O TTO M ARINE L IMITED - Microsoft Internet Explorer - SGX

ange from 3.75% per annum to 8.0% per annum. We do not currently have any hedging arrangements or
interest-rate swaps to adjust interest-rate risk exposures, but we may enter into such arrangements or swaps in
the future.
Liquidity Risk
We are dependent on the continuing financial support from Yaw Chee Siew, in the form of loans from
Brizill International and personal guarantees granted to financial institutions for credit facilities extended to us.
A withdrawal of such support would likely result in us having difficulty in meeting our short-term obligations
and successfully executing our expansion plans.
Recent SFRS Pronouncements
Certain new standards, amendments and interpretations to existing standards have been published that are
mandatory for our accounting periods beginning on or after 31 December 2007 or later periods but which we
have not adopted before then, are as follows:
FRS 23 (Borrowing Costs)
The revised FRS 23 requires capitalisation of borrowing costs directly attributable to the acquisition,
construction, or production of a qualifying asset as part of the cost of that asset. The option of immediately
recognising those borrowing costs as an expense has been removed.
FRS 107 (Financial Instruments: Disclosure)
FRS 107 requires an expansion of the disclosure of our Group’s financial instruments to include summary
of quantitative data about exposure of our Group to its financial risks at the reporting date that an entity may
provide internally to key management.
FRS 108 (Operating Segments)
FRS 108 replaces FRS 14 (Segment Reporting), and is applicable for entities whose equity or debt
securities are publicly traded and entities that are in the process of issuing equity and debt securities in public
securities markets.
The key changes from FRS 14 include:
identification of operating segments on the basis of internal reports about components of the entity that
are regularly reviewed by the chief operating decision maker in order to allocate resources and assess
performance;
more discretion in defining segment information, limited only by an entity’s internal reporting practice,
with explanation of bases and provision of entity-wide disclosures when an entity has only one
reportable segment, including information about each product and service or groups of products and
services; and
analyses of revenues and certain non-current assets by geographical area — with an expanded requirement
to disclose revenues/assets by individual foreign country (if material), irrespective of the
identification of operating segments. If such analyses are not available due to excessive costs, the facts
must be disclosed.
INT FRS 111 FRS 102 (Group and Treasury Share Transactions)
INT FRS 111 FRS 102 provides guidance on applying FRS 102 in three circumstances:
When an entity receives services as consideration for rights to its own equity instruments, the
transaction should be accounted for as equity-settled.
When a parent grants rights to its own equity instruments to employees of its subsidiary and the parent
has the obligation to deliver the equity instrument, the subsidiary should record the expense and a
corresponding capital contribution in equity.
When a subsidiary grants rights to equity instruments of its parent to its employees and the subsidiary
has the obligation to deliver the equity instruments of its parent to its employees, the subsidiary should
account for the transaction as cash-settled.
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