Vtech 2012 Annual Report Download - page 56

54 VTech Holdings Ltd Annual Report 2012
Notes to the Financial Statements
12 Debtors, Deposits and Prepayments
2012 2011
Note US$ million US$ million
Trade debtors
(Net of allowance
for doubtful debts
of US$6.9 million
(2011: US$7.9 million)) 12(a)&(b) 210.6 198.8
Other debtors, deposits and
prepayments 29.8 23.7
Forward foreign exchange
contracts
– held as cash flow
hedging instruments 19(b)&(d) 1.4 0.3
– held as fair value
through profit or loss 19(b)&(d) –0.2
Pension assets 16 2.4 2.0
244.2 225.0
All of other debtors, deposits and prepayments apart from the
amounts of US$8.7 million (comprised largely of royalty
prepayments) (2011: US$2.5 million) are expected to be recovered
or recognized as an expense within one year.
(a) Ageing Analysis
An ageing analysis of net trade debtors by transaction date is as
follows:
2012 2011
US$ million US$ million
0-30 days 114.8 110.0
31-60 days 73.7 60.2
61-90 days 18.1 22.6
>90 days 4.0 6.0
Total 210.6 198.8
The majority of the Group’s sales are on letter of credit and on
open credit with varying terms of 30 to 90 days. Certain open credit
sales are covered by credit insurance or bank guarantees.
(b) Impairment of trade debtors
Impairment losses in respect of trade debtors are recorded using
an allowance account unless the Group is satisfied that recovery of
the amount is remote, in which case the impairment loss is written
off against trade debtors directly.
At 31 March 2012, the Group’s trade debtors of US$6.9 million
(2011: US$7.9 million) were individually determined to be impaired
as management considered that these receivables cannot be
recovered. Consequently, full provisions for these doubtful debts
were recognised.
10 Income Tax in the Consolidated Balance
Sheet (Continued)
(b) (Continued)
Deferred tax assets and liabilities are offset when they relate to
income taxes levied by the same taxation authority on the same
taxable entity. The following amounts are shown in the
consolidated balance sheet:
2012 2011
US$ million US$ million
Deferred tax assets 5.9 5.4
Deferred tax liabilities (5.8) (3.9)
0.1 1.5
Deferred tax assets are recognised for tax losses carried forward to
the extent that realisation of the related tax benefit through future
taxable profits is probable. Deferred tax assets of US$10.7 million
(2011: US$13.4 million) arising from unused tax losses sustained in
the operations of certain subsidiaries of US$47.6 million (2011:
US$56.3 million) have not been recognised as the availability of
future taxable profits against which the assets can be utilised is not
considered to be probable at 31 March 2012.
The tax losses arising from Hong Kong operations do not expire
under current tax legislation. The tax losses arising from the
operations in the PRC expire 5 years after the relevant accounting
year end date. The tax losses arising from the United States
operations expire up to 20 years after the relevant accounting year
end date, depending on the relevant jurisdiction.
11 Stocks
(a) Inventories in the consolidated balance sheet comprise:
2012 2011
US$ million US$ million
Raw materials 82.1 73.5
Work in progress 35.1 29.5
Finished goods 122.0 126.8
239.2 229.8
Stocks carried at net realisable value at 31 March 2012 amounted
to US$6.7 million (2011: US$7.8 million).
(b) The analysis of the amount of inventories recognised as an
expense and included in the consolidated income statement
is as follows:
2012 2011
US$ million US$ million
Carrying amount of inventories sold 1,214.3 1,145.3
Write-down of inventories 2.3 4.1
Reversal of write-down of inventories (2.9) (3.5)
1,213.7 1,145.9
The reversal of write-down of inventories arose due to an increase
in estimated net realisable value of certain products as a result of
change in consumer preferences.