Univision Regulatory News (UVEL)

28 Sep 2007 07:05

UniVision Engineering Ltd28 September 2007 UniVision Engineering Limited ("UniVision" or the "Group") Annual Results for the year ended 31 March 2007 UniVision Engineering Limited, the Hong Kong based designer and installer ofdigital surveillance and integrated security systems, today announces itspreliminary results for the year ended 31 March 2007. HIGHLIGHTS •Profit before tax up 304% to £1,432,423 (2006: £354,131) •Turnover up 130% to £8.94m (2006: £3.89m) •Earnings per share 0.39p (2006:0.18p) •Order book for the first quarter of financial year 2007 significantly ahead of the same period in financial year 2006 Mr. Stephen Koo, Chairman, added: "The year under review was an exciting and successful one for the Group as itfurther strengthened its position in the Asia Pacific CCTV market." "The first few months of the current financial year have been very encouraging.In view of the strong demand for products from our existing customers, and thepositive sentiment and exposure towards the digital surveillance market ingeneral, we expect to make further significant progress in the current year. "Our objectives are to further develop our expertise in producing high quality,reliable and innovative digital video solutions and to consolidate our salesnetwork throughout the Greater China region. With the launch of the Group's newproducts in the third quarter of this year, the Board remains confident in theGroup's long-term growth potential." For further information visit www.uvel.com or contact: UniVision Engineering Limited +852 2389 3256Stephen Koo, ChairmanDanny Yip, Finance Director HB Corporate +44 (0) 207 510 8600Jim McGeever/Rory Creedon Threadneedle Communications +44 (0) 207 936 9605Graham Herring/Josh Royston About UniVision Engineering Limited: UniVision Engineering Limited, incorporated in Hong Kong in 1979, is well established in Hong Kong, Macau and China. The Company designs, sources and sells its own brand-name products and OEM products, including Microprocessor CCTV Control Systems, Video Distribution Amplifiers, Fibre Optic Transmission Systems and Smart Card Access Systems. INTRODUCTION I am pleased to report on the results of the Group for the financial year ended31 March 2007, our second year as a public company, which has proved to be anexciting and successful period for UniVision. The Company's Admission to the AIM of the London Stock Exchange in December 2005has given us the opportunity to access international capital markets and enhanceour growing reputation in the commercial marketplace, particularly in Asia andMiddle East, where we see significant growth opportunities to develop as aninternational Group and create greater value for our shareholders. We have been providing our customers with digital surveillance and integratedsecurity systems in the Pacific region for a number of years and, as our productrange and skills base have grown, we are increasingly able to expand ourgeographic reach. The recent acquisition of a majority shareholding in T-ComTech. Co. Ltd and 100% shareholding in Leader Smart Engineering (Shanghai) Ltdhas added momentum to our continued growth in the Greater China Region andenabled us to expand into the electrical and mechanical service sector. Our objectives are to further develop our expertise in producing high quality,reliable and innovative digital video solutions and to consolidate our salesnetwork throughout the Greater China region. With growing demand in thesurveillance and security industry, both domestically and internationally, andwith the launch of a new product range in the third quarter of the current year,we remain confident in the Group's long-term growth potential. FINANCIAL REVIEW During the period under review, turnover increased by 130% to £8.93M (2006: £3.89m). This growth is attributable to additional sales from the acquisition ofT-com and the existing clients and the improvement in market conditions and aheightened awareness in the areas on which we focus. The effect from our 100%owned subsidiaries Leader Smart (Shanghai) will be improve further our growth inthe year of 2008. The development of new applications has generated additionalrevenue streams both from existing and new clients, which is particularlypleasing. I am delighted that turnover for the period was significantly higherthan our internal forecasts. Gross profit margin remains at 32% (2006: 33%). Administration expenses, otheroperating expenses and non-operating expenses were in line with the Group'sincrease in capital investment, marketing and office expansion rising to£1,403,744 (2006: £481,470). This increase is principally due to the additionaladministration cost of new subsidiaries T-Com and Leader Smart Shanghai and themanagement cost for listing of UniVision's shares according to AIM requirement,which under the International Financial Reporting Standards ("IFRSs") could notbe written off against the Share Premium Account. Net growth in profit before tax after excluding all one-off expenses relating tothe Company's flotation increased by 304% to £1.43 million. Basic earnings per share increase to 0.39p from 0.18p even with a greater numberof shares in issue. MARKET REVIEW According to A & S Asia Magazine, the total global demand for surveillance andmonitoring systems is currently approximately US$4.5 billion. This is expectedto grow to approximately US$ 11 billion by 2007. Industrial and economic growthin Hong Kong, China and Macau together with global events such as the Beijing Olympics 2008 and the Shanghai Expo 2010, all lead to increased construction of facilities, such as hotels, shopping centres, and convention and exhibition centres. There is a continuing strong demand for digital video products such as DigitalVideo Server (DVS), Network Video Recorders (NVRs) and Internet Protocol (IP)cameras. Specific examples of this include the upgrade of traffic surveillancein Hong Kong and the upgrade of Digital Video Server (DVS) for the Hong KongKowloon and Canton Railway, the Hong Kong MTRC and the Hong Kong HousingAuthority, as well as the new Hong Kong Government Headquarters and the WesternKowloon development complex. BUSINESS REVIEW Markets IP Video is providing the CCTV industry with a unique set of tools, particularlyfor use in the demanding transportation industry which has used the analoguesystem for a decade. Hybrid IP analogue system is the most cost effective way to connect IP andanalogue cameras with CCTV Matrix Controllers and DVS. Hybrid solutions providelarge installed base analogue cameras with a gateway to transmit video streamsfrom networks and the Internet. There are considerable opportunities in Greater China which is providing avenuesfor the Hybrid solutions. The Group is looking into many different solutions,including Video compression technology MPEG-4 and H.264, Digital Encoder andDecoder (CoDec) with built-in video analysis algorithms in the Homeland Securityfield such as intruder detection, loitering detection, left behind objects andtrip wire will be the new area of interest. The Board believes that UniVision will be among the pioneers in providing themost effective solutions for businesses in the airport, rail and trafficsurveillance industry and we hope to expand our sphere of business accordingly. Technologies, Solutions and Products On the solutions side, an ongoing product development programme is in place tocater for the needs of the Group's growing client base in the Asia Pacificregion. The Group's newly developed Digital Video Server with PC and embedded basesolutions came to market in July 2007 and has been used in several projects inHong Kong. A new brand name for these products is expected to be announced inearly 2008. A newly developed Video Amplifier with an on-screen display functionwas launched at the same time and the first order is due to be implemented intothe CCTV System for the Hong Kong Island Area Traffic Control. We are currentlyworking on H.264 CoDec with built in video analysis algorithms which we expectto launch early in the next financial year. Acquisitions and Investments The success of our investment in T-Com Tech. Co. Ltd and Leader Smart (Shanghai)Ltd has reinforced the Company's strategy of acquiring interests in companieswith strategic value. To this end, the Group is currently assessing a number ofcompanies in related fields with a view to making further strategic investments. Contract Wins During the reporting period, I am pleased to report that the Group was awarded anumber of high profile projects including CCTV systems in the followinglocations; Shenzhen Western Corridor, Hong Kong General Post Office, the Lok MaChau Spur Line terminal, the Hong Kong Airport Baggage Handling Area, the HongKong MTRC Wheel Chair Platform, the Macau Crown Hotel Casino and the New GrandLisboa Hotel Casino. We have also been awarded contracts for E & M & ELV Systemsfor the Beijing Bestride Recreation Club, an E & M System for the Shanghai NVIDIA Office, and CCTV andAccess Controls System for the Formosa Plastic Factories in Taiwan. Macau Casinos As well as growing our business by winning public sector mandates our reputationhas grown in the entertainment and leisure industry and several significantprojects were undertaken in Macau. The Board sees the leisure industry becomingan area of substantial opportunity over the coming years and the strategy thatwas put in place to capitalise on these developments is bearing fruit, asevidenced by the key projects at the Crown Hotel Casino and the New Grand LisboaHotel Casino. MTR & Maintenance Our maintenance contracts are particularly important to the business byproviding strong visibility in our revenue and I am delighted that we havecontinued to develop this side of the business. In particular, our relationshipwith the Mass Transit Railway has proved to be significant with a further 3-yearmaintenance contract for the CCTV, Public Address and Passenger InformationDisplay System (PIDS). This was also extended during the period to include theimportant Disneyland Line. There are several renovation contracts anticipatedfor MTR in the fourth quarter 2007. In July 2007, UniVision entered into a5-year maintenance contract for the CCTV System with the Hong Kong IslandTraffic Control and a 5-year maintenance contract for CCTV System for Tsing MaTraffic Control (Highway System for Hong Kong Airport). PROSPECTS The Company's performance domestically has been strong with new revenue streamsfrom both the public and private sector in the Greater China Region. We areworking with partners in Australia, Thailand, and Dubai in securing productdistribution channels. We continue to enhance our product and applicationdevelopment programmes. The first few months of the current financial year have been very encouraging.In view of the strong demand for products from our existing customers, and thepositive sentiment and exposure towards the digital surveillance products ingeneral, the Board is confident of making further significant progress in thecurrent year. Finally, on behalf of the Board, I would like to thank our customers, suppliersand shareholders for their continued support of UniVision. I would also like toacknowledge the hard work of the management and all the staff for theircontribution and dedication to the Group. MR. STEPHEN KOOEXECUTIVE CHAIRMAN27 September 2007 UNIVISION ENGINEERING LIMITEDGROUP INCOME STATEMENTFor the year ended 31 March 2007 As restated 2007 2006 ------ ------ £ £ Revenue 8,935,778 3,886,780 Cost of sales (6,053,721) (2,607,317) --------- --------- Gross profit 2,882,057 1,279,463 Other income 139,284 244,487Distribution costs (63,345) (94,133)Administrative expenses (1,403,744) (481,470)Other operating expenses (77,353) (201,836) --------- --------- Profit from operations before tax and finance costs 1,476,899 746,511Non-operating expenses - (392,380)Finance costs (44,476) - --------- --------- Profit before taxation 1,432,423 354,131 Income tax expense (30,659) - --------- --------- Profit for the year 1,401,764 354,131 ========= ========= Attributable to minority interest 120,575 - Profit for attributable to equity holders of the parent 1,281,189 354,131 --------- --------- 1,401,764 354,131 ========= ========= Earnings per shareBasic 0.39p 0.13p ========= ========= Diluted N/A N/A ========= ========= UNIVISION ENGINEERING LIMITEDGROUP BALANCE SHEETAt 31 March 2007 As restated 2007 2006 ------ ------ £ £ASSETS Non-current assets Goodwill 961,845 -Plant and equipment 340,560 13,665 --------- --------- 1,302,405 13,665 --------- ---------Current assets Inventories 1,007,434 192,213Due from construction contract customers 1,849,509 934,195Trade and other receivables 3,259,346 2,202,605Cash and cash equivalents 1,603,932 1,414,313 --------- --------- 7,720,221 4,743,326 --------- --------- Total assets 9,022,626 4,756,991 ========= ========= EQUITY Capital and reserves 5,875,457 3,613,139 --------- --------- Total equity 5,875,457 3,613,139 ========= ========= LIABILITIES Current liabilities Bank loan, secured 1,241,905 -Bills payable 220,858 -Due to construction contract customers 599,462 452,536Trade payables and accruals 1,084,944 691,316 --------- --------- Total liabilities 3,147,169 1,143,852 ========= ========= Total equity and liabilities 9,022,626 4,756,991 ========= ========= Minority interest 285,641 - ========= ========= UNIVISION ENGINEERING LIMITEDPARENT COMPANY BALANCE SHEETAt 31 March 2007 As Restated 2007 2006 ------ ------ £ £ASSETS Non-current assets Investment in subsidiary undertakings 2,054,081 -Plant and equipment 15,075 13,665 --------- --------- 2,069,156 13,665 --------- ---------Current assets Inventories 818,140 192,213Due from construction contract customers 763,951 934,195Trade and other receivables 1,592,211 2,205,605Cash and cash equivalents 1,488,295 1,414,313 --------- --------- 4,662,597 4,743,326 --------- --------- Total assets 6,731,753 4,756,991 ========= ========= EQUITY Capital and reserves 5,469,484 3,613,139 --------- --------- Total equity 5,469,484 3,613,139 ========= ========= LIABILITIES Current liabilities Due to construction contract customers 583,962 452,536Trade payables and accruals 678,307 691,316 --------- --------- Total liabilities 1,262,269 1,143,852 ========= ========= Total equity and liabilities 6,731,753 4,756,991 ========= ========= UNIVISION ENGINEERING LIMITEDGROUP STATEMENT OF CHANGES IN EQUITYFor the year ended 31 March 2007 Special Special Share Share Retained capital capital Exchange Minority Total capital premium earnings reserve "A" reserve "B" differences Sub-total interest equity £ £ £ £ £ £ £ £ £ Balance at 31March 2005 883,903 - 381,803 - 143,439 18,430 1,427,575 - 1,427,575 Presentationalcurrencyadjustment 284,078 - (247,199) - - (36,879) - - - Balance at 31March 2005 -restated 1,167,981 - 134,604 - 143,439 (18,449) 1,427,575 - 1,427,575 Issue ofshares uponlisting 235,015 1,279,985 - - - - 1,515,000 - 1,515,000 Issue ofshares uponplacing 48,089 261,911 - - - - 310,000 - 310,000 Share issuecosts - (262,915) - - - - (262,915) - (262,915) Net profit forthe year - - 510,007 - - - 510,007 - 510,007 Effect oftranslation - - - - - 113,472 113,472 - 113,472 Balance at 31March 2006- previouslyreported 1,451,085 1,278,981 644,611 - 143,439 95,023 3,613,139 - 3,613,139 Recovery ofprovision forbad debts - - (13,124) 13,124 - - - - - Recovery ofprovision forobsoleteinventories - - (142,752) 142,752 - - 142,752 - 142,752 Provision forobsoleteinventories - - - - - - (142,752) - (142,752) Balance at 31March 2006 -restated 1,451,085 1,278,981 488,735 155,876 143,439 95,023 3,613,139 - 3,613,139 Issue ofshares foracquisition ofa subsidiaryundertaking 22,991 217,039 - - - - 240,030 165,066 405,096 Issue ofshares uponplacing 223,541 811,257 - - - - 1,034,798 - 1,034,798 Share issuecost - (114,637) - - - - (114,637) - (114,637) Net profit forthe year - - 1,281,189 - - - 1,281,189 120,575 1,401,764 Effect oftranslation - - - - - (464,703) (464,703) - (464,703) Balance at 31March 2007 1,697,617 2,192,640 1,769,924 155,876 143,439 (369,680) 5,589,816 285,641 5,875,457 The currency translation from Hong Kong dollars to the presentational currencyof £Sterling used in these financial statements has no impact on the availabledistributable reserves of the Company which at 31 March 2007 were HK$24,885,054(2006: HK$7,403,922). 1 The adjustment was made to reflect the recovery of the provision ofbad debts and obsolete inventories that should be credited to thenon-distributable Special Capital reserve instead of income statement in yearended 31 March 2006 pursuant to the order of the High Court dated 20 dated 20November 2004. 2 The adjustment was made to reflect the significant under provision of obsoleteinventories amounting to 142,752 in year ended 31 March 2006. UNIVISION ENGINEERING LIMITEDPARENT COMPANY STATEMENT OF CHANGES IN EQUITYFor the year ended 31 March 2007 Special Special Share Share Retained capital capital Exchange Total capital premium earnings reserve "A" reserve "B" differences equity £ £ £ £ £ £ £ Balance at 31March 2005 883,903 - 381,803 - 143,439 18,430 1,427,575 Presentationalcurrencyadjustment 284,078 - (247,199) - - (36,879) - Balance at 31March 2005 -restated 1,167,981 - 134,604 - 143,439 (18,449) 1,427,575 Issue ofshares uponlisting 235,015 1,279,985 - - - - 1,515,000 Issue ofshares uponplacing 48,089 261,911 - - - - 310,000 Share issuecosts - (262,915) - - - - (262,915) Net profit forthe year - - 510,007 - - - 510,007 Effect oftranslation - - - - - 113,472 113,472 Balance at 31March 2006 as previouslyreported 1,451,085 1,278,981 644,611 - 143,439 95,023 3,613,139 Recovery ofprovision forbad debts - - (13,124) 13,124 - - - Recovery ofprovision forobsoleteinventories - - - 142,752 - - 142,752 Provision forobsoleteinventories - - (142,752) - - - (142,752) Balance at 31March 2006 -restated 1,451,085 1,278,981 488,735 155,876 143,439 95,023 3,613,139 Issue ofshares foracquisition ofa subsidiaryundertaking 22,991 217,039 - - - - 240,030 Issue ofshares uponplacing 223,541 811,257 - - - - 1,034,798 Share issuecost - (114,637) - - - - (114,637) Net profit forthe year - - 1,186,859 - - - 1,186,859 Effect oftranslation - - - - - (490,705) (490,705) Balance at 31March 2007 1,697,617 2,192,640 1,675,594 155,876 143,439 (395,682) 5,469,484 1 The adjustment was made to reflect the recovery of the provision ofbad debts and obsolete inventories that should be credited to thenon-distributable Special Capital reserve instead of income statement in yearended 31 March 2006 pursuant to the order of the High Court dated 20 dated 20November 2004. 2 The adjustment was made to reflect the significant under provision of obsoleteinventories amounting to 142,752 in year ended 31 March 2006. UNIVISION ENGINEERING LIMITEDCONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 March 2007 As restated 2007 2006 ------ ------ £ £ CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 1,432,423 354,131Adjustments for:Depreciation 115,412 5,833Admission to AIM costs - 392,380Disposal of investment securities (30,105) -(Reversal)/provision for obsolete inventories, net (205,064) 201,836Written back on trade payables and accruals (51,730) (77,136)Unrealised loss on investment account 14,747 -Impairment losses on deposits, prepayments and otherreceivables 46,700 -Loss on disposal of plant and equipment 739 -Interest income (19,966) (15,929)Interest expenses 44,476 - --------- --------- Operating profit before working capital changes 1,347,632 861,115(Increase)/decrease in inventories (48,130) 404,631Increase in trade and other receivables (257,938) (705,301)Increase in amounts due from construction contractcustomers (219,064) (520,553)Increase in amounts due to construction contractcustomers 108,673 175,351Increase in trade payables and accruals (497,863) (56,660)Decrease in bills payables (50,440) - --------- --------- Net cash generated from operations 382,870 158,583 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of plant and equipment (52,098) (9,207)Receipts from settlement of short term loan - 176,465Net cash outflow from acquisition of subsidiaryundertakings (793,122) -Advance of short term loan receivable - (360,428)Decrease/(increase) in pledged deposits 37,402 (122,655)Proceeds from disposal of plant and equipment 46 -Proceeds from disposal of investment securities 876,784 -Purchases of investment securities (846,679) -Interest received 19,966 15,929 --------- --------- Net cash used in investing activities (757,701) (299,896) --------- --------- UNIVISION ENGINEERING LIMITEDGROUP CASH FLOW STATEMENT (Continued)For the year ended 31 March 2007 As restated 2007 2006 ------ ------ £ £ CASH FLOWS FROM FINANCING ACTIVITIES Interest paid (44,476) -Proceeds from issue of shares 1,034,798 1,810,000Payment for issue of shares and admission to AIM (114,637) (653,220)Bank loan borrowings, secured 171,511 - --------- --------- Net cash generated from financing activities 1,047,196 1,156,780 --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS 672,365 1,015,467 EFFECT OF CHANGES IN FOREIGN EXCHANGE (482,746) 17,031 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,414,313 381,815 --------- --------- CASH AND CASH EQUIVALENTS AT END OF YEAR 1,603,932 1,414,313 ========= ========= Major non-cash transaction On 10 October 2006, 5,363,990 new ordinary shares of HK$0.0625 were issued aspartial consideration for the acquisition of Leader Smart Engineering Limitedand were valued at £240,030 of which £217,039 was credited to the Share PremiumAccount, before expenses. On 14 March 2007, 52,500,000 new ordinary shares of HK$0.0625 were placed at aprice of 2 pence per share by HB Corporate. At the same time, 2,500,000 ordinaryshares of HK$0.0625 were allotted and issued at 2 pence per share to HBCorporate in satisfaction of their placing fee. £811,257 was credited to theShare Premium Account in respect of this placing, before expenses. NOTES TO THE FINANCIAL STATEMENTSFor the year ended 31 March 2007 1. GENERAL INFORMATION The Company is incorporated in Hong Kong as a limited company. The address ofits registered office is 8/F Lever Tech Centre, 69-71 King Yip Street, KwunTong, Kowloon, Hong Kong. The Company has its primary public listing on the Alternative Investment Marketof the London Stock Exchange ("AIM"). The Group is engaged in the supply, design, installation and maintenance ofclosed circuit television and surveillance systems, the sale of security systemrelated products and provision for electronical and mechanical services. Theprincipal activities of the subsidiaries are set out in note 19 to the financialstatements. 2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS), IFRIC interpretations and in accordancewith the rules of the International Accounting Standards Board (IASB). TheFinancial Statements have also been prepared under the historical costconvention. The preparation of financial statements in conformity with IFRS requires the useof certain critical accounting estimates. It also requires management toexercise its judgement in the process of applying the Group's AccountingPolicies. The areas involving a higher degree of judgement or complexity, orareas where assumptions and estimates are significant are disclosed in Note 6. Standards and Interpretations in issue but not yet effective or not yet relevant IFRS 7 "Financial Instruments: Disclosures", and the complementary amendments toIAS 1 "Presentation of Financial Statements", require new disclosures relatingto financial instruments. This standard is effective for the year ending 31December 2007 but will not have an impact on the classification or valuation ofthe Group's financial instruments. IFRS 8 "Operating Segments" requires companies to adopt a management approach toreporting on their operating segments. This standard is effective for the yearending 31 December 2009 but is not expected to have an impact on the Group'sreporting segments. IFRIC 8 "Scope of IFRS 2" addresses whether IFRS 2 "Share-based Payment" appliesto transactions in which the entity cannot identify specifically some or all ofthe goods or services received in return for issuing equity instruments. Theinterpretation is effective for the year ending 31 December 2007. Theinterpretation is not expected to have a major impact on the Group's results orequity. IFRIC 9 "Reassessment of Embedded Derivatives" is effective for the year ending31 December 2007. As none of the terms of the Group's contracts have changed,IFRIC 9 is not relevant to the Group. IFRIC 10 "Interim Financial Reporting and Impairment" prohibits companies fromreversing impairment losses recognised in an interim period on goodwill andinvestments in equity instruments and in financial assets carried at cost, wherea loss would not have been recognised at a subsequent balance sheet date. Theinterpretation is effective for the year ending 31 December 2007. Theinterpretation is not expected to have a major impact on the Group's results orequity. IFRIC 11 IFRS 2 - "Group and Treasury Share Transactions" considers how certaingrants of equity instruments should be treated under IFRS 2 "Share-basedPayment". The interpretation is effective for the year ending 31 December 2008.The interpretation is not expected to have a major impact on the Group's resultsor equity. IFRIC 12 "Service Concession Arrangements" is effective for the year ending 31December 2008. As none of the Group entities is involved in public-to-privateservice concession arrangements, IFRIC 12 is not relevant to the Group. The company will be adopting IFRIC 10 "Interim Financial Reporting andImpairment" 3. PROFIT FROM OPERATIONS BEFORE TAX AND FINANCE COSTS Profit from operations before tax and finance costs is stated after charging /(crediting) the following: As restated 2007 2006 ------ ------ £ £ Cost of inventories recognised as expenses 3,947,819* 1,457,844Unrealised loss on investment account carried at fairvalue 14,747 -Impairment losses on prepayments, deposits and otherreceivables 46,700 -(Reversal)/provision for obsolete inventories (205,064) 201,836Auditors' remuneration 102,511 28,834DepreciationOwned plant and equipment 115,412 5,833 Directors' remuneration (note 12) 189,786 89,494Net exchange gains (72,395) (26,189)Research and development costs 65,666 25,585Operating leases - land and buildings 47,079 28,079Staff costs (excluding directors' remuneration) 870,074 522,289 Written back on trade payables and accruals (51,730) (77,136)Loss on disposal of plant and equipment 739 - ========= ========= *Cost of inventories recognised as expenses includes reversal of provision ofobsolete inventories of £205,064 (2006: provision for obsolete inventories of £201,836) and written back on trade payables and accruals of £51,730 (2006: £Nil) 4. NON-OPERATING EXPENSES As restated 2007 2006 ------ ------ £ £ Total share issue and admission to AIM costs 114,637 668,220 ========= ========= Charged to equity:Share placing costs 114,637 15,500Share issue costs upon admission to AIM - 247,415 --------- --------- 114,637 266,915Charged to income statement:Admission to AIM costs - 392,380Exchange differences - 12,925 --------- ---------Total share issue and admission to AIM costs 114,637 668,220 ========= ========= On 14 March 2007, 52,500,000 new ordinary shares of HK$0.0625 were placed at aprice of 2 pence per share by HB Corporate and have raised £987,762 thereon("the Placing") A portion of the share issue costs that relates to the issuingof new shares amounting to £114,637 have been changed to equity. 5. FINANCE COSTS As restated 2007 2006 ------ ------ £ £ Bank loan interests 44,476 - ======== ======== 6. TAXATION (a) No provision for Hong Kong profits tax has been made in the financialstatements since the Company has sufficient tax losses brought forward to setoff against current year's assessable profit. (b) Subsidiary taxes are calculated by the rates applicable in the localjurisdiction. (c) The taxation on the Group's profit before taxation differs from thetheoretical amount that would arise using applicable tax rate as follows: As restated 2007 2006 ------ ------ £ £ Profit before taxation 1,432,423 354,131 ========= ========= Notional tax on profit before taxation, calculated atthe tax rates applicable of profits in the respectivecountries 267,254 61,973Tax effect of income that is not taxable indetermining taxable profit (11,336) (4,583)Tax effect of expenses that are not deductible indetermining taxable profit 7,842 103,416Tax effect of temporary differences not recognised 10,305 (654)Tax effect of utilisation of tax losses not previouslyrecognised (243,406) (160,152) --------- --------- Tax expense 30,659 - ========= ========= At the balance sheet date, the Company has unused tax losses of £4,461,050 (Asrestated 2006: £6,322,994) that are available for offset against future taxableprofits of the company. No deferred tax asset has been recognised due to theunpredictability of the future profit streams. Tax losses may be carried forwardindefinitely. No provision for deferred tax liabilities has been made in the financialstatements as the tax effect of temporary differences is immaterial to theGroup. 7. EARNINGS PER SHARE The calculation of basic earnings per share is based on the profit attributableto equityholders of the parent for the year of £1,281,189 (As restated 2006: £354,131), and the weighted average of 327,814,621 (2006: 279,155,799) ordinaryshares in issue during the year. No diluted loss per share has been disclosed as there was no potential dilutiveordinary share outstanding during the year (2006: £Nil). 8. EVENTS AFTER THE BALANCE SHEET DATEThere have been no discloseable events since the balance sheet date. Annual Report The annual report for the year ended 31 March 2007 will be sent to shareholdersand will be available, free of charge, from the offices of the Company'snominated adviser, HB Corporate, a division of Hoodless Brennan plc., at 40Marsh Wall, London, E14 9TP and the Company's registrar, Computershare InvestorServices (Channel Islands) Limited at PO Box 83, Ordnance House, 31 Pier Road,St Helier, Jersey JE4 8PW, Channel Island from 10 October 2007. This information is provided by RNS The company news service from the London Stock Exchange