UniVision Engineering Limited
Annual Report
Year ended 31 March 2016
UNIVISION ENGINEERING LIMITED - 0 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
Annual Report
Year ended 31 March 2016
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
8
10
16
17
20
21
23
24
25
26
27
28
29
30
74
UNIVISION ENGINEERING LIMITED - 1 - ANNUAL REPORT 2016
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
Peter Yip Tak CHAN, Director of Sales and Marketing
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
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
Unit 01A, 2/F Sunbeam Centre,
27 Shing 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
15/F., Aubin House
171-172 Gloucester Road,
Wanchai, 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 2016
CHAIRMAN’S STATEMENT
INTRODUCTION
I am pleased to report the Group’s audited results for the financial year ended 31 March 2016.
Turnover for continuing operations in the year increased by 5.2% to £3.87m (2015: £3.68m).
This increase was mainly due to the significant growth in construction contracts which grew
by a remarkable 37.8%. The increased income from construction contract income was offset
to some extent by a decrease in maintenance income.
Looking forward, the Board expects the large infrastructure projects and the line extension of
the MTR Corporation Limited (“MTRC”) in Hong Kong to provide the Company with
opportunities for business growth in the coming years and given the Board’s confidence in the
future, it is declaring an increased final dividend of 0.41 HK cents (gross) per share for the
financial year ended 31 March, 2016 (2015: 0.39 HK cents)
The Directors remain confident of the future of UniVision and are optimistic about the
Group’s prospects.
DISPOSAL OF TAIWANESE SUBSIDIARY
As announced on 28 June 2016, the Group has entered into an agreement to sell its entire
interest in its Taiwan subsidiary- T-Com Technology Company Limited (“the Subsidiary” or
“T-Com”) to Mr. Stephen Koo, the Executive Chairman of the Group.
The Subsidiary recorded a substantial operating loss of NTD23m (£478K) for the year ended
31 March, 2016. Poor trading and economic conditions led to the sharp decrease in its
construction revenue and its gross profit. The weak economic situation and the reduction of
capital expenditure and budgets by the local government and private sector customers for
improving and replacement of their surveillance systems, led to the substantial decrease in job
orders in the Taiwan subsidiary.
The Board sees no immediate prospect for improvement in the situation. Before the disposal,
the Group owned 52.25% interest in the Subsidiary and shared the losses it suffered pro rata
to that holding. The terms of the disposal enable UniVision to avoid any share of future
losses. It also provides the option for the Group to repurchase the company if the business
returns to profitability within the next five years.
The terms of the sale provide for consideration of HK$600K to be settled in cash. In addition,
the Group will receive repayment of outstanding debts and other amounts due from the
Subsidiary within 24 months of completion
Mr. Stephen Koo currently provides a personal guarantee for the banking facilities of T-Com
and due to the requirement for a third party purchaser to replace this guarantee, and having
regard to the poor operating results and the difficult trading conditions, the Board considered
this arrangement to be the best available to the Group. .
UNIVISION ENGINEERING LIMITED - 3 - ANNUAL REPORT 2016
CHAIRMAN’S STATEMENT
(Continued)
The disposal enables UniVision’s Management to focus attention and resources on its local
security and surveillance business.
The value of the assets and liabilities of T-Com were £3,617K and £3,215K as 31 March,
2016, respectively which included in the financial statements as Assets/Liabilities of Disposal
Group classified as held for sale. The net value was £402k as at 31 March 2016.
The operating result of T-Com for this year: loss £478K (2015: profit £110K) is presented in
the financial statements as loss/profit from discontinued operations.
Completion of the sale process is underway and notarised documents for the proposed share
transfer have been submitted to the Taiwan authorities for approval.
POTENTIAL CLAIM
Legal proceedings were initiated by Nan Ning Hai Li Real Estate Development Limited (“Hai
Li” or the “Plaintiff”) against Mr Stephen Koo and UniVision in the Hong Kong High Court
on 10 March 2016. The Plaintiff has claimed damages in respect of breach of contract and/or
duty for a share transfer agreement which it claims was entered between Hai Li and Mr
Stephen Koo for the purchase of Stephen Koo’s 41% shareholding in UniVison on 14
December 2015 and in a series of oral agreements between Hai Li and Mr Stephen Koo and
UniVision represented by Mr Stephen Koo made before and after the 14 December 2015. As
announced on 25 April 2016, Mr Koo and UniVision received the Acknowledgement of
Service of Writ of Summons from the solicitor of the Plaintiff and have returned to the
Registry of the High Court the accompanying Acknowledgment of Service contesting the
proceedings.
As announced on 24 August 2016, Mr Stephen Koo and UniVision have received the
Statement of Claim from the solicitor of the Plaintiff and their legal counsel is now drafting a
Defence based on the evidence. The Defence is expected to be filed with the Court by early
September, 2016.
Based on preliminary legal opinion the directors believe that the allegations and the causes of
action as set out in the Statement of Claim are not at all clear and doubt that the Plaintiff can
substantiate them. Accordingly UniVision is applying to the Court to strike out the claims
against it.
FINANCIAL REVIEW
‘Continuing operations’ represent the Group’s Security and Surveillance Systems business
undertaken by the Hong Kong Company. The same business undertaken by the Taiwan
Subsidiary is now classified as discontinued operations. The loss from the discontinued
operations during the year was £478K (2015: profit £110K).
The profit from the continuing operations attributable to the equity holders of the Company is
£138K (2015: £33K). Having regard to the low economic growth and keen competitive
environment the Directors are encouraged by this result.
The Group generated positive net cash of £22K from its operating activities in the year (2015:
£328K). The Hong Kong company, in which the continuing operations are based has no
external
UNIVISION ENGINEERING LIMITED - 4 - ANNUAL REPORT 2016
CHAIRMAN’S STATEMENT
(Continued)
loan and maintained a cash balance of £0.65m at the year end. The Directors attribute this to
close monitoring and effective control of working capital. The group as a whole had cash and
cash equivalents at 31 March 2016 of £0.95m (31 March 2015: £1.2m).
During the year under review the relative strengthening of the HK$ against GBP has led to a
6.9% appreciation in the GBP reported amount in the Consolidated Statement of
Comprehensive Income. Also, a relative strengthening of HK$ at the year-end has led to a
2.9% appreciation in the GBP reporting amount in the Consolidated Statement of Financial
Position. All figures in the Financial Statements therefore needed to be adjusted for
comparison purposes.
Turnover from continuing operations in the year increased by 5.2% to £3.87m (2015:
£3.68m). This increase was mainly due to the significant growth in construction contract
income. .The revenue from construction contracts (excluded the discontinued operations)
increased by 38% or £0.6m as compared with last year. The growth of construction revenue in
Hong Kong was mainly due to the income of £290K from the Hong Kong-Zhuhai-Macao
Bridge Project, and £264K from the South Island Line Project. Additionally construction
contracts, including the installation, relocation, modification and replacement works were
provided by MTR Corporation Limited. These projects show the Company’s ability to win
and deliver on projects in a highly competitive environment.
On the other hand, the revenue of the Group’s maintenance contracts (excluded the
discontinued operations) compared declined by 34.2% mainly due to the change of scope in
the services provided in the new maintenance contract to MTRC, a three year contract
commencing on 1 January 2015. In addition, fewer sub-contract orders were received because
the coming major CCTV replacement project for the railway lines of MTRC will be launched
in 2017. Nevertheless, maintenance contract and its sub-contracts provided regular cash flow
for the Group’s operations.
Gross profit margin for continuing operations increased to 32% (2015: 29%). The major
reason was the increase in gross profit from 18% to 33% in the Group’s construction contracts
These increment was contributed from a few orders with comparatively high profit margin.
The effective and efficient control of human resources, material costs, logistics and sub-
contracting charges also contributed the increment.
The higher gross profit of construction segment offset the effect by decrease in gross profit
margin of maintenance contracts. The gross profit margin for the Group's maintenance
business for the period was decreased 8% due to the initial purchase cost for installation of
equipment in the main maintenance contract with MTRC and increased cost for changing
parts for systems.
Against the improved gross profit, administration expenses for continuing operations
remained constant at £955K (2015: £892K)
Net profit before income tax from continuing operations was £138K (2014: £33K). Basic
profit from continuing operations per share for this year was 0.04p (2015: 0.01p).
No significant capital investment occurred in the year.
The directors propose the payment of a final dividend of 0.41 HK cents (gross) per share for
the financial year ended 31 March, 2016 (2015: 0.39 HK cents). The dividend timetable is as
follows:
UNIVISION ENGINEERING LIMITED - 5 - ANNUAL REPORT 2016
CHAIRMAN’S STATEMENT
(Continued)
Ex date
Record date
Payment date
15 September 2016
16 September 2016
10 October 2016
The dividend is subject to approval by shareholders at the Annual General Meeting and has
not been included as a liability in the financial statements.
BUSINESS REVIEW
Markets
According to Tech Navio's analysts’ forecast, the Global Video Surveillance market will grow
steadily at a Compound Annual Growth Rate of 22 per cent over the period of four years from
2016 to 2020. The increasing demand for wireless network infrastructure is the key growth
driver for this market. Moreover, the increase in concern over security and the demand to
replace analogue systems with Internet protocolbased systems, is also expected to boost the
market in the forecast period.
High demand for the IP cameras is expected because the total cost of operations is lower than
with analogue cameras .Besides, IP cameras are more flexible and secure than analogue
cameras.
UniVision will commit resources to accessing and developing new technologies and solutions
to cope with the opportunities in Internet Protocol and High Definition CCTV System
technology.
Based on the above, the Board anticipates demand for Security and Surveillance Systems
from local government infrastructure projects and the commercial sector will increase in
coming years. On the other hand, there may well be increased competition leading to reduced
income and so the Company will explore other market segments, such as rolling stock
business in railway to strengthen the business growth.
Business
During the year, the Hong Kong Company has participated in the Pre-Qualification process
for the CCTV Replacement project for Hong Kong MTR. The project is expected to replace
about 6,500 CCTV cameras from analogue-based with IP-based units. Since our Company
currently is the CCTV System maintainer for MTR, we are in a good position to bid for this
project.
To support the Pre-Qualification, the Company is negotiating partnership arrangements with
certain PRC enterprises. This will be facilitated by the disposal of UniVision’s interest in T-
Com, its Taiwan subsidiary on the ground that tendering for government projects are not
allowed if there is PRC funding in its shareholding company. The strategy also optimises the
Group’s operational efficiency. This disposal should improve the operating result of T-Com.
After the de-merger of Leader Smart Group, the Security and Surveillance Systems business
is the only business segment performed by the Group. The major customers are public
organisations and sizeable private enterprises, such as the Electricial and Mechanical Services
Department (“EMSD”) of the Hong Kong Government and MTRC in Hong Kong which are
the two largest customers in this financial year.
UNIVISION ENGINEERING LIMITED - 6 - ANNUAL REPORT 2016
CHAIRMAN’S STATEMENT
(Continued)
PROSPECTS
.
The Board expects that the growing demand for its network and high definition security and
surveillance products will enable the Group to continue to prosper in these markets.
The Company continues to actively tender for new construction contracts while maintaining
its stake in the maintenance sector of Security & Surveillance market. As the subsequent
completion of some major infrastructure projects, such as the Third Runway of Hong Kong
International Airport and extension of railway lines, such as the new line Shatin-Central, the
Board is optimistic about the prospects for business growth in the coming years.
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
2 September 2016
UNIVISION ENGINEERING LIMITED - 7 - ANNUAL REPORT 2016
DIRECTORS AND SENIOR
MANAGEMENT’S BIOGRAPHIES
DIRECTORS’ BIOGRAPHIES
Nicholas James LYTH – Non-executive Director (aged 50)
Mr. Lyth is a qualified chartered management accountant and has over 16 years
experience as a finance professional, having spent a number of years as director of UK
companies. He has lived and worked in China and can speak and write Mandarin. Nicholas is
currently Non Executive Chairman of Taihua plc, an AIM quoted manufacturer of
pharmaceuticals, based in China. He is responsible for day to day liaison with UK investors.
Stephen Sin Mo KOO – Executive Chairman (aged 58)
Mr. Koo joined UniVision in 1998 and was appointed as a Director on 3 March 2003.
He is responsible for overall strategic planning of our Group. He holds both a Bachelor
Degree from the University of Technology, Sydney, and a Masters Degree in Business from
the Royal Melbourne Institute of Technology in Australia. He is the Director of Up Sky
Investments Limited and UniVision Holdings Limited, the Group’s major shareholding
companies. He is a Fellow of the Institute of Certified Public Accountants of Australia.
Chun Pan WONG – Chief Executive Officer (aged 56)
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 52)
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 and food manufacturing MNC. Mr. Yip has over 20 years experience in
finance and accounting in different industries. He is a member of Hong Kong Institute of
Certified Public Accountants. He also acts as Company Secretary for the Corporation.
UNIVISION ENGINEERING LIMITED - 8 - ANNUAL REPORT 2016
DIRECTORS’ AND SENIOR
MANAGEMENT’S BIOGRAPHIES
(Continued)
Peter Yip Tak CHAN – Director of Sales and Marketing (aged 52)
Mr. Chan joined UniVision in 1995 and was appointed as a Director on 3 October
2014. He holds a Degree in Computing from the University of Northwest Missouri and has
over 10 years experience in sales and project management. He is responsible for the
management of UniVision’s Sales and Marketing Division.
SENIOR MANAGEMENT’S BRIEF BIOGRAPHIES
Mike Chiu Wah CHAN – Director of Operations (aged 41)
Mr. Chan joined UniVision as Assistant Engineer in December 1996, and was
promoted to a number of increasingly senior positions in maintenance and project department,
prior to being appointed to his present position on 2 January 2008. He is now responsible for
the management of UniVision’s Project and Maintenance Division. Mr. Chan holds a
Bachelor of Engineering degree in Industrial and Manufacturing System Engineering from
The University of Hong Kong.
UNIVISION ENGINEERING LIMITED - 9 - ANNUAL REPORT 2016
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 2016.
Principal Activities
The principal activities of the Company are the supply, design, consultation,
installation and maintenance of closed circuit television and surveillance systems, and
the sale of security related products.
Discontinued Operation
The Group discontinued its security and surveillance systems business undertaken by
the Taiwan Subsidiary as 31 March, 2016 by selling its entire holding interest to the
Group’s Executive Chairman.
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 2016 and the state of affairs of the
Group at that date are set out in the consolidated statement of comprehensive income
on page 23 and in the consolidated statement of financial position on page 24,
respectively.
The Group’s and the Company’s changes in shareholders’ equity for the year ended 31
March 2016 are set out in the consolidated and the Company’s statement of changes in
equity on page 26 and 27, respectively.
The Group’s and the Company’s cash flow for the year ended 31 March 2016 is set out
in the consolidated and the Company’s statement of cash flows on pages 28 to 29.
UNIVISION ENGINEERING LIMITED - 10 - ANNUAL REPORT 2016
DIRECTORS’ REPORT
(Continued)
Key Performance Indicators (KPI)
Continuing operations
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
Key Performance Indicators (KPI)
Continuing and discontinuing operations
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
2016
2015
1.8
1.8
87 days
70 days
3.5
32%
n/a
1.4
3.1
29%
n/a
1.4
2016
2015
1.4
1.6
48 days
52 days
5.5
20%
0.23
4.1
27%
0.21
1.2
1.3
:
:
:
:
:
:
:
:
:
:
:
:
UNIVISION ENGINEERING LIMITED - 11 - ANNUAL REPORT 2016
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 26.
Dividends
The Directors propose that the payment of a final dividend of 0.41 HK cents (gross) per
share for the financial year ended 31 March 2016.
Plant and Equipment
Details of the movements in plant and equipment are set out in note 16 on pages 59 to
60.
Directors
The directors who held office during the year and to the date of this report were as
follows:
Stephen Sin Mo KOO
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
Mr. Chun Pan WONG, Mr. Nicholas James LYTH and Mr. Peter Yip Tak CHAN
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 2016
Stephen Sin Mo KOO
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
279,703,700*
-
-
-
-
UNIVISION ENGINEERING LIMITED - 12 - ANNUAL REPORT 2016
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.
A share transaction effected on 17 November 2015, Up Sky Investments Limited transferred
its entire stake in UniVision Holdings Limited to Mr. Stephen Koo. In addition, Mr. Stephen
Koo is also interested in 17,223,700 ordinary shares in the Company.
In summary, Mr. Stephen Koo has a total direct and indirect interest in 279,703,700 ordinary
shares in the Company, equivalent to 72.9% of the Company’s total issued share capital.
Save as disclosed in this report, none of the Directors (or their immediate families) who held
office at the end of the financial year had interests in the share capital of the Company during
the financial year.
Directors’ Rights to Acquire Shares or Debentures
At no time during the year were rights to acquire benefits by means of the acquisition of
shares in or debentures of the Company granted to any director or their respective spouse or
minor children, or were any such rights exercised by them; or was the Company, its holding
company, or its subsidiaries a party to any arrangement to enable the directors of the
Company to acquire by means of the acquisition of shares in, or debentures of any other body
corporate.
Substantial Shareholdings
As at 30 August 2016, the Directors had been informed of the following companies that held
3% or more of the Company’s issued ordinary share capital:
UniVision Holdings Limited
(1)
Up Sky Investments Limited
(2)
Hargreaves Lansdown
(Nominees) Limited
Beaufort Nominees Limited
Number
ordinary shares
of
183,736,000
% of total issued share
capital
47.9
78,744,000
20.5
35,120,275
9.2
23,537,998
6.1
UNIVISION ENGINEERING LIMITED - 13 - ANNUAL REPORT 2016
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 Up Sky Investments Limited
Up Sky Investments Limited transferred the entire stake to Mr. Stephen KOO on 17
November 2015.
(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 £86 charitable contributions (2015: £80.). No political
contribution was made.
Employees
The Group values staff involvement at all levels of operations, and uses various means to
train, inform and consult the employees. The Group encourages the management to discuss
regularly with the employees on both corporate and individual matters and discloses
information to them that will increase their awareness of the financial and economic factors
affecting the Group.
The Group recognises its obligations to provide a fair consideration on all vacancies towards
people with disability and to ensure that such persons are not discriminated against on the
grounds of their disability. For those employees who become disabled during their
employment period, the Group will make every effort to ensure that their employment will
continue and that sufficient training is arranged.
Annual General Meeting
The Annual General Meeting of the Company will be held at UniVision Engineering Limited,
Unit 01A, 2/F Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong, on
30 September 2016 at 5:00 p.m. The Notice of Meeting appears on page 74.
Annual Report
The annual report for the year ended 31 March 2016 will be uploaded on the Company’s
website www.uvel.com on 2 September, 2016 upon announcement and the hard copy will be
sent to shareholders by our Registrars, Computershare Investor Services (Jersey) Limited.
Auditor
HKCMCPA Company Limited, Certified Public Accountants, remain as our auditor for the
year. A resolution to re-appoint HKCMCPA Company Limited, Certified Public Accountants
as auditor of the Company will be put to the forthcoming Annual General Meeting.
UNIVISION ENGINEERING LIMITED - 14 - ANNUAL REPORT 2016
DIRECTORS’ REPORT
(Continued)
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
Hong Kong
2 September 2016
UNIVISION ENGINEERING LIMITED - 15 - ANNUAL REPORT 2016
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
£
2016
Total
£
2015
Total
£
Executive Directors
Stephen Sin Mo KOO
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
Non-executive Director
Nicholas James LYTH
-
56,771
45,417
45,634
-
1,546
1,546
1,546
-
5,600
4,107
4,127
-
63,917
51,070
51,307
24,116
56,033
45,106
24,575
12,367
-
1,402-
13,769
11,518
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 - 16 - ANNUAL REPORT 2016
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.
UNIVISION ENGINEERING LIMITED - 17 - ANNUAL REPORT 2016
-
-
-
-
-
-
-
REPORT ON CORPORATE GOVERNANCE
(Continued)
The responsibilities of the Committee are to:
- monitor the quality of the overall internal control system of all financial matters;
-
review the Company’s Accounting Policies and ensure compliance with accounting
standards;
ensure that the financial performance of the Company is properly measured and reported
on;
consider the appointment/re-appointment of the external auditor;
review the conduct of the audit and discuss the audit fees;
review reports from the Auditors relating to the Company’s accounting and internal
controls;
to ensure the Company complies with the AIM Rules.
Remuneration Committee
Our Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive
Director) and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr.
Nicholas James LYTH. The Remuneration Committee meets as required.
The responsibilities of the Committee are to:
determine the specific remuneration package for each Director including Director’s fees,
salaries, allowances, bonuses, options, benefits-in-kind; and
seek for 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.
UNIVISION ENGINEERING LIMITED - 18 - ANNUAL REPORT 2016
REPORT ON CORPORATE GOVERNANCE
(Continued)
Going Concern
After making appropriate enquiries, the Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational existence for
the foreseeable future. For this reason, they continue to adopt the going concern basis in
preparing the Company’s and Group’s financial statements.
Investor Relations
The Company realises that effective communication can increase transparency and
accountability to its shareholders; as such, the Company discloses its information to its
shareholders through RNS (i.e. the news distribution service operated by the London
Stock Exchange plc). The same information can also be found on the Company’s website
(www.uvel.com). The Company will make every effort to ensure that all price-sensitive
information is released publicly and immediately. If an immediate announcement is not
possible, the Company will try to publicize the information at the earliest time possible to
ensure that the shareholders and the public have fair access to it.
The Company will send the Annual Report and the notice of the Annual General Meeting
(AGM) to all its shareholders. This notice is also made available on RNS. The Company
recognises the importance of the shareholders’ views and encourages them to attend the
AGMs where they can share their opinions and raise direct queries and concerns towards
the Directors, including the chairperson of each of the Board Committees. The
shareholders are also welcomed to discuss any issues on an informal basis at the
conclusion of the AGMs.
UNIVISION ENGINEERING LIMITED - 19 - ANNUAL REPORT 2016
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Directors’ Report and the financial
statements in accordance with applicable law and regulations.
The Directors are responsible for preparing financial statements for each financial year
which give a true and fair view of the state of affairs of the Group and the Company
and of the profit or loss for that year.
In preparing those financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to
any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group and the Company will continue in
business.
The Directors are responsible for keeping proper accounting records that disclose with
reasonable accuracy at any time the financial position of the Company. They have
general responsibility for taking such steps as are reasonably available to them to
safeguard the assets of the Group and the Company to prevent and detect fraud and
other irregularities.
UNIVISION ENGINEERING LIMITED - 20 - ANNUAL REPORT 2016
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
subsidiary (collectively referred to as the “Group”) set out on pages 21 to 72, which comprise the
Consolidated and the Company Statement of Financial Position as at 31 March 2016, and the
Consolidated Statement of Comprehensive Income, the Consolidated and the Company Statement of
Changes in Equity and the Consolidated and the Company Statement of Cash Flows for the year then
ended, and a summary of significant accounting policies and other explanatory notes.
This report is made solely to the Company’s shareholders, as a body, in compliance with the
Alternative Investment Market Rules (“AIM Rules”) for companies as published by the London Stock
Exchange plc. Our audit work has been undertaken so that we might state to the Company’s
shareholders those matters we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s shareholders as a body for this report or for the opinions
we have formed.
Directors’ responsibility for the financial statements
The Directors are responsible for the preparation of these financial statements in accordance with
International Financial Reporting Standards and for being satisfied that they give a true and fair view
and for such internal control as the Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatement.
Scope of the audit of the financial statements
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation of financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the Directors, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
UNIVISION ENGINEERING LIMITED - 21 - ANNUAL REPORT 2016
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 2016 and their financial performance and cash flows for
the year then ended, in accordance with International Financial Reporting Standards.
HKCMCPA Company Limited
Certified Public Accountants
PANG KING SZE, RUFINA
Practising Certificate number P05228
Hong Kong, China
2 September 2016
UNIVISION ENGINEERING LIMITED - 22 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2016
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Other gains and losses
Selling and distribution expenses
Administrative expenses
Finance costs
Profit before income tax
Income tax expense
Notes
2016
£
2015
£
7(a)
3,866,521
3,675,494
10
(2,615,802)
(2,613,541)
1,250,719
1,061,953
9,118
(36,730)
(121,090)
(963,072)
(1,234)
2,308
(35,039)
(103,185)
(891,872)
(1,149)
137,711
33,016
-
-
8
9
10
10
12
13
Profit for the year from continuing operations
137,711
33,016
Discontinued operations
(Loss)/profit for the year from discontinued operations
31
(478,320)
79,539
(Loss)/profit for the year
(340,609)
112,555
Other comprehensive income, net of tax
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translation foreign operations
142,154
51,339
Total comprehensive income for the year
(198,455)
163,894
(Loss)/profit attributable to :
Equity shareholders of the Company
Profit from continuing operations
(Loss)/profit from discontinued operations
Equity shareholders of the Company
Non-controlling interests
Total comprehensive (loss)/income attributable to:
Equity shareholders of the Company
Non-controlling interests
137,711
(249,922)
(112,211)
(228,398)
33,016
26,921
59,937
52,618
(340,609)
112,555
39,945
(238,400)
78,311
85,583
(198,455)
163,894
Earnings per share – Basic and Diluted
Continuing and discontinued operations
Continuing operations
14
14
(0.03)p
0.04p
0.02p
0.01p
UNIVISION ENGINEERING LIMITED - 23 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2016
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
Assets of disposal group classified as held for sale
Total assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Current tax liability
Loan and borrowings
Obligations under finance lease
Total current liabilities
Non-current liabilities
Obligations under finance lease
Liabilities of disposal group classified as held for sale
Total liabilities
Equity
Share capital
Reserves
Notes
2016
£
2015
£
16
17
21
19
21
22
22
31
42,629
-
3,064,336
47,629
25,830
2,973,435
3,106,965
3,046,894
749,189
2,460,855
448,056
654,244
1,205,464
4,323,003
251,641
1,221,707
4,312,344
7,001,815
3,616,582
-
11,035,891
10,048,709
23
24(a)
25
26
2,505,939
-
-
660
3,242,616
34,442
1,122,052
7,694
2,506,599
4,406,804
26
31
27
-
3,214,990
641
-
5,721,589
4,407,445
1,697,617
3,462,605
1,697,617
3,551,167
Equity attributable to equity shareholders of the Company
5,160,222
5,248,784
Non-controlling interests
Total equity
154,080
392,480
5,314,302
5,641,264
10,048,709
Total liabilities and equity
The financial statements on pages 21 to 74 were authorised for issue by the board of directors on 2
September 2016 and were signed on its behalf by:
11,035,891
Stephen Sin Mo KOO, Director
Chun Pan WONG, Director
UNIVISION ENGINEERING LIMITED - 24 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2016
ASSETS
Non-current assets
Plant and equipment
Interest in a subsidiary
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
Obligations under finance lease
Total current liabilities
Non-current liability
Obligations under finance lease
Total liabilities
Equity
Share capital
Reserves
Total equity
Total liabilities and equity
Notes
2016
£
2015
£
16
18
21
19
21
22
22
23
26
26
27
42,629
99,500
3,064,336
32,248
106,384
2,973,435
3,206,465
3,112,067
750,353
2,460,855
448,056
654,244
841,910
1,839,318
251,641
1,044,484
4,313,508
3,977,353
7,519,973
7,089,420
2,505,939
660
2,257,803
7,694
2,506,599
2,265,497
-
641
2,506,599
2,266,138
1,697,617
3,315,757
1,697,617
3,125,665
5,013,374
4,823,282
7,519,973
7,089,420
The financial statements on pages 21 to 74 were authorised for issue by the board of directors on 2
September 2016 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Pan WONG, Director
UNIVISION ENGINEERING LIMITED - 25 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2016
Share
capital
£
Share
premium
£
(Note 1)
Attributable to the equity shareholders of the Company
Statutory
surplus
reserves
£
Retained
earnings
£
Special
capital
reserve “A”
£
(Note 2)
Special
capital
reserve “B”
£
(Note 3)
Translation
reserve
£
Sub-total
£
Non-
controlling
interest
£
Total
equity
£
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
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59,937
-
-
59,937
(6,926)
(4,014,851)
(791,425)
-
(103,561)
(4,916,763)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59,937
52,618
112,555
18,374
18,374
32,965
51,339
18,374
18,374
32,965
51,339
18,374
78,311
85,583
163,894
6,926
6,850
-
-
-
-
(722,990)
-
-
-
-
(4,730,991)
(791,425)
-
-
-
-
(26,372)
(103,561)
-
-
(4,730,991)
(791,425)
(26,372)
(103,561)
13,776
(722,990)
(5,625,977)
(26,372)
(5,652,349)
1,697,617
2,192,640
71,147
155,876
143,439
21,703
966,362
5,248,784
392,480
5,641,264
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(112,211)
-
-
(112,211)
(4,241)
-
(128,507)
(132,748)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(112,211)
(228,398)
(340,609)
152,156
152,156
(10,002)
142,154
152,156
152,156
(10,002)
142,154
152,156
39,945
(238,400)
(198,455)
4,241
(6,850)
-
-
6,850
-
-
-
(128,507)
(2,609)
6,850
(128,507)
-
-
-
-
-
-
(128,507)
(128,507)
Balance at 1 April 2014
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
Transfer to statutory surplus reserves
Effect on demerger
De-merger by dividend in specie
Dividend distributed by a subsidiary
Dividend paid in respect of 2014 year
Total transactions with owners,
recognised directly in equity
Balance at 31 March 2015
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
Transfer to statutory surplus reserves
Reversal of Translation effect on
demerger
Dividend paid in respect of 2015 year
Total transactions with owners,
recognised directly in equity
Balance at 31 March 2016
1,697,617
2,192,640
(173,812)
155,876
143,439
19,094
1,125,368
5,160,222
154,080
5,314,302
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 2016.
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$2,071,307 was credited as a result of the
capital reduction.
UNIVISION ENGINEERING LIMITED - 26 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2016
Attributable to equity shareholders of the Company
Share
capital
£
Share
premium
£
(Note 1)
Accumulated
losses
£
Special
capital
reserve “A”
£
(Note 2)
Special
capital
reserve “B”
£
(Note 3)
Translation
reserve
£
Total
equity
£
Balance at 1 April 2014
1,697,617
2,192,640
(176,501)
155,876
143,439
309,740
4,322,811
Comprehensive income:
Profit or loss
Other comprehensive income:
Exchange difference arising on translation
of foreign operations
Total other comprehensive income for the
year, net of tax
Total comprehensive income
Demerger by dividend in specie
Dividend paid in respect of 2014 year
Total transactions with owners,
recognised directly in equity
-
-
-
-
-
-
-
-
-
-
-
-
-
-
789,219
-
-
789,219
(791,425)
(103,561)
(894,986)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
789,219
606,238
606,238
606,238
606,238
606,238
1,395,457
-
-
-
(791,425)
(103,561)
(894,986)
Balance at 31 March 2015
1,697,617
2,192,640
(282,268)
155,876
143,439
915,978
4,823,282
Comprehensive income:
Profit or loss
Other comprehensive income:
Exchange difference arising on translation
of foreign operations
Total other comprehensive income for the
year, net of tax
Total comprehensive income
Dividend paid in respect of 2015 year
Total transactions with owners,
recognised directly in equity
-
-
-
-
-
-
-
-
-
-
-
-
171,767
-
-
171,767
(128,507)
(128,507)
-
-
-
-
-
-
-
-
-
-
-
-
-
171,767
146,832
146,832
146,832
146,832
146,832
318,599
-
-
(128,507)
(128,507)
Balance at 31 March 2016
1,697,617
2,192,640
(239,008)
155,876
143,439
1,062,810
5,013,374
The currency translation from Hong Kong Dollars (“HK$”) 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 2016.
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 - 27 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2016
Cash flows from operating activities
Profit before income tax
Adjustments for:
Interest expense
Interest income
Depreciation of plant and equipment
Impairment loss recognised on other receivables
Impairment loss on goodwill
Loss on disposal of plant and equipment
Changes in operating assets and liabilities:
Decrease/(increase) in inventories
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
Net cash (used in)/generated from operations
Net cash generated from disposal group
Net cash generated from operating activities
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Increase in bank deposit
Proceeds from disposal of plant and equipment
Net cash used in disposal group
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Dividend paid to shareholders of the Company
Repayment of finance lease liabilities
Net cash generated from disposal group
Net cash (used in)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Less: cash and cash equivalents from disposal group classified as
held for sale
Effect of foreign exchange rate changes
Cash and cash equivalents at end of year
Notes
2016
£
2015
£
137,711
33,016
12
8
16
9
31
8
31
12
15
31
31
22
1,234
(959)
16,546
21,470
25,830
-
201,832
111,894
(457,008)
65,846
(77,436)
99,200
21,764
959
(25,558)
(180,842)
-
(9,603)
(215,044)
(1,234)
(128,507)
(7,588)
51,429
(85,900)
(279,180)
1,221,707
(300,527)
12,244
1,149
(868)
14,605
(727,046)
-
38
(679,106)
(4,750)
199,516
582,765
98,425
229,339
327,764
868
(26,886)
-
480
(8,475)
(34,013)
(1,149)
(95,137)
(7,068)
518,555
415,201
708,952
379,860
-
132,895
654,244
1,221,707
UNIVISION ENGINEERING LIMITED - 28 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 March 2016
Cash flows from operating activities
Profit before income tax
Adjustments for:
Interest expense
Interest income
Depreciation of plant and equipment
Loss on disposal of plant and equipment
Impairment loss recognised on other receivables
Changes in operating assets and liabilities:
Decrease/(increase) in inventories
(Increase)/decrease in trade and other receivables
Decrease in amount due from a former subsidiary
Increase in trade and other payables
Notes
2016
£
2015
£
16
171,768
789,219
1,233
(959)
16,546
-
21,470
1,149
(869)
14,605
38
(727,046)
210,058
77,096
111,894
(457,008)
8,154
65,846
(4,750)
199,516
28,302
582,765
Net cash (used in)/generated from operating activities
(61,056)
882,929
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Increase in bank deposit
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
Repayment of finance lease liabilities
959
(25,558)
(180,842)
-
(205,441)
(1,233)
(128,507)
(7,588)
869
(26,886)
-
480
(25,537)
(1,149)
(95,137)
(7,068)
Net cash used in financing activities
(137,328)
(103,354)
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
(403,825)
1,044,484
13,585
754,038
160,210
130,236
Cash and cash equivalents at end of year
22
654,244
1,044,484
UNIVISION ENGINEERING LIMITED - 29 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
1. GENERAL
UniVision Engineering Limited (“the Company”) is incorporated in Hong Kong with limited
liability and its shares are listed on the Alternative Investment Market of the London Stock
Exchange (“AIM”). The address of the registered office is Unit 1A, 2/F., Sunbeam Centre, 27
Shing Yip Street, Kwun Tong, Kowloon, Hong Kong.
The financial statements are presented in Sterling Pound (“£”), which is the presentation
currency of the Company.
The Company and its subsidiary (hereinafter collectively referred to as the “Group”) are mainly
engaged in the supply, design, installation and maintenance of closed circuit television and
surveillance systems and the sale of security system related products. The principal activities of
its subsidiary 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 5 in the
financial statements.
UNIVISION ENGINEERING LIMITED - 30 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
3.
APPLICATION OF NEW AND REVISED
REPORTING STANDARDS (“IFRSs”)
INTERNATIONAL FINANCIAL
(a) New and revised IFRSs that have been issued and effective
The following standards have been adopted by the Group and the Company for the first time for
the year ended 31 March 2016:
- Amendments
to IAS 19 “Employee benefits: Defined benefit plans: Employee
contribution” introduce a relief to reduce the complexity of accounting for certain
contributions from employees or third parties under defined benefit plans. When the
contributions are eligible for the practical expedient provided by the amendments, a
company is allowed to recognise the contributions as a reduction of the service cost in the
period in which the related service is rendered, instead of including them in calculating the
defined benefit obligation. The amendments do not have an impact on these financial
statements.
- Annual
improvements
to IFRSs 2010-2012 cycle and 2011-2013 cycle contain
amendments to nine standards with consequential amendments to other standards. Among
them, IAS 24 “Related party disclosures” has been amended to expand the definition of a
“related party” to include a management entity that provides key management personnel
services to the reporting entity, and to require the disclosure of the amounts incurred for
obtaining the key management personnel services provided by the management entity.
(b) New and revised IFRSs that have been issued but are not yet effective
The following new and revised IFRSs, potentially relevant to the Group’s and the Company’s
operations, have been issued and are mandatory for adoption by the Group and the Company for
accounting periods beginning on or after 1 January 2016 or later periods. However, the Group
and the Company have not early adopted them.
IFRS 9 (2014) “Financial instruments”
IFRS 15 “Revenue from contracts with customers”
•
•
• Amendments to IFRS 11 “Accounting for acquisitions of interests in joint operations”
• Amendments to IAS 16 and IAS 38 “Clarification of acceptable methods of depreciation
and amortisation”
• Amendments to IFRS 10 and IAS 28 “Sale or contribution of assets between an investor and
its associate or joint venture”
• Annual improvements to IFRSs 2012-2014 cycle
The Group and the Company have not applied any new or revised IFRSs that are not yet
effective for the accounting year ended 31 March 2016.
UNIVISION ENGINEERING LIMITED - 31 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of consolidation
(a)
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control.
The Group controls an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power
over the entity. Subsidiaries are consolidated from the date on which control is transferred to
the Group. They are deconsolidated from the date that control ceases. Inter-company
transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
The Group uses the acquisition method of accounting to account for business combinations.
The consideration transferred for the acquisition of a subsidiary is the fair values of the assets
transferred, the liabilities incurred and the equity interests issued by the Group. The
consideration transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Acquisition related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date. On an acquisition-
by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at
fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are
accounted for as equity transactions, whereby adjustments are made to the amounts of
controlling and non-controlling interests within consolidated equity to reflect the change in
relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.
(b)
Separate financial statements
In the individual Company’s statement of financial position, interests in subsidiaries are
accounted for at cost less impairment loss. Cost includes direct attributable costs of investment.
The results of subsidiaries are accounted for by the Company on the basis of dividend received
and receivable.
Impairment testing of the interests in subsidiaries is required upon receiving a dividend from
these investments if the dividend exceeds the total comprehensive income of the subsidiary for
the period the dividend is declared or, if the carrying amount of investment in the separate
financial statements exceeds the carrying amount in the consolidated financial statements, of
the investee’s net assets including goodwill.
UNIVISION ENGINEERING LIMITED - 32 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.1 Basis of consolidation (continued)
(c) Non-controlling interests
Non-controlling interests represent the equity in a subsidiary not attributable directly or
indirectly to the Company, and in respect of which the Group has not agreed any additional
terms with the holders of those interests which would result in the Group as a whole having a
contractual obligation in respect of those interests that meets the definition of a financial
liability. For each business combination, the Group can elect to measure any non-controlling
interests either at fair value or at the non-controlling interest’s proportionate share of the
subsidiary’s net identifiable assets.
Non-controlling interests are presented in the consolidated statement of financial position
within equity, separately from equity attributable to the equity shareholders of the Company.
Non-controlling interests in the results of the Group are presented on the face of the
consolidated statement of comprehensive income as an allocation of the total profit or loss and
total comprehensive income for the year between non-controlling interests and the equity
shareholders of the Company.
4.2 Segment reporting
An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incurs expenses, including revenues and expenses that relate to
transactions with other components of the Group. Operating segments are reported in a manner
consistent with the internal reporting provided to the chief operating decision-maker. The
Group’s Executive Director, Mr. Stephen Sin Mo KOO is responsible for allocating resources
and assessing performance of the operating segments.
4.3 Foreign currency
(a)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (“the functional
currency”). The Consolidated and Company financial statements are presented in Sterling
Pound (“£”), which is the Group’s presentation currency. As the Company is listed on AIM, the
directors consider that this presentation is more useful for its current and potential investors.
The functional currency of the Group’s entities is summarised as follows:
1. UniVision Engineering Limited
2. T-Com Technology Co. Limited
Hong Kong Dollars
New Taiwan Dollars
(“HK$”)
(“NTD”)
UNIVISION ENGINEERING LIMITED - 33 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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’s 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 end of the reporting period;
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 - 34 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.4 Plant and equipment
Plant and equipment is initially recognised at cost and subsequently carried at cost less
accumulated depreciation and accumulated impairment loss. The cost of an asset comprises its
purchase price and any directly attributable costs of bringing the asset to working condition for
its intended use.
On disposal of an item of plant and equipment, the difference between the net disposal proceeds
and its carrying amount is taken to profit or loss.
Depreciation is calculated using the straight-line method to allocate their depreciable amounts
over the estimated useful lives as follows:
Furniture and fixtures
Computer equipment
Motor vehicles
Research assets
3 - 5 years
2 - 5 years
3 years
3 - 5 years
Fully depreciated plant and equipment is retained in the financial statements until the items are
no longer in use and no further charge for depreciation is made in respect of these assets.
The residual values, useful life and depreciation method are reviewed at the end of each
reporting period to ensure that the amount, method and period of depreciation are consistent
with previous estimates and the expected pattern of consumption of the future economic
benefits embodied in the items of plant and equipment. The effects of any revision are
recognised in profit or loss when the changes arise.
Subsequent expenditure relating to plant and equipment that has already been recognised is
added to the carrying amount of the asset only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repair and maintenance expenses are recognised in profit or loss when
incurred.
4.5 Goodwill
Goodwill represents the excess of:
(a)
the aggregate of the fair value of the consideration transferred, the amount of any non-
controlling interest in the acquiree and the fair value of the Group’s previously held
equity interest in the acquiree; over
(b)
the net fair value of the acquiree’s identifiable assets and liabilities measured as at the
acquisition date.
When (b) is greater than (a), then this excess is recognised immediately in profit or loss as a
gain on a bargain purchase.
Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business
combination is allocated to each cash-generating unit, or groups of cash generating units, that is
expected to benefit from the synergies of the combination and is tested annually for
impairment. On disposal of a cash generating unit during the year, any attributable amount of
purchased goodwill is included in the calculation of the profit or loss on disposal.
UNIVISION ENGINEERING LIMITED - 35 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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 - 36 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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 subsidiary, 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 - 37 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8 Financial instruments (continued)
4.8.1 Financial assets (continued)
Impairment of loans and receivables
Loans and receivables are assessed for indicators of impairment at the end of each reporting
period. Loans and receivables are considered to be impaired when there is objective evidence
that, as a result of one or more events that occurred after the initial recognition of the loans and
receivables, the estimated future cash flows of loans and receivables have been affected.
Objective evidence of impairment could include:
•
significant financial difficulty of the issuer or counterparty; or
• breach of contract, such as default or delinquency in interest and principal payments; or
•
it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of loans and receivables, such as trade receivables, assets that are
assessed not to be impaired individually are, in addition, assessed for impairment on a
collective basis. Objective evidence of impairment for a portfolio of receivables could include
the Group’s past experience of collecting payments, an increase in the number of delayed
payments in the portfolio past the average credit period and observable changes in national or
local economic conditions that correlate with default on receivables.
The amount of the impairment loss recognised is the difference between the asset’s carrying
amount and the present value of the estimated future cash flows discounted at the loans and
receivables’ original effective interest rate.
The carrying amount of loans and receivables is reduced by the impairment loss directly for all
loans and receivables with the exception of trade receivables, where the carrying amount is
reduced through the use of an allowance account. Changes in the carrying amount of the
allowance account are recognised in profit or loss. When a trade receivable is considered
uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited to profit or loss.
If, in a subsequent period, the amount of impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed through profit or loss to the extent that, the carrying
amount of the loan and receivable at the date the impairment is reversed does not exceed what
the amortised cost would have been had the impairment not been recognised.
UNIVISION ENGINEERING LIMITED - 38 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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 - 39 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.9 Trade and other receivables
Trade and other receivables are initially recognised at fair value and thereafter stated at
amortised cost less allowance for impairment of bad and doubtful debts, except where the
receivables are interest-free loans made to related parties without any fixed repayment terms or
the effect of discounting would be immaterial. In such cases, the receivables are stated at cost
less allowance for impairment of bad and doubtful debts.
4.10 Bank deposits
They represent bank deposits with maturities greater than three months, which are restricted as
bank deposits held as collateral for performance bonds issued by the bank to customers.
4.11 Cash and cash equivalents
In the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at
call with banks and other short-term highly liquid investments with original maturities of three
months or less.
4.12 Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently stated at
amortised cost unless the effect of discounting would be immaterial, in which case they are
stated at cost.
4.13 Interest-bearing borrowings
Interest-bearing borrowings are initially recognised at fair value less transaction costs.
Subsequent to initial recognition, the interest-bearing borrowings are stated at amortised cost
with any difference between the amount initially recognised and redemption value being
recognised in the consolidated statement of comprehensive income over the period of the
borrowings together with any interest and fees payable using the effective interest method.
4.14 Share capital
Ordinary shares are classified as equity.
UNIVISION ENGINEERING LIMITED - 40 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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 - 41 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.16 Construction contracts
When the outcome of a construction contract can be estimated reliably, contract costs are
recognised as an expense by reference to the stage of completion of the contract at the end of
the reporting period. When it is probable that total contract costs will exceed total contract
revenue, the expected loss is recognised as an expense immediately. When the outcome of a
construction contract cannot be estimated reliably, contract costs are recognised as an expense
in the period in which they are incurred.
Contracts in progress at the end of the reporting period are recorded in the statement of
financial position at the net amount of costs incurred plus recognised profit less recognised
losses and progress billings, and are presented under the caption of “Trade and other
receivables” or “Trade and other payables” in the statement of financial position as the
“Amounts due from customers for contracts-in-progress” (as an asset) or the “Amounts due to
customers for contracts-in-progress” (as a liability), as applicable. Progress billings not yet paid
by the customer are included in the statement of financial position. Amounts received before
the related work is performed are included in the statement of financial position, as a liability,
as “Advances received”.
4.17 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale are added to the cost of those assets until such time as the assets are
substantially ready for their intended use or sale. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on qualifying assets is deducted
from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are
incurred.
4.18 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all
the risks and rewards of ownership to the lessee. All other leases are classified as operating
leases.
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 - 42 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.19 Employee benefit
These comprise short term employee benefits and contributions to defined contribution
retirement plans.
Short-term employee benefits, including salaries, annual bonuses, paid annual leave, leave
passage, contributions to defined contribution retirement plans and the cost of non-monetary
benefits are accrued in the year in which the associated services are rendered by employees of
the Group. Where payment or settlement is deferred and the effect would be material, these
amounts are stated at their present values.
Contributions to the defined contribution scheme are charged to profit or loss when incurred.
4.20 Income tax
Income tax expense for the year comprises current and deferred tax. Tax is recognised in the
statement of comprehensive income, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period in the countries where the Company and its
subsidiaries operate and generate taxable income. Management periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to
be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated
financial statements. However, deferred tax liabilities are not recognised if they arise from the
initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the
time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax
is determined using tax rates (and laws) that have been enacted or substantially enacted by the
end of the reporting period and are expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries
and associates, except for deferred income tax liability where the timing of the reversal of the
temporary difference is controlled by the Group and it is probable that the temporary difference
will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a
net basis.
UNIVISION ENGINEERING LIMITED - 43 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.21 Provisions and contingent liabilities
Provisions are recognised for other liabilities of uncertain timing or amount when the Group or
the Company has a legal or constructive obligation arising as a result of a past event, it is
probable that an outflow of economic benefits will be required to settle the obligation and a
reliable estimate can be made. Where the time value of money is material, provisions are stated
at the present value of the expenditure expected to settle the obligation.
4.22 Dividend distributions
Dividend distributions to the Company’s shareholders are recognised as liabilities in the
Group’s and the Company’s financial statements in the period in which the dividends are
approved by the Company’s shareholders or directors, where appropriate.
4.23 Events after the reporting period
Events after the reporting period that provide additional information about the Group’s and the
Company’s position at the end of the reporting period or those that indicate the going concern
assumption is not appropriate are adjusting events and are reflected in the financial statements.
Events after the reporting period that are not adjusting events are disclosed in the notes to the
financial statements when material.
UNIVISION ENGINEERING LIMITED - 44 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
5.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Critical judgements in applying accounting policies
In the process of applying the accounting policies, Management has made the following
judgements that have the most significant effect on the amounts recognised in the financial
statements (apart from those involving estimations, which are dealt with below).
(i)
Estimation of contract costs
Estimated costs to complete contracts are judged by the Directors through the application of
their experience and knowledge of the industry in which the Group operates. However, contract
performance can be difficult to predict accurately. The Directors believe that contract budgets
do not deviate materially from actual costs incurred due to a strong cost control system with
regular reviews of budgets which highlight any incidences that could affect estimated costs to
completion.
The key assumptions concerning the future and other key sources of estimation uncertainty at
the end of the reporting periods, that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at
the end of the reporting period, that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year, are discussed below.
(i)
Impairment of assets
The Group has to exercise judgement in determining whether an asset is impaired or the event
previously causing the asset impairment no longer exists, particularly in assessing: (1) whether
an event has occurred that may affect the asset value or such event affecting the asset value has
not been in existence; (2) whether the carrying value of an asset can be supported by the net
present value of future cash flows which are estimated based upon the continued use of the
asset or derecognition; and (3) the appropriate key assumptions to be applied in preparing cash
flow projections including whether these cash flow projections are discounted using an
appropriate rate. Changing the assumptions selected by management to determine the level of
impairment, including the discount rates or the growth rate assumptions in the cash flow
projections, could materially affect the net present value used in the impairment test.
UNIVISION ENGINEERING LIMITED - 45 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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 2016, the total carrying amount of the Group’s trade and other receivables was
£5,525,191 (2015: £7,296,438) and the total carrying amount of the Company’s trade and other
receivables was £5,525,191 (2015: £4,812,753).
(iii)
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 2016, the Group has unused tax losses of £4,657,046 (2015: £4,746,391)
available for offset against future profits. A deferred tax asset of £768,413 (2015: £783,154) 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 - 46 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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
2016
£
2015
£
2,460,855
448,056
654,244
4,323,003
251,641
1,221,707
2,505,939
-
660
3,242,616
1,122,052
8,335
(b) Financial risk management objectives and policies
The Group’s major financial instruments include loan and borrowings, trade and other
receivables and trade and other payables. Details of these financial instruments are disclosed in
the respective notes. The risks associated with these financial instruments include currency risk,
interest rate risk, credit risk and liquidity risk. The policies on how these risks are mitigated are
set out below. Management manages and monitors these exposures to ensure appropriate
measures are implemented in a timely and effective manner.
(i) Market risk
(1) Currency risk
Certain entities in the Group have foreign currency transactions and have foreign
currency denominated monetary assets and liabilities, which expose the Group to foreign
currency risk. The Company has foreign currency transactions, which expose the
Company to foreign currency risk.
The carrying amounts of the Group’s and the Company’s foreign currency denominated
monetary assets and monetary liabilities, mainly represented by trade and other
receivables, cash and bank balances, trade and other payables and loan and borrowings,
at the end of the reporting period are as follows:
The Group
The Company
Assets
Liabilities
Assets
Liabilities
2016
2015
2016
2015
2016
2015
2016
2015
NTD
RMB
USD
HK$
-
53,775
40,506
3,230,940
123,413,717
1,129
54,560
34,982,030
-
541,544
2,732
1,832,885
100,013,562
5,009,660
21,320
19,577,077
-
53,775
40,506
3,230,940
-
-
-
34,980,407 `
-
541,544
2,732
1,832,885
-
5,009,660
-
19,481,353
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 - 47 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(i) Market risk (continued)
(1) Currency risk (continued)
Sensitivity analysis
The following table details the Group’s sensitivity to a 5% increase and decrease in
Sterling against the relevant foreign currencies and all other variables were held constant.
5% (2015: 5%) is the sensitivity rate used when reporting foreign currency risk internally
to key management personnel and represents management’s assessment of the reasonably
possible change in foreign exchange rates. The sensitivity analysis includes only
outstanding foreign currencies denominated monetary items and adjusts their translation
at the end of the reporting period for a 5% (2015: 5%) change in foreign currency rates.
A positive/(negative) number indicates a decrease/(increase) in post-tax profit/(loss) for
the year when Sterling strengthens 5% (2015: 5%) against the relevant foreign
currencies. For a 5% (2015: 5%) weakening of Sterling against the relevant currency,
there would be an equal but opposite impact on the post-tax profit/(loss) for the year.
NTD
Post-tax profit for the year
RMB
Post-tax (loss)/profit for the year
USD
Post-tax profit for the year
HK$
Post-tax profit for the year
(2) Interest rate risk
2016
£
2015
£
-
26,609
(25,672)
(28,670)
1,988
1,188
73,582
70,595
The Group and the Company is exposed to fair value interest rate risk in relation to fixed
rate bank deposits and borrowings at fixed rates. The Group and the Company is exposed
to cash flow interest rate risk due to fluctuation of the prevailing market interest rate on
certain bank borrowings which carry at prevailing market interest rates as shown in note
25. The Group currently does not have an interest rate hedging policy. However,
Management monitors interest rate exposure and will consider hedging significant
interest rate exposure should the need arises.
The Group’s and the Company’s exposures to interest rates on financial liabilities are
detailed in the liquidity risk management section of this note.
UNIVISION ENGINEERING LIMITED - 48 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(i) Market risk (continued)
(2) Interest rate risk (continued)
Sensitivity analysis
The sensitivity analysis below has been determined based on the change in interest rates
and the exposure to interest rates for the non-derivative financial liabilities at the end of
the reporting period and on the assumption that the amount outstanding at the end of the
reporting period was outstanding for the whole year and held constant throughout the
financial year. The 25 basis points increase or decrease represents Management’s
assessment of a reasonably possible change in interest rates over the period until the next
fiscal year. The analysis is performed on the same basis for 2015.
For the year ended 31 March 2016, if interest rates had been 25 basis points higher/lower,
with all other variables held constant, the Group’s post-tax profit for the year would
increase/decrease by approximately £0 (2015: £2,117).
(ii) Credit risk
At 31 March 2016, the Group’s and the Company’s maximum exposure to credit risk in
the event of the counterparties’ failure to perform their obligations in relation to each
class of recognised financial assets is the carrying amount of those assets as stated in the
consolidated statement of financial position.
The Group’s credit risk is primarily attributable to its trade and other receivables. In
order to minimise the credit risk, the Management of the Group has a credit policy in
place and the exposures to these credit risks are monitored on an ongoing basis. Credit
evaluations of its customers’ financial position and condition are performed on each and
every major customer periodically. These evaluations focus on the customer’s past
history of making payments when due and current ability to pay, and take into account
information specific to the customer as well as pertaining to the economic environment in
which the customer operates. Debts are usually due within 90 days from the date of
billing. The Group’s exposure to credit risk is influenced mainly by the individual
characteristics of each customer. The default risk of the industry and country in which
customers operate also has an influence on credit risk. At the end of the reporting period,
the Group had no significant concentrations of credit risk where individual trade and
other receivables balance exceed 10% of the total trade and other receivables at the end
of the reporting period.
The credit risk on liquid funds is limited because the counterparties are banks with high
credit ratings assigned by international credit rating agencies. Also, the Group has no
significant concentration of credit risk, with exposure spread over a number of
counterparties and customers.
Further quantitative disclosures in respect of the Group’s and the Company’s exposure to
credit risk arising from trade and other receivables are set out in note 21.
UNIVISION ENGINEERING LIMITED - 49 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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
2016, the Group had aggregate banking facilities of £438,574 (2015: £2,412,189), of
which £438,574 were unused (2015: £1,290,137).
The following table details the contractual maturities of the Group’s and the Company’s
financial liabilities at the end of the reporting period, which is based on the undiscounted
cash flows and the earliest date on which the Group can be required to pay. The table
includes both interest and principal cash flows.
The Group
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligations under
finance lease
2016
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 2016
£
3.64% -
3.76%
-
2,505,939
3.25%
768
2,506,707
-
-
-
-
-
-
-
-
-
-
2,505,939
2,505,939
768
660
2,506,707
2,506,599
UNIVISION ENGINEERING LIMITED - 50 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
The Group
2015
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 2015
£
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligations under
finance lease
The Company
Non-derivative
financial
liabilities:
Trade and other
payables
Obligations under
finance lease
3.64% -
3.76%
1,127,117
3,242,616
3.25%
8,944
4,378,677
-
-
745
745
-
-
-
-
1,127,117
1,122,052
3,242,616
3,242,616
9,689
8,335
4,379,422
4,373,003
2016
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 2016
£
2,505,939
3.25%
768
2,506,707
-
-
-
-
-
-
2,505,939
2,505,939
768
660
2,506,707
2,506,599
UNIVISION ENGINEERING LIMITED - 51 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
6. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
The Company
2015
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 2015
£
Non-derivative
financial
liabilities:
Trade and other
payables
Obligations under
finance lease
(c) Fair value
2,257,803
3.25%
8,944
2,266,747
-
745
745
-
-
-
2,257,803
2,257,803
9,689
8,335
2,267,492
2,266,138
The fair values of financial assets and financial liabilities are determined in accordance
with generally accepted pricing models based on discounted cash flow analysis. Balance
with a subsidiary is unsecured, interest free and have no fixed repayment terms.
The Directors of the Company consider that the carrying amounts of financial assets and
financial liabilities recorded at amortised cost in the financial statements approximate to
their fair values at the end of the reporting period.
(d) Capital risk management
The Group’s primary objectives when managing capital are to safeguard the Group’s
ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
The Group actively and regularly reviews and manages its capital structure to maintain a
balance between the higher shareholder returns that might be possible with a higher level
of borrowings and the advantages and security afforded by a sound capital position, and
makes adjustments to the capital structure in light of changes in economic conditions.
The Group monitors its capital structure on the basis of a net debt-to-adjusted capital
ratio. For this purpose the Group defines net debt as total debt (which includes bank
borrowings and other financial liabilities) less bank deposits and cash and cash
equivalents. Adjusted capital comprises all components of equity less unaccrued
proposed dividends.
UNIVISION ENGINEERING LIMITED - 52 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(d) Capital risk management (continued)
During 2016, the Group’s strategy, which was unchanged from 2015, 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 its subsidiary is 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
Liabilities of disposal group
classified as held for sale
The Group
The Company
2016
£
2,505,939
-
-
660
2,506,599
2015
£
3,242,616
1,122,052
34,442
7,694
4,406,804
-
641
3,214,990
-
2016
£
2,505,939
-
-
660
2,506,599
-
-
2015
£
2,257,803
-
-
7,694
2,265,497
641
-
Total debt
5,721,589
4,407,445
2,506,599
2,266,138
Less: cash and bank balances
654,244
1,221,707
654,244
1,044,484
Net debt
Total equity
5,067,345
3,185,738
1,852,355
1,221,654
5,314,302
5,641,264
5,013,374
4,823,282
Net debt-to-adjusted capital
ratio
95%
56%
37%
25%
UNIVISION ENGINEERING LIMITED - 53 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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 has a single reportable operating segment in security and
surveillance business for the year ended 31 March 2016.
Previously, the Group’s electrical and mechanical business was discontinued and demerged
from the Group by distribution of a dividend in specie to its shareholders on 31 March 2015.
(a)
Segment revenues and results
The following is an analysis of the Group’s revenue and results by operating segment:
Segment revenue by major products and services:
- Construction contracts
- Maintenance contracts
- Product sales
Revenue from continuing operations
Revenue from discontinued operations
Revenue from external customers
From continuing operations:
Segment profit
Finance costs
Profit before income tax
(b) Geographical segments
2016
£
2015
£
2,414,362
1,194,680
257,479
3,866,521
3,547,320
7,413,841
1,631,683
1,692,765
351,046
3,675,494
3,038,497
6,713,991
138,945
(1,234)
137,711
34,165
(1,149)
33,016
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.
(c)
Information about major customers
Revenues of approximately £2,791,170 (2015: £1,695,699) are derived from two external
customers (2015: one), who contributed to 10% or more of the Group’s revenue for 2016.
UNIVISION ENGINEERING LIMITED - 54 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
8. OTHER INCOME
Continuing operations
Interest income
Sundry income
9. OTHER GAINS AND LOSSES
Continuing operations
Loss on disposal of plant and equipment
Foreign exchange gain
Impairment loss recognised on other receivables
Impairment loss on goodwill
10. EXPENSES BY NATURE
Continuing operations
Cost of inventories recognised as expenses
Sub-contracting costs
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
2016
£
2015
£
959
8,159
9,118
868
1,440
2,308
2016
£
2015
£
-
10,570
(21,470)
(25,830)
(38)
5,593
(40,594)
-
(36,730)
(35,039)
2016
£
1,089,060
882,503
-
16,546
24,260
47,763
116,905
315,496
1,122,792
49,445
1,172,237
2015
£
1,192,555
964,280
8,835
5,770
79,627
13,204
23,678
252,081
990,016
41,284
1,031,300
Auditor’s remuneration
- audit services (parent company)
Total cost of sales, selling and distribution, administrative
expenses
35,194
37,268
3,699,964
3,608,598
UNIVISION ENGINEERING LIMITED - 55 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
11. DIRECTORS’ REMUNERATION
Directors’ remuneration for the year is disclosed as follows:
Executive directors
Stephen Sin Mo KOO
Yip Tak CHAN
Chun Pan WONG
Danny Kwok Fai YIP
Non-executive director
Nicholas James LYTH
Executive directors
Stephen Sin Mo KOO
Yip Tak CHAN (appointed on 3 October
2015)
Chun Pan WONG
Danny Kwok Fai YIP
Non-executive director
Nicholas James LYTH
Salaries,
bonuses and
allowances
£
Pension
scheme
contributions
£
-
49,760
62,371
49,524
161,655
-
1,546
1,546
1,546
4,638
2016
£
-
51,306
63,917
51,070
166,293
12,367
-
12,367
174,022
4,638
178,660
Salaries,
bonuses and
allowances
£
Pension
scheme
contributions
£
2015
£
23,996
23,855
54,633
43,706
146,190
120
24,116
720
1,400
1,400
3,640
24,575
56,033
45,106
149,830
11,518
-
11,518
157,708
3,640
161,348
12. FINANCE COSTS
Continuing operations
Finance charge on obligation under finance lease
2016
£
2015
£
1,234
1,234
1,149
1,149
UNIVISION ENGINEERING LIMITED - 56 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
13.
INCOME TAX IN THE CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
(a) Income tax in the consolidated statement of comprehensive income:
2016
£
2015
£
Income tax expense from continuing operations
Hong Kong profits tax
-
-
Hong Kong profits tax is charged at the rate of 16.5% (2015: 16.5%) on the estimated
assessable profits arising in Hong Kong. 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.
(b) Reconciliation between income tax expense and accounting profit at the applicable
tax rates:
Continuing operations:
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 brought forward not previously
recognised as deferred tax assets
Income tax expense
14. EARNINGS PER SHARE
2016
£
2015
£
137,711
33,016
22,722
(2,495)
18,952
(4,408)
5,448
(143)
6,698
(2,403)
(34,771)
(9,600)
-
-
The calculation of basic earnings per share is based on the loss attributable to the equity
shareholders of the Company for the year of £112,211 from continuing and discontinued
operations (2015: profit of £59,937) and the profit for the year of £137,711 (2015: £33,016) on
continuing operations, and the weighted average of 383,677,323 (2015: 383,677,323) ordinary
shares in issue during the year.
There were no potential dilutive instruments at either financial year end.
UNIVISION ENGINEERING LIMITED - 57 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
15. DIVIDENDS
(i) Dividends payable to equity shareholders of the Company attributable to the year:
2016
£
2015
£
Special dividend declared and payable of 0.2 pence per
ordinary share
-
791,425
Final dividend proposed after the end of the reporting period
of 0.037 pence per ordinary share (2015: 0.034 pence per
ordinary share)
141,083
130,286
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 0.034 pence per
ordinary share (2015: 0.024 pence per ordinary share)
2016
£
2015
£
134,201
130,561
UNIVISION ENGINEERING LIMITED - 58 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
16. PLANT AND EQUIPMENT
The Group
Cost
At 1 April 2014
Additions
Disposals
Foreign translation difference
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Research
assets
£
193,455
4,691
(122)
19,394
154,900
6,229
-
16,452
131,244
24,633
(5,288)
15,851
509,200
-
-
48,977
Total
£
988,799
35,553
(5,410)
100,674
At 31 March 2015
217,418
177,581
166,440
558,177
1,119,616
At 1 April 2015
Additions
Classified as assets held for sale
Foreign translation difference
217,418
13,725
(211,311)
9,549
177,581
13,657
(136,085)
7,670
166,440
7,825
(90,562)
6,162
558,177
-
(582,352)
24,175
1,119,616
35,207
(1,020,310)
47,556
At 31 March 2016
29,381
62,823
89,865
-
182,069
Accumulated depreciation
At 1 April 2014
Charge for the year
Disposals
Foreign translation difference
171,145
15,610
(122)
17,878
147,244
5,001
-
15,470
117,324
15,561
(4,770)
13,469
509,200
-
-
48,977
944,913
36,172
(4,892)
95,794
At 31 March 2015
204,511
167,715
141,584
558,177
1,071,987
At 1 April 2015
Charge for the year
Classified as assets held for sale
Foreign translation difference
204,511
18,835
(212,899)
8,780
167,715
8,678
(135,629)
7,020
141,584
13,042
(87,745)
5,548
558,177
-
(582,352)
24,175
1,071,987
40,555
(1,018,625)
45,523
At 31 March 2016
19,227
47,784
72,429
Net book value
At 31 March 2016
10,154
15,039
17,436
At 31 March 2015
12,907
9,866
24,856
-
-
-
139,440
42,629
47,629
At the end of the reporting period, the net book value of motor vehicle held under finance lease
of the Group and the Company was £0 (2015: £8,835).
UNIVISION ENGINEERING LIMITED - 59 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
16. PLANT AND EQUIPMENT (CONTINUED)
The Company
Cost
At 1 April 2014
Additions
Disposals
Foreign translation difference
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Total
£
17,044
276
-
2,139
35,909
6,229
-
5,007
55,803
20,381
(2,960)
8,466
108,756
26,886
(2,960)
15,612
At 31 March 2015
19,459
47,145
81,690
148,294
At 1 April 2015
Additions
Foreign translation difference
19,459
8,810
976
47,145
13,657
2,022
81,690
3,092
2,591
148,294
25,559
5,589
At 31 March 2016
29,245
62,824
87,373
179,442
Accumulated depreciation
At 1 April 2014
Charge for the year
Disposals
Foreign translation difference
12,595
1,307
-
1,678
32,548
3,000
-
4,304
46,316
10,298
(2,442)
6,442
91,459
14,605
(2,442)
12,424
At 31 March 2015
15,580
39,852
60,614
116,046
At 1 April 2015
Charge for the year
Foreign translation difference
At 31 March 2016
Net book value
At 31 March 2016
At 31 March 2015
15,580
2,913
599
39,852
6,450
1,482
60,614
7,183
2,140
116,046
16,546
4,221
19,092
47,784
69,937
136,813
10,153
15,040
17,436
3,879
7,293
21,076
42,629
32,248
UNIVISION ENGINEERING LIMITED - 60 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
17. GOODWILL
The Group
Cost
At 1 April 2015 and 31 March 2016
Less: accumulated impairment loss
At 1 April 2015
Less: impairment loss
At 31 March 2016
Net carrying amount
At 31 March 2016
At 31 March 2015
18.
INTEREST IN A SUBSIDIARY
Unlisted shares, at cost
Less: impairment loss
Amount due from a subsidiary
Total
£
961,845
936,015
25,830
961,845
-
25,830
2016
£
2015
£
639,965
(625,005)
639,965
(625,005)
14,960
84,540
14,960
91,424
99,500
106,384
Amount due from a subsidiary is unsecured, interest-free and expected to be recoverable within
twenty four (24) months.
The following list contains the particulars of subsidiary which principally affected the results,
assets and liabilities of the Group during the year ended 31 March 2016:
Name
Place of
incorporation
and
operations
Issued and
fully paid up
share capital/
registered capital
T-Com Technology Co
Taiwan
Limited
NT$80,000,000
Ordinary share
Percentage
of equity
held by
the Company
Directly Indirectly
52.25%
-
Principal activities
Supply, design, installation
and maintenance of closed
circuit television and
surveillance systems and the
sale of security system
related products
UNIVISION ENGINEERING LIMITED - 61 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
19.
INVENTORIES
Raw materials
Work in progress
Finished goods
Less: impairment loss
The Group
The Company
2016
£
372,691
-
376,498
749,189
-
2015
£
477,295
-
832,710
1,310,005
(104,541)
2016
£
373,855
-
376,498
750,353
-
2015
£
477,295
-
364,615
841,910
-
749,189
1,205,464
750,353
841,910
The Group recognised a provision for obsolete inventories of £0 (2015: £9,660) on slow-
moving inventories.
20. CONTRACTS-IN-PROGRESS
The Group
The Company
2016
£
2015
£
2016
£
2015
£
Contract costs incurred plus
attributable profits less
foreseeable losses
Progress billings to date
Represented by:
Amounts due from customers for
contracts-in-progress
Less: allowance for doubtful
20,443,032
(20,662,966)
19,237,828
(18,197,386)
20,443,032
(20,662,966)
17,420,721
(17,936,359)
(219,934)
1,040,442
(219,934)
(515,638)
1,281,429
2,411,247
1,281,429
813,681
debts
(235,060)
(206,436)
(235,060)
(206,436)
Amounts due from customers for
contracts-in-progress, net (note
21)
Amounts due to customers for
1,046,369
2,204,811
1,046,369
607,245
contracts-in-progress (note 23)
(1,266,303)
(1,164,369)
(1,266,303)
(1,122,883)
(219,934)
1,040,442
(219,934)
(515,638)
At 31 March 2016, the amount of retention receivables from construction customers recorded
within “trade and other receivables” is £0 (2015: £49,122).
UNIVISION ENGINEERING LIMITED - 62 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
21. TRADE AND OTHER RECEIVABLES
Current portion:
Trade receivables
Less: allowance for doubtful
debts (note 21(a))
Trade receivables, net (note
21(b))
Other receivables
Deposits and prepayments
Amounts due from customers for
contracts-in-progress, net (note
20)
Non-current portion:
Amount due from a related party
(note 29(d))
The Group
The Company
2016
£
2015
£
2016
£
2015
£
985,103
1,156,106
985,103
769,265
(67,089)
(191,806)
(67,089)
(65,131)
918,014
448,134
48,338
964,300
494,783
659,109
918,014
448,134
48,338
704,134
397,233
130,706
1,046,369
2,204,811
1,046,369
607,245
2,460,855
4,323,003
2,460,855
1,839,318
3,064,336
2,973,435
3,064,336
2,973,435
Total carrying amount
5,525,191
7,296,438
5,525,191
4,812,753
All of the trade and other receivables are expected to be recovered within one year, other than
those separately disclosed.
UNIVISION ENGINEERING LIMITED - 63 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
21. TRADE AND OTHER RECEIVABLES (CONTINUED)
(a)
Impairment of trade receivables
Impairment losses in respect of trade receivables are recorded using an allowance account
unless the Group is satisfied that recovery of the amount is remote, in which case the
impairment loss is written off against trade receivables directly. Movements in the allowance
for doubtful debts:
The Group
The Company
2016
£
2015
£
2016
£
2015
£
At 1 April
Recovery from bad debts
Transfer to disposal group
classified as held for sale
Foreign translation difference
191,806
-
469,128
(16,508)
(126,675)
1,958
-
(260,814)
65,131
-
-
1,958
57,942
-
-
7,189
At 31 March
67,089
191,806
67,089
65,131
At 31 March 2016, none of trade receivables of the Group and the Company are individually
determined to be impaired and no impairment loss was provided.
(b) Trade receivables that are not impaired
The ageing analysis of trade receivables at the end of the reporting period that were past due but
not impaired:
0 to 90 days
91 to 365 days
Over 365 days
The Group
The Company
2016
£
79,590
838,424
-
2015
£
856,306
56,218
51,776
2016
£
79,590
838,424
-
2015
£
645,262
55,766
3,106
918,014
964,300
918,014
704,134
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 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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
statements of cash flows
The Group
The Company
2016
£
2015
£
2016
£
2015
£
654,244
-
1,099,861
121,846
654,244
-
1,044,484
-
654,244
1,221,707
654,244
1,044,484
* At 31 March 2016, the Group maintained £0 (2015: £121,846) as restricted cash held at bank
as security against the banking facilities (note 25).
(b) Bank deposits
At 31 March 2016, £448,056 (2015: £251,641) are restricted deposits held at bank with
maturities greater than three months, as a pledge for performance bonds in respect of
construction contracts undertaken by the Group and the Company.
The effective interest rate on bank deposits was 0.37% per annum (2015: 0.41%).
(c) Cash and bank balances are denominated in the following currencies:
AUD
CAD
GBP
HKD
JYP
NTD
RMB
USD
The Group
The Company
2016
£
337
803
98,028
919,415
74
-
48,540
35,103
2015
£
327
798
115
1,263,290
67
175,935
-
32,816
2016
£
337
803
98,028
919,415
74
-
48,540
35,103
2015
£
327
798
115
1,263,148
67
-
-
31,670
1,102,300
1,473,348
1,102,300
1,296,125
UNIVISION ENGINEERING LIMITED - 65 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
23. TRADE AND OTHER PAYABLES
Trade payables
Bills payable
Due to related parties (note 29(a)
& 29(b))
Accruals and other payables
Amounts due to customers for
contracts-in-progress (note 20)
The Group
The Company
2016
£
2015
£
129,182
-
585,931
197,437
111,440
999,014
148,540
1,146,339
2016
£
129,182
-
111,440
999,014
2015
£
79,176
-
6,791
1,048,953
1,266,303
1,164,369
1,266,303
1,122,883
2,505,939
3,242,616
2,505,939
2,257,803
24.
INCOME TAX IN THE STATEMENT OF FINANCIAL POSITION
(a) Current tax liability in the statement of financial position represents:
Hong Kong profits tax
Taiwan income tax (disposal
group classified as held for sale)
The Group
The Company
2016
£
2015
£
2016
£
2015
£
-
-
-
-
34,442
34,442
-
-
-
-
-
-
(b) Unrecognised deferred tax assets
At 31 March 2016, the Company had unused tax losses of £4,705,477 (2015: £4,746,391) that
were available for offset against future taxable profits of the Company. No deferred tax asset
has been recognised due to the uncertainty of the future profit streams.
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 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
25. LOAN AND BORROWINGS
The Group
The Company
2016
£
2015
£
2016
£
2015
£
-
1,122,052
-
-
Within one year or on demand:
Secured bank loans (see note
below)
Note:
The secured bank loans carried interest at rates ranging from 3.49% to 3.68% per annum (2015:
3.39% to 3.91% per annum) and were secured by:-
(i) Restricted cash (note 22) and;
(ii) Personal guarantee by the Chairman of the Company, Mr. Stephen Sin Mo KOO (note
29(c)).
26. OBLIGATIONS UNDER FINANCE LEASE
At 31 March 2016 and 2015, the Group and the Company had obligations under finance lease
as follows:
Minimum lease payment
2016
£
2015
£
Present value of the minimum
lease payment
2016
£
2015
£
Within one year
Between two to five years
Total minimum finance lease
payments
Less: future finance charges
Present value of lease obligation
768
-
768
108
660
8,944
745
9,689
1,354
8,335
660
-
660
7,694
641
8,335
UNIVISION ENGINEERING LIMITED - 67 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
27. SHARE CAPITAL
Authorised :
800,000,000 ordinary shares of HK$0.0625 each
2016
£
2015
£
3,669,470
3,669,470
Issued and fully paid:
383,677,323 ordinary shares (2015: 383,677,323 ordinary shares)
of HK$0.0625 each
1,697,617
1,697,617
The Company has one class of ordinary shares.
28. EMPLOYEE RETIREMENT BENEFITS
(a) The Company operates a Mandatory Provident Fund scheme (the “MPF scheme”) under
the Hong Kong Mandatory Provident Fund Schemes Ordinance for employees employed
under the jurisdiction of the Hong Kong Employment Ordinance. The MPF scheme is a
defined contribution retirement scheme administered by independent trustees. Under the
MPF scheme, the employer and its employees are each required to make contributions to
the scheme at 5% of the employees’ relevant income, subject to a cap of monthly relevant
income of HK$30,000 (HK$25,000 prior to June 2015). Contributions to the MPF scheme
vest immediately.
(b) Employees of the subsidiary in Taiwan chose to participate in a defined contribution
scheme governed by the Labour Pension Act of Taiwan. This subsidiary contributes at 6%
of the total salaries of the participating employees who have chosen to participate in the
defined contribution scheme, with the contribution invested 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 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
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
2016
£
2015
£
229,461
226,725
The remuneration of key management personnel comprises the remuneration of Executive
Directors and key executives.
Executive Directors include the Executive Chairman, Chief Executive Officer, Technical
Director and Finance Director of the Company. The remuneration of the Executive Directors is
determined by the Remuneration Committee having regard to the performance of individuals,
the overall performance of the Group and market trends. Further information about the
Remuneration Committee and the Directors’ remuneration is provided in the Remuneration
Report and the Report on Corporate Governance to the Annual Report and note 11 to the
financial statements.
Key executives include the Director of Operations and Director of Sales and Marketing of the
Company. The remuneration of the key executives is determined by the Executive Directors
annually having regard to the performance of individuals and market trends.
Biographical information on key management personnel is disclosed in the Directors’ and
Senior Management’s Biographies section of the Annual Report.
Transactions with related parties
(a) At 31 March 2016, there is a payable balance of £111,440 (2015: £202) due to Mr.
Stephen Sin Mo KOO, the Director of the Company, which is unsecured, interest-free
and repayable on demand (note 23).
(b) At 31 March 2016, there is a payable balance of £0 (2015: £140,436) due to non-
controlling shareholders of the subsidiary of the Company, which is unsecured, interest-
free and repayable on demand.
(c) At 31 March 2016, the bank facilities amounting to £1,552,259 (2015: £1,037,063) are
personally guaranteed by Mr. Stephen Sin Mo KOO. No charge has been requested for
this guarantee (note 25).
(d) At 31 March 2016, there is a receivable balance of £3,064,336 (2015: £2,973,435) due
from a related company controlled by common shareholders of the Company, which is
unsecured, interest-free and not expected to be recoverable in the next twelve months.
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 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
30. COMMITMENTS
(a)
Capital commitments
At 31 March 2016, the Group and the Company had no material capital commitments
outstanding.
(b) Operating lease commitments
At the end of the reporting period, the total future minimum lease payments under non-
cancellable operating leases for the office and warehouse premises are payable as follows:
The Group
The Company
2016
£
2015
£
2016
£
2015
£
Within one year
Between two to five years
74,890
23,473
93,041
46,633
74,890
23,473
50,872
46,633
98,363
139,674
98,363
97,505
31. OPERATIONS CLASSIFED AS HELD FOR SALE
On 30 March 2016, the Company approved a plan to dispose of its interest in T-Com,
representing a 52.25% equity interest. The assets and liabilities related to T-Com have been
presented as a disposal group held for sale and its business has been reported under
discontinued operations in the financial statements.
Assets and liabilities of disposal group classified as held for sale:
ASSETS:
Plant and equipment
Trade and other receivables
Cash and cash equivalents
Total assets
LIABILITIES:
Trade and other payables
Total liabilities
Net asset value
£
15,091
3,300,964
300,527
3,616,582
3,214,990
3,214,990
401,592
UNIVISION ENGINEERING LIMITED - 70 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
31. OPERATIONS CLASSIFIED AS HELD FOR SALE (CONTINUED)
The results of the discontinued operations of the disposal group classified as held for sale:
Revenue from discontinued operation
Cost of sales
Gross profit
Other income
Other gains
Administrative expenses
(Loss)/profit from discontinued operations
Income tax credit
2016
£
2015
£
3,547,320
(3,289,203)
258,117
3,038,497
(2,271,662)
766,835
421
18,997
(788,291)
(510,756)
32,436
618
38,123
(708,403)
97,173
13,023
(Loss)/profit for the year, net of tax
(478,320)
110,196
Cash flows from discontinued operation:
Net cash inflows from operating activities
Net cash outflows from investing activities
Net cash inflows from financing activities
Effect of foreign exchange changes, net
2016
£
2015
£
99,200
(9,603)
51,429
(17,722)
229,339
(8,475)
518,555
2,659
123,304
742,078
32. CONTINGENT LIABILITIES
In March 2016, the Company received a writ of summons stating that it is being sued by Nan
Ning Hai Li Real Estate Development Limited (“Hai Li”), a prospective investor in respect of
breach of contract and/or duty in respect of a share transfer agreement (the “Agreement”)
entered into between Hai Li and the Company’s director and major shareholder, Mr Koo, on 14
December 2015 and a subsequent series of oral agreements.
The Group and the Company are of the opinion that the claim is highly opportunistic and
without merit and the management intends to defend this claim vigorously.
33. COMPARATIVE FIGURES
Certain comparative figures in these financial statements have been restated to account for the
reclassification of the discontinued operations of the proposed disposal of the Company’s
interest in T-com.
UNIVISION ENGINEERING LIMITED - 71 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
34. EVENTS AFTER THE END OF THE REPORTING PERIOD
(i) On 30 June 2016, the Company entered into an agreement in principle to sell its
Taiwanese subsidiary T-Com Technology Co. Ltd (“T-Com”) to Stephen Koo, the
Executive Chairman of the Company and who is interested in 72.9% of its share capital.
The terms of the Transaction are as follows:-
1. The Company disposes of its entire holding of shares in T-Com to Stephen Koo.
2. The cash consideration for the transaction is HK$600,000.
3. All amounts due to the Company by T-Com to be settled within 24 months of the
transaction.
4. The Company will have an option to repurchase its shareholding in T-Com for the
same consideration of HK$600,000, plus 3% per annum, as the repurchase price for
a period of 5 years from the sale of the shares.
(ii) On 17 August 2016, the Directors proposed a final dividend. Further details are disclosed
in note 15(i).
35. APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved and authorised for issue by the Board of Directors on 2
September 2016.
UNIVISION ENGINEERING LIMITED - 72 - ANNUAL REPORT 2016
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 2016 Annual General Meeting (AGM) of UniVision
Engineering Limited will be held at UniVision Engineering Limited, Unit 01A, 2/F., Sunbeam Centre, 27
Shing Yip Street, Kwun Tong, Kowloon, Hong Kong, on 30 September 2016 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 2016 together with the Directors’ report and the Independent Auditor’s report;
2. To declare a final dividend for the financial year ended 31 March 2016.
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 re-elect Mr. Peter Yip Tak CHAN who retired by rotation, as a Director of the Company;
6. To reappoint auditor HKCMCPA Company Limited, Certified Public Accountants, as auditors of
the Company, to hold office from the conclusion of the meeting to the conclusion of the next
meeting, during which accounts will be laid before the Company and to authorize the Directors to
adjust their remuneration packages;
7. That the directors of the Company be and are hereby generally and unconditionally authorized to
exercise all powers of the Company to allot ‘Ordinary Shares’ the capital of the Company. Such
authority (unless and to the extent previously revoked, varied or renewed by the Company during
the general meeting) to expire 15 months after the date of the passing of such resolution or on the
conclusion of the Company’s next AGM to be held, following the date of passing such resolution,
whichever occurs first, save that the Company may before such expiry make any offer or
agreement which would or might require Ordinary Shares to be allotted after such expiry, and that
the Directors may allot Ordinary Shares in pursuance of such an offer or an agreement as if such
authority had not expired. This authority substitutes all subsisting authorities to the extent unused.
8. That the directors of the Company be and are hereby generally and unconditionally authorized to
exercise all powers of the Company to repurchase the ’Ordinary Shares’ in the capital of the
Company, including any form of depositary receipt. Such authority (unless and to the extent
previously revoked, varied or renewed by the Company during the general meeting) to expire 15
months after the date of the passing of such resolution or on the conclusion of the Company’s next
AGM to be held, following the date of passing such resolution, whichever occurs first, save that
the Company may before such expiry make any offer or agreement which would or might require
Ordinary Shares to be repurchased after such expiry, and that the Directors may buy back
Ordinary Shares in pursuance of such an offer or an agreement as if such authority had not
expired.
UNIVISION ENGINEERING LIMITED - 73 - ANNUAL REPORT 2016
By Order of the Board Registered office:
Mr. Stephen Sin Mo KOO Unit 01A, 2/F Sunbeam Centre,
Executive Chairman 27 ShingYip Street
Kwun Tong, Kowloon,
2 September 2016 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
16 September 2016 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 2016