Download Annual Report 2008 - Sembcorp

Notes to theFinancial StatementsYear Ended December 31, 200840. CONTINGENT LIABILITIES (UNSECURED) (cont’d)Company (cont’d)a. Intra-group financial guarantees comprise guarantees granted by the Company to banks in respect of bankingfacilities amounting to S$1,239 million (2007: S$1,265 million), of which S$200 million was drawn down as atbalance sheet dates. The periods in which the financial guarantees expire are as follows:Company2008 2007Less than 1 year 1,239,063 1,064,922Between 1 to 5 years – 200,0001,239,063 1,264,922b. The Company has provided a corporate guarantee to a subsidiary, SembCogen which entered into a long-termcontract (“End User Agreement”) with a fellow subsidiary, SembGas to purchase natural gas over the period of 22years with effect from 1999.Under the End User Guarantee Agreement, the Company and one of its subsidiaries, Sembcorp Utilities Pte Ltd,issued corporate guarantees in favour of SembGas for 70% and 30% respectively of SembCogen’s obligationsunder the End User Agreement.41. COMMITMENTSCommitments not provided for in the financial statements are as follows:S$’000GroupS$’0002008 2007Capital expenditure for:– Commitments in respect of contracts placed 56,502 56,961– Amounts approved by directors but not contracted 121,988 122,720– Uncalled capital and commitments to subscribe for additional shares in investments 137,870 123,220316,360 302,901At the balance sheet date, commitments in respect of payments for non-cancellable operating leases with a term ofmore than one year are as follows:GroupS$’000CompanyS$’0002008 2007 2008 2007S$’000 S$’000 S$’000 S$’000Lease payments due:Within 1 year 24,447 25,774 6,213 808Between 1 and 5 years 40,696 49,462 18,019 –After 5 years 79,629 84,430 36,260 –144,772 159,666 60,492 80841. COMMITMENTS (cont’d)i. On January 15, 1999, Sembcorp Gas Pte Ltd (“SembGas”) entered into a long-term Gas Sales Agreement to purchasenatural gas over a period of 22 years. SembGas also entered into agreements with certain customers for the on-saleof this gas, which agreements incorporated provisions, which specifically deal with, inter-alia, SembGas’ liability forshortfalls in deliveries of gas and relief from such liability in certain circumstances.ii. On April 15, 2008, SembGas entered into another agreement (which agreement became unconditional andeffective as of October 31, 2008) to import natural gas over a period of 15 years, with first delivery of gas targetedto take place between 2010 and 2011.The Group leases out its investment properties. Non-cancellable operating lease rentals are receivable as follows:Group2008 2007Lease receivable:Within 1 year 3,097 2,484Between 1 and 5 years 4,848 3,9527,945 6,43642. SEGMENT REPORTINGSegment information is presented in respect of the Group’s business and geographical segments. The business segmentsare based on the Group’s management and internal reporting structure.Inter-segment pricing is determined on mutually agreed terms.Segment results, assets and liabilities include items directly attributable to a segment as well as those that can beallocated on a reasonable basis.a. Business SegmentsThe Group comprises the following main business segments:The Utilities segment’s principal activities are in provision of centralised utilities, energy and water. It offersindustrial utilities and services such as energy, steam, industrial water and wastewater treatment to energyintensive users. It operates in Singapore, the United Kingdom, China, Vietnam and the United Arab Emirates.The Marine segment focuses on repair, building and conversion of ships and rigs, and on offshore engineering.The Environment segment provides integrated waste management services and undertakes waste-to-resourcebusinesses in the Asia Pacific region.The Industrial Parks segment owns, develops, markets and manages industrial parks and townships in Asia.Others / Corporate segment comprises businesses relating to minting, design and construction activities, offshoreengineering and the corporate companies.b. Geographical SegmentsThe Group operates in three principal geographical areas, Singapore, Europe and the Rest of Asia. In presentinginformation on the basis of geographical segments, segment revenue is based on the geographical location ofcustomers. Segment assets are based on the geographical location of the assets.S$’000S$’000206 Delivering Essential Solutions Sembcorp Industries Annual Report 2008 207