REG - UniVision Eng Ltd - Final Results <Origin Href="QuoteRef">UVEL.L</Origin> - Part 3
29/10/2014 09:27
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of
costs incurred plus recognised profit less recognised losses and progress billings, and are presented under the caption of
"Trade and other receivables" or "Trade and other payables" in the statement of financial position as the "Amounts due from
customers for contracts-in-progress" (as an asset) or the "Amounts due to customers for contracts-in-progress" (as a
liability), as applicable. Progress billings not yet paid by the customer are included in the statement of financial
position. Amounts received before the related work is performed are included in the statement of financial position, as a
liability, as "Advances received".
4.17 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for their intended use or sale are added to the cost of
those assets until such time as the assets are substantially ready for their intended use or sale. Investment income
earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
4.18 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.
The Group as lessor
Rental income from operating leases is recognised in profit or loss on a straight-line basis over the term of the relevant
lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of
the leased asset and recognised as an expense on a straight-line basis over the lease term.
The Group as lessee
Operating lease payments are recognised as an expense on a straight-line basis over the lease term. In the event that
lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate
benefit of incentives is recognised as a reduction of rental expense on a straight-line basis.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.19 Employee benefit
These comprise short term employee benefits and contributions to defined contribution retirement plan.
Short-term employee benefits, including salaries, annual bonuses, paid annual leave, leave passage, contributions to
defined contribution retirement plans and the cost of non-monetary benefits are accrued in the year in which the associated
services are rendered by employees of the Group. Where payment or settlement is deferred and the effect would be material,
these amounts are stated at their present values.
Contributions to the defined contribution scheme are charged to profit or loss when incurred.
4.20 Income tax
Income tax expense for the period comprises current and deferred tax. Tax is recognised in the statement of comprehensive
income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In
this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance
sheet date in the countries where the company and its subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is
subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax
liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted
for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for
deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the group and
it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an
intention to settle the balances on a net basis.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.21 Financial guarantee issued, provisions and contingent liabilities
(i) Financial guarantees issued
Financial guarantees are contracts that require the issuer (i.e. the guarantor) to make specified payments to reimburse the
beneficiary of the guarantee (the "holder") for a loss the holder incurs because a specified debtor fails to make payment
when due in accordance with the terms of a debt instrument.
Where the Group issues a financial guarantee, the fair value of the guarantee is initially recognised as deferred income
within trade and other payables. The fair value of financial guarantees issued at the time of issuance is determined by
reference to fees charged in an arm's length transaction for similar services, when such information is obtainable, or is
otherwise estimated by reference to interest rate differentials, by comparing the actual rates charged by lenders when the
guarantee is made available with the estimated rates that lenders would have charged, had the guarantees not been
available, where reliable estimates of such information can be made. Where consideration is received or receivable for the
issuance of the guarantee, the consideration is recognised in accordance with the Group's policies applicable to that
category of asset. Where no such consideration is received or receivable, an immediate expense is recognised in profit or
loss on initial recognition of any deferred income.
The amount of the guarantee initially recognised as deferred income is amortised in profit or provisions are recognised in
accordance with (ii) if and when (1) it becomes probable that the holder of the guarantee will call upon the Group under
the guarantee, and (2) the amount of that claim on the Group is expected to exceed the amount currently carried in trade
and other payables in respect of that guarantee, i.e. the amount initially recognised, less accumulated amortisation.
(ii) Other provisions and contingent liabilities
Provisions are recognised for other liabilities of uncertain timing or amount when the Group or the Company has a legal or
constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be
required to settle the obligation and a reliable estimate can be made. Where the time value of money is material,
provisions are stated at the present value of the expenditure expected to settle the obligation.
4.22 Dividend distribution
Dividend distribution to the Company's shareholders is recognised as liability in the Group's and the Company's financial
statements in the period in which the dividends are approved by the Company's shareholders or directors, where
appropriate.
4.23 Events after the reporting period
Events after the reporting period that provide additional information about the Group's position at the end of the
reporting period or those that indicate the going concern assumption is not appropriate are adjusting events and are
reflected in the financial statements. Events after the reporting period that are not adjusting events are disclosed in the
notes to the financial statements when material.
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Critical judgements in applying accounting policies
In the process of applying the accounting policies, management has made the following judgements that have the most
significant effect on the amounts recognised in the financial statements (apart from those involving estimations, which are
dealt with below).
(i) Estimation of contract costs
Estimated costs to complete contracts are judged by the directors through the application of their experience and knowledge
of the industry in which the Group operates. However, contract performance can be difficult to predict accurately. The
directors believe that contract budgets do not deviate materially from actual costs incurred due to a strong cost control
system with regular review of budgets which highlight any incidences that could affect estimated costs to completion.
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting
periods, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting
period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year, are discussed below.
(i) Impairment of assets
The Group has to exercise judgement in determining whether an asset is impaired or the event previously causing the asset
impairment no longer exists, particularly in assessing: (1) whether an event has occurred that may affect the asset value
or such event affecting the asset value has not been in existence; (2) whether the carrying value of an asset can be
supported by the net present value of future cash flows which are estimated based upon the continued use of the asset or
derecognition; and (3) the appropriate key assumptions to be applied in preparing cash flow projections including whether
these cash flow projections are discounted using an appropriate rate. Changing the assumptions selected by management to
determine the level of impairment, including the discount rates or the growth rate assumptions in the cash flow
projections, could materially affect the net present value used in the impairment test.
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Key sources of estimation uncertainty (continued)
(ii) Impairment of trade and other receivables
The estimation of impairment of trade and other receivables includes an assessment of recoverability of individual account
balances and a review of ageing analysis of trade and other receivables by the directors. The directors will also review
the credit history of customers in assessing the recoverability of trade and other receivables. When any indication comes
to their attention that a trade and other receivable might not be recovered in full, impairment will be made and recognised
as an expense in the consolidated statement of comprehensive income. As at 31 March 2014, the total carrying amount of
trade and other receivables are £14,299,649 (2013: £15,706,652).
(iii) Plant and equipment and depreciation
The Group determines the estimated useful lives, residual values and related depreciation charges for the Group's plant and
equipment. This estimate is based on the historical experience of the actual useful lives and residual values of plant and
equipment of similar nature and functions. The Group will revise the depreciation charge where useful lives and residual
values are different to those previously estimated, or it will write-off or write-down technically obsolete or
non-strategic assets that have been abandoned or sold.
(iv) Income taxes
The Group is subject to income tax in different jurisdiction in Hong Kong, Taiwan and the PRC. Significant estimates are
required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate
tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is
different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.
As at 31 March 2014, the Group has unused tax losses of £4,561,705 (2013: £5,331,538) available for offset against future
profits. A deferred tax asset of £752,681 (2013: £879,740) has not been recognised in respect of the unused tax losses. In
cases where there are future profits generated to utilise the tax losses, a material deferred tax asset may arise, which
would be recognised in the consolidated statement of comprehensive income for the period in which such future profits are
recorded.
6. FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
2014 2013
£ £
Financial assets:
Loans and receivables
- Trade and other receivables 14,299,649 15,706,652
- Bank deposits 223,865 246,008
- Cash and bank balances 379,860 585,046
Financial liabilities:
- Trade and other payables 4,544,953 4,866,691
- Loan and borrowings 440,582 3,528,205
- Obligation under finance lease 14,259 23,191
(b) Financial risk management objectives and policies
The Group's major financial instruments include loan and borrowings, trade and other receivables and trade and other
payables. Details of these financial instruments are disclosed in the respective notes. The risks associated with these
financial instruments include currency risk, interest rate risk, credit risk and liquidity risk. The policies on how these
risks are mitigated are set out below. The management manages and monitors these exposures to ensure appropriate measures
are implemented in a timely and effective manner.
(i) Market risk
(1) Currency risk
Certain entities in the Group have foreign currency transactions and have foreign currency denominated monetary assets and
liabilities, which expose the Group to foreign currency risk. The Company has foreign currency transactions, which expose
the Company to foreign currency risk.
The carrying amounts of the Group's and the Company's foreign currency denominated monetary assets and monetary
liabilities, mainly represented by trade and other receivables, cash and bank balances, trade and other payables and loan
and borrowings, at the end of the reporting period are as follows:
The Group The Company
Assets Liabilities Assets Liabilities
2014 2013 2014 2013 2014 2013 2014 2013
NTD 77,729,425 91,745,343 56,222,390 77,936,668 - - - -
RMB 113,969,896 114,796,596 42,914,220 37,918,302 - 116,700 5,081,515 85,597
USD 23,444 102,480 - 3,948,718 23,444 101,159 - 3,948,718
HK$ 29,993,818 25,823,460 12,218,181 16,251,432 28,884,579 23,643,127 ` 12,034,097 15,978,539
The Group currently does not have any policy on hedges of foreign currency risk. However, management monitors the foreign
currency risk exposure and will consider hedging significant foreign currency risk should the need arise.
6. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(i) Market risk (continued)
(1) Currency risk (continued)
Sensitivity analysis
The following table details the Group's sensitivity to a 5% increase and decrease in £ against the relevant foreign
currencies and all other variables were held constant. 5% (2013: 5%) is the sensitivity rate used when reporting foreign
currency risk internally to key management personnel and represents management's assessment of the reasonably possible
change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currencies denominated
monetary items and adjusts their translation at the year end for a 5% (2013: 5%) change in foreign currency rates. A
positive/(negative) number indicates a decrease/(increase) in post-tax profit/(loss) for the year when £ strengthens 5%
(2013: 5%) against the relevant foreign currencies. For a 5% (2013: 5%) weakening of £ against the relevant currency,
there would be an equal but opposite impact on the post-tax profit/(loss) for the year.
2014 2013
£ £
NTD
Post-tax profit for the year 22,310 16,068
RMB
Post-tax profit for the year 361,753 430,178
USD
Post-tax loss for the year 746 (134,404)
HK$
Post-tax profit for the year 72,468 42,883
(2) Interest rate risk
The Group and the Company is exposed to fair value interest rate risk in relation to fixed rate bank deposits and
borrowings at fixed rates. The Group and the Company is exposed to cash flow interest rate risk due to fluctuation of the
prevailing market interest rate on certain bank borrowings which carry at prevailing market interest rates as shown in
notes 25 and 26. The Group currently does not have an interest rate hedging policy. However, management monitors interest
rate exposure and will consider hedging significant interest rate exposure should the need arises.
The Group's and the Company's exposures to interest rates on financial liabilities are detailed in the liquidity risk
management section of this note.
6. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(i) Market risk (continued)
(2) Interest rate risk (continued)
Sensitivity analysis
The sensitivity analysis below has been determined based on the change in interest rates and the exposure to interest rates
for the non-derivative financial liabilities at the balance sheet date and on the assumption that the amount outstanding at
the balance sheet date was outstanding for the whole year and held constant throughout the financial year. The 25 basis
points increase or decrease represents management's assessment of a reasonably possible change in interest rates over the
period until the next annual balance sheet date. The analysis is performed on the same basis for 2013.
For the year ended 31 March 2014, if interest rates had been 25 basis points higher/lower, with all other variables held
constant, the Group's post-tax profit for the year would increase/decrease by approximately £1,425 (2013: £2,510).
(ii) Credit risk
At 31 March 2014, the Group's and the Company's maximum exposure to credit risk in the event of the counterparties' failure
to perform their obligations in relation to each class of recognised financial assets is the carrying amount of those
assets as stated in the consolidated statement of financial position.
The Group's credit risk is primarily attributable to its trade and other receivables. In order to minimise the credit risk,
the management of the Group has a credit policy in place and the exposures to these credit risks are monitored on an
ongoing basis. Credit evaluations of its customers' financial position and condition are performed on each and every major
customer periodically. These evaluations focus on the customer's past history of making payments their due and current
ability to pay, and take into account information specific to the customer as well as pertaining to the economic
environment in which the customer operates. Debts are usually due within 90 days from the date of billing.
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The default
risk of the industry and country in which customers operate also has an influence on credit risk. At the balance sheet
date, the Group had no significant concentrations of credit risk where individual trade and other receivables balance
exceed 10% of the total trade and other receivables at the balance sheet date.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by
international credit rating agencies. Also, the Group has no significant concentration of credit risk, with exposure spread
over a number of counterparties and customers.
Further quantitative disclosures in respect of the Group's and the Company's exposure to credit risk arising from trade and
other receivables are set out in note 21.
6. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk
In managing the liquidity risk, the Group's policy is to regularly monitor and maintain an adequate level of cash and cash
equivalents determined by management to finance the Group's operations. Management also needs to ensure the continuity of
funding for both the short and long terms, and to mitigate the effects of cash flow fluctuation. At 31 March 2014, the
Group had aggregate banking facilities of £2,194,840 (2012: £2,456,940), of which £1,754,258 were unused (2013:
£1,550,458).
The following table details the contractual maturities of the Group's and the Company'sfinancial liabilities at the balance
sheet date, which is based on the undiscounted cash flows and the earliest date on which the Group can be required to pay.
The table includes both interest and principal cash flows.
The Group
2014
Weighted Within More than More than Carrying
average 1 year 1 year but 2 years but Total amount
effective or on less than less than undiscounted at 31
interest rate Demand 2 years 5 years cash flow March 2014
% £ £ £ £ £
Non-derivative financial liabilities:
Loan and borrowings 3.64% - 3.76% 445,213 - - 445,213 440,582
Trade and other payables - 4,544,953 - - 4,544,953 4,544,953
Obligation under finance lease 3.25% 7,956 7,956 664 16,576 14,259
4,998,122 7,956 664 5,006,742 4,999,794
Financial guarantee
Maximum amount guaranteed (note 31) 7,860,000 - - 7,860,000 7,860,000
6. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
The Group
2013
Weighted Within More than More than Carrying
average 1 year 1 year but 2 years but Total amount
effective or on less than less than undiscounted at 31
interest rate Demand 2 years 5 years cash flow March 2013
% £ £ £ £ £
Non-derivative financial liabilities:
Loan and borrowings 3.39% - 3.91% 3,538,642 - - 3,538,642 3,528,205
Trade and other payables - 4,866,691 - - 4,866,691 4,866,691
Obligation under finance lease 3.25%-3.95% 8,744 8,744 9,471 26,959 23,191
8,414,077 8,744 9,471 8,432,292 8,418,087
Financial guarantee
Maximum amount guaranteed (note 31) 7,930,000 - - 7,930,000 7,930,000
The Company
2014
Weighted Within More than More than Carrying
average 1 year 1 year but 2 years but Total Amount
effective or on less than less than undiscounted at 31
interest rate demand 2 years 5 years cash flow March 2014
% £ £ £ £ £
Non-derivative financial liabilities:
Loan and borrowings - - - - - -
Trade and other payables - 1,444,776 - - 1,444,776 1,444,776
Obligation under finance lease 3.25% 7,956 7,956 664 16,576 14,259
1,452,732 7,956 664 1,461,352 1,459,035
6. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
The Company
2013
Weighted Within More than More than Carrying
average 1 year 1 year but 2 years but Total Amount
effective or on less than less than undiscounted at 31
interest rate demand 2 years 5 years cash flow March 2013
% £ £ £ £ £
Non-derivative financial liabilities:
Loan and borrowings - 2,621,723 - - 2,621,723 2,621,723
Trade and other payables - 1,369,206 - - 1,369,206 1,369,206
Obligation under finance lease 3.25%-3.95% 8,744 8,744 9,471 26,959 23,191
3,999,673 8,744 9,471 4,017,888 4,014,120
(c) Fair value
The fair values of financial assets and financial liabilities are determined in accordance with generally accepted pricing
models based on discounted cash flow analysis. Balances with subsidiaries are unsecured, interest free and have no fixed
repayment terms.
The directors of the Company consider that the carrying amounts of financial assets and financial liabilities recorded at
amortised cost in the financial statements approximate to their fair values at the end of the reporting period.
(d) Capital risk management
The Group's primary objectives when managing capital are to safeguard the Group's ability to continue as a going concern,
so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
The Group actively and regularly reviews and manages its capital structure to maintain a balance between the higher
shareholder returns that might be possible with a higher level of borrowings and the advantages and security afforded by a
sound capital position, and makes adjustments to the capital structure in light of changes in economic conditions.
The Group monitors its capital structure on the basis of a net debt-to-adjusted capital ratio. For this purpose the Group
defines net debt as total debt (which includes bank borrowings and other financial liabilities) less bank deposits and
cash. Adjusted capital comprises all components of equity less unaccrued proposed dividends.
6. FINANCIAL INSTRUMENTS (CONTINUED)
(d) Capital risk management (continued)
During 2014, the Group's strategy, which was unchanged from 2013, was to maintain the net debt-to-adjusted capital ratio as
low as feasible. In order to maintain or adjust the ratio, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Neither the Company nor any of its subsidiary undertakings are subject to externally imposed capital requirements.
The net debt-to-adjusted capital ratios of the Group and the Company at the end of the reporting period were as follows:
The Group The Company
2014 2013 2014 2013
£ £ £ £
Current liabilities
Trade and other payables 4,544,953 4,866,691 1,444,776 1,369,206
Loan and borrowings 440,582 3,528,205 - 2,621,723
Current tax liability 1,226,973 1,350,264 - -
Obligation under finance lease 6,844 7,522 6,844 7,522
6,219,352 9,752,682 1,451,620 3,998,451
Non-current liabilities
Obligation under finance lease 7,415 15,669 7,415 15,669
Total debt 6,226,767 9,768,351 1,459,035 4,014,120
Less: cash and bank balances 379,860 585,046 160,210 456,758
Net debt 5,846,907 9,183,305 1,298,825 3,557,362
Total equity 11,129,719 9,452,792 4,322,811 2,056,185
Net debt-to-adjusted capital ratio 53% 97% 30% 173%
7. SEGMENT INFORMATION
Management has determined the operating segments based on the reports reviewed by the chief operating decision maker, being
the chief executive officer, that are used to make strategic decisions.
Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment
performance focuses on types of goods or services delivered or provided. The Group's reportable operating segments are
summarised as follows:
- Security and surveillance
- Electrical and mechanical
(a) Segment revenues and results
The following is an analysis of the Group's revenue and results by operating segment:
Year ended 31 March 2014
Security and surveillance Electrical and mechanical Total
£ £ £
Segment revenue by major products and services:
- Construction contracts 5,634,350 71,158 5,705,508
- Maintenance contracts 2,564,746 - 2,564,746
- Product sales 655,706 - 655,706
Revenue from external customers 8,854,802 71,158 8,925,960
Segment profit/(loss) 3,018,730 (79,714) 2,939,016
Finance costs (20,787) - (20,787)
Profit/(loss) before income tax 2,997,943 (79,714) 2,918,229
Year ended 31 March 2013
Security and surveillance Electrical and mechanical Total
£ £ £
Segment revenue by major products and services:
- Construction contracts 4,528,152 53,798 4,581,950
- Maintenance contracts 2,382,445 - 2,382,445
- Product sales 349,030 - 349,030
Revenue from external customers 7,259,627 53,798 7,313,425
Segment profit/(loss) 509,740 (230,330) 279,410
Finance costs (37,727) - (37,727)
Profit/(loss) before income tax 472,013 (230,330) 241,683
7. SEGMENT INFORMATION (CONTINUED)
(b) Segment assets and liabilities
The following is an analysis of the Group's assets and liabilities by operating segment:
At 31 March 2014
Security and surveillance Electrical and mechanical Total
£ £ £
Segment assets 4,913,700 12,442,786 17,356,486
Unallocated assets - - -
Consolidated total assets 4,913,700 12,442,786 17,356,486
Segment liabilities 2,567,164 3,659,603 6,226,767
Unallocated liabilities - - -
Consolidated total liabilities 2,567,164 3,659,603 6,226,767
At 31 March 2013
Security and surveillance Electrical and mechanical Total
£ £ £
Segment assets 5,415,732 13,805,411 19,221,143
Unallocated assets - - -
Consolidated total assets 5,415,732 13,805,411 19,221,143
Segment liabilities 5,746,092 4,022,259 9,768,351
Unallocated liabilities - - -
Consolidated total liabilities 5,746,092 4,022,259 9,768,351
7. SEGMENT INFORMATION (CONTINUED)
(c) 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:
Year ended 31 March 2014
Security and surveillance Electrical and mechanical Total
£ £ £
Capital expenditure 16,002 - 16,002
Depreciation 49,086 - 49,086
Impairment loss recognised on goodwill - - -
Year ended 31 March 2013
Security and surveillance Electrical and mechanical Total
£ £ £
Capital expenditure 38,548 - 38,548
Depreciation 65,904 - 65,904
Impairment loss recognised on goodwill - - -
* Capital expenditure represented plant and equipment.
(d) 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.
(e) Information about major customers
Revenues of approximately £4,485,347 (2013: £3,619,984) are derived from three single external customers (2013: three), who
contributed to 10% or more of the Group's revenue for 2014 fiscal year.
8. OTHER INCOME
2014 2013
£ £
Interest income 1,293 1,516
Sundry income 9,225 9,412
10,518 10,928
9. OTHER GAIN AND (LOSS)
2014 2013
£ £
(Loss)/gain on disposal of plant and equipment (2,675) 510
Foreign exchange gains 7,601 6,337
Impairment loss recognised on trade and other receivables (99,907) (188,148)
Recovery from bad debts 44,617 -
Write-off of inventories (47,444) -
Gain from forgiveness of debts 2,496,353 -
2,398,545 (181,301)
10. EXPENSES BY NATURE
2014 2013
£ £
Cost of inventories recognised as expenses 3,342,475 2,396,205
Sub-contracting costs 2,264,316 1,839,705
Allowance for obsolete inventories 9,660 27,585
Depreciation - leased plant and equipment 10,742 10,813
Depreciation - owned plant and equipment 38,344 55,091
Operating lease charges - minimum lease payments 155,669 131,072
Research and development costs 11,037 11,134
Selling and distribution cost 24,039 20,406
Other expenses 664,191 625,004
Staff costs, including directors' remuneration
- Wages and salaries 1,766,704 1,631,047
- Pension scheme contributions 70,788 77,642
1,837,492 1,708,689
Auditor's remuneration
- audit services (parent company) 38,042 37,938
Total cost of sales, selling and distribution and administrative expenses 8,396,007 6,863,642
11. DIRECTORS' REMUNERATION
Directors' remuneration for the year is disclosed as follows:
Salaries, bonuses and allowances£ Pension scheme contributions£ 2014£
Executive directors
Stephen Sin Mo KOO - - -
Chun Pan WONG 49,102 1,216 50,318
Chun Hung WONG (resigned on 31 December 2013) 48,630 911 49,541
Danny Kwok Fai YIP 42,369 1,216 43,585
140,101 3,343 143,444
Non-executive director
Nicholas James LYTH 11,671 - 11,671
151,772 3,343 155,115
Salaries, bonuses and allowances£ Pension scheme contributions£ 2013£
Executive directors
Stephen Sin Mo KOO 39,158 571 39,729
Chun Pan WONG 45,399 1,183 46,582
Chun Hung WONG 61,502 1,183 62,685
Danny Kwok Fai YIP 40,545 1,183 41,728
186,604 4,120 190,724
Non-executive director
Nicholas James LYTH 11,748 - 11,748
198,352 4,120 202,472
12. FINANCE COSTS
2014 2013
£ £
Interest on bank loans and other borrowings wholly repayable within one year 19,623 36,366
Finance charge on obligation under finance lease 1,164 1,361
20,787 37,727
13. INCOME TAX IN THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(a) Income tax in the consolidated statement of comprehensive income:
2014 2013
£ £
Income tax expense
Hong Kong profits tax - -
PRC income tax - -
Taiwan income tax 13,499 57,278
13,499 57,278
No Hong Kong profits tax has been provided for in the financial statements as the Company has unused tax losses to offset
against its taxable profit during the year.
Taxes for subsidiaries are calculated using the rates prevailing in their local jurisdictions, whereas PRC income tax rate
is charged at 25% (2013: 25%) and Taiwan income rate is charged at 17% (2013: 17%).
(b) Reconciliation between income tax expense and accounting profit at the applicable tax rates:
2014 2013
£ £
Profit before income tax 2,918,229 241,683
Notional tax on profit before income tax, calculated at the rates applicable to profit in the tax jurisdictions concerned 480,655 61,865
Tax effect of non-taxable income (421,138) (6,806)
Tax effect of non-deductible expenses 25,064 53,970
Tax effect of temporary differences not recognised (2,341) (943)
Utilisation of tax losses unrecognised deferred tax assets (49,987) (36,431)
Tax losses not recognised as deferred tax assets - 27,797
Tax adjustments (18,754) (42,174)
Income tax expense 13,499 57,278
14. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the profit attributable to the equity shareholders of the Company
for the year of £2,820,587 (2013: £92,143), and the weighted average of 383,677,323 (2013: 383,677,323) ordinary shares in
issue during the year.
There were no potential dilutive instruments at either financial year end.
15. DIVIDENDS
(i) Dividends payable to equity shareholders of the Company attributable to the year:
2014 2013
£ £
Interim dividend declared and paid - -
Final dividend proposed after the end of the reporting period of £0.024 pence per ordinary share (2013: £0.063 pence per ordinary share) 92,571 242,558
The final dividend proposed after the end of the reporting period has not been recognised as a liability at the end of the
reporting period.
(ii) Dividends payable to equity shareholders of the Company attributable to the previous financial year, approved and
paid during the year
2014 2013
£ £
Final dividend in respect of the previous financial year, approved and paid during the year, of £0.063 pence per ordinary share (2013: Nil) 242,558 -
16. PLANT AND EQUIPMENT
The Group
Furniture and fixtures Computerequipment Motorvehicles Researchassets Total
£ £ £ £ £
Cost
At 1 April 2012 169,894 156,767 149,301 546,959 1,022,921
Additions 28,563 3,867 6,118 - 38,548
Disposals - - (10,426) - (10,426)
Foreign translation difference 8,642 7,556 7,339 24,235 47,772
At 31 March 2013 207,099 168,190 152,332 571,194 1,098,815
At 1 April 2013 207,099 168,190 152,332 571,194 1,098,815
Additions 9,049 6,953 - - 16,002
Disposals - (2,440) (6,079) - (8,519)
Foreign translation difference (22,693) (17,803) (15,009) (61,994) (117,499)
At 31 March 2014 193,455 154,900 131,244 509,200 988,799
Accumulated depreciation
At 1 April 2012 146,809 152,973 90,901 522,472 913,155
Charge for the year 19,178 2,675 23,584 20,467 65,904
Disposals - - (10,426) - (10,426)
Foreign translation difference 7,295 7,296 4,941 23,817 43,349
At 31 March 2013 173,282 162,944 109,000 566,756 1,011,982
At 1 April 2013 173,282 162,944 109,000 566,756 1,011,982
Charge for the year 17,487 3,854 23,528 4,217 49,086
Disposals - (2,440) (3,039) - (5,479)
Foreign translation difference (19,624) (17,114) (12,165) (61,773) (110,676)
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