UNIVERSAL ELECTRONICS INC - FORM 8-K/A - EX-99.1

Attached files

file	filename
8-K/A - FORM 8-K/A - UNIVERSAL ELECTRONICS INC	a58228e8vkza.htm
EX-23.1 - EX-23.1 - UNIVERSAL ELECTRONICS INC	a58228exv23w1.htm
EX-99.2 - EX-99.2 - UNIVERSAL ELECTRONICS INC	a58228exv99w2.htm

Exhibit 99.1

ENSON ASSETS LIMITED

INDEX


	Page
Unaudited Condensed Consolidated Statements of Comprehensive Income		1
Unaudited Condensed Consolidated Statements of Financial Position		2
Unaudited Condensed Consolidated Statements of Changes in Equity		3
Unaudited Condensed Consolidated Statements of Cash Flows		4
Notes to the Unaudited Condensed Consolidated Financial Statements		5

ENSON ASSETS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2009 AND 2010 (UNAUDITED)


	Six Months Ended September 30,
	2009			2010
	HK$'000			HK$'000
Revenues		603,973			792,404
Cost of revenues		(468,873	)		(592,241	)

Gross profit		135,100			200,163
Investment income		185			711
Other income		4,714			1,954
Administrative expenses		(29,095	)		(31,101	)
Distribution expenses		(10,509	)		(13,239	)
Research and development costs		(6,093	)		(10,438	)
Other expenses		(201	)		(213	)
Other gains and losses		352			(694	)
Finance costs — interest on bank borrowings wholly repayable within five years		(263	)		(323	)

Profit before tax		94,190			146,820
Taxation expense		(15,930	)		(30,264	)

Profit for the period and attributable to the owners of the Company		78,260			116,556

Other comprehensive income
Exchange difference arising on translation of foreign operations		139			3,199

Total comprehensive income for the period and attributable to the owners of the Company		78,399			119,755

ENSON ASSETS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AT MARCH 31, 2010 AND SEPTEMBER 30, 2010 (UNAUDITED)


	March 31,		September 30,
	2010		2010
	HK$'000		HK$'000
Non-current assets
Property, plant and equipment		343,885		337,807
Buildings under construction		—		7,548
Prepaid lease payments		3,894		3,911
Club debenture		885		885
Deposit on property, plant and equipment acquisition		1,840		3,218
Deferred tax assets		22,034		21,847

		372,538		375,216

Current assets
Inventories		149,995		181,275
Trade receivables, deposits and prepayments		205,798		314,538
Prepaid lease payments		82		90
Loan to a related company		93,166		—
Amounts due from related companies		433		—
Amount due from holding company		52		9,984
Derivative financial instruments		1,101		495
Cash and cash equivalents		183,682		185,573

		634,309		691,955

Current liabilities
Trade creditors and accrued charges		343,971		380,403
Bills payable		17,341		21,529
Amount due to a director		1,804		—
Amount due to a related company		6,119		10,104
Derivative financial instruments		633		125
Bank borrowings — due within one year		16,421		12,316
Tax payable		29,396		44,499

		415,685		468,976

Net current assets		218,624		222,979

Total assets less current liabilities		591,162		598,195

Non-current liability
Deferred tax liabilities		7,442		14,687

Net assets		583,720		583,508

Capital and reserves
Share capital		470		470
Reserves		583,250		583,038

Equity attributable to equity holders of the Company		583,720		583,508

ENSON ASSETS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2009 AND 2010 (UNAUDITED)


	Share		Share		Statutory		Translation			Accumulated
	capital		premium		reserve		reserve			profits			Total
	HK$'000		HK$'000		HK$'000		HK$'000			HK$'000			HK$
Balance at April 1, 2009		470		81,747		15,388		(4,004	)		337,107			430,708
Profit for the period		—		—		—		—			78,260			78,260
Exchange differences arising on translation of foreign operations		—		—		—		139			—			139

Total comprehensive income for the period		—		—		—		139			78,260			78,399

Balance at September 30, 2009		470		81,747		15,388		(3,865	)		415,367			509,107

Balance at April 1, 2010		470		81,747		23,383		(3,727	)		481,847			583,720

Profit for the period		—		—		—		—			116,556			116,556
Exchange differences arising on translation of foreign operations		—		—		—		3,199			—			3,199

Total comprehensive income for the period		—		—		—		3,199			116,556			119,755

Dividends paid		—		—		—		—			(119,967	)		(119,967	)

Balance at September 30, 2010		470		81,747		23,383		(528	)		478,436			583,508

ENSON ASSETS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2009 AND 2010 (UNAUDITED)


	Six Months Ended
	September 30,
	2009			2010
	HK$'000			HK$'000
Cash provided by operating activities:
Net cash from operating activities		74,011			65,560

Cash used for investing activities:
Repayment from related company		1,500			93,166
Purchase of property, plant and equipment		(9,662	)		(14,870	)
Advance to holding company		—			(9,932	)
Payment of building under construction		(1,939	)		(7,548	)
Other investing cash flows		2,485			(155	)

Net cash (used for) from investing activities		(7,616	)		60,661

Cash used for financing activities:
Dividends paid		—			(119,967	)
Repayment of bank loans		(4,106	)		(4,105	)
Repayment to a director		—			(1,804	)

Net cash used for financing activities		(4,106	)		(125,876	)

Effect of exchange rate changes on cash		15			1,546

Net increase in cash and cash equivalents		62,304			1,891
Cash and cash equivalents at beginning of period		110,504			183,682

Cash and cash equivalents at end of period		172,808			185,573

ENSON ASSETS LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34 “Interim Financial Reporting” issued by the International Accounting Standards Board (“IASB”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting only of normal recurring adjustments which are necessary for a fair presentation of financial results of such periods. As used herein, the terms “Group,” “we,” “us” and “our” refer to Enson Assets Limited and its subsidiaries, unless the context indicates to the contrary.

Purpose of consolidated financial statements

These unaudited condensed consolidated financial statements have been prepared for the special purpose of filing with the United States Securities and Exchange Commission in compliance with Rule 3-05 of Regulation S-X and Form 8-K under the Securities Exchange Act of 1934. This filing requirement is based on the Company being a significant business acquired by Universal Electronics Inc. (“UEI”).

2. Principal Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments, which are measured at fair values.

The accounting policies used in the unaudited condensed consolidated financial statements are consistent with those followed on the Company’s annual consolidated financial statements for the years ended March 31, 2008, 2009 and 2010, except for the adoption of new and revised International Financial Reporting Standards (“IFRS”) issued by the IASB which are effective for the Group for accounting periods beginning on or after April 1, 2010. The adoption of the new and revised IFRS had no material impact on the Group’s results and financial position for the current or prior periods.

The Group has not early applied new and revised standards, amendments or interpretations that have been issued but are not yet effective. The directors of the Company anticipate that, except for IFRS 9 Financial Instruments, the application of other new and revised standards, amendments or interpretations will have no material impact on the results and the financial position of the Group.

IFRS 9 Financial Instruments introduces new requirements for the classification and measurement of financial assets and will be effective from 1 January 2013, with earlier application permitted. The standard requires all recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement to be measured at either amortised cost or fair value. Specifically, debt investments that (i) are held within a business model whose objective is to collect the contractual cash flows and (ii) have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost. All other debt investments and equity investments are measured at fair value. The application of IFRS 9 might affect the classification and measurement of the Group’s financial assets.

3. Profit before tax

Profit before tax has been arrived at after charging (crediting):


	Six Months Ended
	September 30,
	2009		2010
	HK$'000		HK$'000
Allowance for inventories		—		412
Depreciation		24,844		26,220
Amortisation of prepaid lease payments		13		46

Total depreciation and amortisation		24,857		26,266

4. Taxation expense

The Group utilises the estimated annual effective tax rate to determine the provision for income taxes for interim periods. The income tax provision is computed by taking the estimated annual effective tax rate and multiplying it by the year-to-date pre-tax book income. The Group recorded income tax expense of approximately HK$15.9 million and HK$30.3 million for the six months ended September 30, 2009 and 2010, respectively. The effective tax rate was 16.9% and 20.6% during the six months ended September 30, 2009 and 2010, respectively.

5. Dividend

In June 2010, the Group paid a cash dividend in the amount of approximately HK$120.0 million to the shareholders.

6. Movements in Property, Plant and Equipment and Buildings under Construction

During the period, the Group spent approximately HK$11.6 million and HK$22.4 million for the six months ended September 30, 2009 and 2010, respectively on acquisition of property, plant and equipment and buildings under construction.

7. Inventories


	March 31,		September 30,
	2010		2010
	HK$'000		HK$'000
Raw materials		85,019		99,680
Work in process		34,042		33,920
Finished goods		30,934		47,675

Inventories, net		149,995		181,275

8. Trade Receivables, Deposits and Prepayments

Trade receivables, deposits and prepayments consisted of the following on March 31, 2010 and September 30, 2010:


	March 31,			September 30,
	2010			2010
	HK$'000			HK$'000
Trade receivables	$	197,026			300,242
Less: Allowance for bad and doubtful debts		(1,496	)		(1,500	)

Total Trade receivables		195,530			298,742
Other receivables, deposits and prepayments		10,268			15,796

Trade receivables, deposits and prepayments		205,798			314,538

9. Loan to a Related Party

The loan to a related party at March 31, 2010 represents the loan to New Reward Limited denominated in United States dollars (“USD”). The loan was neither past due nor impaired, and no history of default was noted. The loan was unsecured, bore interest at Hong Kong Interbank Offered Rate (“HIBOR”) plus 1.75% per annum and was fully payable by January 6, 2011. The loan was fully paid on June 2010. New Reward Limited was related to the Group, as a director of the Company was also a director of and has beneficial interest in this company as at March 31, 2010.

10. Amounts Due from Related Companies


	March 31,		September 30,
	2010		2010
	HK$'000		HK$'000
Name of company
Gemstar Asia Limited		24		—
New Reward Limited		409		—

		433		—

The amounts due from related parties are unsecured, interest free and repayable on demand and mainly represent interest receivable for loan to a related company. These companies are related to the Group as certain directors of the Company are also directors of and have beneficial interests in these companies.

11. Trade Creditors and Accrued Charges


	March 31,		September 30,
	2010		2010
	HK$'000		HK$'000
Trade payables		132,606		152,433
Accrual for social security contribution		116,458		125,245
Accrual for long service payment		23,295		21,281
Accrual charges		55,560		65,527
Receipt in advance		16,052		15,917

Total trade creditors and accrued charges		343,971		380,403

12. Amount Due to a Director

The amount due to a director was unsecured, interest free and repayable on demand. The amount has been fully repaid in May 2010.

13. Amount Due to a Related Party

The amount due to a related party at March 31, 2010 and September 30, 2010 represent amount due to Hangzhou Youcheng Electron Co., Ltd. for purchases made from this company. The amount is unsecured and interest free. A director of the Company has beneficial interest in this company.

14. Derivatives Financial Instruments

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

•

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active market for identical assets or liabilities.

•

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

•

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Group’s financial assets at FVTPL and financial liabilities at FVTPL consist of foreign currency forward contracts and are categorized into Level 2. There has been no transfer between Level 1 and Level 2 of the financial instruments at FVTPL throughout the six months ended September 30, 2009 and 2010 and the details are as follows:


		March 31,		September 30,
Description	Category	2010		2010
		HK$'000		HK$'000
Financial assets at FVTPL
Foreign currency forward contracts	Level 2		1,101		495
Financial liabilities at FVTPL
Foreign currency forward contracts	Level 2		633		125

15. Capital Commitments


	March 31,		September 30,
	2010		2010
	HK$'000		HK$'000
Contracted for but not provided in the consolidated financial statements in respect of acquisition of property, plant and equipment		8,173		66,446
Authorised but not contracted for in the consolidated financial statements in respect of acquisition of property, plant and equipment		19,927		383,936

Total capital commitments		28,100		450,382

16. Operating Lease Commitments

At the end of the reporting period, the Group had commitments for future minimum lease payments under non-cancellable operating leases which fall due as follows:


	March 31,		September 30,
	2010		2010
	HK$'000		HK$'000
Within one year		622		229

Operating lease payments represented rentals payable by the Group for certain of its office properties. Leases negotiated for one to two years and rental was fixed during the lease term.

17. Related Party Transactions

Same as disclosed elsewhere, the Group also entered into the following significant transactions with related companies during the six months ended September 30, 2009 and 2010:

Six months ended

September 30,

Name of related company

Note

Nature of transactions

2009

2010

HK$'000

Hangzhou Youcheng Electron Co. Ltd.

(i)

Purchases

20,773

27,211

New Reward Limited

(i)

Interest income

—

298

Guangzhou Newshengtong Technology Co., Ltd.

(i)

Software maintenance

expenses


Note:

(i)		Certain directors of the Company are also directors of and have beneficial interests in these companies.

At March 31, 2010 and September 30, 2010, a director of the Company has provided personal guarantee of HK$109,500,000 and HK$109,500,000, respectively to banks in respect of general facilities granted to a subsidiary. Such personal guarantee has been reduced to approximately HK$100,500,000 at the date of this report.

Compensation of key management personnel

The remuneration of key management members of the Group during the six months ended September 30, 2009 and 2010 was as follows:


	2009		2010
	HK$'000		HK$'000
Short-term benefits		1,027		1,459

The remuneration of executives is determined by the directors of the Company having regard to the performance of individuals and market trends.

18. Events After The Reporting Period

The unaudited condensed consolidated financial statements were approved and authorised for issuance by the board of directors on January 18, 2011. The following events occurred subsequent to September 30, 2010:

On November 3, 2010, CG International Holdings Limited entered into an agreement with UEI Hong Kong Private Limited, a wholly owned subsidiary of UEI, to dispose of its entire 100% interest in the Company to UEI Hong Kong Private Limited, for a total consideration of approximately US$125.8 million, to be satisfied in cash and UEI’s common stock. The transaction was consummated as of November 3, 2010.

ENSON ASSETS LIMITED
(Incorporated in the British Virgin Islands with
limited liability)

Report and Consolidated Financial Statements
For the years ended 31 March, 2008, 2009 and 2010

ENSON ASSETS LIMITED

REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 MARCH, 2008, 2009 AND 2010


CONTENTS	PAGE(S)
INDEPENDENT AUDITOR’S REPORT		1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME		2
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION		3
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY		4
CONSOLIDATED STATEMENTS OF CASH FLOWS		5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS		6 - 43

INDEPENDENT AUDITOR’S REPORT

TO THE DIRECTORS OF ENSON ASSETS LIMITED

(Incorporated in the British Virgin Islands with limited liability)

We have audited the accompanying consolidated statements of financial position of Enson Assets Limited (the “Company”) and its subsidiaries (the “Group”) as of 31 March 2008, 2009 and 2010, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for the years then ended, all expressed in Hong Kong dollars. These financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Group as of 31 March 2008, 2009, and 2010, and the results of their operations and their cash flows for the years then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong, 18 January 2011

- 1 -

ENSON ASSETS LIMITED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED 31 MARCH, 2008, 2009 AND 2010


	NOTES		2008			2009			2010
			HK$			HK$			HK$
Revenues		5		1,036,670,252			1,037,699,713			1,164,233,090
Cost of revenues				(845,566,646	)		(895,902,559	)		(899,188,232	)

Gross profit				191,103,606			141,797,154			265,044,858
Investment income		6		1,750,673			1,424,227			951,166
Other income		7		7,362,398			17,061,301			24,845,894
Administrative expenses				(49,766,230	)		(59,641,627	)		(63,195,210	)
Distribution expenses				(25,302,234	)		(20,853,933	)		(22,170,008	)
Research and development costs		9		(14,480,741	)		(15,249,844	)		(16,363,469	)
Other expenses				(11,286,200	)		(2,130,820	)		(402,724	)
Other gains and losses		8		16,181,770			5,523,003			1,558,946
Finance costs — interest on bank borrowings wholly repayable within five years				(4,256,898	)		(2,220,682	)		(539,221	)
Loss on disposal of interest in a subsidiary				(445,652	)		—			—

Profit before tax		9		110,860,492			65,708,779			189,730,232
Taxation expense		10		(18,023,552	)		(6,894,275	)		(36,994,448	)

Profit for the year and attributable to the owners of the Company				92,836,940			58,814,504			152,735,784

Other comprehensive income
Exchange difference arising on translation of foreign operations				(1,910,050	)		(1,108,215	)		276,828
Exchange difference realised upon disposal of interest in a subsidiary				(247,473	)		—			—

				(2,157,523	)		(1,108,215	)		276,828

Total comprehensive income for the year and attributable to the owners of the Company				90,679,417			57,706,289			153,012,612

- 2 -

ENSON ASSETS LIMITED

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT 31 MARCH 2008, 2009 AND 2010


	NOTES		2008		2009		2010
			HK$		HK$		HK$
Non-current assets
Property, plant and equipment		11		317,905,419		338,423,031		343,884,984
Buildings under construction		12		2,295,981		9,041,951		—
Prepaid lease payments		13		998,583		1,241,414		3,894,186
Club debenture		14		885,000		885,000		885,000
Deposit on property, plant and equipment acquisition				8,213,516		3,001,209		1,839,729
Deferred tax assets		15		22,991,974		27,947,036		22,034,495

				353,290,473		380,539,641		372,538,394

Current assets
Inventories		16		127,880,885		85,698,647		149,995,066
Trade receivables, deposits and prepayments		17		171,828,798		162,125,376		205,797,409
Prepaid lease payments		13		19,416		26,780		81,460
Loan to a related company		18		—		—		93,165,600
Amounts due from related companies		19		1,547,382		1,550,631		433,315
Amount due from holding company		33		—		—		52,332
Derivative financial instruments		20		3,667,863		1,529,352		1,101,342
Short-term bank deposits		21		46,465,467		58,128,750		17,060,965
Bank balances and cash		21		55,870,626		52,375,747		166,621,468

				407,280,437		361,435,283		634,308,957

Current liabilities
Trade creditors and accrued charges		22		259,375,489		260,104,761		343,970,695
Bills payable		22		10,059,279		5,573,562		17,340,339
Amount due to a director		23		—		—		1,804,400
Amount due to a related company		24		—		3,991,423		6,119,448
Derivative financial instruments		20		3,167,855		1,074,946		633,277
Bank borrowings — due within one year		25		92,042,105		24,631,579		16,421,053
Tax payable				15,471,585		7,967,767		29,395,641

				380,116,313		303,344,038		415,684,853

Net current assets				27,164,124		58,091,245		218,624,104

Total assets less current liabilities				380,454,597		438,630,886		591,162,498

Non-current liability
Deferred tax liabilities		15		7,453,000		7,923,000		7,442,000

Net assets				373,001,597		430,707,886		583,720,498

Capital and reserves
Share capital		26		469,755		469,755		469,755
Reserves				372,531,842		430,238,131		583,250,743

Equity attributable to equity holders of the Company				373,001,597		430,707,886		583,720,498

- 3 -

ENSON ASSETS LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED 31 MARCH, 2008, 2009 AND 2010


	Share		Share		Statutory		Translation			Accumulated
	capital		premium		reserve		reserve			profits			Total
	HK$		HK$		HK$		HK$			HK$			HK$
Balance at 1 April 2007		469,755		81,746,638		6,656,268		(738,442	)		194,187,961			282,322,180
Profit for the year		—		—		—		—			92,836,940			92,836,940
Exchange differences arising on translation of foreign operations		—		—		—		(1,910,050	)		—			(1,910,050	)
Realised upon disposal of interest in a subsidiary		—		—		—		(247,473	)		—			(247,473	)

Total comprehensive income for the year		—		—		—		(2,157,523	)		92,836,940			90,679,417

Transfer		—		—		3,816,211		—			(3,816,211	)		—

Balance at 31 March 2008 and 1 April 2008		469,755		81,746,638		10,472,479		(2,895,965	)		283,208,690			373,001,597

Profit for the year		—		—		—		—			58,814,504			58,814,504
Exchange differences arising on translation of foreign operations		—		—		—		(1,108,215	)		—			(1,108,215	)

Total comprehensive income for the year		—		—		—		(1,108,215	)		58,814,504			57,706,289

Transfer		—		—		4,915,606		—			(4,915,606	)		—

Balance at 31 March 2009 and 1 April 2009		469,755		81,746,638		15,388,085		(4,004,180	)		337,107,588			430,707,886

Profit for the year		—		—		—		—			152,735,784			152,735,784
Exchange differences arising on translation of foreign operations		—		—		—		276,828			—			276,828

Total comprehensive income for the year		—		—		—		276,828			152,735,784			153,012,612

Transfer		—		—		7,995,655		—			(7,995,655	)		—

Balance at 31 March 2010		469,755		81,746,638		23,383,740		(3,727,352	)		481,847,717			583,720,498

Statutory reserve which consists of appropriations from the profit after taxation of the subsidiaries established in People’s Republic of China (the “PRC”), forms part of shareholders’ equity of the PRC subsidiaries. In accordance with the PRC Company Law and the Articles of Association of the PRC subsidiaries, these PRC subsidiaries are required to appropriate an amount equal to a minimum of 10% of their profits after taxation each year to a statutory reserve.

- 4 -

ENSON ASSETS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED 31 MARCH, 2008, 2009 AND 2010


	NOTE		2008			2009			2010
			HK$			HK$			HK$
OPERATING ACTIVITIES
Profit before tax				110,860,492			65,708,779			189,730,232
Adjustments for:
Depreciation				33,809,283			46,902,341			50,385,472
Allowance for inventories				11,072,802			7,214,932			2,522,564
Allowance for bad and doubtful debts				10,704,550			1,635,410			—
Unrealised exchange gain				(8,008,195	)		(667,867	)		(152,745	)
Interest on bank borrowings wholly repayable within five years				4,256,898			2,220,682			539,221
Loss on disposal of interest in a subsidiary				445,652			—			—
Amortisation of prepaid lease payments				20,042			22,161			26,293
Investment income				(1,750,673	)		(1,424,227	)		(951,166	)
Gain on disposal of property, plant and equipment				(72,554	)		(66,427	)		(460,078	)

Operating cash flows before movements in working capital				161,338,297			121,545,784			241,639,793
(Increase) decrease in inventories				(52,957,240	)		37,536,823			(66,570,363	)
(Increase) decrease in trade receivables, deposits and prepayments				(52,413,845	)		7,841,280			(43,645,298	)
Decrease in bills receivable				1,074,326			—			—
(Increase) decrease in derivative financial instrument assets				(3,667,863	)		2,138,511			428,010
Increase (decrease) in trade creditors and accrued charges				78,603,760			(10,104,900	)		83,038,018
Increase (decrease) in bills payable				3,883,510			(4,485,717	)		11,766,777
Increase in amount due to a related company				—			3,991,423			2,115,313
Increase (decrease) in derivative financial instruments liabilities				3,167,855			(2,092,909	)		(441,669	)

Cash generated from operations				139,028,800			156,370,295			228,330,581
Income taxes paid				(10,620,550	)		(18,584,530	)		(10,077,207	)
Interest paid				(4,256,898	)		(2,220,682	)		(539,221	)

NET CASH FROM OPERATING ACTIVITIES				124,151,352			135,565,083			217,714,153

INVESTING ACTIVITIES
Loan advance to a related company				—			—			(93,165,600	)
Purchase of property, plant and equipment				(81,049,035	)		(49,801,460	)		(31,755,814	)
Payment of buildings under construction				(38,959,978	)		(10,346,884	)		(11,309,687	)
Payment of prepaid lease payments				—			(249,433	)		(2,729,754	)
Payment of deposit paid for property, plant and equipment acquisition				(8,213,516	)		(3,001,209	)		(1,839,729	)
Interest received				1,750,673			1,424,227			951,166
Proceeds from disposal of property, plant and equipment				921,793			82,765			555,817
Disposal of interest in a subsidiary		29		(2,130,864	)		734,000			—
Repayment from (advance to) related companies				215,187			(3,249	)		1,117,316

NET CASH USED IN INVESTING ACTIVITIES				(127,465,740	)		(61,161,243	)		(138,176,285	)

FINANCING ACTIVITIES
Repayment of bank loans				(12,957,895	)		(67,410,526	)		(8,210,526	)
Advance from a director				—			—			1,804,400
New bank loan raised				60,000,000			—			—

NET CASH FROM (USED IN) FINANCING ACTIVITIES				47,042,105			(67,410,526	)		(6,406,126	)

NET INCREASE IN CASH AND CASH EQUIVALENTS				43,727,717			6,993,314			73,131,742
CASH AND CASH EQUIVALENTS AT 1ST APRIL				57,044,784			102,336,093			110,504,497
EFFECT OF FOREIGN EXCHANGE RATE CHANGES				1,563,592			1,175,090			46,194

CASH AND CASH EQUIVALENTS AT 31ST MARCH				102,336,093			110,504,497			183,682,433

ANALYSIS OF THE BALANCES OF CASH AND CASH EQUIVALENTS
Short term bank deposits				46,465,467			58,128,750			17,060,965
Bank balances and cash				55,870,626			52,375,747			166,621,468

				102,336,093			110,504,497			183,682,433

- 5 -

ENSON ASSETS LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 MARCH, 2008, 2009 AND 2010

GENERAL

The Company is a private limited company incorporated in the British Virgin Islands (“BVI”) with its registered office at P.O. Box 71, Craigmuir Chambers, Road Town, Tortola, British Virgin Islands. The address of principal place of business is located at Unit A, 15/F, Gemston Tower, 23 Man Lok Street, Hung Hom, Kowloon, Hong Kong. Prior to 3 November 2010, its immediate and ultimate holding company is CG International Holdings Limited (“CG International”), a private limited liability company incorporated in Cayman Islands. On 3 November 2010, CG International sold its entire interest in the Company to UEI Hong Kong Private Limited, a limited liability company incorporated in Hong Kong and a wholly owned subsidiary of Universal Electronics Inc. (“UEI”). UEI is a company incorporated under the laws of the State of Delaware in the United States of America and UEI has became the Company’s ultimate holding company since then.

The principal activity of the Company is investment holding. The principal activities of its subsidiaries are set out in note 34.

The consolidated financial statements are presented in Hong Kong dollars (“HK$”), which is different from the functional currency of the Company, which is in United States dollars.

Purpose of consolidated financial statements

These consolidated financial statements have been prepared for the special purpose of filing with the United States Securities and Exchange Commission in compliance with Rule 3-05 of Regulation S-X and Form 8-K under the Securities Exchange Act of 1934. This filing requirement is based on the Company being a significant business acquired by UEI.

APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRSs”)

The International Accounting Standards Board (“IASB”) has issued a number of new and revised International Accounting Standards (“IASs”), International Financial Reporting Standards (“IFRSs”), amendments and related Interpretations (“IFRICs”) (hereinafter collectively referred to as the “new IFRSs”) which are effective for the Company and its subsidiaries’ (collectively referred to as the “Group”) financial year beginning on 1 April 2009. For the purpose of preparing and presenting the financial statements, the Group has consistently adopted all these new IFRSs which are effective for the accounting period beginning on 1 April 2009 and throughout the years ended 31 March 2008, 2009 and 2010.

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ENSON ASSETS LIMITED

2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRSs”) — continued

At the date of issue of these financial statements, the IASB has issued the following new and revised standards, amendment and interpretations which are not yet effective during the years ended 31 March 2008, 2009 and 2010. The Group has not early adopted these standards, amendments and interpretations in the preparation of the financial statements for the years ended 31 March 2008, 2009 and 2010.


IFRSs (Amendments)		Amendments to IFRS 5 as part of Improvements to IFRSs 2008¹
IFRSs (Amendments)		Improvements to IFRSs April 2009²
IFRSs (Amendments)		Improvements to IFRSs 2010³
IAS 24 (Revised)		Related Party Disclosures⁷
IAS 27 (Revised)		Consolidated and Separate Financial Statements¹
IAS 32 (Amendments)		Classification of Rights Issues⁵
IAS 39 (Amendments)		Eligible Hedged Items¹
IFRS 1 (Amendments)		Additional Exemptions for First-time Adopters⁴
IFRS 1 (Amendments)		Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters⁶
IFRS 1 (Amendments)		Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters⁹
IFRS 7 (Amendments)		Disclosures — Transfers of Financial Assets⁹
IFRS 2 (Amendments)		Group Cash-settled Share-based Payment Transactions⁴
IFRS 3 (Revised)		Business Combinations¹
IFRS 9		Financial Instruments⁸
IAS 12 (Amendments)		Deferred Tax: Recovery of Underlying Assets¹⁰
IFRS 14 (Amendment)		Prepayments of a Minimum Funding Requirement⁷
IFRIC 17		Distributions of Non-cash Assets to Owners¹
IFRIC 19		Extinguishing Financial Liabilities with Equity Instruments⁶


¹		Effective for annual periods beginning on or after 1 July 2009

²		Amendments that are effective for annual periods beginning on or after 1 July 2009 and 1 January 2010, as appropriate

³		Effective for annual periods beginning on or after 1 July 2010 and 1 January 2011, as appropriate

⁴		Effective for annual periods beginning on or after 1 January 2010

⁵		Effective for annual periods beginning on or after 1 February 2010

⁶		Effective for annual periods beginning on or after 1 July 2010

⁷		Effective for annual periods beginning on or after 1 January 2011

⁸		Effective for annual periods beginning on or after 1 January 2013

⁹		Effective for annual periods beginning on or after 1 July 2011

¹⁰		Effective for annual periods beginning on or after 1 January 2012

The application of IFRS 3 (Revised) may affect the Group’s accounting for business combination for which the acquisition date is on or after 1 April 2010. IAS 27 (Revised) will affect the accounting treatment for changes in the Group’s ownership interest in a subsidiary.

- 7 -

ENSON ASSETS LIMITED

2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRSs”) — continued

IFRS 9 Financial Instruments introduces new requirements for the classification and measurement of financial assets and financial liabilities and will be effective from 1 January 2013, with earlier application permitted. The Standard requires all recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement to be measured at either amortised cost or fair value. Specifically, debt investments that (i) are held within a business model whose objective is to collect the contractual cash flows and (ii) have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost. All other debt investments and equity investments are measured at fair value. The application of IFRS 9 might affect the classification and measurement of the Group’s financial assets.

In relation to financial liabilities, the significant change relates to financial liabilities that are designated as at fair value through profit or loss. Specifically, under IFRS 9, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the presentation of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Previously, under IAS 39, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was presented in profit or loss.

The directors of the Company anticipate that the application of the other new and revised standards, amendments or interpretations will have no material impact on the consolidated financial statements.

3. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments, which are measured at fair values, as explained in the accounting policies set out below.

The consolidated financial statements have been prepared in accordance with the following accounting policies which conform to IFRSs.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

- 8 -

ENSON ASSETS LIMITED

SIGNIFICANT ACCOUNTING POLICIES — continued

Revenue recognition

Revenue is measured at fair value of the consideration received or receivable and represents amounts receivable for goods sold and service provided in the normal course of business, net of discount and sales related tax.

Revenue from sales of goods is recognised when goods are delivered, title has passed, there is persuasive evidence of an arrangement, the sales price is fixed or determinable and collectability is reasonably assured.

Tooling income is recognised when services are provided and accepted by customers.

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably.

Interest income from a financial asset is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

Property, plant and equipment

Property, plant and equipment including land and buildings held for use in the production are stated at cost less subsequent accumulated depreciation and accumulated impairment losses, if any.

Depreciation is recognised so as to write off the cost of items of property, plant and equipment over their estimated useful lives and after taking into account of their estimated residual value, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Leasehold land and buildings under development for future owner-occupied purpose

When the leasehold land and buildings are in the course of development for production or for administrative purposes, the leasehold land component is classified as a prepaid lease payment and amortised over a straight-line basis over the lease term. During the construction period, the amortisation charge provided for the leasehold land is included as part of costs of buildings under construction. Buildings under construction are carried at cost, less any identified impairment losses. Depreciation of buildings commences when they are available for use (i.e. when they are in the location and condition necessary for them to be capable of operating in the manner intended by management).

- 9 -

ENSON ASSETS LIMITED

3. SIGNIFICANT ACCOUNTING POLICIES — continued

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the year in which they are incurred.

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Leasehold land and building

The land and building elements of a lease of land and building are considered separately for the purpose of lease classification, unless the lease payments cannot be allocated reliably between the land and building elements, in which case, the entire lease is generally treated as a finance lease and accounted for as property, plant and equipment. To the extent the allocation of the lease payments can be made reliably, leasehold interests in land are accounted for as operating leases and amortised over the lease term on a straight-line basis.

Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recorded in the respective functional currency (i.e. the currency of the primary economic environment in which the entity operates) at the rates of exchanges prevailing on the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

- 10 -

ENSON ASSETS LIMITED

3. SIGNIFICANT ACCOUNTING POLICIES — continued

Foreign currencies — continued

Exchange differences arising on the settlement of monetary items, and on the re-translation of monetary items, are recognised in profit or loss in the period in which they arise.

For the purposes of presenting the consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into the presentation currency of the Group (i.e. Hong Kong dollars) at the rate of exchange prevailing at the end of the reporting period, and their income and expenses are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during the year, in which case, the exchange rates prevailing at the dates of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity under the heading the translation reserve. Such exchange differences are reclassified to profit or loss in the period in which the foreign operation is disposed.

Research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

Retirement benefits costs

Payments to the Group’s defined contribution retirement benefit plans, including Mandatory Provident Fund Scheme and state-managed retirement benefit schemes, are charged as an expense when employees have rendered services entitling them to the contributions.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of comprehensive income because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable nor deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary difference to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

- 11 -

ENSON ASSETS LIMITED

3. SIGNIFICANT ACCOUNTING POLICIES — continued

Taxation — continued

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is recognised in profit or loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in which case the deferred tax is also recognised in other comprehensive income or directly in equity respectively.

Club debenture

Club debenture is related to a membership club for indefinite term. The balance is stated at cost, less any identified impairment losses.

Impairment loss on tangible and intangible assets

At the end of the reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of impairment loss, if any.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average method.

- 12 -

ENSON ASSETS LIMITED

3. SIGNIFICANT ACCOUNTING POLICIES — continued

Financial instruments

Financial assets and financial liabilities are recognised in the consolidated statement of financial position when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets at fair value through profit or loss (“FVTPL”)) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets at FVTPL are recognised immediately in profit or loss.

Financial assets

The Group’s financial assets are classified into financial assets at FVTPL and loans and receivables. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. The accounting policies adopted in respect of each category of financial assets are set out below.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period to the net carrying amount on initial recognition.

Interest income is recognised on an effective interest basis for debt instruments other than those financial assets recognised as at FVTPL, of which interest income is included in net gains or losses.

Financial assets at fair value through profit or loss

The Group’s financial assets at FVTPL are financial assets held for trading.

A financial asset is classified as held for trading if:

•		it has been acquired principally for the purpose of selling in the near future; or

•		it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

•		it is a derivative that is not designated and effective as a hedging instrument.

Financial assets at FVTPL are measured at fair value, with changes in fair value arising from remeasurements recognised directly in profit or loss in the period in which they arise.

- 13 -

ENSON ASSETS LIMITED

3. SIGNIFICANT ACCOUNTING POLICIES — continued

Financial instruments — continued

Financial assets - continued

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables (including trade receivables, other receivables, loan to a related company, amounts due from related companies, amount due from holding company, short term bank deposits and bank balances and cash) are carried at amortised cost using the effective interest method, less any identified impairment losses (see accounting policy on impairment of financial assets below).

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of the reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been affected.

For loans and receivables, objective evidence of impairment could include:

•		significant financial difficulty of the issuer or counterparty; or

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

•		it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

For certain categories of financial asset, such as trade receivables, that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, observable changes in economic conditions that correlate with default on receivables and the financial performance of the customers.

For financial assets carried at amortised cost, an impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss.

For financial assets carried at amortised cost, if, in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment losses was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

- 14 -

ENSON ASSETS LIMITED

3. SIGNIFICANT ACCOUNTING POLICIES — continued

Financial instruments — continued

Financial liabilities and equity

Financial liabilities and equity instruments issued by a group entity are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The Group’s financial liabilities are generally classified into financial liabilities at FVTPL and other financial liabilities. The accounting policies adopted in respect of financial liabilities and equity instruments are set out below.

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 periods. The effective interest rate is the rate that exactly discounts estimated future cash payments 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 for debt instruments other than those financial liabilities classified as at FVTPL, of which interest expense is included in net gains or losses.

Financial liabilities at fair value through profit or loss

The Group’s financial liabilities at FVTPL are financial liabilities held for trading.

A financial liability is classified as held for trading if:

•		it has been incurred principally for the purpose of repurchasing in the near future; or

•		it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

•		it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at FVTPL are measured at fair value, with changes in fair value arising on remeasurement recognised directly in profit or loss in the period in which they arise.

Other financial liabilities

Other financial liabilities including trade payables, bills payable, amount due to a director, amount due to a related company and bank borrowings are subsequently measured at amortised cost, using the effective interest method.

Equity instruments

Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

- 15 -

ENSON ASSETS LIMITED

3. SIGNIFICANT ACCOUNTING POLICIES — continued

Financial instruments — continued

Derivative financial instruments

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of the reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the assets expire or, the financial assets are transferred and the Group has transferred substantially all the risks and rewards of ownership of the financial assets. 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.

Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or expires. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

4. KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in note 3, the directors of the Company are required to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. 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.

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.

- 16 -

ENSON ASSETS LIMITED

4. KEY SOURCES OF ESTIMATION UNCERTAINTY — continued

Allowance for trade receivables

An allowance for bad and doubtful debts is made when there is objective evidence of impairment. A considerable amount of judgment is required in assessing the ultimate realisation of these receivables including current creditworthiness and the past collection history of each customer. If the financial condition of customers of the Group was to deteriorate resulting in an impairment of their ability to make payments, additional allowances may be required. The Group’s carrying value of trade receivables as at 31 March 2008, 2009 and 2010 was HK$162,179,605, HK$152,490,658 and HK$195,529,853, respectively (net of allowance for bad and doubtful debts as at 31 March 2008, 2009 and 2010 of HK$10,704,550, HK$2,527,542 and HK$1,495,623, respectively).

Inventory valuation method and impairment

Inventory is valued at the lower of cost and net realisable value. Cost is determined using the weighted average method. Market price is generally the merchandise selling price quoted from the market of similar items. The Group reviews its inventory levels in order to identify slow-moving and obsolete inventories, where the Group identifies items of inventory having a market price lower than its carrying amount, the Group estimates the amount of inventory loss as allowance for slow-moving inventories. Where the estimated amount of allowance for slow-moving inventories are higher than expected, the Group could be required to change the recorded value of its inventories. The Group’s carrying value of inventory as at 31 March 2008, 2009 and 2010 was HK$127,880,885, HK$85,698,647 and HK$149,995,066, respectively.

Depreciation

The Group depreciates the property, plant and equipment over their estimated useful lives, using straight-line method, at the rates ranging from 4% to 33¹/₃% per annum. The estimated useful lives that the Group depreciates the property, plant and equipment reflect the directors’ estimate of the periods that the Group intends to derive future economic benefits from the use of the assets. For any instance where this evaluation process indicates impairment, the appropriate asset’s carrying values are written down to the recoverable amount and the amount of the write-down is charged against the profit or loss. The Group’s carrying value of property, plant and equipment as at 31 March 2008, 2009 and 2010 was HK$317,905,419, HK$338,423,031 and HK$343,884,984, respectively.

5. REVENUE


	2008		2009		2010
	HK$		HK$		HK$
Sales of remote control units		998,273,391		987,068,270		1,115,098,137
Tooling income and others		38,396,861		50,631,443		49,134,953

		1,036,670,252		1,037,699,713		1,164,233,090

- 17 -

ENSON ASSETS LIMITED

6. INVESTMENT INCOME


	2008		2009		2010
	HK$		HK$		HK$
Interest income on:
Short-term bank deposits and bank balances		1,750,673		1,424,227		542,472
Loan interest income from a related company		—		—		408,694

		1,750,673		1,424,227		951,166

7. OTHER INCOME


	2008		2009		2010
	HK$		HK$		HK$
An analysis of the Group’s other income is as follows:
Sales of other materials		3,211,302		9,803,346		4,879,859
Sample sales		1,849,505		4,168,420		5,722,358
Administration income from related companies (note a)		—		—		8,236,800
Service income from a related company (note b)		—		—		1,287,000
Sundry income		2,301,591		3,089,535		4,719,877

		7,362,398		17,061,301		24,845,894


Notes:

a.		Administration income of HK$8,236,800 represents income received from Gemstar Manufacturing Holdings Limited (“GMHL”) and its subsidiaries (collectively “GMHL Group”) for administrative services provided to GMHL Group from year 1999 to 2009 that are confirmed and settled by both parties in December 2009.

b.		Service income of HK$1,287,000 represents income received from Antares Holding Limited (“Antares”), a wholly owned subsidiary of GMHL, for services provided to Antares from year 2004 to 2007 that are confirmed and settled by both parties in December 2009.

These companies are related to the Group as certain directors of the Company are also directors of and have beneficial interests in these companies.

8. OTHER GAINS AND LOSSES


	2008		2009			2010
	HK$		HK$			HK$
Net exchange gain		15,609,208		5,502,178			1,085,209
Gain on disposal of property, plant and equipment		72,554		66,427			460,078
Net fair value change of derivative financial instruments - FVTPL		500,008		(45,602	)		13,659

		16,181,770		5,523,003			1,558,946

- 18 -

ENSON ASSETS LIMITED

9. PROFIT BEFORE TAX


	2008		2009		2010
	HK$		HK$		HK$
Profit before tax has been arrived at after charging (crediting):
Allowance for inventories (included in cost of sales)		11,072,802		7,214,932		2,522,564
Allowance for bad and doubtful debts (included in other expenses)		10,704,550		1,635,410		—
Cost of inventories recognised as an expense		845,566,646		895,902,559		899,188,232
Minimum lease payments paid in respect of rented premises		1,075,459		909,435		820,992
Research and development costs recognised as an expense (note a)		14,480,741		15,249,844		16,363,469
Depreciation		33,809,283		46,902,341		50,385,472
Amortisation of prepaid lease payments		20,042		22,161		26,293

Total depreciation and amortisation		33,829,325		46,924,502		50,411,765
Directors’ remuneration:
Fees		—		—		—
Others		1,395,000		2,410,400		4,602,400
Retirement benefit scheme contributions		12,000		12,000		12,000

		1,407,000		2,422,400		4,614,400
Other staff costs		189,711,536		214,472,465		246,474,654
Retirement benefit scheme contributions (excluding directors)		17,700,102		14,900,740		16,460,746

Total staff costs		208,818,638		231,795,605		267,549,800


Note:

a.		Included in research and development costs for the three years ended 31 March 2008, 2009 and 2010 are other staff costs of approximately HK$13,020,513, HK$13,584,105 and HK$14,636,968, respectively. The Group did not capitalise any research and development expenditure during the years ended 31 March 2008, 2009 and 2010.

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ENSON ASSETS LIMITED

10. TAXATION EXPENSE


	2008			2009			2010
	HK$			HK$			HK$
The charge comprises:
Current tax:
Hong Kong		11,798,000			4,875,000			21,439,672
Other jurisdictions		2,924,915			4,158,332			10,032,112

		14,722,915			9,033,332			31,471,784

Underprovision in prior years		5,259,120			2,003,933			33,297

Deferred taxation (note 15)
Current year		(3,026,812	)		(3,717,104	)		(3,122,969	)
Attributable to a change in tax rate		1,068,329			(425,886	)		8,612,336

		(1,958,483	)		(4,142,990	)		5,489,367

		18,023,552			6,894,275			36,994,448

Hong Kong Profits Tax was calculated at 17.5%, of the estimated assessable profit for the year ended 31 March 2008.

On 26 June 2008, the Hong Kong Legislative Council passed the Revenue Bill 2008 which reduced corporate profits tax rate from 17.5% to 16.5% effective from the year of assessment 2008/2009. Therefore, Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profit for the years ended 31 March 2009 and 2010. The deferred tax balance as at 1 April 2008 has been adjusted to reflect the tax rates that are expected to apply to the respective periods when the asset is realised or the liability is settled.

On 16 March 2007, the PRC promulgated the Law of the PRC on Enterprise Income Tax (the “New Law”) by Order No. 63 of the President of the PRC. On 6 December 2007, the State Council of the PRC issued Implementation Regulations of the New Law. The New Law and Implementation Regulations changed the tax rate from 33% to 25% for certain subsidiaries from 1 January 2008. The deferred tax balance as at 31 March 2008 has been adjusted to reflect the tax rates that are expected to apply to the respective periods when the asset is realised or the liability is settled.

Gemstar Technology (Yangzhou) Co. Ltd. (“GTY”) is a wholly foreign invested entity of manufacturing nature. In accordance with Foreign Enterprise Income Tax (“FEIT”) Laws in PRC, GTY was approved to be exempted from FEIT for two years starting from its first profit making year since its establishment and followed by a 50% tax relief for the next three years. GTY first profit making year was 2007. GTY is therefore exempted from FEIT for the year ended 31 March 2008 and from 1 April 2008 to 31 December 2008 and subject to a reduced tax rate of 12.5% from 1 January 2009 to 31 March 2010.

- 20 -

ENSON ASSETS LIMITED

10. TAXATION EXPENSE — continued

Gemstar Technology (China) Co. Ltd. (“GTC”) is a wholly foreign invested entity of manufacturing nature. GTC was qualified as export-oriented enterprise in year ended 31 December 2007 and is eligible for a tax concession at a reduced tax rate of 12% for that year. In November 2009, GTC was awarded the certificate of Hi-Technology Enterprise and is entitled to enjoy a reduced tax rate of 15% from 1 January 2009 to 31 December 2011. The applicable income tax rates of GTC are as follows:


For the year ended 31 March 2008:		12% from 1 April 2007 to 31 December 2007 25% from 1 January 2008 to 31 March 2008
For the year ended 31 March 2009:		25% from 1 April 2008 to 31 December 2008 15% from 1 January 2009 to 31 March 2009
For the years ended 31 March, 2010:		15%

Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

Taxation expense for the year can be reconciled to the profit before tax in the consolidated statement of comprehensive income as follows:


	2008			2009			2010
	HK$			HK$			HK$
Profit before tax		110,860,492			65,708,779			189,730,232

Tax at Hong Kong Profits Tax calculated at 17.5% for 2008 and 16.5% for 2009 and 2010		19,400,586			10,841,949			31,305,488
Tax effect of expenses not deductible for tax purposes		996,134			—			108,176
Tax effect of income not taxable for tax purposes		(545,804	)		(563,807	)		(439,940	)
Underprovision in prior years		5,259,120			2,003,933			33,297
Tax effect of tax losses not recognised		228,903			319,101			357,111
Effect of change in future tax rate on deferred tax assets and liabilities recognised		1,068,329			(425,886	)		8,612,336
Effect of different tax rates of subsidiaries operating in the PRC		1,179,179			4,597,167			8,122,236
Tax effect of tax exemption and tax concession granted to subsidiaries operating in the PRC		(8,779,285	)		(8,967,528	)		(12,079,784	)
Increase in deferred tax liability resulting from PRC withholding tax		—			—			697,000
Others		(783,610	)		(910,654	)		278,528

Income tax expense for the year		18,023,552			6,894,275			36,994,448

Details of deferred taxation are set out in note 15.

- 21 -

ENSON ASSETS LIMITED

11. PROPERTY, PLANT AND EQUIPMENT


	Leasehold
	land and
	factory					Furniture									Machinery,
	premises in		Leasehold			and			Office			Motor			equipment
	the PRC		improvements			fixtures			equipment			vehicles			and moulds			Total
	HK$		HK$			HK$			HK$			HK$			HK$			HK$
COST
At 1 April 2007		112,415,810		37,382,048			1,538,459			11,044,146			1,407,220			131,649,549			295,437,232
Transfer from buildings under construction		51,076,504		11,432,467			—			—			—			—			62,508,971
Additions		—		9,817,473			916,224			4,012,608			458,774			65,843,956			81,049,035
Disposals		—		—			—			(784,843	)		(144,140	)		(6,879,563	)		(7,808,546	)
Eliminated on disposal of a subsidiary (note 29)		—		(35,978	)		(51,739	)		(114,176	)		—			—			(201,893	)
Currency realignment		10,968,614		3,568,914			22,090			631,817			135,450			9,515,270			24,842,155

At 31 March 2008 and 1 April 2008		174,460,928		62,164,924			2,425,034			14,789,552			1,857,304			200,129,212			455,826,954
Transfer from buildings under construction		—		2,183,492			—			—			—			1,469,226			3,652,718
Additions		1,969,726		13,290,174			175,635			4,508,284			766,243			37,304,914			58,014,976
Disposals		—		—			—			(1,705,467	)		(19,000	)		(4,818,034	)		(6,542,501	)
Currency realignment		3,936,248		1,384,545			24,655			204,343			41,477			2,810,758			8,402,026

At 31 March 2009 and 1 April 2009		180,366,902		79,023,135			2,625,324			17,796,712			2,646,024			236,896,076			519,354,173
Transfer from buildings under construction		18,246,116		2,134,317			—			—			—			—			20,380,433
Additions		—		1,880,710			400,933			2,188,052			1,294,913			28,992,415			34,757,023
Disposals		—		—			—			(1,184,525	)		(742,560	)		(5,226,473	)		(7,153,558	)
Currency realignment		574,417		249,120			4,118			39,124			8,427			458,227			1,333,433

At 31 March 2010		199,187,435		83,287,282			3,030,375			18,839,363			3,206,804			261,120,245			568,671,504

DEPRECIATION
At 1 April 2007		26,250,235		10,910,323			1,250,179			4,638,762			886,667			57,235,679			101,171,845
Provided for the year		5,281,001		5,728,091			147,714			2,306,832			230,872			20,114,773			33,809,283
Eliminated on disposals		—		—			—			(784,843	)		(86,484	)		(6,087,980	)		(6,959,307	)
Eliminated on disposal of a subsidiary (note 29)		—		(29,982	)		(13,389	)		(65,531	)		—			—			(108,902	)
Currency realignment		2,895,626		1,354,694			8,141			383,366			99,276			5,267,513			10,008,616

At 31 March 2008 and 1 April 2008		34,426,862		17,963,126			1,392,645			6,478,586			1,130,331			76,529,985			137,921,535
Provided for the year		7,165,709		8,721,211			152,969			3,084,674			378,823			27,398,955			46,902,341
Eliminated on disposals		—		—			—			(1,689,129	)		(19,000	)		(4,818,034	)		(6,526,163	)
Currency realignment		791,374		405,601			2,776			94,319			25,848			1,313,511			2,633,429

At 31 March 2009 and 1 April 2009		42,383,945		27,089,938			1,548,390			7,968,450			1,516,002			100,424,417			180,931,142
Provided for the year		7,406,635		9,876,427			185,951			3,379,703			441,250			29,095,506			50,385,472
Eliminated on disposals		—		—			—			(1,161,967	)		(702,046	)		(5,193,806	)		(7,057,819	)
Currency realignment		148,460		101,762			1,147			21,813			5,578			248,965			527,725

At 31 March 2010		49,939,040		37,068,127			1,735,488			10,207,999			1,260,784			124,575,082			224,786,520

CARRYING VALUES
At 31 March 2008		140,034,066		44,201,798			1,032,389			8,310,966			726,973			123,599,227			317,905,419

At 31 March 2009		137,982,957		51,933,197			1,076,934			9,828,262			1,130,022			136,471,659			338,423,031

At 31 March 2010		149,248,395		46,219,155			1,294,887			8,631,364			1,946,020			136,545,163			343,884,984

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ENSON ASSETS LIMITED

11. PROPERTY, PLANT AND EQUIPMENT — continued

The above items of property, plant and equipment are depreciated on a straight-line basis at the following rates per annum, after taking into account of their estimate residual value.


Leasehold land and factory premises in the PRC		Over the shorter of the term of lease or 25 years
Leasehold improvements		Over the shorter of the term of lease or 25 years
Furniture and fixtures		12¹/2%
Office equipment		20%
Motor vehicles		20%
Machinery, equipment and moulds		12¹/2% to 33¹/3%

At 31 March 2008, 2009 and 2010, the Group did not obtain relevant building ownership certificates for its leasehold land and factory premises in the PRC with carrying amount of approximately HK$644,215, HK$1,965,257 and HK$1,689,334, respectively. In addition, as at 31 March 2008, 2009 and 2010, certain of the Group’s leasehold land and factory premises in the PRC with carrying amount of approximately HK$88,814,371, HK$8,316,598 and HK$18,421,487, respectively are located on area without obtaining relevant land use right certificate.

12. BUILDINGS UNDER CONSTRUCTION


	HK$
COST
At 1 April 2007		23,547,411
Additions		38,959,978
Transfer to property, plant and equipment		(62,508,971	)
Currency realignment		2,297,563

At 31 March 2008 and 1 April 2008		2,295,981
Additions		10,346,884
Transfer to property, plant and equipment		(3,652,718	)
Currency realignment		51,804

At 31 March 2009 and 1 April 2009		9,041,951
Additions		11,309,687
Transfer to property, plant and equipment		(20,380,433	)
Currency realignment		28,795

At 31 March 2010		—

- 23 -

ENSON ASSETS LIMITED

13.		PREPAID LEASE PAYMENTS

The Group’s prepaid lease payments are located in the PRC.

At 31 March 2008, 2009 and 2010, the Group did not obtain relevant land use right certificates for its leasehold land in the PRC with carrying amount of approximately HK$1,017,999, HK$292,809 and HK$2,846,620, respectively.


	2008		2009		2010
	HK$		HK$		HK$
Analysed for reporting purposes as:
Current asset		19,416		26,780		81,460
Non-current asset		998,583		1,241,414		3,894,186

		1,017,999		1,268,194		3,975,646

14. CLUB DEBENTURE


	2008, 2009 & 2010
	HK$
At cost		885,000

Club debenture is tested for impairment annually and whenever there is an indication that it may be impaired. The directors of the Company are of the opinion that no impairment loss was identified for years ended 31 March 2008, 2009 and 2010 by reference to the market value.

15. DEFERRED TAXATION

The following is the analysis of the deferred tax balances for financial reporting purposes:


	2008			2009			2010
	HK$			HK$			HK$
Deferred tax assets		22,991,974			27,947,036			22,034,495
Deferred tax liabilities		(7,453,000	)		(7,923,000	)		(7,442,000	)

		15,538,974			20,024,036			14,592,495

- 24 -

ENSON ASSETS LIMITED

15. DEFERRED TAXATION — continued

The following are the major deferred tax assets (liabilities) recognised and movements thereon during the years ended 31 March 2008, 2009 and 2010:


							Accrual on
							social security
	Accelerated						contribution			Undistributed
	tax						and long			profits of
	depreciation			Tax losses			service payment			subsidiaries			Others			Total
	HK$			HK$			HK$			HK$			HK$			HK$
At 1 April 2007		(2,382,000	)		1,116,000			10,340,648			—			3,379,352			12,454,000
Effect of change in tax rate		21,322			—			(889,000	)		—			(200,651	)		(1,068,329	)
(Charge) credit to profit or loss		(4,002,322	)		(1,116,000	)		7,333,862			—			811,272			3,026,812
Currency realignment		—			—			1,126,491			—			—			1,126,491

At 31 March 2008 and 1 April 2008		(6,363,000	)		—			17,912,001			—			3,989,973			15,538,974
Effect of change in tax rate		425,886			—			—			—			—			425,886
(Charge) credit to profit or loss		(846,591	)		—			4,897,611			—			(333,916	)		3,717,104
Currency realignment		(724	)		—			308,388			—			34,408			342,072

At 31 March 2009 and 1 April 2009		(6,784,429	)		—			23,118,000			—			3,690,465			20,024,036
Effect of change in tax rate		(356,000	)		—			(6,986,800	)		—			(1,269,536	)		(8,612,336	)
Credit (charge) to profit or loss		1,490,473			—			3,020,305			(697,000	)		(690,809	)		3,122,969
Currency realignment		1,477			—			51,046			—			5,303			57,826

At 31 March 2010		(5,648,479	)		—			19,202,551			(697,000	)		1,735,423			14,592,495

At 31 March 2008, 2009 and 2010, the Group had unused tax losses of approximately HK$1,785,000, HK$3,684,000 and HK$5,864,000, respectively available for offset against future taxable profits. No deferred tax asset has been recognised due to the unpredictability of future profit streams. All tax losses may be carried forward indefinitely.

16. INVENTORIES


	2008		2009		2010
	HK$		HK$		HK$
Raw materials		69,953,985		39,559,508		85,018,910
Work in progress		34,468,085		23,864,020		34,041,901
Finished goods		23,458,815		22,275,119		30,934,255

		127,880,885		85,698,647		149,995,066

- 25 -

ENSON ASSETS LIMITED

17. TRADE RECEIVABLES, DEPOSITS AND PREPAYMENTS


	2008			2009			2010
	HK$			HK$			HK$
Trade receivables		172,884,155			155,018,200			197,025,476
Less: allowance for bad and doubtful debts		(10,704,550	)		(2,527,542	)		(1,495,623	)

Total trade receivables		162,179,605			152,490,658			195,529,853
Other receivables, deposits and prepayments		9,649,193			9,634,718			10,267,556

		171,828,798			162,125,376			205,797,409

The Group allows an average credit period of 38 days, 40 days and 40 days to customers during the three years ended 31 March 2008, 2009 and 2010, respectively.

Before accepting any new customer, the Group has assessed the potential customer’s credit quality and defined credit limits by customer. Limits attributed to customers are reviewed once a year, and the Group reviews the repayment history of receivables by each customer with reference to the payment terms stated in contracts to determine the recoverability of a trade receivable. In the opinion of the directors of the Company, 60%, 84% and 77% of the trade receivables as at 31 March 2008, 2009 and 2010 that are neither past due nor impaired have good credit quality at the end of the reporting period with reference to past settlement history.

Included in the Group’s trade receivables balance as at 31 March 2008, 2009 and 2010 are debtors with an aggregate carrying amount of approximately HK$65,347,426, HK$23,852,017 and HK$44,849,996, respectively which are past due at the end of the reporting period for which the Group has no impairment loss, because historical experience is that the receivables are generally recoverable as supported by on-going settlements by customers. The Group does not hold any collateral over these balances.

Aging of trade receivables presented based on invoiced date which are past due but not impaired


	2008		2009		2010
	HK$		HK$		HK$
0 - 30 days		—		—		76,575
31 - 60 days		26,586,432		1,953,570		22,426,182
61 - 90 days		18,888,083		17,406,525		17,727,819
Over 90 days		19,872,911		4,491,922		4,609,420

Total		65,347,426		23,852,017		44,839,996

The Group performed assessment on individual trade receivables and recognised an allowance on specific balances.

- 26 -

ENSON ASSETS LIMITED

17. TRADE RECEIVABLES, DEPOSITS AND PREPAYMENTS — continued

Movement in the allowance for bad and doubtful debts


	2008			2009			2010
	HK$			HK$			HK$
Balance at beginning of the year		17,389			10,704,550			2,527,542
Impairment losses recognised		10,704,550			1,635,410			—
Written off during the year		(17,389	)		(9,812,418	)		(1,031,919	)

Balance at end of the year		10,704,550			2,527,542			1,495,623

Included in the allowance for doubtful debts as at 31 March 2008, 2009 and 2010 are individually impaired trade receivables with an aggregate balance of approximately HK$10,704,550, HK$2,527,542 and HK$1,495,623, respectively, of which the Group has chased for settlements from customers but the amounts remained unsettled. The Group does not hold any collateral over these balances.

18. LOAN TO A RELATED COMPANY

The amount as at 31 March 2010 represents the loan to New Reward Limited denominated in United States dollars (“USD”). The Group has assessed the credit quality of the related company before providing the loan to a related company. The loan to a related company was neither past due nor impaired and no history of default was noted. The loan is unsecured, bearing interest at Hong Kong Interbank Offered Rate (“HIBOR”) plus 1.75% per annum and fully payable by 6 January 2011. This company is related to the Group as a director of the Company is also a director of and has beneficial interest in this company. Effective interest rate per annum at 31 March 2010 is 1.88%. The amount has been fully repaid in June 2010.

19. AMOUNTS DUE FROM RELATED COMPANIES


	2008		2009		2010
	HK$		HK$		HK$
Name of company
Gemstar Manufacturing Holdings Limited		1,529,857		1,532,105		—
Gemstar Asia Limited		17,525		18,526		24,621
New Reward Limited		—		—		408,694

		1,547,382		1,550,631		433,315

The Group has assessed the credit quality of the amounts due from related companies before providing the advances to the related companies. The amounts were neither past due nor impaired and no history of default were noted. The amounts are unsecured, interest free and repayable on demand. These companies are related to the Group as certain directors of the Company are also directors of and have beneficial interests in these companies.

- 27 -

ENSON ASSETS LIMITED

20. DERIVATIVE FINANCIAL INSTRUMENTS


	2008		2009		2010
	HK$		HK$		HK$
Other financial assets
Foreign currency forward contracts at net settlement (not under hedge accounting)		3,667,863		1,529,352		1,101,342

Other financial liabilities
Foreign currency forward contracts at net settlement (not under hedge accounting)		3,167,855		1,074,946		633,277

At 31 March 2008, 2009 and 2010, the Group has outstanding forward foreign exchange contracts entered into to buy/sell a specified notional amount of USD at a specified exchange rate.

31 March 2008

Financial assets


Notional amount	Maturity date	Exchange rate
Eight contracts with total purchase of approximately RMB55,809,000 and sell USD7,600,000 at the date of settlement	From 18 April 2008 to 18 July 2008	Range from USD1 to RMB7.2682 and USD1 to RMB7.4847

Financial liabilities


Notional amount	Maturity date	Exchange rate
Six contracts with total purchase of USD7,600,000 and sell approximately RMB55,118,000 at the date of settlement	From 18 April 2008 to 18 July 2008	Range from USD1 to RMB7.2002 and USD1 to RMB7.3247

31 March 2009

Financial assets


Notional amount	Maturity date	Exchange rate
Four contracts with total purchase of USD10,000,000 and sell approximately RMB65,565,000 at the date of settlement	From 3 April 2009 to 9 July 2009	Range from USD1 to RMB6.5240 and USD1 to RMB6.6212

- 28 -

ENSON ASSETS LIMITED

20. DERIVATIVE FINANCIAL INSTRUMENTS — continued

31 March 2009 - continued

Financial liabilities


Notional amount	Maturity date	Exchange rate
Four contracts with total purchase of approximately RMB33,253,000 and sell USD5,000,000 at the date of settlement	From 1 April 2009 to 7 July 2009	Range from USD1 to RMB6.6307 and USD1 to RMB6.6935

31 March 2010

Financial assets


Notional amount	Maturity date	Exchange rate
Twenty-six contracts with total purchase of USD26,000,000 and sell approximately RMB175,155,000 at the date of settlement	From 1 April 2010 to 24 February 2011	Range from USD1 to RMB6.6224 to USD1 to RMB6.8140

Financial liabilities


Notional amount	Maturity date	Exchange rate
Twenty-six contracts with total purchase of approximately RMB176,559,000 and sell USD26,000,000 at the date of settlement	From 1 April 2010 to 22 February 2011	Range from USD1 to RMB6.7233 to USD1 to RMB6.8490

At 31 March 2008, 2009 and 2010, the fair value of the Group’s foreign currency derivative financial instruments are measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contracts.

21. SHORT-TERM BANK DEPOSITS AND BANK BALANCES AND CASH

Short-term bank deposits represented time deposits made by the Group which are between seven days to three months depending on the immediate cash requirement of the Group, and such deposit carry interest at market rates. Bank balances of the Group earn interest at floating rates based on the daily bank deposit market rate.

- 29 -

ENSON ASSETS LIMITED

22. TRADE PAYABLES AND ACCRUED CHARGES/BILLS PAYABLE


	2008		2009		2010
	HK$		HK$		HK$
Trade payables		111,364,231		93,714,820		132,605,902
Accrual for social security contribution		72,290,000		93,724,000		116,458,000
Accrual for long service payment		11,758,949		19,029,965		23,295,171
Accrual charges		50,051,111		43,574,895		55,560,130
Receipt in advance		13,911,198		10,061,081		16,051,492

		259,375,489		260,104,761		343,970,695

The average credit period on purchases of goods is 60 days. The Group has financial risk management policies in place to ensure that all payables are within the credit time frame.

Bills payable as at 31 March 2008, 2009 and 2010 are aged within 90 days.

23.

AMOUNT DUE TO A DIRECTOR

The amount due to a director is unsecured, interest free and repayable on demand.

24.

AMOUNT DUE TO A RELATED COMPANY


	2008		2009		2010
	HK$		HK$		HK$
Name of the company
Hangzhou Youcheng Electron Co., Ltd.		—		3,991,423		6,119,448

The amount represents purchases made from the above related party and is unsecured and interest free. A director of GTC and GTY is also director of and has beneficial interests in this company.

The credit period is 30 days.

25. BANK BORROWINGS

Borrowings comprises:


	Effective interest rate									Carrying amount
	2008			2009			2010			2008		2009		2010
										HK$		HK$		HK$
Floating rate borrowings		5.06	%		2.89	%		2.03	%		92,042,105		24,631,579		16,421,053

Repayable on demand											92,042,105		24,631,579		16,421,053

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ENSON ASSETS LIMITED

25. BANK BORROWINGS — continued

The bank borrowings are variable-rate borrowings denominated in Hong Kong dollars which carry interest at a premium plus Hong Kong Interbank Offered Rate per annum for the years ended 31 March 2008, 2009 and 2010.

At the end of the reporting period, the Group has the following undrawn borrowing facilities:


	2008		2009		2010
	HK$		HK$		HK$
Floating rate — expiring beyond one year		63,940,721		121,226,438		98,659,661

26. SHARE CAPITAL


	Number
	of shares		Share capital
	2008, 2009		2008, 2009
	& 2010		& 2010
	US$		US$
Ordinary shares of USD1 each
Authorised		80,000		80,000

Issued and fully paid		60,225		60,225

Shown in the financial statements as			HK$	469,755

27. CAPITAL RISK MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged throughout the reported years. The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued share capital, reserves and accumulated profits.

The directors of the Company review the capital structure on an annual basis. As part of this review, the directors consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the directors, the Group will balance its overall capital structure through the payment of dividends, new share issues as well as the issue of new debt.

- 31 -

ENSON ASSETS LIMITED

28. FINANCIAL INSTRUMENTS

28a. Categories of financial instruments


	2008		2009		2010
	HK$		HK$		HK$
Financial assets
FVTPL — derivative financial instruments		3,667,863		1,529,352		1,101,342
Loans and receivables (including cash and cash equivalents)		267,130,743		264,576,842		481,720,186

Financial liabilities
FVTPL — derivative financial instruments		3,167,855		1,074,946		633,277
Amortised cost		213,465,615		127,911,384		174,291,142

28b. Financial risk management objectives and policies

The Group’s major financial instruments include trade receivables, other receivables, loan to a related company, amounts due from related companies, amount due from holding company, derivative financial instruments, short-term bank deposits, bank balances and cash, trade payables, bills payable, amount due to a director, amount due to a related company, and bank borrowings. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

There has been no significant change to the Group’s exposure to market risks and manner in which it mange and measure the risks.

Market risk

Currency risk

The Group has foreign currency sales and purchases and certain bank balances, trade receivables and trade payables that are denominated in foreign currencies, which expose the Group to foreign currency risk. During the year 2008, 2009 and 2010, approximately 2.5%, 2.1% and 0.2% of the Group’s sales are denominated in currencies other than the functional currency of the relevant group entity making the sale, whilst approximately 78.3%, 86.3% and 81.2% of costs are denominated in currencies other than the functional currency of the relevant group entity.

- 32 -

ENSON ASSETS LIMITED

28. FINANCIAL INSTRUMENTS — continued

28b. Financial risk management objectives and policies — continued

Market risk - continued

Currency risk — continued

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:


	2008			2009			2010
	HK$			HK$			HK$
Assets
HK	$	5,157,526			4,675,311			3,167,338
Japanese Yen (“JPY”)		638,079			644,046			738,975
European dollar (“EURO”)		5,832,583			4,894,818			5,010,224
RMB		—			16,417			5,682

Liabilities
HK$		(163,105,427	)		(61,455,747	)		(69,247,432	)
JPY		(40,820	)		(3,467,870	)		(6,240,461	)
Euro		—			—			(31,449	)

HK$ monetary assets and liabilities


	2008			2009			2010
	HK$			HK$			HK$
Trade and other receivables		1,658,880			587,520			893,963
Amounts due from related companies		1,547,382			1,550,631			433,315
Bank balances and cash		1,951,264			2,537,160			1,840,060
Trade and other payables		(61,004,043	)		(35,862,969	)		(43,090,104	)
Bills payable		(10,059,279	)		(961,199	)		(7,931,875	)
Amount due to a director		—			—			(1,804,400	)
Bank borrowings		(92,042,105	)		(24,631,579	)		(16,421,053	)

		(157,947,901	)		(56,780,436	)		(66,080,094	)

JPY monetary assets and liabilities


	2008			2009			2010
	HK$			HK$			HK$
Bank balances and cash		638,079			644,046			737,799
Trade and other receivables		—			—			1,176
Trade and other payables		(40,820	)		(42,930	)		—
Bills payable		—			(3,424,940	)		(6,240,461	)

		597,259			(2,823,824	)		(5,501,486	)

- 33 -

ENSON ASSETS LIMITED

28. FINANCIAL INSTRUMENTS — continued

28b. Financial risk management objectives and policies — continued

Market risk - continued

Currency risk — continued

Euro monetary assets and liabilities


	2008		2009		2010
	HK$		HK$		HK$
Short-term bank deposits		5,224,047		—		—
Bank balances and cash		608,536		4,894,818		5,010,224
Trade and other payables		—		—		(31,449	)

		5,832,583		4,894,818		4,978,775

RMB monetary assets


	2008		2009		2010
	HK$		HK$		HK$
Bank balances and cash		—		16,417		5,682

The Group currently does not have a foreign currency hedging policy. However, the management monitors foreign exchange exposure by closely monitoring the movement of the relevant foreign currency rates and will enter into foreign currency options or forward contracts, when and where appropriate.

Sensitivity analysis

As HK$ is pegged against the USD under the linked exchange rate system, the Group’s exposure to HK$ exchange rate risk is minimal. The Group is mainly exposed to the fluctuations in JPY, Euro and RMB against USD.

The following table details the Group’s sensitivity to a 5% increase and decrease in functional currency of the respective group entity against the relevant foreign currencies. 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 outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 5% change in foreign currency rates at the end of each reporting period. A positive number below indicates an increase in profit when the USD strengthen 5% against the relevant currencies. For a 5% weakening of the USD against the relevant currencies, there would be an equal and opposite impact on the post-tax profit.


	JPY							Euro									RMB
	2008			2009		2010		2008			2009			2010			2008		2009			2010
	HK$			HK$		HK$		HK$			HK$			HK$			HK$		HK$			HK$
Profit or loss		(24,995	)		126,369		221,984		(244,094	)		(219,043	)		(200,894	)		—		(735	)		(229	)

- 34 -

ENSON ASSETS LIMITED

28. FINANCIAL INSTRUMENTS — continued

28b. Financial risk management objectives and policies — continued

Market risk - continued

Currency risk — continued

The Group has outstanding forward foreign exchange contracts entered into to buy/sell a specified notional amount of USD/RMB at a specified exchange rate. If the foreign exchange rate of the respective forward foreign exchange contracts had been higher/lower by 2% at the end of each reporting period and all other variables were held constant, the Group’s post-tax profit for the three years ended 31 March 2008, 2009 and 2010 would increase/decrease by approximately HK$15,310, HK$732,693 and HK$34,211, respectively.

Cash flow interest rate risk

The Group is exposed to cash flow interest rate risk in relation to the variable-rate loan to a related company, variable-rate bank deposits and bank borrowings (see note 18, 21 and 25 for details).

The Group’s exposure to interest rates on financial liabilities are detailed in the liquidity risk management section of this note. The Group’s cash flow interest rate risk is mainly concentrated on the fluctuation of HIBOR arising from the bank borrowings.

Sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for loan to a related company and variable-rate bank borrowings at the end of the reporting period. No sensitivity is presented for variable-rate bank deposits and bank balances as the impact are insignificant. For variable-rate loan to a related company and bank borrowings, the analysis is prepared assuming the relevant amount outstanding at the end of reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group’s post-tax profit for the three years ended 31 March 2008, 2009 and 2010 would decrease/increase by approximately HK$385,196, HK$110,226 and HK$309,664, respectively.

- 35 -

ENSON ASSETS LIMITED

28. FINANCIAL INSTRUMENTS — continued

28b. Financial risk management objectives and policies — continued

Credit risk

The Group’s maximum exposure to credit risk in the event of the counterparties failure to perform their obligations as at 31 March 2008, 2009 and 2010 in relation to each class of recognised financial assets is the carrying amount of those assets as stated in the consolidated statement of financial position. In order to minimise the credit risk, the management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual debt at each of the reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Group’s credit risk is significantly reduced.

The credit risk for bank deposits and bank balances exposed is considered minimal as such amounts are placed with banks with good credit ratings.

The Group has concentration of credit risk on the Group’s trade receivables as the Group does not have large numbers of customers. The Group are concentrated in one industry sectors, namely the sales of remote control units. The outstanding balance of the five largest customers which are international well known companies and also engaged in the business of sales of electronic products, represented approximately 61.2%, 88.9% and 83.7% of the trade receivables of the Group as at 31 March 2008, 2009 and 2010, respectively.

In order to minimise the credit risk, management continuously monitors the level of exposure to ensure that follow-up actions and/or corrective actions are taken promptly to lower the risk exposure or to recover overdue balances.

Other than concentration of credit risk on liquid funds which are deposited with several banks with high credit ratings, amounts due from related companies which are with several of the Group’s related companies, and loan to a related company, and save as disclosed elsewhere in the consolidated financial statements, the Group does not have any other significant concentration of credit risk.

- 36 -

ENSON ASSETS LIMITED

28. FINANCIAL INSTRUMENTS — continued

28b. Financial risk management objectives and policies — continued

Liquidity risk

In the management of the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group’s operations and mitigate the effects of fluctuation in cash flows.

The following table details the Group’s remaining contractual maturity for its financial liabilities based on the agreed repayment terms. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curve at the end of the reporting periods.

Liquidity and interest risk tables


	Weighted
	average				3 months		Total
	effective		Less than		to		undiscounted		Carrying
	interest rate		3 months		1 year		cash flows		amount
	%		HK$		HK$		HK$		HK$
2008
Non-derivative financial liabilities
Trade payables		—		111,364,231		—		111,364,231		111,364,231
Bills payable		—		10,059,279		—		10,059,279		10,059,279
Bank borrowings		5.06		92,042,105		—		92,042,105		92,042,105

				213,465,615		—		213,465,615		213,465,615

Derivatives — net settlement
Foreign exchange forward contracts				2,231,387		936,468		3,167,855		3,167,855


	Weighted
	average				3 months		Total
	effective		Less than		to		undiscounted		Carrying
	interest rate		3 months		1 year		cash flows		amount
	%		HK$		HK$		HK$		HK$
2009
Non-derivative financial liabilities
Trade creditors		—		89,169,093		4,545,727		93,714,820		93,714,820
Bills payable		—		5,573,562		—		5,573,562		5,573,562
Amount due to a related company		—		3,991,423		—		3,991,423		3,991,423
Bank borrowings		2.89		24,631,579		—		24,631,579		24,631,579

				123,365,657		4,545,727		127,911,384		127,911,384

Derivatives — net settlement
Foreign exchange forward contracts				715,766		359,180		1,074,946		1,074,946

- 37 -

ENSON ASSETS LIMITED

28. FINANCIAL INSTRUMENTS — continued

28b. Financial risk management objectives and policies — continued

Liquidity risk — continued

Liquidity and interest risk tables — continued


	Weighted
	average				3 months		Total
	effective		Less than		to		undiscounted		Carrying
	interest rate		3 months		1 year		cash flows		amount
	%		HK$		HK$		HK$		HK$
2010
Non-derivative financial liabilities
Trade payables		—		126,964,893		5,641,009		132,605,902		132,605,902
Bills payable		—		17,340,339		—		17,340,339		17,340,339
Amount due to a director		—		1,804,400		—		1,804,400		1,804,400
Amount due to a related company		—		6,119,448		—		6,119,448		6,119,448
Bank borrowings		2.03		16,421,053		—		16,421,053		16,421,053

				168,650,133		5,641,009		174,291,142		174,291,142

Derivatives — net settlement
Foreign exchange forward contracts				126,045		507,232		633,277		633,277

28c. Fair value

The fair value of financial assets and financial liabilities are determined as follows:

•

the fair value of financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

•

The fair value of foreign currency forward contracts is estimated using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contracts.

The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the consolidated financial statements approximate to their fair values.

- 38 -

ENSON ASSETS LIMITED

28. FINANCIAL INSTRUMENTS — continued

28c. Fair value — continued

Fair value measurements recognised in the consolidated statement of financial position

•

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active market for identical assets or liabilities.

•

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Group’s financial assets at FVTPL and financial liabilities at FVTPL consist of foreign currency forward contracts and are categorized into Level 2. There has been no transfer between Level 1 and Level 2 of the financial instruments at FVTPL throughout the years ended 31 March 2008, 2009 and 2010 and the details are as follows:


		2008		2009		2010
		HK$		HK$		HK$
Financial assets at FVTPL
Foreign currency forward contracts	Level 2		3,667,863		1,529,352		1,101,342

Financial liabilities at FVTPL
Foreign currency forward contracts	Level 2		3,167,855		1,074,946		633,277

- 39 -

ENSON ASSETS LIMITED

29. DISPOSAL OF A SUBSIDIARY

In January 2008, the Group disposed of its 100% equity interest in CG Japan Limited to an independent third party for a consideration of HK$734,000 (equivalent to JPY10,000,000).


	2008
	HK$
NET ASSETS DISPOSED OF
Property, plant and equipment		92,991
Other receivables and prepayments		768,317
Bank balances and cash		2,130,864
Other payables and accruals		(1,565,047	)

		1,427,125
Release on exchange reserve		(247,473	)
Loss on disposal		(445,652	)

Total consideration		734,000

Satisfied by:
Receivables from disposal of a subsidiary		734,000

Net cash outflow arising on disposal
Cash consideration		—
Bank balances and cash disposed of		(2,130,864	)

		(2,130,864	)

The subsidiary disposed of during the year ended 31 March 2008 has had no significant impact to the Group’s results and cash flows during that year.

30. CAPITAL COMMITMENTS


	2008		2009		2010
	HK$		HK$		HK$
Contracted for but not provided in the consolidated financial statements in respect of acquisition of property, plant and equipment		10,449,000		11,089,491		8,172,928
Authorised but not contracted for in the consolidated financial statements in respect of acquisition of property, plant and equipment		11,852,129		8,901,814		19,926,771

		22,301,129		19,991,305		28,099,699

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ENSON ASSETS LIMITED

31. OPERATING LEASE COMMITMENTS

At the end of the reporting period, the Group had commitments for future minimum lease payments under non-cancellable operating leases which fall due as follows:


	2008		2009		2010
	HK$		HK$		HK$
Within one year		710,543		621,642		621,642

Operating lease payments represented rentals payable by the Group for certain of its office properties. Leases negotiated for one to two years and rental was fixed during the lease term.

32. PROVIDENT FUND SCHEMES

The Group has retirement schemes covering a substantial portion of its employees in Hong Kong. The principal schemes are defined contribution schemes. The assets of these schemes are held separately from those of the Group in funds under the control of independent trustees.

With effect from 1 December 2000, the Group joined a Mandatory Provident Fund Scheme (“MPF Scheme”) for all its new employees in Hong Kong employed therefrom or existing employees wishing to join the MPF Scheme. The MPF Scheme is registered with the Mandatory Provident Fund Scheme Authority under the Mandatory Provident Fund Schemes Ordinance. The assets of the MPF Scheme are held separately from those of the Group in funds under the control of an independent trustee. Under the rules of the MPF Scheme, the employer and its employees are required to make contributions to the MPF Scheme at 5% of relevant payroll cost or at maximum HK$1,000. The only obligation of the Group in respect of MPF Scheme is to make the required contributions under the MPF Scheme.

The employees of the Group’s subsidiaries in the PRC participated in the state-managed retirement benefit scheme operated by the government of the PRC. The subsidiaries are required to contribute certain percentage of their payroll costs to the retirement benefit scheme to fund the benefits. The obligation of the Group with respect to the retirement benefit scheme is to make the specified contributions.

For the year ended 31 March 2008, 2009 and 2010, the amounts charged to profit or loss represent contributions paid or payable to schemes by the Group of approximately HK$17,712,000, HK$14,913,000 and HK$16,473,000, respectively.

At 31 March 2008, 2009 and 2010, the Group does not have any forfeited contributions, which arose upon employees leaving the retirement benefit schemes and which are available to reduce the contributions payable in future years.

- 41 -

ENSON ASSETS LIMITED

33. RELATED PARTY TRANSACTIONS

Same as disclosed elsewhere and apart from details of the balances with related parties disclosed in the consolidated statement of financial position on page 3 and in notes 18, 19, 23 and 24, the Group also entered into the following significant transactions with related companies during the years ended 31 March 2008, 2009 and 2010:


Name of related company	Note	Nature of transactions	2008		2009		2010
			HK$		HK$		HK$
Hangzhou Youcheng Electron Co. Ltd.	(i)	Purchases		—		12,659,389		41,057,679
Gemstar Manufacture Holding	(i)	Administration income		—		—		8,236,800
Limited and its subsidiaries		Service income		—		—		1,287,000
New Reward Limited	(i)	Interest income		—		—		408,694
Guangzhou Newshengtong Technology Co., Ltd.	(i)	Software maintenance expenses		6,256		6,789		6,812
	(i)	Purchase of software		46,924		—		—


Note:

(i)		Certain directors of the Company are also directors of and have beneficial interests in these companies.

At 31 March 2008, 2009 and 2010, a director of the Company has provided personal guarantee of HK$109,500,000 to banks in respect of general facilities granted to a subsidiary. Such personal guarantee has been reduced to approximately HK$107,000,000 subsequent to 31 March 2010.

Amount due from holding company is unsecured, interest free and repayable on demand.

Compensation of key management personnel

The remuneration of key management members of the Group during the year was as follows:


	2008		2009		2010
	HK$		HK$		HK$
Short-term benefits		3,509,000		4,197,000		7,296,000

The remuneration of executives is determined by the directors of the Company having regard to the performance of individuals and market trends.

- 42 -

ENSON ASSETS LIMITED

34. PARTICULARS OF PRINCIPAL SUBSIDIARIES OF THE COMPANY

Particulars of the Company’s subsidiaries as at 31 March 2008, 2009 and 2010 are as follows:

Place

Proportion of nominal

and date of

value of issued capital/

incorporation/

registered capital held

Principal

Name of subsidiary

establishment

by the Company

registration activities

Directly

Indirectly

CG Asia Limited

British Virgin Islands (“BVI”)
25 June 2004

—

100

Holding of patent

CG Group Limited

BVI
25 June 2004

100

—

Investment holding

C.G. Development Limited

Hong Kong
7 April 1989

100

—

Investment holding and trading of electronic products

C.G. Technology Limited

Hong Kong
28 April 1989

100

—

Provision of engineering consultancy service

C. G. Timepiece Limited

Hong Kong
2 June 2004

—

100

Trading of electronic products

Gemstar Polyfirst Limited

Hong Kong
3 November 1989

100

—

Holding of club debenture

GTC

PRC
15 August 1992

—

100

Manufacturing and trading of electronic products

GTY

PRC
16 December 2004

—

100

Manufacturing and trading of electronic products

35. EVENTS AFTER THE REPORTING PERIOD

The consolidated financial statements were approved and authorised for issued by the Board of Directors on 18 January 2011. The following events occurred subsequent to 31 March 2010:

On 3 November 2010, CG International entered into an agreement with UEI Hong Kong Private Limited, a wholly owned subsidiary of UEI, to dispose of its entire 100% interest in the Company to UEI Hong Kong Private Limited, for a total consideration of approximately US$125.8 million, to be satisfied in cash and UEI’s common stock. The transaction was consummated as of 3 November 2010.

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