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Singapore Airlines
Annual Report
2011/2012

Table of contents

  • Page 1
    Singapore Airlines Annual Report 2011/2012

  • Page 2
    ... Highlights Board Of Directors Chairman's Letter To Shareholders Corporate Data Significant Events The Year In Review Network Fleet Management Products And Services 023 026 028 030 034 036 039 063 199 People Development Environment Supporting Our Communities Subsidiaries List Of Awards Statement...

  • Page 3
    ... high jet fuel prices, shorter economic cycles and natural disasters. Beyond the challenges, the Airline will maintain its long-term approach and remains committed to optimising operating efficiency and containing costs. In these uncertain times, nimbleness and ï¬,exibility will be key as we...

  • Page 4
    ... 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 Profit before taxation Profit after taxation Value added R2 2010-11 % Change...

  • Page 5
    ANNUAL REPORT 2011/2012 003 Statistical Highlights Operating Statistics 2011-12 Singapore Airlines 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...

  • Page 6

  • Page 7
    Serving With Pride At every step of the journey, we are focused on delivering the highest service standards to all our customers. Our staff continue to shine as the Airline's key assets, with a will to serve and to create extraordinary moments in the Singapore Airlines travel experience.

  • Page 8
    ...of Singapore Airlines Cargo Pte Ltd from 2006 to 2010. 3. 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 has held key positions in major trade and...

  • Page 9
    ...30 years of experience in the practice of law, specialising 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...

  • Page 10
    SIA remains focused on adhering to its three core strengths, encompassing service excellence, product leadership and network connectivity. Much has taken place in all these areas over the past year, and there is more to come.

  • Page 11
    ... helped reduce our unit cost excluding fuel by 7.5% in the last financial year. With fuel prices expected to remain at high levels, the senior management team is committed to ongoing containment of costs. Our staff continue to do their part to ensure the Group remains in a position of strength...

  • Page 12
    ... Lee Ching Yen Christina Ong Board Safety and Risk Committee Chairman James Koh Cher Siang (until 31 August 2011) Jackson Peter Tai (from 1 September 2011) Audit Partner Mak Keat Meng (appointed since FY 2010-11) Board Committees Board Executive Committee Chairman Stephen Lee Ching Yen Members...

  • Page 13
    ...2012-13 Second Quarter and Half-Year Results Marvin Tan Meng Hung Chief Executive SilkAir (Singapore) Private Limited Gerard Yeap Beng Hock Senior Vice President Flight Operations Christopher Cheng Kian Hai Senior Vice President Human Resources Tan Kai Ping President Singapore Airlines Cargo Pte...

  • Page 14
    ... is signed with the Virgin Australia group of companies to establish a long-term alliance covering codesharing on each other's ï¬,ights, reciprocal frequent ï¬,yer benefits and lounge access, among other initiatives. The Airline introduces a range of toys from Hasbro specially for young customers...

  • Page 15
    ... added to the Airline's codeshare network, offering customers more choices of ï¬,ights. Paying tribute to the Boeing 747 after nearly 40 years of service, the Airline displays aircraft '9V-SPQ', the last B747400 delivered to the Airline in 2001, at the Singapore Airshow 2012. More than 1,000 staff...

  • Page 16
    014 SINGAPORE AIRLINES

  • Page 17
    ANNUAL REPORT 2011/2012 015 Enriching Every Experience We dare to imagine an experience that brings exhilaration to our customers whenever they travel as we continue to introduce new and innovative product offerings on board our ï¬,ights. With our KrisFlyer members enjoying more opportunities to ...

  • Page 18
    ... in the operating environment, the Airline will maintain a long-term approach to product and service excellence, by introducing new inï¬,ight offerings and cabin renewal programmes. The Group is also committed to optimising operating efficiency and containing costs. The Airline has embarked on...

  • Page 19
    ANNUAL REPORT 2011/2012 017 Operating Review

  • Page 20
    ... year in review saw strategic capacity management of Singapore Airlines' global network to meet the changes in demand patterns. The Airline increased frequency to points in Southeast Asia, North Asia, the Indian subcontinent and other markets during the Northern Winter operating season as a result...

  • Page 21
    ANNUAL REPORT 2011/2012 019 Operating Review In our continual pursuit to offer a young and modern ï¬,eet to our customers, Singapore Airlines announced new aircraft orders for 15 Airbus A330-300s on operating leases and purchase of eight Boeing 777-300ER aircraft. Fleet Management The year in ...

  • Page 22
    ...from Japan, Korea, Hong Kong, Taiwan and India also provide countless hours of enjoyment. Ground Services Mobile Boarding Pass The Airline has introduced the use of Mobile Boarding Pass at Singapore, Hong Kong and Frankfurt airports. Now, eligible passengers departing from these airports (excluding...

  • Page 23
    ANNUAL REPORT 2011/2012 021 Operating Review Singapore Airlines customers can now keep updated even during ï¬,ights with happenings around the world, by viewing the latest news headlines on KrisWorld via a news ticker powered by Channel NewsAsia. In addition, customers can connect to the Internet...

  • Page 24
    022 SINGAPORE AIRLINES Operating Review

  • Page 25
    ... the job market. In 2011, it was voted one of the top five private employers of choice in a survey of fresh local graduates by campus recruitment specialist JobsFactory, an award it has retained for four consecutive years. As at 31 March 2012, the staff strength of SIA Group was 22,746, an increase...

  • Page 26
    ... Airlines continues to do our part to support the communities in which we operate. Following the March 2011 earthquake and tsunami, over $350,000 was raised for the Singapore Red Cross Society for its work in Japan. Singapore Airlines also actively contributes to many other causes on an annual...

  • Page 27
    ANNUAL REPORT 2011/2012 025

  • Page 28
    ... Fuel Users Group in September 2011. Environment The environment is one of the aviation industry's key priorities, along with safety and security. Airlines are working constantly to limit their climate change impact, emissions and noise. Over the past 40 years, the industry has improved fuel...

  • Page 29
    ANNUAL REPORT 2011/2012 027 Operating Review Singapore Airlines continues to do its part to reduce fuel consumption and carbon emissions, through various initiatives such as ï¬,ight operations enhancements, engineering performance and maintenance improvements, as well as weight saving measures. ...

  • Page 30
    ... were given the opportunity to try out the seats and view serviceware and amenities from the past. Food and drinks were catered to ensure an enjoyable experience was had by all. As a long-time supporter of Community Chest, the Airline continued to contribute towards the annual "Give A Hand" campaign...

  • Page 31
    ... from the Airline Pilots Assocation - Singapore to the Japan Red Cross, a total of $415,384 was raised. In the Philippines, the Airline supported the Children's Hour Annual Benefit Luncheon "Everyday it's Christmas". A range of gifts and donations were given to children of informal settlers along...

  • Page 32
    ... trade lanes for the Singapore market by the last quarter of the new financial year. During the year in review, SIA Cargo received the "Award for Excellence (Air Carrier)" from Air Cargo World. It was also named Best Air Cargo Carrier in Asia and Best Green Service Provider (Airline) at the 2011...

  • Page 33
    ...costs due to high jet fuel prices and the stability of the global economy's recovery. In view of this challenging business environment, SIA Cargo will remain ï¬,exible in deploying its resources, and vigilant in maintaining cost discipline. The company will also continue to seek growth opportunities...

  • Page 34
    ... systems. SIAEC officially opened its line maintenance station at San Francisco International Airport, bringing its global line maintenance network to 28 airports spread across seven countries and territories - Singapore, Australia, United States, Hong Kong, Indonesia, Vietnam and the Philippines.

  • Page 35
    ... 2011 Skytrax World Airline Awards. These honours followed the induction of SilkAir into the TTG Asia Travel Hall of Fame in 2010, after its 10th win in the TTG Asia Travel Awards in 2009. SilkAir was once again voted one of the Top 10 Airlines Worldwide for Cabin Service by Hong Kong-based online...

  • Page 36
    ...Hong Kong) 2011 Travel Awards •฀ Asia's฀Best฀Airline฀for฀First฀Class •฀ Asia's฀Best฀Airline฀for฀Business฀Class Securities Investors Association (Singapore) SIAS 12th Investors' Choice Awards 2011 •฀ Most฀Transparent฀Company฀Award฀2011฀ (7th consecutive year...

  • Page 37
    ANNUAL REPORT 2011/2012 035 Operating Review SEPTEMBER Korea Economic Daily & Korean Consumer's Forum Brand of the Year 2011, International Flights Category •฀ Best฀Foreign฀airline JULY Singapore Corporate Awards 2011 Organised by Business Times Singapore •฀ Gold฀-฀Best฀...

  • Page 38
    ... management Principles, Policies and Guidelines. 2 Governance & Reporting Structure 2.1 Board฀of฀Directors฀- Annually, SIA's Board of Directors reviews and discusses the strategic and other key risks of the Group. Board฀ Committees - The Board's oversight is supported by the Board Safety...

  • Page 39
    ... and up-to-date. These processes are embedded within the work schedules of the business units, and driven by the quarterly risk review activities of the Risk Committees. 3.3 4 Principles, Policies And Guidelines 4.1 Governing Philosophy - A set of Risk Management Principles adapted from ISO 31000...

  • Page 40
    ...2011, with staff being required to re-take the training course and test as a refresher every two years. 5.2 5.3 5.4 5.5 6 Board Of Directors' Comments On The Practice Of Risk Management In Singapore Airlines 6.1 Having reviewed the risk management practices and activities of Singapore Airlines...

  • Page 41
    ANNUAL REPORT 2011/2012 039 Corporate Governance Report For the period 1 April 2011 to 31 March 2012 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 42
    ... AIRLINES Corporate Governance Report For the period 1 April 2011 to 31 March 2012 There is a strong independent element in the Board, with the Nominating Committee considering seven out of nine Directors to be independent from Management and the Company's substantial shareholder, Temasek Holdings...

  • Page 43
    ... three years, after which they are considered for re-nomination for another term(s). Their re-nominations are subject to the recommendations of the Chairman of the Board and the NC. The Company's Articles of Association provide that one-third of the Directors for the time being, or, if their number...

  • Page 44
    ...as reports on its subsidiaries and associated companies, updates on business development, monthly management accounts, and productivity and performance indicators, as well as matters for the decision or information of the Board. Directors have separate and independent access to Senior Management and...

  • Page 45
    ...the form of an annual profit-sharing bonus. The profit sharing bonus targets are designed to achieve a good balance of both Group financial objectives and the Company's operational performance. Payment of the variable bonus is based on senior executives achieving the target levels set for each of...

  • Page 46
    ... 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 81 to 84 of the Report by the Board of Directors. Directors' Fees The Directors' fees paid in financial year 2011-12 amounted to $1,469,000 [financial year 2010...

  • Page 47
    ANNUAL REPORT 2011/2012 045 Corporate Governance Report For the period 1 April 2011 to 31 March 2012 Disclosure on Remuneration The following table shows the composition of the remuneration of Directors. Performance and Restricted Shares granted during the year2 Directors Fee $ Salary $ Bonuses1 ...

  • Page 48
    046 SINGAPORE AIRLINES Corporate Governance Report For the period 1 April 2011 to 31 March 2012 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 2012. Performance and Restricted Shares...

  • Page 49
    ...2011 to 31 March 2012 Board Audit Committee Activities (Principle 11) The AC's activities for financial year 2011-12, 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...

  • Page 50
    ... AIRLINES Corporate Governance Report For the period 1 April 2011 to 31 March 2012 (g) Others The AC has full access to and co-operation of Management. The AC also has full discretion to invite any Director or executive officer to attend its meetings, and has been given adequate resources...

  • Page 51
    .... The Company's website is an important source of information for shareholders and the investment community. Quarterly results announcements, news releases, presentation slides, transcripts for half-year and year-end results analyst and media briefings, monthly operating statistics, annual reports...

  • Page 52
    ...And Attendance Of Singapore Airlines Limited Board Of Directors And Board Committee Members For the Period 1 April 2011 to 31 March 2012 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...

  • Page 53
    ANNUAL REPORT 2011/2012 051 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 54
    ...on: Board Executive Committee Board Compensation and Industrial Relations Committee Board Nominating Committee 26 April 2004 29 July 2011 Chairman Chairman Member Current Directorships in Other Listed Companies ฀ ฀ 1. Organisation/Company฀ SIA Engineering Company Limited Title Chairman Other...

  • Page 55
    ...Air Transport Association Title฀ Director Member, Board of Governors Directorships/Appointments in the past 3 years ฀ ฀ 1. 2. 3. Organisation/Company฀ SilkAir (Singapore) Private Limited Great Wall Airlines Company Limited Singapore Airlines Cargo Pte Ltd Title฀ Chairman Director Director

  • Page 56
    ... Hotels, Limited Title Executive Deputy Chairman Deputy Chairman Director Director Director Director Director Other Major Appointments ฀ ฀ 1. Organisation/Company฀ The Hongkong and Shanghai Banking Corporation Limited Title฀ Deputy Chairman Directorships/Appointments in the past 3 years...

  • Page 57
    ... Committee Board Executive Committee 1 September 2006 29 July 2011 Chairperson Member Current Directorships in Other Listed Companies ฀ ฀ 1. 2. 3. 4. Organisation/Company฀ Aviva plc DBS Group Holdings Ltd CapitaLand Limited Singapore Exchange Limited Title Director Director Director Director...

  • Page 58
    ... Australia Ltd Infrastructure NSW Title฀ Chairman Chairman Chairman Chairman Chairman Director Directorships/Appointments in the past 3 years ฀ ฀ 1. 2. 3. Organisation/Company฀ Australian Securities Exchange Ltd Sydney Grammar School Westfield Group - Westfield Holdings Limited Title...

  • Page 59
    ... as a director: Board committee(s) served on: Board Nominating Committee Board Safety and Risk Committee 1 September 2007 27 July 2010 Member Member Major Appointments ฀ ฀ 1. 2. Organisation/Company฀ AX 21 Holdings Pte Ltd Club 21 Pte Ltd Title฀ Managing Director Managing Director Others...

  • Page 60
    ... on: Board Safety and Risk Committee Board Compensation and Industrial Relations Committee 1 September 2009 27 July 2010 Chairman Member Current Directorships in Other Listed Companies ฀ ฀ 1. 2. 3. Organisation/Company฀ Bayer AG Microsoft Corporation UBS AG Title Director Director Director...

  • Page 61
    ... re-election as a director: Board committee(s) served on: Board Audit Committee Board Compensation and Industrial Relations Committee 1 September 2011 Not Applicable Member Member Current Directorships in Other Listed Companies ฀ ฀ 1. 2. 3. 4. Organisation/Company฀ Bank of China MasterCard...

  • Page 62
    ... Board Safety and Risk Committee 1 September 2007 29 July 2011 Chairman Member Member Current Directorships in Other Listed Companies ฀ ฀ 1. 2. 3. Organisation/Company฀ Cerebos Pacific Limited Hap Seng Plantations Holdings Berhad Singapore Press Holdings Limited Title Director Director...

  • Page 63
    Financials

  • Page 64
    ... Statements 189 190 191 193 194 195 196 198 199 Additional Information Quarterly Results Of The Group Five-Year Financial Summary Of The Group Ten-Year Statistical Record The Group Fleet Profile Group Corporate Structure Information On Shareholdings Share Price And Turnover Notice Of Annual...

  • Page 65
    ANNUAL REPORT 2011/2012 063 Financial Review HIGHLIGHTS OF THE GROUP'S PERFORMANCE •฀ Total฀revenue฀$14,858฀million฀(+$333฀million,฀+2.3%) Revenue ($ million) 15,973 16,000 12,708 12,000 8,000 4,000 0 2007-08 2008-09 2009-10 2010-11 2011-12 12,000 8,000 4,000 0 15,996 14,525 14,...

  • Page 66
    064 SINGAPORE AIRLINES Financial Review Performance of the Group Key Financial Highlights ฀ 2011-12฀ 2010-11 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...

  • Page 67
    ANNUAL REPORT 2011/2012 065 Financial Review Performance of the Group (continued) Group Earnings (continued) Group expenditure, however, rose at a faster pace, increasing $1,318 million (+9.9 per cent) to $14,572 million, primarily from higher fuel cost. Average jet fuel prices spiked 31.7 per ...

  • Page 68
    ...fixed rate note in December 2011. Net asset value per share dropped 7.8 per cent to $10.96. The Group's net liquid assetsR1 decreased $1,543 million to $4,250 million as at 31 March 2012, mainly a result of lower cash and bank balances from the dividend payments. Total debt to equity ratio improved...

  • Page 69
    ANNUAL REPORT 2011/2012 067 Financial Review Performance of the Group (continued) Dividends For the financial year ended 31 March 2012, the Board recommends a final dividend of 10 cents per share. Including the interim dividend of 10 cents per share paid on 2 December 2011, the total dividend ...

  • Page 70
    ... %฀ Change Singapore Airlines SIA Engineering Group SilkAir SIA Cargo Others 13,992 6,166 1,192 992 404 22,746 13,793 6,132 1,116 954 287 22,282 + + + + + + 1.4 0.6 6.8 4.0 40.8 R3 2.1 Average staff productivity are as follows: 2011-12฀ 2010-11 Change Revenue per employee ($) Value added...

  • Page 71
    ANNUAL REPORT 2011/2012 069 Financial Review Performance of the Group (continued) Statements of Value Added and its Distribution 2011-12฀ $ million 2010-11 $ million Total revenue Less: Purchase of goods and services Add: Interest income (Loss)/Surplus on disposal of aircraft, spares and spare...

  • Page 72
    070 SINGAPORE AIRLINES Financial Review Performance of the Company Operating Performance 2011-12฀ 2010-11 Change Passengers carried (thousand) Available seat-km (million) Revenue passenger-km (million) Passenger load factor (%) Passenger yield (¢/pkm) Passenger unit cost (¢/ask) Passenger...

  • Page 73
    ...example, Singapore-Hong Kong-San Francisco-Hong Kong-Singapore route is classified under Americas region. East Asia covers Brunei, Hong Kong SAR, Indonesia, Japan, South Korea, Malaysia, People's Republic of China, Philippines, Thailand, Taiwan and Vietnam. Americas comprises Brazil and USA. Europe...

  • Page 74
    ...SINGAPORE AIRLINES Financial Review Performance of the Company (continued) Earnings ฀ ฀ ฀ 2011-12฀ $฀million฀ 2010-11฀ $฀million฀฀ %฀ Change Revenue Expenditure Operating profit Finance charges Interest income (Loss)/Surplus on disposal of aircraft, spares and spare engines...

  • Page 75
    ANNUAL REPORT 2011/2012 073 Financial Review Performance of the Company (continued) Revenue The Company's revenue increased 2.8 per cent to $12,070 million as follows: 2011-12฀ $฀million฀ 2010-11฀ $฀million฀ Change $฀million฀ % Passenger revenue Bellyhold revenue from SIA Cargo...

  • Page 76
    074 SINGAPORE AIRLINES Financial Review Performance of the Company (continued) Expenditure The Company's expenditure increased 9.2 per cent to $11,889 million in 2011-12. 2011-12฀ $฀million 2010-11฀ $฀million Change Fuel costs Staff costs Depreciation R7 Handling charges Inï¬,ight ...

  • Page 77
    ... previous year to 421ltk/BBL. This was mainly due to a decline in the overall load factor. A change in fuel productivity (passenger aircraft) of 1.0 per cent would impact the Company's annual fuel cost by about $49 million, before accounting for changes in fuel price, USD exchange rate and ï¬,ying...

  • Page 78
    ...SINGAPORE AIRLINES Financial Review Performance of the Company (continued) Staff Strength and Productivity The Company's staff strength as at 31 March 2012 was 13,992, an increase of 199 over last year. The distribution of employee strength by category and location is as follows: 2011-12฀ 2010...

  • Page 79
    ANNUAL REPORT 2011/2012 077 Financial Review Performance of the Subsidiary Companies (continued) SIA Engineering Group (continued) Share of profits of associated and joint venture companies increased $13 million or 8.7 per cent to $157 million, representing a contribution of 51.8 per cent to ...

  • Page 80
    078 SINGAPORE AIRLINES Financial Review Performance of the Subsidiary Companies (continued) SilkAir 2011-12฀ $฀million฀ 2010-11฀ $฀million฀ %฀฀Change Total revenue Total expenditure Operating profit Profit after taxation 750.8 646.2 104.6 84.9 670.3 548.9 121.4 103.8 + + -...

  • Page 81
    ANNUAL REPORT 2011/2012 079 Report by the Board Of Directors The directors are pleased to present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 March 2012. 1 Directors of the Company The names of the directors in of...

  • Page 82
    ... ฀ 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 Telecommunications...

  • Page 83
    ... which the director has a substantial financial interest. 5 Equity Compensation Plans of the Company The Company has in place, the Singapore Airlines Limited Employee Share Option Plan ("ESOP"), Restricted Share Plan ("RSP") and Performance Share Plan ("PSP"). At the date of this report, the Board...

  • Page 84
    ...2008 1.7.2009 - 1.7.2011 30.6.2012 30.6.2013 30.6.2014 30.6.2015 2.7.2016 1.7.2017 30.6.2018 * Following approval by the Company's shareholders of the declaration of a special dividend of $0.50 per share on 31 July 2007, the Board Compensation & Industrial Relations Committee approved a reduction...

  • Page 85
    ... a base number of conditional share awards ("Base Award") is granted to eligible participants annually. Depending on the achievement of pre-determined targets over a two-year performance period for the RSP and a three-year performance period for the PSP, the Board Compensation & Industrial Relations...

  • Page 86
    ... Awards during the financial year. Following approval by the Company's shareholders of a special dividend of $0.80 per share on 29 July 2011, the Board Compensation & Industrial Relations Committee approved an increase in all restricted shares and performance shares outstanding on 18 August 2011...

  • Page 87
    ANNUAL REPORT 2011/2012 085 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 41,376,903 unissued shares in SIAEC were outstanding. ...

  • Page 88
    ... view of the state of affairs of the Group and of the Company as at 31 March 2012 and the results, changes in equity and cash ï¬,ows of the Group and the changes in equity of the Company for the financial year ended on that date; and (ii) at the date of this statement there are reasonable grounds...

  • Page 89
    ...of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2012 and of the results, changes in equity and cash ï¬,ows of the Group and the changes in equity of the Company for the year ended on that...

  • Page 90
    088 SINGAPORE AIRLINES Independent Auditors' Report Report on Other Legal and Regulatory Requirements In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly ...

  • Page 91
    ...Account For The Financial Year Ended 31 March 2012 (in $ million) ฀ Notes฀ The Group 2011-12฀ 2010-11 REVENUE EXPENDITURE Staff costs Fuel costs Depreciation Impairment of property, plant and equipment Amortisation of intangible assets Aircraft maintenance and overhaul costs Commission and...

  • Page 92
    ... AIRLINES Consolidated Statement of Comprehensive Income For The Financial Year Ended 31 March 2012 (In $ million) ฀ ฀ ฀ The Group 2011-12฀ 2010-11 PROFIT FOR THE FINANCIAL YEAR OTHER COMPREHENSIVE INCOME: Currency translation differences Available-for-sale financial assets Cash...

  • Page 93
    ANNUAL REPORT 2011/2012 091 Statements of Financial Position As At 31 March 2012 (In $ million) The Group Notes 2012 2011 The Company 2012 2011 EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT Share capital Treasury shares Other reserves NON-CONTROLLING฀INTERESTS TOTAL EQUITY DEFERRED ACCOUNT ...

  • Page 94
    ...SINGAPORE AIRLINES Statements of Changes in Equity For The Financial Year Ended 31 March 2012 (In $ million) The Group ฀ ฀ ฀ Notes ฀ Share capital ฀ Treasury shares ฀ Capital reserve ฀ Balance at 1 April 2011 Comprehensive income Currency translation differences Net fair value...

  • Page 95
    ANNUAL REPORT 2011/2012 093 Attributable to Owners of the Parent Foreign currency฀฀ translation reserve Share-based฀ compensation reserve ฀ Fair value reserve General reserve ฀ Total ฀ Noncontrolling interests Total equity (186.1) 172.6 (138.0) 12,474.7 14,204.4 298.4 14,502.8...

  • Page 96
    ...SINGAPORE AIRLINES Statements of Changes in Equity For The Financial Year Ended 31 March 2012 (In $ million) The Group ฀ ฀ ฀ Notes ฀ Share capital ฀ Treasury shares ฀ Capital reserve ฀ Balance at 1 April 2010 Comprehensive income Currency translation differences Net fair value...

  • Page 97
    ANNUAL REPORT 2011/2012 095 Attributable to Owners of the Parent Foreign currency฀฀ translation reserve Share-based฀ compensation reserve ฀ Fair value reserve General reserve ฀ Total ฀ Noncontrolling interests Total equity (137.0) 185.3 (140.9) 11,737.0 13,468.9 280.4 13,749.3...

  • Page 98
    096 SINGAPORE AIRLINES Statements of Changes in Equity For The Financial Year Ended 31 March 2012 (In $ million) The Company ฀ ฀ ฀ Notes ฀ Share capital Share-based Treasury Capital compensation shares reserve reserve Fair value reserve General reserve Total Balance at 1 April 2011 ...

  • Page 99
    ... REPORT 2011/2012 097 Statements of Changes in Equity For The Financial Year Ended 31 March 2012 (In $ million) The Company ฀ ฀ ฀ Notes ฀ Share capital Share-based Treasury Capital compensation shares reserve reserve Fair value reserve General reserve Total Balance at 1 April 2010...

  • Page 100
    ...) on disposal of aircraft, spares and spare engines Dividends from long-term investments Other non-operating items Share of profits of joint venture companies Share of profits of associated companies Exceptional items Operating profit before working capital changes Increase in trade and other...

  • Page 101
    ANNUAL REPORT 2011/2012 099 ฀ Notes฀ The Group 2011-12฀ 2010-11 CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure Purchase of intangible assets Proceeds from disposal of aircraft and other property, plant and equipment Purchase of long-term investments Purchase of short-term ...

  • Page 102
    ... 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, engineering services, training of pilots, air...

  • Page 103
    ANNUAL REPORT 2011/2012 101 Notes to the Financial Statements 31 March 2012 2 Summary of Significant Accounting Policies (continued) (b) New and revised standards (continued) The Group has not adopted the following standards and interpretations that have been issued but not yet effective: ...

  • Page 104
    ...the subsidiary companies used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances. A list of the Group's subsidiary companies is shown...

  • Page 105
    ... In the Company's separate financial statements, investments in subsidiary and associated companies are accounted for at cost less accumulated impairment losses. A subsidiary company is defined as an entity over which the Group has the power to govern the financial and operating policies so as...

  • Page 106
    ...in associated companies are accounted 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 postacquisition changes in the Group's share of net assets of the associated company. Goodwill relating to...

  • Page 107
    ... assets are amortised on a straight-line basis over its estimated useful life of 3 years. (iii) Deferred engine development cost This relates to the Group's share of engine development payments made in connection with its participation in aircraft engine development projects with other companies...

  • Page 108
    ...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 on aircraft, engine overhauls and...

  • Page 109
    ... years to 20% residual values. For used freighter aircraft, the Group depreciates them over the remaining life (15 years less age of aircraft) to 20% residual values. Major inspection costs relating to landing gear overhauls, heavy maintenance visits and engine overhauls (including inspection costs...

  • Page 110
    ... over 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. Excess of sales proceeds over fair values are taken to the statement of financial position as deferred gain on sale and leaseback transactions...

  • Page 111
    ANNUAL REPORT 2011/2012 109 Notes to the Financial Statements 31 March 2012 2 Summary of Significant Accounting Policies (continued) (j) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Net realisable value is the ...

  • Page 112
    110 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 2 Summary of Significant Accounting Policies (continued) (k) Financial assets (continued) (iii)฀ Held-to-maturity฀investments Non-derivative financial assets with fixed or determinable payments and fixed maturity are ...

  • Page 113
    ... assets or groups of assets. In assessing value-in-use, the estimated future cash ï¬,ows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reï¬,ects current market assessments of the time value of money and the risks specific to the asset...

  • Page 114
    ... subsequent periods. (iii)฀ Available-for-sale฀financial฀assets Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are objective evidence that investment securities classi...

  • Page 115
    ANNUAL REPORT 2011/2012 113 Notes to the Financial Statements 31 March 2012 2 Summary of Significant Accounting Policies (continued) (q) Financial liabilities Financial liabilities are recognised on the statement of financial position when, and only when, the Group becomes a party to the ...

  • Page 116
    ... is made for engine overhaul, repairs and maintenance of aircraft (excluding line maintenance) based on past experience of the level of repairs. Provision for return costs to meet contractual return aircraft minimum conditions, at the end of the lease terms for the aircraft under operating leases...

  • Page 117
    ANNUAL REPORT 2011/2012 115 Notes to the Financial Statements 31 March 2012 2 Summary of Significant Accounting Policies (continued) (x) Frequent ï¬,yer programme The Company operates a frequent ï¬,yer programme called "KrisFlyer" that provides travel awards to programme members based on ...

  • Page 118
    ... 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 recognised as operating revenue when the...

  • Page 119
    ... for services rendered. The Group has in place, the Singapore Airlines Limited Employee Share Option Plan and the SIA Engineering Company Limited Employee Share Option Plan for granting of share options to senior executives and all other employees. The exercise price approximates the market value of...

  • Page 120
    ...on an incurred basis. For engine overhaul costs covered by powerby-hour third-party maintenance agreements, a portion of the cost is expensed at a fixed rate per hour during the terms of the agreements. (ad) Training and development costs Training and development costs, including start-up programme...

  • Page 121
    ... the services provided which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate...

  • Page 122
    120 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 2 Summary of Significant Accounting Policies (continued) (ah) Segment reporting (continued) (ii) Geographical segment The analysis of revenue by area of original sale from airline operations is derived by allocating revenue ...

  • Page 123
    ... as follows: (i) The airline operations segment provides passenger air transportation. (ii) The engineering services segment is in the business of providing airframe maintenance and overhaul services, line maintenance, technical ground handling services and ï¬,eet management programme. It also...

  • Page 124
    122 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 4 Segment Information (in $ million) (continued) Business segments The Group's business are organised and managed separately according to the nature of the services provided. The following table presents revenue and profit ...

  • Page 125
    ANNUAL REPORT 2011/2012 123 Engineering services฀ ฀2011-12฀฀ Cargo operations฀฀ 2011-12฀฀ Others฀ 2011-12฀฀ Total of segments฀฀ 2011-12฀฀ Elimination*฀฀ 2011-12฀฀ Consolidated 2011-12฀ 551.5 618.4 1,169.9 129.6 1.5 13.6 1.5 74.7 82.2 (31.1) 272.0 2,...

  • Page 126
    124 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 4 Segment Information (in $ million) (continued) Business segments (continued) ฀ ฀ Airline operations฀ 2010-11฀ TOTAL REVENUE External revenue Inter-segment revenue RESULTS Segment result Finance charges Interest ...

  • Page 127
    ANNUAL REPORT 2011/2012 125 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,...

  • Page 128
    ... SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 4 Segment Information (in $ million) (continued) Business segments (continued) ฀ Airline operations฀ 2012 OTHER INFORMATION AS AT 31 MARCH Segment assets Investments in and loans to associated and joint venture companies...

  • Page 129
    ANNUAL REPORT 2011/2012 127 Engineering services฀ 2012 Cargo operations฀฀ 2012 Others฀ 2012 Total of segments฀฀ 2012 Elimination*฀฀ 2012 Consolidated 2012 1,166.7 418.0 14.6 1,599.3 263.7 0.2 2.4 53.2 319.5 28.8 14.0 37.8 1.7 3.2 2,234.3 17.6 63.5 2,315.4 300.9 22.3 275.4 ...

  • Page 130
    ... SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 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...

  • Page 131
    ANNUAL REPORT 2011/2012 129 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 23.4 337.2 1.8 290...

  • Page 132
    ... revenue information on airline operations by geographical areas for the financial years ended 31 March 2012 and 2011. ฀ ฀ By area of original sale 2011-12฀ 2010-11 East Asia Europe South West Pacific Americas West Asia and Africa Systemwide Non-scheduled services and incidental revenue...

  • Page 133
    ANNUAL REPORT 2011/2012 131 Notes to the Financial Statements 31 March 2012 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 134
    132 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 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 135
    ANNUAL REPORT 2011/2012 133 Notes to the Financial Statements 31 March 2012 5 Staff Costs (in $ million) (continued) Share-based compensation expense (continued) Share option plans (continued) Number Exercisable period Exercise price outstanding Number exercisable 1.7.2006 - 30.6.2015 1.7.2007 ...

  • Page 136
    ... shares of the Company, conditional on position and individual performance targets set at the start of a two-year performance period based on medium-term Group and Company objectives. At both Company and Group level •฀ EBITDAR# Margin •฀ Value฀Added฀per฀$฀Employment฀ Cost PSP Award...

  • Page 137
    ANNUAL REPORT 2011/2012 135 Notes to the Financial Statements 31 March 2012 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 ฀ ฀ ...

  • Page 138
    ... table lists the key inputs to the model used for the July 2011 and July 2010 awards: July 2011 Award RSP PSP July 2010 Award RSP PSP Expected dividend yield (%) Expected volatility (%) Risk-free interest rate (%) Expected term (years) Share price at date of grant ($) Management's forecast in line...

  • Page 139
    ... one year after the retirement date. For employees still in service, 50% of the shares will vest in 2013 and the balance will vest equally in 2014 and 2015. The fair value of the time-based share awards is the market price of the shares at the date of grant discounted by the expected future dividend...

  • Page 140
    138 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 6 Operating Profit (in $ million) Operating profit for the financial year was arrived at after charging/(crediting): ฀ ฀ The Group 2011-12฀ 2010-11 Interest income from short-term investments Dividend income from ...

  • Page 141
    ANNUAL REPORT 2011/2012 139 Notes to the Financial Statements 31 March 2012 10 Exceptional Items (in $ million) During the financial year, the Company and Singapore Airlines Cargo Pte Ltd ("SIA Cargo") accepted a settlement offer from the plaintiffs in the Canadian air cargo class actions to ...

  • Page 142
    ... which the companies operate. 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 ฀ ฀ 2011-12฀ 2010-11 Profit before taxation Taxation at statutory corporate tax rate of 17...

  • Page 143
    ... special tax exempt [one-tier] dividend of 80.0 cents per share) amounting to $117.7 million (2010-11: $479.7 million and $959.3 million) be paid for the financial year ended 31 March 2012. 14 Share Capital (in $ million) The Group and the Company Number of shares 2012 2011 2012 Amount 2011 Issued...

  • Page 144
    ... the financial year, the Company issued 1,922,438 shares (2010-11: 5,552,283) upon exercise of options granted under the Employee Share Option Plan. No shares (2010-11: 767,786) were issued for RSP and PSP. 15 Treasury Shares (in $ million) The Group and the Company 31 March 2012 2011 Balance at...

  • Page 145
    ANNUAL REPORT 2011/2012 143 Notes to the Financial Statements 31 March 2012 16 Other Reserves (in $ million) The Group 31 March 2012 2011 2012 The Company 31 March 2011 Capital reserve Foreign currency translation reserve Share-based compensation reserve Fair value reserve General reserve 99.1 ...

  • Page 146
    144 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 16 Other Reserves (in $ million) (continued) (d) Fair value reserve (continued) Fair value changes of derivative financial instruments designated as hedging instruments in cash ï¬,ow hedges: The Group 31 March 2012 2011 2012 ...

  • Page 147
    ANNUAL REPORT 2011/2012 145 Notes to the Financial Statements 31 March 2012 18 Deferred Taxation (in $ million) The Group Statement of financial position 31 March 2012฀฀ 2011฀ 2011-12฀ 2010-11฀ Profit and loss The Company Statement of financial position 31 March 2012฀ 2011 The ...

  • Page 148
    ... SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 19฀ Long-Term฀Liabilities฀(in฀$฀million) The Group 31 March 2012 2011 2012 The Company 31 March 2011 Notes payable Current Non-current Loans Current Non-current Finance lease commitments Current Non-current Maintenance...

  • Page 149
    ... costs and provisions for return costs for leased aircraft. It is expected that the return costs will be incurred by the end of the lease terms. An analysis of the provisions is as follows: The Group 31 March 2012 2011 The Company 31 March 2012 2011 Balance at 1 April Provision during the year...

  • Page 150
    148 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 21 Property, Plant and Equipment (in $ million) The Group Aircraft spares Aircraft spare engines Aircraft Cost At 1 April 2010 Additions Transfers Transfer to intangible assets Disposals Exchange differences At 31 March 2011...

  • Page 151
    ANNUAL REPORT 2011/2012 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 15.7 150.7 (2.1) 148.6 148.6 573.8 0.4 45.4 (0.5) (1.7) 617.4 0.5 (0.2) (0.1) 617.6 748.9 48.8 52.5 (...

  • Page 152
    150 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 21 Property, Plant and Equipment (in $ million) (continued) The Company Aircraft spares Aircraft spare engines Aircraft Cost At 1 April 2010 Additions Transfers Transfers to intangible assets Disposals At 31 March 2011 ...

  • Page 153
    ANNUAL REPORT 2011/2012 151 Freehold land Freehold buildings Leasehold land and buildings Plant and equipment Office and computer equipment Advance and progress payments Total 15.7 15.7 15.7 150.7 (2.0) 148.7 148.7 341.7 341.7 341.7 427.5 38.0 31.8 (146.9) 350.4 1.2 59.0 (18.4) 392.2 ...

  • Page 154
    152 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 21 Property, Plant and Equipment (in $ million) (continued) The Group 31 March 2012 2011 Net book value of property, plant and equipment acquired under finance leases: - aircraft - plant and equipment 617.0 0.1 617.1 676.5...

  • Page 155
    ANNUAL REPORT 2011/2012 153 Notes to the Financial Statements 31 March 2012 22 Intangible Assets (in $ million) (continued) The Company Advance and Computer software progress payments Total Cost At 1 April 2010 Additions Disposals Transfer from property, plant and equipment At 31 March 2011 ...

  • Page 156
    154 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 23 Subsidiary Companies (in $ million) The Company 31 March 2012 2011 Investment in subsidiary companies (at cost) Quoted equity investments Unquoted equity investments Accumulated impairment loss # # 2,055.4 2,055.4 (16...

  • Page 157
    ... Group 2012 2011 Principal activities SIA Engineering Company Limited Aircraft Maintenance Services Australia Pty Ltd* NexGen Network (1) Holding Pte Ltd NexGen Network (2) Holding Pte Ltd SIA Engineering (USA), Inc.@ SIAEC Global Pte Ltd SIA Engineering (Philippines) Corporation* Singapore Jamco...

  • Page 158
    156 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 24 Associated Companies (in $ million) The Group 31 March 2012 2011 Share of net assets of associated companies at acquisition date Goodwill on acquisition of associated companies Accumulated impairment loss Goodwill written-...

  • Page 159
    ... REPORT 2011/2012 157 Notes to the Financial Statements 31 March 2012 24 Associated Companies (in $ million) (continued) 4. Great Wall Airlines Company Limited ("GWA") entered into a sale and purchase agreement with China Cargo Airlines Limited ("CK") in relation to the cargo aviation business...

  • Page 160
    ...of business equity held by the Group 2012 2011 Virgin Atlantic Limited*+ Tiger Airways Holdings Limited @ Air transportation Investment holding Hotel ownership and management Provide aircraft maintenance services, including technical and non-technical handling at the airport Repair and overhaul of...

  • Page 161
    ... business equity held by the Group 2012 2011 International Aerospace Tubes-Asia Pte Ltd^++ Turbine Coating Services Pte Ltd^+++ Asian Compressor Technology Services Co Ltd^^++ PT Purosani Sri Persada Great Wall Airlines Company Limited #++ Repair of tubes, ducts and manifolds for aircraft engines...

  • Page 162
    ...SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 25 Joint Venture Companies (in $ million) (continued) The Group's share of the consolidated assets and liabilities, and results of joint venture companies are as follows: The Group 31 March 2012 2011 Assets and liabilities Current...

  • Page 163
    ANNUAL REPORT 2011/2012 161 Notes to the Financial Statements 31 March 2012 26฀ Long-Term฀Investments฀(in฀$฀million)฀ The Group 31 March 2012 2011 2012 The Company 31 March 2011 Available-for-sale investments Unquoted Non-equity investments Equity investments, at cost Accumulated ...

  • Page 164
    162 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 29฀ Trade฀Debtors฀(in฀$฀million)฀ The table below is an analysis of trade debtors as at 31 March: The Group 31 March 2012 2011 2012 The Company 31 March 2011 Not past due and not impaired Past due but not impaired...

  • Page 165
    ...REPORT 2011/2012 163 Notes to the Financial Statements 31 March 2012 29฀ Trade฀Debtors฀(in฀$฀million)฀(continued) Trade debtors are stated after accumulated impairment losses. An analysis of the accumulated impairment losses is as follows: The Group 31 March 2012 2011 2012 The Company...

  • Page 166
    164 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 31 Investments (in $ million) The Group 31 March 2012 2011 2012 The Company 31 March 2011 Available-for-sale investments Quoted Government securities Equity investments Non-equity investments 4.1 32.8 232.0 268.9 8.9 34.3 ...

  • Page 167
    ... related equipment. In addition, the Group's share of joint venture companies' commitments for capital expenditure totalled $0.6 million (2011: $1.0 million). (b) Operating lease commitments As lessee Aircraft The Company has 3 B777-200, 3 B777-200ER, 3 B777-300, 19 A330-300 and 7 A380-800 aircraft...

  • Page 168
    ... rates. The basic lease term for each engine is 6 years and 10 months with an option to extend the lease for a further maximum period of 6 years. Future minimum lease payments under non-cancellable operating leases are as follows: The Group 31 March 2012 2011 The Company 31 March 2012 2011 Not...

  • Page 169
    ...Zealand, South Africa, South Korea and Switzerland as to whether surcharges, rates or other competitive aspects of air cargo service were lawfully determined (the "air cargo issues"). On 8 February 2011, SIA Cargo confirmed its acceptance of a plea bargain offered by the United States Department of...

  • Page 170
    168 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 36 Contingent Liabilities (in $ million) (continued) (b) Cargo: Investigations by Competition Authorities and Civil Class Actions (continued) On 30 November 2010, the Korea Fair Trade Commission ("KFTC") released its adverse ...

  • Page 171
    ... plc, Air New Zealand Limited, Malaysian Airline System Berhad, Cathay Pacific Airways Limited ("CX") and Singapore Airlines Limited, in a claim on behalf of Australian travel agents for alleged nonpayment of commissions on fuel surcharges applied to passenger tickets issued in Australia from May...

  • Page 172
    ... basis: 2012 The Group Available-for-฀ Loans and sale financial receivables assets Derivatives Held-to-฀ ฀ Financial฀ at฀fair฀value maturity฀฀ Derivatives฀ liabilities฀at฀ through financial used for amortised profit and assets hedging cost loss Total Assets Long-term...

  • Page 173
    ... (continued) 2012 The Company Available-for-฀ Loans and sale financial receivables assets Held-to-฀ ฀ Financial฀ maturity฀฀ Derivatives฀ liabilities฀at฀ financial used for amortised assets hedging cost ฀ ฀ Total Assets Long-term investments Other receivables Trade debtors...

  • Page 174
    ...) Derivatives Financial at fair value ฀ Available-for-฀ ฀Derivatives฀ liabilities฀at฀ through฀ Loans and sale financial used for amortised profit and receivables assets hedging cost loss ฀ ฀ 2011 The Group ฀ Total Assets Long-term investments Other receivables Trade debtors...

  • Page 175
    ... Loans and sale financial used for amortised receivables assets hedging cost Total Assets Long-term investments Other receivables Trade debtors Deposits and other debtors Amounts owing by subsidiary companies Investments Derivative assets Cash and bank balances Total financial assets Total non...

  • Page 176
    ... fair value hierarchy: The Group 31 March 2012 Quoted prices in active markets for identical instruments (Level 1) Significant other observable inputs (Level 2) Quoted prices in active markets for identical instruments (Level 1) Significant other observable inputs (Level 2) 2011 Financial assets...

  • Page 177
    ... MOPS price. The continuously compounded risk-free rate estimated as average of the past 12 months Singapore Government Securities benchmark issues' one-year yield (2011-12: 0.33%, 2010-11: 0.38%) was also applied to each individual jet fuel option contract to derive their estimated fair values as...

  • Page 178
    ... market bid price at the end of the reporting period. The Group and the Company have no intention to dispose of their interests in the above investments in the foreseeable future. The fair values of long-term liabilities are disclosed in Note 19. 38 Financial Risk Management Objectives and Policies...

  • Page 179
    ANNUAL REPORT 2011/2012 177 Notes to the Financial Statements 31 March 2012 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (a) Jet fuel price risk (continued) Jet fuel price sensitivity analysis The jet fuel price risk sensitivity analysis is based on the ...

  • Page 180
    178 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (b) Foreign currency risk (continued) Fair value through profit and loss In addition, the Group has cross currency swap contracts in place with ...

  • Page 181
    ANNUAL REPORT 2011/2012 179 Notes to the Financial Statements 31 March 2012 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (c) Interest rate risk The Group's earnings are also affected by changes in interest rates due to the impact such changes have on interest ...

  • Page 182
    180 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (c) Interest rate risk (continued) Interest rate sensitivity analysis The interest rate sensitivity analysis is based on the following assumptions...

  • Page 183
    ANNUAL REPORT 2011/2012 181 Notes to the Financial Statements 31 March 2012 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (d) Market rate risk At 31 March 2012, the Group and the Company own investments of $900.0 million (2011: $397.8 million) and $840.1 million ...

  • Page 184
    182 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (e) Liquidity risk (continued) ฀ ฀ 2012 ฀ Within฀1฀ year 1฀-฀2฀ years 2฀-฀3฀ years 3฀-฀4฀ years 4฀-฀5฀ years ...

  • Page 185
    ANNUAL REPORT 2011/2012 183 Notes to the Financial Statements 31 March 2012 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (f) Credit risk The Group has an independent Group Debts Review Committee to review the follow up actions on outstanding receivables monthly....

  • Page 186
    184 SINGAPORE AIRLINES Notes to the Financial Statements 31 March 2012 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 its ...

  • Page 187
    ...ficant changes were made in the objectives, policies or processes relating to the management of the Company's capital structure. The Group 31 March 2012 2011 The Company 31 March 2012 2011 Notes payable Finance lease commitments Loans Total debt Share capital Reserves Total capital Gearing ratio...

  • Page 188
    ... statements, these were the following significant related party transactions which were carried out in the normal course of business on terms that prevail in arm's length transactions during the financial year: The Group 2011-12฀ 2010-11 Purchases of services from associated companies Services...

  • Page 189
    ANNUAL REPORT 2011/2012 187 Notes to the Financial Statements 31 March 2012 40 Related Party Transactions (in $ million) (continued) Conditional awards granted to director and key executives of the Company pursuant to the Restricted Share Plan and the Performance Share Plan are as follows: RSP ...

  • Page 190
    ...special dividend of $0.80 on 29 July 2011, the Board Compensation and Industrial Relations Committee approved an increase in all restricted and performance shares outstanding on 18 August 2011. R2 # ^ * During the financial year, 41,130 and 66,530 treasury shares were issued to director and key...

  • Page 191
    ... Temasek Holdings (Private) Limited and Associates Great Wall Airlines Company Limited MediaCorp Pte Ltd Tiger Airways Holdings Limited Group Tiger Airways Holdings Limited ** Total Interested Person Transactions * Subscription of 10-year fixed rate notes which are issued by Neptune Orient Lines...

  • Page 192
    190 SINGAPORE AIRLINES Quarterly Results Of The Group 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total TOTAL REVENUE 2011-12 2010-11 ($ million) ($ million) 3,577.6 3,465.8 3,699.5 3,631.2 3,875.4 3,841.0 3,705.3 3,586.8 14,857.8 14,524.8 TOTAL EXPENDITURE 2011-12 2010-11 ($ million) ...

  • Page 193
    ANNUAL REPORT 2011/2012 191 Five-Year Financial Summary Of The Group ฀ ฀ ฀ 2011-12฀ 2010-11฀ 2009-10฀ 2008-09฀ 2007-08 PROFIT AND LOSS ACCOUNT ($ million) Total revenue Total expenditure Operating profit Finance charges Interest income (Loss)/Surplus on disposal of aircraft, ...

  • Page 194
    ...basic (cents) Earnings - diluted (cents) 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 R5 Return on turnover R6 2,099...

  • Page 195
    ANNUAL REPORT 2011/2012 193 Ten-Year Statistical Record ฀ ฀ ฀ ฀ ฀ 2011-12฀ 2010-11฀ 2009-10฀ 2008-09฀ 2007-08฀ 2006-07฀ 2005-06฀ 2004-05฀ 2003-04฀ 2002-03 SINGAPORE AIRLINES FINANCIAL Total revenue Total expenditure Operating profit /(loss) Profit ...

  • Page 196
    ... and SilkAir respectively. Average age in Seats in Finance Aircraft฀type฀ Owned฀ Lease฀ Operating Lease฀ Total฀ standard years (y) and Expiry of operating lease 2012-13฀ 2013-14฀ On firm order฀ On option configuration฀ months฀(m)฀ Singapore Airlines: B747-400 B777-200 B777...

  • Page 197
    ...Cargo Community Network Pte Ltd 25% Great Wall Airlines Company Limited 100% Cargo Community (Shanghai) Co Ltd 49% 49% 49% 49% 49% 49% SIA Engineering (Philippines) Corporation Singapore Jamco Pte Ltd Aerospace Component Engineering Services Pte Limited Aviation Partnership (Philippines) Corporation...

  • Page 198
    196 SINGAPORE AIRLINES Information On Shareholdings as at 29 May 2012 No. of Issued Shares: No. of Issued Shares (excluding Treasury Shares): No./Percentage of Treasury Shares: Class of Shares: Voting Rights (excluding Treasury shares): Range of shareholdings ฀ 1,199,851,019 1,173,313,672 26,...

  • Page 199
    ANNUAL REPORT 2011/2012 197 Information On Shareholdings as at 29 May 2012 Twenty largest shareholders ฀ Name฀ Number฀of฀shares฀ %*฀ 1 2 3 4 5 6 7 8 9 Temasek Holdings (Private) Limited DBS Nominees Pte Ltd Citibank Nominees Singapore Pte Ltd HSBC (Singapore) Nominees Pte Ltd DBSN ...

  • Page 200
    ... Closing Price ST Index Share฀Price฀($)฀ 2011-12฀ 2010-11 High Low Closing Market Value Ratios R1 14.77 10.05 10.77 16.50 13.00 13.68 Price/Earnings Price/Book value Price/Cash earnings R1 R2 R2 38.06 0.98 6.53 14.97 1.15 5.82 Based on closing price on 31 March and Group numbers...

  • Page 201
    ... up to $1,650,000 for the financial year ending 31 March 2013 (FY 2011/2012: up to $1,650,000). To re-appoint Messrs Ernst & Young LLP as Auditors of the Company and to authorise the Directors to fix their remuneration. 5. 6. Special Business 7. To consider and if thought fit, approve, with...

  • Page 202
    ... SIA Performance Share Plan and the SIA Restricted Share Plan) shall not exceed 8,832,924 ordinary shares, which represents 0.75 per cent of the total number of issued ordinary shares (excluding treasury shares) in the capital of the Company as at 31 March 2012. 8. To transact any other business as...

  • Page 203
    ... The Central Depository (Pte) Limited are credited with ordinary shares in the capital of the Company as at 5.00 p.m. on 1 August 2012 will be entitled to the final dividend. The final dividend, if so approved by shareholders, will be paid on 15 August 2012. By Order of the Board Ethel Tan (Mrs...

  • Page 204
    ... on Board of Directors and Corporate Governance in the Annual Report for further details on Mr Tai. Ordinary Resolution No. 5, if passed, will facilitate the payment of Directors' fees during the financial year in which the fees are incurred, that is, during Financial Year 2012-13. Directors' fees...

  • Page 205
    ...in outstanding awards granted under the SIA Performance Share Plan and the SIA Restricted Share Plan. The maximum number of new Shares which may be issued under the SIA Employee Share Option Plan, the SIA Performance Share Plan and the SIA Restricted Share Plan is limited to 13 per cent of the total...

  • Page 206
    [email protected] Investor Relations Tel: 6541 4885 Fax: 6542 9605 Email: [email protected] Public Affairs Tel: 6541 5880 Fax: 6545 6083 Email: [email protected] MICA (P) 186/05/2012 Singapore Company Registration Number 197200078R www.singaporeair.com