ordinary share (2014: 0.024 pence per ordinary share)


130,286


92,571

 

The final dividend proposed after the end of the reporting period has not been recognised as a liability at the end of the reporting period.

 

(ii)    Dividends payable to equity shareholders of the Company attributable to the previous financial year, approved and paid during the year

 



2015


2014



£


£






Final dividend in respect of the previous financial year, approved and paid during the year, of 0.024 pence per ordinary share (2014: 0.063 pence per ordinary share)


130,561


242,558

 

 



16.    PLANT AND EQUIPMENT

 

The Group

 



Furniture and fixtures


Computer

equipment


Motor

vehicles


Research

assets


Total



£


£


£


£


£

Cost











At 1 April 2013


207,099


168,190


152,332


571,194


1,098,815

Additions


9,049


6,953


-


-


16,002

Disposals


-


(2,440)


(6,079)


-


(8,519)

Foreign translation difference


(22,693)


(17,803)


(15,009)


(61,994)


(117,499)












At 31 March 2014


193,455


154,900


131,244


509,200


988,799












At 1 April 2014


193,455


154,900


131,244


509,200


988,799

Additions


4,691


6,229


24,633


-


35,553

Disposals


(122)


-


(5,288)


-


(5,410)

Foreign translation difference


19,394


16,452


15,851


48,977


100,674












At 31 March 2015


217,418


177,581


166,440


558,177


1,119,616












Accumulated depreciation











At 1 April 2013


173,282


162,944


109,000


566,756


1,011,982

Charge for the year


17,487


3,854


23,528


4,217


49,086

Disposals


-


(2,440)


(3,039)


-


(5,479)

Foreign translation difference


(19,624)


(17,114)


(12,165)


(61,773)


(110,676)












At 31 March 2014


171,145


147,244


117,324


509,200


944,913












At 1 April 2014


171,145


147,244


117,324


509,200


944,913

Charge for the year


15,610


5,001


15,561


-


36,172

Disposals


(122)


-


(4,770)


-


(4,892)

Foreign translation difference


17,878


15,470


13,469


48,977


95,794












At 31 March 2015


204,511


167,715


141,584


558,177


1,071,987












Net book value






















At 31 March 2015


12,907


9,866


24,856


-


47,629












At 31 March 2014


22,310


7,656


13,920


-


43,886

 

At the end of the reporting period, the net book value of motor vehicle held under finance lease of the Group and the Company was £8,835 (2014: £8,556).



16.    PLANT AND EQUIPMENT (CONTINUED)

 

The Company

 



Furniture and

fixtures


Computer

equipment


Motor

vehicles


Total



£


£


£


£










Cost









At 1 April 2013


14,210


37,980


67,706


119,896

Additions


4,305


1,410


-


5,715

Disposals


-


-


(6,079)


(6,079)

Foreign translation difference


(1,471)


(3,481)


(5,824)


(10,776)










At 31 March 2014


17,044


35,909


55,803


108,756










At 1 April 2014


17,044


35,909


55,803


108,756

Additions


276


6,229


20,381


26,886

Disposals


-


-


(2,960)


(2,960)

Foreign translation difference


2,139


5,007


8,466


15,612










At 31 March 2015


19,459


47,145


81,690


148,294










Accumulated depreciation









At 1 April 2013


12,783


33,485


40,107


86,375

Charge for the year


1,008


2,173


13,313


16,494

Disposals


-


-


(3,039)


(3,039)

Foreign translation difference


(1,196)


(3,110)


(4,065)


(8,371)










At 31 March 2014


12,595


32,548


46,316


91,459










At 1 April 2014


12,595


32,548


46,316


91,459

Charge for the year


1,307


3,000


10,298


14,605

Disposals


-


-


(2,442)


(2,442)

Foreign translation difference


1,678


4,304


6,442


12,424










At 31 March 2015


15,580


39,852


60,614


116,046










Net book value


















At 31 March 2015


3,879


7,293


21,076


32,248










At 31 March 2014


4,449


3,361


9,487


17,297

 

 



17.    GOODWILL

 

The Group





£






Cost










At 31 March 2014 and 2015




961,845






Less: accumulated impairment loss










At 31 March 2014 and 2015




936,015






Net carrying amount










At 31 March 2014 and 2015




25,830

 

Impairment test for cash-generating unit containing goodwill

 

Goodwill is allocated to the Group's cash-generating unit ("CGU") identified according to operating segment as follows:

 



2015


2014



£


£






Security and surveillance


25,830


25,830

 

The recoverable amount of the CGU is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a twelve month period. A discount rate of 15% has been used for the value-in-use calculations.

 

Key assumptions used for value-in-use calculations:

 



2015


2014






Gross margin


25%


20%

Growth rate


15%


11%

 

Management determined the budgets based on their experience and knowledge in the construction contracts operations. The discount rate used is pre-tax and reflects specific risks relating to the relevant segment.

 

Based on the impairment test performed, no impairment loss is recognised for the year (2014: Nil).

 



18.    INTERESTS IN SUBSIDIARIES

 



2015


2014



£


£






Unlisted shares, at cost


639,965


1,053,475

Add: foreign translation difference


-


161,537

Less: impairment loss


(625,005)


(1,201,190)








14,960


13,822






Amounts due from subsidiaries


91,424


7,213,254

Less: impairment loss


-


(4,459,285)

Add: foreign translation difference


-


(514)








91,424


2,753,455











Total


106,384


2,767,277

 

Amounts due from subsidiaries are unsecured, interest-free with no fixed term of repayment.

 

The following list contains the particulars of subsidiaries which principally affected the results, assets and liabilities of the Group during the year ended 31 March 2015:

 

Name

Place of

incorporation and

operations

Issued and

fully paid  up

share capital/

registered capital

Percentage

of equity

held by

the Company

Principal activities




Directly

Indirectly


T-Com Technology Co Limited

Taiwan

NT$80,000,000

Ordinary share

52.25%

-

Supply, design, installation and maintenance of closed circuit television and surveillance systems and the sale of security system related products

Leader Smart Holdings Limited #

 

BVI

US$10,000

Ordinary share

100%

-

Investment holding

Leader Smart Engineering Limited #

 

Hong Kong

HK$10,000

Ordinary share

-

100%

Investment holding and engineering contractor

Leader Smart Engineering (Shanghai) Limited  #

 

# (collectively the "Leader Smart Group")

The PRC

US$1,000,000

Registered capital

-

100%

Supply, design, installation and maintenance of electrical and mechanical systems, construction decorations and provision of engineering consultancy services

 

# On 31 March 2015, the Company approved the decision to demerge the Leader Smart Group from the Group by distribution as a dividend in specie to its shareholders at the fair value of the assets to be distributed.  Accordingly, amounts due from subsidiaries in the Company Statement of Financial Position as at 31 March 2014 were restated as amounts due from former subsidiaries under non-current assets (note 21) in the Consolidated and Company Statement of Financial Position as at 31 March 2015.



19.    INVENTORIES

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£










Raw materials


477,295


300,238


477,295


300,238

Work in progress


-


490


-


-

Finished goods


832,710


878,454


364,615


444,143



1,310,005


1,179,182


841,910


744,381

Less: impairment loss


(104,541)


(120,117)


-


-












1,205,464


1,059,065


841,910


744,381

 

The Group recognised a provision for obsolete inventories of £0 (2014: £9,660) on slow-moving inventories.

 

 

20.    CONTRACTS-IN-PROGRESS

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£










Contract costs incurred plus attributable profits less foreseeable losses


19,237,828


30,934,302


17,420,721


13,957,023

Progress billings to date


(18,197,386)


(17,397,940)


(17,936,359)


(13,621,970)












1,040,442


13,536,362


(515,638)


335,053

Represented by:









Amounts due from customers for contracts-in-progress


2,411,247


14,404,193


813,681


964,673

Less: allowance for doubtful debts


(206,436)


(377,670)


(206,436)


(145,515)

Amounts due from customers for contracts-in-progress, net (note 21)


2,204,811


14,026,523


607,245


819,158

Amounts due to customers for contracts-in-progress (note 23)


(1,164,369)


(490,161)


(1,122,883)


(484,105)












1,040,442


13,536,362


(515,638)


335,053

 

At 31 March 2015, the amount of retention receivables from construction customers recorded within "trade and other receivables" is £49,122 (2014: £52,689).

 

 



21.    TRADE AND OTHER RECEIVABLES

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£

Current portion:









Trade receivables


1,156,106


1,414,152


769,265


760,300

Less: allowance for doubtful debts


(191,806)


(469,128)


(65,131)


(57,942)










Trade receivables, net


964,300


945,024


704,134


702,358

Other receivables


494,783


404,973


397,233


244,476

Deposits and prepayments


659,109


247,460


130,706


102,824

Amounts due from customers for contracts-in-progress, net (note 20)


2,204,811


14,026,523


607,245


819,158



4,323,003


15,623,980


1,839,318


1,868,816

Less: non-current portion - amounts due from customers for contracts-in-progress


-


(1,324,331)


-


-












4,323,003


14,299,649


1,839,318


1,868,816










Non-current portion:









Amounts due from customers for contracts-in-progress


-


1,324,331


-


-

Amounts due from former subsidiaries


2,973,435


-


2,973,435


-












2,973,435


1,324,331


2,973,435


-










All of the trade and other receivables are expected to be recovered within one year, other than those separately disclosed.

 

Upon the completion of demerger transaction (see notes 18 and 31), the net carrying value of the balances due from the Leader Smart Group was restated as £2,973,435.  After the end of the reporting period, the net balance was re-assigned to the Parent of the Leader Smart Group (note 34).

 



21.    TRADE AND OTHER RECEIVABLES (CONTINUED)

 

(a)     Impairment of trade receivables

 

Impairment losses in respect of trade receivables are recorded using an allowance account unless the Group is satisfied that recovery of the amount is remote, in which case the impairment loss is written off against trade receivables directly. Movements in the allowance for doubtful debts:

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£










At 1 April


469,128


637,847


57,942


240,929

Impairment loss recognised


-


99,907


-


-

Recovery from bad debts


(16,508)


(44,617)


-


-

Written back of allowance


-


(168,779)


-


(168,779)

Foreign translation difference


(260,814)


(55,230)


7,189


(14,208)










At 31 March


191,806


469,128


65,131


57,942

 

At 31 March 2015, trade receivables of the Group and the Company amounting to £0 (2014: £99,907) and £0 (2014: £0) respectively, are individually determined to be impaired and an impairment loss was provided. These individually impaired receivables were outstanding over one year at the end of the reporting period.

 

(b)     Trade receivables that are not impaired

 

The following is an aged analysis of trade receivables at the end of the reporting period that were past due but not impaired:

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£










0 to 90 days


856,306


786,137


645,262


615,258

91 to 365 days


56,218


126,401


55,766


80,155

Over 365 days


51,776


32,486


3,106


6,945












964,300


945,024


704,134


702,358

 

Receivables that were past due but not impaired relate to a number of independent customers that have a good track record with the Group. Based on past experience, management believes that no impairment allowance is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable. The Company does not hold any collateral over these balances.

 

 



22.    CASH AND BANK BALANCES

 

(a)      Cash and cash equivalents

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£










Cash at bank and on hand


1,099,861


310,805


1,044,484


160,210

Restricted cash *


121,846


69,055


-


-

Cash and cash equivalents in the consolidated and the Company's statement of cash flows


1,221,707


379,860


1,044,484


160,210

 

* At 31 March 2015, the Group maintained £121,846 (2014: £69,055) as restricted cash held at bank as security against the banking facilities (note 25).

 

(b)      Bank deposits

 

At 31 March 2015, £251,641 (2014: £223,865) are restricted deposits held at bank with maturities greater than three months, as a pledge for performance bonds in respect of construction contracts undertaken by the Group and the Company.

 

The effective interest rate on bank deposits was 0.37% per annum (2014: 0.41%).

 

(c)      Cash and bank balances are denominated in the following currencies:

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£










AUD


327


350


327


350

CAD


798


813


798


813

GBP


115


115


115


115

HKD


1,263,290


380,702


1,263,148


374,209

JYP


67


70


67


70

NTD


175,935


211,460


-


-

RMB


-


475


-


-

USD


32,816


9,740


31,670


8,518












1,473,348


603,725


1,296,125


384,075

 

 



23.    TRADE AND OTHER PAYABLES

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£










Trade payables


585,931


1,978,634


79,176


67,577

Bills payable


197,437


236,528


-


-

Due to related parties (note 29(b))


148,540


37,017


6,791


-

Accruals and other payables


1,146,339


1,500,009


1,048,953


893,094

Deferred income on financial guarantees issued (note 31)


-


302,604


-


-

Amounts due to customers for contracts-in-progress (note 20)


1,164,369


490,161


1,122,883


484,105












3,242,616


4,544,953


2,257,803


1,444,776

 

 

24.    INCOME TAX IN THE STATEMENT OF FINANCIAL POSITION

 

(a)     Current tax liability in the statement of comprehensive income represents:

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£










Hong Kong profits tax


-


-


-


-

PRC income tax


-


1,144,800


-


-

Taiwan income tax


34,442


82,173


-


-












34,442


1,226,973


-


-










 

(b)     Unrecognised deferred tax assets

 

At 31 March 2015, the Company had unused tax losses of £4,746,391 (2014: £4,512,158) that were available for offset against future taxable profits of the Company. No deferred tax assets have been recognised due to the unpredictability of the future profit streams. Such unused tax losses are available to be carried forward at no expiration.

 

No provision for deferred tax liabilities has been made in the financial statements as the tax effect of temporary differences is immaterial to the Group and the Company.

 

 



25.    LOAN AND BORROWINGS

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£

Within one year or on demand:









Secured bank loans (note a)


1,122,052


440,582


-


-

 

Note:

 

The secured bank loans carried interest at rates ranging from 3.49% to 3.68% per annum (2014: 3.39% to 3.91% per annum) and were secured by:-

 

(i)    Restricted cash (note 22) and;

       (ii)   Personal guarantee by the Chairman of the Company, Mr. Stephen Sin Mo KOO (note 29(c)).

 

 

26.    OBLIGATIONS UNDER FINANCE LEASE

 

At 31 March 2015 and 2014, the Group and the Company had obligations under finance lease as follows: 

 



Minimum lease payment


Present value of the minimum lease payment



2015


2014


2015


2014



£


£


£


£










Within one year


8,944


7,956


7,694


6,844

Between two to five years


745


8,620


641


7,415










Total minimum finance lease payments


9,689


16,576


8,335


14,259










Less: future finance charges


1,354


2,317














Present value of lease obligation


8,335


14,259







27.    SHARE CAPITAL

 



2015


2014



£


£

Authorised :





800,000,000 ordinary shares of HK$0.0625 each


3,669,470


3,669,470






Issued and fully paid:





383,677,323 ordinary shares (2014: 383,677,323 ordinary shares) of HK$0.0625 each


1,697,617


1,697,617

 

The Company has one class of ordinary shares.

 

 

28.    EMPLOYEE RETIREMENT BENEFITS

 

(a)    The Company operates a Mandatory Provident Fund scheme (the "MPF scheme") under the Hong Kong Mandatory Provident Fund Schemes Ordinance for employees employed under the jurisdiction of the Hong Kong Employment Ordinance. The MPF scheme is a defined contribution retirement scheme administered by independent trustees. Under the MPF scheme, the employer and its employees are each required to make contributions to the scheme at 5% of the employees' relevant income, subject to a cap of monthly relevant income of HK$30,000 (HK$25,000 prior to June 2014). Contributions to the MPF scheme vest immediately.

 

(b)    Employees of the subsidiary in Taiwan chose to participate in a defined contribution scheme governed by the Labour Pension Act of Taiwan. This subsidiary contributes at 6% of the total salaries of the participating employees who have chosen to participate in the defined contribution scheme, the contribution deposited into individual pension accounts at the Bureau of Labour Insurance of Taiwan.

 

Save as set out above, the Group has no other material obligations to make payments in respect of retirement benefits of the employees. 

 

 



29.    RELATED PARTY TRANSACTIONS

 

Compensation of key management personnel

 

The remuneration of the key management of the Group during the year was as follows:-

 







2015


2014







£


£










Salaries, bonus and allowances






226,725


243,431

 

The remuneration of key management personnel comprises the remuneration of Executive Directors and key executives.

 

Executive Directors include the Executive Chairman, Chief Executive Officer, Technical Director and Finance Director of the Company.  The remuneration of the Executive Directors is determined by the Remuneration Committee having regard to the performance of individuals, the overall performance of the Group and market trends. Further information about the Remuneration Committee and the Directors' remuneration is provided in the Remuneration Report and the Report on Corporate Governance to the Annual Report and note 11 to the financial statements.

 

Key executives include the Director of Operations and Director of Sales and Marketing of the Company.  The remuneration of the key executives is determined by the Executive Directors annually having regard to the performance of individuals and market trends.

 

Biographical information on key management personnel is disclosed in the Directors' and Senior Management's Biographies section of the Annual Report.

 

Transactions with related parties

 

(a)     At 31 March 2015, there is a payable balance of £202 (2014: £37,017) due to Mr. Stephen Sin Mo KOO, the Director of the Company, which is unsecured, interest-free and repayable on demand (note 23).

 

(b)     At 31 March 2015, there is a payable balance of £140,436 (2014: Nil) due to non-controlling shareholders of a subsidiary of the Company, which is unsecured, interest-free and repayable on demand.

 

(c)     At 31 March 2015, the bank facilities amounting to £1,037,063 (2014: £946,068) are personally guaranteed by Mr. Stephen Sin Mo KOO, which remained unused. No charge has been requested for this guarantee (note 25).

 

Apart from the transactions disclosed above and elsewhere in the financial statements, the Group and the Company had no other material transactions with related parties during the year.

 

 



30.    COMMITMENTS

 

(a)      Capital commitments

 

At 31 March 2015, the Group and the Company has no material capital commitments outstanding.

 

(b)      Operating lease commitments

 

At the end of the reporting period, the total future minimum lease payments under non-cancellable operating leases for the office and warehouse premises are payable as follows:

 



The Group


The Company



2015


2014


2015


2014



£


£


£


£










Within one year


93,041


114,902


50,872


70,764

Between two to five years


46,633


28,055


46,633


21,187












139,674


142,957


97,505


91,951

 

 

31.    DEMERGER TRANSACTION

 

During the year ended 31 March 2015, the Company approved a corporate restructuring exercise by demerging its Electrical and Mechanical business that was operated by its subsidiaries namely Leader Smart Engineering Limited and Leader Smart Engineering (Shanghai) Limited (collectively the "Leader Smart Group").  All of the issued shares in the Leader Smart Group were transferred to Leader Smart Holdings Limited, a BVI company, whose shares were distributed as non-cash dividends, ranking pari passu in all respects with the existing shareholders of the Company.  This exercise is treated as the distribution of non-cash assets to owners and the dividend in specie has been debited to the retained earnings accordingly.

 

The net carrying values of the assets to be distributed at 31 March 2015:





£

ASSETS



Trade and other receivables


13,931,948

Cash and cash equivalents


6,812




Total assets


13,938,760




LIABILITIES



Trade and other payables


11,519,954

Current tax liability


1,287,150

Financial guarantee liabilities


340,231




Total liabilities


13,147,335




Net asset value


791,425




Special dividend declared and payable per ordinary share


0.2p




31.    DEMERGER TRANSACTION (CONTINUED)

 

Electrical and Mechanical business was discontinued on 31 March 2015 and its operating results are presented as follows:

 


2015


2014


£


£





Revenue from discontinued operations

51,129


71,159





Other income

2,186


-

Other gains and losses

(48,190)


(96,017)

Administrative expenses

(35,782)


(44,597)





Loss for the year from discontinued operations

(30,657)


(79,714)





Earnings per share - Basic and Diluted

(0.01)p


(0.02)p

 

Cash flows from discontinued operations

2015


2014


£


£





Net cash outflows from operating activities

(2,470)


402

Net cash outflows from investing activities

-


-

Net cash outflows from financing activities

-


-

Effect of foreign exchange changes, net

2,440


(360)






(30)


42





Upon the completion of demerger transaction, a net effect of £4,730,991 was charged directly in equity.

 

 

32.    CONTINGENT LIABILITIES

 

In the opinion of the Directors of the Company, there were no material contingent liabilities outstanding at 31 March 2015.

 

 

33.    COMPARATIVE FIGURES

 

Certain comparative figures in these financial statements have been re-classified to conform to the current year's presentation

 



34.    EVENTS AFTER THE END OF THE REPORTING PERIOD

 

(i)       On 1 April 2015, the Company entered into the assignment of deed and agreed to transfer the balance with its former subsidiaries to their parent company namely Leader Smart Holdings Limited.

 

(ii)      On 1 September 2015, the directors proposed a final dividend. Further details are disclosed in note 15(i).

 

 

35.    APPROVAL OF FINANCIAL STATEMENTS

 

The financial statements were approved and authorised for issue by the Board of Directors on 10 September 2015.

 


 

NOTICE OF ANNUAL GENERAL MEETING

 

 

NOTICE IS HEREBY GIVEN THAT the 2015 Annual General Meeting (AGM) of UniVision Engineering Limited will be held at UniVision Engineering Limited, Unit 01A, 2/F., Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong, on 8 October 2015 at 5:00 p.m. The following businesses will be transacted then:

 

As ordinary business:

 

1.   To receive and adopt the Company's audited financial statements for the financial year ended 31 March 2015 together with the Directors' report and the Independent Auditor's report;

 

2.   To declare a final dividend for the financial year ended 31 March 2015.

 

3.   To re-elect Mr. Nicholas James LYTH who retired by rotation, as a Non-Executive Director of the Company;

 

4.   To re-elect Mr. Stephen Sin Mo KOO who retired by rotation, as a Director of the Company;

 

5.   To re-elect Mr. Danny Kwok Fai YIP who retired by rotation, as a Director of the Company;

 

6.   To reappoint auditor HKCMCPA Company Limited, Certified Public Accountants as auditors of the Company, to hold office from the conclusion of the meeting to the conclusion of the next meeting, during which accounts will be laid before the Company and to authorize the Directors to adjust their remuneration packages;

 

7.   That the directors of the Company be and are hereby generally and unconditionally authorized to exercise all powers of the Company to allot 'Ordinary Shares' the capital of the Company. Such authority (unless and to the extent previously revoked, varied or renewed by the Company during the general meeting) to expire 15 months after the date of the passing of such resolution or on the conclusion of the Company's next AGM to be held, following the date of passing such resolution, whichever occurs first, save that the Company may before such expiry make any offer or agreement which would or might require Ordinary Shares to be allotted after such expiry, and that the Directors may allot Ordinary Shares in pursuance of such an offer or an agreement as if such authority had not expired.  This authority substitutes all subsisting authorities to the extent unused.

 

8.   That the directors of the Company be and are hereby generally and unconditionally authorized to exercise all powers of the Company to repurchase the 'Ordinary Shares' in the capital of the Company, including any form of depositary receipt. Such authority (unless and to the extent previously revoked, varied or renewed by the Company during the general meeting) to expire 15 months after the date of the passing of such resolution or on the conclusion of the Company's next AGM to be held, following the date of passing such resolution, whichever occurs first, save that the Company may before such expiry make any offer or agreement which would or might require Ordinary Shares to be repurchased after such expiry, and that the Directors may buy back Ordinary Shares in pursuance of such an offer or an agreement as if such authority had not expired.

 



 

 

By Order of the Board                                Registered office:

Mr. Stephen Sin Mo KOO                          Unit 01A, 2/F., Sunbeam Centre,

Executive Chairman                                   27 Shing Yip Street,

                                                                 Kwun Tong, Kowloon,

10 September 2015                                     Hong Kong

 

 

 

NOTES:

 

1.   Only holders of Ordinary Shares, or their duly appointed representatives, are entitled to attend and vote at the Annual General Meeting.  A member so entitled may appoint one or more proxies (whether they are members or not) to attend and, on a poll, to vote in place of the member.

 

2.   A form of proxy is enclosed with this notice.  To be valid, the form of proxy and any power of attorney or other authority (if any) under which it is signed, or a notarized and certified copy of that power of authority, must be lodged with the Company's registrars, c/o Computershare Investor Services Plc., The Pavilions, Bridgwater Road, Bristol BS99 6ZY, not less than 48 hours before the Annual General Meeting takes place.

 

3.   Completion and return of a proxy does not preclude a member from attending and voting at the Annual General Meeting.

 

4.   The Company pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 specifies that only those shareholders registered in the Register of Members of the Company as of 18 September 2015 are entitled to attend or vote at the Annual General Meeting in respect to the number of shares registered in their name at that time.  Changes to entries on the Register after that time will be disregarded when determining the rights of any person to attend or vote in the Annual General Meeting.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR LMMATMBJBBAA

Top of Page