Vtech 2003 Annual Report Download - page 42

VTech Holdings Ltd40
Notes to the Financial Statements
6 TAXATION (continued) The consolidated effective income tax
rate for the year ended 31st March 2003 was 29.8% (2002: 18.7%).
This effective income tax rate is reconciled to the statutory
domestic income tax rate as follows:
2003 2002
%%
Statutory domestic income tax rate 16.0 16.0
Difference in overseas income tax rates 0.2 3.4
Non-temporary differences (9.8) (17.7 )
Tax losses not recognized 5.7 10.2
Underprovision in prior years 18.0 3.4
Others (0.3 ) 3.4
Effective income tax rate 29.8 18.7
The Group is currently in discussions with Hong Kong IRD
regarding a dispute over the offshore income claims made by
certain subsidiaries of the Group in prior years. Whilst
management considers that the subsidiaries have grounds to
support these claims, the outcome of the dispute remains
undetermined. The directors consider it prudent to establish a
provision of US$11.0 million for the directors’ best estimate of
any liabilities which may arise on settlement of this dispute,
which has been charged to the consolidated income statement
for the year ended 31st March 2003.
7 DIVIDENDS
2003 2002
Note US$ million US$ million
Interim dividend declared and paid of
US1.5 cents per share (2002: nil) 21 3.4 —
Final dividend of US2.0 cents per share
(2002: nil) proposed after the
balance sheet date 4.5 —
The final dividend proposed after the balance sheet date has not
been recognized as a liability at the balance sheet date.
8 EARNINGS PER SHARE The calculations of basic and diluted
earnings per share are based on the Group’s profit attributable to
shareholders of US$40.8 million (2002: US$11.2 million).
The basic earnings per share is based on the weighted average of
225.5 million (2002: 225.3 million) ordinary shares in issue during
the year. The diluted earnings per share is based on 225.5 million
(2002: 225.3 million) ordinary shares which is the weighted
average number of ordinary shares in issue during the year. There
were no potential dilutive ordinary shares in existence for both
years presented.
9 TANGIBLE ASSETS
Motor vehicles,
furniture and
Moulds, fixtures and
Land and machinery leasehold
buildings and equipment improvements Total
US$ million US$ million US$ million US$ million
Cost or valuation
At 1st April 2002 36.9 171.2 64.5 272.6
Additions 0.1 9.7 4.3 14.1
Revaluation (0.9) — — (0.9 )
Disposals (1.6) (4.2 ) (11.5 ) (17.3)
Effect of changes in
exchange rate 2.5 1.1 1.5 5.1
At 31st March 2003 37.0 177.8 58.8 273.6
Accumulated depreciation
At 1st April 2002 15.9 146.1 52.6 214.6
Charge for the year 1.9 16.2 6.0 24.1
Revaluation (1.4) — — (1.4 )
Disposals (0.8) (4.2 ) (9.1 ) (14.1 )
Effect of changes in
exchange rate 0.8 0.4 1.2 2.4
At 31st March 2003 16.4 158.5 50.7 225.6
Net book value at
31st March 2003 20.6 19.3 8.1 48.0
Net book value at
31st March 2002 21.0 25.1 11.9 58.0
Cost or valuation of
tangible assets is
analysed as follows:
At cost 25.0 177.8 58.8 261.6
At professional valuation
— 2003 12.0 — — 12.0
37.0 177.8 58.8 273.6
(a) Leased machinery and equipment The Group leases machinery
and equipment under a number of finance lease arrangements.
At the end of each of the leases the Group has the option to
purchase the equipment at a beneficial price. At 31st March 2003,
the net book value of tangible assets held under finance leases
amounted to US$0.3 million (2002: US$0.5 million).
(b) Security The net book value of tangible assets pledged as
security for borrowings at 31st March 2003 amounted to US$2.5
million (2002: US$2.3 million).