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VTech Holdings Ltd Annual Report 2010 61
20 Financial Risk Management and Fair Values (Continued)
(d) Liquidity risk
Cash management of the Company and wholly-owned subsidiaries of the Group are substantially centralised at the Group level. The
Group’s policy is to regularly monitor current and expected liquidity requirements to ensure that it maintains sufficient reserves of cash
and adequate committed lines of funding from major financial institutions to meet its liquidity requirements in the short and longer
term.
The following tables detail the remaining contractual maturities at the balance sheet date of the Group’s derivative and non-derivative
financial liabilities, which are based on contractual undiscounted cash flows and the earliest date of the Group can be required to pay:
Contractual undiscounted cash flows
More than More than
Within 1 year but 2 years but
Carrying 1 year or less than less than More than
amount Total on demand 2 years 5 years 5 years
US$ million US$ million US$ million US$ million US$ million US$ million
At 31 March 2010
Creditors and accruals 272.9 272.9 272.9 – – –
Derivatives settled gross:
Forward foreign exchange
contracts – at fair value
through profit or loss
– outflow 11.0 11.0 – – –
– inflow (11.3) (11.3) – – –
Contractual undiscounted cash flows
More than More than
Within 1 year but 2 years but
Carrying 1 year or less than less than More than
amount Total on demand 2 years 5 years 5 years
US$ million US$ million US$ million US$ million US$ million US$ million
At 31 March 2009
Creditors and accruals 232.9 232.9 232.9 – – –
Forward foreign exchange
contracts – cash flow hedge
(net settled) (0.2) (0.1) (0.1) – – –
Derivatives settled gross:
Forward foreign exchange
contracts – cash flow hedge
– outflow 16.3 16.3 – – –
– inflow (16.0) (16.0) – – –
Derivative financial instruments
Forward foreign exchange contracts were remeasured to fair
values at each balance sheet date. The positive fair value of
derivative financial instruments at 31 March 2010 were US$0.3
million (2009 negative: US$0.3 million).
(e) Fair values
The fair values of trade debtors, deposits and cash and trade
creditors and accruals approximate their carrying amounts due
to the short-term maturities of these assets and liabilities.
The fair value of forward foreign exchange contracts is
determined using forward exchange market rates at the balance
sheet date.
All financial instruments are carried at amounts not materially
different from their fair values as at 31 March 2010 and 31 March
2009. Amounts due from/(to) subsidiaries are unsecured, interest
free and have no fixed repayment terms. Given these terms it is
not meaningful to disclose the fair values.