UniVision Engineering Limited
Annual Report
Year ended 31 March 2012
UNIVISION ENGINEERING LIMITED
Annual Report
Year ended 31 March 2012
Contents
Page
Board of Directors, Offic ers and Professional Advisers
Chairman’s Statement
Directors’ and Senior Management’s Biographies
Directors’ Report
Remuneration Report
Report on Corporate Governance
Statement of Directors’ Responsibilities
Independent Auditor’s Report to the Shareholders of UniVision
Engineering Limited
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Company Balance Sheet
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
Notice of Annual General Meeting
2
3
6
8
12
13
15
16
18
19
20
21
22
23
25
26
70
UNIVISION ENGINEERING LIMITED - 1 - ANNUAL REPORT 2012
BOARD OF DIRECTORS, OFFICERS
AND PROFESSIONAL ADVISERS
Board of Directors
Stephen Sin Mo KOO, Executive Chairman
Chun Hung WONG, Chief Executive Officer
Chun Pan WONG, Technical Director
Danny Kwok Fai YIP, Finance Director
Nicholas James LYTH, Non-Executive Director
Nominated Adviser and Broker
Zeus Capital Limited
3 Ralli Courts,
West Riverside,
Manchester M3 5FT,
UK.
Senior Management
Mike Chiu Wah CHAN, Director of Operations
Peter Yip Tak CHAN, Director of Sales and Marketin g
Audit Committee
Nicholas James LYTH, Chairman
Stephen Sin Mo KOO
Remuneration Committee
Nicholas James LYTH, Chairman
Stephen Sin Mo KOO
AIM Stock Code
UVEL
Company Secretary
Danny Kwok Fai YIP
Registered Office
8/F Lever Tech Centre,
69-71 King Yip Street,
Kwun Tong, Kowloon,
Hong Kong
Tel: (852) 2389 3256
Fax: (852) 2797 8053
E-mail: uvel@hk.uvel.com
Website: www.uvel.com
Principal bankers
Bank of China (Hong Kong)
Citibank, N.A.
Hong Kong and Shanghai Banking Corporation
Hua Nan Commercial Bank (Taiwan)
Auditor
HKCMCPA Company Limited
Certified Public Accountants
(Formerly known as ZYCPA Company Limited)
Unit 602, 6/F., Hoseinee House
69 Wyndham Street,
Central, Hong Kong
Registrars
Computershare Investor Services
(Jersey) Limited
Queensway House,
Hilgrove Street,
St Helier,
Jersey JE1 1ES,
Channel Islands
UK Depositary
Computershare Investor Services PLC
The Pavilions,
Bridgwater Road,
Bristol BS99 6ZZ,
UK
UNIVISION ENGINEERING LIMITED - 2 - ANNUAL REPORT 2012
CHAIRMAN’S STATEMENT
INTRODUCTION
I am pleased to report the Group’s audited results for the financial year ended 31 March 2012.
Following to the announcement on 25 June 2012 that the Group reached an agreement on 22 June 2012 for
the sale of the Group’s interest in its shopping mall project in Zhongshan, I believe that we have a good step
forward for the Group’s future development. The agreement which we have reached both settles the Group’s
outstanding liabilities to Mayne and will realise value from the asset for UniVision shareholders. Following
completion of the Sale, UniVision will be released from significant
indebtedness owed to its former
shareholder.
Revenue from the Group’s Security and Surveillance Systems bus iness remained stable. It was a slightly
drop of revenue in Hong Kong but we had growth of revenue in Taiwan during the year. The drop of revenue
in Hong Kong was mainly due the increase of competition in this rather small area. While the global
economic atmosphere was not favourable last year, we still maintained rather steady revenue. It is vital that
we can keep stable of our business, especially on uncertain environment. Our focus on maintenance services
continues. Stable cash flow from maintenance reve nue is important in the current market situations. It
provides a stable platform for us to explore growth in other areas, especially in China. Negotiations are
ongoing for some infrastructure projects which are implemented in the coming years in Hong Kong. We
anticipate that some will be finalised in the first half of the c oming financial year.
Our objective for the expansion of our Electrical and Mechanical (“E&M”) business remains . Our business
in China has been slowed down due to lack of capital. However, we are exploring various methods to obtain
extra funding to sustain our planned growth in China. T he sale of the Group’s interest in its shopping mall
project in Zhongshan recently provides a good opportunity to re -invest in China. In the event that a property
asset is sold for cash, a significant property taxation charge must be paid. Given that it is Univision’s
intention to reinvest into opportunities in Mainland China generally and Electrical and Mechanical
specifically if appropriate opportunities c an be identified to take the form of non cash consideration clearly
this is of benefit to all.
The Directors remain confident of the future of Univision and are optimistic about the Group’s prospects .
FINANCIAL REVIEW
The profit attributable to the equity holders of Company in this year is £1.8m (2011: £8.2m). The great
difference is because the Group has recognised a gain on reconsolidation of £8.4m for re-consolidating the
assets, liabilities and operating results accounts of Leader Smart Engineering (Shanghai) Limited into the
Group’s annual accounts for the financial year ended 31 March 2011. On the other hand, Group has
recognised a gain from forgiveness of interest and principal due from its former major shareholder £2m.
(2011: Nil). The Group has the provision for impairment loss on trade and other receivables totalling £0.4m
(2011: £0.9m).
The Group generated positive net cash of £0.4m from its operating activities in the current period (2011:
£0.5m). It maintained the cash and cash equivalen ts at 31 March 2012 of £0.5m (31 March 2011: £1m). The
decrease in the cash balance mainly due to the repayment of loan due from its former major shareholder
£0.6m during the current year (2011: Nil).
During the year under review the relative weak in the HK$ against sterling has led to an 3.3% depreciation in
the GBP reporting amount in the Consolidated Statement of Comprehensive Income, while a relative
strengthening closing rate at the year-end in the HK$ against sterling led to a 0.7% appreciation in the GBP
reporting amount in the Consolidated Balance Sheet. All figures in the Financial Statements therefore need
to be adjusted for comparison purposes.
UNIVISION ENGINEERING LIMITED - 3 - ANNUAL REPORT 2012
CHAIRMAN’S STATEMENT
( Continued)
Turnover in the period was decreased by 9.3% to £7.8m (2011: £8.6m). This decrease was mainly due to the
reduction of £0.9m in the Group’s construction contracts. This was caused by the drop of PRC E&M
business and the income of construction contract in HK. The drop of construction revenue in Hong Kong
was mainly due to the keen competition environment. Competition in job tendering led to a lower successful
bidding rate for new construction projects. The delay in PRC construction project was the reason for the
decrease in business income. On the other hand, there was a growth of 34%, £0.7m in the value of the
Group’s Taiwan construction contracts. Despite of the competitive environment, our maintenance contracts
are relatively stable and remained the same level with last year.
The Group’s business in Hong Kong is stable and continues to provide a steady profit margin and positive
cash flows from the operating activities for the Group’s operations. The Group’s major customers in the
Security and Surveillance Systems business are public organisations and sizeable private enterprises, such as
MTR Corporation Limited, which provide regular orders and reliable payment schedules. It is the reason
why our Hong Kong company does not require the bank overdraft and loan facilities. The maintenance
contract with MTR Corporation Limited has been renewed for a further three year commenc ed on 1 January
2012. The Directors believe there will be arise in demand for Security and Surveillance Systems business
coming from the local government infrastructure projects and from the commercial sector. We anticipate that
the Group’s turnover from this division will improve and remain optimistic on the ability of the Group to
successfully tackle the increased market competition in the coming years.
Gross profit margin reduced to 29% (2011: 39%). The major reason for decrease in GP is significantly
dropped in GP in Taiwan's construction contracts that from 40% to 23% due to keen competition in tendering
projects. It supported the growth of 34% in the revenue from Taiwan construction contracts in this current
year. Besides, the drop in turnover of 21% ( £0.4m) in Hong Kong construction contracts and the drop in
PRC's E&M business £0.9m which had a higher gross profit margin than the overall business . Inflation also
led to the increase in the material costs and the direct costs, such as wages and sub -contracting charges
during the reporting period.
Administration expenses decreased by 15% from last year to £1.7m (2011: £2m) mainly the inclusion of
£0.15m of expenses for the two years of Leader Smart whilst deconsolidated in year of 2011 and the
effective cost control measures on the operating cos ts. Finance costs dropped significantly during the year
for the loan due to Mayne Management Limited, the group ’s former major shareholder became interest free.
(2011: £0.58m). Mayne has agreed to waive the requirement for the Group to repay the accrued interest and
US$1 million of the outstanding principal (which represents interest which had been previously capitalised).
The outstanding principal of loan remained US$3.97m and to be repayable in 31 March, 2013. The major
component of the finance costs was the non-cash provision of financial guarantee liability in respect of a
secured financing arrangement £ 304,831. The said provision of finance costs did not cause adverse impact
on our Company’s cash flow.
No significant capital investment occurred in the current year.
Profit before Interest and Tax (PBIT) was £2.1m (2011: £8.8m). Net profit before income tax was £1.8m
(2011: £8.3m). Basic earning per share for this year was 0.47p (2011: 2.14p).
UNIVISION ENGINEERING LIMITED - 4 - ANNUAL REPORT 2012
CHAIRMAN’S STATEMENT
( Continued)
BUSINESS REVIEW
Markets
IMS Research has just published the 2012 edition of its World Market for CCTV and Video Surve illance
Equipment report. The report forecasts that despite the weak and uncertain economic climate, the world
market for video surveillance equipment will grow in excess of 12% in 2012.
It projects that Western Europe is to be the largest drag factor impacting global market growth in 2012. The
Eurozone debt crisis is expected to depress growth in Western Europe as austerity measures continue to be
implemented and a lack of end -user confidence limits video surveillance equipment spend. However, the
global market will be driven by strong demand for video surveillance equipment in the BRIC (Brazil, Russia,
India and China) countries.
IMS Research also forecasts that the world market for video surveillance equipment will tip in favour of
network video in 2013. It is also observed that high definition CCTV products have continued to gain
presence. We have identified a number of good suppliers, manufacturers as well as technology partners , to
provide complete solutions to our customers using the latest available technology. The Board is confident
that we can exploit these opportunities in the coming years due to the expected growth of demand.
Following the sale of the Group’s interest in its shopping mall project in Zhongshan , we will continue to
explore our growth target of the E&M business in PRC. We are looking at various strategic options to access
capital in order to be in a position to begin new projects.
Acquisitions and Investments
The Group continues to assess possible opportunities of new investments with a view to making a further
strategic move.
PROSPECTS
Our Security and Surveillance business remains stable. We expect that some of the infrastructure projects in
Hong Kong will become fruitful in the coming years. With the expected growing demand o n Network
Security and Surveillance market, we anticipate a good business in this area in the coming years.
The recent progress in the sale of the Group’s interest in its shopping mall project in Zhongshan provides the
right track on our growth target in the E&M business in the PRC. We are seeking ways to get additional
funds, such as in the listing platform of OTCBB, to undertake these capital intensive projects and seek
potential opportunities to work with other strategic partners for our growth goal.
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 dedicati on to the Group.
MR. STEPHEN SIN MO KOO
EXECUTIVE CHAIRMAN
15 August 2012
UNIVISION ENGINEERING LIMITED - 5 - ANNUAL REPORT 2012
DIRECTORS AND SENIOR
MANAGEMENT’S BIOGRAPHIES
DIRECTORS’ BIOGRAPHIES
Nicholas James LYTH – Non-executive Director (aged 46)
Mr. Lyth is a qualified chartered management acc ountant and has over 12 years experience as a finance
professional, having spent a number of years as director of UK companies. He has lived and worked in
China and can speak and write Mandarin. Nicholas is currently Non Executive Chairman of Taihua plc, an
AIM quoted manufacturer of pharmaceuticals, based in China. He is responsible for day to day liaison with
UK investors.
Stephen Sin Mo KOO – Executive Chairman (aged 54)
Mr. Koo joined UniVision in 1998 and was appointed as a Director on 3 March 2003. He is responsible for
overall strategic planning of our Group. He holds both a Bachelor Degree from the University of
Technology, Sydney, and a Masters Degree in Business from the Royal Melbourne Institute of Technology
in Australia. He is the Director of Up Sky Investments Limited, the Group ’s ultimate parent company. He is
a Fellow of the Institute of Certified Public Accountants of Australia.
Chun Hung WONG – Chief Executive Officer (aged 53)
Mr. Wong joined UniVision in 1998 and was appointed as CEO on 1 January 2008. Before the appointment,
he was the Director of Operations who was responsible for the management of the Project and Maintenance
Divisions. Mr. Wong holds a Master of Business Administration degree from The Open University of Hong
Kong. He has over 20 years experience in project management. Mr. Wong is responsible for formulating
and overseeing the implementation of UniVision ’s business development strategies and for the management
of the Company’s operations.
Chun Pan WONG – Technical Director (aged 52)
Mr. Wong joined UniVision in 1991 and was appointed as a Director on 25 March 1992. He holds a Master
Degree in Religious Studies in Chinese University of Hong Kong and a Bachelor Degree in Computer
Science from the University of E dinburgh, Scotland, and over 17 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.
Danny Kwok Fai YIP –Finance Director (aged 48)
Mr. Yip was appointed as Finance Director on 18 September 2007. He was the Financial Controller for the
Group before the appointment. Mr. Yip obtained a Master of Corporate Finance degree from The Hong
Kong Polytechnic University and a Bachelor of Commerce (Accounting) degree from The Curtin University
of Technology, Australia. Before joining the Group, Mr. Yip was the Accounting Manager of Nissin Food
Group, the leading instant noodle manufacturing MNC. Mr. Yip has over 20 years experience in fin ance 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. He also acts as
Company Secretary for the Corporation.
UNIVISION ENGINEERING LIMITED - 6 - ANNUAL REPORT 2012
DIRECTORS’ AND SENIOR
MANAGEMENT’S BIOGRAPHIES
(Continued)
SENIOR MANAGEMENT’S BRIEF BIOGRAPHIES
Mike Chiu Wah CHAN – Director of Operations (aged 37)
Mr. Chan joined UniVision as Assistant Engineer in December 1996, and was promoted to a number of
increasingly senior positions in maintenance and project department, prior to being appointed to his present
position on 2 January 2008. He is now responsible for the management of UniVision ’s Project and
Maintenance Division. Mr. Chan holds a Bachelor of Engineering degree in Industrial and Manufacturing
System Engineering from The University of Hong Kong.
Peter Yip Tak CHAN – Director of Sales and Marketing (aged 48)
Mr. Chan joined UniVision in 1995. He holds a Degree in Computing from the University of Northwest
Missouri and has over 10 years experience in sales and project management. He is responsible for the
management of UniVision’s Sales and Marketing Division.
UNIVISION ENGINEERING LIMITED - 7 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMI TED
DIRECTORS’ REPORT
The Directors have pleasure in presenting thei r annual report together with the audited financial statements
of the Group and the Company for the year ended 31 March 20 12.
Principal Activities
The principal activities of the Company are the supply, design, consultation, installation and maintenance o f
closed circuit television and surveillance systems, and the 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 Group and its future develo pment is included in the Chairman’s Statement.
Financial Position
The Group’s profit for the year ended 31 March 20 12 and the state of affairs of the Group at that date are set
out in the consolidated statement of comprehensive income on page 18 and in the consolidated balance sheet
on page 19, respectively.
The Group’s and the Company’s changes in shareholders’ equity for the year ended 31 March 20 12 are set
out in the consolidated and the Company’s statement of changes in equity on page 21 and 22, respectively.
The Group’s and the Company’s cash flow for the year ended 31 March 20 12 is set out in the consolidated
and the Company’s statement of cash flows on pages 23 to 25.
Key Performance Indicators (KPI)
Current Ratio:
Current Assets / Current Liabilities
Average Collection Period :
Trade receivables (net of allowance
for doubtful debts) / Sales per day
Inventory Turnover :
Cost of sales / Inventories
Gross profit Margin :
Gross profit / Sales
Debt to Equity Ratio :
Debt / Equity
Profit/Equity :
Profit attributable to equity holders of
the Company / Equity
Share Capital and Reserves
Details of the movements in share capital are set out in note 2 7 on page 63.
2012
2011
1.8
1.5
32 days
37 days
5.0
29%
0.38
5.8
39%
0.7
21%
130%
:
:
:
:
:
:
The movements in reserves during the year are set out in the consolidated statement of changes in equity on
page 21.
UNIVISION ENGINEERING LIMITED - 8 - ANNUAL REPORT 2012
DIRECTORS’ REPORT
(Continued)
Dividends
The Directors do not propose the payment of a d ividend for the year ended 31 March 20 12.
Plant and Equipment
Details of the movements in plant and equipment are set out in n ote 16 on pages 54 to 55.
Directors
The directors who held office during the year and to the date of this report were as follows :
Stephen Sin Mo KOO
Chun Hung WONG
Andrew Ping Sum TANG – resigned on 30 November, 2011
Nicholas James LYTH – appointed on 17 October, 2011
Chun Pan WONG
Danny Kwok Fai YIP
Mr. Nicholas James LYTH and Mr. Chun Pan WONG retire by rotation at the forthcom ing annual general
meeting in accordance with the Company ’s Articles of Association and, being eligible, the current directors
offer themselves for re-election.
Directors’ Interests in Contracts
No director had a material interest in any contract of signi ficance to the business of the Company to which
the Company, its holding company, or its subsidiaries was a party at the end of the year or at any time during
the year.
Directors’ Interests in Shares
According to the register of Directors ’ Shareholdings kept by the Company, particulars of interests of the
Directors (or their immediate families) who held office at the end of the financial year in the ordinary shares
of the Company are as set out in the table below:
Ordinary Shares held as at 31 March 20 12
Stephen Sin Mo KOO
Chun Hung WONG
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
275,953,700*
-
-
-
-
* 78,744,000 ordinary shares are registered under the name of Up Sky Investments Lim ited which is an
investment holding company incorporated under the laws of the British Virgin Islands and is wholly -owned
by Mr. Stephen Sin Mo KOO. Mr. Stephen Sin Mo KOO, is deemed to be interested in all the ordinary
shares registered in the name of Up Sky Investments Limited.
Following the Share Transactio n on 8 July 2011, the entire stake of UniVision Holdings Limited (it holds
183,736,000 shares of the Company) was transferred to Up Sky Investments Limited, a company that is
wholly owned by Mr. Stephen Koo. He is also interested in 13,473,700 ordinary shares in the Company.
Therefore following the Share Transaction , he has a total direct and indirect interest in 27 5,953,700 ordinary
shares in the Company, equivalent to 7 1.9% of the Company’s total issued share capital.
Save as disclosed in this report, none of the Directors (or their immediate families) who held office at the end
of the financial year had interests in the share capital of the Company during the financial year.
UNIVISION ENGINEERING LIMITED - 9 - ANNUAL REPORT 2012
DIRECTORS’ REPORT
(Continued)
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 ch ildren, or were any
such rights exercised by them; or was the Company, its holding company, or its subsidiaries a party to any
arrangement to enable the directors of the Company to acquire by means of the acquisition of shares in, or
debentures of any other body corporate.
Substantial Shareholdings
As at 10 August 2012, the Directors had been informed of the following companies that held 3% or more of
the Company’s issued ordinary share capital:
Number of ordinary shares
% of total issued share capital
UniVision Holdings Limited (1)
Up Sky Investments Limited (2)
Barclayshare Nominees Limited
W B Nominees Limited
183,736,000
78,744,000
21,354,634
20,231,800
47.9
20.5
5.6
5.3
(1) UniVision Holdings Limited is an investment holding company incorporated under the laws of the British
Virgin Islands and was formerly owned by Mayne Management Limited. Up Sky Investments Limited
acquired the entire stake f rom Mayne Management Limited on 8 July 2011 and became the major
shareholder.
(2) Up Sky Investments Limited is an investment holding company incorporated under the laws of the British
Virgin Islands and is wholly-owned by Mr. Stephen Sin Mo KOO.
Payments to Creditors
The Group does not follow any code or standard on payment practice but instead the Group policy is to pay
all creditors in accordance with agreed terms of business.
Political and Charitable Donations
During the year the Company made no po litical or charitable contributions (2010: 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 th e 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 a ll vacancies towards people with
disability and to ensure that such persons are not discriminated against on the grounds of their disability. For
those employees who become disabled during their employment period, the Group will make every effort to
ensure that their employment will continue and that sufficient training is arranged.
Annual General Meeting
The Annual General Meeting of the Company will be held a t UniVision Engineering Limited, 8/F Lever
Tech Centre, 69-71 King Yip Street, Kwun Tong, Kowl oon, Hong Kong, on 21 September 2012 at 5:00 p.m.
The Notice of Meeting appears on page 70.
UNIVISION ENGINEERING LIMITED - 10 - ANNUAL REPORT 2012
DIRECTORS’ REPORT
(Continued)
Annual Report
The annual report for the year ended 31 March 20 12 will be uploaded on the Company’s website
www.uvel.com on 15 August, 2012 and the hard copy will be sent to shareholders by our Registrars,
Computershare Investor Services (Jersey) Limited.
Auditor
HKCMCPA Company Limited, Certified Public Accountants, remain as our auditor for the year. A
resolution to re-appoint HKCMCPA Company Limited, Certified Public Accountants as auditor of the
Company will be put to the forthcoming Annual General Meeting.
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
Hong Kong
15 August 2012
UNIVISION ENGINEERING LIMITED - 11 - ANNUAL REPORT 2012
REMUNERATION REPORT
The Remuneration Committee presents this report to shareholders on behalf of the Board.
Membership of Remuneration Committee
The Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and Mr.
Stephen Sin Mo KOO (our Exe cutive Chairman) and is chaired by Mr. Nicholas James LYTH.
Policy Statement
The Remuneration Committee sets the remuneration and all other terms of employment of the Executive
Directors with a vision to provide a package which is suitable for the respon sibilities involved. The
remuneration of the Executive Directors is determined by the Remuneration Committee having regard to the
performance and experience of individuals, the overall performance of the Group and market trends.
Directors’ Remuneration
Details of individual director’s remuneration for the year are set out in the table below:
Salary and
fees
£
Pension
scheme
contribution
£
Bonus
£
2011
Total
£
2010
Total
£
Executive Directors
Stephen Sin Mo KOO
Chun Pan WONG
Chun Hung WONG
Danny Kwok Fai YIP
Non-executive Director
Nicholas James LYTH
Andrew Ping Sum TANG
76,948
39,243
51,026
34,554
4,809
6,412
641
962
962
962
-
-
6,412
3,238
4,200
4,256
84,001
43,443
56,188
39,772
76,165
43,480
54,905
37,437
-
-
4,809
6,412
-
9,935
Directors’ Interests in Contracts and Interests in Shares
Details of Directors’ Interests in Contracts and Interests in Shares are given in the Directors ’ Report.
UNIVISION ENGINEERING LIMITED - 12 - ANNUAL REPORT 2012
REPORT ON CORPORATE GOVERNANCE
Introduction
The Directors believe that their foremost function is to generate continuous profits for the Company ’s
investors, and that this should be achieved by a policy of high standards of corporate governance, integrity
and ethics. As the Company is listed on AIM and not subject to the Listing Rules of the UK Listing
Authority, it is not officially required to comply with the provisions detailed in the Combined Code on
Corporate Governance. However, it is the intention of the Board to manage the Company’s and Group’s
affairs in accordance with this Code, in so far as is practical and appropriate for a public company of this size
and complexity. The following are a few examples on how the Directors have applied the principles of good
corporate governance to manage the Company throughout the year.
Board of Directors
The Board directs and controls the Company and is responsible for strategy and operating performance. It
meets regularly throughout the year and has adopted a schedule of matters specifically reserved for
its
decision.
All Directors are elected by shareholders at the first opportunity after their initial appointment to the Board
and to be re-elected thereafter at intervals of not more than three years. Biographical information on all the
Directors is listed in the Directors’ and Senior Management’s Biographies section to the annual report , which
may help the shareholders to make a decision a t the time of re-election.
Upon their appointments, the Directors are offered an opportunity to request information and training
relevant to their legal and other duties. They are also given written guidelines and rules defining their
responsibilities within an AIM listed company.
The Board considers that all Non-executive Directors are independent of management and d ay 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 es. The Chairman of the Audit and
Remuneration Committees is a Non-executive Director.
Nomination Committee
As the Board of Directors of the Company is relatively small, there is no separate Nomination Committee.
All nominations to the Board are considered by all of the Directors.
Audit Committee
Our Audit Committee comprises Mr . Nicholas James LYTH (our Non-executive Director) and Mr. Stephen
Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH. The Chairman of the
Audit Committee has full discretion to invite any Executive Directors to attend its meeti ngs. 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 complianc e 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 2012
REPORT ON CORPORATE GOVERNANCE
(Continued)
Remuneration Committee
Our Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and Mr.
Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH. The
Remuneration Committee meets as required.
The responsibilities of the Committee are to:
-
determine the specific remuneration package for each Director including Director ’s fees, salaries,
allowances, bonuses, options, benefits -in-kind; and
seek professional advice, including comparison with similar businesses, in order to correctly fulfil its
duties, as the Committee deems appropriate.
-
In discharging its functions, the Committee may obtain independent external legal and other professional
advices as it deems necessary. The expense of such advice shall be borne by the Company.
Internal Control
The Board of Directors is responsible for ensuring that the Company maintains an internal financial control
system with appropriate monitoring procedures for all Group companies. The purpose of this system is to
safeguard Company assets, maintain proper accounting records, and e nsure that reliable financial
information is used within the Group and for publication purposes. However, the system is designed to
manage rather than completely eliminate risk and can only provide reasonable but not absolute assurance
against material misstatement.
In order to achieve the above responsibilities, the Board meets regularly and monitors the Company ’s
internal financial control by reviewing the overall process and the performance of the systems, setting annual
budgets and periodic forecasts, and seeking any prior approval for all significant expenditure.
The Group currently does not have an internal audit department and after extensive review and consideration,
the Board has concluded that the existing control mechanisms are sufficient for the size of the Group. This
decision will be kept under review.
Going Concern
After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the
Group have adequate resources to continue in operational existence for the foreseeable future. For this
reason, they continue to adopt the going concern basis in preparing the Company ’s and Group’s financial
statements.
Investor Relations
The Company realises that effective communication can increase transparency and acc ountability to its
shareholders; as such, the Company discloses its information to its shareholders through RNS (i.e. the news
distribution service operated by the London Stock Exchange plc). The same information can also be found
on the Company’s website (www.uvel.com). The Company will make every effort to ensure that all price -
sensitive information is released publicly and immediately. If an immediate announcement is not possible,
the Company will try to publicize the information at the earliest time possible to ensure that the shareholders
and the public have fair access to it.
The Company will send the Annual Report and the notice of the Annual General Meeting (AGM) to all its
shareholders. This notice is also made available on RNS. The Company re cognises the importance of the
shareholders’ views and encourages them to attend the AGMs where they can share their opinions and raise
direct queries and concerns towards the Directors, including the chairperson of each of the Board
Committees. The shareholders are also welcomed to discuss any issues on an informal basis at the
conclusion of the AGMs.
UNIVISION ENGINEERING LIMITED - 14 - ANNUAL REPORT 2012
STATEMENT OF DIRECTORS ’ RESPONSIBILITIES
The Directors are responsible for preparing the Directors ’ Report and the financial statements in accordance
with applicable law and regulations.
The Directors are responsible for preparing financial statements for each financial year which give a true and
fair view of the state of affairs of the Group and the Company and of the profit or loss for that year.
In preparing those financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable accounting standards have b een followed, subject to any material
departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Group and the Company will continue in business .
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy
at any time the financial position of the Company. They have general responsibility for taking such steps as
are reasonably available to them to safeguard the assets of the Group and the Company to prevent and detect
fraud and other irregularities.
UNIVISION ENGINEERING LIMITED - 15 - ANNUAL REPORT 2012
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(incorporated in Hong Kong with limited liability)
We have audited the financial statements of UniVision Engineering Limited (the “Company”) and its
subsidiaries (collectively referred to as the “Group”) set out on pages 18 to 69, which comprise the
consolidated and the Company ’s balance sheet as at 31 March 2012, and the consolidated statement of
comprehensive income, the consolidated and the Company’s statements of changes in equity and the
consolidated and the Company’s statements of cash flows for the year then ended, and a summary of
significant accounting policies and other explanatory notes .
This report is made solely to the Company’s shareholders, as a body, in compliance with the Alternative
Investment Market Rules (“AIM Rules”) for companies as published by the London Stock Exchange plc.
Our work has been undertaken so that we might state to the Company’s shareholders those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other th an the Company and the Company’s
shareholders as a body for this report or for the opinions we have formed.
Directors’ responsibility for the financial statements
The directors are responsible for the preparation of financial statements that give a true and fair view in
accordance with International Financial Reporting Standards issued by the International Accounting
Standards Board and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error .
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted
our audit in accordance with International Standard s on Auditing. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the
financial statements are free from material misstatement.
An audit involves performing procedur es to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial
statements that give a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the director, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
UNIVISION ENGINEERING LIMITED - 16 - ANNUAL REPORT 2012
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS O F
UNIVISION ENGINEERING LIMITED
(incorporated in Hong Kong with limited liability)
Opinion
In our opinion, the financial statements give a true and fair view of the state of affairs of the Company and of
the Group as at 31 March 2012 and of the Group’s profit and cash flows for the year then ended in
accordance with International Financial Reporting Standards.
HKCMCPA Company Limited
Certified Public Accountants
Hong Kong, China
15 August 2012
UNIVISION ENGINEERING LIMITED - 17 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEME NT OF COMPREHENSIVE INCOME
For the year ended 31 March 2012
Revenue
Cost of sales
Gross profit
Other income
Selling and distribution expenses
Administrative expenses
Impairment loss recognised on trade and other receivables
Gain from forgiveness of interest and principal
Gain on reconsolidation of a subsidiary
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Note
2012
£
2011
£
7,780,444
8,576,363
(5,505,251)
(5,209,729)
2,275,193
3,366,634
24,629
(94,583)
(1,696,706)
(427,642)
2,031,901
-
(350,067)
53,757
(93,651)
(2,000,677)
(881,891)
-
8,426,380
(619,118)
1,762,725
8,251,434
(15,700)
(20,053)
1,747,025
8,231,381
8
10
25(b)
28
9
10
13
Other comprehensive income:
Exchange differences arising on translation of foreign operations
384,304
375,798
Total comprehensive income for the year
2,131,329
8,607,179
Profit/(loss) attributable to :
Equity holders of the Company
Non-controlling interests
Total comprehensive income /(loss) attributable to:
Equity holders of the Company
Non-controlling interests
Earnings per share
Basic
Diluted
All revenues are from continuing operations.
1,798,569
(51,544)
8,192,288
39,093
1,747,025
8,231,381
2,181,901
(50,572)
8,566,219
40,960
2,131,329
8,607,179
14
14
0.47p
0.47p
2.14p
2.14p
UNIVISION ENGINEERING LIMITED - 18 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
CONSOLIDATED BALANCE SHEET
As at 31 March 2012
Note
2012
£
2011
£
16
17
21
19
21
22
109,766
25,830
1,340,393
108,864
25,830
1,051,382
1,475,989
1,186,076
1,091,389
14,643,264
504,323
901,257
14,842,916
1,023,526
16,238,976
16,767,699
17,714,965
17,953,775
23
24(a)
25
31
26
4,221,000
1,233,412
3,235,052
310,438
8,062
5,536,162
1,174,806
4,684,320
-
3,786
9,007,964
11,399,074
26
27
21,918
947
9,029,882
11,400,021
1,697,617
6,773,268
1,697,617
4,591,367
ASSETS
Non-current assets
Plant and equipment
Goodwill
Trade and other receivables
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and bank balances
Total current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Current tax liability
Loan and borrowings
Financial guarantee liabilities
Obligation under finance lease
Total current liabilities
Non-current liability
Obligation under finance lease
Total liabilities
Equity
Share capital
Reserves
Equity attributable to equity holders of the Company
8,470,885
6,288,984
Non-controlling interests
Total equity
Total liabilities and equity
214,198
264,770
8,685,083
6,553,754
17,714,965
17,953,775
The financial statements on pages 18 to 69 were authorised for issue by the board of directors on 15
August 2012 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Hung WONG, Director
UNIVISION ENGINEERING LIMITED - 19 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
COMPANY BALANCE SHEET
As at 31 March 2012
Note
2012
£
2011
£
16
18
19
21
22
23
25
26
26
27
36,798
2,814,159
1,295
2,467,223
2,850,957
2,468,518
756,769
1,510,299
432,672
697,769
1,610,406
859,245
2,699,740
3,167,420
5,550,697
5,635,938
1,337,418
2,493,966
8,062
2,368,070
3,738,766
3,786
3,839,446
6,110,622
21,918
947
3,861,364
6,111,569
1,697,617
(8,284)
1,697,617
(2,173,248)
1,689,333
(475,631)
5,550,697
5,635,938
ASSETS
Non-current assets
Plant and equipment
Investment in subsidiary undertakings
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and bank balances
Total current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Loan and borrowings
Obligation under finance lease
Total current liabilities
Non-current liability
Obligation under finance lease
Total liabilities
Equity
Share capital
Reserves
Total equity / (capital deficiency)
Total liabilities and equity
The financial statements on pages 18 to 69 were authorised for issue by the board of directors on 15 August
2012 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Hung WONG, Director
UNIVISION ENGINEERING LIMITED - 20 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2012
At 1 April 2010
Profit for the year
Exchange difference arising on translation of
foreign operations
Total comprehensive income for the year
Share
capital
£
Share
premium
£
(Note 1)
Retained
earnings/
(accumulated
losses)
£
Special
capital
reserve “A”
£
(Note 2)
Special
capital
reserve “B”
£
(Note 3)
Translation
reserve
£
Sub-total
£
Non-
controlling
interest
£
Total
equity/
(capital
deficiency)
£
1,697,617
2,192,640
(7,725,129)
155,876
143,439
1,258,322
(2,277,235)
223,810
(2,053,425)
-
-
-
-
-
-
8,192,288
-
8,192,288
-
-
-
-
-
-
-
8,192,288
39,093
8,231,381
373,931
373,931
1,867
375,798
373,931
8,566,219
40,960
8,607,179
At 31 March 2011
1,697,617
2,192,640
467,159
155,876
143,439
1,632,253
6,288,984
264,770
6,553,754
Profit / (loss) for the year
Exchange difference arising on translation of
foreign operations
Total comprehensive income / (loss) for the
year
At 31 March 2012
-
-
-
-
-
-
1,798,569
-
1,798,569
-
-
-
-
-
-
-
1,798,569
(51,544)
1,747,025
383,332
383,332
972
384,304
383,332
2,181,901
(50,572)
2,131,329
1,697,617
2,192,640
2,265,728
155,876
143,439
2,015,585
8,470,885
214,198
8,685,083
The currency translation from Hong Kong Dollars (“HK$”) to the presentational currency of Sterling Pound
(“£”) used in the financial statements has no impact on the available distributable reserves of the Company at
31 March 2012.
Notes:
1.
Share premium
The Company may by resolution reduce the share premium account in any manner authorised and
subject to any conditions prescribed by law.
2.
Special capital reserve “A”
Pursuant to the Order of the High Court dated 20 November 2004, any future recoveries of the
Company’s accumulated provision for obsolete inventories and provision for bad debts amounting to
HK$1,935,002 and HK$3,592,540 respectively will be credited to non -distributable special capital
reserve “A” account.
3.
Special capital reserve “B”
By a special resolution passed on 30 July 2004 and Order of the High Court dated 20 November 2004,
the authorised and issued capital of the Company was reduced from HK$159,245,000 divided into
31,849 ordinary shares of HK$5,000 each to HK$16,405,000 divided into 3,281 ordinary shares of
HK$5,000 each. The reduction of capital was effected by cancellation of 28,568 ordinary shares of
HK$5,000 each in the issued and paid up share capital of the Company. The Company established a
non-distributable special capital res erve “B” account into which HK$2,071,307 was credited as a
result of the capital reduction.
UNIVISION ENGINEERING LIMITED - 21 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2012
Share
capital
£
Share
premium
£
Retained
earnings/
(accumulated
losses)
£
Special
capital
reserve “A”
£
Special
capital
reserve “B”
£
Translation
reserve
£
Total
equity/
(capital
deficiency)
£
1,697,617
2,192,640
(7,156,141)
155,876
143,439
398,465
(2,568,104)
-
-
-
-
-
-
1,996,360
-
1,996,360
-
-
-
-
-
-
-
1,996,360
96,113
96,113
96,113
2,092,473
1,697,617
2,192,640
(5,159,781)
155,876
143,439
494,578
(475,631)
-
-
-
-
-
-
2,160,317
-
2,160,317
-
-
-
-
-
-
-
2,160,317
4,647
4,647
4,647
2,164,964
At 1 April 2010
Profit for the year
Exchange difference arising on translation of
foreign operations
Total comprehensive income for the year
At 31 March 2011
Profit for the year
Exchange difference arising on translation of
foreign operations
Total comprehensive income for the year
At 31 March 2012
1,697,617
2,192,640
(2,999,464)
155,876
143,439
499,225
1,689,333
UNIVISION ENGINEERING LIMITED - 22 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2012
Cash flows from operating activities
Profit before income tax
Adjustments for:
Non-cash finance costs
Finance costs paid
Interest income recognised in profit or loss
Depreciation of plant and equipment
Allowance for / (recovery from) obsolete inventories
Write-back on trade and other payables
Impairment loss recognised on trade and other receivables
(Gain) / loss on disposal of plant and equipment
Gain from forgiveness of interest and principal
Gain on reconsolidation of a subsidiary
Changes in operating assets and liabilities:
(Increase) / decrease in inventories
Increase in trade and other receivables
Increase / (decrease) in trade and other payables
Cash generated from operations
Income tax paid
Note
2012
£
2011
£
1,762,725
8,251,434
304,831
45,236
(805)
78,402
31,061
-
427,642
(281)
(2,031,901)
-
8
16
10
8
10
10
25(b)
28
581,184
37,934
(846)
85,498
(15,136)
(7,489)
881,891
18,906
-
(8,426,380)
616,910
1,406,996
(214,364)
(37,430)
65,578
35,080
(937,711)
(32,609)
430,694
471,756
(9,024)
(1,733)
Net cash generated from operating activities
421,670
470,023
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Proceeds from disposal of plant and equipment
Net cash inflow from reconsolidation of a subsidiary
Net cash used in investing activities
8
28
805
(43,409)
281
-
(42,323)
846
(17,813)
1,945
4,461
(10,561)
UNIVISION ENGINEERING LIMITED - 23 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CASH FLOW S (Continued)
For the year ended 31 March 2012
Note
2012
£
2011
£
Cash flows from financing activities
Interest paid
Repayment of obligation under finance lease
Repayment of loan and borrowings
Net cash used in financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of changes in exchange rates
(45,236)
(10,291)
(849,081)
(37,934)
(3,924)
(228,557)
(904,608)
(270,415)
(525,261)
1,023,526
189,047
884,174
6,058
(49,695)
Cash and cash equivalents at end of yea r
22
504,323
1,023,526
UNIVISION ENGINEERING LIMITED - 24 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CASH FLOW S
For the year ended 31 March 2012
Note
2012
£
2011
£
Cash flows from operating activities
Profit before income tax
Adjustments for:
Non-cash finance costs
Finance costs paid
Interest income recognised in profit or loss
Depreciation of plant and equipment
Impairment loss / (reversal of) recognised on investment in
subsidiary undertakings
Impairment loss recognised on trade and other receivables
Gain from forgiveness of interest and principal
Loss on disposal of plant and equipment
16
18
Changes in operating assets and liabilities:
(Increase) / decrease in inventories
Decrease in trade and other receivables
Increase in amounts due from subsidiaries
Increase / (decrease) in trade and other payables
2,160,317
1,996,360
-
1,800
(572)
6,760
154,648
40,387
(2,031,901)
-
581,184
2,044
(562)
7,810
(2,152,039)
204,995
-
2,350
331,439
642,142
(53,889)
70,646
(483,001)
363,241
18,362
228,157
(168,182)
(513,258)
Net cash generated from operating activities
228,436
207,221
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Proceeds from disposal of plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Repayment of obligation under finance lease
Repayment of loan and borrowings
Net cash used in financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
572
(6,711)
-
(6,139)
(1,800)
(10,291)
(641,231)
(653,322)
(431,025)
859,245
562
(4,576)
1,775
(2,239)
(2,044)
(3,924)
-
(5,968)
199,014
713,066
Effect of changes in exchange rates
4,452
(52,835)
Cash and cash equivalents at end of year
22
432,672
859,245
UNIVISION ENGINEERING LIMITED - 25 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
1.
GENERAL
UniVision Engineering Limited ( “the Company”) is incorporated in Hong Kong with limited liability
and its shares are listed on the Alternative Investment Market of the London Stock Exchange
(“AIM”). The address of the registered office is 8/F Lever Tech Centre, 69 -71 King Yip Street,
Kwun Tong, Kowloon, Hong Kong .
The Company and its subsidiaries (hereinafter collectively referred to as the “Group”) are engaged in
the supply, design, installation and maintenance of closed circuit television and surveillance systems,
the sale of security system related products and provision for elec tronic and mechanical services.
The principal activities of its subsidiaries are set out in note 1 8 to the financial statements.
2.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board ( “IASB”).
The financial statements have been prepared under the historical cost convention basis, except as
disclosed in the accounting policies below.
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 and assumptions in the
process of applying its accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements are
disclosed in note 4.
3.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANC IAL REPORTINGS
STANDARDS (“IFRS”)
In the current financial year, the Group has adopted all the new and revised IFRS and IFRIC
Interpretations that are relevant to its operations and effective for the current financial year. The
adoption of these new/revised IFRSs and IFRIC Interpretations has no material effect on t he financial
statements.
UNIVISION ENGINEERING LIMITED - 26 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
3.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANC IAL REPORTINGS
STANDARDS (“IFRS”) (CONTINUED)
New and Revised IFRSs and IFRIC Interpretations
The Group has not applied the following new and revised IFRSs that have been is sued but are not yet
effective.
Amendments to IFRS 7 Disclosure –
Effective for annual periods beginning on or after 1
Transfers of Financial Assets
IFRS 9 Financial Instruments
July 2011
Effective for annual periods beginning on or after 1
January 2013
IFRS 10 Consolidated Financial Statements Effective for annual periods beginning on or after 1
January 2013
IFRS 11 Joint Arrangements
Effective for annual periods beginning on or after 1
January 2013
IFRS 12 Disclosure of Interests in Other
Effective for annual periods beginning on or after 1
Entities
January 2013
IFRS 13 Fair Value Measurement
Effective for annual periods beginning on or after 1
January 2013
Amendments to IAS 1 Presentation of Items
Effective for annual periods beginning on or after 1
of Other Comprehensive Income
July 2012
Amendments to IAS 12 Deferred Tax –
Effective for annual periods beginning on or after 1
Recovery of Underlying Assets
January 2012
IAS 19 Employee Benefits (as revised in
Effective for annual periods beginning on or after 1
2011)
January 2013
IAS 27 Separate Financial Statements (as
Effective for annual periods beginning on or after 1
revised in 2011)
January 2013
IAS 28 Investments in Associates and Joint
Effective for annual periods beginning on or after 1
Ventures (as revised in 2011)
January 2013
The directors of the Company anticipate that the application of the other new and revised standards,
amendments or interpretations will have no material impact on the financial statements.
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of consolidation
(a)
Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the Group has the power
to govern the financial and operating policies generally accompanying a shareholding of more than
one half of the voting rights. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
UNIVISION ENGINEERING LIMITED - 27 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.1 Basis of consolidation (continued)
(a)
Subsidiaries (continued)
The Group uses the acquisition method of accounting to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred,
the liabilities incurred and the equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisitions related costs are expensed as incurred. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at
the acquisition date. On an acquisition -by-acquisition basis, the Group recognises any non-
controlling interest in the acquiree either at fair value or at the non-controlling interest’s
proportionate share of the acquiree ’s net assets.
Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect
changes in consideration arising from contingent consideration amendments.
Cost also includes direct attributable costs of investment. The excess of the consideration transferred,
the amount of any non-controlling interest in the acquiree and the acquisition -date fair value of any
previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net
assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the
subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the
statement of comprehensive income.
Inter-company transactions, balances and unrealised gains on transactions between group companies
are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
(b)
Transactions with non-controlling interests
The Group treats transactions with non -controlling interests as transactions with equity owners of the
Group. For purchases from non -controlling interests, the difference between any consideration paid
and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in
equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
When the Group ceases to have control or significant influence, any retained interest in the entity is
remeasured to its fair value, with the change in carrying amount recognised in profit or loss. The fair
value is the initial carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, joint venture or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group
had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
If the ownership interest in an associate is reduced but significant influence is retained, only a
proportionate share of the amounts previously recognised in other comprehensive income are
reclassified to profit or loss where appropriate.
UNIVISION ENGINEERING LIMITED - 28 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.2
Segment reporting
An operating segment is a comp onent of the Group that engages in business activities from which it
may earn revenues and incurs expenses, including revenues and expenses that relate to transactions
with other components of the Grou p. Operating segments are reported in a manner consiste nt with the
internal reporting provided to the chief operating decision -maker. The chief operating decision -maker
is responsible for allocating resources and assessing performance of the operating segments.
4.3
Foreign currency
(a)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (“the
functional
currency”). The consolidated and company financial statements are presented in Sterling Pound
(“£”), which is the Group’s presentation currency. As the Company is listed on AIM, t he directors
consider that this presentation is more useful for its current and potential investors.
The functional currency of the Group’s entity is summarised as follows:
1.
2.
3.
4.
UniVision Engineering Limited
T-Com Technology Co. Limited
Leader Smart Engineering Limited
Leader Smart Engineering (Shanghai) Limited (“LSSH”)
Hong Kong Dollars (“HK$”)
New Taiwan Dollars (“NTD”)
Hong Kong Dollars (“HK$”)
(“RMB”)
Renminbi Yuan
(b)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at year -
end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement, except when deferred in other comprehensive income as
qualifying cash flow hedges and qualifying net investment hedges.
Foreign exchange gains and losses that relate to borrowings and cash and bank balances are presented
in the income statement within “finance income or cost”. All other foreign exchange gains and losses
are presented in the statement of comprehensive income within “administrative expense” or “other
income”.
Changes in the fair value of monetary securities denominated in fore ign currency classified as
available for sale are analysed between translation differences resulting from changes in the
amortised cost of the security and other changes in the carrying amount of the security. Translation
differences in respect of changes in amortised cost are recognised in profit or loss, and other changes
in carrying amount are recognised in other comprehensive income.
Translation differences on non -monetary financial assets and liabilities such as equities held at fair
value through profit or loss are recognised in profit or loss as part of the fair value gain or loss.
Translation differences on non -monetary financial assets, such as equities classified as available for
sale, are included in other comprehensive income.
UNIVISION ENGINEERING LIMITED - 29 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.3
Foreign currency (continued)
(c)
Group companies
The results and financial position of all the group entities (none of which has the currency of a hyper-
inflationary economy) that have a functional currency d ifferent from the presentation currency are
translated into the presentation currency as follows:
(i)
(ii)
assets and liabilities for each balance sheet presented are translated at the closing rate at the
date of that balance sheet;
income and expenses for each income statement are translated at average exchange rates
(unless this average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the rate
on the dates of the transactions); and
(iii)
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment
in foreign
operations, and of borrow ings and other currency instruments designated as hedges of such
investments, are taken to other comprehensive income . When a foreign operation is partially disposed
of or sold, exchange differences that were recorded in equity are recognised in the income statement
as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets
and liabilities of the foreign entity and translated at the closing rate.
4.4
Plant and equipment
Plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated
depreciation and accumulated impairment loss. The cost of an asset comprises its purchase price and
any directly attributable costs of bringing the asset to working condition for its intended use.
On disposal of an item of plant and equipment, the difference between the net disposal proceeds and
its carrying amount is taken to profit or loss.
Depreciation is calculated using the straight -line method to allocate their depreciable amounts over
the estimated useful lives as follows:
Furniture and fixtures
Computer equipment
Motor vehicles
Research assets
5 years
3 years
3 years
5 years
Fully depreciated plant and equipment are retained in the financial statements until they are no longer
in use and no further charge for depreciation is made in respect of these assets.
UNIVISION ENGINEERING LIMITED - 30 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.4
Plant and equipment (continued)
The residual values, useful life and d epreciation method are reviewed at the end of each reporting
period to ensure that the amount, method and period of depreciation are consistent with previous
estimates and the expected pattern of consumption of the future economic benefits embodied in the
items of plant and equipment. The effects of any revision are recognised in profit or loss when the
changes arise.
Subsequent expenditure relating to plant and equipment that has already been recognised is added to
carrying amount of the asset only when i t is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. All other repair and
maintenance expenses are recognised in profit or loss when incurred.
4.5 Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share
of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is tested
annually for impairment and carried at cost less accumula ted impairment losses. Impairment losses
on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Goodwill is allocated to cash -generating units for the purpose of imp airment testing. The allocation is
made to those cash-generating units or groups of cash -generating units that are expected to benefit
from the business combination in which the goodwill arose, identified according to operating
segment.
4.6 Research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of
an internal project) is recognised if, and only if, all of the following have been demonstrated:
the technical feasibility of completing the intangible asset so that it will be available for use or
sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its
development.
The amount initially recognised for internally -generated intangible asset is the sum of the expenditure
incurred from the date when the intangible as set first meets the recognition criteria.
Where no
internally-generated intangible asset can be recognised, development expenditure is charged to profit
or loss in the period in which it is incurred.
Subsequent to initial recognition, internally -generated intangible asset is reported at cost less
accumulated amortisation and accumulated impairment losses .
UNIVISION ENGINEERING LIMITED - 31 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.7
Impairment of non-financial assets
Assets that have an indefinite useful life , for example, goodwill or intangible assets not ready to use
are not subject to amortisation and are tested annually for impairment. Other assets that are subject to
amortisation or depreciation are reviewed for impairment whenever events or
changes in
circumstances indicate that the carrying amount may not be recoverable. The difference between the
carrying amount and the recoverable amount is recognised as an impairment loss in profit or loss.
The recoverable amount is the higher of an asset ’s fair value less costs to sell and value in use. For
the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill
that have suffered an impairment are reviewed for possible reversal of the impairment at each
reporting date.
4.8
Financial assets
Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party
to the contractual provisions of the financial i nstruments.
(i)
Classification
The Group classifies its financial assets as loans and receivables. The classification depends on the
purpose for which the assets were acquired. Management determines the classification of its financial
assets at initial recognition.
Loans and receivables are non -derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They are presented as current assets, except for those maturing
later than twelve months after the end of the reporting period which are presented as non -current
assets. Loans and receivables are presented as “trade and other receivables” and “cash and bank
balances” on the balance sheet.
Type of item
1. Bills receivable
Nature and terms of item
Certain customers pay accounts receivable with bills
receivable from Taiwan banks with maturities less than twelve
months. These are also referred to as “bankers” acceptances,
which are unsecured, interest-free and to be matured in twelve
months.
2. Loans
Unsecured temporary advances to the subsidiaries, which are
interest-free and eliminated upon consolidation.
3. Other receivables
They include:
a. Retention receivable under warranty provision among
certain construction contracts for a period of twelve months
b. Accrued income from maintenance contracts, which are
billed or collected within twelve months.
UNIVISION ENGINEERING LIMITED - 32 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8
Financial assets (continued)
(ii)
Recognition and derecognition
Purchases and sales of financial assets are recogni sed and derecognised on trade dates – the dates on
which the Group commits to purchase or sell the assets.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all risks and rewards of
ownership. On disposal of a financial asset, the difference between the carrying amount and the sale
proceeds is recognised in profit or loss.
(iii)
Initial measurement
Loans and receivables are initially recognised at fair value plus transaction costs.
(iv)
Subsequent measurement
Loans and receivables are subsequently carried at amortised cost using the e ffective interest method,
less any impairment.
(v)
Impairment of financial assets
The Group assesses at the end of each reporting period whether there is objective evidence that a
financial asset or a group of financial assets is impaired and recognises an allowance for impairment
when such evidence exists.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and
default or significant delay in payments are objective evidence that these financial assets are
impaired.
The carrying amount of these assets is reduced through the use of an impairment allowance account
which is calculated as the difference between the carrying amount and the present value of estimated
future cash flows, discounted at the original effective interest rate. When the asset becomes
uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are recognised against the same line item in profit or loss.
The allowance for impairment loss account is reduced through profit or loss in a subsequent period
when the amount of impairment loss decreases and the related decrease can be objectively measured.
The carrying amount of the asset previously impaired is increased to the extent that the new carrying
amount does not exceed the amortised cost, had no impairment been recognised in prior periods.
UNIVISION ENGINEERING LIMITED - 33 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.9
Financial liabilities
Financial liabilities are recognised on the balance sheet when, and only when, the Group and
Company becomes a party to the contractual provisions of the financial instrument.
Financial liabilities are recognised initially at fair value, plus, in the case of financial liabilities other
than derivatives, directly attributable transaction costs.
Subsequent to initial recognition, financial liabilities are measured at amortised cost using the
effective interest method.
For financial liabilities, gains and losses are recognised in profit or loss when the liabil ities are
derecognised, and through the amortisation process. A financial liability is derecognised when the
obligation under the liability is extinguished.
4.10 Construction contracts
When the outcome of a construction contract can be estimated reliably , contract costs are recognised
as an expense by reference to the stage of completion of the contract at the balance sheet date. When
it is probable that total contract costs will exceed total contract revenue, the expected loss is
recognised as an expense immediately. When the outcome of a construction contract cannot be
estimated reliably, contract costs are recogni sed as an expense in the period in which they are
incurred.
Contracts in progress at the balance sheet date are recorded in the balance sheet at the net amount of
costs incurred plus recognised profit less recognised losses and progress billings, and are presented
under the caption of “Trade and other receivables” or “Trade and other payables” in the balance sheet
as the “Amounts due from customers for contracts-in-progress” (as an asset) or the “Amounts due to
customers for contracts-in-progress” (as a liability), as applicable . Progress billings not yet paid by
the customer are included in the balance sheet. Amounts received before the related work is
performed are included in the balance sheet, as a liability, as “Advances received”.
4.11 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the
weighted average method and comprises design costs, raw materials, direct labour, other direct costs
and other costs incurred in bringing the inventories to their present location and condition. Net
realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
UNIVISION ENGINEERING LIMITED - 34 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.12 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale are added to the cost of those assets until such time as the assets are substantially
ready for their intended use or sale. Investment i ncome earned on the temporary investment of
specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in wh ich they are incurred.
4.13 Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in
accordance with the original or modified terms of debt instrument. A financial guarantee contract
issued by the Group is initially measured at its fair value, less transaction costs that are directly
attributable to the issue of the financial guaran tee contract. Subsequently, the Group measures the
financial guarantee contract at the higher of: (i) the amount of the present legal or constructive
obligation under the contract at the reporting date, as determined in accordance with IAS 37
Provisions, Contingent Liabilities and Contingent Assets ; and (ii) the amount initially recogni sed
less, where appropriate, cumulative amorti sation.
UNIVISION ENGINEERING LIMITED - 35 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.14 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and
rendering of services in the ordinary course of the Group’s activities. Revenue is shown net of
business tax, value-added tax, rebates and discounts, and after eliminating sales within t he Group.
The Group recognises revenue when the amount of revenue and related cost can be reliably
measured, it is probable that future economic will flow to the entity and when specific criteria have
been met for each of the Group’s activities as describ ed below. The amount of revenue is not
considered to be reliably measurable until all contingencies relating to the sale have been resolved.
The Group bases its estimates on historical results, taking into consideration the type of customer, the
type of transaction and the specifics of each arrangement.
(i)
Construction contracts
Revenue from construction contracts is recognised when the outcome of a construction
contract can be estimated reliably:
revenue from a fixed price contract is recognised using the percentage of completion
method, measured by reference to the percentage of contract costs incurred to date to
estimated total contract costs for the contract; and
revenue from a cost plus contract is recognised by reference to the recoverable costs
incurred during the period plus an appropriate proportion of the total fee, measured by
reference to the proportion that costs incurred to date bear to the estimated total costs of
the contract.
When the outcome of a construction contract cannot be estimat ed reliably, revenue is
recognised only to the extent of contract costs incurred that it is probable will be recoverable.
(ii) Maintenance contracts
Revenue from maintenance contracts is recognised on a straight line basis over the term of the
maintenance contract.
(iii) Product sales
Revenue from product sales is recognised on the transfer of risks and rewards of ownership,
which generally coincides with the delivery of goods to customers and the passing of title to
customers.
(iv)
Interest income
Interest income is recognised as it accrues using the effective interest method.
UNIVISION ENGINEERING LIMITED - 36 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.15 Income tax
Income tax expense for the period comprises current and deferred tax. Tax is recognised in the
income statement, except to the extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the company and its subsidiaries operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, us ing the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognised if
they arise from the initial
recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date
and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
Deferred income tax is provided on tempor ary differences arising on investments in subsidiaries and
associates, except for deferred income tax liability where the timing of the reversal of the temporary
difference is controlled by the group and it is probable that the temporary difference will no t reverse
in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income taxes assets and
liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities where there is an intention to settle the balances on a net basis.
UNIVISION ENGINEERING LIMITED - 37 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.16 Provisions
Provisions are recognised for liabilities of uncertain timing or amount when the Group or the
Company has a legal or constructive obligation arising as a result of a past event, it is probable that
an outflow of economic benefits will be required to settle the obligation and the amount can been
reliably estimated. 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. Possible obligations, whose existence will only be confirmed by the occurre nce or
non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the
probability of outflow of economic benefits is remote.
4.17 Employee benefit
These comprise short term employee benefits and contributions to defi ned contribution retirement
plan.
Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement plans
and the cost of non-monetary benefits are accrued in the year in which the associated services are
rendered by employees. Where payment or settlement is deferred and the effect would be material,
these amounts are stated at their present values.
4.18 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Company and the Group as lessee –
Assets held under finance leases are recognised as assets of the Company and the Group at their fair
value at the inception of the lease or, if lower, at the present value of the minimum lease payments.
The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of t he lease obligation so as
to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are
charged directly to profit or loss.
Operating lease payments are recognised as an expense on a straight line basis over the te rm of the
relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are
recognised as a reduction of rental expense over the lease term on a straight line basis.
UNIVISION ENGINEERING LIMITED - 38 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
5.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group’s accounting policies, which are described in note 4, the directors of
the Company are required to make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affe cts both current and
future periods.
(a) Critical judgements in applying the entity’s accounting policies
The following are the critical judgements, apart from those involving estimations (see below), that
the directors have made in the process of applyi ng the entity’s accounting policies and that have the
most significant effect on the amounts recognised in financial statements.
(i)
Estimation of contract costs
Estimated costs to complete contracts are judged by the directors through the application of
their experience and knowledge of the industry in which the Group operates. However,
contract performance can be difficult to predict accurately. The directors believe that contract
budgets do not deviate materially from actual costs incurred due to a s trong cost control system
with regular review of budgets which highlight any incidences that could affect estimated costs
to completion.
The key assumptions concerning the future and other key sources of estimation uncertainty at
the end of the reporting periods, that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year, are :
(b) Key sources of estimation uncertainty
The key assumptions concerning the future and other ke y sources of estimation uncertainty at
the end of the reporting periods, that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year, are.
(i)
Impairment of trade and other receivables
The estimation of impairment of trade and other receivables includes an assessment of
recoverability of individual account balances and a review of ageing analysis of trade and other
receivables by the directors. The directors will also revi ew the credit history of customers in
assessing the recoverability of trade and other receivables. When any indication comes to their
attention that a trade and other receivable might not be recovered in full, impairment will be
made and recognised as an expense in the consolidated statement of comprehensive income.
As at 31 March 2012, the total carrying amount of trade and other receivables are £14,643,264
(2011: £14,842,916).
UNIVISION ENGINEERING LIMITED - 39 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
5.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY (CONTINUED)
(b) Key sources of estimation uncertainty ( continued)
(ii) Deferred income tax
As at 31 March 2012, the Group has unused tax losses of £4,950,190 (2011: £4,411,038)
available for offset against future profits. A deferred tax asset of £870,494 (2011: £727,821)
has not been recognised in respect of the unused tax losses. In cases where there are future
profits generated to utilise the tax losses, a material deferred tax asset may arise, which would
be recognised in the consolidated statement of comprehensive income for the period in which
such future profits are recorded.
6.
FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
Financial assets:
Loans and receivables (including cash and bank balances)
- Trade and other receivables
- Cash and bank balances
Financial liabilities:
- Trade and other payables
- Loan and borrowings
- Financial guarantee liabilities
- Obligation under finance lease
2012
£
2011
£
14,643,264
504,323
14,842,916
1,023,526
4,221,000
3,235,052
310,438
29,980
5,536,162
4,684,320
-
4,733
(b)
Financial risk management objectives and policies
The Group’s major financial instruments include borrowings, trade and other receivables and trade
and other payables. Details of these financial instruments are disclosed in the respective notes. The
risks associated with these financial instruments include currency risk , interest rate risk, credit risk
and liquidity risk. The policies on how these risks are mitigated are set out below. The management
manages and monitors these exposures to ensure appropriate measures are implemented in a timely
and effective manner.
UNIVISION ENGINEERING LIMITED - 40 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
6.
FINANCIAL INSTRUMENTS ( CONTINUED)
(b)
Financial risk management objectives and policies (continued)
(i) Market risk
(1)
Currency risk
Certain entities in the Group have foreign curren cy transactions and have foreign curren cy
denominated monetary assets and liabilities , which expose the Group to foreign currency risk.
The Company has foreign currency tran sactions, which expose the Company to foreign
currency risk.
The carrying amounts of the Group’s and the C ompany’s foreign currency denominated
monetary assets and monetary liabilities, mainly represented by trade and other receivables,
cash and bank balances, trade and other payables and borrowings, at the end of the reporting
period are as follows:
The Group
The Company
Assets
Liabilities
Assets
Liabilities
2012
2011
2012
2011
2012
2011
2012
2011
NTD
RMB
USD
HK$
72,480,103
128,211,210
150,604
26,225,513
110,429,36
125,592,045
459,128
29,255,983
66,761,917
37,841,095,
3,974,359
16,996,772
94,792,795
34,640,001
8,280,118
9,793,489
-
23,850
142,250
22,897,287
-
-
455,983
-
-
3,974,359
26,676,932 ` 16,996,772
-
955
8,280,118
9,740,316
The Group currently does not have any policy on hedges of foreign currency risk. However,
management monitors the foreign currency risk exposure and will consider hedging significant
foreign currency risk should the need arise.
UNIVISION ENGINEERING LIMITED - 41 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
6.
FINANCIAL INSTRUMENTS ( CONTINUED)
(i) Market risk (continued)
(1)
Currency risk (continued)
Sensitivity analysis
The following table details the Group’s sensitivity to a 5% increase and decrease in £ against
the relevant foreign currencies and all other variables were held constant . 5% (2011: 5%) is
the sensitivity rate used when reporting foreign currency risk internally to key management
personnel and represents management’s assessment of the reasonably possible change i n
foreign exchange rates. The sensitivity analysis includes only outstanding foreign currenc ies
denominated monetary items and adjusts their tra nslation at the year end for a 5% (2011: 5%)
change in foreign currency rates. A positive /(negative) number indicates a decrease/(increase)
in post-tax profit/(loss) for the year when £ strengthens 5% (2011: 5%) against the relevant
foreign currencies. For a 5% (2011: 5%) weakening of £ against the relevant currency, there
would be an equal but opposite impact on t he post-tax profit/(loss) for the year.
NTD
Post-tax profit for the year
RMB
Post-tax profit for the year
USD
Post-tax loss for the year
HK$
Post-tax profit for the year
(2)
Interest rate risk
2012
£
2011
£
6,372
17,347
471,997
454,106
(126,287)
(256,488)
39,077
81,830
The Group and the Company is exposed to fair value interest rate risk in relation to fixed rate
bank deposits and borrowings at fixed rates. The Group and the Company is exposed to cash
flow interest rate risk due to fluctuation of the prevailing market interest rate on certain bank
borrowings which carry at prevailing market interest rates as shown in notes 25 and 26. The
Group currently does not have an interest rate hedging polic y. However, management
monitors interest rate exposure and will consider hedging significant interest rate exposure
should the need arises.
The Group’s and the Company’s exposures to interest rates on financial liabilities are detailed
in the liquidity risk management section of this note.
UNIVISION ENGINEERING LIMITED - 42 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
6.
FINANCIAL INSTRUMENTS ( CONTINUED)
(i) Market risk (continued)
(2)
Interest rate risk (continued)
Sensitivity analysis
The sensitivity analysis below has been determined based on the change in interest rates and
the exposure to interest rates for the non-derivative financial liabilities at the balance sheet date
and on the assumption that the amount outstanding at the balance sheet date was outstanding
for the whole year and held constant throughout the financia l year. The 25 basis points
increase or decrease represents management’s assessment of a reasonably possible change in
interest rates over the period until the next annual balance sheet date. The analysis is
performed on the same basis for 20 11.
For the year ended 31 March 2012, if interest rates had been 25 basis points higher/lower, with
all other variables held constant, the Group’s post-tax profit
for the year would
increase/decrease by approximately £2,646 (2011: £2,302).
(ii) Credit risk
At 31 March 2012, the Group’s and the Company’s maximum exposure to credit risk in the
event of the counterparties’ failure to perform their obligations in relation to each class of
recognised financial assets is the carrying amount of those assets as stated in t he consolidated
balance sheet.
The Group’s credit risk is primarily attributable to its trade and other receivables. In order to
minimise the credit risk, the management of the Group has a credit policy in place and the
exposures to these credit risks are monitored on an ongoing basis. Credit evaluations of its
customers’ financial position and condition are performed on each and every major customer
periodically. These evaluations focus on the customer’s past history of making payments their
due and current ability to pay, and take into account information specific to the customer as
well as pertaining to the economic environment in which the customer operates. Debts are
usually due within 90 days from the date of billing.
The Group’s exposure to credi t risk is influenced mainly by the individual characteristics of
each customer. The default risk of the industry and country in which customers operate also
has an influence on credit risk. At the balance sheet date, the Group had no significant
concentrations of credit risk where individual trade and other receivables balance exceed 10%
of the total trade and other receivables at the balance sheet date.
The credit risk on liquid funds is limited because the counterparties are banks with high credit
ratings assigned by international credit rating agencies. Also, the Group has no significant
concentration of credit risk, with exposure spread over a number of counterparties and
customers.
Further quantitative disclosures in respect of the Group’s and the Co mpany’s exposure to
credit risk arising from trade and other receivables are set out in note 21.
UNIVISION ENGINEERING LIMITED - 43 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
6.
FINANCIAL INSTRUMENTS ( CONTINUED)
(iii) Liquidity risk
In managing the liquidity risk, the Group’s policy is to regularly monitor and maintain an
adequate level of cash and cash equivalents determined by management to finance the Group’s
operations. Management also needs to ensure the continuity of funding for both the short and
long terms, and to mitigate the effects of cash flow fluctuation. At 31 March 2012, the Group
had aggregate banking facilities of £2,355,824 (2011: £1,981,477), of which £1,614,739 were
unused (2011: £1,035,923).
The following table details the contractual maturities of the Group’s and the Company’s
financial liabilities at the balance sheet date, which is based on the undiscounted cash flows
and the earliest date on which the Group can be required to pay . The table includes both
interest and principal cash flows.
The Group
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Financial guarantee
liabilities
Obligation under
finance lease
Financial guarantee
Maximum amount
guaranteed (note
31)
Weighted
average
effective
interest rate
%
Within
1 year
or on
demand
£
2012
More than More than
2 years but
1 year but
less than
less than
5 years
2 years
£
£
Total
undiscounted
cash flow
£
Carrying
amount
at 31
March 2012
£
3.27%-5.75% 3,243,689
-
-
4,221,000
310,438
-
-
-
-
-
-
3,243,689
3,235,052
4,221,000
4,221,000
310,438
310,438
3.25%-3.95%
9,404
16,528
8,953
34,885
29,980
7,784,531
16,528
8,953
7,810,012
7,796,470
4,400,000
-
-
4,400,000
4,400,000
UNIVISION ENGINEERING LIMITED - 44 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
6.
FINANCIAL INSTRUMENTS ( CONTINUED)
(iii) Liquidity risk (continued)
The Group
Weighted
average
effective
interest rate
%
Within
1 year
or on
Demand
£
2011
More than More than
2 years but
1 year but
less than
less than
5 years
2 years
£
£
Total
undiscounted
cash flow
£
Carrying
amount
at 31
March 2011
£
3.2% - 15% 5,254,254
-
5,536,162
9.5%
4,529
10,794,945
-
-
1,133
1,133
4,400,000
-
-
-
-
-
-
5,254,254
4,684,320
5,536,162
5,536,162
5,662
4,733
10,796,078
10,225,215
4,400,000
4,400,000
Weighted
average
effective
interest rate
%
Within
1 year
or on
Demand
£
2012
More than More than
2 years but
1 year but
less than
less than
5 years
2 years
£
£
Total
undiscounted
cash flow
£
Carrying
amount
at 31
March 2012
£
-
2,493,966
1,337,418
-
3.25%-
3.95%
-
-
-
-
2,493,966
2,493,966
1,337,418
1,337,418
9,404
16,528
8,953
34,885
29,980
3,840,788
16,528
8,953
3,866,269
3,861,364
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligation under
finance lease
Financial guarantee
Maximum amount
guaranteed
(note 31)
The Company
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligation under
finance lease
UNIVISION ENGINEERING LIMITED - 45 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
6.
FINANCIAL INSTRUMENTS ( CONTINUED)
(iii) Liquidity risk (continued)
The Company
Weighted
average
effective
interest rate
%
Within
1 year
or on
demand
£
2011
More than More than
2 years but
1 year but
less than
less than
5 years
2 years
£
£
Total
undiscounted
cash flow
£
Carrying
Amount
at 31
March 2011
£
15% 4,299,581
-
2,368,070
9.5%
4,529
6,672,180
-
-
1,133
1,133
-
-
-
-
4,299,581
3,738,766
2,368,070
2,368,070
5,662
4,733
6,673,313
6,111,569
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligation under
finance lease
(c)
Fair value
The fair values of financial assets and financial liabilities are determined in accordance with
generally accepted pricing models based on discounted cash flow analysis.
The directors of the Company consider that the carrying amounts of financial assets and
financial liabilities recorded at amortised cost in the financial statements approximate to their
fair values.
(d) Capital risk management
The Group’s primary objectives when managing capital are to safeguard the Group’s ability to
continue as a going concern, so that it can continue to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital.
The Group actively and regularly reviews and manages its capital structure to maintain a
balance between the higher shareholder returns that might be possible with a higher level of
borrowings and the advantages and security afforded by a sound capital position, and makes
adjustments to the capital structure in light of changes i n economic conditions.
The Group monitors its capital structure on the basis of a net debt -to-adjusted capital ratio. For
this purpose the Group defines net debt as total debt (which includes bank borrowings and
other financial liabilities) less bank dep osits and cash. Adjusted capital comprises all
components of equity less unaccrued proposed dividends.
UNIVISION ENGINEERING LIMITED - 46 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
6.
FINANCIAL INSTRUMENTS ( CONTINUED)
(d) Capital risk management (continued)
During 2012, the Group’s strategy, which was unchanged from 20 11, was to maintain the net
debt-to-adjusted capital ratio as low as feasible. In order to maintain or adjust the ratio, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce de bt.
Neither the Company nor any of its subsidiary undertakings are subject to externally imposed
capital requirements.
The net debt-to-adjusted capital ratios of the Group and the Company at the end of the
reporting period were as follows:
Current liabilities
Trade and other payables
Loan and borrowings
Current tax liability
Financial guarantee liabilities
Obligation under finance lease
Non-current liabilities
Obligation under finance lease
The Group
The Company
2012
£
4,221,000
3,235,052
1,233,412
310,438
8,062
9,007,964
2011
£
5,536,162
4,684,320
1,174,806
-
3,786
11,399,074
2012
£
1,337,418
2,493,966
-
-
8,062
3,839,446
2011
£
2,368,070
3,738,766
-
-
3,786
6,110,622
21,918
947
21,918
947
Total debt
9,029,882
11,400,021
3,861,364
6,111,569
Less: cash and bank balances
504,323
1,023,526
432,672
859,245
Net debt
8,525,559
10,376,495
3,428,692
5,252,324
Total equity / (capital
deficiency)
Net debt-to-adjusted capital
ratio
8,685,083
6,553,754
1,689,333
(475,631)
98%
158%
203%
-1104%
UNIVISION ENGINEERING LIMITED - 47 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
7.
SEGMENT INFORMATION
Management has determined the operating segments based on the reports reviewed by the chief
operating decision maker, being the chief executive officer, that are used to make strategic decisions.
Information reported to the chief operating decision maker for the purpose of resource allocation and
assessment of segment performance focuses on types of goods or services delivered or provided. The
Group’s reportable operating segments are summarised as follows:
-
-
Security and surveillance
Electrical and mechanical
(a)
Segment revenues and results
The following is an analysis of the Group’s revenue and resul ts by operating segment:
Segment revenue by major products and services :
- Construction contracts
- Maintenance contracts
- Product sales
Revenue from external customers
Segment profit/(loss)
Gain from forgiveness of interest and principal
Finance costs
Profit/(loss) before income tax
Segment revenue by major products and services:
- Construction contracts
- Maintenance contracts
- Product sales
Revenue from external customers
Segment profit/(loss)
Gain on reconsolidation of a subsidiary
Finance costs
Profit before income tax
Security and
surveillance
£
Year ended 31 March 2012
Electrical and
mechanical
£
Total
£
4,155,995
2,451,304
754,114
7,361,413
236,406
2,031,901
(45,236)
2,223,071
419,031
-
-
419,031
(155,515)
-
(304,831)
(460,346)
4,575,026
2,451,304
754,114
7,780,444
80,891
2,031,901
(350,067)
1,762,725
Security and
surveillance
£
Year ended 31 March 2011
Electrical and
mechanical
£
Total
£
4,006,634
2,464,360
627,212
7,098,206
1,478,157
-
-
1,478,157
2,738,348
-
(37,934)
2,700,414
(2,294,176)
8,426,380
(581,184)
5,551,020
5,484,791
2,464,360
627,212
8,576,363
444,172
8,426,380
(619,118)
8,251,434
UNIVISION ENGINEERING LIMITED - 48 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
7.
SEGMENT INFORMATION (CONTINUED)
(b)
Segment assets and liabilities
The following is an analysis of the Group’s assets and liabilities by operating segment:
Segment assets
Unallocated assets
Consolidated total assets
Segment liabilities
Unallocated liabilities
Consolidated total liabilities
Segment assets
Unallocated assets
Consolidated total assets
Segment liabilities
Unallocated liabilities
Consolidated total liabilities
Security and
surveillance
£
At 31 March 2012
Electrical and
mechanical
£
Total
£
4,709,805
-
4,709,805
5,274,794
-
5,274,794
13,005,160
-
13,005,160
17,714,965
-
17,714,965
3,755,088
-
3,755,088
9,029,882
-
9,029,882
Security and
surveillance
£
At 31 March 2011
Electrical and
mechanical
£
5,833,306
-
5,833,306
2,968,860
-
2,968,860
12,120,469
-
12,120,469
8,431,161
-
8,431,161
Total
£
17,953,775
-
17,953,775
11,400,021
-
11,400,021
UNIVISION ENGINEERING LIMITED - 49 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
7.
SEGMENT INFORMATION (CONTINUED)
(c) Other segment information
Amounts regularly provided to the chief operating decision maker but not included in the measure of
segment profit or segment assets and not allocated to any operating segments:
Security and
surveillance
£
Year ended 31 March 2012
Electrical and
mechanical
£
Total
£
Capital expenditure
Depreciation
Impairment loss recognised on goodwill
43,409
78,402
-
-
-
-
43,409
78,402
-
Security and
surveillance
£
Year ended 31 March 2011
Electrical and
mechanical
£
Total
£
Capital expenditure
Depreciation
Impairment loss recognised on goodwill
17,813
85,498
-
-
-
-
17,813
85,498
-
*
Capital expenditure represented plant and equipment.
(d) Geographical segments
In determining the Group’s geographical segmen ts, revenues are attributed to the segments based on
the location of the customers and assets are attributed to the segments based on the location of the
assets.
No further geographical segment information is presented as the Group’s revenue is materially
derived from customers based in one geographic segment comprising Hong Kong, Macau, Taiwan
and the PRC, and all of the Group’s assets are located in the same geographic segment.
(e)
Information about major customers
Revenues of approximately £3,316,110 (2011: £2,115,481) are derived from two single external
customers, who contributed to 10% or more of the Group’s revenue for both 2012 and 2011 fiscal
years.
UNIVISION ENGINEERING LIMITED - 50 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
8.
OTHER INCOME
Exchange gain
Interest income
Write-back on trade and other payables
Gain on disposal of plant and equipment
Sundry income
9.
FINANCE COSTS
Interest on bank loans and other borrowings who lly repayable
within one year
Finance charge on obligation under finance lease
Financial guarantee liabilities
10.
PROFIT BEFORE INCOME TAX
Profit before income tax is stated after charging/(crediting):
Cost of inventories recognised as expenses
Impairment loss recognised on trade and other receivables
Allowance for / (recovery from) obsolete inventories
Auditor’s remuneration
- audit services (parent company)
Depreciation – leased plant and equipment
Depreciation – owned plant and equipment
Research and development costs
Operating lease charges – minimum lease payments
(Gain) / loss on disposal of plant and equipment
Gain from forgiveness of interest and principal
Gain on reconsolidation of a subsidiary
2012
£
2011
£
20,429
805
-
281
3,114
24,629
40,594
846
7,489
-
4,828
53,757
2012
£
2011
£
43,436
1,800
304,831
618,348
770
-
350,067
619,118
2012
£
2011
£
3,412,939
427,642
31,061
40,379
5,313
73,089
8,819
116,654
(281)
(2,031,901)
-
2,367,480
881,891
(15,136)
44,504
6,001
79,497
13,284
122,241
18,906
-
(8,426,380)
UNIVISION ENGINEERING LIMITED - 51 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
11. DIRECTORS’ REMUNERATION
Directors’ remuneration for the year is disclosed as follows:
Directors’ fees
Other emoluments:
Salaries, bonuses and allowances
Pension scheme contributions
12.
STAFF COSTS (including directors’ remuneration)
Wages and salaries
Pension scheme contributions
2012
£
2011
£
83,358
80,470
147,738
3,525
138,473
2,979
234,621
221,922
2012
£
2011
£
1,780,716
69,905
1,903,111
80,076
1,850,621
1,983,187
13.
INCOME TAX IN THE CONSOLIDATED STATEMENT OF COMPREHENS IVE INCOME
(a)
Income tax in the consolidated statement of comprehensive income :
Income tax expense
Hong Kong profits tax
PRC income tax
Taiwan income tax
2012
£
2011
£
-
-
15,700
15,700
-
-
20,053
20,053
No Hong Kong profits tax has been provided for in the financial statements as the Company has
unused tax losses to offset against its taxable profit during the year.
Taxes for subsidiary undertakings are calculated using the rates prevailing in the local jurisdictions ,
whereas PRC income tax rate is charged at 25% (2011: 25%) and Taiwan income rate is charged at
25% (2011: 25%).
UNIVISION ENGINEERING LIMITED - 52 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
13.
INCOME TAX IN CONSOLIDATED STATEMENT OF COMPREHENSVE INCOME
(CONTINUED)
(b) Reconciliation between income tax expense and accounting profit at the applicable tax
rates:
2012
£
2011
£
Profit before income tax
1,762,725
8,251,434
Notional tax on profit before income tax, calculated at the rates
applicable to profit in the tax jurisdictions concerned
Tax effect of non-taxable income
Tax effect of non-deductible expenses
Tax effect of temporary differences not recognised
Utilisation of tax losses previously unrecognised deferred tax assets
Tax losses not recognised as deferred tax assets
Tax adjustments
216,397
(499,342)
206,357
(2,772)
(3,704)
104,785
(6,021)
269,654
(324,180)
179,424
(143)
(104,411)
-
(291)
Income tax expense
15,700
20,053
14. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the profit attributable to the equity holders of
the Company for the year of £1,798,569 (2011: £8,192,288), and the weighted average of
383,677,323 (2011: 383,677,323) ordinary shares in issue during the year.
There were no potential dilutive instruments at either financial year end.
15. DIVIDENDS
No dividends have been declared or paid for the year ended 31 March 2012 (2011: £Nil).
UNIVISION ENGINEERING LIMITED - 53 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
16.
PLANT AND EQUIPMENT
The Group
Cost
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Research
assets
£
Total
£
At 1 April 2010
Additions
Disposals
Foreign translation difference
149,911
5,243
(113)
177
188,076
1,740
(35,517)
(1,223)
89,622
10,830
(10,844)
(968)
901,055
-
(359,743)
3,254
1,328,664
17,813
(406,217)
1,240
At 31 March 2011
155,218
153,076
88,640
544,566
941,500
At 1 April 2011
Additions
Disposals
Foreign translation difference
155,218
14,311
(401)
766
153,076
2,930
-
761
88,640
61,580
(1,582)
663
544,566
-
-
2,393
941,500
78,821
(1,983)
4,583
At 31 March 2012
169,894
156,767
149,301
546,959
1,022,921
Accumulated depreciation
At 1 April 2010
Charge for the year
Disposals
Foreign translation difference
114,592
17,282
(113)
108
164,880
10,586
(35,517)
(1,283)
69,470
12,208
(6,719)
(840)
782,629
45,422
(343,017)
2,948
1,131,571
85,498
(385,366)
933
At 31 March 2011
131,869
138,666
74,119
487,982
832,636
At 1 April 2011
Charge for the year
Disposals
Foreign translation difference
131,869
14,679
(401)
662
138,666
13,571
-
736
74,119
17,925
(1,582)
439
487,982
32,227
-
2,263
832,636
78,402
(1,983)
4,100
At 31 March 2012
146,809
152,973
90,901
522,472
913,155
Net book value
At 31 March 2012
At 31 March 2011
23,085
23,349
3,794
14,410
58,400
14,521
24,487
109,766
56,584
108,864
At the balance sheet date, the net book value of motor vehicle held under finance lease of the Group
and the Company was £30,212 (2011: £Nil).
UNIVISION ENGINEERING LIMITED - 54 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
16.
PLANT AND EQUIPMENT (CONTINUED)
The Company
Cost
At 1 April 2010
Additions
Disposals
Foreign translation difference
At 31 March 2011
At 1 April 2011
Additions
Disposals
Foreign translation difference
At 31 March 2012
Accumulated depreciation
At 1 April 2010
Charge for the year
Disposals
Foreign translation difference
At 31 March 2011
At 1 April 2011
Charge for the year
Disposals
Foreign translation difference
At 31 March 2012
Net book value
At 31 March 2012
At 31 March 2011
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Total
£
12,020
876
-
(780)
12,116
12,116
816
-
60
12,992
10,837
1,093
-
(712)
11,218
11,218
402
-
53
11,673
1,319
898
31,099
389
-
(1,955)
29,533
29,533
2,930
-
149
32,612
30,783
284
-
(1,931)
29,136
29,136
823
-
139
30,098
2,514
397
24,309
3,312
(6,872)
(1,402)
19,347
19,347
38,378
-
233
57,958
16,832
6,433
(2,747)
(1,171)
19,347
19,347
5,535
-
111
24,993
32,965
-
67,428
4,577
(6,872)
(4,137)
60,996
60,996
42,124
-
442
103,562
58,452
7,810
(2,747)
(3,814)
59,701
59,701
6,760
-
303
66,764
36,798
1,295
UNIVISION ENGINEERING LIMITED - 55 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
17. GOODWILL
The Group
Cost
At 31 March 2011 and 31 March 2012
Less: accumulated impairment loss
At 31 March 2011 and 31 March 2012
Net carrying amount
At 31 March 2011 and 31 March 2012
£
961,845
936,015
25,830
Impairment test for cash-generating unit containing goodwill
Goodwill is allocated to the Group’s cash -generating unit (“CGU”) identified according to operating
segment as follows:
Security and surveillance
2012
£
2011
£
25,830
25,830
The recoverable amount of the CGU is determined based on value -in-use calculations. These
calculations use cash flow projections based on financial budgets approved by management covering
a twelve month period. A discount rate of 15% has been used for the value-in-use calculations.
Key assumptions used for value -in-use calculations:
Gross margin
Growth rate
2012
2011
25%
13%
25%
13%
Management determined the budgets based on their experience and knowledge in the cons truction
contracts operations. The discount rate used is pre -tax and reflects specific risks relating to the
relevant segment.
Based on the impairment test performed, no impairment loss is recognised for the year (201 1: £Nil).
UNIVISION ENGINEERING LIMITED - 56 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
18.
INVESTMENT IN SUBSIDIARY UNDERT AKINGS
Shares in subsidiary undertakings
Less: impairment loss
Add: foreign translation difference
2012
£
2011
£
1,053,475
1,053,475
(1,201,190)
161,537
(1,191,416)
151,667
13,822
13,726
Amounts due from subsid iary undertakings
7,431,823
6,898,473
Less: impairment loss
Add: foreign translation difference
Total
(5,194,501)
563,015
(5,242,383)
797,407
2,800,337
2,453,497
2,814,159
2,467,223
The amounts due from subsidiary u ndertakings are unsecured, interest -free and not expected to be
recovered within one year.
Particulars of the Group’s subsidiary undertakings at 31 March 2012 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 Company
Directly Indirectly
Principal activities
T-Com Technology Co
Taiwan
Limited
NT$80,000,000
Ordinary share
52.25%
Leader Smart
Engineering Limited
Hong Kong
HK$10,000
Ordinary shares
100%
-
-
Supply, design, installation and
maintenance of closed circuit
television and surveillance
systems and the sale of security
system related products
Investment holding and
engineering contractor
Leader Smart
Engineering
(Shanghai) Limited
The PRC
US$1,000,000
Registered capital
-
100% Supply, design, installation and
maintenance of electrical and
mechanical systems,
construction decorations and
provision of engineering
consultancy services
Note: Leader Smart Engineering (Shangha i) Limited (“LSSH”)
is a wholly-foreign owned
enterprise established in the PRC to operate for 20 years up to 2025.
UNIVISION ENGINEERING LIMITED - 57 - ANNUAL REPORT 2012
19.
INVENTORIES
Raw materials
Work in progress
Finished goods
Less: impairment loss
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
The Group
The Company
2012
£
309,713
-
873,685
1,183,398
(92,009)
2011
£
311,085
20
650,719
961,824
(60,567)
2012
£
309,713
-
447,056
756,769
-
2011
£
311,085
20
386,664
697,769
-
1,091,389
901,257
756,769
697,769
The Group recognised a provision for obsolete inventories of £31,061 (2011: recovery of £15,136) on
slow-moving inventories.
20. CONTRACTS-IN-PROGRESS
Contract costs incurred plus
attributable profits less
foreseeable losses
Progress billings to date
Represented by:
Amounts due from customers for
contracts-in-progress
Less: allowance for doubtful
debts
Amounts due from customers for
contracts-in-progress, net (note
21)
Amounts due to customers for
contracts-in-progress (note 23)
The Group
The Company
2012
£
2011
£
2012
£
2011
£
27,501,135
(13,828,772)
24,789,114
(11,122,015)
10,954,384
(10,969,760)
9,454,549
(9,346,932)
13,672,363
13,667,099
(15,376)
107,617
14,481,967
14,231,427
476,053
671,945
(389,300)
(100,659)
(151,134)
(100,659)
14,092,667
14,130,768
324,919
571,286
(420,304)
(463,669)
(340,294)
(463,669)
13,672,363
13,667,099
(15,375)
107,617
At 31 March 2012, the amount of retention receivables from construction customers recorded within
“trade and other receivables” is £3,915 (2011: £24,460).
Within amounts due from customers for construction contracts-in-progress are receivables totalling
£11,109,209 (2011: £10,836,487), which have been pledged as security by the original land use rights
certificate and the developing property of the customer in LSSH and expected to be collected within
twelve months.
UNIVISION ENGINEERING LIMITED - 58 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
21. TRADE AND OTHER RECEIVABLES
Trade receivables
Less: allowance for doubtful
debts
Trade receivables, net
Other receivables
Deposits and prepayments
Amounts due from customers for
contracts-in-progress, net (note
20)
Pledged bank deposits
Less: non-current portion –
amounts due from customers for
contracts-in-progress
The Group
The Company
2012
£
2011
£
2012
£
2011
£
1,259,604
2,319,255
557,961
1,521,462
(584,602)
(1,442,176)
(227,710)
(1,201,983)
675,002
660,350
316,933
877,079
556,747
92,668
330,251
560,843
55,581
319,479
397,268
85,337
14,092,667
238,705
15,983,657
14,130,768
237,036
15,894,298
324,919
238,705
1,510,299
571,286
237,036
1,610,406
(1,340,393)
(1,051,382)
-
-
14,643,264
14,842,916
1,510,299
1,610,406
All of trade and other receivables are expected to be recove red within one year, other than those
separately disclosed.
At 31 March 2012, the Group had pledged bank deposits of £238,705 (2011: £237,036) to banks for
performance bonds in respect of construction contracts undertaken by the Group and the Company.
(a)
Impairment of trade receivables
Impairment losses in respect of trade receivables are recorded using an allowance account unless the
Group is satisfied that recovery of the amount is remote, in which case the impairment loss is written
off against trade receivables directly. Movements in the allowance for doubtful debts:
At 1 April
Impairment loss recognised
Bad debts written off
Foreign translation difference
The Group
The Company
2012
£
1,442,176
135,394
(1,008,679)
15,711
2011
£
1,345,523
176,845
-
(80,192)
2012
£
1,201,983
7,103
(986,215)
4,839
2011
£
1,283,731
1,314
-
(83,062)
At 31 March
584,602
1,442,176
227,710
1,201,983
Note: At 31 March 2012, trade receivables of the Group and the C ompany amounting to £135,394
(2011: £176,845) and £7,103 (2011: £1,314) respectively are individually determined to be
impaired and an impairment was provided. These individually impaired receivables were
outstanding over one year at the balance sheet date .
UNIVISION ENGINEERING LIMITED - 59 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
21. TRADE AND OTHER RECEIVABLES (CONTINUED)
(b)
Trade receivables that are not impaired
The following is an ageing analysis of trade receivables at the balance sheet date that were past due
but not impaired:
0 to 90 days
91 to 365 days
Over 365 days
The Group
The Company
2012
£
387,396
169,755
117,851
2011
£
586,745
152,321
138,013
2012
£
281,463
48,788
-
2011
£
246,484
63,185
9,810
675,002
877,079
330,251
319,479
Receivables that were past due but not impaired relate to a number of independent customers that
have a good track record with the Group. Based on past experience, management believes that no
impairment allowance is necessary in respect of these balances as there has not been a signifi cant
change in credit quality and the balances are still considered fully recoverable. The Company does
not hold any collateral over these balances.
22. CASH AND CASH EQUIVALENTS
The Group
The Company
2012
£
2011
£
2012
£
2011
£
Cash and bank balances*
504,323
1,023,526
432,672
859,245
Cash and cash equivalents in the
consolidated and the Company’s
statement of cash flows
504,323
1,023,526
432,672
859,245
* At 31 March 2012,
the Group maintained £37,186 (2011: £80,688) and £238,705 (2011:
£237,755) as restricted cash to secure against the bank facility and bank loans as collaterals (note
25), respectively.
UNIVISION ENGINEERING LIMITED - 60 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
23. TRADE AND OTHER PAYABLES
Trade payables
Bills payable
Due to a related party (note 30(b))
Accruals and other payables
Amounts due to customers for
contracts-in-progress (note 20)
The Group
The Company
2012
£
2,093,917
110,770
39,061
1,556,948
2011
£
2,360,609
193,168
39,455
2,479,261
2012
£
50,228
-
-
946,896
2011
£
44,159
-
-
1,860,242
420,304
463,669
340,294
463,669
4,221,000
5,536,162
1,337,418
2,368,070
24.
INCOME TAX IN THE BALANCE SHEET
(a)
Current tax liability in the balance sheet represents:
Hong Kong profits tax
PRC income tax
Taiwan income tax
The Group
The Company
2012
£
2011
£
2012
£
2011
£
-
1,174,441
58,971
-
1,122,740
52,066
1,233,412
1,174,806
-
-
-
-
-
-
-
-
(b) Unrecognised deferred tax assets
At 31 March 2012, the Company had unused tax losses of £4,950,190 (2011: £4,411,038) that were
available for offset against future taxable profits of the Company. No deferred tax asset s have been
recognised due to the unpredictability of the future profit st reams. Such unused tax losses are
available to be carried forward at no expiration.
No provision for deferred tax liabilities has been made in the financial statements as the tax effect of
temporary differences is immaterial to the Group and the Company.
UNIVISION ENGINEERING LIMITED - 61 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
25. LOAN AND BORROWINGS
Within one year or on demand:
Secured bank loans (note a)
Loan from a former shareholder
(note b)
The Group
The Company
2012
£
2011
£
2012
£
2011
£
741,086
945,554
-
-
2,493,966
3,738,766
2,493,966
3,738,766
3,235,052
4,684,320
2,493,966
3,738,766
Notes:
(a)
The secured bank loans carried interest at rates ranging from 3.232% to 5.75% per annum
(2011: 3.232% to 4% per annum) and were secured by:-
(i)
(ii)
Restricted cash (note 22) and;
Personal guarantee by the Chairman of the Company, Mr. Stephen Sin Mo KOO (note
30(c)).
(b)
A loan of US$5,000,000 was provided on 31 December 2007 by Mayne Management Limited
(“Mayne”), the former ultimate controlling party of UniVision Holdings Limited, which
previously owned a 47.9% equity interest of the Company. The loan facility is used
exclusively to finance a major construction project in the PRC.
On 15 December 2011, Mayne agreed with the Company to forgive the accrued interest
totalling US$2.865 million and US$1.0 million of the outstanding principal . The remaining
loan balance becomes interest-free (2011: 15% per annum) and is repayable by 31 March
2013. Security over the Group’s interest in a shopping mall contract within the PRC has been
provided. Hence, the Group recognised a gain of £2,031,901 from this forgiveness of interest
and principal for the year ended 31 March 2012.
26. OBLIGATION UNDER FINANCE LEASE
At 31 March 2012 and 2011, the Group and the Company had obligations under finance leases as
follows:
Minimum lease payment
2012
£
2011
£
Within one year
Between two to five years
Total minimum finance lease
payments
Less: future finance charges
Present value of lease obligation
9,404
25,481
34,885
4,905
29,980
4,529
1,133
5,662
929
4,733
Present value of the minimum
lease payment
2012
£
8,062
21,918
2011
£
3,786
947
29,980
4,733
UNIVISION ENGINEERING LIMITED - 62 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
27.
SHARE CAPITAL
Authorised :
800,000,000 ordinary shares of HK$0.0625 each
2012
£
2011
£
3,669,470
3,669,470
Issued and fully paid:
383,677,323 ordinary shares (2011: 383,677,323 ordinary shares)
of HK$0.0625 each
1,697,617
1,697,617
The Company has one class of ordinary shares .
28. RECONSOLIDATION AND DECONSOLIDATION OF A SUBSIDIARY
During the year ended 31 March 2010, the Group lost control of a wholly -owned subsidiary, LSSH as
a result of a legal dispute.
As a result of this dispute, the Group no longer has controlling po wer to govern the financial and
operating policies of LSSH so as to obtain benefit from its activities. Therefore, management has
decided to deconsolidate the assets and liabilities of LSSH at their carrying values at the date when
control was lost. Accordingly, the results of LSSH were excluded from the consolidated financial
statements of the Group since 1 April 2009. The consolidated statement of comprehensive income
presented a loss on deconsolidation of a subsidiary amounting to £8,324,208 for the y ear ended 31
March 2010.
The carrying values of LSSH at 1 April 2009 were as follow:
Assets:
Plant and equipment
Trade and other receivables
Cash and bank balances
Liabilities:
Trade and other payables
Tax payable
Net asset value
Loss on deconsolidation of a subsidiary
Translation reserve released upon deconsolidation
Analysis of net cash outflow of cash and cash equivalents arising from
deconsolidation of a subsidiary:
Cash and bank balances of a deconsolidated subsidiary
UNIVISION ENGINEERING LIMITED - 63 - ANNUAL REPORT 2012
1 April 2009
£
35,636
11,457,351
4,388
(2,262,610)
(823,772)
8,410,993
(8,324,208)
(86,785)
-
4,388
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
28. RECONSOLIDATION AND DECONSOLIDATION OF A SUBSIDIARY (CONTINUED)
Summarised the below financial statements of LSSH for the years ended 31 March 2011 and 2010:
Balance sheet at 31 March :
ASSETS
Non-current assets
Plant and equipment
Trade and other receivables
Total non-current assets
Current assets
Trade and other receivables
Cash and bank balances
Amount due from immediate holding co mpany
Total current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Amount due to ultimate holding company
Current tax liability
Total liabilities
Equity
Share capital
Reserves
Total equity
2011
£
(Audited)
2010
£
(Unaudited)
-
1,051,382
1,051,382
36,629
-
36,629
10,862,795
388
692,895
11,776,398
4,510
744,368
11,556,078
12,525,276
12,607,460
12,561,905
2,163,369
6,756,072
1,122,740
2,325,615
6,638,718
846,711
10,042,181
9,811,044
629,271
1,936,008
629,271
2,121,590
2,565,279
2,750,861
Total liabilities and equity
12,607,460
12,561,905
UNIVISION ENGINEERING LIMITED - 64 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
28. RECONSOLIDATION AND DECONSOLIDATION OF A SUBSIDIARY (CONTINUED)
Statement of operations for the years ended 31 March :
Revenue
Cost of sales
Gross profit
Other income
Administrative expenses
Impairment loss recognised on trade and other receivables
Loss before income tax
Income tax expense
Loss for the year
2011
£
(Audited)
1,198,716
680,261
518,455
8
(184,790)
(500,374)
(166,701)
-
(166,701)
2010
£
(Unaudited)
-
-
-
-
-
-
-
-
-
The functional currency of these financial statements is measured in Renminbi Yuan (“RMB”) and
they have been translated in GBP at a rate of 10.54 using the convenient translation metho d.
At 31 March 2010, the management has decided to deconsolidate the assets and liabilities of LSSH at
their carrying values at the date when control was lost. The investment in LSSH at 31 March 2010
was accounted for under the cost method and fully prov ided for a full impairment loss.
The consolidated statement of comprehensive income presented a loss on deconsolidation of
£8,324,208, which included:
Loss on deconsolidation of a subsidiary, including:
- Full impairment loss on investment cost of US$1,000,000
- Residual loss on deconsolidation of a subsidiary
Total:
£
£
606,920
7,717,288
8,324,208
In September 2010, a final verdict on this litigation was issued by the Court in favo ur of the Group
and the Group has regained the control in LSSH and assumed its authori sed power to govern the
financial and operating policies of LSSH. Accordingly, the results of LSSH have been reconsolidated
in the financial statements under IFRS 3 and the Group has fully recogni sed a gain on reconsolidation
of a subsidiary amounting to £8,426,380 in the consolidated statement of comprehensive income.
UNIVISION ENGINEERING LIMITED - 65 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
28. RECONSOLIDATION AND DECONSOLIDATION OF A SUBSIDIARY (CONTINUED)
The purchase price allocation based on the carrying value of the asse ts acquired and liabilities
assumed is as follows:
Cash
Trade and other receivables
Assets acquired
Trade and other payables
Current tax liability
Liabilities assumed
Net asset value
Foreign translation difference
Less: purchase price
Negative goodwill (as gain from reconsolidation)
29. OPERATING LEASE COMMITMENTS
2011
£
4,461
11,649,148
11,653,609
(2,300,486)
(837,562)
(3,138,048)
8,515,561
(89,181)
-
8,426,380
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
Between two to five years
The Group
The Company
2012
£
62,547
27,367
89,914
2011
£
98,989
28,145
127,134
2012
£
18,574
13,415
31,989
2011
£
61,106
4,709
65,815
UNIVISION ENGINEERING LIMITED - 66 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
30. RELATED PARTY TRANSACTIONS
Compensation of key management personnel
The remuneration of the key management of the Group during the year was as f ollows:-
Salaries, bonus and allowances
2012
£
2011
£
307,270
291,531
The remuneration of key management personnel comprise s the remuneration of Executive Directors
and key executives.
Executive Directors include Executive Chairman, Chief Executive Officer, Technical Director and
Finance Director of the Company. The remuneration of the Executive Directors is determined by the
Remuneration Committee having regard to the performance of individuals, the overall performance
of the Group and market trends. Further information about the Remuneration Committee and the
directors’ remuneration is provided in the Remuneration Report and the Report on Corporate
Governance to the Annual Report and note 11 to the financial statements.
Key executives include Director of Operations and Director of Sales and Marketing of the Company.
The remuneration of the key executives is determined by the Executive Directors annually having
regard to the performance of individuals and market trends.
Biographical information on key management personnel is disclosed in the Directors’ and Senior
Management’s Biographies section of the Annual Report.
Transactions with related parties
(a)
A loan of US$5,000,000 was provided on 31 December 2007 by Mayn e Management Limited,
the former ultimate controlling party of UniVision Holdings Limited, which previously owned
a 47.9% equity interest in the Company. Effective from 15 December 2011, the principal
amount was reduced to US$2,493,966 upon the forgiveness of certain accrued interest and
principal. The balance becomes interest -free and will mature due on 31 March 2013 (note
25(b)).
(b) At 31 March 2012, there is a payable balance of £39,061 (2011: £39,455) due to Mr. Stephen
Sin Mo KOO, the director of the Company, which is unsecured, interest-free and repayable on
demand (note 23).
(c)
At 31 March 2012, the bank loans amounting to £1,016,217 (2011: £1,011,767) are personally
guaranteed by the director of the Company, Mr. Stephen Sin Mo KOO . No charge has been
requested for this guarantee (note 25(a)).
Apart from the transactions disclosed above and elsewhere in the financial statements, the Group and
the Company had no other material transactions with related parties during the year.
UNIVISION ENGINEERING LIMITED - 67 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
31.
FINANCIAL GUARANTEE
In accordance with those certain supplemental agreements on the Sales and Purchase Contract
regarding the Zhongshan shopping mall project dated 10 December 2009, the Group’s wholly -owned
subsidiary, LSSH provided a guarantee in respect of secured s hort-term financing arrangement with a
maximum amount of up to £4.4 million (including outstanding principal and accrued interest and
charges) at the date of report. Pursuant to the terms of the guarantee, at any time from the date of
guarantee, in event of default in repayments, the Group is fully liable to repay the outstanding loan
principal, together with penalty charges, accrued interest and related late fees, after netting off the
pledged assets. The Group’s guarantee period starts from the date of gr ant of the financial
arrangement and ends when it is fully repaid. At 31 March 2012, the secured short-term loan has
become overdue and the financial arrangement is in negotiations for extension, but has not yet
reached a final agreement as to repayment of the borrowings.
In connection with the Zhongshan shopping mall project (the “Zhongshan Project”), the Group is
secured by certain beneficial interest in the Zhongshan Project on a recourse basis. At 31 March
2012, the fair market value of the Zhongshan P roject amounted to £28 million, based on the appraisal
report issued by an independent valuer. The Group has engaged an independent valuer to measure the
financial guarantee
fair value of such financial guarantee and accounted for the provision of
liabilities. Subsequently,
the obligation under the financial guarantee contract is expected to be
transferred to a purchaser in connection with the subsequent sale of the Zhongshan Project in the next
twelve months (see Note 33).
Financial guarantee liabilities
32. LEGAL PROCEEDINGS
2012
£
2011
£
310,438
-
Up to the date of this report, the Group has received several legal claims against its wholly-owned
subsidiary and the Company from its vendors in China in connection with th e transactions previously
entered into by the former director of LSSH. The Group plans to file counter -claims to the Court
against the former director of LSSH for all costs and compensations in respect of these legal claims.
At this point, the Group does not believe that these legal proceedings would have a material impact or
result in significant contingencies to the Group and the Company, therefore no provision for any
costs has been made.
UNIVISION ENGINEERING LIMITED - 68 - ANNUAL REPORT 2012
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2012
33. EVENTS AFTER THE REPORTING DATE
On 22 June 2012, the Company entered into a Transfer Agreement (the “Transfer Agreement”) with
Huaxin and its affiliate Guangzhou Jun Heng Electrical and Mechanical Equipment Company
Limited (“Jun Heng”), pursuant to which the Company agreed to transfer all of its rights and intere sts
in the project to Jun Heng in exchange for RMB 110 million (approximately £ 11 million), which will
be paid in three installments as follows:
i.
ii.
iii.
The security deposit of $790,000 (approximately £ 0.51 million) paid by Jun Heng on 22
December 2011 in connection with the letter of intent will be accounted as the first payment
made by Jun Heng under the Transfer Agreement, and
Jun Heng agreed to, within three months from the date of the Transfer Agreement, repay to
Mayne Management Limited (“Mayne”) the outstanding loan owed by the Company to Mayne
in the amount of HKD $31 million (approximately £2.56 million), and
The balance of RMB 79.5 million will be paid to the Company in cash or other methods to be
mutually agreed by the parties to the Tra nsfer Agreement by 22 December 2012.
Pursuant to the Transfer Agreement, Hua Xin also agreed to assume all of the contractual obligations
and liabilities of the Company arising from those certain supplemental agreements on the Sales and
Purchase Contract regarding the Zhongshan shopping mall project dated 10 December 2009, pursuant
to which the Company’s wholly -owned subsidiary, Leader Smart Engineering (Shanghai) Limited
(“LSSH”) provided a financial guarantee in respect of secured short -term financing arrangement with
a maximum amount of up to approximately £4.4 million , together with its related penalty charges,
accrued interest and related late fees .
UNIVISION ENGINEERING LIMITED - 69 - ANNUAL REPORT 2012
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 20 12 Annual General Meeting (AGM) 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 21 September 2012 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 2012 together with the Directors’ report and the Independent Auditor’s report;
2. To re-elect Mr. Chun Pan WONG who retired by rotation, as a Director of the Company;
3. To re-elect Mr. Nicholas James LYTH who retired by rotation, as a Non-executive Director of the
Company;
4. To reappoint auditor HKCMCPA Company Limited, Certified Public Accountants , (formerly known
as ZYCPA Company Limited ) as auditors of the Company, to hold office from the conclusion of the
meeting to the conclusion of the next meeting, during which accounts will be laid before the Company
and to authorize the Directors to adjust their remuneration packages;
5. That the directors of the Company be and are hereb y 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. Such authority (unless and to the extent previously revoked, varied or renewed by the
Company during the general meeting) to expire 15 months after the date of the passing of such
resolution or on the conclusion of the Company ’s next AGM to be held, following the date of passing
such resolution, whichever occurs first, save that the Company may before s uch 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.
6. That the directors of the Company be and are hereby generally and unconditionally authorized to
exercise all powers of the Company to repurchase the ’Ordinary Shares’ of HK$0.0625 each in the
capital of the Company, including any form of depositary receipt. Such authority (unless and to the
extent previously revoked, varied or renewed by the Company during the general meeting) to expire
15 months after the date of the passing of such r esolution or on the conclusion of the Company ’s next
AGM to be held, following the date of passing such resolution, whichever occurs first, save that the
Company may before such expiry make any offer or agreement which would or might require
Ordinary Shares to be repurchased after such expiry, and that the Directors may buy back Ordinary
Shares in pursuance of such an offer or an agreement as if such authority had not expired.
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
15 August 2012
Registered office:
8/F Lever Tech Centre,
69-71 King Yip Street
Kwun Tong, Kowloon,
Hong Kong.
UNIVISION ENGINEERING LIMITED - 70 - ANNUAL REPORT 2012
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 a nd any power of attorney
or other authority (if any) under which it is signed, or a notarized and certified copy of that power of
authority, must be lodged with the Company ’s registrars, c/o Computershare Investor Services Plc., The
Pavilions, Bridgwater Road, Bristol BS99 6ZY, not less than 48 hours before the Annual General
Meeting takes place.
3. Completion and return of a proxy does not preclude a member from attending and voting at the Annual
General Meeting.
4. The Company pursuant to Regulation 41 of th e Uncertificated Securities Regulations 2001 specifies
that only those shareholders registered in the Register of Members of the Company as of 15 August
2012 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 - 71 - ANNUAL REPORT 2012