Vtech 2014 Annual Report Download - page 59

57VTech Holdings Limited Annual Report 2014
13 Creditors and Accruals (Continued)
(a) Ageing Analysis
An ageing analysis of trade creditors by transaction date is
as follows:
2014
US$ million
2013
US$ million
0 – 30 days 56.5 68.3
31 – 60 days 33.4 35.1
61 – 90 days 34.8 47.5
>90 days 16.1 25.3
Total 140.8 176.2
(b) Other creditors and accruals
Other creditors and accruals comprised largely of accruals in staff
costs, advertising and promotion expenses, rebates and allowances
to customers, and miscellaneous operating expenses.
Other creditors and accruals are expected to be settled or
recognised as income within one year or are repayable on demand.
14 Provisions
At 31 March 2014, provisions of US$27.9 million (2013: US$28.2
million) include provisions for defective goods returns of US$22.7
million (2013: US$23.0 million).
Defective goods returns
2014
US$ million
2013
US$ million
At 1 April 23.0 26.4
Effect of changes in exchange rates 0.1 (0.1)
Additional provisions charged to
consolidated income statement 26.4 25.4
Utilised during the year (26.8) (28.7)
At 31 March 22.7 23.0
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.
15 Pension Schemes
The Group operated a defined benefit scheme and defined
contribution schemes in Hong Kong and overseas. The defined
contribution scheme operated in Hong Kong complied
with the requirements under the Mandatory Provident Fund
(“MPF”) Ordinance.
(a) Defined contribution schemes
For the defined contribution schemes operated for overseas
employees and Hong Kong employees under the MPF Ordinance,
the retirement benefit costs expensed in the consolidated income
statement amounted to US$13.8 million (2013: US$10.8 million)
and US$0.7 million (2013: US$0.6 million) respectively.
(b) Defined benefit scheme
For the defined benefit scheme (the “Scheme”) operated for Hong
Kong employees, contributions made by the Group during the
year were calculated based on advice from Towers Watson Hong
Kong Limited (“Towers Watson”), independent actuaries and
consultants. The Scheme is valued annually. The latest actuarial
valuation was completed by Towers Watson as at 31 March 2014
using the projected unit credit method.
(i) For the defined benefit scheme, the amounts recognised in
the consolidated balance sheet are as follows:
2014
US$ million
2013
US$ million
Fair value of Scheme assets 26.8 24.3
Present value of funded defined
benefit obligations (28.8) (30.8)
Net obligations on defined benefit
scheme recognised in the
consolidated balance sheet (2.0) (6.5)
A portion of the above liability is expected to be settled after
more than one year. However, it is not practicable to segregate
this amount from the amounts payable in the next twelve
months, as future contributions will also relate to future services
rendered and future changes in actuarial assumptions and
market conditions. The Group expects to pay US$1.7 million in
contributions to defined benefit retirement scheme in the year
ending 31 March 2015.
(ii) Movement in fair value of Scheme assets:
2014
US$ million
2013
US$ million
At 1 April 24.3 22.9
Interest income on Scheme assets 0.3 0.3
Return on Scheme assets excluding
interest income 1.9 1.3
Actual Group’s contributions 1.3 1.4
Actual benefit paid (0.9) (1.5)
Administrative expenses paid from
Scheme assets (0.1) (0.1)
At 31 March 26.8 24.3
(iii) Movement in present value of defined benefit obligations:
2014
US$ million
2013
US$ million
At 1 April 30.8 31.1
Remeasurement:
Actuarial gains arising from changes in
liability experience (0.5) (0.5)
Actuarial gains arising from changes in
financial assumptions (2.8) –
Actuarial gains arising from changes in
demographic assumptions –(0.7)
Interest cost 0.4 0.4
Current service cost 1.8 2.0
Actual benefits paid (0.9) (1.5)
At 31 March 28.8 30.8
The weighted average duration of the defined benefit obligations
is 9.2 years (2013: 10.3 years).