63
VTech Holdings Limited
Annual Report 2014
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
More than More than
Within 1 year but 2 years but
Carrying
1 year or
less than less than More than
amount
Total
on demand
2 years
5 years
5 years
US$ million US$ million US$ million US$ million US$ million US$ million
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
– 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
–
–
–
The Group
At 31 March 2013
Trade creditors
176.2
176.2
176.2
–
–
–
Other creditors and accruals
154.4
154.4
154.4
–
–
–
Derivatives settled gross:
Forward foreign exchange contracts
– at fair value through profit or loss
– outflow
20.8
20.8
–
–
–
– inflow
(21.6)
(21.6)
–
–
–
Derivatives settled gross:
Forward foreign exchange contracts
– cash flow hedge
– outflow
211.6
211.6
–
–
–
– inflow
(214.1)
(214.1)
–
–
–
The Company
At 31 March 2013
Other creditors and accruals
0.4
0.4
0.4
–
–
–
Derivative financial instruments
Forward foreign exchange contracts were recognised initially at fair
value. At each balance sheet date the fair value is remeasured. The
negative fair value of derivative financial instruments designated as
fair value through profit or loss and cash flow hedges at 31 March
2014 were US$Nil (2013: positive US$0.8 million) and US$4.3 million
(2013: positive US$2.5 million) respectively.
(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 2013 and
31 March 2014.
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
