notes to the financial statements - Singapore Technologies ...

More documents

Recommendations

Info

182 SIMPLY SMARTERNOTES TO THE FINANCIAL STATEMENTS31 December 2011(Currency - Singapore dollars unless otherwise stated)19. Finance lease receivables (continued)Finance leases that are individually assessed to be impaired relate to customers who have defaulted on payments.Ageing of net investment in minimum lease receivables that are past due but not impaired:Group2011 2010$’000 $’0001 - 90 days 2,360 3,10991 - 180 days 2,387 1,616181 - 360 days 1,771 615>360 days 1,027 9927,545 6,33220. Deferred tax assetsGroup2011 2010$’000 $’000At beginning of the year 118,794 127,196Recognised in profit or loss 9,556 5,659Effect of reduction in tax rate 59 (168)Disposal of a subsidiary (30) –Translation difference 385 (8,492)Utilisation of tax losses (12,063) (8,306)Changes in fair value of available-for-sale financial assets – (51)Changes in fair value of derivative financial instruments designated as cash flow hedges (3,534) 2,956At end of the year 113,167 118,794The deferred tax assets arise as a result of:Unabsorbed capital allowances and unutilised tax losses 15,297 3,149Allowance for doubtful debts and inventory obsolescence 8,693 15,730Provisions 73,102 88,986Intangible assets – 405Other temporary differences 11,718 2,672Changes in fair value of derivative financial instruments designated as cash flow hedges 4,357 7,852113,167 118,794
SINGAPORE TECHNOLOGIES ENGINEERING LTD Annual Report 2011183NOTES TO THE FINANCIAL STATEMENTS31 December 2011(Currency - Singapore dollars unless otherwise stated)21. Inventories and work-in-progressGroup2011 2010$’000 $’000Inventories of equipment and spares 785,617 575,315Work-in-progress in excess of progress billingsWork-in-progress, including profits recognised 3,093,530 3,179,861Progress billings (2,285,477) (2,284,747)808,053 895,114Total inventories and work-in-progress at lower of cost and net realisable value 1,593,670 1,470,429Progress billings in excess of work-in-progressWork-in-progress, including profits recognised 3,078,244 2,043,709Progress billings (3,734,407) (2,610,902)(656,163) (567,193)In 2011, raw materials, consumables and changes in finished goods and work-in-progress recognised as cost of sales amounted to $3,663,208,000(2010: $3,539,892,000).(i)Revision to inventory obsolescence estimatesDuring the year, the Group engaged independent consultants to perform an industry and benchmarking study on the basis and estimates (the“obsolescence rates”) used to determine allowance for inventory obsolescence. The study considered the industry practices of the 4 mainoperating segments and compared the obsolescence rates against industry peer companies. Based on the results obtained, the Group hasrevised the obsolescence rates to align more closely with industry practices. The effect of these changes resulted in a write-back of allowancefor inventory obsolescence of $18,985,000 to the income statement.The determination of inventory obsolescence charge involves ascertaining the net realisable values of inventory, which are dependent on theprevailing selling prices, which in turn are impacted by demand and supply, technological advancement and etc. Therefore, it is impractical toestimate the effects of these changes on the income statements in the future years.(ii)Allowances for inventory obsolescence and foreseeable lossesAs at 31 December 2011, the inventories are stated after allowance for inventory obsolescence of $187,674,000 (2010: $195,316,000) andwork-in-progress in excess of progress billings is stated after provision for foreseeable losses of $6,365,000 (2010: $4,168,000).(iii)Net realisable value write-downAs at 31 December 2011, work-in-progress amounting to $38,718,000 (2010: $nil) was written down to the estimated net realisable value. Thewrite-down was included in cost of sales.
Page 2 and 3:
118 SIMPLY SMARTERNOTES TO THE FINA
Page 4 and 5:
Page 6 and 7:
Page 8 and 9:
Page 10 and 11:
Page 12 and 13:
Page 14 and 15:
Page 16 and 17: 132 SIMPLY SMARTERNOTES TO THE FINA
show all

notes to the financial statements - Singapore Technologies ...

Create successful ePaper yourself

Delete template?

Save as template?