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80 SIA Annual Report 03/04
Notes to the Financial Statements
31 March 2004
9 Exceptional Items (in $ million)
The Group
2003-04 2002-03
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Retrenchment and early retirement costs (41.4) –
Surplus on liquidation of Abacus Distribution Systems Pte Ltd 9.2 –
Surplus on disposal of Aviation Software Development Consultancy India Limited 1.1 –
Surplus on liquidation of Asian Frequent Flyer Pte Ltd – 0.5
––––––––––––––––––––––––––––––––
(31.1) 0.5
––––––––––––––––––––––––––––––––
10 Taxation (in $ million)
The Group
2003-04 2002-03
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Current taxation
Provision for the year 165.6 199.0
(Over)/under provision in respect of prior years (165.4) 79.9
Share of joint venture companies taxation for the year 0.3 3.0
Share of associated companies taxation:
– provision for the year 12.1 21.2
– over provision in respect of prior years – (14.4)
Reversal of tax contingency provision no longer required (21.2) –
––––––––––––––––––––––––––––––––
(8.6) 288.7
––––––––––––––––––––––––––––––––
Deferred taxation
Write-back for the year (5.2) (9.4)
Under/(over) provision in respect of prior years 134.2 (132.2)
Share of associated companies taxation:
– provision for the year 5.2 –
– under/(over) provision in respect of prior years 4.7 (11.8)
––––––––––––––––––––––––––––––––
138.9 (153.4)
––––––––––––––––––––––––––––––––
130.3 135.3
Adjustment for reduction in Singapore statutory tax rate (204.7) (277.8)
––––––––––––––––––––––––––––––––
(74.4) (142.5)
––––––––––––––––––––––––––––––––
On 27 February 2004, the Government announced a 2% points cut in statutory tax rate from Year of Assessment 2005.
The financial effect of the reduction in tax rate was reflected in the current financial year. The aggregate adjustment of
the prior year’s deferred tax liabilities was $204.7 million for the Group.
The Group has tax losses of approximately $17.2 million (2003: $10.5 million) and unabsorbed capital allowances of
$0.2 million (2003: nil) that are available for offset against future taxable profits of the companies in which no deferred
tax assets are recognized due to uncertainty of the recoverability. The use of the tax losses and unabsorbed capital
allowances are subject to the agreement of the tax authorities and compliance with certain provisions of the tax
legislation of the respective countries in which the companies operate.
During the financial year, SIA Engineering Company Limited (“SIAEC”) reversed a tax contingency provision amounting
to $21.2 million. The provision was made to cover for potential tax liability that might arise at the time when SIAEC
disposed off certain 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.