Final Results for the year ended 31 March 2021

RNS Number : 8853K

UniVision Engineering Ltd

06 September 2021

 

This announcement contains inside information as stipulated under the UK version of the Market Abuse Regulation No 596/2014 which is part of English Law by virtue of the European (Withdrawal) Act 2018, as amended.  On publication of this announcement via a Regulatory Information Service, this information is considered to be in the public domain

For immediate release

6 S eptember 2021

UniVision Engineering Limited

("UniVision" or "the Company" or "the Group")

Final Results for the year ended 31 March 2021

UniVision (AIM: UVEL), the Hong Kong based group whose principal activities are the supply, design, installation and maintenance of closed-circuit television and surveillance systems, and the sale of security related products, today announces its audited final results for the financial year ended 31 March 2021.

The Annual General Meeting of the Company will be held at UniVision Engineering Limited, Unit 201, 2/F., Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong, on 30 September 2020 at 5:00 p.m.

The full Annual Report and Accounts together with the Notice of AGM will shortly be posted to shareholders and be made available on the Company's website, www.uvel.com .

Highlights:

· Turnover increased to £10.9m (2020: £10.7m);

· Profit before income tax increased t o £563K (2020 £452K);

· Cash flow generated from operations £34K (2020: negative £111K);

· Total Equity attributable to shareholders: £8.2m (2020: £8.7m);

· Current ratio 1.6 (2020: 1.8);

· Earnings per share 0.15p (2020: 0.12p); and

· Proposed final dividend HK0.26 cents (approx. 0.0243 pence) per share (2020: HK0.55 cents).

For further information visit www.uvel.com or contact :

UniVision Engineering Limited	Tel: [phone]
Stephen Koo, Chairman	www.uvel.com
Danny Kwok Fai Yip, Finance Director
Nicholas Lyth, Non-Executive Director	Tel: [phone]

SPARK Advisory Partners Limited (Nominated Adviser)	Tel: [phone]
Mark Brady / Neil Baldwin	www. sparkadvisorypartners.com
SI Capital Limited (Broker)	Tel:  [phone] www.sicapital.co.uk
Nick Emerson

CHAIRMAN'S STATEMENT

I am pleased to report the Company's audited results for the financial year ended   31 March 2021.

Turnover for the year increased by 4.3 % (underlying rate) to £ 10.9m (2020: £ 10.7m ). This in crement was mainly due to the 4% increase in   construction contracts which came from the project of Upgrading of CCTV System on Campus in City University of Hong Kong and the project for replacement of system works for MTR C orporation ("MTRC") of Hong Kong. The Coronavirus has hindered the installation plans for a period, however it gradually returned to normal in the second half of the current financial year. 

Profit attributable to the equity shareholders for the year is £563K (2020: £452K).  

To reward and thank our shareholders for their support, the Board recommends the payment of a final dividend of 0.26 HK cents per share (2020: 0.55 HK cents).

The increasing concern for enhanced security and surveillance, such as installation of additional cameras and also facial recognition technology, is the main driver for the growth of video s urveillance market. Therefore , I am optimistic about the prospects of the Company.

In the remainder of this report, I shall go into further details of our order book relating to the Major Contract , financial review , business review, and end with prospect statement .  

The Major Contract With MTRC

The contract with MTRC for the replacement works of the Closed-Circuit Television (CCTV) systems for numerous MTRC railway lines remains the major driver for the business of the Company since it was awarded to UniVision in May 2017. The Company is responsible for replacing t he existing analogue CCTV system installed in the stations along the specified lines by a new Internet Protocol-based, digital CCTV system. At inception, the Major Contract's expected completion date was November 2023. However, with further additional orders and supplementary agreements added subsequently, the Board now expects that the work on the Major Contract is unlikely to complete in full until July 2024.

The Major Contract allows for regular billing completed and certified. The MTRC Contract also allows for variation of orders.   With further agreed add-ons since May 2017, the total current value of this contract has increased to HK$489.7 million (approximately £48.2 million at current exchange rates) spread over six year and nine months period, with an expected completion date of July 2024. Up to the financial year ended 31 M arch 2021, UniVision has invoiced a total of approximately HK$172.7m, leaving a further order book of HK$317m to be billed over the remaining period. The gross valuation of certified works on the Major Contract was HK$199.8m up to 31 March 2021.

To control the project cost, the Company is working with its suppliers and sub-contractors to ensure that we get reliable supply and competitive credit terms. With China Rail Group, the Company's strategic partner, providing the subcontracting works for certain lines of the Major Contract, it ensures the adequate supply of skilled personnel and also more cost effective than local sources.

The Board also closely monitors the Company's working capital to be certain that we have adequate financial resources to drive the Major Contract to completion. The Company reviews its financial position all the time and seeks additional and/or more sources of funding, as may be appropriate, including but not limited to capital market and banking facilities.

Potential Claim

As previously announced, t he Company received a writ of summons (Statement of Claim), Hong Kong High Court Action No. 2090 of 2020, from the solicitors of Dimension Data China Hong Kong Limited ("Dimension Data"), the Plaintiff, on 14 December 2020 alleging breach of contract, claiming against the Company for liquidated damages for an amount of HK$10.95m plus pre-judgment and post-judgment interest and legal costs. The Company has cross claim against Dimension Data , inter alia, for breach of contract and/or negligence and/or misrepresentation and accordingly to claim for loss and damages for the same and legal costs.

The Board does not consider that the claim has any foundation and believes that Dimension Data was in breach of protocol in the manner which it has brought this claim. The Defence and Counterclaim was filed to the High Court on 24 February 2021. The solicitors of Dimension Data filed the Reply and Defence to Counterclaim on 28 July 2021.

Based on legal opinion, the said Action has reached the stage of close pleadings, whereas parties are expected to enter into statutory mediation in due course. Whether the parties might reach a settlement out of court would depend on the course of mediation and other factors. Up to the date of this report, no mediation between the Company and Dimension Data has been conducted.

Financial Review 

Highlights of Statement of Profit or Loss and Other Comprehensive Income are:

· Revenue increased by 4.3 % to £1 0.9 m in the reporting period (2020: £ 10.7 m). This revenue increase came mainly from contributions of construction contracts that increased by 4% as compared with last year. The majority of this increment came from the project to upgrade of CCTV System on Campus in City University of Hong Kong.

· Revenue from c onstruction contracts, the Group's largest business segment, represented 82.7% of the total income (2020: 82.9% ) . Revenue from maintenance contracts represented 15 .1 % of the total income (2020: 15.2% ) for the Company. 

· Other construction contracts besides the Major Contract, including the installation, relocation, modification and replacement works that provided by MTRC also contributed significant income.

· Contribution from maintenance contracts was up by 3.7%, compared to the prior year. The increase in maintenance contracts was mainly due to the additional repairs orders for damaged Public Address System at certain stations of MTRC.

· The gross profit remained stable at £ 2 m in the reporting period (2020: £ 2 m), however, our gross margin was 17.9 % which was lower than that of last reporting period (2020: 19.4 %) . The main reason for the de crease in gross profit margin in the Group's maintenance contracts by 9.6%. The increased subcontracting charges and internal manpower pushed up costs, leading to an increase in operating cost for the maintenance contracts with MTRC in the current financial year. Moreover, the outbreak of COVID-19 decelerated the progress of existing projects, resulting in an increase in overhead costs and subcontracting costs. On the other hand, t he Company adopted measures to control the operating cost with its suppliers and subcontractors.

· The underlying profit for the current year was £170K (2020: £452K ) which excluded other income from Hong Kong Government Employment Support £386K for the month of June to November 2020, £4.9K from Construction Industry Council "Anti-Epidemic Fund", and £2K subsidy from Transport Department. Total amount for the anti-epidemic relief from Hong Kong Government and public organization was £393K.

· Our operating expenses were mainly a dministration expenses. For the year, administrative expenses increased by 14% to £ 1.73m (2020: £ 1.52m). These were caused by the increased headcount and associated personnel expenses (salaries, annual leave expenses, provident fund), The number of staff has increased from 73 to 79 during the reporting period. In addition, rental expenses increased due to renting one new office, increased repairs and maintenance fees, electricity charges and legal fees. 

· Profit before tax increased to £563K in the reporting period (2020: £452K) nevertheless experienced the lower gross profit and rising operating expenses.

· The Company has unused tax losses to offset the taxable profit for the year. I can report that the profit attributable to the shareholders of the Company also increased to £563K for the financial year ended 31 March 2021, compared to £452K for the last financial year.

· As a result of increase in profit attributable to shareholders, basic earnings   per share in creased to 0.15 p for this reporting financial year (2020: 0.12 p).

On the Statement of Financial Position , the highlights are:

· Contract assets in creased to £8.4m as at 31 March 20 21 , from £6.2m as at 31 March 2020, mainly due to the longer time applying for billing, particularly for the Major Contract that due to more installation works performed in this current year that of last year which most billing for delivery of equipment. Also, the "Work from home" policy of government departments and MTRC due to outbreak of t he COVID-19 pandemic has caused delays in the process of certification and led to slow billing to MTRC and the Hong Kong Government.  

· Cash and cash equivalents stood at £284 K as at 31 March 20 21 (2020: £679K), representing a de crease of £ 395K.

· Total equity attributable to shareholders stood at £ 8.2 m as at 31 March 20 21 (As at 31 March 2020: £8.7m), or a decrease of £546 K, mainly due to the loss of £902 K on exchange differences on translation of financial statements from HK$ to £, the reporting currency .

· Deposit placed for a life insurance policy of £862 K as at 31 March 20 21, which is the value of the keyman insurance plan placed as security for banking facilities provided by a banker to the Company.

· Bank borrowings of £562 K as at 31 March 20 21 (2020: £682K) represents the loan provided by a banker for financing a certain portion of the premium for the insurance policy as above mentioned.

On the Statement of Cash Flow s , the highlights are:

· The Company generated positive cash flow from operations of £34 K in the reporting period (2020: negative £111K ).

· The Board attributes this improvement to closer monitoring and effective control of working capital, together with more efficient use of our banking facilities.

· Repayment of bank loans of £54 K.

During the year under review, a relative strengthening in the HK$ at the year-end has led to a 11.3% appreciation in the GBP reporting amount in the Statement of Financial Position . It led to the significant non-cash other comprehensive loss of £902 K (2020: gain £549 K ) on exchange differences arising on translation of foreign operations.

All figures in the above require to be adjusted for comparison purposes. All comparative percentages stated in the Chairman's Statement are adjusted to show the underlying change (net of translation effect on foreign exchange).

To consistent with the Company's dividend policy, the Board has proposed the payment of a final dividend of 0.26 HK cents (gross) per share for the financial year ended 31 March 2021 (2020: 0.55 HK cents). Dividend timetable is as follows:

Ex date:    16 September 2021

Record date:    17 September 2021

Payment date:   15 October 2021

Payment of the dividend is subject to the approval by the shareholders at the upcoming Annual General Meeting.

Business Review

I will include the following topics in this section: our addressable market segments, business environment in which we operate, our customer base, new business and segment and the management strategy for the next reporting period.

Addressable Market Segments

According to the M arket Research Report by Mordor Intelligence : Video Surveillance System Market-Growth, Trends, COVID-19 Impact and Forecast (2021 - 2026), the video surveillance systems market is expected to grow at a CAGR of 9.31% over the forecast period 2021 to 2016 though the economic consequence of t he COVID-19 pandemic will undoubtedly hit the professional video surveillance market to a certain extent. On the other hand, Asia Pacific Region is regarded as the fast growing market. This market has gro wn significantly due to its increasing use in the field of security and law enforcement, to reduce the crime rate in their countries. The Board believes that our addressable market segment will undergo a steady growth period

The use of video s urveillance in business is growing significantly due to the increasing need for physical security, the growth in adoption of AI, coupled with the use of cloud-based services for centralized data. The growth of the video s urveillance market is expected to be fuelled by the introduction of new IP-based digital technologies, to detect and prevent undesirable behaviour, such as shoplifting, thefts, vandalism, and terror arracks.

Video s urveillance systems are increasingly used for many applications, such as crime prevention, tracking consumer behaviour, monitoring industrial processes and traffic management. The commercial sector is expected to be the largest market share during the forecast period. Growing focus on infrastructure protection, public security and increasing demand for high resolution imaging are other key factors driving the market.

The Board can see growing demand for wireless monitoring networking and wireless infrastructure (such as IP and 5G) as the key growth driver for the market. There is growing demand for wireless monitoring solution particularly the remote s urveillance with 5G mobile technology. The advantage of 5G technology for CCTV to overcome the latency issue that people may have encounter in the past. Moreover, such new solutions can provide better video quality and efficiency for remote monitoring . The Board expects to see more potential projects for deployment of 5G CCTV solutions.  

The technology of v ideo analytics, such as facial recognition , is being enhanced rapidly and UniVision has actively participated in this market, such as t he contract for supply and installation of the video analytic monitoring system at Tai Tam Correctional Institution. The video analytic solution of Smart Prisons is designed to enhance the effectiveness of movement detection in confined areas. In the case of abrupt massive movement or the unusual stillness of people, it can automatically detect and identify abnormal incidents at any time. This effective detection tool facilitates early intervention and prevents any potentially dangerous acts which can save people from injury. The Company won a Silver Medal for its "Smart Prison -Video Analytic Monitoring System" Invention at the 2021 Geneva International Exhibition of Invention.

Under the Major Contract, the Company acts as network service provider in the application of CCTV systems. It has provided the channel for the Company entering the business as a provider of network service and information technology in the application in other fields. 

Business Environment

COVID-19 has seriously affected the business environment in Hong Kong in last year. It caused adverse effects on the Hong Kong economy, particularly in the retail and tourism sectors. Nevertheless, the demand for upgrades the video s urveillance system, such as facial recognition capabilities, is rising.

Unlike the hotel, travel, catering, retailing sectors, COVID-19 has not seriously affected the Company's business. Nevertheless, as mentioned at the first part, for a period ot time, it hindered the installation plans and affected the revenue.  

Additional work orders for replacement of damaged CCTV equipment caused by vandalism increased job orders and revenue from maintenance contracts for the Company. We anticipate that the Company will see more business opportunities with MTRC for new projects. MTRC has announced its new railway development including the following new railway lines and extensions: -

· South Island Line (West)

· Northern Link

· Tung Chung Line Extension

· Tuen Mun South Extension

· North Island Line

· East Kowloon Line

· Hung Shui Kiu Station  

Customer base

MTRC remains the Company's largest customer this financial year, representing 78.7% of the Company's total revenue. In addition, Electrical and Mechanical Services Department ("EMSD") and other commercial clients are also parts of our customer base.

EMSD and other departments of Hong Kong Government are other sources of the Company's customer base. The Company is on the list in the category of Approved Specialist Contractors for Public Works: Video Electronics Installation. It indicates that UniVision is a qualified public works provider who enables to comply with the financial, technical and management criteria for the retention on the list of specialist contractors. 

To avoid the concentration of customers, the Company aims to diversify its customer base particularly to the private sector, such as sizeable multinational private enterprises.

New business

The Board always explores other potential business opportunities particularly in the Electrical and Mechanical ("E&M") business. Indeed, the Company has set up a new company called Vision Key International Limited in September 2020 for tendering potential projects outside Hong Kong. The Board is also actively considering setting up a branch or office in U.K. to expand its core business in the coming year.

Our Strategy

Given the above market, business opportunities, and customer base analysis, I see three key future objectives:

· Financial: To deliver the MTRC Contract and other potential large-scale projects efficiently and profitably, the Company engages committed subcontracting partners with technical and financial strength to minimise the risks associated with working capital for sizeable contract. The Board considers this outreach to be both desirable and prudent for the Company's further growth in the market.

· Technology: The Company will continue to acquire skills in networking and wireless technology area and software skills for video analytics and facial recognition applications, to help provides customisation and localisation for our clients. Additional network engineers will be recruited to achieve the above objectives. We will also co-operate with the high qualified vendors, research institutes and market-leading specialists in these technology areas to help us acquire new contracts.

· People: Human Resources is one of the most valuable resources in the Company. In facing the high demand for the Major Contract, the Company will continue to equip the project managers and officers, together with the experienced engineers and system designers with technical skills to deliver the contract effectively and actively in tendering new contracts.

Prospects

UniVision has been incorporated in Hong Kong for over 41 years. It is a milestone that signifies the Company's longevity and good standing in the security and surveillance business. The Company's core competency relies on UniVision's brand name; and its dedicated, experienced people.

The Board expect s that high demand in security and surveillance market will provide the ground and opportunity for the Company to grow.   Given our sizable order book, especially with the Major Contract , the Company will derive constant revenue for the next few reporting periods. The Board will continuously monitor c osts to generate profits attributable to shareholders .  

The COVID -19 pandemic has caused an unprecedented challenge across the world  which has dampened economic activity. Facing uncertainties, the Company hope the development of COVID -19 vaccines and recent mass vaccination can control the pandemic and facilitate the economy recovery. 

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

MR. STEPHEN SIN MO KOO

EXECUTIVE CHAIRMAN

6 September 20 21

 

UNIVISION ENGINEERING LIMITED

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 March 2021

	Notes		2021		2020
			£		£
Revenue	7(a)		10,945,287		10,728,544
Cost of revenue	10		(8,986,278)		(8,647,222)
Gross profit			1,959,009		2,081,322
Other income	8		422,560		36,905
Other gains and losses, net	9		(33,476)		(11,049)
Selling and distribution expenses	10		(4,570)		(30,503)
Administrative expenses	10		(1,706,160)		(1,529,749)
Finance costs	12		(74,009)		(95,243)
Profit before income tax			563,354		451,683
Income tax	13		-		-
Profit for the year			563,354		451,683
Other comprehensive (loss)/income, net of tax
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translation of financial statements			(901,758)		548,560
Total comprehensive (loss)/incomefor the year			(338,404)		1,000,243
Earnings per share- Basic and Diluted	14		0.15p		0.12p

 

UNIVISION ENGINEERING LIMITED

STATEMENT OF FINANCIAL POSITION

As at 31 March 2021

	Notes		2021		2020
			£		£
ASSETS
Non-current assets
Plant and equipment	16		99,014		135,121
Right-of-use assets	17		61,092		276,119
Interest in an associate	18		5		-
Amounts due from related companies	30		2,842,805		3,157,799
Deposit placed for a life insurance policy	19		862,476		941,772
Prepayments			48,981		76,017
Total non-current assets			3,914,373		4,586,828
Current assets
Inventories	20		1,584,096		1,034,289
Tradeand other receivables	21		1,708,489		2,406,863
Contract assets	22		8,439,488		6,243,276
Cash and bank balances	23		284,354		980,238
Total current assets			12,016,427		10,664,666
Total assets			15,930,800		15,251,494
LIABILITIES AND EQUITY
Current liabilities
Tradeand other payables	24		5,179,172		3,824,759
Contract liabilities	25		1,572,245		1,316,446
Bank borrowings	27		561,535		682,486
Lease liabilities	26		42,959		213,288
Total current liabilities			7,355,911		6,036,979
Non-current liabilities
Amount due to a related company	24		393,074		437,500
Lease liabilities	26		21,924		70,877
Total non-current liabilities			414,998		508,377
Total liabilities			7,770,909		6,545,356
Capital and reserves
Share capital	28		3,890,257		3,890,257
Reserves			4,269,634		4,815,881
Total equity			8,159,891		8,706,138
Total liabilities and equity			15,930,800		15,251,494

The financial statements contained in the Annual Report & Accounts were authorised for issue by the board of directors on 6 September 2021 and were signed on its behalf by:

Stephen Sin Mo KOO, Director

Yip Tak CHAN, Director

 

UNIVISION ENGINEERING LIMITED

STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2021

	Share capital		Retained earnings		Special capital reserve "A"		Special capital reserve "B"		Translation reserve		Total
	£		£		£		£		£		£
					(Note 1)		(Note 2)
Balance at1 April 2019	3,890,257		2,211,100		155,876		143,439		1,517,670		7,918,342
Profit for the year	-		451,683		-		-		-		451,683
Other comprehensive income, net of tax
Exchange difference arising on translation of financial statements	-		-		-		-		548,560		548,560
Total comprehensive income	-		451,683		-		-		548,560		1,000,243
Dividend paid in respect of year 2019 (Note 15)	-		(212,447)		-		-		-		(212,447)
Total transactions with owners, recognised directly in equity	-		(212,447)		-		-		-		(212,447)
Balance at 31 March 2020	3,890,257		2,450,336		155,876		143,439		2,066,230		8,706,138
Profit for the year	-		563,354		-		-		-		563,354
Other comprehensive loss, net of tax
Exchange difference arising on translation of financial statements	-		-		-		-		(901,758)		(901,759)
Total comprehensive loss	-		563,354		-		-		(901,758)		(338,405)
Dividend paid in respect of year 2020 (Note 15)	-		(207,843)		-		-		-		(207,842)
Total transactions with owners, recognised directly in equity	-		(207,843)		-		-		-		(207,842)
Balance at 31 March 2021	3,890,257		2,805,847		155,876		143,439		1,164,472		8,159,891

The currency translation from Hong Kong dollar to the presentation currency of Sterling Pound of these financial statements has no impact on the available distributable reserves of the Company as at 31 March 2021.

Notes:

1.  Special capital reserve "A"

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

2.  Special capital reserve "B"

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

UNIVISION ENGINEERING LIMITED

STATEMENT OF CASH FLOWS

For the year ended 31 March 2021

	Notes		2021		2020
			£		£
Cash flows from operating activities
Profit before income tax			563,354		451,683
Adjustments for:
Interest expense on bills payable and factoring	12		49,479		61,501
Interest expense on bank borrowings	12		12,805		21,205
Interest expense on bank overdraft	12		4,682		-
Interest on lease liabilities	12		7,043		12,537
Interest income	8		(26,773)		(36,905)
Depreciation of plant and equipment	16		55,607		56,694
Depreciation of right-of-use assets	17		173,933		179,977
Inventories written-off	9		32,787		-
Gain on lease modification	8		(122)		-
Gain on disposal of plant and equipment	9		-		(201)
Operating cash flows before working capital changes			872,795		746,491
Changes inoperating assets and liabilities:
Prepayments and deposit			(17,191)		25,731
Inventories			(721,932)		(336,416)
Tradeand other receivables	34		640,547		37,560
Contract assets			(2,978,477)		(2,341,199)
Amounts due from related companies			(5,959)		378,665
Trade and other payables			1,834,113		1,093,686
Contract liabilities			409,884		284,685
Net cash generated from/(used in)operating activities			33,780		(110,797)
Cash flows from investing activities
Interest received	8		26,773		36,905
Purchase of plant and equipment			(32,048)		(39,498)
Proceeds from disposal of plant and equipment			-		201
Deposit placed for a life insurance policy			-		(910,199)
Net cash used ininvesting activities			(5,275)		(912,591)
Cash flows from financing activities
Bank interest paid	12		(66,966)		(82,706)
Dividend paid to shareholders of the Company	15, 34		(65,653)		(67,109)
Repayment of bank loans	31		(54,355)		-
New bank loans	31		-		659,606
Capital element of lease liabilities paid	31		(177,430)		(172,201)
Interest element of lease liabilities paid	31		(7,043)		(12,537)
Net cash (used in)/generated fromfinancing activities			(371,447)		325,053
Net decrease in cash and cash equivalents			(342,942)		(698,335)
Cash and cash equivalents at beginning of year			679,186		1,312,211
Effect of foreign exchange rate changes, net			(51,890)		65,310
Cash and cash equivalents at end of year	23		284,354		679,186

UNIVISION ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 March 2021

1.  GENERAL INFORMATION

UniVision Engineering Limited (the "Company") is incorporated in Hong Kong with limited liability and its shares are listed on the Alternative Investment Market of the London Stock Exchange ("AIM").  The address of the Company's registered office is Unit 201, 2/F., Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong.

These financial statements are presented in Sterling Pound ("£"), which is the presentation currency of the Company.

The Company is mainly engaged in the supply, design, installation and maintenance of closed circuit television and surveillance systems and the sale of security system related products in Hong Kong.

2 .   B ASIS OF PREPARATION

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS s ") issued by the International Accounting Standards Board. The measurement basis used in the preparation of these financial statements is the historical cost basis.

The preparation of financial statements in conformity with IFRS s requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgements made by management in the application of I FRS s that have significant effect on the financial statements and key sources of estimation uncertainty are discussed in note 5 to the financial statements.

3.  APPLICATION OF NEW AND REVISED IFRSs

(a)  Initial application of IFRSs

In the current year, the Company initially applied the following IFRSs:

Amendments to I FRS 3	Definition of a Business
Amendments to I AS 1 and I AS 8	Definition of Material
Amendments to I FRS 9, I AS 39   and I FRS 7	Interest Rate Benchmark Reform
Conceptual Framework for   Financial Reporting 2018	Revised Conceptual Framework for Financial Reporting

The initial application of these financial reporting standards does not necessitate material changes in the C ompany's accounting policies and retrospective adjustments of the comparatives presented in these financial statements.

3.  APPLICATION OF NEW AND REVISED IFRSs

(b)  IFRSs in issue but not yet effective

The following IFRSs in issue at 31 March 202 1 have not been applied in the preparation of these financial statements since they were not yet effective for the annual period beginning on 1 April 20 20 :

IFRS 17	Insurance Contracts2
Amendments to IFRS 3	Definition of Business 2
Amendments to I AS 16	Property, Plant and Equipment: Proceeds before Intended   Use2
Amendments to I AS 37	Onerous Contracts - Cost of Fulfilling a Contract2
Amendments to I AS 39, I FRS 4, I FRS 7, I FRS 9 and I FRS 16	Interest Rate Benchmark Reform - Phase 22
Annual Improvements to I FRSs 2018-2020 Cycle	Revised Conceptual Framework for Financial Reporting 2
Amendments to IFRS 16	COVID-19-Related Rent Concession1
Amendments to I AS 1	Classification of Liabilities as Current or Non-current 3
Amendments to I FRS 10 and   I AS 28	Sale or Contribution of Assets between an Investor and its   Associate or Joint Venture 4

¹  Effective for the Company's annual financial statements beginning on 1 April 202 1

²  Effective for the Company's annual financial statements beginning on 1 April 2022

³  Effective for the Company's annual financial statements beginning on 1 April 202 3

⁴  Effective for the annual periods beginning on or after a date to be determined

The Company is in the process of making an assessment of what the impact of these amendments, new standards and interpretations is expected to be in the period of initial application.

4.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1  Segment reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incurs expenses, including revenue and expenses that relate to transactions with other components of the Company. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.

4.2  Foreign currency

Functional and presentation currency

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (the "functional currency"), which is Hong Kong Dollar ("HK$"). These financial statements are presented in Sterling Pound ("£"), which is the Company 's presentation currency. As the Company is listed on the AIM, the directors consider that this presentation is more useful for its current and potential investors.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured.  Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.

4.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   (CONTINUED)

4.3  Plant and equipment

Plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment loss. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use.

On disposal of an item of plant and equipment, the difference between the net disposal proceeds and its carrying amount is taken to profit or loss.

Depreciation is calculated using the straight-line method to allocate their depreciable amounts over the estimated useful lives as follows:

Furniture and fixtures	3 - 5 years
Computer equipment	2 - 5 years
Motor vehicles	3 years

Fully depreciated plant and equipment are retained in the financial statements until the items are no longer in use.

The residual values, useful lives and depreciation method are reviewed at the end of each reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of plant and equipment. The effects of any revision are recognised in profit or loss when the changes arise.

Subsequent expenditure relating to plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in profit or loss when incurred.

4.4  Interest in an associate

Associate is an entity in which the Company has significant influence, but not control or joint control, over its management, including participation in the financial and operating policy decisions.

The results and assets and liabilities of the associate are incorporated in these financial statements using the equity method of accounting.  Under the equity method, interest in an associate is initially recorded at cost, adjusted for any excess of the Company's share of the acquisition-date fair values of the investee's identifiable net assets over the cost of the investment. The cost of the investment includes purchase price, other costs directly attributable to the acquisition of the investment, and any direct investment into the associate that forms part of the Company's equity investment. Thereafter, the investment is adjusted for post-acquisition changes in the Company's share of e investee's net assets and any impairment loss relating to the investment.  When the Company's share of losses of the associates equals or exceeds its interest in that associate (which includes any long-term interests that, in substance, form part of the Company's net investments in the associates), the Company discontinues recognising its share of further losses.  An additional share of losses is provided for and a liability is recognised only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of that associate.

Unrealised profits and losses resulting from transactions between the Company and its associates are eliminated to the extent of the Company's interest in the investee, except where unrealised losses provide evidence of an impairment of the asset transferred, in which case they are recognised immediately in profit or loss.

4.5  Impairment of non-financial assets

The carrying amounts of non-current assets, including plant and equipment and right-of-use assets, are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated.

Calculation of recoverable amount

The recoverable amount of an asset is the greater of its fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit).

Recognition of impairment losses

An impairment loss is recognised in profit or loss if the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds the recoverable amount. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs of disposal (if measurable) or value in use (if determinable).

Reversals of impairment losses

An impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount. A reversal of an impairment loss is limited to the asset's carrying amount that would have been determined had no impairment loss been recognised in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised.

4.6  Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method and comprises design costs, raw materials, direct labour, other direct costs and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

4.7  Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value except for trade receivables arising from contracts with customers which are initially measured in accordance with IFRS 15. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.

4.7.1  Financial assets

Classification and subsequent measurement of financial assets

Financial assets that meet the following conditions are subsequently measured at amortised cost:

-  the financial asset is held within a business model whose objective is to collect contractual cash flows; and

-  the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All other financial assets are subsequently measured at fair value through profit or loss.

Impairment of financial assets

The Company recognises a loss allowance for ECL on financial assets and other assets which are subject to impairment under IFRS 9. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition.

Lifetime ECL represents the ECL that will result from all possible default events over the expected life of the relevant instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events that are possible within 12 months after the reporting date. Assessments are done based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current conditions at the reporting date as well as the forecast of future conditions.

The Company always recognises lifetime ECL for trade receivables and contract assets. The ECL on these assets is assessed individually for debtors with significant balances and/or collectively using a provision matrix with appropriate groupings. For all other instruments, the Company measures the loss allowance equals to 12-month ECL, unless when there has been a significant increase in credit risk since initial recognition, the Company recognises lifetime ECL. The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition.

In assessing whether the credit risk of a financial instrument has increased significantly since initial recognition, the Company compares the risk of default occurring on the financial instrument assessed at the reporting date with that assessed at the date of initial recognition. In making this reassessment, the Company considers that a default event occurs when (i) the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or (ii) the financial asset is 90 days past due. The Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort.

In particular, the following information is taken into account when assessing whether credit risk has increased significantly since initial recognition:

-  failure to make payments of principal or interest on their contractually due dates;

-  an actual or expected significant deterioration in a financial instrument's external or internal credit rating (if available);

-  an actual or expected significant deterioration in the operating results of the debtor; and

-  existing or forecast changes in the technological, market, economic or legal environment that have a significant adverse effect on the debtor's ability to meet it obligation to the Company.

Depending on the nature of the financial instruments, the assessment of a significant increase in credit risk is performed on either an individual basis or a collective basis. When the assessment is performed on a collective basis, the financial instruments are grouped based on shared credit risk characteristics, such as past due status and credit risk ratings.

ECLs are re-measured at each reporting date to reflect changes in the financial instrument's credit risk since initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Company recognises an impairment gain or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debts securities that are measured at fair value through other comprehensive income (recycling), for which the loss allowances are recognised in other comprehensive income and accumulated in the fair value reserve (recycling).

Interest income is calculated based on the gross carrying amount of the financial asset unless the financial asset is credit-impaired, in which case interest income is calculated based on the amortised cost (i.e. the gross carrying amount less loss allowance) of the financial asset.

At each reporting date, the Company assesses whether a financial asset is credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable events:

-  significant financial difficulties of the debtor;

-  a breach of contract, such as a default or delinquency in interest or principal payments;

-  it becoming probable that the borrower will enter into bankruptcy or other financial reorganisation;

-  significant changes in the technological, market, economic or legal environment that have an adverse effect on the debtor; or

-  the disappearance of an active market for a security because of financial difficulties of the issuer.

The gross carrying amount of a financial asset or contract asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.

Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs.

4.7.2  Financial liabilities and equity instruments

Debt and equity instruments issued by the Company 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 Company are recognised at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities 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.

4.7.3  Derecognition

The Company 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 Company derecognises financial liabilities when, and only when, the Company '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.

4.7.4  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.

4.8  Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, demand deposits with banks and other financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, having been within three months of maturity at acquisition.

4.9  Dividend distributions

Dividend distributions to the Company's shareholders are recognised as liabilities in the financial statements in the period in which the dividends are approved by the shareholders or directors, where appropriate.

4.10  Revenue recognition

Revenue from contracts with customers

Under IFRS 15, the Company recognises revenue when (or as) a performance obligation is satisfied, i.e. when "control" of the goods or services underlying the particular performance obligation is transferred to the customer.

A performance obligation represents a good or service (or a bundle of goods or services) that is distinct or a series of distinct goods or services that are substantially the same.

Control is transferred over time and revenue is recognised over time by reference to the progress towards complete satisfaction of the relevant performance obligation if one of the following criteria is met:

-  the customer simultaneously receives and consumes the benefits provided by the Company's performance as the Company performs;

-  the Company's performance creates or enhances an asset that the customer controls as the Company performs; or

-  the Company's performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.

Otherwise, revenue is recognised at a point in time when the customer obtains control of the distinct good or service.

A contract asset represents the Company's right to consideration in exchange for goods or services that the Company has transferred to a customer that is not yet unconditional. It is assessed for impairment in accordance with IFRS 9. In contrast, a receivable represents the Company's unconditional right to consideration, i.e. only the passage of time is required before payment of that consideration is due.

A contract liability represents the Company's obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer.

A contract asset and a contract liability relating to the same contract are accounted for and presented on a net basis.

Contracts with multiple performance obligations (including allocation of transaction price)

For contracts that contain more than one performance obligations (provision of design and installation services and sales of goods), the Company allocates the transaction price to each performance obligation on a relative stand-alone selling price basis.

The stand-alone selling price of the distinct good or service underlying each performance obligation is determined at contract inception. It represents the price at which the Company would sell a promised good or service separately to a customer. If a stand-alone selling price is not directly observable, the Company estimates it using appropriate techniques such that the transaction price ultimately allocated to any performance obligation reflects the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to the customer.

Over time revenue recognition: measurement of progress towards complete satisfaction of a performance obligation

The progress towards complete satisfaction of a performance obligation is measured based on input method, which is to recognise revenue on the basis of the Company's efforts or inputs to the satisfaction of a performance obligation relative to the total expected inputs to the satisfaction of that performance obligation, that best depicts the Company's performance in transferring control of goods or services.

Service revenue from supply, design and installation of closed circuit television and surveillance systems is recognised over time by reference to the progress towards complete satisfaction of the relevant performance obligation using input method as the Company's performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.

Service revenue from maintenance contracts is recognised over time as the customer simultaneously receives and consumes the benefits provided by the Company. Revenue is recognised on a straight-line basis because the Company's inputs are expended evenly throughout the performance period.

Trading income is recognised at a point in time when the customer obtains control of the distinct good.

4.11  Leases

At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is conveyed where the customer has both the right to direct the use of the identified asset and to obtain substantially all of the economic benefits from that use.

As a lessee

Where the contract contains lease component(s) and non-lease component(s), the Company has elected not to separate non-lease components and accounts for each lease component and any associated non-lease components as a single lease component for all leases.

At the lease commencement date, the Company recognises a right-of-use asset and a lease liability, except for short-term leases that have a lease term of 12 months or less and leases of low-value assets. When the Company enters into a lease in respect of a low-value asset, the Company decides whether to capitalise the lease on a lease-by-lease basis. The lease payments associated with those leases which are not capitalised are recognised as an expense on a systematic basis over the lease term.

Where the lease is capitalised, the lease liability is initially recognised at the present value of the lease payments payable over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using a relevant incremental borrowing rate. After initial recognition, the lease liability is measured at amortised cost and interest expense is calculated using the effective interest method. Variable lease payments that do not depend on an index or rate are not included in the measurement of the lease liability and hence are charged to profit or loss in the accounting period in which they are incurred.

The right-of-use asset recognised when a lease is capitalised is initially measured at cost, which comprises the initial amount of the lease liability plus any lease payments made at or before the commencement date, and any initial direct costs incurred. Where applicable, the cost of the right-of-use assets also includes an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, discounted to their present value, less any lease incentives received. The right-of-use asset is subsequently stated at cost less accumulated depreciation (Note 17) and impairment losses.

The lease liability is remeasured when there is a change in future lease payments arising from  a change in an index or rate, or there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, or there is a change arising from the reassessment of whether the Company will be reasonably certain to exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company presents right-of-use assets and lease liabilities separately in the statement of financial position.

4.12  Employee benefits

Employee benefits comprise short-term employee benefits and contributions to defined contribution retirement plans.

Short-term employee benefits, including salaries, annual bonuses, paid annual leave and 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. 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.

4.13  Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant related to an expense item, it is recognised as income on a systematic basis over the periods that the costs, which it is intended to compensate, are expensed.

Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to profit or loss over the expected useful life of the relevant asset by equal annual instalments or deducted from the carrying amount of the asset and released to profit or loss by way of a reduced depreciation charge.

4.14  Income tax

Income tax expense for the year comprises current and deferred tax. Tax is recognised in the statement of profit or loss and other 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 operates and generates 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 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 a 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 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.

4.15  Provisions and contingent liabilities

Provisions are recognised for other liabilities of uncertain timing or amount when 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.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow is remote.  Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow is remote.

4.16  Events after the reporting period

Events after the reporting period that provide additional information about the Company 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.

4. 1 7  Related parties

A person or a close member of that person's family is related to the Company if that person:

(i)  has control or joint control over the Company;

(ii)  has significant influence over the Company; or

(iii)  is a member of the key management personnel of the Company or the Company's parent.

An entity is related to the Company if any of the following conditions applies:

(i)  The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii)  One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii)  Both entities are joint ventures of the same third party.

(iv)  One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v)  The entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related to the Company.

(vi)  The entity is controlled or jointly controlled by a person identified in the above paragraph.

(vii)  A person identified in (i) of the above paragraph has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

(viii)  The entity, or any member of a group of which it is a part, provides key management personnel services to the Company or to the Company's parent.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

5.  KEY SOURCES OF ESTIMATION UNCERTAINTY

The following are 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.

Revenue recognition on service contracts

The Company recognises revenue on service contracts from supply, design and installation of closed circuit television and surveillance systems by reference to the progress towards complete satisfaction of the relevant performance obligation using the input method, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs. The management regularly discusses with the project team in order to review and revise the estimates of the total contract costs and stage of completion of the work performed to date with reference to the performance and status of corresponding service contract work. Accordingly, revenue recognition on service contracts involves a significant degree of management estimates and judgment, with estimates being made to assess the total contract costs and contract costs incurred for work performed to date.

The management reviews and revises the estimates of total contract costs and contract costs incurred for work performed to date as the contract progresses, the actual outcome of the contract in terms of its total costs may be higher or lower than the estimates and this will affect the revenue and profit recognised.

Estimated provision of ECL for receivables measured at amortised cost and contract assets

The management of the Company estimates the amount of impairment loss for ECL on receivables measured at amortised cost and contract assets based on the credit risk of these assets. The amount of the impairment loss based on ECL model is measured as the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the effective interest rate determined at initial recognition. Where the future cash flows are less than expected, or being revised downward due to changes in facts and circumstances, a material impairment loss may arise.

The provision of ECL is sensitive to changes in estimates.

Income taxes

The Company is subject to profits tax in Hong Kong. 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 2021, the Company has unused tax losses of approximately £1,452,000 (2020: £1,838,000) available for offset against future profits and no deferred tax asset has been recognised thereon. 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 statement of profit or loss and other comprehensive income for the period in which such a recognition takes place.

6.  FINANCIAL INSTRUMENTS

(a)  Categories of financial instruments

		202 1		20 20
		£		£
Financial assets
Amounts due from related companies		2,842,805		3,157,799
Deposit placed for a life insurance policy		862,476		941,772
Trade and other receivables		1,708,494		2,406,863
Cash and bank balances		284,354		980,238
Financial liabilities
Trade and other payables		5,179,172		3,824,759
Amount due to a related company		393,074		437,500
Bank borrowings		561,535		682,486
Lease liabilities		64,883		284,165

(b)  Financial risk management objectives and policies

Details of the Company's major 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 Company's management manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.

(i)  Market risk

Currency risk

The Company has foreign currency transactions and foreign currency denominated financial assets and liabilities, which expose the Company to foreign currency risk.

The carrying amounts of the Company's foreign currency denominated financial assets and liabilities at the end of each reporting period are as follows:

	Assets				Liabilities
	2021		2020		2021		2020
	£		£		£		£
Renminbi	5,178		5,323		571,306		568,750
United States dollar	869,314		948,100		598,596		1,023,750

The Company currently does not have any policy on hedges of foreign currency risk.  However, the management monitors the foreign currency risk exposure and will consider hedging significant foreign currency risk should the need arise.

The following table details the Company's sensitivity to a 5% increase and decrease in Sterling Pound against the relevant foreign currencies with all other variables held constant. 5% (2020: 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 currency denominated financial instruments and adjusts their translation at the end of the reporting period for a 5% (2020: 5%) change in foreign currency rates. 

	2021		2020
	£		£
Renminbi
Post-tax profit for the year	29,796		29,654
United States dollar
Post-tax profit for the year	14, 248		3,982

Interest rate risk

The Company is exposed to fair value interest rate risk in relation to its bank deposits. The Company is exposed to cash flow interest rate risk due to fluctuation of the prevailing market interest rate on bank borrowings which carry interest at prevailing market interest rates as shown in notes 27 and 33 to the financial statements.

The Company currently does not have an interest rate hedging policy. However, the management monitors interest rate exposure and will consider hedging significant interest rate exposure should the need arises.

The Company's exposure to interest rates on financial liabilities is detailed in the liquidity risk management section of this note.

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 2020.

For the year ended   31 March 2021 , if interest rates had been 25 basis points higher/lower with all other variables held constant, the Company's post-tax profit for the year would increase / decrease by approximately £ 4,584   (20 20 : £ 4,081 ).

(ii)  Credit risk

At 31 March 2021, 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 statement of financial position .

In order to minimise credit risk, the management has a credit policy in place and the exposure to these credit risks is monitored on an ongoing basis.  Credit evaluations of the counterparties' financial position and conditions are performed on each and every major debtor periodically. 

The Company measures ECLs for trade and other receivables and contract assets at an amount calculated using a provision matrix, details of which are set out in notes 21 and 22 to the financial statements. At the end of the reporting period, the Company had concentrations of credit risk where trade and other receivables balance of the Company's largest external customer exceed s 10% of the total trade and other receivables at the end of the reporting period.

The credit risk on deposit placed for a life insurance policy and liquid funds is limited because the counterparties are banks/financial institutions with high credit ratings assigned by international credit rating agencies.

The Company's exposure credit risk is considered limited.

(iii)  Liquidity risk

The Company is responsible for its own cash management, including the raising of loans to cover the expected cash demands. In managing liquidity risk, the Company's policy is to regularly monitor current and expected liquidity requirements and its compliance with lending covenants, to ensure that it maintains sufficient reserves of cash and adequate committed funding lines from the financial institutions to meet its liquidity requirements in the short and longer term. At 31 March 202 1 , the Company's banking facilities amounted to £ 5,292,641 (20 20 : £7 ,858,538 ) and the unused facilities were £ 3,458,873   (20 20 : £ 5, 903,189 ).

The following table details the contractual maturities of the Company's non-derivative financial liabilities at the end of each reporting period, which is based on the undiscounted cash flows and the earliest date on which the Company can be required to pay. The table includes both interest and principal cash flows.

	2021
	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 2021
	%		£		£		£		£		£
Trade and other payables	Nil		5,179,172		-		-		5,179,172		5,179,172
Amount due to a related company	Nil		-		393,074		-		393,074		393,074
Bank borrowings	1.61		562,280		-		-		562,280		561,535
Lease liabilities	5.125		44,744		23,276		-		68,020		64,883
			5,786,196		416,350		-		6,202,54 6		6,198,664

		2020
		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 2020
		%		£		£		£		£		£
	Trade and other payables	Nil		3,708,335		-		-		3,708,335		3,708,335
	Amount due to a related company	Nil		-		437,500		-		437,500		437,500
	Bank borrowings	3.55		684,538		-		-		684,538		682,486
	Lease liabilities	5.125		222,031		72,444		-		294,475		284,165
				4,614,904		509,944		-		5,124,848		5,112,486

(c)  Fair value

The directors of the Company consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in these financial statements approximate their fair values at the end of the reporting period.

(d)  Capital risk management

The primary objectives when managing capital are to safeguard the Company'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 Company actively and regularly reviews and manages the 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 Company monitors its capital structure on the basis of a net debt-to-adjusted capital ratio.  For this purpose, net debt is defined as total debt less bank deposits and cash and cash equivalents . Adjusted capital comprises all components of equity less proposed dividends but not yet accrued.

The strategy during 202 1 , which is unchanged from 20 20 , is to maintain the net debt-to-adjusted capital ratio as low as feasible.  In order to maintain or adjust the ratio, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. 

The net debt-to-adjusted capital ratio of the Company at the end of the reporting period is as follows :

	2021		2020
	£		£
Total liabilities	7,770,909		6,545,356
Cash and bank balances	(284,354)		(980,238)
Net debt	7,486,555		5,565,118
Total equity	8,159,891		8,706,138
Net debt-to-adjusted capital ratio	92%		64 %

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 Company has a single reportable operating segment in security and surveillance business for the year ended 31 March 2021.

(a)  Segment revenues and results

The following is an analysis of the Company's revenue and results by operating segment:

	202 1		20 20
	£		£
Segment revenue by major products and services
-  Construction contracts	9,048,983		8,891,163
-  Maintenance contracts	1,650,094		1,625,775
-  Product sales	246,210		211,606
Revenue from contracts with customers and external customers	10,945,287		10,728,544
Segment profit	637,363		546,92 6
Finance costs	( 74, 009)		(95,243)
Profit before income tax	563,3 54		451,683

(b)  Information about major customers

Revenue of approximately £8,622,281 (2020: £ 8,812,800 ) is derived from one external customer (2020: one customer), who contributed to 10% or more of the Company's revenue in 2021 and 2020.

8.  OTHER INCOME

	2021		2020
	£		£
Interest income	26,773		36,905
Government grants - Note	392,936		-
Gain on lease modification	122		-
Sundry income	2,729		-
	422,560		36,905

Note:

Government grants represent the approved amount of wage subsidies under the Employment Support Scheme launched by the HKSAR Government and subsidies received from the Anti-Epidemic Fund of the HKSAR Government.

9.  OTHER GAINS AND LOSSES, NET

	2021		2020
	£		£
Foreign exchange loss	(689)		(11,250 )
Gain on disposal of plant and equipment	-		201
Inventories written-off	(32,787)		-
	(33,476)		(11,049)

10.  EXPENSES BY NATURE

	2021			2020
	£			£
Cost of inventories recognised as expenses	5,975,575			5,709,694
Sub-contracting costs	1,341,994			1,185,287
Depreciation - o wned plant and equipment	55,607			56,694
Depreciation - right-of-use assets	173,933			179,977
Research and development costs	-			23,875
Selling and distribution cost	3,189			2,709
Short-term lease expenses	86,680			54,411
Other expenses	437,568			453,342
Staff costs, including directors' remuneration
-  Wages and salaries	2,494,170			2,415,640
-  Pension scheme contributions	102,388			99,379
	2,596,558			2,515,019
Auditor's remuneration
-  Audit services	25,904			26,466
Total cost of sales, selling and distribution, administrative expenses	10,697,008			10,207,474

11.  DIRECTORS' REMUNERATION

Directors' remuneration for the year is as follows:

	Salaries, bonuses and allowances	Pension scheme contributions	2021
	£	£	£
Executive directors
Stephen Sin Mo KOO	-	-	-
Peter Yip Tak CHAN	79,555	1,773	81,328
Keung Hung LI	49,384	1,330	50,714
Danny Kwok Fai YIP	74,317	1,773	76,090
Ivan Chi Hung CHAN	49,800	1,330	51,130
	253,056	6,206	259,262
Non-executive director s
Nicholas James LYTH	14,183	-	14,183
Ivor Colin SHRAGO	14,183	-	14,183
	28,366	-	28,366
	281,422	6,206	287,628

Messrs. Keung Hung LI and Ivan Chi Hung CHAN were appointed as the Company's directors on 24 June 2020.

	Salaries, bonuses and allowances	Pension scheme contributions	2020
	£	£	£
Executive directors
Stephen Sin Mo KOO	-	-	-
Peter Yip Tak CHAN	74,399	1,812	76,211
Chun Pan WONG	74,410	1,359	75,769
Danny Kwok Fai YIP	72,108	1,812	73,920
Mike Chiu Wah CHAN	51,472	1,057	52,529
	272,389	6,040	278,429
Non-executive director s
Nicholas James LYTH	14,497	-	14,497
Ivor Colin SHRAGO	14,497	-	14,497
	28,994	-	28,994
	301,383	6,040	307,423

Messrs. Mike Chiu Wah CHAN and Chun Pun WONG resigned as the Company's directors on 31 October 2019 and 26 December 2019 respectively.

12.  FINANCE COSTS

	2021		2020
	£		£
Interest expense on bills payable and factoring	49,479		61,501
Interest expense on bank borrowings	12,805		21,205
Interest expense on bank overdraft	4,682		-
Interest on lease liabilities	7,043		12,537
	74,009		95,243

13.  INCOME TAX

(a)  Income tax in the statement of profit or loss and other comprehensive income

No provision for Hong Kong profits tax has been accrued for in these financial statements as the Company has unused tax losses brought forward to offset against its taxable profit for the year.

Reconciliation between income tax and profit before income tax is as follows:

	2021		2020
	£		£
Profit before income tax	563,3 54		451,683
Notional tax on profit before income tax, calculated at Hong Kong profits tax rate of 16.5%	92,953		74,528
Tax effect of non- taxable income	(64,835)		(43)
Tax effect of non- deductible expenses	13,133		10,918
Tax effect of temporary differences not re cognised	(6,595)		(7,440)
U tilisation of unrecognised tax losses	(34,656)		(77,963)
Income t ax	-		-

(b)  Deferred tax

At 31 March 2021, the Company's significant temporary difference included unused tax losses of £1,452,190 (2020: £1,838,451) available for offset against future taxable profits. No deferred tax asset has been recognised due to the uncertainty of future profit streams.

	2021		2020
	£		£
B alance at beginning of year	1,838,451		2,178,697
Set-off against assessable profit for the year	(210,035)		(472,506)
Foreign exchange difference	(176,226)		132,260
Balance at end of year	1,452,190		1,838,451

No provision for deferred tax liabilities has been made in the financial statements as the tax effect of temporary differences arising from depreciation allowances is immaterial to the Company.

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 £ 563,354   (2020: £ 451,683 ), and the weighted average of 383,677,323 (2020: 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:

	2021		2020
	£		£
Final dividend proposed after the reporting period of 0.26 HK cents , equivalent to 0.0243 pence per ordinary share (2020: 0.55 HK cents , equivalent to 0.0573 pence, per ordinary share)	93,361		219,815

The final dividend proposed after 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

	2021		2020
	£		£
Final dividend in respect of the previous financial year, approved and paid during the year, of 0. 55 HK cents, equivalent to 0.05417 pence, per ordinary share (2020: 0. 55 HK cents , equivalent to 0.05537 pence per ordinary share )	207,843		212,447

16.  PLANT AND EQUIPMENT

	Furniture and fixtures		Computer equipment		Motor vehicles		Total
	£		£		£		£
Cost
At 1 April 2019	170,995		102,387		95,700		369,082
Additions	4,163		12,180		23,155		39,498
Disposal	-		-		(3,624)		(3,624)
Foreign translation difference	11,811		7,408		7,207		26,426
At 31 March 2020	186,969		121,975		122,438		431,382
Additions	15,310		16,738		-		32,048
Foreign translation difference	(19,747)		(13,220)		(12,433)		(45,400)
At 31 March 2021	182,532		125,493		110,005		418,030
Accumulated depreciation
At 1 April 2019	58,134		84,233		83,569		225,936
Charge for the year	31,195		11,038		14,461		56,694
Disposal	-		-		(3,624)		(3,624)
Foreign translation difference	5,049		6,129		6,077		17,255
At 31 March 2020	94,378		101,400		100,483		296,261
Charge for the year	31,755		12,155		11,697		55,607
Foreign translation difference	(11,165)		(10,901)		(10,786)		(32,852)
At 31 March 2021	114,968		102,654		101,394		319,016
Net book value
At 31 March 2021	67,564		22,839		8,611		99,014
At 31 March 2020	92,591		20,575		21,955		135,121

17.  RIGHT-OF-USE ASSETS

			Motor		Leasehold
			vehicle		properties		Total
			£		£		£
Cost
At 1 April 2019			-		280,492		280,492
Additions			-		157,254		157,254
Foreign translation difference			-		24,593		24,593
At 31 March 2020			-		462,339		462,339
Additions			35,163		-		35,163
Expiry of lease arrangements			-		(283,310)		(283,310)
Lease modification			-		(60,539)		(60,539)
Foreign translation difference			(1,751)		(29,828)		(31,579)
At 31 March 2021			33,412		88,662		122,074
Accumulated depreciation
At 1 April 2019			-		-		-
Charge for the year			-		179,977		179,977
Foreign translation difference			-		6,243		6,243
At 31 March 2020			-		186,220		186,220
Charge for the year			5,861		168,072		173,933
Expiry of lease arrangements			-		(283,310)		(283,310)
Lease modification			-		(2,523)		(2,523)
Foreign translation difference			(292)		(13,046)		(13,338)
At 31 March 2021			5,569		55,413		60,982
Net book value
At 31 March 2021			27,843		33,249		61,092
At 31 March 2020			-		276,119		276,119

  The Company has entered into lease agreements to obtain the right to use motor vehicle and properties as its office premises and warehouse and as a result incurred lease liabilities (Note 2 6 ). The lease s typically run for an initial period of 2 to 5 years.

18.  INTEREST IN ASSOCIATE

					2021		2020
					£		£
Cost of unlisted investment in associate					5		-

Notes:

Details of the Company's associa te, which are accounted for using the equity method in the f inancial statements, at the end of the reporting period, are as follows:

	Place of	Issued and	Proportion		Proportion
	establishment	paid-up	of ownership		of voting		Principal
Name of associate	and operation	capital	interest		power held		activity
Vision Key International Limited	Hong Kong	HKD100	50%		50%		Inactive

19.  DEPOSIT PLACED FOR A LIFE INSURANCE POLICY

  In April 2019, the Company entered into a life insurance policy with an insurance company to insure Mr. Stephen Sin Mo KOO, a Director of the Company . Under the policy, the Company is the beneficiary and policy holder and the total insured sum is US$2,500,000. The Company has paid an upfront deposit of US$1,203,528. The Company can terminate the policy at any time and receive cash back based on the cash value of the policy at the date of withdrawal, which is determined by the upfront deposit payment of US$1,203,528 plus accumulated interest earned and minus the accumulated insurance charge and policy expense charge ("Cash Value").

In addition, if withdrawal is made between the first to nineteenth policy year, as appropriate, a specified amount of surrender charge would be imposed.

The insurance company will pay the Company an interest of 4.25% per annum on the outstanding Cash Value for the first year. Commencing on the second year, the interest will be at least 2% guarantee interest per annum. The guarantee interest rate is also the effective interest rate for the deposit placed on initial recognition, determined by discounting the estimated future cash receipts through the expected life of the insurance policy, excluding the financial effect of surrender charge.

The deposit placed is carried at amortised cost using the effective interest method. The Directors considered that the possibility of terminating the policy during the first to nineteenth policy year was low and the expected life of the insurance policy remained unchanged since the initial recognition. Accordingly, the difference between the carrying amount of deposit placed for a life insurance policy as at 31 March 2021 and the Cash Value of the life insurance policy is insignificant.

At 31 March 2021, the life insurance policy has been pledged as security for banking facilities granted to the Company (Note 33).

20.  INVENTORIES

	2021		2020
	£		£
Raw materials	279,261		309,386
Finished goods	1,304,835		724,903
	1,584,096		1,034,289

No provision for obsolete inventories is recognised for the year (2020: £nil) on slow-moving inventories.

Inventor ies write-off of £32,787 (20 20 : £nil) was recorded for the year.

21.  TRADE AND OTHER RECEIVABLES

	2021		2020
	£		£
Trade receivables	403,230		634,931
Less: allowance for doubtful debts	(59,319)		(66,024)
Trade receivables, net	343,911		568,907
Other receivable s	1,198,861		1,330,320
Deposits and prepayments	165,717		507,636
Total carrying amount	1,708,489		2,406,863

All of the trade and other receivables are expected to be recovered within one year.  

21.  TRADE AND OTHER RECEIVABLES (CONTINUED)

Trade receivables

Impairment losses in respect of trade receivables are recorded using an allowance account unless the Company 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:

	2021		2020
	£		£
At beginning of year	66,024		61,806
Foreign translation difference	(6,705)		4,218
At end of year	59,319		66,024

The ageing analysis of trade receivables, net at the end of the reporting period is as follows:

	2021		2020
	£		£
0 to 90 days	325,415		470,672
91 to 365 days	3,793		88,190
Over 365 days	14,703		10,045
	343,911		568,907

The Company measures loss allowances for trade receivables at an amount equals to lifetime ECLs, which is calculated using a provision matrix. As the Company's historical credit loss experience does not indicate significantly different loss patterns for different customer segments, the loss allowance based on past due status is not further distinguished between the Company's different customer bases.

The following table provides information about the Company's exposure to credit risk and ECLs for trade receivables at the end of the reporting period:

	202 1						20 20
	Expected  loss rate		Gross carrying amount		Loss allowance		Expected  loss rate		Gross carrying amount		Loss allowance
	%		£		£		%		£		£
0 to 90 days	-		325,415		-		-		470,672		-
91 to 365 days	-		3,793		-		-		88,190		-
Over 365 days	80		74,022		59,319		87		76,069		66,024
			403,230		59,319				634,931		66,024

Expected loss rates are based on actual loss experience over the past 3 years. These rates are adjusted to reflect differences between economic conditions during the periods over which the historic data has been collected, current conditions and the Company's view of economic conditions over the expected lives of the receivables.

Other receivables

The amount of £284,072 (2020: £406,007) in other receivable is interest-free, repayable on demand and   due from Mr. Stephen Sin Mo KOO, a Director of the Company.

No loss allowance was recognised in profit or loss during the years ended 31 March 2021 and 2020.

22.  CONTRACT ASSETS

	2021		2020
	£		£
Supply , design and installation of closed circuit television and surveillance systems services	8,439,488		6,243,276

The contract assets primarily relate to the Company's right to consideration for work completed and not billed because the rights are conditioned on the Company's future performance in achieving specified milestones at the reporting date on the comprehensive architectural services. The contract assets are transferred to trade receivables when the rights become unconditional. The Company typically transfer contract assets to trade receivables upon achieving the specified milestones in the contracts.

There was no retention monies held by customers for contract works performed at the end of each reporting period. The Company classifies these contract assets as current because the Company expects to realise them in its normal operating cycle.

The Company makes specific provision for contract assets whose credit risk are considered significantly increased or identified as credit-impaired. For remaining balance of contract assets, the Company makes general provision based on ageing analysis and project status.

As at 31 March 202 1 , the gross amount of contract assets was £ 8,530,832   (2020: £6,344,943 ) and the provision of impairment was £ 91,344 (2020: £101,667 ) .

The following table provides information about the Company's exposure to credit risk and ECLs for contract assets at the end of the reporting period:

	202 1						20 20
	Expected  loss rate		Gross carrying amount		Loss allowance		Expected  loss rate		Gross carrying amount		Loss allowance
	%		£		£		%		£		£
Within 3 years	-		8,439,488		-		-		6,243,276		-
Over 3 years	100		91,344		91,344		100		101,667		101,667
			8,530,832		91,344				6 ,344,943		101,667

No loss allowance was recognised in profit or loss during the years ended 31 March 2021 and 2020.

23.  CASH AND BANK BALANCES

(a)  Cash and cash equivalents

	2021		2020
	£		£
Cash at bank and in hand	284,354		679,186
Deposits with banks	-		301,052
	284,354		980,238
Less: restricted cash	-		(301,052)
Cash and cash equivalents in the statement of cash flows	284,354		679,186

(b)  Cash and bank balances are denominated in the following currencies:

	2021		2020
	£		£
Hong Kong dollar	273,095		970,936
Renminbi	5,231		5,904
United States dollar	4,621		2,544
Others	1,407		854

(c)  Restricted cash

At 31 March 2020, bank balance of £301,052 was restricted as bank deposits with maturities less than three months. Such restricted bank balances were held for the purpose of the issuance of performance bonds in respect of maintenance contracts undertaken by the Company.

At 31 March 2021, the effective interest rate on bank deposits was 0.2% (2020: ranged from 0.2% to 2.7%) per annum.

24.  TRADE AND OTHER PAYABLES

	2021		2020
	£		£
Current liabilities
Trade payables	2,109,753		1,206,558
Bills payable	1,272,233		1,272,863
Accruals and other payables	1,797,186		1,345,338
	5,179,172		3,824,759
Non-current liabilities
Due to a related company (Note 30)	393,074		437,500
	5,572,246		4,262,259

Trade and other payables are expected to be repaid within one year, other than the amount due to a related company.

Bills payable carry interest at annual rate at the Hong Kong Best Lending Rate and are repayable within 90 days.

25.  CONTRACT LIABILITIES

	2021		2020
	£		£
Supply , design and installation of closed circuit television and surveillance systems services	1,572,245		1,316,446

Contract liabilities represent the Company's obligation to transfer performance obligation to customers for which the Company has received considerations from the customers.

Revenue recognised during the year ended 31 March 2021 that was included in the contract liabilities at the beginning of the year was amounted to £1,316,446 (2020: £956,616).

26.  LEASE LIABILITIES

The following table shows the remaining contractual maturities of the Company's lease liabilities at the end of the current year:

	Present value of				Minimum
	m inimum lease payments				lease payments
	202 1		20 20		202 1		20 20
	£		£		£		£
Within one year	42,959		213,288		44,744		222,031
In the second to fifth year	21,924		70,877		23,276		72,444
	64,883		2 84 , 16 5		68,020		294,475
Less: Future finance charges					( 3,137)		(10,310 )
Present value of lease obligation					64,883		284,165

27.  BANK BORROWINGS

	2021		2020
	£		£
Revolving loans	561,535		682,486

The loans are denominated in Hong Kong dollar and carry interest at annual rate at 1.5% over Hong Kong Interbank Offered Rate.

Details of securities are disclosed in note 33 to the financial statements.

28.  SHARE CAPITAL

	2021		2020
	£		£
Issued and fully paid :
383,677,323 ordinary s hares of HK$55 , 033 , 572, translated at historical rate	3,890,257		3,890,257

The Company has one class of ordinary shares which has no par value.

29.  EMPLOYEE RETIREMENT BENEFITS

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 Company 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$30,000. Contributions to the MPF scheme vest immediately.

Save d as set out above, the Company has no other material   obligations to make payments in respect of retirement   benefits of the employees.  

30.  RELATED PARTY TRANSACTIONS

Compensation of key management personnel

The remuneration of the key management personnel of the Company during the year was as follows:

	2021		2020
	£		£
Salaries, bonus and allowances	320,660		560,115

The remuneration of key management personnel comprise s the remuneration of E xecutive D irectors and key executives.

Executive D irectors include the E xecutive C hairman, C hief E xecutive O fficer and Finance Director of the Company.  The remuneration of the E xecutive D irectors is determined by the Remuneration Committee having regard to the performance of individuals, the overall performance of the Company and market trends. Further information about the R emuneration C ommittee and the D irectors' remuneration is provided in the Remuneration Report and the Report on Corporate Governance to the Annual Report and note 1 1 to the financial statements.

Key executives include the Director of Operations , Software Development Manager and Sales Manager 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)  At 31 March 202 1 , there are balance s of £ 284,072   (20 20 : £ 406,007 )   due from Mr. Stephen Sin Mo KOO respectively , a D irector of the Company , which are unsecured, interest-free and repayable on demand (Notes 21) .

(b)  At 31 March 202 1 , there is a payable balance of £ 393,074 (20 20 : £ 437,500 ) due to a shareholder, Univision Holdings Limited, which is unsecured, interest-free and repayable after 12 months (Note 2 4 ).

(c)  At 31 March 2021, there are receivable balances of £ 2,842,805   (20 20 : £ 3,157,799 ) due from related companies controlled by common shareholders of the Company, which are guaranteed by a shareholder of the Company, interest-free and repayable after 12 months.

Apart from the transactions disclosed above and elsewhere in these financial statements, the Company had no other material transactions with related parties during the year.

31.  CASH FLOWS FROM LIABILITIES ARISING FROM FINANCING ACTIVITIES

The table below details changes in the Company's liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are liabilities for which cash flows were, or future cash flows will be, classified in the Company's statement of cash flows as cash flows arising from financing activities.

	Amount due toa related company		Bank borrowings		Lease liabilities		Total
	£		£		£		£
At 1 April 2019	409,556		-		280,492		690,048
Financing cash flows:
New bank loans	-		659,606		-		659,606
Interest paid	-		(21,205)		-		(21,205)
Capital element of lease liabilities paid	-		-		(172,201)		(172,201)
Interest element of lease liabilities paid	-		-		(12,537)		(12,537)
Other changes:
New leases	-		-		157,254		157,254
Interest on lease liabilities	-		-		12,537		12,537
Interest expense on bank borrowings	-		21,205		-		21,205
Foreign translation difference	27,944		22,880		18,620		69,444
At 31 March 2020 and 1 April 2020	437,500		682,486		284,165		1,404,151
Financing cash flows:
Repayment of bank loans	-		(54,355)		-		(54,355)
Interest paid	-		(12,805)		-		(12,805)
Capital element of lease liabilities paid	-		-		(177,430)		(177,430)
Interest element of lease liabilities paid	-		-		(7,043)		(7,043)
Other changes:
New leases	-		-		35,163		35,163
Lease modification	-		-		(58,016)		(58,016)
Interest on lease liabilities	-		-		7,043		7,043
Interest expense on bank borrowings	-		12,805		-		12,805
Foreign translation difference	(44,426)		(66,596)		(18,999)		(130,021)
At 31 March 2021	393,074		561,535		64,883		1,019,492

Amounts included in the statement of cash flows for cash outflows for leases comprise the following:

	2021		2020
	£		£
Within:
Operating cash flows	86,680		54,411
Financing cash flows	184,473		184,738
	271,153		239,149

T hese a mounts relate to the following:

	2021		2020
	£		£
Lease rentals paid	271,153		239,149

32.  COMMITMENTS

Capital commitments

At 31 March 2021, the Company did not have any material outstanding capital commitments.

33.  BANKING FACILITIES

At 31 March 2021, the banking facilities of the Company were as follows:

(a)  The revolving trade financing facilities amounted to £2,433,318 (equivalent to HK$ 26 ,000,000) and carried annual interest at the Hong Kong Dollars Best Lending Rate with a repayment term of 90 days. The facilities are subject to the fulfilment of certain covenants relating to the Company's net worth and the loans to its related parties.  If the Company is in breach of the covenants, the facilities would become payable on demand.  At 31 March 202 1 , the facilities were utilised to the extent of £1,272,233.

(b)  The revolving term facilities amounted to £1,403,837 (equivalent to HK$ 1 5,000,000) were secured by floating charges over the bills receivable from the Company's major customer. At 31 March 202 1 , no facilities were utilised .

(c)  The revolving term facilities amounted to £613,184 (equivalent to HK$ 6,551,867 ) were secured by the life insurance policy of the Company (Note 19) . At 31 March 2021, the facilities were utilised to the extent of £561,535.

(d)  The straight line   loans f acilities amounted to £842,302 (equivalent to HK$ 9,000,000 ) were secured by the life insurance policy of the Company . At 31 March 202 1 , no facilities were utilised .

At 31 March 2020, the banking facilities of the Company were as follows:

(a)  The revolving trade financing facilities amounted to £2,187,500 (equivalent to HK$ 21 ,000,000) and carried annual interest at the Hong Kong Dollars Best Lending Rate with a repayment term of 90 days. The facilities are subject to the fulfilment of certain covenants relating to the Company's net worth and the loans to its related parties.  If the Company is in breach of the covenants, the facilities would become payable on demand.  At 31 March 2020, the facilities were utilised to the extent of £1,272,863.

(b)  The revolving term facilities amounted to £2,604,167 (equivalent to HK$ 2 5,000,000) were secured by floating charges over the bills receivable from the Company's major customer. At 31 March 2020, no facilities were utilised .

(c)  The revolving loans f acilities amounted to £682,486 (equivalent to HK$ 6,551,867 ) were secured by the life insurance policy of the Company (Note 19) . At 31 March 2020, these facilities were fully utilised .

(d)  The bonding line facilities amounted to £2,083,333 (equivalent to HK$ 20,000,000 ) were secured by a charge over deposits limited to £625,000 ( equivalent to HK$6,000,000) granted by the Company . At 31 March 2020, no facilities were utilised .

(e)  The banking facilities for issuance of letter of credit and guarantee amounted to £301,052 (equivalent to HK$ 2,890,100 ) were secured by a charge over a fixed deposit of £301,052 ( equivalent to HK$2,890,100) granted by the Company . At 31 March 2020, no facilities were utilised .

The Company regularly monitors its compliance with these covenants. Further details of the Company's management of liquidity risk are set out in note 6(b)(iii) to the financial statements.

34.  Contingent liabilities

On 14 December 2020, the Company received a writ of summons stating that it is being sued by Dimension Data China Hong Kong Limited ("Dimension Data"), and Dimension Data is alleging breach of contract on part of the Company and claiming against the Company for liquidated damages that Dimension Data has thereby suffered in the amount of HK$10,953,969 plus pre-judgment and post-judgment interest and legal costs. The Company, on the other hand, is defending the claim by alleging wrongful breach and thus repudiation of the said sub-contract by Dimension Data and counter-claiming against Dimension Data for loss and damages to be assessed and legal costs.

As of the date of this report, there is no mediation between the Company and Dimension Data.

The Company is of the opinion that the claim is highly opportunistic and without merit and the management intends to defend this claim rigorously.

In the opinion of directors of the Company, there were no other significant contingent liabilities from pending litigation or legal claims as at 31 March 2021.

35.  MAJOR NON-CASH TRANSACTION

During the year, the final dividend for the year ended 31 March 2020 payable to the shareholder, Mr. Stephen Sin Mo KOO , of £142,189 was set-off against with other receivables .

36.  EVENTS AFTER THE REPORTING PERIOD

On 19 August 2021, the Board of Directors proposed a final dividend for the year ended 31 March 2021. Further details are disclosed in note 15(i) to the financial statements.

On 19 April 2021, an additional life insurance plan ("keyman insurance plan") for the Group's Executive Chairman, Mr. Stephen Sin Mo KOO was provided by HSBC Life (International) Limited with sum insured of US$2.5m illion . HSBC has provided a long-term loan of approximately HK$7. 1 m illion for financing certain portion of the premium. The Company is the policy holder for the keyman insurance plan that is assigned to HSBC for security for the banking facilities.

~ ENDS ~

 

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