Vtech 2013 Annual Report Download - page 61

59
VTech Holdings Ltd Annual Report 2013
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.
(b) 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.
At 31 March 2013, the Group’s trade debtors of US$7.2 million
(2012: US$6.9 million) were individually determined to be impaired
as management considered that these receivables cannot be
recovered. Consequently, full provisions for these doubtful debts
were recognised.
The movement in the allowance for doubtful debts during the
year, including both specific and collective loss components,
is as follows:
2013 2012
Note US$ million US$ million
At 1 April 6.9 7.9
Impairment loss recognised 2 1.7 1.5
Impairment loss written back 2 –(1.7)
Uncollectible amounts
written off (1.3) (0.8)
Effect of changes in
exchange rates (0.1) –
At 31 March 7.2 6.9
(c) Trade debtors that are not impaired
As at 31 March 2013, 97% (2012: 97%) of the Group’s trade debtors
were not impaired, of which 100% (2012: 99%) 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 balances are
considered to be fully recoverable. The Group does not hold any
collateral over these balances.
12 Deposits and Cash
The Group The Company
2013 2012 2013 2012
US$ million US$ million US$ million US$ million
Short term
bank deposits 135.0 150.0 ––
Cash at bank
and in hand 173.6 176.5 0.8 0.6
Deposits and cash 308.6 326.5 0.8 0.6
Less: bank deposits
with maturity
greater than
three months (135.0) (150.0) ––
Cash and cash
equivalents in the
consolidated
statement of
cash flows 173.6 176.5 0.8 0.6
Deposits and cash as at 31 March 2013 include US$28.9 million
equivalent (2012: US$22.5 million) placed with banks in the PRC,
the remittance of which is subject to relevant rules and regulations
of foreign exchange control promulgated by the PRC government.
10 Stocks
(a) Inventories in the consolidated balance sheet comprise:
2013 2012
US$ million US$ million
Raw materials 89.9 82.1
Work in progress 29.2 35.1
Finished goods 157.8 122.0
276.9 239.2
Stocks carried at net realisable value at 31 March 2013 amounted
to US$5.8 million (2012: US$6.7 million).
(b) The analysis of the amount of inventories recognised as an
expense and included in the consolidated income statement
is as follows:
2013 2012
US$ million US$ million
Carrying amount of inventories sold 1,255.1 1,214.3
Write-down of inventories 5.4 2.3
Reversal of write-down of inventories (0.3) (2.9)
1,260.2 1,213.7
The reversal of write-down of inventories arose due to an increase
in estimated net realisable value of certain products as a result of
change in consumer preferences.
11 Debtors, Deposits and Prepayments
2013 2012
Note US$ million US$ million
Trade debtors (Net of
allowance for doubtful
debts of US$7.2 million
(2012: US$6.9 million)) 11(a)&(b) 224.9 210.6
Other debtors, deposits
and prepayments 28.9 29.8
Forward foreign exchange
contracts
– held as cash flow
hedging
instruments 18(b)&(d) 2.5 1.4
– held as fair value
through profit or
loss 18(d) 0.8 –
Pension assets 15 2.4 2.4
259.5 244.2
All of other debtors, deposits and prepayments apart from the
amounts of US$7.1 million (comprised largely of royalty
prepayments) (2012: US$8.7 million) are expected to be recovered
or recognized as an expense within one year.
(a) Ageing Analysis
An ageing analysis of net trade debtors by transaction date is as
follows:
2013 2012
US$ million US$ million
0 – 30 days 114.9 114.8
31 – 60 days 77.3 73.7
61 – 90 days 24.3 18.1
>90 days 8.4 4.0
Total 224.9 210.6