Vtech 2016 Annual Report Download - page 50

Consolidated Financial Statements
46 VTech Holdings Limited Annual Report 2016
Consolidated Statement of Cash Flows
For the year ended 31 March 2016
2016 2015
Note US$ million US$ million
Operating activities
Operating profit 202.3 220.1
Depreciation of tangible assets 2 34.9 31.5
Amortisation of leasehold
land payments 2 0.2 0.1
Gain on disposal of tangible
assets 2 –(0.2)
Decrease/(increase) in stocks 4.8 (24.3)
Increase in debtors, deposits
and prepayments (7.1) (18.1)
Increase in creditors and
accruals 3.1 41.6
Increase/(decrease) in
provisions for defective
goods returns and other
liabilities 4.2 (0.6)
Increase in net obligations
on defined benefit scheme 0.4 0.3
Cash generated from
operations 242.8 250.4
Interest received 0.8 1.6
Taxes paid (26.9) (22.5)
Net cash generated from
operating activities 216.7 229.5
Investing activities
Purchase of tangible assets 7 (38.3) (30.9)
Proceeds from disposal of
tangible assets 0.3 0.2
Proceeds received from bank
deposits with original
maturity greater than
three months 14 70.0 65.0
Deposit paid for acquisition
of tangible assets (3.3) –
Purchase of investments (3.0) –
Net cash generated from
investing activities 25.7 34.3
Financing activities
Proceeds from shares issued
upon exercise of share
options
18(b)&
19(b) –3.4
Payment for shares acquired
for Share Purchase Scheme 18(c) (1.0) (1.7)
Dividends paid 5 (195.9) (203.5)
Net cash used in financing
activities (196.9) (201.8)
Effect of exchange rate
changes 3.3 (25.7)
Increase in cash and
cash equivalents 48.8 36.3
Cash and cash equivalents
at 1 April 224.2 187.9
Cash and cash equivalents
at 31 March 14 273.0 224.2
Principal Accounting Policies
A Principal Activities and Organisation
The Group’s principal activities and operating segments are set out
in note 1 to the  nancial statements.
The Company was incorporated in Bermuda. In view of the
international nature of the Group’s operations, the  nancial
statements are presented in United States dollars.
B Statement of Compliance
The consolidated  nancial statements have been prepared in
accordance with all applicable International Financial Reporting
Standards (“IFRSs”), which collective term includes all applicable
individual International Financial Reporting Standards, International
Accounting Standards (“IASs”) and related Interpretations
promulgated by the International Accounting Standards
Board (“IASB”).
These  nancial statements comply with the applicable disclosure
requirements of the Hong Kong Companies Ordinance and the
applicable disclosure provisions of the Rules Governing the Listing
of Securities on The Stock Exchange of Hong Kong Limited (“the
Listing Rules”). A summary of the signi cant accounting policies
adopted by the Group is set out below.
The IASB has issued the following new and revised IFRSs that are
 rst e ective for the current accounting period of the Group and
the Company. Of these, the following developments are relevant
to the Group’s  nancial statements:
• Amendments to IAS 19, Employee bene ts – De ned bene t
plans: Employee contributions
• Annual improvements to IFRSs 2010-2012 cycle
• Annual improvements to IFRSs 2011-2013 cycle
Amendments to IAS 19, Employee bene ts – De ned bene t
plans: Employee contributions
The amendments introduce a relief to reduce the complexity of
accounting for certain contributions from employees or third
parties under de ned bene t plans. When the contributions are
eligible for the practical expedient provided by the amendments, a
company is allowed to recognise the contributions as a reduction
of the service cost in the period in which the related service is
rendered, instead of including them in calculating the de ned
bene t obligation. The amendments do not have an impact on
these  nancial statements as the de ned bene t plans operated by
the Group are wholly funded by contributions from the Group and
do not involve contributions from employees or third parties.
Annual Improvements to IFRSs 2010-2012 Cycle and
2011-2013 Cycle
These two cycles of annual improvements contain amendments
to nine standards with consequential amendments to other
standards. Among them, IAS 24, Related party disclosures has been
amended to expand the de nition of a “related party” to include
a management entity that provides key management personnel
services to the reporting entity, and to require the disclosure of the
amounts incurred for obtaining the key management personnel
services provided by the management entity. These amendments
do not have an impact on the Group’s related party disclosures as
the Group does not obtain key management personnel services
from management entities.
The Group has not applied any new standard, amendment or
interpretation that is not yet e ective for the current accounting
period (note 25).
Notes to the Financial Statements
The notes and principal accounting policies on pages 46 to 68
form part of these  nancial statements.