Singapore Airlines 2005 Annual Report Download - page 108

106 SIA Annual Report 04/05
Notes to the Financial Statements
31 March 2005
CC
฀MOD: CN1323
M Y
C K
While every effort has been taken to carry out instruction to customers satisfaction
NO RESPONSIBILITY liablilty will be accepted for errors
CUSTOMERS ARE THEREFOREURGED TO CHECK THOROUGHLY BEFORE
AUTHORISING PRINTRUNS
DALIM
1 2 3 4 5 6 7 8 9 10 OK TS
CC196777 DLMAC13 10.06.2005 150#
13col
33 Financial Instruments (in $ million) (continued)
(i) Net fair values (continued)
Total carrying amount Aggregate net
on Balance Sheet fair value
31 March 31 March
2005 2004 2005 2004
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Company
Financial Assets
Long-term investments 409.2 402.4 409.8 488.2
Financial Liabilities
Notes payable 900.0 900.0 940.4 935.7
Derivative financial instruments
Foreign currency contracts * * (23.8) (22.5)
Jet fuel swap contracts * * 36.8 63.0
Jet fuel options contracts * * 209.1 18.0
Interest rate swap contracts * * 26.8 46.6
* No balance sheet carrying amounts are shown as these are commitments as at year end.
The fair value of quoted investments is generally determined by reference to stock exchange quoted market bid
prices at the close of the business on the balance sheet date. It is not practicable to determine, with sufficient
reliability without incurring excessive costs, the fair value of unquoted investments as they do not have quoted
market prices in an active market nor are other methods of reasonably estimating the fair values readily available.
As such, the fair value of these investments is based 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 prices for contracts with
similar maturity profiles. The fair value of interest rate contracts is calculated using rates assuming these contracts
are liquidated at balance date. The fair value of jet fuel swap contracts is determined by reference to market values
for similar instruments. The fair value of jet fuel option contracts is determined by reference to available market
information and option valuation methodology.
The carrying amounts of the following financial assets and liabilities approximate their fair values due to their short-
term nature: cash and bank balances, bank overdrafts, funds from subsidiary companies, amounts owing by/to
subsidiary, associated and joint venture companies, loans, finance lease commitments, trade debtors and creditors.
34 Related Party Transactions (in $ million)
For the purposes of these financial statements, parties are considered to be related to the Group if the Group has
the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial
and operating decisions, or vice versa, or where the Group and the party are subject to common control or common
significant influence. Related parties may be individuals or other entities.
In addition to the related party information disclosed elsewhere in the financial statements, these were the following
significant related party transactions which were carried out in the normal course of business on terms agreed between
the parties during the financial year:
The Group
2004-05 2003-04
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Purchases of services from associated companies 40.6 288.6
Services rendered to associated companies (24.7) (21.2)
Purchases of services from joint venture companies 0.1 104.1
Services rendered to joint venture companies (5.5) (24.8)