Creative 2009 Annual Report Download - page 44

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44
CREATIVE฀TECHNOLOGY฀LTD฀AND฀ITS฀SUBSIDIARIES
22. ACCRUED LIABILITIES AND PROVISIONS (cont’d)
(a) Warranty
The warranty period for the bulk of the products typically ranges between 1 to 3 years. The product warranty provision
reflects management’s best estimate of probable liability under its product warranties. Management determines the warranty
provision based on known product failures (if any), historical experience, and other currently available evidence.
Movements in provision for warranty are as follows:
฀Group฀ Company
฀ ฀ 2009฀ 2008฀ 2009฀ 2008฀
฀ US$’000฀ US$’000฀ US$’000฀ US$’000
฀
฀ Beginning฀of฀financial฀year฀ 5,815฀ 6,499฀ 5,300฀ 5,878
฀ Provision฀made฀ 6,103฀ 18,779฀ 5,954฀ 17,559
฀ Provision฀utilised฀฀ (9,019)฀ (19,463)฀ (8,361)฀ (18,137)
฀ End฀of฀financial฀year฀ 2,899฀ 5,815฀ 2,893฀ 5,300
(b) Restructuring
Please refer to Note 4 for the nature of restructuring provision.
Movements in provision for restructuring are as follows:
฀Group฀ Company
฀ ฀ 2009฀ 2008฀ 2009฀ 2008฀
฀ US$’000฀ US$’000฀ US$’000฀ US$’000
฀
฀ Beginning฀of฀financial฀year฀ 9,046฀–฀–฀ –
฀ Provision฀made฀ 11,168฀ 11,668฀ 527฀ –
฀ Provision฀utilised฀฀ (15,176)฀ (2,622)฀ (527)฀ –
฀ End฀of฀financial฀year฀ 5,038฀ 9,046฀ –฀ –
(c) Legal claims and fees
The provision for legal claims is in respect of certain legal claims brought against the Group. In the opinion of management,
after taking appropriate legal advice, the outcomes of these legal claims are not expected to give rise to any significant loss
beyond the amounts provided at 30 June 2009. Management considers that disclosure of further details of these claims will
seriously prejudice the Group’s negotiating position and accordingly, further information on the nature of the obligation has
not been provided.
NOTES TO THE FINANCIAL STATEMENTS
– For the financial year ended 30 June 2009
AR09 pg1-64_Final.indd 44 10/2/2009 10:38:09 AM