Singapore Airlines 2005 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ...the post-SARS recovery with strong revenue growth, to an all time record high. On 28 June 2004, Singapore Airlines broke its own record of flying the world's longest commercial flight, when the Airline launched a non-stop daily service from Singapore to New York. Next year, Singapore Airlines is set...

  • Page 3
    ... in Review Network Fleet Promoting Travel and Tourism Product and Service Development Awards and Accolades Alliance Partners In Our Communities Our People Safety, Security and Environment Subsidiaries and Associated Companies List of Awards Statement on Risk Management Corporate Governance Report...

  • Page 4
    ... R1 2004-05 2003-04 % Change Group Financial Results ($ million) Total revenue Total expenditure Operating profit Profit before taxation Profit attributable to shareholders Share capital Distributable reserves General reserve Foreign currency translation reserve Non-distributable reserves Share...

  • Page 5
    ... OPERATING STATISTICS 2004-05 2003-04 % Change SIA Passengers carried (thousand) Revenue passenger-km (million) Available seat-km (million) Passenger load factor (%) Passenger yield (cents/pkm) Passenger unit cost (cents/ask) Passenger breakeven load factor (%) SIA Cargo Cargo and mail carried...

  • Page 6
    ... Aircraft Leasing Enterprise (SALE), the Airline's leasing associate, and Deputy Chairman of Singapore Airport Terminal Services Ltd., and SIA Engineering Company. He also serves as a Director of Singapore Exchange Ltd, Virgin Atlantic Limited, Virgin Travel Group Limited, Virgin Altantic Airways...

  • Page 7
    ... Ltd. and Neptune Orient Lines Ltd. In 1998, Mr Lee was awarded the Public Service Star for his contributions to both the public and private sectors. He holds an MBA from Northwestern University Illinois. From left to right Koh Boon Hwee (Chairman); Chew Choon Seng; Charles B Goode; Fock Siew Wah...

  • Page 8
    ...long-term outcome for the majority of our people. THE FUTURE Singapore Airlines is responding strongly to the challenges posed by three new airlines operating from our home base, and many established ones from near and far. We will not surrender market to them. We will fight vigorously for business...

  • Page 9
    ...to deliver world class service. Singapore Airlines, has for some time, been working hard to access the Trans-Pacific route between Australia and the USA, which remains one of the most protected air routes in the world. Our Australian competitor can currently access markets beyond Singapore. Yet, it...

  • Page 10
    ... Singh Member Charles B Goode Safety and Reliability Committee Chairman Koh Boon Hwee Member Ho Kwon Ping Company Secretary Wun Wen-Na Share Registrar M&C Services Private Limited 138 Robinson Road #17-00 The Corporate Office Singapore 068906 Auditors Ernst & Young Certified Public Accountants...

  • Page 11
    ... at AGM) SENIOR MANAGEMENT, MAJOR SUBSIDIARIES Hwang Teng Aun President Singapore Airlines Cargo Pte Ltd Ng Chin Hwee President and Chief Executive Officer Singapore Airport Terminal Services Ltd William Tan Seng Koon President and Chief Executive Officer SIA Engineering Company Ltd Mike Barclay...

  • Page 12
    ...York. The previous record was set with the launch of daily non-stop services to Los Angeles in February 2004. • Singapore Airlines started daily flights to Amsterdam using B777200ER aircraft. • SilkAir commenced twice weekly flights to Chongqing in China. • The Group introduced fuel surcharges...

  • Page 13
    ... outsourced in the Finance Division. • Singapore Airlines commenced weekly B777-200ER non-stop flights to Cape Town in South Africa. This is the first direct air service between Cape Town and Southeast Asia. • The SIA Group swiftly mobilised support for rescue and recovery efforts in regions...

  • Page 14
    ...SARS pandemic over, Singapore Airlines expanded its network to cater to a global increase in demand for air travel. The highlight of the year was the launch of a daily non-stop A340-500 service between Singapore and New York's Newark airport in June 2004. In launching this service, SIA broke its own...

  • Page 15
    ...leased back one B777-300 in October 2004 and two B777-200ERs in March 2005. SIA's passenger fleet, as at 31 March 2005, stood at 89 aircraft. At an average age of five years four months, it is still one of the industry's youngest fleets. SIA Annual Report 04/05 SIA OPERATIONS CONTROL CENTRE In July...

  • Page 16
    ... for travelling on Singapore Airlines worldwide. The Programme won the Pacific Asia Travel Association 2005 Gold Award. Advertising and public relations continued to be key pillars in the Airline's marketing efforts. In support of the non-stop A340-500 services to Los Angeles and New York, SIA...

  • Page 17
    .... It is regrettable that the one industry that does more to facilitate free trade cannot, itself, take advantage of the benefits of the FTA. Singapore Airlines hopes that the Australian Government will deliver on its commitment to establish an Open Skies Agreement soon. SIA Annual Report 04/05 15

  • Page 18
    ...March 2005, SIA launched seat selection for Economy Class bookings on the internet through which customers can select their desired seat. This service is available on all SIA operated flights except for those between Singapore and Kuala Lumpur. Mobile Services The year in review also saw the Airline...

  • Page 19
    SIA Annual Report 04/05 17

  • Page 20
    ... of the latest popular TV programmes, and a wide selection of interactive games. With these new entertainment options, customers have over 400 entertainment choices available to them inflight. In July 2004, the Airline introduced another innovative first: Berlitz World Traveler, on KrisWorld. SIA is...

  • Page 21
    ... 87 global partners comprising airlines, hotels, a travel agency, credit cards, telecommunications providers and an insurance company. To further promote online sales and servicing, KrisFlyer offered inducements for members to visit its website at www.KrisFlyer.com. Redemption booking costs were...

  • Page 22
    ... Traveller USA also voted SIA Best Airline for International Travel, as well as having the Best First and Economy Classes. It also presented SIA with the award for Best Trans-Pacific Business Class. In Fortune Magazine's annual ranking of the World's Most Admired Companies, Singapore Airlines...

  • Page 23
    ...The cargo included urgent medical supplies, milk, bottled water, tents, food supplies and water desalination equipment. SilkAir partnered the United Nations Association of Singapore for a donation drive onboard all SilkAir flights in January 2005. Staff of the SIA Group of Companies also contributed...

  • Page 24
    ... on staff numbers. The Company outsourced its IT infrastructure services to IBM. As part of this outsourcing, IBM offered all affected staff employment on comparable terms. Notwithstanding, some staff elected not to accept the offer and left the Group. As a consequence of technology changes and...

  • Page 25
    ... based overseas. SAFETY, SECURITY AND ENVIRONMENT Safety Ensuring safe operations for SIA's customers and crew is the Group's top priority. One of many safety activities this past year focused on preventing accidents through data gathered from our Flight Data Analysis Programme, Hazard Reports, and...

  • Page 26
    ...increased its capacity by 30 per cent. In May 2004, the company also embarked on a new line of business. The B747-400 passenger-to-freighter conversion programme is part of the company's strategy to offer a complete suite of maintenance, repair and overhaul (MRO) services at its one- 24 SIA Annual...

  • Page 27
    ... and Virgin Atlantic Airways, thereby expanding its extensive list of heavy maintenance and component overhaul customers. The company also added four new airlines, namely Air Atlanta Icelandic, Cebu Pacific Air, SilkAir and Tiger Airways to its growing list of Fleet Management customers. SIA Annual...

  • Page 28
    ...year in review Singapore Airlines Cargo posted a net profit of $183.8 million; an improvement on the $175.9 million net profit made the year before. SIA Cargo expanded its network to China and India through new twiceweekly round-the-world services via Xiamen and Nanjing to Los Angeles, and new twice...

  • Page 29
    ... charter flights to a number of regional destinations including six to Quilin, and two to Darwin during the year. Following an extensive network review to maximise profitability, the airline suspended its twice-weekly services to Macau in December 2004 and Krabi in February 2005. SIA Annual Report...

  • Page 30
    ... Airline (Asia and China) at the TTG Travel Awards 2004, for the fifth time. SilkAir joined hands to support the region's relief and recovery efforts following the Indian Ocean tsunami disaster of December 2004. In partnership with the United Nations Association of Singapore, crew, ground staff...

  • Page 31
    ..., SALE's portfolio comprised 62 aircraft flying with 29 airlines worldwide. The Company's fleet remains one of the youngest in the leasing industry, with an average age of just 4.6 years. Singapore Flying College There has been greater demand for pilots by the SIA Group during the year in review. To...

  • Page 32
    ... Netherlands (trade magazine) Best Scheduled Airline Global Traveller GT Tested Award Best Airline in the World 2004 Travel Weekly Award 2005 Best Airline to Asia www.travelchannel.de (online publication) Best Airline on Longhaul Services Best Service on the Ground Best Service on Board Safety and...

  • Page 33
    ... effectiveness of risk reduction measures, SIA also reviewed and updated risk policies and guidelines to make sure that the overall control environment remains relevant and appropriate. These reviews include the following: Guidelines on Managing Risks of Outsourcing In view of the increased level of...

  • Page 34
    ... and long-term objectives. 5. BOARD OF DIRECTORS' COMMENTS ON THE PRACTICE OF RISK MANAGEMENT IN SIA Having reviewed the risk management practices and activities of SIA, the Board of Directors has not found anything to suggest that risks are not being satisfactorily addressed. 32 SIA Annual Report...

  • Page 35
    ... Report For the period 1 April 2004 to 31 March 2005 The Board and Management are committed to increasing shareholder value by creating and maintaining a sound organisational structure, through a process of established corporate governance principles. This Report sets out the Company's corporate...

  • Page 36
    ... Choon Seng. The BFC is tasked to set directions, policies and guidelines pertaining to certain financial matters of the Company. The Committee also acts as the approving body for new initiatives or projects coming within its scope, which includes management of surplus funds, liquidity and financing...

  • Page 37
    ... the other members are non-executive directors independent of management. Meetings are held on a quarterly basis. The BCOC annually reviews and approves recommendations on remuneration policies and packages for key executives, and implements and administers the Company's Employee Share Option Plan...

  • Page 38
    ... from the Company on 29 July 2004 respectively. Includes profit-sharing bonus determined on an accrual basis for the financial year ended 31 March 2005. None of the employees of the Company were an immediate family member of any Director or the Chief Executive Officer, and whose remuneration...

  • Page 39
    ... Board with monthly management accounts for the Board's review. The Company has clear policies and guidelines for dealings in the securities of the Company by Directors and employees, which are in conformity with the SGX-ST Best Practices Guide. The Company prohibits selected employees from trading...

  • Page 40
    ... risk management policies. The Risk Management Report can be found in page 31 of this Report. Communication with Shareholders (Principles 14 and 15) The Company believes in prompt disclosure of pertinent information. It values dialogue with both retail and institutional shareholders, and holds media...

  • Page 41
    Membership of Singapore Airlines Limited Board of Directors and Board Committees Name Main Board Board Executive Committee Audit & Risk Committee Board Finance Committee Board Compensation & Organisation Committee Nominating Committee Safety & Reliability Committee Board Labour Relations Committee ...

  • Page 42
    ... Financial Review Report by the Board of Directors Statement by the Directors Pursuant to Section 201(15) Auditors' Report Consolidated Profit and Loss Account Balance Sheets Statements of Changes in Equity Consolidated Cash Flow Statement Notes to the Financial Statements Additional Information...

  • Page 43
    ... to shareholders $1,389 million (+63.6 per cent) • Basic earnings per share 114.0 cents (+63.6 per cent) • Shareholders' funds $12,436 million (+8.6 per cent) • Net asset value $10.21 per share (+8.6 per cent) • Total debt equity ratio 0.19 times (-0.01 times) SIA Annual Report 04/05 41

  • Page 44
    ... in 2003-04 in spite of challenges caused by high fuel prices and intensified regional competition posed by new airline entrants. Strong passenger and cargo demand underpinned a 23.1 per cent growth (+$2,251 million) in revenue to $12,013 million, the highest ever. Effective control of costs saw...

  • Page 45
    ... 0 2001 2002 2003 2004 31 March 2005 6 4 2 -1,000 0 Shareholders' Funds ($ Million) Total Assets ($ Million) NAV Per Share ($) R1 Net Liquid Assets Net Debt Net liquid asset is defined as the sum of cash and bank balance (net of bank overdraft), investments in financial instruments, loans to...

  • Page 46
    ... for diminution in value of long-term investments Amortisation of goodwill on consolidation Amortisation of deferred gain Share of profits of joint venture companies Share of profits/(losses) of associated companies Staff compensation and restructuring of operations Surplus on liquidation of Abacus...

  • Page 47
    ... million. The increase was mainly attributable to higher revenue (+$2,251 million), higher share of profits of associated and joint venture companies (+$124 million), higher surplus on disposal of aircraft, spares and spare engines (+$113 million) and surplus on sale of long-term investments (+$87...

  • Page 48
    ... + + 28.1 42.8 Group Average Staff Strength and Productivity 50,000 40,000 500 400 300 200 100 0 2000-01 2001-02 2002-03 2003-04 2004-05 Staff Number 30,000 20,000 10,000 0 $ '000 Average Staff Strength Revenue Per Employee ($'000) Value Added Per Employee ($'000) 46 SIA Annual Report 04/05

  • Page 49
    Financial Review Performance of the Company Operating Performance 2004-05 2003-04 % Change Passengers carried (thousand) Available seat-km (million) Revenue passenger-km (million) Passenger load factor (%) Passenger yield (cents/pkm) Passenger unit cost (cents/ask) Passenger breakeven load factor...

  • Page 50
    ... 2004-05 2003-04 $ million $ million % Change Revenue Expenditure Operating Profit Finance charges Interest income Surplus on disposal of aircraft, spares and spare engines Surplus on disposal of other fixed assets Dividends from subsidiary and associated companies, gross Dividends from long-term...

  • Page 51
    ...) Revenue The Company's revenue increased 28.8 per cent to $9,260 million as follows: 2004-05 2003-04 $ 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) 2004-05 2003-04 % Change 2004-05 2003-04 % Change East Asia ...

  • Page 53
    ... 2003-04 Change $ million % $ million % $ million Fuel costs Staff costs Depreciation Aircraft maintenance and overhaul costs Handling charges Sales costs R1 Inflight meals and other passenger costs Airport and overflying charges Rentals on leased aircraft Communication and information technology...

  • Page 54
    ... result of changes in network and fleet composition. A change in fuel productivity (passenger aircraft) of 1.0 per cent would impact the Company's annual fuel costs by about $24 million, before accounting for changes in fuel price, USD exchange rate and flying operations. A change in price of one US...

  • Page 55
    ... companies increased by $518 million. Higher dividends were received from Singapore Airport Terminal Services (+$331 million), SIA Engineering Company (+$183 million), Virgin Atlantic Limited (+$2 million) and Service Quality Centre (+$1 million). Unlike last year, $3 million was received from Asia...

  • Page 56
    ... SIA Engineering Company Limited (SIAEC), Singapore Airlines Cargo Private Limited (SIA Cargo), and SilkAir (Singapore) Private Limited. The following performance review includes intra-Group transactions. Singapore Airport Terminal Services Group 2004-05 2003-04 $ million $ million % Change Total...

  • Page 57
    ...cents. Singapore Airlines Cargo 2004-05 2003-04 R1 $ million $ million % Change Total revenue Total expenditure Operating profit Profit after taxation R1 Revenue, expenditure, yield and unit cost for 2003-04 are restated to reflect the change in the basis of reporting cargo revenue. Previously...

  • Page 58
    ... Companies (continued) Singapore Airlines Cargo (continued) SIA Cargo generated an operating profit of $263 million, 30.2 per cent higher (+$61 million) from a year ago. Higher revenue (+$463 million) from increased loads (+8.6 per cent) and yield improvement (+8.5 per cent), and cost management...

  • Page 59
    ...owned subsidiary companies): Direct interest Deemed interest 1.4.2004/ 1.4.2004/ date of date of Name of Director appointment 31.3.2005 21.4.2005 appointment 31.3.2005 21.4.2005 Interest in Singapore Airlines Limited Ordinary shares of $0.50 each Chew Choon Seng 214,000 Charles B Goode - Stephen...

  • Page 60
    ... the director is a member, or with a company which the director has a substantial financial interest. 5 Options on Shares in the Company The Singapore Airlines Limited Employee Share Option Plan ("the Plan"), which comprises the Senior Executive Share Option Scheme and the Employee Share Option...

  • 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 ordinary...

  • Page 62
    ... review under review lapsed under review Chew Choon Seng 228,000 $10.70 834,000 - - 834,000 The particulars of options on shares in subsidiary companies are as follows: (a) Singapore Airport Terminal Services Limited ("SATS") The Singapore Airport Terminal Services Limited Employee Share...

  • 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 11th day of May 2005 SIA Annual Report 04...

  • 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 11th day of May 2005 62 SIA Annual Report 04/05

  • Page 65
    Auditors' Report To the members of Singapore Airlines Limited We have audited the accompanying financial statements of Singapore Airlines Limited (the "Company") and its subsidiaries (the "Group") set out on pages 64 to 107 for the year ended 31 March 2005. These financial statements are the ...

  • Page 66
    Consolidated Profit and Loss Account For the financial year ended 31 March 2005 (in $ million) The Group Notes 2004-05 2003-04 REVENUE EXPENDITURE Staff costs Fuel costs Depreciation Provision for impairment of fixed assets Aircraft maintenance and overhaul costs Commission and incentives Landing...

  • Page 67
    ...567.9 14,516.0 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
    ... of $0.50 par value were issued at exercise price of $11.96 each pursuant to the Employee Share Option Plan. Share capital and share premium increased by $47,512 and $950,750 respectively. The notes on pages 70 to 107 form an integral part of these financial statements. 66 SIA Annual Report 04/05

  • Page 69
    ...of Changes in Equity For the financial year ended 31 March 2005 (in $ million) The Company Capital Share Share redemption General Notes capital premium reserve reserve Total Balance at 31 March 2003 Profit attibutable to shareholders for the financial year Dividends Balance at 31 March 2004 Share...

  • Page 70
    ... the financial year ended 31 March 2005 (in $ million) The Group Notes 2004-05 2003-04 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 associated companies Return of...

  • Page 71
    ... Group for the period April 2003 to February 2004: Revenue Expenditure Profit before taxation 6.1 (5.1) 1.0 5.3 2003-04 0.4 2.8 6.7 (1.8) 8.1 (3.9) 1.1 5.3 (6.7) (1.4) The notes on pages 70 to 107 form an integral part of these financial statements. SIA Annual Report 04/05 69

  • Page 72
    ... 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...

  • Page 73
    ... impairment in value. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. The cost of all aircraft is stated net of manufacturers' credit. Aircraft and related equipment acquired on an exchange basis...

  • Page 74
    ...charges are charged directly against the profit and loss accounts. Depreciation on the relevant assets is charged to the profit and loss accounts. For sale and finance leaseback, differences between sales proceeds and net book values are deferred and amortised over the minimum lease terms. Operating...

  • 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
    ...overhaul expenses incurred to meet contractual return conditions for sale and leaseback 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...

  • Page 77
    ...airline operations is derived by allocating revenue to the area in which the sale was made. Revenue from other operations, which consist principally of airport terminal services and engineering services, is derived in Singapore and therefore, is not shown. Assets, which consist principally of flight...

  • Page 78
    ... revenue and profit information regarding business segments for the financial years ended 31 March 2005 and 2004 and certain assets and liabilities information of the business segments as at those dates. Airline operations Airport terminal services 2004-05 2003-04 2004-05 2003-04 TOTAL REVENUE...

  • Page 79
    Engineering services Others Total of segments Elimination* Consolidated 2004-05 2003-04 2004-05 2003-04 2004-05 2003-04 2004-05 2003-04 2004-05 2003-04 195.8 611.7 145.9 532.8 78.2 178.4 89.5 176.7 12,012.9 1,424.1 9,761.9 1,280.5 - (1,424.1) - (1,280.5) 12,012.9 - 9,761.9 - 807...

  • Page 80
    ... table presents revenue information on airline operations by geographical areas for the financial years ended 31 March 2005 and 2004. By area of original sale 2004-05 2003-04 East Asia Europe South West Pacific Americas West Asia and Africa System-wide Non-scheduled services and incidental...

  • Page 81
    ... Group 2004-05 2003-04 Staff compensation and restructuring of operations Surplus on sale of investment in Air New Zealand Limited Surplus on sale of investment in Raffles Holdings Ltd Surplus on sale of investment in Taikoo (Xiamen) Aircraft Engineering Company Limited Surplus on liquidation of...

  • Page 82
    ...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 2003-04 accounts. The aggregate adjustment of the prior year's deferred tax liabilities was $204.7 million for the Group. In 2003-04, SIA Engineering Company Limited...

  • Page 83
    ... current financial year (2003-04: NIL) 304.5 109.6 121.9 - 426.4 109.6 The directors propose that a final tax exempt (one-tier) dividend of 30.0 cents per share amounting to $365.5 million (2003-04: $304.5 million) be paid for the financial year ended 31 March 2005. SIA Annual Report 04...

  • Page 84
    ...of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction. During the financial year, the Company issued 95,024 shares (2003-04: nil) upon exercise of options granted under the Employee Share Option Plan...

  • Page 85
    ... Financial Statements 31 March 2005 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...

  • Page 86
    ... 2005 13 Share Capital (in $ million) (continued) Share option plans (continued) Terms of share options outstanding as at 31 March 2005: SIA ESOP Exercisable period Exercise price Number outstanding Number exercisable 28.3.2001 - 27.3.2010 28.3.2002 - 27.3.2010 28.3.2003 - 27.3.2010 28.3.2004...

  • Page 87
    Notes to the Financial Statements 31 March 2005 13 Share Capital (in $ million) (continued) Share option plans (continued) SATS ESOP Exercisable period Exercise price* Number outstanding Number exercisable 28.3.2001 - 27.3.2010 28.3.2002 - 27.3.2010 28.3.2003 - 27.3.2010 28.3.2004 - 27.3.2010 ...

  • Page 88
    ... is earlier. 14 Deferred Account (in $ million) The Company 31 March 2005 2004 2005 2004 The Group 31 March Deferred gain on sale and leaseback transactions - operating leases - finance leases 362.9 51.7 391.3 55.4 356.8 - 391.2 - 414.6 446.7 356.8 391.2 86 SIA Annual Report 04/05

  • Page 89
    ...freighter and $2.9 million (2004: $2.9 million) are secured by a first legal mortgage on a building at 22 Senoko Way Singapore 758095. Interest on the loan for the B747-400 freighter is charged at a margin above the London Interbank Offer Rate ("LIBOR") ranging from 1.77% to 3.54% (2003-04: 1.77% to...

  • Page 90
    ...Interest rates on SIA Cargo's finance lease commitments are charged at a margin above the LIBOR. These ranged from 1.15% to 3.81% (2003-04: 1.12% to 2.00%) per annum. Future lease payments under these finance leases are as follows: The Group The Company 31 March 31 March 2005 2004 2005 2004 Minimum...

  • Page 91
    ... progress payments 15,304.5 15,222.9 * During the financial year, a subsidiary company has reclassified aircraft rotable spares with cost of $8.5 million and impairment provision of $3.0 million from stocks to fixed assets due to a change in the intended use of the assets. SIA Annual Report...

  • Page 92
    ...,135.7 2005 2004 Net book value of fixed assets acquired under finance leases: - aircraft - plant and equipment 903.5 114.5 967.4 137.4 1,018.0 1,104.8 Advance and progress payments comprise mainly purchases of aircraft, related equipment and building projects. 90 SIA Annual Report 04...

  • Page 93
    ...loss against the cost of investment in one of its wholly owned subsidiary company, SIA Properties (Pte) Ltd ("SIAP"). Its business undertaking (which primarily provided intraGroup services) was transferred to the Company on 1 April 2004. The financial impact of the transfer was not material. In 2003...

  • Page 94
    ... & Linen Services Pte Ltd Asia-Pacific Star Pte Ltd Aerolog Express Pte Ltd Country Foods Pte Ltd Ready Fresh Pte Ltd* SIA Engineering Company Limited Singapore Jamco Pte Ltd Investment holding Airport ground handling services Inflight catering services Aviation security services Providing and...

  • Page 95
    ... Pacific Link Asset Management Co Ltd for a consideration of US$1.20. PTPIT was incorporated to build and operate a hotel in Manado, North Sulawesi. As the hotel has not been in operation, SIAP has written down the book value of its stake in PTPIT to zero prior to the disposal. SIA Annual Report 04...

  • Page 96
    ... 2005 2004 2005 2004 Service Quality (SQ) Centre Pte Ltd Virgin Atlantic Limited* Tiger Airways Pte Ltd Asia Leasing Limited RCMS Properties Private Limited AVISERV Ltd TAJ SATS Air Catering Limited** SERVAIR-SATS Holding Company Pte Ltd PT Jasa Angkasa Semesta TBK Beijing Airport Inflight...

  • Page 97
    ... Operation of aircraft maintenance facilities Hotel ownership and management Hotel ownership and management Singapore Ireland 71.59 6.22 71.59 6.22 41.9 41.9 42.4 42.4 Fuel Accessory Service Technologies Pte Ltd Jamco Aero Design & Engineering Private Limited Pan Asia Pacific Aviation Services...

  • Page 98
    ... place (in $ million) the Group Principal activities of business 2005 2004 2005 2004 Singapore Aircraft Leasing Enterprise Pte Ltd* International Engine Component Overhaul Pte Ltd Singapore Aero Engine Services Private Limited * Aircraft leasing Singapore 150.98 140.28 35.5 35.5 Repair of...

  • Page 99
    ... Taikoo (Xiamen) Aircraft Engineering Company Limited to Hong Kong Aircraft Engineering Company Limited for a total cash consideration of $11.7 million (US$7.5 million). Surplus on disposal of the investment was $9.0 million (refer to note 9 to the financial statements). SIA Annual Report 04/05 97

  • Page 100
    ...The Company 31 March 2005 2004 2005 2004 The Group 31 March Balance at 1 April Provided during the year Provision utilised during the year Amounts reclassified to fixed assets Balance at 31 March Stocks written-off directly to profit and loss account Stocks are stated at: Cost Net realisable value...

  • Page 101
    ...31 March 0.6 0.3 0.9 2.8 (2.2) 0.6 26 Cash and Bank Balances (in $ million) The Company 31 March 2005 2004 2005 2004 The Group 31 March Fixed deposits Cash and bank 2,231.9 608.3 1,137.1 381.4 2,049.1 460.0 918.3 172.3 2,840.2 1,518.5 2,509.1 1,090.6 SIA Annual Report 04/05 99

  • Page 102
    ...Aircraft Engineering Company Limited Surplus on liquidation of Abacus Distribution Systems Pte Ltd Surplus on disposal of Aviation Software Development Consultancy India Limited Operating profit before working capital changes Increase in creditors Decrease in short-term investments Increase in sales...

  • Page 103
    ...) The Group 2004-05 2003-04 Assets acquired under credit terms at 1 April Additions to fixed assets Less : Progress payments transferred to fixed assets Purchase of fixed assets Less: Assets acquired under finance lease Less: Assets acquired under credit terms at 31 March Cash invested in capital...

  • Page 104
    ... 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. A substantial majority of claims against the Company have been...

  • Page 105
    ... Financial risk management objectives and policies The Group operates globally and generates revenue 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...

  • Page 106
    ...companies may have maturities between one month and 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 the next financial...

  • Page 107
    ... are not carried at fair value on the Group and Company balance sheets are presented as follows: Total carrying amount on Balance Sheet 31 March Aggregate net fair value 31 March 2005 2004 2005 2004 Group Financial Assets Long-term investments Short-term investments Financial Liabilities Notes...

  • Page 108
    ...Net fair values (continued) Total carrying amount on Balance Sheet 31 March Aggregate net fair value 31 March 2005 2004 2005 2004 Company Financial Assets Long-term investments Financial Liabilities Notes payable Derivative financial instruments Foreign currency contracts Jet fuel swap contracts...

  • Page 109
    ... announced increases to the fuel surcharge on passenger tickets from May 2005 onwards. SIAEC signed two joint venture agreements in April 2005. A joint venture with Cebu Pacific Air, known as Aviation Partnership (Philippines) Corporation, will offer line maintenance services at 14 airports in...

  • 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...

  • Page 111
    ...-05 2003-04 TOTAL EXPENDITURE 2004-05 2003-04 ($ million) ($ million) 2,724.9 1,653.4 3,053.9 2,518.1 3,201.9 2,764.4 3,032.2 2,826.0 12,012.9 9,761.9 ($ million) ($ million) 2,417.8 2,030.7 2,722.8 2,203.3 2,778.1 2,291.2 2,738.8 2,556.3 10,657.4 9,081.5 OPERATING (LOSS)/PROFIT 2004-05...

  • Page 112
    ... 2004-05 2003-04 2002-03 2001-02 2000-01 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 on disposal of other fixed assets Dividend from long-term investments...

  • Page 113
    ... of the Group 2004-05 2003-04 2002-03 2001-02 2000-01 CASH FLOW ($ million) Cash flow from operations Internally generated cash flow Capital expenditure PER SHARE DATA Earnings before tax (cents) Earnings after tax (cents) Cash earnings ($) R2 Net asset value ($) SHARE PRICE ($) High Low Closing...

  • Page 114
    ... 2004-05 2003-04 2002-03 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 PRODUCTION Destination...

  • Page 115
    ....8 63.7 42.6 66.9 10,037.6 14,533.9 69.1 67.2 43.8 65.2 9,512.0 13,501.1 70.5 66.5 43.8 65.9 8,662.0 12,481.3 69.4 69.7 43.6 62.6 SIA Annual Report 04/05 113

  • Page 116
    ... 2001. Company revenue, expenditure, profit before and after taxation in these charts for 2000-01 and prior years show the combined results of both passenger and cargo operations. The numbers for 2001-02 include cargo operations for the first three months only (April to June 2001). SIA and SIA Cargo...

  • Page 117
    ...by SIA and SilkAir respectively. Seats in standard configuration Average age in years (y) and months (m) Expiry of operating lease 2005-06 2006-07 Aircraft type Owned Finance lease Operating lease Total On firm order On option SIA: B747-400 B777-200 B777-200A B777-200ER B777-300 B777-300ER R1...

  • Page 118
    ... Funds Private Limited 100% Singapore Airlines Cargo Pte Ltd 100% SIA (Mauritius) Ltd 76% Singapore Airport Duty-Free Emporium (Private) Limited 50% Service Quality (SQ) Centre Pte Ltd 49% Virgin Atlantic Limited 49% Tiger Airways Pte Ltd 35.5% Singapore Aircraft Leasing Enterprise Pte Ltd 21% Asia...

  • Page 119
    ... MacroAsia-Eurest Catering Services Inc. 24% Singapore Airport Duty-Free Emporium (Private) Limited 50% Mid-East Airport Services 49.8% PT Jasa Angkasa Semesta TBK 100% SIAEC Global Pte Ltd 65% Singapore Jamco Pte Ltd 50% International Engine Component Overhaul Pte Ltd SIA Annual Report 04/05 117

  • Page 120
    Information on Shareholdings As at 26 May 2005 Authorised share capital Issued and fully paid capital Class of shares S$3,000,000,000.50 S$609,124,973.50 a) 3,000,000,000 ordinary shares of par value of S$0.50 each b) One special share of par value S$0.50 each c) 3,000,000,000 Air Services ...

  • Page 121
    Information on Shareholdings As at 26 May 2005 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 DBS Nominees Pte Ltd Rafï¬,es Nominees Pte Ltd HSBC (Singapore) Nominees Pte Ltd Citibank Nominees Singapore Pte Ltd United ...

  • Page 122
    ... R1 Price/Earnings Price/Book value Price/Cash earnings R2 R1 R2 12.70 9.40 11.90 12.90 8.25 11.00 10.43 1.17 5.58 15.78 1.17 6.60 Based on closing price on 31 March and Group numbers. Cash earnings is defined as profit after tax and minority interests plus depreciation. 120 SIA Annual Report...

  • Page 123
    ... Siew Wah (b) Mr Charles B Goode (c) Mr Chew Choon Seng 5. To approve Directors' Fees of S$962,000 (FY2003/2004 : S$629,000). 6. To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to fix their remuneration. Special Business 7. To consider and if thought...

  • Page 124
    ... share capital of the Company from time to time. 8. To transact any other business Closure of Books NOTICE IS HEREBY GIVEN that, subject to the approval of shareholders to the final dividend being obtained at the Thirty-Third Annual General Meeting to be held on 28 July 2005, the Transfer Books...

  • Page 125
    ... 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 fixed for holding the Meeting. SIA Annual Report 04/05...

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