FRONTLINE COVER FA 070606 CR2.indd

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.