Vtech 2007 Annual Report Download - page 54

Notes to the Financial Statements
VTech Holdings Ltd
Annual Report 2007
52
23 MATERIAL RELATED PARTY
TRANSACTIONS
During the year, the Group leased 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
benefi ciaries. 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, they have complied with the disclosure
requirements in accordance with Chapter 14A of the Listing
Rules. With effect from 1st April 2007, the Group renewed
the afore-mentioned lease with Aldenham for HK$250,000
per month for a term of 2 years expiring on 31st March 2009.
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.
24 POSSIBLE IMPACT OF AMENDMENTS,
NEW STANDARDS AND INTERPRETATIONS
ISSUED BUT NOT YET EFFECTIVE FOR THE
ANNUAL ACCOUNTING PERIOD ENDED
31ST MARCH 2007
Up to the date of issue of these fi nancial statements the
International Accounting Standard Board has issued a number
of amendments, new standards and interpretations which
are not yet effective for the year ended 31st March 2007 and
which have not been adopted in these fi nancial statements.
In addition, the following developments may result in new or
amended disclosures in the fi nancial statements:
Effective for
Accounting period
beginning on or after
IFRS 7, Financial instruments: disclosures 1st January 2007
IFRS 8, Operating segments 1st January 2009
IFRIC 8, Scope of IFRS2 1st May 2006
IFRIC 9, Reassessment
of embedded derivatives 1st June 2006
IFRIC 10, Interim Financial
reporting and impairment 1st November 2006
IFRIC 11, IFRS 2 – Group and
treasury shares transactions 1st March 2007
IFRIC 12, Service Concession Agreements 1st January 2008
Amendment to IAS 1, Presentation
of fi nancial statements: capital disclosure 1st January 2007
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. So far it has concluded that the adoption of them
is unlikely to have a signifi cant impact on the Group’s results
of operations and fi nancial position.
25 ACCOUNTING ESTIMATES AND
JUDGEMENTS
The presentation of fi nancial 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 15, 16 and 18 contain information about the
assumptions and their risk factors relating to pension scheme
obligations, fair value of share options granted and fi nancial
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 signifi cant impact on the provision and could result in
additional charges or reversal of provision in future years.
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