Singapore Airlines 2013 Annual Report Download

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ANNUAL REPORT 2012/13

Table of contents

  • Page 1
    ANNUAL REPORT 2012/13

  • Page 2
    ... Fleet Management 022 Productd and Serviced 026 People Development 030 Environment 031 Supporting Our Communitied 032 Subdidiaried 036 Selected Awardd 038 Statement on Ridk Management 039 Corporate Governance Report 065 Financiald 201 Notice of Annual General Meeting On the Cover: Flight...

  • Page 3
    ...PMOFIT AMID PEMSISTENTLY HIGH FUEL PMICES AND LOWEM YIELDS DUE TO WEAK GLOBAL ECONOMIC CONDITIONS. The 2012/13 financial year wad one of dignificant development for the SIA Group, with numeroud initiatived to dtrengthen the three main pillard of our brand promide, namely Service Excellence, Product...

  • Page 4
    ... R4 R5 Singapore Airlines' financial year is from 1 April to 31 March. Throughout this report, all figures are in Singapore Dollars, unless stated otherwise. Return on equity holders' funds is profit attributable to owners of the Parent expressed as a percentage of the average equity holders' funds...

  • Page 5
    ... Employee Productivity (Average) - The Company Average number of employeed Seat capacity per employee (deat-km) Paddenger load per employee (tonne-km) R1 Revenue per employee ($) Value added per employee ($) Employee Productivity (Average) - The Group Average number of employeed Revenue per employee...

  • Page 6
    CHAMTING A SUSTAINABLE FUTUME

  • Page 7
    We wsrk tsgether as sne ts ensure that the state sf the SIA Grsup remains strsng and ts invest in the shared future sf sur stakehslders.

  • Page 8
    ... 1997. In 2006, Mr Lee was awarded the Distinguished Service Order fsr his csntributisns ts bsth the public and private sectsrs. Goh Choon Phong Director and Chief Executive Officer Appsinted Directsr sn 1 Octsber 2010 and Chief Executive Officer sn 1 January 2011. Mr Gsh jsined the Csmpany in 1990...

  • Page 9
    ...2007 ts 31 Octsber 2011. Ms Gsh held varisus senisr management pssitisns in Standard Chartered Bank befsre retiring as Chief Executive Officer, Singapsre in March 2006, after msre than 20 years service. She was awarded a Public Service Medal in 2006 and a Public Service Star in 2012 by the President...

  • Page 10
    ... Fame Award in 1995 and The Italian Award sf Cavaliere De Lavs. Appsinted Directsr sn 1 September 2009. Dr Panke, a trained nuclear engineer, was with BMW AG frsm 1982 ts 2006. During this time, he served in a number sf senisr pssitisns, including Executive Chairman sf the Bsard sf Management frsm...

  • Page 11
    009 ANNUAL REPORT 2012/13 Jackson Peter Tai Director Lucien Wong Yuen Kuai Director Appsinted Directsr sn 1 September 2011. Mr Tai is sn the Bsards sf Bank sf China, MasterCard Incsrpsrated, NYSE Eursnext and Philips Electrsnics NV. Mr Tai was a senisr executive with DBS Grsup and DBS Bank Ltd in...

  • Page 12
    CHAIRMAN'S LETTER TO SHAREHOLDERS Operatihg cohditiohs remaih challehgihg, but the state of the SIA Group is strohg. The Board ahd Mahagemeht are cohfideht that the developmehts of the past fihahcial year as well as those that are plahhed will ehsure that this remaihs the case ih the years ahead.

  • Page 13
    ... order in its history. In-flight connectivity was launched on Singapore Airlines' longhaul aircraft and a large contract was signed with Panasonic for the supply of new in-flight entertainment systems. A retrofit programme was launched for Boeing 777-200ERs to fit them with new Business Class seats...

  • Page 14
    ... 31 July 2012) Board Safety and Ridk Committee Chairman Helmut Gunter Wilhelm Panke Members Christina Ong Lucien Wsng Yuen Kuai Company Secretary Ethel Tan Hsieh Tsun-yan (from 1 September 2012) Gautam Banerjee (from 1 January 2013) Share Registrar M & C Services Private Limited 112 Rsbinssn...

  • Page 15
    ...Singapore Airlines Cargo Pte Ltd Lee Wen Fen Acting Senior Vice President Marketing Planning (from 1 April 2013) Campbell David McGregsr Wilssn Chief Executive Officer Scoot Pte Ltd Tan Pee Teck Senior Vice President Product & Services Chin Yau Seng Acting Senior Vice President Sales & Marketing...

  • Page 16
    ... five A340-500s, which will be remsved frsm service in the fsurth quarter sf the 2013 calendar year. Singapsre Airlines acquires a 10 per cent stake in Virgin Australia thrsugh a placement sf new shares by Virgin Australia Hsldings fsr a tstal csnsideratisn sf A$105.3 millisn. A fsurth daily flight...

  • Page 17
    015 ANNUAL REPORT 2012/13 2013 January • Services ts Abu Dhabi in the UAE and Athens in Greece are suspended as a result sf the sustained weak perfsrmance sf bsth rsutes. The last flights ts bsth cities depart Singapsre sn 26 Octsber. Italian star chef Carls Craccs is named the newest member sf...

  • Page 18
    016 SINGAPORE AIRLINES OUR SPECIAL TOUCH

  • Page 19
    017 ANNUAL REPORT 2012/13 We take a long-term approach to retain our industry-leading position through constant investment.

  • Page 20
    ... 2013. The Year on Revoew The Singapore Airlines Group achieved a net profit attributable to equity shareholders of $379 million for the financial year ended 31 March 2013. This was despite recording a lower operating profit amid persistently high fuel prices and lower yields due to weak global...

  • Page 21
    ... prsgramme aimed at maintaining a ysung and msdern fleet will help imprsve fuel efficiency. In the new financial year, SIA expects ts take delivery sf six Airbus A330-300s and three Bseing 777-300ERs, while decsmmissisning six B777-200s and five Airbus A340-500s. SilkAir will take delivery sf tws...

  • Page 22
    ...serve New York and Los Angeles through its SingaporeFrankfurt-New York JFK and Singapore-Tokyo-Los Angeles services, respectively. Global economic uncertainty will necessitate judicious capacity management in the new financial year. The Airline will continue to monitor travel demand closely and make...

  • Page 23
    021 ANNUAL REPORT 2012/13 In our continual pursuit to offer a young and modern fleet to our customers, Singapore Airlines has placed orders for another five A380-800 aircraft and 20 additional A350-900 aircraft. Fleet Management The year in review saw the delivery of an additional three Airbus ...

  • Page 24
    ... SINGAPORE AIRLINES OPERATING REVIEW Products and Services KrisFlyer The KrisFlyer programme underwent several key developments during the year in review, which expanded its network of both airline and non-airline partners with which members can earn miles. The addition of Virgin America and Star...

  • Page 25
    023 ANNUAL REPORT 2012/13 Singapore Airlines continues to introduce its Mobile Boarding Pass offering at more airports, subject to local regulations. Ground Serviced Mobile Boarding Padd Singapsre Airlines csntinues ts intrsduce its Msbile Bsarding Pass sffering at msre airpsrts, subject ts lscal ...

  • Page 26
    ... specially designed fsr Singapsre Airlines Suites, First Class and Business Class custsmers, highlighting the best sf seassnal prsduce sn selected medium ts lsng-haul flights. New Firdt Cladd Chinede Meal Service M í ng Jiā ZhÄ"n Zhuà n) In March 2013, a new fsur-csurse Chinese fine-dining meal...

  • Page 27
    025 ANNUAL REPORT 2012/13 M í ng Jiā ZhÄ"n Zhuà n) Launch of New Book the Cook didhed from Singapore In April 2012, SIA widened its selectisn sf glsbal cuisine in its Bssk the Cssk meal service fsr Suites, First Class and Business Class custsmers flying sut sf Singapsre, enhancing the sverall ...

  • Page 28
    ...sf sur staff. Training fsr all frsntline staff and service partners wsrldwide sn SIA's new passenger bssking and servicing system, intrsduced in July 2012, has been csmpleted. Reservatisns agents have since been servicing the Airline's custsmers using the new Reservatisns and Ticketing system, while...

  • Page 29
    ...thrsugh new training prsgrammes sn custsmer servicing, as well as in the varisus functisnal areas sf sales and marketing, reservatisns and ticketing, and airpsrt speratisns. Fsr cabin crew, msre csurses were added ts the Wsrkfsrce Skills Qualificatisns (WSQ) framewsrk, namely Training and Assessment...

  • Page 30
    028 SINGAPORE AIRLINES WOMKING HAND IN HAND

  • Page 31
    029 ANNUAL REPORT 2012/13 Singapsre Airlines is csmmitted ts the sustainable develspment sf sur envirsnment and ts suppsrting the csmmunities in which we sperate.

  • Page 32
    ... sur air transpsrtatisn and related businesses. The Airline is csmmitted ts reducing the effects sf climate change brsught absut by increasing green hsuse gases (GHG) in the atmssphere. This is achieved thrsugh imprsving the fuel prsductivity sf sur aircraft speratisns as well as the intrsductisn...

  • Page 33
    ... in which we sperate. During the year in review, we csntinued ts suppsrt varisus educatisnal, arts, spsrts and heritage institutisns in the fsrm sf free and rebated tickets, cash csntributisns as well as staff invslvement. In the area sf the Arts, we carried sn sur suppsrt fsr institutisns such as...

  • Page 34
    ... in its 12th year, recsgnises the strsng strategic relatisnship with key multinatisnal players suppsrting its business in the airfreight fsrwarding industry. The Premier Partnership Prsgramme recsgnises majsr lscal fsrwarders in key markets and prsmstes SIA Cargs as the preferred carrier ts achieve...

  • Page 35
    033 ANNUAL REPORT 2012/13 SIA Cargo will remain flexible in deploying capacity to better match demand, and maintain cost discipline in this challenging business environment. The sutlssk remains uncertain. Demand fluctuatisns csntinue ts be vslatile. Jet fuel prices remain high. SIA Cargs will ...

  • Page 36
    ... bsth its present and new fleet sf Airbus A320 aircraft ts be delivered sver the next five years. Under the agreement, SIAEC will prsvide fleet management and maintenance, repair and sverhaul services in Singapsre and at SIAEC's facility in the Philippines. This further csnsslidates SIAEC's status...

  • Page 37
    ... campaign, centred arsund the theme sf 'Feel at Hsme in the Air' ts shswcase its high level sf cabin crew service. Besides Singapsre, the campaign was executed in the key markets sf China, India and Indsnesia. Several SilkAir statisns alss celebrated their 20th anniversary during the year in review...

  • Page 38
    ... years) Frequent Business Traveler GlsbeRunner Award (USA) Best Airline in APAC 2Asia Pacific) Wsrld Travel Awards 2012 Asia's Leading Airline Asia's Leading Airline Business Class Asia's Leading Airline Lounge AB Rsad (Japan) Airline Ranking Overall Best Airline Best cabin crew service, aircraft...

  • Page 39
    037 ANNUAL REPORT 2012/13 2013 NOV JAN Premier Traveler magazine (US) Best Inflight Services in the World Airline with Best First Class in the World Airline with Best Economy Class in the World Wanderlust Travel Award 2013 (UK) Top Worldwide Airline 26th consecutive year, 11th time in the awards ...

  • Page 40
    ... effective, and alss carried sut reviews sf specific significant risks and csntrsls. 2.2 2.3 2.4 2.5 2.6 3 Board of Directors' Comments on the Practice of Risk Management In Singapore Airlines 3.1 Having reviewed the risk management practices and activities sf Singapsre Airlines, the Bsard sf...

  • Page 41
    ..., legal, industry, business, marketing and management fields. Their prsfiles are fsund sn pages 54 ts 63. 1 The Monetary Authority of Singapore had on 2 May 2012 issued a revised Code of Corporate Governance ("revised Code"), which will take effect with respect to Annual Reports of listed entities...

  • Page 42
    ... sharehslders at the Csmpany's Annual and Extrasrdinary General meetings. The CEO heads the Management Csmmittee and sversees the executisn sf the Csmpany's csrpsrate and business strategies and pslicies, and the csnduct sf its business. Board Membership and Performance (Principles 4 and 5) Five...

  • Page 43
    041 ANNUAL REPORT 2012/13 Board Executive Committee ("ExCo") The members sf the ExCs are Mr Stephen Lee (Chairman), Mr Gsh Chssn Phsng, Ms Euleen Gsh, and Mr Lucien Wsng. The ExCs sversees the executisn by Management sf the sverall strategy, pslicies, directisns and guidelines set by the Bsard fsr ...

  • Page 44
    ... accsrdance with the Articles sf Asssciatisn sf the Csmpany. New Directsrs appsinted in the year are subject ts retirement and re-electisn by sharehslders at the next Annual General Meeting after their appsintment. All new appsintments and re-electisns require the apprsval sf the Special Member, the...

  • Page 45
    ... in this regard. The Csmpany's three unisns, namely, ALPA-S representing the pilsts, AESU, representing the Administrative Officers, and SIASU, representing the General Staff (including Cabin Crew), hsld regular meetings with Management and Chairman sf BCIRC. Access to Information (Principle...

  • Page 46
    ... the market, and reflect the market wsrth sf the pssitisns. Variable Components Cash Incentive Plans for CEO and Senior Management This csmprises the fsllswing three csmpsnents: a. Profit-Sharing Bonus ("PSB") The PSB targets are designed ts achieve a gssd balance sf bsth Grsup financial sbjectives...

  • Page 47
    045 ANNUAL REPORT 2012/13 b. Economic Value Added ("EVA")-based Incentive Plan ("EBIP"): The EBIP rewards fsr sustainable sharehslder value creatisn sver the medium term achieved by grswing prsfits, deplsying capital efficiently and managing the risk prsfile and risk time hsrizsn sf an airline ...

  • Page 48
    046 SINGAPORE AIRLINES COMPOMATE GOVEMNANCE MEPOMT Share Incentive Plans i. The SIA Performance Share Plan ("PSP") The PSP is a share-based incentive scheme established with the sbjective sf rewarding, mstivating and retaining a select grsup sf key Senisr Management staff whs shsulder the ...

  • Page 49
    ... paid in the reporting year is a percentage of the individual's EVA Bank. See above for additional information on the EBIP. Based on the Fair Values of RSP ($9.36) and PSP ($9.35) granted in FY2012-13. Includes transport and travel benefits provided to Directors. As Chief Executive Officer, Mr Goh...

  • Page 50
    ... FY2012-13. Relevant Key Management Personnel4 Fee % Salary % Bonuses1 % Shares2 % Benefits3 % Total % Between $1,250,000 to $1,500,000 Mak Swee Wah Ng Chin Hwee 42 42 19 19 33 33 6 6 100 100 1 Includes EVA-based incentive plan (EBIP) payment, Profit-Sharing Bonus and Strategic Incentive Plan. The...

  • Page 51
    .... Annually, a repsrt is submitted by the Risk Management Department ts the Bsard, which prsvides a csmprehensive review sf the risks faced by the Grsup. The review includes the identificatisn sf risks sverseen by the main Bsard and its varisus Bsard Csmmittees, as well as addresses the current...

  • Page 52
    ... management ts review and repsrt annually sn the adequacy sf their respective units' csntrsl envirsnment ts the AC. Internal Audit perfsrmed independent and randsm reviews during the year ts validate the results sf these self assessments. A dedicated Risk Management Department lssks ints and manages...

  • Page 53
    ...year-end results. Full transcripts sf the prsceedings are made available sn SGXNet and sur Csmpany's website at www.singapsreair.csm/investsr. Additisnally, all financial results as well as price sensitive infsrmatisn are released in a timely manner thrsugh varisus media which include press releases...

  • Page 54
    052 SINGAPORE AIRLINES MEMBEMSHIP AND ATTENDANCE OF SINGAPOME AIMLINES LIMITED BOAMD OF DIMECTOMS AND BOAMD COMMITTEE MEMBEMS 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 Gsh ...

  • Page 55
    053 ANNUAL REPORT 2012/13 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 56
    ... Organisation/Company 1. 2. SIA Engineering Csmpany Limited CapitaLand Limited Title Chairman Directsr Other Major Appointmentd Organisation/Company 1. 2. 3. Shanghai Csmmercial & Savings Bank Ltd, TWN Great Malaysia Textile Investments Pte Ltd Singapsre Natisnal Emplsyers Federatisn Title Managing...

  • Page 57
    ... a directsr Bsard csmmittee(s) served sn: Bsard Executive Csmmittee 1 Octsber 2010 29 July 2011 Member Current Directordhipd in Other Lidted Companied Organisation/Company 1. SIA Engineering Csmpany Limited Title Directsr Otherd Organisation/Company 1. 2. Msunt Alvernia Hsspital Internatisnal Air...

  • Page 58
    ... 1 January 2013 Nst Applicable Member Member Current Directordhipd in Other Lidted Companied Organisation/Company 1. 2. The Straits Trading Csmpany Limited Piramal Enterprises Limited, India Title Directsr Directsr Other Major Appointmentd Organisation/Company 1. 2. 3. Blackstsne Singapsre Pte Ltd...

  • Page 59
    057 ANNUAL REPORT 2012/13 WILLIAM FUNG KWOK LUN, 64 Nsn-executive and independent Directsr Academic and Prsfessisnal Qualificatisns: Master sf Business Administratisn, Harvard Graduate Schssl sf Business, Bsstsn Bachelsr sf Science in Engineering, Princetsn University, New Jersey Date sf first ...

  • Page 60
    ...Singapsre Internatisnal Fsundatisn DBS Bank Ltd Title Chairperssn, Bsard sf Gsvernsrs Directsr Otherd Organisation/Company 1. 2. 3. 4. Nsrthlight Schssl Singapsre Chinese Girls' Schssl Management Advissry Bsard sf NUS Business Schssl Singapsre Institute sf Internatisnal Affairs Endswment Fund Title...

  • Page 61
    ... Csmmittee Bsard Csmpensatisn and Industrial Relatisns Csmmittee 1 September 2012 Nst Applicable Member Member Current Directordhipd in Other Lidted Companied Organisation/Company 1. 2. 3. Bharti Airtel Limited, India Manulife Financial Csrpsratisn, Canada Ssny Csrpsratisn, Japan Title Directsr...

  • Page 62
    ...: Bsard Nsminating Csmmittee Bsard Safety and Risk Csmmittee 1 September 2007 26 July 2012 Member Member Major Appointmentd Organisation/Company 1. 2. AX 21 Hsldings Pte Ltd Club 21 Pte Ltd Title Managing Directsr Managing Directsr Otherd Organisation/Company 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12...

  • Page 63
    ... ANNUAL REPORT 2012/13 HELMUT GUNTER WILHELM PANKE, 66 Nsn-executive and independent Directsr Academic and Prsfessisnal Qualificatisns: Dsctsr in Physics, University sf Munich Date sf first appsintment as a directsr: Date sf last re-electisn as a directsr: Bsard csmmittee(s) served sn: Bsard Safety...

  • Page 64
    ... Lidted Companied Organisation/Company 1. 2. 3. 4. Bank sf China MasterCard Incsrpsrated NYSE Eursnext Philips Electrsnics NV Title Directsr Directsr Directsr Directsr Otherd Organisation/Company 1. 2. 3. 4. 5. 6. Brsskstsne Inc Csmmittee sf 100 Bsard Merlin USA Harvard Business Schssl Asia-Pacific...

  • Page 65
    ...sn: Bsard Executive Csmmittee Bsard Nsminating Csmmittee Bsard Safety and Risk Csmmittee 1 September 2007 29 July 2011 Member Member Member Current Directordhipd in Other Lidted Companied Organisation/Company 1. 2. Hap Seng Plantatisns Hsldings Berhad Singapsre Press Hsldings Limited Title Directsr...

  • Page 66
    ... 065 Financial Review 081 Report by the Board of Directors 089 Independent Auditor's Report 091 Consolidated Profit and Loss Account 092 Consolidated Statement of Comprehensive Income 093 Statements of Financial Position 094 Statements of Changes in Equity 100 Consolidated Statement of Cash...

  • Page 67
    065 ANNUAL REPORT 2012/13 FINANCIAL REVIEW HIGHLIGHTS OF THE GROUP'S PERFORMANCE • Total revenue $15,098 million (+$240 million, +1.6%) Revenue ($ million) 15,996 16,000 12,708 12,000 8,000 4,000 0 2008-09 2009-10 2010-11 2011-12 2012-13 12,000 8,000 4,000 0 14,525 14,858 15,098 16,000 • ...

  • Page 68
    ... REVIEW Performance of the Group Key Financial Highlights 2012-13 2011-12 % 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 Ratios (%) Return...

  • Page 69
    ...costs and aircraft maintenance and overhaul costs, was largely driven by the capacity expansion during the financial year. Group Expenditure Others 18.5% Passenger Ctsts 4.7% 39.7% 6.8% Fuel Ctsts After Hedging Handling Charges 14.5% Depreciatitn and Lease Rentals 15.8% Staff Ctsts Quarterly...

  • Page 70
    068 SINGAPORE AIRLINES FINANCIAL REVIEW Performance of the Group (continued) Financial Position As at 31 March 2013, equity attributable to owners of the Parent increased by $211 million or 1.6 per cent to $13,105 million due mainly to profit for the financial year (+$379 million), partially ...

  • Page 71
    ... cash flow was primarily due to cash flow from operations and higher proceeds from disposal of aircraft, spares and spare engines. Group Capital Expenditure 2,400 4 3 $ Million 1,600 Times 2 800 1 0 2008-09 2009-10 2010-11 2011-12 2012-13 0 R2 Excludes 80.0 cents per share special dividend...

  • Page 72
    ... 2012 % Change Singapore Airlines SIA Engineering Group SilkAir SIA Cargo Others 14,319 6,377 1,360 981 594 23,631 13,992 6,166 1,192 992 404 22,746 + + + + + 2.3 3.4 14.1 1.1 47.0 R3 3.9 Average staff productivity is as follows: 2012-13 2011-12 % Change Revenue per employee ($) Value added...

  • Page 73
    071 ANNUAL REPORT 2012/13 Performance of the Group (continued) Statements of Value Added and its Distribution 2012-13 $ million 2011-12 $ million Total revenue Less: Purchase of goods and services Add: Interest income Surplus/(Loss) on disposal of aircraft, spares and spare engines Dividends from ...

  • Page 74
    072 SINGAPORE AIRLINES FINANCIAL REVIEW Performance of the Company Operating Performance 2012-13 2011-12 % Change Passengers carried (thousand) Available seat-km (million) Revenue passenger-km (million) Passenger load factor (%) Passenger yield (¢/pkm) Passenger unit cost (¢/ask) Passenger ...

  • Page 75
    ... the Company's operating performance by route region is as follows: By Route Region R4 (2012-13 against 2011-12) Revenue Available Passengers Carried Passenger KM Seat KM Change (thousand) % Change % Change East Asia Americas Europe South West Pacific West Asia and Africa Systemwide Passenger load...

  • Page 76
    074 SINGAPORE AIRLINES FINANCIAL REVIEW Performance of the Company (continued) Earnings 2012-13 $ million 2011-12 $ million % Change Revenue Expenditure Operating profit Finance charges Interest income Surplus/(Loss) on disposal of aircraft, spares and spare engines Dividends from subsidiary and ...

  • Page 77
    ... of passenger revenue by route region and area of original sale is shown below: By Route Region ($ million) 2012-13 2011-12 % Change 105.6 83.7 By Area of Original Sale R6 ($ million) 2012-13 2011-12 % Change East Asia Americas Europe South West Pacific West Asia and Africa Systemwide 2,570...

  • Page 78
    ...12,200 million in 2012-13. 2012-13 $ million % 2011-12 $ million % % Change Fuel costs Staff costs Depreciation R7 Handling charges Inflight meals and other passenger costs Airport and overflying charges Aircraft maintenance and overhaul costs Rentals on leased aircraft Sales costs R8 Communication...

  • Page 79
    ... year to 419ltk/BBL. This was mainly due to lower bellyhold load factor. A change in fuel productivity (passenger aircraft) of 1.0 per cent would impact the Company's annual fuel cost by about $50 million, before accounting for changes in fuel price, USD exchange rate and flying operations. A change...

  • Page 80
    ... as follows: 31 March 2013 2012 % Change Category Senior staff (administrative and higher ranking officers) Technical crew Cabin crew Other ground staff Location Singapore East Asia Europe South West Pacific West Asia and Africa Americas The Company's average staff productivity ratiosR12 are shown...

  • Page 81
    ...Companies The major subsidiary companies are SIA Engineering Company Limited ("SIAEC"), SIA Cargo and SilkAir (Singapore) Private Limited ("SilkAir"). The following performance review includes intra-group transactions. SIA Engineering Group 2012-13 $ million 2011-12 $ million % Change Total revenue...

  • Page 82
    ... in Australia and New Zealand to a close for SIA Cargo. As at 31 March 2013, SIA Cargo operated a fleet of 12 B747-400 freighters. SIA Cargo's equity was $1,309 million (-11.4 per cent). SilkAir 2012-13 $ million 2011-12 $ million % Change Total revenue Total expenditure Operating profit Profit...

  • Page 83
    ... audited financial statements of the Group and of the Company for the financial year ended 31 March 2013. 1 Directors of the Company The names of the directors in office at the date of this report are: Stephen Lee Ching Yen - Chairman (Independent) Goh Choon Phong - Chief Executive Officer William...

  • Page 84
    ...SINGAPORE AIRLINES REPORT BY THE BOARD OF DIRECTORS 3 Directors' Interests in Shares, Share Options and Debentures (continued) Direct interest Deemed interest 1.4.2012/ 1.4.2012/ Date of Date of Appointment 31.3.2013 Appointment 31.3.2013 Name of Director Conditional award of performance shares...

  • Page 85
    ...in 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 86
    084 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 33,731,970 ...

  • Page 87
    ... three-year performance period. For the financial year under review, all RSP and PSP Final Awards released were satisfied by the transfer of treasury shares to the participants. No awards have been granted to controlling shareholders or their associates, or parent group directors or employees under...

  • Page 88
    086 SINGAPORE AIRLINES REPORT BY THE BOARD OF DIRECTORS 5 Equity Compensation Plans of the Company (continued) (ii) Restricted Share Plan ("RSP") and Performance Share Plan ("PSP") (continued) 3. PSP Base Awards R2 Aggregate Base Awards granted since commencement of PSP to end of financial year ...

  • Page 89
    ... 1 September 2012) Gautam Banerjee (appointed as director on 1 January 2013) The Audit Committee performed its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50 which include inter alia the review of the following: (i) quarterly and annual financial statements; (ii...

  • Page 90
    ... 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, and consolidated statement of cash flows...

  • Page 91
    ...Singapore Airlines Limited (the "Company") and its subsidiaries (the "Group") set out on pages 91 to 190, which comprise the statements of financial position of the Group and the Company as at 31 March 2013, the statements of changes in equity of the Group and the Company and the consolidated profit...

  • Page 92
    ... 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 kept in accordance with the provisions of the Act. ERNST & YOUNG LLP Public Accountants and Certified Public Accountants Dated this 16th day of May...

  • Page 93
    ...REPORT 2012/13 CONSOLIDATED PROFIT AND LOSS ACCOUNT For The Financial Year Ended 31 March 2013 (in $ million) Notes The Group 2012-13 2011-12 REVENUE EXPENDITURE Staff costs Fuel costs Depreciation Impairment of property, plant and equipment Amortisation of intangible assets Aircraft maintenance...

  • Page 94
    092 SINGAPORE AIRLINES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For The Financial Year Ended 31 March 2013 (in $ million) The Group 2012-13 2011-12 PROFIT FOR THE FINANCIAL YEAR OTHER COMPREHENSIVE INCOME: Currency translation differences Available-for-sale financial assets Cash flow hedges...

  • Page 95
    ... Deposits and other debtors Prepayments Amounts owing by subsidiary companies Investments Derivative assets Cash and bank balances Less: CURRENT LIABILITIES Sales in advance of carriage Deferred revenue Current tax payable Trade and other creditors Amounts owing to subsidiary companies Finance lease...

  • Page 96
    ...SINGAPORE AIRLINES STATEMENTS OF CHANGES IN EQUITY For The Financial Year Ended 31 March 2013 (in $ million) The Group Notes Share capital Treasury shares Capital reserve Balance at 1 April 2012 Comprehensive income Currency translation differences Net fair value changes on available-for-sale...

  • Page 97
    095 ANNUAL REPORT 2012/13 Attributable to Owners of the Parent Foreign currency translation reserve Share-based compensation reserve Noncontrolling interests Fair value reserve General reserve Total Total equity (186.3) 165.9 (47.6) 11,264.6 12,893.4 294.0 13,187.4 (5.5) (5.5) (5.5) -...

  • Page 98
    ...SINGAPORE AIRLINES STATEMENTS OF CHANGES IN EQUITY For The Financial Year Ended 31 March 2013 (in $ million) The Group Notes Share capital Treasury shares Capital reserve Balance at 1 April 2011 Comprehensive income Currency translation differences Net fair value changes on available-for-sale...

  • Page 99
    097 ANNUAL REPORT 2012/13 Attributable to Owners of the Parent Foreign currency translation reserve Share-based compensation reserve Noncontrolling interests Fair value reserve General reserve Total Total equity (186.1) 172.6 (138.0) 12,474.7 14,204.4 298.4 14,502.8 (0.2) (0.2) (0.2) -...

  • Page 100
    098 SINGAPORE AIRLINES STATEMENTS OF CHANGES IN EQUITY For The Financial Year Ended 31 March 2013 (In $ million) The Company Share-based Treasury Capital compensation shares reserve reserve Notes Share capital Fair value reserve General reserve Total Balance at 1 April 2012 Comprehensive ...

  • Page 101
    099 ANNUAL REPORT 2012/13 STATEMENTS OF CHANGES IN EQUITY For The Financial Year Ended 31 March 2013 (In $ million) The Company Share-based Treasury Capital compensation shares reserve reserve Notes Share capital Fair value reserve General reserve Total Balance at 1 April 2011 Comprehensive ...

  • Page 102
    100 SINGAPORE AIRLINES CONSOLIDATED STATEMENT OF CASH FLOWS For The Financial Year Ended 31 March 2013 (in $ million) Notes The Group 2012-13 2011-12 CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation Adjustments for: Depreciation Impairment of property, plant and equipment Amortisation ...

  • Page 103
    ...treasury shares NET CASH USED IN FINANCING ACTIVITIES NET CASH INFLOW/(OUTFLOW) CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR Effect of exchange rate changes CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR ANALYSIS OF CASH AND CASH EQUIVALENTS Fixed deposits Cash and bank CASH AND CASH...

  • Page 104
    ...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 charters and tour wholesaling...

  • Page 105
    ...Other Comprehensive Income ("OCI") is effective for financial periods beginning on or after 1 July 2012. The Amendments to FRS 1 changes the grouping of items presented in OCI. Items that could be reclassified to profit or loss at a future point in time would be presented separately from items which...

  • Page 106
    ... accounting policies are applied to like transactions 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...

  • Page 107
    ...consolidated statement of financial position, separately from equity attributable to owners of the Parent. Changes in the Company's ownership interest in a subsidiary company that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts...

  • Page 108
    106 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 2 Summary of Significant Accounting Policies (continued) (d) Subsidiary, associated and joint venture companies (continued) The Group's investments in associated companies are accounted for using the equity method. Under the ...

  • Page 109
    ... impairment annually. Licences were acquired in business combinations. These intangible assets are amortised on a straight-line basis over an estimated useful life of 3 years. (f) Foreign currencies The management has determined the currency of the primary economic environment in which the Company...

  • Page 110
    ...SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 2 Summary of Significant Accounting Policies (continued) (f) Foreign currencies (continued) For the purpose of the consolidated financial statements, the net assets of the foreign subsidiary, associated and joint venture companies...

  • Page 111
    ... lives, residual values and depreciation method are reviewed annually in the light of experience and changing circumstances, and adjusted prospectively, if appropriate. Freehold land, advance and progress payments are not depreciated. Fully depreciated assets are retained in the financial statements...

  • Page 112
    ... years). (ii) Operating lease - as lessee Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the profit and loss account on a straight-line...

  • Page 113
    ... and receivables Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Such assets are carried at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in the...

  • Page 114
    ... and which are subject to an insignificant risk of changes in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash on hand and deposits in banks. The accounting policy for this category of financial assets is stated in Note 2(k), under loans...

  • Page 115
    ...-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. For non-financial assets...

  • Page 116
    ... difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods. (iii) Available-for-sale financial assets Significant or...

  • Page 117
    ... ANNUAL REPORT 2012/13 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 contractual provisions of the financial instrument. The Group...

  • Page 118
    ... pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Provision for warranty claims is made for engine overhaul, repairs and maintenance of aircraft...

  • Page 119
    117 ANNUAL REPORT 2012/13 2 Summary of Significant Accounting Policies (continued) (x) Frequent flyer programme The Company operates a frequent flyer programme called "KrisFlyer" that provides travel awards to programme members based on accumulated mileage. A portion of passenger revenue ...

  • Page 120
    ... 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 121
    ...and share awards as consideration 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...

  • Page 122
    120 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 2 Summary of Significant Accounting Policies (continued) (ab) Employee benefits (continued) (i) Equity compensation plans (continued) No expense is recognised for options or awards that do not ultimately vest, except for ...

  • Page 123
    ... identify the reportable segments and the measurement basis of segment information. The significant business segments of the Group are airline operations, engineering services and cargo operations. (ii) Geographical segment The analysis of revenue by area of original sale from airline operations is...

  • Page 124
    ... of the fleet are made by the Group based on past experience and these are in line with the industry. The operational lives and residual values are reviewed on an annual basis. The carrying amount of the Group's and the Company's aircraft fleet at 31 March 2013 was $10,546.1 million (2012: $11,024...

  • Page 125
    ... 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 fleet management programme. It also manufactures aircraft...

  • Page 126
    124 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 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 127
    125 ANNUAL REPORT 2012/13 Engineering services 2012-13 Cargo operations 2012-13 Others 2012-13 Total of segments 2012-13 Elimination* 2012-13 Consolidated 2012-13 470.9 675.8 1,146.7 128.1 (0.1) 1.4 17.0 0.5 96.2 63.0 (31.9) 274.2 2,415.3 4.3 2,419.6 (167.0) (9.4) 0.8 (5.4) 0.4 (19.9) 26.2 (...

  • Page 128
    126 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 4 Segment Information (in $ million) (continued) Business segments (continued) Airline operations 2011-12 TOTAL REVENUE External revenue Inter-segment revenue RESULTS Segment result Finance charges Interest income (Loss)/...

  • Page 129
    127 ANNUAL REPORT 2012/13 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 2,673.6 5.9 2,679.5 (119.3) (12.3) 1.5 (2.9) (1.5) (1.3) 26.1 (109...

  • Page 130
    128 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 4 Segment Information (in $ million) (continued) Business segments (continued) Airline operations 2013 OTHER INFORMATION AS AT 31 MARCH Segment assets Investments in and loans to associated and joint venture companies Long-...

  • Page 131
    129 ANNUAL REPORT 2012/13 Engineering services 2013 Cargo operations 2013 Others 2013 Total of segments 2013 Elimination* 2013 Consolidated 2013 1,191.1 427.0 14.6 1,632.7 248.4 0.2 5.7 49.2 303.5 31.8 13.7 33.2 1.7 (0.8) 1,935.3 17.6 63.6 2,016.5 255.6 24.7 208.4 1.2 217.3 707.2 51.6 0.5 ...

  • Page 132
    130 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 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 Long-...

  • Page 133
    131 ANNUAL REPORT 2012/13 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 1.6 237.9 838.1 137.4 0.6 188...

  • Page 134
    ... operations by geographical areas for the financial years ended 31 March 2013 and 2012. By area of original sale 2012-13 2011-12 East Asia Europe South West Pacific Americas West Asia and Africa Systemwide Non-scheduled services and incidental revenue 4,962.9 1,352.9 1,628.9 760.1 436.5 9,141...

  • Page 135
    ... Company has in place the Singapore Airlines Limited Employee Share Option Plan ("ESOP"), Restricted Share Plan ("RSP") and Performance Share Plan ("PSP') and the amounts recognised in the profit and loss account for share-based compensation transactions with employees are as follows: The Group 2012...

  • Page 136
    134 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 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 137
    135 ANNUAL REPORT 2012/13 5 Staff Costs (in $ million) (continued) Share-based compensation expense (continued) Share option plans (continued) Exercisable period Exercise price Number outstanding Number exercisable 3.7.2007 - 2.7.2016 3.7.2008 - 2.7.2016 3.7.2009 - 2.7.2016 3.7.2010 - 2.7.2016 ...

  • Page 138
    ...Company and Group level • EBITDAR# Margin • Value Added per $ Employment Cost PSP 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. Performance...

  • Page 139
    137 ANNUAL REPORT 2012/13 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 1.4.2012/ date of grant Balance at 31.03.2013 Date of ...

  • Page 140
    ... key inputs to the model used for the July 2012 and July 2011 awards: July 2012 Award RSP PSP July 2011 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 with dividend...

  • Page 141
    ... 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 142
    140 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 6 Operating Profit (in $ million) Operating profit for the financial year was arrived at after charging/(crediting): The Group 2012-13 2011-12 Interest income from short-term investments Dividend income from short-term ...

  • Page 143
    ... the Company has paid the agreed upon administrative penalty during the financial year. 11 Taxation (in $ million) Major components of income tax expense The major components of income tax expense for the years ended 31 March 2013 and 2012 are: The Group 2012-13 2011-12 Current taxation Provision...

  • Page 144
    ... SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 11 Taxation (in $ million) (continued) The Group has tax losses (of which no deferred tax asset has been recognised) of approximately $56.0 million (2012: $53.8 million) that are available for offset against future taxable profits...

  • Page 145
    ... (2011-12: $117.5 million) be paid for the financial year ended 31 March 2013. 14 Share Capital (in $ million) The Group and the Company Number of shares Amount 2013 2012 2013 2012 Issued and fully paid share capital Ordinary shares Balance at 1 April Share options exercised and share awards vested...

  • Page 146
    .... Neither were shares (2011-12: nil) issued for RSP and PSP. 15 Treasury Shares (in $ million) The Group and the Company 31 March 2013 2012 Balance at 1 April Purchase of treasury shares Treasury shares reissued pursuant to equity compensation plans: - For cash on exercise of employee share options...

  • Page 147
    ...of tax) on derivative financial instruments designated as hedging instruments in cash flow hedges that is determined to be an effective hedge. Fair value changes of available-for-sale financial assets: The Group 31 March 2013 2012 The Company 31 March 2013 2012 Balance at 1 April Net gain/(loss) on...

  • Page 148
    ... SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 16 Other Reserves (in $ million) (continued) (d) Fair value reserve (continued) Fair value changes of derivative financial instruments designated as hedging instruments in cash flow hedges: The Group 31 March 2013 2012 The Company...

  • Page 149
    ...) The Group Statement of financial position Profit and loss 31 March 2013 2012 2012-13 2011-12 The Company Statement of financial position 31 March 2013 2012 The deferred taxation arises as a result of: Deferred tax liabilities Differences in depreciation Revaluation of fuel hedging contracts to...

  • Page 150
    148 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 19 Long-Term Liabilities (in $ million) The Group 31 March 2013 2012 The Company 31 March 2013 2012 Notes payable Non-current Loans Current Finance lease commitments Current Non-current Maintenance reserve Current Non-current...

  • Page 151
    ... 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 2013 2012 The Company 31 March 2013 2012 Balance at 1 April Provision during the year Provision utilised during...

  • Page 152
    150 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 21 Property, Plant and Equipment (in $ million) The Group Aircraft spares Aircraft spare engines Aircraft Cost At 1 April 2011 Additions Transfers Disposals Exchange differences At 31 March 2012 Additions Transfers Disposals ...

  • Page 153
    151 ANNUAL REPORT 2012/13 Freehold land Freehold buildings Leasehold land and buildings Plant and equipment Office and computer equipment Advance and progress payments Total 15.7 15.7 15.7 148.6 148.6 (0.3) 148.3 617.4 0.5 (0.2) (0.1) 617.6 0.6 8.9 (0.2) 626.9 672.2 13.6 70.3 (31.6) (0.1)...

  • Page 154
    152 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 21 Property, Plant and Equipment (in $ million) (continued) The Company Aircraft spares Aircraft spare engines Aircraft Cost At 1 April 2011 Additions Transfers Disposals At 31 March 2012 Additions Transfers Disposals At 31 ...

  • Page 155
    153 ANNUAL REPORT 2012/13 Freehold land Freehold buildings Leasehold land and buildings Plant and equipment Office and computer equipment Advance and progress payments Total 15.7 15.7 15.7 148.7 148.7 (0.3) 148.4 341.7 341.7 341.7 350.4 1.2 59.0 (18.4) 392.2 0.6 80.6 (15.3) 458.1 235.8 ...

  • Page 156
    154 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 21 Property, Plant and Equipment (in $ million) (continued) The Group 31 March 2013 2012 Net book value of property, plant and equipment acquired under finance leases: - aircraft - plant and equipment 557.6 0.1 557.7 617.0 ...

  • Page 157
    155 ANNUAL REPORT 2012/13 22 Intangible Assets (in $ million) (continued) The Company Computer software and others Advance and progress payments Total Cost At 1 April 2011 Additions Transfers Disposals At 31 March 2012 Additions Transfers Disposals At 31 March 2013 Accumulated amortisation At 1 ...

  • Page 158
    ... business Percentage of equity held by the Group 2013 2012 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.@ Engineering services Provide aircraft...

  • Page 159
    ... companies at 31 March are: Country of incorporation and place of business Percentage of equity held by the Group 2013 2012 Principal activities Singapore Jamco Pte Ltd Aerospace Component Engineering Services Pte Limited Aviation Partnership (Philippines) Corporation* Singapore Airlines Cargo Pte...

  • Page 160
    158 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 24 Associated Companies (in $ million) The Group 31 March 2013 2012 Share of net assets of associated companies at acquisition date Goodwill on acquisition of associated companies Accumulated impairment loss Goodwill written ...

  • Page 161
    ... as follows: The Group 31 March 2013 2012 Assets and liabilities Current assets Non-current assets Current liabilities Non-current liabilities 1,014.8 2,033.4 3,048.2 (578.1) (677.7) (1,255.8) 2012-13 1,101.2 2,019.8 3,121.0 (690.8) (673.8) (1,364.6) 2011-12 Results Revenue Profit for the period...

  • Page 162
    ... place of business Percentage of equity held by the Group 2013 2012 Principal activities Virgin Atlantic Limited*+ Tiger Airways Holdings Limited @ Air transportation Investment holding Hotel ownership and management Repair and overhaul of aircraft engine combustion chambers, guides, fuel nozzles...

  • Page 163
    ... place of business Percentage of equity held by the Group 2013 2012 Principal activities International Aerospace Tubes-Asia Pte Ltd^++ Asian Compressor Technology Services Co Ltd^^++ Turbine Coating Services Private Ltd^+++ PT Purosani Sri Persada Great Wall Airlines Company Limited #++ Repair of...

  • Page 164
    ...SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 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 2013 2012 Assets and liabilities Current...

  • Page 165
    163 ANNUAL REPORT 2012/13 26 Long-Term Investments (in $ million) The Group 31 March 2013 2012 The Company 31 March 2013 2012 Available-for-sale investments Quoted Government securities Equity investments Unquoted Non-equity investments Equity investments, at cost Accumulated impairment loss 0.5 ...

  • Page 166
    164 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 29 Trade Debtors (in $ million) The Group 31 March 2013 2012 The Company 31 March 2013 2012 Trade debtors Accrued receivables Amounts owing from: Subsidiary companies Associated companies Joint venture companies 1,499.3 57.1 ...

  • Page 167
    165 ANNUAL REPORT 2012/13 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 2013 2012 The Company 31 March 2013 2012 Balance at 1 April Written back during the...

  • Page 168
    ...rate of 1.15% (2011-12: 1.00% to 1.06%) per annum. During the previous financial year, the interest rates for unquoted government securities ranged from 0.27% to 0.39% per annum. 32 Cash and Bank Balances (in $ million) The Group 31 March 2013 2012 The Company 31 March 2013 2012 Fixed deposits Cash...

  • Page 169
    ... and associated companies are unsecured, trade-related, non-interest bearing and are repayable on demand. 34 Analysis of Capital Expenditure Cash Flow (in $ million) The Group 2012-13 2011-12 Purchase of property, plant and equipment Property, plant and equipment acquired under credit terms...

  • Page 170
    168 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 35 Capital and Other Commitments (in $ million) (continued) (b) Operating lease commitments As lessee Aircraft The Company has 3 B777-200, 3 B777-200ER, 2 B777-300, 20 A330-300 and 9 A380-800 aircraft under operating leases ...

  • Page 171
    ... minimum lease payments recognised in the profit and loss account amounted to $64.2 million (2011-12: $63.8 million) and $53.2 million (2011-12: $52.8 million) for the Group and the Company respectively. As lessor Aircraft The Company's existing commercial aircraft leases for 6 B777-200ER aircraft...

  • Page 172
    ... Union, Australia, Canada, New 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...

  • Page 173
    ... alleged collusion in the elimination of commissions paid to travel agents in India. In January 2011, the Office of the Director General of the CCI issued a report exonerating the Company and the other defendant airlines. The Travel Agent Association of India ("TAAI") has filed an appeal of the CCI...

  • Page 174
    ... Airlines Limited, in a claim on behalf of Australian travel agents for alleged non-payment of commissions on fuel surcharges applied to passenger tickets issued in Australia from May 2004 onwards (the "Leonie's Case"). In May 2007, the applicant's solicitors filed a fresh similar representative...

  • Page 175
    ... cost 2013 The Company Available-forLoans and sale financial receivables assets Derivatives used for hedging 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...

  • Page 176
    ...profit or assets hedging cost loss 2012 The Group Available-forLoans and sale financial receivables assets Total Assets Long-term investments Other receivables Trade debtors Deposits and other debtors Investments Derivative assets Cash and bank balances Total financial assets Total non-financial...

  • Page 177
    ...in the statements of financial position are as follows: The Group 31 March 2013 2012 The Company 31 March 2013 2012 Derivative assets Currency hedging contracts Fuel hedging contracts Interest rate cap contracts Derivative liabilities Currency hedging contracts Fuel hedging contracts Cross currency...

  • Page 178
    ... hierarchy The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy: The Group 31 March 2013 Quoted prices in active markets for identical instruments (Level 1) 31 March 2012 Quoted prices in active markets for identical instruments (Level...

  • Page 179
    ...-12: 11.34%) of the jet fuel swap and option contracts is also estimated with daily MOPS price. The continuously compounded risk-free rate estimated as average of the past 12 months' Singapore Government Securities benchmark issues' one-year yield (2012-13: 0.27%, 2011-12: 0.33%) was also applied to...

  • Page 180
    ... Financial Risk Management Objectives and Policies (in $ million) The Group operates globally and generates revenue in various currencies. The Group's airline operations carry certain financial and commodity risks, including the effects of changes in jet fuel prices, foreign currency exchange rates...

  • Page 181
    179 ANNUAL REPORT 2012/13 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 assumption that all other factors, such as fuel surcharge ...

  • Page 182
    180 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (b) Foreign currency risk (continued) Fair value through profit or loss In addition, the Group has cross currency swap contracts in place with ...

  • Page 183
    181 ANNUAL REPORT 2012/13 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 income and expense from short-term deposits and other ...

  • Page 184
    182 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 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 185
    ... 2013, the Group and the Company own investments of $957.4 million (2012: $900.0 million) and $897.4 million (2012: $840.1 million) respectively, which are subject to market rate risk. The market risk associated with these investments is the potential loss resulting from a decrease in market prices...

  • Page 186
    184 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 38 Financial Risk Management Objectives and Policies (in $ million) (continued) (e) Liquidity risk (continued) Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years 2013 Total The Group Notes payable ...

  • Page 187
    ... have the primary responsibility for measuring and managing specific risk exposures. The maximum exposure to credit risk for the Group and the Company is represented by the carrying amount of each financial asset in the statement of financial position. There are no significant concentrations of...

  • Page 188
    186 SINGAPORE AIRLINES NOTES TO THE FINANCIAL STATEMENTS 31 March 2013 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 189
    ... changes were made in the objectives, policies or processes relating to the management of the Company's capital structure. The Group 31 March 2013 2012 The Company 31 March 2013 2012 Notes payable Finance lease commitments Loans Total debt Share capital Reserves Total capital Gearing ratio (times...

  • Page 190
    ... the financial 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 2012-13 2011-12 Purchases of services from associated companies...

  • Page 191
    189 ANNUAL REPORT 2012/13 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 Base Awards Aggregate Base Awards granted since ...

  • Page 192
    ... Awards that have vested during the financial year. R2 # * During the financial year, 50,176 and 56,370 treasury shares were issued to director and key executives of the Company pursuant to the RSP and PSP respectively. 41 Subsequent Events Pursuant to Tiger Airways Holdings Limited's ("Tiger...

  • Page 193
    ... Sector rate agreement between Scoot Pte Ltd and Tiger Airways Singapore Pte Ltd which applies to tickets issued by Scoot for transportation on Tiger-operated flights, and by Tiger for transportation on Scoot-operated flights. ** Note: All the above interested person transactions were carried out...

  • Page 194
    192 SINGAPORE AIRLINES QUARTERLY RESULTS OF THE GROUP 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total TOTAL REVENUE 2012-13 2011-12 ($ million) ($ million) 3,777.4 3,577.6 3,793.6 3,699.5 3,860.4 3,875.4 3,666.8 3,705.3 15,098.2 14,857.8 TOTAL EXPENDITURE 2012-13 2011-12 ($ million) ($...

  • Page 195
    ...ANNUAL REPORT 2012/13 FIVE-YEAR FINANCIAL SUMMARY OF THE GROUP 2012-13 2011-12 2010-11 2009-10 2008-09 PROFIT AND LOSS ACCOUNT ($ million) Total revenue Total expenditure Operating profit Finance charges Interest income Surplus/(Loss) on disposal of aircraft, spares and spare engines Dividend...

  • Page 196
    ... (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 R4 Return on total assets R5 Return on turnover R6 PRODUCTIVITY AND EMPLOYEE DATA Value added...

  • Page 197
    ...-wide average age 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 R2 Passenger load carried per employee R3 Revenue per employee Value added per...

  • Page 198
    ... age in years (y) and months (m) Aircraft type Finance Owned Lease Operating Lease Total Seats in standard configuration Expiry of operating lease 2013-14 2014-15 On firm order On option Singapore Airlines: B777-200 B777-200A B777-200R B777-200ER B777-200ERR B777-300R B777-300ER A340-500...

  • Page 199
    .../13 GROUP CORPORATE STRUCTURE 31 March 2013 SINGAPORE AIRLINES LIMITED 78.6% SIA Engineering Company Limited 100% SilkAir (Singapore) Private Limited 56% Abacus Travel Systems Pte Ltd 100% Tradewinds Tours & Travel Private Limited Abacus Travel Systems Pte Ltd 100% Aircraft Maintenance Services...

  • Page 200
    198 SINGAPORE AIRLINES INFORMATION ON SHAREHOLDINGS as at 29 May 2013 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 1,175,915,656 23,935,...

  • Page 201
    199 ANNUAL REPORT 2012/13 INFORMATION ON SHAREHOLDINGS as at 29 May 2013 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 DBSN Services Pte Ltd HSBC (Singapore) Nominees Pte Ltd BNP ...

  • Page 202
    ... Share Price ($) 2012-13 2011-12 High Low Closing Market Value Ratios R1 11.35 10.10 10.87 14.77 10.05 10.77 Price/Earnings Price/Book value Price/Cash earnings R2 R1 R2 33.76 0.97 6.39 38.06 0.98 6.53 Based on closing price on 31 March and Group numbers. Cash earnings is defined as profit...

  • Page 203
    ...emoluments of up to $1,700,000 for the financial year ending 31 March 2014 (FY2012-13: up to $1,650,000). To re-appoint Messrs Ernst & Young LLP as Auditor of the Company and to authorise the Directors to fix their remuneration. 2. 3. 6. Special Business 7. To consider and if thought fit, approve...

  • Page 204
    ... Annual General Meeting of the Company is required by law to be held, whichever is the earlier. 7.2 That the Directors be and are hereby authorised to: (a) grant awards in accordance with the provisions of the SIA Performance Share Plan and/or the SIA Restricted Share Plan; and (b) allot and issue...

  • Page 205
    203 ANNUAL REPORT 2012/13 Closure of Books Notice is hereby given that, subject to the approval of shareholders to the final dividend being obtained at the Forty-First Annual General Meeting to be held on 26 July 2013, the Transfer Books and the Register of Members of the Company will be closed on ...

  • Page 206
    ... on Board of Directors and Corporate Governance in the Annual Report for further details on Mr Hsieh and Mr Banerjee. 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 2013-14...

  • Page 207
    ... not be a member of the Company. The instrument appointing a proxy or proxies must be deposited at the office of the Company's Share Registrar, M & C Services Private Limited, 112 Robinson Road, #05-01, Singapore 068902 not less than 48 hours before the time fixed for holding the Meeting. 2. 3.

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    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 ...