Vtech 2015 Annual Report Download - page 69

VTech Holdings Limited Annual Report 2015 67
18 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
Carrying
amount
US$ million
Total
US$ million
Within
1 year or
on demand
US$ million
More than
1 year but
less than
2 years
US$ million
More than
2 years but
less than
5 years
US$ million
More than
5 years
US$ million
The Group
At 31 March 2015
Trade creditors 186.1 186.1 186.1 – – –
Other creditors and accruals 155.4 155.4 155.4 – – –
Derivatives settled gross:
Forward foreign exchange contracts
– cash flow hedge (note 18(b)(i))
– outflow 460.1 407.1 53.0 – –
– inflow (465.6) (412.3) (53.3) – –
The Company
At 31 March 2015
Other creditors and accruals 0.5 0.5 0.5 – – –
The Group
At 31 March 2014
Trade creditors 140.8 140.8 140.8 – – –
Other creditors and accruals 159.3 159.3 159.3 – – –
Derivatives settled gross:
Forward foreign exchange contracts
– cash flow hedge (note 18(b)(i))
– outflow 417.1 390.3 26.8 – –
– inflow (412.8) (385.6) (27.2) – –
The Company
At 31 March 2014
Other creditors and accruals 0.5 0.5 0.5 – – –
(e) Fair values measurement
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 2014 and 31
March 2015.
Financial instruments carried at fair value
The Group’s financial instruments are measured at fair value at
the balance sheet date on a recurring basis, categorised into
three-level fair value hierarchy as defined in IFRS 13, Fair Value
Measurement. The level into which a fair value measurement is
classified and determined with reference to the observability
and significance of the inputs used in the valuation technique
as follows:
• Level 1 valuations: Fair values measured using only Level 1
inputs i.e. unadjusted quoted prices in active markets for
identical assets or liabilities at the measurement date
• Level 2 valuations: Fair values measured using Level 2 inputs
i.e. observable inputs which fail to meet Level 1, and not using
significant unobservable inputs. Unobservable inputs are
inputs for which market data are not available
• Level 3 valuations: Fair values measured using significant
unobservable inputs
At 31 March 2015, the fair values of the forward foreign exchange
contracts included in financial assets and financial liabilities were
US$6.6 million (31 March 2014: US$Nil) and US$1.1 million (31
March 2014: US$4.3 million) respectively. At 31 March 2015 and
31 March 2014, the fair values of all forward foreign exchange
contracts were categorised as Level 2.
During the year ended 31 March 2015, there were no transfers
between Level 1 and Level 2, or transfers into or out of Level 3 fair
value hierarchy classifications.
The fair value of forward foreign exchange contracts in Level 2 is
determined by using the forward exchange rates at the balance
sheet date and comparing them to the contractual rates.