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VTech Holdings Ltd Annual Report 2011 59
21 Contingent Liabilities
The directors have been advised that certain accusations of
infringements of patents, trademarks and tradenames have been
lodged against the Company and its subsidiaries. In the opinion
of the legal counsel, it is too early to evaluate the outcome of
these claims and provisions have been made only to the extent
that the amounts can be reliably estimated. Certain subsidiaries of
the Group are involved in litigation arising in the ordinary course
of their respective businesses.
Having reviewed outstanding claims and taking into account
legal advice received, the directors are of the opinion that even if
the claims are found to be valid, there will be no material adverse
effect on the financial position of the Group.
As at 31 March 2011, there were contingent liabilities in respect
of guarantees given by the Company on behalf of subsidiaries
relating to overdrafts, short term loans and credit facilities of
up to US$244.5 million (2010: US$233.9 million). The Company
has not recognised any deferred income for the guarantees
given in respect of borrowings and other banking facilities for
subsidiaries as their fair value cannot be reliably measured and
their transaction price was US$nil.
As at the balance sheet date, the directors do not consider it is
probable that a claim will be made against the Company under
any of the guarantees.
22 Investment in Subsidiaries and Amounts due from/(to) Subsidiaries
(a) The amounts due from/(to) subsidiaries are unsecured, interest free and have no fixed terms of repayment.
(b) Details of the Company’s interest in those subsidiaries which materially affect the results or assets of the Group as at 31 March 2011
are set out below:
Name of subsidiary
Fully paid issued
share capital
Percentage of
interest held by
the Group Principal activity
Incorporated/established and operating in Hong Kong:
VTech Communications Limited Ordinary HK$1,000
Deferred HK$5,000,000
*100 Design, manufacture and
sale of electronic products
VTech Electronics Limited Ordinary HK$5,000,000 *100 Design, manufacture and
distribution of electronic
products
VTech Telecommunications Limited Ordinary HK$1,000
Deferred HK$5,000,000
*100 Design, manufacture
and distribution of
telecommunication products
Perseus Investments Limited Ordinary HK$1,000
Deferred HK$1,000
100 Property holding
Valentia Investment Limited Ordinary HK$1,000
Deferred HK$1,000
100 Property holding
Incorporated/established and operating in Australia:
VTech Telecommunications (Australia) Pty Limited AUD1 *100 Sale of telecommunication
products
Incorporated/established and operating in Canada:
VTech Technologies Canada Ltd. Class A CAD5,000
Class B CAD195,000
*100
*100
Sale of telecommunication
and electronic products
Incorporated/established and operating in France:
VTech Electronics Europe S.A.S. EUR450,000 *100 Sale of electronic products
Incorporated/established and operating in Germany:
VTech Electronics Europe GmbH EUR500,000 *100 Sale of electronic products
VTech IAD GmbH EUR25,000 *100 Development of broadband
connectivity software