UniVision Engineering Limited
Annual Report
Year ended 31 March 2019
UNIVISION ENGINEERING LIMITED
Annual Report
Year ended 31 March 2019
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 Members 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
64
UNIVISION ENGINEERING LIMITED - 1 - ANNUAL REPORT 2019
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
Ivor Colin SHRAGO, Non-Executive Director
Mike Chiu Wah CHAN, Director of Operation
Senior Management
Ivan Chi Hung CHAN, Sales Manager
Wai Chung LAM, Software Development Manager
Nominated Adviser
SPARK Advisory Partners Limited
5 St. John’s Lane,
London, EC1M 4BH
U.K.
Principal bankers
Hong Kong and Shanghai Banking Corporation
Bank of China (Hong Kong)
Citibank, N.A.
Audit Committee
Nicholas James LYTH, Chairman
Ivor Colin SHRAGO
Stephen Sin Mo KOO
Remuneration Committee
Ivor Colin SHRAGO, Chairman
Nicholas James LYTH
Stephen Sin Mo KOO
AIM Stock Code
UVEL
Company Secretary
Danny Kwok Fai YIP
Registered Office
Unit 201, 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
PKF Hong Kong Limited
Certified Public Accountants
26/F., Citicorp Centre,
18 Whitfield Road,
Causeway Bay, 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 2019
CHAIRMAN’S STATEMENT
On behalf of the Board of Directors (the “Board”), I am delighted to report that profit before tax has
increased by 135% to £1.73m for the financial year ended 31 March 2019, compared to £0.74m for
the last financial year. Earnings per share has also jumped by 137% to 0.45p for this reporting period
(2018: 0.19p).
The increase in profit was due primarily to the expected significant increase in revenue of 153% to
£14.2m (2018: £5.6m), underpinned by the key, full year contribution from the Replacement of
CCTV Systems Project (“the MTRC Contract”) awarded by MTR Corporation (“MTRC”) of Hong
Kong in 2017.
As a result of this positive profit contribution presented above, the Company’s total equity attributable
to shareholders stood at £7.92m as at 31 March 2019 (As at 31 March 2018: £5.88m).
Given the strength of these results, and in keeping with our recent dividend strategy, the Board has
declared a final dividend of 0.55 HK cents per share, representing an increase of 28% for the financial
year ended 31 March 2019 (2018: 0.43 HK cents).
The current protests against anti-extradition bill in Hong Kong may appear to be a cause for concern
and affect current work in progress at certain locations in the past couple of months. However, the
long term effects of these protests may result in more opportunity for the Company as MTRC,
Electrical and Mechanical Services Department (“EMSD”), and the Hong Kong Police Force are
expected to make additional orders, or look to invest additional funds to provide enhanced security
and surveillance, such as installation of additional cameras and also facial recognition technology, to
help protect its premises, infrastructure and citizens respectively.
Therefore, I am optimistic about future prospects of the Company.
In the remainder of this report, I shall go into further details of our order book relating to the MTRC
Contract, financial review, business review, and end with prospect statement.
THE MAJOR CONTRACT WITH MTRC
As announced in May 2017, UniVision was awarded a contract valued at HK$389.4m (£38.1m) from
MTRC. The contract provides for the replacement works of the Closed-Circuit Television (CCTV)
systems for numerous MTRC railway lines. The Company is responsible for replacing the existing
analogue CCTV system installed in the stations along the specified lines by a new Internet Protocol-
based, digital CCTV system. With subsequent add-ons amounting to HK$17.9m, the total value of the
MTRC Contract now equals to HK$407.3m. The MTRC Contract is expected to be completed by
November 2023.
Up to the financial year ended 31 March 2019, UniVision has invoiced a total of approximately
HK$90m leaving a further order book of HK$317.3m to be billed over the next four and half years.
Note that, the MTRC Contract allows for monthly billing on work completed and certified. The
MTRC Contract also allows for variation of orders and the Board expects that UniVision may receive
additional orders in the next financial period and future.
To make the MTRC Contract profitable to our shareholders, the Company is continuously working
with its suppliers and sub-contractors to ensure that we get favourable supply and credit terms. The
Board also closely monitors UniVision’s working capital to be certain that we have adequate financial
resources to drive the project to completion.
UNIVISION ENGINEERING LIMITED - 3 - ANNUAL REPORT 2019
FINANCIAL REVIEW
Highlights of Profit and Loss Statement are:
CHAIRMAN’S STATEMENT
(Continued)
As expected, revenue surged by 154% to £14.2m in the reporting period (2018: £5.6m). This
revenue growth mainly came from contributions of construction contracts that increased by
206% as compared with last year. The majority of this significant increase came from the
MTRC Replacement of CCTV Systems.
In the reporting period, other construction contracts include Liangtang Traffic Control and
Surveillance System Project, Hong Kong-Zhuhai-Macao Bridge Project, and Central Wanchai
Bypass Project also contributed to the increment.
Other construction contracts, including the installation, relocation, modification and
replacement works that provided to MTRC also contributed to significant income, for
example, the contract for MTRC Replacement of Network & Time Synchronization System.
Contribution from maintenance contracts were up by 10%, compared to the year before. The
increase in maintenance contracts was mainly due to the wider scope in the services provided
in the three-year maintenance contract with MTRC, started on 1 January 2018, which
mitigated the effect of the lower revenue for maintenance work on the MTRC’s CCTV
replacement project.
The gross profit increased by 76% to £3.2m in the reporting period (2018: £1.8m), however,
our gross margin was 22.5% which was lower than that of last reporting period (2018:
32.5%). The main reason for the decrease in gross profit margin was due to more work on
lower margin construction contracts, and increases in costs relating to subcontracting charges
and additional engineers working directly on construction contracts. The Company is working
hard to minimise these cost increases and is working closely with its suppliers to retain its
competitive edge.
Our operating expenses were mainly due to administration expenses. For the year,
administrative expenses increased by 31.4% to £1.3m (2018: £0.98m), attributable to increase
in staff costs. The number of staff has increased from 56 to 67 during the reporting period.
As a result of higher gross profit and better control of operating expenses, our profit before
tax increased substantially by 135% to £1.73m in the reporting period (2018: £0.73m).
The Company has unused tax loss to offset the taxable profit for the year, and hence I am
delighted to report that the profit attributable to the shareholders of the Company also
increased by 135% to £1.73m for the financial year ended 31 March 2019, compared to
£0.74m for the last financial year.
As a result of the surge in profit attributable to shareholders, basic earnings per share jumped
by 137% to 0.45p for this reporting financial year (2018: 0.19p).
UNIVISION ENGINEERING LIMITED - 4 - ANNUAL REPORT 2019
CHAIRMAN’S STATEMENT
(Continued)
On the Balance Sheet, the highlights are:
Trade and other receivables decreased to £2.27m as at 31 March 2019, from £4.33m as at 31
March 2018, due to better debt collection from customers
Cash and cash equivalents stood at £1.75m as at 31 March 2019 (2018: £0.97m),
representing an increase of £0.78m
Total equity attributable to shareholders stood at £7.92m as at 31 March 2019 (As at 31
March 2018: £5.88m), or an increase of £2.04m
On the Cash Flow, the highlights are:
The Company generated positive cash flow from operations of £0.81m in the reporting period
(2018: negative £0.36m)
The Board attributes this to closer monitoring and effective control of working capital and
more efficient use of our banking facilities.
There were no significant capital investments during the reporting year
During the year under review, a relative strengthening in the HK$ at the year-end has led to a 7%
appreciation in the GBP reporting amount in the Statement of Financial Position. It led to the
significant non-cash other comprehensive gain of £0.46m (2018: loss £0.78m) on exchange
differences arising on translation of foreign operations.
All figures in the above require to be adjusted for comparison purposes. All comparative percentages
stated in the Chairman’s Statement are adjusted to show the underlying change (net of translation
effect on foreign exchange).
On the strength of these results, the Board has proposed the payment of a final dividend of 0.55 HK
cents (gross) per share for the financial year ended 31 March 2019 (2018: 0.43 HK cents), an increase
of 28%. Dividend timetable is as follows:
Ex date:
Record date:
Payment date:
12 September 2019
13 September 2019
10 October 2019
Payment of the dividend is subject to the approval by the shareholders at the upcoming Annual
General Meeting.
UNIVISION ENGINEERING LIMITED - 5 - ANNUAL REPORT 2019
CHAIRMAN’S STATEMENT
(Continued)
BUSINESS REVIEW
I wish to turn your attention to some of the key takeaways on our addressable market segments,
business environment in which we operate, our customer base, and the management go-to-market
strategy for the next reporting period.
Addressable Market Segments
According to the Market Research Report by Mordor Intelligence: Video Surveillance System
Market-Growth, Trends, and Forecast (2019 - 2024), the global video surveillance system market was
valued at USD 40.37 billion in 2018, and is expected to reach a value of USD 95.98 billion by 2024,
recording a CAGR of 15.53% over the forecast period (2019 - 2024). So, our addressable market
segment should undergo a healthy growth period.
The growth of the video surveillance market is expected to be fuelled by the introduction of new IP-
based digital technologies, which the Company sees happening around the region, and is currently
gaining traction in the Hong Kong market. We see digital cameras and computer vision software
applications being channelled to help detect and prevent undesirable behaviour, such as shoplifting,
thefts, fraudulent transactions, vandalism, and terror arracks.
Globally, the drive to enhance safety and security across different industries is adding significantly to
this potential growth. The commercial sector is expected to show the largest market share during the
forecast period. Growing focus on infrastructure protection, public safety and increasing demand for
high resolution imaging are other key factors driving the market.
The Board regards the increasing demand for networking and wireless infrastructure (such as IP, 4G
and 5G) as the key growth driver for the market. The MTRC contract, which entails replacement of
analogue cameras with IP-based ones, is an excellent example of this trend.
Since the Company has won the MTRC Contract, a logical next step would be adding video analytics,
such as facial recognition. This technology is being enhanced rapidly and UniVision is in a very
favourable position to participate effectively in this market. To illustrate this point, our new contract
for supply and installation of the video analytic monitoring system at Tai Tam Correctional Institution
that was awarded in June 2019, is a good example.
Business Environment
The recent protests against anti-extradition bill have seriously affected the business environment in
Hong Kong. Violent clashes between radical protestors and police have broken out in recent weeks as
I write this report. Doubtlessly, it will have adverse effects on the Hong Kong economy, particularly
in the retail and tourism sectors. Politics aside, the ongoing protests do offer a business opportunity
for the Company. Violence at MTR stations, police stations, and the airport, as well as against
infrastructure, highlights the importance of public safety and security. The demand for upgrades the
video surveillance system, such as facial recognition capabilities, is rising. Additional work orders for
replacement of damaged CCTV equipment caused by vandalism are also likely to come through in
due course.
UNIVISION ENGINEERING LIMITED - 6 - ANNUAL REPORT 2019
CHAIRMAN’S STATEMENT
(Continued)
Customer base
MTRC was the Company’s largest customer this financial year, representing 84% of the Company’s
total revenue. In addition, EMSD and other commercial clients are also parts of our customer base.
The MTRC Contract has led to a significant equipment purchase and construction workload, which
required UniVision to have adequate working capital, according to the financial assessment conducted
by the Hong Kong Government - Works Branch. The technical shortfall in working capital in the
2017 financial test was rectified post the year end. Since UniVision is still in compliance with the
technical and management criteria for the retention under the category of Approved Specialist
Contractors for Public Works: Video Electronics Installation. UniVision’s suspension from tendering
for new public works contracts was lifted in May 2019. However, working capital remains our
Company’s top priority as the business grows.
UniVision is currently operating close to full capacity. Nevertheless, UniVision will continue to
tender for certain government contracts to diversify our customer base and grow the business where
we can make use of sub-contractors where we deem this appropriate.
Our Strategy
Given the above market, business opportunities, and customer base analysis, I see three key future
objectives:
Financial: To deliver the MTRC Contract and other potential large-scale projects profitably,
the Company is now seeking suitable subcontracting partner(s) with financial strength. This is
to minimise the risks associated with working capital for such sizeable contracts. The Board
considers this outreach both desirable and prudent for the Company’s further growth in the
market.
Technology: The Company sees the need to acquire skills and training in networking and
wireless technology area and software skills for video analytics and facial recognition
applications, to help providing customisation and localisation for our clients. We will also
embrace vendors in these technology areas to help us win further contracts.
People: In facing the high demand for large-scale CCTV replacement projects, the Company
will look to strengthen our sales & marketing activities, as well as bringing key project
managers with technical skills to help us delivering new contracts.
UNIVISION ENGINEERING LIMITED - 7 - ANNUAL REPORT 2019
CHAIRMAN’S STATEMENT
(Continued)
PROSPECTS
2019 marks the 40th anniversary of UniVision’s incorporation in Hong Kong. It is a milestone that
signifies the Company’s longevity in the security and surveillance business. The Group’s core
competency relies on our UniVision’s brand name; and its dedicated, experienced, and productive
people.
The Board expects that high demand in security and surveillance market will provide the ground and
stimulus for the Company to grow. Given our sizable order book, especially the MTRC Contract, the
Company will derive revenue growth in the next few reporting periods, but need to manage our
delivery carefully, by controlling costs to generate profits attributable to shareholders. Barring
unforeseen circumstances, the Board expects another year of growth ahead and the year has started
well and broadly in line with management’s expectations.
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 our staff for their contribution.
MR. STEPHEN SIN MO KOO
EXECUTIVE CHAIRMAN
4 September 2019
UNIVISION ENGINEERING LIMITED - 8 - ANNUAL REPORT 2019
DIRECTORS AND SENIOR
MANAGEMENT’S BIOGRAPHIES
DIRECTORS’ BIOGRAPHIES
Nicholas James LYTH – Non-executive Director (aged 53)
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. He is responsible for day to day liaison with UK
investors for UniVision. Mr. Lyth is the Chairman of the Audit Committee and a member of the
Remuneration Committee.
Stephen Sin Mo KOO – Executive Chairman (aged 62)
Mr. Koo joined UniVision in 1998 and was appointed as a Director on 3 March 2003. He is
responsible for overall strategic planning of the Company. 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 Company’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 59)
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 55)
Mr. Yip was appointed as Finance Director on 18 September 2007. He was the Financial
Controller for the Company 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 Company.
Peter Yip Tak CHAN – Director of Sales and Marketing (aged 55)
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.
UNIVISION ENGINEERING LIMITED - 9 - ANNUAL REPORT 2019
DIRECTORS’ AND SENIOR
MANAGEMENT’S BIOGRAPHIES
(Continued)
Ivor Colin SHRAGO – Non-executive Director (aged 76)
Mr. Shrago was admitted as solicitor to the Supreme Court of England and Wales in 1966 and
to the Supreme Court of Hong Kong in 1997. He has more than 40 years’ experience practising law.
In 1996, he was the General Counsel to Peregrine Direct Investments Limited, the investment arm of
the Peregrine Banking Group in Hong Kong, which was primarily involved in fund management. He
then joined the asset management arm of Vigers Asset Management Limited as managing director,
while at the same time acting as general counsel for the group. In 2002, Ivor joined Druces LLP
(formerly Druces & Attlee) and was Partner until 2007. Since that time he has been a consultant with
a number of city law firms and has been a non-executive director of a number of AIM quoted and
other public companies. Mr. Shargo was appointed as a non-executive director on 27 September 2018
and is the Chairman of the Remuneration Committee and a member of the Audit Committee.
Mike Chiu Wah CHAN – Director of Operations (aged 44)
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 and was appointed as a director on 21 September
2018. 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.
SENIOR MANAGEMENT’S BRIEF BIOGRAPHIES
Wai Chung LAM – Software Development Manager (aged 50)
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 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 44)
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 some 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 2019
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 2019.
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 Company’s performance by business segments is set out in
note 7 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 2019 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 2019 are set out
in the Company’s statement of changes in equity on page 30.
The Company’s cash flow for the year ended 31 March 2019 is set out in the Company’s
statement of cash flows on page 31.
UNIVISION ENGINEERING LIMITED - 11 - ANNUAL REPORT 2019
DIRECTORS’ REPORT
(Continued)
Key Performance Indicators (KPI)
Current Ratio:
Current Assets / Current Liabilities
Average Collection Period :
Trade receivables (net of allowance
for doubtful debts) / Revenue per day
Inventory Turnover :
Cost of revenue / Inventories
Gross profit Margin :
Gross profit / Revenue
Return on Invested Capital :
Operating profit/Net assets
Quick Ratio :
(Current Assets –Inventories)/ Current
Liabilities
2019
2018
2.4
1.8
20 days
37 days
17.2
23%
22%
3.9
32%
12%
2.2
1.6
:
:
:
:
:
:
Share Capital and Reserves
Details of the movements in share capital are set out in note 24 on page 60.
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 0.55 HK cents (gross) per share
for the financial year ended 31 March 2019.
Plant and Equipment
Details of the movements in plant and equipment are set out in note 16 on page 55.
UNIVISION ENGINEERING LIMITED - 12 - ANNUAL REPORT 2019
DIRECTORS’ REPORT
(Continued)
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
Mike Chiu Wah CHAN - appointed on 21 September 2018
Ivor Colin SHRAGO - appointed on 27 September 2018
Mr. Stephen Sin Mo KOO, Mr. Nicholas James LYTH, Mr. Ivor Colin SHRAGO and Mr.
Danny Kwok Fai YIP retire by rotation at the forthcoming annual general meeting in
accordance with the Company’s Articles of Association and, being eligible, the current
directors offer themselves for re-election.
Directors’ Interests in Contracts
No director had a material interest in any contract of significance to the business of the
Company to which the Company or its holding company 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 2019
Stephen Sin Mo KOO
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
Mike Chiu Wah CHAN
Ivor Colin SHRAGO
279,703,700*
1,200,000
-
-
-
-
5,315,000
UNIVISION ENGINEERING LIMITED - 13 - ANNUAL REPORT 2019
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 27 August 2019, 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)
JIM Nominees Limited
JARVIS
Hargreaves Lansdown
(Nominees) Limited 15942
Hargreaves Lansdown
(Nominees) Limited VRA
Number
ordinary shares
of
183,736,000
% of total issued share
capital
47.9
78,744,000
20.5
18,517,064
15,818,270
13,761,280
4.8
4.1
3.5
UNIVISION ENGINEERING LIMITED - 14 - ANNUAL REPORT 2019
DIRECTORS’ REPORT
(Continued)
(1) UniVision Holdings Limited is an investment holding company incorporated under the laws of the
British Virgin Islands and was formerly owned by Up Sky Investments Limited. Up Sky Investments
Limited transferred the entire stake to Mr. Stephen KOO on 17 November 2015.
(2) Up Sky Investments Limited is an investment holding company incorporated under the laws of the
British Virgin Islands and is wholly-owned by Mr. Stephen Sin Mo KOO.
Payments to Creditors
The Group does not follow any code or standard on payment practice but instead the Company’s
policy is to pay all creditors in accordance with agreed terms of business.
Political and Charitable Donations
During the year the Company made Nil charitable contributions (2018: Nil). 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 regularly
with the employees on both corporate and individual matters and discloses information to them that
will increase their awareness of the financial and economic factors affecting the 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
201, 2/F Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong, on 30 September
2019 at 5:00 p.m. The Notice of Meeting appears on page 64.
Annual Report
The annual report for the year ended 31 March 2019 will be uploaded on the Company’s website
www.uvel.com on 4 September 2019 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 2019
DIRECTORS’ REPORT
(Continued)
Auditor
PKF Hong Kong Limited, Certified Public Accountants, was appointed as our auditor for the year. A
resolution to re-appoint PKF Hong Kong Limited, Certified Public Accountants as auditor of the
Company will be put to the forthcoming Annual General Meeting.
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
Hong Kong
4 September 2019
UNIVISION ENGINEERING LIMITED - 16 - ANNUAL REPORT 2019
REMUNERATION REPORT
The Remuneration Committee presents this report to shareholders on behalf of the Board.
Membership of Remuneration Committee
The Remuneration Committee comprises Mr. Ivor Colin SHRAGO (our Non-executive Director), Mr.
Nicholas James LYTH (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our Executive
Chairman) and is chaired by Mr. Ivor Colin SHRAGO.
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
Company 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
£
2019
Total
£
2018
Total
£
Executive Directors
Stephen Sin Mo KOO
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
Mike Chiu Wah CHAN
Non-executive Directors
Nicholas James LYTH
Ivor Colin SHRAGO
-
84,968
59,478
59,763
30,060
13,941
7,126
-
1,743
1,743
1,743
1,017
-
16,084
8,322
11,313
10,664
-
102,795
69,543
72,819
41,741
-
80,522
62,680
62,971
-
-
-
1,743
-
15,684
7,126
13,859
-
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 2019
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. Changes to AIM rules on 30 March 2018 required
AIM companies to apply a recognised corporate governance code from 28 September 2018.
The Company has chosen to adhere to the Quoted Company Alliance’s (“QCA”) Corporate
Governance Code to meet the mew requirements of AIM Rule 26. It is the commitment of the
Board to manage the Company’s and Group’s affairs in accordance with this Code, in so far as
is practical and appropriate for a public company of this size and complexity. The Board has
disclosed the Corporate Governance Statement on its website how the Company complies with
the 10 principles of the QCA Code. 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 QCA Code requires that the boards of AIM companies have an appropriate balance
between executive and non-executive directors. During the period under review, the Company
has strengthened the board and has satisfied this requirement by appointing Mr. Ivor Colin
SHRAGO as independent non-executive director.
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.
UNIVISION ENGINEERING LIMITED - 18 - ANNUAL REPORT 2019
REPORT ON CORPORATE GOVERNANCE
(Continued)
Audit Committee
Our Audit Committee comprises Mr. Nicholas James LYTH (our Non-executive Director), Mr.
Ivor Colin SHRAGO (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 year.
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. Ivor Colin SHRAGO (our Non-executive Director),
Mr. Nicholas James LYTH (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our
Executive Chairman) and is chaired by Mr. Ivor Colin SHRAGO. 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.
UNIVISION ENGINEERING LIMITED - 19 - ANNUAL REPORT 2019
REPORT ON CORPORATE GOVERNANCE
(Continued)
Internal Control
The Board of Directors is responsible for ensuring that the Company maintains an internal
financial control system with appropriate monitoring procedures for all Group companies. The
purpose of this system is to safeguard Company assets, maintain proper accounting records, and
ensure that reliable financial information is used within the Group and for publication purposes.
However, the system is designed to manage rather than completely eliminate risk and can only
provide reasonable but not absolute assurance against material misstatement.
In order to achieve the above responsibilities, the Board meets regularly and monitors the
Company’s internal financial control by reviewing the 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 Group. This decision will be kept under review.
Going Concern
After making appropriate enquiries, the Directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence for the foreseeable
future. For this reason, they continue to adopt the going concern basis in preparing the
Company’s and Group’s financial statements.
Investor Relations
The Company realises that effective communication can increase transparency and accountability
to its shareholders; as such, the Company discloses its information to its shareholders through
RNS (i.e. the news distribution service operated by the London Stock Exchange plc). The same
information can also be found on the Company’s website (www.uvel.com). The Company will
make every effort to ensure that all price-sensitive information is released publicly and
immediately. If an immediate announcement is not possible, the Company will try to publicize
the information at the earliest time possible to ensure that the shareholders and the public have
fair access to it.
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 2019
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulations.
The Directors are responsible for preparing financial statements for each financial year. The
Directors have elected to prepare the Group’s financial statements in accordance with
International Financial Reporting Standards (IFRSs). The Directors must not approve the
financial statements unless they give a true and fair view of the state of affairs of the Group and
the Company and of the profit or loss for that year.
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable IFRSs accounting standards have been followed, subject to any
material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the Group’s transaction and disclose with reasonable accuracy at any time the
financial position of the Company. 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 2019
大信梁學濂（香港）會計師事務所有限公司
26/F, Citicorp Centre
18 Whitfield Road
Causeway Bay
Hong Kong
香港
銅鑼灣
威非路道18號
萬國寶通中心26樓
Independent auditor’s report
To the members 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 63, which comprise the statement of financial position as at 31 March 2019, and the
statement of profit or loss and other comprehensive income, the statement of changes in equity and
the statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies.
In our opinion, the financial statements give a true and fair view of the financial position of the
Company as at 31 March 2019, and of its financial performance and its cash flows for the year then
ended in accordance with International Financial Reporting Standards (“IFRSs”).
Basis for 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 Financial Statements” section of our report. We are independent of the Company in
accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (the “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 2019
Independent auditor’s report
To the members 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 year. 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.
Revenue recognition on service contracts from supply, design and installation of closed circuit
television and surveillance systems
Key audit matter
How our audit addressed the key audit matter
We identified the revenue recognition on service
contracts from the supply, design and installation
of closed circuit television and surveillance
systems as a key audit matter due to the
significant judgments exercised by the
management in determining the total contract
costs and contract costs incurred for work
performed to date.
As set out in note 4 to the financial statements,
the Company recognises service revenue by
reference to the progress towards complete
satisfaction of the relevant performance
obligation using input method, measured based
on the proportion of contract costs incurred for
work performed to date relative to the estimated
total contract costs. This revenue recognition
involves a significant degree of management
estimates and judgement, with estimates being
made to assess the total contract costs and stage
of completion of the contract.
As disclosed in note 7 to the financial
statements, the Company recorded revenue from
the provision of construction works of
£12,635,262 for the year ended 31 March 2019.
Our procedures in relation to the Company’s
revenue recognition on service contracts
included:
Understood the management’s process
relating to the estimation of total contract
costs and recording of costs;
Obtained an understanding from the
Company’s project team about the
contract terms, performance and status of
selected contracts to evaluate the
reasonableness of the basis of estimation
of the total contract costs, and contract
costs incurred for work performed to date;
Performed comparisons between the
percentage of completion and the
percentage of progress billing on selected
contracts to identify and investigate any
significant differences by obtaining an
understanding from project team and
checking correspondence with customers
of the Company; and
Checked the progress billings, on a
sample basis, to invoices issued and
checked contract costs incurred, on a
sample basis, to invoices received and
human resources record respectively.
UNIVISION ENGINEERING LIMITED - 23 - ANNUAL REPORT 2019
Independent auditor’s report
To the members of
UniVision Engineering Limited
(Incorporated in Hong Kong with limited liability)
Key Audit Matters (Continued)
Estimated provision of expected credit losses (“ECL”) for receivables measured at amortised cost
and contract assets
Key audit matter
How our audit addressed the key audit matter
We identified the estimated provision of ECL for
receivables measured at amortised cost and
contract assets as a key audit matter due to the
significance of these assets to the Company’s
financial statements and the involvement of
subjective judgement and management estimates
in evaluating the ECL.
As at 31 March 2019, the Company’s trade
receivables, other receivables, contract assets
and amounts due from related companies are
£796,786, £1,267,203, £3,576,824 and
£3,322,882 respectively.
Our procedures in relation to estimated
provision of ECL for receivables measured at
amortised cost and contract assets included:
Understood and assessed the effectiveness
of related key internal control design in
relation to the credit approval and
impairment loss allowances;
Assessed the recoverability of a sample of
outstanding balances by reviewing the
historical patterns of receipts, customers’
ability to repay and ageing analyses,
arranging circularisation and assessing
cash received subsequent to year end;
Assessed management’s provision policy
for ECL on receivables and contract
assets by selecting samples and:
- noting the historical repayment
patterns;
- assessing cash received subsequent to
year end;
- evaluating the plans for recovering the
outstanding balances, such as
realisation of the pledged assets and
enforcement of guarantees;
- questioning management’s knowledge
of future conditions that may impact
the expected customer receipts;
reviewing and verifying the ageing
analyses and the related provisions;
and
-
- performing overall analytics on the
reasonableness of the impairment
provisions.
UNIVISION ENGINEERING LIMITED - 24 - ANNUAL REPORT 2019
Independent auditor’s report
To the members of
UniVision Engineering Limited
(Incorporated in Hong Kong with limited liability)
Other Information
The directors are responsible for the other information which comprises the information included in
the Company’s annual report for the year ended 31 March 2019 other than 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 are responsible for the preparation of 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
to 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 2019
Independent auditor’s report
To the members 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. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement 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 skepticism 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 director’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty 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.
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.
UNIVISION ENGINEERING LIMITED - 26 - ANNUAL REPORT 2019
Independent auditor’s report
To the members of
UniVision Engineering Limited
(Incorporated in Hong Kong with limited liability)
Auditor’s Responsibilities for the Audit of the Financial Statements (cont’d)
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 members, 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 members 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 members as a body, for our audit work, for this report or for the opinion we have formed.
PKF Hong Kong Limited
Certified Public Accountants
Hong Kong
LAM Kar Bo
Practising Certificate number P05453
Hong Kong, China
4 September 2019
UNIVISION ENGINEERING LIMITED - 27 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 31 March 2019
Revenue
Cost of revenue
Gross profit
Other income
Other (losses)/gains, net
Selling and distribution expenses
Administrative expenses
Finance costs
Profit before income tax
Income tax
Profit for the year
Other comprehensive income/(loss), net of tax
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translation of financial statements
Notes
2019
£
2018
£
7(a)
10
14,221,497
(11,018,631)
5,593,171
(3,775,759)
8
9
10
10
12
13
3,202,866
4,141
(70,660)
(55,320)
(1,296,672)
(55,409)
1,728,946
-
1,817,412
11,312
19,622
(124,643)
(986,853)
(2,089)
734,761
-
1,728,946
734,761
466,240
(779,178)
Total comprehensive income/(loss) for the year
2,195,186
(44,417)
Earnings per share – Basic and Diluted
14
0.45p
0.19p
UNIVISION ENGINEERING LIMITED - 28 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
STATEMENT OF FINANCIAL POSITION
As at 31 March 2019
ASSETS
Non-current assets
Plant and equipment
Amounts due from related companies
Prepayments
Total non-current assets
Current assets
Inventories
Trade and other receivables
Contract assets
Cash and bank balances
Total current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Contract liabilities
Total current liabilities
Non-current liabilities
Amount due to a related company
Total liabilities
Capital and reserves
Share capital
Reserves
Total equity
Total liabilities and equity
Notes
2019
£
2018
£
16
26
17
19
20
21
143,146
3,322,882
96,086
53,962
3,075,815
-
3,562,114
3,129,777
642,375
2,274,267
3,576,824
1,750,056
970,625
4,328,313
-
973,313
8,243,522
6,272,251
11,805,636
9,402,028
22
23
2,521,122
956,616
3,410,529
-
3,477,738
3,410,529
22
409,556
108,617
3,887,294
3,519,146
24
3,890,257
4,028,085
3,890,257
1,992,625
7,918,342
5,882,882
11,805,636
9,402,028
The financial statements on pages 28 to 63 were authorised for issue by the board of directors on 4 September 2019
and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Pan WONG, Director
UNIVISION ENGINEERING LIMITED - 29 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2019
Share
capital
£
Retained
earnings
£
Special
capital
reserve “A”
£
(Note 1)
Special
capital
reserve “B”
£
(Note 2)
Translation
reserve
£
Total
£
Balance at 1 April 2017
3,890,257
58,522
155,876
143,439
1,830,608
6,078,702
Profit for the year
Other comprehensive loss, net of tax
Exchange difference arising on translation of
financial statements
Total comprehensive income
Dividend paid in respect of year 2017 (Note 15)
Total transactions with owners, recognised
directly in equity
-
-
-
-
-
734,761
-
734,761
(151,403)
(151,403)
-
-
-
-
-
-
-
-
-
-
-
734,761
(779,178)
(779,178)
(779,178)
(44,417)
-
-
(151,403)
(151,403)
Balance at 31 March 2018
3,890,257
641,880
155,876
143,439
1,051,430
5,882,882
Profit for the year
Other comprehensive income, net of tax
Exchange difference arising on translation of
financial statements
Total comprehensive income
Dividend paid in respect of year 2018 (Note 15)
Total transactions with owners, recognised
directly in equity
-
-
-
-
-
1,728,946
-
1,728,946
(159,726)
(159,726)
-
-
-
-
-
-
-
-
-
-
-
1,728,946
466,240
466,240
466,240
2,195,186
-
-
(159,726)
(159,726)
Balance at 31 March 2019
3,890,257
2,211,100
155,876
143,439
1,517,670
7,918,342
The currency translation from Hong Kong dollar to the presentation currency of Sterling Pound of these financial
statements has no impact on the available distributable reserves of the Company as at 31 March 2019.
Notes:
1.
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.
2.
Special capital reserve “B”
By a special resolution passed on 30 July 2004 and pursuant to the 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 2019
UNIVISION ENGINEERING LIMITED
STATEMENT OF CASH FLOWS
For the year ended 31 March 2019
Notes
2019
£
2018
£
Cash flows from operating activities
Profit before income tax
Adjustments for:
Interest expense
Interest income
Depreciation of plant and equipment
Provision for warranty
Inventories written-off
Impairment loss reversed on amounts due from customers for
contracts-in-progress
Loss/(gain) on disposal of plant and equipment
12
8
16
Operating cash flows before working capital changes
Changes in operating assets and liabilities:
Prepayments
Inventories
Trade and other receivables
Contract assets
Amounts due from related companies
Trade and other payables
Contract liabilities
1,728,946
734,761
55,409
(3,947)
47,318
(9,681)
50,457
-
128
2,089
(2,896)
30,580
9,624
47,832
(57,256)
(1,444)
1,868,630
763,290
(95,397)
349,960
44,735
(1,062,323)
(9,154)
293,977
(578,893)
-
(53,454)
(1,835,504)
-
101,551
663,252
-
Net cash generated from/(used in) operating activities
811,535
(360,865)
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Proceeds from disposal of plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Dividend paid to shareholders of the Company
Advances from a related company
8
12
15
27
3,947
(131,857)
10
2,896
(40,364)
577
(127,900)
(36,891)
(55,409)
(159,726)
290,444
(2,089)
(151,403)
-
Net cash generated from/(used in) financing activities
75,309
(153,492)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes, net
758,944
524,329
28,938
(551,248)
1,188,268
(112,691)
Cash and cash equivalents at end of year
21
1,312,211
524,329
UNIVISION ENGINEERING LIMITED - 31 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
1.
GENERAL INFORMATION
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 Company’s registered office is Unit 201, 2/F., Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon,
Hong Kong.
These 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
These financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRSs”) issued by the International Accounting Standards Board. The measurement basis used in the
preparation of these 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 key
sources of estimation uncertainty are discussed in note 5 to the financial statements.
3.
APPLICATION OF NEW AND REVISED IFRSs
(a)
Initial application of IFRSs
In the current year, the Company initially applied the following IFRSs:
IFRS 9
IFRS 15
IFRIC 22
Amendments to IAS 40
Amendments to IFRS 2
Financial Instruments
Revenue from Contracts with Customers
Foreign Currency Transactions and Advance Consideration
Transfers of Investment Property
Classification and Measurement of Share-based Payment
Transactions
Amendments to IFRS 4
Applying IFRS 9 Financial Instruments with IFRS 4
Annual Improvements
(2014-2016)
Insurance Contracts
Amendments to IFRS 1 and IAS 28
The new and amendments to IFRSs have been applied in accordance with the relevant transition
provisions in the respective standards. Except as described below, there are no other changes in the
Company’s accounting policies, amounts reported and/or disclosures from the initial adoption of the
above IFRSs.
UNIVISION ENGINEERING LIMITED - 32 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
3.
APPLICATION OF NEW AND REVISED IFRSs (CONTINUED)
(a)
Initial application of IFRSs (cont’d)
IFRS 9 “Financial Instruments”
IFRS 9 replaces IAS 39 “Financial instruments: recognition and measurement”. It sets out the
requirements for recognising and measuring financial assets, financial liabilities and some contracts to
buy or sell non-financial items. The Company has not been impacted by IFRS 9 in relation to
classification/recognition of financial assets and financial liabilities.
The adoption of IFRS 9 has changed the Company’s impairment model by replacing the IAS 39
“incurred loss model” to the “expected credit losses (“ECLs”) model”. IFRS 9 requires the Company to
recognise ECLs for trade and other receivables earlier than IAS 39. Cash and cash equivalents are subject
to ECL model but the impairment is immaterial for the current year. The new IFRS 9 impairment model
does not result in additional impairment allowance for the Company as at 1 April 2018.
IFRS 15 “Revenue from Contracts with Customers”
IFRS 15 establishes a five-step model comprehensive framework for recognising revenue from contracts
with customer: (i) identify the contract; (ii) identify performance obligations; (iii) determine the
transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognise
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. IFRS 15 replaces IAS 18
“Revenue”, IAS 11 “Construction Contracts” and the related interpretations.
The Company has applied IFRS 15 retrospectively with the cumulative effect of initially applying this
standard recognised at the date of initial application (1 April 2018). Any difference at the date of initial
application is recognised in the opening retained profits (or other components of equity, as appropriate)
and comparative information has not been restated. Furthermore, in accordance with the transition
provisions in IFRS 15, the Company has elected to apply the standard retrospectively only to contracts
that are not completed at 1 April 2018. Accordingly, certain comparative information may not be
comparable as comparative information was prepared under IAS 18, IAS 11 and the related
interpretations.
The Group recognises revenue from the following major sources which arise from contracts with
customers:
-
-
-
Service revenue from supply, design and installation of closed circuit television and surveillance
systems;
Service revenue from maintenance contracts; and
Trading income from sale of security system related products.
The following adjustments were made to the amounts recognised in the Company’s statement of financial
position as at 1 April 2018. Line items that were not affected by the changes have not been included.
UNIVISION ENGINEERING LIMITED - 33 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
3.
APPLICATION OF NEW AND REVISED IFRSs (CONTINUED)
(a)
Initial application of IFRSs (cont’d)
Carrying
amounts
previously
reported at
31.3.2018
£
Carrying
amounts under
IFRS 15 at
1.4.2018
£
Reclassification
£
Current assets
Contract assets
Amounts due from customers for contracts-in-
progress
Current liabilities
Contract liabilities
Amounts due to customers for contracts-in-
progress
-
2,326,900
2,326,900
2,326,900
(2,326,900)
-
-
1,429,172
1,429,172
1,429,172
(1,429,172)
-
In relation to supply, design and installation of closed circuit television and surveillance systems
contracts previously accounted for under IAS 11, the Company continues to apply input method in
estimating the performance obligations satisfied up to date of initial application of IFRS 15. Amounts due
from/to customers for contracts-in-progress are reclassified to contract assets and contract liabilities,
respectively.
For the purposes of reporting cash flows from operating activities under indirect method for the year
ended 31 March 2019, movements in working capital have been computed based on opening statement of
financial position as at 1 April 2018 as disclosed above.
(b)
IFRSs in issue but not yet effective
The following IFRSs in issue at 31 March 2019 have not been applied in the preparation of these
financial statements since they were not yet effective for the annual period beginning on 1 April 2018 :-
IFRS 16
IFRS 17
IFRIC 23
Amendments to IAS 1 and IAS 8
Amendments to IAS 19
Amendments to IAS 28
Amendments to IFRS 3
Amendments to IFRS 9
Amendments to IFRS 10 and
IAS 28
Annual Improvements
(2015-2017)
Leases1
Insurance Contracts3
Uncertainty over Income Tax Treatments1
Definition of Material2
Plan Amendment, Curtailment or Settlement1
Long-term Interests in Associates and Joint Ventures1
Definition of a Business2
Prepayment Features with Negative Compensation1
Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture4
Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 231
1
2
3
4
Effective for the Company’s annual financial statements beginning on 1 April 2019
Effective for the Company’s annual financial statements beginning on 1 April 2020
Effective for the Company’s annual financial statements beginning on 1 April 2021
No mandatory effective date yet determined but available for adoption
UNIVISION ENGINEERING LIMITED - 34 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
3.
APPLICATION OF NEW AND REVISED IFRSs (CONTINUED)
(b)
IFRSs in issue but not yet effective (cont’d)
The Company is in the process of making an assessment of what the impact of these amendments, new
standards and interpretations is expected to be in the period of initial application. So far the Company has
identified some aspects of IFRS 16 which may have a significant impact on its financial statements.
IFRS 16 introduces a comprehensive model for the identification of lease arrangements and accounting
treatments for both lessors and lessees. IFRS 16 will supersede IAS 17 “Leases” and the related
interpretations when it becomes effective.
IFRS 16 distinguishes lease and service contracts on the basis of whether an identified asset is controlled
by a customer. In addition, IFRS 16 requires sales and leaseback transactions to be determined based on
the requirements of IFRS 15 as to whether the transfer of the relevant asset should be accounted for as a
sale. IFRS 16 also includes requirements relating to subleases and lease modifications.
As at 31 March 2019, the Company has non-cancellable operating lease commitments of £353,672 as
disclosed in note 28 to the financial statements. A preliminary assessment indicates that these
arrangements will meet the definition of a lease. Upon application of IFRS 16, the Company will be
required to recognise a right-of-use asset and a corresponding liability in respect of all these leases unless
they qualify for low value or short-term leases.
The Company plans to elect to use the modified retrospective approach for the adoption of IFRS 16 and
will recognise the cumulative effect of initial application as an adjustment to the opening balance of
equity at 1 April 2019 and will not restate the comparative information. Other than the recognition of
lease liabilities and right-of-use assets, the Company expects that the transition adjustments to be made
upon the initial adoption of IFRS 16 will not be material.
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
revenue and incurs expenses, including revenue 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.
4.2
Foreign currency
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 Dollar
(“HK$”). These financial statements are presented in Sterling Pound (“£”), which is the Company’s presentation
currency. As the Company is listed on the AIM, the directors consider that this presentation is more useful for its
current and potential investors.
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 re-measured. 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 profit or loss, except when
deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.
UNIVISION ENGINEERING LIMITED - 35 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.3
Plant and equipment
Plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated
depreciation and accumulated impairment loss. The cost of an asset comprises its purchase price and any
directly attributable costs of bringing the asset to working condition for its intended use.
On disposal of an item of plant and equipment, the difference between the net disposal proceeds and its carrying
amount is taken to profit or loss.
Depreciation is calculated using the straight-line method to allocate their depreciable amounts over the estimated
useful lives as follows:
Furniture and fixtures
Computer equipment
Motor vehicles
3 - 5 years
2 - 5 years
3 years
Fully depreciated plant and equipment are retained in the financial statements until the items are no longer in
use.
The residual values, useful lives 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.
4.4
Impairment of non-financial 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).
UNIVISION ENGINEERING LIMITED - 36 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.4
Impairment of non-financial assets (cont’d)
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.
4.6
Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value except for trade receivables arising
from contracts with customers which are initially measured in accordance with IFRS 15 since 1 April 2018.
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
After application of IFRS 9 on 1 April 2018
Classification and subsequent measurement of financial assets
Financial assets that meet the following conditions are subsequently measured at amortised cost:
-
-
the financial asset is held within a business model whose objective is to collect contractual cash flows; and
the contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
All other financial assets are subsequently measured at fair value through profit or loss.
Impairment of financial assets
The Company recognises a loss allowance for ECL on financial assets and other assets which are subject to
impairment under IFRS 9. The amount of ECL is updated at each reporting date to reflect changes in credit risk
since initial recognition.
Lifetime ECL represents the ECL that will result from all possible default events over the expected life of the
relevant instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result
from default events that are possible within 12 months after the reporting date. Assessments are done based on
the Company’s historical credit loss experience, adjusted for factors that are specific to the debtors, general
economic conditions and an assessment of both the current conditions at the reporting date as well as the
forecast of future conditions.
UNIVISION ENGINEERING LIMITED - 37 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.6
Financial instruments (cont’d)
4.6.1 Financial assets (cont’d)
After application of IFRS 9 on 1 April 2018 (cont’d)
Impairment of financial assets (cont’d)
The Company always recognises lifetime ECL for trade receivables and contract assets. The ECL on these assets
is assessed individually for debtors with significant balances and/or collectively using a provision matrix with
appropriate groupings. For all other instruments, the Company measures the loss allowance equals to 12-month
ECL, unless when there has been a significant increase in credit risk since initial recognition, the Company
recognises lifetime ECL. The assessment of whether lifetime ECL should be recognised is based on significant
increases in the likelihood or risk of a default occurring since initial recognition.
In assessing whether the credit risk of a financial instrument has increased significantly since initial recognition,
the Company compares the risk of default occurring on the financial instrument assessed at the reporting date
with that assessed at the date of initial recognition. In making this reassessment, the Company considers that a
default event occurs when (i) the borrower is unlikely to pay its credit obligations to the Company in full,
without recourse by the Company to actions such as realising security (if any is held); or (ii) the financial asset is
90 days past due. The Company considers both quantitative and qualitative information that is reasonable and
supportable, including historical experience and forward-looking information that is available without undue
cost or effort.
In particular, the following information is taken into account when assessing whether credit risk has increased
significantly since initial recognition:
-
-
-
-
failure to make payments of principal or interest on their contractually due dates;
an actual or expected significant deterioration in a financial instrument’s external or internal credit rating
(if available);
an actual or expected significant deterioration in the operating results of the debtor; and
existing or forecast changes in the technological, market, economic or legal environment that have a
significant adverse effect on the debtor’s ability to meet it obligation to the Company.
Depending on the nature of the financial instruments, the assessment of a significant increase in credit risk is
performed on either an individual basis or a collective basis. When the assessment is performed on a collective
basis, the financial instruments are grouped based on shared credit risk characteristics, such as past due status
and credit risk ratings.
ECLs are re-measured at each reporting date to reflect changes in the financial instrument’s credit risk since
initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss.
The Company recognises an impairment gain or loss for all financial instruments with a corresponding
adjustment to their carrying amount through a loss allowance account, except for investments in debts securities
that are measured at fair value through other comprehensive income (recycling), for which the loss allowances
are recognised in other comprehensive income and accumulated in the fair value reserve (recycling).
Interest income is calculated based on the gross carrying amount of the financial asset unless the financial asset
is credit-impaired, in which case interest income is calculated based on the amortised cost (i.e. the gross carrying
amount less loss allowance) of the financial asset.
UNIVISION ENGINEERING LIMITED - 38 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.6
Financial instruments (cont’d)
4.6.1 Financial assets (cont’d)
After application of IFRS 9 on 1 April 2018 (cont’d)
Impairment of financial assets (cont’d)
At each reporting date, the Company assesses whether a financial asset is credit-impaired. A financial asset is
credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of
the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following
observable events:
-
-
-
-
-
significant financial difficulties of the debtor;
a breach of contract, such as a default or delinquency in interest or principal payments;
it becoming probable that the borrower will enter into bankruptcy or other financial reorganisation;
significant changes in the technological, market, economic or legal environment that have an adverse
effect on the debtor; or
the disappearance of an active market for a security because of financial difficulties of the issuer.
The gross carrying amount of a financial asset or contract asset is written off (either partially or in full) to the
extent that there is no realistic prospect of recovery. This is generally the case when the Company determines
that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the
amounts subject to the write-off.
Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in
profit or loss in the period in which the recovery occurs.
Before application of IFRS 9 on 1 April 2018
Classification and subsequent measurement of financial assets
The Company’s financial assets are classified as loans and receivables, which 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 are measured at amortised cost using the effective interest method, less any impairment.
Interest income is recognised by applying the effective interest rate, except for short-term receivables where the
recognition of interest would be immaterial.
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.
UNIVISION ENGINEERING LIMITED - 39 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.6
Financial instruments (cont’d)
4.6.1 Financial assets (cont’d)
Before application of IFRS 9 on 1 April 2018 (cont’d)
Impairment of loans and receivables (cont’d)
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.
4.6.2 Financial liabilities and equity instruments
Debt and equity instruments issued by the Company 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 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.
UNIVISION ENGINEERING LIMITED - 40 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.6
Financial instruments (cont’d)
4.6.3 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 obligations are discharged,
cancelled or expire. The difference between the carrying amount of the financial liability derecognised and the
consideration paid and payable is recognised in profit or loss.
4.6.4 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 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.
4.8 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.
4.9 Revenue recognition
Revenue from contracts with customers (upon application of IFRS 15)
Under IFRS 15, the Company 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.
A performance obligation represents a good or service (or a bundle of goods or services) that is distinct or a
series of distinct goods or services that are substantially the same.
Control is transferred over time and revenue is recognised over time by reference to the progress towards
complete satisfaction of the relevant performance obligation if one of the following criteria is met:
-
-
-
the customer simultaneously receives and consumes the benefits provided by the Company’s performance
as the Company performs;
the Company’s performance creates or enhances an asset that the customer controls as the Company
performs; or
the Company’s performance does not create an asset with an alternative use to the Company and the
Company has an enforceable right to payment for performance completed to date.
UNIVISION ENGINEERING LIMITED - 41 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.9 Revenue recognition (cont’d)
Revenue from contracts with customers (upon application of IFRS 15) (cont’d)
Otherwise, revenue is recognised at a point in time when the customer obtains control of the distinct good or
service.
A contract asset represents the Company’s right to consideration in exchange for goods or services that the
Company has transferred to a customer that is not yet unconditional. It is assessed for impairment in accordance
with IFRS 9. In contrast, a receivable represents the Company’s unconditional right to consideration, i.e. only
the passage of time is required before payment of that consideration is due.
A contract liability represents the Company’s obligation to transfer goods or services to a customer for which
the Company has received consideration (or an amount of consideration is due) from the customer.
A contract asset and a contract liability relating to the same contract are accounted for and presented on a net
basis.
Contracts with multiple performance obligations (including allocation of transaction price)
For contracts that contain more than one performance obligations (provision of design and installation services
and sales of goods), the Company allocates the transaction price to each performance obligation on a relative
stand-alone selling price basis.
The stand-alone selling price of the distinct good or service underlying each performance obligation is
determined at contract inception. It represents the price at which the Company would sell a promised good or
service separately to a customer. If a stand-alone selling price is not directly observable, the Company estimates
it using appropriate techniques such that the transaction price ultimately allocated to any performance obligation
reflects the amount of consideration to which the Company expects to be entitled in exchange for transferring
the promised goods or services to the customer.
Over time revenue recognition: measurement of progress towards complete satisfaction of a performance
obligation
The progress towards complete satisfaction of a performance obligation is measured based on input method,
which is to recognise revenue on the basis of the Company’s efforts or inputs to the satisfaction of a
performance obligation relative to the total expected inputs to the satisfaction of that performance obligation,
that best depicts the Company’s performance in transferring control of goods or services.
Service revenue from supply, design and installation of closed circuit television and surveillance systems is
recognised over time by reference to the progress towards complete satisfaction of the relevant performance
obligation using input method as the Company’s performance does not create an asset with an alternative use to
the Company and the Company has an enforceable right to payment for performance completed to date.
Service revenue from maintenance contracts is recognised over time as the customer simultaneously receives
and consumes the benefits provided by the Company. Revenue is recognised on a straight-line basis because the
Company’s inputs are expended evenly throughout the performance period.
Trading income is recognised at a point in time when the customer obtains control of the distinct good.
UNIVISION ENGINEERING LIMITED - 42 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.9 Revenue recognition (cont’d)
Revenue recognition (prior to 1 April 2018)
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.
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 Company 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.
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.
Maintenance contracts
Revenue from maintenance contracts is recognised on a straight-line basis over the term of the maintenance
contract.
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.
Interest income
Interest income is recognised as it accrues using the effective interest method.
UNIVISION ENGINEERING LIMITED - 43 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.10 Construction contracts (prior to 1 April 2018)
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”.
4.11 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.
4.12 Employee benefits
Employee benefits comprise short-term employee benefits and contributions to defined contribution retirement
plans.
Short-term employee benefits, including salaries, annual bonuses, paid annual leave and 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 - 44 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.13
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 operates and generates 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 a 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.
4.14 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.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow is
remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of
one or more future events are also disclosed as contingent liabilities unless the probability of outflow is remote.
4.15 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.
UNIVISION ENGINEERING LIMITED - 45 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.16 Related parties
A person or a close member of that person’s family is related to the Company if that person:
(i)
(ii)
(iii)
has control or joint control over the Company;
has significant influence over the Company; or
is a member of the key management personnel of the Company or the Company’s parent.
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 the above paragraph.
(vii) A person identified in (i) of the above paragraph 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.
5.
KEY SOURCES OF ESTIMATION UNCERTAINTY
The following are 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.
Revenue recognition on service contracts
The Company recognises revenue on service contracts from supply, design and installation of closed circuit
television and surveillance systems by reference to the progress towards complete satisfaction of the relevant
performance obligation using the input method, measured based on the proportion of contract costs incurred for
work performed to date relative to the estimated total contract costs. The management regularly discusses with
the project team in order to review and revise the estimates of the total contract costs and stage of completion of
the work performed to date with reference to the performance and status of corresponding service contract work.
Accordingly, revenue recognition on service contracts involves a significant degree of management estimates
and judgment, with estimates being made to assess the total contract costs and contract costs incurred for work
performed to date.
The management reviews and revises the estimates of total contract costs and contract costs incurred for work
performed to date as the contract progresses, the actual outcome of the contract in terms of its total costs may be
higher or lower than the estimates and this will affect the revenue and profit recognised.
UNIVISION ENGINEERING LIMITED - 46 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
5.
KEY SOURCES OF ESTIMATION UNCERTAINTY (CONTINUED)
Estimated provision of ECL for receivables measured at amortised cost and contract assets
The management of the Company estimates the amount of impairment loss for ECL on receivables measured at
amortised cost and contract assets based on the credit risk of these assets. The amount of the impairment loss
based on ECL model is measured as the difference between all contractual cash flows that are due to the
Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted
at the effective interest rate determined at initial recognition. Where the future cash flows are less than expected,
or being revised downward due to changes in facts and circumstances, a material impairment loss may arise.
The provision of ECL is sensitive to changes in estimates.
Income taxes
The Company is subject to profits 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 2019, the Company has unused tax losses of approximately £2,189,000 (2018: £3,592,000)
available for offset against future profits and no deferred tax asset has been recognised thereon. 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 a
recognition takes place.
6.
FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
Financial assets
Amounts due from related companies
Trade and other receivables
Cash and bank balances
Financial liabilities
Trade and other payables
Amount due to a related company
2019
£
3,322,882
2,274,267
1,750,056
2018
£
3,075,815
2,001,413
973,313
2,521,122
409,556
1,981,357
108,617
(b)
Financial risk management objectives and policies
Details of the Company’s major financial instruments are disclosed in the respective notes. The risks
associated with these financial instruments include currency risk, interest rate risk, credit risk and
liquidity risk. The policies on how these risks are mitigated are set out below. The Company’s
management manages and monitors these exposures to ensure appropriate measures are implemented in a
timely and effective manner.
UNIVISION ENGINEERING LIMITED - 47 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b)
Financial risk management objectives and policies (cont’d)
(i) Market risk
Currency risk
The Company has foreign currency transactions and foreign currency denominated financial assets and
liabilities, which expose the Company to foreign currency risk.
The carrying amounts of the Company’s foreign currency denominated financial assets and liabilities at
the end of each reporting period are as follows:
Assets
2019
£
2018
£
Liabilities
2019
£
2018
£
Renminbi
United States dollar
161,387
134,671
158,670
78,393
567,360
-
580,222
-
The Company currently does not have any policy on hedges of foreign currency risk. However, the
management monitors the foreign currency risk exposure and will consider hedging significant foreign
currency risk should the need arise.
The following table details the Company’s sensitivity to a 5% increase and decrease in Sterling Pound
against the relevant foreign currencies with all other variables held constant. 5% (2018: 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 financial instruments and
adjusts their translation at the end of the reporting period for a 5% (2018: 5%) change in foreign currency
rates.
Renminbi
Post-tax profit for the year
United States dollar
Post-tax profit for the year
Interest rate risk
2019
£
2018
£
21.367
22,187
(7,088)
(4,126)
The Company is exposed to fair value interest rate risk in relation to its bank deposits. 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 29 to the financial
statements.
The Company currently does not have an interest rate hedging policy. However, the management
monitors interest rate exposure and will consider hedging significant interest rate exposure should the
need arises.
UNIVISION ENGINEERING LIMITED - 48 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b)
Financial risk management objectives and policies (continued)
(i) Market risk (cont’d)
Interest rate risk (cont’d)
The Company’s exposure to interest rates on financial liabilities is detailed in the liquidity risk
management section of this note.
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
the 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 2018.
For the year ended 31 March 2019, 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 £2,736 (2018: £1,141).
(ii) Credit risk
At 31 March 2019, 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 statement of financial position.
In order to minimise credit risk, the management has a credit policy in place and the exposure to these
credit risks is monitored on an ongoing basis. Credit evaluations of the counterparties’ financial position
and conditions are performed on each and every major debtor periodically.
The Company measures ECLs for trade and other receivables and contract assets at an amount calculated
using a provision matrix, details of which are set out in notes 19 and 20 to the financial statements. At the
end of the reporting period, the Company had concentrations of credit risk where trade and other
receivables balance of the Company’s largest external customer exceeds 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.
The Company’s exposure credit risk is considered limited.
(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 is 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 2019, the Company’s
banking facilities amounted to £5,655,778 (2018: £4,797,248) and the unused facilities were £4,553,605
(2018: £4,295,457).
The following table details the contractual maturities of the Company’s non-derivative 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.
UNIVISION ENGINEERING LIMITED - 49 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b)
Financial risk management objectives and policies (continued)
(iii) Liquidity risk (cont’d)
2019
Weighted
average
effective
interest rate
%
Within More than More than
1 year 1 year but 2 years but
or on
demand
£
less than
2 years
£
5 years
£
Carrying
amount
at 31
cash flow March 2019
£
£
Total
less than undiscounted
Trade and other payables
Amount due to a related
company
Nil
2,521,122
-
-
2,521,122
2,521,122
Nil
-
409,556
-
409,556
409,556
2,521,122
409,556
-
2,930,678
2,930,678
2018
Weighted
average
effective
interest rate
%
Within More than More than
1 year
1 year but 2 years but
or on
demand
£
less than
2 years
£
5 years
£
Carrying
amount
at 31
cash flow March 2018
£
£
Total
less than undiscounted
Trade and other payables
Amount due to a related
company
Nil
1,981,357
-
Nil
-
108,617
-
-
1,981,357
1,981,357
108,617
108,617
1,981,357
108,617
-
2,089,974
2,089,974
(c)
Fair value
The directors of the Company consider that the carrying amounts of financial assets and financial
liabilities recorded at amortised cost in these financial statements approximate 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 reviews and manages 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 monitors its capital structure on the basis of a net debt-to-adjusted capital ratio. For this
purpose, net debt is defined as total debt less bank deposits and cash and cash equivalents. Adjusted
capital comprises all components of equity less proposed dividends but not yet accrued.
The strategy during 2019, which is unchanged from 2018, is 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.
UNIVISION ENGINEERING LIMITED - 50 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(d) Capital risk management (cont’d)
The net debt-to-adjusted capital ratio of the Company at the end of the reporting period is as follows:
Total liabilities
Cash and bank balances
Net debt
Total equity
2019
£
2018
£
3,887,294
(1,750,056)
3,519,146
(973,313)
2,137,238
2,545,833
7,918,342
5,882,882
Net debt-to-adjusted capital ratio
27%
43%
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 2019.
(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
2019
£
12,635,262
1,426,493
159,742
2018
£
4,093,942
1,296,638
202,591
Revenue from contracts with customers and external customers
14,221,497
5,593,171
Segment profit
Finance costs
Profit before income tax
(b)
Information about major customers
1,784,355
(55,409)
736,850
(2,089)
1,728,946
734,761
Revenue of approximately £11,995,000 (2018: £2,738,000) is derived from one external customer (2018:
two customers), who contributed to 10% or more of the Company’s revenue in 2019 and 2018.
UNIVISION ENGINEERING LIMITED - 51 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
8.
OTHER INCOME
Interest income
Sundry income
9.
OTHER (LOSSES)/GAINS, NET
Foreign exchange (loss)/gain
(Loss)/gain on disposal of plant and equipment
Impairment loss reversed on amounts due from customers for
contracts-in-progress
Inventories write-off
Others
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
Auditor’s remuneration
- Audit services
2019
£
3,947
194
4,141
2019
£
(10,203)
(128)
-
(50,457)
(9,872)
(70,660)
2018
£
2,896
8,416
11,312
2018
£
8,754
1,444
57,256
(47,832)
-
19,622
2019
£
2018
£
8,673,468
1,013,057
47,318
187,090
31,148
2,995
322,189
1,988,631
78,128
2,066,759
1,558,455
1,060,199
30,580
128,367
39,001
3,692
423,678
1,555,911
64,273
1,620,184
26,599
23,099
Total cost of sales, selling and distribution, administrative expenses
12,370,623
4,887,255
UNIVISION ENGINEERING LIMITED - 52 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
11. DIRECTORS’ REMUNERATION
Directors’ remuneration for the year is as follows:
Executive directors
Stephen Sin Mo KOO
Peter Yip Tak CHAN
Chun Pan WONG
Danny Kwok Fai YIP
Mike Chiu Wah CHAN
Non-executive directors
Nicholas James LYTH
Ivor Colin SHARGO
Salaries,
bonuses and
allowances
£
Pension
scheme
contributions
£
-
71,076
101,052
67,800
40,724
280,653
15,684
7,126
22,810
-
1,743
1,743
1,743
1,017
6,246
-
-
-
2019
£
-
72,819
102,795
69,543
41,741
286,898
15,684
7,126
22,810
303,463
6,246
309,709
Messrs. Mike Chiu Wah CHAN and Ivor Colin SHARGO were appointed as the Company’s directors on 21
September 2018 and 27 September 2018 respectively.
Salaries,
bonuses and
allowances
£
Pension scheme
contributions
£
2018
£
-
62,991
80,522
62,680
206,193
13,859
-
1,732
1,732
1,732
5,196
-
5,196
220,052
2019
£
55,409
2018
£
2,089
Executive directors
Stephen Sin Mo KOO
Peter Yip Tak CHAN
Chun Pan WONG
Danny Kwok Fai YIP
Non-executive directors
Nicholas James LYTH
-
61,259
78,790
60,948
200,997
13,859
214,856
12.
FINANCE COSTS
Interest expense on bills payable and factoring
UNIVISION ENGINEERING LIMITED - 53 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
13.
INCOME TAX
(a)
Income tax in the statement of profit or loss and other comprehensive income
No provision for Hong Kong profits tax has been accrued for in these financial statements as the
Company has unused tax losses brought forward to offset against its taxable profit for the year.
Reconciliation between income tax and profit before income tax is as follows:
Profit before income tax
Notional tax on profit before income tax, calculated at Hong
Kong profits tax rate of 16.5%
Tax effect of non-taxable income
Tax effect of non-deductible expenses
Tax effect of temporary differences not recognised
Utilisation of unrecognised tax losses
Income tax
(b) Deferred tax
2019
£
2018
£
1,728,946
734,761
285,276
(8)
9,974
(18,240)
(277,002)
121,236
(11,793)
6,665
(5,912)
(110,196)
-
-
At 31 March 2019, the Company’s significant temporary difference included unused tax losses of
£2,178,697 (2018: £3,591,859) available for offset against future taxable profits. No deferred tax asset
has been recognised due to the uncertainty of future profit streams.
Balance at beginning of year
Set-off against assessable profit for the year
Foreign exchange difference
2019
£
3,591,859
(1,678,799)
265,637
2018
£
4,808,854
(667,852)
(549,143)
Balance at end of year
2,178,697
3,591,859
No provision for deferred tax liabilities has been made in the financial statements as the tax effect of
temporary differences arising from depreciation allowances is immaterial to the Company.
14. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the profit attributable to the equity shareholders of the
Company for the year of £1,728,946 from operations (2018: £734,761), and the weighted average of
383,677,323 (2018: 383,677,323) ordinary shares in issue during the year.
There were no potential dilutive instruments at either financial year end.
UNIVISION ENGINEERING LIMITED - 54 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
15. DIVIDENDS
(i)
Dividends payable to equity shareholders of the Company attributable to the year:
Final dividend proposed after the reporting period of HK$0.55,
equivalent to 0.0536 pence per ordinary share (2018: HK$0.43,
equivalent to 0.0389 pence, per ordinary share)
2019
£
2018
£
205,775
149,331
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 HK$0.43, equivalent to 0.0395 pence,
per ordinary share (2018: HK$0.41, equivalent to 0.042 pence per
ordinary share)
2019
£
2018
£
159,726
151,403
16.
PLANT AND EQUIPMENT
Cost
At 1 April 2017
Additions
Disposal
Foreign translation difference
At 31 March 2018
Additions
Disposal
Foreign translation difference
Furniture
and fixtures
£
Computer
equipment
£
43,898
11,350
-
(6,053)
49,195
117,324
(174)
4,650
87,043
5,934
-
(11,013)
81,964
14,533
(549)
6,439
Motor
vehicles
£
100,486
23,946
(23,254)
(35,601)
65,577
-
-
30,123
Total
£
231,427
41,230
(23,254)
(52,667)
196,736
131,857
(723)
41,212
At 31 March 2019
170,995
102,387
95,700
369,082
Accumulated depreciation
At 1 April 2017
Charge for the year
Disposal
Foreign translation difference
At 31 March 2018
Charge for the year
Disposal
Foreign translation difference
At 31 March 2019
Net book value
At 31 March 2019
At 31 March 2018
26,280
6,076
-
(3,580)
28,776
27,113
(174)
2,419
65,637
11,318
-
(8,713)
68,242
11,048
(411)
5,354
89,431
13,186
(23,254)
(33,607)
45,756
9,157
-
28,656
181,348
30,580
(23,254)
(45,900)
142,774
47,318
(585)
36,429
58,134
84,233
83,569
225,936
112,861
18,154
12,131
143,146
20,419
13,722
19,821
53,962
UNIVISION ENGINEERING LIMITED - 55 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
17.
INVENTORIES
Raw materials
Finished goods
2019
£
290,697
351,678
2018
£
300,009
670,616
642,375
970,625
No provision for obsolete inventories is recognised for the year (2018: £nil) on slow-moving inventories.
Inventories write-off for the year of £50,457 (2018: £47,832) was 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 22)
2019
£
2018
£
-
-
-
-
-
-
-
-
27,320,142
(26,422,414)
897,728
2,599,665
(272,765)
2,326,900
(1,429,172)
897,728
At 31 March 2018, no retention receivables from construction customers were included within “trade and other
receivables”.
Movements in the allowance for doubtful debts are as follow:
At beginning of year
Reversal of provision made
Foreign translation difference
At end of year
2019
£
-
-
-
-
2018
£
324,007
(57,256)
6,014
272,765
UNIVISION ENGINEERING LIMITED - 56 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
19. TRADE AND OTHER RECEIVABLES
Trade receivables
Less: allowance for doubtful debts
Trade receivables, net
Other receivables
Deposits and prepayments
Amounts due from customers for contracts-in-progress, net (Note 18)
2019
£
858,592
(61,806)
796,786
1,267,203
210,278
-
2018
£
609,599
(48,140)
561,459
1,077,495
362,459
2,326,900
Total carrying amount
2,274,267
4,328,313
All of the trade and other receivables are expected to be recovered within one year.
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 beginning of year
Provision for the year
Foreign translation difference
At end of year
2019
£
48,140
9,872
3,794
61,806
The ageing analysis of trade receivables, net at the end of the reporting period is as follows:
0 to 90 days
91 to 365 days
Over 365 days
2019
£
717,632
77,980
1,174
2018
£
54,858
-
(6,718)
48,140
2018
£
246,710
305,520
9,229
796,786
561,459
The Company measures loss allowances for trade receivables at an amount equals to lifetime ECLs, which is
calculated using a provision matrix. As the Company’s historical credit loss experience does not indicate
significantly different loss patterns for different customer segments, the loss allowance based on past due status
is not further distinguished between the Company’s different customer bases.
The following table provides information about the Company’s exposure to credit risk and ECLs for trade
receivables as at 31 March 2019:
0 to 90 days
91 to 365 days
Over 365 days
Expected
loss rate
%
Gross carrying
amount
£
Loss allowance
£
-
-
98
717,632
77,980
62,980
-
-
61,806
858,592
61,806
UNIVISION ENGINEERING LIMITED - 57 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
19.
TRADE AND OTHER RECEIVABLES (CONTINUED)
Trade receivables (cont’d)
Expected loss rates are based on actual loss experience over the past 3 years. These rates are adjusted to reflect
differences between economic conditions during the periods over which the historic data has been collected,
current conditions and the Company’s view of economic conditions over the expected lives of the receivables.
Other receivables
The amount of £271,869 in other receivable is interest-free, repayable on demand and due from Mr. Stephen Sin
Mo KOO, a Director of the Company.
20. CONTRACT ASSETS
At 31.3.2019
£
At 1.4.2018
£
Supply, design and installation of closed circuit television and
surveillance systems services
3,576,824
2,326,900
The balance as at 1 April 2018 is the adjusted balance after the application of IFRS 15.
The contract assets primarily relate to the Company’s right to consideration for work completed and not billed
because the rights are conditioned on the Company’s future performance in achieving specified milestones at the
reporting date on the comprehensive architectural services. The contract assets are transferred to trade
receivables when the rights become unconditional. The Company typically transfer contract assets to trade
receivables upon achieving the specified milestones in the contracts.
There was no retention monies held by customers for contract works performed at the end of each reporting
period. The Company classifies these contract assets as current because the Company expects to realise them in
its normal operating cycle.
The Company makes specific provision for contract assets whose credit risk are considered significantly
increased or identified as credit-impaired. For remaining balance of contract assets, the Company makes general
provision based on ageing analysis and project status.
As at 31 March 2019, the gross amount of contract assets was £3,671,998 and the provision of impairment
brought forward from 1 April 2018 was £95,174.
The following table provides information about the Company’s exposure to credit risk and ECLs for contract
assets as at 31 March 2019:
Within 3 years
Over 3 years
Expected
loss rate
%
Gross carrying
amount
£
Loss allowance
£
-
100
3,576,824
95,174
3,671,998
-
95,174
95,174
UNIVISION ENGINEERING LIMITED - 58 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
21. CASH AND BANK BALANCES
(a)
Cash and cash equivalents
Cash at bank and in hand
Deposits with banks
Less: restricted cash
2019
£
1,312,211
437,845
1,750,056
(437,845)
2018
£
524,329
448,984
973,313
(448,984)
Cash and cash equivalents in the statement of cash flow
1,312,211
524,329
(b)
Cash and bank balances are denominated in the following currencies:
Hong Kong dollar
Renminbi
United States dollar
Others
(c)
Restricted cash
2019
£
1,650,769
62,100
35,792
1,395
2018
£
909,653
60,001
2,004
1,655
At 31 March 2019, bank balance of £437,845 (2018: £448,984) 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 1.33% per annum (2018: 0.2% to 3.2%).
22. TRADE AND OTHER PAYABLES
Current liabilities
Trade payables
Bills payable
Due to related parties (Note 26)
Accruals and other payables
Amounts due to customers for contracts-in-progress (Note 18)
Non-current liabilities
Due to a related company (Note 26)
2019
£
103,756
1,102,173
45,746
1,269,447
-
2018
£
339,703
429,373
36,599
1,175,682
1,429,172
2,521,122
3,410,529
409,556
108,617
2,930,678
3,519,146
Trade and other payables are expected to be repaid within one year, other than the amount due to a related
company.
Bills payable carry interest at annual rate at the Hong Kong Best Lending Rate and are repayable within 90 days.
UNIVISION ENGINEERING LIMITED - 59 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
23. CONTRACT LIABILITIES
At 31.3.2019
£
At 1.4.2018
£
Supply, design and installation of closed circuit television and
surveillance systems services
956,616
1,429,172
The balance as at 1 April 2018 is the adjusted balance after the application of IFRS 15.
Contract liabilities represent the Company’s obligation to transfer performance obligation to customers for
which the Group has received considerations from the customers.
The contract liabilities as at 1 April 2018 were fully recognised as revenue in the current year.
24.
SHARE CAPITAL
Issued and fully paid:
383,677,323 ordinary shares of HK$55,033,572, translated at historical
rate
3,890,257
3,890,257
2019
£
2018
£
The Company has one class of ordinary shares which has no par value.
25. EMPLOYEE RETIREMENT BENEFITS
The Company operates a Mandatory Provident Fund scheme (the “MPF scheme”) under the Hong Kong
Mandatory Provident Fund Schemes Ordinance for employees employed under the jurisdiction of the Hong
Kong Employment Ordinance. The MPF scheme is a defined contribution retirement scheme administered by
independent trustees. Under the MPF scheme, the Company 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 has no other material obligations to make payments in respect of retirement
benefits of the employees.
UNIVISION ENGINEERING LIMITED - 60 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
26. RELATED PARTY TRANSACTIONS
Compensation of key management personnel
The remuneration of the key management personnel of the Company during the year was as follows:
Salaries, bonus and allowances
2019
£
2018
£
414,908
372,563
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.
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 2019, there are balances of £271,869 (2018: £Nil) and £45,746 (2018: £36,599) due from
and due to Mr. Stephen Sin Mo KOO respectively, a Director of the Company, which are unsecured,
interest-free and repayable on demand (Note 19 and 22).
(b) At 31 March 2019, there is a payable balance of £409,556 (2018: £108,617) due to a shareholder,
Univision Holdings Limited, which is unsecured, interest-free and repayable after 12 months (Note 22).
(c) At 31 March 2019, there are receivable balances of £3,322,882 (2018: £3,075,815) 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 these financial statements, the Company had no
other material transactions with related parties during the year.
UNIVISION ENGINEERING LIMITED - 61 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
27. CASH FLOWS FROM LIABILITIES ARISING FROM FINANCING ACTIVITIES
The table below details changes in the Company’s liabilities from financing activities, including both cash and
non-cash changes. Liabilities arising from financing activities are liabilities for which cash flows were, or future
cash flows will be, classified in the Company’s statement of cash flows as cash flows arising from financing
activities.
Amount due to a related company
At beginning of year
Financing cash flows - Advances
Other changes - Foreign translation difference
2019
£
108,617
290,444
10,495
2018
£
123,775
-
(15,158)
At end of year
409,556
108,617
28. COMMITMENTS
(a)
Capital commitments
At 31 March 2019, the Company did not have any material outstanding capital commitments.
(b)
Operating lease commitments
At the end of the reporting period, the total future minimum lease payments under non-cancellable operating
leases for the Company’s office and warehouse premises are payable as follows:
Within one year
Between two to five years
The leases are negotiated for terms from 1 to 2 years with fixed monthly rental.
2019
£
211,546
142,126
2018
£
153,729
213,253
353,672
366,982
UNIVISION ENGINEERING LIMITED - 62 - ANNUAL REPORT 2019
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
29. BANKING FACILITIES
At 31 March 2019, the banking facilities of the Company were as follows:-
(a)
The revolving trade financing facilities amounted to £1,267,674 (equivalent to HK$13,000,000) 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 2019, the facilities were utilised to the extent of £1,102,173 (2018 : £429,373);
and
(b)
The revolving term facilities amounted to £4,388,103 (equivalent to HK$45,000,000) were secured by
floating charges over the bills receivable from its major customer. At 31 March 2019, no facilities were
utilised.
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) to the financial statements.
30. CONTINGENT LIABILITIES
On 10 March 2017, 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 2017, 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 as at 31 March 2019.
31. EVENTS AFTER THE REPORTING PERIOD
On 27 August 2019, the Board of Directors proposed a final dividend for the year ended 31 March 2019. Further
details are disclosed in note 15(i) to the financial statements.
During the interim review in mid of April 2019, HSBC has increased the trade facilities from HK$13m to
HK$21m.
On 15 April 2019, a life insurance plan (“keyman insurance plan”) for the Group’s Executive Chairman, Mr.
Stephen Sin Mo KOO was provided by HSBC Life (International) Limited with sum insured of US$2.5m.
HSBC has provided a long term revolving loan of HK$6.5m for financing certain portion of the premium. The
Company is the policy holder for the keyman insurance plan that is assigned to HSBC for security for the
facilities.
UNIVISION ENGINEERING LIMITED - 63 - ANNUAL REPORT 2019
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 2019 Annual General Meeting (AGM) of UniVision Engineering
Limited will be held at UniVision Engineering Limited, Unit 201, 2/F., Sunbeam Centre, 27 Shing Yip Street,
Kwun Tong, Kowloon, Hong Kong, on 30 September 2019 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 2019
together with the Directors’ Report and the Independent Auditor’s Report;
2. To declare a final dividend for the financial year ended 31 March 2019;
3. To re-elect Mr. Stephen Sin Mo KOO who retired by rotation, as a Director of the Company;
4. To re-elect Mr. Danny Kwok Fai YIP who retired by rotation, as a Director of the Company;
5. To re-elect Mr. Nicholas James LYTH who retired by rotation, as a Non-Executive Director of the Company;
6. To re-elect Mr. Ivor Colin SHRAGO who retired by rotation, as a Non-Executive Director of the Company;
7. To reappoint auditor PKF Hong Kong 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;
8. 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;
9. 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.
By Order of the Board Registered office:
Mr. Stephen Sin Mo KOO Unit 201, 2/F Sunbeam Centre,
Executive Chairman 27 ShingYip Street
Kwun Tong, Kowloon,
4 September 2019 Hong Kong.
UNIVISION ENGINEERING LIMITED - 64 - ANNUAL REPORT 2019
NOTICE OF ANNUAL GENERAL MEETING
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 26 September 2019
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 - 65 - ANNUAL REPORT 2019