Vtech 2003 Annual Report Download - page 41

Annual Report 2003 39
Notes to the Financial Statements
3 GAIN ON SETTLEMENT OF A LAWSUIT On 25th January 2001, the
Group filed a complaint against Lucent Technologies Inc. (“Lucent”)
and Lucent Technologies Consumer Products, L.P. in the United
States District Court for the Southern District of New York seeking
damages and related relief arising out of the acquisition by the
Group of Lucent’s Wired Consumer Products Business in 2000.
On 7th June 2002, the Group and Lucent settled the lawsuit filed
by the Group against Lucent in January 2001 in a mutually
satisfactory manner. There was no admission of wrongdoing by
either party. Under the terms of the settlement, Lucent has
agreed to adjust the purchase price of the acquisition downward
by US$50.0 million. The amount has been fully settled. The net
receipt from the settlement, after deducting incidental expenses,
has been credited to the consolidated income statement.
2003 2002
US$ million US$ million
Receipt from settlement of a lawsuit 50.0 —
Less: incidental expenses (16.0) —
34.0 —
4 DIRECTORS’ AND SENIOR EXECUTIVES’ EMOLUMENTS
Directors’ emoluments
2003 2002
US$ million US$ million
The emoluments of the directors of the Company
are as follows:
Fees 0.1 0.1
Salaries, allowances and benefits in kind 1.8 2.2
Bonuses 0.8 0.6
Contribution to retirement benefit schemes 0.1 0.1
Deemed profit on share option exercise ——
Inducement for joining the Group ——
Compensation for loss of office ——
2.8 3.0
The table below shows the number of directors whose
emoluments were within the bands stated:
2003 2002
Number of Number of
directors directors
US$
Nil – 128,000 46
128,001 – 192,000 —1
192,001 – 256,000 —1
256,001 – 320,000 —1
320,001 – 384,000 —1
512,001 – 576,000 —1
640,001 – 704,000 1—
704,001 – 768,000 —2
896,001 – 960,000 1—
1,088,001 – 1,152,000 1—
Emoluments of independent non-executive directors included
above amounted to US$60,000 (2002: US$63,000), being wholly
in the form of directors’ fees.
Senior executives’ emoluments The directors’ emoluments set out
above exclude 2 senior executives (2002: 2) whose emoluments were
among the five highest earning employees of the Group. Details of
the emoluments in aggregate for these executives are set out below:
2003 2002
US$ million US$ million
Salaries, allowances and benefits in kind 0.9 0.5
Bonuses 1.2 0.3
Contribution to retirement benefit schemes ——
Deemed profit on share option exercise ——
Inducement for joining the Group ——
Compensation for loss of office ——
2.1 0.8
The emoluments fell within the following bands:
2003 2002
Individuals Individuals
US$
320,001 – 384,000 —1
448,001 – 512,000 11
1,650,000 – 1,800,000 1—
22
5 NET FINANCE COSTS
2003 2002
US$ million US$ million
Interest expense
Wholly repayable within five years:
Bank loans and overdrafts 2.1 11.4
Finance leases —0.1
Not wholly repayable within five years:
Bank loans 0.1 0.1
Interest income (1.2) (3.0 )
1.0 8.6
6 TAXATION
2003 2002
US$ million US$ million
Current tax
— Hong Kong 6.4 1.7
— Overseas 0.5 0.4
(Over)/underprovision in prior years
— Hong Kong 10.8 —
— Overseas (0.3 ) 0.5
17.4 2.6
Tax on profits has been calculated at the rates of taxation
prevailing in the countries in which the Group operates.