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Notes to the Financial Statements
VTech Holdings Ltd Annual Report 200640
Capital Capital Total Total
expenditure expenditure assets assets
2006 2005 2006 2005
US$ million US$ million US$ million US$ million
North America 0.6 0.7 112.8 131.3
Europe 0.6 0.3 71.1 67.2
Asia Pacific 30.9 20.5 449.8 284.1
Others ––1.5 0.8
32.1 21.5 635.2 483.4
2 Operating Profit
The operating profit is arrived at after charging/(crediting) the
following:
2006 2005
Note US$ million US$ million
Staff related costs
– salaries and wages 111.4 103.9
– pension costs: defined
contribution schemes 16 2.0 1.9
– pension costs: defined
benefit scheme 16 1.2 1.2
– severance payments 0.4 2.3
– equity-settled share-based
payment expenses 1.6 –
Depreciation charges 8
– owned assets 18.9 18.1
– leased assets 0.1 0.1
Amortisation of leasehold
land payments 9 0.1 –
Loss on disposal of tangible
assets 0.6 –
Gain on disposal of subsidiaries –(1.0)
Gain on disposal of assets
held for sale –(0.8)
Auditors’ remuneration
– audit services 0.6 0.6
– tax services 0.5 0.7
– other services 0.1 0.1
Operating leases
– land and buildings 10.8 9.9
– others 2.1 2.9
Provision for stock obsolescence 9.3 (0.7)
Provision for doubtful debts 3.0 –
Royalties 26.1 19.0
Exchange loss/(gain) 5.3 (6.4)
Forward contracts: fair value
(gains)/losses on cash flow
hedges transferred from
hedging reserve 18 (2.7) 3.1
1 Segment Information (continued)
Primary reporting format – business segments
Year ended 31st March 2005
Telecommunication
and electronic Other
products activities Total
US$ million US$ million US$ million
i Segment revenue 1,020.3 1.7 1,022.0
Segment result 62.4 0.9 63.3
Unallocated corporate
expenses (0.6)
Operating profit 62.7
Net finance income 1.0
Profit before taxation 63.7
Taxation (6.8)
Profit attributable to
shareholders 56.9
ii Segment assets 390.8 1.2 392.0
Associates – 0.1 0.1
Unallocated assets 91.3
Total assets 483.4
Segment liabilities 261.2 1.6 262.8
Unallocated liabilities 17.3
Total liabilities 280.1
iii Capital expenditure,
depreciation and
other non-cash
revenue
Capital expenditure 21.1 0.4 21.5
Depreciation 17.5 0.7 18.2
Other non-cash revenue (0.7) – (0.7)
Secondary reporting format – geographical
segments
Although the Group’s business segments are managed on a
worldwide basis, they principally operate in the following
geographical areas:
North America – the operations are principally the distribution
of telecommunication and electronic products.
Europe – the operations are principally the distribution of
telecommunication and electronic products.
Asia Pacific – the Group is headquartered in the Hong Kong
Special Administrative Region and the Group’s principal
manufacturing operations are located in mainland China.
Operating Operating
Revenue Revenue profit profit
2006 2005 2006 2005
US$ million US$ million US$ million US$ million
North America 671.6 621.1 60.2 19.7
Europe 457.8 336.0 65.4 33.2
Asia Pacific 53.1 45.9 5.4 5.2
Others 22.1 19.0 5.2 4.6
1,204.6 1,022.0 136.2 62.7