Full Annual Report 2006 - Singapore Technologies Engineering

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173 Notes to the Financial Statements 31 DECEMBER 2006 (Currency – Singapore dollars unless otherwise stated) 12. LONG-TERM RECEIVABLES (continued) (b) Included in the loans to third parties are: (i) an amount of $2,010,000 (2005: $2,954,000) which is secured by the third party’s investment in a unit trust and the loan is repayable over a period of 12 years commencing from 1996. Interest is chargeable at 15% per annum calculated on the reducing balance basis. (ii) an amount of approximately $8,312,000 (2005: $8,312,000) secured by intellectual property rights of that entity and is not expected to be repaid within the next 12 months. Interest is repriced every month and chargeable at the US dollar prime rate plus 2% (2005: 2%) per annum, which is also the effective interest rate. The loan is convertible to shares of that entity, subject to certain terms and conditions. In the prior year, a notice was given to that entity to convert the loan to shares of that entity but the conversion has not been effected as at the end of the year. No interest income has been accrued for this financial year for the loans stated due to the uncertainty over the collectibility of the interest income. (iii) a bridging loan of $768,150 (US$500,000) (2005: $830,650 (US$500,000)) extended to a third party. The bridging loan is secured by way of a Deed of Debenture which creates a floating charge over the assets of the third party. This loan is treated as a net investment in the third party and is not expected to be repaid and is fully provided since financial year 2005. The loan is stated at cost and has been fully provided for due to uncertainty of collectibility. Therefore, it is not practicable to determine its fair value. 13. DEFERRED TAX ASSETS GROUP 2006 2005 $’000 $’000 (Restated) At beginning of the year 110,872 84,843 (Write-back of provision)/provision during the financial year (4,613) 631 Acquisition of subsidiaries in prior year, as previously reported – 4,905 Finalisation of purchase price allocation – 15,523 Acquisition of subsidiaries in prior year, as restated – 20,428 Acquisition of subsidiaries in current year 18,783 – Translation differences (3,158) (219) Transfer (to)/from provision for taxation (3,190) 4,804 Changes in fair value of available-for-sale financial assets (1,218) – Changes in fair value of derivative financial instruments designated in cash flow hedges 161 385 At end of the year 117,637 110,872 The deferred tax assets arise as a result of: Unabsorbed capital allowances and unutilised tax losses 39,257 23,698 Allowance for doubtful debts and stock obsolescence 24,585 23,955 Provision for warranties 32,561 29,982 Provision for liquidated damages 1,879 1,579 Provision for foreseeable losses 7,804 9,834 Intangible assets (19,109) – Other temporary differences 30,257 21,368 Changes in fair value of derivative financial instruments designated in cash flow hedges 403 456 117,637 110,872
THE WINNING SPIRIT ST Engineering AR 2006 174 Notes to the Financial Statements 31 DECEMBER 2006 (Currency – Singapore dollars unless otherwise stated) 14. STOCKS AND WORK-IN-PROGRESS GROUP 2006 2005 $’000 $’000 Stocks of equipment and spares 504,940 294,584 Work-in-progress in excess of progress billings Work-in-progress, including profits recognised 1,887,083 1,828,880 Progress billings (1,288,606) (1,311,278) 598,477 517,602 Total stocks and work-in-progress at lower of cost and net realisable value 1,103,417 812,186 Progress billings in excess of work-in-progress Work-in-progress, including profits recognised 1,499,763 1,294,527 Progress billings (1,798,701) (1,585,831) (298,938) (291,304) Stocks are stated after allowance for stock obsolescence of $106,230,000 (2005: $102,654,000) and work-in-progress in excess of progress billings are stated after provision for foreseeable losses of $26,311,000 (2005: $29,907,000). 15. TRADE DEBTORS Trade debtors 872,270 660,539 Allowance for doubtful debts (65,980) (75,091) 806,290 585,448 Unbilled receivables 51,921 80,018 858,211 665,466 Trade debtors denominated in currencies other than the functional currencies as at 31 December 2006 are as follows: • $222,880,000 (2005: $189,236,000) denominated in US dollars • $34,277,000 (2005: $63,447,000) denominated in Euro Movements in allowance for doubtful debts during the year are as follows: At beginning of the year 75,091 87,128 Write-back to statement of profit and loss (7,378) (12,426) Bad debts written off against allowance (2,401) (2,829) Arising from acquisition of subsidiaries 1,920 3,061 Translation difference (1,252) 157 At end of the year 65,980 75,091
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THE WINNING SPIRIT ANNUAL REPORT 20
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11 Peter SEAH Lim Huat Chairman (le
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THE WINNING SPIRIT ST Engineering A
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47 Investor Relations ST ENGINEERIN
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57 Operating Financial Review GROUP
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LAND SYSTEMS SECTOR MARINE SECTOR C
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67 Aerospace FLYING HIGH WITH TOTAL
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69 Aerospace Full Year Performance
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75 Land Systems BREAKING NEW GROUND
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77 Land Systems Major Acquisitions
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91 Directors’ Report AS AT 31 DEC
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101 Directors’ Report AS AT 31 DE
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103 Statement by Directors We, Pete
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105 Balance Sheets AS AT 31 DECEMBE
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107 Statements of Changes in Equity
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109 Consolidated Statement of Cash
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111 Consolidated Statement of Cash
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113 Notes to the Financial Statemen
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225 CORPORATE INFORMATION BOARD OF
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SINGAPORE TECHNOLOGIES ENGINEERING
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Full Annual Report 2006 - Singapore Technologies Engineering

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