FRONTLINE COVER FA 070606 CR2.indd

88
frontline technologies corporation ltd
annual report 2006
> notes to the financial statement
for the year ended 31 march 2006
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.