Vtech 2015 Annual Report Download - page 50

VTech Holdings Limited Annual Report 2015
Notes to the Financial Statements
48
Principal Accounting Policies
A Principal Activities and Organisation
The Group’s principal activities and operating 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.
B Statement of Compliance
The consolidated financial statements have been prepared in
accordance with all applicable International Financial Reporting
Standards (“IFRSs”), which collective term includes all applicable
individual International Financial Reporting Standards, International
Accounting Standards (“IASs”) and related Interpretations
promulgated by the International Accounting Standards
Board (“IASB”).
These financial statements comply with the applicable disclosure
requirements of the Hong Kong Companies Ordinance, which for
this financial year and the comparative period, as permitted by the
Rules Governing the Listing of Securities on The Stock Exchange of
Hong Kong Limited ("the Listing Rules"), continue to be those of
the predecessor Hong Kong Companies Ordinance (Cap. 32). These
financial statements also comply with the applicable disclosure
provisions of the Listing Rules. A summary of the significant
accounting policies adopted by the Group is set out below.
The IASB has issued the following new and revised IFRSs that are
first effective for the current accounting period of the Group and
the Company. Of these, the following developments are relevant
to the Group’s financial statements:
• Amendments to IFRS 10, IFRS 12 and IAS 27, Investment entities
• Amendments to IAS 32, Osetting nancial assets and
nancial liabilities
• Amendments to IAS 36, Recoverable amount disclosures for
non-nancial assets
• Amendments to IAS 39, Novation of derivatives and
continuation of hedge accounting
Amendments to IFRS 10, IFRS 12 and IAS 27,
Investment entities
The amendments provide consolidation relief to those parents
which qualify to be an investment entity as defined in the
amended IFRS 10. Investment entities are required to measure their
subsidiaries at fair value through profit or loss. These amendments
do not have an impact on these financial statements as the
Company does not qualify to be an investment entity.
Amendments to IAS 32, Osetting nancial assets and
nancial liabilities
The amendments to IAS 32 clarify the offsetting criteria in IAS 32.
The amendments do not have an impact on these financial
statements as they are consistent with the policies already adopted
by the Group.
Amendments to IAS 36, Recoverable amount disclosures for
non-nancial assets
The amendments to IAS 36 modify the disclosure requirements
for impaired non-financial assets. Among them, the amendments
expand the disclosures required for an impaired asset or cash-
generating unit whose recoverable amount is based on fair value
less costs of disposal. The adoption to these amendments does not
have an impact to the financial statements of the Group.
Amendments to IAS 39, Novation of derivatives and
continuation of hedge accounting
The amendments to IAS 39 provide relief from discontinuing
hedge accounting when novation of a derivative designated as a
hedging instrument meets certain criteria. The amendments do
not have an impact on these financial statements as the Group has
not novated any of its derivatives.
The Group has not applied any new standard, amendment or
interpretation that is not yet effective for the current accounting
period (note 23).
Change in accounting policy under IAS 16, Property, plant
and equipment
The Group has reconsidered the appropriateness of the application
of the fair value model on the measurement of the non-current
assets of the Group held for own use purposes. Specifically,
the Group owns a freehold property in the Netherlands and a
leasehold industrial property in Hong Kong, both of which are core
assets of the Group’s operations and the Group does not intend to
sell these properties in the foreseeable future. The Group has noted
that the fair value of these properties is immaterial to the Group’s
consolidated net assets and that the additional depreciation
charge on the revalued amount is immaterial to the Group’s
consolidated income statement. The Group has also noted that
the adoption of the fair value model for such own use properties
is inconsistent with the market practices adopted by companies
in similar industries. On this basis, the Group has concluded that
the “cost model” is a more appropriate accounting policy for
these properties.
In order to present the comparative information on a consistent
basis, the Group has applied this change in accounting policy
retrospectively. Upon retrospective adoption of the accounting
policy, the reported carrying value of the Group’s net assets as at
1 April 2013 and 31 March 2014 decreased by US$14.7 million and
US$13.2 million respectively to US$549.6 million and US$562.4
million respectively. There is no material impact to the Group’s
profit or loss for the year ended 31 March 2014.
As
previously
reported
Effect of
change in
accounting
policy As restated
US$ million US$ million US$ million
Consolidated income
statement for the
year ended
31 March 2014
Administrative and other
operating expenses (63.8) 0.5 (63.3)
Profit for the year 203.3 0.5 203.8
Basic earnings per share
(US cents) 81.1 0.2 81.3
Diluted earnings per share
(US cents) 81.1 0.2 81.3
Consolidated statement
of comprehensive income
for the year ended
31 March 2014
Deficit arising on revaluation of
properties, net of deferred tax (1.3) 1.3 –
Exchange translation differences 6.7 (0.3) 6.4
Total comprehensive income
for the year 206.8 1.5 208.3
Consolidated balance sheet
as at 31 March 2014
Tangible assets 85.9 (17.3) 68.6
Deferred tax liabilities (4.1) 4.1 –
Properties revaluation reserve 18.3 (18.3) –
Exchange reserve 12.5 (1.3) 11.2
Revenue reserve 391.5 6.4 397.9
Consolidated balance sheet
as at 1 April 2013
Tangible assets 88.4 (19.2) 69.2
Deferred tax liabilities (4.5) 4.5 –
Properties revaluation reserve 19.6 (19.6) –
Exchange reserve 5.8 (1.0) 4.8
Revenue reserve 384.1 5.9 390.0