UniVision Engineering Limited
Annual Report
Year ended 31 March 2017
UNIVISION ENGINEERING LIMITED - 0 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
Annual Report
Year ended 31 March 2017
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 Profit or Loss and Other 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 Consolidated Financial Statements
Notice of Annual General Meeting
2
3
8
10
16
17
20
21
27
28
29
30
31
32
33
34
74
UNIVISION ENGINEERING LIMITED - 1 - ANNUAL REPORT 2017
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
New Liverpool House, 4th Floor,
15 Eldon Street,
London EC2M 7LD
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.
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 2017
CHAIRMAN‟S STATEMENT
INTRODUCTION
I am pleased to report the Group‟s audited results for the financial year ended 31 March 2017.
Turnover from continuing operations in the year increased by 8.6% (*underlying rate) to
£4.8m (2016: £3.87m). This increase was mainly due to the 13% growth in construction
contracts.
The new major contract with MTR Corporation Limited (“MTRC”) in Hong Kong awarded in
May 2017 is a milestone for Company. The Board expects that the Company will achieve a
substantial growth in the business in the coming years.
In maintaining its dividend policy, the Board declares a final dividend of 0.41 HK cents
(gross) per share for the financial year ended 31 March, 2017 (2016: 0.41 HK cents)
The Directors are confident of the future of UniVision and are optimistic about the Group‟s
prospects.
NEW MAJOR CONTRACT WITH MTRC
As announced on 12 May 2017, the Company won a major contract valued at HK$389.4m
(£38.1m) with MTRC following a tender process. The contract provides for the replacement
works of the Closed Circuit Television (CCTV) systems for numerous railway lines of
MTRC. The Company will replace the existing analogue CCTV system installed in the
stations along the specified lines with a unified IP-based CCTV system.
The Company was awarded this contract in the face of severe competition from major
multinational companies that have operations focusing on closed circuit television and
surveillance systems. The Management and the project team members have devoted their
time and effort on the Pre-Qualification and tendering process. .
The Contract commenced in mid May 2017 and the completion date for the replacement
works is anticipated to be in November 2023. The Board expects revenue from the Project to
be generated in the financial year ending 31 March 2018.
Currently, the Company is working on the design stage, including the system-level design.
The first billing to the customer is expected in the 4th calendar quarter of 2017. The Company
has solid and proven experience in installing CCTV systems. The Board is confident that the
Company will be able to fulfill all requirements under the contract in a professional manner.
The Company acts as the main contractor for the project. In accordance with the contract, the
Company is required to provide a performance bond equivalent to 3% of the contract sum, i.e.
HK$11.7m. In order to release liquidity for business development, the Board is considering
offers (without 100% collateral) from a leading bank and insurance company to provide the
required guarantee to MTRC .
The Board is now reviewing and negotiating with suppliers and sub-contractors for more
favourable credit terms. With effective control of working capital flow, the requirement for
additional funding will be minimised. Nevertheless, the Board will monitor the status of
working capital and consider the external banking facilities or other funding if necessary.
UNIVISION ENGINEERING LIMITED - 3 - ANNUAL REPORT 2017
CHAIRMAN‟S STATEMENT
(Continued)
FINANCIAL REVIEW
„Continuing operations‟ represent the Group‟s Security and Surveillance Systems business
undertaken by the Hong Kong Company. The same business undertaken by the Taiwan
Subsidiary prior to disposal by the Group is classified as discontinued operations. The loss
from the discontinued operations during the year was £41K (2016: £478K). As announced on
28 June 2016, the Group entered into an agreement to sell its entire interest in its Taiwan
subsidiary- T-Com Technology Company Limited (“the Subsidiary” or “T-Com”) to Mr.
Stephen Koo, the Executive Chairman of the Group.
The profit from the continuing operations attributable to the equity holders of the Company is
£452K (2016: £138K).
The improvement in results performance in the year is mainly attributable to, among other
things,:-
i) 13% growth in the income from construction contracts;
ii) The improved gross profit margin from maintenance contracts;
iii) Gain from disposal of the Taiwanese subsidiary and
iv) Relative strengthening of HK$ for the year vs year 2016 which led to an appreciation in
the GBP reported amount.
Having regard to the low economic growth and keen competitive environment, the Directors
are satisfied by this result.
The Group generated positive net cash of £409K from its continuing operating activities in
the year (2016: £61K cash outflow). The Hong Kong company, in which the continuing
operations are based, has no bank loan and maintained a cash balance of £1.19m at the year
end. The net working capital at the year end was £2.5m (2016: £1.8m). The Directors attribute
this to close monitoring and effective control of working capital.
During the year under review the relative strengthening of the HK$ against GBP has led to a
12.4% appreciation in the GBP reported amount in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income. Also, a relative strengthening of HK$ at the year-end
has led to a 13% appreciation in the GBP reported amount in the Consolidated Statement of
Financial Position. All figures in the Financial Statements therefore need to be adjusted for
comparison purposes. All comparative % stated in the Chairman‟s Statement are adjusted to
show the underlying change (net of translation effect on foreign exchange).
*All comparative % stated in the Chairman‟s Statement are adjusted to show the underlying
change (net of translation effect on foreign exchange).
Turnover from continuing operations in the year was increased by 8.6% to £4.8m (2016:
£3.87m). This increase was mainly due to the significant growth in construction contract
income. The revenue from construction contracts (excluded the discontinued operations)
increased by 13% compared with last year.
The growth of construction revenue was mainly due to income generated from the following
contracts:-
Hong Kong-Zhuhai-Macao Bridge Project
The MTR South Island Line Project
Central Wanchai By Pass Project
Modern Terminal Upgrade Project
Tseng Kwan O Tunnel Project
UNIVISION ENGINEERING LIMITED - 4 - ANNUAL REPORT 2017
CHAIRMAN‟S STATEMENT
(Continued)
In addition, construction contracts including the installation, relocation, modification and
replacement works provided by MTR Corporation Limited also contributed to the increase.
These projects show the Company‟s ability to deliver on projects in a highly competitive
environment.
On the other hand, the revenue from the Group‟s maintenance contracts (excluding the
discontinued operations) was only moderate with growth of 2.6%. The slow growth was
mainly due to the change of scope in the services provided under the existing maintenance
contract with MTRC; a three year contract commencing from 1 January 2015 to 31 January
2017. In addition, the new major CCTV replacement project for the railway lines of MTRC
led to low demand for maintenance works. The maintenance contract and its sub-contracts
provided regular cash flow for the Group‟s operations.
Gross profit margin for continuing operations increased to 34% (2016: 32%). The major
reason was the increase in gross profit from 34% to 37% in the Group‟s maintenance
contracts. The increment was attributable to orders with comparatively high profit margins.
The effective and efficient control of human resources, material costs, logistics and sub-
contracting charges also contributed to the increment. Also, the gross profit margin for the
Group's maintenance business for the year improved due to the initial purchase cost for
installation of equipment in the main maintenance contract with MTRC being incurred last
year. The gross profit margin for the Group's construction business for the year remained
stable at 34% (2016: 33%).
Administration expenses for continuing operations decreased by 3.5% to £1.05m (2016:
£955K). This was achieved by the effective control of human resources and other overheads.
Net profit before income tax from continuing operations was £452K (2016:£138K). Basic
profit from continuing operations per share for this year was 0.11p (2016: 0.04p).
There was no significant capital investment during 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, 2017 (2016: 0.41 HK cents). The dividend timetable is as
follows:
Ex date
Record date
Payment date
14 September 2017
15 September 2017
9 October 2017
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 as a Service
Market 2017-2021 the market will grow at a Compound Annual Growth Rate of 27.45 per
cent during the period 2017 to 2021.
UNIVISION ENGINEERING LIMITED - 5 - ANNUAL REPORT 2017
CHAIRMAN‟S STATEMENT
(Continued)
The increasing demand for wireless network infrastructure is the key growth driver for this
market. The demand to replace analogue systems with Internet protocol based systems is also
expected to boost the market in the forecast period. The new major contract with MTRC that
replacing CCTV cameras from analogue-based with IP-based units is a good example for the
demand.
Demand for the IP cameras remain strong because they are more cost effective and secure
than analogue cameras. To capture the opportunities in Internet Protocol and High Definition
CCTV System technology, UniVision will continue commit resources to develop new
technologies and solutions.
The Board anticipates demand for Security and Surveillance Systems from local government
infrastructure projects and the private sector to increase in coming years.
The Board believes that being awarded the major contract by MTRC will provide UniVision
with an opportunity to market its brand to purchasers of similar systems outside Hong Kong.
For example, the One Belt, One Road (“OBOR”) initiative, is a significant development
strategy by the PRC government that provides infrastructure project pipelines along the Belt
and Road. It is also a new business opportunity for the Company.
Facing increasing competition, the Company is considering exploring other market segments,
such as rolling stock business in railway, to strengthen the business growth.
Business
During the year, the Company actively participated in the tendering process for the CCTV
Replacement project for Hong Kong MTRC. As announced on 12 May 2017, the Contact was
awarded to the Company in May 2017. Under the contract, the Company is responsible for
the replacement and provision of the CCTV systems for 84 MTR stations and 69 stops of
Light Rail. There may be the opportunity to win additional other potential contracts from
MTR Corporation that are associated with the main contract. The additional works valued at
HK$7m (£0.7m) for the provision of Optical Fibre Cables for Tseung Kwan O Line Tunnel
Sections, as announced on 21 June 2017, is a good example of this.
Under the major contract, the Company acts as network service provider in the application of
CCTV systems. The Board considers the viability for the Company entering the new business
as a provider of network service and information technology in the application in other fields.
Customers
The Company‟s major customers are public organisations and sizeable private enterprises,
such as the Electrical 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, unchanged from 2016.
To avoid the concentration of customers, the Company intends to diversify its customers base
particularly to the private and domestic sectors.
UNIVISION ENGINEERING LIMITED - 6 - ANNUAL REPORT 2017
CHAIRMAN‟S STATEMENT
(Continued)
PROSPECTS
The Board expects that the high demand for its network and high definition security and
surveillance system will provide the ground for the Company to grow in these markets.
With regard to resources and capacity, the Company continues to tender for new contracts.
Some major infrastructure projects, such as the Hi Speed Rail Hong Kong line, are due to be
completed in the coming years, therefore the Board is confident with the prospects for
business growth.
Finally, on behalf of the Board, I would like to thank our customers, suppliers, sub-
contractors and shareholders for their continued support of UniVision. I would also like to
acknowledge the hard work of the management and all staff for their contribution and
dedication to the Group.
MR. STEPHEN SIN MO KOO
EXECUTIVE CHAIRMAN
4 September 2017
UNIVISION ENGINEERING LIMITED - 7 - ANNUAL REPORT 2017
DIRECTORS AND SENIOR
MANAGEMENT’S BIOGRAPHIES
DIRECTORS’ BIOGRAPHIES
Nicholas James LYTH – Non-executive Director (aged 51)
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.
Mr. Nyth is the Chairman of the Audit Committee and the Remuneration Committee.
Stephen Sin Mo KOO – Executive Chairman (aged 60)
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. Mr.
Koo is a member of the Audit Committee and the Remuneration Committee.
Chun Pan WONG – Chief Executive Officer (aged 57)
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 53)
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 fellow member of the Association of
Chartered Certified Accountants and a member of Hong Kong Institute of Certified Public
Accountants. He also acts as Company Secretary for the Corporation.
UNIVISION ENGINEERING LIMITED - 8 - ANNUAL REPORT 2017
DIRECTORS’ AND SENIOR
MANAGEMENT’S BIOGRAPHIES
(Continued)
Peter Yip Tak CHAN – Director of Sales and Marketing (aged 53)
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 42)
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 2017
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 2017.
Principal Activities and Segment Analysis Operations
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. An analysis of the Group‟s performance by
business segments is set out in note 7 to the financial statements.
Continuing Operations
Continuing operations represent the Group‟s Security and Surveillance Systems
business undertaken by the Hong Kong Company.
Discontinued Operation
The Group discontinued its security and surveillance systems business undertaken by
the Taiwan Subsidiary as at 31 March, 2017 by selling its entire holding interest to the
Group‟s Executive Chairman. The details of transaction are set out in note 17 to the
financial statements.
Review of the Business
Details on the assessment and analysis of the Group‟s performance and its material
factors underlying its results and financial position and its future development are
included in the Chairman‟s Statement.
Financial Position
The Group‟s profit for the year ended 31 March 2017 and the state of affairs of the
Group at that date are set out in the consolidated statement of profit or loss and other
comprehensive income on page 27 and in the consolidated statement of financial
position on page 28, respectively.
The Group‟s and the Company‟s changes in shareholders‟ equity for the year ended 31
March 2017 are set out in the consolidated and the Company‟s statement of changes in
equity on page 30 and 31, respectively.
The Group‟s and the Company‟s cash flow for the year ended 31 March 2017 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 2017
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
Return on Invested Capital :
Operating profit/Net assetws
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
Return on Invested Capital :
Operating profit / Net assets
Quick Ratio :
(Current Assets –Inventories)/ Current
Liabilities
2017
2016
1.8
1.8
40 days
87 days
2.9
34%
7%
1.4
3.5
32%
3%
1.4
2017
2016
1.8
1.4
40 days
48 days
2.9
34%
7%
1.4
5.5
20%
n/a
1.2
:
:
:
:
:
:
:
:
:
:
:
:
UNIVISION ENGINEERING LIMITED - 11 - ANNUAL REPORT 2017
DIRECTORS’ REPORT
(Continued)
Share Capital and Reserves
Details of the movements in share capital are set out in note 24 on page 70.
The movements in reserves during the year are set out in the consolidated statement of
changes in equity on page 30.
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 2017.
Plant and Equipment
Details of the movements in plant and equipment are set out in note 16 on pages 62
to63.
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. Stephen Sin Mo KOO, Mr. Nicholas James LYTH and Mr. Danny Kwok Fai YIP
retire by rotation at the forthcoming annual general meeting in accordance with the
Company‟s Articles of Association and, being eligible, the current directors offer
themselves for re-election.
Directors’ Interests in Contracts
No director had a material interest in any contract of significance to the business of the
Company to which the Company, its holding company, or its subsidiaries was a party at
the end of the year or at any time during the year.
Directors’ Interests in Shares
According to the register of Directors‟ Shareholdings kept by the Company, particulars
of interests of the Directors (or their immediate families) who held office at the end of
the financial year in the ordinary shares of the Company are as set out in the table
below:
Ordinary Shares held as at 31 March 2017
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 2017
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 2017, 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
Numberof ordinary
shares
183,736,000
% of total issued share
capital
47.9
78,744,000
20.5
39,217,710
10.2
24,949,998
6.5
UNIVISION ENGINEERING LIMITED - 13 - ANNUAL REPORT 2017
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 £98 charitable contributions (2016: £86.). No political
contribution was made.
Environmental Policy
The Group aims to protect the environment by minimising environmental adverse in daily
operations and encourage recycling for more efficient use of resources. Besides, energy
efficiency practices to reduce the energy consumption. Air conditioning, electricity and water
conservation have been closely monitored and reviewed too maintain an efficient operation.
Proper treatment of industrial wastes and hazardous material has been put in practice.
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
29 September 2017 at 5:00 p.m. The Notice of Meeting appears on page 74.
Annual Report
The annual report for the year ended 31 March 2017 will be uploaded on the Company‟s
website www.uvel.com on 4 September 2017 upon announcement and the hard copy will be
sent to shareholders by our Registrars, Computershare Investor Services (Jersey) Limited.
UNIVISION ENGINEERING LIMITED - 14 - ANNUAL REPORT 2017
DIRECTORS’ REPORT
(Continued)
Auditor
HKCMCPA Company Limited, Certified Public Accountants, remain as our auditor for the
year. A resolution to re-appoint HKCMCPA Company Limited, Certified Public Accountants
as auditor of the Company will be put to the forthcoming Annual General Meeting.
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
Hong Kong
4 September 2017
UNIVISION ENGINEERING LIMITED - 15 - ANNUAL REPORT 2017
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
£
2017
Total
£
2016
Total
£
Executive Directors
Stephen Sin Mo KOO
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
Non-executive Director
Nicholas James LYTH
-
68,307
54,647
54,908
-
1,765
1,765
1,765
-
7,028
5,397
4,519
-
77,100
61,809
61,192
-
63,917
51,070
51,307
14,122
-
-
14,122
13,769
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 2017
k
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 2017
-
-
-
-
-
-
-
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 2017
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 2017
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial
statements in accordance with applicable law and regulations.
The Directors are responsible for preparing financial statements for each financial year.
The Directors have elected to prepare the Group‟s financial statements in accordance
with International Financial Reporting Standards (IFRSs). The Directors must not
approve the financial statements unless they 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 these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable IFRSs 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 adequate accounting records that are
sufficient to show and explain the Group‟s transaction and disclose with reasonable
accuracy at any time the financial position of the Company and the Group. They have
general responsibility for taking such steps as are reasonably available to them to
safeguard the assets of the Group and the Company and hence for taking reasonable
steps for prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and
financial information included in the Group‟s website. The Group is compliant with
AIM Rule 26 regarding the Group‟s website.
UNIVISION ENGINEERING LIMITED - 20 - ANNUAL REPORT 2017
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(Incorporated in Hong Kong with limited liability)
OPINION
We have audited the consolidated financial statements of UniVision Engineering Limited (the
“Company”) and its subsidiary (collectively referred to as the “Group”) set out on pages 27 to 73,
which comprise the Consolidated and the Company Statement of Financial Position as at 31 March
2017, the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the
Consolidated and the Company Statement of Changes in Equity, 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.
In our opinion, the accompanying financial statements give a true and fair view of the Consolidated
and the Company Statement of Financial Position as at 31 March 2017, and the Consolidated
Statement of Profit or Loss and Other 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 in accordance with International Financial Reporting Standards.
BASIS OF OPINION
We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated and the Company Financial Statements section of our report. We are
independent of the Group and the Company in accordance with the International Ethics Standards
Board for Accountant‟s Code of Ethics for Professional Accountants (“IESBA Code”), and we have
fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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)
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Estimation of contract costs and revenue recognition
Key audit matter
How our audit addressed the key audit matter
As disclosed in note 7 Segment
information, the Group and the Company
recorded revenue from the provision of
construction works in Hong Kong totalling
£3,113,629 for the year ended 31 March
2017.
Construction contract revenue and costs
are recognised using the percentage of
completion method, measured by reference
to the percentage of contract costs incurred
to date to the estimated total contract costs
for a fixed price contract. The estimated
cost to complete the contracts are based on
management‟s best estimate and
judgements, as disclosed in note 5 Critical
accounting estimates and judgements.
We identified contract accounting
estimates as a key audit matter because the
estimation of the total revenue and total
costs to complete contract is inherently
subjective and requires significant
management judgement and estimation.
Any changes or errors in the forecast of
contract revenue and costs could result in a
material variance in the amount of profit or
loss recognised from contracts to date and,
therefore, in the current period.
Regarding construction contract revenue recognition,
we performed the following procedures:
We discussed the design and implementation of key
internal controls over the contract revenue and
profit recognition processes.
We discussed with management the performance of
to
the
the status of completion of
in progress during
the year
all contracts
understand
contracts.
We evaluated the reasonableness of the estimated
construction costs, taking into account the profit
margin of similar projects, the duration and the
complexity of the projects, etc.
We challenged the key estimates and assumptions
adopted by management in the estimation of
contract costs.
We obtained a detailed breakdown of
total
estimated cost to completion for all contracts in
progress during the year and compared, on a
sample basis, actual costs incurred at the reporting
date and cost estimates with the agreements,
quotation or correspondence with sub-contractors
and suppliers and other documentation referred to
by management in its assessment of the estimated
costs to completion.
UNIVISION ENGINEERING LIMITED - 22 - ANNUAL REPORT 2016
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(Incorporated in Hong Kong with limited liability)
KEY AUDIT MATTERS (CONTINUED)
Impairment assessment of trade and other receivables
Key audit matter
How our audit addressed the key audit matter
As disclosed in note 5 Critical accounting
estimates and judgements and note 20
Trade and other receivables of the
consolidated financial statements, as at 31
March 2017, the Group and the Company
had trade and other receivables, of
£2,903,913. For the year ended 31 March
2017, an impairment loss of approximately
£51,028 has been recognised on certain
receivables that are due and outstanding for
a certain period of time.
The impairment assessment of the trade
and other receivables requires exercise of
significant judgement by management of
the Company and is subjective. We have
identified the impairment assessment of the
Group‟s and Company‟s trade and other
receivables as a key audit matter.
Regarding
impairment of
receivables, we performed the following procedures:
trade and other
the
We understood and evaluated the Group‟s and
Company‟s internal controls over the process of
identifying events or circumstances give rise to
impairment on trade and unbilled receivables and
the respective impairment assessments, and we
tested relevant key internal controls.
We performed an
independent assessment
to
identify events or circumstances which may give
rise to impairment of trade and unbilled receivables
on a sample basis. We focused on trade receivable
accounts and amounts due with material balances,
were long outstanding or had poor credit records.
We obtained the impairment calculation schedule
of a specific trade and unbilled receivable account
on a sample basis and assessed the impairment
analysis performed by management, including
inspection of the relevant supporting documents.
UNIVISION ENGINEERING LIMITED - 23 - ANNUAL REPORT 2016
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(Incorporated in Hong Kong with limited liability)
OTHER INFORMATION
The directors of the Company are responsible for the other information. The other information
comprises the information included in the annual report, but does not include the consolidated
financial statements and our auditor‟s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
RESPONSIBILITIES OF DIRECTORS FOR THE CONSOLIDATED FINANCIAL
STATEMENTS
The directors of the Company are responsible for the preparation of the consolidated financial
statements that give a true and fair view in accordance with IFRSs, and for such internal control as the
directors determine is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible for assessing the
Group‟s ability continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
The directors are assisted by the Audit Committee in discharging their responsibilities for overseeing
the Group‟s financial reporting process.
UNIVISION ENGINEERING LIMITED - 24 - ANNUAL REPORT 2016
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(Incorporated in Hong Kong with limited liability)
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor‟s
report that includes our opinion. The 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, and for no other purpose. We do not assume
responsibility towards or accept liability to any other person for the contents of this report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs will always detect material misstatements when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Group‟s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors‟ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainly exists related to events
or conditions that may cast significant doubt on the Group‟s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor‟s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor‟s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
UNIVISION ENGINEERING LIMITED - 25 - ANNUAL REPORT 2016
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(Incorporated in Hong Kong with limited liability)
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated and company
financial statements. We are responsible for the direction, supervision and performance of the
group and company audit. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor‟s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
HKCMCPA Company Limited
Certified Public Accountants
PANG KING SZE, RUFINA
Practising Certificate number P05228
Hong Kong, China
4 September 2017
UNIVISION ENGINEERING LIMITED - 26 - ANNUAL REPORT 2016
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the year ended 31 March 2017
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
2017
£
2016
£
7(a)
4,795,739
3,866,521
10
(3,150,985)
(2,615,802)
1,644,754
1,250,719
4,091
(11,529)
(133,825)
(1,051,759)
(117)
9,118
(36,730)
(121,090)
(963,072)
(1,234)
451,615
137,711
-
-
8
9
10
10
12
13
Profit for the year from continuing operations
451,615
137,711
Discontinued operations
Loss for the year from discontinued operations
28
(40,723)
(478,320)
Profit/(loss) for the year
410,892
(340,609)
Other comprehensive income, net of tax
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translation foreign operations
767,799
142,154
Total comprehensive income/(loss) for the year
1,178,691
(198,455)
Profit/(loss) attributable to :
Equity shareholders of the Company
Profit from continuing operations
Loss from discontinued operations
Equity shareholders of the Company
Non-controlling interests
Total comprehensive (loss)/income attributable to:
Total comprehensive income/(loss) for the year attributable to:
Equity shareholders of the Company
Total comprehensive income from continuing operations
Loss from discontinued operations
Equity shareholders of the Company
Non-controlling interests
451,615
(21,278)
430,337
(19,445)
137,711
(249,922)
(112,211)
(228,398)
410,892
(340,609)
1,219,414
(21,278)
1,198,136
(19,445)
289,867
(249,922)
39,945
(238,400)
1,178,691
(198,455)
Earnings per share – Basic and Diluted
Continuing operations
Discontinuing operations
14
14
0.11p
(0.01)p
0.04p
(0.07)p
UNIVISION ENGINEERING LIMITED - 27 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2017
ASSETS
Non-current assets
Plant and equipment
Amounts due from related companies
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
Obligations under finance lease
Total current liabilities
Non-current liabilities
Amount due to a related company
Liabilities of disposal group classified as held for sale
Total liabilities
Equity
Share capital
Reserves
Notes
2017
£
2016
£
16
26
18
20
21
21
28
22
22
28
24
50,079
3,613,896
42,629
3,064,336
3,663,975
3,106,965
1,100,058
2,903,913
511,642
1,188,268
5,703,881
-
749,189
2,460,855
448,056
654,244
4,312,344
3,616,582
9,367,856
11,035,891
3,165,379
-
2,505,939
660
3,165,379
2,506,599
123,775
-
-
3,214,990
3,289,154
5,721,589
3,890,257
2,188,445
1,697,617
3,462,605
Equity attributable to equity shareholders of the Company
6,078,702
5,160,222
Non-controlling interests
Total equity
Total liabilities and equity
-
154,080
6,078,702
5,314,302
9,367,856
11,035,891
The financial statements on pages 27 to 73 were authorised for issue by the board of directors on
4 September 2017 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Pan WONG, Director
UNIVISION ENGINEERING LIMITED - 28 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2017
ASSETS
Non-current assets
Plant and equipment
Interest in a subsidiary
Amounts due from related companies
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
Notes
2017
£
2016
£
16
17
26
18
20
21
21
50,079
-
3,613,896
42,629
99,500
3,064,336
3,663,975
3,206,465
1,100,058
2,903,913
511,642
1,188,268
750,353
2,460,855
448,056
654,244
5,703,881
4,313,508
9,367,856
7,519,973
22
3,165,379
-
2,505,939
660
Total current liabilities
3,165,379
2,506,599
Non-current liability
Amount due to a related company
Total liabilities
Equity
Share capital
Reserves
Total equity
Total liabilities and equity
22
123,775
-
3,289,154
2,506,599
24
3,890,257
2,188,445
1,697,617
3,315,757
6,078,702
5,013,374
9,367,856
7,519,973
The financial statements on pages 27 to 73 were authorised for issue by the board of directors on
4 September 2017 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Pan WONG, Director
UNIVISION ENGINEERING LIMITED - 29 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2017
Balance at 1 April 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
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
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
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)
-
-
-
-
-
(128,507)
(2,609)
6,850
(128,507)
(128,507)
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
-
-
430,337
-
-
-
-
-
-
-
-
430,337
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
430,337
(19,445)
410,892
718,406
718,406
49,393
767,799
718,406
718,406
49,393
767,799
718,406
1,148,743
29,948
1,178,691
(19,094)
-
-
(13,166)
-
-
(75,994)
(154,269)
-
(184,028)
-
-
(260,022)
(154,269)
-
(19,094)
(13,166)
(230,263)
(184,028)
(414,291)
Disposal of a subsidiary
Dividend paid in respect of 2016 year
Transfer from share premium
-
-
2,192,640
-
-
(2,192,640)
(43,734)
(154,269)
-
Total transactions with owners,
recognised directly in equity
2,192,640
(2,192,640)
(198,003)
Balance at 31 March 2017
3,890,257
-
58,521
155,876
143,439
-
1,830,609
6,078,702
-
6,078,702
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 2017.
Notes:
1.
Share premium
The Company, by resolution reduced the share premium account for the year ended 31 March 2017.
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$2,071,307 was credited as a result of the
capital reduction.
UNIVISION ENGINEERING LIMITED - 30 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2017
Attributable to equity shareholders of the Company
Share
capital
£
Share
premium
£
(Note 1)
Retained
earnings
£
Special
capital
reserve “A”
£
(Note 2)
Special
capital
reserve “B”
£
(Note 3)
Translation
reserve
£
Total
equity
£
Balance at 1 April 2015
1,697,617
2,192,640
(282,268)
155,876
143,439
915,978
4,823,282
Comprehensive income:
Profit or loss
Other comprehensive income:
Exchange difference arising on translation
of foreign operations
Total other comprehensive income for the
year, net of tax
Total comprehensive income
Dividend paid in respect of 2015 year
Total transactions with owners,
recognised directly in equity
-
-
-
-
-
-
-
-
-
-
-
-
171,767
-
-
171,767
(128,507)
(128,507)
-
-
-
-
-
-
-
-
-
-
-
-
-
171,767
146,832
146,832
146,832
146,832
146,832
318,599
-
-
(128,507)
(128,507)
Balance at 31 March 2016
1,697,617
2,192,640
(239,008)
155,876
143,439
1,062,810
5,013,374
Comprehensive income:
Profit or loss
Other comprehensive income:
Exchange difference arising on translation
of foreign operations
Total other comprehensive income for the
year, net of tax
Total comprehensive income
-
-
-
-
-
-
-
-
Dividend paid in respect of 2016 year
Transfer from share premium
2,192,640
(2,192,640)
451,798
-
-
451,798
(154,269)
-
Total transactions with owners,
recognised directly in equity
2,192,640
(2,192,640)
(154,269)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
451,798
767,799
767,799
767,799
767,799
767,799
1,219,597
-
-
-
(154,269)
-
(154,269)
Balance at 31 March 2017
3,890,257
-
58,521
155,876
143,439
1,830,609
6,078,702
The currency translation from Hong Kong Dollars (“HK$”) 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 2017.
Notes:
1.
Share premium
The Company, by resolution reduced the share premium account for the year ended 31 March 2017.
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 - 31 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2017
Cash flows from operating activities
Profit before income tax
Adjustments for:
Interest expense
Interest income
Depreciation of plant and equipment
Inventory written-off
Impairment loss recognised on amounts due from customers for
contracts-in-progress
Reversal of provision of doubtful debt
Impairment loss on goodwill
Gain on disposal of a subsidiary
Changes in operating assets and liabilities:
(Increase)/decrease in inventories
Increase in trade and other receivables
Decrease in amounts due from related companies
Increase in trade and other payables
Net cash generated from/(used in) operations
Net cash (used in)/generated from discontinued operations
Net cash generated from operating activities
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Increase/(decrease) in bank deposit
Proceeds from disposal of a subsidiary
Net cash used in discontinued operations
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Interest paid
Dividend paid to shareholders of the Company
Repayment of finance lease liabilities
Advance from a related company
Net cash generated from discontinued operations
Net cash generated from/(used in) financing activities
Net increase/(decrease) 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 on cash and cash equivalents
Notes
2017
£
2016
£
451,615
137,711
12
8
16
9
8
12
15
117
(4,081)
22,821
22,561
51,028
(21,201)
-
(41,992)
1,234
(959)
16,546
-
21,470
-
25,830
-
480,868
201,832
(247,982)
(99,937)
6,692
269,404
409,045
(304,889)
104,156
4,081
(23,822)
3,477
58,841
(1,679)
111,894
(457,008)
-
65,846
(77,436)
99,200
21,764
959
(25,558)
(180,842)
-
(9,603)
40,898
(215,044)
(117)
(154,269)
(722)
123,775
261,375
230,042
375,096
654,244
-
158,928
(1,234)
(128,507)
(7,588)
-
51,429
(85,900)
(279,180)
1,221,707
(300,527)
12,244
Cash and cash equivalents at end of year
21
1,188,268
654,244
UNIVISION ENGINEERING LIMITED - 32 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 March 2017
Notes
2017
£
2016
£
Cash flows from operating activities
Profit before income tax
Adjustments for:
Interest expense
Interest income
Depreciation of plant and equipment
Inventory written-off
Gain on disposal of a subsidiary
Impairment loss recognised on amounts due from customers
for contracts-in-progress
Reversal of provision of doubtful debt
16
Changes in operating assets and liabilities:
(Increase)/decrease in inventories
Increase in trade and other receivables
Decrease in amounts due from related companies
Increase in trade and other payables
451,798
171,768
117
(4,081)
22,821
22,561
(41,992)
51,028
(21,201)
1,233
(959)
16,546
-
-
21,470
-
481,051
210,058
(247,982)
(99,937)
6,692
269,404
111,894
(457,008)
8,154
65,846
Net cash generated from/(used in) operating activities
409,228
(61,056)
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Increase/(decrease) in bank deposit
Proceeds from disposal of a subsidiary
4,081
(23,822)
3,477
58,841
959
(25,558)
(180,842)
-
Net cash generated from /(used in) investing activities
42,577
(205,441)
Cash flows from financing activities
Interest paid
Dividend paid to shareholders of the Company
Repayment of finance lease liabilities
Advance from a related company
(117)
(154,269)
(722)
123,775
(1,233)
(128,507)
(7,588)
-
Net cash used in financing activities
(31,333)
(137,328)
Net increase/(decrease) in cash and cash equivalents
420,472
(403,825)
Cash and cash equivalents at beginning of year
654,244
1,044,484
Effect of foreign exchange rate changes on cash and cash
equivalents
113,552
13,585
Cash and cash equivalents at end of year
21
1,188,268
654,244
UNIVISION ENGINEERING LIMITED - 33 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
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.
On 20 September 2016, the Company disposed of its subsidiary and sold to a related party, Mr.
Stephen Sin Mo KOO, the Executive Chairman of the Company.
The Company‟s shares were listed on the Alternative Investment Market (“AIM”) of London
Stock Exchange.
2.
BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards
Board (“IASB”).
The consolidated financial statements for the year ended 31 March 2017 comprise the Company
and its subsidiary. The measurement basis used in the preparation of the financial statements is
the historical cost basis.
The preparation of consolidated 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
consolidated financial statements and major sources of estimation uncertainty are discussed in
note 5 to the consolidated financial statements.
UNIVISION ENGINEERING LIMITED - 34 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
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 2017:
- Amendments to IFRS 11 “Accounting for acquisitions of interest in joint operations”
- Amendments to IAS 1 “Disclosure Initiative”
- Amendments to IAS 16 and IAS 38 “Clarification of acceptance methods of depreciation
and amortization”
- Amendments to IFRS 10, IFRS 12 and IAS 28 “Investment entities: Applying the
consolidation exception”
- Annual improvements to IFRSs 2012-2014 cycle contain amendments to four standards
with consequential amendments to other standards.
No new standards or amendments effective and adopted for the first time have had a material
impact to the Group or Company.
(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 Company‟s
operations, have been issued and are mandatory for adoption by the Company for accounting
periods beginning on or after 1 January 2017 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”
• IFRS 16 “Leases”
• Amendments to IFRS 10 and IAS 28 “Sale or contribution of assets between an investor and
its associate or joint venture”
• Amendments to IFRS 2 “Clarification and measurement of share-based payment
transactions”
• Amendments to IFRS 4 “Applying IFRS 9 Financial instruments with IFRS 4 Insurance
contracts”
• Amendments to IFRS 10 and IAS 28 “Sale or contribution of assets between an investor and
its associate or joint venture”
• Amendments to IAS 7 “Disclosure initiative”
• Amendments to IAS 12 “Recognition of deferred tax assets for unrealised losses”
The Group and the Company have not applied any new or revised IFRSs that are not yet
effective for the year ended 31 March 2017.
UNIVISION ENGINEERING LIMITED - 35 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
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.
When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire
interest in that subsidiary, with a resulting gain or loss being recognised in profit or loss. Any
interest retained in that former subsidiary at the date when control is lost is recognised at fair
value and this amount is regarded as the fair value on initial recognition of a financial asset.
During the year ended 31 March 2017, a subsidiary was disposed of and sold to a related party.
(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 - 36 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
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 profit or loss and other 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 Company 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 Company. Operating segments are reported in a
manner consistent with the internal reporting provided to the chief operating decision-maker.
The Company‟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 the Company 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 and Company‟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 and the Company 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 - 37 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
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 profit or loss and other 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 profit or loss and other 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”.
(c) Group companies
The results and financial position of the Company and its subsidiary (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 profit or loss and other 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 entities, and of borrowings and other currency instruments designated as hedges of such
investments, are taken to other comprehensive income. When a foreign operation is sold, such
exchange differences are transferred to the income statement as part of the gain or loss on sale.
When an inter-company loan balance which forms part of the net investment in a foreign entity
is repaid, such exchange differences are transferred to the income statement.
UNIVISION ENGINEERING LIMITED - 38 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
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 Company and the cost of the item can
be measured reliably. All other repair and maintenance expenses are recognised in profit or loss
when incurred.
UNIVISION ENGINEERING LIMITED - 39 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.5
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.
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
An impairment loss is reversed if there has been a favourable change in the estimates used to
determine the recoverable amount.
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.
4.6
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 - 40 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.7 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.
4.7.1 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. Loans
Nature and terms of item
Unsecured temporary advances to the former subsidiary, which are
interest-free and eliminated upon consolidation.
2. 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 - 41 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.7 Financial instruments (continued)
4.7.1 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 Company‟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 - 42 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.7 Financial instruments (continued)
4.7.2 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 Company are recognised at
the proceeds received, net of direct issue costs.
Financial liabilities
Financial liabilities (including trade and other payables and loans 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 and the Company 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 and the Company derecognises financial liabilities when, and only when, the
Group‟s and Company‟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.
UNIVISION ENGINEERING LIMITED - 43 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.7 Financial instruments (continued)
4.7.3 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.
4.8 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 doubtful debts.
4.9 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.
4.10 Cash and cash equivalents
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 and bank
overdrafts. Bank overdrafts are shown under current liabilities on the statement of financial
position.
4.11 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.
4.12 Share capital
Ordinary shares are classified as equity.
4.13 Dividend distributions
Dividend distributions to the Company‟s shareholders are recognised as liabilities in the
Company‟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.
UNIVISION ENGINEERING LIMITED - 44 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.14 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of
goods and rendering of services in the ordinary course of activities. Revenue is shown net of
business tax, value-added tax, rebates and discounts, and after eliminating sales within the
Group and the Company.
The Group and the Company recognise 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 and Company‟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 and the Company base the
best 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 the 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.
UNIVISION ENGINEERING LIMITED - 45 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.15 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”.
4.16 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.
4.17 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.
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.
UNIVISION ENGINEERING LIMITED - 46 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.18 Income tax
Income tax expense for the year comprises current and deferred tax. Tax is recognised in the
statement of profit or loss and other 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 Company 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.
4.19 Provisions and contingent liabilities
Provisions are recognised for other liabilities of uncertain timing or amount when the Group
and 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.
UNIVISION ENGINEERING LIMITED - 47 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.20 Events after the reporting period
Events after the reporting period that provide additional information about the Group and the
Company 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.
4.21 Related parties
(1) A person, or a close member of that person‟s family, is related to the Group if that person:
(i)
has control or joint control over the Group;
(ii)
has significant influence over the Group; or
(iii)
is a member of the key management personnel of the Group or the Group‟s parent
(2) An entity is related to the Group if any of the following conditions applies:
(i)
The entity and the Group are members of the same group (which means that each
parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of
the third entity.
(v)
The entity is a post-employment benefit plan for the benefit of employees of either
the Group or an entity related to the Group.
(vi) The entity is controlled or jointly controlled by a person identified in (1).
(vii)
A person identified in (1)(i) has significant influence over the entity or is a member
of the key management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key
management personnel services to the Group or to the Group‟s parent.
Close members of the family of a person are those family members who may be expected to
influence, or be influenced by, that person in their dealings with the entity.
UNIVISION ENGINEERING LIMITED - 48 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
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 and the Company 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.
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 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 statement of comprehensive income. As at 31 March
2017, the total carrying amount of the Group‟s trade and other receivables was £6,517,809
(2016: £5,525,191).
(ii)
Income taxes
The Group and the Company are subject to income tax in different jurisdiction in Hong Kong,
and Taiwan. 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 2017, the Company has unused tax losses of £4,808,854 (2016: £4,657,046)
available for offset against future profits. A deferred tax asset of £793,461 (2016: £768,413) 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 statement of profit or loss and other comprehensive income for the period in
which such future profits are recorded.
UNIVISION ENGINEERING LIMITED - 49 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
6.
FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
Financial assets:
Loans and receivables
- Amounts due from related companies
- Trade and other receivables
- Bank deposits
- Cash and bank balances
Financial liabilities:
- Amount due to a related company
- Trade and other payables
- Obligation under finance lease
2017
£
2016
£
3,613,896
2,903,913
511,642
1,188,268
3,064,336
2,460,855
448,056
654,244
123,775
3,165,379
-
-
2,505,939
660
(b) Financial risk management objectives and policies
The Group‟s major financial instruments include amounts due from related parties, bank and
cash, 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
2017
2016
2017
2016
2017
2016
2017
2016
RMB
USD
HK$
264,486
83,104
4,137,190
53,775
40,506
3,230,940
593,114
3,057
2,636,560
541,544
2,732
1,832,885
264,486
83,104
4,137,190
53,775
40,506
3,230,940 `
593,114
3,057
2,636,560
541,544
2,732
1,832,885
The Group and the Company currently do 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 - 50 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
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% (2016: 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 currency denominated monetary items and adjusts their translation at
the end of the reporting period for a 5% (2016: 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% (2016: 5%) against the relevant foreign currencies.
For a 5% (2016: 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.
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
2017
£
2016
£
(17,296)
(25,672)
4,213
1,988
78,981
73,582
The Group and the Company are exposed to fair value interest rate risk in relation to
fixed rate bank deposits 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 and the Company currently do 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 - 51 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
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 2016.
For the year ended 31 March 2017, 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 (2016: £0).
(ii) Credit risk
At 31 March 2017, 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
statements of financial position.
The Group‟s and Company‟s credit risk are primarily attributable to its trade and other
receivables. In order to minimise the credit risk, Management 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. 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 and the
Company 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 and the
Company 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 20.
UNIVISION ENGINEERING LIMITED - 52 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk
In managing liquidity risk, the Group‟s and Company‟s policy are to regularly monitor
and maintain an adequate level of cash and cash equivalents determined by Management
to finance the 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 2017, the Group and the Company had no banking facilities (2016: £438,574.
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 and the Company can be required to
pay. The table includes both interest and principal cash flows.
The Group
Non-derivative
financial
liabilities:
Trade and other
payables
Amount due to a
related company
2017
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 2017
£
Nil
3,165,379
-
Nil
-
123,775
3,165,379
123,775
-
-
-
3,165,379
3,165,379
123,775
123,775
3,289,154
3,289,154
UNIVISION ENGINEERING LIMITED - 53 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
The Group
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
£
Non-derivative
financial
liabilities:
Trade and other
payables
Obligations under
finance lease
The Company
Non-derivative
financial
liabilities:
Trade and other
payables
Amount due to a
related company
Nil
2,505,939
3.25%
768
2,506,707
-
-
-
2,505,939
2,505,939
768
768
2,506,707
2,506,707
-
-
-
2017
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 2017
£
Nil
3,165,379
-
Nil
-
123,775
3,165,379
123,775
-
-
-
3,165,379
3,165,379
123,775
123,775
3,289,154
3,289,154
UNIVISION ENGINEERING LIMITED - 54 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
The Company
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
£
Non-derivative
financial
liabilities:
Trade and other
payables
Obligations under
finance lease
(c) Fair value
Nil
2,505,939
3.25%
768
2,506,707
-
-
-
-
-
-
2,505,939
2,505,939
768
768
2,506,707
2,506,707
The fair values of financial assets and financial liabilities are determined in accordance
with generally accepted pricing models based on discounted cash flow analysis. Balances
with a subsidiary are unsecured, interest free and have no fixed repayment terms.
The Directors of the Company consider that the carrying amounts of financial assets and
financial liabilities recorded at amortised cost in the financial statements approximate to
their fair values at the end of the reporting period.
(d) Capital risk management
The primary objectives when managing capital are to safeguard the Group‟s and
Company‟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 and the Company actively and regularly review and manage the 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 and the Company monitor its capital structure on the basis of a net debt-to-
adjusted capital ratio. For this purpose the net debt is defined 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 - 55 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(d) Capital risk management (continued)
The strategy during 2017, which was unchanged from 2016, was to maintain the net debt-
to-adjusted capital ratio as low as feasible. In order to maintain or adjust the ratio, the
Group and the Company 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
Obligation under finance lease
The Group
The Company
2017
£
2016
£
2017
£
2016
£
3,165,379
-
3,165,379
2,505,939
660
2,506,599
3,165,379
-
3,165,379
2,505,939
660
2,506,599
Non-current liabilities
Amount due to a related company
123,775
-
123,775
Liabilities of disposal group
classified as held for sale
-
3,214,990
-
-
-
Total debt
3,289,154
5,721,589
3,289,154
2,506,599
Less: cash and bank balances
1,188,268
654,244
1,188,268
654,244
Net debt
Total equity
2,100,886
5,067,345
2,100,886
1,852,355
6,078,702
5,314,302
6,078,702
5,013,374
Net debt-to-adjusted capital
ratio
35%
95%
35%
37%
UNIVISION ENGINEERING LIMITED - 56 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
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 2017.
(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
2017
£
2016
£
3,113,629
1,400,119
281,991
4,795,739
1,818,788
6,614,527
2,414,362
1,194,680
257,479
3,866,521
3,547,320
7,413,841
451,732
(117)
451,615
138,945
(1,234)
137,711
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 and
Taiwan, and all of the Group‟s assets are located in the same geographic segment.
(c)
Information about major customers
Revenues of approximately £2,882,250 (2016: £2,791,170) are derived from two external
customers (2016: two), who contributed to 10% or more of the Group‟s revenue in 2017 and
2016.
UNIVISION ENGINEERING LIMITED - 57 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
8. OTHER INCOME
Interest income
Sundry income
9. OTHER GAINS AND LOSSES
Foreign exchange (loss) gain
Gain on disposal of a subsidiary (note 17)
Impairment loss recognised on amounts due from customers
for contracts-in-progress
Impairment loss on goodwill
Inventories write-off
Reversal of provision of doubtful debt
10. EXPENSES BY NATURE
Cost of inventories recognised as expenses
Sub-contracting costs
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
2017
£
2016
£
4,081
10
4,091
959
8,159
9,118
2017
£
2016
£
(1,133)
41,992
(51,028)
-
(22,561)
21,201
10,570
-
(21,470)
(25,830)
-
-
(11,529)
(36,730)
2017
£
1,151,770
1,103,954
22,821
28,008
80,047
127,537
341,913
1,396,007
60,075
1,456,082
2016
£
1,089,060
882,503
16,546
24,260
47,763
116,905
315,496
1,122,792
49,445
1,172,237
Auditor‟s remuneration
- audit services (parent company)
Total cost of sales, selling and distribution, administrative
expenses
24,437
35,194
4,336,569
3,699,964
UNIVISION ENGINEERING LIMITED - 58 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
11. DIRECTORS’ REMUNERATION
Directors‟ remuneration for the year is as follows:
Salaries,
bonuses and
allowances
£
Pension
scheme
contributions
£
-
59,427
75,335
60,044
194,806
-
1,765
1,765
1,765
5,295
2017
£
-
61,192
77,100
61,809
200,101
14,122
-
14,122
208,928
5,295
214,223
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
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
Chun Pan WONG
Danny Kwok Fai YIP
Non-executive director
Nicholas James LYTH
12. FINANCE COSTS
Finance charge on obligation under finance lease
117
1,234
2017
£
2016
£
UNIVISION ENGINEERING LIMITED - 59 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
13.
INCOME TAX IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
(a) Income tax in the consolidated statement of profit or loss and other comprehensive
income:
Hong Kong profits tax
2017
£
2016
£
-
-
Hong Kong profits tax is charged at the rate of 16.5% (2016: 16.5%) on the estimated
assessable profits arising in Hong Kong. No provision for Hong Kong profits tax has been
accrued 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
2017
£
2016
£
451,615
137,711
74,546
(10,427)
25,990
(4,280)
22,722
(2,495)
18,952
(4,408)
(85,646)
(34,771)
-
-
The calculation of basic earnings per share is based on the profit attributable to the equity
shareholders of the Company for the year of £430,337 from continuing and discontinued
operations (2016: loss of £112,211) and the profit for the year of £451,615 (2016: £137,711)
from continuing operations, and the weighted average of 383,677,323 (2016: 383,677,323)
ordinary shares in issue during the year.
There were no potential dilutive instruments at either financial year end.
UNIVISION ENGINEERING LIMITED - 60 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
15. DIVIDENDS
(i) Dividends payable to equity shareholders of the Company attributable to the year:
2017
£
2016
£
Final dividend proposed after the reporting period of 0.042
pence per ordinary share (2016: 0.037 pence per ordinary
share)
162,257
141,083
The final dividend proposed after 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 0.037 pence per
ordinary share (2016: 0.034 pence per ordinary share)
154,269
128,507
2017
£
2016
£
UNIVISION ENGINEERING LIMITED - 61 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
16. PLANT AND EQUIPMENT
The Group
Furniture
and fixtures
£
Computer
equipment
£
Motor
vehicles
£
Research
assets
£
Total
£
Cost
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
At 1 April 2016
Additions
Disposal
Foreign translation difference
29,381
9,760
(154)
4,911
62,823
14,063
-
10,157
89,865
-
(2,960)
13,581
At 31 March 2017
43,898
87,043
100,486
-
-
-
-
-
-
182,069
182,069
23,823
(3,114)
28,649
231,427
Accumulated depreciation
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
At 1 April 2016
Charge for the year
Disposal
Foreign translation difference
19,227
4,110
(154)
3,097
47,784
10,156
-
7,697
72,429
8,555
(2,960)
11,407
At 31 March 2017
26,280
65,637
89,431
Net book value
At 31 March 2017
17,618
21,406
11,055
At 31 March 2016
10,154
15,039
17,436
-
-
-
-
-
-
-
-
139,440
139,440
22,821
(3,114)
22,201
181,348
50,079
42,629
UNIVISION ENGINEERING LIMITED - 62 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
16. PLANT AND EQUIPMENT (CONTINUED)
The Company
Cost
At 1 April 2015
Additions
Foreign translation difference
At 31 March 2016
At 1 April 2016
Additions
Foreign translation difference
At 31 March 2017
Accumulated depreciation
At 1 April 2015
Charge for the year
Foreign translation difference
At 31 March 2016
At 1 April 2016
Charge for the year
Foreign translation difference
At 31 March 2017
Net book value
At 31 March 2017
At 31 March 2016
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Total
£
19,459
8,810
976
29,245
29,245
9,760
4,893
43,898
15,580
2,913
599
19,092
19,092
4,110
3,078
26,280
47,145
13,657
2,022
62,824
62,824
14,063
10,156
81,690
3,092
2,591
148,294
25,559
5,589
87,373
179,442
87,373
-
13,113
179,442
23,823
28,162
87,043
100,486
231,427
39,852
6,450
1,482
47,784
47,784
10,156
7,697
65,637
60,614
7,183
2,140
116,046
16,546
4,221
69,937
136,813
69,937
8,555
10,939
136,813
22,821
21,714
89,431
181,348
17,618
21,406
11,055
50,079
10,153
15,040
17,436
42,629
UNIVISION ENGINEERING LIMITED - 63 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
17.
INTEREST IN A SUBSIDIARY
Unlisted shares, at cost
Less: impairment loss
Amount due from a subsidiary
Total
2017
£
-
-
-
-
-
2016
£
639,965
(625,005)
14,960
84,540
99,500
The following contains the particulars of the subsidiary undertaking which principally affected
the results, assets and liabilities of the Group during the year ended 31 March 2017:
Place of
incorporation
and
operations
Issued and
fully paid up
share capital/
registered capital
Name
T-Com Technology
Taiwan
Co Limited
(“T-Com”)
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
On 20 September 2016, the Company disposed of its interest in T-Com which was sold to a
related party, Mr. Stephen Sin Mo KOO, the Executive Chairman of the Company at a
consideration of approximately £59,000 (equal to HK$600,000) as an arm‟s length transaction
in the normal course of business. The disposal was completed on 18 October 2016.
Consideration transferred
Cash
Analysis of assets and liabilities over which control was lost:
Net asset of T-com
Gain on disposal of a subsidiary (note 9)
£
58,841
£
16,849
41,992
58,841
UNIVISION ENGINEERING LIMITED - 64 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
18.
INVENTORIES
The Group
The Company
2017
£
2016
£
2017
£
2016
£
Raw materials
Finished goods
372,872
727,186
372,691
376,498
372,872
727,186
373,855
376,498
1,100,058
749,189
1,100,058
750,353
No provision for obsolete inventories are recognised for the year (2016: £nil) on slow-moving
inventories.
19. CONTRACTS-IN-PROGRESS
The Group
The Company
2017
£
2016
£
2017
£
2016
£
Contract costs incurred plus
attributable profits less
foreseeable losses
Progress billings to date
26,732,248
(27,029,019)
20,443,032
(20,662,966)
26,732,248
(27,029,019)
20,443,032
(20,662,966)
(296,771)
(219,934)
(296,771)
(219,934)
Represented by:
Amounts due from
customers for contracts-
in-progress
Less: allowance for
doubtful debts
Amounts due from
customers for contracts-
in-progress, net (note 20)
Amounts due to customers
for contracts-in-progress
(note 22)
1,808,935
1,281,429
1,808,935
1,281,429
(324,007)
(235,060)
(324,007)
(235,060)
1,484,928
1,046,369
1,484,928
1,046,369
(1,781,699)
(1,266,303)
(1,781,699)
(1,266,303)
(296,771)
(219,934)
(296,771)
(219,934)
At 31 March 2017, no retention receivables from construction customers are included within
“trade and other receivables” (2016: £0).
UNIVISION ENGINEERING LIMITED - 65 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
20. TRADE AND OTHER RECEIVABLES
The Group
The Company
2017
£
2016
£
2017
£
2016
£
580,180
985,103
580,180
985,103
(54,858)
(67,089)
(54,858)
(67,089)
525,322
794,073
99,590
918,014
448,134
48,338
525,322
794,073
99,590
918,014
448,134
48,338
1,484,928
1,046,369
1,484,928
1,046,369
Trade receivables
Less: allowance for
doubtful debts (note
20(a))
Trade receivables, net (note
20(b))
Other receivables
Deposits and prepayments
Amounts due from
customers for contracts-in-
progress, net (note 19)
Total carrying amount
2,903,913
2,460,855
2,903,913
2,460,855
All of the trade and other receivables are expected to be recovered within one year.
UNIVISION ENGINEERING LIMITED - 66 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
20. 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 and the Company are 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
2017
£
2016
£
2017
£
2016
£
At 1 April
Reversal of provision
Transfer to disposal group
classified as held for sale
Foreign translation
difference
67,089
(17,292)
191,806
-
67,089
(17,292)
-
(126,675)
-
65,131
-
-
5,061
1,958
5,061
1,958
At 31 March
54,858
67,089
54,858
67,089
At 31 March 2017, 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
2017
£
354,721
115,074
55,527
2016
£
79,590
838,424
-
2017
£
354,721
115,074
55,527
2016
£
79,590
838,424
-
525,322
918,014
525,322
918,014
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 - 67 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
21. CASH AND CASH EQUIVALENTS
(a) Cash and cash equivalents
The Group
The Company
2017
£
2016
£
2017
£
2016
£
Cash at bank and in hand
1,188,268
654,244
1,188,268
654,244
(b) Bank deposits
At 31 March 2017, the balance of £511,642 (2016: £448,056) is restricted as bank deposits with
maturities greater than three months, being 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 0.5% per annum (2016: 0.37%).
(c) Cash and bank balances are denominated in the following currencies:
The Group
The Company
2017
£
387
901
96,174
1,504,461
86
60,374
37,527
2016
£
337
803
98,028
919,415
74
48,540
35,103
2017
£
387
901
96,174
1,504,461
86
60,374
37,527
2016
£
337
803
98,028
919,415
74
48,540
35,103
AUD
CAD
GBP
HKD
JYP
RMB
USD
UNIVISION ENGINEERING LIMITED - 68 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
22. TRADE AND OTHER PAYABLES
Current portion:
Trade payables
Due to related parties (note
26(a))
Accruals and other payables
Amounts due to customers
for contracts-in-progress
(note 19)
Non-current portion:
Due to a related company
(note 26(b))
The Group
The Company
2017
£
2016
£
2017
£
2016
£
126,495
129,182
126,495
129,182
22,247
1,234,938
111,440
999,014
22,247
1,234,938
111,440
999,014
1,781,699
1,266,303
1,781,699
1,266,303
3,165,379
2,505,939
3,165,379
2,505,939
123,775
-
123,775
-
3,289,154
2,505,939
3,289,154
2,505,939
All of the trade and other payables are expected to be repaid within one year, other than those
respectively disclosed.
23.
INCOME TAX IN THE STATEMENT OF FINANCIAL POSITION
Unrecognised deferred tax assets
At 31 March 2017, the Group and the Company had unused tax losses of £4,808,854 (2016:
£4,705,477) that were available for offset against future taxable profits. 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 - 69 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
24. SHARE CAPITAL
Authorised :
800,000,000 ordinary shares of HK$0.0625 each
2017
£
2016
£
3,669,470
3,669,470
Issued and fully paid:
383,677,323 ordinary shares (2016: 383,677,323 ordinary
shares)
3,890,257
1,697,617
The Company has one class of ordinary shares.
25. EMPLOYEE RETIREMENT BENEFITS
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.
Contributions to the MPF scheme vest immediately.
Save as set out above, the Group and the Company have no other material obligations to make
payments in respect of retirement benefits of the employees.
26. RELATED PARTY TRANSACTIONS
Compensation of key management personnel
The remuneration of the key management of the Group during the year was as follows:-
2017
£
2016
£
Salaries, bonus and allowances
273,370
229,461
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.
UNIVISION ENGINEERING LIMITED - 70 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
26. RELATED PARTY TRANSACTIONS (CONTINUED)
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 2017, there is a balance of £22,247 (2016: £111,440) due to Mr. Stephen
Sin Mo KOO, a Director of the Company, which is unsecured, interest-free and
repayable on demand (note 22).
(b) At 31 March 2017, there is a payable balance of £123,775 (2016: £0) due to a
shareholder, Univision Holdings Limited, which is unsecured, interest-free and repayable
after 12 months.
(c) At 31 March 2017, bank facilities amounting to £0 (2016: £1,552,259) are personally
guaranteed by Mr. Stephen Sin Mo KOO. No charge has been requested for this
guarantee.
(d) At 31 March 2017, there are receivable balances of £3,613,896 (2016: £3,064,336) due
from related companies controlled by common shareholders of the Company, which are
guaranteed by a shareholder of the Company, interest-free and not expected to be
repayable in the next twelve months.
(e) During the year ended 31 March 2017, the Company sold and transferred its entire
interest in a subsidiary to Mr. Stephen Sin Mo KOO, the Director of the Company, for
cash consideration of £58,841, as an arms-length transaction in the normal course of
business.
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 - 71 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
27. COMMITMENTS
(a)
Capital commitments
At 31 March 2017, the Group and the Company did not have any 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
2017
£
2016
£
2017
£
2016
£
Within one year
Between two to five years
121,147
81,641
74,890
23,473
121,147
81,641
74,890
23,473
202,788
98,363
202,788
98,363
28. DISCONTINUED OPERATIONS
On 30 March 2016, the Company committed to a plan to dispose of its interest in T-Com,
whose assets and liabilities had previously been disclosed as “held for sale” and its operating
results were separately disclosed as “discontinued operations”, as follows:
Revenue from discontinued operations
Cost of sales
Gross profit
Other income
Other gains
Administrative expenses
Loss from discontinued operations
Income tax credit
Loss for the year, net of tax
2017
£
2016
£
1,818,788
(1,467,951)
350,837
3,547,320
(3,289,203)
258,117
278
171
(392,009)
421
18,997
(788,291)
(40,723)
-
(510,756)
32,436
(40,723)
(478,320)
On 20 September 2016, the Company approved to sell its entire interest in the subsidiary to a
related party, Mr. Stephen Sin Mo KOO, the Executive Chairman of the Company at a
consideration of approximately £59,000 (equal to HK$600,000) as an arm‟s length transaction
in the normal course of business. The disposal was completed on 18 October 2016 and the
Company recorded a gain on disposal of a subsidiary of £41,992 as a result.
UNIVISION ENGINEERING LIMITED - 72 - ANNUAL REPORT 2017
UNIVISION ENGINEERING LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2017
29. CONTINGENT LIABILITIES
On 10 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, Mr. Stephen Sin Mo KOO, on 14
December 2015 and a subsequent series of oral agreements.
On 5 September 2016, Hai Li discontinued the action against the Company‟s director, Mr.
Stephen Sin Mo KOO and the Company.
At 31 March 2017, the Group and the Company have no other significant contingent liabilities
from pending litigation or legal claims..
30. EVENTS AFTER THE REPORTING PERIOD
Saved as disclosed elsewhere in the financial statements, the Group and the Company have the
following significant events after the reporting period.
(i) On 11 May 2017, the Company entered into a major construction contract with MTR
Corporation Limited for replacement of CCTV Systems in the fixed price with a contract
sum of £40 million in a term of six and half years, due November 2023.
(ii) On 18 August 2017, the Directors proposed a final dividend. Further details are disclosed
in note 15(i).
31. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements were approved and authorised for issue by the Board of
Directors on 4 September 2017.
UNIVISION ENGINEERING LIMITED - 73 - ANNUAL REPORT 2017
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 2017 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 29th September 2017 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 2017 together with the Directors‟ report and the Independent Auditor‟s report;
2. To declare a final dividend for the financial year ended 31 March 2017.
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. Stephen Sin Mo KOO who retired by rotation, as a Director of the Company;
5. To re-elect Mr. Danny Kwok Fai YIP 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 - 74 - ANNUAL REPORT 2017
NOTICE OF ANNUAL GENERAL MEETING
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,
4 September 2017 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
15 September 2017 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 - 75 - ANNUAL REPORT 2017