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(b) Movements in provision for liquidated damages duringthe year are as follows:(c) Movements in provision for contingencies during theyear are as follows:(d) Movements in provision for engineering and developmentduring the year are as follows:(e) Movements in provision for wharf and syncroliftupkeep during the year are as follows:GROUP2000 1999$’000 $’000At beginning of the year 2,959 3,681Charge (write back) to profit and loss account 12,658 (680)Provision utilised (571) (42)Acquisition of subsidiary 27,701 –At end of the year 42,747 2,959GROUP2000 1999$’000 $’000At beginning of the year 19,236 19,610Write back to profit and loss account (41,146) (219)Provision utilised (14) (170)Acquisition of subsidiary 21,883 –Translation difference 41 15At end of the year – 19,236GROUP2000 1999$’000 $’000At beginning of the year 6,587 4,597(Write back) charge to profit and loss account (6,587) 2,290Provision utilised – (300)At end of the year – 6,587GROUP2000 1999$’000 $’000At beginning of the year 11,000 11,000Write back to profit and loss account (6,000) –Reclassified to accrued operating expenses (5,000) –At end of the year – 11,000(f) Movements in provision for environmental liabilitiesduring the year are as follows:24. LEASE OBLIGATIONSA subsidiary of Singapore Technologies Aerospace Ltd(“ST Aero”) leases certain land, buildings, and equipmentfrom a foreign Airport Authority (the “Authority”) undera capital lease related to industrial revenue bonds issuedby the Authority. Assets being leased are pledged as collateralagainst the bonds.The bonds have staggered maturitydates and the lease payments have been structured tocoincide with the staggered maturities of the bonds withthe final payment due on 1 November 2012, the expirationdate of the lease.In connection with the bond issue, the subsidiaryentered into a letter of credit agreement for approximately$13,600,000, which is used to guarantee paymentson the bonds in the event that the subsidiary isunable to make required lease payments. However, theletter of credit agreement expires in May 2001, and theGROUP2000 1999$’000 $’000At beginning of the year 5,293 5,457Provision utilised – (167)Translation difference 10 3At end of the year 5,303 5,293subsidiary has no alternative sourcing in place.Withoutthe letter of credit agreement in place, the Authoritywill call the bonds. ST Aero has expressed its ability andintent to pay off the bonds with other long-termfinancing should the subsidiary not enter into anotherletter of credit agreement by the original agreement’smaturity. As such, the capitalised lease obligation isclassified as long-term in the accompanying 2000balance sheet.The subsidiary also leases certain land, buildings, andequipment from the Authority under an operating lease.The lease term coincides with the term of the capitallease.The Company has unconditionally guaranteedpayment of all rents.The obligations under the finance lease to be paid by thesubsidiary are as follows:PRINCIPAL INTEREST$’000 $’00020001 year to 5 years 5,734 5,901After 5 years 12,388 3,908Total 18,122 9,809Discount (167) –17,955 9,809PRINCIPAL$’0002000Repayable:Within 1 year 990After 1 year 16,96517,955160 • visionnotes to the financial statements • 161