notes to the financial statements - Singapore Technologies ...

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140 SIMPLY SMARTERNOTES TO THE FINANCIAL STATEMENTS31 December 2011(Currency - Singapore dollars unless otherwise stated)9. Finance costs, netGroupNote 2011 2010$’000 $’000Finance incomeDividend income- quoted equity investments 33 10- unquoted equity investments 188 20Interest income- bank deposits 5,876 6,055- staff loans 22 13- finance lease 788 721- bonds 11,299 12,374- others 2,205 1,299Exchange gain, net 4,830 –Gain on disposal of investments 5,618 10,849Gain on fair value changes of investments held for trading – 33Fair value changes of financial instruments- gain on forward currency contract designated as hedging instrument – 12,717- gain on ineffective portion of forward currency contract designated as hedging instrument incash flow hedges 9 –Fair value changes of hedged items 10,424 –Fair value changes of embedded derivatives- not designated as hedging instrument 1,021 –- designated as hedging instrument 2,757 –45,070 44,091Finance costsInterest expenses- bank loans and overdrafts (19,711) (22,425)- bonds (30,433) (32,993)- finance lease (206) (320)- others (273) (452)Exchange loss, net – (8,716)Loss on fair value changes of investments held for trading (45) –Net change in fair value of cash flow hedges reclassified from equity- on occurrence of forecast transactions (8,289) –Fair value changes of financial instruments- loss on forward currency contract designated as hedging instrument (5,382) –- loss on forward currency contract not designated as hedging instrument (88) –- loss on ineffective portion of forward currency contract designated as hedging instrument incash flow hedges – (65)Fair value changes of hedged items – (9,915)Fair value changes of embedded derivatives- not designated as hedging instrument – (8,367)- designated as hedging instrument – (3,746)Impairment loss on unquoted investments 15 (19) (417)(64,446) (87,416)Finance costs, net, recognised in profit or loss (19,376) (43,325)
SINGAPORE TECHNOLOGIES ENGINEERING LTD Annual Report 2011141NOTES TO THE FINANCIAL STATEMENTS31 December 2011(Currency - Singapore dollars unless otherwise stated)10. TaxationGroup2011 2010$’000 $’000Current income taxCurrent year 129,533 140,432Overprovision in respect of prior years (26,315) (13,098)Associates and jointly controlled entities 4,744 6,336107,962 133,670Deferred income taxCurrent year 475 (20,527)Underprovision in respect of prior years 6,177 9,299Effect of reduction in tax rate (50) 181114,564 122,623Deferred income tax related to items charged or credited directly to other comprehensive income:Net change in fair value of available-for-sale financial assets – 51Net change in fair value of derivative financial instruments designated in cash flow hedges 3,536 (4,345)3,536 (4,294)The GroupUnrecognised tax benefitsAs at 31 December 2011, certain subsidiaries of the Group have potential tax benefits of approximately $134,786,000 (2010: $92,733,000) arising fromunutilised tax losses, unabsorbed wear and tear allowances and other temporary differences, which are available for set-off against future taxable profits.These tax benefits have not been recognised in the financial statements due to the uncertainty of the sufficiency of future taxable profits to be generatedfor these subsidiaries in the foreseeable future. The use of these potential tax benefits is subject to the agreement of the tax authorities and compliancewith certain provisions of the tax legislation of the respective countries in which the subsidiaries operate.Unrecognised temporary differences relating to investments in subsidiariesAs at 31 December 2011, no deferred tax liabilities (2010: $nil) has been recognised for taxes that would be payable on the undistributed earnings ofcertain subsidiaries of the Group as the Group has determined that the undistributed profits of some of its overseas subsidiaries will not be remitted toSingapore in the foreseeable future, but be retained for organic growth and acquisitions.
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notes to the financial statements - Singapore Technologies ...

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