S P R E A D I N G OUR WINGS Annual Report 2012/13 CORPORATE PROFILE LisTED on THE MAinBOARD OF THE SingAPorE EXCHAngE in 2000, SIA EnginEEring COMPANY LIMITED IS ONE OF THE WORLd’S LEADING MAINTENANCE, REPAIR AND OVERHAUL (MRO) ORGANISATIONS. ITS ONE-STOP MAINTENANCE FACILITY IN SINGAPORE OFFERS WORLD-CLASS MRO SERVICES TO A CLIENT BASE OF MORE THAN 100 INTERNATIONAL AIRLINES AND S P R E A D I N G AEROSPACE EQUIPMENT MANUFACTURERS. OUR WINGS COMPLEMENTING ITS FULL SPECTRUM OF MRO SERVICES IS ITS GROWING PORTFOLIO Annual Report 2012/13 OF 25 JOINT VENTURES IN 9 COUNTRIES, FORGED WITH STRATEGIC PARTNERS AND LEADING ORIGINAL EQUIPMENT MANUFACTURERS. THE COMPANY HOLDS CERTIFICATIONS FROM 26 NATIONAL AirworTHINESS AUTHORITIES WORLDWIDE. LINE MAINTENANCE 25 JOINT VENTURES IN 9 COUNTRIES AIRCRAFT SERVICES KNOWLEDGE-BASED SIAEP / Philippines JADE / Singapore 650 28 7 ENGINE REPAIR & OVERHAUL LINE MAINTENANCE FLIGHTS ESA / Singapore PAPAS / Hong Kong AIRPORTS COUNTRIES SAESL / Singapore PT JAES / Indonesia DAILY HAESL / Hong Kong APlus / Philippines AMSA / Australlia ENGINE PART REPAIR & OVERHAUL SEUS / USA SAAM / Vietnam AST / Singapore ROUND-THE-CLOCK LINE MAINTENANCE SERVICES CAS / Singapore WITH TURNAROUND OF ACTS / Taiwan COMPONENT REPAIR & OVERHAUL IECO / Singapore SJAMCO / Singapore PWA / Ireland FAST / Singapore TCS / Singapore MSA / Singapore 1 AIRCRAFT EVERY 2 MINUTES IAT-A / Singapore GASCA / Singapore ACES / Singapore SEA / Singpapore PACSS / Singapore AIRCRAFT & COMPONENT SERVICES FLEET MANAGEMENT 145 12 5 520 6 2 AIRCRAFT AIRLINES AIRCRAFT AIRCRAFT CHECKS HANGARS HANGARS TYPES YEARLY SINGAPORE PHILIPPINES FIRST IN THE WORLD ONE OF THE WORLD’S LARGEST TO MAINTAIN THE A380 SUPER-JUMBO AIRCRAFT FLEET MANAGEMENT SERVICE PROVIDERS 01 FY 2012/2013 at A GLANCE ANNUAL REPORT 2012/13 ANNUAL REPORT REVENUE NET PROFIT DIVIDENDS PER SHARE $1,146.7 $270.1 22 million million cents SIA ENGINEERING COMPANY SHARE PRICE (AS at 31 MARCH) ($) 4.70 4.74 5 3.95 4.05 4.03 4 3.55 3.12 3 2.33 2.07 1.83 1.87 2 1.65 1.18 1 0 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 /2001 /2002 /2003 /2004 /2005 /2006 /2007 /2008 /2009 /2010 /2011 /2012 /2013 CONTENTS Chairman’s Statement 2 Corporate Social Responsibility 7 Financials 41 Board of Directors 4 Corporate Calendar 8 Shareholding Statistics 137 Executive Management 5 Statistical Highlights 9 Share Price and Turnover 138 Operations Review 6 Corporate Governance 10 Notice of Annual General Meeting 139 Proxy Form CHAIRMAN’S statement 02 DEAR SHAREHOLDERS, The challenging environment notwithstanding, we will continue I am heartened by the Company’s to fortify our core strengths and creditable set of results in the face invest in strategic opportunities ING OUR WINGS D of prevailing challenges in the to remain a leading player in the aviation industry. aircraft maintenance, repair and SPREA overhaul (MRO) global market. For the year ended 31 March 2013, net profit for the Group remained STRENGTHENING THE CORE stable at $270.1 million on a revenue of $1,146.7 million. Contributions Concerted efforts over the last few from associated and joint venture years to grow the line maintenance companies rose 1.5% to $159.2 network beyond Singapore have led million, representing 52% of the to the establishment of overseas Group’s pre-tax profit. Our linkage stations in six countries. Applying to the SIA Group, and the joint the same strategy, we have grown ventures with leading aerospace heavy maintenance facilities beyond equipment manufacturers and our main base in Singapore. strategic partners, continued to We added a second single-bay sustain the Group’s performance hangar at Clark, Philippines and in the year under review. construction is underway for a third hangar, capable of accommodating Encouraging signs of traffic growth wide-body aircraft types, such as in Asia-Pacific may suffer a setback the B747, B777 and A330. These if the recovery in the US is not hangars will enhance the Group’s maintained and the European heavy maintenance capacity. economy remains depressed. One of the six hangars in Singapore was converted to a state-of-the-art aircraft painting facility. It offers high- quality paintwork, complementing the MRO services carried out in the hangars and joint venture facilities – truly a one-stop solution. “GIVEN THE STRATEGIC LOCATION OF THE SINGAPORE HUB WITHIN THE ASIA-PACIFIC REGION, THE GROUP IS WELL STEPHEN LEE CHING YEN POSITIONED TO SUSTAIN Chairman ITS GROWTH AND SEIZE EMERGING OPPORTUNITIES.” 03 We continued to make inroads Given the strategic location of the DIVIDENDS into the growing VVIP modification Singapore hub within the Asia- market. During the year, Heavy Pacific region, the Group is well The Board of Directors is Maintenance completed a major positioned to sustain its growth recommending a final ordinary cabin reconfiguration of a B747- and seize emerging opportunities. dividend of 15 cents per share. 400 aircraft for a Middle Eastern Together with the interim dividend VVIP customer. CARING FOR of 7 cents per share paid at 2012/13 ANNUAL REPORT THE COMMUNITY mid-year, the total payout for In May 2012, Line Maintenance’s & THE ENVIRONMENT FY2012/2013 will be 22 cents dedicated Low-Cost Carrier (LCC) per share. unit handled the newly-minted Our care for the well-being of the budget carrier of the SIA Group, communities and the environment APPRECIATION Scoot. The unit offers customised we operate in saw the launch of new solutions at competitive prices for initiatives as part of the Company’s I extend our heartfelt appreciation the growing number of LCCs at commitment to Corporate Social to shareholders for their confidence the Singapore hub. Responsibility (CSR). The CSR and trust in the Group, and to our SIA ENGINEERING COMPANY theme for 2012, “Enabling People, valued customers and business Our fleet management portfolio Improving Lives”, provided food partners for their unwavering renewed a 5-year contract worth and housing assistance to the support. Needless to say, your $166 million with Cebu Pacific in underprivileged. Up to 1,400 staff support is invaluable. July 2012, to support its present and participated in an annual charity incoming fleet of A320s. Overseeing run and monthly distribution of Special thanks go to our staff and a fleet of 145 aircraft, we remain food. We have also adopted two unions for working hand-in-hand one of the world’s largest providers primary schools to provide essential with management to enhance of fleet management services. food supplies on a monthly basis productivity and improve cost to needy families of the students. structure. Since the Company’s listing on A trip to Tien Giang in Vietnam the Singapore Exchange in 2000, to build houses for the poor drew To my fellow Directors, my deepest we have doubled the number of overwhelming response, with each thanks for your steadfast stewardship. companies within the Group and staff participant subsidising a part It gives me great pleasure to welcome increased the profit contribution of his or her travel costs. Clearly, three independent non-executive of joint venture and associated the esprit de corps of our workforce directors appointed during the year companies from $4.1 million in extends beyond the workplace. – Mr Lee Kim Shin, Mr Manohar FY2000/2001 to $159.2 million Khiatani and Mr Chew Teck Soon. today. These joint ventures give We marked our commitment to the In adherence to the best practices valuable access to the markets of sustainability of the environment with in corporate governance, we will our partners and their proprietary the setting up of a dedicated paint continue to maintain a strong knowledge and processes. We will hangar equipped with the latest air independent element on the Board continue to seek more of such extraction system. Ongoing green and deliver value to the Company’s strategic collaborations to enhance initiatives under our Environment stakeholders. our value proposition to customers. Management System include the collection of rainwater from the hangar rooftops for general cleaning Stephen Lee Ching Yen and the watering of plants. Chairman BOARD OF DIRECTORS 04 ING OUR WINGS D SPREA STEPHEN LEE CHING YEN GOH CHOON PHONG RON FOO SIANG GUAN CHAIRMAN DIRECTOR CHAIRMAN, AUDIT COMMITTEE PAUL CHAN Kwai WAH OO SOON HEE LIM JOO BOON CHAIRMAN, Compensation CHAIRMAN, Nominating COMMITTEE DIRECTOR & HR COMMITTEE BOARD SAFETY & RISK COMMITTEE NG CHIN HWEE WILLIAM TAN SENG KOON ANDREW LIM MING-HUI DIRECTOR DIRECTOR / PRESIDENT & CEO DIRECTOR (UNTIL 19 JULY 2012) LEE KIM SHIN MANOHAR KHiatani CHEW TECK SOON DIRECTOR DIRECTOR DIRECTOR (FROM 1 AUGUST 2012) (FROM 1 APRIL 2013) (FROM 1 MAY 2013) KEY EXECUTIVES 05 ANNUAL REPORT 2012/13 ANNUAL REPORT WILLIAM TAN SENG KOON President & Chief Executive Officer SIA ENGINEERING COMPANY PNG KIM CHIANG ANNE ANG LIAN CHOO Executive Vice President Senior Vice President (Operations) (Finance) / Chief Financial Officer JACK KOH SWEE LIM ZARINA PIPERDI Senior Vice President Senior Vice President (Aircraft & Component Services) (Human Resources) IVAN NEO SEOK KOK CHOW KOK WAH LECK CHET LAM Senior Vice President Senior Vice President Senior Vice President (Partnership Management & (Line Maintenance & (Fleet Management & Marketing) Business Development) Information Technology) OPERATIONS REVIEW 06 LINE MAINTENANCE AIRCRAFT & COMPONENT SERVICES REVENUE ($M) REVENUE ($M) ING OUR WINGS D SPREA Number of checks performed 500 600 550.7 551.7 in the Singapore and Bahrain 421.4 facilities 400.8 500 400