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SINGAPORE AIRLINES

CORPORATE GOVERNANCE REPORT

For the period 1 April 2010 to 31 March 2011

Additional information on Economic Value Added (EVA)-based incentive plan (EBIP):

A portion of the annual performance-related bonus of senior management is tied to the EVA produced by the Group in the year. Under the plan, one-third of the accumulated EBIP bonus, comprising the EBIP bonus declared in the nancial year and the balance of such bonus brought forward from preceding years, is paid out in cash each year. The remaining two-thirds are carried forward in the individual executives EBIP account. Amounts in the EBIP account are at risk because negative EVA will result in a retraction of EBIP bonus earned in preceding years. This mechanism encourages Management to work for sustainable protability and to adopt strategies that are aligned with the long-term interests of the Company. The rules of the EBIP are subject to review by the Board Compensation and Industrial Relations Committee, which has the discretion, under authority of the Board, to amend the rules where appropriate and relevant to the business conditions.

Accountability (Principle 10)

The Board, through its announcements of quarterly and full-year results, aims to provide shareholders with a balanced and understandable assessment of the Companys performance and prospects. Management provides the Board with monthly management accounts for the Boards review. The Company has clear policies and guidelines for dealings in securities by Directors and employees, as recommended by the SGX-STs Best Practices Guide. The Company imposes a trading embargo on its Directors and employees from trading in its securities for the period of two weeks prior to the announcement of quarterly results; and a period of one month prior to the announcement of year-end results. In addition, Directors and employees are cautioned to observe the insider trading laws at all times.

Board Audit Committee Activities (Principle 11)

The ACs activities for nancial year 2010/2011, in accordance with its responsibilities and duties under its Charter, included the following: (a) Financial Reporting The AC reviewed the quarterly and annual nancial statements and nancial announcements required by SGX-ST for recommendation to the Board for approval. The review focused on changes in accounting policies and practices, major judgmental and risk areas, signicant adjustments resulting from the audit, the going concern assumption, compliance with accounting standards, compliance with SGX-ST and other legal requirements. (b) External Audit The AC discussed with the external auditor the audit plan, and the report on the audit of the year-end nancial statements; reviewed the external auditors management letter and Managements responses thereto; and reviewed the external auditors objectivity and independence from Management and the Company.

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A comprehensive evaluation of the incumbent external auditors competency and quality of the work, objectivity and independence, and exercise of professional skepticism was performed. The appointment of the external auditor and the audit fee were considered, and recommendations made to the Board on the selection of the Companys external auditors. (c) Internal Audit The AC reviewed the scope of internal audit work and its audit programmes; reviewed the major ndings during the year and Managements responses thereto; and ensured the adequacy of the independence and resource sufciency of the internal audit function. (d) Risk Management The AC reviewed the effectiveness of the Companys material controls, including nancial, compliance and risk management controls, to safeguard shareholders investments and the Companys assets. (e) Interested Person Transactions The AC reviewed interested person transactions to ensure compliance with the SGX-ST Listing Manual and the Shareholders Mandate obtained at the last Annual General Meeting. (f) Whistle-Blowing The AC reviewed and was satised with the adequacy of the whistle-blowing programme instituted by the Company through which staff may, in condence, raise concerns about possible improprieties in matters of nancial reporting or other matters. All whistle-blower reports are reviewed by the AC at its quarterly meetings to ensure independent investigation and adequate resolution. (g) Others The AC has full access to and co-operation of Management. The AC also has full discretion to invite any Director or executive ofcer to attend its meetings, and has been given adequate resources to discharge its functions. The AC meets with the internal and external auditors without the presence of non-audit Management every quarter. The AC has undertaken a review of the fees and expenses paid to the external auditors, including fees paid for non-audit services during the year, and is of the opinion that the auditors independence has not been compromised.