FRONTLINE COVER FA 070606 CR2.indd

frontline technologies corporation ltd
annual report 2006 65
> notes to the financial statement
for the year ended 31 march 2006
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