Logitech 2003 Annual Report Download - page 79

F-22
LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ongoing discussions with Chinese officials and has been assured that, notwithstanding statements made by tax
authorities, the VAT for these prior periods would not be charged to the Company. The Company believes the
ultimate resolution of this matter will not have a material adverse effect on the Company's financial position, cash
flows or results of operations.
In the normal course of business, the Company pays value-added taxes, or VAT, in China on components
purchased in China, which are refunded after export of goods manufactured in China. The Company files for refunds,
receives approvals from Chinese tax officials and then receives a refund. Beginning in early fiscal year 2002,
approval and refund delays started to occur and the Company has accumulated a significant VAT refund receivable.
The Company has received assurances from Chinese officials that all approved claims will be paid in full. In March
2003, a portion of the VAT receivable was sold to a bank on a non-recourse basis for a negotiated discount.
The total VAT receivable may increase or decrease in the future depending on the amount of component
purchases in China, the amount of collections from the Chinese government and the amount of VAT that the
Company may be able to sell on a non-recourse basis to a bank in the future. Based on expectations as to the timing
of such payments, the Company has classified a portion of the VAT receivable as a non-current asset. The Company
does not expect the outcome of this matter to have a significant impact on the Company’s financial position or results
of operations.
The Company is involved in a number of lawsuits relating to patent infringement and intellectual property rights.
The Company believes the lawsuits are without merit and intends to defend against them vigorously. However, there
can be no assurances that the defense of any of these actions will be successful, or that any judgment in any of these
lawsuits would not have a material adverse impact on the Company’s business, financial condition and result of
operations.
Note 14 — Interest and Other Income:
2003 2002 2001
Interest income...................................................................................... 2,411$ 1,688$ 1,175$
Interest expense..................................................................................... (3,607) (3,644) (1,323)
Interest expense, net.............................................................................. (1,196)$ (1,956)$ (148)$
Gain on sale of building........................................................................ -$ -$ 1,922$
Foreign currency exchange gains, net................................................... 2,801 2 20
Gain (loss) on sale of investments......................................................... (514) 1,115 1,296
Equity in net losses of affiliated companies.......................................... - (2,476) (670)
Write-off of investments........................................................................ (1,161) (1,220) (50)
Insurance proceeds / (non-recovery of insurance claim)....................... (370) 576 -
Other, net............................................................................................... 110 436 110
Other income (expense), net.................................................................. 866$ (1,567)$ 2,628$
Year ended March 31,
(In thousands)
Note 15 — Geographic Information:
The Company operates in one business segment, which is the design, development, production, marketing and
support of computer interface devices. Geographic net sales information in the table below is based on the location of
the selling entity. Long-lived assets, primarily fixed assets, unamortized intangibles, and investments are reported
below based on the location of the asset.