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Investor Relations Overview Marine Group is committed to meeting The Board’s responsibility is to oversee the Risk Committee. These committees are made up able to exercise objective judgment on corporate high standards of corporate governance. Its business, affairs and performance of the mostly of independent and/or non-executive affairs independently, in particular, from corporate governance principles reflect its strong SembCorp Marine Group in the best interests of directors. Other ad-hoc committees can be Management. No individual or small group of belief in protecting and enhancing shareholders' its shareholders. The Board focuses its activities formed from time to time to look into specific individuals should be allowed to dominate the value in a sustainable way. The Group firmly on the Group’s key requirements such as: areas when the need arises. Board’s decision making. believes that the professionalism, integrity and commitment of its Board Members and • Providing entrepreneurial leadership and Membership in the different committees is carefully Chaired by Mr Goh Geok Ling, the Board has employees, supported by a sound system of directions for the Group managed to ensure that there is equitable nine directors of whom eight are non-executive policies, practices and internal controls are the distribution of responsibilities among Board directors, and five are independent directors. Mr cornerstones that will enable it to preserve long- • Ensuring prudent and effective controls Members, to maximise the effectiveness of the Tan Kwi Kin who is the Group President and CEO term value and returns for its shareholders. • Setting values and standards to ensure Board and foster active participation and of SembCorp Marine is the executive director. Mr obligations to shareholders are met contribution. Diversity of experiences and Wong Weng Sun, alternate director to Mr Tan, is SembCorp Marine endorses the principles of the • Overseeing the proper conduct of the Group’s appropriate skills are also considered. the President and COO of SembCorp Marine. Code of Corporate Governance issued by the business Exchange Securities Trading Ltd. This In addition, the Board has adopted a set of internal The Board is composed of a majority of non- report outlines SembCorp Marine’s corporate The full Board meets quarterly each year to review controls which sets out approval limits for executive directors, independent of management governance processes and activities for the and discuss reports by management on the transactions, procurement of goods and services, and independent in terms of character and financial year with reference to the principles set performance of the Group, its plans and capital expenditure, investments and divestments, judgement. The criterion of independence is based out in the Code. prospects. Additional Board meetings are also bank borrowings and cheque signatories’ on the definition given by the Code, ie an held where required. A total of five Board meetings arrangements at Board level. Approval sub-limits independent director is one who has no were held in the year, with Board attendances Board of Directors are also provided at Management levels to relationship with the Company, its related shown in the chart below. facilitate operational efficiency. companies or its officers that could interfere or Effective Board to Lead and Effect Controls: be reasonably perceived to interfere with the Principle 1: Every Company should be headed exercise of the directors’ independent judgment To ensure efficient discharge of its responsibilities Strong and Independent Board exercising by an effective Board to lead and control the in the conduct of the Company’s affairs. This and to provide independent oversight of Objective Judgment

Annual Report 2006 company. The Board is collectively responsible Management, the Board has established a number enables the Management to benefit from an for the success of the company. The Board works Principle 2: There should be a strong and of Board committees, including the Audit external and objective perspective on issues that with the Management to achieve this and the independent element on the Board, which is Committee, Executive Resource & Compensation are brought before the Board. Management remains accountable to the Board. Committee, Nominating Committee and Board The Board members for 2006:

Directors’ Attendance at Board Meetings Name of Director Position held Date of first Date of last Nature of

SembCorp Marine Ltd on the Board appointment re-election Appointment Name of Director Scheduled Board Meetings Ad Hoc Board Meetings to the Board as Director Number of Number of Number of Number of Goh Geok Ling Chairman 14 February 2006 24 April 2006 Non-Executive/Non-Independent Meetings held* Meetings Attended Meetings held* Meetings Attended Goh Geok Ling 3 3 1 1 Tan Kwi Kin Group President & CEO 1 April 1990 24 April 2006 Executive/Non-Independent Tan Kwi Kin 4 4 1 1 Tan Pheng Hock Director 16 April 2001 28 April 2004 Non-Executive/Non-Independent Tan Pheng Hock 4 3 1 - Kiyotaka Matsuzawa Director 30 September 2001 21 April 2005 Non-Executive/Independent Kiyotaka Matsuzawa 4 34 11 Tan Tew Han Director 17 April 2003 24 April 2006 Non-Executive/Independent Tan Tew Han 4 4 1 1 Ajaib Haridass Director 31 October 2003 28 April 2004 Non-Executive/Independent Ajaib Haridass 4 4 1 1 Tang Kin Fei Director 1 May 2005 24 April 2006 Non-Executive/Non-Independent Tang Kin Fei 4 4 1 - Haruo Kubota* Director 15 July 2004 21 April 2005 Non-Executive/Independent Haruo Kubota1 2111 Ron Foo Siang Guan Director 30 June 2006 Not Applicable Non-Executive/Independent Ron Foo Siang Guan2 22-- Joseph Kwok Sin Kin Director 30 June 2006 Not Applicable Non-Executive/Independent Joseph Kwok Sin Kin3 22-- Wong Weng Sun Alternate Director to * the number of meetings held during the period the director was a member of the Board 1. Mr Haruo Kubota stepped down as director from 30 June 2006 Tan Kwi Kin 3 May 2006 Not Applicable Executive/Non-Independent 2. Mr Ron Foo Siang Guan was appointed to the Board on 30 June 2006 3. Mr Joseph Kwok Sin Kin was appointed to the Board on 30 June 2006 Hirohiko Sakurai Alternate Director to 4. One of the meetings was attended by Mr Hirohiko Sakurai, the alternate director for Mr Kiyotaka Matsuzawa Kiyotaka Matsuzawa 30 June 2006 Not Applicable Non-Executive/Independent

* Mr Haruo Kubota stepped down as director on 30 June 2006

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Investor Relations

The directors consider that the Board is of the Board Committees The Executive Resource & Compensation The Committee also has access to expert appropriate size and with the right mix of skills SembCorp Marine has four Board committees:- Committee professional advice on human resource matters and experience given the size of SembCorp whenever there is a need to consult externally. • Audit Committee The Executive Resource & Compensation Marine. The Board members comprise business Committee ("ERCC") was chaired by Mr Goh In its deliberations, it takes into consideration • Executive Resource & Compensation Committee leaders, current or retired CEOs, professionals Geok Ling and includes Mr Tan Tew Han, Mr Ajaib industry practices and norms in compensation. with financial background and a practising lawyer. • Nominating Committee Haridass and Mr Tang Kin Fei as members. The Group President & CEO is not present during Profiles of the Directors are found on pages 42 • Risk Committee the discussions relating to his own compensation, to 45 of this Annual Report. terms and conditions of service, and the review The Committee oversees executive compensation of his performance. and development with the aim of building capable Board Composition and Committees at a glance and committed senior management through The Committee meets among its members Board Members Audit Committee Executive Resource & Nominating Committee Risk Committee focused management and progressive policies Compensation Committee which can attract, motivate and retain talented without the presence of Management, at least Goh Geok Ling1 Chairman Chairman executives to meet the current and future needs once a year. For the year in review, it held three Tan Kwi Kin of the Group. To this end, it reviews and approves meetings and achieved full attendance. Tan Pheng Hock remuneration and promotion of key executives Kiyotaka Matsuzawa as well as to decide on issues pertaining to their Nominating Committee development and succession. Hence, it also Tan Tew Han Chairman Member Member Member The Nominating Committee was chaired by establishes guidelines on share options and other Ajaib Haridass Member Member Member Chairman Mr Goh Geok Ling and includes Mr Tan Tew Han, long term incentives plans and approves the grant Tang Kin Fei Member Member Member Mr Ajaib Haridass and Mr Tang Kin Fei as of such incentives to key executives. The Ron Foo Siang Guan2 Member members. underlying philosophy is to motivate executives 3 Joseph Kwok Sin Kin Member to maximise operating and financial performance 1 Appointed on 14 February 2006 2 Appointed on 30 June 2006 and shareholders’ value. Although the Nominating Committee and the 3 Appointed on 30 June 2006 ERCC do not comprise of a majority of independent directors within the definition of The Audit Committee On an annual basis, the Committee conducts a

Annual Report 2006 the Code, the Chairman is independent of succession planning review of the Group President Principle 11: The Board should establish an Audit statements at Group and company levels before Management. The Committee is therefore & CEO, all his direct reports, and selected key Committee with written terms of reference which they are submitted to the Board for approval. The independent as a whole. clearly set out its authority and duties. Committee also recommends the appointment positions in SembCorp Marine. Potential internal of the external auditors. and external candidates for succession are reviewed for different time horizons of immediate, The primary purpose of this Committee is to The Audit Committee comprises three medium-term and longer-term needs. support and advise SembCorp Marine, its

SembCorp Marine Ltd independent directors: Mr Tan Tew Han as In its role, the Audit Committee assists the Board unlisted subsidiaries and, where applicable, Chairman, Mr Ajaib Haridass and Mr Ron Foo of Directors in fulfilling its fiduciary responsibilities unlisted associated companies by nominating The Committee further reviews the remuneration Siang Guan as members. During the year under relating to corporate accounting and reporting suitable candidates who are best able to of its non-executive directors, executive director review, the Committee held six meetings, practices of the Group, and in respect of interested discharge their responsibilities as directors. This and senior executives, as well as major human where all members participated actively at all person transactions, its responsibility to act in means evaluating the balance of skills, knowledge resource management and compensation policies the meetings. the interest of the shareholders as a whole. The and experience of these boards and assessing and practices for the rest of the Group. While the Committee meets with the external and internal the candidates for their regard for the law and Committee’s Chairman is not independent, he is auditors, without the presence of Management, the high standards of governance practised by The main responsibility of the Audit Committee a non-executive director independent of at least once a year to review the cooperation the Group. Appointments to these boards are is to review with the external auditor, internal Management with a clear separation of his role and assistance given by Management to them. made on merit and against objective criteria. auditor and Management, the Group’s general from Management in deliberations of the The Nominating Committee ensures that policies and control procedures, interested Committee. No ERCC member or any Director appointees have enough time available to devote persons transactions, as well as any matters or The Audit Committee has reviewed the non-audit is involved in deliberations in respect of any to their directorship roles. The independence issues that affect the performance of the Group. services provided by its external auditors to the remuneration, compensation, options or any form of each director is reviewed annually by the It reviews the quarterly, half-yearly and annual Group, and is satisfied that the provision of non- of benefits to be granted to him. results announcements as well as the financial audit services by the external auditors did not Nominating Committee. impair their independence as external auditors.

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Risk Committee The Chairman, who is non-executive, takes a businesses and that each director brings to the the contribution by each director to the The Risk Committee was formed in April 2005 as leading role in the SembCorp Marine Group’s Board an independent and objective perspective effectiveness of the Board. part of SembCorp Marine’s effort to formalise drive to achieve and maintain a high standard of to enable balanced and well-considered decisions corporate governance with the full support of the to be made. and strengthen its risk management framework Newly-appointed directors are given briefings by directors, Company Secretary and Management. and processes. Prior to its formation, its role and the Management. Facility visits to the premises functions were carried out by the Audit Committee. SembCorp Marine believes that all directors are also arranged to enable them to acquire an He is responsible for the leadership of the Board, should be submitted for re-election at regular understanding of the Group, its business activities Currently, the Risk Committee comprises four ensuring its effectiveness on all aspects of its intervals, subject to continued satisfactory and its strategic directions. Existing directors are members, namely Mr Ajaib Haridass as Chairman, role and setting its agenda. He acts independently performance. The Group President, while also a also invited to such facility visits and orientation Mr Tan Tew Han, Mr Tang Kin Fei and Mr Joseph in the best interests of the Group and board member, is also required to retire and offer programmes. Kwok Sin Kin as members. shareholders. Meanwhile, the Group President himself for re-election by shareholders as part of is charged with the executive responsibility of board renewal. As nominations and election of Changes to regulations and accounting standards running the Group’s business. The Chairman Board members are the prerogatives and are monitored closely by Management. To keep The Committee’s primary role and function is to facilitates the contribution of non-executive proper rights of all shareholders, the Board pace with regulatory changes, where these assist the Board of Directors in fulfilling its directors in particular and ensures constructive ensures the planned and progressive refreshing changes have an important bearing on the Group’s oversight responsibilities in risk management by relations between executive and non-executive of its members. or directors’ disclosure obligations, Directors are reviewing:- directors. He also ensures that the members of briefed either during Board meetings, or at the Board work together with the Management The Company’s Articles of Association require specially-convened sessions, including at trainings in constructive debate on various matters, • The adequacy and effectiveness of the Group’s one-third of directors to retire and subject and seminars conducted by external professionals. including strategic issues and operational issues. risk management plans, systems, processes themselves for re-election by shareholders at Where necessary, the Group also sponsors its and procedures of the Group every Annual General Meeting (AGM) (“one-third Directors to training, courses and seminars such • Group-wide risk policies, guidelines and controls Formal Appointment and Re-Election of rotation rule”). In other words, no director stays as new or changes in laws, regulations and and procedures Directors in office for more than three years without accounting standards, which are of relevance to • The risk portfolio and risk levels including the Principle 4: There should be a formal and being re-elected by shareholders. At the the Group. treatment of identified risks transparent process for the appointment of new forthcoming AGM, Mr Tan Pheng Hock, Mr Kiyotaka Matsuzawa and Mr Ajaib Haridass will directors to the Board. Informal reviews of a Board’s performance are

Annual Report 2006 each submit themselves for retirement and re- undertaken on a continual basis by the Nominating During the year in review, the Risk Committee election by shareholders pursuant to the one- Committee with inputs from the other Board held four meetings, and all members participated The Board does not believe it is possible to third rotation rule. actively at all the meetings. compile a list of criteria which are appropriate to members and the Group President. The Board characterise, in all circumstances, whether a non- composition is constantly reviewed to ensure In addition, newly-appointed directors will submit strong, independent and sound leadership for the Chairman and Chief Executive Officer executive director is independent. It is the approach and attitude of each non-executive himself for retirement and election at the AGM continued success of the Group’s business. The SembCorp Marine Ltd Principle 3: There should be clear division of director which is important. The Board aims for immediately following his appointment. Thereafter, Board recognizes the contribution of directors responsibilities at the top of the company – the diversity of knowledge and experience he is subject to the one-third rotation rule. Mr who over time have developed deep insights into working of the Board and the executive among its members in relation to the various Ron Foo Siang Guan and Mr Joseph Kwok Sin the Group’s businesses and would exercise its responsibility of the Company’s business – businesses of the Group and the international Kin, who were both appointed to the Board on discretion to retain the services of such directors. which will ensure a balance of power and authority, nature of the Group. 30 June 2006, will each submit themselves for such that no one individual represents a retirement and re-election by shareholders at the Full access to Information and Resources considerable concentration of power. forthcoming AGM. The Board, through the delegation of its authority Directors have Complete, Adequate and Timely to the Nominating Committee, has used its best Information and Resources There is a clear separation of the roles and Board performance and conduct of its affairs efforts to ensure that directors appointed to the Principle 6: In order to fulfil their responsibilities, responsibilities between the Chairman and the Active Participation and Valuable Contributions Board possess the background, experience and the Board members should be provided with Group President. The Group President is not are key to Overall Effectiveness of the Board knowledge in technology, business, finance complete, adequate and timely information prior related to the Chairman, Mr Goh Geok Ling. and management skills critical to the Group’s Principle 5: There should be a formal assessment to board meetings and on an on-going basis. of the effectiveness of the Board as a whole and

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As a general rule, Board papers are sent to committees. She assists the Board on compliance granted and its fair value are available on pages directors needed to run the Company successfully directors a week before a board meeting so that with the Company’s Memorandum and 135 to 140 and page 201 of the Annual Report, but companies should avoid paying more than is they have the relevant information for Articles of Association, laws and regulations, respectively. necessary for this purpose. A significant proportion consideration and deliberation at the meeting. including requirements of the Companies Act, of executive directors’ remuneration should be Managers who can provide additional insight into Securities Futures Act, the structured so as to link rewards to corporate and The basis of allocation of the number of share the matters at hand would be present at the Securities Trading Ltd (SGX-ST), the Accounting individual performance. options takes into account a director’s relevant time during the board meeting. and Corporate Regulatory Authority and contributions and additional responsibilities at shareholders. The Company Secretary assists board committees. The report on directors’ Disclosure on Remuneration the Board to upkeep and implement good Management provides adequate and monthly remuneration is found on page 209 of the Annual corporate governance and best practices Principle 9: Each company should provide clear management and other financial statements to Report. across the Group. disclosure of its remuneration policy, level and the Board on business issues that require the mix of remuneration, and the procedure for setting Board’s decision as well as ongoing reports The fee structure for the directors had been remuneration in the company’s annual report. It relating to the Group’s operational and financial Competitive Remuneration Report revised by the Board in 2006 after benchmarking should provide disclosure in relation to its performance. Where a physical Board meeting Remuneration of Directors Adequate and not the directors fees against those in the public and remuneration policies to enable investors to is not possible, timely communication with Excessive private sectors. SembCorp Marine believes that understand the link between remuneration paid members of the Board is effected through the fees are competitive and its directors are to directors and key executives, and performance. electronic means which include electronic mail, Principle 7: There should be a formal and adequately compensated and in line with teleconferencing and videoconferencing. transparent procedure for developing policy on market norms. Alternatively, Management will arrange to meet executive remuneration and for fixing the SembCorp Marine adopts an incentive and brief each director personally before seeking remuneration packages of individual directors. compensation plan for key executives tied to the the Board’s approval. No director should be involved in deciding his The directors’ fee for 2006 is $767,125 ($353,832 creation of economic value add, as well as the own remuneration. in 2005) and is derived using the following rates: attainment of individual performance goals. An individual’s incentive compensation is linked to The Board has separate and independent access Type of appointment $ the economic-value-add created by SembCorp to the Group President, members of senior The Group President, as Executive Director, does (i) Board of Directors Marine Group and its subsidiaries. management and the Company Secretary at all not receive director’s fees. He is a lead member of Management. His compensation consists of - Basic Fee 50,000 times. Directors are also provided with the names - Chairman’s allowance 45,000 his salary, allowances, bonuses, performance A “bonus bank” is used to hold incentive

Annual Report 2006 and contact details of senior management and - Vice Chairman’s allowance 25,000

the Company Secretary to facilitate direct access share and restricted share awards conditional (ii) Audit Committee compensation credited in any year. Typically, one- to them. Where necessary, independent upon his meeting certain performance targets - Chairman’s allowance 40,000 third of the available balance is paid out in cash professional advice and consultations will be (details are available on page 138 to 140 of the - Members’ allowance 25,000 each year, with the balance being carried forward made available to directors to ensure that full Annual Report) and options. Details on share (iii)Risk Committee to the following year. Such carried forward - Chairman’s allowance 25,000 information and advice are available before plans granted and its fair value are available on balances may either be reduced or increased in pages 135 to 140 and page 201 of the Annual - Members’ allowance 15,000 future, based on the yearly economic-value-add important decisions are made by the Board. All (iv)Executive Resource & Compensation SembCorp Marine Ltd issues are actively debated by the Board and Report, respectively. Committee/ Nominating Committee performance of the SembCorp Marine Group and properly recorded. - Chairman’s allowance 25,000 its subsidiaries. Non-executive directors have remuneration - Members’ allowance 15,000 Notes: Likewise, the Audit Committee must also meet packages that consist of a directors’ fee Mr Tan Kwi Kin, as an Executive Director, does not receive director’s fee The Board has decided not to prepare a separate component according to SembCorp Marine’s remuneration report as most of the information the external and internal auditors separately at The detailed breakdown of Directors’ least once a year, without the presence of the Directors’ Fee Policy, an attendance fee is found in the directors’ report. This Annual Report component and a share options component remunerations are found at page 209 of the has indicated where the information required to Group President and other senior management Annual Report. members, in order to have the free and unfiltered according to SembCorp Marine’s Employee Share be disclosed can be found. access to information that it may require. Option Plan. SembCorp Marine does not have a retirement plan for non-executive directors. The Competitive Reward System to Ensure Highest To provide a macro perspective of the Directors’ Fee Policy is based on a scale of fees Performance and Retention of Best Talents remuneration patterns of key executives, while The Company Secretary assists the Chairman by divided into basic retainer fees as director and and Key Executives maintaining confidentiality, the following table preparing meetings’ agenda, attending and additional fees for attendance and service on Principle 8: The level of remuneration should be shows the numbers of key employees in preparing minutes of Board proceedings, ensuring Board committees (details are available on page appropriate to attract, retain and motivate the remuneration bands of S$250,000 from S$100,000. good information flows within the Board and its 30 of the Annual Report). Details on share options

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Remuneration Band for Key Executives engineering, procurement and construction, includes the tools developed to facilitate reporting other committees established by the Audit Remuneration Band No. of Employees including contract and variation orders and monitoring such as the project risk Committee for such purposes without fear of management, resulting in unprofitable projects management reporting templates. The next major reprisal. The establishment of the whistle-blowing $500,000 to $749,999 7 step in the ERM process is to conduct compliance structure also augments the Group’s ability to $250,000 to $499,999 - audits in areas where no existing audit framework detect potential fraud, providing another level of • Health, safety, security and environment risks is in place for example, Project Management. The comfort and assurance to investors. $100,000 to $249,999 1 (“HSSE”) audit protocol was developed and is being applied Inadequate HSSE management, resulting in in one of the business units. Internal Controls and Risk bodily harm and property damages, in particular, Internal Audit Management from fire and explosion hazards, falling from Independent Internal Audit Function For Business Continuity Plan ("BCP") management, Principle 12: The Board should ensure that the height and pollution of the environment. the focus has been on crisis handling procedures Principle 13: The Company should establish an Management maintains a sound system of internal in relations to Flu Pandemic and terrorism. The internal audit function that is independent of the controls to safeguard the shareholders’ • Financial risks business units’ Flu Pandemic BCP has been activities it audits. investments and the company’s assets. Inadequate attention and mitigation measures aligned within the Group via the SembCorp Marine against risks associated with foreign exchange checklist for Flu Pandemic BCP. The business SembCorp Marine’s internal audit function is Internal Controls and interest rates fluctuations and provision of units’ International Ship and Port Facility Security supported by the Internal Audit Department which The Company’s controls are implemented through guarantees, resulting in financial losses. (ISPS) status continues to keep current their reports on audit matters directly to the Audit their risk assessment and evaluation processes response plans against possible terrorism threats. Committee Chairman and administratively to the and internal audit processes for key business In addition to the BRC proceedings, the Group Group President. This department plans its internal activities. Whistle blowing procedures have also President & CEO chairs the Project Management The Group's risk management systems and audit schedules in consultation with, but been set up to add another avenue for controls. meetings, which focus on the execution of processes are constantly reviewed and updated independent of, Management. Its plan is submitted the major projects. The Project Management to be current with the dynamic business to the Audit Committee for approval at the beginning of each year. Risk Management meetings monitor, in particular, the engineering, environment. Where applicable, the various risk procurement and construction schedules and management initiatives are embedded into the Since the introduction of the Enterprise Risk resource allocations. work systems and processes at the various levels Management ("ERM") programme in 2004, all the To ensure that the internal audits continue to be of the Group, so that the related risks are detected major shipyards in the Group have integrated this performed by competent professionals, Internal

Annual Report 2006 and flagged out timely, for effective mitigation programme into their management systems. The For HSSE risks, the Group Safety Committee Audit Department continues to recruit and employ and control actions. This will enable the Group latest business unit addition to the Group, SMOE focused on 5 major programmes: Risk Management, suitably qualified staff. The internal audit function to remain on track to achieve its business goals Pte Ltd, has also adopted this programme. Group HSE conference, Health Management provided by the department continues to meet and growth plans. programme, Fatigue Management and the Best with the standards set by the Institute of Internal Practice Manual. Auditors. Through the ERM programme, the Group reviewed Whistle-Blowing Policy the risks register and have identified key risks. SembCorp Marine Ltd The Group has established policies, guidelines For Financial Risks, the focus was on managing The Group has adopted a constructive whistle- Communication with and control procedures, including monitoring and the rapidly declining US$ vis-à-vis the S$. The blowing culture to detect and deter wrongdoing Shareholders in preparing and implementing accurate and reporting systems across its business units, to forward net US$ flow was closely monitored and The Board is accountable to the shareholders manage its exposure to such risks. the hedging proposal, approved by the Board, was complete financial policies, reports and materials executed. In addition, the procedure for adoption as well as the internal controls essential to support Principle 10: The Board should present a balanced of the US$:S$ rate for contract tendering and cost its financial and accounting systems. and understandable assessment of the company’s The management has developed the risk monitoring was formalised for Group-wide performance, position and prospects. treatment plans and the status of the top three implementation. The Group's financial risk risk categories are reported and monitored at the Demonstrating its pledge to good corporate management is covered in greater detail in the Regular, Effective and Equal Communications Board Risk Committee ("BRC") meetings. governance, the Group provides an avenue for notes to the financial statements. employees to bring their complaints responsibly to Shareholders to report any possible improprieties in matters Principle 14: Companies should engage in The top three risk categories are: SembCorp Marine's Risk Management unit works of financial reporting or other matters that they regular, effective and fair communication with • Project management risks closely with the business units to review and may encounter to the Audit Committee or any shareholders. Inadequate control and management of update the ERM framework and methodology. This

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SembCorp Marine strives to provide a fair and Greater Shareholder Participation at General accurate view on the affairs of the company on Meetings an ongoing basis. As co-owners of SembCorp Principle 15: Companies should encourage Marine, shareholders are entitled to timely and greater shareholder participation at AGMs, complete information on financial data, material and allow shareholders the opportunity to developments as well as an understanding of communicate their views on various matters business directions and prospects. The Board affecting the company. provides shareholders with an assessment of the Company’s performance, position and prospects on a quarterly basis via quarterly announcements SembCorp Marine recognises that good corporate of results and announcements on significant governance requires active participation of transactions as required by the SGX-ST. shareholders in the decision-making at the general meetings of shareholders. Shareholder participation is encouraged at general meetings. All SembCorp Marine’s price-sensitive information Information on meetings of shareholders are made is disseminated to its shareholders via the through notices published in the newspaper and SGXNET so as to ensure all shareholders have reports or circulars sent to all shareholders. All access to material information at the same time. registered shareholders are invited to participate Financial and other performance data of the Group in shareholder meetings. If they do not wish to as a whole as well as by business segments are attend in person, they can issue instructions to given at the release of quarterly results. This accept, reject or abstain on each individual item allows shareholders to gain better insight into the on the meeting agenda by giving instructions to earnings drivers within SembCorp Marine. their proxy. He or she is allowed to appoint up to two proxies to vote on his or her behalf at the During the release of earnings results, the meeting through proxy forms sent in advance. announcement is first released by SGXNET onto the SGX-ST website. Thereafter a briefing or SembCorp Marine also allows CPF Investors to

Annual Report 2006 teleconference by Management is held for the

attend General Meetings as observers. The media and analysts. All materials used at the Chairman, Group President as well as the briefing will be available on SGXNET as well as Chairman of the Audit Committee will be present the corporate website at www.sembcorpmarine. together with the Chief Financial Officer, the com.sg. Company Secretary and external auditors to answer questions raised by shareholders. Minutes

SembCorp Marine Ltd Following any release of earnings or price-sensitive of shareholder meetings are available on request developments, investor relations personnel are by registered shareholders. its officers during the period commencing the levels and procedures to obtain approval for available by email or telephone to answer two weeks prior to the announcement of the such transactions. Information regarding the Mandate is available on the corporate website at questions from shareholders and the media as For further details on SembCorp Marine Company’s quarterly results. Directors and www.sembcorpmarine.com.sg. All strategic long as the information requested does not conflict communications with its shareholders, see the executives are also expected to observe insider business units are required to be familiar with the with the SGX-ST’s rules of fair disclosure. “Investor Relations” section of the Annual Report. trading laws at all times even when dealing in securities within the permitted trading period. Mandate and report any such transactions to the Finance Department. The Finance Department Apart from the regular briefings provided to media Dealings in Securities keeps a register of the SembCorp Marine’s and analysts, the investors’ relations team and Interested person transactions SembCorp Marine has adopted a Code of interested person transactions. Information on Management also travel regularly to attend Shareholders have adopted a shareholders interested person transactions for 2006 is found overseas road shows and conferences to reach Compliance on Dealing in Securities, which prohibit dealings in the Company’s securities by Mandate (“Mandate”) relating to interested person in page 210. out to institutional investors. transactions of the Group. The Mandate sets out

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BOARD OF DIRECTORS Annual Report 2006 Annual Report 2006

SembCorp Marine Ltd SembCorp Marine Ltd Mr Tan Pheng Hock Mr Tang Kin Fei Mr Goh Geok Ling Mr Tan Kwi Kin Mr Wong Weng Sun Mr Ron Foo Siang Guan Mr Tan Tew Han Mr Ajaib Haridass Mr Joseph Kwok Sin Kin Mr Hirohiko Sakurai Non-Independent Non-Independent Chairman & Non- Group President,CEO President & COO Independent Director Independent Director Independent Director Independent Director Alternate Director to Mr Kiyotaka Director Director Independent Director & Non-Independent Alternate Director to Matsuzawa, Independent Director Director Mr Tan Kwi Kin (Not in the picture)

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Mr Tan Kwi Kin SembCorp Marine on 16 April 2001 and was last since July 2001. In 1978, he was assigned to IHI's Group President and Non-Independent Director re-elected as Director on 28 April 2004. Mr Tan is Brazilian subsidiary company ISHIBRAS as the Mr Tan Kwi Kin, currently the Group President and the Chairman of the Nanyang Polytechnic Board of General Manager for eight years where he initiated Chief Executive Officer of SembCorp Marine, has Governors, Deputy Chairman of Singapore Workforce and promoted ship exports from Brazil to clients been a Director of the Board since 1 April 1990. A Development Agency and also a member of the worldwide under the Brazilian Government Promotion veteran in the marine industry in Singapore, Mr Tan Temasek Defence Systems Institute, the Singapore Program. His past directorships included IHI has 41 years of working experience in Jurong Training and Development Association Advisory Marine Engineering (S) Pte Ltd. Mr Matsuzawa Shipyard. He started his career with Jurong Council, the Building and Construction Authority, graduated from the Hitotsubashi University, Japan, Shipyard in 1966 as a Junior Engineer in the Design and the Singapore Quality Award Governing Council. in 1971 with a Bachelor of Economics. He also holds Mr Goh Geok Ling a Diploma in Business Administration from the

Annual Report 2006 Department. He was promoted to Manager in charge Chairman and Non-Independent Director Federal University of Bahia, Brazil. Mr Goh Geok Ling was appointed the Chairman of Production Control in 1975 and General Manager Mr Tan began his career as an engineer at ST Marine and Director of SembCorp Marine on 14 February in 1981. In 1990, he was appointed Managing in 1981. He later became Executive Vice President 2006. Mr Goh worked in the electronic industry Director. When Sembawang Shipyard merged with of ST Marine, President of ST Kinetics, President & Mr Richard Tan Tew Han for 29 years before retiring from active business Jurong Shipyard in 1997, Mr Tan was appointed COO of ST Engineering and ST Engineering Group Independent Director management in October 1999. He last worked as President of the Jurong Shipyard group of companies. President. His past directorships in listed companies Mr Richard Tan was appointed Director of SembCorp the Managing Director of Micron Semiconductor include Unicorn International. Mr Tan holds a Marine on 17 April 2003. He brought with him an SembCorp Marine Ltd Asia Pte Ltd. Prior to that, he was the Managing Following a restructuring and a name change in Bachelor of Science (First Class Honours) in Marine impressive 25 years of banking experience. He held Director of Texas Instruments Singapore Pte Ltd November 1999, Mr Tan became the President and Engineering from the University of Surrey, UK, and several senior positions in Citibank, Banque Paribas, where he worked for 28 years. Chief Executive Officer of SembCorp Marine and a Masters of Science in Management from Stanford Bank of America, International Bank of Singapore also the Chairman of Jurong Shipyard. He also chairs University, USA. and Overseas Union Bank. Prior to his retirement in 2001, he was the Executive Vice President Currently, Mr Goh serves as a board member of the boards of Sembawang Shipyard, PPL Shipyard, JPL Corporation, Jurong Integrated Services and and Head of Investment Banking and Corporate DBS Bank Ltd, DBS Bank Holdings Ltd, SembCorp Kiyotaka Matsuzawa Finance Division in OUB since 1993. His other board Jurong Machinery and Automation. Mr Tan graduated Independent Director Industries Ltd, Venture Corporation Ltd and appointments are at ST Asset Management, Full from Tokyo University, Japan, in 1965 with a Bachelor Mr Kiyotaka Matsuzawa was appointed Director 02Micro International Ltd. He is also a Member of Apex (Holdings) Limited, Asia Water Technology of Engineering (Mechanical). of SembCorp Marine on 30 September 2001. the Board of Trustee of Nanyang Technological Ltd, Lux King Group Holdings Ltd and C&O Mr Matsuzawa has had a distinguished career in University. His past directorships in listed Pharmaceutical Technology (Holdings) Ltd. Mr Tan IHI. He was the former General Manager of Ships companies included Tuas Power Ltd, ASTI Holding Mr Tan Pheng Hock graduated from the University of Singapore with a & Offshore Department of IHI. He is presently the Ltd and Singapore Technologies Pte Ltd. Mr Goh Non-Independent Director Bachelor of Science (Honours) in 1970 and obtained Director and General Manager of IHI Marine United graduated from Sydney University with a Bachelor Mr Tan Pheng Hock is the President & CEO of an MBA in 1978 from the University of British Inc. Japan prior to his previous position as Managing of Engineering Degree. Singapore Technologies (ST) Engineering and an Columbia, Canada. Executive Director. He was appointed Director of Director of IHI Marine Engineering (Singapore)

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Mr Ajaib Haridass Mr Tang also serves as a director of International Independent Director Enterprise Singapore and is its Chairman of its 2006 Mr Ajaib Haridass was appointed a Director of Finance & Investment Committee and a member of SembCorp Marine on 31 October 2003. He is its Network China Steering Committee. He is also a currently the Managing Partner of Haridass Ho & director of BIL International and an Advisory Committee Partners, a legal firm he set up in 1985. With more member of the ENV-NTU Environmental Engineering than 30 years of legal experience, Mr Haridass Research Centre. Mr Tang’s past directorships in listed specialises in all admiralty matters, both litigious companies include positions on the Boards of Camerlin and non-litigious, from ship sale and purchase, Group and SembCorp Logistics. He holds a First the financing aspects of such transactions, Class Honours degree in Mechanical Engineering from marine insurance, to general commercial and the National University of Singapore and underwent banking litigation. the Advanced Management Programme at INSEAD.

Mr Haridass is also an accredited mediator of the Mr Ron Foo Siang Guan Singapore Mediation Centre, a member of the Independent Director Advisory Committee of the Singapore Chamber of Appointed a Director of SembCorp Marine on June Maritime Arbitration, an arbitrator of the Korean 30, 2006, Mr Ron Foo brings with him more than 35 Commercial Arbitration Board, President of the years of extensive auditing, accounting and financial Maritime Law Association of Singapore, a member experience in Singapore and overseas. He has been of the Singapore Maritime Arbitrators Association a partner in PricewaterhouseCoopers, Singapore for and a panel member for Disciplinary Inquiries at the 22 years before retiring from active service in December Public Service Commission. Mr Haridass is also a 2005. Mr Foo is presently a director of the Singapore member of the Board of Visiting Justices, Board of Deposit Insurance Corporation and NTUC Income Inspection (Prisons Department) and Board of Visitors Insurance Co-Operative Limited and a member of the (Welfare Homes), Ministry of Community Competition Appeal Board. Development, Youth & Sports. In addition, he is the Vice Chairman of the Home Detention Advisory Mr Foo has also been actively involved as a council Mr Kwok is currently a director of Elmida Pte Ltd, a He also obtained a Masters in Business Administration Committee, Ministry of Home Affairs in Singapore, member in the Institute of Certified Public Accountants council member of American Shipping Bureau "ABS" from Oklahoma City University in 1993. Mediator at Small Claims Tribunal and Criminal Annual Report 2006 of Singapore (ICPAS) and was awarded the ICPAS and the Chairman of ABS South East Asia Regional Relational Disputes, Subordinate Courts and a Gold Medal 2004 in recognition of his outstanding Committee. His past appointments included Commissioner for Oaths, Notary Public and Justice Mr Hirohiko Sakurai contributions and distinguished service to the directorships in MPA Venture Pte Ltd and AET Bhd, of Peace. Alternate Director accounting profession and the community. Presently as well as various subsidiaries and associated Mr Hirohiko Sakurai was appointed Alternate Director he is a Fellow of the Institute of Certified Public companies of NOL and AET. He was previously an to Mr Kiyotaka Matsuzawa on 30 June 2006. He is Graduating from the University of London in 1974 Accountants of Singapore and a member of the Executive Committee member of INTERTANKO and currently the Managing Director of IHI Marine with a Bachelor of Law (Honours), Mr Haridass was Canadian Institute of Chartered Accountants, Canada. a board member of ABS, BIMCO, UK P&I Club, and

SembCorp Marine Ltd Engineering (S) Pte Ltd. Prior to that, he was the called to the English Bar at the Middle Temple in International Tanker Owner Pollution Federation Ltd. General Manager of Ship Sales, IHI Marine United, 1975 and admitted as an Advocate & Solicitor of from 2004 to 2006 and Ship Sales Manager of IHI the Supreme Court of Singapore in 1976. Mr Joseph Kwok Sin Kin Independent Director Mr Wong Weng Sun Tokyo Head Office from 1999 to 2004. Mr Joseph Kwok was appointed a Director of Alternate Director Mr Tang Kin Fei SembCorp Marine on June 30, 2006. Currently the Mr Wong Weng Sun was appointed Alternate Director Mr Sakurai joined Ishikawajima-Harima Heavy Non-Independent Director CEO of Carlisle Leasing International and Seacastle to Mr Tan Kwi Kin on 3 May 2006. He is the President Industries Co. Ltd (IHI) in 1981 as a Business Mr Tang Kin Fei was appointed a Director of Inc., Mr Kwok's distinguished career in the marine & COO of SembCorp Marine and the Managing Administration Executive of IHI Aioi No. 1 Works SembCorp Marine on 1 May 2005, and is currently industry includes several key appointments in the Director of Jurong Shipyard. Prior to this, he served before progressing on to the Ship Sales Department the Group President & CEO of SembCorp Industries. Neptune Orient Lines (NOL) Group from 1981 to 2003. as Deputy President of SembCorp Marine from of IHI Tokyo Head Office in 1986. He moved on to Mr Tang first joined the SembCorp Group in 1987 During his 22-year tenure with NOL, Mr Kwok had January 2005 to January 2006 and was the Executive become manager of IHI Europe’s Marine Department and was appointed President & CEO of SembCorp served as Group COO, CEO of Chartering Division, Director of Jurong Shipyard from January 2002 to in 1994, and was later appointed Marine Department Utilities in 1998, where he was responsible for CEO of Enterprises Division, and Chairman of Neptune June 2004. Mr Wong joined the company in 1988 as General Manager and Chief Representative of IHI transforming the unit from a process engineering Shipmanagement Services Pte Ltd (NSSPL). Following an engineer and was later appointed General Manager Greece Office between 1995 and 1999. Mr Sakurai business into a leading centralised utilities and that, he led American Eagle Tankers Inc (AET), a in charge of project management. Mr Wong graduated graduated from the Yokohama National University energy provider and expanding its presence to wholly-owned subsidiary of MISC Berhad, as President from the University of Technology, Malaysia, in 1986 of Japan with a Bachelor of Economics in 1981. China, UAE, UK and Vietnam. & CEO between 2003 and 2005. with a Bachelor of Mechanical Engineering (Marine).

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KEY MANAGEMENT PROFILE

Tan Kwi Kin Lee Yeok Hoon Mr Tan Kwi Kin is the Group President and CEO of Mr Lee has been the Executive Director of Jurong SembCorp Marine and a Director of SembCorp Shipyard since July 2004. From February 2000 to Marine Board. (Mr Tan’s profile can be found on June 2004, he was the General Manager in charge of page 42). production in Jurong Shipyard. He joined the company in 1970 as a design engineer after graduating from Singapore Polytechnic with a Diploma in Mechanical Wong Weng Sun Engineering. Mr Wong Weng Sun is the President and COO of SembCorp Marine. (Mr Wong’s profile can be found on page 45). Wong Lee Lin Ms Wong has been the Executive Director of Sembawang Shipyard since July 2004. Prior to that, Ong Poh Kwee she was the General Manager at Sembawang Shipyard Mr Ong is the Deputy President of SembCorp Marine. since January 2002. Ms Wong graduated from the He has been the Managing Director of Sembawang University of Singapore with a Bachelor of Social Tan Kwi Kin Wong Weng Sun Ong Poh Kwee Group President & CEO President & COO Deputy President Shipyard since July 2004. He formerly held the Sciences (Honours) in 1974 and joined the company Managing Director, Jurong Shipyard Managing Director, Sembawang Shipyard positions of Executive Director of Sembawang as an officer in 1975. Shipyard and General Manager and Managing Director of Karimun Sembawang Shipyard. He joined the company in 1987 as an engineer, the same year Ong Tian Khiam he graduated from the University of Newcastle- Mr Ong has been the Managing Director of PPL Upon-Tyne, United Kingdom, with a Bachelor of Shipyard since November 1997. Prior to that, he held Marine Engineering. He also abtained a Masters of positions as Deputy Managing Director and Managing Business Administration from the Sloan School of Director in Sembawang Maritime and Sembawang Management, Massachusetts Institute of Technology, Bethlehem respectively. He was also the Managing United States in 2000. Director in charge of the development of Karimun Shipyard. When Mr Ong graduated from the University of Singapore with a Bachelor in Mechanical Wee Sing Guan Engineering in 1969, he joined Sembawang Shipyard

Annual Report 2006 Mr Wee is the Director of Group Finance. He was as a graduate management trainee. He then moved the Chief Financial Officer of SembCorp Marine to hold several positions at Far East Levingston from February 2000 to March 2006. He first joined Shipbuilding between 1970 and 1979 and at Promet Wee Sing Guan Wong Peng Kin Lee Yeok Hoon the company as an accountant in 1974 and later Private Limited between 1978 and 1989 before Director, Director, Executive Director Group Finance Group Human Resource Jurong Shipyard held the position of Financial Controller before rejoining the Group. assuming his current appointment. Mr Wee graduated from Nanyang University in 1972 with a Bachelor

SembCorp Marine Ltd in Commerce. Ho Nee Sin Mr Ho Nee Sin has been the Managing Director of SMOE since October 2006. Prior to that, he was the Wong Peng Kin CEO of SembCorp Utilities China from 2004. Mr Ho Mr Wong has been a Director of Group Human started his career in Jurong Shipyard in 1969. He was Resource at SembCorp Marine since July 2004. transferred to Jurong Engineering when the company From February 2000 to June 2004, he was the Senior was first established in 1971 where he was later Vice President of Human Resources. He joined the promoted to the position of General Manager. He company in 1970 as an officer in the Personnel held other senior positions in several companies, Department. Mr Wong graduated from the University including Pacific Dunlop Company in Australia in 1989, of Singapore with a Bachelor of Business Sembawang Projects Engineering Company in 1991 Administration (Honours) in 1970. and Oriental Petrochemical Corporation of Hong Kong in 2003. Mr Ho graduated from Imperial College, Wong Lee Lin Ong Tian Khiam Ho Nee Sin University of London with a Masters of Science degree. Executive Director Managing Director Managing Director Sembawang Shipyard PPL Shipyard SMOE

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INVESTOR RELATIONS Regular meetings with analysts Yard tours for analysts and and fund managers investment community In addition to the briefing and presentation To provide analysts and investors with deeper meetings held as part of the mandatory reporting insights into the dynamics of the different core cycle, regular meetings on a one-on-one basis businesses, SembCorp Marine’s investor relations were held at the requests of the analysts, team organised periodic site tours of the shipyard investors and fund managers, both local and facilities. Representatives from the analyst, media foreign. Senior management continued to play and investment communities were also invited an active role in these meetings with the Group to christening ceremonies for the benefit of President, President, Deputy President, Chief understanding the nature of the business, touring Financial Officer, business unit heads and the of the vessels or rigs, interacting with management Senior Vice President of Investor Relations & and listening to customers views on the outlook Communications often in attendance. of the respective sectors of the industry.

2006 Investor Relations Calendar Date Event 23 January Participation in BNP Paribas Conference in Singapore 14 February Full Year 2005 Financial Results Analysts and media briefing and presentation 15 February Post-results briefing and luncheon meeting with institutional funds organised by CIMB in Singapore 16 - 17 February Non-deal road show with Nomura in Hong Kong 23 March Tour of PPL Shipyard & Jurong Shipyard by Macquarie cents 16 77% Record FY 2006 Dividend Payout at 4 - 5 April Non-deal road show with Nomura in Dubai and Abu Dhabi 15.00 15.0 cents per share (13.5 cents + 1.5 Annual Report 2006

11.50 24 April Annual General Meeting & Extraordinary General Meeting 14 cents one-tier tax exempt dividend) versus 9.5 cents in FY 2005 1 - 3 June Non-deal road show with JP Morgan in Europe Management Guidance : Not lower 22 - 24 June Non-deal road show with DBS Vickers in London and Edinburgh 12 than 75% in payout ratio

25 - 27 June Participation in Citigroup Corporate Day in London and New York 91% 10 Commitment to Enhancing 28 - 29 June Non-deal road show with DBS Vickers in New York and Boston 9.50 SembCorp Marine Ltd 7.00 Shareholder Value 91% 10 - 11 July Participation in Nomura Corporate Day in Singapore 8 7.50 SembCorp Marine maintained its commitment to Tour of Jurong Shipyard and PPL Shipyard for fund managers by Nomura Singapore 84% 86% 78% 6.00 79% 6.45 6.50 6.50 creating and enhancing shareholder value. In its full 6.00 3.20 4.00 4.00 7 - 17 August JP Morgan non-deal road show in Singapore Value Commitment to Shareholder 6 72% 72% year 2006 results announcement, it proposed a final 2.75 JP Morgan non-deal road show in Europe, U.S. and Hong Kong 5.00 5.00 dividend of 11.5 cents per share comprising 10.0 2.25 2.50 cents and 1.5 cents one-tier tax-exempt dividend 23 August Extraordinary General Meeting 4 57% 3.50 1.00 1.00 per share, an increase of 73 per cent over 2005. 25 August Yard tour organised by Cazenove 2.50 1.00 1.00 1.00 1.00 2.50 Together with the interim dividend payment of 3.5 2 0.75 1.50 1.50 1.38 1.00 28 September Participation in DBS Vickers Oil & Gas Corporate Day in Singapore 0.75 0.75 0.75 0.75 cents per share, total gross dividend for 2006 would 0.75 0.75 0.75 0.75 0.75 0.75 0.75 be 15 cents per share, comprising 13.5 cents and 16 - 17 October Non-deal road show with Nomura Singapore in Tokyo 0.38 0 1.5 cents one-tier tax-exempt dividend per share. 16 November Participation in Morgan Stanley Conference in Singapore 97 98 99 00 01 02 03 04 05 06 This would translate to an increase of 64 per cent 28 November - Participation in Goldman Sachs Shipping Conference in New York Interim Dividend Interim Special compared with 2005. It would represent a dividend 1 December Non-deal road show with Goldman Sachs in New York and Boston Final Final Special payout of 77 per cent, confirming management s One-Tier commitment of the guideline of dividend payouts of not lower than 75 per cent in payout ratio.

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Shareholder Participation at Company Meetings Encouraging the full participation of shareholders Group. More than 200 shareholders attended at the Annual General Meeting and Extraordinary the AGM and EGM held on 24 April 2006. The General Meeting, SembCorp Marine arranged session saw lively exchanges and insightful for buses to transport shareholders from sharing among shareholders, the Group s directors convenient MRT stations to its registered office and top management. at 29 Tanjong Kling Road. The Group has always preferred holding the meetings at its registered In another EGM held on 23 August 2006, minority office to offer shareholders the opportunity to shareholders gave the thumbs-up for SembCorp visit the shipyard and acquaint themselves Marine s acquisitions of SMOE, land and assets with the shipyard operations besides the belonging to Sembawang Bethlehem and the opportunity to interact with the Chairman, Board Cosco Corporation shares. members and senior management of the

Recognition for High Standard of Pioneer in Investor Relations Disclosure Movement For the second year running, high standards of SembCorp Marine is one of the 15 founding charter corporate transparency and governance have members of the Investor Relations Professionals earned SembCorp Marine the Runner-up Award Association (Singapore) or IRPAS. Launched Annual Report 2006 for Most Transparent Company (non-electronics during the IR Magazine Awards in October 2006, manufacturing category). Conferred by the IRPAS aims to enhance awareness of the Securities Investors Association of Singapore in ethical and professional standards of the industry. September 2006, the Most Transparent Company The Group s Senior Vice President of Investor Award recognises public-listed companies from Relations and Communications, Ms Judy Han, various industry categories for demonstrating won the Best Investor Relations Officer (Small or SembCorp Marine Ltd excellence in corporate governance and Mid-cap Company category) accolade at this event. exemplary disclosure practices in enhancing shareholder value.

At the inaugural Singapore Corporate Awards, SembCorp Marine s 2004 Annual Report was awarded the Bronze Award, under the Best Annual Report category for Main Board listed companies with a market capitalisation of more than $500 million. The report was recognised for its financial reporting presentation and its wider scope of disclosures beyond the minimum regulatory requirements in tandem with the needs of investors and other stakeholders.

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SHAREHOLDERS’ INFORMATION

Statistics of Shareholdings as at 10 March 2007 Share Prices and Monthly Volumes

Share Capital 5.5 280

Authorised Share Capital : $500,000,000.00 Investor Data 270 Issued and Fully Paid-up Capital : $146,563,456.50 2002 2003 2004 2005 2006 Earnings per share (cents) 6.54 5.55 6.68 8.45 16.39 Number of Shareholders : 8,846 260 Gross Dividend per share (cents) 6.50 5.00 7.50 9.50 15.00 5.0 Class of Shares : Ordinary Shares Net Dividend per share (cents) 5.07 3.97 6.00 7.60 12.50 250 Share price ($) Voting Rights : One vote per share High 1.10 1.06 1.36 3.20 3.56 Low 0.79 0.88 0.865 1.33 2.65 240 Close 0.905 0.96 1.36 2.76 3.40 Shareholding Held in Hands of Public Turnover 4.5 230 Volume (Million share) 783 346 278 1,227 933 Based on information available to the Company as at 10 March 2007, 37.69% of the issued ordinary Value ($Million) 732 338 285 3,118 2,927 shares of the Company is held by the public and therefore, Rule 723 of the Listing Manual issued by 220 Average P/E 16.40 14.50 17.80 27.80 19.84 Net Tangible Assets per share 65.65 64.60 67.20 73.22 90.49 SGX-ST is complied with. (cents) 210 4.0 Substantial Shareholders 200

Direct Interest Deemed Interest 190 Substantial Shareholders Number of Shares % Number of Shares % 3.5 180 SembCorp Industries Ltd 900,231,260 61.42 - -

Temasek Holdings (Private) Limited - - 909,263,260 62.04 170

160

¥ Shares held by public @ 8 March 2007 is approximately 37.69% Share Price / ST Index 3.0 ¥ Temasek Holdings (Private) Limited is deemed to be interested in the 900,231,260 shares held by SembCorp Industries as well as the balance of 9,032,000 shares held by its other subsidiaries. 150

List of 20 Largest Shareholders Shareholders Distribution By Location 140

No. Name No. of Shares % Location No. of % No. of Shares % (million) Turnover 1 SembCorp Industries Ltd 900,231,260 61.42 Shareholders 130 2.5 Annual Report 2006 2 DBS Nominees Pte Ltd 178,048,509 12.15 Singapore 8,566 96.83 1,459,406,632 99.57 120 3 DBSN Sevices Pte Ltd 67,409,822 4.60 Malaysia 117 1.32 1,773,183 0.12 4 Citibank Nominees Singapore Pte Ltd 63,476,389 4.33 Hong Kong 21 0.24 254,000 0.02 110 5 HSBC (Singapore) Nominees Pte Ltd 58,777,007 4.01 Japan 4 0.05 2,030,000 0.14 2.0 100 6 Raffles Nominees Pte Ltd 37,288,659 2.54 US 14 0.16 105,000 0.01

7 Nominees Pte Ltd 13,103,265 0.89 UK 9 0.10 108,000 0.01 90

SembCorp Marine Ltd 8 Morgan Stanley Asia (S’pore) Pte Ltd 7,952,346 0.54 Europe 2 0.02 3,000 0.00 80 9 DB Nominees (S) Pte Ltd 6,108,399 0.42 Australia/New Zealand 51 0.58 611,000 0.04 1.5 10 Merrill Lynch (Singapore) Pte Ltd 4,359,910 0.30 Others 62 0.70 1,343,750 0.09 70 11 UOB Kay Hian Pte Ltd 3,820,000 0.26 Total: 8,846 100.00 1,465,634,565 100.00 12 Societe Generale Singapore Branch 3,069,008 0.21 60 13 Tan Kwi Kin 2,891,200 0.20 Distribution of Shareholdings 1.0 14 Lee Seng Tee 2,500,000 0.17 Size of No. of % No. of Shares % 50 15 OCBC Nominees Singapore Pte Ltd 2,233,424 0.15 Shareholdings Shareholders 40 16 Amex Nominees (S) Pte Ltd 2,100,000 0.14 1 - 999 93 1.05 36,302 0.00 17 Macquarie Securities (S) Pte Ltd 2,026,352 0.14 1,000 - 10,000 7,215 81.56 32,497,302 2.22 30 0.5 18 IHI Marine United Inc 2,000,000 0.14 10,001 - 1,000,000 1,514 17.12 67,399,830 4.60 20 19 OCBC Securities Private Ltd 1,878,506 0.13 1,000,001 and above 24 0.27 1,365,701,131 93.18

20 Leck Tin Hong 1,600,000 0.11 Total: 8,846 100.00 1,465,634,565 100.00 10 Total: 1,360,874,056 92.85 Turnover High 0 0 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F Low 02 03 04 05 06 07 ST index * till ??? 14, 2007.

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