Annual Report 2006 - Venture Corporation Limited

notes to financial statements
December 31, 2006
4 FINANCIAL RISKS AND MANAGEMENT (Cont’d)
The fair values of financial assets and financial liabilities are determined as follows:
- the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active
liquid markets are determined with reference to quoted market prices;
- the fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined
in accordance with generally accepted pricing models based on discounted cash flow analysis; and
- the fair value of credit derivative notes (Notes 7 and 20) are derived from valuation models that are proprietary
to the issuing banks. The issuing banks have confirmed among others, that the valuations are computed by an
independent valuation team and that the valuations reflect the current economic assessment of the transactions
and take into consideration, observable market data that the banks believe to be appropriate.
5 RELATED PARTY TRANSACTIONS
Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be
related if one party has the ability to control the other party or exercise significant influence over the other party in
making financial and operating decisions. Associates also include those that are associates of related companies.
Some of the company’s transactions and arrangements are with related parties and the effect of these on the basis
determined between the parties is reflected in these financial statements. The balances are unsecured, interest-free and
repayable on demand unless otherwise stated.
During the year, group entities entered into the following trading transactions with related parties:
The Group
2006 2005
$’000 $’000
Proceeds on sale of property to an executive director of the company - 8,000 (a)
Purchases of goods from associates 6,879 9,734
Sales of goods to associates - 349
Commission income from associates - 57
(a)
This is an Interested Person Transaction under the SGX Listing Manual Rules. The Audit Committee had reviewed the
transaction and was satisfied that the terms of transaction was on normal commercial terms.
Compensation of directors and key management personnel
The remuneration of directors and other members of key management during the year was as follows:
Group
2006 2005
$’000 $’000
Short term benefits 17,593 16,944
Post-employment benefits 217 332
Share-based payments 1,096 925
18,906 18,201
The remuneration of directors and key management is determined by the Remuneration Committee having regard to
the performance of individuals and market trends.
54 venture corporation limited