CONFIGURED FOR GROWTH Report to Shareholders 2013 Vision Contents To be the provider of choice GROUP OVERVIEW FINANCIAL STATEMENTS for solutions to the offshore & 1 Key Figures for 2013 Directors’ Report & Financial Statements marine industries, sustainable 2 Group Financial Highlights 126 Directors’ Report 133 Statement by Directors environment and urban living. 4 Group at a Glance 6 Keppel Around the World 134 Independent Auditors’ Report 8 Chairman’s Statement 135 Balance Sheets 14 Interview with the CEO 136 Consolidated Profit & Loss Account 21 Board of Directors 137 Consolidated Statement of 26 Keppel Group Boards of Directors Comprehensive Income Mission 28 Keppel Technology Advisory Panel 138 Statement of Changes in Equity 30 Senior Management 141 Consolidated Statement We will develop and execute our 32 Investor Relations of Cash Flows businesses profitably, with safety 35 Awards & Accolades 144 Notes to the Financial Statements and innovation, guided by our 38 Configured for Growth 190 Significant Subsidiaries & three key business thrusts of – Growing Beyond 45 Associated Companies Sustaining Growth, Empowering OPERATING & FINANCIAL REVIEW OTHER INFORMATION Lives and Nurturing Communities. 49 Group Structure 201 Interested Person Transactions 50 Management Discussion & Analysis 202 Key Executives 52 Offshore & Marine 212 Major Properties 64 Infrastructure 217 Group Five-Year Performance 72 Property 221 Group Value-Added Statements 80 Investments 222 Share Performance 82 Financial Review & Outlook 223 Shareholding Statistics 224 Notice of Annual General Meeting GOVERNANCE & SUSTAINABILITY & Closure of Books 90 Sustainability Report Highlights 229 Corporate Information Sustaining Growth 230 Financial Calendar 92 Corporate Governance 231 Proxy Form 116 Risk Management 120 Environmental Performance 121 Product Excellence Empowering Lives 122 Labour Practices & Human Rights 123 Safety & Health Nurturing Communities 124 Our Community CONFIGURED FOR GROWTH Constantly shaping itself for the future, Keppel’s drive for sustainable growth finds expression in the tangram, a symbol of flexibility and potential. CONFIGURED FOR GROWTH Key Figures for 2013 Revenue Net Profi t $12.4b $1,412m* Decreased 11% from Decreased 26% from FY 2012’s $14.0 billion FY 2012’s $1,914 million Revenue decreased mainly due to Net profit before revaluation, major lower contribution from Reflections at impairment and divestments decreased Keppel Bay and as new Offshore & mainly due to the absence of one-off Marine jobs have not reached the stage contribution from sales of Reflections of revenue recognition. These were at Keppel Bay units in FY 2012 arising partially offset by better performance from units sold under the deferred of the Infrastructure Division. payment scheme, and fewer disposals of equity investments in FY 2013. These were partly offset by higher profits from China and gains from the divestment of Jakarta Garden City. Return On Equity Economic Value Added 14.9%* $939m* Decreased by 7.7 percentage points Decreased 32% from from FY 2012’s 22.6% FY 2012’s $1,375 million Return On Equity decreased mainly Lower Economic Value Added was due to the decline in net profit mainly due to lower net operating and higher equity. profit after tax and higher capital charge. Earnings Per Share Distribution Per Share 78.2cts* 49.5cts Decreased 27% from Decreased 33% from FY 2012’s 106.8 cents per share FY 2012’s 73.6 cents per share No significant dilution in Earnings Total distribution for 2013 will comprise Per Share as no major capital call a final proposed dividend of 30.0 cents was made since 1997. per share, an interim cash dividend of 10.0 cents per share, and a special dividend in specie of eight Keppel REIT units for every 100 shares held in the Company (equivalent to 9.5 cents per share). Net Asset Value Per Share Net Gearing Ratio $5.37 0.11x Increased 4% from Decreased from FY 2012’s $5.14 per share FY 2012’s net gearing of 0.23x * Figures exclude revaluation, major impairment and divestments. Key Figures for 2013 1 Group Financial Highlights Earnings Per Share (cents)** Return On Equity (%)** from from -27% FY 2012 -34% FY 2012 78.2 106.8 14.9 22.6 2013 2012 2013 2012 No significant dilution in Earnings Per Share as no major Return On Equity decreased mainly due to the decline in capital call was made since 1997. net profit and higher equity. Net Asset Value Per Share ($) Economic Value Added ($ million)** from from +4% FY 2012 -32% FY 2012 5.37 5.14 939 1,375 2013 2012 2013 2012 Increased 4% from FY 2012’s $5.14 per share. Lower Economic Value Added was mainly due to lower net operating profit after tax and higher capital charge. 2 Keppel Corpora†ion Limited Report to Shareholders 2013 CONFIGURED FOR GROWTH Group Quarterly Results ($ million) 2013 2012 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Revenue 2,759 3,076 2,947 3,598 12,380 4,266 3,481 3,219 2,999 13,965 EBITDA 425 481 572 538 2,016 996 660 469 482 2,607 Operating profi t** 371 422 507 474 1,774 946 610 415 425 2,396 Profi t before tax** 470 519 608 566 2,163 994 680 482 539 2,695 Attributable profi t** 331 346 403 332 1,412 751 521 337 305 1,914 Earnings per share (cents)** 18.4 19.1 22.3 18.4 78.2 41.9 29.1 18.8 17.0 106.8 2013 2012 % Change For the year ($ million) Revenue 12,380 13,965 -11% Profi t (before revaluation, major impairment and divestments) EBITDA 2,016 2,607 -23% Operating 1,774 2,396 -26% Before tax 2,163 2,695 -20% Net profi t 1,412 1,914 -26% Attributable profi t after revaluation, major impairment and divestments 1,846 2,237 -17% Operating cash fl ow 625 1,006 -38% Free cash fl ow* 642 625 +3% Economic Value Added (EVA) Before revaluation, major impairment and divestments 939 1,375 -32% After revaluation, major impairment and divestments 1,142 1,430 -20% Per share Earnings (cents) Before tax & revaluation, major impairment and divestments 96.3 130.4 -26% After tax & before revaluation, major impairment and divestments 78.2 106.8 -27% After tax & revaluation, major impairment and divestments 102.3 124.8 -18% Net assets ($) 5.37 5.14 +4% Net tangible assets ($) 5.32 5.08 +5% At year-end ($ million) Shareholders’ funds 9,701 9,246 +5% Non-controlling interests 3,988 4,332 -8% Capital employed 13,689 13,578 +1% Net debt 1,535 3,153 -51% Net gearing ratio (times) 0.11 0.23 -52% Return on shareholders’ funds (%) Profi t before tax & revaluation, major impairment and divestments 18.4 27.6 -33% Net profi t before revaluation, major impairment and divestments 14.9 22.6 -34% Shareholders’ value Distribution (cents per share) Interim dividend 10.0 18.0 -44% Final dividend 30.0 27.0 +11% Special dividend in specie 9.5 28.6 -67% Total distribution 49.5 73.6 -33% Share price ($) 11.19 11.00 +2% Total Shareholder Return (%) 9.0 22.9 -61% * Free cash fl ow excludes expansionary acquisitions and capex, and major divestments. ** Figures exclude revaluation, major impairment and divestments. Group Financial Highlights 3 CONFIGURED FOR GROWTH Group at a Glance OFFSHORE & MARINE FOCUS FOR 2014/2015 • Sharpen execution and grow Revenue ($ million) Net Profi t* ($ million) technology expertise to amplify KEPPEL CORPORATION value proposition. 2013 7,126 930 • Boost productivity through innovation. • Harness synergy of global yards and 2012 7,963 937 leverage Near Market, Near Customer 2011 5,706 1,064 STRATEGIC DIRECTIONS strategy to seize opportunities in new markets and adjacent businesses. 2010 5,577 987 • Stay focused on multi-business model • Maintain emphasis on talent 2009 8,273 810 and core competencies, while seeking management and Health, opportunities in close adjacencies. Safety and the Environment. • Sharpen execution through constant improvements to optimise productivity and efficiencies. INFRASTRUCTURE FOCUS FOR 2014/2015 • Invest continuously in Research & • Optimise operational efficiency Revenue ($ million) Net (Loss)/Profi t* ($ million) Development and innovation of existing assets. • Complete Engineering, to provide customers with the best 2013 3,459 (14) value proposition. Procurement and Construction projects in Qatar and the UK. 2012 2,832 (1) • Grow expertise in Waste-to-Energy • Bolster bench strength through talent 2011 2,863 82 technology package development. management and succession planning. • Focus on meeting demand for 2010 2,510 57 quality integrated logistics services • Maintain strong financial discipline and data centre space. 2009 2,427 126 and deploy capital astutely to seize opportunities for the best risk-adjusted returns. PROPERTY FOCUS FOR 2014/2015 • Focus on Singapore, China, Revenue ($ million) Net Profi t* ($ million) Indonesia and Vietnam. • Expand commercial portfolio 2013 1,768 442 overseas. Revenue ($ million) • Scale up in high-growth cities 2012 3,018 784 and invest opportunistically in 2011 1,467 300 growth markets. 2013 12,380 • Recycle capital actively for 2010 1,042 214 2012 13,965 higher returns. • Grow fee income from fund 2009 1,251 135 2011 10,082 management. 2010 9,140 2009 11,990 Net Profi t* ($ million) FOCUS FOR 2014/2015 INVESTMENTS • k1 Ventures will manage its Revenue ($ million) Net Profi t* ($ million) investment portfolio to maximise 2013 1,412 shareholder value, and distribute 2013 27 54 2012 1,914 excess cash as investments are monetised. 2012 152 194 2011 1,491 • KrisEnergy will seek acquisitions 2011 46 45 2010 1,307 in countries and basins where it has extensive knowledge and 2010 11 49 2009 1,190 experience. • M1 will strengthen its position by 2009 39 119 * Net profi t excludes revaluation, major impairment and divestments.