Vtech 2008 Annual Report Download - page 54

NOTES TO THE FINANCIAL STATEMENTS
VTech Holdings Ltd Annual Report 2008
52
In addition, the following developments may result in new or
amended disclosures in the  nancial statements:
E ective for
accounting period
beginning on or after
IFRS 8, Operating segments 1st January 2009
IAS 23 (March 2007), Borrowing costs 1st January 2009
IFRIC 12, Service Concession
Agreements 1st January 2008
IFRIC 13, Customer loyalty
programmes 1st July 2008
IFRIC 14, IAS 19 – The limit on
a de ned bene t asset,
minimum funding
requirements and their
interactions 1st January 2008
The Group is in the process of making an assessment of
what the impact of these amendments, new standards and
new interpretations is expected to be in the period of initial
application. So far it has concluded that the adoption of them
is unlikely to have a signi cant impact on the Group’s results of
operations and  nancial position.
26 ACCOUNTING ESTIMATES AND JUDGEMENTS
The presentation of  nancial statements in conformity with
IFRSs requires management to make judgements, estimates and
assumptions that a ect the application of policies and reported
amounts of assets, liabilities, income and expenses.
Notes 16, 17 and 19 contain information about the assumptions
and their risk factors relating to pension scheme obligations, fair
value of share options granted and  nancial instruments. Other
key sources of estimation uncertainty are as follows:
The Group recognises provision for expected return claims,
which included cost of repairing or replacing defective goods,
loss of margin and cost of materials scrapped, based on past
experience of the level of repairs and returns. The Group uses
all available information in determining an amount that is a
reasonable approximation of the costs including estimates
based on reasonable historical information and supportable
assumptions. Changes in these estimates could have a
signi cant impact on the provision and could result in additional
charges or reversal of provision in future years.
24 MATERIAL RELATED PARTY TRANSACTIONS
Remuneration for key management personnel of the Group,
including amounts paid to the directors of the Company and
the  ve highest paid individuals is disclosed in note 3 to the
 nancial statements.
During the year, the Group had the following continuing
connected transactions under Chapter 14 of the Listing Rules,
details of which are set out below:
(A) The Company renewed a lease with Aldenham Company
Limited (“Aldenham”) for the lease of the premises for
HK$250,000 per month to provide housing for a director
in accordance with the terms of his service contract for a
term of 2 years expiring on 31st March 2009. Aldenham
is an indirect wholly owned subsidiary of a trust in which
the family members of the director are bene ciaries
and therefore Aldenham is a connected person of the
Company;
(B) VTech Communications Limited, an indirect wholly
owned subsidiary of the Company and Ality Limited
(“Ality”) entered into a Manufacturing Agreement for
an initial term of 24 months commencing 10th August
2007 with an annual cap of HK$28.68 million for the year.
Ality is a company which is wholly owned by Mr. William
WONG Yee Lai, the son of Dr. Allan WONG Chi Yun. Ality is
therefore a connected person of the Company.
In the normal course of business and on normal commercial
terms, the Group undertakes certain transactions with its
associates. None of these transactions were material to the
Group’s results.
25 POSSIBLE IMPACT OF AMENDMENTS, NEW
STANDARDS AND INTERPRETATIONS ISSUED
BUT NOT YET EFFECTIVE FOR THE ANNUAL
ACCOUNTING PERIOD ENDED 31ST MARCH 2008
Up to the date of issue of these  nancial statements the
International Accounting Standard Board has issued a number
of amendments, new standards and interpretations which are
not yet e ective for the year ended 31st March 2008 and which
have not been adopted in these  nancial statements.