Univision Regulatory News (UVEL)

UniVision Engineering Limited

Annual Report

Year ended 31 March 2015

UNIVISION ENGINEERING LIMITED

Annual Report

Year ended 31 March 2015

BOARD OF DIRECTORS, OFFICERS

AND PROFESSIONAL ADVISERS

CHAIRMAN'S STATEMENT

INTRODUCTION

I am pleased to report the Group's audited results for the financial year ended 31 March 2015.

Notwithstanding that the revenue from the Group's Security and Surveillance Systems business recorded a 24.4% decrease compared with last financial year, the maintenance contract income maintained growth of 9.7%. The Board has continued to focus on this segment, that generates much higher gross profit and more stable cash flow to the Group.  We anticipate that large infrastructure projects and the line extension of the MTR in Hong Kong will provide the Company more opportunities for business growth in the coming years.

Recognising the Board's confidence in UniVision, it is declaring an increased final dividend of 0.39 HK cents (gross) per share for the financial year ended 31 March, 2015 (2014: 0.31 HK cents), consistent with its dividend policy since the 2013 financial year.

The Directors remain confident of the future of UniVision and are optimistic about the Group's prospects.

DEMERGER OF LEADER SMART GROUP

The Group has completed the procedure to demerge its Electrical and Mechanical ("E&M") and property division (the "Demerger") through an "in-specie" distribution of shares to UniVision's shareholders. The Board believes that the Demerger is in the best interests of the Company and UniVision's shareholders. After the demerger, it allows UniVision to focus on its core Security and Surveillance business whilst the Leader Smart Group focuses on properties which are not related to UniVision's core security and surveillance systems business.The Leader Smart website  http://www.lshld.com/en/index.html# has been set up to update its shareholders about the company's activities..

The E&M business of Leader Smart has been effectively demerged from UniVision and is now an independent operating entity under Leader Smart Holding Limited which is incorporated in the BVI (British Virgin Islands). This move should improve the appeal of UniVision's business to existing as well as potential investors. The strategy also optimises the Group's operational efficiency.

The value of the net assets of Leader Smart Group of £727K as 31 March, 2015 were distributed to the UniVison Group's shareholders in specie as a special dividend at 0.2 pence per ordinary share. The demerger is treated as the distribution of non-cash assets to owners and the dividend in specie has been debited to the retained earnings accordingly.

The effect of the demerger of the Leader Smart Group on UniVision has resulted in a debit of £4.74m directly to equity.

FINANCIAL REVIEW

The profit from the continuing operation attributable to the equity holders of the Company is £91K (2014: £2.9m). The main reason for the big variance was that the Group recognised a gain from forgiveness of debt due to its former major shareholder of £2.5m in the 2014 financial year. Besides this, the revenue from the construction contracts division recorded a decrease of 53% in the Taiwan subsidiary. This led to the decrease in revenue of £1.9m in this business segment.

CHAIRMAN'S STATEMENT

(Continued)

The Group generated positive net cash of £368K from its operating activities in the year (2014: £548K). The decrease was mainly due to the deposit paid of £0.45m for the software fee for a major project in Taiwan. The Hong Kong Company has a relatively strong cash position that generated positive net cash of £883K from its operating activities in the year (2014: negative £12K) and maintained a cash balance of £1m at the year end. This was contributed to by the effective control of working capital. Net cash of £420K was generated from financing activities in the year (2014: negative £673K) mainly from the proceeds from a bank loan to the Taiwan subsidiary for securing new orders. The Group maintained cash and cash equivalents at 31 March 2015 of £1.2m (31 March 2014: £0.4m).

During the year under review, the relative strengthening closing rate at the year-end of the HK$ against Sterling has led to 11% appreciation in the GBP reporting amount in the Consolidated Statement of Financial Position. All figures in the said Statement therefore needed to be adjusted for comparison purposes.

Turnover in the year decreased by 24.2% to £6.7m (2014: £8.9m). This decrease was mainly due to the significant drop in the construction contracts division in the Group's Taiwan subsidiary that recorded a decrease of revenue of 53% as compared with last year. Facing slow economic growth, local customers cut down their capital expenditure and budgets. There was lower demand for improving or replacing Security and Surveillance Systems.

The revenue from the construction contracts division (excluded the discontinued operations - E&M business) recorded a decrease of 15.5% and 53% respectively in Hong Kong and Taiwan as compared with last year. The drop of construction revenue in Hong Kong was mainly due to the delay of civil works in the major project (the Hong Kong-Zhuhai-Macao Bridge Project) that slowed down the progress of the construction works. There was also increased competition in job tendering for new projects.

The Group's maintenance contracts increased 9.7% overall compared with last year. The revenue and profit margin of the Hong Kong maintenance business are relatively stable. Nevertheless, it recorded a 11.5% decrease in revenue mainly due to the change of scope in the service provided in the new maintenance contract to MTR Corporation Limited for three years commencing on 1 January 2015. The main maintenance contract and its sub-contracts provided regular cash flow for the Group's operations. The remarkable growth of 75.5% (£467K) in the Taiwan maintenance business partly offsets the significant fall in revenue in its construction business. This growth was contributed to by more orders from a local customer and also the release of maintenance budget by a major customer.

The Group's Security and Surveillance Systems business is relatively stable and generates cash flows for operations. The major customers in the Security and Surveillance Systems business are public organisations and sizeable private enterprises, such as the various departments of the Hong Kong Government and MTR Corporation Limited in Hong Kong and Formosa Group in Taiwan.

Gross profit margin slightly increased to 27.2% (2014: 25.9%). The major reason was the increase in gross profit from 35% to 41% in the Group's maintenance contracts, mainly due to effective control of material costs, logistics and sub-contracting charges, and efficiency control to minimize the replacement of equipment during the year. The gross margin in the Taiwan maintenance contracts was much improved to 39% in the year. The decrease in Gross Profit from 22% to 18% in the Group's construction contracts was due to keen competition in tendering projects.

CHAIRMAN'S STATEMENT

(Continued)

Administration expenses remain constant at £1.6m (2014: £1.6m) mainly due to effective cost control to offset the effect of inflation. Finance costs were increased to £26K (2014: £21K) during the year due to increase in borrowing from a bank by the Taiwan subsidiary.

The effect of the demerger of the Leader Smart Group with resulting in a debit of £4.74m to the equity is related to the amount of the provision that was made by the Parent Company for the balance due from the Leader Smart Group, which has been eliminated on consolidation in previous years. It does not affect the profit and loss for the year.

'Continuing operations' represents the Group's Security and Surveillance Systems business which is undertaken by the Hong Kong Company and the Taiwan subsidiary. The E&M business undertaken by the Leader Smart Group is classified as discontinued operations. The loss for the business during the year was £31K (2014: £80K).  

Profit before Interest and Tax (PBIT) from continuing operations was £156K (2014: £3m). Net profit before income tax from continuing operations was £130K (2014: £3m). Basic profit from continuing operations per share for this year was 0.02p (2014: 0.76p).

The Taiwan subsidiary declared a dividend of TWD2.8m (HK$0.73m) during the year. The dividend was paid to the holding company in December 2014 after deducting the withholding tax.

No significant capital investment occurred in the year.

The directors propose the payment of a final dividend of 0.39 HK cents (gross) per share for the financial year ended 31 March 2015 (2014: 0.31 HK cents). The dividend timetable is as follows:

Ex date 17 September 2015

Record date 18 September 2015

Payment date 12 October 2015

The dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in the financial statements.

BUSINESS REVIEW

Markets

According to Tech Navio's analysts forecast, the Global IP Video Surveillance market will grow at a CAGR (Compound Annual Growth Rate) of 24.89 per cent over the period of four years from 2014 to 2018. The increase in concern over security and safety, and also the demand for high-quality images to replace older surveillance systems, are two contributing factors to the growth of the CCTV market.

OnVIF and PSIA are expected to bring a standard in open markets in coming years. Apart from megapixel resolution network security cameras, which are predicted to out-sell standard resolution network security cameras, High Definition Serial Digital Interface (HD-SDI) cameras, which provide high definition real time and no latency video via coaxial cable, are becoming another popular choice.

To overcome existing CCTV networks using coaxial cables, a strong tendency towards Ethernet Over Coaxial devices will also play an important role in months to come.

CHAIRMAN'S STATEMENT

(Continued)

The Group will explore M&A opportunities in related businesses, both locally and overseas, for growth and expansion. Furthermore, the Group would like to expand its market geographically. The target markets include United Arab Emirates and South East Asian countries.

Business

During the year, the Hong Kong Company was awarded a new construction contract for the Hong Kong-Zhuhai-Macao Bridge Project with a contract value of HK$11.25m. It is another remarkable project following the Kai Tak Cruise Terminal project. Further, the Company also obtained the Central-Wanchai Bypass Tunnel Project. These strengthen the Group's position in the Security and Surveillance Systems business in Hong Kong.

Listing

This year 2015 is the 10th anniversary of UniVision's listing on the London Stock Exchange's AIM market. It is a milestone that signifies the Group's standing in the Security and Surveillance Systems business sector. The Group has grown to be one of the leading providers of integrated security systems in our markets.

PROSPECTS

UniVision will remain stable with a strong pipeline of infrastructure projects in the coming year.

.

The Board expects that the growing demand for its Network and High Definition Security and Surveillance products will enable the Group to continue to prosper in these markets.

The Demerger allows the management of UniVision to have a more defined business focus on their core Security and Surveillance Systems business and enhance their responsiveness to market changes.

The Board expects that the business will improve following the announcement of several major proposed infrastructure projects in the coming years, including the High Speed Railway extension (Hong Kong Section), the new runway for Hong Kong International Airport and the extension of MTR lines in Hong Kong. The new line - Shatin-Central - is currently under construction. The Directors believe the demand for Security and Surveillance Systems will remain high and that the Group's core competence relies on our dedicated and experienced management and personnel.

Finally, on behalf of the Board, I would like to thank our customers, suppliers and shareholders for their continued support of UniVision. I would also like to acknowledge the hard work of the management and all the staff for their contribution and dedication to the Group.

MR. STEPHEN SIN MO KOO

EXECUTIVE CHAIRMAN

10 September 2015

DIRECTORS' AND SENIOR

MANAGEMENT'S BIOGRAPHIES

DIRECTORS' BIOGRAPHIES 

Nicholas James LYTH - Non-executive Director (aged 49)

Mr. Lyth is a qualified chartered management accountant and has over 15 years experience as a finance professional, having spent a number of years as director of UK companies. He has lived and worked in China and can speak and write Mandarin. Nicholas is currently Non Executive Chairman of Taihua plc, an AIM quoted manufacturer of pharmaceuticals, based in China. He is responsible for day to day liaison with UK investors.

Stephen Sin Mo KOO - Executive Chairman (aged 58)

Mr. Koo joined UniVision in 1998 and was appointed as a Director on 3 March 2003. He is responsible for overall strategic planning of our Group. He holds both a Bachelor Degree from the University of Technology, Sydney, and a Masters Degree in Business from the Royal Melbourne Institute of Technology in Australia. He is the Director of Up Sky Investments Limited, the Group's ultimate parent company. He is a Fellow of the Institute of Certified Public Accountants of Australia.

Chun Pan WONG - Chief Executive Officer (aged 55)

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 51)

Mr. Yip was appointed as Finance Director on 18 September 2007. He was the Financial Controller for the Group before the appointment. Mr. Yip obtained a Master of Corporate Finance degree from The Hong Kong Polytechnic University and a Bachelor of Commerce (Accounting) degree from The Curtin University of Technology, Australia. Before joining the Group, Mr. Yip was the Accounting Manager of Nissin Food Group, the leading instant noodle manufacturing MNC. Mr. Yip has over 20 years experience in finance and accounting in different industries. He is a member of Hong Kong Institute of Certified Public Accountants. He also acts as Company Secretary for the Corporation.

DIRECTORS' AND SENIOR

MANAGEMENT'S BIOGRAPHIES

(Continued)

Peter Yip Tak CHAN - Director of Sales and Marketing (aged 51)

Mr. Chan joined UniVision in 1995 and was appointed as a Director on 3 October 2014. He holds a Degree in Computing from the University of Northwest Missouri and has over 10 years experience in sales and project management. He is responsible for the management of UniVision's Sales and Marketing Division.

SENIOR MANAGEMENT'S BRIEF BIOGRAPHIES

Mike Chiu Wah CHAN - Director of Operations (aged 40)

Mr. Chan joined UniVision as Assistant Engineer in December 1996, and was promoted to a number of increasingly senior positions in maintenance and project department, prior to being appointed to his present position on 2 January 2008. He is now responsible for the management of UniVision's Project and Maintenance Division. Mr. Chan holds a Bachelor of Engineering degree in Industrial and Manufacturing System Engineering from The University of Hong Kong.

UNIVISION ENGINEERING LIMITED

DIRECTORS' REPORT

The Directors have pleasure in presenting their annual report together with the audited financial statements of the Group and the Company for the year ended 31 March 2015.

Principal Activities

The principal activities of the Company are the supply, design, consultation, installation and maintenance of closed circuit television and surveillance systems, and the sale of security related products.

Discontinued Operation

The Group discontinued its electrical and mechanical services (E & M business) at 31 March, 2015 by demerging Leader Smart Group through a dividend in specie of shares under the group restructuring.

Review of the Business

A review of the Group and its future development is included in the Chairman's Statement.

Assignment of Debt

The Company entered into the assignment of debt deed and agreed to transfer the balance with its former subsidiaries to Leader Smart Holdings Limited, their new holding company after the demerger, on 1 April, 2015.

Financial Position

The Group's profit for the year ended 31 March 2015 and the state of affairs of the Group at that date are set out in the consolidated statement of comprehensive income on page 19 and in the consolidated balance sheet on page 20, respectively.

The Group's and the Company's changes in shareholders' equity for the year ended 31 March 2015 are set out in the consolidated and the Company's statement of changes in equity on page 22 and 23, respectively.

The Group's and the Company's cash flow for the year ended 31 March 2015 is set out in the consolidated and the Company's statement of cash flows on pages 24 to 26.

DIRECTORS' REPORT

(Continued)

Key Performance Indicators (KPI)

Share Capital and Reserves

Details of the movements in share capital are set out in note 27 on page 63.

The movements in reserves during the year are set out in the consolidated statement of changes in equity on page 22.

Dividends

The Directors propose that the payment of a final dividend of 0.39 HK cents (gross) per share for the financial year ended 31 March 2015.

Plant and Equipment

Details of the movements in plant and equipment are set out in note 16 on pages 54 to 55.

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 (appointed on 3 October, 2014)

Mr. Stephen Sin Mo KOO, Mr. Nicholas James LYTH and Mr. Danny Kwok Fai YIP retire by rotation at the forthcoming annual general meeting in accordance with the Company's Articles of Association and, being eligible, the current directors offer themselves for re-election.

DIRECTORS' REPORT

(Continued)

Directors' Interests in Contracts

No director had a material interest in any contract of significance to the business of the Company to which the Company, its holding company, or its subsidiaries was a party at the end of the year or at any time during the year.

Directors' Interests in Shares

According to the register of Directors' Shareholdings kept by the Company, particulars of interests of the Directors (or their immediate families) who held office at the end of the financial year in the ordinary shares of the Company are as set out in the table below:

* 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. He is also interested in 17,223,700 ordinary shares in the Company. Therefore following the Share Transaction, he 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.

DIRECTORS' REPORT

(Continued)

Substantial Shareholdings

As at 7 September 2015, the Directors had been informed of the following companies that held 3% or more of the Company's issued ordinary share capital:

(1) UniVision Holdings Limited is an investment holding company incorporated under the laws of the British Virgin Islands and was formerly owned by Mayne Management Limited. Up Sky Investments Limited acquired the entire stake from Mayne Management Limited on 8 July 2011 and became the major shareholder.

(2) Up Sky Investments Limited is an investment holding company incorporated under the laws of the British Virgin Islands and is wholly-owned by Mr. Stephen Sin Mo KOO.

Payments to Creditors

The Group does not follow any code or standard on payment practice but instead the Group policy is to pay all creditors in accordance with agreed terms of business.

Political and Charitable Donations

During the year the Company made £80 charitable contributions (2014: Nil). No political contribution was made.

Employees

The Group values staff involvement at all levels of operations, and uses various means to train, inform and consult the employees. The Group encourages the management to discuss regularly with the employees on both corporate and individual matters and discloses information to them that will increase their awareness of the financial and economic factors affecting the Group.

The Group recognises its obligations to provide a fair consideration on all vacancies towards people with disability and to ensure that such persons are not discriminated against on the grounds of their disability. For those employees who become disabled during their employment period, the Group will make every effort to ensure that their employment will continue and that sufficient training is arranged.

DIRECTORS' REPORT

(Continued)

Annual General Meeting

The Annual General Meeting of the Company will be held at UniVision Engineering Limited, Unit 01A, 2/F Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong, on 10 October 2015 at 5:00 p.m. The Notice of Meeting appears on page 75.

Annual Report

The annual report for the year ended 31 March 2015 will be uploaded on the Company's website www.uvel.com on 10 September, 2015 and the hard copy will be sent to shareholders by our Registrars, Computershare Investor Services (Jersey) Limited.

Auditor

HKCMCPA Company Limited, Certified Public Accountants remain as our auditor for the year. A resolution to re-appoint HKCMCPA Company Limited, Certified Public Accountants as auditor of the Company will be put to the forthcoming Annual General Meeting.

By Order of the Board

Mr. Stephen Sin Mo KOO 

Executive Chairman

Hong Kong

10 September 2015

REMUNERATION REPORT

The Remuneration Committee presents this report to shareholders on behalf of the Board.

Membership of Remuneration Committee

The Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH.

Policy Statement

The Remuneration Committee sets the remuneration and all other terms of employment of the Executive Directors with a vision to provide a package which is suitable for the responsibilities involved. The remuneration of the Executive Directors is determined by the Remuneration Committee having regard to the performance and experience of individuals, the overall performance of the Group and market trends.

Directors' Remuneration

Details of individual director's remuneration for the year are set out in the table below:

Directors' Interests in Contracts and Interests in Shares

Details of Directors' Interests in Contracts and Interests in Shares are given in the Directors' Report.

REPORT ON CORPORATE GOVERNANCE

Introduction

The Directors believe that their foremost function is to generate continuous profits for the Company's investors, and that this should be achieved by a policy of high standards of corporate governance, integrity and ethics. As the Company is listed on AIM and not subject to the Listing Rules of the UK Listing Authority, it is not officially required to comply with the provisions detailed in the Combined Code on Corporate Governance. However, it is the intention of the Board to manage the Company's and Group's affairs in accordance with this Code, in so far as is practical and appropriate for a public company of this size and complexity. The following are a few examples on how the Directors have applied the principles of good corporate governance to manage the Company throughout the year.

Board of Directors

The Board directs and controls the Company and is responsible for strategy and operating performance. It meets regularly throughout the year and has adopted a schedule of matters specifically reserved for its decision.

All Directors are elected by shareholders at the first opportunity after their initial appointment to the Board and to be re-elected thereafter at intervals of not more than three years. Biographical information on all the Directors is listed in the Directors' and Senior Management's Biographies section to the annual report, which may help the shareholders to make a decision at the time of re-election.

Upon their appointments, the Directors are offered an opportunity to request information and training relevant to their legal and other duties. They are also given written guidelines and rules defining their responsibilities within an AIM listed company.

The Board considers that all Non-executive Directors are independent of management and day to day operation, and free from any commercial relationship with the Company. These Non-executive Directors do not participate in any of the Company's pension schemes or bonuses. The Chairman of the Audit and Remuneration Committees is a Non-executive Director.

Nomination Committee

As the Board of Directors of the Company is relatively small, there is no separate Nomination Committee. All nominations to the Board are considered by all of the Directors.

Audit Committee

Our Audit Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH. The Chairman of the Audit Committee has full discretion to invite any Executive Directors to attend its meetings. The Audit Committee meets not less than twice per annum.

REPORT ON CORPORATE GOVERNANCE

(Continued)

The responsibilities of the Committee are to:

- monitor the quality of the overall internal control system of all financial matters;

- review the Company's Accounting Policies and ensure compliance with accounting standards;

- ensure that the financial performance of the Company is properly measured and reported on;

- consider the appointment/re-appointment of the external auditor;

- review the conduct of the audit and discuss the audit fees;

- review reports from the Auditors relating to the Company's accounting and internal controls;

- to ensure the Company complies with the AIM Rules.

Remuneration Committee

Our Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH. The Remuneration Committee meets as required.

The responsibilities of the Committee are to:

- determine the specific remuneration package for each Director including Director's fees, salaries, allowances, bonuses, options, benefits-in-kind; and

- seek professional advice, including comparison with similar businesses, in order to correctly fulfil its duties, as the Committee deems appropriate.

In discharging its functions, the Committee may obtain independent external legal and other professional advices as it deems necessary. The expense of such advice shall be borne by the Company.

Internal Control

The Board of Directors is responsible for ensuring that the Company maintains an internal financial control system with appropriate monitoring procedures for all Group companies. The purpose of this system is to safeguard Company assets, maintain proper accounting records, and ensure that reliable financial information is used within the Group and for publication purposes. However, the system is designed to manage rather than completely eliminate risk and can only provide reasonable but not absolute assurance against material misstatement.

In order to achieve the above responsibilities, the Board meets regularly and monitors the Company's internal financial control by reviewing the overall process and the performance of the systems, setting annual budgets and periodic forecasts, and seeking any prior approval for all significant expenditure.

The Group currently does not have an internal audit department and after extensive review and consideration, the Board has concluded that the existing control mechanisms are sufficient for the size of the Group. This decision will be kept under review.

REPORT ON CORPORATE GOVERNANCE

(Continued)

Going Concern

After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the Company's and Group's financial statements.

Investor Relations

The Company realises that effective communication can increase transparency and accountability to its shareholders; as such, the Company discloses its information to its shareholders through RNS (i.e. the news distribution service operated by the London Stock Exchange plc). The same information can also be found on the Company's website (www.uvel.com). The Company will make every effort to ensure that all price-sensitive information is released publicly and immediately. If an immediate announcement is not possible, the Company will try to publicize the information at the earliest time possible to ensure that the shareholders and the public have fair access to it.

The Company will send the Annual Report and the notice of the Annual General Meeting (AGM) to all its shareholders. This notice is also made available on RNS. The Company recognises the importance of the shareholders' views and encourages them to attend the AGMs where they can share their opinions and raise direct queries and concerns towards the Directors, including the chairperson of each of the Board Committees. The shareholders are also welcomed to discuss any issues on an informal basis at the conclusion of the AGMs.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.

The Directors are responsible for preparing financial statements for each financial year which give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss for that year.

In preparing those financial statements, the Directors are required to:

l select suitable accounting policies and then apply them consistently;

l make judgements and estimates that are reasonable and prudent;

l state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

l prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company. They have general responsibility for taking such steps as are reasonably available to them to safeguard the assets of the Group and the Company to prevent and detect fraud and other irregularities.

INDEPENDENT AUDITOR'S REPORT

TO THE SHAREHOLDERS OF

UNIVISION ENGINEERING LIMITED

(Incorporated in Hong Kong with limited liability)

We have audited the financial statements of UniVision Engineering Limited (the "Company") and its subsidiaries (collectively referred to as the "Group") set out on pages 21 to 74, which comprise the Consolidated and the Company's Statement of Financial Position as at 31 March 2015, and the Consolidated Statement of Comprehensive Income, the Consolidated and the Company's Statement of Changes in Equity and the Consolidated and the Company's Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

This report is made solely to the Company's shareholders, as a body, in compliance with the Alternative Investment Market Rules ("AIM Rules") for companies as published by the London Stock Exchange plc. Our audit work has been undertaken so that we might state to the Company's shareholders those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's shareholders as a body for this report or for the opinions we have formed.

Directors' responsibility for the financial statements

The Directors are responsible for the preparation of these financial statements in accordance with International Financial Reporting Standards and for being satisfied that they give a true and fair view and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

Scope of the audit of the financial statements

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE SHAREHOLDERS OF

UNIVISION ENGINEERING LIMITED

(Incorporated in Hong Kong with limited liability)

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company and the Group as at 31 March 2015 and their financial performance and cash flows for the year then ended, in accordance with International Financial Reporting Standards.

HKCMCPA Company Limited

Certified Public Accountants

PANG KING SZE, RUFINA

Practising Certificate number P05228

Hong Kong, China

10 September 2015

UNIVISION ENGINEERING LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2015

UNIVISION ENGINEERING LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2015

The financial statements on pages 21 to 74 were authorised for issue by the board of directors on 10 September 2015 and were signed on its behalf by:

UNIVISION ENGINEERING LIMITED

COMPANY STATEMENT OF FINANCIAL POSITION

As at 31 March 2015

The financial statements on pages 21 to 74 were authorised for issue by the board of directors on 10 September 2015 and were signed on its behalf by:

UNIVISION ENGINEERING LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2015

The currency translation from Hong Kong Dollars ("HK$") to the presentation currency of Sterling Pound ("£") used in the financial statements has no impact on the available distributable reserves of the Company at 31 March 2015.

Notes:

1. Share premium

The Company may by resolution reduce the share premium account in any manner authorised and subject to any conditions prescribed by law.

2. Special capital reserve "A"

Pursuant to the Order of the High Court dated 20 November 2004, any future recoveries of the Company's accumulated provision for obsolete inventories and provision for bad debts amounting to HK$1,935,002 and HK$3,592,540 respectively will be credited to non-distributable special capital reserve "A" account.

3. Special capital reserve "B"

By a special resolution passed on 30 July 2004 and Order of the High Court dated 20 November 2004, the authorised and issued capital of the Company was reduced from HK$159,245,000 divided into 31,849 ordinary shares of HK$5,000 each to HK$16,405,000 divided into 3,281 ordinary shares of HK$5,000 each. The reduction of capital was effected by cancellation of 28,568 ordinary shares of HK$5,000 each in the issued and paid up share capital of the Company. The Company established a non-distributable special capital reserve "B" account into which HK$2,071,307 was credited as a result of the capital reduction.

UNIVISION ENGINEERING LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2015