Value Talent Readiness Enterprise Execution Discipline Innovation Integrity Safety Execution ReadinessLeadership People-Centredness Safety Talent Accountability InnovationValue Focus Execution Safety Can DoIntegrity Innovation Enterprise Collective Strength Governance Value Talent Agility Accountabilty Can Do Execution People-Centredness Discipline InnovationValue Capital Collective Strength Readiness Can Do Execution Enterprise Value Readiness People-Centredness Safety Integrity Innovation Execution Talent Value Talent Customer Focus Acumen Value Talent Innovation Accountability Focus ScalabilityAgilitySafety Accountability Discipline Focus People-Centredness Collective Discipline Strength Execution Execution Enterprise Agility Talent Readiness FocusCollective StrengthSynergy Value Talent Innovation Customer Focus Readiness Discipline Accountability People-Centredness Collective Strength Harnessing Strengths Report to Shareholders 2015 Vision Operating Principles A global company at the forefront 1 Best value propositions of our chosen industries, shaping to customers. the future for the benefit of all 2 Tapping and developing our stakeholders – Sustaining best talents from our Growth, Empowering Lives and global workforce. Nurturing Communities. 3 Cultivating a spirit of innovation and enterprise. 4 Executing our projects well. Mission 5 Being financially disciplined to Guided by our operating principles earn best risk-adjusted returns. and core values, we will execute Harnessing 6 Clarity of focus and operating our businesses in Offshore & within our core competence. Marine, Property, Infrastructure 7 Being prepared for the future. and Investments profitably, Strengths safely and responsibly. The Keppel Group Group Overview Financial Statements 01 Key Figures for 2015 Directors’ Statement harnesses and synergises 02 Group Financial Highlights & Financial Statements the distinctive strengths 04 Group at a Glance 130 Directors’ Statement 06 Keppel Around the World 136 Independent Auditors’ Report of its multi businesses to 08 Chairman’s Statement 137 Balance Sheets 14 Harnessing Strengths 138 Consolidated Profit & Loss Account capture opportunities arising 18 Interview with the CEO 139 Consolidated Statement of from the global demand 27 Board of Directors Comprehensive Income 32 Keppel Group Boards of Directors 140 Statement of Changes in Equity for energy, sustainable 34 Keppel Technology Advisory Panel 143 Consolidated Statement of urbanisation and connectivity. 36 Senior Management Cash Flows 38 Investor Relations 146 Notes to the Financial Statements Our strong culture and 41 Awards & Accolades 198 Significant Subsidiaries & Associated Companies enduring values drive our Operating & Financial Review people to strive for execution 43 Group Structure Other Information 44 Management Discussion 209 Interested Person Transactions excellence and operational & Analysis 210 Key Executives efficiency. With financial 46 Offshore & Marine 219 Major Properties 58 Property 225 Group Five-Year Performance discipline and sharp focus 66 Infrastructure 229 Group Value-Added Statements 74 Investments 230 Share Performance on optimising returns, 78 Financial Review & Outlook 231 Shareholding Statistics we will seize opportunities 232 Notice of Annual General Meeting Governance & Sustainability & Closure of Books as well as innovate solutions 86 Sustainability Report Highlights 237 Corporate Information and services to build a Sustaining Growth 238 Financial Calendar 88 Corporate Governance 239 Proxy Form long-term and competitive 120 Risk Management position and capture 124 Environmental Performance 125 Product Excellence sustainable returns for Empowering Lives 126 Labour Practices & Human Rights our stakeholders. 127 Safety & Health Nurturing Communities 128 Our Community Group Overview / Operating & Financial Review / Governance & Sustainability / Financial Statements / Other Information 01 Key Figures for 2015 Key Figures for 2015 Revenue Net Profit $10.3b $1,525m Decreased 22% from FY 2014’s $13.3 billion. Decreased 19% from FY 2014’s $1,885 million. Revenue decreased due mainly to lower volume of work Net profit decreased due mainly to the Offshore & Marine in the Offshore & Marine Division and lower revenue from and Infrastructure divisions, partially offset by higher the Infrastructure Division. This was partially offset by the contribution from the Property Division arising Property Division’s higher revenue from China. from lower non-controlling interest following the privatisation of Keppel Land Limited. Return On Equity Economic Value Added 14.2% $648m Decreased by 4.6 percentage points from Decreased $1,130 million from FY 2014’s FY 2014’s 18.8%. $1,778 million. Return on Equity decreased due mainly to the Economic Value Added was lower due mainly decline in net profit and higher equity. to lower net operating profit after tax. Earnings Per Share Cash Dividend Per Share $0.84 34.0cts Decreased 19% from FY 2014’s $1.04 per share. Decreased 29% from FY 2014’s cash dividend of There was no significant dilution in Earnings Per Share 48.0 cents per share. because no major capital call has been made since 1997. Total distribution for 2015 will comprise a final proposed cash dividend of 22.0 cents per share and an interim cash dividend of 12.0 cents per share. Net Asset Value Per Share Net Gearing Ratio $6.13 0.53x Increased 7% from FY 2014’s $5.73 per share. Increased from FY 2014’s net gearing of 0.11x. 02 Keppel Corporation Limited Report to Shareholders 2015 Group Financial Highlights Earnings Per Share ($) Return On Equity (%) FY 2014 FY 2015 FY 2014 FY 2015 1.04 0.84 18.8 14.2 Net Asset Value Per Share ($) Economic Value Added ($ million) FY 2014 FY 2015 FY 2014 FY 2015 5.73 6.13 1,778 648 Group Overview / Operating & Financial Review / Governance & Sustainability / Financial Statements / Other Information 03 Group Financial Highlights Group Quarterly Results ($ million) 2015 2014 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Revenue 2,814 2,563 2,440 2,479 10,296 2,996 3,177 3,185 3,925 13,283 EBITDA 464 479 425 366 1,734 478 533 632 996 2,639 Operating profit 398 414 371 331 1,514 415 467 565 926 2,373 Profit before tax 455 498 470 574 1,997 492 593 642 1,162 2,889 Attributable profit 360 397 363 405 1,525 339 406 414 726 1,885 Earnings per share (cents) 19.8 21.9 20.0 22.3 84.0 18.7 22.3 22.9 39.9 103.8 2015 2014 % Change For the year ($ million) Revenue 10,296 13,283 -22% Profit EBITDA 1,734 2,639 -34% Operating 1,514 2,373 -36% Before tax 1,997 2,889 -31% Net profit 1,525 1,885 -19% Operating cash flow (705) 5 n.m. Free cash flow* (694) 729 n.m. Economic Value Added 648 1,778 -64% Per share Earnings ($) 0.84 1.04 -19% Net assets ($) 6.13 5.73 +7% Net tangible assets ($) 6.07 5.67 +7% At year-end ($ million) Shareholders’ funds 11,096 10,381 +7% Non-controlling interests 830 4,347 -81% Capital employed 11,926 14,728 -19% Net debt 6,366 1,647 +287% Net gearing ratio (times) 0.53 0.11 n.m. Return on shareholders’ funds (%) Profit before tax 17.7 22.4 -21% Net profit 14.2 18.8 -24% Shareholders’ value Distribution (cents per share) Interim dividend 12.0 12.0 – Final dividend 22.0 36.0 -39% Total distribution 34.0 48.0 -29% Share price ($) 6.51 8.85 -26% Total Shareholder Return (%) (22.3) (17.8) n.m. n.m. = not meaningful * Free cash flow excludes expansionary acquisitions and capex, and major divestments. Group Overview / Operating & Financial Review / Governance & Sustainability / Financial Statements / Other Information 04 Keppel Corporation Limited Report to Shareholders 2015 05 Group at a Glance Group at a Glance Offshore & Marine Property Infrastructure Investments Keppel Corporation Revenue ($ million) Revenue ($ million) Revenue ($ million) Revenue ($ million) Revenue ($ million) $6,241m $1,926m $2,058m $71m $10,296m 8,556 3,018 3,459 152 % 13,965 13,283 7,963 1 12,380 7,126 2,863 2,832 2,934 % 19 10,296 6,241 10,082 5,706 1,926 2,058 1,768 1,729 1,467 71 27 64 Revenue % 46 20% by Segment 60 2013 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2014 2015 2013 2015 2011 2012 2014 2011 2012 2013 2014 2015 Net Profit ($ million) Net Profit ($ million) Net Profit ($ million) Net Profit ($ million) Net Profit ($ million) $481m $701m $207m $136m $1,525m 2,237 1,040 1,078 320 194 1,019 % 1,946 949 945 918 9 1,846 1,885 832 136 1,525 701 207 31% 481 482 Net Profit 54 by Segment -8 16 15 17 43 14% 2011 % 2011 2012 2013 2014 2015 2011 2012 2013 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2015 2012 2013 2015 2014 2014 46 Focus For 2016/2017 Focus For 2016/2017 Focus For 2016/2017 Focus For 2016/2017 Focus For 2016/2017 1 Execute existing 1 Invest strategically and 1 Continue seeking out 1 Keppel Capital will focus 1 Stay focused on the multi-business 4 Bolster bench strength backlog of orders on opportunistically in developed value-enhancing projects, on integrating and growing model, harnessing the Group’s through talent management time and on budget. and emerging markets, in new leveraging the Division’s the Group’s asset core strengths to achieve its and succession planning. and existing platforms, project development, management platform. financial, people, stakeholder 2 Continue to rightsize projects and properties. engineering, operations and and process goals. 5 Enhance collaboration operations in tandem with maintenance expertise. 2 k1 Ventures will focus on across business verticals to workload requirements. 2 Tap demand in China and managing existing investments 2 Sharpen execution through create synergy. Vietnam with over 14,000 2 Improve operational to drive shareholder value and constant improvements in safety, 3 Invest prudently in launch-ready homes over efficiencies by harnessing the distribute excess cash when productivity and efficiency. 6 Maintain strong financial R&D, productivity and the next few years.