Vtech 2003 Annual Report Download - page 35

Annual Report 2003 33
Consolidated Financial Statements Principal Accounting Policies
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31st March 2003
2003 2002
Note US$ million US$ million
Operating activities
Operating profit 59.5 23.0
Depreciation charges 2 24.1 33.8
Amortization of leasehold land payments 2 0.1 0.1
Impairment of leasehold land payments 2 0.2 —
Impairment of tangible assets 2 —3.6
Impairment of investment properties 2 —0.5
Loss on disposal of tangible assets and
leasehold land 2 1.4 2.0
Gain on settlement of a lawsuit 3 (34.0 ) —
Write down of discontinued stocks —1.7
Decrease in stocks 10.4 91.4
Decrease in debtors and prepayments 25.4 90.8
Decrease in creditors and accruals (7.7) (63.4 )
Increase/(decrease) in provisions 1.2 (27.2 )
Cash generated from operations 80.6 156.3
Net proceeds on settlement of a lawsuit 3 34.0 —
Interest received 1.2 3.0
Interest paid (2.2) (11.6 )
Taxes paid (3.0) (0.9 )
Net cash generated from operating activities 110.6 146.8
Investing activities
Proceeds from disposal of tangible
assets and leasehold land 1.9 9.1
Proceeds from disposal of assets
held for sale 7.7 18.9
Purchase of tangible assets 9 (14.1 ) (13.3 )
Purchase of associates —(0.4 )
Purchase of subsidiaries and businesses —(0.1 )
Net cash (used in)/generated from
investing activities (4.5) 14.2
Financing activities
Net repayment of current borrowings (29.9) (109.9 )
Repayments of non-current borrowings (63.0) (41.3 )
Dividend paid 7 (3.4) —
Dividend paid to minority shareholder (0.1) —
Proceeds from issuance of share capital —0.1
Net cash used in financing activities (96.4) (151.1 )
Effect of exchange rate changes (2.4 ) (0.2 )
Increase in cash and cash equivalents 7.3 9.7
Cash and cash equivalents at beginning
of the year 63.1 53.4
Cash and cash equivalents at end
of the year 70.4 63.1
Analysis of the balance of cash and
cash equivalents
Cash at bank and deposits 70.4 63.3
Bank overdrafts —(0.2 )
70.4 63.1
The notes on pages 33 to 48 form part of these financial statements.
A BASIS OF PREPARATION The consolidated financial
statements have been prepared in accordance with
International Financial Reporting Standards (“IFRS”)
promulgated by the International Accounting Standards Board.
IFRS includes International Accounting Standards (“IAS”) and
related Interpretations. These financial statements also comply
with the disclosure requirements of the Hong Kong Companies
Ordinance and the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of
Hong Kong Limited.
The Company is incorporated in Bermuda. In view of the
international nature of the Group’s operations, the financial
statements are presented in United States Dollars, rounded to
the nearest million.
The financial statements are prepared on a historical cost basis
as modified by revaluation of certain properties.
The accounting policies have been consistently applied by the
Group and are consistent with those used in the previous year.
The Group’s separable segments are set out in note 1 to the
financial statements.
B BASIS OF CONSOLIDATION The consolidated financial
statements include the financial statements of the Company
and its subsidiaries together with the Group’s share of the
results and retained post acquisition reserves of its associates
under the equity method of accounting drawn up for the year
ended 31st March. All significant inter-company balances and
transactions and any unrealized gains arising from inter-
company transactions are eliminated on consolidation.
Subsidiaries are those companies controlled by the Group,
where the Group, directly or indirectly, has an interest held for
the long term, of more than 50% of the voting rights and is
able to exercise control over the operations. Control exists
when the Group has the power, directly or indirectly, to govern
the financial and operating policies of an entity so as to obtain
benefits from its activities. The financial statements of
subsidiaries are included in the consolidated financial
statements from the date that control effectively commences
until the date that control effectively ceases, and the share
attributable to minority interests is deducted from or added to
profit after taxation. Investments in subsidiaries are stated at
cost less provision for impairment losses (refer to note L) in the
Company’s balance sheet.