REG - UniVision Eng Ltd - Final Results <Origin Href="QuoteRef">UVEL.L</Origin> - Part 4
29/10/2014 09:27
- Part 4: For the preceding part double click ID:nRSE9910Qc
At 31 March 2014 171,145 147,244 117,324 509,200 944,913
Net book value
At 31 March 2014 22,310 7,656 13,920 - 43,886
At 31 March 2013 33,817 5,246 43,332 4,438 86,833
At 31 March 2014, the net book value of motor vehicle held under finance lease of the Group and the Company was £8,556
(2013: £20,683).
16. PLANT AND EQUIPMENT (CONTINUED)
The Company
Furniture andfixtures Computerequipment Motorvehicles Total
£ £ £ £
Cost
At 1 April 2012 12,992 32,612 57,958 103,562
Additions 445 3,330 6,118 9,893
Disposals - - - -
Foreign translation difference 773 2,038 3,630 6,441
At 31 March 2013 14,210 37,980 67,706 119,896
At 1 April 2013 14,210 37,980 67,706 119,896
Additions 4,305 1,410 - 5,715
Disposals - - (6,079) (6,079)
Foreign translation difference (1,471) (3,481) (5,824) (10,776)
At 31 March 2014 17,044 35,909 55,803 108,756
Accumulated depreciation
At 1 April 2012 11,673 30,098 24,993 66,764
Charge for the year 415 1,571 13,095 15,081
Disposals - - - -
Foreign translation difference 695 1,816 2,019 4,530
At 31 March 2013 12,783 33,485 40,107 86,375
At 1 April 2013 12,783 33,485 40,107 86,375
Charge for the year 1,008 2,173 13,313 16,494
Disposals - - (3,039) (3,039)
Foreign translation difference (1,196) (3,110) (4,065) (8,371)
At 31 March 2014 12,595 32,548 46,316 91,459
Net book value
At 31 March 2014 4,449 3,361 9,487 17,297
At 31 March 2013 1,427 4,495 27,599 33,521
17. GOODWILL
The Group
£
Cost
At 31 March 2013 and 2014 961,845
Less: accumulated impairment loss
At 31 March 2013 and 2014 936,015
Net carrying amount
At 31 March 2013 and 2014 25,830
Impairment test for cash-generating unit containing goodwill
Goodwill is allocated to the Group's cash-generating unit ("CGU") identified according to operating segment as follows:
2014 2013
£ £
Security and surveillance 25,830 25,830
The recoverable amount of the CGU is determined based on value-in-use calculations. These calculations use cash flow
projections based on financial budgets approved by management covering a twelve month period. A discount rate of 15% has
been used for the value-in-use calculations.
Key assumptions used for value-in-use calculations:
2014 2013
Gross margin 20% 25%
Growth rate 11% 13%
Management determined the budgets based on their experience and knowledge in the construction contracts operations. The
discount rate used is pre-tax and reflects specific risks relating to the relevant segment.
Based on the impairment test performed, no impairment loss is recognised for the year (2013: Nil).
18. INTERESTS IN SUBSIDIARIES
2014 2013
£ £
Unlisted shares, at cost 1,053,475 1,053,475
Less: impairment loss (1,201,190) (1,201,190)
Add: foreign translation difference 161,537 161,537
13,822 13,822
Amounts due from subsidiaries 7,213,254 7,979,454
Less: impairment loss (4,459,285) (4,900,355)
Add: foreign translation difference (514) 803
2,753,455 3,079,902
Total 2,767,277 3,093,724
Amounts due from subsidiaries are unsecured, interest-free with no fixed term of repayment and hence are classified as
non-current as these are not expected to be recoverable within the next twelve months.
The following list contains the particulars of subsidiaries which principally affected the results, assets and liabilities
of the Group at 31 March 2014:
Name Place of incorporation andoperations Issued andfully paid upshare capital/registered capital Percentageof equityheld bythe Company Principalactivities
Directly Indirectly
T-Com Technology Co Limited Taiwan NT$80,000,000Ordinary share 52.25% - Supply, design, installation and maintenance of closed circuit television and surveillance systems and the sale of security system related products
Leader Smart Engineering Limited Hong Kong HK$10,000Ordinary share 100% - Investment holding and engineering contractor
Leader Smart Engineering (Shanghai) Limited The PRC US$1,000,000Registered capital - 100% Supply, design, installation and maintenance of electrical and mechanical systems, construction decorations and provision of engineering consultancy services
Note: Leader Smart Engineering (Shanghai) Limited ("LSSH") is a wholly-foreign owned enterprise established in the
PRC to operate for 20 years up to 2025.
19. INVENTORIES
The Group The Company
2014 2013 2014 2013
£ £ £ £
Raw materials 300,238 327,168 300,238 327,168
Work in progress 490 365 - -
Finished goods 878,454 931,783 444,143 475,995
1,179,182 1,259,316 744,381 803,163
Less: impairment loss (120,117) (124,569) - -
1,059,065 1,134,747 744,381 803,163
The Group recognised a provision for obsolete inventories of £9,660 (2013: £27,585) on slow-moving inventories.
20. CONTRACTS-IN-PROGRESS
The Group The Company
2014 2013 2014 2013
£ £ £ £
Contract costs incurred plus attributable profits less foreseeable losses 30,934,302 31,130,690 13,957,023 13,281,207
Progress billings to date (17,397,940) (16,068,072) (13,621,970) (13,198,376)
13,536,362 15,062,618 335,053 82,831
Represented by:
Amounts due from customers for contracts-in-progress 14,404,193 15,885,794 964,673 619,646
Less: allowance for doubtful debts (377,670) (415,066) (145,515) (159,908)
Amounts due from customers for contracts-in-progress, net (note 21) 14,026,523 15,470,728 819,158 459,738
Amounts due to customers for contracts-in-progress(note 23) (490,161) (408,110) (484,105) (376,907)
13,536,362 15,062,618 335,053 82,831
At 31 March 2014, the amount of retention receivables from construction customers recorded within "trade and other
receivables" is £52,689 (2013: £22,112).
Within amounts due from customers for construction contracts-in-progress are receivables totalling £10,828,836 (2013:
£11,901,827), which have been pledged as security by the original land use rights certificate and the developing property
of the customer in LSSH and expected to be collected within twelve months.
21. TRADE AND OTHER RECEIVABLES
The Group The Company
2014 2013 2014 2013
£ £ £ £
Trade receivables 1,414,152 1,254,491 760,300 551,822
Less: allowance for doubtful debts (469,128) (637,847) (57,942) (240,929)
Trade receivables, net 945,024 616,644 702,358 310,893
Other receivables 404,973 638,220 244,476 530,104
Deposits and prepayments 247,460 417,087 102,824 136,396
Amounts due from customers for contracts-in-progress, net (note 20) 14,026,523 15,470,728 819,158 459,738
15,623,980 17,142,679 1,868,816 1,437,131
Less: non-current portion - amounts due from customers for contracts-in-progress (1,324,331) (1,436,027) - -
14,299,649 15,706,652 1,868,816 1,437,131
All of trade and other receivables are expected to be recovered within one year, other than those separately disclosed.
(a) Impairment of trade receivables
Impairment losses in respect of trade receivables are recorded using an allowance account unless the Group is satisfied
that recovery of the amount is remote, in which case the impairment loss is written off against trade receivables directly.
Movements in the allowance for doubtful debts:
The Group The Company
2014 2013 2014 2013
£ £ £ £
At 1 April 637,847 584,602 240,929 227,710
Impairment loss recognised 99,907 184,190 - -
Written off against trade receivables (213,396) (162,923) (168,779) -
Foreign translation difference (55,230) 31,978 (14,208) 13,219
At 31 March 469,128 637,847 57,942 240,929
Note: At 31 March 2014, trade receivables of the Group and the Company amounting to £99,907 (2013: £184,190) and Nil
(2013: Nil) respectively are individually determined to be impaired and an impairment was provided. These individually
impaired receivables were outstanding over one year at year end.
21. TRADE AND OTHER RECEIVABLES (CONTINUED)
(b) Trade receivables that are not impaired
The following is an ageing analysis of trade receivables at 31 March 2014 and 2013 that were past due but not impaired:
The Group The Company
2014 2013 2014 2013
£ £ £ £
0 to 90 days 786,137 497,928 615,258 292,375
91 to 365 days 126,401 37,603 80,155 18,518
Over 365 days 32,486 81,113 6,945 -
945,024 616,644 702,358 310,893
Receivables that were past due but not impaired relate to a number of independent customers that have a good track record
with the Group. Based on past experience, management believes that no impairment allowance is necessary in respect of these
balances as there has not been a significant change in credit quality and the balances are still considered fully
recoverable. The Company does not hold any collateral over these balances.
22. CASH AND BANK BALANCES
(a) Cash and cash equivalents
The Group The Company
2014 2013 2014 2013
£ £ £ £
Cash at bank and on hand 310,805 550,782 160,210 456,758
Restricted cash * 69,055 34,264 - -
Cash and cash equivalents in the consolidated and the Company's statement of cash flows 379,860 585,046 160,210 456,758
* At 31 March 2014, the Group maintained £69,055 (2013: £34,264) as restricted cash held at bank as security against the
banking facility (note 25).
(b) Bank deposits
At 31 March 2014, £223,865 (2013: £246,008) are restricted deposits held at bank with maturities greater than three months,
as a pledge for performance bonds in respect of construction contracts undertaken by the Group and the Company.
The effective interest rate on bank deposits was 0.41% per annum (2013: 0.53%).
(c) Cash and bank balances are denominated in the following currencies:
The Group The Company
2014 2013 2014 2013
£ £ £ £
AUD 350 431 350 431
CAD 813 962 813 962
GBP 115 281 115 281
HKD 380,702 647,774 374,209 641,358
JYP 70 83 70 83
NTD 211,460 120,468 - -
RMB 475 522 - -
USD 9,740 60,533 8,518 59,651
603,725 831,054 384,075 702,766
23. TRADE AND OTHER PAYABLES
The Group The Company
2014 2013 2014 2013
£ £ £ £
Trade payables 1,978,634 2,329,100 67,577 48,325
Bills payable 236,528 125,359 - -
Due to a related party (note 29(b)) 37,017 42,376 - -
Accruals and other payables 1,500,009 1,629,158 893,094 943,974
Deferred income on financial guarantees issued (note 31) 302,604 332,588 - -
Amounts due to customers for contracts-in-progress (note 20) 490,161 408,110 484,105 376,907
4,544,953 4,866,691 1,444,776 1,369,206
24. INCOME TAX IN THE STATEMENT OF FINANCIAL POSITION
(a) Current tax liability in the statement of comprehensive income represents:
The Group The Company
2014 2013 2014 2013
£ £ £ £
Hong Kong profits tax - - - -
PRC income tax 1,144,800 1,258,234 - -
Taiwan income tax 82,173 92,030 - -
1,226,973 1,350,264 - -
(b) Unrecognised deferred tax assets
At 31 March 2014, the Company had unused tax losses of £4,561,705 (2013: £5,331,538) that were available for offset against
future taxable profits of the Company. No deferred tax assets have been recognised due to the unpredictability of the
future profit streams. Such unused tax losses are available to be carried forward at no expiration.
No provision for deferred tax liabilities has been made in the financial statements as the tax effect of temporary
differences is immaterial to the Group and the Company.
25. LOAN AND BORROWINGS
The Group The Company
2014 2013 2014 2013
£ £ £ £
Within one year or on demand:
Secured bank loans (note a) 440,582 906,482 - -
Loan from a former shareholder (note b) - 2,621,723 - 2,621,723
440,582 3,528,205 - 2,621,723
Notes:
(a) The secured bank loans carried interest at rates ranging from per annum (2013: 3.39% to 3.91% per annum) and were
secured by:-
(i) Restricted cash (note 22) and;
(ii) Personal guarantee by the Chairman of the Company, Mr. Stephen Sin Mo KOO (note 29(c)).
(b) A loan of US$5,000,000 was provided on 31 December 2007 by Mayne Management Limited ("Mayne"), the former ultimate
controlling party of UniVision Holdings Limited, which previously owned a 47.9% equity interest of the Company. The loan
facility is used exclusively to finance a major construction project in the PRC.
On 15 December 2011, Mayne agreed with the Company to forgive the accrued interest totalling US$2.865 million and US$1.0
million of the outstanding principal. The remaining loan balance became interest-free and was repayable by 31 March 2014.
Security over the Group's interest in a shopping mall contract within the PRC has been provided. On 19 February 2014, Mayne
agreed with the Company to waive all rights to the repayment of any and all loan principal and interest payable under the
Loan Agreement.
26. OBLIGATION UNDER FINANCE LEASE
At 31 March 2014 and 2013, the Group and the Company had an obligation under finance lease as follows:
Minimum lease payment Present value of the minimum lease payment
2014 2013 2014 2013
£ £ £ £
Within one year 7,956 8,744 6,844 7,522
Between two to five years 8,620 18,215 7,415 15,669
Total minimum finance lease payments 16,576 26,959 14,259 23,191
Less: future finance charges 2,317 3,768
Present value of lease obligation 14,259 23,191
27. SHARE CAPITAL
2014 2013
£ £
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 (2013: 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. EMPLOYEE RETIREMENT BENEFITS
(a) The Company operates a Mandatory Provident Fund scheme (the "MPF scheme") under the Hong Kong Mandatory Provident Fund
Schemes Ordinance for employees employed under the jurisdiction of the Hong Kong Employment Ordinance. The MPF scheme is a
defined contribution retirement scheme administered by independent trustees. Under the MPF scheme, the employer and its
employees are each required to make contributions to the scheme at 5% of the employees' relevant income, subject to a cap
of monthly relevant income of HK$25,000 (HK$20,000 prior to June 2012). Contributions to the MPF scheme vest immediately.
(b) The subsidiary in the PRC participates in a defined contribution scheme organised by the local government. These
subsidiaries are required to make contributions at certain prescribed rates of the relevant PRC employees' salaries to the
scheme. Contributions to the scheme vest immediately.
(c) Employees of the subsidiary in Taiwan chose to participate in a defined contribution scheme governed by the Labour
Pension Act of Taiwan. This subsidiary contributes at 6% of the total salaries of the participating employees who have
chosen to participate in the defined contribution scheme, the contribution deposited into individual pension accounts at
the Bureau of Labour Insurance of Taiwan.
Save as set out above, the Group has no other material obligations to make payments in respect of retirement benefits of
the employees.
29. RELATED PARTY TRANSACTIONS
Compensation of key management personnel
The remuneration of the key management of the Group during the year was as follows:-
2014 2013
£ £
Salaries, bonus and allowances 243,431 284,533
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 former ultimate
controlling party of UniVision Holdings Limited, which previously owned a 47.9% equity interest in the Company. Effective
from 15 December 2011, the principal amount was reduced to US$3,974,360 upon the forgiveness of certain accrued interest
and principal. The balance became interest-free and to be matured on 31 March 2014 (note 25(b)). On 19 February 2014, Mayne
agreed with the Company to waive all rights to the repayment of any and all principal and interest outstanding under the
Loan Agreement. The Company owed US$3,948,000 to Mayne before the cancellation of debt, which is treated as gain from
forgiveness of debt under other income in the statement of comprehensive income.
(b) At 31 March 2014, there is a payable balance of £37,017 (2013: £42,376) due to Mr. Stephen Sin Mo KOO, the director
of the Company, which is unsecured, interest-free and repayable on demand (note 23).
(c) At 31 March 2014, the bank facilities amounting to £946,068 (2013: £1,061,247) are personally guaranteed by the
director of the Company, Mr. Stephen Sin Mo KOO, which remained unused. No charge has been requested for this guarantee
(note 25(a)).
Apart from the transactions disclosed above and elsewhere in the financial statements, the Group and the Company had no
other material transactions with related parties during the year.
30. COMMITMENTS
(a) Capital commitments
At 31 March 2014, the Group and the Company has no material capital commitments outstanding.
(b) Operating lease commitments
At 31 March 2014, the total future minimum lease payments under non-cancellable operating leases for the office and
warehouse premises are payable as follows:
The Group The Company
2014 2013 2014 2013
£ £ £ £
Within one year 114,174 60,728 70,036 19,074
Between two to five years 11,308 6,080 4,441 -
125,482 66,808 74,477 19,074
31. FINANCIAL GUARANTEE
In accordance with those certain supplemental agreements on the Sales and Purchase Contract regarding Zhongshan shopping
mall project dated 10 December 2009, the Group's wholly-owned subsidiary, LSSH provided a guarantee in respect of secured
short-term financing arrangement with a maximum amount of up to £7.9 million (including outstanding principal and accrued
interest and charges) at the date of report. Pursuant to the terms of the guarantee, at any time from the date of
guarantee, in event of default in repayments, the Group is fully liable to repay the outstanding loan principal, together
with penalty charges, accrued interest and related late fees, after netting off the pledged assets. The Group's guarantee
period starts from the date of grant of the financial arrangement and ends when it is fully repaid. At 31 March 2014, the
secured short-term loan has become overdue and the financial arrangement is in negotiations for extension, but has not yet
reached a final agreement as to repayment of the borrowings.
In connection with Zhongshan shopping mall project ("Zhongshan Project"), the Group is secured by certain beneficial
interest in Zhongshan Project on a recourse basis. At 31 March 2014, the fair market value of the Zhongshan Project
amounted to £29 million, based on the appraisal report issued by an independent valuer. At 31 March 2014, the Company
expects their interest in Zhongshan Project to be transferred to a committed purchaser at the consideration of RMB110
million (approximately £11 million), together with the contingent liability under the financial guarantee, in the next
twelve months. Hence, no additional provision of financial guarantee liabilities is required and the provision is expected
to be reversed upon the subsequent sale of Zhongshan Project.
2014 2013
£ £
Financial guarantee issued 302,604 332,588
32. LEGAL PROCEEDINGS
Up to the date of this report, the Group has received several legal claims against its wholly-owned subsidiary and the
Company from its vendors in China in connection with the transactions previously entered into by the former director of
LSSH. The Group plans to file counter-claims to the Court against the former director of LSSH for all costs and
compensations in respect of these legal claims. At this point, the Group and the Company does not believe that these legal
proceedings would have a material impact or result in significant contingencies to the Group and the Company, therefore no
provision for any costs has been made.
33. CONTINGENT LIABILITIES
At 31 March 2014, the directors of the Company do not consider it is probable that any significant claims will be made
against the Group and the Company under these guarantees and legal proceedings.
34. POSSIBLE IMPACT OF NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE FOR THE YEAR ENDED 31 MARCH 2014
The requirements of Part 9, "Accounts and Audit", of the new Hong Kong Companies Ordinance (Cap. 622) come into operation
from the Group and the Company's first financial year commencing after 3 March 2014 (i.e. the Company's financial year
which began on 1 April 2014) in accordance with section 358 of that Ordinance. The Group and the Company is in the process
of making an assessment of the expected impact of the changes in the Companies Ordinance on the consolidated financial
statements in the period of initial application of Part 9. So far it has concluded that the impact is unlikely to be
significant and will primarily only affect the presentation and disclosure of information in the consolidated financial
statements.
35. EVENTS AFTER THE REPORTING DATE
(i) On 4 August 2014, the Company, among Guangzhou Hua Xin Trading Company Ltd ("Hua Xin") and Guangzhou Jun Heng
Mechanical and Electrical Equipment Company Limited ("Jun Heng"), an affiliate of Hua Xin, entered into a supplementary
agreement ("the agreement") in conjunction with the agreements dated 22 June 2012 and 21 August 2013. The agreement
stipulated that Hua Xin and Jun Heng agreed to continue and commit to complete the purchase of the Company's interest in
the Zhongshan Project.
The first hearing of the Guangzhou Arbitration Commission, (the "Commission") in relation to the dispute was heard on 14
June 2013 during which the Commission requested that all relevant parties provide it with further documentation relating to
the dispute. Since that date there have been further hearings. The Commission will consider if it has sufficient
information to constitute to a binding contract at a later date. Up to date of this report, the outcome from arbitration
over the Zhongshan Project is still ongoing. The evidence stage was completed and the dispute is in the provision of
verification stage by the Commission.
(ii) After the end of the reporting period the directors proposed a final dividend. Further details are disclosed in
note 15(i).
36. COMPARATIVE FIGURES
Certain comparative figures in these financial statements have been re-classified to conform to the current year's
presentation
37. APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved and authorised for issue by the Board of Directors on 5 September 2014.
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 2014 Annual General Meeting (AGM) 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 3 October
2014 at 5:00 p.m. The following businesses will be transacted then:
As ordinary business:
1. To receive and adopt the Company's audited financial statements for the financial year ended 31 March 2014 together
with the Directors' report and the Independent Auditor's report;
2. To declare a final dividend for the financial year ended 31 March 2014.
3. To re-elect Mr. Nicholas James LYTH who retired by rotation, as a Non-Executive Director of the Company;
4. To re-elect Mr. Chun Pan WONG who retired by rotation, as a Director of the Company;
5. To elect Mr. Peter Yip Tak CHAN as a Director of the Company;
6. To reappoint auditor HKCMCPA Company Limited, Certified Public Accountants, (formerly known as ZYCPA Company Limited)
as auditors of the Company, to hold office from the conclusion of the meeting to the conclusion of the next meeting, during
which accounts will be laid before the Company and to authorize the Directors to adjust their remuneration packages;
7. That the directors of the Company be and are hereby generally and unconditionally authorized to exercise all powers of
the Company to allot 'Ordinary Shares' the capital of the Company. Such authority (unless and to the extent previously
revoked, varied or renewed by the Company during the general meeting) to expire 15 months after the date of the passing of
such resolution or on the conclusion of the Company's next AGM to be held, following the date of passing such resolution,
whichever occurs first, save that the Company may before such expiry make any offer or agreement which would or might
require Ordinary Shares to be allotted after such expiry, and that the Directors may allot Ordinary Shares in pursuance of
such an offer or an agreement as if such authority had not expired. This authority substitutes all subsisting authorities
to the extent unused.
8. That the directors of the Company be and are hereby generally and unconditionally authorized to exercise all powers of
the Company to repurchase the 'Ordinary Shares' in the capital of the Company, including any form of depositary receipt.
Such authority (unless and to the extent previously revoked, varied or renewed by the Company during the general meeting)
to expire 15 months after the date of the passing of such resolution or on the conclusion of the Company's next AGM to be
held, following the date of passing such resolution, whichever occurs first, save that the Company may before such expiry
make any offer or agreement which would or might require Ordinary Shares to be repurchased after such expiry, and that the
Directors may buy back Ordinary Shares in pursuance of such an offer or an agreement as if such authority had not expired.
As special business:
To approve and adopt the alternation and amendments of Articles of Associations according to the New Companies
Ordinance in Hong Kong and all Articles shall be renumbered accordingly, and that any Director or the Company Secretary of
the Company be and is hereby authorised to do all things necessary to effect and record the amendments to the Articles of
Associations.
It was noted that pursuant to s98 of the New Companies Ordinance, conditions that were contained in the Memorandum of
Association of the Company had been regarded as provisions of the Company's Articles of Association.
NOTICE OF ANNUAL GENERAL MEETING
This proposed business to be approved by a special resolution. Details of the proposed amendments to the Articles of
Associations are set out in the Appendix to this Notice.
By Order of the Board Registered office:
Mr. Stephen Sin Mo KOO 8/F Lever Tech Centre,
Executive Chairman 69-71 King Yip Street
Kwun Tong, Kowloon,
5 September 2014 Hong Kong.
NOTES:
1. Only holders of Ordinary Shares, or their duly appointed representatives, are entitled to attend and vote at the
Annual General Meeting. A member so entitled may appoint one or more proxies (whether they are members or not) to attend
and, on a poll, to vote in place of the member.
2. A form of proxy is enclosed with this notice. To be valid, the form of proxy and any power of attorney or other
authority (if any) under which it is signed, or a notarized and certified copy of that power of authority, must be lodged
with the Company's registrars, c/o Computershare Investor Services Plc., The Pavilions, Bridgwater Road, Bristol BS99 6ZY,
not less than 48 hours before the Annual General Meeting takes place.
3. Completion and return of a proxy does not preclude a member from attending and voting at the Annual General Meeting.
4. The Company pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 specifies that only those
shareholders registered in the Register of Members of the Company as of 1 September 2014 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.
APPENDIX
This Appendix sets out the proposed amendments to the Articles of Associations:
Article 1
(1) By deleting the heading "Table A" appearing immediately above Article 1;
(2) By deleting Article 1 in its entirety and replaced by a new Article 1:
"1. No regulations contained in The Companies (Model Articles) Notice (Cap. 622H) shall apply to the Company".
Article 2
(1) By deleting the words "Chapter 32" and replaced by the words "Chapter 622" in the definition of "Companies
Ordinance", and in the heading of the Articles;
(2) By deleting the words "and includes stock except where a distinction between stock and shares is expressed or
implied" at the end of the definition "share";
(3) By deleting the words "section 2(1)" and replaced by the words "section 357" in the definition of "summary financial
report";
(4) By adding the following new definition for "connected entity":
"shall have the same meaning as that for "an entity connected with a director or former director of a company" set out in
Section 486(1) of the Companies Ordinance";
(5) By deleting the words "profit and loss account" and "balance sheet" whenever they appear in the definition of "Annual
Report" and replaced by the words "statement of comprehensive income" and statement of financial position" respectively;
(6) By deleting the words "Article 152" and replaced by the words "Article * " in the definition of "Annual Report";
(7) By deleting the definition of "newspaper" in its entirety and replaced by a new definition:
"shall mean a newspaper published daily and circulating generally in Hong Kong and specified from time to time in the list
of newspapers issued and published in the Gazette by the Secretary for administrative service and information"
Article 3A
(1) By deleting Article 3A in its entirety and replaced by a new Article 3A:
"Without prejudice to any special rights previously conferred on the holders of any shares or class of shares already
issued (which special rights shall not be modified or abrogated except with such consent or sanction as is provided by the
next following Article) any share in the Company (whether forming part of the original capital or not) may be issued with
such preferred, deferred, or other special rights, or such restrictions, whether in regard to dividend, return of capital,
voting or otherwise, as the Company may from time to time by ordinary resolution direct, or, failing such direction, as the
Board shall by resolution determine. Subject to the provisions of the Ordinance the Company may issue preference shares
which are, or which at the option of the Company or the holder are liable, to be redeemed, on such terms and in such manner
as the Directors before the issue thereof may determine."
Article 3B
(1) By deleting the words "Where warrants are issued to bearer, no new warrant shall be issued to replace one that has
been lost unless the Board is satisfied beyond reasonable doubt that the original has been destroyed."
Article 5
(1) By deleting the words "(including without limitation the powers under section 49B and, if the Company is a listed
company (as defined in the Companies Ordinance), section 49BA of the Companies Ordinance)".
Article 6
(1) By deleting the words "all the shares for the time being authorised shall have been issued or" in the first and
second lines; inserting the word "including" before the words "by the creation of new Shares" in the fourth line; deleting
the words "to be of such amount and to be divided into shares of such respective amounts" in the last two lines and
replaced by the words "to be divided into such number of shares".
Article 8
(1) By deleting the words "and either at par or at a premium," in the third line.
Article 10
(1) By deleting the words "(and in particular Section 57B thereof)" in the first line;
(2) By deleting the words "all unissued shares in the Company shall be at the disposal of the Board, which" in the second
and third lines and replaced by the words "the Board";
(3) By deleting the words "but so that no shares shall be issued at a discount, except in accordance with the provisions
of the Ordinance" in the fifth line.
Article 16
(1) By deleting the words "Section 73A of" in the fourth line;
Article 34
By deleting the words "whether on account of the nominal value of the share and/or by way of premium," in the second and
third lines.
Article 58
By deleting the words "whether on account of the nominal value of the share or by way of premium", in the third and fourth
lines.
Articles 59, 60, 61 and 62
By deleting the heading "Stock" and Articles 59, 60, 61 and 62 in their entirety.
Article 63
(1) Article 63(A)(I) - by deleting the words "shares of larger or smaller amount" and replaced by the words "a larger or
smaller number of shares" in the first and second lines; deleting the words "any consolidation of fully paid shares into
shares of larger amount" in the second and third lines and replaced by the words "any consolidation of fully paid shares
into a smaller number of shares";
(2) Article 63(A)(II) - by deleting the word "and" at the end of this paragraph;
(3) Article 63(A)(III) - by deleting the words "shares of smaller amount than is fixed by the Memorandum of Association"
in the first and second lines and replaced by the words "a larger number of shares"; deleting the words "unissued or" and
the full-stop in the last line; and by adding the word "; and" at the end of this paragraph;
(4) By adding the following new article as Article 63(A)(IV): "(IV) generally alter its share capital in any one or more
of the ways permitted under the Companies Ordinance.".
(5) Article 63(B) - by deleting the words ", any capital redemption reserve fund or any share premium account" in the
first and second lines.
Article 64
By adding the words "(or such shorter period as prescribed by legislation)" after the words "fifteen months" in the third
line.
Article 65
By deleting it in its entirety.
Article 66
By deleting the words "an extraordinary general meeting" and replaced by the words "a general meeting (other than an annual
general meeting)" in the first and second lines; and deleting the word "extraordinary" in the second line and replaced by
the word "such"; and deleting the words "section 113 of" in the sixth and tenth lines.
Article 67
By deleting the words "and, in the case of special business, the general nature of that business," in the seventh and
eighth lines.
Article 69
By deleting it in its entirety.
Article 74
By deleting the word "one-tenth" and replaced by the word "one-twentieth" in the second line
of (C) and fourth line of (D) respectively.
Article 79A
By deleting in the fifth line the words "section 115 of"; inserting a full stop immediately after the word "vote"; deleting
the words ", and on" and replaced by the following:
"To the extent permitted by legislation, a member may appoint more than one proxy. The proxies so appointed are not
entitled to vote on the resolution on a show of hands. On"
Article 84
By adding the words "(To the extent permitted by legislation)" before the words "A member" in the fifth line; and by adding
the words "The proxies so appointed are not entitled to vote on a show of hands." at the end of the Article.
Article 86
(1) By inserting the sub-paragraph numbering "a." before the words "48 hours before the time for holding the meeting" in
the fifth line;
(2) By inserting the following as a new sub-paragraph b. immediately after the words "at which the person named in such
instrument proposes to vote" in the sixth line:
"or
b. 24 hours before the time appointed for the taking of a poll in the case of a poll taken more than 48 hours after it
was demanded;"
Article 100
Amending Article 100 in the following manner:
By deleting Article 100(F) in its entirety and replaced by a new Article 100(F):
"100. (F) No Director or intended Director shall be disqualified by his office from contracting with the Company, directly
or indirectly, either as vendor, purchaser or otherwise nor shall any such contract or any contract, arrangement or
transaction entered into by or on behalf of the Company with a Director or any of his associate(s) or his connected
entities (as defined under the Ordinance) (together as his "connected person(s)" for the purpose of this Article) be
capable on that account of being avoided, nor shall any Director be liable to account to the Company for any profit
realised by any such contract, arrangement or transaction provided always that each Director shall forthwith disclose the
nature and extent of his interest or that of his connected person(s) in any contract, arrangement, or transaction in which
he or any of his connected person(s) is interested as required by and subject to the provisions of the Ordinance and other
applicable legislation."
By deleting the first two lines of Article 100(H) ending with the words "or any of his associate(s)" in their entirety and
replaced by the following:
"(H) A Director shall not vote on any board resolution approving any such contract, arrangement or transaction in which he
or any of his connected person(s)"
By deleting the word "associate(s)" and replaced by the words "connected person(s)" whenever it appears in Article 100;
Article 112(B)(I)
By deleting the words "at par or at such premium" in the last two lines.
Article 134(A)
By adding the words "To the extent permitted under the Ordinance," in the beginning of the first line.
By inserting a full-stop immediately after the words "right to dividend)" in the seventh line; deleting the words "and
accordingly that such sums may be set free" immediately thereafter, and replaced by the words "Accordingly, such sums may
be set free for use as permitted under the Ordinance including".
By deleting the word "unissued" in the thirteenth line.
By inserting a full-stop after the words "such resolution" in the sixteenth line; and deleting all words appearing
thereafter.
Article 134(B)
By adding the words "(where applicable") after the words "be capitalized thereby, and" in the third line.
Article 135
By deleting it in its entirety.
Articles 140(A)(I)(d) & (II)(d)
By deleting the words "other than the Subscription Rights Reserve or Conversion Rights Reserve or Capital Redemption
Reserve Fund (if there be any such Reserves)" in the twelfth to fifteenth lines of Articles 140(A)(I)(d) and in the
eleventh to fourteenth lines of Articles 140(A)(II)(d) respectively.
Article 155(A)
By deleting the words "Section 141CF(1) of" in the fifth line.
Article 170(A)
By deleting the words "sub-section (2) of Section 165 of" in the fourth line.
Article 170(B)
By deleting the words "section 165 of" in the first line.
This information is provided by RNS
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