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SINGAPORE AIRLINES ANNUAL REPORT
2010/2011

Table of contents

  • Page 1
    SINGAPORE AIRLINES ANNUAL REPORT 2010/2011

  • Page 2
    ...the year in review 016 network 017 fleet management 018 products and services 021 people development 023 environment 024 supporting our communities 026 subsidiaries 030 list of awards 032 statement on risk management 034 corporate governance report 058 financials 200 notice of annual general meeting

  • Page 3
    ...Forward Singapore Airlines achieved a net profit attributable to equity holders of $1,092 million for the financial year ended 31 March 2011. The year in review was a testing one for the Airline, with challenges ranging from flight disruptions due to volcanic ash and volatility in fuel prices, among...

  • Page 4
    Going the Extra Mile In everything we do, in all our activities, we single-mindedly seek to achieve the highest service standards for our customers. This is why our people have no hesitation in going the extra mile, to make the Singapore Airlines travel experience the best possible.

  • Page 5
    ... Earnings after tax (cents) - diluted R5 Net asset value ($) R6 Dividends Interim dividend (cents per share) Final dividend (cents per share) Special dividend (cents per share) Dividend cover (times) R7 The Company Financial Results ($ million) Total revenue Total expenditure Operating profit/(loss...

  • Page 6
    ... excess baggage carried. GLOSSARY Singapore Airlines Revenue passenger-km Available seat-km Passenger load factor Passenger yield Passenger unit cost Passenger breakeven load factor SIA Cargo Cargo load Gross capacity Cargo load factor Cargo yield Cargo unit cost Cargo breakeven load factor Number...

  • Page 7
    ... of Singapore Airlines Cargo Pte Ltd from 2006 to 2010. William Fung Kwok Lun • Director Appointed Director on 1 December 2009. Dr Fung is Executive Deputy Chairman of Li & Fung Limited, a multinational group of companies headquartered in Hong Kong. Dr Fung held key positions in major trade and...

  • Page 8
    ... April 2008. Ms Goh held various senior management positions in Standard Chartered Bank before retiring as Chief Executive Officer, Singapore in March 2006, after more than 20 years' service. She was awarded a Public Service Medal for her contributions to the Financial Services sector in 2006. David...

  • Page 9
    ... in banking, corporate and financial services work. His other directorships include Director of Cerebos Pacific Limited, Director of Hap Seng Plantations Holdings Berhad and Director of Singapore Press Holdings Limited. He is also Chairman of the Maritime and Port Authority of Singapore, a Board...

  • Page 10
    ... Exchange Limited and Chairman of the Singapore Tourism Board. Goh Choon Phong, who joined the Board on 1 October 2010 and who became CEO on 1 January 2011, is clearly a worthy successor to Choon Seng. In his more than 20 years with SIA he has worked across key areas of the company and developed...

  • Page 11
    ANNUAL REPORT 2010/2011 009 Choon Phong has already implemented an organisational restructuring to more closely align commercial, operational and corporate planning activities, enabling SIA to be more nimble to pursue fresh opportunities for growth and to take on new challenges. There will indeed ...

  • Page 12
    ... Public Accountants One Raffles Quay North Tower #18-01 Singapore 048583 AUDIT PARTNER Mak Keat Meng (appointed for FY 2010-11) REGISTERED OFFICE Airline House 25 Airline Road Singapore 819829 Goh Choon Phong (from 1 October 2010) BOARD COMMITTEES BOARD EXECUTIVE COMMITTEE Chairman Stephen...

  • Page 13
    ... Special Dividends for the Financial Year 2010-11 (subject to shareholders' approval at AGM) Chow Kok Wah Acting Senior Vice President Cabin Crew (from 15 November 2010) Paul Tan Wah Liang Regional Vice President Europe 03 November 2011 Announcement of 2011-12 Second Quarter and Half-Year Results...

  • Page 14
    ...-year partnership, both parties will jointly fund marketing campaigns and actively promote inbound tourism to Western Australia by way of the Airline's services between Singapore and Perth. Five-times-weekly Singapore-Munich-Manchester services, operated with Boeing 777-300ER aircraft, are increased...

  • Page 15
    ... between Singapore and the territory (including flights departing Hong Kong for San Francisco). The Airline launches its inaugural flight to its first destination in South America - Sao Paulo's Guarulhos International Airport, in Brazil. The service, routed via Barcelona, operates three times weekly...

  • Page 16
    ... SINGAPORE AIRLINES Going Places We believe in the romance of travel and helping to bring people together. We are committed to exploring opportunities to open new frontiers - as we did in March 2011 with our first South American destination - and introducing new and exciting innovative offerings...

  • Page 17
    ... profit of $288 million in the third quarter. However, business conditions became more challenging, with a sustained upward trend in fuel prices. Rising fuel costs remain a concern for the Group, with IATA's jet fuel monitor indicating that the price of jet fuel at the end of the year in review was...

  • Page 18
    ... Barcelona - Sao Paulo service on 28 March 2011. Having eyed opportunities in the region for some time, this new service enables the Airline to establish a foothold in the fast-growing South American market. Singapore - Munich - Manchester went daily from 1 September 2010, evidence of the popularity...

  • Page 19
    ... other regional and medium haul destinations. Six Boeing 777-200ERs were leased during the year in review to Royal Brunei Airlines. Another ten Boeing 777-200s completed the cabin refresh programme, bringing the total number of retrofitted aircraft in the fleet to 12, including one B777-300. Four...

  • Page 20
    ... in redemption of their miles on the growing number of partner airlines. Members have even more ways to earn miles with a growing network of over 120 global non-airline partners. The year in review saw the launch of the Bank of China Singapore Airlines Visa Platinum Card in Hong Kong, as well as the...

  • Page 21
    ...Singapore Airlines is the first in the world to provide this unique application, which will eventually be available on all its aircraft equipped with the latest Panasonic eX2â„¢ inflight entertainment system. Ground Services Passenger Reconciliation System The Airline partnered Changi Airport Group...

  • Page 22
    ... Classes Singapore Airlines introduced new First and Business Class Japanese meal offerings during the year in review. Drawing on the freshest seasonal ingredients, the menus were created by chef Yoshihiro Murata of the Airline's International Culinary Panel. The First Class Kyo-Kaiseki service...

  • Page 23
    ..." (2010) by working parents and generation Y employees. Before the end of the financial year, the Airline launched its third Organisational Climate Survey to gather staff views and feedback on workplace-related matters. As at 31 March 2011, the staff strength of SIA Group was 21,534, an increase of...

  • Page 24
    022 SINGAPORE AIRLINES OPERATING REVIEW Photo courtesy of Clare Kendall (rspb-images.com) Photo courtesy of Mairi Dupar (rspb-images.com) Besides looking internally to reduce our environmental footprint, we have also continually looked for opportunities to contribute to meaningful projects that...

  • Page 25
    ...change. The Airline remains committed to its longstanding policy of maintaining a young and modern fleet of aircraft and adopting new technologies to harness the benefits of reduced greenhouse gas emissions, improved fuel productivity, lowered noise levels and more efficient utilisation of resources...

  • Page 26
    ...sales of the book, accumulated from its launch in July to the end of 2010, were donated to Singapore's Community Chest, a non-profit organisation that channels funds to assist the less privileged in the community. Part of the donation went towards the Straits Times Pocket Money Fund and the Business...

  • Page 27
    ... corporate citizen. In its first major involvement in a large-scale green project with long-term benefits for the global environment, Singapore Airlines announced plans to donate US$3 million towards supporting the Harapan Rainforest Initiative in Sumatra, Indonesia. The funds will help finance...

  • Page 28
    ... been a priority for SIA Cargo. With the investment in China Cargo Airlines, SIA Cargo is better positioned to grow with the Chinese market. The company continues to focus on close cooperation with key customers moving forward. A total of nine business partners renewed their participation in our...

  • Page 29
    ... its Fleet Management Programme (FMP) business with new customers. The Company secured a six-year FMP contract with Airbus to provide fleet management services, heavy and light airframe maintenance checks, line maintenance, defect rectification and cabin maintenance for Singapore Airlines' fleet of...

  • Page 30
    028 SINGAPORE AIRLINES OPERATING REVIEW SilkAir was inducted into the TTG Travel Hall of Fame following its 10th win in the TTG Travel Awards in 2009. SilkAir was voted 'Best Regional Airline' in the annual TTG Travel Awards for 10 years between 1995 and 2009 (1995-1997, 2002, 2004-2009).

  • Page 31
    ... the annual TTG Travel Awards for 10 years between 1995 and 2009 (1995-1997, 2002, 2004-2009). Other Travel Hall of Fame honoraries include Singapore Airlines and Singapore Changi Airport. SilkAir was once again also voted as one of the Top 10 Airlines Worldwide for Cabin Service by Hong Kong-based...

  • Page 32
    ... Cabin Service, aircraft/products, inflight meals and ground service Guardian/Observer Travel Awards (UK) • Best Long Haul Airline (7th consecutive year) • Best Business Class (2nd year) MAY Skytrax World Airline Awards 2010 (UK) • Best Airline South East Asia • Best Business Class seat...

  • Page 33
    ... Travel Awards 2010 • Overall Best Airline on Routes to the Far East and Australia (10th time) - Safety, Condition of aircraft - Service on board, Cabin Crew - Service on the ground, lounges - Cabin Comfort, seat pitch - Catering • Overall Best Business Class to Far East and Australia (2nd year...

  • Page 34
    ... OF RISK 3.1 Annual Risk Review During the year, the Annual Risk Review was carried out Group-wide, with key strategic and nonstrategic risks surfaced and reviewed by the Company Risk Management Committee, the Group Risk Management Committee and the Board Safety & Risk Committee. 3.2 Review of Risk...

  • Page 35
    ...REPORT 2010/2011 033 3.3 Ongoing Testing and Simulation Programme For the financial year just ended, tests and simulations of risk controls/ business continuity plans were conducted. Improvements to these risk controls/ business continuity plans were made wherever necessary. 4 BOARD OF DIRECTORS...

  • Page 36
    034 SINGAPORE AIRLINES CORPORATE GOVERNANCE REPORT For the period 1 April 2010 to 31 March 2011 The Board and Management are committed to continually enhancing shareholder value by maintaining high standards of corporate governance, professionalism, integrity and commitment at all levels, ...

  • Page 37
    ... in the financial year. The Board holds separate Strategy Sessions to assist Management in developing its plans and strategies for the future. The non-executive Directors also set aside time to meet without the presence of Management to review the latter's performance in meeting goals and objectives...

  • Page 38
    ... controls and oversees the risk management reviews and reports surfaced by the Group and Company Risk Management Committees. Board Nominating Committee (NC) The NC comprised independent Directors, namely, Mr Lucien Wong (Chairman), Mr Stephen Lee and Mrs Christina Ong. Mr Wong is not associated...

  • Page 39
    ... BCIRC. In January 2011, Mr Goh Choon Phong succeeded Mr Chew Choon Seng as the Chief Executive Officer. The Company has in place an annual review of high potential executives, capable of succeeding to key management positions. Such high potential executives will be given exposure to key jobs in the...

  • Page 40
    038 SINGAPORE AIRLINES CORPORATE GOVERNANCE REPORT For the period 1 April 2010 to 31 March 2011 Short-term incentives Short-term incentives generally take the form of an annual profit-sharing bonus. Payment of the variable bonus is based on employees achieving the target levels in the following: ...

  • Page 41
    ...not exceed 0.75% of the total number of issued ordinary shares in the capital of the Company. Details of the Company's PSP, RSP and ESOP can be found on pages 79 to 82 of the Report by the Board of Directors. Directors' Fees The Directors' fees paid in financial year 2010/2011 amounted to $1,455,000...

  • Page 42
    040 SINGAPORE AIRLINES CORPORATE GOVERNANCE REPORT For the period 1 April 2010 to 31 March 2011 Disclosure on Remuneration The following table shows the composition (in percentage terms) of the remuneration of Directors. Performance and Restricted Shares granted during the year2 Benefits % Total ...

  • Page 43
    ... REPORT 2010/2011 041 No employee of the Group who is an immediate family member of a Director was paid a remuneration that exceeded $150,000 during the financial year ended 31 March 2011. Performance and Restricted Shares granted during the year2 Benefits % Total % Number Bonus Senior Management...

  • Page 44
    ... of quarterly results; and a period of one month prior to the announcement of year-end results. In addition, Directors and employees are cautioned to observe the insider trading laws at all times. Board Audit Committee Activities (Principle 11) The AC's activities for financial year 2010/2011, in...

  • Page 45
    ... risk management controls, to safeguard shareholders' investments and the Company's assets. (e) Interested Person Transactions The AC reviewed interested person transactions to ensure compliance with the SGX-ST Listing Manual and the Shareholders' Mandate obtained at the last Annual General Meeting...

  • Page 46
    ... SINGAPORE AIRLINES CORPORATE GOVERNANCE REPORT For the period 1 April 2010 to 31 March 2011 Internal Controls and Internal Audit (Principles 12 and 13) SIA Internal Audit is an independent department that reports directly to the Audit Committee. The department assists the Committee and the Board...

  • Page 47
    ... overall recognition of transparency excellence across all sectors) for the second consecutive year in 2010. In addition, the Company won two awards in the IR Magazine South East Asia Awards 2010: for Singapore and Pan Asia, the best investor relations by a chief executive officer. The Board members...

  • Page 48
    ... OF SINGAPORE AIRLINES LIMITED BOARD OF DIRECTORS AND BOARD COMMITEE MEMBERS For the period 1 April 2010 to 31 March 2011 Board No. of meetings held No. of meetings attended Board Executive Committee No. of meetings held No. of meetings attended Name of Directors Stephen Lee Ching Yen Chew Choon...

  • Page 49
    ANNUAL REPORT 2010/2011 047 Board Audit Committee No. of meetings held No. of meetings attended Board Compensation and Industrial Relations Committee No. of meetings held No. of meetings attended Board Safety and Risk Committee No. of meetings held No. of meetings attended Board Nominating ...

  • Page 50
    .../Company 1. 2. 3. 4. 5. 6. 7. Baosteel Group Corporation, China Singapore Labour Foundation Shanghai Commercial Bank Ltd, Hong Kong COFCO Corporation, China Chinese Development Assistance Council National Wages Council SLF Strategic Advisers Private Limited Title Director Director Director Director...

  • Page 51
    ANNUAL REPORT 2010/2011 049 GOH CHOON PHONG, 47 Executive and non-independent Director Academic and Professional Qualifications: Masters in Electrical Engineering and Computer Science Bachelor of Computer Science & Engineering Bachelor of Management Science Bachelor of Cognitive Science ...

  • Page 52
    ... Listed Companies Organisation/Company 1. 2. 3. 4. 5. 6. 7. Li & Fung Limited Trinity Limited Convenience Retail Asia Limited Shui On Land Limited Sun Hung Kai Properties Limited VTech Holdings Limited The Hongkong and Shanghai Hotels, Limited Title Executive Deputy Chairman Deputy Chairman Director...

  • Page 53
    ... a director: Board committee(s) served on: Board Audit Committee Board Executive Committee 1 September 2006 31 July 2009 Chairman Member Current Directorships in Other Listed Companies Organisation/Company 1. 2. 3. Aviva plc DBS Group Holdings Ltd Singapore Exchange Limited Title Director Director...

  • Page 54
    ... Relations Committee 9 May 2006 27 July 2010 Member Member Current Directorships in Other Listed Companies Organisation/Company 1. 2. Australian Securities Exchange Ltd Coca-Cola Amatil Limited Title Chairman Chairman Other Major Appointments Organisation/Company 1. 2. 3. Investec Bank (Australia...

  • Page 55
    ... Executive Committee Board Compensation and Industrial Relations Committee 1 August 2005 27 July 2010 Chairman Member Member Current Directorships in Other Listed Companies Organisation/Company 1. 2. 3. CapitaLand Limited Pan Pacific Hotels Group Limited UOL Group Limited Title Director Director...

  • Page 56
    ... director: Board committee(s) served on: Board Nominating Committee Board Safety and Risk Committee 1 September 2007 27 July 2010 Member Member Major Appointments Organisation/Company 1. 2. AX 21 Holdings Pte Ltd Club 21 Pte Ltd Title Managing Director Managing Director Others Organisation/Company...

  • Page 57
    ... on: Board Compensation and Industrial Relations Committee Board Safety and Risk Committee 1 September 2009 27 July 2010 Member Member Current Directorships in Other Listed Companies Organisation/Company 1. 2. 3. Bayer AG Microsoft Corporation UBS AG Title Director Director Director Directorships...

  • Page 58
    ... Berhad Singapore Press Holdings Limited Title Director Director Director Other Major Appointments Organisation/Company 1. 2. Allen & Gledhill LLP Maritime and Port Authority of Singapore Title Managing Director Chairman Others Organisation/Company 1. 2. 3. 4. Eastern Development Private Limited...

  • Page 59
    ... the Distance Singapore Airlines takes a long-term view in all its activities, from our acquisition of the latest aircraft to take advantage of technological advances, to our investments in our people, who help us reach ever greater heights. We will continue to seek opportunities for sustainable...

  • Page 60
    ... statements 190 aggitional information 191 quarterly results of the group 192 five-year financial summary of the group 194 ten-year statistical recorg 195 the group fleet profile 196 group corporate structure 197 information on shareholgings 199 share price ang turnover 200 notice of annual general...

  • Page 61
    ANNUAL REPORT 2010/2011 059 FINANCIAL REVIEW HIGHLIGHTS OF THE GROUP'S PERFORMANCE • Total revenue $14,525 million (+$1,817 million) • Operating profit $1,271 million (+$1,208 million) • Profit attributable to owners of the Parent $1,092 million (+$876 million)

  • Page 62
    ... FINANCIAL REVIEW Performance of the Group Key Financial Highlights 2010-11 2009-10 R1 % Change Earnings For The Year ($ million) Revenue Expenditure Operating profit Profit attributable to owners of the Parent Per Share Data (cents) Earnings per share - basic Ordinary dividend per share Special...

  • Page 63
    ANNUAL REPORT 2010/2011 061 FINANCIAL REVIEW Performance of the Group (continued) Group Earnings (continued) On the cost side, Group expenditure rose $609 million (+4.8 per cent) to $13,254 million. Fuel costs excluding hedging - the biggest expense item of the Group - increased $877 million (+24...

  • Page 64
    ...for the financial year. Net asset value per share increased 5.2 per cent to $11.89. The Group's net liquid assets R3 increased $2,519 million to $5,793 million as at 31 March 2011, mainly a result of cash generated from operations. Total debt to equity ratio at 0.14 times increased 0.04 times. R3pp...

  • Page 65
    ANNUAL REPORT 2010/2011 063 FINANCIAL REVIEW Performance of the Group (continued) Dividends For the financial year ended 31 March 2011, the Board recommends a final dividend of 40 cents per share. After considering the financial performance and long-term capital adequacy of the Company, the Board...

  • Page 66
    ... FINANCIAL REVIEW Performance of the Group (continued) Capital Expenditure and Cash Flow of the Group (continued) Group Staff Strength and Productivity The Group's staff strength as at 31 March 2011 is as follows: 2010-11 2009-10 % Change Singapore Airlines SIA Engineering Group SIA Cargo...

  • Page 67
    ...REPORT 2010/2011 065 FINANCIAL REVIEW Performance of the Group (continued) Statement of Value Added and its Distribution 2010-11 $ million 2009-10 $ million Total revenue Less: Purchase of goods and services Add: Interest income Surplus on disposal of aircraft, spares and spare engines Dividends...

  • Page 68
    ... Inflight meals Advertising and sales costs Insurance expenses Company accommodation and utilities Other passenger costs Crew expenses Other operating expenses OPERATING PROFIT/(LOSS) Finance charges Interest income Surplus on disposal of aircraft, spares and spare engines Dividends from long-term...

  • Page 69
    ANNUAL REPORT 2010/2011 067 FINANCIAL REVIEW Performance of the Company Operating Performance 2010-11 2009-10 % Change Passengers carried (thousand) Available seat-km (million) Revenue passenger-km (million) Passenger load factor (%) Passenger yield (¢/pkm) Passenger unit cost (¢/ask) ...

  • Page 70
    ... SINGAPORE AIRLINES FINANCIAL REVIEW Performance of the Company (continued) Operating Performance (continued) A review of the Company's operating performance by route region is as follows: By Route RegionR6 (2010-11 against 2009-10) Revenue Available Passengers Carried Passenger KM Seat KM Change...

  • Page 71
    ANNUAL REPORT 2010/2011 069 FINANCIAL REVIEW Performance of the Company (continued) Earnings 2010-11 $ million 2009-10 $ million % Change Revenue Expenditure Operating profit/(loss) Finance charges Interest income Surplus on disposal of aircraft, spares and spare engines Dividends from ...

  • Page 72
    ...SINGAPORE AIRLINES FINANCIAL REVIEW Performance of the Company (continued) Revenue The Company's revenue increased 15.7 per cent to $11,739 million as follows: 2010-11 $ million 2009-10 $ million Change $ million % Passenger revenue Bellyhold revenue from SIA Cargo Others Total operating revenue...

  • Page 73
    ANNUAL REPORT 2010/2011 071 FINANCIAL REVIEW Performance of the Company (continued) Expenditure The Company's expenditure increased 6.9 per cent to $10,888 million in 2010-11. 2010-11 $ million % 2009-10 $ million % % change Fuel costs Depreciation R8 Staff costs Handling charges Inflight meals ...

  • Page 74
    ...in fuel productivity (passenger aircraft) of 1.0 per cent would impact the Company's annual fuel cost by about $36 million, before accounting for changes in fuel price, USD exchange rate and flying operations. A change in the price of fuel of one USD per barrel affects the Company's annual fuel cost...

  • Page 75
    ...'s staff strength as at 31 March 2011 was 13,793, an increase of 411 over last year. The distribution of employee strength by category and location is as follows: 2010-11 2009-10 % Change Category Senior staff (administrative and higher ranking officers) Technical crew Cabin crew Other ground staff...

  • Page 76
    ... the financial year ended 31 March 2011, an increase of 22.9 per cent over the last financial year. Repair and overhaul and Line Maintenance operating segments contributed $10 million and $16 million respectively to this increase. Share of profits of associated and joint venture companies increased...

  • Page 77
    ANNUAL REPORT 2010/2011 075 FINANCIAL REVIEW Performance of the Subsidiary Companies (continued) SIA Cargo 2010-11 $ million 2009-10 $ million % Change Total revenue Total expenditure Operating profit/(loss) Exceptional items Loss after taxation n.m.pnotpmeaningfulp 2,783.3 2,631.9 151.4 (201...

  • Page 78
    ....2 per cent. Profit after taxation increased 153.2 per cent to $104 million. SilkAir's route network spanned 34 cities in 11 Asian countries. During the year, SilkAir launched new services to Bangalore (India), Chennai (India) and Pekanbaru (Indonesia). As at 31 March 2011, SilkAir's equity stood at...

  • Page 79
    ... statements of the Group and of the Company for the financial year ended 31 March 2011. 1 Directors of the Company The names of the directors in office at the date of this report are: Stephen Lee Ching Yen - Chairman Goh Choon Phong - Chief Executive Officer (appointed as director on 1 October 2010...

  • Page 80
    ....3.2011 Appointment 31.3.2011 Name of Director Conditional award of performance shares (Note 2) Goh Choon Phong - Base Awards Award of time-based restricted shares Goh Choon Phong - Base Awards Interest in SIA Engineering Company Limited Ordinary shares Lucien Wong Yuen Kuai Interest in Singapore...

  • Page 81
    ... over the three-year performance periods relating to the relevant awards. 2. Except as disclosed in this report, no other director who held office at the end of the financial year had interests in ordinary shares, share options or debentures of the Company, or of related companies, either at the...

  • Page 82
    080 SINGAPORE AIRLINES REPORT BY THE BOARD OF DIRECTORS 5 Equity Compensation Plans of the Company (continued) (i) Employee Share Option Plan ("ESOP") Details of the ESOP plan are disclosed in Note 5 to the financial statements. At the end of the financial year, options to take up 43,213,533 ...

  • Page 83
    ... with fulfilment of service requirements. All the PSP Final Awards of fully paid ordinary shares will be released to the participants at the end of the three-year performance period. No awards have been granted to controlling shareholders or their associates, or parent group employees under the RSP...

  • Page 84
    ... of the Board Compensation & Industrial Relations Committee. The details of the shares awarded under time-based RSP to directors of the Company are as follows: Aggregate Awards granted since commencement of time-based RSP to end of financial year under review Aggregate ordinary shares released to...

  • Page 85
    ANNUAL REPORT 2010/2011 083 REPORT BY THE BOARD OF DIRECTORS 6 Equity Compensation Plans of Subsidiary Company (i) SIA Engineering Company Limited ("SIAEC") Employee Share Option Plan At the end of the financial year, options to take up 46,921,350 unissued shares in SIAEC were outstanding. ...

  • Page 86
    ... Choon Phong, being two of the directors of Singapore Airlines Limited, do hereby state that in the opinion of the directors: (i) the accompanying statements of financial position, consolidated profit and loss account, consolidated statement of comprehensive income, statements of changes in equity...

  • Page 87
    ...statements of Singapore Airlines Limited (the "Company") and its subsidiaries (collectively, the "Group") set out on pages 87 to 189, which comprise the statements of financial position of the Group and the Company as at 31 March 2011, the statements of changes in equity of the Group and the Company...

  • Page 88
    ... the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act. ERNST & YOUNG LLP Public Accountants and Certified Public Accountants Dated this 12th day of May 2011 Singapore

  • Page 89
    ANNUAL REPORT 2010/2011 087 CONSOLIDATED PROFIT AND LOSS ACCOUNT For The Financial Year Ended 31 March 2011 (in $ million) Notes The Group 2010-11 2009-10 REVENUE EXPENDITURE Staff costs Fuel costs Depreciation Impairment of property, plant and equipment Amortisation of intangible assets ...

  • Page 90
    ...The Financial Year Ended 31 March 2011 (in $ million) The Group 2010-11 2009-10 PROFIT FOR THE FINANCIAL YEAR OTHER COMPREHENSIVE INCOME: Currency translation differences Available-for-sale financial assets Cash flow hedges Loss on dilution of interest in an associated company due to share options...

  • Page 91
    ... Fair value reserve General reserve NON-CONTROLLING INTERESTS TOTAL EQUITY DEFERRED ACCOUNT DEFERRED TAXATION LONG-TERM LIABILITIES PROVISIONS Represented by: PROPERTY, PLANT AND EQUIPMENT Aircraft, spares and spare engines Land and buildings Others INTANGIBLE ASSETS SUBSIDIARY COMPANIES ASSOCIATED...

  • Page 92
    090 SINGAPORE AIRLINES STATEMENTS OF CHANGES IN EQUITY For The Financial Year Ended 31 March 2011 (in $ million) The Group Notes Share capital Treasury shares Capital reserve Balance at 1 April 2010 Total comprehensive income for the financial year, net of tax Share-based compensation ...

  • Page 93
    ANNUAL REPORT 2010/2011 091 Attributable to Owners of the Parent Foreign currency translation reserve Share-based compensation reserve Noncontrolling interests Fair value reserve General reserve Total Total equity (137.0) ( 49.1) (186.1) 185.3 (7.4) 17.9 (20.8) (2.2) (0.2) 172.6 (140.9) 2.9...

  • Page 94
    ...STATEMENTS OF CHANGES IN EQUITY For The Financial Year Ended 31 March 2011 (in $ million) The Group Notes Share capital Treasury shares Capital reserve Balance at 1 April 2009 Total comprehensive income for the financial year, net of tax Issuance of share capital by a subsidiary company Share...

  • Page 95
    ANNUAL REPORT 2010/2011 093 Attributable to Owners of the Parent Foreign currency translation reserve Share-based compensation reserve Noncontrolling interests Fair value reserve General reserve Total Total equity (137.9) (22.7) 23.6 (137.0) 187.3 (3.2) 43.5 (3.4) (3.0) (13.7) (22.2) 185.3 ...

  • Page 96
    094 SINGAPORE AIRLINES STATEMENTS OF CHANGES IN EQUITY For The Financial Year Ended 31 March 2011 (in $ million) The Company Notes 2011 Balance at 1 April 2010 Total comprehensive income for the financial year, net of tax Share-based compensation expense Share options exercised and share awards...

  • Page 97
    ANNUAL REPORT 2010/2011 095 Share capital Treasury shares Capital reserve Share-based compensation reserve Fair value reserve General reserve Total 1,750.6 81.8 1,832.4 (0.9) (44.5) 2.4 (43.0) 2.5 2.5 147.9 13.5 (20.8) (1.9) (0.2) 138.5 (85.3) (8.9) (94.2) 11,668.5 1,011.2 1.9 (382.7) ...

  • Page 98
    ... of aircraft, spares and spare engines Dividends from long-term investments Other non-operating items 9 Share of profits of joint venture companies 25 Share of profits of associated companies Exceptional items 10 Operating profit before working capital changes Increase/(Decrease) in trade and...

  • Page 99
    ANNUAL REPORT 2010/2011 097 CONSOLIDATED STATEMENT OF CASH FLOWS For The Financial Year Ended 31 March 2011 (in $ million) Notes The Group 2010-11 2009-10 CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure Purchase of intangible assets Proceeds from disposal of aircraft and other property,...

  • Page 100
    ...of the Group consist of passenger and cargo air transportation, 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...

  • Page 101
    ANNUAL REPORT 2010/2011 099 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 2 Summary of Significant Accounting Policies (continued) (b) New and revised standards (continued) FRS 103 Business Combinations (revised) The revised FRS 103 introduces a number of changes to the accounting for business...

  • Page 102
    ... and events in similar circumstances. A list of the Group's subsidiary companies is shown in Note 23 to the financial statements. All intra-group balances, transactions, income and expenses and unrealised profits and losses resulting from intra-group transactions are eliminated in full. Business...

  • Page 103
    ANNUAL REPORT 2010/2011 101 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 2 Summary of Significant Accounting Policies (continued) (c) Basis of consolidation (continued) When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification ...

  • Page 104
    ... for using the equity method. Under the equity method, the investment in associated company is measured in the statement of financial position at cost plus post-acquisition changes in the Group's share of net assets of the associated company. Goodwill relating to an associated company is included in...

  • Page 105
    ... and method are reviewed at least annually. (iii) Licences Licences were acquired in business combinations. These intangible assets are amortised on a straight-line basis over its estimated useful life of 3 years. (iv) Deferred engine development cost This relates to the Group's share of engine...

  • Page 106
    ...the profit and loss account. For the purpose of the consolidated financial statements, the net assets of the foreign subsidiary, associated and joint venture companies are translated into SGD at the exchange rates ruling at the end of the reporting period. The financial results of foreign subsidiary...

  • Page 107
    ... 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 are stated at amounts paid plus the fair value of the fixed asset traded-in. Expenditure for heavy maintenance visits...

  • Page 108
    ... rate of interest on the remaining balance of the liability. Finance charges are charged directly against the profit and loss account. For sale and finance leaseback, differences between sales proceeds and net book values are taken to the statement of financial position as deferred gain on sale...

  • Page 109
    ... the lease term on a straight-line basis. Gains or losses arising from sale and operating leaseback of aircraft are determined based on fair values. Differences between sales proceeds and fair values are taken to the statement of financial position as deferred gain on sale and leaseback transactions...

  • Page 110
    108 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 2 Summary of Significant Accounting Policies (continued) (k) Financial assets Financial assets are recognised on the statement of financial position when, and only when, the Group becomes a party to the contractual provisions...

  • Page 111
    ANNUAL REPORT 2010/2011 109 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 2 Summary of Significant Accounting Policies (continued) (l) Long-term investments Long-term investments held by the Group are classified as available-for-sale. As there is no active market for the trading of these ...

  • Page 112
    ... increase. (q) Impairment of financial assets The Group also assesses at the end of each reporting period whether a financial asset or a group of financial assets is impaired. (i) Assets carried at amortised cost If there is objective evidence that an impairment loss on financial assets carried...

  • Page 113
    ANNUAL REPORT 2010/2011 111 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 2 Summary of Significant Accounting Policies (continued) (q) Impairment of financial assets (continued) (iii) Available-for-sale financial assets Significant or prolonged decline in fair value below cost, significant ...

  • Page 114
    112 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 2 Summary of Significant Accounting Policies (continued) (t) Trade and other creditors Trade and other creditors and amounts owing to subsidiary and associated companies are initially recognised at fair value and subsequently...

  • Page 115
    ... is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and In respect of deductible temporary differences associated with investments in subsidiary, associated and joint venture companies, deferred income tax assets are...

  • Page 116
    ... is principally earned from the carriage of passengers, cargo and mail, engineering services, training of pilots, air charters and tour wholesaling and related activities. Revenue for the Group excludes dividends from subsidiary companies and intra-group transactions. Passenger and cargo sales are...

  • Page 117
    ANNUAL REPORT 2010/2011 115 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 2 Summary of Significant Accounting Policies (continued) (ac) Employee benefits (i) Equity compensation plans Employees of the Group receive remuneration in the form of share options and share awards as consideration for...

  • Page 118
    ...-party maintenance agreements, a portion of the cost is expensed at a fixed rate per hour during the terms of the agreements. (ae) Training and development costs Training and development costs, including start-up programme costs, are charged to the profit and loss account in the financial year in...

  • Page 119
    ... asset in the statement of financial position to match against the expected USD liability for capital expenditure, the Group accumulates USD over a period of 10 months in advance of forecast aircraft payments. The exchange gains and losses of the USD held would be recognised in the carrying value...

  • Page 120
    ...loss account during the year. (c) Passenger revenue recognition Passenger sales are recognised as operating revenue when the transportation is provided. The value of unused tickets is included as sales in advance of carriage on the statement of financial position and recognised as revenue at the end...

  • Page 121
    ANNUAL REPORT 2010/2011 119 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 3 Significant Accounting Estimates (continued) (e) Aircraft maintenance and overhaul expenditure under power-by-hour agreements The Group has entered into several power-by-hour ("PBH") engine maintenance agreements with ...

  • Page 122
    ... of aircraft, spares and spare engines Dividends from subsidiary companies Dividends from long-term investments Other non-operating items Share of profits of joint venture companies Share of profits of associated companies Exceptional items Taxation Profit/(Loss) for the financial year Attributable...

  • Page 123
    ANNUAL REPORT 2010/2011 121 Engineering services 2010-11 Cargo operations 2010-11 Others 2010-11 Total of segments 2010-11 Elimination* 2010-11 Consolidated 2010-11 466.6 640.3 1,106.9 135.7 1.4 12.5 2.1 74.6 69.8 (34.9) 261.2 2,775.9 7.4 2,783.3 151.4 (15.2) 2.5 0.1 1.0 (31.7) 8.4 (201.8) ...

  • Page 124
    ... of aircraft, spares and spare engines Dividends from subsidiary and associated companies Dividends from long-term investments Other non-operating items Share of profits of joint venture companies Share of profits of associated companies Taxation Profit/(Loss) for the financial year Attributable...

  • Page 125
    ANNUAL REPORT 2010/2011 123 Engineering services 2009-10 Cargo operations 2009-10 Others 2009-10 Total of segments 2009-10 Elimination* 2009-10 Consolidated 2009-10 370.0 636.4 1,006.4 2,288.2 8.2 2,296.4 43.3 109.9 153.2 12,707.3 2,025.6 14,732.9 (2,025.6) (2,025.6) ...

  • Page 126
    ...SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 4 Segment Information (in $ million) (continued) Business segments (continued) Airline operations 2011 OTHER INFORMATION AS AT 31 MARCH Segment assets Investments in and loans to associated and joint venture companies Long-term...

  • Page 127
    ANNUAL REPORT 2010/2011 125 Engineering services 2011 Cargo operations 2011 Others 2011 Total of segments 2011 Elimination* 2011 Consolidated 2011 1,208.1 398.8 14.6 1,621.5 235.5 0.2 1.7 56.2 293.6 44.6 12.4 37.7 1.6 6.2 2,513.2 23.9 2,537.1 305.7 275.8 23.4 61.4 1.8 290.9 959.0 66.4 1.0 ...

  • Page 128
    ... STATEMENTS 31 March 2011 4 Segment Information (in $ million) (continued) Business segments (continued) Airline operations 2010 Airport terminal and food operations 2010 OTHER INFORMATION AS AT 31 MARCH Segment assets Investments in and loans to associated and joint venture companies Long-term...

  • Page 129
    ANNUAL REPORT 2010/2011 127 Engineering services 2010 Cargo operations 2010 Others 2010 Total of segments 2010 Elimination* 2010 Consolidated 2010 1,075.6 470.8 14.6 1,561.0 217.2 52.1 269.3 39.6 14.3 34.4 4.2 6.0 2,637.8 16.8 2,654.6 280.5 374.4 28.0 64.5 2.0 2.2 254.8 1,006.4 25.8 2.5 221...

  • Page 130
    ... presents revenue information on airline operations by geographical areas for the financial years ended 31 March 2011 and 2010. By area of original sale 2010-11 2009-10 East Asia Europe South West Pacific Americas West Asia and Africa Systemwide Non-scheduled services and incidental revenue 4,769...

  • Page 131
    ANNUAL REPORT 2010/2011 129 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 5 Staff Costs (in $ million) (continued) Share-based compensation expense The Company has in place the Singapore Airlines Limited Employee Share Option Plan ("ESOP"), Restricted Share Plan ("RSP") and Performance Share ...

  • Page 132
    130 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 5 Staff Costs (in $ million) (continued) Share-based compensation expense (continued) Share option plans (continued) Movement of share options during the financial year The following table illustrates the number and weighted ...

  • Page 133
    ANNUAL REPORT 2010/2011 131 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 5 Staff Costs (in $ million) (continued) Share-based compensation expense (continued) Share option plans (continued) Exercisable period Exercise price Number outstanding Number exercisable 1.7.2005 - 30.6.2014 1.7....

  • Page 134
    ... and Group level • EBITDAR# Margin • Value Added per $ Employment Cost Award of fully-paid ordinary shares of the Company, conditional on performance targets set at the start of a three-year overlapping performance period based on stretched long-term corporate objectives. • Absolute Total...

  • Page 135
    ANNUAL REPORT 2010/2011 133 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 5 Staff Costs (in $ million) (continued) Share-based compensation expense (continued) Share-based incentive plans (continued) Movement of share awards during the financial year Number of Restricted Shares Balance at 1.4....

  • Page 136
    134 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 5 Staff Costs (in $ million) (continued) Share-based compensation expense (continued) Share-based incentive plans (continued) Fair value of share awards granted (continued) The following table lists the key inputs to the ...

  • Page 137
    ... 1,146,768 (2010: 1,199,877) fully-paid ordinary shares of the Company, for RSP and PSP respectively. Details and terms of the SIAEC RSP and SIAEC PSP have been disclosed in the Annual Report of SIAEC. Time-based RSP During the financial year, the Board Compensation & Industrial Relations Committee...

  • Page 138
    136 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 6 Operating Profit (in $ million) Operating profit for the financial year was arrived at after charging/(crediting): The Group 2010-11 2009-10 Interest income from short-term investments Dividend income from short-term ...

  • Page 139
    ANNUAL REPORT 2010/2011 137 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 10 Exceptional Items (in $ million) The exceptional items comprised fines paid by Singapore Airlines Cargo Pte Ltd ("SIA Cargo") as imposed by the European Commission (EUR74.8 million or $135.7 million), the South Korean ...

  • Page 140
    138 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 11 Taxation (in $ million) (continued) A reconciliation between taxation expense and the product of accounting profit multiplied by the applicable tax rate for the years ended 31 March is as follows: The Group 2010-11 2009-10...

  • Page 141
    ANNUAL REPORT 2010/2011 139 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 13 Dividends Paid and Proposed (in $ million) The Group and the Company 2010-11 2009-10 Dividends paid: Dividendpinpspecie Final dividend of 12.0 cents per share tax exempt (one-tier) in respect of 2009-10 (2009-10: 20.0...

  • Page 142
    ... Treasury shares relate to ordinary shares of the Company that are held by the Company. During the financial year, the Company purchased 3,149,000 of its ordinary shares by way of on-market purchases at share prices ranging from $13.13 to $15.27. The total amount paid to purchase the shares was...

  • Page 143
    ANNUAL REPORT 2010/2011 141 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 16 Other Reserves (in $ million) (a) Capital reserve Capital reserve mainly arises from the revaluation of land and buildings owned by RCMS Properties Private Limited, an associated company, and the gains or losses on the...

  • Page 144
    ...changes Share of associated companies' net (loss)/gain on fair value reserve Recognised in the carrying value of non-financial assets on occurrence of capital expenditure commitments Recognised in the profit and loss account on occurrence of: Fuel hedging contracts recognised in "Fuel costs" Foreign...

  • Page 145
    ANNUAL REPORT 2010/2011 143 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 18 Deferred Taxation (in $ million) The Group Statement of financial position Profit and loss 31 March 2011 2010 2010-11 2009-10 The Company Statement of financial position 31 March 2011 2010 The deferred taxation arises...

  • Page 146
    ... FINANCIAL STATEMENTS 31 March 2011 19 Long-Term Liabilities (in $ million) The Group 31 March 2011 2010 The Company 31 March 2011 2010 Notes payable Current Non-current Loans Current Non-current Finance lease commitments Current Non-current Maintenance reserve Current Non-current Total long-term...

  • Page 147
    ANNUAL REPORT 2010/2011 145 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 19 Long-Term Liabilities (in $ million) (continued) Finance lease commitments (continued) Interest rates on 3 of SIA Cargo's finance lease commitments are charged at a margin above the London Interbank Offered Rate ("...

  • Page 148
    ... THE FINANCIAL STATEMENTS 31 March 2011 21 Property, Plant and Equipment (in $ million) The Group Aircraft spares Aircraft spare engines Aircraft Cost At 1 April 2009 Additions Disposal of a subsidiary company Transfers Transfer to intangible assets Disposals Exchange differences At 31 March 2010...

  • Page 149
    ANNUAL REPORT 2010/2011 147 Freehold land Freehold buildings Leasehold land and buildings Plant and equipment Office and computer equipment Advance and progress payments Total 17.1 (1.4) 15.7 15.7 165.8 (14.7) (0.4) 150.7 (2.1) 148.6 1,393.5 11.1 (807.1) 8.5 (31.9) (0.3) 573.8 0.4 45.4 ...

  • Page 150
    148 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 21 Property, Plant and Equipment (in $ million) (continued) The Company Aircraft spares Aircraft spare engines Aircraft Cost At 1 April 2009 Additions Transfers Disposals At 31 March 2010 Additions Transfers Transfers to ...

  • Page 151
    ANNUAL REPORT 2010/2011 149 Freehold land Freehold buildings Leasehold land and buildings Plant and equipment Office and computer equipment Advance and progress payments Total 15.7 15.7 15.7 151.1 (0.4) 150.7 (2.0) 148.7 341.7 341.7 341.7 423.6 2.1 11.6 (9.8) 427.5 38.0 31.8 (146.9) 350...

  • Page 152
    150 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 21 Property, Plant and Equipment (in $ million) (continued) The Group 31 March 2011 2010 Net book value of property, plant and equipment acquired under finance leases: - aircraft - plant and equipment 676.5 0.1 676.6 739.1 ...

  • Page 153
    ANNUAL REPORT 2010/2011 151 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 22 Intangible Assets (in $ million) The Group Goodwill arising on consolidation Deferred engine development Licences cost Advance and progress payments Computer software Brands Customer relationships Total Cost At 1 ...

  • Page 154
    ...2007-08, SIAEC acquired 100.0% equity interest in Aircraft Maintenance Service Australia Pty Ltd. Upon acquisition, licences to operate in Australia were capitalised. The disposal of licences in the previous financial year of $27.3 million pertained to balances from SATS Group, which was disposed on...

  • Page 155
    ANNUAL REPORT 2010/2011 153 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 23 Subsidiary Companies (in $ million) The Company 31 March 2011 2010 Investment in subsidiary companies (at cost) Quoted equity investments Unquoted equity investments Accumulated impairment loss Loan to a subsidiary ...

  • Page 156
    ... THE FINANCIAL STATEMENTS 31 March 2011 23 Subsidiary Companies (in $ million) (continued) The subsidiary companies at 31 March are: Country of incorporation and Percentage of equity held by the Group Principal activities SIA Engineering Company Limited Aircraft Maintenance Services Australia Pty...

  • Page 157
    ...17.3 million at 31 March 2011 (2010: revaluation loss of $17.7 million) is included under the share of post-acquisition capital reserve. SIAEC and Southern Airports Corporation incorporated a company, Southern Airports Aircraft Maintenance Services Company Limited ("SAAM") in Vietnam. SIAEC injected...

  • Page 158
    ... Aircraft Maintenance Services Company Limited#++ Combustor Airmotive Services Pte Ltd^+++ @ place of business 2011 49.0 32.9 20.0 39.1 2010 50.0 49.0 33.7 20.0 - Quality service training Singapore Air transportation United Kingdom Investment holding Singapore Hotel ownership and management...

  • Page 159
    ANNUAL REPORT 2010/2011 157 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 24 Associated Companies (in $ million) (continued) Percentage of equity held by the Group Country of incorporation and Principal activities Eagle Services Asia Private Limited^++ Fuel Accessory Service Technologies Pte ...

  • Page 160
    ...SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 25 Joint Venture Companies (in $ million) The Group 31 March 2011 2010 Investment in joint venture companies (unquoted, at cost) Share of post-acquisition reserves - general reserve - share of other comprehensive income - foreign...

  • Page 161
    ANNUAL REPORT 2010/2011 159 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 26 Long-Term Investments (in $ million) The Group 31 March 2011 2010 The Company 31 March 2011 2010 Unquoted equity investments Accumulated impairment loss 44.5 (9.2) 35.3 44.5 (9.2) 35.3 28.0 (9.2) 18.8 28.0 (9.2) ...

  • Page 162
    160 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 29 Trade Debtors (in $ million) The table below is an analysis of trade debtors as at 31 March: The Group 31 March 2011 2010 The Company 31 March 2011 2010 Not past due and not impaired Past due but not impaired 1,280.0 121...

  • Page 163
    ... as follows: The Group 31 March 2011 2010 The Company 31 March 2011 2010 Balance at 1 April Written back during the year Written off during the year Disposal of a subsidiary company Balance at 31 March Bad debts written off directly to profit and loss account, net of debts recovered 26.0 (1.5) 24...

  • Page 164
    ... periods of between one day and one year depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. The weighted average effective interest rate for shortterm deposits is 0.46% (2009-10: 0.35%) per annum. 33 Trade and Other Creditors...

  • Page 165
    ANNUAL REPORT 2010/2011 163 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 35 Capital and Other Commitments (in $ million) ) (continued) (b) Operating lease commitments As lessee Aircraft The Company has 1 B747-400, 4 B777-200, 3 B777-200ER, 7 B777-300, 19 A330-300 and 6 A380-800 aircraft under ...

  • Page 166
    ... Cargo and the Company were among several airlines that received notice of investigations by competition authorities in the US, European Union, Australia, Canada, New Zealand, South Africa, South Korea and Switzerland as to whether surcharges, rates or other competitive aspects of air cargo service...

  • Page 167
    ...United States to a close for SIA Cargo. On 30 November 2010, the Korea Fair Trade Commission ("KFTC") released its adverse decision against 21 air cargo carriers, including SIA Cargo, in respect of fuel surcharges. A fine of KRW3.117 billion ($3.6 million) was imposed on SIA Cargo. The fine was paid...

  • Page 168
    ...in the Federal Court of Australia (New South Wales District Registry) on 15 December 2006 naming seven respondents [International Air Transport Association ("IATA"), Qantas Airways Limited, British Airways plc, Air New Zealand Limited, Singapore Airlines Limited, Malaysian Airline System Berhad, and...

  • Page 169
    ... basis: Derivatives at fair value through profit and loss Total 2011 The Group Availablefor-sale Derivatives Loans and financial used for receivables assets hedging Financial liabilities at amortised cost Assets Long-term investments Other receivables Trade debtors Deposits and other debtors...

  • Page 170
    ...-sale financial assets Financial liabilities at amortised cost Total 2011 The Company Loans and receivables Derivatives used for hedging Assets Long-term investments Other receivables Trade debtors Deposits and other debtors Amounts owing by subsidiary companies Investments Cash and bank...

  • Page 171
    ...(continued) Derivatives at fair value through profit and loss Total 2010 The Group Availablefor-sale Derivatives Loans and financial used for receivables assets hedging Financial liabilities at amortised cost Assets Long-term investments Other receivables Trade debtors Deposits and other debtors...

  • Page 172
    ...-sale financial assets Financial liabilities at amortised cost Total 2010 The Company Loans and receivables Derivatives used for hedging Assets Long-term investments Other receivables Trade debtors Deposits and other debtors Amounts owing by subsidiary companies Investments Cash and bank...

  • Page 173
    ... (continued) Derivative financial instruments included in the statements of financial position are as follows: The Group 31 March 2011 2010 The Company 31 March 2011 2010 Assets* Currency hedging contracts Fuel hedging contracts Cross currency swap contracts Interest rate cap contracts Liabilities...

  • Page 174
    ...1) (Level 2) Quoted prices in active markets for identical instruments (Level 1) 2010 Total Significant other observable inputs (Level 2) Total Financial assets: Available-for-sale financial assets (Note 31) Quoted investments - Government securities - Equity investments - Non-equity investments...

  • Page 175
    ... rate estimated as average of the past 12 months Singapore Government Securities benchmark issues' one-year yield (2010-11: 0.38%, 2009-10: 0.41%) was also applied to each individual jet fuel option contract to derive their estimated fair values as at the end of the reporting period. The fair values...

  • Page 176
    ... the effects of changes in jet fuel prices, foreign currency exchange rates, interest rates and the market value of its investments. The Group's overall risk management approach is to moderate the effects of such volatility on its financial performance. The Group's policy is to use derivatives...

  • Page 177
    ANNUAL REPORT 2010/2011 175 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (a) Jet fuel price risk (continued) Cash flow hedges The Group manages this fuel price risk by using swap and option contracts and hedging up...

  • Page 178
    ...March 2011 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (b) Foreign currency risk The Group is exposed to the effects of foreign exchange rate fluctuations because of its foreign currency denominated operating revenues and expenses. For the financial year ended 31...

  • Page 179
    ANNUAL REPORT 2010/2011 177 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (b) Foreign currency risk (continued) Foreign currency sensitivity analysis The foreign currency risk sensitivity analysis is based on the ...

  • Page 180
    ... costs on its financial assets and liabilities, with the prior approval of the BEC or Boards of subsidiary companies. Cash flow hedges As at 31 March 2011, the Company has interest rate cap contracts at a strike rate of 6.50% (2010: 6.50%), maturing in 6 to 7 years, to hedge against risk of increase...

  • Page 181
    ANNUAL REPORT 2010/2011 179 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (c) Interest rate risk (continued) Interest rate sensitivity analysis (continued) Under these assumptions, an increase or decrease in market ...

  • Page 182
    180 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (e) Liquidity risk At 31 March 2011, the Group has at its disposal, cash and short-term deposits amounting to $7,434.2 million (2010: $4,471.9 ...

  • Page 183
    ... Management Objectives and Policies (in $ million) (continued) (e) Liquidity risk (continued) More than 5 years 2010 Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years Total The Group Notes payable Finance lease commitments Trade and other creditors Amounts owing to associated companies...

  • Page 184
    182 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (f) Credit risk (continued) There are no significant concentrations of credit risk other than on derivative counterparties where transactions are ...

  • Page 185
    ANNUAL REPORT 2010/2011 183 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (g) Counterparty risk (continued) The Group determines concentrations of credit risk by monitoring the industry, country and credit rating of...

  • Page 186
    ... changes were made in the objectives, policies or processes relating to the management of the Company's capital structure. The Group 31 March 2011 2010 The Company 31 March 2011 2010 Notes payable Finance lease commitments Loans Total debt Share capital Reserves Total capital Gearing ratio (times...

  • Page 187
    ANNUAL REPORT 2010/2011 185 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 40 Related Party Transactions (in $ million) (continued) Directors' and key executives' remuneration of the Company The Company 31 March 2010-11 2009-10 Directors Salary, bonuses and other costs CPF and other defined ...

  • Page 188
    186 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 40 Related Party Transactions (in $ million) (continued) Conditional awards granted to directors and key executives of the Company pursuant to the Restricted Share Plan and the Performance Share Plan are as follows: Directors ...

  • Page 189
    ANNUAL REPORT 2010/2011 187 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 40 Related Party Transactions (in $ million) (continued) Directors and key executives in office during the financial year (continued) PSP Base Awards R2 Aggregate Aggregate Base ordinary shares Awards granted released to ...

  • Page 190
    188 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 40 Related Party Transactions (in $ million) (continued) Directors and key executives in office at the end of the financial year (continued) Time-based RSP Awards Aggregate Aggregate ordinary shares Awards released to granted ...

  • Page 191
    ... higher operating costs arising from recent increases in price of jet fuel. The Company and SilkAir will continue to monitor closely the price of fuel and keep surcharges under constant review. On 25 April 2011, SIA Cargo injected $63.5 million (RMB328 million) in cash into China Cargo Airlines Ltd...

  • Page 192
    ... Telecommunications Limited Group Singapore Telecommunications Limited Trusted Hub Limited Temasek Holdings (Private) Limited and Associates Great Wall Airlines Company Limited MediaCorp Pte Ltd PSA Corporation Limited * Tiger Airways Holdings Limited Group Tiger Airways Singapore Pte Ltd Total...

  • Page 193
    ANNUAL REPORT 2010/2011 191 QUARTERLY RESULTS OF THE GROUP 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total TOTAL REVENUE 2010-11 2009-10 ($ million) ($ million) 3,465.8 2,871.4 3,631.2 3,082.1 3,841.0 3,418.0 3,586.8 3,335.8 14,524.8 12,707.3 TOTAL EXPENDITURE 2010-11 2009-10 ($ ...

  • Page 194
    ...Singapore Aircraft Leasing Enterprise Pte Ltd Cargo fines (201.8) Profit before taxation 1,419.0 Profit attributable to owners of the Parent 1,092.0 STATEMENT OF FINANCIAL POSITION ($ million) Share capital Treasury shares Capital reserve Foreign currency translation reserve Share-based compensation...

  • Page 195
    ... DATA Earnings before tax (cents) Earnings after tax (cents) - basic - diluted Cash earnings ($) R2 Net asset value ($) SHARE PRICE ($) High Low Closing DIVIDENDS Gross dividends (cents per share) Dividend cover (times) PROFITABILITY RATIOS (%) Return on equity holders' funds Return on total assets...

  • Page 196
    ... FLEET Aircraft (numbers) Average age (months) Industry-wide average age (months) PASSENGER PRODUCTION Destination cities Distance flown Time flown Available seat-km TRAFFIC Passengers carried Revenue passenger-km Passenger load factor STAFF Average strength Seat capacity per employee R3 Passenger...

  • Page 197
    ... 11 freighters. 108 and 18 of the passenger aircraft were operated by Singapore Airlines and SilkAir respectively. Average age in years (y) and months (m) Aircraft type Seats in Finance Operating standard Owned Lease Lease Total configuration Expiry of operating lease 2011-12 2012-13 On firm On...

  • Page 198
    ...Eagle Services Asia Private Limited Fuel Accessory Service Technologies Pte Ltd PWA International Limited PT JAS Aero - Engineering Services Safran Electronics Asia Pte Ltd Southern Airports Aircraft Maintenance Services Company Limited 5% 100% Singapore Aviation and General Insurance Company (Pte...

  • Page 199
    ... 6 June 2011 No. of Issued Shares: No. of Issued Shares (excluding Treasury Shares): No./Percentage of Treasury Shares: Class of Shares: 1,197,928,581 1,195,030,135 2,898,446 (0.24%) Ordinary shares One Special share held by the Minister for Finance 1 vote per share Number of shares Voting Rights...

  • Page 200
    ...6 June 2011 Twenty largest shareholders Name 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 Citibank Nominees Singapore Pte Ltd DBS Nominees Pte Ltd HSBC (Singapore) Nominees Pte Ltd DBSN Services Pte Ltd United Overseas Bank Nominees Pte...

  • Page 201
    ANNUAL REPORT 2010/2011 199 SHARE PRICE AND TURNOVER Singapore Airlines Share Price and Turnover 60 3,500 50 Share Price ($) Volume (Million Stock Units) 3,000 40 Ingex 30 2,500 20 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 ...

  • Page 202
    ... To re-elect Mr Goh Choon Phong, a Director who is retiring in accordance with Article 89 of the Company's Articles of Association and who, being eligible, offers himself for re-election. To approve Directors' fees of up to $1,650,000 for the financial year ending 31 March 2012 (FY 2010/2011: up to...

  • Page 203
    ...per cent of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below); (2) (subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities Trading Limited ("SGX-ST")) for the...

  • Page 204
    ... title) received by the Share Registrar, M & C Services Private Limited, 138 Robinson Road, #17-00 The Corporate Office, Singapore 068906 up to 5.00 p.m. on 4 August 2011 will be registered to determine shareholders' entitlements to the final and special dividends. Subject as aforesaid, shareholders...

  • Page 205
    ... that is, during Financial Year 2011-12. Directors' fees are computed based on the anticipated number of Board and Committee meetings for Financial Year 2011-12, assuming full attendance by all of the current eight non-executive Directors, at the fee rates shown in the Annual Report. The amount also...

  • Page 206
    ... SINGAPORE AIRLINES NOTICE OF ANNUAL GENERAL MEETING 5. Ordinary Resolution No. 7.2, if passed, will empower the Directors to grant awards pursuant to the SIA Performance Share Plan and the SIA Restricted Share Plan, and to allot and issue ordinary shares in the capital of the Company ("Shares...

  • Page 207

  • Page 208
    Registered Address Airline House, 25 Airline Road Singapore 819829 Company Secretary Ethel Tan Tel: 6541 4030 Fax: 6546 7469 Email: [email protected] Investor Relations Tel: 6541 4885 Fax: 6542 9605 Email: [email protected] Public Affairs Tel: 6541 5880 Fax: 6545 ...