Vtech 2006 Annual Report Download - page 56

VTech Holdings Ltd Annual Report 2006 53
24 Related Party Transactions
With effect from 1st April 2005, the Group renewed the lease
of premises from Aldenham Company Limited (“Aldenham”)
for HK$250,000 per month, to provide housing for a director
in accordance with the terms of his service contract for a term
of 2 years expiring on 31st March 2007. Aldenham is a wholly
indirect subsidiary of a trust in which the family members of a
director are beneficiaries. Aldenham is therefore a connected
person of the Group as ascribed by the Listing Rules and the
lease constitutes a continuing connected transaction under
the Listing Rules. Disclosure requirements in accordance with
Chapter 14A of the Listing Rules have been complied with.
In the normal course of business and on normal commercial
terms, the Group undertakes certain transactions with its
associates. None of these transactions were material to the
Group’s results.
25 Possible Impact of Amendments,
New Standards and Interpretations Issued
but not yet Effective for the Annual
Accounting Period ended
31st March 2006
Up to the date of issue of these financial statements, the IASB
has issued the following amendments, new standards and
interpretations which are not yet effective for the annual
accounting period ended 31st March 2006 and which have
not been adopted in these financial statements:
Effective for
accounting period
beginning on or after
IFRS 6, Exploration for and evaluation
of mineral resources 1st January 2006
IFRS 7, Financial instruments: disclosures 1st January 2007
IFRIC 4, Determining whether an
arrangement contains a lease 1st January 2006
IFRIC 5, Rights to interests arising
from decommissioning, restoration
environmental rehabilitation funds 1st January 2006
IFRIC 6, Liabilities arising from
participating in a specific market
– Waste electrical and electronic
equipment 1st December 2005
IFRIC 7, Applying the restatement
approach under IAS 29, Financial
reporting in hyperinflationary
economies 1st March 2006
IFRIC 8, Scope of IFRS2 1st May 2006
IFRIC 9, Reassessment of embedded
derivatives 1st June 2006
Amendment to IAS 1, Presentation
of financial statements: capital
disclosure 1st January 2007
Effective for
accounting period
beginning on or after
Amendment to IAS 19, Employee
benefits – Actuarial Gains and
Losses, group plans and disclosures 1st January 2006
Amendment to IAS 21, Net
investment in a foreign operation 1st January 2006
Amendment to IAS 39, Financial
instruments: Recognition and
measurement:
– Cash flow hedge accounting of
forecast intragroup transactions 1st January 2006
– The fair value option 1st January 2006
– Financial guarantee contracts 1st January 2006
Amendment to IFRS 1, First-time
Adoption of International
Financial Reporting Standards 1st January 2006
The Group is in the process of making an assessment of what
the impact of these amendments, new standards and new
interpretations is expected to be in the period of initial
application. Up to the date of issuance of these financial
statements, the Group believes that the adoption of IFRS 6,
IFRIC 5 and IFRIC 7 are not applicable to any of the Group’s
operations and that the adoption of the remainder of the
above amendments, new standards and new interpretations is
unlikely to have a significant impact on the Group’s results of
operations and financial position.
26 Accounting Estimates and Judgements
The presentation of financial statements in conformity with
IFRSs requires management to make judgements, estimates
and assumptions that affect the application of policies
and reported amounts of assets, liabilities, income
and expenses.
Notes 16, 17 and 19 contain information about the
assumptions and their risk factors relating to pension scheme
obligations, fair value of share options granted and financial
instruments. Other key sources of estimation uncertainty are
as follows:
The Group recognises provision for expected return claims,
which included cost of repairing or replacing defective
goods, loss of margin and cost of materials scrapped, based
on past experience of the level of repairs and returns. The
Group uses all available information in determining an
amount that is a reasonable approximation of the costs
including estimates based on reasonable historical
information and supportable assumptions. Changes in these
estimates could have a significant impact on the provision
and could result in additional charges or reversal of provision
in future years.