Singapore Airlines 2002 Annual Report Download - page 41

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SIA Annual Report 01/02 41
Financial Review
Taxation (continued)
The current period taxation charge of $233.8 million and $173.5 million for the Group and the Company respectively, are computed
based on the year end prevailing tax rate of 24.5%. Applying the reduced tax rate of 22.0%, the taxation charge for the year including
write-back of deferred tax balances provided in the prior years, would be $138.7 million and $99.5 million for the Group and the
Company respectively.
In compliance with the revised SAS 12 (2001) Income Taxes, the Group has with effect from this financial year provided for full deferred
taxation. Thus, the deferred tax liability as at 31 March 2002 is computed on the basis of the taxable temporary differences at year end
using the prevailing tax rate of 24.5%. Applying the reduced tax rate of 22.0%, the deferred tax liability at 31 March 2002 would be
$2,392.6 million and $1,980.8 million for the Group and the Company respectively.
The aggregate adjustments in the next financial year of the current and deferred taxation charges are estimated to be $277.8 million and
$225.1 million for the Group and the Company respectively.
Dividends
An interim dividend of 3.0 cents per share, less income tax at 24.5% amounting to $28 million, was paid on 22 November 2001.
The Board is proposing a final tax-exempt dividend of 4.0 cents per share ($49 million) and a dividend of 8.0 cents per share less income
tax at 22.0% ($76 million), amounting to a total of $125 million. This brings the total dividend net of tax for 2001-02 to 15.0 cents per
share ($152 million).
Issued Share Capital
The Company bought 2,054,000 of its shares between 1 April 2001 and 31 March 2002 at a total cost, including brokerage, of $25
million. The issued share capital of the Company was reduced to 1,218,143,622 shares (–0.2%) at 31 March 2002. The total amount
spent to buy back the 64.4 million shares since the re-purchase programme began in September 1999 was $1,011 million ($986 million
up to 31 March 2001, and $25 million from 1 April 2001 to 31 March 2002), including brokerage but excluding Section 44 tax
prepayments of $347 million.
At an extraordinary general meeting on 14 July 2001, the Company’s shareholders approved a capital reduction exercise to return $0.50
in cash for each issued ordinary share, subject to approval of the High Court of Singapore. On 16 August 2001, sanction was granted by
the High Court. $609 million was paid to shareholders on 24 September 2001 based on 1,218,143,622 shares outstanding on that date
after accounting for share buyback.
Share Options
On 2 July 2001, the Company made a third grant of share options to employees. 13,286,140 share options were accepted by eligible
employees to subscribe for ordinary shares for the exercise period 2 July 2002 to 1 July 2011. As at 31 March 2002, options to
subscribe for 38,569,920 ordinary shares remain outstanding under the Employee Share Option Plan.
Issue of Debentures
On 19 December 2001, the Company issued $900 million Fixed Rate Notes due 2011. The net proceeds from the issue of the Notes
were used to finance capital expenditure and working capital requirements.