THE TRUSTED PARTNER IN GLOBAL ANNUAL REPORT MRO 2018/19 CORPORATE Listed on the mainboard of the Exchange in 2000, SIA Engineering Company (SIAEC) is one of the world’s leading PROFILE maintenance, repair and overhaul (MRO) organisations.

SIAEC’s one-stop maintenance facility in Singapore offers world- class MRO services to a client base of more than 80 international carriers and aerospace equipment manufacturers. Complementing its full spectrum of MRO services is its portfolio of 24 joint ventures in 7 countries, forged with strategic partners and leading original equipment manufacturers (OEM). SIAEC holds certifications from 25 national airworthiness authorities worldwide.

2 5 6 7 Chairman’s Corporate Board of Key Statement Calendar Directors Executives

8 9 14 16 The Year Business The Push Sustainability in Review Segments for Innovation Report

41 86 87 203 Corporate Statistical Financials Shareholding Governance Highlights Statistics

205 206 214 Share Price Notice of Additional and Turnover Annual General Information on Meeting Directors Seeking Re-election Proxy Form FY2018/19 AT A GLANCE

SIAEC signed In-Flight Entertainment and Connectivity Maintenance Agreement with Thales

SIAEC signed $484 million Services Agreement with SilkAir

SIAEC incorporated Additive Flight Solutions Pte. Ltd., an additive manufacturing joint venture with Stratasys Ltd.

SIAEC divested its 100% stake in Services Pty. Ltd.

SIAEC sold its 20% stake in Jamco Singapore Private Limited

SIAEC acquired remaining 20% stake in Singapore Aero Support Services Pte. Ltd. (formerly known as Singapore Jamco Services Private Limited)

SIAEC and NokScoot Co., Ltd agreed to form a line maintenance joint venture based in

SIAEC signed $1.4 billion Services Agreement with

REVENUE $1,020.9 NET MILLION PROFIT DIVIDEND PER SHARE $160.9 11 MILLION REPORT 2018/19 ANNUAL CENTS* 1 * includes final ordinary dividend of 8 cents per share, which is subject to shareholders’ approval CHAIRMAN'S STATEMENT

DEAR 2 SHAREHOLDERS,

The aviation industry saw a challenging operating environment last year, with rising costs and the weakening of world trade expected to have further e also impact in the year ahead. The MRO industry has “ been contending with heightened competition from Wcontinued traditional MRO service providers and OEMs. to advance Challenges have been compounded by the longer our strategic maintenance intervals and lighter work content of new-generation aircraft, as well as shorter-term partnerships

SIA ENGINEERING COMPANY headwinds such as the unforeseen grounding of and expand our customers’ aircraft. geographical

To sharpen our competitive edge, we embarked on footprint to access our Transformation journey in April 2018 to explore new markets, new avenues of growth and enhance productivity. capabilities and At the same time, we also continued to advance our technologies. strategic partnerships and expand our geographical footprint to access new markets, capabilities and ” technologies.

CONTINUING OUR TRANSFORMATION JOURNEY Our Transformation journey is gaining traction. Various initiatives have been implemented across our operations, with some leading to productivity gains and creating additional capacity for growth. More of such productivity and revenue generation initiatives will be progressively implemented over the next three years.

Complementing our Transformation journey is our innovation and technology drive in digitalisation, automation and robotics, data analytics and additive manufacturing, where we have developed an Operations and Technology Capability Roadmap. In this Roadmap, we identified five key technology focus areas, namely digital collaboration, smart control centre, machine vision, predictive maintenance, as well as advanced infrastructure (for enhanced connectivity and workflow) and robotics. More about our innovation and technology initiatives can be found further in this Annual Report.

MAINTAINING SERVICE EXCELLENCE We have established ourselves as a trusted MRO partner to our customers by staying attuned to their needs and working with them to ensure that their Though still in their gestation period, our recently aircraft operate with the highest safety standards and established associated and joint venture companies reliability. We support their operating efficiencies with are progressing in their respective growth journeys. our deep knowledge of their maintenance needs and Asia Pacific Aviation Services, a joint venture commitment to service excellence. with The Boeing Company for fleet management services, became operational in March 2018. Heavy Underscoring our service excellence, we renewed a Maintenance Singapore Services and Moog Aircraft comprehensive MRO services agreement with Singapore Services Asia have also commenced operations during Airlines. This agreement spans a period of two years with the year. Additive Flight Solutions, our joint venture a further two-year renewal option, and will see revenue with Stratasys Ltd., has also commenced operations to contribution of $1.3-$1.4 billion over the 4-year period. provide 3D-printed aftermarket parts for commercial We also inked a new services agreement with SilkAir for a aviation. Its additive manufacturing centre offers term of 12 years, with an option to renew for a further five design, engineering, certification support and faster years. The total revenue of the foregoing agreement is production of replacement aircraft cabin interior parts, approximately $484 million. which complements our efforts to reduce maintenance downtime and increase cost savings for our airline Additionally, we partnered with Thales to provide customers. maintenance and support on its in-flight entertainment and connectivity systems for SIA’s A350 XWB aircraft In December 2018, we divested our subsidiary, Aircraft fleet. This partnership further enhances our ability to Maintenance Services Australia, to focus on areas of high provide one-stop turnkey maintenance solutions to our growth potential and competitive advantage. customers, and continues our proud track record of working with established aerospace players. GROWING OUR GEOGRAPHICAL FOOTPRINT As fleet sizes grow due to robust travel demand, STRENGTHENING PARTNERSHIPS AND THE GROUP especially in the Asia Pacific region, the expansion of our To achieve sustained growth, the Group has developed international line maintenance network continues to be strategic partnerships with leading OEM partners to key to our growth strategy, giving us greater access to augment our core competencies. This is evident from the opportunities in new markets. healthy contributions to profits from associated and joint venture companies over the years. In March 2019, we extended our international line maintenance network to Thailand through a joint venture We also regularly review and streamline our portfolio with NokScoot Airlines. The joint venture will offer line of joint venture companies and associated companies maintenance services at Don Mueang International to ensure that it is in line with our growth objectives. As Airport and subsequently expand its operations to other part of our efforts to grow the Group’s aircraft and cabin key airports in Thailand. maintenance business, we acquired Jamco Corporation’s remaining 20% stake in Singapore Jamco Services, which FINANCIAL PERFORMANCE has since been renamed Singapore Aero Support Services. The Group registered a higher share of profits from associated and joint venture companies in FY2018/19, Meanwhile, our associated company, Eagle Services Asia, which rose 3.7% to $113.9 million. Overall, revenue for commenced maintenance for the PW1100G engines, the year declined 6.8% to $1,020.9 million. Net profit was which is one of the engine types that power the new- 13.9% lower than a year ago at $160.9 million, mainly due generation A320neo aircraft. We continue to explore to the absence of a $15 million divestment gain that was opportunities with existing associated and joint venture recorded in FY2017/18. REPORT 2018/19 ANNUAL companies to develop leading-edge capabilities and expand capacity. 3 CHAIRMAN'S STATEMENT

4

The Board of Directors is recommending a final ordinary dividend of 8 cents per share. Together with the interim dividend of 3 cents paid out at mid-year, the total payout for FY2018/19 will be 11 cents per share.

APPRECIATION In closing, I would like to thank my fellow Directors for their commitment and generosity of counsel, and members of the Management team for their contributions SIA ENGINEERING COMPANY to the Group.

In particular, I would like to extend our heartfelt appreciation to Mr Stephen Lee Ching Yen, who retired from his role as Non-executive Chairman in July 2018. Mr Lee helmed the Group for more than a decade and was instrumental to our growth. Amongst his many contributions, he oversaw the conceptualisation and implementation of our ongoing Transformation journey. We are grateful that he remains as Special Advisor to the Board on the Transformation. His experience, insights and inspiration will serve the Group well in its next chapter of growth.

To our staff and unions, thank you for your dedication and hard work. And above all, we are deeply grateful for the strong support from our valued customers and shareholders.

Tang Kin Fei Chairman CORPORATE CALENDAR

2 FEB 15 MAY 16 MAY 28 JUN 19 JUL 2018 Announcement Announcement Analyst briefing Despatch of 36th Annual of FY2017/18 of FY2017/18 on FY2017/18 Notice of Annual General Meeting third-quarter full-year full-year General Meeting financial results financial results financial results to shareholders and website publication of FY2017/18 Annual Report

29 NOV 9 NOV 8 NOV 7 AUG 19 JUL

Payment of Analyst briefing Announcement Payment of Announcement FY2018/19 on FY2018/19 of FY2018/19 FY2017/18 of FY2018/19 interim dividend second-quarter second-quarter final dividend first-quarter and half-year and half-year financial results financial results financial results

8 FEB 10 MAY 13 MAY 27 JUN 19 JUL 2019 Announcement Announcement Analyst briefing Despatch of 37th Annual of FY2018/19 of FY2018/19 on FY2018/19 Notice of Annual General Meeting third-quarter full-year full-year General Meeting financial results financial results financial results to shareholders and website publication of FY2018/19 Annual Report

4 NOV 1 NOV 8 AUG 26 JUL

Analyst briefing Announcement Payment of Announcement on FY2019/20 of FY2019/20 FY2018/19 of FY2019/20

second-quarter second-quarter final dividend first-quarter REPORT 2018/19 ANNUAL and half-year and half-year financial results financial results financial results

5 BOARD OF DIRECTORS

6

Tang Kin Fei Stephen Lee Ching Yen

Chairman Chairman Chairman, Compensation & HR Committee Non-executive and Non-independent Director From 19 July 2018 Until 19 July 2018 Non-executive and Independent Director SIA ENGINEERING COMPANY

Chew Teck Soon Christina Ong Manohar Khiatani

Chairman, Audit Committee Chairperson, Nominating Committee Chairman, Board Safety & Risk Committee Non-executive and Non-executive and Non-executive and Independent Director Independent Director Independent Director

Goh Choon Phong Ng Chin Hwee Dr Raj Thampuran

Non-executive and Non-executive and Non-executive and Non-independent Director Non-independent Director Independent Director

Wee Siew Kim Chin Yau Seng Png Kim Chiang Tong Chong Heong

Non-executive and Non-executive and Executive and Non-executive and Independent Director Non-independent Director Non-independent Director Independent Director From 8 October 2018 Until 1 June 2018 KEY EXECUTIVES

Png Kim Chiang

Chief Executive Officer

Ivan Neo Seok Kok Zarina Piperdi Wong Yue Jeen

Executive Vice President Operations SVP Human Resources SVP Aircraft & Component Services

Foo Kean Shuh Philip Quek Cher Heong Ng Lay Pheng Ng Jan Lin Wilin

SVP Line Maintenance SVP Partnership Management SVP Finance/ SVP Innovation, Technology & Cabin Services & Business Development Chief Financial Officer & Fleet Management ANNUAL REPORT 2018/19 ANNUAL

7 THE YEAR IN REVIEW

8

IA S Engineering Company recorded a profit attributable to SIA ENGINEERING COMPANY owners of the parent of $160.9 million for the financial year ended 31 March 2019

FINANCIAL YEAR OPERATING RESULTS OPERATING PERFORMANCE Group revenue for the year was $1,020.9 million, 6.8% During the year in review, the number of flights handled by lower than the preceding year, mainly due to a decline Line Maintenance at increased by 4.3% to in contribution from the airframe and fleet management 153,006 flights. The Group’s international line maintenance segment but mitigated by higher contribution from the network now covers 34 airports in seven countries. engine and component segment. Under Airframe Overhaul, the number of maintenance Share of profits of associated and joint venture companies checks performed at SIAEC's six hangars and at the apron rose 3.7% to $113.9 million. Notwithstanding a one-time tax in Singapore totalled 537 against 542 in the preceding year. charge and an upward revision in tax provision by certain The three hangars in the performed 54 checks engine and component centres in FY2018/19, contribution against 56 checks a year ago. from the engine and component segment increased $5.5 As at 31 March 2019, the Fleet Management business million to $115.4 million, which was partially offset by a $1.4 manages a fleet size of 82 aircraft for its eight airline million decrease in contribution from the airframe and line customers. maintenance segment. OUTLOOK The MRO market remains challenging amidst heightened SHARE OF PROFITS OF ASSOCIATED AND competition from traditional MRO service providers and JOINT VENTURE COMPANIES (NET OF TAX) ($M) OEMs seeking to expand their share of the aftermarket. This has been compounded by the longer maintenance intervals and lighter work content of new-generation FY2018/19 113.9 aircraft.

FY2017/18 109.8 Against this backdrop, we continue with our Transformation drive to sharpen our competitive edge, BUSINESS SEGMENTS

International Airport and subsequently expand to other key airports in Thailand.

Recently signed contracts with Singapore Airlines Limited (“SIA”) and SilkAir (Singapore) Private Limited (“SilkAir”) underpin our standing as a trusted MRO partner to our airline customers. The renewed comprehensive MRO services agreement with SIA spans a period of two years with an option to renew for a further two years, and will contribute $1.3-$1.4 billion in revenue over the four-year period. The new services agreement with SilkAir covers a term of 12 years, with an option to renew for a further five years. The total revenue of this agreement is about $484 million over the 12-year term.

DIVIDENDS For FY2018/19, the Board of Directors has recommended a final ordinary dividend of 8.0 cents per share. Together with the interim dividend of 3.0 cents per share paid earlier, the total dividend payout for FY2018/19 will be 11.0 cents per share. Payment of the final dividend, which amounts to approximately $89.5 million, is subject to shareholders’ approval at the Annual General Meeting on explore new avenues of growth and business opportunities, 19 July 2019. If approved, the dividend will be paid on streamline processes, enhance productivity and create 8 August 2019. additional capacity for growth. This is complemented by our push to innovate and adopt technologies, through our investments in digitalisation, automation and robotics, data analytics and additive manufacturing. The Group will AIRFRAME AND LINE MAINTENANCE pursue improvements in service excellence and expand on the range of service offerings to enhance the engineering reliability and operating efficiencies of airline customers. AIRFRAME AND LINE MAINTENANCE REVENUE We will also continue to focus on advancing our strategic ($M) partnerships and expanding our geographical footprint to tap growth opportunities in new markets, capabilities and technologies. FY2018/19 991.4

During the year, Additive Flight Solutions Pte. Ltd., an FY2017/18 1,067.2 additive manufacturing joint venture company with Stratasys Ltd., was incorporated. The joint venture has commenced operations to provide design, engineering, certification support and production of 3D-printed parts for use in commercial aviation. This will enhance the FLIGHTS HANDLED AT CHANGI AIRPORT Group’s service offerings, especially in the area of cabin services. FY2018/19 153,006 The Company also announced plans to extend the Group’s ANNUAL REPORT 2018/19 ANNUAL international line maintenance network to Thailand, in FY2017/18 146,687 partnership with NokScoot Airlines Co., Ltd. The joint venture will commence initial operations at Don Mueang 9 BUSINESS SEGMENTS

that are equipped with in-house facilities to provide 10 Number of checks A C Total performed at inspection, repair, modification and test services for Singapore Base aircraft components. FY2018/19 466* 71 537 During the year under review, the Company added and FY2017/18 455* 87 542 renewed 13 Airframe Overhaul contracts with airline

* Including ‘A’ checks performed by Line Maintenance at the apron customers at its Singapore base.

Supplementing our operations in Singapore is the Number of checks performed at Clark Base C Company’s subsidiary, SIA Engineering (Philippines) FY2018/19 54 Corporation. It currently operates two narrow-body hangars and one wide-body hangar at Clark, Philippines, FY2017/18 56 and provides heavy and light maintenance checks to

SIA ENGINEERING COMPANY airlines operating out of the Philippines and in the region.

Another subsidiary located in Singapore, Heavy AIRFRAME OVERHAUL AND LINE MAINTENANCE Maintenance Singapore Services Pte. Ltd., provides Aircraft are mandated to undergo scheduled checks to airframe maintenance, cabin upgrade and modification maintain their airworthiness certifications with national services for aircraft. This joint venture with Airbus regulatory authorities, such as the Civil Aviation Authority will be designated as Airbus’ Centre of Excellence for the of Singapore, Federal Aviation Administration of the A380 and A350 heavy maintenance in Asia. United States, and the European Aviation Safety Agency of the European Union. Serving an international client base of more than 50 airlines at Singapore Changi Airport, our licensed Scheduled A and C checks are performed at our six engineers and technicians provide aircraft certification hangars in Changi. The advent of new-generation aircraft and ground handling services, ensuring high dispatch has resulted in less time in the hangars and A checks reliability for aircraft on transit and night stops. We also increasingly being performed at the apron. provide cabin maintenance services to cater to airline customers’ increasing focus on their cabin interiors. Services provided under Airframe Overhaul include airframe structural repair and modification, cabin The Line Maintenance Division’s Quick Action Team, refurbishment, VIP aircraft modification, aircraft painting a specialised team ready to respond to aircraft-on- and retrofitting of inflight entertainment and avionics ground (“AOG”) situations round-the-clock, also carry out systems. The hangars are supported by workshops AOG engine changes for airline customers in Singapore and overseas. During the year, the Company serviced a total of 153,006 flights at Singapore Changi Airport, a 4.3% improvement over the previous year. We renewed 22 line maintenance contracts and added five new airline customers.

In April 2018, we signed an In-Flight Entertainment and Connectivity (“IFEC”) Maintenance Agreement with Thales to provide maintenance and support on its IFEC systems for SIA’s A350 XWB aircraft fleet. This further enhances our ability to provide IFEC maintenance solutions to our customers.

In addition, as part of our efforts to grow the Group’s aircraft and cabin maintenance business, we acquired Jamco Corporation’s 20% stake in Singapore Jamco Services Private Limited (“SJS”). Following the acquisition, SJS is now a wholly-owned subsidiary of SIAEC and has since been renamed Singapore Aero Support Services Pte. Ltd. AOG support services. In addition, we also provide turnkey solutions to assist airlines in aircraft entry-into- Apart from the operations at Changi Airport, our service preparations. These include the establishment international line maintenance network currently of infrastructure, such as warehousing, logistics and comprises six line maintenance joint ventures overseas, provisioning of on-site spares. covering 33 airports in six countries outside Singapore.

As at 31 March 2019, the number of aircraft under fleet During the year, we announced plans to extend our management was 82. international line maintenance network to Thailand, in partnership with NokScoot Airlines Co., Ltd. The joint Boeing Asia Pacific Aviation Services Pte. Ltd., our joint venture will commence initial operations at Don Mueang venture company in Singapore with The Boeing Company, International Airport and subsequently expand to other key also provides a comprehensive and integrated suite of airports in Thailand. engineering, materials management and fleet support solutions for Boeing aircraft to customers in Asia Pacific. We also divested our line maintenance subsidiary in Australia, Aircraft Maintenance Services Australia Pty Ltd, to focus on areas of high growth potential and competitive advantage.

FLEET MANAGEMENT The Fleet Management business covers engineering, maintenance support activities and inventory management, including formulating and up-keeping of aircraft maintenance programmes, maintenance planning and control, engineering design, reliability programmes, materials support as well as logistics and supply chain management.

Through the Company’s proven capabilities in inventory and supply chain management, airlines are provided with integrated solutions that encompass component pooling, on-site consignment, component repair and REPORT 2018/19 ANNUAL overhaul management, warehousing, logistics and 24/7

11 BUSINESS SEGMENTS

ENGINE AND COMPONENT for the GE90 and GE9X engines after incorporation and 12 commencement of operations.

ENGINE AND COMPONENT REVENUE In addition, the Group has seven Singapore-based joint ($M) ventures specialising in component repair and overhaul. They include Aerospace Component Engineering Services FY2018/19 29.5 Pte. Limited, Services Singapore Pte. Ltd., Safran Electronics & Defense Services Asia Pte. Ltd., Goodrich Aerostructures Service Center – Asia FY2017/18 27.7 Pte. Ltd., Fuel Accessory Service Technologies Pte Ltd, Panasonic Avionics Services Singapore Pte. Ltd. and Moog Aircraft Services Asia Pte. Ltd.

SIA ENGINEERING COMPANY Two other joint ventures based in Singapore are JAMCO To enhance the breadth and depth of our engine overhaul Aero Design & Engineering Private Limited, which provides services, the Company had forged five joint ventures turnkey solutions for aircraft interior modifications, with the world’s leading engine and engine component and Additive Flight Solutions Pte. Ltd., which produces manufacturers - namely Pratt & Whitney and Rolls- 3D-printed parts for use in commercial aviation. Royce. Amongst these Singapore-based engine/engine component joint ventures, Singapore Aero Engine Services The Company also participates in the development of the Private Limited and Eagle Services Asia Private Limited are Mitsubishi Regional Jet aircraft engine and the Bombardier the Asia Pacific Centres of Excellence for Rolls-Royce and CSeries engine with Pratt & Whitney under the PurePower Pratt & Whitney, respectively. The other three joint ventures PW1000G Risk Revenue Sharing Programs (RRSP), through with Pratt & Whitney are Asian Surface Technologies Pte two wholly-owned subsidiaries, NexGen Network (1) Ltd, Component Aerospace Singapore Pte. Ltd. and Turbine Holding Pte. Ltd. and NexGen Network (2) Holding Pte. Ltd. Coating Services Pte Ltd. The Company is also partnering with GE Aviation to form an engine overhaul joint venture All the foregoing joint ventures expand the service company that will provide a full range of MRO services offerings of our total MRO solutions. AIRFRAME AND LINE MAINTENANCE ENGINE AND COMPONENT

Singapore Aero Engine SIA Engineering (USA) SIA Engineering Eagle Services Asia Services United States 100% Japan 100% Singapore 49% Singapore 50%

Singapore Aero Support Pan Asia Pacific Aviation Component Aerospace Asian Surface Technologies Services Services Singapore Singapore 39.2% Singapore 100% 40% Singapore 46.4%

Southern Airports Aircraft PT JAS Aero-Engineering JV with GE Aviation Turbine Coating Services Maintenance Services Services (to be incorporated) Singapore 24.5% 49% 49% Singapore 49%

Heavy Maintenance Singapore Boeing Asia Pacific Aviation Fuel Accessory Service Goodrich Aerostructures Services Services Technologies Service Center – Asia Singapore 65% Singapore 49% Singapore 49% Singapore 40%

Aviation Partnership Safran Electronics & Defense Safran Landing Systems SIA Engineering (Philippines) (Philippines) Services Asia Services Singapore Philippines 65% Philippines 51% Singapore 40% Singapore 40%

JV with NokScoot Aerospace Component Additive Flight Solutions (to be incorporated) Engineering Services Singapore 60% Thailand 49% Singapore 51%

Panasonic Avionics Services Moog Aircraft Services Asia Singapore Singapore 49% Singapore 42.5%

JAMCO Aero Design & Engineering Singapore 45%

INVESTMENT HOLDING

NexGen Network (1) NexGen Network (2) Holding Holding Singapore 100% Singapore 100%

n Rolls-Royce n Pratt & Whitney n UTAS n Safran n Cebu n JAMCO n Boeing n Airbus n GE n NokScoot n Wholly-Owned n Others ANNUAL REPORT 2018/19 ANNUAL

13 THE PUSH FOR INNOVATION

Our innovation initiatives and technology adoption 14 projects continued to take flight during the year, as we marked several important milestones in our innovation LMD SMART CONTROL CENTRE journey.

That journey had begun in earnest in 2016 when, amidst the wave of digital revolution sweeping over the MRO industry, we established the Innovation & Technology Group to spearhead our innovation drive in the areas of digitalisation, automation and robotics, data analytics and additive manufacturing, alongside a commitment to invest up to $50 million over five years. These initiatives were aimed at spurring new avenues of growth, building

SIA ENGINEERING COMPANY new capabilities, enhancing productivity and safety, and increasing the Group’s overall competitiveness. work status, manning levels, as well as resource and Several of our key initiatives have been implemented inventory availability. Through better visibility, operations across our operations, leading to productivity gains and will be able to gain new insights into trends and make creating additional capacity for growth. More of such data-driven decisions, while deploying resources more initiatives will be progressively implemented over the efficiently to reduce aircraft downtime and increase cost next three years. We also conducted an Operations savings for our airline customers. The project will be and Technology Capability Roadmapping Exercise and implemented in phases over the next three years, with developed a strategic roadmap. A few key technology the digital infrastructure expected to be completed by focus areas in digital collaboration, smart control centre, FY2019/20, followed by the subsequent connection of all machine vision, predictive maintenance, as well as devices to the network and data injection to the SCC in advanced infrastructure (for enhanced connectivity and the later phases. logistical workflow) and robotics were identified. MACHINE VISION DIGITAL COLLABORATION With automation becoming more pervasive in the MRO A key tenet of our digital collaboration drive is to improve industry, the application of machine vision will enable information accessibility and enhance connectivity on the automated inspection, analysis and continuous monitoring go. During the year, more than 800 tablets were issued to to improve productivity and enhance quality at work. the operations divisions, providing users with easy access to technical and essential information. The tablets are One of our efforts is to introduce video analytics for safety, pre-loaded with more than 20 mobile applications that security and surveillance within our hangars. Upon detection provide staff ease of access to technical manuals, and of an anomaly, alerts will be sent out to our operations allow staff to retrieve job assignments and even manage human resource matters on the go. Through this digitally collaborative platform, our staff are empowered to make MACHINE VISION informed decisions quickly and travelling time is reduced, thereby enhancing productivity.

SMART CONTROL CENTRE In alignment with Industry 4.0, the Group is building a digital infrastructure to connect all applications and equipment via the Internet-of-Things network. The data collected will then be fed into the Smart Control Centre (“SCC”) - an intelligent and inter-connected nerve centre - where it will be augmented through artificial intelligence to enable real-time monitoring of operations such as centre and ground personnel so that appropriate corrective measures can be applied in a timely manner. VIRTUAL REALITY-BASED TRAINING

Furthermore, to ensure that our drivers operate safely, we have also leveraged machine vision to monitor their fatigue levels by tracking eye movements. When an anomaly is detected, a vibration mechanism on the driver’s seat will be activated to alert the driver. We have since completed a trial run of the system with 10 vehicles, and aim to scale up implementation of the system to other fleets of vehicles.

ADVANCED INFRASTRUCTURE AND ROBOTICS To ensure seamless delivery of MRO services to our airline customers, we are strengthening the ability to optimise spares logistical flow and conduct all-weather operations through the integration of advanced infrastructure and CULTURE OF INNOVATION robotics. Underlying the efforts to drive improvements in productivity and quality is a culture of innovation that is One key initiative is the Pneumatic Tube System deeply ingrained within the DNA of our workforce. The (“PTS”) that will transport small capsules of spares and primary driver of innovation efforts is our people, whose expendables from the warehouses to the workshops active participation has been instrumental in this journey of and hangars. These capsules will improve lead time and innovation. Employees are encouraged to identify problem efficiency in the transport of such equipment, while areas at the workplace and the Innovation Group will assist reducing the need for manual delivery between locations. to formulate solutions through application of technologies The PTS will be installed across 26 locations, and is to solve these problems. This bottom-up approach has expected to be progressively implemented from yielded several staff-contributed ideas, such as the aircraft July 2019. towing simulator, Virtual Reality-based training and enhanced ground support equipment, including space- Additionally, we are conducting preliminary feasibility efficient fan cowl jigs and more efficient brakes heat studies on various infrastructural and vehicular-based extraction systems. solutions to enable work to be performed outdoors. An initial concept has been developed for Combinable Smart Innovation Group will continue to work with key Trucks with easily erectable roof structures that will serve stakeholders to identify and implement new technology as mobile command posts. initiatives at the workplace.

COMBINABLE SMART TRUCKS he primary T driver of innovation efforts is our people, whose active participation has been instrumental in this journey of innovation ANNUAL REPORT 2018/19 ANNUAL

15 SUSTAINABILITY REPORT

OVERVIEW These JVs in Singapore, Hong Kong, Indonesia, Japan, 16 Philippines, the USA and Vietnam provide a wide range of ABOUT THIS REPORT MRO services from airframe and line maintenance, repair & overhaul of engines and components, engineering & SIA Engineering Company (“the Company” or “SIAEC”) is material management support, to additive manufacturing. firmly committed to upholding its role as a responsible global corporate citizen in every aspect of its business and operations. Since FY2007/08, SIAEC’s Annual Reports MEMBERSHIP OF ASSOCIATIONS have outlined the Company’s environmental management efforts and corporate social responsibility activities, inter The Company is a member of Singapore Business alia. In 2018, the sustainability section in the Annual Report Federation, Singapore International Chamber of was expanded and developed into our first comprehensive Commerce, Singapore National Employers Federation, Sustainability Report. This second Sustainability Report Singapore Institute of Aerospace Engineers and highlights our sustainability practices and efforts for Association of Aerospace Industries (Singapore). SIA ENGINEERING COMPANY the financial year from 1 April 2018 to 31 March 2019 (“FY2018/19”).

The report has been prepared with reference to the MISSION STATEMENT guidelines of the Global Reporting Initiative (“GRI”) SIA Engineering Company is engaged in Standards: Core option and the Sustainability Reporting providing aviation engineering services of Guide from the . the highest quality, at competitive prices for customers and a profit to the Company. We will seek external assurance for our reports at a time when we are more mature therewith. CORE VALUES

REPORTING SCOPE AND BOUNDARY Pursuit of Excellence All information, including data, statistics and targets, are We strive for the highest professional standards in our work and aim to be the in relation to SIAEC’s operations in Singapore where the best in everything we do. majority of our activities are carried out unless stated otherwise. Financial information relating to SIAEC Group’s Safety (“the Group”) business can be found in the Annual Report We regard safety as an essential part of all from page 87. The full list of our subsidiaries, joint ventures our operations. We maintain and adopt and associated companies (“JVs”) can be found on page 13 practices that promote the safety of our of the Annual Report. customers and staff.

Customer First FEEDBACK Our customers are foremost in our minds Your feedback is important to us. Please address all at all times. We go the extra mile to exceed feedback on our Sustainability Report and any aspect their expectations. of our sustainability efforts to the Sustainability Working Group at [email protected]. Concern for Staff We value our staff and care for their well- being. We treat them with respect and ABOUT SIA ENGINEERING COMPANY dignity and seek to provide them with Listed on the Mainboard of the Singapore Exchange in appropriate training and development so 2000, SIA Engineering Company Limited is a limited liability that they can lead fulfilling careers. company incorporated in Singapore. The Company is a subsidiary of Singapore Airlines Limited, and provides Integrity maintenance, repair and overhaul (“MRO”) services1 in We strive for fairness in all our business and working relationships. Singapore to airline customers globally. Teamwork Apart from the operations in Singapore, the Group’s We work with pride as one team to achieve business comprises 24 JVs forged with strategic partners success together. and leading Original Equipment Manufacturers (“OEMs”).

1. None of our services are banned in the locations that we operate. PNG KIM CHIANG Chief Executive Officer

CEO’S MESSAGE

Last year, we expanded the sustainability section in the • In line with our commitment to uphold high ethical Annual Report into our first comprehensive Sustainability standards in the conduct of our business, we have Report. Our second report continues the story of our expanded our training on anti-bribery to a wider group sustainability journey and highlights our sustainability of staff and updated the training materials. initiatives and efforts for FY2018/19. • To adapt to the changing MRO landscape, we continue to invest in innovation. An exercise was conducted In our pursuit to be the MRO service provider of choice, to benchmark our innovation and technological safety remains our foremost priority. Besides upholding initiatives against the MRO industry, and a technology high standards of quality in aircraft maintenance, we are roadmap was developed to prioritise the adoption of committed to creating a safe work environment for our technologies based on our business objectives and people. In FY2018/19, our reportable accident and severity needs. We are also heartened to receive the Gold rates have improved compared to the previous year. We Award at the Changi Airport Group Annual Airport will continue to implement safety initiatives to promote a Safety Awards for our towing simulator, which was safety mindset and improve our safety performance. developed to provide an immersive risk-free training environment to enhance our staff’s proficiency in Our employees are integral to the success of our aircraft pushback and towing operations. organisation. We value their contributions and invest in • Our focus on human capital goes beyond SIAEC. their training. In FY2018/19, each employee received an To support the growth of the MRO industry, we average 45 hours of training, which surpassed the target collaborated with Singapore Institute of Technology on that we set for ourselves. We are also honoured to receive their Aircraft Systems Engineering degree programme, the SkillsFuture Employer Award for Non-SMEs for investing which has taken in the first batch of undergraduates. in the development of employees’ skills, and building an • We are humbled to receive the Charity Bronze Award organisational culture that emphasises lifelong learning. from the Community Chest for the third consecutive year. The recognition from the Community Chest No countries will be spared from the impact of climate is a testament to our longstanding commitment to change, including Singapore. To address this global issue, contribute to the society. Singapore took a significant step of introducing the carbon tax, which has come into effect in 2019. We support We would like to thank all our staff and stakeholders who the efforts by the global community and Singapore in have contributed to our sustainability efforts. We look combating climate change, and will continue to press on forward to your continued support. with our environmental efforts. For a start, we are enhancing our disclosure and reporting our carbon emissions. As we gain a better understanding of our emissions baseline, we BOARD STATEMENT will set our emission-reduction goals. The Board provides guidance and works with the Some of the other highlights in FY2018/19: Management Committee on SIAEC’s overall strategic direction, policies and business objectives, taking • In the materiality assessment exercise conducted into consideration key material environmental, in 2018, we have revalidated our material topics social and governance factors. The Board oversees REPORT 2018/19 ANNUAL to ensure that they remain relevant, and included the management of these factors through its additional topics which are material to our organisation involvement in the various Board Committees and and stakeholders, namely Employment, Labour/ regular engagement with Senior Management. 17 Management Relations and Emissions. SUSTAINABILITY REPORT

MANAGING SUSTAINABILITY interests and expectations of stakeholders, the Group’s top 18 risks, as well as our policies and processes. We aim to achieve our goals in a sustainable manner, including contributing to the communities in which we In the materiality assessment exercise conducted in 2018, operate. Our objective is to develop and grow our role as we have added three material topics: Emissions, Labour/ a responsible business entity and corporate citizen, with Management Relations and Employment. The topics were a focus on sustainability issues in Economic, Governance, reviewed by the Management Committee and the Board. Social and Environmental areas.

SUSTAINABILITY ORGANISATIONAL STRUCTURE Economic • Investments in JVs The Sustainability Working Group, headed by the Chief • Transformation Financial Officer, drives sustainability initiatives across the • Innovation and Technology organisation, and comprises members from the various SIA ENGINEERING COMPANY operational and support divisions across the Company. Governance The Sustainability Working Group provides regular updates • Anti-Corruption/Bribery* to the Management Committee, which is chaired by the Chief Executive Officer, and to the Board on sustainability- related matters. Social • Aviation Safety • Diversity and Equal Opportunity BOARD OF DIRECTORS • Employment* • Freedom of Association and Collective Bargaining • Labour/Management Relations* MANAGEMENT COMMITTEE • Local Communities • Non-Discrimination • Supplier Social Assessment • Training and Development* SUSTAINABILITY WORKING GROUP • Workplace Safety*

MATERIALITY ASSESSMENT Environment • Effluents and Waste The materiality assessment process includes identifying • Emissions* the key stakeholders critical to the business or are • Energy* affected by the Company’s operations, and the issues that • Environmental Compliance are important to them. The identified issues were then • Water prioritised, taking into account considerations such as the

* Material topics ENGAGING OUR STAKEHOLDERS We engage2 our stakeholders through various platforms identify emerging trends, issues and concerns. Feedback to understand and address their interests and concerns. is solicited on decisions and issues that affect our Regular communications with stakeholders enable us to stakeholders.

OUR STAKEHOLDERS

Employees Customers Shareholders JV Partners Suppliers We value our staff We are committed We maximise We work with our We treat our and care for their to providing returns for long- JV partners to suppliers with well-being and our customers term profitability build long-term respect and development. with high with the aim growth at our JVs. emphasise fairness quality aviation of creating in our relationships engineering sustainable and dealings with services. shareholder value. them.

The table below highlights some of the key topics and concerns from our stakeholders and examples of our approach to address them.

Stakeholders Key Topics and Concerns Examples of Approach / Responses

• Company/Group performance, • Our inhouse magazine, Electronic Bulletin Board and business updates and Communication Packages provide timely updates to staff on Transformation initiatives latest news and information. Employees • Staff policies and activities • Half-yearly Business Meetings to update staff on the • Workplace-related and safety- Company’s performance and ongoing initiatives. related issues • Organisational Climate Survey and Pulse Surveys to gather • Collective Agreement matters feedback from staff. and staff-related issues • Management walkabouts in relation to various initiatives/ campaigns to demonstrate Management’s commitment and support. • Monthly Union-Management meetings to discuss staff-related issues. • Informal get-together sessions and retreats for unions and Management to maintain collaborative relationships. ANNUAL REPORT 2018/19 ANNUAL

19 2. These engagements were not conducted specifically for the Sustainability Report. SUSTAINABILITY REPORT

Stakeholders Key Topics and Concerns Examples of Approach / Responses 20 • Status of their maintenance • Progress reports on the aircraft maintenance checks. checks • Annual independent customer survey to gather feedback from • Address customers’ concerns customers. Customers and queries • Quarterly review of compliments and complaints. • Promote new engineering capabilities

• Challenges facing the Group • Presentation to shareholders at Annual General Meeting on the • Financial performance of the challenges of the MRO industry and the strategies to position Group the Group for the future. Shareholders • Transformation • All financial results, as well as price-sensitive information, are released in a timely manner through the Company’s website and SIA ENGINEERING COMPANY via SGXNet. • Analyst briefings are held on a half-yearly basis. • Investor Relations email and contacts for investors to reach out to the Company for queries. • Updates on the progress of Transformation are included in the quarterly announcements of financial results.

• Review of JVs' performance • Weekly internal meetings with Senior Management to review • Review of key issues affecting JVs' performance and issues. growth and strategic objectives • JVs' issues are raised at the JV Board meetings and JV partners’ JV Partners of the JVs with the partners meetings. • Matters requiring alignment with • Scheduled internal audits on JVs' internal controls and the JV agreements compliance. • Periodic presentation on JVs' performance by JV Management and/or JV partners to SIAEC Board. • Partnership Management Division engaging JV Management on issues affecting JVs' performance. • Maintain good relationships with JV partners through events, visits etc.

• Collaboration with suppliers • Engage selected suppliers regularly through meetings, emails, to ensure that the Company tele-conferences to discuss both commercial and operational continues to engage cost- matters. Suppliers effective and socially responsible • Periodic review of suppliers’ performance to ensure that suppliers suppliers comply with the established standards, procedures or • Supplier performance key performance indicators. • Breaches of Supplier Code of • Evaluate any breaches of Supplier Code of Conduct, and Conduct formulate, implement and monitor corrective actions. • Questionnaire for new suppliers. EMPLOYEES provide solutions for airframe maintenance and overhaul We constantly engage our staff through various platforms, services, fleet management services, cabin modifications, including recreational and wellness/health activities, as aircraft painting, components maintenance and overhaul, well as at community service and social functions. The training of engineers and technicians, line maintenance latest news and information on the Company's activities and technical handling. Complementing our services are communicated to our staff through platforms such in Singapore are our overseas maintenance network as the Company’s intranet (Electronic Board Bulletin), in different regions, and our expanded maintenance inhouse magazine, Business Meetings, Communication capabilities through our JVs with various OEMs. We Packages and toolbox briefings to update staff on issues continue to equip ourselves with the skills and knowledge affecting them. During the year, we also launched a to maintain the newest aircraft types that our customers one-stop employee application to allow staff access to operate. corporate news and their personal records on-the-go. With the application, staff can now access the Company’s We maintain regular contact with our customers latest news and information on their mobile phones, as through visits, meetings, telephone calls, e-mails, tele- well as submit claims and leave applications. conferences and events such as international MRO shows and exhibitions. Customer satisfaction surveys are also carried out regularly. These surveys enable us to better understand our customers’ changing expectations.

SHAREHOLDERS We remain committed to the disclosure of material or price-sensitive information in a clear, detailed and timely manner. The Group’s quarterly, mid-year and full-year results are published through SGXNet, press releases and on our corporate website (www.siaec.com.sg). Our Annual Reports are also posted on the website.

The Company holds analyst briefings to present its CEO briefing staff at the Business Meeting mid-year and full-year results. At other times, meetings with analysts and investors are held to facilitate their An Organisational Climate Survey is conducted every two understanding of the Group’s business. The contact details years to gather staff feedback on employee engagement of the Investor Relations team are also available on our and workplace-related issues. The latest survey was website to enable investors to reach out to us. conducted in early 2019 and the results were analysed to guide action plans and measures – from the overall staff The Annual General Meetings and/or extraordinary engagement strategy at the Company level to specific general meetings are principal forums for dialogue with action plans at the divisional level. shareholders. Shareholders are encouraged to participate in these meetings to raise questions or seek clarification As our Transformation journey progresses, we regularly on the Group’s performance, and vote on resolutions update and engage our staff on the ongoing initiatives tabled at the meetings. The Chairman, Directors and via various channels. Besides an internal Transformation Management are present at the meetings to address website, email and intranet updates and posters, staff questions from shareholders. engagement sessions are conducted with Senior Management to allow staff to share their concerns For more details, please refer to pages 66 to 67 of the and provide suggestions. A quarterly pulse survey on Annual Report on Shareholder Rights, Communication Transformation is also conducted to solicit views from with Shareholders and Conduct of Shareholder Meetings. staff. To-date, three such surveys have been conducted. JV PARTNERS

CUSTOMERS REPORT 2018/19 ANNUAL Through collaborations with leading industry players and We understand our airline customers’ objective of keeping the formation of JVs, we have established a strong network their aircraft flying safely and work together with them to with major OEMs and strategic partners. Such relationships 21 SUSTAINABILITY REPORT

enable the JVs to leverage the joint strengths of our JV ECONOMIC 22 partners’ technical capabilities, and SIAEC’s extensive MRO experience and intimate understanding of airline Technology has disrupted and reshaped the MRO customers’ needs, to offer high quality and competitive landscape. With longer maintenance intervals and lighter maintenance solutions. work content of new-generation aircraft, coupled with keen competition, the operating environment is expected To optimise the benefits and returns from our investments to remain challenging in the near term. in the JVs, we actively track the performance of the JVs through our Partnership Management Division. This Our core competencies and wide portfolio of JVs allow us division acts as the liaison between the JV partners, to offer airline customers a comprehensive suite of MRO services. To strengthen our position as a leading MRO, the JV Management and SIAEC Management. Through Company has embarked on a Transformation journey to Partnership Management Division, we are in continual enhance productivity, streamline processes and increase engagement with the JV partners in the management SIA ENGINEERING COMPANY competitiveness. We will continue to invest and develop of the JVs, reviewing the performance, and identifying new capabilities for next-generation aircraft and engine business, commercial and marketing synergies to advance types, in addition to pursuing innovation and technology the growth of the JVs. initiatives. Strategic collaborations with OEMs and leading companies will remain a key thrust in growing our portfolio SUPPLIERS of partnerships across the various MRO business segments. SIAEC has an extensive pool of suppliers consisting of INVESTMENTS IN JVS OEMs, authorised distributors/repairers, and engineering spares and service providers. Majority of our suppliers are The Company has formed JVs with OEMs and airlines over based in Singapore, the USA and Europe. Major OEMs the years to enhance our service offerings to customers. include Airbus and Boeing who supply aircraft parts and Together with our network of JVs, we offer our customers tooling to support our MRO business. a comprehensive suite of services covering different geographical locations. We believe in long-term collaborative relationships with We are constantly reviewing our JV portfolio to ensure our suppliers who provide us with goods or services. a sustainable return on our investments. In FY2018/19, We also value them as our strategic partners and prefer we incorporated an additive manufacturing JV, Additive suppliers who are socially responsible. Flight Solutions Pte Ltd, formed with Stratasys Ltd. We also acquired the minority stake in Singapore Jamco Services Our environment, social and ethical requirements are set Pte Ltd, making it a wholly-owned subsidiary and renamed out in the Supplier Code of Conduct. Compliance with the company Singapore Aero Support Services Pte Ltd. In this policy is an essential component of all our quotations, the same financial year, we entered into a JV agreement tenders and agreements. Any suppliers who are found to with NokScoot Airlines to form a line maintenance JV be in breach of the policy must take prompt corrective based in Thailand, and divested our wholly-owned line actions or risk our termination of the contract. maintenance subsidiary in Australia, Aircraft Maintenance Services Australia Pty Ltd and our minority stake in Jamco Supplier risk assessments are conducted during the Singapore Pte Ltd. The foregoing activities are in line with selection phase to identify and mitigate sustainability risks our strategy to streamline and rationalise our business to focus on areas of high growth potential and competitive and impacts. A self-assessment questionnaire institutes a advantage. continuous effort to engage socially and environmentally responsible suppliers. TRANSFORMATION

Digitalisation plays an important role in supply chain The Transformation journey on which we have sustainability. We continue to explore data analytics tools embarked has been gaining momentum with the progressive implementation of initiatives covering a and online sourcing platforms to enhance the sourcing wide range of measures including resource optimisation, and supplier selection process. management systems, planning enhancement, supply chain improvement and digitalisation. At the same time, GOVERNANCE initiatives to strengthen organisation health are also being rolled out in phases. Progress has been achieved in the CORPORATE GOVERNANCE implementation of the high-impact initiatives in the major We believe that effective corporate governance and business units especially in heavy maintenance and line internal controls that are aligned with responsible and maintenance. sustainable methods increase the Company’s value. In the coming months, the Company will continue to drive Our Board and Management are committed to conducting the implementation of Transformation initiatives to bring our business ethically and responsibly. The focus of the about marked improvements in productivity, efficiency and governance framework is to promote accountability, value to our customers. transparency and sustainability. This is achieved through the composition of the Board and Board Committees, INNOVATION AND TECHNOLOGY clear division of powers and duties between the Board and Innovation is a key driver of the value propositions that we Management, adoption of checks and balances, internal continually develop and offer to our customers. In 2016, controls, sound corporate ethics, and risk management we announced that we are investing up to $50 million over practices across the Company and its subsidiaries. the next few years on innovation initiatives and technology adoption projects, with the support of the Economic The Board oversees the business and strategy of the Development Board. Company and provides guidance to Management, conferring with them regularly. The Board is supported by Over the last two years, we have collaborated with various Board Committees. technology partners, research institutions and OEMs to develop and introduce new technologies in key The Audit Committee oversees the adequacy and areas of additive manufacturing, automation & robotics, effectiveness of the Group’s system of internal controls data analytics and digitalisation, which are expected to and financial reporting. The Company’s internal control bring greater efficiencies and give us an edge over our structure consists of policies, procedures and processes competitors. established to provide reasonable assurance that transactions undertaken are aligned with the achievement Please refer to pages 14 to 15 of the Annual Report for of the Company’s objectives. A Control Self-Assessment more details of our innovation and technological initiatives. programme, established since FY2003/04, provides the framework for accountability among functional managers FINANCIAL RESILIENCE and staff, while internal audits provide independent and We are prudent in our approach to managing our finances objective assessments of the processes and controls which and financial risks, making calibrated adjustments to may have a material financial impact on the Company. changes in economic conditions as required, to sustain shareholder and market confidence. In managing the The Compensation & HR Committee oversees succession Company’s capital structure, our primary objective is planning of Key Executives, and all matters related to to maintain an appropriate capital base, while retaining executive compensation and benefits. It supervises the financial flexibility to pursue business opportunities and structure and levels of remuneration to attract, retain and ensure adequate access to liquidity to mitigate the effect of motivate key management personnel. An independent unforeseen events. consultant is engaged to provide guidance on market practices and benchmarks. For more details, please refer to pages 184 to 189 of the Annual Report on Financial Risk Management Objectives and Policies, and page 194 on Capital Management. ANNUAL REPORT 2018/19 ANNUAL

23 SUSTAINABILITY REPORT

BOARD EVALUATION AND DIVERSITY The Board Safety and Risk Committee assists the Board 24 The Board, through the Nominating Committee, has a in overseeing the adequacy and effectiveness of the formal process for assessing the effectiveness of the Board Group’s risk management framework and policies, with Committees and the Board as a whole, as well as the the objective of maintaining a sound system of risk contributions of the Chairman, Chairmen of all the Board management to safeguard shareholders’ interests and the Committees and individual Directors. For impartiality, the Group’s assets. process is managed by an external firm of consultants which has no connection with the Company or any of its Management is responsible for the effective implementation Directors. of the risk management strategy, policies and processes to facilitate the achievement of the Group’s business and Diversity is important to ensure that the profiles of Board strategic objectives. Key risks are proactively identified, members provide the necessary range of perspectives, addressed and reviewed in detail on an ongoing basis. experience and expertise required to achieve effective The Company has in place a continuous and iterative risk

SIA ENGINEERING COMPANY stewardship and management of the Company’s business. management process. Our diversity initiatives are designed to attract the most talented individuals as Directors, regardless of their race, The Risk Management framework is published on our ethnicity, nationality, sexual orientation, religion, age, website and further details can be found on pages 47 to 50 gender, disability status or any other dimension of diversity. of the Annual Report.

As part of the director nomination and selection process, ETHICS AND INTEGRITY the Nominating Committee considers diversity criteria, Ethics and integrity are critical to SIAEC’s long-term success. among other relevant criteria, when determining the Failure to adhere to laws and regulations may result in fines, optimum composition and balance of the Board. In penalties, or the revocation of our licences and/or other support of the specific objective of gender diversity, the regulatory approvals which may disrupt our operations. Nominating Committee ensures that appropriate efforts are made to include women in the list of candidates being The Company is committed to act lawfully and in considered for a Board position. On an annual basis, the accordance with high standards of integrity and ethics Committee assesses the effectiveness of the director in every aspect of its business. To this end, the Company nomination and selection process in terms of whether it has introduced a comprehensive set of policies, including meets the Company's commitment to Board diversity. without limitation, policies on Anti-Corruption/Bribery, Whistle-Blowing, Corporate Gifts, Employee Code of RISK MANAGEMENT Conduct and Supplier Code of Conduct, as part of Risk management is an integral part of our decision- its commitment to maintain a robust system of risk making process. Through a holistic approach to identifying management and internal controls. and managing risks, we instil effective risk ownership and management across all business units and support divisions. Policies are reviewed regularly and any introduction of new policies and/or revisions of existing policies are broadcasted The Board has overall responsibility for the governance via the Company’s intranet which is accessible to all of risk. Annually, the Board reviews the adequacy and employees. Policies applicable to the Company’s service effectiveness of the risk management and internal control providers, suppliers and other external stakeholders are systems, including financial, operational, compliance and incorporated as provisions in our agreements with external information technology risks. The Board, supported by parties, which can be found on our corporate website. the Board Committees, oversees the key risks of the Group’s business. ANTI-CORRUPTION/BRIBERY comprehensive policies on staff regulations and conduct, The Company has adopted a zero-tolerance policy ranging from harassment, reporting of wrongdoing, to towards bribery and corruption. Clear guidelines and anti-corruption and competition laws. A disciplinary inquiry procedures for the giving and receiving of corporate process is in place for the handling of misconduct and gifts and concessionary offers have been instituted. To all employees are made aware of the channels to raise ensure compliance, the Company has an online training concerns that they may have or for reporting of misconduct. programme on anti-corruption/bribery policies and requires SUPPLIER CODE OF CONDUCT employees that may be exposed to illegal and/or unethical influences to complete this online training regularly. Such We have adopted the following best practices with our recurrent training serves as a reminder to the employees suppliers: to maintain the highest standards of integrity in their work and business dealings with the Company’s stakeholders, Compliance with Applicable Laws and the completion rates are reported to the Management Through our procurement agreements, suppliers are Committee on a quarterly basis. obliged to commit and warrant that all products and services supplied to us are in compliance with applicable In FY2018/19, all employees who were assessed to have laws and regulations. exposure to illegal and/or unethical influences in the course of their working, ranging from junior administrative officers Anti-Corruption/Bribery Practices to Senior Management, based in our Singapore office or All purchase orders and agreements for goods and services seconded to our affiliated companies had completed this to the Company incorporate anti-corruption/bribery online training. In total, 511 employees were trained. Since 1 provisions. These provisions mandate that: (i) the supplier April 2019, the training has been extended to include a wider shall be compliant with the laws of the countries in which group of staff. they operate, (ii) the supplier warrants that it has not and shall not provide any favours, payments or other transfers In addition to regular training and education, the Company of value, directly or indirectly, to any government official has an established whistle-blowing programme for the or private person in order to influence any decision or act, reporting and investigation of wrongdoings. The programme or to secure any improper advantage, and (iii) acts which provides the means for internal and external stakeholders are contrary to the Company’s acceptable standards on to submit confidential feedback or raise concerns about ethics and integrity shall be disclosed to the Company possible improprieties in any matter. All whistle-blowing immediately. reports are reviewed by a Whistle-Blowing Committee and reported to the Audit Committee. Our internal processes Suppliers who participate in our requests for quotations ensure independent investigation of any reported incidents or tenders are expected to adopt our Supplier Code of and appropriate actions for follow up. Actions taken may Conduct. By accepting our purchase orders/agreements, include the termination of employment, and/or reporting to suppliers confirm that they will adopt the Supplier Code of the appropriate external authorities. Conduct. Suppliers’ subcontractors and service providers are also required to adhere to the principles set out under During the year, there was one incident of fraud discovered. the Supplier Code of Conduct. In addition, any instances of Following independent internal investigations, appropriate wrongdoing in the conduct and behaviour by the supplier actions were taken and reports had been made to the or the Company may be reported to, and investigated by, relevant authorities. the Audit Committee in accordance with the Company’s whistle-blowing programme. EMPLOYEE CODE OF CONDUCT The Company’s corporate governance report is set out in To foster high standards of professionalism and conduct in pages 41 to 85 of the Annual Report. our workforce, our Employee Code of Conduct provides ANNUAL REPORT 2018/19 ANNUAL

25 SUSTAINABILITY REPORT

SAFETY AVIATION SAFETY 26 There is no compromise on safety. Safety is of paramount importance to the continuing operations of our organisation. We uphold the highest standards of quality Passed 259 audits Received Gold Award and safety in aircraft maintenance to ensure that our by airworthiness at Changi Airport customers' aircraft are airworthy and safe for flight. authorities and Group Annual Airport customers Safety Awards 2018 Operating in a highly regulated industry, we are subject to regular audits conducted by airworthiness authorities and customer airlines in adherence to mandated standards of safety and quality. In FY2018/19, the Company successfully Safety is of utmost importance in our business and passed 108 audits by the authorities and 151 audits by operations. Our safety journey is one without a finish line. customers. We are committed to maintain a world class standard in SIA ENGINEERING COMPANY aviation safety, and continuously improve our workplace The Company holds certifications from 25 national safety and health standards within our organisation. We airworthiness authorities worldwide, including Singapore. work towards ensuring a safe work environment while providing high quality aviation engineering services to our WORKPLACE SAFETY customers through four key thrusts: Any staff injury will adversely affect our productivity, costs • Board and Management Emphasis and Oversight and staff morale. As such, we strive towards zero safety • Implementing a Well-Structured Safety Management incidents. We instil and promote safety consciousness System among our staff to prevent accidents and injuries, and • Training and Communication to Enhance Safety focus on safety as an essential part of all our operations. Awareness THRUST 1: BOARD AND MANAGEMENT EMPHASIS AND • Partnering our Stakeholders on Safety Ownership OVERSIGHT SIAEC’s safety governance structure covers the following three levels of safety management and oversight:

• Assists the Board in reviewing the safety and risk management framework and policies, and assessing its adequacy and effectiveness. • Oversees Management in ensuring that the Company has an effective safety BOARD management system that is compliant with regulatory requirements and best SAFETY AND practices in the MRO industry. RISK COMMITTEE • Monitors safety performance on a regular basis.

• Oversees the Safety Management System programme and provides leadership in the implementation of safety policy, requirements and SAFETY, HEALTH, initiatives. A review of the Safety Management System is conducted ENVIRONMENT AND annually to ensure that it remains relevant, adequate and effective. QUALITY COUNCIL • Reviews safety matters and performance to improve work practices and safety, as well as promote safety awareness within the Company.

• Each operational division has its own Safety, Health and Environment Committee to address aviation and workplace SAFETY, HEALTH AND ENVIRONMENT COMMITTEES safety issues and performance. • Reviews are conducted regularly by the various operational divisions. THRUST 2: SAFETY MANAGEMENT SYSTEM courses, each of them has been provided with our Safety The Company’s Safety Management System consists of an Handbook as part of the Company’s comprehensive safety integrated framework which focuses on effective safety awareness and knowledge development programme to management at the workplace and promoting safety engage and educate these stakeholders with the latest ownership within the workforce. The Management, in safety knowledge. All new employees and contractors will collaboration with the operational divisions and unions, have to undergo safety awareness trainings conducted by leads continual efforts to strengthen safety compliance qualified workplace safety and health officers before they and improve safety performance. can start work.

In upholding our priority on aircraft safety, the Company Performance Dialogue has implemented an Aviation Safety Management System In 2018, a performance dialogue framework was that meets the requirements set by the Civil Aviation introduced. The framework consists of a cascade of Authority of Singapore, and in accordance with the metrics and targets across all levels, from top-level International Civil Aviation Organisation’s standards and objectives down to the daily activities of the operational recommendations. staff. Leaders’ engagement is key to the success of our performance management system. Supervisory staff The Executive Vice President Operations is the continually monitor these metrics and regularly engage Accountable Manager for Aviation Safety at SIAEC. The with their teams to discuss the unit’s performance such Accountable Manager, supported by the Management, as cost, manpower and delivery, with emphasis on quality is responsible for ensuring an effective and functioning and safety. Performance dialogue cadence are constantly Aviation Safety Management System. reviewed, and they form part of the rhythm of everyday operations. The daily engagements improve staff morale To ensure that our operations are aligned with by providing clear visibility of progress in addressing internationally recognised standards of occupational health operational issues and feedback raised. and safety, our safety processes are accredited with OHSAS 18001 certification. Towing Simulator Training To enhance the quality and safety of training, the towing THRUST 3: TRAINING AND COMMUNICATION simulator was developed with over 80 scenarios to improve aircraft pushback and towing operations. It We believe that all staff must understand risks at the provides an immersive training experience by allowing staff workplace and partake in identifying them. The heightened to practice emergency scenarios in a risk-free environment situational awareness enables the workforce to provide and improves proficiency in handling contingencies. Since feedback on safety matters, making the work environment its commissioning in April 2017, over 1,100 staff have safe while maintaining operational performance. A undergone training in the towing simulator. In August confidential reporting channel is also available for staff to 2018, the simulator was upgraded to include: raise, in confidence, quality or safety concerns. Reports are followed up promptly to ensure that the issues are • Expansion of terrains to include engine run-up bays, adequate resolved. Changi Airport Terminals 3 and 4 • Configurable aircraft and obstacle layout to simulate Staff are kept abreast of the latest safety requirements, congested apron and hangar conditions inhouse rules and industry best practices, through regular • Additional emergency scenarios and comprehensive training. Through our safety training ANNUAL REPORT 2018/19 ANNUAL

27 SUSTAINABILITY REPORT

28 CHANGI AIRPORT GROUP ANNUAL AIRPORT SAFETY AWARDS 2018

The Changi Airport Group Annual Airport Safety Awards ceremony was held to recognise safety efforts of its staff and partners in the airport community. SIAEC was among the partners recognised in three of the awards during the event:

• SIAEC team was awarded with the Gold Award for enhancing safety and quality of towing training through the towing simulator. The towing simulator was developed with over 80 scenarios to improve SIA ENGINEERING COMPANY aircraft pushback and towing operations. It provides an immersive training experience by allowing staff to practice emergency scenarios in a risk-free environment and improves proficiency in handling contingencies. Our employee receiving the award at the Changi Airport Group Annual • SIAEC was recognised as one of the top contributors Safety Awards ceremony for airport safety hazard reporting. • SIAEC team was awarded the Best Safety Exhibitor Award.

Hazard Identification and Risk Assessment Hazard Identification and Risk Assessment (“HIRA”) is the ‘LOOK. THINK. DO.’ CAMPAIGN continuous identification, assessment and communication of inherent risks and hazards for both aviation and workplace The ‘Look. Think. Do’ Campaign was a safety safety. It includes the measures to minimise the probability programme launched in 2018. The programme and/or impact of undesirable consequences. To ensure emphasised the importance of staff to be vigilant of relevance, each HIRA document is reviewed periodically or the work surroundings and potential risks, and take when changes to the operational processes occur. steps to eliminate them before starting work. Posters focusing on different workplace safety hotspots were At SIAEC, we aim to anticipate and eliminate hazards in developed with the message ‘Look out for hazards. the workplace that may result in personal injury or illness Think of how you can protect yourself. Do your work and/or loss or damage to property and equipment. To safely.’ strengthen staff awareness on HIRA, a computer-based workplace safety training module has been included as a recurrent training.

Quality and Safety Symposium The Quality and Safety Symposium served as a forum to promote safety culture in SIAEC. The theme for 2018 Symposium was ‘Resilience in Operations’.

The seminar saw regulators, consultants and OEMs sharing their knowledge and good safety practices with staff. The symposium was participated by the Management and supervisory staff from the operational divisions. In addition, safety awards were also given out to staff who demonstrated good safety initiatives. FY2017/18. There were nofatalities inthepastthree years. quarterly. TheRARandRSRwere lowerinFY2018/19than ("RAR") andReportableSeverityRate ("RSR"), are reviewed and thetwokey indicators, ReportableAccidentRate are used tomeasure theeffectiveness of oursafety efforts, Both quantitative andqualitative performance indicators PERFORMANCE MEASUREMENT Celebration forachievingSmallWins safety milestone. and motivate staff tostrivetowards achievingthenext These SmallWinscelebrations serveasencouragement have participated intheirrespective divisionalcelebrations. incidents. Approximately 1,500staff across theCompany rewards whentheyachieveconsecutivemonthsof zero programme wasintroduced. Thedivisionswillreceive divisions toachievezero incidents,theSmallWins As aninitiative toencouragetheoperational andsupport Celebrating SmallWins–Zero Incidents communication, engagementandprogrammes. working withthevariousstakeholders through training, SIAEC strivestowards achievingsafety excellence by OWNERSHIP SAFETY THRUST 4:PARTNERING OURSTAKEHOLDERS ON (per millionman-hours) REPORTABLE RATE SEVERITY (per millionman-hours) REPORTABLE ACCIDENT RATE our efforts toimprove oursafety performance further. workforce were mainlycutsandfractures. We willcontinue 1.41 intheprevious year. Theinjuriesfor thiscategory of million man-hours)of 0.56, animprovement compared to abrasions. Ourcontractworkforce recorded aRAR(per The injurieswere mainlybruises,contusions,cutsand at 45.7 waslowerthantheprevious year’srate of 68.0. the yearbefore. However, theRSR(permillionman-hours) direct workforce was1.96, higherthantherate of 1.74 for In FY2018/19, theRAR(permillionman-hours)for our contractors andworkers from our laborsuppliers. latter refers toourcontractworkforce whichincludes The former refers toourdirect workforce whilethe employees andworkers (excluding employees)categories. Our safety performance isfurtheranalysedbasedon MC days No. of accidents per million man-hours per million man-hours 0 20.0 40.0 60.0 80.0 100.0 120.0 0 1.5 1.0 1.5 2.0 2.5 FY2016/17 FY2016/17 93.1 1.77 FY2017/18 FY2017/18 2.06 72.3 FY2018/19 FY2018/19 1.64 41.2 29 ANNUAL REPORT 2018/19 SUSTAINABILITY REPORT

EMPLOYEES (“SgIS”) programme, which was established in 2012 by 30 the Ministry of Education. SgIS is a platform for strong government-industry partnership in talent development, through the offering of scholarships to Singapore citizens Each Received employee at various stages of their undergraduate studies, locally $8.8M SkillsFuture underwent and overseas, who have demonstrated well-rounded invested in Employer an average excellence at school. 2018 marks the seventh consecutive staff training Award for of 45 hours year that SIAEC is participating in SgIS. Non-SMEs of training Through our scholarship programme and the Continuing Education Scheme, financial sponsorship is provided to staff who are keen to pursue higher educational Our staff are our biggest asset. Educating and motivating qualifications, including diplomas, bachelor and master’s

SIA ENGINEERING COMPANY our talented workforce is key to our Company’s growth degrees. During the year in review, 18 executives, and success. We firmly believe in actively engaging our engineers, technicians and clerical staff were awarded staff to perform to the best of their abilities and potential at sponsorships under these schemes. Currently, 45 staff are all times. pursuing their education under these schemes.

SIAEC employees are rewarded through fair and merit- In nurturing our leadership talents, we partner tertiary based employment practices, based on their abilities, education institutions to develop programmes for our performance, contribution and experience. We implement top executives and future leaders. These programmes practices which comply with all applicable labour laws equipped our senior executives with the necessary skills and other regulations governing our Singapore workforce. and knowledge required to navigate the competitive Beyond what is required from us by law, we constantly business environment and to ensure the Company's work to develop career opportunities for our employees continued success. Our Senior Management participates that simultaneously meet the Company’s talent needs. in strategy or leadership programmes at top business schools overseas. We strongly encourage an inclusive culture within our workforce, as it provides the best environment for All new staff in executive grades undergo the Onboarding every employee to achieve his or her full potential, both Programme, which provides them with a broad overview personally and professionally. The Company’s employment of the Company and the functions performed by each practices are built on the tenets of staff welfare, diversity division. In addition, they are placed under the Mentorship and positive partnerships with the unions. These collectively Scheme, which gives them a unique opportunity create a work environment where employees and their to engage with and learn from the knowledge and contributions are valued, as we work together as a team to experience of the Management. These engagement deliver high quality MRO services to our customers. sessions with mentors, who share their experience of our corporate culture, as well as their personal experiences TALENT ATTRACTION AND RETENTION and work values, help our new executives assimilate into our diverse workforce. Investing in our people is pivotal to the Company’s success as a global MRO player. We recognise the need to identify TRAINING AND DEVELOPMENT and attract the best talents, to build a sustainable pool of business and technical leaders - for now and the future. SIAEC is fully committed to developing our workforce and fostering a continuous learning culture. A highly skilled To attract the best talents to join our organisation, workforce is critical in ensuring that the Company is ready scholarships and internships are offered to outstanding to take on challenges and opportunities in this ever- students who have a passion to pursue a career in the changing business landscape – especially given the highly MRO industry through the Singapore-Industry Scholarship specialised, fast changing environment that we operate in and the need to always be on top of the latest regulations set change, cybersecurity, innovation, data analysis and and requirements. e-learning. As at 31 March 2019, 3,060 employees have attended this training course. We continually upgrade the skills of our engineers, technicians and support teams, equipping them with the relevant skill sets and knowledge to meet operational needs and be kept abreast of the latest technological SKILLSFUTURE EMPLOYER AWARD developments in the aviation industry. We are committed On 31 July 2018, SIAEC had the honour of receiving to providing equal opportunities and investing in our the SkillsFuture Employer Award for Non-SMEs from employees’ training and development based on their the President of the Republic of Singapore, who is strengths and needs to help them achieve their full potential. also the Patron of the SkillsFuture Employer Award, at the inaugural SkillsFuture Fellowships & SkillsFuture Our employees enjoy a wide range of well-structured Employer Awards ceremony. The SkillsFuture training and development programmes that help them Employer Award is Singapore’s highest skills award build their technical competencies and soft skills. Our that honours exemplary employers who have made full range of learning programmes are mapped to the significant investments for the development of Company’s core competencies and core values. They employees’ skills, and building an organisational include structured learning roadmaps which provide our culture that emphasises lifelong learning. staff with targeted and relevant learning opportunities at the appropriate time in their careers, and functional training programmes that equip our staff with the requisite knowledge and skills to succeed in their current roles. Learning needs and course syllabi are reviewed on a regular basis to ensure that the courses offered are current and relevant. Our staff are also provided with training opportunities such as learning and developmental programmes, on-the-job training and coaching, overseas postings and job rotations. We continuously seek new tools and technologies to aid learning and drive a culture of self-directed learning within the Company. Our target is Award recipients of the SkillsFuture Fellowships & SkillsFuture to maintain an average 34 training hours per employee. Employer Awards 2018 with the President of the Republic of Singapore; and Patron of the SkillsFuture Employer Award, Madam Halimah Yacob; Minister for Education, Mr Ong Ye Kung; and Senior Minister of State for Education, Mr Chee Hong Tat Training Highlights FY2018/19 Amount invested on staff training $8.8M

Total training days 28,720 Training Academy - Technical training 20,978 SIAEC’s Training Academy provides a robust curriculum - Development and soft skills training 7,742 of aerospace-related training programmes to meet the training needs of our employees, and those of our JVs Average training hours 45 hours and strategic customers/partners. Our Training Academy - Technical staff 46 hours is committed to be a valuable business partner to - Support staff 42 hours organisations within the aerospace industry, as well as facilitating the professional growth and development of industry personnel. It is an approved Maintenance Training In 2017, we became one of the early adopters of the Organisation by civil aviation authorities and recognised by SkillsFuture for Digital Workplace programme, which is a the Singapore Workforce Development Agency. national initiative developed by SkillsFuture Singapore to equip our workforce with the foundational digital literacy To support the growing demand for qualified and skilled skills in preparation for the future economy. Through this technical personnel in the aerospace industry, the Training REPORT 2018/19 ANNUAL training programme, our employees learn about mind- Academy aims to be a centre of excellence for aerospace

31 SUSTAINABILITY REPORT

training and solutions. Supported by SIAEC's rich heritage generation of skilled aviation workers a head start in 32 and experience as a leader in MRO, our portfolio of acquiring aircraft maintenance licences. We partnered training programmes was developed by a team of qualified Singapore Institute of Technology (“SIT”) in the and experienced instructors and delivered via various development and launch of their new three-year degree methodologies including classroom training, practical programme, the Bachelor of Engineering with Honours training and e-learning. in Aircraft Systems Engineering. With the launch of this programme, aspiring trainees will be able to fast-track We continue to upskill our licensed aircraft engineers the 44-month apprenticeship programme and acquire and technicians through regularly-scheduled aircraft their licences within 28 months. The curriculum is type courses, to service the new generation aircraft types jointly delivered by SIT lecturers and Training Academy’s which our customers operate. The Academy utilises the instructors. The first batch of 48 undergraduates had latest training devices and courseware from Airbus and commenced their course in 2018. Boeing to develop new competencies among our staff,

SIA ENGINEERING COMPANY thereby maximising their potential and helping them realise Tapping our experience as a training organisation, SIAEC exciting career opportunities. and Temasek Polytechnic have been appointed as the Programme Manager for the Aerospace Professional Conversion Programme by Workforce Singapore. This is a placement programme targeted at Professionals, Managers, Executives and Technicians (“PMETs”) which aims to facilitate transition into new occupations by re- skilling PMETs for new job roles in fleet planning, quality assurance, technical servicing, workshop engineering and cabin retrofitting works.

DIVERSE WORKFORCE We strive to be a good employer by promoting an environment in which all employees are treated fairly and with respect, and can realise their full potential. We value the loyalty and dedication of our long-serving staff, as they contribute positively to the wealth of experience of Staff attending classroom training our multi-generation workforce. In recognition of their dedication and contribution to the Company, long service To sustain the proficiency of critical skill sets in our award ceremonies are held regularly. Since January 2017, workforce, the Academy implements a recurrent training we have been re-employing employees beyond the age curriculum to ensure that all our staff remain up to date in of 65, ahead of the legislation that came into effect on 1 knowledge and skills. In FY2018/19, 516 of our engineers July 2017. and technicians successfully completed aircraft type training for a variety of aircraft and engines, including new- generation aircraft such as Boeing 787 and .

Under the Technician Development Scheme, our operationally-experienced technicians are given the opportunity to undergo training to become certifying technicians. This provides a career progression path for our technicians while simultaneously increases the productivity of our technician workforce.

Beyond enhancing the competency of its staff, the Company seeks to impart knowledge in aircraft maintenance at foundational level to to give new Long Service Awards Ceremony 2018 TOTAL STAFF STRENGTH Employee Turnover by Age Group (as at at 31 March 2019) Age Group Total Turnover % 4,540 Below 30 45 10.4 30 to 50 83 3.2 Breakdown of Employees by Gender Above 50 8 0.5 Total 136 3.0

89% 11% NEW HIRES Males Females Breakdown of New Hires by Gender

Gender Total % Permanent Employees Contract Employees by Gender by Gender Female 46 26 Male 128 74

11% 7% Total 174 100

Breakdown of New Hires by Age Group

Age Group Total %

89% 93% Below 30 125 72 30 to 50 47 27 Above 50 2 1 Female Male Total 174 100

Breakdown Breakdown by Age Group by Employment Type We believe in gender diversity and actively promote higher female representation within our workforce. Against the backdrop of the MRO Industry and the larger engineering 10% 5% disciplines which are typically male-dominated, it 33% continues to be challenging to attract a higher intake of female engineers and technicians.

PERFORMANCE REVIEW 57% 95% We believe that recognising and valuing the good work of our staff motivates them and contributes to our success. Performance reviews and dialogues are conducted Age <30 Permanent regularly so that employees and their supervisors can have Age 30-50 Contract Age >50 a two-way feedback forum and jointly set expectations for continued job performance. In April 2018, a new performance management system was implemented. EMPLOYEE TURNOVER* This new system focuses on goal alignment and ongoing feedback, and empowers employees to take charge of Employee Turnover by Gender their own development.

Gender Total Turnover %

Beyond performance reviews, the Company has initiatives REPORT 2018/19 ANNUAL Female 40 8.1 such as the Operational Excellence Framework and the Male 96 2.4 Star Employee Awards to recognise and reward good Total 136 3.0 performance. 33 *Note: Refers to resignation only. SUSTAINABILITY REPORT

INDUSTRIAL RELATIONS STAFF WELFARE 34 Good industrial relations is key to the continued success of Staff Well-Being and Health Initiatives the Company. The Company maintains cordial relations by A healthy workforce is crucial in supporting the Company’s working closely with our union partners to ensure that fair growth and performance. We regularly organise health and sustainable wage and employment terms are provided talks and exercise activities, and provide tips on healthy to our staff. We value our strong ties with our union living in our inhouse magazine, to encourage staff to partners, and are committed to working together with the pursue a healthy lifestyle. unions to resolve issues, seize business opportunities and meet new challenges through a collaborative approach. We encourage our staff to take an active ownership of their own well-being. The Company provides staff with comprehensive medical coverage. We conduct regular reviews and surveillance inspections of the work OUR UNION PARTNERS environment as part of our ongoing efforts to improve

SIA ENGINEERING COMPANY Air Transport Executive Staff Union (“AESU”) workplace safety and health. The occupational health of • Represents staff in the executive grades in the our staff are also monitored closely through the relevant Company medical examinations such as audiometry examinations, to • About 73% of the Company’s executives are ensure their well-being. members of AESU Pro-Family Staff Benefits SIA Engineering Company Engineers and Executives The Company strongly supports Singapore government's Union (“SEEU”) pro-family initiatives. We understand the need for working • Represents the licensed aircraft engineers in the parents to be able to spend quality time with their children Company while they pursue their careers. As such, we provide • About 96% of our engineers are members of SEEU benefits which are aligned with Singapore’s pro-family legislation and initiatives such as childcare leave, extended Singapore Airlines Staff Union (“SIASU”) childcare leave, maternity leave, paternity leave and shared • Represents technicians and staff in the general parental leave. In 2019, we introduced a flexible work grades in the Company arrangement scheme for non-shift employees where they • About 95% of our technicians and clerical staff are can opt to start work earlier or later. members of SIASU Sports & Recreation Committee The Sports & Recreation Committee was founded to Collective Agreements are in place for each of these promote, organise and co-ordinate sports, social and other unions and in total, about 92% of the Company’s executive recreational activities for employees of the Company. employees, engineers, technicians and general staff Sports & social events and activities which cater to staffs’ are covered by these Collective Agreements. Labour interests are organised frequently. The activities include grievance mechanisms and notice periods to commence interdivisional sports competitions, special workshops negotiations are detailed in all our Collective Agreements. such as floral display, and excursions such as kayaking and All labour practices relating to child labour, forced or overseas hiking trips. compulsory labour, human rights grievance mechanisms, diversity and equal opportunity are carried out in accordance with the Employment Act and other laws governing Singapore.

We actively involve our unions in matters relating to our employees through regular union engagement activities and discussions. Monthly meetings are held to update our union partners on developments in the industry, discuss labour-management issues and share updates on the Company’s initiatives. Senior Management and union leaders meet regularly to share the Company’s business outlook and discuss workforce-related matters. Some of the activities organised by the Sports & Recreation Committee ENVIRONMENT and offices. Any disruption to electricity supply will jeopardise our operations. As the amount of electricity We believe that SIAEC needs to play its part to protect the consumed impacts the environment, proper energy environment even though our operations, unlike heavy management control and measures can reduce energy industries, do not produce significant carbon emissions or wastage. consume high amount of electricity and water. The Company is committed to monitoring and reducing ENVIRONMENTAL POLICY the electricity consumption throughout the organisation in order to enhance long-term business competitiveness and We believe in operating responsibly by understanding to reduce carbon footprint. and managing the environmental impact of our business. We have a responsibility to protect the environment An Energy Management Committee, comprising the and are committed to maintaining high standards of Facilities Department and our building contractor, actively environmental management in our operations, and drives energy management programmes to control complying with environmental rules and regulations energy consumption and to avoid wastages. Areas with governing our business. high electricity consumption are identified, and solutions formulated to reduce usage. The energy data are reviewed Our environmental policy is communicated across regularly and any significant deviations will be identified, our business units and support divisions to propagate investigated and remedied. On a quarterly basis, the environmental awareness to all persons working for and on Management is updated on the consumption trends. behalf of the Company. All proposed projects are discussed with the Management, ENVIRONMENTAL MANAGEMENT SYSTEM and approvals are sought before commencement. Once The Company’s Environmental Management System the projects are implemented, the data are collected focuses on minimising the impact that our operational and checked against the design data, and the results are activities may have on the environment. Our Environmental reported to the Management. Management System has been certified to ISO 14001 standards since 1998. SIAEC TOTAL ELECTRICITY CONSUMPTION FOR HANGAR 1 TO 6 (kWH) Environmental impacts are assessed as early as the planning stage where the design, handling, storage 25 24.70 24.87 and disposal of materials are considered. Thereafter, the product operation and service performance are 24 23.71 23.33 regularly reviewed for improvements in the environmental 23.05 23 performance. 22.30 22 The Company maintains a stringent auditing system for all

(kWH) Millions 21 environmental matters, comprising internal environmental

audits and inspections performed by the divisional Electricity Consumption 20 Safety, Health and Environment Committees. To ensure FY13/14 FY14/15 FY15/16 FY16/17 FY17/18 FY18/19 continuous and effective operation of the Environmental Management System, a two-fold check system involving both internal and external audits is implemented. This Our goal is to achieve 15% reduction in energy ensures strict compliance with the applicable legislation consumption by FY2023/24 compared to base year and regulations. FY2013/14. We will continue to monitor energy consumption, address significant deviations and ENERGY implement energy-saving measures. Where possible, we The Company's main utility usage is the electricity used to will tap the application of innovative technologies as part carry out daily MRO activities in the hangars, workshops of our efforts to reduce energy consumption. REPORT 2018/19 ANNUAL

35 SUSTAINABILITY REPORT

Another project being explored is the installation of solar 36 panels on the roofs of buildings and hangars, which will be able to supply clean energy for our operations and reduce our energy consumption from non-renewable sources.

EMISSIONS In line with the global movement to combat climate change, Singapore is implementing carbon tax from 2019. Playing our part to support the environmental efforts, we endeavour to manage Greenhouse Gas (“GHG”) emissions produced from our MRO operations. We focused on sourcing and using environmentally preferred chemicals and processes to minimise emissions. On top of that,

SIA ENGINEERING COMPANY Hangar bay lights (LED) emission levels are closely monitored to ensure that they are within thresholds set by the authorities.

Since FY2013/14, we have replaced air-conditioning chillers Transport vehicles undergo regular maintenance and in two of the hangars with energy-efficient systems. We inspections to minimise air pollution from vehicular plan to install variable speed drives for the air-conditioning emissions. All vehicles operated by the Company comply chillers for the other hangars, which will further improve with the regulations and requirements, including smoke the energy efficiency of the systems. Plans are underway emissions and fuel usage restriction, of the Land Transport to progressively replace office lightings, hangar bay lights Authority and National Environment Agency. We aim to and building neon signs with Light-Emitting Diode ("LED") reduce our carbon emissions through pursuing initiatives lights. to reduce our electricity consumption and using vehicles that meet low GHG emissions standards.

DIRECT EMISSIONS & INDIRECT EMISSIONS (KG-CO2E)

TOTAL CARBON FOOTPRINT (kg-CO2e)

40 32.14 35 31.27 30.40 35 27.89 30 26.19 26.22 30 15.93 25 16.06 25 15.14 20 14.73 14.48 20 14.73

e (Millions) Carbon Emissions From 2 e/$mil (Revenue)

15 2 Electricity Used 15 Carbon Emissions From Carbon Emissions Kg CO 21.94 10 Fossil Fuel 10 18.98 18.69 Carbon Emissions

16.06 Carbon Emissions Intensity Intensity 13.94 14.36 5 CO Tonnes 5

0 0 FY13/14 FY14/15 FY15/16 FY16/17 FY17/18 FY18/19 TRADE EFFLUENTS MANAGEMENT team tracks the water consumption data regularly. Any unusual increase in water usage will be investigated and As part of the Environmental Management System Policy remedied. We will continue to monitor water consumption in preventing pollution under ISO14001, SIAEC is focused closely and implement water-saving measures. on effluents management, particularly in preventing water pollution from the wastewater generated from our operations. Our hangar facilities are equipped with wastewater treatment plants using chemical treatment SUPPORTING OUR COMMUNITIES process. The wastewater undergoes a chemical treatment process to make them safe for discharge into the public sewers. Received Charity Annual charity run Bronze Award from Regular audits and inspections are carried out to ensure raised $53,755 for our Community Chest for that the wastewater discharge and operation of wastewater charity beneficiaries the third consecutive treatment plants comply with relevant regulatory and year ISO14001 requirements. The water from our wastewater treatment plants is rigorously monitored to ensure strict compliance with the standards prescribed by the Public Utilities Board under the Sewerage & Drainage (Trade In the spirit of our corporate social responsibility (“CSR”) Effluent) regulations. motto of ‘Enabling People, Improving Lives’, we strive to make a difference to the lives of the underprivileged in the WASTE MANAGEMENT communities where our business operates. We provide food and housing aid to communities in Singapore and The Company pays close attention to waste management. Southeast Asia through our partnerships with organisations We aim to reduce waste from our offices and operational such as Food from the Heart, Community Chest and activities. Promotion and facilitation of waste reduction are Habitat for Humanity. conducted through new and ongoing efforts to reduce, reuse and where possible, recycle. We actively encourage The CSR programmes and activities conducted in initiatives from all operational and support divisions to FY2018/19 include the following: explore ways to reduce waste generation across the Company and educate staff in recycling. Fun Run at the Zoo 2018 SIAEC’s annual charity run ‘Fun Run @ Zoo 2018’ was held A recycling scheme is in place to recycle paper, cardboard, on 10 November 2018 at the Singapore Zoo. Attended by scrap metal and electronic waste from our offices SIAEC staff and their families, our charity beneficiaries, JV and operations. We engage licensed recycling service partners and the SIA Group of companies, the event drew providers to collect our recyclable materials to ensure a participation of over 2,500 registrants. The charity run they are recycled safely at proper recycling facilities. In raised a total of $53,755 which was donated to Food from preparation for a mandatory electrical and electronic the Heart. waste management system announced by the Ministry of Environment and Water Resources, the Company will actively educate and raise staff awareness in the recycling of e-waste.

A waste sorting and disposal process, as well as a contamination prevention process managed by a licensed toxic industrial waste collector, is applied to operational activities and involves the storage, transportation and disposal of aircraft parts and toxic industrial waste to minimise environmental impacts. ANNUAL REPORT 2018/19 ANNUAL WATER CONSERVATION Although our water consumption is not significant compared to the manufacturing industry, we promote 37 discipline in water usage and our facilities maintenance CEO flagging off the run at ‘Fun Run @ Zoo 2018' SUSTAINABILITY REPORT

Food Goodie Bags Programme 38 Every month, the Company supplies food provisions to 100 COMMUNITY CHEST AWARDS 2018 underprivileged families from two adopted schools – Yu Neng Primary School and Changkat Primary School. The Community Chest Singapore is in its 35th year and goodie bags consist of household items like rice, oil and supports about 80 social service organisations. SIAEC baked beans to help needy families with their meals. is proud to be a recipient of the Community Chest’s Charity Bronze Award for the third consecutive year. Self-Collection Centre Programme The Charity Awards are given to organisations and/or In collaboration with Food from the Heart, 150 staff individuals who have made significant donations. volunteers participate in the monthly packing and distribution of food packets to 550 beneficiaries in 188 households in Macpherson and Marine Terrace.

SIA ENGINEERING COMPANY Housing Construction in Indonesia In partnership with Habitat for Humanity, the Company sent a team of staff volunteers for overseas building project in Yogyakarta, Indonesia in November 2018. This outreach project enabled volunteers to improve the living conditions of the less fortunate by building houses for them.

SVPHR receiving the award from the Minister of State in the Ministry of Foreign Affairs and Ministry of Social and Family Development, Mr Sam Tan, at the Community Chest Awards 2018

House-building in Yogyakarta, Indonesia

Toy Buffet On 10 November 2018, we participated in the Toy Buffet organised by Food from the Heart for the seventh year running at Nanyang Polytechnic. The annual event’s mission is to reach out and bring joy to children from lower-income families through the gifting of toys. Pre- loved and new toys collected from our staff and other organisations were distributed to 2,900 underprivileged families.

Visit to S.E.A. Aquarium On 22 September 2018, a group of SIAEC staff brought 30 students from Yu Neng Primary School to the S.E.A. Aquarium at Resorts World Sentosa. The students from Primary 3 and 4 are the beneficiaries of our charity partner, Food from the Heart. GRI Standards Disclosure Page Reference and Remarks GENERAL DISCLOSURES Organisational Profile 102-1 Name of the organisation About SIA Engineering Company 102-2 Activities, brands, products and services About SIA Engineering Company 102-3 Location of headquarters About SIA Engineering Company 102-4 Location of operations About SIA Engineering Company 102-5 Ownership and legal form About SIA Engineering Company 102-6 Markets served About SIA Engineering Company 102-7 Scale of the organisation About SIA Engineering Company Reporting Scope and Boundary Diverse Workforce 102-8 Information on employees and other workers Diverse Workforce 102-9 Supply chain Suppliers 102-10 Significant changes to the organisation and its Suppliers supply chain Investments in JVs 102-11 Precautionary Principle or approach Risk Management 102-12 External initiatives Safety Management System Environmental Management System 102-13 Membership of associations Membership of Associations Strategy 102-14 Statement from senior decision-maker CEO's Message Ethics and Integrity 102-16 Values, principles, standards and norms of Mission Statement, Core Values, behavior Corporate Governance Governance 102-18 Governance structure Sustainability Organisational Structure Stakeholder Engagement 102-40 List of stakeholder groups Engaging our Stakeholders 102-41 Collective bargaining agreements Industrial Relations 102-42 Identifying and selecting stakeholders Materiality Assessment 102-43 Approach to stakeholder engagement Engaging our Stakeholders 102-44 Key topics and concerns raised Engaging our Stakeholders Reporting Practice 102-45 Entities included in the consolidated financial Reporting Scope and Boundary statements 102-46 Defining report content and topic Boundaries Reporting Scope and Boundary Materiality Assessment 102-47 List of material topics Materiality Assessment 102-48 Restatement of information No restatements were made for FY2018/19 102-50 Reporting period About this Report

102-51 Date of most recent report The previous report was published together with the REPORT 2018/19 ANNUAL Annual Report FY2017/18 102-52 Reporting cycle Annual 102-53 Contact point for questions regarding the report Feedback 39 SUSTAINABILITY REPORT

GRI Standards Disclosure Page Reference and Remarks 40 GENERAL DISCLOSURES Reporting Practice 102-54 Claims of reporting in accordance with the GRI This material references the following Disclosures from Standards GRI Standards 2016: • 205-3 from GRI 205: Anti-corruption • 302-1 from GRI 302: Energy • 305-4 from GRI 305: Emissions • 401-1 from GRI 401: Employment • 402-1 from GRI 402: Labour/Management Relations • 403-2 from GRI 403: Occupational Health and Safety • 404-1 from GRI 404: Training and Education

SIA ENGINEERING COMPANY • 103-1, 103-2 and 103-3 from GRI 103: Management Approach 2016 102-55 GRI content index GRI Content Index 102-56 External assurance About this Report MATERIAL TOPICS Anti-Corruption/Bribery 103-1 to -3 Management approach 2016 Ethics and Integrity Anti-Corruption/Bribery Employee and Supplier Code of Conduct 205-3 Confirmed incidents of corruption and actions taken Anti-Corruption/Bribery Energy 103-1 to -3 Management approach 2016 Environmental Management System Energy 302-1 Energy consumption within the organisation Energy Emissions 103-1 to -3 Management approach 2016 Environmental Management System Emissions 305-4 GHG emissions intensity Emissions Employment 103-1 to -3 Management approach 2016 Employees 401-1 New employee hires and employee turnover Diverse Workforce Labour/Management Relations 103-1 to -3 Management approach 2016 Industrial Relations 402-1 Minimum notice periods regarding operational change Industrial Relations Workplace Safety 103-1 to -3 Management approach 2016 Workplace Safety Board and Management Emphasis and Oversight Safety Management System Training and Communication Partnering our Stakeholders on Safety Ownership 403-2 Types of injury and rates of injury, occupational Performance Measurement diseases, lost days, absenteeism and number of work-related fatalities Training and Development 103-1 to -3 Management approach 2016 Training and Development 404-1 Average hours of training per year per employee Training and Development and Management. matters discussedat eachBoard Committeemeeting. There isacleardemarcation of responsibilities betweentheBoard and there isanequitabledistributionof responsibilities amongCommitteemembers.TheBoard isinformed of thekey policies andthetolerancelevelsof risks. EachCommitteecomprises Directors withappropriate qualifications andskills Nominating CommitteeworkwithintheCompany’sriskmanagementframework,whichsetsout and theCode.TheAuditCommittee,Board Safety &RiskCommittee,theCompensation &HRCommitteeandthe matters underitspurview, includingrequirements undertherulesof theListingManualof theSGX-ST (the“Listing Manual”) Each Board Committeeisresponsible for ensuringcompliancewithlegislative andregulatory requirements inrelation to constituted withwrittentermsof reference, definingthedutiesdelegated toitbythe Board andotherprocedural matters. Safety &Risk Committee,theCompensation &HRCommittee,theNominating CommitteeandtheBoard Committee,each In the discharge of its duties, the Board is supported by five Board Committees, namely the Audit Committee, the Board shareholders. TheCompany’spoliciesandguidelinesare regularly reviewed andupdated. Specific approval issoughtfrom theBoard for matters involvingshare issuances,interimdividendsandother returns to Directors Policywhichsetsout,interalia,Directors’ disclosure obligations intheeventof aDirector’s conflict of interest. annually bytheshareholders of theCompany).TheCompanyhasalsoestablishedaDisclosure of Conflicts of Interests by (which are in line with the threshold limits for the review and approval procedures underthegeneralmandate renewed procurement of goodsandservices,material acquisitionanddisposalof assets,andmandated interested persontransactions The Company has establishedfinancial authorisation andapproval limits for operating and capital expenditure, the long-term successionplanningof Key Executives asanongoingprocess. proposals andmajortransactions.TheBoard alsooverseestheCompany’scurrent Transformation initiatives, aswell management, workplace safety, financial reporting and performance, annual budgets, key operational initiatives, investment importance, bestpracticesincorporate governance,legalandregulatory compliance,theadequacyof internalcontrols, risk and Board Committeeshave writtenguidelinesonmatters requiring theirapproval, whichincludeallmatters of strategic There is an objectivedecision-makingprocess, whichallowseachDirector toexercise independent judgment.TheBoard The Board overseesthebusinessof theCompanyandprovides stewardship toManagement,conferring withthemregularly. (Principle 1) THE ROLE OFTHEBOARD ANDCONDUCT OFITSAFFAIRS from the Code,theseare explainedundertherelevant sectionsof thisreport. issued bytheSingapore Exchange SecuritiesTrading Limited(the“SGX-ST”) on29January2015.Where there are departures Code andhastaken intoaccount,where relevant, theguidanceprovided bytheDisclosure Guideoncorporate governance of Singapore (the“Code”). The Company has complied in allmaterial aspectswiththeprinciplesandguidelinessetoutin 31 March 2019(“FY2018/19”) withreference totheCodeof Corporate Governance2012issuedbytheMonetaryAuthority This report describes the Company’s corporate governance processes, practices and activities for the financial year ended with theseprinciples. defined corporate governanceprinciplesandmaintainingeffective structures and processes withinthe Group forcompliance The Board and Management are committed to sustaining value creation for all stakeholders by adhering toasetof well- measures oninternalcontrol, andsoundcorporate ethicsacross theCompanyanditssubsidiaries(the“Group”). Committees, divisionof powersanddutiesbetweentheBoard andManagement,adoptionof checks andbalances,relevant to promote, interalia,accountabilityandtransparency. Theseare manifested inthecompositionof theBoard andBoard well-managed organisation. Thefocus of thegovernanceframework,formulated ontheCompany’svisionandmission,is SIA EngineeringCompanyLimited(the“Company” or“SIAEC”) viewsgoodcorporate governancetobethehallmarkof a CORPORATE GOVERNANCE 41 ANNUAL REPORT 2018/19 42 SIA ENGINEERING COMPANY • • • • • Anti-bribery • • • In FY2018/19,theDirectors attended trainingonsubjectsthat include: and developmentprogrammes for existingandnewDirectors. There isaformal record of attendance at trainingsessions. of Directors andtheDirectors participate insuchprogrammes asandwhenneeded.TheCompanyfundsrelevant training SGX-ST. TheNominating Committeealsoidentifies relevant traininganddevelopmentprogrammes for theconsideration listed on the SGX-ST will be required to undergo mandatory training in his/her roles and responsibilities as prescribed by the he/she hasotherrelevant experience,anewDirector appointedwhohasnopriorexperienceasadirector of anissuer With effect from 1January2019,unlesstheNominating Committeeis of theviewthat trainingisnot required because processes andbestpracticesincorporate governance. inter alia,theirdutiesandobligations underprevailing rulesandregulations inSingapore, andtheCompany’skey policies, The Company’sinternally-developed“Director’s Handbook”provides newandexistingDirectors withaneasyreference on, key jointventure facilities inSingapore. businesses, operations, strategic plansandnetworkof jointventures, andundertake atour of theCompany’soperations and appointees undergo anorientation programme, withcomprehensive presentations byManagementontheGroup’s core A formal letterof appointmentissenttoanincomingDirector, settingouthis/herkey dutiesandresponsibilities. New Orientation andTraining ofDirectors the strategy proposals toachievetheiragreed goalsandobjectives. further developedbyManagementanddiscussedat subsequentBoard meetings,whentheBoard reviews theprogress of location tofamiliariseDirectors withtheGroup’s off-shore operations. Proposals considered at thestrategy meetings are Company’s strategic initiatives overthenearandlongterm.Strategy meetingsare heldinSingapore orat anoverseas In additiontothescheduledBoard meetings,Directors attend anannual strategy meetingtodiscussandprioritisethe Committees’ decision-making. review andapproval. Participation bytelephoneconferencing andapproval bycirculation alsofacilitate Board andBoard and decisions taken, are maintained by the Company Secretary and the minutes of meetings are circulated to Directors for Additional meetingsare convenedasandwhencircumstances warrant.Records of meetings,includingkey deliberations financial yearare fixed inadvanceandnotifiedtothe Directors before thestart oftheyeartofacilitate full attendance. to develop constructive proposals on strategy and reviewed the completion of agreed goals. Board meeting dates for each Independent Directors. InFY2018/19,there were elevenNon-Executive Directors, allof whomworked withManagement Independent Directors twiceyearlyintheabsenceof Management,theChiefExecutive Officer (“CEO”) andtheNon- The Board meetsquarterlytoreview andapprove, interalia,thefinancial results of theGroup. TheChairmanmeetsthe CORPORATE GOVERNANCE Digital strategy –operating andorganisational models Disruptive technologies Digitalisation andbusinesstransformation Markets andmacroeconomics trends andupdates Corporate governanceandethics Investments andinnovation Technological advancements onbusinessprocesses andjobdisruption

below: The current compositionof theBoard andBoard Committees,andattendance at meetingsheldinFY2018/19are asshown (Principles 2&4) ANDMEMBERSHIP BOARD COMPOSITION, BALANCE CORPORATE GOVERNANCE (iii) (ii) (i) Notes: (last re-appointed on Goh ChoonPhong FY2018/19 Meetings HeldIn Total Numberof 1 Apr2013) first appointedon 19 Jul2018, (last re-appointed on Manohar Khiatani 18 Jul2008) first appointedon 20 Jul2017, (last re-appointed on Ng ChinHwee 1 Jan2011) first appointedon 19 Jul2018, 8 May2017) first appointedon 20 Jul2017, (last re-appointed on Tang KinFei on 19Jul2018) Chairman andDirector stepped downas appointments and all Committee (relinquished Stephen LeeChingYen (last re-appointed on Raj Thampuran 1 Jan2014) first appointedon 20 Jul2017, (last re-appointed on Fong (ChristinaOng) Christina HonKwee 1 May2013) first appointedon 19 Jul2018, Name (first appointedon Chin Yau Seng 8 May2017) first appointedon 20 Jul2017, (last re-appointed on Wee SiewKim 1 Sep2016) first appointedon 20 Jul2017, Png KimChiang 8 Oct2018) Director on1Jun2018) stepped downas appointments and all Committee (relinquished Tong ChongHeong 1 Nov2016) first appointedon 20 Jul2017, (last re-appointed on (last re-appointed on Chew Teck Soon Mr PngKimChiangistheChiefExecutive Officer oftheCompany. The Board Committee does notholdphysicalmeetings. “Att.” refers tothenumberof Board andBoard Committeemeetingsattended bytherespective Directors for theperiodservedinFY2018/19. (iii)

Independent Non-Executive / Non-Independent Non-Executive / Non-Independent Non-Executive / Independent Non-Executive / Non-Independent Non-Executive / Independent Non-Executive / Independent Non-Executive / Status Independent Non-Executive / Independent Non-Executive / Non-Independent Non-Executive / Non-Independent Non-Executive / Non-Independent Executive / Main Board Member Member Member 2018) (wef 19Jul Chairman 2018) (until 19Jul Chairman Deputy Chairman Member Member Position Member Member Member Member Member 5 5/5 5/5 5/5 5/5 1/1 1/1 5/5 5/5 Att. 5/5 5/5 2/2 5/5 (i) 2018) 19 Jul Position Member down on (stepped Member Member Chairman Member Member Audit Committee

4 2/2 Att. 3/4 3/4 4/4 3/4 2/2 (i) Position Member Chairman Member Nominating Committee Att. 3 3/3 3/3 3/3 (i) 2018) (wef 19Jul Position Member Chairman Member Chairman Member Compensation & HR Committee

2/2 Att. 4 2/2 4/4 2/2 3/4 (i)

2018) on 19Jul (stepped down Member Chairman Member Chairman Member Position 1 Jun2018) Member (until 2018) (wef 1Jun Risk Committee Board Safety &

2/2 4 1/1 4/4 4/4 Att. 4/4

(i) Committee (wef 19Jul Member Member Member Position Board 2018)

(ii) 43 ANNUAL REPORT 2018/19 44 SIA ENGINEERING COMPANY relation totheIndependentDirectors. to benotindependent,orimpairaDirector’s independenceandobjectivity, andissatisfied that none of themapplyin The Board hasexaminedthedifferent relationships identifiedbytheListingManualandCode that mightdeemaDirector continuous periodof more thannineyears. the ListingManualandCode,basedoneachDirector’s declaration. Noneof theIndependentDirectors hasservedfor a appointment, annually, andonacontinuing basisasandwhencircumstances require, according tothecriteriastipulated in The Board, takingintoaccounttheviewsof theNominating Committee,determinestheindependenceof Directors upon election at the37 will retire byrotation at everyAnnualGeneralMeeting(“AGM”). Forinformation onDirectors whoare proposed for re- Directors are subjecttoretirement andre-election at leastonceeverythree years.One-third of thelongestservingDirectors appear onpages74to85. Directors will continue to be selected on the basis of their experience, skills, knowledge and insights. Directors’ profiles In relation togenderdiversity, theCompanyisof theview that genderisbutoneaspectof diversityandtheCompany’s of perspectives,insights,experienceandexpertisefor effective stewardship and management of theCompany’sbusiness. diversity. The Company views diversity as an important element to ensure that Board members provide the necessary range individuals asDirectors, regardless of theirgender, race,ethnicity, religion, age,disabilitystatus oranyotherdimensionof The Company is committed to having diversity on the Board, taking initiatives designed to attract the most talented innovation andadvancingtechnologiesaswellexperiencein key markets. law, engineering, information technology, logistics management, business space solutions, human resource development, growing businesses. Collectively, the Board has competencies in areas such as airline operations, accounting, finance, Company’s operations. TheBoard hastherequisite balanceof expertise,skillsandattributes tooverseetheCompany’s present Board size andthenumberof Board Committeestobesufficient,takingintoaccountthescopeand nature ofthe the needtobalancediversityof skillsetsandexperiencewiththeindependenceelement.TheBoard considersthe The Board, through theNominating Committee,reviews thesize andcompositionof theBoard, takingintoconsideration no alternate Directors. interest inamatter underdiscussionwilldeclare his/herinterest andabstainfrom thedecision-makingprocess. There are making, usingitscollectiveexpertiseandexperiencetoactinthebestinterests of theCompany. ADirector whohasan Independent Directors servestheCompanywell.TheBoard has,at alltimes, exercised independentjudgmentindecision- requirement under theCodethat IndependentDirectors compriseat leastone-third of theBoard. Of thenine Non-Executive Directors onthe current Board, sixare IndependentDirectors. TheCompanyhasthussatisfied the CORPORATE GOVERNANCE th AGM tobeheldon19July2019,pleaserefer topage65. The highrepresentation of findings andperformance assessment. The Nominating Committee, in consultation with the Chairman, takes appropriate actions to address the consultants' including Transformation. Thequantitative assessmentmeasures theBoard’s performance againstkey financialindicators. her contributionstotheBoard andrelevant Board Committees.Theinterviewsdiscussed theforegoing andcurrent issues each Director’s engagementindecision-making,collaboration withfellow Board membersandwithManagement,his/ value-add inshaping thefuture. Thequestionnaire alsoincorporates apeerassessmentof individualperformance, including composition, Board dynamicsandculture, Board partnershipwithManagement,Board processes andpractices, Board performance of theBoard andtheBoard Committeesbasedonevaluation factorssuch asstrategic prioritiesandfocus, Board The qualitative assessmentincludesaquestionnaire andinterviews.Thequestionnaire wasdesignedtomeasure theoverall Board hadmetitsperformance objectives. Company’s 17th year of evaluating Board performance. For FY2018/19, the external consultants concluded that overall, the the Nominating CommitteeandtheBoard toenhancetheeffectiveness of the Board anditsBoard Committees.Thisisthe Company oranyof itsDirectors. Theprocess, comprisinganassessmentof both qualitative andquantitative criteria,enables impartiality, theprocess ismanagedbyanexternalfirm of human resource consultants,whohave noconnectionwiththe Board asawholeandtheBoard Committees,aswellthecontributionsof theChairmanandindividualDirectors. For The Board hasaformal process, whichisoverseenbytheNominating Committee,for assessingtheeffectiveness of the (Principle 5) BOARD PERFORMANCE Director isrequired tobeappointed. that theroles of theChairmanandCEO are separate andthecurrent Chairmanisindependent,noLeadIndependent and theBoard Committees,includingtheChairmanof eachof theBoard Committees,are IndependentDirectors. Given The ChairmanandtheCEO are separate personsandare notrelated toeachother. Amajorityof themembersof theBoard as theSeniorVicePresidents (“SVPs”). and theBoard Committees,ischaired bytheCEO, anditsmembersincludetheExecutive VicePresident Operations aswell implement Board decisions. The Senior Management Committee, which decides on matters delegated to it by the Board attended by Management. The CEO and Management Committee deliberate on, inter alia, policy and operational issues, and The CEO (who is an Executive Director) manages the business of the Company. He chairs Management Committee meetings, shareholders, theBoard and Managementof theCompany. At AGMs andothershareholder meetings,theChairmanplaysapivotalrole infostering constructivedialogueamong Directors, andthat there iseffective communication withshareholders. strategic matters. TheChairmanalsoensures that Managementprovides complete,adequate andtimelyinformation to The Chairmansetstheagendaanddedicates sufficienttime fordiscussions,especiallyon material developmentsand decision-making. TheChairmanalsoencouragestheBoard’s interactionwith,andindependentaccessto,Key Executives. encourages constructiveengagementwithintheBoard andbetweenDirectors andManagement,ensures effective The ChairmanleadstheBoard andisresponsible for ensuringtheeffectiveness of the Board. At meetings,theChairman responsibilities of theChairmanandCEO. Independent Director andhispositionisseparate from theoffice ofthe CEO. There isacleardemarcation ofthe rolesand The current Chairman(whosucceededtheprevious Chairmanwitheffect from 19July2018)isaNon-Executive and (Principle 3) CHAIRMAN ANDCHIEFEXECUTIVEOFFICER CORPORATE GOVERNANCE 45 ANNUAL REPORT 2018/19 46 SIA ENGINEERING COMPANY including theListingManual. The Companyhasestablishedwrittenprocedures toensure compliancewith legislative andregulatory requirements, CORPORATE GOVERNANCE (d) (c) (b) (a) and cessation are subjecttoBoard approval, attends allBoard meetings. Thedutiesof theCompanySecretary include: Directors have separate and independent access to the Company Secretary. The CompanySecretary, whose appointment any aspectof theCompany’soperations orbusinessfrom Management. independent externaladviceat theCompany’sexpenseinfurtherance of theirdutiesandtorequest furtherinformation on actual results is explained and monitored. The Board has a process for Directors, either individually or collectively, to seek and forecasts, are alsoprovided toDirectors, andinrespect of budgets,anymaterial variancebetweentheprojections and security asthepapersare downloadedtotabletdevicesthrough anencryptedchannel.Otherdocuments,suchasbudgets to accessandread Board andBoard Committeepaperspriortoandat meetings.Thisinitiative alsoenhancesinformation to limitpaperwastageandreduce itscarbonfootprint, theCompanyprovides Directors withtabletdevicestoenablethem decisions, toenablethemmake well-considered decisionsinatimelymanner. InlinewiththeCompany’scommitment matters brought before theBoard, wellinadvanceof themeetingsof theBoard andtheBoard Committees,ordeadlines for Directors are provided with papers and related materials, including background or explanatory information relating to manner. access to Management and is provided with any additional information required to make informed decisions in a timely aviation industry. Material developmentsorissuesare alsobrought totheattention of theBoard. TheBoard hasindependent Management alsoprovides Board memberswithamonthly“Industry Update” toupdate themonkey developmentsinthe Board tomake a balancedandaccurate assessmentof theCompany’sperformance, financialpositionandprospects. monthly basistogetherwithsuchexplanation andinformation, astheBoard mayrequire from timetotime,enablethe and International FinancialReportingStandards. Managementprovides Board memberswithmanagementaccountsona The Company prepares its financialstatements inaccordance withthe Singapore FinancialReporting Standards (International) (Principles 6and10) ACCESS TOINFORMATION ANDACCOUNTABILITY facilitating orientation for newBoard appointeesandidentifyingsuitabletrainingdevelopment for Directors. updating andinforming theBoard ontheprinciplesandbestpracticesof corporate governance;and Corporate Regulatory Authority; and keeping anopenandregular lineof communication betweentheCompany, theSGX-ST, andtheAccounting& ensuring timelyflow of information totheBoard andtheBoard CommitteesandbetweenManagementDirectors, laws andregulations applicableinSingapore, theListingManualandCode; supervising, monitoringandadvisingonBoard procedures andcompliancebytheCompanywithitsConstitution, compliance andinformation technologyrisks. the adequacyandeffectiveness of theriskmanagementandinternalcontrol systems,addressing financial,operational, and the other Board Committees, maintains oversight of the key risks of theGroup’s business.Annually, theBoard reviews The Board has overallresponsibility for thegovernanceof risk.TheBoard, supportedbythe Board Safety &RiskCommittee (Principle 11) RISK MANAGEMENT CORPORATE GOVERNANCE & compliance Strategic risks HR &IRrisks & HR &IRrisks & compliance compliance Compensation & HR Committee SIAEC GROUP RISK MANAGEMENT FRAMEWORK Oversees risks at Management Company level Committee (including ITrisks) & (including ITrisks) Operational risks Operational risks Risk & compliance compliance Board ofDirectors Management Board Safety Committee Group Risk Committee & Risk

– – – – Operational Oversees risksat Grouplevel Financial risks & Financial risks & Financial risks Strategic risks Compliance risks (including ITandHR&IRrisks) Joint Venture level Oversees risks at Management Committee compliance compliance JV Risk Committee Audit Compliance risks (on NCmatters) Nominating Committee 47 ANNUAL REPORT 2018/19 48 SIA ENGINEERING COMPANY CORPORATE GOVERNANCE Risk ManagementCommittee(chaired bytheCEO), whichhasoversightof therisks facedbytheGroup. management of thekey risks of subsidiary, jointventure andassociated companies.BothCommitteesreport totheGroup the managementof key risks at theCompanylevel,whileJointVentures RiskManagementCommitteeoverseesthe facilitate theachievement of theGroup’s businessandstrategic objectives.TheRiskManagementCommittee oversees Management is responsible for the effective implementation of theriskmanagement strategy, policiesandprocesses to The Board Safety &RiskCommitteeheldfour meetingsinFY2018/19. Chairman on1June2018. of theBoard. MrManoharKhiatani wasamemberof theBoard Safety &RiskCommitteepriortohisappointmentasthe stepped downasamemberof theBoard Safety &RiskCommitteeon19July2018uponassumingtherole of Chairman Mr Tong ChongHeongsteppeddownasChairmanof theBoard Safety &RiskCommitteeon 1June2018.MrTang KinFei Members: Chairman: are independent. Themembersof theBoard Safety &RiskCommitteeare: The Board Safety &RiskCommitteecomprisesthree Non-Executive Directors, themajorityof whom,includingtheChairman, shareholders’ interests andtheGroup’s assets. system, frameworkandpoliciesensures that Managementmaintainsasoundsystemof riskmanagementtosafeguard The Board Safety &RiskCommitteewasformed in2013toassisttheBoard inoverseeingtheGroup’s riskmanagement &RISK COMMITTEE BOARD SAFETY under theListingManual. under their respective purview, and explain deviations as required by the Code, taking into account relevant obligations the Board andBoard Committees.TheBoard andtheBoard CommitteesoverseecompliancewiththeCode’srequirements Nominating Committeemaintainsoversightof compliancerisks onmatters relating to nominations to,andmembershipof, the financialrisks, whiletheCompensation &HRCommitteeoverseesthehuman resources andindustrial relations risks. The maintains oversightof theoperational risks includinginformation technologyrisks. TheAuditCommitteehasoversightof Strategic risks pertaining to the Group’s business are overseen directly by the Board. TheBoard Safety & RiskCommittee Mr Wee SiewKim Mr NgChinHwee Mr ManoharKhiatani (appointed on1June2018) framework andprocesses, andtobenchmarkthemagainstbestpractices intheindustry. external consultingfirmsare engagedtoconductanindependent assessment of theGroup’s riskmanagementsystem, & RiskCommitteewithawrittenassuranceontheadequacy andeffectiveness of theriskmanagementsystem.Periodically, Annually, the CEO, the Chief Financial Officer (“CFO”) and the Chairman of each Risk Committee provide the Board Safety risk managementandcontrols. self-assessments, whereby Managementandlinepersonnelare involvedintheongoingassessmentandimprovement of and procedures bythedivisionsinorganisation. Additionally, theGroup hasinplaceaformal programme of control Company’s parent, toensure theadequacyandeffectiveness of riskcontrols, andcompliance of riskmanagementframework On ayearlybasis,theriskmanagementsystemisaudited bytheInternalAuditDepartmentof SIA(“SIAInternalAudit”), the Risk ManagementAssurance 1 Details of thekey elementsof the RiskManagementFramework canbefound ontheCompany’swebsite taking intoaccounttheavailability of suchcover, andtheprobability andimpactof potential risks. As partof itsrisk-mitigating measures, theGroup regularly reviews thescope,typeandadequacyof itsinsurancecoverage, continuity planstoensure theirpreparedness andtheeffectiveness of responses todisruptions of criticalbusinessfunctions. Directorate tomanageIT-related crises.Onanongoingbasis,businessunitsandsupportdivisionsconducttestsof business processes. To address theincreasing cyber-security threat globally, theCompanyhassetupagroup withintheCrisis aviation and related industriesare reviewed andlearningpointsappliedtostrengthen theCompany’scrisismanagement reviewed andrefined, toensure that responses inacrisisare coordinated andeffective. Incidentsthat hadtaken placeinthe crisis management exercise is conducted yearly. Crisis management and communication plans and procedures are regularly As partof thecontinuingefforts toenhancethe robustness of theCompany’scrisismanagementplans,aCompany-wide measures taken byManagement. on developments,tofacilitate theirreview of theeffectiveness inmanagingsuchincidentsandtheadequacy of mitigating occurrence of significantriskevents,theBoard and/orBoard Safety &RiskCommitteeare promptly informed and updated Key riskissuesare surfaced byManagementtotheBoard andBoard Committeesfor discussionanddecision.Uponthe identifying newandemerging risks. Group’s risk registers are reviewed every six months. During these half-yearly reviews, close attention is also directed at the continuing relevance andadequacyof identifiedrisks andtheeffectiveness of preventive andmitigating measures, the and managementof risks, andkey risks are proactively identified,addressed and reviewed onanongoingbasis. To ensure facilitate the achievement of the Group’s business and strategic objectives. Management is responsible for the identification policies andguidelines,isresponsible for theimplementation of theriskmanagementstrategy, policiesandprocesses to Management isguidedbytheBoard andtheBoard Safety &RiskCommitteeinformulating theriskmanagementframework, relations risks. ranging, coveringstrategic, financial,operational, information technology, complianceandhuman resources &industrial the principlesandguidelinesof theISO31000:2009riskmanagementstandards andtheCode.Therisks identifiedare wide- risks. TheCompanyadvocates acontinuousanditerative riskmanagementprocess, whichwasdevelopedwithreference to The riskmanagementframeworksetsoutthepolicies,processes andprocedures for identifying,evaluating andmanaging Risk ManagementFramework CORPORATE GOVERNANCE http://www.siaec.com.sg/pdf/SIAEC_risk_management_framework.pdf 1 . 49 ANNUAL REPORT 2018/19 50 SIA ENGINEERING COMPANY Members: Chairman: members of theAuditCommitteeare: The AuditCommitteecomprisesfiveNon-Executive Directors, themajority of whomare IndependentDirectors. The (Principle 12) AUDIT COMMITTEE evidence tosuggestthat theserisks are notbeingsatisfactorily managed. relevant and material toitsoperations, wasadequate andeffective as at 31March 2019.TheBoard has found nosignificant of the risks (including financial, operational, compliance and information technology risks) which the Group considers Board, Board CommitteesandManagement,theBoard isof theopinionthat theGroup’s riskmanagementsysteminrespect Based onthereview of theGroup’s riskmanagement framework, policiesandpractices,reviews performed bythe Board ofDirectors’CommentsonthePracticeRiskManagement inSIAEC “Small Wins”initiative encouragesdivisionstoworktowards consecutivemonthsof zero incidents. In 2018,theCompanylaunched“Look. Think.Do.”Campaign to reinforce safety awareness. TheCompany’songoing campaigns, staff are regularly engaged on the priority of maintaininghighstandards of safety and quality at theworkplace. Pursuit of Excellence and Safety are core values of the Company. Through ongoing and new training programmes and by airworthinessauthoritiesandcustomerairlinesonitsadherence tomandated standards of safety andquality. aviation jurisdictions worldwide.Operating inahighlyregulated industry, theGroup issubjecttoregular auditsconducted The Companyholdscertifications from 25national airworthinessauthorities,includingthose of Singapore andmajor actions toaddress shortcomingsandprevent recurrence. reports on safety andqualityperformance andlapses,toensure that Managementundertakes prompt andeffective remedial accountability andprompt follow-up at theoperational level.Every quarter, theBoard Safety &RiskCommitteereviews Additionally, the Management Committee regularly reviews aviation andworkplacesafety issues and incidents to ensure basis todeterminetheeffectiveness of safety andqualitysystems,toidentifyemerging trends. ("Council"), chaired bytheCEO, overseestheASMS. TheCouncilmonitorssafety andqualityperformance onaquarterly Civil Aviation Organisation andtheCivilAviation Authorityof Singapore. ASafety, Health,Environment andQualityCouncil The Company’sAviation Safety ManagementSystem (“ASMS”) adoptstherequirements andguidelinessetbytheInternational MRO industry. and qualitymanagementsystem,incompliancewithregulatory requirements andinaccordance withbestpracticesinthe the managementof operational risks. TheCompanyiscommittedtobuildingandmaintainingastrong andeffective safety With theGroup’s businessinaircraft Maintenance,RepairandOverhaul(“MRO”), safety andqualityare key focus areas for Safety Management CORPORATE GOVERNANCE Mr ChinYau Seng(appointed on8October2018) Dr RajThampuran Mrs ChristinaOng Mr ManoharKhiatani Mr ChewTeck Soon (b) (a) reference underitsCharterasdelegated bytheBoard. In thecourseof thefinancialyear, theAuditCommittee performed the following key dutiesinaccordance withtheterms of Company. Theattendance of individualDirectors at thesemeetingsisshownonpage43of theAnnualReport. The AuditCommitteemetfour timesduringthefinancialyearwithManagementandinternalexternalauditors of the accounting orrelated financialmanagementexpertiseorexperience. existing auditingfirm. At leasttwomembers of theAuditCommittee(includingChairman)have recent and relevant Neither theChairmanof theAuditCommitteenoranyof itsmembersisaformer partnerordirector of theCompany’s of theBoard. Mr Tang KinFeisteppeddownasamemberof theAuditCommitteeon19July2018uponassumingrole of Chairman CORPORATE GOVERNANCE contracts and profits onlong-term Recognition of revenue equipment property, plantand Impairment riskon and jointventure subsidiaries, associates investments in Classification of the KAMsisasfollows: 2019. Please refer to pages102 to 108for the Independent Auditors’ Report.The Audit Committee’s commentary on been highlightedasKey AuditMatters (“KAMs”) intheIndependentAuditors’Reportfor theyearended31March estimates andjudgmentappliedinthepreparation of thefinancialstatements, themostsignificant ofwhich have The AuditCommitteediscussedwithManagementandtheexternalauditorskey areas of Management’s financial statements and reviewed theexternal auditors’ management letter andManagement’s responses thereto. The AuditCommitteediscussedwiththeexternalauditorsauditplan,report ontheauditof theyear-end External Audit regular updates bytheexternalauditors. standards andissueswhichhave adirect impactontheconsolidated financialstatements of theGroup through Manual andotherlegalrequirements. TheAuditCommitteekept itselfapprisedof changes infinancial reporting the goingconcernassumption,compliancewithsignificantfinancial reportingstandards, compliancewiththeListing accounting policiesandpractices,majorjudgmentalriskareas, significantadjustments resulting from theaudit, by theListingManual,for recommendation totheBoard for approval. Thereview focused onchangesinsignificant The AuditCommitteereviewed thequarterlyandannualfinancialstatements andfinancialannouncements required Financial Reporting Key Auditmatters appropriately accountedfor intheconsolidated financialstatements. contracts and the findings of the external auditors and was satisfied that thesehad been The AuditCommitteereviewed the recognition of revenue andprofits onlong-term required intheconsolidated financialstatements. The AuditCommitteewassatisfied withtheassessmentthat no impairment charge is assessment of theappropriateness of key assumptions applied. The AuditCommitteeconsidered thefindingsof theexternalauditors,includingtheir to driveperformance improvements. valuation modelaswellthekey assumptionsusedandactionstaken byManagement The AuditCommitteeconsidered theapproach andmethodologyapplied to the appropriate. and thefindingsof theexternalauditorsandwassatisfied that theclassification is The AuditCommitteeconsidered Management’sbasisfor classification of investments How theAuditCommitteereviewedthesemattersandwhatdecisionsweremade 51 ANNUAL REPORT 2018/19 52 SIA ENGINEERING COMPANY Whistle-Blowing (f) (e) (d) (c) CORPORATE GOVERNANCE its quarterlymeetingstoensure independentinvestigation andadequate resolution. matters of financial reporting orothermatters. Allwhistle-blower reports were reviewed bytheAuditCommittee at by theCompanythrough whichstaff andothersmay, inconfidence, raiseconcernsaboutpossibleimproprieties in The AuditCommitteereviewed andwassatisfied withtheadequacy of thewhistle-blowing programme instituted review of interested person transactionsandtheShareholders’ Mandate. Shareholders’ Mandate obtainedat thelastAGM. TheAuditCommitteewasassistedbythe internal auditorsinits The AuditCommitteereviewed interested persontransactionsincompliancewiththeListingManualand Interested PersonTransactions satisfactorily managed. and therelated compliancerisks, whichtheGroup considersrelevant andmaterial toitsoperations, are notbeing risks, andinternalcontrols. TheAuditCommitteehasfound nosignificantevidencetosuggestthat thefinancialrisks oversight totheworkof theGroup RiskManagementCommitteeinrespect of financialandthe related compliance In linewithitsresponsibilities undertheCompany’sGroup RiskManagementstructure, theAuditCommitteeprovided financial, operational, complianceandinformation technologycontrols. The AuditCommitteereviewed theadequacyandeffectiveness of theGroup’s material internalcontrols, including Internal ControlsandRiskManagement adequately resourced, andhasappropriate standingwithintheCompany. Audit Committee.TheCommitteeisof theopinionthat theinternalauditfunctionisindependent,effective and internal auditorshadunfettered accesstotheGroup’s documents,records, properties andpersonnel,as well asthe the yearandManagement'sresponses thereto. Inrelation toauditactivitiesconductedduringthefinancialyear, the The AuditCommitteereviewed thescopeof internalauditworkanditsprogrammes, themajorfindingsduring Internal Audit for the yearended31March 2019. The Companyhascomplied with Rules 712and 716 of the Listing Manualinrelation toitsengagementof auditors the auditfee for theyearended31March 2019. The AuditCommitteeconsidered andrecommended totheBoard there-appointment of theexternalauditors,and auditors’ independence. Committee isof theopinionthat theamountof fees paidfor non-audit servicesdidnotcompromise theexternal during theyearfor auditandnon-audit services. Ofthis,fees for non-audit servicesamountedto$32,416.TheAudit Company, as well as the fees paid to the auditors. Fees of $328,082 were paid to the external auditors of the Group The AuditCommitteereviewed theexternalauditors’objectivityandindependencefrom Managementandthe resources andappropriate standingwithin theCompanytoperform itsfunctionseffectively. The AuditCommitteeissatisfied that theCompany’sinternalaudit functionisindependent,effective andhasadequate programmes, conferences andseminars that provide updates onauditing techniquesandregulations. Information System Auditors. Theprofessional competenceof SIAInternalAuditismaintainedorupgradedthrough training relevant qualifications andexperience. Information technology audits are managed byinternalauditorswhoare Certified Reviews are carried outbyexternalqualifiedprofessionals periodically. SIAInternalAuditisstaffed bypersonswiththe function according to the Standards for the Professional Practice of Internal Auditing set by the IIA. Quality Assessment SIA InternalAuditisamemberof theSingapore chapterof theInstituteof InternalAuditors(“IIA”) andcarriesoutits the results totheAuditCommitteeeveryquarter. all recommendations toensure that Management hasimplementedtherecommendations inatimelymanner, andreports to theAuditCommittee.Significantissuesare discussed at theAuditCommitteemeetings.SIAInternal follows upon access totheAuditCommittee.Allsignificantauditfindingsand recommendations madebySIAInternalAudit are reported SIA InternalAudithasunfettered accesstoallof theCompany’sdocuments,records, properties andpersonnel,including as itdeemsappropriate. the Company and SIA, the Audit Committee may authorise such audit work to be carried out by an independent third party out bySIAInternalAuditcouldgiverisetopotentialconflicts of interest, suchasauditwork relating totransactionsbetween performance of theinternalauditfunctionaswellfee payabletothem. Insituations where theauditworktobecarried the adequacyandeffectiveness of theinternalauditfunction, continuation of theengagement of SIAInternalAudit for and SIA.SIAInternalAuditreports directly totheChairmanof theAuditCommittee.Annually, theAuditCommitteeevaluates The Company’sinternalauditfunctionisundertaken bySIAInternalAuditpursuanttoanagreement betweentheCompany with policiesandprocedures of theCompany, itssubsidiariesandjointventure andassociated companies. controls; the reliability of financial information processes; compliance with applicable lawsand regulations; and compliance audit functionisdesignedtoprovide reasonable assuranceabouttheadequacy, effectiveness andefficiency of operations The AuditCommitteeapproves theengagement,evaluation andcompensation of theinternalauditfunction.The The Companyhasaneffective internalauditfunctionthat isadequately resourced andindependent of theactivitiesitaudits. (Principle 13) INTERNAL AUDIT (g) Others CORPORATE GOVERNANCE meets withtheinternalandexternalauditorswithoutpresence of Managementeveryquarter. officer to attenditsmeetings,andhasbeengivenadequate resources todischarge itsfunctions.TheAuditCommittee to andco-operation of Management.TheAuditCommitteealsohasfulldiscretion toinviteanyDirector orexecutive The AuditCommitteehasexplicitauthoritytoinvestigate anymatter withinitstermsof reference, andhasfullaccess 53 ANNUAL REPORT 2018/19 54 SIA ENGINEERING COMPANY CORPORATE GOVERNANCE material errors, poor judgmentindecision-making,humanerror, fraudorotherirregularities. objectives. Inthisregard, theBoard alsonotesthat nosystemcanprovide absoluteassuranceagainsttheoccurrence of that the Group willnotbeaffected byanyeventthat couldbe reasonably foreseen asitstrivestoachieveitsbusiness The Board notesthat thesystemof internalcontrols andriskmanagementprovides reasonable, butnotabsolute, assurance material toitsoperations, were adequate andeffective as at 31March 2019. addressing financial, operational, compliance and information technology risks, which the Group considers relevant and Committees, theBoard, withtheconcurrence of theAuditCommittee,isof theopinion that theGroup’s internalcontrols, and external auditors andthe airworthiness authorities, and thereviews performed byManagementandtherelevant Board Based ontheframeworkof internalcontrols establishedandmaintainedbytheCompany, workperformed bytheinternal consolidated financialstatements giveatrueandfairview of theGroup’s operations andfinances. Group considers relevant andmaterial toitsoperations, that thefinancial records have beenproperly maintained,andthe effective as at 31March 2019toaddress financial,operational, complianceand information technologyrisks, whichthe financial, operational, complianceandinformation technologycontrols) andriskmanagement systemswere adequate and The Board hasreceived assurancefrom theCEO andtheCFOthat theGroup’s frameworkof internalcontrols (including 151 auditsbycustomers. adherence to operational and safety procedures. In FY2018/19, the Company underwent 108 audits by the authorities and authorities, aswelltheCompany’scustomers,conductregular auditsof theoperations of theCompanytoensure Civil Aviation Authorityof Singapore, theFederalAviation Administration andtheEuropean Aviation Safety Agency. These authorities andcustomers.TheCompanyholdscertifications from 25airworthinessauthoritiesworldwide,includingthe Additionally, as the Group operates in a regulated industry, the Company is alsosubject to regular audits by airworthiness Committee. which mayhave amaterial financialimpactontheCompany. SIAInternalAuditandCSA results are reviewed bytheAudit complement theCSAprogramme byproviding anindependentandobjectiveassessmentof theprocesses andcontrols information technology risks identifiedtobe relevant andmaterial totheCompany’soperations are working.Internalaudits made byfunctionalmanagersprovide theassurancethat key controls toaddress thefinancial,operational, complianceand establishes control ownershipamongfunctionalmanagersandstaff intheirareas of responsibilities. Theself-assessments A Control Self-Assessment (“CSA”) programme, establishedsinceFY2003/04,provides atangiblecontrol frameworkthat whistle-blowing programme for thereporting andinvestigation of anywrongdoing. for every bankingandfinancetransaction,having regard tothenature of thetransaction.TheCompanyhas anestablished reasonable assurancethat transactionsundertaken are alignedwiththeCompany’sobjectives.Thisincludesapproval limits of internalcontrols. TheCompany’sinternalcontrol structure consistsof policiesandprocedures establishedtoprovide The Board issupportedbytheAuditCommitteeinreview of theadequacy andeffectiveness of theGroup’s system responsibility for themanagementof key risks undertheirrespective purview. relations andcompliancerisks. Ascanbeseenfrom theoutlineonpage47,Board andtheBoard Committeeshave Group’s risks, whichincludestrategic, operational, information technology, safety, financial,human resources andindustrial The Companyhasinplaceariskmanagementframework(outlinedpages47to50)overseetheof the (Principle 11) INTERNAL CONTROLS ANDRISK MANAGEMENT Strategic Transformational IncentivePlan(“STIP”)andEconomic Value Added(“EVA”)-Based IncentivePlan(“EBIP”). payouts undertheCompany’sRestrictedShare Plan(“RSP”), Performance Share Plan(“PSP”), Profit-Sharing Bonus(“PSB”), The Compensation &HRCommitteeisalsoresponsible for reviewing theeligibility, guidelines,allotment,awards and relationship withtheCompanywhichcouldaffect itsindependenceandobjectivity. Grundlingh. Carrots ConsultingPteLtd onlyprovides remuneration consultingservicestotheCompany, andhasnoother For FY2018/19,Carrots ConsultingPteLtd wasengagedtoprovide suchservices,theprincipaladviserbeingMrJohan and benchmarkdata andrecommendations onseniorexecutive remuneration, includingincentiveandshare plans. An independentconsultantisengagedtoprovide advicetotheCompensation &HRCommitteeonmarket practices (c) (b) (a) under itsCharterasdelegated bytheBoard: The Compensation &HRCommittee,guidedbytheprinciplesof theCode,andinaccordance withthetermsof reference stepped downasamemberof theCompensation &HRCommitteeon19July2018and1Junerespectively. Mr Stephen Lee Ching Yen stepped down as Chairman of the Compensation & HR Committee and Mr Tong Chong Heong Members: Chairman: Directors. Themembersof theCompensation &HRCommitteeare: The Compensation &HRCommitteecomprisesthree Non-Executive Directors, themajorityof whomare Independent (Principle 7) COMPENSATION &HRCOMMITTEE CORPORATE GOVERNANCE to market data provided byrecognised surveysof comparative groups intheaerospace andgeneralsectors. management staff whichare whoholdtherank of VicePresident fairandperformance (“VP”), related, with reference scope of duties,andcompensation, anddecidesonthecompensation packages torecruit, retain andmotivate senior reviews and recommends totheBoard thekey termsandconditionsof appointmentof theCEO andKey Executives, based incentivesandawards, andbenefitsinkind; covers allaspectsof remuneration, includingbutnotlimitedtoDirectors’ fees, salaries,allowances,bonuses,share- Board; Directors, the CEO andtherelevant Key Executives who holdtherank of SVPandabove,for theendorsementof the reviews and recommends thegeneralframeworkof remuneration andthespecific remuneration of theNon-Executive Mr Wee SiewKim Mr GohChoonPhong Mr Tang KinFei(appointed on19July2018) 55 ANNUAL REPORT 2018/19 56 SIA ENGINEERING COMPANY CORPORATE GOVERNANCE in arrears. basis. This pool is subsequently used to pay the Non-Executive Directors’ fees based on actual service on a quarterly basis Shareholders’ approval issoughtat theAGM for thefees for Non-Executive Directors for thecurrent financialyearonapool Directors equitablytoattract andretain individualswiththenecessarytalentsandcapabilities. is measured againstrelevant benchmarks andaimstobecompetitive.TheBoard believesthat itisimperative toremunerate The fees for Non-Executive Directors reflect thescope andextent of aDirector’s increasing responsibilities andobligations. It (Principles 8&9) REMUNERATION REPORT (n) (m) (l) (k) (j) (i) (h) (g) (f) (e) (d) (c) (b) (a) functions: During FY2018/19,theCompensation &HRCommitteeheldfour meetingsandperformed, interalia,thefollowing main and industrialrelations risks. reviewed allHR Risk Management activities and the measures that are put in placetomitigate the human resource contracts of servicetoensure fairandreasonable termsare accorded; and reviewed theCompany’sobligations intheeventof termination of anyExecutive Directors’ or Key Executives’ Remuneration Matters; reviewed theCompany’scompliance with guidelines under the Code and the SGX-ST Disclosure Guideon reviewed theCompensation &HRCommitteemandate for share buyback; reviewed theHRStrategy for 2019; reviewed thepay-for-performance relationship of theCompany’sexecutive compensation structure; reviewed andendorsedthe2019SuccessionDevelopmentPlanfor theCompany; reviewed thefees payabletoDirectors for FY2018/19; conducted theannualperformance andcompensation review for Key Executives; reviewed andrecommended thetotalcompensation frameworkfor Key Executives; reviewed thepayoutsunderEBIP; determined theallotmentfor the13 conducted areview of theFY2015/16,FY2016/17andFY2017/18PSPperformance to-date; conducted areview of theFY2017/18RSPperformance to-date; th RSPandPSPgrantsfor FY2018/19; Png KimChiang Raj Thampuran Tang KinFei Chin Yau Seng Wee SiewKim Manohar Khiatani rates andtheactualfees paidtotheNon-Executive Directors are showninthetablesbelow: Non-Executive Directors’ remuneration for FY2018/19wasderivedusingthesamerates asFY2017/18.Information onthe CORPORATE GOVERNANCE (vii) (vi) (v) (iv) (iii) (ii) (i) Notes: Tong ChongHeong Christina Ong Chew Teck Soon Ng ChinHwee Goh ChoonPhong Stephen LeeChingYen The remuneration inrespect of each Director for FY2018/19isasshown: If aDirector occupiesapositionfor partof afinancialyear, the fees duetohim/hershallbepro-rated accordingly. Note: – Board MeetingAttendance Fee Member’s Fee Chairman’s Fee Other BoardCommittees Member’s Fee Chairman’s Fee Audit Committee Member’s Fee Board Committee Chairman’s Fee Member’s Fee Board ofDirectors – Type ofAppointment Type For eachBoard Meetingheldlocally For eachBoard Meetingheldoverseas met undertherespective share plans. the RSP($2.85)and PSP($2.60).Shares awarded undertheRSPand PSPare subjecttoperformance targets andotherterms andconditionsbeing Comprises shares awarded under the RSP and PSP during FY2018/19; the value of awards is basedon thefairvalueof the shares awarded under Comprises EBIPamount, STIPamountandPSBdeclared for theFY. As ChiefExecutive Officer, MrPngKim Chiangdoesnot receiveanyDirectors’ fees. Mr ChinYau Sengwas appointedDirector on8October2018. Directors’ fees duetoDrRajThampuranwere paidtoagovernment agency, theDirectorship &ConsultancyAppointmentsCouncil. Directors’ fees inrespect of MrGohChoonPhong,NgChinHweeandYau Sengwere paidtoandretained bySIA. 1 June2018. Mr Stephen LeeChingYen steppeddownasChairman andDirector on19July2018andMrTong ChongHeongsteppeddownasDirector on (ii)/(iv) (iii) (ii) (v) (ii) (i) (i) 202,025 113,000 136,326 102,000 132,000 137,000 113,000 106,000 63,986 48,507 21,724 Fee ($) – 723,640 Salary ($) – – – – – – – – – – – Bonuses 453,107 ($) – – – – – – – – – – – (vi) Benefits 65,207 ($) – – – – – – – – – – – Scale ofDirectors’Fees 549,840 Shares ($) – – – – – – – – – – – (vii) 1,791,794 113,000 102,000 132,000 137,000 136,326 113,000 106,000 202,025 60,000 20,000 20,000 30,000 65,000 10,000 10,000 48,507 21,724 63,986 3,000 1,000 Total ($) $ 57 ANNUAL REPORT 2018/19 58 SIA ENGINEERING COMPANY (iii) (ii) (i) Notes: CORPORATE GOVERNANCE table below, inbandsof $250,000(for otherKey Executives): The remuneration of theCompany’sKey Executives for FY2018/19isshowninthetableonpage57 (for the CEO) andinthe of misstatement ormisconduct/fraudresulting inmaterial lossestotheCompany. The Company has clawback policies for the unvested and/or unreleased components of the incentive schemes intheevent Group and Companyperformance measures. share awards are dependentontheachievementof theKey Executives’ individualperformance measures andprescribed RSP and the PSP, in addition to a fixed basic salary and fixed allowances. The payments of the EBIP, STIP, PSB and grants of Key Executives’ remuneration structure includesthecomponentsof anEBIP, aSTIPandPSB, andshare awards underthe motivate andreward Key Executives, andallowstheCompanytoalignexecutive compensation withmarket practice.The The Company’sKey Executives’ remuneration structure isdesignedtoincludeshort-termandlong-termincentives,which KEY EXECUTIVES’REMUNERATION exceeded $50,000for thefinancialyearended31March 2019. There were no employees whowere immediate familymembersof aDirector ortheCEO, andwhoseremuneration any share optionsorshare awards whichare grantedonlytotheemployeesof theCompany. Apart from theforegoing, no otherremuneration ispaidto Non-Executive Directors of theCompany, nordotheyreceive Foo Kean Shuh SVP Aircraft &ComponentServices Wong Yue Jeen SVP Finance/CFO Ng LayPheng $250,000 –$500,000 Development SVP PartnershipManagement&Business Philip Quek SVP LineMaintenanceandCabinServices SVP HumanResources Zarina Piperdi $500,000 –$750,000 Executive VicePresident Operations Ivan NeoSeokKok $750,000 –$1,000,000 Remuneration Bands&Key Executives appointment asVicePresident Finance. Ms NgLayPhengwasappointed SVPFinancewitheffect from 1October2018.Her remuneration includes theamountpaidduringher met undertherespective share plans. the RSP($2.85)andPSP($2.60).Shares awarded under theRSPandPSPare subjecttoperformance targets andothertermsconditionsbeing Comprises shares awarded under the RSP and PSP during FY2018/19; the value of awards is based on thefairvalueof the shares awarded under Comprises EBIPamount,STIPamountandPSBdeclared for theFY. (iii) Salary (%) 47 43 49 41 47 44 Bonuses (%) 37 40 36 34 40 40 (i) Benefits (%) 3 2 2 2 3 5 Shares 14 14 14 13 22 (%) 8 (ii) Total 100 100 100 100 100 100 (%) and issubsequentlyusedtomodifythePSBpayoutwithin therange of 0%–150%. Executive. Aftertheassessmentof theIndividualPerformance Scorecards, anIndividualPerformance Rating isdetermined The PSBisbasedonGroup andCompanyperformance andiscappedat three timesof themonthly basesalaryfor eachKey and theCompanytakingintoaccountindividualperformance. Payment of anannualPSBinrespect of eachKey Executive isbasedontheachievementof financial objectives of theGroup Profit-Sharing Bonus ("PSB") bonus. initiatives asassessedbytheCompensation &HRCommittee.Theresultant payoutvariesbetween0%–150%of thetarget end of thefinancialyear, thetarget bonusismodifiedbytheincumbent’sperformance onthe execution ofthestrategic Under theSTIP, atarget bonusissetfor meetingstrategic initiatives setundertheIndividualPerformance Scorecard. At the Senior Managementstaff whoshoulderthe responsibility for theCompany’sstrategic initiatives andfuture-oriented growth. The STIPisanincentiveschemeestablishedwiththeobjectiveof rewarding, motivating, andretaining aselectgroup of key Strategic Transformational IncentivePlan("STIP") Company operates. under authority of the Board, to amend the rules where appropriate and relevant tothebusinessenvironment in which the The rulesof theEBIPare subjecttoreview andamendmentbytheCompensation &HRCommittee,whichhasthediscretion, account are at riskbecauseunderperformance of EVA willresult inaretraction of EBIPbonusearnedinpreceding years. thirds are carried forward ineachindividualexecutive’s EBIPaccountfor paymentinfuture years.Amounts intheEBIP the balanceof theEBIPbonusbrought forward from preceding years,ispaidoutincasheachyear. Theremaining two- Under theEBIP, one-third of theaccumulated EBIPbonus,comprisingthebonusdeclared for thefinancialyear, and incentive declared undertheEBIPreflects theperformance levelachieved. For FY2018/19,theactualperformance of theGroup hadpartiallymetthepre-determined targets, andtheresulting annual capital efficientlyandmanagingtherisk profile andrisktimehorizon ofthebusiness. The EBIPrewards for sustainableshareholder valuecreation achievedoverthemediumtermbygrowing profits, deploying significant portion of theannualperformance-related bonus for theseexecutives. One of theincentiveplansincludedinremuneration of Key Executives of theCompanyisEBIP, whichforms a Economic Value Added-Based IncentivePlan ("EBIP") For FY2018/19,theaggregate totalremuneration for thesixKey Executives listedaboveamountedto$3,886,237. Executives. 2 there were notermination, retirement andpost-employmentbenefitsgrantedtoDirectors, thecurrent CEO For FY2018/19,otherthanthein-serviceandpost-retirement travel benefits for Key Executives andtheprevious CEO, CORPORATE GOVERNANCE

Under hisservice agreement, thecurrent CEO isnotentitledtoanyin-service orpost-retirement travel benefits. 2 andtheKey 59 ANNUAL REPORT 2018/19 60 SIA ENGINEERING COMPANY Performance Conditions Vesting Condition Plan Description # Note: CORPORATE GOVERNANCE plans are describedbelow: The RSPandPSPare share-based incentiveplansapproved bytheshareholders of theCompany. Thedetailsof thetwo Share IncentivePlans Payout EBITDA denotesEarningsbefore Interest, Taxes, Depreciation andAmortisation • objectives withsomedegree of stretch. period basedonGroup andCompany set at thestartof aone-yearperformance and individual performance. Targets are Company, dependentonpositionlevel Award of fully-paid ordinary shares of the business objectives. aligned totheGroup andCompany’s drivers of shareholder value and are selected astheyare thekey operational The aboveperformance conditionsare • Awards grantedinandafter FY2016/17 requirements. two yearswithfulfilmentof service will vestequallyoverthesubsequent period, 50% of award will vest. Balance conditions overatwo-yearperformance Based on meeting stated performance Awards grantedpriortoFY2016/17 performance period. of pre-set performance targets over the 0%– 150%dependingontheachievement requirements. two yearswithfulfilmentof service will vestequallyoverthesubsequent period, 1/3of award willvest.Balance conditions over a one-year performance Based on meeting stated performance Restricted SharePlan

Group and CompanyEBITDA per $EmploymentCost Group and CompanyValue Added Margin #

objectives for seniormanagement. based onstretched long-termcorporate the startof athree-year performance period individual performance. Targets are setat Company, dependentonpositionleveland Award of fully-paid ordinary shares of the creation for shareholders. selected as key measurement of value- The aboveperformance measures are • • performance period. performance conditionsoverthethree-year Vesting basedonmeetingstated performance period. of pre-set performance targets over the 0% –200%dependingontheachievement Performance SharePlan Return onEquity("ROE") outperform Costof Equity("COE") (TSR) Absolute Total Shareholder Return reviews of thecompensation-related risks. policies are inplaceto managetheriskexposures identified.The Compensation &HRCommitteewill undertake periodic Compensation RiskAssessmenttoreview thevarious compensation risks that mayarise,andhasensured that mitigating risk outcomes and be sensitive to the time horizon of the risks. TheCompensation & HR Committee has conducted a Under theCode,compensation frameworkshouldtake intoaccounttheriskpoliciesof theGroup, besymmetric with Compensation RiskAssessment to FY2017/18. linkage of theexecutive remuneration totheperformance of theGroup andtheCompanyfor thereview periodof FY2012/13 conduct aPay-for Performance Alignmentstudy. TheCompensation &HRCommitteeconcludedthat there wasadequate In FY2018/19,theCompensation &HRCommitteeengagedaremuneration consultant, Carrots ConsultingPteLtd, to • • • • broad categories of targets: performance objectives are different for eachexecutive, theyare assessedonthesameprinciplesacross the following four Scorecards, creating alignmentbetweentheperformance of theGroup andtheCompany, andtheindividual.Whilethese Company are setat thebeginningof eachfinancialyearandare cascadeddowntoexecutives usingIndividualPerformance Individual performance objectivesalignedtotheoverallstrategic, financial andoperational goals of theGroup andthe degree of businessperformance, withemphasisonbothshortandlong-termquantifiableobjectives. performance targets as determined by the Committee are set at realistic, yet stretched levels, each year to motivate a high to theCEO andKey Executives isclearlylinked totheachievementof businessandindividualperformance targets. The In performing thedutiesasrequired underitsCharter, theCompensation &HR Committee ensures that remuneration paid Pay forPerformanceAlignment pages 196to197inthisAnnualReport. Details of theRSPandPSP(previous andcurrent), andtheawards grantedthereunder, canbefound onpages98to99and used bytheCompanytomake grantsof awards insubsequentyears. Annual GrantSub-Limit isnotfullyutilisedinanygivenyear, thebalanceof theunutilisedAnnualGrantSub-Limit maybe shares (excluding treasury shares andsubsidiaryholdings)from timeto(the“Annual GrantSub-Limit”). However, ifthe of shares under awards to be granted annually under the new share plans shall not exceed 0.5% of the total number of issued the form of shares orcash in lieu of shares) will besubject to a reduced maximumlimitof 5%.In addition, thetotal number as the previous plans, except that the total number of shares which may be delivered under the new share plans (whether in Extraordinary GeneralMeetingof theCompanyheldon21July2014.Thenewshare planshave substantiallythesameterms and SIAEC PSP 2014 respectively (herein referred to as the RSP and PSP) which were approved by shareholders at the The RSP and PSPwere originallyadopted by shareholders on 25July2005,andwere replaced by theSIAEC RSP2014 the pre-determined target performance levels were partially met for theperformance period from FY2016/17toFY2018/19. The achievementfactorfor thePSPaward grantedinFY2016/17whichfullyvestsJuly2019,reflects theextenttowhich FY2018/19. extent towhichthepre-determined target performance levelswere outperformed for theone-yearperformance periodof The achievementfactorfor theRSPaward grantedinFY2018/19,whichcommencesvestingJuly2019,reflects the CORPORATE GOVERNANCE Strategic andTransformational Initiatives People andOrganisational Development Customer, Operations andPartners Financial andBusiness 61 ANNUAL REPORT 2018/19 62 SIA ENGINEERING COMPANY CORPORATE GOVERNANCE Accountants. Senior Executive Programme at the London Business School. She is alsoa Fellow of theInstitute of Singapore Chartered Ms Piperdi holdsaBachelorof Accountancy (Honours)degree from theNational Universityof Singapore andattended a Singapore Pte.Ltd. Ms Piperdi istheChairpersonof Fuel AccessoryServiceTechnologies PteLtd andaDirector of Component Aerospace Resources inNovember2006.Sheiscurrently responsible for theHumanResources andTraining Academydivisions. Human Resources, SIA Cargo in 2001. In March 2006, she joined SIAEC and was appointed Senior Vice President Human SIA Cargo PteLtd in1997tospearheadtheformation of thecargo airlineandwasappointed asVicePresident Finance& positions inFinance.In1991,shewaspostedtoLosAngeles asSIA’s RegionalFinance&AdminManagerAmerica. Shejoined Ms Piperdi istheSeniorVicePresident HumanResources of SIAEC. ShejoinedSIAin1983andhasheldvarious senior Senior VicePresidentHumanResources Ms ZarinaPiperdi degree from theUniversityof NewSouthWales andaBachelorof Science(Honours)degree from theUniversityof London. In additiontopossessinganAircraft MaintenanceEngineer'sLicence,MrNeoholdsaMasterof BusinessandTechnology Services Private Limited. Center –AsiaPte.Ltd., andaDirector of GoodrichAerostructures Service()Co.Ltd andSingapore Aero Engine Pte. Ltd. andPanAsiaPacific Aviation ServicesLimited(Hong Kong), DeputyChairman of Goodrich Aerostructures Service Mr NeoistheChairmanof Aerospace ComponentEngineeringServicesPte.Limited,Heavy MaintenanceSingapore Services support servicesof Marketing &Sales,Facilities Development, QualityandSafety, Security&Environment. the operations of Aircraft &ComponentServices,LineMaintenanceandCabin FleetManagementaswellthe Development. On1April2016,MrNeowasappointedExecutive Vice President Operations. Heiscurrently incharge of across SIAEC, andthesupportservicesof BusinessDevelopment,PartnershipManagement,Marketing &Sales,andFacilities to SIAEC and was appointed Senior Vice President in 2007. Over the years, Mr Neo was responsible for various operations Mr NeojoinedSIAin1975andservedvariouscapacitiestheEngineeringDivision.In1992,wastransferred Executive VicePresidentOperations Mr IvanNeoSeokKok Science degree inComputation from theUniversityof ManchesterInstituteof ScienceandTechnology. Mr Png holds a Master of Business Administration degree from the National University of Singapore and a Bachelor of Limited, andaDirector of SIAEngineering(Philippines)Corporation. Mr PngistheDeputyChairmanof BoeingAsiaPacific Aviation ServicesPte. Ltd. andSingapore Aero EngineServicesPrivate and SeniorVicePresident Servicesin2001. Operations in2010,SeniorVicePresident Aircraft &ComponentServicesin2009,SeniorVicePresident Commercial in2005 Prior tohisappointmentasChiefExecutive Officeron1April2015,MrPngwasappointed Executive Vice President the aerospace industry. Mr PngisaDirector andtheChiefExecutive Officer ofSIAEC. HejoinedSIAin1975andhasover44years ofexperiencein Director andChiefExecutive Officer Mr PngKimChiang PROFILE OFSENIOREXECUTIVES Mr QuekholdsaBachelorof Engineering(Honours)degree from NanyangTechnological University, Singapore. Company Limited(Vietnam). Mr QuekisaDirector of BoeingAsiaPacific Aviation ServicesPte. Ltd. andSouthernAirportsAircraft Maintenance Services IT inApril2015andSeniorVicePresident LineMaintenance&FleetManagement inOctober2016. Manager of SIAEngineering(Philippines)Corporation inSeptember2014, ActingSeniorVicePresident LineMaintenance& IT andinSIAEngineering(Philippines)Corporation. HewasappointedVicePresident Workshops inApril2013,General SIAEC in2001andservedvariousdivisionssuchasHeavy Maintenance,Workshops, LineMaintenance,FleetManagement, Mr QuekwasappointedSeniorVicePresident PartnershipManagement &BusinessDevelopmenton1April2018.Hejoined Senior VicePresidentPartnershipManagement&BusinessDevelopment Mr PhilipQuekCherHeong (Aerospace Engineering)(Honours)degree from theRoyalMelbourneInstituteof Technology, Australia. Power)degree from CranfieldMr FooholdsaMasterof University, Science(Thermal UKandaBachelor of Engineering Limited andMoogAircraft ServicesAsiaPte.Ltd. Solutions Pte.Ltd. andadirector of PanAsiaPacific Aviation ServicesLimited(Hong Kong), EagleServicesAsiaPrivate position of SeniorVicePresident LineMaintenance&CabinServiceson1April2018.HeistheChairmanof AdditiveFlight On 1June2016,MrFoowasappointedasSeniorVicePresident Innovation &Technology inSIAEC. Hethentookonthe last role as DivisionalVicePresident Engineering(Operations). positions inthedivision,includingVicePresident MaintenancePlanning&Control, VicePresident Technical Projects andhis Mr FoojoinedtheEngineeringDivisionof SIAin1994asaTechnical ServicesEngineer. Hewentontoholdvarioussenior Senior VicePresidentLineMaintenance&CabinServices Mr FooKean Shuh He isalsoaMemberof theInstituteof Singapore Chartered AccountantsandCPA Australia. Mr Wong holdsajointBachelorof Sciencedegree inAccountingandComputerSciencefrom LaTrobe University, Australia. Private LimitedandPanasonicAvionics ServicesSingapore Pte.Ltd. Mr Wong istheDeputyChairmanof EagleServicesAsiaPrivate Limited,andaDirector of JAMCO Aero Design&Engineering Asia Pacific.Mr Wong hasalsoheldvarious roles inconsultingservicesandaudit at SAPandICIAsiaPacific respectively. composites businesses. Before General Electric, Mr Wong was General Manager (Finance & Control / MIS) at ABB Alstom acquisitions, aswellsales,marketing andcommercial operations intheengineeringplasticsandaerospace structured in GEPlasticsSouthEastAsia.Hisroles inGeneralElectricprincipallycentred around businessdevelopment,mergers and years inGeneralElectric,where hislastappointmentwasCommercial Director, Engineered Styrenics and Petrochemicals, Senior Vice President Aircraft & Component Services on 1 February 2018. Prior to joining SIAEC, Mr Wong spent several took on the position of Senior Vice President Partnership Management & Business Development on 1 September 2015 and Mr Wong joinedSIAEC inMarch 2008.HewasappointedVicePresident BusinessDevelopmenton1July2009.Mr Wong Senior VicePresidentAircraft &ComponentServices Mr Wong Yue Jeen CORPORATE GOVERNANCE 63 ANNUAL REPORT 2018/19 64 SIA ENGINEERING COMPANY CORPORATE GOVERNANCE candidates meettherequired criteria,theNominating Committeewillrecommend its selectiontotheBoard for approval. the Nominating Committee, together with theChairman of theBoard, meetwith candidates toassesstheireligibility. Ifthe overall effectiveness andinformed decision-making. Intheevaluation of potentialappointeestothe Board, members of New appointmentstotheBoard are carefully selected toaugmentcore competenciesandexperienceof theBoard toensure of theCodeandrequirements of theListingManual. Annually, theNominating Committeereviews eachDirector’s independence, takingintoconsideration therelevant guidelines regularly updated and reviewed by theNominating Committee. goals. TheSkillsMatrix, whichservesasaguidetoidentifythecompetenciesandattributes for newBoard appointments,is which denotestheexperienceandexpertiseof Directors inrelation totheCompany’s businessactivitiesandstrategic qualified womeninthelist of candidates for aBoard position.TheNominating CommitteehasdevelopedaSkillsMatrix, support of genderdiversity, theNominating Committeealsoensures that appropriate efforts are madetoincludesuitably focused onmaintainingastrong independentelementinthecomposition of theBoard andtheBoard Committees.In Board compositionandmakes recommendations for theappointmentof newDirectors. TheNominating Committeeis The Nominating Committee,inaccordance withthetermsof reference underitsCharterasdelegated bytheBoard, reviews Members: Chairman: in thesubsequentparagraphs.Themembersof theNominating Committeeare: independent. Thekey responsibilities of theNominating Committee,inaccordance withthetermsof itsCharter, are setout The Nominating Committeecomprisesthree Non-Executive Directors, themajorityof whom,includingtheChairman,are (Principle 4) NOMINATING COMMITTEE Technological University, Singapore. Mr NgholdsaMasterof BusinessAdministration degree andaBachelorof Engineering (Honours)degree from Nanyang Ltd, PanAsiaPacific Aviation ServicesLimited(Hong Kong) andPanasonic Avionics ServicesSingapore Pte. Ltd. Mr NgisaDirector of GoodrichAerostructures ServiceCenter–AsiaPte.Ltd., GoodrichAerostructures Service(China)Co. Mr NghasalsobeensecondedtoSIA,where heservedintheareas of Material ManagementandFleetManagement. was appointedVicePresident LineMaintenancein2011andVicePresident Information Technology in2015.Inaddition, in August1994andhasheldvariousseniorpositionsLineMaintenanceDivisionInformation Technology Division.He Mr NgwasappointedSeniorVicePresident Innovation, Technology &FleetManagementon1April2019.HejoinedSIAEC Senior VicePresidentInnovation, Technology &FleetManagement Mr NgJanLinWilin Ms NgholdsaBachelorof Accountancy(Honours)degree from theNational Universityof Singapore. Finance. MsNgisalsoaDirector of Aviation Partnership(Philippines)Corporation. was VicePresident Financeat SilkAir(Singapore) Private Limitedbefore shejoinedSIAEC on12April2017asVicePresident Ms NgjoinedSIAin1992asanAccountantandhasheldvariousappointmentswithintheGroup of Companies.She Ms NgwasappointedChiefFinancialOfficer ofSIAEC on1October2017. Senior VicePresidentFinance/ChiefFinancialOfficer Ms NgLayPheng Mr ChewTeck Soon Mr NgChinHwee Mrs ChristinaOng

The Company hasnoalternate Directors on itsBoard. During FY2018/19,theNominating Committeeheld3meetings,andalsoundertook,interalia,thefollowing: Thampuran, MrNgChinHweeandYau Seng,allof whomare willingtoserve. and Board Committee meetings, the Nominating Committee recommends the re-election of MrsChristinaOng,Dr Raj After assessingtheirrespective contributions,includingtheirattendance, preparedness, participation andcandourat Board Article 90of theCompany’sConstitution.MrChinYau Sengwillretire underArticle96of theCompany’s Constitution. (g) (f) (e) (d) (c) (b) (a) At the37 accordance withArticle96of theCompany’sConstitution. appointed after the last AGM will also retire and are eligible for re-election at the AGM following their appointment in election under Article 91, subject to the endorsement of the Nominating Committee and approval of theBoard. Directors Retiring Directors are thosewhohave servedlongestsincetheirlastelection.They are eligibletooffer themselves for re- Pursuant to Article 90 of the Company’s Constitution, one third of Directors for the time being shall retire at each AGM. Annual Report. will continuetodiscloseeachDirector’s listedcompanyboard directorships andprincipalcommitmentsintheCompany’s no necessity, for thetimebeing,tosetamaximum limitonaDirector’s otherlistedboard representations. TheCompany the view that each Director had carried out his/her duties adequately. Accordingly, theBoard has determined that there is each Director’s attendance at Board and Board Committee meetings for FY2018/19, the Nominating Committee was of his/her executive appointments, listed company board representations, otherprincipalcommitments,andtherecord of Having reviewed thecontributionsof eachDirector andhis/herattention totheaffairs of the Company, takingintoaccount of theCompanyindischarge of his/herdutiesasaDirector. independence. Every Director confirms annuallyinwritinghis/her availability andtimecommitmentto focus onthe affairs appointments, includinganycorporate developmentsrelating totheirexternalappointments,whichmayaffect their Chairman priortoacceptingotherboard directorships. Directors mustalsoimmediately report changesintheirexternal The Company has in place a policy whereby Directors consult the Chairman of the Board and theNominating Committee explained. The Nominating Committeealsoreviews compliancewiththeCoderequirements under itspurview, anddeviations are Annually andfrom timetotime,theNominating Committeeevaluates theneedtoappointaLeadIndependentDirector. Director. from 8October2018.Theappointmentwasapproved bytheBoard. MrChinYau Sengisconsidered aNon-Independent In September2018,theNominating Committeerecommended theappointmentof MrChinYau SengasDirector witheffect CORPORATE GOVERNANCE reviewed thecompliance of theNominating Committeewiththe relevant requirements of the Code. other Board appointments;and assessed ifaDirector wasabletoand hadcarriedouthis/herdutiesasDirector of theCompanyconsidering his/her considered ongoingtrainingof Directors, andrecommended suitabletraining programmes; considered andrecommended Directors toretire byrotation andseek re-election at theAGM; reviewed andaffirmed theindependence/non-independence ofeachDirector based onhis/herdeclaration; recommended theappointmentof MrChinYau SengasaDirector, with effect from 8October 2018; to reflect theskillsandexpertise of newappointees; reviewed thecompositionof theBoard andBoard Committees,Board size andtheSkillsMatrix, whichwasupdated th AGM tobeheldon19July2019,MrsChristinaOng,DrRajThampuranandMrNgChinHweewillretire under 65 ANNUAL REPORT 2018/19 66 SIA ENGINEERING COMPANY CORPORATE GOVERNANCE enable indirect investors,includingCPF tobeappointedasproxies toparticipate at shareholder meetings. Fund (“CPF”) Board are allowed to appoint more than two proxies toattend, speakandvote at general meetings. This will banks, capitalmarkets serviceslicenceholders whichprovide custodialservicesfor securitiesandtheCentralProvident multiple proxies regime introduced pursuanttotheCompanies(Amendment) Act2014,“relevant intermediaries”suchas Shareholders have theopportunitytoparticipate effectively inandvote at generalmeetings of shareholders. Underthe Company willendeavour todeclare dividendsat sustainablerates. cash requirements andexpansionplansindeclaringdividendsfor eachyear. Barringanyunforeseen circumstances, the The Companydoesnothave aformal dividendpolicy. TheBoard considers,interalia,theCompany’scapitalstructure, www.siaec.com.sg. The Company’sAnnualReportsandotherinformation of interest toinvestorsare postedon itswebsite. quarterly, mid-yearandfull-yearresults are publishedthrough SGXNETandpress releases, andontheCompany’swebsiteat meetings with analysts and investors are held to facilitate their understandingof the Company’s business. The Company’s year results, theCFOandkey managementrepresentatives alsomeetwithinvestorstoexplaintheresults. At other times, The Companyholdsanalystbriefings for itsmid-yearandfull-year results. Following the release of themid-yearandfull- The Companyiscommittedtothedisclosure of material orprice-sensitive information in aclear, detailedandtimelymanner. (Principles 14,15and16) MEETINGS SHAREHOLDER RIGHTS, COMMUNICATION WITHSHAREHOLDERS ANDCONDUCT OFSHAREHOLDER Risk ManagementCommittee,theCommittee andtheJointVentures RiskManagementCommittee. Management Committee,theStaff Committee,theInvestmentPartnershipReviewGroup with varyingfrequencies, from daily, weekly, bi-weeklytomonthly. TheseincludetheSeniorManagementCommittee, Management overseesspecificareas of theGroup’s operations andbusinessesthrough variouscommittees,holdingmeetings MANAGEMENT COMMITTEES its dailyoperations. the Board Committee’sdeliberation anddecision-makingenables the Companytodealwiththesematters expeditiouslyin The Board Committeehasrelieved theBoard of routine day-to-daymatters that require Board approval. Theswiftnessof meeting. approval are circulated andresolutions approved bytheBoard Committeeare reported totheBoard at thefollowing Board There isno Chairmanfor theBoard Committeeasthemembersdonotmeetinperson.PapersseekingBoard Committee’s Mr Stephen LeeChingYen steppeddownasamemberof theBoard Committeeon19July2018. Members: level of $1.5millionare referred totheSeniorManagementCommittee.Themembersof theBoard Committeeare: Board Committeealsoapproves capitalexpenditures from $1.5millionto$5.0million.Approvals of valuesbelowthebase nominations totheboards of key Group companiesandappointmentsof theCompany’scorporate representatives. The Company’s seal,authorisingspecific officers tosignpertinentdocumentsonbehalf oftheCompanyand approving decisions thereon, includingtheopeningof bankaccounts,affixing theCompany’ssealondocuments requiringthe The Board Committeedeputisesfor theBoard onroutine matters tofacilitate day-to-dayadministration andtoexpedite BOARD COMMITTEE Mr GohChoonPhong Mr Tang KinFei(appointed on19July2018) and shareholders’ queriesorcomplaintsassoonpossible. enable shareholders tocontacttheCompanyeasily. TheCompanyalsohasprocedures inplacefor addressing investors’ related information. Thecontactdetailsof theInvestorRelations teamare alsoavailable ontheCompany’swebsiteto The Company’swebsite has a dedicated “Investor Relations” link, whichfeatures thelatest and past financial results and Singapore whentradinginthe Company’soranyotherrelated corporation’s securities. considerations andtobe mindfulof theinsidertradingprohibitions undertheSecuritiesand Futures Act,Chapter 289of The Policy and Guidelines also remind employees and Directors to avoid trading intheCompany’ssecurities for short-term to theannouncementof full-yearresults. weeks priortotheannouncement of the Group’s results for thefirstthree quarters of thefinancialyear, andonemonthprior The PolicyandGuidelinesrestrict Directors andemployees from tradingintheCompany’ssecuritiesduringperiod two brought totheattention of employeeswhodonothave ready intranetaccess. heads of divisionsanddepartmentsare responsible for ensuringthat theinformation withinthePolicyand Guidelinesis securities (the“Policy andGuidelines”),whichare postedontheCompany’sintranetfor easyaccessbyemployees.The As prescribed intheListingManual,Companyhasadopted apolicyandguidelinesfor dealingsintheCompany’s SECURITIES TRANSACTIONS (g) (f) (e) (d) (c) (b) (a) timely basis: efficient use of technology. The following information is made available on the Company’s website and/or SGXNET on a of corporate governance,andaimstoprovide clearandcontinuousdisclosure of itscorporate governancepracticesthrough The Companyadoptstransparent, accountableandeffective communication practicesasa key meanstoenhancestandards meetings are madeavailable toshareholders onrequest. and externalauditorswillbeinattendance at thesemeetingstoaddress questionsfrom shareholders. Minutesof shareholder relevant questionsorseekingclarification onthemotionstabled at thesemeetings.TheChairman,Directors, Management these developments,aswellitsstrategic direction. Shareholders are encouragedtoparticipate insuchmeetingsbyraising updates shareholders onkey developmentsintheMROindustryandmeasures beingtaken bytheCompanytoaddress The AGM and/orextraordinary generalmeetingsare principalforums for dialoguewithshareholders. At eachAGM, theCEO for absentia voting,andafter theCompanyhasevaluated andputinplacethenecessarymeasures tofacilitate suchvoting. absentia. TheCompanywillconsideramendingitsConstitutioniftheBoard isof theviewthat there isjustifiabledemand each resolution. After themeeting, the results are postedonSGXNET. Currently, shareholders canvotebyproxy butnotin in thevotingprocess. Thenumberof votescastfor oragainsteachresolution isdisplayedimmediately after thevotingof website. Witheffect from the2012 AGM, theCompanyadoptedelectronic pollvotingbyshareholders for greater transparency proposed for the2019AGM, pleaserefer tothe‘Notice of AGM’ inthisAnnualReport,whichisalsofound ontheCompany’s At shareholder meetings,everyproposal requiring approval istabledasaseparate resolution. Fordetailsonresolutions CORPORATE GOVERNANCE Financial results. Press releases; and Company announcements; Letters andcirculars toshareholders; Annual Reports; Notices of shareholder meetings; Board of Directors andKey Executives’ profiles; 67 ANNUAL REPORT 2018/19 68 SIA ENGINEERING COMPANY • • Guideline 2.3 Directors makingupat least one-third of theBoard. There shouldbeastrong andindependentelementontheBoard, withIndependent Guideline 2.1 to dominate theBoard’sdecision-making. shares). No individual or small group of individuals should be allowed of the Company’s substantial shareholders (those whoown10%or more Management and the Company’s exercise objective judgement on corporate affairs independently, in particular, from There shouldbeastrongandindependentelementontheBoard,whichisableto Principle 2:BoardCompositionandGuidance Information on induction,orientation andtrainingprovided tonewandexistingDirectors. Guideline 1.6 approval. Disclosure in the Annual Report of the types of material transactions that require Board Guideline 1.5 the attendance of everyBoard memberat thesemeetings. The numberof meetings of theBoard and Board Committeesheldintheyear, aswell Guideline 1.4 certain Board matters. Delegation of authority, bytheBoard toanyBoard Committee,tomake decisionson Guideline 1.3 accountable totheBoard. Board workswithManagementtoachievethisobjectiveandremains The Board is collectively responsible for the long-term success of the Company. The CompanyshouldbeheadedbyaneffectiveBoardtoleadandcontroltheCompany.Every Principle 1:TheBoard’sConductofAffairs CORPORATE GOVERNANCE 2015). Thetablealsosetsoutspecificdisclosures stated intheAnnualReport,including key departures from theCode. relevant, theguidanceprovided bytheDisclosure Guideoncorporate governance issued bytheSGX-ST on29January The following tablesummarisestheCompany’scompliancewithCodeprinciples(andtakes intoaccount,where THE COMPANY’S COMPLIANCE ANDDISCLOSURE SCORE-CARD ONTHECODE him asindependentshouldbe disclosed. date of hisfirstappointment,isconsidered tobeindependent, thereasons for considering If anIndependentDirector, whohasservedontheBoard for more than9yearsfrom the Guideline 2.4 Code Principles&GuidelineswithSpecificDisclosureRequirements independent tobedisclosed. the nature of the Director’s relationship and the reasons for consideringhimas as stated intheCodethat wouldotherwisedeemaDirector nottobeindependent, A Director considered tobeindependentinspiteof theexistenceof arelationship Each Director considered tobeindependentbytheBoard; Compliance P P P P P P P P P P Page Reference 41-42 44 44 44 44 42 43 43 41 41 to theeffectiveness of theBoard; andifsuchassessment isbyanexternalfacilitator. Assessment of thecontributionsof theBoard, Board Committeesandindividual Directors Guideline 5.1 the Board. and itsBoardCommitteesthecontributionbyeach Directortotheeffectivenessof There shouldbeaformalannualassessmentoftheeffectiveness oftheBoardasawhole Principle 5:BoardPerformance Executive orconsidered bytheNCtobeindependent. Key information regarding Directors, includingwhichDirectors are Executive, Non- Guideline 4.7 including thesearch andnomination process. Process for the selection,appointmentandre-appointment of newDirectors totheBoard, Guideline 4.6 The maximumnumberof listedcompanyBoard representations whichDirectors mayhold. Guideline 4.4 of theNC, explainingitsrole and theauthoritydelegated toitbytheBoard. Names of themembersof theNominating Committee(“NC”) andthekey termsof reference Guideline 4.1 appointment ofDirectorstotheBoard. There shouldbeaformalandtransparentprocessfortheappointmentre- Principle 4:BoardMembership Independent Director. Every Companyshould appoint a Lead Independent Director where the Chairman is notan Guideline 3.3 members. Relationship betweentheChairmanandCEO where theyare immediate family Guideline 3.1 should representaconsiderableconcentration ofpower. and theexecutives business.Nooneindividual responsibleformanagingtheCompany’s There shouldbeacleardivisionofresponsibilitiesbetweentheleadershipBoard Principle 3:ChairmanandChiefExecutive Officer and customer-based experienceorknowledge. business ormanagementexperience,industryknowledge,strategic planningexperience Company. Theyshouldalsoprovide core competenciessuch asaccountingorfinance, an appropriate balanceanddiversityof skills,experience,genderandknowledgeof the The Board anditsBoard CommitteesshouldcompriseDirectors whoasagroup provide Guideline 2.6 CORPORATE GOVERNANCE Code Principles&GuidelineswithSpecificDisclosureRequirements Compliance P P P P P P P P P P – Page Reference 43, 74-85 64-65 64-65 64-65 45 45 65 45 45 45 44 69 ANNUAL REPORT 2018/19 70 SIA ENGINEERING COMPANY • • Guideline 9.1 management personnel,andperformance. enable investorstounderstandthelinkbetweenremuneration paidtoDirectorsandkey Annual Report. Itshouldprovidedisclosureinrelation toitsremuneration policiesto mix ofremuneration, andtheprocedureforsettingremuneration, intheCompany’s Companyshouldprovidecleardisclosureofitsremuneration policies,leveland Every Principle 9:DisclosureofRemuneration forthispurpose. paying morethanisnecessary management personneltosuccessfullymanagethecompany. Companiesshouldavoid motivate (a)theDirectorstoprovidegoodstewardshipof thecompany, and(b)key and riskpoliciesofthecompany, andshouldbeappropriate toattract, retainand The levelandstructureofremuneration shouldbealigned withthelong-terminterest Principle 8:LevelandMixofRemuneration the remuneration consultantshave anyrelationships withtheCompany. Names andfirmsof theremuneration consultants(ifany),includingastatement onwhether Guideline 7.3 reference of theRC, explainingitsrole andtheauthority delegated toitbytheBoard. Names of themembersof theRemuneration Committee(“RC”) andthekey termsof Guideline 7.1 Director shouldbeinvolvedindecidinghisownremuneration. remuneration and for fixing the remuneration packages of individual Directors.No There shouldbeaformalandtransparentprocedurefordevelopingpolicyonexecutive Principle 7:ProceduresforDevelopingRemuneration Policies Management shallprovide thesameinatimelymanner. be provided with such additional information as needed to make informed decisions. access toManagement.Directors are entitledtorequest from Managementandshould is tofulfilhisdutiesproperly. Hence,theBoard shouldhave separate andindependent enough inallcircumstances andfurtherenquiriesmayberequired iftheparticularDirector in atimelymanner. Relyingpurely onwhat isvolunteered byManagementisunlikely tobe Management hasanobligation tosupplytheBoard withcomplete,adequate information Guideline 6.1 to enable them to make informed decisions to discharge their duties and responsibilities. adequate andtimelyinformation priortoBoardmeetingsandonanon-goingbasissoas In ordertofulfiltheirresponsibilities,Directorsshouldbeprovidedwithcomplete, Principle 6:AccesstoInformation CORPORATE GOVERNANCE Code Principles&GuidelineswithSpecificDisclosureRequirements personnel. benefits that maybegrantedtoDirectors, theCEO andthetop5key management The aggregate amountof anytermination, retirement andpost-employment personnel of theCompany. Remuneration of Directors, theCEO andat leastthetop5key management Compliance P P P P P P P P P Page Reference 55-56 55-56 57-58 56-61 56-61 55, 61 59 46 46 • • other long-termincentives bonuses, benefits-in-kind,stockoptionsgranted,share-based incentivesandawards, and remuneration basis withabreakdown (inpercentage ordollarterms)of eachDirector’s andtheCEO’s Fully disclosetheremuneration of eachindividualDirector andtheCEO onanamed Guideline 9.2 performance, positionandprospects. The Boardshouldpresentabalancedandunderstandable assessmentoftheCompany’s Principle 10:Accountability were chosen,andastatement of whethersuchperformance conditionsare met. term incentiveschemesare subject,anexplanation onwhysuchperformance conditions out adescriptionof performance conditionstowhichentitlement short-termandlong- key managementpersonnel,andperformance. Theannualremuneration report shouldset More information onthelinkbetweenremuneration paidtotheExecutive Directors and Guideline 9.6 Details andimportanttermsof employeeshare schemes. Guideline 9.5 of remuneration shouldbeinincremental bandsof S$50,000. indication of theemployee’srelationship withtherelevant Director ortheCEO. Disclosure Director ortheCEO, andwhoseremuneration exceeds S$50,000duringtheyearwithclear Details of the remuneration of named employees who are immediate familymembers of a Guideline 9.4 • • Guideline 9.3 CORPORATE GOVERNANCE Code Principles&GuidelineswithSpecificDisclosureRequirements CEO’s remuneration. Directors’ remuneration; to thetop5key managementpersonnel. In addition,theCompanyshoulddiscloseinaggregate thetotalremuneration paid share-based incentivesandawards, andotherlong-termincentives. or performance-related income/bonuses,benefits-in-kind,stockoptionsgranted, management personnel’sremuneration earnedthrough base/fixed salary, variable in bandsof S$250,000withabreakdown (inpercentage ordollarterms)of eachkey Name anddisclosetheremuneration of at leastthetop5key managementpersonnel earned through base/fixed salary, variableorperformance-related income/ Compliance P P P P P P P P Page Reference 60-61 58 59 46 61 58 57 57 71 ANNUAL REPORT 2018/19 72 SIA ENGINEERING COMPANY resourced andindependentoftheactivitiesitaudits. The Companyshouldestablishaneffectiveinternalaudit functionthat isadequately Principle 13:InternalAudit standards andissueswhichhave adirect impactonfinancialstatements. Summary of theAC’s activities and measures taken tokeep abreast of changesto accounting Guideline 12.8 The existenceof awhistle-blowingpolicy. Guideline 12.7 statement. of fees paid in total for audit and non-audit services respectively, or an appropriate negative Aggregate amount of fees paid to the external auditor for that financial year, and breakdown Guideline 12.6 role and theauthoritydelegated toitbytheBoard. Names of the members of theAC and the key termsof reference of theAC, explainingits Guideline 12.1 its authorityandduties. The BoardshouldestablishanAC withwrittentermsofreferencewhichclearlysetout Principle 12:AuditCommittee(“AC”) • • Guideline 11.3 its strategic objectives. nature andextentofthesignificant risks whichtheBoardiswillingtotake inachieving assets,andshoulddeterminethe safeguard shareholders’interestsandtheCompany’s Management maintainsasoundsystemofriskmanagementandinternalcontrolsto The Boardisresponsibleforthegovernanceofrisk.shouldensurethat Principle 11:RiskManagementandInternalControls CORPORATE GOVERNANCE Code Principles&GuidelineswithSpecificDisclosureRequirements (b) (a) CEO and theCFO: The Board shouldalsocommentonwhetherithasreceived assurancefrom the controls, andriskmanagementsystems. controls, includingfinancial,operational, complianceandinformation technology The Board should commentontheadequacyandeffectiveness of theinternal control systems. regarding theeffectiveness of theCompany’sriskmanagementandinternal and statements givetrueandfairviewof theCompany’soperations andfinances; that thefinancialrecords have beenproperly maintainedandthefinancial Compliance P P P P P P P P P Page Reference 47-50, 52-54 50, 54 50-53 50-53 50-53 54 53 52 52 Companies shouldallowfor absentiavotingat generalmeetingsof shareholders. Guideline 16.1 various matters affecting theCompany. shareholders, and allowshareholders the opportunitytocommunicate theirviewson Companies shouldencouragegreater shareholderparticipation at generalmeetingsof Principle 16:ConductOfShareholderMeetings • • Guideline 15.5 investor roadshows orInvestors’Daybriefings. Steps taken tosolicitandunderstandshareholders’ views,egthrough analystbriefings, Guideline 15.4 relations policytopromoteregular, effectiveandfaircommunication withshareholders. Companies shouldactivelyengagetheirshareholdersandputinplaceaninvestor Principle 15:Communication withShareholders proxies. Allow corporations whichprovide nomineeorcustodialservicestoappointmore than2 Guideline 14.3 update suchgovernancearrangements. protect andfacilitate theexercise ofshareholders’rights,andcontinuallyreview Companies should treat all shareholders fairly and equitably, and should recognise, Principle 14:ShareholderRights CORPORATE GOVERNANCE Code Principles&GuidelineswithSpecificDisclosureRequirements Where dividends are notpaid,theCompanymustdiscloseitsreasons. communicate ittoshareholders. Companies are encouragedtohave apolicyonpaymentof dividendsandshould Compliance P P P P P P – – Page Reference 66-67 66-67 66-67 67 67 66 66 66 73 ANNUAL REPORT 2018/19 74 SIA ENGINEERING COMPANY 23. 22. 21. 20. 19. 18. 17. 16. 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Directorships/Appointments inthepast3years 6. 5. 4. 3. 2. 1. Other PrincipalCommitments - - Academic andProfessionalQualifications: Age: 68 Shiu Hospital,acharitablehospitalwhichprovides care for needypatients. the National Research Foundation, theCouncilChairmanof NgeeAnnPolytechnic andViceChairmanof theKwong Wai intent. HeisalsoaDirector of SummitPowerInternational Ltd andSingapore Cooperation Enterprise,aBoard Memberof Mr Tang iscurrently theChairmanof Singapore LNGCorporation PteLtd, amajorenergy infrastructure project withstrategic Managing Director of Wescon Asiaandaproject engineerinEsso Singapore. energy andwater playerwithasizeable portfolio of assetsandcapabilities.Before joiningSembcorp,MrTang wasthe Executive Officer, Mr TangheadedSembcorp’sutilitiesbusinessonJurong IslandinSingapore, which grew intoaglobal international energy, water, marine and urbandevelopment group. PriortohisappointmentasGroup President andChief Mr Tang, whowaswiththeSembcorpGroup for 30years,hasbeencredited withdrivingitstransformation intoan 31 May2017. on 31March 2017. Hethenremained asanAdvisorandanon-executive Director ontheBoard of SembcorpIndustriesuntil He wastheGroup President andChiefExecutive Officer ofSembcorpIndustries Ltd from 1May2005untilhis retirement Mr Tang KinFeiwasappointedDirector andDeputyChairmanon8May2017subsequently, asChairmanon 19July2018. Non-executive andIndependentDirector CHAIRMAN, COMPENSATION &HRCOMMITTEE CHAIRMAN, BOARD OF DIRECTORS MR TANG KINFEI FURTHER INFORMATION ONBOARD OFDIRECTORS CORPORATE GOVERNANCE Singapore ChineseChamber of Commerce and Industry Shenzhen ChiwanSembawang Engineering Company Limited Climate ChangeNetwork, National Climate ChangeSecretariat Nanyang Technological University Defence Science&Technology Agency Board Penglai JutalOffshore EngineeringHeavy Industry Co. Ltd Green Infra Limited Sembcorp Gayatri PowerLimited Thermal PowertechCorporation India Limited Sembcorp Utilities(UK)Limited Sembcorp SalalahPowerand Water CompanySAOG P.T. AdhyaTirtaBatam Sembcorp (China)HoldingCo.,Ltd Sembcorp RenewablesPteLtd Sembcorp CogenPteLtd Sembcorp GasPteLtd Sembcorp Environment PteLtd Sembcorp UtilitiesPteLtd Sembcorp Properties PteLtd Singapore-Sinchuan InvestmentHoldings PteLtd Sembcorp DevelopmentLtd Sembcorp MarineLtd Sembcorp IndustriesLtd National Research Foundation Kwong Wai ShiuHospital Ngee AnnPolytechnic Singapore Cooperation Enterprise Summit PowerInternational Ltd Singapore LNG Corporation PteLtd Advanced ManagementProgramme, INSEAD, France Bachelor of MechanicalEngineering(1 Organisation/Company Company st ClassHonours),Universityof Singapore Title Title Council Member Chairman Member Chairman, College AdvisoryBoard Board Member Vice Chairman Chairman Chairman Chairman Chairman Chairman Commissioner Chairman Director Chairman Chairman Chairman Chairman Director Director Director Director Director Board Member Vice-Chairman Council Chairman Director Director Chairman 3. 2. 1. Directorships/Appointments inthepast3years 2. 1. Other PrincipalCommitments ------Academic andProfessionalQualifications: Age: 67 and accounting,managementtrainingsoundcorporate governancepractice. deep knowledgeandanextensiveexperienceonbusinesscapitalstructures, strategies andrisks, financemanagement known asPricewaterhouseCoopers. His38-yearcareer ininternational auditingandaccountinghasequippedhimwitha to theUSfirmupskillhisknowledgeandexperienceincybersecurity. He retired inDecember2009from thefirm,now Certified andChartered Accountantin1976, andwasadmittedasanauditpartnerin1985 following aoneyear attachment in the auditing profession. He joined the Singapore firm of Coopers & Lybrand in January 1972, qualified in its UK firm as a Mr ChewjoinedtheBoard asanIndependentDirector on1May2013. Hedevotedalmost38yearsof international experience Non-Executive andIndependentDirector CHAIRMAN, AUDIT COMMITTEE MR CHEWTECKSOON CORPORATE GOVERNANCE

The Tanglin Club JW MarriottPhuket BeachClub IL&FS WindPowerManagementPteLtd Stroke SupportStation Ltd Leap Philanthropy Ltd Organisation/Company Organisation/Company Executive MBAProgramme of INSEAD-Coopers &Lybrand Executive MBAProgramme of Stanford-NUS Accountants) Fellow, Instituteof CertifiedPublicAccountantsSingapore (nowknownasInstitute of Singapore Chartered Chartered Accountants) Certified PublicAccountant,Institute of CertifiedPublicAccountants Singapore (nowknownasInstitute ofSingapore Fellow, Chartered Association of CertifiedAccountants,UK Graduate Certificate inInternational Arbitration, Law Faculty, National University of Singapore Certified Information Systems Auditor, EDPAuditorsAssociation Inc,USA Chartered Certified Accountant(ACCA), Association of Chartered CertifiedAccountants,UK Chairman, AuditCommittee Chairman, AdvisoryCommittee Director andChairman,AuditCommittee Title Director andChairman,AuditCommittee Director andChairman,AuditCommittee Title 75 ANNUAL REPORT 2018/19 76 SIA ENGINEERING COMPANY 2. 1. Directorships/Appointments inthepast3years 9. 8. 7. 6. 5. 4. 3. 2. 1. Other PrincipalCommitments 3. 2. 1. Current DirectorshipsInOtherListedCompanies - - - Academic andProfessionalQualifications: Age: 67 She isalsoaTrustee of theStephen A.SchwarzmanScholarsTrust. The MonetaryAuthorityof Singapore, andamemberof theSupervisoryCommitteeof theABFSingapore BondIndexFund. Mrs Ongisamemberof theCorporate GovernanceAdvisoryCommittee,whichisastandingcommitteeestablishedby Eastern DevelopmentPteLtd andEasternDevelopmentHoldingsPteLtd (companiesassociated withAllen&GledhillLLP). Land HoldingsLimitedandEpimetheusLtd. SheisalsoaDirector of Allen &GledhillRegulatory &CompliancePteLtd, Mrs Ongiscurrently aDirector of Oversea-Chinese BankingCorporation Ltd, Singapore Ltd, Hongkong companies. of debtandequityissues.Sheprovides corporate andcorporate regulatory andcomplianceadvice,particularlytolisted securities regulations, investmentfunds,capitalmarkets andcorporate finance.Shehasbeeninvolvedinabroad range she headed the Financial Services Department for many years. Her areas of practice include banking, securities offerings, Mrs OngwasappointedDirector on1January2014. SheisCo-Chairman andSeniorPartnerof Allen&GledhillLLP, where Non-Executive andIndependentDirector CHAIRPERSON, NOMINATING COMMITTEE MRS CHRISTINA ONG CORPORATE GOVERNANCE Corporate GovernanceAdvisoryCommittee ABF Singapore BondIndexFund Catalyst AdvisoryPanel The Stephen A.SchwarzmanScholarsTrust Epimetheus Ltd Eastern DevelopmentHoldingsPte.Ltd. Eastern DevelopmentPteLtd Allen &GledhillRegulatory &CompliancePte.Ltd. Allen &GledhillLLP Hongkong LandHoldingsLimited Singapore Telecommunications Ltd Oversea-Chinese BankingCorporation Ltd Trailblazer Foundation Ltd Singapore Tourism Board Organisation/Company Organisation/Company Company Member, International BarAssociation Member, LawSocietyof Singapore Bachelor of Laws,LLB(Honours)(SecondUpper),National Universityof Singapore Director Board Member Title Member Member, SupervisoryCommittee Member Trustee Director Director Director Director Co-Chairman &SeniorPartner Title Director Director Director Title

3. 2. 1. Directorships/Appointments inthepast3years 26. 25. 24. 23. 22. 21. 20. 19. 18. 17. 16. 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Other PrincipalCommitments - - Academic andProfessionalQualifications: Age: 59 Director of Preussag SEA,adiversifiedGermanconglomerate. Khiatani alsoservedseveralyearsastheManaging also incharge of theEDB’s operations inthe Americas andEurope. Mr including aerospace, electronics, offshore andmarine,logistics,infocomms andmedia,cleantechnology. Hewas (EDB). Duringhistenure inEDB, heplayedaninstrumentalrole inthedevelopmentandtransformation of importantsectors in Singapore. PriortoJTC, MrKhiatani wasthe DeputyManagingDirector of theSingapore Economic DevelopmentBoard Town Corporation (JTC), where hespearheadedthedevelopmentof infrastructure solutionsfor variousindustrialsectors across Asia and assets under management exceeding S$20 billion. He was previously the Chief Executive Officer of Jurong Singbridge PteLtd, aleadingprovider of integrated urbandevelopmentandbusinessspacesolutionswithawidepresence Mr ManoharKhiatani wasappointedDirector on1April2013. He istheDeputyGroup ChiefExecutive Officer ofAscendas- Non-executive andIndependentDirector &RISKCOMMITTEE CHAIRMAN, BOARD SAFETY MR MANOHARKHIATANI CORPORATE GOVERNANCE Jilin FoodZone PteLtd Ascendas-Singbridge Pte. Ltd. Ascendas-Singbridge Holdings PteLtd Singapore Amaravati InvestmentHoldingsPteLtd Ascendas IndiaLogisticsPteLtd Ascendas Development(Holdings)PteLtd Ascendas LandInternational (Investments)Pte.Ltd. Ascendas Asia-Pacific (Holdings) Pte Ltd Ascendas ITPark(Chennai)Limited Information Technology Park Limited Nusajaya Tech Park SdnBhd Ascendas HospitalityTrust Management PteLtd Ascendas HospitalityFund ManagementPteLtd Ascendas Funds Management(S)Ltd Ascendas Property Fund Trustee PteLtd Ascendas-Citramas PteLtd Ascendas MediaHubPteLtd Ascendas () Pte Ltd Ascendas VietnamInvestmentsPteLtd Ascendas (China)PteLtd Ascendas Frasers PteLtd Ascendas DevelopmentPteLtd Ascendas Land(Singapore) PteLtd Ascendas LandInternational PteLtd Ascendas InvestmentPteLtd Ascendas PteLtd Ascendas India LogisticsHoldingsPteLtd Ascendas Holdings (Manila)PteLtd ASB FlexPte.Ltd. Organisation/Company Organisation/Company Advanced ManagementProgram, Harvard BusinessSchool Master of Science(Naval Architecture), Universityof Hamburg, Germany Director Director Director Title Alternate Director Alternate Director Director Chairman /Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Title 77 ANNUAL REPORT 2018/19 78 SIA ENGINEERING COMPANY 2. 1. Directorships/Appointments inthepast3years 5. 4. 3. 2. 1. Other PrincipalCommitments 2. 1. Current DirectorshipsInOtherListedCompanies - - - - Academic andProfessionalQualifications: Age: 55 Orient Aviation magazinein2018. named ‘Outstanding ChiefExecutive Officer ofthe Year’intheSingapore Business Awards 2017and 'Person ofthe Year'by well asthe‘Eisenhower Global Innovation Award’ from theBusinessCouncilfor International Understanding.Hewas also Award’. In2016, hereceived the‘CEO Lifetime AchievementAward’ from theAirline PassengerExperienceAssociation as of industriesaround theworld.Hewas2015recipient of theCentre for Aviation’s ‘Asia-Pacific AirlineCEO of the Year Mr Gohisalsoamemberof theMITPresidential CEO AdvisoryBoard, madeupof CEOs from leadingcompaniesinavariety Pacific Airlines. of Governorsof theInternational AirTransport Association andisontheExecutive Committeeof theAssociation of Asia Mastercard Incorporated, amemberof theBoard of Trustees of theNational Universityof Singapore, amemberof theBoard Mr GohistheChairmanof BudgetAviation HoldingsPteLtd, whichownsandmanagesScoot.HeisalsoaDirector of Senior VicePresident Information Technology from 2003to2004. as President of Pte Ltd from 2006 to 2010, Senior Vice President Finance from 2004 to 2006 and Executive Officer ofSingapore Airlines,MrGohwas Executive Vice President forMarketing andtheRegions.Healsoserved overseas, rangingfrom Marketing toInformation Technology toFinanceandCargo. PriortohisappointmentasChief Ltd. He joinedSingapore Airlinesin1990andhasheldseniormanagementpositionsvariousdivisionsSingapore and Mr GohwasappointedDirector on1January2011.HeisaDirector andtheChiefExecutive Officer ofSingapore Airlines Non-executive andNon-independentDirector MR GOHCHOONPHONG CORPORATE GOVERNANCE Massachusetts Instituteof Technology National Universityof Singapore International AirTransport Association Budget Aviation HoldingsPteLtd Massachusetts Instituteof Technology Bachelor of ScienceinCognitive Bachelor of ScienceinManagement Bachelor of ScienceinComputer&Engineering Master of ScienceinElectricalEngineeringandComputer Singapore AirlinesLtd Mastercard Incorporated National Councilof SocialService International AirTransport Association Organisation/Company Association of AsiaPacificAirlines Organisation/Company Company @ SG50Steering Committee Member, Care &Share Chairman, Board of Governors Title Executive CommitteeMember Member, Presidential CEO AdvisoryBoard Member, Board of Trustees Member, Board of Governors Chairman Title Director andChiefExecutive Officer Director Title 1. Directorships/Appointments inthepast3years 4. 3. 2. 1. Other PrincipalCommitments - - Academic andProfessionalQualifications: Age: 58 Council, Trade andConnectivitySub-Committee. the AdvisoryCouncilonCommunityRelations inDefence (Employerand Business)andamemberof theFuture Economy Mr Ngispresently aDirector of BudgetAviation HoldingsPteLtd andNokScootAirlinesCoLtd. Heisalsoamemberof Operations, andHumanResources. 2011 andcurrently takes charge of thedivisions of CabinCrew, Engineering,FlightOperations, CustomerServicesand Planning on1January2008. HewasappointedExecutive VicePresident HumanResources andOperations on1February Terminal ServicesLtd (SATS). HeleftSATS torejoin Singapore AirlinesasExecutive VicePresident for HumanResources and In 2004, hereturned toSingapore totake upthepositionof President &ChiefExecutive Officer ofSingapore Airport and overseas. Singapore AirlinesLtd. HejoinedSingapore Airlinesin1985andhasbeenappointedtovariousseniorpositionsSingapore Mr NgwasappointedDirector on18July2008. HeistheExecutive VicePresident for HumanResources andOperations in Non-executive andNon-independentDirector MR NGCHINHWEE CORPORATE GOVERNANCE Future Economy Council, Trade andConnectivitySub-Committee (Employer andBusiness) Advisory CouncilonCommunityRelations inDefence NokScoot AirlinesCoLtd Budget Aviation HoldingsPteLtd Singapore Airlines Cargo PteLtd Organisation/Company Organisation/Company Bachelor of Engineering(1stClassHonours),National Universityof Singapore Master of ScienceinManagement,MassachusettsInstituteof Technology, USA Chairman Title Member Member Director Director Title 79 ANNUAL REPORT 2018/19 80 SIA ENGINEERING COMPANY Other PrincipalCommitments - - - - Academic andProfessionalQualifications: Age: 55 Agency andaDirector of AdvancedMicro FoundryPteLtd. Dr ThampuranisalsotheChairmanof ExploitTechnologies PteLtd, aBoard Memberof theDefence ScienceandTechnology policy makers andMinistryofficials toestablishA*STAR’s contributionstothe National R&D Framework,amongstothers. R&D portfolio andindustrydevelopmentefforts undertheInstitute of HighPerformance Computing;andinteractedwith and variousschemestosupportR&Dinvolvingtheuniversitiesotherinstitutionsof higherlearning;spearheadedthe capability development efforts of public sectorperformers inareas identified for technological growth; developedinitiatives was involvedinplanningandestablishingtheframeworkfor Research Councils;helpedtoplan,manageandsupportthe the Instituteof HighPerformance Computing,andinplanningpolicy. Inthesepositionsandcapacities,DrThampuran Technology PlanningUnit,andhasheldvariousexecutive positionsintheElectronics, EngineeringandChemicalsclusters, Director of the Agency for Science, Technology and Research (A*STAR). Dr Thampuran joined A*STAR in 2000 as Head of the Dr ThampuranwasappointedDirector on1September2016. Heiscurrently theManagingDirector aswellaBoard Non-executive andIndependentDirector DR RAJTHAMPURAN CORPORATE GOVERNANCE 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Exploit Technologies PteLtd Agency for Science,Technology &Research Defence ScienceandTechnology Agency Advanced Micro FoundryPteLtd D3 Steering Committee ASEAN CommitteeonScience&Technology Nanyang Technological University National Universityof Singapore (Faculty of Engineering) Tropical MarineScienceInstitute Committee onAutonomousRoadTransport for Singapore College AdvisoryBoard for theCollegeof Engineering(NTU) NUS EngineeringFaculty Advisory Board Advisory Committeefor BioengineeringEducation (NTU) Digital Economy Committee The Institutionof Engineers(IES)–Collegeof Fellows(CoF)Board Organisation/Company Fellow, Singapore Academyof Engineers Advanced ManagementProgramme, INSEAD(Fountainbleu) PhD inMaterials Science–PostdoctoralFellowship Bachelor of MechanicalEngineering(Honours) Title Chairman Board Member Board Member Director Chairman Chairman Adjunct Professor Adjunct Professor Member of ManagementBoard Member Chairman Member Member Member Member 7. 6. 5. 4. 3. 2. 1. Other PrincipalCommitments 1. Directorships/Appointments inthepast3years Current DirectorshipsInOtherListedCompanies - - - Academic andProfessionalQualifications: Age: 58 Mr Wee isalsoaDirector of Mapletree LogisticsTrust ManagementLtd. stints intheUnitedStates of America,China,Europe andSingapore. Technologies, MrWee heldappointments inengineering,businessdevelopmentandmanagement,includingoperating Pte Ltd, thepredecessor companyof Singapore Technologies Aerospace Ltd. Duringhis25-yearcareer withSingapore neering Ltd. MrWee startedhiscareer withSingapore Technologies in1984 as anengineerinSingapore Aircraft Industries Prior tohiscurrent position,MrWee wasDeputyCEO andPresident (Defence Business)of Singapore Technologies Engi- a paintsandcoatings companywith77manufacturingfacilitiesandoperations spanning17countriesandregions inAsia. Mr Wee SiewKimwasappointedDirector on8May2017. Heiscurrently theGroup ChiefExecutive Officer ofNIPSEA Group, Non-executive andIndependentDirector MR WEESIEWKIM CORPORATE GOVERNANCE 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Nippon Paint(Foshan) CoLtd Nippon Paint(Shanghai) Research &DevelopmentCoLtd Nippon PaintNewMaterials (Wuhan) CoLtd Langfang NipponPaintLidong CoLtd 1988 JVPteLtd (InMembers’Voluntary WindingUp) SBS Transit Ltd ES Group (Holdings)Limited Organisation/Company Mapletree Logistics Trust ManagementLtd Company Fellow, CityandGuildsof LondonInstitute Master of BusinessAdministration, Graduate Schoolof Business,Stanford University Bachelor of ScienceinAeronautical Engineering(Honours),ImperialCollegeof ScienceandTechnology Organisation/Company Asia IndustriesLtd Nippon Paint(Singapore) CompanyPrivate Limited Nippon Paint (Vietnam) CompanyLtd Nippon Paint(Vietnam) Nippon PaintVietnam(Hanoi)PteLtd Nippon Paint()SendirianBerhad Paint Marketing Company(M)SdnBhd Nippon Paint (Thailand) CompanyLtd Nippon Paint(Thailand) Nipsea ChemicalKorea Nippon Paint(HK)CoLtd Nippon Paint(China)CoLtd Nippon Paint(India)PvtLtd Nippon PaintAndSurfaceChemicalsPvtLtd Guangzhou NipponPaintCoLtd Nippon Paint(Chengdu)CoLtd Nippon Paint(HK)CoLtd Taiwan Branch Nippon Paint (Tianjin) CoLtd Nippon Paint(Tianjin) Yashili Paint(Suzhou)CoLtd Langfang NipponPaintCoLtd Title Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. Organisation/Company BK &NPAutomotiveCoatings (Shanghai) CoLtd Nippon Paint(Pakistan)Limited Nippon PaintIndustrialCoatings (Shanghai) CoLtd Nippon PaintChinaHoldingsCoLtd Nippon Paint(Zhengzhou)CoLtd Nippon Paint(Hebei)CoLtd Nippon Paint Decorative Coatings (Thailand) CoLtd Nippon PaintDecorative Coatings (Thailand) NP AutoRefinishesCo Ltd Nippon Paint(Shenyang)CoLtd Nippon PaintLanka (Private) Ltd Nippon PaintBangladeshPvtLtd Nippon Paint(Kunming) CoLtd Nippon Paint(HuBei)CoLtd Nippon PaintNewMaterials (Shanghai)CoLtd Nippon PaintMalaysia(S)PteLtd HSJ PteLtd Nippon PaintEngineeringMaterials (Guangzhou)CoLtd Nippon PaintDecoration Materials (Guangzhou)CoLtd Director Director Director Director Director Director Chairman Title Director Title Title Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director 81 ANNUAL REPORT 2018/19 82 SIA ENGINEERING COMPANY 1. Directorships/Appointments inthepast3years 3. 2. 1. Other PrincipalCommitments - - Academic andProfessionalQualifications: Age: 47 & Travel PteLtd. on theSingapore Exchange), ChinaCargo AirlinesCompanyLtd, AbacusInternational HoldingsLtd andTradewinds Tours the International Air Transport Association (IATA). He was previously a Director of Ltd (then listed Mr ChinisaDirector of Singapore AirlinesCargo PteLtd andKrisshopPte.Ltd, andamemberof the Cargo Committeeof President Sales&Marketing from 2012 to 2014. Holdings Ltd from 2011to2012aswellinotherseniorexecutive roles inSingapore Airlines, includingasSeniorVice Mr ChinhasalsoservedasChiefExecutive Officer ofSilkAir(Singapore) Pte Ltd from 2007to2010andTigerAirways Airlines. Priortothat, hewasPresident of Singapore AirlinesCargo PteLtd from May2014. Ltd, which isapositionthat hehasheldsinceApril2018whenSIACargo wasreintegrated asadivisionwithinSingapore Mr ChinwasappointedDirector on8October2018. MrChiniscurrently SeniorVicePresident Cargo of Singapore Airlines Non-executive andNon-independentDirector MR CHINYAU SENG CORPORATE GOVERNANCE School of Hospitality, RepublicPolytechnic Organisation/Company International AirTransport Association Emporium (Private) Limited) (formerly knownasSingapore AirportDuty-Free KrisShop Pte.Ltd. Singapore Airlines Cargo PteLtd Organisation/Company Bachelor of ScienceinEconomics (Accounting&Finance),TheLondonSchoolof Economics &PoliticalScience Master of ScienceinOperational Research Member, SchoolAdvisoryCommittee Title Member, Cargo Committee Director Director Title Directorships/Appointments inthepast3years 3. 2. 1. Other PrincipalCommitments - - Academic andProfessionalQualifications: Age: 60 Limited, andaDirector of SIAEngineering(Philippines)Corporation. Mr PngistheDeputyChairmanof BoeingAsiaPacific Aviation ServicesPte. Ltd. andSingapore Aero EngineServicesPrivate and SeniorVicePresident Servicesin2001. ations in2010, SeniorVicePresident Aircraft andComponentServicesin2009, SeniorVicePresident Commercial in2005 Prior tohisappointmentasChiefExecutive Officeron1April2015, MrPngwas appointed Executive Vice President Oper joined Singapore Airlinesin1975andhashad44yearsof experienceintheaerospace industry. Mr PngwasappointedDirector on1November2016. HeistheChiefExecutive Officer ofSIAEngineeringCompany. He Non-independent DirectorandChiefExecutive Officer MR PNGKIMCHIANG CORPORATE GOVERNANCE 1. Bachelor of ScienceinComputation, Universityof ManchesterInstituteof ScienceandTechnology Master of BusinessAdministration, National Universityof Singapore Hong Kong Aero EngineServices Ltd SIA Engineering(Philippines)Corporation Singapore Aero EngineServicesPteLtd Boeing AsiaPacific Aviation ServicesPte Ltd Organisation/Company Organisation/Company Director Title Director Deputy Chairman Deputy Chairman Title - 83 ANNUAL REPORT 2018/19 84 SIA ENGINEERING COMPANY 2. 1. Directorships/Appointments inthepast3years 17. 16. 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Other PrincipalCommitments 1. # Current DirectorshipsInOtherListedCompanies - Academic andProfessionalQualifications: Age: 71 Nominated Memberof Parliamentfrom 1994to1997. in 2007, theSingapore DistinguishedServiceOrder in2006, andtheSingapore Public ServiceStar in1998. Hewasa the DistinguishedComradeof LabourAward in2015, thePeople’sRepublicof ChinaFriendship Award toForeign Experts conferred oneof Singapore’s higheststate awards, theOrder of NilaUtama(FirstClass),in2015. Hewasalsopresented Singapore BusinessFederation, from 2002to2008, andInternational EnterpriseSingapore, from 1995to2002.MrLeewas Mr LeewasthePresident of theSingapore National EmployersFederation from 1988to2014, andChairman of the Limited, andaMemberof theCouncilof Presidential Advisers. Ltd (Taiwan) andGreat MalaysiaTextile InvestmentsPteLtd, aDirector of CapitaLandLtd andTemasek Holdings(Private) operative Ltd andTripartite AllianceLimited.HeisalsotheManagingDirector of ShanghaiCommercial &Savings Bank December 2016. Heiscurrently Chairmanof ShanghaiCommercial BankLtd (HongKong), NTUCIncomeInsuranceCo- appointments andretired asChairmanon19July2018. Hewaspreviously theChairmanof Singapore AirlinesLtd until31 Mr LeewasappointedDirector on1December2005andChairmanJanuary2006. Herelinquished allhisCommittee Non-executive andNon-independentDirector CHAIRMAN, COMPENSATION (until19July2018) &HRCOMMITTEE CHAIRMAN, BOARD OF DIRECTORS (until19July2018) MR STEPHENLEECHINGYEN CORPORATE GOVERNANCE The information isaccurate asat 19July 2018 Master of BusinessAdministration, NorthwesternUniversity, Illinois China National Petroleum Corporation, Beijing Singapore AirlinesLtd Council of Presidential Advisers,Singapore Dr GohKeng Swee ScholarshipFund NTUC-ARU (Administration &Research Unit) (Private) Ltd NTUC EnterpriseCo-operative Ltd Singapore LabourFoundation Kidney DialysisFoundation MS Property ManagementPteLtd Ophir-Rochor InvestmentsPteLtd Marina SouthInvestmentsPteLtd G2000 Apparel (S)PteLtd M+S PteLtd Tripartite AllianceLimited Shanghai Commercial BankLtd, HongKong NTUC IncomeInsuranceCo-operative Ltd Shanghai Commercial &Savings BankLtd, Taiwan Great MalaysiaTextile Investments PteLtd CapitaLand Ltd Organisation/Company Organisation/Company Company # Director Chairman Title Member Board Member Member, Board of Trustees Director Director Director Director Director Director Director Director Deputy Chairman Chairman Chairman Chairman Managing Director Managing Director Title Director Title Directorships/Appointments inthepast3years 3. 2. 1. * 5. 4. 3. 2. 1. Other PrincipalCommitments ------Academic andProfessionalQualifications: Age: 71 an AdvisortotheSingapore Instituteof International Affairs. Mr Tong isaDirector of ITE Education ServicesPteLtd, amemberof theBoard of Trustees of theNTUC-U Care Fund and Award at NTUCMay Day2010. the Singapore PublicServiceMedalat the1999National DayAward. Hewasawarded theMedalof Commendation (Gold) Mr Tong wasappointedCommanderof theVolunteer from 1995-2001andwashonoured SpecialConstabulary(VSC) with until 31January2016. 2011 to 2014. Upon his retirement on 1 February 2014, he was appointedSeniorAdvisorof Keppel Offshore & Marine Ltd Marine. HewasalsoanExecutive Director of Ltd from 2009to2011andSeniorExecutive Director from January 2009to1February2014 andwasresponsible for theoverallmanagementandoperations of Keppel Offshore & Board Safety &RiskCommitteeon1June2018. HewasChiefExecutive Officer of KeppelOffshore &Marine Ltd from1 Mr Tong was appointed Director on 1 June 2014. He relinquished his Directorship and appointmentasChairman of the Non-executive andIndependentDirector (until1June2018) &RISKCOMMITTEE CHAIRMAN, BOARD SAFETY MR TONGCHONGHEONG* CORPORATE GOVERNANCE

The information isaccurate asat 1June2018 Singapore Instituteof International Affairs NTUC-U Care Fund ITE Education ServicesPteLtd Institute of Technical Education Singapore MaritimeInstitute KOM Alumni Keppel Infrastructure Holdings PteLtd Keppel Integrated Engineering Ltd Organisation/Company Organisation/Company Member, AmericanBureau of Shipping Member, Societyof Naval Architects andMarineEngineers(USA) Fellow, Societyof Project Managers Fellow, Instituteof MarineEngineering,Science&Technology Fellow, Singapore Instituteof Directors Diploma inManagementStudies, TheUniversityof ChicagoGraduate BusinessSchool Graduate, Stanford-NUS Executive Programme Graduate, ManagementDevelopmentProgramme, Harvard BusinessSchool Title Advisor Member, Board of Trustees Director Title Member, Board of Governors Member, GoverningCouncil Chairman Director Director 85 ANNUAL REPORT 2018/19 86 SIA ENGINEERING COMPANY FINANCIAL STATISTICS R6 R5 R4 R3 R2 R1 Notes: # proposed Revenue Financial Results ($million) STATISTICAL HIGHLIGHTS Interim dividend Dividends (centspershare) Value added($million) Value addedperemployee($) Revenue peremployee($) Average numberof employees ANDEMPLOYEEPRODUCTIVITY DATA Expenditure Final dividend Net assetvalue Earnings after tax-diluted Earnings after tax-basic Per ShareData (cents) Operating profit Profit before taxation Profit attributable toowners of theparent Return onequityholders'funds(%) Total assets Equity attributable toownersof theparent Financial Position($million) excluding treasury shares at 31March. Net assetvaluepershare iscomputedbydividingtheequityattributable toownersof theparent bythenumberof ordinary shares inissue performance shares andrestricted shares grantedtoemployees. of ordinary shares inissueexcluding treasury shares, after adjustingfor thedilutiveeffect ontheexercise of alloutstandingshare options, Earnings after taxpershare (diluted)iscomputedbydividingtheprofit attributable toowners of theparent bytheweighted average number ordinary shares inissueexcluding treasury shares. Earnings after taxpershare (basic)iscomputedbydividingtheprofit attributable toowners of the parent bytheweighted average number of owners of theparent Return onequityholders'fundsistheprofit attributable toowners of theparent expressed asapercentage of the average equity attributable to stated otherwise. SIA EngineeringCompany'sfinancialyearisfrom 1Aprilto31March. Throughout this report, allfinancialfigures areinSingapore Dollars,unless restated. The Group hasadoptedIFRSwitheffect from 1April2018.Inaccordance tothetransition requirements, 2017/18comparatives have been R6 R2 R4 R5 R3 108,698 153,657 2018/19 1,020.9 1,845.2 1,528.6 6,644 722.2 136.6 14.35 14.38 964.1 179.1 160.9 10.7 56.8 3.0 8.0 # 2017/18 167,208 116,395 1,094.9 1,803.9 1,483.7 1,016.1 6,548 209.5 186.8 16.66 16.70 762.1 132.7 78.8 78.8 12.4 4.0 4.0 9.0 9.0 R1

% Change – 8.1 – 11.1 – – 25.0 – 5.2 – – 13.9 – 13.9 – – 5.1 – 27.9 – 14.5 – 13.9 + 2.9 + 1.5 + + 2.3 6.8 6.6 3.0 1.7 pts

112 111 110 109 102 94 88 FINANCIALS 202 200 199 198 119 118

Statements of ChangesInEquity Balance Sheets Consolidated Statement of Consolidated IncomeStatement Independent Auditors'Report Group Corporate Structure Quarterly Resultsof TheGroup Consolidated Statement of CashFlows Five-Year FinancialSummaryof Additional Information Notes toTheFinancialStatements Directors' Statement Financial Review Comprehensive Income The Group 87 ANNUAL REPORT 2018/19 88 SIA ENGINEERING COMPANY FINANCIAL REVIEW 1,000 1,200 ($ million) GROUP REVENUEANDEXPENDITURE The Group hasadoptedIFRS witheffect from 1April2018.Inaccordance tothe transition requirements, 2017/18comparatives have been restated. Basic earningspershare for theGroup decreased by2.32cents(-13.9%)to14.38cents. Compressor Technology ServicesCompanyLimited(“ACTS”). in 2017/18.Profit lastyearincludeda$15.0milliongainonthesale of theGroup’s shares inanassociated company, Asian The Group postedaprofit attributable toowners of theparent of $160.9millionin2018/19,$25.9lowerthanthat Operating profit of $56.8millionwas$22.0or27.9%loweryear-on-year. (-5.1%) year-on-year to$964.1million,mainlyduelowermaterial andsubcontractcostsinlinewithlowerworkload. Group revenue at $1,020.9millionwas6.8%or$74.0lowerthanlastyear. Expenditure decreased $52.0million EARNINGS GROUP PROFITABILITY RATIOS 800 400 600 200 -20 -30 -10 20 30 (%) 10 0 0 2014/15 2014/15 Revenue Before HAESLdivestment Return ontotalassets(%) Return onaverageequityholders'funds(%) Return onturnover(%) Basic earningspershare (before HAESLdivestment)(cents) Basic earningspershare (cents) 2015/16 2015/16 Expenditure 2016/17 2016/17 2017/18 2017/18 divestment Before HAESL 2018/19 2018/19 (cents) 0 200 400 600 800 1,000 1,200 0 5 10 15 20 25 30 ($ million) AND PROFIT ATTRIBUTABLE TO OWNERS OFTHEPARENT GROUP OPERATING PROFIT, PROFIT BEFORETAXATION 400 200 300 250 350 100 150 Return ontotalassets Return onaverage Return onturnover Profitability ratios of theGroup are as follows: 50 equity holders’funds 0 Profit before taxation Profit attributable toownersof theparent 2014/15 2015/16 2016/17 2018/19 10.7 15.8 8.7 % 2017/18 2017/18 12.4 10.4 17.1 2018/19 divestment Before HAESL Operating profit % % points Change – 1.7 – 1.7 – 1.3 0 50 100 150 200 250 300 350 400 reductions. Theengineandcomponent segment’soperating loss was$3.0million,around thesameasyearbefore. Contributions from theairframeandlinemaintenance segmentdecreased aslowerrevenue couldnotbemitigated bycost an increase in overheads. with thereduction inaircraft checks performed and lowerfleetmanagementactivities.Thedecrease waspartially offset by Expenditure decreased $52.0millionor5.1%.Themaincontributorswere lowermaterial costsandsubcontractinline that of the previous year. reduction in aircraft checks revenue and fleet management activities. Engineand component revenue was comparable to Revenue decreased 6.8%or$74.0millionto$1,020.9million.Airframeandlinemaintenancerevenue waslower, with a The Group’s operating profit bysegmentisas follows: OPERATING PROFIT A breakdown of theGroup’s expenditure isasfollows: EXPENDITURE The Group’s revenue composition isasfollows: REVENUE FINANCIAL REVIEW Total Engine andcomponent Airframe andlinemaintenance Total Overheads Subcontract costs Material costs Staff costs Total Engine andcomponent – Fleetmanagementprogramme – Airframeoverhaulandlinemaintenance Airframe andlinemaintenance $ million $ million $ million 2018/19 2018/19 2018/19 1,020.9 964.1 211.9 118.3 145.2 488.7 991.4 100.2 891.2 (3.0) 56.8 59.8 29.5 $ million $ million $ million 2017/18 2017/18 2017/18 1,094.9 1,016.1 1,067.2 201.4 133.9 186.5 494.3 124.7 942.5 27.7 78.8 81.9 (3.1) $ million $ million $ million – 74.0 + 1.8 – 22.0 – 22.1 + 0.1 – 52.0 + 10.5 – 15.6 – 41.3 – 5.6 – 75.8 – 24.5 – 51.3 Change Change Change – 6.8 + 6.5 – 27.9 – 27.0 + 3.2 – 5.1 + 5.2 – 11.7 – 22.1 – 1.1 – 7.1 – 19.6 – 5.4 % % % 89 ANNUAL REPORT 2018/19 90 SIA ENGINEERING COMPANY FINANCIAL REVIEW value pershare of the Group at 136.6centswas3.9(+2.9%)highercompared to31March 2018. associated andjointventure companiesandcashgenerated from operations, partiallyoffset bydividendspaid.Netasset cash balanceof theGroup was$521.6million,anincrease of $21.9million(+4.4%),mainlyfrom dividendsreceived from As of 31March 2019,totalGroup assetsamountedto$1,845.2million,$41.3 millionor2.3%higherthanayearago.The dividend. the strengthening of theUSdollar, partiallyoffset bythepayment of the2017/18finaldividendand2018/19interim The increase wasmainlyduetoprofits earned for theyearandagainin foreign currency translation reserve asa result of Equity attributable toownersof theparent was$1,528.6millionasat 31March 2019,anincrease of $44.9million(+3.0%). FINANCIAL POSITION last year. The Group’s taxprovision was$18.1millionfor thefinancialyear2018/19,adecrease of $3.4million(-15.8%)compared to TAXATION year-on-year. Contributions from theassociated companiesintheairframeandlinemaintenancesegmentdecreased $1.4million compared with206in2017/18. ESA’s engineshipmentswere 136in2018/19,compared with133in2017/18.SAESL’s engineshipmentswere 282in2018/19, Private Limited(“SAESL”), wascomparabletothelastfinancialyear. Eagle ServicesAsiaPrivate Limited(“ESA”). Share of profits from theotherenginecentre, Singapore Aero EngineServices or 5.0%to$115.4million.Theimprovement wasmainlyduetothehighernumberandworkcontentof enginesshippedby one-time upward revision intaxprovision, share of profits from theengineandcomponentcentres increased $5.5million revised taxincentivescheme,provision wasrevised upwards totheprevailing corporate taxrate. Notwithstandingthis component segmentaffected certainqualifyingcriteria of theirgroup taxincentivescheme.Intheabsence of anagreed In thethird quarterfor 2018/19,restructuring plansat theparent companyof someassociated companies intheengineand Share of profits of associated andjointventure companiesincreased by $4.1 million(+3.7%)to$113.9million. SHARE OFPROFITS OFASSOCIATED ANDJOINTVENTURE COMPANIES

(centspershare) 8 August2019.Thistranslates toapayoutof approximately 76.5percent. $89.5 million),ifapproved byshareholders duringtheAnnualGeneralMeetingtobeheldon19July2019,willpaid a finalordinary dividend of 8.0centspershare for 2018/19.Thefinal ordinary dividend(amountingtoapproximately An interimdividendof 3.0centspershare, amountingto$33.6million,waspaidon21November2018.TheBoard recommends DIVIDENDS ($ million) FINANCIAL REVIEW TOTAL ASSETSANDNETASSETVALUE PERSHARE ATTRIBUTABLEEQUITY TO OWNERS OFTHEPARENT, 2,000 2,500 1,000 1,500 500 20 10 15 0 5 0 2014/15 2014/15 2015/16 2016/17 2015/16 2016/17 2017/18 2017/18

2018/19 2018/19 (%) (cents) 0 20 40 60 80 100 105 110 115 120 125 130 135 140 Net assetvaluepershare (cents) Total assets($million) Equity attributable toownersof theparent ($million) Dividend payoutratio (%) Interim dividend(centspershare) Final dividend(centspershare) Special dividend(centspershare)

91 ANNUAL REPORT 2018/19 92 SIA ENGINEERING COMPANY FINANCIAL REVIEW ($ million) The Group’s average staff strength and staff productivity are as follows: STAFF STRENGTH ANDINDICES capital expenditure was8.4times,compared to5.8timesintheyearbefore. Internally generated cashflowincreased $26.1million(+14.3%)to$209.0million.Theself-financing ratio ofcashflowto expenditure wasspentonplant,equipmentandtoolingprojects, while9%wasonoffice equipment. Capital expenditure bytheGroup fell by$6.6million(-20.9%)to$25.0in2018/19.Approximately 61%of the CAPITAL EXPENDITURE ANDCASHFLOW CASH FLOW ANDSELF–FINANCINGRATIO CAPITAL EXPENDITURE,INTERNALLY GENERATED Average number of employees Staff costsperemployee($) Value addedperemployee($) Revenue peremployee($) 200 250 100 150 50 0 2014/15 2015/16 2016/17 2017/18

2018/19 (ratio) 0 1 2 3 4 5 6 7 8 9 10 2018/19 108,698 153,657 Self financing ratio Self financingratio Internally generated cashflow($million) Capital expenditure ($million) 73,560 6,644 2017/18 116,395 167,208 75,496 6,548 % change – 2.6 + 1.5 – 6.6 – 8.1 STATEMENT OFVALUE ADDEDANDITSDISTRIBUTION (IN$MILLION) FINANCIAL REVIEW Value addedper$investmentinproperty, plantandequipment($) Value addedper$employmentcost($) Value addedper$revenue ($) Total valueadded – Retainedprofit – Impairmentof property, plantandequipment – Amortisation of intangibleassets – Depreciation of property, plantandequipment Retained for future capital requirements – Non-controlling interests – Interimandproposed dividends – Interest charges To suppliersof capital – Corporate taxes To government – Salariesandotherstaff costs To employees Applied asfollows: Total valueaddedavailable for distribution Share of profits of associated andjointventure companies,net of tax Surplus ondilutionof shareholding inanassociated company (Loss)/Surplus ondisposalof anassociated company Surplus ondisposalof asubsidiarycompany Surplus ondisposalof property, plantandequipment Interest income Add: Value addedonoperations Purchase of goodsandservices Less: Revenue Revenue 2018/19 1,020.9 (421.9) 722.2 123.1 488.7 722.2 113.9 599.0 0.91 1.48 0.71 37.8 49.5 18.1 (0.1) 4.0 0.1 0.9 0.3 1.1 8.0 – – 2017/18 1,094.9 1,094.9 (464.3) 762.1 145.5 494.3 762.1 109.8 630.6 0.97 1.54 0.70 41.4 48.5 21.5 15.0 3.5 5.4 1.2 0.8 0.8 1.0 4.9 – 93 ANNUAL REPORT 2018/19 94 SIA ENGINEERING COMPANY 2. 1. The Board of Directors has,onthedate of thisstatement, authorisedthesefinancialstatements for issue. (b) (a) In ouropinion: Company for thefinancialyearended31March 2019. The Directors have pleasure in presenting their report together with the audited financialstatements of theGroup and of the DIRECTORS’ STATEMENT Plans, asdisclosedinthisstatement. holding company, Singapore AirlinesLimited(“SIA”), oritssubsidiaries,alsoparticipate inSIA’s EquityCompensation Plans of theCompany”inthisstatement. Directors of theCompanywhoare employeesof the Company’simmediate disclosed under “Directors’ Interests in Ordinary Shares, Share Options andDebentures” and “Equity Compensation acquisition of shares orshare optionsin,ordebentures of, theCompanyoranyotherbodycorporate, except as to whichtheCompanywasaparty, whereby Directors of the Companymightacquire benefitsbymeans of the Neither at theendof thefinancialyear, nor at anytimeduringthat financialyear, didthere subsistanyarrangements Png KimChiang Chin Yau Seng Wee SiewKim Raj Thampuran Christina HonKwee Fong(ChristinaOng) Chew Teck Soon Manohar Khiatani Ng ChinHwee Goh ChoonPhong Tang KinFei The Directors in office atthe date of thisstatement are as follows: ARRANGEMENTS TOENABLEDIRECTORS TOACQUIRE SHARES ANDDEBENTURES DIRECTORS OFTHECOMPANY as andwhentheyfalldue. at thedate of thisstatement, there are reasonable grounds to believethat theCompanywillbeabletopayitsdebts Financial ReportingStandards (“IFRS”); and Companies Act, Chapter 50, Singapore Financial Reporting Standards (International) (“SFRS(I)”)andInternational in equityof theCompanyfor theyearendedonthat date inaccordance withtheprovisions of theSingapore financial performance, consolidated changes in equity and consolidated cash flows of the Group and the changes financial position of the Group andfinancial position of theCompanyas at31March 2019, andtheconsolidated the financial statements set out on pages 109 to 197 are drawn up so as to give a true and fair view of the consolidated Chief Executive Officer (Non-independent, appointedon8October2018) (Independent) (Independent) (Independent) (Independent) (Independent) (Non-independent) (Non-independent) Chairman (Independent) 3. DIRECTORS’ STATEMENT (direct anddeemed)inthefollowing ordinary shares andshare optionsof theCompany, andof related corporations: shareholdings required to be kept under Section 164 of the Singapore Companies Act, Chapter 50 (the“Act”), interests The following Directors whoheldoffice attheend ofthefinancialyearhad,according tothe register of Directors’ DIRECTORS’ INTERESTS INORDINARY SHARES, SHARE OPTIONSANDDEBENTURES – – Chin Yau Seng Chew Teck Soon – – Chin Yau Seng Manohar Khiatani – Chin Yau Seng – Chin Yau Seng – Ng ChinHwee Png KimChiang – Ng ChinHwee Ng ChinHwee – Ng ChinHwee – Ng ChinHwee – Chin Yau Seng – Goh ChoonPhong Conditional award of transformation restricted shares – Goh ChoonPhong Conditional award of deferred restricted shares – Goh ChoonPhong Conditional award of Performance Share Plan(“PSP“) shares – Goh ChoonPhong Conditional award of RestrictedShare Plan(“RSP“) shares Goh ChoonPhong Ordinary shares Interest inSingaporeAirlinesLimited(“SIA”) Tang KinFei $600 million3.16% Notesdue2023 Name ofDirector Final Awards (PendingRelease) Base Awards Final Awards (PendingRelease) Base Awards Base Awards Base Awards Base Awards Base Awards Base Awards Base Awards Final Awards (PendingRelease) Base Awards Base Awards Base Awards Base Awards (4) appointment (5) 1.4.2018/ 363,956 889,554 222,750 30,000 29,368 19,500 46,292 17,622 14,480 32,400 21,000 24,920 89,100 92,585 82,669 47,300 42,000 date of (2) 4,000 1,000 Direct interest (3) – – – (1) 31.3.2019 $250,000 410,968 981,379 222,750 37,000 29,368 19,500 39,150 17,622 14,480 32,400 30,000 30,839 28,230 89,100 78,300 82,669 66,083 57,460 60,000 4,000 1,000 (1) appointment 1.4.2018/ date of Deemed interest 2,000 – – – – – – – – – – – – – – – – – – – – – 31.3.2019 2,000 – – – – – – – – – – – – – – – – – – – – – 95 ANNUAL REPORT 2018/19 96 SIA ENGINEERING COMPANY DIRECTORS’ STATEMENT 3. DIRECTORS’ INTERESTS INORDINARY SHARES, SHARE OPTIONSANDDEBENTURES (continued) Ng ChinHwee Ng ChinHwee Interest inMapletreeCommercialTrust Interest inMapletreeGlobalStudentAccommodation Private Trust Interest inMapletreeGreater ChinaCommercialTrust Christina Ong Interest inSingaporeTechnologies EngineeringLimited Png KimChiang Raj Thampuran Png KimChiang Goh ChoonPhong Class B(GBP) Goh ChoonPhong Class A(USD) Units Png KimChiang Units Chew Teck Soon Units Chew Teck Soon Goh ChoonPhong Tang KinFei Ordinary shares Chew Teck Soon Ng ChinHwee Goh ChoonPhong Tang KinFei Ordinary shares Interest inSingaporeTelecommunications Limited – Png KimChiang Conditional award of PSPshares – – Png KimChiang Conditional award of RSPshares Ng ChinHwee Tang KinFei Ordinary shares Interest inSIAEngineeringCompanyLimited Name ofDirector Base Awards Final Awards (PendingRelease) Base Awards (10) (9) appointment 1.4.2018/ 260,000 100,000 153,374 108,135 727,018 date of 62,704 20,000 31,190 10,000 1,600 1,600 1,610 4,823 4,823 6,000 2,840 1,610 Direct interest 600 190 – – 1 (11) (1) (1) (7) (6) 31.3.2019 260,000 100,000 214,443 118,400 138,810 819,418 30,190 20,000 47,190 10,000 1,600 1,600 4,823 4,823 1,610 6,000 2,840 1,610 4,000 600 – 1 (11) (1) (1) (1) (8) (6) appointment 1.4.2018/ date of 50,000 20,000 Deemed interest 1,360 1,360 190 – – – – – – – – – – – – – – – – – 31.3.2019 50,000 20,000 1,360 1,360 190 – – – – – – – – – – – – – – – – – 3. DIRECTORS’ STATEMENT DIRECTORS’ INTERESTS INORDINARY SHARES, SHARE OPTIONSANDDEBENTURES (continued) Interest inMapletreeTreasury Limited Services Ng ChinHwee Interest inMapletreeLogisticsTrust Interest inMapletreeUS&EULogisticsPrivate Trust Interest inAscendasReal Estate InvestmentTrust Interest inAscendasHospitalityTrust Interest inStarHubLimited Png KimChiang Tang KinFei Units Tang KinFei Units Interest inOlamInternational Limited Wee SiewKim Christina Ong Ng ChinHwee (EUR) Wee SiewKim Christina Ong Ng ChinHwee (USD) Units Tang KinFei $700 million3.95%PerpetualBonds Chew Teck Soon Ordinary shares Chew Teck Soon Units Manohar Khiatani Units Tang KinFei $350 million5.8%Fixed Rate Notesdue2019 Ng ChinHwee $250 million6%Bondsdue2018 Ng ChinHwee Ordinary shares Interest inMapletreeIndustrialTrust Name ofDirector appointment $1,000,000 1.4.2018/ $500,000 $250,000 108,000 date of 10,000 40,000 52,000 2,000 2,000 Direct interest – – – – – – – – (11) (1) (1) 31.3.2019 $500,000 $500,000 108,000 13,000 40,000 20,000 24,000 52,000 2,000 2,000 300 185 185 300 185 185 – (11) (1) (1) appointment 1.4.2018/ date of Deemed interest – – – – – – – – – – – – – – – – – 31.3.2019 – – – – – – – – – – – – – – – – – 97 ANNUAL REPORT 2018/19 98 SIA ENGINEERING COMPANY DIRECTORS’ STATEMENT 4. 3. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Notes: Wee SiewKim Goh ChoonPhong Tang KinFei–Chairman(appointedon 19July2018) following directors: At thedate of thisstatement, theCompensation &HRCommitteeadministeringtheRSPandPSPcomprises the The Companyhasinplace,theRestrictedShare Plan(“RSP”) andPerformance Share Plan(“PSP”). 21 April2019. There were nochangesinanyof theabove-mentionedinterests betweentheendof thefinancialyearand of the financialyearor at theend of thefinancialyear. in ordinary shares, share optionsordebentures of theCompany, orof related corporations, eitherat thebeginning Except asdisclosedinthisstatement, nootherDirector whoheldoffice attheend ofthefinancialyearhadinterests EQUITY COMPENSATION OFTHECOMPANY EQUITY PLANS DIRECTORS’ INTERESTS INORDINARY SHARES, SHARE OPTIONSANDDEBENTURES (continued) Interest inTemasek PteLtd Financial(IV) Chin Yau Seng $242 millionClassA-1 4.35%Secured Fixed Rate Bondsdue2028 Chew Teck Soon $500 million2.7%Notesdue2023 Interest inAstreaIVPteLtd Name ofDirector Held inthenameof DBSNominees(Private) Limited. the achievementsagainsttargets over the three-year performance periodsrelating totherelevant awards. The actual number of PSP Final Awards of fullypaid ordinary shares willrange from 0% to 200% of the Base Awards and is contingent on relating totherelevant awards. awards grantedpriorto2016,theawards are contingentontheachievementsagainsttargets overthetwo-yearperformance period on theachievementsagainsttargets over theone-yearperformance periodrelating totheawards grantedfrom year2016onwards. For The actualnumberof RSPFinalAwards of fullypaidordinary shares willrangefrom 0%to150%of theBaseAwards andiscontingent 819,000 ordinary shares are heldinthenameof DBSNominees(Private) Limited. 720,000 ordinary shares are heldinthenameof DBSNominees(Private) Limited. Held inthenameof DBSNominees(Private) Limited. year performance period,afinalaward willbedeterminedbasedontheinitialaward multipliedbyanachievementfactor. The initialTransformation Share Award of fully-paidordinary shares willvestafter aone-yearperformance period.At theendof theone- (based onthesumof SIAshare dividendyieldsdeclared withex-dividend dates occurringduringthevestingperiod)willvest. end of thevestingperiod,anadditional numberof shares equivalenttotheBaseAward multipliedbytheaccumulated dividendyield The Deferred Share Award of fully-paidordinary shares willvestat theendof three yearsfrom thedate of thegrantof theaward. At the the achievementsagainsttargets over the three-year performance periodsrelating totherelevant awards. The actual number of PSP Final Awards of fullypaid ordinary shares willrange from 0% to 200% of the Base Awards and is contingent on relating totherelevant awards. awards grantedpriorto2016,theawards are contingentontheachievementsagainsttargets overthetwo-yearperformance period on theachievementsagainsttargets over theone-yearperformance periodrelating totheawards grantedfrom year2016onwards. For The actualnumberof RSPFinalAwards of fullypaidordinary shares willrangefrom 0%to150%of theBaseAwards andiscontingent Held inthenameof DBSNominees(Private) Limited. appointment 1.4.2018/ date of Direct interest – – 31.3.2019 $8,000 $6,000 appointment 1.4.2018/ date of Deemed interest – – 31.3.2019 – –

4. DIRECTORS’ STATEMENT (i) (ii) EQUITY COMPENSATION OFTHECOMPANY (continued) EQUITY PLANS 2018/19. Nootheremployee received more than5%of thetotal shares released in 2018/19. Mr PngKimChiang,ChiefExecutive Officer, received 10%of thetotalshares released underRSPandPSPin employees undertheRSPandPSP. No awards have beengrantedtocontrolling shareholders ortheirassociates, orparent group directors or three-year performance period. All the PSP Final Awards of fullypaid ordinary shares will be released to the participants at theendof the The balancewillbereleased equallyoverthesubsequenttwoyears withfulfilmentof servicerequirements. One-third of the RSPFinalAwards of fullypaidordinary shares willbereleased totheparticipantsuponvesting. to 150%for theRSPandfrom 0%to200%for thePSP. the endof therespective performance periods(“Final Award”). Theachievementfactorcouldrangefrom 0% be appliedtotheBaseAward todeterminethefinalnumber of RSPshares andPSPshares tobeawarded at period for thePSP, theCompensation &HRCommitteewilldetermineanachievementfactorwhichthen # * Number of optionstosubscribefor unissuedordinary shares Company outstanding: The lastgrantof theshare optionsexpired on30June2018. Assuch,there were noshare optionsof the Details of theESOPare disclosedinNote11tothefinancialstatements. Employee ShareOptionPlan(“ESOP”) of pre-determined targets overaone-yearperformance period participants annually, dependenton positionlevelandindividualperformance. Dependingontheachievement Under theRSPandPSP, abasenumberof conditionalshare awards (“Base Award”) isgrantedtoeligible to therightsof holdersof awards outstandingundertherespective plansasat thedate of suchtermination. following theadoptionof thenewplans.Thetermination of theprevious RSPandPSPwaswithout prejudice of theSIAEC RSP2014 andSIAEC PSP2014 toreplace theprevious RSPandPSP, whichwere terminated the Extraordinary GeneralMeetingof theCompanyheldon21July 2014, shareholders approved theadoption The RSPandPSPwere originallyadoptedbyshareholders on25July2005andexpired on24 July2015. At Details of theRSPandPSPare disclosedinNote11tothefinancialstatements. Restricted SharePlan(“RSP”) andPerformanceSharePlan(“PSP”) 01.07.2008 Date ofgrant requirements. period, 50%of theaward willvest.Thebalancevestequallyoverthesubsequent twoyearswithfulfilmentof service For RSPAwards grantedpriorto2016/17,basedonmeetingstated performance conditionsoveratwo-year performance here are theexercise pricesafter suchadjustments. options on7August2014andafurther$0.05theoutstandingshare optionson3August2017.Theexercise pricesreflected a reduction of $0.10 in the exercise prices of all share options outstanding on 29 July 2011, a $0.05 on the outstanding share of a specialdividend of $0.10 on 22 July 2011, $0.05 on 21 July 2014 and $0.05 on 20 July 2017, the said Committee approved Plan, intheeventof thedeclaration of aspecialdividend.Followingapproval bytheCompany’sshareholders of thedeclaration amendment tothePlanallowfor adjustmenttotheexercise pricesof theexistingoptionsbyCommitteeadministering At the Extraordinary General Meetingof the Company held on 26 July2004,theCompany’sshareholders approved an Balance at 4,139,200 1.4.2018 (4,139,200) Cancelled Exercised – Balance at 31.3.2019 # for theRSPandathree-year performance – Exercise $3.54 price* 01.07.2010 –30.06.2018 Exercisable period

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SIA ENGINEERING COMPANY DIRECTORS’ STATEMENT 5. Listing Manual. In appointingourauditorsfor theCompanyandsubsidiaries,we have compliedwithRules712and716of theSGX Annual GeneralMeetingof theCompany. to theBoard of Directors that theauditors,KPMGLLP, benominated for re-appointment asauditorsat theforthcoming The AuditCommitteeissatisfied withtheindependenceandobjectivity of theexternalauditorsandhasrecommended non-audit fees. The AuditCommitteealsorecommends theappointmentof theexternalauditorsandreviews thelevelof auditand functions. Ithasfullauthority and thediscretion toinviteanydirector orexecutive officer toattend itsmeetings. The Audit Committee has full access to management and is given theresources required for it to discharge its their examination andevaluation of theCompany’sinternalcontrol system. Committee metwiththeCompany’sexternalandinternalauditorstodiscussscopeof theirwork,theresults of The AuditCommitteehas held 4meetings since the last directors’ statement. Inperforming itsfunctions,theAudit (vi) (v) (iv) (iii) (ii) (i) the following: Chapter 50, theSGXListingManualandCodeof Corporate Governancewhichincludeinteralia The AuditCommitteeperformed itsfunctionsinaccordance withSection201B(5)of theSingapore CompaniesAct, Chin Yau Seng(appointedon8October2018) Raj Thampuran Christina Ong Manohar Khiatani Chew Teck Soon–Chairman whom are independentdirectors: At thedate of thisstatement, theAuditCommitteecomprisesfollowing fivenon-executive directors, four of AUDIT COMMITTEE any material lossof funds. whistle-blowing programme institutedbytheCompany;and interested persontransactions(asdefinedinChapter9of theSGXListingManual); controls; effectiveness of material controls, includingfinancial,operational, complianceand information technology audit plansandreports of theexternalandinternalauditors; directors of theCompanyfor adoption; quarterly andannualfinancialstatements of theGroup andtheCompanypriortotheirsubmission the review of 10 May2019 Chief Executive Officer PNG KIMCHIANG Chairman TANG KINFEI On behalfof theBoard, 6. AUDITORS DIRECTORS’ STATEMENT The auditors,KPMGLLP, have indicated their willingnesstoacceptre-appointment. 101 ANNUAL REPORT 2018/19 102

SIA ENGINEERING COMPANY INDEPENDENT AUDITORS’ REPORT whole, andinforming ouropinionthereon, andwedonotprovide aseparate opiniononthesematters. statements of thecurrent period.Thesematters were addressed inthecontextof ourauditof thefinancialstatements asa Key auditmatters are thosematters that, inourprofessional judgement,were of mostsignificanceinouraudit of thefinancial Key auditmatters obtained issufficientandappropriate to provide abasis forouropinion. responsibilities inaccordance withtheserequirements andtheACRA Code.We believethat theauditevidencewehave requirements that are relevant toourauditof thefinancialstatements inSingapore, andwehave fulfilledourotherethical Professional ConductandEthics for PublicAccountantsandAccountingEntities("ACRA Code")togetherwiththeethical report. We are independentof theGroup inaccordance withtheAccountingandCorporate Regulatory AuthorityCodeof standards are furtherdescribed inthe‘Auditors’ responsibilities for theauditof thefinancialstatements’ section of our We conductedourauditinaccordance withSingapore Standards onAuditing(“SSAs”).Ourresponsibilities underthose Basis foropinion and consolidated cashflows of theGroup for theyearendedonthat date. the consolidated financialperformance, consolidated changesinequity of theGroup, changes inequity of theCompany (”IFRS”) soastogiveatrueandfairviewof thefinancialposition of theGroup and of theCompanyas at 31March 2019and “Act”), Singapore Financial Reporting Standards (International) (“SFRS(I)”) and International Financial Reporting Standards of theCompanyare properly drawnupinaccordance withtheprovisions of theSingapore CompaniesAct,Chapter50(the In ouropinion,theconsolidated financialstatements of theGroup andthebalance sheet andstatement of changesinequity information, assetoutonpages109to197. of cashflows of theGroup for theyearthenended,andasummary of significantaccountingpoliciesandotherexplanatory statement of changesinequityof theGroup, statement of changesinequityof theCompanyandconsolidated statement 31 March 2019,theconsolidated incomestatement, consolidated statement of comprehensive income,consolidated and itssubsidiaries(the“Group”), whichcomprisethebalancesheetsof theGroup andtheCompanyasat We have auditedtheaccompanyingfinancialstatements of SIAEngineeringCompanyLimited(the “Company”) Opinion REPORT ONTHEAUDIT OFTHEFINANCIALSTATEMENTS SIA ENGINEERING COMPANY LIMITED MEMBERS OFTHECOMPANY

accounting policyandadiscussionof significantaccountingestimates. Refer to Note2(d)‘Basis of consolidation’ andNote2(e)‘Subsidiary, associated andjointventure companies’for therelevant Classification ofinvestmentsinsubsidiaries,associatesand jointventure INDEPENDENT AUDITORS’ REPORT investments isconsistentwiththeGroup’s accountingpolicies. The Group hasexaminedtherelevant termsandconditionsgoverningtheindividualinvestments.Theclassification of these Findings the financialstatements of theGroup. classification canhave amaterial orpervasiveeffect on classification canbejudgemental.Anyinappropriate joint control. Such anassessmentof theinvestment is determinedtohave control, significantinfluence or associate or joint venture is based on whether the Group The classification of aninvestmentasasubsidiary, and jointventures. through thejointformation of subsidiaries,associates original equipmentmanufacturers andstrategic partners The Group hasanumberof strategic allianceswith Risk reporting standards. of theseinvestmentsbyreference totheapplicablefinancial We assessedmanagement’sconclusionontheclassification the investmentclassification previously assessed. were On existinginvestments,weinquired of managementifthere influence orjointcontrol overtheinvestees. as toestablishwhethertheGroup hascontrol, significant governance structures andprofit-sharing arrangements,so such asdisputeresolution provisions, termination provisions, obligations of therespective investors,andotherrelated terms agreements, reviewed the terms that govern the rights and On newinvestments,weexaminedtheshareholders Our response any modifiedterms of arrangementsthat wouldchange 103

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SIA ENGINEERING COMPANY INDEPENDENT AUDITORS’ REPORT estimates usedinthediscountedcashflowprojections are withinanacceptablerange. The Group hasaprocess of identifyingandreviewing theCGUs for impairmenttesting.The assumptionsandresulting Findings for the relevant accountingpolicyandadiscussionof significantaccountingestimates. Refer to Note2(l)‘Impairment of non-financialassets’andNote3‘Significantaccountingestimates andcriticaljudgements’ Impairment riskonproperty, plantandequipment(the“PPE”) subject toestimation uncertainties. assessment of therecoverable amountof eachCGU is that mayexistineachCGU requires judgement.The The process of identifyingindicators of impairment PPE belongsto. recoverable amountsof theCGU towhichthespecific the discountedcash flow technique to determinethe Where indicators of impairment exist, the Group uses (“CGU”) mayexceed therecoverable amount. deployed ineachof theGroup’s cashgenerating unit There isariskthat thecarryingvalueof thesePPE Management Program (“ITM”). well as rotables to support customers under the Inventory maintenance, repair andoverhaul(“MRO”) businessas other related plantandequipmenttosupporttheGroup’s The Group investedheavily inhangars,workshops and Risk gross profit margins. including reducing thegrowth estimates overrevenue and We stress-tested theassumptionsmadebymanagement, industry. initiatives andotheravailable market data for theMRO performance, theGroup’s plannedproductivity andcost rates bycomparingtheassumptionstopasthistorical costs, gross profit margins, discount rates, terminalgrowth projections, namelyrevenue growth rates, operating We assessedthekey assumptionsusedinthecashflow recoverable amountsof theCGUs. We reviewed thebasisandmethodologyusedtoderive and theallocation of assetstotheseCGUs. We assessedtheappropriateness of identification of CGUs Our response policy andadiscussionof significantaccountingestimates. Refer to Note 2(q) ‘Revenue’ and Note 3 ‘Significant accounting estimates and critical judgements’ for the relevant accounting Recognition ofrevenueandprofitsonlong-termcontracts INDEPENDENT AUDITORS’ REPORT revenue earned that issubjecttocustomernegotiation andsubsequentapproval. We found managementapproach towards revenue recognition tobebalanced,asrevenue-constraint testisappliedon Findings revenue over time. applies theinputmethodtowards themeasurement of associates involvedinenginerepairs, theGroup also On equity-accounting of theresults of thesignificant are also subject tocustomers’approval. Any variableconsideration arisingfrom variation orders customers. earned maybesubjecttosubsequentnegotiations with man-hours incurred toestimate thecontractrevenue and man-hourestimates, andfurthermore, theactual The measurement of theinputmethodinvolvescost time usingtheinputmethod. contracts; andaccordingly, revenue isrecognised over transferred tothecustomersoverduration of the associated withtheseMROservicesare continuously The Group assessed that the performance obligations and fleetmanagement(the “MRO services”). airframe maintenanceandcomponentoverhaulservices The Group’s contractrevenues are derivedmainlyfrom Risk in contractassetsandliabilities. revenue recognition policies, alongside with the movements and fulfilment of performance obligations andthe related We assessedtheGroup’s disclosure of the nature, timing consideration torelevant supportingdocuments. We verifiedthedata usedinthe inputmethodandanyvariable revenue over timebygroup entities. consistent application of theinputmethodusedtorecognise experience of comparablecontracts.We alsochecked for the estimates, andtestedthembyreference tohistoricalcost We challengedmanagement’suseof costandman-hour of revenue recognition. identify theperformance obligations, andassessedthebasis We reviewed thecontractualtermsof customer contractsto input methodusedtomeasure revenue. review andapproval of project costing,andverification of Group specifictocontractevaluation andauthorisation, We testedthecontrols designedandimplementedbythe Our response 105

ANNUAL REPORT 2018/19 106

SIA ENGINEERING COMPANY INDEPENDENT AUDITORS’ REPORT these financialstatements. or intheaggregate, theycouldreasonably beexpectedtoinfluence theeconomicdecisions of userstaken onthebasis of material misstatement whenitexists.Misstatements canarisefrom fraudorerror andare considered material if, individually is ahighlevelof assurance,butisnotaguaranteethat anaudit conducted inaccordance withSSAswillalwaysdetecta misstatement, whetherduetofraudorerror, andtoissueanauditors’report that includesouropinion.Reasonableassurance Our objectivesare toobtainreasonable assuranceaboutwhetherthefinancial statements asawholeare free from material Auditors’ responsibilities fortheauditof thefinancialstatements The directors’ responsibilities includeoverseeingtheGroup’s financial reporting process. management eitherintendstoliquidate theGroup ortoceaseoperations, orhasnorealistic alternative buttodoso. concern, disclosing,asapplicable,matters related togoingconcernandusingthebasisof accountingunless In preparing thefinancialstatements, managementis responsible for assessingtheGroup’s abilitytocontinueasagoing financial statements andtomaintainaccountability of assets. and transactionsare properly authorisedandthat theyare recorded asnecessarytopermitthepreparation of trueandfair sufficient to provide a reasonableassurancethat assets are safeguarded againstloss from unauthoriseduseordisposition; the provisions of theAct,SFRS(I)sandIFRSs,for devisingandmaintainingasystemof internalaccountingcontrols Management isresponsible for thepreparation of financialstatements that giveatrueandfairviewinaccordance with Responsibilities of management anddirectors forthefinancialstatements communicate thematter tothosecharged withgovernanceandtake appropriate actionsinaccordance withSSAs. When weread theothersections,ifweconcludethat there isamaterial misstatement therein, weare required to nothing toreport inthisregard. we concludethat there isamaterial misstatement of thisotherinformation, weare required toreport that fact.We have If, based ontheworkwehave performed ontheotherinformation that weobtainedpriortothedate of thisauditors’report, in theauditorotherwiseappearstobematerially misstated. consider whethertheotherinformation ismaterially inconsistentwiththefinancial statements orourknowledgeobtained In connectionwithourauditof thefinancialstatements, our responsibility isto read theotherinformation and,indoingso, conclusion thereon. Our opiniononthefinancialstatements doesnotcovertheotherinformation andwedonotexpress any form of assurance Share PriceandTurnover (‘theReports’),whichare expectedtobemadeavailable tousafter that date. in Review, BusinessSegments, AGM Notice andLetter toShareholders, Corporate Governance,Shareholding Statistics and We have obtainedallotherinformation priortothedate of thisauditors’report except for Chairman’s Statement, TheYear information intheannualreport otherthanthefinancialstatements andourauditors’ report thereon. Management is responsible for theother information contained intheannualreport. Other information isdefinedasall Other information · of doing sowouldreasonably beexpectedtooutweighthepublicinterest benefits of such communication. circumstances, wedeterminethat amatter shouldnotbecommunicated inourreport becausetheadverseconsequences in ourauditors’report unlessthelaworregulations preclude publicdisclosure aboutthematter orwhen, inextremely rare audit of thefinancialstatements of thecurrent periodandare therefore the key auditmatters. We describethesematters From thematters communicated withthedirectors, wedeterminethosematters that were of mostsignificance inthe on ourindependence,andwhere applicable,related safeguards. independence, andtocommunicate withthemallrelationships andothermatters that may reasonably bethoughttobear We alsoprovide theauditcommittee withastatement that wehave compliedwithrelevant ethicalrequirements regarding significant auditfindings,includinganydeficiencies ininternalcontrols thatweidentifyduringouraudit. We communicate withtheauditcommittee regarding, amongothermatters, theplannedscopeandtimingof theauditand • • • • • • throughout theaudit.We also: As partof anauditinaccordance withSSAs,weexercise professional judgementandmaintainprofessional scepticism INDEPENDENT AUDITORS’ REPORT supervision andperformance of thegroup audit.We remain solelyresponsible for ourauditopinion. within theGroup toexpress anopinionontheconsolidated financialstatements. We are responsible for thedirection, Obtain sufficientappropriate auditevidenceregarding thefinancialinformation of theentitiesorbusinessactivities presentation. whether thefinancialstatements represent theunderlyingtransactionsand events inamannerthat achievesfair Evaluate theoverallpresentation, structure andcontentof thefinancialstatements includingthedisclosures, and to continueasagoingconcern. obtained uptothedate of ourauditors’report. However, future eventsorconditionsmaycausetheGroup tocease or, ifsuchdisclosures are inadequate, tomodifyouropinion.Ourconclusions are basedontheauditevidence exists, weare required todraw attention inourauditors’report totherelated disclosures inthefinancialstatements significant doubtontheGroup’s abilitytocontinueasagoingconcern.Ifweconcludethat amaterial uncertainty the auditevidenceobtained,whetheramaterial uncertainty existsrelated toeventsorconditionsthat maycast Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on related disclosures madebymanagement. Evaluate theappropriateness of accounting policiesusedandthereasonableness of accountingestimates and Group’s internalcontrols. appropriate inthecircumstances, butnotfor thepurposeof expressing anopinionontheeffectiveness of the Obtain anunderstandingof internalcontrols relevant totheauditinorder todesignauditprocedures that are override of internalcontrols. for one resulting from error, asfraudmayinvolvecollusion,forgery, intentionalomissions,misrepresentations, orthe provide abasisfor ouropinion.Theriskof notdetectingamaterial misstatement resulting from fraudishigherthan and perform auditprocedures responsive tothoserisks, andobtainauditevidencethat issufficientandappropriate to Identify andassesstherisks of material misstatement of thefinancialstatements, whetherduetofraudorerror, design 107

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SIA ENGINEERING COMPANY INDEPENDENT AUDITORS’ REPORT 10 May2019 Singapore Chartered Accountants Public Accountantsand KPMG LLP The engagementpartnerontheauditresulting inthisindependentauditors’report isKenny Tan ChoonWah. provisions of theAct. corporations incorporated inSingapore of whichweare theauditorshave beenproperly kept inaccordance withthe In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary REPORT ONOTHERLEGALANDREGULATORY REQUIREMENTS The accompanying accountingpoliciesandexplanatory notesform anintegralpartof thefinancial statements. FOR THEFINANCIALYEARENDED31MARCH2019 (INTHOUSANDS OF$) CONSOLIDATED INCOME STATEMENT DILUTED EARNINGSPERSHARE(CENTS) BASIC EARNINGSPERSHARE(CENTS) Company accommodation Impairment of property, plantandequipment Amortisation of intangibleassets Depreciation of property, plantandequipment Material costs Staff costs EXPENDITURE REVENUE Share of profits of associated companies,net of tax Surplus ondilutionof shareholding inanassociated company (Loss)/Surplus ondisposalof anassociated company Surplus ondisposalof asubsidiarycompany Surplus ondisposalof property, plantandequipment Interest on externalborrowings Interest income OPERATING PROFIT Other operating expenses Subcontract costs Share of profits of jointventure company, net of tax Non-controlling interests OWNERS OFTHEPARENT PROFIT ATTRIBUTABLE TO: PROFIT FORTHEFINANCIALYEAR Taxation expense PROFIT BEFORETAXATION Notes 15 16 15 18 18 17 9 9 5 4 7 6 8 1,020,896 2018/19 160,955 145,152 488,732 964,144 108,736 118,312 160,870 160,955 179,063 (18,108) 49,459 49,756 56,752 73,502 40,366 3,997 1,080 8,080 14.35 14.38 (938) 309 (88) 85 – – The Group 1,094,881 1,016,048 2017/18 188,022 186,468 494,346 133,913 186,805 188,022 209,589 (21,567) 48,470 49,259 94,617 15,000 78,833 69,534 40,284 1,217 16.66 16.70 3,546 5,429 4,860 (772) 980 870 – 109

ANNUAL REPORT 2018/19 110 SIA ENGINEERING COMPANY FOR THEFINANCIALYEARENDED31MARCH2019 (INTHOUSANDS OF$) COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF The accompanying accountingpoliciesandexplanatory notesform anintegralpartof thefinancial statements. Realisation of foreign currency translation reserve ondisposalof an Foreign currency translation Items that maybereclassified subsequentlytoprofit orloss: Actuarial gainonremeasurement of definedbenefitplan Item that willnotbereclassified toprofit orloss: Share of othercomprehensive incomeof associated/joint venture Net fairvalueadjustmentoncashflowhedges Realisation of foreign currency translation reserve ondisposalof a Non-controlling interests OWNERS OFTHEPARENT TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: TOTAL COMPREHENSIVE INCOME FORTHEFINANCIALYEAR Other comprehensive income,netof tax OTHER COMPREHENSIVE INCOME FORTHEFINANCIALYEAR PROFIT FORTHEFINANCIALYEAR associated company companies subsidiary company 2018/19 178,050 177,083 178,050 160,955 20,788 17,095 16,941 (5,420) 1,699 (126) 154 967 – The Group 2017/18 151,751 152,309 151,751 188,022 (40,688) (36,271) (36,595) 4,973 (207) (673) (558) 324 – AS AT 31MARCH2019 (INTHOUSANDS OF$) BALANCE SHEETS The accompanying accountingpoliciesandexplanatory notesform anintegralpartof thefinancial statements. NET CURRENTASSETS CURRENT LIABILITIES Less: CURRENT ASSETS PREPAYMENTS JOINT VENTURECOMPANY ASSOCIATED COMPANIES SUBSIDIARY COMPANIES INTANGIBLE ASSETS PROPERTY, ANDEQUIPMENT PLANT Represented by: NON-CURRENT LIABILITIES TOTAL EQUITY NON-CONTROLLING INTERESTS EQUITY ATTRIBUTABLEEQUITY TO OWNERS Tax payable Bank loans Amounts owingtorelated parties Contract liabilities Trade andothercreditors Cash andbankbalances Short-term deposits Inventories Amounts owingbyrelated parties Immediate holdingcompany Prepayments andotherdebtors Contract assets Trade debtors Long-term bankloan Deferred taxation General reserve Equity transactionreserve Fair valuereserve Foreign currency translation reserve Share-based compensation reserve Capital reserve Treasury shares Share capital OF THEPARENT Notes 29 24 21 28 27 26 25 24 23 22 21 20 22 19 18 17 16 29 14 15 13 13 13 13 13 13 12 11 1,599,660 1,599,660 1,564,029 1,528,605 1,141,703 719,322 245,615 186,038 964,937 465,762 183,919 154,724 404,328 260,806 420,044 (18,222) (18,020) 35,424 18,567 33,499 55,813 35,564 30,751 92,040 19,860 81,228 13,833 46,647 35,631 12,561 23,070 (4,525) 6,727 5,618 2,913 2019 (906) 784 –

1,556,444 1,556,444 1,514,945 1,483,683 1,112,756 656,795 247,438 189,919 904,233 433,650 The Group 195,667 151,851 392,462 287,638 420,044 (38,915) (21,343) 31,262 20,189 32,300 66,129 34,198 41,901 41,992 19,748 70,948 67,698 41,499 17,297 24,202 (2,377) 4,620 3,653 7,076 2,789 2018 410 – –

1,622,082 1,622,082 1,573,790 1,539,830 1,119,238 698,954 279,186 211,929 978,140 531,199 109,204 162,015 380,047 315,753 420,044 (15,175) 33,960 1 April 15,714 38,223 70,536 37,323 48,751 78,916 14,707 87,504 65,313 48,292 21,876 26,416 15,971 (2,377) 4,083 9,237 2,711 2017 (582) – – – 1,301,224 1,301,224 1,279,994 1,279,994 649,434 210,398 149,431 859,832 435,971 165,479 221,658 153,349 204,055 868,089 420,044 (18,020) 17,487 10,138 33,342 31,365 23,265 44,532 91,305 59,503 61,867 10,861 21,230 21,230 8,412 1,350 5,618 2,913 2019 – – – – – –

1,254,624 1,254,624 1,232,341 1,232,341 The Company 602,824 212,189 141,781 815,013 416,402 180,914 220,897 131,547 229,141 824,124 420,044 (21,343) 18,842 19,396 32,170 39,829 24,516 48,981 40,562 11,156 52,653 61,867 22,283 22,283 8,348 7,076 2,789 2018 (349) – – – – – –

1,277,943 1,277,943 1,254,340 1,254,340 634,938 250,954 172,806 885,892 518,141 105,660 192,926 127,770 254,366 830,465 420,044 (15,175) 1 April 13,780 26,190 38,178 40,405 26,984 49,613 77,046 60,491 61,867 23,603 23,603 15,971 7,552 6,076 2,711 2017 324 – – – – – – 111 ANNUAL REPORT 2018/19 112 SIA ENGINEERING COMPANY FOR THEFINANCIALYEARENDED31MARCH2019 (INTHOUSANDS OF$) STATEMENTS OFCHANGESINEQUITY The accompanying accountingpoliciesandexplanatory notesform anintegralpartof thefinancial statements. Balance at 31March 2019 Total changesinownershipinterestsa Acquisition of non-controlling interests Total contributionsbyanddistributions Dividends Treasury shares reissued pursuanttoequity Share options lapsed Share awards released Share-based compensation expense Capital contribution Total comprehensiveincomeforthe Other comprehensive incomefor theyear, Share of othercomprehensive incomeof Net fairvalueadjustmentoncashflowhedges Realisation of foreign currency translation Foreign currency translation Actuarial gainonremeasurement of defined Profit for theyear Balance at 1April2018 The Group subsidiary company subsidiary without changeincontrol to owners compensation plans financial year net of tax associated/joint venture companies reserve on disposal of a subsidiary company benefit plan Notes 11,13 11,13 10 17 12 13 17 420,044 420,044 capital Share – – – – – – – – – – – – – – – – – Treasury (18,020) (21,343) shares 3,323 3,447 (124) – – – – – – – – – – – – – – reserve Capital 2,913 2,789 124 124 – – – – – – – – – – – – – – – compensation Share-based reserve (2,291) (1,458) (3,447) 5,618 7,076 4,280 – – – – – – – – – – – – – translation currency Foreign (18,222) (38,915) reserve 20,693 20,693 19,981 (126) Attributable toOwnersoftheParent 838 – – – – – – – – – – – – Fair value reserve (4,559) (4,559) (6,258) 1,699 3,653 (906) – – – – – – – – – – – – – transaction reserve Equity (2,148) (2,148) (4,525) (2,377) – – – – – – – – – – – – – – – 1,141,703 1,112,756 (134,293) (132,002) 160,949 160,870 General reserve 2,291 79 79 – – – – – – – – – – 1,528,605 1,483,683 (134,293) (130,013) 177,083 160,870 19,981 16,213 (2,148) (2,148) (5,420) 1,699 4,280 Total (126) 79 – – – – controlling interests 35,424 31,262 (2,556) (2,556) (3,034) 8,785 5,751 Non- 967 882 807 75 85 – – – – – – – Total equity 1,564,029 1,514,945 (137,327) (124,262) 160,955 178,050 17,095 20,788 (4,704) (4,704) (5,420) 8,785 1,699 4,280 (126) 154 – – – The accompanying accountingpoliciesandexplanatory notesform anintegralpartof thefinancial statements. Realisation of foreign currency translation Foreign currency translation Actuarial gainonremeasurement of defined Profit for theyear Balance at 1April2018 The Group Share of othercomprehensive incomeof Net fairvalueadjustmentoncashflowhedges Capital contribution Total comprehensiveincomeforthe Other comprehensive incomefor theyear, Treasury shares reissued pursuanttoequity Share options lapsed Share awards released Share-based compensation expense Total changesinownershipinterestsa Acquisition of non-controlling interests Total contributionsbyanddistributions Dividends Balance at 31March 2019 reserve on disposal of a subsidiary company benefit plan associated/joint venture companies financial year net of tax compensation plans subsidiary company subsidiary without changeincontrol to owners Notes 11,13 11,13 10 17 13 12 17 420,044 420,044 capital Share – – – – – – – – – – – – – – – – – Treasury (21,343) (18,020) shares 3,323 3,447 (124) – – – – – – – – – – – – – – reserve Capital 2,789 2,913 124 124 – – – – – – – – – – – – – – – compensation Share-based reserve (2,291) (1,458) (3,447) 7,076 5,618 4,280 – – – – – – – – – – – – – translation currency Foreign (38,915) (18,222) reserve 19,981 20,693 20,693 (126) Attributable toOwnersoftheParent 838 – – – – – – – – – – – – Fair value reserve (6,258) (4,559) (4,559) 3,653 1,699 (906) – – – – – – – – – – – – – transaction reserve Equity (2,377) (2,148) (2,148) (4,525) – – – – – – – – – – – – – – – 1,112,756 1,141,703 (132,002) (134,293) 160,870 160,949 General reserve 2,291 79 79 – – – – – – – – – – 1,483,683 1,528,605 (130,013) (134,293) 160,870 177,083 19,981 16,213 (5,420) (2,148) (2,148) 1,699 4,280 Total (126) 79 – – – – controlling interests 31,262 35,424 (2,556) (3,034) (2,556) 8,785 5,751 Non- 807 967 882 75 85 – – – – – – – Total equity 1,514,945 1,564,029 (124,262) (137,327) 160,955 178,050 20,788 17,095 (5,420) (4,704) (4,704) 1,699 8,785 4,280 (126) 154 – – – 113 ANNUAL REPORT 2018/19 114 SIA ENGINEERING COMPANY The accompanying accountingpoliciesandexplanatory notesform anintegralpartof thefinancial statements. FOR THEFINANCIALYEARENDED31MARCH2019 (INTHOUSANDS OF$) STATEMENTS OFCHANGESINEQUITY Balance at 1April2017 The Group Balance at 31March 2018 Total contributionsbyanddistributions Dividends Treasury shares reissued pursuanttoequity Purchase of treasury shares Share options lapsed Share awards released Share-based compensation expense Capital contribution Total comprehensiveincomeforthe Other comprehensive incomefor theyear, Share of othercomprehensive incomeof Net fairvalueadjustmentoncashflowhedges Realisation of foreign currency translation Foreign currency translation Actuarial gainonremeasurement of defined Profit for theyear As restated Effects of changesinaccountingstandards to owners compensation plans financial year net of tax associated/joint venture companies associated company reserve on disposalof an benefit plan Notes 11,13 11,13 2(b) 10 12 12 13 420,044 420,044 420,044 capital Share – – – – – – – – – – – – – – – – – Treasury (15,175) (10,159) (21,343) (15,175) shares (6,168) 2,926 1,065 – – – – – – – – – – – – – reserve Capital 2,711 2,789 2,711 78 78 – – – – – – – – – – – – – – – compensation Share-based reserve 15,971 15,971 (8,895) (7,777) (3,169) 2,203 7,076 (152) – – – – – – – – – – – – translation currency Foreign reserve (38,915) (38,915) (38,915) (38,773) (68,048) 68,048 (207) Attributable toOwnersoftheParent 65 – – – – – – – – – – – – Fair value reserve 4,908 3,653 4,235 4,235 (582) (673) (582) – – – – – – – – – – – – – transaction reserve Equity (2,377) (2,377) (2,377) – – – – – – – – – – – – – – – – – 1,119,238 1,112,756 1,201,496 (193,471) (201,491) General 186,805 186,989 reserve (82,258) 7,777 243 184 184 – – – – – – – – 1,539,830 1,483,683 1,554,040 (208,456) (201,491) 186,805 152,309 (10,159) (34,496) (38,773) (14,210) 2,203 4,973 Total (673) (207) 991 184 – – – controlling interests 33,960 31,262 33,960 (2,140) (3,806) (1,775) (1,915) 1,666 1,217 Non- (558) 140 – – – – – – – – – Total equity 1,573,790 1,514,945 1,588,000 (210,596) (205,297) 188,022 151,751 (10,159) (36,271) (40,688) (14,210) 2,203 1,666 4,973 (673) (207) 991 324 – – The accompanying accountingpoliciesandexplanatory notesform anintegralpartof thefinancial statements. Balance at 31March 2018 Total contributionsbyanddistributions Dividends Treasury shares reissued pursuanttoequity Purchase of treasury shares Share options lapsed Share awards released Share-based compensation expense Capital contribution Total comprehensiveincomeforthe Other comprehensive incomefor theyear, Share of othercomprehensive incomeof Net fairvalueadjustmentoncashflowhedges Realisation of foreign currency translation Foreign currency translation Actuarial gainonremeasurement of defined Profit for theyear As restated Effects of changesinaccountingstandards Balance at 1April2017 The Group to owners compensation plans financial year net of tax associated/joint venture companies associated company reserve on disposalof an benefit plan Notes 11,13 11,13 2(b) 10 12 12 13 420,044 420,044 420,044 capital Share – – – – – – – – – – – – – – – – – Treasury (10,159) (21,343) (15,175) (15,175) shares (6,168) 1,065 2,926 – – – – – – – – – – – – – reserve Capital 2,789 2,711 2,711 78 78 – – – – – – – – – – – – – – – compensation Share-based reserve 15,971 15,971 (8,895) (3,169) (7,777) 2,203 7,076 (152) – – – – – – – – – – – – translation currency Foreign reserve (38,915) (38,915) (38,915) (38,773) (68,048) 68,048 (207) Attributable toOwnersoftheParent 65 – – – – – – – – – – – – Fair value reserve 4,908 3,653 4,235 4,235 (673) (582) (582) – – – – – – – – – – – – – transaction reserve Equity (2,377) (2,377) (2,377) – – – – – – – – – – – – – – – – – 1,119,238 1,201,496 1,112,756 (193,471) (201,491) General 186,805 186,989 reserve (82,258) 7,777 243 184 184 – – – – – – – – 1,539,830 1,554,040 1,483,683 (208,456) (201,491) 186,805 152,309 (10,159) (34,496) (38,773) (14,210) 2,203 4,973 Total (673) (207) 991 184 – – – controlling interests 33,960 33,960 31,262 (2,140) (3,806) (1,775) (1,915) 1,666 1,217 Non- (558) 140 – – – – – – – – – Total equity 1,573,790 1,588,000 1,514,945 (210,596) (205,297) 188,022 151,751 (10,159) (36,271) (40,688) (14,210) 1,666 2,203 4,973 (673) (207) 324 991 – – 115 ANNUAL REPORT 2018/19 116 SIA ENGINEERING COMPANY The accompanying accountingpoliciesandexplanatory notesform anintegralpartof thefinancial statements. FOR THEFINANCIALYEARENDED31MARCH2019 (INTHOUSANDS OF$) STATEMENTS OFCHANGESINEQUITY Balance at 31March 2019 Total contributionsbyand Dividends Treasury shares reissued Share options lapsed Share awards released Share-based compensation Total comprehensive Net fairvalueadjustmenton Other comprehensive Profit for theyear Balance at 1April2018 The Company distributions toowners compensation plans pursuant toequity expense financial year income forthe cash flowhedges net of tax: income for the year,

Notes 11,13 11,13 10 12 420,044 420,044 capital Share – – – – – – – – – Treasury (18,020) (21,343) shares 3,323 3,447 (124) – – – – – – reserve Capital 2,913 2,789 124 124 – – – – – – – compensation Share-based reserve (1,458) (2,291) (3,447) 5,618 4,280 7,076 – – – – – Fair value reserve 1,350 1,699 1,699 (349) – – – – – – – (132,002) (134,293) General 868,089 175,967 175,967 824,124 reserve 2,291 – – – – 1,279,994 1,232,341 (130,013) (134,293) 177,666 175,967 4,280 1,699 Total – – – The accompanying accountingpoliciesandexplanatory notesform anintegralpartof thefinancial statements. FOR THEFINANCIALYEARENDED31MARCH2019 (INTHOUSANDS OF$) STATEMENTS OFCHANGESINEQUITY Balance at 31March 2018 Total contributionsbyand Dividends Treasury shares reissued Purchase of treasury Share options lapsed Share awards released Share-based compensation Total comprehensive Net fairvalueadjustmenton Other comprehensive Profit for theyear As restated Effects of changesin Balance at 1April2017 The Company distributions toowners compensation plans pursuant toequity shares expense financial year income forthe cash flowhedges net of tax: income for the year, accounting standards

Notes 11,13 11,13 2(b) 10 12 12 420,044 420,044 420,044 capital Share – – – – – – – – – – – Treasury (21,343) (10,159) (15,175) (15,175) shares (6,168) 1,065 2,926 – – – – – – – reserve Capital 2,789 2,711 2,711 78 78 – – – – – – – – – compensation Share-based reserve 15,971 15,971 (8,895) (7,777) (3,169) 7,076 2,203 (152) – – – – – – Fair value reserve (349) (673) (673) 324 324 – – – – – – – – – (193,471) (201,491) General 824,124 187,130 187,130 830,465 844,675 reserve (14,210) 7,777 243 – – – – 1,232,341 1,254,340 1,268,550 (208,456) (201,491) 186,457 187,130 (10,159) (14,210) 2,203 Total (673) 991 – – 117 ANNUAL REPORT 2018/19 118 SIA ENGINEERING COMPANY FOR THEFINANCIALYEARENDED31MARCH2019 (INTHOUSANDS OF$) CONSOLIDATED STATEMENT OFCASH FLOWS The accompanying accountingpoliciesandexplanatory notesform anintegralpartof thefinancial statements. CASH ANDEQUIVALENTS AT ENDOFFINANCIALYEAR CASH FLOW FROM FINANCINGACTIVITIES NET CASHPROVIDED BY INVESTINGACTIVITIES CASH FLOW FROM INVESTINGACTIVITIES ANALYSIS OFCASHANDEQUIVALENTS CASH ANDEQUIVALENTS AT ENDOFFINANCIAL YEAR CASH ANDEQUIVALENTS AT BEGINNING OFFINANCIAL YEAR NET CASHINFLOW/(OUTFLOW) NET CASHUSEDINFINANCINGACTIVITIES NET CASHPROVIDED BY OPERATING ACTIVITIES Cash andbankbalances Proceeds from exercise of share options Dividends paidbysubsidiarycompaniestonon-controlling interests Dividends paid Interest received from deposits Dividends received from joint venture company Dividends received from associated companies Investment inassociated companies Proceeds from disposal of anassociated company Disposal of asubsidiarycompany, netof cashdisposedof Proceeds from capital reduction of anassociated company Proceeds from disposal of property, plantandequipment Purchase of intangibleassets Capital expenditure Short-term deposits Effect of exchange rate changes Purchase of treasury shares Repayment of borrowings Proceeds from borrowings Interest paid Proceeds from issuanceof share capitalbyasubsidiarycompany Acquisition of additionalinterest inasubsidiarycompany to non-controlling interests Notes 27 10 16 15 26 12 30 (134,293) (137,534) 2018/19 521,575 465,762 521,575 499,779 (14,817) (24,960) 55,813 82,845 36,255 71,941 75,348 20,659 (3,034) (1,935) (4,704) (9,113) 6,488 3,965 1,632 4,276 8,785 1,137 5,763 (938) – – – The Group (201,491) (215,974) 2017/18 499,779 433,650 499,779 601,735 (11,423) (31,599) (32,075) (10,159) (98,036) 66,129 63,545 45,899 58,706 21,056 54,393 (3,806) (6,097) (3,920) 3,288 4,975 4,718 1,666 3,694 (772) 991 – – 2. 1. GENERAL 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (a) (“IFRS”), unlessotherwisestated. to Singapore FinancialReporting Standards (International) (“SFRS(I)”)andInternational FinancialReportingStandards statements andinpreparing theopeningstatements of financialposition at 1April2017 for thepurposes of transition The accounting policies applied by the Group and the Company are consistent to all periods presented in the financial resolution of theBoard of Directors on10 May2019. The financialstatements for thefinancialyearended31March 2019were authorised forissueinaccordance witha statements. There have beennosignificantchangesinthenature of theseactivitiesduringthefinancialyear. investment holdings.Theprincipalactivitiesof thesubsidiary companiesare disclosedinNote17tothefinancial and fleet management programme, the provision of line maintenance and technical ground handling services and The principalactivitiesof theCompanyare theprovision of airframemaintenance,componentoverhaulservices interest inequity-accounted investees. its subsidiarycompanies(togetherreferred toasthe‘Group’ andindividuallyas‘Group entities’)andtheGroup’s The financial statements of theGroup as at 31March 2019 and for theyear thenendedcomprisetheCompanyand The registered office oftheCompanyis at31AirlineRoad,Singapore 819831. company isTemasek Holdings(Private) Limited,bothincorporated intheRepublicof Singapore. Limited (“SGX-ST”). TheCompanyisasubsidiarycompanyof Singapore AirlinesLimitedanditsultimate holding Singapore whichisalsotheplaceof domicile.TheCompanyislistedontheSingapore Exchange SecuritiesTrading SIA EngineeringCompanyLimited(the“Company”) isalimitedliabilitycompanyincorporated intheRepublicof SUMMARY OFSIGNIFICANTACCOUNTING POLICIES unless otherwisestated. currency andallfinancialinformation presented inSGDhave beenrounded to thenearest thousand($’000), The financialstatements are presented inSingapore Dollars (“SGD”), whichistheCompany’sfunctional policies below. The financialstatements have beenprepared onthehistoricalcostbasisexcept asdisclosedintheaccounting Standards inSingapore (“FRS”). In theprevious financialyears,thestatements were prepared inaccordance withFinancialReporting otherwise specified. All references toSFRS(I)sandIFRSsare subsequentlyreferred toasIFRSsinthesefinancialstatements unless financial statements of theGroup andtheCompanyprepared inaccordance withSFRS(I)andIFRS. changes in equity of the Company have been prepared in accordance with SFRS(I) and IFRS. These are the first The consolidated financialstatements of theGroup andthestatement of financialpositionandstatement of effect from 1April2018. As required by the listing rules of SGX-ST, the Group applied SFRS(I) using the retrospective approach with Basis ofpreparation 119 ANNUAL REPORT 2018/19 120

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 2. (b) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (i) statements, otherthanbelow. The application of theabovestandards andinterpretations donothave asignificantimpactonthefinancial • • • • • IFRSs, amendmentstoandinterpretation of IFRSwhichare effective from thesamedate. In additiontotheadoptionof thenewframework,Group alsoconcurrently appliedthefollowing new Group’s date of transition). Adoption of IFRS in the preparation of the opening IFRS statement of financial position at 1 April 2017 (the In adoptingthenewframework,Group appliedthespecifictransitionrequirements inIFRS1First-time Adoption ofSFRS(I)andIFRS (ii) b) a) on thefinancialstatements. mandatory exceptions andtheoptionalexemptions inIFRS1didnothave anyothersignificantimpact exceptions andoptionalexemptions inIFRS1.Except asdescribedbelow, theapplication of the retrospective basis, as if such accounting policy had always been applied, subject to the mandatory IFRS 1generallyrequires that theGroup appliesIFRSthat are effective as at 31March 2019ona IFRS 1 IFRIC 22Foreign Currency Transactions andAdvanceConsideration. at Fair Value; and Amendments toInternational AccountingStandards (“IAS”) 28:MeasuringanAssociate orJointVenture Amendments toIFRS1:Deletionof short-termexemptions for first-timeadopters; Amendments toIFRS2:Classification andMeasurement of Share-based PaymentTransactions; IFRS 15 Revenue from Contracts with Customers and Amendments to IFRS 15: Clarifications to IFRS 15; and fulfillingcontractstobe recognised asseparate assetswhen specifiedcriteria are met. revenue isrecognised. Italsointroduces newcostguidance whichrequires certaincostsof obtaining IFRS 15establishes a comprehensive frameworkfor determiningwhether, howmuchandwhen IFRS 15 foreign operations willexclude translation differences that arose. with IFRStogeneralreserves. Afterthedate of transition,anygainorlosson disposal of any translation reserve of approximately $68,048,000 asat 1April2017determinedinaccordance to zero asat thedate of transitiontoIFRS1andreclassified thecumulative foreign currency The Group haselectedtoreset theforeign currency translation reserve for allforeign operations Foreign currency translation reserve rotable spares were determinedtobeapproximately $18,623,000. secondary markets andtheserviceconditionof therotables. Thefairvalueof theseaircraft based onanindependentvaluation, whichtookintoaccounttheexpected resale pricesinthe as theirdeemedcostat thedate of transitiontoIFRS1onApril2017. Thesefairvalueswere The Group andCompanyhave electedtoregard thefairvaluesof certainaircraft rotable spares Fair valueasdeemedcostexemption for property, plantandequipment 2. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (b) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (iii) (ii) Adoption ofSFRS(I)andIFRS(continued) than theimpactondepreciation anditscorresponding impactonprofit before taxation asnotedbelow. There were nomaterial adjustmentstotheGroup’s statement of cashflowsarisingontransition,other impact arisingfrom theapplication of IFRS1and15asdescribedaboveare summarisedbelow. The lineitemsontheGroup’s andCompany’sfinancialstatements that were adjustedwithsignificant offinancialimpact(inthousands$) Summary recognise that amountof revenue, asallowedunderIFRS1. performance obligations asat 31March 2018aswellanexplanation of whentheGroup expectsto For 2017/18,theGroup didnotdisclosetheamountof thetransactionpriceallocated totheremaining retrospective approach. The Group andCompanyadoptedIFRS15inits31March 2019financialstatements, usingthe IFRS 15(continued) The Company The Group Contract liabilities Trade andother creditors Contract assets Trade debtors Property, plantandequipment Deferred taxation General reserve Balance Sheet: Depreciation of property, plantand Income statement: Surplus ondisposalof anassociated Taxation expense Contract liabilities Trade andothercreditors Contract assets Trade debtors Property, plantandequipment Deferred taxation Foreign currency translation reserve Balance Sheet: General reserve equipment company as previously framework 1,192,263 reported (106,232) 174,187 234,880 242,531 836,314 222,455 267,928 301,028 24,560 50,903 14,269 21,154 26,479 FRS – – – – (182,227) (196,980) 180,914 195,667 (32,406) (32,536) IFRS 15 32,170 32,300 (1,077) (1,077) 31 March2018 31 March2018 2017/2018 – – – – – – – – (13,390) (11,113) (13,390) (78,430) 67,317 (2,277) (2,433) (2,277) IFRS 1 731 413 – – – – – – – – framework 1,112,756 141,781 180,914 229,141 824,124 189,919 195,667 287,638 (38,915) 32,170 52,653 22,283 48,470 15,000 21,567 32,300 70,948 24,202 IFRS 121 ANNUAL REPORT 2018/19 122 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 2. (c) (b) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) expected tohave amore significantimpact ontheGroup, isasdescribedbelow. interpretations of IFRSsonthefinancial statements. TheGroup’s preliminary assessment of IFRS16, whichis IFRS as SFRS(I). The Group is still in the process of assessing the impact of thenewIFRSs, amendments toand The AccountingStandards Council has issuedtheabove new IFRS, amendmentstoandinterpretations of 31 March 2020 are asfollows: New standards andamendmentstostandards that are effective from theGroup’s financialyearending Standards issuedbutnotyeteffective (iii) Adoption ofSFRS(I)andIFRS(continued) Amendments toIFRS10and IAS28:SaleorContributionof Assetsbetweenan IFRS 17InsuranceContracts IFRIC 23UncertaintyoverIncomeTax Treatments IFRS 16Leases Amendments toIAS19:PlanAmendment,Curtailmentof Settlement Amendments toIFRS3and11:Previously HeldInterest inaJointOperation Amendments toIFRS9:Prepayment Features withNegative Compensation Amendments toIAS12:IncomeTax Consequencesof PaymentsonFinancial Amendments toIAS28:Long-termInterests inAssociates andJointVentures Amendments toIAS23:Borrowing costseligiblefor capitalisation Description Investor anditsAssociate orJointVenture Instruments ClassifiedasEquity Summary offinancialimpact(inthousands$)(continued) Summary The Group Trade debtors Property, plantandequipment Deferred taxation General reserve Balance Sheet: Contract assets Contract liabilities Trade andothercreditors Trade debtors Property, plantandequipment Deferred taxation General reserve Contract assets Foreign currency translation reserve Balance Sheet: Contract liabilities Trade andothercreditors The Company as previously framework 1,201,496 reported 167,427 270,189 844,675 211,183 197,986 331,576 250,353 (68,048) 26,293 29,106 FRS – – – – (106,936) (110,482) 105,660 109,204 IFRS 15 (38,377) (38,424) 38,178 38,223 (1,077) (1,077) 1 April2017 – – – – – (15,823) (13,133) (15,823) (81,181) 68,048 IFRS 1 (2,690) (2,690) To bedetermined – – – – – – – – Effective from Framework 1 April2021 1 April2019 1 April2019 1 April2019 1 April2019 1 April2019 1 April2019 1 April2019 1 April2019 1,119,238 254,366 830,465 105,660 172,806 315,753 109,204 211,929 23,603 60,491 38,178 26,416 87,504 38,223 IFRS – 2. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (c) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (i) which have beenidentifiedasleasesinaccordance withIAS17andIFRIC4. a leaseontransition.Thismeansthat IFRS16willbeapplied to allcontractsentered intobefore 1April2019 of comparative information. TheGroup planstoapplythepracticalexpedientgrandfather thedefinitionof The Group willadopt IFRS 16on1April 2019, usingthemodified retrospective approach, withnorestatement for annual periodsbeginningonorafter 1April2019, withearlyadoptionpermitted. SIC-27 Evaluating theSubstanceof Transactions InvolvingtheLegalFormof aLease.Thestandard iseffective IFRIC 4DeterminingwhetheranArrangementcontainsaLease,SIC-15 Operating Leases–Incentivesand as financeoroperating leases.IFRS16replaces existingleaseaccountingguidance,includingIAS17Leases, value items. Lessor accounting remains similar to the current standard – i.e.lessorscontinue to classify leases obligation tomake leasepayments.There are recognition exemptions for short-termleasesandof low right-of-use ("ROU") asset representing its right to use the underlying assetanda lease liabilityrepresenting its IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a IFRS 16Leases Standards issuedbutnotyeteffective(continued) (iv) (iii) (ii) • • • • In addition,theGroup planstoapplythefollowing practicalexpedients: capitalisation of thepresent valueof future leasepayments. The Group expects tomeasure ROUassetsat anamountequaltotheleaseliabilities arisingfrom the As lessee an increase inleaseliabilities of $90,950,000 asat 1April 2019. lease liabilities of $103,397,000. TheCompany expectsanincrease inROUassetsof $90,950,000 and As at 1April2019, theGroup expectsanincrease inROUassets of $103,397,000andanincrease in Impact onbalancesheets and financecharges onleaseliabilities. statement under“Company accommodation” willbe replaced by depreciation expensefor ROUassets The expensesrelated tooperating leaseswhichare currently shownintheconsolidated income Impact onconsolidated incomestatement No significantimpactisexpected for otherleasesinwhichtheGroup isalessor. respectively. these twotypesof leasesusingtheexistingoperating leaseand financeleaseaccountingmodels the Group continuestoclassifyitsleasesasoperating leasesorfinanceleases,andtoaccount for IFRS 16substantiallycarriesforward thecurrent existinglessoraccountingrequirements. Accordingly, As lessor terminate thelease. use hindsightindeterminingtheleasetermifcontractcontainsoptionstoextendor exclude initialdirect costsfor themeasurement of ROUassetsasof 1April2019;and short-term lease; account for leasesfor whichtheleasetermsendswithin12monthsfrom 1April2019as apply asinglediscountrate toaportfolio of leaseswithreasonably similarcharacteristics;

123 ANNUAL REPORT 2018/19 124 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 2. (d) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) has beencarriedforward from theprevious FRSframeworkasat thedate of transition. before thedate of transitiontoIFRS, i.e.1April2017.Goodwillarisingfrom acquisitionsbefore 1April2017 As partof thetransitiontoIFRS, theGroup electednottorestate thosebusinesscombinations that occurred Acquisitions before 1April2017 extent that there is noevidenceof impairment. interest intheinvestee.Unrealised lossesare eliminated inthesamewayasunrealised gains,butonlytothe with associated andjointventure companiesare eliminated againsttheinvestment totheextentof theGroup’s transactions, are eliminated intheconsolidated financialstatements. Unrealised gainsarisingfrom transactions Intra-group balances andtransactions, and anyunrealised incomeandexpensesarisingfrom intra-group of thenetassetsof thesubsidiarycompanies. loss isrecognised inprofit orloss.Insuchcircumstances, adjustmentsare basedonaproportionate amount are accounted for asequitytransactionsandtherefore noadjustmentsare madetogoodwillandnogainor Changes intheCompany’sownershipinterest inasubsidiarycompanythat donotresult inalossof control share of theacquiree’s identifiablenetassets. (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate The Group electsfor eachindividualbusinesscombination, whethernon-controlling interest intheacquiree date andsubsequent changes tothefairvalueof thecontingentconsideration are recognised inprofit orloss. settled withinequity. Otherwise,othercontingentconsideration isremeasured at fairvalueat eachreporting consideration transferred. Ifthecontingentconsideration isclassifiedasequity, itisnot remeasured and Any contingentconsideration willberecognised at fairvalueat theacquisition date andincludedinthe Such amountsare generallyrecognised inprofit orloss. The consideration transferred doesnotincludeamountsrelated tothesettlementof pre-existing relationships. a bargain purchase gainisrecognised immediately inprofit orloss. recorded Whentheamountisnegative, asgoodwill. Theaccountingpolicyfor goodwillissetoutinNote2(f). equity interest intheacquiree (ifany),overthenetfairvalueof theacquiree’s identifiableassetsand liabilitiesis amount of non-controlling interest intheacquiree (ifany),andthefairvalueof theGroup’s previously held Any excess of thesumof thefairvalueof theconsideration transferred inthebusinesscombination, the recognised asexpensesincurred. Group. Acquisition-related costs,otherthanthoseassociated withtheissueof debtorequitysecurities, are Business Combinations asat theacquisitiondate, whichisthedate onwhichcontrol istransferred tothe Business combinations are accountedfor byapplyingtheacquisitionmethod inaccordance withFRS103 Acquisitions from 1April2017 Basis ofconsolidation 2. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (e) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) discontinued isrecognised inprofit orloss. and proceeds from disposalandthecarryingamountof theinvestmentat thedate theequitymethodwas retained interest at fairvalue. Anydifference between thefairvalueof theaggregate of theretained interest Upon lossof significantinfluence orjointcontrol overtheassociate orjointventure, theGroup measures the made tobringtheaccountingpoliciesinlinewiththoseof theGroup. experience andadjustingfor theeffects of knownsignificanttransactions.Where necessary, adjustmentsare Otherwise anestimate ismadefor thebalancestoendof theaccounting periodbasedonhistorical statements available andunauditedmanagementfinancialstatements totheendof theaccountingperiod. are notco-terminouswiththoseof theGroup, theshare of results isarrivedat from thelastauditedfinancial used bytheGroup inapplyingtheequitymethod.Where thedates of theaudited financialstatements used The most recently available audited financial statements of the associated and joint venture companies are obligations ormadepaymentsonbehalfof theassociated orjointventure company. the associated orjointventure company, theGroup doesnotrecognise furtherlosses,unlessithasincurred When theGroup’s share of lossesinanassociated orjointventure companyequalsorexceeds itsinterest in the carryingamountsof theinvestments. joint venture companies,untilthedate onwhichsignificantinfluence orjointcontrol ceases.Dividendsreduce statements includetheGroup’s share of profit orlossandothercomprehensive incomeof associated and initially at cost,including transaction costs. Subsequenttoinitialrecognition, theconsolidated financial The Group accounts for itsinvestmentsinassociated andjointventure companiesusingtheequity method, to thenetassetsof thearrangement,rather thanrightstoitsassetsandobligations for itsliabilities. A jointventure companyisanarrangementinwhichtheGroup hasjointcontrol, whereby theGroup hasrights the Group holds20%ormore of thevotingpowerof anotherentity. control, over the financial and operating policies of the entity. Significant influence is presumed to existwhen An associated companyisanentityinwhichtheGroup hassignificantinfluence, butnotcontrol orjoint deficit balance. are allocated tothenon-controlling interests evenifdoingsocausesthenon-controlling interest tohave a policies adoptedbytheGroup. Lossesapplicabletothenon-controlling interests inasubsidiarycompany The accountingpoliciesof subsidiarycompanieshave beenchangedwhennecessarytoalignthemwith control ceases. are includedintheconsolidated financialstatements from thedate thecontrol commencesuntilthedate the affect thosereturns through itspowerovertheinvestee.Thefinancialstatements of subsidiarycompanies it isexposed, or hasrights, to variablereturns from itsinvolvement with theinvesteeandhasabilityto A subsidiarycompanyisaninvesteethat iscontrolled bytheGroup. TheGroup controls aninvesteewhen companies are accountedfor at costlessaccumulated impairmentlosses. In the Company’s separate financial statements, investments in subsidiary, associated and joint venture Subsidiary, associated andjointventurecompanies 125 ANNUAL REPORT 2018/19 126 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 2. (f) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) reviewed at theendof thereporting periodandadjusted ifappropriate. Advance and progress payments are not amortised. Amortisation methods, useful lives and residual values are maintenance serviceperiods. over amaximumof 44years,the expected project life from the startof aircraft enginesalesthrough post-sales for use.Theseengineprogramme assetsincluding developmentcostsare amortisedonastraight-linebasis For engineprogramme assetsincluding developmentcosts,amortisation beginsonlywhenassetsare available • • assets from thedate theyare available for use.Theestimated usefullivesare asfollows: Amortisation is recognised in profit orloss ona straight-line basis overtheestimated useful lives of intangible Amortisation iscalculated basedonthecostof theasset,lessitsresidual value. Amortisation and accumulated impairmentlosses. Licences were acquired inbusinesscombinations andare measured at costlessaccumulated amortisation Others 1 April2001waspreviously written-off directly to reserves intheyear of acquisition. acquisitions completed on or after 1 April 2001. Goodwill arising from business combinations before In theGroup’s balancesheet,theinvestmentsinassociates includegoodwillonacquisitionidentified evidence that theinvestmentinassociated orjointventure companymaybeimpacted. in associated orjointventure companyistestedfor impairmentasasingleassetwhenthere isobjective separately, andtherefore, isnottestedfor impairmentseparately. Instead,theentire amountof theinvestment Goodwill that forms partof thecarryingamountof anassociated orjointventure companyisnotrecognised impairment losses. and contingentliabilities.Followinginitialrecognition, goodwillismeasured at cost lessanyaccumulated the businesscombination overtheGroup’s interest inthenetfairvalueof theidentifiableassets,liabilities Goodwill acquired inabusinesscombination isinitially measured at costbeingtheexcess of thecostof Goodwill less accumulated amortisation andaccumulated impairmentlosses. with itsparticipation inaircraft enginedevelopmentprojects withothercompanies.Thisismeasured at cost This relates to the Group’s share of engine programme assets including development costs made in connection Deferred enginedevelopmentcosts losses. Acquired computersoftware isstated at costlessaccumulated amortisation andaccumulated impairment Computer software Intangible assets Licences Computer software 3 years 3 3 –5years 2. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (g) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) the relevant proportion of thecumulative amountisreclassified toprofit orloss. investment inanassociated orajointventure companywhileretaining significantinfluence orjointcontrol, cumulative amount is reattributed to non-controlling interests. When theGroup disposes of only part of its of only partof itsinterest inasubsidiarycompanywhileretaining control, therelevant proportion of the operation is reclassified to profit orlossaspart ofthegainorlossondisposal.When Group disposes joint control is lost, the cumulative amount in the foreign currency translation reserve related to that foreign to non-controlling interests. Whenaforeign operation isdisposedof suchthat control, significantinfluence or currency translation reserve inequity, except totheextentthat theforeign currency differences are allocated Foreign currency differences are recognised inother comprehensive income,andpresented inthe foreign translated intoSGDat theclosingrate at theendof thereporting period. liabilities of theforeign operations andare recorded inthefunctionalcurrency of theforeign operations, and Goodwill andfairvalueadjustmentsarisingfrom theacquisitionof foreign operations are treated asassetsand initially inothercomprehensive incomeandaccumulated underforeign currency translation reserve. monthly into SGDat the prevailing exchange rates. The resulting gains or lossesonexchange are recognised period. Thefinancial results of foreign subsidiary, associated andjointventure companies are translated and jointventure companiesare translated intoSGDat theexchange rates rulingat theendof thereporting For thepurposeof theconsolidated financialstatements, thenetassets of the foreign subsidiary, associated Foreign operations deferred toequity. Foreign currency differences are recognised inprofit orloss, except forqualifyingcashflow hedgeswhich are year, andtheamortisedcostinforeign currency translated at theexchange rate at theendof theyear. in thefunctionalcurrency at thebeginningof theyear, adjustedfor effective interest andpaymentsduringthe The foreign currency gainorlossonmonetaryassetsandliabilitiesisthedifference betweenamortisedcost the fairvaluewasdetermined. liabilities measured at fairvalueinaforeign currency are translated usingtheexchange rates at thedate when translated usingtheexchange rates asat thedates of theinitialtransactions.Non-monetaryassetsand Non-monetary assetsandliabilitiesthat are measured intermsof historicalcostinaforeign currency are All foreign currency monetaryassetsandliabilitiesare translated intoSGDusingyear-end exchange rates. prevailing at dates of transactions. Foreign currency transactions are converted into SGDat exchange rates whichapproximate bankrates Foreign currency transactions Foreign currencies 127 ANNUAL REPORT 2018/19 128 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 2. (h) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (ii) (i) Property, plantandequipment depreciation ischarged after assets are depreciated totheirresidual values. Fully depreciated assets are retained in the financial statements until they are no longer in use. No Advance andprogress paymentsare notdepreciated asthey are notyetavailable for use. use. Depreciation isrecognised from thedate theproperty, plantandequipmentare installedand ready for useful life that is different from the remainder of that asset, that component is depreciated separately. if appropriate. Significantcomponents of individualassetsare assessedandifacomponenthas lives, residual valuesanddepreciation methodare reviewed annually, andadjustedprospectively, write downtheircoststoestimated residual valuesat theendof theiroperational lives.Operational Property, plantandequipmentare depreciated onastraight-linebasisat rates whichare calculated to Depreciation ofproperty, plantandequipment in profit orlossintheyearassetisderecognised. benefits are expected from itsuseordisposal.Anygainlossonderecognition of theassetisincluded An itemof property, plantandequipmentisderecognised upondisposalorwhennofuture economic changes incircumstances indicate that thecarryingvaluemaynotberecoverable. The carryingvaluesof property, plantandequipmentare reviewed for impairmentwheneventsor financial statements andanygainorloss resulting from theirdisposalisincludedinprofit orloss. When assetsare soldorretired, theircostsandaccumulated depreciation are removed from the Note 2(s). plant andequipmentare alsocapitalised.Theaccountingpolicyfor borrowing costsissetoutin that are directly attributable totheacquisition,constructionorproduction of aqualifyingproperty, Cost includesexpenditure that isdirectly attributable totheacquisitionof theasset. Borrowing costs and thecostof theitemcanbemeasured reliably. and only if, it is probable that future economic benefits associated with the item will flow to the Group impairment losses.Thecostof anitemof property, plantandequipmentisrecognised asanassetif, Property, plantandequipmentare measured at costlessaccumulated depreciation andaccumulated Recognition andmeasurement Office furniture, computerequipmentand Aircraft rotable spares Plant, equipmentandengineoverhaultooling Leasehold landandbuildings Property, plantandequipmenttype motor vehicles Shorter of leaseperiod 3 –15years 3 –15years Useful lives 1 –7years or 30years Residual values Nil Nil Nil Nil

2. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (i) Leases SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (k) Inventories (j) (ii) (i) in anagreement. asset orassetsandthearrangementconveysarighttouseasset,evenifthat rightisnotexplicitlyspecified arrangement at inceptiondate: whetherfulfilmentof thearrangementisdependentonuseof aspecific The determination of whetheranarrangementis,orcontainsaleaseisbasedonthesubstanceof the (i) Financial instruments and netrealisable value. for damaged,obsoleteand slow moving items to adjust the carrying valueof inventoriestothelower of cost course of businesslessestimated costsnecessarytomake thesale.Where necessary, allowanceisprovided them totheirexistinglocation andcondition.Netrealisable valueistheestimated sellingpriceintheordinary basis and includes expenditure incurred in acquiring the inventories andothercostsincurred in bringing Inventories are stated at thelowerof costandnetrealisable value.Costisdeterminedonaweightedaverage by thelessorisrecognised asareduction of rental expenseovertheleasetermonastraight-linebasis. in profit orlossonastraight-linebasisovertheleaseterm.Theaggregate benefit ofincentives provided leased assets are classified as operating leases. Operating lease payments are recognised asanexpense Leases where the lessoreffectively retains substantiallyalltherisks andbenefits ofownership ofthe Operating lease–aslessee the leaseterm. the leaseterm,ifthere isnoreasonable certainty that theGroup willobtainownershipbytheendof Capitalised leasedassetsare depreciated overtheshorterof theestimated usefullife of theassetand expenses intheperiodswhichtheyare incurred. Finance charges are charged directly againsttheprofit orloss.Contingent rents, ifany, are charged as the leaseliabilitysoastoachieveaconstantrate of interest ontheremaining balanceof theliability. the amountcapitalised.Leasepaymentsare apportionedbetweenfinancecharges and reduction of if lower, at thepresent valueof theminimumleasepayments.Anyinitialdirect costsare alsoaddedto of theleasedasset,are capitalisedat theinceptionof theleaseat thefairvalueof theleased assetor, Finance leases,whichtransfer totheGroup substantiallyalltherisks andbenefits incidentaltoownership Finance lease–aslessee issue. at fair valuethrough profit orloss,transactioncoststhat are directly attributable toitsacquisitionor component) isinitiallymeasured at fairvalueplus,inthecaseof thefinancialasset orliabilitynotcarried A financial asset or financial liability (unless itis a trade receivable without a significant financing Recognition andinitialmeasurement 129

ANNUAL REPORT 2018/19 130

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 2. (k) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (ii) Financial instruments(continued) (i) is madeonaninvestment-by-investmentbasis. recognition topresent subsequentchangesinfairvalueothercomprehensive income.Thiselection For equity investments that are not held for trading, the Group may irrevocably elect on initial comprehensive income(“FVOCI”) orfairvaluethrough profit orloss(“FVTPL”). On initialrecognition, afinancialassetisclassifiedasamortisedcost,fairvaluethrough other Financial assets Classification andsubsequentmeasurement (ii) • • • • • to management.Theinformation considered includes: portfolio levelbecausethisbestreflects thewaybusinessismanaged andinformation isprovided The Group makes an assessment of the objective of a business model inwhich an assetis held at a Business modelassessment (iii) • • of thefollowing conditions: Amortised cost:Anon-equityfinancialassetcanbemeasured at amortisedcostifitmeetsboth • • following conditions: FVOCI: Anon-equityfinancialassetcanbemeasured at FVOCI onlyifitmeetsbothof the and itsexpectations about future activity. The frequency, volume andtimingof disposalsinpriorperiods,thereasons for suchdisposals How managersof theportfolio are compensated; and The risks that affect theperformance of thebusinessmodel andhowthoserisks are managed; How theperformance of theportfolio isevaluated andreported totheGroup’s management; practice; The stated policiesandobjectivesfor theportfolio andtheoperation of thosepoliciesin doing soeliminates orsignificantly reduces an accountingmismatch that wouldotherwise arise. otherwise meetstherequirements tobemeasured at amortisedcostorat FVOCI, if asat FVTPL, In addition,oninitialrecognition, theGroup mayirrevocably designate afinancialasset,that FVTPL. held for tradingandwhoseperformance isevaluated onafairvalue basis, are measured at Financialassetsthat Allotherfinancialassetsare are classifiedasmeasured at FVTPL. FVTPL: solely paymentsof principalandinterest ontheprincipalamountoutstanding. The contractualtermsof theassetgiveriseonspecifieddates tocashflowsthat are contractual cashflows;and The asset is held within a business model whose objective is to hold assets to collect solely paymentsof principalandinterest ontheprincipalamountoutstanding. The contractualtermsof theassetgiveriseonspecifieddates tocashflowsthat are contractual cashflowsandsellingfinancialassets; The assetisheldwithinabusinessmodelwhoseobjectiveachievedbybothcollecting 2. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (k) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (iii) Derecognition (ii) Financial instruments(continued) or expire. The Group derecognises afinancialliabilitywhen itscontractualobligations are discharged orcancelled, Financial liabilities the Group, isrecognised asaseparate assetorliability. Any interest intransferred financialassetsthat qualify for derecognition, that iscreated or retained by securities designated asat FVOCI, isnotrecognised inprofit orlossonderecognition of suchsecurities. Any cumulative gain/lossrecognised inothercomprehensive income,inrespect of equity investment or lossthat hasbeenrecognised inothercomprehensive income,isrecognised inprofit orloss. received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain carrying amountallocated totheportionof theassetderecognised), andthe sumof the(i)consideration On derecognition of afinancialasset,thedifference betweenthecarryingamount of the asset(or in whichsubstantiallyallof therisks andrewards of ownershipof thefinancialassetare transferred. financial assetexpire, orwhenittransfers therightsto receive thecontractualcashflowsinatransaction The Group derecognises afinancialassetwhenthecontractualrightstocashflows from the Financial assets cost. The Group classifies its financial liabilities, other than loan commitments, as measured at amortised Group changes itsbusinessmodelfor managingfinancialassets. Financial assets are notreclassified subsequent totheir initial recognition, except intheperiod after the solely paymentsof principalandinterest. amount of contractualcashflowssuchthat thecashflows oftheinstrumentwouldnotbe reflective of other limitingtermsinthecontractualof theinstrument, whichcouldchangethetimingor Group considers contingentevents,leveragefeatures, modifications of thetimevalue of moneyand In assessingwhetherthecontractualcashflowsare solelypayments of principalandinterest, the and costs(e.g.liquidityriskadministrative costs),aswellprofit margin. the principalamountoutstandingduringaparticularperiodof timeandfor otherbasiclendingrisks ‘Interest’ isdefinedasconsideration for thetimevalue of moneyand for thecredit riskassociated with For assessmentpurposes,‘principal’isdefinedasthefairvalue of thefinancialassetoninitial recognition. Classification andsubsequentmeasurement(continued) Financial liabilities Reclassifications Assessment of whethercontractualcashflowsare solelypayments of principalandinterest 131 ANNUAL REPORT 2018/19 132 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 2. (k) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (vi) (v) Impairment (iv) Offsetting Financial instruments(continued) accounting are taken directly toprofit orloss. Any gainsorlossesarisingfrom changesinthefairvalueof derivatives that donotqualifyfor hedge are remeasured at theirfairvalues. recognised inprofit or lossasincurred. Subsequenttoinitial recognition, derivative financialinstruments value on the date on which a derivative contract is entered into; anyattributable transaction costs are associated withforeign currency. Suchderivative financialinstrumentsare initially recognised at fair The Group usesderivative financialinstrumentssuchas forward currency contractstohedgeitsrisks Derivative financialinstrumentsandhedgeaccounting future cash flows of thefinancialasset have occurred. asset is“credit-impaired” whenoneormore eventsthat have adetrimentalimpactontheestimated amortised costandnon-equityfinancialassetsthat are carried at FVOCI are credit-impaired. Afinancial At eachreporting date, theGroup assesseswhethernon-equityfinancialassetsthat are carried at Credit-impaired financialassets value of cashflowsascompared tothecarryingvalue of thenon-equityfinancialasset. loss overthetermof thefinancialinstrument,andisshortfall of theprobability weightednetpresent that are possiblewithinthe12monthsafter thereporting date. Thelifetime ECL istheexpectedcredit 12-month ECL istheportionof lifetime ECL that results from thedefaulteventsonafinancialinstrument Loss allowancesfor tradedebtorsare alwaysmeasured at anamountequaltolifetime ECL. TheGroup measuresmeasured lossallowancesat at anamountequaltolifetime FVTPL. ECL. The Group recognises lossallowancesfor ECL onnon-equityfinancialinstrumentsthat are not Expected credit loss("ECL") simultaneously. amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities sheets, whenandonlywhen,there isacurrently enforceable legalrighttosetoff the recognised Financial assets and financial liabilities are offset and the net amount is presented in the balance 2. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (k) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (vi) Financial instruments(continued) reclassified toprofit orloss. If theforecast transaction is no longerexpectedtooccur, thentheamount accumulated inequityis loss previously recognised in the fair value reserve remains there until theforecast transaction occurs. terminated or exercised, then hedge accounting is discontinued prospectively. Thecumulative gainor If thehedginginstrumentno longermeetsthecriteriafor hedgeaccounting,expires orissold, hedged item. the underlyingtransactionaffects theprofit orlossbecapitalisedintheinitial carryingamount ofa the nature of the hedged item, will either be transferred to the profit or loss in the same period that The amountaccumulated inequityisretained inothercomprehensive incomeanddependingon recognised immediately inprofit orloss. the fair value of the hedge instrument are greater than the changes in fair value of the hedged item) is Any ineffective portion of changesinthefairvalue of thederivative (i.e.theextenttowhichchangesin of the derivative isrecognised inothercomprehensive incomeandpresented inthefairvaluereserve. When aderivative isdesignated inacashflowhedge,theeffective portion ofchangesinthefairvalue Cash flowhedges into theinitialcarryingvalueof ahedgeditem. profit orlossinthesameperiodthat theunderlyingtransaction affects profit orloss,becapitalised comprehensive incomeanddependingonthenature of thehedgeditem,willeitherbetransferred to accounted for asacostof hedging.Thefairvaluechangesrelated totimevalueare recognised inother The timevalueof anoptionisexcluded from thedesignation of afinancialinstrumentandis the hedginginstrumentoffset changesinthefairvalue of thehedgeditem. quantitative hedgeeffectiveness threshold. Hedgeeffectiveness istheextenttowhichfairvalue of hedged itemandthehedginginstrument,istherefore onlyforward looking.There isnoprescribed The hedgeeffectiveness assessmentisan of theeconomic relationship betweenthe occur andifitpresents anexposure tovariations incashflowsthat couldultimately affect profit orloss. of a forecast transaction, the Group also assesses whether the forecast transaction is highly probable to the respective hedged item during the period for which the hedgeisdesignated. For a cashflowhedge instrument isexpectedtobehighlyeffective in offsetting thechanges inthefairvalue,orcashflows of At theinceptionof thehedgerelationship, theGroup makes anassessmentof whetherthehedging changes intheriskcomponentisreliably measurable. component of theitem,andchangesincashflows or thefairvalue of theitem attributable to Designation of ariskcomponentof ahedgeditem,ispermittedprovided that itisaseparableidentifiable hedge type(cashfloworfairvalue) at theinception of thehedge. hedge instrument and the hedged item, the effects of credit risk on thehedge,hedgeratio and the management objectiveandstrategy inundertakingthehedge,economicrelationship betweenthe documents therelationship betweenthehedginginstrumentandhedgeditem,includingrisk instruments inqualifyinghedgingrelationships. Oninitialdesignation of thehedge,Group formally The Group designates certainderivatives aswellnon-derivative financialinstrumentsashedging Designation of hedges Derivative financialinstrumentsandhedgeaccounting(continued) 133 ANNUAL REPORT 2018/19 134 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 2. (n) (m) Provisions (l) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) attributable totheissuanceof ordinary shares are deductedagainstshare capital,netof anytaxeffect. Proceeds from issuanceof ordinary shares are recognised asshare capitalinequity. Incremental costsdirectly Share capitalandshareissuanceexpenses past experienceof thelevelof repairs. Provision for warrantyclaimsismadefor airframemaintenanceandcomponent overhaulservicesbasedon provision duetothepassageof timeisrecognised asafinancecost. the time value of money and the risks specific to the liability. Where discounting is used, the increase in the discounting theexpectedfuture cashflowsat apre-tax rate that reflects current market assessmentsof the provision isreversed. Iftheeffect of thetimevalueof moneyismaterial, provisions are determinedby If it is no longer probable that an outflow of economic resources will be required to settle the obligation, Provisions are reviewed at theendof eachreporting periodandadjustedtoreflect thecurrent bestestimate. certain. Theexpenserelating toanyprovision ispresented inprofit orloss netof anyreimbursement. reimbursed, thereimbursement isrecognised asaseparate assetbutonlywhenthereimbursement isvirtually amount of theobligation canbeestimated reliably. Where theGroup expectssomeorallof aprovision tobe event, itisprobable that anoutflowof economicresources willberequired tosettletheobligation andthe Provisions are recognised whentheGroup hasapresent obligation (legalorconstructive)asaresult of apast amount, inwhichcasethereversal istreated asarevaluation increase. recognised previously. Suchreversal isrecognised inprofit orlossunlesstheassetismeasured at revalued the carryingamountthat wouldhave beendetermined,netof depreciation, hadnoimpairmentlossbeen case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed used todeterminetheasset’srecoverable amountsincethelastimpairmentlosswasrecognised. Ifthat isthe amount. Apreviously recognised impairmentlossisreversed onlyifthere hasbeenachangeintheestimates exist ormayhave decreased. Ifsuchindication exists,theGroup estimates theasset’sorCGU’s recoverable reporting date as to whether there is any indication that previously recognised impairment lossesmay no longer For non-financialassetsexcluding goodwillandthosewithindefinite lives,anassessmentismadeat each amount, theassetisconsidered impaired andiswrittendowntoitsrecoverable amount. risks specifictotheasset.Where thecarrying amount of anassetoritsrelated CGU exceeds itsrecoverable using apre-tax discountrate that reflects current market assessmentsof thetimevalueof moneyandthe the estimated future cashflowsexpectedtobegenerated bytheassetare discountedtotheirpresent value inflows that are largely independent of thosefrom otherassetsorgroups of assets.Inassessingvalue-in-use, to sellanditsvalue-in-useisdeterminedfor anindividualasset,unlesstheassetdoesnotgenerate cash An asset’srecoverable amountisthehigherof anasset’sorcashgenerating unit's("CGU") fairvaluelesscosts estimate of theasset’srecoverable amount. such indication exists, or when annual impairment assessment for an asset is required, the Group makes an The Group assessesat eachreporting date whetherthere isanindication that anassetmaybeimpaired. Ifany Impairment ofnon-financialassets 2. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (p) Taxation (o) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (ii) (i) and nodividendsare allocated tothemrespectively. costs, isrecognised inthecapitalreserve. Voting rightsrelated totreasury shares are nullifiedfor theGroup account andtherealised gainorlossonsalereissue, netof anydirectly attributable incremental transaction reissued pursuanttoequitycompensation plans,thecostof treasury shares isreversed from thetreasury share treasury shares andpresented asadeductionfrom totalequity. Whentreasury shares are subsequentlysoldor attributable costs, net of any tax effect, is recognised directly in equity. Reacquired shares are classified as When shares are reacquired bytheCompany, theamountof consideration paidwhichincludesdirectly Treasury shares tax assettobeutilised. is nolongerprobable that sufficienttaxable profit willbe available toallowallorpart ofthe deferred Deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it can beutilised. deductible temporarydifferences, andthecarry forward of unusedtaxcredits andunusedtaxlosses unused taxlosses,totheextentthat itisprobable that taxableprofit willbe available againstwhichthe Deferred taxassetsare recognised for alldeductibletemporarydifferences, unusedtaxcredits and • • Deferred taxassets and liabilitiesare notrecognised for : reporting purposes. reporting periodbetweenthetaxbasesof assetsandliabilitiestheircarryingamountsfor financial Deferred taxisprovided, usingthebalancesheetmethod,onalltemporarydifferences at theend of the Deferred tax or directly inequity. business combination, oritemsrecognised outsideprofit orloss,eitherinothercomprehensive income Current income taxes are recognised inprofit orlossexcept totheextentthat thetax relates toa provisions where appropriate. respect to situations in which applicable tax regulations are subject to interpretation and establishes enacted at balancesheetdate. Managementperiodicallyevaluates positionstaken inthetaxreturns with be recovered from orpaidto,respectively, thetaxauthoritiesusingrates enactedorsubstantively Tax recoverable andtaxliabilitiesfor current andpriorperiodsare measured at theamountexpectedto Current incometax that the temporarydifferences willnotreverse intheforeseeable future. where the timing of the reversal of the temporary differences can be controlled and it is probable Temporary differences associated withinvestmentsinsubsidiaryandjointventure companies, the accountingprofit nortaxableprofit orloss;and transaction that is not a business combination and, at the time of the transaction, affects neither Temporary differences ontheinitialrecognition of goodwillorof anassetorliabilityina 135 ANNUAL REPORT 2018/19 136 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 2. (p) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (q) Revenue (iii) (ii) Taxation (continued) recognition policies. obligations incontractswithcustomers, includingsignificantpaymenttermsandthe related revenue The following policiesprovide information aboutthenature andtiming of thesatisfaction of performance towards completesatisfaction of that PO. PO issatisfied overtime,revenue isrecognised basedonthepercentage of completionreflecting theprogress Revenue mayberecognised at apointintimeoroverfollowing thetimingof satisfaction of thePO. Ifa cumulative revenue willnotoccurwhen the uncertainty associated withthevariableconsideration isresolved. is includedinthetransactionpricetoextentthat itishighlyprobable that asignificantreversal of the a separate identifiable benefit from the customer. When consideration isvariable,theestimated amount Consideration payabletoacustomerisdeductedfrom thetransactionpriceifGroup doesnotreceive entitled inexchange for transferring thepromised services.Thetransactionpricemaybefixed orvariable. The transactionpriceistheamountof consideration inthecontract towhichtheGroup expectstobe revenue recognised istheamountof thetransactionpriceallocated tothesatisfied PO. performance obligation ("PO") bytransferring control of apromised servicetothecustomer. Theamountof Revenue from servicesrendered intheordinary courseof businessisrecognised whentheGroup satisfies a receivables orpayablesinthebalancesheets. The netamountof indirect taxrecoverable from, orpayableto,thetaxauthorityisincludedaspartof • • Revenues, expensesandassetsare recognised netof theamountof indirect taxexcept: Indirect taxes same taxableentityandthetaxauthority. current income taxassetsagainstcurrent incometaxliabilitiesandthedeferred taxes relate tothe Deferred taxassetsanddeferred tax liabilitiesare offset, ifalegallyenforceable rightexiststoset off or itemsrecognised directly in equityorothercomprehensive income. Deferred taxisrecognised inprofit orlossexcept totheextentthat it relates toabusinesscombination, enacted orsubstantivelyat theendof eachreporting period. when theassetisrealised ortheliabilityissettled,basedontaxrates andtaxlawsthat have been Deferred taxassetsandliabilitiesare measured at thetaxrates that are expectedtoapplyintheyear Deferred tax(continued) Receivables andpayablesthat are stated withtheamountof indirect taxincluded. asset oraspartof theexpenseitemasapplicable;and tax authority, inwhichcasetheindirect tax isrecognised as partof thecostof acquisitionof the Where the indirect taxincurred onapurchase of assetsorservicesisnotrecoverable from the 2. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (s) (r) (q) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) costs that anentityincurs inconnectionwiththeborrowing of funds. All otherborrowing costsare expensedinthe periodtheyoccur. Borrowing costsconsistof interest andother intended useorsale. costs are incurred. Borrowing costsare capitaliseduntiltheassetsare substantially completedfor their activities toprepare theassetfor itsintendeduseorsale are inprogress andthe expenditures andborrowing acquisition, constructionorproduction of that asset.Capitalisation of borrowing costscommences whenthe Borrowing costsare capitalisedaspartof thecostof aqualifyingassetiftheyare directly attributable tothe Borrowing costs Interest incomefrom fixed depositsis recognised using theeffective interest method. Dividend incomefrom investmentsisrecognised whentheGroup’s righttoreceive thepaymentisestablished. Income frominvestments estimates of expected claimsat eachreporting date andupdate theamountsof theprovisions accordingly. failure toadhere tospecificconditionsundereachcustomercontract.TheGroup andCompanyreview their experience. Additionally, theGroup andCompanymake specificprovisions at eachreporting periodfor experience withcustomers.Ageneralprovision for expectedclaimsbycustomersismadebasedonhistorical The Group and Company exercised judgement in applying the estimated variable consideration based on rendering of servicesandare payablewithin30–90days. using input method as to reflect the progress of repair services completed to date. Invoices are issuedupon Revenue from engine and component includes engine and component overhaul and is recognised over time Engine andcomponent The invoicesare payablewithin30–90days. advance usingestimated flyinghourorbilledinarrears usingactualflyinghoursoruponrendering of services. prices andrevenue isrecognised overtimewhenservicesare beingperformed. Thecharges are billedin For fleetmanagement programme, billings tocustomers are basedonflighthoursand/orfixed contractual services. Theinvoicesare payablewithin30–90days. over theduration of theservicesrendered. Invoicesare issuedbi-monthlyormonthlyuponrendering of Revenue from linemaintenanceincludesaircraft certification andtechnicalground handlingandisrecognised For servicesthat are charged on“as incurred” basis,theyare payablewithin30–90days. either onafixed priceor“as incurred basis”.Thefixed pricecharges are generallyduepriortoaircraft redelivery. to-date againsttheestimated man-hoursneededtocompletetheprojects. Billingfor airframeservicesare completed todate. Theprogress of theprojects isdeterminedbasedonthenumberof man-hoursincurred Revenue from airframeisrecognised overtimeusinginputmethodtoreflect theprogress of theprojects management programme. Revenue from airframeandlinemaintenanceincludesmaintenance,fleet Airframe andlinemaintenance Revenue (continued) 137 ANNUAL REPORT 2018/19 138 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 2. (t) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) expenses inthe periodinwhichtherelated services are performed. make contributionstotheirrespective country’s pensionschemes.Suchcontributionsare recognised as in Singapore, a defined contribution scheme. Certain of the Group’s subsidiary companies outside Singapore As required bylaw, companiesinSingapore make contributionstotheCentralProvident Fund scheme(“CPF”) Defined contributionplans retained earningswithinequityandare notreclassified toprofit or lossinsubsequentperiods. defined benefitplansare recognised asanexpenseinprofit orloss.Remeasurements are recognised in immediately inothercomprehensive incomeintheperiodwhichtheyarise.Allexpensesrelated tothe Remeasurements comprisingactuarialgainsandlosses,thereturn on planassetsare recognised as expenseinprofit orloss. over the expected average remaining working lives of the employees participating in the plans are recognised unfunded liabilities under theplans, whichisdetermined separately for eachplan.Contributionstotheplans the regular employees.Thecostof providing benefitsincludestheGroup’s contributionfor theyearplusany The Group contributes to several defined benefit pension and post employment benefit plans for some of Defined benefitplans treasury shares. capital whennewshares are issued,ortotreasury shares iftheawards are satisfied bythereissuance of vested awards. Whentheawards are released, theshare-based compensation reserve istransferred toshare The share-based compensation reserve istransferred togeneralreserve uponcancellation orexpiryof the provided that allotherperformance and/orserviceconditionsare satisfied. upon amarket condition,whichare treated asvestedirrespective of whetherthemarket conditionissatisfied, No expenseisrecognised for awards that donotultimately vest,except for awards where vestingisconditional ending onthedate onwhichtherelevant employeesbecomefullyentitledtotheaward (“thevestingdate”). in theshare-based compensation reserve, overthevestingperiodinwhichservice conditionsare fulfilled, This costisrecognised inprofit orlossasshare-based compensation expense,withacorresponding increase performance conditions. conditions, otherthanconditionslinked tothepriceof theshares of theCompanyandnon-vesting on whichtheshare awards are granted.Invaluingtheshare awards, noaccountistaken of anyperformance The costof equity-settledtransactionswithemployeesismeasured byreference tothefairvalueat thedate Details of theplansare disclosedinNote11tothefinancialstatements. service conditionsare accomplished. paid ordinary shares tokey seniormanagementandexecutives, after pre-determined performance or The CompanyhasimplementedtheRestrictedShare PlanandPerformance Share Planfor theaward of fully rendered. Employees of theGroup receive remuneration intheform of share awards asconsideration for services Equity compensation plans Employee benefits 2. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (v) (u) (t) SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) (a) A related partyisdefinedasfollows: Related parties the reportable segmentsandthemeasurement basisof segmentinformation. Additional disclosures oneachof thesesegmentsare shown in Note34includingthefactorsusedtoidentify significant operating segmentsof theGroup are airframeandlinemaintenance,enginecomponent. The Companyanditssubsidiariesoperate inSingapore, Philippines,JapanandUnitedStates of America.The segments andtoassessthesegments’performance. management of theCompanythat regularly reviews thesegments’results inorder toallocate resources tothe the performance of therespective segmentsundertheircharge. Thesegmentmanagersreport directly tothe services provided whichare independentlymanagedbytherespective segmentmanagersresponsible for For managementpurposes,theGroup isorganised intooperating segmentsbasedonthenature of the Segmental reporting a result of pastserviceprovided bytheemployee,andobligation canbeestimated reliably. bonus orprofit-sharing plansiftheGroup hasapresent legalorconstructiveobligation topaythisamountas related serviceisprovided. Aliabilityisrecognised for theamountexpectedtobepaidundershort-termcash Short-term employee benefit obligations are measured on anundiscounted basis and are expensed as the Short-term employeebenefits Employee benefits(continued) (b) (iii) (ii) (i) A personoraclosememberof that person’sfamilyisrelated tothe Group andCompanyifthat person: (iv) (iii) (ii) (i) An entityisrelated totheGroup andtheCompanyifanyof thefollowing conditionsapplies: Company. is amemberof thekey management personnel of theGroup orCompanyof aparent of the has significantinfluence overtheCompany;or has control or jointcontrol overtheCompany; One entityisajointventure of athird entityand theotherentityisanassociate of thethird entity. Both entitiesare jointventures of thesamethird party. a memberof agroup of whichtheotherentityisamember). One entityisanassociate orjointventure of theotherentity(oranassociate orjointventure of subsidiary andfellow subsidiaryisrelated totheothers). The entityandtheCompanyare membersof thesamegroup (whichmeansthat eachparent, 139

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SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 3. 2. (b) (a) liabilities withinthenextfinancialyearare discussedbelow. reporting period,that have asignificantrisk of causingamaterial adjustmenttothecarryingamounts of assetsand The key assumptionsconcerningthefuture andotherkey sources of estimation uncertaintyat theendof the estimates are recognised intheperiodwhichestimates are revised andinanyfuture periodsaffected. expectations of future eventsthat are believedtobereasonable underthecircumstances. Revisionstoaccounting disclosures made. Theyare assessedonanongoingbasisandare basedonexperienceandrelevant factors,including the application of theGroup’s accountingpolicies,reported amountsof assets,liabilities,incomeandexpenses, Estimates andassumptionsconcerningthefuture are madeinthepreparation of thefinancialstatements. They affect (v) SIGNIFICANT ACCOUNTING ESTIMATES ANDCRITICAL JUDGEMENTS SUMMARY OFSIGNIFICANTACCOUNTING POLICIES(continued) recognises liabilitiesfor expectedtaxissuesbasedon estimates of whether additionaltaxes willbedue. for whichtheultimate taxdetermination isuncertainduringtheordinary course of business.TheGroup determining theGroup-wide provision for incometaxes. There are certaintransactionsandcomputations The Group hasexposure toincometaxes inseveraljurisdictions.Significantjudgementisinvolved Income taxes lives andtheresidual valuesof theseassets.Therefore future depreciation charges could berevised. Changes in the expected level of usage and technological developments could impact the economic useful 1 April2017: $143,474,000) and$93,030,000 (2018:$108,384,000; 1April2017:$124,522,000) respectively. and aircraft rotable spares as at 31 March 2019 was approximately $110,501,000 (2018: $125,538,000; be within3to15years.Thecarryingamountof theGroup’s andCompany’splant,equipmenttooling straight-line basisovertheexpectedusefullives.Managementestimates theusefullivesof theseassetsto The costof plant,equipmentandengineoverhaultooling, aircraft rotable spares are depreciated ona Depreciation ofplant,equipmentandengineoverhaultooling, andaircraft rotablespares (b) Related parties(continued) (viii) (vii) (vi) (v) An entity is related to the Group and the Company if any of the following conditions applies (continued): services tothereporting entityortotheparent of thereporting entity. The entity, or any member of a group of which it is a part, provides key management personnel management personnelof theentity(orof aparent of theentity). A personidentifiedin(a)(i)hassignificantinfluence overtheentityorisamemberof thekey The entityiscontrolled orjointly-controlled byapersonidentifiedin(a). sponsoring employersare alsorelated totheCompany. the Companyoranentityrelated totheCompany. IftheCompanyisitselfsuchaplan, The entityisapost-employmentbenefitplanfor thebenefitof theemployeesof either 3. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (d) (c) (b) SIGNIFICANT ACCOUNTING ESTIMATES ANDCRITICAL JUDGEMENTS(continued) the expectedfuture cashinflows. recoverable amountismostsensitivetothediscountrate usedfor thediscountedcashflowmodelaswell discounted cashflowmodel.Theflowsare derivedfrom thebudget approved bythemanagement.The When value-in-usecalculations are undertaken, managementestimates therecoverable amountbased on a condition of therotables. valuation, whichtookintoaccounttheexpectedresale pricesinthesecondarymarkets andtheservice In prior year, for aircraft rotable spares, the current fair market value is determined basedon an independent amount isdefinedasthehigherof thenon-financialassets’fairvaluelesscoststosellanditsvalue-in-use. impaired andthecarryingamountsof thenon-financialassetsexceed therecoverable amounts. Recoverable Impairment isrecognised wheneventsandcircumstances indicate that thenon-financialassetsmaybe • • • Management performs impairmenttestingfor thefollowing items: Impairment ofnon-financialassets 1 April2017:$105,660,000) respectively. $183,919,000 (2018:$195,667,000; 1April2017:$109,204,000) and$165,479,000 (2018:$180,914,000; carrying amountof theGroup’s andCompany’scontractassetsasat 31March 2019wasapproximately repair and overhaulinestimating theprogress of theprojects completedandbudgetedcost.The cost. Managementmadereference tolabourhoursincurred andthephysicalstageof maintenance, profit earned,basedontheestimated progress of theprojects completedandtotalestimated budgeted Contract assetspertainstoservicesrendered whichhave notbeenbilledand isstated at costplusestimated Contract assets $21,230,000 (2018:$22,283,000; 1April2017:$23,603,000) respectively. 31 March 2019were approximately $17,487,000 (2018:$18,842,000; 1April2017:$13,780,000) and The carryingamountsof theCompany’scurrent taxpayableanddeferred taxliabilitiesasat (2018: $24,202,000; 1April2017:$26,416,000) respectively. were approximately $18,567,000 (2018:$20,189,000; 1April2017:$15,714,000) and$23,070,000 The carryingamountsof theGroup’s current taxpayableanddeferred taxliabilitiesasat 31March 2019 is made. differences willimpacttheincometaxanddeferred taxprovisions intheperiodwhichsuchdetermination Where the final tax outcome of these matters is different from the amounts that were initially recognised, such Income taxes (continued) Investments insubsidiary, associated andjointventure companies. Property, plantandequipment; Intangible assets,relating todeferred enginedevelopmentcosts(refer toNote16);

141 ANNUAL REPORT 2018/19 142 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 4. (b) (a) REVENUE (INTHOUSANDSOF$) Engine andcomponent – – Airframe andlinemaintenance Fleet managementprogramme Airframe overhaulandlinemaintenance • • its remaining performance obligations if: The Group appliesthepractical expedient inparagraph 121 of IFRS15and doesnotdiscloseinformation about the amountpresented above. Variable consideration that isconstrainedandtherefore notincludedinthetransactionpriceisexcluded in $78,000,000 for financialperiods2019/20to2021/22. (or partiallysatisfied) at thereporting date for fleetmanagementprogramme amountstoapproximately The revenue expected to be recognised in the future related to performance obligations that are unsatisfied Transaction priceallocated totheremainingperformanceobligations markets, majorservicelineandtimingof revenue recognition. In thefollowing table,revenue from contractswithcustomersisdisaggregated byprimarygeographical Disaggregation ofrevenuefromcontractswithcustomers East Asia geographical Primary Services rendered line Major service West AsiaandAfrica Americas South West Pacific Europe Transferred overtime Timing ofrevenue markets recognition to date, thenitrecognises revenue inthat amount. the Group hasarighttoinvoicecustomer inanamountthat corresponds directly withitsperformance less; or the performance obligation is partof a contract that has an originalexpected duration of oneyearor Airframe overhauland 2018/19 611,115 891,218 891,218 891,218 208,775 891,218 891,218 27,943 10,796 32,589 line maintenance 2017/18 674,961 942,504 942,504 942,504 196,285 942,504 942,504 24,093 15,436 31,729 2018/19 100,212 100,212 100,212 100,212 100,212 Fleet management 87,408 6,191 6,454 programme 152 7 2017/18 113,036 124,664 124,664 124,664 124,664 124,664 6,426 5,187 11 4 2018/19 11,210 15,059 29,466 29,466 29,466 29,466 29,466 1,369 1,388 component 440 Engine and 2017/18 1,020,896 12,197 12,615 27,713 27,713 27,713 27,713 27,713 2018/19 991,430 100,212 891,218 1,815 29,466 716 370 1,020,896 1,020,896 1,020,896 1,020,896 1,020,896 The Group 2018/19 713,582 216,617 22,013 29,464 39,220 Total 1,067,168 1,094,881 2017/18 1,094,881 1,094,881 1,094,881 1,094,881 1,094,881 124,664 942,504 2017/18 800,612 203,287 27,713 27,637 24,820 38,525 7. 6. 5. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS * Operating profit for thefinancialyearisarrived at after charging: plan are notpresented. Disclosures relating toshare-based compensation expenseare inNote11. material tothetotalstaff costs of theGroup for 2018/19and2017/18,additionaldisclosures of thedefinedbenefit Defined benefitexpenses forthe Group were approximately $389,000(2017/18:$593,000).Astheseamounts are not The Group contributestounfunded, non-contributory, definedbenefitplans forsome ofthe regularemployees. INTEREST INCOME (INTHOUSANDSOF$) OPERATING PROFIT (INTHOUSANDSOF $) STAFF COSTS (INTHOUSANDSOF$) Share-based compensation expense CPF andotherdefinedcontributions Salary, bonusesandothercosts Deposits placedwithbanks Deposits placedwithimmediate holdingcompany Operating leaseexpenses Net exchange loss* – Non-audit fees – – Audit fees Professional fee paidtoafirminwhichdirector isamember Provision for obsolete stocks, net Auditors of theCompany Other auditors Auditors of theCompany (2017/18: netfairvaluegainof $711,000), whichwasrealised inthecurrent financialyear. Amount includesanetfairvaluelossonforward currency contractsusedfor hedging purposesof approximately $1,455,000 2018/19 2018/19 2018/19 488,732 436,857 47,572 9,550 1,091 3,976 4,303 7,583 8,080 264 359 497 32 31 The Group The Group The Group 2017/18 2017/18 2017/18 494,346 445,633 10,136 46,466 6,518 2,794 2,247 4,570 4,860 242 270 290 51 54

143

ANNUAL REPORT 2018/19 144

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 8. The majorcomponentsof incometaxexpensefor theyearsended31March 2019and2018 are asfollows: for thefinancialyearsended31March isas follows: A reconciliation between taxation expense and the product of accounting profit multipliedbytheapplicable taxrate TAXATION EXPENSE(INTHOUSANDSOF$) Deferred taxrelated toothercomprehensive income: Net changeinthefairvalueof derivative financialinstrumentsdesignated as Profit before taxation Over-provision inrespect of prioryears Provision for thefinancialyear Current tax Taxation Others Tax incentives Provision of withholding taxexpense Over-provision inrelation toprioryears Effects of difference intax rates ofothercountries Expenses notdeductiblefor taxpurposes Deferred taxassetsnotrecognised Income notsubjecttotax Adjustments Taxation at statutory taxrate of 17.0% Less: share of results of associated andjointventure companies Income taxexpenserecognised inprofit orloss Under-provision inrespect of prioryears Movement intemporarydifferences Deferred tax cash flowhedges (113,868) 2018/19 2018/19 2018/19 179,063 (19,652) (19,878) (18,108) (11,083) (18,108) 65,195 (1,496) (5,708) (2,871) 1,544 2,546 1,587 (437) 226 411 183 347 348 (43) The Group The Group The Group (109,818) 2017/18 2017/18 2017/18 209,589 (24,150) (24,828) (21,567) (16,961) (21,567) 99,771 (5,970) (3,899) (1,545) 3,616 2,583 3,358 3,198 (615) (587) (138) 678 358 63 10. 9. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS paid for thefinancialyearended 31 March 2019. (one-tier) dividend of 9.0 cents per share), amounting to approximately $89,529,000 (2017/18: $100,720,000) to be The directors propose afinaltaxexempt (one-tier)dividend of 8.0centspershare (2017/18:finaltax exempt diluted earningspershare becausetheyare anti-dilutivefor theprevious yearpresented. share options grantedtoemployeesunderemployeeshare optionplanshave not beenincludedinthecalculation of There were noemployeeshare optionsoutstandingat theendof thefinancialyear. Intheprioryear, 4,139,200 of dilutive potentialordinary shares: performance shares andrestricted shares. adjusted totake intoaccounttheeffects of dilutivepotentialordinary shares. TheCompanyhastwocategories of For purposesof calculating dilutedearningspershare, theweightedaverage numberof ordinary shares inissueis average numberof ordinary shares inissueduringthefinancialyear. Basic earnings per share is calculated by dividing the profit attributable to owners of theparent by the weighted * DIVIDENDS PAID ANDPROPOSED (INTHOUSANDSOF$) EARNINGS PERSHARE Interim dividendof 3.0centspershare inrespect of 2018/19 Final dividendof 9.0centspershare inrespect of 2017/18 Dividends paid: Weighted average numberof ordinary shares inissueused Adjustment for dilutivepotentialordinary shares Weighted average numberof ordinary shares inissueused Profit attributable toowners of theparent (inthousands of $) Diluted earningspershare (cents) Basic earningspershare (cents) (2017/18: 4.0centspershare inrespect of 2017/18) in respect of 2016/17) dividend of 9.0centspershare andaspecialdividendof 5.0centspershare (2017/18: finaldividend of 14.0centspershare, comprising of anordinary for computing dilutedearningspershare for computing basicearningspershare* transactions duringtheyear. The weightedaverage numberof ordinary shares takes intoaccounttheweightedaverage effect of changes intreasury shares 1,118,879,640 1,121,387,786 2,508,146 The GroupandCompany 2018/19 2018/19 134,293 100,720 160,870 33,573 14.35 14.38 The Group 1,118,890,446 1,120,956,710 2,066,264 2017/18 2017/18 201,491 156,756 186,805 44,735 16.66 16.70

145

ANNUAL REPORT 2018/19 146

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 11. (a) shares and 804,399treasury shares respectively. granted undertherestricted andperformance share planswere allsettledbywayof issuanceof 275,996treasury In 2017/18,theCompany’soptionsexercised undertheEmployeeShare OptionPlan andrelease of share awards plans were settled bywayof issuanceof 922,983treasury shares. During the financial year, the Company’s release of share awards granted under the restricted and performance share shares carryonevotepershare withoutrestriction. Theordinary shares have noparvalue. The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary SHARE CAPITAL (INTHOUSANDSOF$) Balance at 1Apriland31March Issued andfullypaid There are nocashsettlementalternatives. (iv) (iii) (ii) (i) Senior Executive Share OptionScheme,optionswillvest: Under theEmployeeShare OptionScheme,optionswillvesttwoyearsafter thedate of grant.Underthe for thefivemarket daysimmediately preceding thedate of grant. price of the option will be the average of the closing prices of the Company’s ordinary shares on the SGX-ST Under thePlan,optionsare granted for atermnolongerthan10yearsfrom thedate of grant.Theexercise employees respectively, wasapproved byshareholders on9February2000. Executive Share OptionSchemeandtheEmployeeShare OptionSchemefor seniorexecutives andallother The SIAEngineeringCompanyLimitedEmployeeShare OptionPlan(“ESOP”), whichcomprisestheSenior Share OptionPlan four yearsafter the date of grant for theremaining 25%of theordinary shares subjecttotheoptions. and three yearsafter thedate of grantfor anadditional25%of theordinary shares subjecttotheoptions; two yearsafter thedate of grantfor anadditional25%of theordinary shares subjecttotheoptions; one yearafter thedate of grantfor 25%of theordinary shares subjecttotheoptions; 1,124,116,360 2019 31 March 1,124,116,360 The GroupandCompany 2018 420,044 2019 31 March 420,044 2018 11. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (b) (a) SHARE CAPITAL (INTHOUSANDSOF$)(continued) respective plansasat thedate of suchtermination. of theprevious RSPandPSPwaswithoutprejudice totherightsof holdersof awards outstandingunderthe the previous RSP and PSP, whichwere terminated following the adoptionof thenewplans.Thetermination on 21July2014, shareholders approved theadoptionof theSIAEC RSP2014 andSIAEC PSP2014 toreplace on 25 July 2005 and expired on 24 July 2015. At the Extraordinary General Meeting of theCompany held The Restricted Share Plan (“RSP”) and Performance Share Plan (“PSP”) were originally adopted by shareholders Share-based incentiveplans life andexercise priceof outstandingoptionswas0.25 yearsand$3.54 respectively. All outstandingoptionslapsedduringtheyear. Intheprioryear, theweightedaverage remaining contractual ESOP. Thelastgrantof theshare optionplansexpired on30June2018. Following the expiry of theshare option plans inMarch 2009, theCompanyceasedtograntoptionsunder There are nooutstandingshare options asat endof thefinancialyear(2017/18:4,139,200). * ESOP duringthefinancialyear: The following table illustrates the number and weighted average exercise prices of, and movements in, the Share OptionPlan(continued) Exercisable at 31March Outstanding at 31March Cancelled Exercised Outstanding at 1April Weighted average exercise priceof $3.54hasbeenadjustedfor specialdividendof $0.05declared on20 July2017. (4,139,200) of options 4,139,200 Number – – – 2018/19 exercise price Weighted average – – – – – 12,805,040 of options (8,389,844) 4,139,200 4,139,200 (275,996) Number 2017/18 exercise price Weighted average $3.54* $3.54* $4.51 $3.59 $4.20 147

ANNUAL REPORT 2018/19 148 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 11. (b) SHARE CAPITAL (INTHOUSANDSOF$)(continued) # The detailsof thetwoplansare describedbelow: Share-based incentiveplans(continued) Vesting Condition Performance Conditions Plan Description Payout EBITDA denotesEarningsbefore Interest, Taxes, Depreciation andAmortisation • • and Company’sbusinessobjectives. value andare alignedtotheGroup operational driversof shareholder are selected astheyare thekey The aboveperformance conditions some degree of stretch. Group and Company objectives with year performance periodbasedon Targets are setat thestartof aone- level andindividualperformance. the Company, dependentonposition Award of fully-paid ordinary shares of Restricted SharePlan targets overtheperformance period. achievement of pre-set performance 0% –150%dependingonthe of service requirements. subsequent twoyearswithfulfilment Balance willvestequallyoverthe vest. performance period,1/3of award will conditions overaone-year Based onmeetingstated performance Awards granted inandafter 2016/17 of servicerequirements. subsequent twoyearswithfulfilment Balance willvestequallyoverthe will vest. performance period,50%of award conditions overatwo-year Based onmeetingstated performance Awards grantedpriorto2016/17 per $EmploymentCost Group and CompanyValue Added Margin Group and CompanyEBITDA #

value-creation for shareholders. are selected askey measurement of The aboveperformance measures • • objectives for seniormanagement. on stretched long-termcorporate year performance periodbased Targets are setat thestartof a three- level andindividual performance. the Company, dependentonposition Award of fully-paid ordinary shares of Performance SharePlan targets overtheperformance period. achievement of pre-set performance 0% – 200% depending on the the over three-year performance period. conditions performance Vesting based on meeting stated Return onEquity(ROE) (COE) outperform Costof Equity (TSR) Absolute Total Shareholder Return 11. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (b) SHARE CAPITAL (INTHOUSANDSOF$)(continued) The following tableliststhekey inputstothemodelusedfor theJuly2018and2017award: outcomes usingstatistical distributionsof key randomvariablesincludingshare priceandvolatility of returns. is measured basedonaprospective MonteCarlosimulation model,whichinvolvesprojection of future shares granted each year under the SIAEC RSP and PSP. The estimate of thefair value of the services received The fairvalueof servicesreceived inreturn for shares awarded ismeasured byreference tothefairvalueof Fair valueof RSPandPSPawards * PSP * RSP The movementof theshares awarded duringthefinancialyearisasfollows: Share-based incentiveplans(continued) Expected dividendyield(%) 06.07.2018 07.07.2017 07.07.2016 06.07.2015 07.07.2014 Date ofgrant 06.07.2018 07.07.2017 07.07.2016 06.07.2015 Date ofgrant Share priceat date of grant($) Expected term(years) Risk-free interest rate (%) Expected volatility (%) in servicefor retirees. Adjustments at the end of performance period upon meeting stated performance targets and adjustments for number of days in servicefor retirees. Adjustments at the end of performance period upon meeting stated performance targets and adjustments for number of days date ofgrant date ofgrant Balance at Balance at 1.4.2018/ 2,579,357 1.4.2018/ 560,487 175,300 193,287 129,044 898,280 851,662 420,890 361,726 62,856 46,799 Adjustments* Adjustments* 1.00 –3.00 1.74 –2.01 423,737 423,737 (43,371) (43,371) Management’s forecast inlinewithdividendpolicy 16.43 July 2018Award 3.11 RSP – – – – – – – Number ofPerformanceshares Number ofRestricted shares Cancelled Cancelled (88,720) (26,460) (49,281) (7,750) (5,229) 16.43 (361) (361) 3.11 3.00 2.01 PSP – – – – 1.00 –3.00 1.18 –1.44 Released Released (220,321) (193,551) (903,859) (443,188) (19,124) (19,124) (46,799) 17.77 July 2017Award 4.06 RSP – – – – Balance at Balance at 31.3.2019 2,010,515 31.3.2019 497,631 175,300 193,287 129,044 192,819 162,946 782,930 871,820 17.77 4.06 3.00 1.44 PSP – – 149

ANNUAL REPORT 2018/19 150

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 11. (b) SHARE CAPITAL (INTHOUSANDSOF$)(continued) follows: The amounts recognised in profit or loss for share-based compensation transactions with employees are as that willultimately vest. respect of theRSPandPSPbasedonfairvaluesdeterminedgrantdate andestimation of share grants For thecurrent financialyear, theGroup hasprovided approximately $4,303,000 (2017/18:$2,247,000) in 995,262 (2018:and 770,374) fully-paid ordinary shares for RSPandPSPrespectively. the actualrelease of theawards couldrangefrom zero toamaximumof 2,446,425 (2018:2,106,908) and (2018: 1,681,077) and497,631 (2018: 385,187) for RSPandPSPrespectively. Basedontheachievement factor, The numberof contingentshares grantedbutnotreleased asat 31March 2019, were 2,010,515 Company, thusfurtheraligningtheirinterests withshareholders. under ashare ownershipguidelinewhichrequires themtomaintainabeneficialownershipstake inthe Under theRSPandPSP, eligiblekey executives are required toholdaportionof theshares released tothem compensation reserve. of share grantsexpectedtovestandcorresponding adjustmentsare madetoprofit orlossandshare-based For performance share grants with non-market conditions, the Company revises its estimates of the number which theperformance periodrelates, irrespective of whetherthisperformance conditionissatisfied. benefits will accrue to theemployee under the planover the remaining serviceperiodfrom date of grantto compensation costshallbecharged toprofit orlossonabasisthat fairlyreflects themannerinwhich taken intoaccount.Therefore, for performance share grantswithmarket-based performance conditions,the When estimating thefairvalueof thecompensation cost,market-based performance conditions shallbe for each share grantedunderthePSPis$2.60 (2017/18:$4.16). under theRSPrangesfrom $2.77 to$2.97 (2017/18:$3.74 to$3.92) andtheestimated fairvalueat date of grant Based ontheMonteCarlosimulation model,theestimated fairvalueat date of grantfor eachshare granted accurately ascertained. & HRCommitteefor thepurposeof accrualfor theRSPandPSPuntilachievementof thetargets canbe For non-market conditions, achievement factors have been estimated based on inputs from the Compensation Share-based incentiveplans(continued) – – Share-based compensation expense Performance share plan Restricted share plan The GroupandCompany 2018/19 4,303 3,703 600 2017/18 2,247 1,914 333 13. 12. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS was 5,005,974(2018:5,928,957). shares (2017/18: 804,399)were reissued pursuanttotheRSP/PSP. Thenumberof treasury shares asat 31March 2019 2017/18, theCompanyissued275,996treasury shares at aweightedaverage exercise priceof $3.59each.922,983 The Companydidnotreissue anytreasury shares pursuanttoitsemployeeshare optionplansduringtheyear. In attributable toownersof theparent. total amountpaidtopurchase theshares was$10,159,000andthispresented asacomponentwithinequity 2,819,700 of itsordinary shares bywayof on-market purchases at share pricesrangingfrom $3.08to$4.19.The During thefinancialyear, theCompanydidnotpurchase anytreasury shares. In2017/18,theCompanypurchased Treasury shares relate toordinary shares of theCompanythat are heldbytheCompany. (c) (b) (a) OTHER RESERVES (INTHOUSANDSOF$) TREASURY SHARES (INTHOUSANDSOF$) Treasury shares reissued pursuanttoequitycompensation plans: Purchase of treasury shares Balance at 1April Balance at 31March – – – – RSP/PSP awarded Employee share optionsexercised For cashonexercise of employeeshare options Gain onreissuance of treasury shares presentation currency. financial statements of foreign operations whosefunctional currencies are different from that of the Group’s The foreign currency translation reserve records exchange differences arisingfrom thetranslation of the Foreign currencytranslation reserve reduced bytherelease of share awards andexercise/lapse of share options. over the vesting period commencing from the grant date of equity-settled share options and awards, and is employees. Thereserve ismadeupof thecumulative valueof servicesreceived from employeesrecorded Share-based compensation reserve represents theequity-settledshare optionsandawards grantedto Share-based compensation reserve Capital reserve arisesfrom thegainsorlossesonreissuance of treasury shares. Capital reserve The GroupandCompany (21,343) (18,020) 3,447 3,323 2019 (124) – – – 31 March (10,159) (15,175) (21,343) 2,926 3,991 2018 152 991 (78) 151 ANNUAL REPORT 2018/19 152 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 13. (d) OTHER RESERVES (INTHOUSANDSOF$)(continued) (f) (e) effective hedge. financial instrumentsdesignated ashedginginstrumentsincashflowhedgesthat isdeterminedtobean other comprehensive income(“FVOCI”) andtheportionof thefairvaluechanges(netof tax)on derivative Fair valuereserve records thecumulative fairvaluechangesof financialassetmeasured at fairvaluethrough Fair valuereserve Equity respectively. control. MovementsintheGroup’s andtheCompany’s reserves are setoutintheStatement of Changesin general reserve is a difference arising from the restructuring by a joint venture for entities under common General reserve comprises mainly retained earnings of theGroup and the Company. Included in the Company’s General reserve in control. The reserve represents theeffects of changesinownershipinterest insubsidiarieswhenthere isnochange Equity transactionreserve Balance at 31March Net gainonfairvalueadjustment Balance at 1April Share of othercomprehensive incomeof joint venture Realisation of fair valuechangesonfinancialasset Recognised inthecarryingvalueof investmentin Recognised in“other operating expenses”inprofit orloss Net gainonfairvalueadjustment Balance at 1April Recognised in“other operating expenses”inprofit orloss Recognised inthecarryingvalueof investmentin Balance at 31March Realisation of fairvaluechangesonnon-current asset company measured at FVOCI injection associated companyontheoccurrence of capital on occurrence of forecast transactions injection associated companyontheoccurrence of capital on occurrence of forecast transactions held for sale

(6,258) 3,653 1,455 1,455 1,350 2019 2019 (906) (349) 244 244 – – – – 31 March 31 March The Company The Group (1,032) (1,032) 3,653 4,908 1,070 1,070 2018 2018 (582) (711) (711) (349) 324 – – (141,924) (141,924) 140,747 143,091 1 April 1 April (1,457) (1,457) 1,438 2017 2017 (582) 614 614 324 – – 14. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 1 April2017:$2,552,000). (2018: $9,865,000;1April2017:$8,507,000).Thedeferred taxliabilityisestimated tobe$3,349,000(2018:$2,960,000; Such temporarydifferences for whichnodeferred taxliabilityhasbeen recognised aggregate to$11,163,000 determined that undistributedearningsof thesesubsidiarieswill notbedistributedintheforeseeable future. For theothersubsidiariesof theGroup, nodeferred taxliabilityhasbeenrecognised astheGroup has recognised for taxes that wouldbepayableontheundistributedearningsof oneof theGroup’s subsidiaries. At the end of the reporting period, deferred tax liability of $596,000 (2018: $642,000; 1 April 2017: $749,000) has been the companiesoperate. the taxauthoritiesandcompliancewithcertainprovisions of thetaxlegislation of therespective countriesinwhich assets are recognised duetouncertaintyof itsrecoverability. Theuseof thetaxlossesissubjecttoagreement of available for offset against future taxable profits of the companies in which the losses arose, for which no deferred tax The Group hastaxlossesof approximately $51,430,000(2018:$43,833,000;1April2017:$28,586,000)that are Deferred taxrelates tothefollowing items: DEFERRED TAXATION (INTHOUSANDSOF$) Other items Deferred incometax Undistributed profits of Undistributed profits of a Other items Revaluation of forward Provisions Differences in Deferred taxliabilities Actuarial losson Deferred taxassets equipment property, plantand depreciation of expense companies overseas associated subsidiary company fair value currency contractsto benefit plans revaluation of defined 23,070 23,955 (2,481) 1,371 2019 (905) 258 596 276 31 March – balance sheet Consolidated 24,202 25,347 (2,536) 1,389 2018 (826) 257 642 (71) – The Group 1 April 26,416 26,369 (2,024) 2,243 2017 (802) (436) 251 749 66 2018/19 (1,544) (1,392) income statement (144) Consolidated (18) (46) 55 – – 1 2017/18 (2,583) (1,435) (854) (107) (117) (512) 436 – 6 21,230 23,435 (2,481) 2019 276 31 March – – – – – The Company Balance sheet 22,283 24,890 (2,536) 2018 (71) – – – – – 1 April 23,603 25,997 (2,024) 2017 (436) 66 – – – – 153 ANNUAL REPORT 2018/19 154 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 15. # PROPERTY, PLANT ANDEQUIPMENT(INTHOUSANDSOF$) PROPERTY, PLANT At 31 March 2019 At 31 March 2018 At 1 April 2017 Net bookvalue At 31March 2019 Exchange differences Disposal of asubsidiary Disposals Depreciation At 31March 2018 Exchange differences Disposals Impairment losses Depreciation At 1April2017 Accumulated depreciation andimpairmentlosses At 31March 2019 Exchange differences Disposal of asubsidiary Disposals Transfers Additions At 31March 2018 Exchange differences Disposals Transfers Additions At 1April2017 Cost orDeemed The Group

company overhaul tooling). Advance and progress payments comprise mainly plant, equipment and engine overhaul tooling (2018: plant, equipment and engine company Leasehold 129,929 160,093 290,022 buildings 138,470 150,019 149,697 140,214 288,167 290,233 land and 10,109 10,041 (2,872) 1,443 (543) 287 332 804 (15) (18) 80 20 – – – – –

and engine equipment 231,462 296,618 221,307 215,488 288,514 282,289 overhaul (11,156) (11,067) 65,156 67,207 66,801 20,087 18,800 15,215 19,477 tooling (1,057) (9,588) (1,825) (1,660) (9,672) (3,053) 1,376 2,845 Plant, 713 868 –

135,473 140,162 148,522 45,345 90,128 58,331 76,673 10,782 81,831 11,627 71,849 Aircraft rotable (2,630) (4,907) (5,923) (8,478) spares 3,546 1,038 (284) (394) 145 171 486 25 26 – –

equipment computer furniture furniture 13,735 47,991 61,726 17,025 15,306 43,257 36,443 60,282 51,749 (2,682) (2,685) 7,647 7,176 Office Office 2,234 2,250 6,797 2,467 (296) (158) (204) (449) (274) (457) and 65 94 –

vehicles 2,648 5,886 8,534 2,965 2,413 Motor 5,484 5,127 8,449 1,336 7,540 (177) (282) (379) (307) (329) (138) (379) 834 826 611 (90) 27 33 77 90 –

payments progress Advance (5,261) (7,801) 3,993 3,993 3,640 4,541 5,514 3,640 7,029 4,541 (129) 100 and – – – – – – – – – – – – – –

# 260,806 535,560 796,366 287,638 315,753 501,576 469,121 789,214 784,874 (15,182) (16,661) (18,609) (20,399) 49,459 48,470 24,960 31,599 (1,530) (2,900) (2,416) (6,860) 1,237 3,546 3,217 Total – – 15. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS fair valuehierarchy). recoverable amountsof therotables subjecttofair valuation, after theimpairmentcharge was$5,457,000(level3of into accounttheexpectedresale prices inthesecondarymarkets andtheserviceconditionof therotables. The generate sufficientfuture cashflows. The recoverable amountwasbasedonanindependentvaluation, which took In theprioryear, $3,546,000 (1April2017:nil)wasrecognised oncertainaircraft rotable spares that couldnolonger In thefinancialyearended 31 March 2019,noimpairmentlosswas recognised onproperty, plantandequipment. Impairment losses # PROPERTY, PLANT ANDEQUIPMENT(INTHOUSANDSOF$)(continued) PROPERTY, PLANT At 31 March 2019 At 31 March 2018 At 1 April 2017 Net bookvalue At 31 March 2019 Disposals Depreciation At 31March 2018 Disposals Impairment losses Depreciation At 1April2017 Accumulated depreciation andimpairmentlosses At 31March 2019 Disposals Transfers Additions At 31March 2018 Disposals Transfers – Additions – Net bookvalueof property, plantandequipmentacquired At 1April2017 Cost orDeemed The Company

under financelease: Motor vehicles Plant, equipmentandengineoverhaultooling Advance andprogress paymentscomprisemainlyplant,equipmentandengineoverhaul tooling(2018:office andcomputer equipment). Leasehold buildings 148,671 243,452 103,085 111,369 140,367 132,063 243,452 243,432 land and 94,781 8,304 8,304 20 – – – – – – – – and engine equipment 192,630 240,906 (17,646) (10,866) (18,552) 196,083 (10,761) 192,833 246,882 241,553 overhaul 48,276 50,799 48,720 14,193 14,116 11,843 15,361 tooling Plant, 733 729 –

130,494 134,954 142,945 44,754 85,740 (2,152) (4,651) 57,585 75,802 Aircraft 10,523 (5,434) 77,369 11,331 (8,263) 67,143 rotable spares 3,546 974 272 – – equipment computer furniture 11,860 44,700 56,560 (2,581) 15,152 13,970 (2,581) 40,664 34,281 55,816 48,251 Office 6,617 6,448 2,123 1,202 6,266 1,613 (314) 2019 (65) and – – – 31 March vehicles 2,010 4,473 6,483 Motor 2,021 1,781 4,160 3,948 6,181 5,729 (226) (364) (256) (364) The Group 539 576 525 726 33 90 – 2018 payments 30 progress Advance 9 (2,889) (7,105) 2,374 2,374 2,724 4,764 4,880 2,724 499 499 and – – – – – – – – – –

# 1 April 204,055 476,214 680,269 (22,605) (15,946) 229,141 254,366 (26,823) 458,643 (19,702) 430,268 687,784 684,634 40,176 40,775 19,308 22,852 3,546 2017 Total 11 33 – – 155 ANNUAL REPORT 2018/19 156 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 16. (2017/18: 9%). manager for the next 43 years (2017/18: 44 years). The pre-tax discount rate applied to cashflowprojections is8% based onvalueinusecalculations using cashflowprojections from thebusinessplanprovided bytheprogramme The recoverable amountof thecash-generating unit(theaircraft enginedevelopmentproject) hasbeendetermined performed andnoimpairmentlosswasdeemednecessaryfollowing thereview. with itsparticipation inaircraft enginedevelopmentprojects withothercompanies.An impairmenttesthasbeen This relates to the Group’s share of engine programme assets including development costs made in connection Impairment testingof deferred enginedevelopmentcosts INTANGIBLE ASSETS(INTHOUSANDSOF$) Exchange differences Disposal of asubsidiary Reclassification toprepayments Transfers Additions At 31March 2018 Exchange differences Disposals Transfers Amortisation Amortisation At 1April2017 Accumulated amortisation At 31March 2019 Additions At 1April2017 Cost The Group At 31March 2019 Exchange differences Disposal of asubsidiary At 31March 2018 Exchange differences Disposals At 31 March 2019 At 31 March 2018 At 1 April 2017 Net bookvalue company company Computer software 45,677 41,665 44,201 44,814 50,286 39,672 (7,138) (7,138) 4,012 1,145 2,066 2,087 4,529 5,472 (113) (105) (109) (91) 405 877 281 39 36 – development Deferred (34,158) 40,520 34,962 engine (3,990) 10,325 61,856 58,888 58,438 58,417 5,558 2,497 6,958 1,931 3,342 3,418 costs (395) 471 209 – – – – – – intangible (4,213) (4,213) assets Other 4,213 4,213 4,213 4,213 – – – – – – – – – – – – – – – – – – payments progress Advance (1,145) 7,673 7,673 4,087 4,731 4,184 1,424 4,731 1,424 (877) and – – – – – – – – – – – – – – (34,158) 115,001 114,811 93,870 46,647 47,223 (4,326) (4,095) (7,138) (4,322) (7,138) 14,817 11,423 49,498 47,303 67,698 65,313 2,536 3,997 5,429 (486) Total 245 – – 16. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 17. based oncurrent aircraft orders andexpectations of market development. engines expected to besold each year upon the completionof engine development. Projected engine sales are Number andtimingof enginesales–Numberandtimingof enginesalesrepresent theprojected numberof aircraft if thediscountrate increases by3%(2017/18:1%). been incorporated inthecashflowestimates. The recoverable amountisstillexpectedtoexceed itscarryingamount cash-generating unit, regarding the time value of money and individual risks of the underlying assets which have not Pre-tax discountrates –Discountrates represent thecurrent market assessmentof therisks specifictothe The calculations of valueinuseare mostsensitivetothefollowing assumptions: Impairment testingof deferred enginedevelopmentcosts(continued) INTANGIBLE ASSETS(INTHOUSANDSOF$)(continued) SUBSIDIARY COMPANIES (INTHOUSANDSOF$) At 31 March 2019 At 31 March 2018 At 1 April 2017 Net bookvalue At 31 March 2019 Amortisation At 31March 2018 Disposals Amortisation At 1April2017 Accumulated amortisation At 31March 2019 Transfers Additions At 31March 2018 Disposals Transfers Additions At 1April2017 Cost The Company Loan toasubsidiarycompany Unquoted shares, at cost Impairment loss Computer software 153,349 153,349 39,934 43,566 38,076 43,355 42,303 48,527 (7,136) (7,136) 3,632 4,227 5,172 1,858 1,857 2019 955 308 695 217 – – 31 March Advance and The Company payments progress 140,062 131,547 (13,088) 7,229 7,229 4,121 4,063 4,121 3,912 4,573 2018 (955) (695) 904 904 – – – – – – – 127,778 127,770 39,934 10,861 50,795 38,076 43,355 46,424 49,431 1 April (7,136) (7,136) (5,257) 8,348 6,076 1,858 1,857 4,371 4,129 5,249 Total 2017 – –

157 ANNUAL REPORT 2018/19 158 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 17. (a) SUBSIDIARY COMPANIES (INTHOUSANDSOF$)(continued) The subsidiarycompaniesat 31March are asfollows: Composition oftheGroup Name ofcompany Singapore Aero Aircraft Maintenance SIAEC Global Private Heavy Maintenance NexGen Network(1) SIA EngineeringJapan SIA Engineering NexGen Network(2) SIA Engineering(USA), Private Limited)* Jamco Services known asSingapore Pte. Ltd. (previously Support Services Pty. Ltd. ^ Services Australia Limited * Pte. Ltd. * Singapore Services Holding Pte.Ltd. * Corporation Corporation ^ (Philippines) Holding Pte.Ltd. * Inc. # ## Principal activities components/systems aircraft andcabin and overhaulof Maintenance, repair the airport technical handlingat technical andnon- services, including maintenance Provide aircraft the airport technical handlingat technical andnon- services, including maintenance Provide aircraft the airport technical handlingat technical andnon- services, including maintenance Provide aircraft Investment holding services component overhaul maintenance and Provide airframe Investment holding services component overhaul maintenance and Provide airframe Investment holding business and placeof incorporation of Country Singapore Japan of America United States Australia Singapore Singapore Singapore Philippines Singapore 12,445 24,575 11,463 27,175 56,177 4,060 1,358 2019 @ – 11,231 11,463 27,175 56,177 Cost 7,741 2,706 1,358 8,515 2018 @ 11,463 27,175 49,694 1 April 7,741 1,358 8,515 8,136 2017 @ – 2019 Percentage equity held bytheGroup 100 100 100 100 100 100 65 65 – 2018 100 100 100 100 100 100 80 65 65 1 April 2017 100 100 100 100 100 80 65 65 – 17. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (a) SUBSIDIARY COMPANIES (INTHOUSANDSOF$)(continued) 6. 5. 4. 3. 2. 1. ## # @ ^ * Composition oftheGroup(continued) Name ofcompany Additive Flight Aerospace Component Aviation Partnership Solutions Pte.Ltd. * Pte. Limited* Engineering Services Corporation ^ (Philippines) Not required tobeauditedinthecurrent financialyear Not required tobeauditedunderthelawincountryof incorporation Cost of investmentandissuedpaid-up share capitalis$2 Audited bymemberfirmsof KPMGInternational intherespective countries Audited byKPMGLLP, Singapore Ltd. (“NGN2”), undertheterms of theshareholders’ agreements. In theprioryear, theCompanyinvested approximately $6,483,000 in NexGenNetwork(2)Holding Pte. 20 December2018, withthecompletionof divestment. consideration of approximately $4,377,000. AMSAceasedtobeasubsidiaryof SIAEC from The Companysold100%interest in Aircraft Maintenance ServicesPty. Ltd. (“AMSA”) for acash On 1April2019, SJSwasrenamed Singapore Aero SupportServicesPte.Ltd. acquired anadditional20%interest inSJS. Consequently, SJSbecameawholly-ownedsubsidiary. Singapore JamcoServicesPrivate Limited(“SJS”).Aspartof therestructuring, theCompany On 29January2019, theGroup completedtherestructuring of one of itssubsidiarycompanies, Company holds60%stake inAFS. at year-end, theCompanyhadatotal capital contributioninAFSof approximately $2,400,000. The The Company incorporated a subsidiary, Additive Flight Solutions Pte. Ltd. (“AFS”) on 29 June 2018. As Services Pte.Ltd. (“HMSS”), underthetermsof theshareholder’s agreement. The Companyinvestedapproximately $13,344,000 (2018:$3,095,000) inHeavy MaintenanceSingapore The Companyinvestedapproximately $1,354,000 inSIAEngineeringJapanCorporation (“SIAEJ”). Principal activities aerospace industry and toolingfor the aircraft cabinparts manufacturing of Additive aircraft Boeing andAirbus equipment for of hydro-mechanical Repair andoverhaul the airport technical handlingat technical andnon- services, including maintenance Provide aircraft business and placeof incorporation of Country Singapore Singapore Philippines 10,934 2019 2,400 2,762 10,934 Cost 2018 2,762 – 1 April 10,934 2017 2,762 – 2019 Percentage equity held bytheGroup 60 51 51 2018 51 51 – 1 April 2017 51 51 –

159

ANNUAL REPORT 2018/19 160

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 17. (a) (b) SUBSIDIARY COMPANIES (INTHOUSANDSOF$)(continued) The valueof assetsandliabilitiesof AMSAdisposed,andtheeffects of thedisposalwere: Disposal of asubsidiarycompany attributable toownersof theCompany. The following summarisestheeffect of thechangeingroup’s ownershipinterest inSJSontheequity Acquisition of non-controlling interests Composition oftheGroup(continued) The Group hasthefollowing subsidiarycompaniesthat hasNCIthat are material totheGroup: companies withmaterial non-controllinginterests(“NCI”) Interest insubsidiary Aerospace Component SIA Engineering(Philippines) Decrease inequityattributable toownersof theCompany Decrease inequityattributable tonon-controlling interests Consideration paidfor acquisitionof non-controlling interests Surplus ondisposal Exchange difference Realisation of foreign currency translation reserve Net assetsdisposed Cash received Surplus ondisposal: Net assetsdisposed Less: Trade andothercreditors Total assets Cash andbankbalances Inventories Trade andotherdebtors Intangible assets Property, plantandequipment Name Engineering Services Pte.Limited Corporation Singapore Philippines of incorporation business/Country Principal placeof component Engine and maintenance Airframe andline Segment Operating 2019 Ownership interests 49 35 % heldbyNCI 2018 31 March2019 49 35 % of disposal

As at date 1 April (2,556) (4,407) (2,186) 2,148 4,704 4,377 4,407 6,593 2,745 2,849 2017 309 213 126 109 886 49 35 % 4 17. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (c) SUBSIDIARY COMPANIES (INTHOUSANDSOF$)(continued) NCI are asfollows: Summarised financialinformation before intercompany eliminations of subsidiarycompanieswithmaterial companieswithmaterial NCI Summarised financialinformation aboutsubsidiary Net assets Net non-current assets Net current assets Liabilities Liabilities Acquisition of significant Net cashflowfrom operations Other summarisedinformation Assets Non-Current Assets Current Summarised balancesheet Total comprehensive income Other comprehensive income Profit after tax Taxation Profit before incometax Revenue Summarised statement ofcomprehensiveincome equipment property, plantand (12,561) (20,052) 35,636 28,657 41,218 27,031 6,979 2019 SIA Engineering(Philippines) SIA Engineering(Philippines) 31 March 49,731 (1,213) 6,187 4,079 4,077 4,630 2019 (553) Corporation Corporation 2 31 March (17,297) (16,708) 30,573 25,598 42,895 21,683 4,975 2018 1 April 41,966 (25,329) (10,157) (3,081) 31,017 20,982 10,035 46,311 20,192 6,452 1,446 1,315 1,681 2018 2017 (366) 131 Engineering Services Pte.Limited Engineering Services 20,067 14,654 18,343 Engineering Services Pte.Limited Engineering Services (3,689) 5,413 5,725 2019 (312) 31 March Aerospace Component Aerospace Component 25,005 1,234 1,578 1,578 1,930 2019 (352) (702) – 31 March 19,500 13,779 17,223 (3,444) 5,721 5,934 2018 (213) 1 April 22,839 20,665 14,057 17,665 3,408 1,719 1,719 2,045 (3,608) 2018 6,608 6,792 2017 (326) (645) (184) – 161 ANNUAL REPORT 2018/19 162 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 18. The associated companiesat 31March are asfollows: ASSOCIATED COMPANIES (INTHOUSANDSOF$) Impairment loss Translation adjustment Goodwill written-off to reserves Share of othercomprehensive Share of post-acquisition Unquoted shares, at cost Boeing AsiaPacific PT JasAero- Moog Aircraft Southern Airports Fuel Accessory Eagle ServicesAsia Name ofcompany income reserves Pte. Ltd. ^^^ Aviation Services Services ^^ Engineering Ltd. ** Services AsiaPte. Limited *** Services Company Maintenance Aircraft Pte Ltd Technologies Service Private Limited ##+

++ ++ ++

##++

control systems services for flight Repair andoverhaul accessories components and of enginefuel Repair andoverhaul of aircraft engines Repair andoverhaul solutions and fleetsupport management material Provide engineering, Principal activities the airport technical handlingat technical andnon- services, including maintenance Provide aircraft the airport technical handlingat technical andnon- services, including maintenance Provide aircraft 404,328 278,062 224,376 (72,077) (24,398) (2,538) 2019 903 31 March Singapore Singapore Singapore Singapore business and placeof incorporation of Country Indonesia Vietnam 392,462 276,589 226,406 The Group (83,662) (24,398) (2,538) 2018 65 71,588 50,965 6,561 5,071 3,675 1,117 2019 380,047 271,245 198,435 (62,697) (24,398) 1 April (2,538) 2017 – 71,588 50,965 Cost 5,071 4,626 3,675 1,117 2018 221,658 224,376 (2,718) 71,588 23,516 1 April 2019 5,071 3,675 1,117 2017 – – – – 31 March – Percentage equityheld The Company 2019 49.0 49.0 49.0 49.0 49.0 49.0 220,897 223,615 (2,718) 2018 by theGroup – – – – 2018 49.0 49.0 49.0 49.0 49.0 49.0 192,926 195,644 1 April (2,718) 1 April 2017 2017 49.0 49.0 49.0 49.0 49.0 – – – – – 18. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS ASSOCIATED COMPANIES (INTHOUSANDSOF$)(continued) International Asian Surface Safran Landing Safran Electronics & Pan AsiaPacific Goodrich Panasonic Avionics JAMCO Aero Component Name ofcompany – AsiaPte.Ltd. Aerospace Tubes Pte Ltd ^ Technologies Ltd. **** Singapore Pte. Systems Services Asia Pte.Ltd. **** Defense Services Limited * Aviation Services Pte. Ltd. Service Center-Asia Aerostructures Pte. Ltd. Services Singapore Limited ***** Engineering Private Design & Ltd. Singapore Pte. Aerospace ##+ @ ++ ##++ ++ ##++ ++

blades of aircraft enginefan Repair andoverhaul series landinggears of Boeing andAirbus Repair andoverhaul and overhaulservices maintenance, repair Provide avionics the airport technical handlingat technical andnon- services, including maintenance Provide aircraft pylons thrust reversers and of aircraft nacelles, Repair andoverhaul systems flight entertainment repair services of in- maintenance and Provide line interior modifications solutions for aircraft Provide turnkey related parts fuel nozzles and chambers, guides, combustion of aircraft engine Repair andoverhaul airframe application aircraft enginesand and manifolds for Repair of tubes,ducts Principal activities Singapore Singapore Singapore Hong Kong Singapore Singapore Singapore Singapore Singapore business and placeof incorporation of Country 13,971 11,004 37,220 2,718 3,224 2,685 2,853 5,286 2019 767 13,971 11,004 37,220 Cost 2,718 3,224 2,685 2,853 5,286 2018 767 13,971 11,004 37,220 1 April 2,718 3,224 2,685 2,853 5,286 2017 767 Percentage equityheld 33.3 2019 39.2 40.0 40.0 40.0 40.0 42.5 45.0 46.4 by theGroup 2018 33.3 39.2 40.0 40.0 40.0 40.0 42.5 45.0 46.4 1 April 2017 33.3 39.2 40.0 40.0 40.0 47.1 42.5 45.0 46.4 163 ANNUAL REPORT 2018/19 164

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 18. 5. 4. 3. 2. 1. ++ + ^^^ ^^ ^ ***** **** *** ** * ## # @ ASSOCIATED COMPANIES (INTHOUSANDSOF$)(continued) Asian Compressor Jamco Singapore Name ofcompany Turbine Coating Limited Services Company Technology Limited ***** Private Services PteLtd Financial yearend31December Financial yearend30November Audited byDeloitte&Touche, Singapore Audited byRSMAAJ, Indonesia Audited byRSMChioLim,Singapore Audited byGrantThorntonLLP, Singapore Audited byMazarsLLP, Singapore Audited byDeloitte&Touche, Vietnam Audited byErnst&Young LLP, Singapore Audited byBDOLimited,HongKong Audited byPriceWaterhouseCoopers, Singapore Audited byPriceWaterhouseCoopers, Taiwan Audited byKPMGLLP, Singapore $870,000 wasrecognised intheconsolidated incomestatement. for newshares inPAPAS, theCompany’s relative interest inPAPAS is40%.Againondilutionof approximately Services Limited(“PAPAS”) for acashconsideration of approximately HK$21,700,000. AfterHKA’s subscription In theprioryear, Hong Kong AirlinesLtd (“HKA”) completedthesubscriptionfor newshares inPanAsia Pacific ACTS ceasedtobeanassociated companyfrom 22January2018. Limited (“ACTS”). Againondisposal of $15,000,000 wasrecorded intheconsolidated incomestatement and Airlines Limited(“CAL”), completedthesaleof 100%share of AsianCompressor Technology ServicesCompany In theprioryear, theCompany, togetherwithitsjointventure partners,Pratt &Whitney(“P&W”) andChina Pte. Ltd (“BAPAS”), underthetermsof theshareholders’ agreement. In theprioryear, theCompanyinvestedapproximately $27,449,000 inBoeingAsiaPacificAviation Services associated company. A lossondisposalof $88,000 wasrecorded intheconsolidated incomestatement andJSceasedtobean On 29 January 2019, the Group completed the sale of 20%share of JamcoSingapore Private Limited(“JS”). (“MASA”) undertermsof theshareholders’ agreement. During theyear, theCompanyinvestedapproximately $1,935,000 inMoogAircraft ServicesAsiaPte.Ltd. #++ ##+ compressor stators high pressure of aircraft engine Repair andoverhaul turbine airfoils of aircraft engine Repair andoverhaul equipment sales of aircraft cabin Manufacturing and Principal activities Taiwan Singapore Singapore business and placeof incorporation of Country 5,671 2019 – – Cost 3,965 5,671 2018 – 1 April 3,965 5,671 4,104 2017 2019 24.5 Percentage equity held bytheGroup – – 2018 24.5 20.0 – 1 April 2017 24.5 20.0 24.5 18. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS Summarised financialinformation in respect of ESAisas follows: Dividends of approximately $27,640,000(2017/18:$8,026,000)were received from ESA. The activitiesof ESAcomplementtheGroup’s activities. The carryingamountof thematerial investmentisasfollows: unaudited managementfinancialstatements of ESA,prepared inaccordance withSFRS(I). The summarised financial information presented is extracted from the lastaudited financial statements available and ASSOCIATED COMPANIES (INTHOUSANDSOF$)(continued) Other associated companies Eagle ServicesAsiaPrivate Limited(“ESA”) Summarised balancesheet Total comprehensive income Profit after taxation from continuingoperations Revenue Summarised statement ofcomprehensiveincome Shareholders’ equity Financed by: Non-current liabilities Current liabilities Non-current assets Current assets Funds employed: (163,241) 404,328 215,314 189,014 385,743 385,743 565,860 140,603 425,257 (16,876) 2019 2019 31 March 31 March 1,358,170 The Group 392,462 217,172 175,290 357,735 357,735 447,785 367,454 (86,409) 73,189 73,189 80,331 (3,641) 2019 2018 2018 31 March 1,202,577 380,047 215,268 164,779 336,284 336,284 349,278 296,900 (10,142) 59,220 59,220 52,378 1 April 1 April (2,852) 2018 2017 2017 165

ANNUAL REPORT 2018/19 166

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 18. The Group’s share of theassetsandliabilitiescomprises: as follows: Aggregate information abouttheGroup’s investmentinassociated companiesthat are notindividuallymaterial are A reconciliation of the summarisedfinancialinformation tothecarryingamounts of ESAisas follows: ASSOCIATED COMPANIES (INTHOUSANDSOF$)(continued) The Group’s share of theresults isasfollows: Summarised balancesheet Group’s share of 49%of netassets Total comprehensive income Other comprehensive income Profit after taxfrom continuingoperations Summarised statement ofcomprehensiveincome Shareholders' equity Financed by: Non-current liabilities Current liabilities Non-current assets Current assets Funds employed: 189,014 212,303 312,555 212,303 239,896 (91,491) 72,659 (8,761) 2019 2019 31 March 31 March The Group The Group 2018/19 175,290 214,161 291,333 214,161 219,141 (72,122) 37,612 37,639 72,192 (5,050) 2018 2018 (27) The Group 2017/18 164,779 212,257 277,307 212,257 201,477 (60,858) 40,581 40,516 75,830 1 April 1 April (4,192) 2017 2017 65 19. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS The jointventure companyat 31March isasfollows: Dividends of approximately $36,255,000 (2017/18:$45,899,000)were received from SAESL. agreement andrequires unanimousconsentfor allmajordecisionsovertherelevant activities. complement the Group’s activities. The Group jointly controls SAESL with other partners under the contractual The Group has50%(2018:50%)interest intheownershipandvoting rightsinSAESL.Theactivitiesof SAESL The carryingamountof theinvestmentisasfollows: @ JOINT VENTURE COMPANY (INTHOUSANDSOF$) Translation adjustment Share of othercomprehensive Share of post-acquisition reserves Singapore Aero Unquoted shares, at cost Singapore Aero EngineServicesPrivate Limited(“SAESL”) Name ofcompany income Private Limited Engine Services Audited byKPMGLLP, Singapore, financialyearendof 31December @ Principal activities engines overhaul of aircraft Repair and 154,724 114,921 (19,808) 61,867 (2,256) business and placeof incorporation of Country Singapore 2019 31 March 151,851 110,809 The Group (24,827) 61,867 4,002 2018 61,867 2019

162,015 116,424 (15,370) 1 April 61,867 61,867 Cost 2017 2018 (906) 154,724 2019

61,867 1 April 31 March 2017 61,867 61,867 2019 – – – The Group 31 March 151,851 2019 50.0 2018 Percentage equity held bytheGroup The Company

61,867 61,867 2018 2018 – – – 50.0

162,015 1 April 1 April 61,867 61,867 1 April 2017 2017 2017 50.0 – – – 167 ANNUAL REPORT 2018/19 168 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 19. Summarised financialinformation in respect of SAESLisas follows: A reconciliation of thesummarisedfinancialinformation tothecarryingamounts of SAESLisas follows: unaudited managementfinancialstatements of SAESL,prepared inaccordance withSFRS(I). The summarised financial information presented is extracted from the lastaudited financial statements available and JOINT VENTURE COMPANY (INTHOUSANDSOF$)(continued) Group’s share of 50%of netassets Summarised balancesheet Total comprehensive income Other comprehensive income Profit after taxation Taxation Profit before tax Interest expense Interest income Depreciation andamortisation Revenue Summarised statement ofcomprehensiveincome Shareholders’ equity Financed by: Net assets Total liabilities Non-current liabilities Current liabilities Total assets Non-current assets Total current assets Other current assets Cash andshort-termdeposits Funds employed: 1,101,312 (791,864) (263,244) (528,620) 154,724 309,448 309,448 318,672 782,640 754,060 28,580 2019 2019 31 March 31 March 2,112,985 The Group (647,050) (209,256) (437,794) 2018/19 151,851 950,753 303,703 303,703 263,089 687,664 642,124 (12,516) (22,316) 68,217 80,733 87,215 45,540 (6,482) (7,622) 2018 2018 71 1,980,455 (490,808) (106,191) (384,617) 2017/18 162,017 814,841 324,033 324,033 282,766 532,075 509,870 (21,592) 90,385 80,569 85,808 22,205 1 April 1 April (5,239) (4,767) 9,816 2017 2017 66 20. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS Aging of tradedebtorsthat are pastduebutnotimpaired: trade debtiswrittenoff whenmanagementdeemstheamountnottobecollectible. and defaultordelinquencyinpaymentsare considered indicators that thetradedebtoriscredit-impaired. Individual Significant financial difficulties of the debtor, probability thatthedebtorwill enter bankruptcy orfinancial reorganisation, account. subsequent periodswhenatradedebtorisascertained to beuncollectible,itiswrittenoff againsttheallowance loss isrecognised, theGroup ascertainstheamounttobeuncollectible whereby itwouldbereduced directly. In impaired bycredit lossesisreduced through theuseof anallowanceaccountunlessonthedate theimpairment original invoiceamountswhichrepresent theirfairvaluesoninitialrecognition. The carryingamountof tradedebtors Trade debtorsare non-interest bearingandare generallyon30to 90days’terms.Theyare recognised at their The tablebelowisananalysisof tradedebtorsasat 31March: TRADE DEBTORS(INTHOUSANDSOF$) Total tradedebtors,net Less: Accumulated impairment More than 90days Impaired trade debtors– 61 daysto90 30 daysto60 Past duebutnotimpaired Not pastdueandnotimpaired Less than30days Trade debtors losses collectively assessed 81,228 43,143 81,228 18,506 43,143 38,085 19,902 81,228 (2,373) 3,030 2,373 1,705 2019 2019 2019 – 31 March 31 March 31 March The Group The Group The Group 70,948 19,795 70,948 19,795 51,153 70,948 (2,225) 2,559 2,225 2,391 6,596 8,249 2018 2018 2018 – 1 April 1 April 1 April 87,504 40,608 87,504 40,608 46,896 26,416 87,504 (1,706) 6,634 1,706 2,314 5,244 2017 2017 2017 – 59,503 35,763 59,503 17,032 35,763 23,740 14,319 59,503 (1,961) 2,932 1,961 1,480 2019 2019 2019 – 31 March 31 March 31 March The Company The Company The Company 52,653 11,225 52,653 11,225 41,428 52,653 (1,992) 1,992 1,374 5,075 4,029 2018 2018 2018 747 – 1 April 1 April 60,491 28,466 60,491 28,466 32,025 20,027 60,491 1 April (1,298) 2,564 1,298 1,236 4,639 2017 2017 2017 – 169

ANNUAL REPORT 2018/19 170

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 21. 20 Contracts for whichrevenue isrecognised overtimetheperformance of thechecks. The contractliabilitiesprimarilyrelate totheadvanceconsideration received from customersfor Fixed PricePackage and Companyinvoicethecustomers. assets are transferred totradedebtorswhentherightsbecomeunconditional.This usually occurswhentheGroup $25,800,000 (2018:$22,568,000;1April2017:$12,786,000) for theGroup and Companyrespectively. Thecontract the immediate holdingcompanyof approximately $26,893,000(2018:$25,319,000;1April2017: $12,786,000) and 1 April2017:$47,405,000)for theGroup andCompanyrespectively, andservicesrendered tofellow subsidiariesof approximately $56,917,000 (2018: $67,945,000; 1 April 2017: $47,405,000) and $56,598,000 (2018: $67,903,000; at thereporting date. Includedincontractassetsare servicesrendered toimmediate holdingcompanyof Contract assetsrelate totheGroup’s andCompany’srightstoconsideration for workcompletedbutnotbilled 1 April2017:81%)for theCompany. in UnitedStates Dollarsamountedto59%(2018:57%;1April2017:62%)for theGroup and76%(2018:69%; As at 31March 2019,tradedebtorsincurrencies otherthantheGroup’s functionalcurrencies whichwere denominated Trade debtors are stated after deducting impairment losses. An analysis of the impairment loss account is as follows: The following tableprovides information aboutcontractassetsandliabilitiesfrom contractswithcustomers. CONTRACT BALANCES (INTHOUSANDSOF$) CONTRACT BALANCES TRADE DEBTORS(INTHOUSANDSOF$)(continued) Contract liabilities Bad debtswrittenoff directly toprofit orloss Balance at 31March Contract assets Provision utilisedduringtheyear Charge toprofit orloss Balance at 1April account, netof debtsrecovered 183,919 (33,499) 2019 31 March The Group 195,667 (32,300) 2018 2,373 2,225 2019 222 (74) – The Group 31 March 109,204 (38,223) 1 April 2017 2,225 1,130 1,706 2018 (611) 983 165,479 (33,342) 2019 31 March The Company 1,961 1,992 2019 180,914 (38) (32,170) The Company – 7 2018 31 March 105,660 (38,178) 1 April 1,992 1,205 1,298 2018 2017 (511) – 21. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS Significant changesinthecontractassetsandliabilities balancesduringtheperiodare as follows. CONTRACT BALANCES (INTHOUSANDSOF$)(continued) CONTRACT BALANCES (d) (c) (b) (a) The Company (d) (c) (b) (a) The Group Transfer from contractassetsto Contract assetsrecognised Increases duetocashreceived, Revenue recognised that wasincluded Transfer from contractassetsto Contract assetsrecognised Increases duetocashreceived, Revenue recognised that wasincluded trade debtors revenue during theyear excluding amountsrecognised as beginning of theyear in thecontractliabilitybalanceat the trade debtors revenue during theyear excluding amountsrecognised as beginning of theyear in thecontractliabilitybalanceat the (163,847) (221,511) 149,597 209,590 2019 Contract assets – – – – 31 March (106,437) (115,951) 181,728 201,441 2018 – – – – (64,165) (64,322) 64,459 64,503 2019 Contract liabilities – – – – 31 March (75,355) (75,397) 77,266 77,396 2018 – – – – 171 ANNUAL REPORT 2018/19 172 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 23. 22. financial obligations totheprogramme overaperiod of approximately 5years. wholly-owned subsidiarycompany’sprogramme partnertobeusedfor settlementof theGroup’s share of future net Included in prepayments is anamountof approximately $19,468,000(2018and1April2017:nil)heldbya holding company, onbehalfof theGroup andtheCompany. (2018: $60,657,000)for theGroup andtheCompany. Thesecontractswere entered intobytheCompany’simmediate The contract/notionalamountsof theforward currency contractsasat 31March 2019were approximately $47,551,000 forward contractsof approximately $159,000(2018:$461,000)for theGroup andCompanyin2019. and $324,000(2018:$366,000;2017:$331,000)for theGroup andCompanyrespectively, andfairvaluechangeof Included inotherdebtorsare depositsof approximately $1,491,000(2018:$1,963,000;1April2017:$2,484,000) The Group’s receivables andpayablesfrom/(to) immediate holdingcompanythat are offset are as follows: immediate holdingcompanytosettlethenetamountsdueorfrom eachotherincash,basedontheagreed terms. trade-related, interest-free andare repayable basedonagreed tradeterms.TheGroup hasanarrangementwithits The amounts due from the immediate holding company, which are carried at amortised cost, are unsecured, IMMEDIATE HOLDINGCOMPANY (INTHOUSANDSOF$) PREPAYMENTS ANDOTHERDEBTORS(INTHOUSANDSOF$) Payables Other debtors Receivables Prepayments Non-current assets Prepayments Current assets carrying carrying amount 142,227 (50,187) 19,860 13,833 11,138 Gross 8,722 2019 31 March 31 March2019 the balance The Group amounts The Group offset in (50,187) 50,187 19,748 10,151 Gross sheet 9,597 2018 – amounts balance 92,040 1 April 14,707 in the sheet 7,161 7,546 2017 Net – – carrying carrying amount 141,492 (50,187) Gross 8,412 6,415 1,997 2019 – 31 March 31 March2019 The Company the balance The Company amounts offset in (50,187) 50,187 11,156 Gross sheet 8,126 3,030 2018 – amounts balance 91,305 1 April in the sheet 7,552 4,549 3,003 2017 Net – –

23. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 24.

or from each otherincash,basedontheagreed terms. based onagreed tradeterms.TheGroup hasanarrangementwithitsrelated partiestosettlethenetamountsdue The amountsowingby/(to)related partiesof theGroup are unsecured, trade-related, interest-free andare repayable IMMEDIATE HOLDINGCOMPANY (INTHOUSANDSOF$)(continued) AMOUNTS OWING BY/(TO) RELATED PARTIES (INTHOUSANDSOF$) Amounts owingto Amounts owingby Payables Payables Receivables Receivables – Others – – Subsidiaries Fellow subsidiaries – Fellow related parties – Others Joint venture/associated – Joint – Subsidiaries Fellow subsidiaries – Fellow related parties Joint venture/associated companies companies carrying carrying carrying carrying amount amount 107,108 135,902 30,751 22,506 (65,116) (56,986) 5,174 3,071 Gross Gross Gross 2019 (784) (784) – – – – 31 March the balance the balance the balance 31 March2018 1 April2017 amounts amounts amounts The Group The Group offset in offset in offset in 41,901 31,619 (65,116) (56,986) 65,116 56,986 Gross 1,433 8,849 Gross Gross sheet sheet 2018 (410) (410) – – – – amounts amounts amounts balance balance balance 48,751 38,451 1 April (9,237) (2,349) (6,334) 41,992 78,916 in the 1,315 8,985 in the in the sheet sheet 2017 (554) Net Net Net – – – – carrying carrying carrying carrying amount (10,138) amount 105,678 134,032 44,532 17,501 19,253 (65,116) (56,986) (9,354) 5,174 2,604 Gross Gross Gross 2019 (784) – – 31 March the balance the balance the balance 31 March2018 The Company The Company 1 April2017 amounts amounts amounts offset in offset in offset in (19,396) (18,991) 48,981 30,785 (65,116) (56,986) 65,116 56,986 Gross 1,383 8,689 8,124 Gross Gross sheet sheet 2018 (405) – – the balance the balance amounts in amounts in amounts balance (26,190) (16,984) 49,613 37,741 1 April (2,318) (6,334) 40,562 77,046 in the 1,315 8,816 1,741 sheet sheet 2017 (554) Net Net Net – – 173 ANNUAL REPORT 2018/19 174 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 24. The Group’s receivables andpayablesfrom/(to) related partiesthat are offset are as follows: AMOUNTS OWING BY/(TO) RELATED PARTIES (INTHOUSANDSOF$)(continued) Amounts owingtorelated Amounts owingto Amounts owingby Amounts owingby on venture/associated Joint – – Subsidiaries – Subsidiaries Joint venture/associated – Joint – Others venture/associated – Joint – Subsidiaries subsidiaries – Fellow – Subsidiaries subsidiaries – Fellow – Others venture/associated Joint – parties related parties related parties related parties companies companies companies companies carrying carrying carrying carrying amount amount 30,751 22,506 46,603 36,321 Gross Gross 5,174 3,071 1,433 8,849 (410) (410) (784) (784) – – – – the balance the balance 31 March2018 31 March2019 amounts amounts The Group offset in The Group offset in Gross (4,702) (4,702) Gross sheet sheet – – – – – – – – – – – – – – the balance the balance amounts in amounts in 30,751 22,506 41,901 31,619 sheet sheet 5,174 3,071 1,433 8,849 (410) (410) (784) (784) Net Net – – – – carrying carrying carrying carrying amount amount (10,361) (19,850) (19,445) 45,053 19,253 18,022 53,832 35,487 Gross (9,577) Gross 5,174 2,604 8,273 1,383 8,689 (405) (784) the balance the balance 31 March2018 31 March2019 The Company The Company amounts amounts offset in offset in Gross (4,851) (4,702) Gross sheet sheet (149) (521) (521) 454 454 223 223 – – – – – – – the balance the balance amounts in amounts in (10,138) (19,396) (18,991) 44,532 19,253 17,501 48,981 30,785 (9,354) sheet sheet 5,174 2,604 8,124 1,383 8,689 (405) (784) Net Net 24. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 25. obsolescence isasfollows: Inventories are stated after deductingprovision for stockobsolescence.Ananalysisof theprovision for stock AMOUNTS OWING BY/(TO) RELATED PARTIES (INTHOUSANDSOF$)(continued) INVENTORIES (INTHOUSANDSOF$) Total inventories at lowerof Amounts owingto Consumable stores andstocks Balance at 31March Aircraft andcomponentspares Provision utilisedduringtheyear Charge toprofit orloss,net Amounts owingby Balance at 1April – Others Joint venture/associated – Joint – Subsidiaries Fellow subsidiaries – Fellow – Others Joint venture/associated – Joint – Subsidiaries Fellow subsidiaries – Fellow cost andnetrealisable value related parties related parties companies companies 29,429 carrying carrying amount 35,564 53,505 43,205 Gross (9,237) (2,349) (6,334) 6,135 1,315 8,985 2019 (554) – – 31 March the balance amounts offset in 1 April2017 The Group The Group 34,198 28,730 Gross (4,754) (4,754) sheet 5,468 2018 – – – – – – – – the balance amounts in 22,857 21,030 1 April 37,323 48,751 31,142 38,451 (2,149) (9,237) (2,349) (6,334) sheet 3,976 6,181 1,315 8,985 2019 2017 (554) Net The Group – – 31 March carrying carrying amount (26,748) (17,542) 23,265 23,140 21,030 22,292 55,341 42,495 (4,056) Gross (2,318) (6,334) 2,794 1,315 8,816 2,715 2018 2019 (554) 125 31 March the balance The Company The Company amounts offset in 1 April2017 22,201 20,581 24,516 24,011 (1,759) Gross (5,728) (4,754) sheet 3,379 2019 2018 (974) 558 558 505 The Company – – – – – 31 March the balance amounts in (26,190) (16,984) 1 April 20,581 22,113 26,984 49,613 26,655 37,741 (4,272) (2,318) (6,334) sheet 2,740 1,315 8,816 1,741 2018 2017 (554) Net 329 175 ANNUAL REPORT 2018/19 176 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 28. 27. 26. holding company, onbehalfof theGroup andtheCompany. $48,224,000 for theGroup andtheCompany. Thesecontractswere entered intobythe Company’simmediate The contract/notionalamounts of the forward currency contractsasat 31March 2017were approximately Group andtheCompanyin2017. Included intradeandothercreditors are fairvaluechangeof forward contractsof approximately $641,000for the These amountsare non-interest bearing. (2018: 21%;1April2017:12%)for theCompany. denominated inUnitedStates Dollarsamountedto21%(2018:22%;1April2017:13%)for theGroup and18% As at 31March 2019,short-termdepositsincurrencies otherthantheGroup’s functionalcurrencies which were 1 to12months(2017/18:months;April2017: months). to 1.5%)perannumandcanbewithdrawnondemand.Theinterest rates are repriced at varyingperiodsrangingfrom of theGroup. Thesedepositsearninterest rangingfrom 0.33%to3.30%(2017/18:0.1% to2.28%;1April2017:0.01% holding companyandexternalfinancialinstitutions for varyingperiodsdependingontheimmediate cash requirements The surplusfunds of theGroup’s working capital requirements are placedinshort-termdepositswiththe immediate (2018: 65%;1April2017:45%)for theCompany. were denominated in United States Dollars amounted to 55% (2018: 44%;1April 2017: 37%) for theGroup and81% As at 31March 2019,cashandbankbalancesincurrencies otherthantheGroup’s functionalcurrencies which ranging from 0.0% to1.0%(2017/18:0.0%0.33%;1April2017:0.33%)perannum. These balances are placedin current accounts earning interest at floating rates basedondailybankdepositrates TRADE ANDOTHERCREDITORS (INTHOUSANDSOF$) CASH ANDBANKBALANCES SHORT-TERM DEPOSITS(INTHOUSANDSOF$) Provision for warrantyclaims Fixed depositsplacedwith Accruals Deposits placedwiththe Trade banks immediate holdingcompany 186,038 465,762 150,177 434,461 31,301 33,128 2,733 2019 2019 31 March 31 March The Group The Group 189,919 433,650 162,496 414,895 18,755 25,693 1,730 2018 2018 211,929 531,199 191,482 516,636 1 April 1 April 14,563 19,498 2017 2017 949 149,431 435,971 129,537 434,461 18,640 1,254 1,510 2019 2019 31 March 31 March The Company The Company 141,781 416,402 136,011 414,895 1,507 5,389 2018 2018 381 172,806 518,141 167,319 516,636 1 April 1 April 1,505 4,538 2017 2017 949 28. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 29. quarterly. Thisloanisrepayable by29April2022. bears interest at an average floating rate of 4.26%perannum(2018:3.17%;1April2017:2.09%annum), re-priced The long-term bank loan denominated in United States dollarstaken by a subsidiary company is unsecured and annum). Thecurrent revolving credit facilities shallberepayable within12monthsafter thereporting date. bears fixed interest rangingfrom 4.00%to4.06%perannum(2018:2.75%3.15%;1April 2017:2.50%to2.75%per The revolving credit facilitiesdenominated inUnitedStates dollarstaken byasubsidiarycompanyare unsecured and An analysisof theprovision for warrantyclaimsisasfollows: 1 April2017:9%)for theCompany. denominated inUnitedStates Dollars amounted to 8%(2018: 6%; 1April2017:7%)for theGroup and9%(2018:8%; As at 31March 2019,tradeandothercreditors incurrencies otherthantheGroup’s functionalcurrencies whichwere TRADE ANDOTHERCREDITORS (INTHOUSANDSOF$)(continued) BANK LOANS (INTHOUSANDSOF$) Balance at 31March Provision utilisedduringtheyear Charge/(Write-back) toprofit orloss,net Revolving credit facilities Balance at 1April Long-term bankloan Non-current liability Current portion of long-termbankloan Current liabilities 2,733 1,179 1,730 2019 (176) The Group 31 March 12,561 6,727 1,423 5,304 1,730 1,294 2019 2018 (513) 949 31 March The Group 17,297 1,254 4,620 1,377 3,243 2018 2019 (110) 983 381 The Company 31 March 1 April 21,876 4,083 3,454 2017 2018 (401) (167) 381 629 949 177 ANNUAL REPORT 2018/19 178 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 30. flows willbe,classifiedinthe Group’s consolidated statement ofcashflowsas fromfinancingactivities. non-cash changes.Liabilitiesarisingfrom financingactivitiesare those for whichcashflowswere, orfuture cash The table below details changes in the Group’s liabilities arising from financing activities, including both cash and Reconciliation ofmovementsliabilitiestocashflowsarisingfromfinancingactivities CASH FLOW FROM OPERATING ACTIVITIES (INTHOUSANDSOF$) Bank loans Long-term bankloan Bank loans Long-term bankloan Adjustments for: Operating profitbeforeworkingcapitalchanges

Cash generated fromoperations Profit beforetaxation Net cashprovidedbyoperating activities Surplus ondisposalof property, plantandequipment Share of profits of associated andjointventure companies,net of tax Impairment of property, plantandequipment Amortisation of intangibleassets Depreciation of property, plantandequipment Interest onexternalborrowings Interest income (Increase)/Decrease indebtors Share-based compensation expense Exchange differences Surplus ondilutionof shareholding inanassociated company Loss/(Surplus) ondisposalof anassociated company Surplus ondisposalof asubsidiarycompany (Increase)/Decrease ininventories Decrease/(Increase) incontractassets Income taxes paid Decrease/(Increase) inamountsowingbyrelated parties,net (Increase)/Decrease inamountsowingbyimmediate holdingcompany Increase/(Decrease) incontractliabilities Increase/(Decrease) increditors 21,917 17,297 25,959 21,876 1 April 1 April 4,620 4,083 2017 2018 Proceeds Proceeds 5,763 5,763 3,694 3,694 – – Repayments Repayments (9,113) (3,758) (5,355) (6,097) (2,770) (3,327) payments payments Interest Interest (938) (875) (772) (682) (63) (90) expense expense Non-cash changes Non-cash changes Interest Interest 938 875 772 682 63 90 (113,868) 2018/19 179,063 115,579 (21,211) (48,457) movement movement 49,459 11,748 96,559 11,524 13,798 75,348 (1,080) (8,080) (7,357) (1,475) exchange exchange 3,997 4,280 1,091 1,199 (309) Foreign Foreign 938 88 (1,639) (1,252) – – The Group (387) 721 102 619 31 March 31 March (109,818) 2017/18 209,589 144,999 (15,000) (86,463) (19,137) (21,633) 48,470 36,810 73,530 54,393 19,288 12,561 (4,860) (5,923) (1,977) 21,917 17,297 5,429 3,546 2,203 6,518 4,592 3,125 6,727 4,620 2018 2019 (980) (870) 772 – 31. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (b) (a) CAPITAL ANDOTHERCOMMITMENTS Future leasepaymentsundernon-cancellableoperating leasesare asfollows: placed upontheGroup ortheCompanybytheseleasearrangements. buildings. These non-cancellableleases have lease terms of between1and50years.There are norestrictions The Group hasentered intooperating leaseagreements for certainequipmentandleaseholdland Operating leasecommitments(inthousandsof$) totalled approximately $6,163,000 (2018:$6,089,000). In addition,theGroup’s share of ajointventure company’s purchase commitmentsfor capitalexpenditure (2018: $42,966,000; 1April2017:$35,615,000) for theCompany. approximately $59,303,000 (2018:$57,911,000; 1April2017:$59,916,000) for theGroup and$50,399,000 The Group and the Company have commitments for capital expenditure, with an aggregate value of Capital expenditurecommitments Within oneyear After oneyearbutlessthanfiveyears More than fiveyears 15,450 28,004 47,565 91,019 2019 31 March The Group 17,235 25,309 47,580 90,124 2018 15,338 24,863 46,719 86,920 1 April 2017 179 ANNUAL REPORT 2018/19 180

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 32. (a) FINANCIAL INSTRUMENTS (INTHOUSANDSOF$) to whichtheyare assigned,andtherefore bythemeasurement basis: table analysesthefinancialassetsandliabilitiesinbalancesheetbyclassof financialinstrument measured, andhowincomeexpenses,includingfairvaluegainslosses,are recognised. Thefollowing cost. TheprincipalaccountingpoliciesinNote2describehowtheclassesof financialinstrumentsare Financial assetsandfinancialliabilitiesare measured onanon-goingbasiseitherat fairvalueorat amortised Classification offinancialinstruments 31 March2019 The Group Total assets Total non-financialassets Total financialassets Cash andbankbalances Short-term deposits Amounts owingbyrelated parties Immediate holdingcompany Other debtors Contract assets Trade debtors Assets Total liabilities Total non-financial liabilities Total financialliabilities Bank loans Amounts owingtorelated parties Contract liabilities Trade andothercreditors Liabilities Long-term bankloan amortised Financial assets at 8,563 918,076 465,762 183,919 55,813 30,751 92,040 81,228 cost – – – – – – Derivatives hedging at fair value used for 159 159 – – – – – – – – – – – – liabilities at amortised Financial 239,609 186,038 12,561 33,499 6,727 cost 784 – – – – – – – – 239,609 12,561 33,499 1,845,275 41,637 918,235 465,762 183,919 927,040 281,246 186,038 6,727 784 55,813 30,751 92,040 81,228 8,722 Total 32. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (a) FINANCIAL INSTRUMENTS (INTHOUSANDSOF$)(continued) Classification offinancialinstruments(continued) 31 March2018 The Group Trade andothercreditors Liabilities Amounts owingtorelated parties Contract liabilities Total financialliabilities Long-term bankloan Bank loans Total liabilities Total non-financialliabilities Contract assets Trade debtors Assets Total assets Total non-financialassets Total financialassets Cash andbankbalances Short-term deposits Amounts owingbyrelated parties Immediate holdingcompany Other debtors amortised Financial assets at 195,667 859,977 433,650 70,948 66,129 41,901 41,992 9,690 cost – – – – – – Derivatives hedging at fair value used for 461 461 – – – – – – – – – – – – liabilities at amortised Financial 189,919 244,546 32,300 17,297 4,620 cost 410 – – – – – – – – 1,803,882 189,919 244,546 288,937 195,667 943,444 860,438 433,650 32,300 17,297 44,391 70,948 66,129 41,901 41,992 10,151 4,620 Total 410 181 ANNUAL REPORT 2018/19 182 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 32. (a) FINANCIAL INSTRUMENTS (INTHOUSANDSOF$)(continued) Classification offinancialinstruments(continued) 31 March2019 The Company Total assets Total non-financialassets Total financialassets Cash andbankbalances Short-term deposits Amounts owingbyrelated parties Immediate holdingcompany Other debtors Contract assets Trade debtors Assets 31 March2018 Total liabilities Total non-financialliabilities Total financialliabilities Amounts owingtorelated parties Contract liabilities Trade andothercreditors Liabilities Total financialliabilities Amounts owingtorelated parties Short-term deposits Amounts owingbyrelated parties Immediate holdingcompany Contract assets Trade debtors Assets Total liabilities Total non-financialliabilities Contract liabilities Trade andothercreditors Liabilities Total financialassets Cash andbankbalances Other debtors Total assets Total non-financial assets amortised Financial assets at 834,411 435,971 165,479 416,402 180,914 787,006 31,365 44,532 91,305 59,503 48,981 40,562 52,653 39,829 6,256 7,665 cost – – – – – – – – Derivatives hedging at fair value used for 159 159 461 461 – – – – – – – – – – – – – – – – – – – – liabilities at amortised Financial 192,911 149,431 193,347 141,781 10,138 33,342 19,396 32,170 cost – – – – – – – – – – – – – – – – 1,511,622 1,466,813 834,570 435,971 165,479 677,052 231,628 192,911 149,431 234,472 193,347 141,781 416,402 180,914 787,467 679,346 31,365 44,532 91,305 59,503 38,717 10,138 33,342 48,981 40,562 52,653 19,396 32,170 41,125 39,829 6,415 8,126 Total 32. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (b) FINANCIAL INSTRUMENTS (INTHOUSANDSOF$)(continued) of thereporting period: The following tableshowsananalysisof eachclassof assetsandliabilitiesmeasured at fairvalueat theend level of thefairvaluehierarchy asthelowestlevelinputthat issignificanttotheentire measurement. Fair valuemeasurements that useinputsof different hierarchy levelsare categorised initsentirety inthesame inputs usedasfollows: The Group categorises fairvaluemeasurements usingafairvaluehierarchy that isdependentonthevaluation Fair valuehierarchy Financial instrumentscarriedat fairvalue sale. between knowledgeableandwillingpartiesinanarm’slengthtransaction,otherthanaforced orliquidation The fairvalueof afinancialinstrument istheamount at whichtheinstrumentcouldbeexchanged orsettled Fair values • • • Derivative financialinstruments Financial asset Recurring fairvaluemeasurements Currency hedgingcontracts Level 3: Level 2: Level 1: inputs). inputs for theassetorliabilitythat are notbasedonobservablemarket data (unobservable liability, eitherdirectly (i.e.asprices)orindirectly (i.e.derivedfrom prices). inputs otherthanquotedpricesincludedwithinLevel1that are observablefor theassetor quoted prices(unadjusted)inactivemarkets for identicalassetsorliabilities. Quoted prices instruments markets for identical in active (Level 1) – – The GroupandtheCompany inputs, other than quoted observable observable Significant (Level 2) 31 March2019 other price 159 159 unobservable unobservable Significant (Level 3) inputs – – Total 159 159 183 ANNUAL REPORT 2018/19 184 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 33. 32.

(b) performance byacounterparty isconsidered to beunlikely. time, andnottheprincipalamount hedged.Therefore the possibilityof material lossarisingintheeventof non- flows beinghedged.Moreover, counterparty credit riskisgenerally restricted toanyhedginggainfrom timeto gains andlossesonthederivatives offset lossesandgainsonthematching asset,liability, andexpectedfuture cash As derivatives are used for the purpose of risk management, they do not expose the Group to market risk because Group’s policypermitstheuseof derivatives tohedgespecificexposures. The Group’s riskmanagementapproach istomoderate theeffects of suchvolatility onitsfinancialperformance. The operations carrycertainfinancialrisks, includingtheeffects ofchangesin foreign exchange rates andinterest rates. has investmentsinsubsidiary, associated and jointventure companies that operate insevencountries.TheGroup’s The Group operates principallyinSingapore andgenerates revenue mainlyinSingapore dollars.TheGroup also FINANCIAL RISK MANAGEMENT OBJECTIVES ANDPOLICIES(INTHOUSANDSOF$) FINANCIAL INSTRUMENTS (INTHOUSANDSOF$)(continued) rate loans that re-price tomarket interest rate quarterly. The carryingamountof thelong-termloanisreasonable approximations of fairvalueastheloans are floating debtors andcreditors. owing by/torelated parties,immediate holdingcompany, loans, contractassetsandliabilities,tradeother of theirfairvaluesduetoshort-termnature: cashandbankbalances,short-termdeposits,amounts The carrying amounts of the following financial assets andfinancialliabilities are reasonableapproximations amountsarereasonableapproximation offairvalue Financial instrumentswhosecarrying contracts withsimilarmaturity profiles. The fair value of forward currency contracts is determined by reference to current forward exchange rates for The Group andCompanyhave carriedallderivative instrumentsat theirfairvalues. Level 2fairvaluemeasurements Financial instrumentscarriedat fairvalue(continued) Fair values(continued) Recurring fairvaluemeasurements Derivative financialinstruments Financial asset Currency hedgingcontracts instruments markets for identical in active (Level 1) Quoted prices – – inputs, other than quoted observable observable Significant The GroupandtheCompany (Level 2) other price 461 461 31 March2018 unobservable unobservable Significant (Level 3) inputs – – Total 461 461 33. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (a) financial risks. The AuditCommitteeprovides oversighttotheworkof theGroup RiskManagementCommitteeinrespect of FINANCIAL RISK MANAGEMENT OBJECTIVESANDPOLICIES(INTHOUSANDSOF$)(continued) determination of profit orloss inthenextfinancialyear, andinthecaseof ajointventure, inthenext3years. The cashflowsarisingfrom theforeign currency contractsare expectedtooccurandenter into the reserve inrespect of these contracts. with arelated deferred taxasset $276,000 (2018:deferred taxassetof $72,000), were includedinfairvalue 31 March 2019, anetfairvaluelossbefore taxof $1,626,000 (2017/18:netfairvaluelossbefore taxof $421,000) probable USDcapitalinjectionsinanassociated companywere assessedtobehighlyeffective andat The cash flow hedges of the expected inflows and outflows in USD in the next 12 months and the highly pertain toUSDcapitalinjectionsinanassociated company. deposits tohedgeagainstforeign currency riskonhighlyprobable forecast transactions.Thesetransactions the forecast netcash generation of USDinthenext12months.TheCompanysetsasideshort-term The Companyentersintoforward currency contractstohedgeagainstforeign currency riskfor aportionof Cash flowhedges does nottake positionsincurrencies withaviewtomake speculative gainsfrom currency movements. company andupto3yearsfor ajointventure. TheGroup usesforward contractspurely asahedgingtool.It forward rates, dependingonforecast requirements, withsettlementdates that rangeuptooneyearfor the foreign exchange exposure. Suchcontractsprovide for theGroup tosellUnitedStates dollarsat predetermined Singapore dollars. The Group also uses forward foreign currency contractstohedge a portionof itsfuture payments in eachindividual currency. Surplusesof convertible currencies are sold,assoon practicable,for The Group managesitsforeign exchange exposure byapolicyof matching, asfarpossible,receipts and (2018: $114,535,000) for theGroup andtheCompanyrespectively. period, suchUSDbalancesamountedtoapproximately $127,526,000 (2018:$124,306,000) and$105,281,000 currencies of theGroup, denominated mainlyinUSD, for workingcapitalpurposes.At theendof thereporting The Group and Companyalsoholdcashandequivalentsinforeign currencies otherthanthefunctional balances at thebalancesheetdate have similarexposures. 20%) and7%of totaloperating expenses(2017/18:9%).TheGroup’s tradereceivable andtradepayable States dollars.Forthefinancialyearended31March 2019, theseaccountedfor 24% of totalrevenue (2017/18: States dollars("USD"). The foreign currencies inwhichthesetransactionsare denominated are mainlyUnited Singapore dollars("SGD"),Australian("AUD"), PhilippinePesos("PHP"), JapaneseYen ("JPY") andUnited denominated inacurrency otherthantherespective functionalcurrencies of Group entities,primarily, The Group hastransactionalcurrency exposures arisingfrom operating revenues andexpensesthat are Foreign currencyrisk 185 ANNUAL REPORT 2018/19 186 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 33. (a) (b) FINANCIAL RISK MANAGEMENT OBJECTIVESANDPOLICIES(INTHOUSANDSOF$)(continued) R2 R1 monetary itemsandadjuststheirtranslation at theperiodendfor a1%changeinforeign currency rate. USD withallothervariablesheldconstant.Thesensitivityanalysisincludesonlythecurrency denominated The following tabledetailsthesensitivitytoa1%weakening orstrengthening of SGDexchange rate againstthe effective; hencethere willbenoimpactonprofit before taxation from thecashflowhedges. The foreign currency risksensitivityanalysisisbasedontheassumptionthat allcashflowhedgesare highly Foreign currency sensitivity analysis Foreign currencyrisk(continued) loan. (2018: $120,000)higher/lower, arisingmainlyasaresult of lower/higherinterest expenseonthefloating rate other variablesheldconstant,theGroup’s profit before taxwouldhave beenapproximately $139,000 At the endof thereporting period,ifthefloating rates hadbeen50basispoints lower/higherwithall Interest rate sensitivity analysis long-term bankloanwhichisre-priced quarterly. As at 31March 2019,otherthanthoseshort-termdepositsandborrowings, theGroup hasafloating rate financial liabilities. term depositswiththeimmediate holdingcompanyandbanks andotherinterest-bearing financialassetsand The Group’s exposure tomarket riskfor changesintheinterest rates relates primarilytotheGroup’s short- Interest rate risk Equity Equity Profit before taxation Effect of strengthening of SGDagainstUSD Profit before taxation Effect of weakening of SGDagainstUSD Sensitivity analysisonoutstandingUSDhedgingcontracts. Sensitivity analysisonsignificantoutstandingUSDdenominated monetaryitems. R2 R2 R1 R1 (1,469) 1,469 2019 (474) 474 The Group 31 March (1,352) 1,352 2018 (602) 602 (1,225) 1,225 2019 (474) 474 The Company 31 March (1,216) 1,216 2018 (602) 602 33. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (c) FINANCIAL RISK MANAGEMENT OBJECTIVESANDPOLICIES(INTHOUSANDSOF$)(continued) 31 March 2019. have asignificantimpacttothe credit loss. Noscalarfactorhasbeenapplied for thefinancialyear ended and theGroup’s viewof economicconditions overtheexpectedlivesof thereceivables whenthesefactors Loss rates are basedonactualcredit lossexperience overthepastthree yearsadjustedfor current conditions segments basedoncommoncredit riskcharacteristics. successive stagesof delinquencytowrite-off. Rollrates are calculated separately for exposures indifferent Loss rates are calculated usinga‘roll rate’ methodbasedontheprobability of areceivable progressing through average lossrate isapproximately 2.8% asat 31March 2019. days overdue to about 36.1% for debts more than 90 days overdue as at 31 March 2019. The overall weighted from individualcustomers.Theweightedaverage lossrate rangesfrom about2.1% for debtslessthan30 The Group andCompanyuseanallowancematrix byagebracket tomeasure theECLs of trade receivables Expected credit lossassessmentfor individualcustomers (2018: $41,992,000)duefrom itsimmediate holdingcompany, Singapore AirlinesLimited. the onlytradedebtorexceeding 30%of theGroup’s tradedebtorswasanamountof approximately $92,040,000 balances onanongoingbasis,providing for doubtfulaccountswheneverrisks are identified. At 31March 2019, including bankguaranteesandlettersof credit, from customers.Inaddition,the Group monitorsthereceivable The Group carefully assessesthefinancialstrength of itscustomersandwhere appropriate, obtainscollaterals, of credit riskwithrespect totradedebtorsare limitedtotheentitiescomprisingGroup’s customer base. Trade and other receivables that are neither past due nor impaired are with creditworthy debtors.Concentrations performance bycounterparties. reviewed, andadjustedasnecessary. Thismitigates theriskof material lossarisingintheeventof non- any individualcounterparty, taking into accountitscredit rating. Suchcounterpartyexposures are regularly Counterparty risks are managedbylimitingaggregated exposure onalloutstandingfinancialinstrumentsto Surplus fundsare investedininterest-bearing bank depositsandwithimmediate holdingcompany. as follows: their contractualobligations asat 31March 2019inrelation toeachclassof recognised financialassetsare The Group’s andCompany’smaximumexposure tocredit riskintheeventthat counterparties failtoperform Credit risk Credit andCounterpartyrisk Cash andbankbalances Short-term deposits Amounts owingbyrelated parties Immediate holdingcompany Other debtors Contract assets Trade debtors 918,235 465,762 183,919 55,813 30,751 92,040 81,228 8,722 2019 The Group 31 March 860,438 433,650 195,667 66,129 41,901 41,992 10,151 70,948 2018 834,570 435,971 165,479 31,365 44,532 91,305 59,503 6,415 2019 The Company 31 March 787,467 416,402 180,914 39,829 48,981 40,562 52,653 8,126 2018 187 ANNUAL REPORT 2018/19 188 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 33. (d) (c) FINANCIAL RISK MANAGEMENT OBJECTIVESANDPOLICIES(INTHOUSANDSOF$)(continued) The shortfall,ifany, couldbemetbybankborrowings. operations, are expectedtobesufficientfor workingcapitalpurposesaswellfuture capitalcommitments. The Group’s holdingof cashandshort-termdeposits,togetherwithcredit facilitiesandnetcashflowfrom had available short-termcredit facilitiesof approximately $27,271,000 (2018:$26,667,000). short-term deposits amounting to approximately $521,575,000 (2018: $499,779,000). In addition, the Group and credit facilitiesfrom financialinstitutions.Asat 31March 2019, theGroup hadat itsdisposal,cashand The Group monitors its net operating cash flows and maintains an adequate level of cash and cash equivalents Liquidity risk financial assets of theGroup andtheCompanyas at 31March: counterparties. The table below shows an analysis of credit risk exposure of balances that exceed 5% of the The Group determinesconcentrations of credit riskbymonitoringtheindustry, countryandcredit rating of its Counterparty risk Credit andCounterpartyrisk(continued) By Moody’scredit By region: By industry: Counterparty profiles Non-rated Investment grade West AsiaandAfrica Americas South West Pacific Europe East Asia Others Financial institutions Airlines ratings: (A toAaa) 909,513 826,937 909,513 105,906 772,834 909,513 776,460 82,576 13,184 12,564 45,944 87,109 5,025 2019 Outstanding 31 March balance 851,600 770,775 851,600 730,917 851,600 732,656 80,825 14,535 10,799 90,143 34,066 84,878 5,206 2018 The Group 2019 99% 90% 99% 12% 84% 99% 85% Percentage of total financial 9% 1% 1% 1% 5% 9% 31 March assets 2018 99% 90% 99% 10% 85% 99% 10% 85% 9% 1% 2% 1% 4% 828,155 795,280 828,155 715,218 828,155 758,697 32,875 12,287 97,443 36,583 32,875 1,331 1,876 2019 Outstanding 31 March balance 780,654 739,318 780,654 678,663 780,654 706,196 41,336 89,071 33,122 41,336 4,741 4,761 3,418 2018 The Company 2019 99% 95% 99% 12% 86% 99% 91% Percentage of total financial 4% 1% 0% 0% 4% 4% 31 March assets 2018 99% 94% 99% 11% 86% 99% 90% 5% 1% 1% 0% 4% 5% 33. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (d) FINANCIAL RISK MANAGEMENT OBJECTIVESANDPOLICIES(INTHOUSANDSOF$)(continued) disclosed inthetableare thecontractualundiscountedcashflows,includingestimated interest payments. The maturity profile of thefinancialliabilitiesof theGroup andtheCompanyissetoutbelow. Theamounts Liquidity risk(continued) Total undiscounted Total undiscounted 2018 Long-term bankloan Long-term bankloan Total undiscounted Total undiscounted Bank loans Bank loans Amounts owingto Amounts owingto Amounts owingto Amounts owingto Contract liabilities Contract liabilities Contract liabilities Contract liabilities 2019 The Group Trade andothercreditors Financial liabilities Trade andothercreditors Financial liabilities 2019 The Company Trade andothercreditors Financial liabilities 2018 Trade andothercreditors Financial liabilities related parties related parties financial liabilities financial liabilities financial liabilities financial liabilities related parties related parties 227,603 186,038 192,911 149,431 227,890 193,347 141,781 189,919 33,499 Within 10,138 33,342 19,396 32,170 32,300 1 year 6,733 4,624 549 784 637 410 1-2 years 5,922 5,922 5,625 5,625 – – – – – – – – – – – – – – – – 2-3 years 5,714 5,714 5,708 5,708 – – – – – – – – – – – – – – – – 3-4 years 1,396 1,396 5,522 5,522 – – – – – – – – – – – – – – – – 4-5 years 1,351 1,351 – – – – – – – – – – – – – – – – – – 5 years More than – – – – – – – – – – – – – – – – – – – – 240,635 186,038 192,911 149,431 246,096 193,347 141,781 189,919 13,581 33,499 10,138 33,342 18,843 19,396 32,170 32,300 6,733 4,624 Total 784 410 189

ANNUAL REPORT 2018/19 190

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 34. 31 March 2019 and31March 2018andcertainassetsinformation of theoperating segmentsasat thosedates. following tablespresent revenue andprofit information regarding operating segments for thefinancialyearsended The Group’s businesses are organised and managed separately according to the nature of the services provided. The Transfer pricesbetweenoperating segmentsare onagreed termsbetweenthe operating segments. Segment liabilitiesare notavailable astheinformation isnotusedbymanagementtomake operating decisions. or lossintheconsolidated financialstatements. profit orlosswhich,incertain respects, asexplainedinthetablebelow, ismeasured differently from operating profit about resource allocation andperformance assessment.Segmentperformance isevaluated basedonoperating Management monitorstheoperating results of itsbusinessunitsseparately for the purposeof makingdecisions All otherunallocated itemswillbedisclosedintheconsolidated financialstatements. segments. Except asindicated above,nooperating segmentshave beenaggregated toform theabovereportable operating • • and hasthereportable operating segmentsasfollows: For managementpurposes,theGroup isorganised intobusinessunitsbasedonthenature of theservicesprovided SEGMENT INFORMATION (INTHOUSANDSOF$) The engineand component segment provides component overhaulandenginerepair andoverhaul services. airlines. comprehensive engineeringandMROsolutionsthat canbecustomisedtoprovide maintenancesupportto fleet technicalmanagementandinventoryservices,whichincludetheprovision of aircraft ground supportequipment and rectification work.Fleetmanagementprogramme encompasses certification andtechnicalground handlingservicessuchaspush-backandtowing,theprovision of and non-routine maintenance,modification andrefurbishment programs. Linemaintenance provides aircraft management programme. Theseservicesincludescheduledroutine maintenanceandoverhaul,specialised The airframe and line maintenance segment provides airframe maintenance,line maintenance, andfleet 34. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS SEGMENT INFORMATION (INTHOUSANDSOF$)(continued) Total assets Other unallocated assets Prepayments Investment inassociated/ Profit for thefinancialyear Taxation expense Loss ondisposalof an Interest income Intangible assets Amortisation of intangible Profit before taxation Other unallocated amounts Share of profits of jointventure Share of profits of associated Surplus ondisposalof a Segment results RESULTS Inter-segment revenue Property, plantandequipment Segment assets Depreciation of property, Other segmentitems External revenue TOTAL REVENUE 2018/19 Operating Segments joint venture companies associated company assets company, netof tax companies, netof tax subsidiary company plant andequipment

Notes (b) (c) (a) maintenance Airframe and line 316,197 254,412 991,430 991,430 50,145 11,640 59,772 48,305 (1,452) 2,045 – – – component Engine and 564,141 508,907 13,833 35,007 74,954 40,366 32,506 29,466 (3,020) 1,952 6,394 1,154 3,040 segments 1,023,936 1,020,896 880,338 559,052 260,806 13,833 46,647 73,502 56,752 40,366 49,459 3,997 3,040 Total Consolidation elimination (3,040) (3,040) – – – – – – – – – – – consolidated statements 1,845,275 1,020,896 1,020,896 financial 964,937 559,052 160,955 179,063 260,806 (18,108) 13,833 46,647 73,502 56,752 40,366 49,459 3,997 8,080 142 309 Per (88) – 191 ANNUAL REPORT 2018/19 192 SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 34. SEGMENT INFORMATION (INTHOUSANDSOF$)(continued) Profit for thefinancialyear Taxation expense Profit before taxation Other unallocated amounts Share of profits of jointventure Total assets Surplus ondisposalof an Interest income Share of profits of associated Surplus ondilutionof Other unallocated assets Segment results RESULTS Investment inassociated/joint Impairment of property, plant Inter-segment revenue Intangible assets Amortisation of intangible External revenue TOTAL REVENUE Property, plantandequipment Segment assets Depreciation of property, plant Other segmentitems 2017/18 Operating Segments(continued) company, netof tax associated company companies, netof tax company shareholding inassociated venture companies and equipment assets and equipment Notes (b) (c) (a) maintenance 1,067,168 1,067,168 Airframe 343,583 281,730 and line 81,915 52,617 47,424 3,546 9,236 2,038 (34) – – component Engine and 556,066 491,696 40,284 69,568 31,119 58,462 27,713 (3,082) 3,406 3,391 5,908 1,046 – 1,098,287 1,094,881 segments 899,649 544,313 287,638 40,284 69,534 78,833 67,698 48,470 3,546 3,406 5,429 Total Consolidation elimination (3,406) (3,406) – – – – – – – – – – – consolidated statements 1,803,882 1,094,881 1,094,881 financial 188,022 209,589 904,233 544,313 287,638 (21,567) 40,284 69,534 78,833 15,000 67,698 48,470 4,860 3,546 5,429 208 870 Per – 34. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS sales byairframe andlinemaintenancesegment. Revenue from onemajor customeramountedtoapproximately $424,143,000 (2017/18:$414,453,000), arisingfrom Major customers sheet. investments inassociated andjointventure companies andprepayments aspresented intheconsolidated balance Non-current assetsinformation presented aboveconsistsof property, plantandequipment,intangibleassets, Singapore. Theremaining non-current assetslocated inothercountrieswere individuallyinsignificant. As at 31March 2019, non-current assetsof approximately $773,444,000 (2018:$794,014,000) were located in from customersinothercountrieswere individuallyinsignificant. (2017/18: $188,703,000) were from customerslocated inSingapore andFrance respectively. Theremaining revenue For the year ended31March 2019, revenue of approximately $583,588,000 (2017/18:$662,967,000) and$191,154,000 (c) are asfollows: Revenue andnon-current assetsinformation basedongeographicallocation of customersandassetsrespectively Geographical segments (b) (a) Notes: SEGMENT INFORMATION (INTHOUSANDSOF$)(continued) Total West AsiaandAfrica Americas South West Pacific Europe East Asia sheet: The following itemsare added tosegmentassetsarriveat totalassetsreported intheconsolidated balance consolidated incomestatement: The following items are deducted from segment results to arrive at profit before taxation presented in the Inter-segment revenues are eliminated onconsolidation. Surplus ondisposalof property, plantandequipment Interest onexternalborrowings Current assets 1,020,896 2018/19 216,617 713,582 29,464 22,013 39,220 Revenue 1,094,881 2017/18 203,287 800,612 24,820 27,637 38,525 880,338 844,820 964,937 35,518 1,080 Non-current assets 2019 2019 2019 (938) 142 – – – 31 March 31 March 31 March 899,649 839,526 904,233 59,004 1,119 2018 2018 2018 (772) 980 208 – – 193 ANNUAL REPORT 2018/19 194

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 36. 35. Capital for theGroup andCompanyistabulated below: Neither theCompanynoranyof itssubsidiariesare subjecttoexternallyimposedcapitalrequirements. Company’s capitalstructure duringtheyearsended31March 2019and31March 2018. No significantchangeswere madeintheobjectives,policiesorprocesses relating tothemanagement of the approximately $134,293,000(2017/18:$201,491,000). During thefinancialyearended31March 2019,theCompanymadeatotaldividendpaymenttoshareholders of business strategies andfuture commitments. The Directors regularly review the Company’s capital structure andmake adjustmentsto reflect economicconditions, the effect of unforeseen events on cashflows.Capitalcomprisesshare capitalandaccumulated profits. base whileretaining financialflexibilitytopursuebusinessopportunitiesandadequate accesstoliquiditymitigate The primaryobjectiveof themanagementof theCompany’scapitalstructure istomaintainanappropriate capital during thefinancialyear: related partytransactionsbetweentheGroup andrelated parties took placeat termsagreed betweentheparties In additiontotherelated partyinformation disclosedelsewhere inthe financialstatements, the following significant Company. Executive VicePresident andSeniorVicePresidents of theCompanytobekey management personnelof the directing andcontrolling theactivitiesof theCompany. TheGroup considerstheDirectors, ChiefExecutive Officer, Key managementpersonnelof theCompanyare thosepersonshaving theauthority andresponsibility for planning, may beindividualsorotherentities. operating decisions,orviceversa,where theGroup andthepartyare subjecttocommoncontrol. Related parties ability, directly orindirectly, tocontrol thepartyorexercise significantinfluence overthepartyinmakingfinancialand For thepurposesof thesefinancialstatements, partiesare considered tobe related totheGroup iftheGroup hasthe RELATED PARTY TRANSACTIONS (INTHOUSANDSOF$) RELATED PARTY CAPITAL MANAGEMENT (INTHOUSANDSOF$) Capital andtotaldebt Reserves Total capital:

Total debt: Share capital Long-term bankloan Bank loans 1,547,893 1,528,605 1,108,561 420,044 19,288 12,561 6,727 2019 31 March 1,505,600 1,483,683 1,063,639 The Group 420,044 21,917 17,297 4,620 2018 1,565,789 1,539,830 1,119,786 420,044 1 April 25,959 21,876 4,083 2017 1,279,994 1,279,994 859,950 420,044 2019 – – – 31 March 1,232,341 1,232,341 The Company 812,297 420,044 2018 – – – 1,254,340 1,254,340 834,296 420,044 1 April 2017 – – – 36. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS Directors’ andkey executives’ remuneration of theCompany Compensation ofkey managementpersonnel Sale andpurchaseofgoodsservices RELATED PARTY TRANSACTIONS (INTHOUSANDSOF$)(continued) RELATED PARTY Rental of office spacecharged totheimmediate holdingcompany Equipment fee charged totheimmediate holdingcompany Services rendered by: Interest income from theimmediate holdingcompany Purchases of goodsfrom: Share-based compensation expense Purchases of materials from theimmediate holdingcompanyandfellow CPF andotherdefinedcontributions Rental of hangars,workshops andoffice spacecharged bytheimmediate holding Directors’ fees Directors Sales of servicesandrelated materials to: Income Salary, bonuses andothercosts Key executives Management fees charged bytheimmediate holdingcompanyfor corporate, Expense – – others – – others – – – – subsidiaries company leases general andadministrative, technicalandinsuranceservicesequipment the immediate holdingcompany joint venture company associated companies joint venture company associated companies the immediate holdingcompanyandfellow subsidiaries 2018/19 2018/19 535,193 24,288 21,375 12,622 88,051 28,539 18,360 9,472 7,583 7,771 1,624 1,176 4,420 9,536 291 477 112 The Company 81 The Group 2017/18 2017/18 125,430 613,936 11,002 22,754 19,302 13,867 18,151 4,570 8,605 6,982 1,325 5,061 9,384 291 132 848 81 99 195

ANNUAL REPORT 2018/19 196

SIA ENGINEERING COMPANY 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS 36. (b) (a) The detailsof RSPandPSPgrantedtokey executives of theCompanyare asfollows: Compensation ofkey managementpersonnel(continued) RELATED PARTY TRANSACTIONS (INTHOUSANDSOF$)(continued) RELATED PARTY RSP FinalAwards (PendingRelease) * ^ RSP BaseAwards Ng LayPheng* Foo Kean Shuh Philip QuekCherHeong Wong Yue Jeen Zarina Piperdi Ivan NeoSeokKok Png KimChiang Ng LayPheng* Foo Kean Shuh Philip QuekCherHeong Wong Yue Jeen Zarina Piperdi Ivan NeoSeokKok Name ofparticipant Png KimChiang Name ofparticipant were inhercapacityasVicePresident, priorto1October 2018.Nobaseaward vestedduringtheyear. Ms NgLayPhengwasappointedasSeniorVicePresident on1October2018.Thebaseawards grantedduringthefinancialyear vested duringthefinancialyear. Final Awards grantedduringthefinancialyearare determinedbyapplyingtheachievementfactortoBaseAwards that have Balance Balance 108,135 62,704 18,744 20,834 21,608 22,132 1 April 1 April 20,250 17,921 20,149 18,630 41,715 2018 2018 as at as at (a) (a) – – – Final Awards during the during the financial financial granted granted 162,203 118,400 Awards 30,375 26,882 30,224 27,945 62,573 12,300 17,000 16,600 17,500 17,500 42,400 Base year year^ (b) (b) – Final Awards during the during the financial financial released 108,135 Awards 86,097 10,100 18,848 21,153 20,581 32,705 vested 20,250 17,921 20,149 18,630 41,715 Base year year (c) (c) – – employment employment March 2019/ = (a)+(b)–(c) = (a)+(b)–(c) cessation of cessation of at 31March Balance as Balance 138,810 as at 31 118,400 20,275 26,778 29,905 28,972 52,000 12,300 17,000 16,600 17,500 17,500 42,400 2019/ – participant since commencement commencement of financialyear of financialyear ordinary shares ordinary granted since of RSPtoend of RSPtoend under review under review Base Awards released to Aggregate Aggregate 237,765 144,982 156,202 122,595 155,805 216,715 268,319 481,547 10,100 70,084 75,174 12,300 37,250 – 36. 31 MARCH2019 NOTES TO THEFINANCIALSTATEMENTS (c) Compensation ofkey managementpersonnel(continued) RELATED PARTY TRANSACTIONS (INTHOUSANDSOF$)(continued) RELATED PARTY * PSP BaseAwards Ng LayPheng* Foo Kean Shuh Philip QuekCherHeong Wong Yue Jeen Ivan NeoSeokKok Zarina Piperdi Png KimChiang Name ofparticipant were inhercapacityasVicePresident, priorto1October2018.Nobaseaward vestedduringtheyear. Ms NgLayPhengwasappointedasSeniorVicePresident on1October2018.Thebaseawards grantedduringthefinancialyear Balance 153,374 17,719 15,694 35,438 66,470 48,195 1 April 2018 as at (a) – during the financial granted Awards 14,900 14,500 15,300 33,900 15,300 81,400 Base year (b) – during the financial Awards 14,175 14,175 20,331 vested Base year (c) – – – – employment March 2019/ = (a)+(b)–(c) cessation of Balance 214,443 as at 31 32,619 30,194 50,738 86,195 49,320 – Base Awards commence- of financial PSP toend year under Aggregate granted ment of 218,203 187,393 390,526 review 32,619 30,194 50,738 since – participant since commencement of financialyear ordinary shares ordinary of PSPtoend under review released to Aggregate 109,756 115,953 88,418 – – – – 197 ANNUAL REPORT 2018/19 198 SIA ENGINEERING COMPANY 2. ADDITIONAL INFORMATION 1. Required ByTheSingapore Exchange SecuritiesTrading Limited year or, ifnotthensubsisting,entered intosincetheendof theprevious financialyear. Executive Officer, Directors orcontrolling shareholders, which are eitherstillsubsisting attheend ofthefinancial no material contractsentered intobytheCompanyanditssubsidiarycompaniesinvolvinginterests of theChief Except as disclosedaboveandinthefinancialstatements for thefinancialyear ended31March 2019,there were 2. 1. Notes: * as follows: The aggregate valueof allinterested persontransactions(“IPTs”) entered intoduringthefinancialyear2018/19are MATERIAL CONTRACTS INTERESTED PERSONTRANSACTIONS (INTHOUSANDSOF$) Total SATS Ltd SATS Group AETOS Training AcademyPteLtd AJI International PteLtd Non-listed Associates of Temasek Holdings Singapore Airlines Limited Singapore Airlines Group Name ofinterestedperson SilkAir (Singapore) PteLtd TigerairPteLtd NokScoot AirlinesCo.Ltd All theaboveinterested persontransactionswere doneonnormalcommercial terms. of open-endedcontracts,takingintoaccount agreed rates. entire duration of the relevant transactions inthecaseof fixed termcontractsorannual/periodicvaluesof thetransactions in thecase transactions withthesameinterested person.Thetransactionswere basedonactualorestimated valuesof thetransactionsfor the financial periodunderreview, andincludetransactionswhosedurations exceed thefinancialperiodunderreview and/ormultiple All thetransactionssetoutinaboveare basedonrecords from theCompany’sRegisterof Interested PersonTransactions for the Includes principal,interest andservicefees, inrespect of treasury transactionswithSIA. 920 oftheSGXListingManual transactions pursuanttoRule Aggregate valueofallIPTs and transactionslessthan (excluding allmandated $100,000) 3,980 3,980 – – – – – – SGX ListingManual(excluding pursuant toRule920ofthe IPTs conductedundera shareholders’ mandate Aggregate valueofall transactions lessthan $100,000) 1,871,830 1,842,101* 25,700 2,012 1,617 194 206 – QUARTERLY RESULTS OFTHEGROUP 2017/18 2018/19 Earnings (after tax)pershare-basic 2017/18 2018/19 Operating profit 2017/18 2018/19 Expenditure 2017/18 2018/19 Revenue 2017/18 2018/19 Profit attributable toownersoftheparent 2017/18 2018/19 Profit beforetaxation The Group hasadoptedIFRS witheffect from 1April2018.Inaccordance tothe transition requirements, 2017/18comparatives have been restated. (%) (cents) (%) (cents) ($ million) (%) ($ million) (%) ($ million) (%) ($ million) (%) ($ million) (%) ($ million) (%) (%) (%) ($ million) (%) ($ million) ($ million) (%) ($ million) Quarter 247.5 257.7 272.8 254.1 40.9 25.2 3.62 18.0 10.2 25.7 25.2 25.2 40.5 24.6 44.1 3.28 25.0 24.9 24.9 36.7 23.7 23.7 19.6 19.5 18.7 19.7 First Quarter Second 240.0 251.3 254.6 274.7 20.6 23.7 3.40 19.9 11.3 24.9 24.6 23.6 38.0 24.1 43.2 44.5 38.6 3.44 20.7 25.5 20.1 21.2 25.1 25.1 Quarter 240.0 255.9 252.2 271.0 Third 60.9 20.5 2.95 28.0 15.9 24.9 25.1 20.6 33.1 21.4 38.2 4.95 24.8 24.8 24.8 24.8 23.9 29.6 29.6 55.3 18.8 18.8 29.1 Quarter Fourth 236.6 256.0 255.2 276.4 30.6 4.40 34.1 19.4 24.5 25.1 30.6 49.3 29.9 53.6 26.9 30.2 5.02 63.2 56.2 25.2 30.1 30.1 21.2 25.1 1,020.9 1,094.9 1,016.1 100.0 14.38 100.0 100.0 100.0 964.1 100.0 160.9 100.0 179.1 209.5 100.0 100.0 100.0 100.0 100.0 100.0 186.8 16.70 Total 56.8 78.8 78.8 199

ANNUAL REPORT 2018/19 200

SIA ENGINEERING COMPANY FIVE-YEAR FINANCIALSUMMARY OFTHEGROUP Internally generated cashflow Cash flowfrom operations Cash flowstatement ($million) Net assets Total liabilities Current liabilities Non-current liabilities Total assets Current assets Long-term investments Prepayments Joint venture companies Associated companies Intangible assets Property, plantandequipment Total equity Non-controlling interests Equity attributable toownersof theparent General reserve Equity transactionreserve Fair valuereserve Foreign currency translation reserve Share-based compensation reserve Capital reserve Treasury shares Share capital Balance sheet($million) Profit attributable toowners of theparent Profit before tax Share of profits of associated andjointventure Other income Operating profit Expenditure Capital expenditure R2 R1 Notes: * Revenue Income statement ($million) companies, netof tax

restated. The Group hasadoptedIFRSwitheffect from 1April2018. Inaccordance tothetransitionrequirements, 2017/18comparatives have been Amount lessthan$1,000 from disposalof property, plantandequipment. Internally generated cashflowcomprisesgenerated from operations, dividendsfrom associated andjointventure companies,andproceeds R2 2018/19 1,845.2 1,528.6 1,141.7 1,564.0 1,564.0 1,020.9 281.2 965.0 154.7 404.3 179.1 245.5 260.8 420.0 160.9 113.9 964.1 209.0 (18.2) (18.0) 35.7 13.8 46.6 56.8 96.6 35.4 25.0 (4.5) (0.9) 5.6 2.9 8.4 – 2017/18 1,803.9 1,483.7 1,112.8 1,094.9 1,515.0 1,515.0 1,016.1 904.2 288.9 209.5 392.5 420.0 151.9 186.8 109.8 182.9 287.6 247.4 (38.9) 78.8 78.8 41.5 (21.3) 67.7 20.9 73.5 31.3 31.6 (2.4) 2.8 3.6 3.6 7.1 – – R1 2016/17 1,554.0 1,201.5 1,918.3 1,588.0 1,588.0 1,032.1 1,104.1 380.0 330.3 162.0 979.4 355.1 420.0 279.3 332.4 186.6 152.2 216.2 331.6 (68.0) 65.3 72.0 51.0 (15.2) 34.0 96.5 38.3 16.0 (0.6) (2.4) 2.7 – – 2015/16 1,006.1 1,485.5 1,822.1 1,008.3 1,511.9 1,511.9 1,112.7 202.0 344.0 926.3 310.2 104.4 340.9 147.5 256.2 416.5 140.7 176.6 174.4 54.0 63.4 (87.9) 40.9 94.2 26.4 95.7 18.4 0.2 (2.4) (6.1) 3.4 – * 2014/15 1,656.6 1,324.9 1,036.6 1,349.6 1,349.6 1,120.6 992.3 205.4 307.0 136.2 772.5 327.7 232.0 256.5 106.3 344.1 183.3 410.7 119.4 84.0 61.5 (14.2) 14.6 14.6 (81.7) 50.5 20.2 49.5 24.7 15.1 (2.4) – – – FIVE-YEAR FINANCIALSUMMARY OFTHEGROUP Earnings after tax–basic Per sharedata (cents) Average numberof employees Revenue peremployee($) Value addedperemployee($) Value added($million) Productivity andemployeedata Total dividends Return onturnover Final dividend–ordinary Final dividend–special Return ontotalassets Return onequityholders'funds Profitability ratios (%) Interim dividend Gross dividends(centspershare) Net assetvalue Earnings after tax–diluted R4 R3 Notes: # R5 R6 

owners of theparent. Return on equityholders’funds is the profit attributable to owners of the parent expressed asa percentage of the average equity attributable to proposed ordinary shares inissueexcluding treasury shares. Earnings after taxpershare (basic) iscomputedbydividingtheprofit attributable toowners of theparent bytheweighted average number of excluding treasury shares at 31March. Net assetvaluepershare iscomputedbydividingtheequityattributable toownersof theparent bythenumberof ordinary shares inissue performance shares andrestricted shares grantedtoemployees. of ordinary shares inissueexcluding treasury shares, after adjustingfor thedilutiveeffect ontheexercise of alloutstandingshare options, Earnings after taxpershare (diluted) iscomputedbydividingtheprofit attributable toowners of theparent bytheweighted average number R6 R4 R5 R3 153,657 108,698 2018/19 6,644 722.2 136.6 14.35 14.38 11.0 15.8 10.7 8.0 3.0 8.7 – #

167,208 116,395 2017/18 6,548 762.1 132.7 16.66 16.70 13.0 17.1 10.4 12.4 4.0 9.0 – 174,430 145,504 2016/17 6,330 921.0 138.8 29.57 29.63 18.0 30.1 17.3 21.9 5.0 4.0 9.0 179,810 114,589 2015/16 6,188 709.1 132.4 15.70 15.74 14.0 15.9 12.6 6.0 8.0 9.7 – 177,449 114,841 2014/15 6,315 725.2 118.1 16.28 16.36 14.5 16.4 11.1 13.6 6.0 8.5 – 201

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SIA ENGINEERING COMPANY * SIA ENGINEERING COMPANY LIMITED AS AT 31MARCH2019 GROUP CORPORATE STRUCTURE 40% 49% 49% 49% 51% 65% 65% 100% 100% 100% 100% Operations of International Aerospace Tubes-Asia Pte.Ltd. have beenintegrated intoComponentAerospace Singapore Pte.Ltd.. Airframe andlinemaintenance Pan AsiaPacific Aviation ServicesLimited Boeing AsiaPacific Aviation ServicesPte. Ltd. Southern AirportsAircraft MaintenanceServices PT JasAero-Engineering Services Aviation Partnership(Philippines)Corporation Heavy Maintenance Singapore Services Pte. Ltd. SIA Engineering(Philippines)Corporation (previously knownasSingapore JamcoServices Singapore Aero Support ServicesPte.Ltd. SIAEC GlobalPrivate Limited SIA Engineering(USA),Inc. SIA EngineeringJapanCorporation Company Limited Private Limited) Joint Venture Company Associated Companies Subsidiary Companies Subsidiary 24.5% 33.3% 39.2% 40% 40% 40% 42.5% 45% 46.4% 49% 49% 49% 50% 51% 60% 100% 100% Turbine Coating ServicesPteLtd International Aerospace Tubes-Asia Pte.Ltd.* Asian SurfaceTechnologies PteLtd Safran LandingSystems ServicesSingapore Goodrich Aerostructures ServiceCenter–Asia Safran Electronics & Defense Services Asia Panasonic Avionics ServicesSingapore Pte.Ltd. JAMCO Aero Design&EngineeringPrivate Limited Component Aerospace Singapore Pte.Ltd.* Moog Aircraft ServicesAsiaPte.Ltd. Fuel AccessoryServiceTechnologies PteLtd Eagle ServicesAsiaPrivate Limited Singapore Aero EngineServicesPrivate Limited Aerospace ComponentEngineeringServices Additive FlightSolutionsPte.Ltd. NexGen Network(2)HoldingPte.Ltd. NexGen Network(1)HoldingPte.Ltd. Engine andcomponent Pte. Ltd. Pte. Ltd. Pte. Ltd. Pte. Limited Total 1,000,001 ANDABOVE 10,001 –1,000,000 1,001 –10,000 100 –1,000 1 –99 No. /Percentage of SubsidiaryHoldings No. /Percentage of Treasury Shares No. of IssuedShares (Excluding Treasury Shares) No. of IssuedShares AS AT 3JUNE2019 SHAREHOLDING STATISTICS Voting Rights(Excluding Treasury Shares) Class of Shares 6 5 4 3 2 1 7 12 11 10 9 8 13 14 20 19 18 17 16 15 No. SHAREHOLDERS LARGEST TWENTY Range ofShareholdings HSBC (SINGAPORE)NOMINEESPTELTD DBSN SERVICESPTELTD RAFFLES NOMINEES(PTE)LIMITED CITIBANK NOMINEESSINGAPOREPTELTD DBS NOMINEES(PRIVATE) LIMITED SINGAPORE AIRLINESLIMITED UNITED OVERSEAS BANKNOMINEES(PRIVATE) LIMITED WONG KETSEONG @WONG KETYIN OCBC SECURITIES PRIVATE LTD PHILLIP SECURITIES PTELTD OCBC NOMINEESSINGAPOREPRIVATE LIMITED UOB KAY HIANPTELTD CHONG CHEWLIM@AHKAU MAYBANK KIMENGSECURITIES PTELTD Total BPSS NOMINEESSINGAPORE(PTE.)LTD. CGS-CIMB SECURITIES (SINGAPORE)PTELTD HENG SIEWENG NG HIANCHOW YIM CHEECHONG DBS VICKERSSECURITIES (SINGAPORE)PTELTD Name (1) No.ofShareholders : : : : : : 5,005,974 (0.45%) 1,119,110,386 1,124,116,360 1votepershare Ordinary shares 0 (0.00%) 10,841 19,872 6,224 2,752 38 17 100.00 54.55 13.85 31.32 0.09 0.19 % No.ofShares No.ofshares 1,119,110,386 870,000,000 976,243,223 974,013,171 33,509,190 47,302,852 91,873,896 32,817,630 3,204,900 1,500,000 3,294,500 1,038,000 1,070,000 3,046,102 4,726,329 6,419,299 1,653,942 1,313,800 1,125,800 5,919,639 5,796,819 2,314,130 1,182,730 869,700 752,949 607,403 828

100.00 87.23 77.74 87.03 0.08 0.08 0.09 0.09 0.29 0.29 0.05 0.05 2.99 0.52 0.07 0.07 2.93 0.42 0.10 0.10 0.27 0.57 0.21 0.12 0.13 0.15 0.00 0.11 0.53 4.23 8.21

% % (2) (2)

203

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SIA ENGINEERING COMPANY SUBSTANTIAL SHAREHOLDERS AS AT 3JUNE2019 SHAREHOLDING STATISTICS Company are held bythepublicandtherefore, Rule 723of theListingManualissuedbySGX-ST iscompliedwith. Based ontheinformation available totheCompanyasof 3June2019,22.18percentof theissuedordinary shares of the SHAREHOLDING HELDBY THEPUBLIC (3) (2) (1) Notes: Substantial Shareholder Temasek Holdings(Private) Limited Singapore AirlinesLimited which itsothersubsidiariesand/orassociated companieshave orare deemedtohave aninterest. Temasek Holdings(Private) Limitedisdeemedtobeinterested in870,000,000shares heldbySingapore AirlinesLimited,andin30,000Shares in 5,005,974 shares heldintreasury asat 3June2019). Based on1,119,110,386ordinary shares issuedasat 3June2019(thisisbasedon1,124,116,360shares issuedas at 3June2019,excluding the Act, Chapter50of Singapore. “Subsidiary holdings” is defined inthe Listing Manual to mean shares referred to in Sections 21(4), 21(4B), 21(6A) and 21(6C) of the Companies (3) 870,000,000 Interest Direct – 77.74 % – (2) 870,030,000 Number ofShares Deemed Interest – (3) 77.74 % – (2) 870,030,000 870,000,000 Interest Total 77.74 77.74 % (2) ** * Notes: AND TURNOVER SHARE PRICE Price/Cash Earnings** Price/Book Value Price/Earnings Market Value Ratios* 31 March closingprice Lowest closingprice Highest closingprice Share Price(S$) P 0 2 1 amortisation of intangibleassets. Cash earningsis defined asprofit attributabletoequityholders of the Companyplusdepreciation of property, plantandequipment Based onclosingprice31March andGroup numbers.Market Value Ratios for FY2017/18have beenadjustedfor adoptionof IFRS. A 18 18 P T 18 18 A 18 L 18 O 18 N 18 18 19 2018/19 19 12.84 17.11 2.46 1.80 3.33 2.21 19 T 0 00 1 1 2 200 00 0 0 0 0 000 2017/18 0 0 0 0 0 0 0 19.04 14.78 3.08 2.40 3.18 4.21 0 1 1 2 2 0 0 0 0 205

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SIA ENGINEERING COMPANY 3. 2. 1. ORDINARY BUSINESS Company Registration No.198201025C (Incorporated intheRepublicof Singapore) SIA ENGINEERINGCOMPANY LIMITED NOTICE OFANNUAL GENERALMEETING 7. SPECIAL BUSINESS

6. 5. 4. 039594 onFriday, 19July2019at 10.00a.m.totransactthefollowing business: be heldat MarinaMandarinBallroom, Level1,MarinaMandarinSingapore, 6Raffles Boulevard, MarinaSquare, Singapore NOTICE ISHEREBY GIVENthat the37 3.1 Constitution of theCompany: Company andwho,beingeligible,offer themselves for re-election asDirectors pursuant toArticle91 of the To re-elect thefollowing Directors whoare retiring byrotation pursuant toArticle90of theConstitutionof the To declare afinalordinary dividend of 8.0centsperordinary share for the financialyearended31March 2019. 31 March 2019andtheAuditors’Reportthereon. To receive andadopttheDirectors’ Statement andAuditedFinancialStatements for thefinancialyearended 7.1 as Ordinary Resolutions: To considerand if thoughtfit, topass, with orwithout modifications, the following resolutionswhichwill be proposed 3.2 3.3 To re-appoint KPMGLLPastheAuditorsof theCompany andtoauthorisetheDirectors tofixtheir remuneration. $1,500,000). To approve theDirectors’ fees of upto$1,500,000for thefinancialyearending31March 2020(FY2018/19:upto Report FY2018/19. and AdditionalInformation onDirectors SeekingRe-electionat theAnnualGeneralMeetingsectionsof theAnnual The profile of MrChincanbefoundinthe Corporate Governance(Further Information onBoard of Directors) being eligible,offers himself for re-election asaDirector. To re-elect Mr Chin Yau Seng who is retiring pursuant to Article 96 of the Constitution of the Company and who, sections of theAnnualReportFY2018/19. on Board of Directors) and Additional Information on Directors Seeking Re-election at the Annual General Meeting The profiles of MrsOng,DrThampuranandMrNgcanbefoundinthe Corporate Governance(Further Information Ms ChristinaHonKwee Fong(MrsChristinaOng) (a) to theDirectors of theCompanyto: That pursuanttoSection161of theCompanies Act, Chapter50of Singapore, authoritybeandishereby given Dr RajThampuran Mr NgChinHwee Directors mayin theirabsolute discretion deemfit;and at anytimeandupon suchtermsandconditions andfor suchpurposesandto suchpersonsasthe (ii) (i) adjustments to)warrants,debentures orotherinstruments convertibleintoshares, require shares tobeissued,includingbutnotlimitedthe creation andissue of (aswellas make orgrantoffers, agreements oroptions(collectively, “Instruments”)that mightorwould issue shares of theCompany(“shares”)whetherbywayof rights,bonus orotherwise;and/or th

Annual GeneralMeetingof SIAEngineering Company Limited(the“”)will NOTICE OFANNUAL GENERALMEETING

7.2 (4) (3) (2) (1) provided that: (b) (1) provided that: (b) (a) That theDirectors of theCompanybeandare hereby authorisedto: whichever istheearlier. the date bywhichthenextAnnualGeneralMeetingof theCompanyisrequired bylawtobeheld, shall continueinforce untiltheconclusionof thenextAnnualGeneralMeetingof theCompanyor (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution waived bytheSGX-ST) andtheConstitutionfor thetimebeingof theCompany;and of theListingManualof theSGX-ST for thetimebeinginforce (unlesssuchcompliancehasbeen in exercising theauthorityconferred bythisResolution,theCompanyshallcomplywithprovisions given toitintheListingManualof theSGX-ST; and, insub-paragraph(1)aboveandthis(2),“subsidiaryholdings”hasthemeaning (ii) (i) is passed,after adjustingfor: number of issuedshares (excluding treasury shares andsubsidiaryholdings)at thetimethisResolution may beissuedundersub­ Trading Limited(the“SGX-ST”)) for thepurposeof determiningtheaggregate numberof shares that (subject tosuchmannerof calculation asmaybeprescribed bytheSingapore Exchange Securities sub-paragraph (2)below); of issuedshares (excluding treasury shares andsubsidiaryholdings)(ascalculated inaccordance with of InstrumentsmadeorgrantedpursuanttothisResolution)doesnotexceed 10%of thetotalnumber than on a accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other the total numberof issued shares (excluding treasury shares andsubsidiaryholdings) (as calculated in in pursuanceof InstrumentsmadeorgrantedpursuanttothisResolution)doesnotexceed 50%of the aggregate numberof shares tobeissuedpursuantthisResolution(includingshares tobeissued force, shares inpursuanceof anyInstrumentmadeorgrantedbytheDirectors whilethisResolutionwasin (notwithstanding theauthorityconferred bythisResolutionmayhave ceasedtobeinforce) issue holdings) from timetotime; not exceed 5% of thetotal number of issued ordinary shares (excluding treasury shares andsubsidiary pursuant tothe SIAEC Performance Share Plan2014 andtheSIAEC RestrictedShare Plan2014, shall and (iii)ordinary shares released and/ortobereleased in the form of cashinlieuof ordinary shares, (ii) existingordinary shares (includingordinary shares heldintreasury) delivered and/or tobedelivered, the aggregate numberof (i)newordinary shares allottedandissuedand/or to beallottedandissued, SIAEC RestrictedShare Plan2014, issued pursuanttothevestingof awards undertheSIAEC Performance Share Plan2014 and/orthe allot andissuefrom timetosuchnumberof fullypaidordinary shares asmayberequired tobe SIAEC RestrictedShare Plan2014; and grant awards in accordance with the provisions of the SIAEC Performance Share Plan 2014 and/or the any subsequentbonusissueorconsolidation orsubdivisionof shares, passed; and or vestingof share awards whichare outstandingorsubsistingat thetimethisResolutionis new shares arising from theconversionorexercise of anyconvertiblesecuritiesorshare options pro rata basis to shareholders of the Company (including shares to be issued in pursuance paragraph (1)above,thepercentage of issuedshares shallbebasedonthetotal 207

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SIA ENGINEERING COMPANY NOTICE OFANNUAL GENERALMEETING 7.3 That: 7.4 That: (c) (b) (a) Exchange SecuritiesTrading Limited. and in this Resolution, “subsidiary holdings” has the meaning given to itin the Listing Manual of the Singapore (3) (2) (a) transactions contemplated and/orauthorisedbytheIPTMandate and/orthisResolution. he/she mayconsiderexpedientornecessaryintheinterests of theCompanytogiveeffect tothe all suchactsandthings(includingexecuting allsuchdocumentsas mayberequired), astheyand/or the Directors of the Company and/or any of them be andare hereby authorisedtocompleteand do of theCompany;and Company the approval giveninparagraph(a)above(the“IPT transactions; on normalcommercial termsandinaccordance withthereview procedures for suchinterested person interested personsdescribedintheAppendixtoLetter, provided that such transactionsare made to theLetterShareholders dated 27June2019(the“Letter”)withanypartywhoisof theclassof of thetransactionsfallingwithintypesof interested persontransactionsdescribedintheAppendix companies that are “entities at risk” (as that term is used in Chapter 9), or any of them to enter into any the Singapore Exchange SecuritiesTrading Limited,for theCompany, itssubsidiaries andassociated approval beandishereby given,for thepurposesof Chapter9of theListingManual(“Chapter9”)of 2014 andtheSIAEC RestrictedShare Plan2014 respectively, Restricted Share Plan2014 insubsequentyearsfor theduration of theSIAEC Performance Share Plan may beusedfor thegrantof awards undertheSIAEC Performance Share Plan2014 andtheSIAEC if theYearly Limitisnotfully utilisedduringtheRelevantYear, anyunutilisedportionof theYearly Limit (the “Yearly Limit”);and number of issuedordinary shares (excluding treasury shares andsubsidiaryholdings)from timeto the Companyisrequired bylawtobeheld,whicheveristheearlier, shallnotexceed 0.5% of thetotal next AnnualGeneralMeetingof theCompanyordate bywhichthenextAnnualGeneralMeetingof (the “Relevant Year”) commencing from this Annual General Meeting and ending on the date of the Performance Share Plan2014 andtheSIAEC RestrictedShare Plan2014 respectively duringtheperiod the aggregate numberof ordinary shares underawards tobegrantedpursuanttheSIAEC “Share BuyBackMandate”); time beingbeapplicable, and ishereby authorisedandapproved generallyandunconditionally(the and otherwiseinaccordance with all otherlawsandregulations andrulesof theSGX-ST as may for the (ii) (i) the Directors from timetouptheMaximumPrice(ashereafter defined),whetherbywayof: aggregate theMaximum Limit(ashereafter defined),at suchpriceorpricesasmaybedeterminedby to purchase orotherwiseacquire issuedordinary shares of theCompany(“Shares”)notexceeding in “Companies Act”),theexercise bytheDirectors of theCompanyof allthepowersof theCompany for the purposes of Sections 76C and 76E of the Companies Act, Chapter 50 of Singapore (the which scheme(s)shallsatisfy alltheconditions prescribed bythe CompaniesAct, access scheme(s)asmaybedeterminedorformulated bytheDirectors astheyconsiderfit, off-market purchase(s) (ifeffected otherwise thanontheSGX-ST) inaccordance withanyequal market purchase(s) ontheSingapore Exchange SecuritiesTrading Limited(the“SGX-ST”); and/or in generalmeeting,continueforce untiltheconclusionof thenextAnnualGeneralMeeting Mandate”) shall,unlessrevoked orvariedbythe NOTICE OFANNUAL GENERALMEETING Singapore 27 June2019 Company Secretary LU LING By Order of the Board (b) (d) (c) (iii) (ii) (i) the earliestof: to timeduringtheperiodcommencingfrom thedate of thepassingof thisResolutionandexpiringon pursuant totheShare BuyBackMandate maybeexercised bytheDirectors at anytimeandfrom time unless variedorrevoked bytheCompanyingeneralmeeting,authorityconferred ontheDirectors transactions contemplated and/orauthorisedbythisResolution. he/she mayconsiderexpedientornecessaryintheinterests of theCompanytogiveeffect tothe all suchactsandthings(includingexecuting allsuchdocumentsasmayberequired) astheyand/or the Directors of the Company and/or any of them be andare hereby authorisedtocompleteand do the Average ClosingPriceof theShares; and which shallnotexceed, whetherpursuanttoamarket purchase oranoff-market purchase, 105% of (excluding brokerage, commission,applicablegoodsandservicestaxotherrelated expenses) “Maximum Price”, in relation to a Share to be purchased or (as definedintheListingManual of theSGX-ST)); and Shares as at thedate of thepassingof thisResolution(excluding treasury shares andsubsidiaryholdings “Maximum Limit”means that number of issued Shares purchase; herein) for each Share andtherelevant termsof theequalaccessschemefor effecting the off-market purchase price(whichshallnotbemore thantheMaximumPricecalculated onthebasissetout make anoffer for thepurchase oracquisition of Shares from holders of Shares, stating therein the “date of the making of the offer” ST for anycorporate actionwhichoccursafter therelevant five-dayperiod; to theoff-market purchase, anddeemedtobeadjustedinaccordance withthelistingrules of theSGX- market purchase by theCompanyor, asthecasemaybe,date of themakingof theoffer pursuant trading daysonwhichtheShares are transactedontheSGX-ST immediately preceding thedate of “Average ClosingPrice”meanstheaverage of thelastdealt in thisResolution: are carriedouttothefullextentmandated; the date on which purchases and acquisitions of Shares pursuant to theShare Buy Back Mandate held; and the date by which the next Annual General Meeting of the Companyis required by law to be the date onwhichthenextAnnualGeneralMeetingof theCompanyisheld; means thedate onwhich representing 2% of the total number of issued prices of aShare for thefiveconsecutive the Companyannouncesitsintentionto acquired, means the purchase price 209

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SIA ENGINEERING COMPANY The Proposed Dividend,ifapproved byshareholders, willbepaidon8August2019. holders inaccordance withitsnormalpractice. pay theProposed DividendtoCDP, whichwill,inturn,distributetheentitlementstoProposed DividendtoCDPaccount- ordinary shares of theCompanyasat 5.00p.m.on25July2019willbeentitledtotheProposed Dividend.TheCompanywill aforesaid, shareholders whoseSecuritiesAccountswithTheCentralDepository(Pte)Limited(“CDP”)are credited with p.m. on25July2019willberegistered todetermineshareholders’ entitlementstotheProposed Dividend.Subjectas Company’s Share Registrar, M&CServicesPrivate Limited,at 112RobinsonRoad#05-01,Singapore 068902,upto5.00 Duly completedandstampedtransfers (togetherwithallrelevant documentsof orevidencingtitle)received bythe Register of Membersof theCompanywillbeclosedon26July2019for thepreparation of dividendwarrants. of theCompanyfor thepaymentof thefinalordinary dividend(the“ProposedDividend”),theShare Transfer Books andthe CLOSURE OFBOOKS NOTICE OFANNUAL GENERALMEETING 3. 2. 1. EXPLANATORY NOTES: NOTICE ISHEREBY GIVENthat, subject to the approval of shareholders being Ordinary ResolutionNo.5,ifpassed,willfacilitate thepaymentof Directors’ fees duringthefinancialyearinwhich In relation toOrdinary ResolutionNo.4,Article96of theConstitutionof theCompany permitstheDirectors to In relation toOrdinary ResolutionNos.3.1,3.2and3.3,MsChristinaHonKwee Fong(MrsChristinaOng),DrRaj Directors' fees. Report FY2018/19,MrPngKimChiangistheChiefExecutive Officer oftheCompanyanddoesnot receiveany government agency, of the Company, willbepaidtoandretained bySIA,and Directors' fees duetoDrRajThampuranwillbepaida Hwee andMrChinYau Seng,whoholdexecutive positions inSingapore AirlinesLimited("SIA"),theholdingcompany As disclosedonpage57of theAnnualReportFY2018/19,Directors' fees duetoMrGohChoonPhong,NgChin next AnnualGeneralMeetingfor paymentstomeettheshortfall. additional Board Committees.Intheeventthat theamountproposed isinsufficient,approval willbesought atthe additional unscheduledBoard meetings,additionalappointmentsto Board Committeesand/ortheformation of an additional5%tocater for unforeseen circumstances, for example,theappointmentof anadditionalDirector, number of Board meetingsfor FY2019/20,assumingfullattendance byall Directors. Theamountalsoincludes the fees are incurred, that is, during FY2019/20. The amount of Directors’ fees is computed based on the anticipated Audit Committee.MrChinisconsidered anon-independentDirector. Annual GeneralMeetingpursuanttoArticle96.MrChinwill,uponre-election, continuetoserveasamemberof the for re-election. MrChinYau Sengwasappointedon8October2018, andheistherefore seeking re-election at the Director soappointedshallholdoffice onlyuntilthenext followingAnnualGeneralMeeting,andshallthenbeeligible appoint anypersontobeaDirector, eithertofillacasualvacancyorasanadditiontheexistingDirectors. Any independent Directors. Risk Committee.MrNgisconsidered anon-independentDirector, andMrsOngDrThampuranare considered Mr Ng will, upon re-election, continue to serve as a member of theNominating CommitteeandtheBoard Safety & Audit Committee. Dr Thampuranwill, upon re-election, continue to serveasamember of the Audit Committee. will, upon re-election, continue to serve as the Chairperson of the Nominating Committee and a member of the of theConstitutionof theCompanyandwillbestandingfor re-election at theAnnual GeneralMeeting.MrsOng Thampuran and MrNgChinHweewillberetiring from office attheAnnualGeneralMeetingpursuanttoArticle90 the Directorship & Consultancy Appointments Council. As disclosed on page 57 of the Annual obtained at the 37 th AnnualGeneralMeeting 7. 6. 5. 4. NOTICE OFANNUAL GENERALMEETING Please refer totheLetterfor more details. for thefinancialyearended31March 2019, basedoncertainassumptions,are setoutinparagraph 3.7 of theLetter. Share BuyBackMandate ontheauditedfinancialstatements of theCompanyanditssubsidiaries The financialeffects of thepurchase oracquisitionof suchordinary shares bytheCompanypursuant totheproposed acquired andwhethertheordinary shares purchased oracquired are heldintreasury orcancelled. number of ordinary shares purchased oracquired andthepriceat whichsuchordinary shares were purchased or on theCompany’sfinancialposition,cannotbeascertained asat thedate of thisNoticeasthesewilldependonthe shares. Theamountof financingrequired for theCompanytopurchase oracquire itsordinary shares, andtheimpact The Companymayuseinternalorexternalsources of fundstofinancethepurchase oracquisitionof itsordinary acquire itsissuedordinary shares, onthetermsandsubjecttoconditionssetoutin Resolution. Ordinary ResolutionNo.7.4, ifpassed,willrenew themandate toallowtheCompanypurchase orotherwise the nextAnnualGeneralMeetingof theCompany. Pleaserefer totheLetterfor more details. authority will,unlessrevoked orvariedbytheCompanyingeneralmeeting,continueforce untiltheconclusionof interested persons asdescribedintheAppendixtoLetterShareholders dated 27June 2019(the“Letter”).The Securities Trading Limited)oranyof them,toenterintocertaininterested persontransactionswithcertainclassesof companies that are entitiesat risk(asthat termisusedinChapter9of theListingManualof theSingapore Exchange Ordinary ResolutionNo.7.3, ifpassed,willrenew themandate toallowtheCompany, itssubsidiariesandassociated of theSIAEC Performance Share Plan2014 andtheSIAEC RestrictedShare Plan2014. SIAEC Performance Share Plan2014 andtheSIAEC RestrictedShare Plan2014 insubsequent years,for theduration Year, any unutilised portion of the Yearly Limit may be used by the Directors to make grants of awards under the holdings) from timeto(the“Yearly”), provided Limit that iftheYearly LimitisnotfullyutilisedduringtheRelevant Year”) shallnotexceed 0.5% of thetotalnumber of issuedordinary shares (excluding treasury shares andsubsidiary Restricted Share Plan2014 from thisAnnualGeneralMeetingtothenext(the“Relevant of ordinary shares underawards tobegrantedpursuanttheSIAEC Performance Share Plan2014 andtheSIAEC and subsidiaryholdings)from timetotime.Inaddition, Ordinary Resolution7.2 willprovide that thetotalnumber lieu of ordinary shares) shall not exceed 5% of the total number of issued ordinary shares (excluding treasury shares 2014 andtheSIAEC RestrictedShare Plan2014 (whetherintheform of ordinary shares orintheform of cashin of ordinary shares whichmaybedelivered pursuanttoawards grantedundertheSIAEC Performance Share Plan pursuant totheSIAEC Performance Share Plan2014 andtheSIAEC RestrictedShare Plan2014. Thetotalnumber Share Plan 2014 andtheSIAEC RestrictedShare Plan2014, andtoallotissueordinary shares of theCompany Ordinary ResolutionNo.7.2, ifpassed,willempowerthe Directors tograntawards pursuanttotheSIAEC Performance treasury shares andno subsidiaryholdings. consolidation orsubdivisionof shares. Asat 3June2019(the“Latest consolidation orsubdivisionof shares. Fortheavoidance of doubt,shareholders’ approval willberequired for any awards whichare outstandingat thetimethisOrdinary Resolutionispassed;and(b)anysubsequentbonusissueor shares arisingfrom the conversionorexercise of anyconvertibleinstrumentsorshare optionsorvestingof share treasury shares and subsidiaryholdings)at thetimethisOrdinary Resolutionispassed,after adjustingfor (a)new which may be issued, the percentage of issued shares shall be based on the total number of issued shares (excluding account shareholders’ concernsagainstdilution.Forthepurposeof determiningtheaggregate numberof shares sub-limit of 10%wouldsufficiently address the Company’s present needtomaintain flexibility whiletakinginto under theListingManualof theSingapore Exchange SecuritiesTrading Limited.TheDirectors believethat thelower other thanonapro rata basis.The10%sub-limitfor non-pro rata issuesislowerthanthe20%sub-limitallowed total numberof issuedshares (excluding treasury shares andsubsidiaryholdings)withasub-limitof 10%for issues convertible intoshares andtoissueshares pursuanttosuchinstrumentsupanumbernotexceeding 50%of the Ordinary ResolutionNo.7.1, ifpassed,willempowertheDirectors toissueshares, make orgrantinstruments Practicable Date”), theCompanyhad5,005,974

211 ANNUAL REPORT 2018/19 212 SIA ENGINEERING COMPANY NOTICE OFANNUAL GENERALMEETING PERSONAL DATA PRIVACY: 3. 2. 1. NOTES: damages asaresult of themember’sbreach of warranty. (iii) agrees that thememberwillindemnifyCompanyinrespect of anypenalties,liabilities,claims,demands,lossesand (or itsagentsorserviceproviders) of thepersonaldata of suchproxy(ies) and/orrepresentative(s) for thePurposes;and obtained thepriorconsentof suchproxy(ies) and/orrepresentative(s) for thecollection,useanddisclosure bytheCompany of themember’sproxy(ies) and/orrepresentative(s) totheCompany(oritsagentsorserviceproviders), thememberhas regulations and/orguidelines(collectively, the“Purposes”);(ii)warrantsthat where thememberdisclosespersonaldata order for theCompany(oritsagentsorserviceproviders) tocomplywithanyapplicablelaws,listingrules,take-over rules, lists, minutesandotherdocumentsrelating andin totheAnnualGeneralMeeting(includinganyadjournmentthereof), andthepreparationthe AnnualGeneralMeeting(includinganyadjournmentthereof) andcompilation of theattendance administration andanalysisbytheCompany(oritsagentsorservice providers) of proxies andrepresentatives appointedfor of themember’spersonaldata bytheCompany(oritsagentsorserviceproviders) for thepurposeof theprocessing, Meeting and/oranyadjournmentthereof, amemberof theCompany(i)consentstocollection,useanddisclosure By submittinganinstrumentappointingaproxy(ies) and/orrepresentative(s) toattend, speakandvote at theAnnualGeneral appointed for holdingtheAnnualGeneralMeeting. M &CServicesPrivate Limited,112RobinsonRoad#05-01,Singapore 068902notlessthan72hoursbefore thetime must be which deposited it is atsigned or a duly certified copy thereof) theoffice of the Company’s Share Registrar, The instrumentappointingaproxy orproxies (togetherwiththepowerof attorney orotherauthority, ifany, under A proxy neednotbeamemberof theCompany. “Relevant intermediary” has the meaning ascribed to it in Section 181 of the Companies Act, Chapter50 of Singapore. (b) (a) in theform of proxy. proxies, the number and class of shares in relation to which each proxy has beenappointed shall be specified different share orshares heldbysuchmember. Where suchmember’sform of proxy appointsmore thantwo vote at theAnnualGeneralMeeting,buteachproxy mustbeappointedtoexercise therightsattached toa A memberwhoisarelevant intermediaryisentitledtoappointmore thantwoproxies toattend, speakand proxy. proportion of theshareholding concernedtoberepresented byeachproxy shallbespecifiedintheform of speak andvoteat theAnnualGeneralMeeting.Where suchmember’sform of proxy appointstwo proxies, the A member who is not arelevant intermediary is entitled to appoint not more thantwoproxies toattend, This pagehas been intentionallyleftblank. 213 ANNUAL REPORT 2018/19 214 SIA ENGINEERING COMPANY AT THEANNUAL GENERALMEETING DIRECTORS SEEKINGRE-ELECTION ADDITIONAL INFORMATION ON Working experienceandoccupation(s) duringthepast10 years Professional qualifications Job Title(e.g.LeadID, AC Chairman,AC Memberetc.) Whether appointmentisexecutive, andifso,thearea of responsibility the search andnomination process) The Board’s commentsonthisappointment(includingrationale, selectioncriteria,and Country of principalresidence Age Date of lastre-appointment (ifapplicable) Date of Appointment Name ofperson to thelistedissuer Undertaking (intheform setoutinAppendix7.7)underRule720(1)hasbeensubmitted Conflict of interest (includinganycompetingbusiness) of anyof itsprincipalsubsidiaries existing executive officer, theissuerand/orsubstantialshareholder ofthelistedissueror Any relationship (including immediate family relationships) with any existing director, Shareholding interest inthelistedissueranditssubsidiaries

Senior Partner Allen &GledhillLLP, Co-Chairman and Member, International BarAssociation Member, LawSocietyof Singapore Upper), National Universityof Singapore Bachelor of Laws, LLB(Honours)(Second Member, AuditCommittee Chairperson, Nominating Committee Non-Executive andIndependentDirector Non-Executive continue tocontributetheBoard. inter alia,andissatisfied that shewill of SIAEngineeringCompanyLimited, the discharge of herdutiesasaDirector Ong’s independenceandcommitmentin recommendation andassessmentonMrs the Nominating Committee’s The Board hadconsidered Singapore 67 20 July2017 1 January2014 (Mrs ChristinaOng) Ms ChristinaHonKwee Fong Yes Nil Nil Nil

Executive Director andManagingDirector Engineers Fellow, Singapore Academyof INSEAD (Fountainbleu) Advanced ManagementProgramme, Fellowship PhD inMaterials Science–Postdoctoral (Honours) Bachelor of MechanicalEngineering Member, AuditCommittee Non-Executive andIndependentDirector Non-Executive contribute totheBoard. is satisfied that hewillcontinueto Company Limited,interalia,and duties asaDirector of SIAEngineering commitment inthedischarge of his Dr Thampuran’sindependenceand recommendation andassesmenton the Nominating Committee’s The Board hadconsidered Singapore 56 20 July2017 1 September2016 Dr RajThampuran Yes Nil Nil Nil 4. 3. 2. 1. Singapore Honours), National Universityof Bachelor of Engineering(1stClass Technology, USA Massachusetts Instituteof Master of ScienceinManagement, Member, Nominating Committee Committee Member, Board Safety andRisk Director Non-Executive andNon-Independent Non-Executive continue tocontributetheBoard. inter alia,andissatisfied that hewill of SIAEngineeringCompanyLimited, discharge of hisdutiesasaDirector on MrNg’scommitmentinthe recommendation andassessment the Nominating Committee’s The Board hadconsidered Singapore 58 20 July2017 18 July2008 Mr NgChinHwee Yes Nil Nil (Private) Limited) (held inthenameof DBSNominees Engineering CompanyLimited 10,000 ordinary shares of SIA senior positions,1985to2004 Singapore AirlinesLimited,various Executive Officer, 2004to2008 SATS Ltd, President &Chief 2011 Resources andPlanning,2008to Executive VicePresident Human Singapore AirlinesLimited, to present Resources andOperations, 2011 Executive VicePresident Human Singapore AirlinesLimited, 6. 5. 4. 3. 2. 1. School of Economics &PoliticalScience (Accounting &Finance),TheLondon Bachelor of ScienceinEconomics Research Master of ScienceinOperational Member, AuditCommittee Director Non-Executive andNon-Independent Non-Executive contribute totheBoard. and issatisfied that hewillcontinueto Engineering CompanyLimited,interalia, of hisdutiesasaDirector of SIA Mr Chin’scommitmentinthedischarge recommendation andassessmenton the Nominating Committee’s The Board hadconsidered Singapore 47 N.A. 8 October2018 Mr ChinYau Seng Yes Nil Nil Nil to 2010 SilkAir PteLtd, ChiefExecutive, 2007 Operations, 2010to2011 Vice President CabinCrew Singapore AirlinesLimited,Divisional Executive Officer, 2011to2012 Tiger AirwaysHoldingsLimited,Chief 2012 to2014 Vice President Sales&Marketing, Singapore AirlinesLimited,Senior President, 2014to2018 Singapore AirlinesCargo PteLtd, present Vice President Cargo, 2018to Singapore AirlinesLimited,Senior to thelistedissuer Undertaking (intheform setoutinAppendix7.7)underRule720(1)hasbeensubmitted Conflict of interest (includinganycompetingbusiness) of anyof itsprincipalsubsidiaries existing executive officer, theissuerand/orsubstantialshareholder ofthelistedissueror Any relationship (including immediate family relationships) with anyexisting director, Shareholding interest inthelistedissueranditssubsidiaries Working experienceandoccupation(s) duringthepast10 years Professional qualifications Job Title(e.g.LeadID, AC Chairman,AC Memberetc.) Whether appointmentisexecutive, andifso,thearea of responsibility the search andnomination process) The Board’s commentsonthisappointment(includingrationale, selectioncriteria,and Country of principalresidence Age Date of lastre-appointment (ifapplicable) Date of Appointment Name ofperson Yes Nil Nil Nil Senior Partner Allen &GledhillLLP, Co-Chairman and Member, International BarAssociation Member, LawSocietyof Singapore Upper), National Universityof Singapore Bachelor of Laws, LLB(Honours)(Second Member, AuditCommittee Chairperson, Nominating Committee Non-Executive andIndependentDirector Non-Executive continue tocontributetheBoard. inter alia,andissatisfied that shewill of SIAEngineeringCompanyLimited, the discharge of herdutiesasaDirector Ong’s independenceandcommitmentin recommendation andassessmentonMrs the Nominating Committee’s The Board hadconsidered Singapore 67 20 July2017 1 January2014 (Mrs ChristinaOng) Ms ChristinaHonKwee Fong Yes Nil Nil Nil Executive Director andManagingDirector Engineers Fellow, Singapore Academyof INSEAD (Fountainbleu) Advanced ManagementProgramme, Fellowship PhD inMaterials Science–Postdoctoral (Honours) Bachelor of MechanicalEngineering Member, AuditCommittee Non-Executive andIndependentDirector Non-Executive contribute totheBoard. is satisfied that hewillcontinueto Company Limited,interalia,and duties asaDirector of SIAEngineering commitment inthedischarge of his Dr Thampuran’sindependenceand recommendation andassesmenton the Nominating Committee’s The Board hadconsidered Singapore 56 20 July2017 1 September2016 Dr RajThampuran AT THEANNUAL GENERALMEETING DIRECTORS SEEKINGRE-ELECTION ADDITIONAL INFORMATION ON Yes Nil Nil (Private) Limited) (held inthenameof DBSNominees Engineering CompanyLimited 10,000 ordinary shares of SIA 4. 3. 2. 1. Singapore Honours), National Universityof Bachelor of Engineering(1stClass Technology, USA Massachusetts Instituteof Master of ScienceinManagement, Member, Nominating Committee Committee Member, Board Safety andRisk Director Non-Executive andNon-Independent Non-Executive continue tocontributetheBoard. inter alia,andissatisfied that hewill of SIAEngineeringCompanyLimited, discharge of hisdutiesasaDirector on MrNg’scommitmentinthe recommendation andassessment the Nominating Committee’s The Board hadconsidered Singapore 58 20 July2017 18 July2008 Mr NgChinHwee senior positions,1985to2004 Singapore AirlinesLimited,various Executive Officer, 2004to2008 SATS Ltd, President &Chief 2011 Resources andPlanning,2008to Executive VicePresident Human Singapore AirlinesLimited, to present Resources andOperations, 2011 Executive VicePresident Human Singapore AirlinesLimited,

Yes Nil Nil Nil 6. 5. 4. 3. 2. 1. School of Economics &PoliticalScience (Accounting &Finance),TheLondon Bachelor of ScienceinEconomics Research Master of ScienceinOperational Member, AuditCommittee Director Non-Executive andNon-Independent Non-Executive contribute totheBoard. and issatisfied that hewillcontinueto Engineering CompanyLimited,interalia, of hisdutiesasaDirector of SIA Mr Chin’scommitmentinthedischarge recommendation andassessmenton the Nominating Committee’s The Board hadconsidered Singapore 47 N.A. 8 October2018 Mr ChinYau Seng to 2010 SilkAir PteLtd, ChiefExecutive, 2007 Operations, 2010to2011 Vice President CabinCrew Singapore AirlinesLimited,Divisional Executive Officer, 2011to2012 Tiger AirwaysHoldingsLimited,Chief 2012 to2014 Vice President Sales&Marketing, Singapore AirlinesLimited,Senior President, 2014to2018 Singapore AirlinesCargo PteLtd, present Vice President Cargo, 2018to Singapore AirlinesLimited,Senior

215 ANNUAL REPORT 2018/19 216 SIA ENGINEERING COMPANY AT THEANNUAL GENERALMEETING DIRECTORS SEEKINGRE-ELECTION ADDITIONAL INFORMATION ON Present Past (for thelast5years) Other PrincipleCommitmentsincludingDirectorships Name ofperson (c) (b) (a) Information required Whether there is anyunsatisfied judgment against him? that businesstrust,on theground of insolvency? dissolution of that entityor, where that entityis the trusteeof abusinesstrust, or anequivalentpersonakey executive of that entity, for thewindingupor entity orat anytimewithin2years from the date heceasedtobeadirector time when he wasadirector or anequivalent person ora key executive of that of whichhewasadirector oranequivalent personorakey executive, at the any lawof anyjurisdictionwasfiled against anentity(not beingapartnership) Whether at anytimeduringthelast10years,anapplication ora petitionunder any timewithin2yearsfrom thedate heceasedtobeapartner? partnership of whichhewasapartnerat thetimewhenhewasapartner orat under anybankruptcylawof anyjurisdictionwasfiledagainsthim oragainst a Whether at anytimeduringthelast10years,anapplication orapetition

12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. 2. 1. (Mrs ChristinaOng) Ms ChristinaHonKwee Fong No No No Committee, Member Corporate GovernanceAdvisory Member, SupervisoryCommittee ABF Singapore BondIndexFund, Catalist AdvisoryPanel,Member Trust, Trustee The Stephen A.SchwarzmanScholars Director Hongkong LandHoldingsLimited, Epimetheus Ltd, Director Ltd., Director Eastern DevelopmentHoldingsPte. Director Eastern DevelopmentPteLtd, Compliance Pte.Ltd., Director Allen &GledhillRegulatory & Co-Chairman &SeniorPartner Allen &GledhillLLP, Director Singapore Telecommunications Ltd, Corporation Ltd, Director Oversea-Chinese Banking Trailblazer Foundation Ltd, Director Member Singapore Tourism Board, Board

No No No Nil 2. 1. Dr RajThampuran Director Advanced Micro FoundryPteLtd, Agency, Board Member Defence ScienceandTechnology No No No 4. 3. 2. 1. Mr NgChinHwee 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Member and ConnectivitySub-Committee, Future Economy Council,Trade and Business),Member Relations inDefence (Employer Advisory CouncilonCommunity Director NokScoot AirlinesCo.,Ltd, Director Budget Aviation HoldingsPteLtd, Director VAL Trademark FiveLimited, Director VAL Trademark FourLimited, Director VAL Trademark Three Limited, Director VAL Trademark Two Limited, Director AirwaysLimited, Director Virgin Travel Group Limited, Virgin Atlantic Limited,Director SIA Properties (Pte)Ltd, Chairman Scoot PteLtd, Chairman Director Tiger AirwaysHoldingsLimited, Director Singapore AirlinesCargo PteLtd, No No No 4. 3. 2. 1. Mr ChinYau Seng 4. 3. 2. 1. Committee Association (IATA), Member, Cargo International AirTransport Emporium (Private) Limited),Director as Singapore AirportDuty-Free KrisShop PteLtd (formerly known Director Singapore AirlinesCargo PteLtd, Vice President Cargo Singapore AirlinesLimited,Senior Director China Cargo AirlinesCompany, Advisory Committee, Polytechnic, Member, School School of Hospitality, Republic Executive Director Singapore AirlinesCargo PteLtd, President Singapore AirlinesCargo PteLtd, (c) (b) (a) Information required Present Past (for thelast5years) Other PrincipleCommitmentsincludingDirectorships Name ofperson Whether there is anyunsatisfied judgment against him? that businesstrust,on theground of insolvency? dissolution of that entityor, where that entityis the trusteeof abusinesstrust, or anequivalentpersonakey executive of that entity, for thewindingupor entity orat anytimewithin2years from thedate heceasedtobeadirector time when he wasadirector or anequivalent person ora key executive of that of whichhewasadirector oranequivalent personorakey executive, at the any lawof anyjurisdictionwasfiled against anentity(not beingapartnership) Whether at anytimeduringthelast10years,anapplication or a petitionunder any timewithin2yearsfrom thedate heceasedtobeapartner? partnership of whichhewasapartnerat thetimewhenhewasapartner orat under anybankruptcylawof anyjurisdictionwasfiledagainsthim oragainst a Whether at anytimeduringthelast10years,anapplication orapetition No No No 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. 2. 1. (Mrs ChristinaOng) Ms ChristinaHonKwee Fong Committee, Member Corporate GovernanceAdvisory Member, SupervisoryCommittee ABF Singapore BondIndexFund, Catalist AdvisoryPanel,Member Trust, Trustee The Stephen A.SchwarzmanScholars Director Hongkong LandHoldingsLimited, Epimetheus Ltd, Director Ltd., Director Eastern DevelopmentHoldingsPte. Director Eastern DevelopmentPteLtd, Compliance Pte.Ltd., Director Allen &GledhillRegulatory & Co-Chairman &SeniorPartner Allen &GledhillLLP, Director Singapore Telecommunications Ltd, Corporation Ltd, Director Oversea-Chinese Banking Trailblazer Foundation Ltd, Director Member Singapore Tourism Board, Board No No No Nil 2. 1. Dr RajThampuran AT THEANNUAL GENERALMEETING DIRECTORS SEEKINGRE-ELECTION ADDITIONAL INFORMATION ON Director Advanced Micro FoundryPteLtd, Agency, Board Member Defence ScienceandTechnology No No No 4. 3. 2. 1. Mr NgChinHwee 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Member and ConnectivitySub-Committee, Future Economy Council,Trade and Business),Member Relations inDefence (Employer Advisory CouncilonCommunity Director NokScoot AirlinesCo.,Ltd, Director Budget Aviation HoldingsPteLtd, Director VAL Trademark FiveLimited, Director VAL Trademark FourLimited, Director VAL Trademark Three Limited, Director VAL Trademark Two Limited, Director Virgin Atlantic AirwaysLimited, Director Virgin Travel Group Limited, Virgin Atlantic Limited,Director SIA Properties (Pte)Ltd, Chairman Scoot PteLtd, Chairman Director Tiger AirwaysHoldingsLimited, Director Singapore AirlinesCargo PteLtd,

No No No 4. 3. 2. 1. Mr ChinYau Seng 4. 3. 2. 1. Committee Association (IATA), Member, Cargo International AirTransport Emporium (Private) Limited),Director as Singapore AirportDuty-Free KrisShop PteLtd (formerly known Director Singapore AirlinesCargo PteLtd, Vice President Cargo Singapore AirlinesLimited,Senior Director China Cargo AirlinesCompany, Advisory Committee, Polytechnic, Member, School School of Hospitality, Republic Executive Director Singapore AirlinesCargo PteLtd, President Singapore AirlinesCargo PteLtd,

217 ANNUAL REPORT 2018/19 218 SIA ENGINEERING COMPANY AT THEANNUAL GENERALMEETING DIRECTORS SEEKINGRE-ELECTION ADDITIONAL INFORMATION ON 1 (j) (i) (h) (g) (f) (e) (d) Name ofperson (k) An enquirybyLaw Societyof Singapore in1986/1987 of acomplaint whichwasdismissedbyLawSociety of Singapore. (i) or conduct,inSingapore orelsewhere, of theaffairs of:- Whether hehasever, tohisknowledge,beenconcernedwiththemanagement from engaginginanytypeof businesspracticeoractivity? court, tribunalorgovernmentalbody, permanentlyortemporarilyenjoininghim Whether hehaseverbeenthesubjectof anyorder, judgmentorrulingof any directly orindirectly inthemanagementof anyentityorbusinesstrust? person of anyentity(includingthetrusteeof abusinesstrust),orfrom takingpart Whether hehaseverbeendisqualifiedfrom actingasadirector oranequivalent connection withtheformation ormanagement of anyentityorbusinesstrust? Whether hehaseverbeenconvictedinSingapore orelsewhere of anyoffence in misrepresentation ordishonestyonhispart? pending civilproceedings of whichheisaware) involvinganallegation of fraud, on hispart,orhehasbeenthesubjectof anycivilproceedings (includingany Singapore orelsewhere, orafinding of fraud,misrepresentation ordishonesty law orregulatory requirement that relates tothesecuritiesorfutures industryin him inanycivilproceedings inSingapore orelsewhere involvingabreach of any Whether at anytimeduringthelast10years,judgmenthasbeenentered against which heisaware) for suchbreach? of anycriminalproceedings (includinganypendingcriminalproceedings of securities orfutures industryinSingapore orelsewhere, orhasbeenthesubject involving abreach of anylaworregulatory requirement that relates tothe Whether hehaseverbeenconvictedof anyoffence, inSingapore orelsewhere, proceedings of whichheisaware) for suchpurpose? been thesubjectof anycriminalproceedings (includinganypendingcriminal involving fraudordishonestywhichispunishablewithimprisonment,has Whether hehaseverbeenconvictedof anyoffence, inSingapore orelsewhere, (ii) professional bodyorgovernmentagency, whetherinSingapore orelsewhere? Monetary Authorityof Singapore oranyotherregulatory authority, exchange, disciplinary proceedings, orhasbeenreprimanded orissuedanywarning,bythe Whether hehasbeenthesubjectof anycurrent orpastinvestigation or was soconcernedwiththeentityorbusinesstrust? in connectionwithanymatter occurringorarisingduringthat periodwhenhe (iv) (iii)

elsewhere; or or regulatory requirement governingcorporations inSingapore or any corporation whichhasbeeninvestigated for abreach of anylaw Singapore orelsewhere; or breach of anylaw or regulatory requirement governing such entities in any entity(notbeingacorporation) whichhasbeeninvestigated for a industry inSingapore orelsewhere, any laworregulatory requirement that relates tothesecuritiesorfutures any entityorbusinesstrustwhichhasbeeninvestigated for abreach of elsewhere; or or regulatory requirement governingbusinesstrustsinSingapore or any businesstrustwhichhasbeeninvestigated for abreach of anylaw

(Mrs ChristinaOng) Ms ChristinaHonKwee Fong No No No No No No No No Yes No No 1

No No No No No No No No No No No Dr RajThampuran No No No No No No No No No No No Mr NgChinHwee No No No No No No No No No No No Mr ChinYau Seng 1 (j) (i) (h) (g) (f) (e) (d) Name ofperson (k) An enquirybyLaw Societyof Singapore in1986/1987 of acomplaint whichwasdismissedbyLawSociety of Singapore. (i) or conduct,inSingapore orelsewhere, of theaffairs of:- Whether hehasever, tohisknowledge,beenconcernedwiththemanagement from engaginginanytypeof businesspracticeoractivity? court, tribunalorgovernmentalbody, permanentlyortemporarilyenjoininghim Whether hehaseverbeenthesubjectof anyorder, judgmentorrulingof any directly orindirectly inthemanagementof anyentityorbusinesstrust? person of anyentity(includingthetrusteeof abusinesstrust),orfrom takingpart Whether hehaseverbeendisqualifiedfrom actingasadirector oranequivalent connection withtheformation ormanagement of anyentityorbusinesstrust? Whether hehaseverbeenconvictedinSingapore orelsewhere of anyoffence in misrepresentation ordishonestyonhispart? pending civilproceedings of whichheisaware) involvinganallegation of fraud, on hispart,orhehasbeenthesubjectof anycivilproceedings (includingany Singapore orelsewhere, orafinding of fraud,misrepresentation ordishonesty law orregulatory requirement that relates tothesecuritiesorfutures industryin him inanycivilproceedings inSingapore orelsewhere involvingabreach of any Whether at anytimeduringthelast10years,judgmenthasbeenentered against which heisaware) for suchbreach? of anycriminalproceedings (includinganypendingcriminalproceedings of securities orfutures industryinSingapore orelsewhere, orhasbeenthesubject involving abreach of anylaworregulatory requirement that relates tothe Whether hehaseverbeenconvictedof anyoffence, inSingapore orelsewhere, proceedings of whichheisaware) for suchpurpose? been thesubjectof anycriminalproceedings (includinganypendingcriminal involving fraudordishonestywhichispunishablewithimprisonment,has Whether hehaseverbeenconvictedof anyoffence, inSingapore orelsewhere, professional bodyorgovernmentagency, whetherinSingapore orelsewhere? Monetary Authorityof Singapore oranyotherregulatory authority, exchange, disciplinary proceedings, orhasbeenreprimanded orissuedanywarning,bythe Whether hehasbeenthesubjectof anycurrent orpastinvestigation or was soconcernedwiththeentityorbusinesstrust? in connectionwithanymatter occurringorarisingduringthat periodwhenhe (iv) (iii) (ii)

elsewhere; or or regulatory requirement governingcorporations inSingapore or any corporation whichhasbeeninvestigated for abreach of anylaw industry inSingapore orelsewhere, any laworregulatory requirement that relates tothesecuritiesorfutures any entityorbusinesstrustwhichhasbeeninvestigated for abreach of elsewhere; or or regulatory requirement governingbusinesstrustsinSingapore or any businesstrustwhichhasbeeninvestigated for abreach of anylaw Singapore orelsewhere; or breach of anylaw or regulatory requirement governing such entities in any entity(notbeingacorporation) whichhasbeeninvestigated for a No No No No No No No (Mrs ChristinaOng) Ms ChristinaHonKwee Fong Yes No No No 1 No No No No No No No No No No No Dr RajThampuran AT THEANNUAL GENERALMEETING DIRECTORS SEEKINGRE-ELECTION ADDITIONAL INFORMATION ON No No No No No No No No No No No Mr NgChinHwee

No No No No No No No No No No No Mr ChinYau Seng

219

ANNUAL REPORT 2018/19 220

SIA ENGINEERING COMPANY This pagehas been intentionallyleftblank. This pagehas been intentionallyleftblank. 221 ANNUAL REPORT 2018/19 222

SIA ENGINEERING COMPANY This pagehas been intentionallyleftblank. SIA ENGINEERING COMPANY LIMITED IMPORTANT: (Incorporated in the Republic of Singapore) 1. Relevant intermediaries as defined in Section 181 of Companies Act, Chapter 50 of Company Registration No. 198201025C Singapore may appoint more than two proxies to attend, speak and vote at the Annual General Meeting. 2. For CPF/SRS investors who have used their CPF/SRS monies to buy shares in SIA Engineering Company Limited, this form of proxy is not valid for use and shall be ineffective for all intents and purposes if used or purported to be used by them. CPF/ PROXY FORM SRS investors should contact their respective Agent Banks/SRS Operators if they have any queries regarding their appointment as proxies. 3. By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of Annual General Meeting dated 27 June 2019.

*I/We (Name) (NRIC/Passport/Co. Reg. Number) of (Address) being *a member/members of SIA Engineering Company Limited (the “Company”), hereby appoint:

Proportion of Name Address NRIC/ Passport No. Shareholdings %

and/or (delete as appropriate)

or failing *him/her/them, the Chairman of the Annual General Meeting (“AGM”) of the Company as *my/our *proxy/proxies to attend, speak and vote for *me/us and on *my/our behalf at the AGM of the Company to be held at Marina Mandarin Ballroom, Level 1, Marina Mandarin Singapore, 6 Raffles Boulevard, Marina Square, Singapore 039594 on Friday, 19 July 2019 at 10.00 a.m. and at any adjournment thereof.

*I/We direct *my/our *proxy/proxies to vote for or against the Resolutions to be proposed at the AGM as indicated hereunder. If no specific direction as to voting is given, the *proxy/proxies will vote or abstain from voting at *his/her/their discretion, as *he/she/they will on any other matter arising at the AGM and at any adjournment thereof. If no person is named in the above boxes, the Chairman of the AGM shall be *my/our *proxy/proxies to vote, for or against the Resolutions to be proposed at the AGM as indicated hereunder, for *me/us and on *my/our behalf at the AGM and at any adjournment thereof. NOTE: Voting will be conducted by poll.

**No. of Votes **No. of Votes No. Resolution “For” “Against” Ordinary Business 1. Adoption of the Directors’ Statement, Audited Financial Statements and the Auditors’ Report 2. Declaration of final ordinary dividend 3. Re-election of Directors who are retiring by rotation pursuant to Articles 90 and 91 of the Constitution of the Company: 3.1 Ms Christina Hon Kwee Fong (Mrs Christina Ong) 3.2 Dr Raj Thampuran 3.3 Mr Ng Chin Hwee 4. Re-election of Mr Chin Yau Seng who is retiring by rotation pursuant to Article 96 of the Constitution of the Company 5. Approval of Directors’ fees for financial year ending 31 March 2020 6. Re-appointment and remuneration of Auditors Special Business 7.1 Approval of the proposed renewal of the Share Issue Mandate 7.2 Approval of the proposed renewal of the Share Plan Mandate 7.3 Approval of the proposed renewal of the Mandate for Interested Person Transactions 7.4 Approval of the proposed renewal of the Share Buy Back Mandate

* Delete accordingly ** If you wish to exercise all your votes “For” or “Against” the relevant resolution, please tick ( ) within the relevant box provided. Alternatively, if you wish to exercise your votes both “For” and “Against” the relevant resolution, please insert the relevant number of shares in the boxes provided

Dated this day of 2019. Total number of Ordinary Shares held:

Signature(s) of Member(s) or Common Seal Important: Please read notes on the reverse side 1st fold here NOTES: 1. (a) A member who is not a relevant intermediary is entitled to appoint not more than two proxies to attend, speak and vote at the AGM. Where such member’s form of proxy appoints two proxies, the proportion of the shareholding concerned to be represented by each proxy shall be specified in the form of proxy. (b) A member who is a relevant intermediary is entitled to appoint more than two proxies to attend, speak and vote at the AGM, but each proxy must be appointed to exercise the rights attached to a different share or shares held by such member. Where such member’s form of proxy appoints more than two proxies, the number and class of shares in relation to which each proxy has been appointed shall be specified in the form of proxy. “Relevant intermediary” has the meaning ascribed to it in Section 181 of the Companies Act, Chapter 50 of Singapore. 2. A proxy need not be a member of the Company. 3. The instrument appointing a proxy or proxies must be signed by the appointor or his attorney duly authorised in writing or, if the appointor is a corporation, it must be executed either under its seal or signed by its officer duly authorised. 4. A corporation which is a member may also authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the AGM, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore. 5. This instrument appointing a proxy or proxies (together with the power of attorney or other authority, if any, under which it is signed or a duly certified copy thereof) must be deposited at the office of the Company’s Share Registrar, M & C Services Private Limited at 112 Robinson Road #05-01, Singapore 068902, not less than 72 hours before the time appointed for holding the AGM. 6. If the member has shares entered against his name in the Depository Register (maintained by The Central Depository (Pte) Limited), he should insert that number of shares. If the member has shares registered in his name in the Register of Members (maintained by or on behalf of the Company), he should insert that number of shares. If the member has shares entered against his name in the Depository Register and registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all shares held by the member. 7. The appointment of a proxy or proxies shall not preclude a member from attending, speaking and voting in person at the AGM. If a member attends the AGM in person, the appointment of a proxy or proxies shall be deemed to be revoked, and the Company reserves the right to refuse to admit such proxy or proxies to the AGM. 8. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in this instrument (including any related attachment) appointing a proxy or proxies. In addition, in the case of a member whose shares are entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 72 hours before the time appointed for holding the AGM, as certified by The Central Depository (Pte) Limited to the Company.

2nd fold here

Please Affix Postage Stamp

M & C SERVICES PRIVATE LIMITED Share Registrar for SIA Engineering Company Limited 112 Robinson Road #05-01 Singapore 068902 Republic of Singapore

3rd fold here CORPORATE DATA

BOARD OF DIRECTORS COMPENSATION & HR COMMITTEE Senior Vice President Chairman Chairman Aircraft & Component Services Tang Kin Fei Tang Kin Fei Wong Yue Jeen (from 19 July 2018) (from 19 July 2018) Stephen Lee Ching Yen Stephen Lee Ching Yen Senior Vice President (until 19 July 2018) (until 19 July 2018) Line Maintenance & Cabin Services Foo Kean Shuh Directors Members Goh Choon Phong Senior Vice President Ng Chin Hwee Wee Siew Kim Partnership Management & Business Development Manohar Khiatani Tong Chong Heong Philip Quek Cher Heong (until 1 June 2018) Chew Teck Soon Christina Hon Kwee Fong Senior Vice President Finance/ (Christina Ong) Chief Financial Officer Raj Thampuran BOARD SAFETY & RISK COMMITTEE Ng Lay Pheng Wee Siew Kim Chairman Manohar Khiatani Senior Vice President Chin Yau Seng (from 1 June 2018) Innovation, Technology (from 8 October 2018) & Fleet Management Tong Chong Heong Png Kim Chiang (until 1 June 2018) Ng Jan Lin Wilin Tong Chong Heong (from 1 April 2019) (until 1 June 2018) Members Ng Chin Hwee REGISTERED OFFICE Company Secretary Wee Siew Kim Lu Ling Ling 31 Airline Road Tang Kin Fei (until 19 July 2018) Singapore 819831 Tel: +65 6541 5152 AUDIT COMMITTEE Fax: +65 6546 0679 Email: [email protected] Chairman BOARD COMMITTEE Chew Teck Soon Members Tang Kin Fei SHARE REGISTRAR (from 19 July 2018) Members M & C Services Private Limited Manohar Khiatani Goh Choon Phong 112 Robinson Road #05-01 Christina Hon Kwee Fong Stephen Lee Ching Yen Singapore 068902 (Christina Ong) (until 19 July 2018) Raj Thampuran AUDITORS Chin Yau Seng EXECUTIVE MANAGEMENT (from 8 October 2018) KPMG LLP Chief Executive Officer Public Accountants and Tang Kin Fei Chartered Accountants (until 19 July 2018) Png Kim Chiang 16 Raffles Quay #22-00 Hong Leong Building Executive Vice President Singapore 048581 NOMINATING COMMITTEE Operations Chairperson Ivan Neo Seok Kok Christina Hon Kwee Fong AUDIT PARTNER (Christina Ong) Senior Vice President Kenny Tan Choon Wah Human Resources (appointed 21 July 2017) Zarina Piperdi Members Ng Chin Hwee Chew Teck Soon SIA ENGINEERING COMPANY LIMITED Singapore Company Reg. No.: 198201025C SGX Trading Code: S59.SI Registered Office: 31 Airline Road, Singapore 819831 Tel: +65 6541 5152 Fax: +65 6546 0679 Email: [email protected] www.siaec.com.sg

Company Secretary Lu Ling Ling Tel: +65 6506 9213 Fax: +65 6546 0679

Investor Relations and Public Affairs Tel: +65 6541 5152 Email: [email protected]