Last checked at 9 Sep 2010 17:41
09 September 2010
UniVision Engineering Limited
("UniVision" or the "Group")
Annual Report for the Year ended 31 March 2010
UniVision Engineering Limited, the Hong Kong based group whose principal activities are the supply, design, installation and maintenance of closed circuit television and surveillance systems, and the sale of security related products, today announces its audited results for the year ended 31 March 2010. The full Annual Report and Accounts and Notice of AGM will shortly be posted to shareholders and be made available on the Company's website, www.uvel.com.
Highlights:
·; Turnover decreased by 30% to £6.4m (2009: £9.2m)
·; Gross profit margin slightly reduced to 33.0% (2009: 33.4%)
·; Loss before tax was £10.3m (2009 loss: £0.3m)
·; Basic loss per share increased to 2.70p (2009 loss per share: 0.14p)
·; Net cash generated from operating activities of £1.3m (2009: -£0.1m)
·; Cash and cash equivalents at year end of £0.9m (2009: -£0.1m)
Mr. Stephen Koo, Chairman of UniVision, added:
"Last year was another difficult year. It is the second year that the Group has recorded a loss after tax since listing on AIM. The Group incurred a substantial loss of £10.3m in the year due to the full impairment loss on the Group's investment in a subsidiary. The result was materially and adversely affected by loss on deconsolidation. Nevertheless, it is a one-off, non-operating item and the Board believes that the said provision will be written back after re-consolidating the subsidiary in the next financial period when the Group recover the right of control over the subsidiary."
"The Group has improved its cash position and generated positive cash flow from operating activities. Our maintenance business is very stable and recorded an increase in revenue in Hong Kong. The business provided a higher profit margin and stable cash flow for the Group. With planned railway lines and the other large scale infrastructure projects launching in Hong Kong in the coming years, we are optimistic on the future business growth."
For further information, please contact:
| UniVision Engineering Limited | +852 2389 3256 |
| Stephen Koo, Chairman |
|
| Chun Hung Wong, CEO |
|
|
|
|
| Allenby Capital Limited (Nominated Adviser/Joint Broker) |
|
| Nick Athanas/James Reeve | +44 (0) 203 328 5656 |
|
|
|
| SVS Securities plc (Joint Broker) |
|
| Ian Callaway/Alex Mattey | +44 (0) 207 638 5600 |
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report the Group's audited results for the financial year ended 31 March 2010.
The Group's full year results have been materially and adversely affected by the impact of a full impairment loss on the net assets of Leader Smart Engineering (Shanghai) Limited ("Leader Smart Shanghai" or the "Subsidiary"), the Group's wholly owned subsidiary in the People's Republic of China ("PRC"). This is as a result of the impact of litigation in which the Group is currently involved as announced by the Group on 16 July 2010, and therefore Leader Smart Shanghai is excluded from the Group's consolidated results for the year ended 31 March 2010. The litigation is being dealt with according to the laws and regulations in PRC. The Board of UniVision believe, having taken legal advice from their attorney in PRC, that the Group have a strong case to recover the right of control over Leader Smart Shanghai following a conclusion to the court judgement. The Shanghai High Court reviewed the case on 4 August 2010 and the Board of UniVision anticipate receiving a final verdict on the case shortly. Should the Group recover the right of control over Leader Smart Shanghai, the aforementioned provision would be written back after re-consolidating Leader Smart Shanghai into the Group's accounts in the next financial period.
The turnover of the Group's Security and Surveillance Systems business remained stable during the year, despite the fact that some of our investments and projects were affected and delayed due to the unfavourable market conditions. Our focus on maintenance services has successfully increased the maintenance revenue in Hong Kong, which has lead to steady cash flow for the operation of the Group. We are now working on several infrastructure projects to be implemented in the coming years in Hong Kong, and we also expect growing demand for our Security and Surveillance Systems business in the Greater China Region. The Board of UniVision anticipate an improved trading performance in this division in the coming years.
The expansion of our Electrical and Mechanical ("E&M") business is ongoing. We are making steady progress on the Zhongshan shopping mall and with a hotel project in Huangshan in the PRC. The Board of UniVision remain confident that the shopping mall project will be completed and operational by the end of 2010 and they continue to evaluate alternative ways to generate value from the project. We are also currently in negotiations on several potential new projects in PRC. With the expected appreciation of the RMB and the property market in PRC, we are cautiously optimistic about our property linked E&M business for the second half of 2010 and for 2011. We are in the process of establishing another WOFE (wholly-owned foreign enterprise) in PRC with an investment cost of HK$30m (£2.6m), which will allow us the opportunity for further expansion. We have also begun work on some new E&M projects in Hong Kong. The development of our E&M business will depend on additional funding being available, as each project is capital intensive.
FINANCIAL REVIEW
Due to the temporary loss of control over the financial and operating policies of the Subsidiary, pending a court decision on the litigation with a former employee and legal representative, the assets, liabilities and operating result of the Subsidiary have been deconsolidated from the Group's reporting statements in the year under review. The net asset value of £8.4m has been excluded from the Group's Statement of Financial Position. The loss from the deconsolidation is £8.3m while a £0.8m one-off impairment loss of goodwill for the holding company of the Subsidiary has been incurred in the period. Total adverse impact on the financial results from the deconsolidation is £9.1min the Consolidated Statement of Comprehensive Income.
The Group incurred a substantial loss of £10.3m in the year under review mainly due to the full impairment loss on the Group's investment in the Subsidiary as detailed above. The above non-operating and one-off items led to the Group's total liabilities exceeding its total assets at the end of the year by £2m. Nevertheless, we consider that the loss is mainly caused by the non-cash and provisional items. The Board of UniVision believes that said provisions will be written back after re-consolidating the Subsidiary in the next financial period should the Group recover the right of control over the Subsidiary following the court judgement.
The Group generated net cash of £1.3m from its operating activities in the period (2009: -£0.1m) and also maintained the cash and cash equivalents at 31 March 2010 of £0.9m (31 March 2009: -£0.1m). This illustrates the cash generating capacity from the Group's continuing operations and a healthy cash position. In addition, we believe that the Group will be able to continue to meet its financial obligations with the continuing support from our major shareholder, Mayne Management Limited, for the extension of the US$6m loan facility.
During the year under review the relative strengthening in the HK$ against sterling has led to an 8.65% appreciation in the GBP reporting amount in the Consolidated Statement of Comprehensive Income, while a relative weak closing rate at the year-end in the HK$ against sterling led to a 6.05% depreciation in the GBP reporting amount in the Consolidated Statement of Financial Position. All figures in the Financial Statements therefore need to be adjusted for comparison purposes.
Turnover in the period decreased by 30% to £6.4m (2009: £9.2m). This reduction was mainly due to the exclusion of turnover in the deconsolidated Subsidiary and the reduction in construction contracts. On the other hand, our maintenance contracts maintained the same revenue levels as last year for the Group as a whole, including an increase in Hong Kong, which contributes a relatively higher profit margin and steady cash flow for the Group's operations. Our major customers in the Security and Surveillance Systems business are public organisations and government departments which provide regular orders, reliable payment schedules and close to zero default risk. With the expected rising demand for the Security and Surveillance Systems business from sizeable proposed government infrastructure projects, we believe that the Group's turnover from this division will be improved in the next financial year.
Gross profit margin slightly reduced to 33.0% (2009: 33.4%) and remains relatively constant due to effective cost control of our human resources, i.e. project and maintenance teams, sub-contractors, logistics teams, and inventory.
Administration expenses decreased by 18.5% from last year to £1.7m (2009: £2m) mainly as a result of the exclusion of the expenses of the Subsidiary from the Group. Finance costs decreased by 16.9% to £0.6m(2009: £0.7m) due to the reduction of the loan interest rate payable to our holding company to 15% p.a. and the cost saving measure of terminating loan and overdraft facilities to our Hong Kong company. No significant capital investment occurred in the current year.
Loss before Interest and Tax (LBIT) was (£9.7m) (2009 earnings: £0.4m). Net loss before income tax was £10.3m (2009 loss: £0.3m). Basic loss per share increased to 2.70p (2009loss per share: 0.14p).
BUSINESS REVIEW
Markets
According to the newly published report "The China Market for CCTV and Video Surveillance Equipment - 2010 edition" by IMS Research, although 2009 was disappointing, the CCTV market is forecast to grow at a compound annual growth rate of 20.2 percent between 2010 and 2014 and could be worth an estimated $3.5 billion by 2014. The major drivers for market growth are increasing investment from the government in infrastructure and public security projects.
However, hybrid solutions are being adopted as an alternative when users are looking to update their existing security infrastructure within a restricted budget. In particular the demand for hybrid DVRs is increasing.
The Board of UniVision expects the network video market to show strong growth in the coming years and considers that the Company is well placed to benefit from this growth.
Though we continue to work towards a resolution towards the litigation surrounding our Subsidiary, the E&M business is still our target growth area. Our growth in the E&M business will be largely dependent on our access to funding as the nature of the contracts we are seeking to win are largely capital intensive.
Technologies, Solutions and Products
Our network video surveillance solutions are showing a strong level of demand. Due to the current trend of falling prices of network based devices and increased performance capabilities, we see an increased migration towards network video surveillance solutions in line with our product range in this area.
We are working to identify suitable products in this area of the market, such as video compression technology, digital encoders and decoders with built-in video analysis algorithms and video management platforms that will provide added value to our existing portfolio of products, in order to cope with the changing market.
Acquisitions and Investments
The Group continues to assess possible opportunities of new investments with a view to making a further strategic move.
MTR Corporation Limited ("MTR") & Maintenance
Our maintenance contracts are particularly important to the business as they provide regular and reliable revenue streams and cash flow. I am delighted that we have achieved substantial growth in this area of the business. In particular, our relationship with the MTR railway in Hong Kong has proved to be extremely positive. We are confident that we will be able to secure other contracts in future confirmed and planned railway line developments in the coming five years.
GOING CONCERN AND AUDITOR'S REPORT
The financial statements show a loss of £10.3m during the year ended 31 March, 2010 and, as of that date, the Group's total liabilities exceed its total assets by £2.0m. In light of the sufficiency of proceeds from the Group's continuing operations and, on the basis that the Group can continue to successfully refinance or obtain sufficient bank and other borrowings, the Board of UniVision are confident of meeting their financial obligations when they fall due in the foreseeable future.
The financial statements do not include any adjustments that would result should there be a shortfall of proceeds from the Group's continuing operations or if other funding required by the Group from refinancing or banks and other financial institutions is not forthcoming.
The report of the auditor on the financial statements for the year ended 31 March 2010 will not be qualified but will include an emphasis of matter in respect of this uncertainty over going concern.
PROSPECTS
Our Security and Surveillance Systems business remains stable, although it declined slightly in the reporting period as compared with 2009. Due to the infrastructure projects to be implemented in the coming years in Hong Kong, as well as the expected growing demand for Security and Surveillance Systems solutions in the Greater China Region, the Board of UniVision have a positive outlook for this area of our business in the coming years.
The E&M business in the PRC is still one of our growth targets. However, our growth will depend on access to funds. Additional funding will be required for certain current projects, as well as future potential projects.
Finally, on behalf of the Board of UniVision, 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
9 September 2010
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2010
|
|
| 2010 |
| 2009 |
|
|
| £ |
| £ |
|
|
|
|
|
|
| Revenue |
| 6,473,743 |
| 9,228,523 |
|
|
|
|
|
|
| Cost of sales |
| (4,339,985) |
| (6,143,040) |
|
|
|
|
|
|
| Gross profit |
| 2,133,758 |
| 3,085,483 |
|
|
|
|
|
|
| Other income |
| 143,360 |
| 127,920 |
| Selling and distribution expenses |
| (96,001) |
| (86,875) |
| Administrative expenses |
| (1,695,991) |
| (2,081,104) |
| Other operating expenses |
| - |
| (11,428) |
| Impairment loss recognised on goodwill |
| (791,945) |
| (309,325) |
| Impairment loss recognised on trade receivables |
| (766,906) |
| (262,997) |
| Impairment loss recognised on other receivables |
| (321,317) |
| (23,632) |
| Loss on deconsolidation of a subsidiary |
| (8,324,208) |
| - |
| Finance costs |
| (611,657) |
| (735,955) |
|
|
|
|
|
|
| Loss before tax |
| (10,330,907) |
| (297,913) |
|
|
|
|
|
|
| Income tax expense |
| (17,351) |
| (226,951) |
|
|
|
|
|
|
| Loss for the year |
| (10,348,258) |
| (524,864) |
|
|
|
|
|
|
| Other comprehensive (loss)/income: |
|
|
|
|
| Exchange differences arising on translation of foreign operations |
| (828,698) |
| 2,444,208 |
| Release of translation reserve upon deconsolidation of a subsidiary |
| (86,785) |
| - |
|
|
|
|
|
|
| Other comprehensive (loss)/income for the year |
| (915,483) |
| 2,444,208 |
|
|
|
|
|
|
| Total comprehensive (loss)/income for the year |
| (11,263,741) |
| 1,919,344 |
|
|
|
|
|
|
| (Loss)/profit for the year attributable to : |
|
|
|
|
| Owners of the Company |
| (10,340,804) |
| (554,580) |
| Non-controlling interests |
| (7,454) |
| 29,716 |
|
|
|
|
|
|
|
|
| (10,348,258) |
| (524,864) |
|
|
|
|
|
|
| Total comprehensive (loss)/income for the year attributable to: |
|
|
|
|
| Owners of the Company |
| (11,255,214) |
| 1,841,759 |
| Non-controlling interests |
| (8,527) |
| 77,585 |
|
|
|
|
|
|
|
|
| (11,263,741) |
| 1,919,344 |
|
|
|
|
|
|
| Loss per share |
|
|
|
|
| Basic |
| 2.70p |
| 0.14p |
| Diluted |
| N/A |
| N/A |
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2010
|
|
| 2010 |
| 2009 |
|
|
| £ |
| £ |
| ASSETS |
|
|
|
|
| Non-current assets |
|
|
|
|
| Plant and equipment |
| 197,093 |
| 285,513 |
| Goodwill |
| 25,830 |
| 692,830 |
|
|
|
|
|
|
| Total non-current assets |
| 222,923 |
| 978,343 |
|
|
|
|
|
|
| Current assets |
|
|
|
|
| Inventories |
| 966,333 |
| 1,050,046 |
| Trade and other receivables |
| 4,400,341 |
| 18,923,799 |
| Tax recoverable |
| 4,384 |
| 8,933 |
| Cash and bank balances |
| 884,174 |
| 117,762 |
|
|
|
|
|
|
| Total current assets |
| 6,255,232 |
| 20,100,540 |
|
|
|
|
|
|
| Total assets |
| 6,478,155 |
| 21,078,883 |
|
|
|
|
|
|
| LIABILITIES AND EQUITY |
|
|
|
|
| Current liabilities |
|
|
|
|
| Trade and other payables |
| 3,342,153 |
| 5,160,493 |
| Tax payable |
| 15,116 |
| 921,984 |
| Interest-bearing borrowings |
| 5,165,203 |
| 5,552,204 |
| Obligation under finance lease |
| 4,048 |
| 4,293 |
| Bank overdrafts |
| - |
| 219,934 |
|
|
|
|
|
|
| Total current liabilities |
| 8,526,520 |
| 11,858,908 |
|
|
|
|
|
|
| Non-current liability |
|
|
|
|
| Obligation under finance lease |
| 5,060 |
| 9,659 |
|
|
|
|
|
|
| Total liabilities |
| 8,531,580 |
| 11,868,567 |
|
|
|
|
|
|
| Capital and reserves |
|
|
|
|
| Share capital |
| 1,697,617 |
| 1,697,617 |
| Reserves |
| (3,974,852) |
| 7,280,362 |
|
|
|
|
|
|
| (Capital deficiency)/equity attributable to owners of the Company |
| (2,277,235) |
| 8,977,979 |
|
|
|
|
|
|
| Non-controlling interests |
| 223,810 |
| 232,337 |
|
|
|
|
|
|
| Total (capital deficiency)/equity |
| (2,053,425) |
| 9,210,316 |
|
|
|
|
|
|
| Total liabilities and equity |
| 6,478,155 |
| 21,078,883 |
The financial statements on pages 19 to 69 were approved and authorised for issue by the Board of Directors on 9 September 2010 and are signed on its behalf by:
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2010
|
|
| Share capital |
| Share premium |
| Retained earnings/ (accumulated losses) |
| Special capital reserve "A" |
| Special capital reserve "B" |
| Translation reserve |
| Sub-total |
| Non-controlling interest |
| Total equity/ (capital deficiency) |
|
|
| £ |
| £ |
| £ |
| £ |
| £ |
| £ |
| £ |
| £ |
| £ |
|
|
|
|
| (Note 1) |
|
|
| (Note 2) |
| (Note 3) |
|
|
|
|
|
|
|
|
| At 1 April 2008 |
| 1,697,617 |
| 2,192,640 |
| 3,170,255 |
| 155,876 |
| 143,439 |
| (223,607) |
| 7,136,220 |
| 154,752 |
| 7,290,972 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss for the year |
| - |
| - |
| (554,580) |
| - |
| - |
| - |
| (554,580) |
| 29,716 |
| (524,864) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange difference arising on translation of foreign operations |
| - |
| - |
| - |
| - |
| - |
| 2,396,339 |
| 2,396,339 |
| 47,869 |
| 2,444,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the year |
| - |
| - |
| (554,580) |
| - |
| - |
| 2,396,339 |
| 1,841,759 |
| 77,585 |
| 1,919,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| At 31 March 2009 |
| 1,697,617 |
| 2,192,640 |
| 2,615,675 |
| 155,876 |
| 143,439 |
| 2,172,732 |
| 8,977,979 |
| 232,337 |
| 9,210,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss for the year |
| - |
| - |
| (10,340,804) |
| - |
| - |
| - |
| (10,340,804) |
| (7,454) |
| (10,348,258) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange difference arising on translation of foreign operations |
| - |
| - |
| - |
| - |
| - |
| (827,625) |
| (827,625) |
| (1,073) |
| (828,698) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Release of translation reserve upon deconsolidation of a subsidiary |
| - |
| - |
| - |
| - |
| - |
| (86,785) |
| (86,785) |
| - |
| (86,785) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive loss for the year |
| - |
| - |
| (10,340,804) |
| - |
| - |
| (914,410) |
| (11,255,214) |
| (8,527) |
| (11,263,741) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| At 31 March 2010 |
| 1,697,617 |
| 2,192,640 |
| (7,725,129) |
| 155,876 |
| 143,439 |
| 1,258,322 |
| (2,277,235) |
| 223,810 |
| (2,053,425) |
The currency translation from Hong Kong Dollars ("HK$") to the presentational currency of Sterling Pound ("£") used in the financial statements has no impact on the available distributable reserves of the Company at 31 March 2010.
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
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2010
|
|
| 2010 |
| 2009 | |
|
|
| £ |
| £ | |
|
|
|
|
|
| |
| Operating activities |
|
|
|
| |
| Loss before tax |
| (10,330,907) |
| (297,913) | |
|
|
|
|
|
| |
| Adjustments for: |
|
|
|
| |
| Interest income |
| (521) |
| (8,521) | |
| Finance costs |
| 611,657 |
| 735,955 | |
| Depreciation |
| 55,043 |
| 191,933 | |
| (Recovery of)/write down of obsolete inventories |
| (26,467) |
| 89,435 | |
| Write back on trade and other payables |
| (3,275) |
| (85,660) | |
| Impairment loss recognised on trade receivables |
| 766,906 |
| 290,801 | |
| Impairment loss recognised on other receivables |
| 321,317 |
| 23,632 | |
| Impairment loss recognised on goodwill |
| 791,945 |
| 309,325 | |
| Loss on disposal of plant and equipment |
| 21,454 |
| 398 | |
| Loss on deconsolidation of a subsidiary |
| 8,324,208 |
| - | |
|
|
|
|
|
| |
| Operating cash flows before movements in working capital |
| 531,360 |
| 1,249,385 | |
| (Increase)/decrease in inventories |
| (3,836) |
| 215,513 | |
| Increase in trade and other receivables |
| (75,333) |
| (2,642,094) | |
| Decrease/(increase) in tax recoverable |
| 4,039 |
| (53,416) | |
| Increase in trade and other payables |
| 843,186 |
| 1,099,440 | |
| Increase in tax payable |
| - |
| 1,505 | |
|
|
|
|
|
| |
| Cash generated from/(used in) operations |
| 1,299,416 |
| (129,667) | |
| Income tax refund/(paid) - Taiwan |
| 38 |
| (18,669) | |
|
|
|
|
|
| |
| Net cash generated from/(used in) operating activities |
| 1,299,454 |
| (148,336) | |
|
|
|
|
|
| |
| Investing activities |
|
|
|
| |
| Interest received |
| 521 |
| 8,521 | |
| Purchase of plant and equipment |
| (30,861) |
| (46,865) | |
| Increase in pledged bank deposits |
| 369,056 |
| (7,168) | |
| Proceeds on disposal of plant and equipment |
| 773 |
| 735 | |
| Net cash outflow from deconsolidation of a subsidiary |
| (4,388) |
| - | |
|
|
|
|
|
| |
| Net cash generated from/(used in) investing activities |
| 335,101 |
| (44,777) | |
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
For the year ended 31 March 2010
|
|
| 2010 |
| 2009 |
|
|
| £ |
| £ |
|
|
|
|
|
|
| Financing activities |
|
|
|
|
| Interest paid |
| (36,579) |
| (87,391) |
| Repayment of obligation under finance lease |
| (4,048) |
| (4,984) |
| Repayment of interest-bearing borrowings |
| (70,220) |
| (608,862) |
|
|
|
|
|
|
| Net cash used in financing activities |
| (110,847) |
| (701,237) |
|
|
|
|
|
|
| Net increase/(decrease) in cash and cash equivalents |
| 1,523,708 |
| (894,350) |
|
|
|
|
|
|
| Cash and cash equivalents at beginning of the year |
| (102,172) |
| 438,498 |
|
|
|
|
|
|
| Effect of foreign exchange rate changes |
| (537,362) |
| 353,680 |
|
|
|
|
|
|
| Cash and cash equivalents at end of the year |
| 884,174 |
| (102,172) |
|
|
|
|
|
|
| Analysis of the balance of cash and cash equivalents: |
|
|
|
|
| Cash and bank balances |
| 884,174 |
| 117,762 |
| Bank overdrafts |
| - |
| (219,934) |
|
|
|
|
|
|
|
|
| 884,174 |
| (102,172) |
UNIVISION ENGINEERING LIMITED
SELECTED NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2010
These notes have been extracted from and should be read in conjunction with the Annual Report and Accounts which will be available shortly on the Company's website at www.uvel.com.
1. GENERAL
UniVision Engineering Limited ("the Company") is incorporated in Hong Kong with limited liability and its shares are listed on the Alternative Investment Market of the London Stock Exchange ("AIM"). The address of the registered office is 8/F Lever Tech Centre, 69-71 King Yip Street, Kwun Tong, Kowloon, Hong Kong.
The financial statements are presented in Sterling Pound ("£") and the functional currency of the Company and its subsidiaries (hereinafter collectively referred to as the "Group") is Hong Kong Dollars ("HK$"). As the Company is listed on AIM, the directors consider that this presentation is more useful for its current and potential investors.
The Company is engaged in the supply, design, installation and maintenance of closed circuit television and surveillance systems, the sale of security system related products and provision for electronic and mechanical services. The principal activities of its subsidiaries are set out in note 18 to the financial statements.
2. BASIS OF PREPARATION
(a) Going concern basis
In preparing the financial statements, the directors of the Company have given careful consideration to the future liquidity of the Group in the light of the fact that the Group incurred a loss of £10,348,258 during the year ended 31 March 2010 and, as of that date, the Group's total liabilities exceed its total assets by £2,053,425.
Taking into account the sufficiency of proceeds from its continuing operations and provided that the Group can continue to successfully refinance or obtain sufficient bank and other borrowings, the directors of the Company are satisfied that the Group will be able to meet in full its financial obligations as they fall due for the foreseeable future and accordingly, the financial statements have been prepared on a going concern basis.
(b) Subsidiary deconsolidated
Notwithstanding that the Group holds 100% equity interest in Leader Smart Engineering (Shanghai) Limited ("LSSH") for the year ended 31 March 2010, this company was no longer regarded as a subsidiary of the Group as the directors of the Company are of the opinion that the Group did not control this company during the year.
Pursuant to the shareholders' meetings of LSSH held on 10 September 2009 and 12 October 2009 respectively, it was approved that the designation of Mr. Ip Kam Ming ("Ip") as the chairman, director and legal representative of LSSH was revoked with immediate effect, due to his suspected misconduct and non-disclosure of conflict of interest. On 5 January 2010, the holding company, Leader Smart Engineering Limited ("LSHK") took legal action against Ip to demand the return of LSSH's corporate, financial and contract chops, business license, certificate of approval and books and records (the "Properties") and the case was lodged with the Shanghai No.1 Intermediate People's Court (the "Court").
In accordance with a civil ruling issued on 6 January 2010, the Properties of LSSH were sealed and withheld by the Court and the directors of the Company were unable to access its Properties. On 20 May 2010, the Court issued a civil judgement that Ip no longer legally acted as the director, chairman and legal representative of LSSH and demanded Ip to return the Properties to LSHK.
However Ip refused to follow the court decision and the Group commenced appeal proceedings to the Shanghai High Court (the "High Court") on 18 June 2010 and the trial was held at the High Court on 4 August 2010.
The directors of the Company are of the opinion that the Group no longer has the power to govern the financial and operating policies of LSSH and accordingly the Group no longer has control of LSSH,notwithstanding that the Group holds a 100% equity interest in LSSH. It is no longer regarded as a subsidiary of the Group from 1 April 2009, whereby certain transactions were not approved by the Board of Directors of the Company, and are considered invalid and unauthorised in LSSH during the year from 1 April 2009 to 31 March 2010. Hence, the directors resolved to deconsolidate LSSH effective from 1 April 2009.
Accordingly, the results of LSSH were excluded from the consolidated financial statements since 1 April 2009. The consolidated statement of comprehensive income presented a loss on deconsolidation of £8,324,208. Details of the deconsolidation of LSSH are stated in note 28.
7. SEGMENT INFORMATION
(a) Business segments
The Group has adopted IFRS 8 with effect from 1 April 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about the components of the Group that are regularly reviewed by the chief operating decision maker, chief executive officer, for the purpose of allocating resources to the segment and to assess its performance. In contrast, the predecessor standard (IAS 14, Segment Reporting) required an entity to identify two sets of segments (business and geographical) using a risks and returns approach. In the past, the Group's primary reporting format was business. The application of IFRS 8 has not resulted in a redesignation of the Group's reportable segments as compared with the primary reportable segments determined in accordance with IAS 14, nor has the adoption of IFRS 8 changed the basis of measurement of segment profit or loss.
The Group is organised into the following business segments:
- Construction contracts
- Maintenance contracts
- Product sales
- Solution sales
- Management fee
(b) Segment revenue and results
The following is an analysis of the Group's revenue and results by operating segment:
For the year ended 31 March 2010:
|
|
| Construction contracts |
| Maintenance contracts |
| Product sales |
| Solution sales |
| Management fee |
|
Total |
|
|
| £ |
| £ |
| £ |
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| External sales |
| 4,188,245 |
| 2,027,207 |
| 258,291 |
| - |
| - |
| 6,473,743 |
| Inter-segment sales |
| - |
| - |
| 40,364 |
| - |
| - |
| 40,364 |
| Less: elimination |
| - |
| - |
| (40,364) |
| - |
| - |
| (40,364) |
| Revenue |
| 4,188,245 |
| 2,027,207 |
| 258,291 |
| - |
| - |
| 6,473,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Result |
|
|
|
|
|
|
|
|
|
|
|
|
| Segment loss |
| (5,540,746) |
| (3,621,376) |
| (557,128) |
| - |
| - |
| (9,719,250) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unallocated income |
|
|
|
|
|
|
|
|
|
|
| - |
| Unallocated expenses |
|
|
|
|
|
|
|
|
|
|
| - |
| Finance costs |
|
|
|
|
|
|
|
|
|
|
| (611,657) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss before tax |
|
|
|
|
|
|
|
|
|
|
| (10,330,907) |
For the year ended 31 March 2009:
|
|
| Construction contracts |
| Maintenance contracts |
| Product sales |
| Solution sales |
| Management fee |
|
Total |
|
|
| £ |
| £ |
| £ |
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| External sales |
| 6,417,135 |
| 2,073,129 |
| 382,837 |
| 351,259 |
| 4,163 |
| 9,228,523 |
| Inter-segment sales |
| - |
| - |
| 139,507 |
| - |
| - |
| 139,507 |
| Less: elimination |
| - |
| - |
| (139,507) |
| - |
| - |
| (139,507) |
| Revenue |
| 6,417,135 |
| 2,073,129 |
| 382,837 |
| 351,259 |
| 4,163 |
| 9,228,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Result |
|
|
|
|
|
|
|
|
|
|
|
|
| Segment profit/(loss) |
| 279,563 |
| 109,464 |
| (1,444) |
| 49,868 |
| 591 |
| 438,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unallocated income |
|
|
|
|
|
|
|
|
|
|
| - |
| Unallocated expenses |
|
|
|
|
|
|
|
|
|
|
| - |
| Finance costs |
|
|
|
|
|
|
|
|
|
|
| (735,955) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss before tax |
|
|
|
|
|
|
|
|
|
|
| (297,913) |
(c) Segment assets and liabilities
The following is an analysis of the Group's assets and liabilities by operating segment:
At 31 March 2010
|
|
| Construction contracts |
| Maintenance contracts |
| Product sales |
| Solution sales |
| Management fee |
|
Total |
|
|
| £ |
| £ |
| £ |
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| Segment assets |
| 4,191,100 |
| 2,028,588 |
| 258,467 |
| - |
| - |
| 6,478,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unallocated assets |
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated total assets |
|
|
|
|
|
|
|
|
|
|
| 6,478,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Segment liabilities |
| 5,519,581 |
| 2,671,604 |
| 340,395 |
| - |
| - |
| 8,531,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unallocated liabilities |
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated total liabilities |
|
|
|
|
|
|
|
|
|
|
| 8,531,580 |
At 31 March 2009
|
|
| Construction contracts |
| Maintenance contracts |
| Product sales |
| Solution sales |
| Management fee |
|
Total |
|
|
| £ |
| £ |
| £ |
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| Segment assets |
| 14,657,389 |
| 4,735,237 |
| 874,438 |
| 802,311 |
| 9,508 |
| 21,078,883 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unallocated assets |
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated total assets |
|
|
|
|
|
|
|
|
|
|
| 21,078,883 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Segment liabilities |
| 8,252,914 |
| 2,666,199 |
| 492,356 |
| 451,745 |
| 5,353 |
| 11,868,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unallocated liabilities |
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated total liabilities |
|
|
|
|
|
|
|
|
|
|
| 11,868,567 |
(d) Other segment information
Amounts regularly provided to the chief operating decision maker but not included in the measure of segment profit or segment assets and not allocated to any operating segments:
For the year ended 31 March 2010
|
|
| Construction contracts |
| Maintenance contracts |
| Product sales |
| Solution sales |
| Management fee |
|
Total |
|
|
| £ |
| £ |
| £ |
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditure * |
| 19,034 |
| 9,213 |
| 1,174 |
| - |
| - |
| 29,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation |
| 35,611 |
| 17,236 |
| 2,196 |
| - |
| - |
| 55,043 |
For the year ended 31 March 2009
|
|
| Construction contracts |
| Maintenance contracts |
| Product sales |
| Solution sales |
| Management fee |
|
Total |
|
|
| £ |
| £ |
| £ |
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditure * |
| 39,684 |
| 12,821 |
| 2,367 |
| 2,172 |
| 26 |
| 57,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation |
| 133,463 |
| 43,117 |
| 7,962 |
| 7,305 |
| 86 |
| 191,933 |
* Capital expenditure represented plant and equipment.
(e) Revenue from major products and services
The following is an analysis of the Group's revenue from its major products and services:
|
|
| 2010 |
| 2009 |
|
|
| £ |
| £ |
|
|
|
|
|
|
| Construction contracts |
| 4,188,245 |
| 6,417,135 |
| Maintenance contracts |
| 2,027,207 |
| 2,073,129 |
| Product sales |
| 258,291 |
| 382,837 |
| Solution sales |
| - |
| 351,259 |
| Management service |
| - |
| 4,163 |
|
|
|
|
|
|
|
|
| 6,473,743 |
| 9,228,523 |
(f) Geographical segments
In determining the Group's geographical segments, revenues are attributed to the segments based on the location of the customers and assets are attributed to the segments based on the location of the assets.
No further geographical segment information is presented as the Group's revenue is materially derived from customers based in one geographic segment comprising Hong Kong, Macau, Taiwan and the PRC, and all of the Group's assets are located in the same geographic segment.
11. DIRECTORS' REMUNERATION
Directors' remuneration for the year is disclosed as follows:
|
|
| 2010 |
| 2009 |
|
|
| £ |
| £ |
|
|
|
|
|
|
| Directors' fees |
| 81,752 |
| 82,862 |
| Other emoluments: |
|
|
|
|
| Salaries, bonuses and allowances |
| 126,390 |
| 108,480 |
| Pension scheme contributions |
| 2,931 |
| 2,678 |
|
|
|
|
|
|
|
|
| 211,073 |
| 194,020 |
14. LOSS PER SHARE
The calculation of basic loss per share is based on the loss attributable to the owners of the Company for the year of £10,340,804 (2009: £554,580), and the weighted average of 383,677,323 (2009: 383,677,323) ordinary shares in issue during the year.
There were no potential dilutive instruments at either financial year end.
15. DIVIDEND
No dividend has been declared or paid for the year ended 31 March 2010 (2009: £Nil).
27. SHARE CAPITAL
|
|
| 2010 |
| 2009 |
|
|
| £ |
| £ |
|
|
|
|
|
|
| Authorised : |
|
|
|
|
| 800,000,000 ordinary shares of HK$0.0625 each |
| 3,669,470 |
| 3,669,470 |
|
|
|
|
|
|
| Issued and fully paid: |
|
|
|
|
| 383,677,323 ordinary shares (2009: 383,677,323 ordinary shares) of HK$0.0625 each |
| 1,697,617 |
| 1,697,617 |
The Company has one class of ordinary shares.
28. DECONSOLIDATION OF SUBSIDIARY
The Group lost control of a wholly-owned subsidiary, LSSH during 2010 as a result of a legal dispute (details provided in note 2(b)).
As a result of this dispute, the Group no longer has controlling power to govern the financial and operating policies of LSSH so as to obtain benefit from its activities. Therefore, management has decided to deconsolidate the assets and liabilities of LSSH at their carrying values at the date when control was lost. Accordingly, the results of LSSH were excluded from the consolidated financial statements of the Group since 1 April 2009. The consolidated statement of comprehensive income presented a loss on deconsolidation of £8,324,208
The carrying values of LSSH at 1 April 2009 were as follow:
|
|
|
|
| 2010 |
|
|
|
|
| £ |
|
|
|
|
|
|
| Assets: |
|
|
|
|
| Plant and equipment |
|
|
| 35,636 |
| Trade and other receivables |
|
|
| 11,457,351 |
| Cash and bank balances |
|
|
| 4,388 |
|
|
|
|
|
|
| Liabilities: |
|
|
|
|
| Trade and other payables |
|
|
| (2,262,610) |
| Tax payable |
|
|
| (823,772) |
|
|
|
|
|
|
| Net asset value |
|
|
| 8,410,993 |
|
|
|
|
|
|
| Loss on deconsolidation of a subsidiary |
|
|
| (8,324,208) |
|
|
|
|
|
|
| Translation reserve released upon deconsolidation |
|
|
| (86,785) |
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| Analysis of net cash outflow of cash and cash equivalents arising from deconsolidation of a subsidiary: |
|
|
|
|
| Cash and bank balances of a deconsolidated subsidiary |
|
|
| 4,388 |
30. RELATED PARTY TRANSACTIONS
Compensation of key management personnel
The remuneration of the key management of the Group during the year was as follows:-
|
| 2010 |
| 2009 |
|
| £ |
| £ |
|
|
|
|
|
| Salaries, bonus and allowances | 271,248 |
| 251,272 |
The remuneration of key management personnel comprises the remuneration of Executive Directors and key executives.
Executive Directors include Executive Chairman, Chief Executive Officer, Technical Director and Finance Director of the Company. The remuneration of the Executive Directors is determined by the Remuneration Committee having regard to the performance of individuals, the overall performance of the Group and market trends. Further information about the Remuneration Committee and the directors' remuneration is provided in the Remuneration Report and the Report on Corporate Governance to the Annual Report and note 11 to the financial statements.
Key executives include Director of Operations and Director of Sales and Marketing of the Company. The remuneration of the key executives is determined by the Executive Directors annually having regard to the performance of individuals and market trends.
Biographical information on key management personnel is disclosed in the Directors' and Senior Management's Biographies section of the Annual Report.
Transactions with related parties
(a) A loan of US$5,000,000 was provided on 31 December 2007 by Mayne Management Limited, the holding company of UniVision Holdings Limited which has a 47.9% equity interest in the Company. Effective from 1 October 2008, the principal amount was revised to US$6,000,000 (including the accrued interest of US$1,000,000) and renewed with maturity date due on 31 March 2011 and charge at interest rate of 15% per annum on the revised principal amount.
(b) At 31 March 2010, there is a receivable balance of £Nil (2009: £6,629) in respect of legal fees which were paid by the Group on behalf of UT Vision PTE, a company of which Mr. Stephen Sin Mo KOO is a director.
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 2010 Annual General Meeting of UniVision Engineering Limited will be held at UniVision Engineering Limited, 8/F Lever Tech Centre, 69-71 King Yip Street, Kwun Tong, Kowloon, Hong Kong, on 5 October 2010 at 5:00P.M.. The following businesses will be transacted then:
1. To receive and adopt the Company's audited financial statements for the financial year ended 31 March 2010 together with the Directors' report and the Independent Auditor's report;
2. To re-elect Mr. Stephen Sin Mo KOO who retired by rotation, as a Director of the Company;
3. To re-elect Mr. Danny Kwok Fai YIP who retired by rotation, as a Director of the Company;
4. To reappoint auditor ZYCPA Company Limited, Certified Public Accountants as auditors of the Company, to hold office from the conclusion of the meeting to the conclusion of the next meeting, during which accounts will be laid before the Company and to authorise the Directors to adjust their remuneration packages;
5. To consider and, if considered appropriate, pass the following resolution as an ordinary resolution that the directors of the Company be and are hereby generally and unconditionally authorised to exercise all powers of the Company to allot ordinary shares of HK$0.0625 each in the capital of the Company (the 'Ordinary Shares'). 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 Annual General Meeting 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.
By Order of the Board Registered office:
8/F Lever Tech Centre,
69-71 King Yip Street,
Kwun Tong, Kowloon,
Hong Kong
Mr. Stephen Sin Mo KOO
Executive Chairman
9 September 2010
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 notarised and certified copy of that power of authority, must be lodged with the Company's registrars, Computershare Investor Services (Jersey) Limited at Queensway House, Hilgrove Street, St Helier, Jersey JE1 1ES, Channel Islands, 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 8 September 2010 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.