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Annual Report 03/04
Singapor
Singapor
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e

Table of contents

  • Page 1
    Singapore Singapor e Annual Report 03/04

  • Page 2
    ...16 hours from Singapore to Los Angeles and between 161/ 2 and 181/ 2 hours on the return journey. The record will be broken, in terms of distance, on 28 June 2004, when SIA launches daily non-stop services from Singapore to New York's Newark airport. Registered Address Airline House 25 Airline Road...

  • Page 3
    ... Recovery Network Fleet Promoting Travel and Tourism Product and Service Development Awards and Accolades Alliance Partners Community Relations Our People Safety, Security and Environment Subsidiaries and Associated Companies Corporate Policy Statements List of Awards Risk Management Corporate...

  • Page 4
    ...of all outstanding share options granted to employees. Net asset value per share is computed by dividing shareholders' funds by the number of ordinary shares in issue at 31 March. Dividend cover is profit attributable to shareholders divided by total dividend. R5 R6 R7 02 SIA Annual Report 03/04

  • Page 5
    ... unit cost (cents/ctk) Overall breakeven load factor (%) Employee Productivity (Average) - Company Average number of employees Seat capacity per employee (seat-km) Passenger load per employee (tonne-km) R1 Revenue per employee ($) Value added per employee ($) Employee Productivity (Average) - Group...

  • Page 6
    ... the Finance, Treasury, Corporate Planning, Human Resources, Legal and Corporate Affairs divisions. M r Chew is Chairman of Singapore Aircraf t Leasing Ent erprise (SALE), t he Airline's leasing associat e, and Deput y Chairman of Singapore Airport Terminal Services Lt d. and SIA Engineering Company...

  • Page 7
    ... University in the United States. He was awarded the Public Service Star Award (PBB) in 1999. Davinder Singh Mr Singh, the CEO of Drew and Napier LLC, became a Director of SIA in July 2000. A Director of Petra Foods Private Ltd., Singapore Technologies Private Ltd. and Zagro Asia Ltd., Mr Singh...

  • Page 8
    ...A340-500s Another inspiring development in the last quarter of the year was the arrival of our first three Airbus A340-500s in January 2004, followed by the launch of non-stop services between Singapore and Los Angeles us. Management and the five SIA staff unions have expressed a commitment to work...

  • Page 9
    ...the CEO, heading the areas of Operations and Services, Marketing (including the overseas regions), Corporate Services, Finance, Human Resources and Planning. This change in structure was implemented following the business process review mentioned earlier. Koh Boon Hwee Chairman SIA Annual Report 03...

  • Page 10
    ... Corporate Office Singapore 068906 Ho Kw on Ping Chia Pei-Yuan (from 10 October 2003) Lim Boon Heng Sir Brian Pitman (from 26 July 2003) Board Finance Commit t ee Chairman M embers Fock Siew Wah Chew Choon Seng Charles B Goode Davinder Singh Audit ors Ernst & Young Certified Public Accountants...

  • Page 11
    ... Americas (Singapore Airlines) (until 1 January 2004) Financial year-end 14 May 2004 Karmjit Singh Chief Operating Officer, Singapore Airport Terminal Services Ltd (from 27 May 2004) Announcement of 2003/04 Annual Results 23 June 2004 Teoh Tee Hooi Senior Vice-President, Corporate Services (from...

  • Page 12
    ... Boeing 777 aircraft June 2003 • Last A310 aircraft phased out of the SIA operating fleet 414 Singapore-based office and airport staff and engineering personnel retrenched • • Oct ober 2003 • SIA Group records second quarter profit of $306 million, resulting in a half-year deficit of...

  • Page 13
    ... Airlines Cargo and Japan Airlines Cargo, is launched February 2004 • SIA's A345LeaderShip commences daily non-stop services from Singapore to Los Angeles, the w orld's longest non-stop commercial flight December 2003 • • SIA announces a third quarter profit of $378 million and returns...

  • Page 14
    ... in the form of w age cuts and no-pay leave to help ensure the long-term viability of the Airline. Under a special scheme, 143 staff took early retirement. in terms of available seat kilometres (ASKs). By M ay 2003, at the peak of SARS, a total of 358 out of 719 scheduled frequencies per w eek w ere...

  • Page 15
    ... from Singapore to Los Angeles, featuring SIA's new ultra-long-range A340-500 aircraft, dubbed the A345LeaderShip . A new record w ill be set on 28 June 2004, w hen SIA launches an even longer non-stop flight betw een Singapore and New York's New ark airport. As at M arch 31, 2004, SIA's passenger...

  • Page 16
    14 SIA Annual Report 03/04

  • Page 17
    ... tour operators, SIA managed to secure significant contributions from these partners in offering a compelling package that drew thousands to Singapore and beyond. The SIA Fabulous Offer w on the Airline the 2004 Pacific Asia Travel Association (P ATA) Gold Aw ard for marketing excellence. SIA also...

  • Page 18
    ... are also available on SIA's B747-400 aircraft. Food and Beverage Yummy! SIA's Book-The-Cook service for young First and Raffles Class passengers, took to the skies on 27 M arch 2004. Boasting a selection of 12 favourites, this meals-on-demand product for children 16 SIA Annual Report 03/04

  • Page 19
    ...in Hong Kong. The partnership w ith Amex (M embership Rew ards) w as also extended to include the New Zealand market, and a year long promotional campaign to promote the American Express-Singapore Airlines KrisFlyer Gold Credit Card w as launched in Singapore in December 2003. SIA Annual Report 03...

  • Page 20
    ..., Best Airline Based in Asia and lauded as having both the Best International First Class and Best Economy Class. US travel magazine Conde Nast Traveler presented SIA w ith its 2003 Alliance Partners Star Alliance w elcomed Spanair and LOT Polish Airlines into the Alliance in the year in review...

  • Page 21
    ...Bata), SIA supported the Shooting Star Trust, a charity based in the United Kingdom to raise funds to build, equip and run a hospice for children w ith life-limiting medical conditions. The Shooting Star Children's Hospice is due to open in the summer of 2004. It w ill provide free medical treatment...

  • Page 22
    ... 15 per cent if the annual profit attributable to share-holders topped $600 million. This figure w as subsequently exceeded. At the end of the financial year, the staff strength of the SIA Group w orldw ide stood at 28,707. Of these, 13,456 w ere employed by the Airline and the remainder by its...

  • Page 23
    SIA Annual Report 03/04 21

  • Page 24
    ... Air Wing, Global Supply Systems, Iberia, Islandsflug, Northwest Airlines and Pegasus to its airframe maintenance, component overhaul and fleet management programmes. The latter programme provides customers with high value-added services, such as fleet and inventory technical management. Singapore...

  • Page 25
    ... as a Director of the Board. On 2 January 2004, M r Ng Chin Hw ee Singapore Flying College In the latter half of the year, the College saw the expansion of training operations both in Singapore and in Jandakot, in line w ith the increasing need for pilots in the SIA Group. As the higher demand is...

  • Page 26
    24 SIA Annual Report 03/04

  • Page 27
    ... the second year in succession. According to the latest available IATA statistics, SIA Cargo is the w orld's second largest international cargo airline, based on freight tonne-kilometres carried. At the end of the year in review, SIA Cargo operated to 67 cities in 36 countries. SIA Annual Report 03...

  • Page 28
    ... Total security is of paramount importance to the Company. It is therefore the responsibility of all employees to exercise care and vigilance in their respective functions so as to ensure the security of our passengers, staff, tangible assets and premises. Safety & Health Policy Singapore Airlines...

  • Page 29
    ...2003 AB Road (Japan) Airline Ranking 2003 survey Top in onboard entertainment system, aircraft facilities, airline choice regardless of class, and ranked number one overall December 2003 Galileo-Express Travel Travel & Tourism Award (India) Best Eastbound International Airline Reader's Digest Asia...

  • Page 30
    ... of Long-Term Planning Risks This looks into the threats and events that may affect long-term goals and objectives. The Board and senior management reviews the corporate business plans adopted and considers the corresponding risks surfaced under the risk management process. 28 SIA Annual Report 03...

  • Page 31
    ...and Strategic Risks Review The SIA Board carried out a review of Group and Company strategy in October 2003, to develop strategies to exploit opportunities as well as to manage the corresponding risks to the long-term growth and success of the Group. d) Implementation of Risk Management Framework in...

  • Page 32
    ... The Board is committed and w ill continue to uphold the highest standards of corporate governance w ithin the Company and the SIA Group of companies, in accordance w ith the Code. varied expertise in finance, legal, industry, business, labour and management fields. M anagement briefs new Directors...

  • Page 33
    ...in the Board, w ith the Nominating Committee considering 7 out of 11 directors to be independent. Koh Boon Hw ee and Fock Siew Wah are Temasek's nominees. Lim Boon Heng is a M inister (Prime M inister's Office), and Chew Choon Seng is the Chief Executive Officer of the Company. SIA Annual Report 03...

  • Page 34
    ..., updates on business development, monthly management accounts, and productivity and performance indicators, as w ell as matters for the decision or information of the Board. The Company's Articles of Association provide that one-third of the Directors for the time being, or, if their number is not...

  • Page 35
    ... and Articles of Association, law s and regulations, and the Singapore Exchange Securities Trading Limited (SGX-ST) Listing M anual • communicating w ith the SGX-ST, the Accounting & Corporate Regulatory Authority, and Shareholders on behalf of the Company • performing such other duties of...

  • Page 36
    ... The following table shows the constitution (in percentage terms) of the remuneration of directors, including those appointed and resigned/retired during the year, in bands of $250,000. The remuneration of Directors as disclosed is computed based on the net fees payable. 34 SIA Annual Report 03/04

  • Page 37
    ... - Cheong Choong Kong retired from the Company on 9 June 2003. Includes profit-sharing bonus determined on an accrual basis for the financial year ended 31 M arch 2004. None of the employees of the Company w ere an immediate family member of any Director or the Chief Executive Officer, and w hose...

  • Page 38
    ... Financial Reporting Review ed the quarterly, interim and annual financial statements and financial announcements required by the SGX-ST w ith management before submitting to the Board for approval. The review s focused on changes in accounting policies and practices, major judgmental and risk areas...

  • Page 39
    ... SGX-ST Best Practices Guide. With the recent adoption of quarterly reporting, the Company prohibits selected employees from trading in its securities for the period commencing 2 w eeks from announcement of quarterly results; and a period commencing 1 month from the announcement of year-end results...

  • Page 40
    ... Member Davinder Singh Member Member Chairman Chia Pei-Yuan Member Member Name Main Board Board Executive Committee Audit & Risk Committee Board Finance Committee Board Compensation & Organization Nominating Committee Committee Safety & Reliability Committee 38 SIA Annual Report 03/04

  • Page 41
    ...Limited Wing Tai Holdings Limited Fock Siew Wah Fraser & Neave Ltd DBS Group Holdings Ltd Ho Kwon Ping Standard Chartered PLC Laguna Resorts & Hotels Public Company Limited Thai Wah Food Products Public Company Limited Charles B Goode Australia and New Zealand Banking Group Limited Australian United...

  • Page 42
    ... Quarterly Results of the Group Five-Year Financial Summary of the Group Ten-Year Statistical Record Ten-Year Charts The Group Fleet Profile Group Corporate Structure Information on Shareholdings Share Price and Turnover 41 57 62 63 64 65 66 68 70 108 109 110 112 114 115 116 118 120 40 SIA Annual...

  • Page 43
    ... $849 million (-20.2 per cent) • Basic earnings per share 69.7 cents (-20.2 per cent) • Shareholders' funds $11,455 million (+7.0 per cent) • Net asset value $9.40 per share (+6.9 per cent) • Total debt equity ratio 0.20 times (unchanged from previous year) SIA Annual Report 03/04 41

  • Page 44
    ... Shareholders Operating Profit Group Profitability Ratios 25 20 15 Cents 70 10 5 0 1999-00 2000-01 2001-02 2002-03 2003-04 35 140 105 Percent 0 42 Basic Earnings Per Share (¢) Return on Turnover (%) Return on Average Shareholders' Funds (%) Return on Average Total Assets (%) SIA Annual Report...

  • Page 45
    ... 0.20 times. Group Shareholders' Funds, Total Assets and Net Asset Value (NAV) Per Share 25,000 20,000 15,000 10,000 5,000 0 2000 2001 2002 2003 31 March 2004 10 8 6 4 2 0 -1,000 2000 2001 2002 31 March 2003 2004 -1,000 2,000 1,500 1,000 $ Million Dollars 500 0 -500 Group Net Liquid Assets and Net...

  • Page 46
    ... as follows: To employees - Salaries and other staff costs To government - Corporation taxes To suppliers of capital - Interim and proposed dividends - Finance charges - Minority interests Retained for future capital requirements - Depreciation - Retained profit Total value added 4,035.7 4,367...

  • Page 47
    ...1.8 Dollar 1.2 0.6 0 $ Million 1,500 1,000 500 0 1999-00 2000-01 2001-02 2002-03 R1 1,500 1,000 500 0 2003-04 Retained in the Business Employees Suppliers of Capital Government R1 Value Added Per $ Employment Cost Value Added Per $ Revenue Value Added Per $ Investment in Fixed Assets Excludes...

  • Page 48
    ...,397 - - 5.6 6.0 Group Average Staff Strength and Productivity 50,000 40,000 Staff Number 30,000 20,000 10,000 0 1999-00 2000-01 2001-02 2002-03 2003-04 400 320 240 160 80 0 $ '000 Average Staff Strength Revenue Per Employee ($'000) Value Added Per Employee ($'000) 46 SIA Annual Report 03/04

  • Page 49
    ... Seat-km Revenue Passenger-km A review of the Company's operating performance by route region is as follows: By Route Region R1 (2003-04 against 2002-03) Passengers carried Passenger KM Available Seat KM Change (thousands) % Change % Change East Asia Americas Europe South West Pacific West Asia...

  • Page 50
    ... $ million % Change Revenue Expenditure Operating Profit Finance charges Interest income Surplus on disposal of aircraft, spares and spare engines Surplus/(loss) on disposal of other fixed assets Dividends from subsidiary and associated companies, gross Dividends from long-term investments, gross...

  • Page 51
    ...) Revenue The Company's revenue decreased 10.7 per cent to $7,188 million as follows: 2003-04 2002-03 $ million $ million % Change Passenger revenue Excess baggage revenue Non-scheduled services Bellyhold revenue from SIA Cargo Direct operating revenue Indirect operating revenue Total operating...

  • Page 52
    Financial Review Performance of the Company (continued) Revenue (continued) A breakdown of passenger revenue R1 by route region and area of original sale is shown below: By Route Region ($ million) By Area of Original SaleR2 ($ million) 2003-04 2002-03 % Change 2003-04 2002-03 % Change East Asia...

  • Page 53
    ... Other costs mainly comprised crew expenses, company accommodation costs, exchange loss, comprehensive aviation insurance costs, airport lounge expenses, non-information technology contract and professional fees, expenses incurred to mount non-scheduled services, aircraft licence fees and recoveries...

  • Page 54
    ... of new B777 and A340-500 aircraft, and phase-out of the older A310-300 aircraft. A change in fuel productivity (passenger aircraft) of 1.0 percent would impact the Company's annual fuel costs by about $14 million, before accounting for changes in fuel price, USD exchange rate and flying operations...

  • Page 55
    ... (administrative and higher ranking officers) Technical crew Cabin crew Other ground staff 1,368 1,873 6,678 4,091 1,451 1,832 6,768 4,367 - + - - - 5.7 2.2 1.3 6.3 2.8 14,010 14,418 Location Singapore East Asia Europe South West Pacific West Asia and Africa Americas 11,545 1,064...

  • Page 56
    ... employee share options. Performance of Subsidiary Companies There were 24 subsidiary companies in the SIA Group as at 31 March 2004. The major subsidiary companies are Singapore Airport Terminal Services Limited (SATS), SIA Engineering Company Limited (SIAEC), Singapore Airlines Cargo Private...

  • Page 57
    .... Return on average shareholders' funds was 15.9 per cent, a decrease of 11.1 percentage points from 2002-03. Basic earnings per share fell 31.7 per cent to 14.0 cents. Singapore Airlines Cargo 2003-04 2002-03 $ million $ million % Change Total revenue Total expenditure Operating profit Profit...

  • Page 58
    ... network. As a result, operating profit fell 41.0 per cent (-$11 million) because revenue contracted $27 million, but expenditure only fell $16 million (mainly from lower handling charges, inflight meal costs, airport charges and provision for profit-sharing bonus). Unit cost rose slightly (+0.1 per...

  • Page 59
    ...debentures of, the Company or any other body corporate, other than pursuant to the Singapore Airlines Limited Employee Share Option Plan. 3 Directors' Interests in Ordinary Shares, Share Options and Debentures The following directors who held office at the end of the financial year have, according...

  • Page 60
    ... 10 years from the date of grant. The exercise price of the option will be the average of the closing prices of the Company's ordinary shares on the Singapore Exchange Securities Trading Limited ("SGX-ST") for the five market days immediately preceding the date of grant. 58 SIA Annual Report 03...

  • Page 61
    Report by the Board of Directors 5 Options on Shares in the Company (continued) Under the Employee Share Option Scheme, options will vest two years after the date of grant. Under the Senior Executive Share Option Scheme, options will vest: (a) one year after the date of grant for 25% of the ...

  • Page 62
    ... options on shares in subsidiary companies are as follows: (a) Singapore Airport Terminal Services Limited ("SATS") The Singapore Airport Terminal Services Limited Employee Share Option Plan ("SATS ESOP"), which comprises the Senior Executive Share Option Scheme and the Employee Share Option Scheme...

  • Page 63
    ... on Corporate Governance. 7 Auditors The auditors, Ernst & Young, Certified Public Accountants, have expressed their willingness to accept re-appointment. On behalf of the Board, KOH BOON HWEE Chairman CHEW CHOON SENG Chief Executive Officer Dated this 14th day of May 2004 SIA Annual Report 03...

  • Page 64
    ... (ii) at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. On behalf of the Board, KOH BOON HWEE Chairman CHEW CHOON SENG Chief Executive Officer Dated this 14th day of May 2004 62 SIA Annual Report 03/04

  • Page 65
    ... Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2004, changes in equity of the Group and of the Company, the results and cash flows of the Group for the financial year ended on that date; and (b) the accounting...

  • Page 66
    ... assets Aircraft maintenance and overhaul costs Commission and incentives Landing, parking and overflying charges Handling charges Rentals on leased aircraft Material costs Inflight meals Advertising and sales costs Insurance expenses Company accommodation and utilities Other passenger costs Crew...

  • Page 67
    ...516.0 14,360.5 Represented by: FIXED ASSETS Aircraft, spares and spare engines Land and buildings Others GOODWILL ON CONSOLIDATION SUBSIDIARY COMPANIES ASSOCIATED COMPANIES JOINT VENTURE COMPANIES LONG-TERM INVESTMENTS CURRENT ASSETS Section 44 tax prepayments Stocks Trade debtors Amounts owing by...

  • Page 68
    ... Share of an associated company's capital reserve Gain on dilution of interest in subsidiary companies due to share options exercised Net gains and losses not recognized in the profit and loss account Profit attributable to shareholders for the financial year Dividends Balance at 31 March 2004...

  • Page 69
    ...of Changes in Equity For the financial year ended 31 March 2004 (in $ million) The Company Capital Share Share redemption General Notes capital premium reserve reserve Total Balance at 31 March 2002 Share options exercised Net gains and losses not recognized in the profit and loss account Profit...

  • Page 70
    ... financial year ended 31 March 2004 (in $ million) The Group Notes 2003-04 2002-03 NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure Proceeds from disposal of aircraft and other fixed assets Return of capital from joint venture companies Return of...

  • Page 71
    ... year ended 31 March 2004 (in $ million) During the year, the Company disposed of its 51% equity interest in Aviation Software Development Consultancy India Limited. This was shown in the statement as a single item. The effects of the individual assets and liabilities and the results for the year...

  • Page 72
    ...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...

  • Page 73
    ... with in the profit and loss account. For the purposes of the Group financial statements, the net assets of the foreign subsidiary, associated and joint venture companies are translated into Singapore dollars at the exchange rates ruling at the balance sheet date. The financial results of foreign...

  • Page 74
    ... Statements 31 March 2004 2 Accounting Policies (continued) (g) Depreciation of fixed assets (continued) Aircraft fleet The Group depreciates its new passenger aircraft, spares and spare engines over 15 years to 10% residual values. For used passenger aircraft, the Group depreciates them over...

  • Page 75
    ... are defined as cash on hand, demand deposits and short-term, highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value. Cash on hand, demand deposits and short-term deposits which are held to maturity are carried at cost. For the...

  • Page 76
    ... aircraft are accrued equally over the remaining lease terms. (p) Employee Benefits Equity compensation plans The Group has in place the Singapore Airlines Limited Employee Share Option Plan, the Singapore Airport Terminal Services Limited Employee Share Option Plan and the SIA Engineering Company...

  • Page 77
    ... to previously reported amounts. This change has increased current year's revenue of the Group and the Company by approximately $28.2 million. (v) Training and development costs Training and development costs, including start-up program costs, are charged to the profit and loss account in the...

  • Page 78
    ... revenue and profit information regarding business segments for the financial years ended 31 March 2004 and 2003 and certain assets and liabilities information of the business segments as at those dates. Airline operations Airport terminal services 2003-04 2002-03 2003-04 2002-03 TOTAL REVENUE...

  • Page 79
    ...services Others Total...249.3 (111.0) (130.0) 895.3 (46.0) 1,119.3 (54.5) 849.3 1,064.8 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 801.1 301.1 - 19.6 - 0.5 - 762.9 305.0 - 24.5 - ... - (6.8) (38.1) - - 1,180.2 28.0 (142.5) 1,090.3 43.2 (137.7) SIA Annual Report 03/04 77

  • Page 80
    ... table presents revenue information on airline operations by geographical areas for the financial years ended 31 March 2004 and 2003. By area of original sale 2003-04 2002-03 East Asia Europe South West Pacific Americas West Asia and Africa System-wide Non-scheduled services and incidental...

  • Page 81
    ... to the Financial Statements 31 March 2004 6 Operating Profit (in $ million) Operating profit for the financial year was arrived at after charging/(crediting): The Group 2003-04 2002-03 Interest income from short-term investments Dividend income from short-term investments (Surplus)/loss on...

  • Page 82
    ... fixed assets from its Engine Overhaul Division to Eagle Services Asia Private Limited ("ESA") and the subsequent divestment of 51% interest in ESA to Pratt & Whitney. Following the closure of this matter during the financial year, the provision is no longer required. 80 SIA Annual Report 03...

  • Page 83
    ...22.0% tax) 109.6 124.7 - 57.0 109.6 181.7 The directors propose that a final tax exempt (one-tier) dividend of 25.0 cents per share amounting to $304.5 million (2002-03: $109.6 million tax exempt [one-tier]), be paid for the financial year ended 31 March 2004. SIA Annual Report 03/04 81

  • Page 84
    ... rights as those of ordinary shares, whether partially paid or otherwise. These shares will be issued only when the directors determine that the Company's operating rights under any of the ASAs are threatened by reason of the nationality of the majority shareholders. 82 SIA Annual Report 03/04

  • Page 85
    ...31 March 2004 13 Share Capital (in $ million) (continued) Share option plans The Singapore Airlines Limited Employee Share Option Plan ("SIA ESOP"), the Singapore Airport Terminal Services Limited Employee Share Option Plan ("SATS ESOP") and the SIA Engineering Company Limited Employee Share Option...

  • Page 86
    ... by employees who have completed their fixed term contracts during the financial year. The said options, if unvested, shall immediately vest and be exercisable from the date of cessation of employment to the date falling 1 year from the date of cessation of employment. 84 SIA Annual Report 03...

  • Page 87
    ...,600 68,911,300 @ 39,256,575 @ The total number of options outstanding includes 3,943,075 share options not exercised by employees who have retired or ceased to be employed by Singapore Airport Terminal Services Limited or any of its subsidiary companies by reason of (i) ill health, injury or...

  • Page 88
    ... of employment. 14 Deferred Account (in $ million) The Company 31 March 2004 2003 2004 2003 The Group 31 March Deferred gain on sale and leaseback transactions - operating leases - finance leases 391.3 55.4 446.7 463.7 59.4 523.1 391.2 - 462.7 - 391.2 462.7 86 SIA Annual Report 03...

  • Page 89
    ... during the year Adjustment for reduction in Singapore statutory tax rate Under/(over) provision in respect of prior years Balance at 31 March The deferred taxation arises as a result of: Deferred tax liabilities An excess of net book value over tax written down value of fixed assets Other taxable...

  • Page 90
    ...-leased to Singapore Airlines Cargo Pte Ltd ("SIA Cargo") in 2001-02, as part of Cargo Division's corporatization. Both finance leases mature in 2007 without any options for renewal. The leases have options for the Company to purchase the aircraft at the end of the lease period of 12.5 years. 1 of...

  • Page 91
    Notes to the Financial Statements 31 March 2004 16 Long-Term Liabilities (in $ million) (continued) Future lease payments under these finance leases are as follows: The Group The Company 31 March 31 March 2004 2003 2004 2003 Minimum Repayment Minimum Repayment Minimum Repayment Minimum Repayment ...

  • Page 92
    ... Statements 31 March 2004 17 Fixed Assets (in $ million) The Group Disposals/ Provision for 1 April 03 Additions Transfers impairment 31 March 04 Cost Aircraft Aircraft spares Aircraft spare engines Freehold land and buildings Leasehold land and buildings Plant and equipment Office and computer...

  • Page 93
    ... The Company 31 March 2004 2003 2004 2003 The Group 31 March Net book value of fixed assets acquired under finance leases: - aircraft - plant and equipment 967.4 137.4 456.4 159.7 - - - - 1,104.8 616.1 - - Advance and progress payments comprise mainly purchases of aircraft, related...

  • Page 94
    ... terms. Interest on funds from subsidiary companies are computed using prevailing market rates which ranged from 0.25% to 0.90% (2002-03: 0.13% to 1.51%) per annum for Singapore Dollar funds, and from 0.93% to 1.40% (2002-03: 1.18% to 1.94%) per annum for US Dollar funds. 92 SIA Annual Report...

  • Page 95
    ... Cargo Community Network Pte Ltd Singapore Airlines (Mauritius) Ltd* SIA (Mauritius) Ltd** Aviation Software Development Consultancy India Limited @ Investment holding company Airport ground handling Inflight aviation catering Security services Laundry and linen services Dormant company Air cargo...

  • Page 96
    ... is included under the Group's share of post-acquisition capital reserve (refer to Statement of Changes in Equity - The Group for the financial year ended 31 March 2004). On 19 December 2003, the Company together with Temasek Holdings (Private) Limited, Indigo Partners and Irelandia Investments Ltd...

  • Page 97
    .... Ltd Quality service training Air transportation Air transportation Aircraft leasing Hotel ownership and management Inflight catering services Inflight catering services Investment holding company Inflight catering services Singapore UK Singapore Bermuda Singapore Pakistan India Singapore People...

  • Page 98
    ... Coopers, Hong Kong. Audited by Pricewaterhouse Coopers, Singapore. The value is $1. 21 Joint Venture Companies (in $ million) The Company 31 March 2004 2003 2004 2003 The Group 31 March Investment in joint venture companies (unquoted, at cost) Share of post acquisition reserves - general reserve...

  • Page 99
    ...million in Singapore Aircraft Leasing Enterprise Pte Ltd in accordance with the joint venture agreement. During the financial year, International Engine Component Overhaul Pte Ltd returned $0.9 million to SIA Engineering Company Limited pursuant to a capital reduction exercise. SIA Annual Report 03...

  • Page 100
    ...is unsecured and bears interest between 0.63% and 1.88% (2002-03: 1.88% and 2.75%) per annum. The loan has no fixed repayment term. Loan to Taikoo (Xiamen) Aircraft Engineering Company Limited of US$0.5 million (2003: US$0.5 million) was repaid during the financial year. 98 SIA Annual Report 03/04

  • Page 101
    ... stock obsolescence is as follows: The Company 31 March 2004 2003 2004 2003 The Group 31 March Balance at 1 April Provided during the year Provision utilized during the year Balance at 31 March Stocks written-off directly to profit and loss account Stocks are stated at: Cost Net realizable value...

  • Page 102
    ...2.8 (2.2) 0.6 0.7 2.1 - - - - 2.8 - - 26 Cash and Bank Balances (in $ million) The Company 31 March 2004 2003 2004 2003 The Group 31 March Fixed deposits Cash and bank 1,137.1 381.4 528.2 291.7 918.3 172.3 306.2 122.5 1,518.5 819.9 1,090.6 428.7 100 SIA Annual Report 03/04

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    ... a building at 22 Senoko Way Singapore 758095. Interest is charged at rates ranging from 3.50% to 3.75% per annum in the current financial year. 29 Cash Flow from Operating Activities (in $ million) The Group 2003-04 2002-03 Profit before taxation Adjustments for: Depreciation of fixed assets...

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    ... confer on the Company an option to purchase the related aircraft. Sub-leasing is allowed under all the lease arrangements. SilkAir (Singapore) Private Limited ("SilkAir") has 1 A320-232 aircraft under operating lease with fixed rental rates. The lease term is 2 years. It holds the option to...

  • Page 105
    ... at the Chiang Kai Shek International Airport, Taipei en route to Los Angeles. There were 83 fatalities among the 179 passengers and crew members aboard the Boeing 747 aircraft. On 26 April 2002, the Taiwan Aviation Safety Council released its final investigation report on the accident. Whilst the...

  • Page 106
    ...in various currencies. The Group's airline operations carry certain financial and commodity risks, including the effects of changes in jet fuel prices, foreign currency exchange rates, interest rates and the market value of its investments. The Group's overall risk management approach is to moderate...

  • Page 107
    ...one of its subsidiary company have maturity dates between one month to ten years. The Group's holdings of cash and short-term deposits, together with committed funding facilities and net cash flow from operations, are expected to be sufficient to cover the cost of all firm aircraft deliveries due in...

  • Page 108
    ...on either acquisition cost or the attributable net assets of those companies. The carrying values of the long-term lease commitments approximate their fair values as they are based on LIBOR. The fair value of forward currency contracts is determined by reference to current forward exchange rates for...

  • Page 109
    ... Airport Services") for US$60 million. JAS Airport Services is a major ground and cargo handling company in Indonesia. Listed on the Surabaya Stock Exchange, it has operations at 11 Indonesian airports, including Jakarta, Surabaya, Denpasar/Bali and Medan. On 26 April 2004, Singapore Airlines Cargo...

  • Page 110
    ... Information Required by the Singapore Exchange Securities Trading Limited 1 Interested Persons Transactions (in $ million) Interested persons transactions carried out during the financial year by the Group (excluding SIA Engineering Company Limited and Singapore Airport Terminal Services Limited...

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    Quarterly Results of the Group 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total TOTAL REVENUE 2003-04 2002-03 TOTAL EXPENDITURE 2003-04 2002-03 ($ ...TAXATION) PER SHARE - BASIC 2003-04 (cents) 2002-03 (cents) (25.6) 39.3 25.1 24.2 31.0 14.8 39.2 9.1 69.7 87.4 SIA Annual Report 03/04 ...

  • Page 112
    ...PROFIT AND LOSS ACCOUNT ($ million) Total revenue Total expenditure Operating profit Finance charges Interest income Surplus on disposal of aircraft, spares and spare engines Surplus/(loss) on disposal of other fixed assets Dividend from long-term investments, gross Provision for diminution in value...

  • Page 113
    ...) Dividend cover (times) PROFITABILITY RATIOS (%) Return on shareholders' funds R5 Return on total assets R6 Return on turnover R7 PRODUCTIVITY AND EMPLOYEE DATA Value added ($ million) Value added per employee ($) R8 Revenue per employee ($) R8 Average employee strength S$ per US$ exchange rate as...

  • Page 114
    ...-Year Statistical Record 2003-04 2002-03 2001-02 SIA FINANCIAL R1 Total revenue Total expenditure Operating profit Profit before taxation Profit after taxation Capital disbursements R2 Passenger - yield - unit cost - breakeven load factor OPERATING PASSENGER FLEET Aircraft Average age PASSENGER...

  • Page 115
    ...-Year Statistical Record 2000...966 291,494 13,690 - - 526,859 228,254 13,506 - - 524,012 236,828 13,258 - - 500,649 221,044 12,966 - - 490,591 210,319 12,557 - - 481,365 215,091 975.4 6,075.2 92....5 3,389.4 72.7 4,773.6 72.5 - - - 7,789.3 11,167.3 69.8 73.6 46.0 62.5 SIA Annual Report 03/04 113

  • Page 116
    ... Industry Wide 180 150 Age (Months) 120 90 60 30 0 95 96 97 98 99 00 31 March 01 02 03 04 180 150 120 90 60 30 0 Age (Months) Industry Wide R2 SIA Average age of SIA passenger fleet: 5 years (as at 31 March 2004). R2 Source: Avsoft Information Systems, Ruby, England. 114 SIA Annual Report 03/04

  • Page 117
    ...SilkAir respectively. Average Seats in age in Expiry of operating lease Finance Operating standard years (y) and On firm Aircraft type Owned lease lease Total configuration months (m) 2004-05 2005-06 order On option SIA R1: B747-400 B777-200 B777-200A B777-200ER B777-300 A340-500 A380-800 R3...

  • Page 118
    ...and General Insurance Company (Pte) Limited 100% SIA Properties (Pte) Ltd 100% Singapore Flying College Pte Ltd 100% Sing-Bi Funds Private Limited 100% Singapore Airlines Cargo Private Limited 100% SIA (Mauritius) Ltd 76% Singapore Airport Duty-Free Emporium (Private) Limited 50% Service Quality (SQ...

  • Page 119
    ...Air Cargo Services Corporation 24.5% Asia Airfreight Terminal Company Ltd 24% Singapore Airport Duty-Free Emporium (Private) Limited 20% Evergreen Airline Services Corporation 20% MacroAsia-Eurest Catering Services Inc. 100% SIAEC Global Pte Ltd 65% Singapore Jamco Private Limited 50% International...

  • Page 120
    ...,799,693 76,189,239 1,083,599,642 1,218,144,623 0.13 4.66 6.25 88.96 100.00 100.00 Location of accounts Number of shares % Number of accounts Singapore United Kingdom United States Others Total Range of Shareholdings 6.52% 0.06% 14.48 % 8.77% 883,680,121 137,203,295 106,842,385 90,418,822...

  • Page 121
    Information on Shareholdings As at 27 May 2004 Major shareholders Number of shares 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Temasek Holdings (Private) Limited Raffles Nominees Pte Ltd DBS Nominees Pte Ltd HSBC (Singapore) Nominees Pte Ltd Citibank Nominees Singapore Pte Ltd United ...

  • Page 122
    ...Price/Earnings Price/Book value Price/Cash earnings R2 R1 R2 12.90 8.25 11.00 14.40 8.55 8.75 15.78 1.17 6.60 10.01 1.00 4.95 Based on closing price on 31 March and Group numbers. Cash earnings is defined as profit after taxation and minority interests plus depreciation. 120 SIA Annual Report...

  • Page 123
    ... Auditors' Report thereon. 2. To declare a final tax exempt dividend of 25.0 cents per $0.50 ordinary share for the year ended 31 March 2004. 3. To re-appoint Sir Brian Pitman, a Director who will retire under S 153(6) of the Companies Act, Cap 50, to hold office from the date of this Annual General...

  • Page 124
    ... appointed in relation to the liquidation of the Company for each ASA Share, partly paid at the price of S$0.01 to the Minister for Finance (Incorporated), and on such terms and subject to such conditions, as the Directors may in their absolute discretion deem fit; (b) make dividend payments out of...

  • Page 125
    ...relevant terms of the equal access scheme for effecting off-market purchase; "Maximum Limit" means that number of issued Ordinary Shares representing ten per cent of the issued ordinary share capital of the Company as at the date of the passing of this Resolution; and "Maximum Price", in relation to...

  • Page 126
    ... with its practice. The final dividend, if so approved by shareholders, will be paid on 16 August 2004. By Order of the Board Foo Kim Boon Company Secretary 23 June 2004 Singapore Additional Information relating to the Notice of Annual General Meeting: 1. In relation to Ordinary Resolution No...

  • Page 127
    ... attend and vote instead of him. A proxy need not be a member of the Company. 2. The instrument appointing a proxy or proxies must be deposited at Robinson Road Post Office, P O Box 3911, Singapore 905911 not less than 48 hours before the time appointed for the Meeting. SIA Annual Report 03/04 125

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    Singapore Company Registration Number: 197200078R MITA Permit Number: 059/05/2004 Design and Production by Citigate Su Yeang Design Printed by HoBee Print Pte Ltd

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