MULTIVISION INTELLIGENT SURVEILLANCE LIMITED

Half 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





MULTIVISION INTELLIGENT SURVEILLANCE LIMITED GROUP INCOME STATEMENT FOR THE FIRST HALF YEAR ENDED 30 SEPTEMBER 2003 (Expressed in Hong Kong thousand dollars)
		Note	1st half year 2004 HK$'000	1st half year 2003 HK$'000
Turnover			56,104	39,213
Cost of sales			(21,683)	(19,615)
Gross profit			34,421	19,598
Other income			532	417
Distribution expenses			(5,867)	(2,968)
Administrative expenses			(6,207)	(2,593)
Product development costs			(4,453)	(1,935)
Profit from operations			18,426	12,519
Finance cost			(7)	(8)
Profit from ordinary activies before taxation			18,419	12,511
Taxation			(2,947)	(2,002)
Profit after taxation for the period			15,472	10,509

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





MULTIVISION INTELLIGENT SURVEILLANCE LIMITED BALANCE SHEET AS AT 30 SEPTEMBER 2003 (Expressed in Hong Kong thousand dollars)
			The Group HK$'000		The Company HK$'000
		Note	As at 30.09.03	As at 31.03.03	As at 30.09.03	As at 31.03.03
Non-current assets
Investment in subsidiary				-	19,462	19,462
Fixed assets			2,498	1,474	-	-
Intangible assets			59,665	51,115	-	-
			62,163	52,589	19,462	19,462
Current assets
Inventories			6,741	4,493	-	-
Trade receivables (net)			27,652	25,670	-	-
Prepayments, deposits and other receivables			26,518	2,173	-	215
Amount due from subsidiary			-	-	152,474	58,831
Cash and cash equivalents			117,000	49,667	-	-
			177,911	82,003	152,474	59,046
Current liabilities
Obligations under hire purchase contract			89	133
Trade and other payable			4,835	10,958	195	139
Amount due to Directors			630	750	150	150
			5,554	11,841	345	289
Net current assets			172,357	70,162	152,129	58,757
Non-current liability
Obligation under hire purchase contract			-	22	-	-
Deferred taxation			7,705	4,758	-	-
Amount due to ultimate holding company			-		-	-
			7,705	4,780	-	-
Net assets			226,815	117,971	171,591	78,219
Representing:
Capital and reserves
Share capital			29,241	24,369	29,241	24,369
Capital contribution reserve			-	-	142,500	54,000
Contributed surplus			9,210	9,210	-	-
Share premium			142,500	54,000	-	-
Net profit/(loss) for period			15,472	25,320	-	(150)
Retained profits/(loss) b/f			30,392	5,072	(150)	-
			226,815	117,971	171,591	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 30/09/2003

As at 31/03/2003

Secured	Unsecured	Secured	Unsecured
HK$89,000	HK$0	HK$133,000	HK$0



Amount repayable after one year



As at 30/09/2003

As at 31/03/2003

Secured	Unsecured	Secured	Unsecured
HK$0	HK$0	HK$22,000	HK$0



Details of any collateral

Not applicable.




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





MULTIVISION INTELLIGENT SURVEILLANCE LIMITED GROUP CASH FLOW STATEMENT AS AT 30 SEPTEMBER 2003 (Expressed in Hong Kong thousand dollars)
			Note	1st Half Year 2004 HK$'000	1st Half Year 2003 HK$'000
Operating activities
Profit from ordinary actitivies before taxation				18,419	12,511
Adjustment for:
Interest expenses				7	8
Interest income				(221)	(4)
Depreciation of fixed assets				503	231
Amortisation of intangible assets				4,453	1,935
Amortisation of perpetual license				2,800
Gain on disposal of fixed assets				-	(5)
Operating profit before changes in working capital				25,961	14,677
Changes in working capital
(Increase)/decrease in inventories				(2,248)	1,275
(Increase)/decrease in trade receivable				(1,982)	(716)
(Increase)/decrease in prepayment , deposits, and other receivable				656	(735)
(Decrease)/increase in trade and other payable				(6,123)	(6,282)
(Decrease)/increase in trade and other payable				(120)	-
Cash generated from operations				16,144	8,219
Interest received				221	4
Interest paid				(7)	(8)
Net cash inflow/(outflow) from operating actitivies				16,358	8,215
Investing activities
Payment for purchase of fixed assets				(1,527)	(304)
Payment for development costs				(15,804)	(6,270)
Prepayment for investment in subsidiary				(25,000)	-
Proceeds from sales of fixed assets				-	5
Net cash inflow/(outflow) from Investing actitivies				(42,331)	(6,574)
Financing activities
Capital contributions				88,500	-
Repayment of principal under hire purchase contract				(66)	(67)
Issue of shares				4,872	-
Share issue expenses				-	-
Net cash inflow from financing activities				93,306	(67)
Net increase in cash and cash equivalents				67,333	1,574
Cash and cash equivents at beginning of the year				49,667	10,908
Cash and cash equivalents at end of this period				117,000	12,482
An analysis of cash and cash equivalents in as follows:
Cash at bank and in hand				117,000	12,482
An analysis of cash and cash equivalents in as follows:
Cash at bank and in hand				117,000	12,482






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





The Group
		Share	Contributed	Statutory	Share	Other	Retained
		Capital	Surplus	Reserves	Premium	Reserves	Profits	Total
		HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000
At 1 April 2003		24,369	9,210	0	54,000	0	30,392	117,971
Surrender of original shares as part of the Group's share Capital restructuring
		-	-	-	-	-	-	-
Ordinary shares issued nil paid on incorporation and Subsequently credited as fully paid as part of the Group's capital restructuring
		-	-	-	-	-	-	-
New shares issued for public subscription
		4,872	-	-	88,500	-	-	93,372
Share issue expenses		-	-	-	-	-	-	-
Net profit for the quarter		-	-	-	-	-	15,472	15,472
At 30 September 2003		29,241	9,210	0	142,500	0	45,864	226,815






The Company
		Share	Contributed	Statutory	Share	Other	Retained
		Capital	Surplus	Reserves	Premium	Reserves	Profits	Total
		HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000
At 1 April 2003		24,369	0	0	54,000	0	(150)	78,219
Ordinary shares issued nil
paid on incorporation and
subsequently credited as
fully paid as part of the
Group's capital restructuring		-	-	-	-	-	-	-
New shares issued for
public subscription		4,872	-	-	88,500	-	-	93,372
Share issue expenses		-	-	-	-	-	-	-
Net profit for the year		-	-	-	-	-	-	-
At 30 September 2003		29,241	0	0	142,500	0	(150)	171,591






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

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)

These figures have not been audited nor 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

Except as described in section 5 below, the Group has adopted the same accounting policies and methods of computation in the financial statements for the current reporting period compared with the audited financial statements for the year ended 31 March 2003.

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
Starting from the second quarter of FY2004, we have reclassified the amortization of perpetual license costs from "product development costs" to "cost of sales" in the Group's income statement in order to provide a more relevent understanding of the nature of this cost element. Such cost reclassification does not have any profit/loss impact on the Group's income statement.





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 the Year after deducting any provision for preference dividends:
		FY 2004	FY 2003
Based on weighted average number of ordinary shares in issue (Please see note below)		4.04 HK cents	0.95 HK cents
On a fully diluted basis (Please see note below)		N. A.	N. A.


Note 6a : The calculation of earnings per share is based on the Group's profit attributable to shareholders and the weighted average of 382,926,050 (FY2003 : 348,126,100) 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





		FY 2004	FY 2003
Net asset value for the Company per ordinary share based on existing issue share capital as at the end of the period on 30 September 2003		HK$ 0.41 per share	Not Applicable
Net asset value for the Group per ordinary share based on existing issue share capital as at the end of the period on 30 September 2003		HK$ 0.54 per share	HK$0.10 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
Our turnover amounted to approximately HK$56.1 million for the first half year of FY2004, a growth rate of 1.43 times from that of approximately HK$39.2 million for the same period of FY2003. The growth in turnover was due mainly to the expansion of our distribution sales in major operational regions including Hong Kong, China, North America, and Macau.

Our gross profit amounted to approximately HK$34.4 million for the first half year of FY2004, a growth rate of 1.76 times from that of approximately HK$19.6 million for the same period of FY2003. Our averaged gross profit margin improved from 50.0% in the first half year of FY2003 ended 30 September 2002 to 61.3% for the same period this year. This improvement was due mainly to (i) the decrease in our general cost of production as a result of economies of scale; (ii) the increase in sales of higher margin products such as the solution-based NetServers through our distribution channels, as well as the successful implementation of some reputable projects; and (iii) the acquisition of a perpetual license of use of the application software driver contributed a significant cost savings in licensing cost.

Our distribution and administrative expenses together amounted to approximately HK$12.1 million for the first half year of FY2004, a growth rate of approximately 2.17 times from that of approximately HK$5.6 million for the same period of FY2003. The increase was more or less in line with the corresponding increase in turnover as we have expanded our sales, administration as well as customer support manpower forces to cope with the expansion of our business, including the establishment of major branch offices in Singapore, China, Macau and the United States of America.

Our product development costs amounted to HK$4.5 million for the first half year of FY2004, an increase of 2.37 times from that of approximately HK$1.9 million for the same period of FY2003. Such increase was due mainly to (i) the increase in the amortisation charge of capitalised product development costs which we incurred as a result of our continuous efforts in developing technologically advanced new products in order to maintain our competitive edge in the marketplace; and (ii) the amortisation charge on the acquisition costs of a perpetual license of use of the application software driver which, as explained above, brought us continuous economic benefits by providing us significant cost savings in licensing cost each year.

As a result of the above, our profit after taxation contributable to shareholders amounted to HK$15.5 million for the first half year of FY2004, representing a growth rate of 1.48 times from that of HK$10.5 million for the same period of FY2003.

Our intangible assets amounted to HK$59.7 million at 30 September 2003 which is a 17 percent increase from the 31 March 2003 balance of HK$51.1 million.

Our inventories amounted to HK$6.7 million at 30 September 2003, an increase of 48.9% from that of HK$4.5 million at 31 March 2003. The increase in inventory level was due mainly to the anticipated, higher delivery order in October 2003 with our Macau distributor commencing its major contract in Macau.

Our trade receivables also increased slightly from HK$25.7 million at 31 March 2003 to HK$27.7 million at 30 September 2003. This was in line with our increase in sales in last six month.

Our prepayments, deposits and other receivables have increased from HK$2.2 million at 31 March 2003 to HK$26.5 million at 30 September 2003. This mainly represents a recoverable HK$25 million prepayment for the initial set-up of a joint venture in the PRC.

Our trade and other payable decreased by HK$6.1 million from HK$10.9 million at 31 March 2003 to HK$4.8 million at 30 September 2003. A payment of HK$6.1 million was made for the last instalment payment for the acquisition of the perpetual license of use of our application software driver as mentioned ealier.

The Group's deferred tax liabilities increased by HK$3.0 million from that of HK$4.7 million at 31 March 2003 to that of HK$7.7 million at 30 September 2003 which represented the profits tax provision being made on the profit generated in the first half year of FY2004.

There is a HK$4.9 million increase in shared capital and a HK$88.5 million increase in contributed surplus during the first half year of FY2004. This was mainly derived from the second placement of 69.6 million shares of our stock at S$0.317 per share.

Overall, we recorded an increase in cash and cash equivalents of approximately HK$67.3 million for the first half year of FY2004.





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

Not applicable.


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 environment will become intensely competitive as more vendors roll out systems with hardware compression, following MultiVision's foray into the market. We have released systems which offer both hardware compression and high image resolution. We are also forging strategic alliances with more telecom operators, bundling our ditigal video surveillance products with their broadband services. Moving forward, this initiative is expected to bring a steady and stable revenue stream to the Company.


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

Not applicable.


(d) Books closure date

Not applicable.


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

No dividend is declared/recommended for this period.

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





		Group
		Turnover		Profit/Loss before taxation and interest
		HK$'000		HK$'000
		1st Half Year FY03/04	1st Half Year FY02/03	1st Half Year FY03/04	1st Half Year FY02/03
By geographical location
Hong Kong		4,198	2,934	1,180	372
PRC		33,857	24,695	10,461	7,893
Taiwan		-	657	-	308
North America		15,245	8,833	5,933	3,023
Australia		292	960	115	413
Europe		661	329	202	149
Macau		1,455	-	407	-
Others		396	805	127	361
		56,104	39,213	18,426	12,519

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

Not applicable.


15. A breakdown of sales

Not applicable.


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

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