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88 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
16 Long-Term Liabilities (in $ million)
Loans (continued)
The Group
31 March
2005 2004
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Within one year 25.6 24.8
After one year but not more than five years 57.9 67.2
More than five years 84.3 100.2
–––––––––––––––––––––––––––––––––
167.8 192.2
–––––––––––––––––––––––––––––––––
Finance leases
The Company has finance leases for 2 B747-400s, which were subsequently sub-leased to Singapore Airlines Cargo Pte
Ltd (“SIA Cargo”) in 2001-02, as part of Cargo Division’s corporatisation. 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 the B747-400 leases has an additional purchase option exercisable in the 10.5th year. The Company
intends to hold the finance leases until maturity. Sub-leasing is allowed under the lease agreements.
SIA Cargo paid the entire outstanding lease liabilities by issuing ordinary shares at par for cash to the Company. The sub-
lease terms and conditions are identical to those under the finance leases held by the Company.
SIA Cargo holds 3 B747-400 freighters under finance leases, which mature between 2015 and 2026, without any
options for renewal. 2 leases have options for SIA Cargo to purchase the aircraft at the end of the lease period of 12
years. The other lease has option for SIA Cargo to purchase the aircraft at the end of the 12th or 15th year of the lease
period. Sub-leasing is allowed under the lease agreements.
Interest rates on the Company’s finance lease commitments are charged at a margin above the LIBOR. These ranged
from 1.56% to 2.31% (2003-04: 1.47% to 1.84%) per annum.
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 Repayment Minimum Repayment Minimum Repayment Minimum Repayment
Payments of Principal Payments of Principal Payments of Principal Payments of Principal
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Within one year 80.8 44.1 67.5 41.5 13.1 (2.8) 8.3 (1.2)
After one year but not
more than five years 864.3 752.8 846.5 747.1 570.5 552.3 578.5 558.2
More than five years 387.6 338.3 445.9 392.7 – – – –
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total future lease payments 1,332.7 1,135.2 1,359.9 1,181.3 583.6 549.5 586.8 557.0
Amounts representing interest (197.5) (178.6) – (34.1) – (29.8) –
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Principal value of long-
term commitments
under finance leases 1,135.2 1,135.2 1,181.3 1,181.3 549.5 549.5 557.0 557.0
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Additionally, at 31 March 2005, there are lease obligations in respect of two aircraft finance lease agreements, which
expire over the next 2 years, amounting to $24.8 million (2004: $72.6 million) for the Company. These are covered by
funds amounting to $24.8 million (2004: $72.6 million) placed with financial institutions under defeasance and other
arrangements which have not been included in these financial statements. There are no restrictions on the use of the
aircraft.
The Company continues to remain the primary obligor under these lease agreements. There are contingent liabilities
(secured) amounting to $24.8 million (2004: $72.6 million) for the unpaid lease commitments at 31 March 2005.