FRONTLINE COVER FA 070606 CR2.indd

NO ORDINARY IT SERVICE PROVIDER 

frontline technologies corporation ltd annual report 2006

MOVER. 

SHAKER. 

TRAILBLAZER.

frontline technologies corporation ltd 

annual report 2006 1 

Frontline Technologies Corporation Ltd is a 

leading provider of end-to-end IT services 

with a regional footprint that extends across 

Singapore, Malaysia, the Philippines, Thailand, 

Hong Kong, Taiwan, China and India. 

At Frontline, our strong and diverse team of 

over 3,900 professionals share a common 

goal: To set the benchmark in the creation 

and development of end-to-end IT services 

and solutions that deliver the best cost and 

performance value to our global customers. 

Our vast range of proprietary methodologies 

and intellectual property such as IDEA and 

COMMAND serves the needs of our blue-chip 

customers across Asia-Pacific. 

Established in 1993 and listed on the Singapore 

Exchange in March 2001, we have built 

strategic partnerships with leading technology 

companies such as Sun Microsystems, Oracle, 

Hitachi Data Systems, Symantec, Mercury 

Interactive, Vignette, ActivCard, Internet 

Securitiy Systems and more. 

Key Services 

• IT Infrastructure 

• IT Outsourcing 

• IT Consulting & Implementation

2 


annual report 2006 

NO BLUFF 

This is where we’ve set our sights: 

To be the leading 

billion-dollar, pan-asian 

technology solutions 

company preferred 

by customers, partners 

and employees.



VISION 

To be the leading billion-dollar, 

pan-Asian technology solutions company. 

MISSION 

We enable the best business results through ideas, 

people and technology preferred by customers, 

partners and employees. 

CORE VALUES 

• Focus on the Customer 

• Embrace Integrity 

• Achieve Excellence Always 

• Respect The Individual 

• Play As a Team 

> contents 

1 corporate profile 5 joint message from the chairman and president & chief executive officer 

9 financial highlights 10 strong financial performance 11 board of directors 14 group structure 

15 corporate information 16 highlights of the year 19 corporate review 28 corporate governance report 

40 financial contents

4 



NO 

ACCIDEN 

NTAL 

GRO 

ROWTH 

NO ACCIDENTAL 

25.9% 

Gross Profit Margins 

ˆ41.5% 

Net Profit 

S$169.1 million 

Revenue



> joint message from the chairman 

and president & chief executive officer 

GROWTH 

Dear Shareholders, 

Financial year 2006 marked Frontline’s 

third consecutive year in achieving 

profitable, double-digit revenue growth, 

gaining significant market share and 

increasing market opportunity for our 

products and services around the Asia 

Pacific region. 

We continued on our path to 

strengthen our foundation of 

growth and profitability through 

a concentrated focus on our 

Outsourcing and IT Services 

businesses, which contributed to 

better margins. We are pleased to 

report that this focus, together with 

the Group’s strategy of leveraging 

on the advantage of cost arbitrage 

via our offshore delivery capabilities 

in India and China, led to a third 

consecutive year-on-year growth in 

revenue and net profit for the financial 

year ended 31 March 2006. 

Strong Financial Growth 

Increased contributions across all sectors 

of our business saw strong revenue 

growth of 14.6%, from $147.5 million in 

FY2005 to $169.1 million in FY2006. 

Steve Ting 

Executive Chairman & Founder 

Frontline Technologies Corporation Limited 

As the Group turned its focus on higher margin revenues, 

gross margins also continued to improve, increasing 

from 25.0% in FY2005 to 25.9% in FY2006. This resulted 

in an impressive 41.5% increase in our net profit to $7.3 

million, a $2.1 million increase from FY2005. Our gross 

margin percentage and profit before tax also reached an 

all-time high over four quarters of 25.9% and $11.1 million, 

respectively. 

Key Growth Drivers 

In line with the Group’s call to action, the year’s growth 

drivers were primarily in the Outsourcing and IT Consulting 

and Services segments. In FY2006, revenue from the 

provision of IT Consulting and Services increased by 

123.1% to $16.9 million, and contributed 10.0% to total 

revenue, while recurring revenue from IT Outsourcing 

projects grew by a robust 39.7% to $61.5 million, and 

contributed 36.4% to total revenue. Collectively, these 

value-added related segments accounted for 46.4% of our 

total revenue. IT Infrastructure sales accounted for 53.6% 

of total revenue, compared to 65.0% in FY2005. Moving 

forward, we expect IT Infrastructure revenue to further 

decrease as a proportion of total revenue, as we focus on 

higher margin service revenue. 

India and China continue to be twin growth engines, 

registering notable earnings in FY2006. India achieved 

$62.8 million in revenue, contributing 37.2% of total 

revenue, up 5.9% from FY2005. The Group’s overseas 

subsidiaries continue to increase in proportion to overall 

Group revenues, accounting for 52.9% of the total revenue. 

Revenue from our operations in Singapore also increased 

to $79.7 million, compared to $68.7 million in FY2005.

6 



Our Associate Companies in China and Thailand registered 

double-digit growth, with a combined revenue of $286 

million. Combining the revenues of our Associate 

Companies, Frontline generated some $455 million of 

business over the past 12 months. We continue to look 

towards expanding our footprint in the Asia Pacific region. 

Building a Growing Presence in Asia 

Frontline’s presence in the Asia-Pacific region spans over 

50 cities in eight countries, allowing us to efficiently and 

effectively service our customers right at their doorstep. 

Our talent network includes some 3,900 employees, 

including 700 IT professionals based in China and another 

1,800 stationed in India. Our wealth in human capital 

remains fundamental to our growth – together, the skills 

and expertise of our people propel us towards the vision of 

becoming the leading, billion-dollar, pan-Asian technology 

solutions provider. 

Across the Asia-Pacific region, the Group continues to 

forge ahead, leveraging on our capabilities and capitalising 

on the opportunities to build a stronger foundation 

for growth. Our strategies for maximising profit and 

shareholder value, together with strong leadership and 

sound management, drives the Group towards significant 

and greater achievements with growth reported in all 

segments of our businesses in FY2006. 

Twin Engines of Growth – China & India 

China 

In FY2006, MDCL-Frontline (China) Limited (“MDCL- 

Frontline”) has once again performed well, with a 

18.0% increase in revenue to $140.3 million, compared 

to $118.9 million in FY2005. MDCL-Frontline secured 

$21million in contracts from leading global corporations 

in the telecommunications and financial services 

sectors, including Kodak (China) Limited, China Mobile 

Communications Corporation, China Unicom, Bank of 

Communications and Bank of Shanghai. 

In order to capture a larger share of the outsourcing 

market, and to develop our software development 

business, branch offices were opened in Taiwan and Hong 

Kong. With the establishment of these offices, we will be 

able to concentrate our efforts on the advancement of 

our business in the respective markets. Additional offices 

providing software and infrastructure management 

services were also established in China in areas such as 

Lanzhou, Chongqing and Nanjing for the same reason. 

Going forward, we see opportunities in extending our 

services into the telecommunications, manufacturing and 

financial services industries. We will also focus on growing 

our sales and implementation of our Mocha suite of 

software products for the China market. 

India 

In FY2006, Accel Frontline Limited (“Accel Frontline”) 

seized the opportunities that arose from the tremendous 

economic boom and continued to forge ahead to record 

a 35.9% increase in turnover, from $46.2 million in FY2005 

to $62.8 million in FY2006. Contributing 37.2% to our 

total Group revenue, Accel Frontline continues to be a key 

revenue driver. 

Besides registering an impressive set of 

results for FY2006, Accel Frontline also 

garnered some noteworthy wins. Amidst 

keen competition, Accel Frontline won the 

contract to provide the IT infrastructure 

for The State Bank of India’s core 

banking solution, as well as a milliondollar 

IT server infrastructure deal 

with IBM Global Services for Bharti 

Telecom. We are also pleased to note 

that Accel Frontline signed a strategic 

partnership with the Dubai-based 

GEMS Education Group to develop 

and implement a multi-million 

dollar flagship School Enterprise 

Resource System for GEMS Schools 

worldwide. 

Moving forward, we will continue to 

enhance our professional services and 

application management offerings on 

the domestic front. In addition, we also 

have plans to expand Accel Frontline’s 

global software operations, with a focus 

on the US market and selected Middle 

East markets. 

Lim Chin Hu 

President & Chief Executive Officer 

Frontline Technologies Corporation Limited



Accel Frontline has filed for Initial Public Offering (“IPO”) 

with the Bombay Stock Exchange and National Stock 

Exchange. If successful, Accel Frontline’s IPO in India would 

strengthen our brand name, provide access to local capital 

market in India and help propel our growth further as we 

look to expand our operations into the United States and 

develop a stronger presence in the Middle East region, 

in places such as United Arab Emirates, Saudi Arabia and 

Bahrain. The eventual listing is subject to the approvals by 

the relevant authorities and prevailing market conditions. 

ASEAN Business 

Singapore and Malaysia 

The Group also continued to make headway into 

Singapore and Malaysia. 

Frontline secured several large contracts, including an 

Outsourcing contract with a major insurance company. We 

also secured another infrastructure management contract 

with a leading hospital. Frontline recorded several key 

wins in the professional and managed services segments 

with significant deals won in the education, financial and 

telecommunication sectors. 

We have acquired 100% interest in PSA Corporation’s 

fully-owned subsidiary, Dalian BHR Consultancy Services 

Co Ltd (“DBHR”), now renamed BHR-Frontline Technologies 

(Dalian) Company Limited (“BHR-Frontline”). With a fiveyear 

IT outsourcing services contract worth $20 million, 

Frontline will bring its proven Outsourcing process 

methodologies and consultancy experience to fulfill PSA 

Corporation’s application development and management 

needs. BHR-Frontline continues to provide employment 

prospects for all the 170 staff of DBHR. 

Frontline Malaysia made strides in the education industry 

with a multi-million win to provide Universiti Putra 

Malaysia with a multi-faceted operating system that will 

enhance its infrastructure security and manageability, and 

minimise the need for users to create multiple identities on 

multiple systems. 

Philippines 

The year witnessed our Philippines operations securing 

wins in the government and telecommunications sectors. 

In October 2005, the Group increased our stake in Sun 

Microsystems Philippines Ltd, from 25% to 51%. This move 

will further strengthen our presence in Asia and allow us 

to realise the untapped potential in Philippine’s growing 

IT market as we continue to grow our presence in the 

telecommunications and financial services sectors, and 

keep our foothold in the government arena. 

Thailand 

Our associate company in Thailand, G-Able, recorded a 

growth of 72.8% in revenue, achieving $145.9 million 

in FY2006 compared to $84.4 million in FY2005. G-Able 

continues to grow its services offerings, maintaining a 

strong presence in the banking and telecommunications 

sectors with new IT infrastructure and services deals with 

major customers in these industries. In FY2006, G-Able 

was awarded a large contract by Kasetsart University to 

plan and design a mission-critical infrastructure system, 

which include a disaster recovery solution to enhance the 

stability, security and reliability of the system to render IT 

services within the university. 

A Stronger Financial Position 

The Group’s balance sheet and cash position remain strong 

with cash and cash reserves standing at a healthy $32.7 

million, with $7.1 million cash generated from operations 

during the financial year. This is after payment of 

approximately $4 million in dividends in December 2005. 

Net total assets (NTA) of the Group have grown to $104.3 

million or 12.66 cents per share, compared to 12.54 cents 

per share in FY2005. Earnings per share improved from 0.63 

cent in FY2005 to 0.89 cent in FY2006, a marked increase of 

41.3%. Of the NTA of 12.66 cents per share, approximately 

4 cents or 31.4% are backed by cash. 

Providing Good Returns to Shareholders 

The Group has achieved three consecutive years of profit 

earnings since FY2004 and attaining profit growth year on 

year. NTA has grown similarly over the last three years. The 

Group has proposed a first and final dividend of 0.6 cent 

per share for FY2006 made in December 2005. 

The Board of Directors is pleased to announce a dividend 

policy payout of at least 30% of net profit for FY2007 to 

FY2010. The Board will review, and if appropriate, revise 

the dividend policy regularly to accommodate the Group’s 

future cash needs. 

Exciting Times Ahead 

As we extend our footprint within the region through our 

growth strategy as outlined above, our ability to scale 

ourselves quickly by leveraging on our regional operations 

to enjoy cost arbitrage will yield significant advantage for 

growth. Independent market research firms such as IDC 

and Gartner Research have forecasted an annual growth 

rate of 8.6% for the IT industry in Asia, driven by explosive 

growth in countries such as India and China, which are 

expected to contribute some 63% of total IT spending in 

the region.

8 



Within the area of Outsourcing alone, revenue is expected 

to rise to $25.3 billion in 2009 at a compounded annual 

growth rate in excess of 10%. As global businesses place 

increasing demands on IT service providers to deliver 

more value at a lower cost, our Outsourcing business will 

continue to be the main thrust of our growth strategy. 

Leveraging on our reputation as a total solutions provider, 

we will also seek avenues for expansion through the 

provision of our IT infrastructure services, which acts as a 

good entry point for further business development. 

In recent IDC projections, both China and India will top 

the IT services market in the region. By 2010, the Chinese 

market is expected to grow at a compounded annual 

growth rate of 18.1%, and India’s IT services market will 

grow by 16.6%. 

Alongside this, several Asian countries, including Singapore 

and Malaysia, have also announced long-term mega-plans 

to enhance IT infrastructure in their respective countries. 

In Singapore, the Infocomm Development Authority (“IDA”) 

recently announced a 10-year master plan (iN2015) to 

transform Singapore into an intelligent nation powered by 

info-communications. One of the objectives of the iN2015 

plan is to establish a Next Generation National Infocomm 

Infrastructure that will see a pervasive, ultra high-speed 

national wireless broadband network being built. This will 

help fuel demand for new generation of applications and 

services to take advantage of the high-speed broadband 

bandwidth in the coming year. To deal with ever-evolving 

cyber security threats, IDA also outlined an Infocomm 

Security Masterplan for a National Authentication 

Framework and a National Trust Framework. 

Barring unforeseen circumstances, we remain confident 

that we will continue to witness double-digit growth in the 

next few years. 

A Word of Appreciation 

The strides that we have made in our growth were possible 

only through the hard work and dedication of every staff 

member of the Frontline team. Our staff commitment, 

execution and passion are the primary reasons that place 

us in a strong position to sustain our profitable growth 

trajectory into 2006 and beyond. Our deepest appreciation 

and thanks also go to our valued customers, Board of 

Directors, shareholders and business partners. Their 

valuable support is the key to our success. 

Steve Ting 

Executive Chairman & Founder 


Lim Chin Hu 



The Malaysian government’s Ninth Malaysian Plan also 

outlines a growth in IT spending in the education, health 

and government sectors over the next few years. 

Frontline’s healthy financial position, together with our 

strong presence and experiences in the Asia Pacific, puts 

us in an ideal position to take full advantage of the market 

upswing in the region from 2006 and beyond. We will be 

expanding organically in India and China, and we will also 

consider operations in countries such as Indonesia and 

Vietnam in the new year.



> financial highlights 

FY2006 FY2005 Change (%) 

Consolidated Profit & Loss Account ($’000) 

Turnover 169,063 147,464 14.6 

Net profit before taxation 11,110 8,210 35.3 

Profit attributable to shareholders 7,293 5,154 41.5 

Consolidated Balance Sheets ($’000) 

Total assets 205,409 193,632 6.1 

Net assets 104,335 103,348 1.0 

Sharholders’ funds 89,987 86,965 3.5 

Consolidated Cash Flow Statement ($’000) 

Net cash from operating activities 7,094 (5,292) NM 

Net cash used in investing activities (8,208) (11,818) (30.5) 

Net cash used in financing activities (2,797) (2,325) 20.3 

Cash and cash equivalents (Note 1) 32,747 35,574 (7.9) 

Dividend per share (cents) 0.60 0.50 20 

Per Share Data (cents) 

Basic earnings 0.89 0.63 41.3 

Diluted earnings 0.89 0.63 41.3 

Net asset value 12.66 12.54 1.0 

Return to shareholders’ funds (%) 8.1 6.0 35.0 

Note 1: Cash and cash equivalents comprise fixed deposits, cash and bank balances 

Revenue by Business Segments ($’000) 

FY2006 

FY2005 

IT Infrastructure 90,580 95,836 

IT Outsourcing 61,514 44,022 

IT Consulting & Implementation 16,969 7,606 

TOTAL 169,063 147,464 

Revenue by Geography ($’000) 

FY2006 

FY2005 

Singapore 79,673 68,737 

Other ASEAN Countries 26,583 32,522 

India 62,807 46,205 

TOTAL 169,063 147,464

10 



> strong financial performance 

GROSS MARGINS IMPROVEMENT 

Revenues & Gross Margins 

FY04-06 

$m 

200 

180 

160 

140 

120 

100 

80 

60 

20.7% 

106.9 

25.0% 

147.5 

25.9% 

169.1 

30.0% 

25.0% 

20.0% 

15.0% 

10.0% 

GM% 

40 

20 

5.0% 

0 

FY04 FY05 FY06 

0.0% 

REVENUE MIX 

FY06 ($m) 

FY05 ($m) 

IT Infrastructure 

$90.6 (53.6%) 

IT Infrastructure 

$95.8 (65.0%) 

2006 

IT Outsourcing 

$61.5 (36.4%) 

2005 

IT Outsourcing 

$44.0 (29.8%) 

IT Consulting & Implementation 

$17.0 (10.0%) 

IT Consulting & Implementation 

$7.6 (5.2%) 

TOTAL REVENUES 

$169.1m 

TOTAL REVENUES 

$147.5m 

KEY INDICATORS : PER SHARE 

EPS & NTA Per Share 

EPS Cents Per Share 

1.00 

0.90 

0.80 

0.70 

0.60 

0.50 

0.40 

0.30 

0.20 

0.10 

10.87 

0.44 

12.54 

0.63 

12.66 

0.89 

13.00 

12.50 

12.00 

11.50 

11.00 

10.50 

NTA Cents Per Share 

0 

FY04 FY05 FY06 

10.00



> board of directors 

1 2 

Steve Ting Tuan Toon 1 

Executive Chairman, Founder & Director 

Mr Steve Ting Tuan Toon is a veteran in the technology 

industry with more than 20 years of experience. He has 

held several management positions in Hewlett Packard 

Singapore and Mentor Graphics Corporation. He started his 

first company, Mentor Graphics Associates Pte Ltd, in 1993 

and subsequently Frontline Technologies Pte Ltd in 1994. 

Mr Ting served in various committees in tertiary 

institutions in Singapore and is also active in providing 

guidance in entrepreneurship via lectures and seminars. 

In recognition of his entrepreneurial achievements, 

Mr Ting was conferred the honorary title of Doctor of 

Philosophy in Business Administration from the Wisconsin 

International University, USA in 2002. In the same year, 

he was also named Ernst and Young’s Entrepreneur of the 

Year (Business Services & Technology). He was appointed 

a council member on The Enterprise Challenge (TEC) 

panel by the Prime Minister’s Office for Public Service 21 

(PS 21) in 2005. Mr Ting holds a Bachelor of Engineering 

degree from the National University of Singapore, a 

post-graduate degree from the Institute of Marketing 

in the United Kingdom and a graduate diploma in 

Marketing Management from the Singapore Institute of 

Management. 

Lim Chin Hu 2 

Group President, Chief Executive Officer & Director 

As the Group President and Chief Executive Officer, Mr Lim 

Chin Hu oversees the Frontline Group’s regionalisation 

and operations. He started his career at Hewlett Packard 

Singapore and held various management positions. Prior 

to joining Frontline in 2000, he was the Managing Director 

of Sun Microsystems (Singapore) and Sun Asia Pacific e- 

Business and Channels Director. 

Mr Lim serves in several infocomm industry committees, 

including being the Secretary of the Singapore Infocomm 

Technology Federation (SiTF), Singapore’s Information 

Technology Standards Committee (iTSC) and the National 

Infocomm Competency Council (NICC). He also serves as a 

board member of the Infocomm Development Authority of 

Singapore (IDA) and sits on the audit committee of the IDA 

Board. Mr Lim holds a Diploma in Electrical and Electronics 

Engineering from Ngee Ann Polytechnic and a Bachelor 

of Computer Science degree from La Trobe University, 

Melbourne, Australia.

12 



3 4 

5 

Shirley Wong Swee Ping 3 

Co-Founder, Vice President 

Director & Managing Director, Frontline Solutions Pte Ltd 

Ms Shirley Wong Swee Ping is currently the Managing 

Director of Frontline Solutions Pte Ltd and has more 

than 16 years of experience in the IT industry. Before 

founding Frontline, Ms Wong was Sales Director at Mentor 

Graphics Associates Pte Ltd, Design Engineer at Chartered 

Electronics Industries Ltd, Regional Applications Manager 

at Cadnetix Pte Ltd (formerly known as Dazix Pte Ltd and 

subsequently Intergraph Pte Ltd) and Design Manager at 

Flextronics Pte Ltd. Ms Wong holds a diploma in Electrical 

and Electronics Engineering from City and Guilds in the 

United Kingdom. Ms Wong is also currently serving as 

the Chairman of the Security Chapter of the Singapore 

Infocomm Technology Federation (SiTF), and a member of 

the National Trust Council. 

Tay Swee Sze 4 

Non-Executive Independent Director 

Mr Tay Swee Sze, a practising Certified Public Accountant, 

is the Managing Director of Tay Swee Sze Advisory Pte Ltd, 

which focuses on business financial advisory services. He 

is also an independent director with CNA Limited, PCA 

technology Limited, Megachem Limited and Airocean 

Group Limited. Up till June 2000, Mr Tay was a Partner at 

Arthur Andersen, Singapore, heading its Global Corporate 

Finance Division where he was primarily responsible for 

Corporate Recovery Services. He also served as Partner in 

the Audit and Business Advisory division under its Emerging 

Business group. Prior to re-joining Arthur Andersen, Mr Tay 

was the Deputy Regional Financial Controller of Citibank 

Asia Pacific Consumer Bank from 1989 to 1993. Mr Tay 

holds a Bachelor of Accountancy (Hons) degree from the 

then University of Singapore, now known as the National 

University of Singapore, and he is a member of the Institute 

of Certified Public Accountants of Singapore. 

Harrison Wang Hong She 5 


Dr Harrison Wang Hong She is the Managing Partner 

of Pine Tree Equity, a private equity fund set up by AIG 

in 2004 for investment in Asia. Dr Wang was the Chief 

Executive Officer of the e-millennium Asia fund established 

by Deutsche Bank in 2000 and he was also the Managing 

Director with the Bank. Prior to joining Deutsche Bank, Dr 

Wang was a Managing Director with General Electric (GE) 

& GE Capital, where he was responsible for its business 

development in Asia and various other businesses, 

including managing four countries for GE Capital in Asia. 

Dr Wang has more than 10 years of experience in the 

Silicon Valley, covering industrial automation technologies 

and venture capital investments for institutions such 

as Stanford Artificial Intelligence Laboratory, Adept 

Technology and H&Q Asia Pacific. Dr Wang holds a Ph.D. 

in Robotics and Industrial Automation and a Master of 

Science degree in Mechanical Engineering, both from 

Stanford University, and a Bachelor of Science degree 

in Mechanical Engineering from the National Taiwan 

University. Dr Wang is a US citizen currently residing in 

Singapore.



6 7 

8 

Robert Yap Min Choy 6 


Mr Robert Yap Min Choy is the Senior Vice President and 

Chief Information Officer of DFS Group Limited based in 

Singapore. 

Currently, he is also the Chairman of the Advisory Board 

of Singapore Management University (SMU) for the 

School of Information Systems. Robert serves in various 

voluntary welfare organisations such as the St Andrew’s 

Mission Hospital (SAMH) and St Andrew’s Autism Centre 

(SAAC) where he is the Deputy President and Chairman, 

respectively. 

Robert has held a career spanning from technology, 

logistics and luxury retail. Most recently, he was the CEO of 

East Asia at PSA International, a global ports and logistics 

company based in Singapore. At PSA, Robert was also the 

CEO for Asia and Middle East, as well as CEO for Strategic 

Services that included Information Technology and 

Logistics. 

Robert holds a Bachelor of Mechanical Engineering 

(Honours) degree and Masters of Engineering Science from 

the University of New South Wales, Australia. 

Paul Andrew Thorley 7 

Non-Executive Director 

Mr Paul Andrew Thorley is the President of Capgemini 

Asia Pacific and the Chief Executive Officer of Capgemini 

Australia. He has 25 years of experience in the IT and 

outsourcing industries, having previously served as Chief 

Operating Officer of Capgemini United Kingdom, a €1.4 

billion corporation, and as a Managing Partner of the Ernst 

& Young market groups in the United Kingdom, and as 

Head of IT Strategy at Andersen Consulting (Accenture). He 

currently holds several board positions in Capgemini joint 

ventures, including NTT-Data in Japan. Mr Thorley holds 

a Bachelor of Science (Hons) degree in Chemistry and 

Physiology as well as a Diploma in Management Studies 

from the University of London. 

Ng Chee Keong 8 


Mr Ng Chee Keong is currently a member of the Board of 

Governors of SAFRA, a non-executive Director of STX Pan 

Ocean and Deputy Chairman of the Keppel Club. Formerly 

the President & CEO of PSA Corporation Limited, he has 

held numerous management positions during his 33 years 

with PSA. He also sits on the Board of Sea Consortium Pte 

Ltd and the Centre for Maritime Studies, National University 

of Singapore. Mr Ng continues to act as Technical Advisor 

and Director on a part-time, non-executive basis to PSA 

Corporation. Mr Ng has also held various other key positions, 

such as Chairman of PSA Marine from 1998 to 2004 and 

Managing Director of CWT Distribution Ltd from 1988 

to 1992. In recognition of his public service, Mr Ng was 

awarded the Public Administration Medal (Silver) in 1992 

and the Public Administration Medal (Gold) in 1997. He 

graduated from the then University of Singapore with an 

Economics (Upper Honours) degree.

14 



> group structure 

FRONTLINE TECHNOLOGIES CORPORATION LIMITED 

SINGAPORE 

Frontline Technologies Pte Ltd 

100.00% equity 

Frontline Solutions Pte Ltd 


Frontline Outsourcing (Asia) Ltd 


Frontline Innovations Pte Ltd 


iAspire.Net Pte Ltd 

17.10% equity 

Ecquaria Ltd 

30.00% equity 

MALAYSIA 

Frontline Technologies Corp 

(M) Sdn Bhd 


Frontline Technologies (M) Sdn Bhd 


Bizfront Sdn Bhd 


Frontline Outsourcing (Asia) 

Sdn Bhd 


CHINA 

MDCL-Frontline (China) Limited 

47.47% equity 

Modern Devices (China) Ltd 


INDIA 

Accel Frontline Limited 

51.00% equity ο ACL Systems & Technologies Pte Ltd 

99.99% equity 

Accel Infotech ME 


THE PHILIPPINES 

Frontline Technologies, 

Philippines 


Sun Microsystems Philippines Ltd 

51.00% equity 

THAILAND 

G-Able Co., Ltd 

20.50% equity 

ο 

Since FY2006, Frontline has increased its stake in Accel Frontline from 51% to 54% as at 9 May 2006.



> corporate information 

Board of Directors 

Steve Ting Tuan Toon 

Group Founder and Executive Chairman 

Lim Chin Hu 

Group President & CEO 

Shirley Wong 

Co-Founder, Vice President, 

Director & Managing Director, Frontline Solutions Pte Ltd 

Tay Swee Sze 


Harrison Wang Hong She 


Robert Yap 


Paul Andrew Thorley 


Ng Chee Keong 


Company Secretary 

Tan Bak Leng 

Registered Office 

750 Chai Chee Road 

#02-01/03, The Oasis Technopark@Chai Chee 

Singapore 469000 

Telephone 

+65 6773 7227 

Facsimile 

+65 6779 4455 

Corporate Website 

www.frontline.com.sg 

Compensation Committee 


Chairman 

Tay Swee Sze 


Nomination Committee 


Chairman 

Tay Swee Sze 

Robert Yap Min Choy 

Auditors 

Baker Tilly TFWLCL 

15 Beach Road 

#03-10 Beach Centre 


Audit Partner-In-Charge 

Foong Daw Ching 

(Managing Partner) 

Share Registrar 

Tricor Barbinder Share Registration Services, 

Tricor Singapore Pte Ltd 

8 Cross Street #11-00 

PWC Building 


Principal Bankers 

DBS Bank Ltd 

Oversea-Chinese Banking Corporation Limited 

Citibank, N.A. 

Audit Committee 

Tay Swee Sze 

Chairman 


Robert Yap Min Choy

16 



> highlights of the year 

APRIL 2005 

• Frontline was awarded a multi-million, 

multi-year outsourcing contract by 

Malaysia National Insurance Berhad 

to provide application management 

services. 

• Fuji Xerox awarded Accel Frontline, 

India, a multi-year contract to provide 

Technology Outsourcing Services for 

its line of fax machines, personal laser 

printers and Small Office Home Office 

(SOHO) products. 

AUGUST 2005 

• Accel Frontline tops the “Three Star” 

category in DQ-IDC Best Employers 

Survey 2005. 

SEPTEMBER 2005 

• Accel Frontline ranks No.4 in the DQCI 

Silver Club (2005) list of Top Solution 

Providers in India. 

• Mr Chan Yeng Kit, Chief Executive Officer 

of the Infocomm Development Authority 

(IDA) of Singapore, visited Frontline to 

discuss future possible collaborations. 

OCTOBER 2005 

• The Group increased its stake in IT Holdings, 

Inc. in the Philippines from 49% to 100%. IT 

Holdings, Inc. owns 51% of Sun Microsystems 

Philippines Inc., and it has been renamed to 

Frontline Technologies Philippines. 

NOVEMBER 2005 

• Singapore Reinsurance awarded an outsourcing 

contract to Frontline to administer and develop 

its IT infrastructure and applications as well as 

to provide helpdesk support. The outsourcing 

deal is part of an overall strategic alliance 

between the two companies to jointly develop, 

market and deploy web-based IT systems for 

the insurance industry. 

• The Group announced an increase of 20.0% 

to S$2.5 million in its net profit for the first 

six months of FY2006, propelled mainly by 

an increasingly stronger contribution from IT 

services and robust growth in China and India. 

• Launch of Mocha Business Service Management 

(Mocha BSM) V4.0 and Mocha Mobile OA WAP 

V3.0 by MDCL-Frontline, China. Mocha BSM 

is one of MDCL-Frontline’s suite of Mocha 

software that provides solutions for business 

process management, IT service management 

and wireless and mobile applications.



DECEMBER 2005 

• MDCL-Frontline secured S$21 million 

worth of new contracts from leading 

and global corporations in the 

telecommunications and banking 

sectors in China. They include Kodak 

(China) Limited, five subsidiaries 

of China Mobile Communications 

Corporation, Nokia and one of the top 

three banks in China. 

• Frontline was awarded a three-year 

contract by the Singapore government 

to build, deploy and manage desktop 

firewall solutions for the public sector. 

This is the Centrally Administered 

Desktop Firewall project (CAFE) project, 

one of the latest IT security initiatives by 

the Infocomm Development Authority 

of Singapore (IDA), aimed at enhancing 

cyber security in the public sector 

through a desktop firewall solution, 

targeted at all agencies in the public 

sector. 

• Sun Microsystems Philippines won an IT 

infrastructure services contract awarded 

by Philippine Long Distance Telephone 

Company (PLDT) worth over S$1 million. 

JANUARY 2006 

FEBRUARY 2006 

• Frontline completes option to increase 

stake in Accel Frontline from 42% to 51%. 

• Accel Frontline won a multi-million 

contract to implement Accel Frontline’s 

flagship school information system, Accel 

Prodigy, across 35 schools in UAE. 

• Frontline acquired 100% interest in PSA’s 

fully-owned subsidiary, Dalian BHR 

Consultancy Services Co Ltd. Re-named 

BHR-Frontline Technologies (Dalian) 

Company Limited, Frontline will assist to 

fulfill PSA Corporation’s IT development 

needs via a five-year Information Technology 

Outsourcing Services Contract worth about 

S$20 million. 

• Launch of Mocha Focus by MDCL- 

Frontline for the monitoring and 

management of enterprises’ IT resources, 

helping to reduce the cost of maintenance 

and improve work efficiency. 

MARCH 2006 

• Accel Frontline inks IT infrastructure deal 

with IBM Global Services valued over S$1 

million. 

• Launch of Mocha Remote Agent 

Management (RAM) V3.0 by MDCL- 

Frontline for infrastructure services.

18 



NO LIMITATIONS 

INCREASED SPEED INCREASED SECURITY 

We believe that there are no limitations to what we can achieve. 

We continue to deliver: 

IT infrastructure to 

optimise performance. 

Technologies that drive 

large-scale Public Key Infrastructures. 

Disaster recovery systems 

that enable business recovery. 

Application systems that fuel the 

lifeblood of any enterprise. 

Seamless systems that provide the most 

efficient integration. 

High standard of service level agreement 

to maximise IT resource up-time.



> corporate review 

ADDED INNOVATION 

Singapore 

Our Singapore operations contributed 47.1% of Frontline’s 

total consolidated revenue, registering $79.7 million in 

FY2006 compared to $68.7 million in FY2005. Demand for 

our IT Professional Services and IT Outsourcing capabilities 

grew, with more customers leveraging on our expertise to 

help them implement their IT systems. 

Large Contract Wins in IT Outsourcing 

Frontline’s proven IT outsourcing strengths scored a 

significant win with the award of a $20 million contract 

by PSA Corporation (“PSA”). With this contract, Frontline 

is commissioned to fulfill PSA’s IT development needs, 

including applications development, maintenance and 

support, project management and IT support. This fiveyear 

agreement will see Frontline participating in PSA’s 

strategic IT initiatives in areas of IT governance, service 

enhancements and end-to-end IT service expertise. 

During the year, we were also awarded another multimillion-dollar 

Outsourcing contract by Singapore 

Reinsurance Corporation Limited (“SingRe”). Under this 

outsourcing contract, Frontline will support SingRe’s 

business functions by managing its IT infrastructure and 

applications as well as providing service desk support 

to SingRe’s customers. In addition, Frontline will also 

support SingRe’s agent and broker application systems in 

Singapore, Malaysia and Thailand. The outsourcing deal 

is part of an overall strategic alliance between the two 

companies to jointly develop, market and deploy webbased 

IT systems for the insurance industry. 

Enhancing Cyber Security for the Public Sector 

In partnership with the Infocomm Development Authority 

of Singapore (“IDA”), Frontline began work on building, 

deploying and managing desktop firewall solutions for the 

public sector in Singapore to enhance cyber security. The 

$6 million CAFE (Centrally Administered Desktop Firewall) 

project will increase the security of government infocommunications 

and technology resources through the 

enforcement of consistent security functions and policy 

within desktop computers. 

CAFE ensures all desktop computers within the 

government domain that are directly or remotely 

connected to obtain the appropriate firewall policies that 

will provide the computers with end-point protection. 

CAFE is centrally managed and it features an extensible 

and scalable architecture that allows government agencies 

to embrace future growth and expansion. The initial 

stage of CAFE will see at least 25,000 desktop computers 

installed with the enhanced security features and antispyware 

functions. 

“...Frontline’s established presence gives us the confidence that we have a stable and 

long-term partner who will grow together with us in meeting the needs of our customers.” 

- Mr Hwang Soo Jin, Group Chairman, Singapore Reinsurance Corporation Ltd.

20 



NO BARRIERS 

EFFICIENT. FLEXIBLE. POWERFUL. 

To advance, improve and expand, there can be 

no barriers to impede growth. Our business 

strategy allows no room for mediocrity.



Smart Card, Smart Approach 

During the year, Frontline was also engaged to implement 

a full life-cycle smart card management system for 

a government agency through the integration and 

deployment of various key technologies. This enabled 

the agency to adopt a secure and flexible infrastructure 

platform within their sensitive environment. The system 

will provide the government agency with the ability to 

render physical and application access control through the 

use of smart cards that are centrally managed. 

Turning the Concept of ‘e-Government’ into Reality 

Our associate company, Ecquaria Technologies 

Pte Ltd (“Ecquaria”) has inked several deals during 

the year, cementing its reputation as a world-class 

provider of e-Government Solutions on the Services 

Oriented Architecture (SOa TM ) paradigm. One of the 

contracts include a $5 million deal with the Ministry 

of Communications in Brunei to design and deploy a 

centralised e-Government platform on Ecquaria’s SOa TM . 

Other projects completed during the year include the 

development of an e-Government blueprint and roadmap 

for a foreign government in the Middle East, as well as the 

launch of a Web Services Gateway for the Accounting and 

Corporate Regulatory Authority of Singapore (“ACRA”). 

Growing Business in the Medical Sector 

Making inroads into the healthcare industry, Frontline 

was appointed as Alexandra Hospital’s (“AH”) systems 

integration partner for its IT-driven healthcare system, 

Healthcare.NET. A strategic collaboration between AH, 

IDA and Microsoft Singapore, Healthcare.NET will enable 

healthcare workers and solution providers to access 

a patient-centric, seamless and secured healthcare 

information system for better quality of clinical care and 

improved service excellence. The building of a digital 

dashboard for the hospital’s Department of Emergency 

Medicine system was completed during the year. 

Ecquaria has also entered the healthcare scene, 

successfully launching in January 2006 a Service-Oriented 

Healthcare Information Management System for the Health 

Promotion Board (“HPB”) to facilitate seamless, islandwide 

connectivity involving 960,000 electronic medical 

and dental records between all schools, kindergartens 

and childcare centres, government entities, hospitals and 

polyclinics. Ecquaria has also successfully entered the life 

sciences domain by securing a major deal with the Centre 

for Molecular Epidemiology at the National University of 

Singapore, to support the Singapore Consortium of Cohort 

Studies in their disease research. 

Smart Card, Smart Approach 

A government agency required a system that would provide physical and application 

access control through the use of smart cards that had to be centrally managed. Frontline 

implemented a full life-cycle management system through the deployment of various key 

technologies that enabled the agency to adopt a secure and flexible platform within their 

sensitive environment.

22 



NO END IN SIGHT 

Growth is: 

Continual 

Progressive 

Imperative 

The most progressive companies have one foot in 

the present and the other in the future. Frontline 

is such a company. 

We consider ourselves EXTRA-ORDINARY 

– and work to live up to our belief.



Easy does it for iASPire.net 

With the strength of its reputation for making IT simple 

for enterprises, our associate company, iASPire.net Pte Ltd 

(“iASPire”), has landed a number of new accounts in the 

year for its diverse offerings that range from enterpriseclass 

infrastructure to managed service subscriptions. 

Enterprises like FCI Asia, Rodyk & Davidson Advocates & 

Solicitors, Golden Concord, P4 Engineering and Bumi are 

some new clients enjoying the benefits of iASPire’s range 

of hosted services, Internet Protocol (IP) and Voice over IP 

(VoIP) communications solutions. During the year, iAspire 

also successfully introduced its modular, scalable iAccess 

Hospitality Solution to a number of customers in the 

hotel industry, including the Crown Hotel chain and the 

Somerset group of service apartments in Singapore. 

New 3D Animation Service Offerings 

During the year, Frontline formed a new business unit to 

provide IT services in remote 3D Animation Rendering and 

Digital Asset Management through the acquisition of the 

Managed Computing Competency Centre (“MC 3 ”). MC 3 

was originally established by Sun Microsystems, Nanyang 

Technological University (Singapore) and IDA to provide 

pilot projects for engineering and digital media utility-based 

services. MC 3 ’s prototype for 3D Animation Rendering 

Service was launched at Frames 2000 (India). 

The incorporation of MC 3 into Frontline will enable the 

3D rendering service to be developed at MC 3 ’s incubation 

facility for commercial deployment, enabling us to better 

serve and add value to our local and regional customers in 

the media, communication and entertainment industries. 

The new business unit will be working closely with IDA 

and Sun Microsystems to further enhance our services 

offering beyond pilot projects to a full-scale production 

environment. 

Moving Ahead 

Going forward, we will continue to pursue Intellectual 

Property development in our core competencies through 

an on-going effort to better our delivery methodologies 

and practices. Amongst our plans is the streamlining of 

Frontline’s ITIL Framework to allow us to better understand, 

design, implement and manage our clients’ IT infrastructure 

needs, aligning them to their business objectives. Other 

Intellectual Property development efforts include the 

enhancement of our IDEA (Inquire, Develop, Execute, 

Appraise) methodology for accessing and defining an 

enterprise customer IT security requirements from a multidimensional 

perspective that includes services, processes 

and infrastructure. Our RAPID (Redefining Advanced 

Processes in Redevelopment) Framework is a suite of 

building blocks for enterprise applications that can be 

reused from project to project for different clients. Frontline’s 

SOa TM , owned by our associate company Ecquaria, is a 

business process platform that delivers a secure, scalable 

and reliable process-driven infrastructure for all enterprise 

applications.

24 



China 

In January 2005, the Group further increased our stakeholding 

in our joint-venture associate company, MDCL- 

Frontline from 43.5% to 47.5%, giving us even greater 

operational involvement in the company. Our staff strength 

in China has grown to a team of close to 700 employees, 

with more than half being directly involved in software 

development within our Research & Development centre 

in Tianjin. Our R&D investment over the past three years 

has paid off with the completion and launch of the Mocha 

software products in FY2006. Mocha is suite of business 

improvement process software targeted specifically at the 

telecommunications and financial sectors. Our Mocha 

product offerings include Mocha BPM (Business Process 

Management), Mocha BSM (Mocha Business Service 

Management) and Mocha Mobile Office Automation. 

Winning Contracts with Large Corporations 

MDCL-Frontline continued to surge ahead during the 

year, securing contracts with leading global corporations 

such as Kodak (China) Limited (“Kodak”), where we 

were awarded a three-year IT outsourcing contract 

encompassing IT systems procurement, deployment and 

maintenance of the IT systems. The latter provides linkage 

of Kodak medical systems across China to hospitals that 

are part of Kodak’s clientele. Tapping into MDCL-Frontline’s 

expertise in streamlining back-office processes, Kodak 

has significantly decreased its delivery period, increased 

customer satisfaction and achieved cost savings, hence 

increasing its competitiveness in today’s dynamic business 

environment – all within a few months. 

In another multi-million-dollar deal with China’s largest 

telecommunications operator, MDCL-Frontline will 

provide infrastructure management and services for China 

Mobile’s Business Operation Support System (BOSS) in 

five regions. This system will enable efficient and seamless 

data management, comprehensive reporting and decision 

support across all five China Mobile subsidiaries in the 

provinces. 

Demonstrating our strong foothold in the banking and 

finance sector, we were also awarded a multi-million-dollar 

deal to provide infrastructure solutions, system integration 

and support services for one of China’s largest commercial 

banks: 

Integrated Systems for Improved Communication (case study – MOCHA IEP) 

CNC Beijing is the operator of the city’s public telecommunication network and the key office for China’s 

international communication. The client’s business processes were functioning on two different platforms 

operating independently, causing numerous frustrations for the end-user who had to deal with separate 

systems and the constant re-keying of information. Using the MOCHA Information Exchange Platform 

(MOCHA IEP) technology, MDCL-Frontline enabled a seamless integration between the two platforms, 

allowing greater convenience and improved efficiency. 

“Now we can deal with an integrated business process, with the two systems working 

together automatically to ensure data consistency.” 

- Zhang Lian, Information Industry Division, CNC Beijing



Testimony to our strong technical competence and service 

dedication, MDCL-Frontline beat intense competition 

to clinch a five-year infrastructure management 

solutions contract with Nokia, the world leader in mobile 

communications. 

Mocha – Frontline’s Very Own Suite of Software 

MDCL-Frontline’s Mocha BPM, BSM and Mobile OA suite 

of software, which provides solutions for business process 

management, IT service management, enterprise portal 

and office automation, wireless and mobile applications, 

also continued to witness a growing demand by 

corporations within the telecommunications and financial 

services industries. 

India 

Accel Frontline has been achieving steady growth in the 

Indian IT market and currently employs over 1,800 skilled 

IT professionals. We have recently increased our stake in 

Accel Frontline from 51.0% to 54.5%, and there are plans 

to invest and increase our existing skilled human capital 

intellectual resources in the near future, as this is a critical 

success factor in the Software and Outsourcing industries. 

Our increased stake in Accel Frontline greatly strengthens 

our capability to tap the vast growth opportunities that we 

foresee in India. 

Forging Ahead in the Banking, Telecommunications and 

Education Sectors 

In FY2006, we continued to make headway in the market 

with the successful development of several core products 

for customers in the healthcare, education and banking 

industries. New contracts with major players in the 

telecommunications and banking sectors were won. 

We have also successfully secured a large contract to 

implement Accel Frontline’s flagship school information 

system, Accel Prodigy (“Prodigy”), across 35 schools in 

Dubai. Prodigy enables the automation of the entire frontand 

back-end office functions of the schools, creating a 

streamlined, collaborative environment for easy information 

exchange between all parties of the schools. Once 

successfully implemented, Prodigy will be scaled up many 

fold to encompass the entire school network in Dubai. 

In testimony to our strong reputation for our IT capabilities 

and expertise, we also won a prestigious multi-year IT 

service and management contract that spans the entire state 

of Maharashtra, awarded by the Public Works Department of 

Mumbai. 

In the banking and financial services realm, Accel Frontline 

secured a hardware infrastructure contract with the State 

Bank of India, and for the sixth consecutive year, it won a 

hardware infrastructure contract with the Life Insurance 

Corporation of India. In addition, Trivandrum awarded an IT 

infrastructure contract to Accel Frontline for the provision 

of its core banking solution that will be executed over 100 

locations in Kerala, India. 

Moving ahead, we strive to increase our domestic and 

offshore businesses, particularly in the software and 

outsourcing arena. 

Accel Frontline has also attained several industry 

certification and accolades, including the prestigious CMMi 

Level 5 certification for quality software development. 

In FY2006, Accel Frontline also topped the “Three Star” 

category in the DQ-IDC Best Employer Survey and is ranked 

No. 4 in the DQCI Sliver Club’s (2005) list of Top Solution 

Providers in India.

26 



Thailand & Philippines 

In FY2006, Frontline’s associate company in Thailand, 

G-Able, was awarded a contract by Kasetsart University 

to plan and design the University’s first disaster recovery 

solution, to enhance the stability and reliability of 

the system to render IT services within the university. 

In addition, an IT infrastructure and applications 

maintenance systems contract was secured from 

Total Access Communication Public Company Limited 

(DTAC), strengthening G-Able’s presence in the 

telecommunications industry. G-Able also continues to 

grow in strength in the banking and retail sectors, and 

going forward, we aim to grow our solutions focus in the 

areas of IT security and IT outsourcing. 

Deployed in over 110 bank branches across the country, the 

Sun open-systems solution provides flexibility and ease, thus 

increasing productivity and service within the bank. 

SunPhil has also clinched a project from the Department of 

Interior and Local Government (“DILG”) for the development 

of a Local Government Unit Information Portal. Working with 

a local partner, SunPhil helped create a single e-government 

services gateway to DILG and the Local Government Units. 

SunPhil continues to strengthen its presence in the banking, 

telecommunications and government sectors. 

Showcasing consistent growth over six quarters, Sun 

Philippines (“SunPhil”) grew to capture 56% of the UNIX 

market share, making us the No. 1 player in UNIX solutions 

and boosting our growth in the commercial sector and in 

channel distribution. In the banking industry, a contract 

was won with a leading bank to install a Sun open-systems 

platform to improve service deployment and lower costs. 

“GEMS Education is the largest provider of Private Education in the world...We recognise 

that a good ERP system is a key enabler to help us manage our business, at a school level, 

at a regional level and at a global level. We went through a stringent year-long evaluation 

process to identify the best ERP solution for us today. Accel’s ‘Prodigy’ not only meets our 

immediate needs, but our strategic partnership will ensure that our schools business stays 

at the forefront of information management within the education industry.” 

- Mr Sunny Varkey, Chairman, GEMS Education and the Varkey Group



Human Resources 

Growing our Human Capital 

Our pool of over 3,900 IT professionals are situated across 

countries in Singapore, Malaysia, Philippines, Thailand, 

China, Taiwan, Hong Kong and India, enabling us to 

provide our clients with a range of IT services to cater to 

their diverse growing business needs. 

Frontline’s unique blend of application software and 

hardware knowledge is achieved through our committed 

dedication to staff training, which sees some 2% of 

our payroll budget set aside for staff training in new 

technologies needed in the ever-changing technology 

market place. Our technological advances are also 

combined with soft skills learning and practices in sales 

and customer relations management, business processes 

and project management, all to ensure a smooth and 

professional service delivery. 

Frontline was also the proud recipient of a Bronze Singapore 

Health Award from the Health Promotion Board. Our efforts 

in building a healthy workforce were recognised through a 

variety of active healthy lifestyle promotions implemented, 

inclusive of regular weekly breakfast spreads of wholesome 

food, and a subsidy to encourage employees and their 

families to exercise and join a popular local gymnasium. 

Our overseas subsidiaries and associate companies also 

actively contribute manpower and resources to help in 

various charity organisations and community work. 

Community Spirit & Healthy Lifestyle 

Frontline acknowledges the importance of being a good 

corporate citizen in the community we live in. As part 

of this community contribution, Frontline Singapore 

employees gathered together at the Geylang Old Folks 

Home to provide weekend cheer to the residents in the 

home. We participated in morning exercises, karaoke 

singing, shared a delicious lunch spread and distributed 

much cheer in the form of gifts of food and money 

wrapped in attractive red envelopes. Many Frontline 

volunteers left with fond communal memories of an 

enjoyable day.

28 



> corporate governance report 

Board Of Directors (“Board”) 1 

Mr Steve Ting Tuan Toon 

Executive Chairman 

Mr Lim Chin Hu 


Ms Shirley Wong Swee Ping 

Executive Director 

Mr Tay Swee Sze 


Dr Harrison Wang Hong She 


Mr Robert Yap Min Choy 


Mr Ng Chee Keong 


Mr Paul Andrew Thorley 


Audit Committee (“AC”) 


Chairman 


Member 


Member 

Compensation Committee (“CC”) 


Chairman 


Member 

Mr Steve Ting Tuan Toon 2 

Member 

Nomination Committee (“NC”) 

Dr Harrison Wang Hong She 3 

Chairman 


Member 

Tay Swee Sze 

Member 

This report describes Frontline Technologies Corporation Limited’s (“Company” or “Frontline”) corporate governance 

practices in place during financial year ended 31 March 2006 (“FY06”). The principles referenced below are to the principles 

set forth in the Code of Corporate Governance issued by the Corporate Governance Committee on 21 March 2001 (“Code”). 

The Board and Frontline management embrace these principles as fundamental to discharging responsibilities to achieve the 

high standards of corporate governance to protect, promote and enhance shareholder value and financial performance of 

the Frontline Group of companies (“Group”). 

1 

Composition of Board and Committees as set forth above is correct as at 31 March 2006. The individual profiles of all current Frontline directors are 

disclosed on page 11-13 of this Annual Report. 

2 

Mr Ng Chee Keong has since succeeded Mr Steve Ting as a member of the Compensation Committee by on 22 May 2006. 

3 

Mr Robert Yap Min Choy has since succeeded Dr Harrison Wang Hong She as Chairman on 22 May 2006. Dr Wang remains a member of the 

Nomination Committee.



> corporate governance report (cont’d) 

1. Principle I: The Board’s Conduct Of Its Affairs 

Frontline has an effective Board to lead and control the Company. The Board’s primary mission is to protect and 

enhance the long-term shareholders’ value. 

Apart from the Board’s statutory responsibilities, the principal functions of the Board, are: 

a) to review and approve Group corporate policies and authorization matrix; 

b) to review and approve annual budgets, key operational issues, major investment funding and major restructuring 

of core businesses; 

c) to set overall strategies and supervision of the Group’s business and affairs; 

d) to review the financial performance of the Group; 

e) to approve the nominations of Board directors and appointments to the various Board committees; 

f) to assume responsibility for corporate governance; and 

g) to set goals for Frontline’s management and monitor the achievement of such goals. 

Certain functions have been delegated by the Board to various committees, being the AC, NC and CC referenced 

above, for the effective execution of its responsibilities. These committees operate under clearly defined terms of 

reference. The chairman of each committee report to the Board the outcome of the committee meetings and make 

recommendations based on their deliberations. As and when required, the Board also establishes ad-hoc subcommittees 

to review and report on specific matters with greater depth and focus. 

The Board meets at least three (3) times each financial year, supplemented by additional meetings as and when 

warranted by circumstances. During FY06, four (4) Board meetings were convened. The following is a report on the 

attendance of the directors at meetings of the Board and committees during FY06: 

Name of Director Board AC CC NC 

Steve Ting Tuan Toon 4 5 3 3 

Lim Chin Hu 4 4 - - 

Shirley Wong Swee Ping 4 - - - 

Tay Swee Sze 4 5 3 4 

Harrison Wang Hong She 4 5 3 4 

Robert Yap Min Choy 4 5 - 4 

Paul Andrew Thorley 3 - - - 

Ng Chee Keong 3 - - - 

The Board members are provided with regular management reports and information that highlight the Group’s 

performance and business conditions including updates on changes in the relevant laws and regulations. From time to 

time Frontline sponsors courses and seminars for Board members to assist them to keep up to date with developments 

in corporate governance and other relevant matters.

30 




2. Principle II: Board Composition and Balance 

The Board comprises three (3) executive directors and five (5) non-executive directors. Four (4) of the non-executive 

directors are regarded as independent. The objective judgment of the independent and non-executive directors on 

corporate affairs and their collective experience and contributions are invaluable to the Company. 

The NC reviews the independence of each director, Board structure, size and composition annually. The NC considers 

the current Board size and composition to be adequate and appropriate in view of the nature and scope of the Group’s 

operations, and as capable of effective decision-making. The strong and independent element of the Board ensures 

that it is able to exercise objective and independent judgment on corporate affairs and that the Board’s decision 

making process is not dominated by any individual or small group of individuals. NC also takes the view that the 

diverse experience and expertise of the directors of the Board provides the necessary core competencies for meeting 

Frontline’s performance targets. 

3. Principle III: Chairman and Chief Executive Officer 

Mr Steve Ting Tuan Toon and Mr Lim Chin Hu are the Chairman and Chief Executive Officer (“CEO”) of the Group 

respectively. The role of the Chairman and the CEO are separate to ensure an appropriate balance of power, increased 

accountability and greater capacity of the Board for independent decision-making. The Chairman and CEO are not 

related to each other. 

The Chairman is the founder of the Group and continues to play a pivotal and significant role in developing the 

Group’s businesses. The Chairman sets the meeting agenda of the Board in consultation with the CEO and exercises 

control over the quality and timeliness of the flow of information between management and the Board. 

The CEO has executive responsibility for the Group’s business, and oversees the daily operations of the Group’s 

operations and is responsible to execute strategies and policies adopted by the Board. 

4. Principles IV and V: Board Membership and Board Performance 

The NC comprises of three (3) independent directors. During FY06, four (4) NC meetings were convened. The NC 

performs the following functions for the Company: 

a) Identifies, reviews and recommends candidates for appointment as directors and appointment to the Audit and 

Compensation Committees. 

b) Re-nominates directors and determine annually the independence of directors. 

c) Assesses the effectiveness of the Board as a whole. 

d) Recommends directors who are retiring by rotation to be put forward for re-election. 

All directors are required to submit themselves for re-election at regular intervals in accordance with Frontline’s articles 

of association. Nominees for directorship and directors seeking re-election are required to submit themselves to 

review by NC who will thereafter consider their suitability in line with the requirements of the Company. 

The NC also evaluates the performance of the Board as a whole as well as each director’s contribution to the 

effectiveness of the Board. This assessment process takes into consideration, inter alia, frequency of meetings, 

directors’ independence, quality of decision making and quality and timeliness of board papers. The NC also 

considers other performance criteria as set out in the Code, including the performance of the share price of the 

Company. Individual directors were evaluated based on their attendance record at meetings, functional expertise and 

contributions.




5. Principle VI: Access to Information 

Frontline management provides directors with regular management reports so that the Board is able to fulfill its 

responsibilities. Relevant information on material events are circulated to the directors as and when they arise. 

The agenda for each Board meeting is prepared in consultation with the Chairman and is circulated in advance to 

directors. The Board has separate and independent access to the company secretary and to Frontline management 

at all times in performing their duties. Should any of the directors, whether as a group or individually, require 

independent professional advice, the Company will bear the expenses incurred if such advice is required to enable the 

directors to discharge their duties professionally. 

6. Principle VII: Procedure for Developing Remuneration Policies 

Principle VIII: Level and mix of Remuneration 

Principle IX: Disclosure of Remuneration 

The CC comprised two (2) independent directors and one (1) executive director. 4 During FY06 the CC met three (3) 

times. The CC reviews and recommends to the Board for approval the remuneration packages of directors. The CC’s 

review encompasses all aspects of remuneration including but not limited to directors’ fees, salaries, allowances, 

bonus, share options and benefits-in-kind. The remuneration package of each executive director is based on both the 

performance of the Group and the individual. 

Frontline has a formal and transparent process for fixing the directors’ fees for individual directors, which are subject 

to shareholders’ approval at Frontline’s Annual General Meeting (“AGM”). No director is involved in deciding his own 

remuneration. It is the Group’s policy to set a level of remuneration that is appropriate to attract, retain and motivate 

the directors. The remuneration of executive directors includes a fixed as well as a variable component. 

Remuneration of key executives (other than directors) are determined by the CEO based on individual performance 

and the value added to the Group. The Group’s remuneration policies have always been to maintain a reasonable fixed 

salary and an emphasis on performance bonus.

32 




6. Principle VII: Procedure for Developing Remuneration Policies (cont’d) 

Principle VIII: Level and mix of Remuneration (cont’d) 

Principle IX: Disclosure of Remuneration (cont’d) 

Remuneration Bands 

Remuneration Band and 

Name of Director Base Salary (%) Bonuses (%) Fees (%) 

$500,000 and above 

NIL Not Applicable Not Applicable Not Applicable 

$250,000 to below $500,000 

Steve Ting Tuan Toon 80.24% 19.76% - 

Lim Chin Hu 76.50% 23.50% - 

Below $250,000 

Shirley Wong Swee Ping 78.49% 21.51% - 

Tay Swee Sze - - 100 5 

Harrison Wang Hong She - - 100 5 

Robert Yap Min Choy - - 100 5 

Paul Andrew Thorley - - 100 5 

Ng Chee Keong - - 100 5 

The Board and the CC and are of the view that the remuneration of Frontline directors are adequate but not excessive 

in order to attract, retain and motivate them to operate the Company successfully. 

The range of gross remuneration received by the top five executives of the Company is as follows: 

Remuneration Bands Executives 

More than $250,000 Nil 

Less than $250,000 5 

4 

The Company has since decided to compose the CC of three (3) independent directors. 

5 

Subject to shareholders’ approval at this annual general meeting.







Key Management Staff 

The background of the key management staff is as follows: 


Founder, Executive Chairman and Director 

Mr Steve Ting Tuan Toon is a veteran in the technology industry with more than 20 years of experience. He has held 

several management positions in Hewlett Packard Singapore and Mentor Graphics Corporation. He started his first 

company, Mentor Graphics Associates Pte Ltd, in 1993 and subsequently Frontline Technologies Pte Ltd in 1994. 

Mr Ting served in various committees in tertiary institutions in Singapore and is also active in providing guidance in 

entrepreneurship via lectures and seminars. In recognition of his entrepreneurial achievements, Mr Ting was conferred 

the honorary title of Doctor of Philosophy in Business Administration from the Wisconsin International University, 

USA in 2002. He was also named Ernst and Young’s Entrepreneur of the Year (Business Services & Technology) in 2002. 

He was appointed a council member on The Enterprise Challenge (TEC) panel by the Prime Minister Office for Public 

Service 21 (PS 21) in 2005. Mr Ting holds a Bachelor of Engineering degree from the National University of Singapore, 

a post-graduate degree from the Institute of Marketing in the United Kingdom and a graduate diploma in Marketing 

Management from the Singapore Institute of Management. 

Lim Chin Hu 

President, Chief Executive Officer and Director 

As the Group President and Chief Executive Officer, Mr Lim Chin Hu oversees the Frontline Group’s regionalisation 

and operations. He started his career at Hewlett Packard Singapore and held various management positions. Prior to 

joining Frontline in 2000, he was the Managing Director of Sun Microsystems (Singapore) and Sun Asia Pacific 

e-Business and Channels Director. 

Mr Lim serves in several infocomm industry committees, including being the secretary of the Singapore Infocomm 

Technology Federation (SiTF), Singapore’s Information Technology Standards Committee (iTSC) and the National 

Infocomm Competency Council (NICC). He also serves as a board member of the Infocomm Development Authority of 

Singapore (IDA) and sits on the audit committee of the IDA Board. Mr Lim holds a Diploma in Electrical and Electronics 

Engineering from Ngee Ann Polytechnic and a Bachelor of Computer Science degree from La Trobe University, 

Melbourne, Australia.

34 







Shirley Wong Swee Ping 

Co-Founder, Vice President, Director and 

Managing Director, Frontline Solutions Pte Ltd 

Ms Shirley Wong Swee Ping is currently the Managing Director of Frontline Solutions Pte Ltd and has more than 16 

years of experience in the IT industry. Before founding Frontline, Ms Wong was Sales Director at Mentor Graphics 

Associates Pte Ltd, Design Engineer at Chartered Electronics Industries Ltd, Regional Applications Manager at Cadnetix 

Pte Ltd (formerly known as Dazix Pte Ltd and subsequently Intergraph Pte Ltd) and Design Manager at Flextronics Pte 

Ltd. Ms Wong holds a diploma in Electrical and Electronics Engineering from City and Guilds in the United Kingdom. 

Ms Wong is also currently serving as the Chairman of the Security Chapter of the Singapore Infocomm Technology 

Federation (SiTF), and she is also a member of the National Trust Council. 

Angeline Wee Geok Lian 

Managing Director, Frontline Outsourcing (Asia) Pte Ltd 

Ms Angeline Wee has been with Frontline for the past year and a half and she brings with her over 20 years of IT 

industry experience. She was Vice President of the Capgemini Outsourcing Services for Southeast Asia, with overall 

responsibility for the management and the P&L of the Outsourcing Services group covering the areas of Applications 

Management, Infrastructure Management and Business Process Management. She has managed staff strengths of up 

to 250 people, with annual revenues of more than 18m Euros. 

Angie previously worked for Advanced Quality Solutions as Delivery Director before it was acquired by Capgemini. She 

was also the General Manager for IPACS Singapore and Hong Kong. Prior to that she was with Hewlett-Packard for 10 

years in the Applications Engineering Organisation, focusing on customer support, training and project management. 

She was also seconded to the Economic Development Board as a Local Industry Upgrading Programme Manager. 

Wong Wai Meng 

Managing Director, Frontline Technologies Pte Ltd 

Mr Wong Wai Meng is the Managing Director of Frontline Technologies Pte Ltd. Within the Frontline Group, he has 

been instrumental in developing its professional e-service arm that serves numerous corporations in the private and 

government sectors today. Prior to his current position, he was the Managing Director of iASPire, and also oversaw 

the company’s sales and marketing activities as well as its regionalisation strategies. Mr Wong has also been actively 

involved in the pioneering years of the ASP Alliance Chapter (AAC) under Singapore IT Federation (SITF) as Vice- 

Chairman of the Executive Committee and Founding Member. At the same time, he was also the Vice-Chairman of the 

Asia Pacific ASP/IDC Alliance Organization leading regionalization initiatives for local service providers.







Chiam Heng Huat 

Chief Financial Officer, Frontline Technologies Corporation Ltd 

Mr Chiam Heng Huat is the Chief Financial Officer of Frontline Technologies Corporation Ltd. He has some 17 years 

of financial management and public accounting experience in both large multinational corporations as well as 

public-listed organisations in Singapore. Prior to joining Frontline, he has had experience in various merger-andacquisition 

transactions as well as due diligence exercises, both on the buy-side and sell-side. To his credit, he has led 

in Pacific Internet’s acquisition of five (5) Internet Service Providers in Australia and the Asia-Pacific region. He was also 

instrumental in the financial and legal restructuring of these acquisitions. After his career stint with Pacific Internet, he 

joined the Internet Capital Group Asia and Commerce Exchange Pte Ltd holding similar positions. Mr Chiam holds a 

Bachelor of Commerce and Administration degree from the Victoria University of Wellington. 

Dr Foong Wai Keong 

President and Chief Executive Officer, Ecquaria Technologies Pte Ltd 

Dr Foong Wai Keong is a veteran in the infocomm industry with more than 20 years of experience. His main role 

lies in spearheading the vision and strategic planning of Ecquaria Technologies, a fast growing enterprise software 

infrastructure solutions company that develops and markets its internationally acclaimed and award-winning flagship 

software architecture, the Ecquaria Service-Oriented Architecture TM (Ecquaria SOa TM ). Dr Foong is instrumental in a 

number of key Singapore and pan-Asia government consultancy initiatives and project implementations, and in 2001, 

he won the “ASME Most Promising Netreprenuer of the Year” award. 

Prior to establishing Ecquaria Technologies, Dr Foong was overseeing the management and operations of the Java 

Competency Centre of Kent Ridge Digital Labs (KRDL), and in evangelising the adoption of Java in Singapore and the 

region. He holds an Honours Degree in Computer Science from the University of Western Australia, as well as a Ph.D in 

Computer Science from the University of Melbourne. 

Jonathan Sim 

Managing Director, iASPire.net Pte Ltd 

Mr Sim is the co-founder and Managing Director of iASPire, and he joined the Frontline Group in 1994. Prior to being 

appointed as Managing Director of iASPire, he has held various senior management positions within the Group, 

including being the Technical Director of Frontline Professional and Enterprise Group, as well as the Chief Technical 

Officer of iASPire. Mr Sim has led iASPire into new areas of growth beyond the hosted data centre business, and he has 

introduced new lines of service offerings, including hospitality IT services and IP Telecommunications. Mr Sim holds a 

First-Class Honours degree in Electrical and Electronics Engineering from the Nanyang Technological University.

36 







Godwin Yau 

Chairman, MDCL-Frontline (China) Ltd 

Mr Godwin Yau founded Modern Devices (China) Ltd (MDCL) in 1988. He has served as Chairman & CEO since 

the Company’s inception. A veteran in China’s IT industry, Mr Yau has held various IT positions with the Chinese 

government, including Academic Sinica, Ministry of Electronics, National Bureau of Computing Sciences and China 

Computer Technology Service Company. In 1984, Mr Yau was with China Electronics Corporation in Hong Kong (CEC- 

HK), where he was the Director of the Information Technology Department. Mr Yau is one of the pioneer graduates of 

the Computer Science Department of Tsinghua University in 1958. 

N.R Panicker 

Founder, Chairman and Managing Director, Accel Frontline Ltd 

Mr N.R. Panicker is a technocrat with over 28 years of experience in the IT industry and he is the founder of the Accel 

group of companies that is headquartered in Chennai, India. Prior to founding the Accel group of companies, he 

has held various positions in HCL Limited (now known as HCL Infosystems Limited) from 1977 to 1990. In 2005, Mr. 

Panicker was ranked among the Top 10 Key Influencers in the Indian IT industry by Dataquest, and he is an active 

participant in the Indus Entrepreneurs and Computer Society of India. Mr Panicker is also currently serving as a 

board member with Kerala Venture Capital Fund Private Limited. He holds a Bachelor’s degree in Electronics and 

Communications Engineering from the University of Kerala. 

Abd Rahman Mohd Yusuf 

Chief Executive Officer, Frontline Technologies Corporation (M) Sdn Bhd 

Mr Abd Rahman Mohd Yusuf is Chief Executive Officer of Frontline Technologies Corporation (M) Sdn Bhd, having held 

the appointment for several years. He has more than 20 years of experience in sales, marketing and management 

in the IT industry. Prior to joining Frontline in 2001, he held the positions of Managing Director and Director of 

Operations with Accurate Network & Systems Integration (ANSI). Encik Abd Rahman has also worked with IT 

companies such as Komputer Sistem Malaysia and Mesiniaga Sdn Bhd. He holds a Bachelor of Science degree in 

Business Administration from the University of Miami in the United States.







Cynthia Romero Mamon 

President and Managing Director, Sun Microsystems Philippines, Inc. 

Ms Cynthia Mamon has more than a decade of experience in the IT industry. Ms Mamon has worked in the fields of 

research, management information system and in planning and development, before joining Sun Philippines in 1992. 

Ms Mamon has attained several awards and accolades including the UP Alumni Association Outstanding Professional 

Awardee (Information Technology) in 2001 and in 2003, she was ranked one of ‘The Most Powerful Women in IT by the 

Media G8Way Corporation and Enterprise Magazine. 

Ms Mamon holds a degree in Home Technology (Food and Nutrition Research) and a Master’s Degree in Agribusiness 

Management from the University of the Philippines. She also holds a certificate in Information Systems from the 

George Washington University in Washington DC, USA. 

Trairatt Chaisamran 

Executive Director, G-Able Company Limited 

In his current capacity as the Executive Director of G-Able Company Limited, Mr Chaisamran is responsible in setting 

the direction, policy and business strategies of the G-Able Group of companies, comprising CDG Microsystems Limited, 

The Communication Solution Company Limited, First Logic Company Limited and G-Able Company Limited. With 

over 20 years of experience in the Information Technology field, Mr Chaisamran began his career with Control Data 

(Thailand) Ltd, the first company of the CDG Group. He later progressed to be the General Manager of Logic Co., Ltd, 

another company within the CDG Group, and was instrumental in restructuring three companies in the Group. 

Mr Chaisamran was subsequently promoted to be the Managing Director of G-Able Co., Ltd after the restructuring. 

Mr Chaisamran holds a Bachelor of Science degree in Electrical Engineering from the Mapua Institute of Technology 

and a Master’s Degree in Computer Science from Chulalongkorn University. 

7. Principle XI: Audit Committee 

Principle XII: Internal Controls 

Principle XIII: Internal Audit 

The AC comprises three (3) independent non-executive directors. During FY06, the AC met five (5) times. The 

Board is of the view that the members of the AC are appropriately qualified, having accounting or related financial 

management expertise or experience to discharge their responsibilities. Frontline has adopted the Code in relation to 

the roles and responsibilities of the audit committee. 

The AC assists the Board in discharging its responsibility to safeguard assets, maintain adequate accounting records 

and develop and maintain an effective system of internal controls. In particular, the responsibilities of the AC include: 

a) reviewing with the Group’s external auditors, their audit plan, evaluation of the internal accounting controls, audit 

report, and any matters which the external auditors wish to discuss; 

b) reviewing the Group’s financial reports to shareholders and the general public to ensure that they comply with 

the Companies Act, Listing Rules of SGX-ST, and other regulatory requirements;

38 




7. Principle XI: Audit Committee (cont’d) 

Principle XII: Internal Controls (cont’d) 

Principle XIII: Internal Audit (cont’d) 

c) reviewing with the internal auditors, the scope and results of internal audit procedures and their evaluation of the 

internal control system; 

d) evaluating the objectivity and independence of the external auditors annually and nominating external auditors 

for appointment or re-appointment. 

In performing its functions, the AC specifically empowered and authorised to investigate any matter within its terms of 

reference and has full access to and co-operation by management and full discretion to invite any director or executive 

officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly. 

The AC meets with the external auditors without the presence of the Frontline management at least once a year to 

ensure that there are no unresolved areas of concern. 

Save for the fees paid for tax services rendered, there are no other non-audit fees payable to Frontline’s external 

auditors . The AC has also reviewed all non-audit services provided by the external auditors and it is of the view that 

such services would not affect the independence of the external auditors. 

The AC has reviewed the Company’s risk assessment and based on the external auditor’s reports, is satisfied that 

there are adequate internal controls in the Company. The AC expects the risk assessment process to be a continuing 

process as it recognises the importance of sound internal control and risk management practices to good corporate 

governance. 

8. Principle X: Accountability and Audit 

Principle XIV: Communication with Shareholders 

Principle XV: Greater Shareholder Participation 

The Company and the Group works towards timeliness and transparency in its disclosures to the shareholders and 

the public. In addition to the regular dissemination of information through SGXNET and the Frontline website , the 

Company also responds to enquiries from investors, analysts, fund managers and the mass media. The Company does 

not practice selective disclosure as all price-sensitive information is released through SGXNet. 

All shareholders of the Company receive a copy of the annual report and notice of AGM. The notice of AGM is also 

advertised in the newspapers. At the AGM, shareholders are given the opportunity to air their views and ask directors 

questions regarding the Company. To facilitate voting by shareholders, the Company’s articles allow shareholders 

to vote by appointing one (1) or more proxies. The Board of directors, management, as well as the external auditors 

attend the Company’s AGM to address any questions that shareholders may have. 

6 

Messrs Ernst & Young, who were succeeded by Messrs Baker Tilly TFWLCL on 17 February 2006.




9. Dealing in Securities 

The Company has internal guidelines to provide guidance to key officers of the Company and its subsidiaries with 

regard to dealings in the Company’s securities in compliance with the Best Practices Guide on Dealings in Securities 

issued by the Singapore Exchange Securities Trading Limited. 

The Group’s directors and officers are not permitted to deal in the Group’s shares while in possession of price sensitive 

information and during the period commencing at least two (2) weeks before the announcement of the Group’s 

quarterly results; and one (1) month before the announcement of the Group’s half-yearly and full year results, and 

ending on the day of announcement of such results. 

10. Statement of Compliance 

The Board confirms that for FY06, the Company has complied with the principal corporate governance 

recommendations set out in the Best Practice Guide issued by SGX-ST. 

11. Material Contracts 

Except as disclosed in the Report of the Directors and the Financial Statements, the Company and its subsidiaries did 

not enter into any material contracts involving the interest of the directors or controlling shareholders in FY06. 

12. Interested Person Transactions 

The Company has in place proper policies and procedures for the identification, approval and monitoring of 

transactions with interested persons (“IPTs”). All interested person transactions are subject to review by the AC. 

Currently, the Company is not required to have a general mandate from its shareholders in relation to IPTs as the 

aggregate value of IPT transactions is below the threshold level as set out in the SGX-ST Listing Manual. Pursuant to 

rule 907 of the SGX-ST Listing Manual: 

Name of Aggregate value of all IPTs during the financial year Aggregate value of all IPTs 

interested under review (excluding transactions less than $100,000 conducted under the 

person and transactions conducted under the shareholders’ shareholders’ mandate 

mandate pursuant to Rule 920) pursuant to Rule 920 

(excluding transactions 

less than $100,000) 

Total NIL NIL 

7 

http://www.frontline.com.sg

40 



> financial contents 

41 directors’ report 45 statement by directors 46 auditors’ report 

47 consolidated income statement 48 consolidated balance sheets 

49 consolidated statement of changes in equity 50 consolidated cash flow statement 

53 notes to the financial statement 93 notice of annual general meeting 

96 explanatory notes to notice of annual general meeting (“notice”) 

110 appendix 1 - guidelines to shares purchase 113 statistics of shareholders 

115 proxy form



> directors’ report 

The directors are pleased to present their report to the members together with the audited consolidated financial statements 

of Frontline Technologies Corporation Ltd (the Company) and its subsidiaries (collectively, the Group) for the financial year 

ended 31 March 2006 and balance sheet of the Company as at 31 March 2006. 

1. Directors 

The directors of the Company in office at the date of this report are: 


Lim Chin Hu 

Shirley Wong Swee Ping 

Tay Swee Sze 



Paul Andrew Thorley 

Ng Chee Keong 

2. Arrangements to enable directors to acquire shares and debentures 

Except as disclosed under share options in this Directors’ Report and in the financial statements, neither at the end 

nor at any time during the financial year was the Company a party to any arrangement whose object is to enable the 

directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or 

any other body corporate. 

3. Directors’ interests in shares and debentures 

The interests of the directors who held office at the end of the financial year in the shares or debentures of the Company 

and related corporations, according to the register kept by the Company for the purposes of Section 164 of the 

Singapore Companies Act, Cap. 50, were as follows: 

Direct interest at 

Deemed interest at 

1 April 2005 1 April 2005 

or date of 31 March 21 April or date of 31 March 21 April 

appointment 2006 2006 appointment 2006 2006 

The Company 

Ordinary shares 

Steve Ting Tuan Toon 101,274,548 * 101,274,548 101,274,548 – – – 

Lim Chin Hu 39,025,000 * 39,025,000 39,025,000 – – – 

Shirley Wong Swee Ping 21,263,570 * 21,263,570 21,263,570 – – – 

Tay Swee Sze 1,282,000 – – – – – 

Ng Chee Keong – – – 400,000 400,000 400,000 

* include shares held by Director’s nominees

42 




3. Directors’ interests in shares and debentures (cont’d) 

Except as disclosed above, no other directors had interests in the shares or debentures of any company in the Group 

either at the beginning or the end of the financial year and on 21 April 2006. 

4. Directors’ contractual benefits 

Since the end of the previous financial year, no director has received or become entitled to receive a benefit 

(other than a benefit or any fixed salary of a full-time employee of the Company included in the aggregate amount 

of emoluments shown in the financial statements, or any emoluments received from related corporations) 

by reason of a contract made by the Company or a related corporation with the director or with a firm of which 

the director is a member, or with a company in which the director has a substantial financial interest. 

5. Share options 

Frontline Technologies Corporation Ltd Share Option Scheme 2000 (“the Scheme”) 

The Scheme was approved by the members of the Company at an Extraordinary General Meeting held on 

19 September 2000. The Scheme provides an opportunity for employees and executive and non-executive directors 

of the Group to participate in the share capital of the Company. The Scheme serves to motivate employees to 

optimise their performance standards, dedication and efficiency and promote the retention of employees. 

The Scheme is administered by the Compensation Committee comprising the following directors: 

Harrison Wang Hong She (Chairman) 

Tay Swee Sze 


On 28 January 2002, the Company issued 104,860,000 options to the employees of the Group, to subscribe for 

ordinary shares of the Company at a discounted price of $0.22 per share. The exercise period of the option is from 

28 January 2004, where up to 33% of options granted to the employees may be exercised, to 28 January 2006 

where 100% of the options may be exercised. Options granted are cancelled when the option holder ceases to be in 

full-time employment of the Company or any corporation in the Group. 

No options were issued during the financial year and none were exercised.




5. Share options (cont’d) 

Movement in the number of share options outstanding are as follows: 

Options 

As at 28 January 2002 104,860,000 

Cancellation during the year (13,600,000) 

As at 31 March 2002 91,260,000 


As at 31 March 2003 75,664,000 


As at 31 March 2004 47,771,000 


As at 31 March 2005 42,473,000 


As at 31 March 2006 33,223,000 

As at 31 March 2006, no options have been granted to directors of the Company, controlling shareholders of the 

Company or associates of the Company and no employees have received 5% or more of the total options available 

under the Scheme. 

The options under the Scheme do not entitle the holder to participate in any share issue of any other corporation by 

virtue of the option. As at 31 March 2006, no options have been exercised under this Scheme in the Group. 

Convertible bonds 

Pursuant to a subscription agreement dated 12 September 2002 among the Company, PLE Investment Pte Ltd (“PLEI”) 

and a subsidiary, FTI Ventures Pte Ltd (“FTIV”), FTIV issued 1,375,000 convertible bonds at $1 each to the Company and 

PLEI, who took up 60% and 40% respectively. 

On 3 January 2005, the Company acquired 2 ordinary shares of $1.00 each and 550,000 convertible bonds owned by 

PLEI in the capital of FTIV for a consideration of S$110,607.00. As a result of this acquisition, FTIV became a whollyowned 

subsidiary of the Company. Accordingly, PLEI ceases to have any rights over FTIV, including exercises of 

options, and the Company has acquired all rights over all the convertible bonds of FTIV. 

On 8 June 2005, the Company converted the convertible bonds in FTIV into ordinary shares of $1.00 each.

44 




6. Audit committee 

The Audit Committee (the Committee) comprises of all independent non-executive directors. 

The members of the Committee are: 

Tay Swee Sze (Chairman) 



The Committee performs the functions set out in the Singapore Companies Act and the Code of Corporate Governance. 

In performing those functions, the Committee reviewed the overall scope of both internal and external audits and 

the assistance given by the Company’s officers to the auditors. The Committee met with the internal and external 

auditors to discuss the results of their respective examinations and their evaluation of the systems of internal 

accounting controls. The Committee also reviewed the financial statements of the Company and the consolidated 

financial statements of the Group for the year ended 31 March 2006, as well as the external auditors’ report thereon. 

A full report of these functions performed is included in the Report on Corporate Governance. 

7. Auditors 

Baker Tilly TFWLCL have expressed their willingness to accept appointment as auditors of the Company. 

On behalf of the Board of Directors, 


Director 

Lim Chin Hu 

Director 

4 July 2006



> statement by directors 

We, Steve Ting Tuan Toon and Lim Chin Hu, being two of the directors of Frontline Technologies Corporation Ltd, do hereby 

state that, in the opinion of the directors: 

(a) 

(b) 

the financial statements set out on pages 47 to 92 are drawn up so as to give a true and fair view of the state of affairs 

of the Company and the Group as at 31 March 2006 and of the results, changes in equity and cash flows of the Group 

for the financial year then ended; and 

at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as 

and when they fall due. 

On behalf of the Board of Directors, 


Director 

Lim Chin Hu 

Director 

4 July 2006

46 



> auditors’ report 

to the members of frontline technologies corporation ltd 

We have audited the accompanying financial statements of Frontline Technologies Corporation Ltd (the Company) and 

its subsidiaries (collectively the Group) for the year ended 31 March 2006, set out on pages 47 to 92. These financial 

statements are the responsibility of the Company’s directors. Our responsibility is to express an opinion on these financial 

statements based on our audit. The financial statements for the financial year ended 31 March 2005 were audited by 

another firm of auditors whose report dated 1 July 2005 expressed an unqualified opinion on those financial statements. 

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan 

and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 

financial statements. An audit also includes assessing the accounting principles used and significant estimates made 

by the directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a 

reasonable basis for our opinion. 

In our opinion, 

(a) 

(b) 

the consolidated financial statements of the Group and the balance sheet of the Company are properly drawn up in 

accordance with the provisions of the Singapore Companies Act, Cap. 50 (the Act) and Singapore Financial Reporting 

Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2006 

and the results, changes in equity and cash flows of the Group for the financial year ended on that date; and 

the accounting and other records required by the Act to be kept by the Company and by those subsidiaries 

incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of 

the Act. 

Baker Tilly TFWLCL 

Certified Public Accountants 

Singapore 

Engagement Partner: Foong Daw Ching 

4 July 2006



> consolidated income statement 

for the financial year ended 31 march 2006 

Note 2006 2005 

$ $ 

Revenue 4 169,062,783 147,463,591 

Cost of sales (125,254,705) (110,583,741) 

Gross profit 43,808,078 36,879,850 

Other operating income 3,775,399 5,069,543 

Financial income 5 1,215,561 431,086 

Distribution and selling expenses (21,945,214) (16,733,138) 

Administrative expenses (16,492,577) (16,851,433) 

Financial expenses 6 (2,382,984) (2,720,088) 

Share of results of associated companies 7 3,132,223 2,134,050 

Profit from operations before tax 8 11,110,486 8,209,870 

Tax 11 (1,812,416) (1,323,207) 

Net profit for the year 9,298,070 6,886,663 

Attributable to 

Equity holders of the Company 7,293,056 5,154,394 

Minority interest 2,005,014 1,732,269 

9,298,070 6,886,663 

Earnings per share (cents) 

– Basic 12 0.89 0.63 

The accompanying notes form an integral part of these financial statements.

48 



> consolidated balance sheets 


Group 

Company 

Note 2006 2005 2006 2005 

$ $ $ $ 

Non-current assets 

Property, plant and equipment 14 9,358,976 8,629,480 – – 

Subsidiaries 15 – – 44,141,653 36,974,476 

Associated companies 16 23,863,773 21,167,055 41,984,153 41,984,153 

Available-for-sale investments 17 10,695 333,420 – 322,726 

Club memberships 18 270,234 216,020 235,000 199,000 

Deferred tax assets 11 1,039,153 729,040 – – 

Goodwill on acquisition 19 18,456,313 17,770,928 – – 

Intangible assets 20 2,869,580 2,192,504 – – 

Finance lease receivable 21 1,816,939 3,797,416 – – 

Other receivables 22 2,610,559 3,571,759 – – 

Fixed deposits 23 4,000,000 4,000,000 – – 

64,296,222 62,407,622 86,360,806 79,480,355 

Current assets 

Inventories 24 11,563,062 13,555,857 – – 

Trade and other receivables 25 98,969,159 83,936,831 7,185,898 7,170,684 

Finance lease receivable 21 1,833,267 2,157,542 – – 

Cash and cash equivalents 26 28,747,007 31,574,351 1,701,337 4,272,702 

141,112,495 131,224,581 8,887,235 11,443,386 

Total assets 205,408,717 193,632,203 95,248,041 90,923,741 

Non-current liabilities 

Deferred tax liabilities 11 1,341,635 1,342,042 – – 

Hire purchase creditors 28 2,265,380 3,052,792 – – 

Unearned revenue 643,030 2,380,750 – – 

4,250,045 6,775,584 – – 

Current liabilities 

Trade and other payables 27 68,887,519 59,608,169 9,687,809 5,035,939 

Tax payable 977,448 890,723 – 7,245 

Hire purchase creditors 28 2,221,660 1,761,634 – – 

Borrowings and loans 29 24,736,527 21,247,803 – – 

96,823,154 83,508,329 9,687,809 5,043,184 

Total liabilities 101,073,199 90,283,913 9,687,809 5,043,184 

104,335,518 103,348,290 85,560,232 85,880,557 

Equity 

Issued and paid up capital 30 85,113,765 85,063,765 85,113,765 85,063,765 

Reserves 31 4,873,546 1,901,375 446,467 816,792 

Minority interest 14,348,207 16,383,150 – – 

104,335,518 103,348,290 85,560,232 85,880,557 




> consolidated statement of changes in equity 


Attributable to equity holders 

of the Company 

Issued and 

Capital 

paid-up Share Revenue Redemption Translation Minority Total 

Note capital premium reserve reserve reserve interest Equity 

$ $ $ $ $ $ $ 

Balance at 

31 March 2004 40,995,380 43,477,795 1,712,219 50,000 (1,448,450) 4,342,769 89,129,713 

Net profit for the year – – 5,154,394 – – 1,732,269 6,886,663 

Issue of shares 206,868 383,722 – – – – 590,590 

Acquisition of 

a subsidiary – – – – – 10,529,988 10,529,988 

Dividend 13 – – (3,279,630) – – – (3,279,630) 

Translation differences – – – – (287,158) (221,876) (509,034) 

Balance at 

31 March 2005 41,202,248 43,861,517 3,586,983 50,000 (1,735,608) 16,383,150 103,348,290 

Net profit for the year – – 7,293,056 – – 2,005,014 9,298,070 

Acquisition of 

additional shares 

in a subsidiary – – – – – (3,254,494) (3,254,494) 

Dividend 13 – – (3,955,416) – – – (3,955,416) 

Translation differences – – – – (315,469) (785,463) (1,100,932) 

Transfer to issued and 

paid up capital 43,911,517 (43,861,517) – (50,000) – – – 

Balance at 31 March 2006 85,113,765 – 6,924,623 – (2,051,077) 14,348,207 104,335,518 


50 



> consolidated cash flow statement 


2006 2005 

$ $ 

Cash flows from operating activities 

Profit before tax 11,110,486 8,209,870 

Adjustments for: 

Impairment/amortisation of goodwill 36,231 1,444,062 

Amortisation of intangible assets 428,352 333,307 

Depreciation of property, plant and equipment 3,676,809 3,398,888 

Allowance for impairment in value of other investments 44,741 854,868 

Gain on disposal of property, plant and equipment – (28,057) 

Property, plant and equipment written off 8,793 – 

Interest income (1,215,561) (431,086) 

Interest expense 2,071,335 2,349,292 

Write-back of allowance for systems integration project – (400,000) 

Gain on dilution of investment in associated company – (396,431) 

Gain on acquisition of additional investment in subsidiary – (439,395) 

Gain on acquisition of additional investment in associated company – (644,110) 

Share of results of associated companies (3,132,223) (2,134,050) 

Operating profit before working capital changes 13,028,963 12,117,158 

Inventories 1,992,795 (709,248) 

Trade and other receivables (11,766,372) (19,883,586) 

Trade and other payables 7,568,260 7,543,768 

Translation difference (858,117) (444,030) 

Cash generated/(used in) from operations 9,965,529 (1,375,938) 

Income taxes paid (2,015,426) (1,997,493) 

Interest received 1,215,561 431,086 

Interest paid (2,071,335) (2,349,292) 

Net cash generated/(used in) from operating activities 7,094,329 (5,291,637) 






2006 2005 

$ $ 

Cash flows from investing activities 

Purchase of property, plant and equipment (Note B) (4,428,726) (4,165,460) 

Proceeds from disposal of property, plant and equipment 63,150 135,836 

Purchase of unquoted equity bonds from minority interest – (110,605) 

Acquisition of business (Note B) – (981,135) 

Additional investment in associated company – (1,023,972) 

Acquisition of a subsidiary, net of cash acquired (Note C) – (4,534,217) 

Dividends received from an associated company – 1,861,410 

Increase in intangible assets (1,050,933) – 

Additional investment in subsidiaries (3,114,527) – 

Redemption of preference shares 322,726 – 

Placement of long term fixed deposits – (3,000,000) 

Net cash used in investing activities (8,208,310) (11,818,143) 

Cash flows from financing activities 

Increase in fixed deposits pledged to banks (1,083,488) (533,750) 

Net payment to hire purchase creditors (1,169,420) (465,005) 

Dividends paid by the Company (3,955,416) (3,279,630) 

Increase in borrowings 3,411,474 1,953,551 

Net cash used in financing activities (2,796,850) (2,324,834) 

Net decrease in cash and cash equivalents (3,910,831) (19,434,614) 

Cash and cash equivalents at beginning of year 30,708,351 50,142,965 

Cash and cash equivalents at end of year (Note A) 26,797,520 30,708,351 

Note A 

Cash and cash equivalents 

Cash and cash equivalents included in the consolidated cash flow statement comprise the following: 

2006 2005 

$ $ 

Fixed deposits (unpledged portion) 2,975,208 552,057 

Cash and bank balances 23,822,312 30,156,294 

26,797,520 30,708,351 


52 





Note B Analysis on acquisition of business 

2006 2005 

$ $ 

Property, plant and equipment – 50,000 

Acquisition of intellectual property – 1,200,000 

Goodwill arising from acquisition of business – 242,000 

Cash and bank balance – 600,000 

– 2,092,000 

Trade and other payables – (1,110,865) 

Acquisition of business, net of cash acquired – 981,135 

Note C Analysis of acquisition of a subsidiary 

2006 2005 

$ $ 

Property, plant and equipment – 3,411,125 

Intangibles – 397,579 

Long-term receivables – 383,927 

Inventories – 7,793,922 

Trade and other receivables – 25,569,540 

Cash and bank balance – 8,717,636 

Trade and other payables – (9,576,267) 

Deferred taxation – (823,873) 

Borrowings and loans – (16,770,163) 

Net assets acquired – 19,103,426 

Goodwill arising from acquisition of subsidiary – 5,228,415 

Less: Minority interest – (11,079,988) 

Total purchase consideration – 13,251,853 

Less: Cash and bank balance – (8,717,636) 

Acquisition of a subsidiary, net of cash acquired – 4,534,217 




> notes to the financial statement 

for the year ended 31 march 2006 

1. Corporate information 

Frontline Technologies Corporation Ltd (Co Reg. No 199801489G) is a public limited company incorporated and 

domiciled in Singapore. The registered office of the Company is located at 750 Chai Chee Road, #02-01/03 Technopark 

@ Chai Chee, Singapore 469000. 

Related companies in these financial statements refer to members of the Company’s group of companies. 

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are as 

shown in Note 15 to the financial statements. There were no significant changes in the nature of these activities during 

the financial year. 

2. Significant accounting policies 

(a) Basis of preparation 

The financial statements, have been prepared in accordance with Singapore Financial Reporting Standards 

(“FRS”). The financial statements have been prepared under the historical cost convention except as disclosed in 

the accounting policies below. 

The preparation of financial statements in conformity with FRS requires management to exercise its judgement in 

the process of applying the Company’s accounting policies. It also requires the use of accounting estimates and 

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and 

liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the 

financial year. These estimates and assumptions are assessed on an on-going basis and are based on experience 

and relevant factors, including expectations of future events that are believed to be reasonable under the 

circumstances. 

In the current financial year, the Company has adopted all the new and revised FRSs and Interpretations of FRS 

(“INT FRS”) issued by the Council on Corporate Disclosure and Governance that are relevant to its operations and 

effective for annual periods beginning on or after 1 January 2005. The adoption of these new and revised FRSs 

and INT FRSs has no material effect on the financial statements. 

At the date of the balance sheet, the following FRSs and INT FRSs were issued but not effective. 

FRS 19 

FRS 40 

FRS 106 

INT FRS 104 

Employee Benefits 

Investment Property 

Exploration for and Evaluation of Mineral Resources 

Determining whether an Arrangement contains a Lease 

The adoption of these FRSs and INT FRSs (if any) will have no material financial impact on the financial statements 

of the Company in the year of initial application. 

(b) 

Revenue recognition 

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the 

revenue can be reliably measured;

54 





2. Significant accounting policies (cont’d) 

(b) Revenue recognition (cont’d) 

(i) Revenue from short term projects/contracts are recognised using the completed contract method. A project/ 

contract is considered completed when all costs except insignificant items have been incurred and the 

installation is operating according to specifications. Revenue from long term projects/contracts, as defined 

by management to be more than 6 months, are recognised using the percentage-of-completion method. The 

percentage-of-completion for a given project/contract is determined after considering the relationship of 

value of work done to-date to total project/contract revenue for the project/contract; 

(ii) 

Revenue from IT Infrastructure sales are recognised at time of delivery of goods and acceptance by customers; 

(iii) Managed service revenue billed in advance is recorded as unearned revenue and is prorated over the 

contractual period; 

(iv) IT Consultancy revenue is recognised when the services are rendered to the customers; 

(v) 

Revenue from training contracts is earned upon the conduct of training for the customers; 

(vi) Commission income is earned on the sales of products to customers when a certain sales quota set by the 

principal is met and when there is reasonable certainty of collection from the principal; 

(vii) Dividend income is recognised on the date dividends are declared to be payable; 

(viii) Management fee is recognised on an accrual basis when services are rendered; and 

(ix) Interest income is recognised on time proportion basis unless collectibility is in doubt. 

(x) 

Lease rentals from assets leased prior to April 1, 2000 are recognized on a straight-line basis over the period 

of the lease. Assets sold on finance lease arrangements after April 1, 2000 are recognized as a sale at the 

inception of the lease, and the related finance income is recognised on a time proportion basis over the 

period of the lease. Revenue related to the service component if any, embedded in such leases, are not 

expected to be significant and are included as a part of the finance income. 

(xi) Revenue from rental is recognized over the period of tenancy. 

(c) 

Basis of consolidation 

The Group financial statements comprise the financial statements of the Company and its subsidiaries. The results 

of subsidiaries acquired or disposed of during the financial year are included in or excluded from the Group 

financial statements with effect from the respective dates of acquisition or disposal. Significant intercompany 

balances and transactions have been eliminated on consolidation. 

Acquisitions of subsidiaries are accounted for using the purchase method of accounting. Any difference between 

the consideration paid and the fair values of the net assets acquired represents goodwill on acquisition. This is 

accounted for in accordance with note 2(i) below. 

The results of foreign subsidiaries are translated into SGD at the average exchange rates for the financial year and 

balance sheet items are translated at exchange rates ruling at the balance sheet date except for share capital and 

reserves which are translated at historical exchange rates. Exchange differences arising from the above translation 

are taken directly to the translation reserve until the disposal of the subsidiary.






(d) Subsidiaries 

A subsidiary is a company in which the Group, directly or indirectly, holds more than half of the issued share 

capital, or controls more than half of the voting power, or controls the composition of the Board of Directors. 

Investments in subsidiaries are stated in the financial statements of the Company at cost less impairment losses. 

Allowance for impairment loss is made when there is a decline in value that is other than temporary. 

(e) 

Associated company 

An associated company is defined as a company, not being a subsidiary, in which the Group has a long-term 

interest of not less than 20% of the equity and in whose financial and operating policy decisions the Group 

exercises significant influence. 

Investments in associated companies are stated in the financial statements of the Company at cost less 

impairment losses. Allowance for impairment in investment in associated companies is made when, in the 

opinion of the directors, there has been a decline in value of the investment that is other than temporary. 

At the Group level, the investments in associated companies are accounted for under the equity method whereby 

the Group’s share of the results of the associated companies is included in the consolidated income statement 

and the Group’s share of the post-acquisition reserves of associated companies is adjusted against the cost of 

investment in the consolidated balance sheet. 

The excess of the purchase consideration over the Group’s share of the fair value of the associated company at the 

point of acquisition represents goodwill on acquisition. This is accounted in accordance with note 2(i) below. 

(f) 

(g) 

(h) 

Affiliated companies 

An affiliated company is defined as a company, not being a subsidiary or an associated company, in which the 

shareholders and/or directors of the Company have significant equity interests or exercise significant influence. 

Available-for-sale investment 

Investments comprising unquoted equity investments in corporations are classified as available-for-sale 

investments. These investments are initially measured at fair value, plus directly attributable transaction costs 

and measured at subsequent reporting dates at fair value. Gains and losses arising from changes in fair value of 

available-for-sale investments are recognised directly in equity, until the security is disposed of or is determined 

to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the profit 

or loss for the period. Impairment losses recognised in profit or loss for equity investments classified as availablefor-sale 

are not to be subsequently reversed through profit or loss. 

Property, plant and equipment 

Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated 

impairment loss. The cost of property, plant and equipment comprises its purchase price and any directly 

attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure 

for additions, improvements and renewals is capitalized and expenditure for maintenance and repairs is charged 

to the income statement. When property, plant and equipment are sold or retired, their costs and accumulated 

depreciation are removed from the financial statements and any gain or loss resulting from their disposal is 

included in the income statement.

56 






(h) Property, plant and equipment (cont’d) 

Depreciation is calculated on the straight-line method to write off the costs of property, plant and equipment 

over their estimated useful lives. The estimated useful lives of property, plant and equipment are as follows: 

Leasehold improvements 

Plant and machinery 

Furniture and fittings 

Office equipment 

Demonstration equipment 

Computer hardware and software 

Motor vehicles 

Renovation 

6 years 

21 years 

3 – 5 years 

3 – 5 years 

3 years 

3 years 

7 years 

5 years 

No depreciation is charged for work-in-progress. 

Fully-depreciated assets are retained in the financial statements until they are no longer in use and no further 

charge for depreciation is made in respect of these assets. 

The useful life and depreciation method are reviewed annually to ensure that the period and method of 

depreciation are consistent with the expected pattern of economic benefits from items of property, plant and 

equipment. 

(i) 

Goodwill on consolidation 

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest 

in the fair value of the identifiable assets and liabilities of a subsidiary or an associated company at the date 

of acquisition. Goodwill recognised as intangible assets is stated at cost less accumulated impairment losses. 

Goodwill, which is assessed as having no continuing economic value is written off to the income statement. 

Goodwill arising on the acquisition of subsidiaries or associates is presented separately in the balance sheet. 

On disposal of a subsidiary or an associate, the attributable amount of goodwill is included in the determination 

of the profit or loss on disposal. 

(j) 

Intangible assets 

(i) Computer software 

Computer software relates to development cost capitalised at cost during the year. It has been assessed 

as having a finite life and is amortised under the straight-line method over a period of 3 years. The asset is 

tested for impairment where an indication on impairment arises. 

(ii) 

Licence fee 

The intangible asset relates to the cost of licence fee paid under an agreement entered into by a subsidiary 

company with its director, whereby the latter has agreed to make available its intellectual proprietary rights 

(its ownership of the web portal (Unimas) and Share Trading System II (STS II)) to the subsidiary company. 

The cost of licence fee is amortised on a straight-line basis, through the profit and loss account over 

the useful life of the licences up to a maximum of 10 years. Where the licence is assessed as having no 

continuing economic value, the licence fee is written off to the profit and loss account.






(j) Intangible assets (cont’d) 

(iii) Research and development costs 

Research costs are expensed as incurred. Development expenditure incurred on an individual project is 

recognised as an asset to the extent that it is expected that such asset will generate future economic benefits. 

Following the initial recognition of the development expenditure, the cost model is applied requiring the asset 

to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any expenditure 

recognised as an asset is amortised over the period of expected future sales from the related project. 

(iv) 

(v) 

(vi) 

Intellectual property 

Intellectual property relates to the tools and methodologies and know-how purchased from business 

acquisition. It is recognised at its fair value of the future net cash flows and amortised over the estimated 

useful life of up to 15 years (2005:10 years). During the current financial year, the Group changed the 

amortisation of its intellectual property from 10 years to 15 years to reflect a more accurate pattern of 

consumption of the economic benefits of the intangible asset. The change in estimated useful life has no 

material financial effect on the financial statements of the Group during the financial year. 

Client contracts 

Client contracts relate to existing contracts with third party customers, purchased from business acquisition, with 

a fixed stream of revenues. It is recognised at its fair value representing net cash flows to be derived during the 

existing contractual period and amortised over the remaining useful life of the contracts not exceeding 3 years. 

Software under development 

No amortisation is charged for software under development. 

(k) 

Impairment of non-financial assets 

At each balance sheet date, the Group and Company reviews the carrying amounts of its non-financial assets 

to determine whether there is any indication that those assets have suffered an impairment loss. If any such 

indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the 

impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, Group 

estimates the recoverable amount of the cash-generating unit to which the asset belongs. 

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the 

estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects 

current market assessments of the time value of money and the risks specific to the asset. 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, 

the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss 

is recognised immediately in the income statement, unless the relevant asset is carried at a revalued amount, in 

which case the impairment loss is treated as a revaluation decrease. 

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is 

increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does 

not exceed the carrying amount that would have been determined had no impairment loss been recognised 

for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in 

the income statement unless the relevant asset is carried at a revalued amount, in which case the reversal of the 

impairment loss is treated as a revaluation increase.

58 






(l) Inventories 

Inventories, consisting of computer software and hardware, are stated at the lower of cost and net realisable 

value, with the cost being generally determined using the weighted-average method. Net realisable value is 

the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale. 

Provision is made for deteriorated, damaged, obsolete and slow-moving inventories. 

(m) Trade and other receivables 

Receivables are measured at initial recognition at fair value, and are subsequently measured at amortised 

cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are 

recognised in the income statement when there is objective evidence that the asset is impaired. The allowance 

recognised is measured as the difference between the asset’s carrying amount and the present value of estimated 

future cash flows discounted at the effective interest rate computed at initial recognition. 

(n) 

Trade and other payables 

Trade and other payables, which are normally settled on 30 – 90 day terms, are carried at cost which is the fair 

value of the consideration to be paid in the future for goods and services received. 

Payables to related companies are initially measured at fair value, and subsequently measured at amortised cost, 

using the effective interest method. 

(o) 

Provisions 

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past event, 

it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation 

and a reliable estimate can be made of the amount of the obligation. 

Provision for warranty is made on products sold for a period of up to one year from the date of installation. 

Provision for product warranty cost is made at the time of sale by the Group based on the estimated product 

returns and costs to be incurred in providing the warranty. 

(p) 

Employee benefits 

(i) Equity compensation benefits 

The cost of equity-settled transactions is recognised, together with a corresponding increase in the 

employee share option reserve, over the period in which the performance and/or service conditions are 

fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“the 

vesting date”). The cumulative expenses recognised for equity-settled transactions at each reporting date 

until the vesting date reflects the extent to which the vesting period has expired and the group’s best 

estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit 

for a period represents the movement in cumulative expense recognised as at the beginning and end of 

that period. 

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional 

upon a market condition, which are treated as vested irrespective of whether or not the market condition is 

satisfied, provided that all other performance conditions are satisfied.






(p) Employee benefits (cont’d) 

(i) Equity compensation benefits (cont’d) 

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the 

terms had not been modified. In addition, an expense is recognised for any modification, which increases 

the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as 

measured at the date of modification. 

(ii) 

(iii) 

(iv) 

(v) 

Defined contribution plans 

As required by law, the Group makes contribution to the state pension scheme, the Central Provident 

Fund (“CPF”) for Singapore companies, the Employees Provident Fund (“EPF”) for Malaysia companies 

and Provident fund for India companies. CPF, EPF and Provident fund contributions are recognised 

as compensation expense in the same period as the employment that gives rise to the contributions. 

Eligible employees and the Group make monthly contributions based on a percentage of the 

employee’s basic salary. 

Employee leave entitlement 

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is 

made for estimated liability for annual leave as a result of services rendered by employees up to the 

balance sheet date. 

Gratuity fund for a subsidiary 

In India, the liability for gratuity is determined actuarially by the Life Insurance Corporation of India (“LIC”). 

The subsidiary makes periodic contributions for all eligible employees, to a gratuity fund maintained and 

administered by the LIC. 

Superannuation fund for a subsidiary 

In India, a subsidiary makes periodic contributions to a superannuation fund maintained and administered 

jointly by the LIC and the trust formed by the subsidiary for this purpose, based on a specific percentage of 

the salary of the eligible employees. 

(q) 

Leases 

(i) Operating leases 

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased 

assets are classified as operating leases. Operating lease payments are recognised as an expense in the profit 

and loss account on a straight-line basis over the lease term. 

(ii) 

Hire purchase 

Where assets are financed by hire purchase contracts that give rights approximating to ownership, the 

assets are capitalised as if they had been purchased outright at the values equivalent to the present value 

of the total rental payable during the periods of the hire purchase and the corresponding hire purchase 

commitments are included under liabilities. The excess of the hire purchase payments over the recorded hire 

purchase obligations is treated as finance charges which are allocated over each hire purchase term to give a 

constant rate of interest on the outstanding balance at the end of each period.

60 






(q) Leases (cont’d) 

(iii) Finance lease 

When assets are leased out under a finance lease, the present value of the lease payments is recognized as a 

receivable. The difference between the gross receivable and the present value of the receivable is recognised 

as unearned finance income. Lease income is recognized in the profit and loss account over the term of the 

lease using the net investment method, which reflects a constant periodic rate of return. Initial direct costs 

are charged to profit and loss account as an expense at the commencement of the lease period. 

(r) 

Borrowings and loans 

Borrowing costs are generally expensed as incurred. Borrowing costs are capitalised if they are directly 

attributable to the acquisition, construction or production of a qualifying asset. Capitalisation of borrowing 

costs commences when the activities to prepare the asset for its intended use or sale are in progress and the 

expenditures and borrowing costs are being incurred. Borrowing costs are capitalised until the assets are 

ready for their intended use. If the resulting carrying amount of the asset exceeds its recoverable amount, an 

impairment loss is recorded. 

Loans and borrowings are initially recognised at cost and subsequently measured at amortised cost using the 

effective interest rate method. The difference between net proceeds and redemption value being recognised in 

the profit and loss account in the period over the life of the borrowings. 

(s) 

Income tax 

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the 

income statement except to the extent that it relates to items recognised directly to equity, in which case it is 

recognised in equity. 

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially 

enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. 

Deferred income tax is provided using the liability method, on all temporary differences at the balance sheet 

date arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. 

Currently enacted tax rates are used in the determination of deferred income tax. 

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available 

against which the temporary differences can be utilised. 

Deferred tax are charged or credited to equity if the tax relates to items that are credited or charged, in the same 

or a different period, directly to equity. 

(t) 

Club memberships 

Club memberships, are held on a long-term basis and are stated at cost less impairment losses, if any.






(u) Foreign currency transactions and balances 

(i) Functional currency 

Items included in the financial statements of each entity in the Group are measured using the currency that 

best reflects the economic substance of the underlying events and circumstances relevant to that entity 

(“the functional currency”). The consolidated financial statements and balance sheet of the Company are 

presented in Singapore Dollars, which is the functional currency of the Company. 

(ii) 

Transactions and balances 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing 

at the date of transactions. Foreign exchange gains and losses resulting from the settlement of such 

transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, 

are recognised in the income statement. 

Foreign currency monetary assets and liabilities are translated into Singapore Dollars at the rates of exchange 

prevailing at the balance sheet date or at contracted rates where they are covered by forward exchange contracts. 

Exchange differences arising are taken to the income statement. 

(v) 

Segment reporting 

A segment is a distinguishable component of the Group within a particular industry (business segment) and to a 

particular economic environment (geographical segment) which is subject to risks and rewards that are different 

from those of other segments. 

Inter-segment pricing is determined on an arm’s length basis. Segment results, assets and liabilities include items 

directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items 

mainly comprise income-earning assets and revenue, interest-bearing loans, borrowings and expenses, and 

corporate assets and expenses. 

Segment information is presented in respect of the Group’s business and geographical segments. The primary 

format, business segment, is based on the Group’s management and internal reporting structure. 

3. Significant accounting estimates and judgements 

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial 

statements. They affect the application of the Group’s accounting policies, reported amounts of assets, liabilities, 

income and expenses, and disclosures made. They are assessed on an on-going basis and are based on experience and 

relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. 

In the process of applying the Group’s accounting policies, management has not made any critical judgement apart 

from those involving assumptions and estimations which have significant effects on amounts recognised in the 

financial statements. 

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, 

that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the 

next financial year are discussed below:

62 





3. Significant accounting estimates and judgements (cont’d) 

(i) Impairment of goodwill and other intangibles 

The Group determines whether goodwill and other intangibles are impaired at least on an annual basis. 

This requires an estimation of the value-in-use of the cash generating units to which the goodwill and other 

intangibles are allocated. Estimating the value-in-use requires the Group to make an estimate of the expected 

future cash flows from the cash generating unit and also to choose a suitable discount rate in order to calculate 

the present value of those cash flows. The carrying amount of the Group’s goodwill and other intangibles at 31 

March 2006 was $21,325,893 (2005: $19,963,432). 

(ii) 

(iii) 

Depreciation of property, plant and equipment 

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. 

Management estimates the useful lives of these property, plant and equipment to be within 3 to 21 years. 

The carrying amount of the Group’s property, plant and equipment at 31 March 2006 was $9,358,976 (2005: 

$8,629,480). Changes in the expected level of usage and technological developments could impact the economic 

useful lives and the residual values of these assets, therefore future depreciation charges could be revised. 

Income taxes 

The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in 

determining the Group-wide provision for income taxes. There are certain transactions and computations for 

which the ultimate tax determination is uncertain during the course of business. The Group recognises liabilities 

for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome 

of these matters is different from the amounts that were initially recognised, such differences will impact the 

income tax and deferred tax provisions in the period in which such determination is made. The carrying amount 

of the Group’s tax payable at 31 March 2006 was $977,448 (2005: $890,723). 

4. Revenue 

Revenue represents contract revenue and invoiced value of sales, services income, outsourcing income, training 

income and commission recognised in the normal course of business as follows: 

Group 

2006 2005 

$ $ 

IT Infrastructure 90,579,965 95,836,223 

IT Outsourcing 61,542,902 44,022,223 

IT Consulting and Implementation 16,939,916 7,605,145 

169,062,783 147,463,591 

Intra-group transactions have been excluded from Group turnover.





5. Financial income 

Group 

2006 2005 

$ $ 

Interest income 

– bank balances 220,965 156,887 

– fixed deposits 118,643 71,897 

– others (mainly finance lease income) 875,953 202,302 

1,215,561 431,086 

6. Financial expenses 

Group 

2006 2005 

$ $ 

Interest expense 

– short term loans and overdraft 1,124,939 1,884,803 

– notes payable 96,436 324,189 

– hire purchase 715,477 9,783 

– bills payable 134,483 130,517 

Bank charges 75,574 195,056 

Foreign exchange loss, net 236,075 175,740 

2,382,984 2,720,088 

7. Share of results of associated companies 

Group 

2006 2005 

$ $ 

Share of profit before tax of associated companies 3,963,106 2,689,829 

Share of tax of associated companies (830,883) (555,779) 

3,132,223 2,134,050

64 





8. Profit from operations before tax 

This is determined after charging/(crediting) the following: 

Group 

2006 2005 

$ $ 

Amortisation of goodwill on acquisition – 1,444,062 

Amortisation of intangible assets 428,352 333,307 

Auditors’ remuneration 

– auditors of the Company, non-audit services 20,400 3,000 

Bad debts recovered (143,050) (39,476) 

Bad trade debts written off 360,366 526,795 

Depreciation of property, plant and equipment 3,676,809 3,398,888 

Fees payable to directors of the Company 84,188 30,000 

Directors’ remuneration 

– of the Company 1,011,090 934,707 

– of the subsidiaries 757,559 558,714 

Gain on acquisition of additional investment in: 

– subsidiary – (439,395) 

– associated company – (644,110) 

Gain on dilution of investment in associated company – (396,431) 

Impairment of goodwill on acquisition 36,231 – 

Operating lease expenses 2,681,342 2,943,279 

Personnel expenses * (Note 9) 32,194,753 24,082,047 

Property, plant and equipment written off 8,793 – 

Allowance for impairment in value of other investment 44,741 854,868 

Allowance for doubtful receivables 

– trade receivables 735,476 1,224,604 

– non-trade receivables – 227,278 

Allowance for inventory obsolescence 21,219 177,602 

Inventories written off 29,336 67,170 

Write-back of allowance for doubtful trade receivables (88,200) (234,180) 

Write-back of allowance for inventory obsolescence – (258,685) 

Write-back of allowance for systems integration project – (400,000) 

* These expenses include directors’ fees and remuneration as disclosed in Note 9.





9. Personnel expenses 

Group 

2006 2005 

$ $ 

Fees and remuneration payable to: 

– Directors of the Company 1,095,278 964,707 

– Directors of the subsidiaries 757,559 558,714 

Executive officers 531,031 786,128 

Staff wages and salaries 28,449,304 20,387,914 

Pension contribution * 1,932,349 2,060,410 

Other social expenses 1,282,069 847,595 

34,047,590 25,605,468 

* Inclusive of pension contribution by a subsidiary in India (Note 10). 

10. Gratuity fund for a subsidiary 

The subsidiary in India has funded a non-contributory defined benefit gratuity fund covering all regular and full-time 

permanent employees with at least five years of continuous service. The benefits are based on a percentage of the final 

covered compensation for every year of continuous service. The plan also provides for involuntary separation 

benefits to its members. Pension contribution charged to the Group’s income statement amounted to $169,027 

(2005 : $185,952) for the year ended 31 March 2006. 

Based on the latest actuarial valuation report as of 14 February 2006, the actuarial present value of retirement benefits 

amounted to $281,155. The fair value of the plan assets amounted to $66,924 while the present value of unfunded 

benefits amounted to $214,231. The principal actuarial assumptions used to determine retirement benefits were a 

discount rate of 7.5 % per year, a salary increase of 3.5 % per year, and an expected rate of return on plan assets of 

10% per year. Actuarial valuations are updated periodically. The subsidiary’s accrual for the gratuity fund for the year 

consists of the current service cost and the amortisation of past service cost liability. 

11. Tax 

Group 

2006 2005 

$ $ 

Current tax 

– current year 1,656,574 857,583 

– (over)/under provision in prior year 213,943 (31,531) 

Deferred tax 

– current year (58,101) 688,460 

– over provision in prior year – (191,305) 

1,812,416 1,323,207

66 





11. Tax (cont’d) 

Group 

A loss-transfer system of group relief (“group relief system”) for companies was introduced in Singapore with effect 

from year of assessment 2004. Under the group relief system, a company belonging to a group may transfer its current 

year unabsorbed capital allowances, current year unabsorbed trade losses and current year unabsorbed donations 

(loss items) to another company belonging to the same group, to be deducted against the assessable income of the 

latter company. 

The Group has unutilised tax losses of approximately $2,690,000 (2005: $3,480,000) available for offset against 

future taxable income subject to the agreement by tax authorities and compliance with certain tax regulations 

in the respective countries in which certain subsidiaries operate. The potential deferred tax asset arising from the 

unabsorbed tax losses of certain subsidiaries have not been recognised in the financial statements due to uncertainty 

in its realisation. 

The reconciliation of the tax expense and the amount obtained by applying the applicable tax rate on accounting 

profit before tax is as follows: 

Group 

2006 2005 

$ $ 

Profit before tax 11,110,486 8,209,870 

Tax at the domestic tax rate of 20% (2005: 20%) 2,222,097 1,641,974 

Income not taxable (440,471) (221,095) 

Expenses not tax deductible 123,954 301,062 

Leasing income recognised only for tax purposes 721,579 728,105 

Utilisation of tax losses brought forward not recognised in prior years (45,615) (527,885) 

Utilisation of capital allowances brought forward not recognised in prior years (458) (1,165,474) 

(Over)/under provision in prior year 

– current tax 213,943 (31,531) 

– deferred tax – (191,305) 

Change in tax rates 115,465 116,551 

Tax relief (1,042,434) (24,918) 

Effect of different tax rates in other countries 600,434 650,179 

Deferred tax asset not recognised 41,542 340,749 

Partial tax exemption (30,280) (13,159) 

Share of associates’ tax (830,883) (555,779) 

Others 163,543 275,733 

1,812,416 1,323,207





11. Tax (cont’d) 

Deferred taxes as at 31 March related to the tax effect of the following temporary differences: 

Group 

2006 2005 

$ $ 

Deferred tax assets 

Allowances for doubtful receivables and stock obsolescence 974,300 874,427 

Deferred gain on sale and lease back 36,804 35,944 

Tax losses carried forward 132,202 19,079 

Foreign exchange difference 55,427 (40,830) 

Excess of tax base over carrying amount (159,580) (159,580) 

1,039,153 729,040 

Deferred tax liabilities 

Excess of carrying amount over tax base (1,341,635) (441,637) 

Foreign exchange difference – (1,281,481) 

Provisions – 381,076 

(1,341,635) (1,342,042) 

Net deferred tax liability (302,482) (613,002) 

12. Earnings per share 

The calculations of earnings per share are based on the profit and number of shares shown below. 

Group 

2006 2005 

$ $ 

Profit attributable to shareholders 7,293,056 5,154,394 

Weighted Weighted 

average average 

number of number of 

shares shares 

2006 2005 

Issued ordinary shares at beginning of year 824,044,945 819,907,592 

Weighted average number of ordinary shares issued during the year – 668,778 

Total for basic earnings per share 824,044,945 820,576,370 

When calculating diluted earnings per share, the weighted average number of shares is adjusted for the effect of all 

dilutive potential ordinary shares. 

Fully diluted earnings in cents per share is not disclosed, as there is no dillutive effect from the exercise of the share 

options from the Scheme (Note 30). 

13. Dividend 

Group 

2006 2005 

$ $ 

An interim dividend of 0.60 cents (2005: 0.50 cents) per ordinary share, 

less tax at 20%, paid in respect for the year ended 31 March 2006 3,955,416 3,279,630

68 





14. Property, plant and equipment 

Group 

Leasehold Plant and Furniture Office 

Cost Improvement machinery and fittings equipment 

$ $ $ $ 

2006 

As at 1 April 2005 1,676,486 372,068 1,469,577 3,467,811 

Transfer – – – – 

Additions 586,860 33,461 69,067 193,043 

Disposal – – (18,972) (7,899) 

Written Off (45,608) 1,869 4,086 2,045 

Exchange Difference 55,567 (14,496) (31,693) 150,706 

As at 31 March 2006 2,273,305 392,902 1,492,065 3,805,706 

Accumulated Depreciation 

As at 1 April 2005 953,080 44,928 762,873 2,766,966 

Additions 159,307 18,175 134,745 88,378 

Disposal – – (18,972) (5,755) 

Written Off (45,608) 1,869 4,086 2,045 

Exchange Difference 39,947 (2,406) (10,285) 156,231 

As at 31 March 2006 1,106,726 62,566 872,447 3,007,865 

Net Book Value 

As at 1 April 2005 723,406 327,140 706,704 700,845 

As at 31 March 2006 1,166,579 330,336 619,618 797,841





Computer 

Demonstration hardware Motor Work-inequipment 

and software vehicle Renovation progress Total 

$ $ $ $ $ $ 

7,377,114 7,279,869 426,374 1,356,893 55,871 23,482,063 

– – – – (55,871) (55,871) 

2,243,172 999,298 209,934 93,892 – 4,428,727 

(14,980) (123,937) (136,744) – – (302,532) 

– (2,024,156) (16,842) – – (2,078,606) 

478,794 (98,048) (9,670) 1,215 – 532,375 

10,084,100 6,033,026 473,052 1,452,000 – 26,006,156 

3,792,334 5,746,039 171,375 614,988 – 14,852,583 

2,217,722 743,798 40,950 273,734 – 3,676,809 

(3,745) (117,288) (93,623) – – (239,383) 

– (2,011,552) (16,842) (3,811) – (2,069,813) 

313,822 (68,107) (2,493) 275 – 426,984 

6,320,133 4,292,890 99,367 885,186 – 16,647,180 

3,584,780 1,533,830 254,999 741,905 55,871 8,629,480 

3,763,967 1,740,136 373,685 566,814 – 9,358,976

70 





14. Property, plant and equipment (cont’d) 

Group 

Leasehold Plant and Furniture Office 

Cost Improvement machinery and fittings equipment 

$ $ $ $ 

2005 

As at 1 April 2004 1,126,692 – 567,720 2,789,341 

Additions 146,017 – 45,477 195,454 

Arising from acquisition 403,777 372,068 858,462 501,234 

Disposal – – – (16,380) 

Exchange Difference – – (2,082) (1,838) 

As at 31 March 2005 1,676,486 372,068 1,469,577 3,467,811 

Accumulated Depreciation 

As at 1 April 2004 573,951 – 435,479 2,531,246 

Additions 285,147 14,591 134,091 185,593 

Arising from acquisition 93,603 31,835 197,291 67,221 

Disposal – – – (14,773) 

Exchange Difference 379 (1,498) (3,988) (2,321) 

As at 31 March 2005 953,080 44,928 762,873 2,766,966 

Net Book Value 

As at 1 April 2004 552,741 – 132,241 258,095 

As at 31 March 2005 723,406 327,140 706,704 700,845





Computer 

Demonstration hardware Motor Work-inequipment 

and software vehicle Renovation progress Total 

$ $ $ $ $ $ 

4,497,892 2,150,318 147,509 1,253,792 – 12,533,264 

2,879,222 605,468 43,516 194,435 55,871 4,165,460 

– 4,621,174 239,068 – – 6,995,783 

– (91,757) (3,681) (89,379) – (201,197) 

– (5,334) (38) (1,955) – (11,247) 

7,377,114 7,279,869 426,374 1,356,893 55,871 23,482,063 

2,163,326 1,855,670 99,342 360,036 – 8,019,050 

1,624,521 861,428 37,863 255,654 – 3,398,888 

– 3,110,370 34,337 – – 3,534,657 

– (78,645) – – – (93,418) 

4,487 (2,784) (167) (702) – (6,594) 

3,792,334 5,746,039 171,375 614,988 – 14,852,583 

2,334,566 294,648 48,167 893,756 – 4,514,214 

3,584,780 1,533,830 254,999 741,905 55,871 8,629,480

72 





15. Subsidiaries 

(a) Investments in subsidiaries comprise: 

Company 

2006 2005 

$ $ 

Unquoted equity shares, at cost 50,127,653 42,024,871 

Unquoted convertible bonds, at cost – 935,605 

50,127,653 42,960,476 

Less: Allowance for impairment loss 

Unquoted equity shares (5,986,000) (5,328,000) 

Unquoted convertible bonds – (658,000) 

(5,986,000) (5,986,000) 

44,141,653 36,974,476 

On 8 June 2005, the Company converted the convertible bonds in FTI Ventures Pte Ltd into ordinary shares of 

$1.00 each. 

(b) 

Details of the subsidiaries are as follows: 

Country of 

Percentage of 

incorporation 

equity held 

and place 

by the Group 

Name Principal activities of business 2006 2005 

% % 

Held by the Company 

Frontline Technologies Sales, marketing and Singapore 100 100 

Pte Ltd * 

support of internet-based 

infrastructure, including 

computer systems, software, 

storage, networking and 

security systems 

Frontline Outsourcing (Asia) Provision of IT Singapore 100 100 

Pte Ltd * 

outsourcing services 

Frontline Solutions Pte Ltd * Provision of Singapore 100 100 

consulting services 

in IT – Business and 

Information Technology, 

IT – Business systems 

intergration and other 

IT services 

Frontline Innovations Dormant Singapore 100 100 

Pte Ltd *





15. Subsidiaries (cont’d) 

(b) Details of the subsidiaries are as follows (cont’d): 

Country of 

Percentage of 

incorporation 

equity held 

and place 

by the Group 


% % 

Held by the Company (cont’d) 

Asia-Pacific Science Dormant Singapore 100 100 

Technology Partnership 

Pte Ltd * 

FTI Ventures Pte Ltd * Investment holding Singapore 100 100 

Company 

Frontline Technologies (P.R.C) Dormant Singapore 100 100 

Pte Ltd * 

Green House Group Pte Ltd * Providing business Singapore 100 100 

management and 

consultancy services 

Frontline Technologies Investment holding Malaysia 100 100 

Corporation (M) Sdn Bhd. ** 

IT Holdings, Inc ### Investment holding Philippines 100 49 † 

FTI, Inc # Dormant Mauritius 100 100 

Accel Frontline Limited Sale of computer India 51 42 † 

(formerly known as Accel hardware and peripherals, 

ICIM Frontline Limited) ## providing system 

integration solutions 

and implementation 

of customized and traded 

software products 

Held by Green House Group 

Pte Ltd 

Green House Exhibits Pte Ltd * Dormant Singapore 100 100 

Frontline Practice Pte Ltd * Dormant Singapore 100 100 

Green House Learning Dormant Singapore 100 100 

Pte Ltd * 

Green House Solution Dormant Malaysia 100 100 

Sdn Bhd ** @@@

74 







Country of 

Percentage of 

incorporation 

equity held 

and place 

by the Group 


% % 

Held by Frontline Technologies 

Corporation (M) Sdn Bhd 

Frontline Technologies Sales, marketing and Malaysia 100 100 

Malaysia Sdn Bhd ** 

support of internet-based 

infrastructure including 

computer systems, software, 

storage, networking 

and security systems 

BizFront Sdn Bhd ** Provision of end-to-end Malaysia 100 100 

software solutions and 

training; and support and 

maintenance of computer 

software systems and 

applications 

Frontline Outsourcing (Asia) Provision of IT Malaysia 100 100 

Sdn Bhd ** 

Outsourcing Services 

Held by IT Holdings, Inc 

Sun Microsystems Provide IT systems Philippines 51 24.94 

Philippines, Inc *** 

and services 

Held by Sun Microsystems 

Philippines, Inc 

PSPI-Subic, Inc *** Dormant Philippines 51 24.94 

Held by Accel Frontline Limited 

Accel Infotech ME Dubai @ Trading of computer and United Arab 100 100 

associated peripherals, Emirates 

application software and 

packaged software, maintenance 

of hardware and software and 

outsourcing activities







Country of 

Percentage of 

incorporation 

equity held 

and place 

by the Group 


% % 

Held by Accel Frontline Limited 

ACL Systems & Technologies Trading of computer and Singapore 100 100 

Pte Ltd @@ 

associated peripherals, 

application software and 

packaged software, maintenance 

of hardware and software and 

outsourcing activities 

* Audited by Baker Tilly TFWLCL 

** Audited by Ahmad Abdullah & Goh, Malaysia, an independent member firm of Baker Tilly International . 

*** Audited by SyCip Gorres Velayo & Company, an associated firm of Ernst & Young, Global. 

# 

Audited by Ernst & Young, Mauritius, an associated firm of Ernst & Young, Global. 

## 

Audited by KS Aiyar & Co, India, an independent member firm of Baker Tilly International. 

### 

Audited by Punongbayan & Araullo in Philippines. 

@ 

Audited by SK Ram Associates in United Arab Emirates 

@@ 

Audited by MGI N Rajan Associates in Singapore 

@@@ 

Shares held in trust by trustees. 

† 

These companies have been consolidated as subsidiaries of the Company or their respective immediate 

holding company as the Company or the immediate holding company exercises control over the Board of 

Directors of these companies. 

(c) 

Acquisition of subsidiaries 

During the financial year, the Company acquired additional equity interest from the minority shareholders in the 

following subsidiaries: 

Interest 

Attributable 

Date of transfer Subsidiary acquired Consideration net assets 

% $ $ 

1 March 2006 Accel Frontline Limited 9 2,648,644 2,101,794 

3 October 2005 IT Holdings, Inc 51 1,318,533 1,152,700

76 





16. Associated companies 

(a) Investments in associated companies comprise: 

Group 

Company 

2006 2005 2006 2005 

$ $ $ $ 

Unquoted equity shares, at cost 41,984,153 42,028,894 41,984,153 41,984,153 

Goodwill on acquisition written off to 

revenue reserves in previous years (11,328,838) (11,328,838) – – 

Goodwill on acquisition (12,248,702) (12,248,702) – – 

18,406,613 18,451,354 41,984,153 41,984,153 

Share of post acquisition profits 6,926,511 3,794,288 – – 

Translation difference (1,469,351) (1,078,587) – – 

23,863,773 21,167,055 41,984,153 41,984,153 

(b) 

Details of the associated companies are as follows: 

Country of 

Percentage of 

incorporation 

equity held 

and place 

by the Group 


% % 

G-Able Co., Limited ** Provision of client Thailand 20.5 20.5 

server computing 

systems and network 

related infrastructure 

products and services 

MDCL – Frontline Investment holding British Virgin 47 47 

(China) Ltd *** 

Islands 

Ecquaria Ltd * License of software British Virgin 30 30 

applications and 

Islands 

investment holding 

* Audited by Ernst & Young, Singapore. 

** Audited by Grant Thornton, Bangkok. 

*** Audited by Deloitte Touche Tohmatsu, Beijing.





16. Associated companies (cont’d) 

(c) The summarised financial information of associates is as follows: 

Group 

2006 2005 

$ $ 

Income statement 

Revenue 299,532,692 215,895,718 

Expenses (289,559,499) (209,809,811) 

Profit after taxation 9,973,193 6,085,907 

Balance Sheet 

Total assets 174,140,969 153,187,749 

Total liabilities 106,093,576 94,192,117 

17. Available-for-sale investments 

Group 

Company 

2006 2005 2006 2005 

$ $ $ $ 

Unquoted investments, at cost 

– convertible bonds 245,453 245,453 – – 

– convertible loan 2,500,000 2,500,000 2,500,000 2,500,000 

– preference shares – 999,992 – 999,992 

– ordinary shares 1,995,268 1,982,559 1,430,000 1,430,000 

4,740,721 5,728,004 3,930,000 4,929,992 

Less: allowance for impairment in value 

– preference shares – 677,266 – 677,266 

– convertible bonds 245,453 245,453 – – 

– convertible loan 2,500,000 2,500,000 2,500,000 2,500,000 

– ordinary shares 1,984,573 1,971,865 1,430,000 1,430,000 

4,730,026 5,394,584 3,930,000 4,607,266 

10,695 333,420 – 322,726 

Main features of certain investments were as follows: 

iASPire.net Pte Ltd (“iASPire”) 

Pursuant to a subscription agreement dated 8 May 2000, the Company purchased $2,900,000 of convertible loan stock 

bearing interest at 6% per annum. The convertible loan stock is convertible at the Company’s option into ordinary 

shares of iASPire. The loan matures on 31 December 2002 and the option also expires on that date. The $2,900,000 

convertible loan stock is convertible into ordinary shares representing 66.5% of the equity interest in iASPire. The 

agreement also contains anti-dilution protection against the Company’s equity interest in iASPire falling below 51%. 

On 10 May 2002, the Company entered into an agreement with iASPire to extend the maturity date for the convertible 

loan stocks to 31 December 2003 and the interest of 6% per annum to be waived for the extended period until 31 

December 2003. Pursuant to this agreement, the maturity redemption amount shall be equal to the issue price until 

the extended maturity date and the other terms and conditions of the first agreement remain unchanged.

78 





17. Available-for-sale investments (cont’d) 

iASPire.net Pte Ltd (“iASPire”) (cont’d) 

As at 31 March 2005, the Company had converted $400,000 convertible loan stock into ordinary shares. The Company 

had also invested an additional $530,000 in the form of ordinary stocks by capitalising the debts owing by iASPire. The 

Company’s total investment of $930,000 represents 19.3% of equity share of iASPire. This remained unchanged as of 31 

March 2006. 

iGine.com Pte Ltd (“iGine”) 

Under the terms of subscription agreements dated 31 March 2000 and 5 September 2000, the Company purchased 

125,000 ordinary shares representing 10.2% equity interest of iGine for a cash consideration of $500,000. The Company 

also previously purchased 114,678 redeemable convertible preference shares (“RCPS”) in iGine for a cash consideration 

of $999,992. These RCPS are convertible to one ordinary share in the capital of iGine. On 30th May 2005, the Company 

redeemed all of its 114,678 Redeemable Convertible Preference Shares (“RCPS”) in iGINE Pte Ltd (“iGINE”) for a 

redemption amount of $322,725.74 and an additional 22,727 ordinary shares in iGINE. By the redemption of the RCPS, 

the Company has increased its equity interest in iGINE to 11%. The Company’s equity interest remains unchanged as of 

31 March 2006. 

Beacon Frontline Solutions, Inc. (“Beacon”) 

Pursuant to an investment agreement dated 1 August 2002, FTI Ventures Pte Ltd (“FTIV”), a subsidiary, purchased 

US$133,333 (equivalent to $245,453) convertible bonds of Beacon. The convertible bonds are non-interest bearing. 

The bonds are convertible into 6,666,667 new common shares of Peso 1 each in the capital of Beacon, or such 

higher number of shares comprising no less than 25% of the total enlarged capital stock of Beacon as at the date of 

conversion. The conversion period for the bonds has expired on 31 July 2005. However, the directors of the Group are 

of the opinion that they are able to re-negotiate an extension on the conversion period to a later date. 

The fair value of investments in the above unquoted investments is not available as there is no quoted market prices in 

an active market and other methods of determining fair value do not result in a reasonable estimate. 

18. Club Membership 

Group 

Company 

2006 2005 2006 2005 

$ $ $ $ 

At Cost 357,059 302,845 321,825 285,825 

Less: Allowance for impairment in value (86,825) (86,825) (86,825) (86,825) 

270,234 216,020 235,000 199,000





19. Goodwill on acquisition 

Group 

$ 

Cost: 

At April 1, 2005 21,874,766 

Elimination of amortisation accumulated prior 

to the adoption of FRS 103 (4,103,838) 

Arising on acquisition of a subsidiary 712,683 

Translation reserves 8,933 

18,492,544 

Impairment loss recognised in the year ended March 31, 2006 (36,231) 

At March 31, 2006 18,456,313 

Amortisation: 

At April 1, 2005 4,103,838 

Elimination of amortisation accumulated prior 

to the adoption of FRS 103 (4,103,838) 

– 

Carrying amount as at March 31, 2005 17,770,928 

Amortisation for year ended March 31, 2005 1,444,062 

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (“CGUs”) that are 

expected to benefit from that business combination. Before recognition of impairment losses, the carrying amount of 

goodwill had been allocated as follows: 

Group 

2006 2005 

$ $ 

Single entities: 

Ecquaria Ltd 3,906,544 3,906,544 

IT Holdings, Inc. 2,084,716 1,918,883 

IT Holdings, Inc.’s subsidiary 138,673 130,006 

MDCL – Frontline (China) Ltd 6,599,582 6,599,582 

Accel Frontline Ltd 5,484,798 4,936,560 

Accel Frontline Ltd’s subsidiary 36,231 37,353 

Frontline Outsourcing (Asia) Pte Ltd 242,000 242,000 

18,492,544 17,770,928 

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be 

impaired. 

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the 

value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices 

and direct costs during the period. Management estimates discount rates using pre-tax rates specific to the CGUs. 

The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past 

practices and expectations of future changes in the market.

80 





20. Intangible assets 

Software 

Computer License Intellectual Client under 

2006 Software fee property contracts Development Total 

$ $ $ $ $ $ 

Cost 

As at 1 April 2005 756,653 217,383 1,200,000 600,000 80,658 2,854,694 

Reclassification – – 294,000 (294,000) 55,871 55,871 

Additions 752,661 – – – 298,272 1,050,933 

Translation difference (25,463) 2,117 – – – (23,346) 

As at 31 March 2006 1,483,851 219,500 1,494,000 306,000 434,801 3,938,152 

Accumulated amortisation 

As at 1 April 2005 484,674 44,183 50,000 83,333 – 662,190 

Reclassification – – 40,833 (40,833) – – 

Additions 204,702 22,050 99,600 102,000 – 428,352 

Translation difference (21,587) (383) – – – (21,970) 

As at 31 March 2006 667,789 65,850 190,433 144,500 – 1,068,572 

Net book value 

As at 31 March 2006 816,062 153,650 1,303,567 161,500 434,801 2,869,580 

Software 

Computer License Intellectual Client under 

2005 Software fee property contracts Development Total 

$ $ $ $ $ $ 

Cost 

As at 1 April 2004 – 222,092 – – – 222,092 

Arising from acquisition 

of subsidiary 757,420 – 1,200,000 600,000 80,658 2,638,078 

Translation difference (767) (4,709) – – – (5,476) 

As at 31 March 2005 756,653 217,383 1,200,000 600,000 80,658 2,854,694 

Accumulated amortisation 

As at 1 April 2004 – 22,742 – – – 22,742 

Charge for the year – 22,033 – – – 22,033 

Arising from acquisition 

of subsidiary 484,674 – 50,000 83,333 – 618,007 

Translation difference – (592) – – – (592) 

As at 31 March 2005 484,674 44,183 50,000 83,333 – 662,190 

Net book value 

As at 31 March 2005 271,979 173,200 1,150,000 516,667 80,658 2,192,504





21. Finance lease receivable 

Finance leases include non-cancellable leases of computers, peripherals and accessories. The terms of the lease 

agreements do not provide for any non-guaranteed residual value or contingent rents. 

The reconciliation between the gross investment and the present value of minimum lease payment receivable is as 

follows: 

Group 

2006 2005 

Minimum Present value Minimum Present value 

Payments payments payments payments 

$ $ $ $ 

Not later than 1 year 2,173,727 1,833,267 2,823,701 2,157,542 

Between 1 year to 5 years 1,948,286 1,816,939 4,288,251 3,797,416 

Total minimum lease payments 4,122,013 3,650,206 7,111,952 5,954,958 

Less: Amounts representing finance charge (471,807) – (1,156,994) – 

Present value of minimum lease payments 3,650,206 3,650,206 5,954,958 5,954,958 

22. Other receivables 

Group 

2006 2005 

$ $ 

Prepayments – maintenance costs 300,274 1,036,764 

Deposits 1,525,082 1,920,809 

Loans to a related party – 383,927 

Deferred charges 785,203 230,259 

2,610,559 3,571,759 

Loans to a related party were repayable by July 2010. Interest was earned at the borrowing rate of 7% per annum. 

The loan has been fully paid during the year. 

Deposits mainly relate to rental deposits with lessors, third party suppliers and refundable deposits with service 

providers. 

Deferred charges relate to various cash performance bonds paid by a subsidiary prior to the start of a certain project or 

before joining a bid. 

23. Fixed deposits 

Fixed deposits which will be withdrawn only upon maturity on 3 March 2008, earn interest of up to 1.75% 

(2005: 1.75%) per annum.

82 





24. Inventories 

Inventories are stated after making specific allowance for stock obsolescence of $21,219 (2005: $884,138). 

25. Trade and other receivables 

Group 

Company 

2006 2005 2006 2005 

$ $ $ $ 

Trade receivables 

– affiliated companies 354,676 836,956 – – 

– corporate shareholders 2,158,245 2,629,206 – – 

– third party 82,300,685 71,057,902 – – 

Less allowance for doubtful trade receivables (2,270,260) (2,151,805) – – 

Trade receivables, net 82,543,346 72,372,259 – – 

Deposits 144,950 73,391 15,888 15,888 

Prepayments 

– maintenance cost 3,797,485 5,015,660 – – 

– others 3,122,676 2,424,368 114,797 41,944 

Advances to employees 123,947 45,542 8,357 – 

Loan to a subsidiary – – 1,399,846 370,111 

Loan to affiliated companies 349,195 390,337 349,195 390,337 

Tax recoverable 569,530 67,377 – – 

Other receivables 8,605,707 3,874,015 191,854 94,155 

Non-trade receivables from 

– subsidiaries – – 4,865,303 6,090,700 

– associated companies 229,758 167,229 229,758 166,105 

– affiliated companies 10,900 14,905 10,900 1,444 

Less allowance for doubtful non-trade receivables (528,335) (508,252) – – 

98,969,159 83,936,831 7,185,898 7,170,684 

The non-trade receivables from associated companies, affiliated companies and subsidiaries of the Company are 

unsecured, interest free and are repayable on demand. 

Prepaid maintenance costs relate to maintenance fees paid in advance to a third party for the contracted period and 

are charged to the income statement over the contractual period as the services are performed by the third party.





25. Trade and other receivables (cont’d) 

Trade receivables are denominated in the following currencies: 

Group 

2006 2005 

$ $ 

India Rupee 26,746,680 22,599,020 

Philippines Peso 11,107,093 10,071,122 

Singapore Dollar 30,886,745 21,391,095 

United States Dollar 8,987,251 10,484,490 

Other significant currencies 7,085,837 9,978,337 

84,813,606 74,524,064 

26. Cash and cash equivalents 

Group 

Company 

2006 2005 2006 2005 

$ $ $ $ 

Cash and bank balances 23,822,312 30,156,294 1,701,337 4,272,702 

Fixed deposits (unpledged portion) 2,975,208 552,057 – – 

Fixed deposits (pledged portion) 1,949,487 866,000 – – 

28,747,007 31,574,351 1,701,337 4,272,702 

Fixed deposits mature within 1 to 12 months (2005: 1 to 12 months) and have interest rates ranging from 2.8% to 5.5% 

(2005: 2.60% to 5.00%) per annum. 

The Group has pledged its fixed deposits to the banks for banking facilities granted. 

Cash and bank balances are denominated in the following currencies: 

Group 

Company 

2006 2005 2006 2005 

$ $ $ $ 

India Rupee 2,332,733 560,684 – – 

Philippines Peso 1,199,321 601,097 – – 

Singapore Dollar 15,635,143 26,955,277 1,044,551 3,362,533 

United States Dollar 6,607,237 2,349,575 656,786 910,169 

Other significant currencies 2,972,573 1,107,718 – – 

28,747,007 31,574,351 1,701,337 4,272,702

84 





27. Trade and other payables 

The non-trade payables to affiliated companies, directors, directors of subsidiaries and subsidiaries of the Company are 

unsecured, interest free and are repayable on demand. 

Group 

Company 

2006 2005 2006 2005 

$ $ $ $ 

Trade payables 

– associated companies – 31,500 – – 

– affiliated companies 174,612 50,227 101,068 – 

– third party 38,136,920 31,188,261 – – 

Other payables 3,531,044 3,388,817 70,097 155,202 

Accrued operating expenses 13,014,707 10,714,081 834,281 469,792 

Accrual for Investment 798,321 – 892,650 – 

Unearned revenue 12,876,766 10,295,852 – – 

Deposits for future stock subscription – 614,000 – – 

Customers deposits – 3,030,008 – – 

Non-trade payables to 

– affiliated companies 271,149 265,423 15,383 87,893 

– directors 84,000 30,000 84,000 30,000 

– subsidiaries – – 7,690,330 4,293,052 

68,887,519 59,608,169 9,687,809 5,035,939 

Trade payables are denominated in the following currencies: 

Group 

2006 2005 

$ $ 

India Rupee 4,308,633 2,895,742 

Philippines Peso 3,288,626 2,768,640 

Singapore Dollar 14,788,483 2,598,528 

United States Dollar 14,437,274 20,176,263 

Other significant currencies 1,488,516 2,830,815 

38,311,532 31,269,988





28. Hire purchase creditors 

Group 

Payments Interest Principal 

$ $ $ 

2006 

Not later than 1 year 2,497,525 275,865 2,221,660 

Between 1 year to 5 years 2,443,916 178,536 2,265,380 

4,941,441 454,401 4,487,040 

2005 

Not later than 1 year 1,843,316 81,682 1,761,634 

Between 1 year to 5 years 3,101,563 48,771 3,052,792 

4,944,879 130,453 4,814,426 

Hire purchase agreements range from 2 to 7 years. Hire purchase agreements do not contain restrictions concerning 

dividends, additional debt or further leasing. 

Hire purchases are secured by finance lease receivable (Note 21) and mature in October 2009. 

29. Borrowings and loans 

Group 

2006 2005 

$ $ 

Promissory notes issued to financial institutions (unsecured) 2,542,336 3,662,511 

Short term loans from financial institutions (unsecured) 499,546 5,301,371 

Bills payable to a bank (secured) 21,694,645 12,283,921 

24,736,527 21,247,803 

Borrowings and loans are in the operating subsidiaries of India, Malaysia and Philippines. These include working 

capital loans, notes and bills payable. 

The promissory notes and short term loans are unsecured and mature within 1 year (2005: within 1 year) and bear 

interest rates ranging from 12.25% to 15% (2005: 7.50% to 16.75%) per annum. 

Bills payable to a bank are secured by letters of credit from financial institutions, fixed deposits pledged (Note 26) and 

corporate guarantees and bear interest ranging from 4.5% to 13.25% (2005: 4.00% to 15.50%) per annum.

86 





30. Issued and paid-up capital 

Group and Company 

2006 2005 

$ $ 

Issued and fully paid 

At beginning of financial year 824,044,945 (2005: 819,907,592) 

ordinary shares 41,202,248 40,995,380 

Issuance of 4,137,353 ordinary shares – 206,868 

Transfer from: 

– Share premium 43,861,517 – 

– Capital redemption reserve 50,000 – 

At end of financial year 824,044,945 ordinary shares 85,113,765 41,202,248 

Share premium 

At beginning of financial year 43,861,517 43,477,795 

Issuance of ordinary shares at a premium – 383,722 

Transfer to issued and fully paid-up capital (43,861,517) – 

At end of financial year – 43,861,517 

During the financial year, the balances standing to the credit of the share premium and capital redemption reserve 

accounts were transferred to the share capital account in accordance with the Companies (Amendments) Act of 2005. 

Frontline Technologies Corporation Ltd Share Option Scheme 2000 (“the Scheme”) 

The Scheme was approved by the members of the Company at an Extraordinary General Meeting held on 19 September 

2000. The Scheme provides an opportunity for employees and executive and non-executive directors of the Group to 

participate in the share capital of the Company. The Scheme serves to motivate employees to optimise their performance 

standards, dedication and efficiency and promote the retention of employees. 

The Scheme is administered by the Compensation Committee comprising the following directors: 

Harrison Wang Hong She (Chairman) 

Tay Swee Sze 


On 28 January 2002, the Company issued 104,860,000 options to the employees of the Group, to subscribe for ordinary 

shares of the Company at a discounted price of $0.22 per share. The exercise period of the option is from 28 January 

2004, where up to 33% of options granted to the employees may be exercised, to 28 January 2006 where 100% of the 

options may be exercised. Options granted are cancelled when the option holder ceases to be in full-time employment 

of the Company or any corporation in the Group. 

No options were issued during the financial year and none were exercised.





30. Issued and paid-up capital (cont’d) 

Movement in the number of share options outstanding are as follows: 

Group and Company 

2006 2005 

$ $ 

At beginning of financial year 42,473,000 47,771,000 

Cancellation during the year (9,250,000) (5,298,000) 

At end of financial year 33,223,000 42,473,000 

As at 31 March 2006, no options have been granted to directors of the Company, controlling shareholders of the 

Company or associates of the company and no employees have received 5% or more of the total options available 

under the Scheme. 

The options under the Scheme do not entitle the holder to participate in any share issue of any other corporation by 

virtue of the option. As at 31 March 2006, no options have been exercised under this Scheme in the Group. 

31. Reserves 

Group 

Company 

2006 2005 2006 2005 

$ $ $ $ 

Revenue reserve 6,924,623 3,586,983 446,467 766,792 

Translation reserve (2,051,077) (1,735,608) – – 

Capital redemption reserve (Note 30) – 50,000 – 50,000 

4,873,546 1,901,375 446,467 816,792 

32. Related party disclosures 

Other than as disclosed elsewhere, the Group had significant transactions with related parties on terms agreed 

between the parties as follows: 

Group 

2006 2005 

$ $ 

Income 

Sales to affiliated companies 103,245 – 

Sales to related companies of the Company’s corporate shareholders 4,322,905 4,397,081 

Expenses 

Telecommunication charges from an affiliated company 172,583 217,370 

Purchases from an affiliated company 202,480 – 

Rental charges from an affiliated company 4,404 –

88 





33. Commitments and contingent liabilities 

(a) Non-cancellable operating lease commitments 

Group 

2006 2005 

$ $ 

Future minimum lease payments 

– not later than 1 year 1,792,302 2,672,109 

– year through 5 years 3,755,854 3,544,232 

5,548,156 6,216,341 

Lease terms do not contain restrictions concerning dividends, additional debt or further leasing. 

(b) 

Contingent liabailities 

Contingent liabilities not provided for in the financial statements were: 

Group 

2006 2005 

$ $ 

Bank guarantees 

– secured by corporate guarantee 3,000,000 3,000,000 

The bank guarantees are given by the Group for banking facilities granted to an affiliated company. 

(c) 

(d) 

The Company 

The Company has undertaken to provide continuing financial support to certain subsidiaries and an affiliated 

company which have a deficit of shareholders’ fund as at 31 March 2006 of approximately $5,424,115 (2005: 

$4,996,000). The financial support is to enable these companies to operate as a going concern and to meet their 

obligations, for at least 12 months from the date of their latest audited reports. 

Other contingent liabilities 

In the ordinary course of business, a subsidiary in India has unresolved dispute with local taxation authorities 

amounting to $412,591 (2005: $459,173) as at 31 March 2006. Management has not accrued for this amount in 

the balance sheets as at 31 March 2006 as management does not expect a liability to arise from this dispute. 

34. Segment information 

(a) Business segments 

The Group’s business is categorised into 3 main areas, namely: 

1. Information Technology (“IT”) Infrastructure 

2. IT Outsourcing 

3. IT Consulting and Implementation Services 

The IT infrastructure business relates to sales and services of mission-critical enterprise servers, workgroup 

servers, storage, networking systems as well as software licence sales from our technology partners. 

IT Outsourcing comprises the provision of infrastructure and application management services, including 24 x 7 

managed services, and business process outsourcing services.





34. Segment information (cont’d) 

(a) Business segments (cont’d) 

IT Consulting and implementation services encompasses the provision of transformation consulting in 

outsourcing; strategy and process consulting in areas of IT architecture, security & software; enterprise software 

application development and implementation; IT infrastructure and enterprise security services. 

Inter-segment pricing is on arm’s length basis. 

In 2005, the Group had presented 4 segments which included Investment Holdings, IT Infrastructure, IT Outsourcing 

and IT Consulting and Implementation Services. In 2006, the Group has refined its business segments to 3 main 

areas to better reflect the Group’s focus and operations in the IT industry. These are as follow: 

IT Consulting 

IT IT & Imple- 

2006 Infrastructure Outsourcing mentation Eliminations Group 

$’000 $’000 $’000 $’000 $’000 

External sales 90,580 61,514 16,969 – 169,063 

Inter-segmental sales 266 453 117 (836) – 

169,063 

Profit (loss) from operations 2,991 5,904 1,404 (1,153) 9,146 

Financial income 1,215 

Financial expenses (2,383) 

Profit before share of results of associated companies 7,978 

Share of results of associated companies 3,132 

Profit from operations before tax 11,110 

Tax (1,812) 

Profit after tax 9,298 

Minority interest (2,005) 

Profit attributable to equity holders of the Company 7,293 

Segment assets 60,536 28,344 8,311 – 97,191 

Associated companies 23,864 

Unallocated assets 84,353 

Consolidated total assets 205,408 

Segment liabilities 25,985 17,862 6,091 (16,670) 33,268 

Unallocated liabilities 67,805 

Consolidated total liabilities 101,073 

Capital expenditure 2,248 1,903 278 – 4,429 

Depreciation and amortisation 1,976 1,906 223 – 4,105 

Other non-cash expenses (income) 606 498 132 – 1,236

90 





34. Segment information (cont’d) 

(a) Business segments (cont’d) 

IT Consulting 

IT IT & Imple- 

2005 Infrastructure Outsourcing mentation Eliminations Group 

$’000 $’000 $’000 $’000 $’000 

External sales 95,836 44,022 7,606 – 147,464 

Inter-segmental sales 451 75 – (526) – 

147,464 

Profit (loss) from operations 4,996 2,492 981 (105) 8,364 

Financial income 431 

Financial expenses (2,720) 

Profit before share of results of associated companies 6,075 

Share of results of associated companies 2,134 

Profit from operations before tax 8,209 

Tax (1,323) 

Profit after tax 6,886 

Minority interest (1,732) 

Profit attributable to equity holders of the Company 5,154 

Segment assets 61,139 21,789 4,992 – 87,920 

Associated companies 21,167 

Unallocated assets 84,545 

Consolidated total assets 193,632 

Segment liabilities 26,750 13,690 3,640 (15,018) 29,062 

Unallocated liabilities 61,222 

Consolidated total liabilities 90,284 

Capital expenditure 2,182 1,481 502 – 4,165 

Depreciation and amortisation 2,911 1,802 463 – 5,176 

Other non-cash expenses (income) 2,061 805 212 – 3,078 

(b) 

Geographical segments 

The Group’s businesses segments are managed through three geographical areas, namely Singapore, India 

and other ASEAN countries. Turnover is based on the location of customers. Assets and additions to plant and 

equipment are based on the location of those assets. 

Turnover Assets Capital expenditure 

2006 2005 2006 2005 2006 2005 

$’000 $’000 $’000 $’000 $’000 $’000 

Singapore 79,673 68,737 110,100 108,109 579 586 

India 62,807 46,205 54,411 46,341 1,520 582 

Other ASEAN countries 26,583 32,522 40,897 39,182 2,330 2,997 

169,063 147,464 205,408 193,632 4,429 4,165





35. Directors’ remuneration 

The number of directors (including two non-executive directors who resigned during the last financial year) in the 

various remuneration bands is as follows: 

2006 2005 

Non 

Non 

Executive executive Executive executive 

director directors Total directors directors Total 

$500,000 and above – – – – – – 

$250,000 to $499,999 2 – 2 2 – 2 

$0 to $249,999 1 5 6 1 7 8 

3 5 8 3 7 10 

36. Financial instruments 

(a) Financial risk management objectives and policies 

The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign currency 

risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are 

summarised below. 

(i) 

Interest rate risk 

The Group obtains additional financing through bank borrowings and leasing arrangements. The Group’s 

policy is to obtain the most favourable interest rates available without increasing its foreign currency 

exposure. 

Surplus funds are placed with reputable banks or invested in bonds to generate some interest income for 

the Group. 

Information relating to the Group’s interest rate exposure is also disclosed in the respective notes to the 

financial statements. 

(ii) 

(iii) 

Liquidity risk 

The Group monitors and maintains a level of cash and cash equivalents deemed adequate by management 

to finance the Group’s operations and mitigate the effects of fluctuation in cash flows. 

Foreign exchange risk 

The Group incurs foreign exchange risk on sales and purchases that are denominated in currencies other 

than Singapore Dollars. The Group also has exposures to foreign currency risk as a result of its operations 

in several Asia countries. The primary currencies giving rise to this risk are United States Dollars, Malaysian 

Ringgit, Philippine Peso and Thai Baht. 

It is the Group’s policy not to normally enter into derivative foreign exchange contracts and foreign currency 

borrowings to hedge its foreign currency risk. 

Foreign currencies received are kept in a foreign currency bank accounts and converted to SGD on a need-to 

basis so as to minimise the foreign exchange exposure. The Group also manages foreign exchange risk by 

closely monitoring the timing of the inception and settlement of transaction.

92 





36. Financial instruments (cont’d) 

(a) Financial risk management objectives and policies (cont’d) 

(iv) Credit risk 

The carrying amount of cash and cash equivalents and trade and other receivables represent the Group’s 

maximum exposure to credit risk in relation to financial assets. No other financial assets carrying a significant 

exposure to credit risk. 

Cash and cash equivalents are placed with reputable financial institutions. 

The Group has no significant concentrations of credit risk. 

(b) 

Fair value 

Other than as disclosed in note 17, the carrying amounts of the financial assets and liabilities recorded in the 

financial statements of the Group and the Company approximate their fair values. 

37. Events occurring after balance sheet date 

On 1 April 2006, the Company increased its investment in one of its subsidiaries, Accel Frontline Limited (“AFL”) from 

51% to 54.5% for a cash consideration of $1,897,373. 

On 1 April 2006, the Company acquired 80.2% equity interest in Dalian BHR Consultancy Services (“DBHR”) from PSA 

China Pte Ltd for a cash consideration of $1,113,889. The remaining 19.8% were acquired by one of its associated 

companies, MDCL-Frontline (China) Ltd for a cash consideration of $275,000. 

On 1 April 2006, the Company divested 3.5% equity interest in Frontline Technologies Corporation (M) Sdn Bhd 

(“FTCM”) to the key management of the FTCM for a cash consideration of $153,650. 

On 1 June 2006, the Company increased its investment in one of its associated companies, Ecquaria Limited 

(“Ecquaria”) from 30% to 49.99%. The new issue and allotment of 78,906 shares by Ecquaria to Frontline is pursuant to 

the subscription agreement between the parties dated 7 November 2003. 

38. Comparative figures 

Certain comparative figures have been reclassified to conform with current year’s presentation. 

Group 

Company 

Restated Reported Restated Reported 

2006 2005 2006 2005 

$ $ $ $ 

Balance sheet 

Club membership 216,020 – 199,000 – 

Other investments – 549,440 – 521,726 

Available-for-sale investments 333,420 – 322,726 – 

39. Authorisation of financial statements 

The financial statements for the year ended 31 March 2006 were authorised for issue in accordance with a resolution of 

the directors on 4 July 2006.



> notice of annual general meeting 

FRONTLINE TECHNOLOGIES CORPORATION LTD 

Company Registration No. 199801489G 

(Incorporated in the Republic of Singapore) 

(“Company”) 

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Keppel Hall, Keppel Club, 

Level 4, 10 Bukit Chermin Road, Singapore 109918 on 28 July 2006 at 10.30am to transact the following business: 

AS ORDINARY BUSINESS 

1. To receive and adopt the Audited Accounts for the year ended 31 March 2006, the Directors’ Report 

and the Auditors’ Report thereon. Resolution 1 

2. To re-elect Ms Shirley Wong Swee Ping, who is retiring by rotation as a director of the Company in 

accordance with Article 104 of the Company’s Articles of Association and who being eligible, offers 

herself for re-election. Resolution 2 

3. To re-elect Dr Harrison Wang Hong She, who is retiring by rotation as a director of the Company in 

accordance with Article 104 of the Company’s Articles of Association and who being eligible, offers 

himself for re-election. Resolution 3 

4. To approve the payment of Directors’ Fees of S$84,000 for the year ended 31 March 2006. Resolution 4 

5. To re-appoint Messrs Baker Tilly TFWLCL as auditors of the Company and to authorise the Directors to 

fix their remuneration. Resolution 5 

AS SPECIAL BUSINESS 

To consider and, if thought fit, to approve, with or without modification, the following resolutions which are to be proposed 

as Ordinary Resolutions. 

6. Authority to Grant Options and Issue Shares Under Frontline Technologies Corporation Ltd 

Share Option Scheme 2000 Resolution 6 

That authority be and is hereby given to the Directors to offer and grant options in accordance with 

the rules and terms of Frontline Technologies Corporation Ltd Share Option Scheme 2000 (“Share 

Option Scheme”) and to allot and issue from time to time such number of shares in the Company as 

may be required to be allotted and issued pursuant to the exercise of options under the Share Option 

Scheme, provided that the aggregate number of shares to be issued pursuant to the Share Option 

Scheme does not exceed 15% of the issued share capital of the Company from time to time.

94 




7. The Proposed Renewal of the Shares Purchase Mandate Resolution 7 

That, pursuant to Article 54(2) of the Articles of Association of the Company, the Directors of the Company 

be and are hereby authorised to make purchases of Shares from time to time (whether by way of market 

purchases or off-market purchases on an equal access scheme) of up to 10 per cent of the issued ordinary 

share capital of the Company ascertained as at the date of this annual general meeting of the Company at 

the price of up to but not exceeding the Maximum Price, in accordance with the “Guidelines on Shares 

Purchases” set out in Appendix 1 of this Notice and this mandate shall, unless revoked or varied by the 

Company in general meeting, continue in force until the date that the next annual general meeting of the 

Company is held or is required by law to be held, whichever is the earlier. 

8. The Proposed Shares Issue Mandate Resolution 8 

That authority be and is hereby given to the Directors of the Company to: 

(a) 

(i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; 

and/or (ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or 

would require shares to be issued, including but not limited to the creation and issue of (as well as 

adjustments to) warrants, debentures or other instruments convertible into shares, at any time and 

upon such terms and conditions and for such purposes and to such persons as the Directors may in 

their absolute discretion deem fit; and(b) notwithstanding the authority conferred by this Resolution 

may have ceased to be in force, issue shares in pursuance of any Instrument made or granted by the 

Directors while this Resolution was in force, Provided that: 

(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be 

issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 

50 per cent of the issued share capital of the Company (as calculated in accordance with subparagraph 

(2) below), of which the aggregate number of shares to be issued other than on a pro 

rata basis to shareholders of the Company (including shares to be issued in pursuance of 

Instruments made or granted pursuant to this Resolution) does not exceed 20 per cent of the 

issued share capital of the Company (as calculated in accordance with sub paragraph (2) below); 

(2) subject to such manner of calculation as may be prescribed by the SGX-ST for the purpose of 

determining the aggregate number of shares that may be issued under sub-paragraph (1) 

above, the percentage of issued share capital shall be based on the issued share capital of the 

Company at the time this Resolution is passed, after adjusting for: (i) new shares arising from the 

conversion or exercise of any convertible securities or share options or vesting of share awards 

which are outstanding or subsisting at the time this Resolution is passed; and (ii) any 

subsequent consolidation or subdivision of shares; 

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the 

provisions of the Listing Manual of the SGX-ST for the time being in force (unless such 

compliance has been waived by the SGX ST) and the Articles of Association for the time being 

of the Company; and 

(4) unless revoked or varied by the Company in General Meeting the authority conferred by this 

Resolution shall continue in force until the conclusion of the next Annual General Meeting of 

the Company or the date by which the next Annual General Meeting of the Company is required 

by law to be held, whichever is the earlier.




OTHER BUSINESS 

9. To transact any other business that may properly be transacted at an Annual General Meeting of the Company. 

BY ORDER OF THE BOARD 

Tan Bak Leng 

Company Secretary 

Singapore 

14 July 2006 

Note: 

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy to vote in his/her stead. 

2. A proxy need not be a member of the Company. 

3. The instrument appointing a proxy must be deposited at the registered office of the Company at 750 Chai Chee Road #02-01/03 The Oasis, 

Technopark@Chai Chee, Singapore 469000, not later than 48 hours before the time appointed for the Meeting.

96 



> explanatory notes to notice of annual general meeting (“notice”) 

1. Definitions and Interpretation 

For the purpose of this Notice, the following definitions have, where appropriate, been used: 

“2002 Circular” The Company’s circular to Shareholders dated 13 August 2002 regarding inter 

alia the Shares Purchase Mandate. 

“2002 EGM” The extraordinary general meeting of Frontline held on 27 August 2002. 

“2005 AGM” The annual general meeting of Frontline held on 12 August 2005. 

“Shares Purchase Mandate” 

“AGM” 

“Act” or “Companies Act” 

“Board” 

“CDP” 

“Company” or “Frontline” 

“Council” or “SIC” 

“Directors” 

The mandate for Frontline to purchase or otherwise acquire its Shares. 

Annual General Meeting of the Company. 

Companies Act (Cap.50) of Singapore. 

The board of the directors of the Company. 

The Central Depository (Pte) Limited. 

Frontline Technologies Corporation Ltd. 

The Securities Industry Council. 

Directors of the Company as at the date of this Notice. 

“Frontline Technologies 

The share option scheme adopted at an Extraordinary General Meeting of the 

Corporation Ltd Share Company on 19 September 2000. 

Option Scheme 2000” 

“Group” 

“Latest Practicable Date” 

“Market Day” 

“Market Purchases” 

“Maximum Price” 

“month” 

The Company and its subsidiaries. 

28 June 2006, being the latest practicable date prior to the printing of this Notice. 

A day on which the SGX-ST is open for trading in securities. 

Market acquisitions of Shares on the SGX-ST undertaken by the Company 

during the Relevant Period in accordance with the Act and, a “Market Purchase” 

shall be construed accordingly. For the purposes of this definition, a market 

acquisition means a purchase transacted through the Central Limit Order Book 

trading system. 

The maximum price at which (i) the Shares can be purchased pursuant to the 

Shares Purchase Mandate (ii) deemed to be adjusted for any corporate action 

that occurs after the relevant 5-day period; and in the case of an Off-Market 

Purchase, immediately preceding the date of offer by the Company, as the case 

may be. 

Calendar month.




“Listing Manual” 

“NTA” 

Off-Market Purchases” 

“Offeree Shareholders” 

“Relevant Period” 

“Required Price” 

“Securities Account” 

“SGX-ST” 

“Shares” 

“Shareholders” 

“Shares Issue Mandate” 

“Shares Purchases” 

The listing manual of the SGX-ST, which became effective on 1 July 20 including 

any amendments made thereto up to the date of this Notice. 

Net tangible assets. 

Off-market acquisitions of Shares undertaken by the Company during the 

Relevant Period in accordance with an equal access scheme as defined in 

Section 76C(6) of the Act by issuing an offer document to all shareholders in 

compliance with rule 885 of the Listing Manual. 

Shareholders holding Shares at the time of an offer of Shares Purchase, and an 

“Offeree Shareholder” shall be construed accordingly. 

The period commencing from the date the Shares Purchase Mandate is 

conferred by the Company in general meeting at this AGM and expiring on the 

earlier of the date the next annual general meeting of the Company is held or is 

required by law to be held, or the date the said mandate is revoked or varied by 

the Company in general meeting. 

In relation to the offer required to be made under the provisions of Rule 14.1 of 

the alternative at a price in accordance with Rule 14.3 which is the highest of the 

highest price paid by the offerers and/or person(s) acting in concert with them 

for the Company’s Shares (i) during the offer period and within the preceding 

6 months, (ii) acquired through the exercise of instruments convertible into 

securities which carry voting rights within 6 months of the offer and during the 

offer period, or (iii) acquired through the exercise of rights to subscribe for, and 

options in respect of, securities which carry voting rights within 6 months of the 

offer or during the offer period; or at such price as determined by Council under 

14.3 of the Take-over Code. 

A securities account maintained by a depositor with CDP but does not include a 

securities sub-account. 

Singapore Exchange Securities Trading Limited. 

Ordinary shares in the capital of the Company. 

Persons who are registered as holders of the Shares except where the registered 

holder is CDP, in which case the term “Shareholders” shall in relation to such 

Shares mean the Depositors whose securities accounts with CDP are credited 

with the Shares. 

The mandate to empower the Directors to issue Shares in the terms set out in 

Ordinary Resolution 8 and below. 

Off-Market Purchases or Market Purchases undertaken by the Company during 

the Relevant Period in accordance with the Act and, a “Shares Purchase” shall be 

construed accordingly.

98 




“Shares Purchase Mandate” 

“Subsidiaries” 

“Substantial Shareholder” 

“Take-over Code” 

“S$” or “cents” 

The mandate to empower the Directors to make Shares Purchases within the 

Relevant Period of up to ten per cent. (10%) of the issued ordinary share capital 

of the Company (ascertained as at the date of the last annual general meeting 

of the Company or the date of the EGM, whichever is the higher) at the price of 

up to but not exceeding the Maximum Price, in accordance with the “Guidelines 

on Shares Purchases” set out in Appendix 1 of this Notice and the rules of the 

SGX-ST. 

The subsidiaries of a company (as defined in Section 5 of the Act) and 

“Subsidiary” shall be construed accordingly. 

A person who has an interest in the Shares the nominal amount of which is not 

less than five percent. (5%) of the nominal amount of all the voting shares of 

the Company. 

Singapore Code on Take-over and Mergers Revised Edition, effective 1 January 

2002, as the same may be modified, supplemented or amended from time to 

time. 

Singapore dollars and cents respectively, unless otherwise stated. 

“%” or “per cent.” Per centum or percentage. 

1.2 The terms “Depositor” and “Depository Register” shall have the meanings ascribed to them respectively by 

Section 130A of the Act. 

1.3 Words importing the singular shall, where applicable, include the plural and vice versa and words importing the 

masculine gender shall, where applicable, include the feminine and neuter genders. 

1.4 Any reference in this Notice to any enactment is a reference to that enactment as for the time being amended or reenacted. 

Any word defined under the Act or any statutory modification thereof and used in this Notice shall have the 

meaning assigned to it under the said Act. 

1.5 Any reference to a time of a day in this Notice is a reference to Singapore Standard Time. 

2. Ordinary Resolution No. 2: Re-Election of Director 

2.1 Ms Shirley Wong Swee Ping retires as a Director under Article 104 of the Company’s Articles of Association. Ms Shirley 

Wong Swee Ping is offering herself for re-election. If re-elected as a Director of the Company, Ms Shirley Wong Swee 

Ping shall remain as the Vice-President and director of the Company.




3. Ordinary Resolution No. 3: Re-Election of Director 

3.1 Dr Harrison Wang Hong She retires as a Director under Article 104 of the Company’s Articles of Association. Dr Wang 

is offering himself for re-election. If re-elected as a Director of the Company, Dr Wang shall remain as an independent 

director of the Company and the chairman of its Compensation Committee. 

4. Ordinary Resolution No. 4: Directors Fees 

4.1 The proposed Directors’ Fees of S$84,000 comprise of the following: 

a) A basic retainer fee of S$12,000 for each of the five non-executive directors of the Company. 

b) A fee of S$24,000 for the chairman of the audit committee. 

5. Ordinary Resolution No. 5: Re-Appointment of Auditors 

5.1 Messrs Baker Tilly TFWLCL were first appointed auditors to the Company at the extraordinary general meeting of 17 

February 2006. They are to hold office until this annual general meeting unless re-appointed. 

6. Ordinary Resolution No. 6: Authority to grant options and issue shares under Frontline Technologies 

Corporation Ltd Share Option Scheme 2000 

6.1 This resolution is to empower the Directors of the Company to allot and issue shares in the Company pursuant to 

the exercise of options granted or to be granted under Frontline Technologies Corporation Ltd Share Option Scheme 

2000. 

6.2 There were no such options exercised during the financial year ended 31st March 2006. 

7. Ordinary Resolution No. 7: The Proposed Renewal of the Shares Purchase Mandate 

7.1 Background 

The Shareholders had at the 2002 EGM inter alia approved the Shares Purchase Mandate to enable Frontline to 

purchase or otherwise acquire its Shares. The authority and limitations on the Shares Purchase Mandate were set 

out in the 2002 Circular and the Ordinary Resolution set out in the Notice of the 2002 EGM. The Shares Purchase 

Mandate was last renewed upon the passing of the Ordinary Resolution at the 2005 AGM and expires upon this AGM. 

Accordingly, the Directors propose that the Share Purchase Mandate be renewed at this AGM. 

7.2 Authority and Limits. 

The authority and limitations placed on the Shares Purchase Mandate, if renewed at this AGM, are similar to those 

previously approved by Shareholders at the 2005 AGM.

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7.3 Approval Sought. 

Shareholders’ approval is sought to renew the mandate for the Directors to make Shares Purchases from time to time 

within the Relevant Period in accordance with the Companies Act (Cap 50) of up to ten per cent. (10%) of the issued 

ordinary share capital of the Company ascertained as at the date of this AGM at the price of up to but not exceeding 

the Maximum Price in accordance with the “Guidelines on Shares Purchases” set out in Appendix 1 of this Notice 

and the rules of the SGX-ST. The authority conferred on the Directors by the proposed Shares Purchase Mandate to 

purchase Shares shall continue in force for the Relevant Period. 

7.4 Regulatory Updates 

The Company may purchase Shares by way of Off-Market Purchases and/or Market Purchases, as described in the 

“Guidelines on Share Purchases” set out in Appendix 1. In the event that subsequent to the EGM, there are new 

rules, regulations, directives or laws enacted or promulgated by the relevant competent authorities including 

but not limited to the SGX-ST and the Council (hereinafter, collectively referred to as the “Further Rules”) that 

augment, supplement or vary the existing provisions governing provisions set out in the Companies Act and/or the 

Listing Manual, the Company shall, to the extent that the Further Rules impact on the Shares Purchase Mandate, 

disseminate to the public by announcements), a Memorandum setting out such Further Rules and the extent to 

which the Shares Purchase Mandate is affected by such Further Rules. In such an event, the Company shall not 

undertake any purchase of Shares until such a Memorandum has been publicly disseminated. The Company does 

not intend to set up a special trading counter for the purpose of the Shares Purchases. 

7.5 Rationale 

As previously stated in the 2002 Circular, the proposed Shares Purchase Mandate will: 

(a) 

(b) 

(c) 

provide Directors with the flexibility to purchase Shares when circumstances permit, with the objective of 

enhancing the earnings per share of the Company and its Subsidiaries. Such flexibility will also allow the 

Directors to better manage the Company’s capital structure and cash reserves, and to return surplus cash in 

excess of the Group’s needs; 

provide Directors with the opportunity to purchase Shares when the Shares are under-valued, and help buffer 

short-term share price volatility and off-set the effects of short-term speculators and investors. This will, in turn, 

bolster shareholder confidence; 

provide the Company with an efficient mechanism to enhance returns to Shareholders (including the earnings 

per share of the Group) when circumstances permit. Shares purchases will only be made when the Directors 

believe that they are beneficial to and in the best interests of the Company and its Shareholders.




7.6 Manner of Purchases or Acquisitions of Shares 

Purchases or acquisitions of Shares may be made by way of: 

(a) 

(b) 

Market Purchases transacted on the SGX-ST or any other stock exchange on which the Shares may for the time 

being be listed and quoted (“Other Exchange”) through one or more duly licensed dealers appointed by the 

Company for the purpose; and/or 

Off-Market Purchases effected pursuant to an equal access scheme. 

The Directors may impose such terms and conditions which are not inconsistent with the Share Purchase Mandate, 

the Listing Manual and the Act, as they consider fit in the interests of the Company in connection with or in relation 

to any equal access scheme or schemes. An Off-Market Purchase must, however, satisfy all the following conditions: 

(i) 

(ii) 

(ii) 

offers for the purchase or acquisition of Shares shall be made to every person who holds Shares to purchase or 

acquire the same percentage of their Shares; 

all of those persons shall be given a reasonable opportunity to accept the offers made; and 

the terms of all the offers shall be the same, except that there shall be disregarded (1) differences in 

consideration attributable to the fact that offers may relate to Shares with difference accrued dividend 

entitlements and (2) differences in the offers introduced solely to ensure that each person is left with a whole 

number of Shares. 

If the Company wishes to make an Off-Market Purchase in accordance with an equal access scheme, it will issue an 

offer document containing at least the following information: 

(I) 

(II) 

the terms and conditions of the offer; 

the period and procedures for acceptances; and 

(III) the information required under Rule 883(2). (3), (4) and (5) of the Listing Manual For the avoidance of doubt, there 

shall be no use of contingent purchase contracts. 

7.7 Source of Funds 

In purchasing Shares, the Company may only apply funds legally available for such purchase in accordance with 

its Articles of Association and the applicable laws in Singapore. The Company may not purchase Shares for a 

consideration other than cash or for settlement otherwise in accordance with the trading rules of the SGX-ST. 

Any Shares Purchase undertaken by the Company shall be made out of profits that are available for distribution 

as dividends but not from amounts standing in the Company’s share premium account and capital redemption 

reserve. The Company will use its internal sources of funds (comprising cash and fixed deposits) for the Shares 

Purchases. The Company has not obtained or incurred nor does it intend to obtain or incur any borrowings to finance 

the Shares Purchases. (See Paragraph 7.10 for impact on Company’s financial health)

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7.8 Status of Purchased Shares. 

The listing of all purchased Shares other than Treasury Shares on SGX-ST will be automatically cancelled and the 

relevant certificates for these Shares shall be cancelled and destroyed. Subject to the requirements of the Companies 

Act, (i) the Company’s purchased Shares other than Treasury Shares shall be treated as cancelled and the issued share 

capital of the Company shall be diminished by the nominal value of these cancelled Shares accordingly and (ii) the 

amount by which the Company’s issued share capital is diminished on the cancellation of the purchased Shares shall 

be transferred to the Company’s capital redemption reserve. 

7.9 Treasury Shares. 

Under the Companies Act, Shares purchased or acquired by the Company may be held or dealt with as Treasury Shares. 

Some of the provisions on Treasury Shares under the Companies Act are summarised below: 

a) Maximum Holdings: The number of Shares held as Treasury Shares cannot at any time exceed 10 percent of the 

total number of issued Shares. 

b) Voting and Other Rights: The Company cannot exercise any right in respect of Treasury Shares. In particular, the 

Company cannot exercise any right to attend or vote at meetings and for the purposes of the Companies Act, the 

Company shall be treated as having no right to vote and the Treasury Shares shall be treated as having no voting 

rights. In addition, no dividend may be paid, and no other distribution of the Company’s assets may be made, to 

the Company in respect of Treasury Shares. However, the allotment of shares as fully paid bonus shares in respect 

of Treasury Shares is allowed. Also, a subdivision or consolidation of any Treasury Share into Treasury Shares of a 

smaller amount is allowed so long as the total value of the Treasury Shares after the subdivision or consolidation 

is the same as before. 

c) Disposal and Cancellation: Where Shares are held as Treasury Shares, the Company may at any time: 

i. sell the Treasury Shares for cash; 

ii. 

iii. 

iv. 

transfer the Treasury Shares for the purposes of or pursuant to an employees’ share scheme; 

transfer the Treasury Shares as consideration for the acquisition of shares in or assets of another 

company or assets of a person; 

cancel the Treasury Shares; or 

v. sell, transfer or otherwise use the Treasury Shares for such other purposes as may be prescribed by the 

Minister for Finance. 

7.10 Financial Effects 

The Company is unable to calculate or quantify realistically the impact of purchases or acquisitions of Shares that may 

be made pursuant to the Share Purchase Mandate on the NTA and EPS as the resultant effect would depend on, inter 

alia aggregate number of Shares purchased or acquired, whether the purchase or acquisition is made out of capital 

or profits, the purchase prices paid for such Shares and the amount (if any) borrowed by the Company to fund the 

purchases or acquisitions of Shares and whether the Shares purchased or acquired are cancelled or held as Treasury 

Shares. The Company’s total issued share capital will be diminished by the total number of the Shares purchased by 

the Company and which are cancelled. The NTA of the Group will be reduced by the aggregate purchase price paid by 

the Company for the Shares.




Under the Companies Act, as amended by the Companies Amendment Act 2005, purchases or acquisitions of Shares 

by the Company may be made out of the Company’s capital or profits so long as the Company is solvent. Where the 

consideration paid by the Company for the purchase or acquisition of Shares is made out of profits, such consideration 

(excluding brokerage, stamp duties, commission, applicable goods and services tax and other related expenses) 

will correspondingly reduce the amount available for the distribution of cash dividends by the Company. Where 

the consideration paid by the Company for the purchase or acquisition of Shares is made out of capital, the amount 

available for the distribution of cash dividends by the Company will not be reduced. 

Strictly for illustrative purposes, assuming that the Company holds no Treasury Shares, the impact of the Shares 

Purchases by the Company pursuant to the proposed Shares Purchase Mandate on the Group’s and the Company’s 

financial positions is set out below: 

(a) 

As of the Latest Practicable Date, the Company’s issued share capital comprises 824,044,945 Shares, and the 

exercise in full of the Shares Purchase Mandate would result in the purchase of up to 82,404,495 Shares. Assuming 

that the Maximum Price is S$ 0.126, which is five percent (5%) above the average of the closing prices of the 

Shares (S$0.12) over the five (5) trading days preceding the Latest Practicable Date on which transactions in the 

Shares were recorded, the maximum amount of funds required for the purchase of up to 82,404,495 Shares is 

S$10,382,966. On this assumption, the impact of the Shares Purchases by the Company undertaken in accordance 

with the proposed Shares Purchase Mandate on the Company’s and the Group’s audited financial statements for 

the financial year ended 31 March 2006 is illustrated as follows: 

Group 

Company 

Before After Before After 

Shares Shares Shares Shares 

Purchase Purchase Purchase Purchase 

(S$’000) (S$’000) (S$’000) (S$’000) 

As at 31 March 2006 

Shareholders’ funds 89,987 89,987 85,560 85,560 

NTA (1) 68,662 58,279 85,560 75,177 

Current Assets 141,112 130,729 8,887 – 

Current Liabilities 96,823 96,823 9,687 11,183 

Working Capital 44,289 33,906 (800) (11,183) 

Total liabilities 101,073 101,073 9,687 11,183 

Number of Shares as at 31 March 2006 824,044,945 741,640,450 824,044,945 741,640,450 

Financial Ratios 

NTA Per Share (cents) (1) 8.33 7.86 10.38 10.14 

Earnings Per Share (cents) (2) 0.89 0.98 NA NA 

Gearing (3) 0.32 0.32 NA NA 

Current Ratio (4) 1.46 1.35 0.92 NM

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Notes: 

(1) NTA equals Shareholders’ funds less intangible assets. 

(2) Earnings per share is computed based on the number of shares in issue as at 31 March 2006. 

(3) Gearing equals total bank borrowings and hire purchase creditors of S$24,736,527 and S$4,487,040 for the Group and 

Company respectively, divided by Shareholders’ funds. 

(4) Current ratio equals current assets divided by current liabilities. 

(b) 

(c) 

As at 31 March 2006, the Group and the Company had cash and cash equivalents of S$32,744,007 and S$1,701,337 

respectively. In order to effect a purchase of up to 82,404,495 Shares at the Maximum Price computed at the Latest 

Practicable Date, cash reserves and cash equivalents by the Company of S$10,382,966 will be required. Any shortfall in 

the cash reserve by the Company to effect the purchase of Shares will be made up by utilization of other excess cash 

reserves available within the Group. As illustrated above, the purchase of Shares will have the effect of reducing the 

working capital and the net tangible assets of the Company and Group by the dollar value of the Shares purchased. 

The consolidated NTA per Share as at 31 March 2006 will decrease from 8.33 cents to 7.86 cents. 

Assuming that the Shares Purchases had taken place on 31 March 2006, the consolidated basic earnings per Share of 

the Group for the financial year ended 31 March 2006 would be increased from 0.89 cents per Share to 0.98 cents per 

Share as a result of the reduction in the number of issued Shares. 

SHAREHOLDERS SHOULD NOTE THAT THE FINANCIAL EFFECTS SET OUT ABOVE, BASED ON THE RESPECTIVE 

AFOREMENTIONED ASSUMPTIONS, ARE FOR ILLUSTRATION PURPOSES ONLY. IN PARTICULAR, IT IS IMPORTANT 

TO NOTE THAT THE ABOVE ILLUSTRATION IS BASED ON HISTORICAL FINANCIAL YEAR 2006 NUMBERS AND IS NOT 

NECESSARILY REPRESENTATIVE OF FUTURE FINANCIAL PERFORMANCE. 

(d) 

(e) 

Any Shares Purchase will reduce the Company’s retained earnings by the aggregate sum of the purchase price. As the 

Shares Purchase will reduce the cash reserves of the Group and the Company, there will be a corresponding reduction 

in the current assets and the Shareholders’ funds of the Group and the Company. The gearing ratios of the Group and 

the Company will thus be increased and the current ratios of the Group and the Company will decline. The actual 

impact of the gearing and current ratios will depend on the number of Shares purchased and the prices at which the 

Shares were purchased. 

As at the Latest Practicable Date, the cash and cash equivalents, including fixed deposits and short term 

investments, of the Company and the Group were approximately S$1,200,000 and S$29,000,000 respectively. 

When undertaking any Shares Purchase, the Directors will ensure that: 

(i) the Company and the Group will at all times have adequate working capital to meet its operational 

requirements; 

(ii) any Shares Purchase will be financed by the Company’s distributable profits; and 

(iii) the Group will not obtain nor incur any borrowings to finance any Shares Purchase.




7.11 Tax Implications. 

Under Section 10J of the Income Tax Act and the Interpretation & Practice Note No. 34 published on 31 December 

1998 by the Inland Revenue Authority of Singapore, a company which buys back its own shares using its 

distributable profits will be regarded as having paid a dividend to the shareholders from whom the shares are 

acquired. The Company will thus have to provide for franking of the shares purchased at either the prevailing 

corporate tax rate of 20% (with effect from the Year of Assessment 2006) in the same manner as paying a taxed 

dividend, the amount paid for the shares purchased being the deemed net dividend, or out of its exempt profits, 

the amount paid for the shares purchased being the gross tax exempt dividend. Currently, the Company has 

exempt profits, but if such exempt profits are insufficient for the purposes of the shares purchase, then the 

Company will have to ensure tax is paid in respect of funds used to purchase Shares, as if for a taxable dividend. 

Notwithstanding the fact that the Company will be regarded as paying a dividend, the nature of the payment in 

the hands of Shareholders and whether tax credits, if applicable, can be passed to Shareholders will depend on 

how the Shares Purchase is effected by the Company. The Shares purchased will not have any effect on the income 

tax status of the Company as the Company has sufficient tax-exempt profits to support the Share Purchases. 

SHAREHOLDERS SHOULD NOTE THAT THE FOREGOING IS NOT TO BE REGARDED AS ADVICE ON THE TAX 

POSITION OF ANY SHAREHOLDER. SHAREHOLDERS WHO ARE IN DOUBT AS TO THEIR RESPECTIVE TAX 

POSITIONS OR THE TAX IMPLICATIONS OF THE SHARES PURCHASED BY THE COMPANY, OR WHO MAY BE 

SUBJECT TO TAX WHETHER IN OR OUTSIDE SINGAPORE, SHOULD CONSULT THEIR OWN PROFESSIONAL 

ADVISORS. 

7.12 Take-over Implications. 

Appendix 2 to the Take-over Code contains the Share Buy-Back Guidance Note. The take-over implications arising 

from any purchase or acquisition by the Company of its Shares are set our below. 

7.12.1 Obligation to make a Take-over Offer 

If, as a result of any purchase or acquisition by the Company of the Shares, the proportionate interest in the 

voting capital of the Company of a Shareholder and persons acting in concert with him increases, such increase 

will be treated as an acquisition for the purposes of Rule 14 of the Take-over Code. Consequently, a Shareholder 

or a group of Shareholders acting in concert with a Director would obtain or consolidate effective control of the 

Company and become obliged to make an offer under Rule 14 of the Take-over Code.

106 




7.12.2 Persons Acting in Concert 

Under the Take-over Code, persons acting in concert comprise individuals or companies who, pursuant to an 

agreement or understanding (whether formal or informal), cooperate, through the acquisition by any of them of 

shares in a company to obtain or consolidate effective control of that company. Unless the contrary is established, 

the Take-over Code presumes, inter alia, the following individuals and companies to be persons acting in concert 

with each other: 

(a) 

(b) 

the following companies: 

(i) a company; 

(ii) the parent company of (i); 

(iii) the subsidiaries of (i); 

(iv) the fellow subsidiaries of (i); 

(v) the associated companies of any of (i), (ii), (iii) or (iv); and (vi) companies whose associated companies 

included any of (i),(ii), (iii), (iv) or (v); and 

a company with any of its directors (together with their close relatives, related trusts as well as companies 

controlled by any of the directors, their close relatives and related trusts). 

The circumstances under which Shareholders, including Directors and persons acting in concert with them 

respectively, will incur an obligation to make a take-over offer under Rule 14 of the Take-over Code after a purchase or 

acquisition of Shares by the Company are set out in Appendix 2 to the Take-over Code. 

7.12.3 Effect of Rule 14 and Appendix 2 

In general terms, the effect of Rule 14 and Appendix 2 to the Take-over Code is that, unless exempted, Directors and 

persons acting in concert with them will incur an obligation to make a take-over offer under Rule 14 if, as a result of 

the Company purchasing or acquiring its Shares, the voting rights of such Directors and their concert parties would 

increase to 30% or more, or in the event that such Directors and their concert parties hold between 30% and 50% of 

the Company’s voting rights, if the voting rights of such Directors and their concert parties would increase by more 

than 1% in any period of six (6) months. 

Under Appendix 2 to the Take-over Code, a Shareholder not acting in concert with the Directors will not be required 

to make a take-over offer under Rule 14 if, as a result of the Company purchasing or acquiring its Shares, the voting 

rights of such Shareholder would increase to 30% or more, or, if such Shareholder holds between 30% and 50% of 

the Company’s voting rights, the voting rights of such Shareholders would increase by more than 1% in any period 

of six months. Such Shareholder need not abstain form voting in respect of the resolution authorizing the Share 

Purchase Mandate. 

Shareholders who are in doubt as to their obligations, if any, to make a mandatory take-over offer under the Takeover 

Code as a result of any share purchase by the Company should consult the Securities Industry Council and/or 

their professional advisers at the earliest opportunity.




Taking into account the Directors’ and Substantial Shareholders Interests disclosed in the Annual Report 

accompanying this Notice, the Directors are not aware of any fact(s) of factor(s) which suggest or imply that any 

particular person(s) and/or Shareholders) are, or may be regarded as, parties acting in concert such that their 

respective interests in voting shares in the capital of the Company should or ought to be consolidated, and 

consequences under the Take-over Code would ensue as a result of a purchase of Shares by the Company pursuant to 

the Shares Purchase Mandate. 

The Company is presently not aware of the possibility of any Shareholder(s) becoming a Substantial Shareholder by 

reason of or in consequence of the Shares Purchases pursuant to this Shares Purchase Mandate. However, should 

such a situation arise in relation to any particular Shareholder(s) due to the Shares Purchases, the Company shall 

immediately notify such Shareholder of the same. 

IN SUCH EVENT, SHAREHOLDERS ARE ADVISED TO CONSULT THEIR OWN PROFESSIONAL ADVISERS AS TO THE 

IMPLICATIONS AND OBLIGATIONS OF IN RELATION TO A SUBSTANTIAL SHAREHOLDER PURSUANT TO PART IV 

DIVISION 4 SECTIONS 82-85 OF THE ACT. 

7.13 Previous Share Purchases. Since the 2005 AGM and as of the Latest Practicable Date, the Company has not made and 

purchases of Shares. 

8. Ordinary Resolution No. 8: The Proposed Shares Issue Mandate 

8.1 Proposed Shares Issue Mandate. The Company is seeking approval of Shareholders at this AGM for the Shares Issue 

Mandate to be given to the Directors to: 

(a) 

(b) 

issue shares whether by way of rights, bonus or otherwise; and/or 

make or grant Instruments that might or would require shares to be issued, including but not limited to the 

creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into 

shares, and (notwithstanding that the authority so conferred may have ceased to be in force) issue shares in 

pursuance of any Instrument made or granted by the Directors while the authority was in force. 

8.2 Limit on shares. The aggregate number of shares to be issued pursuant to the Shares Issue Mandate, including shares 

to be issued in pursuance of Instruments made or granted pursuant thereto, will still be subject to the 50% Limit and 

the 20% Sub-Limit. The 50% Limit and the 20% Sub-Limit will be calculated based on the issued share capital of the 

Company at the time of the passing of the Shares Issue Mandate, after adjusting for: 

(a) 

(b) 

new shares arising upon the conversion or exercise of any convertible securities or share options or vesting of share 

awards which are outstanding or subsisting at the time of the passing of the Shares Issue Mandate; and 

any subsequent consolidation or subdivision of shares. The share options and share awards referred to in subparagraph 

(a) above are those granted by the Company pursuant to share plans governed by Part VIII of Chapter 8 

of the Listing Manual. 

In exercising the authority conferred under the Shares Issue Mandate, the Company will comply with the provisions of 

the Listing Manual, unless such compliance has been waived by the SGX-ST.

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8.3 Duration of Shares Issue Mandate. The Shares Issue Mandate will take effect from the passing of the resolution approving 

the Shares Issue Mandate at this AGM and will continue in force until the next AGM of the Company unless prior thereto, 

issues of shares are made to the full extent permitted by the Shares Issue Mandate or the Shares Issue Mandate is 

revoked or varied by the Company in general meeting. The Shares Issue Mandate, in the form proposed, is intended to 

be placed before Shareholders for renewal at each subsequent AGM of the Company. 

8.4 Rationale for Shares Issue Mandate. If approved, the Shares Issue Mandate will, in addition to the usual authority 

to issue shares, enable the Company to make or grant Instruments during the validity period of the Shares Issue 

Mandate, and to issue shares in pursuance of such Instruments subject to the specified limits. A general (as 

opposed to specific) approval for the Directors to make or grant Instruments will also enable the Company to act 

quickly and take advantage of market conditions. The expense and delay of otherwise having to convene general 

meetings of the Company to approve the making or granting of each specific Instrument would thus be avoided. 

It is for the above reasons that the Directors believe that the Shares Issue Mandate in the extended form, as 

proposed, would be in the best interests of the Company and its Shareholders. 

9. Directors’ Recommendations 

9.1 Authority to grant options and issue shares under Frontline Technologies Corporation Ltd Share Option Scheme 2000. 

The Directors are of the opinion that the proposed renewal of the Shares Purchase Mandate is in the best interests 

of the Company. Accordingly, they recommend that Shareholders vote in favour of Resolution 6, being the 

Ordinary Resolution relating to the proposed grant of authority to grant options and issue shares under Frontline 

Technologies Corporation Ltd Share Option Scheme 2000. 

9.2 Shares Purchase Mandate. 

The Directors are of the opinion that the proposed renewal of the Shares Purchase Mandate is in the best interests 

of the Company. Accordingly, they recommend that Shareholders vote in favour of Resolution 7, being the Ordinary 

Resolution relating to the proposed Share Purchase Mandate. 

9.3 Shares Issue Mandate. 

The Directors are of the opinion that the proposed Shares Issue Mandate is in the best interests of the Company. 

Accordingly, they recommend that Shareholders vote in favour of Resolution 8 being the Ordinary Resolution 

relating to the proposed Shares Issue Mandate. 

10. Directors’ Responsibility Statement 

The Directors collectively and individually accept responsibility for the accuracy of the information given in this 

Notice and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts 

stated and the opinions expressed in this Notice are fair and accurate and that there are no material facts the 

omission of which would make any statement in this Notice misleading.




11. Documents For Inspection 

The following documents are available for inspection at the registered office of the Company at 750 Chai Chee Road 

#02-01/03 Technopark @ Chai Chee Singapore 469000 during normal business hours from the date of this Notice up to 

and including the date of the AGM: 

(a) 

The 2002 Circular. 

(b) Frontline Technologies Corporation Ltd Share Option Scheme 2000.

110 



> appendix 1 - guidelines on shares purchase 

1. Shareholders’ Approval 

(a) Purchases of Shares by the Company must be approved in advance by the Shareholders at a general meeting of 

the Company, by way of a general mandate. 

(b) A general mandate authorizing the purchase of Shares by the Company representing up to ten per cent. (10%) 

of the Company’s issued ordinary share capital will expire on the earlier of: 

(i) the conclusion of the next annual general meeting of the Company; 

(ii) the expiration of the period within which the next annual general meeting of the Company is required by 

law to be held; or 

(iii) the time when such mandate is revoked or varied by an ordinary resolution of the Shareholders of the 

Company in general meeting. 

(c) 

(d) 

The authority conferred on the Directors by the Shares Purchase Mandate to purchase Shares shall be renewed 

at the next annual general meeting of the Company. 

When seeking Shareholders’ approval for the renewal of the Shares Purchase Mandate, the Company shall 

disclose details pertaining to the purchases of Shares made during the previous 12 months, including the total 

number of Shares purchased, the purchase price per Share or the highest and lowest price for such purchases of 

Shares, where relevant, and the total consideration paid for such purchases. 

2. Mode Of Purchase 

Shares Purchases can be effected by the Company in either one of the following two ways or both: 

(a) 

(b) 

by way of on-market purchases of Shares transacted on the SGX-ST through the SGX-ST trading system through 

one or more duly licensed stock brokers appointed by the Company; or 

by way of off-market acquisitions on an equal access scheme in accordance with the Companies Act (“Off-Market 

Purchase”). 

3. Funding Of Shares Purchases 

(a) In purchasing the Shares, the Company may only apply funds legally permitted for such purchase in accordance 

with its Articles of Association, and the relevant laws and regulations enacted or prescribed by the relevant 

competent authorities in Singapore. 

(b) 

(c) 

Any purchase by the Company may be made out of profits that are available for distribution as dividends but not 

from amounts standing in the Company’s share premium account and capital redemption reserve. 

The Company may not purchase its Shares through the SGX-ST trading system for a consideration other than cash 

or for settlement otherwise than in accordance with the trading rules of the SGX-ST.




4. Trading Restrictions 

The number of Shares which can be purchased pursuant to the Shares Purchase Mandate is such number of Shares 

which represents up to a maximum of ten percent (10%) of the issued ordinary share capital of the Company as at date 

of the last annual general meeting of the Company. 

5. Price Restrictions 

Any Shares Purchase undertaken by the Company shall be at the price of up to but not exceeding the Maximum Price. 

6. Off-Market Purchases 

(a) For purchases of Shares made by way of an Off-Market Purchase, the Company shall issue an offer document to all 

Shareholders. The offer document shall contain, inter alia, the following information : 

(i) the terms and conditions of the offer; 

(ii) the period and procedures for acceptances; 

(iii) the reasons for the proposed Shares Purchase; 

(iv) the consequences, if any, of Shares purchase by the Company that will arise under the Code on 

Takeovers and Mergers or any other applicable take-over rules; 

(v) whether the purchase of Shares, if made, would have any effect on the listing of the Company’s 

securities on the Official List of SGX-ST; and 

(vi) details of any purchase of Shares made by the Company in the previous 12 months whether through 

Market Purchases or Off-Market Purchases, including the total number of Shares purchased, the 

purchase price per Share or the highest and lowest prices paid for such purchases of Shares, where 

relevant, and the total consideration paid for such purchases. 

(b) 

(c) 

All Offeree Shareholders shall be given a reasonable opportunity to accept any offer made by the Company to 

purchase their Shares under the Shares Purchase Mandate. 

The Company may offer to purchase Shares from time to time under the Shares Purchase Mandate subject to the 

requirement that the terms of any offer to purchase Shares by the Company shall be pari passu in respect of all 

Offeree Shareholders save under the following circumstances: 

(i) where there are differences in consideration attributable to the fact that an offer relates to Shares with 

different dividend entitlements; 

(ii) where there are differences in consideration attributable to the fact that an offer relates to Shares with 

different amounts remaining unpaid; and 

(iii) where there are differences in an offer introduced solely to ensure that every Shareholder is left with a 

whole number of Shares in broad lots of 1000 Shares after the Shares Purchases, in the event there are 

Offeree Shareholders holding odd numbers of Shares.

112 




7. Status Of Purchased Shares 

Subject to the requirements of the Companies Act, 

(a) 

(b) 

The listing of all purchased Shares other than Treasury Shares on SGX-ST will be automatically cancelled and the 

relative certificates for these Shares shall be cancelled and destroyed. The Company’s purchased Shares shall be 

treated as cancelled and the issued share capital of the Company shall be diminished by the nominal value of 

these cancelled Shares accordingly; and 

The amount by which the Company’s issued share capital is diminished on the cancellation of the purchased 

Shares other than Treasury Shares shall be transferred to the Company’s capital redemption reserve. 

8. Notification To The Registrar Of Companies And Businesses 

(a) Within thirty (30) days of the passing of a Shareholders’ resolution to approve any purchase of Shares, the 

Company shall lodge a copy of such resolution with the Registrar of Companies and Businesses. 

(b) 

The Company shall notify the Registrar of Companies and Businesses within thirty (30) days of a purchase of 

Shares. Such notification shall include details of the date of the purchase, the total number and nominal value 

of Shares purchased by the Company, the Company’s issued share capital as at the date of the Shareholders’ 

resolution approving the purchase, the Company’s issued share capital after the purchase and the amount of 

consideration paid by the Company for the purchase. 

9. Notification To The SGX-ST 

(a) For purchases of Shares made by way of an Off-Market Purchase, the Company shall notify the SGX-ST in respect 

of any acquisition or purchase of Shares in the relevant form prescribed by the SGX-ST from time to time, not 

later than 9.00 a.m. on the second trading day after the close of acceptances of an offer, or within such time 

period that may be prescribed by the SGX-ST from time to time. 

(b) 

For purchases of Shares made by way of a Market Purchase, the Company shall notify the SGX-ST in respect of 

any acquisition or purchase of Shares in the relevant form prescribed by the SGX-ST from time to time, not later 

than 9.00 a.m. on the trading day following the date of market acquisition by the Company, or within such time 

period that may be prescribed by the SGX-ST from time to time. 

10. Suspension Of Purchase 

(a) The Company may not undertake any Shares Purchase prior to the announcement of any price-sensitive 

information by the Company, until such time as the price sensitive information has been publicly announced or 

disseminated in accordance with the requirements of the Listing Manual. 

(b) 

The Company may not effect any Shares Purchases on the Official List of SGX-ST during the period commencing 

one month before the announcement of the Company’s annual or half-year results, as the case may be, and 

ending on the date of announcement of the relevant results.



> statistics of shareholders 

as at 19 june 2006 

Number of Shareholders 7,867 

Class of Share 

Ordinary shares 

Voting rights 

On a show of hands: 

Every member present in person and each proxy shall have one vote 

On a poll: 

Every member present in person or by proxy shall have one vote for every share 

he/she holds or represents 

Analysis of Shareholders by range of balances as at 19 June 2006 

Size Of Shareholdings No. of Shareholders % No. of Shares % 

1 – 999 13 0.17 6,278 – 

1,000 – 10,000 3,061 38.91 19,142,761 2.32 

10,001 – 1,000,000 4,752 60.40 312,962,593 37.98 

1,000,001 and above 41 0.52 491,933,313 59.70 

Total 7,867 100.00 824,044,945 100.00 

Substantial Shareholders as at 19 June 2006 

S/No Name of Substantial Direct Interest Deemed Interest 

Shareholder (ordinary shares) (ordinary shares) 

1. Steve Ting Tuan Toon 41,274,548 60,000,000 1 

2. e-millennium Limited – 58,886,000 2 

3. CTI II Limited 56,250,252 – 

4. Portnet.com Pte Ltd 46,650,000 – 

5. Temasek Holdings Pte Ltd – 47,650,000 3

114 



> statistics of shareholders 

as at 19 june 2006 

List of Top 20 shareholders as at 19 June 2006 4 

S/No Name of Shareholder No. of Shares % of Shareholdings 

1 Steve Ting Tuan Toon 101,274,548 12.29 

2 e-Millenium Limited 58,886,000 7.15 

3 CTI II Limited 56,250,252 6.83 

4 Portnet.com Pte Ltd 46,650,000 5.66 

5 Lim Chin Hu 39,025,000 4.74 

6 Lorani Pte Ltd 21,506,296 2.61 

7 Shirley Wong Swee Ping 21,263,570 2.58 

8 DBS Nominees Pte Ltd 14,705,000 1.78 

9 United Overseas Bank Nominees Pte Ltd 14,289,000 1.73 

10 OCBC Nominees Singapore Pte Ltd 9,234,000 1.12 

11 Phillip Securities Pte Ltd 8,674,000 1.05 

12 DBS Vickers Securities (S) Pte Ltd 7,852,000 0.95 

13 Citibank Nominees Singapore Pte Ltd 7,580,000 0.92 

14 OCBC Securities Private Ltd 7,555,000 0.92 

15 Kim Eng Securities Pte Ltd 5,987,000 0.73 

16 Digital Zillion Sdn Bhd 5,950,000 0.72 

17, UOB Kay Hian Pte Ltd 5,849,319 0.71 

18 Citibank Consumer Nominees Pte Ltd 4,357,000 0.53 

19 Hong Leong Finance Nominees Pte Ltd 3,014,000 0.37 

20 HL Bank Nominees (S) Pte Ltd 2,035,000 0.25 

Total 557,022,985 67.60 

Based on information available to the Company as at 19 June 2006, approximately 67.96% of the issued ordinary shares of 

the Company is held by the public. Rule 723 of the SGX-ST Listing Manual is complied with. 

1 

Deemed interest in ordinary shares held by Mr Steve Ting Tuan Toon’s nominees 

2 

Deemed interest in ordinary shares held by e-millennium Limited’s nominees 

3 

Deemed to have an interest in ordinary shares held by Keppel Corporation Group of Companies and PSA Corporation 

Group of Companies. 

4 

excludes declared beneficial interests of other Top 20 Shareholders



IMPORTANT 

proxy form 


Company Registration No. 199801489G 

(Incorporated in the Republic of Singapore) 

1. For investors who have used their CPF monies 

to buy Frontline Technologies Corporation Ltd 

shares, the Annual Report is forwarded to them 

at the request of their CPF Approved Nominees 

and is sent FOR INFORMATION ONLY. 

2. This Proxy Form is not valid for use by CPF 

investors and shall be ineffective for ail intent 

and purposes if used or purported to be used 

by them. 

I/We _________________________________________________________________________________________________ 

of ___________________________________________________________________________________________________ 

being *a member/members of Frontline Technologies Corporation Ltd (“Company”), hereby appoint 

Name Address NRIC/ Passport No. 

Proportion of shareholdings to 

be represented by proxy (%) 

*and/or 

as *my/our *proxy/proxies to vote for *me/us on *my/our behalf and, if necessary, to demand a poll, at the Annual General 

Meeting of the Company to be held at Keppel Hall, Keppel Club, Level 4, 10 Bukit Chermin Road, Singapore 109918 on 

28 July 2006 at 10.30am and at any adjournment thereof. 

*I/we direct *my/our *proxy/proxies to vote for or against the Ordinary Resolutions to be proposed at the Annual General 

Meeting as indicated with an “X” in the spaces provided hereunder. If no specified directions as to voting are given, the 

*proxy/proxies will vote or abstain from voting at *his/their discretion. 

No. 

Ordinary Resolution 

1. 

To receive and adopt the Audited Accounts for the year ended 31 March 

2006, the Directors’ Report and the Auditors’ Report thereon. 

2. To re-elect Ms Shirley Wong Swee Ping as a director of the Company. 

3. To re-elect Dr Harrison Wang Hong She as a director of the Company. 

4. 

5. 

To approve the payment of Directors’ Fees of S$84,000 for the year 

ended 31 March 2006. 

To re-appoint Messrs Baker Tilly TFWLCL as auditors of the Company 

and to authorise the Directors to fix their remuneration. 

6. 

To authorise the Directors to grant options and to issue shares under 

the Company’s Share Option Scheme 2000. 

7. To renew the Share Purchase Mandate. 

8. To renew the Share Issue Mandate. 

To be used on a show of 

hands 

For 

Against 

To be used in the event 

of a poll 

Number of 

Votes For 

Number 

of Votes 

Against 

Dated this _____ day of _______________________ 2006. 

Signature(s) of Member(s)/Common Seal 

* Delete accordingly 

IMPORTANT : Please read notes overleaf 

Total Number of Shares Held

116 Notes 



1. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to 

attend and vote in his stead. Such proxy need not be a member of the Company. 

2. Where a member of the Company appoints two proxies, he shall specify the proportion of his shareholding (expressed as a percentage of 

the whole) to be represented by each such proxy. 

3. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorized in writing. Where 

the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under its common seal or under the hand of 

its attorney or duly authorized officer. 

4. A corporation which is a member of the Company may authorize by resolution of its directors or other governing body such person as it 

thinks fit to act as its representative at the Annual General Meeting, in accordance with its Articles of Association and Section 179 of the 

Companies Act, Chapter 50 of Singapore. 

5. The instrument appointing proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or 

notarially certified copy thereof, must be deposited at the registered office of the Company at 750 Chai Chee Road #02-01/03 Technopark @ 

Chai Chee, Singapore 469000 not later than 48 hours before the time set for the Annual General Meeting. 

6. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register 

(as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), he should insert that number of shares. If the member has 

shares registered in his name in the Register of Members of the Company, he should insert the number of shares. If the member has shares 

entered against his name in the Depository Register and shares registered in his name in the Register of Members of the Company, he 

should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by 

the member of the Company. 

7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible 

or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument 

appointing a proxy or proxies. In addition, in the case of members of the Company whose shares are entered against their names in the 

Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have 

shares entered against their names in the Depository Register 48 hours before the time appointed for holding the Annual General Meeting 

as certified by The Central Depository (Pte) Limited to the Company. 

8. A Depositor shall not be regarded as a member of the Company entitled to attend the Annual General Meeting and to speak and vote 

thereat unless his name appears on the Depository Register 48 hours before the time set for the Annual General Meeting. 

Fold here 

Affix 

Stamp 

Here 

The Company Secretary 


750 Chai Chee Road #02-01/02/03 

The Oasis Technopark@Chai Chee 

Singapore 469000

Frontline Technologies Corporation Ltd 

Company Registration No: 199801489G 

750 Chai Chee Road, #02-01/02/03 The Oasis Technopark@Chai Chee, Singapore 469000 

Telephone: (65) 6773 7227 Facsimile: (65) 6779 4455 

www.frontline.com.sg 

China • Hong Kong • India • Malaysia • Philippines • Singapore • Taiwan • Thailand

FRONTLINE COVER FA 070606 CR2.indd

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