EMPOWERING ANNUAL REPORT 2010/2011 GROWTH IN …

EMPOWERINGGROWTH IN SINGAPORE AVIATION

ANNUALREPORT

2010/2011

CIVIL AVIATION AUTHORITY OF SINGAPORE

CONTENTS

VisionA leader in civil aviation; a city connecting the world.

MissionTo grow a safe, vibrant air hub and civil aviation system, making a key contribution to Singapore’s success.

Chairman’s Statement 02

Director-General’s Statement 04

Authority Members 08

The Authority’s Committees 10

CAAS Principal Officers 12

Cultivating A Strong Safety Culture 14

Advancing Air Navigation Services 22

Connecting People, Places 28and Possibilities

Developing a Vibrant Aviation Industry 34

Shaping Global Aviation 40

Boosting Aviation Knowledge 48and Expertise

Nurturing People and Lives 54

Air Traffic Statistics 59

Financial Statements 61

>1ANNUAL REPORT 2010/2011

CHAIRMAN’SSTATEMENT

From expanding Singapore’s connectivity to taking progressive steps towards the modernisation of our aviation safety regulation framework, to promoting the aviation industry, CAAS continues to be a key partner in emphasising productivity, innovation and the building of new capabilities.

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A YEAR OF GROWTH

In an eventful 12 months, the global aviation sector has made an impressive recovery to register record growth in spite of rising fuel prices, natural disasters and political changes. In fact, 2010 turned in the best results of the decade, with airlines posting a net profit of US$18 billion globally.

Much of the robust recovery hailed from Asia, as once more Asia continues to power through in economic growth. Asia remains a region of continued strong economic activity and high employment, with its impressive performance spurring the steady increase in international air travel.

SINGAPORE’S AVIATION HEART

Surging alongside was Changi Airport, making great strides with a healthy set of figures for 2010. Its traffic soared to 42 million passenger movements at a comfortable 13 per cent growth year-on-year. Cargo movements also surged 11 per cent to 1.81 million tonnes and aircraft movements rose steadily by 10 per cent to 264,000 flights. Changi has also shown pliability in adapting to the dynamic changes, with its record performance rising in part to its efficacious answering to the growing demand for low cost travel.

As for the aerospace industry, the development of Seletar Aerospace Park (SAP) is progressing unabated with new tenants such as Eurocopter SEA commencing operations there and Rolls Royce’s “Facility of the Future” slated to be operational in 2012. New investments continue to flow in, which will contribute to the further transformation of Singapore’s aviation landscape. These developments signal the confidence of international aviation companies and organisations in Singapore’s aviation sector and they are helping to broaden our expertise and capabilities.

From expanding Singapore’s connectivity to taking progressive steps towards the modernisation of our aviation safety regulation framework, to promoting the aviation industry, CAAS continues to be a key partner in emphasising productivity, innovation and the building of new capabilities. Each success reflects our ongoing efforts to strengthen Singapore’s position as a leading aviation hub, significantly contributing to Singapore’s economic development.

I would like to thank the Authority members for their insight and guidance over the past year. My appreciation also goes to the CAAS management and staff for their dedication and immense contributions that continue to fuel the development of Singapore’s aviation industry.

The aviation industry has shown that it has the tenacity needed to adapt to exciting developments in the aviation landscape in and around Singapore. As we mark 100 years of aviation in Singapore this year, CAAS will continue to seek out more opportunities to collaborate with industry players and government partners to empower the aviation industry to grow further in these exciting times.

LEE HSIEN YANGChairman

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>2 CIVIL AVIATION AUTHORITY OF SINGAPORE >3ANNUAL REPORT 2010/2011

DIRECTOR-GENERAL’SSTATEMENT

2010 began at an exhilarating pace and the year was punctuated with a number of notable events which challenged the aviation community to work more closely together. The Civil Aviation Authority of Singapore (CAAS) pressed on with our quest to develop Singapore as a truly dynamic and vibrant aviation hub of excellence. The year under review saw the strengthening of our positions as an industry regulator and enabler. We continued to work in close collaboration with international partners and the industry, promoting cooperation and engagement to build on common goals.

MODERNISING OUR AVIATION SAFETY REGIME

As a global aviation hub, Singapore must ensure a robust aviation safety environment. In the past year, we embarked on a review of our safety regulatory regime with a goal to ensure that our safety regulations and approach remain relevant and effective amidst the dynamic changes in the industry. In August 2010, Singapore was audited under the Universal Safety Oversight Audit Programme by the International Civil Aviation Organization (ICAO). I am very pleased to report that Singapore attained one of the best results internationally. This is an affirmation of the high aviation safety standards that Singapore maintains as well as the commitment of the aviation industry to keep the industry safe.

The cooperation and support of the aviation industry is important in such efforts. Recognising this, CAAS has stepped up our engagement with the industry. We introduced the CAAS Safety Series as an open platform for the sharing of knowledge, views and experiences related to aviation safety. To strengthen our safety oversight, we also established Singapore’s State Safety Programme in November 2010. The initiative aims to raise overall safety standards in a structured manner and will certainly contribute towards a more robust aviation safety regime.

STRENGTHENING SINGAPORE’S AIR HUB POSITION

During the year, Singapore concluded or enhanced bilateral Air Services Agreements with eight countries, and inked four Open Skies Agreements with Barbados, Brazil, Jamaica and Rwanda. Such agreements continue to provide airlines and airfreight operators with greater flexibility in developing new routes and services, with direct positive impact on trade and tourism.

With expanded connectivity and increasing air traffic, effective air traffic management becomes more crucial than ever. Our air traffic controllers kept pace with prevailing knowledge and expertise. This enabled them to rise to the challenge when they were faced with several air traffic situations during the year, such as the emergency situation faced by QFA32 and flights disrupted by the volcanic eruptions in Java.

The year under review saw the strengthening of our positions as an industry regulator and enabler. We continued to work in close collaboration with international partners and the industry, promoting cooperation and engagement to build on common goals.

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At the regional level, CAAS collaborates closely with neighbouring States towards more efficient use of airspace whilst safeguarding the safety of air traffic. For example, we participated in the safety assessment for reduced longitudinal separation in air routes over the Bay of Bengal, which was subsequently implemented in June 2011. We also signed a collaborative agreement with DGCA Indonesia on the sharing of Automatic Dependence Surveillance-Broadcast (ADS-B) data, which enables the monitoring of aircraft positions beyond the coverage of conventional radar systems. Such agreements bring benefits to all parties.

DRIVING INDUSTRY DEVELOPMENT

Over the years, the Singapore aviation sector has grown to become one of the pillars of the nation’s economy. CAAS supports its development by enabling enterprise, ideas and people to help industry players innovate, build new capabilities and increase competitiveness.

The Aviation Development Fund was launched in 2010, with S$100 million set aside over five years to develop the aviation sector. Since then, three programmes have been initiated, namely the Aviation Innovation Programme, the Aviation Partnership Programme and the Aviation Manpower Programme. The programmes address areas that will help enhance the competitiveness of the industry, such as capability enhancement, talent development and productivity improvement.

CONTRIBUTING TO GLOBAL AVIATION

In 2010, CAAS was successfully re-elected to the ICAO Council for another three-year term. We are also honoured to have our CAAS officer, Mr Mervyn Fernando, re-appointed President of ICAO’s Air Navigation Commission for a second term. We continue to actively participate in ICAO bodies, sharing our expertise and experience with our counterparts on a wide range of civil aviation matters, including aviation safety, security and medicine, air traffic management and environment protection, just to name a few. The participation in these bodies allows Singapore to remain as an active voice in global aviation and to contribute to the growth of aviation in a sustainable, safe and efficient way.

FINANCIAL PERFORMANCE OVERVIEW

Driven by the stronger than expected economic recovery, we achieved a net surplus of S$83 million on the back of an income of S$304 million for the year ended 31 March 2011. As the first full year of operations since restructuring on 1 July 2009, our results benefitted from an additional quarter of contributions against the previous year and also from the growth in passenger traffic. Our sterling financial performance provides a strong and solid platform for us to carry out our mission in regulating and enabling aviation.

NURTURING TALENT

Within the organisation, CAAS believes whole-heartedly that our people are central to what we do. Our FLIGHT core leadership competencies enable us to identify staff potential and during the year, they were reviewed to better align our officers to our new organisational strategies and values. We also revised starting salaries, allowances and annual salary increments to ensure that our compensation packages remain competitive against the market. This will allow us to continue to attract and retain talent.

The achievements of CAAS are a team effort and for this, I am deeply grateful to the Authority Members, my management colleagues and every CAAS employee for their continued support and dedication. Together, I am confident we can further strengthen the foundation for Singapore as an aviation hub of excellence.

YAP ONG HENGDirector-General


AUTHORITY MEMBERSAs at 31 March 2011

6

CHAIRMAN LEE HSIEN YANG

MEMBER NG WAI CHOONG

MEMBER QUEK KENG LIANG

MEMBER SENG HAN THONG

MEMBER YAP ONG HENG

MEMBER ZULKIFLI BAHARUDIN

Not pictured:

MEMBERTEO SWEE LIAN(up to 30 June 2010)

MEMBER GOH JOON SENG

MEMBER KHOO CHIN HEAN

MEMBER LEE BOON NGIAP(from 1 August 2010)

MEMBER LIM YEOW KHEE

MEMBER MG NG CHEE MENG


THE AUTHORITY’S COMMITTEESAs at 31 March 2011


MEMBER MG NG CHEE MENG


MEMBER YAP ONG HENG

MEMBER ZULKIFLI BAHARUDIN

SECRETARY PETER WEE

STAFF & REMUNERATION COMMITTEE

CHAIRMANTEO SWEE LIAN (up to 30 June 2010)

CHAIRMANNG WAI CHOONG (from 19 August 2010)

MEMBER KHOO CHIN HEAN

MEMBER NG WAI CHOONG(up to 18 August 2010)

MEMBER YAP ONG HENG

SECRETARY CHIA SIN YEE

INVESTMENT COMMITTEE

CHAIRMAN ZULKIFLI BAHARUDIN

MEMBER GOH JOON SENG

MEMBER LIM YEOW KHEE

MEMBER QUEK KENG LIANG


SECRETARY SNG HOCK SENG

AUDIT COMMITTEE


ALTERNATE CHAIRMAN NG WAI CHOONG

MEMBER NG WAI CHOONG

MEMBER YAP ONG HENG

ALTERNATE MEMBER KHOO CHIN HEAN

ALTERNATE MEMBER MG NG CHEE MENG

TENDERS COMMITTEE

CHAIRMAN YAP ONG HENG

VICE-CHAIRMAN FOONG CHEE LEONG

MEMBER LAM KENG GAIK

MEMBER NG KIAN PENG

MEMBER EUN JIN PING AUDREY

SECRETARY LOO CHEE BENG

AERONAUTICAL METEOROLOGICAL SERVICE REGULATION COMMITTEE(from 10 August 2010)


CAAS PRINCIPAL OFFICERSAs at 31 March 2011

Not pictured:

DIRECTOR (INTERNATIONAL CIVIL AVIATION ORGANIZATION) / REPRESENTATIVE ON THE COUNCIL OF THE ICAOBONG KIM PIN

DIRECTOR (INTERNATIONAL CIVIL AVIATION ORGANIZATION) – DESIGNATE /ALTERNATE REPRESENTATIVE ON THE COUNCIL OF THE ICAONG TEE CHIOU

DIRECTOR (LEGAL)TAN SIEW HUAY

DIRECTOR-GENERALYAP ONG HENG

DIRECTOR (INTERNAL AUDIT)SNG HOCK SENG

DIRECTOR (FINANCE)CHIA SIN YEE

DIRECTOR (AIRPORT ECONOMIC AND SERVICE REGULATION) NG CHER KENG

CHAIRMAN, CIVIL AVIATION MEDICAL BOARD DR JARNAIL SINGH

DIRECTOR (AIRWORTHINESS AND FLIGHT OPERATIONS) TAN KAH HAN

DEPUTY DIRECTOR-GENERALTAY TIANG GUAN

ASSISTANT DIRECTOR-GENERAL (AIR NAVIGATION SERVICES)SOH POH THEEN

DIRECTOR (HUMAN RESOURCE) & DIRECTOR (CORPORATE SERVICES)PETER WEE

DIRECTOR (SINGAPORE AVIATION ACADEMY)POK CHENG CHONG

COVERING DIVISION HEAD (AVIATION INDUSTRY) DANIEL NG

DIVISION HEAD (AVIATION SECURITY AND EMERGENCY PLANNING)PHILLIP MAH

DIRECTOR (POLICY AND PLANNING) & DIRECTOR (AIR TRANSPORT) MARGARET TAN

DIVISION HEAD (AERODROME AND AIR NAVIGATION SERVICES REGULATION)LOO CHEE BENG

DIRECTOR (SAFETY POLICY AND LICENSING)ALAN FOO

DIRECTOR (CORPORATE COMMUNICATIONS) LYDIA TAN

DIRECTOR (INTERNATIONAL RELATIONS) EILEEN POH


CULTIVATINGA STRONG SAFETY CULTURE


A STRONG SAFETY CULTURE

The aviation industry is constantly evolving and methodical reviews of safety programmes ensure their continued effectiveness. CAAS collaborates closely with the industry to ensure that Singapore has a safe aviation environment and imbibes international best practices in safety.

BENCHMARKING OUR SAFETY REGULATIONS AND PROCESSES

During the year, Singapore was audited by the International Civil Aviation Organization (ICAO) under the Universal Safety Oversight Audit Programme (USOAP). The Audit, conducted between 16 and 25 August 2010, presented CAAS the opportunity to benchmark our safety oversight and regulatory framework and systems. At the same time, areas of improvement were identified, allowing CAAS to enhance several internal processes and to develop new ones to provide greater consistency in our safety oversight.

The outcome of the Audit was encouraging, with Singapore achieving one of the best results globally, which affirmed the robustness of our safety oversight systems and processes. Moving ahead, CAAS will work closely with ICAO and our industry partners to continuously review and strengthen aviation safety standards in Singapore.

ELEVATING SAFETY STANDARDS AND STAYING RELEVANT

With an increasing range of air operations, the aviation safety regulatory framework needs to be reviewed to ensure it remains relevant. During the year, we embarked on a major initiative to modernise the aviation safety regulatory framework, to enable us to better respond to industry changes and ensure that they are aligned with international best practices. A modular approach was adopted to allow for greater scalability in our air operator regulations. The modularity also facilitates the graduation of safety oversight to suit different types of operations.

The new set of air operator regulations will see the introduction of a new class of Air Operator Certificates for operators of small aircraft. This will work towards enhancing Singapore’s attractiveness as a base for a wider range of aircraft operations. Development of these new air operations regulations will continue into the following year.

Aviation Safety: A CAAS airworthiness inspector conducting a ramp inspection.

Aviation Safety: A routine maintenance check being conducted onan Airbus A380 aircraft.

Universal Safety Oversight Audit Programme: An audit session in progress.



CAAS also established Singapore’s State Safety Programme (SSP) in November 2010. The SSP is part of ICAO’s initiatives to elevate safety standards globally and provides for a more structured approach towards safety management at the State level. It incorporates key elements such as safety policy, the Acceptable Level of Safety, risks management,and the enforcement of regulations. The SSP also ties with the Safety Management Systems (SMS) at the industry end to make an integrated aviation safety framework.

HARNESSING RESOURCES AND TECHNOLOGY

To support our safety oversight efforts, two new systems were introduced. We rolled out the Singapore Accident/Incident Reporting System (SAIRS) in early 2010 – a system that integrates reports from service providers such as Singapore Air Operator Certificate holders and aerodrome operators. SAIRS allows CAAS to collect incident reports from various sources onto a single centralised platform, enabling us to analyse safety trends at the aggregated State level. The ability to analyse safety trends allows CAAS to develop safety recommendations and interventions and to tackle safety issues. Singapore is the first country in South East Asia to launch an electronic safety data collection system that is compatible with ICAO’s standardised Accident/Incident Data Reporting (ADREP) taxonomy. In recognition of the benefits gained from the implementation, the project team was awarded the Minister for Transport’s Innovation Awards (Distinguished) in November 2010. The new Safety Oversight Management System (SOMS) was also delivered during the year. This system integrates the management and monitoring of regulated organisations, providing the foundation for more systematic safety oversight and surveillance activities. Phase 1 of SOMS was implemented during the year and Phase 2 will go live in the coming year. In December 2010, we also introduced Computer-based Examinations (CBE). Providing greater convenience and flexibility, the CBE allows candidates to book and confirm their aircraft maintenance examinations online. A dedicated examination centre was also set up at the Singapore Aviation Academy (SAA) to provide candidates with a more conducive examination environment. The results are now released within a few days compared to two months previously, and a new Knowledge Deficiency Report highlights the candidate’s weak areas so that he or she can improve on them.

Number of Approved Training Organisations

Number of Licensed Personnel

Regulated Entities(As at 31 March 2011)

Number of Approved Aerospace Organisations

FLIGHT TRAINING ORGANISATIONS49 MAINTENANCE

TRAINING ORGANISATIONS 1 ATC TRAINING

ORGANISATION

AIRCRAFT MAINTENANCE ENGINEERS1,920

269 3,710AIR TRAFFICCONTROLLERS PILOTS

MAINTENANCE, REPAIR & OVERHAUL ORGANISATIONS115

13 11DESIGNORGANISATIONS

PRODUCTIONORGANISATIONS


INCREASING INDUSTRY ENGAGEMENT AND COMMUNICATIONS

The effectiveness of our safety regulations and policies depends to a large extent on our collaboration and engagement with industry. With enhanced consultation, our regulations and policies can be refined to support industry growth while maintaining safety at the highest possible levels.

Several initiatives were implemented during the year to step up our efforts in engaging and consulting the industry. We set up a new Online Enquiry System which helps to channel feedback or enquiries from the industry to the appropriate officers for prompt action. A formal consultation process was also launched during the year, where consultation papers detailing proposed policies or rules were disseminated to the industry to garner feedback.

Since the launch of this new process, CAAS has conducted several industry consultations addressing the following areas:

• Aircraft leasing• Mixed-fleet flying• SAR-47 approval for Institutes of Higher Learning• Foreign pilot licence conversions• Process for the approval of workshop certifying staff

All consultations elicited positive and useful feedback. The feedback received from the industry has enabled us to refine our policies and rules before implementation.

The CAAS Safety Series was also launched to provide updates on regulatory developments and to engage the industry on various aspects of aviation safety and regulations. The series comprises a mix of monthly talks, workshops or seminars. Since 28 February 2011, four events have been held under the CAAS Safety Series. Feedback has been encouraging and more have been lined up for the rest of 2011.

TESTING EMERGENCY PREPAREDNESS

The flight disruptions caused by the Iceland volcano eruption in April 2010 and the Japan nuclear reactor incident in March 2011 provided real opportunities to practise the coordination and processes laid out in our Emergency Preparedness (EP) plans. Our CAAS Coordination Group was activated during these incidents, allowing us to fine-tune our structure and work processes. In addition, our crisis management framework underwent a thorough workout in October 2010 when the Ministry of Transport conducted an exercise. This exercise provided a valuable opportunity for CAAS to validate our crisis management framework and to identify deficiencies. Such exercises help our teams plan for the unexpected and put into practice appropriate response measures that help mitigate the impact of crises.

Our EP team also assisted Changi Airport Group (CAG) to develop plans on pandemic border health measures, for mass stranded passengers and on incident management during the year. As the Changi Airport operator, CAG is required to be prepared for all contingencies affecting the airport.

ENHANCING AVIATION SECURITY

While facilitating seamless passenger and cargo movements, CAAS is committed to aviation security not being compromised. During the year, CAAS formed the National Air Transport Facilitation Committee (NATFC), which complies with the standards in ICAO Annex 9. The NATFC provides coordination among multiple agencies to enhance facilitation for the civil aviation industry. Since the formation of the NATFC, working groups comprising relevant stakeholders have been created. One such group was tasked to set up a National Air Transport Facilitation Programme for Singapore to facilitate the movement of aircraft, crew, passengers and air cargo. Separately, a study of Singapore’s current aviation security measures at passenger and air cargo checkpoints was initiated to assess further security enhancements needed.


CAAS Safety Series: Sharing updates on regulatory developments and engaging with industry partners.


ADVANCINGAIR NAVIGATION SERVICES


AIR NAVIGATION SERVICES

As Singapore’s Air Navigation Services Provider (ANSP), CAAS is committed to delivering superior air navigation services to ensure safe and expeditious air traffic flow. In 2010, more than 507,000 aircraft movements at and around Changi and Seletar airports and within the Singapore Flight Information Region (FIR) was recorded. Despite the increasing air traffic growth, our air traffic controllers continued to maintain a high standard of safety.

SAFETY IN FOCUS

Audits and inspections are conducted regularly as part of ongoing efforts to improve the safety performance of our air navigation services. In June 2010, an external audit was also conducted by Airways New Zealand. This audit gave the assurance that CAAS had a robust and safe air traffic management system in place. It also provided useful recommendations for the overall improvement of our system.

CAAS also instituted a Safety Management System (SMS), in compliance with ICAO standards. The SMS ensures that staff are inculcated in safety knowledge and practices. Safety Officers, equipped with the know-how and skills to promote a strong safety culture, were also appointed. Keeping safety in focus, the inaugural Air Traffic Services (ATS) Safety Day was held on 16 March 2011. Staff who made outstanding contributions towards safety were recognised through safety awards, lending emphasis to the importance of safety within the organisation.

STAYING CALM DURING AN EMERGENCY

CAAS’ ability to deliver reliable air navigation services even during an emergency was put to the test on 4 November 2010. A Qantas Airways flight, QFA32, returned for an emergency landing at Changi Airport after experiencing serious engine trouble shortly after takeoff. Throughout the emergency situation, air traffic controllers worked seamlessly with the aircraft’s pilot, ground emergency crews and other support staff to facilitate the aircraft’s safe landing, while ensuring the continued smooth flow of air traffic at Changi.

“The Singapore air traffi c control was exceptional. I owe gratitude and thanks to all those controllers who helped us. They kept us close to the airport. They did not distract us with unnecessary radio calls. They understood our calls and passed them on. They never put pressure on us. So I would like to say, ‘Thank you, Singapore.’’said Captain Richard de Crespigny, pilot onboard Qantas flight QFA32 (Source: Straits Times, 24 December 2010)

Singapore Air Traffic ControlCentre: An air traffic controllerat work

RESTRUCTURING TO DRIVE TRANSFORMATION

With the anticipated demands of future air traffic growth, CAAS restructured its Air Navigation Services (ANS) Group to balance focus on daily operations as well as future developments in ANS. The organisational review of the ANS Group was completed and implemented in March 2011. The new structure will raise the level of supervision for operations and the management of complex projects. It will also prepare CAAS for the next phase of ANS developments. In particular, the creation of the Development Planning Branch allows CAAS to focus resources on long term ANS developments and build up capabilities in a systematic and sustainable manner.


AIR NAVIGATION SERVICES

DRIVING EFFICIENCY THROUGH COLLABORATION

Efficiency in the skies may be improved through enhancing air traffic management processes and arrangements. As a member of the ANSP community, CAAS assisted India in the safety assessment for the implementation of reduced longitudinal separation in the air routes over the Bay of Bengal area in June 2010. This significant multi-national collaboration effort led to improved flight efficiency in a high air traffic density region, and paves the way for further international cooperation.

Plans to work with neighbouring States on Automatic Dependence Surveillance-Broadcast (ADS-B) implementation and data-sharing arrangements are also underway. ADS-B is a next generation surveillance technology that allows air traffic controllers to accurately monitor aircraft positions beyond the range of conventional radar systems. CAAS is investing in ADS-B technology to augment our surveillance and control capabilities over the South China Sea areas for more effective air traffic control, enhanced safety and reduced separation of air traffic. A collaboration agreement between CAAS and DGCA Indonesia was concluded and we are exploring similar agreements with other countries in the region.

We are also in the process of implementing the Aeronautical Information Management (AIM) system, which will allow the fusing of both static and dynamic aeronautical data for improved information dissemination to aeronautical stakeholders. When implemented, the AIM will enable the streamlining of the flight planning process for operators. The AIM system is slated to be operational by end 2011.

REDUCING THE CARBON FOOTPRINT

The pressures for the aviation industry to go green have been mounting in recent years. CAAS champions green civil aviation and recognises the importance of efficient ANS towards this end. In our role as the South East Asia Regional Safety Monitoring Agency, we are well-positioned to facilitate the safe reduction of horizontal separation between aircraft across the South China Sea. This enables airlines to utilise more efficient air routes between destinations, thus achieving fuel savings as well as reducing their carbon emissions.

CAAS has been conducting trials to operationalise the Continuous Descent Operations (CDO) concept, which is a flight technique allowing aircraft to land via an optimum continuous profile. Aircraft employs minimal engine thrust, resulting in lower fuel burn, reduced noise and carbon emissions.

The trials have shown great promise to date, achieving fuel savings of 27% at certain phases of the flight, carbon emission reduction of 118,995kg, and flight time savings of up to three minutes per flight. The CDO procedures are scheduled for launch by end 2011.

ENGAGING THE ANSP COMMUNITY

CAAS collaborates with the global ANSP community to share and learn from the expertise and experience of our counterparts. As a member of the Civil Air Navigation Services Organisation (CANSO) since 2008, CAAS actively participates in numerous CANSO programmes, which provide us with a valuable platform to benchmark against some of the industry’s best practices.

In November 2010, CAAS hosted the Annual CANSO Global Air Traffic Management (ATM) Safety Conference where ANSPs freely shared their experiences in ATM safety management. As part of fringe activities of the conference, CAAS also hosted the CANSO Asia-Pacific ATM Safety Workshop and the CANSO Asia-Pacific ATM Operations Best Practices Seminar.

Another event that is instrumental in fostering ties and building capabilities is Indopura SAREX. From its modest beginnings as a table top exercise in 1982, Indopura SAREX has evolved into an annual full-scale exercise promoting mutual learning through physical deployment of assets and the sharing of search and rescue experiences by the various States.

European air travel was severely affected by Iceland’s Eyjafjallajökull eruption in April 2010. As part of preparations to be operationally ready to handle such emergencies, CAAS sent a team to an aviation conference held in Iceland and visited a few European counterparts to understand the aviation impact of volcanic eruptions. Harnessing the insights gained from Europe’s experience, an interim procedural arrangement was developed to address any volcanic eruptions that might disrupt flight movements within the Singapore FIR. This proved to be useful during the volcanic eruptions in Java. The procedural arrangement was shared at regional and ICAO fora and was well-received.

21st Meeting of the Asia-Pacifi c Air Navigation Planning and Implementation Regional Group (APANPIRG/21) in September 2010: Participants.

Annual CANSO Global ATM Conference, November 2010: Yap Ong Heng, Director-General, CAAS meeting delegates.


CONNECTINGPEOPLE, PLACES AND POSSIBILITIES


PEOPLE, PLACES AND POSSIBILITIES

By championing the liberalisation of air services, CAAS is actively working towards an expanded air network, giving airlines enhanced flexibility in developing new routes to serve market needs. The resulting connectivity enhances Singapore’s position as a global air hub, enabling the flow of people and trade between cities.

TOWARDS OPEN SKIES

Changi Airport is truly an aviation hub, serving some 100 airlines which fly to more than 200 cities in about 60 countries and territories. Our pursuit of enhanced air links has been a key contributor to Singapore’s positioning as an air hub. To date, Singapore has Air Services Agreements (ASAs) with more than 100 countries and territories. In the year under review, Singapore expanded or updated its air services framework with the following:

• Bangladesh• Ethiopia• Fiji • France • Greece • Japan • Mauritius• The Philippines Air services liberalisation enhances connectivity, giving passengers and shippers more choice, and facilitates trade and tourism. Following the expansion of the ASA with the Philippines, air traffic between the two countries leapt by 20% over the previous year.

During the year, we also concluded Open Skies Agreements (OSAs) with Barbados, Brazil, Jamaica, and Rwanda. The OSAs were signed at the ICAO Air Services Negotiation Conference 2010 held in early July 2010. These agreements were historic on many fronts – the OSAs with Barbados and Jamaica were the first between Singapore and the Caribbean, while the OSA with Rwanda was Singapore’s second with an African country.

OSAs open up avenues for countries to establish air services frameworks that give carriers full flexibility in developing new routes and services. Direct air links to Africa, Latin American and the Caribbean act as catalysts for enhancing market opportunities and trade flow. Following the OSA with Brazil, Singapore Airlines expanded its flight network to the South American continent with the introduction of its first flight to Sao Paolo in March 2011.

ENHANCING LIBERALISATION IN THE REGION

The ability to push for further liberalisation lies in our strong networks and ties within the aviation sector, and our active participation in international platforms. Our involvement in the ASEAN air transport scene was particularly noteworthy. Leveraging our chairmanship of the ASEAN Air Transport Working Group (ATWG) and the Air Transport Economic Cooperation and Air Transport Technical Cooperation Sub-Working Groups during the year, an Implementation Framework was developed for the ASEAN Single Aviation Market. Apart from chairing meetings we also participated in meetings with the ASEAN Secretariat and Member States to formulate the aviation section in the ASEAN Strategic Transport Plan or Brunei Action Plan 2011-2015.

23rd ASEAN Air TransportWorking Group Meeting


PEOPLE, PLACES AND POSSIBILITIES

These efforts led to the signing of several landmark agreements, notably the ASEAN Multilateral Agreement on the Full Liberalisation of Passenger Air Service (MAFLPAS). Together with the earlier signed Multilateral Agreement on Air Services and Multilateral Agreement on the Full Liberalisation of Air Freight Services, this agreement extends air services liberalisation to ASEAN secondary cities and provides for intra-ASEAN Open Skies, when fully ratified.

Another historic initiative was the signing of the Memorandum of Understanding (MOU) on ASEAN’s Air Services Engagements with Dialogue Partners. This enshrines the principle of ASEAN centrality in ASEAN’s engagements with Dialogue Partners, ensuring that ASEAN would first liberalise within itself before liberalising with a Dialogue Partner. Working towards enhancing connectivity, ASEAN’s first Air Transport Agreement (ATA) with a Dialogue Partner – China - was concluded in 2010. This ATA provides for unlimited third and fourth freedom air services between ASEAN and the Asian giant, China.

In a show of collaborative accord, ASEAN Transport Ministers endorsed the recommendation to launch the ASEAN Single Aviation Market (ASAM) Implementation Framework by the end of 2011. The ASAM has been identified as one of the pillars supporting the establishment of the ASEAN Economic Community by 2015 and the framework will be instrumental in the development of the ASAM.

DEVELOPING CHANGI AIRPORT AS AN AIR CARGO HUB

Airfreight represents a significant portion of air traffic in and out of Singapore, with some 1.81 million tonnes handled in 2010. Recognising the importance of Changi Airport as an air cargo hub, CAAS has allocated about 80,000 square metres of land for the development of the Air Cargo Express (ACE) Hub and its supporting airside infrastructure in Changi Airport. The new ACE Hub will serve as a specialised cargo and logistics infrastructure for air express companies. In the meantime, efforts to enhance the development of the air cargo and logistics sector continue unabated. CAAS signed an MOU with CAG and Schiphol Amsterdam Airport to formalise a collaboration on e-freight. The MOU would allow for paperless freight documentation for the transport of air cargo between Changi and Schiphol Airports to boost efficiency in the logistics supply chain.

Beyond the MOU, CAAS’ e-freight@Singapore efforts continued to extend their reach. A Call-for-Collaboration was launched on 31 March 2011, inviting companies to offer innovative and sustainable solutions that adopt paperless air freight processing. Through such schemes, we hope to tap on the collective expertise and inventiveness of the industry to improve capabilities and raise overall productivity.

ENABLING INDUSTRY ENGAGEMENT AND GROWTH

During the year, a new Category B licence for the provision of scheduled air services on sectors without traffic rights constraints was introduced. The Category B licences are an attractive option for Singapore-based carriers as they allow carriers to operate any number and frequencies of air services with any aircraft type on a particular sector. Thus, carriers enjoy maximum flexibility on sectors that have been fully liberalised under Singapore’s air services agreements with its bilateral partners. As an added bonus, the administrative load for carriers is also reduced.

In our continuing efforts to engage the industry, CAAS consulted 16 operators over December 2010 to January 2011 on the proposed policy framework for the Traffic Rights Application Certificate (TAC). The TAC differentiates between Singapore Air Operator Certificate (AOC) holders who are eligible to apply for licences for the provision of scheduled air services, which are the subject of Singapore’s air traffic rights, and those who are not. Following the consultation exercise, the TAC was introduced in June 2011.

Airport Cargo Express Hub: Slated to be operational in 2012.


DEVELOPINGA VIBRANT AVIATION INDUSTRY


As one of the key drivers of the Singapore aviation industry’s development, CAAS works closely with industry players to promote the growth and maintain the competitiveness of this dynamic sector. Adopting a pro-enterprise approach, our initiatives and programmes support an aviation environment where cutting edge technology and new ideas can flourish.

INVESTING IN AVIATION DEVELOPMENT

Since the launch of the S$100 million Aviation Development Fund (ADF) on 29 January 2010, it has fuelled the drive towards growing the local aviation industry. Three programmes launched under the ADF were the S$25 million Aviation Partnership Programme (APP), the S$25 million Aviation Innovation Programme (AIP) and the S$9 million Aviation Manpower Programme.

Under the auspices of the APP, two industry sector-wide projects were initiated, aimed at raising overall standards and productivity of the aviation industry. The Aerospace Standards (AS) Adoption Programme, launched on 1 October 2010, drives the adoption of the AS series of quality management system standards within the local aerospace industry. Jointly rolled out by CAAS and the Association of Aerospace Industries (Singapore), the initiative seeks to enhance the competitiveness of local aerospace organisations by improving their quality management systems.

Productivity efforts in the aviation sector also received a boost with the introduction of the second APP project, the Process Innovation Challenge (PIC). Specifically targeting job redesign and/or process improvements, the PIC encourages companies to improve productivity by introducing small scale projects that can be quickly implemented to achieve incremental productivity improvements. Launched at the inaugural “Productivity in Aviation” seminar on 3 March 2011, the Challenge drew much interest from the 70 industry players in attendance. More productivity seminars are in the pipeline.

At the enterprise level, the AIP has been instrumental in building new capabilities for the aviation industry. Projects submitted for consideration by aviation companies are evaluated based on the new or enhanced capabilities they will bring to Singapore, the level of innovation as well as their value-add to Singapore. During the year, CAAS gave grants to three companies, namely Singapore JAMCO, MAJ Aviation and Combustor Airmotive Services, to enable the ingenuity of their ideas to be transformed into reality.

A VIBRANT AVIATION INDUSTRY

$25mTo drive the adoption ofindustry-level standards or processes that help toenhance overall productivity,effectiveness and competitiveness.

$25mTo encourage companies to innovate and develop new or enhanced capabilities inniches of excellence in theaviation industry.

$9mTo bolster the manpowerdevelopment efforts of theSingapore aviation industry.

AVIATION DEVELOPMENT FUND (ADF)

AVIATION PARTNERSHIP PROGRAMME

AVIATION INNOVATION PROGRAMME

AVIATION MANPOWER PROGRAMME


SELETAR AIRPORT UPGRADING

In the past year, Seletar Airport registered a 10% growth in business aviation movements. The growth figure for Seletar Airport is especially heartening, as it reverses a negative growth trend. This signals a positive outlook for the sector and affirms that our plans for the airport are a step in the right direction. The infrastructural refurbishment of Seletar Airport is ongoing and 2010 saw a completion of 30% of the upgrading works. When completed in 2014, the refurbished airport will reap the benefits of an extended runway, an Instrument Landing System and additional parking bays, making it an ideal airport for business and general aviation users.

OFFERING A WEALTH OF OPPORTUNITIES IN AVIATION

For the aviation industry to flourish, it needs a strong and ready pool of human capital and expertise. Under the Aviation Manpower Programme, CAAS has initiated investments in projects and initiatives that would both develop the workforce and attract talents to the Singapore aviation industry.

An area where CAAS has taken a proactive and focused approach in manpower development is in youth outreach and engagement. To attract the next generation to take on high value-add jobs available in the aviation industry, CAAS has been developing programmes that target youths with the objectives of educating them on Singapore’s aviation industry, its diversities and dynamism, and its career opportunities.

CAAS kick-started our youth outreach efforts on 18 November 2010, when we held our inaugural two-day Aviation Open House in partnership with 32 aviation organisations. We welcomed over 1,700 students, who were keen to network and learn more about aviation from industry professionals.

During the year, more programmes were added. The Aviation Learning Journey was introduced at secondary schools, junior colleges and polytechnics in January 2011 to provide students a taste of actual aviation working environments. Thus far, some 300 students from four schools have made exciting discoveries about the various career options through an engaging half-day session, including a comprehensive introduction to the diverse sectors of our aviation system. CAAS will continue to explore new ways to expand our outreach activities.

A VIBRANT AVIATION INDUSTRY

Inaugural Aviation OpenHouse: Mrs Lim Hwee Hua, former Minister, Prime Minister’s Office andSecond Minister for Financeand Transport meeting withthe youth.


SHAPINGGLOBAL AVIATION


A member of the International Civil Aviation Organization (ICAO)Council since 2003, Singapore is committed to supporting ICAO’s mission of developing civil aviation globally. In this regard, CAAS proactively collaborates with the international civil aviation community and other Civil Aviation Authorities for a safe, efficient and sustainable global aviation system.

Through the strong support of fellow ICAO Contracting States, Singapore was re-elected to the ICAO Council at the 37th ICAO General Assembly in September 2010 for another three-year term. CAAS officer, Mr Mervyn Fernando was also re-appointed for a second term as President of the ICAO Air Navigation Commission (ANC). The ANC is the technical body that advises the ICAO Council on safety and air navigation matters.

PROGRESSING CIVIL AVIATION

As an active member of the international civil aviation community, CAAS plays a part advancing civil aviation at various fora, participating actively in key global and regional meetings. In 2010, these included:

• The Diplomatic Conference on Aviation Security held in Beijing from 30 August to 10 September 2010. The Conference successfully concluded the Beijing Convention 2010 and the Beijing Protocol 2010.

• The 37th ICAO General Assembly in September 2010.

• The 47th Conference of the Asia-Pacific Director-Generals of Civil Aviation (DGCA) held in October 2010.

• The ASEAN Air Transport Working Group meetings and those of the Air Transport Economic Cooperation and Air Transport Technical Cooperation Sub-Working Groups during the year, which led to the formulation of the ASEAN Single Aviation Market Implementation Framework. Meetings with the ASEAN Secretariat and Member States also led to the development of the aviation section in the ASEAN Strategic Transport Plan or Brunei Action Plan 2011-2015.

SHARING EXPERTISE AND EXPERIENCES

To promote an agenda that addresses challenges faced by the aviation community, CAAS shares our expertise and resources in a wide spectrum of civil aviation matters, ranging from safety and air traffic management to aviation environment protection to aviation law and medicine. Currently, CAAS is active in some 70 ICAO bodies, including chairing some 15 of them. Some highlights include:

GLOBAL AVIATION

37th ICAO General Assembly and Council Election in Montreal, Canada.

47th Conference of Directors General of Civil Aviation Asia and Pacifi c Regions.

From left: Raymond Lim, former Minister for Transport, Roberto Kobeh González, President of ICAO Council, Choi Shing Kwok, Permanent Secretary, Ministry of Transport


GLOBAL AVIATION

Aviation Medicine

With the rise in air travel, mitigating high-level public health threats associated with the increasing international movement of passengers continues to be of utmost importance. ICAO’s Cooperative Arrangement for the Prevention of Spread of Communicable disease through Air travel (CAPSCA) launched in Singapore for the Asia-Pacific region is now a global project. CAAS facilitated bringing and entrenching the project in Africa and the Americas and soon in Europe and the Middle-East. In October 2010, CAAS hosted the 1st Global CAPSCA Steering Committee and Regional Aviation Medicine and Public Health Team Meetings to foster sharing of knowledge and best practices across all ICAO regions. With his deep and extensive involvement in the project since its launch, CAAS Officer, Dr Jarnail Singh was appointed Technical Advisor to the Global CAPSCA Project.

Enlarging the platform for aviation medicine experts to share their views, CAAS hosted the International Congress of Aviation and Space Medicine in 2010. Appropriately themed “A new era of relevance for Aerospace Medicine”, the Congress brought together participants from all over the world to take stock of recent and emerging trends, promote discourse and challenge conventional norms to meet the needs of aviation in the future.

CAAS was a member of the ICAO Fatigue Risk Management System Task Force (FRMSTF), which developed regulations and comprehensive guidance materials to enable the incorporation of scientific knowledge into the scheduling of flight and cabin crew so that they may perform their functions within acceptable levels of alertness. CAAS was invited to share our expertise in fatigue risk management at the ICAO Operations Seminar held at the ICAO Asia-Pacific Regional Office, Bangkok, in February 2010.

Dr Jarnail Singh has also rendered aviation medicine assistance under several other official capacities, including appointment as Temporary Advisor to the World Health Organization (WHO) Western Pacific and South East Asia Regional Offices in Manila and New Delhi respectively.

As a testament to Singapore’s contributions, Dr Jarnail Singh was conferred the Won Chuel Kay Award by the Aerospace Medical Association for his outstanding contributions to international aerospace medicine as part of the Singapore aviation medicine team.

Contributing to Aviation Medicine: Dr Jarnail Singh (centre) receiving the Won Chuel Kay award by the Aerospace Medical Association.


Air Navigation

CAAS has on-going collaborations with like-minded States under the auspices of ICAO on several regional air traffic management initiatives. CAAS led various ICAO Regional Task Forces such as the South East Asia Route Review Task Force (SEA RRTF) and the Bay of Bengal Reduced Horizontal Task Force (BOB RHTF) to improve traffic flow and flight efficiency without compromising safety. With expected growth in air travel in the Asia-Pacific region over the next decade, the smoother and safer air traffic flow brought about by these initiatives are timely. As the Vice-Chairman of the Communications, Navigation and Surveillance/Meteorology (CNS/MET) Sub-Group, CAAS has contributed towards the implementation of advanced aeronautical systems in the region. CAAS is also an active participant of the Regional Airspace Safety Monitoring Advisory Group (RASMAG), which has safety monitoring responsibilities of aircraft operations in the Asia-Pacific. As the Southeast Asia Safety Monitoring Agency for aircraft operations over the South China Sea, CAAS helps the global aviation community to enhance the safety of flight operations in this busy air traffic area.

ICAO convenes study groups to examine various emerging issues and to formulate guidelines for Contracting States. CAAS participates in one such study group tasked with developing a global policy on integrating the use of Unmanned Aerial Systems (UAS) with civil aircraft operations safely. At the same time, one of our CAAS officers is serving as a technical expert to the ICAO Air Navigation Bureau, contributing to the development of ICAO guidance materials for Safety Management Systems and the State Safety Programme.

Aviation Environment Protection

Supporting and affirming ICAO’s leadership in addressing international aviation emissions, Yap Ong Heng, Director-General, CAAS was appointed the Chairperson of the DGCA Climate Informal Group – Goals Subgroup, assisting the President of the ICAO Council in the preparation for the 37th ICAO General Assembly. Singapore was also among 23 States tasked to work out the ICAO Aviation and Climate Change resolution for the ICAO General Assembly. After prolonged debates and discussions, the 37th ICAO General Assembly adopted a resolution on addressing international aviation emissions for sustainable growth of the sector.

CAAS also fielded experts to the Ad-Hoc Expert Group (AHEG) on State Action Plans to provide constructive input to ICAO in their preparation of draft guidance materials to encourage as many States to submit their Action Plans as a collective global effort. Further progress was made under the Asia-Pacific Initiative for the Reduction of Emissions (ASPIRE) partnership with the introduction of the ASPIRE daily flights between Singapore and Los Angeles with the aim of reducing aviation emissions on Singapore Airlines’ flights on the route. CAAS also continues to work closely with other Air Navigation Service Providers in the region to implement other initiatives to improve the efficiency of air traffic management processes and procedures, including the use of Performance Based Measures, route restructuring and continuous descent approaches to reduce fuel burn hand emissions.

FORGING TIES FOR GREATER COLLABORATION

Through partnerships, CAAS seeks to advance global civil aviation. Such collaborations have been reinforced with the renewal of MOUs with the regional Civil Aviation Commissions (CACs), which promote cooperation between Singapore and these regions.

Singapore’s relationship with the International Air Transport Association (IATA) was also bolstered during the year with the signing of an MOU in February 2011 to facilitate the development and further expansion of IATA’s Regional Office for Asia-Pacific at its base in Singapore.

Singapore’s bilateral relations with China continues to grow from strength to strength, with some 16 joint seminars held to date under the auspices of the China-Singapore MOU on Civil Aviation Cooperation. In 2010, the inaugural Civil Aviation Familiarisation Programme was introduced, which further enhanced interactions between the senior aviation officials of both countries.


BOOSTINGAVIATION KNOWLEDGE AND EXPERTISE


CAAS believes firmly in the advancement of aviation knowledge and expertise towards a vibrant international aviation sector. The Singapore Aviation Academy (SAA), the training arm of CAAS, is dedicated to sharing aviation knowledge and expertise globally. By providing a platform for the exchange of knowledge and ideas, CAAS also contributes to building Singapore into a centre of excellence for aviation knowledge and human resource development. Over the year, SAA conducted some 140 programmes for more than 6,000 participants from 135 countries. The training programmes, seminars and conferences continued to address pertinent training needs of the international aviation community.

ENHANCING SAA’S PROGRAMMES

SAA continually seeks collaborations with renowned aviation organisations, thought leaders and institutions of higher learning to add value to its conferences and programmes. In the year, these included:

• International Conference on Air Transport, Air Law and Regulation in May 2010: Organised in collaboration with McGill University’s Institute of Air and Space Law and the National University of Singapore’s Centre for International Law, the conference addressed legal and regulatory issues facing civil aviation, with a focus on the Asia-Pacific region.

• International Civil Aviation Organisation (ICAO)-SAA Training Directors Seminar in June 2010: Jointly organised with the ICAO Asia and Pacific Office, the seminar served as a platform for the aviation community in the Asia-Pacific to review the challenges of attracting and training aviation professionals.

• Business Aviation Safety Seminar – Asia in November 2010: Together with the Flight Safety Foundation, International Aviation Business Council, National Business Aircraft Association and Asian Business Aviation Association, this seminar provided delegates from around Asia with updates on safety regulation, operations, infrastructure and challenges of business aviation.

• Master of Business Administration in Aviation (MBAA) launched in January 2011: In collaboration with Embry-Riddle Aeronautical University, USA, the MBAA programme further enhances the range of training offered at SAA. All 21 places were filled for the first cohort.

AVIATION KNOWLEDGE AND EXPERTISE

ICAO-SAA Training DirectorsSeminar, June 2010: Yap Ong Heng, Director-General, CAAS delivering the welcome address.

6,070in FY10/11, Singapore AviationAcademy conducted 140programmes and trained 6,070participants from 135 countries.


AVIATION KNOWLEDGE AND EXPERTISE

A Memorandum of Understanding (MOU) was also inked between ICAO and Singapore to establish the ICAO-Singapore Aviation Security Leadership and Management Seminar. This seminar, to be developed and run by SAA, aims to equip senior management of aviation organisations with the competencies and knowledge on aviation security so that they may effectively carry out their responsibilities.

PROMOTING EXCHANGE OF KNOWLEDGE

SAA ran the 18th Civil Aviation Chief Executive Programme (CACEP) in June 2010. The programme brings together Director-Generals of Civil Aviation and Chief Executives of Aviation Organisations to exchange insights, views and ideas on developments in and challenges facing international aviation.

SAA continued to engage the aviation community under the Aviation Insight Series – a series of talks aimed at providing aviation leaders and experts with a platform for sharing their insights and experiences. During the year, the following talks were organised:

• Global Aviation Safety: Success and Challenges by James Burin, Director of Technical Programmes, Flight Safety Foundation

• After the Dust Settles: Lessons from the Volcanic Ash Crisis and Implications for Global Aviation by Graham Lake, Director General of Civil Air Navigation Services Organisation

• Lessons from the Ueberlingen Incident by Dr Francis Schubert, Head of Corporate Development and Deputy CEO of Skyguide, Swiss Air Navigation Services Ltd

• Human Factors – Still Getting it Wrong after all this Time? by Prof Graham Braithwaite, Head of Department of Air Transport and Professor of Safety and Accident Investigation, Cranfield University, UK

• Trends in Asian Airports Design and Developments by Prof Denoufville, Massachusetts Institute of Technology, US

Under the CAAS Distinguished Visitors Programme, SAA organised an address by Mr Raymond Benjamin, Secretary General of ICAO, on his thoughts on ICAO’s vision for 2020. The audience included representatives from aviation organisations, participants from SAA courses and local polytechnic students pursuing aviation diplomas.

18th Civil Aviation ChiefExecutive Programme, June 2010: Participants

Distinguished Visitor Programme: Yap Ong Heng, Director-General, CAAS presenting a momento to Raymond Benjamin, Secretary General of ICAO, after his sharing session on ICAO’s vision for 2020.

Business Aviation Safety Seminar, November 2010 From Left: Jason Liao, Asian representative, National Business Aviation Assciation,Donald Spruston, Director General, International Business Aviation Council,William R. Voss, President & CEO, Flight Safety Foundation.


NURTURINGPEOPLE AND LIVES

>54 CIVIL AVIATION AUTHORITY OF SINGAPORE >55ANNUAL REPORT 2010/2011 >55

CAAS invests in the development of our people at all levels and empowers them to contribute to the organisation. We aim to cultivate a professional and adaptable workforce by constantly engaging our employees and supporting them in continuous learning.

GROOMING AND RETAINING TALENT

With emphasis on leadership competencies, CAAS has instituted in-house leadership foundation programmes for both managerial and support staff. The Leadership Foundation Programme and Executive Foundation Programme incorporate the FLIGHT framework, which outlines CAAS’ core competencies for the development of our officers. During the year, FLIGHT underwent a review to better align the framework to the new organisational strategies and values of CAAS. The enhanced framework was implemented in mid-2010.

The Learning Needs Analysis system was also refined in line with the restructuring of CAAS, to better align it with our new organisational and divisional goals. The Individual Training Roadmap was incorporated into the Staff Appraisal Report, allowing both staff and supervisors to identify areas for development according to divisional targets and individual competency gaps.

In August 2010, we piloted the Air Traffic Control Officer (ATCO) Functional Competency Framework, which helps ATCOs identify areas of development. This prepared them for the incorporation of the functional competencies in their assessment in January 2011.

To attract and retain talent, CAAS revised the starting salaries of the Civil Aviation Officer (CAO), ATCO and other professional schemes. Allowances for specialist schemes and annual salary increments were also adjusted upwards, benchmarked against market remuneration movements.

PROMOTING STAFF ENGAGEMENT

To promote ongoing communication between management and staff, several initiatives were organised, such as the Staff Conference, townhall sessions and lunch sessions with the Directorate. The first Brown Bag Lunch was also held to facilitate knowledge-sharing and interaction among staff on topics of interest.

PEOPLE AND LIVES

The Aviation CommunityCharity Movie Premiere,November 2010: Organisedby CAAS to raise funds forchildren with special needs.

CAAS Staff Conference 2010: Promoting communication between management and staff.

CAAS staff welfare programme: Free basic health screening.


To enhance communication throughout the organisation, we also introduced the People Developer (PD) network. PD Champions for the various Divisions are engaged on a quarterly basis to communicate corporate and HR-related information to staff in their Divisions.

Committed to cultivating a healthy work-life culture within the organisation, we introduced Blue Sky Fridays and Eldercare leave during the year. Greater emphasis was placed on healthy lifestyle, with a Workplace Health Promotion month in November 2010. Free basic health screening was offered to all staff, and a new screening package for staff aged 40 and above was launched. These initiatives contributed towards CAAS maintaining the HEALTH Platinum Award.

SUPPORTING THE NATION AND SERVING OTHERS

As a statutory board, CAAS embraces public service. In July 2010, we held our inaugural rededication ceremony for National Servicemen (NSmen), where certificates were presented to officers who were promoted or had earned key appointments in their NS units as well as those who had performed well for their IPPT or in-camp training.

Awards obtained during the year included:

• Minister’s Honours Roll

• Minister for Home Affairs Award

• Distinguished Defence Partner Award by MINDEF

• National Day Awards to 23 CAAS officers

• PS21 Star Service Awards to 3 CAAS officers

CAAS also believes in giving back to the community. CAAS was a recipient of the Special Events Platinum Award and the SHARE Gold Award conferred by Community Chest. On 27 November 2010, we also organised the Aviation Community Charity Movie Premiere and raised more than S$80,000 for Community Chest.

PEOPLE AND LIVES

AIR TRAFFIC STATISTICS(Singapore Changi Airport)

PASSENGER MOVEMENTS

COMMERCIAL AIRCRAFT MOVEMENTS

COMMERCIAL AIRCRAFT MOVEMENTS

AIRFREIGHT MOVEMENTS (TONNES)

42,038,7772010

2009

2008

2007

2006

37,203,978

37,694,824

36,701,556

35,033,083

263,5932010

2009

2008

2007

2006

240,360

231,926

220,746

214,224

1,813,8092010

2009

2008

2007

2006

1,633,791

1,856,940

1,894,767

1,911,214



STATEMENT BY THE AUTHORITY MEMBERS OF THE CIVIL AVIATION AUTHORITY OF SINGAPORE

In our opinion,

(a) the accompanying consolidated fi nancial statements of Civil Aviation Authority of Singapore (the “Authority”) and its subsidiaries (the “Group”) are properly drawn up in accordance with the provisions of the Civil Aviation Authority of Singapore Act 2009 (No. 17 of 2009) (the “Act”), Singapore Statutory Board Financial Reporting Standards (“SB-FRS”) and Singapore Financial Reporting Standards (“FRS”) so as to give a true and fair view of the state of affairs of the Authority and the Group as at 31 March 2011, and of the results and changes in equity of the Group and of the Authority and cash fl ows of the Group for the year ended on that date;

(b) proper accounting and other records have been kept, including records of all assets of the Authority whether purchased, donated or otherwise have been kept in accordance with the provisions of the Act; and

(c) the receipts, expenditure, investment of moneys and the acquisition and disposal of assets by the Authority during the fi nancial year have been in accordance with the provisions of the Act.

ON BEHALF OF THE AUTHORITY

LEE HSIEN YANG

Chairman

YAP ONG HENG

Director-General

27 June 2011

CONTENTS Statement by the Authority 61 Members of the Civil Aviation Authority of Singapore

Independent Auditors’ Report 62

Statements of Financial Position 64

Statements of 66Comprehensive Income

Statements of Changes in Equity 67

Consolidated Statement of 69Cash Flows

Notes to Financial Statements 72


INDEPENDENT AUDITORS’ REPORT TO THE AUTHORITY MEMBERS ON THE FINANCIAL STATEMENTS OF CIVIL AVIATION AUTHORITY OF SINGAPOREFor the fi nancial year ended 31 March 2011

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying fi nancial statements of the Civil Aviation Authority of Singapore (the “Authority”) and its subsidiaries (the “Group”) which comprise the statements of fi nancial position as at 31 March 2011, the statements of comprehensive income and statements of changes in equity of the Authority and the Group and statement of cash fl ows of the Group for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 64 to 120.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of fi nancial statements that give a true and fair view in accordance with the provisions of the Civil Aviation Authority of Singapore Act 2009 (No. 17 of 2009) (the “Act”), Singapore Statutory Board Financial Reporting Standards and Singapore Financial Reporting Standards and for devising and maintaining a system of internal accounting controls suffi cient to provide 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 statements of comprehensive income and statements of fi nancial position and to maintain accountability of assets.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these fi nancial 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 fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of fi nancial 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 the management, as well as evaluating the overall presentation of the fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion, the consolidated fi nancial statements of the Group and the statement of fi nancial position, statement of comprehensive income and statement of changes in equity of the Authority are properly drawn up in accordance with the provisions of the Act, Singapore Statutory Board Financial Reporting Standards 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 Authority as at 31 March 2011 and of the results, changes in equity of the Group and of the Authority, and cash fl ows of the Group for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In our opinion, the accounting and other records, including records of all assets of the Authority whether purchased, donated or otherwise, have been kept in accordance with the provisions of the Act.

During the course of our audit, nothing came to our attention that caused us to believe that the receipts, expenditure, investment of moneys and the acquisition and disposal of assets by the Authority during the fi nancial year have not been in accordance with the provisions of the Act.

PUBLIC ACCOUNTANTS AND

CERTIFIED PUBLIC ACCOUNTANTS

Singapore27 June 2011


Group Authority Note 2010/11 2009/10 2010/11 2009/10 S$’000 S$’000 S$’000 S$’000

Equity Capital account 7 2,184,429 2,085,962 2,184,429 2,085,962Reserves 8 81,569 (1,258) 80,221 –

2,265,998 2,084,704 2,264,650 2,085,962 Represented by: Non-current assets Property, plant and equipment 9 1,674,662 1,637,101 1,674,662 1,637,101Capital work-in-progress 10 154,880 119,097 154,880 119,097Interest in jointly controlled entities 12 26,978 33,883 26,978 35,141Investment in associate 13 10,883 – 9,535 – Available-for-sale investments 14 3,600 3,600 3,600 3,600Long-term investments 15 150 150 150 150Derivative fi nancial instruments 16 – 9,556 – 9,556Staff loans 17 401 805 401 805Prepaid lease 18 10,013 10,423 10,013 10,423

1,881,567 1,814,615 1,880,219 1,815,873 Current assets Funds with investment managers 19 – 50,914 – 50,914Trade receivables and accrued income 20 106,527 107,376 106,527 107,376Other receivables and prepayments 21 31,521 48,081 31,521 48,081Amount due from Changi Airport Group (“CAG”) 22 3,272,941 3,278,655 3,272,941 3,278,655Cash and cash equivalents 23 932,162 824,833 932,162 824,833

4,343,151 4,309,859 4,343,151 4,309,859

STATEMENTS OF FINANCIAL POSITIONAs at 31 March 2011


Current liabilities Trade payables and accrued expenses 24 155,050 137,434 155,050 137,434Other payables 25 15,117 11,104 15,117 11,104Contribution payable to Government Consolidated Fund 26 16,399 19,923 16,399 19,923Amount owing to MOF:– Return of surplus 27 467,098 560,000 467,098 560,000– Return of consideration on transfer of airport assets & liabilities 28 3,272,941 3,278,655 3,272,941 3,278,655

3,926,605 4,007,116 3,926,605 4,007,116 Net current assets 416,546 302,743 416,546 302,743

2,298,113 2,117,358 2,296,765 2,118,616 Less: Non-current liabilities Deferred income 29 10,014 10,424 10,014 10,424Provision for pension and post retirement medical benefi ts plan 31 22,101 22,230 22,101 22,230

32,115 32,654 32,115 32,654 2,265,998 2,084,704 2,264,650 2,085,962

See accompanying notes to fi nancial statements.



Continuing operations Income Airport licence fee 3,300 3,300 3,300 3,300Aviation levy 87,048 55,509 87,048 55,509Annual ground rent 75,844 56,250 75,844 56,250Air navigation service charge 109,300 71,070 109,300 71,070Aviation training programme fee 8,671 6,783 8,671 6,783Certifi cation, examination and licence fee 12,392 12,247 12,392 12,247Other operating income 7,331 8,090 7,331 8,090 303,886 213,249 303,886 213,249Expenditure Salaries, wages and staff benefi ts 32 91,095 71,748 91,095 71,748Maintenance of buildings and equipment 37,886 32,598 37,886 32,598Depreciation of property, plant and equipment 9 33,660 52,586 33,660 52,586Property tax 12,883 13,005 12,883 13,005Services related expenses 18,902 18,582 18,902 18,582Other operating expenses 27,645 10,826 27,645 10,826 222,071 199,345 222,071 199,345 Non-operating income, net 33 15,519 52,989 14,657 52,989Share of results of jointly controlled entities 12 3,291 5,382 – – Share of results of associate 13 (1,547) – – – Surplus for the year before contribution to Government Consolidated Fund and income tax 99,078 72,275 96,472 66,893Contribution to Government Consolidated Fund 26 (16,251) (11,372) (16,251) (11,372)Net surplus from continuing operations for the year 82,827 60,903 80,221 55,521Net surplus from discontinued operations for the year 36 – 31,826 – 41,752 NET SURPLUS FOR THE YEAR 82,827 92,729 80,221 97,273 Other comprehensive income Currency translation reserve 37 – 27,855 – – Revaluation reserve 37 – 28,987 – – Other comprehensive income for the year, net of tax – 56,842 – – TOTAL COMPREHENSIVE INCOME FOR THE YEAR 82,827 149,571 80,221 97,273

STATEMENTS OF COMPREHENSIVE INCOMEYear ended 31 March 2011


Currency Accumulated Capital translation Revaluation Restricted surplus/ Note account reserve reserve reserve (loss) Total S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Group Balance at 1 April 2009 2,976,547 (27,855) (28,987) 102 2,854,083 5,773,890 Total comprehensive income for the year 37 – 27,855 28,987 – 92,729 149,571 Loss on restricted reserve upon disposal of a subsidiary 37 – – – (102) – (102) Return of surplus to Government 27 – – – – (560,000) (560,000) Return of consideration on transfer of airport assets & liabilities to Government 28 (890,585) – – – (2,388,070) (3,278,655) Balance at 31 March 2010 2,085,962 – – – (1,258) 2,084,704 Total comprehensive income for the year – – – – 82,827 82,827 Return of consideration on transfer of airport assets & liabilities to Government 28 5,714 – – – – 5,714

Additional paid-up capital 7 92,753 – – – – 92,753

Balance at 31 March 2011 2,184,429 – – – 81,569 2,265,998

STATEMENTS OF CHANGES IN EQUITYYear ended 31 March 2011


Capital Accumulated Note account surplus Total S$’000 S$’000 S$’000

Authority Balance at 1 April 2009 2,976,547 2,850,797 5,827,344 Total comprehensive income for the year – 97,273 97,273 Return of surplus to Government 27 – (560,000) (560,000) Return of consideration on transfer of airport assets & liabilities to Government 28 (890,585) (2,388,070) (3,278,655) Balance at 31 March 2010 2,085,962 – 2,085,962 Total comprehensive income for the year – 80,221 80,221 Return of consideration on transfer of airport assets & liabilities to Government 28 5,714 – 5,714

Additional paid-up capital 7 92,753 – 92,753

Balance at 31 March 2011 2,184,429 80,221 2,264,650


Group Note 2010/11 2009/10 S$’000 S$’000

Operating activities Surplus for the year before contribution to Government Consolidated Fund and income tax A 99,078 112,252Adjustments for: Share of results of jointly controlled entities 12 (3,291) (5,382) Share of results of associate 13 1,547 – Depreciation of property, plant and equipment 9 33,660 52,586 Impairment on property, plant and equipment relating to assets held for sale 9 – 59,363 (Gain)/Loss on disposal of property, plant and equipment (5) 43 Loss/(Income) from funds with investment managers 3,189 (14,983) Changes in fair value of forward exchange contracts 6,916 (11,223) Interest income (6,469) (3,825) Dividends (285) (204) (Reversal)/Allowance for doubtful debts (11) 32 Provision for pension and post retirement medical benefi ts 787 3,880 Amortisation of deferred income (410) (576) Amortisation of prepaid lease 410 410 Loss on disposal of investment in subsidiary group 37 – 70,240 Loss on divestment of jointly controlled entity D 1,356 – Reversal of impairment in jointly controlled entities 12 (10,513) –

Operating cash fl ows before movements in working capital 125,959 262,613 Inventories – 11,076 Trade receivables and accrued income 860 (21,013) Other receivables and prepayments B 25,111 (586,702) Trade payables and accrued expenses 17,616 (95,020) Other payables C 4,017 (30,325) Staff loans repaid 419 381 Pension and post retirement medical benefi ts paid (920) (1,267)

Cash generated from/(used in) operations 173,062 (460,257) Contribution paid to Government Consolidated Fund C (19,924) (69,102) Income tax paid – (2,879)

Net cash from/(used in) operating activities 153,138 (532,238)

CONSOLIDATED STATEMENT OF CASH FLOWSYear ended 31 March 2011

STATEMENTS OF CHANGES IN EQUITYYear ended 31 March 2011


Group Note 2010/11 2009/10 S$’000 S$’000

Investing activities Interest income received 3,099 3,872 Purchase of funds with investment managers – (717) Proceeds from divestment of jointly controlled entity D 6,923 12,245 Purchase of property, plant and equipment and payments for capital work-in-progress (103,811) (404,154) Disposal of property, plant and equipment 5 – Dividends received 285 204 Proceeds from divestments of funds with investment managers 47,690 –

Net cash used in investing activities (45,809) (388,550) Financing activities Repayment of fi nance leases – (702) Withdrawal of fi xed deposits pledged – 5,963

Net cash used in fi nancing activities – 5,261 Net increase/(decrease) in cash and cash balances held 107,329 (915,527) Cash and cash equivalents at beginning of the year 824,833 1,740,360

Cash and cash equivalents at end of the year 23 932,162 824,833

NOTE A:

Surplus for the year ended before contribution to Government Consolidated Fund and income tax comprised:

2010/11 2009/10 S$’000 S$’000

Surplus from continuing operations 99,078 72,275Surplus from discontinued operations (Note 36) – 39,977

Surplus before contribution to Government Consolidated Fund & income tax 99,078 112,252

NOTE B:

As at 31 March 2011, the aggregate consideration value for the transfer of airport assets and liabilities of S$3,272,941,000 (2009/10 : S$3,278,655,000) was receivable from CAG. This consideration included the transfer of property, plant and equipment to CAG at a carrying amount of S$2,348,094,000 (2009/10 : S$2,350,764,000) (Note 22).

NOTE C:

As at 31 March 2011, a portion of the surplus to be returned to the Government of S$92,753,000 was converted to an additional paid-up capital to the Group and the remaining surplus to be returned to the Government of S$467,098,000 (2009/10 : S$560,000,000) after a refund of an overpayment of the contribution to the Government Consolidated Funds of S$149,000 and the aggregate consideration value on the transfer of airport assets and liabilities to be returned to the Government of S$3,272,941,000 (2009/10 : S$3,278,655,000) (Note 26) remains unpaid.

NOTE D:

During the year, the Group divested 13% interest in Experia Events Pte Ltd to a third party at a consideration of S$6,923,000. A loss of S$1,356,000 is recognised for the divestment.

CONSOLIDATED STATEMENT OF CASH FLOWSYear ended 31 March 2011



1 GENERAL

The Civil Aviation Authority of Singapore (the “Authority”) was established under the Civil Aviation Authority of Singapore Act (Cap. 41, 1985 Revised Edition) and reconstituted under the Civil Aviation Authority of Singapore Act 2009 (Act No 17 of 2009) (“the Act”). The supervisory ministry is the Ministry of Transport. Its principal place of business and registered offi ce is at 4th level, Terminal 2, Singapore Changi Airport, Singapore 819643.

On 1 July 2009, the Civil Aviation Authority of Singapore Act 2009 took effect to:

(i) provide for the transfer of airport undertaking of the Authority to a successor company – Changi Airport Group (Singapore) Pte Ltd (“CAG”);

(ii) provide for the reconstitution of the Authority;

(iii) provide for the regulation of the operation of airports and imposition of economic controls at airports;

(iv) repeal the Civil Aviation Authority of Singapore Act (Chapter 41 of the 1985 Revised Edition); and

(v) make consequential amendments to other written laws relating to airports.

The principal functions and duties of the Authority after the reconstitution are: (i) to regulate safety and promote safety and security in civil aviation and to exercise safety regulatory oversight over

civil aviation operations in Singapore and the operation of Singapore aircraft outside Singapore;

(ii) to exercise licensing and regulatory functions in respect of the provision of air services, the operation of airports and the provision of airport services and facilities in Singapore;

(iii) to regulate and promote competition and fair and effi cient market conduct in the operation of airports and the provision of airport services and facilities or, in the absence of a competitive market, to prevent the misuse or abuse of monopoly or market power;

(iv) to regulate, encourage, promote, facilitate and assist in the use, development and improvement of air services, airports and aerospace industries;

(v) to ensure that there are, provided in every airport (whether by itself or by any airport licensee), adequate and effi cient airport services and facilities on such terms as the Authority thinks expedient;

(vi) to provide air navigation services within the Singapore Flight Information Region and such other area as the Minister may authorise;

NOTES TO FINANCIAL STATEMENTS31 March 2011

1 GENERAL (Cont’d)

(vii) to provide or co-ordinate search and rescue services to aircraft in distress within the Singapore Search and Rescue Region;

(viii) to encourage, promote, facilitate and assist in the development and improvement of civil aviation capabilities, skills and services in Singapore;

(ix) to provide technical, consultancy and management services relating to any of the matters referred to in this subsection;

(x) to act internationally as the national authority or body representing Singapore in respect of matters relating to civil aviation;

(xi) to discharge or facilitate the discharge of international obligations of the Government as a Contracting State or otherwise in respect of civil aviation;

(xii) to collaborate and enter into agreements and arrangements with organisations in respect of any matter relating to civil aviation and any other matter as the Authority thinks expedient;

(xiii) to foster appropriate education and provide training and training facilities in respect of any matter relating to civil aviation;

(xiv) to advise the Government on all matters relating to civil aviation;

(xv) to promote understanding of civil aviation policies and programmes;

(xvi) to promote research and development on any matter relating to civil aviation; and

(xvii) to carry out such other functions and duties as are conferred or imposed on the Authority by or under the Civil Aviation Authority of Singapore Act or any other written law.

The principal activities of the jointly controlled entities and associate are disclosed in Note 12 and Note 13 respectively.

The fi nancial statements are expressed in Singapore dollars and all values are rounded to the nearest thousand (S$’000) except when otherwise indicated.

The consolidated fi nancial statements of the Group and statement of fi nancial position, statement of comprehensive income and statement of changes in equity of the Authority for the year ended 31 March 2011 were authorised for issue by the Authority members on 27 June 2011.



2 CORPORATISATION OF CHANGI AIRPORT & RESTRUCTURING OF CAAS

In August 2008, the Ministry of Transport announced the corporatisation of Changi Airport and the restructuring of CAAS. The key objective was to strengthen Changi Airport’s position as a premier air hub by allowing for more focused roles and greater fl exibility in meeting future challenges in a rapidly changing aviation landscape.

On 1 July 2009, a new entity, Changi Airport Group (Singapore) Pte Ltd (“CAG”) was set up to operate Changi Airport, manage its operations, commercial activities and emergency services, as well as its investments and projects in foreign airports. CAAS was reconstituted to focus on strategic and regulatory functions such as air services negotiations, safety, service and economic regulation, as well as continue with the provision of air navigation services and the development of the Singapore Aviation Academy into a world class centre for knowledge sharing and international standard aviation related training institution.

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING – The fi nancial statements have been prepared in accordance with the historical cost convention, except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Civil Aviation Authority of Singapore Act (the “Act”), Singapore Statutory Board Financial Reporting Standards (“SB-FRS”) and Singapore Financial Reporting Standards (“FRS”). As a statutory board, the Authority is required to comply with policies and instructions issued from time to time by the Ministry of Finance (“MOF”) and other central government agencies.

ADOPTION OF NEW AND REVISED STANDARDS – Pursuant to the Accounting Standards Act which was introduced and came into effect on 1 November 2007 and Circular Number 1/2008 issued by the Accountant-General on 11 March 2008, Singapore Statutory Boards are required to prepare and present their fi nancial statements in accordance with the SB-FRS including related interpretations (“INT FRS”) promulgated by the Accountant-General.

In the current fi nancial year, the Group has adopted all the new and revised SB-FRSs and INT SB-FRS that are relevant to its operations and effective for annual periods beginning on or after 1 April 2010. The adoption of these new/revised SB-FRSs and INT SB-FRSs does not result in changes to the Group’s accounting policies and has no material effect on the amounts reported for the current or prior years.

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

At the date of authorisation of these fi nancial statements, the following SB-FRS and FRS that is relevant to the group were issued but not effective as at 31 March 2011:

FRS 24 (Revised) Related Party Disclosures SB-FRS 24 (Revised) Related party Disclosures FRS 24 (Revised) Related Party Disclosures is effective for annual periods beginning on or after 1 January 2011.

The revised Standard clarifi es the defi nition of a related party and consequently additional parties may be identifi ed as related to the reporting entity. In the period of initial adoption, the changes to related party disclosures, if any, will be applied retrospectively with restatement of the comparative information. Preliminary assessment by management indicates that the adoption of this FRS will have no material impact on the fi nancial statements of the group and the company in the period of initial adoption.

The management is in the process of adopting the above SB-FRS and FRSs that were issued but effective only in future periods.

BASIS OF CONSOLIDATION – The consolidated fi nancial statements incorporate the fi nancial statements of the Authority and entities controlled by the Authority and its subsidiaries. Control is achieved where the Authority has the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the fi nancial statements of subsidiaries to bring their accounting policies in line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

In the Authority’s fi nancial statements, investments in subsidiaries are carried at cost less any impairment in net recoverable value that has been recognised in income and expenditure.

FINANCIAL INSTRUMENTS – Financial assets and fi nancial liabilities are recognised on the Group’s statement of fi nancial position when the Group becomes a party to the contractual provisions of the instrument.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a fi nancial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the fi nancial instrument, or where appropriate, a shorter period. Income is recognised on an effective interest basis for debt instruments, other than those fi nancial instruments at fair value through income and expenditure.




Financial assets

Investments are recognised and de-recognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value plus transaction costs, except for those fi nancial assets classifi ed as fair value through income and expenditure which are initially measured at fair value.

Other fi nancial assets are classifi ed into the following specifi ed categories: fi nancial assets “at fair value through income and expenditure”, “available-for-sale” fi nancial assets and “loans and receivables”. The classifi cation depends on the nature and purpose of fi nancial assets and is determined at the time of initial recognition.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and fi xed deposits that are readily convertible to a known amount of cash and are subject to an insignifi cant risk of changes in value.

Funds with investment managers and other investments

Funds with investment managers and other investments are classifi ed as fi nancial assets at fair value through income and expenditure.

An instrument is classifi ed as at fair value through income and expenditure if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated as at fair value through income and expenditure if the Authority manages such investments and makes purchase and sale decisions based on their fair value.

Financial assets at fair value through income and expenditure are stated at fair value, with any resultant gain or loss recognised in income and expenditure. The net gain or loss recognised in income and expenditure incorporates any dividend or interest earned on the fi nancial asset. Fair value is determined in the manner described in Note 5.

Available-for-sale fi nancial assets

Certain shares and debt securities held by the Group are classifi ed as being available for sale and are stated at fair value. Fair value is determined in the manner described in Note 5. Gains and losses arising from changes in fair value are recognised directly in the revaluation reserve with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets which are recognised directly in income and expenditure. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the revaluation reserve is included in income and expenditure for the period. Dividends on available-for-sale equity instruments are recognised in income and expenditure when the Group’s right to receive payments is established. The fair value of available-for-sale monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at reporting date. The change in fair value attributable to translation differences that result from a change in amortised cost of the asset is recognised in income and expenditure, and other changes are recognised in other comprehensive income.


Financial assets (Cont’d)

Loans and receivables

Trade receivables, other receivables and amount due from CAG that have fi xed or determinable payments that are not quoted in an active market are classifi ed as “loans and receivables”. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest would be immaterial.

Impairment of fi nancial assets

Financial assets, other than those carried at fair value through income and expenditure, are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the fi nancial asset, the estimated future cash fl ows of the receivables or investment have been negatively affected. For fi nancial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash fl ows, discounted at the original effective interest rate.

The carrying amount of the fi nancial asset is reduced by the impairment loss directly for all fi nancial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in income and expenditure.

With the exception of available-for-sale equity instruments, 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 loss was recognised, the previously recognised impairment loss is reversed through income and expenditure to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss is recognized in other comprehensive income.

Derecognition of fi nancial assets

The Group derecognises a fi nancial asset only when the contractual rights to the cash fl ows from the asset expire, or it transfers the fi nancial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred fi nancial asset, the Group continues to recognise the fi nancial asset and also recognises a collateralised borrowing for the proceeds received.




Financial liabilities and equity instruments

Classifi cation as debt or equity

Financial liabilities and equity instruments issued by the Group are classifi ed according to the substance of the contractual arrangements entered into and the defi nitions of a fi nancial liability and an equity instrument.

Financial liabilities

Trade, other payables and amount owing to MOF are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis, except for short-term payables where the recognition of interest would be immaterial.

Financial guarantee contract liabilities are measured initially at their fair values and subsequently at the higher

of the amount of obligation under the contract recognised as a provision in accordance with SB-FRS and FRS 37 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation in accordance with SB-FRS and FRS 18 Revenue.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Derecognition of fi nancial liabilities

The Group derecognises fi nancial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expired.

Forward exchange contracts

The Group’s activities are subject to fi nancial risks of changes in foreign exchange rates.

The Group uses forward exchange contracts to hedge its risks associated with foreign currency fl uctuations relating to fi nancial assets at fair value through income and expenditure.

Forward exchange contracts are initially measured at fair value at the date the contract is entered into and are subsequently re-measured to fair value at the end of each reporting period.

Changes in the fair value of forward exchange contracts that do not qualify for hedge accounting are recognised in income and expenditure as they arise.


LEASES – Leases are classifi ed as fi nance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classifi ed as operating leases.

The Group as lessor

Amounts due from lessees under fi nance leases are recorded as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to refl ect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which use benefi t derived from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Group as lessee

Assets held under fi nance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of fi nancial position as a fi nance lease obligation. Lease payments are apportioned between fi nance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to income and expenditure, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.

Rentals payable under operating leases are charged to income and expenditure on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefi ts from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expenditure in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefi t of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefi ts from the leased asset are consumed.

PREPAID LEASE – Prepaid lease comprises premium paid for leasehold land. The initial cost is capitalised and amortised on a straight-line basis over its useful life of 30 years.

>80 CIVIL AVIATION AUTHORITY OF SINGAPORE




PROPERTY, PLANT AND EQUIPMENT AND CAPITAL WORK-IN-PROGRESS – Property, plant and equipment are stated at cost, less accumulated depreciation and any accumulated impairment losses. Assets taken over from the former Department of Civil Aviation were valued on the following bases at the date of transfer:

(i) Land, runways, taxiways and others, and buildings were stated based on the Government Chief Valuer’s valuation.

(ii) Other assets were transferred at their net book values.

(iii) Capital work-in-progress was valued at cost.

Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of the equipment.

The costs of the day-to-day servicing of property, plant and equipment are recognised in the income and expenditure as incurred.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line method, on the following bases:

Leasehold land Over the lease period Runways, taxiways and others 25 years Buildings 15 to 30 years Plant and equipment 7 to 15 years Vehicles and vessels 5 to 10 years Offi ce/Other equipment, furniture and fi xtures 1 to 3 years Capital improvements 5 to 15 years

No depreciation is provided for capital work-in-progress. Capital work-in-progress are transferred to the various categories to property, plant and equipment and depreciated upon the completion of the capital project.

Fully depreciated assets still in use are retained in the fi nancial statements.


PROPERTY, PLANT AND EQUIPMENT AND CAPITAL WORK-IN-PROGRESS (Cont’d)

The estimated useful lives and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Assets held under fi nance leases are depreciated over their expected useful lives on the same basis as owned assets or, if there is no certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income and expenditure.

IMPAIRMENT OF ASSETS – At the end of each reporting period, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the

estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in income and expenditure.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in income and expenditure.





ASSOCIATES – An associate is an entity over which the Group has signifi cant infl uence and that is neither a subsidiary nor an interest in a joint venture. Signifi cant infl uence is the power to participate in the fi nancial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associate are incorporated in these fi nancial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the statement of fi nancial position at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in associate) are not recognised, unless the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifi able assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the Group’s share of the net fair value of the identifi able assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in income or expenditure.

Where a Group transacts with an associate of the Group, income and expenditure are eliminated to the extent of

the Group’s interest in the relevant associate.

INTERESTS IN JOINT VENTURES – A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control that is when the strategic fi nancial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.

The results and assets and liabilities of joint ventures are incorporated in these fi nancial statements using the equity method of accounting, except when the investment is classifi ed as held for sale, in which case it is accounted for under SB-FRS and FRS 105 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, investments in joint ventures are carried in the consolidated statement of fi nancial position at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the joint venture, less any impairment in the value of individual investments. Losses of a joint venture in excess of the Group’s interest in that joint venture (which includes any long-term interests that, in substance, form part of the Group’s net investment in the joint venture) are not recognised, unless the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifi able assets, liabilities and contingent liabilities of the joint venture recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the Group’s share of the net fair value of the identifi able assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in income and expenditure.


INTERESTS IN JOINT VENTURES (Cont’d)

Where the Group transacts with its jointly controlled entities, unrealised income and expenditure is eliminated to the extent of the Group’s interest in the joint venture.

In the Authority’s fi nancial statements, investments in joint ventures are carried at cost less impairment in net recoverable value that has been recognised in income and expenditure.

PROVISIONS – Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash fl ows estimated to settle the present obligation, its carrying amount is the present value of those cash fl ows.

When some or all of the economic benefi ts required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

REVENUE RECOGNITION – Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

Income from services is recognised as and when services are rendered.

Income from consultancy projects is recognised on a progressive billing basis which is in accordance with the contracted schedule of payment for projects undertaken.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the fi nancial asset to that assets carrying amount.

Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.





GRANTS – Government grants and contributions from other organisations are not recognised until there is a reasonable assurance that the group will comply with the conditions attaching to them and the grants will be received.

Government grants and contributions from other organisations are recognised as income over the period necessary to match them with the costs for which they are intended to compensate, on a systematic basis. Government grants and contributions from other organisations that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate fi nancial support to the group with no future related costs are recognised in income and expenditure in the period in which they become receivable.

RETIREMENT BENEFIT COSTS – Payments to defi ned retirement benefi t contribution plans are charged as expenditure as they fall due. Payments made to state-managed retirement benefi t schemes, such as the Central Provident Fund, are dealt with as payments to defi ned contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defi ned contribution retirement benefi t plan.

Provision is made for the payment of retirement benefi ts to those pensionable employees who did not opt for transfer to the Central Provident Fund scheme. For such defi ned benefi t retirement plan, the cost of providing benefi ts is determined using the Projected Unit Credit Method. Actuarial gains and losses will be recognised immediately. Past service cost is recognised immediately to the extent that the benefi ts are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefi ts become vested.

The retirement benefi t obligation recognised in the statement of fi nancial position represents the present value of the defi ned benefi t obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service cost. Any asset resulting from this calculation is limited to unrecognised actuarial losses and past service cost, plus the present value of available refunds and reductions in future contributions to the plan.

EMPLOYEE LEAVE ENTITLEMENT – Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.


INCOME TAX – The Authority is exempted from income tax under Section 13(1)(e) of the Income Tax Act (Cap. 134, 2004 Revised Edition).

In respect of the subsidiary companies, income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable income for the year. Taxable income differs from income as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period in the countries where the Authority and subsidiaries operate.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the fi nancial statements and the corresponding tax bases used in the computation of taxable income, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable income will be available against which deductible temporary differences can be utilised.

Deferred tax liabilities are recognised on taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that suffi cient taxable income will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period in the countries where the Authority and subsidiaries operate.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expenditure or income in income and expenditure, except when they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity.





FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION – The individual fi nancial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated fi nancial statements of the Group, the statement of fi nancial position, statement of comprehensive income and statement of changes in equity of the Authority are presented in Singapore dollars, which is the functional currency of the Authority and the presentation currency for the consolidated fi nancial statements.

In preparing the fi nancial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in income and expenditure for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in income and expenditure for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in other comprehensive income.

4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in Note 3, the management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Group’s accounting policies

The management did not make any material judgments that have signifi cant effect on the amounts recognised in the fi nancial statements except for those affecting accounting estimations as disclosed below.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year relate to the management’s expectations regarding the operations, are discussed below.

4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Cont’d)

Key sources of estimation uncertainty (Cont’d)

Useful lives of property, plant and equipment

As described in Note 3, the Group reviews the estimated useful lives of property, plant and equipment at the end of each reporting period. There was a change in the useful lives of assets with effect from 1 July 2009 after considering the factors which included the reassessment of the reasonableness of the future economic benefi ts embodied in the fi xed assets. The changes in the useful lives are as follows:

– Buildings increased from 20 years to 30 years; – Plant and equipments increased from 10 years to 15 years; and – Capital improvements increased from 10 years to 15 years.

5 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISK MANAGEMENT

(a) Categories of fi nancial instruments

The following table sets out the fi nancial instruments at the end of the reporting period:

Group and Authority 2010/11 2009/10 S$’000 S$’000

Financial Assets Loans and receivables (including cash and cash equivalents) 4,322,827 4,244,409 Available-for-sale fi nancial assets 3,600 3,600 Held for trading fi nancial assets 12,182 70,012

4,338,609 4,318,021 Financial Liabilities

Financial liabilities at amortised cost (3,818,669) (3,920,053)

(b) Financial risk management policies and objectives

Risk management is integral to the business of the Group. The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved.




5 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISK MANAGEMENT (Cont’d)

(b) Financial risk management policies and objectives (Cont’d)

(i) Interest rate risk management

The Group’s and the Authority’s exposure to market risk for changes in interest rates relates primarily to investment portfolios in fi xed deposits and bonds with fi nancial institutions. The Group may use derivative fi nancial instruments to hedge investment portfolios. The investment portfolios comprise securities with resale markets to ensure portfolio liquidity. However, the Group and the Authority do not have a signifi cant exposure to interest rate risk as there are minimal interest bearing fi nancial assets and liabilities. With the current interest rate level, any variation in the interest rates will not have a signifi cant impact on the results of the Group and the Authority. Accordingly, no sensitivity analysis is performed.

(ii) Foreign exchange risk management

The Authority and its subsidiaries maintain their books and accounts in their respective functional currencies. As a result, the Group is subject to transaction and translation exposures resulting from currency exchange rate fl uctuations. The Group also has exposure to foreign exchange risk as a result of transactions denominated in foreign currencies, arising from normal business and investment activities. Where exposures are certain, the Group may hedge these risks as they arise.

At the reporting date, the carrying amounts of signifi cant monetary assets and monetary liabilities denominated in currencies other than the respective Group entities’ functional currency are as follows:

Liabilities Assets 2010/11 2009/10 2010/11 2009/10 S$’000 S$’000 S$’000 S$’000

Group and Authority United States Dollar (42) (11) 2 20,054 British Pounds (40) (2) – 5,385 Euro (56) – 22 3,107 Japanese Yen – – – 4,806 Australian Dollar – – 44,387 52,714 Canadian Dollar (25) – 1 1 (163) (13) 44,412 86,067

Foreign currency sensitivity

The following table details the sensitivity to a 5% increase or decrease in the relevant foreign currencies against the functional currency of each group entity. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates.



(ii) Foreign exchange risk management (Cont’d)

Foreign currency sensitivity (Cont’d)

If the relevant foreign currency were to strengthen by 5% against the functional currency of the respective entities in the Group, net surplus will increase/(decrease) by:

2010/11 2009/10 S$’000 S$’000

Group and Authority United States Dollar (2) 1,002 British Pounds (2) 269 Euro (2) 155 Japanese Yen – 240 Australian Dollar 2,219 2,636 Canadian Dollar (1) –

2,212 4,302

If the relevant foreign currency were to weaken by 5% against the functional currency of the respective entities in the Group, net surplus will increase/(decrease) by:

2010/11 2009/10 S$’000 S$’000

Group and Authority United States Dollar 2 (1,002) British Pounds 2 (269) Euro 2 (155) Japanese Yen – (240) Australian Dollar (2,219) (2,636) Canadian Dollar 1 –

(2,212) (4,302)

(iii) Equity price risk management

The Group is exposed to equity risks arising from equity investments classifi ed as available-for-sale and held-for-trading. Further details of these equity investments can be found in Notes 14 and 16 respectively. Available-for-sale equity investments are held for strategic rather than trading purposes. The Group does not actively trade available-for-sale investments.






(iii) Equity price risk management (Cont’d)

Equity price sensitivity

The sensitivity analyses below have been determined based on the exposure to equity price risks at the reporting date.

In respect of available-for-sale equity investments, if the equity prices had been 20% higher while all other variables were held constant, the Group’s net surplus for the year ended 31 March 2011 would have been unaffected as the equity investments are classifi ed as available-for-sale and no investments were disposed of or impaired.

In respect of held-for-trading equity instruments, if equity prices had been 20% higher, the Group’s and Authority’s net surplus for the year ended 31 March 2011 would be higher by S$Nil (2009/10 : higher by S$9,934,000).

Conversely, had the equity prices been 20% lower, the respective effects on the Group’s assets revaluation reserves and the net surplus would be in the opposite direction.

(iv) Liquidity risk management

The Group monitors and maintains a level of cash and cash equivalents deemed adequate by management to fi nance the Group’s operations and to mitigate the effects of fl uctuations in cash fl ows.

Liquidity and interest risk analyses

Non-derivative fi nancial liabilities

The following tables detail the remaining contractual maturity for non-derivative fi nancial liabilities. The tables have been drawn up based on the undiscounted cash fl ows of fi nancial liabilities based on the earliest date on which the Group and Authority can be required to pay.

Weighted average On demand effective or within Within 2 After interest rate 1 year to 5 years 5 years Total % p.a. S$’000 S$’000 S$’000 S$’000

Group and Authority 2010/11 Non-interest bearing NA 3,796,568 22,101 – 3,818,669 3,796,568 22,101 – 3,818,669

2009/10 Non-interest bearing NA 3,897,823 22,230 – 3,920,053 3,897,823 22,230 – 3,920,053



(iv) Liquidity risk management (Cont’d)

Liquidity and interest risk analyses (Cont’d)

Non-derivative fi nancial assets The following table details the expected maturity for non-derivative fi nancial assets. The tables below

have been drawn up based on the undiscounted contractual maturities of the fi nancial assets including interest that will be earned on those assets except where the Group and the Authority anticipate that the cash fl ow will occur in a different period. The adjustment column represents the possible future cash fl ows attributable to the instrument included in the maturity analysis which are not included in the carrying amount of the fi nancial asset on the statement of fi nancial position.

Weighted average On demand effective or within Within 2 After interest rate 1 year to 5 years 5 years Adjustment Total % p.a. S$’000 S$’000 S$’000 S$’000 S$’000

Group and Authority 2010/11 Non-interest bearing NA 4,294,688 401 – – 4,295,089 Fixed interest rate – Fixed deposits 4.85% 32,858 – – (1,520) 31,338 4,327,546 401 – (1,520) 4,326,427

2009/10 Non-interest bearing NA 3,753,040 805 – – 3,753,845 Fixed interest rate – Fixed deposits 0.52% 546,931 – – (1,853) 545,078 4,299,971 805 – (1,853) 4,298,923

The following table details the liquidity analysis for derivative fi nancial instruments. The table has been drawn up based on the undiscounted net cash infl ows on the derivative instrument that settle on a net basis and the undiscounted gross infl ows on those derivatives that require gross settlement.

Weighted average On demand effective or within Within 2 After interest rate 1 year to 5 years 5 years Adjustment Total % p.a. S$’000 S$’000 S$’000 S$’000 S$’000

Group and Authority 2010/11 Forward exchange contracts (Note 16) NA 12,182 – – – 12,182

2009/10 Forward exchange contracts (Note 16) NA 9,542 9,556 – – 19,098






(v) Credit risk management

The Group has a credit policy in place which establishes credit limits for customers and monitors their balances on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. Cash and fi xed deposits are placed with banks and fi nancial institutions which are regulated. Investments and transactions involving derivative fi nancial instruments are allowed only with counterparties who have sound credit ratings.

At the end of the reporting period, there is no signifi cant concentration of credit risk. Investment managers are bound by investment mandates, which prohibit investments with high credit risks. The maximum exposure to credit risk is represented by the carrying amount of each fi nancial asset in the statement of fi nancial position.

Further details of credit risk on trade and other receivables are disclosed in Notes 20 and 21 respectively.

(vi) Fair value of fi nancial assets and fi nancial liabilities

The carrying amounts of cash and cash equivalents, trade and other current receivables and payables approximate their respective fair values due to the relatively short-term maturity of these fi nancial instruments. The fair value of other classes of fi nancial assets and liabilities are disclosed in the respective notes to fi nancial statements.

The fair values of fi nancial assets and fi nancial liabilities are determined as follows:

(i) the fair value of fi nancial assets and fi nancial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices;

(ii) the fair value of other fi nancial assets and fi nancial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash fl ow analysis; and

(iii) the fair value of derivative instruments are calculated using quoted prices. Where such prices are not available, discounted cash fl ow analysis is used, based on the applicable yield curve of the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives.

Certain available-for-sale fi nancial assets are stated at cost less impairment losses as these fi nancial assets do not have quoted market prices in an active market or other methods of reasonably estimating their fair values.



(vi) Fair value of fi nancial assets and fi nancial liabilities (Cont’d)

The group classifi es fair value measurements using a fair value hierarchy that refl ects the signifi cance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

(i) Level 1 Fair value are measured based on quoted prices (unadjusted) from active markets for identical

fi nancial instruments. Prices are generally obtained from relevant exchange or dealer markets. The Group does not adjust the quoted prices for such investments.

(ii) Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in

markets that are not active. Inputs are obtained from various sources including market participants, dealers, and brokers.

(iii) Level 3 Unobservable inputs that are supported by little or no market activity and that are signifi cant to the

fair value of the assets or liabilities. The fair values of such funds that do not have readily determinable fair values may be determined by the alternative investment managers.

Financial instruments measured at fair value

Total Level 1 Level 2 Level 3 S$’000 S$’000 S$’000 S$’000

Group and Authority 2010/11 Financial assets at fair value through income or expenditure – Held for trading fi nancial assets 12,182 12,182 – – Available-for-sale investments – Unquoted equities 3,600 – – 3,600 15,782 12,182 – 3,600

2009/10 Financial assets at fair value through income or expenditure – Held for trading fi nancial assets 19,098 19,098 – – – Funds with funds manager 50,914 50,914 – – Available-for-sale investments – Unquoted equities 3,600 – – 3,600 73,612 70,012 – 3,600

There were no signifi cant transfers between Level 1 and Level 3 of the fair value hierarchy in 2010/11 and 2009/10.





(c) Capital risk management policies and objectives

The Group reviews its capital structure at least annually to ensure that the Group will be able to continue as a going concern. The capital structure of the Group comprises capital and reserves as disclosed in Notes 7 and 8 respectively. The Group’s and Authority’s overall strategy remains unchanged from 2009/10.

6 RELATED PARTY TRANSACTIONS

Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability to control the other party or exercise signifi cant infl uence over the other party in making fi nancial and operating decisions. All Government ministries, statutory boards and the Authority’s subsidiary companies and jointly controlled entities are deemed related parties to the Authority.

Key management personnel compensation

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the Group. Key management personnel compensation are as follows:


Continuing operations

Salaries and other short-term employee benefi ts 1,726 861

Discontinued operations (Note 32) Salaries and other short-term employee benefi ts – 1,081 Post-employment benefi ts – 16

– 1,097

6 RELATED PARTY TRANSACTIONS (Cont’d)

Other related party transactions

During the fi nancial year, other than those disclosed elsewhere in the fi nancial statements, there were the following signifi cant related party transactions based on terms agreed between the parties:

Group and Authority 2010/11 2009/10 Balances Transactions Balances Transactions S$’000 S$’000 S$’000 S$’000

Amounts due from: Subsidiaries: Changi Airports International Pte Ltd – – – 137 Changi Airports Consultants Pte Ltd – – – 151

Joint Venture: Experia Events Pte Ltd – – – 79

Related Parties: Airport Police 68 3 – 117 Attorney-General’s Chambers – 5 6 – Maritime and Port Authority of Singapore 113 331 86 317 Ministry of Defence 4 4,636 311 4,959 Ministry of Foreign Affairs 204 1,156 106 1,178 Ministry of Trade and Industry – – 5,432 94 Ministry of Transport 2 130 101 131 National Environment Agency – 3 – 21 National Security Coordination Centre – – 257 – Amounts due to: Subsidiaries: Changi Airports International Pte Ltd – – – 125 Changi Airport Planners and Engineers Pte Ltd – – – 221 Related Parties: Commissioner of Police – 910 – 1,598 National Environment Agency 2,238 8,687 – 6,270 Maritime and Port Authority of Singapore – 236 – – Ministry of Foreign Affairs – 17 – – Info-Communication Development Authority of Singapore 4 1,529 – –




7 CAPITAL ACCOUNT

This represents the value of assets and liabilities transferred from the former Department of Civil Aviation when the Authority was established, less any subsequent return of assets to the Government.

In 2008/09, under the Ministry of Finance’s Capital Management Framework for Statutory Boards (Finance

Circular Minute No. M26/2008), the Authority issued a share for S$1,000 equity contribution received from the Minister for Finance, the body incorporated by the Minister for Finance (Incorporation) Act. The share does not carry any voting rights nor has a par value. The share carries a right to dividend.

During the year, additional share capital of S$92,753,000 was received from Ministry of Finance by setting off against the amount owning to Minstry of Finance - return of the surplus (Note 27).

8 RESERVES

The currency translation reserve of the Group comprised foreign exchange gains or losses arising from the translation of the fi nancial statements of the subsidiary companies and the Group’s share of the foreign exchange gains or losses of the jointly controlled entities.

The revaluation reserve of the Group comprised the net cumulative difference in the fair value of available-for-sale assets held until the investment was derecognised or impaired.

Movements in the respective reserves are disclosed in the statements of changes in equity.

9 PROPERTY, PLANT AND EQUIPMENT

Offi ce/Other Runways, Vehicles equipment, Leasehold taxiways Plant and and furniture, Capital land and others Buildings equipment vessels and fi xtures improvements Total S$’000 S$’000 S$’000 S$’000 $’000 S$’000 S$’000 S$’000

Group and Authority At 1 April 2009 2,024,013 1,585 120,795 248,545 2,454 17,351 26,161 2,440,904 Additions – – – – – 892 – 892 Transfers from capital work-in-progress (Note 10) 1,425 5,144 50,389 68,874 470 7,371 30,147 163,820 Disposals (2) – (138) (12,921) (5) (24,679) (294) (38,039) Transfers between asset category – – – 1,341 (1,341) – – – Adjustments from classifi ed as held for sale in prior year (Note A) – – – – – 17,383 – 17,383 Transfers to CAG – (6,729) (46,956) (53,819) (70) (381) (23,211) (131,166)

At 31 March 2010 2,025,436 – 124,090 252,020 1,508 17,937 32,803 2,453,794 Additions – – – – – 156 – 156 Transfers from capital work-in-progress 45,972 – 2,321 7,219 9 5,041 7,393 67,955 Disposals – – – (84) – (1,498) (188) (1,770) Adjustments – – 1,377 5 – – 1,728 3,110

At 31 March 2011 2,071,408 – 127,788 259,160 1,517 21,636 41,736 2,523,245




9 PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Offi ce/Other Runways, Vehicles equipment, Leasehold taxiways Plant and and furniture, Capital land and others Buildings equipment vessels and fi xtures improvements Total S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Group and Authority Accumulated depreciation: At 1 April 2009 453,657 859 77,384 215,823 1,220 16,452 24,100 789,495 Depreciation for the year (Note B) 21,071 659 4,363 18,286 197 5,230 2,780 52,586 Disposals (1) – (128) (12,884) (5) (24,676) (294) (37,988) Transfers between asset category – – – 85 (85) – – – Adjustments from classifi ed as held for sale in prior year (Note A) – – – – – 17,383 – 17,383 Transfers to CAG – (1,518) (1,421) (548) (199) – (1,097) (4,783)

At 31 March 2010 474,727 – 80,198 220,762 1,128 14,389 25,489 816,693 Depreciation for the year (Note B) 21,458 – 1,950 5,010 65 3,557 1,180 33,220 Adjustments – – 239 2 – – 199 440 Disposals – – – (84) – (1,498) (188) (1,770)

At 31 March 2011 496,185 – 82,387 225,690 1,193 16,448 26,680 848,583 Carrying amount: At 31 March 2010 1,550,709 – 43,892 31,258 380 3,548 7,314 1,637,101 At 31 March 2011 1,575,223 – 45,401 33,470 324 5,188 15,056 1,674,662

9 PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Note A

In 2009/10, assets held for sale of S$17,383,000 had been restated, as these equipment were not transferred to CAG. The carrying value of the assets are S$ nil as at 2009/10.

Note B

Total depreciation and impairment for the year comprised: Group and Authority 2010/11 2009/10 S$’000 S$’000

(a) Depreciation relating to continuing operations 33,220 52,586 (b) Impairment on property, plant and equipment relating to assets held for sale (Note 36) – 59,363 (c) Adjustments 440 –

33,660 111,949

In 2003/04, the Authority entered into a lease-out-lease-back arrangement for its airport management system with a total cost of S$153,000,000. The carrying amount is S$Nil as at 31 March 2011 (2009/10 : S$Nil). Since the title to these assets is retained by the Authority and no restrictions are placed on its ability to utilise them, there is no adjustment made to the property, plant and equipment. The net cash amount, less related transaction expenses, of S$11,900,000 in respect of this transaction has been recorded as deferred income and is being amortised over the lease term of 18.25 years from October 2003.

Under the lease arrangement, the Authority is the primary obligor of the lease payments.

Following the corporatisation of Changi Airport, the Authority will be entering into a sub-sub-lease arrangement with CAG for the airport management system.

10 CAPITAL WORK-IN-PROGRESS Group and Authority 2010/11 2009/10 S$’000 S$’000

At beginning of the year 119,097 36,823 Expenditure incurred during the year 103,804 403,262 Transfers to property, plant and equipment (Note 9) (71,065) (163,820) Transfers to CAG – (157,168) Adjustments 3,044 –

At end of the year 154,880 119,097




11 INVESTMENT IN SUBSIDIARY Authority 2010/11 2009/10 S$’000 S$’000

Unquoted equity shares, at cost – 306,539 Provision for impairment losses – (49,375) Transfers to CAG – (257,164)

– – Movement in impairment losses: Balance at beginning of the year – – Impairment loss recognised in the year (Note 33) – 49,375 Transfers to CAG – (49,375)

Balance at the end of the year – –

On 1 July 2009, the Authority transferred its entire interest in Changi Airports International Pte Ltd (“CAI”) represented by 306,539,000 ordinary shares to Changi Airport Group (Singapore) Pte Ltd (“CAG”) at its carrying amount of net assets in CAI. The impairment loss recognised represented the difference between the carrying amounts of the assets and liabilities recorded in the books of CAI and the cost of unquoted equity shares.

12 INTEREST IN JOINTLY CONTROLLED ENTITIES Group Authority 2010/11 2009/10 2010/11 2009/10 S$’000 S$’000 S$’000 S$’000

Investment in jointly controlled entities 28,783 45,654 28,783 45,654 Share of losses of jointly controlled entities (1,805) (1,258) – – Impairment losses – (10,513) (1,805) (10,513)

26,978 33,883 26,978 35,141

12 INTEREST IN JOINTLY CONTROLLED ENTITIES (Cont’d)

Details of the jointly controlled entities are as follows:

Name of jointly Place of incorporation Effective equity controlled entity and business Held by the Group Principal activities 2010/11 2009/10 % %

Held by the Authority Experia Events Pte Ltd(1) Singapore – 30 Organising and management of conferences, exhibition and other related activities Airport Logistics Park Singapore 20 20 Developing, marketing, managing of Singapore(2) and provision of facilities to the free trade zone logistics park

(1) During the year, the Group divested 13% interest in Experia Events Pte Ltd to a third party at a consideration of S$6,923,000. A loss of S$1,356,000 and S$413,000 is recognised for the divestment by the Group and the Authority respectively (Note 33). Consequently, the investment of Experia Events Pte Ltd is transferred from ‘Interest in jointly controlled entities’ to ‘Investment in associate’ (Note 13)

(2) Unincorporated entity

The Group’s share of the jointly controlled entities’ results, assets and liabilities for the period from 1 April 2010 to 31 March 2011 is as follows:

Group 2010/11 2009/10 S$’000 S$’000

Statement of comprehensive income Income 1,082 6,605 Expenditure (543) (2,669) Reversal of impairment losses 2,752 1,446

Surplus before income tax 3,291 5,382 Income tax – –

Surplus for the year 3,291 5,382

Assets and liabilities Current assets 5,590 11,924 Non-current assets 21,738 42,407 Current liabilities (64) (5,765) Non-current liabilities (286) (4,373)

Net assets 26,978 44,193




13 INVESTMENT IN ASSOCIATE Group Authority 2010/11 2009/10 2010/11 2009/10 S$’000 S$’000 S$’000 S$’000

Investment in associate 9,535 – 9,535 – Share of profi ts of associate 1,348 – – –

10,883 – 9,535 –

Details of the associate is as follows:

Place of incorporation Effective equity Name of associate and business Held by the Group Principal activities 2010/11 2009/10 % %

Held by the Authority Experia Events Pte Ltd(1) Singapore 17 – Organising and management of conferences, exhibition and other related activities

(1) During the year, the Group divested 13% interest in Experia Events Pte Ltd to a third party at a consideration of S$6,923,000. A loss of S$1,356,000 and S$413,000 is recognised for the divestment by the Group and the Authority respectively (Note 33). Consequently, the investment of Experia Events Pte Ltd is transferred from ‘Interest in jointly controlled entities’ (Note 12) to ‘Investment in associate’ as the Group has signifi cant infl uence over the fi nancial and operating policy decisions of Experia Events Pte Ltd.

The Group’s share of the associate’s results, assets and liabilities for the period from 1 April 2010 to 31 March 2011 is as follows:

Group 2010/11 2009/10 S$’000 S$’000

Statement of comprehensive income Income 268 – Expenditure (1,815) –

Defi cit before income tax (1,547) – Income tax – –

Defi cit for the year (1,547) –

Assets and liabilities Current assets 3,663 – Non-current assets 12,628 – Current liabilities (4,033) – Non-current liabilities (1,375) –

Net assets 10,883 –

14 AVAILABLE-FOR-SALE INVESTMENTS Group and Authority 2010/11 2009/10 S$’000 S$’000

Unquoted equity shares, at cost 3,600 3,600

These available-for-sale investments are stated at cost less impairment losses, if any, as these do not have a quoted market price in an active market and other methods of reasonably estimating their fair value are inappropriate.

The investments in unquoted equities offer the Authority the opportunity for returns through dividend income and fair value gains.

15 LONG-TERM INVESTMENTS Group and Authority 2010/11 2009/10 S$’000 S$’000

Club membership 150 150

16 DERIVATIVE FINANCIAL INSTRUMENTS Group and Authority 2010/11 2009/10 S$’000 S$’000

Forward exchange contracts, at fair value 12,182 19,098 Analysed as: Current (Note 21) 12,182 9,542 Non-current – 9,556

12,182 19,098

At the end of the reporting period, the total notional amount of forward exchange contracts outstanding to which the Group and Authority are committed is as follows:

Group and Authority Group and Authority 2010/11 2009/10 Contract Amount Fair value Contract Amount Fair value Sell Buy gain Sell Buy gain S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

SGD/Australian Dollars (“AUD”) forward exchange contracts SGD 33,639 AUD 36,600 12,182 SGD62,654 AUD67,100 19,098

SGD 33,639 12,182 SGD62,654 19,098




17 STAFF LOANS Group and Authority 2010/11 2009/10 S$’000 S$’000

Repayable: Current (Note 21) 150 165 Non-current 401 805

551 970

These comprise various loans to the Authority’s staff in accordance with the terms of the Authority’s loan schemes.

Other than the computer and study loans which are interest-free, the other loans are repayable with interest at rates ranging from 4.25% to 4.5 % (2009/10 : 4.25% to 4.5%) per annum. The repayment period for housing and other loans are up to 25 and 7 years respectively. Interest rates are re-priced at intervals of 1 year.

In the opinion of the management, the carrying amount of the staff loans approximates their fair values.

18 PREPAID LEASE Group and Authority S$’000

Cost: At 1 April 2009, 31 March 2010 and 31 March 2011 12,290 Accumulated amortisation: At 1 April 2009 1,047 Amortisation charge for the year 410

At 31 March 2010 1,457 Amortisation charge for the year 410

At 31 March 2011 1,867 Carrying amount: At 31 March 2010 10,833 At 31 March 2011 10,423

18 PREPAID LEASE (Cont’d) Group and Authority 2010/11 2009/10 S$’000 S$’000

Comprising: Current (Note 21) 410 410 Non-current 10,013 10,423

10,423 10,833

Prepaid lease comprises premium paid for leasehold land to Singapore Land Authority. The land was leased to Experia Events Pte Ltd for the new exhibition centre on a back-to-back lease arrangement.

19 FUNDS WITH INVESTMENT MANAGERS Group and Authority 2010/11 2009/10 S$’000 S$’000 Equities, at fair value – 49,670 Bonds, at fair value – 7 Forward exchange contracts – 126

Other assets Cash and cash equivalents – 1,812 Dividend receivable – 142 Amount receivable – 406 Liabilities Amount payable to investment managers – (1,249)

– 50,914

Denominated in: – United States Dollars – 20,054 – British Pounds – 5,385 – Japanese Yen – 4,805 – Australian Dollars – 4,344 – Euro – 3,107 – Singapore Dollars – 626 – Others – 12,593

– 50,914




20 TRADE RECEIVABLES AND ACCRUED INCOME Group and Authority 2010/11 2009/10 S$’000 S$’000

Trade receivables – Related parties (Note 6) 391 6,299 – Third parties 86,874 90,475

87,265 96,774 Allowance for doubtful debts – Third parties (21) (32)

87,244 96,742 Accrued income 19,283 10,634

106,527 107,376

The average credit period for trade receivables ranges from 9 to 30 days (2009/10 : 13 to 30 days). No interest is charged on the trade receivables for payment received before or on the due date of the invoice. Thereafter, interest is charged at 8% (2009/10 : 8%) per annum on the outstanding balance.

Trade receivables are provided on estimated non-recoverable amounts based on management’s assessment and past default experience.

Included in the Group’s and Authority’s trade receivable balance are receivables with a carrying amount of S$440,000 (2009/10 : S$1,526,000) which are past due at the reporting date for which the Group and Authority has not provided as there has not been a signifi cant change in credit quality and the amounts are still considered recoverable.

In determining the recoverability of a trade receivable, the Group and Authority noted no change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. Accordingly, the management believes that there is no further credit provision required in excess of the allowance for doubtful debts.

Included in the allowance for doubtful debts are specifi c trade receivables with a balance of S$21,000 (2009/10 : S$32,000) which have been assessed as non-recoverable. The impairment recognised represents the difference between the carrying amount of the specifi c trade receivable and present value of expected proceeds.

20 TRADE RECEIVABLES AND ACCRUED INCOME (Cont’d)

The table below is an analysis of trade receivables as at 31 March:


Not past due and not impaired 86,804 95,216 Past due but not impaired (i) 440 1,526 Past due and no response to repayment demands 21 32 Less: Allowance for doubtful debts (ii) (21) (32)

Total trade receivables, net 87,244 96,742

Note:

(i) Aging of receivables that are past due but not impaired Group and Authority 2010/11 2009/10

S$’000 S$’000

Past due 1-30 days 357 1,304 31-60 days 64 15 61-90 days – 49 More than 91 days 19 158

440 1,526

(ii) Movement in the allowance for doubtful trade receivables:


Balance at beginning of the year 32 1,440 Decrease in allowance recognised in income and expenditure (11) (1,408)

Balance at end of the year 21 32

All trade receivables and accrued income of the Group and Authority are denominated in the respective functional currencies of the Authority and group entities.




21 OTHER RECEIVABLES AND PREPAYMENTS Group and Authority 2010/11 2009/10 S$’000 S$’000 Interest receivables 3,817 447 Current portion of – prepaid lease (Note 18) 410 410 – staff loans (Note 17) 150 165 Prepayments 7,805 5,142 Property tax receivable – 25,361 Recoverable expenses due from – Third parties 156 118 Forward exchange contracts (Note 16) 12,182 9,542 Others 7,001 6,896

31,521 48,081

Denominated in: – United States Dollars 2 – – Euro 22 – – Australian Dollars 12,981 9,636 – Others 11 –

22 AMOUNT DUE FROM CHANGI AIRPORT GROUP (“CAG”)

The legislative transfer of the airport undertaking to the successor company, Changi Airport Group (Singapore) Pte Ltd (“CAG”) was provided for in the Civil Aviation Authority of Singapore Act 2009 (No. 17 of 2009). It was stipulated that, inter alia, on the transfer date, the property, rights and liabilities comprised in the airport undertaking of the Authority shall become, by virtue of this Act and without further assurance, the property, rights and liabilities of the successor company nominated by the Minister and such part of the excluded property as may be determined by the Minister under this Act, shall vest in the successor company on a lease.

The Authority has reached a preliminary agreement with CAG on the net value of S$3,272,941,000 (2009/10: S$3,278,655,000) for the airport assets and liabilities transferred in connection with the corporatisation exercise. A confi rmation agreement will be drawn up to record the fi nancial values of the transferred assets and liabilities as agreed upon between the two entities. The settlement is subject to the fi nalisation of this ancillary agreement while the CAAS Act 2009 has given effect to the execution of the transfer. A supplemental agreement to the Master Lease Agreement will also be drawn up to record the fi nancial values of the airport buildings transferred to CAG. Whilst the agreements have not been fi nalised at the date of these fi nancial statements, the parties are already at an advanced stage of negotiation and the Company does not expect the fi nal consideration to be materially different from S$3,272,941,000.

22 AMOUNT DUE FROM CHANGI AIRPORT GROUP (“CAG”) (Cont’d)

The amount due from CAG of S$3,272,941,000 (2009/10: S$3,278,655,000) relates to the preliminary aggregate consideration value for the transfer of airport assets and liabilities in connection with the corporatisation exercise and comprises the following:


Assets: Property, plant and equipment 2,348,094 2,350,764 Capital work-in-progress 154,124 157,168 Investment in subsidiary companies (Note 38) 257,163 257,163 Interest in jointly controlled entities 10,652 10,652 Staff loans 419 419 Inventories 10,187 10,187 Trade receivables and accrued income 86,745 86,745 Amount held for subsidiary companies 160,713 160,713 Cash and cash equivalents 580,000 580,000

3,608,097 3,613,811 Liabilities: Trade payables and accrued expenses 34,507 34,507 Other payables 26,093 26,093 Amount owing to subsidiary companies 160,713 160,713 Deferred income 112,048 112,048 Provision for gratuity 1,795 1,795

335,156 335,156 Net assets of disposal group 3,272,941 3,278,655

23 CASH AND CASH EQUIVALENTS Group and Authority 2010/11 2009/10 S$’000 S$’000

Funds on Government’s Centralised Liquidity Management scheme 890,869 258,567 Bank and cash balances 9,955 21,188 Fixed deposits 31,338 545,078

932,162 824,833

The carrying amounts of cash and cash equivalents approximate their fair values.




23 CASH AND CASH EQUIVALENTS (Cont’d)

The funds on Government’s Centralised Liquidity Management scheme are centrally maintained as a consolidated pool and are available on request.

Fixed deposits bear average effective interest rate ranging from 4.75% to 4.90% (2009/10 : 0.25% to 3.75%) per annum and for a tenure ranging from 28 to 218 days (2009/10 : 31 to 147 days). The balances are repayable on demand.

The above balances that are not denominated in the functional currencies of the respective entities are as follows:


Australian dollars 31,406 29,178

24 TRADE PAYABLES AND ACCRUED EXPENSES Group and Authority 2010/11 2009/10 S$’000 S$’000

Trade payables – Related parties (Note 6) 2,242 – – Third parties 7,642 3,656 Income billed and received in advance 113,230 88,960 Accrued expenses 31,936 44,818

155,050 137,434

The average credit period on purchases of goods and services is 1 month (2009/10 : 1 month). No interest is charged on outstanding balance.

The Group’s and Authority’s trade payables and accrued expenses that are not denominated in the functional currencies of the respective entities are as follows:


Euro Dollars 56 – United States Dollars 42 11 Sterling Pounds 40 2 Canadian Dollars 25 –

25 OTHER PAYABLES Group and Authority 2010/11 2009/10 S$’000 S$’000

Salary related accruals 12,188 9,810 Sundry payables and other accruals 1,628 (6) Deposits received 263 258 Current portion of – Deferred income (Note 29) 410 410 – Provision for pension and post retirement medical benefi ts (Note 31) 628 632

15,117 11,104

26 CONTRIBUTION PAYABLE TO GOVERNMENT CONSOLIDATED FUND

The contribution to the Government Consolidated Fund is in accordance with Section 3(a) of the Statutory Corporations (Contributions to Consolidated Fund) Act (Cap. 319A, 2004 Revised Edition). The contribution is computed based on the guidelines specifi ed by the Ministry of Finance.

27 AMOUNT OWING TO MINISTRY OF FINANCE (“MOF”) – RETURN OF SURPLUS

The Ministry of Finance (“MOF”) requires Statutory Boards undergoing corporatisation to return excess surplus funds to the Government. Following the corporatisation of Changi Airport, the Authority made a provision of S$467,098,000 (2009/10: S$560,000,000) to be returned to the Government.

28 AMOUNT OWING TO MINISTRY OF FINANCE (“MOF”) – CONSIDERATION ON TRANSFER OF AIRPORT ASSETS

AND LIABILITIES

The Ministry of Finance (“MOF”) requires the Authority to return the consideration of S$3,272,941,000 (2009/10: S$3,278,655,000) receivable from CAG on the transfer of airport assets and liabilities to the Government.

29 DEFERRED INCOME Group and Authority 2010/11 2009/10 S$’000 S$’000

At beginning of the year 10,834 11,410 Amount taken to statement of comprehensive income (410) (576)

At end of the year 10,424 10,834

Comprising: Current (Note 25) 410 410 Non-current 10,014 10,424

10,424 10,834




30 DEFERRED TAX LIABILITY

The following are the major deferred tax liabilities recognised by the Group, and the movements thereon, during the current and prior reporting periods:

Unremitted Accelerated foreign sourced tax depreciation interest income Total

S$’000 S$’000 S$’000

Group At 1 April 2009 30 1,422 1,452 Transfer to CAG (30) (1,422) (1,452)

At 31 March 2010 – – – Charge during the year – – –

At 31 March 2010 and 2011 – – –

31 PROVISION FOR PENSION AND POST RETIREMENT MEDICAL BENEFITS PLAN

The Authority provides pension and post retirement medical benefi t schemes to certain of its employees who did not opt for transfer to the Central Provident Fund Scheme. The pension and post retirement medical benefi ts schemes are closed to new entrants.

(i) Pension Scheme

An eligible employee, upon reaching his retirement date and who has completed at least 10 years of service, is entitled to opt for one of the three retirement benefi t options:

Option (i) : Fully commuted pension gratuity Option (ii) : Full annual pension Option (iii) : Partial commutation of pension with gratuity (ii) Post Retirement Medical Benefi ts Scheme

An eligible employee, upon reaching his retirement date and who has completed at least 10 years of service, is entitled to the following post retirement medical benefi ts:

Option (i) : Hospitalisation benefi ts Option (ii) : Outpatient benefi ts Option (iii) : Dental benefi ts

The actuarial valuation of the present value of the defi ned benefi t obligation was carried out as at 31 March 2008 by a qualifi ed independent actuary in accordance with SB-FRS and FRS 19. In assessing the plan’s liabilities, the Projected Unit Credit actuarial methodology has been applied. For the purpose of ascertaining the obligation as of 31 March 2011, management has conducted a review of the bases and underlying assumptions used in the calculation.

31 PROVISION FOR PENSION AND POST RETIREMENT MEDICAL BENEFITS PLAN (Cont’d)

(ii) Post Retirement Medical Benefi ts Scheme (Cont’d)

In recognising actuarial gains or losses, the Authority has adjusted its net liability to be equal to the present value of obligation. Any actuarial gain or loss arising in the year of valuation will be recognised immediately. This actuarial gain and loss recognition methodology will be applied consistently in all future actuarial valuations.

The principal fi nancial assumptions used for the purpose of the actuarial valuation were as follows:

Valuation at 2010/11 2009/10 % %

Discount rate 2.0 2.0 Expected rate of salary increases 2.0 2.0 Medical infl ation rate 2.0 5.0

The amount recognised in the statement of fi nancial position in respect of the Group’s defi ned benefi t plans is as follows:


Current (Note 25) 628 632 Non-current 22,101 22,230

Total liability recognised in the statement of fi nancial position 22,729 22,862

Amounts recognised in income and expenditure in respect of the defi ned benefi t plan are as follows:


Current service cost 384 383 Interest cost 438 434 Actuarial losses recognised in the year 288 3,063 Reversal of actuarial losses recognised in prior year (323) –

787 3,880

The charge for the year is included in the employee benefi ts expense in the statements of comprehensive income.




31 PROVISION FOR PENSION AND POST RETIREMENT MEDICAL BENEFITS PLAN (Cont’d)

(ii) Post Retirement Medical Benefi ts Scheme (Cont’d)

Changes in the present value of the defi ned benefi t obligation are as follows:


Opening defi ned benefi t obligation 22,862 20,249 Current service cost 384 383 Interest cost 438 434 Actuarial losses 288 3,063 Reversal of actuarial losses recognised in prior year (323) – Benefi ts paid (920) (1,267)

Closing defi ned benefi t obligation 22,729 22,862

32 SALARIES, WAGES AND STAFF BENEFITS

The following are included in salaries, wages and staff benefi ts:


Continuing operations Pension and post retirement medical benefi ts cost (Note 31) 787 3,880 Employer’s contribution to provident fund 7,328 5,239 Key management personnel compensation (Note 6) 1,726 861 Discontinued operations (Note 36) Employer’s contribution to provident fund – 1,318 Key management personnel compensation (Note 6) – 1,097

33 NON-OPERATING INCOME (NET) Group Authority Note 2010/11 2009/10 2010/11 2009/10 S$’000 S$’000 S$’000 S$’000

Continuing operations Non-operating income Income from funds with investment managers 34 – 14,983 – 14,983 Changes in fair value of forward exchange contracts – Realised gain – 2,341 – 2,341 – Unrealised gain 2,626 11,223 2,626 11,223 Interest income 6,469 3,541 6,469 3,541 Dividend income(1) 285 204 285 204 Gain from foreign exchange – 13,831 – 13,831 Gain on disposal of property plant and equipment 5 – 5 – Reversal of impairment on jointly- controlled entity 10,513 – 8,708 – Others 589 6,909 589 6,909

20,487 53,032 18,682 53,032

Non-operating expense Loss from funds with investment managers 34 (3,189) – (3,189) – Changes in fair value of forward exchange contracts – Realised loss (264) – (264) – Loss on foreign exchange (159) – (159) – Loss on disposal of property, plant and equipment – (43) – (43) Loss on divestment of jointly controlled entity 12 (1,356) – (413) –

(4,968) (43) (4,025) (43) Non-operating income, net 15,519 52,989 14,657 52,989




33 NON-OPERATING INCOME (NET) (Cont’d) Group Authority Note 2010/11 2009/10 2010/11 2009/10 S$’000 S$’000 S$’000 S$’000

Discontinued operations (Note 36) Non-operating income Interest income – 284 – – Gain from foreign exchange – 10,000 – – Others – 1,889 – 1,890

– 12,173 – 1,890 Non-operating expense Impairment loss on investments in subsidiary 11 – – – (49,375) Loss on disposal of investment in subsidiary group 37 – (70,240) – –

– (70,240) – (49,375) Non-operating loss (net) – (58,067) – (47,485)

(1) Dividend income of S$285,000 (2009/10 : S$204,000) is received as a return of investment in unquoted equities (Note 14).

34 (LOSS)/INCOME FROM FUNDS WITH INVESTMENT MANAGERS Group and Authority 2010/11 2009/10 S$’000 S$’000

Continuing operations Interest income/(expense) 1 (34) Dividend income 588 1,005 Capital loss (1,599) (4,010) (Loss)/Gain from foreign exchange (1,915) 289 Fair value gain – 18,152 Investment gain 38 464 Investment expenses (302) (883)

Total (Note 33) (3,189) 14,983

35 INCOME TAX CREDIT Group 2010/11 2009/10 S$’000 S$’000

Discontinued operations (Note 36) Tax expense comprises: Overprovision in prior years – Current tax – (400)

Total tax credit – (400)

Domestic income tax is calculated at 17% (2009/10 : 17%) of the estimated assessable surplus before contribution to Government Consolidated Fund and income tax for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

The total charge for the year can be reconciled to the accounting surplus before contribution to Government Consolidated Fund and income tax as follows:

Group 2010/11 2009/10 S$’000 S$’000

Surplus before contribution to Government Consolidated Fund and income tax (Note 36) – 39,977

– 39,977

Numerical reconciliation of income tax expense

Group 2010/11 2009/10 S$’000 S$’000

Income tax expense calculated at 17% (2009/10 : 17%) – 6,796 Tax exemption and rebates – (6,796) Adjustment recognised in current year in relation to current tax of prior year – (400)

– (400)




36 DISCONTINUED OPERATIONS

Corporatisation of Changi Airport took effect on 1 July 2009. As a result of the corporatisation exercise, the results of the discontinued operations for the period from 1 April 2009 to 30 June 2009 were as follows:

Group Authority 2010/11 2009/10 2010/11 2009/10 S$’000 S$’000 S$’000 S$’000

Income Landing, parking and aerobridge fees – 55,733 – 55,733 Passenger and security service charges – 71,858 – 71,858 Rental of offi ce and warehouse space – 22,560 – 22,689 Airport concession fees – 118,637 – 118,637 Franchise fees – 18,875 – 18,875 Utility and service charges – 14,137 – 14,142 Sundry income – 9,643 – 5,571

– 311,443 – 307,505 Less: Expenditure Salaries, wages and staff benefi ts – 21,347 – 18,526 Maintenance of building and equipment – 56,413 – 56,287 Impairment on property, plant and equipment relating to assets held for sale (Note 9) – 59,363 – 59,363 Property tax – 18,714 – 18,714 Services related expenses – 32,496 – 32,126 Other operating expenses – 25,066 – 24,701

– 213,399 – 209,717

Non-operating loss (net) (Note 33) – (58,067) – (47,485) Surplus for the year before contribution to Government Consolidated Fund and income tax – 39,977 – 50,303 Contribution to Government Consolidated Fund (Note 26) – (8,551) – (8,551) Income Tax (Note 35) – 400 – –

Net surplus for the year – 31,826 – 41,752

In 2009/10, the discontinued operations contributed S$174,478,000 to the Group’s net operating cash fl ows.

37 COMPONENTS OF OTHER COMPREHENSIVE INCOME Group 2010/11 2009/10 S$’000 S$’000

Currency translation reserve: Arising during the year – 68,635 Reclassifi cation to comprehensive income on disposal of investment in subsidiary (Note A) – (40,780)

– 27,855 Revaluation reserve: Arising during the year – 58,345 Reclassifi cation to comprehensive income on disposal of investment in subsidiary (Note A) – (29,358)

– 28,987

– 56,842

Group 2010/11 2009/10 S$’000 S$’000

Note A Realised loss on disposal of subsidiary: (a) Currency translation reserve – Reclassifi cation to income and expenditure statement – 40,780 (b) Revaluation reserve – Reclassifi cation to income and expenditure statement – 29,358 (c) Restricted reserve – Reclassifi cation to income and expenditure statement – 102

– 70,240



38 DISPOSAL OF INVESTMENT IN SUBSIDIARY

On 30 June 2009, the Authority disposed of its entire interest in its subsidiary, Changi Airports International Pte Ltd (“CAI”), at the carrying amounts of the assets and liabilities of the subsidiary.

Carrying amounts of net assets disposed: 2009/10 S$’000

Non-current assets Plant and equipment 611 Advisory fee-investment 176 Interest in jointly controlled entities 306 Investment in Beijing Capital International Airport 24,219

Total non-current assets 25,312

Current assets Trade and other receivables 12,732 Funds placed with CAAS 160,927 Cash and bank balances 70,318

Total current assets 243,977

Current liabilities Trade and other payables (1,434) Provisions and accruals (9,315)

(10,749) Non-current liability Deferred tax liability (1,377)

Net assets (Note 22) 257,163

Equity: Share capital 306,539 Reserves (43,160) Accumulated defi cit (6,216)

257,163

39 COMMITMENTS Group and Authority 2010/11 2009/10 S$’000 S$’000

Capital commitments Amount approved and contracted 179,814 176,934 Amount approved but not contracted 94,613 140,793

274,427 317,727

A RAINDANCE DESIGN & PRODUCTION

Singapore Changi Airport, PO Box 1 Singapore 918141Tel: (65) 6542 1122 Fax: (65) 6542 1231

www.caas.gov.sg

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