Singapore Airlines 2011 Annual Report Download - page 44

CORPORATE GOVERNANCE REPORT
For the period 1 April 2010 to 31 March 2011
SINGAPORE AIRLINES
042
Additional information on Economic Value Added (EVA)-based incentive plan (EBIP):
A portion of the annual performance-related bonus of senior management is tied to the EVA produced by
the Group in the year. Under the plan, one-third of the accumulated EBIP bonus, comprising the EBIP bonus
declared in the financial year and the balance of such bonus brought forward from preceding years, is paid
out in cash each year. The remaining two-thirds are carried forward in the individual executive’s EBIP account.
Amounts in the EBIP account are at risk because negative EVA will result in a retraction of EBIP bonus earned
in preceding years. This mechanism encourages Management to work for sustainable profitability and to adopt
strategies that are aligned with the long-term interests of the Company.
The rules of the EBIP are subject to review by the Board Compensation and Industrial Relations Committee,
which has the discretion, under authority of the Board, to amend the rules where appropriate and relevant to
the business conditions.
Accountability (Principle 10)
The Board, through its announcements of quarterly and full-year results, aims to provide shareholders with
a balanced and understandable assessment of the Company’s performance and prospects. Management
provides the Board with monthly management accounts for the Board’s review.
The Company has clear policies and guidelines for dealings in securities by Directors and employees, as
recommended by the SGX-ST’s Best Practices Guide. The Company imposes a trading embargo on its Directors
and employees from trading in its securities for the period of two weeks prior to the announcement 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 accordance with its responsibilities and duties under its
Charter, included the following:
(a) Financial Reporting
The AC reviewed the quarterly and annual financial statements and financial announcements required
by SGX-ST for recommendation to the Board for approval. The review focused on changes in accounting
policies and practices, major judgmental and risk areas, significant adjustments resulting from the audit,
the going concern assumption, compliance with accounting standards, compliance with SGX-ST and other
legal requirements.
(b) External Audit
The AC discussed with the external auditor the audit plan, and the report on the audit of the year-end financial
statements; reviewed the external auditor’s management letter and Management’s responses thereto; and
reviewed the external auditor’s objectivity and independence from Management and the Company.