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72 SIA Annual Report 02/03
Notes to the Financial Statements
31 March 2003
1 General
Singapore Airlines Limited ("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 passenger and cargo air transportation, airport terminal services,
engineering services, training of pilots, air charters and tour wholesaling and related activities. The principal activity of the
Company consists of passenger air transportation.
The financial statements for the financial year ended 31 March 2003 were authorized for issue in accordance with a
resolution of the directors on 21 May 2003.
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 policy
SAS 20 The Effects of Changes in Foreign Exchange Rates
The revised SAS 20 came into effect on 1 April 2002. Accordingly, the financial results of foreign subsidiary, associated
and joint venture companies are now translated into Singapore dollars at the annual average exchange rates.
Previously, such results were translated at exchange rates prevailing at the balance sheet date. The change in
accounting policy was applied prospectively because the financial effect of adopting the revised SAS 20 was not
significant.
(b) Consolidation
The consolidated financial statements incorporate the financial statements of the Company and all its subsidiary
companies for the financial year ended 31 March. A list of the Group’s subsidiary companies is shown in note 20 to
the financial statements.
(c) Subsidiary, associated and joint venture companies
Shares in subsidiary, associated and joint venture companies are stated at cost, less provision for impairment in value.
An associated company is defined as a company, not being a subsidiary company or joint venture company, in which
the Group has a long-term interest of not less than 20% in the equity and in whose financial and operating policy
decisions the Group exercises significant influence.
The Group’s share of the results of associated companies, with appropriate adjustments to account for the
amortization of goodwill, is included in the consolidated profit and loss account. The Group’s share of the post-
acquisition reserves is added to the value of investments in associated companies shown on the consolidated
balance sheet. An assocate in airline business adopts different accounting policies for its treatment of frequent
flyer programmes and aircraft maintenance and overhaul. It is not practicable for such adjustments to be calculated
to align these to the Group’s policies. A list of the Group’s associated companies is shown in note 21 to the
financial statements.
A joint venture company is defined as a company, not being a subsidiary company, in which the Group has a
long-term interest of not more than 50% in the equity and has joint control of the company’s commercial and
financial affairs.
The Group’s share of the consolidated results of the joint venture companies and their subsidiary companies are
included in the consolidated financial statements under the equity method on the same basis as associated
companies. A list of the Group’s joint venture companies is shown in note 22 to the financial statements.
(d) Goodwill
When subsidiary companies or interests in associated and joint venture companies are acquired, any excess of the
consideration over the fair value of the net assets as at the date of acquisition represents goodwill. Goodwill arising
from business combinations on or after 1 April 2001 is amortized using the straight-line method over a period not
exceeding twenty years.