UniVision Engineering Limited
Annual Report
Year ended 31 March 2013
UNIVISION ENGINEERING LIMITED
Annual Report
Year ended 31 March 2013
Contents
Page
Board of Directors, Officers 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
UNIVISION ENGINEERING LIMITED - 1 - ANNUAL REPORT 2013
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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 Marketing
Principal bankers
Bank of China (Hong Kong)
Citibank, N.A.
Hong Kong and Shanghai Banking Corporation
Hua Nan Commercial Bank (Taiwan)
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
Auditor
HKCMCPA Company Limited
Certified Public Accountants
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 2013
CHAIRMAN’S STATEMENT
INTRODUCTION
I am pleased to report the Group’s audited results for the financial year ended 31 March 2013.
Revenue from the Group’s Security and Surveillance Systems business remained stable. A slight drop of
revenue in Hong Kong was made up by growth of revenue in Taiwan during the year. The drop of
revenue in Hong Kong was mainly due to a d ecline in new product sales. We remain focused on
maintenance services. This business is particularly attractive as it generates stable cash flow. Our order
book shows significant growth compared to last year and we expect that the Hong Kong order book wi ll
improve over the coming years due to the pipeline of large infrastructure projects.
The sale of the Group’s interest in its shopping mall project in Zhongshan has moved to the arbitration
process. We will keep the market informed of any updates. We rem ain committed to expanding our
Electrical and Mechanical (“E&M”) business but it is subject to the availability of additional funding and
we are exploring various methods to obtain extra funding.
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 the Company is £92K (2012: £1.8m). The difference is due
to last year the Group recognised a gain from forgiveness of interest and princ ipal due from its former
major shareholder totalling £2m. The Group has provided for an impairment loss on trade and other
receivables totalling £0.2m (2012: £0.4m).
The Group generated positive net cash of £48K from its operating activities in the current year (2012:
£0.4m). It maintained the cash and cash equivalents at 31 March 2013 of £0.6m (31 March 2012: £0.5m).
During the year under review the relative strengthening in the HK$ against sterling has led to a 1.7%
appreciation in the GBP reporting amount in the Consolidated Statement of Comprehensive Income .
Also, a relative strengthening closing rate at the year-end in the HK$ against sterling has led to a 5.5%
appreciation in the GBP reporting amount in the Consolidated Balance Sheet. All figures in the Financial
Statements therefore needed to be adjusted for comparison purposes.
Turnover in the year was decreased by 6% to £7.3m (2012: £7.8m). This decrease was mainly due to the
reduction of £0.4m both in the Group’s product sales income and E&M business which was mainly
caused by loss of sales to a one-off customer and decrease in sales orders from the existing customers due
to increased market competition. The delay in the PRC construction project was the reason for the
decrease in E&M business income
The revenue from the construction contracts division (excluded the E&M business) recorded a growth of
7.8% and 6.7% respectively in Hong Kong and Taiwan even with increased market competition . The
Group’s maintenance contracts fell 3% compared with last year due to fewer large orders from MTR
Corporation Limited.
UNIVISION ENGINEERING LIMITED - 3 - ANNUAL REPORT 2013
(Continued)
CHAIRMAN’S STATEMENT
The Group’s Security and Surveillance Systems business continues to provide stable cash flows. The
major customers in the Security and Surveillance Systems business are public organisations and sizeable
private enterprises, such as MTR Corporation Limited in Hong Kong, which provide regular orders and
reliable payment schedules. The maintenance contract with MTR Corporation Limited has been renewed
for a further three year commencing January 2012. Further, the Group was awarded a new construction
contract by Hong Kong Government as announced in August 2012, for the Kai Tak Cruise Terminal with
a contract value of HK$10.96m.
It further strengthens the Group’s position in the Security and
Surveillance Systems business in Hong Kong. Most of the revenue for this project will be booked in the
first half financial year of 2013/14.
The Directors believe there will be higher demand for Security and Surveillance Systems business from
the local government infrastructure projects and from the commercial sector, such as the extension lines
of MTR in Hong Kong. We anticipate that the Group’s turnover from this division will grow. The
Management remain optimistic of the ability of the Group to compete in this highly competitive market
place.
Gross profit margin increased to 30.8% (2012: 29.2%). The major reason for this increase in was the
improved gross profit from the Taiwan's maintenance contracts. These increased from 23% to 34% due to
better pricing and cost control in projects. It did not though affect the growth in the value of Taiwan
maintenance contracts in this current year. The increase in Gross Profit from 38% to 42% in the Group’s
Hong Kong construction contracts and the increase in Gross Profit from 22% to 31% in the Group’s
product sales business also c ontributed to the increase. These increases were offset to an extent by the
effect of increasing material costs, wages and sub -contracting charges due to inflation during the year.
Administration expenses remain constant at £1.7m (2012: £1.7m) mainly due to effective cost
control .Finance costs dropped significantly during the year for the non -cash provision of financial
guarantee liability in respect of a secured financing arrangement £ 304,831 in last year. The outstanding
interest- free loan of US$3.95m due to Mayne Managem ent Limited, the former shareholder of the
Group, is repayable on 31 March 2014.
Our Taiwan subsidiary has improved and it declared a dividend of TWD3.2m (HK$0.8 4m) during the
year. The holding company received the dividend HK$0.44m in December 2012 after deducting the
withholding tax.
No significant capital investment occurred in the current year.
Profit before Interest and Tax (PBIT) was £0.3m (2012: £2.1m). Net profit before income tax was £0.2m
(2012: £1.8m). Basic earning per share for this year was 0.02p (2012: 0.47p).
The directors propose that the payment of a final dividend 0.78 HK cents (gross) per share for the
financial year ended 31 March 2013 (2012: Nil) . The dividend timetable is as follows:
Ex date
Record date.
Payment date
25 September 2013
27 September 2013
23 October 2013
The dividend is subject to approved by shareholders at the Annual General Meeting and has not been
included as a liability in the financial statements.
UNIVISION ENGINEERING LIMITED - 4 - ANNUAL REPORT 2013
(Continued)
CHAIRMAN’S STATEMENT
BUSINESS REVIEW
Markets
High Definition CCTV system has been a hot topic in recent time as IMS Research released the Video
Surveillance Trends for 2013 about the predictions of key trends and opportunities in the video
surveillance industry for 2013 and beyond . It has become more popular and a wide variety of equipment
is available to the market. Apart from megapixel resolution network security cameras, which are
predicted to out-sell standard resolution network security cameras, High Definition Serial Digital
Interface (HD-SID) camera, which provides high definition real time a nd no latency video via coaxial
cable are becoming another popular choice. It is ideally suited for existing analogue systems to migrate to
High Definition system, as the existing cabling infrastructure can be re -used which reduces the
expenditures of new cabling infrastructure. It also eliminates the requirement for fu rther investment on IT
infrastructure employed on IP based system.
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. Some pilot projects are
underway. The Board is confident that we can exploit th ese opportunities in the coming years due to the
expected growth of demand.
Our representative in the region of United Arab Emirates for CCTV business has made some progress.
Some projects are under negotiation and we expect to get the results soon. We are exploring this model to
expand our business overseas.
Our objective for the expansion of our Electrical and Mechanica l (“E&M”) business remains . However,
due to the lack of available capital no new E&M contracts are currently being undertaken. The Board
regards the extension of its activities in “Electrical and Mechanical” as the next step in delivering
shareholder value.
Acquisitions and Investments
The Group continues to assess possible opportunities of new investments with a view to making a further
strategic move.
PROSPECTS
Though we anticipate that the Taiwan business will slow down in the coming year, we are op timistic that
our Security and Surveillance business will remain stable as we can see a strong pipeline of infrastructure
projects in Hong Kong. The Board expect that the growing demand for its Network and the High
Definition Security and Surveillance prod ucts will enable the Group to continue to prosper in these
markets.
The growth of the E&M business remains the main priority for the Group. We are seeking ways to raise
additional funds to undertake these capital intensive projects and seek potential opp ortunities to work
with other strategic partners to enable us to exploit this business.
UNIVISION ENGINEERING LIMITED - 5 - ANNUAL REPORT 2013
CHAIRMAN’S STATEMENT
(Continued)
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 ded ication to the Group.
MR. STEPHEN SIN MO KOO
EXECUTIVE CHAIRMAN
16 September 2013
UNIVISION ENGINEERING LIMITED - 6 - ANNUAL REPORT 2013
DIRECTORS AND SENIOR
MANAGEMENT’S BIOGRAPHIES
DIRECTORS’ BIOGRAPHIES
Nicholas James LYTH – Non-executive Director (aged 47)
Mr. Lyth is a qualified chartered management accountant and has over 1 3 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 56)
Mr. Koo joined UniVision in 19 98 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 Institu te
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 54)
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 53)
Mr. Wong joined UniVision in 1991 and was appointed as a Director on 25 March 1992. He
holds a Master Degree in Religious Studies in Chinese University of Hong Kong and a Bachelor Degree
in Computer Science from the University of Edinburgh, Scotland, and over 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 49)
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, th e leading instant noodle manufacturing MNC. Mr. Yip has over 20
years experience in finance and accounting in different industries. He is a fellow member of the
Association of Chartered Certified Accountants and a member of Hong Kong Institute of Certified Public
Accountants. He also acts as Company Secretary for the Corporation.
UNIVISION ENGINEERING LIMITED - 7 - ANNUAL REPORT 2013
DIRECTORS’ AND SENIOR
MANAGEMENT’S BIOGRAPHIES
(Continued)
SENIOR MANAGEMENT’S BRIEF BIOGRAPHIES
Mike Chiu Wah CHAN – Director of Operations (aged 39)
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 manag ement 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 49)
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 - 8 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMI TED
DIRECTORS’ REPORT
The Directors have pleasure in presenting their annual report together with the audited financial
statements of the Group and the Company for the year ended 31 March 20 13.
Principal Activities
The principal activities of the Company are the supply, design, consultation, installation and
maintenance of closed circuit television and surveillance systems, and the sale of security related
products. 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 development is included in the Chairman’s Statement.
Financial Position
The Group’s profit for the year ended 31 March 20 13 and the state of affairs of the Group at that
date are set out in the consolidated statement of comprehensive income on page 19 and in the
consolidated balance sheet on page 20, respectively.
The Group’s and the Company’s changes in shareholders’ equity for the year ended 31 March 20 13
are set out in the consolidated and the Company’s statement of changes in equity on page 22 and
23, respectively.
The Group’s and the Company’s cash flow for the year ended 31 March 20 13 is set out in the
consolidated and the Company’s statement of cash flows on pages 24 to 26.
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
Quick Ratio :
(Current Assets –Inventories)/ Current
Liabilities
2013
2012
1.8
1.8
31 days
32 days
4.5
31%
0.38
1.7
5.0
29%
0.38
1.7
:
:
:
:
:
:
UNIVISION ENGINEERING LIMITED - 9 - ANNUAL REPORT 2013
DIRECTORS’ REPORT
(Continued)
Share Capital and Reserves
Details of the movements in share capital are set out in note 2 7 on page 63.
The movements in reserves during the year are set out in the consolidated statement of changes in
equity on page 22.
Dividends
The Directors propose that the payment of a final dividend of 0.78 HK cents (gross) per share for
the financial year ended 31 March 2013.
Plant and Equipment
Details of the movements in plant and eq uipment are set out in note 16 on pages 54 to 55.
Directors
The directors who held office during the year and to the date of this report were as follows:
Stephen Sin Mo KOO
Chun Hung WONG
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
Mr. Stephen Sin Mo KOO and Danny Kwok Fai YIP retire by rotation at the forthcoming annual
general meeting in accordance with the Company ’s Articles of Association and, being eligible, the
current directors offer themselves for re -election.
Directors’ Interests in Contracts
No director had a material interest in any contract of significance to the business of the Company to
which the Company, its holding company, or its subsidiaries was a party at the end of the year or at
any time during the year.
Directors’ Interests in Shares
According to the register of Directors ’ Shareholdings kept by the Company, particulars of interests
of the Directors (or their immediate families) who held office at the end of the financial year in the
ordinary shares of the Company are as set out in the table below:
Ordinary Shares held as at 31 March 20 13
Stephen Sin Mo KOO
Chun Hung WONG
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
278,203,700*
-
-
-
-
UNIVISION ENGINEERING LIMITED - 10 - ANNUAL REPORT 2013
(Continued)
DIRECTORS’ REPORT
* 78,744,000 ordinary shares are registered under the name of Up Sky Investments Limited which
is an investment holding co mpany incorporated under the laws of the British Virgin Islands and is
wholly-owned by Mr. Stephen Sin Mo KOO. Mr. Stephen Sin Mo KOO, is deemed to be
interested in all the ordinary shares registered in the name of Up Sky Investments Limited.
Following the Share Transaction on 8 July 2011, the entire stake of UniVision Holdings Limited (it
holds 183,736,000 shares of the Company) was transferred to Up Sky Investments Limited, a
company that is wholly owned by Mr. Stephen Koo. He is also interested in 15,723,700 ordinary
shares in the Company. Therefore following the Share Transaction , he has a total direct and indirect
interest in 278,203,700 ordinary shares in the Company, equivalent to 72.5% of the Company’s
total issued share capital.
Save as disclosed in this report, none of the Directors (or their immediate families) who held office
at the end of the financial year had interests in the share capital of the Company during the
financial year.
Directors’ Rights to Acquire Shares or Debentures
At no time during the year were rights to acquire benefits by means of the acquisition of shares in
or debentures of the Company granted to any director or their respective spouse or minor children,
or were any such rights exercised by them; or was the Company, its holding company, or its
subsidiaries a party to any arrangement to enable the directors of the Company to acquire by means
of the acquisition of shares in, or debentures of any other body corporate.
Substantial Shareholdings
As at 10 September 2013, the Directors had been informed of the following companies that held
3% or more of the Company’s issued ordinary share capital:
UniVision Holdings Limited (1)
Up Sky Investments Limited (2)
W B Nominees Limited
TD Direct Investing Nominees
(Europe) Limited
Number
ordinary shares
of
% of total issued share
capital
183,736,000
78,744,000
20,181,800
12,149,598
47.9
20.5
5.3
3.2
(1) UniVision Holdings Limited is an investment holding company incorporated under the laws of
the British Virgin Islands and was formerly owned by Mayne Management Limited. Up Sky
Investments Limited acquired the entire stake from Mayne Management Limited on 8 July 201 1
and became the major shareholder.
UNIVISION ENGINEERING LIMITED - 11 - ANNUAL REPORT 2013
(Continued)
DIRECTORS’ REPORT
(2) Up Sky Investments Limited is an investment holding company incor porated under the laws of
the British Virgin Islands and is wholly -owned by Mr. Stephen Sin Mo KOO.
Payments to Creditors
The Group does not follow any code or standard on payment practice but instead the Group policy
is to pay all creditors in accordance with agreed terms of business.
Political and Charitable Donations
During the year the Company made no political or charitable contributions (201 2: Nil).
Employees
The Group values staff involvement at all levels of operations, and uses various means to train,
inform and consult the employees. The Group encourages the management to discuss regularly
with the employees on both corporate and individual matters and discloses information to them that
will increase their awareness of the financial and econom ic factors affecting the Group.
The Group recognises its obligations to provide a fair consideration on all vacancies towards
people with disability and to ensure that such persons are not discriminated against on the grounds
of their disability. For those employees who become disabled during their employment period, the
Group will make every effort to ensure that their employment will continue and that sufficient
training is arranged.
Annual General Meeting
The Annual General Meeting of the Company wi ll be held at UniVision Engineering Limited, 8/F
Lever Tech Centre, 69-71 King Yip Street, Kwun Tong, Kowloon, Hong Kong, on 21 October
2013 at 5:00 p.m. The Notice of Meeting appears on page 66.
Annual Report
The annual report for the year ended 31 Marc h 2013 will be uploaded on the Company’s website
www.uvel.com on 16 September, 2013 and the hard copy will be sent to shareholders by our
Registrars, Computershare Investor Services (Jersey) Limited.
UNIVISION ENGINEERING LIMITED - 12 - ANNUAL REPORT 2013
(Continued)
DIRECTORS’ REPORT
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
16 September 2013
UNIVISION ENGINEERING LIMITED - 13 - ANNUAL REPORT 2013
REMUNERATION REPORT
The Remuneration Committee presents this report to shareholders on behalf of the Board.
Membership of Remuneration Committee
The Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and
Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH.
Policy Statement
The Remuneration Committee sets the remuneration and all other terms of employment of the Executive
Directors with a vision to provide a package which is suitable for the responsibilit ies 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
£
£
£
2013
Total
£
2012
Total
£
Executive Directors
Stephen Sin Mo KOO
Chun Pan WONG
Chun Hung WONG
Danny Kwok Fai YIP
39,158
41,630
54,772
37,176
571
1,183
1,183
1,183
-
3,769
6,730
3,369
39,729
46,582
62,685
41,728
84,001
43,443
56,188
39,772
Non-executive Director
Nicholas James LYTH
11,747
-
-
11,747
4,809
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 - 14 - ANNUAL REPORT 2013
REPORT ON CORPORATE GOVERNANCE
Introduction
The Directors believe that their foremost functio n 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 oth er duties. They are also given written guidelines and rules defining their
responsibilities within an AIM listed company.
The Board considers that all Non-executive Directors are independent of management and day to day
operation, and free from any comme rcial 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
meetings. The Audit Committee meets not less tha n twice per annum.
The responsibilities of the Committee are to:
- monitor the quality of the overall internal control system of all financial matters;
-
-
-
-
-
-
review the Company’s Accounting Policies and ensure compliance with accounting standards;
ensure that the financial performance of the Company is properly measured and reported on;
consider the appointment/re-appointment of the external auditor;
review the conduct of the audit and discuss the audit fees;
review reports from the Auditors relating to the Compan y’s accounting and internal controls;
to ensure the Company complies with the AIM Rules.
UNIVISION ENGINEERING LIMITED - 15 - ANNUAL REPORT 2013
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,
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.
salaries,
-
In discharging its functions, the Committee may obtain independent external legal and other professional
advices as it deems necessary. The expense of such advice shall be borne by the Company.
Internal Control
The Board of Directors is responsible for ensuring that the Company maintains an internal financial
control system with appropriate monitoring procedures for all Group companies. The purpose of this
system is to safeguard Company assets, maintain proper accounting records, and ensure that reliable
financial information is used within the Group and for publication purposes. However, the system is
designed to manage rather than completely eliminate risk and can only provide reasonable but not
absolute assurance against material misstatement.
In order to achieve the above responsibilities, the Board meets regularly and monitors the Company ’s
internal financial control by reviewing the overall process and the performance of the systems, setting
annual budgets and periodic forecasts, and seeking any prior approval for all significant expenditure.
The Group currently does not have an internal audit department and after extensive review and
consideration, the Board has concluded that the existing control mechanisms are sufficient for the size of
the Group. This decision will be kept under review.
Going Concern
After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the
Group have adequate resources to continue in operational existence for the foreseeable future. For this
reason, they continue to adopt the going concern basis in preparing the Company ’s and Group’s financial
statements.
Investor Relations
The Company realises that effective communication can increase transparency and accountability to its
shareholders; as such, the Company discloses its information to its shareholders through RNS (i.e. the
news distribution service operated by the London Stock Exchange plc). The same information can also
be found on the Company’s website (www.uvel.com). The Company will make eve ry 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 recogni ses 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 is sues on an informal basis at the
conclusion of the AGMs.
UNIVISION ENGINEERING LIMITED - 16 - ANNUAL REPORT 2013
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 D irectors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material depart ures
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 Co mpany to
prevent and detect fraud and other irregularities.
UNIVISION ENGINEERING LIMITED - 17 - ANNUAL REPORT 2013
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 Uni Vision Engineering Limited (the “Company”) and its
subsidiaries (collectively referred to as the “Group”) set out on pages 20 to 70, which comprise the
consolidated and the Company ’s balance sheet as at 31 March 2013, 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 than the Company and the Company’s
shareholders as a body for this report or for the opinions we have formed.
Directors’ responsibility for the financial statements
The directors are responsible for the preparation of 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, whet her due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted
our audit in accordance with International Standards on Auditing. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amou nts 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 prese ntation 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 - 18 - ANNUAL REPORT 2013
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING L IMITED
(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 2013 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
PANG KING SZE, RUFINA
Practising Certificate number P05228
Hong Kong, China
16 September 2013
UNIVISION ENGINEERING LIMITED - 19 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2013
Note
2013
£
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
Finance costs
Profit before income tax
Income tax expense
Profit for the year
8
10
25(b)
9
10
13
Other comprehensive income:
Exchange differences arising on translation of foreign operations
Total comprehensive income for the year
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.
7,313,425
7,780,444
(5,060,805)
(5,505,251)
2,252,620
2,275,193
17,775
(106,807)
(1,696,030)
(188,148)
-
(37,727)
24,629
(94,583)
(1,696,706)
(427,642)
2,031,901
(350,067)
241,683
1,762,725
(57,278)
(15,700)
184,405
1,747,025
615,952
384,304
800,357
2,131,329
92,143
92,262
1,798,569
(51,544)
184,405
1,747,025
697,526
102,831
2,181,901
(50,572)
800,357
2,131,329
14
14
0.02p
0.02p
0.47p
0.47p
UNIVISION ENGINEERING LIMITED - 20 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
CONSOLIDATED BALANCE SHEET
As at 31 March 2013
Note
2013
£
2012
£
16
17
21
19
21
22
86,833
25,830
1,436,027
109,766
25,830
1,340,393
1,548,690
1,475,989
1,134,747
15,952,660
585,046
1,091,389
14,643,264
504,323
17,672,453
16,238,976
19,221,143
17,714,965
23
24(a)
25
31
26
4,534,103
1,350,264
3,528,205
332,588
7,522
4,221,000
1,233,412
3,235,052
310,438
8,062
9,752,682
9,007,964
26
27
15,669
21,918
9,768,351
9,029,882
1,697,617
7,470,794
1,697,617
6,773,268
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
9,168,411
8,470,885
Non-controlling interests
Total equity
Total liabilities and equity
284,381
214,198
9,452,792
8,685,083
19,221,143
17,714,965
The financial statements on pages 20 to 70 were authorised for issue by the board of directors on 16
September 2013 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Hung WONG, Director
UNIVISION ENGINEERING LIMITED - 21 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
COMPANY BALANCE SHEET
As at 31 March 2013
Note
2013
£
2012
£
16
18
19
21
22
23
25
26
26
27
33,521
3,093,724
36,798
2,814,159
3,127,245
2,850,957
803,163
1,683,139
456,758
756,769
1,510,299
432,672
2,943,060
2,699,740
6,070,305
5,550,697
1,369,206
2,621,723
7,522
1,337,418
2,493,966
8,062
3,998,451
3,839,446
15,669
21,918
4,014,120
3,861,364
1,697,617
358,568
1,697,617
(8,284)
2,056,185
1,689,333
6,070,305
5,550,697
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
Total liabilities and equity
The financial statements on pages 20 to 70 were authorised for issue by the board of directors on 16
September 2013 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Hung WONG, Director
UNIVISION ENGINEERING LIMITED - 22 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2013
Share
capital
£
Share
premium
£
(Note 1)
Retained
earnings/
(accumulated
losses)
£
Special
capital
reserve “A”
£
(Note 2)
Special
capital
reserve “B”
£
(Note 3)
Statutory
surplus
reserves
£
Translation
reserve
£
Sub-total
£
Non-
controlling
interest
£
Total
equity
£
At 1 April 2011
1,697,617
2,192,640
467,159
155,876
143,439
Profit/ (loss) for the year
Exchange difference arising on translation
of foreign operations
Total comprehensive income for the year
-
-
-
-
-
-
1,798,569
-
1,798,569
-
-
-
-
-
-
At 31 March 2012
Profit for the year
Dividend distributed by a subsidiary
Transfer to statutory surplus res erves
Exchange difference arising on translation
of foreign operations
Total comprehensive income for the year
1,697,617
2,192,640
2,265,728
155,876
143,439
-
-
-
-
-
-
-
-
-
-
92,143
-
(7,927)
-
84,216
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,927
1,632,253
6,288,984
264,770
6,553,754
-
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
2,015,585
8,470,885
214,198
8,685,083
-
-
-
92,143
92,262
184,405
-
-
(32,648)
(32,648)
-
-
-
605,383
605,383
10,569
615,952
7,927
605,383
697,526
70,183
767,709
At 31 March 2013
1,697,617
2,192,640
2,349,944
155,876
143,439
7,927
2,620,968
9,168,411
284,381
9,452,792
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 2013.
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 i nventories 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 O rder of the High Court dated 20 November 2004,
the authorised and issued capital of the Company was reduced from HK$159,245,000 divided into
31,849 ordinary shares of HK$5,000 each to HK$16,405,000 divided into 3,281 ordinary shares of
HK$5,000 each. The reduction of capital was effected by cancellation of 28,568 ordinary shares of
HK$5,000 each in the issued and paid up share capital of the Company. The Company established a
non-distributable special capital reserve “B” account into which HK$2,071,307 was credited as a
result of the capital reduction.
UNIVISION ENGINEERING LIMITED - 23 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2013
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
(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
1,697,617
2,192,640
(2,999,464)
155,876
143,439
499,225
1,689,333
-
-
-
-
-
-
257,598
-
257,598
-
-
-
-
-
-
-
257,598
109,254
109,254
109,254
366,852
At 1 April 2011
Profit for the year
Exchange difference arising on translation of
foreign operations
Total comprehensive income for the year
At 31 March 2012
Profit for the year
Exchange difference arising on translation of
foreign operations
Total comprehensive income for the year
At 31 March 2013
1,697,617
2,192,640
(2,741,866)
155,876
143,439
608,479
2,056,185
UNIVISION ENGINEERING LIMITED - 24 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMI TED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2013
Note
2013
£
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 obsolete inventories
Impairment loss recognised on trade and other receivables
Gain on disposal of plant and equipment
Gain from forgiveness of interest and principal
8
16
10
10
10
25(b)
Changes in operating assets and liabilities:
Increase in inventories
Increase in trade and other receivables
Increase in trade and other payables
Cash generated from operations
Income tax paid
241,683
1,762,725
-
37,726
(1,516)
65,904
27,585
188,148
(510)
-
304,831
45,236
(805)
78,402
31,061
427,642
(281)
(2,031,901)
559,020
616,910
(13,029)
(506,618)
35,950
(214,364)
(37,430)
65,578
75,323
430,694
(27,793)
(9,024)
Net cash generated from operating activities
47,530
421,670
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
8
1,516
(38,548)
510
(36,522)
805
(43,409)
281
(42,323)
UNIVISION ENGINEERING LIMITED - 25 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
For the year ended 31 March 2013
Note
2013
£
2012
£
Cash flows from financing activities
Interest paid
Dividend paid to non-controlling interests
Repayment of obligation under finance lease
Proceed from loan and borrowings
Repayment of loan and borrowings
Net cash from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
(37,726)
(32,648)
(8,175)
112,060
-
33,511
44,519
(45,236)
-
(10,291)
-
(849,081)
(904,608)
(525,261)
Cash and cash equivalents at beginning of year
504,323
1,023,526
Effect of changes in exchange rates
36,204
6,058
Cash and cash equivalents at end of year
22
585,046
504,323
UNIVISION ENGINEERING LIMITED - 26 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CASH FLOW S
For the year ended 31 March 2013
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
Dividend income received from a subsidiary
Impairment loss recognised on investment in subsidiar y
undertakings
Impairment loss recognised on trade and other receivables
Gain from forgiveness of interest and principal
Changes in operating assets and liabilities:
Increase in inventories
(Increase)/decrease in trade and other receivables
Increase in amounts due from subsidiaries
(Decrease)/increase in trade and other payables
Note
2013
£
2012
£
257,598
2,160,317
1,361
(1,275)
15,081
(35,631)
16
18
-
1,800
(572)
6,760
-
-
-
-
154,648
40,387
(2,031,901)
237,134
331,439
(2,359)
(87,899)
(111,362)
(43,944)
(53,889)
70,646
(483,001)
363,241
Net cash (used in)/generated from operating activities
(8,430)
228,436
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Dividend income received from a subsidiary
Proceeds from disposal of plant and equipment
Net cash from/(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 in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of changes in exchange rates
1,275
(9,894)
35,631
-
27,012
(1,361)
(8,175)
(16,316)
572
(6,711)
-
-
(6,139)
(1,800)
(10,291)
(641,231)
(25,852)
(653,322)
(7,270)
(431,025)
432,672
31,356
859,245
4,452
Cash and cash equivalents at end of year
22
456,758
432,672
UNIVISION ENGINEERING LIMITED - 27 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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 surveill ance systems,
the sale of security system related products and provision for electronic 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 I NTERNATIONAL FINANCIAL REPORTING
STANDARDS (“IFRSs”)
(i) New and amended standards, and interpretations mandatory for the first time for the financial
year beginning 1 January 2012 and relevant to the Company:
There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial
year beginning 1 January 2012 that would be expected to have a material impact on the
Company.
(ii) New and amended standards, and interpretations mandatory for the first time for the financial
year beginning 1 January 2012 but not currently relevant to the Company:
A number of new standards and amendments to standards and interpretations are effective for
annual periods beginning after 1 January 2012, and have not been applied in preparing the
financial statements. None of these is expected to have a significant effect on the financial
statements of the Company.
UNIVISION ENGINEERING LIMITED - 28 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
3.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING
STANDARDS (“IFRSs”) (CONTINUED)
- Amendments to IFRS 1, ‘First time adoption’ on fixed dates and hyperinflation. The first
amendment replaces references to a fixed date of 1 January 2004 with “the date of transition
to IFRSs”, thus eliminating the need for companies adopting IFRSs for the first time to
restate derecognition transaction s that occurred before the date of transition to IFRSs. The
second amendment provides guidance on how an entity should resume presenting Financial
Information in accordance with IFRSs after a period when the entity was unable to comply
with IFRSs because its functional currency was subject to severe hyperinflation.
-
IFRS 7, ‘Financial instruments: Disclosures’ was amended in October 2012 for the transfer
of financial assets. These amendments are as part of the IASB’s comprehensive review of
off Statement of Financial Position activities. The amendmen ts promote transparency in the
reporting of transfer transactions and improve users’ understanding of the risk exposures
relating to transfers of financial assets and the effect of those risks on an entity’s fina ncial
position, particularly those involving securitisation of financial asset.
- Amendments to IAS 12, ‘Income Taxes’ on deferred tax. Currently IAS 12 requires an
entity to measure the deferred tax relating to an asset depending on whether the entity
expects to recover the carrying amount of the asset through use or sale. It can be difficult
and subjective to assess whether recovery will be through use or through sale when the asset
is measured using the fair value model in IAS 40 Investment Property. Henc e this
amendment introduces an exception to the existing principle for the measurement of
deferred tax assets or liabilities arising on investment property measured at fair value. As a
result of the amendments, SIC 21, ‘income taxes – recovery of revalued non-depreciable
assets’, would no longer apply to investment properties carried at fair value. The
amendments also incorporate into IAS 12 the remaining guidance previously contained in
SIC 21, which is accordingly withdrawn.
(iii) New standards, amendments and interpretations issued but not effective for the financial year
beginning 1 January 2012 and not early adopted are as follows.
Unless otherwise stated, the Directors are assessing the possible impact of the following
standards on the Company:
-
IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition
of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and
October 2010. It replaces parts of IAS 39 that relate to the classification and measureme nt of
financial instruments. IFRS 9 requires financial assets to be classified into two measurement
categories: those measured as at fair value and those measured at amortised cost. The
determination is made at initial recognition. The classification depen ds on the entity’s
business model for managing its financial instruments and the contractual cash flow
characteristics for the instrument. For financial liabilities, the standard retains most of the
IAS 39 requirements. The main change is that, in cases wh ere the fair value option is taken
for financial liabilities, the part of a fair value change due to an entity’s own credit risk is
recorded in other comprehensive income rather than the income statement, unless this
creates an accounting mismatch. The Com pany is yet to assess IFRS 9’s full impact and
intends to adopt IFRS 9 no later than the accounting period beginning on or after 1 January
2015. The Company will also consider the impact of the remaining phases of IFRS 9 when
completed by the Board.
UNIVISION ENGINEERING LIMITED - 29 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
3.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING
STANDARDS (“IFRSs”) (CONTINUED)
-
-
-
IFRS 10 “Consolidated Financial Statements” builds on existing principles by identifying
the concept of control as the determining factor in whether an entity s hould be included
within the consolidated Financial Information of the parent company. The standard
provides additional guidance to assist in the determination of control where this is difficult
to assess. This standard is effective for periods beginning on or after 1 January 2013;
IFRS 11 “Joint Arrangements” provides for a more realistic reflection of joint arrangements
by focusing on the rights and obligations of the arrangement, rather than its legal form (as is
currently the case). The standard addr esses inconsistencies in the reporting of joint
arrangements by requiring a single method to account for interests in jointly controlled
entities. This standard is effective for periods beginning on or after 1 January 2013;
IFRS 12 “Disclosure of Interes ts in Other Entities” is a new and comprehensive standard on
disclosure requirements for all forms of interests in other entities, including joint
arrangements, associates, special purpose vehicles and other off balance sheet vehicles.
This standard is effective for periods beginning on or after 1 January 2013;
- Amendments
to IFRS 10, ‘Consolidated Financial Statements’, IFRS 11, ‘Joint
Arrangements and IFRS 12, ‘Disclosure of Interests in Other Entities’, provide additional
transition relief to IFRSs 10,1 1 and 12 by limiting the requirement to provide adjusted
comparative information to only the preceding comparative period. For disclosures related
to unconsolidated structured entities, the amendments will remove the requirement to
present comparative information for periods before IFRS 12 is first applied. The Company
is yet to assess the full impact of these amendments and intends to adopt the amended
standards no later than the accounting period beginning on or after 1 January 2013.
-
IFRS 13 “Fair Value Measurement” improves consistency and reduces complexity by
providing, for the first time, a precise definition of fair value and a single source of fair
value measurement and disclosure requirements for use across IFRSs. It does not extend the
use of fair value accounting, but provides guidance on how it should be applied where its
use is already required or permitted by other standards. This standard is effective for
periods beginning on or after 1 January 2013;
- Amendments to IFRS 1 “First -time Adoption of International Financial Reporting
Standards” require that first-time adopters apply the requirements in IFRS 9 “Financial
Instruments” and IAS 20 “Accounting for Government Grants and Disclosure of
Government Assistance” prospectively to government lo ans existing at the date of transition
to IFRSs. Entities may choose to apply the requirements retrospectively if the information
needed to do so had been obtained at the time of initially accounting for the loan. This
standard is effective for annual pe riods beginning on or after 1 January 2013.
-
-
IAS 27 “Separate Financial Statements” replaces the current version of IAS 27
“Consolidated and Separate Financial Statements” as a result of the issue of IFRS 10 (see
above). This revised standard is effective for periods beginning on or after 1 January 2013;
IAS 28 “Investments in Associates and Joint Ventures” replaces the current version of IAS
28 “Investments in Associates” as a result of the issue of IFRS 11 (see above). This revised
standard is effective for periods beginning on or after 1 January 2013;
UNIVISION ENGINEERING LIMITED - 30 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
3.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING
STANDARDS (“IFRSs”) (CONTINUED)
- Amendments to IAS 19 “Employment Benefits” eliminate the option to defer the
recognition of gains and lo sses, known as the “corridor method”; streamline the presentation
of changes in assets and liabilities arising from defined benefit plans, including requiring
remeasurements to be presented in other comprehensive income; and enhance the disclosure
requirements for defined benefit plans, providing better information about the characteristics
of defined benefit plans and the risks that entities are exposed to through participation in
those plans. This standard is effective for annual periods beginning on or after 1 January
2013;
- Amendments to IAS 32 “Financial Instruments: Presentation” add application guidance to
address inconsistencies identified in applying some of the criteria when offsetting financial
assets and financial liabilities. This includes cla rifying the meaning of “currently has a
legally enforceable right of set -off” and that some gross settlement systems may be
considered equivalent to net settlement. This standard is effective for annual periods
beginning on or after 1 January 2014;
-
‘Annual Improvements 2009 – 2011 Cycle’ sets out amendments to various IFRSs as
follows:
An amendment to IFRS 1, ‘First -time Adoption’ clarifies whether an entity may
apply IFRS 1:
(a) if the entity meets the criteria for applying IFRS 1 and has applied IFRS 1 in a
previous reporting period; or
(b) if the entity meets the criteria for applying IFRS 1 and has applied IFRSs in a
previous reporting period when IFRS 1 did not exist.
The amendment to IFRS 1 also addresses the transitional provisions for borrowing
costs relating to qualifying assets for which the commencement date for capitalization
was before the date of transition to IFRSs.
An amendment to IAS 1, ‘Presentation of Financial Statements’ clarifies the
requirements for providing comparative informatio n:
(a) for the opening Statement of Financial Position when an entity changes
accounting policies, or makes retrospective restatements or reclassifications; and
(b) when an entity provides Financial Statements beyond the minimum comparative
information requirements.
An amendment to IAS 16, ‘Property, Plant and Equipment’ addresses a perceived
inconsistency in the classification requirements for servicing equipment.
An amendment to IAS 32, ‘Financial Instruments: Presentation’ addresses perceived
inconsistencies between IAS 12, ‘Income Taxes’ and IAS 32 with regard to
recognizing the consequences of income tax relating to distributions to holders of an
equity instrument and to transaction costs of an equity transaction.
An amendment to IAS 34, ‘Interim Fin ancial Reporting’ clarifies the requirements on
segment information for total assets and liabilities for each reportable segment.
UNIVISION ENGINEERING LIMITED - 31 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of consolidation
(a)
Subsidiaries
Subsidiaries are all entities (inc luding 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 ar e 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.
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 in terests 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 liabil ities 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.
UNIVISION ENGINEERING LIMITED - 32 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.1 Basis of consolidation (continued)
(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 previou sly
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 reclassi fied 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 appr opriate.
4.2
Segment reporting
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incurs expenses, including revenues and expenses that relate to transactions
with other components of the Group. Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision -maker. The chief operating decision -
maker is responsible for allocating resources and assessing performance of the operat ing 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 (“th e 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
UNIVISION ENGINEERING LIMITED - 33 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.3
Foreign currency (continued)
(b)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are remeasured.
Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the 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 foreign currency classified as
available for sale are analysed between translation differences resulti ng from changes in the
amortised cost of the security and other changes in the carrying amount of the security. Translation
differences in respect of changes in amortised cost are recognised in profit or loss, and other changes
in carrying amount are recognised in other comprehensive income.
Translation differences on non -monetary financial assets and liabilities such as equities held at fair
value through profit or loss are recognised in profit or loss as part of the fair value gain or loss.
Translation differences on non-monetary financial assets, such as equities classified as available for
sale, are included in other comprehensive income.
(c)
Group companies
The results and financial position of all the group entities (none of which has the currency of a hyper-
inflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
(i)
(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 da tes, 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 trans lation of the net investment in foreign
operations, and of borrowings and other currency instruments designated as hedges of such
investments, are taken to other comprehensive income . When a foreign operation is partially
disposed of or sold, exchange diff erences 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.
UNIVISION ENGINEERING LIMITED - 34 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.4
Plant and equipment
Plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated
depreciation and accumulated impa irment 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
3 - 5 years
2 - 5 years
3 years
3 - 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.
The residual values, useful life and depreciation method are reviewed at the end of each reporting
period to ensure that the amount, method and period of depreciation are consistent with previous
estimates and the expected pattern of consumption of the future economic benefits embodied in the
items of plant and equipment. The effects of any revision are recognised in profit or loss when the
changes arise.
Subsequent expenditure relating to plant and equipment that has already been recognised is added to
carrying amount of the asset only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. All other repair
and maintenance expenses are recognised in profit or loss whe n 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 accumulated 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 impairment 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 ope rating
segment.
UNIVISION ENGINEERING LIMITED - 35 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 fo r 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 a nd 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 asset 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 .
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 whenev er 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 highe r 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.
UNIVISION ENGINEERING LIMITED - 36 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8
Financial assets
Financial assets are recognised on the balance shee t when, and only when, the Group becomes a
party to the contractual provisions of the financial instruments.
(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 pr esented 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” ac ceptances,
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.
(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 fi nancial 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.
UNIVISION ENGINEERING LIMITED - 37 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8
Financial assets (continued)
(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 effective 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 presen t 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 agains t 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.
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 liabilities are
derecognised, and through the amortisation process. A financial liability is derecognised when the
obligation under the liability is extinguished.
UNIVISION ENGINEERING LIMITED - 38 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.10 Construction contracts
When the outcome of a construction contract can be estimated reliably, contract costs are recogni sed
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 tot al 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 s elling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
4.12 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualif ying
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. Invest ment income earned on the temporary investment of
specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
4.13 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 guarantee contract. Subsequent ly, 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 - 39 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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 wi thin the Group.
The Group recognises revenue when the amount of revenue and related cost can be reliably
measured, it is probable that future economic will flow to the entity and when specific criteria have
been met for each of the Group’s activities as d escribed 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 c osts
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 e stimated reliably, revenue is
recognised only to the extent of contract costs incurred that it is probable will be recoverable.
(ii) Maintenance contracts
Revenue from maintenance contracts is recognised on a straight line basis over the term of the
maintenance contract.
(iii) Product sales
Revenue from product sales is recognised on the transfer of risks and rewards of ownership,
which generally coincides with the delivery of goods to customers and the passing of title to
customers.
(iv)
Interest income
Interest income is recognised as it accrues using the effective interest method.
(v) Dividend income
Dividend income from investments is recognised when the shareholder ’s right to receive
payment has been established (provided that it is probable t hat the economic benefits will flow
to the Company and the amount of income can be measured reliably).
UNIVISION ENGINEERING LIMITED - 40 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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 evaluat es positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognised if
they arise from the initial
recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the 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 temporary differences arising on investments in subsidiaries and
associates, except for deferred income tax liability where the timing of the reversal of the temporary
difference is controlled by the group and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income taxes assets and
liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities where there is an intention to settle the balances on a net basis.
UNIVISION ENGINEERING LIMITED - 41 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.16 Cash and cash equivalents
In the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call
with banks, other short-term highly liquid investments with original maturities of three months or
less.
4.17 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 re quired 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 outfl ow 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 o ccurrence
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.
4.18 Employee benefit
These comprise short term employee benefits and contributions t o defined 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.
4.19 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 reductio n of the 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 term 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 - 42 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
5.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOU RCES 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 revisi on affects 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 applying 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 strong cost control
system with regular review of budgets which highlight any incidences that could affect
estimated costs to completion.
(b) Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of e stimation 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.
(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 review the credit histo ry 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 cons olidated statement of
comprehensive income. As at 31 March 2013, the total carrying amount of trade and other
receivables are £15,952,660 (2012: £14,643,264).
UNIVISION ENGINEERING LIMITED - 43 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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 2013, the Group has unused tax losses of £5,331,538, (2012: £4,950,190)
available for offset against future profits. A deferred tax asset of £879,740 (2012: £870,494)
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 inc ome 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
2013
£
2012
£
15,952,660
585,046
14,643,264
504,323
4,534,103
3,528,205
332,588
23,191
4,221,000
3,235,052
310,438
29,980
(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 fi nancial 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 - 44 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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 transactions, whi ch 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 a nd other payables and borrowings, at the end of the reporting
period are as follows:
The Group
The Company
Assets
Liabilities
Assets
Liabilities
2013
2012
2013
2012
2013
2012
2013
2012
NTD
RMB
USD
HK$
91,745,343
114,796,596
102,480
25,823,460
72,480,103
128,211,210
150,604
26,225,513
77,936,668
37,918,302
3,948,718
16,251,432
66,761,917
37,841,095
3,974,359
16,996,772
-
116,700
101,159
23,643,127
-
23,850
142,250
-
85,597
3,948,718
22,897,287 ` 15,978,539
-
-
3,974,359
16,996,772
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 - 45 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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% (2012: 5%) is
the sensitivity rate used when reporting foreign currency risk internally to key management
personnel and represents management’s assessment of the reasonably possible change in
foreign exchange rates. The sensitivity analysis includes only outstanding foreign currencies
denominated monetary items and adjusts their translation at the year end for a 5% (2012: 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% (2012: 5%) against the relevant
foreign currencies. For a 5% (2012: 5%) weakening of £ against the relevant currency, there
would be an equal but opposite impact on the 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
2013
£
2012
£
16,068
6,372
430,178
471,997
(134,404)
(126,287)
42,883
39,077
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 policy.
However, management
monitors interest rate exposure and will consider hedging significant interest rate exposure
should the need arises.
The Group’s and the Company’s exposures to interest rates on financial liabilities are detailed
in the liquidity risk management section of this note.
UNIVISION ENGINEERING LIMITED - 46 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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 financial ye ar. 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 2012.
For the year ended 31 March 2013, 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 £2,510 (2012: £2,646).
(ii) Credit risk
At 31 March 2013, the Group’s and the Company’s maximum exposure to credit risk in the
event of the counterparties’ failure to perform their obligations in relation to each class of
recognised financial assets is the carrying amount of those assets as stated in the c onsolidated
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 mon itored 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 credit ri sk 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 Compan y’s exposure to
credit risk arising from trade and other receivables are set out in note 21.
UNIVISION ENGINEERING LIMITED - 47 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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 2013, the Group
had aggregate banking facilities of £2,456,940 (2012: £2,355,824), of which £1,550,458 were
unused (2012: £1,614,739).
1.
The following table details the contractual maturities of the Group’s and the Company’s
financial liabilities at the balan ce 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 30)
Weighted
average
effective
interest rate
%
Within
1 year
or on
Demand
£
2013
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 2013
£
3.39% -
3.91% 3,538,642
-
4,534,103
3.25%-
3.95%
332,588
8,744
8,414,077
-
-
8,744
8,744
-
-
3,538,642
3,528,205
4,534,103
4,534,103
332,588
332,588
9,471
26,959
23,191
9,471
8,432,292
8,418,087
7,930,000
-
-
7,930,000
7,930,000
UNIVISION ENGINEERING LIMITED - 48 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
6.
FINANCIAL INSTRUMENTS ( CONTINUED)
(iii) Liquidity risk (continued)
The Group
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
Weighted
average
effective
interest rate
%
Within
1 year
or on
demand
£
2013
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 2013
£
-
2,621,723
-
3.25%-
3.95%
1,369,206
8,744
3,999,673
-
-
8,744
8,744
-
-
2,621,723
2,621,723
1,369,206
1,369,206
9,471
26,959
23,191
9,471
4,017,888
4,014,120
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Financial guarantee
liabilities
Obligation under
finance lease
Financial guarantee
Maximum amount
guaranteed (note
30)
The Company
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligation under
finance lease
UNIVISION ENGINEERING LIMITED - 49 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
6.
FINANCIAL INSTRUMENTS ( CONTINUED)
(iii) Liquidity risk (continued)
The Company
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 2013
£
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligation under
finance lease
(c)
Fair value
-
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
The fair values of financial assets and financial liabilities are determined in accordance with
generally accepted pricing models based on discounted cash flow ana lysis.
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 th e cost
of capital.
The Group actively and regularly reviews and manages its capital structure to maintain a
balance between the higher shareholder returns that might be possible with a higher level of
borrowings and the advantages and security afforded by a sound capital position, and makes
adjustments to the capital structure in light of changes in economic conditions.
The Group monitors its capital structure on the basis of a net debt -to-adjusted capital ratio.
For this purpose the Group defines net de bt as total debt (which includes bank borrowings and
other financial liabilities) less bank deposits and cash. Adjusted capital comprises all
components of equity less unaccrued proposed dividends.
UNIVISION ENGINEERING LIMITED - 50 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
6.
FINANCIAL INSTRUMENTS ( CONTINUED)
(d) Capital risk management (continued)
During 2013, the Group’s strategy, which was unchanged from 2012, 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 pai d to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
Neither the Company nor any of its subsidiary undertakings are subject to externally imposed
capital requirements.
The net debt-to-adjusted capital ratios of the Group and the Company at the end of the
reporting period were as follows :
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
2013
£
4,534,103
3,528,205
1,350,264
332,588
7,522
9,752,682
2012
£
4,221,000
3,235,052
1,233,412
310,438
8,062
9,007,964
2013
£
1,369,206
2,621,723
-
-
7,522
3,998,451
2012
£
1,337,418
2,493,966
-
-
8,062
3,839,446
15,669
21,918
15,669
21,918
Total debt
9,768,351
9,029,882
4,014,120
3,861,364
Less: cash and bank balances
585,046
504,323
456,758
432,672
Net debt
Total equity
9,183,305
8,525,559
3,557,362
3,428,692
9,452,792
8,685,083
2,056,185
1,689,333
Net debt-to-adjusted capital
ratio
97%
98%
173%
203%
UNIVISION ENGINEERING LIMITED - 51 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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 a llocation 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 results by operating segment:
Segment revenue by major products and services :
- Construction contracts
- Maintenance contracts
- Product sales
Revenue from external customers
Segment profit/(loss)
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 from forgiveness of interest and principal
Finance costs
Profit/(loss) before income tax
Security and
surveillance
£
Year ended 31 March 2013
Electrical and
mechanical
£
Total
£
4,528,152
2,382,445
349,030
7,259,627
53,798
-
-
53,798
509,740
(37,727)
472,013
(230,330)
-
(230,330)
4,581,950
2,382,445
349,030
7,313,425
279,410
(37,727)
241,683
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
UNIVISION ENGINEERING LIMITED - 52 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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 2013
Electrical and
mechanical
£
Total
£
5,415,732
-
5,415,732
5,746,092
-
5,746,092
13,805,411
-
13,805,411
19,221,143
-
19,221,143
4,022,259
-
4,022,259
9,768,351
-
9,768,351
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
UNIVISION ENGINEERING LIMITED - 53 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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 2013
Electrical and
mechanical
£
Total
£
Capital expenditure
Depreciation
Impairment loss recognised on goodwill
38,548
65,904
-
-
-
-
38,548
65,904
-
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
-
*
Capital expenditure represented plant and equipment.
(d) Geographical segments
In determining the Group’s geographical segments, re venues 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 £3,619,984 (2012: £3,316,110) are derived from three single external
customers (2012: two), who contributed to 10% or more of the Group ’s revenue for 2013 fiscal year.
UNIVISION ENGINEERING LIMITED - 54 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
8.
OTHER INCOME
Exchange gain
Interest income
Gain on disposal of plant and equipment
Sundry income
9.
FINANCE COSTS
Interest on bank loans and other borrowings wholly 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 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 on disposal of plant and equipment
Gain from forgiveness of interest and principal
2013
£
2012
£
6,337
1,516
510
9,412
17,775
20,429
805
281
3,114
24,629
2013
£
2012
£
36,366
1,361
-
37,727
43,436
1,800
304,831
350,067
2013
£
2,396,205
188,148
27,585
37,938
10,813
55,091
11,134
131,072
(510)
-
2012
£
3,412,939
427,642
31,061
40,379
5,313
73,089
8,819
116,654
(281)
(2,031,901)
UNIVISION ENGINEERING LIMITED - 55 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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
2013
£
2012
£
39,158
83,358
159,194
4,120
147,738
3,525
202,472
234,621
2013
£
2012
£
1,890,833
77,642
1,780,716
69,905
1,968,475
1,850,621
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
2013
£
2012
£
-
-
57,278
57,278
-
-
15,700
15,700
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% (2012: 25%) and Taiwan income rate is cha rged at
25% (2012: 25%).
UNIVISION ENGINEERING LIMITED - 56 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
13.
INCOME TAX IN CONSOLIDATED STATEMENT OF COMPREHENSVE INCOME
(CONTINUED)
(b) Reconciliation between income tax expense and accounting profit at the applicable tax
rates:
2013
£
2012
£
Profit before income tax
241,683
1,762,725
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
61,865
(6,806)
53,970
(943)
(36,431)
27,797
(42,174)
216,397
(499,342)
206,357
(2,772)
(3,704)
104,785
(6,021)
Income tax expense
57,278
15,700
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 £92,143 (2012: £1,798,569), and the weighted average of 383,677,323
(2012: 383,677,323) ordinary shares in issue during the year.
There were no potential dilutive instruments at either financial year end.
15. DIVIDENDS
In respect of the current year, the Board of Directors propose that a dividend of £0.063 pence per
share (equal to HK$0.78 cents per share, based on the prevailing exchange rate 1GBP =HK$12.3675
as at 16 September 2013) be paid to the shareholders (2012: Nil). This dividend is subject to
approval by shareholders at the Annual General Meeting and has not been included as a liability in
these consolidated financial statements. The total estimated dividend to be paid will be £241,980,
based on the prevailing exchange rate as above-mentioned. The payment of this di vidend will not
have any tax consequences of the Group.
UNIVISION ENGINEERING LIMITED - 57 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
16.
PLANT AND EQUIPMENT
The Group
Cost
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Research
assets
£
Total
£
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
At 1 April 2012
Additions
Disposals
Foreign translation difference
169,894
28,563
-
8,642
156,767
3,867
-
7,556
149,301
6,118
(10,426)
7,339
546,959
-
-
24,235
1,022,921
38,548
(10,426)
47,772
At 31 March 2013
207,099
168,190
152,332
571,194
1,098,815
Accumulated depreciation
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
At 1 April 2012
Charge for the year
Disposals
Foreign translation difference
146,809
19,178
-
7,295
152,973
2,675
-
7,296
90,901
23,584
(10,426)
4,941
522,472
20,467
-
23,817
913,155
65,904
(10,426)
43,349
At 31 March 2013
173,282
162,944
109,000
566,756
1,011,982
Net book value
At 31 March 2013
At 31 March 2012
33,817
23,085
5,246
3,794
43,332
58,400
4,438
86,833
24,487
109,766
At the balance sheet date, the net book value of motor vehicle held under finance lease of the Group
and the Company was £20,683 (2012: £Nil).
UNIVISION ENGINEERING LIMITED - 58 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
16.
PLANT AND EQUIPMENT (CONTINUED)
The Company
Cost
At 1 April 2011
Additions
Disposals
Foreign translation difference
At 31 March 2012
At 1 April 2012
Additions
Disposals
Foreign translation difference
At 31 March 2013
Accumulated depreciation
At 1 April 2011
Charge for the year
Disposals
Foreign translation difference
At 31 March 2012
At 1 April 2012
Charge for the year
Disposals
Foreign translation difference
At 31 March 2013
Net book value
At 31 March 2013
At 31 March 2012
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Total
£
12,116
816
-
60
12,992
12,992
445
-
773
14,210
11,218
402
-
53
11,673
11,673
415
-
695
12,783
1,427
1,319
29,533
2,930
-
149
32,612
32,612
3,330
-
2,038
37,980
29,136
823
-
139
30,098
30,098
1,571
-
1,816
33,485
4,495
2,514
19,347
38,378
-
233
57,958
57,958
6,118
-
3,630
67,706
19,347
5,535
-
111
24,993
24,993
13,095
-
2,019
40,107
27,599
32,965
60,996
42,124
-
442
103,562
103,562
9,893
-
6,441
119,896
59,701
6,760
-
303
66,764
66,764
15,081
-
4,530
86,375
33,521
36,798
UNIVISION ENGINEERING LIMITED - 59 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
17. GOODWILL
The Group
Cost
At 31 March 2012 and 31 March 2013
Less: accumulated impairment loss
At 31 March 2012 and 31 March 2013
Net carrying amount
At 31 March 2012 and 31 March 2013
£
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
2013
£
2012
£
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 app roved 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
2013
2012
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 ( 2012: £Nil).
UNIVISION ENGINEERING LIMITED - 60 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
18.
INVESTMENT IN SUBSIDIARY UNDERTAKINGS
Shares in subsidiary undertakings
Less: impairment loss
Add: foreign translation difference
2013
£
2012
£
1,053,475
1,053,475
(1,201,190)
161,537
(1,201,190)
161,537
13,822
13,822
Amounts due from subsidiary undertakings
7,979,454
7,431,823
Less: impairment loss
Add: foreign translation difference
Total
(4,900,355)
803
(5,194,501)
563,015
3,079,902
2,800,337
3,093,724
2,814,159
The amounts due from subsidiary undertakings are unsecured, interest -free and not expected to be
recovered within one year.
Particulars of the Group’s subsidiary undertakings at 31 March 2013 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 share
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:
enterprise established in the PRC to operate for 20 years up to 2025.
Leader Smart Engineering (Shanghai) Limited (“LSSH”) is a wholly-foreign owned
UNIVISION ENGINEERING LIMITED - 61 - ANNUAL REPORT 2013
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 2013
The Group
The Company
2013
£
2012
£
327,168
365
931,783
1,259,316
(124,569)
309,713
-
873,685
1,183,398
(92,009)
2013
£
327,168
-
475,995
803,163
-
2012
£
309,713
-
447,056
756,769
-
1,134,747
1,091,389
803,163
756,769
The Group recognised a provision for obsolete inventories of £27,585 (2012: £31,061) on slow-
moving inventories.
20. CONTRACTS-IN-PROGRESS
The Group
The Company
2013
£
2012
£
2013
£
2012
£
31,130,690
(16,068,072)
27,501,135
(13,828,772)
13,281,207
(13,198,376)
10,954,384
(10,969,760)
15,062,618
13,672,363
82,831
(15,376)
15,885,794
14,481,967
619,646
476,053
(415,066)
(389,300)
(159,908)
(151,134)
15,470,728
14,092,667
459,738
324,919
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)
(408,110)
(420,304)
(376,907)
(340,294)
15,062,618
13,672,363
82,831
(15,375)
At 31 March 2013, the amount of retention receivables from construction customers recorded within
“trade and other receivables” is £22,112 (2012: £3,915).
Within amounts due from customers for construction contracts-in-progress are receivables totalling
£11,901,827 (2012: £11,109,209), 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 - 62 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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
2013
£
2012
£
2013
£
2012
£
1,254,491
1,259,604
551,822
557,961
(637,847)
(584,602)
(240,929)
(227,710)
616,644
638,220
417,087
675,002
660,350
316,933
310,893
530,104
136,396
330,251
560,843
55,581
15,470,728
246,008
17,388,687
14,092,667
238,705
15,983,657
459,738
246,008
1,683,139
324,919
238,705
1,510,299
(1,436,027)
(1,340,393)
-
-
15,952,660
14,643,264
1,683,139
1,510,299
All of trade and other receivables are expected to be recovered within one year , other than those
separately disclosed.
At 31 March 2013, the Group had pledged bank deposits of £246,008 (2012: £238,705) to banks for
performance bonds in respect of co nstruction 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 remot e, 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
Reversal of impairment loss
Bad debts written off
Foreign translation difference
The Group
The Company
2013
£
584,602
184,190
(162,923)
-
31,978
2012
£
1,442,176
135,394
-
(1,008,679)
15,711
2013
£
227,710
-
-
-
13,219
2012
£
1,201,983
7,103
-
(986,215)
4,839
At 31 March
637,847
584,602
240,929
227,710
At 31 March 2013, trade receivables of the Group and the Company amounting to
Note:
£184,190 (2012: £135,394) and £Nil (2012: £7,103) 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 - 63 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
21. TRADE AND OTHER RECEIVABLES (CONTINUED)
(b)
Trade receivables that are not impaired
The following is an ageing analysis of trade receivables at the bal ance sheet date that were past due
but not impaired:
0 to 90 days
91 to 365 days
Over 365 days
The Group
The Company
2013
£
497,928
37,603
81,113
2012
£
387,396
169,755
117,851
2013
£
292,375
18,518
-
2012
£
281,463
48,788
-
616,644
675,002
310,893
330,251
Receivables that were past due but not impaired relate to a number of independent customers that
have a good track record with the Group. Based on past experience, management believes that no
impairment allowance is necessary in respect of these balances as there has not been a significant
change in credit quality and the balances are still considered fully recoverable. The Company does
not hold any collateral over these balances.
22. CASH AND CASH EQUIVALENTS
The Group
The Company
2013
£
2012
£
2013
£
2012
£
Cash and bank balances*
585,046
504,323
456,758
432,672
Cash and cash equivalents in the
consolidated and the Company’s
statement of cash flows
585,046
504,323
456,758
432,672
* At 31 March 2013, the Group maintained £34,264 (2012: £37,186) as restricted cash to secure
against the banking facility.
UNIVISION ENGINEERING LIMITED - 64 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
23. TRADE AND OTHER PAYABLES
Trade payables
Bills payable
Due to a related party (note
29(b))
Accruals and other payables
Amounts due to customers for
contracts-in-progress (note 20)
The Group
The Company
2013
£
2,329,100
125,359
42,376
1,629,158
2012
£
2,093,917
110,770
39,061
1,556,948
2013
£
48,325
-
-
943,974
2012
£
50,228
-
-
946,896
408,110
420,304
376,907
340,294
4,534,103
4,221,000
1,369,206
1,337,418
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
2013
£
2012
£
2013
£
2012
£
-
1,258,234
92,030
-
1,174,441
58,971
1,350,264
1,233,412
-
-
-
-
-
-
-
-
(b) Unrecognised deferred tax assets
At 31 March 2013, the Company had unused tax losses of £5,331,538 (2012: £4,950,190) 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 streams. Such unused tax losses are
available to be carried forward at no expiration.
No provision for deferred tax liabilities has been made in the financial statements as the tax effect of
temporary differences is immaterial to the Group and the Compan y.
UNIVISION ENGINEERING LIMITED - 65 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
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
2013
£
2012
£
2013
£
2012
£
906,482
741,086
-
-
2,621,723
2,493,966
2,621,723
2,493,966
3,528,205
3,235,052
2,621,723
2,493,966
Notes:
(a)
The secured bank loans carried interest at rates ranging from 3.39% to 3.91% per annum
(2012: 3.232% to 5.75% per annum) and were secured by:-
(i) Restricted cash (note 22) and;
(ii) Personal guarantee by the Chairman of the Company, Mr. Stephen Sin Mo KOO (note
29(c)).
(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 and is repayable by 31 March 201 4. Security over the
Group’s interest in a shopping mall contract within the PRC has been provided.
26. OBLIGATION UNDER FINANCE LEASE
At 31 March 2013 and 2012, the Group and the Company ha d obligations under finance leases as
follows:
Minimum lease payment
2013
£
2012
£
Within one year
Between two to five years
Total minimum finance lease
payments
Less: future finance charges
Present value of lease obligation
8,744
18,215
26,959
3,768
23,191
9,404
25,481
34,885
4,905
29,980
Present value of the minimum
lease payment
2013
£
7,522
15,669
2012
£
8,062
21,918
23,191
29,980
UNIVISION ENGINEERING LIMITED - 66 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
27.
SHARE CAPITAL
Authorised :
800,000,000 ordinary shares of HK$0.0625 each
2013
£
2012
£
3,669,470
3,669,470
Issued and fully paid:
383,677,323 ordinary shares (2012: 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. OPERATING LEASE COMMITMENTS
At the balance sheet date, the total future minimum lease payments under non -cancellable operating
leases for the office and warehouse premises are payable as follows:
Within one year
Between two to five years
The Group
The Company
2013
£
60,728
6,080
66,808
2012
£
62,547
27,367
89,914
2013
£
19,074
-
19,074
2012
£
18,574
13,415
31,989
UNIVISION ENGINEERING LIMITED - 67 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
29. RELATED PARTY TRANSACTIONS
Compensation of key management personnel
The remuneration of the key management of the Group during the year was as follows: -
Salaries, bonus and allowances
2013
£
2012
£
284,533
307,270
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 1 1 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 Mayne 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 inter est-free and will mature due on 31 March 2014 (note
25(b)).
(b) At 31 March 2013, there is a payable balance of £42,376 (2012: £39,061) 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 2013, the bank loans amounting to £0 (2012: £31,851) 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 - 68 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
30.
FINANCIAL GUARANTEE
In accordance with those certain supplemental agreements on the Sales an d 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 short -term financing arrangement with a
maximum amount of up to £ 7.9 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 grant of the financial
arrangement and ends when it is fully repaid. At 31 March 2013, 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 “Z hongshan Project”), the Group is
secured by certain beneficial interest in the Zhongshan Project on a recourse basis. At 31 March
2013, the fair market value of the Zhongshan Project amounted to £ 31 million, based on the appraisal
report issued by an independent valuer. At 31 March 2013, the Company expects their interest in
Zhongshan Project to be transferred to a committed purchaser at the consideration of RMB110
million (approximately £11 million), together with the contingent liability under the financi al
guarantee, in the next twelve months. Hence, no additional provision of financial guarantee liabilities
is required and the provision is expected to be reversed upon the subsequent sale of the Zhongshan
Project.
Financial guarantee liabilities
31. LEGAL PROCEEDINGS
2013
£
2012
£
332,588
310,438
Up to the date of this report, t he Group has received several legal claims against its wholly-owned
subsidiary and the Company from its vendors in China in connection with the 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 - 69 - ANNUAL REPORT 2013
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2013
32. EVENTS AFTER THE REPORTING DATE
On 22 August 2013, the Comp any, among Hua Xin and Jun Heng entered into an agreement on 22
August 2013 which is supplementary to the agreement dated 22 June 2012. This agreement commits
Hua Xin and Jun Heng to complete the purchase of the Company’s interest in the Zhongshan Project
no later than 28 February 2014 (“backstop date”).
The first hearing of the Guangzhou Arbitration Commission , (the “Commission”) in relation to the
dispute was heard on 14 June 2013 during which the Commission requested that all relevant parties
provide it with further documentation relating to the dispute. Since that date there have been further
hearings. The Commission will consider if it has sufficient information to constitute to a binding
contract at a later date. Up to date of this report, the arbitration over the Zhongshan Project is still
ongoing and is in the provision of evidence stage.
There remains uncertainty as to both the decision of the Commission and the timing of this decision.
In event that either the decision is still pending on 28 February 2014 or a decision has been handed
down which is not in Hong Yi’s favour, the Company would have the option of either enforcing this
agreement or renegotiating the backstop date. As part of consideration for the 51% interest include
some assets that are currently owned by Hua Xin, Jun Heng or Hong Yi, the Board of Directors
consider to allow some extension to the backstop date so as to improve its negotiating position over
the precise composition of the consideration.
UNIVISION ENGINEERING LIMITED - 70 - ANNUAL REPORT 2013
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 201 3 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 October 2013 at 5:00p.m. The following businesses
will be transacted then:
1.
2.
3.
4.
5.
6.
7.
To receive and adopt the Company ’s audited financial statements for the financial year ended 31
March 2013 together with the Directors’ report and the Independent Auditor’s report;
To declare a final dividend for the financial year ended 31 March 20 13.
To re-elect Mr. Stephen Sin Mo KOO who retired by rotation, as a Director of the Company;
To re-elect Mr. Danny Kwok Fai YIP who retired by rotation, as a Director of the Company;
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;
That the directors of the Company be and are hereby generally and unconditionally authorized to
exercise all powers of the Company to allot ‘Ordinary Shares’ of HK$0.0625 each in the capital of
the Company. 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 Compa ny’s next AGM to be held, following the date of
passing such resolution, whichever occurs first, save that the Company may before such expiry
make any offer or agreement which would or might require Ordinary Shares to be allotted after such
expiry, and that the Directors may allot Ordinary Shares in pursuance of such an offer or an
agreement as if such authority had not expired. This authority substitutes all subsisting authorities
to the extent unused.
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 resolution or on the conclusion of the Company ’s
next AGM to be held, following the date of passing such resolution, whichever occurs first, save
that the Company may before such expiry make any offer or agreement which would or might
require Ordinary Shares to be repurchased after such expiry, and that the Directors may buy back
Ordinary Shares in pursuance of such an offer or a n agreement as if such authority had not expired.
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
16 September 2013
Registered office:
8/F Lever Tech Centre,
69-71 King Yip Street
Kwun Tong, Kowloon,
Hong Kong.
UNIVISION ENGINEERING LIMITED - 71 - ANNUAL REPORT 2013
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 atte nd and, on a poll, to vote in place of the member.
2. A form of proxy is enclosed with this notice. To be valid, the form of proxy and any power of
attorney or other authority (if any) under which it is signed, or a notarized and certified copy of that
power of authority, must be lodged with the Company ’s registrars, c/o Computershare Investor
Services Plc., The Pavilions, Bridgwater Road, Bristol BS99 6ZY, not less than 48 hours before the
Annual General Meeting takes place.
3. Completion and return of a pro xy does not preclude a member from attending and voting at the
Annual General Meeting.
4. The Company pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 specifies
that only those shareholders registered in the Register of Members of
the Company as of 16
September 2013 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 determin ing the rights of any person to attend or vote in the Annual General
Meeting.
UNIVISION ENGINEERING LIMITED - 72 - ANNUAL REPORT 2013