FRONTLINE COVER FA 070606 CR2.indd

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52 frontline technologies corporation ltd annual report 2006 > consolidated cash flow statement for the financial year ended 31 march 2006 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 The accompanying notes form an integral part of these financial statements.
frontline technologies corporation ltd annual report 2006 53 > 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;
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