Creative 2010 Annual Report Download - page 39

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39
CREATIVE TECHNOLOGY LTD AND ITS SUBSIDIARIES
14. OTHER CURRENT ASSETS
Group Company
2010 2009 2010 2009
US$’000 US$’000 US$’000 US$’000
Prepaid expenses and security deposits 17,172 14,726 2,456 1,852
Prepaid non-income taxes 1,522 2,484 449 701
Other receivables from associated companies 244 886 244 413
Other receivables from non-related parties 2,052 3,352 1,157 1,968
Loan to non-related party 12,762 8,508 12,762 8,508
33,752 29,956 17,068 13,442
Less: Allowance for impairment of
loan to non-related party (Note 7) (12,762) (8,508) (12,762) (8,508)
20,990 21,448 4,306 4,934
In July 2007, the Company divested 80.1% of its interest in its then wholly owned manufacturing subsidiary in Malaysia
(“ex-subsidiary”). Prior to divestment date, the Company had made loans to the ex-subsidiary for the purchase of properties,
construction of factory and working capital purposes amounting to approximately US$36,900,000 (Malaysia Ringgit (“RM”)
130 million). Under the terms of the divestment agreement, this amount would be repaid in various instalments up to 1 June
2011 of which US$24,100,000 (RM85 million) had been repaid to date. Of the outstanding balance of US$12,762,000 (RM45
million), US$4,254,000 (RM15 million) was due on 1 June 2009 and US$4,254,000 (RM15 million) was due on 1 June
2010 but the ex-subsidiary had failed to repay these amounts as at 30 June 2010. The remaining balance of US$4,254,000
(RM15 million) will be due on 1 June 2011. The Company was informed that the ex-subsidiary had decided to end all
manufacturing business with the Company in view of the ex-subsidiary’s unfavourable business and nancial situation.
In view of the above, the total outstanding balance of US$12,762,000 (RM45 million) potentially may not be recoverable
and the Company has considered it appropriate to maintain the provisions previously made.
The other receivables from associated companies and non-related parties are unsecured, interest-free and repayable on
demand.
15. FINANCIAL ASSETS, AVAILABLE-FOR-SALE
Group Company
2010 2009 2010 2009
US$’000 US$’000 US$’000 US$’000
Beginning of nancial year 27,753 37,247 – 405
Fair value gains recognised in equity 6,721 3,774 – –
Additions 500 202 – –
Disposals – (96) – –
Impairment losses (Note 7) (1,079) (13,374) – (405)
End of nancial year 33,895 27,753 – –