Vtech 2005 Annual Report Download - page 36

34 VTech Holdings Ltd Annual Report 2005
Notes to the Financial
Statements
Consolidated Financial
Statements
Consolidated Cash Flow Statement
For the year ended 31st March 2005
2005 2004
Note US$ million US$ million
Operating activities
Operating profit 62.7 49.5
Depreciation charges 2 18.2 17.9
Amortisation of leasehold land
payments 2 —0.1
Loss on disposal of tangible assets 2 —1.9
Gain on disposal of subsidiaries 2 (1.0) (1.1)
Gain on disposal of assets held
for sale 2 (0.8) —
Increase in stocks (28.1) (12.1)
Increase in debtors and
prepayments (21.8) (14.0)
Increase in creditors and accruals 31.0 28.9
Increase in provisions 0.5 —
Cash generated from operations 60.7 71.1
Interest received 1.3 0.7
Interest paid (0.3) (0.3)
Taxes paid (12.1) (6.3)
Net cash generated from
operating activities 49.6 65.2
Investing activities
Proceeds from disposal of
tangible assets 0.3 1.3
Proceeds from disposal of
assets held for sale 8.8 —
Proceeds from disposal of
subsidiaries 1.0 1.1
Purchase of tangible assets 9 (21.5) (19.5)
Net cash used in investing
activities (11.4) (17.1)
Financing activities
Net repayment of borrowings (2.4) (0.1)
Dividends paid 7 (18.1) (11.3)
Dividend paid to minority
shareholder —(0.8)
Net cash used in financing
activities (20.5) (12.2)
Effect of exchange rate changes 1.0 (1.1)
Increase in cash and cash
equivalents 18.7 34.8
Cash and cash equivalents at
beginning of the year 105.2 70.4
Cash and cash equivalents at
end of the year 123.9 105.2
Analysis of the balance of
cash and cash equivalents
Cash at bank and deposits 123.9 105.2
The notes on pages 34 to 53 form part of these financial statements.
Principal Accounting Policies
A Principal Activities, Organisation and Basis of
Preparation The Group’s principal activities and separable
segments are set out in note 1 to the financial statements.
The Company was incorporated in Bermuda. In view of the
international nature of the Group’s operations, the financial
statements are presented in United States dollars, rounded to
the nearest million.
The accompanying financial statements have been prepared in
accordance with International Financial Reporting Standards
(“IFRS”) promulgated by the International Accounting Standards
Board. IFRS includes International Accounting Standards (“IAS”)
and related Interpretations. These financial statements also
comply with the disclosure requirements of the Hong Kong
Companies Ordinance and the applicable disclosure provisions
of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited and the Bermuda Companies
Act 1981.
These financial statements are prepared on a historical cost
basis as modified by the revaluation of certain properties.
The accounting policies described in note (B) to note (V) have
been consistently applied by the Group.
The International Accounting Standards Board has issued a
number of new and revised IFRS and IAS (“new IFRS”), which are
effective for accounting periods beginning on or after
1st January 2005. The Group has not early adopted these new IFRS
in the financial statements for the year ended 31st March 2005.
The Group has made a preliminary assessment of the impact of
these new IFRS and has so far concluded that the adoption of
IFRS2 “Share-based payments” will have an impact on its
consolidated financial statements as set out below:
(i) At present, when the Group grants employees options to
acquire shares of the Company at nil consideration, no
employee benefit cost or obligation is recognised at the
date of grant. When the options are exercised, equity is
increased by the amount of the proceeds received.