UniVision Engineering Limited
Annual Report
Year ended 31 March 2018
UNIVISION ENGINEERING LIMITED - 0 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
Annual Report
Year ended 31 March 2018
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
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Notice of Annual General Meeting
2
3
9
11
17
18
21
22
28
29
30
31
32
68
UNIVISION ENGINEERING LIMITED - 1 - ANNUAL REPORT 2018
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
SPARK Advisory Partners Limited
5 St. John’s Lane,
London, EC1M 4BH
U.K.
Senior Management
Mike Chiu Wah CHAN, Director of Operations
Wai Chung LAM, Software Development Manager
Ivan Chi Hung CHAN, Sales Manager
Principal bankers
Hong Kong and Shanghai Banking Corporation
Bank of China (Hong Kong)
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
Broker
SI Capital Limited
46 Bridge Street,
Godalming,
Surrey GU7 1HL
U.K.
UNIVISION ENGINEERING LIMITED - 2 - ANNUAL REPORT 2018
CHAIRMAN’S STATEMENT
INTRODUCTION
I am pleased to report the Company’s audited results for the financial year ended 31 March 2018.
Turnover for the year increased by 18.5% (underlying rate) to £5.6m (2017: £4.8m). This increase
was mainly due to the 34% growth in construction contracts which came largely from the Replacement
of CCTV Systems Project (“the Major Contract”) with MTR Corporation Limited (“MTRC”) in Hong
Kong which was commenced in May 2017. As we have previously informed shareholders, we believe
that this Major Contract is transformational for the business and leads to a step-change in revenue and
profitability of the Company. The Board expects that the Company will achieve a substantial growth in
the business, which will become more evident in the current financial year as we will be able to
demonstrate a whole 12 months’ contribution from the Major Contract, which will build a base for the
forthcoming periods until that contract completes in 2023.
In maintaining its dividend policy, the Board declares a final dividend of 0.43 HK cents (gross) per
share for the financial year ended 31 March, 2018 (2017: 0.41 HK cents), an increase of 4.9%.
The Directors are confident of the future of UniVision and are optimistic about the Company’s
prospects.
NEW MAJOR CONTRACT WITH MTRC
As announced on 12 May 2017, the Company won a major contract of value HK$389.4m (£38.1m)
with MTRC following a tender process. With further, already agreed add-ons HK$17.9m to this
contract, the total value of this contract is now HK$407.3m. The contract provides for the replacement
works of the Closed Circuit Television (CCTV) systems for numerous MTRC railway lines. The
Company is responsible to replacing the existing analogue CCTV system installed in the stations along
the specified lines with a unified IP-based, digital CCTV system.
The Major Contract commenced mid May 2017 and the expected completion date is November 2023.
The first invoice was billed in January 2018, with payment being received in mid-March 2018. The
Board expects regular billing, on work completed and certified on a monthly basis, during the period
of contract.
As announced on 17 April 2018, the Company invoiced HK$5.1m to MTRC in the financial year
ended 31 March 2018. This leaves a further value of HK$402.2m over the remaining five and half
years of the contract. The Company spent a number of months, from May 2017, on design and testing
before the actual installation works commenced, which meant that there was back loading of billing in
the year to 31 March 2018.
The Company is now fully engaged on the installation stage of the Major Contract. Up to the date of
this Statement, the Group has invoiced HK$33.4m to MTRC with 10% retention money held. The
gross valuation or certified works on the Contract was HK$37.1m up to 30 April 2018.
The Company acts as the main contractor for the project. According to the contract, the Company is
required to provide a performance bond equivalent to 3% of the contract sum, i.e. HK$11.7m. As
announced on 29 January 2018, a leading insurance company has provided a surety bond facility of
HK$30m. The Company has used HK$11.7m of the facility for the Major Contract with MTRC. The
UNIVISION ENGINEERING LIMITED - 3 - ANNUAL REPORT 2018
CHAIRMAN’S STATEMENT
(Continued)
unutilised facility as today is HK$18.3m that can be utilised for other potential substantial projects. It
minimises the cash burden and provides liquidity for business development.
The Board is always reviewing and negotiating with suppliers and sub-contractor for favourable credit
terms. Few major suppliers are willing to offer longer credit period for the equipment. The Board
closely monitor the status of working capital for the project. As announced on 29 January 2018,
HSBC, one of the Company’s major bankers, provided banking facilities, including an invoice
discounting/factoring facility of HK$45m and trade facility of HK$8m. This facility provides
additional working capital to ensure the contract with MTRC can operate smoothly.
After the annual review in late July 2018, HSBC has increased our trade facility to the Company from
HK$8m to HK$13m, including an overdraft limit of HK$4m, with immediate effect. We believe that
this demonstrates HSBC’s growing confidence in the Company’s business and it provides more
funding capacity and
invoice
for
discounting/factoring facility remains unchanged.
the Company’s operations. The
flexibility
funding
FINANCIAL REVIEW
The profit attributable to the equity holders of the Company is £735K (2017: £452K).
The improvement in performance in the year is mainly attributable to:-
i) 34% growth in the income from construction contracts; and
ii) Improved gross profit margin of 7% from maintenance contracts.
Having regard to the keen competitive environment and increased costs, the Directors are encouraged
by this result.
The net working capital at the year ended was £2.8m (2017: £2.5m) The Directors attribute this to
close monitoring and effective control of working capital and the banking facilities.
During the year under review the relative weakness of the HK$ against GBP has led to a 1.9%
appreciation in the GBP reported amount in the Consolidated Statement of Comprehensive Income.
Also, a relative weakness of the HK$ at the year-end has led to a 14% depreciation in the GBP
reporting amount in the Consolidated Statement of Financial Position. It also led to the significant non-
cash other comprehensive loss of £779K (2017: income £768K) on exchange differences arising on
translation of foreign operations.
All figures in the Financial Statements needed 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).
‘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 Nil (2017: £41K).
Turnover in the year increased by 18.5% to £5.6m (2017: £4.8m). This increase was mainly due to the
significant growth in construction contract income. The revenue from construction contracts
significantly increased by 34% as compared with last year.
UNIVISION ENGINEERING LIMITED - 4 - ANNUAL REPORT 2018
The growth of construction revenue was mainly due to the income generated from the following
contracts:-
CHAIRMAN’S STATEMENT
(Continued)
MTRC Replacement of CCTV Systems (the Major Project)
Hong Kong-Zhuhai-Macao Bridge Project
Liangtang Traffic Control and Surveillance System Project
Central Wanchai By Pass Project
Modern Terminal CCTV System Upgrade Project
In addition, construction contracts including the installation, relocation, modification and replacement
works were provided by MTR Corporation Limited also contributed to the increase.
On the other hand, revenue from the Company’s maintenance contracts decreased slightly by 5.6%
compared with last year. The CCTV replacement project for the railway lines of MTRC led to low
demand for maintenance works for MTRC. The slow growth was mainly due to the change in scope of
the services provided. The existing maintenance contract for MTRC, was renewed during the period
for a further three years to 31 December 2020.
Gross profit margin for the Company remained stable at 32% (2017: 34%). The main reason was the
decrease in gross profit from 34% to 30% in the Company’s construction contracts, where the Major
Contract has been at a relatively lower margin when compared to many of our other construction
contracts, which have a much lower revenue. On the other hand, our profit margin for the maintenance
contracts was improved by 7% to 44% (2017: 37%) This increment was contributed from a few orders
with comparatively high profit margin. In facing the increased operating costs, inflation and the long-
term contract period, the Company will maintain to impose the effective and efficient control of
human resources, material costs, logistics and sub-contracting charges to maintain the level of profit
margin.
Administration expenses in the year decreased by 4.4% to £0.99m (2017: £1.05m). This was achieved
through effective control of human resources, operating costs and other overheads.
Finance costs was increased to £2K (2017: £0.1K) since the Company commenced to use its banking
facility with HSBC in the 4th quarter of the financial year. Interest was charged at HSBC’s Hong Kong
Dollars Best Lending Rate.
Net profit before income tax from continuing operations was £735K (2017:£452K). Basic earnings
from continuing operations per share for this year increased to 0.19p (2017: 0.11p).
No significant capital investment occurred in the year.
The Directors propose the payment of a final dividend of 0.43 HK cents (gross) per share for the
financial year ended 31 March, 2018 (2017: 0.41 HK cents), an increase of 4.9%. The dividend
timetable is as follows:
Ex date
Record date
Payment date
13 September 2018
14 September 2018
8 October 2018
Payment of the dividend is subject to approval by shareholders at the Annual General Meeting and has
not been included as a liability in the financial statements.
UNIVISION ENGINEERING LIMITED - 5 - ANNUAL REPORT 2018
CHAIRMAN’S STATEMENT
(Continued)
BUSINESS REVIEW
Markets
According to the WiseGuy Report:Video Surveillance as a Service Global Market 2018- Key
Application Opportunities, Demand, Status, Trends, Share, Forecast 2022, the market is projected to
grow with a Compound Annual Growth Rate of 26.25% during the period 2017 to 2022.
Growing focus on infrastructure protection, public safety and increasing demand for high resolution
imaging are some of the key factors driving the market growth. Besides, technological advancements
have led to enhanced cyber security systems and efficient remote monitoring, leading to burgeoning
demand for these systems over the forecast period.
The Board regards the increasing demand for wireless network infrastructure as the key growth driver
for the surveillonce market. The major contract with MTRC that replacing CCTV cameras from
analogue-based with IP-based units is a very good example of that market trended. The Board
anticipates that the demand for Security and Surveillance Systems from local government
infrastructure projects and the private sector to increase in coming years.
The Board believes being awarded the Major Contract to UniVision, by MTRC, will give the
Company a great opportunity to market its brand to purchasers of similar systems outside Hong Kong,
The Company currently considering looking at other market segments, such as rolling stock business
in railway, to strengthen our business growth.
As the Company has secured a big order from MTRC on IP-based CCTV System, a logical new step
would be Video Analytics, in particular Facial Recognition. This technology is being enhanced rapidly
and UniVision is in a very good position to enter into this market, which is considered as a big wave in
the near future.
Business
The Company has the opportunity to win additional potential contracts from MTRC that are associated
with the Main Contract, as we have already demonstrated. The additional works amounting to
HK$10.9m (£1.05m) for the integration of the Station CCTV System in the Hung Hom to Admiralty
Section of the Shatin to Central Link project, as announced on 1 November 2017 is a good example.
Under the Major Contract with MTRC, the Company acts as the network service provider in the
application of CCTV systems. During the current year, the Company recruited additional professional
staff to handle those tasks. The Board considers that entering the new business as a provider of
network service and information technology may offer the Company further business opportunities in
related areas.
MTRC has renewed the existing contract with the Company to provide maintenance services to
MTRC’s network of Closed Circuit Television (“CCTV”) systems and public address systems on
seven railway lines in Hong Kong. The contract has been renewed for a further three year period
commencing on 1 January 2018.
UNIVISION ENGINEERING LIMITED - 6 - ANNUAL REPORT 2018
CHAIRMAN’S STATEMENT
(Continued)
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 were major customers in this financial year.
The Major Contract with MTRC led to a significant annualised outstanding workload value which
requires the Company to have additional working capital in the financial assessment by the Hong
Kong Government. Works Branch. A shortfall in working capital of GBP 0.62m (HK$6m) existed in
the 2017 financial test. This meant that the Company is suspended, by this customer, from tendering
for additional public works contracts for up to six months from 27 July 2018 until the shortfall has
rectified. The Board regard the effect of this temporary suspension as insignificant given the current
state of the business. The Company currently concentrates its resources on the Major Contract with
MTRC, the main driver for the business which means that, with our other construction and
maintenance contracts we are currently operating close to full capacity. Nevertheless, the Company
will apply to uplift the suspension as soon as possible.
Whilst the Board is delighted with its major customer relationships, to avoid the concentration of
customers, the Company has initiated a plan to diversify our customer base, particularly looking to the
sizeable private and domestic sectors.
UPDATE ON DIRECTOR SHARE TRANSFER
Further to the announcement on 20 September 2017, the terms regarding the sale of shares by Stephen
Koo, Chairman of UniVision, to Nan Ning Hai Li Real Estate Development Limited (“Hai Li”) and
Mr. Xin Hai were extended to 30 September 2017. Up to date, Stephen Koo had not received the
consideration for this transaction. As the extended final date for the settlement of consideration has
expired, the Memorandum of Understanding and the Sale and Purchase Agreement for acquiring the
shares owned by Stephen Koo are ineffective due to non-performance. As a result, there has been no
change to the majority shareholding position of the Company.
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. Given our current
commitment to the Major Contract and other customers, we will need to manage our growth carefully
and will manage our expansion carefully, with a view to controlling cost and maintaining our margins.
As there are several major local infrastructure projects are due to be completed in the coming years,
including the High Speed Railway extension (Hong Kong Section), the new runway for Hong Kong
International Airport and the extension of MTR lines in Hong Kong, these will provide opportunity for
business growth.
We believe that demand for Security and Surveillance Systems will remain high and the Company’s
core competence relies on our dedicated and experienced management and personnel. The Company
will reward the employees according to the Company’s and their individual performance.
UNIVISION ENGINEERING LIMITED - 7 - ANNUAL REPORT 2018
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 Company.
CHAIRMAN’S STATEMENT
(Continued)
MR. STEPHEN SIN MO KOO
EXECUTIVE CHAIRMAN
15 August 2018
UNIVISION ENGINEERING LIMITED - 8 - ANNUAL REPORT 2018
DIRECTORS AND SENIOR
MANAGEMENT’S BIOGRAPHIES
DIRECTORS’ BIOGRAPHIES
Nicholas James LYTH – Non-executive Director (aged 52)
Mr. Lyth is a qualified chartered management accountant and has over 17 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 Chief Executive Officer of
Altona Energy plc, an U.K.quoted mining and exploration company.. He is responsible for day to day
liaison with UK investors for UniVision. 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 58)
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 54)
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 - 9 - ANNUAL REPORT 2018
DIRECTORS’ AND SENIOR
MANAGEMENT’S BIOGRAPHIES
(Continued)
Peter Yip Tak CHAN – Director of Sales and Marketing (aged 54)
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 43)
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.
Wai Chung LAM – Software Development Manager (aged 49)
Mr. Lam joined UniVision in October 2012, and has over 18 years experience in Software
Development. He oversees the function of UniVision’s Research and Development and CCTV
Software Development. Mr. Lam was also employed by UniVision during the period from June 1993
to July 2000. He has performed the leading role in the system integation development project of MTR
Corporation and Hong Kong International Airport at that period. He holds a Higher Diploma in
Computer Engineering from City University of Hong Kong.
Ivan Chi Hung CHAN – Sales Manager (aged 43)
Mr. Chan joined UniVision as Technician in October 1996, and was promoted to a number of
increasingly senior positions in various departments, prior to being appointed to his present position on
1 January 2012. He is now assisting the management of UniVision’s Sales and Marketing Division.
Mr. Chan is also responsible to manage the construction projects as assigned by the Company. He
holds a Bachelor of Engineering (Honours) degree in Electronics and Communication Engineering
from City University of Hong Kong.
UNIVISION ENGINEERING LIMITED - 10 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
DIRECTORS’ REPORT
The Directors have pleasure in presenting their annual report together with the audited financial
statements of the Company for the year ended 31 March 2018.
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 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. Details of the transaction are set out in note 27 to the financial statements.
Review of the Business
Details on the assessment and analysis of the Company’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 Company’s profit for the year ended 31 March 2018 and the state of affairs of the Company
at that date are set out in the statement of profit or loss and other comprehensive income on page
28 and in the statement of financial position on page 29, respectively.
The Company’s changes in shareholders’ equity for the year ended 31 March 2018 are set out in
the statement of changes in equity on page 30 respectively.
The Company’s cash flow for the year ended 31 March 2018 is set out in the statement of cash
flows on pages 31.
UNIVISION ENGINEERING LIMITED - 11 - ANNUAL REPORT 2018
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 assets
Quick Ratio :
(Current Assets –Inventories)/ Current
Liabilities
2018
2017
1.8
1.8
37 days
40 days
3.9
32%
12%
1.6
2.9
34%
7%
1.4
:
:
:
:
:
:
UNIVISION ENGINEERING LIMITED - 12 - ANNUAL REPORT 2018
DIRECTORS’ REPORT
(Continued)
Share Capital and Reserves
Details of the movements in share capital are set out in note 23 on page 64.
The movements in reserves during the year are set out in the statement of changes in equity on
page 30.
Dividends
The Directors propose that the payment of a final dividend of 0.43 HK cents (gross) per share
for the financial year ended 31 March 2018.
Plant and Equipment
Details of the movements in plant and equipment are set out in note 16 on pages 58.
Directors
The directors who held office during the year and to the date of this report were as follows:
Stephen Sin Mo KOO
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
Mr. Chun Pan WONG, Mr. Nicholas James LYTH and Mr. Peter Yip Tak CHAN retire by
rotation at the forthcoming annual general meeting in accordance with the Company’s Articles
of Association and, being eligible, the current directors offer themselves for re-election.
Directors’ Interests in Contracts
No director had a material interest in any contract of significance to the business of the
Company to which the Company, its holding company, or its subsidiaries was a party at the end
of the year or at any time during the year.
Directors’ Interests in Shares
According to the register of Directors’ Shareholdings kept by the Company, particulars of
interests of the Directors (or their immediate families) who held office at the end of the financial
year in the ordinary shares of the Company are as set out in the table below:
Ordinary Shares held as at 31 March 2018
Stephen Sin Mo KOO
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
279,703,700*
1,200,000
-
-
-
UNIVISION ENGINEERING LIMITED - 13 - ANNUAL REPORT 2018
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 9 August 2018, the Directors had been informed of the following companies that held 3% or
more of the Company’s issued ordinary share capital:
UniVision Holdings Limited
(1)
Up Sky Investments Limited
(2)
Hargreaves Lansdown
(Nominees) Limited
Beaufort Nominees Limited
Number of
ordinary shares
183,736,000
% of total issued share
capital
47.9
78,744,000
20.5
40,245,643
24,960,073
10.5
6.5
UNIVISION ENGINEERING LIMITED - 14 - ANNUAL REPORT 2018
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.
Political and Charitable Donations
During the year the Company made Nil charitable contributions (2017: £98.). No political contribution
was made.
Environmental Policy
The Company 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 to maintain an efficient operation. Proper treatment of industrial
wastes and hazardous material has been put in practice.
Employees
The Company values staff involvement at all levels of operations, and uses various means to train,
inform and consult the employees. The Company encourages the management to discuss egularly 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 Company.
The Company 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
Company 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 20 September
2018 at 5:00 p.m. The Notice of Meeting appears on page 68 to 69.
Annual Report
The annual report for the year ended 31 March 2018 will be uploaded on the Company’s website
www.uvel.com on 15 August 2018 upon announcement and the hard copy will be sent to shareholders
by our Registrars, Computershare Investor Services (Jersey) Limited.
UNIVISION ENGINEERING LIMITED - 15 - ANNUAL REPORT 2018
(Continued)
DIRECTORS’ REPORT
Auditor
HKCMCPA Company Limited, Certified Public Accountants, remain as our auditor for the year. A
resolution to re-appoint HKCMCPA Company Limited, Certified Public Accountants as auditor of the
Company will be put to the forthcoming Annual General Meeting.
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
Hong Kong
15 August 2018
UNIVISION ENGINEERING LIMITED - 16 - ANNUAL REPORT 2018
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
£
2018
Total
£
2017
Total
£
Executive Directors
Stephen Sin Mo KOO
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
Non-executive Director
Nicholas James LYTH
-
72,998
56,313
56,582
-
1,732
1,732
1,732
-
5,792
4,635
4,657
-
80,522
62,680
62,971
-
77,100
61,809
61,192
13,859
-
-
13,859
14,122
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 - 17 - ANNUAL REPORT 2018
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 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 - 18 - ANNUAL REPORT 2018
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. The purpose of this system is to
safeguard Company assets, maintain proper accounting records, and ensure that reliable financial
information is used within the Company 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 Company 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 Company. This decision will be kept under review.
UNIVISION ENGINEERING LIMITED - 19 - ANNUAL REPORT 2018
REPORT ON CORPORATE GOVERNANCE
(Continued)
Going Concern
After making appropriate enquiries, the Directors have a reasonable expectation that the Company
has 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 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 - 20 - ANNUAL REPORT 2018
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 Company’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 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 Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the Company’s transaction and disclose with reasonable accuracy at any time
the financial position of the Company. They have general responsibility for taking such steps as
are reasonably available to them to safeguard the assets of the 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 Company’s website. The Company is compliant with AIM Rule 26
regarding the Company’s website.
UNIVISION ENGINEERING LIMITED - 21 - ANNUAL REPORT 2018
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(Incorporated in Hong Kong with limited liability)
OPINION
We have audited the financial statements of UniVision Engineering Limited (the “Company”) set out
on pages 28 to 67, which comprise the Statement of Financial Position as at 31 March 2018, the
Statement of Profit or Loss and Other Comprehensive Income, the Statement of Changes in Equity, the
Statement of Cash Flows for the year then ended, and a summary of significant accounting policies
and other explanatory notes.
In our opinion, the accompanying financial statements give a true and fair view of the Statement of
Financial Position as at 31 March 2018, and the Statement of Profit or Loss and Other Comprehensive
Income, and the Statement of Changes in Equity and the 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 Company Financial Statements section of our report. We are independent of 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 - 22 - ANNUAL REPORT 2018
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 financial statements of the current period. These matters were addressed in the context
of our audit of the 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 Company recorded
revenue from the provision of construction
works in Hong Kong totalling £4,093,942
for the year ended 31 March 2018.
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 a 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 - 23 - ANNUAL REPORT 2018
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 19
Trade and other receivables of the financial
statements, as at 31 March 2018, the
Company had trade and other receivables,
of £4,328,313. For the year ended 31
March 2018, no impairment loss has been
recognised.
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
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 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 - 24 - ANNUAL REPORT 2018
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 financial statements
and our auditor’s report thereon.
Our opinion on the 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 financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the 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 FINANCIAL STATEMENTS
The directors of the Company are responsible for the preparation of the 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 financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’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 Company 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 Company’s financial reporting process.
UNIVISION ENGINEERING LIMITED - 25 - ANNUAL REPORT 2018
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 FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the 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
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 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 Company’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 Company’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 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
Company to cease to continue as a going concern.
UNIVISION ENGINEERING LIMITED - 26 - ANNUAL REPORT 2018
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 financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
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 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.
USE OF REPORT
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’s shareholders as a body for this report or for the opinions we have formed.
HKCMCPA Company Limited
Certified Public Accountants
KONG YIN TO
Practising Certificate number P06764
Hong Kong, China
15 August 2018
UNIVISION ENGINEERING LIMITED - 27 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the year ended 31 March 2018
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Other gain (losses), net
Selling and distribution expenses
Administrative expenses
Finance costs
Profit before income tax
Income tax
Notes
2018
£
2017
£
7(a)
5,593,171
4,795,739
10
(3,775,759)
(3,150,985)
1,817,412
1,644,754
11,312
19,622
(124,643)
(986,853)
(2,089)
4,091
(11,529)
(133,825)
(1,051,759)
(117)
734,761
451,615
-
-
8
9
10
10
12
13
Profit for the year from continuing operations
734,761
451,615
Discontinued operations
Loss for the year from discontinued operations
Profit for the year
Other comprehensive (loss)/income, net of tax
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translate of foreign operations
-
(40,723)
734,761
410,892
(779,178)
767,799
Total comprehensive (loss)/income for the year
(44,417)
1,178,691
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 for the year attributable to:
Equity shareholders of the Company
Total comprehensive (loss)/income from continuing operations
Loss from discontinued operations
Equity shareholders of the Company
Non-controlling interests
734,761
-
734,761
-
734,761
451,615
(21,278)
430,337
(19,445)
410,892
(44,417)
-
(44,417)
-
1,219,414
(21,278)
1,198,136
(19,445)
(44,417)
1,178,691
Earnings per share – Basic and Diluted
Continuing operations
Discontinued operations
14
14
0.19p
-
0.11p
(0.01)p
UNIVISION ENGINEERING LIMITED - 28 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
STATEMENT OF FINANCIAL POSITION
As at 31 March 2018
ASSETS
Non-current assets
Plant and equipment
Amounts due from related companies
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Total current liabilities
Non-current liabilities
Amount due to a related company
Total liabilities
Equity
Share capital
Reserves
Total equity
Total liabilities and equity
Notes
2018
£
2017
£
16
25
17
19
20
53,962
3,075,815
50,079
3,613,896
3,129,777
3,663,975
970,625
4,328,313
973,313
1,100,058
2,903,913
1,699,910
6,272,251
5,703,881
9,402,028
9,367,856
21
3,410,529
3,165,379
3,410,529
3,165,379
25
108,617
123,775
3,519,146
3,289,154
23
3,890,257
1,992,625
3,890,257
2,188,445
5,882,882
6,078,702
9,402,028
9,367,856
The financial statements on pages 28 to 67 were authorised for issue by the board of directors on
15 August 2018 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Pan WONG, Director
UNIVISION ENGINEERING LIMITED - 29 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2018
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
(173,812)
155,876
143,439
19,094
1,125,368
5,160,222
154,080
5,314,302
Balance at 1 April 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
-
-
-
-
-
-
-
-
-
-
430,337
-
-
430,337
(43,734)
(154,269)
(2,192,640)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
Total transactions with owners,
recognised directly in equity
2,192,640
(2,192,640)
(198,003)
Balance at 31 March 2017
3,890,257
Comprehensive income:
Profit or loss
Other comprehensive income:
Exchange difference arising on
translation
Total other comprehensive income for
the year, net of tax
Total comprehensive income
Dividend paid in respect of 2017 year
Total transactions with owners,
recognised directly in equity
-
-
-
-
-
-
Balance at 31 March 2018
3,890,257
-
-
-
-
-
-
-
-
58,522
155,876
143,439
734,761
-
734,761
(151,403)
(151,403)
-
-
-
-
-
-
-
-
-
-
-
-
641,879
155,876
143,439
-
-
-
-
-
-
-
1,830,608
6,078,702
-
734,761
(779,178)
(779,178)
(779,178)
(779,178)
(779,178)
(44,417)
(151,403)
-
-
-
-
-
-
-
-
6,078,702
734,761
(779,178)
(779,178)
(44,417)
(151,403)
(151,403)
(151,403)
1,051,430
5,882,882
-
5,882,882
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 2018.
Notes:
1.
Share premium
The Company, by resolution reduced the share premium account during 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 2018
UNIVISION ENGINEERING LIMITED
STATEMENT OF CASH FLOWS
For the year ended 31 March 2018
Cash flows from operating activities
Profit before income tax
Adjustments for:
Interest expense
Interest income
Depreciation of plant and equipment
Provision for warranty
Inventory written-off
Impairment loss (reversed)/recognised on amounts due from
customers for contracts-in-progress
Impairment loss reversal on doubtful debt
Gain on disposal of plant and equipment
Gain on disposal of a subsidiary
Changes in operating assets and liabilities:
Increase in inventories
Increase in trade and other receivables
Decrease in amounts due from related companies
Increase in trade and other payables
Net cash (used in)/generated from operations
Net cash used in discontinued operations
Net cash (used in)/generated from operating activities
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Increase in bank deposit
Proceeds from disposal of plant and equipment
Proceeds from disposal of a subsidiary
Net cash used in discontinued operations
Net cash (used in)/generated from investing activities
Cash flows from financing activities
Interest paid
Dividend paid to shareholders of the Company
Repayment of finance lease liabilities
Advance from a related company
Net cash generated from discontinued operations
Net cash (used in)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes on cash and cash equivalents
Notes
2018
£
2017
£
734,761
451,615
12
8
16
8
12
15
2,089
(2,896)
30,580
9,624
47,832
(57,256)
-
(1,444)
-
117
(4,081)
22,821
-
22,561
51,028
(21,201)
-
(41,992)
763,290
480,868
(53,454)
(1,835,504)
101,551
663,252
(360,865)
-
(360,865)
2,896
(40,364)
-
577
-
-
(36,891)
(2,089)
(151,403)
-
-
-
(153,492)
(551,248)
1,188,268
(112,691)
(247,982)
(99,937)
6,692
269,404
409,045
(304,889)
104,156
4,081
(23,822)
3,477
-
58,841
(1,679)
40,898
(117)
(154,269)
(722)
123,775
261,375
230,042
375,096
654,244
158,928
Cash and cash equivalents at end of year
20
524,329
1,188,268
UNIVISION ENGINEERING LIMITED - 31 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
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 is mainly engaged in the supply, design, installation and maintenance of closed
circuit television and surveillance systems and the sale of security system related products in
Hong Kong.
2.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board
(“IASB”).
The measurement basis used in the preparation of the financial statements is the historical cost
basis.
The preparation of financial statements in conformity with IFRSs requires management to make
judgements, estimates and assumptions that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. The estimates and associated assumptions
are based on historical experience and various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis of making the judgements about
carrying values of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision affects
both current and future periods.
Judgements made by management in the application of IFRSs that have significant effect on the
financial statements and major sources of estimation uncertainty are discussed in note 5 to the
financial statements.
UNIVISION ENGINEERING LIMITED - 32 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
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 Company for the first time for the year
ended 31 March 2018:
Amendments to IAS 7 “Disclosure initiative”
Amendments to IAS 12 “Recognition of deferred tax assets for unrealised losses”
Annual improvements to IFRS 2014-2016 cycle “Amendments to IFRS 12”
The application of the above amendments to IFRSs and IAS in the current year has had no
material impact on the Company’s financial performance and positions for the current and
prior years and/or on the disclosures set out in these financial statements.
(b) New and revised IFRSs that have been issued but are not yet effective
The following new and revised IFRSs, potentially relevant to the Company’s operations,
have been issued and are mandatory for adoption by the Company for accounting periods
beginning on or after 1 January 2018 or later periods. However, the Company has not early
adopted them.
Amendments to IFRS 2 “Classification and measurement of share-based payment
transactions” 1
IFRS 9 “Financial instruments” 1
Amendments to IFRS 9 “Prepayment features with negative compensation” 2
Amendment to IFRS 10 and IAS 28 (2011) “Sale or contribution of assets between
and investor and its associate or joint venture” 4
IFRS 15 “Revenue from contracts with customers” 1
Amendments to IFRS 15 “Clarification to IFRS 15 Revenue from contracts with
customers” 1
IFRS 16 “Leases” 2
IFRIC 22 “Foreign currency transactions and advance consideration” 1
IFRIC 23 “Uncertainty over income tax treatments” 2
Annual improvements 2014-2016 cycle “Amendments to IFRS 1 and IAS 28” 1
Annual improvements to IFRS 2015-2017 cycle 2
The Company has not applied any new or revised IFRSs that are not yet effective for the
year ended 31 March 2018.
1 Effective for annual periods beginning on or after 1 January 2018
2 Effective for annual periods beginning on or after 1 January 2019
3 Effective for annual periods beginning on or after 1 January 2021
4 No mandatory effective date yet determined but available for adoption
UNIVISION ENGINEERING LIMITED - 33 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
3.
APPLICATION OF NEW AND REVISED
REPORTING STANDARDS (“IFRSs”) (CONTINUED)
INTERNATIONAL FINANCIAL
(c) The impact of these new and revised IFRSs
The Company is in the process of making an assessment of the impact of these
amendments and new standards in the period of initial application. So far the Company
has identified some aspects of the new standards which may have a significant impact on
the financial statements. Further details of the expected impacts are discussed below.
IFRS 15 was issued which establishes a single comprehensive model for entities to use in
accounting for revenue arising from contracts with customers. IFRS 15 will supersede the
current revenue recognition guidance including IAS 18“Revenue”, IAS 11 “Construction
contracts” and the related interpretations when it becomes effective. The core principle of
IFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. Specifically, the standard
introduces a 5-step approach to revenue recognition:
• Step 1: Identify the contract(s) with a customer
• Step 2: Identify the performance obligations in the contract
• Step 3: Determine the transaction price
• Step 4: Allocate the transaction price to the performance obligations in the contract
• Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Under IFRS 15, an entity recognises revenue when (or as) a performance obligation is
satisfied, i.e. when ‘control’ of the goods or services underlying the particular
performance obligation is transferred to the customer. Far more prescriptive guidance has
been added in IFRS 15 to deal with specific scenarios. Furthermore, extensive disclosures
are required by IFRS 15.
The directors of the Company anticipate that the application of IFRS 15 in the future may
affect the amounts reported and related disclosures. However, it is not practicable to
provide a reasonable estimate of the effect of IFRS 15 until the Company performs a
detailed review.
UNIVISION ENGINEERING LIMITED - 34 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 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.
4.2 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 Company operates (“the functional currency”),
which is Hong Kong Dollars (“HK$”). The financial statements are presented in Sterling Pound
(“£”), which is the 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.
(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 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”.
UNIVISION ENGINEERING LIMITED - 35 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.3 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
3 - 5 years
2 - 5 years
3 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 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 - 36 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.4
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.
4.5
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 - 37 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.6 Financial instruments
Financial assets and financial liabilities are recognised when an 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.
4.6.1 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.
UNIVISION ENGINEERING LIMITED - 38 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.6 Financial instruments (continued)
4.6.1 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 - 39 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.6 Financial instruments (continued)
4.6.2 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) 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 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 Company derecognises financial liabilities when, and only when, the Company’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 - 40 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.6 Financial instruments (continued)
4.6.3 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.
4.7 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.
4.8 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, demand deposits with banks and
other financial institutions, and short-term, highly liquid investments that are readily
convertible into known amounts of cash and which are subject to an insignificant risk of
changes in value, having been within three months of maturity at acquisition. Bank overdrafts
are shown under current liabilities on the statement of financial position.
4.9 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.
4.10 Share capital
Ordinary shares are classified as equity.
4.11 Dividend distributions
Dividend distributions to the Company’s shareholders are recognised as liabilities in the
financial statements in the period in which the dividends are approved by the shareholders or
directors, where appropriate.
UNIVISION ENGINEERING LIMITED - 41 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.12 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
rebates and discounts.
The Company recognises revenue when the amount of revenue and related cost can be reliably
measured, it is probable that future economic will flow to the entity and when specific criteria
has been met for each of the 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 Company bases 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 - 42 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.13 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”.
4.14 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.
4.15 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 - 43 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.16 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 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 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.
4.17 Provisions and contingent liabilities
Provisions are recognised for other liabilities of uncertain timing or amount when 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 - 44 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.18 Events after the reporting period
Events after the reporting period that provide additional information about 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.
4.20 Related parties
(1) A person, or a close member of that person’s family, is related to the Company if that
person:
(i)
has control or joint control over the Company;
(ii)
has significant influence over the Company; or
(iii)
is a member of the key management personnel of the Company or the Company’s
parent
(2) An entity is related to the Company if any of the following conditions applies:
(i)
The entity and the Company 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 Company or an entity related to the Company.
(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 Company or to the Company’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 - 45 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
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 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
2018, the total carrying amount of the Company’s trade and other receivables was £7,404,128
(2017: £6,517,809).
(ii)
Income taxes
The Company are subject to income tax in Hong Kong. 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 2018, the Company has unused tax losses of £3,591,859 (2017: £4,808,854)
available for offset against future profits. A deferred tax asset of £592,657 (2017: £793,461) 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 - 46 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
6.
FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
Financial assets:
Loans and receivables
- Amounts due from related companies
- Trade and other receivables
- Cash and cash equivalents
Financial liabilities:
- Trade and other payables
- Amount due to a related company
2018
£
2017
£
3,075,815
4,328,313
973,313
3,613,896
2,903,913
1,699,910
3,410,529
108,617
3,165,379
123,775
(b) Financial risk management objectives and policies
The Company’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
The Company has foreign currency transactions and have foreign currency denominated
monetary assets and liabilities, which expose the Company to foreign currency risk. The
Company has foreign currency transactions, which expose the Company to foreign
currency risk.
The carrying amounts of 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, at the end of each reporting period are as
follows:
Assets
Liabilities
2018
2017
2018
2017
RMB
USD
HK$
158,670
78,393
4,940,750
264,486
83,104
4,137,190 `
580,222
-
2,924,347
593,114
3,057
2,636,560
The Company currently does not have any policy on hedges of foreign currency risk.
However, Management monitors the foreign currency risk exposure and will consider
hedging significant foreign currency risk should the need arise.
UNIVISION ENGINEERING LIMITED - 47 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
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 Company’s sensitivity to a 5% increase and decrease in
Sterling against the relevant foreign currencies and all other variables were held constant.
5% (2017: 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% (2017: 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% (2017: 5%) against the relevant foreign currencies.
For a 5% (2017: 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 profit/(loss) for the year
USD
Post-tax (loss)/profit for the year
HK$
Post-tax (loss)/profit for the year
(2) Interest rate risk
2018
£
2017
£
22,187
(17,296)
(4,126)
4,213
(106,126)
78,981
The Company is exposed to fair value interest rate risk in relation to fixed rate bank
deposits at fixed rates. 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 Company currently does not
have an interest rate hedging policy. However, Management monitors interest rate
exposure and will consider hedging significant interest rate exposure should the need
arises.
The Company’s exposures to interest rates on financial liabilities are detailed in the
liquidity risk management section of this note.
UNIVISION ENGINEERING LIMITED - 48 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
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 2017.
For the year ended 31 March 2018, if interest rates had been 25 basis points higher/lower,
with all other variables held constant, the Company’s post-tax profit for the year would
increase/decrease by approximately £1,141 (2017: £0).
(ii) Credit risk
At 31 March 2018, 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 Company’s credit risk is 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 Company had no significant
concentrations of credit risk where individual trade and other receivables balance
exceeding 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 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 Company’s exposure to credit risk
arising from trade and other receivables are set out in note 19.
UNIVISION ENGINEERING LIMITED - 49 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk
The Company is responsible for its own cash management, including the raising of loans
to cover the expected cash demands. In managing liquidity risk, the Company’s policy
are to regularly monitor current and expected liquidity requirements and its compliance
with lending covenants, to ensure that it maintains sufficient reserves of cash and
adequate committed funding lines from the financial institutions to meet its liquidity
requirements in the short and longer term. At 31 March 2018, the Company’s banking
facilities amounted to £4,797,248 (2017: £0) and the unused facilities were £4,295,457
(2017: £0).
The following table details the contractual maturities of the Company’s financial
liabilities at the end of each reporting period, which is based on the undiscounted cash
flows and the earliest date on which the Company can be required to pay. The table
includes both interest and principal cash flows.
2018
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 2018
£
Non-derivative
financial
liabilities:
Trade and other
payables
Amount due to a
related company
Non-derivative
financial
liabilities:
Trade and other
payables
Amount due to a
related company
Nil
3,410,529
-
Nil
-
108,617
3,410,529
108,617
-
-
-
3,410,529
3,410,529
108,617
108,617
3,519,146
3,519,146
2017
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 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 - 50 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(c) Fair value
The fair values of financial assets and financial liabilities are determined in accordance
with generally accepted pricing models based on discounted cash flow analysis. 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 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 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 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 - 51 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(d) Capital risk management (continued)
The strategy during 2018, which was unchanged from 2017, was to maintain the net debt-
to-adjusted capital ratio as low as feasible. In order to maintain or adjust the ratio, the
Company may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt.
The Company is not subjected to externally imposed capital requirements.
The net debt-to-adjusted capital ratios of the Company at the end of the reporting period
were as follows:
Current liabilities
Trade and other payables
Non-current liabilities
Amount due to a related company
Total debt
Less: cash and bank balances
Net debt
Total equity
2018
£
2017
£
3,410,529
3,165,379
108,617
123,775
3,519,146
3,289,154
973,313
1,699,910
2,545,833
1,589,244
5,882,882
6,078,702
Net debt-to-adjusted capital ratio
43%
26%
UNIVISION ENGINEERING LIMITED - 52 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
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 Company has a single reportable operating segment in security and
surveillance business for the year ended 31 March 2018.
(a)
Segment revenues and results
The following is an analysis of the Company’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)
Information about major customers
2018
£
2017
£
4,093,942
1,296,638
202,591
5,593,171
-
5,593,171
3,113,629
1,400,119
281,991
4,795,739
1,818,788
6,614,527
736,850
(2,089)
734,761
451,732
(117)
451,615
Revenues of approximately £2,737,825 (2017: £2,882,250) are derived from two external
customers (2017: two), who contributed to 10% or more of the Company’s revenue in 2018 and
2017.
UNIVISION ENGINEERING LIMITED - 53 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
8. OTHER INCOME
Interest income
Sundry income
9. OTHER GAINS/(LOSSES), NET
Foreign exchange gain/(loss)
Gain on disposal of a subsidiary
Gain on disposal of plant and equipment
Impairment loss reversed/(recognised) on amounts due from
customers for contracts-in-progress
Inventories write-off
Impairment loss reversal on 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
2018
£
2017
£
2,896
8,416
11,312
4,081
10
4,091
2018
£
2017
£
8,754
-
1,444
57,256
(47,832)
-
(1,133)
41,992
-
(51,028)
(22,561)
21,201
19,622
(11,529)
2018
£
1,558,455
1,060,199
30,580
128,367
39,001
3,692
423,678
1,555,911
64,273
1,620,184
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
Auditor’s remuneration
- audit services
Total cost of sales, selling and distribution, administrative
expenses
23,099
24,437
4,887,255
4,336,569
UNIVISION ENGINEERING LIMITED - 54 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
11. DIRECTORS’ REMUNERATION
Directors’ remuneration for the year is as follows:
Salaries,
bonuses and
allowances
£
Pension
scheme
contributions
£
-
61,259
78,790
60,948
200,997
-
1,732
1,732
1,732
5,196
2018
£
-
62,991
80,522
62,680
206,193
13,859
-
13,859
214,856
5,196
220,052
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
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
Interest expense on bills payable
Finance charge on obligation under finance lease
2018
£
2017
£
2,089
-
2,089
-
117
117
UNIVISION ENGINEERING LIMITED - 55 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
13.
INCOME TAX IN THE STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
(a) Income tax in the statement of profit or loss and other comprehensive income:
Hong Kong profits tax
2018
£
2017
£
-
-
Hong Kong profits tax is charged at the rate of 16.5% (2017: 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
2018
£
2017
£
734,761
451,615
121,236
(11,794)
6,665
(5,912)
74,546
(10,427)
25,990
(4,280)
(110,196)
(85,646)
-
-
The calculation of basic earnings per share is based on the profit attributable to the equity
shareholders of the Company for the year of £734,761 from continuing and discontinued
operations (2017: £430,337) and the profit for the year of £734,761 (2017: £451,615) from
continuing operations, and the weighted average of 383,677,323 (2017: 383,677,323) ordinary
shares in issue during the year.
There were no potential dilutive instruments at either financial year end.
UNIVISION ENGINEERING LIMITED - 56 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
15. DIVIDENDS
(i) Dividends payable to equity shareholders of the Company attributable to the year:
2018
£
2017
£
Final dividend proposed after the reporting period of 0.0389
pence per ordinary share (2017: 0.042 pence per ordinary
share)
149,331
162,257
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 0.042 pence per
ordinary share (2017: 0.037 pence per ordinary share)
151,403
154,269
2018
£
2017
£
UNIVISION ENGINEERING LIMITED - 57 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
16. PLANT AND EQUIPMENT
Cost
At 1 April 2016
Additions
Disposal
Foreign translation difference
Furniture
and fixtures
£
Computer
equipment
£
Motor
vehicles
£
29,381
9,760
(154)
4,911
62,823
14,063
-
10,157
89,865
-
(2,960)
13,581
Total
£
182,069
23,823
(3,114)
28,649
At 31 March 2017
43,898
87,043
100,486
231,427
At 1 April 2017
Additions
Disposal
Foreign translation difference
43,898
11,350
-
(6,053)
87,043
5,934
-
(11,013)
100,486
23,946
(23,254)
(35,601)
231,427
41,230
(23,254)
(52,667)
At 31 March 2018
49,195
81,964
65,577
196,736
Accumulated depreciation
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
139,440
22,821
(3,114)
22,201
At 31 March 2017
26,280
65,637
89,431
181,348
At 1 April 2017
Charge for the year
Disposal
Foreign translation difference
At 31 March 2018
Net book value
At 31 March 2018
At 31 March 2017
26,280
6,076
-
(3,580)
65,637
11,318
-
(8,713)
89,431
13,186
(23,254)
(33,607)
181,348
30,580
(23,254)
(45,900)
28,776
68,242
45,756
142,774
20,419
13,722
19,821
53,962
17,618
21,406
11,055
50,079
UNIVISION ENGINEERING LIMITED - 58 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
17.
INVENTORIES
Raw materials
Finished goods
2018
£
2017
£
300,009
670,616
372,872
727,186
970,625
1,100,058
No provision for obsolete inventories are recognised for the year (2017: £nil) on slow-moving
inventories.
Inventory write-off for the year of £47,832 (2017: £22,561) were recorded.
18. CONTRACTS-IN-PROGRESS
Contract costs incurred plus attributable
profits less foreseeable losses
Progress billings to date
Represented by:
Amounts due from customers for
contracts-in-progress
Less: allowance for doubtful debts
Amounts due from customers for
contracts-in-progress, net (note 19)
Amounts due to customers for contracts-
in-progress (note 21)
2018
£
2017
£
27,320,142
(26,422,414)
26,732,248
(27,029,019)
897,728
(296,771)
2,599,665
(272,765)
1,808,935
(324,007)
2,326,900
1,484,928
(1,429,172)
(1,781,699)
897,728
(296,771)
At 31 March 2018, no retention receivables from construction customers are included within
“trade and other receivables” (2017: £0).
Movements in the allowance for doubtful debts are as follow:
At 1 April
Reversal of provision made
Foreign translation difference
At 31 March
2018
£
2017
£
324,007
(57,256)
6,014
235,060
51,028
37,919
272,765
324,007
UNIVISION ENGINEERING LIMITED - 59 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
19. TRADE AND OTHER RECEIVABLES
Trade receivables
Less: allowance for doubtful debts (note 19(a))
Trade receivables, net (note 19(b))
Other receivables
Deposits and prepayments
Amounts due from customers for contracts-in-
progress, net (note 18)
(a)
(b)
Total carrying amount
2018
£
2017
£
609,599
(48,140)
580,180
(54,858)
561,459
1,077,495
362,459
525,322
794,073
99,590
2,326,900
1,484,928
4,328,313
2,903,913
All of the trade and other receivables are expected to be recovered within one year.
(a)
Impairment of trade receivables
Impairment losses in respect of trade receivables are recorded using an allowance account
unless the Company is satisfied that recovery of the amount is remote, in which case the
impairment loss is written off against trade receivables directly. Movements in the allowance
for doubtful debts:
At 1 April
Reversal of provision made
Foreign translation difference
At 31 March
2018
£
2017
£
54,858
-
(6,718)
67,089
(17,292)
5,061
48,140
54,858
At 31 March 2018, none of trade receivables of the Company are individually determined to be
impaired and no impairment loss was provided.
UNIVISION ENGINEERING LIMITED - 60 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
19. TRADE AND OTHER RECEIVABLES (CONTINUED)
(b) Trade receivables that are not impaired
The ageing analysis of trade receivables at the end of each reporting period that were past due
but not impaired:
0 to 90 days
91 to 365 days
Over 365 days
2018
£
246,710
305,520
9,229
2017
£
354,721
115,074
55,527
561,459
525,322
Receivables that were past due but not impaired relate to a number of independent customers
that have a good track record with the Company. 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 - 61 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
20. CASH AND CASH EQUIVALENTS
(a) Cash and cash equivalents
Cash at bank and in hand
Deposits with banks
Less: restricted cash
2018
£
2017
£
524,329
448,984
1,188,268
511,642
(c)
973,313
(448,984)
1,699,910
(511,642)
Cash and cash equivalents in the statement of cash flow
524,329
1,188,268
(b) Cash and bank balances are denominated in the following currencies:
AUD
CAD
GBP
HKD
JYP
RMB
USD
(c) Restricted cash
2018
£
346
823
407
909,653
79
60,001
2,004
2017
£
387
901
96,174
1,504,461
86
60,374
37,527
At 31 March 2018, the balance of £448,984 (2017: £511,642) is restricted as bank deposits with
maturities less than three months. Such restricted bank balances were held for the purpose of
the issuance of performance bonds in respect of maintenance contracts undertaken by the
Company.
The effective interest rate on bank deposits ranged from 0.2% to 3.2% per annum (2017: 0.5%).
UNIVISION ENGINEERING LIMITED - 62 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
21. TRADE AND OTHER PAYABLES
Current portion:
Trade payables
Bills payable
Due to related parties (note 25(a))
Accruals and other payables
Amounts due to customers for
contracts-in-progress (note 18)
Non-current portion:
Due to a related company (note 25(b))
2018
£
2017
£
(a)
(b)
339,703
429,373
36,599
1,175,682
126,495
-
22,247
1,234,938
1,429,172
1,781,699
3,410,529
3,165,379
108,617
123,775
3,519,146
3,289,154
(a) All of the trade and other payables are expected to be repaid within one year, other than
those respectively disclosed.
(b) The bills payable carried interest at annual rates at the Hong Kong Best Lending Rate and
became repayable within 90 days.
22.
INCOME TAX IN THE STATEMENT OF FINANCIAL POSITION
Unrecognised deferred tax assets
At 31 March 2018, the Company had unused tax losses of £3,591,859 (2017: £4,808,854) 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 Company.
UNIVISION ENGINEERING LIMITED - 63 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
23. SHARE CAPITAL
Authorised :
800,000,000 ordinary shares of HK$0.0625 each
Issued and fully paid:
383,677,323 ordinary shares
The Company has one class of ordinary shares.
24. EMPLOYEE RETIREMENT BENEFITS
2018
£
2017
£
3,669,470
3,669,470
3,890,257
3,890,257
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 Company have no other material obligations to make payments in
respect of retirement benefits of the employees.
25. RELATED PARTY TRANSACTIONS
Compensation of key management personnel
The remuneration of the key management of the Company during the year was as follows:-
2018
£
2017
£
Salaries, bonus and allowances
372,563
273,370
The remuneration of key management personnel comprises the remuneration of Executive
Directors and key executives.
Executive Directors include the Executive Chairman, Chief Executive Officer 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 Company 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 - 64 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
25. RELATED PARTY TRANSACTIONS (CONTINUED)
Key executives include the Director of Operations, Software Development Manager and Sales
Manager 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 2018, there is a balance of £36,599 (2017: £22,247) 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 2018, there is a payable balance of £108,617 (2017: £123,775) due to a
shareholder, Univision Holdings Limited, which is unsecured, interest-free and repayable
after 12 months.
(c) At 31 March 2018, there are receivable balances of £3,075,815 (2017: £3,613,896) 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.
Apart from the transactions disclosed above and elsewhere in the financial statements, the
Company had no other material transactions with related parties during the year.
26. COMMITMENTS
(a)
Capital commitments
At 31 March 2018, the Company did not have any material capital commitments outstanding.
(b) Operating lease commitments
At the end of each reporting period, the total future minimum lease payments under non-
cancellable operating leases for the office and warehouse premises are payable as follows:
Within one year
Between two to five years
2018
£
2017
£
153,729
213,253
121,147
81,641
366,982
202,788
UNIVISION ENGINEERING LIMITED - 65 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
27. 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
2018
£
2017
£
-
-
-
-
-
-
-
-
-
1,818,788
(1,467,951)
350,837
278
171
(392,009)
(40,723)
-
(40,723)
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.
28. BANKING FACILITIES
At 31 March 2018, the banking facilities of the Company were as follows:-
(a) The revolving trade financing facilities amounted to £724,113 (equal to HK$8,000,000)
and carried annual interest at the Hong Kong Dollars Best Lending Rate with a
repayment terms of 90 days. The facilities are subject to the fulfilment of certain
covenants relating to its net worth and the loans to its related parties. If the Company is
in breach of the covenants, the facilities would become payable on demand. At 31 March
2018, the facilities were utilised to the extent of £429,373 and;
(b) The revolving term facilities amounted to £4,073,135 (equal to HK$45,000,000) were
secured by floating charges over the bills receivable from its major customer. At 31
March 2018, the facilities were utilised to the extent of £72,418.
The Company regularly monitors its compliance with these covenants. Further details of the
Company’s management of liquidity risk are set out in note 6(b)(iii).
UNIVISION ENGINEERING LIMITED - 66 - ANNUAL REPORT 2018
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2018
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.
In the opinion of directors of the Company, there were no other significant contingent liabilities
from pending litigation or legal claims at 31 March 2018.
30. EVENTS AFTER THE REPORTING PERIOD
Saved as disclosed elsewhere in the financial statements,
(a) on 1 August 2018, the Board of Directors proposed a final dividend. Further details are
disclosed in note 15(i); and
(b) on 27 July 2018, the revolving trade financing facilities of the Company was approved to
increase to £1,176,684 (equal to HK$13,000,000).
31. APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved and authorised for issue by the Board of Directors on
15 August 2018.
UNIVISION ENGINEERING LIMITED - 67 - ANNUAL REPORT 2018
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 2018 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 20 September 2018 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 2018 together with the Directors’ Report and the Independent Auditor’s Report;
2. To declare a final dividend for the financial year ended 31 March 2018
3. To re-elect Mr. Nicholas James LYTH who retired by rotation, as a Non-Executive Director of the
Company;
4. To re-elect Mr. Chun Pan WONG who retired by rotation, as a Director of the Company;
5. To re-elect Mr. Peter Yip Tak CHAN who retired by rotation, as a Director of the Company;
6. To reappoint auditor HKCMCPA Company Limited, Certified Public Accountants, as auditors of the
Company, to hold office from the conclusion of the meeting to the conclusion of the next meeting,
during which accounts will be laid before the Company and to authorize the Directors to adjust their
remuneration packages;
7. That the directors of the Company be and are hereby generally and unconditionally authorized to
exercise all powers of the Company to allot ‘Ordinary Shares’ the capital of the Company. Such
authority (unless and to the extent previously revoked, varied or renewed by the Company during the
general meeting) to expire 15 months after the date of the passing of such resolution or on the
conclusion of the Company’s next AGM to be held, following the date of passing such resolution,
whichever occurs first, save that the Company may before such expiry make any offer or agreement
which would or might require Ordinary Shares to be allotted after such expiry, and that the Directors
may allot Ordinary Shares in pursuance of such an offer or an agreement as if such authority had not
expired. This authority substitutes all subsisting authorities to the extent unused.
8. That the directors of the Company be and are hereby generally and unconditionally authorized to
exercise all powers of the Company to repurchase the ’Ordinary Shares’ in the capital of the Company,
including any form of depositary receipt. Such authority (unless and to the extent previously revoked,
varied or renewed by the Company during the general meeting) to expire 15 months after the date of
the passing of such resolution or on the conclusion of the Company’s next AGM to be held, following
the date of passing such resolution, whichever occurs first, save that the Company may before such
expiry make any offer or agreement which would or might require Ordinary Shares to be repurchased
after such expiry, and that the Directors may buy back Ordinary Shares in pursuance of such an offer or
an agreement as if such authority had not expired.
UNIVISION ENGINEERING LIMITED - 68 - ANNUAL REPORT 2018
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,
15 August 2018 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
14 September 2018 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 - 69 - ANNUAL REPORT 2018