FRONTLINE COVER FA 070606 CR2.indd

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76 frontline technologies corporation ltd annual report 2006 > notes to the financial statement for the year ended 31 march 2006 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 Name Principal activities of business 2006 2005 % % 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.
frontline technologies corporation ltd annual report 2006 77 > notes to the financial statement for the year ended 31 march 2006 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.
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FRONTLINE COVER FA 070606 CR2.indd

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