NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2024 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) C13 Contract balances (continued) Transaction price allocated to the remaining performance obligations The aggregate amount of transaction price allocated to the remaining performance obligations as at 31 December 2024 is $28,535,966,000 and the Group expects to recognise $8,846,859,000 as revenue relating to the unsatisfied (or partially unsatisfied) performance obligations in 2025 with the remaining $19,689,107,000 in 2026 and beyond. As at 31 December 2023, the aggregate amount of transaction price allocated to the remaining performance obligations was $27,446,653,000 and the Group expected to recognise $7,886,342,000 as revenue relating to the unsatisfied (or partially unsatisfied) performance obligations in 2024 with the remaining $19,560,311,000 in 2025 and beyond. Variable consideration that is constrained and therefore not included in the transaction price is excluded in the amount presented above. Estimates and judgement: Contract balances Judgements are used to estimate these total contract costs to complete. In making these estimates, management has relied on past experience of completed projects. The estimated total contract costs are reviewed every reporting period and adjusted where necessary, with the corresponding effect of change being recognised prospectively from the date of change. C14 Financial risk management objectives and policies The Group has exposure to the following financial risks arising from its operations and the use of financial instruments: • Interest rate • Foreign exchange • Market • Liquidity • Credit The Group’s principal financial instruments, other than foreign exchange contracts and derivatives, comprise bank guarantees, performance bonds and bank loans, finance leases and hire purchase contracts, investments, cash and short-term deposits. All financial transactions with the banks are governed by banking facilities duly accepted with Board of Directors’ resolutions, with banking mandates, which define the permitted financial instruments and facilities limits. All financial transactions require dual signatories. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. It is the Group’s policy not to engage in foreign exchange and/or derivatives speculation. The purpose of engaging in treasury transactions is solely for hedging. The Group’s treasury mandates allow only foreign exchange spot, forward or non-deliverable forward, foreign exchange swap, cross currency swap, purchase of foreign exchange call, put or collar option, forward rate agreement, interest rate swap, purchase of interest rate cap, floor or collar option. These instruments are generic in nature with no embedded or leverage features and any deviation from these instruments would require specific approval from the Board of Directors. 184 ST ENGINEERING | ANNUAL REPORT 2024
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