FRONTLINE COVER FA 070606 CR2.indd

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90 frontline technologies corporation ltd annual report 2006 > notes to the financial statement for the year ended 31 march 2006 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
frontline technologies corporation ltd annual report 2006 91 > notes to the financial statement for the year ended 31 march 2006 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.
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