Vtech 2008 Annual Report Download - page 44

NOTES TO THE FINANCIAL STATEMENTS
VTech Holdings Ltd Annual Report 2008
42
12 DEBTORS AND PREPAYMENTS CONTINUED
Ageing Analysis
An ageing analysis of net trade debtors by transaction date is as
follows:
2008 2007
US$ million US$ million
0-30 days 88.8 83.6
31-60 days 48.1 49.1
61-90 days 30.3 27.4
>90 days 15.0 18.6
Total 182.2 178.7
The majority of the Group’s sales are on letter of credit and on
open credit with varying terms of 30 to 90 days. Certain open
credit sales are covered by credit insurance or bank guarantees.
Impairment of trade debtors
Impairment losses in respect of trade debtors are recorded
using an allowance account unless the Group is satis ed that
recovery of the amount is remote, in which case the impairment
loss is written o against trade debtors directly.
The movement in the allowance for doubtful debts during the
year, including both speci c and collective loss components, is
as follows:
2008 2007
Note US$ million US$ million
At 1st April 12.5 5.4
Impairment loss (reversal)/
recognised 2 (2.6) 8.2
Uncollectible amounts
written o (0.4) (1.2)
E ect of changes in
exchange rates 0.2 0.1
At 31st March 9.7 12.5
Trade debtors that are not impaired
As at 31st March 2008, 94% (2007: 92%) of the Group’s trade
debtors were not impaired, of which 100% (2007: 98%) was
either not past due or less than two months past due.
Based on past experience of the Group, it is determined that no
impairment allowance is necessary in respect of these balances
as these are considered to be fully recoverable. The Group does
not hold any collateral over these balances.
13 FINANCIAL ASSETS AT FAIR VALUE THROUGH
PROFIT OR LOSS
Financial assets at fair value through pro t or loss represented
currency-linked deposits. Their fair values are determined
based on the quoted prices provided by securities brokers for
equivalent instruments at the balance sheet date. The
currency-linked deposits are principal protected and are
mature within one year from the balance sheet date.
14 CREDITORS AND ACCRUALS
2008 2007
US$ million US$ million
Trade creditors 106.2 101.9
Other creditors and accruals 155.9 154.6
262.1 256.5
An ageing analysis of trade creditors by transaction date is as
follows:
2008 2007
US$ million US$ million
0-30 days 53.3 51.6
31-60 days 27.7 26.2
61-90 days 17.7 15.1
>90 days 7.5 9.0
Total 106.2 101.9
15 PROVISIONS
At 31st March 2008, provisions of US$46.4 million (2007: US$47.9
million) include provisions for defective goods returns of
US$41.5 million (2007: US$43.4 million).
Defective
goods returns
US$ million
At 1st April 2007 43.4
E ect of changes in exchange rates 0.6
Additional provisions 54.1
Unused amounts reversed –
Charged to income statement 54.1
Utilised during the year (56.6)
At 31st March 2008 41.5
The Group undertakes to repair or replace items that fail to
perform satisfactorily in accordance with the terms of the
sale. A provision is recognised 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.