REG - UniVision Eng Ltd - Final Results <Origin Href="QuoteRef">UVEL.L</Origin> - Part 3
10/09/2015 17:40
- Part 3: For the preceding part double click ID:nRSJ7397Yb
1. Bills receivable Certain customers pay accounts receivable with bills receivable from Taiwan banks with maturities less than twelve months. These are also referred to as "bankers" acceptances, which are unsecured, interest-free and to be matured in twelve months.
2. Loans Unsecured temporary advances to the subsidiaries, which are interest-free and eliminated upon consolidation.
3. Other receivables They include:
a. Retention receivable under warranty provision among certain construction contracts for a period of twelve months
b. Accrued income from maintenance contracts, which are billed or collected within twelve months.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8 Financial instruments (continued)
4.8.1 Financial assets (continued)
Impairment of loans and receivables
Loans and receivables are assessed for indicators of impairment at the end of each reporting period. Loans and receivables
are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after
the initial recognition of the loans and receivables, the estimated future cash flows of loans and receivables have been
affected.
Objective evidence of impairment could include:
• significant financial difficulty of the issuer or counterparty; or
• breach of contract, such as default or delinquency in interest and principal payments; or
• it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of loans and receivables, such as trade receivables, assets that are assessed not to be impaired
individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a
portfolio of receivables could include the Group's past experience of collecting payments, an increase in the number of
delayed payments in the portfolio past the average credit period and observable changes in national or local economic
conditions that correlate with default on receivables.
The amount of the impairment loss recognised is the difference between the asset's carrying amount and the present value of
the estimated future cash flows discounted at the loans and receivables' original effective interest rate.
The carrying amount of loans and receivables is reduced by the impairment loss directly for all loans and receivables with
the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. Changes
in the carrying amount of the allowance account are recognised in profit or loss. When a trade receivable is considered
uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are
credited to profit or loss.
If, in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss
to the extent that, the carrying amount of the loan and receivable at the date the impairment is reversed does not exceed
what the amortised cost would have been had the impairment not been recognised.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8 Financial instruments (continued)
4.8.2 Financial liabilities and equity instruments
Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity
instrument.
Equity instrument
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue
costs.
Financial liabilities
Financial liabilities (including trade and other payables and loan and borrowings) are subsequently measured at amortised
cost, using the effective interest method.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments (including all fees paid or received that form an integral part of the effective interest rate, transaction
costs and other premiums or discounts) through the expected life of the financial liability or, where appropriate, a
shorter period, to the net carrying amount on initial recognition. Interest expense is recognised on an effective interest
basis.
Derecognition
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of
the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive
income and accumulated in equity is recognised in profit or loss.
The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or
expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable is recognised in profit or loss.
4.8.3 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there
is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.9 Trade and other receivables
Trade and other receivables are initially recognised at fair value and thereafter stated at amortised cost less allowance
for impairment of bad and doubtful debts, except where the receivables are interest-free loans made to related parties
without any fixed repayment terms or the effect of discounting would be immaterial. In such cases, the receivables are
stated at cost less allowance for impairment of bad and doubtful debts.
4.10 Bank deposits
They represent bank deposits with maturities greater than three months, which are restricted as bank deposits held as
collateral for performance bonds issued by the bank to customers.
4.11 Cash and cash equivalents
In the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks and other
short-term highly liquid investments with original maturities of three months or less.
4.12 Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently stated at amortised cost unless the effect
of discounting would be immaterial, in which case they are stated at cost.
4.13 Interest-bearing borrowings
Interest-bearing borrowings are initially recognised at fair value less transaction costs. Subsequent to initial
recognition, the interest-bearing borrowings are stated at amortised cost with any difference between the amount initially
recognised and redemption value being recognised in the consolidated statement of comprehensive income over the period of
the borrowings together with any interest and fees payable using the effective interest method.
4.14 Share capital
Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.15 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and rendering of
services in the ordinary course of the Group's activities. Revenue is shown net of business tax, value-added tax, rebates
and discounts, and after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that
future economic will flow to the entity and when specific criteria have been met for each of the Group's activities as
described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the
sale have been resolved. The Group bases its estimates on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement.
(i) Construction contracts
Revenue from construction contracts is recognised when the outcome of a construction contract can be estimated reliably:
§ revenue from a fixed price contract is recognised using the percentage of completion method, measured by reference to
the percentage of contract costs incurred to date to estimated total contract costs for the contract; and
§ revenue from a cost plus contract is recognised by reference to the recoverable costs incurred during the period plus an
appropriate proportion of the total fee, measured by reference to the proportion that costs incurred to date bear to the
estimated total costs of the contract.
When the outcome of a construction contract cannot be estimated reliably, revenue is recognised only to the extent of
contract costs incurred that it is probable will be recoverable.
(ii) Maintenance contracts
Revenue from maintenance contracts is recognised on a straight line basis over the term of the maintenance contract.
(iii) Product sales
Revenue from product sales is recognised on the transfer of risks and rewards of ownership, which generally coincides with
the delivery of goods to customers and the passing of title to customers.
(iv) Interest income
Interest income is recognised as it accrues using the effective interest method.
(v) Dividend income
Dividend income from investments is recognised when the shareholder's right to receive payment has been established
(provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured
reliably).
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.16 Construction contracts
When the outcome of a construction contract can be estimated reliably, contract costs are recognised as an expense by
reference to the stage of completion of the contract at the end of the reporting period. When it is probable that total
contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. When the
outcome of a construction contract cannot be estimated reliably, contract costs are recognised as an expense in the period
in which they are incurred.
Contracts in progress at the end of the reporting period are recorded in the statement of financial position at the net
amount 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 plans.
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 year 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 end of the
reporting period 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 end of the reporting period 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 guarantees 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 loss and provisions are
recognised in accordance with (ii) below 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 distributions
Dividend distributions to the Company's shareholders are recognised as liabilities 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 and the Company'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 reviews 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 2015, the total carrying amount of
trade and other receivables was £4,323,003 (2014: £14,299,649).
(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 2015, the Group has unused tax losses of £4,746,391 (2014: £4,561,755) available for offset against future
profits. A deferred tax asset of £783,154 (2014: £752,681) 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
2015 2014
£ £
Financial assets:
Loans and receivables
- Trade and other receivables 4,323,003 14,299,649
- Bank deposits 251,641 223,865
- Cash and bank balances 1,221,707 379,860
Financial liabilities:
- Trade and other payables 3,242,616 4,544,953
- Loan and borrowings 1,122,052 440,582
- Obligation under finance lease 8,335 14,259
(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. 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
2015 2014 2015 2014 2015 2014 2015 2014
NTD 123,413,717 77,729,425 100,013,562 56,222,390 - - - -
RMB 1,129 113,969,896 5,009,660 42,914,220 - - 5,009,660 5,081,515
USD 54,560 23,444 21,320 - - - - -
HK$ 34,982,030 29,993,818 19,577,077 12,218,181 34,980,407 28,884,579 ` 19,481,353 12,034,097
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 Sterling against the relevant foreign
currencies and all other variables were held constant. 5% (2014: 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 end of the reporting period for a 5% (2014: 5%) change in foreign
currency rates. A positive/(negative) number indicates a decrease/(increase) in post-tax profit/(loss) for the year when
Sterling strengthens 5% (2014: 5%) against the relevant foreign currencies. For a 5% (2014: 5%) weakening of Sterling
against the relevant currency, there would be an equal but opposite impact on the post-tax profit/(loss) for the year.
2015 2014
£ £
NTD
Post-tax profit for the year 26,609 22,310
RMB
Post-tax (loss)/profit for the year (28,670) 361,753
USD
Post-tax profit for the year 1,188 746
HK$
Post-tax profit for the year 70,595 72,468
(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 note
25. 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 end of the reporting period and on the assumption that the amount
outstanding at the end of the reporting period was outstanding for the whole year and held constant throughout the
financial year. The 25 basis points increase or decrease represents the Management's assessment of a reasonably possible
change in interest rates over the period until the next fiscal year. The analysis is performed on the same basis for
2014.
For the year ended 31 March 2015, 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 £2,117 (2014: £1,425).
(ii) Credit risk
At 31 March 2015, 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 when 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 end of the
reporting period, 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 end of the reporting period.
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 2015, the
Group had aggregate banking facilities of £2,412,189 (2014: £2,194,840), of which £1,290,137 were unused (2014:
£1,754,258).
The following table details the contractual maturities of the Group's and the Company's financial liabilities at the end of
the reporting period, 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
2015
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 2015
% £ £ £ £ £
Non-derivative financial liabilities:
Loan and borrowings 3.64% - 3.76% 1,127,117 - - 1,127,117 1,122,052
Trade and other payables 3,242,616 - - 3,242,616 3,242,616
Obligations under finance lease 3.25% 8,944 745 - 9,689 8,335
4,378,677 745 - 4,379,422 4,373,003
Financial guarantee
Maximum amount guaranteed - - - - -
6. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
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
Obligations 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 7,860,000 - - 7,860,000 7,860,000
The Company
2015
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 2015
% £ £ £ £ £
Non-derivative financial liabilities:
Loan and borrowings - - - - -
Trade and other payables 2,257,803 - - 2,257,803 2,257,803
Obligations under finance lease 3.25% 8,944 745 - 9,689 8,335
2,266,747 745 - 2,267,492 2,266,138
6. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
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
Obligations 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
(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
and cash equivalents. Adjusted capital comprises all components of equity less unaccrued proposed dividends.
6. FINANCIAL INSTRUMENTS (CONTINUED)
(d) Capital risk management (continued)
During 2015, the Group's strategy, which was unchanged from 2014, 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
2015 2014 2015 2014
£ £ £ £
Current liabilities
Trade and other payables 3,242,616 4,544,953 2,257,803 1,444,776
Loan and borrowings 1,122,052 440,582 - -
Current tax liability 34,442 1,226,973 - -
Obligation under finance lease 7,694 6,844 7,694 6,844
4,406,804 6,219,352 2,265,497 1,451,620
Non-current liabilities
Obligation under finance lease 641 7,415 641 7,415
Total debt 4,407,445 6,226,767 2,266,138 1,459,035
Less: cash and bank balances 1,221,707 379,860 1,044,484 160,210
Net debt 3,185,738 5,846,907 1,221,654 1,298,825
Total equity 5,641,264 11,129,719 4,823,282 4,322,811
Net debt-to-adjusted capital ratio 56% 53% 25% 30%
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 #
# Electrical and mechanical business was discontinued in the current year and demerged from the Group by distribution of a
dividend in specie to its shareholders on 31 March 2015 (see note 31).
(a) Segment revenues and results
The following is an analysis of the Group's revenue and results by operating segment:
Year ended 31 March 2015
Security and surveillance Electrical and mechanical # Total
£ £ £
Segment revenue by major products and services:
- Construction contracts 3,334,783 51,129 3,385,912
- Maintenance contracts 2,778,722 - 2,778,722
- Product sales 600,486 - 600,486
Revenue from external customers 6,713,991 51,129 6,765,120
Segment profit/(loss) 156,590 (30,657) 125,933
Finance costs (26,401) - (26,401)
Profit/(loss) before income tax 130,189 (30,657) 99,532
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
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 2015
Security and surveillance Electrical and mechanical # Total
£ £ £
Segment assets 10,048,709 - 10,048,709
Unallocated assets - - -
Consolidated total assets 10,048,709 - 10,048,709
Segment liabilities 4,407,445 - 4,407,445
Unallocated liabilities - - -
Consolidated total liabilities 4,407,445 - 4,407,445
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
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 2015
Security and surveillance Electrical and mechanical # Total
£ £ £
Capital expenditure 35,554 - 35,554
Depreciation 36,172 - 36,172
Year ended 31 March 2014
Security and surveillance Electrical and mechanical # Total
£ £ £
Capital expenditure 16,002 - 16,002
Depreciation 49,086 - 49,086
* 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 £1,695,699 (2014: £4,485,347) are derived from one single external customers (2014: three), who
contributed to 10% or more of the Group's revenue for 2015 fiscal year.
8. OTHER INCOME
2015 2014
£ £
Interest income 1,223 1,293
Sundry income 1,703 9,225
2,926 10,518
9. OTHER GAINS AND LOSSES
2015 2014
£ £
Gain/(loss) on disposal of plant and equipment 155 (2,675)
Foreign exchange gains 1,588 7,601
Impairment loss recognised on trade and other receivables (40,594) (99,907)
Recovery from bad debts (note 21(a)) 16,508 44,617
Reversal of allowance for obsolete inventories 25,427 -
Write-off of inventories - (47,444)
Gain from forgiveness of debt - 2,496,353
3,084 2,398,545
10. EXPENSES BY NATURE
2015 2014
£ £
Cost of inventories recognised as expenses 2,215,363 3,342,475
Sub-contracting costs 1,582,967 2,264,316
Allowance for obsolete inventories - 9,660
Depreciation - leased plant and equipment 8,835 10,742
Depreciation - owned plant and equipment 27,340 38,344
Operating lease charges - minimum lease payments 138,273 155,669
Research and development costs 13,204 11,037
Selling and distribution cost 23,678 24,039
Other expenses 700,968 664,191
Staff costs, including directors' remuneration
- Wages and salaries 1,717,344 1,766,704
- Pension scheme contributions 98,171 70,788
1,815,515 1,837,492
Auditor's remuneration
- audit services (parent company) 37,268 38,042
Total cost of sales, selling and distribution and administrative expenses 6,563,411 8,396,007
11. DIRECTORS' REMUNERATION
Directors' remuneration for the year is disclosed as follows:
Salaries, bonuses and allowances Pension
- More to follow, for following part double click ID:nRSJ7397YdRecent news on UniVision Engineering
See all newsREG - UniVision Eng Ltd - Further re Winding up Petition - Petition Granted
AnnouncementREG - UniVision Eng Ltd - Further re Winding up petition - Hearing adjourned
AnnouncementREG - AIM UniVision Eng Ltd - Suspension - Univision Engineering Limited
AnnouncementREG - UniVision Eng Ltd - Publication of Annual Report and Accounts delayed
AnnouncementREG - UniVision Eng Ltd - Further re Winding up petition – Hearing adjourned
Announcement