ST Engineering Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) E4 Borrowings (continued) (d) Lease liabilities (continued) (ii) Other leases The Group leases vehicles and equipment, with lease terms of three to five years. In some cases, the Group has options to purchase the assets at the end of the contract term. The Group monitors the use of these vehicles and equipment, and reassesses the estimated amount payable under the residual value guarantees at the reporting date to remeasure lease liabilities and right-of-use assets. The Group also leases IT equipment and machinery with contract terms of one to three years. These leases are short-term and/or leases of low-value items. The Group has elected not to recognise right-of-use assets and lease liabilities for these leases. (e) Other loans Included in the other loans is a USD denominated promissory note of $19,565,000 favouring the U.S. Department of the Treasury issued by a U.S. entity of the Group related to a Payroll Support Program agreement under the Coronavirus.Aid, Relief, and Economic Security (CARES) Act. The promissory note has a 10-years’ maturity with no prepayment penalties, unsecured and bears an effective interest at 4% per annum currently. The U.S. entity intends to repay the loan within the next twelve months. / ST ENG I NEER I NG 244