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VTech Holdings Ltd Annual Report 2008 49
19 FINANCIAL INSTRUMENTS CONTINUED
(c) Interest rate risk (continued)
Interest rate sensitivity
At the respective balance sheet dates, if interest rates had been
increased/decreased by 25 basis points and all other variables
were held constant, the Group’s pro t would increase/decrease
by approximately US$0.7 million and US$0.6 million for the years
ended 31st March 2008 and 2007 respectively. This is mainly
attributable to the Group’s exposure to interest rate changes on
its variable rate income-earning  nancial assets.
Contractual undiscounted cash  ow
Carrying
amount Total
Within 1 year
of on demand
More than
1 year but less
than 2 years
More than
2 year but less
than 5 years
More than
5 years
US$ million US$ million US$ million US$ million US$ million US$ million
At 31st March 2008
Creditors and accruals 262.1 262.1 262.1 – – –
Derivatives settled gross:
Forward foreign exchange contracts –
cash  ow hedge
– out ow (23.0) (23.0) – – –
– in ow 24.2 24.2 – – –
At 31st March 2007
Creditors and accruals 256.5 256.5 256.5 – – –
Derivatives settled gross:
Forward foreign exchange contracts –
cash  ow hedge
– out ow (6.5) (6.5) – – –
– in ow 6.5 6.5 – – –
(d) Liquidity risk
Cash management of the Company and wholly-owned
subsidiaries of the Group are substantially centralised at the
Group level. The Group’s policy is to regularly monitor current
and expected liquidity requirements to ensure that it maintains
su cient reserves of cash and adequate committed lines of
funding from major  nancial institutions to meet its liquidity
requirements in the short and longer term.
The following tables detail the remaining contractual maturities
at the balance sheet date of the Group’s derivative and
non-derivative  nancial liabilities, which are based on
contractual undiscounted cash  ows and the earliest date
of the Group can be required to pay:
Derivative  nancial instruments
Forward foreign exchange contracts were designated as cash
ow hedges and remeasured to fair values. The negative fair
value of derivative  nancial instruments at 31st March 2008
designated for cash  ow hedges were US$1.0 million (2007
negative: US$46,000).
Fair values
The fair value of trade debtors, bank balances, trade creditors
and accruals and bank overdrafts approximate their carrying
amounts due to the short-term maturities of these assets and
liabilities. The fair value of term loans and obligations under
nance leases is estimated using the expected future payments
discounted at market interest rates.
The fair value of forward foreign exchange contracts is
determined using forward exchange market rates at the balance
sheet date.
20 COMMITMENTS
2008 2007
US$ million US$ million
(i) Capital commitments for
property, plant and
equipment
Authorised but not 29.0 46.7
contracted for
Contracted but not 28.2 12.8
provided for
57.2 59.5
(ii) Operating lease
commitments
The future aggregate
minimum lease
payments under
non-cancellable operating
leases are as follows:
Land and buildings
In one year or less 10.1 8.9
Between one and two years 9.7 5.9
Between two and  ve years 20.1 5.8
In more than  ve years 2.0 2.1
41.9 22.7