UniVision Engineering Limited
Annual Report
Year ended 31 March 2007
UNIVISION ENGINEERING LIMITED - 0 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
Annual Report
Year ended 31 March 2007
Contents
Page
Board of Directors, Officers and Professional Advisers
Chairman’s Statement
Directors’ and Senior Management Biographies
Directors’ Report
Remuneration Report
Report on Corporate Governance
Statement of Directors’ Responsibilities
Independent Auditors’ Report to the Shareholders of UniVision
Engineering Limited
Group Income Statement
Group Balance Sheet
Group Statement of Changes in Equity
Group Cash Flow Statement
Notes to the Financial Statements
Notice of Annual General Meeting
2
3
6
8
12
13
15
16
18
19
21
23
25
50
UNIVISION ENGINEERING LIMITED - 1 - ANNUAL REPORT 2007
BOARD OF DIRECTORS, OFFICERS
AND PROFESSIONAL ADVISERS
Board of Directors
Stephen Sin Mo KOO, Executive Chairman
Stephen Pui Ming CHAN, Chief Executive Officer
Chun Pan WONG, Technical Director
Danny Kwok Fai YIP, Finance Director UK
Johnny Ka Siu TANG, Non-Executive Director
Richard FERNIE, Non-Executive Director
Andrew Ping Sum TANG, Non-Executive Director
Auditors
Nominated Adviser and Broker
HB Corporate, a division of Hoodless Brennan plc,
40 Marsh Wall
London E14 9TP
CLB LITTEJOHN FRAZER
Senior Management
Chun Hung WONG, Director of Operations
Yip Tak CHAN, Director of Sales and Marketing
CCIF CPA LIMITED
Audit Committee 20/F Sunning Plaza ,10 Hysan Avenue,
Johnny Ka Siu TANG, Chairman
Andrew Ping Sum TANG
Stephen Sin Mo KOO
1 Park Place Canary Wharf
London E14 4HJ
Causeway Bay, Hong Kong
Financial Public Relations
Remuneration Committee THREADNEEDLE COMMUNICATIONS
Andrew Ping Sum TANG, Chairman 107-111 Fleet Street
Johnny Ka Siu TANG London EC4A 2AB
Stephen Sin Mo KOO
Company Secretary
Danny Kwok Fai YIP Computershare Investor Services (Channel
Registrars
Islands) Limited
Registered Office PO Box 83 Ordnance House
8/F Lever Tech Centre 31 Pier Road St Helier
69-71 King Yip Street Jersey JE4 8PW
Kwun Tong
Channel Islands
Kowloon
Hong Kong
Tel: (852) 2389 3256
Fax: (852) 2797 8053
E-mail: uvel@hk.uvel.com The Pavilions
Website: www.uvel.com
UK Depositary
Computershare Investor Services Plc
PO Box 82
Bridgwater Road
Bristol BS99 7NH
UK
AIM Stock Code: UVEL
UNIVISION ENGINEERING LIMITED - 2 - ANNUAL REPORT 2007
CHAIRMAN’S STATEMENT
INTRODUCTION
I am pleased to report on the results of the Group for the financial year ended 31 March 2007, our second
year as a public company, which has proved to be an exciting and successful period for UniVision.
The Company’s Admission to the AIM of the London Stock Exchange in December 2005 has given us the
opportunity to access international capital markets and enhance our growing reputation in the commercial
marketplace, particularly in Asia and Middle East, where we see significant growth opportunities to develop
as an international Group and create greater value for our shareholders.
We have been providing our customers with digital surveillance and integrated security systems in the
Pacific region for a number of years and, as our product range and skills base have grown, we are
increasingly able to expand our geographic reach. The recent acquisition of a majority shareholding in T-
Com Tech. Co. Ltd and 100% shareholding in Leader Smart Engineering (Shanghai) Ltd has added
momentum to our continued growth in the Greater China Region and enabled us to expand into the electrical
and mechanical service sector.
Our objectives are to further develop our expertise in producing high quality, reliable and innovative digital
video solutions and to consolidate our sales network throughout the Greater China region. With growing
demand in the surveillance and security industry, both domestically and internationally, and with the launch
of a new product range in the third quarter of the current year, we remain confident in the Group’s long-term
growth potential.
FINANCIAL REVIEW
During the period under review, turnover increased by 130% to £8.93M (2006: £3.89m). This growth is
attributable to additional sales from the acquisition of T-com and the existing clients and the improvement in
market conditions and a heightened awareness in the areas on which we focus. The effect from our 100%
owned subsidiaries Leader Smart (Shanghai) will be improve further our growth in the year of 2008. The
development of new applications has generated additional revenue streams both from existing and new
clients, which is particularly pleasing. I am delighted that turnover for the period was significantly higher
than our internal forecasts.
Gross profit margin remains at 32% (2006: 33%). Administration expenses, other operating expenses and
non-operating expenses were in line with the Group’s increase in capital investment, marketing and office
expansion rising to £1,403,744 (2006: £481,470). This increase is principally due to the additional
administration cost of new subsidiaries T-Com and Leader Smart Shanghai and the management cost for
listing of UniVision’s shares according to AIM requirement, which under the International Financial
Reporting Standards (“IFRSs”) could not be written off against the Share Premium Account.
Net growth in profit before tax after excluding all one-off expenses relating to the Company’s flotation
increased by 304% to £1.43 million.
Basic earnings per share increase to 0.39p from 0.18p even with a greater number of shares in issue.
MARKET REVIEW
According to A & S Asia Magazine, the total global demand for surveillance and monitoring systems is
currently approximately US$4.5 billion. This is expected to grow to approximately US$ 11 billion by 2007.
Industrial and economic growth in Hong Kong, China and Macau together with global events such as the
UNIVISION ENGINEERING LIMITED - 3 - ANNUAL REPORT 2007
CHAIRMAN’S STATEMENT
(continued)
Beijing Olympics 2008 and the Shanghai Expo 2010, all lead to increased construction of facilities, such as
hotels, shopping centres, and convention and exhibition centres.
There is a continuing strong demand for digital video products such as Digital Video Server (DVS), Network
Video Recorders (NVRs) and Internet Protocol (IP) cameras. Specific examples of this include the upgrade
of traffic surveillance in Hong Kong and the upgrade of Digital Video Server (DVS) for the Hong Kong
Kowloon and Canton Railway, the Hong Kong MTRC and the Hong Kong Housing Authority, as well as the
new Hong Kong Government Headquarters and the Western Kowloon development complex.
BUSINESS REVIEW
Markets
IP Video is providing the CCTV industry with a unique set of tools, particularly for use in the demanding
transportation industry which has used the analogue system for a decade.
Hybrid IP analogue system is the most cost effective way to connect IP and analogue cameras with CCTV
Matrix Controllers and DVS. Hybrid solutions provide large installed base analogue cameras with a gateway
to transmit video streams from networks and the Internet.
There are considerable opportunities in Greater China which is providing avenues for the Hybrid solutions.
The Group is looking into many different solutions, including Video compression technology MPEG-4 and
H.264, Digital Encoder and Decoder (CoDec) with built-in video analysis algorithms in the Homeland
Security field such as intruder detection, loitering detection, left behind objects and trip wire will be the new
area of interest.
The Board believes that UniVision will be among the pioneers in providing the most effective solutions for
businesses in the airport, rail and traffic surveillance industry and we hope to expand our sphere of business
accordingly.
Technologies, Solutions and Products
On the solutions side, an ongoing product development programme is in place to cater for the needs of the
Group’s growing client base in the Asia Pacific region.
The Group’s newly developed Digital Video Server with PC and embedded base solutions came to market in
July 2007 and has been used in several projects in Hong Kong. A new brand name for these products is
expected to be announced in early 2008. A newly developed Video Amplifier with an on-screen display
function was launched at the same time and the first order is due to be implemented into the CCTV System
for the Hong Kong Island Area Traffic Control. We are currently working on H.264 CoDec with built in
video analysis algorithms which we expect to launch early in the next financial year.
Acquisitions and Investments
The success of our investment in T-Com Tech. Co. Ltd and Leader Smart (Shanghai) Ltd has reinforced the
Company’s strategy of acquiring interests in companies with strategic value. To this end, the Group is
currently assessing a number of companies in related fields with a view to making further strategic
investments.
Contract Wins
During the reporting period, I am pleased to report that the Group was awarded a number of high profile
projects including CCTV systems in the following locations; Shenzhen Western Corridor, Hong Kong
General Post Office, the Lok Ma Chau Spur Line terminal, the Hong Kong Airport Baggage Handling Area,
the Hong Kong MTRC Wheel Chair Platform, the Macau Crown Hotel Casino and the New Grand Lisboa
Hotel Casino. We have also been awarded contracts for E & M & ELV Systems for the Beijing Bestride
UNIVISION ENGINEERING LIMITED - 4 - ANNUAL REPORT 2007
CHAIRMAN’S STATEMENT
(continued)
Recreation Club, an E & M System for the Shanghai NVIDIA Office, and CCTV and Access Controls
System for the Formosa Plastic Factories in Taiwan.
Macau Casinos
As well as growing our business by winning public sector mandates our reputation has grown in the
entertainment and leisure industry and several significant projects were undertaken in Macau. The Board
sees the leisure industry becoming an area of substantial opportunity over the coming years and the strategy
that was put in place to capitalise on these developments is bearing fruit, as evidenced by the key projects at
the Crown Hotel Casino and the New Grand Lisboa Hotel Casino.
MTR & Maintenance
Our maintenance contracts are particularly important to the business by providing strong visibility in our
revenue and I am delighted that we have continued to develop this side of the business. In particular, our
relationship with the Mass Transit Railway has proved to be significant with a further 3-year maintenance
contract for the CCTV, Public Address and Passenger Information Display System (PIDS). This was also
extended during the period to include the important Disneyland Line. There is several renovation contracts
anticipated for MTR in the fourth quarter 2007. In July 2007, UniVision entered into a 5-year maintenance
contract for the CCTV System with the Hong Kong Island Traffic Control and a 5-year maintenance contract
for CCTV System for Tsing Ma Traffic Control (Highway System for Hong Kong Airport).
PROSPECTS
The Company’s performance domestically has been strong with new revenue streams from both the public
and private sector in the Greater China Region. We are working with partners in Australia, Thailand, and
Dubai in securing product distribution channels. We continue to enhance our product and application
development programmes.
The first few months of the current financial year have been very encouraging. In view of the strong demand
for products from our existing customers, and the positive sentiment and exposure towards the digital
surveillance products in general, the Board is confident of making further significant progress in the current
year.
APPRECIATION
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 KOO
EXECUTIVE CHAIRMAN
27 September 2007
UNIVISION ENGINEERING LIMITED - 5 - ANNUAL REPORT 2007
DIRECTORS’ AND SENIOR
MANAGEMENT’S BIOGRAPHIES
DIRECTORS’ BIOGRAPHIES
Richard FERNIE – Non Executive Director (aged 61)
Mr. Fernie was appointed as a non-executive Director on 19 December 2006. Mr. Fernie holds a Bachelor of
Science degree from the University of Strathclyde. He has been a divisional managing director of
international electronic security business with turnover up to 100m pounds
Andrew Ping Sum TANG – Non Executive Director (aged 50)
Mr. Tang was appointed as a non-executive Director on 1 December 2005. Mr. Tang holds a Bachelor of
Commerce Degree from the University of Western Australia and a Masters Degree in Applied Finance from
Macquarie University. He is a member of the Hong Kong Institute of Certified Public Accountants, a
member of the Institute of Certified Public Accountants of Australia and the Hong Kong Securities Institute,
a director of the Institute of Securities Dealers and a member of the advisory board of the Society of
Registered Financial Planners of Hong Kong. Mr. Tang was a Manager of the Licensing Department of
Securities and Futures Commission from 1993 to 1995. As the Manager of Licensing Department, Mr.
Tang’s responsibilities covered, principally, processing applications, on-going monitoring of registrants
under Securities Ordinance and other legislations. He also participated in the development of licensing
systems and procedures. Mr. Tang has over 10 years experience in the financial services industry. He joined
Hantec Group in Hong Kong in 1998 and was the Deputy Chairman and General Manager of Hantec
Investment Holdings Limited, a financial services group listed on the main board of the Stock Exchange of
Hong Kong. At present, Mr. Tang is the Director-China Business of Tai Fook Securities Group, a leading
securities group which listed on the main board of the Stock Exchange of Hong Kong.
Stephen Sin Mo KOO – Executive Chairman (aged 50)
Mr. Koo joined UniVision in 1998 and was appointed as a Director on 3 March 2003. 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 was a director of MultiVision Holdings Limited
in 2001, prior to being appointed to the Board of UniVision. He is a Fellow of the Institute of Certified
Public Accountants of Australia and of the Hong Kong Institute of Certified Public Accountants.
Stephen Pui Ming CHAN – Chief Executive Officer (aged 52)
Mr. Chan joined UniVision in 2001 and was appointed as a Director on 1 December 2005. Mr. Chan holds a
Master of Business Administration degree from Newport University, USA, and a Higher Certificate in
Electronic Engineering from the Hong Kong Polytechnic University. He has over 20 years’ experience in
project management and was the Engineering Director of an international base company in Hong Kong prior
to joining UniVision in 2001. Mr. Chan 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 a
member of the Institute of Electrical and Electronics Incorporated Engineers in the United Kingdom and of
the Hong Kong Computer Society.
Chun Pan WONG – Technical Director (aged 46)
Mr. Wong joined UniVision in 1991 and was appointed as a Director on 25 March 1992. He has a degree in
Computer Science form the University of Edinburgh, Scotland, and over 15 years’ experience in the
surveillance industry. He is responsible for the development of UniVision’s state of the art CCTV control
and monitoring systems and smart card access systems.
UNIVISION ENGINEERING LIMITED - 6 - ANNUAL REPORT 2007
DIRECTORS’ AND SENIOR
MANAGEMENT’S BIOGRAPHIES
(Continued)
Johnny Ka Siu TANG – Non-Executive Director (aged 36)
Mr. Tang was appointed as Finance Director on 1 December 2005. He resigned on 18 October, 2006 and was
appointed as a Non-Executive Director on 1 November 2006.
Mr. Tang obtained a Bachelor of Arts degree in Accountancy from The Hong Kong Polytechnic University
in 1993 and joined KPMG in the same year where he remained until 1999 before starting his own practice.
He is a director of Zhong Yi (Hong Kong) CPA Company Limited and a member of the Hong Kong Institute
of Certified Public Accountants and The Society of Chinese Accountants and Auditors.
Danny Kwok Fai YIP –Finance Director (aged 43)
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 Bachelor of Commerce (Accounting) degree from The
Curtin University of Technology in 2000. Before joining the Group, Mr. Yip was the Accounting Manager of
Nissin Food Group, the leading instant noodle manufacturing MNC. Mr. Yip has approximately 20 years’
experience in finance and accounting in different industries. He is a fellow member of the Association of
Chartered Certified Accountants and a member of Hong Kong Institute of Certified Public Accountants.
SENIOR MANAGEMENT’S BRIEF BIOGRAPHIES
Chun Hung WONG – Director of Operations (aged 48)
Mr. Wong was appointed Director of Operations in 2004. He has a Master’s Degree in Business
Administration from the Open University of Hong Kong and has over 11 years’ experience in the electronics
system industry. He is responsible for the management of UniVision’s Project and Maintenance Division.
Yip Tak CHAN – Director of Sales and Marketing (aged 43)
Mr. Chan joined UniVision in 1995. He holds a Degree in Computing from the University of Northwest
Missouri and has approximately 10 years’ experience in sales and project management. He is responsible for
UniVision’s Sales and Marketing Division.
UNIVISION ENGINEERING LIMITED - 7 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
DIRECTORS’ REPORT
The Directors have pleasure in presenting their annual report together with the audited financial statements
of the Company and Group for the year ended 31 March 2007.
Principal Activities
The principal activities of the Company are the supply, design, consultation, installation and maintenance of
closed circuit television and surveillance systems, sale of security related products. The Group is involved in
similar activities as well as electrical and mechanical services,
Review of the Business
A review of the Company and Group and its future development is included in the Chairman’s Statement.
Financial Position
The Group’s consolidated profit for the year ended 31 March 2007 and the state of affairs of the Company at
that date are set out in the income statement on page 18 and in the balance sheet on page 19 respectively.
The Group’s changes in equity for the year ended 31 March 2007 are set out in the statement of changes in
equity on page 21
The Group’s consolidated cash flow for the year ended 31 March 2007 is set out in the cash flow statement
on pages 23 to 24
Key Performance Indicators ( KPI)
Current Ratio:
Current Asset / Current Liabilities
:
Average Collection Period :
Account receivable / Sales per Day
:
Inventory Turnover :
Cost of goods sold / Inventory
Gross profit Margin :
Gross profit / Sales
Operating Profit Margin :
Operating Profit / Sales
Profit /Equity :
Operating Profit / Equity
:
:
:
:
2.45
88 days
6.01
32%
14%
22%
Share Capital and Reserves
Details of the movements in share capital are set out in note 26 on pages 47
The movements in reserves during the year are set out in the statement of changes in equity on page 21
Dividends
The Directors do not propose the payment of a dividend for the year ended 31 March 2007 (2006: Nil).
Plant and Equipment
Details of the movements in plant and equipment are set out in note 18 on page 40 to 41
UNIVISION ENGINEERING LIMITED - 8 - ANNUAL REPORT 2007
Directors
The directors who held office during the period and to the date of this report were as follows:
DIRECTORS’ REPORT
(Continued)
(resigned on 1 November 2006)
(resigned as Finance Director on 18 October 2006)
Stephen Pui Ming CHAN
Stephen Sin Mo KOO
Tak Ding TAM
Johnny Ka Siu TANG
(appointed as Non-executive Director on 1 November 2006)
Andrew Ping Sum TANG
Chun Pan WONG
Ronald Kwok Wai SIN (appointed on 19 October 2006)
(resigned on 31 July 2007)
Richard FERNIE (appointed on 19 December 2006)
Danny Kwok Fai YIP (appointed on 18 September 2007)
Mr. Stephen Pui Ming CHAN, Mr. Johnny Ka Siu TANG , Mr. Andrew Ping Sum TANG., Mr. Richard
FERNIE retire by rotation at the forthcoming annual general meeting in accordance with the Company’s
Articles of Association and, being eligible, offers themselves for re-election.
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 was a party subsisted 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:
Stephen Pui Ming CHAN
Stephen Sin Mo KOO*
Tak Ding TAM
Johnny Ka Siu TANG
Andrew Ping Sum TANG
Chun Pan WONG
Richard FERNIE
Danny Kwok Fai YIP
Ordinary Shares held as at 31 March 2007
-
78,744,000
-
-
-
-
-
-
* The 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 Moo 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.
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 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.
UNIVISION ENGINEERING LIMITED - 9 - ANNUAL REPORT 2007
DIRECTORS’ REPORT
(Continued)
Substantial Shareholdings
As at 27 September 2007 the Directors had been informed of the following companies held in 3% or more of
the Company’s issued ordinary share capital.
Number of ordinary shares % of
capital
total
issued share
UniVision Holdings Limited (1)
Up sky Investments Limited (2)
Raven Nominees Limited
Pershing Keen Nominees Limited
W B Nominees Limited
183,736,000
78,744,000
41,454,750
19,791,335
15,431,800
47.9
20.5
10.8
5.2
4.0
(1) UniVision Holdings is an investment holding company incorporated under the laws of the British Virgin
Islands and is wholly-owned by Mayne Management Limited. Mayne Management Limited is a wholly-
owned subsidiary of Cameo Management Group Limited which, in turn, is a trustee of a trust set up for
the benefit of members of the Chen’s family, a Hong Kong based family with widespread investments.
(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 no political or charitable contributions (2006: Nil).
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 give every effort to
ensure that their employment will continue and that sufficient training is arranged.
Annual General Meeting
The Annual General Meeting of the Company will be held at UniVision Engineering Limited, 8/F Lever
Tech Centre, 69-71 King Yip Street, Kwun Tong, Kowloon, Hong Kong, on 29 October 2007 at 5:00p.m.
The Notice of Meeting appears on page 50.
Annual Report
The annual report for the year ended 31 March 2007 will be sent to shareholders and will be
available, free of charge, from the offices of the Company’s nominated adviser, HB Corporate, a
division of Hoodless Brennan plc., at 40 Marsh Wall, London, E14 9TP and the Company’s
registrar, Computershare Investor Services (Channel Islands) Limited at PO Box 83, Ordnance
House, 31 Pier Road, St Helier, Jersey JE4 8PW, Channel Island from 10 October 2007.
UNIVISION ENGINEERING LIMITED - 10 - ANNUAL REPORT 2007
DIRECTORS’ REPORT
(Continued)
Auditors
A resolution to re-appoint the retiring joint auditors, CLB Littlejohn Frazer, Chartered Accountants and
CCIF CPA Limited will be put at the forthcoming Annual General Meeting.
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
Hong Kong
27 September 2007
UNIVISION ENGINEERING LIMITED - 11 - ANNUAL REPORT 2007
REMUNERATION REPORT
The Remuneration Committee presents this report to shareholders on behalf of the Board.
Membership of Remuneration Committee
The Remuneration Committee comprises Mr. Johnny Ka Siu TANG (our Non-executive Director), Mr.
Andrew Ping Sum TANG (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our Executive
Chairman) and is chaired by Mr. Andrew Ping Sum TANG.
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 Directors’ remuneration for the year are set out in the table below:
Salary and fees
£
Pension
Scheme
Contrib
ution
£
Bonus
£
2007
Total
£
2006
Total
£
Executive Directors
Stephen Pui Ming CHAN
Stephen Sin Mo KOO
*Johnny Ka Siu TANG
Chun Pan WONG
Ronald Kwok Wai SIN
Non-executive Directors
Tak Ding TAM
Andrew Ping Sum TANG
45,930
55,401
14,258
28,943
13,524
815
-
-
815
339
3,734
4,617
-
2,390
638
50,479
60,018
14,258
32,148
14,501
4,753
8,147
-
-
-
-
4,753
8,147
*Johnny Ka Siu TANG
3,395
Richard FERNIE
2,000
3,395
2,000
16,147
24,510
8,650
34,421
-
2,883
2,883
-
Directors’ Interests in Contracts and Interests in Shares
Details of Directors’ Interests in Contracts and Interest in Shares are given in the Directors’ Report.
UNIVISION ENGINEERING LIMITED - 12 - ANNUAL REPORT 2007
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 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 for 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 bonus. The Chairman of the Audit and
Remuneration Committee are both non-executive directors.
Nomination Committee
As the Board of Directors of the Company is 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. Johnny Ka Siu TANG(our Non-executive Director), Mr. Andrew Ping
Sum TANG (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is
chaired by Mr. Johnny Ka Siu, TANG. 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.
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.
UNIVISION ENGINEERING LIMITED - 13 - ANNUAL REPORT 2007
REPORT ON CORPORATE GOVERNANCE
(Continued)
Remuneration Committee
Our Remuneration Committee comprises Mr. Johnny Ka Siu, TANG (our Non-executive Director), Mr.
Andrew Ping Sum TANG (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our Executive
Chairman) and is chaired by Mr. Andrew Ping Sum TANG. The Remuneration Committee meets as
required.
The responsibilities of the Committee are to:
-
determine the specific remuneration package for each Directors including Director’s fees, salaries,
allowances, bonuses, options, benefits-in-kind;
seek professional advice, including comparison with similar businesses, in order to correctly fulfil its
duties, as the Committee deems appropriate; and
-
In discharging its functions, the Committee may obtain independent external legal and other professional
advices as it deems necessary. The expenses of such advices 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 are 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 monthly 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.
Going Concern
After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the
Group has 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 realizes that effective communication can increase the 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 will have a 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 recognizes the importance of the
shareholders’ views and encourages them to attend the AGMs where they can share their opinions and direct
their 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.
UNIVISION ENGINEERING LIMITED - 14 - ANNUAL REPORT 2007
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 to prepare financial statements for each financial year which give a true and
fair view of the state of affairs of the Company and Group and of the profit or loss for that year.
In preparing those financial statements, the Directors are required to:
(cid:1)
(cid:1)
(cid:1)
(cid:1)
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 Company and Group 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 open to them to safeguard the assets of the Company and Group to prevent and detect fraud
and other irregularities.
UNIVISION ENGINEERING LIMITED - 15 - ANNUAL REPORT 2007
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
Report on the financial statements
We have audited the Group and Parent Company Financial Statements (the ‘Financial Statements’) of
Univision Engineering Limited for the year ended 31 March 2007 which comprise the Group Income
Statement, the Group and Company Balance Sheet, the Group Cash Flow Statement, the Group
Statement of Changes in Equity , the accounting policies and related notes 1 to 30. These Financial
Statements have been prepared under the accounting policies set out therein.
This report is made solely to the Company’s shareholders, as a body, in compliance with the AIM
rules as published by the London Stock Exchange (‘AIM Rules’). Our work has been undertaken so
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.
Management’s responsibilities for the financials statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards. This responsibility includes: designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error; selecting
and applying appropriate accounting policies; and making accounting estimates that are reasonable in
the circumstances.
Auditor’s responsibility
Our responsibility is to audit the Financial Statements in accordance with the relevant legal and
regulatory requirements including the AIM Rules and International Standards on Auditing.
We report to you our opinion as to whether the Financial Statements give a true and .fair view and are
properly prepared in compliance with the AIM Rules. We also report to you whether the information
given in the Directors’ Report is consistent with the Financial Statements.
In addition we report to you if in our opinion the Company has not kept proper accounting records, if
we have not received all the information and explanations we require for our audit or if information
regarding Directors’ remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with
the audited Financial Statements. The other information comprises only the Directors’ Report, the
Chairman’s Statement, Remuneration Committee Report and the Corporate Governance Statement.
We consider the implications for our report if we become aware of any apparent misstatement or
material inconsistencies with the Financial Statements. Our responsibilities do not extend to any other
information.
UNIVISION ENGINEERING LIMITED - 16 - ANNUAL REPORT 2007
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(CONT’D)
Basis of opinion
We conducted our audit in accordance with International Standards on Auditing issued by the
International Auditing and Assurance Standards Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes
an assessment of the significant estimates and judgements made by the directors in the preparation of
the Financial Statements, and of whether the accounting policies are appropriate to the Group’s and
Company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance as to
whether the Financial Statements are free from material misstatement, whether caused by fraud or
other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the Financial Statements
Opinion
In our opinion the Group Financial Statements give a true and fair view of the state of affairs of the
Group and Company as at 31 March 2007 and of its results and cash flows for the year then ended,
and have been properly prepared in accordance with International Financial Reporting Standards and
the information given in the Directors’ Report is consistent with the Financial Statements.
CCIF CPA Limited
Certified Public Accountants
Hong Kong
27 September 2007
Chan Wai Dune, Charles
Practising Certificate Number P00712
CLB Littlejohn Frazer
Chartered Accountants and
Registered Auditors
London
27 September 2007
UNIVISION ENGINEERING LIMITED - 17 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
GROUP INCOME STATEMENT
For the year ended 31 March 2007
Revenue
Cost of sales
Gross profit
Other income
Distribution costs
Administrative expenses
Other operating expenses
Profit from operations before tax and finance costs
Non-operating expenses
Finance costs
Profit before taxation
Income tax expense
Profit for the year
Attributable to minority interest
Profit for attributable to equity holders of the parent
Earnings per share
Basic
Diluted
Note
2007
£
As restated
2006
£
7
8,935,778
3,886,780
(6,053,721)
(2,607,317)
2,882,057
1,279,463
8
9
10
11
139,284
(63,345)
(1,403,744)
(77,353)
1,476,899
-
(44,476)
244,487
(94,133)
(481,470)
(201,836)
746,511
(392,380)
-
1,432,423
354,131
14
(30,659)
-
1,401,764
354,131
120,575
1,281,189
1,401,764
-
354,131
354,131
15
15
0.39p
N/A
0.13p
N/A
The notes numbered 1 to 30 form an integral part of these financial statements.
UNIVISION ENGINEERING LIMITED - 18 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
GROUP BALANCE SHEET
At 31 March 2007
Note
2007
£
As restated
2006
£
17
18
20
21
22
23
24
21
25
961,845
340,560
1,302,405
1,007,434
1,849,509
3,259,346
1,603,932
7,720,221
9,022,626
-
13,665
13,665
192,213
934,195
2,202,605
1,414,313
4,743,326
4,756,991
5,875,457
5,875,457
3,613,139
3,613,139
1,241,905
220,858
599,462
1,084,944
3,147,169
-
-
452,536
691,316
1,143,852
9,022,626
4,756,991
285,641
-
ASSETS
Non-current assets
Goodwill
Plant and equipment
Current assets
Inventories
Due from construction contract customers
Trade and other receivables
Cash and cash equivalents
Total assets
EQUITY
Capital and reserves
Total equity
LIABILITIES
Current liabilities
Bank loans, secured
Bills payables
Due to construction contract customers
Trade payables and accruals
Total liabilities
Total equity and liabilities
Minority interest
These financial statements were approved by the Board on Directors on 27 September 2007 and authorised
for issue.
On behalf of the Board of Directors
Stephen Sin Mo KOO
Director
Stephen Pui Ming CHAN
Director
The notes numbered 1 to 30 form an integral part of these financial statements.
UNIVISION ENGINEERING LIMITED - 19 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
PARENT COMPANY BALANCE SHEET
At 31 March 2007
Note
2007
£
As Restated
2006
£
19
18
20
21
22
23
2,054,081
15,075
2,069,156
818,140
763,951
1,592,211
1,488,295
4,662,597
-
13,665
13,665
192,213
934,195
2,202,605
1,414,313
4,743,326
6,731,753
4,756,991
5,469,484
5,469,484
3,613,139
3,613,139
ASSETS
Non-current assets
Investment in subsidiary undertakings
Plant and equipment
Current assets
Inventories
Due from construction contract customers
Trade and other receivables
Cash and cash equivalents
Total assets
EQUITY
Capital and reserves
Total equity
LIABILITIES
Current liabilities
Due to construction contract customers
Trade payables and accruals
Total liabilities
21
25
583,962
678,307
452,536
691,316
1,262,269
1,143,852
Total equity and liabilities
6,731,753
4,756,991
These financial statements were approved by the Board on Directors on 27 September 2007 and authorised
for issue.
On behalf of the Board of Directors
Stephen Sin Mo KOO
Director
Stephen Pui Ming CHAN
Director
The notes numbered 1 to 30 form an integral part of these financial statements.
UNIVISION ENGINEERING LIMITED - 20 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2007
Note
Share
capital
£
Share
premium
£
Retained
earnings
£
Special
capital
reserve “A”
£
Special
capital
reserve “B”
£
Exchange
differences
£
Sub-total
£
Minority
interest
£
Total
equity
£
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 31 March 2005 – previously
reported
Presentational currency adjustment
Balance at 31 March 2005 – restated
Issue of shares upon listing
Issue of shares upon placing
Share issue costs
Net profit for the year
Effect of translation
Balance at 31 March 2006 – previously
reported
Recovery of provision for bad debts1
Recovery of provision for obsolete
inventories1
Provision for obsolete inventories2
883,903
284,078
1,167,981
-
-
-
381,803
(247,199)
134,604
235,015
1,279,985
48,089
261,911
(262,915)
-
-
510,007
-
1,451,085
1,278,981
644,611
-
-
-
-
-
-
-
-
-
143,439
18,430
1,427,575
-
(36,879)
-
143,439
(18,449)
1,427,575
-
-
-
-
-
-
-
-
-
1,515,000
310,000
(262,915)
510,007
113,472
113,472
143,439
95,023
3,613,139
-
-
-
-
-
-
(13,124)
13,124
-
142,752
(142,752)
-
-
-
-
-
-
-
-
142,752
(142,752)
-
-
-
-
-
-
-
-
-
-
-
-
-
1,427,575
-
1,427,575
1,515,000
310,000
(262,915)
510,007
113,472
3,613,139
-
142,752
(142,752)
3,613,139
Balance at 31 March 2006 – restated
1,451,085
1,278,981
488,735
155,876
143,439
95,023
3,613,139
Issue of shares for acquisition of a subsidiary
undertaking
19, 26
22,991
217,039
Issue of shares upon placing
Share issue cost
Net profit for the year
Effect of translation
26
10
223,541
811,257
(114,637)
-
-
1,281,189
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
240,030
165,066
405,096
1,034,798
(114,637)
-
-
1,034,798
(114,637)
1,281,189
120,575
1,401,764
(464,703)
(464,703)
-
(464,703)
Balance at 31 March 2007
1,697,617
2,192,640
1,769,924
155,876
143,439
(369,680)
5,589,816
285,641
5,875,457
1 The adjustment was made to reflect the recoveries of the provision for bad debts and obsolete inventories
that should be credited to the non-distributable special capital reserve “A” instead of income statement
for the year ended 31 March 2006 pursuant to the order of the High Court dated 20 November 2004.
2 The adjustment was made to reflect the wrong treatment of provision for obsolete inventories as
mentioned in item 1 above that results in an under-provision of obsolete inventories amounting to
£142,752 for the year ended 31 March 2006.
The currency translation from Hong Kong dollars to the presentational currency of £ Sterling used in these
financial statements has no impact on the available distributable reserves of the Company which at 31 March
2007 were HK$24,885,054 (as restated 2006 : HK$7,403,922).
The notes numbered 1 to 30 form an integral part of these financial statements.
UNIVISION ENGINEERING LIMITED - 21 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2007
Note
Share
capital
£
Share
premium
£
Retained
earnings
£
Special
capital
reserve “A”
£
Special
capital
reserve “B”
£
Exchange
differences
£
Total
equity
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
143,439
18,430
1,427,575
-
(36,879)
-
143,439
(18,449)
1,427,575
-
-
-
-
-
-
-
-
-
1,515,000
310,000
(262,915)
510,007
113,472
113,472
143,439
95,023
3,613,139
Balance at 31 March 2005 – previously
reported
Presentational currency adjustment
883,903
284,078
Balance at 31 March 2005 – restated
1,167,981
-
-
-
381,803
(247,199)
134,604
Issue of shares upon listing
235,015
1,279,985
Issue of shares upon placing
48,089
261,911
(262,915)
-
-
510,007
-
1,451,085
1,278,981
644,611
Share issue costs
Net profit for the year
Effect of translation
Balance at 31 March 2006 – previously
reported
Recovery of provision for bad debts1
Recovery of provision for obsolete
inventories1
Provision for obsolete inventories2
-
-
-
-
-
-
(13,124)
13,124
-
142,752
(142,752)
-
-
-
-
-
-
-
-
142,752
(142,752)
Balance at 31 March 2006 – restated
1,451,085
1,278,981
488,735
155,876
143,439
95,023
3,613,139
Issue of shares for acquisition of a
subsidiary undertaking
19, 26
22,991
217,039
Issue of shares upon placing
Share issue cost
Net profit for the year
Effect of translation
26
10
223,541
811,257
(114,637)
-
-
1,186,859
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
240,030
1,034,798
(114,637)
1,186,859
(490,705)
(490,705)
Balance at 31 March 2007
1,697,617
2,192,640
1,675,594
155,876
143,439
(395,682)
5,469,484
1 The adjustment was made to reflect the recoveries of the provision for bad debts and obsolete inventories
that should be credited to the non-distributable special capital reserve “A” instead of income statement
for the year ended 31 March 2006 pursuant to the order of the High Court dated 20 November 2004.
2 The adjustment was made to reflect the wrong treatment of provision for obsolete inventories as
mentioned in item 1 above that lead to an under-provision of obsolete inventories amounting to £142,752
for the year ended 31 March 2006.
The notes numbered 1 to 30 form an integral part of these financial statements.
UNIVISION ENGINEERING LIMITED - 22 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
GROUP CASH FLOW STATEMENT
For the year ended 31 March 2007
Note
2007
£
As restated
2006
£
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation
Adjustments for:
Depreciation
Admission to AIM costs
Gain on disposal of investment securities
(Recovery of)/provision for obsolete inventories, net
Written back on trade payables and accruals
Unrealised loss on investment account carried at fair value
Impairment losses on deposits, prepayments and other receivables
Loss on disposal of plant and equipment
Interest income
Interest expenses
Operating profit before working capital changes
(Increase)/decrease in inventories
Increase in amounts due from construction contract customers
Increase in trade and other receivables
Decrease in bills payables
Increase in trade payables and accruals
Increase in amounts due to construction contract customers
1,432,423
354,131
115,412
-
(30,105)
(205,064)
(51,730)
14,747
46,700
739
(19,966)
44,476
1,347,632
(48,130)
(219,064)
(257,938)
(50,440)
(497,863)
108,673
5,833
392,380
-
201,836
(77,136)
-
-
-
(15,929)
-
861,115
404,631
(520,553)
(705,301)
-
(56,660)
175,351
Net cash generated from operations
382,870
158,583
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of plant and equipment
Receipts from settlement of short term loan
Net cash outflow from acquisition of subsidiary undertakings
Advance of short term loan receivable
Decrease/(increase) in pledged bank deposits
Proceeds from disposal of plant and equipment
Proceeds from disposal of investment securities
Purchases of investment securities
Interest received
(52,098)
-
(793,122)
-
37,402
46
876,784
(846,679)
19,966
(9,207)
176,465
-
(360,428)
(122,655)
-
-
-
15,929
Net cash used in investing activities
(757,701)
(299,896)
UNIVISION ENGINEERING LIMITED - 23 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
GROUP CASH FLOW STATEMENT (Continued)
For the year ended 31 March 2007
As restated
Note
2007
£
2006
£
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid
Proceeds from issue of shares
Payment for issue of shares and admission to AIM
Bank loan, secured
(44,476)
1,034,798
(114,637)
171,511
-
1,810,000
(653,220)
-
Net cash generated from financing activities
1,047,196
1,156,780
NET INCREASE IN CASH AND CASH EQUIVALENTS
672,365
1,015,467
EFFECT OF CHANGES IN FOREIGN EXCHANGE
(482,746)
17,031
CASH AND CASH EQUIVALENTS AT BEGINNING OF
YEAR
1,414,313
381,815
CASH AND CASH EQUIVALENTS AT END OF YEAR
23
1,603,932
1,414,313
Major non-cash transactions
On 10 October 2006, 5,363,990 new ordinary shares of HK$0.0625 were issued as partial consideration for
the acquisition of Leader Smart Engineering Limited and its subsidiary namely Leader Smart Engineering
(Shanghai) Limited (together “Leader Smart”) and were valued at £240,030 of which £22,991 and £217,039
was credited to the Share Capital Account and Share Premium Account respectively, before expenses.
On 14 March 2007, 52,500,000 new ordinary shares of HK$0.0625 were placed at a price of 2 pence per
share by HB Corporate. At the same time, 2,500,000 ordinary shares of HK$0.0625 were allotted and issued
at 2 pence per share to HB Corporate in satisfaction of their placing fee. £223,541 and £811,257 was credited
to the Share Capital Account and the Share Premium Account in respect of this placing respectively, before
expenses.
The notes numbered 1 to 30 form an integral part of these financial statements.
UNIVISION ENGINEERING LIMITED - 24 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
1. GENERAL INFORMATION
The Company is incorporated in Hong Kong as a limited company. The address of its registered office
is 8/F Lever Tech Centre, 69-71 King Yip Street, Kwun Tong, Kowloon, Hong Kong.
The Company has its primary public listing on the Alternative Investment Market of the London Stock
Exchange (“AIM”).
The Company is engaged in the supply, design, installation and maintenance of closed circuit
television and surveillance systems, the sale of security system related products and provision for
electronical and mechanical services. The principal activities of the subsidiaries are set out in note 19
to the financial statements.
2.
B ASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS), IFRIC interpretations and in accordance with the rules of the International
Accounting Standards Board (IASB). The financial statements have also been prepared under the
historical cost convention.
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying
the Group’s Accounting Policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant are disclosed in Note 6.
Standards and Interpretations in issue but not yet effective or not yet relevant
IFRS 7 “Financial Instruments: Disclosures”, and the complementary amendments to IAS 1
“Presentation of Financial Statements”, require new disclosures relating to financial instruments. This
standard is effective for the year ending 31 December 2007 but will not have an impact on the
classification or valuation of the Group's financial instruments.
IFRS 8 “Operating Segments” requires companies to adopt a management approach to reporting on
their operating segments. This standard is effective for the year ending 31 December 2009 but is not
expected to have an impact on the Group's reporting segments.
IFRIC 8 “Scope of IFRS 2” addresses whether IFRS 2 “Share-based Payment” applies to transactions
in which the entity cannot identify specifically some or all of the goods or services received in return
for issuing equity instruments. The interpretation is effective for the year ending 31 December 2007.
The interpretation is not expected to have a major impact on the Group’s results or equity.
IFRIC 9 “Reassessment of Embedded Derivatives” is effective for the year ending 31 December 2007.
As none of the terms of the Group’s contracts have changed, IFRIC 9 is not relevant to the Group.
IFRIC 10 “Interim Financial Reporting and Impairment” prohibits companies from reversing
impairment losses recognised in an interim period on goodwill and investments in equity instruments
and in financial assets carried at cost, where a loss would not have been recognised at a subsequent
balance sheet date. The interpretation is effective for the year ending 31 December 2007. The
interpretation is not expected to have a major impact on the Group’s results or equity.
UNIVISION ENGINEERING LIMITED - 25 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
2.
BASIS OF PREPARATION OF FINANCIAL STATEMENT (CONT’D)
IFRIC 11 IFRS 2 – “Group and Treasury Share Transactions” considers how certain grants of equity
instruments should be treated under IFRS 2 “Share-based Payment”. The interpretation is effective for
the year ending 31 December 2008. The interpretation is not expected to have a major impact on the
Group’s results or equity.
IFRIC 12 “Service Concession Arrangements” is effective for the year ending 31 December 2008. As
none of the Group entities is involved in public-to-private service concession arrangements, IFRIC 12
is not relevant to the Group.
The company will be adopting IFRIC 10 “Interim Financial Reporting and Impairment”
3.
BASIS OF PREPARATION OF CONSOLIDATION
The Group Financial Statements consolidate the financial statements of UniVision Engineering
Limited and all its subsidiary undertakings made up to 31 March 2007.
Subsidiaries are entities over which the Group has control. Control is the power to govern the
financial and operating policies of the entity so as to obtain benefits from its activities. The Group
obtains and exercises control through voting rights.
The acquisition of subsidiary undertakings has been accounted for using the purchase method of
accounting. The cost of an acquisition is measured as the fair value of the assets given, equity
instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly
attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities
assumed are measured initially at their fair values at the acquisition date. The excess of the cost of
acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as
goodwill.
Inter-company transactions, balances and unrealised gains on transactions between Group companies
are eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence of an
impairment of the asset transferred. Amounts reported in the financial statements of subsidiary
undertakings have been adjusted where necessary to ensure consistency with the Accounting Policies
adopted by the Group.
The Group treats transactions with minority interests as transactions with parties external to the Group.
Disposals to minority interests result in gains and losses for the Group that are recorded in the Income
Statement. Purchases from minority interests result in goodwill, being the difference between any
consideration paid and the relevant share acquired of the carrying value of net assets in the subsidiary
undertakings.
UNIVISION ENGINEERING LIMITED - 26 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
3.
BASIS OF PREPARATION OF CONSOLIDATION (CONT’D)
Whilst none of the subsidiaries have a statutory year end of 31 March 2007, management accounts
have been produced and audited for the purposed of preparing Group Financial Statements.
4.
PRINCIPAL ACCOUNTING POLICIES
The financial statements have been prepared in accordance with International Financial Reporting
Standards.
(a) Revenue recognition
Revenue represents the fair value of the consideration received or receivable by the Group for
goods supplied and services provided in the ordinary course of the Group’s activities.
Revenue from the sales of goods 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.
Revenue from service contracts is recognised on a straight line basis over the service periods
thereof.
Revenue from construction contracts is recognised in accordance with the Group’s accounting
policy on construction contracts (see note 4(b)).
Revenue from solution sales is recognised when the services are rendered.
(b) Construction contracts
The Group enters into contracts for the supply, design and installation of closed circuit television
and surveillance systems. These contracts are classified as construction contracts.
When the outcome of a construction contract can be estimated reliably, contract revenue and costs
are recognised by reference to the degree of completion of each contract. Costs are recognised as
a proportion of total costs incurred at the balance sheet date compared with the estimated total cost
of the contract. The related revenue is recognised using the estimated profit margin of the project.
Other than in cases where there is an expected loss, contract costs are recognised as expenses in
the period in which they are incurred.
Where progress billings exceed costs incurred plus recognised profits less recognise losses, the
balance is shown as due to construction contract customers. Otherwise the balance is shown as
due from construction contract customers.
UNIVISION ENGINEERING LIMITED - 27 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
4.
PRINCIPAL ACCOUNTING POLICIES (CONT’D)
(c) Research and development costs
Expenditure on research activities, undertaken with prospect of gaining new technical knowledge
and understanding, is recognised in the income statement as an expense as incurred.
Expenditure on development activities is capitalised if the product or process is technically and
commercially feasible and the Group has sufficient resources to complete development.
The expenditure capitalised includes the cost of materials, direct labour and an appropriate
proportion of overheads. Other development expenditure is recognised in the income statement as
an expense as incurred. Capitalised development expenditure is stated at cost less accumulated
amortisation and impairment losses.
Amortisation is charged to the income statement on a straight-line basis over the estimated useful
lives of the capitalised development costs.
(d) Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any impairment losses. It
is depreciated at rates sufficient to write off its cost over its estimated useful lives on a straight line
basis. The principal annual rates are as follows:
Computer equipment
Furniture and fixtures
Leasehold improvements
Motor vehicles
Research assets
30%
20%
20%
30%
20%
The gain or loss on disposal of plant and equipment is the difference between the net sales
proceeds and the carrying amount of the relevant asset, and is recognised in the income statement.
(e) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date to assess whether there is
any indication of impairment. If any such indication exists, the recoverable amount of the asset is
estimated. Where necessary, an impairment loss is recognised to reduce the asset to its
recoverable amount. Such impairment losses are recognised in the income statement.
(f) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a
weighted average method and in the case of work in progress and finished goods, comprises direct
materials, direct labour and an appropriate proportion of overheads.
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.
UNIVISION ENGINEERING LIMITED - 28 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
4.
PRINCIPAL ACCOUNTING POLICIES (CONT’D)
(g) Trade and other receivables
Trade and other receivables are initially recognised at fair value and thereafter stated at amortised
cost less impairment losses for bad and doubtful debts. Where the receivables are interest-free
loans made to related parties without any fixed repayment terms or the effect of discounting would
be immaterial, the receivables are stated at cost less impairment losses for bad and doubtful debts.
Impairment losses for bad and doubtful debts are measured as the difference between the carrying
amount of the financial asset and the estimated future cash flows, discounted where the effect of
discounting is material.
(h) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs.
Subsequent to initial recognition, interest-bearings are stated at amortised cost with any difference
between cost and redemption value being recognised in profit or loss over the period of the
borrowings using the effective interest method.
(i) Trade payables and accruals
Trade payables and accruals are initially recognised at fair value and thereafter stated at amortised
cost unless the effect of discounting would be immaterial, in which case they are stated at cost.
(j) Cash and cash equivalents
Cash and cash equivalents represent cash at bank and on hand, demand deposits with banks and
other financial institutions, and short-term highly liquid investments which are readily convertible
into known amounts of cash and subject to an insignificant risk of change in value, having been
within three months of maturity at acquisition. For the purpose of the cash flow statement, bank
overdrafts which are repayable on demand and form an integral part of an enterprise’s cash
management are also included as a component of cash and cash equivalents.
(k) Goodwill
Goodwill represents the excess of the cost of acquisition over the fair value of the Group’s share
of the identifiable net assets acquired. Goodwill is stated at cost less accumulated impairment
losses and are systematically tested for impairment at each balance sheet date.
(l) Investments
The Company records investments in subsidiary undertakings at fair value of each company at
acquisition less and related impairment costs.
These investments are subject to an annual impairment review.
UNIVISION ENGINEERING LIMITED - 29 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
4. PRINCIPAL ACCOUNTING POLICIES (CONT’D)
(m) Operating leases
Leases where substantially all the risks and rewards of ownership of assets remain with the leasing
company are accounted for as operating leases. Rentals applicable to such operating leases are
charged to the income statement on a straight line basis over the lease term.
(n) Foreign currency translation
The Group’s functional currencies are the Hong Kong Dollar, New Taiwan Dollar and PRC
Renminbi. Transactions in foreign currencies have been translated into functional currencies at
the approximate rates of exchange ruling on the transaction dates. Monetary assets and liabilities
in foreign currencies are translated at the rates ruling on the balance sheet date. Profits and losses
resulting from this translation policy are included in the income statement.
The Group has chosen to use Pounds Sterling as the presentational currency for the financial
information presented in these financial statements. Assets and liabilities at each balance sheet
date have been translated at the closing rate for that balance sheet date. Income and expenses for
each income statement have been translated at the average rate for each year, which rate is
considered to be a reasonable approximation to the actual rates arising in the year. Components of
equity have been translated at the rate in effect when the equity item arose. Share capital and
retained earnings were first converted into the presentational currency on 1 April 2002 and the rate
in effect on that date was used to convert share capital and retained earnings at that date. All
resulting exchange differences have been recognised as a separate component of equity.
(o) Borrowing costs
Borrowing costs are expensed in the income statement in the year in which they are incurred.
(p) Employee benefits
Obligations for contributions to defined contribution retirement plans, are recognised as expenses
in the income statement as incurred.
(q) Provisions and contingent liabilities
Provisions are recognised for liabilities of uncertain timing or amount when the company has a
present legal or constructive obligation arising as a result of a past event, it is probable that an
outflow of economic benefits will be required to settle the obligation and a reliable estimate can be
made. Where the time value of money is material, provisions are stated at the present value of the
expenditure expected to settle the obligation.
Where it is not probable that an outflow of economic benefits will be required, or the amount
cannot be reliably estimated, the obligation is disclosed as a contingent liability, unless the
probability of outflow is remote.
(r) Related parties
Two parties are considered to be related if one party has the ability, directly or indirectly, to
control the other party or exercise significant influence in making financial and operating
decisions. Parties are also considered to be related if they are subject to common control or
common significant influence.
UNIVISION ENGINEERING LIMITED - 30 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
4.
PRINCIPAL ACCOUNTING POLICIES (CONT’D)
(s) Taxation
The charge for taxation is based on the results for the year as adjusted for items which are non-
assessable or disallowable. Profits tax is provided at the rate prevailing for the year based on the
assessable profit for the year less allowable losses, if any, brought forward for each jurisdiction in
which the Group has a taxable presence.
Deferred taxation is provided in full, using the balance sheet liability method, on temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements. Taxation rates applied at the balance sheet date are used to determine
deferred taxation. Deferred tax assets are recognised to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be utilised.
Deferred taxation is charged or credited to the income statement, except when it relates to items
charged or credited directly to equity. In this case the deferred taxation is also dealt with in
equity.
(t) Events after the balance sheet date
The effect of events after the balance sheet date are adjusted for in the financial statements if they
provide additional information about the Group’s position at the balance sheet date or indicate that
the going concern assumption is not appropriate. Any material non-adjusting items are disclosed
in the notes to the financial statements.
(u) Segment reporting
A business segment is a group of assets and operations engaged in providing products or services
that are subject to risks and returns that are different from those of other business segments. A
geographical segment is engaged in providing products or services within a particular economic
environment that are subject to risks and returns that are different from those of segments
operating in other economic environments.
(v) Share based payments
Share based payments for goods or services are reflected at fair value of the shares issued or the
service provided.
(w) Comparative figures
Certain comparative figures have been restated or reclassified to conform with the current year’s
presentation.
UNIVISION ENGINEERING LIMITED - 31 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
5.
FINANCIAL RISK MANAGEMENT
Financial assets of the Group are bank and cash; pledged bank deposits; deposits, prepayments and
other receivables; amounts due from construction contract customers; bills receivables; short term loan
receivables; trade receivables and retention receivables. Financial liabilities include trade payables
and accruals; bills payables; bank loans and amounts due to construction contract customers. The
Group had no position in derivative contracts that qualified as, or were designated as, hedging
instruments as at 31 March 2006 and 2007 respectively.
Financial risk management objectives and policies
The Group’s exposure to financial risk includes primarily credit risk, liquidity risk, foreign currency
risk, interest rate risk and fair value estimation.
Credit risk
The Group’s credit risk is primarily attributable to amounts due from contract customers, trade
receivables, short term loan receivable and retention receivables due to the risk inherent in debt
collections within the segment in which the Group operates. Strict control and management is required
to assess customer credit before tendering for contract works to mitigate credit risk. All receivable
balances are monitored on an ongoing basis and overdue balances are followed up by senior
management.
At 31 March 2007, the Group has certain trade receivables of £668,724 due from two People’s
Republic of China (“PRC”) customers in respect of solution sales conducted during the year.
Management has reviewed the progress of the contracts undertaken by the customers and a repayment
schedule for the trade receivables of £385,776 was agreed subsequent to the year end date that the
receivables will be repaid within 1 year.
In addition the Group has an interest free short term loan of £325,150 advanced to the one PRC
customer which the repayment date was expired during the year. The loan is secured on 100% of the
share capital of the PRC customer and 45% of the share capital of another related PRC company.
In view of the above, the Group’s exposure to bad debts on the trade receivables and the short term
loan receivable has been reduced.
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 the management to finance the Group’s operations.
The 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.
UNIVISION ENGINEERING LIMITED - 32 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
5.
FINANCIAL RISK MANAGEMENT (CONT’D)
Foreign currency risk
The Group operates mostly in Hong Kong, Taiwan and PRC and revenue and expenditure are mainly
denominated in Hong Kong Dollars (“HKD”), New Taiwan Dollars and PRC Renminbi. The Group is
also exposed to foreign currency risks as it engages in projects that were billed in US dollars (“USD”).
For sales denominated in USD, as HKD is pegged to USD, the Group does not expect any significant
movements in the USD/HKD exchange rate. The foreign currency exposure regarding the USD is
considered to be minimal.
The Group currently does not have any policy on hedges of foreign currency risk. However, the
management monitors the foreign currency risk exposure and will consider hedging significant foreign
currency risk should the need arise.
Interest rate risk
For the year ended 31 March 2007, the Group has minor amounts of bank and other borrowings.
Accordingly, management consider that the Group’s exposure to interest rate risk is not significant.
Fair value estimation
Management consider that the carrying amounts of the Group’s financial assets and liabilities is
approximate to fair value at each balance sheet date.
6.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other
factors. These include expectations of future events that are believed to be reasonable under the
circumstances. Although these estimates are based on management’s best knowledge of current events
and actions, the actual results will, by definition, seldom equal those estimates. The estimates and
assumptions that involve a high degree of judgements are discussed below:
Estimation of contract costs
Estimated costs to complete contracts are judged by management 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. Management believes that contract budgets do not
deviate materially from actual costs incurred due to a strong cost control system with regular review of
budgets which highlight any incidences that could affect estimated costs to completion.
Estimation of provision for inventories
The identification of any provision for inventories of the Group requires the use of judgement and
estimates by the management. Management estimate the net realisable value of inventories with
reference to the latest invoice prices and the value in use. Operational procedures are in place to
monitor the condition and usefulness of inventories. Management regularly review the age of
inventories to identify slow moving items and a physical inventory count is carried out on a regular
basis to identify obsolete or defective items. Provisions will be established for inventories where an
impairment has been identified. At 31 March 2007, there was no provision for obsolete inventories
recognised as expense in the income statement.
UNIVISION ENGINEERING LIMITED - 33 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
6.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)
Estimation of provision for trade and other receivables
The estimation of provision for trade and other receivables includes an assessment of recoverability of
individual account balance and a review of ageing analysis of trade and other receivables by
management. Management 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 receivable might not be recovered in full, provision will be made and recognised as expense in the
income statement.
At 31 March 2007, the Group has certain trade receivables of £668,724 due from two People’s
Republic of China (“PRC”) customers in respect of solution sales conducted during the year.
Management has reviewed the progress of the contracts undertaken by the customers and a repayment
schedule for the trade receivables of £385,776 was agreed subsequent to the year end date that the
receivables will be repaid within 1 year. Therefore, no provision for bad debts in respect of these trade
receivables is recognised in the income statement.
Estimation of fair value of goodwill
The fair value is calculated as based on projections of the future profitability and cash flows for each
cash generating unit. Future cash flows are then discounted at an appropriate rate. Management is
exercising its judgement in a number of forward looking areas. Since these judgements relate to the
future, actual results are likely to be different because events and circumstances frequently do not
occur as expected both due to error in estimation and external events, and the differences may be
material.
Deferred Taxation
Deferred tax assets are recognised for tax losses not yet used and temporary deductible differences.
As those deferred tax assets can only be recognised to the extent that it is probable that future taxation
profit will be available against which the unused tax credits can be utilised, management’s judgement
is required to assess the probability of future taxation profits. Management’s assessment is constantly
reviewed and deferred tax assets are recognised if it becomes probable that future taxable profits will
allow the deferred tax asset to be recovered.
UNIVISION ENGINEERING LIMITED - 34 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
7. SEGMENT INFORMATION
Segment information is presented by way of two segment formats: (a) by business segment on a
primary segment reporting basis; and (b) by geographical segment on a secondary segment reporting
basis.
(a) Business segments
The Group is organised into the following business segments:
- Construction contracts
- Maintenance contracts
- Product sales
- Solution sales
Results by business segment for the year ended 31 March 2007 are as follows:
Income statement information:
Revenue
Profit from operation before tax
and finance costs
Balance sheet information:
Assets
Unallocated
Construction
contracts
£
Maintenance
contracts
£
Product
Solution
sales
£
sales
£
Total
£
5,425,499
686,513
994,508
188,836
1,817,599
332,120
698,172
269,430
8,935,778
1,476,899
5,477,934
-
1,004,119
-
1,835,165
-
704,919
-
9,022,137
489
9,022,626
Liabilities
1,910,853
350,265
640,156
245,895
3,147,169
Other segment information:
Depreciation
Capital expenditure
70,070
31,630
12,844
5,798
23,474
10,597
9,024
4,073
115,412
52,098
Results by business segment for the year ended 31 March 2006 are as follows:
Income statement information:
Revenue
Construction
contracts
(As restated)
£
Maintenance
contracts
(As restated)
£
Product
sales
(As restated)
£
Solution
sales
(As restated)
£
Total
(As
restated)
£
2,189,020
514,015
400,756
782,989
3,886,780
Profit from operation before tax
262,399
265,674
7,865
332,070
868,008
and finance costs
Unallocated
Balance sheet information:
Assets
Unallocated
Liabilities
Unallocated
Other segment information:
Depreciation
Capital expenditure
Provision for obsolete inventories
2,204,691
543,848
281,803
1,706,064
911,509
122,021
35,484
24,901
(121,497)
746,511
4,736,406
20,585
4,756,991
1,093,915
49,937
1,143,852
2,715
4,286
154,629
670
1,057
14,006
347
548
33,201
2,101
3,316
-
5,833
9,207
201,836
UNIVISION ENGINEERING LIMITED - 35 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
7. SEGMENT INFORMATION (CONT’D)
(b) 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 People’s Republic of China, and all of the Group’s assets are located in the same
geographic segment.
.
8. OTHER INCOME As restated
Compensation income
Exchange gains
Written back on trade payables and accruals
Gain on disposal of investment securities
Interest income
Services, handling and sundry income
2007
£
-
82,714
-
30,105
19,966
6,499
2006
£
112,453
26,189
77,136
-
15,929
12,780
139,284
244,487
9. PROFIT FROM OPERATIONS BEFORE TAX AND FINANCE COSTS
Profit from operations before tax and finance costs is stated after charging / (crediting) the following:
As restated
Cost of inventories recognised as expenses*
Unrealised loss on investment account carried at fair value
Impairment losses on deposits, prepayments and other receivables
(Recovery of)/provision for obsolete inventories, net
Auditors’ remuneration
Depreciation
Owned plant and equipment
Directors’ remuneration (note 12)
Exchange gains
Research and development costs
Operating leases - land and buildings
Staff costs (excluding directors’ remuneration)
Written back on trade payables and accruals
Loss on disposal of plant and equipment
2007
£
2006
£
3,947,819
14,747
46,700
(205,064)
102,511
1,457,844
-
-
201,836
28,834
115,412
5,833
189,786
(82,714)
65,666
47,079
870,074
(51,730)
739
89,494
(26,189)
25,585
28,079
522,289
(77,136)
-
* Cost of inventories recognised as expenses includes reversal of provision for obsolete inventories of £205,064
(as restated 2006: provision for obsolete inventories of £201,836) and written back on trade payables and
accruals of £51,730 (2006: £Nil).
UNIVISION ENGINEERING LIMITED - 36 - ANNUAL REPORT 2007
10. NON-OPERATING EXPENSES
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
2007
£
As restated
2006
£
Total share issue costs
114,637
668,220
Charged to equity:
Share placing costs
Share issue costs upon admission to AIM
Charged to income statement:
Admission to AIM costs
Exchange differences
Total share issue costs
114,637
-
114,637
-
-
114,637
15,500
247,415
262,915
392,380
12,925
668,220
On 14 March 2007, 52,500,000 new ordinary shares of HK$0.0625 were placed at a price of 2 pence
per share by HB Corporate and have raised £987,762 thereon (“the Placing”). A portion of the share
issue costs that relates to the issuing of new shares amounting to £114,637 have been charged to
equity.
11. FINANCE COSTS
Bank loan interests
12. DIRECTORS’ REMUNERATION
Directors’ remuneration for the year is disclosed as follows:
Fees
Other emoluments:
Salaries, bonuses and allowances
Pension scheme contributions
As restated
2006
£
2007
£
44,476
2007
£
92,535
95,146
2,105
189,786
As restated
2006
£
38,926
49,415
1,153
89,494
Fees include £18,259 (as restated 2006: £5,767) paid to independent non-executive directors. There
were no other emoluments payable to the independent non-executive directors during the year (as
restated 2006: £Nil).
UNIVISION ENGINEERING LIMITED - 37 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
2007
£
990,520
69,340
1,059,860
As restated
2006
£
589,689
22,094
611,783
13. STAFF COSTS
Wages and salaries
Pension scheme contributions
14. TAXATION
(a) No provision for Hong Kong profits tax has been made in the financial statements since the
Company has sufficient tax losses brought forward to set off against current year’s assessable
profit.
(b) Subsidiary taxes are calculated by the rates applicable in the local jurisdiction.
(c) The taxation on the Group’s profit before taxation differs from the theoretical amount that would
arise using applicable tax rate as follows:
Profit before taxation
Notional tax on profit before taxation, calculated at the tax rates
applicable of profits in the respective countries
Tax effect of income that is not taxable in determining taxable
profit
Tax effect of expenses that are not deductible in determining
taxable profit
Tax effect of temporary differences not recognised
Tax effect of utilisation of tax losses not previously recognised
Tax expense
2007
£
As restated
2006
£
1,432,423
354,131
267,254
61,973
(11,336)
(4,583)
7,842
10,305
(243,406)
30,659
103,416
(654)
(160,152)
-
At the balance sheet date, the Company has unused tax losses of £4,461,050 (as restated 2006:
£6,322,994) that are available for offset against future taxable profits of the company. No deferred tax
asset has been recognised due to the unpredictability of the future profit streams. Tax losses may be
carried forward indefinitely.
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.
UNIVISION ENGINEERING LIMITED - 38 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
15. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the profit attributable to equity holders of the
parent for the year of £1,281,189 (as restated 2006: £354,131), and the weighted average of
327,814,621 (2006: 279,155,799) ordinary shares in issue during the year.
No diluted loss per share has been disclosed as there was no potential dilutive ordinary share
outstanding during the year (2006: £Nil).
16. DIVIDEND
No dividend has been paid in the year ended 31 March 2007 (2006 : £Nil).
17. GOODWILL
Group
Cost
At 1 April 2006
Arising from acquisition of subsidiary undertakings (see note (19))
At 31 March 2007
Impairment loss
At 1 April 2006
Charge for the year
At 31 March 2007
Carrying amount
At 31 March 2007
At 31 March 2006
£
-
961,845
961,845
-
-
-
961,845
-
UNIVISION ENGINEERING LIMITED - 39 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
18. PLANT AND EQUIPMENT
Group
The movement of plant and equipment during the year is as follow:
Cost
At 1 April 2005
Additions
Exchange realignment
At 31 March 2006
Acquisition of subsidiary
undertakings
Additions
Disposal
Exchange realignment
Furniture
and fixtures
£
Computer
equipment
£
Motor
vehicles
£
Leasehold
improvements
£
Research
assets
£
71,390
5,466
5,926
82,782
48,031
15,544
-
(11,221)
111,563
3,741
9,147
124,451
93,268
5,574
-
(15,073)
13,565
-
1,101
14,666
48,101
11,705
(6,078)
(1,465)
5,876
-
477
6,353
47,296
-
-
(3,201)
-
-
-
-
601,786
19,275
-
3,413
Total
£
202,394
9,207
16,651
228,252
838,482
52,098
(6,078)
(27,547)
At 31 March 2007
135,136
208,220
66,929
50,448
624,474
1,085,207
Accumulated depreciation
At 1 April 2005
Charge for the year
Exchange realignment
At 31 March 2006
Acquisition of subsidiary
undertakings
Charge for the year
Written back on disposal
Exchange realignment
68,612
1,237
5,601
75,450
21,835
12,493
-
(10,243)
107,519
2,376
8,787
118,682
66,302
12,497
-
(15,030)
10,942
2,220
940
14,102
27,870
9,081
(5,293)
(1,864)
5,876
-
477
6,353
9,197
7,807
-
(1,558)
-
-
-
-
324,406
73,534
-
(974)
192,949
5,833
15,805
214,587
449,610
115,412
(5,293)
(29,669)
At 31 March 2007
99,535
182,451
43,896
21,799
396,966
744,647
Net book value
At 31 March 2007
35,601
25,769
23,033
28,649
227,508
340,560
At 31 March 2006
7,332
5,769
564
-
-
13,665
UNIVISION ENGINEERING LIMITED - 40 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
18. PLANT AND EQUIPMENT (CONT’D)
Company
The movement of plant and equipment during the year is as follows:
Furniture
and
fixtures
£
71,390
5,466
5,926
82,782
1,280
-
(10,700)
Computer
equipment
£
Motor
vehicles
£
Leasehold
improvements
£
Total
£
111,563
3,741
9,147
13,565
-
1,101
124,451
2,755
-
(15,601)
14,666
4,877
(3,772)
(1,738)
5,876
-
477
6,353
-
-
(753)
202,394
9,207
16,651
228,252
8,912
(3,772)
(28,792)
Cost
At 1 April 2005
Additions
Exchange realignment
At 31 March 2006
Additions
Disposal
Exchange realignment
At 31 March 2007
73,362
111,605
14,033
5,600
204,600
Accumulated depreciation
At 1 April 2005
Charge for the year
Exchange realignment
At 31 March 2006
Charge for the year
Written back on disposal
Exchange realignment
68,612
1,237
5,601
75,450
1,795
-
(9,907)
107,519
2,376
8,787
10,942
2,220
940
118,682
2,816
-
(15,036)
14,102
1,012
(3,274)
(1,715)
5,876
-
477
6,353
-
-
(753)
192,949
5,833
15,805
214,587
5,623
(3,274)
(27,411)
At 31 March 2007
67,338
106,462
10,125
5,600
189,525
Net book value
At 31 March 2007
At 31 March 2006
6,024
7,332
5,143
3,908
5,769
564
-
-
15,075
13,665
UNIVISION ENGINEERING LIMITED - 41 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
19.
INVESTMENT IN SUBSIDIARY UNDERTAKINGS
Shares in subsidiary undertakings
At 1 April
Additions
At 31 March
Amounts due from subsidiary undertakings
At 1 April
Additions
At 31 March
Total
2007
£
2006
£
-
1,053,475
1,053,475
-
1,000,606
1,000,606
2,054,081
-
-
-
-
-
-
-
Particulars of the Group’s subsidiary undertakings at 31 March 2007 are set out below:
Name
Place of
incorporation and
operations
Issued and
fully paid up
share capital/
registered capital
Percentage
of equity
attributable to
the Group
Direct Indirect
Principal
activities
T-Com Technology Co
Taiwan
Limited
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
Engineering Limited
Hong Kong
HK$10,000
Ordinary share
100%
-
Investment holding and
engineering contractor
Leader Smart
Engineering
(Shanghai)
Limited
PRC
USD1,000,000
Registered capital
-
100% Supply, design, installation and
maintenance of closed circuit
television and surveillance
systems and provision of
engineering consultancy
services
UNIVISION ENGINEERING LIMITED - 42 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
19.
INVESTMENT IN SUBSIDIARY UNDERTAKINGS (CONT’D)
(a) T-Com Technology Co Limited
On 17 May 2006, the Company acquired 52.25% interest in T-Com Technology Co Limited (“T-
Com”) for a total consideration of £475,467.
The fair value of the subsidiary undertaking on the date of acquisition is as disclosed below:
Net assets acquired:
Plant and equipment
Inventories
Due from construction contract customers
Trade and other receivables
Cash and cash equivalents
Bank loan, secured
Bills payables
Due to construction contract customers
Trade payables and accruals
Minority interest
Represented by:
Cash consideration
Goodwill (see note 17)
Analysis of the net outflow of cash and cash equivalents
in respect of the acquisition is as follows:
Cash consideration paid
Cash and cash equivalents acquired
£
337,736
562,027
696,250
503,346
45,159
(1,070,394)
(271,298)
(38,253)
(418,885)
345,688
(165,066)
180,622
475,467
(294,845)
180,622
(475,467)
45,159
(430,308)
From the date of acquisition, T-Com has contributed £128,430 to the net profit of the Group. It
is not possible to estimate the amount T-Com would have contributed to the net profit of the
Group had the acquisition taken place at the beginning of the year as T-Com has both a different
year end and accounting policies. The cost of preparing such information would be excessive.
UNIVISION ENGINEERING LIMITED - 43 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
19.
INVESTMENT IN SUBSIDIARY UNDERTAKINGS (CONT’D)
(b) Leader Smart Engineering Limited
On 2 October 2006, the Company acquired 100% interest in Leader Smart for an aggregate
consideration of £606,920.
The fair value of the subsidiary undertakings on the date of acquisition is as disclosed below:
Net liabilities acquired:
Plant and equipment
Other receivables
Cash and cash equivalents
Trade payables and accruals
Represented by:
Cash consideration
Share consideration
Goodwill (see note 17)
Analysis of the net outflow of cash and cash equivalents
in respect of the acquisition is as follows:
Cash consideration paid
Cash and cash equivalents acquired
£
51,136
498,637
4,076
(613,929)
(60,080)
366,890
240,030
(667,000)
(60,080)
(366,890)
4,076
(362,814)
From the date of acquisition, Leader Smart has contributed loss of £34,100 to the net profit of the
Group. It is not possible to estimate the amount Leader Smart would have contributed to the net
profit of the Group had the acquisition taken place at the beginning of the year as Leader Smart
has both a different year end and accounting policies. The cost of preparing such information
would be excessive.
UNIVISION ENGINEERING LIMITED - 44 - ANNUAL REPORT 2007
20. INVENTORIES
Raw materials
Work in progress
Finished goods
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
2007
Group
£
Company
£
2006
£
330,413
6,211
670,810
1,007,434
330,413
6,211
481,516
818,140
138,849
1,695
51,669
192,213
The cost of inventories recognised as expense and included in cost of sales amounted to £3,947,819
(2006: £1,457,844).
21. CONSTRUCTION CONTRACTS IN PROGRESS
Contract costs incurred
Attributable profits less foreseeable losses
Progress billings
Due from construction contract customers
Due to construction contract customers
2007
Group
£
Company
£
2006
£
6,034,675
1,727,120
3,909,513
1,151,684
2,419,074
626,434
7,761,795
(6,511,748)
5,061,197
(4,881,208)
3,045,508
(2,563,849)
1,250,047
179,989
481,659
1,849,509
(599,462)
763,951
(583,962)
934,195
(452,536)
1,250,047
179,989
481,659
At 31 March 2007 retentions held by customers for contract work amounted to £10,254 (2006:
£38,882).
At 31 March 2007 there are no advances received from customers for contract work included in
amount due to customers (2006: £Nil).
22. TRADE AND OTHER RECEIVABLES
Trade receivables
Bills receivables
Short term loan receivable
Retention receivables
Deposits, prepayments and other receivables
Pledged bank balances
2007
Group
£
2,158,229
10,052
325,150
10,254
631,512
124,149
3,259,346
Company
£
1,175,836
-
-
10,254
281,972
124,149
1,592,211
2006
£
1,303,736
-
368,868
38,882
329,568
161,551
2,202,605
UNIVISION ENGINEERING LIMITED - 45 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
22. TRADE AND OTHER RECEIVABLES (CONT’D)
The directors consider that the carrying amount of trade and other receivables approximates to their
fair value.
The short term loan receivable at 31 March 2007 was secured on 100% of the share capital of the
counterparty and 45% of the share capital of a related PRC company. The 45% shareholding is owned
by two shareholders of the counterparty who are the directors of both this PRC company and the
counterparty. The loan was interest free and with no fixed term of repayment.
At 31 March 2007 and 2006 there was no amount included in retention receivables arising from
construction contracts which are due for settlement after twelve months.
At 31 March 2007, the Group has pledged bank deposits of £124,149 (2005: £161,551) to banks for
performance bonds in respect of construction contracts undertaken by the Group.
23. CASH AND CASH EQUIVALENTS
Cash and bank balances
Short term bank deposits
2007
£
Group
671,873
932,059
£
Company
2006
£
558,235
930,060
268,313
1,146,000
1,603,932
1,488,295
1,414,313
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an
original maturity of three months or less. The carrying amount of these assets approximates to their
fair value.
Short term bank deposits are made for periods of seven or eight days and earn interest at an interest
rate ranging from 3.0625%p.a. to 5%p.a. (2006: 2.9%p.a. to 3.85%p.a.)
24. BANK LOANS, SECURED
2007
£
Group
£
Company
2006
£
Bank loans repayable within 1 year
1,241,905
-
-
The bank loans carried interests at rates ranging from 4.20% to 4.27% per annum (2006: Nil) and were
secured by the sales contracts from Formosa Plastics Group.
UNIVISION ENGINEERING LIMITED - 46 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
25. TRADE PAYABLES AND ACCRUALS
Trade payables
Provision for employee’s benefit
Provision for sales tax
Provision for taxation
Accruals and other payables
2007
Group
£
Company
£
473,303
-
18,964
29,485
563,192
312,121
-
18,964
-
347,222
1,084,944
678,307
2006
£
205,007
35,464
21,513
-
429,332
691,316
The directors consider that the carrying amount of the trade payables and accruals approximates to
their fair value.
26. SHARE CAPITAL
Authorised:
800,000,000 ordinary shares of HK$0.0625 each
Issued and fully paid:
383,677,323 (2006: 323,313,333) ordinary shares
of HK$0.0625 each
The Company has one class of ordinary shares.
2007
£
2006
£
3,669,470
3,669,470
1,697,617
1,451,085
On 10 October 2006, 5,363,990 new ordinary shares of HK$0.0625 were issued as partial
consideration for the acquisition of Leader Smart and were valued at £240,030 of which £22,991 and
£217,039 was credited to the Share Capital Account and Share Premium Account respectively, before
expenses.
On 14 March 2007, 52,500,000 new ordinary shares of HK$0.0625 were placed at a price of 2 pence
per share by HB Corporate. At the same time, 2,500,000 ordinary shares of HK$0.0625 were allotted
and issued at 2 pence per share to HB Corporate in satisfaction of their placing fee. £223,541 and
£811,257 was credited to the Share Capital Account and the Share Premium Account in respect of this
placing respectively, before expenses.
UNIVISION ENGINEERING LIMITED - 47 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
27. OPERATING LEASE COMMITMENTS
At the balance sheet date, the total future minimum lease payments under non-cancellable operating
leases for the office and warehouse premises are payable as follows:
Within one year
In the second to fifth years inclusive
2007
Group
£
Company
£
82,529
21,684
31,663
923
104,213
32,586
2006
£
25,135
1,047
26,182
28. RELATED PARTY TRANSACTIONS
Compensation of key management personnel
The remuneration of the key management of the Group during the year was as follows:-
2007
£
2006
£
Salaries and other short term benefits
256,525
176,253
The remuneration of key management personnel comprise the remuneration of executive directors and
key executives.
Executive directors include the executive chairman, the chief executive officer and the technical
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 of Corporate
Governance to the annual report and note 12 to the financial statements.
UNIVISION ENGINEERING LIMITED - 48 - ANNUAL REPORT 2007
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2007
28. RELATED PARTY TRANSACTIONS (CONT’D)
Compensation of key management personnel (CONT’D)
Key executives include the sales manager, the operations manager and the financial controller 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 to the annual report.
Transactions with related companies
At 31 March 2007, there is a receivable balance of £5,423 (2006: Nil) in respect of legal fees which
was paid by the Group on behalf of UT Vision PTE, a company of which Stephen Koo is a director.
29. EVENTS AFTER THE BALANCE SHEET DATE
There have been no disclosable events since the balance sheet date.
30. COMPARATIVE FIGURES
The information of the year ended 31 March 2006 is in respect of the Company alone as it held no
subsidiaries at that date.
UNIVISION ENGINEERING LIMITED - 49 - ANNUAL REPORT 2007
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 2007 Annual General Meeting of UniVision Engineering Limited
will be held at UniVision Engineering Limited, 8/F Lever Tech Centre, 69-71 King Yip Street, Kwun Tong,
Kowloon, Hong Kong, on 29 October 2007 at 5:00P.M.. The following businesses will be transacted then:
1. To receive and adopt the Company’s audited financial statements for the financial year ended 31 March
2007 together with the Directors’ report and the auditors’ report;
2. To re-elect Mr. Stephen Pui Ming CHAN who retired by rotation, as a Director of the Company;
3. To re-elect Mr. Johnny Ka Siu TANG who retired by rotation, as a Non-Executive Director of the
Company;
4. To re-elect Mr. Andrew Ping Sum TANG who retired by rotation, as a Non-Executive Director of the
Company;
5. To re-elect Mr. Richard FERNIE who retired by rotation, as a Non-Executive Director of the Company;
6. To reappoint joint auditor CLB LITTLEJOHN FRAZER, Chartered Accountants and CCIF CPA
Limited as auditor 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. To consider and, if considered appropriate, pass the following resolution as an ordinary resolution 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 of HK$0.0625 each in the capital of the Company (the
‘Ordinary Shares’). 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 Annual General Meeting 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.
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
27 September 2007
Registered office:
8/F Lever Tech Centre,
69-71 King Yip Street,
Kwun Tong, Kowloon,
Hong Kong
UNIVISION ENGINEERING LIMITED - 50 - ANNUAL REPORT 2007
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, Computershare Investor Services (Channel Islands) Limited at PO Box 83,
Ordnance House, 31 Pier Road, St Helier, Jersey JE4 8PW, Channel Island, 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 27 September 2007 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.
UNIVISION ENGINEERING LIMITED - 51 - ANNUAL REPORT 2007