Vtech 2002 Annual Report Download - page 55

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Annual Report 2002 53
Notes to the Financial Statements
18. PENSION SCHEMES
Total retirement benefit costs recognized in the income statement for the year ended 31st March 2002 amounted to US$2.6 million (2001:
US$2.9 million). The Group operated a defined benefit scheme and a defined contribution scheme in Hong Kong. The defined contribution
scheme operated in Hong Kong complied with the requirements under the Mandatory Provident Fund (“MPF”) Ordinance. For the defined
contribution schemes operated for overseas employees and Hong Kong employees under the MPF Ordinance, the retirement benefit cost
expensed in the income statement amounted to US$1.2 million (2001: US$1.5 million) and US$0.1 million (2001: nil) respectively. For the
defined benefit scheme (“the Scheme”) operated for Hong Kong employees, contributions made by the Group during the year were
calculated based on advice from Watson Wyatt Hong Kong Limited (“Watson Wyatt”), independent actuaries and consultants. The Scheme is
valued annually. The latest actuarial valuation was completed by Watson Wyatt as at 31st March 2002 using the projected unit credit
method.
For the defined benefit scheme:
2002 2001
Note US$ million US$ million
The amounts recognized in the balance sheet are as follows:
Fair value of Scheme assets 11.5 12.3
Present value of defined benefit obligations (10.1) (12.4)
Unrecognized actuarial gains 0.4 2.2
Assets recognized in the balance sheet 15 1.8 2.1
The amounts recognized in the income statement are as follows:
Current service cost 1.4 1.9
Interest cost 0.9 1.0
Expected return on plan assets (1.0) (1.5)
Net actuarial losses recognized in the year ——
Expenses recognized in the income statement* 21.3 1.4
The actual return on plan assets was as follows:
Expected return on plan assets 1.0 1.5
Actuarial losses on plan assets (1.4) (4.4)
Actual return on plan assets (0.4) (2.9)
Movement in the assets recognized in the balance sheet:
At beginning of year 2.1 1.4
Total expenses as above* (1.3) (1.4)
Contributions paid 1.0 2.1
At end of year 1.8 2.1
The principal actuarial assumptions used for accounting purposes were:
Discount rate 7.0% 7.0%
Expected return on plan assets 7.0% 8.0%
Future salary increases 5.0% 6.0%