News Release

ST Engineering Reports Comparable Year-on-Year PBT For FY2015 Versus FY2014

FINANCIAL HIGHLIGHTS For the year ended 31 December 2015 2015 2014 Growth FY FY %

Revenue ($m) 6,335 6,539 (3) Earnings before interest and tax (EBIT) ($m) 510.3 555.0 (8) Other income, net ($m) 55.5 40.2 38 Finance income/(costs), net ($m) 6.2 (1.7) 479 Profit before tax (PBT) ($m) 630.3 650.7 (3) Profit attributable to shareholders ($m) 529.0 532.0 (1) Earnings per share (cents) 17.05 17.06 - Economic value added (EVA) ($m) 366.2 344.5 6 Return on equity (%) 24.8 24.9 NM Dividend per share (cents) 15.0 15.0 - • Final 10.0 11.0 - Ordinary 5.0 4.0 - Special 5.0 7.0 • Interim -Ordinary 5.0 4.0

• Commercial sales constituted 64% or $4.0 billion of revenue • Order book of $11.7 billion at end December 2015, of which about $3.8 billion is expected to be delivered in 2016. • Cash and cash equivalents including funds under management totalled $1.4 billion • Advance payments from customers totalled $1.6 billion • Economic value added for FY2015 was $366.2 million N.B.: All currencies are in Singapore dollars

Page 1 of 4 Singapore Technologies Engineering Ltd ST Engineering Hub, 1 Ang Mo Kio Electronics Park Road #07-01, Singapore 567710 T: (65) 6722 1818 F: (65) 6720 2293 www.stengg.com (Regn. No.: 199706274H) Engineering Our Future

Singapore, 26 February 2016 - Singapore Technologies Engineering Ltd (ST Engineering) today reported its full year financial results for the period ended 31 December 2015 (FY2015), with comparable revenue and profits against the same period last year. Group revenue was $6.34b compared to $6.54b, profit before tax (PBT) was $630.3m versus $650.7m, and net profit after tax (Net Profit) was $529.0m compared to $532.0m.

In FY2015 at the business sectors, against the same period last year, revenue and PBT for Aerospace sector were comparable at $2.09b and $290.6m respectively. Revenue for Electronics sector was up 8% at $1.71b compared to $1.58b while PBT of $191.0m was comparable. The Land Systems sector posted comparable revenue of $1.40b with higher PBT of $65.0m, up 16% from $56.2m mainly due to lower allowance for inventory obsolescence and lower goodwill impairment. The Marine sector posted revenue of $0.96b, down 29% from $1.34b and PBT of $88.3m, down 28% from $122.8m due to weaker shipbuilding performance from both Singapore and US operations.

4Q2015 versus 4Q2014 In the fourth quarter ended 31 December 2015 (4Q2015), the Group posted revenue of $1.78b compared to $1.85b in the same period last year. The Electronics sector achieved higher revenue of $511m, up 6%. Both Aerospace and Land Systems sectors posted comparable revenue of $580m and $413m respectively, while the Marine sector saw a 34% drop in its revenue from $334m to $220m.

Comparing 4Q2015 against 4Q2014, Group PBT and Net Profit were comparable at $166.6m and $140.8m respectively.

“For FY2015, the Group reported comparable year-on-year Revenue, Profit Before Tax and Net Profit, of $6.3b, $630.3m and $529.0m respectively.

We made history with the successful launch of Singapore’s first Commercial Earth Observation Satellite in December 2015. Strong performance from the Electronics sector, as well as the stronger US dollar, cushioned the weak results from our shipbuilding business. We ended the year with an order book of $11.7b. Our cash and cash equivalents including funds under management was $1.4b at the end of FY2015.

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Barring unforeseen circumstances, the Group expects FY2016 Revenue to be higher, but PBT to be comparable to FY2015.” ~Tan Pheng Hock President & CEO, ST Engineering

Commercial sales accounted for 64% or $4.0b of Group revenue at the end of 2015. Revenue mix of the Group comprised Aerospace sector 33%, Electronics sector 27%, Land Systems sector 22% and Marine sector 15%.

Dividend payout and dividend yield The Board of Directors proposes a Final Dividend of 10 cents per share, consisting of an Ordinary Dividend of 5 cents per share, and a Special Dividend of 5 cents per share. Together with the Interim Dividend of 5 cents per share paid to shareholders in September 2015, the total dividend for the full year will amount to 15 cents per share, same as FY2014. This translates to a dividend yield of 4.68%, computed using the average closing share price of the last trading day of 2015 and 2014.

2015 New Orders and Business Highlights The Group ended the year with a healthy order book of $11.7b, of which $3.8b is expected to be delivered in 2016.

In 4Q2015, the business sector announced close to $1.2b of new contracts, bringing the total announced contract value for the Group to about $4b in FY2015. New orders for 4Q2015 included Aerospace sector’s various contracts for airframe, engine and component MRO, pilot training and cabin reconfiguration. The Electronics sector secured orders globally for its rail electronics solutions, satellite communication solutions and advanced electronics and ICT. The Land Systems and Marine sectors, despite facing industry headwinds, also contributed to new order wins, including weapons, and ship repair and conversion respectively.

On the business front, the Group had several notable achievements in 2015. It designed and built, then successfully launched Singapore’s first commercial earth observation satellite, TeLEOS-1, into a 550km Near Equatorial Orbit. Separately, the Group’s 8X8 armoured vehicle, the Terrex 2, was one of two vehicles selected by the US Marine Corps for the next phase of evaluation for their Amphibious Combat Vehicle 1.1 Page 3 of 4

Program. In addition, the Group’s Air+ Smart Mask and Micro Ventilator, introduced to the market during the year, was one of the winners at the President’s Design Award 2015.

***

ST Engineering (Singapore Technologies Engineering Ltd) is an integrated engineering group providing solutions and services in the aerospace, electronics, land systems and marine sectors. Headquartered in Singapore, the Group reported revenue of $6.34b in FY2015 and ranks among the largest companies listed on the Singapore Exchange. It is a component stock of the FTSE Straits Times Index and MSCI Singapore. ST Engineering has about 23,000 employees worldwide, and over 100 subsidiaries and associated companies in 46 cities across 24 countries. Please visit www.stengg.com for more information.

Media contact:

Lina Poa SVP, Corporate Communications ST Engineering Tel: (65) 6722 1883 Email: [email protected]

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FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

TABLE OF CONTENTS

Paragraph Description Page

FINANCIAL STATEMENTS AND RELATED ANNOUNCEMENT 1 – 23

1 CONSOLIDATED INCOME STATEMENT 1 – 3

2 BALANCE SHEETS 4 – 6

3 CONSOLIDATED STATEMENT OF CASH FLOWS 7 – 9

4 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 9

5 STATEMENT OF CHANGES IN EQUITY 10 – 14

6 AUDIT 14

7 AUDITORS’ REPORT 14

8 ACCOUNTING POLICIES 14

9 CHANGES IN ACCOUNTING POLICIES 14

10 REVIEW OF GROUP PERFORMANCE 15 – 16

11 VARIANCE FROM PROSPECTS STATEMENT 17

12 PROSPECTS 17

13 DIVIDENDS 18

14 BUSINESS SEGMENTAL INFORMATION 19 – 21

15 ECONOMIC VALUE ADDED 21

16 INTERESTED PERSON TRANSACTIONS 22

17 REPORT OF PERSONS OCCUPYING MANAGERIAL 22 POSITIONS WHO ARE RELATED TO A DIRECTOR, CHIEF EXECUTIVE OFFICER OR SUBSTANTIAL SHAREHOLDER

SINGAPORE TECHNOLOGIES ENGINEERING LTD UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015

1 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

GROUP FY2015 FY2014 +/(-) $'000 $'000 %

Revenue 6,335,023 6,539,433 (3.1)

Cost of sales (5,052,897) (5,220,934) (3.2)

Gross profit 1,282,126 1,318,499 (2.8)

Distribution and selling expenses (179,444) (180,309) (0.5)

Administrative expenses (469,128) (467,687) 0.3

Other operating expenses (refer to para 1.7) (123,283) (115,530) 6.7

Profit from operations 510,271 554,973 (8.1)

Other income (refer to para 1.8) 55,747 45,175 23.4 Other expenses (refer to para 1.9) (299) (5,000) (94.0) Other income, net 55,448 40,175 38.0

Finance income 56,191 43,550 29.0 Finance costs (49,948) (45,197) 10.5 Finance income/(costs), net 6,243 (1,647) (479.1)

Share of results of associates and joint ventures, net of tax 58,340 57,182 2.0

Profit before taxation 630,302 650,683 (3.1)

Taxation (98,659) (113,693) (13.2)

Profit for the year 531,643 536,990 (1.0)

Attributable to: Shareholders of the Company 529,039 531,952 (0.5) Non-controlling interests 2,604 5,038 (48.3)

531,643 536,990 (1.0)

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1(a) BREAKDOWN AND EXPLANATORY NOTES TO CONSOLIDATED INCOME STATEMENT GROUP FY2015 FY2014 +/(-) $'000 $'000 %

1.1 Profit from operations is arrived at after charging the following:

Depreciation and amortisation 187,292 170,506 9.8 The higher depreciation and amortisation in FY2015 came mainly from Aerospace sector.

Allowance for doubtful debts & bad debts 12,934 14,867 (13.0) written off, net The lower allowance for doubtful debts in FY2015 came largely from Land Systems sector of $2.3 million and Marine sector of $2.7 million, partially offset by higher allowance of doubtful debt from Electronics sector of $4.2 million.

Allowance for inventory obsolescence, net 53,417 102,671 (48.0)

The lower allowance for inventory obsolescence in FY2015 came from Aerospace sector of $22.3 million and Land Systems sector of $26.1 million.

Impairment losses on intangible assets 4,942 14,039 (64.8)

The lower impairment losses on intangible assets in FY2015 came from Aerospace and Land System sectors.

1.2 Finance income/(costs), net comprises: Interest income 23,499 23,629 (0.6) Foreign exchange gain/(loss), net 7,331 (5,150) (242.3) Fair value changes of financial instruments / hedged items 14,804 15,592 (5.1) Gain on disposal of investments, net 343 2,640 (87.0) Impairment losses on investments - (638) (100.0) Interest expenses (39,752) (37,874) 5.0 Others 18 154 (88.3)

6,243 (1,647) (479.1)

1.3 Profit for the year as a percentage of revenue 8.4% 8.2%

1.4 Profit attributable to shareholders as a percentage of share capital and 24.8% 24.9% reserves at end of the year

1.5 The Group’s tax charge in FY2015 included adjustments for overprovision of current tax of $15.5 million and underprovision of deferred tax $7.6 million in respect of prior years. (FY2014: Adjustments for overprovision of current tax of $15.1 million and underprovision of deferred tax of $3.5 million).

1.6 There was a gain on disposal of a property of $0.7 million from the Marine sector. Land Systems sector relocated a factory with government compensation, with no profit or loss impact in FY2014 and FY2015.

1.7 The higher other operating expenses in FY2015 (by $7.8 million) arose mainly from higher research & development expenses of $17.2 million in Electronics and Land Systems sectors, partially offset by the lower goodwill impairment of $6.8 million in Aerospace and Land Systems sectors.

1.8 The higher FY2015 other income (by $10.6 million) arose from the negative goodwill on acquisition of remaining interest in an associate in Aerospace sector and more wage credit income. 1.9 The lower FY2015 other expenses (by $4.7 million) mainly arose from the absence of impairment of an associate in Aerospace sector.

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1(b) BREAKDOWN OF REVENUE AND PROFIT FOR THE YEAR

GROUP 2015 2014 +/(-) $'000 $'000 %

Revenue reported for first half year 3,056,462 3,138,181 (2.6)

Profit for the period reported for first half year 256,028 271,400 (5.7)

Revenue reported for second half year 3,278,561 3,401,252 (3.6)

Profit for the period reported for second half year 275,615 265,590 3.8

1(c) EARNINGS PER ORDINARY SHARE (EPS)

GROUP

FY2015 FY2014

EPS based on profit attributable to shareholders: Cents Cents

(i) Based on weighted average number of ordinary shares on issue 17.05 17.06

(ii) On a fully diluted basis 17.04 17.04

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2 BALANCE SHEETS

GROUP COMPANY 31-Dec-15 31-Dec-14 31-Dec-15 31-Dec-14 $'000 $'000 $'000 $'000 ASSETS Non-current assets Property, plant and equipment 1,708,779 1,577,523 3,997 4,568 Subsidiaries - - 1,194,799 1,197,716 Associates and joint ventures 461,560 478,352 17,657 17,657 Investments 328,684 127,211 - - Intangible assets 736,970 671,022 - - Long-term receivables, non-current 5,340 2,735 - - Finance lease receivables, non-current 523 973 - - Deferred tax assets 105,551 106,318 4,700 7,000 Amounts due from related parties, non-current 4,806 4,806 355,028 50,000 Derivative financial instruments, non-current 25,790 24,263 - 81 3,378,003 2,993,203 1,576,181 1,277,022 Current assets Inventories and work-in-progress 1,943,004 1,802,073 - - Trade receivables 1,319,714 1,319,101 - - Amounts due from related parties, current 56,582 66,382 470,376 497,070 Advances and other receivables 333,811 530,298 5,299 3,597 Long-term receivables, current 354 11,375 - - Finance lease receivables, current 3,173 6,872 - - Short-term investments 182,969 119,279 - - Bank balances and other liquid funds 951,494 1,470,723 82,091 404,876 4,791,101 5,326,103 557,766 905,543

TOTAL ASSETS 8,169,104 8,319,306 2,133,947 2,182,565

EQUITY AND LIABILITIES Current liabilities Advance payments from customers, current 871,246 809,637 - - Trade payables and accruals, current 1,702,649 1,667,180 20,619 26,961 Amounts due to related parties, current 20,553 29,364 1,742 196,988 Provisions 257,524 245,072 - - Progress billings in excess of work-in-progress 568,575 725,347 - - Provision for taxation 124,628 164,660 5,528 8,112 Short-term bank loans 65,647 29,820 - - Long-term bank loans, current 106,531 43,590 - - Lease obligations, current 730 1,126 - - Other loans, current 1,778 148 - - 3,719,861 3,715,944 27,889 232,061

NET CURRENT ASSETS 1,071,240 1,610,159 529,877 673,482

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2 BALANCE SHEETS (cont’d)

GROUP COMPANY 31-Dec-15 31-Dec-14 31-Dec-15 31-Dec-14 $'000 $'000 $'000 $'000

Non-current liabilities Advance payments from customers, non-current 700,908 899,279 - - Trade payables and accruals, non-current 229,535 274,155 11,538 17,006 Deferred tax liabilities 134,815 108,484 - - Bonds 705,567 658,424 - - Long-term bank loans, non-current 293,962 267,532 - - Lease obligations, non-current 18,706 17,547 - - Other loans, non-current 310 441 - - Deferred income 92,052 98,759 - - Other long-term payables, non-current 700 1,000 - - Derivative financial instruments, non-current 11,615 11,260 - - Amounts due to related parties, non-current 146 1,871 644,274 407,413 2,188,316 2,338,752 655,812 424,419

TOTAL LIABILITIES 5,908,177 6,054,696 683,701 656,480 NET ASSETS 2,260,927 2,264,610 1,450,246 1,526,085

Share capital and reserves Share capital 895,926 889,426 895,926 889,426 Treasury shares (66,870) (6,529) (66,870) (6,529) Capital reserves 113,277 116,323 (3,073) - Other reserves (65,495) (92,057) 72,512 74,865 Retained earnings 1,255,214 1,225,040 551,751 568,323 2,132,052 2,132,203 1,450,246 1,526,085 Non-controlling interests 128,875 132,407 - - 2,260,927 2,264,610 1,450,246 1,526,085

TOTAL EQUITY AND LIABILITIES 8,169,104 8,319,306 2,133,947 2,182,565

2(a) ANALYSIS OF BALANCE SHEETS

Compared to 31 December 2014, the decrease in net current assets for both Group and Company Balance Sheets was mainly attributable to utilisation of cash for share buyback of $90 million, additional investment in bonds of $259 million to enhance yield and acquisition of property, plant and equipment of $273 million for the Group.

Increase in property, plant and equipment was mainly due to acquisition of aircraft as the Group commenced its aircraft leasing business.

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2(b) GROUP BORROWINGS

As at As at 31-Dec-15 31-Dec-14 $'000 $'000 Amount repayable within one year Secured 25,592 18,161 Unsecured 149,094 56,523 174,686 74,684

Amount repayable after one year Secured 97,959 47,650 Unsecured 920,586 896,294 1,018,545 943,944

Total 1,193,231 1,018,628

2(c) NET ASSET VALUE

GROUP FY2015 FY2014 Cents Cents

Net asset value per ordinary share at end of the financial year 68.74 68.38

COMPANY FY2015 FY2014 Cents Cents

Net asset value per ordinary share at end of the financial year 46.76 48.94

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3 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2015

GROUP FY2015 FY2014 $'000 $'000

Cash flows from operating activities Profit before taxation 630,302 650,683 Adjustments: Share of results of associates and joint ventures, net of tax (58,340) (57,182) Depreciation charge 170,394 154,318 Property, plant and equipment written off 6,216 885 Gain on disposal of property, plant and equipment (1,190) (1,310) Gain on disposal of subsidiaries - (519) Gain on disposal of investments (343) (2,640) Remeasurement loss on fair value of pre-existing interest in acquiree 299 - Gain on disposal of an associate and a joint venture (59) (2,797) Bargain purchase arising from business combinations (10,529) (47) Impairment losses on goodwill 4,000 10,829 Impairment losses on other intangible assets 942 3,210 (Writeback)/impairment losses on property, plant and equipment (212) 1,087 Impairment losses on quoted and unquoted investments - 638 Impairment loss on an associate - 2,108 (Writeback)/impairment losses on loan to an associate (272) 2,892 (Writeback)/impairment losses on progressive payments to contractor (283) 7,109 Share-based payment expense 16,582 21,670 Changes in fair value of financial instruments and hedged items (14,804) (15,592) Changes in fair value of financial instruments held for trading (15) (152) Interest expenses 39,752 37,874 Interest income (23,499) (23,629) Dividends from investments (3) (2) Amortisation of other intangible assets 16,898 16,188 Other intangible assets written off 143 - Operating profit before working capital changes 775,979 805,621 Changes in: Inventories and work-in-progress (99,619) 17,475 Progress billings in excess of work-in-progress (156,772) 10,809 Trade receivables 36,405 (91,592) Advance payments to suppliers 174,200 (27,658) Other receivables, deposits and prepayments 13,057 34,891 Amount due from holding company and related corporations balances 15,765 (21,499) Amount due to holding company and related corporations balances (13,285) 12,065 Amount due from associates (8,973) (4,508) Amount due from joint ventures (2,506) (9,122) Trade payables (27,855) 43,767 Advance payments from customers (138,130) (19,001) Other payables, accruals and provisions (33,656) (37,263) Loans to staff and third parties 12,873 12,191 Deferred income 2,078 7,224 Foreign currency translation of foreign operations (875) 52 Cash generated from operations 548,686 733,452 Interest received 27,857 23,662 Income tax paid (111,093) (132,792) Net cash from operating activities 465,450 624,322

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3 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2015 (cont’d)

GROUP FY2015 FY2014 $'000 $'000

Cash flows from investing activities Proceeds from sale of property, plant and equipment 2,736 4,543 Proceeds from sale of an investment property - 22,000 Proceeds from sale and maturity of investments 81,228 147,057 Proceeds from unwinding of cross currency interest rate swaps (CCIRS) 14,300 - Repayment of loan from joint ventures 272 3,887 Proceeds from disposal of a joint venture - 3,280 Proceeds from insurance settlement - 5,220 Loan to associates - (640) Loan to a joint venture - (272) Dividends from associates and joint ventures 51,393 38,840 Dividends from investments 3 2 Purchase of property, plant and equipment (273,040) (223,771) Purchase of investments (345,182) (90,172) Investment in a joint venture - (622) Acquisition of other intangible assets (22,499) (30,878) Acquisition of controlling interests in subsidiaries, net of cash acquired 13,441 (67) Deconsolidation of a subsidiary - (35,896) Net cash used in investing activities (477,348) (157,489)

Cash flows from financing activities Capital contribution from non-controlling interests of subsidiaries 639 9,368 Repayment of other loans (156) (369) Repayment of bank loans (113,122) (471,990) Repayment of lease obligations (1,125) (1,550) Repayment of loan to a joint venture - (824) Proceeds from issue of shares 5,356 17,256 Proceeds from share options exercised with issue of treasury shares 8,571 - Purchase of treasury shares (89,776) (6,529) Proceeds from bank loans 216,445 80,435 Proceeds from other loans 1,615 - Proceeds from a loan from a joint venture 5,000 - Acquisition of non-controlling interests in subsidiaries (7,600) (194) Dividends paid to shareholders of the Company (497,604) (498,857) Dividends paid to non-controlling interests (10,813) (18,193) Interest paid (37,322) (34,504) Deposit discharged 736 1,105 Net cash used in financing activities (519,156) (924,846)

Net decrease in cash and cash equivalents (531,054) (458,013) Cash and cash equivalents at beginning of the year 1,462,612 1,920,924 Exchange difference on cash and cash equivalents at beginning of the year 12,561 (299) Cash and cash equivalents at end of the year 944,119 1,462,612

3(a) ANALYSIS OF CONSOLIDATED STATEMENT OF CASH FLOWS

Compared to FY2014, net cash from operating activities of $465 million in FY2015 was lower by $159 million. This was mainly due to unfavourable working capital movements from inventories and work- in-progress, progress billings in excess of work-in-progress, partially offset by favourable working capital movement from trade receivables.

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3(a) ANALYSIS OF CONSOLIDATED STATEMENT OF CASH FLOWS (cont’d)

The Group’s net cash used in investing activities of $477 million in FY2015 was higher than that of FY2014 by $320 million. The higher cash outflow was due to increased purchases of property, plant and equipment, including aircraft for leasing (by $49 million) and investments in bonds, net (by $259 million).

The Group’s net cash used in financing activities of $519 million for FY2015 was lower than that of FY2014 by $406 million, mainly attributable to net drawdown of bank loans in FY2015 (by $103 million) vis-à-vis net repayment of bank loans in FY2014 (by $391 million), partially offset by more treasury shares purchased (by $83 million).

Resulting from the above, the cash and cash equivalents as at FY2015 was $944 million, $518 million lower than FY2014.

4 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015

The Statement of Comprehensive Income included as part of the results announcement is in compliance with the Singapore Financial Reporting Standards (FRS).

GROUP FY2015 FY2014 +/(-) $'000 $'000 %

Profit for the year 531,643 536,990 (1.0)

Other comprehensive income Items that are or may be reclassified subsequently to profit or loss Net fair value changes on available-for-sale financial assets (3,883) (2,020) 92.2 Net fair value changes on cash flow hedges 4,050 (58,327) (106.9) Share of net fair value changes on cash flow hedges (2,805) (9,891) (71.6) of an associate Foreign currency translation differences 36,372 19,968 82.2 Share of foreign currency translation differences of associates (860) 1,336 (164.4) and joint ventures Reclassification of foreign currency translation reserve to - 50 (100.0) profit or loss arising from disposal of foreign entities Other comprehensive income for the year,net of tax 32,874 (48,884) (167.2)

Total comprehensive income for the year, net of tax 564,517 488,106 15.7

Total comprehensive income attributable to: Shareholders of the Company 559,078 482,522 15.9 Non-controlling interests 5,439 5,584 (2.6) 564,517 488,106 15.7

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5 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

Non- Share Treasury Capital Other Retained controlling capital Shares reserves reserves earnings Total interests Total equity Group $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

At 1.1.2014 852,611 - 116,323 (44,651) 1,191,958 2,116,241 143,673 2,259,914 Total comprehensive income for the year Profit for the year - - - - 531,952 531,952 5,038 536,990

Other comprehensive income Net fair value changes on available- for-sale financial assets - - - (2,020) - (2,020) - (2,020) Net fair value changes on cash flow hedges - - - (57,327) - (57,327) (1,000) (58,327) Share of net fair value changes on cash flow hedges of an associate - - - (9,891) - (9,891) - (9,891) Foreign currency translation differences - - - 18,422 - 18,422 1,546 19,968 Share of foreign currency translation difference of associates and joint - - - 1,336 - 1,336 - 1,336 ventures Reclassification adjustment of foreign currency translation reserve to profit or loss arising from disposal of a foreign - - - 50 - 50 - 50 entity Other comprehensive income for the year, net of tax - - - (49,430) - (49,430) 546 (48,884) Total comprehensive income for the year, net of tax - - - (49,430) 531,952 482,522 5,584 488,106

Transactions with owners of the Company, recognised directly in equity Contributions by and distributions to owners of the Company Issue of shares 36,815 - - (19,559) - 17,256 - 17,256 Capital contribution by non-controlling interests ------9,368 9,368 Cost of share-based payment - - - 21,574 - 21,574 96 21,670 Purchase of treasury shares - (6,529) - - - (6,529) - (6,529) Dividends paid - - - - (498,857) (498,857) - (498,857) Dividends paid to non-controlling interests ------(18,193) (18,193) Total contributions by and distributions to owners of the Company 36,815 (6,529) - 2,015 (498,857) (466,556) (8,729) (475,285)

Changes in ownership interests in subsidiaries Acquisition of non-controlling interests in subsidiaries without a change in control ------(194) (194) Acquisition of subsidiaries with non-controlling interests ------729 729 Deconsolidation of a subsidiary ------(8,656) (8,656) Disposal of subsidiaries - - - (4) - (4) - (4) Total transactions with owners of the Company 36,815 (6,529) - 2,011 (498,857) (466,560) (16,850) (483,410) Transfer from retained earnings to statutory reserve - - - 13 (13) - - -

At 31.12.2014 889,426 (6,529) 116,323 (92,057) 1,225,040 2,132,203 132,407 2,264,610

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5 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015 (cont’d)

Non- Share Treasury Capital Other Retained controlling capital Shares reserves reserves earnings Total interests Total equity Group $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

At 1.1.2015 889,426 (6,529) 116,323 (92,057) 1,225,040 2,132,203 132,407 2,264,610 Total comprehensive income for the year Profit for the year - - - - 529,039 529,039 2,604 531,643 Other comprehensive income Net fair value changes on available- for-sale financial assets - - - (3,883) - (3,883) - (3,883) Net fair value changes on cash flow hedges - - - 3,658 - 3,658 392 4,050 Share of net fair value changes on cash flow hedges of an associate - - - (2,805) - (2,805) - (2,805) Foreign currency translation differences - - - 33,929 - 33,929 2,443 36,372 Share of foreign currency translation differences of associates and joint ventures - - - (860) - (860) - (860) Other comprehensive income for the year, net of tax - - - 30,039 - 30,039 2,835 32,874 Total comprehensive income for the year, net of tax - - - 30,039 529,039 559,078 5,439 564,517 Transactions with owners of the Company, recognised directly in equity Contributions by and distributions to owners of the Company Issue of shares 6,500 - - (1,144) - 5,356 - 5,356 Capital contribution by non-controlling interests ------639 639 Cost of share-based payment - - - 16,501 - 16,501 81 16,582 Purchase of treasury shares - (89,776) - - - (89,776) - (89,776) Treasury shares reissued pursuant to share plans - 29,435 (3,046) (17,689) - 8,700 (129) 8,571 Dividends paid - - - - (497,604) (497,604) - (497,604) Dividends paid to non-controlling interests ------(10,813) (10,813) Total contributions by and distributions to owners of the Company 6,500 (60,341) (3,046) (2,332) (497,604) (556,823) (10,222) (567,045)

Changes in ownership interests in subsidiaries Acquisition of non-controlling interests in a subsidiary without a change in control - - - (2,406) - (2,406) (5,194) (7,600) Acquisition of subsidiaries with non-controlling interests ------6,445 6,445

Total transactions with owners of the Company 6,500 (60,341) (3,046) (4,738) (497,604) (559,229) (8,971) (568,200) Transfer from retained earnings to statutory reserve - - - 1,261 (1,261) - - -

At 31.12.2015 895,926 (66,870) 113,277 (65,495) 1,255,214 2,132,052 128,875 2,260,927

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5 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015 (cont’d)

Share-based Share Treasury payment Capital Retained capital Shares reserve reserve earnings Total equity Company $'000 $'000 $'000 $'000 $'000 $'000

At 1.1.2014 852,611 - 72,754 - 564,416 1,489,781 Total comprehensive income for the year Profit for the year - - - - 502,764 502,764 Total comprehensive income for the year - - - - 502,764 502,764 Transactions with owners of the Company, recognised directly in equity Contributions by and distributions to owners of the Company Issue of shares 36,815 - (19,559) - - 17,256 Cost of share-based payment - - 21,670 - - 21,670 Purchase of treasury shares - (6,529) - - - (6,529) Dividends paid - - - - (498,857) (498,857) Total contributions by and distributions to owners of the Company 36,815 (6,529) 2,111 - (498,857) (466,460)

At 31.12.2014 889,426 (6,529) 74,865 - 568,323 1,526,085

At 1.1.2015 889,426 (6,529) 74,865 - 568,323 1,526,085

Total comprehensive income for the year Profit for the year - - - - 481,032 481,032 Total comprehensive income for the year - - - - 481,032 481,032 Transactions with owners of the Company, recognised directly in equity Contributions by and distributions to owners of the Company Issue of shares 6,500 - (1,144) - - 5,356 Cost of share-based payment - - 16,582 - - 16,582 Dividends paid - - - - (497,604) (497,604) Purchase of treasury shares - (89,776) - - - (89,776) Treasury shares reissued pursuant - to share plans - 29,435 (17,791) (3,073) - 8,571 Total contributions by and distributions to owners of the Company 6,500 (60,341) (2,353) (3,073) (497,604) (556,871)

At 31.12.2015 895,926 (66,870) 72,512 (3,073) 551,751 1,450,246

Page 12 of 23

5(a) CHANGES IN COMPANY’S SHARE CAPITAL

Issued and paid up capital

As at 31 December 2015, the Company has an issued share capital of 3,122,495,197 ordinary shares (31 December 2014: 3,120,004,716 ordinary shares) of which 20,966,968 were held by the Company as treasury shares (31 December 2014: 2,034,000).

Number of Shares FY2015 4Q2015

As at beginning of the year/quarter (including treasury shares) 3,120,004,716 3,122,495,197

Issue of shares under the terminated Singapore Technologies Engineering Share Option Plan (ESOP) 2,167,749 - Issue of shares under the Singapore Technologies Engineering 322,732 - Restricted Share Plan 2010 (RSP 2010) As at end of the year (including treasury shares) 3,122,495,197 3,122,495,197

As at end of the year (excluding treasury shares) 3,101,528,229 3,101,528,229

As at 31 December 2014 (excluding treasury shares) 3,117,970,716 3,117,970,716

Share Option Plan

As at 31 December 2015, there were 17,636,741 (31 December 2014: 23,472,008) unexercised options of unissued ordinary shares under the terminated Singapore Technologies Engineering Share Option Plan (ESOP).

Performance Share Plan

Singapore Technologies Engineering Performance Share Plan 2010 (PSP 2010) As at 31 December 2015, the total number of contingent shares granted conditionally but not released was 3,955,515 (31 December 2014: 3,433,537). Based on the achievement factor, the actual release of the awards could range from zero to a maximum of 6,724,375 (31 December 2014: 5,837,012) ordinary shares of the Company.

Restricted Stock Plan

Singapore Technologies Engineering Restricted Share Plan 2010 (RSP 2010) As at 31 December 2015, the total number of contingent shares granted conditionally but not released was 9,504,083 (31 December 2014: 9,916,027). Based on the achievement factor, the actual release of the awards could range from zero to a maximum of 14,205,624 (31 December 2014: 14,183,430) ordinary shares.

As at 31 December 2015, the total number of awards released but not vested was 2,933,999 (31 December 2014: 3,224,660) ordinary shares of the Company.

Page 13 of 23

5(a) CHANGES IN COMPANY’S SHARE CAPITAL (cont’d)

Treasury Shares

During the financial year, the Company purchased 27,616,900 ordinary shares by way of open market acquisitions, all of which were held by the Company as treasury shares (31 December 2014: 2,034,000).

During the year, 8,683,932 treasury shares were utilised pursuant to the ESOP, PSP 2010 and RSP 2010.

FY2015 (number of shares) Group and Company As at beginning of the year 2,034,000

Purchase of treasury shares 27,616,900

Treasury shares transferred on exercise of share options (3,192,638)

Treasury shares transferred on vesting of PSP 2010 (1,529,222)

Treasury shares transferred on vesting of RSP 2010 (3,962,072)

As at end of the year 20,966,968

6 AUDIT

The figures have been audited by the Company’s auditors.

7 AUDITORS’ REPORT

See attached auditors’ report

8 ACCOUNTING POLICIES

The Group has applied the same accounting policies and methods of computation in the preparation of the financial statements for the current reporting period compared with the audited financial statements as at 31 December 2014 except for the adoption of FRS and INT FRS that are mandatory for financial year beginning on or after 1 January 2015. The adoption of these FRS and INT FRS has no significant impact on the financial statements.

9 CHANGES IN ACCOUNTING POLICIES

There are no changes to the accounting policies.

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10 REVIEW OF GROUP PERFORMANCE

10(a) Revenue

FY2015 vs FY2014

$m FY2015 FY2014 Growth Aerospace 2,090 2,061 29 1% Electronics 1,709 1,583 126 8% Land Systems 1,396 1,397 (1) - Marine 958 1,341 (383) (29%) Others 182 157 25 16% Total 6,335 6,539 (204) (3%)

Group’s revenue of $6,335 million for FY2015 was comparable to that of FY2014. Lower revenue from Marine sector was largely offset by higher revenue from Electronics sector and “Others”. Aerospace and Land Systems sectors reported comparable revenue.

Aerospace sector’s FY2015 revenue of $2,090 million was comparable to that of FY2014. Higher revenue from stronger US Dollar and more Maintenance by the Hour (MBHTM) programmes in Engineering & Materials Services business group, together with higher engines output in Component/Engine Repair & Overhaul business group, were partially offset by lower revenue from the Aircraft Maintenance & Modification business group.

FY2015 revenue of $1,709 million for the Electronics sector was 8% or $126 million higher than that of FY2014 arising from higher value project milestone completions from Software Systems Group, and higher value project milestone completions and increased sales of satellite communication products from Communication & Sensor Systems Group. Large-Scale Systems Group revenue was comparable to FY2014.

Land Systems sector’s FY2015 revenue of $1,396 million was comparable to FY2014. Lower revenue from Munitions & Weapon and Services, Trading & Others was largely offset by higher revenue from Automotive business group.

Revenue of Marine sector in FY2015 of $958 million was lower than that of FY2014 by 29% or $383 million, due mainly to lower revenue recognition from Shipbuilding contracts from both local and US operations.

Higher revenue from Miltope, ST Synthesis, ST Dynamics and Innosparks contributed to the higher year-on-year increase in revenue under “Others”.

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10 REVIEW OF GROUP PERFORMANCE (cont’d)

10(b) Profitability

FY2015 vs FY2014

$m FY2015 FY2014 Growth Aerospace 290.6 283.0 7.6 3% Electronics 191.0 184.0 7.0 4% Land Systems 65.0 56.2 8.8 16% Marine 88.3 122.8 (34.5) (28%) Others (4.6) 4.7 (9.3) (198%) Total 630.3 650.7 (20.4) (3%)

Group’s profit before tax (PBT) for FY2015 of $630.3 million was comparable to that of FY2014. Lower PBT of Marine sector and “Others” were partially offset by higher PBT from Land Systems sector. Both Aerospace and Electronics sectors reported comparable PBT.

Aerospace sector’s PBT of $290.6 million in FY2015 was comparable to that achieved in FY2014. This was mainly due to lower operating expenses, negative goodwill from acquisition of remaining interest in an associate, lower interest expense, favourable foreign exchange impact and higher contributions from associates, partially offset by lower gross profit from fewer airframe maintenance work and provision of liquidated damages for B757 15-Pallet programme.

PBT for Electronics sector in FY2015 of $191.0 million was comparable to that posted in FY2014 mainly due to higher revenue and other income, partially offset by less favourable sales mix and higher operating expenses.

Land Systems sector’s FY2015 PBT of $65.0 million was higher than that of FY2014 by 16% or $8.8 million mainly due to lower allowance for inventory obsolescence and lower goodwill impairment, partially offset by unfavourable product mix.

PBT of Marine sector in FY2015 of $88.3 million was lower than that of FY2014 by 28% or $34.5 million, due to weaker Shipbuilding performance from local and US operations.

PBT under “Others” for FY2015 was lower than that for FY2014, mainly due to lower performance of Miltope, absence of contribution from an associate, Experia Events Pte. Ltd., the organiser of Singapore Airshow 2014, partially offset by contributions from better performance of ST Synthesis.

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11 VARIANCE FROM PROSPECTS STATEMENT

Compared to the Prospects Statement for the 3Q2015 results announced in November 2015; there are variances as highlighted below:

(a) the Group forecasted PBT for FY2015 to be lower than FY2014. The Group is pleased to report that PBT for FY2015 is comparable to FY2014, due mainly to favourable fair value movement of CCIRS and lower expenses than forecasted; and

(b) Land Systems sector forecasted PBT for FY2015 to be comparable to FY2014. The Sector is pleased to report that the PBT for FY2015 is higher than that of FY2014, due mainly to higher revenue and lower expenses than was forecasted.

Other than the variances mentioned above, there are no other variances from the 3Q2015 Prospects Statement

12 PROSPECTS

Group

Barring unforeseen circumstances, the Group expects FY2016 Revenue to be higher, while PBT is expected to be comparable to that of FY2015.

Sectors

For Aerospace and Electronics sectors, Revenue is expected to be higher, while PBT for FY2016 is expected to be comparable to FY2015.

For Land Systems sector, Revenue is expected to be comparable, while PBT for FY2016 is expected to be lower than FY2015.

For Marine sector, Revenue is expected to be higher, while PBT for FY2016 is expected to be lower than FY2015.

This release may contain forward-looking statements that involve risks and uncertainties. These forward-looking statements reflect the Company’s current intentions, plans, expectations, assumptions and beliefs about future events. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other companies and venues for the sale/distribution of goods and services, shifts in customer demands, customers and partners, changes in operating expenses, including employee wages, benefits and training, and governmental and public policy changes, as well as natural disasters which may negatively impact business activities of the ST Engineering group. You are cautioned not to place undue reliance on these forward-looking statements, which are based on current view of management on future events.

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13 DIVIDENDS

The Directors are pleased to announce that a final dividend of 10.0 cents per share has been recommended for the year ended 31 December 2015. The recommended final dividend consists of an Ordinary Dividend of 5.0 cents per share and a Special Dividend of 5.0 cents per share. Together with the interim ordinary dividend of 5.0 cents per share paid on 3 September 2015, the total dividend for the year ended 31 December 2015 will be 15.0 cents per share and amounts to $467.7 million. The recommended dividends take into consideration the Group’s FY2015 profit after tax, present cash position, positive cash flow generated from operations and projected capital requirements. Payment of the final dividend is subject to the approval of the shareholders of the Company at the forthcoming Annual General Meeting.

(a) Current Financial Period Reported On

Any dividend recommended for the current financial period reported on? Yes

Name of Interim Ordinary Final Ordinary Special Dividend Total Dividend tax exempt (one-tier) tax exempt (one-tier) tax exempt (one-tier) Dividend Type Cash Cash Cash Cash Dividend Per 5.0 cents per ordinary 5.0 cents per 5.0 cents per 15.0 cents per Share share ordinary share ordinary share ordinary share

Annual $155.5m $156.1m $156.1m $467.7m Dividend

(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year? Yes

Name of Interim Ordinary Final Ordinary Special Dividend Total Dividend tax exempt (one-tier) tax exempt (one-tier) tax exempt (one-tier) Dividend Type Cash Cash Cash Cash Dividend Per 4.0 cents per ordinary 4.0 cents per 7.0 cents per 15.0 cents per Share share ordinary share ordinary share ordinary share

Annual $124.8m $124.9m $218.5m $468.2m Dividend

NOTICE IS HEREBY GIVEN THAT the Register of Members and Share Transfer Books will be closed on 28 April 2016 for the preparation of dividend warrants. Duly completed transfers in respect of ordinary shares in the capital of the Company together with all relevant documents of title received by the Company’s share registrar, M & C Services Private Limited, 112 Robinson Road #05-01 Singapore 068902 up to 5.00 p.m. on 27 April 2016 will be registered to determine members’ entitlements to the proposed dividends, subject to approval of members to the proposed dividends at the Nineteenth Annual General Meeting to be convened on 21 April 2016. Subject as aforesaid, members whose securities accounts with The Central Depository (Pte) Limited are credited with ordinary shares in the capital of the Company as at 5.00 p.m. on 27 April 2016 will be entitled to the proposed dividends. The proposed dividends, if so approved by members, will be paid on 10 May 2016.

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14 BUSINESS SEGMENTAL INFORMATION

By Business Activity

FY2015 Land Aerospace Electronics Systems Marine Others Elimination Group $'000 $'000 $'000 $'000 $'000 $'000 $'000 Revenue External sales 2,089,772 1,708,959 1,395,587 958,028 182,677 - 6,335,023 Inter-segment sales 5,842 34,215 5,432 345 27,191 (73,025) - 2,095,614 1,743,174 1,401,019 958,373 209,868 (73,025) 6,335,023

Reportable segment profit from operations 222,013 178,699 47,189 71,795 (70,129) 60,704 510,271 Other income 23,856 14,654 13,239 7,482 560,949 (564,433) 55,747 Other expenses (578) - (1,645) (115) - 2,039 (299) Finance income 25,596 3,683 2,880 3,716 77,185 (56,869) 56,191 Finance costs (19,157) (6,122) (13,252) (103) (103,835) 92,521 (49,948) Share of results of associates and joint ventures, net of tax 38,870 38 16,590 5,500 - (2,658) 58,340 Profit before taxation 290,600 190,952 65,001 88,275 464,170 (468,696) 630,302 Taxation (56,900) (27,191) (14,395) (2,558) 7,385 (5,000) (98,659) Non-controlling interests (6,981) (761) 5,130 8 - - (2,604) Profit attributable to shareholders 226,719 163,000 55,736 85,725 471,555 (473,696) 529,039

Other assets 2,328,622 1,860,634 1,855,080 994,623 4,579,005 (3,910,420) 7,707,544 Associates and joint ventures 311,473 1,397 121,781 8,229 17,657 1,023 461,560 Segment assets 2,640,095 1,862,031 1,976,861 1,002,852 4,596,662 (3,909,397) 8,169,104

Segment liabilities 1,874,224 1,637,723 1,713,471 810,727 2,510,204 (2,638,172) 5,908,177

Capital expenditure + 219,757 52,878 23,247 18,866 18,244 - 332,992 Depreciation and amortisation 71,470 39,871 38,981 29,609 7,404 (43) 187,292 Impairment losses - - 4,447 - - - 4,447 Other non-cash expenses 5,956 8 393 - 2 - 6,359

+ Capital expenditure consists of additions of property, plant and equipment and intangible assets.

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14 BUSINESS SEGMENTAL INFORMATION (cont’d)

By Business Activity

FY2014 Land Aerospace Electronics Systems Marine Others Elimination Group $'000 $'000 $'000 $'000 $'000 $'000 $'000 Revenue External sales 2,061,225 1,583,288 1,396,880 1,341,084 156,956 - 6,539,433 Inter-segment sales 10,239 30,791 8,252 867 24,069 (74,218) - 2,071,464 1,614,079 1,405,132 1,341,951 181,025 (74,218) 6,539,433

Reportable segment profit from operations 261,471 174,371 38,727 100,835 (76,109) 55,678 554,973 Other income 7,059 10,402 14,525 12,115 628,530 (627,456) 45,175 Other expenses (5,035) (6) (1,570) (37) (24) 1,672 (5,000) Finance income 11,894 4,867 3,124 3,931 115,809 (96,075) 43,550 Finance costs (24,670) (6,136) (11,655) - (112,961) 110,225 (45,197) Share of results of associates and joint ventures, net of tax 32,280 470 13,050 5,936 - 5,446 57,182 Profit before taxation 282,999 183,968 56,201 122,780 555,245 (550,510) 650,683 Taxation (53,892) (30,614) (11,001) (14,695) (3,491) - (113,693) Non-controlling interests (8,963) (1,211) 5,123 1 - 12 (5,038) Profit attributable to shareholders 220,144 152,143 50,323 108,086 551,754 (550,498) 531,952

Other assets 2,202,519 1,783,773 2,091,015 1,106,096 4,250,300 (3,592,749) 7,840,954 Associates and joint ventures 322,508 10,297 112,750 8,159 17,657 6,981 478,352 Segment assets 2,525,027 1,794,070 2,203,765 1,114,255 4,267,957 (3,585,768) 8,319,306

Segment liabilities 1,779,360 1,596,964 1,931,326 955,383 2,102,832 (2,311,169) 6,054,696

Capital expenditure + 87,674 61,893 86,318 37,581 10,635 - 284,101 Depreciation and amortisation 60,166 38,362 38,053 27,098 6,869 (42) 170,506 Impairment losses 6,186 638 21,049 - - - 27,873 Other non-cash expenses 807 56 20 - 3 (1) 885

+ Capital expenditure consists of additions of property, plant and equipment and intangible assets.

Page 20 of 23

14 BUSINESS SEGMENTAL INFORMATION (cont’d)

By Business Activity

For Revenue and Profit Before Tax of FY2015 vis-à-vis FY2014, please refer to paragraph 10.

Profit Attributable to Shareholders FY2015 FY2014 +/(-) $'000 $'000 % Aerospace 226,719 220,144 3.0 Electronics 163,000 152,143 7.1 Land Systems 55,736 50,323 10.8 Marine 85,725 108,086 (20.7) Others (2,141) 1,256 (270.5) Group 529,039 531,952 (0.5)

By Geographical Areas

Revenue FY2015 FY2014 $'000 % $'000 % Asia 3,940,047 62.2 3,780,770 57.8 USA 1,503,208 23.7 1,525,088 23.3 Europe 311,526 4.9 290,317 4.5 Others 580,242 9.2 943,258 14.4 Total 6,335,023 100 6,539,433 100

By Country of Incorporation

Revenue Non-Current Assets* FY2015 FY2014 FY2015 FY2014 $'000 % $'000 % $'000 % $'000 % Asia 4,695,163 74.1 4,981,137 76.2 2,095,321 64.5 1,785,853 62.4 USA 1,498,855 23.7 1,420,462 21.7 878,105 27.1 781,302 27.3 Europe 81,354 1.3 75,513 1.2 175,000 5.4 194,450 6.8 Others 59,651 0.9 62,321 0.9 98,236 3.0 101,017 3.5 Total 6,335,023 100 6,539,433 100 3,246,662 100 2,862,622 100

* Non-current assets for the purpose of FRS 108 Operating Segments excludes derivative financial instruments and deferred tax assets.

15 ECONOMIC VALUE ADDED (EVA)

EVA for FY2015 was $366.2 million, an increase of 6% or $21.7 million over FY2014. The weighted average cost of capital for 2015 was 5.5% (2014: 5.6%).

Page 21 of 23

16 INTERESTED PERSON TRANSACTIONS (unaudited)

Aggregate value of all transactions conducted under a shareholders mandate pursuant to Rule 920 of the SGX Listing Manual

FY2015 FY2014 $'000 $'000 Transactions for the Sale of Goods and Services CapitaLand Limited and its Associates 657 215 SembCorp Industries Ltd and its Associates 645 190 SembCorp Marine Ltd and its Associates (178) * 13,236 Singapore Telecommunications Limited and its Associates 4,239 130 Singapore Airlines Limited and its Associates 4,554 - SMRT Corporation Ltd and its Associates 31,137 120,535 StarHub Ltd and its Associates 591 2,296 Temasek Holdings (Private) Limited and its Associates (non-listed) 4,083 4,490 45,728 141,092

Transactions for the Purchase of Goods and Services SATS Ltd. and its Associates 2,169 2,599 SembCorp Industries Ltd and its Associates 8,082 - SembCorp Marine Ltd and its Associates 180 - Singapore Airlines Limited and its Associates 143 11,977 Singapore Telecommunications Limited and its Associates 2,174 2,775 SMRT Corporation Ltd and its Associates 180 - Temasek Holdings (Private) Limited and its Associates (non-listed) 7,048 23,036

19,976 40,387

Total Interested Person Transactions 65,704 181,479

* This relates to a credit note.

17 REPORT OF PERSONS OCCUPYING MANAGERIAL POSITIONS WHO ARE RELATED TO A DIRECTOR, CHIEF EXECUTIVE OFFICER OR SUBSTANTIAL SHAREHOLDER

Pursuant to Rule 704(13) of the SGX Listing Manual, as at 31 December 2015, no person occupying a managerial position in the Company or any of its principal subsidiaries is related to a Director or chief executive officer or substantial shareholder of the Company.

BY ORDER OF THE BOARD

CHUA SU LI / KAREN NG KWEE LIAN Company Secretaries 26 February 2016

Media Contact: Lina Poa SVP, Corporate Communications Tel: (65) 6722 1883 Fax: (65) 6720 2293 Email: [email protected]

Page 22 of 23

For more details on how the business of each Sector is managed and its related performance, please see the attached sections. The information is given on a voluntary basis and from the perspective of the Sector management, as its disclosure is not made pursuant to any law or regulation.

Page 23 of 23

News Release

Details on how the business of the Sector is managed and its related performance are set out below. This information is given on a voluntary basis and from the perspective of the Sector management, as its disclosure is not required by law or regulation.

Aerospace

“Comparable Profits”

FINANCIAL HIGHLIGHTS For the year ended 31 December 2015

2015 2014 Growth FY FY %

Revenue ($m) 2,096 2,071 1 Earnings before interest and tax (EBIT) ($m) 222.0 261.5 (15) Other income, net ($m) 23.3 2.0 > 500 Finance income/(costs), net ($m) 6.4 (12.8) 150 Profit before tax (PBT) ($m) 290.6 283.0 3 Profit attributable to shareholders ($m) 226.7 220.1 3 Economic value added (EVA) ($m) 173.7 162.1 7

“The Aerospace sector remained resilient in 2015 and achieved comparable profits despite headwinds. We continue to position ourselves as a total aviation support provider and invest to enhance service offerings to add value to customers globally.”

Lim Serh Ghee, President

N.B.: All currencies are in Singapore dollars.

Singapore Technologies Engineering Ltd ST Engineering Hub, 1 Ang Mo Kio Electronics Park Road #07-01, Singapore 567710 T: (65) 6722 1818 F: (65) 6720 2293 www.stengg.com (Regn. No.: 199706274H) Engineering Our Future

Aerospace

Aerospace sector audited results for the year ended 31 December 2015:

FY2015 FY2014 + / (-) $'000 $'000 %

1. (a) Revenue 2,095,614 2,071,464 1.2

(b) Cost of sales (1,732,054) (1,664,645) 4.0

(d) Distribution and selling expenses (8,355) (10,892) (23.3)

(e) Administrative expenses (114,536) (113,731) 0.7

(f) Other operating expenses (18,656) (20,725) (10.0)

(g) Profit from operations 222,013 261,471 (15.1)

(h) Other income 23,856 7,059 238.0 (i) Other expenses (578) (5,035) (88.5) (j) Other income/(expenses), net 23,278 2,024 >500

(k) Finance income 25,596 11,894 115.2 (l) Finance costs (19,157) (24,670) (22.3) (m) Finance income/(costs), net 6,439 (12,776) (150.4)

(n) Share of results of associates and joint ventures, net of tax 38,870 32,280 20.4

(o) Profit before taxation 290,600 282,999 2.7

(p) Taxation (56,900) (53,892) 5.6

(q) Profit for the year 233,700 229,107 2.0

Attributable to: (r) Shareholders of the Company 226,720 220,144 3.0 (s) Non-controlling interests 6,980 8,963 (22.1)

233,700 229,107 2.0

2. (a) Profit from operations is arrived at after charging/(crediting) the following:

Depreciation and amortisation 71,470 60,166 18.8

Allowance for doubtful debts & bad debts written off, net 1,871 2,318 (19.3)

Allowance for inventory obsolescence, net 29,522 51,864 (43.1)

Impairment losses / write-off of intangible assets 143 1,186 (87.9)

(b) Finance income/(costs), net comprises:

Interest income 3,054 4,431 (31.1)

Foreign exchange gain 11,670 3,519 231.6

Fair value changes of financial instruments/hedged items 56 (3,811) (101.5)

Interest expenses (8,344) (16,917) (50.7)

Others 3 2 50.0

6,439 (12,776) (150.4) Aerospace FY2015 FY2014 + / (-) $'000 $'000 %

3. (a) Profit for the year [1(q) above] as a percentage of revenue 11.2% 11.1%

(b) Profit attributable to shareholders [1(r) above] as a percentage of share capital and reserves at end of year 29.2% 29.2%

4. (a) Revenue reported for first half year 1,007,557 1,042,104 (3.3)

(b) Profit for the period reported for first half year 117,095 120,391 (2.7)

(d) Profit for the period reported for second half year 116,605 108,716 7.3

5. (a) There was an adjustment of $9,028,000 for overprovision of current tax and $12,875,000 for underprovision of deferred tax in respect of prior years. (FY2014: There was an adjustment of $3,269,000 for overprovision of current tax and $2,208,000 for underprovision of deferred tax in respect of prior years.)

(b) There was no disposal of property during the year.

6. Business Group Information

By Business Group

Fourth Quarter vs Third Quarter (unaudited) Revenue Profit before Taxation 4Q2015 3Q2015 + / (-) 4Q2015 3Q2015 + / (-) $'000 $'000 % $'000 $'000 %

Aircraft Maintenance & Modification 282,192 227,916 23.8 55,740 33,615 65.8 Component/Engine Repair & Overhaul 174,279 191,614 (9.0) 14,009 16,640 (15.8) Engineering & Material Services 124,144 87,912 41.2 15,524 12,998 19.4 Total 580,615 507,442 14.4 85,273 63,253 34.8

Full Year Ended 31 December Revenue Profit before Taxation FY2015 FY2014 + / (-) FY2015 FY2014 + / (-) $'000 $'000 % $'000 $'000 %

Aircraft Maintenance & Modification 1,045,085 1,107,694 (5.7) 172,445 209,240 (17.6) Component/Engine Repair & Overhaul 652,531 609,933 7.0 59,812 5,684 >500 Engineering & Material Services 397,998 353,837 12.5 58,343 68,075 (14.3) Total 2,095,614 2,071,464 1.2 290,600 282,999 2.7

Revenue FY2015 FY2014 $'000 $'000 By Geographical Areas

Asia 1,184,914 1,131,052 4.8 USA 589,748 677,358 (12.9) Europe 139,382 111,259 25.3 Others 181,570 151,795 19.6 Total 2,095,614 2,071,464 1.2

By Country of Incorporation

Asia 1,579,225 1,553,998 1.6 USA 454,136 457,380 (0.7) Europe 60,425 58,551 3.2 Others 1,828 1,535 19.1 Total 2,095,614 2,071,464 1.2 Aerospace

7. Review of Performance

(a) Revenue

FY2015 vs FY2014 FY2015 FY2014 Growth $2,096m $2,071m $25m 1%

Revenue for FY2015 was $25 million higher compared to that of FY2014. This was due mainly to stronger US dollar, more Maintenance by the Hour (MBH TM ) programmes in the Engineering & Materials Services (EMS) business group and higher output in the engines division in the Component/Engine Repair & Overhaul (CERO) business group, partially reduced by lower revenue in the Aircraft Maintenance & Modification (AMM) business group.

(b) Profitability

FY2015 vs FY2014 FY2015 FY2014 Growth $290.6m $283.0m $7.6m 3%

The current year's profit before tax (PBT) of $290.6 million was higher than FY2014 PBT of $283.0 million by $7.6 million. This was a result of lower operating expenses, the recognition of negative goodwill arising from the acquisition of the remaining interest of an associate, lower interest expense, favourable foreign exchange impact and higher contributions from associates, partially reduced by lower gross profit. The lower gross profit was due to lower gross profit margin, lower airframe maintenance work during the summer months and provision for liquidated damages for 757 15-Pallet programme.

8. Prospects

FY2016

Barring unforeseen circumstances, FY2016 revenue is expected to be higher compared to FY2015, whilst profit before tax is expected to be comparable.

9. Balance Sheet

31-Dec-15 31-Dec-14 $'000 $'000

Property, plant and equipment 820,145 671,068 Associates and joint ventures 311,473 322,508 Investments 12 12 Intangible assets 141,239 126,958 Long-term receivables, non-current 64 1,534 Deferred tax assets 11,840 19,941 Derivative financial instruments, non-current 136 - Non-current assets 1,284,909 1,142,021 Current assets 1,355,186 1,383,006 Total assets 2,640,095 2,525,027

Current liabilities 1,262,967 1,139,953 Non-current liabilities 611,257 639,407 Total liabilities 1,874,224 1,779,360

Share capital and reserves 686,310 668,421 Non-controlling interests 79,561 77,246 Total equity and liabilities 2,640,095 2,525,027

Net current assets 92,219 243,053 Aerospace

10. Statement of Cash Flows for the year ended 31 December 2015

FY2015 FY2014 $'000 $'000

Net cash from/(used in) operating activities 350,010 257,966

Net cash from/(used in) investing activities (175,280) (60,123) Proceeds from sale of property, plant and equipment 1,175 2,318 Dividends from associates 34,291 27,125 Dividends from investments 3 2 Purchase of property, plant and equipment (199,059) (65,410) Development of intangible assets (7,455) (10,240) Loan to associates - (640) Investment in joint ventures - (622) Acquisition of intangible assets - (12,024) Acquisition of a subsidiary (4,235) (632)

Net cash from/(used in) financing activities (190,682) (330,753) Capital contribution from immediate holding company - 216,000 Capital contribution from non-controlling interests 588 6,772 Proceeds from related corporation loans 77,596 290,224 Repayment of related corporation loans (240,988) (419,113) Proceeds from/(repayment of) long term bank loans, net 72,562 (32,136) Proceeds from/(repayment of) short term bank loans 436 (257,878) Repayment of lease obligations (546) (371) Dividend paid to shareholder (81,764) (107,299) Dividend paid to non-controlling interests (7,410) (12,525) Interest paid (11,156) (14,427)

Net increase/(decrease) in cash and cash equivalents (15,952) (132,910) Cash and cash equivalents at beginning of the year 243,497 382,022 Exchange difference on cash and cash equivalents at beginning of the year 6,729 (5,615) Cash and cash equivalents at end of the year 234,274 243,497

11. Economic Value Added (EVA)

EVA for FY2015 was $173.7 million, an increase of $11.6 million or 7% over FY2014. The weighted average cost of capital was 5.5% for 2015 (2014: 5.6%).

Media Contact: Belinda Ng VP, Corporate Communications Tel: (65) 6380 6176 Fax: (65) 6280 8213 Email: [email protected]

News Release

Electronics

“Higher Revenue and Net Profit”

FINANCIAL HIGHLIGHTS For the year ended 31 December 2015

2015 2014 Growth FY FY %

Revenue ($m) 1,743 1,614 8 Earnings before interest and tax (EBIT) ($m) 178.7 174.4 2 Other income, net ($m) 14.7 10.4 41 Finance costs, net ($m) (2.4) (1.3) (92) Profit before tax (PBT) ($m) 191.0 184.0 4 Profit attributable to shareholders ($m) 163.0 152.1 7 Economic value added (EVA) ($m) 132.8 118.7 12

“The Electronics Sector closed the year with higher revenue and net profit.

It has been a year filled with exciting milestones. We successfully launched TeLEOS-1 and played a key role in the completion of the Downtown Line Stage 2 project. We also successfully delivered the National Cyber Security Operation Centres for key Government Agencies.

We will continue to develop new technologies and solutions to address the needs of our customers”

Lee Fook Sun, President

N.B.: All currencies are in Singapore dollars

Electronics

Electronics sector audited results for the year ended 31 December 2015

FY2015 FY2014 + / (-) $'000 $'000 %

1. (a) Revenue 1,743,174 1,614,079 8.0

(b) Cost of sales (1,222,376) (1,125,260) 8.6

(d) Distribution and selling expenses (90,657) (82,982) 9.2

(e) Administrative expenses (162,649) (153,706) 5.8

(f) Other operating expenses (88,793) (77,760) 14.2

(g) Profit from operations 178,699 174,371 2.5

(h) Other income 14,654 10,402 40.9 (i) Other expenses - (6) (100.0) (j) Other income, net 14,654 10,396 41.0

(k) Finance income 3,683 4,867 (24.3) (l) Finance costs (6,122) (6,136) (0.2) (m) Finance costs, net (2,439) (1,269) 92.2

(n) Share of results of associates and joint ventures, net of tax 38 470 (91.9)

(o) Profit before taxation 190,952 183,968 3.8

(p) Taxation (27,191) (30,614) (11.2)

(q) Profit for the year 163,761 153,354 6.8

Attributable to: (r) Shareholder of the Company 163,000 152,143 7.1 (s) Non-controlling interests 761 1,211 (37.2)

163,761 153,354 6.8

2. (a) Profit from operations is arrived at after charging/(crediting) the following:

Depreciation and amortisation 39,871 38,362 3.9

Allowance/(write-back of allowance) for doubtful debts & bad debts written off, net 2,009 (2,226) (190.3)

Allowance for inventory obsolescence, net 915 3,045 (70.0)

(b) Finance costs, net comprises:

Interest income 3,366 4,867 (30.8)

Foreign exchange gain/(loss), net 311 (287) (208.4)

Gain on disposal of an investment 6 - NM

Impairment losses on investments - (638) (100.0)

Interest expenses (6,122) (5,211) 17.5

(2,439) (1,269) 92.2

* NM - Not Meaningful Electronics

FY2015 FY2014 + / (-) $'000 $'000 %

3. (a) Profit for the year [1(q) above] as a percentage of revenue 9.4% 9.5%

(b) Profit attributable to shareholders [1(r) above] as a percentage of share capital and reserves at end of year 46.8% 47.1%

4. (a) Revenue reported for first half year 784,530 763,414 2.8

(b) Profit for the period reported for first half year 69,544 68,616 1.4

(d) Profit for the period reported for second half year 94,217 84,738 11.2

5. (a) There was overprovision of current tax and deferred tax of $7,080,000 and $1,319,000 respectively in respect of prior years (FY2014: There was overprovision of current tax and deferred tax of $1,989,000 and $2,875,000 respectively in respect of prior years).

(b) There was no disposal of property during the year.

6. Business Group Information

By Business Group

Fourth Quarter vs Third Quarter (unaudited) Revenue Profit before Taxation 4Q2015 3Q2015 + / (-) 4Q2015 3Q2015 + / (-) $'000 $'000 % $'000 $'000 %

Large-Scale Systems Group 93,231 102,454 (9.0) 4,193 9,071 (53.8) Communication & Sensor Systems Group 270,914 191,865 41.2 32,379 18,962 70.8 Software Systems Group 155,856 144,324 8.0 23,582 21,300 10.7 Total 520,001 438,643 18.5 60,154 49,333 21.9

Full Year Ended 31 December Revenue Profit before Taxation FY2015 FY2014 + / (-) FY2015 FY2014 + / (-) $'000 $'000 % $'000 $'000 %

Large-Scale Systems Group 396,738 380,625 4.2 39,326 42,688 (7.9) Communication & Sensor Systems Group 814,888 759,736 7.3 75,204 70,329 6.9 Software Systems Group 531,548 473,718 12.2 76,422 70,951 7.7 Total 1,743,174 1,614,079 8.0 190,952 183,968 3.8

Revenue FY2015 FY2014 $'000 $'000 By Geographical Areas

Asia 1,336,315 1,271,829 5.1 USA 148,354 114,269 29.8 Europe 113,235 89,327 26.8 Others 145,270 138,654 4.8 Total 1,743,174 1,614,079 8.0

By Country of Incorporation

Asia 1,407,747 1,341,814 4.9 USA 272,483 217,968 25.0 Europe 22,871 19,106 19.7 Others 40,073 35,191 13.9 Total 1,743,174 1,614,079 8.0 Electronics

7. Review of Performance

(a) Revenue

FY2015 vs FY2014 FY2015 FY2014 Growth $1,743m $1,614m $129m 8%

Revenue of $1,743 million recorded in FY2015 was higher than that of FY2014 by 8% or $129 million. Software Systems Group (SSG) recorded higher sales mainly due to higher value project milestone completions. Communication & Sensor Systems Group's (CSG) sales were higher mainly due to higher value project milestone completions and increased sales of satellite communication products. Large-Scale Systems Group's (LSG) sales were comparable to that of FY2014.

(b) Profitability

FY2015 vs FY2014 FY2015 FY2014 Growth $191.0m $184.0m $7.0m 4%

The profit before tax of $191.0 million for FY2015 was comparable to that of FY2014. Notwithstanding higher sales and higher other income, the Sector recorded comparable profit as a result of less favourable sales mix and higher operating expenses.

8. Prospects

FY2016

Barring unforeseen circumstances, FY2016 revenue is expected to be higher and profit before tax is expected to be comparable to FY2015.

9. Balance Sheet

31-Dec-15 31-Dec-14 $'000 $'000

Property, plant and equipment 185,192 179,704 Associates and joint ventures 1,397 10,297 Investments 9,902 3,963 Intangible assets 335,049 304,545 Long-term receivable, non-current 913 187 Deferred tax assets 29,726 30,023 Derivative financial instruments, non-current 40 - Non-current assets 562,219 528,719 Current assets 1,299,812 1,265,351 Total assets 1,862,031 1,794,070

Current liabilities 1,114,278 1,086,428 Non-current liabilities 523,445 510,536 Total liabilities 1,637,723 1,596,964

Share capital and reserves 217,088 191,847 Non-controlling interests 7,220 5,259 Total equity and liabilities 1,862,031 1,794,070

Net current assets 185,534 178,923 Electronics

10. Statement of Cash Flows for the year ended 31 December 2015

FY2015 FY2014 $'000 $'000

Net cash from operating activities 65,846 88,193

Net cash used in investing activities (33,151) (99,367) Proceeds from sale of property, plant and equipment 50 65 Proceed from sale of an unquoted investment 6 - Dividends from an associate and a joint venture 720 1,297 Purchase of property, plant and equipment (32,154) (42,574) Investment in unquoted investments (5,281) (3,970) Acquisition of other intangible assets (14,168) (18,854) Acquisition of controlling interests in a subsidiary, net cash acquired 17,676 565 Deconsolidation of a subsidiary - (35,896)

Net cash used in financing activities (40,633) (188,171) Repayment of a related party loans (2,723) (50,140) Repayment of loans by related parties 163,000 93,000 Repayment of a joint venture loan - (824) Repayment of lease obligations - (6) Proceeds from related parties loans 46,155 89,009 Proceed of a loan from a joint venture 5,000 - Loans to related parties (83,000) (173,000) Acquisition of non-controlling interests in subsidiaries (7,600) - Dividends paid to shareholder (158,059) (143,249) Interest paid (2,827) (4,005) Deposits (pledged)/discharged (579) 1,044

Net decrease in cash and cash equivalents (7,938) (199,345) Cash and cash equivalents at beginning of the year 276,893 476,383 Exchange difference on cash and cash equivalents at beginning of the year 1,266 (145) Cash and cash equivalents at end of the year 270,221 276,893 1

1 Cash and cash equivalents at the end of FY2014 was after deducting $80.0 million of short term net lending to a related party.

11. Economic Value Added (EVA)

EVA for FY2015 was $132.8 million, an increase of $14.1 million or 12% over FY2014. The weighted average cost of capital was 5.5% for 2015 (2014: 5.6%).

Media Contact: Michelle Choh AVP, Corporate Communications Tel: (65) 64131788 Fax: (65) 64848840 Email: [email protected]

News Release

Land Systems

“Higher profits”

FINANCIAL HIGHLIGHTS For the year ended 31 December 2015

2015 2014 Growth FY FY %

Revenue ($m) 1,401 1,405 0 Earnings before interest and tax (EBIT) ($m) 47.2 38.7 22 Other income, net ($m) 11.6 13.0 (11) Finance costs, net ($m) (10.4) (8.5) (22) Profit before tax (PBT) ($m) 65.0 56.2 16 Profit attributable to shareholders ($m) 55.7 50.3 11 Economic value added (EVA) ($m) 15.0 5.0 200

“FY2015 revenue was comparable to FY2014. Higher PBT in 2015 was due mainly to lower allowances and provisions, partially offset by unfavourable product mix.

In 2016, we will pursue key programmes and continue to improve productivity. We will continue to collaborate with partners to penetrate new markets and pursue new customers.”

Ravinder Singh, President

N.B.: All currencies are in Singapore dollars.

Land Systems

Land Systems sector audited results for the year ended 31 December 2015:

FY2015 FY2014 + / (-) $'000 $'000 %

1. (a) Revenue 1,401,019 1,405,132 (0.3)

(b) Cost of sales (1,133,748) (1,140,622) (0.6)

(d) Distribution and selling expenses (64,989) (69,100) (5.9)

(e) Administrative expenses (111,260) (106,692) 4.3

(f) Other operating expenses (43,833) (49,991) (12.3)

(g) Profit from operations 47,189 38,727 21.9

(h) Other income 13,239 14,525 (8.9) (i) Other expenses (1,645) (1,570) 4.8 (j) Other income, net 11,594 12,955 (10.5)

(k) Finance income 2,880 3,124 (7.8) (l) Finance costs (13,252) (11,655) 13.7 (m) Finance costs, net (10,372) (8,531) 21.6

(n) Share of results of associates and joint ventures, net of tax 16,590 13,050 27.1

(o) Profit before taxation 65,001 56,201 15.7

(p) Taxation (14,395) (11,001) 30.9

(q) Profit for the year 50,606 45,200 12.0

Attributable to: (r) Shareholders of the Company 55,736 50,323 10.8 (s) Non-controlling interests (5,130) (5,123) 0.1

50,606 45,200 12.0

2. (a) Profit from operations is arrived at after charging/(crediting) the following:

Depreciation and amortisation 38,981 38,053 2.4

Allowance for doubtful debts & bad debts written off, net 9,535 11,863 (19.6)

Allowance for inventory obsolescence, net 19,385 45,529 (57.4)

Impairment losses of intangible assets 4,942 12,853 (61.5)

(b) Finance costs, net comprises:

Interest income 2,586 2,557 1.1

Foreign exchange loss, net (2,682) (736) 264.4

Fair value changes of financial instruments / hedged items 180 (163) (210.4)

Gain on disposal of investments, net - 1 (100.0)

Interest expenses (10,456) (10,190) 2.6

(10,372) (8,531) 21.6 Land Systems

FY2015 FY2014 + / (-) $'000 $'000 %

3. (a) Profit for the period [1(q) above] as a percentage of revenue 3.6% 3.2%

(b) Profit attributable to shareholders [1(r) above] as a percentage of share capital and reserves at end of year 15.1% 13.6%

4. (a) Revenue reported for first half year 665,709 622,926 6.9

(b) Profit for the period reported for first half year 24,019 31,413 (23.5)

(d) Profit for the period reported for second half year 26,587 13,787 92.8

5. (a) There was an over-provision of current tax of $1,595,000 and deferred tax of $951,000 in respect of prior years. (FY2014: There was an over-provision of current tax of $4,201,000 and under-provision of deferred tax of $175,000 in respect of prior years).

(b) There was a disposal of property due to factory relocation during the year. Arising from government compensation for the relocation, there was no profit and loss impact.

6. Business Group Information

By Business Group

Fourth Quarter vs Third Quarter (unaudited) Revenue Profit before Taxation 4Q2015 3Q2015 + / (-) 4Q2015 3Q2015 + / (-) $'000 $'000 % $'000 $'000 %

Automotive 320,137 271,269 18.0 (7,681) 9,534 (180.6) Munitions & Weapon 79,091 36,034 119.5 13,535 2,069 >500 Services, Trading & Others 15,222 13,557 12.3 6,882 8,156 (15.6) Total 414,450 320,860 29.2 12,736 19,759 (35.5)

Full Year Ended 31 December Revenue Profit before Taxation FY2015 FY2014 + / (-) FY2015 FY2014 + / (-) $'000 $'000 % $'000 $'000 %

Automotive 1,136,081 1,065,335 6.6 9,019 (14,402) (162.6) Munitions & Weapon 199,188 253,901 (21.5) 26,134 38,596 (32.3) Services, Trading & Others 65,750 85,896 (23.5) 29,848 32,007 (6.7) Total 1,401,019 1,405,132 (0.3) 65,001 56,201 15.7

Revenue FY2015 FY2014 $'000 $'000 By Geographical Areas

Asia 1,018,169 1,008,154 1.0 USA 297,948 248,950 19.7 Europe 17,615 22,333 (21.1) Others 67,287 125,695 (46.5) Total 1,401,019 1,405,132 (0.3)

By Country of Incorporation

Asia 1,068,195 1,115,960 (4.3) USA 315,074 263,577 19.5 Europe - - - Others 17,750 25,595 (30.7) Total 1,401,019 1,405,132 (0.3) Land Systems

7. Review of Performance

(a) Revenue

FY2015 vs FY2014 FY2015 FY2014 Growth $1,401m $1,405m ($4m) (0%)

FY2015 revenue was comparable to FY2014.

(b) Profitability

FY2015 vs FY2014 FY2015 FY2014 Growth $65.0m $56.2m $8.8m 16%

FY2015 profit before tax (PBT) of $65.0 million was higher than FY2014 PBT by 16% or $8.8 million. This was due to favourable results of the Automotive (Auto) business group, partially offset by lower profits of the Munitions & Weapon (M&W) and Services, Trading & Others (S&T) business groups. The Auto business group's favourable results were due mainly to higher revenue and lower allowances and provisions, partially offset by unfavourable product mix. The M&W business group had lower profits mainly from lower revenue and unfavourable product mix, partially offset by lower allowance for inventory obsolescence. The S&T business group's lower profits were due mainly to lower revenue.

8. Prospects

FY2016

Barring unforeseen circumstances, FY2016 revenue is expected to be comparable to FY2015, while PBT is expected to be lower.

9. Balance Sheet

31-Dec-15 31-Dec-14 $'000 $'000 Property, plant and equipment 354,677 372,275 Associates and joint ventures 121,781 112,750 Investments 189 378 Intangible assets 208,201 205,335 Long-term receivables, non-current - 13 Finance lease receivables, non-current 523 973 Deferred tax assets 25,993 18,028 Amounts due from related parties, non-current 6,049 5,650 Derivative financial instruments, non-current 1,138 1,196 Non-current assets 718,551 716,598 Current assets 1,258,310 1,487,167 Total assets 1,976,861 2,203,765

Current liabilities 942,164 965,063 Non-current liabilities 771,307 966,263 Total liabilities 1,713,471 1,931,326

Share capital and reserves 221,847 223,060 Non-controlling interests 41,543 49,379 Total equity and liabilities 1,976,861 2,203,765

Net current assets 316,146 522,104 Land Systems

10. Statement of Cash Flows for the year ended 31 December 2015

FY2015 FY2014 $'000 $'000

Net cash from operating activities 47,525 122,107

Net cash used in investing activities (15,015) (43,601) Proceeds from sale of property, plant and equipment 580 1,834 Proceeds from sale of an investment property - 22,000 Proceeds from sale of a quoted investment - 1 Proceeds from disposal of a subsidiary - 2 Proceeds from disposal of a joint venture - 3,280 Repayment of short term loan by a joint venture - 3,887 Dividends from associates 7,652 9,418 Purchase of property, plant and equipment (22,371) (83,829) Purchase of intangible assets (876) - Acquisition of non-controlling interests in subsidiary - (194)

Net cash used in financing activities (116,846) (47,095) Interest paid (10,414) (10,190) Repayment of short-term related party loans (72,705) (7,865) Proceeds from short-term related party loans 46,752 20,000 Short-term loan to a related corporation (20,000) - Repayment of short-term loan by a related corporation 20,000 - Repayment of short-term loan by joint ventures 272 - Repayment of short-term immediate holding company loans (65,500) (47,000) Proceeds from short-term immediate holding company loans 44,100 - Repayment of long-term related party loans (710) - Repayment of long-term immediate holding company loans (50,000) - Proceeds from long-term immediate holding company loans - 50,000 Repayment of short-term loans (156) (369) Repayment of short-term bank loans (30,802) (45,709) Proceeds from short-term bank loans 40,540 28,847 Proceeds of a short-term loan from non-controlling interest 1,615 - Dividends paid to shareholder (17,800) (31,800) Dividends paid to non-controlling interests (3,403) (5,666) Capital contribution from non-controlling interests 50 2,596 Deposits pledged 1,315 61

Net (decrease)/increase in cash and cash equivalents (84,336) 31,411 Cash and cash equivalents at beginning of the year 276,750 244,309 Exchange difference on cash and cash equivalents at beginning of the year 943 1,030 Cash and cash equivalents at end of the year 193,357 276,750

11. Economic Value Added (EVA)

EVA for FY2015 was $15.0 million, an increase of $10.0 million or 200% over FY2014. The weighted average cost of capital was 5.5% for 2015 (2014: 5.6%).

Media Contact: Rudy Tan SVP, Corporate Development Tel: (65) 6660 7105 Fax: (65) 6261 6932 Email: [email protected]

News Release

Marine

“Lower Profits”

FINANCIAL HIGHLIGHTS For the year ended 31 December 2015

2015 2014 Growth FY FY %

Revenue ($m) 958 1,342 (29) Earnings before interest and tax (EBIT) ($m) 71.8 100.8 (29) Other income, net ($m) 7.4 12.1 (39) Finance income, net ($m) 3.6 3.9 (8) Profit before tax (PBT) ($m) 88.3 122.8 (28) Profit attributable to shareholders ($m) 85.7 108.1 (21) Economic value added (EVA) ($m) 76.5 93.6 (18)

N.B.: All currencies are in Singapore dollars.

“Marine sector recorded lower profits in 2015 compared to 2014 due mainly to weaker performance from Shipbuilding and Engineering business groups.

We expect challenging operating environment and remain focused on building up our order book in 2016.”

Ng Sing Chan, President

Marine

Marine sector audited results for the year ended 31 December 2015:

FY2015 FY2014 + / (-) $'000 $'000 %

1. (a) Revenue 958,373 1,341,951 (28.6)

(b) Cost of sales (836,564) (1,187,968) (29.6)

(d) Distribution and selling expenses (5,979) (8,906) (32.9)

(e) Administrative expenses (35,068) (33,150) 5.8

(f) Other operating expenses (8,967) (11,092) (19.2)

(g) Profit from operations 71,795 100,835 (28.8)

(h) Other income 7,482 12,115 (38.2) (i) Other expenses (115) (37) 210.8 (j) Other income, net 7,367 12,078 (39.0)

(k) Finance income 3,716 3,931 (5.5) (l) Finance costs (103) - NM (m) Finance income, net 3,613 3,931 (8.1)

(n) Share of results of associates and joint ventures, net of tax 5,500 5,936 (7.3)

(o) Profit before taxation 88,275 122,780 (28.1)

(p) Taxation (2,558) (14,695) (82.6)

(q) Profit for the year 85,717 108,085 (20.7)

Attributable to: (r) Shareholders of the Company 85,725 108,086 (20.7) (s) Non-controlling interests (8) (1) 700.0

85,717 108,085 (20.7)

* NM - Not Meaningful

2. (a) Profit from operations is arrived at after charging/(crediting) the following:

Depreciation and amortisation 29,609 27,098 9.3

(Write-back of allowance)/allowance for doubtful debts & bad debts written off, net (564) 2,110 (126.7)

(Write-back of allowance)/allowance for inventory obsolescence, net (498) 448 (211.2)

(b) Finance income, net comprises:

Interest income 3,716 3,796 (2.1)

Foreign exchange (loss)/gain, net (53) 135 (139.3)

Interest expenses (50) - NM

3,613 3,931 (8.1) Marine

FY2015 FY2014 + / (-) $'000 $'000 %

3. (a) Profit for the year [1(q) above] as a percentage of revenue 8.9% 8.1%

(b) Profit attributable to shareholders [1(r) above] as a percentage of share capital and reserves at end of year 39.2% 58.4%

4. (a) Revenue reported for first half year 533,527 671,455 (20.5)

(b) Profit for the period reported for first half year 44,702 45,873 (2.6)

(d) Profit for the period reported for second half year 41,015 62,212 (34.1)

5. (a) There was an adjustment of $2,170,000 for under provision of current tax and $2,219,000 for over provision of deferred tax in respect of prior years (FY2014: There was an adjustment of $4,172,000 for over provision of current tax and $1,833,000 for under provision of deferred tax in respect of prior years).

(b) There was disposal of a property with a gain of $0.7 million (FY2014: There was no disposal of property during the year).

6. Business Group Information

By Business Group

Fourth Quarter vs Third Quarter (unaudited) Revenue Profit before Taxation 4Q2015 3Q2015 + / (-) 4Q2015 3Q2015 + / (-) $'000 $'000 % $'000 $'000 %

Shipbuilding 126,020 134,567 (6.4) 2,174 1,294 68.0 Shiprepair 71,464 42,874 66.7 20,675 12,747 62.2 Engineering 22,464 27,457 (18.2) (3,505) 1,902 (284.3) Total 219,948 204,898 7.3 19,344 15,943 21.3

Full Year Ended 31 December Revenue Profit before Taxation FY2015 FY2014 + / (-) FY2015 FY2014 + / (-) $'000 $'000 % $'000 $'000 %

Shipbuilding 613,576 1,004,822 (38.9) 15,030 38,576 (61.0) Shiprepair 262,222 260,632 0.6 71,996 73,327 (1.8) Engineering 82,575 76,497 7.9 1,249 10,877 (88.5) Total 958,373 1,341,951 (28.6) 88,275 122,780 (28.1)

Revenue FY2015 FY2014 $'000 $'000 By Geographical Areas

Asia 372,780 360,572 3.4 USA 370,882 405,497 (8.5) Europe 40,796 61,877 (34.1) Others 173,915 514,005 (66.2) Total 958,373 1,341,951 (28.6)

By Country of Incorporation

Asia 598,188 945,858 (36.8) USA 360,185 396,093 (9.1) Total 958,373 1,341,951 (28.6) Marine

7. Review of Performance

(a) Revenue

FY2015 vs FY2014 FY2015 FY2014 Growth $958m $1,342m ($384m) (29%)

Revenue for FY2015 of $958 million was lower than FY2014 by 29% or $384 million due mainly to lower revenue recognition from Shipbuilding contracts from both the local and US operations.

(b) Profitability

FY2015 vs FY2014 FY2015 FY2014 Growth $88.3m $122.8m ($34.5m) (28%)

FY2015 profit before tax (PBT) of $88.3 million was lower than FY2014 by 28% or $34.5 million due mainly to weaker Shipbuilding performance from both operations.

8. Prospects

FY2016

Barring unforeseen circumstances, revenue for FY2016 is expected to be higher compared to FY2015 whilst PBT is expected to be lower than FY2015.

9. Balance Sheet

31-Dec-15 31-Dec-14 $'000 $'000

Property, plant and equipment 332,533 334,075 Associates and joint ventures 8,229 8,159 Intangible assets 84 94 Long-term receivables, non-current 4,363 1,001 Deferred tax assets 17,225 19,021 Amounts due from related parties, non-current 4,806 12,806 Derivative financial instruments, non-current 2,341 605 Non-current assets 369,581 375,761 Current assets 633,271 738,494 Total assets 1,002,852 1,114,255

Current liabilities 709,493 856,315 Non-current liabilities 101,234 99,068 Total liabilities 810,727 955,383

Share capital and reserves 192,093 158,834 Non-controlling interests 32 38 Total equity and liabilities 1,002,852 1,114,255

Net current liabilities (76,222) (117,821) Marine

10. Statement of Cash Flows for the year ended 31 December 2015

FY2015 FY2014 $'000 $'000

Net cash (used in)/from operating activities (52,265) 112,462

Net cash used in investing activities (10,850) (15,064) Proceeds from sale of property, plant and equipment 853 39 Dividends from joint ventures 5,430 1,000 Proceeds from insurance settlement - 5,220 Purchase of property, plant and equipment (17,133) (21,323)

Net cash used in financing activities (83,827) (209,460) Proceeds from short term bank loans 29,354 - Repayment of short term bank loan (11,197) - Proceeds from related corporation loans 2,829 - Repayment of related corporation loans (2,852) - Loans to related corporations (199,128) (115,494) Repayment of loans by related corporations 156,240 19,814 Dividends paid to shareholder (59,023) (113,780) Interest paid (50) -

Net decrease in cash and cash equivalents (146,942) (112,062) Cash and cash equivalents at beginning of the year 224,027 333,058 Exchange difference on cash and cash equivalents at beginning of the year 1,520 3,031 Cash and cash equivalents at end of the year 78,605 224,027

11. Economic Value Added (EVA)

EVA for FY2015 was $76.5 million, a decrease of $17.0 million or 18% compared to FY2014. The weighted average cost of capital was 5.5% for 2015 (2014: 5.6%).

Media Contact: Nancy Toh Senior Vice President / Group Financial Controller Tel: (65) 6860 9213 Fax: (65) 6861 3028 Email: [email protected]