UniVision Engineering Limited
Annual Report
Year ended 31 March 2014
UNIVISION ENGINEERING LIMITED
Annual Report
Year ended 31 March 2014
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 Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
Notice of Annual General Meeting
2
3
6
8
13
14
16
17
19
20
21
22
23
24
25
26
73
UNIVISION ENGINEERING LIMITED - 1 - ANNUAL REPORT 2014
BOARD OF DIRECTORS, OFFICERS
AND PROFESSIONAL ADVISERS
Board of Directors
Stephen Sin Mo KOO, Executive Chairman
Chun Pan WONG, Chief Executive Officer
Danny Kwok Fai YIP, Finance Director
Nicholas James LYTH, Non-Executive Director
Nominated Adviser and Broker
ZAI Corporate Finance Limited
1 Hobhouse Court,
Suffolk Street,
London SW1Y 4HH,
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)
Hong Kong and Shanghai Banking Corporation
Citibank, N.A.
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.
UK Depositary
Computershare Investor Services PLC
The Pavilions,
Bridgwater Road,
Bristol BS99 6ZZ,
UK
UNIVISION ENGINEERING LIMITED - 2 - ANNUAL REPORT 2014
CHAIRMAN’S STATEMENT
INTRODUCTION
I am pleased to report the Group’s audited results for the financial year ended 31 March 2014.
Revenue from the Group’s Security and Surveillance Systems business recorded 22% growth
compared with the last financial year. Though the growth of construction contract income of 25% was
encouraging, we remain focused on maintenance service that generates more stable cash flow to the
Group. We expect that the Hong Kong order book will continue to improve over the coming years
due to forthcoming large infrastructure projects.
As announced on 28 February 2014, the disposal of our share in the Zhongshan shopping mall
remains delayed by arbitration, however the buyers remain committed to complete the transaction.
The Board is always considering the best way to generate shareholder value from this asset and the
waiver of the loan due to the Company’s former major shareholder, Mayne Management Limited,
announced on 20 February 2014 enables the Company to explore other opportunities regarding the
project. We will keep the market informed of any progress.
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 £2.8m (2013: £92 K). The main reason
for the improvement is due to the Group recognising an exceptional gain from forgiveness of debt due
to its former major shareholder totalling £2.5m. Also, the overall business of the Group has improved.
The Group generated positive net cash of £548K from its operating activities in the current year
(2013: £48K). Net cash of £673K was used in financing activities in the current year (2013: positive
£34K) mainly for repayment of loan and dividends paid. The Group had cash and cash equivalents at
31 March 2014 of £0.4m (2013: £0.6m).
During the year under review, the relative weak closing rate at the year-end of the HK$ against
Sterling has led to a 9.9% depreciation in the GBP reporting amount in the Consolidated Statement of
Financial Position. All figures in the said Statement therefore needed to be adjusted for comparison
purposes. It also the reason for the significant loss of £985K on exchange differences arising on the
translation of foreign operations (2013: £616K).
Turnover in the year increased by 22% to £8.9m (2013: £7.3m). This increase was mainly due to the
inclusion of the construction contract income from the Kai Tak Cruise Terminal project and also
substantial growth in maintenance contract income in Hong Kong operation. The latter was
contributed by the increase in job orders from a major customer.
The revenue from the construction contracts division (excluding the E&M business) recorded a
growth of 21.6% and 27.3% respectively in Hong Kong and Taiwan even with keen market
competition. The performance of the Hong Kong maintenance business continues to be robust. It
recorded a 59% growth in revenue and improved its profit margin. Despite the maintenance contracts
significantly dropping by 45% in the Taiwan maintenance business, the Group’s maintenance
contracts still increased 8.4% overall compared with last year due to more large orders provided from
MTR Corporation Limited.
UNIVISION ENGINEERING LIMITED - 3 - ANNUAL REPORT 2014
CHAIRMAN’S STATEMENT
(Continued)
The Group’s Security and Surveillance Systems business provides relatively 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. Following the contract
award of the Kai Tak Cruise Terminal project, the Group was awarded a new construction contract by
JSI-Autotoll JV, as announced in 23 May 2014, for the Hong Kong-Zhuhai-Macao Bridge Project
with a contract value of HK$11.25m. This strengthens the Group’s position in the Security and
Surveillance Systems business in Hong Kong.
The Directors are pleased to continue to report there is a high level of demand for Security and
Surveillance Systems business from local government infrastructure projects and the extension of
MTR lines in Hong Kong. We anticipate that the Group’s turnover from this division will grow
steadily. With the quality of service and reputation in the business, management is confident on the
ability of the Group to compete in the highly competitive market.
Gross profit margin decreased to 26.4% (2013: 30.8%). The major reason for this decrease was the
reduction in gross profit from 30% to 22% in the Group’s construction contracts due to increased
material costs, wages and sub-contracting charges during the year. In addition, Gross Profit decreased
from 31% to 18% in the Group’s product sales business due to lower pricing in the competitive
market. More competitive pricing did result in a 88% growth in turnover for product sales.
The increase in Gross Profit from 32% to 35% in the Group’s maintenance contracts was mainly
contributed by the Hong Kong maintenance business. This compensated for the significant drop of
gross margin in the Taiwan maintenance contracts in this current year which was caused by the
reduction of expenditure budget by a local major customer.
Administration expenses remain constant at £1.7m (2013: £1.7m) mainly due to effective cost control.
Finance costs were decreased during the year due to reduced borrowing from a bank.
The outstanding interest- free loan of US$3.95m due to Mayne Management Limited, the former
shareholder of the Group, was waived in this current year. It generated a gain from forgiveness of debt
of £2.496m. By waiving the loan, it improves the current ratio to 2.57 (2013: 1.81), and the debt to
equity ratio to 0.04 (2013: 0.38). The Group generated £2.9m net profit for this current year (2013:
184K) by exclusion of the gain.
No significant capital investment occurred in the current year.
Profit before Interest and Tax (PBIT) was £2.9m (2013: £0.3m). Net profit before income tax was
£2.9m (2013: £0.2m). Basic earning per share for this year was 0.74p (2013: 0.02p).
The directors propose the payment of a final dividend of 0.31 HK cents (gross) per share for the
financial year ended 31 March, 2014 (2013: 0.78 HK cents). The dividend timetable is as follows:
Ex date
Record date.
Payment date
17 September 2014
19 September 2014
10 October 2014
The dividend is subject to approval by shareholders at the Annual General Meeting and has not been
included as a liability in the financial statements.
UNIVISION ENGINEERING LIMITED - 4 - ANNUAL REPORT 2014
CHAIRMAN’S STATEMENT
(Continued)
BUSINESS REVIEW
According to Tech Navio's analysts forecast, the Global IP Video Surveillance market will grow at a
CAGR of 24.9% between 2013 to 2018. One of the key factors contributing to this market growth is
the increase in concern over security and safety as well as the need for high-quality images, thereby
leading to a replacement of older surveillance systems.
OnVIF and PSIA are expected to bring a standard in open markets in coming years. Apart from
megapixel resolution network security cameras, which are predicted to out-sell standard resolution
network security cameras, High Definition Serial Digital Interface (HD-SDI) cameras, which provides
high definition real time and no latency video via coaxial cable, are becoming another popular choice.
PROSPECTS
The Board remains confident of the prospects for Univision with the strong pipeline of infrastructure
projects in Hong Kong.
The Board expects that the growing demand for its Network and High Definition Security and
Surveillance products will enable the Group to continue to prosper in the Hong Kong and Taiwanese
markets.
The possibility of de-merging the E&M business of Leader Smart is also under evaluation, as the
Board considers this a different sector to the core Security and Surveillance business and little value is
reflected in the Company’s market capitalisation whilst the sale of the Zhongshan shopping mall
remains subject to arbitration.
Finally, on behalf of the Board, I would like to thank our customers, suppliers and shareholders for
their continued support of UniVision. I would also like to acknowledge the hard work of the
management and all the staff for their contribution and dedication to the Group.
MR. STEPHEN SIN MO KOO
EXECUTIVE CHAIRMAN
5 September 2014
UNIVISION ENGINEERING LIMITED - 5 - ANNUAL REPORT 2014
DIRECTORS AND SENIOR
MANAGEMENT’S BIOGRAPHIES
DIRECTORS’ BIOGRAPHIES
Nicholas James LYTH – Non-executive Director (aged 48)
Mr. Lyth is a qualified chartered management accountant and has over 14 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 57)
Mr. Koo joined UniVision in 1998 and was appointed as a Director on 3 March 2003. He is
responsible for overall strategic planning of our Group. He holds both a Bachelor Degree from the
University of Technology, Sydney, and a Masters Degree in Business from the Royal Melbourne
Institute of Technology in Australia. He is the Director of Up Sky Investments Limited, the Group’s
ultimate parent company. He is a Fellow of the Institute of Certified Public Accountants of Australia.
Chun Pan WONG – Chief Executive Officer (aged 54)
Mr. Wong joined UniVision in 1991 and was appointed as a Director on 25 March 1992. He holds a
Master Degree in Religious Studies in Chinese University of Hong Kong and a Bachelor Degree in
Computer Science from the University of Edinburgh, Scotland, and over 18 years experience in the
surveillance industry. Mr. Wong is responsible for formulating and overseeing the implementation of
UniVision’s business development strategies and for the management of the Company’s operations.
He is also responsible for the development of UniVision’s state of the art CCTV control and
monitoring systems and smart card access systems.
Danny Kwok Fai YIP –Finance Director (aged 50)
Mr. Yip was appointed as Finance Director on 18 September 2007. He was the Financial Controller
for the Group before the appointment. Mr. Yip obtained a Master of Corporate Finance degree from
The Hong Kong Polytechnic University and a Bachelor of Commerce (Accounting) degree from The
Curtin University of Technology, Australia. Before joining the Group, Mr. Yip was the Accounting
Manager of Nissin Food Group, the leading instant noodle manufacturing MNC. Mr. Yip has over 20
years experience in finance and accounting in different industries. He is a fellow member of the
Association of Chartered Certified Accountants and a member of Hong Kong Institute of Certified
Public Accountants. He also acts as Company Secretary for the Corporation.
UNIVISION ENGINEERING LIMITED - 6 - ANNUAL REPORT 2014
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 management of UniVision’s Project
and Maintenance Division. Mr. Chan holds a Bachelor of Engineering degree in Industrial and
Manufacturing System Engineering from The University of Hong Kong.
Peter Yip Tak CHAN – Director of Sales and Marketing (aged 50)
Mr. Chan joined UniVision in 1995. He holds a Degree in Computing from the University of
Northwest Missouri and has over 10 years experience in sales and project management. He is
responsible for the management of UniVision’s Sales and Marketing Division.
UNIVISION ENGINEERING LIMITED - 7 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
DIRECTORS’ REPORT
The Directors have pleasure in presenting their annual report together with the audited financial
statements of the Group and the Company for the year ended 31 March 2014.
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 2014 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
statement of financial position on page 20, respectively.
The Group’s and the Company’s changes in shareholders’ equity for the year ended 31 March 2014
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 2014 is set out in the
consolidated and the Company’s statement of cash flows on pages 24 to 25.
Key Performance Indicators (KPI)
Current Ratio:
Current Assets / Current Liabilities
Average Collection Period :
Trade receivables (net of allowance
for doubtful debts) / Sales per day
Inventory Turnover :
Cost of sales / Inventories
Gross profit Margin :
Gross profit / Sales
Debt to Equity Ratio :
Debt / Equity
Quick Ratio :
(Current Assets –Inventories)/
Current Liabilities
2014
2013
2.6
1.8
39 days
31 days
6.2
26%
0.04
4.5
31%
0.38
2.4
1.7
:
:
:
:
:
:
UNIVISION ENGINEERING LIMITED - 8 - ANNUAL REPORT 2014
DIRECTORS’ REPORT
(Continued)
Share Capital and Reserves
Details of the movements in share capital are set out in note 27 on page 68.
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 0.31 HK cents (gross) per share for the
financial year ended 31 March 2014.
Plant and Equipment
Details of the movements in plant and equipment are set out in note 16 on pages 58 to 59.
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 ( resigned on 31 December 2013)
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
Mr. Nicholas James LYTH and Mr. Chun Pan WONG 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 2014
Stephen Sin Mo KOO
Chun Hung WONG
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
278,203,700*
-
-
-
-
UNIVISION ENGINEERING LIMITED - 9 - ANNUAL REPORT 2014
DIRECTORS’ REPORT
(Continued)
* 78,744,000 ordinary shares are registered under the name of Up Sky Investments Limited which is
an investment holding company incorporated under the laws of the British Virgin Islands and is
wholly-owned by Mr. Stephen Sin Mo KOO. Mr. Stephen Sin Mo KOO, is deemed to be interested
in all the ordinary shares registered in the name of Up Sky Investments Limited.
Following the Share Transaction on 8 July 2011, the entire stake of UniVision Holdings Limited (it
holds 183,736,000 shares of the Company) was transferred to Up Sky Investments Limited, a
company that is wholly owned by Mr. Stephen Koo. He is also interested in 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 26 August 2014, the Directors had been informed of the following companies that held 3% or
more of the Company’s issued ordinary share capital:
Number of ordinary shares % of total issued share capital
UniVision Holdings Limited (1)
183,736,000
Up Sky Investments Limited (2)
Beaufort Nominees Limited
Hargreaves Lansdown (Nominees)
Limited
TD Direct Investing Nominees
(Europe) Limited
78,744,000
24,109,498
22,680,258
12,895,344
47.9
20.5
6.3
5.9
3.4
UNIVISION ENGINEERING LIMITED - 10 - ANNUAL REPORT 2014
DIRECTORS’ REPORT
(Continued)
(1) UniVision Holdings Limited is an investment holding company incorporated under the laws of the
British Virgin Islands and was formerly owned by Mayne Management Limited. Up Sky Investments
Limited acquired the entire stake from Mayne Management Limited on 8 July 2011 and became the
major shareholder.
(2) Up Sky Investments Limited is an investment holding company incorporated under the laws of the
British Virgin Islands and is wholly-owned by Mr. Stephen Sin Mo KOO.
Payments to Creditors
The Group does not follow any code or standard on payment practice but instead the Group policy is
to pay all creditors in accordance with agreed terms of business.
Political and Charitable Donations
During the year the Company made no political or charitable contributions (2013: Nil).
Employees
The Group values staff involvement at all levels of operations, and uses various means to train, inform
and consult the employees. The Group encourages the management to discuss regularly with the
employees on both corporate and individual matters and discloses information to them that will
increase their awareness of the financial and economic factors affecting the Group.
The Group recognises its obligations to provide a fair consideration on all vacancies towards people
with disability and to ensure that such persons are not discriminated against on the grounds of their
disability. For those employees who become disabled during their employment period, the Group will
make every effort to ensure that their employment will continue and that sufficient training is
arranged.
Annual General Meeting
The Annual General Meeting of the Company will be held at UniVision Engineering Limited, 8/F
Lever Tech Centre, 69-71 King Yip Street, Kwun Tong, Kowloon, Hong Kong, on 3 October 2014 at
5:00 p.m. The Notice of Meeting appears on page 73.
Annual Report
The annual report for the year ended 31 March 2014 will be uploaded on the Company’s website
www.uvel.com on 5 September, 2014 and the hard copy will be sent to shareholders by our
Registrars, Computershare Investor Services (Jersey) Limited.
UNIVISION ENGINEERING LIMITED - 11 - ANNUAL REPORT 2014
DIRECTORS’ REPORT
(Continued)
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
5 September 2014
UNIVISION ENGINEERING LIMITED - 12 - ANNUAL REPORT 2014
REMUNERATION REPORT
The Remuneration Committee presents this report to shareholders on behalf of the Board.
Membership of Remuneration Committee
The Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director)
and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James
LYTH.
Policy Statement
The Remuneration Committee sets the remuneration and all other terms of employment of the
Executive Directors with a vision to provide a package which is suitable for the responsibilities
involved. The remuneration of the Executive Directors is determined by the Remuneration
Committee having regard to the performance and experience of individuals, the overall performance
of the Group and market trends.
Directors’ Remuneration
Details of individual director’s remuneration for the year are set out in the table below:
Salary and
fees
£
Pension
scheme
contribution
£
Bonus
£
2014
Total
£
2013
Total
£
Executive Directors
Stephen Sin Mo KOO
Chun Pan WONG
Chun Hung WONG
Danny Kwok Fai YIP
-
44,813
43,767
38,856
-
1,216
911
1,216
-
4,289
4,863
3,513
-
50,318
49,541
43,585
39,729
46,582
62,685
41,728
Non-executive Director
Nicholas James LYTH
11,747
-
-
11,671
11,747
Directors’ Interests in Contracts and Interests in Shares
Details of Directors’ Interests in Contracts and Interests in Shares are given in the Directors’ Report.
UNIVISION ENGINEERING LIMITED - 13 - ANNUAL REPORT 2014
REPORT ON CORPORATE GOVERNANCE
Introduction
The Directors believe that their foremost function is to generate continuous profits for the Company’s
investors, and that this should be achieved by a policy of high standards of corporate governance,
integrity and ethics. As the Company is listed on AIM and not subject to the Listing Rules of the UK
Listing Authority, it is not officially required to comply with the provisions detailed in the Combined
Code on Corporate Governance. However, it is the intention of the Board to manage the Company’s
and Group’s affairs in accordance with this Code, in so far as is practical and appropriate for a public
company of this size and complexity. The following are a few examples on how the Directors have
applied the principles of good corporate governance to manage the Company throughout the year.
Board of Directors
The Board directs and controls the Company and is responsible for strategy and operating
performance. It meets regularly throughout the year and has adopted a schedule of matters
specifically reserved for its decision.
All Directors are elected by shareholders at the first opportunity after their initial appointment to the
Board and to be re-elected thereafter at intervals of not more than three years. Biographical
information on all the Directors is listed in the Directors’ and Senior Management’s Biographies
section to the annual report, which may help the shareholders to make a decision at the time of re-
election.
Upon their appointments, the Directors are offered an opportunity to request information and training
relevant to their legal and other duties. They are also given written guidelines and rules defining their
responsibilities within an AIM listed company.
The Board considers that all Non-executive Directors are independent of management and day to day
operation, and free from any commercial relationship with the Company. These Non-executive
Directors do not participate in any of the Company’s pension schemes or bonuses. The Chairman of
the Audit and Remuneration Committees is a Non-executive Director.
Nomination Committee
As the Board of Directors of the Company is relatively small, there is no separate Nomination
Committee. All nominations to the Board are considered by all of the Directors.
Audit Committee
Our Audit Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and Mr.
Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH. The
Chairman of the Audit Committee has full discretion to invite any Executive Directors to attend its
meetings. The Audit Committee meets not less than twice per annum.
The responsibilities of the Committee are to:
- monitor the quality of the overall internal control system of all financial matters;
-
-
-
-
-
-
review the Company’s Accounting Policies and ensure compliance with accounting standards;
ensure that the financial performance of the Company is properly measured and reported on;
consider the appointment/re-appointment of the external auditor;
review the conduct of the audit and discuss the audit fees;
review reports from the Auditors relating to the Company’s accounting and internal controls;
to ensure the Company complies with the AIM Rules.
UNIVISION ENGINEERING LIMITED - 14 - ANNUAL REPORT 2014
REPORT ON CORPORATE GOVERNANCE
(Continued)
Remuneration Committee
Our Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director)
and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James
LYTH. The Remuneration Committee meets as required.
The responsibilities of the Committee are to:
-
determine the specific remuneration package for each Director including Director’s fees, salaries,
allowances, bonuses, options, benefits-in-kind; and
seek professional advice, including comparison with similar businesses, in order to correctly fulfil
its duties, as the Committee deems appropriate.
-
In discharging its functions, the Committee may obtain independent external legal and other
professional advices as it deems necessary. The expense of such advice shall be borne by the
Company.
Internal Control
The Board of Directors is responsible for ensuring that the Company maintains an internal financial
control system with appropriate monitoring procedures for all Group companies. The purpose of this
system is to safeguard Company assets, maintain proper accounting records, and 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 every effort to
ensure that all price-sensitive information is released publicly and immediately. If an immediate
announcement is not possible, the Company will try to publicize the information at the earliest time
possible to ensure that the shareholders and the public have fair access to it.
UNIVISION ENGINEERING LIMITED - 15 - ANNUAL REPORT 2014
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Company will send the Annual Report and the notice of the Annual General Meeting (AGM) to
all its shareholders. This notice is also made available on RNS. The Company recognises the
importance of the shareholders’ views and encourages them to attend the AGMs where they can share
their opinions and raise direct queries and concerns towards the Directors, including the chairperson
of each of the Board Committees. The shareholders are also welcomed to discuss any issues on an
informal basis at the conclusion of the AGMs.
The Directors are responsible for preparing the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
The Directors are responsible for preparing financial statements for each financial year which give a
true and fair view of the state of affairs of the Group and the Company and of the profit or loss for
that year.
In preparing those financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any
material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group and the Company will continue in business.
The Directors are responsible for keeping proper accounting records that disclose with reasonable
accuracy at any time the financial position of the Company. They have general responsibility for
taking such steps as are reasonably available to them to safeguard the assets of the Group and the
Company to prevent and detect fraud and other irregularities.
UNIVISION ENGINEERING LIMITED - 16 - ANNUAL REPORT 2014
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(Incorporated in Hong Kong with limited liability)
We have audited the financial statements of UniVision Engineering Limited (the “Company”) and its
subsidiaries (collectively referred to as the “Group”) set out on pages 19 to 72, which comprise the
consolidated and the Company’s statement of financial position as at 31 March 2014, and the
consolidated statement of comprehensive income, the consolidated and the Company’s statement of
changes in equity and the consolidated and the Company’s statement of cash flows for the year then
ended, and a summary of significant accounting policies and other explanatory notes.
This report is made solely to the Company’s shareholders, as a body, in compliance with the Alternative
Investment Market Rules (“AIM Rules”) for companies as published by the London Stock Exchange plc.
Our 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.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation of financial statements that give a true and fair view in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
UNIVISION ENGINEERING LIMITED - 17 - ANNUAL REPORT 2014
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(Incorporated in Hong Kong with limited liability)
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company and the Group as at 31 March 2014 and their financial performance and cash flows for the year
then ended, in accordance with the International Financial Reporting Standards.
HKCMCPA Company Limited
Certified Public Accountants
PANG KING SZE, RUFINA
Practising Certificate number P05228
Hong Kong, China
5 September 2014
UNIVISION ENGINEERING LIMITED - 18 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2014
Revenue
Cost of sales
Gross profit
Other income
Other gains and (loss)
Selling and distribution expenses
Administrative expenses
Finance costs
Notes
2014
£
2013
£
7(a)
8,925,960
7,313,425
10
(6,573,248)
(5,060,805)
2,352,712
2,252,620
8
9
10
10
12
10,518
2,398,545
(137,963)
(1,684,796)
(20,787)
10,928
(181,301)
(106,807)
(1,696,030)
(37,727)
Profit before income tax
2,918,229
241,683
Income tax expense
Profit for the year
13
(13,499)
(57,278)
2,904,730
184,405
Other comprehensive (loss)/income, net of tax
Item that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations
(985,245)
615,952
Total comprehensive income for the year
1,919,485
800,357
Profit attributable to :
Equity shareholders of the Company
Non-controlling interests
Total comprehensive income attributable to:
Equity shareholders of the Company
Non-controlling interests
Earnings per share
Basic
Diluted
All revenues are from continuing operations.
2,820,587
84,143
92,143
92,262
2,904,730
184,405
1,870,597
48,888
697,526
102,831
1,919,485
800,357
14
14
0.74p
0.74p
0.02p
0.02p
UNIVISION ENGINEERING LIMITED - 19 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2014
ASSETS
Non-current assets
Plant and equipment
Goodwill
Trade and other receivables
Total non-current assets
Current assets
Inventories
Trade and other receivables
Bank deposits
Cash and cash equivalents
Total current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Current tax liability
Loan and borrowings
Obligation under finance lease
Total current liabilities
Non-current liability
Obligation under finance lease
Total liabilities
Equity
Share capital
Reserves
Notes
2014
£
2013
£
16
17
21
19
21
22
22
43,886
25,830
1,324,331
1,394,047
1,059,065
14,299,649
223,865
379,860
86,833
25,830
1,436,027
1,548,690
1,134,747
15,706,652
246,008
585,046
15,962,439
17,672,453
17,356,486
19,221,143
23
24(a)
25
26
4,544,953
1,226,973
440,582
6,844
4,866,691
1,350,264
3,528,205
7,522
6,219,352
9,752,682
26
27
7,415
15,669
6,226,767
9,768,351
1,697,617
9,098,833
1,697,617
7,470,794
Equity attributable to equity shareholders of the Company
10,796,450
9,168,411
Non-controlling interests
Total equity
Total liabilities and equity
333,269
284,381
11,129,719
9,452,792
17,356,486
19,221,143
The financial statements on pages 19 to 72 were authorised for issue by the board of directors on 5
September 2014 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Pan WONG, Director
UNIVISION ENGINEERING LIMITED - 20 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2014
ASSETS
Non-current assets
Plant and equipment
Interests in subsidiaries
Total non-current assets
Current assets
Inventories
Trade and other receivables
Bank deposits
Cash and cash equivalents
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
Notes
2014
£
2013
£
16
18
19
21
22
22
23
25
26
26
27
17,297
2,767,277
33,521
3,093,724
2,784,574
3,127,245
744,381
1,868,816
223,865
160,210
803,163
1,437,131
246,008
456,758
2,997,272
2,943,060
5,781,846
6,070,305
1,444,776
-
6,844
1,369,206
2,621,723
7,522
1,451,620
3,998,451
7,415
15,669
1,459,035
4,014,120
1,697,617
2,625,194
1,697,617
358,568
4,322,811
2,056,185
5,781,846
6,070,305
The financial statements on pages 19 to 72 were authorised for issue by the board of directors on 5
September 2014 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Pan WONG, Director
UNIVISION ENGINEERING LIMITED - 21 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2014
Attributable to the equity shareholders of the Company
Share
capital
£
Share
premium
£
(Note 1)
Retained
earnings
£
Special
capital
reserve “A”
£
(Note 2)
Special
capital
reserve “B”
£
(Note 3)
Statutory
surplus
reserves
£
Translation
reserve
£
Sub-total
£
Non-
controlling
interest
£
Total
equity
£
Balance at 1 April 2012
1,697,617 2,192,640 2,265,728
155,876
143,439
-
2,015,585
8,470,885
214,198
8,685,083
Comprehensive income:
Profit or loss
Other comprehensive income:
Exchange difference arising on translation of
foreign operations
Total other comprehensive income for the year,
net of tax
Total comprehensive income
Dividend distributed by a subsidiary
Transfer to statutory surplus reserves
Total transactions with owners, recognised
directly in equity
-
-
92,143
-
-
-
-
-
-
-
-
-
-
-
-
-
92,143
-
(7,927)
-
(7,927)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,927
7,927
-
92,143
92,262
184,405
605,383
605,383
10,569
615,952
605,383
605,383
10,569
615,952
605,383
697,526
102,831
800,357
-
-
-
-
-
-
(32,648)
(32,648)
-
-
(32,648)
(32,648)
Balance 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
Comprehensive income:
Profit or loss
-
- 2,820,587
Other comprehensive loss:
Exchange difference arising on translation of
foreign operations
Total other comprehensive loss for the year, net of
tax
Total comprehensive income
Dividend paid in respect of 2013 year
Total transactions with owners, recognised
directly in equity
-
-
-
-
-
-
-
-
2,820,587
-
(242,558)
-
(242,558)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,820,587
84,143
2,904,730
(949,990)
(949,990)
(35,255)
(985,245)
(949,990)
(949,990)
(35,255)
(985,245)
(949,990)
1,870,597
48,888
1,919,485
-
-
(242,558)
(242,558)
-
-
(242,558)
(242,558)
Balance at 31 March 2014
1,697,617 2,192,640 4,927,973
155,876
143,439
7,927
1,670,978
10,796,450
333,269
11,129,719
The currency translation from Hong Kong Dollars (“HK$”) to the presentation currency of Sterling Pound (“£”) used in the
financial statements has no impact on the available distributable reserves of the Company at 31 March 2014.
Notes:
1.
Share premium
The Company may by resolution reduce the share premium account in any manner authorised and
subject to any conditions prescribed by law.
2.
Special capital reserve “A”
Pursuant to the Order of the High Court dated 20 November 2004, any future recoveries of the
Company’s accumulated provision for obsolete inventories and provision for bad debts amounting to
HK$1,935,002 and HK$3,592,540 respectively will be credited to non-distributable special capital
reserve “A” account.
3.
Special capital reserve “B”
By a special resolution passed on 30 July 2004 and Order of the High Court dated 20 November
2004, the authorised and issued capital of the Company was reduced from HK$159,245,000 divided
into 31,849 ordinary shares of HK$5,000 each to HK$16,405,000 divided into 3,281 ordinary shares
of HK$5,000 each. The reduction of capital was effected by cancellation of 28,568 ordinary shares of
HK$5,000 each in the issued and paid up share capital of the Company. The Company established a
non-distributable special capital reserve “B” account into which HK$2,071,307 was credited as a
result of the capital reduction.
UNIVISION ENGINEERING LIMITED - 22 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2014
Attributable to equity shareholders of the Company
Share
capital
£
Share
premium
£
Accumulated
losses
£
Special
capital
reserve “A”
£
Special
capital
reserve “B”
£
Translation
reserve
£
Total
equity
£
Balance at 1 April 2012
1,697,617
2,192,640
(2,999,464)
155,876
143,439
499,225
1,689,333
Comprehensive income:
Profit or loss
Other comprehensive income:
Exchange difference arising on translation of
foreign operations
Total other comprehensive income for the
year, net of tax
Total comprehensive income
-
-
-
-
-
-
-
-
257,598
-
-
257,598
-
-
-
-
-
-
-
-
-
257,598
109,254
109,254
109,254
109,254
109,254
366,852
Balance at 31 March 2013
1,697,617
2,192,640
(2,741,866)
155,876
143,439
608,479
2,056,185
Comprehensive income:
Profit or loss
Other comprehensive loss:
Exchange difference arising on translation of
foreign operations
Total other comprehensive loss for the year,
net of tax
Total comprehensive income
Dividend paid in respect of 2013 year
Total transactions with owners, recognised
directly in equity
-
-
-
-
-
-
-
-
-
-
-
-
2,807,923
-
-
2,807,923
(242,558)
(242,558)
-
-
-
-
-
-
-
-
-
-
-
-
-
2,807,923
(298,739)
(298,739)
(298,739)
(298,739)
(298,739)
2,509,184
-
-
(242,558)
(242,558)
Balance at 31 March 2014
1,697,617
2,192,640
(176,501)
155,876
143,439
309,740
4,322,811
UNIVISION ENGINEERING LIMITED - 23 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2014
Notes
2014
£
2013
£
Cash flows from operating activities
Profit before income tax
2,918,229
241,683
Adjustments for:
Interest expense
Interest income
Depreciation of plant and equipment
Allowance for obsolete inventories
Write-off of inventories
Impairment loss recognised on trade and other receivables
Loss/(gain) on disposal of plant and equipment
Gain from forgiveness of debt
12
8
16
19
9
9
9
9, 25(b)
20,787
(1,293)
49,086
9,660
47,444
99,907
2,675
(2,496,353)
37,726
(1,516)
65,904
27,585
-
188,148
(510)
-
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
650,142
559,020
(84,614)
(125,309)
121,747
561,966
(13,360)
(13,029)
(506,618)
35,950
75,323
(27,793)
Net cash generated from operating activities
548,606
47,530
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Proceeds from disposal of plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Dividend paid to shareholders of the Company
Dividend paid to non-controlling interests
Repayment of finance lease liabilities
Proceed from loan and borrowings
Repayment of loan and borrowings
Net cash (used in)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
8
12
15
1,293
(16,002)
365
1,516
(38,548)
510
(14,344)
(36,522)
(20,787)
(242,558)
-
(7,162)
-
(402,126)
(672,633)
(138,371)
(37,726)
-
(32,648)
(8,175)
112,060
-
33,511
44,519
Cash and cash equivalents at beginning of year
585,046
504,323
Effect of foreign exchange rate changes
(66,815)
36,204
Cash and cash equivalents at end of year
22
379,860
585,046
UNIVISION ENGINEERING LIMITED - 24 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 March 2014
Cash flows from operating activities
Profit before income tax
Adjustments for:
Interest expense
Interest income
Depreciation of plant and equipment
Dividend income received from a subsidiary
Write-off of inventories
Loss on disposal of plant and equipment
Gain from forgiveness of debt
Changes in operating assets and liabilities:
Increase in inventories
Increase in trade and other receivables
Decrease/(increase) in amounts due from subsidiaries
Increase/(decrease) in trade and other payables
Net cash used in operating activities
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 (used in)/generated from investing activities
Cash flows from financing activities
Interest paid
Dividend paid to shareholders of the Company
Repayment of finance lease liabilities
Repayment of loan and borrowings
Notes
2014
£
2013
£
2,807,923
257,598
1,164
(986)
16,494
-
47,444
2,675
(2,496,353)
16
9
9
9, 25(b)
1,361
(1,275)
15,081
(35,631)
-
-
-
378,361
237,134
(61,579)
(587,051)
50,213
208,025
(2,359)
(87,899)
(111,362)
(43,944)
(12,031)
(8,430)
986
(5,715)
-
365
(4,364)
(1,164)
(242,558)
(7,162)
-
1,275
(9,894)
35,631
-
27,012
(1,361)
-
(8,175)
(16,316)
Net cash used in financing activities
(250,884)
(25,852)
Net decrease in cash and cash equivalents
(267,279)
(7,270)
Cash and cash equivalents at beginning of year
456,758
432,672
Effect of foreign exchange rate changes
(29,269)
31,356
Cash and cash equivalents at end of year
22
160,210
456,758
UNIVISION ENGINEERING LIMITED - 25 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
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 financial statements are presented in Sterling Pound (“£”), which is the presentation currency of
the Company.
The Company acts as an investment holding company. The Company and its subsidiaries (hereinafter
collectively referred to as the “Group”) are engaged in the supply, design, installation and maintenance
of closed circuit television and surveillance systems, 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 18 to the financial statements.
2.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”).
The financial statements have been prepared under the historical cost convention basis, as modified by
the revaluation of financial assets and liabilities at fair value through profit or loss.
The preparation of financial statements in conformity with IFRSs requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of
assets, liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.
Judgements made by management in the application of IFRSs that have significant effect on the
financial statements and major sources of estimation uncertainty are discussed in note 4 in the
financial statements.
UNIVISION ENGINEERING LIMITED - 26 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
3.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING
STANDARDS (“IFRSs”)
(a) New and revised IFRSs that have been issued and effective
The following standards have been adopted by the Group and the Company for the first time for the
current financial period. Of these, the following developments are relevant to the Group and the
Company’s financial statements:
- Amendments to IAS 1, “Financial statement presentation” regarding other comprehensive
income. The main change resulting from these amendments is a requirement for entities to group
items presented in ‘other comprehensive income’ on the basis of whether they are potentially
reclassifiable to profit or loss subsequently (reclassification adjustment). The presentation of
other comprehensive income in the financial statements has been modified accordingly.
-
-
-
-
IAS 19 “Employment Benefits” eliminate the option to defer the recognition of gains and losses,
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.
IFRS 10 “Consolidated Financial Statements” builds on existing principles by identifying the
concept of control as the determining factor in whether an entity should be included within the
consolidated financial statements of the parent company. The standard provides additional
guidance to assist in the determination of control where this is difficult to assess. The directors of
the Company have assessed the control in respect of its investees under the new definition in
IFRS 10 and concluded that the application of this standard would have no material impact on the
Group as all subsidiaries within the Group satisfy the requirement of control under IFRS 10 as at
1 April 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 addresses inconsistencies in the reporting of joint arrangements
by requiring a single method to account for interests in jointly controlled entities. The Group and
the Company concluded that there were no joint arrangements within the Group and the adoption
of this standard does not have any material impact on the financial position and the result of the
Group and the Company.
IFRS 12 “Disclosure of Interests 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. In general, the
application of IFRS 12 has resulted in more extensive disclosures in the consolidated financial
statements (please see note 18).
UNIVISION ENGINEERING LIMITED - 27 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
3.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING
STANDARDS (“IFRSs”) (CONTINUED)
(a) New and revised IFRSs that have been issued and effective (continued)
-
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. Other than the additional disclosures, the application of HKFRS 13
has not had any material impact on the amounts recognised in the consolidated financial
statements.
-
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).
(b) New and revised IFRSs that have been issued but are not yet effective
The following new and revised IFRSs, potentially relevant to the Company’s operations, have been
issued and are mandatory for adoption by the Company for accounting periods beginning on or after 1
January 2014 or later periods. However, the Company has not early adopted them.
• IFRS 9 “Financial instruments”
• Amendments to IAS 32 “Offsetting Financial Assets and Financial Liabilities”
• Amendments to IAS 36 “Recoverable amount disclosures for non-financial assets”
• Amendments to IAS 39 “Novation of derivatives and continuation of hedge accounting”
The Company has not applied any new or revised IFRSs that are not yet effective for the current
accounting period.
UNIVISION ENGINEERING LIMITED - 28 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of consolidation
(a)
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity.
Subsidiaries are consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases. Inter-company transactions, balances and unrealised
gains on transactions between group companies are eliminated. Unrealised losses are also eliminated.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
The Group uses the acquisition method of accounting to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred,
the liabilities incurred and the equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisitions related costs are expensed as incurred. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at
the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling
interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the
acquiree’s net assets.
Acquisition-related costs are expensed as incurred.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for
as equity transactions, whereby adjustments are made to the amounts of controlling and non-
controlling interests within consolidated equity to reflect the change in relative interests, but no
adjustments are made to goodwill and no gain or loss is recognised.
When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in
that subsidiary, with a resulting gain or loss being recognised in profit or loss. Any interest retained in
that former subsidiary at the date when control is lost is recognised at fair value and this amount is
regarded as the fair value on initial recognition of a financial asset.
(b) Separate financial statements
In the individual Company’s statement of financial position, interests in subsidiaries are accounted for
at cost less impairment loss, or measured at fair value through profit or loss. Cost includes direct
attributable costs of investment. The results of subsidiaries are accounted for by the Company on the
basis of dividend received and receivable.
Impairment testing of the interests in subsidiaries is required upon receiving a dividend from these
investments if the dividend exceeds the total comprehensive income of the subsidiary of the period the
dividend declared or if the carrying amount of investment in the separate financial statements exceeds
the carrying amount in the consolidated financial statements of the investee’s net assets including
goodwill.
UNIVISION ENGINEERING LIMITED - 29 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.1 Basis of consolidation (continued)
(c) Non-controlling interests
Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to
the Company, and in respect of which the Group has not agreed any additional terms with the holders
of those interests which would result in the Group as a whole having a contractual obligation in respect
of those interests that meets the definition of a financial liability. For each business combination, the
Group can elect to measure any non-controlling interests either at fair value or at the non-controlling
interest’s proportionate share of the subsidiary’s net identifiable assets.
Non-controlling interests are presented in the consolidated statement of financial position within
equity, separately from equity attributable to the equity shareholders of the Company. Non-controlling
interests in the results of the Group are presented on the face of the consolidated statement of
comprehensive income as an allocation of the total profit or loss and total comprehensive income for
the year between non-controlling interests and the equity shareholders of the Company.
4.2 Segment reporting
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incurs expenses, including revenues and expenses that relate to transactions
with other components of the Group. Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker. The chief operating decision-maker
is responsible for allocating resources and assessing performance of the operating segments.
4.3 Foreign currency
(a)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (“the functional
currency”). The consolidated and company financial statements are presented in Sterling Pound (“£”),
which is the Group’s presentation currency. As the Company is listed on AIM, the directors consider
that this presentation is more useful for its current and potential investors.
The functional currency of the Group’s entity is summarised as follows:
1.
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 - 30 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.3 Foreign currency (continued)
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
the statement of comprehensive income, except when deferred in other comprehensive income as
qualifying cash flow hedges and qualifying net investment hedges.
Foreign exchange gains and losses that relate to borrowings and cash and bank balances are presented
in the statement of comprehensive income within “finance income or cost”. All other foreign exchange
gains and losses are presented in the statement of comprehensive income within “administrative
expense” or “other income”.
Changes in the fair value of monetary securities denominated in foreign currency classified as
available for sale are analysed between translation differences resulting from changes in the amortised
cost of the security and other changes in the carrying amount of the security. Translation differences in
respect of changes in amortised cost are recognised in profit or loss, and other changes in carrying
amount are recognised in other comprehensive income.
Translation differences on non-monetary financial assets and liabilities such as equities held at fair
value through profit or loss are recognised in profit or loss as part of the fair value gain or loss.
Translation differences on non-monetary financial assets, such as equities classified as available for
sale, are included in other comprehensive income.
(c) Group companies
The results and financial position of all the group entities (none of which has the currency of a hyper-
inflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
(i)
(ii)
assets and liabilities for each statement of financial position presented are translated at the
closing rate at the date of that statement of financial position;
income and expenses for each statement of comprehensive income are translated at average
exchange rates (unless this average is not a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which case income and expenses are translated at
the rate on the dates of the transactions); and
(iii) all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign
operations, and of loan and borrowings and other currency instruments designated as hedges of such
investments, are taken to other comprehensive income. When a foreign operation is partially disposed
of or sold, exchange differences that were recorded in equity are recognised in the statement of
comprehensive income as part of the gain or loss on sale. Goodwill and fair value adjustments arising
on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
UNIVISION ENGINEERING LIMITED - 31 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
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 impairment loss. The cost of an asset comprises its purchase price and
any directly attributable costs of bringing the asset to working condition for its intended use.
On disposal of an item of plant and equipment, the difference between the net disposal proceeds and
its carrying amount is taken to profit or loss.
Depreciation is calculated using the straight-line method to allocate their depreciable amounts over the
estimated useful lives as follows:
Furniture and fixtures
Computer equipment
Motor vehicles
Research assets
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 when incurred.
4.5 Goodwill
Goodwill represents the excess of:
(a)
the aggregate of the fair value of the consideration transferred, the amount of any non-
controlling interest in the acquiree and the fair value of the Group’s previously held equity
interest in the acquiree; over
(b)
the net fair value of the acquiree’s identifiable assets and liabilities measured as at the
acquisition date.
When (b) is greater than (a), then this excess is recognised immediately in profit or loss as a gain on a
bargain purchase.
Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business
combination is allocated to each cash-generating unit, or groups of cash generating units, that is
expected to benefit from the synergies of the combination and is tested annually for impairment. On
disposal of a cash generating unit during the year, any attributable amount of purchased goodwill is
included in the calculation of the profit or loss on disposal.
UNIVISION ENGINEERING LIMITED - 32 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.6
Impairment of assets
The carrying amounts of non-current assets, such as plant and equipment, are reviewed at the end of
each reporting period to determine whether there is any indication of impairment. If any such
indication exists, the recoverable amount is estimated. In addition, for goodwill, the recoverable
amount is estimated annually whether or not there is any indication of impairment.
Calculation of recoverable amount
The recoverable amount of an asset is the greater of its fair value less costs of disposal and value in
use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. Where an asset does not generate cash inflows largely independent of
those from other assets, the recoverable amount is determined for the smallest group of assets that
generates cash inflows independently (i.e. a cash-generating unit).
Recognition of impairment losses
An impairment loss is recognised in profit or loss if the carrying amount of an asset, or the cash-
generating unit to which it belongs, exceeds the recoverable amount. Impairment losses recognised in
respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill
allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of the
other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset
will not be reduced below its individual fair value less costs of disposal (if measurable), or value in use
(if determinable).
Reversals of impairment losses
In respect of assets other than goodwill, an impairment loss is reversed if there has been a favourable
change in the estimates used to determine the recoverable amount. An impairment loss in respect of
goodwill is not reversed (including those provided during the interim financial reporting).
A reversal of an impairment loss is limited to the asset’s carrying amount that would have been
determined had no impairment loss been recognised in prior years. Reversals of impairment losses are
credited to profit or loss in the year in which the reversals are recognised.
4.7
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the
weighted average method and comprises design costs, raw materials, direct labour, other direct costs
and other costs incurred in bringing the inventories to their present location and condition. Net
realisable value is the estimated selling price in the ordinary course of business less the estimated costs
of completion and the estimated costs necessary to make the sale.
UNIVISION ENGINEERING LIMITED - 33 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8 Financial instruments
Financial assets and financial liabilities are recognised when a group entity becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities are added to
or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition.
4.8.1 Financial assets
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. Subsequent to initial recognition, loans and receivables (including
trade and other receivables and bank balances and cash) are measured at amortised cost using the
effective interest method, less any impairment (see accounting policy on impairment of loans and
receivables below).
Interest income is recognised by applying the effective interest rate, except for short-term receivables
where the recognition of interest would be immaterial.
Type of item
1. Bills receivable
Nature and terms of item
Certain customers pay accounts receivable with bills receivable
from Taiwan banks with maturities less than twelve months.
These are also referred to as “bankers” acceptances, which are
unsecured, interest-free and to be matured in twelve months.
2. Loans
Unsecured temporary advances to the subsidiaries, which are
interest-free and eliminated upon consolidation.
3. Other receivables
They include:
a. Retention receivable under warranty provision among certain
construction contracts for a period of twelve months
b. Accrued income from maintenance contracts, which are billed
or collected within twelve months.
UNIVISION ENGINEERING LIMITED - 34 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8 Financial instruments (continued)
4.8.1 Financial assets (continued)
Impairment of loans and receivables
Loans and receivables are assessed for indicators of impairment at the end of each reporting period.
Loans and receivables are considered to be impaired when there is objective evidence that, as a result
of one or more events that occurred after the initial recognition of the loans and receivables, the
estimated future cash flows of loans and receivables have been affected.
Objective evidence of impairment could include:
•
significant financial difficulty of the issuer or counterparty; or
• breach of contract, such as default or delinquency in interest and principal payments; or
•
it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of loans and receivables, such as trade receivables, assets that are assessed not to
be impaired individually are, in addition, assessed for impairment on a collective basis. Objective
evidence of impairment for a portfolio of receivables could include the Group’s past experience of
collecting payments, an increase in the number of delayed payments in the portfolio past the average
credit period, observable changes in national or local economic conditions that correlate with default
on receivables.
The amount of the impairment loss recognised is the difference between the asset’s carrying amount
and the present value of the estimated future cash flows discounted at the loans and receivables’
original effective interest rate.
The carrying amount of loans and receivables is reduced by the impairment loss directly for all loans
and receivables with the exception of trade receivables, where the carrying amount is reduced through
the use of an allowance account. Changes in the carrying amount of the allowance account are
recognised in profit or loss. When a trade receivable is considered uncollectible, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited to
profit or loss.
If, in a subsequent period, the amount of impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed through profi t or to the extent that the carrying amount of the loan and
receivable at the date the impairment is reversed does not exceed what the amortised cost would have
been had the impairment not been recognised.
UNIVISION ENGINEERING LIMITED - 35 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8 Financial instruments (continued)
4.8.2 Financial liabilities and equity instruments
Debt and equity instruments issued by a group entity are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.
Equity instrument
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds
received, net of direct issue costs.
Financial liabilities
Financial liabilities (including trade and other payables and loan and borrowings) are subsequently
measured at amortised cost, using the effective interest method.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial liability and
of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments (including all fees paid or received that form an integral part
of the effective interest rate, transaction costs and other premiums or discounts) through the expected
life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on
initial recognition. Interest expense is recognised on an effective interest basis.
Derecognition
The Group derecognises a financial asset only when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another entity.
On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount
and the sum of the consideration received and receivable and the cumulative gain or loss that had been
recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.
The Group derecognises financial liabilities when, and only when, the Group’s obligations are
discharged, cancelled or expire. The difference between the carrying amount of the financial liability
derecognised and the consideration paid and payable is recognised in profit or loss.
4.8.3 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial
position when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously.
UNIVISION ENGINEERING LIMITED - 36 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.9 Trade and other receivables
Trade and other receivables are initially recognised at fair value and thereafter stated at amortised cost
less allowance for impairment of bad and doubtful debts, except where the receivables are interest-free
loans made to related parties without any fixed repayment terms or the effect of discounting would be
immaterial. In such cases, the receivables are stated at cost less allowance for impairment of bad and
doubtful debts.
4.10 Bank deposits
Bank deposits are restricted deposits held at bank with maturities greater than three months, as
collateral for performance bond issued by the bank to Company’s customer in construction contracts.
4.11 Cash and cash equivalents
In the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call
with banks, other short-term highly liquid investments with original maturities of three months or less.
4.12 Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently stated at amortised
cost unless the effect of discounting would be immaterial, in which case they are stated at cost.
4.13 Interest-bearing borrowings
Interest-bearing borrowings are initially recognised at fair value less transaction costs. Subsequent to
initial recognition, the interest-bearing borrowings are stated at amortised cost with any difference
between the amount initially recognised and redemption value being recognised in the consolidated
statement of comprehensive income over the period of the borrowings together with any interest and
fees payable using the effective interest method.
4.14 Share capital
Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as
liabilities. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
UNIVISION ENGINEERING LIMITED - 37 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.15 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and
rendering of services in the ordinary course of the Group’s activities. Revenue is shown net of
business tax, value-added tax, rebates and discounts, and after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue and related cost can be reliably measured,
it is probable that future economic will flow to the entity and when specific criteria have been met for
each of the Group’s activities as described below. The amount of revenue is not considered to be
reliably measurable until all contingencies relating to the sale have been resolved. The Group bases its
estimates on historical results, taking into consideration the type of customer, the type of transaction
and the specifics of each arrangement.
(i)
Construction contracts
Revenue from construction contracts is recognised when the outcome of a construction contract
can be estimated reliably:
revenue from a fixed price contract is recognised using the percentage of completion
method, measured by reference to the percentage of contract costs incurred to date to
estimated total contract costs for the contract; and
revenue from a cost plus contract is recognised by reference to the recoverable costs
incurred during the period plus an appropriate proportion of the total fee, measured by
reference to the proportion that costs incurred to date bear to the estimated total costs of
the contract.
When the outcome of a construction contract cannot be estimated reliably, revenue is recognised
only to the extent of contract costs incurred that it is probable will be recoverable.
(ii) Maintenance contracts
Revenue from maintenance contracts is recognised on a straight line basis over the term of the
maintenance contract.
(iii) Product sales
Revenue from product sales is recognised on the transfer of risks and rewards of ownership,
which generally coincides with the delivery of goods to customers and the passing of title to
customers.
(iv)
Interest income
Interest income is recognised as it accrues using the effective interest method.
(v) Dividend income
Dividend income from investments is recognised when the shareholder’s right to receive
payment has been established (provided that it is probable that the economic benefits will flow
to the Company and the amount of income can be measured reliably).
UNIVISION ENGINEERING LIMITED - 38 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.16 Construction contracts
When the outcome of a construction contract can be estimated reliably, contract costs are recognised
as an expense by reference to the stage of completion of the contract at the balance sheet date. When it
is probable that total contract costs will exceed total contract revenue, the expected loss is recognised
as an expense immediately. When the outcome of a construction contract cannot be estimated reliably,
contract costs are recognised as an expense in the period in which they are incurred.
Contracts in progress at the balance sheet date are recorded in the statement of financial position at the
net amount of costs incurred plus recognised profit less recognised losses and progress billings, and
are presented under the caption of “Trade and other receivables” or “Trade and other payables” in the
statement of financial position as the “Amounts due from customers for contracts-in-progress” (as an
asset) or the “Amounts due to customers for contracts-in-progress” (as a liability), as applicable.
Progress billings not yet paid by the customer are included in the statement of financial position.
Amounts received before the related work is performed are included in the statement of financial
position, as a liability, as “Advances received”.
4.17 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use or
sale are added to the cost of those assets until such time as the assets are substantially ready for their
intended use or sale. Investment income earned on the temporary investment of specific borrowings
pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for
capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
4.18 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Group as lessor
Rental income from operating leases is recognised in profit or loss on a straight-line basis over the
term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset and recognised as an expense on a straight-line
basis over the lease term.
The Group as lessee
Operating lease payments are recognised as an expense on a straight-line basis over the lease term. In
the event that lease incentives are received to enter into operating leases, such incentives are
recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental
expense on a straight-line basis.
UNIVISION ENGINEERING LIMITED - 39 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.19 Employee benefit
These comprise short term employee benefits and contributions to defined contribution retirement
plan.
Short-term employee benefits, including salaries, annual bonuses, paid annual leave, leave passage,
contributions to defined contribution retirement plans and the cost of non-monetary benefits are
accrued in the year in which the associated services are rendered by employees of the Group. Where
payment or settlement is deferred and the effect would be material, these amounts are stated at their
present values.
Contributions to the defined contribution scheme are charged to profit or loss when incurred.
4.20 Income tax
Income tax expense for the period comprises current and deferred tax. Tax is recognised in the
statement of comprehensive income, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the company and its subsidiaries operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, 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 - 40 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.21 Financial guarantee issued, provisions and contingent liabilities
(i)
Financial guarantees issued
Financial guarantees are contracts that require the issuer (i.e. the guarantor) to make specified
payments to reimburse the beneficiary of the guarantee (the “holder”) for a loss the holder incurs
because a specified debtor fails to make payment when due in accordance with the terms of a debt
instrument.
Where the Group issues a financial guarantee, the fair value of the guarantee is initially recognised as
deferred income within trade and other payables. The fair value of financial guarantees issued at the
time of issuance is determined by reference to fees charged in an arm’s length transaction for similar
services, when such information is obtainable, or is otherwise estimated by reference to interest rate
differentials, by comparing the actual rates charged by lenders when the guarantee is made available
with the estimated rates that lenders would have charged, had the guarantees not been available, where
reliable estimates of such information can be made. Where consideration is received or receivable for
the issuance of the guarantee, the consideration is recognised in accordance with the Group’s policies
applicable to that category of asset. Where no such consideration is received or receivable, an
immediate expense is recognised in profit or loss on initial recognition of any deferred income.
The amount of the guarantee initially recognised as deferred income is amortised in profit or
provisions are recognised in accordance with (ii) if and when (1) it becomes probable that the holder
of the guarantee will call upon the Group under the guarantee, and (2) the amount of that claim on the
Group is expected to exceed the amount currently carried in trade and other payables in respect of that
guarantee, i.e. the amount initially recognised, less accumulated amortisation.
(ii) Other provisions and contingent liabilities
Provisions are recognised for other liabilities of uncertain timing or amount when the Group or the
Company has a legal or constructive obligation arising as a result of a past event, it is probable that an
outflow of economic benefits will be required to settle the obligation and a reliable estimate can be
made. Where the time value of money is material, provisions are stated at the present value of the
expenditure expected to settle the obligation.
4.22 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as liability in the Group’s and the
Company’s financial statements in the period in which the dividends are approved by the Company’s
shareholders or directors, where appropriate.
4.23 Events after the reporting period
Events after the reporting period that provide additional information about the Group’s position at the
end of the reporting period or those that indicate the going concern assumption is not appropriate are
adjusting events and are reflected in the financial statements. Events after the reporting period that are
not adjusting events are disclosed in the notes to the financial statements when material.
UNIVISION ENGINEERING LIMITED - 41 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
5.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Critical judgements in applying accounting policies
In the process of applying the accounting policies, management has made the following judgements
that have the most significant effect on the amounts recognised in the financial statements (apart from
those involving estimations, which are dealt with below).
(i)
Estimation of contract costs
Estimated costs to complete contracts are judged by the directors through the application of their
experience and knowledge of the industry in which the Group operates. However, contract
performance can be difficult to predict accurately. The directors believe that contract budgets do not
deviate materially from actual costs incurred due to a strong cost control system with regular review of
budgets which highlight any incidences that could affect estimated costs to completion.
The key assumptions concerning the future and other key sources of estimation uncertainty at the end
of the reporting periods, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end
of the reporting period, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are discussed below.
(i)
Impairment of assets
The Group has to exercise judgement in determining whether an asset is impaired or the event
previously causing the asset impairment no longer exists, particularly in assessing: (1) whether an
event has occurred that may affect the asset value or such event affecting the asset value has not been
in existence; (2) whether the carrying value of an asset can be supported by the net present value of
future cash flows which are estimated based upon the continued use of the asset or derecognition; and
(3) the appropriate key assumptions to be applied in preparing cash flow projections including whether
these cash flow projections are discounted using an appropriate rate. Changing the assumptions
selected by management to determine the level of impairment, including the discount rates or the
growth rate assumptions in the cash flow projections, could materially affect the net present value used
in the impairment test.
UNIVISION ENGINEERING LIMITED - 42 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
5.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Key sources of estimation uncertainty (continued)
(ii)
Impairment of trade and other receivables
The estimation of impairment of trade and other receivables includes an assessment of recoverability
of individual account balances and a review of ageing analysis of trade and other receivables by the
directors. The directors will also review the credit history of customers in assessing the recoverability
of trade and other receivables. When any indication comes to their attention that a trade and other
receivable might not be recovered in full, impairment will be made and recognised as an expense in
the consolidated statement of comprehensive income. As at 31 March 2014, the total carrying amount
of trade and other receivables are £14,299,649 (2013: £15,706,652).
(iii) Plant and equipment and depreciation
The Group determines the estimated useful lives, residual values and related depreciation charges for
the Group’s plant and equipment. This estimate is based on the historical experience of the actual
useful lives and residual values of plant and equipment of similar nature and functions. The Group will
revise the depreciation charge where useful lives and residual values are different to those previously
estimated, or it will write-off or write-down technically obsolete or non-strategic assets that have been
abandoned or sold.
(iv)
Income taxes
The Group is subject to income tax in different jurisdiction in Hong Kong, Taiwan and the PRC.
Significant estimates are required in determining the provision for income taxes. There are many
transactions and calculations for which the ultimate tax determination is uncertain during the ordinary
course of business. Where the final tax outcome of these matters is different from the amounts that
were initially recorded, such differences will impact the income tax and deferred tax provisions in the
period in which such determination is made.
As at 31 March 2014, the Group has unused tax losses of £4,561,705 (2013: £5,331,538) available for
offset against future profits. A deferred tax asset of £752,681 (2013: £879,740) has not been
recognised in respect of the unused tax losses. In cases where there are future profits generated to
utilise the tax losses, a material deferred tax asset may arise, which would be recognised in the
consolidated statement of comprehensive income for the period in which such future profits are
recorded.
UNIVISION ENGINEERING LIMITED - 43 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
6.
FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
Financial assets:
Loans and receivables
- Trade and other receivables
- Bank deposits
- Cash and bank balances
Financial liabilities:
- Trade and other payables
- Loan and borrowings
- Obligation under finance lease
2014
£
2013
£
14,299,649
223,865
379,860
15,706,652
246,008
585,046
4,544,953
440,582
14,259
4,866,691
3,528,205
23,191
(b) Financial risk management objectives and policies
The Group’s major financial instruments include loan and borrowings, trade and other receivables and
trade and other payables. Details of these financial instruments are disclosed in the respective notes.
The risks associated with these financial instruments include currency risk, interest rate risk, credit risk
and liquidity risk. The policies on how these risks are mitigated are set out below. The management
manages and monitors these exposures to ensure appropriate measures are implemented in a timely
and effective manner.
(i) Market risk
(1) Currency risk
Certain entities in the Group have foreign currency transactions and have foreign currency
denominated monetary assets and liabilities, which expose the Group to foreign currency risk.
The Company has foreign currency transactions, which expose the Company to foreign currency
risk.
The carrying amounts of the Group’s and the Company’s foreign currency denominated
monetary assets and monetary liabilities, mainly represented by trade and other receivables, cash
and bank balances, trade and other payables and loan and borrowings, at the end of the reporting
period are as follows:
The Group
The Company
Assets
Liabilities
Assets
Liabilities
2014
2013
2014
2013
2014
2013
2014
2013
NTD
RMB
USD
HK$
91,745,343 56,222,390 77,936,668
77,729,425
113,969,896 114,796,596 42,914,220 37,918,302
3,948,718
-
85,597
- 3,948,718
25,823,460 12,218,181 16,251,432 28,884,579 23,643,127 ` 12,034,097 15,978,539
23,444
29,993,818
-
116,700
101,159
-
-
23,444
-
5,081,515
102,480
-
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 - 44 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(i) Market risk (continued)
(1) Currency risk (continued)
Sensitivity analysis
The following table details the Group’s sensitivity to a 5% increase and decrease in £ against the
relevant foreign currencies and all other variables were held constant. 5% (2013: 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% (2013: 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% (2013: 5%) against the relevant
foreign currencies. For a 5% (2013: 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
2014
£
2013
£
22,310
16,068
361,753
430,178
746
(134,404)
72,468
42,883
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 - 45 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(i) Market risk (continued)
(2) Interest rate risk (continued)
Sensitivity analysis
The sensitivity analysis below has been determined based on the change in interest rates and the
exposure to interest rates for the non-derivative financial liabilities at the 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 year. The 25 basis points increase or
decrease represents management’s assessment of a reasonably possible change in interest rates
over the period until the next annual balance sheet date. The analysis is performed on the same
basis for 2013.
For the year ended 31 March 2014, if interest rates had been 25 basis points higher/lower, with
all other variables held constant,
the year would
increase/decrease by approximately £1,425 (2013: £2,510).
the Group’s post-tax profit for
(ii) Credit risk
At 31 March 2014, the Group’s and the Company’s maximum exposure to credit risk in the
event of the counterparties’ failure to perform their obligations in relation to each class of
recognised financial assets is the carrying amount of those assets as stated in the consolidated
statement of financial position.
The Group’s credit risk is primarily attributable to its trade and other receivables. In order to
minimise the credit risk, the management of the Group has a credit policy in place and the
exposures to these credit risks are monitored on an ongoing basis. Credit evaluations of its
customers’ financial position and condition are performed on each and every major customer
periodically. These evaluations focus on the customer’s past history of making payments 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 risk is influenced mainly by the individual characteristics of
each customer. The default risk of the industry and country in which customers operate also has
an influence on credit risk. At the balance sheet date, the Group had no significant
concentrations of credit risk where individual trade and other receivables balance exceed 10% of
the total trade and other receivables at the balance sheet date.
The credit risk on liquid funds is limited because the counterparties are banks with high credit
ratings assigned by international credit rating agencies. Also, the Group has no significant
concentration of credit risk, with exposure spread over a number of counterparties and
customers.
Further quantitative disclosures in respect of the Group’s and the Company’s exposure to credit
risk arising from trade and other receivables are set out in note 21.
UNIVISION ENGINEERING LIMITED - 46 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk
In managing the liquidity risk, the Group’s policy is to regularly monitor and maintain an
adequate level of cash and cash equivalents determined by management to finance the Group’s
operations. Management also needs to ensure the continuity of funding for both the short and
long terms, and to mitigate the effects of cash flow fluctuation. At 31 March 2014, the Group
had aggregate banking facilities of £2,194,840 (2012: £2,456,940), of which £1,754,258 were
unused (2013: £1,550,458).
The following table details the contractual maturities of the Group’s and the Company’s
financial liabilities at the balance sheet date, which is based on the undiscounted cash flows and
the earliest date on which the Group can be required to pay. The table includes both interest and
principal cash flows.
The Group
2014
Weighted
average
effective
Within
1 year
or on
interest rate Demand
%
£
More than
1 year but
less than
2 years
£
More than
2 years but
less than
5 years
£
Total
undiscounted
cash flow
£
Carrying
amount
at 31
March 2014
£
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligation under
finance lease
Financial guarantee
Maximum amount
guaranteed
(note 31)
3.64% -
3.76%
445,213
- 4,544,953
-
-
-
-
445,213
440,582
4,544,953
4,544,953
3.25%
7,956
7,956
664
16,576
14,259
4,998,122
7,956
664
5,006,742
4,999,794
7,860,000
-
-
7,860,000
7,860,000
UNIVISION ENGINEERING LIMITED - 47 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
The Group
2013
Weighted
average
effective
Within
1 year
or on
interest rate Demand
%
£
More than
1 year but
less than
2 years
£
More than
2 years but
less than
5 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
Financial guarantee
Maximum amount
guaranteed
(note 31)
The Company
3.39% -
3.91% 3,538,642
- 4,866,691
-
-
-
-
3,538,642
3,528,205
4,866,691
4,866,691
3.25%-
3.95%
8,744
8,744
9,471
26,959
23,191
8,414,077
8,744
9,471
8,432,292
8,418,087
7,930,000
-
-
7,930,000
7,930,000
2014
Weighted
average
effective
interest rate
%
Within
1 year
or on
demand
£
More than
1 year but
less than
2 years
£
More than
2 years but
less than
5 years
£
Total
undiscounted
cash flow
£
Carrying
Amount
at 31
March 2014
£
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligation under
finance lease
-
-
- 1,444,776
-
-
-
-
-
-
1,444,776
1,444,776
3.25%
7,956
7,956
664
16,576
14,259
1,452,732
7,956
664
1,461,352
1,459,035
UNIVISION ENGINEERING LIMITED - 48 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
The Company
2013
Weighted
average
effective
interest rate
%
Within
1 year
or on
demand
£
More than
1 year but
less than
2 years
£
More than
2 years but
less than
5 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
- 2,621,723
- 1,369,206
-
-
-
-
2,621,723
2,621,723
1,369,206
1,369,206
3.25%-
3.95%
8,744
8,744
9,471
26,959
23,191
3,999,673
8,744
9,471
4,017,888
4,014,120
The fair values of financial assets and financial liabilities are determined in accordance with
generally accepted pricing models based on discounted cash flow analysis. Balances with
subsidiaries are unsecured, interest free and have no fixed repayment terms.
The directors of the Company consider that the carrying amounts of financial assets and
financial liabilities recorded at amortised cost in the financial statements approximate to their
fair values at the end of the reporting period.
(d) Capital risk management
The Group’s primary objectives when managing capital are to safeguard the Group’s ability to
continue as a going concern, so that it can continue to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital.
The Group actively and regularly reviews and manages its capital structure to maintain a
balance between the higher shareholder returns that might be possible with a higher level of
borrowings and the advantages and security afforded by a sound capital position, and makes
adjustments to the capital structure in light of changes in economic conditions.
The Group monitors its capital structure on the basis of a net debt-to-adjusted capital ratio. For
this purpose the Group defines net debt as total debt (which includes bank borrowings and other
financial liabilities) less bank deposits and cash. Adjusted capital comprises all components of
equity less unaccrued proposed dividends.
UNIVISION ENGINEERING LIMITED - 49 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(d) Capital risk management (continued)
During 2014, the Group’s strategy, which was unchanged from 2013, was to maintain the net
debt-to-adjusted capital ratio as low as feasible. In order to maintain or adjust the ratio, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
Neither the Company nor any of its subsidiary undertakings are subject to externally imposed
capital requirements.
The net debt-to-adjusted capital ratios of the Group and the Company at the end of the reporting
period were as follows:
Current liabilities
Trade and other payables
Loan and borrowings
Current tax liability
Obligation under finance lease
Non-current liabilities
Obligation under finance lease
The Group
The Company
2014
£
4,544,953
440,582
1,226,973
6,844
6,219,352
2013
£
4,866,691
3,528,205
1,350,264
7,522
9,752,682
2014
£
1,444,776
-
-
6,844
1,451,620
2013
£
1,369,206
2,621,723
-
7,522
3,998,451
7,415
15,669
7,415
15,669
Total debt
6,226,767
9,768,351
1,459,035
4,014,120
Less: cash and bank balances
379,860
585,046
160,210
456,758
Net debt
Total equity
5,846,907
9,183,305
1,298,825
3,557,362
11,129,719
9,452,792
4,322,811
2,056,185
Net debt-to-adjusted capital
ratio
53%
97%
30%
173%
UNIVISION ENGINEERING LIMITED - 50 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
7.
SEGMENT INFORMATION
Management has determined the operating segments based on the reports reviewed by the chief
operating decision maker, being the chief executive officer, that are used to make strategic decisions.
Information reported to the chief operating decision maker for the purpose of resource allocation and
assessment of segment performance focuses on types of goods or services delivered or provided. The
Group’s reportable operating segments are summarised as follows:
-
-
Security and surveillance
Electrical and mechanical
(a)
Segment revenues and results
The following is an analysis of the Group’s revenue and results by operating segment:
Security and
surveillance
£
Year ended 31 March 2014
Electrical and
mechanical
£
Total
£
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
5,634,350
2,564,746
655,706
8,854,802
71,158
-
-
71,158
5,705,508
2,564,746
655,706
8,925,960
3,018,730
(20,787)
2,997,943
(79,714)
-
(79,714)
2,939,016
(20,787)
2,918,229
Security and
surveillance
£
Year ended 31 March 2013
Electrical and
mechanical
£
Total
£
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
4,528,152
2,382,445
349,030
7,259,627
53,798
-
-
53,798
4,581,950
2,382,445
349,030
7,313,425
509,740
(37,727)
472,013
(230,330)
-
(230,330)
279,410
(37,727)
241,683
UNIVISION ENGINEERING LIMITED - 51 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
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 2014
Electrical and
mechanical
£
Total
£
4,913,700
-
4,913,700
12,442,786
-
12,442,786
17,356,486
-
17,356,486
2,567,164
-
2,567,164
3,659,603
-
3,659,603
6,226,767
-
6,226,767
Security and
surveillance
£
At 31 March 2013
Electrical and
mechanical
£
Total
£
5,415,732
-
5,415,732
13,805,411
-
13,805,411
19,221,143
-
19,221,143
5,746,092
-
5,746,092
4,022,259
-
4,022,259
9,768,351
-
9,768,351
UNIVISION ENGINEERING LIMITED - 52 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
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 2014
Electrical and
mechanical
£
Total
£
Capital expenditure
Depreciation
Impairment loss recognised on goodwill
16,002
49,086
-
-
-
-
16,002
49,086
-
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
-
*
Capital expenditure represented plant and equipment.
(d) Geographical segments
In determining the Group’s geographical segments, revenues are attributed to the segments based on
the location of the customers and assets are attributed to the segments based on the location of the
assets.
No further geographical segment information is presented as the Group’s revenue is materially derived
from customers based in one geographic segment comprising Hong Kong, Macau, Taiwan and the
PRC, and all of the Group’s assets are located in the same geographic segment.
(e)
Information about major customers
Revenues of approximately £4,485,347 (2013: £3,619,984) are derived from three single external
customers (2013: three), who contributed to 10% or more of the Group’s revenue for 2014 fiscal year.
UNIVISION ENGINEERING LIMITED - 53 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
8. OTHER INCOME
Interest income
Sundry income
9. OTHER GAIN AND (LOSS)
(Loss)/gain on disposal of plant and equipment
Foreign exchange gains
Impairment loss recognised on trade and other receivables
Recovery from bad debts
Write-off of inventories
Gain from forgiveness of debts
10. EXPENSES BY NATURE
Cost of inventories recognised as expenses
Sub-contracting costs
Allowance for obsolete inventories
Depreciation – leased plant and equipment
Depreciation – owned plant and equipment
Operating lease charges – minimum lease payments
Research and development costs
Selling and distribution cost
Other expenses
Staff costs, including directors’ remuneration
- Wages and salaries
- Pension scheme contributions
2014
£
2013
£
1,293
9,225
1,516
9,412
10,518
10,928
2014
£
(2,675)
7,601
(99,907)
44,617
(47,444)
2,496,353
2013
£
510
6,337
(188,148)
-
-
-
2,398,545
(181,301)
2014
£
3,342,475
2,264,316
9,660
10,742
38,344
155,669
11,037
24,039
664,191
1,766,704
70,788
1,837,492
2013
£
2,396,205
1,839,705
27,585
10,813
55,091
131,072
11,134
20,406
625,004
1,631,047
77,642
1,708,689
Auditor’s remuneration
- audit services (parent company)
Total cost of sales, selling and distribution and administrative
expenses
38,042
37,938
8,396,007
6,863,642
UNIVISION ENGINEERING LIMITED - 54 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
11. DIRECTORS’ REMUNERATION
Directors’ remuneration for the year is disclosed as follows:
Salaries,
bonuses and
allowances
£
Pension
scheme
contributions
£
-
49,102
48,630
42,369
140,101
-
1,216
911
1,216
3,343
2014
£
-
50,318
49,541
43,585
143,444
11,671
-
11,671
151,772
3,343
155,115
Salaries,
bonuses and
allowances
£
Pension
scheme
contributions
£
39,158
45,399
61,502
40,545
186,604
571
1,183
1,183
1,183
4,120
2013
£
39,729
46,582
62,685
41,728
190,724
11,748
-
11,748
198,352
4,120
202,472
Executive directors
Stephen Sin Mo KOO
Chun Pan WONG
Chun Hung WONG (resigned on 31 December
2013)
Danny Kwok Fai YIP
Non-executive director
Nicholas James LYTH
Executive directors
Stephen Sin Mo KOO
Chun Pan WONG
Chun Hung WONG
Danny Kwok Fai YIP
Non-executive director
Nicholas James LYTH
12. FINANCE COSTS
Interest on bank loans and other borrowings wholly repayable
within one year
Finance charge on obligation under finance lease
2014
£
2013
£
19,623
1,164
20,787
36,366
1,361
37,727
UNIVISION ENGINEERING LIMITED - 55 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
13.
INCOME TAX IN THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(a) Income tax in the consolidated statement of comprehensive income:
Income tax expense
Hong Kong profits tax
PRC income tax
Taiwan income tax
2014
£
2013
£
-
-
13,499
13,499
-
-
57,278
57,278
No Hong Kong profits tax has been provided for in the financial statements as the Company has
unused tax losses to offset against its taxable profit during the year.
Taxes for subsidiaries are calculated using the rates prevailing in their local jurisdictions, whereas
PRC income tax rate is charged at 25% (2013: 25%) and Taiwan income rate is charged at 17% (2013:
17%).
(b) Reconciliation between income tax expense and accounting profit at the applicable tax
rates:
Profit before income tax
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 unrecognised deferred tax assets
Tax losses not recognised as deferred tax assets
Tax adjustments
Income tax expense
14. EARNINGS PER SHARE
2014
£
2013
£
2,918,229
241,683
480,655
(421,138)
25,064
(2,341)
(49,987)
-
(18,754)
61,865
(6,806)
53,970
(943)
(36,431)
27,797
(42,174)
13,499
57,278
The calculation of basic earnings per share is based on the profit attributable to the equity shareholders
of the Company for the year of £2,820,587 (2013: £92,143), and the weighted average of 383,677,323
(2013: 383,677,323) ordinary shares in issue during the year.
There were no potential dilutive instruments at either financial year end.
UNIVISION ENGINEERING LIMITED - 56 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
15. DIVIDENDS
(i) Dividends payable to equity shareholders of the Company attributable to the year:
2014
£
2013
£
Interim dividend declared and paid
-
-
Final dividend proposed after the end of the reporting period of
£0.024 pence per ordinary share (2013: £0.063 pence per ordinary
share)
92,571
242,558
The final dividend proposed after the end of the reporting period has not been recognised as a liability
at the end of the reporting period.
(ii) Dividends payable to equity shareholders of the Company attributable to the previous financial
year, approved and paid during the year
Final dividend in respect of the previous financial year, approved
and paid during the year, of £0.063 pence per ordinary share
(2013: Nil)
242,558
-
2014
£
2013
£
UNIVISION ENGINEERING LIMITED - 57 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
16. PLANT AND EQUIPMENT
The Group
Cost
At 1 April 2012
Additions
Disposals
Foreign translation difference
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Research
assets
£
169,894
28,563
-
8,642
156,767
3,867
-
7,556
149,301
6,118
(10,426)
7,339
546,959
-
-
24,235
Total
£
1,022,921
38,548
(10,426)
47,772
At 31 March 2013
207,099
168,190
152,332
571,194
1,098,815
At 1 April 2013
Additions
Disposals
Foreign translation difference
207,099
9,049
-
(22,693)
168,190
6,953
(2,440)
(17,803)
152,332
-
(6,079)
(15,009)
571,194
-
-
(61,994)
1,098,815
16,002
(8,519)
(117,499)
At 31 March 2014
193,455
154,900
131,244
509,200
988,799
Accumulated depreciation
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
At 1 April 2013
Charge for the year
Disposals
Foreign translation difference
173,282
17,487
-
(19,624)
162,944
3,854
(2,440)
(17,114)
109,000
23,528
(3,039)
(12,165)
566,756
4,217
-
(61,773)
1,011,982
49,086
(5,479)
(110,676)
At 31 March 2014
171,145
147,244
117,324
509,200
944,913
Net book value
At 31 March 2014
At 31 March 2013
22,310
33,817
7,656
5,246
13,920
43,332
-
43,886
4,438
86,833
At 31 March 2014, the net book value of motor vehicle held under finance lease of the Group and the
Company was £8,556 (2013: £20,683).
UNIVISION ENGINEERING LIMITED - 58 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
16. PLANT AND EQUIPMENT (CONTINUED)
The Company
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Cost
At 1 April 2012
Additions
Disposals
Foreign translation difference
At 31 March 2013
At 1 April 2013
Additions
Disposals
Foreign translation difference
12,992
445
-
773
14,210
14,210
4,305
-
(1,471)
32,612
3,330
-
2,038
37,980
37,980
1,410
-
(3,481)
Total
£
103,562
9,893
-
6,441
57,958
6,118
-
3,630
67,706
119,896
67,706
-
(6,079)
(5,824)
119,896
5,715
(6,079)
(10,776)
At 31 March 2014
17,044
35,909
55,803
108,756
Accumulated depreciation
At 1 April 2012
Charge for the year
Disposals
Foreign translation difference
At 31 March 2013
At 1 April 2013
Charge for the year
Disposals
Foreign translation difference
At 31 March 2014
Net book value
At 31 March 2014
At 31 March 2013
11,673
415
-
695
12,783
12,783
1,008
-
(1,196)
30,098
1,571
-
1,816
33,485
33,485
2,173
-
(3,110)
24,993
13,095
-
2,019
40,107
40,107
13,313
(3,039)
(4,065)
66,764
15,081
-
4,530
86,375
86,375
16,494
(3,039)
(8,371)
12,595
32,548
46,316
91,459
4,449
1,427
3,361
4,495
9,487
17,297
27,599
33,521
UNIVISION ENGINEERING LIMITED - 59 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
17. GOODWILL
The Group
Cost
At 31 March 2013 and 2014
Less: accumulated impairment loss
At 31 March 2013 and 2014
Net carrying amount
At 31 March 2013 and 2014
£
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
2014
£
2013
£
25,830
25,830
The recoverable amount of the CGU is determined based on value-in-use calculations. These
calculations use cash flow projections based on financial budgets approved by management covering a
twelve month period. A discount rate of 15% has been used for the value-in-use calculations.
Key assumptions used for value-in-use calculations:
Gross margin
Growth rate
2014
2013
20%
11%
25%
13%
Management determined the budgets based on their experience and knowledge in the construction
contracts operations. The discount rate used is pre-tax and reflects specific risks relating to the relevant
segment.
Based on the impairment test performed, no impairment loss is recognised for the year (2013: Nil).
UNIVISION ENGINEERING LIMITED - 60 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
18.
INTERESTS IN SUBSIDIARIES
Unlisted shares, at cost
Less: impairment loss
Add: foreign translation difference
Amounts due from subsidiaries
Less: impairment loss
Add: foreign translation difference
Total
2014
£
2013
£
1,053,475
(1,201,190)
161,537
1,053,475
(1,201,190)
161,537
13,822
13,822
7,213,254
(4,459,285)
(514)
7,979,454
(4,900,355)
803
2,753,455
3,079,902
2,767,277
3,093,724
Amounts due from subsidiaries are unsecured, interest-free with no fixed term of repayment and hence
are classified as non-current as these are not expected to be recoverable within the next twelve months.
The following list contains the particulars of subsidiaries which principally affected the results, assets
and liabilities of the Group at 31 March 2014:
Name
Place of
incorporation
and
operations
Issued and
fully paid up
share capital/
registered capital
Percentage
of equity
held by
the Company
Directly Indirectly
T-Com Technology Co
Taiwan
Limited
NT$80,000,000
Ordinary share
52.25%
-
Principal activities
Supply, design, installation and
maintenance of closed circuit
television and surveillance
systems and the sale of security
system related products
Leader Smart
Hong Kong
Engineering Limited
HK$10,000
Ordinary share
100%
-
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 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
19.
INVENTORIES
Raw materials
Work in progress
Finished goods
Less: impairment loss
The Group
The Company
2014
£
2013
£
300,238
490
878,454
1,179,182
(120,117)
327,168
365
931,783
1,259,316
(124,569)
2014
£
300,238
-
444,143
744,381
-
2013
£
327,168
-
475,995
803,163
-
1,059,065
1,134,747
744,381
803,163
The Group recognised a provision for obsolete inventories of £9,660 (2013: £27,585) on slow-moving
inventories.
20. CONTRACTS-IN-PROGRESS
Contract costs incurred plus
attributable profits less
foreseeable losses
Progress billings to date
Represented by:
Amounts due from customers for
contracts-in-progress
The Group
The Company
2014
£
2013
£
2014
£
2013
£
30,934,302
(17,397,940)
31,130,690
(16,068,072)
13,957,023
(13,621,970)
13,281,207
(13,198,376)
13,536,362
15,062,618
335,053
82,831
Less: allowance for doubtful debts
Amounts due from customers for
contracts-in-progress, net (note
21)
14,404,193
(377,670)
14,026,523
15,885,794
(415,066)
964,673
(145,515)
619,646
(159,908)
15,470,728
819,158
459,738
Amounts due to customers for
contracts-in-progress (note 23)
(490,161)
(408,110)
(484,105)
(376,907)
13,536,362
15,062,618
335,053
82,831
At 31 March 2014, the amount of retention receivables from construction customers recorded within
“trade and other receivables” is £52,689 (2013: £22,112).
Within amounts due from customers for construction contracts-in-progress are receivables totalling
£10,828,836 (2013: £11,901,827), 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 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
21. TRADE AND OTHER RECEIVABLES
The Group
The Company
2014
£
2013
£
2014
£
2013
£
Trade receivables
Less: allowance for doubtful debts
1,414,152
(469,128)
1,254,491
(637,847)
760,300
(57,942)
551,822
(240,929)
Trade receivables, net
Other receivables
Deposits and prepayments
Amounts due from customers for
contracts-in-progress, net (note
20)
Less: non-current portion –
amounts due from customers for
contracts-in-progress
945,024
404,973
247,460
616,644
638,220
417,087
702,358
244,476
102,824
310,893
530,104
136,396
14,026,523
15,623,980
15,470,728
17,142,679
819,158
1,868,816
459,738
1,437,131
(1,324,331)
(1,436,027)
-
-
14,299,649
15,706,652
1,868,816
1,437,131
All of trade and other receivables are expected to be recovered within one year, other than those
separately disclosed.
(a)
Impairment of trade receivables
Impairment losses in respect of trade receivables are recorded using an allowance account unless the
Group is satisfied that recovery of the amount is remote, in which case the impairment loss is written
off against trade receivables directly. Movements in the allowance for doubtful debts:
The Group
The Company
2014
£
2013
£
2014
£
At 1 April
Impairment loss recognised
Written off against trade
receivables
Foreign translation difference
637,847
99,907
584,602
184,190
240,929
-
(213,396)
(55,230)
(162,923)
31,978
(168,779)
(14,208)
2013
£
227,710
-
-
13,219
At 31 March
469,128
637,847
57,942
240,929
Note:
At 31 March 2014, trade receivables of the Group and the Company amounting to £99,907
(2013: £184,190) and Nil (2013: Nil) respectively are individually determined to be impaired and an
impairment was provided. These individually impaired receivables were outstanding over one year at
year end.
UNIVISION ENGINEERING LIMITED - 63 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
21. TRADE AND OTHER RECEIVABLES (CONTINUED)
(b) Trade receivables that are not impaired
The following is an ageing analysis of trade receivables at 31 March 2014 and 2013 that were past due
but not impaired:
0 to 90 days
91 to 365 days
Over 365 days
The Group
The Company
2014
£
786,137
126,401
32,486
2013
£
497,928
37,603
81,113
2014
£
615,258
80,155
6,945
2013
£
292,375
18,518
-
945,024
616,644
702,358
310,893
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.
UNIVISION ENGINEERING LIMITED - 64 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
22. CASH AND BANK BALANCES
(a) Cash and cash equivalents
Cash at bank and on hand
Restricted cash *
Cash and cash equivalents in the
consolidated and the Company’s
statement of cash flows
The Group
The Company
2014
£
2013
£
2014
£
2013
£
310,805
69,055
550,782
34,264
160,210
-
456,758
-
379,860
585,046
160,210
456,758
* At 31 March 2014, the Group maintained £69,055 (2013: £34,264) as restricted cash held at bank as
security against the banking facility (note 25).
(b) Bank deposits
At 31 March 2014, £223,865 (2013: £246,008) are restricted deposits held at bank with maturities
greater than three months, as a pledge for performance bonds in respect of construction contracts
undertaken by the Group and the Company.
The effective interest rate on bank deposits was 0.41% per annum (2013: 0.53%).
(c) Cash and bank balances are denominated in the following currencies:
AUD
CAD
GBP
HKD
JYP
NTD
RMB
USD
The Group
The Company
2014
£
350
813
115
380,702
70
211,460
475
9,740
2013
£
431
962
281
647,774
83
120,468
522
60,533
2014
£
350
813
115
374,209
70
-
-
8,518
2013
£
431
962
281
641,358
83
-
-
59,651
603,725
831,054
384,075
702,766
UNIVISION ENGINEERING LIMITED - 65 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
23. TRADE AND OTHER PAYABLES
Trade payables
Bills payable
Due to a related party (note 29(b))
Accruals and other payables
Deferred income on financial
guarantees issued (note 31)
Amounts due to customers for
contracts-in-progress (note 20)
The Group
The Company
2014
£
2013
£
1,978,634
236,528
37,017
1,500,009
2,329,100
125,359
42,376
1,629,158
2014
£
67,577
-
-
893,094
2013
£
48,325
-
-
943,974
302,604
332,588
-
-
490,161
408,110
484,105
376,907
4,544,953
4,866,691
1,444,776
1,369,206
24.
INCOME TAX IN THE STATEMENT OF FINANCIAL POSITION
(a) Current tax liability in the statement of comprehensive income represents:
Hong Kong profits tax
PRC income tax
Taiwan income tax
The Group
The Company
2014
£
2013
£
2014
£
2013
£
-
1,144,800
82,173
-
1,258,234
92,030
1,226,973
1,350,264
-
-
-
-
-
-
-
-
(b) Unrecognised deferred tax assets
At 31 March 2014, the Company had unused tax losses of £4,561,705 (2013: £5,331,538) that were
available for offset against future taxable profits of the Company. No deferred tax assets have been
recognised due to the unpredictability of the future profit streams. Such unused tax losses are available
to be carried forward at no expiration.
No provision for deferred tax liabilities has been made in the financial statements as the tax effect of
temporary differences is immaterial to the Group and the Company.
UNIVISION ENGINEERING LIMITED - 66 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
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
2014
£
2013
£
2014
£
440,582
906,482
-
2,621,723
440,582
3,528,205
2013
£
-
2,621,723
2,621,723
-
-
-
Notes:
(a) The secured bank loans carried interest at rates ranging from per annum (2013: 3.39% to 3.91%
per annum) and were secured by:-
(i) Restricted cash (note 22) and;
(ii) Personal guarantee by the Chairman of the Company, Mr. Stephen Sin Mo KOO (note
29(c)).
(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 became interest-free and was repayable by 31 March 2014. Security over the Group’s
interest in a shopping mall contract within the PRC has been provided. On 19 February 2014,
Mayne agreed with the Company to waive all rights to the repayment of any and all loan
principal and interest payable under the Loan Agreement.
26. OBLIGATION UNDER FINANCE LEASE
At 31 March 2014 and 2013, the Group and the Company had an obligation under finance lease as
follows:
Minimum lease payment
2014
£
2013
£
Present value of the minimum
lease payment
2014
£
2013
£
Within one year
Between two to five years
7,956
8,620
8,744
18,215
6,844
7,415
7,522
15,669
Total minimum finance lease
payments
16,576
26,959
14,259
23,191
Less: future finance charges
2,317
3,768
Present value of lease obligation
14,259
23,191
UNIVISION ENGINEERING LIMITED - 67 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
27. SHARE CAPITAL
Authorised :
800,000,000 ordinary shares of HK$0.0625 each
2014
£
2013
£
3,669,470
3,669,470
Issued and fully paid:
383,677,323 ordinary shares (2013: 383,677,323 ordinary shares)
of HK$0.0625 each
1,697,617
1,697,617
The Company has one class of ordinary shares.
28. EMPLOYEE RETIREMENT BENEFITS
(a) The Company operates a Mandatory Provident Fund scheme (the “MPF scheme”) under the
Hong Kong Mandatory Provident Fund Schemes Ordinance for employees employed under the
jurisdiction of the Hong Kong Employment Ordinance. The MPF scheme is a defined
contribution retirement scheme administered by independent trustees. Under the MPF scheme,
the employer and its employees are each required to make contributions to the scheme at 5% of
the employees’ relevant income, subject to a cap of monthly relevant income of HK$25,000
(HK$20,000 prior to June 2012). Contributions to the MPF scheme vest immediately.
(b) The subsidiary in the PRC participates in a defined contribution scheme organised by the local
government. These subsidiaries are required to make contributions at certain prescribed rates of
the relevant PRC employees’ salaries to the scheme. Contributions to the scheme vest
immediately.
(c) Employees of the subsidiary in Taiwan chose to participate in a defined contribution scheme
governed by the Labour Pension Act of Taiwan. This subsidiary contributes at 6% of the total
salaries of the participating employees who have chosen to participate in the defined contribution
scheme, the contribution deposited into individual pension accounts at the Bureau of Labour
Insurance of Taiwan.
Save as set out above, the Group has no other material obligations to make payments in respect of
retirement benefits of the employees.
UNIVISION ENGINEERING LIMITED - 68 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
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
2014
£
2013
£
243,431
284,533
The remuneration of key management personnel comprises the remuneration of Executive Directors
and key executives.
Executive Directors include Executive Chairman, Chief Executive Officer, Technical Director and
Finance Director of the Company. The remuneration of the Executive Directors is determined by the
Remuneration Committee having regard to the performance of individuals, the overall performance of
the Group and market trends. Further information about the Remuneration Committee and the
directors’ remuneration is provided in the Remuneration Report and the Report on Corporate
Governance to the Annual Report and note 11 to the financial statements.
Key executives include Director of Operations and Director of Sales and Marketing of the Company.
The remuneration of the key executives is determined by the Executive Directors annually having
regard to the performance of individuals and market trends.
Biographical information on key management personnel is disclosed in the Directors’ and Senior
Management’s Biographies section of the Annual Report.
Transactions with related parties
(a) A loan of US$5,000,000 was provided on 31 December 2007 by 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$3,974,360 upon the forgiveness of certain accrued interest and principal.
The balance became interest-free and to be matured on 31 March 2014 (note 25(b)). On 19
February 2014, Mayne agreed with the Company to waive all rights to the repayment of any and
all principal and interest outstanding under the Loan Agreement. The Company owed
US$3,948,000 to Mayne before the cancellation of debt, which is treated as gain from
forgiveness of debt under other income in the statement of comprehensive income.
(b) At 31 March 2014, there is a payable balance of £37,017 (2013: £42,376) 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 2014, the bank facilities amounting to £946,068 (2013: £1,061,247) are personally
guaranteed by the director of the Company, Mr. Stephen Sin Mo KOO, which remained unused.
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 - 69 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
30. COMMITMENTS
(a)
Capital commitments
At 31 March 2014, the Group and the Company has no material capital commitments outstanding.
(b) Operating lease commitments
At 31 March 2014, the total future minimum lease payments under non-cancellable operating leases
for the office and warehouse premises are payable as follows:
The Group
The Company
2014
£
114,174
11,308
2013
£
2014
£
2013
£
60,728
6,080
70,036
4,441
19,074
-
125,482
66,808
74,477
19,074
Within one year
Between two to five years
31. FINANCIAL GUARANTEE
In accordance with those certain supplemental agreements on the Sales and Purchase Contract
regarding 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 2014, 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 Zhongshan shopping mall project (“Zhongshan Project”), the Group is secured by
certain beneficial interest in Zhongshan Project on a recourse basis. At 31 March 2014, the fair market
value of the Zhongshan Project amounted to £29 million, based on the appraisal report issued by an
independent valuer. At 31 March 2014, 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 financial 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 Zhongshan Project.
Financial guarantee issued
2014
£
2013
£
302,604
332,588
UNIVISION ENGINEERING LIMITED - 70 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
32. LEGAL PROCEEDINGS
Up to the date of this report, the Group has received several legal claims against its wholly-owned
subsidiary and the Company from its vendors in China in connection with 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 and the Company 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.
33. CONTINGENT LIABILITIES
At 31 March 2014, the directors of the Company do not consider it is probable that any significant
claims will be made against the Group and the Company under these guarantees and legal proceedings.
34. POSSIBLE IMPACT OF NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT
YET EFFECTIVE FOR THE YEAR ENDED 31 MARCH 2014
The requirements of Part 9, “Accounts and Audit”, of the new Hong Kong Companies Ordinance
(Cap. 622) come into operation from the Group and the Company’s first financial year commencing
after 3 March 2014 (i.e. the Company’s financial year which began on 1 April 2014) in accordance
with section 358 of that Ordinance. The Group and the Company is in the process of making an
assessment of the expected impact of the changes in the Companies Ordinance on the consolidated
financial statements in the period of initial application of Part 9. So far it has concluded that the impact
is unlikely to be significant and will primarily only affect the presentation and disclosure of
information in the consolidated financial statements.
35. EVENTS AFTER THE REPORTING DATE
(i)
On 4 August 2014, the Company, among Guangzhou Hua Xin Trading Company Ltd (“Hua
Xin”) and Guangzhou Jun Heng Mechanical and Electrical Equipment Company Limited (“Jun
Heng”), an affiliate of Hua Xin, entered into a supplementary agreement (“the agreement”) in
conjunction with the agreements dated 22 June 2012 and 21 August 2013. The agreement
stipulated that Hua Xin and Jun Heng agreed to continue and commit to complete the purchase
of the Company’s interest in the Zhongshan Project.
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 outcome from
arbitration over the Zhongshan Project is still ongoing. The evidence stage was completed and
the dispute is in the provision of verification stage by the Commission.
(ii) After the end of the reporting period the directors proposed a final dividend. Further details are
disclosed in note 15(i).
UNIVISION ENGINEERING LIMITED - 71 - ANNUAL REPORT 2014
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2014
36. COMPARATIVE FIGURES
Certain comparative figures in these financial statements have been re-classified to conform to the
current year's presentation
37. APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved and authorised for issue by the Board of Directors on 5
September 2014.
UNIVISION ENGINEERING LIMITED - 72 - ANNUAL REPORT 2014
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 2014 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 3 October 2014 at 5:00 p.m. The following businesses will be transacted then:
As ordinary business:
1. To receive and adopt the Company’s audited financial statements for the financial year ended 31 March 2014
together with the Directors’ report and the Independent Auditor’s report;
2. To declare a final dividend for the financial year ended 31 March 2014.
3. To re-elect Mr. Nicholas James LYTH who retired by rotation, as a Non-Executive Director of the Company;
4. To re-elect Mr. Chun Pan WONG who retired by rotation, as a Director of the Company;
5. To elect Mr. Peter Yip Tak CHAN as a Director of the Company;
6. 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;
7. That the directors of the Company be and are hereby generally and unconditionally authorized to exercise all
powers of the Company to allot ‘Ordinary Shares’ the capital of the Company. Such authority (unless and to
the extent previously revoked, varied or renewed by the Company during the general meeting) to expire 15
months after the date of the passing of such resolution or on the conclusion of the Company’s next AGM to be
held, following the date of passing such resolution, whichever occurs first, save that the Company may before
such expiry make any offer or agreement which would or might require Ordinary Shares to be allotted after
such expiry, and that the Directors may allot Ordinary Shares in pursuance of such an offer or an agreement as
if such authority had not expired. This authority substitutes all subsisting authorities to the extent unused.
8. That the directors of the Company be and are hereby generally and unconditionally authorized to exercise all
powers of the Company to repurchase the ’Ordinary Shares’ in the capital of the Company, including any
form of depositary receipt. Such authority (unless and to the extent previously revoked, varied or renewed by
the Company during the general meeting) to expire 15 months after the date of the passing of such resolution
or on the conclusion of the Company’s next AGM to be held, following the date of passing such resolution,
whichever occurs first, save that the Company may before such expiry make any offer or agreement which
would or might require Ordinary Shares to be repurchased after such expiry, and that the Directors may buy
back Ordinary Shares in pursuance of such an offer or an agreement as if such authority had not expired.
As special business:
To approve and adopt the alternation and amendments of Articles of Associations according to the New
Companies Ordinance in Hong Kong and all Articles shall be renumbered accordingly, and that any Director
or the Company Secretary of the Company be and is hereby authorised to do all things necessary to effect and
record the amendments to the Articles of Associations.
It was noted that pursuant to s98 of the New Companies Ordinance, conditions that were contained in the
Memorandum of Association of the Company had been regarded as provisions of the Company’s Articles of
Association.
UNIVISION ENGINEERING LIMITED - 73 - ANNUAL REPORT 2014
NOTICE OF ANNUAL GENERAL MEETING
This proposed business to be approved by a special resolution. Details of the proposed amendments to the
Articles of Associations are set out in the Appendix to this Notice.
By Order of the Board Registered office:
Mr. Stephen Sin Mo KOO 8/F Lever Tech Centre,
Executive Chairman 69-71 King Yip Street
Kwun Tong, Kowloon,
5 September 2014 Hong Kong.
NOTES:
1. Only holders of Ordinary Shares, or their duly appointed representatives, are entitled to attend and vote
at the Annual General Meeting. A member so entitled may appoint one or more proxies (whether they
are members or not) to attend and, on a poll, to vote in place of the member.
2. A form of proxy is enclosed with this notice. To be valid, the form of proxy and any power of attorney
or other authority (if any) under which it is signed, or a notarized and certified copy of that power of
authority, must be lodged with the Company’s registrars, c/o Computershare Investor Services Plc., The
Pavilions, Bridgwater Road, Bristol BS99 6ZY, not less than 48 hours before the Annual General
Meeting takes place.
3. Completion and return of a proxy does not preclude a member from attending and voting at the Annual
General Meeting.
4. The Company pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 specifies that
only those shareholders registered in the Register of Members of the Company as of 1 September 2014
are entitled to attend or vote at the Annual General Meeting in respect to the number of shares registered
in their name at that time. Changes to entries on the Register after that time will be disregarded when
determining the rights of any person to attend or vote in the Annual General Meeting.
UNIVISION ENGINEERING LIMITED - 74 - ANNUAL REPORT 2014
APPENDIX
This Appendix sets out the proposed amendments to the Articles of Associations:
Article 1
(1) By deleting the heading “Table A” appearing immediately above Article 1;
(2) By deleting Article 1 in its entirety and replaced by a new Article 1:
“1. No regulations contained in The Companies (Model Articles) Notice (Cap. 622H) shall apply to the
Company”.
Article 2
(1) By deleting the words “Chapter 32” and replaced by the words “Chapter 622” in the definition of
“Companies Ordinance”, and in the heading of the Articles;
(2) By deleting the words “and includes stock except where a distinction between stock and shares is
expressed or implied” at the end of the definition “share”;
(3) By deleting the words “section 2(1)” and replaced by the words “section 357” in the definition of
“summary financial report”;
(4) By adding the following new definition for “connected entity”:
“shall have the same meaning as that for “an entity connected with a director or former director of a
company” set out in Section 486(1) of the Companies Ordinance”;
(5) By deleting the words “profit and loss account” and “balance sheet” whenever they appear in the
definition of “Annual Report” and replaced by the words “statement of comprehensive income” and
statement of financial position” respectively;
(6) By deleting the words “Article 152” and replaced by the words “Article [*]” in the definition of
“Annual Report”;
(7) By deleting the definition of “newspaper” in its entirety and replaced by a new definition:
“shall mean a newspaper published daily and circulating generally in Hong Kong and specified from
time to time in the list of newspapers issued and published in the Gazette by the Secretary for
administrative service and information”
Article 3A
(1) By deleting Article 3A in its entirety and replaced by a new Article 3A:
“Without prejudice to any special rights previously conferred on the holders of any shares or class of
shares already issued (which special rights shall not be modified or abrogated except with such consent
or sanction as is provided by the next following Article) any share in the Company (whether forming
part of the original capital or not) may be issued with such preferred, deferred, or other special rights,
or such restrictions, whether in regard to dividend, return of capital, voting or otherwise, as the
Company may from time to time by ordinary resolution direct, or, failing such direction, as the Board
shall by resolution determine. Subject to the provisions of the Ordinance the Company may issue
preference shares which are, or which at the option of the Company or the holder are liable, to be
redeemed, on such terms and in such manner as the Directors before the issue thereof may determine.”
UNIVISION ENGINEERING LIMITED - 75 - ANNUAL REPORT 2014
Article 3B
(1) By deleting the words “Where warrants are issued to bearer, no new warrant shall be issued to replace
one that has been lost unless the Board is satisfied beyond reasonable doubt that the original has been
destroyed.”
Article 5
(1) By deleting the words “(including without limitation the powers under section 49B and, if the Company
is a listed company (as defined in the Companies Ordinance), section 49BA of the Companies
Ordinance)”.
Article 6
(1) By deleting the words “all the shares for the time being authorised shall have been issued or” in the first
and second lines; inserting the word “including” before the words “by the creation of new Shares” in the
fourth line; deleting the words “to be of such amount and to be divided into shares of such respective
amounts” in the last two lines and replaced by the words “to be divided into such number of shares”.
Article 8
(1) By deleting the words “and either at par or at a premium,” in the third line.
Article 10
(1) By deleting the words “(and in particular Section 57B thereof)” in the first line;
(2) By deleting the words “all unissued shares in the Company shall be at the disposal of the Board, which”
in the second and third lines and replaced by the words “the Board”;
(3) By deleting the words “but so that no shares shall be issued at a discount, except in accordance with the
provisions of the Ordinance” in the fifth line.
Article 16
(1) By deleting the words “Section 73A of” in the fourth line;
Article 34
By deleting the words “whether on account of the nominal value of the share and/or by way of premium,” in
the second and third lines.
Article 58
By deleting the words “whether on account of the nominal value of the share or by way of premium”, in the
third and fourth lines.
Articles 59, 60, 61 and 62
By deleting the heading “Stock” and Articles 59, 60, 61 and 62 in their entirety.
UNIVISION ENGINEERING LIMITED - 76 - ANNUAL REPORT 2014
Article 63
(1) Article 63(A)(I) - by deleting the words “shares of larger or smaller amount” and replaced by the words
“a larger or smaller number of shares” in the first and second lines; deleting the words “any
consolidation of fully paid shares into shares of larger amount” in the second and third lines and replaced
by the words “any consolidation of fully paid shares into a smaller number of shares”;
(2) Article 63(A)(II) - by deleting the word “and” at the end of this paragraph;
(3) Article 63(A)(III) - by deleting the words “shares of smaller amount than is fixed by the Memorandum
of Association” in the first and second lines and replaced by the words “a larger number of shares”;
deleting the words “unissued or” and the full-stop in the last line; and by adding the word “; and” at the
end of this paragraph;
(4) By adding the following new article as Article 63(A)(IV): “(IV) generally alter its share capital in any
one or more of the ways permitted under the Companies Ordinance.”.
(5) Article 63(B) – by deleting the words “, any capital redemption reserve fund or any share premium
account” in the first and second lines.
Article 64
By adding the words “(or such shorter period as prescribed by legislation)” after the words “fifteen months”
in the third line.
Article 65
By deleting it in its entirety.
Article 66
By deleting the words “an extraordinary general meeting” and replaced by the words “a general meeting
(other than an annual general meeting)” in the first and second lines; and deleting the word “extraordinary”
in the second line and replaced by the word “such”; and deleting the words “section 113 of” in the sixth and
tenth lines.
Article 67
By deleting the words “and, in the case of special business, the general nature of that business,” in the
seventh and eighth lines.
Article 69
By deleting it in its entirety.
Article 74
By deleting the word “one-tenth” and replaced by the word “one-twentieth” in the second line
of (C) and fourth line of (D) respectively.
UNIVISION ENGINEERING LIMITED - 77 - ANNUAL REPORT 2014
Article 79A
By deleting in the fifth line the words “section 115 of”; inserting a full stop immediately after the word
“vote”; deleting the words “, and on” and replaced by the following:
“To the extent permitted by legislation, a member may appoint more than one proxy. The proxies so
appointed are not entitled to vote on the resolution on a show of hands. On”
Article 84
By adding the words “(To the extent permitted by legislation)” before the words “A member” in the fifth
line; and by adding the words “The proxies so appointed are not entitled to vote on a show of hands.” at the
end of the Article.
Article 86
(1) By inserting the sub-paragraph numbering “a.” before the words “48 hours before the time for holding
the meeting” in the fifth line;
(2) By inserting the following as a new sub-paragraph b. immediately after the words “at which the person
named in such instrument proposes to vote” in the sixth line:
“or
b. 24 hours before the time appointed for the taking of a poll in the case of a poll taken more than
48 hours after it was demanded;”
Article 100
Amending Article 100 in the following manner:
By deleting Article 100(F) in its entirety and replaced by a new Article 100(F):
“100. (F) No Director or intended Director shall be disqualified by his office from contracting with the
Company, directly or indirectly, either as vendor, purchaser or otherwise nor shall any such
contract or any contract, arrangement or transaction entered into by or on behalf of the Company
with a Director or any of his associate(s) or his connected entities (as defined under the Ordinance)
(together as his “connected person(s)” for the purpose of this Article) be capable on that account of
being avoided, nor shall any Director be liable to account to the Company for any profit realised by
any such contract, arrangement or transaction provided always that each Director shall forthwith
disclose the nature and extent of his interest or that of his connected person(s) in any contract,
arrangement, or transaction in which he or any of his connected person(s) is interested as required
by and subject to the provisions of the Ordinance and other applicable legislation.”
By deleting the first two lines of Article 100(H) ending with the words “or any of his associate(s)” in their
entirety and replaced by the following:
“(H) A Director shall not vote on any board resolution approving any such contract, arrangement or
transaction in which he or any of his connected person(s)”
By deleting the word “associate(s)” and replaced by the words “connected person(s)” whenever it appears in
Article 100;
UNIVISION ENGINEERING LIMITED - 78 - ANNUAL REPORT 2014
Article 112(B)(I)
By deleting the words “at par or at such premium” in the last two lines.
Article 134(A)
By adding the words “To the extent permitted under the Ordinance,” in the beginning of the first line.
By inserting a full-stop immediately after the words “right to dividend)” in the seventh line; deleting the
words “and accordingly that such sums may be set free” immediately thereafter, and replaced by the words
“Accordingly, such sums may be set free for use as permitted under the Ordinance including”.
By deleting the word “unissued” in the thirteenth line.
By inserting a full-stop after the words “such resolution” in the sixteenth line; and deleting all words
appearing thereafter.
Article 134(B)
By adding the words “(where applicable”) after the words “be capitalized thereby, and” in the third line.
Article 135
By deleting it in its entirety.
Articles 140(A)(I)(d) & (II)(d)
By deleting the words “other than the Subscription Rights Reserve or Conversion Rights Reserve or Capital
Redemption Reserve Fund (if there be any such Reserves)” in the twelfth to fifteenth lines of Articles
140(A)(I)(d) and in the eleventh to fourteenth lines of Articles 140(A)(II)(d) respectively.
Article 155(A)
By deleting the words “Section 141CF(1) of” in the fifth line.
Article 170(A)
By deleting the words “sub-section (2) of Section 165 of” in the fourth line.
Article 170(B)
By deleting the words “section 165 of” in the first line.
UNIVISION ENGINEERING LIMITED - 79 - ANNUAL REPORT 2014