Vtech 2009 Annual Report Download - page 49

VTech Holdings Ltd Annual Report 2009 47
12 DEBTORS AND PREPAYMENTS (CONTINUED)
Impairment of trade debtors
Impairment losses in respect of trade debtors are recorded
using an allowance account unless the Group is satisfied
that recovery of the amount is remote, in which case the
impairment loss is written off against trade debtors directly.
The movement in the allowance for doubtful debts
during the year, including both specific and collective loss
components, is as follows:
2009 2008
Note US$ million US$ million
At 1st April 9.7 12.5
Impairment loss
recognised/(reversed) 21.7 (2.6)
Uncollectible amounts
written off (3.1) (0.4)
Effect of changes in
exchange rates (0.6) 0.2
At 31st March 7.7 9.7
Trade debtors that are not impaired
As at 31st March 2009, 94% (2008: 94%) of the Group’s trade
debtors were not impaired, of which 98% (2008: 100%) 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 profit 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 mature within one year from the balance
sheet date.
14 DEPOSITS AND CASH
2009 2008
US$ million US$ million
Short term bank deposits 192.0 224.0
Cash at bank and in hand 95.2 61.4
Deposits and cash 287.2 285.4
Less: bank deposits with maturity
greater than 3 months (45.0) –
Cash and cash equivalents in the
consolidated cash flow
statement 242.2 285.4
Deposits and cash as at 31st March 2009 include US$5.7
million equivalent (2008: US$4.8 million) placed with banks
in the People’s Republic of China (“PRC”), the remittance of
which are subject to relevant rules and regulations of foreign
exchange control promulgated by the PRC government.
15 CREDITORS AND ACCRUALS
2009 2008
Note US$ million US$ million
Trade creditors 102.4 106.2
Other creditors and
accruals 130.2 154.9
Derivative financial
instruments held as
cash flow hedging
instruments
20(b)
&(d) 0.3 1.0
232.9 262.1
An ageing analysis of trade creditors by transaction date is
as follows:
2009 2008
US$ million US$ million
0-30 days 49.2 53.3
31-60 days 30.9 27.7
61-90 days 10.2 17.7
>90 days 12.1 7.5
Total 102.4 106.2
16 PROVISIONS
At 31st March 2009, provisions of US$41.8 million (2008:
US$46.4 million) include provisions for defective goods
returns of US$37.0 million (2008: US$41.5 million).
Defective
goods
returns
US$ million
At 1st April 2008 41.5
Effect of changes in exchange rates (1.1)
Additional provisions 35.4
Unused amounts reversed (0.4)
Charged to consolidated income statement 35.0
Utilised during the year (38.4)
At 31st March 2009 37.0
The Group undertakes to repair or replace items that fail to
perform satisfactorily in accordance with the terms of the
sales. 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.