Creative 2010 Annual Report Download - page 46

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46
CREATIVE TECHNOLOGY LTD AND ITS SUBSIDIARIES
(a) Warranty
The warranty period for the bulk of the products typically ranges between 1 to 3 years. The product warranty provision
reects 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
2010 2009 2010 2009
US$’000 US$’000 US$’000 US$’000
Beginning of nancial year 2,899 5,815 2,893 5,300
Provision made (Note 4) 1,915 6,103 1,855 5,954
Provision utilised (2,030) (9,019) (1,969) (8,361)
End of nancial year 2,784 2,899 2,779 2,893
(b) Restructuring
Please refer to Note 4 for the nature of restructuring provision.
Movements in provision for restructuring are as follows:
Group Company
2010 2009 2010 2009
US$’000 US$’000 US$’000 US$’000
Beginning of nancial year 5,038 9,046 – –
Provision made (Note 4) – 11,168 – 527
Provision utilised (2,354) (15,176) – (527)
Provision written back (893) – – –
End of nancial year 1,791 5,038 – –
(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 signicant loss
beyond the amounts provided at 30 June 2010. 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 nancial year ended 30 June 2010
22. ACCRUED LIABILITIES AND PROVISIONS (cont’d)