Full Annual Report 2006 - Singapore Technologies Engineering

THE WINNING SPIRIT ST Engineering AR 2006 178
Notes to the Financial Statements 31 DECEMBER 2006
(Currency – Singapore dollars unless otherwise stated)
23. PROVISIONS (continued)
(c) Movements in provision for foreseeable losses during the year are as follows:
GROUP
2006 2005
$’000 $’000
At beginning of the year 19,261 22,833
Write-back to statement of profit and loss (448) (873)
Provision utilised (6,104) (2,701)
Translation difference – 2
At end of the year 12,709 19,261
24. SHORT-TERM BANK LOANS (UNSECURED)
EFFECTIVE
GROUP
INTEREST RATE MATURITY 2006 2005
% $’000 $’000
Bank loans 4.65% to 5.85% Within 1 year 595,850 323,594
The bank loans are denominated in US dollars, Sterling pounds, Euro and Australian dollars.
25. LEASE OBLIGATIONS
A subsidiary leases certain land, buildings, and equipment from a foreign Airport Authority (the “Authority”) under a capital
lease related to industrial revenue bonds issued by the Authority. Assets being leased are pledged as collateral against the
bonds. The bonds have staggered maturity dates and the lease payments have been structured to coincide with the staggered
maturities of the bonds with the final payment due on 1 November 2012, the expiration date of the lease.
In connection with the bond issue, the subsidiary entered into a letter of credit agreement for approximately US$10,610,000,
which is used to guarantee payments on the bonds in the event that the subsidiary is unable to make required lease payments.
The letter of credit expires on 3 April 2007.
The subsidiary also leases certain land, buildings, and equipment from the Authority under an operating lease. The lease term
coincides with the term of the capital lease.
The obligations under the finance lease to be paid by the subsidiary are as follows:
MINIMUM
PRESENT
LEASE
VALUE OF
PAYMENT INTEREST PAYMENTS
$’000 $’000 $’000
2006
1 to 5 years 11,109 (1,943) 9,166
After 5 years 2,195 (96) 2,099
Total 13,304 (2,039) 11,265
Discount (15) – (15)
13,289 (2,039) 11,250
Repayable:
Within 1 year 2,137
After 1 year 9,113
11,250