Vtech 2011 Annual Report Download - page 44

42 VTech Holdings Ltd Annual Report 2011
Notes to the Financial Statements
Principal Accounting Policies (Continued)
W Dividends
Dividends proposed or declared after the balance sheet date are
not recognised as a liability at the balance sheet date.
X Segment Reporting
Operating segments, and the amounts of each segment item
reported in the financial statements, are identified from the
financial information provided regularly to the Group’s most
senior executive management for the purposes of allocating
resources to, and performance assessment.
Individually material operating segments are not aggregated for
financial reporting purposes unless the segments have similar
economic characteristics and are similar in respect of the nature
of products and services, the nature of production processes, the
type or class of customers, the methods used to distribute the
products or provide the services, and the nature of the regularity
environment. Operating segments which are not individually
material may be aggregated if they share a majority of these
criteria.
Y Related Parties
For the purposes of these financial statements, a party is
considered to be related to the Group if:
(i) the party has the ability, directly or indirectly through one
or more intermediaries, to control the Group or exercise
significant influence over the Group in making financial
and operating policy decisions, or has joint control over the
Group;
(ii) the Group and the party are subject to common control;
(iii) the party is an associate of the Group or a joint venture in
which the Group is a venturer;
(iv) the party is a member of key management personnel of
the Group or the Group’s parent, or a close family member
of such an individual, or is an entity under the control, joint
control or significant influence of such individuals;
(v) the party is a close family member of a party referred to in (i)
or is an entity under the control, joint control or significant
influence of such individuals; or
(vi) the party is a post-employment benefit plan which is for the
benefit of employees of the Group or of any entity that is a
related party of the Group.
Close family members of an individual are those family members
who may be expected to influence, or be influenced by, that
individual in their dealings with the entity.
1 Segment Information
The Group manages its businesses by divisions, which are
organised by geography. In accordance with IFRS 8 – Operating
segments and in a manner consistent with the way in which
information is reported internally to the Group’s most senior
executive management for the purposes of resource allocation
and performance assessment, the Group has presented the
following reportable segments.
• North America (including the United States and Canada)
• Europe
• Asia Pacific
• Others, which covers sales of electronic products to the rest
of the world.
The Company is domiciled in Bermuda. The results of its revenue
from external customers located in North America, Europe, Asia
Pacific and elsewhere are set out in the table below.
Each of the above reportable segments primarily derive their
revenue from the sale of telecommunication products, electronic
learning products and products from contract manufacturing
services to customers in the relevant geographical region.
All of these products and services are manufactured and
performed in the Group’s manufacturing facilities located
primarily in the People’s Republic of China (“PRC”) under the Asia
Pacific segment.
For the purposes of assessing segment performance and
allocating resources between segments, the Group’s senior
executive management monitors the results and assets
attributable to each reportable segment on the following bases:
(a) Segment revenues and results
Revenue is allocated to the reporting segment based on the
location of the external customers. Expenses are allocated to the
reportable segments with reference to sales generated by those
segments and the expenses incurred by those geographical
locations or which otherwise arise from the depreciation or
amortisation of assets attributable to those segments.
The measure used for reporting segment profit is operating profit.
In addition to receiving segment information concerning
operating profit, management is provided with segment
information concerning revenue, depreciation and amortisation
and impairment of assets.
(b) Segment assets and liabilities
Segment assets include all tangible and intangible assets and
current assets with the exception of deferred tax assets and other
corporate assets including taxation recoverable and investments.
Segment liabilities include trade creditors, bills payable, accruals,
and provisions for electronic product warranties attributable to
the manufacturing and sales activities of the individual reportable
segments with the exception of deferred tax liabilities and
taxation payable.