Vtech 2009 Annual Report Download - page 59

VTech Holdings Ltd Annual Report 2009 57
25 MATERIAL RELATED PARTY
TRANSACTIONS
Remuneration for key management personnel of the Group,
including amounts paid to the directors of the Company and
the five highest paid individuals is disclosed in note 3 to the
financial statements.
Pursuant to a lease entered into by the Company with
Aldenham Company Limited (“Aldenham”), the Company
paid rental of HK$3,000,000 for the year to provide housing
for a director in accordance with the terms of his service
contract for a term of 2 years expired on 31st March 2009.
Aldenham is an indirect wholly owned subsidiary of a trust
in which the family members of the director are beneficiaries
and therefore Aldenham is a connected person of the
Company.
VTech Communications Limited, an indirect wholly owned
subsidiary of the Company and Ality Limited (“Ality”) entered
into a Manufacturing Agreement for an initial term of
24 months commencing on 10th August 2007 with
an annual cap of HK$51.25 million for the year. Ality is a
company which is wholly owned by Mr. William
WONG Yee Lai, the son of Dr. Allan WONG Chi Yun.
Dr. WONG is a director, chief executive and a substantial
shareholder of the Company, Ality is therefore a connected
person of the Company.
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.
26 POSSIBLE IMPACT OF AMENDMENTS,
NEW STANDARDS AND
INTERPRETATIONS ISSUED BUT NOT
YET EFFECTIVE FOR THE ANNUAL
ACCOUNTING PERIOD ENDED
31ST MARCH 2009
Up to the date of issue of these financial statements, the
International Accounting Standard Board has issued a
number of amendments, new standards and interpretations
which are not yet effective for the accounting year ended
31st March 2009 and which have not been adopted in these
financial statements.
IFRSs (Amendments) (1) Improvements to IFRSs 2008
IFRSs (Amendments) (2) Improvements to IFRSs 2009
IAS 1 (Revised) (3) Presentation of Financial
Statements
IAS 27 (Revised) (4) Consolidated and Separate
Financial Statements
IAS 39 (Amendments) (4) Eligible Hedged Items
IFRS 2 (Amendment) (3) Vesting Conditions and
Cancellations
IFRS 8 (3) Operating Segments
IFRIC 13 (5) Customer Loyalty
Programmes
Notes:
(1) Effective for annual periods beginning on or after 1st January
2009 except the amendments to IFRS5, “Non-current Assets Held
for Sale and Discounted Operations” which is effective for annual
periods beginning 1st July 2009.
(2) Effective for annual periods beginning on or after 1st January
2010 except the amendments to IFRS2, “Share-based Payment”,
IAS 38, “Intangible Assets”, IFRIC 9 “Reassessment of Embedded
Derivatives” and IFRIC 16 “Hedges of a Net Investment in a
Foreign Operation”, which are effective for annual period
beginning 1st July 2009.
(3) Effective for annual periods beginning on or after 1st January
2009.
(4) Effective for annual periods beginning on or after 1st July 2009.
(5) Effective for annual periods beginning on or after 1st July 2008.
The Group is in the process of making an assessment of the
expected impact of these amendments, new standards and
new interpretations in the period of initial application. So
far it has concluded that while the adoption of the Revised
IAS 1 and IFRS 8 may result in new or amended disclosures,
these new and revised IFRSs are unlikely to have a significant
impact on the Group’s results of operations and financial
position.
27 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 17, 18 and 20 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.