ANNUAL REPORT 2012/13

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ANNUAL REPORT 2012/13
CONTENTS
002
006
010
012
Statistical Highlights
Board of Directors
Chairman’s Letter to
Shareholders
Corporate Data
014
018
020
021
Significant Events
The Year in Review
Network
Fleet Management
022
026
030
031
Products and Services
People Development
Environment
Supporting Our
Communities
032
036
038
039
Subsidiaries
Selected Awards
Statement on
Risk Management
Corporate
Governance Report
065
201
Financials
Notice of Annual
General Meeting
On the Cover: Flight Stewardess Nur Surya Ambiah is featured with the Dendrobium Singapore Girl Orchid.
THE SINGAPORE AIRLINES
GROUP ACHIEVED A NET
PROFIT ATTRIBUTABLE TO
EQUITY SHAREHOLDERS
OF $379 MILLION FOR THE
FINANCIAL YEAR ENDED
31 MARCH 2013. THIS WAS
DESPITE RECORDING A
LOWER OPERATING PROFIT
AMID PERSISTENTLY HIGH
FUEL PRICES AND LOWER
YIELDS DUE TO WEAK GLOBAL
ECONOMIC CONDITIONS.
The 2012/13 financial year was one of significant development for the SIA Group,
with numerous initiatives to strengthen the three main pillars of our brand promise,
namely Service Excellence, Product Leadership and Network Connectivity.
002
SINGAPORE AIRLINES
STATISTICAL HIGHLIGHTS
Financial Statistics R1
2012-13 2011-12
% Change
The Group
Financial Results ($ million)
Total revenue Total expenditure
Operating profit Profit before taxation Profit attributable to owners of the Parent 15,098.2
14,869.0 229.2 482.0
378.9 14,857.8
14,571.9
285.9
448.2
335.9
+
+
-
+
+
1.6
2.0
19.8
7.5
12.8
Financial Position ($ million)
Share capital Treasury shares Capital reserve Foreign currency translation reserve Share-based compensation reserve Fair value reserve General reserve Equity attributable to owners of the Parent 1,856.1 (269.8) 110.3 (191.8) 151.7 (27.1) 11,475.3 13,104.7 1,856.1 (258.4) -
99.1
+
(186.3) -
165.9 -
(47.6) +
11,264.6 +
12,893.4 +
4.4
11.3
3.0
8.6
43.1
1.9
1.6
Return on equity holders’ funds (%)
R2
2.9 Total assets Total debt
Total debt equity ratio (times) R3 2.5 22,428.1 1,014.1
0.08 Value added Per Share Data
Earnings - basic (cents) R4 Earnings - diluted (cents) R5 Net asset value ($) R6 Dividends
Interim dividend (cents per share) Final dividend (cents per share) Dividend cover (times) R7 22,043.0 + 1.7
1,077.8 - 5.9
0.08 - times
4,499.6 4,344.3 + 3.6
32.2
31.9 11.15 28.3
27.9 10.96 + 13.8
+ 14.3
+ 1.7
6.0
17.0 1.4 The Company
Financial Results ($ million)
Total revenue Total expenditure Operating profit
(Loss)/Profit before taxation (Loss)/Profit after taxation 10.0 - 4.0 cents
10.0 + 7.0 cents
1.4 - times
12,387.0 12,199.8 187.2 (682.4) (694.1) Value added + 0.4 point
12,070.1
11,889.5
180.6
413.3
390.2
2,259.3 + 2.6
+ 2.6
+ 3.7
n.m.
n.m.
3,299.2 - 31.5
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. Total debt equity ratio is total debt divided by equity attributable to owners of the Parent as at 31 March.
R1
R2
R3
Earnings per share (basic) is computed by dividing profit attributable to owners of the Parent by the weighted average number of ordinary shares in issue excluding treasury shares.
R4
Earnings per share (diluted) is computed by dividing profit attributable to owners of the Parent by the weighted average number of ordinary shares in issue excluding treasury shares, adjusted
for the dilutive effect on the exercise of all outstanding share options.
R5
Net asset value per share is computed by dividing equity attributable to owners of the Parent by the number of ordinary shares in issue excluding treasury shares at 31 March.
R6
Dividend cover is profit attributable to owners of the Parent divided by total dividends.
R7
003
ANNUAL REPORT 2012/13
Operating Statistics
2012-13
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 factor (%) SilkAir
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 factor (%) 18,210
93,765.6
118,264.4
79.3
11.4
9.2
80.7
2012-12
17,155
87,824.0
113,409.7
77.4
11.8
9.2
78.0
3,295 5,223.1 7,096.3 73.6 14.1 9.9 70.2
3,032
4,469.4
5,904.8
75.7
14.5
10.1
69.7
% Change
+
+
+
+
-
+
6.1
6.8
4.3
1.9 points
3.4
2.7 points
+
+
+
-
-
-
+
8.7
16.9
20.2
2.1 points
2.8
2.0
0.5 point
SIA Cargo
Cargo and mail carried (million kg) Cargo load (million tonne-km) Gross capacity (million tonne-km) Cargo load factor (%)
Cargo yield (cents/ltk) Cargo unit cost (cents/ctk) Cargo breakeven load factor (%) 1,144.6 6,763.6 10,661.0
63.4 33.4 23.2 69.5 1,205.8
7,198.2
11,286.5
63.8
34.9
23.5
67.3
-
-
-
-
-
-
+
5.1
6.0
5.5
0.4 point
4.3
1.3
2.2 points
Singapore Airlines, SilkAir and SIA Cargo
Overall load (million tonne-km) Overall capacity (million tonne-km) Overall load factor (%) Overall yield (cents/ltk) Overall unit cost (cents/ctk) Overall breakeven load factor (%) 16,047.3
23,188.4
69.2
85.3
60.4
70.8
15,898.8
23,378.6
68.0
85.5
58.6
68.5
+
-
+
-
+
+
0.9
0.8
1.2 points
0.2
3.1
2.3 points
14,156 8,354,366 619,969 875,035
159,593 13,893 8,163,082
594,663 868,790
237,472
+
+
+
+
-
23,189 651,093 194,040 22,514
659,936
192,960 Employee Productivity (Average) - The Company
Average number of employees Seat capacity per employee (seat-km) Passenger load per employee (tonne-km) R1 Revenue per employee ($) Value added per employee ($)
Employee Productivity (Average) - The Group
Average number of employees Revenue per employee ($) Value added per employee ($) 1.9
2.3
4.3
0.7
32.8
+ 3.0
- 1.3
+ 0.6
Passenger load includes excess baggage carried.
R1
GLOSSARY
Singapore Airlines
Revenue passenger-km
Available seat-km
Passenger load factor
Passenger yield
Passenger unit cost
Passenger breakeven
load factor
SilkAir
Revenue passenger-km
Available seat-km
Passenger load factor
Passenger yield
Passenger unit cost
Passenger breakeven
=
=
=
=
=
=
Number of passengers carried x distance flown (in km)
Number of available seats x distance flown (in km)
Revenue passenger-km expressed as a percentage of available seat-km
Passenger revenue from scheduled services divided by revenue passenger-km
Operating expenditure (less bellyhold revenue from SIA Cargo) divided
by available seat-km
Passenger unit cost expressed as a percentage of passenger yield. This is the theoretical load factor at which passenger revenue equates
to the operating expenditure (less bellyhold revenue from SIA Cargo)
=
=
=
=
=
=
Number of passengers carried x distance flown (in km)
Number of available seats x distance flown (in km)
Revenue passenger-km expressed as a percentage of available seat-km
Passenger revenue from scheduled services divided by revenue passenger-km
Operating expenditure (less cargo and mail revenue) divided by available seat-km
Passenger unit cost expressed as a percentage of passenger yield.
This is the theoretical load factor at which passenger revenue equates
to the operating expenditure (less cargo and mail revenue)
SIA Cargo
Cargo load
=
Cargo and mail load carried (in tonnes) x distance flown (in km)
Gross capacity
=
Cargo capacity production (in tonnes) x distance flown (in km)
Cargo load factor
=
Cargo and mail load (in tonne-km) expressed as a percentage of gross capacity (in tonne-km)
Cargo yield
=
Cargo and mail revenue from scheduled services divided by cargo load
(in tonne-km)
Cargo unit cost
=
Operating expenditure (including bellyhold expenditure to Singapore Airlines) divided by gross capacity (in tonne-km)
Cargo breakeven =
Cargo unit cost expressed as a percentage of cargo yield. This is the
load factor
theoretical load factor at which cargo revenue equates to the operating
expenditure (including bellyhold expenditure to Singapore Airlines)
Singapore Airlines, SilkAir and SIA Cargo
Overall load
=
Total load carried (in tonnes) x distance flown (in km)
Overall capacity
=
Total capacity production (in tonnes) x distance flown (in km)
Overall load factor
=
Overall load (in tonne-km) expressed as a percentage of overall capacity (in tonne-km)
CHARTING A SUSTAINABLE FUTURE
We work together as one to ensure that the state of the SIA Group
remains strong and to invest in the shared future of our stakeholders.
006
SINGAPORE AIRLINES
BOARD OF DIRECTORS
Stephen Lee Ching Yen
Chairman
Goh Choon Phong
Director and Chief Executive Officer
Gautam Banerjee
Director
Appointed Director on 26 April 2004
and Chairman on 1 January 2006.
Mr Lee is the Managing Director of
Shanghai Commercial and Savings
Bank Ltd (Taiwan) and Great Malaysia
Textile Investments Pte Ltd. He is
also the President of the Singapore
National Employers Federation. Among
several other appointments, Mr Lee
is a member of the Advisory Panel of
Temasek Holdings (Private) Limited and
an alternate member of the Council of
Presidential Advisers. He was Chairman
of the Singapore Business Federation
from 2002 to 2008 and International
Enterprise Singapore from 1995 to 2002.
Mr Lee was a Nominated Member of
Parliament from 1994 to 1997. In 2006,
Mr Lee was awarded the Distinguished
Service Order for his contributions to
both the public and private sectors.
Appointed Director on 1 October 2010
and Chief Executive Officer on 1 January
2011. Mr Goh joined the Company in
1990 and has held senior management
positions in various divisions in Singapore
and overseas, ranging from Marketing to
Information Technology to Finance and
Cargo. Prior to his appointment as Chief
Executive Officer, Mr Goh was Executive
Vice President for Marketing and the
Regions and also served as President of
Singapore Airlines Cargo Pte Ltd from
2006 to 2010.
Appointed Director on 1 January 2013.
Mr Banerjee is a Senior Advisor to the
Blackstone Group, a member of the
Blackstone International Advisory panel
and Chairman of Blackstone Singapore.
He was with professional services
firm PricewaterhouseCoopers (PwC)
Singapore for 30 years, including as its
Executive Chairman and Chief Operating
Officer for the Asia Pacific region.
Mr Banerjee retired from PwC Singapore
on 31 December 2012. His current roles
include serving as Vice Chairman of the
Singapore Business Federation and on
the Board of The APEC Business Advisory
Council. He served on the Corporate
Governance Council of the Monetary
Authority of Singapore, Companies Act
Reform Steering Committee and the
Economic Strategies Committee chaired
by the Finance Minister of Singapore
from 2009 to 2010. Mr Banerjee was
a Nominated Member of Parliament in
Singapore between 2007 and 2009.
007
ANNUAL REPORT 2012/13
William Fung Kwok Lun
Director
Euleen Goh Yiu Kiang
Director
Appointed Director on 1 December
2009. Dr Fung is Group Chairman of Li
& Fung Limited, a multinational group
of companies headquartered in Hong
Kong. Dr Fung has held key positions in
major trade and business associations.
He was Chairman of the Hong Kong
General Chamber of Commerce, Hong
Kong Exporters’ Association and
Hong Kong Committee for the Pacific
Economic Cooperation Council. Dr Fung
has received numerous awards and
accolades for his business contributions
including the Silver Bauhinia Star by the
Government of the Hong Kong Special
Administrative Region in 2008. He was
also conferred the Honorary Degrees
of Doctor of Business Administration
by Hong Kong University of Science
& Technology and by Hong Kong
Polytechnic University.
Appointed Director on 1 September
2006. Ms Goh has been the Chairperson
of the Board of Governors of Singapore
International Foundation since 1 April
2008. She was appointed Justice
of the Peace on 8 May 2013. She
was the Chairperson of International
Enterprise Singapore from April
2005 to April 2008 and Accounting
Standards Council from 11 December
2007 to 31 October 2011. Ms Goh
held various senior management
positions in Standard Chartered Bank
before retiring as Chief Executive
Officer, Singapore in March 2006, after
more than 20 years service. She was
awarded a Public Service Medal in
2006 and a Public Service Star in 2012
by the President of Singapore.
008
SINGAPORE AIRLINES
BOARD OF DIRECTORS
Hsieh Tsun-yan
Director
Christina Ong
Director
Helmut Gunter Wilhelm Panke
Director
Appointed Director on 1 September
2012. Mr Hsieh is Chairman and
Lead Counselor of LinHart Group, a
leadership counselling firm founded
by Mr Hsieh in 2008. Mr Hsieh has
extensive experience in international
business, leadership development
and corporate transformation. He was
with management consulting firm
McKinsey & Company for 28 years
and held posts in Singapore, Toronto
and Copenhagen. He is a member
of the Advisory Board at the School
of Business and holds Provost Chair
Professorship there and at the Lee
Kuan Yew School of Public Policy,
both at the National University of
Singapore. He contributes to the
community with board roles current
and past including the Singapore
International Foundation, the Institute
of Policy Studies, the Singapore
Symphony, Covenant House Canada
and the University Health Network
Foundation in Toronto.
Appointed Director on 1 September
2007. Mrs Christina Ong is a wellknown hotelier and fashion retailer
who owns the Como Hotels & Resorts
Group of hotels and spas. She is
also the owner of various high-end
international fashion stores under
the Club 21 umbrella. Mrs Ong was a
recipient of The Italian Fashion Hall of
Fame Award in 1995 and The Italian
Award of Cavaliere De Lavo.
Appointed Director on 1 September
2009. Dr Panke, a trained nuclear
engineer, was with BMW AG from 1982
to 2006. During this time, he served in
a number of senior positions, including
Executive Chairman of the Board of
Management from May 2002 through
August 2006. Among other positions
held, from 1993 through 1996, he
served as Chairman and CEO of BMW
(US) Holding Corp, responsible for the
carmaker’s North American activities.
Dr Panke played a key role in the
building of the first BMW plant in the
USA in Spartanburg, South Carolina.
009
ANNUAL REPORT 2012/13
Jackson Peter Tai
Director
Lucien Wong Yuen Kuai
Director
Appointed Director on 1 September
2011. Mr Tai is on the Boards of Bank
of China, MasterCard Incorporated,
NYSE Euronext and Philips Electronics
NV. Mr Tai was a senior executive
with DBS Group and DBS Bank Ltd
in Singapore between July 1999
and December 2007. Mr Tai joined
DBS as Chief Financial Officer and in
January 2001 became President and
Chief Operating Officer. He became
Vice Chairman and CEO in June 2002.
Mr Tai joined DBS after 25 years with
JP Morgan & Co, during which he held
senior management positions in New
York, San Francisco and Tokyo.
Appointed Director on 1 September
2007. Mr Wong is Chairman and
Senior Partner of Allen & Gledhill LLP
and has over 30 years of experience
in the practice of law, specialising
in banking, corporate and financial
services work. His other directorships
include Director of Temasek Holdings
(Private) Limited, Hap Seng Plantations
Holdings Berhad and Singapore Press
Holdings Limited. He is also Chairman
of the Maritime and Port Authority of
Singapore and was a Board member of
the Monetary Authority of Singapore
from January 2006 to February 2013.
CHAIRMAN’S LETTER TO SHAREHOLDERS
Operating conditions remain
challenging, but the state
of the SIA Group is strong.
The Board and Management
are confident that the
developments of the past
financial year as well as those
that are planned will ensure
that this remains the case in
the years ahead.
011
ANNUAL REPORT 2012/13
The last financial year was one of significant development for
the SIA Group. This year’s Letter to Shareholders will therefore
focus on the many important steps forward that have been
taken to ensure we retain our industry-leading position.
The 2012/13 financial year was an especially busy one for
management and staff, with numerous initiatives to strengthen
the three main pillars of our brand promise, namely Service
Excellence, Product Leadership and Network Connectivity.
Singapore Airlines enhanced its network during the year
while it also ordered more Airbus A380s and A350s. At the
same time Boeing 787 orders were transferred to Scoot,
which launched in June as the fourth airline in the SIA Group.
Scoot has been steadily expanding its network and the business
has proven to be a success to date, with a good customer
following and healthy passenger loads.
Regional full-service arm SilkAir also continued to add new
destinations to its fast-growing network and placed the biggest
aircraft 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 and larger in-flight entertainment
system screens in Economy Class. Our lounges around the
world will also be revamped from this year with a new design
concept, while the next generation of in-flight cabin products
will be rolled out in the coming months.
The Group has also been investing in upgrading IT systems.
In July, Singapore Airlines and SilkAir cut over to a new
inventory and reservations system, which was followed recently
by an upgrade of check-in systems.
Customer service is also not being overlooked, as it remains
a crucial differentiator. To help deliver an enhanced travel
experience that focuses on meeting more of our customers’ travel
needs, a contract was signed recently with Accenture for the
development of a new Customer Experience Management (CEM)
system. Implementation is scheduled for the second half
of 2014 and it is one element of a multi-million-dollar
investment programme.
Ultimately it is our people who make the real difference in
setting us apart from the competition. The new CEM system will
help our employees – who are our greatest asset – to deliver
even better experiences to our customers.
New partnerships were also agreed with more airlines during
the last financial year to provide customers more choices of
flights through codeshare arrangements. We acquired a 10 per
cent stake in Virgin Australia in October, and recently agreed
to acquire another 9.9 per cent. Agreement was separately
reached on the sale of our 49 per cent of Virgin Atlantic
Airways. Subject to regulatory approvals, the transaction should
be completed late this calendar year.
The many developments outlined above are all intended to
ensure that the SIA Group is well positioned for the future,
in an increasingly competitive landscape. In addition to
remaining a leader in the delivery of innovative products and
services, our portfolio approach to airline operations positions
the Group well for different business cycles, with Singapore
Airlines and SilkAir on the premium end of the spectrum and
Scoot on the low-cost end in partnership with Tiger Airways,
in which we have a strategic stake.
Before I conclude, allow me to put on record my appreciation
to my fellow Directors for their contributions over the past
year. During the last financial year we welcomed to the
Board Mr Hsieh Tsun-yan and Mr Gautam Banerjee, while
Mr David Gonski retired from the Board. Allow me to express
on behalf of the Board and Management our thanks to David
for his many contributions over the years.
I would like to close by expressing my gratitude as always to
shareholders for your continued support, particularly given the
significant investments we are making. Operating conditions
remain challenging, but the state of the SIA Group is strong.
The Board and Management are confident that the developments
of the past financial year as well as those that are planned will
ensure that this remains the case in the years ahead.
Stephen Lee
Chairman
012
SINGAPORE AIRLINES
CORPORATE DATA
Board of Directors
Board Audit Committee
Board Safety and Risk Committee
Chairman
Stephen Lee Ching Yen
Chairperson
Euleen Goh Yiu Kiang
Chairman
Helmut Gunter Wilhelm Panke
Members
William Fung Kwok Lun
Members
William Fung Kwok Lun
Members
Christina Ong
Goh Choon Phong
Jackson Peter Tai
Lucien Wong Yuen Kuai
Euleen Goh Yiu Kiang
David Michael Gonski
Christina Ong
Helmut Gunter Wilhelm Panke
Jackson Peter Tai
Lucien Wong Yuen Kuai
(until 31 July 2012)
Hsieh Tsun-yan
(from 1 September 2012)
Gautam Banerjee
(from 1 January 2013)
David Michael Gonski
(until 31 July 2012)
Hsieh Tsun-yan
(from 1 September 2012)
Gautam Banerjee
(from 1 January 2013)
Board Compensation and
Industrial Relations Committee
Chairman
Stephen Lee Ching Yen
Members
Helmut Gunter Wilhelm Panke
Board Committees
Jackson Peter Tai
Board Executive Committee
David Michael Gonski
Chairman
Stephen Lee Ching Yen
Hsieh Tsun-yan
Members
Goh Choon Phong
Euleen Goh Yiu Kiang
(until 31 July 2012)
Company Secretary
Ethel Tan
Share Registrar
M & C Services Private Limited
112 Robinson Road #05-01
Singapore 068902
Auditor
Ernst & Young LLP
Public Accountants and Certified
Public Accountants
One Raffles Quay
North Tower #18-01
Singapore 048583
(from 1 September 2012)
Gautam Banerjee
Audit Partner
(from 1 January 2013)
Mak Keat Meng
(appointed since FY2010-11)
Lucien Wong Yuen Kuai
Board Nominating Committee
Chairman
Lucien Wong Yuen Kuai
(until 31 March 2013)
Stephen Lee Ching Yen
(from 1 April 2013)
Members
Christina Ong
Stephen Lee Ching Yen
(until 31 March 2013)
Lucien Wong Yuen Kuai
(from 1 April 2013)
Registered Office
Airline House
25 Airline Road
Singapore 819829
013
ANNUAL REPORT 2012/13
Executive Management
Overseas Regions
Head Office
Foo Chai Woo
Goh Choon Phong
Chief Executive Officer
Mak Swee Wah
Executive Vice President Commercial
Regional Vice President Americas
Paul Tan Wah Liang
Regional Vice President Europe
Financial Calendar
31 March 2013
Financial Year-End
16 May 2013
Lim Wee Kok
Announcement of 2012-13
Regional Vice President North Asia
Annual Results
Executive Vice President Philip Goh Ser Miang
Human Resources and Operations
27 June 2013
Regional Vice President South East Asia
Despatch of Annual Report
Marvin Tan Meng Hung
Subhas Menon
Acting Senior Vice President Cabin Crew
Regional Vice President South West Pacific
Ng Chin Hwee
(from 3 September 2012)
Lee Lik Hsin
Casey Ow Yong Fook Wing
Regional Vice President West Asia and Africa
Senior Vice President Corporate Planning
and Circular to Shareholders
25 July 2013
Announcement of 2013-14
First Quarter Results
26 July 2013
Annual General Meeting and Senior Vice President Engineering
Senior Management,
Major Subsidiaries
Chan Hon Chew
William Tan Seng Koon
16 August 2013
Senior Vice President Finance
President and Chief Executive Officer Payment of Final Dividend
SIA Engineering Company Limited
for the Financial Year 2012-13
Mervyn Sirisena
Gerard Yeap Beng Hock
Senior Vice President Flight Operations
Christopher Cheng Kian Hai
Extraordinary General Meeting
(subject to shareholders’ Marvin Tan Meng Hung
approval at AGM)
Chief Executive SilkAir (Singapore) Private Limited
Senior Vice President Human Resources
12 November 2013
(until 2 September 2012)
Announcement of 2013-14
Tan Chik Quee
Leslie Thng Kan Chung
Senior Vice President Information Technology
Chief Executive (from 8 October 2012)
SilkAir (Singapore) Private Limited
Tan Chik Quee
(from 3 September 2012)
Senior Vice President Marketing
Tan Kai Ping
(until 7 October 2012)
President Lee Wen Fen
Singapore Airlines Cargo Pte Ltd
Acting Senior Vice President Marketing Planning
Campbell David McGregor Wilson
(from 1 April 2013)
Chief Executive Officer
Tan Pee Teck
Senior Vice President Product & Services
Chin Yau Seng
Acting Senior Vice President Sales & Marketing
(from 8 October 2012)
Scoot Pte Ltd
Second Quarter and Half-Year Results
014
SINGAPORE AIRLINES
SIGNIFICANT EVENTS
2012
April
September
•
•
In-flight Connectivity services are launched on 14
aircraft in the fleet, including all five Airbus A340-500s,
as part of a US$50 million programme to bring Internet
and mobile data services to customers, even when
flying at 35,000ft. The technology will be progressively
rolled out across all of SIA’s long-haul Airbus
A380-800, A340-500 and Boeing 777-300ER aircraft.
•
A major agreement, valued at nearly US$400 million,
is signed with Panasonic Avionics for advanced in-flight
entertainment and communications (IFEC) systems for
more than 40 new aircraft on firm order with Airbus and
Boeing. Singapore Airlines will be the launch customer
for Panasonic Avionics’ next-generation eX3 system for
the A350s, as well as the first to deliver eX3 features on
the B777-300ERs.
Singapore Airlines bids farewell to Boeing 747 passenger
fleet on 6 April with special commemorative flights SQ747 and SQ748 - between Singapore and Hong Kong.
May
•
A joint venture agreement is signed with Scandinavian
Airlines on 11 May to allow both Star Alliance carriers
to go beyond existing codeshare ties to include the
co-ordination of flight schedules, joint sales activities
and enhanced network connectivity between Singapore
and Scandinavia.
June
•
All three of Singapore Airlines’ daily services to London
are now operated with the Airbus A380.
October
July
•
Singapore Airlines and SilkAir undergo a smooth
transition to a new reservations system.
•
Singapore Airlines agrees to a firm order valued at
US$7.5 billion for five more A380s and another 20
A350s for additional capacity growth and fleet renewal.
As part of the deal, Airbus agrees to acquire SIA’s five
A340-500s, which will be removed from service in the
fourth quarter of the 2013 calendar year.
•
Singapore Airlines acquires a 10 per cent stake in
Virgin Australia through a placement of new shares by
Virgin Australia Holdings for a total consideration of
A$105.3 million.
•
A fourth daily flight between Singapore and London
Heathrow is introduced. The late-night departure from
Singapore is operated with a B777-300ER.
•
Daily services to Yangon are launched to cater to rapidly
growing demand for travel to Myanmar. Together with
regional subsidiary SilkAir, the SIA Group will serve
Yangon with 16 weekly flights.
August
•
•
The Airline announces the appointment of two worldrenowned design firms - BMW Group subsidiary
DesignworksUSA as well as UK and Singapore-based
James Park Associates - to help develop the next
generation of in-flight cabin products that will be
introduced from the second half of 2013.
Renowned architectural and interior design firm
ONG&ONG is appointed to develop a new design
concept to be applied to all of the Airline’s airport
lounges worldwide. The appointment is part of a more
than $20 million investment programme in SilverKris
Lounges for the next five years intended to enhance the
travel experience of our customers.
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ANNUAL REPORT 2012/13
2013
January
•
Services to Abu Dhabi in the UAE and Athens in Greece
are suspended as a result of the sustained weak
performance of both routes. The last flights to both cities
depart Singapore on 26 October.
•
Italian star chef Carlo Cracco is named the newest member
of the Singapore Airlines International Culinary Panel (ICP).
November
•
Singapore Airlines expands its codeshare agreement
with Virgin Australia to all of Virgin Australia’s domestic
destinations, offering SIA customers access to 32
Australian cities.
•
Agreements with six tourism organisations in Australia
are signed, in line with the Airline’s ongoing efforts to
promote tourism to the country. The agreements are for
a period of between two and four years, with the total
investment for the financial year amounting to more
than A$5 million.
•
Singapore Airlines signs a codeshare agreement with
Aegean Airlines to enable SIA customers to fly to the
Greek cities of Athens and Thessaloniki.
•
The Airline raises $427,000 for Singapore’s Community
Chest. A pair of limited edition female and male panda
toy collectibles clad in the signature SIA batik motif was
produced by the Airline for the initiative.
December
•
Singapore Airlines agrees to sell its 49 per cent stake
in Virgin Atlantic Ltd to Delta Air Lines. Under the
agreement, Delta will pay US$360 million in cash for
SIA’s entire shareholding in the UK-based airline group.
•
The Airline embarks on a codeshare agreement with Virgin
America on flights serving Chicago, Fort Lauderdale, Las
Vegas, Palm Springs, Philadelphia, Portland, San Diego,
Seattle and Washington D.C., from SIA’s West Coast
gateway points of Los Angeles and San Francisco.
•
The first B777-200ER aircraft retrofitted with new longhaul cabin products enters service between Singapore
and Amsterdam. The Airline is investing $95 million
to retrofit a total of 10 B777-200ERs, which will be
deployed to more destinations in Europe and to points
in India, South Africa, Australia and New Zealand.
February
•
Singapore Airlines debuts the brand new Red Eye
Collection Games on KrisWorld - the first time the
iconic console games are offered on any in-flight
entertainment system.
March
•
Services between Singapore and the Danish capital
Copenhagen are increased to five flights per week
from 31 March, from three weekly flights, following
final regulatory approval for a joint venture with
Scandinavian Airlines (SAS).
•
Singapore Airlines and Virgin America announce an
expansion of their codeshare agreement to include a
frequent flyer programme partnership. The tie-up will
enable members of both airlines’ programmes to earn
and redeem miles for travel on both airlines.
016
SINGAPORE AIRLINES
OUR SPECIAL TOUCH
017
ANNUAL REPORT 2012/13
We take a long-term approach to retain our industry-leading
position through constant investment.
018
SINGAPORE AIRLINES
OPERATING REVIEW
The Singapore
Airlines Group
achieved a net profit
attributable to equity
shareholders of
$379 million for the
financial year ended
31 March 2013.
The Year in Review
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 economic conditions.
During the year in review, the Parent Airline expanded its
capacity (in available seat-kilometres) by 4.3 per cent, while
passenger carriage (in revenue passenger kilometres) grew
by a higher 6.8 per cent. Passenger load factor improved by
1.9 percentage points to 79.3 per cent. SIA’s wholly-owned
subsidiary, SilkAir, registered passenger carriage growth
of 16.9 per cent but was unable to match the capacity
expansion of 20.2 per cent. Accordingly, passenger load
factor declined by 2.1 percentage points to 73.6 per cent.
SIA Cargo reduced its cargo capacity (in capacity tonnekilometres) by 5.5 per cent. As carriage (in load tonnekilometres) declined by a higher 6.0 per cent, cargo load
factor dropped by 0.4 percentage point to 63.4 per cent.
Despite the challenging operating environment, the Group
maintained its strategy to grow its overall network, including
through partnerships with other airlines. Compared to 2011,
there was a 41 per cent increase in destinations outside of the
SIA network as a result of codesharing. Airline partnerships
also resulted in growth in the Group’s network in Asia and
Australia. In part due to the Airline’s partnership with Virgin
Australia, the number of flights per week to Australian
destinations has grown by 45 per cent compared to 2010.
Over the same period, SIA’s synergy with SilkAir has helped
to boost the number of flights to China per week by 71 per
cent, while weekly flights to India and Southeast Asia have
expanded by 24 per cent and 27 per cent, respectively. With
greater coordination between SIA and SilkAir in network
planning and sales efforts, the number of flown bookings
with both carriers’ segments increased by 43 per cent
between 2010 and 2012.
Looking ahead, the global economic outlook remains
uncertain with the ongoing weakness in the Eurozone and
sluggish recovery in the United States. Forward passenger
bookings are almost flat and yields are expected to remain
under pressure amid weak economic sentiment. In addition
to high fuel prices, revenues are expected to be further
diluted if key revenue-generating currenices continue to
depreciate against the Singapore dollar.
The Company continuously reviews its network to better
match capacity to demand, and will push ahead with
its strategy of growing its airline partnerships and using
the Group’s portfolio of airlines to tap different market
segments. The Airline continues to focus strongly on
019
ANNUAL REPORT 2012/13
innovation to push boundaries and widen the gap between
SIA and the competition. New products, including seats,
inflight entertainment systems and airport lounges, together
with enhancements to the Airline’s service excellence, are in
the pipeline and will be unveiled in the new financial year.
In addition, the Group’s ongoing fleet renewal programme
aimed at maintaining a young and modern fleet will help
improve fuel efficiency. In the new financial year, SIA
expects to take delivery of six Airbus A330-300s and three
Boeing 777-300ERs, while decommissioning six B777-200s
and five Airbus A340-500s. SilkAir will take delivery of
two Airbus A320-200s and two Boeing 737-800s, and will
decommission two A320-200s.
020
SINGAPORE AIRLINES
OPERATING REVIEW
Network
The year in review saw renewed efforts to align network
capacity with demand as closely as possible amidst a
challenging operating environment, and to capitalise on
growth opportunities.
In light of continued economic difficulties in southern
Europe, frequencies to Milan and Barcelona were reduced
to five times weekly. While Athens services were suspended,
a codeshare agreement with Aegean Airlines allows SIA
customers to continue to travel to Athens via London,
Frankfurt, Milan and Munich. Consequently, Istanbul flights
are no longer linked to Athens.
A fourth daily flight was also introduced to London, while
Singapore-Munich-Manchester frequency was increased from
six times per week to daily. Amsterdam also became the first
destination with the newly retrofitted Boeing 777-200ER
aircraft. Following the conclusion of a landmark joint venture
with Scandinavian Airlines (SAS), services to Copenhagen
were increased from three times per week to five, further
enhancing passenger connectivity to Scandinavia.
In the Asia-Pacific region, services to Mumbai increased
from 19 times per week to 21. A fourth daily service was
also introduced to Perth. Passengers from Europe and West
Asia now have greater connectivity to Adelaide following
the launch of a second window of flights to the Australian
city. With demand growing for travel to Myanmar, the Group
increased capacity on the Yangon route, with Singapore
Airlines’ larger aircraft operating in place of a morning
SilkAir service.
The year also saw the restructuring of services to the Middle
East. With the suspension of flights to Abu Dhabi, new
Singapore-Riyadh-Jeddah flights were launched three times
per week in place of existing services to Riyadh via Dubai
and Jeddah via Abu Dhabi.
The difficult decision to cease non-stop services between
Singapore and Los Angeles and between Singapore and
Newark was also taken. These services will be discontinued
from the fourth quarter of 2013. SIA will continue to
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
adjustments to the network accordingly.
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 A380-800 aircraft and one Airbus A330-300 aircraft,
and the completion of a cabin refresh programme for two
Boeing 777-200ERs. One Boeing 747-400, one B777-300
and three B777-200 aircraft left the operating fleet.
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. Excluding 20 Boeing 787s on firm order
that will be transferred to Scoot to support its growth plans,
Singapore Airlines’ total firm aircraft orders stood at 67 as
at 31 March 2013.
The Singapore Airlines passenger aircraft fleet, as at
31 March 2013, comprised 101 aircraft with an average age
of six years and eight months.
SIA Cargo’s fleet as at 31 March 2013 comprised 12 Boeing
747-400 freighters, with an average age of 11 years and eight
months. The fleet of SilkAir as at 31 March 2013 comprised
16 Airbus A320-200s and six A319-100s, with an average
age of six years and eight months. SilkAir also announced
orders for 54 aircraft - 23 Boeing 737-800s and 31 Boeing
737 MAX 8s – on top of an existing firm order for two
A320s. Deliveries of the new Boeing aircraft are due to
begin in 2014 and continue to 2021, by which time SilkAir’s
fleet will have more than doubled in size.
022
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 Alliance partners Avianca, Copa Airlines, Taca Airlines
and Shenzhen Airlines brought the total number of KrisFlyer’s
airline partners to 31. Seven new brands were also added to
the suite of over 160 global non-airline partners, while the
scope of several existing partnerships was expanded.
In line with a commitment to increase the range of redemption
options available to members, redemption bookings were
introduced for Saver Award flights in Singapore Airlines Suites,
exclusively available on board the Airbus A380. Members
now have the choice and flexibility to redeem all award types
in all cabin classes across the Singapore Airlines network.
A priority is to enhance the accessibility of KrisFlyer services
to members. To this end, redemption booking functionality
was launched on the SQ Mobile app, adding to the KrisFlyer
services already available such as the ability to view
membership account summaries and to extend expiring
miles. More convenience and services will be extended to
members in future app updates.
Building greater member engagement is another key focus.
The design of the members-only e-newsletter has been
revamped to provide relevant and up-to-date Singapore
Airlines and KrisFlyer news and promotions. Throughout the
year, KrisFlyer members also enjoyed several accrual and
redemption promotions, local offers and partner privileges.
023
ANNUAL REPORT 2012/13
Singapore Airlines continues
to introduce its Mobile
Boarding Pass offering at
more airports, subject to
local regulations.
Ground Services
Mobile Boarding Pass
Singapore Airlines continues to introduce its Mobile Boarding
Pass offering at more airports, subject to local regulations.
To date, this service has been introduced at Singapore,
Amsterdam, Auckland, Bangkok, Barcelona, Christchurch,
Copenhagen, Frankfurt, Hong Kong, London, Manchester,
Milan, Munich, Rome, Taipei and Zurich airports.
Eligible passengers departing from these airports (excluding
US-bound flights) are offered the option of a Mobile Boarding
Pass, which is stored conveniently on the customer’s mobile
device and presented for security verification at various
touch-points within airports.
The Airline has also upgraded its airport check-in facilities to
a new generation Departure Control System which leverages
on newer technology to improve customer servicing. The
upgrade started in February 2013 and took approximately
three months to complete.
024
SINGAPORE AIRLINES
OPERATING REVIEW
Inflight Services
Appointment of New International Culinary Panel (ICP) Chef
Singapore Airlines appointed a new International Culinary
Panel (ICP) chef, Carlo Cracco, in October 2012. A highly
regarded master chef, Carlo leads a new generation of
progressive Italian, Western and Continental European
cuisine. His two-Michelin-starred restaurant, Ristorante
Cracco, is among the world’s top dining destinations famed
for its creative takes on classic Italian food. Chef Cracco’s
innovative touch to traditional flavours is showcased
in his epicurean dishes that represent the best of Italy.
Chef Cracco joins a stellar team of eight other international
chefs on the ICP who specially create a unique selection for
customers that enhances the overall inflight dining experience.
Introduction of the Epicurean Gallery
The Epicurean Gallery was launched in May 2012 to
showcase an exquisite range of new dishes specially
designed for Singapore Airlines Suites, First Class and
Business Class customers, highlighting the best of seasonal
produce on selected medium to long-haul flights.
New First Class Chinese Meal Service
– 名家珍馔 (Míng Jiā Zhēn Zhuàn)
Chef Carlo Cracco’s
innovative touch to
traditional flavours is
showcased in his epicurean
dishes that represent the
best of Italy.
In March 2013, a new four-course Chinese fine-dining
meal service, 名家珍馔 (Míng Jiā Zhēn Zhuàn), was
introduced. The service is exclusively available to First
Class customers on Singapore Airlines flights to and from
Beijing and Shanghai.
Translated in English as “treasured culinary creations from
a famed and reputable establishment”, the name highlights
the partnership between renowned master chefs and the
Airline. 名家珍馔 (Míng Jiā Zhēn Zhuàn) is specially created
for Singapore Airlines by acclaimed masterchefs Sam Leong
and Zhu Jun, both of whom are members of our ICP.
025
ANNUAL REPORT 2012/13
名家珍馔 (Míng Jiā Zhēn Zhuàn)
Launch of New Book the Cook dishes from Singapore
Cellars in the Sky Awards 2012
In April 2012, SIA widened its selection of global cuisine
in its Book the Cook meal service for Suites, First Class and
Business Class customers flying out of Singapore, enhancing
the overall range of gourmet main courses to meet today’s
changing and increasingly varied customer preferences.
This included old-time Western-style favourites, healthier
low-fat choices, popular Asian dishes, a comprehensive
spread of iconic local fare from Singapore, and exclusive
creations from our ICP chefs. Customers now have a wider
selection of gastronomical delights to satisfy their palates in
the sky.
SIA won top prizes at the prestigious Business Traveller
Cellars in the Sky awards 2012, recognising the best First
and Business Class wines served by airlines worldwide.
The Airline garnered the Best Business Class Cellar award,
while the NV Champagne Charles Heidsieck Brut Reserve
served on board won Best Business Class Sparkling.
The Airline also placed second for Best Business Class Red
with 2007 Bodegas Roda Rioja Reserva DOCa from Spain,
and for Best Overall Wine Cellar.
New Book the Cook dishes from Singapore
026
SINGAPORE AIRLINES
OPERATING REVIEW
TOP puts in place
a developmental
framework for a
performance-based
culture that recognises
and rewards good
performance, against
a vision of achieving
a high-performing,
motivated and
evolving workforce.
People Development
SIA concluded Collective Agreements with ALPA-S (Airline
Pilots Association – Singapore) and SIASU (Singapore
Airlines Staff Union) in April and May 2012, respectively.
New agreements on Re-employment and Profit-Sharing
Bonus were also concluded with ALPA-S, SIASU and AESU
(Air-Transport Executive Staff Union).
The Airline together with SIASU launched a workforce
productivity initiative called “Towards Optimal Productivity”
(TOP) for SIA General Staff in December 2012. TOP puts in
place a developmental framework for a performance-based
culture that recognises and rewards good performance,
against a vision of achieving a high-performing, motivated
and evolving workforce. The three pillars of TOP, namely
“Enhancing Our Performance Management System”,
“Improving the Way We Work” and “Developing Our People”,
and the programmes under each pillar, will enable the Airline
to achieve higher productivity within its staff ranks.
With TOP, the following programmes will be carried out in
the new financial year:
(a) An enhanced and more comprehensive performance
appraisal system which will reward the top performers
with merit awards, promotions and meeting staff
aspirations on faster career progression.
(b) WINS (Workplace Improvement and Innovation Scheme)
which will progressively improve the workplace through
process redesign and reduction of wastage.
(c) QIS (Qualification Incentive Sponsorship) Scheme to
level up the qualifications and skill sets of our staff.
Training for all frontline staff and service partners worldwide
on SIA’s new passenger booking and servicing system,
introduced in July 2012, has been completed. Reservations
agents have since been servicing the Airline’s customers
using the new Reservations and Ticketing system, while
airport agents have begun using the new Departure Control
System to check in customers since February 2013.
027
ANNUAL REPORT 2012/13
The Airline continues to provide opportunities for frontline
staff to upgrade their skills and pursue improvement
in productivity, so as to service our customers more
effectively and efficiently. This is done through new training
programmes on customer servicing, as well as in the various
functional areas of sales and marketing, reservations and
ticketing, and airport operations.
games and a tele-match. As part of the Games Fest, an
SIA Charity Day was organised, under which staff raised
funds for programmes under the Community Chest (refer to
Supporting Our Communities on page 31).
For cabin crew, more courses were added to the Workforce
Skills Qualifications (WSQ) framework, namely Training
and Assessment, Leadership and People Management, and
Food and Beverages. These suites of courses, co-funded
by the Workforce Development Agency of Singapore, seek
to improve the overall service levels of cabin crew and
empower them with skills that enhance their personal and
career development.
The SIA Wellness and Health Programme, introduced in
2011, continues to offer health screening sessions and sports
try-out sessions for all staff. Apart from physical wellness, a
series of lunch-time talks covering topics related to mental
and financial wellness were also conducted.
A variety of engagement activities were also carried out
under the SIA Sports and Social Activities Calendar 2012/13.
The highlight and flagship event of this year’s calendar was
the inaugural SIA Games Fest, which took place over the
month of September 2012. Staff across the SIA Group,
organised into teams, competed in nine sporting and social
games, ranging from badminton and football to indoor
In 2012, the Airline won the “Most Attractive Employer Brand”
award in an independent survey by Randstad Singapore of
4,500 members of the public. The Randstad Award is also
conducted in 14 other countries. The Airline was ranked
second in JobsCentral’s Employers of Choice survey 2012.
As at 31 March 2013, the staff strength of SIA Group was
22,546, an increase of 3.3 per cent over the previous year.
Of this, 14,339, or 63.6 per cent, were employed by the
Airline, with 7,784 cabin crew and 2,304 pilots.
028
SINGAPORE AIRLINES
WORKING HAND IN HAND
029
ANNUAL REPORT 2012/13
Singapore Airlines is committed to the sustainable development of
our environment and to supporting the communities in which we operate.
030
SINGAPORE AIRLINES
OPERATING REVIEW
The Airline is
committed to working
in partnership with
government agencies,
biofuel producers
and suppliers, and
other stakeholders, to
overcome the challenge
of producing aviation
biofuels sustainably on
a commercial basis and
at competitive costs.
The Dendrobium Singapore Girl Orchid
Environment
Singapore Airlines takes a long-term view towards the
sustainable development of the environment in which we
operate our air transportation and related businesses.
The Airline is committed to reducing the effects of climate
change brought about by increasing green house gases
(GHG) in the atmosphere. This is achieved through improving
the fuel productivity of our aircraft operations as well as the
introduction of a comprehensive fuel efficiency programme
to mitigate the rising CO2 emission levels. SIA’s passenger
fleet, SIA Cargo freighters and SilkAir aircraft already meet
the stringent 2004 ICAO CAEP/6 Emission Standards for
NOx, which are 12 per cent lower than the previous standard
and will provide a 40 per cent reduction in NOx emissions
compared to the first standard.
SIA also believes that the use of lower-carbon renewable
fuels derived from environmentally and socially sustainable
sources have the potential to meet the industry’s carbon
neutral growth goals as well as lessen the dependence
on fossil fuels. The Group has pledged to advance and
adopt aviation biofuels produced in a sustainable manner
that: do not displace or compete with food crops; do not
threaten biodiversity; do not cause deforestation; minimise
the impact of land, water and energy use; meet or exceed
jet fuel standards; have lower carbon emissions over their
production-lifecycle; and deliver positive socio-economic
impacts. SIA is a member of the Sustainable Aviation Fuel
Users Group (SAFUG), which advances the use of sustainable
biofuels for the aviation industry. In addition, the Airline
is committed to working in partnership with government
agencies, biofuel producers and suppliers, and other
stakeholders, to overcome the challenge of producing
aviation biofuels sustainably on a commercial basis and at
competitive costs.
SIA supports the International Air Transport Association
(IATA)’s Four-Pillar Strategy to promote and drive efforts
towards carbon neutral growth from 2020 onwards
- specifically in the areas of technology, operations,
infrastructure and economic measures.
More of the Airline’s environmental activities and
programmes are available in the inaugural Singapore
Airlines Sustainability Report FY2012/13.
031
ANNUAL REPORT 2012/13
Supporting Our Communities
Singapore Airlines has a longstanding commitment to
contributing and investing in the communities in which we
operate. During the year in review, we continued to support
various educational, arts, sports and heritage institutions in
the form of free and rebated tickets, cash contributions as
well as staff involvement.
In the area of the Arts, we carried on our support for
institutions such as the Singapore Symphony Orchestra
(SSO), the Singapore Dance Theatre (SDT), the Singapore
Lyric Opera (SLO) and the National Arts Council (NAC), among
others. As in previous years, we also contributed towards the
annual “Give A Hand” campaign, which aims to raise funds
for various beneficiaries under the care of the Community
Chest, a non-profit organisation that channels funds to assist
the less advantaged in the community.
Through a fundraising event in September 2012, SIA also
raised more than $400,000 for Community Chest with a pair
of limited edition female and male panda toy collectibles
which were clad in SIA’s signature batik motif. The funds will
be used to support programmes that benefit children with
special needs.
In the educational sector, Singapore Airlines contributed
to the JY Pillay Global-Asia Programme, which aims to
raise local levels of research and fieldwork, as well as the
Lee Kuan Yew Fund for Bilingualism to spearhead initiatives
teaching children their Mother Tongue and English.
The Airline also maintained our partnership with the Salvation
Army Singapore, donating items left behind by customers
and uncollected for more than four months to be re-sold at
Family Thrift Stores. Funds raised go towards the charity’s
social and community programmes. Between 1 January and
31 December 2012, The Salvation Army collected nearly
$45,000 from the sale of our donated items.
Since August 2010, Singapore Airlines has been the
exclusive airline partner for the Harapan Rainforest Initiative,
a large-scale green project aimed at restoring ecosystems
threatened by deforestation, as well as conserving and
protecting one of the most bio-diverse rainforests in the
world. Our contribution stems from our strong belief that
environmental efforts must focus on making a real and
direct difference to the well-being of our planet, and sustain
our shared environment for future generations.
As a global carrier operating to more than 60 destinations in
over 30 countries, SIA is also actively involved with various
projects and causes in the local communities that we serve.
More details of our community initiatives are available in
our FY2012-13 Sustainability Report.
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SINGAPORE AIRLINES
OPERATING REVIEW
Subsidiaries
SIA Cargo
Singapore Airlines Cargo reported an operating loss of
$167.0 million in the year in review, during which the air
cargo industry was faced with overcapacity amidst weak
economic activity in consumer markets.
SIA Cargo continues to adopt a variable frequency approach
to better match capacity with demand for its freighter network.
On a planned basis, services were reduced during lull periods
and additional services were scheduled during periods of
stronger demand. The company also channelled resources to
operate more short and medium-haul services, with increased
frequencies into Indonesia and South West Pacific.
The company also added more destinations to its network
through an agreement with Scoot, a new medium and longhaul low-cost airline based in Singapore, to manage its
bellyhold capacity.
SIA Cargo and China Cargo Airlines operate codeshare
services between Singapore, Bangkok and Shanghai, and
have a range of agreements allowing both airlines to
seamlessly tap into each other’s network and provide more
flexibility to customers. SIA Cargo holds 16 per cent equity
interest in China Cargo Airlines.
Besides widening its network, SIA Cargo is also strengthening
its competencies by pursuing new and high growth business
segments such as temperature-sensitive pharmaceutical cargo.
In addition, the company continues to foster close
partnerships with its key customers. The Global Partnership
Programme, which is running in its 12th year, recognises the
strong strategic relationship with key multinational players
supporting its business in the airfreight forwarding industry.
The Premier Partnership Programme recognises major local
forwarders in key markets and promotes SIA Cargo as the
preferred carrier to achieve bilateral growth. After a successful
inauguration year in 2012, The Premier Partnership
Programme is expanded to 18 key local forwarders across
11 countries for 2013.
As at March 2013, based on the electronic air waybill (e-AWB)
standards, SIA Cargo carried 23 per cent of total shipments to
electronic air waybill (e-AWB) ready destinations. In Singapore,
the adoption rate of e-AWB amongst freight forwarders has
also surpassed expectations, achieving 90 per cent of total
shipments from Singapore to e-AWB ready destinations.
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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 outlook remains uncertain. Demand fluctuations
continue to be volatile. Jet fuel prices remain high. SIA Cargo
will remain flexible in deploying capacity to better match
demand, and maintain cost discipline in this challenging
business environment. The company will continue to grow
its footprint in higher value business segments and also
increase connectivity in emerging markets.
SIA Cargo received the “Award for Excellence (Air Carrier)”
from Air Cargo World during the year in review. It was also
named Best Air Cargo Carrier in Asia and Best Green Service
Provider (Airline) at the Asian Freight & Supply Chain Awards.
SIA Cargo is committed to protecting the environment and
sustainability through environmentally-friendly initiatives
and through partnership with Wildlife Reserves Singapore
to carry live animals on zoo-to-zoo conservation exchange
programmes. SIA Cargo also played a part in a significant
conservation initiative by transporting giant pandas Kai Kai
and Jia Jia on board a Boeing 747-400 freighter specially
operated from Chengdu to Singapore. The special shipment
was in support of Singapore Airlines’ sponsorship of the giant
panda collaborative programme between Wildlife Reserves
Singapore and the China Wildlife Conservation Association.
In addition, the company assisted less privileged children
and supported the arts and heritage through partnerships
with the Singapore Children’s Society and National
Heritage Board.
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SINGAPORE AIRLINES
OPERATING REVIEW
The company’s
extensive
capabilities at
its Singapore
base were further
enhanced during
the year with the
completion of a
state-of-the art
paint hangar.
SIA Engineering Company
SIA Engineering Company’s (SIAEC) firstmover advantage
in aircraft technology and its collaborations with leading
original equipment manufacturers (OEM) have enabled the
company to establish a world-class one-stop engineering
centre in Singapore, offering full maintenance solutions with
OEM support and proprietary IP. The company’s extensive
capabilities at its Singapore base were further enhanced
during the year with the completion of a state-of-the art
paint hangar. Airline customers will benefit from the
efficient turnaround of high-quality aircraft paintwork when
undergoing maintenance in its hangars.
Leveraging on its wide bench of technical expertise and
extensive capabilities in the latest generation aircraft, SIAEC
secured a $166 million contract from Cebu Pacific Air,
covering both its present and new fleet of Airbus A320 aircraft
to be delivered over the next five years. Under the agreement,
SIAEC will provide fleet management and maintenance, repair
and overhaul services in Singapore and at SIAEC’s facility in
the Philippines. This further consolidates SIAEC’s status as one
of the world’s largest fleet management service providers.
The company continued to make inroads into the lucrative
and growing VVIP aircraft market segment with the
completion of two major VVIP cabin reconfiguration projects
in Singapore. With a team of in-house specialists, SIAEC
serves as the main contractor and programme integrator,
working with OEMs, joint ventures and suppliers to
seamlessly engineer, plan, procure, fabricate, install and
certify customised aircraft cabins.
Growth of the heavy maintenance business overseas is
propelled further with the completion of a second hangar at
its Clark facility in the Philippines, and construction of a third
hangar underway. At Hanoi, Vietnam, SIAEC opened another
maintenance facility, bringing its global line maintenance
network to 29 airports in seven countries.
035
ANNUAL REPORT 2012/13
SilkAir
SilkAir closed the year in review with a profit after taxation
of $81 million, a decrease of 4.9 per cent compared to
the previous financial year. The airline carried a total of
3.3 million passengers during the year, an improvement
of 8.7 per cent. With capacity growth outpacing passenger
carriage, passenger load factor declined by 2.1 percentage
points to 73.6 per cent.
Three new points were added to the SilkAir network
during the financial year in review – Wuhan, Hanoi and
Visakhapatnam - increasing the airline’s network to 42
destinations in 12 countries.
SilkAir launched thrice-weekly flights to Wuhan in China’s
Hubei province, on 24 April 2012. Wuhan is SilkAir’s seventh
destination in China, after Changsha, Chengdu, Chongqing,
Kunming, Shenzhen and Xiamen.
Flights to Hanoi, the capital of Vietnam, began on 5 June
2012. Hanoi is the airline’s second destination in Vietnam,
after Danang. The thrice-weekly flights complement
Singapore Airlines’ daily services to the city, to offer
passengers a total of 10 round-trip services a week.
Direct flights to Visakhapatnam were launched on
28 October 2012. With the introduction of the thrice-weekly
services, SilkAir became the first airline to provide nonstop international air connectivity from this port city on the
southeast coast of India.
In addition to the new destinations, capacity to a number of
existing destinations such as Chiang Mai, Hyderabad and
Wuhan was increased to meet growing demand. The airline
also worked actively with partners to operate charters,
including to Dili in Timor Leste.
During the year in review, SilkAir witnessed a change in
leadership with the appointment of Mr Leslie Thng as Chief
Executive on 3 September 2012. Mr Thng, formerly Vice
President Network Planning for Singapore Airlines, took over
from Mr Marvin Tan, who returned to the parent company
as Acting Senior Vice President Cabin Crew. Mr Thng joined
SilkAir as a Board Director on 1 April 2012 and has been
with SIA for more than 13 years, during which time he has
held positions in head office as well as overseas.
On the marketing front, SilkAir embarked on a new brand
campaign, centred around the theme of ‘Feel at Home in the
Air’ to showcase its high level of cabin crew service. Besides
Singapore, the campaign was executed in the key markets of
China, India and Indonesia.
Several SilkAir stations also celebrated their 20th anniversary
during the year in review, including Medan, Cebu and
Kunming, with various corporate and charity events held to
commemorate the significant milestone.
As part of its corporate social responsibility efforts, SilkAir
maintained its partnership with international volunteer
organisation Friends-International (FI), which helps
marginalised urban youth, their families and communities
in developing countries. SilkAir’s Chief Executive and a
group of staff visited FI’s Mith Samlanh centre in Phnom
Penh in September.
SilkAir, together with SIA, also supports Médecins Sans
Frontières (MSF), also known as Doctors Without Borders,
a leading international humanitarian aid organisation that
provides emergency medical assistance to people in distress
and danger. The airline also maintains its support of the Giant
Panda collaborative programme between Wildlife Reserves
Singapore and the China Wildlife Conservation Association.
SilkAir continues to receive accolades for its dedication to
product and service quality. In March 2013, SilkAir was
awarded ‘Regional Airline of the Year’ in the Air Transport
News Award 2013. SilkAir was the first winner of this newly
introduced category. SilkAir was also ranked 3rd in the Top
10 Airlines by Passenger Carriage in the Changi Airline
Awards 2012, presented by Changi Airport Group.
036
SINGAPORE AIRLINES
OPERATING REVIEW
Selected Awards
2012
APR
AUG
Business Traveller Middle East Award
SmartTravelAsia.Com (Hong Kong)
Favourite Airline Poll Results, 2012
Best Asian Airline Serving the Middle East (11th consecutive year)
Best Airline Worldwide
Luxury Travel and Style Magazine (Australia)
Best Business Class
Gold List 2012
Best Cabin Service
Best First Class Airline (6th time)
SEP
MAY
Business Traveller (Asia Pacific) 2012
Randstad Award (Singapore)
Best Airline (21st consecutive year)
Singapore Airlines awarded title of Singapore’s most attractive employer
Best Asia-Pacific Airline
Best Business Class
JUN
Business Traveller Germany
Travel Awards 2011
Best Airline
Brand Finance 2012 (Singapore)
Top 100 Singapore Brands in 2011
Singapore’s “Most Valuable Brand”
JUL
ExecutiveTravel Magazine (USA)
Executive Travel Leading Edge Awards
Best Flight Experience to Asia
AFTA National Travel Industry Award (Australia)
Best Airline International Online (5th consecutive year)
Frequent Business Traveler GlobeRunner Award (USA)
Best Airline in APAC (Asia Pacific)
AB Road (Japan)
Airline Ranking
Overall Best Airline
Best cabin crew service, aircraft/products, inflight meals and ground service
Best Economy Class
Best Airport Lounge (Singapore Airlines Changi Airport)
Guardian/Observer Travel Awards (UK)
Best Business Airline
Best Economy Airline
Condé Nast Traveller (UK)
Favourite Leisure Airline – Long Haul
OCT
SPRING {Service Productivity & Innovation for Growth} (Japan)
4th JCSI (Japanese Customer Satisfaction Index) 2012 survey
SIA ranked 1st in international airlines category (4th consecutive year)
Condé Nast Traveler (USA)
2012 Readers’ Choice Awards
Best Foreign Airline (24 out of 25 years)
World Travel Awards 2012
Asia’s Leading Airline
Asia’s Leading Airline Business Class
Asia’s Leading Airline Lounge
037
ANNUAL REPORT 2012/13
2013
NOV
JAN
Premier Traveler magazine (US)
Wanderlust Travel Award 2013 (UK)
Best Inflight Services in the World
Top Worldwide Airline (6th consecutive year, 11th time in the awards
Airline with Best First Class in the World
12-year history)
Airline with Best Economy Class in the World
FEB
Telegraph Travel Awards (UK)
(Daily Telegraph & Sunday Telegraph Newspapers)
Best Long Haul Airline
DEC
Business Traveler USA 2012
Best First, Business & Economy Class service in the World
Global Traveler (USA)
Best Airline in the World 2012 (9th consecutive year)
Best Airline in Southeast Asia
Cellars in the sky awards (UK)
Best Business Class Sparkling, Charles Heidsieck Brut Reserve, NV, France
Best Business Class cellar
MAR
Fortune Magazine (USA)
Top 50 World’s Most Admired Companies (Ranked 31st)
Traveller’s World Magazine (Germany)
Best Airline (3rd consecutive year)
038
SINGAPORE AIRLINES
STATEMENT ON RISK MANAGEMENT
1
SIA Group Enterprise-Wide Risk Management Framework
1.1 Since 2002, a formalised Risk Management Framework has been implemented across the Group under which
risks are identified, evaluated and controlled on a coordinated and integrated basis. Details of the key elements
of this Framework can be found on singaporeair.com.
2
Highlights of Significant Risk Management Activities
2.1 Operational changes. During the year under review, the core proprietary-owned IT System used for reservations
was upgraded to a new community-based reservations platform hosted by an external provider that is concurrently
used by multiple airlines. SIA business units put in place and tested contingency plans to address various risks
that had the potential to affect the success of the cutover project.
2.2 New global risk. In view of the emergence of a novel corona virus, the Group refreshed its Pandemic Response
Plan and ensured that it is updated.
2.3 New legislation. In addition to monitoring ongoing compliance with existing laws and regulations, the Group
initiated risk reviews to ensure compliance with new legislation enacted in Singapore relating to Personal Data
Protection, which is expected to come into force in 2014.
2.4 Test/Simulation Programme for Ongoing Risk Responses. As part of the Group’s ongoing test/simulation
programme, a Crisis Management Exercise was carried out to test responses and capability to manage a crisis
event occurring overseas. In addition, the alternate site for a core control centre was activated and used,
demonstrating its readiness in functionality. Other tests of business continuity plans were also conducted and
independently verified.
2.5 Reviews and Assurances of Risk Management Implementation. Pursuant to the Group’s Annual Risk Management
Review, significant and key risks were reported and reviewed at various levels, including at Board Committee
levels. Company and Group Risk Management Committee(s) carried out reviews of key risks identified and the
corresponding controls that were put in place. Written assurances regarding implementation of risk management
were provided by Business Unit Heads to the Risk Committees, and Group CEO and Senior Vice President Finance
provided corresponding written assurances to the Board Safety & Risk Committee.
2.6 Risk Governance/Oversight. As part of the Board’s risk governance responsibilities, the Board Safety & Risk
Committee performed risk oversight reviews to ensure there was evidence that the risk management system was
in place and effective, and also carried out reviews of specific significant risks and controls.
3
Board of Directors’ Comments on the Practice of Risk Management In Singapore Airlines
3.1 Having reviewed the risk management practices and activities of Singapore Airlines, the Board of Directors has
not found anything to suggest that risks, which the Group considers relevant and material to its operations, are
not being satisfactorily managed.
039
ANNUAL REPORT 2012/13
CORPORATE GOVERNANCE REPORT
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, underpinned by strong internal controls and risk
management systems.
This Report sets out the Company’s corporate governance processes, with specific reference to the guidelines of the Code of
Corporate Governance issued by the Ministry of Finance in Singapore in July 2005 (“the Code”) 1.
The Board’s Conduct of Affairs, Board Composition and Guidance, Chairman and Chief Executive Officer
(Principles 1 to 3)
The Board’s principal functions include charting the Group’s strategic direction, reviewing and approving annual budgets,
financial plans and monitoring the Group’s performance; approving major acquisitions and fund-raising exercises; and ensuring
the Group’s compliance with all laws and regulations as may be relevant to the business.
The Board currently comprises the following members:
Position held
Name of Director
on the Board
Date of first
appointment
to the Board
Date of last
re-election
as Director
Stephen Lee Ching Yen
Chairman
26 April 2004
29 July 2011
Goh Choon Phong
Director
1 October 2010
29 July 2011
William Fung Kwok Lun
Director
1 December 2009
26 July 2012
Euleen Goh Yiu Kiang
Director
1 September 2006
29 July 2011
Christina Ong
Director
1 September 2007
26 July 2012
Helmut Gunter Wilhelm Panke
Director
1 September 2009
26 July 2012
Jackson Peter Tai
Director
1 September 2011
26 July 2012
Lucien Wong Yuen Kuai
Director
1 September 2007
29 July 2011
Hsieh Tsun-yan
Director
1 September 2012
NA
Gautam Banerjee
Director
1 January 2013
NA
Nature of
Appointment
Non-executive/
Independent
Executive/NonIndependent
Non-executive/
Independent
Non-executive/
Independent
Non-executive/
Independent
Non-executive/
Independent
Non-executive/
Independent
Non-executive/
Non-Independent
Non-executive/
Independent
Non-executive/
Independent
Note: Mr David Michael Gonski retired on 1 August 2012
The Board currently comprises ten Directors. The size and composition of the Board are reviewed from time to time, taking into
account the scope and nature of operations of the Company, to ensure that the size of the Board is adequate to provide for a
diversity of views, facilitate effective decision-making, and that the Board has an appropriate balance of executive, independent
and non-independent Directors. The Directors come from diverse backgrounds with varied expertise in finance, legal, industry,
business, marketing and management fields. Their profiles are found on pages 54 to 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 relating to financial years commencing from 1 November 2012. The revised Code will apply to the
SIA 2014 Annual Report.
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SINGAPORE AIRLINES
CORPORATE GOVERNANCE REPORT
There is a strong independent element in the Board, with the Nominating Committee considering eight out of ten directors
to be independent from Management and the Company’s substantial shareholder, Temasek Holdings (Private) Limited
(“Temasek”). Mr Lucien Wong was appointed Director on the board of Temasek on 1 March 2013; while Mr Goh Choon Phong
is the Chief Executive Officer (“CEO”) of the Company. All Directors have demonstrated objectivity in their deliberations in the
interests of the Company.
Management briefs new Directors on the Company’s business and strategic direction, as well as governance practices.
The Company conducts orientation programmes and site visits for new Directors, and arranges for Directors to be updated on
new laws and regulations, as well as changing commercial risks, as deemed appropriate. Formal letters are issued to newlyappointed Directors upon their appointment, including details of their duties and obligations as Directors.
The Chairman, Mr Stephen Lee, and the CEO, Mr Goh Choon Phong, are not related to each other. There is appropriate
division of responsibilities between the Chairman and the CEO, which ensures a balance of power and authority within the
Company. The Chairman leads the Board and is responsible for its workings and proceedings. He plays a crucial role in
fostering constructive dialogue with shareholders at the Company’s Annual and Extraordinary General meetings. The CEO
heads the Management Committee and oversees the execution of the Company’s corporate and business strategies and
policies, and the conduct of its business.
Board Membership and Performance (Principles 4 and 5)
Five Board Committees have been formed to assist the Board in the execution of its responsibilities, namely:
• the Board Executive Committee;
• the Board Audit Committee;
• the Board Compensation and Industrial Relations Committee;
• the Board Nominating Committee; and
• the Board Safety and Risk Committee.
These Committees have written mandates and operating procedures, which are reviewed periodically.
The Board held four meetings in the financial year. The Board holds separate Strategy Sessions to assist Management
in developing its plans and strategies for the future. The non-executive Directors also set aside time to meet without the
presence of Management to review the latter’s performance in meeting goals and objectives. A table setting out the Board
Members, their memberships on the various Board Committees and attendance at Board and Committee meetings can be
found on pages 52 to 53.
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ANNUAL REPORT 2012/13
Board Executive Committee (“ExCo”)
The members of the ExCo are Mr Stephen Lee (Chairman), Mr Goh Choon Phong, Ms Euleen Goh, and Mr Lucien Wong.
The ExCo oversees the execution by Management of the overall strategy, policies, directions and guidelines set by the Board
for the SIA Group. The ExCo also reviews and makes recommendations to the Board on the annual operating and capital
budgets and matters relating to the Group’s wholly-owned subsidiaries. The ExCo is authorised to approve transactions
beyond a designated materiality threshold and to make decisions on routine financial, operational and administrative
matters. The ExCo also functions as the Share Buy Back Committee of the Company.
Board Audit Committee (“AC”)
The Board Audit Committee (AC) comprised Ms Euleen Goh (Chairperson), Mr David Gonski (until 31 July 2012),
Dr William Fung, Mr Jackson Tai, Mr Hsieh Tsun-yan (from 1 September 2012) and Mr Gautam Banerjee (from 1 January
2013). All the AC members are independent Directors. The role and responsibilities of the AC are described in the section on
“Board Audit Committee Activities” (Principle 11) as shown below.
Board Safety and Risk Committee (“BSRC”)
The members of the BSRC are Dr Helmut Panke (Chairman), Mrs Christina Ong and Mr Lucien Wong. The functions of the
BSRC include ensuring that systems and programmes in the Group comply with regulatory requirements and accord with
the best practices of the aviation industry; reviewing regular reports on safety performance; reviewing accident investigation
findings and recommendations; and advising Management and reporting to the Board on safety issues.
The BSRC also oversees the risk governance framework and risk management system, including reviewing key risks and
controls put in place by Management.
Board Nominating Committee (“NC”)
The members of the NC during FY2012-13 were Mr Lucien Wong (Chairman), Mr Stephen Lee and Mrs Christina Ong.
In compliance with the recommendations of the Code on independence of directors, the Board re-designated Mr Wong as a
non-independent director after his appointment on the Temasek board. Accordingly, Mr Lee was appointed NC Chairman to
replace Mr Wong with effect from 1 April 2013. Mr Wong remained as a member of the NC.
The NC’s functions include considering and making recommendations to the Board concerning the appointment and
re-election of Directors, and determining the independence of the Directors. The NC’s recommendations are based on a
review of the range of expertise, skills and attributes of current Board members and the needs of the Board, taking into
account the Company’s future business direction, the tenure of service, contribution and commitment of each Board member.
Board rejuvenation is a guiding principle in determining the need for new appointees to the Board.
With regard to the selection of new Directors, the NC evaluates the balance of skills, knowledge and experience on the
Board and, arising from such evaluation, determines the role and the desirable competencies for a particular appointment to
enhance the existing Board composition. The NC meets with the short-listed Board candidates to assess their suitability and
availability. The NC then makes recommendations to the Board for approval.
042
SINGAPORE AIRLINES
CORPORATE GOVERNANCE REPORT
Newly appointed Directors serve an initial term of 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 is
not three or a multiple of three, then the number nearest to but not less than one-third are required to retire from office.
Retiring Directors are selected on the basis of those who have been longest in office since their last re-election, failing
which they shall be selected by agreement or by lot. The CEO is also subject to re-election in accordance with the Articles of
Association of the Company.
New Directors appointed in the year are subject to retirement and re-election by shareholders at the next Annual General
Meeting after their appointment. All new appointments and re-elections require the approval of the Special Member, the
Minister for Finance.
For FY2012-13, the NC had engaged an independent global executive search firm not affiliated to the Company or any of
its Directors, to assist in conducting a formal evaluation of the SIA Board and its Board Committees. The process involved
questionnaires and interviews with Directors. The evaluation confirmed that the SIA Board and its Board Committees were
functioning effectively and performing well, within a highly competitive and challenging environment. The performance of
individual Directors was reviewed by the Chairman and the NC, while the Chairman’s performance was reviewed by the rest
of the Board.
The NC has reviewed the contribution by each Director taking into account their listed company board representations and
other principal commitments. The NC and the Board are of the view that, setting a maximum number of listed company
board representations a Director should have is not meaningful, as the contribution of each Director would depend on their
individual circumstances, including whether they have a full time vocation or other responsibilities. Notwithstanding the
number of listed company board representations and other principal commitments which the Directors held, the NC was of
the view that they were able to devote sufficient time and attention to the affairs of the Company.
The NC’s terms of reference also include the responsibility for reviewing the training and professional development
programmes for the Board.
Board Compensation and Industrial Relations Committee (“BCIRC”)
The BCIRC was chaired by Mr Stephen Lee, and comprised Mr David Gonski (until 31 July 2012), Mr Jackson Tai, Dr Helmut Panke,
Mr Hsieh Tsun-yan (from 1 September 2012) and Mr Gautam Banerjee (from 1 January 2013). All members of the Committee
are non-executive directors.
043
ANNUAL REPORT 2012/13
Arising from the issuance of the revised Code on 2 May 2012, the Board reviewed the definition and examples of nonindependence of Directors in the revised Code. The Board considered the fact that Mr Lee had shown that since his
appointment on the Board, he had exercised independent business judgment in all matters affecting SIA, with a view to
protect the interests of the Company and all shareholders, not just its majority shareholder, Temasek, despite the fact that
he was a member of Temasek’s Advisory Panel. In addition, although Mr Lee has served on the Board beyond nine years, he
has continued to demonstrate strong independence in character and judgement in the discharge of his responsibilities as a
Director of the Company. Accordingly, the Board has re-designated Mr Lee as an independent non-executive Director of SIA.
The BCIRC reviews and recommends for the Board’s approval the general framework of remuneration for the Board and
Relevant Key Management Personnel2. The BCIRC also recommends the specific remuneration packages for each Director
and Relevant Key Management Personnel and administers the Company’s EVA-based Incentive Plan, Performance Share Plan
and Restricted Share Plan for senior executives. The award of shares to senior executives is based on organisational and
individual performance. Professional advice is sought by the BCIRC, as it deems necessary, in the development and execution
of the remuneration plan for the Company’s senior executives. For FY2012-13, Carrots Consulting Pte Ltd was engaged as a
remuneration consultant to provide professional advice on human resource matters. The principal consultant providing such
services was Mr Johan Grundlingh. Carrots Consulting only provides remuneration consulting services to the Company, and
has no other relationship with the Company.
Leadership development and succession planning in the Company remains a key focus for the BCIRC. The Company has
in place an annual review of high potential executives, to ensure an adequate pipeline for succession planning in key
management positions. Such high potential executives will be given exposure to key jobs in the organisation, as part of their
career development.
The Company continues to put much emphasis in maintaining harmonious industrial relations and the BCIRC plays an
important role in providing appropriate guidance to Management in this regard. The Company’s three unions, namely,
ALPA-S representing the pilots, AESU, representing the Administrative Officers, and SIASU, representing the General Staff
(including Cabin Crew), hold regular meetings with Management and Chairman of BCIRC.
Access to Information (Principle 6)
Directors are provided with Board Papers in advance of each Board Meeting, to enable them to be properly informed of
matters to be discussed and/or approved. Board Papers contain both regular items such as reports on 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 the Company Secretary at all times. Directors
can seek independent professional advice if required. Such costs will be borne by the Company.
2
Relevant Key Management Personnel are employees holding the rank of Executive Vice President and above. For FY2012-13, they comprise the
CEO and two Executive Vice Presidents.
044
SINGAPORE AIRLINES
CORPORATE GOVERNANCE REPORT
Remuneration Matters (Principles 7, 8 and 9)
Remuneration Mix
SIA’s remuneration mix for Senior Management comprises fixed and variable components. Variable components comprise
short- and long-term incentives, which are dependent on Group, Company and individual performance. The remuneration mix
aims to provide a good balance between competitiveness with the market, as well as rewards for short- and long-term objectives.
Fixed Component
The fixed component comprises base salary, the Annual Wage Supplement (AWS) and cash allowances. The fixed components
are benchmarked to comparable positions in the market, and reflect the market worth of the positions.
Variable Components
Cash Incentive Plans for CEO and Senior Management
This comprises the following three components:
a. Profit-Sharing Bonus (“PSB”)
The PSB targets are designed to achieve a good balance of both Group financial objectives and the Company’s operating
performance. Payment of the variable bonus is based on the Group and the Company achieving the target levels set for
each of the Key Performance Indicators (“KPIs”) stated below and taking into account individual performance:
•
SIA Group’s Return on Shareholders’ Funds
•
SIA Company’s Operating Profit Margin
•
SIA Company’s Passenger Load Factor
Individual performance objectives aligned to the overall strategic, financial and operational goals of the Company are
set at the beginning of each financial year and are cascaded down to a select group of key Senior Management staff
using Individual Scorecards, creating alignment between the performance of the Group, Company and the individual.
While these performance objectives are different for each executive, they are assessed on the same principles across the
following four broad categories of targets:
•
Financial & Business
•
Customer & Operations
•
People & Organisational Development
•
Strategic Projects
The PSB Payout is capped at three times of monthly base salary based on SIA Group and Company Performance in
respect of the CEO and Relevant Key Management Personnel. After the assessment of the Individual Performance
Scorecards at the end of a performance year, an Individual Performance Rating is determined and is subsequently used
to modify the PSB Payout within the range of 0-150 per cent.
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ANNUAL REPORT 2012/13
b. Economic Value Added (“EVA”)-based Incentive Plan (“EBIP”):
The EBIP rewards for sustainable shareholder value creation over the medium term achieved by growing profits, deploying
capital efficiently and managing the risk profile and risk time horizon of an airline business. A portion of the annual
performance-related bonus of key Senior Management is tied to the EVA achieved by the Group in the year. Under the
plan, one-third of the accumulated EBIP bonus, comprising the EBIP bonus declared in the financial year and the balance
of such bonus brought forward from preceding years (which comprises multiple years of incentive dollars retained in the
EVA bank), is paid out in cash each year. The remaining two-thirds are carried forward in the individual executive’s EBIP
account. Amounts in the EBIP account are at risk because negative EVA will result in a retraction of EBIP bonus earned in
preceding years. This mechanism encourages key Senior Management to work for sustainable profitability and to adopt
strategies that are aligned with the long-term interests of the Group.
In determining the final EBIP payouts, the BCIRC considers overall Group performance and relevant market remuneration
benchmarks.
The rules of the EBIP are subject to review by the BCIRC, which has the discretion, under authority of the Board, to amend
the rules where appropriate and relevant to the business conditions.
c. The Strategic Incentive Plan (“SIP”)
The SIP is an incentive scheme established with the objective of rewarding, motivating and retaining a select group
of key Senior Management staff who shoulder the responsibility for the Group’s strategic direction and futureoriented growth.
Under the SIP, a target bonus is set equal to two times the monthly base salary of the respective Senior Management
staff for meeting strategic KPIs set under the individual performance scorecard. At the end of the financial year, the target
bonus is modified by the incumbent’s performance on the execution of the strategic KPIs and initiatives as assessed at
the sole discretion of the BCIRC. The resultant cash payout can vary between 0-150 per cent of the SIP target bonus.
The maximum SIP bonus payable is three times the individual’s monthly base salary.
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SINGAPORE AIRLINES
CORPORATE GOVERNANCE REPORT
Share Incentive Plans
i. The SIA Performance Share Plan (“PSP”)
The PSP is a share-based incentive scheme established with the objective of rewarding, motivating and retaining a select
group of key Senior Management staff who shoulder the responsibility for the Group’s performance and who are able
to drive the growth of the Group through innovation, creativity and superior performance. Awards under the PSP are
performance-based, with stretched targets.
Under the PSP, an initial award is made in the form of rights to shares, provided performance targets are met. Annual
awards are made based on strategic contribution of Senior Management staff. The final award, which can vary between
0-200 per cent of the initial award, depends on stretched value-aligned performance targets. They are based on absolute
and relative Total Shareholder Return (“TSR”), meeting targets over the performance period of three financial years.
The relative TSR is based on outperformance of a selected peer group of leading full service carriers. The absolute
TSR is based on outperformance against Cost of Equity hurdle. The above performance measures are selected as key
measurements of wealth creation for shareholders.
ii. The SIA Restricted Share Plan (“RSP”)
The RSP is targeted at a broader base of senior executives and enhances the Company’s ability to recruit and retain
talented senior executives, as well as to reward for Group, Company and individual performance. To retain key executives,
an extended vesting period of a further two years is imposed beyond the initial two-year performance period.
Under the RSP, an initial award is made in the form of rights to shares, provided performance conditions are met in
future. Annual grants are made based on individual performance of the key executives selected to participate in the RSP.
Final awards may vary between 0-150 per cent of the initial award, depending on the extent to which targets based on
Group and Company EBITDAR Margin and Group and Company Staff Productivity are met. The performance measures
are selected as they are key drivers of shareholder value and are aligned to the Group and the Company’s business
objectives. The Final award is subject to extended vesting, with 50 per cent of the Final award paid out at the end of the
two-year performance period, and the rest paid out equally over the next two years.
The total number of ordinary shares which may be issued pursuant to awards granted under the RSP and PSP, when
added to the number of new shares issued and issuable in respect of all awards under the RSP and PSP, and all options
under the Employee Share Option Plan (“ESOP”), shall not exceed 13 per cent of the issued ordinary share capital of
the Company. In addition, the maximum number of new shares that can be issued pursuant to awards granted under
the RSP and PSP in the period between the current Annual General Meeting (“AGM”) to the next AGM shall not exceed
0.75 per cent of the total number of issued ordinary shares in the capital of the Company.
Details of the PSP, RSP and ESOP can be found on pages 83 to 86 of the Report by the Board of Directors.
Pay-for-Performance Alignment
In performing the duties as required under its BCIRC Charter, the BCIRC ensures that remuneration paid to the CEO
and Key Management Personnel is strongly linked to the achievement of business and individual performance targets.
The performance targets as determined by the BCIRC are set at realistic yet stretched levels each year to motivate a high
degree of business performance with emphasis on both short- and long-term quantifiable objectives.
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ANNUAL REPORT 2012/13
Directors’ Fees
The Directors’ fees paid in FY2012-13 amounted to $1,529,500 [FY2011-12: $1,469,000] and were based on the following rates:
Rates ($)
Board Retainers
Board Member
Chairman
80,000
160,000
Committee Retainers
Chairman of Executive Committee and Audit Committee
Chairman of other Board Committees, Member of
Executive Committee and Audit Committee Member of other Board Committees
50,000
Attendance Fees
Home – City
In – Region
Out – Region
Teleconference – normal hours
Teleconference – odd hours
5,000
10,000
20,000
1,000
2,000
35,000
20,000
Disclosure on Remuneration
The following table shows the composition of the remuneration of Directors.
Directors
Fee
$
Salary
$
Stephen Lee Ching Yen
William Fung Kwok Lun
Euleen Goh Yiu Kiang
David Michael Gonski
Christina Ong Helmut G W Panke
Jackson Peter Tai
Lucien Wong Yuen Kuai
Hsieh Tsun-yan
Gautam Banerjee
265,000
155,000
185,000
65,000
140,000
215,000
215,000
167,000
83,750
38,750
-
-
-
-
-
-
-
-
-
-
Bonuses1
$
-
-
-
-
-
-
-
-
-
-
Shares2
$
-
-
-
-
-
-
-
-
-
-
Goh Choon Phong4
-
999,600 499,933 1,010,220 Benefits3
$
Total
$
11,042
1,566
-
657
-
-
2,172
1,687
-
391
276,042
156,566
185,000
65,657
140,000
215,000
217,172
168,687
83,750
39,141
125,272 2,635,025
1
Includes EVA-based incentive plan (EBIP) payment, Profit-Sharing Bonus and Strategic Incentive Plan.
The amount paid in the reporting year is a percentage of the individual’s EVA Bank. See above for additional information on the EBIP.
2
Based on the Fair Values of RSP ($9.36) and PSP ($9.35) granted in FY2012-13.
3
Includes transport and travel benefits provided to Directors.
4
As Chief Executive Officer, Mr Goh Choon Phong does not receive any Director’s fees.
048
SINGAPORE AIRLINES
CORPORATE GOVERNANCE REPORT
There were no employees who were immediate family members of a Director or the CEO, and whose remuneration exceeded
$50,000, during FY2012-13.
Relevant Key Management Personnel4
Fee
%
Salary
%
Bonuses1
%
Mak Swee Wah
-
42
19
Ng Chin Hwee
-
42
19
Shares2
%
Benefits3
%
Total
%
33
6
100
33
6
100
Between $1,250,000 to $1,500,000
1 Includes EVA-based incentive plan (EBIP) payment, Profit-Sharing Bonus and Strategic Incentive Plan.
The amount paid in the reporting year is a percentage of the individual’s EVA Bank. See above for additional information on the EBIP.
2 Based on the Fair Values of RSP ($9.36) and PSP ($9.35) granted in FY2012-13.
3 Includes value of transport and travel benefits provided to employees.
4 The above table reflects the remuneration of the employees who hold the rank of Executive Vice President and above, who are the Relevant Key
Management Personnel of the Company.
For FY2012-13 the aggregate total remuneration paid to the Relevant Key Management Personnel (who are not Directors or
the CEO) amounted to $2,721,391.
For FY2012-13, there were no termination, retirement or post-employment benefits granted to Directors, the CEO and Relevant
Key Management Personnel other than the standard contractual notice period termination payment in lieu of service, and the
post-retirement travel benefits for the CEO and Relevant Key Management Personnel.
Accountability (Principle 10)
The Board, through its announcements of quarterly and full-year results, aims to provide shareholders with a balanced and
understandable assessment of the Company’s performance and prospects. Management provides the Board with monthly
management accounts for the Board’s review.
The Company has clear policies and guidelines for dealings in securities by Directors and employees. The Company imposes
a trading embargo on its Directors and employees from trading in its securities for the period of two weeks prior to the
announcement of quarterly results; and a period of one month prior to the announcement of year-end results. In addition,
Directors and employees are cautioned to observe the insider trading laws at all times.
Board Audit Committee Activities (Principle 11)
The AC’s activities for FY2012-13, in accordance with its responsibilities and duties under its Charter, included the following:
(a) Financial Reporting
The AC reviewed the quarterly and annual financial statements and financial announcements required by the Singapore
Exchange Securities Trading Limited (“SGX-ST”) for recommendation to the Board for approval. The review focused on
changes in accounting policies and practices, major judgemental and risk areas, significant adjustments resulting from
the audit, the going concern assumption, compliance with accounting standards, compliance with SGX-ST and other legal
requirements. The AC keeps itself apprised of changes in accounting policies and guidelines through scheduled regular
updates by the external auditor, of such, in meeting agendas.
049
ANNUAL REPORT 2012/13
(b) External Audit
The AC discussed with the external auditor the audit plan, and the report on the audit of the year-end financial
statements; reviewed the external auditor’s management letter and Management’s responses thereto; and reviewed the
external auditor’s objectivity and independence from Management and the Company. In assessing independence, the AC
reviewed the fees and expenses paid to the external auditor, including fees paid for non-audit services during the year.
The AC is of the opinion that the auditor’s independence has not been compromised.
In addition, the appointment of the external auditor and the audit fee were considered, and recommendations made to
the Board on the selection of the Company’s external auditor.
(c) Internal Audit
The AC reviewed the scope of internal audit work and its audit programmes; reviewed the major findings during the year
and Management’s responses thereto; and ensured the adequacy of the independence and resource sufficiency of the
internal audit function.
(d) Risk Management
The AC reviewed the adequacy and effectiveness of the Group’s material controls, including financial, compliance and
risk management controls, to safeguard shareholders’ investments and the Group’s assets.
The Risk Management processes adopted are also audited periodically by Internal Audit and their adequacy and
effectiveness reported to the AC accordingly.
Annually, a report is submitted by the Risk Management Department to the Board, which provides a comprehensive
review of the risks faced by the Group. The review includes the identification of risks overseen by the main Board and
its various Board Committees, as well as addresses the current assessment and outlook of the various risk factors.
(e) Interested Person Transactions
The AC reviewed interested person transactions to ensure compliance with the SGX-ST Listing Manual and the
Shareholders’ Mandate obtained at the last Annual General Meeting.
(f) Whistle-Blowing
The AC reviewed and was satisfied with the adequacy of the whistle-blowing programme instituted by the Company
through which staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting
or other matters. All whistle-blower reports are reviewed by the AC at its quarterly meetings to ensure independent
investigation and adequate resolution.
(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 to discharge its functions. The AC meets
with the internal and external auditors without the presence of non-audit Management every quarter.
050
SINGAPORE AIRLINES
CORPORATE GOVERNANCE REPORT
Internal Controls and Internal Audit (Principles 12 and 13)
SIA Internal Audit is an independent department that reports directly to the Audit Committee. The department assists the
Committee and the Board by performing regular evaluations on the Group’s internal controls, financial and accounting
matters, compliance, business and financial risk management policies and procedures, and ensuring that internal controls
are adequate to meet the Group’s requirements. SIA Internal Audit is a member of the Singapore Chapter of the Institute of
Internal Auditors (“IIA”) and meets the Standards for the Professional Practice of Internal Auditing set by the IIA.
SIA Internal Audit also performs analyses of data and transactions periodically (continuous monitoring) on selected areas that
are more susceptible to fraud risk.
In relation to audit activities conducted during the financial year, SIA Internal Audit had unfettered access to the Group’s
documents, records, properties and personnel, as well as the AC.
The Control Self Assessment (“CSA”) Programme established since FY2003-04 provides a framework for Management to
obtain assurance on the state of internal controls. The CSA Programme requires operating departments’ management to
review and report annually on the adequacy of their respective units’ control environment to the AC. Internal Audit performed
independent and random reviews during the year to validate the results of these self assessments.
A dedicated Risk Management Department looks into and manages the Group’s risk management policies. The Risk
Management Report can be found on page 38.
The Board had received assurance from the CEO and Senior Vice President Finance on the adequacy and effectiveness of
the Company’s internal control systems, and that the financial records have been properly maintained and the financial
statements give a true and fair view of the Company’s operations and finances.
Based on the internal controls established and maintained by the Group, work performed by the internal and external
auditors, and reviews performed by Management and various Board Committees, the Board, with the concurrence of the AC,
is of the opinion that the Group’s internal controls were adequate as at 31 March 2013 to address financial, operational,
information technology and compliance risks, which the Group considers relevant and material to its operations.
The Board notes that the system of internal controls provides reasonable, but not absolute, assurance that the Group will not
be affected by any event that could be reasonably foreseen as it strives to achieve its business objectives. In this regard, the
Board also notes that no system can provide absolute assurance against the occurrence of material errors, poor judgement
in decision-making, human error, fraud or other irregularities.
051
ANNUAL REPORT 2012/13
Communication with Shareholders (Principles 14 and 15)
Singapore Airlines believes in timely and consistent disclosure of pertinent information to enable a transparent assessment
of the Company’s value. It values dialogue with shareholders, and holds analyst and media briefings when announcing halfyearly and year-end results. Full transcripts of the proceedings are made available on SGXNet and our Company’s website
at www.singaporeair.com/investor.
Additionally, all financial results as well as price sensitive information are released in a timely manner through various
media which include press releases posted on the Company website, and disclosure via SGXNet. 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, corporate data, shareholding information and information on shareholders’ meetings are available
on the Investor Relations website.
The Investor Relations Department meets with analysts and investors on a regular basis, through investor conferences and
roadshows, as well as ad-hoc meetings and teleconferences. Lines of contact such as the investor relations email and hotline
are also maintained for the investing community to reach out to the Company for queries.
The Company’s commitment to corporate transparency and investor relations approach was again recognised by the
investing community. In 2012, Singapore Airlines was inducted into the Hall of Fame in the Most Transparent Company
Award Category at the 13th Investors Choice Awards presented by the Securities Investors Association of Singapore (“SIAS”).
Singapore Airlines received the “Excellence Award” for Transparency having won the Golden Circle Award (an open category
award for overall recognition in transparency excellence across all sectors) for three consecutive years. In addition, the
Company won the Best in Sector-Transport award at the IR Magazine South East Asia Awards 2012.
The Board members always endeavour to attend shareholder meetings where shareholders are given the opportunity to
raise questions and clarify issues they may have, relating to the resolutions to be passed, with the Board. The Chairmen of
the various Board Committees or members of the Board Committees standing in for them, as well as the external auditor,
would be present and available to address questions at these meetings. Minutes of shareholders’ meetings are available on
request by registered shareholders.
To enhance transparency in the voting process, the Company had, since FY2008-09, implemented full poll voting for all the
resolutions tabled at its shareholders’ meetings.
Banking Transaction Procedures
Lenders to SIA are to note that all bank transactions undertaken by any Group Company must be properly authorised,
including the opening of new bank accounts and any proposed credit facilities. Each Group Company has its own approval
limits and procedures for every banking transaction, having regard to the nature of the transaction concerned. These approval
limits and procedures are updated from time to time and are available on request. The bankers of each Group Company
should always verify, in accordance with the verification process set out in the applicable procedures, that the transaction is
properly authorised.
052
SINGAPORE AIRLINES
MEMBERSHIP AND ATTENDANCE OF SINGAPORE AIRLINES LIMITED
BOARD OF DIRECTORS AND BOARD COMMITTEE MEMBERS
Board Executive
Board
Committee
Name of Directors
No. of
meetings
held
No. of
meetings
attended
No. of
meetings
held
No. of meetings
attended
Stephen Lee Ching Yen 4
4
5
5
Goh Choon Phong 4
4
5
5
William Fung Kwok Lun 4
4
-
-
Euleen Goh Yiu Kiang 4
4
5
5
David Michael Gonski (Note 1) 2* 2
-
-
Christina Ong 4
4
-
-
Helmut Gunter Wilhelm Panke 4
4
-
-
Jackson Peter Tai 4
4
-
-
Lucien Wong Yuen Kuai 4
4
5
5
Hsieh Tsun-yan (Note 2) 2* 1
-
-
Gautam Banerjee (Note 3) 1* 1
-
-
* Number of meetings held during Director’s tenure on Board / Committee
Notes:
(1) Retired from the Board on 1 August 2012
(2) Appointed to the Board on 1 September 2012
(3) Appointed to the Board on 1 January 2013
053
ANNUAL REPORT 2012/13
Board Audit Committee
No. of meetings
held
No. of
meetings
attended
-
-
-
-
4
Board Compensation and
Industrial Relations
Committee
No. of
meetings
held
Board
Nominating Committee
No. of
meetings
held
No. of
meetings
attended
4
-
-
-
-
-
-
-
-
4
-
-
-
-
-
-
4
4
-
-
-
-
-
-
2* 2
2* 1
-
-
-
-
-
-
-
-
4
4
4
4
-
-
4
4
4
4
-
-
4
4
4
4
-
-
-
-
-
-
-
-
4
3
4
4
2* 1
2* 1
-
-
-
-
1* 1
1* 1
-
-
-
-
4
No. of
meetings
attended
Board Safety and Risk
Committee
No. of
meetings
held
4
No. of
meetings
attended
4
054
SINGAPORE AIRLINES
FURTHER INFORMATION ON BOARD OF DIRECTORS
STEPHEN LEE CHING YEN, 66
Non-executive and independent Director
Academic and Professional Qualifications:
Master of Business Administration, Northwestern University, Illinois
Date of first appointment as a director:
26 April 2004
Date of last re-election as a director:
29 July 2011
Board committee(s) served on:
Board Executive Committee
Board Compensation and Industrial Relations Committee
Board Nominating Committee
Chairman
Chairman
Chairman
Current Directorships in Other Listed Companies
Organisation/Company
Title
1.
2.
SIA Engineering Company Limited
CapitaLand Limited
Chairman
Director
Other Major Appointments
Organisation/Company
Title 1.
2.
3.
Shanghai Commercial & Savings Bank Ltd, TWN
Great Malaysia Textile Investments Pte Ltd Singapore National Employers Federation
Managing Director
Managing Director
President
Organisation/Company
Title
1.
2
3.
4.
5.
6.
Singapore Labour Foundation Shanghai Commercial Bank Ltd, Hong Kong
COFCO Corporation, China
NTUC Social Capital Co-operative Ltd
SLF Strategic Advisers Private Limited National Wages Council
Director
Director
Director
Director
Director
Member
Others
Directorships/Appointments in the past 3 years
Organisation/Company
Title
1. 2. Baosteel Group Corporation, China
Chinese Development Assistance Council
Director
Board Member
055
ANNUAL REPORT 2012/13
GOH CHOON PHONG, 49
Executive and non-independent Director
Academic and Professional Qualifications:
Master of Science in Electrical Engineering and Computer Science
Bachelor of Science in Computer Science & Engineering
Bachelor of Science in Management Science
Bachelor of Science in Cognitive Science
Massachusetts Institute of Technology
Date of first appointment as a director
1 October 2010
Date of last re-election as a director
29 July 2011
Board committee(s) served on:
Board Executive Committee
Member
Current Directorships in Other Listed Companies
Organisation/Company
Title
1.
SIA Engineering Company Limited
Director
Organisation/Company
Title
1.
2.
Mount Alvernia Hospital
International Air Transport Association
Director
Member, Board of Governors
Others
Directorships/Appointments in the past 3 years
Organisation/Company
Title
1.
SilkAir (Singapore) Private Limited
Chairman
056
SINGAPORE AIRLINES
FURTHER INFORMATION ON BOARD OF DIRECTORS
GAUTAM BANERJEE, 58
Non-executive and independent Director
Academic and Professional Qualifications:
Bachelor of Science in Accounting and Financial Analysis, University of Warwick
Fellow of the Institute of Chartered Accountants, England and Wales
Fellow of the Institute of Chartered Accountants, Singapore
Date of first appointment as a director:
1 January 2013
Date of last re-election as a director:
Not Applicable
Board committee(s) served on:
Board Audit Committee
Board Compensation and Industrial Relations Committee
Member
Member
Current Directorships in Other Listed Companies
Organisation/Company
Title
1.
2. The Straits Trading Company Limited
Piramal Enterprises Limited, India
Director
Director
Other Major Appointments
Organisation/Company
Title
1.
2. 3.
Blackstone Singapore Pte Ltd
Singapore Business Federation
Government of Singapore Investment Corporation Pte Ltd
Chairman
Vice Chairman
Director
Organisation/Company
Title
1.
2.
3.
4.
5.
6.
7.
Singapore International Arbitration Centre
Economic Development Board
EDB Investments Pte Ltd
Singapore Indian Development Association
Nanyang Business School
Yale-NUS College
Indian Heritage Centre
Director
Member
Member
Term Trustee
Member, Advisory Board
Member, Governing Board
Member, Steering Committee
Others
Directorships/Appointments in the past 3 years
Organisation/Company
Title
1.
2.
3.
4.
5.
PricewaterhouseCoopers (PwC) Singapore
Shared Services for Charities Limited
Singapore Arts School Ltd National Heritage Board
Singapore International Foundation
Chairman
Director
Director
Member
Member, Board of Governors
057
ANNUAL REPORT 2012/13
WILLIAM FUNG KWOK LUN, 64
Non-executive and independent Director
Academic and Professional Qualifications:
Master of Business Administration, Harvard Graduate School of Business, Boston
Bachelor of Science in Engineering, Princeton University, New Jersey
Date of first appointment as a director:
1 December 2009
Date of last re-election as a director:
26 July 2012
Board committee(s) served on:
Board Audit Committee
Member
Current Directorships in Other Listed Companies
Organisation/Company
Title
1.
2.
3.
4.
5.
6.
7.
Li & Fung Limited Trinity Limited
Convenience Retail Asia Limited
Shui On Land Limited Sun Hung Kai Properties Limited
VTech Holdings Limited The Hongkong and Shanghai Hotels, Limited
Group Chairman
Deputy Chairman
Director
Director
Director
Director
Director
Directorships/Appointments in the past 3 years
Organisation/Company
Title
1.
The Hongkong and Shanghai Banking Corporation Limited
Deputy Chairman
058
SINGAPORE AIRLINES
FURTHER INFORMATION ON BOARD OF DIRECTORS
EULEEN GOH YIU KIANG, 58
Non-executive and independent Director
Academic and Professional Qualifications:
Member of the following institutions –
Institute of Chartered Accountants in England and Wales, United Kingdom
Chartered Institute of Taxation, United Kingdom
Institute of Certified Public Accountants of Singapore
ifs School of Finance, United Kingdom
Date of first appointment as a director:
1 September 2006
Date of last re-election as a director:
29 July 2011
Board committee(s) served on:
Board Audit Committee
Board Executive Committee
Chairperson
Member
Current Directorships in Other Listed Companies
Organisation/Company
Title
1.
2.
DBS Group Holdings Ltd CapitaLand Limited
Director
Director
Other Major Appointments
1.
2.
Organisation/Company
Title
Singapore International Foundation DBS Bank Ltd
Chairperson, Board of Governors
Director
Organisation/Company
Title
Others
1.
Northlight School Chairperson, Board of Governors
2.
Singapore Chinese Girls’ School
Chairperson
3.
Management Advisory Board of NUS Business School
Member
4.
Singapore Institute of International Affairs Endowment Fund
Trustee
Directorships/Appointments in the past 3 years
Organisation/Company
Title
1.
2.
3.
Accounting Standards Council
Aviva plc
Singapore Exchange Limited
Chairperson
Director
Director
059
ANNUAL REPORT 2012/13
HSIEH TSUN-YAN, 60
Non-executive and independent Director
Academic and Professional Qualifications:
Master of Business Administration, Harvard University
Bachelor of Science in Mechanical Engineering, University of Alberta
Date of first appointment as a director:
1 September 2012
Date of last re-election as a director:
Not Applicable
Board committee(s) served on:
Board Audit Committee
Board Compensation and Industrial Relations Committee
Member
Member
Current Directorships in Other Listed Companies
Organisation/Company
Title
1.
2. 3. Bharti Airtel Limited, India
Manulife Financial Corporation, Canada
Sony Corporation, Japan
Director
Director
Director
Other Major Appointments
Organisation/Company
Title
1.
LinHart Group, Singapore
Chairman
Organisation/Company
Title
Others
1.
Lee Kuan Yew School of Public Policy, Singapore
2.
Institute of Policy Studies Academic Panel, Singapore
3.
World Bank Knowledge Advisory Commission, United States 4.
Singapore International Foundation
5.
National University of Singapore Business School
Provost Chair Professor
Member
Member
Member, Board of Governors
Provost Chair Professor
(practice track) of Management and
Management Advisory Board Member
060
SINGAPORE AIRLINES
FURTHER INFORMATION ON BOARD OF DIRECTORS
CHRISTINA ONG, 65
Non-executive and independent Director
Academic and Professional Qualifications:
Bachelor of Arts in Economics, University of Westminster, London
Date of first appointment as a director: 1 September 2007
Date of last re-election as a director:
26 July 2012
Board committee(s) served on:
Board Nominating Committee
Board Safety and Risk Committee
Member
Member
Major Appointments
Organisation/Company
Title
1.
2. AX 21 Holdings Pte Ltd
Club 21 Pte Ltd
Managing Director
Managing Director
Organisation/Company
Title
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13. National Parks Board
Club 21 Distribution (Singapore) Pte Ltd Club 21 Enterprises (S) Pte Ltd Club 21 Malaysia Sdn Bhd
Como Foundation Inc
Heritage Holdings Pte Ltd
Jomo Private Limited
Kids 21 Pte Ltd
Moco Private Limited
Mogems Services Pte Ltd
Shambhala Yoga Centre Pte Ltd
Viva Foundation for Children with Cancer
Y.S. Fu Holdings (2002) Pte Ltd
Chairperson
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Others
Directorships/Appointments in the past 3 years
Organisation/Company
Title
1.
2.
Heritage Investments Pte Ltd Singapore Health Services Pte Ltd
Director
Director
061
ANNUAL REPORT 2012/13
HELMUT GUNTER WILHELM PANKE, 66
Non-executive and independent Director
Academic and Professional Qualifications:
Doctor in Physics, University of Munich
Date of first appointment as a director:
1 September 2009
Date of last re-election as a director:
26 July 2012
Board committee(s) served on:
Board Safety and Risk Committee
Board Compensation and Industrial Relations Committee
Chairman
Member
Current Directorships in Other Listed Companies
Organisation/Company
Title
1.
2.
3.
Bayer AG
Microsoft Corporation UBS AG
Director
Director
Director
062
SINGAPORE AIRLINES
FURTHER INFORMATION ON BOARD OF DIRECTORS
JACKSON PETER TAI, 62
Non-executive and independent Director
Academic and Professional Qualifications:
Master of Business Administration, Harvard University
Bachelor of Science, Rensselaer Polytechnic Institute
Date of first appointment as a director:
1 September 2011
Date of last re-election as a director:
26 July 2012
Board committee(s) served on:
Board Audit Committee
Board Compensation and Industrial Relations Committee
Member
Member
Current Directorships in Other Listed Companies
Organisation/Company
Title 1.
2.
3.
4.
Bank of China
MasterCard Incorporated
NYSE Euronext
Philips Electronics NV
Director
Director
Director
Director
Organisation/Company
Title
1.
2.
3.
4.
5.
6.
Brookstone Inc
Committee of 100 Board
Merlin USA
Harvard Business School Asia-Pacific Advisory Board
Harvard China Fund Advisory Board
Rensselaer Polytechnic Institute Board of Trustees
Non-Executive Chairman
Director
Director
Member
Member
Trustee
Others
Directorships/Appointments in the past 3 years
Organisation/Company
Title
1.
2.
3.
4.
Bloomberg Asia Pacific Advisory Board
CapitaLand Limited
ING Groep NV Supervisory Board
Cassis International Director
Director
Director
Director
063
ANNUAL REPORT 2012/13
LUCIEN WONG YUEN KUAI, 59
Non-executive and non-independent Director
Academic and Professional Qualifications:
Bachelor of Laws (Honours), University of Singapore
Date of first appointment as a director:
1 September 2007
Date of last re-election as a director:
29 July 2011
Board committee(s) served on:
Board Executive Committee
Board Nominating Committee
Board Safety and Risk Committee
Member
Member
Member
Current Directorships in Other Listed Companies
Organisation/Company
Title
1.
2.
Hap Seng Plantations Holdings Berhad
Singapore Press Holdings Limited
Director
Director
Other Major Appointments
Organisation/Company
Title
1.
2.
3. Allen & Gledhill LLP Maritime and Port Authority of Singapore
Temasek Holdings (Private) Limited
Chairman
Chairman
Director
Organisation/Company
Title
1.
2.
3.
Eastern Development Private Limited
Singapore Health Services Pte Ltd
Singapore Business Federation
Director
Director
Member, Board of Trustees
Others
Directorships/Appointments in the past 3 years
Organisation/Company
Title
1.
2.
3.
4.
5.
6.
Cerebos Pacific Limited
Linklaters Allen & Gledhill Pte Ltd Mapletree Commercial Trust Management Ltd
National University of Singapore
Monetary Authority of Singapore
SingHealth Foundation
Director
Director
Director
Member, Board of Trustees
Board Member
Trustee
FINANCIALS
065
Financial Review
081
089
091
Report by the
Independent
Consolidated Profit
Board of Directors
Auditor’s Report
and Loss Account
092
093
094
100
Consolidated Statement
Statements of
Statements of
Consolidated Statement
of Comprehensive Income
Financial Position
Changes in Equity
of Cash Flows
102
191
192
193
Notes to the
Additional
Quarterly Results
Five-Year Financial
Financial Statements
Information
of the Group
Summary of the Group
195
196
197
198
Ten-Year
The Group
Group Corporate
Information
Statistical Record
Fleet Profile
Structure
on Shareholdings
200
201
Share Price
Notice of Annual
and Turnover
General Meeting
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
14,525
16,000
14,858
15,098
16,000
12,708
12,000
12,000
8,000
8,000
4,000
4,000
0
0
2008-09
•
2009-10
2010-11
2011-12
2012-13
Operating profit $229 million (-$57 million, -19.8%)
Operating Profit ($ million)
2,500
2,500
2,000
2,000
1,500
1,000
1,500
1,271
904
1,000
500
286
229
2011-12
2012-13
63
0
0
2008-09
•
500
2009-10
2010-11
Profit attributable to owners of the Parent $379 million (+$43 million, +12.8%)
Profit Attributable to
Owners of the Parent ($ million)
2,500
2,500
2,000
2,000
1,500
1,500
1,092
1,062
1,000
1,000
500
216
336
379
2011-12
2012-13
0
500
0
2008-09
2009-10
2010-11
066
SINGAPORE AIRLINES
FINANCIAL REVIEW
Performance of the Group
Key Financial Highlights
2012-13
2011-12 % Change
Earnings For The Year ($ million)
Revenue
15,098.2 14,857.8
+
Expenditure
14,869.0 14,571.9
+
Operating profit
229.2
285.9
-
Profit attributable to owners of the Parent
378.9
335.9
+
Per Share Data (cents)
Earnings per share – basic
32.2
28.3
+
Ordinary dividend per share
23.0
20.0
+
Ratios (%)
Return on equity holders’ funds
2.9
2.5
+
Return on total assets
2.0
1.7
+
Group Earnings
1.6
2.0
19.8
12.8
13.8
15.0
0.4 point
0.3 point
During the financial year, air travel and freighter demand continued to be affected by the ongoing weakness in the Eurozone
and sluggish recovery in the United States. Yields were diluted as tactical promotions were launched to boost loads amid
intense competition and key revenue-generating currencies depreciated against SGD. Fuel prices remained high despite the
weak global economic conditions. This had negatively impacted the Group’s operating performance as fuel cost is the largest
cost component, constituting about 40 per cent of the Group’s operating expenditure.
Group revenue grew $240 million (+1.6 per cent) to $15,098 million, mainly from airline operations, as a result of stronger
passenger carriage, albeit at lower yields. This was partially offset by lower cargo revenue from a contraction in both loads and
yields. The Group’s revenue by business segment is shown below:
Airline operations
Cargo operations
Engineering services
Others
Total revenue
2012-13
$ million
2011-12
$ million
12,169.3
2,415.3
470.9
42.7
15,098.2
11,582.3
2,673.6
551.5
50.4
14,857.8
067
ANNUAL REPORT 2012/13
Performance of the Group (continued)
Group Earnings (continued)
Group expenditure increased by $297 million (+2.0 per cent) to $14,869 million, principally from higher staff, fuel and other
variable costs. Staff costs were higher, mainly attributable to annual service increment as well as increase in staff strength.
Fuel cost rose primarily from higher fuel volume uplifted, with partial relief from lower fuel prices and weaker USD against SGD.
The increase in other variable costs, such as passenger costs and aircraft maintenance and overhaul costs, was largely driven
by the capacity expansion during the financial year.
Group Expenditure
Others
18.5%
Passenger Costs
4.7%
39.7%
Fuel Costs
After Hedging
6.8%
Handling Charges
14.5%
Depreciation and
Lease Rentals
15.8%
Staff Costs
1,600
150
1,400
120
1,200
90
1,000
USD/BBL
$ Million
Quarterly Trend of Group Fuel Price
and Fuel Cost (excluding hedging)
60
2011-12
Q1
2011-12
Q2
2011-12
Q3
2011-12
Q4
2012-13
Q1
2012-13
Q2
2012-13
Q3
2012-13
Q4
Consequently, the Group’s operating profit fell $57 million to $229 million for the financial year ended 31 March 2013. Except
for Singapore Airlines (“the Company”), operating performance for all the major companies in the Group deteriorated from
the preceding year. The Company recorded an operating profit of $187 million in the financial year, a slight improvement of
$6 million (+3.7 per cent) from a year ago. Singapore Airlines Cargo (“SIA Cargo”) was loss-making, as it continued to be plagued
by depressed yields amid a weak demand environment. Please refer to the review of the Company and subsidiary companies
for further details.
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 offset by the payment of final dividend of 2011-12
(-$118 million) and payment of 2012-13 interim dividend (-$70 million).
30,000
14
25,000
12
10
20,000
8
15,000
6
10,000
Dollars
$ Million
Group Equity Holders’ Funds, Total Assets
and Net Asset Value (NAV) per Share
4
5,000
2
0
0
2009
2010
2011
2012
2013
Total Group assets increased by $385 million or 1.7 per cent to $22,428 million as at 31 March 2013 mainly due to the
increase in cash and bank balances by $357 million. The higher cash and bank balances arose principally from operational cash
flows, partly reduced by capital expenditure, net of proceeds from sale of aircraft, spares and spare engines. Net asset value per
share was up 1.7 per cent to $11.15.
The Group’s net liquid assetsR1 increased by $145 million to $4,395 million as at 31 March 2013, largely due to higher cash
and bank balances. Total debt to equity ratio remained flat at 0.08 times as at 31 March 2013.
6,000
6,000
5,000
5,000
4,000
4,000
3,000
3,000
2,000
2,000
1,000
1,000
0
0
2009
R1
$ Million
$ Million
Group Net Liquid Assets
2010
2011
2012
2013
Net liquid assets is defined as the sum of cash and bank balances, investments, and net of finance lease commitments, loans and bonds issued.
069
ANNUAL REPORT 2012/13
Performance of the Group (continued)
Dividends
For the financial year ended 31 March 2013, the Board recommends a final dividend of 17 cents per share. Including the
interim dividend of 6 cents per share paid on 26 November 2012, the total dividend for the 2012-13 financial year will be
23 cents per share. This amounts to a payout of approximately $270 million based on the number of issued shares as at
31 March 2013. The total dividend per share of 23 cents translates to a payout ratio of 71.3 per cent, an increase of
1.1 percentage points compared to the 2011-12 payout ratio of 70.2 per cent.
Dividend Payout
80
150
70
R2
90
60
60
Per Cent
Cents
120
50
30
40
0
2008-09
2009-10
2010-11
2011-12
2012-13
Capital Expenditure and Cash Flow of the Group
Capital expenditure was $1,875 million, 14.3 per cent higher than last year. About 98 per cent of the capital spending was on
aircraft, spares and spare engines. Internally generated cash flow of $2,859 million (+4.8 per cent) was 1.52 times of capital
expenditure. The increase in internally generated cash flow was primarily due to cash flow from operations and higher proceeds
from disposal of aircraft, spares and spare engines.
Group Capital Expenditure
4
3
1,600
2
800
1
0
0
2008-09
R2
2009-10
2010-11
2011-12
Excludes 80.0 cents per share special dividend.
2012-13
Times
$ Million
2,400
070
SINGAPORE AIRLINES
FINANCIAL REVIEW
Performance of the Group (continued)
Capital Expenditure and Cash Flow of the Group (continued)
6,000
6,000
4,500
4,500
3,000
3,000
1,500
1,500
0
$ Million
$ Million
Internally Generated Cash Flow
Internally Generated Cash Flow ($ Million)
0
2008-09
2009-10
2010-11
2011-12
2012-13
Group Staff Strength and Productivity
The Group’s staff strength as at 31 March 2013 is as follows:
31 March
Singapore Airlines
SIA Engineering Group
SilkAir
SIA Cargo
Others
2013
2012
% Change
14,319
6,377
1,360
981
594
23,631
13,992
6,166
1,192
992
404
22,746
+
+
+
-
+
+
2012-13
2011-12 % Change
651,093
194,040
659,936
192,960
2.3
3.4
14.1
1.1
47.0 R3
3.9
Average staff productivity is as follows:
Revenue per employee ($)
Value added per employee ($)
-
+
1.3
0.6
40,000
800
30,000
600
20,000
400
10,000
200
$ ‘000
Staff Number
Group Staff Strength and Productivity
Staff Strength
Revenue per Employee ($’000)
0
0
2008-09
R3
2009-10
2010-11
2011-12
Value Added per Employee ($’000)
2012-13
Other subsidiary companies’ staff strength was up 47.0 per cent, mainly due to an increase in Scoot Pte. Ltd.’s staff strength by 204 as it
commenced operations in June 2012.
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
15,098.2 14,857.8
Less: Purchase of goods and services
(10,894.1) (10,750.1)
4,204.1
4,107.7
Add:
Interest income
62.5
50.5
Surplus/(Loss) on disposal of aircraft, spares and spare engines
56.0
(1.4)
Dividends from long-term investments
27.3
18.0
Other non-operating items
11.9
48.8
Share of profits of joint venture companies
96.2
74.7
Share of profits of associated companies
61.5
51.4
Exceptional items
(19.9)
(5.4)
Total value added for distribution
4,499.6
4,344.3
Applied as follows:
To employees:
- Salaries and other staff cost
2,353.3
2,194.4
To government:
- Corporation taxes
40.4
51.4
To suppliers of capital:
- Interim and proposed dividends
270.3
235.9
- Finance charges
42.7
74.3
- Non-controlling interests
62.7
60.9
Retained for future capital requirements:
- Depreciation and amortisation
1,621.6
1,627.4
- Retained profit
108.6
100.0
Total value added
4,499.6
4,344.3
Value added per $ revenue ($)
0.30
0.29
Value added per $ employment cost ($)
1.91
1.98
Value added per $ investment in property, plant and equipment ($)
0.19
0.19
Value added is a measure of wealth created. The statement above shows the Group’s value added and its distribution by way
of payments to employees, government, and to those who have provided capital. It also indicates the portion retained in the
business for future capital requirements.
072
SINGAPORE AIRLINES
FINANCIAL REVIEW
Performance of the Company
Operating Performance
2012-13
Passengers carried (thousand)
Available seat-km (million)
Revenue passenger-km (million)
Passenger load factor (%)
Passenger yield (¢/pkm)
Passenger unit cost (¢/ask)
Passenger breakeven load factor (%)
2011-12 % Change
18,210
17,155
+
118,264.4 113,409.7
+
93,765.6 87,824.0
+
79.3
77.4
+
11.4
11.8
-
9.2
9.2
80.7
78.0
+
6.1
4.3
6.8
1.9 points
3.4
-
2.7 points
Travel sentiment continued to be affected by global economic uncertainty during the financial year. In order to boost travel
demand amid intense competition, tactical promotions were undertaken, pushing passenger carriage growth up by 6.8 per cent,
which outpaced the capacity expansion of 4.3 per cent. As a result, passenger load factor went up by 1.9 percentage points to
79.3 per cent.
Promotional activities and depreciation of major revenue-generating currencies against SGD placed downward pressure on
passenger yields, resulting in a 3.4 per cent year-on-year decline.
Available Seat Capacity,
Passenger Traffic and Load Factor
120,000
85
100,000
83
Million
81
60,000
79
40,000
20,000
77
0
75
2008-09
2009-10
2010-11
2011-12
2012-13
Per Cent
80,000
Available Seat-km (Million)
Revenue Passenger-km (Million)
Passenger Load Factor (%)
073
ANNUAL REPORT 2012/13
Performance of the Company (continued)
Operating Performance (continued)
A review of 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
+ 482
+ 102
+
94
+ 229
+ 148
+ 1,055
+
+
+
+
-
+
8.5
6.7
8.6
7.3
2.0
6.8
+
+
+
+
-
+
7.9
1.3
5.0
6.9
4.2
4.3
Passenger load factor by route region is as follows:
Passenger Load Factor (%)
2012-13
2011-12 % Change points
East Asia
Americas
Europe
South West Pacific
West Asia and Africa
Systemwide
R4
76.8
82.6
80.6
80.6
73.8
79.3
76.4
78.4
78.0
80.3
72.1
77.4
+
+
+
+
+
+
0.4
4.2
2.6
0.3
1.7
1.9
Each route region comprises routes originating from Singapore to final destinations in countries within the region concerned and vice versa.
For 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, Myanmar, Philippines, Thailand, Taiwan and Vietnam. Americas
comprises Brazil and USA. Europe consists of Denmark, England, France, Germany, Greece, Italy, Russia, Spain, Switzerland, The Netherlands and
Turkey. South West Pacific covers Australia and New Zealand. West Asia and Africa are made up of Bangladesh, Egypt, India, Maldives, Saudi
Arabia, South Africa, Sri Lanka and United Arab Emirates.
074
SINGAPORE AIRLINES
FINANCIAL REVIEW
Performance of the Company (continued)
Earnings
2012-13
$ million
Revenue
Expenditure
Operating profit
Finance charges
Interest income
Surplus/(Loss) on disposal of aircraft, spares and spare engines
Dividends from subsidiary and associated companies
Dividends from long-term investments
Other non-operating items
(Loss)/Profit before exceptional items
Exceptional items R5
(Loss)/Profit before taxation
Taxation (Loss)/Profit after taxation
12,387.0
12,199.8
187.2
(36.1)
61.8
72.5
199.8
9.3
(1,176.9)
(682.4)
-
(682.4)
(11.7)
(694.1)
2011-12
$ million % Change
12,070.1
+
2.6
11,889.5
+
2.6
180.6
+
3.7
(65.9)
+
45.2
50.0
+
23.6
(3.8)
n.m.
271.0
-
26.3
3.9
+ 138.5
(18.4)
n.m.
417.4
n.m.
(4.1)
n.m.
413.3
n.m.
(23.1)
+
49.4
390.2
n.m.
n.m. not meaningful
15,000
15,000
12,000
12,000
9,000
9,000
6,000
6,000
3,000
3,000
0
0
2008-09
R5
2009-10
2010-11
2011-12
$ Million
$ Million
Company Revenue and Expenditure
Revenue ($ Million)
Expenditure ($ Million)
2012-13
With regard to an investigation conducted by the South African Competition Commission (“SACC”) concerning price-fixing on certain routes,
a settlement agreement was reached, which included an administrative penalty of ZAR 25 million ($4.1 million). The Competition Tribunal
confirmed the settlement agreement between the Company and the SACC, and the Company has paid the agreed upon administrative penalty
during the financial year.
075
ANNUAL REPORT 2012/13
Performance of the Company (continued)
Revenue
The Company’s revenue increased 2.6 per cent to $12,387 million as follows:
Passenger revenue
Bellyhold revenue from SIA Cargo
Others
Total operating revenue
2012-13
$ million
2011-12
$ million
$ million
Change
%
8,373.6
1,154.7
2,858.7
12,387.0
8,392.0
1,170.0
2,508.1
12,070.1
- 18.4
- 15.3
+ 350.6
+ 316.9
- 0.2
- 1.3
+ 14.0
+ 2.6
The Company’s passenger revenue decreased $18 million (-0.2 per cent) in 2012-13, as a result of:
$ million$ million
6.8% increase in passenger traffic:
+ 567.8
7.3% decrease in passenger yield (excluding fuel surcharge):
Lower local currency yields
- 431.2
Foreign exchange
- 169.3
Change in passenger mix
+ 14.3
- 586.2
Decrease in passenger revenue
- 18.4
The sensitivity of passenger revenue to one percentage point change in passenger load factor and a one percentage change in
passenger yield is as follows:
$ million
1.0% point change in passenger load factor, if yield and seat capacity remain constant
1.0% change in passenger yield, if passenger traffic remains constant
105.6
83.7
A breakdown of passenger revenue by route region and area of original sale is shown below:
By Route Region ($ million)
2012-13
2011-12
% Change By Area of Original Sale R6 ($ million)
2012-13
2011-12
% Change
East Asia
Americas
Europe
South West Pacific
West Asia and Africa
Systemwide
2,570.0
1,638.0
1,868.8
1,524.3
772.5
8,373.6
4,422.9
740.2
1,312.8
1,503.4
394.3
8,373.6
R6
2,482.6
1,677.3
1,885.9
1,517.0
829.2
8,392.0
+
-
-
+
-
-
3.5
2.3
0.9
0.5
6.8
0.2
Each area of original sale comprises countries within a region from which the sale is made.
4,381.6
728.5
1,367.8
1,495.0
419.1
8,392.0
+
+
-
+
-
-
0.9
1.6
4.0
0.6
5.9
0.2
076
SINGAPORE AIRLINES
FINANCIAL REVIEW
Performance of the Company (continued)
Expenditure
The Company’s expenditure increased 2.6 per cent to $12,200 million in 2012-13.
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 and information technology costs R9
Other costs R10
Total
2012-13
$ million
%
4,951.4
1,609.7
1,295.9
860.9
658.0
576.6
576.6
485.8
515.6
83.7
585.6
12,199.8
2011-12
$ million
%
% Change
40.6
13.2
10.6
7.1
5.4
4.7
4.7
4.0
4.2
0.7
4.8
100.0
4,868.8
1,495.4
1,324.6
831.2
595.1
559.7
553.7
510.2
497.8
91.1
561.9
11,889.5
40.9
12.6
11.1
7.0
5.0
4.7
4.7
4.3
4.2
0.8
4.7
100.0
+
+
-
+
+
+
+
-
+
-
+
+
1.7
7.6
2.2
3.6
10.6
3.0
4.1
4.8
3.6
8.1
4.2
2.6
A breakdown of fuel cost is shown below:
2012-13
$ million
2011-12
$ million
Fuel cost (before hedging)
Fuel hedging gain
4,979.1
(27.7)
4,951.4
4,888.7
(19.9)
4,868.8
+
-
+
Change
$ million
90.4
7.8
82.6
Expenditure of fuel before hedging was $90.4 million higher because of:
4.7% increase in volume uplifted from 29.5 million BBL to 30.9 million BBL
1.4% decrease in weighted average fuel price from 132.3 USD/BBL to 130.5 USD/BBL
Weakening of USD against SGD +
-
-
+
$ million
221.8
72.5
58.9
90.4
Staff costs increased $114 million (+7.6 per cent), largely from higher pay and allowances from service increment and increase
in staff strength.
Inflight meals and other passenger costs increased $63 million (+10.6 per cent) mainly due to a 12.0 per cent ($55 million)
increase in inflight meals expense as a result of more passengers carried and higher food costs.
Depreciation dropped $29 million (2.2 per cent) mainly because of lower accelerated depreciationR11 this year. Accelerated
depreciation of $24 million for five A340-500s was taken up in FY2012-13 as compared to $69 million for four B747-400s in
FY2011-12 (-$45 million). This was partially offset by higher derecognition of initial aircraft material cost of $21 million as more
aircraft maintenance jobs were completed this year.
Depreciation included impairment of property, plant and equipment and amortisation of computer software.
Sales costs included commission and incentives, frequent flyer programme cost, computer reservation system booking fees, advertising expenses,
reservation system IT cost and other sales costs.
R9
Communication and information technology costs were for data transmission and contract service fees, hire of computer equipment, maintenance/
rental of software, and information technology contract and professional fees.
R10
Other costs mainly comprised crew expenses, company accommodation cost, foreign exchange revaluation and hedging loss, comprehensive aviation
insurance cost, airport lounge expenses, non-information technology contract and professional fees, expenses incurred to mount non-scheduled
services, aircraft licence fees and recoveries.
R11
As the aircraft are sold before the end of their estimated useful lives and the sales proceeds are below the original residual values, depreciation of the
aircraft was adjusted to reflect the shorter useful lives and lower residual values, in accordance with FRS 16.
R7
R8
077
ANNUAL REPORT 2012/13
Performance of the Company (continued)
Fuel Productivity and Sensitivity Analysis
Fuel productivity as measured by load tonne-km per barrel (ltk/BBL) decreased 0.5 per cent over the previous 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 in the price of fuel of one USD per barrel affects the Company’s annual fuel cost by about $38 million, before accounting
for USD exchange movements, and changes in volume of fuel consumed.
440
440
430
430
420
420
410
410
LTK/BBL
LTK/BBL
Fuel Productivity of Passenger Fleet
400
400
2008-09
2009-10
2010-11
2011-12
2012-13
Finance Charges
In 2012-13, finance charges decreased $30 million or 45.2 per cent, mainly due to the repayment of $900 million fixed rate
note by the Company in December 2011.
Interest Income
Interest income was $12 million or 23.6 per cent higher, largely due to higher interest from the Company’s investment in bonds
and credit-linked notes.
Surplus on Disposal of Aircraft, Spares and Spare Engines
The $73 million gain on disposal of aircraft, spares and spare engines arose mainly from the sale and leaseback of 14 Trent
800 engines and two A380-800 aircraft. Last year’s $4 million loss on disposal of aircraft, spares and spare engines was mainly
from loss on sale of one B747-400 aircraft, partially offset by gain on sale and leaseback of four B777-300 engines and one
A380-800 aircraft.
Other Non-operating Items
Other non-operating items pertained mainly to the impairment loss of $1,169 million recorded on the Company’s investment in
Virgin Atlantic Limited to write down its carrying value to a recoverable value of USD360 million ($447 million).
078
SINGAPORE AIRLINES
FINANCIAL REVIEW
Performance of the Company (continued)
Taxation
There was a net tax expense of $12 million, comprising current tax charge of $87 million and deferred tax credit of $75 million.
As at 31 March 2013, the Company’s deferred taxation account stood at $1,621 million.
Staff Strength and Productivity
The Company’s staff strength as at 31 March 2013 was 14,319, an increase of 327 over last year. The distribution of employee
strength by category and location is as follows:
31 March
2013
2012
% Change
Category
Senior staff (administrative and higher ranking officers)
1,331
1,290
+
Technical crew
2,297
2,345
-
Cabin crew
7,784
7,438
+
Other ground staff
2,907
2,919
-
14,319
13,992
+
Location
Singapore
12,344
12,023
+
East Asia
818
794
+
Europe
387
411
-
South West Pacific
311
305
+
West Asia and Africa
283
278
+
Americas
176
181
-
14,319
13,992
+
3.2
2.0
4.7
0.4
2.3
2.7
3.0
5.8
2.0
1.8
2.8
2.3
The Company’s average staff productivity ratiosR12 are shown below:
Seat capacity per employee (seat-km)
Passenger load carried per employee (tonne-km)
Revenue per employee ($)
Value added per employee ($)
R12
2012-13
2011-12
8,354,366
619,969
875,035
159,593
8,163,082
594,663
868,790
237,472
The Company’s staff productivity ratios were computed based on average staff strength of 14,156 in 2012-13 (2011-12: 13,893).
% Change
+
+
+
-
2.3
4.3
0.7
32.8
079
ANNUAL REPORT 2012/13
Performance of the Subsidiary 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
Total expenditure
Operating profit
Net profit
1,146.7
1,018.6
128.1
270.1
1,169.9
1,040.3
129.6
269.1
-
-
-
+
2.0
2.1
1.2
0.4
SIAEC Group’s revenue was $23 million or 2.0 per cent lower, mainly due to lower fleet management and project revenue
for cabin interior reconfiguration of aircraft. Expenditure reduced by $22 million or 2.1 per cent, in tandem with the lower
revenue. Overheads were $44 million (-12.5 per cent) lower mainly due to a reduction in subcontract costs and drop in
material costs by $5 million (-2.2 per cent) to $214 million with lower usage. This was partially offset by higher staff costs of
$27 million (+5.7 per cent).
As a result, operating profit was $2 million or 1.2 per cent lower at $128 million.
Share of profits from associated and joint venture companies was $2 million or 1.5 per cent higher at $159 million, representing
a contribution of 52.0 per cent to the Group’s pre-tax profits.
Net profit of $270 million for the financial year ended 31 March 2013, was an increase of $1 million or 0.4 per cent over last year.
As at 31 March 2013, SIAEC Group’s total equity of $1,302 million was $48 million or 3.8 per cent higher than at 31 March 2012.
Net asset value per share of $1.18 as at 31 March 2013 was an improvement of 3.4 cents or 3.0 per cent from a year ago.
Basic earnings per share for the Group decreased by 0.1 cent (-0.4 per cent) to 24.5 cents.
SIA Cargo
2012-13
$ million
Total revenue
2,419.6
Total expenditure
2,586.6
Operating loss
(167.0)
Exceptional items
(19.9)
Loss after taxation
(172.3)
2011-12
$ million
% Change
2,679.5
-
2,798.8
-
(119.3)
-
(1.3)
(106.5)
-
n.m. not meaningful
9.7
7.6
40.0
n.m
61.8
080
SINGAPORE AIRLINES
FINANCIAL REVIEW
Performance of the Subsidiary Companies (continued)
SIA Cargo (continued)
SIA Cargo’s revenue declined $260 million (-9.7 per cent) largely due to weaker yields and reduction in loads. Expenditure
decreased $212 million (-7.6 per cent) in tandem with the reduction in capacity. This translated to an operating loss of
$167 million for 2012-13, $48 million worse than a year ago.
In 2012-13, cargo capacity (in capacity tonne kilometres) dropped 5.5 per cent, while overall cargo traffic (in load tonne
kilometres) dropped 6.0 per cent, resulting in a marginal drop of cargo load factor by 0.4 percentage point to 63.4 per cent.
Cargo breakeven load factor however climbed 2.2 percentage points to 69.5 per cent due to weaker yields (-4.3 per cent),
partially offset by lower unit cost (-1.3 per cent).
During the financial year, the exceptional items pertained to provision for penalties and costs agreed between SIA Cargo and
the Australian Competition and Consumer Commission for an amount of AUD12.2 million ($16 million) and the New Zealand
Commerce Commission for an amount of NZD4.4 million ($4 million). The penalties and costs were recommended by the
parties and endorsed by the respective Courts, bringing the Commissions’ air cargo investigations and proceedings 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
Total revenue
Total expenditure
Operating profit
Profit after taxation
2012-13
$ million
2011-12
$ million
846.0
749.3
96.7
80.7
750.8
646.2
104.6
84.9
% Change
+
+
-
-
12.7
16.0
7.6
4.9
SilkAir’s revenue increased by $95 million (+12.7 per cent) to $846 million, from an improvement in load (+15.6 per cent).
The increase in expenditure of $103 million (+16.0 per cent) was primarily due to higher fuel costs. As a result, operating profit
decreased by $8 million (-7.6 per cent) to $97 million.
Yield declined by 2.2 per cent to 150.0 cents/ltk. However, unit cost declined at a faster rate of 2.4 per cent to 89.3 cents/ctk.
Consequently, breakeven load factor improved marginally by 0.1 percentage point to 59.6 per cent.
Profit after taxation decreased by 4.9 per cent to $81 million.
SilkAir’s route network spanned 42 cities in 12 countries. During the year, SilkAir launched new services to Wuhan (China),
Hanoi (Vietnam) and Visakhapatnam (India).
As at 31 March 2013, equity holders’ funds of SilkAir stood at $773 million (+11.5 per cent).
081
ANNUAL REPORT 2012/13
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 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 Fung Kwok Lun (Independent)
Euleen Goh Yiu Kiang (Independent)
Christina Ong (Independent)
Helmut Gunter Wilhelm Panke (Independent)
Jackson Peter Tai (Independent)
Lucien Wong Yuen Kuai (Non Independent)
Hsieh Tsun-yan (Independent) (appointed as director on 1 September 2012)
Gautam Banerjee (Independent) (appointed as director on 1 January 2013)
2 Arrangements to Enable Directors to Acquire Shares and Debentures
Neither at the end of the financial year, nor at any time during that financial year, did there subsist any arrangements to
which the Company is a party, whereby directors might acquire benefits by means of the acquisition of shares or share
options in, or debentures of, the Company or any other body corporate, other than pursuant to the Singapore Airlines
Limited Employee Share Option Plan, the Singapore Airlines Limited Restricted Share Plan and the Singapore Airlines
Limited Performance Share Plan, as disclosed in this report.
3 Directors’ Interests in Shares, Share Options and Debentures
The following directors who held office at the end of the financial year had, according to the register of directors’
shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, interests in the following
shares, share options and debentures of the Company, and of related corporations:
Direct interest Deemed interest
1.4.2012/
1.4.2012/
Date of Date of
Name of Director Appointment
31.3.2013 Appointment 31.3.2013
Interest in Singapore Airlines Limited
Ordinary shares
Stephen Lee Ching Yen
Goh Choon Phong
William Fung Kwok Lun
Euleen Goh Yiu Kiang
Christina Ong
Lucien Wong Yuen Kuai
9,400
82,510
-
3,800
100,000
-
9,400
183,900
-
3,800
100,000
-
-
-
200,000
-
-
58,000
200,000
58,000
Options to subscribe for ordinary shares
Goh Choon Phong
319,275
246,125
-
-
Conditional award of restricted shares (Note 1)
Goh Choon Phong - Base Awards
- Final Awards (Pending Release)
60,371
11,106
84,366
12,206
-
-
-
082
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
Name of Director Appointment
31.3.2013 Appointment 31.3.2013
Conditional award of performance shares (Note 2)
Goh Choon Phong – Base Awards 83,631
140,141
-
-
Award of time-based restricted shares
Goh Choon Phong – Base Awards 105,917
105,917
-
-
Interest in Singapore Telecommunications Limited
Ordinary shares
Stephen Lee Ching Yen
190
Goh Choon Phong
1,610
Euleen Goh Yiu Kiang
21,537
Hsieh Tsun-yan
4,100
Christina Ong
-
Lucien Wong Yuen Kuai
1,680
190
190
190
1,610
-
21,537
-
33,900
35,000
55,000
- 1,000,000 1,000,000
1,680
111,540
1,540
Interest in Neptune Orient Lines Limited
Ordinary shares
Stephen Lee Ching Yen
30,000
30,000
Euleen Goh Yiu Kiang
2,000
2,000
Hsieh Tsun-yan
5,100
-
-
-
-
-
Debentures (Notes)
Hsieh Tsun-yan
250,000
250,000
-
-
Interest in Mapletree Commercial Trust
Units
Lucien Wong Yuen Kuai
-
-
100,000
100,000
Interest in Mapletree Industrial Trust
Units
Lucien Wong Yuen Kuai
289,440
294,333
-
-
Interest in SP AusNet
Ordinary shares
Christina Ong
500,000
575,000
243,000
279,450
Interest in StarHub Ltd
Ordinary shares
Christina Ong
-
-
200,000
-
083
ANNUAL REPORT 2012/13
3 Directors’ Interests in Shares, Share Options and Debentures (continued)
Direct interest Deemed interest
1.4.2012/
1.4.2012/
Date of Date of
Name of Director Appointment
31.3.2013 Appointment 31.3.2013
Interest in Singapore Technologies Engineering Limited
Ordinary shares
Goh Choon Phong
6,000
6,000
Lucien Wong Yuen Kuai
298,000
298,000
-
20,000
-
Notes:
1. The actual number of RSP Final Awards of fully paid ordinary shares will range from 0% to 150% of the Base Awards and
is contingent on the Achievements against Targets over the two-year performance periods relating to the relevant awards.
2. The actual number of PSP Final Awards of fully paid ordinary shares will range from 0% to 200% of the Base Awards
and is contingent on the Achievements against Targets over the three-year performance periods relating to the
relevant awards.
Except as disclosed in this report, no other director who held office at the end of the financial year had interests in shares,
share options or debentures of the Company, or of related corporations, either at the beginning of the financial year, or
date of appointment, if later, or at the end of the financial year.
Between the end of the financial year and 21 April 2013, Mr Goh Choon Phong’s direct interest in the Company increased
to 236,859 shares due to the release of 52,959 shares to him on 1 April 2013, following the vesting of 50% of 105,917
time-based restricted shares awarded in May 2010.
Except as disclosed above, there were no changes in any of the above-mentioned interests between the end of the financial
year and 21 April 2013.
4 Directors’ Contractual Benefits
Except as disclosed in the financial statements, since the end of the previous financial year, no director of the Company has
received or become entitled to receive a benefit by reason of a contract made by the Company or a related company with
the director, or with a firm of which the director is a member, or with a company 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 Compensation & Industrial Relations Committee which administers the ESOP, RSP and
PSP comprises the following directors:
Stephen Lee Ching Yen – Chairman
Helmut Gunter Wilhelm Panke
Jackson Peter Tai
Hsieh Tsun-yan (appointed as director on 1 September 2012)
Gautam Banerjee (appointed as director on 1 January 2013)
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 unissued shares in the Company were outstanding:
Date of grant
1.7.2002 1.7.2003 1.7.2004 1.7.2005 3.7.2006 2.7.2007
1.7.2008 Number of options to subscribe for unissued ordinary shares
Balance at
1.4.2012
Cancelled
Exercised
1,756,432 1,231,448 2,386,273 4,548,216 6,373,040 10,961,915 9,882,649 37,139,973
(822,940) (9,120) (23,751) (71,440) (122,646)
(425,885)
(220,206) (1,695,988)
(933,492) (201,877) (125,873) (213,843) (236,930) -
-
(1,712,015) Balance at
31.3.2013
-
1,020,451 2,236,649 4,262,933
6,013,464 10,536,030 9,662,443 33,731,970
Exercise
price*
$9.81
$7.33 $7.69 $8.27 $9.59 $15.71 $12.32 Exercisable Period
1.7.2003 - 30.6.2012
1.7.2004 - 30.6.2013
1.7.2005 - 30.6.2014
1.7.2006 - 30.6.2015
3.7.2007 - 2.7.2016
2.7.2008 - 1.7.2017
1.7.2009 - 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 of $0.50 in the exercise prices of the share options
outstanding on 2 August 2007. The said Committee approved another $1.71 reduction in the exercise prices of the share options
outstanding on 28 August 2009 following approval by the Company’s shareholders of the dividend in specie of SATS shares on
31 July 2009. The said Committee approved another reduction of $0.80 in the exercise prices of the share options outstanding on
18 August 2011 after the approval by the Company’s shareholders of the declaration of a special dividend of $0.80 per share on
29 July 2011. The exercise prices reflected here are the exercise prices after such adjustments.
The details of options granted to and exercised by directors of the Company:
Aggregate options
granted since
Options commencement
granted during
of scheme to end
financial year
of financial year
Name of participant
under review under review
Goh Choon Phong -
444,075
Aggregate options exercised since
commencement of
scheme to end of
financial year Options
under review
lapsed
197,950
-
Aggregate
options
outstanding
at end of
financial year
under review
246,125
No options have been granted to controlling shareholders or their associates, or parent group directors or employees.
The options granted by the Company do not entitle the holders of the options, by virtue of such holding, to any rights
to participate in any share issue of any other company.
No options have been granted during the financial year as the last grant of the share options under the ESOP was made
in July 2008.
085
ANNUAL REPORT 2012/13
5 Equity Compensation Plans of the Company (continued)
(ii) Restricted Share Plan (“RSP”) and Performance Share Plan (“PSP”)
Details of the RSP and PSP are disclosed in Note 5 to the financial statements.
The RSP and PSP were approved by the shareholders of the Company on 28 July 2005.
Under the RSP and PSP, 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 Committee will
determine an achievement factor which will then be applied to the Base Award to determine the final number of
RSP shares and PSP shares to be awarded at the end of the respective performance periods (“Final Award”). The
achievement factor could range from 0% to 150% for the RSP and from 0% to 200% for the PSP.
Half of the RSP Final Awards of fully paid ordinary shares will be released to the participants upon vesting. The balance
will be released equally over the subsequent two years with fulfilment of service requirements. All the PSP Final Awards
of fully paid ordinary shares will be released to the participants at the end of the three-year performance period. 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 the RSP and PSP.
No employee has received 5% or more of the total number of options or awards granted under the ESOP, RSP and PSP.
The details of the shares awarded under RSP and PSP to directors of the Company are as follows:
1. RSP Base Awards
Aggregate
Base Awards
granted since
Base Awards Base Awards commencement
granted
vested
Balance as at of RSP to end of
during the
during the
31 March
financial year
Name of participant
financial year
financial year
2013
under review
Goh Choon Phong
42,000
18,005
84,366
157,256
2. RSP Final Awards (Pending Release) R1
Aggregate
ordinary shares
released to
participant since
Final Awards Final Awards commencement
granted
released
Balance as at of RSP to end of
during the
during the
31 March
financial year
Name of participant
financial year#
financial year
2013
under review
Goh Choon Phong
17,470
16,370
12,206
56,828
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
Base
Base Awards
Awards Awards granted since
granted
vested commencement
during the
during the
Balance as
of PSP to end of
financial
financial at 31 March
financial year
Name of participant
year
year*
2013
under review
Goh Choon Phong
66,000
9,490
140,141
Aggregate
ordinary shares
released to
participant since
commencement
of PSP to end of
financial year
under review
175,500
44,522
R1
The actual number of RSP Final Awards of fully paid ordinary shares will range from 0% to 150% of the Base Awards and is
contingent on the Achievements against Targets over the two-year performance periods relating to the relevant awards.
R2
The actual number of PSP Final Awards of fully paid ordinary shares will range from 0% to 200% of the Base Awards and is contingent
on the Achievements against Targets over the three-year performance periods relating to the relevant awards.
Final Awards granted during the financial year is determined by applying the achievement factor to the Base Awards that have vested
during the financial year.
*
11,870 PSP Final Awards of SIA ordinary shares were released to Mr Goh Choon Phong pursuant to the vesting of 9,490 PSP Base
Awards during the financial year.
#
(iii) Time-based Restricted Share Plan (“RSP”)
Details of the time-based RSP are disclosed in Note 5 to the financial statements. The time-based RSP awards were
made under the authority of the Board Compensation & Industrial Relations Committee.
The details of the shares awarded under time-based RSP to directors of the Company are as follows:
Aggregate
Awards
granted since
Awards commencement
granted
Awards
of time-based
during the
vested during
Balance as
RSP to end of
financial
the financial
at 31 March
financial year
Name of participant
year
year
2013
under review
Goh Choon Phong
6
-
-
105,917
Aggregate
ordinary shares
released to
participant since
commencement
of time-based
RSP to end of
financial year
under review
105,917
-
Equity Compensation Plans of SIA Engineering Company Limited (Subsidiary Company)
(i) SIA Engineering Company Limited (“SIAEC”) Employee Share Option Plan
At the end of the financial year, options to take up 33,389,446 unissued shares in SIAEC were outstanding. Details and
terms of the options have been disclosed in the Directors’ Report of SIAEC.
(ii) SIAEC RSP and SIAEC PSP
Details and terms of the SIAEC RSP and SIAEC PSP have been disclosed in the Directors’ Report of SIAEC.
087
ANNUAL REPORT 2012/13
7
Audit Committee
At the date of this report, the Audit Committee comprises the following five independent non-executive directors:
Euleen Goh Yiu Kiang (Chairperson)
William Fung Kwok Lun
Jackson Peter Tai
Hsieh Tsun-yan (appointed as director on 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) audit scope, plans and reports of the external and internal auditors;
(iii) effectiveness of material controls, including financial, compliance, information technology and risk management
controls;
(iv) interested person transactions;
(v) whistle-blowing programme instituted by the Company; and
(vi) any material loss of funds, significant computer security incidents and legal cases.
The Audit Committee has recommended to the Board of Directors that Ernst & Young LLP be nominated for re-appointment
as external auditor of the Company at the forthcoming Annual General Meeting.
8
Auditor
Ernst & Young LLP have expressed their willingness to accept re-appointment as auditor.
On behalf of the Board,
STEPHEN LEE CHING YEN
Chairman
GOH CHOON PHONG
Chief Executive Officer
Dated this 16th day of May 2013
088
SINGAPORE AIRLINES
STATEMENT BY THE DIRECTORS PURSUANT TO SECTION 201(15)
We, Stephen Lee Ching Yen and Goh Choon Phong, being two of the directors of Singapore Airlines Limited, do hereby state
that in the opinion of the directors:
(i) the accompanying statements of financial position, consolidated profit and loss account, consolidated statement of
comprehensive income, statements of changes in equity, and consolidated statement of cash flows together with notes
thereto are drawn up 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 2013 and the results, changes in equity and cash flows 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 to believe that the Company will be able to pay its debts as and
when they fall due.
On behalf of the Board,
STEPHEN LEE CHING YEN
Chairman
GOH CHOON PHONG
Chief Executive Officer
Dated this 16th day of May 2013
089
ANNUAL REPORT 2012/13
INDEPENDENT AUDITOR’S REPORT
To the members of Singapore Airlines Limited
Report on the Financial Statements
We have audited the accompanying financial statements of 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 and loss
account, consolidated statement of comprehensive income and consolidated statement of cash flows of the Group for the year
then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with
the provisions of the Singapore Companies Act, Chapter 50 (“the Act”) and Singapore Financial Reporting Standards, and for
devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are
safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are
recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain
accountability of assets.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and the statement of financial position and statement of
changes in equity of the Company are properly drawn up in accordance with the provisions 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
2013 and of the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the year
ended on that date.
090
SINGAPORE AIRLINES
INDEPENDENT AUDITOR’S 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 kept in accordance with the provisions of the Act.
ERNST & YOUNG LLP
Public Accountants and
Certified Public Accountants
Dated this 16th day of May 2013
Singapore
091
ANNUAL 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 15,098.2 14,857.8
EXPENDITURE
Staff costs 5
Fuel costs Depreciation
21
Impairment of property, plant and equipment 21 Amortisation of intangible assets 22 Aircraft maintenance and overhaul costs Commission and incentives Landing, parking and overflying charges Handling charges
Rentals on leased aircraft Material costs Inflight meals Advertising and sales costs Insurance expenses Company accommodation and utilities Other passenger costs Crew expenses Other operating expenses 2,353.3 5,899.4 1,589.1 9.8 22.7 539.3 355.5 687.8 1,006.1 553.6 214.2 543.1 209.3 43.3 115.6 158.4 148.2 420.3 14,869.0 2,194.4
5,803.4
1,588.5
15.8
23.1
463.4
330.9
668.6
1,012.8
573.7
219.0
480.5
201.6
46.8
113.9
139.3
140.8
555.4
14,571.9
OPERATING PROFIT
6
Finance charges
7
Interest income 8
Surplus/(Loss) on disposal of aircraft, spares and spare engines Dividends from long-term investments Other non-operating items
9
Share of profits of joint venture companies 25 Share of profits of associated companies 24
229.2 (42.7) 62.5 56.0 27.3 11.9 96.2 61.5 285.9
(74.3)
50.5
(1.4)
18.0
48.8
74.7
51.4
PROFIT BEFORE EXCEPTIONAL ITEMS EXCEPTIONAL ITEMS 10 PROFIT BEFORE TAXATION TAXATION 11 PROFIT FOR THE FINANCIAL YEAR 501.9 (19.9) 482.0 (40.4) 441.6 453.6
(5.4)
448.2
(51.4)
396.8
PROFIT ATTRIBUTABLE TO:
OWNERS OF THE PARENT NON-CONTROLLING INTERESTS 378.9 62.7 441.6 335.9
60.9
396.8
32.2 31.9 28.3
27.9
BASIC EARNINGS PER SHARE (CENTS) DILUTED EARNINGS PER SHARE (CENTS) 12 12 The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
092
SINGAPORE AIRLINES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For The Financial Year Ended 31 March 2013 (in $ million)
PROFIT FOR THE FINANCIAL YEAR
The Group
2012-13 2011-12
441.6 396.8
(6.6)
4.2 17.3 (0.6)
(2.2)
92.0
0.1 11.7 26.7 (1.1)
18.5
106.6
TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR 468.3 503.4
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
OWNERS OF THE PARENT NON-CONTROLLING INTERESTS 406.5 61.8 468.3 442.9
60.5
503.4
OTHER COMPREHENSIVE INCOME:
Currency translation differences
Available-for-sale financial assets Cash flow hedges Surplus/(Loss) on dilution of interest in an associated company due to
share options exercised Share of other comprehensive income of associated and joint venture companies OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR, NET OF TAX The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
093
ANNUAL REPORT 2012/13
STATEMENTS OF FINANCIAL POSITION
As At 31 March 2013 (In $ million)
The Group
Notes EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT
Share capital 14 Treasury shares 15
Other reserves 16 NON-CONTROLLING INTERESTS TOTAL EQUITY DEFERRED ACCOUNT 17 DEFERRED TAXATION 18 LONG-TERM LIABILITIES 19
PROVISIONS 20 Represented by:
PROPERTY, PLANT AND EQUIPMENT 21
Aircraft, spares and spare engines Land and buildings Others INTANGIBLE ASSETS 22 SUBSIDIARY COMPANIES 23 ASSOCIATED COMPANIES 24 JOINT VENTURE COMPANIES 25 LONG-TERM INVESTMENTS 26 OTHER RECEIVABLES 27 DEFERRED ACCOUNT 17 CURRENT ASSETS
Inventories 28 Trade debtors 29 Deposits and other debtors 30 Prepayments Amounts owing by subsidiary companies 29 Investments 31 Derivative assets 37(a) Cash and bank balances 32 Less: CURRENT LIABILITIES
Sales in advance of carriage Deferred revenue Current tax payable Trade and other creditors 33 Amounts owing to subsidiary companies 33 Finance lease commitments 19 Loans 19 Provisions 20 Derivative liabilities 37(a) NET CURRENT ASSETS 2013 2012 The Company
2013 2012
1,856.1 1,856.1 1,856.1 1,856.1
(269.8) (258.4) (269.8) (258.4)
11,518.4 11,295.7 10,372.3 11,249.2
13,104.7 12,893.4 11,958.6 12,846.9
312.6 294.0
-
13,417.3 13,187.4 11,958.6 12,846.9
146.7 1,951.3 944.5 421.3 16,881.1 224.4 2,029.1 1,018.5 318.6 16,778.0 127.8 1,621.3 803.9 376.1 14,887.7 199.9
1,694.8
807.9
259.1
15,808.6
10,875.6 242.5 1,979.9 13,098.0 218.5 -
554.4 120.8 706.9 213.9 16.1 11,383.5 252.0 1,745.9 13,381.4 158.3 -
543.2 113.2
373.7 215.6 51.7 8,746.8 70.7 1,581.8 10,399.3 159.0 2,030.1 532.5 -
626.8 213.9 -
9,223.9
79.4
1,525.0
10,828.3
111.2
2,038.8
1,701.1
293.7
215.6
33.7
274.9 1,578.4 54.9 103.2 -
349.4 79.1 5,059.6 7,499.5 306.1 1,354.8 46.8 98.5 -
625.1 71.9 4,702.7 7,205.9 192.7 1,080.9 36.6 75.8 189.9 289.4 77.7 4,834.3 6,777.3 221.7
870.2
26.7
74.8
195.2
565.2
57.4
4,450.7
6,461.9
1,434.3 532.5 160.1 3,201.1 -
67.8 5.7 72.3 73.2 5,547.0 1,952.5 16,881.1 1,456.8 497.0 244.4 2,885.4 -
64.8 2.4 35.3 78.9 5,265.0 1,940.9 16,778.0 1,367.7 532.5 130.2 2,510.1 1,219.8 -
-
65.2 25.7 5,851.2 926.1 14,887.7 1,409.5
497.0
186.0
2,210.2
1,525.2
35.1
12.7
5,875.7
586.2
15,808.6
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
094
SINGAPORE AIRLINES
STATEMENTS OF CHANGES IN EQUITY
For The Financial Year Ended 31 March 2013 (in $ million)
The Group
Share
Treasury
Capital
Notes
capital
shares
reserve
Balance at 1 April 2012 1,856.1 (258.4) 99.1 Comprehensive income
Currency translation differences 16(b) -
-
-
Net fair value changes on available-for-sale assets 16(d) -
-
-
Net fair value changes on cash flow hedges -
-
-
Surplus on dilution of interest in an associated
company due to share options exercised -
-
-
Share of other comprehensive income of
associated and joint venture companies -
-
12.5 Other comprehensive income for the financial year -
-
12.5 Profit for the financial year -
-
-
Total comprehensive income for the financial year, net of tax -
-
12.5 Surplus on dilution of interest in subsidiary
companies due to share options exercised -
-
-
Share-based compensation expense 5
-
-
-
Share options and share awards lapsed -
-
-
Purchase of treasury shares 15 -
(37.7) -
Treasury shares reissued pursuant to equity compensation plans 15 -
26.3 (1.3) Dividends 13 -
-
-
Total transactions with owners -
(11.4) (1.3) Balance at 31 March 2013 1,856.1 (269.8) 110.3 Transactions with owners, recorded directly in equity
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
095
ANNUAL REPORT 2012/13
Attributable to Owners of the Parent
Foreign
currency translation
reserve Share-based
compensation
Fair value
General reserve reserve reserve
Total (186.3) 165.9 (5.5) -
-
(47.6) Noncontrolling
interests Total
equity
11,264.6 12,893.4 294.0 13,187.4
-
-
(5.5)
(1.1)
(6.6)
-
4.2 -
4.2 -
4.2
-
-
17.3 -
17.3 -
17.3
-
-
-
0.1 0.1 -
0.1
-
-
(1.0) -
11.5 0.2 11.7
(5.5) -
20.5 0.1 27.6 (0.9) 26.7
-
-
-
378.9 378.9 62.7 441.6
(5.5) -
20.5 379.0 406.5 61.8 468.3
-
(6.8) -
16.3 9.5 13.2 22.7
-
5.4 -
-
5.4 -
5.4
-
(3.4) -
3.4 -
-
-
-
-
-
-
(37.7) -
(37.7)
-
(9.4) -
-
15.6 -
15.6
-
-
-
(188.0) (188.0) (56.4) (244.4)
-
(14.2) -
(168.3) (195.2) (43.2) (238.4)
(191.8) 151.7 (27.1) 11,475.3 13,104.7 312.6 13,417.3
096
SINGAPORE AIRLINES
STATEMENTS OF CHANGES IN EQUITY
For The Financial Year Ended 31 March 2013 (in $ million)
The Group
Share
Treasury
Capital
Notes
capital
shares
reserve
Balance at 1 April 2011 1,832.4 (43.0) 91.8 Comprehensive income
Currency translation differences 16(b) -
-
-
Net fair value changes on available-for-sale assets 16(d) -
-
-
Net fair value changes on cash flow hedges -
-
-
Loss on dilution of interest in an associated
company due to share options exercised -
-
-
Share of other comprehensive income of
associated and joint venture companies -
-
17.9 Other comprehensive income for the financial year -
-
17.9 Profit for the financial year -
-
-
Total comprehensive income for the financial year, net of tax -
-
17.9 Surplus on dilution of interest in subsidiary
companies due to share options exercised -
-
-
Share-based compensation expense 5
-
-
-
14 23.7 -
-
Share options lapsed -
-
-
Purchase of treasury shares 15 -
(272.1) -
Treasury shares reissued pursuant to equity compensation plans 15 -
56.7 (10.6) Dividends 13 -
-
-
Total transactions with owners 23.7 (215.4) (10.6) Balance at 31 March 2012 1,856.1 (258.4) 99.1 Transactions with owners, recorded directly in equity
Share options exercised The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
097
ANNUAL REPORT 2012/13
Attributable to Owners of the Parent
Foreign
currency translation
reserve Share-based
compensation
Fair value
General reserve reserve reserve
Total Noncontrolling
interests Total
equity
(186.1) 172.6 (138.0) 12,474.7 14,204.4 298.4 14,502.8
(0.2) -
-
-
(0.2) (0.4) (0.6)
-
-
(2.2) -
(2.2) -
(2.2)
-
-
92.0 -
92.0 -
92.0
-
-
-
(1.1) (1.1) -
(1.1)
-
-
0.6 -
18.5 -
18.5
(0.2) -
90.4 (1.1) 107.0 (0.4)
106.6
-
-
-
335.9 335.9
60.9 396.8
(0.2) -
90.4 334.8 442.9 60.5 503.4
-
(5.0) -
10.5 5.5 8.4 13.9
-
18.1 -
-
18.1 -
18.1
-
(4.1) -
-
19.6 -
19.6
-
(1.8) -
1.8 -
-
-
-
-
-
-
(272.1) -
(272.1)
-
(13.9) -
-
32.2 -
32.2
-
-
-
(1,557.2) (1,557.2)
(73.3) (1,630.5)
-
(6.7) -
(1,544.9) (1,753.9) (64.9) (1,818.8)
(186.3) 165.9 (47.6) 11,264.6 12,893.4 294.0 13,187.4
098
SINGAPORE AIRLINES
STATEMENTS OF CHANGES IN EQUITY
For The Financial Year Ended 31 March 2013 (In $ million)
The Company
Share-based
Share Treasury Capital compensation
Notes
capital
shares reserve
reserve Balance at 1 April 2012 1,856.1 (258.4) (8.1)
133.7 Fair value
reserve
General
reserve
Total
(9.8) 11,133.4 12,846.9
Comprehensive income
Net fair value changes on
available-for-sale assets 16(d)
-
-
-
-
2.2 -
2.2
Net fair value changes on
cash flow hedges 16(d) -
-
-
-
10.5 -
10.5
Other comprehensive income
for the financial year -
-
-
-
12.7
-
12.7
Loss for the financial year 24 -
-
-
-
-
(694.1) (694.1)
Total comprehensive income
for the financial year, net of tax -
-
-
-
12.7 (694.1) (681.4)
Share-based compensation expense -
-
-
3.2 -
-
3.2
Share options and
share awards lapsed -
-
-
(3.0) -
3.0 -
Purchase of treasury shares 15 -
(37.7) -
-
-
-
(37.7)
Treasury shares reissued pursuant
to equity compensation plans 15 -
26.3 (1.3) (9.4) -
-
15.6
Dividends 13 -
-
-
-
-
(188.0) (188.0)
Total transactions with owners -
(11.4)
(1.3) (9.2) -
(185.0) (206.9)
Balance at 31 March 2013 1,856.1 (269.8) (9.4) 124.5 Transactions with owners,
recorded directly in equity
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
2.9 10,254.3 11,958.6
099
ANNUAL REPORT 2012/13
STATEMENTS OF CHANGES IN EQUITY
For The Financial Year Ended 31 March 2013 (In $ million)
The Company
Share-based
Share Treasury Capital compensation
Notes
capital
shares reserve
reserve Balance at 1 April 2011 1,832.4 (43.0) 2.5 138.5 Fair value
reserve General
reserve Total
(94.2) 12,298.9 14,135.1
Comprehensive income
Net fair value changes on
available-for-sale assets 16(d) -
-
-
-
(0.3) -
(0.3)
Net fair value changes
on cash flow hedges 16(d) -
-
-
-
84.7 -
84.7
Other comprehensive income
for the financial year -
-
-
-
84.4
-
84.4
Profit for the financial year -
-
-
-
-
390.2 390.2
Total comprehensive income
for the financial year, net of tax -
-
-
-
84.4
390.2 474.6
-
-
-
14.7 -
-
14.7
14 23.7 -
-
(4.1) -
-
19.6
Share options lapsed -
-
-
(1.5) -
1.5 -
Purchase of treasury shares 15 -
(272.1) -
-
-
-
(272.1)
Treasury shares reissued pursuant
to equity compensation plans 15 -
56.7 (10.6) (13.9) -
-
32.2
Dividends 13 -
-
-
-
-
(1,557.2) (1,557.2)
Total transactions with owners 23.7 (215.4) (10.6) (4.8) -
(1,555.7) (1,762.8)
Balance at 31 March 2012 1,856.1 Transactions with owners,
recorded directly in equity
Share-based compensation expense Share options exercised (258.4) (8.1) 133.7 The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
(9.8) 11,133.4 12,846.9
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
21 Impairment of property, plant and equipment
21
Amortisation of intangible assets
22 Write-back of impairment of trade debtors
6
Write-down of inventories 28 Income from short-term investments
6
Provisions
20
Share-based compensation expense 5
Exchange differences Amortisation of deferred loss/(gain) on sale and operating leaseback transactions
6
Finance charges 7
Interest income 8
(Surplus)/Loss on disposal of aircraft, spares and spare engines Dividends from long-term investments Other non-operating items 9
Share of profits of joint venture companies 25 Share of profits of associated companies 24
Exceptional items 10 Operating profit before working capital changes 482.0 448.2
1,589.1 9.8 22.7 (8.8) 32.3
(1.7)
168.2
5.4 5.2 3.3
42.7 (62.5) (56.0) (27.3)
(11.9) (96.2) (61.5) 19.9 2,054.7 1,588.5
15.8
23.1
(0.2)
27.3
(1.6)
133.4
18.1
7.2
(18.3)
74.3
(50.5)
1.4
(18.0)
(48.8)
(74.7)
(51.4)
5.4
2,079.2
Increase in trade and other creditors Decrease in sales in advance of carriage Increase in trade debtors (Increase)/Decrease in deposits and other debtors
(Increase)/Decrease in prepayments (Increase)/Decrease in inventories Increase in deferred revenue Cash generated from operations Payment of cargo fines 10 Income taxes paid NET CASH PROVIDED BY OPERATING ACTIVITIES 269.0 (22.5) (251.7) (8.1) (4.7) (1.1) 35.5 2,071.1 (24.0) (192.7) 1,854.4 90.8
(3.0)
(132.3)
5.2
5.1
2.1
51.9
2,099.0
(1.3)
(394.9)
1,702.8
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
101
ANNUAL REPORT 2012/13
Notes
The Group
2012-13 2011-12
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure 34 Purchase of intangible assets Proceeds from disposal of aircraft and other property, plant and equipment Purchase of long-term investments Disposal/(Purchase) of short-term investments Proceeds on disposal of an associated company Dividends received from associated and joint venture companies Dividends received from investments Interest received from investments and deposits Return of capital by an associated company Investments in associated companies NET CASH USED IN INVESTING ACTIVITIES (1,875.4) (83.6) 647.7 (364.4) 310.5 4.6 140.2 28.3 45.9 -
-
(1,146.2) (1,641.2)
(56.1)
495.1
(339.0)
(229.6)
133.6
18.9
44.4
48.1
(54.6)
(1,580.4)
CASH FLOW FROM FINANCING ACTIVITIES
Dividends paid 13 Dividends paid by subsidiary companies to non-controlling interests Interest paid Repayment of fixed rate notes Proceeds from borrowings Repayment of borrowings Repayment of long-term lease liabilities Proceeds from exercise of share options Purchase of treasury shares 15 NET CASH USED IN FINANCING ACTIVITIES (188.0) (56.4) (34.2) -
3.5 (0.2) (63.9) 38.3 (37.7) (338.6) (1,557.2)
(73.3)
(86.9)
(900.0)
1.1
(0.4)
(61.2)
65.7
(272.1)
(2,884.3)
NET CASH INFLOW/(OUTFLOW) 369.6 (2,761.9)
CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR
Effect of exchange rate changes
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 4,702.7
(12.7) 5,059.6 7,434.2
30.4
4,702.7
ANALYSIS OF CASH AND CASH EQUIVALENTS
Fixed deposits 32 Cash and bank 32 CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 4,692.4 367.2 5,059.6 4,260.6
442.1
4,702.7
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
102
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
1
General
Singapore Airlines Limited (“the Company”) is a limited liability company incorporated in the Republic of Singapore which
is also the place of domicile. The Company is listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”) and
is a subsidiary company of Temasek 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 charters and tour wholesaling and related activities. The principal activity of the Company consists of passenger
air transportation.
The financial statements for the financial year ended 31 March 2013 were authorised for issue in accordance with a
resolution of the Board of Directors on 16 May 2013.
2
Summary of Significant Accounting Policies
The accounting policies applied by the Group and the Company are consistent with those used in the previous financial
year.
(a) Basis of preparation
The consolidated financial statements of the Group and the statement of financial position and statement of changes
in equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).
The financial statements have been prepared on the historical cost basis except as disclosed in the accounting
policies below.
The financial statements are presented in Singapore Dollars (SGD or $) and all values in the tables are rounded to the
nearest million as indicated.
(b) New and revised standards
The accounting policies adopted are consistent with those of the previous financial year except as follows:
On 1 April 2012, the Group adopted all the new and revised standards and interpretations of FRS (INT FRS) that
are effective for annual financial periods beginning on or after 1 April 2012. The adoption of these standards and
interpretations did not have any effect on the financial performance or position of the Group and the Company.
103
ANNUAL REPORT 2012/13
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:
Description
Effective for annual periods
beginning on or after
Amendments to FRS 1 Presentation of Items of Other Comprehensive Income
Revised FRS 19 Employee Benefits
Amendments to FRS 107 Disclosures – Offsetting of Financial Assets and Financial Liabilities
FRS 113 Fair Value Measurements Improvements to FRSs 2012
- Amendment to FRS 1 Presentation of Financial Statements
- Amendment to FRS 16 Property, Plant and Equipment
- Amendment to FRS 32 Financial Instruments: Presentation
Revised FRS 27 Separate Financial Statements
Revised FRS 28 Investments in Associates and Joint Ventures
Amendment to FRS 32 Offsetting Financial Assets and Financial Liabilities
FRS 110 Consolidated Financial Statements
FRS 111 Joint Arrangements
FRS 112 Disclosure of Interests in Other Entities
1 July 2012
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
Except for the Amendments to FRS 1, FRS 111, revised FRS 28 and FRS 112, the management expects that the
adoption of the other standards and interpretations above will have no material impact on the financial statements
in the period of initial application. The nature of the impending changes in accounting policy on adoption of the
Amendments to FRS 1, FRS 111, revised FRS 28 and FRS 112 are described below.
Amendments to FRS 1 Presentation of Items of Other Comprehensive Income
The Amendments to FRS 1 Presentation of Items of 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 will never be reclassified. As the
Amendments only affect the presentations of items that are already recognised in OCI, the Group does not expect any
impact on its financial position or performance upon adoption of this standard.
FRS 111 Joint Arrangements and Revised FRS 28 Investments in Associates and Joint Ventures
FRS 111 and the revised FRS 28 are effective for financial periods beginning on or after 1 January 2014.
104
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
2
Summary of Significant Accounting Policies (continued)
(b) New and revised standards (continued)
FRS 111 Joint Arrangements and Revised FRS 28 Investments in Associates and Joint Ventures (continued)
FRS 111 classifies joint arrangements either as joint operations or joint ventures. Joint operation is a joint arrangement
whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the
liabilities relating to the arrangement whereas joint venture is a joint arrangement whereby the parties that have joint
control of the arrangement have rights to the net assets of the arrangement. FRS 111 requires the determination of
joint arrangement’s classification to be based on the parties’ rights and obligations under the arrangement, with the
existence of a separate legal vehicle no longer being the key factor. FRS 111 disallows proportionate consolidation and
requires joint ventures to be accounted for using the equity method. The revised FRS 28 was amended to describe the
application of equity method to investments in joint ventures in addition to associates. The Group is currently assessing
whether there will be any impact to the Group’s financial statements when the FRSs are adopted.
FRS 112 Disclosure of Interests in Other Entities
FRS 112 is effective for financial periods beginning on or after 1 January 2014.
FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities,
including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. FRS 112
requires an entity to disclose information that helps users of its financial statements to evaluate the nature and risks
associated with its interests in other entities and the effects of those interests on its financial statements. As this is
a disclosure standard, it will have no impact to the financial position and financial performance of the Group when
implemented in 2014.
(c) Basis of consolidation
The consolidated financial statements comprise the separate financial statements of the Company and its subsidiary
companies as at the end of the reporting period. The financial statements of 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 in Note 23 to the financial statements.
All intra-group balances, transactions, income and expenses and unrealised profits and losses resulting from intragroup transactions are eliminated in full.
Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the
services are received.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
105
ANNUAL REPORT 2012/13
2
Summary of Significant Accounting Policies (continued)
(c) Basis of consolidation (continued)
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be
recognised in accordance with FRS 39 either in the profit and loss account or as change to other comprehensive income.
If the contingent consideration is classified as equity, it is not remeasured until it is finally settled within equity.
In business combinations achieved in stages, previously held equity interest in the acquiree are remeasured to fair
value at the acquisition date and any corresponding gain or loss is recognised in the profit and loss account.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is
recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s
identifiable net assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of
non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the
acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. In
instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in the
profit and loss account on the acquisition date.
Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiary companies not attributable, directly or indirectly, to owners
of the Parent, and are presented separately in the consolidated statement of comprehensive income and within equity
in the 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 of the controlling and non-controlling
interests are adjusted to reflect the changes in their relative interests in the subsidiary company. Any difference
between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or
received is recognised directly in equity and attributed to owners of the Parent.
(d) Subsidiary, associated and joint venture companies
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 to obtain benefits from its activities, generally accompanied by a shareholding giving rise to the majority
of the voting rights.
An associated company is defined as an entity, not being a subsidiary company or joint venture company, in which the
Group has significant influence, but not control, generally accompanied by a shareholding giving rise to not less than
20% of the voting rights. A list of the Group’s associated companies is shown in Note 24 to the financial statements.
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 equity method,
the investment in associated company is measured in the statement of financial position at cost plus post-acquisition
changes in the Group’s share of net assets of the associated company. Goodwill relating to an associated company
is included in the carrying amount of the investment and is neither amortised nor tested individually for impairment.
Any excess of the Group’s share of the net fair value of the associated company’s identifiable assets, liabilities and
contingent liabilities over the cost of investment is deducted from the carrying amount of the investment and is
recognised as income as part of the Group’s share of profit or loss of the associated company in the period in which
the investment is acquired.
The profit or loss reflects the share of the results of operations of the associated company. Where there has been a
change recognised in other comprehensive income by the associated company, the Group recognises its share of such
changes in other comprehensive income. Unrealised gains and losses resulting from transactions between the Group
and the associated company are eliminated to the extent of its interest in the associated company.
The Group’s share of profit or loss of its associated company is shown on the face of the profit and loss account.
When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company,
the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associated company.
After application of the equity method, the Group determines whether it is necessary to recognise an additional
impairment loss on the Group’s investment in its associated companies. The Group determines at the end of each
reporting period whether there is any objective evidence that the investment in the associated company is impaired. If
this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of
the associated company and its carrying value and recognises the amount in the profit and loss account.
A joint venture company is a contractual arrangement whereby two or more parties undertake an economic activity
that is subject to joint control, where the strategic financial and operating decisions relating to the activity require the
unanimous consent of the parties sharing control. A list of the Group’s joint venture companies is shown in Note 25 to
the financial statements.
The Group’s share of the results of the joint venture companies is recognised in the consolidated financial statements
under the equity method on the same basis as associated companies.
The most recently available audited financial statements of the associated and joint venture companies are used by the
Group in applying the equity method. Where the dates of the audited financial statements used are not co-terminous
with those of the Group, the share of results is arrived at from the last audited financial statements available and
unaudited management financial statements to the end of the accounting period. Where necessary, adjustments are
made to bring the accounting policies in line with those of the Group.
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(e) Intangible assets
(i) Computer software
Computer software acquired separately is measured initially at cost. Following initial acquisition, computer
software is stated at cost less accumulated amortisation and accumulated impairment losses, if any. These costs
are amortised using the straight-line method over their estimated useful lives of 3 to 10 years and assessed for
impairment whenever there is an indication that the computer software may be impaired. Advance and progress
payments are not amortised. The amortisation period and method are reviewed at least annually.
(ii) 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. Amortisation of such intangibles begins only when
the aircraft engines are available for sale. These deferred engine development costs are amortised on a straightline basis over the period of expected sales of the aircraft engines, which is estimated to be over a period of 20
years. The amortisation period and amortisation method would be reviewed annually in light of experience and
changing circumstances, and adjusted prospectively, as appropriate at the end of each reporting period.
(iii) Others
Purchased landing slots are measured initially at cost. Following initial recognition, landing slots are measured at cost
less accumulated impairment losses, if any. Landing slots based within the European Union are not amortised, as
regulations provide that these landing slots have an indefinite useful life, and are tested for 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 operates
i.e., functional currency, to be SGD. Sales prices and major costs of providing goods and services including major
operating expenses are primarily influenced by fluctuations in SGD.
Foreign currency transactions are converted into SGD at exchange rates which approximate bank rates prevailing at
dates of transactions.
All foreign currency monetary assets and liabilities are translated into SGD using year-end exchange rates. Nonmonetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates as at the dates of the initial transactions. Non-monetary assets and liabilities measured at fair value
in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Gains and losses arising from conversion of monetary assets and liabilities are taken to the profit and loss account.
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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 are translated into SGD at the exchange rates ruling at the end of the reporting period. The financial
results of foreign subsidiary, associated and joint venture companies are translated monthly into SGD at the prevailing
exchange rates. The resulting gains or losses on exchange are recognised initially in other comprehensive income and
accumulated under foreign currency translation reserve.
Goodwill and fair value adjustments arising from the acquisition of foreign operations on or after 1 April 2005 are
treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign
operations, and translated into SGD at the closing rate at the end of the reporting period.
Goodwill and fair value adjustments which arose on acquisitions of foreign operations before 1 April 2005 are deemed
to be assets and liabilities of the Group and are recorded in SGD at the rates prevailing at the dates of acquisition.
On disposal of a foreign operation, the cumulative amount of exchange differences deferred in other comprehensive
income relating to that foreign operation is recognised in the profit and loss account as a component of the gain or
loss on disposal.
(g) Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and
equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. The cost of
an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs
of bringing the asset to working condition for its intended use. The cost of all aircraft is stated net of manufacturers’
credit. Aircraft and related equipment acquired on an exchange basis are stated at amounts paid plus the fair value
of the fixed asset traded-in. Expenditure for heavy maintenance visits on aircraft, engine overhauls and landing gear
overhauls, is capitalised at cost. Expenditure for engine overhaul costs covered by power-by-hour (fixed rate charged
per hour) maintenance agreements is capitalised by hours flown. Expenditure for other maintenance and repairs is
charged to the profit and loss account. When assets are sold or retired, their costs, accumulated depreciation and
accumulated impairment losses, if any, are removed from the financial statements and any gain or loss resulting from
their disposal is included in the profit and loss account.
Leasehold hotel properties held by an associated company are carried at fair value, less accumulated depreciation and
accumulated impairment losses. Fair values of leasehold hotel properties are determined by independent professional
valuers on an annual basis. The Group’s share of the revaluation gain or loss is reflected under the share of postacquisition capital reserve.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit and loss
account in the year the asset is derecognised.
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(h) Depreciation of property, plant and equipment
Property, plant and equipment are depreciated on a straight-line basis at rates which are calculated to write down
their cost to their estimated residual values at the end of their operational lives. Operational 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 until they are no longer in use. No depreciation is
charged after assets are depreciated to their residual values.
(i) Aircraft, spares and spare engines
The Group depreciates its new passenger aircraft, spares and spare engines over 15 years to 10% residual values.
The Group depreciates its new freighter aircraft over 15 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 provided under power-by-hour maintenance agreements) are capitalised and depreciated over the
average expected life between major overhauls, estimated to be 4 to 10 years.
Training aircraft are depreciated over 5 to 15 years to 10% to 20% residual values.
Flight simulators are depreciated over 5 to 10 years to nil residual values.
(ii) Land and buildings
Freehold buildings, leasehold land and buildings are depreciated to nil residual values as follows:
Company owned office premises
- according to lease period or 30 years, whichever is the shorter.
Company owned household premises
- according to lease period or 10 years, whichever is the shorter.
Other premises
- according to lease period or 5 years, whichever is the shorter.
Leasehold hotel properties held by an associated company
- according to lease period of 99 years, up to 2081.
(iii) Others
Plant and equipment, office and computer equipment are depreciated over 1 to 15 years to nil residual values.
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31 March 2013
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Summary of Significant Accounting Policies (continued)
(i) Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement
at inception date: whether fulfillment of the arrangement is dependent on the use of a specific asset or assets and
the arrangement conveys a right to use the asset. For arrangements entered into prior to 1 January 2005, the date of
inception is deemed to be 1 January 2005 in accordance with the transitional requirements of INT FRS 104.
(i) Finance lease – as lessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the
leased asset, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the
present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised.
Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against the
profit and loss account.
For sale and finance leaseback, differences between sales proceeds and net book values are taken to the statement
of financial position as deferred gain or loss on sale and leaseback transactions, included under deferred account
and amortised over the minimum lease terms.
Major improvements and modifications to leased aircraft due to operational requirements are capitalised and
depreciated over the average expected life between major overhauls (estimated to be 4 to 7 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 basis over the lease term. The aggregate benefit of incentives provided by the lessor is
recognised as a reduction of rental expense 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, included under deferred account and amortised over the minimum lease terms. If the
sales proceeds are below fair values, the loss is recognised in the profit and loss account except that, if the loss is
compensated for by future lease payments at below market values, the deferred loss is included under deferred
account and is amortised over the minimum lease period.
Major improvements and modifications to leased aircraft due to operational requirements are capitalised and
depreciated over the remaining lease term period or the average expected life between major overhauls (estimated
to be 4 to 10 years).
(iii) Operating lease – as lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as
operating leases. Aircraft leased out under operating leases are included under property, plant and equipment
and are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Rental income is
recognised on a straight-line basis over the lease term.
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(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 estimated selling price in the ordinary course of business less estimated costs necessary to
make the sale. Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the
carrying value of inventories to the lower of cost and net realisable value.
(k) Financial assets
Financial assets are recognised on the statement of financial position when, and only when, the Group becomes a party
to the contractual provisions of the financial instrument. The Group determines the classification of its financial assets
at initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not
at fair value through profit or loss, directly attributable transaction costs.
A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On
derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the
consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is
recognised in the profit and loss account.
All regular way purchases and sales of financial assets are recognised or derecognised on the trade date, i.e., the
date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of
financial assets that require delivery of assets within the period generally established by regulation or convention in
the marketplace concerned.
(i) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and those designated
upon initial recognition as fair value through profit or loss. Financial assets are classified as held for trading if they
are acquired principally for the purpose of selling in the short-term. This category includes derivative financial
instruments entered into by the Group that are not designated as hedging instruments in hedge relationships
as defined by FRS 39. Derivatives are also classified under this category unless they are designated as effective
hedging instruments. Gains or losses on financial assets held at fair value through profit or loss are recognised in
the profit and loss account.
Assets in this category are classified as current assets if they are either held for trading or are expected to be
realised within 12 months after the end of the reporting period.
(ii) Loans 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 profit and loss account when the loans and receivables
are derecognised or impaired, as well as through the amortisation process.
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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 classified as held-tomaturity when the Group has the positive intention and ability to hold the investment to maturity. Subsequent
to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest
method, less impairment. Gains and losses are recognised in the profit and loss account when the held-to-maturity
investments are derecognised or impaired, and through the amortisation process.
(iv) Available-for-sale investments
Available-for-sale investments are non-derivative financial assets that are either designated in this category, or
not classified in any other categories. After initial recognition, available-for-sale investments are measured at fair
value with gains or losses being recognised in other comprehensive income, except that impairment losses and
interest are recognised in the profit and loss account. The cumulative gain or loss previously recognised in other
comprehensive income is reclassified from equity to the profit and loss account as a reclassification adjustment
when the investment is derecognised.
(l) Investments
Investments held by the Group are classified as available-for-sale or held-to-maturity. Investments classified as availablefor-sale are stated at fair value, unless there is no active market for trading. Fair value is determined in the manner
described in Note 37(b). Investments with no active market for trading are stated at cost less accumulated impairment
losses as their fair value cannot be reliably measured. Held-to-maturity investments are measured at amortised cost
using the effective interest method, less impairment. The accounting policy for both categories of financial assets is
stated in Note 2(k).
(m) Trade debtors and other receivables
Trade debtors, including amounts owing by subsidiary, associated and joint venture companies, deposits and other
debtors are classified and accounted for as loans and receivables. Other non-current receivables are also classified and
accounted for in the same way. The accounting policy for this category of financial assets is stated in Note 2(k).
Further details on the accounting policy for impairment of financial assets are stated in Note 2(p).
(n) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits in banks and short-term, highly liquid investments that are
readily convertible to known amounts of cash 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
and receivables.
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(o) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment assessment for an asset is required, the Group makes an estimate of the
asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating units’ (“CGU”) fair value less costs to sell
and its value-in-use and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets. In assessing value-in-use, the estimated future
cash flows expected to be generated by the asset are discounted to their present value using a pre-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 excluding goodwill and those with indefinite lives, an assessment is made at each reporting
date as to whether there is any indication that previously recognised impairment losses may no longer exist or may
have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously
recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s
recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the
asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in
the profit and loss account unless the asset is measured at revalued amount, in which case the reversal is treated as a
revaluation increase.
(p) Impairment of financial assets
The Group also assesses at the end of each reporting period whether a financial asset or a group of financial assets
is impaired.
(i) Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment
exists individually for financial assets that are individually significant, or collectively for financial assets that are not
individually significant. If the Group determines that no objective evidence of impairment exists for an individually
assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar
credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for
impairment and for which an impairment loss is, or continues to be recognised are not included in a collective
assessment of impairment.
If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred,
the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of
estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial
asset’s original effective interest rate. The carrying amount of the asset is reduced either directly or through the
use of an allowance account. The impairment loss is recognised in the profit and loss account.
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Summary of Significant Accounting Policies (continued)
(p) Impairment of financial assets (continued)
(i) Financial assets carried at amortised cost (continued)
When the asset becomes uncollectible, the carrying amount of the impaired financial asset is reduced directly or if
an amount was charged to the allowance account, the amounts charged to the allowance account are written off
against the carrying value of the financial asset.
To determine whether there is objective evidence that an impairment loss on financial assets has been incurred,
the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor
and default or significant delay in payments.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised, the previously recognised impairment is reversed to
the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The
amount of reversal is recognised in the profit and loss account.
(ii) Financial assets carried at cost
If there is objective evidence (such as significant adverse changes in the business environment where the issuer
operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on
financial assets carried at cost has been incurred, the amount of the loss is measured as the 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 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 classified as
available-for-sale financial assets are impaired.
If an available-for-sale asset is impaired, an amount comprising the difference between its cost (net of any principal
repayment and amortisation) and its current fair value, less any impairment loss previously recognised in the
profit and loss account, is transferred from other comprehensive income to the profit and loss account. Reversals
of impairment losses in respect of equity instruments are not recognised in the profit and loss account; increase in
the fair value after impairment are recognised directly in other comprehensive income.
In the case of non-equity investments classified as available-for-sale, impairment is assessed based on the same
criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative
loss measured as the difference between the amortised cost and the current fair value, less any impairment loss
on that investment previously recognised in the profit and loss account. Future interest income continues to be
accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future
cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance
income. If, in a subsequent year, the fair value of a non-equity investment increases and the increase can be
objectively related to an event occurring after the impairment loss was recognised in the profit and loss account,
the impairment loss is reversed in the profit and loss account.
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(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 determines the classification of its financial
liabilities at initial recognition.
All financial liabilities are recognised initially at fair value, plus, in the case of financial liabilities not at fair value
through profit or loss, directly attributable transaction costs.
The measurement of financial liabilities depends on their classification as follows:
(i) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition at fair value through profit or loss. Financial liabilities are classified as
held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative
financial instruments entered into by the Group that are not designated as hedging instruments in hedge
relationships. Separated embedded derivatives are also classified as held for trading unless they are designated
as effective hedging instruments.
Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value.
Any gains or losses arising from changes in fair value of the financial liabilities are recognised in the profit and
loss account.
The Group has not designated any financial liabilities upon initial recognition at fair value through profit or loss.
(ii) Other financial liabilities
After initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective
interest rate method. Gains and losses are recognised in the profit and loss account when the liabilities are
derecognised, and through the amortisation process.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability, and the difference in the respective
carrying amounts is recognised in the profit and loss account.
(r) Loans, notes payable and borrowings
Loans, notes payable and other borrowings are initially recognised at the fair value of the consideration received less
directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the effective interest method.
Gains and losses are recognised in the profit and loss account when the liabilities are derecognised as well as through
the amortisation process.
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Summary of Significant Accounting Policies (continued)
(s) Trade and other creditors
Trade and other creditors and amounts owing to subsidiary and associated companies are initially recognised at fair
value and subsequently measured at amortised cost using the effective interest method.
Gains and losses are recognised in the profit and loss account when the liabilities are derecognised as well as through
the amortisation process.
(t) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the
obligation can be estimated reliably. Where the Group expects some or all of a provision to be reimbursed, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the profit and loss account net of any reimbursement.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is
no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is
reversed. If the effect of the time value of money is material, provisions are discounted using a current 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 (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, are recorded equally over the lease terms.
(u) Maintenance reserve
Maintenance reserve relates to payments made by the lessee for maintenance activities undertaken during the lease
period. The Group will reimburse the lessee for agreed maintenance work done as and when incurred. The Group
records the amounts received as maintenance reserve. At the expiry of the lease term, excess maintenance reserve is
recognised in the profit and loss account.
(v) Share capital and share issuance expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly
attributable to the issuance of ordinary shares are deducted against share capital.
(w) Treasury shares
When shares are reacquired by the Company, the amount of consideration paid is recognised directly in equity.
Reacquired shares are classified as treasury shares and presented as a deduction from total equity. When treasury
shares are subsequently sold or reissued pursuant to equity compensation plans, the cost of treasury shares is reversed
from the treasury share account and the realised gain or loss on sale or reissue, net of any directly attributable
incremental transaction costs, is recognised in the capital reserve. Voting rights related to treasury shares are nullified
for the Group and no dividends are allocated to them respectively.
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(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 attributable to the award of frequent flyer
benefits, estimated based on expected utilisation of these benefits, is deferred until they are utilised. These are included
under deferred revenue on the statement of financial position. Any remaining unutilised benefits are recognised as
revenue upon expiry.
(y) Taxation
(i) Current income tax
Tax recoverable and tax liabilities for the current and prior periods are measured at the amount expected to
be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the end of the reporting period, in the countries where the
Group operates and generates taxable income. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
Current income taxes are recognised in the profit and loss account except to the extent that the tax relates to items
recognised outside profit or loss, either in other comprehensive income or directly in equity.
(ii) Deferred tax
Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
•
Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
•
In respect of taxable temporary differences associated with investments in subsidiary, associated and joint
venture companies, where the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:
•
Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
•
In respect of deductible temporary differences associated with investments in subsidiary, associated and
joint venture companies, deferred tax assets are recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilised.
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NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
2
Summary of Significant Accounting Policies (continued)
(y) Taxation (continued)
(ii) Deferred tax (continued)
The carrying amount of deferred tax asset is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and
are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset
to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively
enacted at the end of each reporting period.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax
items are recognised in correlation to the underlying transaction either in other comprehensive income or directly
in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current
income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity
and the same tax authority.
(iii) Indirect Taxes
Revenues, expenses and assets are recognised net of the amount of indirect tax except:
•
Where the indirect tax incurred on a purchase of assets or services is not recoverable from the tax authority, in
which case the indirect tax is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
•
Receivables and payables that are stated with the amount of indirect tax included.
The net amount of indirect tax recoverable from, or payable to, the tax authority is included as part of receivables
or payables in the statement of financial position.
(z) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.
Revenue 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 recognised as operating revenue when the transportation is provided. The value of
unused tickets and air waybills is included in current liabilities as sales in advance of carriage. The value of tickets and
air waybills is recognised as revenue if unused after two years and one year respectively.
119
ANNUAL REPORT 2012/13
2
Summary of Significant Accounting Policies (continued)
(z) Revenue (continued)
Revenue from repair and maintenance of aircraft, engine and component overhaul is recognised based on the
percentage of completion of the projects. The percentage of completion of the projects is determined based on the
number of man-hours incurred to date against the estimated man-hours needed to complete the projects.
Rental income from lease of aircraft is recognised on a straight-line basis over the lease term.
(aa)Income from investments
Dividend income from investments is recognised when the Group’s right to receive the payment is established.
Interest income from investments and fixed deposits is recognised using the effective interest method.
(ab)Employee benefits
(i) Equity compensation plans
Employees of the Group receive remuneration in the form of share options 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 approximates the market value of the shares at the date of grant.
The Group has also implemented the Singapore Airlines Limited Restricted Share Plan and Performance Share
Plan and the SIA Engineering Company Limited Restricted Share Plan and Performance Share Plan for awarding
of fully paid ordinary shares to senior executives and key senior management, when and after pre-determined
performance or service conditions are accomplished.
Details of the plans are disclosed in Note 5 to the financial statements.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the
options or awards at the date on which the share options or awards are granted. In valuing the share options and
share awards, no account is taken of any performance conditions, other than conditions linked to the price of the
shares of the Company and non-vesting conditions.
This cost is recognised in the profit and loss account as share-based compensation expense, with a corresponding
increase in the share-based compensation reserve, over the vesting period in which the service conditions are
fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“the vesting
date”). Non-market vesting conditions are included in the estimation of the number of shares under options that
are expected to become exercisable on the vesting date. At the end of each reporting period, the Group revises
its estimates of the number of shares under options that are expected to become exercisable on the vesting date
and recognises the impact of the revision of the estimates in the profit and loss account, with a corresponding
adjustment to the share-based compensation reserve over the remaining vesting period.
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 options or awards where
vesting is conditional upon a market condition, which are treated as vested irrespective of whether or not the
market condition is satisfied, provided that all other performance and/or service conditions are satisfied.
The share-based compensation reserve is transferred to general reserve upon cancellation or expiry of the vested
options or awards. When the options are exercised or awards are released, the share-based compensation reserve
is transferred to share capital if new shares are issued.
(ii) Defined contribution plans
(ac) Aircraft maintenance and overhaul costs
The Group recognises aircraft maintenance and overhaul expenses (except heavy maintenance visits, engine
overhaul and landing gear overhaul expenses) 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 costs, are charged to the profit and loss account in the
financial year in which they are incurred.
(ae)Borrowing costs
Borrowing costs incurred to finance advance and progress payments for aircraft are capitalised as part of advance and
progress payments until the aircraft are commissioned for operation or the projects are completed. All other borrowing
costs are recognised as finance charges in the period in which they are incurred.
(af) Claims and liquidated damages
As required by law, the companies in Singapore make contributions to the Central Provident Fund scheme in
Singapore, a defined contribution scheme. Certain of the Group’s subsidiary companies and overseas stations
outside Singapore make contributions to their respective countries’ pension schemes. Such contributions are
recognised as an expense in the period in which the related service is performed.
Claims for liquidated damages, in relation to a loss of income, are recognised in the profit and loss account when a
contractual entitlement exists, the amount can be reliably measured and receipt is virtually certain. When the claims
do not relate to a compensation for loss of income, the amounts are taken to the statement of financial position as
deferred credit, included under deferred account, as a reduction to the cost of the assets when the assets are capitalised
and also for future reduction of operating lease expenses.
(ag)Derivative financial instruments and hedging
The Group uses derivative financial instruments such as forward currency contracts, foreign currency option contracts,
cross currency swap contracts, interest rate swap contracts, interest rate cap contracts, jet fuel option contracts, jet fuel
swap contracts and jet fuel collar contracts to hedge its risks associated with foreign currency, interest rate and jet fuel
price fluctuations. Such derivative financial instruments are initially recognised at fair value on the date on which a
derivative contract is entered into, and are subsequently re-measured at fair value.
121
ANNUAL REPORT 2012/13
2
Summary of Significant Accounting Policies (continued)
(ag)Derivative financial instruments and hedging (continued)
Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
directly to the profit and loss account.
The Group also sets aside USD deposits to match forecast capital expenditure requirements. To create a USDdenominated asset in the statement of financial position to match against the expected USD liability for capital
expenditure, the Group accumulates USD over a period of 10 months in advance of forecast aircraft payments. The
exchange gains and losses of the USD held would be recognised in the carrying value of the aircraft.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to
which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking
the hedge. The documentation includes identification of the hedged item or transaction, the hedging instrument, the
nature of the risk being hedged and how the Group will assess the hedging instrument’s effectiveness in offsetting
the exposure to changes in the hedged item’s (or transaction’s) cash flows attributable to the hedged risk. Such
hedges are expected to be highly effective in achieving offsetting changes in cash flows, and are assessed on an
ongoing basis to determine that they have been highly effective throughout the financial reporting periods for which
they are designated.
Derivatives are classified as fair value through profit or loss unless they qualify for hedge accounting. Hedges which
meet the criteria for hedge accounting are accounted for as cash flow hedges.
For cash flow hedges, the effective portion of the gain or loss on the hedging instrument is recognised directly in the
fair value reserve [Note 16(d)], while the ineffective portion is recognised in the profit and loss account.
Amounts taken to the fair value reserve are transferred to the profit and loss account when the hedged transaction
affects profit or loss, such as when a forecast sale or purchase occurs. If the hedged item is a non-financial asset or
liability, the amounts taken to the fair value reserve are transferred to the initial carrying amount of the non-financial
asset or liability.
(ah)Segment reporting
(i) Business segment
For management purposes, the Group is organised into operating segments based on the nature of 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 resources to the segments and
to assess the segment performance. Additional disclosures on each of these segments are shown in Note 4,
including the factors used to 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 derived by allocating revenue to the area
in which the sale was made. Revenue from other operations, which consist principally of engineering services and
cargo operations, is derived in East Asia and therefore, is not shown.
Assets, which consist principally of flight and ground equipment, support the entire worldwide transportation
system, and are mainly located in Singapore. An analysis of assets and capital expenditure of the Group by
geographical distribution has therefore not been included.
122
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
3
Significant Accounting Estimates
Estimates and assumptions concerning the future are made in the preparation of the financial statements. They affect the
application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures
made. They are assessed on an ongoing basis and are based on experience and relevant factors, including expectations of
future events that are believed to be reasonable under the circumstances.
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting
period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
(a) Impairment of property, plant and equipment – aircraft fleet
(b) Depreciation of property, plant and equipment – aircraft fleet
Aircraft are depreciated on a straight-line basis at rates which are calculated to write down their cost to their estimated
residual values at the end of their operational lives. Certain estimates regarding the operational lives and residual values
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: $11,024.2 million) and $8,553.9 million (2012:
$8,985.5 million) respectively.
During the year, the Group reduced the estimated useful lives and residual values for certain aircraft pursuant to the
sale of these aircraft. Consequently, an additional depreciation expense of $30.0 million (2011-12: $69.3 million) was
charged to the profit and loss account.
(c) Passenger revenue recognition
Impairment is recognised when events and circumstances indicate that the aircraft may be impaired and the carrying
amounts of the aircraft exceed the recoverable amounts. Recoverable amount is defined as the higher of an aircraft’s
fair value less costs to sell and its value-in-use. The fair value less costs to sell computation is based on available
data from binding sales transactions in an arm’s length transaction of similar assets or observable market prices less
incremental costs for disposing the asset. In determining the recoverable amounts of the aircraft, certain estimates
regarding the current fair market value of the aircraft are made. The current fair market value is determined based
on desktop valuations from an independent appraisal for fleet with similar operational lives. When value-in-use
calculations are undertaken, the Group uses discounted cash flow projections based on financial budgets approved by
the management covering a specified period.
Passenger sales are recognised as operating revenue when the transportation is provided. The value of unused tickets
is included as sales in advance of carriage on the statement of financial position and recognised as revenue at the end
of two years. This is estimated based on historical trends and experiences of the Group whereby ticket uplift occurs
mainly within the first two years. The carrying amount of the Group’s and the Company’s sales in advance of carriage
at 31 March 2013 was $1,434.3 million (2012: $1,456.8 million) and $1,367.7 million (2012: $1,409.5 million)
respectively.
(d) 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 attributable to the award of frequent flyer
benefits is deferred until they are utilised. The deferment of the revenue is estimated based on historical trends of
breakage and redemption, which is then used to project the expected utilisation of these benefits. Any remaining
unutilised benefits are recognised as revenue upon expiry. The carrying amount of the Group’s and the Company’s
deferred revenue at 31 March 2013 was $532.5 million (2012: $497.0 million).
123
ANNUAL REPORT 2012/13
3
Significant Accounting Estimates (continued)
(e) Aircraft maintenance and overhaul expenditure under power-by-hour agreements
The Group has entered into several power-by-hour (“PBH”) engine maintenance agreements with engine original
equipment manufacturers. The monthly payments are based on the number of flying hours flown. A portion of the
cost is expensed at a fixed rate per hour during the term of the PBH agreement. The remaining payments made are
recorded as an advance payment, to the extent that it is to be utilised through future maintenance activities, if any, or
capitalised upon completion of an overhaul.
The proportion of the amount to be expensed off and capitalised is determined based on the best estimate as if
the engine maintenance and overhaul costs are accounted for under the time and material basis. The carrying
amount of the advance payment relating to PBH agreements for the Group and the Company at 31 March 2013 was
$549.3 million (2012: $684.3 million) and $493.7 million (2012: $634.3 million) respectively. The maintenance and
repair costs covered by PBH agreements which are expensed off during the year amounted to $47.7 million (2011-12:
$38.0 milion) for the Group and $45.2 million (2011-12: $35.8 milion) for the Company.
(f) Income taxes
The Group is subjected to income taxes in numerous jurisdictions. Significant judgment is involved in determining the
provision for income taxes. There are certain transactions and computations for which the ultimate tax determination
is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on
estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the
amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the
period in which such determination is made. The carrying amounts of the Group’s current tax payable and deferred
taxation at 31 March 2013 was $160.1 million (2012: $244.4 million) and $1,951.3 million (2012: $2,029.1 million)
respectively. The carrying amounts of the Company’s current tax payable and deferred taxation at 31 March 2013 was
$130.2 million (2012: $186.0 million) and $1,621.3 million (2012: $1,694.8 million) respectively.
4
Segment Information (in $ million)
For management purposes, the Group is organised into business units based on the nature of the services provided, and
has 4 reportable operating segments 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 fleet management programme. It also manufactures aircraft
cabin equipment, refurbishes aircraft galleys, provides technical and non-technical handling services and repair and
overhaul of hydro-mechanical aircraft equipment.
(iii) The cargo operations segment is involved in air cargo transportation and related activities.
(iv) Other services provided by the Group, such as training of pilots, air charters and tour wholesaling, has been aggregated
under the segment “Others”.
Except as indicated above, no operating segments have been aggregated to form the above reportable operating
segments.
Management monitors the operating results of its business units separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss
which in certain respects, as explained in the table below, is measured differently from operating profit or loss in the
consolidated financial statements.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with
third parties.
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 information regarding business segments for the financial years ended 31 March 2013
and 2012 and certain assets and liabilities information of the business segments as at those dates.
Airline
operations
2012-13
TOTAL REVENUE
External revenue
Inter-segment revenue RESULTS
Segment result Finance charges Interest income Surplus/(Loss) 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 (losses)/profits of associated companies Exceptional items Taxation
Profit/(Loss) for the financial year 12,169.3 1,243.3 13,412.6 262.0 (35.2) 62.2 56.3 10.3 (5.8) -
(1.9) -
(32.4)
315.5 Attributable to:
Owners of the Parent Non-controlling interests *
Relates to inter-segment transactions eliminated on consolidation. The Group generally accounts for such inter-segment transactions as if
these transactions were to third parties at current market prices.
125
ANNUAL REPORT 2012/13
Engineering
services
2012-13 Cargo
operations Others
2012-13 2012-13 Total of
segments 2012-13 Elimination* 2012-13 Consolidated
2012-13
470.9 675.8 1,146.7 2,415.3 4.3 2,419.6 42.7 83.8 126.5 15,098.2 2,007.2 17,105.4 -
(2,007.2) (2,007.2) 15,098.2
15,098.2
128.1 (167.0) 4.6 227.7 1.5 229.2
(0.1) 1.4 -
17.0 0.5 96.2 63.0 -
(31.9) (9.4) 0.8 -
-
(5.4) -
0.4 (19.9) 26.2 -
0.2 (0.3) -
8.3 -
-
-
(2.3)
(44.7) 64.6 56.0 27.3 (2.4) 96.2 61.5 (19.9) (40.4) 2.0 (2.1) -
-
14.3 -
-
-
-
(42.7)
62.5
56.0
27.3
11.9
96.2
61.5
(19.9)
(40.4)
274.2 (174.3) 10.5 425.9 15.7 441.6
378.9
62.7
441.6
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)/Surplus 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 (losses)/profits of associated companies Exceptional items Taxation Profit/(Loss) for the financial year 11,582.3
1,234.9 12,817.2
279.1
(65.9)
50.1 (28.9) 4.4 (13.4) -
(29.3) (4.1) (45.2) 146.8 Attributable to:
Owners of the Parent Non-controlling interests *
Relates to inter-segment transactions eliminated on consolidation. The Group generally accounts for such inter-segment transactions as if
these transactions were to third parties at current market prices.
127
ANNUAL REPORT 2012/13
Engineering
services
2011-12
Cargo
operations Others
2011-12
2011-12
Total of
segments 2011-12
Elimination* 2011-12
Consolidated
2011-12
551.5 618.4 1,169.9 2,673.6 5.9 2,679.5
50.4 79.2 129.6 14,857.8
1,938.4 16,796.2
-
(1,938.4) (1,938.4) 14,857.8
14,857.8
129.6 (119.3) (0.4) 289.0 (3.1) 285.9
-
1.5 -
13.6 1.5 74.7 82.2 -
(31.1) (12.3)
1.5 -
-
(2.9) -
(1.5) (1.3) 26.1 -
0.3 (2.7) -
(0.2) -
-
-
(1.2) (78.2) 53.4 (31.6) 18.0 (15.0) 74.7 51.4 (5.4) (51.4) 3.9 (2.9) 30.2 -
63.8 -
-
-
-
(74.3)
50.5
(1.4)
18.0
48.8
74.7
51.4
(5.4)
(51.4)
272.0 (109.7) (4.2) 304.9 91.9 396.8
335.9
60.9
396.8
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-term investments Accrued interest receivable Total assets 19,216.1 230.6 628.7 12.6 20,088.0 Segment liabilities Long-term liabilities Provisions Finance lease commitments Loans Notes payable Accrued interest payable Tax liabilities Total liabilities 4,830.2 3.9 468.7 -
-
800.0 7.1 1,840.4 7,950.3 Capital expenditure Purchase of intangible assets 1,790.6 69.3 Depreciation Impairment of property, plant and equipment Amortisation of intangible assets Non-cash items other than depreciation, impairment of property, plant
and equipment and amortisation of intangible assets 1,352.3 7.0 19.3 *
38.4 Relates to inter-segment transactions eliminated on consolidation. The Group generally accounts for such inter-segment transactions as if
these transactions were to third parties at current market prices.
129
ANNUAL REPORT 2012/13
Engineering
services
2013 Cargo
operations Others
2013 2013 Total of
segments 2013
Elimination* 2013 Consolidated
2013
1,191.1 427.0 14.6 -
1,632.7 1,935.3 17.6 63.6 -
2,016.5 193.8 -
-
0.2 194.0 22,536.3 675.2 706.9 12.8 23,931.2 (1,503.1) -
-
-
(1,503.1) 21,033.2
675.2
706.9
12.8
22,428.1
248.4 -
0.2 -
5.7 -
-
49.2 303.5 255.6 -
24.7 208.4 -
-
1.2 217.3 707.2 50.5 -
-
-
-
-
-
4.2 54.7 5,384.7 3.9 493.6 208.4 5.7 800.0 8.3 2,111.1 9,015.7 (5.2) -
-
-
-
-
-
0.3 (4.9) 5,379.5
3.9
493.6
208.4
5.7
800.0
8.3
2,111.4
9,010.8
31.8 13.7 51.6
0.5 1.4 0.1 1,875.4 83.6 -
-
1,875.4
83.6
33.2 -
1.7 194.0 -
1.3 6.7 2.8 0.4 1,586.2 9.8 22.7 2.9 -
-
1,589.1
9.8
22.7
(0.8) (0.8) 0.9
37.7 -
37.7
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-term investments Accrued interest receivable Total assets 18,704.9 220.8 295.6 7.9 19,229.2 Segment liabilities Long-term liabilities Provisions
Finance lease commitments Loans Notes payable Accrued interest payable Tax liabilities Total liabilities 4,532.5 7.9 331.4 -
-
800.0 4.6 1,979.0 7,655.4 Capital expenditure Purchase of intangible assets 1,505.9 41.2 Depreciation Impairment of property, plant and equipment Amortisation of intangible assets Non-cash items other than depreciation, impairment of property, plant
and equipment and amortisation of intangible assets 1,355.0 10.8
19.6 *
24.7 Relates to inter-segment transactions eliminated on consolidation. The Group generally accounts for such inter-segment transactions as if
these transactions were to third parties at current market prices.
131
ANNUAL REPORT 2012/13
Engineering
services
2012
Cargo
operations Others
2012 2012
Total of
segments 2012
Elimination* 2012
Consolidated
2012
1,166.7 418.0 14.6 -
1,599.3 2,234.3 17.6
63.5
-
2,315.4 188.7 -
-
0.2 188.9 22,294.6 656.4
373.7 8.1 23,332.8 (1,289.8) -
-
-
(1,289.8) 21,004.8
656.4
373.7
8.1
22,043.0
263.7 -
0.2 -
2.4 -
-
53.2 319.5 300.9 -
22.3
275.4 -
-
1.6 237.9 838.1 44.6 -
-
-
-
-
-
3.1 47.7 5,141.7 7.9 353.9
275.4
2.4 800.0 6.2 2,273.2 8,860.7 (5.4) -
-
-
-
-
-
0.3 (5.1) 5,136.3
7.9
353.9
275.4
2.4
800.0
6.2
2,273.5
8,855.6
28.8 14.0 137.4 0.6 5.5 0.3 1,677.6 56.1
(36.4) -
1,641.2
56.1
37.8
-
1.7 188.0 -
1.2 7.3 5.0 0.6 1,588.1 15.8
23.1 0.4 -
-
1,588.5
15.8
23.1
3.2 (2.4) (0.4) 25.1 -
25.1
132
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
4
Segment Information (in $ million) (continued)
Geographical segments
The following table presents revenue information on airline operations by geographical areas for the financial years ended
31 March 2013 and 2012.
East Asia Europe South West Pacific Americas West Asia and Africa Systemwide Non-scheduled services and incidental revenue 5
By area of original sale
2012-13 2011-12
4,962.9
1,352.9 1,628.9 760.1
436.5
9,141.3
4,271.3 13,412.6 4,754.1
1,411.3
1,556.6
747.8
461.0
8,930.8
3,886.4
12,817.2
Staff Costs (in $ million)
The Group
2012-13 2011-12
Salary, bonuses and other costs CPF and other defined contributions Share-based compensation expense 2,181.5 166.4 5.4 2,353.3 2,026.2
150.1
18.1
2,194.4
The Group contributes to several post-employment defined benefit plans for employees at several overseas locations.
Employees may contribute in some of these plans and these contributions are matched in varying amounts by the Group.
Defined benefit expenses for the Group were $28.6 million for 2012-13 (2011-12 : $25.9 million). As these are not
material to the total staff costs of the Group for 2012-13 and 2011-12, additional disclosures of these defined benefit
plans are not shown.
133
ANNUAL REPORT 2012/13
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 Plan (“PSP’) and the amounts recognised in the profit and loss account for share-based
compensation transactions with employees are as follows:
Employee share option scheme Restricted share plan
Performance share plan
The Group
2012-13 2011-12
0.2 3.4 1.8
5.4
1.2
14.8
2.1
18.1
Details of the plans are described in the following paragraphs:
Share option plans
The ESOP which comprises the Senior Executive Share Option Scheme and the Employee Share Option Scheme for senior
executives and all other employees respectively, were approved by shareholders on 8 March 2000 and modified at the
Extraordinary General Meetings of the Company held on 14 July 2001, 26 July 2003 and 31 July 2009.
Options were granted for a term no longer than 10 years from the date of grant. The exercise price of the options was
the average of the closing prices of the Company’s ordinary shares on the SGX-ST for the five market days immediately
preceding the date of grant.
Under the Employee Share Option Scheme, options vest two years after the date of grant.
Under the Senior Executive Share Option Scheme, options vest:
(a) one year after the date of grant for 25% of the ordinary shares subject to the options;
(b) two years after the date of grant for an additional 25% of the ordinary shares subject to the options;
(c) three years after the date of grant for an additional 25% of the ordinary shares subject to the options; and
(d) four years after the date of grant for the remaining 25% of the ordinary shares subject to the options.
There are no cash settlement alternatives.
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 average exercise prices of, and movements in, the ESOP during
the financial year:
2012-13 Number of options
2011-12
Weighted
average
Number of
exercise price
options
Weighted
average
exercise price
Balance at 1 April Cancelled Exercised Balance at 31 March
37,139,973 (1,695,988) (1,712,015) 33,731,970
$11.77 $11.49
$9.14 $11.92 43,213,533 (859,445)
(5,214,115) 37,139,973 $12.25
$11.19
$9.95
$11.77
Exercisable at 31 March
33,731,970 $11.92 35,865,297 $11.76
The range of exercise prices for options outstanding at the end of the year is $7.33 to $15.71 (2011-12: $7.33 to $15.71).
Following the expiry of the share option plans in March 2009, the Company ceased to grant options under ESOP.
The weighted average share price for options exercised during the year was $10.68 (2011-12: $11.90). The weighted
average remaining contractual life for these options is 3.79 years (2011-12: 4.54 years).
Terms of share options outstanding as at 31 March 2013:
Exercisable period
Exercise price Number
outstanding
Number
exercisable
1.7.2004 - 30.6.2013 1.7.2005 - 30.6.2013 1.7.2006 - 30.6.2013 1.7.2007 - 30.6.2013
1.7.2005 - 30.6.2014 1.7.2006 - 30.6.2014 1.7.2007 - 30.6.2014 1.7.2008 - 30.6.2014 1.7.2006 - 30.6.2015 1.7.2007 - 30.6.2015 1.7.2008 - 30.6.2015
1.7.2009 - 30.6.2015 122,369 481,767 147,561 268,754 276,080
926,856
441,591 592,122
475,621 2,200,908 776,556 809,848
122,369
481,767
147,561
268,754
276,080
926,856
441,591
592,122
475,621
2,200,908
776,556
809,848
$7.33 $7.33 $7.33 $7.33 $7.69
$7.69 $7.69 $7.69 $8.27
$8.27 $8.27 $8.27 135
ANNUAL REPORT 2012/13
5
Staff Costs (in $ million) (continued)
Share-based compensation expense (continued)
Share option plans (continued)
Exercisable period
Exercise price
3.7.2007 - 2.7.2016
$9.59 3.7.2008 - 2.7.2016
$9.59 3.7.2009 - 2.7.2016 $9.59 3.7.2010 - 2.7.2016 $9.59 2.7.2008 - 1.7.2017
$15.71 2.7.2009 - 1.7.2017 $15.71 2.7.2010 - 1.7.2017
$15.71 2.7.2011 - 1.7.2017
$15.71 1.7.2009 - 30.6.2018
$12.32
1.7.2010 - 30.6.2018 $12.32 1.7.2011 - 30.6.2018 $12.32
1.7.2012 - 30.6.2018 $12.32 Total number of options outstanding @
Number
outstanding
Number
exercisable
624,117 624,117
3,727,335 3,727,335
796,517 796,517
865,495 865,495
1,146,878 1,146,878
7,098,294 7,098,294
1,148,731 1,148,731
1,142,127 1,142,127
1,052,436
1,052,436
6,127,091 6,127,091
1,218,454 1,218,454
1,264,462 1,264,462
33,731,970 @ 33,731,970
The total number of options outstanding includes:
(a) 5,741,871 (2012: 5,255,057) share options not exercised by employees who have retired or ceased to be employed by the Company or any
of the subsidiary companies by reason of (i) ill health, injury or disability or death; (ii) redundancy; or (iii) any other reason approved in
writing by the Board Compensation & Industrial Relations Committee. The said options are exercisable up to the expiration of the applicable
exercise period or the period of five years from the date of retirement or cessation of employment, whichever is earlier; and
(b) 37,792 (2012: 92,982) share options not exercised by employees who have completed their fixed term contracts during the financial year.
The said options, if unvested, shall immediately vest and be exercisable from the date of cessation of employment to the date falling one
year from the date of cessation of employment.
Details and terms of the share options granted by SIAEC have been disclosed in the Annual Report of SIAEC.
136
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
5
Staff Costs (in $ million) (continued)
Share-based compensation expense (continued)
Share-based incentive plans
RSP and PSP are share-based incentive plans for senior executives and key senior management, which were approved by
the shareholders of the Company on 28 July 2005.
The details of the two plans are described below:
PSP
RSP
#
Plan Description
Award of fully-paid ordinary shares
of the Company, conditional on
position and individual performance
targets set at the start of a twoyear performance period based
on medium-term Group and
Company objectives.
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 Conditions
At both Company and Group level
• EBITDAR# Margin
• Value Added per $ Employment
Cost
• Absolute Total Shareholder
Return (TSR) outperform Cost
of Equity (COE)
• Relative TSR against selected
airline peer index companies
Vesting Condition
Based on meeting stated
performance conditions over a
two-year performance period,
50% of award will vest. Balance
will vest equally over the subsequent
two years with fulfillment of
service requirements.
Vesting based on meeting stated
performance conditions over a
three-year performance period.
Payout
0% - 150% depending on
the achievement of pre-set
performance targets over the
performance period.
0% - 200% depending on
the achievement of pre-set
performance targets over the
performance period.
EBITDAR denotes Earnings before Interest, Taxes, Depreciation, Amortisation and Rentals on leased aircraft.
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
Date of grant
Number of Restricted Shares
RSP
01.07.2008 29.07.2009 22.07.2010 01.07.2011 10.07.2012 Balance at
1.4.2012/
date of grant Adjustment*
Vested
Cancelled
91,553 222,401 547,027 573,268 584,103 2,018,352 -
-
(59,807)
-
-
(59,807) (91,553) (115,252) (265,110) -
-
(471,915) -
(2,017) (2,720) (17,729) (3,780) (26,246) Balance at
31.03.2013
105,132
219,390
555,539
580,323
1,460,384
* Adjustment at the end of two-year performance period upon meeting performance targets and adjustments for number of days in service
for retirees.
Date of grant
Number of Performance Shares
PSP
29.07.2009
22.07.2010 01.07.2011
10.07.2012 #
Balance at
1.4.2012/
date of grant Adjustment#
Vested
Cancelled
205,222 164,590 153,999 181,213 705,024 (15,342) -
-
-
(15,342)
(189,880) -
-
-
(189,880) -
(8,473) -
-
(8,473) Balance at
31.03.2013
156,117
153,999
181,213
491,329
Adjustment at the end of three-year performance period upon meeting performance targets and adjustment for number of days in service
for retirees.
138
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
5
Staff Costs (in $ million) (continued)
Share-based compensation expense (continued)
Share-based incentive plans (continued)
Fair value of share awards granted
The fair value of services received in return for shares awarded is measured by reference to the fair value of shares granted
each year under the RSP and PSP. The estimate of the fair value of the services received is measured based on a Monte Carlo
simulation model, which involves projection of future outcomes using statistical distributions of key random variables including
share price and volatility of returns.
The following table lists the 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 (%) Management’s forecast in line with dividend policy
Expected volatility (%) 21.51 – 27.43 21.51
17.89 – 27.50 27.50
Risk-free interest rate (%) 0.17 – 0.25 0.23 0.42 – 0.75 0.52
Expected term (years) 2.0 – 4.0 3.0 2.0 – 4.0 3.0
Share price at date of grant ($)
10.55 10.55 14.20
14.20
For non-market conditions, achievement factors are determined based on inputs from the Board Compensation &
Industrial Relations Committee for the purpose of accrual for the RSP until the achievement of the targets can be accurately
ascertained.
Based on the Monte Carlo simulation model, the estimated fair value at date of grant for each share granted under the RSP
ranges from $8.86 to $9.69 (2012: $11.47 to $12.45) and the estimated fair value at date of grant for each share granted
under the PSP is $9.35 (2012: $12.75).
When estimating the fair value of the compensation cost, market-based performance conditions shall be taken into account.
Therefore, for performance share grants with market-based performance conditions, the compensation cost shall be charged
to the profit and loss account on a basis that fairly reflects the manner in which the benefits will accrue to the employee
under the plan over the remaining service period from date of grant to which the performance period relates, irrespective
of whether this performance condition is satisfied.
For performance share grants with non-market conditions, the Group revises its estimates of the number of share
grants expected to vest and corresponding adjustments are made to the profit and loss account and share-based
compensation reserve.
Under the PSP, eligible key senior management are required to hold a portion of the shares released to them under a share
ownership guideline which requires them to maintain a beneficial ownership stake in the Company, thus further aligning
their interests with shareholders.
139
ANNUAL REPORT 2012/13
5
Staff Costs (in $ million) (continued)
Share-based compensation expense (continued)
Share-based incentive plans (continued)
Fair value of share awards granted (continued)
The number of contingent shares granted but not released as at 31 March 2013, were 1,460,384 (2012: 1,434,249) and
491,329 (2012: 523,811) for RSP and PSP respectively. Based on the achievement factor, the actual release of the awards
could range from zero to a maximum of 2,028,315 (2012: 1,994,397) and 982,658 (2012: 1,047,622) fully-paid ordinary
shares of the Company, for RSP and PSP respectively.
Details and terms of the SIAEC RSP and SIAEC PSP have been disclosed in the Annual Report of SIAEC.
Time-based RSP
In FY2010-11, the Board Compensation & Industrial Relations Committee approved a special time-based RSP awarded to
senior management. This one-off grant of time-based RSP shares will be issued on the vesting dates.
For retirees, 50% of the shares will vest on the retirement date and the remaining 50% 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 yield over the vesting period.
Movement of time-based share awards during the financial year
Number of Time-based Restricted Shares
Date of grant
Balance at
1.4.2012
Vested
Time-based RSP
07.05.2010 444,846 444,846
(5,295) (5,295) Balance at
31.03.2013
439,551
439,551
The number of time-based restricted shares granted but not released as at 31 March 2013 was 439,551 (2012: 444,846).
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):
Interest income from short-term investments
Dividend income from short-term investments
Loss on disposal of short-term investments Income from operating lease of aircraft Amortisation of deferred loss/(gain) on sale and operating leaseback transactions Bad debts written off Write-back of impairment of trade debtors Remuneration for auditors of the Company
Audit fees Non-audit fees Exchange loss, net Currency hedging (gain)/loss Fuel hedging gain recognised in “Fuel costs” 7
Notes payable Other receivables measured at amortised cost Finance lease commitments Realised loss on interest rate swap contracts accounted as cash flow hedges Fair value gain on interest rate swap contracts accounted as fair value through profit or loss
Commitment fees (0.7)
(0.9)
0.3
(116.8)
(18.3)
1.3
(0.2)
1.5 0.5 82.5 (29.4) (33.8)
1.5
0.7
36.6
56.2
(24.0)
The Group
2012-13 2011-12
22.5 10.1 6.1 4.6 (1.2) 0.6 42.7 49.4
10.1
8.0
5.9
(1.6)
2.5
74.3
Interest Income (in $ million)
Interest income from fixed deposits and investments Amortised interest income from other receivables Others 9
(0.7) (1.0) 1.1 (92.2) 3.3
0.5 (8.8) Finance Charges (in $ million)
8
The Group
2012-13 2011-12
The Group
2012-13 2011-12
40.1 12.7 9.7 62.5 32.4
6.1
12.0
50.5
Other Non-operating Items (in $ million)
Gain on disposal of an associated company Dividends from an associated company Surplus on disposal of other property, plant and equipment Liquidated damages Return of capital by an associated company Provision for impairment in an associated company The Group
2012-13 2011-12
8.3 2.7 0.6 0.3 -
-
11.9 4.9
1.8
(0.4)
48.1
(5.6)
48.8
141
ANNUAL REPORT 2012/13
10 Exceptional Items (in $ million)
During the financial year, the Group’s exceptional items pertained to provision for penalties and costs agreed between
Singapore Airlines Cargo (“SIA Cargo”) and the Australian Competition and Consumer Commission for an amount
of AUD12.2 million ($15.5 million) and the New Zealand Commerce Commission for an amount of NZD4.4 million
($4.4 million). The penalties and costs were recommended by the parties and endorsed by the respective Courts, bringing
the Commissions’ air cargo investigations and proceedings in Australia and New Zealand to a close for SIA Cargo.
During the previous financial year, the Company and SIA Cargo accepted a settlement offer from the plaintiffs in the
Canadian air cargo class actions to resolve all such actions on an agreed basis for an amount of CAD1.05 million
($1.3 million). The settlement is without admission of any wrongdoing or liability and has been approved by the relevant
courts in Canada and is final.
With regard to an investigation conducted by the South African Competition Commission (“SACC”) concerning pricefixing on certain routes, a settlement agreement was reached which included an administrative penalty of ZAR25 million
($4.1 million). The Competition Tribunal confirmed the settlement agreement between the Company and the SACC and 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 for the year Overprovision in respect of prior years Share of joint venture companies’ taxation Share of associated companies’ taxation 122.3
(6.8) 1.3 11.7 128.5 199.2
(0.1)
1.2
13.7
214.0
Deferred taxation
Movement in temporary differences Overprovision in respect of prior years
(62.9)
(25.2)
(88.1) 40.4 (139.5)
(23.1)
(162.6)
51.4
Deferred taxation related to other comprehensive income:
Available-for-sale financial assets Cash flow hedges
Share of comprehensive income of associated and joint venture companies
The Group
2012-13 2011-12
1.1 1.5 -
2.6
(0.4)
11.0
0.2
10.8
142
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 of the companies. This is due to the uncertainty of
the recoverability of the deferred tax asset. The use of the tax losses is subject to the agreement of the tax authorities and
compliance with certain provisions of the tax legislation of the respective countries in 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:
Profit before taxation Less: Share of profits of associated and joint venture companies Taxation at statutory corporate tax rate of 17.0% Adjustments
Income not subject to tax
Expenses not deductible for tax purposes Higher effective tax rates of other countries Overprovision in respect of prior years, net
Income subject to concessionary tax rate
Tax benefit not recognised Share of associated and joint venture companies’ tax Others
Taxation The Group
2012-13 2011-12
482.0 (157.7) 324.3
448.2
(126.1)
322.1
55.1 54.8
(29.4) 26.0 9.7 (32.0) (1.0) 0.7
12.4 (1.1) 40.4 (3.3)
6.3
7.0
(23.2)
(2.4)
1.9
14.9
(4.6)
51.4
12 Earnings Per Share
Profit attributable to owners of the Parent (in $ million) Adjustment for dilutive potential ordinary shares
of subsidiary companies (in $ million)
Adjusted net profit attributable to owners of the Parent (in $ million) The Group
2012-13 2011-12
Basic
Diluted
Basic
Diluted
378.9 378.9 335.9 335.9
-
378.9 (1.8)
377.1 -
335.9 (1.7)
334.2
Weighted average number of ordinary shares in issue (in million) Adjustment for dilutive potentialordinary shares (in million)
Weighted average number of ordinary shares in issue
used for computing earnings per share (in million) 1,175.1 -
1,175.1 6.1
1,188.8 -
1,188.8
8.1
1,175.1 1,181.2 1,188.8 1,196.9
Earnings per share (cents) 32.2 31.9 28.3 27.9
143
ANNUAL REPORT 2012/13
12 Earnings Per Share (continued)
Basic earnings per share is calculated by dividing the profit attributable to owners of the Parent by the weighted average
number of ordinary shares in issue during the financial year.
For purposes of calculating diluted earnings per share, the profit attributable to owners of the Parent is adjusted to take into
account effects of dilutive potential ordinary shares of subsidiary companies and the weighted average number of ordinary
shares of the Company in issue is adjusted to take into account effects of dilutive options of the Company.
20.5 million (2011-12: 21.1 million) of the share options granted to employees under the existing employee share option
plans have not been included in the calculation of diluted earnings per share because they are anti-dilutive for the current
and previous years presented.
13 Dividends Paid and Proposed (in $ million)
The Group and
the Company
2012-13 2011-12
Dividends paid:
Final dividend of 10.0 cents per share tax exempt (one-tier) in respect of 2011-12
(2011-12: 40.0 cents per share tax exempt [one-tier] in respect of 2010-11)
117.5 Special dividend of 80.0 cents per share tax exempt (one-tier) in respect of 2010-11
-
959.3
Interim dividend of 6.0 cents per share tax exempt (one-tier) in respect of 2012-13
(2011-12: 10.0 cents per share tax exempt [one-tier] in respect of 2011-12)
70.5 118.2
188.0 1,557.2
479.7
The directors propose that a final tax exempt (one-tier) dividend of 17.0 cents per share (2011-12: final tax exempt [onetier] dividend of 10.0 cents per share) amounting to $199.8 million (2011-12: $117.5 million) be paid for the financial year
ended 31 March 2013.
14 Share Capital (in $ million)
Issued and fully paid share capital
Ordinary shares
Balance at 1 April Share options exercised and share awards
vested during the year Balance at 31 March Special share
Balance at 1 April and 31 March The Group and the Company
Number of shares
Amount
2013 2012 2013 2012
1,199,851,018 1,197,928,580 1,856.1 1,832.4
-
1,199,851,018 1,922,438
1,199,851,018
-
1,856.1 23.7
1,856.1
1
1
#
#
#
The value is $0.50
144
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
14 Share Capital (in $ million) (continued)
The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the
Company. All ordinary shares carry one vote per share without restriction.
The Company’s ability to operate its existing route network and flight frequency is derived solely from and dependent
entirely on the Air Service Agreements (“ASAs”) concluded between the Government of Singapore and the governments
of other countries. ASAs are therefore critical to the Company’s operations. In almost all the ASAs, it is a condition that the
Company must at all times be “effectively controlled” and “substantially owned” by Singapore nationals for the tenure of
the respective ASAs.
In order to comply with the above requirement, one non-tradeable Special Share was issued to the Ministry of Finance.
The Special Share enjoys all the rights attached to ordinary shares. In addition, pursuant to Article 3A of the Articles of
Association, no resolution may be passed on certain matters without prior written approval of the Special Member.
The Company can also issue non-tradeable redeemable cumulative preference shares, which carry full voting rights (“ASA
shares”). When issued, the ASA shares will be paid at $0.01 each and will carry equal voting rights as those of ordinary
shares. These shares will be issued only when the directors determine that the Company’s operating rights under any of
the ASAs are threatened by reason of the nationality of the majority shareholders.
During the financial year, the Company did not issue any shares (2011-12: 1,922,438) upon exercise of options granted
under the ESOP. Neither were shares (2011-12: nil) issued for RSP and PSP.
15 Treasury Shares (in $ million)
Balance at 1 April
Purchase of treasury shares Treasury shares reissued pursuant to equity compensation plans:
- For cash on exercise of employee share options
- Transferred from share-based compensation reserve - Loss on reissuance of treasury shares
Balance at 31 March
The Group and
the Company
31 March
2013 2012
(258.4)
(37.7) (43.0)
(272.1)
15.6 9.4
1.3 26.3 (269.8) 32.2
13.9
10.6
56.7
(258.4)
Treasury shares relate to ordinary shares of the Company that are held by the Company.
During the financial year, the Company purchased 3,655,000 (2011-12: 24,213,000) of its ordinary shares by way of
on-market purchases at share prices ranging from $10.20 to $10.77 (2011-12: $10.16 to $14.23). The total amount paid
to purchase the shares was $37.7 million (2011-12: $272.1 million) and this is presented as a component within equity
attributable to owners of the Parent.
The Company reissued 1,712,015 (2011-12: 3,291,677) treasury shares pursuant to its employee share option plans at a
weighted average exercise price of $9.14 (2012: $9.84) each. In addition, 471,915 (2011-12: 550,777) shares, 189,880
(2011-12: 292,230) shares and 5,295 (2011-12: 58,570) shares were reissued pursuant to the RSP, PSP and time-based
RSP respectively. The number of treasury shares as at 31 March 2013 was 24,355,389 (2012: 23,079,494).
Where the consideration paid by the Company for the purchase or acquisition of treasury shares is made out of revenue reserves,
such consideration will correspondingly reduce the amount available for the distribution of cash dividends by the Company.
145
ANNUAL REPORT 2012/13
16 Other Reserves (in $ million)
Capital reserve Foreign currency translation reserve Share-based compensation reserve Fair value reserve General reserve The Group 31 March
2013 2012 The Company
31 March
2013 2012
110.3 99.1 (9.4) (191.8) (186.3) -
151.7 165.9 124.5 (27.1) (47.6) 2.9 11,475.3 11,264.6 10,254.3 11,518.4 11,295.7 10,372.3 (8.1)
133.7
(9.8)
11,133.4
11,249.2
(a) Capital reserve
Capital reserve mainly arises from the revaluation of land and buildings owned by RCMS Properties Private Limited, an
associated company, and the gains or losses on the reissuance of treasury shares.
(b) Foreign currency translation reserve
The foreign currency translation reserve represents exchange differences arising from the translation of the financial
statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.
(c) Share-based compensation reserve
Share-based compensation reserve represents the equity-settled share options and awards granted to employees. The
reserve is made up of the cumulative value of services received from employees recorded on grant of equity-settled
share options and awards.
(d) Fair value reserve
Fair value reserve records the cumulative fair value changes of available-for-sale financial assets and the portion of
the fair value changes (net 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 fair value changes Balance at 31 March 0.8 4.2 5.0
3.0 (2.2) 0.8
(0.3) 2.2
1.9 (0.3)
(0.3)
Gain/(Loss) on fair value changes Recognised in the profit and loss account
on disposal of available-for-sale investments
3.0 (2.4) 2.1 (0.3)
1.2 4.2
0.2 (2.2) 0.1 2.2
-
(0.3)
146
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
31 March
2013 2012
Balance at 1 April Net gain on fair value changes Balance at 31 March
(48.4) 16.3 (32.1) (141.0) 92.6 (48.4) (9.5) 10.5
1.0
(94.2)
84.7
(9.5)
Gain on fair value changes Share of associated companies’ net (loss)/gain
on fair value reserve Recognised in the carrying value of non-financial
assets on occurrence of capital expenditure commitments Recognised in the profit and loss account on occurrence of:
Fuel hedging contracts recognised in “Fuel costs” Foreign currency contracts recognised in
“Other operating expenses” Interest rate swap contracts recognised in “Finance charges” 55.5 16.2 41.5 14.9
(1.0) 0.6 -
-
1.2 35.9
1.2 35.9
Total fair value reserve (28.2) (19.9) (23.0) (16.5)
(15.8) 4.6 16.3 53.9 5.9 92.6 (9.2) -
10.5 50.4
84.7
(27.1) (47.6) 2.9 (9.8)
(e) General reserve
General reserve comprises mainly retained earnings of the Group and the Company. Movements in the Group’s and
the Company’s general reserves are set out in the Statement of Changes in Equity respectively.
17 Deferred Account (in $ million)
Deferred gain/(loss) on sale and leaseback transactions
- operating leases - finance leases Deferred credit Presented as:
- Non-current assets - Non-current liabilities The Group 31 March
2013
2012
The Company
31 March
2013 2012
14.0 10.1 24.1 106.5 130.6 (39.7) 12.5 (27.2) 199.9 172.7 21.3 -
21.3 106.5 127.8 (33.7)
(33.7)
199.9
166.2
(16.1) 146.7 130.6 (51.7) 224.4 172.7 -
127.8 127.8 (33.7)
199.9
166.2
147
ANNUAL REPORT 2012/13
18 Deferred Taxation (in $ million)
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 1,919.8
1,981.1 (61.3) (161.1) 1,575.0 1,638.4
Revaluation of fuel hedging
contracts to fair value 8.6 7.9 -
-
7.4 6.6
Revaluation of currency hedging
contracts to fair value 3.7 2.8 -
-
2.5 1.9
Revaluation of available-for-sale
financial assets to fair value 1.3 0.3 -
-
0.6 Other temporary differences 90.9 113.0 (22.1) 0.4 85.6 106.4
Gross deferred tax liabilities 2,024.3 2,105.1 (83.4) (160.7) 1,671.1
1,753.3
Deferred tax assets
Unabsorbed capital allowances
and tax losses Revaluation of fuel hedging
contracts to fair value Revaluation of currency hedging
contracts to fair value Revaluation of interest rate cap
contracts to fair value Revaluation of available-for-sale
financial assets to fair value Other deferred tax assets Gross deferred tax assets Net deferred tax liabilities (13.0) (7.8) (12.9) (6.9) -
-
(1.1) (0.1) -
-
(0.9) (0.1)
(3.2) (2.7) -
-
(2.7) (2.1)
(7.2) (8.6) -
-
(7.2) (8.6)
-
(48.5) (73.0) (0.1) (56.7) (76.0) -
8.2 (4.7) -
5.0 (1.9) -
(39.0) (49.8) (0.1)
(47.6)
(58.5)
1,621.3 1,694.8
2.1 9.5
1,951.3 2,029.1 Deferred tax credited to profit and loss Deferred tax charged to equity 2.6 (88.1) (162.6)
10.6 148
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
19 Long-Term Liabilities (in $ million)
The Group
31 March
The Company
31 March
2013
2012
2013
Notes payable
Non-current 800.0 800.0 800.0 800.0
Loans
Current 5.7 2.4 -
-
67.8 140.6 208.4 64.8 210.6 275.4 -
-
-
-
4.3 3.9 8.2 -
7.9 7.9 4.3 3.9 8.2 7.9
7.9
944.5 1,018.5 803.9 807.9
Finance lease commitments
Current Non-current Maintenance reserve
Current Non-current Total long-term liabilities 2012
Notes payable
Notes payable at 31 March 2013 comprise unsecured notes and bonds issued by the Company.
$500 million fixed rate notes due 2020 (“Series 001 Notes”) bear fixed interest at 3.22% per annum and are repayable
on 9 July 2020. The fair value of notes payable amounted to $513.4 million as at 31 March 2013 (2012: $504.2 million)
for the Company.
$300 million bonds bear fixed interest at 2.15% per annum and are repayable on 30 September 2015. The fair value of
notes payable amounted to $306.8 million as at 31 March 2013 (2012: $301.3 million) for the Company.
Loans
The revolving credit facility denominated in USD taken by a subsidiary company is unsecured and bears a fixed interest at
2.30% (2011-12: 2.50%) per annum. The carrying amounts of the loans are reasonable approximation of their fair value
due to their short-term nature.
Finance lease commitments
SIA Cargo holds 4 B747-400 freighters under finance leases, which mature between 2014 and 2018, without any options
for renewal. 3 leases have options for SIA Cargo to purchase the aircraft at the end of the lease period of 12 years. The
fourth lease has an option for SIA Cargo to purchase the aircraft at the end of the 12th or 15th year of the lease period.
Sub-leasing is allowed under the lease agreements.
Interest rates on 3 of SIA Cargo’s finance lease commitments are charged at a margin above the London Interbank Offered
Rate (“LIBOR”). These ranged from 0.34% to 1.41% (2011-12: 0.28% to 1.14%) per annum. The interest rate on the fourth
finance lease commitment is fixed at 5.81% (2011-12: 5.81%) per annum. The net carrying amounts approximate the fair
value as the interest rate approximates the market rate.
149
ANNUAL REPORT 2012/13
19 Long-Term Liabilities (in $ million) (continued)
Finance lease commitments (continued)
SIA Cargo continues to remain the primary obligor under the lease agreements, and as such, there are unpaid lease
commitments of $77.9 million (2012: $78.8 million) as at 31 March 2013. Out of this, $61.9 million (2012: $59.3 million)
are covered by funds placed with financial institutions under defeasance to provide for payments due at time of exercise
of purchase option at the end of the 12th year or 15th year of the lease period. The funds placed with financial institutions
are expected to generate interest in order to meet the obligation at time of maturity. These arrangements have not been
included in the financial statements.
Future minimum lease payments under these finance leases are as follows:
Not later than one year Later than one year but not later than five years Later than five years Total minimum lease payments Amounts representing interest Present value of minimum lease payments The Group
31 March
2013 Minimum Present Lease Value of Payments Payments 72.4 151.3 -
223.7 (15.3) 208.4 67.8 140.6 -
208.4
-
208.4 2012
Minimum Present
Lease Value of
Payments Payments
72.2 204.3 22.1 298.6 (23.2) 275.4 64.8
189.3
21.3
275.4
275.4
20 Provisions (in $ million)
Included are provisions for warranty claims, provisions made for upgrade 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
The Company
31 March
2013 2012 2013 2012
Balance at 1 April Provision during the year Provision utilised during the year Provision written back during the year Balance at 31 March 353.9 181.8 (28.5) (13.6)
493.6 264.5 157.1 (44.0) (23.7) 353.9 294.2 172.8 (12.9) (12.8) 441.3 224.3
133.4
(44.0)
(19.5)
294.2
Current Non-current 72.3 421.3 493.6 35.3 318.6 353.9 65.2 376.1 441.3 35.1
259.1
294.2
150
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
21 Property, Plant and Equipment (in $ million)
The Group
Aircraft
Aircraft spare
Aircraft
spares
engines
Cost
At 1 April 2011 19,610.8 686.9 394.0 Additions
94.9
21.6 4.2 Transfers 1,709.7 -
7.7 Disposals
(2,186.2) (93.7)
(100.8) Exchange differences -
-
-
At 31 March 2012 19,229.2 614.8 305.1 Additions 212.7 28.2 8.8 Transfers 1,379.1 0.3 (59.0) Disposals
(1,676.7) (31.0) (56.8) Exchange differences -
-
-
At 31 March 2013 19,144.3 612.3 198.1
Accumulated depreciation and impairment loss
At 1 April 2011 Depreciation
Impairment loss Transfers Disposals Exchange differences At 31 March 2012 Depreciation Impairment loss Transfers Disposals Exchange differences At 31 March 2013 Net book value
At 31 March 2012 At 31 March 2013 8,498.9 1,433.3 14.3 (7.6) (1,733.9) -
8,205.0 1,445.6 9.2 56.4 (1,118.0) -
8,598.2 390.5 27.7 0.2 -
(69.3) -
349.1 28.1 -
(0.3) (19.5) -
357.4 225.0
19.4
0.3 7.3 (40.5) -
211.5
19.9 -
(59.9) (48.0) -
123.5 11,024.2 10,546.1 265.7 254.9 93.6 74.6 151
ANNUAL REPORT 2012/13
Freehold
Freehold land
buildings
Leasehold
land and
Plant and
buildings
equipment
15.7 148.6 617.4 672.2
-
-
0.5 13.6 -
-
(0.2) 70.3 -
-
-
(31.6)
-
-
(0.1) (0.1) 15.7 148.6 617.6 724.4 -
-
0.6 11.6 -
-
8.9 84.8 -
(0.3) -
(33.2) -
-
(0.2) -
15.7 148.3 626.9 787.6 Office and
computer
equipment
Advance and
progress
payments
Total
283.8 6.9 10.5 (23.8)
-
277.4 2.2 3.3 (11.0) -
271.9 1,796.3 1,504.1 (1,798.0) -
-
1,502.4 1,632.4 (1,417.4) -
-
1,717.4 24,225.7
1,645.8
(2,436.1)
(0.2)
23,435.2
1,896.5
(1,809.0)
(0.2)
23,522.5
-
-
-
-
-
-
-
-
-
-
-
-
-
108.8 4.2 -
-
-
-
113.0 4.1 -
-
(0.3) -
116.8 398.3 18.6 -
-
-
-
416.9 14.8 -
-
-
(0.1) 431.6 498.2
54.9 1.0
0.3 (31.1) (0.1) 523.2 51.0 0.6
3.8 (31.4) 0.1 547.3 228.4 30.4
-
-
(23.7) -
235.1 25.6 -
-
(11.0) -
249.7 -
-
-
-
-
-
-
-
-
-
-
-
-
10,348.1
1,588.5
15.8
(1,898.5)
(0.1)
10,053.8
1,589.1
9.8
(1,228.2)
10,424.5
15.7 15.7 35.6 31.5 200.7 195.3 201.2 240.3 42.3 22.2 1,502.4 1,717.4 13,381.4
13,098.0
152
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
21 Property, Plant and Equipment (in $ million) (continued)
The Company
Aircraft
Aircraft spare
Aircraft
spares
engines
Cost
At 1 April 2011 16,229.6
529.2 274.1 Additions 93.2 10.7 -
Transfers 1,498.1 -
7.7 Disposals (2,210.9) (91.7) (94.1) At 31 March 2012 15,610.0 448.2 187.7 Additions
123.9
14.1 -
Transfers 1,264.7 -
(70.2) Disposals (1,638.2) (24.2) (45.2) At 31 March 2013 15,360.4 438.1
72.3 Accumulated depreciation and impairment loss
At 1 April 2011
Depreciation Impairment loss Transfers Disposals
At 31 March 2012
Depreciation Impairment loss Transfers Disposals
At 31 March 2013 7,092.1 1,191.9 10.8 (7.6) (1,662.7) 6,624.5
1,175.3 7.0 56.0 (1,056.3) 6,806.5 331.0 17.7 -
-
(68.1) 280.6
17.2 -
-
(13.4) 284.4 130.7
12.9
-
7.3 (34.0) 116.9 12.5 -
(59.8) (36.5)
33.1 Net book value
At 31 March 2012
At 31 March 2013
8,985.5 8,553.9 167.6 153.7 70.8 39.2 153
ANNUAL REPORT 2012/13
Freehold
Freehold land
buildings
Leasehold
land and
Plant and
buildings
equipment
15.7
148.7 341.7 350.4 -
-
-
1.2 -
-
-
59.0 -
-
-
(18.4) 15.7 148.7 341.7 392.2 -
-
-
0.6 -
-
-
80.6 -
(0.3)
-
(15.3) 15.7 148.4
341.7 458.1 Office and
computer
equipment
Advance and
progress
payments
Total
235.8 4.3 7.4
(18.7) 228.8 1.0 1.3 (8.5) 222.6 1,642.3 1,280.1 (1,572.2)
-
1,350.2 1,311.0 (1,276.4) -
1,384.8 19,767.5
1,389.5
(2,433.8)
18,723.2
1,450.6
(1,731.7)
18,442.1
-
-
-
-
-
-
-
-
-
-
-
108.9 4.2 -
-
-
113.1 4.1 -
-
(0.3) 116.9 304.7
8.9 -
-
-
313.6
4.6 -
-
-
318.2 236.4
33.8 -
0.3 (18.4) 252.1
35.2 -
3.8 (15.1)
276.0 186.3
26.5
-
-
(18.7) 194.1 22.1 -
-
(8.5) 207.7 -
-
-
-
-
-
-
-
-
-
-
8,390.1
1,295.9
10.8
(1,801.9)
7,894.9
1,271.0
7.0
(1,130.1)
8,042.8
15.7 15.7 35.6 31.5 28.1 23.5 140.1 182.1 34.7 14.9 1,350.2 1,384.8 10,828.3
10,399.3
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
0.1
617.1
Advance and progress payments comprise mainly purchases of aircraft and related equipment.
22 Intangible Assets (in $ million)
The Group
Computer
software and
others
Cost
At 1 April 2011 358.7 Additions 5.9 Disposals (4.6) Transfers 16.0 Exchange differences -
At 31 March 2012 376.0 Additions 44.8 Disposals (8.7) Transfers 60.1 Exchange differences -
At 31 March 2013 472.2 Accumulated amortisation
At 1 April 2011 Amortisation Disposals At 31 March 2012 Amortisation Disposals At 31 March 2013 308.5 23.1 (4.6) 327.0 22.7 (8.6) 341.1 Net book value
At 31 March 2012 At 31 March 2013 49.0
131.1
Deferred
engine
development
cost
Advance
and
progress
payments
Total
21.8 12.5 -
-
0.1 34.4 12.4 -
(0.3) (0.6) 45.9 53.2 37.7 -
(16.0) -
74.9 26.4 -
(59.8) -
41.5 433.7
56.1
(4.6)
0.1
485.3
83.6
(8.7)
(0.6)
559.6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
308.5
23.1
(4.6)
327.0
22.7
(8.6)
341.1
34.4 45.9 74.9 41.5
158.3
218.5
155
ANNUAL REPORT 2012/13
22 Intangible Assets (in $ million) (continued)
The Company
Computer
software and
others
Cost
At 1 April 2011 Additions Transfers Disposals At 31 March 2012 Additions Transfers Disposals
At 31 March 2013 Accumulated amortisation
At 1 April 2011 Amortisation Disposals
At 31 March 2012 Amortisation Disposals
At 31 March 2013 Net book value
At 31 March 2012 At 31 March 2013 Advance
and
progress
payments
Total
279.0 4.9 13.0 (4.2) 292.7 42.9 54.7 (4.8)
385.5
51.1 33.4 (13.0)
-
71.5 22.7 (54.7)
-
39.5 330.1
38.3
(4.2)
364.2
65.6
(4.8)
425.0
239.3
17.9
(4.2)
253.0 17.8 (4.8)
266.0
-
-
-
-
-
-
-
239.3
17.9
(4.2)
253.0
17.8
(4.8)
266.0
39.7 119.5 71.5 39.5 111.2
159.0
The carrying value of the landing slots classified under “others” is assessed for impairment annually as the landing slots
have indefinite useful life. The recoverable amount of the landing slots has been determined based on value-in-use
calculations using 5-year cash flow projection approved by management. A reasonable change to the assumptions used
by management to determine the impairment required, particularly the discount rate and long-term growth rate, would not
significantly affect the results.
156
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
23 Subsidiary Companies (in $ million)
The Company
31 March
2013 2012
Investment in subsidiary companies (at cost)
Quoted equity investments
Unquoted equity investments Accumulated impairment loss
2,055.4 2,055.4 (25.3) 2,030.1 2,055.4
2,055.4
(16.6)
2,038.8
Market value of quoted equity investments 4,123.8 3,506.1
#
#
#
The value is $1.
During the financial year:
1. SIAEC invested an additional of $3.2 million and $8.9 million in NexGen Network (1) Holding Pte Ltd (“NGN1”) and
NexGen Network (2) Holding Pte Ltd (“NGN2”) respectively, in accordance the agreement.
2. The Company placed its wholly-owned subsidiary company, SIA Properties (Pte) Ltd (“SIAP”) under members’
voluntary liquidation. An impairment loss of $8.7 million was recognised to write down this subsidiary company to
its recoverable amount.
There are no existing loans to subsidiary companies as at 31 March 2013.
The subsidiary companies at 31 March are:
Country of incorporation and
Principal activities
place of business
SIA Engineering Company Limited Engineering services Aircraft Maintenance Services Provide aircraft maintenance services,
Australia Pty Ltd* including technical and non-technical
handling at the airport
Percentage of
equity held by
the Group
2013
2012
Singapore 78.6 79.3
Australia
78.6
79.3
NexGen Network (1) Holding Pte Ltd
Investment holding Singapore 78.6 79.3
NexGen Network (2) Holding Pte Ltd
Investment holding - do - 78.6 79.3
SIA Engineering (USA), Inc.@
Provide aircraft maintenance services,
United States
including technical and non-technical of America
handling at the airport
78.6 79.3
SIAEC Global Pte Ltd Singapore 78.6 79.3
Philippines 51.1 51.6
Investment holding
SIA Engineering (Philippines) Provide airframe maintenance and
Corporation* component overhaul services
157
ANNUAL REPORT 2012/13
23 Subsidiary Companies (in $ million) (continued)
The subsidiary companies at 31 March are:
Country of incorporation and
Principal activities
place of business
Singapore Jamco Pte Ltd
Manufacturing aircraft cabin equipment
and refurbishment of aircraft galleys
Singapore 51.1
51.6
- do - 40.1 40.5
Philippines 40.1 40.5
Singapore 100.0 100.0
- do - 51.0 51.0
People’s Republic of China
51.0 51.0
Aerospace Component Engineering
Repair and overhaul of hydro-
Services Pte Limited mechanical equipment for Boeing
and Airbus aircraft
Aviation Partnership (Philippines) Provide aircraft maintenance services
Corporation* including technical and non-technical
handling at the airport
Singapore Airlines Cargo Pte Ltd
Air cargo transportation Cargo Community Network Pte Ltd
Providing and marketing of cargo
community systems
Cargo Community (Shanghai) Co Ltd**+ Marketing and support of portal
services for the air cargo industry
Percentage of
equity held by
the Group
2013
2012
SilkAir (Singapore) Private Limited Air transportation Singapore 100.0 100.0
Scoot Pte. Ltd. Air transportation - do - 100.0 100.0
Tradewinds Tours & Travel
Private Limited
Tour wholesaling - do - 100.0 100.0
Singapore Aviation and General
Insurance Company (Pte) Limited
Aviation insurance - do - 100.0 100.0
SIA Properties (Pte) Ltd Under liquidation - do - 100.0 100.0
Singapore Flying College Pte Ltd Training of pilots - do - 100.0 100.0
Sing-Bi Funds Private Limited Inactive - do - 100.0 100.0
Singapore Airport Duty-Free Inactive
Emporium (Private) Limited
- do - 76.0 76.0
Abacus Travel Systems Pte Ltd Marketing of Abacus Computer
reservations systems
- do - 61.0 61.0
Mauritius 100.0 100.0
SIA (Mauritius) Ltd@ Pilot recruitment All the Singapore-incorporated subsidiary companies are audited by Ernst & Young LLP, Singapore
* Audited by member firms of Ernst & Young Global in the respective countries
** Audited by Shanghai Hui Hong Certified Public Accountants Co., Ltd, China
@
Not required to be audited under the law in country of incorporation
+
Financial year end 31 December
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 off to reserves Foreign currency translation reserve Share of post-acquisition reserves
- general reserve - fair value reserve - capital reserve 466.0 1,677.2 2,143.2 (15.0)
2,128.2 (1,612.3)
(183.1) 471.8
1,677.2
2,149.0
(20.8)
2,128.2
(1,612.3)
(179.1)
140.0 (38.6) 120.2 554.4 136.3
(37.6)
107.7
543.2
Loans to associated companies Write-down of loans
-
-
-
554.4 4.5
(4.5)
543.2
Investment in associated companies (at cost)
Unquoted equity investments Quoted equity investments Accumulated impairment loss Market value of quoted equity investments During the financial year:
The Company
31 March
2013 2012
1,646.7 63.8 1,710.5 (1,178.0) 532.5 1,646.7
63.8
1,710.5
(9.4)
1,701.1
182.6 206.8
1. RCMS Properties Private Limited recorded a revaluation gain of $62.3 million (2011-12: $89.7 million) from its annual
revaluation exercise of its land and building. The Group’s share of the revaluation gain of $12.5 million (2012: $17.9
million) at 31 March 2013 is included under the share of post-acquisition capital reserve.
2. The Group divested its 20% interest in an associated company, PT Purosani Sri Persada (“PTPSP”) to PT Suryaraya
Investama. Following the divestment, PTPSP ceased to be an associated company of the Group. The loan to PTPSP
which was fully provided for was written off. The Group recognised a gain on disposal of $8.3 million (Note 9).
3. The Company recorded an impairment loss of $1,168.6 million on its investment in Virgin Atlantic Limited (“VAL”) to
write down its carrying value to a recoverable value of USD360.0 million ($447.0 million). The impairment loss is only
recognised at the Company level as the investment in VAL has been fully written down at the Group level.
159
ANNUAL REPORT 2012/13
24 Associated Companies (in $ million) (continued)
4. The Group has not recognised net liabilities relating to an associated company where its share of net liabilities
exceeds the Group’s interest in this associated company. The Group’s cumulative share of net liabilities at the end
of the reporting period was $98.6 million (2012: $96.4 million). The Group has no obligation in respect of these
unrecognised liabilities.
Loans to associated companies are unsecured and have no foreseeable terms of repayments. Accordingly, the fair values
of the loans are not determinable as the timing of future cash flows arising from the loans cannot be estimated reliably.
Cost of investment included cumulative redeemable preference shares of $66.5 million issued by VAL. The cumulative
redeemable preference shares carry no entitlement to vote at meetings. On a winding up of VAL, the preference shareholders
have a right to receive, in preference to payments to ordinary shareholders, the amount paid up on any share including any
amount paid up by way of share premium plus any arrears or accruals of dividend declared but not paid on the due date.
The summarised financial information of the associated companies, not adjusted for the proportion of ownership interest
held by the Group, are as follows:
Assets and liabilities
Current assets Non-current assets Current liabilities Non-current liabilities
Results
Revenue Profit for the period The Group
31 March
2013 2012
1,014.8 2,033.4 3,048.2 (578.1) (677.7) (1,255.8) 1,101.2
2,019.8
3,121.0
(690.8)
(673.8)
(1,364.6)
2012-13 2011-12
2,409.5 126.5 2,708.9
74.1
160
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
24 Associated Companies (in $ million) (continued)
The associated companies at 31 March are:
Country of
incorporation and
Principal activities
place of business
Virgin Atlantic Limited*+ Air transportation Percentage of
equity held by the Group
2013 2012
United Kingdom
49.0 49.0
Singapore 32.7 32.7
- do - 20.0 20.0
Combustor Airmotive Services Repair and overhaul of aircraft engine
Pte Ltd^+++ combustion chambers, guides,
fuel nozzles and related parts
- do - 38.5 38.9
Eagle Services Asia Private Limited^++ - do - 38.5 38.9
- do -
38.5 38.9
Indonesia 38.5
38.9
PWA International Limited^^+++
Repair, overhaul and re-manufacture of aircraft turbine engine cases, components and related parts
Republic of
Ireland
38.5 38.9
Safran Electronics Asia Pte Ltd@@@++
Provide avionics maintenance, repair
and overhaul services
Singapore 38.5
38.9
Southern Airports Aircraft Maintenance Provide aircraft maintenance services,
Services Company Limited@@++ including technical and non-technical
handling at the airport
Vietnam 38.5 38.9
Pan Asia Pacific Aviation Services Provide aircraft maintenance services,
Ltd@@@@ including technical and non-technical
handling at the airport
Hong Kong 37.0
37.3
Singapore 35.4 35.7
Panasonic Avionic Services Singapore IFE maintenance, repair and overhaul
Pte. Ltd.** and ancillary services
- do - 33.4 33.7
Goodrich Aerostructures Service Repair and overhaul of aircraft nacelles,
Centre-Asia Pte Ltd@++ thrust reservers and pylons
- do - 31.5 31.7
Messier Services Asia Private Limited@++ Repair and overhaul of Boeing and
Airbus series landing gears
- do - 31.5 31.7
Asian Surface Technologies Repair and overhaul of aircraft engine
Pte Ltd@@@++ fan blades
- do -
30.8 31.1
Tiger Airways Holdings Limited Investment holding RCMS Properties Private Limited^++ Hotel ownership and management @
Repair and overhaul of aircraft engines Fuel Accessory Service Technologies Repair and overhaul of engine fuel
Pte Ltd^+++ components and accessories
PT JAS Aero-Engineering Provide aircraft maintenance services,
Services@@++ including technical and non-technical
handling at the airport
Jamco Aero Design & Engineering Provide turnkey solutions for aircraft
Pte Ltd@ interior modifications
161
ANNUAL REPORT 2012/13
24 Associated Companies (in $ million) (continued)
The associated companies at 31 March are:
Country of
incorporation and
Principal activities
place of business
International Aerospace Tubes-Asia Repair of tubes, ducts and manifolds
Pte Ltd^++ for aircraft engines and airframe
application
Percentage of
equity held by the Group
2013 2012
- do - 26.2 26.4
Asian Compressor Technology Repair and overhaul of aircraft engine
Services Co Ltd^^++ high pressure compressor stators
Taiwan
19.3 19.4
Turbine Coating Services Repair and overhaul of aircraft engine
Private Ltd^+++ turbine airfoils
Singapore 19.3 19.4
PT Purosani Sri Persada Indonesia -
20.0
People’s
Republic of
China
25.0 25.0
Hotel ownership and management Great Wall Airlines Company Limited Under liquidation
#++
@@@
@
@@
@@@@
* ** ^
^^ #
+
+++
++
Audited by Ernst & Young LLP, Singapore
Audited by member firms of Deloitte & Touche
Audited by RSM Chio Lim, Singapore
Audited by BDO Limited, Hong Kong
Audited by member firms of KPMG
Audited by KPMG, Singapore
Audited by Pricewaterhouse Coopers LLP, Singapore
Audited by member firms of Pricewaterhouse Coopers
Audited by Shanghai Linfang Certified Public Accountants Co., Ltd, China
Financial year end 28 February
Financial year end 31 December
Financial year end 30 November
25 Joint Venture Companies (in $ million)
Investment in joint venture companies (unquoted, at cost) Share of post-acquisition reserves
- general reserve - share of other comprehensive income
- foreign currency translation reserve The Group
31 March
2013 2012
56.6 56.6
90.0 -
(25.8) 120.8 82.2
(0.5)
(25.1)
113.2
162
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:
Assets and liabilities
Current assets Non-current assets Current liabilities
Non-current liabilities
Results Revenue Expenses
The Group
31 March
2013 2012
209.7 83.4 293.1 (89.4)
(82.9)
(172.3) 194.7
61.0
255.7
(84.1)
(58.4)
(142.5)
2012-13 2011-12
1,135.4 (1,039.2)
96.2 754.8
(680.1)
74.7
The joint venture companies at 31 March are:
Principal activities
Percentage of
Country of
equity held by incorporation and
the Group
place of business2013 2012
International Engine Component Repair and overhaul of aero Overhaul Pte Ltd engine components and parts
Singapore
39.3
39.7
Singapore Aero Engine Services
Repair and overhaul of Pte Ltd aircraft engines
Singapore
39.3
39.7
The joint venture companies are audited by Ernst and Young LLP, Singapore and have financial year end of 31 December.
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
132.0
-
-
0.5
132.0 -
123.5 108.1 (9.2)
354.9 139.7 108.0 (9.2)
238.5
123.5 28.0 (9.2) 274.8
139.7
28.0
(9.2)
158.5
Held-to-maturity investments
Quoted non-equity investments Unquoted non-equity investments
222.4 129.6
352.0 135.2 -
135.2
222.4 129.6 352.0 135.2
135.2
706.9 373.7 626.8 293.7
The interest rate for quoted government securities is 7.00% (2011-12: nil). The interest rates for quoted and unquoted nonequity investments range from 2.63% to 5.60% (2011-12: 3.10% to 4.65%) per annum and 2.28% to 4.02% (2011-12:
1.15% to 3.20%) per annum respectively.
27 Other Receivables (in $ million)
The Group’s other receivables are stated at amortised cost and are expected to be received over a period of 2 to 4 years.
The entire balance of other receivables is denominated in USD.
28 Inventories (in $ million)
Technical stocks and stores Catering and general stocks Total inventories at lower of cost and net realisable value
The Group
31 March
2013
2012 248.5 26.4 274.9
283.0 23.1 306.1 The Company
31 March
2013 2012
173.9 18.8 192.7
204.4
17.3
221.7
The cost of inventories recognised as an expense amounts to $102.9 million (2011-12: $102.7 million). In addition, the
Group wrote down $32.3 million (2011-12: $27.3 million) of inventories, which is recognised as other operating expenses
in the profit and loss account.
164
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
29 Trade Debtors (in $ million)
Trade debtors Accrued receivables Amounts owing from:
Subsidiary companies Associated companies Joint venture companies The Group
31 March
2013
2012 The Company
31 March
2013
2012
1,499.3 57.1
1,271.8 64.1
1,080.9 -
870.2
-
-
20.0 2.0 1,578.4 -
16.6
2.3
1,354.8 189.9 -
-
1,270.8 195.2
1,065.4
Trade debtors are non-interest bearing. The carrying amount of trade debtors impaired by credit losses is reduced through
the use of an allowance account unless the Group writes off the amount ascertained to be uncollectible. In subsequent
periods when a trade debtor is ascertained to be uncollectible, it is written off against the allowance account.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation,
and default or delinquency in payments (more than 90 days aging of debtor balances) are considered indicators that the
trade debtor is impaired. Individual trade debtor is written off when management deems the amount not to be collectible.
Accrued receivables pertain to services rendered in advance of billings.
Amounts owing by subsidiary, associated and joint venture companies are unsecured, trade-related, non-interest bearing
and are repayable on demand. The amounts are neither overdue nor impaired.
The table below is an analysis of trade debtors as at 31 March:
The Group
31 March
2013
2012 The Company
31 March
2013 2012
Not past due and not impaired
Past due but not impaired 1,449.6
128.3
1,577.9 1,239.4 114.4 1,353.8 1,253.8
16.5 1,270.3
1,052.3
12.1
1,064.4
Impaired trade debtors - collectively assessed Less: Accumulated impairment losses 3.8 (3.5) 0.3 9.0 (8.1) 0.9 0.5 (0.2) 0.3 1.4
(0.5)
0.9
-
5.3
Impaired trade debtors - individually assessed
Customers in bankruptcy or other financial reorganisation
Customers who default in payment within stipulated framework
of IATA Clearing House or Bank Settlement Plan
Less: Accumulated impairment losses
Total trade debtors, net 6.1 12.5
2.5 (8.4) 0.2 2.2
(14.6) 0.1
2.0 (1.8) 0.2 1.7
(6.9)
0.1
1,578.4 1,354.8 1,270.8 1,065.4
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 year
Written off during the year Balance at 31 March 22.7
(8.8) (2.0)
11.9 24.5 (0.2) (1.6)
22.7 7.4 (5.4) -
2.0 8.2
(0.8)
7.4
Bad debts written off directly to profit and loss
account, net of debts recovered 0.5 1.3 0.2 1.2
As at 31 March 2013, the composition of trade debtors held in foreign currencies by the Group is as follows: USD –
35.2% (2012: 31.2%), AUD – 9.9% (2012: 11.1%), EUR – 7.2% (2012: 8.0%), GBP – 5.1% (2012: 5.1%) and JPY –
2.9% (2012: 4.7%).
There was no loan to directors of the Company and its subsidiary companies.
30 Deposits and Other Debtors (in $ million)
The Group
31 March
2013
2012 The Company
31 March
2013
2012
Deposits Other debtors
16.1 38.8 54.9 8.6 28.0 36.6
14.2 32.6 46.8 8.2
18.5
26.7
166
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
31 Investments (in $ million)
The Group
31 March
2013 2012
Available-for-sale investments
Quoted
Government securities 2.5 4.1 Equity investments 34.5 32.8
Non-equity investments 279.5 232.0 316.5 268.9 The Company
31 March
2013
2012
-
-
256.5 256.5 209.0
209.0
Unquoted
Government securities
Non-equity investments -
20.0 20.0 307.5
19.9
327.4 -
20.0 20.0 307.5
19.9
327.4
336.5 596.3 276.5 536.4
Held-to-maturity investments
Quoted non-equity investments
Unquoted non-equity investments 12.9 -
12.9 13.8 15.0
28.8 12.9 -
12.9 13.8
15.0
28.8
349.4 625.1 289.4 565.2
The Group’s non-equity investments comprise investments in government securities, corporate bonds, credit-linked notes
and money market funds.
The interest rates for quoted government securities range from 1.63% to 4.00% (2011-12: 1.63% to 4.00%) per annum.
The interest rates for quoted non-equity investments range from 0.05% to 5.88% (2011-12: 0.12% to 5.88%) per annum,
while unquoted non-equity investments yield an interest 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)
Fixed deposits Cash and bank The Group
31 March
2013 2012
4,692.4 367.2
5,059.6 4,260.6 442.1 4,702.7 The Company
31 March
2013
2012
4,666.8
167.5 4,834.3 4,234.0
216.7
4,450.7
As at 31 March 2013, the composition of cash and bank balances held in foreign currencies by the Group is as follows:
USD – 6.8% (2012: 10.8%), EUR – 1.9% (2012: 1.6%) and AUD – 2.8% (2012: 0.8%).
Cash at bank earns interest at floating rates based on daily bank deposit rates ranging from nil to 3.22% (2011-12: 0.01%
to 5.40%) per annum. Short-term deposits are made for varying periods of between one day and one year depending on
the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. The weighted
average effective interest rate for short-term deposits is 0.57% (2011-12: 0.55%) per annum.
167
ANNUAL REPORT 2012/13
33 Trade and Other Creditors (in $ million)
Trade creditors Funds from subsidiary companies
Amounts owing to:
Subsidiary companies Associated companies The Group
31 March
2013 2012
The Company
31 March
2013
2012
3,200.2 -
2,885.4 -
2,510.1 1,036.2 2,210.2
1,361.8
-
0.9 3,201.1 -
-
2,885.4 183.6 -
3,729.9 163.4
3,735.4
Trade and other creditors are non-interest bearing. Amounts owing to related parties are trade-related, unsecured, noninterest bearing, repayable on demand and are to be settled in cash. As at 31 March 2013, 5.9% (2012: 5.5%) of trade and
other creditors were held in USD by the Group. Included in trade and other creditors are amounts owing to related parties of
$184.5 million (2012: $137.3 million) and $142.9 million (2012: $99.2 million) for the Group and Company respectively.
Funds from subsidiary companies are unsecured and have varying repayment terms. Interest on funds from subsidiary
companies are computed using prevailing market rates which range from 0.01% to 0.56% (2011-12: 0.01% to 0.75%)
per annum for SGD funds, from 0.06% to 1.00% (2011-12: 0.02% to 0.75%) per annum for USD funds and from 3.05%
to 4.60% (2011-12: 4.40% to 5.40%) per annum for AUD funds.
As at 31 March 2013, the composition of funds from subsidiary companies held in foreign currencies by the Company is
as follows: USD – 11.0% (2012: 6.3%) and AUD – 0.5% (2012: 0.2%).
Amounts owing to subsidiary and associated companies are unsecured, trade-related, non-interest bearing and are
repayable on demand.
34 Analysis of Capital Expenditure Cash Flow (in $ million)
Purchase of property, plant and equipment
Property, plant and equipment acquired under credit terms Cash invested in capital expenditure The Group
2012-13
2011-12
1,896.5 (21.1)
1,875.4 1,645.8
(4.6)
1,641.2
35 Capital and Other Commitments (in $ million)
(a) Capital expenditure commitments
The Group and the Company have commitments for capital expenditure. Such commitments aggregated $13,255.8
million (2012: $7,511.4 million) for the Group and $9,770.4 million (2012: $7,042.2 million) for the Company. The
commitments relate principally to the acquisition of aircraft fleet and related equipment.
In addition, the Group’s share of joint venture companies’ commitments for capital expenditure totalled $23.7 million
(2012: $0.6 million).
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 with fixed rental rates. Under 5 of the aircraft lease agreements, the rentals will be adjusted if one-month LIBOR
exceeds 6.50% per annum.
The original lease terms range from 5 to 10.5 years. In 4 of the aircraft lease agreements, the Company holds options
to extend the lease for a further maximum period of 5 years. In 5 other aircraft lease agreements, the Company holds
options to extend the leases for a further maximum period of 3 years and in 24 others, the Company holds the options
to extend the leases for a further maximum period of 2 years. For one lease, the Company has the option to terminate
the lease 2 years in advance of the lease expiry date. For the other 3 agreements, there is no option for renewal.
Sub-leasing is allowed under all the lease arrangements.
SIA Cargo has 3 B747-400F aircraft under operating leases with fixed rental rates. The lease terms range from 10 to 11
years. In one of the aircraft lease agreements, SIA Cargo holds the option to extend the lease for a further maximum
period of 2 years. For the other 2 agreements, there is no option for renewal. Sub-leasing is allowed under all the lease
arrangements.
SilkAir (Singapore) Private Limited (“SilkAir”) has 6 A320-200 and 3 A319-100 aircraft under operating leases with
fixed rental rates. The original lease terms for the 3 A319-100s range from 6.9 to 11.5 years, which SilkAir holds
options to extend the leases up to a maximum of 3 years. The original lease terms for the 6 A320-200s range from
4 to 11.8 years and SilkAir holds options to extend the leases for 2 to 5 years. None of the operating lease agreements
confer on SilkAir an option to purchase the related aircraft. Sub-leasing is allowed under all the lease arrangements.
Future minimum lease payments under non-cancellable operating leases are as follows:
Not later than one year
Later than one year but not later than five years Later than five years The Group
31 March
2013
2012 641.6 1,964.4 866.3 3,472.3
561.5 1,968.1 927.0 3,456.6 The Company
31 March
2013 2012
573.6 1,813.9 791.0 3,178.5 492.2
1,768.9
828.0
3,089.1
Engines
The Company has operating lease agreements for 4 GE90-115B engines with fixed rental rates. The basic lease term
for each engine is 5 years and 10 months with an option to extend the lease for a further maximum period of 6 years.
During the financial year, the Company entered into operating lease agreements for 14 Trent 800 engines with fixed
rental rates. The basic lease term for each engine varies from 1 to 6 years with extension options.
169
ANNUAL REPORT 2012/13
35 Capital and Other Commitments (in $ million) (continued)
(b) Operating lease commitments (continued)
As lessee (continued)
Engines (continued)
Future minimum lease payments under non-cancellable operating leases are as follows:
The Group
31 March
2013
2012 The Company
31 March
2013 2012
Not later than one year Later than one year but not later than five years Later than five years 21.4 66.7 5.4 93.5 21.4 66.7 5.4 93.5 8.5 34.1
-
42.6 8.5
34.1
42.6
Property and equipment
The Group has entered into operating lease agreements for office and computer equipment, leasehold land and
buildings. These non-cancellable leases have lease terms of between 1 to 50 years.
Future minimum lease payments under non-cancellable operating leases are as follows:
Not later than one year Later than one year but not later than five years Later than five years The Group
31 March
2013
2012 65.9 93.1 69.9 228.9 59.5 87.2 86.4 233.1 The Company
31 March
2013 2012
48.1 63.8 5.7 117.6 42.7
62.3
20.0
125.0
The 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 continued during the year in accordance
with the lease contracts. The non-cancellable lease contracts were originally for a basic lease term of 2 years and
6 months for the first 3 aircraft and 2 years for the other 3 aircraft. The lease term for 4 of the aircraft had been
extended for periods ranging from 12 months to 20 months. During the financial year, 2 of the aircraft leases ceased
on expiry of the lease term. The lease rental is fixed throughout the lease term for all 6 aircraft.
SIA Cargo had previously entered into a commercial aircraft lease. This non-cancellable lease has a remaining lease
term of 2 years and 5 months. The lease rental is fixed throughout the lease term.
Future minimum lease receivables under non-cancellable operating leases are as follows:
The Group
31 March
2013
2012 The Company
31 March
2013 2012
Not later than one year Later than one year but not later than five years
70.8
20.4 91.2
58.7 3.3 62.0
96.1 79.4 175.5
83.8
49.9
133.7
170
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
36 Contingent Liabilities (in $ million)
(a) Flight SQ006
There were 83 fatalities among 179 passengers and crew members aboard the Boeing 747 aircraft, Flight SQ006, that
crashed at the Chiang Kai Shek International Airport, Taipei on 31 October 2000. All the claims have been settled by
insurers under the insurance policy procured by the Company.
(b) Cargo: Investigations by Competition Authorities and Civil Class Actions
In 2006 and thereafter, SIA Cargo and the Company were among several airlines that received notice of investigations
by competition authorities in the United States, European Union, Australia, Canada, New Zealand, South Africa, South
Korea and Switzerland as to whether surcharges, rates or other competitive aspects of air cargo service 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 Justice (USD48.0 million or $62.5 million). This amount has been reflected as exceptional items in the Group’s
accounts in FY2010-11. The plea agreement has brought the Department of Justice’s air cargo investigations in the
United States to a close for SIA Cargo.
On 30 November 2010, the Korea Fair Trade Commission (“KFTC”) released an adverse decision against 21 air cargo
airlines, including SIA Cargo, in respect of fuel surcharges. A fine of KRW3.117 billion ($3.6 million) was imposed on
SIA Cargo. The fine was paid in January 2011 in accordance with Korean laws. This amount has been reflected as
exceptional items in the Group’s accounts in FY2010-11. SIA Cargo contested the validity of the KFTC decision and
filed an appeal before the Seoul High Court. In July 2012, the Seoul High Court rejected SIA Cargo’s appeal. SIA Cargo
has appealed the Seoul High Court judgment to the Supreme Court.
On 9 November 2010, the European Commission issued an adverse decision against 13 air cargo airlines, including
SIA Cargo and the Company, in respect of fuel surcharges, security surcharges and commissions on surcharges. A fine
of EUR74.8 million ($135.7 million) was imposed on SIA Cargo and the Company. SIA Cargo paid the fine in February
2011 in accordance with European Union laws. This amount has been reflected as exceptional items in the Group’s
accounts in FY2010-11. SIA Cargo and the Company have filed an appeal to the European General Court seeking
annulment of the decision.
In July 2010, SIA Cargo was among eight airlines to receive notification that the Competition Commission of South
Africa had referred a complaint to the South Africa Competition Tribunal in respect of fuel surcharges. In August 2012,
the Competition Commission of South Africa sent a notice withdrawing the complaint referral as concerns SIA Cargo
and the Company. This step ended the proceedings in South Africa as concerns SIA Cargo and the Company.
In December 2012, SIA Cargo confirmed its acceptance of settlement agreements with the Australian Competition and
Consumer Commission and the New Zealand Commerce Commission, bringing to an end civil penalty proceedings
concerning the air cargo issues which had been initiated in 2008. SIA Cargo agreed to pay a penalty and costs amount
of AUD12.2 million ($15.5 million) in Australia. In New Zealand, SIA Cargo agreed to pay a penalty and costs amount
of NZD4.4 million ($4.4 million). SIA Cargo paid these amounts in December 2012 and January 2013 in accordance
with Australian and New Zealand laws respectively. The total Australian and New Zealand settlement amount of $19.9
million has been reflected in the exceptional items of the Group’s accounts.
171
ANNUAL REPORT 2012/13
36 Contingent Liabilities (in $ million) (continued)
(b) Cargo: Investigations by Competition Authorities and Civil Class Actions (continued)
In November 2012, the Secretariat of the Competition Commission of Switzerland issued a draft decision against 13
airlines including SIA Cargo and the Company concerning the air cargo issues. The draft decision is a notification of alleged
infringements, not an official finding by the Commission. SIA Cargo and the Company are defending these proceedings.
After the investigations commenced, civil damage lawsuits were filed in the United States, Canada, Australia, South
Korea, England and the Netherlands by private parties against several airlines, including SIA Cargo and the Company.
Other lawsuits have been threatened by customers of SIA Cargo or shippers that purportedly contracted with SIA
Cargo’s customers.
The plaintiffs in the South Korea proceedings withdrew their complaint in July 2011 and the proceedings were
accordingly dismissed without prejudice.
In June 2011, without admitting any liability, SIA Cargo and the Company reached a settlement with the plaintiffs in
Canada whereby SIA Cargo agreed to pay CAD1.05 million ($1.3 million) to resolve all liability of SIA Cargo and the
Company as concerns the civil damage lawsuits filed in Canada. This amount has been reflected as an exceptional item
in the Group’s accounts in FY2011-12.
In addition, without admitting any liability, SIA Cargo reached settlements with certain of its customers to resolve all
pending and potential future civil damage claims regarding the air cargo issues. The settlements have been reflected
in the Group’s accounts. The individual terms of such settlements are required to be kept confidential.
Apart from Canada and South Korea, the filed cases remain in their respective procedural stages and none have been
tried thus far on their respective substantive legal merits.
Apart from the exceptional items noted above, it is premature to make a provision in the financial statements for the
other pending investigations, court proceedings, civil suits, or threatened claims.
(c) Passengers: Civil Class Actions, South African settlement and Indian case
The Company and several other airlines have been named in civil class action lawsuits in the United States and Canada
alleging an unlawful agreement to fix surcharges and fares on transpacific flights. These cases are currently in the procedural
stages and none has been tried thus far on their respective substantive legal merits. As these lawsuits have neither been tried
nor the alleged damages quantified, it is premature to make a provision in the financial statements.
With regard to an investigation conducted by the South African Competition Commission (“SACC”) concerning price-fixing
on certain routes, a settlement agreement was reached in March 2012 which included an administrative penalty of ZAR25
million ($4.1 million). The Competition Tribunal confirmed the settlement agreement between the Company and the SACC
and the Company has paid the agreed upon administrative penalty.
In July 2010, the Company received notice of an investigation by the Competition Commission of India (“CCI”) concerning
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’s decision with the Competition Appellate Tribunal (“COMPAT”). The TAAI’s
appeal of the CCI decision was dismissed by the COMPAT and the TAAI has since appealed the COMPAT’s decision to the
Supreme Court of India.
172
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
36 Contingent Liabilities (in $ million) (continued)
(d) Australian Travel Agents’ Representative Actions
A former Australian travel agent, Leonie’s Travel Pty Limited, filed a representative action in the Federal Court of
Australia (New South Wales District Registry) on 15 December 2006 against 6 airlines, namely Qantas Airways Limited,
British Airways 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 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 application on behalf of Paxtours International
Travel Pty Ltd, another Australian travel agent, against CX and the Company, as Leonie’s Travel did not issue fares
against CX or the Company (the “Paxtours Case”).
On 19 August 2011, the Leonie’s Case was discontinued against the Company.
Following discussion with Paxtours’ solicitors, the parties have agreed on a settlement mechanism, which has been
approved by the court. The settlement amount paid by the Company was not material and the case is now concluded.
37 Financial Instruments (in $ million)
(a) Classification of financial instruments
Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost.
The principal accounting policies in Note 2 describe how the classes of financial instruments are measured, and how
revenue and expenses, including fair value gains and losses, are recognised.
The following tables analyse the financial assets and liabilities in the statement of financial position by the class of
financial instrument to which they are assigned, and therefore by the measurement basis:
Derivatives
Held-to-
Financial at fair value
Available-for- maturity Derivatives liabilities at
through
2013
Loans and sale financial financial
used for amortised
profit or
The Group
receivables
assets
assets
hedging
cost
loss
Total
Assets
Long-term investments -
354.9 352.0 -
-
-
706.9
Other receivables 213.9 -
-
-
-
-
213.9
Trade debtors 1,578.4 -
-
-
-
- 1,578.4
Deposits and other debtors 54.9 -
-
-
-
-
54.9
Investments -
336.5 12.9 -
-
-
349.4
Derivative assets -
-
-
79.1 -
-
79.1
Cash and bank balances 5,059.6 -
-
-
-
- 5,059.6
Total financial assets 6,906.8 691.4 364.9 79.1 -
- 8,042.2
Total non-financial assets 14,385.9
Total assets 22,428.1
Liabilities
Notes payable -
-
-
-
800.0 -
Finance lease commitments -
-
-
-
208.4 -
Loans -
-
-
-
5.7 -
Trade and other creditors -
-
-
- 3,201.1 -
Derivative liabilities -
-
-
31.9 -
41.3 Total financial liabilities -
-
-
31.9 4,215.2 41.3 Total non-financial liabilities Total liabilities 800.0
208.4
5.7
3,201.1
73.2
4,288.4
4,722.4
9,010.8
173
ANNUAL REPORT 2012/13
37 Financial Instruments (in $ million) (continued)
(a) Classification of financial instruments (continued)
Available-for-
2013
Loans and sale financial
The Company
receivables
assets
Held-to-
Financial
maturity Derivatives liabilities at
financial
used for amortised
assets
hedging
cost
Total
Assets
Long-term investments
-
274.8 352.0 -
-
626.8
Other receivables 213.9 -
-
-
-
213.9
Trade debtors 1,080.9 -
-
-
- 1,080.9
Deposits and other debtors 36.6 -
-
-
-
36.6
Amounts owing by subsidiary companies 189.9 -
-
-
-
189.9
Investments -
276.5 12.9 -
-
289.4
Derivative assets -
-
-
77.7 -
77.7
Cash and bank balances 4,834.3 -
-
-
- 4,834.3
Total financial assets 6,355.6 551.3 364.9 77.7 - 7,349.5
Total non-financial assets 13,389.4
Total assets 20,738.9
Liabilities
Notes payable -
-
-
-
800.0 Trade and other creditors -
-
-
- 2,510.1 Amount owing to subsidiary companies -
-
-
- 1,219.8 Derivative liabilities -
-
-
25.7
-
Total financial liabilities -
-
-
25.7 4,529.9 Total non-financial liabilities Total liabilities 800.0
2,510.1
1,219.8
25.7
4,555.6
4,224.7
8,780.3
174
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
37 Financial Instruments (in $ million) (continued)
(a) Classification of financial instruments (continued)
Derivatives
Held-to-
Financial at fair value
Available-for- maturity Derivatives liabilities at
through
2012
Loans and sale financial financial
used for amortised
profit or
The Group
receivables
assets
assets
hedging
cost
loss
Total
Assets
Long-term investments -
238.5 135.2 -
-
-
373.7
Other receivables 215.6
-
-
-
-
-
215.6
Trade debtors 1,354.8 -
-
-
-
- 1,354.8
Deposits and other debtors 46.8 -
-
-
-
-
46.8
Investments -
596.3 28.8 -
-
-
625.1
Derivative assets -
-
-
71.9 -
-
71.9
Cash and bank balances 4,702.7 -
-
-
-
- 4,702.7
Total financial assets 6,319.9 834.8 164.0 71.9 -
- 7,390.6
Total non-financial assets 14,652.4
Total assets 22,043.0
Liabilities
Notes payable -
-
-
-
800.0 -
Finance lease commitments -
-
-
-
275.4 -
Loans -
-
-
-
2.4 -
Trade and other creditors -
-
-
- 2,885.4 -
Derivative liabilities -
-
-
26.2 -
52.7 Total financial liabilities -
-
-
26.2 3,963.2 52.7 Total non-financial liabilities Total liabilities 800.0
275.4
2.4
2,885.4
78.9
4,042.1
4,813.5
8,855.6
175
ANNUAL REPORT 2012/13
37 Financial Instruments (in $ million) (continued)
(a) Classification of financial instruments (continued)
Available-for-
2012
Loans and sale financial
The Company
receivables
assets
Held-to-
Financial
maturity Derivatives liabilities at
financial
used for amortised
assets
hedging
cost
Total
Assets
Long-term investments -
158.5 135.2 -
-
293.7
Other receivables 215.6 -
-
-
-
215.6
Trade debtors 870.2 -
-
-
-
870.2
Deposits and other debtors 26.7 -
-
-
-
26.7
Amounts owing by subsidiary companies 195.2 -
-
-
-
195.2
Investments -
536.4 28.8 -
-
565.2
Derivative assets -
-
-
57.4 -
57.4
Cash and bank balances 4,450.7 -
-
-
- 4,450.7
Total financial assets 5,758.4 694.9 164.0 57.4 - 6,674.7
Total non-financial assets 15,009.6
Total assets 21,684.3
Liabilities
Notes payable -
-
-
-
800.0 Trade and other creditors -
-
-
- 2,210.2 Amount owing to subsidiary companies -
-
-
- 1,525.2 Derivative liabilities -
-
-
12.7 -
Total financial liabilities -
-
-
12.7 4,535.4 Total non-financial liabilities Total liabilities Derivative financial instruments included in the statements of financial position are as follows:
Derivative assets
Currency hedging contracts Fuel hedging contracts Interest rate cap contracts Derivative liabilities
Currency hedging contracts
Fuel hedging contracts Cross currency swap contracts Interest rate swap contracts 800.0
2,210.2
1,525.2
12.7
4,548.1
4,289.3
8,837.4
The Group
31 March
2013
2012 The Company
31 March
2013 2012
24.2 52.7 2.2 79.1
21.3
46.7 3.9 71.9 22.8 52.7 2.2 77.7 14.6
38.9
3.9
57.4
19.2
6.5 40.7 6.8
73.2 15.5 0.6 50.9 11.9 78.9 19.2 6.5 -
-
25.7 12.2
0.5
12.7
176
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
37 Financial Instruments (in $ million) (continued)
(b) Fair values
Financial instruments carried at fair value
Fair value 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 31 March 2012
Quoted
prices in
active
markets for
identical
instruments
Significant
other
observable
inputs
(Level 1)
(Level 2)
Financial assets:
Available-for-sale investments
Quoted investments
- Government securities 3.0 -
4.1
- Equity investments 166.5 -
32.8 - Non-equity investments 279.5 -
232.0 Unquoted investments
- Government securities -
-
-
- Non-equity investments -
143.5 -
-
Derivative assets
Currency hedging contracts Fuel hedging contracts Interest rate cap contracts
Financial liabilities:
Derivative liabilities
Currency hedging contracts Fuel hedging contracts Cross currency swap contracts Interest rate swap contracts Quoted prices in active Significant
markets for
other
identical observable
instruments
inputs
(Level 1) (Level 2)
307.5
159.6
-
-
-
449.0 24.2 52.7 2.2
222.6 -
-
-
268.9 21.3
46.7
3.9
539.0
-
-
-
-
-
19.2 6.5 40.7 6.8
73.2 -
-
-
-
-
15.5
0.6
50.9
11.9
78.9
The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used
in making the measurements. The fair value hierarchy has the following levels:
• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from prices)
177
ANNUAL REPORT 2012/13
37 Financial Instruments (in $ million) (continued)
(b) Fair values (continued)
Financial instruments carried at fair value (continued)
Determination of fair value
The Group and the Company have carried all investment securities that are classified as available-for-sale financial
assets and all derivative instruments at their fair values.
The fair values of jet fuel swap contracts are the mark-to-market values of these contracts. The fair values of jet fuel
option contracts are determined by reference to available market information and the Black-Scholes option valuation
model. As the Group hedges its jet fuel requirements in Mean of Platts Singapore Jet Kerosene (“MOPS”) and that the
majority of the Group’s fuel uplifts are in MOPS, the MOPS price (2013: USD 122.17/BBL, 2012: USD 135.42/BBL)
is used as the input for market fuel price to the Black-Scholes option valuation model. Consequently, the annualised
volatility (2012-13: 11.75%, 2011-12: 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
each individual jet fuel option contract to derive their estimated fair values as at the end of the reporting period.
The fair value of forward currency contracts is determined by reference to current forward prices for contracts with
similar maturity profiles. The fair values of foreign currency option contracts, interest rate swap contracts and interest
rate cap contracts are determined by reference to valuation reports provided by counterparties.
The fair value of cross currency swap contracts is determined based on quoted market prices or dealer quotes for
similar instruments used.
The fair value of quoted investments is generally determined by reference to stock exchange quoted market bid prices
at the close of the business at the end of the reporting period. For investments where there is no active market, fair
value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions
or reference to the current market value of another instrument (which is substantially the same).
Financial instruments whose carrying amounts approximate fair value
The carrying amounts of the following financial assets and liabilities approximate their fair values due to their shortterm nature: cash and bank balances, funds from subsidiary companies, amounts owing to/by subsidiary companies,
trade debtors, other debtors, trade and other creditors.
Financial instruments carried at other than fair value
Long-term investments classified as available-for-sale amounting to $98.9 million (2012: $98.8 million) for the Group
and $18.8 million (2012: $18.8 million) for the Company are stated at cost because the fair values cannot be obtained
directly from quoted market price or indirectly using valuation techniques supported by observable market data.
178
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
37 Financial Instruments (in $ million) (continued)
(b) Fair values (continued)
Financial instruments carried at other than fair value (continued)
Investments classified as held-to-maturity amounting to $364.9 million (2012: $164.0 million) for the Group and the
Company are stated at amortised cost. The fair value of these investments as at 31 March 2013 approximate $366.0
million (2012: $163.4 million) for the Group and the Company. Fair value is determined by reference to their published
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 (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, interest
rates and the market value of its investments. The Group’s overall risk management approach is to moderate the effects of
such volatility on its financial performance through the use of derivatives to hedge specific exposures.
As derivatives are used for the purpose of risk management, they do not expose the Group to market risk because gains
and losses on the derivatives offset losses and gains on the matching asset, liability, revenues or expenses being hedged.
Moreover, counterparty credit risk is generally restricted to any hedging gain from time to time, and not the principal
amount hedged. Therefore the possibility of a material loss arising in the event of non-performance by a counterparty is
considered to be unlikely.
Financial risk management policies are periodically reviewed and approved by the Board Executive Committee (“BEC”).
(a) Jet fuel price risk
The Group’s earnings are affected by changes in the price of jet fuel. The Group’s strategy for managing the risk on
fuel price, as defined by BEC, aims to provide the Group with protection against sudden and significant increases in jet
fuel prices. In meeting these objectives, the fuel risk management programme allows for the judicious use of approved
instruments such as swaps, options and collars with approved counterparties and within approved credit limits.
Cash flow hedges
The Group manages this fuel price risk by using swap, option and collar contracts and hedging up to 18 months
forward using jet fuel swap, option and collar contracts.
The Group has applied cash flow hedge accounting to these derivatives as they are considered to be highly effective
hedging instruments. A net fair value loss before tax of $309.6 million (2012: $308.1 million), with a related deferred
tax credit of $92.0 million (2012: $91.5 million), is included in the fair value reserve in respect of these contracts.
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 and
uplifted fuel volume, remain constant. Under this assumption, and excluding the effects of hedging, an increase in price
of one USD per barrel of jet fuel affects the Group’s and the Company’s annual fuel costs by $45.6 million and $38.4
million (2011-12: $44.1 million and $37.1 million) respectively.
The fuel hedging sensitivity analysis is based on contracts that are still outstanding as at the end of the reporting period
and assumes that all jet fuel hedges are highly effective. Under these assumptions, with an increase or decrease in jet
fuel prices, each by one USD per barrel, the before tax effects on equity are set out in the table below.
Sensitivity analysis on outstanding fuel hedging contracts:
The Group
31 March
2013 2012 Effect on equity The Company
31 March
2013 2012
Effect on equity
Increase in one USD per barrel Decrease in one USD per barrel 18.5 (18.5) 15.2 (15.2)
4.5 (4.5) 3.7
(3.7)
(b) Foreign currency risk
The Group is exposed to the effects of foreign exchange rate fluctuations because of its foreign currency denominated
operating revenues and expenses. For the financial year ended 31 March 2013, these accounted for 56.4% of total
revenue (2011-12: 60.5%) and 68.7% of total operating expenses (2011-12: 68.9%). The Group’s largest exposures
are from USD, Euro, UK Sterling Pound, Swiss Franc, Australian Dollar, New Zealand Dollar, Japanese Yen, Indian
Rupee, Hong Kong Dollar, Chinese Yuan, Korean Won and Malaysian Ringgit. The Group generates a surplus in all of
these currencies, with the exception of USD. The deficit in USD is attributable to capital expenditure, fuel costs and
aircraft leasing costs – all conventionally denominated and payable in USD.
The Group manages its foreign exchange exposure by a policy of matching, as far as possible, receipts and payments
in each individual currency. Surpluses of convertible currencies are sold, as soon as practicable, for USD and SGD. The
Group also uses forward foreign currency contracts and foreign currency option contracts to hedge a portion of its
future foreign exchange exposure. Such contracts provide for the Group to sell currencies at predetermined forward
rates, buying either USD or SGD depending on forecast requirements, with settlement dates that range from one month
up to one year. The Group uses these currency hedging contracts purely as a hedging tool. It does not take positions
in currencies with a view to making speculative gains from currency movements.
Cash flow hedges
As at 31 March 2013, the Company holds USD256.0 million (2012: USD97.0 million) in short-term deposits to hedge
against foreign currency risk for a portion of the forecast USD capital expenditure in the next 10 months. A fair value
gain of $4.9 million (2012: $1.4 million) is included in the fair value reserve in respect of these contracts.
During the financial year, the Group entered into financial instruments to hedge expected future payments in USD
and SGD. The cash flow hedges of the expected future purchases in USD and expected future payments in SGD in the
next 12 months are assessed to be highly effective and at 31 March 2013, a net fair value gain before tax of $305.1
million (2012: $301.6 million), with a related deferred tax charge of $85.0 million (2012: $84.4 million), is included
in the fair value reserve in respect of these contracts.
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 notional amounts ranging from $17.5 million
to $68.9 million (2012: $23.9 million to $89.7 million) where it pays SGD and receives USD at USD/SGD exchange
rates ranging from 1.3085 to 1.6990 (2011-12: 1.3085 to 1.6990). These contracts are used to protect the foreign
exchange risk exposure of the Group’s USD-denominated finance lease commitments. The maturity period of these
contracts ranges from 21 August 2015 to 14 February 2018.
Foreign currency sensitivity analysis
The foreign currency risk sensitivity analysis is based on the assumption that all cash flow hedges are highly effective;
hence there will be no impact on profit before taxation from the cash flow hedges.
The following table details the sensitivity of a 1% strengthening of SGD against the respective foreign currencies. The
sensitivity analysis includes only outstanding foreign currency hedging contracts and significant outstanding foreign
currency denominated monetary items and adjusts their translation at the period end for a 1% change in foreign
currency rates.
Sensitivity analysis:
The Group
31 March
2013
2012
Effect on
Effect on
Effect on
profit before
Effect on
profit before
equity R1 taxation R2
equity R1
taxation R2
AUD EUR GBP JPY USD
2.9 1.1
1.4 1.4
(9.6)
(2.6) (1.6) (0.7) (0.5) (8.5) 2.0 2.5 1.1 1.5 (4.3) (1.6)
(1.4)
(0.5)
(0.4)
(5.1)
The Company
31 March
2013
2012
Effect on
Effect on
Effect on
profit before
Effect on
profit before
equity R1 taxation R2
equity R1
taxation R2
AUD EUR GBP JPY
USD R1
R2
2.6 0.5
1.2 0.9
(8.5)
(2.3) (0.9) (0.6) (0.4) (6.7) 1.8 1.8
0.9
1.0 (4.3) (1.4)
(0.5)
(0.4)
(0.2)
(5.2)
Sensitivity analysis on outstanding foreign currency hedging contracts.
Sensitivity analysis on significant outstanding foreign currency denominated monetary items.
If the relevant foreign currency strengthens by 1% against SGD, equity and profit before taxation would change by the
same amounts in the opposite direction.
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 interest-bearing financial assets and liabilities. The Group
enters into interest rate swap contracts and interest rate cap contracts to manage interest rate costs on its financial
assets and liabilities, with the prior approval of the BEC or Boards of subsidiary companies.
Cash flow hedges
As at 31 March 2013, the Company has interest rate cap contracts at a strike rate of 6.50% (2012: 6.50%), maturing
in 4 to 5 years, to hedge against risk of increase in aircraft lease rentals. The cash flow hedges of the interest rate cap
contracts are assessed to be highly effective. A net fair value loss before tax of $17.6 million (2012: $15.9 million),
with a related deferred tax credit of $3.0 million (2012: $2.7 million), is included in the fair value reserve in respect of
these contracts.
In FY2009-10, the Company entered into interest rate swap contracts to protect a portion of the future operating lease
rent payments from exposure to fluctuations in interest rates. These contracts were settled in FY2010-11. The balance
in the fair value reserve will be recognised in the profit and loss account over the lease term of the respective aircraft.
A net fair value loss before tax of $24.8 million (2012: $34.8 million), with a related deferred tax credit of $4.2 million
(2012: $5.9 million), is included in the fair value reserve in respect of these contracts.
As at 31 March 2013, other than those instruments entered into by the Company, the Group has interest rate swap
agreements in place whereby it pays fixed rates of interest ranging from 3.00% to 4.95% (2012: 3.00% to 4.95%)
and receives a variable rate linked to LIBOR. These contracts are used to protect a portion of the finance lease
commitments from exposure to fluctuations in interest rates. The maturity period of these swaps ranges from 1 March
2014 to 5 March 2016. The cash flow hedges of some of these contracts are assessed to be highly effective and at 31
March 2013, a net fair value loss of $4.4 million (2012: $8.3 million) is included in the fair value reserve in respect of
these contracts.
Interest rate sensitivity analysis
The interest rate sensitivity analysis is based on the following assumptions:
• Changes in market interest rates affect the interest income or finance charges of variable interest financial
instruments.
• Changes in market interest rates affect the fair value of derivative financial instruments designated as hedging
instruments and all interest rate hedges are expected to be highly effective.
• Changes in the fair values of derivative financial instruments and other financial assets and liabilities are estimated
by discounting the future cash flows to net present values using appropriate market rates prevailing at the end of
the reporting period.
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 interest rates of one basis point for all currencies in which
the Group has derivative financial instruments and variable rate assets and liabilities at 31 March 2013 will have the
effects as set out in the table below.
Sensitivity analysis:
The Group
31 March
2013
Effect on
equity R1 Increase in one basis point in market interest rates Decrease in one basis point in market interest rates
Effect on
profit before
Effect on
taxation R2
equity R1
0.1 (0.1)
0.5 (0.5) R1
Sensitivity analysis on derivative financial instruments.
R2
Sensitivity analysis on variable rate assets and liabilities.
Effect on
profit before
taxation R2
0.1 (0.1) 0.5
(0.5)
The Company
31 March
2013
Effect on
equity R1 Increase in one basis point in market interest rates
Decrease in one basis point in market interest rates 2012
0.1 (0.1)
2012
Effect on
profit before
Effect on
taxation R2
equity R1
0.4 (0.4)
0.1
(0.1) Effect on
profit before
taxation R2
0.3
(0.3)
183
ANNUAL REPORT 2012/13
38 Financial Risk Management Objectives and Policies (in $ million) (continued)
(d) Market rate risk
At 31 March 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.
Market price sensitivity analysis
If prices for these investments increase or decrease by 1% with all other variables being held constant, the before tax
effects on equity are set out in the table below.
Sensitivity analysis on investments:
Increase in 1% of quoted prices Decrease in 1% of quoted prices (e) Liquidity risk
The Group
31 March
2013
2012 The Company
31 March
2013 2012
Effect on equity Effect on equity
5.9 (5.9)
7.4 (7.4) 5.3 (5.3) 6.8
(6.8)
At 31 March 2013, the Group has at its disposal, cash and short-term deposits amounting to $5,059.6 million (2012:
$4,702.7 million). In addition, the Group has available short-term credit facilities of about $374.2 million (2012:
$520.7 million). The Group also has Medium Term Note Programmes under which it may issue notes up to $1,000.0
million (2012: $1,000.0 million) and as of 31 March 2013, $500.0 million (2012: $500.0 million) remains unutilised.
Under these Programmes, notes issued by the Company may have varying maturities as agreed with the relevant
financial institutions.
The Group’s holdings of cash and short-term deposits, together with committed funding facilities and net cash flow
from operations, are expected to be sufficient to cover the cost of all firm aircraft deliveries due in the next financial
year. It is expected that any shortfall would be met by bank borrowings or public market funding. Due to the necessity
to plan aircraft orders well in advance of delivery, it is not economical for the Group to have committed funding in
place at present for all outstanding orders, many of which relate to aircraft which will not be delivered for several years.
The Group’s policies in this regard are in line with the funding policies of other major airlines.
The maturity profile of the financial liabilities of the Group and the Company is as follows. The amounts disclosed
in the table are the contractual undiscounted cash flows. Balances due within 12 months approximate their carrying
amounts as the impact of discounting is insignificant.
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
1 - 2
2 - 3
3 - 4
4 - 5
2013
year
years
years
years
years
The Group
Notes payable 22.6 22.5 319.3 16.1 16.1 Finance lease commitments 72.4 56.3 51.3 21.9 21.8
Loans 5.7 -
-
-
-
Trade and other creditors 3,201.1 -
-
-
-
Derivative financial instruments:
Currency hedging contracts 19.2 -
-
-
-
Fuel hedging contracts 6.5 -
-
-
-
Cross currency swap contracts 40.7 -
-
-
-
Interest rate swap contracts 6.8 -
-
-
-
3,375.0 78.8 370.6 38.0 37.9 The Company
Notes payable 22.6 22.5 319.3 16.1 16.1 Trade and other creditors 2,510.1 -
-
-
-
Amounts owing to subsidiary companies 1,219.8 -
-
-
-
Derivative financial instruments:
Currency hedging contracts 19.2 -
-
-
-
Fuel hedging contracts 6.5 -
-
-
-
3,778.2 22.5 319.3 16.1 16.1 Within 1
1 - 2
2 - 3
3 - 4
4 - 5
2012
year
years
years
years
years
The Group
Notes payable 22.6
22.6 22.6 319.3
16.1
Finance lease commitments
72.2
73.6 57.0 51.6 22.1
Loans 2.4 -
-
-
-
Trade and other creditors 2,885.4 -
-
-
-
Derivative financial instruments:
Currency hedging contracts 15.5 -
-
-
-
Fuel hedging contracts 0.6 -
-
-
-
Cross currency swap contracts 50.9 -
-
-
-
Interest rate swap contracts 11.9 -
-
-
-
3,061.5
96.2
79.6 370.9 38.2
The Company
Notes payable 22.6 22.6 22.6 319.3 16.1 Trade and other creditors 2,210.2 -
-
-
-
Amounts owing to subsidiary companies 1,525.2 -
-
-
-
Derivative financial instruments:
Currency hedging contracts 12.2 -
-
-
-
Fuel hedging contracts 0.5 -
-
-
-
3,770.7 22.6
22.6 319.3 16.1
More
than
5 years
Total
536.6 933.2
-
223.7
-
5.7
- 3,201.1
-
19.2
-
6.5
-
40.7
-
6.8
536.6 4,436.9
536.6 933.2
- 2,510.1
- 1,219.8
-
19.2
-
6.5
536.6 4,688.8
More
than
5 years
Total
552.6 955.8
22.1 298.6
-
2.4
- 2,885.4
-
15.5
-
0.6
-
50.9
-
11.9
574.7 4,221.1
552.6 955.8
- 2,210.2
- 1,525.2
-
12.2
-
0.5
552.6 4,703.9
185
ANNUAL REPORT 2012/13
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. On a day-to-day basis, the respective Finance divisions 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 credit risk other than on derivative counterparties where transactions are
limited to financial institutions possessing high credit quality and hence the risk of default is low.
The sale of passenger and cargo transportation is largely achieved through IATA accredited sales agents. The credit risk
of such sales agents is relatively small owing to a broad diversification. In specific instances, the contract may require
special collateral.
Unless expressly stated otherwise in the contract, receivables and payables among airlines are settled either bilaterally
or via the IATA Clearing House. Receivables and payables are generally netted and settled at weekly intervals, which
lead to a clear reduction in the risk of default.
For all other service relationships, depending on the nature and scope of the services rendered, collateral is required,
credit reports or references are obtained and use is made of historical data from previous business relations, especially
with regard to payment behaviour, in order to avoid non-performance.
Collaterals requested from debtors include bank guarantees, cash-in-lieu of deposit and security deposits.
Allowance is made for doubtful accounts whenever risks are identified.
(g) Counterparty risk
Counterparty risk is the potential financial loss from a transaction that may arise in the event of default by the
counterparty. Counterparty risks are managed by limiting aggregated exposure on all outstanding financial instruments
to any individual counterparty, taking into account its credit rating. Such counterparty exposures are regularly reviewed,
and adjusted as necessary. This mitigates the risk of material loss arising from the event of non-performance by
counterparties.
Surplus funds are invested in interest-bearing bank deposits and other high quality short-term liquid investments.
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
counterparties. The table below shows an analysis of credit risk exposures of balances that exceed 5% of the financial
assets of the Group and the Company as at 31 March:
The Group
Outstanding Percentage of total
balance
financial assets
2013 2012 2013 2012 The Company
Outstanding
Percentage of total
balance
financial assets
2013 2012 2013 2012
Counterparty profiles
By industry:
Travel agencies Airlines Financial institutions Others 632.0 637.3 381.1
344.1 5,518.9 5,132.9 812.9
942.0 7,344.9 7,056.3 7.9% 4.7% 68.6% 10.1% 91.3% 8.6% 349.1 340.7 4.7% 179.0 116.3 69.5% 5,279.4 4,837.6 12.7%
734.5 885.2 95.5% 6,542.0 6,179.8 4.8% 2.4% 71.8% 10.0% 89.0% 5.1%
1.7%
72.5%
13.3%
92.6%
4,779.5 4,935.0 744.8 677.0 1,525.0 982.0 190.6 351.9 105.0
110.4 7,344.9 7,056.3 59.4% 9.2% 19.0%
2.4%
1.3% 91.3% 66.8% 4,241.4 4,424.2 9.1% 610.4 495.6 13.3% 1,487.1 944.4 4.8% 140.5 250.8 1.5% 62.6
64.8
95.5% 6,542.0 6,179.8 57.7% 8.3% 20.2% 1.9% 0.9% 89.0% 66.3%
7.4%
14.1%
3.8%
1.0%
92.6%
5,513.6 5,669.5 1.1 1.7 1,830.2 1,385.1 7,344.9 7,056.3 68.5%
0.0% 22.8% 91.3% 76.7% 5,294.2 5,400.6 0.0%
0.4 0.8 18.8% 1,247.4 778.4 95.5% 6,542.0 6,179.8 72.0% 0.0% 17.0% 89.0% 80.9%
0.0%
11.7%
92.6%
By region:
East Asia Europe
South West Pacific Americas
West Asia and Africa By Moody’s credit ratings:
Investment grade (A to Aaa) Investment grade (Baa) Non-rated 187
ANNUAL REPORT 2012/13
39 Capital Management (in $ million)
The primary objective of the management of the Company’s capital structure is to maintain an efficient mix of debt and
equity in order to achieve a low cost of capital, while taking into account the desirability of retaining financial flexibility to
pursue business opportunities and adequate access to liquidity to mitigate the effect of unforeseen events on cash flows.
The Directors regularly review the Company’s capital structure and make adjustments to reflect economic conditions,
business strategies and future commitments.
The Group monitors capital using a gearing ratio, which is total debt divided by total capital.
The Company did not breach any gearing covenants during the financial years ended 31 March 2013 or 31 March 2012.
In the same period, no significant 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 800.0 208.4 5.7 1,014.1 800.0 275.4
2.4 1,077.8 800.0 -
-
800.0 800.0
800.0
Share capital Reserves Total capital 1,856.1 11,248.6 13,104.7 1,856.1 11,037.3 12,893.4 1,856.1 10,102.5 11,958.6 1,856.1
10,990.8
12,846.9
Gearing ratio (times) 0.08 0.08 0.07 0.06
40 Related Party Transactions (in $ million)
For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the
ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and
operating decisions, or vice versa, or where the Group and the party are subject to common control. Related parties may
be individuals or other entities.
Key management personnel of the Company are those persons having the authority and responsibility for planning,
directing and controlling the activities of the Company. The Group considers the directors, chief executive officer and
executive vice presidents of the Company to be key management personnel of the Company.
188
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
40 Related Party Transactions (in $ million) (continued)
In addition to the related party information disclosed elsewhere in 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:
Purchases of services from associated companies Services rendered to associated companies Purchases of services from joint venture companies Services rendered to joint venture companies Purchases of services from related parties
Professional fees paid to a firm of which a director is a member Directors’ and key executives’ remuneration of the Group
The Group
2012-13
2011-12
37.3 (85.2) 0.4 (14.8)
1,013.5 0.1
124.1
(12.6)
2.9
(11.5)
1,033.1
0.3
The Group
2012-13
2011-12
Directors
Salary, bonuses, fee and other costs CPF and other defined contributions Share-based compensation expense Key executives (excluding executive directors)
Salary, bonuses and other costs CPF and other defined contributions Share-based compensation expense * Amount less than $0.1 million
3.2 *
0.8 4.0 3.2
*
1.3
4.5
1.8 *
1.1 2.9 2.7
*
2.1
4.8
Share options granted to and exercised by director and key executives of the Company are as follows:
Name of participant
Goh Choon Phong Mak Swee Wah Ng Chin Hwee Aggregate options
granted since
commencement of
scheme up to end
of financial year
under review
444,075 362,750 214,025 Aggregate options
exercised since
commencement of
scheme up to end
of financial year
under review
197,950
232,975 214,025
Aggregate
options
outstanding
at end of
financial year
under review
246,125
129,775
-
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
Base Awards
Base Awards commencement
granted during vested during Balance as at of RSP to end of
Balance as at
the financial
the financial
31 March
financial year
Name of participant
1 April 2012
year
year
2013
under review
Goh Choon Phong Mak Swee Wah
Ng Chin Hwee 60,371 39,188
39,188 42,000 21,000 21,000 18,005 18,005 18,005 84,366 42,183 42,183 157,256
114,186
98,268
RSP Final Awards (Pending Release) R1
Aggregate
ordinary shares
released to
participant since
Final Awards
Final Awards commencement
granted during released during Balance as at of RSP to end of
Balance as at
the financial
the financial
31 March
financial year
Name of participant
1 April 2012
year#
year
2013
under review *
Goh Choon Phong
Mak Swee Wah Ng Chin Hwee 11,106 12,706
12,706 17,470 17,470 17,470 16,370 16,903
16,903
12,206 13,273 13,273 56,828
54,687
35,756
Time-based RSP Awards
Aggregate
Aggregate ordinary shares
Awards
released to
granted since participant since
commencement commencement
of time-based
of time-based
Balance as at
RSP to end of
RSP to end of
Balance as at
31 March financial year
financial year
Name of participant
1 April 2012
2013
under review
under review
Goh Choon Phong Mak Swee Wah Ng Chin Hwee
105,917 105,917 105,917 105,917 105,917 105,917 105,917
105,917
105,917
-
190
SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
31 March 2013
40 Related Party Transactions (in $ million) (continued)
PSP Base Awards R2
Aggregate
Aggregate ordinary shares
Base
Base
Base Awards
released to
Awards
Awards
granted since participant since
granted
vested
commencement commencement
during the
during the Balance as at of PSP to end of of PSP to end of
Balance as at
financial
financial
31 March
financial year
financial year
Name of participant1 April 2012 year
year
2013
under review
under review *
Goh Choon Phong Mak Swee Wah Ng Chin Hwee 83,631 56,982
56,982 66,000 26,400 26,400 9,490 17,794
17,794 140,141
65,588 65,588
175,500 114,888 100,182 44,522
63,663
47,450
The actual number of RSP Final Awards of fully paid ordinary shares will range from 0% to 150% of the Base Awards and is contingent on
the Achievements against Targets over the two-year performance periods relating to the relevant awards.
R1
The actual number of PSP Final Awards of fully paid ordinary shares will range from 0% to 200% of the Base Awards and is contingent on
the Achievements against Targets over the three-year performance periods relating to the relevant awards.
R2
Final Awards granted during the financial year is determined by applying the achievement factor to the Base Awards that have vested during
the financial year.
#
* 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 Airways”) renounceable Rights Issue and non-renounceable Preferential
Offering of 2.0 per cent perpetual convertible capital securities (“Convertible Securities”) convertible into fully paidup ordinary shares in the capital of Tiger Airways, the Company had been allocated 53,702,775 Rights Shares and
189,390,367 Convertible Securities. Based on an issue price of $0.47 per Rights Share and $1.07 per Convertible Security,
the total consideration paid by the Company in relation to the subscription of the Rights Shares and Convertible Securities
was $227.9 million. Immediately following the Rights Issue, the total number of shares held by the Company increased
to 322,216,650, and the Company’s shareholding in Tiger Airways remained unchanged at 32.7% of the enlarged share
capital. If all of the Convertible Securities are converted into ordinary shares at a conversion price of $0.74, the total
number of shares held by the Company will increase to 596,064,883, and the Company’s shareholding in Tiger Airways
will increase to approximately 46.5% of the enlarged share capital.
In accordance with the subscription agreement announced on 30 October 2012, the Company exercised its anti-dilution
rights on 22 April 2013 to subscribe for 12,545,666 ordinary shares in Virgin Australia Holdings Limited (“Virgin Australia”).
Based on the subscription price of AUD0.4288 per share, the total consideration paid by the Company was AUD5.4 million
($7.0 million). This enabled the Company to maintain its 10.0% stake in Virgin Australia.
On 24 April 2013, the Company entered into a Share Sale and Purchase Agreement to further acquire 255,541,946
ordinary shares in the capital of Virgin Australia at AUD0.48 per share for a total consideration of AUD122.7 million
($158.9 million). The purchase is subject to regulatory approvals. If approved, the Company’s stake in Virgin Australia will
increase to 19.9%.
191
ANNUAL REPORT 2012/13
ADDITIONAL INFORMATION REQUIRED BY
THE SINGAPORE EXCHANGE SECURITIES TRADING LIMITED
1
Interested Person Transactions (in million)
The aggregate values of all Interested Person Transactions (“IPTs”) entered into during the Financial Year 2012-13 are as follows:
Name of Interested Person
Aggregate value of all IPTs during the financial
year under review
(excluding transactions less than $100,000 and transactions conducted under shareholders’ mandate
pursuant to Rule 920)
2012-13
CapitaLand Limited
- Ascott Capital Pte Ltd* PT Bank Danamon Indonesia TBK SATS Ltd. Group
- Aero Laundry & Linen Services Private Limited - Air India SATS Airport Services Private Limited - Asia Airfreight Terminal Co Ltd - Beijing Airport Inflight Kitchen Ltd - Beijing Aviation Ground Services Co Ltd - Maldives Inflight Catering Private Limited - PT Jasa Angkasa Semesta Tbk - SATS HK Limited - SATS Ltd - SATS Security Services Private Limited
- Taj Madras Flight Kitchen Pvt Limited - Taj SATS Air Catering Ltd SembCorp Industries Limited Group
- SembCorp Power Pte Ltd Singapore Telecommunications Limited Group
- Singapore Telecommunications Limited - Trusted Hub Limited Tiger Airways Holdings Limited Group
- Tiger Airways Singapore Pte Ltd** Temasek Holdings (Private) Limited and Associates
- Certis CISCO Technology Pte Ltd - MediaCorp Pte Ltd - PT Certis Total Interested Person Transactions Aggregate value of all
IPTs conducted under
shareholders’ mandate
pursuant to Rule 920 (excluding transactions
less than $100,000)
2012-13
2.5
-
0.3
-
-
-
-
-
-
-
-
-
-
-
-
12.9
4.4
9.7
4.9
6.7
2.7
10.8
3.7
656.8
19.2
0.6
4.6
-
3.2
-
-
2.8
0.3
1.4
0.3
-
-
-
3.9 0.2
0.5
0.2
744.8
*
Subscription of 7-year fixed rate notes which are issued by Ascott Capital Pte Ltd under its Multicurrency Medium Term Note Programme.
In accordance with Rule 909(3) of the SGX Listing Manual, the value of the transaction is the interest payable (i.e., $0.5 million over 7 years)
on the loan, and the value of the loan (i.e., $2.0 million).
**
Sector rate agreement between Scoot Pte Ltd and Tiger Airways Singapore Pte Ltd which applies to tickets issued by Scoot for transportation
on Tiger-operated flights, and by Tiger for transportation on Scoot-operated flights.
Note: All the above interested person transactions were carried out on normal commercial terms.
2
Material Contracts
Except as disclosed above and in the financial statements for the financial year ended 31 March 2013, there were no
material contracts entered into by the Company and its subsidiary companies involving the interests of the Chief Executive
Officer, directors or controlling shareholders, which are either still subsisting at the end of the financial year or, if not then
subsisting, entered into since the end of the previous financial year.
192
SINGAPORE AIRLINES
QUARTERLY RESULTS OF THE GROUP
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total
TOTAL REVENUE
2012-13 ($ million) 3,777.4 3,793.6 3,860.4 3,666.8
15,098.2
2011-12 ($ million) 3,577.6 3,699.5 3,875.4 3,705.3 14,857.8
TOTAL EXPENDITURE
2012-13 ($ million)
3,705.4 3,723.2
3,729.4 3,711.0 14,869.0
2011-12 ($ million) 3,566.6
3,576.6 3,718.2 3,710.5 14,571.9
OPERATING PROFIT/(LOSS)
2012-13 ($ million) 72.0 70.4 131.0 (44.2) 229.2
2011-12 ($ million) 11.0 122.9 157.2 (5.2) 285.9
PROFIT/(LOSS) BEFORE TAXATION
2012-13 ($ million) 115.8 115.9 189.1 61.2 482.0
2011-12 ($ million) 74.7 227.4 176.5
(30.4) 448.2
PROFIT/(LOSS) ATTRIBUTABLE TO
OWNERS OF THE PARENT
2012-13 ($ million) 78.0
90.1 142.5 68.3 378.9
2011-12 ($ million) 44.7 194.2 135.2 (38.2) 335.9
EARNINGS/(LOSS) PER SHARE - BASIC
2012-13 (cents)
6.6 7.7 12.1 5.8 32.2
2011-12 (cents) 3.7 16.2 11.4 (3.2) 28.3
EARNINGS/(LOSS) PER SHARE - DILUTED
2012-13 (cents) 6.6 7.6
12.0 5.7 31.9
2011-12 (cents) 3.7 16.1 11.3
(3.2) 27.9
193
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 15,098.2 14,857.8 14,524.8 12,707.3 15,996.3
Total expenditure (14,869.0) (14,571.9) (13,253.5) (12,644.1) (15,092.7)
Operating profit
229.2 285.9 1,271.3 63.2 903.6
Finance charges (42.7) (74.3) (70.1) (68.9)
(89.7)
Interest income 62.5 50.5 37.3 49.5 96.0
Surplus/(Loss) on disposal of aircraft, spares
and spare engines 56.0 (1.4) 103.3 25.4 60.6
Dividend from long-term investments 27.3 18.0 23.8
33.0 23.7
Other non-operating items 11.9
48.8 80.1 34.2
29.4
Share of profits of joint venture companies 96.2
74.7 74.6
56.1 63.9
Share of profits of associated companies
61.5
51.4 100.5 93.0 111.1
Profit before exceptional items 501.9
453.6 1,620.8 285.5 1,198.6
Fines (19.9) (5.4)
(201.8) -
Profit before taxation 482.0
448.2
1,419.0 285.5 1,198.6
Profit attributable to owners of the Parent 378.9 335.9 1,092.0
215.8 1,061.5
STATEMENT OF FINANCIAL POSITION ($ million)
Share capital 1,856.1 1,856.1 1,832.4 1,750.6 1,684.8
Treasury shares (269.8)
(258.4)
(43.0) (0.9) (44.4)
Capital reserve 110.3 99.1
91.8 74.8 86.3
Foreign currency translation reserve (191.8) (186.3)
(186.1)
(137.0) (137.9)
Share-based compensation reserve 151.7 165.9 172.6 185.3 187.3
Fair value reserve (27.1)
(47.6) (138.0)
(140.9) (660.8)
General reserve 11,475.3 11,264.6 12,474.7 11,737.0 12,815.3
Equity attributable to owners of the Parent 13,104.7 12,893.4 14,204.4 13,468.9 13,930.6
Non-controlling interests 312.6 294.0
298.4 280.4 559.8
Total equity
13,417.3 13,187.4 14,502.8 13,749.3 14,490.4
Property, plant and equipment Intangible assets Investment properties Associated companies Joint venture companies
Long-term investments Other non-current assets
Current assets Total assets
13,098.0 13,381.4 13,877.6 15,063.9 15,992.4
218.5 158.3 125.2 80.8 553.0
-
-
-
-
7.0
554.4 543.2 504.8 532.6 855.3
120.8 113.2 102.8
108.6 127.5
706.9
373.7 35.3 35.3
43.2
230.0
267.3 119.6 114.4 403.6
7,499.5
7,205.9
9,779.2 6,548.7 6,836.5
22,428.1 22,043.0 24,544.5 22,484.3 24,818.5
Deferred account Deferred taxation Long-term liabilities and provisions Current liabilities Total liabilities Net assets
146.7 224.4 347.1 480.7 673.9
1,951.3 2,029.1 2,181.1 2,296.6 2,222.0
1,365.8
1,337.1 1,281.2
1,438.1
1,513.5
5,547.0 5,265.0
6,232.3
4,519.6
5,918.7
9,010.8 8,855.6 10,041.7 8,735.0 10,328.1
13,417.3 13,187.4 14,502.8 13,749.3 14,490.4
194
SINGAPORE AIRLINES
FIVE-YEAR FINANCIAL SUMMARY OF THE GROUP
2012-13 2011-12 2010-11 2009-10 2008-09
CASH FLOW ($ million) Cash flow from operations 2,071.1 2,099.0
3,547.5 2,091.2 1,967.0
Internally generated cash flow R1 2,859.0
2,727.2 4,434.2 2,423.3
2,994.6
Capital expenditure 1,875.4 1,641.2
1,223.8
1,560.3
2,031.1
PER SHARE DATA
Earnings - basic (cents) Earnings - diluted (cents)
Cash earnings ($) R2 Net asset value ($) 32.2 31.9 1.70 11.15 28.3 27.9 1.65 10.96 91.4 90.2 2.35 11.89 18.2 18.0 1.67 11.30 89.6
89.1
2.36
11.78
SHARE PRICE ($)
High Low Closing 11.35
10.10
10.87 14.77
10.05 10.77 16.50 13.00
13.68 15.94 10.12 15.20 16.34
9.39
10.00
23.0
1.4
20.0 1.4
12.0
1.5 40.0
2.2
2.9
2.0 2.9 2.5 1.7 2.7 7.9 4.5 7.9 1.6 1.2 2.2 7.3
4.5
7.2
4,499.6
194,040
651,093
23,189 4,344.3 192,960 659,936 22,514
5,419.2 246,361
660,308 21,997 4,276.4 159,151 472,918
33,222
5,570.8
174,995
502,491
31,834
SGD per USD exchange rate as at 31 March 1.2417 1.2569
1.2602 1.4005 1.5203
DIVIDENDS
Gross dividends (cents per share) Dividend cover (times) PROFITABILITY RATIOS (%)
Return on equity holders’ funds R4 Return on total assets R5 Return on turnover R6 PRODUCTIVITY AND EMPLOYEE DATA
Value added ($ million) Value added per employee ($) R7 Revenue per employee ($) R7 Average employee strength 140.0 R3 0.7 Internally generated cash flow comprises cash generated from operations, dividends from associated and joint venture companies, and proceeds
from sale of aircraft and other property, plant and equipment.
R1
R2
Cash earnings is defined as profit attributable to owners of the Parent plus depreciation and amortisation.
R3
Includes 80.0 cents per share special dividend.
R4
Return on equity holders’ funds is the profit attributable to owners of the Parent expressed as a percentage of the average equity holders’ funds.
R5
Return on total assets is the profit after tax expressed as a percentage of the average total assets.
R6
Return on turnover is the profit after tax expressed as a percentage of the total revenue.
Based on average staff strength.
R7
195
ANNUAL REPORT 2012/13
TEN-YEAR STATISTICAL RECORD
2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04
SINGAPORE AIRLINES
FINANCIAL
Total revenue Total expenditure
Operating profit /(loss) (Loss)/Profit before taxation (Loss)/Profit after taxation Capital disbursements R1 ($ million) ($ million)
($ million) ($ million)
($ million) ($ million) 12,387.0 12,070.1 11,739.1 10,145.0 13,049.5 12,759.6 11,343.9 10,302.8 12,199.8 11,889.5 10,887.8 10,183.6 12,226.6 11,115.6 10,316.9 9,651.8 187.2 180.6 851.3
(38.6) 822.9 1,644.0 1,027.0 651.0 (682.4) 413.3 1,194.0 233.3 1,252.4 2,077.6 2,291.1 940.8 (694.1) 390.2 1,011.2 279.8 1,218.7 1,758.8 2,213.2 746.0 1,648.2
1,762.7 981.9 1,372.4 1,698.6 1,814.4 2,792.7 1,458.6 Passenger - yield - unit cost - breakeven load factor (cents/pkm) (cents/ask) (%) 11.4 9.2 80.7 11.8 9.2 78.0 11.9
8.9 74.8 10.4 8.6 82.7
12.5 9.2 73.6 12.1
8.4 69.4 10.9 7.9 72.5 (numbers) (months) (months)
101 80 148 100 74 151
108 75 163 108 75 162 103 74 162 98 77 162 94 75 161 9,260.1
8,562.2 697.9 1,570.4
1,283.6 1,608.9 7,187.6
7,046.1
141.5
319.7
420.6
2,051.3
10.6 7.5 70.8 10.1
7.0 69.3 9.2
6.7
72.8
90 76 159 89 64 157 85
60
156
OPERATING PASSENGER FLEET
Aircraft Average age Industry-wide average age PASSENGER PRODUCTION
Destination cities Distance flown Time flown Available seat-km (numbers) (million km) (hours)
(million)
63 63 64 68 66 65 64 62 59 56
386.3 374.6 354.1 342.4 379.8 365.9 353.1 341.8 325.4 266.7
507,562 490,261 460,096 443,141 492,103 474,432 458,936 441,510 419,925 342,715
118,264.4 113,409.7 108,060.2 105,673.7 117,788.7 113,919.1 112,543.8 109,483.7 104,662.3 88,252.7
TRAFFIC
Passengers carried Revenue passenger-km Passenger load factor (‘000)
(million) (%) 18,210 17,155
16,647 16,480 18,293 19,120 18,346 16,995 15,944
13,278
93,765.6 87,824.0 84,801.3 82,882.5 90,128.1 91,485.2 89,148.8 82,741.7 77,593.7 64,685.2
79.3 77.4
78.5 78.4 76.5
80.3 79.2 75.6 74.1
73.3
STAFF
Average strength (numbers) Seat capacity per employee R2 (seat-km) R3
Passenger load carried per employee (tonne-km) Revenue per employee ($) Value added per employee ($) 14,156 13,893 13,588 13,934
14,343 14,071 13,847 13,729 13,572
14,010
8,354,366 8,163,082 7,952,620 7,583,874 8,212,278 8,096,020 8,127,667 7,974,630 7,711,634 6,299,265
619,969 594,663 588,714 563,318 598,047 618,295 613,211 577,784 549,904 448,513
875,035 868,790 863,931 728,075 909,817 906,801 819,232 750,441 682,294 513,034
159,593 237,472 310,480 219,678 294,666 368,382 368,831 258,810 301,024 179,272
SILKAIR
Passengers carried Revenue passenger-km Available seat-km Passenger load factor Passenger yield Passenger unit cost Passenger breakeven load factor (‘000)
(million)
(million)
(%)
(cents/pkm) (cents/ask)
(%) 3,295 5,223.1
7,096.3 73.6
14.1 9.9 70.2
3,032 4,469.4
5,904.8 75.7 14.5
10.1 69.7 2,764 4,039.6 5,285.1 76.4 14.1 9.4 66.7 2,356
3,466.4 4,495.9 77.1 13.1
9.9 75.6 1,954 3,158.6
4,355.2 72.5 15.0
10.9 72.7 1,815 3,094.9 4,323.0 71.6 14.0 9.7 69.3 1,616
2,712.9
3,865.8 70.2 13.4 9.4 70.1 1,259 2,208.0 3,295.3 67.0 13.3 8.9
66.9 1,044 1,895.6 2,909.6 65.2 13.1 8.2 62.6 845
1,453.0
2,296.4
63.3
12.8
7.9
61.7
SIA CARGO
Cargo and mail carried Cargo load Gross capacity Cargo load factor Cargo yield Cargo unit cost Cargo breakeven load factor (million kg)
(million tonne-km)
(million tonne-km) (%) (cents/ltk)
(cents/ctk) (%) 1,144.6 1,205.8 1,156.4 1,122.4 1,219.5 1,308.0 1,284.9 1,248.5 1,149.5 1,050.9
6,763.6 7,198.2 7,174.0 6,659.1 7,299.3 7,959.2 7,995.6 7,874.4 7,333.2 6,749.4
10,661.0 11,286.5 11,208.5 10,510.1 12,292.5 12,787.8 12,889.8 12,378.9 11,544.1 10,156.5
63.4
63.8
64.0
63.4 59.4 62.2
62.0
63.6
63.5 66.5
33.4 34.9
36.2 32.0
38.2 38.7 38.4 38.6 35.9 36.7
23.2 23.5 22.3 21.9 24.9 23.4 24.5 23.5 21.3 23.0
69.5
67.3 61.6
68.4
65.2 60.5 63.8 60.9 59.3 62.7
SINGAPORE AIRLINES, SILKAIR AND SIA CARGO
Overall load Overall capacity Overall load factor Overall yield Overall unit cost Overall breakeven load factor (million tonne-km)
(million tonne-km) (%) (cents/ltk) (cents/ctk) (%) 16,047.3 15,898.8 15,576.3 14,853.6 16,196.8 16,973.8 16,765.6 16,036.8 14,996.5 13,189.3
23,188.4 23,378.6 22,515.1 21,495.9 24,468.5 24,572.6 24,474.8 23,605.5 22,267.8 19,177.5
69.2 68.0 69.2 69.1 66.2 69.1 68.5 67.9
67.3 68.8
85.3 85.5 85.5 76.1 89.8 86.0 78.4 75.4 71.5 65.6
60.4
58.6
55.4 54.6
58.4 52.9 50.6 48.2 44.8 43.7
70.8 68.5 64.8 71.7 65.0 61.5 64.5 63.9 62.7 66.6
Capital disbursements comprised capital expenditure in property, plant and equipment, intangible assets, investments in subsidiary, associated companies and joint venture companies, and
additional long-term equity investments.
R1
Seat capacity per employee is available seat capacity divided by Singapore Airlines’ average staff strength.
R2
Passenger load carried per employee is defined as passenger load and excess baggage carried divided by Singapore Airlines’ average staff strength. R3
196
SINGAPORE AIRLINES
THE GROUP FLEET PROFILE
As at 31 March 2013, Singapore Airlines Group operating fleet consisted of 139 aircraft - 127 passenger aircraft and 12 freighters.
Average
age in
Seats in
years (y)
Finance Operating
standard
and Aircraft type
Owned Lease
Lease Total configuration months (m)
Expiry of
operating lease
2013-14
2014-15
On
firm
On
order option
Singapore Airlines:
B777-200 2
2
288 15 y 1 m
B777-200A 6 1
7
323 11 y 7 m
B777-200R 9 2 11 266 9 y 9 m
B777-200ER 6 3
9
285 10 y 7 m
1
B777-200ERR 2 2
271 10 y 10 m
B777-300R 5 2
7
284 9 y 5 m
B777-300ER 19 19 278 5 y 7 m
A340-500 5 5
100 9 y 1 m
A380-800 5
6 11 471 4 y 4 m A380-800A 5
3
8
409 1 y 2 m
A330-300 20 20 285 3 y 2 m A350-900 XWB R1 Sub-total 64 37 101 N.A. 6 y 8 m 1
SIA Cargo:
B747-400F 5
4
3
12 N.A. 11 y 8 m 1 R3 8
5 R1 14 R2
40
67 2
23
31
56
Scoot:
B777-200
4 4
402 15 y 9 m B787
Sub-total
4
4
N.A. 15 y 9 m
1
20 R5
21
86 4
49 139 N.A. 7y1m
N.A. not applicable
R1
The standard seat configuration will be finalised at a later date.
R2
The A330-300 aircraft on order are on operating leases.
R3
The aircraft is on finance lease.
R4
These are purchase rights for B737 MAX aircraft.
R5
The 20 B787s will be transferred to Scoot from Singapore Airlines via a novation agreement.
2
1
1
SilkAir:
A319-100 3 3
6
128 7 y 2 m
A320-200 10 6 16 150 6 y 6 m 1
1
B737-800 B737-8 MAX Sub-total 13 9 22 N.A. 6 y 8 m
1
1
Total 1 R1
3
144 3
14 R4
17
18
197
ANNUAL REPORT 2012/13
GROUP CORPORATE STRUCTURE
31 March 2013
SINGAPORE AIRLINES LIMITED
100% Aircraft Maintenance Services
Australia Pty Ltd
78.6% SIA Engineering
Company Limited
100% SilkAir (Singapore)
Private Limited
100%
Tradewinds Tours & Travel
Private Limited
56%
5%
Abacus Travel Systems Pte Ltd
Abacus Travel
Systems Pte Ltd
100% NexGen Network (1) Holding Pte Ltd
100% NexGen Network (2) Holding Pte Ltd
100% SIAEC Global Pte Ltd
100% SIA Engineering (USA), Inc.
100% Singapore Aviation and
General Insurance
Company (Pte) Limited
65%
SIA Engineering (Philippines) Corporation
65%
Singapore Jamco Pte Ltd
100% Scoot Pte. Ltd.
51%
Aerospace Component
Engineering Services Pte Limited
100% SIA Properties (Pte) Ltd
51%
Aviation Partnership (Philippines) Corporation
100% Singapore Flying
College Pte Ltd
50%
International Engine Component Overhaul Pte Ltd
50%
Singapore Aero Engine Services
Pte Ltd
49%
Combustor Airmotive Services
Pte Ltd
49%
Eagle Services Asia Private Limited
49%
Fuel Accessory Service Technologies Pte Ltd
49%
PT JAS Aero - Engineering Services
49%
PWA International Limited
100% Sing-Bi Funds
Private Limited
100% Singapore Airlines
Cargo Pte Ltd
100% SIA (Mauritius) Ltd
76%
Singapore Airport Duty-Free
Emporium (Private) Limited
49%
Virgin Atlantic Limited
51%
Cargo Community
Network Pte Ltd
25%
Great Wall Airlines
Company Limited
100%
Cargo Community
(Shanghai) Co Ltd
49%
Safran Electronics Asia Pte Ltd
32.7% Tiger Airways
Holdings Limited
49%
Southern Airports Aircraft
Maintenance Services Company Limited
20%
47.1% Pan Asia Pacific Aviation
Services Ltd
Ritz-Carlton,
Millenia Singapore
Properties Private Limited
45%
Jamco Aero Design & Engineering
Pte Ltd
42.5% Panasonic Avionic Services Singapore
Private Limited
40%
Goodrich Aerostructures Service Asia
Pte Ltd
40%
Messier Services Asia Private Limited
39.2% Asian Surface Technologies Pte Ltd
33.3% International Aerospace Tubes Asia Pte Ltd
24.5% Asian Compressor Technology
Services Co Ltd
24.5% Turbine Coating Services Private Limited
198
SINGAPORE AIRLINES
INFORMATION ON SHAREHOLDINGS
as at 29 May 2013
No. of Issued Shares:1,199,851,019
No. of Issued Shares (excluding Treasury Shares):
1,175,915,656
No./Percentage of Treasury Shares:23,935,363 (1.99%)
Class of Shares:Ordinary shares
One Special share held by the Minister for Finance
Voting Rights (excluding Treasury shares):1 vote per share
Range of shareholdings
1 - 999
1,000 - 10,000
10,001 - 1,000,000
1,000,001 and above
Total
Number of
shareholders
%*
Number of
shares
%*
4,039
9.88
1,966,897
0.17
33,995
83.15
91,486,757
7.78
2,831
6.92
88,625,197
7.54
20
0.05
993,836,805 84.51
40,885
100.00
1,175,915,656
100.00
199
ANNUAL REPORT 2012/13
INFORMATION ON SHAREHOLDINGS
as at 29 May 2013
Twenty largest shareholders
Name
Number of shares
%*
1
Temasek Holdings (Private) Limited
657,306,600
55.90
2
DBS Nominees Pte Ltd
104,399,271
8.88
3
Citibank Nominees Singapore Pte Ltd
85,406,815
7.26
4
DBSN Services Pte Ltd
31,101,669
2.64
5
HSBC (Singapore) Nominees Pte Ltd
27,971,258
2.38
6
BNP Paribas Securities Services
23,689,450
2.01
7
United Overseas Bank Nominees Pte Ltd
23,250,119
1.98
8
Raffles Nominees Pte Ltd
15,470,649
1.32
9
DB Nominees (S) Pte Ltd
4,407,526
0.37
10 Bank of Singapore Nominees Pte Ltd
4,302,521
0.37
11 DBS Vickers Securities (S) Pte Ltd
2,243,810
0.19
12 OCBC Nominees Singapore Private Limited
2,104,684
0.18
13 Estate of Chang Shyh Jin, Deceased
2,007,940
0.17
14 UOB Kay Hian Pte Ltd
1,879,575
0.16
15 Merrill Lynch (Singapore) Pte Ltd
1,856,042
0.16
16 ABN AMRO Nominees Singapore Pte Ltd
1,747,190
0.15
17 BNP Paribas Nominees Singapore Pte Ltd
1,396,732
0.12
18 Phillip Securities Pte Ltd
1,105,827
0.09
19 OCBC Securities Private Ltd
1,095,657
0.09
20 HL Bank Nominees (Singapore) Pte Ltd
1,093,470
0.09
993,836,805
84.51
Total
Substantial shareholder (as shown in the Register of Substantial Shareholders)
Substantial shareholder
Temasek Holdings (Private) Limited
Number of Shares
Direct Interest
657,306,600
%*
55.90
Deemed Interest**
284,395
%*
0.02
* Based on 1,175,915,655 ordinary shares issued as at 29 May 2013 (this is based on 1,199,851,018 shares in issue as at 29 May 2013, excluding
the 23,935,363 shares held in Treasury as at 29 May 2013).
** Deemed interest means interest determined pursuant to Section 4 of the Securities and Futures Act, Chapter 289 of Singapore.
Shareholdings held by the public
Based on the information available to the Company as at 29 May 2013, 44.03 percent of the issued ordinary shares of the
Company are held by the public and, therefore, Rule 723 of the Listing Manual issued by SGX-ST is complied with.
200
SINGAPORE AIRLINES
SHARE PRICE AND TURNOVER
Singapore Airlines Share Price and Turnover
100
3,400
3,200
3,000
60
2,800
Index
Share Price ($)
Volume (Million Stock Units)
80
40
2,600
20
2,400
0
2,200
Apr 12
May 12
Jun 12
Jul 12
Aug 12
Sep 12
Oct 12
Nov 12
Dec 12
Jan 13
Feb 13
Mar 13
Turnover
Closing Price
ST Index
Share Price ($)
2012-13 2011-12
High 11.35 14.77
Low 10.10 10.05
Closing 10.87
10.77
Market Value Ratios R1
Price/Earnings
33.76 Price/Book value
0.97 Price/Cash earnings R2
6.39 38.06
0.98
6.53
R1
Based on closing price on 31 March and Group numbers.
R2
Cash earnings is defined as profit attributable to owners of the Parent plus depreciation and amortisation.
201
ANNUAL REPORT 2012/13
NOTICE OF ANNUAL GENERAL MEETING
SINGAPORE AIRLINES LIMITED
(Incorporated in the Republic of Singapore)
Company Registration No. 197200078R
Notice is hereby given that the Forty-First Annual General Meeting of Singapore Airlines Limited (“the Company”) will be held
at the Grand Mandarin Ballroom, Level 6, Main Tower, Mandarin Orchard Singapore, 333 Orchard Road, Singapore 238867 on
Friday, 26 July 2013 at 2.00 p.m. to transact the following business:
Ordinary Business
1. To receive and adopt the Directors’ Report and Audited Financial Statements for the year ended 31 March 2013 and the
Auditor’s Report thereon.
2. To declare a final dividend of 17 cents per ordinary share for the year ended 31 March 2013.
3. To re-elect the following Directors who are retiring by rotation in accordance with Article 82 of the Company’s Articles of
Association and who, being eligible, offer themselves for re-election:
(a) Mr Goh Choon Phong
(b) Mr Lucien Wong Yuen Kuai
Ms Euleen Goh is retiring by rotation at the Forty-First Annual General Meeting and will not be offering herself for re-election.
4. To re-elect the following Directors who are retiring in accordance with Article 89 of the Company’s Articles of Association
and who, being eligible, offer themselves for re-election:
(a) Mr Hsieh Tsun-yan
(b) Mr Gautam Banerjee
5. To approve Directors’ emoluments of up to $1,700,000 for the financial year ending 31 March 2014 (FY2012-13:
up to $1,650,000).
6. To re-appoint Messrs Ernst & Young LLP as Auditor of the Company and to authorise the Directors to fix their remuneration.
Special Business
7. To consider and if thought fit, approve, with or without modification, the following resolutions as Ordinary Resolutions:
7.1 That pursuant to Section 161 of the Companies Act, Cap. 50, authority be and is hereby given to the Directors of the
Company to:
(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be
issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or
other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their
absolute discretion deem fit; and
202
SINGAPORE AIRLINES
NOTICE OF ANNUAL GENERAL MEETING
(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance
of any Instrument made or granted by the Directors while this Resolution was in force,
provided that:
(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of
Instruments made or granted pursuant to this Resolution) does not exceed 50 per cent of the total number of issued
shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2)
below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the
Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does
not exceed 5 per cent of the total number of issued shares (excluding treasury shares) in the capital of the Company
(as calculated in accordance with sub-paragraph (2) below);
(2) (subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities Trading Limited
(“SGX-ST”)) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph
(1) above, the percentage of issued shares shall be based on the total number of issued shares (excluding treasury
shares) in the capital of the Company at the time this Resolution is passed, after adjusting for:
(i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of
share awards which are outstanding or subsisting at the time this Resolution is passed; and
(ii) any subsequent bonus issue or consolidation or subdivision of shares;
(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing
Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the
Articles of Association for the time being of the Company; and
(4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue
in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next 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 from time to time such number of fully paid ordinary shares as may be required to be issued pursuant
to the vesting of awards under the SIA Performance Share Plan and/or the SIA Restricted Share Plan,
provided that the maximum number of new ordinary shares under awards to be granted pursuant to the SIA Performance
Share Plan and the SIA Restricted Share Plan during the period commencing from the date of this Annual General Meeting
of the Company and ending on the date of the next Annual General Meeting of the Company or the date by which the next
Annual General Meeting of the Company is required by law to be held, whichever is the earlier, (excluding new ordinary
shares arising from any adjustments made from time to time pursuant to the SIA Performance Share Plan and the SIA
Restricted Share Plan) shall not exceed 8,816,089 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 2013.
8. To transact any other business as may properly be transacted at an Annual General Meeting.
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 2 August 2013 for the preparation of dividend warrants.
Duly completed and stamped transfers (together with all relevant documents of or evidencing title) received by the Share
Registrar, M & C Services Private Limited, 112 Robinson Road, #05-01, Singapore 068902 up to 5.00 p.m. on 1 August 2013
will be registered to determine shareholders’ entitlements to the final dividend. Subject as aforesaid, shareholders whose
Securities Accounts with 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 2013 will be entitled to the final dividend.
The final dividend, if so approved by shareholders, will be paid on 16 August 2013.
By Order of the Board
Ethel Tan (Mrs)
Company Secretary
27 June 2013
Singapore
204
SINGAPORE AIRLINES
NOTICE OF ANNUAL GENERAL MEETING
Explanatory notes
1. In relation to Ordinary Resolution Nos. 3(a) and 3(b), Mr Goh Choon Phong will, upon re-election, continue to serve as
a member of the Board Executive Committee. Mr Lucien Wong Yuen Kuai will, upon re-election, continue to serve as a
member of the Board Executive Committee, Board Nominating Committee and Board Safety and Risk Committee. Mr Goh
and Mr Wong are considered non-independent Directors. Please refer to the sections on Board of Directors and Corporate
Governance in the Annual Report for further details on Mr Goh and Mr Wong, respectively.
2. In relation to Ordinary Resolution Nos. 4(a) and 4(b), Article 89 of the Company’s Articles of Association permits the Directors
to appoint any person approved in writing by the Special Member to be a Director, either to fill a casual vacancy or as an
addition to the existing Directors. Any Director so appointed shall hold office only until the next following Annual General
Meeting, and shall then be eligible for re-election. Mr Hsieh Tsun-yan and Mr Gautam Banerjee were appointed on 1 September
2012 and 1 January 2013 respectively, and are seeking re-election at the forthcoming Forty-First Annual General Meeting.
Mr Hsieh will, upon re-election, continue to serve as a member of the Board Audit Committee and the Board Compensation
and Industrial Relations Committee. Mr Banerjee will, upon re-election, continue to serve as a member of the Board
Compensation and Industrial Relations Committee and will be appointed Chairman of the Board Audit Committee.
Both Mr Hsieh and Mr Banerjee are considered independent Directors. Please refer to the sections on Board of Directors and
Corporate Governance in the Annual Report for further details on Mr Hsieh and Mr Banerjee.
3. 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. Directors’ fees are computed based on the anticipated number of
Board and Committee meetings for Financial Year 2013-14, assuming full attendance by all of the non-executive Directors.
The amount also caters for unforeseen circumstances, for example, the appointment of additional Directors, additional
unscheduled Board meetings and/or the formation of additional Board Committees. The amount also includes transport
and travel benefits to be provided to the non-executive Directors. In the event that the amount proposed is insufficient,
approval will be sought at the next Annual General Meeting before payments are made to Directors for the shortfall.
Mr Goh Choon Phong, being the Chief Executive Officer, does not receive any Director’s fees.
4. Ordinary Resolution No. 7.1, if passed, will empower Directors to issue shares, make or grant instruments convertible into
shares and to issue shares pursuant to such instruments. The number of shares which the Directors may issue under this
Resolution will not exceed 50 per cent of the issued shares (excluding treasury shares) in the capital of the Company,
with a sub-limit of 5 per cent for issues other than on a pro rata basis. The 5 per cent sub-limit for non-pro rata issues
is lower than the 20 per cent sub-limit allowed under the Listing Manual of the Singapore Exchange Securities Trading
Limited. For the purpose of determining the aggregate number of shares which may be issued, the percentage of issued
shares shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at
the time this Ordinary Resolution is passed, after adjusting for (a) new shares arising from the conversion or exercise of
any convertible instruments or share options or vesting of share awards which are outstanding at the time this Ordinary
Resolution is passed and (b) any subsequent bonus issue or consolidation or subdivision of shares. For the avoidance of
doubt, shareholders’ approval will be required for any consolidation or subdivision of shares.
5. Ordinary Resolution No. 7.2, if passed, will empower the Directors to grant awards pursuant to the SIA Performance Share
Plan and the SIA Restricted Share Plan, and to allot and issue ordinary shares in the capital of the Company (“Shares”)
pursuant to the SIA Performance Share Plan and the SIA Restricted Share Plan provided that the maximum number of new
Shares under awards which may be granted pursuant to the SIA Performance Share Plan and the SIA Restricted Share Plan
from this Annual General Meeting to the next Annual General Meeting (excluding new ordinary shares arising from any
adjustments made from time to time pursuant to the SIA Performance Share Plan and the SIA Restricted Share Plan) shall
not exceed 8,816,089 Shares, which represents 0.75 per cent of the total number of issued Shares (excluding treasury
shares) as at 31 March 2013.
205
ANNUAL REPORT 2012/13
The SIA Performance Share Plan and the SIA Restricted Share Plan were adopted at the Extraordinary General Meeting
of the Company held on 28 July 2005. The SIA Employee Share Option Plan was adopted at the Extraordinary General
Meeting of the Company held on 8 March 2000 and modified at the Extraordinary General Meetings of the Company held
on 14 July 2001, 26 July 2003 and 31 July 2009. The last grant of options made under the SIA Employee Share Option
Plan was on 1 July 2008 and these options are exercisable up to 30 June 2018.
As at 29 May 2013, the latest practicable date prior to the printing of this Notice (the “Latest Practicable Date”):
(a) 64,923,712 Shares, representing approximately 5.52 per cent of the issued Shares (excluding treasury shares) as at
the Latest Practicable Date, have been allotted and issued pursuant to the exercise of options under the SIA Employee
Share Option Plan and the vesting of awards under the SIA Performance Share Plan and the SIA Restricted Share Plan
since the inception of the respective plans;
(b) 33,251,464 Shares, representing approximately 2.83 per cent of the issued Shares (excluding treasury shares) as at
the Latest Practicable Date, are comprised in outstanding and unexercised options granted under the SIA Employee
Share Option Plan; and
(c) 2,030,321 Shares, representing approximately 0.17 per cent of the issued Shares (excluding treasury shares) as at the
Latest Practicable Date, are comprised 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 number of issued Shares (excluding
treasury shares), as determined in accordance with the respective plans.
Notes:
1.
The Chairman of the Annual General Meeting will be exercising his right under Article 63 of the Articles of Association of the Company to demand
a poll in respect of each of the resolutions to be put to the vote of members at the Annual General Meeting and at any adjournment thereof.
Accordingly, each resolution at the Annual General Meeting will be voted on by way of a poll.
2.
A member of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote instead
of him. A proxy need not be a member of the Company.
3.
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.
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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 6083
Email: [email protected]
MCI (P) 178/05/2013
Singapore Company Registration Number
197200078R
www.singaporeair.com

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