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MULTIVISION INTELLIGENT SURVEILLANCE LIMITED

Full Year Financial Statement And Dividend Announcement

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year

Income statement of the Group for full year ended 31 March 2003 with comparative statement for full year ended 31 March 2002

	The Group
	HK$'000		%
	Full Year FY2003	Full Year FY2002	Increase/ (Decrease)

1(a) Turnover	95,292	25,101	280%
1(b) Cost of Sales	(45,205)	(12,168)	272%
1(c) Gross Profit	50,087	12,933	287%
1(d) Investment income	-	-	-
1(e) Other net income including interest income	2,036	824	147%

2(a) Profit/(loss) from operations before taxation, minority interests, extraordinary items and finance costs; but after charging depreciation and amortisation, foreign exchange gain/(loss) and allowance for doubtful receivables as follows:	30,173	1,629	1752%

2(b)(i) Depreciation	(443)	(372)	19%
2(b)(ii) Amortisation of development costs	(7,396)	(2,782)	166%
2(b)(iii) Foreign exchange gain/(loss)	(3)	(59)	-95%
2(b)(iv) Allowance for doubtful receivables	(784)	-	NM
2(c) Exceptional items	-	-	-

2(d)(i) Finance costs	(15)	(203)	-93%
2(d) Profit/(loss) from ordinary activities before taxation, minority interests and extraordinary items	30,158	1,426	2015%

2(e) Income derived from associated companies	-	-	-
2(f) Profit/(loss) from ordinary activities before taxation, minority interests and extraordinary items	30,158	1,426	2015%
2(g) Less taxation	(4,838)	(228)	2022%
2(g)(i) Profit/(loss) from ordinary activities after taxation; but before minority interests and extraordinary items	25,320	1,198	2014%
2(g)(ii) Less minority interests	-	-	-
2(h) Profit/(loss) from ordinary activities after taxation and minority interest; but before extraordinary items	25,320	1,198	2014%
2(i)(i) Extraordinary items	-	-	-
2(i)(ii) Less minority interests thereon	-	-	-
2(i)(iii) Extraordinary items attributable to members of the Group	-	-	-
2(i)(iv) Transfer to/from Exchange Reserve	-	-	-
2(i)(v) Transfer to Capital Reserve	-	-	-
2(i)(vi) Transfer to Reserve Fund	-	-	-
2(j) Profit/(loss) from ordinary activities after taxation, minority interests and extraordinary items attributable to members of the Group	25,320	1,198	2014%

NM stands for "not meaningful"

1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year

Balance Sheet

	The Group HK$'000		The Company HK'000
	As at 31.03.03	As at 31.03.02	As at 31.03.03	As at 31.03.02
*Non-current assets*

Investments in a subsidiary	-	-	19,462	-
Fixed assets	1,474	1,045	-	-
Intangible assets	51,115	14,296	-	-
Deferred taxation	-	80	-	-
	52,589	15,421	19,462	-
*Current Assets*

Inventories	4,493	3,603	-	-
Trade receivables	25,670	13,656	-	-
Prepayments, deposits and other receivables	2,173	1,205	215	-
Amount due from a subsidiary	-	-	58,831
Cash and cash equivalents	49,667	10,908	-	-
	82,003	29,372	59,046	-
*Less:* *Current liabilities*

Obligations under hire purchase contract	133	133	-	-
Trade and other payables	10,958	10,760	139	-
Amounts due to directors	750	-	150	-
	11,841	10,893	289	-
*Net current assets*	70,162	18,479	58,757	-

*Total assets less current liabilities*	122,751	33,900	78,219	-

*Less:* *Non-current liabilities*

Obligations under hire purchase contract	22	156	-	-
Deferred taxation	4,758	-	-	-
	4,780	156	-	-
*Net assets*	*117,971*	*33,744*	*78,219*	-

*Shareholders' equity*

Share Capital	24,369	28,672	24,369	-
Reserves	93,602	5,072	53,850	-
	*117,971*	*33,744*	*78,219*	-

1(b)(ii) Aggregate amount of group's borrowings and debt securities

Amount repayable in one year or less, or on demand

As at 31/03/2003

As at 31/03/2002

Secured	Unsecured	Secured	Unsecured

HK$133,000	HK$0	HK$133,000	HK$0

Amount repayable after one year

As at 31/03/2003

As at 31/03/2002

Secured	Unsecured	Secured	Unsecured

HK$22,000	HK$0	HK$156,000	HK$0

Details of any collateral

The Group has no other borrowings or debts securities other than that as disclosed above.

1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year

Consolidated cash flow statement for the Group

	Full Year FY2003	Full Year FY2002
	HK$'000	HK$'000

*Operating activities*
Profit from ordinary activities before taxation	30,158	1,426
Adjustment for:
Interest expense	15	203
Interest income	(95)	(53)
Depreciation of fixed assets	654	372
Amortisation of intangible assets	7,396	2,782
Gain on disposal of fixed assets	(6)	-
Operating profit before changes in working capital	38,122	4,730

Changes in working capital
Increase in inventories	(890)	(2,371)
Increase in trade receivables	(12,014)	(9,466)
Increase in prepayments, deposits and other receivables	(968)	(1,086)
(Decrease)/increase in trade and other payables	(7,802)	8,561
Increase in amounts due to directors	750	-
Cash generated from operations	17,198	368

Income tax refund	-	3
Interest received	95	53
Interest paid	(15)	(203)
Net cash inflow from operating activities	17,278	221

*Investing activities*
Payment for purchase of fixed assets	(1,095)	(970)
Payment for development costs	(5,415)	(2,088)
Technology transfer fee paid	(30,800)	(1,800)
Proceeds from sales of fixed assets	17	-

Net cash outflow from investing activities	(37,293)	(4,858)

*Financing activities*
Capital contributions	-	20,000
Repayment of principal under hire purchase contract	(133)	(119)
Decrease in amount due to related company	-	(1,922)
Issue of shares	71,836	-
Share issue expenses	(12,929)	-

Net cash inflow from financing activities	58,774	17,959

Net increase in cash and cash equivalents	38,759	13,322

Cash and cash equivalents at beginning of the year	10,908	(2,414)

*Cash and cash equivalents at end of the year*	*49,667*	*10,908*

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year

Statement of changes in equity

*The Group*	Share Capital	Contributed Surplus	Statutory Reserves	Share Premium	Other Reserves	Retained Profits	Total
	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000

*At 1 April 2002*	28,672	0	0	0	0	5,072	33,744
Surrender of original shares as part of the Group's share capital restructuring	(28,672)	-	-	-	-	-	(28,672)
Ordinary shares issued nil paid on incorporation and subsequently credited as fully paid as part of the Group's capital restructuring	19,462	9,210	-	-	-	-	28,672
New shares issued for public subscription	4,907	-	-	66,929	-	-	71,836
Share issue expenses	-	-	-	(12,929)	-	-	(12,929)
Net profit for the year	-	-	-	-	-	25,320	25,320

*At 31 March 2003*	*24,369*	*9,210*	0	*54,000*	0	*30,392*	*117,971*

*The Company*	Share Capital	Contributed Surplus	Statutory Reserves	Share Premium	Other Reserves	Retained Profits	Total
	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000

*At 1 April 2002*	0	0	0	0	0	0	0

Ordinary shares issued nil paid on incorporation and subsequently credited as fully paid as part of the Group's capital restructuring	19,462	-	-	-	-	-	19,462

New shares issued for public subscription	4,907	-	-	66,929	-	-	71,836

Share issue expenses	-	-	-	(12,929)	-	-	(12,929)

Net profit for the year	-	-	-	-	-	(150)	(150)

*At 31 March 2003*	*24,369*	0	0	*54,000*	0	*(150)*	*78,219*

1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares or cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year

As at 31 March 2003, the total number of unexercised options under the Company's Executives' Share Option Scheme was nil (31 March 2002 : Nil).

2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard)

The figures have not been audited or reviewed.

3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of matter)

Not applicable.

4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied

The Group has adopted the same accounting policies and methods of computation in the financial statements for the current reporting year compared with the audited financial statements as at 31 March 2002.

5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change

Not applicable.

6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends

Earnings/(Loss) per ordinary share for the year after deducting any provision for preference dividends:-
	FY 2003	FY 2002
6a. Based on weighted average number of ordinary shares in issue (Please see note below)	8.49 HK cents	0.43 HK cents

6b. On a fully diluted basis (Please see note below)	Not Applicable	Not Applicable

Note 6a : The calculation of earnings per share is based on the Group's profit attributable to shareholders

and the weighted average of 298,191,853 (FY2002 : 278,026,100) ordinary shares in issue during the year.

Note 6b : There were no dilutive potential ordinary shares during the year and therefore diluted earnings per
share are not presented.

7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year

Net tangible asset backing per ordinary share based on existing issued share capital as at the end of the period on		FY 2003	FY 2002
		HK$0.19 per share	HK$0.07 per share

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on

Sales turnover
Our turnover amounted to approximately HK$95.3 million for the year ended 31 March 2003, a growth rate of 280% from that of approximately HK$25.1 million in FY2002. The growth in turnover was mainly due to the improved sales for our core products, namely the NetServers and the UCWs. The overall increase in our sales was mainly due to increasing market acceptance of our products due to more extensive marketing and promotional activities as well as the successful implementation of visible projects and promising user site references as well as executed distribution strategy.

In terms of the geographical segmentation of our sales turnover recorded for the year ended 31 March 2003, we experienced significant growth in our sales to the PRC and North America of approximately 13.9 times and 6.0 times respectively. We have also made a sales breakthrough into the digital video surveillance product marketplace in Macau which, we strongly believe, will bring substantial sales orders to our Company in the future. The overall sales turnover generated from Hong Kong and the rest of the world was steady over the year while the decrease in sales turnover was recorded in Australia as a result of the completion of the Sydney's New South Wales State Rail Authority project in early this year.

Cost of sales
Our cost of sales increased by approximately HK$33.0 million or 272% to HK$45.2 million for the year ended 31 March 2003 from approximately HK$12.2 million in FY2002. Despite the tremendous competitive pressure in driving down the average selling price of our products, we have been able to achieve an improved gross profit margin from last year's 51.5% to 52.6% as a result of (i) an increase in the sales of higher margin products such as customised NetServers and the UCWs in contrast to the lower-end NetServer DIY boards and standard NetServer boxes; (ii) the benefit gained from economies of scale in our production as we continue to increase our production volume and thereby decrease the average cost of materials and assembly charges; (iii) the cost savings made in the last quarter brought by the acquisition of a perpetual license for use of our software driver; and (iv) the release of high end hardware MPEG4 compression NetServers with better margin.

Operating expenses
Our total operating expenses increased by approximately HK$9.9 million or 81% to approximately HK$22.0 million for the year ended 31 March 2003 from approximately HK$12.1 million in FY2002.

Our distribution expenses amounted to approximately HK$7.5 million for the year ended 31 March 2003, an increase of approximately HK$2.6 million or 53% from that of approximately HK$4.9 million in FY2002. This increase was primarily due to an expansion in our sales force and the set up of a new subsidiary in Macau
and sales and marketing representative offices in Singapore, the PRC and the USA respectively.

Our administrative expenses amounted to approximately HK$7.0 million for the year ended 31 March 2003, an increase of approximately HK$2.6 million or 58% from that of approximately HK$4.4 million in FY2002. This increase was primarily due to the expansion of our technical support and administration team to cope with the significant business expansion of the Company.

Our amortisation of development costs amounted to approximately HK$7.4 million for the year ended 31 March 2003, an increase of approximately HK$4.6 million or 166% from that of approximately HK$2.8 million in FY2002. This increase was primarily due to the significant investments made in our product development programs during the year under review in order to ensure our technology leadership in the marketplace.

Gross profit and net profit after taxation
Our gross profit amounted to approximately HK$50.1 million for the year ended 31 March 2003, an increase of HK$37.2 million or 287% from that of approximately HK$12.9 million in FY2002. This growth corresponds to the extent of growth in sales turnover we achieved in FY 2003.

We registered a profit after taxation attributable to the shareholders of approximately HK$25.3 million for the year ended 31 March 2003, an increase of approximately HK$24.1 million or 2,014% from that of approximately HK$1.2 million in FY2002. The main reason for this significant growth in profit after taxation was that our digital video surveillance businesses were only in the kick-off stage during most of the time in FY2002, while such businesses had been successfully taken off in FY2003 on the basis of a well-developed customer base and proven reference sites.

Intangible assets
Our intangible assets amounted to HK$51.1 million at 31 March 2003, an increase of HK$36.8 million from HK$14.3 million at 31 March 2002. Such increase was primarily the results of (i) an acquisition of a perpetual licence of use of the software driver which is an integral cost element of our core products; and (ii) the additional amount spent by the Group in financing its new products development projects during the year under review.

Inventories

Our inventories amounted to HK$4.5 million at 31 March 2003, an increase of HK$0.9 million from HK$3.6 million at 31 March 2002. Such extent of approximately 25% increase in inventories level is insignificant in view of the 280% growth in sales turnover in the year of 2003 which were partly due to our success in maintaining a relatively stable and accurate order forecasting mechanism with our major distribution partners and partly due to our ability to work with our PRC assembly and manufacturing partner in stabilizing a reliable manufacturing and delivery leadtime, both of which enabled our Company to keep the practical minimum level of inventories in terms of both assembled whole units as well as major parts and components.

Trade receivables

Our trade receivables amounted to HK$25.7 million at 31 March 2003, an increase of HK$12.0 million from HK$13.7 milion at 31 March 2002. This increase was the result of the 280% increase in sales turnover over that in last year and the average turnover days of our trade receivable was approximately 75 days (versus 130 days in FY2002) which showed significant improvement in our credit control and this was in line with our overall credit policy of granting a credit period of between 60 to 90 days to the majority of our long-term business partners.

Trade and other payables

Our trade and other payables amounted to HK$11.0 million at 31 March 2003, an increase of HK$0.2 million from HK$10.8 million at 31 March 2002. This increase was the result of the prompt settlements to our PRC assembly and manufacturing partners in return for a guarantee of prompt manufacturing and delivery leadtime and quality of works which were critical both in enabling our Company to maintain a good reputation as a reliable supplier of good quality products and in enabling our Company to keep a reasonably low level of inventories as explained in the above section.

Deferred tax liabilities
The Group's deferred tax liabilities of HK$4.8 million at 31 March 2003 (nil at 31 March 2002) were primarily related to temporary differences of deferred product development costs arising under Hong Kong taxation.

Share Capital and reserves
The significant changes in the Group's share capital and reserves were the results of (i) a capital restructuring exercise carried out during this year in preparation for the listing of our Group on the Singapore Stock Exchange; and (ii) the issue of new shares of the Company in relation to our listing on the Singapore Stock Exchange on 18 December 2002.

Cashflow

Our operating activities recorded net cash inflow of HK$17.3 million for the year ended 31 March 2003, an increase of HK$17.1 million from HK$0.2 million for the same period in FY2002. This was primarily contributed by the operating profit generated less amounts applied in settling our trade and other payables and the increase in financing our trade receivables and inventories.

Our investing activities recorded net cash outflow of HK$37.3 million for the year ended 31 March 2003, an increase of HK$32.4 million from HK$4.9 million for the same period in FY2002. This was primarily due to the settlement of the acquisition of a perpetual license for use of software driver as mentioned above and the payment of product research and development costs during the year under review.

Our financing activities recorded net cash inflow of HK$58.8 million for the year ended 31 March 2003, an increase of HK$40.8 million from HK$18.0 million for the same period of FY2002. Such increase was primarily the result of the issue of the Company's new shares in relation to the listing of the Company on the Singapore Stock Exchange on 18 December 2002.

Overall, our Group recorded a consolidated net increase in cash and cash equivalents of HK$38.8 million for the year ended 31 March 2003.

9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results

None.

10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months

The competitive environment will be intense as more low end products continue to enter the market especially in highly price-sensitive regions such as the PRC and Taiwan. We have released new entry level and high end NetServer models to cope with the competition. Our Company will also focus on the high end enterprise and customised solutions for customers and expand into the lightly-tapped geographical markets such as Europe, the Middle East as well as Southeast Asia. On the other hand, our Company will continue investing significant financial and human resources in product development to ensure the roll out of technologically advanced new products and solutions in order to maintain our competitive edge in the marketplace.

Based on current business trends, the total sales turnover and operating results of the Group are likely to improve in the next financial year.

11. Dividend

(a) Current Financial Period Reported On

Any dividend

declared

for the current financial period reported on?

None

(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year?

None

(c) Date payable

N. A.

(d) Books closure date

NIL

12. If no dividend has been declared/recommended, a statement to that effect

No dividend has been recommended.

PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT
(This part is not applicable to Q1, Q2, Q3 or Half Year Results)

13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year

Segmental Results

	The Group Turnover HK$'000		The Group Profit before taxation HK$'000
	The Group Turnover HK$'000		The Group Profit before taxation HK$'000
	Full Year FY2003	Full Year FY2002	Full Year FY2003	Full Year FY2002
*By geographical location*

The PRC	62,886	4,516	21,257	(46)
Hong Kong	6,394	4,650	275	422
Macau	3,536	-	1,204	-
Australia	1,541	9,846	271	942
Taiwan	708	1,173	157	22
North America	18,071	2,528	6,562	252
Europe	898	528	199	39
Others	1,258	1,860	233	(205)

	95,292	25,101	30,158	1,426

14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments

Please refer to section 8 above.

15. A breakdown of sales

Please refer to section 13 above.

16. A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year

Total Annual Dividend (Refer to Para 16 of Appendix 7.2 for the required details)

	Latest Full Year ()	Previous Full Year ()
Ordinary	0	0
Preference	0	0
Total:	0	0

BY ORDER OF THE BOARD

Mak Tin Sang
Company Secretary
26 June 2003

Submitted by Mak Tin Sang, Company Secretary on 26 June 2003 to the SGX.

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