Singapore Airlines 2004 Annual Report Download - page 72

Notes to the Financial Statements
31 March 2004
70 SIA Annual Report 03/04
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 2004 were authorized for issue in accordance with a
resolution of the directors on 14 May 2004.
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 Financial Reporting Standards
(“FRS”) as required by the Companies Act. In previous years, the financial statements were prepared in accordance
with Singapore Statements of Accounting Standard (“SAS”). The transition from SAS to FRS did not result in any
significant change in accounting policies.
(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 19 to
the financial statements.
(c) Subsidiary, associated and joint venture companies
In the Company’s financial statements, investment in subsidiary, associated and joint venture companies are
accounted for at cost less impairment losses.
A subsidiary company is defined as a company in which the Group, directly or indirectly controls more than half of
the voting power, or controls the composition of the board of directors.
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% and not more than 50% of the voting power and in whose
financial and operating policy decisions the Group exercises significant influence.
The Group’s share of the consolidated results of associated companies and their subsidiary 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 associated company in airline business adopts different
accounting policies for its treatment of frequent flyer program 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 20 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 21 to the financial statements.