Singapore Airlines 2002 Annual Report Download - page 65

SIA Annual Report 01/02 65
Notes to the Financial Statements
31 March 2002
1 General
The Company is a limited liability company incorporated in the Republic of Singapore which is also the place of domicile. The
Company is a subsidiary company of Temasek Holdings (Private) Limited, incorporated in the Republic of Singapore.
The registered office of the Company is at Airline House, 25 Airline Road, Singapore 819829.
The principal activities of the Group consist of air transportation, engineering services, airport terminal services, training of pilots,
air charters and tour wholesaling and related activities. The principal activities of the Company up to 30 June 2001 consisted of
passenger and cargo air transportation. On 1 July 2001, the cargo division operations of the Company were corporatized into a
separate wholly-owned subsidiary, Singapore Airlines Cargo Private Limited.
The consolidated financial statements of Singapore Airlines Limited (“the Company”) for the year ended 31 March 2002 were
authorized for issue in accordance with a resolution of the directors on 17 May 2002.
2 Accounting Policies
The main accounting policies of the Group, which have been consistently applied except where indicated otherwise, are described in
the following paragraphs.
(a) Basis of accounting
The financial statements of the Group and of the Company, which are expressed in Singapore dollars, are prepared under the
historical cost convention and in accordance with Singapore Statements of Accounting Standard (SAS) and applicable
requirements of the Companies Act, Cap. 50.
Change in accounting policies
During the year, the Group and the Company applied several new/revised Statements of Accounting Standards, which became
effective from 1 April 2001, and accordingly modified certain accounting policies. These changes to the financial statements are
discussed below. The financial effects of these changes which are, unless otherwise stated, applied retrospectively, are as
summarized in the Statement of Changes in Equity.
SAS 10 (2000) Events after the Balance Sheet Date
Under SAS 10 (2000), dividends proposed or declared after the balance sheet date are no longer recognized as a liability at the
balance sheet date.
SAS 12 (2001) Income Taxes
Under SAS 12 (2001), a deferred tax liability is now recognized for all taxable temporary differences. Previously, deferred tax was
provided on account of timing differences only to the extent that a tax liability was expected to materialize in the foreseeable
future. A cumulative amount of $1,800.0 million was also retained in a special non-distributable reserve to meet deferred tax
liabilities that were not provided for. This special non-distributable reserve has been utilized in accounting for this change in policy.
SAS 22 (2000) Business Combinations
Goodwill arising from business combinations on or after 1 April 2001 is capitalized and amortized over a useful period not
exceeding twenty years. Such goodwill was previously written-off directly to reserves in the year of acquisition. As SAS 22 (2000)
has been applied on a prospective basis, the gain or loss arising from a subsequent disposal of a previously acquired subsidiary
or associated company will include the attributable goodwill that was written-off directly to reserves.
SAS 31 (2000) Provisions, Contingent Liabilities and Contingent Assets
Costs incurred for engine overhaul and heavy maintenance visits are now recognized on an incurred basis. Under SAS 31 (2000),
the previous practice of evenly providing for engine overhaul and heavy maintenance visits costs over a four-year period is no
longer allowed.
As allowed for in SAS 31 (2000), the comparative figures for the financial year ended 31 March 2001 have not been restated.