Keppel Corp Ltd Annual Report 2008

FY2008 Annual Report · Keppel Corp Ltd
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Report to Shareholders 2008

Driving
  a Difference 

146  Directors’ Report & Financial Statements
146  –  Directors’ Report
150  –  Balance Sheets 
151  –  Consolidated Proﬁ t and Loss Account
152  –  Statements of Changes in Equity
155  –  Consolidated Cash Flow Statement 
157  –  Notes to the Financial Statements
200  –  Signiﬁ cant Subsidiaries and 
  Associated Companies
210  –  Statement by Directors
211  – 
212 
213  Directors and Key Executives
222  Major Properties
225  Group Five-Year Performance
228  Group Value-Added Statements
229  Share Performance
230  Shareholding Statistics
231  Notice of Annual General Meeting and 

Interested Person Transactions

Independent Auditors’ Report

Closure of Books

237  Financial Calendar
238  Corporate Information

Group Financial Highlights
Chairman’s Statement
Interview with CEO
Key Messages: Driving a Difference 
Key Figures 

Keppel Around the World 
Board of Directors
Keppel Group Boards of Directors 
Keppel Technology Advisory Panel 
Senior Management  
Investor Relations
Awards and Accolades 
Special Feature – Safety Excellence 

Contents
1 
2 
6 
10 
20 
21  Group Strategic Directions 
22  Group at a Glance 
24 
26 
30 
32 
34 
36 
38 
40 
48  Operating & Financial Review 
49 
50 
52 
64 
72 
80 
86 
94 
96 
97 
97 
117 
119 
122 
126  –  Empowering Lives
126 
131 
132  –  Nuturing Communities
132 
136 
144  –  Highlights in 2008

–  Corporate Governance
–  Risk Management
–  Technology Development
–  Environment Protection

–  Group Structure 
–  Management Discussion and Analysis 
–  Offshore & Marine 
–  Property 
– 
– 
–  Financial Review and Outlook
Sustainability Report
–  Sustainable Development Framework
–  Sustaining Growth

–  Society and Environment
–  Community Involvement

–  People Development
–  Health and Safety

Infrastructure 
Investments 

Driving
  a Difference 

Keppel is 40 and ﬁ ghting ﬁ t, chiselled through the many recessions 
and business cycles and fortiﬁ ed by the resilience of our people. 
This economic downturn will again test our core strengths, but we are 
resolute as before, to emerge stronger and more competitive. As a Group, 
we are Driving a Difference by aggressively tapping on our collective 
competence and business platforms to achieve our goals and sustain 
earnings growth for greater shareholder value.

 
 
 
 
 
 
 
 
 
 
Group Financial Highlights

Earnings Per Share 69 cents

+6%

Return on Equity 22.4%

+3%

Economic Value Added (EVA) $692m

+15%

2008

2007

%
Change

11,805  10,431 

For the year ($ million)
Revenue
Proﬁ t
1,377 
   EBITDA
1,238 
   Operating
1,597 
   Before tax & exceptional items
   Attributable before exceptional items 1,097 
1,098 
   Attributable after exceptional items
2,047 
Operating cash ﬂ ow
1,876 
Free cash ﬂ ow
692 
Economic Value Added (EVA)

1,176 
1,051 
1,556 
1,026 
1,131 
1,697 
1,151 
604 

Per share 
Earnings (cents)
   Before tax & exceptional items
   Attributable before exceptional items
   Attributable after exceptional items
Net assets ($)
Net tangible assets ($)

At year-end ($ million)
Shareholders’ funds
Minority interests
Capital employed
Net cash / (borrowings)
Net cash / (gearing) (times)

84.2 
69.0 
69.0 
2.89 
2.84 

81.4 
64.9 
71.5 
3.28 
3.24 

4,596
2,153 
6,749 
275 
0.04 

5,205
1,830 
7,035 
(634)
(0.09)

Return on shareholders’ funds (%)
Proﬁ t before tax & exceptional items
Attributable proﬁ t before
   exceptional items

27.3 

27.4 

22.4 

21.8 

+13

+17
+18
+3
+7
-3
+21
+63
+15

+3
+6
-3
-12
-12

-12
+18
-4
N.M.
N.M.

–

+3

Shareholders’ value 
Distribution (cents per share)
   Interim dividend
   Final dividend
   Special dividend
   Total distribution
Share price ($)

14.0 
21.0 
–
35.0 
4.33 

9.0 
10.0 
45.0 
64.0 
13.00 

+56
+110
N.M.
-45
-67

2008

2007

1Q

2Q

3Q

4Q

Total

1Q

2Q

3Q

4Q

Total

Group quarterly results  ($ million)
Revenue
EBITDA
Operating proﬁ t
Proﬁ t before tax & exceptional items
Attributable proﬁ t before exceptional items
Earnings Per Share (cents) 

2,211  2,643  3,217  3,734  11,805  2,028  2,454  2,591  3,358  10,431 
1,176 
1,051 
1,556 
1,026 
64.9

428  1,377 
390  1,238 
397  1,597 
263  1,097 
69.0 
16.6 

294 
261 
434 
299 
18.8 

360 
325 
400 
273 
17.1 

295 
262 
366 
262 
16.5 

302 
268 
421 
268 
17.0 

322 
289 
394 
248 
15.6 

284 
252 
381 
258 
16.4 

268 
242 
360 
252 
15.9 

Group Financial Highlights

1

Chairman’s Statement

“...prudent 
ﬁ nancial 
management 
has further 
strengthened our 
balance sheet, 
positioning our 
businesses to 
ride the downturn 
and capitalise on 
opportunities as 
they arise.”

Dear Shareholders,
The second half of 2008 saw macro-
economic conditions deteriorate 
rapidly as the global ﬁ nancial crisis 
deepened. This adversely affected 
businesses across broad industry 
sectors as aggregate demand shrank 
and capital became difﬁ cult to access 
and expensive. Notwithstanding this, 
the Keppel Group has weathered the 
difﬁ cult operating conditions to turn 
in a creditable performance for 2008.

Achieving Sterling Results
Full year proﬁ t after tax and minority 
interests (PATMI) improved 7% over 
2007 to notch a record $1.1 billion, 
cresting the $1 billion mark for the 
second consecutive year. Earnings 
Per Share rose 6% to 69 cents. 
Group revenue increased 13% year-
on-year to just under $12 billion.

Key performance measures were 
higher – Return on Equity remained 
well above 20% and Economic Value 
Added grew another $88 million 

to reach a record $692 million. 
More importantly, prudent ﬁ nancial 
management has further strengthened 
our balance sheet, positioning our 
businesses to ride the downturn 
and capitalise on opportunities as 
they arise. Free cash ﬂ ow increased 
63% from a year ago to $1.9 billion, 
improving net gearing from 0.09x 
to net cash of 0.04x.

Our portfolio of businesses has had 
a mixed year. The Offshore & Marine 
Division was again the major contributor 
to PATMI with $705 million or 64%, up 
from $522 million last year. Contribution 
from Property and Investments 
declined on the back of the property 
market slowdown and volatility in the 
oil and gas sector. The Infrastructure 
Division continued its steady build-up, 
more than doubling PATMI earnings 
from $27 million to $63 million.

To reward Keppel shareholders, the 
Board has recommended a full year 
total ordinary dividend of 35 cents 

2

Keppel Corporation Limited 
Report to Shareholders 2008

$1.9b 
+63%

Free cash ﬂ ow increased 63% 
from a year ago to $1.9 billion, 
improving net gearing from 0.09x 
to net cash of 0.04x.

PATMI ($ million)

2008

2007

1,097

  1,026

per share (including 14 cents interim 
dividend), which is almost twice the 
2007 ordinary dividend of 19 cents 
per share. Last year, an additional 
45 cents per share was paid as a 
special dividend in celebration of our 
40th anniversary.

Building Resilient Businesses
The operating environment last 
year was exceptionally challenging, 
particularly in the second half of 
2008 as the credit crunch worsened 
and deleveraging escalated. Major 
economies in the United States 
(US), Eurozone and Japan sank 
into recession, even as the regional 
economies slowed rapidly. The 
US ended 2008 with its largest job 
loss since World War II while China 
registered a mere 6.8% growth in the 
last quarter.  

On the home front, Singapore’s export-
oriented economy was the ﬁ rst in Asia 
to slip into recession. GDP in 2009 is 
projected to contract by 2% – 5%.  

The results achieved by Keppel against 
this grim backdrop underscore the 
strength of our multi-business growth 
strategy, pursued steadfastly through 
several business cycles. Over the last 
40 years since inception amidst a succession 
of economic feasts and famines, 
Keppel’s drive to constantly rationalise 
and grow its businesses has buttressed 
the Group’s overall prospects. 

During the year, even as conﬁ dence 
and business activities declined, the 
Keppel Group maintained focus on 
execution across its multi-business 
platforms, leveraging its comprehensive 
skillsets and networks to further 
strengthen its competitive position.  

We shall continue to strengthen our 
portfolio of complementary businesses 
that we believe will serve us well amidst the 
current potentially protracted downturn. 

Offshore & Marine
Keppel Offshore & Marine (Keppel 
O&M) steadily executed its robust 
orderbook, leveraging its global 
network of 20 yards to deliver 
49 projects across its rigbuilding, 
conversion and specialised shipbuilding 
arms, up from 41 projects a year 
earlier. All deliveries were on time, 
afﬁ rming Keppel O&M’s credentials as 
a premier yard with a strong execution 
track record. Keppel FELS was lauded 
as the ﬁ rst local enterprise to clinch the 
MAXA Award bestowed on outstanding 
ﬁ rms achieving innovative, world-class 
manufacturing standards. 

Yard schedule is tighter this year as 
the business units work on fulﬁ lling 
the Division’s $10.8 billion orderbook 
well into 2012. A prudent amount 
totalling more than $270 million has 
been expended during the year to 
accommodate existing orders and 
prepare for the future. Keppel O&M’s 
“Near Market, Near Customer” global 
network strategy, coupled with its 
proprietary design and engineering 
capabilities, have further improved 
our operational efﬁ ciency and project 
management. 

The credit crunch has placed ﬁ nancing 
constraints on rig owners and oil 
service companies. As a result, 
Keppel O&M saw the cancellation 
of two orders amounting to around 
$650 million and the re-scheduling of 
payment terms with one customer. As 
Keppel O&M had received substantial 
payments for most of its projects 
by end-2008, there was no material 
impact on the Group. Furthermore, 
its diversiﬁ ed client base comprises 
established international drilling service 
companies and national oil companies 
which have longer horizons on their 
ﬂ eet programmes and exploration and 
production (E&P) activities.

During the year, Keppel O&M 
secured $5.2 billion in new contracts, 
including a substantial $0.7 billion 
during a difﬁ cult last quarter. The 
spread of semisubmersibles (semis), 
jackups, conversions and a variety 
of specialised shipbuilding projects, 
reﬂ ect our broad competencies. 
Repeat orders demonstrate customers’ 
trust in our execution reliability, such as 
ENSCO’s three additional deepwater 
semis; Seadrill’s seventh semi drilling 
tender; another semi rig for Brazilian 
driller Queiroz Galvão Óleo e Gás 
and Golar’s second Floating Storage 
Regasiﬁ cation Unit conversion.  

Offshore fundamentals remain sound. 
With no viable large-scale alternative 
to hydrocarbons, sustained E&P 
investment is required to avert a supply 
crunch. Major oil and gas producers 
have announced hefty E&P budgets 
for 2009 for ongoing activities to 
bolster depleting reserves and 
declining production.  

Oil and Gas
The global downturn led to a steep 
drop in crude and reﬁ ned product 
demand in 2008. Oil prices were 
extremely volatile, swinging from 
the peak at US$147/bbl to below 
US$40/bbl. Singapore Petroleum 
Company’s (SPC) reﬁ ning margins 
fell from US$10/bbl in ﬁ rst half 2008 
to US$1/bbl in the second half, 

Chairman’s Statement

3

Chairman’s Statement

averaging US$5.50/bbl over the year. 
Still, SPC achieved a creditable PATMI 
of $230 million, although down 55% 
from 2007.

SPC has made progress in 
transforming itself into a regional 
integrated energy player, scaling up 
its upstream E&P footprint and building 
operatorship expertise. Its growing 
upstream portfolio will stabilise its 
earnings proﬁ le to counterbalance 
the volatile downstream sector. 
SPC’s results attest to this – upstream 
operating proﬁ t has risen ten-fold 
in just two years from $14.6 million 
in 2006 to $156 million in 2008, 
contributing 40% to 2008 after-
tax proﬁ ts.

In the past two years, SPC has planted 
new E&P beachheads in China, 
Australia and onshore Indonesia. Four 
of its portfolio of 10 E&P assets across 
Indonesia, China, Vietnam, Cambodia 
and Australia are currently producing.  

Meanwhile, SPC is acquiring upstream 
expertise through operatorship roles 
in the Pearl River Mouth Basin acreage 
in China and onshore Mahakam Hilir 
block in Indonesia.       

Property
Our Property business witnessed 
slower home sales in 2008, resulting 
in a 23% decline in pre-tax proﬁ t to 
$365 million compared to 2007. 

In Singapore, Reﬂ ections at Keppel 
Bay, Park Inﬁ nia and The Tresor 
capitalised on their premium status 
to secure further take-up of more 
than 50 luxury units in 2008. Greater 
value has been built into Keppel Bay’s 
positioning as a world-class waterfront 
lifestyle precinct with the launch of 
the exclusive Marina at Keppel Bay, 
luxury yacht chartering services as 
well as an internationally-accredited 
sailing academy. This illustrates 
Keppel’s continual drive to enhance 
its value propositions through 
innovation and strategic differentiation. 

Overseas, residential sales netted 
another 1,300 units. During the year, 
another Shenyang site was added 
to our township portfolio and a 
waterfront site in Guangdong’s afﬂ uent 
Zhongshan which is earmarked for 
lifestyle development. Our regional 
pipeline of some 60,000 homes 
will allow us to capture market 
opportunities and monetise assets 
at the appropriate time.  

The 30-sq km Tianjin Eco-City was 
launched in September last year. 
The milestone project is spearheaded 
by the Chinese and Singapore 
governments, with Keppel leading 
the private sector on Singapore’s side. 
The Tianjin Eco-City will showcase 
a replicable and scalable model of 
sustainable development balancing 
socio-economic and environmental 
concerns. The project will harness 
Keppel’s strengths in large-scale 
integrated property development and 
environmental technology capabilities. 
The initial 4-sq km start-up phase 
is progressing well and should 
complete in three to ﬁ ve years. The 
ﬁ rst partnership Memorandum of 
Understanding has just been signed 
for a US$1 billion solar polysilicon 
production plant in the Tianjin Eco-City.

Our stable of prime ofﬁ ce assets 
clustered in Singapore’s ﬁ nancial 
enclave has held up well. Marina Bay 
Financial Centre attracted more than 
60% pre-commitment ahead of its 
2010 and 2012 phased completion, 
mostly longer-term six to 12-year 
leases. Ocean Financial Centre raised 
the bar for commercial developments 
as the ﬁ rst in Singapore’s Central 
Business District to achieve the 
Green Mark Platinum Award by the 
Building and Construction Authority of 
Singapore for its latest state-of-the-art 
green features.  

K-REIT Asia’s portfolio occupancy 
remains just under 100% while average 
rental of over $7 psf is still signiﬁ cantly 
below 4Q 2008 average prime rental 
of $12.90 psf, providing positive rental 

reversion potential. Another growth 
pillar, our fund management arm, is 
steadily generating recurring fee-based 
income. Assets under management 
grew 60% to $9.8 billion (when 
leveraged and invested), including 
K-REIT Asia’s $2.1 billion portfolio, 
yielding $21 million proﬁ t contribution, 
up from $14 million in 2007. 

Keppel Land’s strategy to carve out 
niche markets in large-scale townships 
and integrated lifestyle communities 
will tap the urbanisation trends and 
favourable demographics of regional 
emerging markets such as China, 
Vietnam, India and the Middle East.  

Long-term demand for quality homes 
remains underpinned by strong 
fundamentals such as a growing 
middle class and greater afﬂ uence. 
The recent setback in demand is 
expected to be mitigated by a slew 
of ﬁ scal and monetary measures by 
governments to support domestic 
property and infrastructure sectors 
and stabilise asset markets.

Infrastructure
Rising environmental awareness and 
imminent water and energy challenges 
faced by global communities continue 
to drive growth in our energy and 
environmental engineering businesses.   

Keppel Energy’s clean gas-ﬁ red 
500 MW co-generation plant made 
its ﬁ rst full-year contribution since 
debuting in 2007. Adjacencies tapped 
included a $3 billion long-term gas 
supply contract for ExxonMobil’s 
petrochemical facilities.  

In environmental engineering, our 
forte in water and thermal treatment 
technologies has propelled us to the 
forefront of the global environmental 
market with our innovative yet cost-
effective large-scale integrated 
solutions for water treatment and 
waste management.  

Landmark projects such as the 
Qatar domestic solid waste 

4

Keppel Corporation Limited 
Report to Shareholders 2008

management facility and Doha North 
water reuse plant are progressing on 
track, with the Doha North water reuse 
plant due to begin revenue contribution 
from ﬁ rst half 2009.   

Singapore’s Tuas Waste-to-Energy 
Plant is expected to come online 
in the second quarter, while our 
148,000 m3/day Ulu Pandan NEWater 
Plant is already operational. New 
contracts were sealed in Sweden, 
Guadeloupe and Honduras. Keppel 
Integrated Engineering (KIE) is also 
targeting potential opportunities in 
the Tianjin Eco-City project through 
environmental infrastructure, energy 
and utilities related joint ventures.

KIE’s burgeoning orderbook, 
including a substantial operations and 
maintenance slate, will yield a steady 
recurring earnings baseload over the 
next 10 to 20 years. Meanwhile, a new 
platform is under consideration – a 
proposed green trust with the Senoko 
Incineration Plant as initial seed asset 
which aims to deliver sustainable 
returns with secure revenue ﬂ ow. 

Driving Earnings Growth 
Looking ahead, our multi-business 
growth strategy remains intact. 
We shall continue to enhance 
the performance of the Group’s 
businesses, prudently manage 
resources, harness synergies, build 
our human capital and sharpen 
our competitive edge to seize new 
opportunities and deliver greater value.  

will prepare the company to build 
homes of the future. 

Keppel’s multi-business model is well-
suited for extracting synergies and 
drawing on complementary strengths 
to develop new business platforms 
and exploit opportunities. For example, 
in sustainable development projects 
like the Tianjin Eco-City, our property 
and environmental infrastructure 
capabilities, domain knowledge and 
track record offer a unique framework 
to address complex large-scale 
urban requirements and deliver 
comprehensive solutions.

Prudent capital allocation and 
disciplined ﬁ nancial management 
together with sound operating policies 
are Keppel’s hallmarks, whether in 
good times or bad. An example is 
K-REIT Asia which bolstered its 
capital base with a rights issue and 
a $1 billion multicurrency medium-
term note programme. The Group’s 
businesses are carefully monitoring 
the operating environment, reviewing 
investment and capital expenditure 
requirements while proactively 
managing credit and cash ﬂ ow.  

The Group will continue to deepen 
its relationship with regional markets 
and customers, as well as enhance 
its operating track record and 
invaluable brand equity. We will also 
be looking out for good assets and 
business opportunities to position us 
for future growth. 

out the turbulence. Together, we 
shall stay the course and press on 
to overcome the myriad challenges 
as we strive to build resilient and 
enduring businesses.  

As part of the Group’s succession plan, 
I am pleased to hand the baton over to 
Mr Choo Chiau Beng as the new Chief 
Executive Ofﬁ cer, to lead the Group 
into the next lap. Chiau Beng, a true 
blue Keppelite, has been a director of 
Keppel Corporation since 1983. In his 
35 years with Keppel, Chiau Beng has 
experienced the ups and downs of 
the business, and on each occasion, 
has helped Keppel emerge stronger 
and more successful. He has led our 
Offshore & Marine Division to become 
the global leader in offshore drilling rigs 
and Floating Production Storage and 
Ofﬂ oading (FPSO) conversions. Under 
his able leadership, I am conﬁ dent the 
Group will scale new heights and achieve 
great success in the years ahead.

I thank our Board, management, 
employees, partners, customers, and 
all stakeholders for their guidance 
and support over the years. We shall 
endeavour to enhance stakeholder 
value even as we face a deeply 
uncertain economic environment. 

Yours sincerely,

Technology and innovation are our key 
value propositions, enabling us to offer 
cost-effective, leading-edge solutions 
and create value for customers. Keppel 
O&M Technology Centre and Keppel 
Environmental Technology Centre will 
lead the Group’s drive in technology 
innovation and leadership thrust.   

Acknowledgements
The way ahead will be difﬁ cult and 
uncharted. The Board will keep a keen 
eye on the impact of the global crisis 
on our businesses and work with 
management to ensure the Group is 
well-equipped to weather the enveloping 
ﬁ nancial and economic storm. 

Lim Chee Onn

Chairman

2 March 2009

Keppel Land’s success in integrating 
state-of-the-art environmental 
technologies in its prime ofﬁ ce and 
residential portfolio to signiﬁ cantly 
reduce energy and water consumption, 

I am confident that sound corporate 
governance combined with the 
constancy of purpose, drive and 
commitment of Keppelites worldwide 
will keep us firmly anchored to ride 

Chairman’s Statement

5

Interview with CEO

“My top priority is to 
make Keppel ﬁ ghting ﬁ t 
by becoming leaner and 
stronger…”

Mr Choo Chiau Beng 
Chief Executive Ofﬁ cer of Keppel Corporation

Q: How has Keppel been impacted 
by this global economic downturn?

A: This downturn is unprecedented in 
both scale and magnitude. No business 
can expect to escape unscathed. The 
tightening of credit has essentially 
choked off the lifelines of many 
businesses. Fortunately, governments 
around the world are responding and 
putting in place measures to pump 
prime the ailing economies. However, 
the outlook remains uncertain.  

We have also been affected. The ﬁ rst 
to be hit was our Property business. 
Launches of residential projects had 
to be shelved due to weak demand. 
Singapore Petroleum Company’s (SPC) 

earnings were impacted by the huge 
volatility in crude oil prices and reﬁ ning 
margins. With the drastic drop in oil 
prices, new rig orders have temporarily 
stopped. We do not expect to see 
many new orders for drilling rigs in the 
near term, but we will continue to clinch 
some Floating Production Storage 
and Ofﬂ oading (FPSO) conversion 
projects and shiprepair work. There is 
also a slowdown in the number of new 
infrastructure projects coming onstream. 

Over the longer term, we remain 
conﬁ dent of the fundamentals of 
the industries we are in. Our core 
competencies built up over the years 
will cushion us from the full impact of 
the downturn. We will draw lessons 

6

Keppel Corporation Limited 
Keppel Corporation Limited 
Report to Shareholders 2008
Report to Shareholders 2008

and experiences from past crises to 
help us ride out the present challenges. 
We have proven our mettle before, 
emerging stronger after every crisis, 
and we plan to do so yet again. 

Q: In the business review you 
mentioned, are you considering 
a change in Keppel’s business 
strategy?

Q: What are your plans and 
priorities in leading Keppel 
through the present challenges? 

A: My top priority is to make Keppel 
ﬁ ghting ﬁ t by becoming leaner and 
stronger. To achieve this, we are 
reviewing all our businesses to see 
how we can create further value 
out of them. We will rationalise and 
restructure, and even shed some 
operations where we are unlikely 
to extract much more value.  

We would also look at enhancing our 
operational efﬁ ciencies by tapping on our 
technology and know-how. We must try 
to do our jobs faster, better and in a more 
cost-effective way. We are embarking 
on a Group-wide cost management 
exercise. All our businesses have 
been asked to review their operational 
processes to identify areas where cost 
savings can be realised.  

Keppel’s performance in and beyond 
this current crisis will depend on our 
core of dedicated leaders, talented 
managers, as well as our competent 
and committed workforce. As such, 
training and development of our 
people is being stepped up, so 
that when the recovery comes, 
our workforce will be equipped 
and ready to bring Keppel to the 
next level of growth. We are also 
focusing on improving the productivity 
of our workforce, so that our 
people can contribute to the overall 
strengthening of the operational 
efﬁ ciencies of the Group.  

A: Our ability to deliver a creditable 
set of results in 2008 attests to the 
strength of this strategy. In fact, our 
growth over the years is due largely 
to our ability to continually grow, invest, 
rationalise and synergise our portfolio 
of businesses.  Each business must 
create value to the Group. We must 
remain agile and ﬂ exible in response 
to the ever changing market conditions. 

We believe there continues to be 
growth potential in our key businesses, 
as they meet global needs which are 
real, concrete and enduring. We will 
continue to build on our strengths 
in our various markets.

“Our growth over 
the years is largely 
due to our ability 
to continually grow, 
invest, rationalise and 
synergise our portfolio 
of businesses…

Q: Keppel currently has a strong 
balance sheet and healthy cash ﬂ ow. 
How do you intend to maintain this? 

A: For us, prudent ﬁ nancial management 
is important in growing our businesses 
in good times and sustaining them in 
bad times. We will continue to manage 
our ﬁ nances wisely, guided by stringent 
risk management and robust corporate 
governance frameworks. 

Despite the difﬁ cult environment, we 
ended 2008 in a net cash position 
of $275 million and a cash balance 
of some $2.2 billion. Looking ahead, 
we have a $10.8 billion Offshore & 
Marine orderbook extending into 2012, 
and sizeable Infrastructure contracts, 
some with recurring income streams 
for the next 25 years. After taking into 
consideration the cash which we will 

Rationalise 
& Grow

Build
   Strengths

Multi-Business
Strategy

       Invest
& Acquire

We must not be derailed from our 
focus on sustained value creation for 
our shareholders. We will continue to 
sharpen our competitive edge and 
exploit synergies across the Group to 
ensure that we emerge from this crisis 
stronger than ever.  

need to complete our projects, our 
gearing should remain within healthy 
levels this year.

We will continue to pursue contracts 
and projects which are cash ﬂ ow 
positive. Infrastructure projects which 

Interview with CEO

7

Interview with CEO

will give us steady recurring income 
streams are also attractive to us. 
Capital expenditure requirements and 
new investments will be evaluated 
selectively and carefully. We will invest 
only if the returns are meaningful. 

Q: What is Keppel Offshore & Marine 
(Keppel O&M) doing to prepare itself
for the downturn? 

A: The fundamentals of the Offshore & 
Marine business remain intact. In the long 
run, offshore Exploration & Production 
(E&P) activities will continue, in order to 
meet the growing global energy demand. 
Against this backdrop, we remain ﬁ rmly 
committed to grow our Offshore & 
Marine business. We expect Keppel O&M 
to leverage its technology and innovation 
leadership and strong execution 
capabilities to weather the current 
storm and more importantly, to 
propel the business forward.

For 2009, our offshore yards will be 
busier than 2008 with a total of 14 rig 
deliveries. FPSO conversions will 
likewise continue to be active in 2009. 
Our shiprepair yards are also busy, but 
may be impacted by the downturn in 
the global shipping industry. 

In good times and bad, Keppel O&M 
manages its costs tightly. Instead of 
increasing capacity indiscriminately, we 
try to do more jobs through outsourcing 
and subcontracting, apart from sharing 
our facilities and resources across the 
globe. Our yards are not top-line driven, 
but are careful to pursue projects which 
have good down payments and timely 
progress payments.   

Q: How does Keppel O&M plan to 
maintain its leadership position?

A: Over the years, Keppel O&M 
has built up a strong reputation for 
execution excellence, customer focus 
and technology innovation. These 
are the three key strengths which the 
company will continue to leverage 
and build upon to further sharpen 
its competitive edge. 

On project execution, we will continue 
to place emphasis on making timely 
deliveries, with zero incidents and 
within budget. This capability stands 
us in good stead to achieve win-win 
partnerships with our customers and 
our customers’ customers. 

With 20 yards around the world, Keppel 
O&M is in a good position to continue 
with its “Near Market, Near Customer” 
strategy. For example in Brazil, where it 
has one of the largest newbuild yards, 
Keppel O&M is ready to take on more 
projects from state-owned Petrobras.
Other markets in which we are active 
include Russia, the Caspian Sea, the 
Middle East, India, Vietnam and China.  

We will continue to enhance Keppel 
O&M’s suite of proprietary designs and 
technological solutions to meet E&P 
market demands for activities in deeper 
waters and harsher environments. The 
current slowdown enables Keppel O&M 
to strengthen its research into newer 
technologies and competencies to meet 
future untapped demands and needs.  

Q: In this recession, where do you 
see growth opportunities and 
contribution by your Property 
Division? 

A: 2009 will be very challenging 
for Keppel Land with weakness 
in Singapore and other Asian 
markets where the Group operates. 
Hopefully, market conﬁ dence will be 
shored up with the various stimulus 
measures introduced by the regional 
governments. The lower mortgage 
rates and tax incentives would likely 
encourage home purchases too.   
While home prices have softened, 
the breakeven prices for Keppel 
Land’s residential projects are still 
considerably below current market 
prices. At the same time, the carrying 
values of its ofﬁ ce properties are within 
the lower end of the market range. 

Keppel Land will launch its projects if 
and when market conditions improve. 
Keppel Land remains disciplined and 
prudent in ﬁ nancial management. It 
will continue to review operating and 
project costs for all its developments 
to conserve cash. Meanwhile, it 
remains on the lookout for selective 
acquisitions if good opportunities 
present themselves.

Q: How do you intend to continue 
to grow the Infrastructure Division? 

A: Our Infrastructure Division has 
performed well in 2008. Its PATMI of 
$63 million in 2008 is more than double 
the level achieved in 2007. Moving 
ahead, our Infrastructure business 
will continue to build on its track 
record and develop its expertise and 
technology to secure new projects.  

8

Keppel Corporation Limited 
Report to Shareholders 2008

  
In environmental engineering, we are 
extending our reach from Europe, Asia, 
and the Middle East to Latin America. 
Margin improvements of this business 
will come from stronger operational 
efﬁ ciency, productivity increase and 
focus on technology innovations. We 
are on the lookout for more projects 
which will give us a steady recurring 
income stream. 

We continue to seek ways to expand 
our Infrastructure growth platforms 
and extract value from our assets. For 
example, we have announced plans 
to jointly list the world’s ﬁ rst green 
business trust (the Trust) with the 
Singapore Government in 2009. For 
a start, the Senoko Incineration Plant, 
which treats 2,100 tonnes of waste 
per day to produce 34 MW of green 
electrical energy, will be divested by the 
Singapore Government into the Trust 
upon listing. Singapore’s ﬁ fth waste-to-
energy plant at Tuas, currently being 
constructed by Keppel, and the Keppel 
Seghers Ulu Pandan NEWater Plant, 
will be among the ﬁ rst assets to be 
considered for injection into the Trust.  

Keppel Energy, which owns and 
operates a 500 MW co-generation 
plant on Singapore’s Jurong Island, 
continues to focus on delivering 
stronger earnings from its existing 
assets and to evaluate possible 
areas of growth. 

We are studying synergies within the 
Infrastructure Division with the view 
to grow the businesses and further 
optimise value from them.

President Luiz Inácio Lula da Silva sharing a moment of joy with Mr Choo at 
the christening of Petrobras’s P-51 ﬂ oating production unit in Brazil.

“We are reviewing all our businesses 
to see how we can create further 
value out of them... We must remain 
agile and ﬂ exible in response to ever 
changing market conditions.”

Q: What is Keppel’s plan for SPC?  

A: SPC is an important part of our 
multi-business strategy to create 
value for shareholders. We support 
its strategy to diversify its earnings 
base by further growing its portfolio 
of upstream assets to match its reﬁ ning 
capacity of 145,000 barrels per day 
(bpd). This strategy has reaped 
results. In 2008, SPC’s upstream 
business contributed about 40% 
of the company’s after-tax earnings. 
To date, SPC has nine production 
sharing contracts and one exploration 
permit across the Asia-Paciﬁ c region 
in Australia, Cambodia, China, 
Indonesia and Vietnam.

With low gearing, SPC is ﬁ nancially 
robust and will be able to remain 
resilient in this downturn. 

The downturn presents opportunities 
and SPC will continue to invest 
prudently to beneﬁ t from an eventual 
recovery of the global economy.  

Q: Finally, what is your vision 
for the Keppel Group? 

A: With the valued contribution from 
Chairman and the Board, together 
with all Keppelites, I hope to make 
Keppel a stronger Group with 
proﬁ table businesses, committed 
to deliver sustained value creation 
for all our stakeholders.   

I seek the conﬁ dence and full support 
of our stakeholders in our current 
efforts to overcome the challenges 
ahead and emerge from this crisis 
in great shape.

Interview with CEO

9

Driving
  a Difference 

With the invaluable lessons from the past economic 
downturns, Keppel will navigate the challenging landscape 
with ﬂ exibility, agility, discipline and prudence.

By 
Enhancing 
Performance

By 
Exercising 
Prudence

By 
Creating  
Value

By 
Seizing
Opportunities

We are exploiting our core competencies 
and distinctive qualities of resilience and 
innovation to strengthen our businesses 
for sustainable earnings growth

Integrity, discipline and accountability 
are core to responsible management 
of resources entrusted to us 

Getting the right talent to optimise value 
from our assets is pivotal to achieve 
business distinction and attractive returns 
for our shareholders 

Crises create opportunities for the ready. 
With our sturdy business platforms, 
global network and strong balance sheet, 
Keppel is ready

10

Keppel Corporation Limited 
Report to Shareholders 2008

Driving a Difference

11

Keppel’s Journey towards 
Sustainable Earnings Growth
Milestones: 1968–2008

1968
Formation of Keppel Shipyard 
(Pte) Ltd: Corporatisation of the 
Dockyard Department of the Port 
of Singapore Authority managed by 
British shiprepair group, Swan Hunter.

1971
Expansion into Offshore: Acquisition 
of 39% interest in listed Far East 
Shipbuilding Ltd (renamed FELS 
in 1972). Stake in company was 
increased to 61.3% in 1973.

1972
Change in Management to 
Local Hands: Singaporeans 
took over Keppel’s management. 

1975
First Overseas Venture: While 
developing a major shipyard in Tuas, 
Keppel Philippines Shipyard was set 
up in partnership with Filipino investors.

1976
Expansion of the Marine Business: 
Acquisition of Singmarine Shipyard, 
a medium-size shipbuilder and repairer.

1978
Start in Financial Services: 
Established to provide factoring to 
marine contractors, Shin Loong Credit 
(renamed Shin Loong Finance) propelled 
the growth and expansion of this division 
to include insurance and securities.

1980
Listing on the Singapore 
Stock Exchange: Keppel Shipyard’s 
30 million shares of $1.00 each was 
offered to the public at $3.30 per share.

1983
Diversiﬁ cation into Property: 
Acquisition of 82% interest in Straits 
Steamship Company.

1984
Restructuring of Keppel: 
Rationalisation of non-strategic 
businesses in the recession.

1986 
Name Change to Keppel 
Corporation: Keppel Shipyard became 
a division of the Company.

Foray into Vietnam: Straits 
Steamship Land developed the 
ﬁ rst international-class commercial 
building in the country.

Acquisition of ex-Mitsubishi Yard: 
The 12-ha yard, acquired deep in 
the offshore recession, became a 
cornerstone in the growth of FELS.

1989
Sharpening Focus on Property: 
Straits Steamship Company was 
renamed Straits Steamship Land 
following the restructuring of the company 
to concentrate on property development. 
The non-property businesses were 
grouped under Steamers Maritime 
Holdings (Steamers).

1990
Establishing of Banking and 
Financial Services as a Major 
Pillar of Growth: Keppel acquired 
Asia Commercial Bank (ACBank). 
Renamed Keppel Bank, the successful 
acquisition was listed in 1993.

Acquisition of Yard for US Market: 
FELS purchased a rig yard in the Gulf 
of Mexico where drilling was most 
active. The company was renamed 
Keppel AmFELS in 2004.

1991
Foray into the Middle East: 
Keppel acquired a 20% stake in Arab 
Heavy Industries (AHI), a shipyard in 
the United Arab Emirates. Interest in 
AHI has since been increased to 33%.

1992
Rationalisation of Engineering 
Business: This was carried out under 
Keppel Integrated Engineering (KIE).

1993
Leading Industrial Park 
Development: Keppel led the 
Singapore consortium in the 
development of the Suzhou 
Industrial Park (SIP).

BOO Power Barges: With insufﬁ cient 
rig orders amidst worsening oil prices, 
FELS developed two Build-Own-Operate 
ﬂ oating power barges which supplied a 
total of 180 MW of electricity to the 
Philippine power grid addressing brown-
out problems in the country.

1994
Seizing Opportunity in Telecoms 
Liberalisation: Re-positioned for 
telecommunications business, Steamers 
(now Keppel Telecommunications 
& Transportation) spearheaded the 
Keppel Group’s participation in 1997 
in MobileOne (M1), a consortium 
formed with SPH, Cable & Wireless 
and Hong Kong Telecom.

Offshore Technology Development: 
FELS set up a technology company 
for R&D of jackup rigs.

1995
Growing Presence in The 
Philippines: Subic Shipyard & 
Engineering Works was inaugurated 
following the acquisition of the former 
Philseco yard.

Property Expansion in China: 
Straits Steamship Land began 
construction of its ﬁ rst property 
in Shanghai, and signed agreement 
to develop a golf resort with residential 
development in Kunming, Yunnan 
Province.

1997
Rebranding Exercise Group-wide: 
The Keppel name was adopted across 
the Group.

Presence in the Caspian: The 
Caspian Shipyard in Baku, Azerbaijan, 
was set up to meet demand for oil rigs in 
the new frontier for oil and gas industry.

Opportunity in Crisis: Keppel Bank 
acquired Tat Lee Bank which was 
impacted by the Asian ﬁ nancial crisis. 
The enlarged bank was renamed 
Keppel TatLee Bank in 1998.

1998
Towards a Leaner Keppel: Keppel 
removed cross-shareholdings in its 
Group of companies and rationalised 
the businesses which included the 
merger of Keppel FELS (previously 
FELS) and KIE into Keppel FELS 
Energy & Infrastructure (KFEI).

1999
Entry into Oil and Gas: Keppel 
acquired about 77% interest in the 
Singapore Petroleum Company (SPC). 

Consolidation of Marine 
Operations: Keppel Shipyard acquired 
Hitachi Zosen and was named Keppel 
Hitachi Zosen (KHZ).

Remodelling Property: Keppel Land 
(previously Straits Steamship Land) 
increased its regionalisation thrust, 
re-balanced its Singapore trading assets 
and investment properties and started 
the property fund management 
fee-based business.

Extracting Value from Land 
Assets: Keppel Shipyard moved 
out of Telok Blangah site in the city, 
paving the way for redevelopment 
of 32-ha site to Keppel Bay, Singapore’s 
premier waterfront precinct.

2000
k1 Ventures: Formerly Singmarine 
Industries, then Keppel Marine 
Industries, the company changed 
its mandate to become a diversiﬁ ed 
investment company.

Positioning SPC as an Integrated 
Oil and Gas Company: Against 
the backdrop of US$10 oil per barrel, 
SPC began its upstream business 
with the acquisition of the offshore 
Kakap gas ﬁ eld in Indonesia. 

Its interest in oil and gas ﬁ elds has 
since expanded to ﬁ ve countries.

2001
Divestment of Banking and 
Financial Services Business: 
The divestment of the Division, which 
contributed nearly 50% of the Group’s 
earnings, enabled Keppel to privatise 
and integrate the offshore & marine 
businesses.

Restructuring for Greater Focus: 
Offshore & Marine, Property and 
Infrastructure became the core 
businesses of Keppel.

Delisting of KFEI: This set off the 
consolidation of the shipyard operations, 
including the delisting of KHZ, under the 
newly formed Keppel Offshore & Marine 
(Keppel O&M) in 2002.

Opportunity During a Downturn: 
Keppel Land, with two overseas 
partners, seized the opportunity 
to bid at good price a prime site in 
the New Downtown. The 1.14-ha site 
was developed as One Rafﬂ es Quay 
(ORQ) to yield a total of 1.32 million sf 
of ORQ prime ofﬁ ce space.

2002
Foray into The Netherlands: 
Keppel O&M completed the acquisition 
of Dutch offshore shipyard and 
renamed it Keppel Verolme BV.

Environmental Engineering: 
The acquisition of Keppel Seghers 
Technology (formerly Seghers Better 
Technology) in 2002 contributed to the 
securing of the NEWater and Waste-to-
Energy (WTE) projects on Build-Own-
Operate basis from the Singapore 
Government in 2005.

2003 
Stronger Presence in the Caspian: 
Keppel O&M established Keppel 
Kazakhstan, an offshore engineering 
and construction facility.

2005
Securing Marina Bay Financial 
Centre (MBFC): Strategically located 
in the New Downtown, the integrated 
development with ofﬁ ce, commercial, 
residential and entertainment offerings 
has a GFA of 4.7 million sf.

Shipyard in China: Keppel O&M 
acquired a shipyard in Nantong for 
cost advantage.

2006
Foray into Qatar with 
Environmental Engineering: 
Keppel Seghers secured from the 
Qatari government a QR 3.9 billion 
(about $1.7 billion) solid waste 
management project and in the 
next year, a QR 3.6 billion 
(about $1.5 billion) wastewater 
treatment plant. 

Unlocking Value via a REIT: 
Keppel Land sponsored the 
establishment of a new real estate 
investment trust known as K-REIT Asia.

2007
Advancing Technology: Keppel O&M 
Technology Centre and Keppel 
Environmental Technology Centre were 
set up with seed money of $150 million 
and $50 million respectively.

2008
Tianjin Eco-City Project: The Keppel 
Group entered into an agreement to lead 
the Singapore consortium in developing 
an Eco-City project in Tianjin.

Build, Rationalise and Grow

 Revenue
$m

12,000

11,000

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

-1,000

-2,000

Rationalise engineering business

M1 begins operation

Rationalise non-core business

Acquire ACBank

Diversify into property

Secure Qatar wastewater 
plant; co-generation plant 
begins operation

Set up REIT; secure Singapore’s 5th 
WTE plant; secure MBFC site

Develop township business

Acquire Seghers

Divest banking and ﬁ nancial 
services; secure ORQ site

Rationalise shipyards; 
develop Keppel Bay

Acquire SPC

PATMI
$m

3,000

2,750

2,500

2,250

2,000

1,750

1,500

1,250

1,000

750

500

250

0

-250

-500

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Oil crisis

Recession

Revenue

Proﬁ t After Tax & Before Minority Interests (PATMI)

Oil price
collapse

Asian 
ﬁ nancial crisis

Dotcom bubble 
burst; oil at US$10 
per barrel

Property 
downturn

SARS 
outbreak

Global 
downturn

1968: Incorporation • 1971: Move into offshore • 1975: First venture overseas • 1976: Expand marine business • 1978: Begin ﬁ nancial services

Harnessing 
Entrenched 
Competencies

(cid:129)  Visionary leadership
(cid:129)  Financial strength
(cid:129)  Robust governance
(cid:129)  Experienced and talented 

workforce

(cid:129)  Technology leadership
(cid:129)  Reputable brand
(cid:129)  Global network

We are embedding our core 
competencies into our systems 
to improve and sustain our 
organisational capability.

Leveraging Broad-Based 
Platforms

(cid:129)  Offshore & Marine has an orderbook of $10.8 billion 

(end-2008) extending into 2012.

(cid:129)  Infrastructure’s orderbook of ﬁ ve major projects 

includes some with recurring income of up to 25 years. 

(cid:129)  Property has good residential and commercial 
projects in Singapore including Keppel Bay, 
Marina Bay Financial Centre and Ocean 
Financial Centre and a residential portfolio 
of about 90 million sf across Asia and the 
Middle East.

(cid:129)  We will continue to build our collective strengths, 

sharpen our competitive edge and exploit synergies 
to sustain high levels of performance across 
our businesses.

Enhancing
Performance

In this turbulent environment, we will do whatever it takes to remain 
ﬁ ghting ﬁ t, manage uncertainties and best position ourselves for the 
upturn. As we stay committed to create sustainable earnings growth, 
we will invest in excellence in our relentless drive to restructure, build 
and grow our businesses. 

Executing and 
Delivering Well

Our experienced workforce, 
commercial excellence, project 
management skills, efﬁ cient supply 
chain and comprehensive facilities 
are core to our value-enhancing 
products and services delivered 
on time, within budget and without 
incidents.

Achieving Steady 
Earnings

FY2008 PATMI

$1,097m

Having consistently achieved 
good proﬁ ts, we are reviewing our 
businesses to extract more value 
from them and ensure steady 
earnings and a healthy cash ﬂ ow.

  
Exercising
Prudence

Driven by integrity, Keppel will reinforce our inherent sound 
business principles and further strengthen accountability to 
our stakeholders. Amidst the challenging economic and capital 
conditions, we will stay rooted in our disciplined ﬁ nancial 
management which has engendered a relationship of trust 
that has served us well over the years, in good times and bad.

Riding on 
Corporate Thrusts

We align our businesses with 
our corporate thrusts of Sustaining 
Growth, Empowering Lives and 
Nurturing Communities.

With integrity and diligence, passion 
and pride, we will channel our 
energy to ride out the crisis and 
emerge stronger and more robust.

Producing Sturdy 
Returns

Return on Equity (ROE) 2008

22.4%

Clear guidelines and rigorous discipline are applied 
to all investments and divestments. Before contracts 
are approved, they are thoroughly reviewed to ensure 
positive cash ﬂ ow during execution and that risks are 
mitigated. These have contributed to a consistently 
high ROE for Keppel. This practice will continue more 
judiciously in this turbulent time. 

Strengthening our 
Balance Sheet

Net Cash Position as at end-2008
Our free cash ﬂ ow also increased 
63% from the previous year. We 
will continue to ensure positive 
cash ﬂ ow on our projects to fortify
the strength of our business platforms, 
allowing them to grow and prosper 
in the longer term.

Setting Good 
Governance

Our strong corporate stewardship 
is recognised and rewarded 
by investors. Good governance 
is second nature to us. In this 
crisis, we will manage risk more 
closely than ever to protect 
shareholders’ interests.

Creating   
Value

Investing in people and innovation has always been a priority 
at Keppel. For a sustainable competitive advantage in our 
businesses, we drive the pace by putting the right people to do 
the right job, engaging our customers actively with value-added 
solutions and making our assets work much harder.

Capitalising on
Brand Equity

Our business excellence, 
commitment and innovation will 
set us apart as a trusted business 
partner, the preferred solutions 
provider and an employer of choice, 
both in good times and bad.

Optimising Resources 

Economic Value Added (EVA) 2008

$692m

Our ﬁ fth consecutive year-on-year EVA growth 
demonstrates our efﬁ cient employment of capital, 
stringent investment criteria and strong cash ﬂ ow. 
We will scrutinise all our activities and processes 
to ensure continuing business strength.

Developing
Talent

As a people developer, we equip 
and empower staff to have the 
right skills, a global mindset and 
a Can-Do! attitude. The nurturing 
of talents goes beyond career 
development to succession 
planning in ensuring long-term 
sustainability of our businesses.

Investing in 
Technology

Keppel remains steadfast in 
investing in market-driven 
technologies. We prioritise 
our R&D pipeline to focus on 
projects that we believe can 
produce the highest value. 

Our R&D initiatives in recent 
years have yielded above 
$16 billion worth of Offshore 
& Marine contracts and $4 billion 
of Infrastructure projects.

Seizing
Opportunities

With our strong balance sheet, robust business platforms 
and a global network, Keppel stands ready to seize 
opportunities in this crisis. We will judiciously balance 
short-term pressures with our long-term strategies 
to grow our businesses and hunt for new markets.

Unlocking
Value

With its healthy balance sheet, 
Keppel Land which spearheads 
our Property Division, is poised 
to make selective acquisitions 
if good opportunities arise. With 
the regional markets experiencing 
difﬁ culties, it will continue to 
exercise great care in executing 
its business strategy and actively 
manage its ﬁ nancial resources.

Pursuing Enduring 
Businesses

The crisis has dampened but not stopped the 
momentum to reduce the ecological footprint 
in urban development and manage scarce water 
resources. With Keppel’s water and waste-to-energy 
technologies, brand equity and sterling track 
record, the Infrastructure Division has a strong 
value proposition for municipal governments and 
industrial operators seeking to address these 
environmental issues.

Investing for
the Future

Declining prices present 
opportunities for our oil and gas 
company, Singapore Petroleum 
Company, to prudently acquire 
upstream assets and fuel future 
growth. Its strong balance sheet 
in the current weak market enables 
the company to balance its reliance 
on downstream activities and to 
further diversify its earnings stream. 

Capturing New 
Markets

By planting operations 
“Near Market, Near Customer”, 
our Offshore & Marine Division 
gains early notice in its hunt for 
new proﬁ t pools and fresh markets. 
It will act with conviction, tapping 
on its wide network of business 
partnerships, local knowledge 
and key competencies.

  
Key Figures

Revenue

PATMI

$11.8b

$1,097m

Increased 13% from FY07’s $10.4 billion 
Revenue grew $1.4 billion to reach $11.8 billion in 2008. 
This was mainly contributed by Offshore & Marine Division 
and Infrastructure Division. The increases were partially 
offset by a decline in revenue from Property Division.

Increased 7% from FY07’s $1,026 million 
Earnings exceeded the billion-dollar mark, achieving a new 
high of $1,097 million. Notwithstanding the lower earnings 
growth in 2008, the ﬁ ve-year CAGR for PATMI remained 
above 22%.

ROE

EVA

22.4%

$692m

Increased 3% from FY07’s 21.8% 
ROE has improved year-on-year for the 10th year. 
It surpassed 10% since 2001, exceeded 15% in 2004 
and breached 20% in 2007. ROE remained above 
20% to reach a new record of 22.4% in 2008.

Increased $88 million from FY07’s $604 million 
Increased EVA was due to higher NOPAT coupled with lower 
capital charge. EVA was negative $665 million in 2001 and 
continued to improve year-on-year, achieving $692 million in 
2008. This is an improvement of $1.4 billion over eight years.

EPS

Dividend

69.0¢

Increased 6% from FY07’s 64.9 cents per share 
EPS growth kept pace with PATMI growth. 
No signiﬁ cant dilution in EPS because no major 
capital call was made since 1997.

35.0¢

Dividend payout remained above 50% of PATMI 
Total dividend for 2008 comprises ﬁ nal dividend of 21 cents 
and interim dividend of 14 cents already paid. In the previous 
year, total dividend of 64.0 cents included a special dividend 
of 45 cents. The Group has consistently distributed more than 
50% of its PATMI to its shareholders for the past eight years.

Free Cash Flow

Net Cash

$1,876m

0.04x

Increased 63% from FY07’s $1,151 million 
Healthy free cash ﬂ ow of $1.9 billion was the highest 
ever achieved in a year.

Improved from FY07’s net gearing of 0.09x 
Strong cash ﬂ ow resulted in net cash position. 
Gearing has been reduced from 1.12x in 2001 to 0.77x 
in 2003 to the current negative gearing of 0.04x. This places 
the Group in good position to further strengthen its earnings 
base going forward.

20

Keppel Corporation Limited 
Report to Shareholders 2008

Group Strategic Directions

Strategic Directions

Strategy in Action

Fortifying Core Competencies

•  Underpin value creation by  

investing in R&D for long-term  

  growth

•  Foster growth by enhancing  
  operational competitiveness  

through strategic investments and  

  partnerships with trendsetters

•  Nurture and develop people to 
share a common culture and a 

  drive to deliver more

Expanding Global Footprint

•  Build on the Group’s strong 
  global network for new business   
  opportunities

•  Leverage the Keppel brand equity  

to enhance its presence in  

  existing markets and penetrate    
  new markets

Increasing Business 
Robustness

•  Protect long-term earnings  

through commercial excellence    

  and mitigation of risks

•  Drive best practice initiatives  

through operational excellence,    
superior cash ﬂ ow and strong  
  earnings return to shareholders

Leveraging Growth Platforms

•  Leverage the Group’s scale and   
the spread of its businesses, and  
their embedded growth options,   
to develop new platforms for  
robust and sustainable earnings   
streams.

KOMtech’s R&D Achievements 
Keppel Offshore & Marine Technology Centre 
(KOMtech) has patented eight products just 
a year after its launch. Key projects include 
developing new anti-corrosive self-
compacting concretes for offshore 
structures, ice-resistant designs for mobile 
offshore drilling units and winterising jackup 
rigs for subzero regions.

Building on our Presence 
in the Middle East 
In pace with progress in Keppel Integrated 
Engineering's (KIE) two landmark environmental 
engineering projects totalling $3.2 billion in 
Qatar, Keppel Land is developing a luxury 
waterfront residential development in Jeddah, 
Saudi Arabia. Keppel O&M is also accelerating 
the building of the NAKILAT shipyard in the 
Port of Ras Laffan, north of Doha. Expected 
to commence operations in 2010, this 
shipyard is poised to meet the future needs 
of the region.

Selective and Careful 
Evaluation of Investments 
Prudent ﬁ nancial management, stringent risk 
management and strong corporate governance 
have been key to our net cash position. Each 
capital expenditure and new investment is 
carefully evaluated. Beyond a strategic ﬁ t with 
our core businesses, the project has to be 
EVA positive and generate an ROE of at least 
12%. We are conducting a review of our 
businesses to further rationalise and 
streamline our portfolio in order to maximise 
value to shareholders.

Track Record in Water Technology 
KIE is building new technologies such as 
MEMSTILL®, a distillation process using 
hydrophobic membranes to separate brackish 
water from pure distilled water. Utilising low-
grade waste steam and heat from heat-
generating plants, MEMSTILL® presents a 
cleaner, more economical and energy-efﬁ cient 
alternative to existing technologies. A large 
demonstration plant for MEMSTILL® is 
planned for 2010 in Singapore.

Group Strategic Directions

21

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group at a Glance

Keppel Corporation

Offshore & Marine

Revenue ($ million)

Revenue ($ million)

2008

2007

  11,805

  10,431

2008

2007

  8,569

  7,258

The Group produced a sterling set of results for the year despite the 
challenges and weakness in the global economy.

$1,097m

PATMI in 2008

Strong Governance
The Group ﬁ rmly believes that a genuine commitment to good governance 
is essential to the sustainability of our businesses and performance. Key to 
good governance is a strong and independent Board, engaging the executive 
directors and management, and at the same time, providing wise counsel and 
excellent insights.

Our Board of Directors comprises six independent directors, two non-executive 
directors and two executive directors. Presiding over strategic directions and 
corporate governance of Keppel Corporation, the Board also oversees the 
businesses and processes of the company.

Strategic Management
Based in Singapore, Keppel Corporation provides strategic direction to the 
business units and coordinates corporate services including audit and risk 
management, corporate planning, corporate communications, ﬁ nance, 
human resources, information services, legal, tax and treasury.

Consistent Efforts
We remain steadfast in our strategy of building our key businesses of 
Offshore & Marine, Property and Infrastructure, and maximising the value 
embedded in our Investments.

To achieve consistent performance, our disciplined investment approach 
supports long-term growth and balances this with fair returns to stakeholders. 
High priority is placed on talent management, technology development 
and acquisition, brand equity enhancement, network building with strategic 
partners and trendsetters as well as cultivating a corporate culture of integrity 
and the Can-Do! spirit.

Collective Strength
With operations spanning 35 countries, our strength is underpinned by Group 
cohesiveness across different business units and between business units and 
the Headquarters. We use our collective experience, expertise and network 
to realise the Group’s common vision whilst adhering to one another’s priorities 
and focus.

There is open communication between management and the Board, and as 
a result, Keppel Corporation beneﬁ ts from the counsel, guidance and expertise 
of Board members. We believe that this concerted approach in growing our 
businesses will enable us to deliver more to stakeholders even amidst an 
increasingly uncertain and competitive global environment.

Offshore & Marine continues to 
be the largest contributor to Group 
revenue with 18% growth in 2008.

$705m

PATMI in 2008 The Division 
accounted for 64% of the Group’s 
earnings, up 35% from $522 million 
in 2007.

To be the choice provider
and solutions partner in its 
selected segments of the 
offshore and marine industry

Focus for 2009/2010
•  Deliver value through 

excellent project management 
and execution

•  Enhance R&D initiatives 
to strengthen group 
position as market leader 
in selected segments

•  Explore opportunities in adjacent 
business areas and new markets

•  Maximise and realise 

operational efﬁ ciencies

•  Step up prudent cost management

•  Focus on Health, Safety and 

the Environment

22

Keppel Corporation Limited 
Report to Shareholders 2008

Property

Infrastructure

Investments

Revenue ($ million)

Revenue ($ million)

Revenue ($ million)

2008

2007

  950

2008

2007

  1,835

  2,232

2008

2007

  1,277

  54

  61

Property's revenue of $950 million 
was $885 million or 48% lower due 
to lower sales of residential projects 
in 2008.

$157m

PATMI in 2008 Property’s year-
on-year earnings fell by 25%, which 
in turn accounted for 14% of the 
Group’s earnings.

Infrastructure contributed to a billion-
dollar increase in Group revenue due 
largely to higher revenue from the 
co-generation plant in Singapore and 
environmental engineering contracts.

$63m

PATMI in 2008 The Division’s 
PATMI was more than double the 
level achieved in 2007.

Investments’ revenue was lower 
in 2008 compared to 2007.

$172m

PATMI in 2008 Investment’s 
36% decline in proﬁ t compared 
to 2007 levels was due mainly to 
lower contribution from SPC.

To be a leading property 
developer and a premier 
property fund manager in Asia

To build a selected portfolio 
of environmental engineering, 
power generation, logistics 
and data centre and networks 
businesses

To maximise value of 
businesses and investments 
for shareholders

Focus for 2009/2010
•  Contribute to development of the 
New Downtown with Marina Bay 
Financial Centre and Ocean 
Financial Centre, and the 
waterfront precinct with 
Reﬂ ections at Keppel Bay

•  Selectively pursue township, 

lifestyle and sustainable 
developments in Asia

•  Grow fund management income 

•  Strengthen efforts in promoting 
sustainable development for all 
its projects

•  Further develop green expertise 
through involvement in the Sino-
Singapore Tianjin Eco-City

Focus for 2009/2010
•  KIE – offer sustainable energy and 
water solutions to communities 
through recovery of energy from 
waste and water from wastewater

Focus for 2009/2010
• SPC – prudently invest in oil and 

gas production assets and develop 
existing acreages for long-term 
shareholder value creation

•  Keppel Energy – build a strong 

• k1 Ventures – work closely 

power generation and gas supply 
business in Singapore and beyond

with investee companies for 
value creation 

•  Logistics – tap logistics growth of 

• M1 – continue to tap on 

China and Southeast Asia

opportunities from media 
convergence and develop 
new businesses anchored 
on core competencies

Group at a Glance

23

Keppel Around the World

We have a global presence 
spanning 35 countries with overseas 
customers as our earnings mainstay.

North 
America
$1,708m

Mexico 

  United States  

Central 
America
$109m

Nicaragua 

Ecuador 

South 
America
$1,337m

Brazil 

Argentina 

Offshore & Marine
Azerbaijan
Brazil
 Bulgaria
 China
 India
 Indonesia
 Japan
Kazakhstan
Norway
Qatar
Singapore
The Netherlands
The Philippines  
United Arab Emirates
 United States
Vietnam 

Property 
China
India
 Indonesia
Japan
Korea 
Malaysia
 Myanmar
Saudi Arabia
Singapore
 Thailand
The Philippines
Vietnam

Infrastructure 
Algeria
Argentina
 Australia
 Belgium
Brazil
China and Hong Kong
 Ecuador
 France
Germany
Indonesia
Ireland
Malaysia
 Mexico
Nicaragua
  Qatar
 Singapore
Spain
Sweden
 Thailand
The Philippines
 United Kingdom
United States
 Vietnam

Investments 
Australia
Cambodia
 China and Hong Kong
 Indonesia
 Singapore
Thailand
United States
 Vietnam

Sweden 

Norway 

Europe $3,521m

Ireland 

 The Netherlands   

 United Kingdom    

Belgium 

 Germany    

 France   

Bulgaria 

 Kazakhstan 

 Spain    

Azerbaijan 

 Algeria   

Saudi Arabia 

Qatar 

United Arab Emirates  

Middle East
$525m

China and 
Hong Kong
$235m

India
$451m

India 

China 

Hong Kong 

Myanmar 

 Vietnam   

Thailand 

Cambodia 

Malaysia 

SINGAPORE 

Indonesia 

Korea 

Japan 

Japan 
and Korea
$135m

 The Philippines

ASEAN
$3,641m

Australia
$143m

Australia 

Revenue by Market

ASEAN 
Europe 
North America 
South America 
Middle East 

$3,641m
$3,521m 
$1,708m
$1,337m
$525m

India 
$451m
China and Hong Kong  $235m
$143m
Australia 
$135m 
Japan and Korea 
$109m
Central America 

Total FY08 Revenue

$11,805m

24

Keppel Corporation Limited 
Report to Shareholders 2008

Keppel Around the World

25

 
 
 
 
    
 
 
 
    
 
 
      
      
 
 
    
 
 
 
 
    
 
    
 
 
 
    
 
 
 
    
 
    
       
 
    
      
 
  
 
   
     
   
 
 
 
   
 
 
   
 
   
 
  
 
   
   
   
   
   
Board of Directors

Our Directors bring their wealth 
of experience and expertise to the 
strategic governance of the Group.

Lim Chee Onn, 64

Non-Executive Chairman
Chairman, Executive Committee

The board and management of Keppel Corporation
ﬁ rmly believe that a genuine commitment to good 
corporate governance is essential to the sustainability 
of the Company’s businesses and performance.

26

Keppel Corporation Limited 
Report to Shareholders 2008

Choo Chiau Beng, 61

Tony Chew Leong-Chee, 62

Lim Hock San, 62

Chief Executive Ofﬁ cer
Member, Executive Committee
Member, Board Safety Committee

Lead Independent Director
Executive Chairman, 
Asia Resource Corporation 
Member, Executive Committee 
Member, Audit Committee

Independent Director
Chief Executive Ofﬁ cer, 
United Industrial Corporation 
Chief Executive Ofﬁ cer, 
Singapore Land 
Chairman, Audit Committee 
Member, Executive Committee 
Member, Board Risk Committee

Board of Directors

27

Board of Directors

Sven Bang Ullring, 73

Tsao Yuan Mrs Lee Soo Ann, 53

Oon Kum Loon, 58

Independent Director
Chairman, Board of The Fridtjof 
Nansen Institute, Oslo, Norway 
Chairman, Nominating Committee 
Chairman, Remuneration Committee
Member, Board Safety Committee

Independent Director
Executive Coach and Coach Practice 
Leader, SDC Consulting
Member, Nominating Committee
Member, Remuneration Committee
Member, Board Safety Committee

Independent Director
Chairman, Board Risk Committee 
Member, Audit Committee 
Member, Executive Committee 
Member, Nominating Committee
Member, Remuneration Committee

28

Keppel Corporation Limited 
Report to Shareholders 2008

Tow Heng Tan, 53

Yeo Wee Kiong, 53

Teo Soon Hoe, 59

Non-Independent and 
Non-Executive Director
Chief Investment Ofﬁ cer, 
Temasek Holdings 
Member, Executive Committee
Member, Remuneration Committee 
Member, Board Risk Committee

Independent Director
Director, Drew & Napier LLC 
Chairman, Board Safety Committee
Member, Board Risk Committee

Senior Executive Director 
and Group Finance Director 
Member, Executive Committee

Board of Directors

29

Keppel Group Boards of Directors

Keppel Offshore & Marine

Choo Chiau Beng 
Chairman
Chief Executive Ofﬁ cer,
Keppel Corporation

Tong Chong Heong
Chief Executive Ofﬁ cer

Charles Foo Chee Lee
Managing Director (Special Projects)

Sit Peng Sang
Chief Financial Ofﬁ cer

Bjarne Hansen
Senior Partner, Wing Partners I/S, 
Denmark

Prof Neo Boon Siong
Director, Asia Competitiveness Institute, 
Lee Kuan Yew School of Public Policy, 
National University of Singapore

Stephen Pan Yue Kuo
Chairman, World-Wide 
Shipping Agency Limited

Prof Minoo Homi Patel
Head of School & Professor of 
Engineering, School of Engineering, 
Cranﬁ eld University, UK

Dr Malcolm Sharples
President, Offshore Risk 
& Technology Consulting, US

Teo Soon Hoe
Senior Executive Director and Group 
Finance Director, Keppel Corporation

Keppel Land

Lim Chee Onn 
Chairman
Chairman, Keppel Corporation

Kevin Wong
Group Chief Executive Ofﬁ cer

Lim Ho Kee
Chairman, Singapore Post

Prof Tsui Kai Chong
Provost and Professor of Finance, 
SIM University

Lee Ai Ming (Mrs)
Deputy Managing Partner, 
Rodyk & Davidson

Tan Yam Pin
Former Managing Director, 
Fraser and Neave Group

Niam Chiang Meng
Permanent Secretary, 
Ministry of Community Development, 
Youth and Sports

Wee Sin Tho
Vice President, Endowment 
and Institutional Development, 
National University of Singapore

Tan Boon Huat
Chief Executive Director, 
People’s Association

Keppel Energy

Ong Tiong Guan
Managing Director 

Choo Chiau Beng
Chief Executive Ofﬁ cer, 
Keppel Corporation

Heng Chiang Meng
Principal/Director, 
Spear Consultancy Pte Ltd

Teo Soon Hoe
Senior Executive Director and Group 
Finance Director, Keppel Corporation

Edward Lee
Former Ambassador to Indonesia

Choo Chiau Beng
Chief Executive Ofﬁ cer, 
Keppel Corporation

Khoo Chin Hean
Executive Director, 
Energy Studies Institute

Foo Jang See
Director

Teo Soon Hoe
Senior Executive Director and Group 
Finance Director, Keppel Corporation

Keppel Integrated 
Engineering

Keppel Telecommunications 
& Transportation

Teo Soon Hoe
Chairman 
Senior Executive Director and Group 
Finance Director, Keppel Corporation

Lam Kwok Chong
Managing Director

Dr Tan Tin Wee
Associate Professor of Biochemistry, 
National University of Singapore

Prof Bernard Tan Tiong Gie
Professor of Physics, National 
University of Singapore

Wong Boon Kong
Chairman

Chua Chee Wui
Chief Executive Ofﬁ cer

Tong Chong Heong
Chief Executive Ofﬁ cer, 
Keppel Offshore & Marine

Lawrence Lim
Director

Loh Ah Tuan
Director

Khor Poh Hwa
Senior Advisor to CPG Corporation

Reggie Thein
Independent Director 

30

Keppel Corporation Limited 
Report to Shareholders 2008

Singapore Petroleum 
Company

Prof Tan Teck Meng
Professor of Accounting, 
Singapore Management University

Goh Yong Hong
Chairman, Advisory Board 
of Rafﬂ es Town Club Pte Ltd

Choo Chiau Beng 
Chairman
Chief Executive Ofﬁ cer,
Keppel Corporation

Koh Ban Heng
Chief Executive Ofﬁ cer

Bertie Cheng Shao Shiong
Chairman, TeleChoice International

Cheng Hong Kok
Director

Dr Chin Wei-Li, Audrey Marie
Chairman, Vietnam Investing 
Associates – Financials (S) Pte Ltd

Goon Kok-Loon
Executive Chairman, Global Marine 
& Port Services Pte Ltd

Teo Soon Hoe
Senior Executive Director and Group 
Finance Director, Keppel Corporation

Chow Wing Kin Anthony
Partner, Peter C. Wong, 
Chow & Chow

Yong Pung How
Former Chief Justice, 
Republic of Singapore

Patrick Choy
Chairman, Global Strategy 
Company Limited; 
Chairman, China Financial Leasing Group

K-REIT Asia Management

Chow Kok Fong
Chartered Arbitrator

Prof Tsui Kai Chong 
Chairman
Provost and Professor of Finance, 
SIM University

Kevin Wong
Deputy Chairman 
Group Chief Executive Ofﬁ cer, 
Keppel Land 

Khor Poh Hwa
Senior Advisor to CPG Corporation

Choo Chin Teck
Director (Corporate Services), 
Keppel Land International 
Joint Company Secretary, 
Keppel Land

Ang Wee Gee
Executive Director and 
Chief Executive Ofﬁ cer (International), 
Keppel Land International

Geoffrey John King
Director, Vermilion Oil & Gas Australia 
Director, Phoenix Oil and Gas Limited 
Director, Carpathian Resources Limited

Tan Swee Yiow
Chief Executive Ofﬁ cer/Director 
Chief Executive Ofﬁ cer (Singapore 
Commercial), Keppel Land International

Dato Paduka Timothy 
Ong Teck Mong
Acting Chairman, Brunei Economic 
Development Board

Teo Soon Hoe
Senior Executive Director and Group 
Finance Director, Keppel Corporation

k1 Ventures

Steven Jay Green
Chairman/Chief Executive Ofﬁ cer 
Former US Ambassador to Singapore

Kamal Bahamdan
Founder and Managing Partner, 
The BV Group

Choo Chiau Beng
Chief Executive Ofﬁ cer, 
Keppel Corporation

Lee Ai Ming (Mrs)
Deputy Managing Partner, 
Rodyk & Davidson

Lim Poh Chuan
Director, Income Partners funds

Dr Chin Wei-Li, Audrey Marie
Chairman, Vietnam Investing 
Associates – Financials (S) Pte Ltd

Evergro Properties

Chew Heng Ching 
Chairman
Chairman, Governing Council, 
Singapore Institute of Directors 

Kevin Wong 
Non-Executive Vice Chairman 
Group Chief Executive Ofﬁ cer, 
Keppel Land 

Dr Lee Suan Yew
Medical Practitioner and Past President 
of the Singapore Medical Council

Goh Toh Sim
Chief Executive Ofﬁ cer/Executive 
Director

Keppel Group Boards of Directors

31

Keppel Technology Advisory Panel 

The Group promotes a culture of innovation 
with guidance from eminent business leaders, 
professionals and industry experts.

Professor Cham Tao Soon 
Chairman
BEng (Civil), 1st Class Honours, 
University of Malaya; BSc (Maths), 
University of London; PhD (Fluid 
Mechanics), University of Cambridge.

He was the founding President of 
Nanyang Technological University 
(Singapore) in 1981 and had 
relinquished the post in 2002 and is 
now its President (Emeritus). Presently, 
he is the Chancellor and Chairman 
of SIM University. He has received 
several honorary doctorates and 
foreign academy awards including 
the International Medal of the British 
Royal Academy of Engineering.

Professor Sir Eric Ash 
BSc and PhD, Imperial College 
London; CBE FREng FRS.

He is presently an Advisor to Tata 
Consulting Engineers Ltd in Mumbai. 
A past president of the Institution of 
Electrical Engineers (now Institution 
of Engineering and Technology), he is 
a Foreign Member of the US National 
Academy of Engineering. He was 
Rector of Imperial College 1985–93, 
Vice President of the Royal Society 
1997–2002. He has several honorary 
doctorates including one from 
NTU Singapore.

Dr Brian Clark 
Schlumberger Fellow; B.S. Ohio 
State University; PhD, Harvard 
University (1977).

He holds 54 patents related to the 
exploration and development of oil and 
gas, primarily in wireline logging and 
logging while drilling. He was recognised 
as the Outstanding Inventor of the Year 
for 2002, by the Houston Intellectual 
Property Law Association and as the 
Texas Inventor of the Year for 2002, 
by the Texas State Bar Association.

Professor Minoo Homi Patel 
Fellow of the Royal Academy of 
Engineering, the Institution of 
Mechanical Engineers and the 
Royal Institution of Naval Architects; 
Chartered Engineer; BSc (Eng) and 
PhD, University of London and an 
Honorary Member of the Royal Corps 
of Naval Constructors. 

He is Head of the School of 
Engineering at Cranﬁ eld University and 
a Founder Director of the science park 
company BPP Technical Services Ltd.

Dr Yeo Ning Hong 
BSc (Chemistry), First Class Honours, 
MSc, University of Singapore; 
Master of Arts and PhD, University 
of Cambridge (1970).

He also sits on the Boards of 
Keppel Offshore & Marine, Cranﬁ eld 
Aerospace, Cranﬁ eld Engineering 
Innovations and Pipestream 
Engineering Inc.

Dr Yeo is Advisor to Far East 
Organisation and formerly Advisor to 
Temasek Holdings (Pte) Ltd and Hyﬂ ux 
Ltd. He is also Chairman of SQL View Pte 
Ltd and Universal Gateway International 
(Pte) Ltd, and serves as a Director of 
Singapore Press Holdings Ltd.

Dr Yeo was a Cabinet Minister in the 
Singapore Government from 1981 to 
1994 holding appointments as Minister 
for Communications, Information, 
National Development and Defence.

Dr Malcolm Sharples 
President, Offshore Risk & 
Technology Consulting Engineering 
Inc.; B. E. Sc Engineering Science, 
University of Western Ontario; PhD; 
University of Cambridge; Athlone 
Fellow; Fellow of the Society 
of Naval Architects; Registered 
Professional Engineer.

His company provides consulting on 
offshore-related projects including 
project technical risk, project safety 
cases and health & safety quality 
systems, ﬁ nancial due diligence 
on acquisitions, regulatory advice, 

32

Keppel Corporation Limited 
Report to Shareholders 2008

business development assistance, 
and he has been involved as an 
expert witness in a number of legal 
proceedings. He is an active member 
of the Canadian Standards Association 
on offshore wind farms.

He is a Director of Keppel Offshore 
& Marine.

Professor James Leckie 
BS (Honours), San Jose State 
University; SM, PhD, Harvard 
University (1970); The C. L. Peck, 
Class of 1906 Professor of 
Environmental Engineering and 
Applied Earth Sciences, Stanford 
University; Director of the Stanford 
Centre for Sustainable Development 
& Global Competitiveness; Director, 
Stanford-China Executive Leadership 
Programme; Director, Singapore 
Stanford Partnership.

He has appointments in both Civil 
and Environmental Engineering, and 
Geological and Environmental Sciences 
at Stanford. He is a member of the 
National Academy of Engineering. 
He holds ﬁ ve patents related to water 
treatment technology and over 300 
publications. His areas of teaching and 
research are in environmental chemistry 
and human exposure analysis.

Dr Tan Gee Paw 
BEng (Civil), First Class Honours, 
University of Malaya; MSc (Systems 
Engineering), University of Singapore; 
Doctor of Science (Honorary), 
University of Westminster; Doctorate 
in Engineering (Honorary), University 
of Shefﬁ eld. He is the Chairman of 
Public Utilities Board, the national 
water agency of Singapore since 
1 April 2001.

He is a member of the Presidential 
Council for Religious Harmony, and 
sits on the Board of JTC Corporation, 
NTU-Stanford Management Board, 
Exploit Technologies Pte Ltd, the 
Singapore Millennium Foundation 

1

3

2

4

5 6

9

8

7

10

11

(5th & 6th from left) CEO Choo Chiau Beng and 
Chairman Lim Chee Onn with KTAP members.
1  Dr Brian Clark
2  Dr Tan Gee Paw
3  Dr Malcolm Sharples
4  Professor Sir Eric Ash
7  Professor Minoo Homi Patel
8  Professor Cham Tao Soon (Chairman, KTAP)
9  Dr Yeo Ning Hong
10  Professor James Leckie
11  Professor Tom Curtis

Newcastle upon Tyne, as well as 
a recipient of the Royal Academy 
of Engineering Global Research 
Fellowship and the Biotechnology and 
Biological Sciences Research Council 
(BBSRC) Research Development 
Fellowship. Before entering academia, 
he worked in construction and public 
health policy. His major areas of 
research include microbial ecology, 
engineered biological systems in 
general and wastewater treatment 
in particular.

Limited, Ascendas Pte Ltd, First 
DCS Pte Ltd and OpenNet Pte Ltd. 
He is the Advisor for the Centre 
for Water Research, and Adjunct 
Research Professor of the Division of 
Environmental Science & Engineering, 
Faculty of Engineering, National 
University of Singapore (NUS). 

Dr Tan co-chairs the Environmental 
& Water Technologies International 
Advisory Panel, Ministry of the 
Environment & Water Resources. He is 
Chairman of the International Advisory 
Panel of the Lee Kuan Yew School 
of Public Policy, NUS, and chairs the 
Nominating Committee of the Lee 
Kuan Yew Water Prize, Singapore 
International Water Week. He is also 
a Member of the Advisory Board of 
the Centre for Liveable Cities, and 
Chairman of the Governing Board for 
the Earth Observatory of Singapore, 
Nanyang Technological University. 

Professor Thomas (Tom) Curtis 
BSc (Hons) Microbiology, University 
of Leeds; M.Eng and PhD Civil 
Engineering, University of Leeds.

He is a professor of Environmental 
Engineering of the University of 

Keppel Technology Advisory Panel 

33

Senior Management

Our leaders provide the strategic direction to the 
business units to further their competitive edge.

Keppel Corporation

Choo Chiau Beng
Chief Executive Ofﬁ cer

Teo Soon Hoe
Senior Executive Director & 
Group Finance Director

Corporate Services

Chan Soo Sen
Director (Chairman’s Ofﬁ ce)

Ko Kheng Hwa
Chief Executive Ofﬁ cer
Sustainable Development 
& Living Business Division

Chee Jin Kiong
Director
(Group Human Resources) 

Paul Tan
Group Controller

Wang Look Fung
General Manager
(Group Corporate Communications)

Lynn Koh
General Manager
(Group Treasury)

Lai Ching Chuan
General Manager
(Group Corporate 
Development / Planning) 

Magdeline Wong
General Manager
(Group Tax)

Tina Chin
General Manager
(Group Risk Management)

Nelson Yeo Chien Sheng
Executive Director
Keppel Shipyard

Hoe Eng Hock
Executive Director
Keppel Singmarine

Chow Yew Yuen
President (The Americas)

Caroline Chang
General Manager
(Group Legal)

Tan Eng Hwa
General Manager
(Group Internal Audit)

Martin Ling
General Manager
(Group Information Technology)

Offshore & Marine

Tong Chong Heong
Chief Executive Ofﬁ cer
Keppel Offshore & Marine

Sit Peng Sang
Chief Financial Ofﬁ cer
Keppel Offshore & Marine

Charles Foo Chee Lee
Managing Director
(Special Projects)
Keppel Offshore & Marine

Chee Jin Kiong
Executive Director
(Human Resources)
Keppel Offshore & Marine

Michael Chia Hock Chye
Executive Director
Keppel FELS

Wong Kok Seng
Executive Director
(Operations)
Keppel FELS

34

Keppel Corporation Limited 
Report to Shareholders 2008

Property

Infrastructure

Unions

Kevin Wong
Group Chief Executive Ofﬁ cer
Keppel Land

Lam Kwok Chong
Managing Director
Keppel Telecommuncations & 
Transportation

Keppel FELS Employees Union
Muhamad Shah Bin Md Sahid
President

Atyyah Hassan
General Secretary

Keppel Employees Union
Mohd Yusop Bin Mansor
President

Mohd Yusof Bin Mohd
General Secretary

Shipbuilding & Marine 
Engineering Employees Union
Wong Weng Onn
President

Lim Chin Siew
Executive Secretary

Ang Wee Gee
Executive Director and
Chief Executive Ofﬁ cer (International) 
Keppel Land International 

Ong Tiong Guan
Managing Director
Keppel Energy

Chua Chee Wui
Chief Executive Ofﬁ cer / Director
Keppel Integrated Engineering

Investments

Koh Ban Heng
Chief Executive Ofﬁ cer
Singapore Petroleum Company

Steven Jay Green
Chairman / Chief Executive Ofﬁ cer
k1 Ventures

Karen Kooi
Acting Chief Executive Ofﬁ cer
Chief Financial Ofﬁ cer
MobileOne

Choo Chin Teck
Director (Corporate Services) 
and Group Company Secretary 
Keppel Land International

Lim Kei Hin
Chief Financial Ofﬁ cer 
Keppel Land International 

Tan Swee Yiow
Chief Executive Ofﬁ cer 
(Singapore Commercial) 
Keppel Land International; 
Chief Executive Ofﬁ cer / Director
K-REIT Asia Management

Augustine Tan
Chief Executive Ofﬁ cer 
(Singapore Residential)
Keppel Land International

Loh Chin Hua
Managing Director 
Alpha Investment Partners 

Goh Toh Sim
Chief Executive Ofﬁ cer 
Evergro Properties

Senior Management

35

 
Investor Relations

We are continually strengthening communications 
with our shareholders and the investing community.

Senior management engages the 
investing community through various 
platforms that include presentations and 
webcasts of Keppel’s quarterly results.

Keppel Corporation has a dedicated 
Investor Relations team supporting 
management in the effective 
communication with our stakeholders, 
including investors, analysts, fund 
managers and the media. Through 
regular communications, we aim to 
give our stakeholders balanced insights 
into the Group’s strategic directions, 
performance, key developments and 
plans for sustainable earnings growth.

We are guided by the principle of 
achieving best practices in corporate 
governance and disclosure. Clear, 
consistent and regular communication 

is a hallmark of our relationships with 
analysts and investors worldwide. 

Proactive Outreach
As part of our proactive outreach to our 
stakeholders, our Investor Relations 
team organises discussions and 
meetings between Keppel’s senior 
executives and institutional investors 
and analysts throughout the year. 

In 2008, we continued to see a strong level 
of interest among institutional investors 
on the progress and prospects of the 
Company. In all, we held 191 face-to-face 
investor meetings in Singapore alone.

36

Keppel Corporation Limited 
Report to Shareholders 2008

Through non-deal roadshows to the US, 
the UK, Europe and Hong Kong, our 
senior management met up with over 
70 institutional investors in 2008. This 
was instrumental in strengthening 
relationships with our long-term 
shareholders and sustain the strong 
interest among overseas fund managers.

To aid in the better understanding of 
our business units and operations, we 
facilitated meetings with management 
of key subsidiaries which included 
tours of the facilities. For example, 
investors from Scandinavia and 
the Asian region visited our yards 
in Singapore for insights into our 
rigbuilding operations and facilities.

During the year, we continued to 
invite investors and analysts to major 
corporate functions, ranging from 
vessel-naming ceremonies at our yards 
to arts and charity events sponsored 
by the Group. Such events presented 
excellent platforms for the investing 
community to interact with the senior 
executives of our business units.

Our management and Investor Relations 
team also engaged overseas funds 
through conference calls, enabling 
clariﬁ cation of issues and updates 
on our businesses.

In August 2008, to facilitate a better 
understanding among analysts of 
Keppel’s participation in the Sino-
Singapore Tianjin Eco-City project, a 
conference chaired by then Executive 
Chairman Mr Lim Chee Onn was held. 
About 40 analysts covering Keppel 
Corporation and Keppel Land attended 
and were given insights into this 10- to 
15-year project. 

With Offshore & Marine as one of 
our key businesses, we continued to 
identify opportunities to reach out to 
institutional investors with particular 
interest in this industry. This led to our 
second time participation in the Annual 
Oil & Offshore Conference, organised 
by Pareto Securities in Norway. Senior 
executives from Keppel Offshore & 

Fund managers and analysts visit our yards and the Keppel Seghers Ulu Pandan NEWater Plant 
to gain a better understanding of their operations.

Marine and the Investor Relations 
team communicated our competitive 
advantage at the conference, attended 
by over 1,400 personnel from the 
global ﬁ nancial community and leading 
oil and gas related companies.

Regular Communication
To reach more stakeholders in a timely 
and effective manner, we continued 
‘live’ webcasts of our quarterly results 
presentations on our performance and 
business outlook. These webcasts 
allow viewers from around the globe to 
post questions through the Internet for 
management to respond to in real time.

As Keppel continues to build sustainable 
businesses, we are committed to keep 
our communication channels accessible 
and information timely so as to serve the 
interests of the investing community. 

Market sensitive news is promptly posted 
on our website www.kepcorp.com, at 
the end or beginning of each market 
day, in addition to the Singapore 
Exchange website. Duty ofﬁ cers are 
readily accessible to take queries.

Focus on Shareholder Value
We are committed to deliver sustained 
value for all our shareholders through 
earnings growth.

In 2008, we continued to improve 
on our returns to shareholders. Our 
Return on Equity (ROE) increased from 
2007’s 21.8% to 22.4%. As part of our 
commitment to reward shareholders 

with earnings growth, we will be paying 
a ﬁ nal dividend of 21 cents per share, 
bringing total distribution for 2008 
to 35 cents. This is almost twice the 
2007 ordinary dividend of 19 cents per 
share. A special dividend of 45 cents 
per share was paid in 2007 as part of 
Keppel’s 40th anniversary celebrations. 

Recognition
Our proactive investor relations approach 
and commitment to corporate 
transparency was again recognised 
and rewarded by the investing 
community in 2008.

For the third consecutive year, Keppel 
won the coveted Golden Circle Award 
for being the best in transparency across 
all categories and overall winner in the 
Most Transparent Company category 
for multi-industry/conglomerate 
companies at the 9th Investors’ Choice 
Awards organised by the Securities 
Investors Association of Singapore (SIAS). 

Then Executive Chairman 
Mr Lim Chee Onn was named the 
Distinguished Honorary Member 
of SIAS, in recognition of his 
support for investor education.   

We were ranked ﬁ fth out of 463 
Singapore listed companies for 
excellence in ﬁ nancial information 
disclosures by The Business Times 
Corporate Transparency Index 
(May 2008).

Investor Relations

37

Awards and Accolades

The Group’s businesses are recognised and rewarded
for their excellence and achievements.

Business Excellence
•  Keppel FELS was conferred 

the MAXA 2008 Award by the 
Economic Development Board, 
McKinsey & Company and 
the Singapore-MIT Alliance, 
which recognises outstanding 
manufacturing innovation and 
operational excellence.

•  Keppel Shipyard won the Best 
Shiprepair Yard Award at the 
Lloyd’s List Asia Awards for the 
fourth year running.

•  Keppel Shipyard was the recipient 

of the Shipyard Award from 
Seatrade Asia Awards, which 
recognises improvements in the 
development, diversiﬁ cation and 
cost efﬁ ciency of a shipyard.
•  Keppel Logistics won the Best 

Retail Logistics Service Provider 
Award and Best Fast Moving 
Consumer Goods Award at 
the Frost & Sullivan ASEAN 
Transportation & Logistics Awards.
•  Singapore Petroleum Company was 
named the Energy Company of the 
Year (Gold Award) at the Energy 
Business Awards, Asia.

•  MobileOne bagged the Mobile 
Operator of the Year Award 
(Singapore) at the Asian 
MobileNews Awards 2008. 
•  Keppel Verolme was named one 
of The Netherlands’ 50 Best 
Managed Companies at the 
2008 Deloitte Gala Awards for its 
outstanding business practices 
and performance. 

•  Keppel Verolme is winner of the 
Golden Gazelle Award 2008 
conferred by Financieele Dagblad, 
a renowned Dutch ﬁ nancial 
newspaper, in the category of 
large companies with turnover 
of €30 million or more.

Mr Lim Chee Onn, Chairman of Keppel Corporation (third from right) with award recipients from 
Keppel Corporation, Keppel Land and SPC at the Securities Investors Association’s 9th Investors’ 
Choice Awards.

Corporate Governance 
and Transparency
Securities Investors 
Association of Singapore 
9th Investors’ Choice Awards
Keppel Corporation
•  Golden Circle Award, for being 
the best in transparency across 
all categories

•  Winner, Most Transparent 

Company Award (Multi-Industry / 
Conglomerate)

•  Second, Singapore Corporate 

Governance Award

Keppel Land
•  Runner-up, Most Transparent 
Company Award (Property)

Singapore Petroleum Company (SPC)
•  Third, Singapore Corporate 

Governance Award

Singapore Corporate Awards
Singapore Petroleum Company
•  Bronze Award, 

Best Managed Board

IR Magazine South East Asia 
Awards
Singapore Petroleum Company
•  Winner, Most Progress in Investor 

Relations Award

Asset Asian Awards 
Keppel Corporation
•  Second, Best in Corporate 
Governance (Singapore)

FinanceAsia Country Awards
Keppel Land 
•  Fourth, Best Corporate Governance
•  Fifth, Best Managed Company
•  Eighth, Best Investor Relations

Business Times Corporate 
Transparency Index 
(Issue 4 May 2008)
MobileOne, Keppel Land, Keppel 
Corporation and Keppel T&T were 
ranked second, third, ﬁ fth and 
10th respectively out of 463 
Singapore-listed companies for 
excellence in ﬁ nancial information 
disclosures. SPC and K-REIT Asia 
ranked 19th and 28th respectively.

38

Keppel Corporation Limited 
Report to Shareholders 2008

•  Keppel Offshore & Marine, Keppel 
FELS and Keppel Corporation 
were ranked sixth, 11th and 16th 
respectively in the Singapore 
International 100 Ranking, based 
on 2007 overseas revenue.
•  Keppel FELS and k1 Ventures 
received the Fastest Growing 
50 Certiﬁ cation for outstanding 
ﬁ nancial performance and 
consistent growth from the 
DP Information Group.

At the Euromoney Liquid Real Estate 
Awards, Keppel Land clinched 11 
awards comprising:
•  Best Ofﬁ ce / Business Developer 

in Singapore

•  Best Mixed-use Developer 

in Singapore

•  Best Ofﬁ ce / Business Developer 

in Vietnam

•  Best Retail / Shopping Developer 

in Vietnam

•  Best Mixed-use Developer in 

Vietnam

•  1st Runner-up for Best Developer 

in Singapore

•  1st Runner-up for Best Residential 

Developer in Singapore

•  1st Runner-up for Best Retail / 

Shopping Developer in Singapore
•  1st Runner-up for Best Developer 

(Overall) in Vietnam

•  1st Runner-up for Best Residential 

Developer in Vietnam

•  2nd Runner-up for Best Leisure / 
Hotel Development in Singapore

Keppel Land garnered recognition 
for its projects as follows:

Keppel Corporation together with SPC, M1 and Marina Bay Financial Centre were extolled at the 
Patron of the Arts Awards for their active involvement in the development of arts in Singapore.

Marina Bay Financial Centre
(Phase 1 – Commercial)
Singapore
Reﬂ ections at Keppel Bay, 
Singapore
The Estella, Ho Chi Minh City,
Vietnam
Awarded by Singapore’s Building
and Construction Authority
•  Green Mark Gold Award

Marina at Keppel Bay, Singapore
Awarded by Christoﬂ e Asia Boating
•  Best New Asian Marina / 
Yacht Club of the Year

Awarded by Marina Industries 
Association of Australia
•  Clean Marina Award, the ﬁ rst and 
only marina in Asia to have been 
awarded this status

Hotel Sedona Manado, 
Indonesia
Ranked by World Travel 
Awards 2008
• 

Indonesia’s Leading Resort

Corporate Citizenry
Keppel Corporation was bestowed 
the Patron of Heritage Award by 
the National Heritage Board for its 
signiﬁ cant contributions to enrich 
Singapore’s heritage.

Keppel Corporation was conferred 
the title of Distinguished Patron of the 
Arts at the Patron of the Arts Awards 
2008. MobileOne was also named the 
Distinguished Patron of the Arts, while 
SPC was named Friend of the Arts and 
Marina Bay Financial Centre Associate 
of the Arts.

Keppel Shipyard was presented 
the Distinguished Defence Partner 
Award for Employers at the Total 
Defence Awards for its support and 
contributions as a civil resource owner. 

Safety
One Rafﬂ es Quay won a safety 
award at the inaugural BCA Design & 
Engineering Excellence Awards 2008 
for successfully addressing the safety 
and technical challenges of developing 
its North and South Towers.

Awards and Accolades

39

One Rafﬂ es Quay, Singapore
Awarded by International Real 
Estate Federation (FIABCI)
•  Winner in the ofﬁ ce category 

Saigon Centre, Vietnam
Awarded by the President of the 
Socialist Republic of Vietnam
•  Medal of Labour Award

at the 17th Annual Prix d’Excellence 
Awards

Ocean Financial Centre, 
Singapore
Awarded by Singapore’s Building 
and Construction Authority
•  Green Mark Platinum Award

Sedona Suites Hanoi, Vietnam
Conferred by the Ministry of 
Planning and Investment and 
Vietnam News
•  Golden Dragon Award

Safety Excellence

Special Feature
Banding together for

Safety
Excellence

Keppel is moving closer to the goal of getting our people to embrace 
safety as our way of life. Our vision is to ensure that every worker 
goes home safely every day.

Board / Management Leadership

Positive 
Reinforcement

Leading Safety 
Indicators

Safety as a 
Line Function

Stakeholder 
Involvement

The Keppel Group Safety Logo embodies 
the Group’s inter-related set of values on safety 
where the individual elements of the inner core 
represent the ﬁ ve key safety principles while its 
outer strokes demonstrates its action plan.

Building on the Five Principles 

for Safety launched in 2007, 
the Keppel Group has been 
actively promoting individual 
and collective responsibility in ensuring 
workplace safety. 

In 2008, Keppel Corporation’s Board 
Safety Committee (BSC) launched the 
motto of “Safety Starts with Me” with a 
safety logo to unify and rally Keppelites 
behind the Group’s commitment 
to safety. 

Encouraged by the BSC, Safety 
Champions who are representatives of 
the key business units have introduced 
an increased number of initiatives. 
They also collated and analysed data 
on safety, identiﬁ ed speciﬁ c areas 
for improvement and shared lessons 
across the business units.

In all, the Board and management 
spent more time and effort in 2008 
to promote safety, up from 2007 and 
2006 when the BSC was ﬁ rst formed. 

Beyond that, a total of $17.5 million 
was expended to keep the Singapore 
yards, ofﬁ ces and plants safe and our 
people trained. This represents a 
25% increase over $14 million in 2007 
and a 70% increase over $10.6 million 
in 2006. 

Our overseas operations, with 49% 
of our total workforce invested a total 
of $21.4 million on improving safety 
in 2008. 

Towards an Accident-Free 
Environment
The mission to create an accident-free 
environment is challenging but fruitful. 
In 2008, the Keppel Group maintained 
a low Accident Frequency Rate (AFR) 
of 0.4 reportable cases for every million 
man-hours worked. In our overseas 
operations, the AFR went down to 
0.63 from 0.64 and the Accident 
Severity Rate (ASR) fell to 175 from 
255 the year before. 

40

Keppel Corporation Limited 
Report to Shareholders 2008

Special Feature
Banding Together for Safety Excellence

41

Safety Excellence

“Whether in Singapore or in 
Brazil, it is heartening to see our 
corporate safety policies being 
practised seamlessly across the 
yards! The emphasis, programmes 
and training are aimed at the 
same goal – protecting lives 
and safeguarding property.” 

Eduardo Nunez 
President, BrasFELS

Our ASR declined to 125 man-days 
lost from 143 in 2007. ASR refers to 
the number of industrial man-days 
lost to workplace accidents per million 
man-hours worked. 

Keppel Offshore & Marine (Keppel 
O&M), which accounts for 77% of 
our total workforce, maintained AFR 
at a low 0.37 matching its 2007 
achievement while its ASR improved 
markedly to 110 in 2008 from 187 
in 2007. These were attained amidst 
record levels of operational activities 
against the backdrop of a multi-
national, multi-cultural and multi-
language workforce in Singapore. 

Despite our best effort to improve 
safety, the Group suffered nine fatalities 
worldwide. We deeply regret the loss 
of these lives. Two of these accidents 
were not accounted for in the ASR 
statistics as one was a road accident 
outside the worksite in Qatar and the 
other was a medical case involving a 

Launching the Keppel Group’s “Safety Starts With Me” campaign are (from left to right) 
Mr Lim Chee Onn, Chairman of Keppel Corporation; Mr Gan Kim Yong, Acting Minister for 
Manpower; Mrs Lee Tsao Yuan, Keppel’s Board Safety Committee member; Mr Choo Chiau Beng, 
CEO of Keppel Corporation; and Mr Teo Soon Hoe, Group Finance Director of Keppel Corporation.  

42

Keppel Corporation Limited 
Report to Shareholders 2008

diver at Keppel Shipyard. The lessons 
from these tragic incidents were shared 
at the Group Safety Convention held 
in Singapore.

Safety Starts with Me 
The watch-phrase “Safety Starts 
with Me” was ﬁ rst introduced in 
Keppel Shipyard to promote individual 
and collective ownership of safety 
in 2007 as part of the yard’s drive 
to imbibe safety as a way of life. 

We were happy that the Singapore 
Government adopted this same phrase 
in April 2008 in a national safety 
campaign of which Keppel O&M was 
also a main sponsor. At the launch of 
this National Safety & Health Campaign 
2008 co-organised by the Workplace 
Safety & Health (WSH) Council and the 
Ministry of Manpower, Keppel O&M’s 
Singapore yards received the BizSAFE 
Partner Status from the WSH Council 
for continued efforts to elevate the 
safety capabilities of its subcontractors.

Later, the same watch-phrase was 
adopted by the Keppel Group on 
22 May 2008 in conjunction with 
the launch of Keppel Shipyard’s Safety 
Excellence 2010 programme graced 
by Acting Minister for Manpower 
Mr Gan Kim Yong. 

Since then, Keppel’s business units 
rallied behind the Group’s initiative by 
incorporating the logo and motto into 
their respective work environments such 
as using them on posters and helmets. 

This roll-out of safety solidarity was 
reinforced at the Group’s second Annual 
Safety Convention held on 16 September 
2008. Attended by Mr Lee Tzu Yang, 
Chairman of Singapore’s WSH Council, 
safety presentations and lessons from 
incidents that happened during the 
year were shared. 

At the Convention, Mr Lim Chee Onn, 
Chairman of Keppel Corporation, 
highlighted, “The real achievement and 
reward for us is when the determination 
to practise safety at work and at home 

is ingrained in every individual within 
the Group, as well as in our partners at 
work. To achieve this objective we shall 
ceaselessly champion the cause that 
being safe should be a way of life and 
not an afterthought.” 

To motivate safety innovation, 
Mr Lim initiated the Chairman’s 
Challenge Trophy, which was won 
by Keppel O&M for their outstanding 
initiatives and creative efforts to 
promote safe work practices.

Cultivating a Safety Culture 
For the ﬁ rst time, new employees were 
put through a safety initiation programme 
as part of the Group’s orientation 
programme on 6 October 2008. 

During the year, a broad spectrum of 
external consultants and experts were 
invited to educate and share lessons learnt 
and experiences of successful companies 
in promoting safety. These sessions were 
aimed at helping the different business 
units establish best practices that were 
suited to their businesses. 

Keppel’s Singapore Operations
Accident Frequency Rate
AFR (per million man-hours)

3.00

2.00

1.00

0.00

Jan
to Mar

Apr
to Jun

Jul
to Sep

Oct
to Dec

2008

2007

2006

Keppel’s Singapore Operations
Accident Severity Rate
ASR (per million man-hours)

600

400

200

0

Jan
to Mar

Apr
to Jun

Jul
to Sep

Oct
to Dec

2008

2007

2006

“The greatest risk to safety 
is carelessness and ignorance. 
My role is to ensure that I impart 
my knowledge of safety to my 
colleagues so that they make 
safety a top priority.”

Peggy Seah
EHS Ofﬁ cer, Keppel Seghers 
Engineering Singapore

AFR – Refers to the number of workplace accidents 
per million man-hours worked. Figures used are 
incident-based.

ASR – Refers to the number of industrial man-days 
lost to workplace accidents per million man-hours 
worked.

Keppel Batangas in The Philippines has 
a proud safety record of 12 million man-hours 
without lost time incidents (LTI) for all its 
offshore, shipbuilding, shiprepair and 
conversion projects for 2008.   

Special Feature
Banding Together for Safety Excellence

43

Safety Excellence

Throughout 2008, the Group continued 
to ensure that all Board Meetings in 
Keppel companies began with a review 
and discussion on safety matters. 

As the Group is involved in several 
businesses, the safety initiatives would 
have to be tailored to ﬁ t the diverse 
requirements. With their large and multi-
national workforce, the shipyards were 
encouraged by the BSC to lead the way 
in reaching out to all employees in a 
simple, systematic and focused way. 

With solid support of its customers 
as partners in safety, Keppel Shipyard 
launched its Safety Excellence 2010 
initiatives which mapped out speciﬁ c 
and attainable goals to be achieved 
by 2010. Their initiatives have also 
been adopted by Keppel Singmarine. 

The initiatives encompass schemes 
and programmes for the entire 
workforce including subcontract 
workers. A roll-out workshop was held 
to engage all its stakeholders. A Safety 
Best Practice Team was also set up 
to look into factors including tools and 
equipment that can help to improve 
safety of workers.

Within seven months of launching 
Safety Excellence 2010, Keppel 
Shipyard trained some 9,000 direct 
and subcontract workers in 
programmes such as the Safety 
Leadership Programme, the Safety 
Promoter Scheme and the WSH 
Ofﬁ cer Conversion Scholarship. 

Like Keppel Shipyard and Keppel 
Singmarine, Keppel FELS has been 
very proactive in the promotion of 
safety at the projects’ level. Each 
project has speciﬁ c initiatives, with 
clear goals to achieve. Rewards by 
customers were given to the individual 
project teams when they met their 
targets on time. During the year, they 
started the managers’ weekly Zone 
Health, Safety & Environment (HSE) 
walkabouts to look out for unsafe acts 
or conditions. The yard also held its 
Annual Safety Promotion Campaign 

in April 2008 focusing on hand and 
ﬁ nger injury prevention.

At Keppel Verolme in The Netherlands, 
six additional occupational health and 
safety ambassadors were appointed 
as role models to instill the importance 
of workplace safety in 2008. Keppel 
AmFELS in the United States (US) 
continued to maintain its good safety 
performance with its successful Safety 
Awareness Programme, a behavioural-
based safety management programme. 

During the year, Keppel Land 
organised its inaugural Consultants 
and Contractors Health & Safety 
(H&S) meeting to propagate the safety 
message as well as to reward those 
who achieved exemplary workplace 
safety standards. The Group’s property 
developer vigilantly ensured that its 

“On all our projects, we stress 
that safety can only be effective 
when everyone plays their part. 
By not taking short cuts and 
compromising on workplace 
safety, we help one another 
to be safe.”

Wayne Siek
Project Superintendent, 
Keppel FELS 

At Keppel Land’s Consultants and Contractors 
Health & Safety (H&S) Meeting, staff, 
consultants and contractors were recognised 
for their commitment to workplace safety. 

“It is a huge challenge to engage 
our workers who are from different 
nations and speak different 
languages to imbibe the safe
work mindset and practices, 
but it is worth it when our 
workers go back to their hostels 
and homes safe and sound.”

Wong Weng Ong
President, Shipbuilding and 
Marine Engineering Employees’ Union

contractors continued to comply with 
its H&S Management System. The 
Singapore Residential unit introduced 
the concept of a ‘safety circle’ to 
engage employees on workplace 
safety matters. In addition, training 
courses and seminars were regularly 
held to improve management and 
staff knowledge and skills in managing 
safety and health risks. 

Monthly safety audits by independent 
parties are conducted for its projects 
to identify risk areas at various 
stages of construction. In 2008, the 
independent safety audit programme 
for completed buildings was extended 
to overseas buildings, namely Saigon 
Centre (Ho Chi Minh City) and 
International Centre (Hanoi) in Vietnam, 
and Wisma BCA (Jakarta) in Indonesia.

At Keppel Integrated Engineering (KIE), 
an Environmental, Health and Safety (EHS) 
audit team was set up to conduct audits 
at sites and to ensure full compliance 
with in-house and regulatory EHS rules 
in 2008. The team has since audited 
projects in Singapore and Qatar. 

A safety promotion campaign was 
also organised to celebrate KIE’s 
achievement of one million accident-
free man-hours on its Kallang – Paya 
Lebar Expressway project. Over at its 
Keppel Seghers Ulu Pandan NEWater 
Plant, an emergency response exercise 
and audit was conducted by the 
Singapore Civil Defence Force (SCDF). 

44

Keppel Corporation Limited 
Report to Shareholders 2008

At KIE, safety and quality go hand-in-hand.

Daily walkabouts around the Keppel 
Merlimau Co-generation Plant are 
routine to Keppel Energy, with the 
goal of identifying unsafe behaviour 
or hazardous situations to prevent 
accidents. During the year, employees 
at the plant underwent a course in 
Assessment Training and Emergency 
Response. At the Ecuador’s 
Termoguayas Generation S.A. ﬂ oating 
power plant, an in-house training on 
incident investigation was conducted. 

At Keppel Logistics in Singapore, more 
than 800 employees beneﬁ ted from 
various safety training, conventions 
and seminars held in 2008. The 
courses include a risk management 
programme conducted by an external 
trainer from the Singapore Institution 
of Safety Ofﬁ cers.

the Safety & Health Award Recognition 
for Projects (SHARP) while Keppel 
Shipyard won ﬁ ve awards under the 
same category. 

Keppel Singmarine also won the Gold 
Award at the WSH Innovation Convention 
2008 for their project ‘Safe Stabiliser’.

A new WSH award category for 
exemplary supervisor HSE performance 
at the workplace recognised the 
contributions of Keppel Shipyard 
Supervisor, Mohd Babui Arman Khan, 
and Keppel Singmarine’s Shukumar 
Dey Nishi Kanta.

Apart from these awards, projects 
in the yard also received special 
commendations from clients on the 
excellent safety records achieved. 

Recognition and Reward
The WSH Award 2008 organised by the 
WSH Council and Ministry of Manpower 
saw Keppel Singmarine clinch the Silver 
Award, the only Singapore shipyard to do 
so. Keppel FELS won six awards under 

In the US, Keppel AmFELS was 
lauded by the ALMA Company 
(Workers Compensation Insurance) 
as the largest facility with the best 
safety programme and safety record 
within the insured group.

“I have learnt to be more proactive 
in taking preventive measures 
against unsafe work practices. 
In my role, I have the moral 
obligation and responsibility 
to ensure all my co-workers 
return safely to their families 
at the end of the day.”

James Jerrico Lim
Project Manager, Singapore 
Commercial Department, 
Keppel Land

Keppel Land introduced a safety 
recognition campaign for contractors 
whereby every hundred days or a 
hundred thousand man-hours worked 
without a lost time injury would be 
celebrated. Reﬂ ections at Keppel Bay 
celebrated its one million accident-free 
man-hours in December 2008.

Special Feature
Banding Together for Safety Excellence

45

Safety Excellence

In 2008, One Rafﬂ es Quay was 
bestowed a safety award by the 
Building and Construction Authority 
(BCA) at the inaugural BCA Design & 
Engineering Safety Excellence Awards 
2008 for successfully addressing the 
safety and technical challenges of 
developing its impressive twin towers.

“The best way to avoid injury 
is to make safety a way of life. 
So I always keep alert to stay 
safe and look out for my fellow 
colleagues.”

Seng Wely
Operations Technical Ofﬁ cer, 
Keppel Energy

1  As part of its Business Continuity 

Management (BCM), exercises simulating 
ﬁ re or terrorist attacks are held with the 
SCDF to ensure the yard is prepared for 
emergencies.

2  Keppel Land’s Kolkata ofﬁ ce encourages its 

contractors to participate actively in 
its safety programmes.

1

2

46

Keppel Corporation Limited 
Report to Shareholders 2008

Key Safety Programmes in 2008

Keppel FELS

•  Annual Safety Promotion Campaign 
•  Managers’ weekly zone HSE walkabouts
•  Joint emergency / BCM exercise with SCDF 
•  Safety Leadership Initiative on semisubmersible projects

Keppel Shipyard

•  Safety Excellence 2010 initiatives as part of the Safety Plus Programme
•  Safety workshops and forums 
•  Safety Best Practice Team

Keppel Land

•  Bi-monthly project site visits by management / Board Safety Committee  
•  Inaugural Consultants and Contractors Health & Safety meeting
•  Quarterly sharing of best safety practices by contractors
•  Joint safety exhibition with Tan Tock Seng Hospital

Keppel Integrated Engineering

•  Internal HSE audits on projects in Singapore and Qatar
•  Emergency response exercise and audit conducted by SCDF 
•  Safety promotion campaign

Keppel Energy

•  Inaugural Keppel Energy HSE Day 
•  Company Emergency Response Team (CERT) training, audit and 
  exercise with SCDF
•  Risk assessment training for power plant staff in Singapore
•  Regular online safety forum to exchange info and share experiences 
  between power plants

Keppel Telecommunications & Transportation

•  Introduction of the Safety Compliance System at Keppel Logistics
•  Daily safety checks on vehicles by Keppel Logistics Foshan (KLF)
•  Issuance of Safety Handbook “Knowledge of the Guangdong 
  Provincial Emergency” to all new KLF staff

Singapore Petroleum Company (SPC) / 
Singapore Reﬁ ning Company (SRC)

•  Two major exercises to test emergency response and crisis management 
  plan by SPC
•  Promote and sustain an Incident and Injury Free (IIF) safety culture among  
  employees and contractors
•  Process Safety Campaign on “Tank Fire Prevention”

Special Feature
Banding Together for Safety Excellence

47

Operating & Financial Review

The Keppel Group is in the Offshore & Marine, Property, Infrastructure and 
Investments businesses to deliver sustainable earnings growth. With total 
assets of $16.75 billion as at end 2008, the Keppel Group serves a global 
customer base through its business units strategically located in 35 countries.  

Some of the key factors inﬂ uencing our businesses are global and regional 
economic conditions, oil and gas exploration and production activities, 
real estate market, threats, currency ﬂ uctuations, capital ﬂ ows, interest rates, 
taxation and regulatory legislation. As the Group’s operations consist of 
providing a range of products and services to a broad spectrum of customers 
in many geographic locations, no one factor, in management’s opinion, 
determines the Group’s ﬁ nancial condition or the proﬁ tability of our operations. 

In this section on the operating and ﬁ nancial review, we seek to provide 
a strategic, market and business overview of the Keppel Group’s operations 
and ﬁ nancial performance. 

This chapter describes the key activities of our businesses and their impact on 
Keppel Group’s performance. It also discusses the challenges in our operating 
environment balancing short-term pressures and long-term strategies. 

This discussion and analysis is based on the Keppel Group’s consolidated 
ﬁ nancial statements as at 31 December 2008.

Contents
49  Group Structure
50  Management Discussion and Analysis
52  Offshore & Marine
64 
72 
80 
86  

Property
Infrastructure
Investments
Financial Review and Outlook

48

Keppel Corporation Limited 
Report to Shareholders 2008

Group Structure

Keppel Corporation Limited

Offshore & Marine
(cid:129) Offshore rig design, construction, 

repair and upgrading

(cid:129) Ship conversions and repair
(cid:129) Specialised shipbuilding

Property
(cid:129) Property development
(cid:129) Property fund management
(cid:129) Property trusts

Infrastructure
(cid:129) Environmental engineering
(cid:129) Power generation
(cid:129) Logistics
(cid:129) Data Centre & Networks

Investments
(cid:129) Oil and gas 
(cid:129) Investments
(cid:129) Telco

Keppel Offshore 
& Marine Limited

100%

70%

Keppel Bay Pte Ltd

100%

Environmental Engineering

Singapore Petroleum 
Company Ltd

45%

30%

Keppel FELS Limited

100%

Keppel Land Limited

53%

Keppel Integrated 
Engineering Ltd

100%

k1 Ventures Limited

36%

Keppel Shipyard Limited 100%

31%

K-REIT Asia

75%

44%

Keppel Singmarine
Pte Ltd

100%

Keppel Land 
International Limited

100%

Keppel Nantong Shipyard
Company Limited
China

100%

K-REIT Asia 
Management Limited

100%

Keppel Seghers 
Engineering 
Singapore Pte Ltd

100%

Keppel Seghers 
NEWater Development
Co Pte Ltd

100%

Keppel Seghers 
Belgium NV
Belgium

100%

MobileOne Ltd*

20%

*  Owned by Keppel
  Telecommunications  
  & Transportation Ltd, 
  an 80%-owned subsidiary 
  of the Company

Offshore Technology 
Development Pte Ltd

100%

Alpha Investment 
Partners Ltd

100%

Keppel FMO Pte Ltd

100%

Deepwater Technology
Group Pte Ltd

100%

Evergro Properties Ltd
Singapore/China

85%

Power Generation

Marine Technology
Development Pte Ltd

100%

Keppel Thai Properties  
Public Co Ltd 
Thailand

45%

Keppel Energy Pte Ltd 100%

Keppel AmFELS Inc
United States

100%

Keppel Philippines 
Properties Inc 
The Philippines

50%

29%

79%

Keppel Merlimau 
Cogen Pte Ltd

100%

Keppel Verolme BV
The Netherlands

100%

Keppel FELS Brasil SA
Brazil

100%

Keppel Norway AS
Norway

100%

96%

45%

33%

50%

Keppel Philippines
Marine Inc 
The Philippines

Caspian Shipyard
Company Ltd
Azerbaijan

Arab Heavy Industries
PJSC
UAE

Keppel Kazakhstan
LLP
Kazakhstan

Group Corporate 
Services

Keppel Electric Pte Ltd

100%

Keppel Gas Pte Ltd

100%

Logistics and Data Centre 
& Networks

Keppel 
Telecommunications
& Transportation Ltd

80%

Keppel Logistics 
Pte Ltd

100%

Keppel Logistics 
(Foshan) Ltd
China

70%

Control & 
Accounts

Corporate
Communications

Sustainable 
Development & 
Living Business

Corporate 
Development/Planning

Human 
Resources 

Information 
Technology 

Legal

Risk 
Management

Audit 

Tax

Treasury

The complete list of subsidiaries and signiﬁ cant associated companies is available on Keppel Corporation’s website www.kepcorp.com

Operating & Financial Review
Group Structure

49

Operating & Financial Review
Management Discussion and Analysis

Keppel achieved record results in 2008 despite 
the challenges and weakness in the global and 
domestic economy.

Key Performance Indicators
Revenue
Proﬁ t after Tax & Minority Interests (PATMI)
Exceptional items
Attributable proﬁ t after exceptional items
Operating cash ﬂ ow
Free cash ﬂ ow
Economic Value Added (EVA)
Earnings Per Share (EPS)
Return on Equity (ROE)
Total distribution per share to shareholders

Group Overview
Revenue increased 13% to $11,805 
million. Proﬁ t after tax and minority 
interests (PATMI) increased by 7% 
to reach a new high of $1,097 million. 
Notwithstanding the lower earnings 
growth in 2008, the compounded 
annual growth rate for PATMI from 
2003 to 2008 was 23%. Attributable 
proﬁ t after exceptional items was 
$1,098 million.

Earnings Per Share (EPS) of 69.0 cents 
were 4.1 cents above 2007’s and 
21.3 cents above 2006’s. EPS growth 
kept pace with PATMI growth. Return 
on Equity of 22.4% was a new record, 
and Economic Value Added of $692 
million was $88 million above that 
of the previous year.

2008 
$ million

08v07
% +/(-)

2007
$ million

07v06
% +/(-)

2006
$ million

11,805
1,097
1
1,098
2,047
1,876
692
69.0 cts
22.4%
35.0 cts

+13
+7
n.m.
-3
+21
+63
+15
+6
+3
-45

10,431
1,026
105
1,131
1,697
1,151
604
64.9 cts
21.8%
64.0 cts

+37
+37
n.m.
+51
-8
-22
+43
+36
+14
+129

7,601
751
–
751
1,854
1,480
423
47.7 cts
19.1%
28.0 cts

Revenue ($ million)

9
6
5
8

,

8
5
2
7

,

5
5
7

,

5

2
3
2
,
2

7
7
2
,
1

5
3
8
,
1

5
5
1
,
1

0
5
9

0
7
5

1
2
1

1
6

4
5

Operational cash ﬂ ow exceeded 
$2 billion in 2008. The Group utilised 
$563 million on investment and 

Offshore 
& Marine

Property

Infrastructure Investments

  2006 $7,601 million

2008 $11,805 million

  2007 $10,431 million

50

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
and 13 jackups on schedule to 
its customers. Property Division 
contributed $950 million, which was 
$885 million or 48% lower than the 
previous year’s, and accounted for 8% 
of Group revenue. The decline was due 
to the completion of several projects in 
Singapore and overseas in 2007, and 
lower revenue reported by property 
services and hotels. Infrastructure 
Division contributed $2,232 million, 
which was $955 million or 75% 
higher than the previous year’s, and 
accounted for 19% of Group revenue. 
The increase was due to revenue 
from the co-generation power plant 
in Singapore and the environmental 
Engineering, Procurement and 
Construction (EPC) contracts.

which was 25% lower than 2007’s 
due to lower proﬁ t recognition from 
Reﬂ ections at Keppel Bay and lower 
proﬁ t from Keppel Land as a result 
of lower sales and lower contributions 
from associated companies. 
Infrastructure Division contributed 
$63 million, which was 133% higher 
due mainly to the co-generation power 
plant and EPC contracts. Contribution 
from Investments was $172 million, 
which was $96 million or 36% lower 
than 2007’s. This was due mainly to 
lower contribution from Singapore 
Petroleum Company (SPC) and fair 
value losses of securities, partly offset 
by higher contribution from k1 Ventures 
and over provision of tax in respect 
of prior years.

Group PATMI of $1,097 million was 
$71 million or 7% higher than that of 
the previous year. Offshore & Marine 
Division accounted for $705 million, 
which was $183 million or 35% higher 
than 2007’s and remained the largest 
contributor to Group PATMI with 
its 64% share. Proﬁ t from Property 
Division accounted for $157 million, 

operational capital expenditure and 
received $392 million in investment 
income and divestment proceeds. 
As a result, free cash ﬂ ow for the 
year amounted to $1.8 billion.

With the strong performance, the 
Board proposed that shareholders 
be rewarded with total dividend of 
35 cents per share for 2008. This 
comprised a ﬁ nal dividend of 21 cents 
per share and the interim dividend of 
14 cents per share paid in August 
2008. In the previous year, the total 
dividend of 64 cents per share included 
a special dividend of 45 cents. The 
total payout for 2008 represented 
51% of Group PATMI.

Segment Operations
Group revenue of $11,805 million was 
$1,374 million or 13% higher than that 
of the previous year. Offshore & Marine 
Division contributed $8,569 million, 
which was $1,311 million or 18% 
higher than the previous year’s, and 
accounted for 72% of Group revenue. 
Major project completions included 
the delivery of three semisubmersibles 

PATMI ($ million)

5
0
7

2
2
5

8
4
4

8
6
2

2
4
2

2
7
1

9
0
2

7
5
1

6
9

3
6

7
2

)

5
3

(

Property

Infrastructure Investments

  2006 $751 million

2008 $1,097 million

  2007 $1,026 million

Offshore 
& Marine

Operating & Financial Review
Management Discussion and Analysis

51

 
 
 
 
 
 
 
 
 
 
 
 
Operating & Financial Review
Offshore & Marine

The Offshore & Marine Division aims to be the 
choice provider and solutions partner in its selected 
segments of the offshore and marine industry.

Earnings 
Highlights

Operating Proﬁ t ($ million)

2008

2007

2006

  570

539

$943m

Proﬁ t before Tax

$705m

PATMI

Earnings 
Highlights

Revenue

EBITDA

Operating proﬁ t

Proﬁ t before tax

PATMI

Manpower (number)

Manpower cost

ROE

Major 
Developments 
in 2008

Focus for 
2009/2010

(cid:129)  Delivered 49 projects on time 

(cid:129)  Deliver value through 

across rigbuilding, ship conversion 
and specialised shipbuilding

excellent project management 
and execution

(cid:129)  Secured $5.2 billion of contracts 

(cid:129)  Enhance Research & Development 

  837

with deliveries into 2012

(cid:129)  Keppel FELS became the ﬁ rst 
Singapore company to clinch 
the MAXA Award for outstanding 
innovation and world-class 
manufacturing standards

(cid:129)  Completed Asia’s ﬁ rst two 
icebreakers for the Arctic 

(cid:129)  Launched technical and 

specialised skills training centre

initiatives to strengthen group 
position as market leader in 
selected segments

(cid:129)  Explore opportunities in adjacent 
business areas and new markets

(cid:129)  Maximise and realise 

operational efﬁ ciencies

(cid:129)  Step up prudent cost management

(cid:129)  Focus on Health, Safety and 

the Environment

2008 
$ million

2007 
$ million

2006 
$ million

8,569

7,258

5,755

932

837

943

705

648

570

700

522

604

539

624

448

27,437

24,448

22,352

956

61% 

802

46%

660

50%

52

Keppel Corporation Limited 
Report to Shareholders 2008

Earnings Review
Offshore & Marine Division ended 2008 
with new orders of $5.2 billion and a 
healthy net orderbook of $10.8 billion 
with deliveries into 2012. The Division’s 
revenue of $8,569 million was 
$1,311 million or 18% higher than 
the previous year’s and accounted 
for 72% of Group revenue. Proﬁ t 
before tax of $943 million was 
$243 million or 35% higher than 2007, 
and $319 million more than 2006. 
Operating margins also improved. 
PATMI of $705 million was $183 million 

or 35% more than 2007, and $257 
million more than 2006. The Division 
remains the largest contributor, at 
64%, to the Group’s attributable 
earnings of $1,097 million.  

Market Review
2008 was a volatile year for the 
offshore and marine industry. Oil prices 
went from US$90 per barrel in January 
2008 to a peak of US$147 per barrel 
in July 2008. By December 2008, 
it had plummeted to a four-year low 
of US$34 per barrel.  

The drop in oil prices was mainly 
due to the US mortgage crisis, which 
eventually snowballed into a worldwide 
economic downturn by the end of 
the year leading to a drop in demand 
for energy. The Energy Information 
Administration (EIA) reported in 
January 2009 that it expects this year’s 

Brazilian President Luiz Inácio Lula da Silva 
(raising Brazil’s national ﬂ ag) and First Lady 
Marisa Leticia (on his right) with workers of 
Petrobras and Keppel FELS Brasil celebrating 
the christening of P-51.

Operating & Financial Review
Offshore & Marine

53

Operating & Financial Review
Offshore & Marine

global oil consumption to be lower than 
that of 2008, with a modest recovery 
expected in 2010.  

The tightening of credit lines exacerbated 
the impact of the downturn on the 
industry, culminating in some contract 
cancellations in the industry towards 
the end of 2008 and early 2009.  

However, the economic slowdown 
did not hamper the trend towards 
exploration in deeper waters, which 
continued in 2008. Deepwater 
exploration remained active in the 
‘Golden Triangle’ zone of Africa, 

the Gulf of Mexico and Brazil, and 
is expected to constitute up to 75% 
of all global deepwater expenditure 
over the next few years. Substantial 
investments will be required for 
these developments. 

During the year, major hydrocarbon 
discoveries were made, including 
the Guara, Jupiter and Iara ﬁ elds 
in Brazil. In the Gulf of Mexico, 
deepwater oil ﬁ nds included Gunﬂ int 
and Kodiak while discoveries have 
been announced in the Tsentralnaya 
structure in the Caspian Sea.  

Signiﬁ cant Events
(Expected deliveries indicated in brackets)

Mr Choo Chiau Beng, Chairman, Keppel Offshore & Marine, welcomes Mr K M Sheth, 
Executive Chairman of Great Eastern Shipping at the keel laying of jackup rig Greatdrill Chitra.

January
Keppel Shipyard was awarded 
a second contract valued at 
$145 million for the integration 
and completion of the Bully II 
drillship by a company jointly 
owned by Frontier Drilling Inc 
and Shell EP Offshore Ventures 
Limited. (2Q 2010)

February
Keppel Shipyard secured contracts 
worth over $215 million from 

Maersk Contractors and BW 
Offshore for FPSO conversions 
work. (3Q – end 2009)

March
PetroVietnam Drilling Investment 
Corp (PVD Invest) awarded 
Keppel FELS a contract to 
build its third jackup drilling 
rig worth US$205 million. 
(4Q 2009)

54

Keppel Corporation Limited 
Report to Shareholders 2008

While a number of oil and gas 
companies are revising their spending 
budgets downwards, major oil 
companies including BP, Chevron, 
ExxonMobil and Shell, as well as 
those with strong balance sheets 
have chosen to maintain their planned 
Exploration and Production (E&P) 
developments. National oil companies 
such as Petrobras and Petróleos 
Mexicanos (PEMEX) have also similarly 
announced that they will maintain their 
capital expenditure for E&P for the 
next ﬁ ve years.

As for the marine industry, shiprepair 
was buoyant in the ﬁ rst half year of 
2008 due mainly to the increase in 
shipping activities and the continued 
ﬂ eet expansion. The market softened 
in the last quarter following sharp 
declines in trade and shipping activities 
as a result of the global downturn. 

The ﬂ oating production market was 
steady throughout the year spurred by 
demand from new oilﬁ eld discoveries. 
However, the continued weakness in 
the credit market is expected to result 
in delays in some projects.   

The ﬁ rst three quarters of 2008 saw 
an unprecedented global orderbook 
of 600 offshore support vessels 
(OSV) of various types, due mainly 
to limited availability of vessels and 
high day rates. Towards the year end, 
the global ﬁ nancial meltdown with 
further uncertainties in the market 

Signiﬁ cant Events
(Expected deliveries indicated in brackets)

Built to the proprietary KFELS B Class jackup rig design, WilBoss was delivered ahead 
of schedule to Awilco Offshore without any lost time incidents during its construction.

May
Keppel FELS secured a contract 
to build a US$512 million ultra-
deepwater semi drilling rig from 
ENSCO International Incorporated 
(ENSCO). (2H 2011)

Keppel Singmarine clinched a 
$141 million contract from Global 
Offshore International Ltd (Global 
Offshore) to build a derrick pipelay 
vessel. (2Q 2011) 

Keppel FELS secured a 
US$385 million repeat order 
to build a semi drilling rig for 
Brazilian drilling contractor 
group Queiroz Galvão Óleo e 
Gás (QGOG). (2H 2011)

Keppel FELS won a US$420 million 
contract to build two jackup drilling 
rigs for Seadrill Limited (Seadrill). 
(3Q – 4Q 2010)

June
Keppel FELS won a contract 
to build ENSCO’s sixth ultra-
deepwater semi drilling rig worth 
US$537 million. (2H 2012)

Keppel FELS secured a 
US$160 million contract to build 
a repeat semisubmersible drilling 
tender (SSDT) for Seadrill Asia 
Limited (Seadrill Asia). (1Q 2011)

outlook resulted in a decline in orders 
and charter rates as well as some 
cancellations.

Operating Review
Against the backdrop of a global 
economic crisis, some of Keppel 
O&M’s customers were affected by the 
sudden credit squeeze. This resulted in 
two cancellations and a re-scheduling 
of payments with one customer. During 
the year, Keppel Verolme ceased work 
on a Multi Purpose Unit Heavy Lifter 
when the owner became bankrupt. 

Despite the challenges faced by the 
industry, Keppel Offshore & Marine 
(Keppel O&M) had a good run in 2008. 
Its global network of 20 yards delivered 
a total of 49 projects on time, up from 
41 projects a year earlier. Return on 
Equity improved from 46% in 2007 to 
61% in 2008. All segments of the group 
– offshore, marine and specialised 
shipbuilding – posted improved net 
proﬁ ts, with Keppel Shipyard once 
again performing especially well.

Contracts secured for the year 
amounted to $5.2 billion, comprising 
three jackups, ﬁ ve semisubmersibles 
(semi), 17 FPSO-related conversions, 
outﬁ tting, repair and upgrade projects, 
and 12 offshore support and other 
specialised vessels.

Capital expenditure for the year was 
a prudent $270 million, mainly to 
accommodate existing orders and 
prepare for future commitments. 

Offshore
Keppel FELS continued to be busy 
in 2008, and handled close to 
30 projects in various stages of 
completions. In addition, it secured 
eight newbuilding contracts during 
the year, of which three were jackups 
and ﬁ ve were semis. Keppel FELS’ 
proprietary designs continued to 

The fast-track conversion of the FPSO BW 
Cidade De Sao Vicente for BW Offshore 
by Keppel Shipyard has achieved 700,000 
man-hours without lost time incidents.

Operating & Financial Review
Offshore & Marine

55

Operating & Financial Review
Offshore & Marine

Signiﬁ cant Events
(Expected deliveries indicated in brackets)

Mr Lim Boon Heng (centre), Minister, Singapore Prime Minister’s Ofﬁ ce, graced the 
naming ceremony of deepwater drilling rig Maersk Developer.

July
Keppel Singmarine secured 
a $181 million contract to build 
a multi-purpose heavylift / pipelay 
vessel for Romanian drilling 
contractor, Grup Servicii 
Petroliere SA (GSP). (3Q 2011)

Keppel Shipyard won contracts 
amounting to $110 million for 
the upgrading, modiﬁ cation and 
conversion of three vessels from 
repeat customers Bumi Armada 
Berhad, Boskalis Westminster 
Shipping B.V. (Boskalis) and BW 
Offshore. (end 2008 – 1H 2009) 

August
Keppel FELS was awarded 
a contract to build the seventh 
ENSCO 8500 Series® deepwater 
semi worth US$560 million. 
(2H 2012) 

October
Keppel Shipyard secured two 
conversion projects worth 
$150 million from Single Buoy 
Moorings Inc (SBM) and Golar 
LNG. (2Q – 4Q 2009)

November
The P-51 FPU was delivered to 
Petrobras Netherlands BV (PNBV).

December
Keppel O&M clinched contracts 
worth $200 million that include 
a FPSO conversion by Keppel 
Shipyard for SBM, the building 
of two AHTS by Keppel Singmarine 
for Seaways International Pte 
Ltd and the construction of three 
tugboats at Keppel Cebu Shipyard. 
(1Q 2010 – 1H 2011)

56

Keppel Corporation Limited 
Report to Shareholders 2008

appeal to its customers, with all the 
three new jackup orders being the 
KFELS B Class jackup and one semi 
being the DSS38 design. Of the nine 
jackups and two semis which Keppel 
FELS delivered during the year, eight 
were its own proprietary designs. 
All were completed on time and 
within budget. For its manufacturing 
excellence, Keppel FELS became 
the ﬁ rst Singapore company to be 
awarded the prestigious MAXA 
Award conferred by the Singapore 
Economic Development Board, 
McKinsey & Company and the 
Singapore-MIT Alliance. 

For the overseas yards, 2008 was 
both a rewarding and challenging year. 
Keppel AmFELS successfully delivered 
four new jackups and three repair jobs, 
while Keppel FELS Brasil completed 
the P-51 ﬂ oating production unit (FPU) 
for Petrobras. The unit has begun to 
produce oil for the Brazilian national oil 
company in January 2009.  

In the Netherlands, Keppel Verolme 
achieved a revenue increase of 
11% in 2008, with the bulk coming from 
its offshore work. Caspian Shipyard 
and Keppel Kazakhstan continued 
to service Agip KCO with various 
fabrication jobs. During the year, both 
yards expanded their capacities in 
anticipation of increased customers’ 
requirements in the Caspian region. 

Marine
In 2008, Keppel Shipyard completed 
a total of eight FPSO/FSO/FSRU 
conversions and one drillship 
upgrading, with work-in-progress on 
another eight conversions and ﬁ ve 
other major projects. Seven of these 
work-in-progress vessels are due for 
the deepwater regions of West Africa 
and Brazil. The higher level of activities 
contributed to a 14% increase in 
revenue, with more than half the 
revenue from conversion projects. 
Revenue from shiprepair activities 
increased 8%, with improvements 
in revenue per vessel. 

Keppel Philippines Marine comprising 
Keppel Batangas, Keppel Cebu and 
Subic Shipyard, posted good revenue 
and earnings growth in 2008. An 18% 
increase in revenue was achieved 
with 56% of the total revenue from 
shipbuilding and offshore fabrication 
projects. Arab Heavy Industries 
continued to improve its productivity, 
repairing a total of 318 ships, up 
17% from the previous year.  

Specialised Shipbuilding
Keppel Singmarine had a rewarding 
year in 2008, achieving revenue growth 
of 9%. During the year, it delivered 
ﬁ ve vessels, two jackup hulls and two 
icebreakers, Asia’s ﬁ rst, to LUKOIL-
Kaliningradmorneft. Its burgeoning 
orderbook includes contracts from 
customers such as Global Offshore 
International, Romanian drilling 
contractor Grup Servicii Petroliere 
SA and Seaways International Pte Ltd.

completed and delivered six vessels 
in 2008. It expects to deliver seven 
vessels in 2009. 

Industry Outlook
Fundamentally, the prospects for 
global offshore E&P activities are 
sound. With underinvestment in the 
last two decades prior to 2005, the 
decline in reserves of existing ﬁ elds 
remains a major challenge. Hence 
continued investment in the sector is 
vital in order to avoid another supply 
crunch and price spike when the 
global economy recovers. 

However, the ongoing credit squeeze 
and the global economic downturn 
are expected to result in a slowdown 
in new orders for offshore drilling and 
production rigs for 2009. Smaller 
independent oil companies and 
marginal ﬁ eld developments are more 
likely to cut back their exploration efforts 
and review their development plans. 

Keppel Nantong Shipyard is on track 
to become an established builder of 
tugboats and OSVs. It has successfully 

Despite the downturn, energy demand 
is expected to grow over the mid- 

1

1  The Offshore Courageous is an ultra 
premium jackup drilling rig built by 
Keppel AmFELS in Brownsville, Texas 
for Scorpion Offshore.

2  Keppel Singmarine completed Asia’s ﬁ rst 
two icebreakers meant for the Arctic sea, 
Varandey and Toboy, for Russian client 
LUKOIL-Kaliningradmorneft in 2008.

2

Operating & Financial Review
Offshore & Marine

57

Operating & Financial Review
Offshore & Marine

to long-term. International Energy 
Agency’s (IEA) energy outlook report 
released in November 2008 forecasted 
that oil demand will grow from the 
current 85 million barrels per day (bpd) 
to 106 million bpd in 2030, largely 
driven by emerging economies such as 
China, India and the Middle East. IEA 
indicated that a total of US$26 trillion 
of investment is needed to meet the 
2030 demand. This is equivalent to 
about US$1 trillion per year. 

Brazil
With a proven reserve of 11 billion 
barrels and potential growth of up 
to 100 billion barrels of new reserves, 
Brazil offers an attractive market for 
future projects. Its state-owned oil 
company, Petrobras, announced in 
early 2009 that it would invest 
US$92 billion in E&P in Brazilian 
waters from 2009 to 2013, which 
is US$26.9 billion more than its 
2008 to 2012 plan.  

With increasing depletion of oil reserves 
in onshore and shallow water oilﬁ elds, 
oil services companies are increasingly 
tapping oil reserves in offshore 
deepwater, harsh environment as well 
as other unconventional sources such 
as tar sands and oil shales. Currently, 
15% of total offshore oil production 
is carried out in deepwaters, but this 
is expected to rise to over 20% in the 
next few years.  

To help meet its E&P plan, Petrobras is 
contracting six production rigs in 2009, 
and there are plans to invite bids for 
the construction of an additional eight 
units to be carried out in a drydock in 
Southern Brazil. It is also expecting 
to invite bids from within Brazil for the 
construction of 28 ultra deepwater 
drilling rigs in 2009, which are part 
of the 40 rigs it intends to commission 
in the next few years. 

Keppel Verolme BV in the Netherlands has 
secured a contract from Prosafe Rigs Pte 
Limited for the refurbishment and outﬁ tting 
works on MSV Regalia, a semisubmersible 
service vessel.

58

Keppel Corporation Limited 
Report to Shareholders 2008

Keppel FELS continues to be active in 2009 
with the scheduled delivery of 14 rigs.

Keppel O&M, through Keppel FELS 
Brasil, will continue to strengthen 
its current leadership position in the 
Brazilian offshore industry to meet the 
expanded requirements of Petrobras 
and to tap the full potential of the 
Brazilian market.

Gulf of Mexico
According to a study by Douglas 
Westwood, the deepwater sector 
is expected to continue to attract 
investments worldwide averaging 
US$27 billion annually through 2013, 
with the Gulf of Mexico accounting 
for a large part of these investments. 

Mexico’s PEMEX is focusing on 
ramping up existing offshore ﬁ elds in 
shallower waters. With its track record 
of building, repairing and refurbishing 
jackup rigs for PEMEX, Keppel AmFELS 
is well placed to service the Mexican 

market. It will also continue to focus 
on repairs and refurbishments of rigs 
in the larger Gulf of Mexico region. 
It will also target SPAR and TLP hulls 
construction for longer term base 
workloads in partnership with FloaTEC, 
the joint venture company of its parent 
Keppel O&M and JR McDermott.  

West Africa
Africa is responsible for about 12% 
of global oil production and will 
continue to play a major role in 
contributing to meet the world’s oil 
demand. The main challenges facing 
the region lie in the areas of security 
and availability of funds in developing 
the projects. The global credit crunch 
and unpredictable oil prices are also 
making it more difﬁ cult to justify 
major projects. Looking ahead, the 
industry expects much of Africa’s oil 
to be located in deepwater and the 

Operating & Financial Review
Offshore & Marine

59

Operating & Financial Review
Offshore & Marine

Al-Zubarah is the second KFELS B Class 
jackup rig that Keppel FELS has completed 
for Gulf Drilling International and destined 
for Doha, Qatar.

60

Keppel Corporation Limited 
Report to Shareholders 2008

Deepwater CAPEX (future deepwater investment of US$137b from 2009 to 2013)

Expenditure ($ billion)

35

30

25

20

15

10

5

0

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Source: Douglas Westwood

Africa

Asia

Australasia

Latin
America

Others

North
America

Western
Europe

production of these offshore ﬁ elds will 
be vital in maintaining non-OPEC oil 
supplies. This augurs well for Keppel 
O&M which has a complete suite of 
rig solutions for deepwater E&P as 
well as a leadership position in the 
conversion of FPSO and FSO units.

Caspian Sea
Countries surrounding the Caspian 
Sea are generally stable, which 
gives opportunities for Keppel O&M, 
through Caspian Shipyard and Keppel 

Kazakhstan, to continue to explore 
new markets, such as the undeveloped 
ﬁ elds in Turkmenistan waters and the 
Russian sector of North Caspian.  

Our yards are collaborating to meet 
customers’ requirements in this 
region. Projects being pursued 
include the cantilever barge rigs 
for ExxonMobil Kazakhstan Inc 
and BP’s Shah Deniz Stage 2 
(Living Quarters and 
Subsea Manifolds).  

1  Singapore Minister for Finance Mr Tharman 
Shanmugaratnam was the Guest-of-Honour 
at the naming ceremony of Discovery 1, 
constructed for a joint venture of India’s 
Jindal Drilling & Industries Ltd.

2  The FPSO Espirito Santo, capable of 

processing 100,000 barrels of oil per day, 
was delivered by Keppel Shipyard to SBM 
Offshore in late 2008.

1

2

Operating & Financial Review
Offshore & Marine

61

Operating & Financial Review
Offshore & Marine

Fleet Utilisation for deepwater drilling rigs remains high

Day Rate Index 
1250

1000

750

500

250

0

   Fleet Utilisation
100%

80%

60%

40%

20%

0%

Jan 06 – 
Jul 06

Jul 06 –
Jan 07

Jan 07 – 
Jul 07

Jul 07 – 
Jan 08

Jan 08 – 
Jul 08

Jul 08 – 
Jan 09

Day Rate Index

  Fleet % Utilisation

Source: ODS Petrodata

Worldwide Competitive 5,001 + Floating Rig Day Rate Index
= 100
1994  
Current Month (January 2009) = 969

Drilling Rigs, Production Units, 
Specialised Ships
In the jackup rig sector, the Middle East 
region and Caspian Sea are expected 
to provide some support amidst a 
softening in demand for newbuilds 
as a result of the ongoing economic 
downturn and falling oil prices. The 
requirements for repair and upgrade 
are likely to increase.  

Demand for deepwater rigs continues 
to remain strong, with an effective 
100% utilisation rate. Close to full 
utilisation for this category is expected 
in the near term.  

E&P companies generally have a 
long-term horizon for deepwater 
projects and are adaptable to a wider 
range of oil price movement. With the 
declining costs of raw materials such 
as steel and labour, project economics 
are expected to improve. Hence, 
the next few years should present 
opportunities for E&P companies 
with strong balance sheets. 

Floating Production Systems (FPS) such 
as SPARs, TLPs, semisubmersibles 
and FPSOs are expected to make up 
the bulk of offshore production units, 

with FPSOs accounting for about 
60% market share. While Brazil and 
West Africa continue to be the main 
destinations for FPSOs, demand is also 
rising in other areas such as Northern 
Europe and Southeast Asia. 

The specialised shipbuilding market 
has evolved to meet the offshore 
industry’s demand for more specialised 
vessels for deepwater and harsh 
environment exploration. Modern OSVs 
and Anchor Handling Tugs (AHTS) have 
the main roles of supporting drilling 
activities, transporting key supplies 
and responding to emergency calls. 
Harsher operating conditions like those 
in the Arctic and North Sea require 
vessels to be equipped with increased 
cargo capacity, larger accommodation 
areas, heavy lift cranes and advanced 
Dynamic Positioning (DP) systems for 
superior stationing. This segment is 
expected to remain as a key pillar of 
support for offshore drilling.  

Other specialised vessels such as 
seismic vessels, pipelay vessels and 
construction vessels should see 
continued demand in view of ageing 
ﬂ eets and more stringent requirements 
for newer and more capable vessels.

62

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
Keppel FELS delivered the ENSCO 8500, the ﬁ rst rig in the ﬂ eet of seven new ENSCO 8500 Series® 
semisubmersibles it is constructing for ENSCO International Incorporated.

Meeting the Challenges
With a strong orderbook of close 
to $11 billion and deliveries into 
2012, Keppel’s O&M Division is 
in a good position to ride out the 
current downturn. The Division, led 
by Keppel O&M, is committed to 
emerge more competitive and to 
prepare for the market’s recovery. 

To meet increasing competition for the 
limited number of new projects in the 
market, Keppel O&M will harness its 
“Near Market, Near Customer” strategy 
to offer customers good value and 
innovative solutions. 

It is also strengthening its core 
competencies while managing 
costs so as to meet the steady 

demand for repair, upgrade and 
maintenance of rigs. 

Keppel O&M will continue to foster 
close partnerships with subcontractors 
and suppliers to deliver its products 
and services on time, within budget 
and without incidents. With its 
strong balance sheet, it will also 
explore opportunities to expand its 
geographical reach and capabilities 
to better serve customers.  

Technology and workforce 
development are two key areas 
of focus for the future. It will continue 
to invest and build up its technology 
capability as it positions itself as the 
preferred solutions provider for the 
global offshore and marine industry.

Operating & Financial Review
Offshore & Marine

63

Operating & Financial Review
Property

Keppel Land aims to be a leading property 
developer in Asia and a premier manager 
of property funds.

Earnings 
Highlights

Operating Proﬁ t ($ million)

2008

2007

2006

  326

  440

235

$365m

Proﬁ t before Tax

$157m

PATMI

Major 
Developments 
in 2008

Focus for 
2009/2010

(cid:129)  Marina Bay Financial Centre 

(cid:129)  Contribute to development of 

(MBFC) Phases 1 and 2 achieved 
overall pre-commitments of 
66% and 55% respectively 
ahead of scheduled completions 
in 2010 and 2012

(cid:129)  Total assets under management 
(AUM) by the fund management 
business increased by about 60% 
to about $9.8 billion

(cid:129)  Alpha Investment Partners (Alpha) 
raised US$1.2 billion equity for a
new Alpha Asia Macro Trends Fund

(cid:129)  Green Mark awards for Ocean 
Financial Centre (Platinum), 
The Estella (Gold), MBFC 
(Phase 1 – Commercial) (Gold) and 
Reﬂ ections at Keppel Bay (Gold)

the New Downtown with MBFC 
and Ocean Financial Centre, 
and the waterfront precinct 
with Reﬂ ections at Keppel Bay

(cid:129)  Selectively pursue township, 

lifestyle and sustainable 
developments in Asia

(cid:129)  With funds from its rights issue, 
Evergro Properties is ready to 
participate in any early recovery 
in China

(cid:129)  Grow fund management income 
through K-REIT Asia and Alpha

(cid:129)  K-REIT Asia and Alpha to 

selectively acquire new assets

(cid:129)  Further develop green expertise 
through involvement in Tianjin 
Eco-City

Earnings 
Highlights

Revenue

EBITDA

Operating proﬁ t

Proﬁ t before tax

PATMI

Manpower (number)

Manpower cost

2008 
$ million

2007 
$ million

2006 
$ million

950

337

326

365

157

2,955

89

1,835

1,155

453

440

471

209

2,918

90

251

235

233

96

2,674

63

64

Keppel Corporation Limited 
Report to Shareholders 2008

Earnings Review
Revenue of $950 million was 
$885 million or 48% lower due to the 
completion of several trading projects in 
Singapore and overseas in the previous 
year. Earnings were affected by the 
weak macro-economic conditions. 
Pre-tax proﬁ t of $365 million was lower 
than the previous year due to slower 
sales of residential properties and 
lower contributions from associated 
companies. This was partly offset by 
higher proﬁ t from investment properties 
and higher fund management fees. 

The Division contributed 14% to the 
Group’s overall PATMI.

Market Review
With the unprecedented global 
economic crisis still running its course, 
Asia has been seriously affected 
as external demand slows, liquidity 
tightens and market conﬁ dence wanes.

Singapore entered into recession 
after its economy contracted in the last 
two quarters of 2008. For the full year, 
the economy registered GDP growth 

Keppel Bay is set to put Singapore on the world’s prime 
real estate map as a truly world-class waterfront precinct.

of 1.2%, substantially lower than 
the 7.7% growth of 2007. Residential 
property sales slowed as market 
conditions softened. New home sales 
fell to 4,264 units compared with the 
bumper 14,811 units in 2007. Private 
residential prices also declined by 
4.7% during the year.

Demand for ofﬁ ce space declined 
as ﬁ nancial markets worldwide took 
a turbulent ride. Ofﬁ ce occupancy in 
the Central Business District dipped 
to 95.4% in the fourth quarter of 2008 
from 97.6% a year ago; demand was 
a negative 0.37 million square feet (sf), 
when full-year ofﬁ ce take-up softened 
to 0.19 million sf, signiﬁ cantly lower 
than the 15-year historical average 
annual take-up of about 1.5 million sf 
from 1994 to 2008. Average Grade A 
and prime ofﬁ ce rents fell to 
$15 per square foot (psf) and 
$12.90 psf respectively in the fourth 
quarter of 2008, down from $17.15 psf 
and $15 psf respectively in the same 
period in 2007.

Demand for residential homes across 
key Asian markets was also dampened 
by weak sentiments and market 
uncertainties arising from the global 
economic turmoil. In addition, the 
liquidity crunch hampered developers 
and home buyers seeking ﬁ nancing, 
resulting in lower transacted volume 
of residential sales and home prices.

China’s economic growth slowed 
to 6.8% in the last quarter of 2008, 
dragging down full-year growth to a 
seven-year low of 9% as the country 
felt the impact of the global ﬁ nancial 
crisis. Recognising that the property 
sector is a key component of the 
economy, the Chinese government 
introduced various measures, 
including smaller down payments, 
lower mortgage rates, tax incentives 
and easing of rules on home sales, 
to encourage home purchases.

Vietnam’s economy moderated to 
6.2% in 2008, compared with 8.5% 
for 2007. Uncertainties, high mortgage 

Operating & Financial Review
Property

65

Operating & Financial Review
Property

Signiﬁ cant Events

K-REIT Asia’s properties are well-managed and their facilities meet tenant requirements.

January
Keppel Bay Bridge, an icon of 
Singapore’s southern waterfront, 
was named and opened by His 
Excellency S R Nathan, President 
of the Republic of Singapore.

Marina at Keppel Bay premiered 
with a grand opening by Senior 
Minister Mr Goh Chok Tong, as 
the Clipper ﬂ eet on the 2007–08 
Round the World Yacht Race 
sailed into Keppel Bay.

Keppel Corporation signed 
a Memorandum of Understanding 
(MOU) with the Qatar Investment 
Authority to participate as an equity 
investor in the Sino-Singapore 
Tianjin Eco-City project.

March
Keppel Land obtained the 
investment certiﬁ cate for a 
prime waterfront residential 
development in Ho Chi Minh 
City’s District 7.

April
Keppel Land entered into a joint 
venture with Sunsea Yacht Club 
(HK) Company Limited to develop 
its ﬁ rst integrated residential-cum-
marina lifestyle development on 
a 82-ha land site in Zhongshan, 
Guangdong Province of China. 

May
K-REIT Asia’s rights issue was 
successfully completed, raising 
gross proceeds of $551.7 million 
to partly reﬁ nance a bridging 
loan, which had been used for its 
acquisition of a one-third interest 
in One Rafﬂ es Quay.

June
Keppel Land acquired another 
154 mu (about 10 ha) site in 
Shenyang’s Shenbei New District, 
which when combined with the 
adjacent site of 353 mu (about 
24 ha) acquired earlier in August 
2007, will house an integrated 
township development.

66

Keppel Corporation Limited 
Report to Shareholders 2008

rates and the effects of a weak stock 
market caused home sales and prices to 
decline. The government’s move to lower 
interest rates and its VND250 trillion plan 
to develop affordable housing will help 
to stabilise the market. The housing 
market is expected to hold up well in 
the medium- to long-term, underpinned 
by strong domestic fundamentals 
including favourable demographics 
and rising urbanisation.

In India, transaction volumes and 
prices declined in 2008 as demand 
from end-users and investors softened. 
The market is expected to see further 
price weakening in the short term 
until market conditions and consumer 
conﬁ dence improve.

Demand for township homes in 
Jakarta, Indonesia is expected to 
slow down in tandem with a weaker 
economic environment. The Indonesian 
government has warned that 2009 may 
see its economy growing at its slowest 
pace since 2002. Growth is projected to 
slow from 6.1% in 2008 to 4% in 2009.

Operating Review
Singapore
Keppel Land sold fewer homes in 2008 
given the difﬁ cult market conditions. 
Sales launches of its projects including 
Marina Bay Suites were held back as 
a result of weak buying sentiments. 
Keppel Land will continue to monitor 
the market and selectively launch its 
projects when appropriate.

Keppel Bay remains Keppel Land’s 
key residential development in the 
pipeline. Reﬂ ections at Keppel Bay, 
the landmark designed by Daniel 
Libeskind, is the second residential 
project in the exclusive waterfront 
precinct. The 1,129-unit premier 
development has since sold more than 
630 units. Park Inﬁ nia at Wee Nam, 
a 486-unit condominium development 
in the Newton area, was completed in 
2008 with about 96% sold.

Marina Bay Financial Centre (MBFC), 
a new Grade A commercial development 

in the New Downtown which is jointly 
developed by Keppel Land, Cheung 
Kong (Holdings) and Hongkong Land, 
has secured strong pre-commitments 
of 66% and 55% for Phases 1 and 2 
respectively, ahead of their scheduled 
completions in 2010 and 2012.

Construction of Ocean Financial 
Centre, a fourth-generation ofﬁ ce 
building on the site of the former 
Ocean Building at Rafﬂ es Place, 
is progressing. The 43-storey ofﬁ ce 
development is expected to be 
completed in 2011.

Overseas
Development of the ﬁ rst 4-sq km 
site in the 30-sq km bilateral Sino-
Singapore Tianjin Eco-City project 
is making progress. Envisioned to 
be a sustainable and economically 
vibrant urban living environment, 
the Tianjin Eco-City enjoys high-level 
support, with Chinese Premier 
Mr Wen Jiabao and Singapore’s Senior 

1

1  Keppel Land’s Elita Garden Vista in Kolkata is targeted at the upper middle-income segment 

comprising professionals and managers, catering to the communities of nearby IT parks.

2  MBFC is the centrepiece of the Singapore Government’s plans to position the country 

as a global ﬁ nancial and business hub.

2

Operating & Financial Review
Property

67

Operating & Financial Review
Property

1

2

1  Keppel Land’s ﬁ rst integrated residential-

and-marina lifestyle development in China 
is in Zhongshan, in the afﬂ uent Pearl River 
Delta region.

2  The Estella is Keppel Land’s 1,393-unit 
luxury residential development near the 
heart of Ho Chi Minh City.

Minister Mr Goh Chok Tong ofﬁ ciating 
at its groundbreaking ceremony in 
September 2008. 

Construction of the infrastructure by 
the Eco-City Administrative Committee, 
formed by the Chinese government, 
is moving according to schedule. The 
50/50 joint venture (JV) company 
between the Keppel Group and its 
Chinese consortium partner, Sino-
Singapore Tianjin Eco-City Investment 
and Development Co Ltd, signed 
up its ﬁ rst international investor, 
Sembawang Engineers & Constructors 
Pte Ltd (Sembawang). Sembawang is 
working on a feasibility study for the 
development of a US$1 billion solar 
polysilicon production plant in the 
northern tip of the Tianjin Eco-City.

Keppel and the Chinese consortium 
have committed to develop more 
than 60 ha of land in the ﬁ rst 
4-sq km site. Keppel Land, a member 
of the Singapore Consortium, has 
been appointed the development 
manager for the Keppel Group. 
The Qatar Investment Authority had 
earlier signed an MOU with Keppel 
to be an equity partner in the 
Singapore Consortium.

Keppel Land saw lower home sales 
across major markets compared with 
the previous year. Market sentiments 
turned cautious as potential home 
buyers defer home purchases until 
market visibility improves.

During the year, Keppel Land made 
selective land acquisitions for lifestyle 
and residential township developments 
in China. It entered into a JV to 
develop a niche residential-cum-marina 
lifestyle development in Zhongshan, 
Guangdong Province. Covering a 
total area of 82 ha, the site will be 
acquired in phases. Keppel Land also 
acquired a 10-ha site adjacent to an 
earlier acquired site in Shenyang for 
an integrated residential township.

Evergro Properties, Keppel Land’s 
listed subsidiary which focuses on 
China’s second-tier cities, has achieved 
better operating performance in 2008. 
With cash of about $137 million raised 
from a rights issue in August, it has 
positioned itself to ride on any early 
recovery in China. 

Fund Management
In contrast with the slowing property 
development business, Keppel 

68

Keppel Corporation Limited 
Report to Shareholders 2008

Land’s fund management business 
has performed well. Its assets under 
management (AUM) have grown by 
60% from $6.1 billion in the previous 
year to about $9.8 billion when the 
funds are fully leveraged and invested. 

Keppel-sponsored K-REIT Asia 
continued to enjoy positive rental 
reversions despite a weaker ofﬁ ce 
market. Its portfolio of ﬁ ve ofﬁ ce 
assets in Singapore maintained its 
value at $2.1 billion. Post-rights issue, 

K-REIT Asia has one of the lowest 
aggregate leverage ratios among 
the S-REITs. 

Both K-REIT Asia and Alpha are 
in good positions to selectively 
acquire quality assets.

Meanwhile, Alpha Investment Partners 
(Alpha), Keppel Land’s private equity 
fund management vehicle, raised 
US$1.2 billion ($1.7 billion) for its new 
Alpha Asia Macro Trends Fund which 
focuses on enduring trends in Asia. 
As at end-2008, Alpha manages a 
total of ﬁ ve funds with about $7.7 billion 
worth of AUM when all funds are fully 
leveraged and invested. 

Business Outlook
2009 is expected to be another 
challenging year as Keppel Land 
continues to face strong headwinds 
from the global ﬁ nancial and 
economic crisis.

However, compared with past 
economic crises, Keppel Land 
is in a better ﬁ nancial position to 

Signiﬁ cant Events

Fund, which raised a total of 
US$1.2 billion and exceeded 
its original target of US$1 billion.

August
Evergro Properties’ rights issue 
was successfully closed, raising 
gross proceeds of $137.1 million 
to acquire land and to improve 
its existing developments in China.

September
The groundbreaking ceremony of 
the 4-sq km Start-Up Area of the 
Sino-Singapore Tianjin Eco-City 
was graced by China’s Premier 
Mr Wen Jiabao and Singapore’s 
Senior Minister Mr Goh Chok Tong.

MBFC announced additions 
to its line-up of pre-committed 
tenants, bringing overall pre-
commitment to 61%.

Keppel Land achieved the ISO 
14001:2004 certiﬁ cation for its 
Environmental Management 
System for the development 
of commercial and residential 
properties in Singapore.

November
Launched at Marina at Keppel Bay, 
Keppel Bay Sailing Academy was 
the ﬁ rst in Singapore to run courses 
accredited by the internationally 
recognised and UK-based Royal 
Yachting Association.

China’s Premier Wen Jiabao and Singapore’s Senior Minister Goh Chok Tong (front row, 
2nd and 3rd from right) ofﬁ ciate at the groundbreaking ceremony of the Start-Up Area 
of the Tianjin Eco-City.

July
Keppel Corporation’s subsidiary, 
Singapore Tianjin Eco-City (STEC) 
entered into a JV agreement 
with Tianjin Eco-City Investment 
and Development Co Ltd (TEC) 
to incorporate Sino-Singapore 
Tianjin Eco-City Investment and 
Development Co Ltd to develop 
a 30-sq km eco-city project.

STEC and TEC also signed 
a commercial agreement with 
the Eco-City Administrative 
Committee to co-operate 
in the development of the 
Tianjin Eco-City project.

Alpha Investment Partners 
announced the successful closing 
of its Alpha Asia Macro Trends 

Operating & Financial Review
Property

69

Building Tomorrow’s Green Cities Today
Sino-Singapore Tianjin Eco-City

Operating & Financial Review
Property

weather the current economic 
downturn. Progressive cash proceeds 
generated from strong sales of 
residential properties in 2006 and 
2007, rental income from ofﬁ ce leasing, 
and growing fee income from fund 
management activities will help buffer 
its earnings and provide funding for 
capital needs.

Keppel Land has been disciplined and 
stringent in its ﬁ nancial management 
and acquisitions in Singapore and 
overseas. As a result, no provisions 
or write-downs are required for its 
landbank as the breakeven prices are 
lower than market prices. The carrying 
values of investment buildings are 
also within the current market range.

The demographic fundamentals 
of the countries in which Keppel 
Land operates are still intact. Keppel 
Land will continue to pursue the 
development of township, waterfront 
lifestyle and sustainable developments 
in Singapore and overseas. In light of 
the current market conditions, it will 
review all its development projects 
to trim fat and conserve cash so 
that it can seize attractive investment 
opportunities that arise and ride 
through the current global crisis 
in good shape.

Having won several recognitions for its 
continued emphasis on green efforts, 
Keppel Land also aims to achieve the 
minimum standard of BCA Green Mark 
Gold Award or its equivalent for all its 
Singapore and overseas projects.

Ocean Financial Centre is the ﬁ rst 
ofﬁ ce development in Singapore’s 
Central Business District to win the 
BCA Green Mark Platinum Award. 
MBFC (Phase 1 – Commercial) and 
Reﬂ ections at Keppel Bay in Singapore 
as well as The Estella in Vietnam also 
garnered the BCA Green Mark Gold 
Awards. Keppel Land also attained 
ISO 14001 certiﬁ cation for its 
Singapore projects during the year.

The Tianjin Eco-City will demonstrate the determination of Singapore and China to tackle global 
climate changes, strengthen environmental protection and resource conservation, and build a 
harmonious society.

70

Keppel Corporation Limited 
Report to Shareholders 2008

The Sino-Singapore Tianjin Eco-City 
(Tianjin Eco-City) is a landmark 
project between the Governments 
of Singapore and China to create a 
practical, scalable and replicable model 
for sustainable development for other 
cities in China and the rest of the world.

Currently, the 30-sq km Tianjin Eco-
City site is a non-arable, freshwater 
scarce piece of vacant land, which 
will be transformed in phases over 
10 to 15 years into a sustainable and 
economically vibrant city, and a home 
for up to 350,000 residents.

Jointly developed by Singapore’s 
Urban Redevelopment Authority, 
China’s Academy of Urban Planning 
and Design, and the Tianjin Planning 
and Design Institute, the masterplan 
for the Tianjin Eco-City will adhere 
to key benchmarks to ensure that 
the project’s development will be 
environment-friendly, resource-efﬁ cient 
and economically sustainable.

The Tianjin Eco-City will adopt 
affordable technologies and practices 
to create a strong foundation for 
sustainable development and living.

Green transport ensures smaller 
carbon footprints at the individual 
and family levels. A public light 
railway system and close proximity 
of amenities and recreational facilities 
will make the Tianjin Eco-City a 
‘walkable’ community.

All buildings in the Tianjin Eco-City will 
meet green building standards of being 
energy and resource-efﬁ cient. Eco-
solutions will be integrated to enhance 
sustainability and commercial viability 
so that homes will be affordable and 
well-designed.  

Strategically located in the Tianjin Binhai New Area, the Tianjin Eco-City 
will beneﬁ t from the economic vibrancy of the region.

Clean water will be achieved through 
wastewater recycling and advanced 
treatment technologies. Tap water 
will be 100% potable.

Clean and renewable energy sources 
such as solar water heaters and 
geothermal heating systems will 
be used in the Tianjin Eco-City to 
supplement traditional energy supplies. 

A collective system of waste 
management and recycling will be 
introduced and integrated with waste 
disposal and treatment processes 
to regenerate energy. 

Environmental protection is expected 
to take centre stage in the Tianjin 
Eco-City, with a vast, beautiful 
eco-valley running through the city, 
as well as restoration of natural 
habitats and cleaning up of rivers, 
water bodies and wetlands.

With its location at the heart of 
China’s Bohai Rim, the Tianjin Eco-
City will position itself as a modern 
ﬁ nancial and services hub focusing 
on eco-business services such 
as clean energy, environmental 
protection and green urban solutions. 
Its eco-business parks will also 
provide exciting opportunities for 
residents and businesses.

Operating & Financial Review
Property

71

Operating & Financial Review
Infrastructure

The Infrastructure Division will continue 
to build a selected portfolio of environmental 
engineering, power generation, logistics and 
data centre & networks businesses.

Earnings 
Highlights

Operating Proﬁ t ($ million)

2008

2007

2006

  11

  (65)

$70m

Proﬁ t before Tax

$63m

PATMI

Earnings 
Highlights

Revenue

EBITDA

Operating proﬁ t

Proﬁ t before tax

PATMI

Manpower (number)

Manpower cost

Major 
Developments 
in 2008

Focus for 
2009/2010

(cid:129)  Keppel Integrated Engineering 

(cid:129)  KIE to launch the green business 

(KIE) was selected for the 
divestment of the Senoko 
Incineration Plant in Singapore

trust, when appropriate

(cid:129)  Pursue long-term contracts and 
explore investment opportunities 

  50

(cid:129)  Secured more environmental 

projects in Europe and 
Central America

(cid:129)  First full year of commercial 

operation for Keppel Merlimau 
Co-generation Plant

(cid:129)  R&D of water and waste 

management technologies 

(cid:129)  Strengthen project execution 
and ﬁ nancial management

(cid:129)  Keppel Energy to selectively 
acquire power generation 
assets and technology, 
including renewable energy

(cid:129)  Divest assets in the Americas

(cid:129)  Keppel Telecommunications 

& Transportation to tap logistics 
growth of China and Southeast Asia

(cid:129)  Leverage growth potential for data 

centres in Europe and Asia

2008
$ million    

2007
$ million        

2006
$ million

2,232

1,277

82

50

70

63

45

11

51

27

5,064

219

4,392

180

 570

(19)

(65)

(24)

(35)

3,998

158

72

Keppel Corporation Limited 
Report to Shareholders 2008

               
The Keppel Merlimau Co-generation Power Plant has been contributing to earnings since operations in 1H 2007.

Project

Keppel Merlimau Co-generation Plant

Capacity

500 MW

Ulu Pandan NEWater Plant

148,000 m3/day

Tuas South Waste-to-Energy Plant

Qatar Domestic Solid Waste Management Centre

800 tonnes of solid waste a day to generate more than 
20 MW of green energy

2,300 tonnes of mixed solid waste and 5,000 tonnes 
of construction and demolition waste a day, and a 
1,500 tonnes a day waste-to-energy incineration plant

Tenure

2007 – 2033

2007 – 2027

2009 – 2034

2009 – 2029

Doha North Sewage Treatment Works

439,000 m3/day

2010 – 2020

Earnings Review
Infrastructure Division contributed to a 
billion-dollar increase in Group revenue 
due largely to higher revenue from the 
co-generation power plant in Singapore 
and environmental engineering 
contracts. It continued to make 
encouraging progress, contributing 
$70 million to Group pre-tax proﬁ t. 
PATMI of $63 million was more than 
double the level achieved in 2007. 
The Division accounted for 6% of the 
Group’s PATMI.

Environmental Engineering
Keppel Integrated Engineering 
(KIE)
KIE aims to be a valued partner to 
customers in sustainable development by:
(cid:129)  Designing and building water 
  and thermal treatment plants;
(cid:129)  Developing turnkey projects
  and selling environmental

technology packages; and

(cid:129)  Utilising the group’s global network
  and strong ﬁ nancial resources to
  develop DBOO, BOT, DBO and PPP
types of environmental projects.

Environmental Engineering
KIE aims to be a global leader 
in environmental technology and 
services and to make a signiﬁ cant 
contribution to a cleaner future.

Operating & Financial Review
Infrastructure

73

 
 
Operating & Financial Review
Infrastructure

Signiﬁ cant Events

June
KIE formed a joint venture 
(JV)company, Tianjin Eco-City 
Environmental Protection Co Ltd 
(TECEP), with Tianjin TEDA Co 
Ltd (Tianjin TEDA Co) and Tianjin 
Eco-City Investment & Development 
Co Ltd (TECID Co).

July
KIE formed a second JV company, 
Tianjin Eco-City Energy Investment 
and Construction Co Ltd (TECEIC) 
with TECID Co and Tianjin 
Jinneng Investment Co to explore 
opportunities for infrastructure 
projects in the Sino-Singapore 
Tianjin Eco-City.

Signing the agreement for the 
divestment of the Senoko Incineration 
Plant are (from left): Ms Tan Puay Joo, 
Manager of Singapore Land Authority; 
Ms Chua Geok Wah, Accountant-
General; Mr Chua Chee Wui, CEO 
of KIE and Mr Lee Yuen Hee, CEO 
of National Environment Agency. 

February
Keppel Energy agreed to supply 
natural gas valued at an expected 
$3 billion, based on prevailing 
energy prices, to ExxonMobil 
Asia Paciﬁ c Pte Ltd’s facilities 
on Jurong Island. 

March
Keppel Seghers Belgium NV 
secured a €34 million (approximately 
$74.8 million) turnkey contract for 
a Combined Heat and Power 
waste-to-energy plant owned 
by Amotfors Energi in Sweden.

August
Keppel Logistics made its ﬁ rst 
foray into Vietnam with the 
acquisition of a 40% stake in 
Indo-Trans Logistics Vietnam.

September
The Singapore Government 
selected KIE’s proposal for 
the divestment of its Senoko 
Incineration Plant to an 
infrastructure business trust 
and KIE planned to establish 
the Trust as a listed green 
business trust with the SIP 
as the seed asset.

It will continue to strengthen its 
technology leadership through 
continuous Research and Development 
(R&D) and leverage our extensive 
engineering experience.

Market Review
There is an increasing need for proper 
solutions to treat solid waste in the 
Middle East. Most of the countries 
in the Gulf Cooperation Council are 
ranked among the world’s top 10 in 
terms of waste production per capita, 
with approximately 120 million tonnes 
of waste produced each year. 

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Keppel Corporation Limited 
Report to Shareholders 2008

Notwithstanding the global economic 
crisis, the water sector in South 
America and the Caribbean is expected 
to remain active for the next two years, 
with Latin American countries heavily 
investing in infrastructure.

Several European Union states have 
legislations that encourage higher rates 
of recycling or recovery and impose 
restrictions on the types of waste that 
can still be land-ﬁ lled. As a whole, the 
market for waste-to-energy (WTE) 
solutions in Europe remains strong. 

After many years of slow development, 
the market in North America is showing 
renewed interest in WTE solutions.

China remains an attractive market as 
urbanisation accelerates, increasing 
demands for clean water and effective 
waste management. KIE plans to 
expand its presence in Guangdong 
Province to ride on its economic 
transformation. It signed a framework 
agreement with Guangdong GuangYe 
Environmental Protection Industrial 
Group for the joint investment of 
environmental infrastructure projects 
in the province. 

Operating Review
In Singapore, KIE’s proposal was 
selected by the government for the 
divestment of the Senoko Incineration 
Plant to an infrastructure business 
trust (the Trust). KIE will spearhead 
the establishment and listing of the 
Trust, which is expected to be the 
ﬁ rst of its kind. Singapore’s ﬁ fth WTE 
plant at Tuas, scheduled to commence 
operations in the second quarter of 
2009, and East Asia’s largest operational 
NEWater Plant at Ulu Pandan will be 
among the ﬁ rst assets to be considered 
for injection into the Trust.

In China, KIE formed two joint 
venture (JV) companies with Tianjin 
partners to explore opportunities in 
the Sino-Singapore Tianjin Eco-City 
(Tianjin Eco-City). The ﬁ rst, Tianjin 
Eco-City Environmental Protection 
(TECEP) will focus on the investment, 

construction and operation of 
infrastructure for environmental 
protection, and is expected to provide 
urban environmental management, 
pollution treatment and environmental 
restoration and improvement. It will also 
develop and provide solutions for green 
energy and environmental protection.

The second JV, Tianjin Eco-City 
Energy Investment and Construction 
(TECEIC) will focus on the investment 
and implementation of energy and 
utilities-related infrastructure as well 
as the operations and maintenance 
of these facilities. TECEIC will also 
look into the development and 
promotion of renewable energy.

These two partnerships will allow 
KIE to strengthen its relationship with 
Tianjin, enhancing its strong foothold 
in China as a multi-national player to 
contribute greatly to the sustainable 
development of Tianjin City.

In the Middle East, KIE is making 
steady progress in the design and 
construction of the world’s ﬁ rst 
integrated solid waste management 
centre in Qatar. KIE will undertake 
the operation and maintenance of this 
facility for 20 years. Construction of the 
plant is expected to be completed by 
the last quarter of 2009. 

Also making good progress is the 
contract to design and build the 
greenﬁ eld wastewater treatment and 
water reuse facility with the capacity 
to treat 439,000 m3 of wastewater 
a day in Qatar. Construction of the 
Doha North Sewage Treatment 
Works (DNSTW) plant is expected 
to be completed by end-2010, 
following which KIE will operate 
and maintain the facility for 
10 years. KIE has also included a 
concept proposal to transform and 
enhance the surrounding area of 
the DNSTW into an EcoPark. The 
proposed EcoPark will be the ﬁ rst-of-
its-kind to showcase breakthrough 
ideas on sustainable and resource-
conscious development. 

Singapore’s Prime Minister Mr Lee Hsien Loong (right) and Minister for Environment and Water 
Resources Dr Yaacob Ibrahim tour the Keppel Group’s booth at the SIWW with Keppel Corporation 
CEO, Mr Choo Chiau Beng (left).

KIE successfully applied its proven 
water reuse technology, the Keppel 
Seghers POTABLOCTM, to produce 
high-quality industrial grade water as 
part of the construction of DNSTW. A 
mobile water treatment and production 
unit, POTABLOCTM recycles wastewater 
to provide water needed for the project 
construction instead of drawing on 
precious potable water from the city 
of Doha. The Public Works Authority 
of Qatar has hailed the application of 
POTABLOCTM as an example of green 
construction practice.  

In December 2008, KIE secured 
two contracts worth nearly 
$120 million in Honduras and 
Guadeloupe, an overseas region of 
France. In Guadeloupe, KIE will design 
and provide a full suite of technology 
package for a new WTE plant. When 
completed in 2011, the plant will treat 
household, hospital and industrial 
waste of up to 130,000 tonnes per year 
to generate steam and electricity. 

Keppel Sea Scan, a wholly-owned 
subsidiary of KIE, secured new 
marine accommodation projects 
with total value exceeded $38 million 
in Singapore, Brazil and Malaysia. 
Conﬁ rmed orders for supply of marine 
equipment and products exceeded 
$120 million of which $12 million was 
from clients in Vietnam, Indonesia, 
Kazakhstan and Qatar.

Keppel FMO, another wholly-owned 
subsidiary of KIE, secured several 
maintenance contracts from new 
customers including a contract to 
manage the Ministry of Manpower 
facilities. Keppel FMO continued to 
enjoy a high retention rate of existing 
customers, with extension contracts 
awarded from Alexandra Hospital, the 
Ministry of Environment and Water 
Resources, the Subordinate Courts, 
the Singhealth Group of Hospitals, 
National Technological University 
and Defence Science and 
Technology Agency.

Operating & Financial Review
Infrastructure

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Operating & Financial Review
Infrastructure

As Singapore’s ﬁ rst WTE plant 
built under the Public Private 
Partnership, Keppel Seghers 
will own and operate the Tuas 
Incineration Plant for 25 years. 

76

Keppel Corporation Limited 
Report to Shareholders 2008

Business Outlook
Sustainable and reliable water supplies 
have been identiﬁ ed as one of the key 
global challenges. According to the 
United Nations’ estimates, one-third of 
the world’s population live in areas with 
water shortages while 1.1 billion people 
lack access to safe drinking water. 
Concerns over securing adequate 
future water resources has resulted in 
a growing trend to implement effective 
water-efﬁ ciency programmes and a 
strong growing interest in expanding 
technologies related to water reuse 
and desalination.

Growing awareness of landﬁ ll pollution 
risks, land scarcity in rapidly urbanising 
regions and tighter regulations will 
create business opportunities in 
solid waste treatment industries.

As one of the few global companies with 
the track record to offer the full range 
of both water and thermal technologies, 
KIE will be well-positioned to harness 
these business opportunities. 

Energy
Market Review
Average electricity demand in 
Singapore grew approximately 0.9% 
in 2008. However, electricity demand 
began to taper off in the last quarter 
of 2008. The long-awaited liberalisation 
of the Singapore gas market was 
realised with the implementation of the 
Gas Network Code on 15 September 
2008. Keppel Energy’s businesses 
in Singapore beneﬁ ted from these 
developments with an improved 
operating and ﬁ nancial performance.

Temasek Holdings divested the three 
largest power generation companies in 
Singapore before the global economy 
turned for the worse. Keppel Energy is 

Keppel Energy
Keppel Energy aims to be a power 
company with innovative fuel 
solutions in Singapore and beyond.

Signiﬁ cant Events

December
Keppel Seghers Belgium NV and 
Keppel Seghers Latinoamèrica 
SA secured two environmental 
contracts worth about $120 million 
respectively in Guadeloupe 
(France) and Honduras.

Mr Wang Yang (left), Member of the 
Political Bureau of the Communist Party 
of China (CPC) Central Committee and 
Secretary of the CPC’s Guangdong 
Committee meeting Mr Lim Chee Onn, 
Chairman of Keppel Corporation (right), 
in Singapore in September 2008.

well-positioned to adapt to the entry of 
new players into the Singapore energy 
market brought by the privatisation.

Operating Review 
Keppel Energy’s focus in 2008 has 
been on execution and delivering 
value from the investments made 
in the power and gas businesses in 
Singapore. The Keppel Merlimau Co-
generation Plant has been improving 
on its reliability and availability. Its 
retail arm, Keppel Electric, has also 
secured a larger market share in 
2008. Keppel Gas, a gas importer and 
shipper into Singapore, collaborated 
with the Singapore authorities, the gas 
transporter and other companies in the 
industry to implement the Gas Network 
Code and successfully managed the 
transition into the new system.

Operating conditions in the Americas 
continue to be challenging. Keppel 

Energy would look to either divest or 
retire power assets in that region and 
focus its attention on the opportunities 
in Asia.

Business Outlook
Notwithstanding the economic 
slowdown, Keppel Energy’s power 
business in Singapore is expected to 
continue to deliver sustainable earnings 
in 2009. While demand for electricity is 
slowing in tandem with lower economic 
activity, the company is well-positioned 
to ride out this volatile period. The gas 
business is expected to begin supply 
of gas to ExxonMobil Asia Paciﬁ c in the 
later part of the year.

Keppel Energy would utilise the 
integrated energy business platform to 
grow our Singapore business through 
capacity expansion and development 
of adjacencies like the utilities business 
on Jurong Island. 

Operating & Financial Review
Infrastructure

77

Operating & Financial Review
Infrastructure

The company would also pursue 
selective acquisitions of power and 
gas assets in Asia.

Logistics
Market Review
In Singapore, the strong economy 
in the ﬁ rst half of the year saw high 
levels of logistics activities. This led 
to both higher occupancy and rental 
rates. However, the global economic 
downturn in the later half affected 
logistics activities, especially export 
and manufacturing-driven ones. 

In China, the overall cargo throughput 
at Chinese ports and internal cargo 
movement registered good growth in 
2008. While China’s growth is expected 
to slow in the ﬁ rst half of 2009, 
government policies stimulating growth 
should provide some support in the 
later part of the year. 

about 160,000 square feet (sf) 
of warehouse space in Singapore, 
through its subsidiary, Transware 
Distribution Services. 

The Division continued to leverage 
its strength to serve the Fast Moving 
Consumer Goods sector. It renewed 
its contract with long-time customers 
Nestle and Carrefour, and also 
acquired new customers such as 
Kraft and Kao Singapore. Keppel 
Logistics had also expanded its truck 
ﬂ eet in the year and strengthened its 
value proposition to provide integrated 
solutions from warehousing to 
distribution to its customers. 

In Malaysia, Keppel Logistics deepened 
its footprint in Central Peninsular 
Malaysia by setting up its ﬁ rst major 
operations in a 60,000 sf warehouse 
in Shah Alam. 

Operations Review
Occupancy rates at Keppel Logistics’ 
Singapore warehouses remained 
healthy at close to 100% as at 
end-2008. The Division also added 

In China, Keppel Logistics Foshan (KLF) 
continued to operate at maximum 
capacity with the Lanshi Port 
recording a historical high of 220,000 
twenty-foot equivalent units handled. 

Logistics and Data 
Centre & Networks
Keppel Telecommunications 
& Transportation aims to leverage 
core competencies to enhance 
existing businesses.

Keppel Logistics expanded its cold-chain facilities to meet the growing needs of its fast moving 
consumer goods (FMCG) customers.

78

Keppel Corporation Limited 
Report to Shareholders 2008

Leveraging its expertise in delivering 100% availability specialised data centre management, Citadel100 
delivers a range of customised solutions ranging from co-location suites to dedicated data vaults.

KLF also enjoyed near full occupancy 
for its existing warehouse space. To 
keep pace with the business growth, 
KLF had in 2008 increased the 
stacking capability of Lanshi Port. 
Preparing for growing demand for 
warehousing space and third-party 
logistics services, KLF will commence 
building a new distribution centre in 
Nanhai during 2009. 

Business Outlook
Logistics activities are expected 
to be affected by the sluggish global 
economy in 2009. The group will 
continue to be vigilant in managing 
costs and improving efﬁ ciency while at 
the same time, build its businesses 
and take advantage of any 
opportunities that may arise 
during this period of adversity. 

Through Wuhu Annto Logistics 
Company Limited, the Division made 
good progress in the niche segment 
of cold-chain services as it increased 
its ﬂ eet size of reefer trucks in 2008 to 
cope with the growing demand. 

Keppel Logistics made its ﬁ rst move into 
Vietnam in 2008 through the acquisition 
of a 40% interest in Indo-Trans Logistics 
Vietnam, a company which operates 
more than 150,000 sf of warehouse 
space in Ho Chi Minh City and Hanoi.

Data Centre & Networks
Market Review
The overall data centre market in 
Europe remains buoyant, despite the 
credit crisis. The supply growth of 
high-quality data centre facilities 
continues to lag demand growth, 
resulting in higher capacity utilisation 
and co-location prices. 

Operations Review
Keppel T&T ventured into the data 
centre market in Europe in February 

2007, through the acquisition of a 
50% stake in Premier Data Centres 
Limited. Premier Data Centres Limited 
was renamed Citadel 100 Datacenters 
Limited (Citadel100) in 2008 as part 
of its re-branding exercise. 

Citadel100, Keppel T&T’s data 
centre business in Dublin, achieved 
98% occupancy in 2008. Citadel100 
continues to provide high-quality 
services to its blue-chip customers, 
priding itself in delivering zero downtime.

Business Outlook
The Division continues to explore 
various new data centre projects 
in Dublin and The Netherlands on 
the back of its customers’ expansion 
plans in these markets.

Operating & Financial Review
Infrastructure

79

Operating & Financial Review
Investments

Our investments are committed to deliver 
good value to shareholders amidst the 
difﬁ cult global climate.

Earnings 
Highlights

Operating Proﬁ t ($ million)

2008

2007

2006

  25

  30

$219m

Proﬁ t before Tax

$172m

PATMI

Earnings 
Highlights

Revenue

EBITDA

Operating proﬁ t

Proﬁ t before tax

PATMI

Manpower (number)

Manpower cost

Major 
Developments 
in 2008

(cid:129)  Singapore Petroleum Company 
(SPC) acquired full operatorship 
of its ﬁ rst onshore exploration 
block in Indonesia, the Mahakam 
Hilir PSC in Kutai Basin in the East 
Kalimantan province.  

  95

(cid:129)  k1 Ventures realised signiﬁ cant 

gains on its partial sale of 
McMoRan Exploration Company.

(cid:129)  MobileOne(M1) submitted a bid 
to build and operate the active 
infrastructure layer for Singapore’s 
Next Generation National 
Broadband Network.

Focus for 
2009/2010

(cid:129)  SPC will prudently invest in oil and 
gas production assets and develop 
its existing acreages for long-term 
shareholder value creation.

(cid:129)  k1 Ventures is working closely 
with its investee companies 
for value creation. It aims to 
strategically rebalance Helm’s 
rail-related inventories and prepare 
Helm for future growth.  

(cid:129)  M1 will continue to tap on 
opportunities arising from 
media convergence and develop 
new businesses anchored on its 
core competencies. 

2008
$ million    

2007
$ million        

2006
$ million

54

26

25

219

172

165

65

61

30

30

334

268

156

60

 121

95

95

306

242

161

50

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Keppel Corporation Limited 
Report to Shareholders 2008

               
Earnings Review
Investments recorded a decline in 
revenue of 11% to $54 million in 
2008 from $61 million in 2007. Proﬁ t 
of $172 million was $96 million or 
36% lower compared to the previous 
year, due mainly to lower contribution 
from SPC and partly offset by higher 
contribution from k1 Ventures. 
Investments contributed 16% 
to the Group’s PATMI in 2008. 

Singapore Petroleum 
Company (SPC)
SPC is a regional oil and gas company 
with interests in oil and gas exploration 
and production, reﬁ ning, terminalling 
and distribution, marketing and trading 
of crudes and reﬁ ned petroleum 
products. It is an associated company 
of Keppel Corporation. SPC’s vision 
is to be a strong, integrated oil and gas 
company with a premium brand in the 
Asia-Paciﬁ c region. 

Market Review
2008 saw severe volatility in oil prices 
and reﬁ ning margins. 

In the ﬁ rst half of 2008, continuing 
geopolitical tensions, supply uncertainties 
coupled with strong demand from China 
and India as well as the weakening of 
the US dollar resulted in crude oil and 
reﬁ ned product prices reaching record 
levels. The benchmark West Texas 
Intermediate crude surged to a record 
US$147.27 per barrel in July 2008.

However, in the second half of 2008, 
the global economic crisis and the 
resultant curtailing of bank lending 
impacted the demand for reﬁ ned 
petroleum products, and caused oil 
prices to fall sharply. By end-2008, 
crude oil prices had fallen by more 
than US$100 per barrel from its 
record highs. Demand for crude 
oil fell by 0.2 million barrels per day 
(bpd) in 2008 to 85.8 million bpd.  

Reﬁ ning margins were also extremely 
volatile during the year. In the ﬁ rst half 
of 2008, SPC recorded an average 
reﬁ ning margin of about US$10.00 
per barrel. With weaker demand in 
the second half year, SPC’s average 
reﬁ ning margin fell to about US$1.00 
per barrel.  

Operating Review
In 2008, SPC’s Exploration and 
Production (E&P) business contributed 
close to 40% of the Group’s after-tax 
earnings, exceeding its near-term 
target of 30% earnings contributions 
from E&P, well ahead of initial schedule. 

The company’s E&P earnings grew 
186.2% in 2008 compared to 2007 
due to increased production from 
its producing assets in Indonesia 
and China. For the year, SPC’s 
E&P producing assets delivered 
$329.2 million in revenue and 
$156.0 million in operating proﬁ t. 

Continued on page 84 ...

In line with its commitment towards a cleaner 
and greener environment, Singapore Reﬁ ning 
Company is upgrading its ultra-low sulphur 
diesel production capability and volume.

Operating & Financial Review
Investments

81

Operating & Financial Review
Investments

SPC Upstream Assets

Kakap PSC, Indonesia
Kakap Production Sharing Contract 
(PSC), which covers approximately 
2,006 sq km, is located offshore in 
the West Natuna Sea of Indonesia, 
486 km northeast of Singapore. There 
are nine producing oil and gas ﬁ elds, 
integrated by four platforms and seven 
subsea wellheads. Oil is processed 
by a Floating Production Storage and 
Ofﬂ oading (FPSO) vessel and gas is 
transported through the 654 km West 
Natuna Transportation System pipeline 
to Singapore. SPC has a 15% interest 
in the Kakap PSC that contributed 
2,142 barrels of oil equivalent per 
day (boepd) for the Group in 2008. 

SPC proceeded to link two subsea 
tie-backs to the KG platform which 
is scheduled for completion in 2010. 
Upon completion, they are expected 
to increase the gas production for 
supply to Singapore through the KG-KF 
pipeline that is now under construction. 

Sampang PSC, Indonesia
Sampang PSC is located in the Madura 
Strait, offshore East Java in Indonesia, 
covering approximately 535.5 sq km. 
The block is made up of the producing 
Oyong oil and gas ﬁ elds as well as the 
Wortel gas ﬁ eld and Jeruk oil discovery. 

Oyong
In 2008, the Oyong ﬁ eld produced 
oil which averaged 6,318 bpd. This 
equates to 2,527 bpd for SPC’s 40% 
interest. Gas development of the 
Oyong ﬁ eld is now in progress, 
with gas production expected 
to commence in 2009. 

Wortel
Wortel gas ﬁ eld is located approximately 
7 km west of the Oyong ﬁ eld. Upon 
obtaining approval from the Indonesian 
authority, the partners will proceed to 
develop the Wortel gas ﬁ eld. First gas 
production is expected in early 2011.

Jeruk
The Sampang partners continue 
to work closely to explore possible 
development plans to commercialise 
Jeruk’s resources.

Mahakam Hilir, Indonesia
Mahakam Hilir block covers 
approximately 344.14 sq km and is 
located onshore in the Kutai Basin, 
East Kalimantan. The Kutai Basin 
is one of the largest and most 
important oil and gas producing 
basins in Indonesia. 

Bohai Bay, China
Block 04/36 and Block 05/36 are 
located in western Bohai Bay, 190 km 
east of Beijing. Covering approximately 
225 sq km, the blocks are currently 
SPC’s largest producing assets.       

Oil is gathered by six platforms and 
processed by a FPSO vessel. Block 
04/36 and Block 05/36 have a total 
gross oil production of 44,664 bpd, 
of which 3,806 bpd was net to SPC. 
Since the acquisition of the blocks 
in the second half of 2007, SPC has 

SPC’s upstream business 
contributed close to 40% 
of the Group’s after-tax 
earnings in 2008.

SPC is a 100% operator of the block, 
and is committed to conducting 
seismic survey and exploration 
drilling under the PSC. SPC will 
be establishing a branch ofﬁ ce in 
Jakarta in 2009 to facilitate and 
manage operations of the block. 

Gas Pipelines
SPC holds a 15% interest in the 
Transasia Pipeline Company Private 
Limited (Mauritius), which in turn holds 
a 40% interest in PT Transportasi Gas 
Indonesia (PT TGI). PT TGI owns and 
operates two major gas transmission 
lines, namely the 536 km Grissik-Duri 
pipeline and the 468 km Grissik-
Batam-Singapore pipeline. 

lifted over a million barrels of oil from 
the ﬁ elds. 

Block 26/18, China
SPC holds a 100% operatorship 
interest in Block 26/18. Located in the 
Pearl River Mouth Basin, South China 
Sea, the block covers approximately 
4,961 sq km and is 150 km from shore 
at water depths of between 85 and 
200 metres. Block 26/18 is the ﬁ rst 
offshore block to be operated by SPC.

SPC will continue to acquire and 
process 3-D seismic data of the 
block, and conduct more geological 
and geophysical studies in 2009 in 
preparation for exploration drilling.

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Keppel Corporation Limited 
Report to Shareholders 2008

Blocks 102 and 106, Vietnam 
Located in the Song Hong Basin, 
offshore Vietnam in the Gulf of Tonkin, 
Blocks 102 and 106 cover an area of 
approximately 8,560 sq km and contain 
several exploration prospects and 
leads. SPC holds a 20% participating 
interest in the blocks. 

China
Block 04/36 
and Block 05/36

In December, the Ham Rong-1X 
exploration well was plugged and 
abandoned at 3,767 metres. Oil 
samples drawn from the well indicated 
that the oil is of 39° API with a ﬂ ow 
rate of about 4,859 bpd, while the 
gas rate was about 6 million 
standard cubic feet per day. The 
drilling of Yentu-2X appraisal well, 
located about 13 km east of Ham 
Rong-1X, was also carried out. The 
partners will continue to work closely 
to further explore the potentials of the 
Ham Rong and Yentu ﬁ elds.

Block 101-100/04, Vietnam 
Block 101-100/04 extends across 
an area of approximately 6,174 sq km, 
located adjacent to Blocks 102 
and 106 in the Gulf of Tonkin.   

During the year, the partners 
continued to acquire and interpret 
the seismic data of the block. 
Drilling of an exploration well is 
expected in the ﬁ rst half of 2009.  

Block B, Cambodia
Block B, covering approximately 
6,560 sq km, is located 250 km 
offshore Cambodia, east of the Khmer 
Basin where a number of oil and gas 
discoveries were previously made. 

In June, the Vimean Morodok 
MahaNorkor-1 exploration well 
was drilled but later plugged and 
abandoned with non-recoverable oil 
shows. SPC and its partners extended 
the exploration phase of 
the block for two years to 
undertake further technical study 
and evaluation of the block’s potential.

Vietnam
Block 101-100/04 
Blocks 102 
and 106 

Cambodia
Block B

China
Block 26/18

Indonesia
Mahakam Hilir 
PSC

Indonesia
Kakap PSC

Indonesia
Sampang PSC

T/47P, Australia
Acquired in 2007, Block T/47P covers 
approximately 2,890 sq km and is 
located offshore southeast Australia 
about 200 km from Melbourne, at 
water depths between 50 and 100 
metres. The Bass Basin block contains 
the existing Cormorant oil, condensate 
and gas discovery and several 
exploration prospects and leads.

Seismic acquisition and processing 
of the surveys were completed in 2008. 
Exploration drilling for the block 
is expected to commence in 2010.

Australia
Block T/47P

Operating & Financial Review
Investments

83

Operating & Financial Review
Investments

... continued from page 81

In 2008, SPC continued to be active in 
expanding its E&P business. It acquired 
and gained full operatorship of its ﬁ rst 
onshore E&P asset, the Mahakam Hilir 
Production Sharing Contracts (PSC). 
The block is SPC’s third asset 
in Indonesia, in addition to the 
Kakap and Sampang PSCs. 

and Block 05/36 in Bohai Bay. The 
blocks in Bohai Bay are SPC’s largest 
producing assets.   

To date, SPC has nine PSCs and one 
exploration permit across the Asia-
Paciﬁ c region in Australia, Cambodia, 
China, Indonesia and Vietnam.

An E&P branch ofﬁ ce was established 
in Shekou, Shenzhen, China to operate 
and manage SPC’s three acreages in 
China: Block 26/18 in the Pearl River 
Mouth Basin, as well as Block 04/36 

The ﬁ rst half of 2008 saw healthy 
reﬁ ning margins for SPC due to 
strong demand for reﬁ ned products. 
Singapore Reﬁ ning Company (SRC), 
50% owned by SPC, was kept running 

Signiﬁ cant Events

McMoRan Exploration Company is principally engaged in the 
exploration, development and production of oil and natural gas.

June
SPC and its partners began drilling 
the Ham Rong-1X exploration well 
in Vietnam.

k1 Ventures sold 2,379,235 shares 
in McMoRan Exploration Company 
for an aggregate pre-tax consideration 
of US$70.1 million with the aim of 
enhancing shareholder value.

July
SPC and its partners commenced 
drilling of the ﬁ rst exploration well 

at Vimean Morodok MahaNorkor-1 
in Cambodia.

September
SPC ofﬁ cially opened its Shekou 
branch ofﬁ ce to operate and 
manage its upstream assets 
in China.

November
SPC entered into a Petroleum 
PSC to explore the Mahakam 
Hilir PSC, its ﬁ rst onshore block 
in Indonesia.

84

Keppel Corporation Limited 
Report to Shareholders 2008

at close to full capacity. As the global 
economic downturn worsened in the 
later half of 2008, reﬁ ning margins 
nosedived. Together with the sharp 
fall in crude oil and product prices, 
SPC’s downstream earnings were 
negatively impacted. For the 
full year 2008, SPC recorded an 
average reﬁ ning margin of about 
US$5.50 per barrel, compared 
to US$7.00 per barrel in 2007. 

During the year, SRC successfully 
completed its scheduled maintenance 
of the catalytic reformer and the 
hydrocracker upgrading units. The 
revamp of SRC’s hydro-desulphuriser 
unit which started in mid-2007 to 
produce ultra-low-sulphur diesel 
progressed on schedule. Due to 
the ongoing economic slowdown, 
SPC and its partners are reviewing 
SRC’s proposed clean ultra-low 
sulphur gasoline and co-generation 
plant projects.

SPC continues to provide quality 
service and value to motorists in 
Singapore through its extensive 
service station network. During the 
year, the company introduced yet 
more initiatives such as “Drive-Thru” 
ATM and “Drive-Thru” take-away food 
outlet, to bring greater convenience 
and value to its customers and to 
expand its base of loyal customers. 

Business Outlook
The global economic downturn 
adversely impacted SPC’s performance 
in 2008. SPC will leverage its robust 
corporate governance practices and 
strong enterprise risk management 
framework to enhance shareholder 
value in the long run.       

As a result of the global economic 
slowdown, some companies in the 
oil and gas industry are delaying 
or cancelling projects and planned 
investments. SPC will review its 
capital investments and operating 
expenditures to ensure that they 
make economic sense in the current 
difﬁ cult environment.

With low gearing, SPC is ﬁ nancially 
robust and will be able to remain 
resilient in the current downturn. 
SPC will continue to invest prudently 
to beneﬁ t from opportunities that may 
arise from the current downturn.

k1 Ventures
k1 Ventures, 36%-owned by Keppel 
Corporation, is invested in companies 
across diverse industry sectors 
including transportation leasing, 
education, and oil and gas exploration. 
Its major investments are in Helm 
Holding Corporation (Helm), the largest 
independent locomotive and railcar 
leasing company in North America, and 
Knowledge Universe Holdings (KUH), a 
leading global education service provider.  

For the ﬁ nancial year ended 30 June 
2008, the company recorded proﬁ ts 
from continuing operations of 
$72.9 million, a 319% increase over 
the previous year, mainly driven by the 
sale of Dakota, Minnesota & Eastern 
Railroad Corp, an investment held 
by Helm, and the partial sale of 
k1 Ventures’ investment in McMoRan 
Exploration Company. k1 Ventures 
realised proﬁ t before tax gains of 
$49.2 million and $66.2 million 
respectively, from the dispositions. 
For 2008, the company distributed 
8 cents per share to shareholders. 

KUH, through its operating subsidiaries, 
expanded its international platform by 
entering into the Singapore market in 
2008. KUH has become the largest 
preschool education services provider 
in Singapore.    

The global economic slowdown has 
impacted k1 Ventures’ investments, 
and the company is committed to meet 
these challenges by continuing to be 
proactive in the management of its 
investments with the goal of enhancing 
shareholder value.  

MobileOne (M1)
M1 is a leading mobile communications 
provider in Singapore, providing a 
full range of mobile voice and data 

1

2

1  M1 aims to be the leader in personal voice, business and data communications, focusing on 

value, quality and customer service.

2  Helm uses its nationwide network of professionals to purchase, refurbish and service rail 

equipment to customers in North America.

communications services over its 
2G/3G/3.5G network. M1 is 20%-
owned by Keppel Telecommunications 
& Transportation (Keppel T&T). 

M1 remains a signiﬁ cant contributor to 
Keppel T&T’s earnings and cash ﬂ ow, 
despite a decrease in its net proﬁ t from 
$171.8 million in 2007 to $150.1 million 
in 2008.

As part of its effort to transform itself 
into a dynamic multi-play operator, 
M1 embarked on several key initiatives 
to drive efﬁ ciency and capitalise on 
new opportunities during the year. 

In December 2008, M1 submitted 
a bid to build and operate the active 
infrastructure layer for Singapore’s 
Next Generation National Broadband 
Network (NBN), which is expected 
to further entrench Singapore’s 
status as an infocomm hub. The 
tender result is expected to be 
announced in the ﬁ rst quarter of 
2009. M1 will beneﬁ t from the 
introduction of NBN as it will provide 
a neutral and transparent Open 
Access environment, enabling 
M1 to compete more effectively 
in the ﬁ xed line space as a retail 
service provider.

Operating & Financial Review
Investments

85

Operating & Financial Review
Financial Review and Outlook

With 74% of its total revenue coming from 
overseas customers, the Keppel Group stays 
focused on building regional and global winners.

Revenue by Market 2008

Revenue by Market 2007

Revenue by Market 2006

$11,805m 
+13%

$10,431m 
+37%

$7,601m 
+34%

Singapore  26%
Overseas  74%

Singapore  25%
Overseas  75%

Singapore  16%
Overseas  84%

  Singapore 

  ASEAN 

  Rest of Asia-Pacific 

  Middle East / India 

  Europe 

  North America 

  South America 

  Central America 

26%

5%

4%

8%

30%

15%

11%

1%

  Singapore 

  ASEAN 

  Rest of Asia-Pacific 

  Middle East / India 

  Europe 

  North America 

  South America 

  Central America 

25%

2%

7%

6%

29%

25%

5%

1%

  Singapore 

  ASEAN 

  Rest of Asia-Pacific 

  Middle East / India 

  Europe 

  North America 

  South America 

  Central America 

16%

5%

8%

4%

32%

21%

9%

5%

86
86

Keppel Corporation Limited 
Keppel Corporation Limited 
Report to Shareholders 2008
Report to Shareholders 2008

Prospects
The global economic downturn 
we face today is unprecedented. 
Notwithstanding the exceptional 
measures taken by governments 
around the world to stimulate their 
economies, the outlook remains 
opaque and the current recession 
may last longer than previous ones. 

For Keppel, years of prudent investing, 
growing and rationalising our businesses 
based on the multi-business strategy 
has placed the Group in a net cash 
position as at end-2008. With our strong 
balance sheet, Keppel endeavours to 
draw from the lessons and experiences 
in past crises to strengthen our 
businesses, maintain leaner operations 
and enhance our value proposition to 
customers. As we meet the challenges 
in these difﬁ cult market conditions, we 
are also preparing for the future.

While fundamentals in the Offshore 
& Marine business remain intact, the 
global ﬁ nancial turmoil and declining 
oil prices have affected the industry 
resulting in fewer rig orders. Shiprepair 
is also expected to be affected by 
slumping freight rates and more vessels 
being laid up. However, the demand 
for Floating Production Storage and 
Ofﬂ oading conversions remains stable. 
The outstanding orderbook of $10.8 
billion with deliveries into 2012 will keep 
Keppel Offshore & Marine’s yards busy 
for a few more years.

Offshore & Marine Division will 
continue to be the largest contributor 
to the proﬁ t of the Group. The Division 
is harnessing its resources to be the 
solutions provider of choice through 
ﬁ rst-class execution, proactive 
technology development and 
implementation of its “Near Market, 
Near Customer” strategy. It is also 
reviewing its assets, systems and 
processes to make them work harder 
so that greater value can be extracted. 
The Division is also stringent in project 
selection, tracking down payments and 
progress payments to ensure projects 
remain cash ﬂ ow positive.

The current focus of Keppel’s top management is to steer the Group to emerge stronger from this 
economic downturn. 

Sales of Singapore and regional private 
residential properties were subdued 
in 2008. Looking ahead, the regional 
property market will continue to remain 
soft with fewer sales transactions 
and declining prices. The progressive 
recognition of revenue and proﬁ ts of 
residential properties sold in the past 
two years is expected to provide some 
respite for the Property Division, until 
conﬁ dence returns to the market. 

The demographic fundamentals of the 
countries that we operate in are still 
intact and with regional governments 
aggressively introducing stimulus 
measures, hopefully market conﬁ dence 
can be shored up and that would 
encourage home purchases, especially 
with lower mortgage rates and tax 
incentives. Keppel Land is monitoring the 
markets and will launch its projects if and 
when conditions are appropriate. The 
Division, with its healthy balance sheet 
and a tighter operation, is poised to ride 
through the current weakness and seize 
opportunity as the market stabilises.

The credit crunch has also affected the 
number of new infrastructure projects 
coming onstream. This will impact the 
Infrastructure Division which has seen 
its PATMI in 2008 risen more than 
double the level achieved in 2007. 

The Division has a mix of different 
businesses and projects at varying 
stages of growth and development. 
Constructions of its projects are 

progressing on track, and the 
scheduled payments are expected to 
provide the Division with a core base 
of revenue and proﬁ ts. Environmental 
Engineering will continue to seek out 
opportunities to offer technologically-
advanced cost-effective solutions 
to its customers. Power Generation 
is focusing on delivering stronger 
earnings from its existing power 
assets, and evaluating possible areas 
of growth. Logistics is also taking 
advantage of the current climate to 
cautiously increase its capacity. 

While the crisis has impacted 
Singapore Petroleum Company’s 
(SPC) performance, it also presents 
opportunities for the company to realise 
its vision as an integrated oil and gas 
company during this downturn. With low 
gearing and no long-term borrowings 
to reﬁ nance, SPC is ﬁ nancially robust 
and will continue to invest prudently 
to beneﬁ t from an eventual recovery 
of the global economy.  

Shareholder Returns
Return on Equity increased from 
21.8% in 2007 to 22.4% in 2008, 
reﬂ ecting our effort to pursue higher 
returns for our shareholders.

The Company will be paying a ﬁ nal 
dividend of 21 cents per share. 
Together with the interim dividend 
of 14 cents per share, total dividend 
for 2008 is 35 cents per share. In 
the previous year, total dividend of 

Operating & Financial Review
Financial Review and Outlook

87

Operating & Financial Review
Financial Review and Outlook

Shareholder Returns

Capital
distribution
6.0cts
per share

Capital
distribution
9.0cts
per share

Capital
distribution
10.0cts
per share

Capital
distribution
11.5cts
per share

Capital
distribution
14.0cts
per share

Special
dividend
45.0cts
per share

Plus

Plus

Plus

Plus

Plus

Plus

35.0cts

19.0cts

21.8%

22.4%

14.0cts

19.1%

9.0cts

9.5cts

10.0cts

11.5cts

13.4%

14.1%

15.5%

16.4%

2002

2003

2004

2005

2006

2007

2008

ROE

Full-year dividend

64 cents per share included a special 
dividend of 45 cents to commemorate 
the Company’s 40th anniversary since 
its incorporation. Total payout for 2008 
represents 51% of Group PATMI. This 
is equivalent to a gross yield of 8.1% 
on the Company’s last transacted 
share price as at 31 December 2008.

The distribution to shareholders is paid 
on account of increased proﬁ tability 
and strong operational cash ﬂ ow. We 
are committed to reward shareholders 
with generous payouts as we achieve 
healthy year-on-year improvement in 
earnings growth.

Economic Value Added (EVA) 
EVA increased by $88 million to 
$692 million in 2008. This was 
attributable to higher operating proﬁ t 
coupled with lower capital charge.

Net Operating Proﬁ t After Tax (NOPAT) 
increased by $60 million due to an 

Economic Value Added (EVA)
Proﬁ t after tax & exceptional items
Adjustment for:
Interest expense
Interest expense on non-capitalised leases
Tax effect on interest expense adjustments1
Provisions, deferred tax, amortisation & other adjustments
Net Operating Proﬁ t After Tax (NOPAT)

Average EVA Capital Employed2
Weighted Average Cost of Capital3
Capital Charge

2008
$ million

08v07
+/(-)

2007
$ million

07v06
+/(-)

2006
$ million

1,149

+87

1,062

+172

890

105
20
(18)
33
1,289

-29
–
+1
+1
+60

134
20
(19)
32
1,229

+24
+1
-2
+21
+216

8,848
-102
6.75% -0.24%
+28

(597)

8,950
-132
6.99% +0.49%
-35

(625)

110
19
(17)
11
1,013

9,082
6.50%
(590)

Economic Value Added

692

+88

604

+181

423

Comprising:
EVA excluding exceptional items
EVA of exceptional items

855
(163)
692

+76
+12
+88

779
(175)
604

+363
-182
+181

416
7
423

1  The reported current tax is adjusted for statutory tax impact on interest expenses.
2  Average EVA Capital Employed is derived from the quarterly averages of net assets plus interest-bearing liabilities, provision and present value of operating leases.
3  Weighted Average Cost of Capital is calculated in accordance with the Keppel Group EVA Policy as follows:
  a  Cost of Equity using Capital Asset Pricing Model with market risk premium set at 6% (2007: 6%);
  b  Risk-free rate of 2.7797% (2007: 3.041%) based on yield-to-maturity of Singapore Government 10-year Bonds;
  c  Unlevered beta at 0.72 (2007: 0.72); and
  d  Pre-tax Cost of Debt at 3.43% (2007: 3.72%) using ﬁ ve-year Singapore Dollar Swap Offer Rate plus 40 basis points (2007: 40 basis points).

88

Keppel Corporation Limited 
Report to Shareholders 2008

EVA ($ million)

692

+88

604

+181

423

+224

199

+164

35

+160

+170

(125)

+370

(295)

(665)

2001

2002

2003

2004

2005

2006

2007

2008

Total Assets Owned
($ million)

Total Liabilities Owed and 
Capital Invested ($ million)

16,747

16,747

15,797

 1,698

 3,133

 4,024

 2,791

 2,550

13,901

 1,741

2,446

 3,113

 2,862

 2,120

 1,619

 1,601

 1,873

 3,205

 3,633

 3,217

 2,574

 2,245

15,797

4,596

 2,153

 5,205

 1,830

13,901

 4,205

 1,393

 7,647

 6,139

 5,188

 1,970
 381

 2,234

 389

 2,957

 158

2006

2007

2008

2008

2007

2006

  Fixed assets

  Properties

  Investments

  Shareholders’ funds

  Minority interests

  Creditors

  Stocks & work-in-progress

  Term loans & bank overdrafts

  Debtors & others

  Other liabilities

  Bank balances, deposits & cash

improvement in proﬁ t after tax of 
$87 million. Capital charge decreased 
by $28 million as a result of lower 
Weighted Average Cost of Capital (WACC) 
and EVA Capital. WACC declined from 
6.99% to 6.75% largely attributable 
to lower pre-tax cost of debt. Average 
EVA Capital decreased by $102 million 
from $8.95 billion to $8.85 billion.

The Group’s resources have been more 
effectively deployed to further enhance 
shareholder value. This is reﬂ ected in 
the positive and growing EVA that we 
have been achieving since 2004. 

Financial Position
Total assets of $16.75 billion at 
31 December 2008 were $0.95 billion 
or 6.0% higher than the previous 
year-end. Fixed assets rose as a result 
of capital expenditure. Investment 
properties was higher due to Ocean 
Financial Centre redevelopment cost. 
Increase in associated companies was 
attributable to equity accounting for 
share of proﬁ ts and further investment 
in Marina Bay Financial Centre. 

Increase in long-term receivables was 
due to expenditure on the waste-
to-energy plant at Tuas which was 
accounted for as lease receivable in 
accordance with prescribed accounting 
standard. Increase in stocks & work-
in-progress was due to expenditure 
on trading properties and increased 
activities in Offshore & Marine Division. 
Debtors was higher as a result of 
higher billings in Offshore & Marine and 
Infrastructure Divisions. These were 
partly offset by decrease in amount 
due from associated companies 
because of repayment of advances 
and decrease in investments due to fair 
value adjustments of ﬁ nancial assets 
and sale of equities during the year.

Shareholders’ funds decreased from 
$5.20 billion at 31 December 2007 to 
$4.60 billion at 31 December 2008. 
The decrease was attributed mainly 
to total payout of $1,098 million 
comprising ﬁ nal and special dividends 
in respect of ﬁ nancial year 2007 and 

Operating & Financial Review
Financial Review and Outlook

89

Operating & Financial Review
Financial Review and Outlook

interim dividend in respect of the ﬁ rst 
half year ended 30 June 2008 and 
reduction in fair value and hedging 
reserves, partly offset by retained 
proﬁ ts for the year.

Minority interests increased because 
of share of proﬁ ts and proceeds from 
the rights issue of K-REIT Asia and 
Evergro Properties.

Total liabilities of $10.0 billion at 
31 December 2008 were $1.24 billion 
or 14.1% higher than the previous 
year-end. Increase in creditors was 
due mainly to higher operating activities 
in Offshore & Marine and Infrastructure 
Divisions. Higher billings on work-in-
progress in excess of related cost was 
attributable mainly to deposits received 
for new jobs and milestone billings for 
contracts in Offshore & Marine Division. 
Amount due to associated companies 
was higher because of deposits 
received from SPC.

Net cash was $275 million compared 
to Group net borrowings of $634 million 
at the previous year-end due to strong 
operational cash ﬂ ow.

Total Shareholder Return (TSR)
Keppel’s Total Shareholder Return 
(TSR) for 2008 declined to a negative 

64% from a positive 52% the year 
before. This was 17% below the 
benchmark Straits Times Index’s 
(STI) TSR of negative 47% in the same 
period. This was notwithstanding the 
consistent strong dividend payout of 
64 cents and 35 cents for the ﬁ nancial 
years 2007 and 2008 respectively. 

The decline is due mainly to weak 
sentiments as a result of the deepening 
global crisis that began with the US 
sub-prime and ﬁ nancial meltdowns 
in the second half of 2007. Despite 
the sharp decline in value in 2008, 
Keppel’s Compounded Annual Growth 
Rate (CAGR) TSR over the last eight 
years was at 20%, which is almost 
double the STI’s CAGR TSR of 11% 
for the same period.

We are focused on managing the 
current market uncertainties while 
continuing to prune and rationalise 
our businesses to realise their 
synergies. We will also remain steadfast 
in prudently identifying, developing 
and building growth platforms. Just 
as our consistent execution of our 
strategies has contributed to a CAGR 
for PATMI of 22% over the last seven 
years, we are committed to deliver 
value to shareholders through 
earnings growth. 

Total Shareholder Return (%)

75.2

37.6

48.7

32.5

65.3

51.7

21.6

38.3

32.4

19.3

21.0

2.0

(18.2)

(20.0)

(13.4)

(14.5)

2000

2001

2002

2003

2004

2005

2006

2007

2008

(47.1)

(64.4)

90

Keppel Corporation Limited 
Report to Shareholders 2008

Cash Flow
Net cash from operating activities 
was $2,047 million compared to 
$1,697 million in the previous year. 
This was contributed mainly by the 
increased operating proﬁ t and positive 
working capital changes.

Net cash used in investing activities 
was $171 million. The Group spent 
$563 million on acquisitions and 
operational capital expenditure. 
This comprised principally further 
investments in Marina Bay Financial 
Centre, capital expenditure on yards 
development and other operational 
capital expenditure. Divestment and 
dividend received totalled $392 million.

As a result, free cash ﬂ ow increased 
from $1,151 million in the previous 
year to $1,876 million.

Total distribution to shareholders of the 
Company and minority shareholders 
of subsidiaries for the year amounted 
to $1,201 million, an increase of 135% 
compared to the previous year.

Financial Risk Management
The Group operates internationally 
and is exposed to a variety of ﬁ nancial 
risks, including market risk (foreign 
currency exchange rates, interest 
rates and commodity/equity prices), 
credit risk and liquidity risk. Financial 
risk management is carried out by the 
Keppel Group Treasury Department 
in accordance with established policies 
and guidelines.

These policies and guidelines are 
established by the Group Central 
Finance Committee and regularly 
updated to take into account changes 
in the operating environment. This 
committee is chaired by the Group 
Finance Director and comprises Chief 
Financial Ofﬁ cers of the Group’s key 
operating companies and Head 
Ofﬁ ce specialists.

Keppel

STI

The Group’s ﬁ nancial risk management 
is discussed in more detail in the notes 
to the ﬁ nancial statements. In summary:

Cash Flow
Operating proﬁ t
Depreciation, amortisation & other non-cash items
Cash ﬂ ow provided by operations before changes in working capital
Working capital changes
Interest receipt and payment & tax paid
Net cash from operating activities

Divestments
Investments & capital expenditure
Dividend income
Net cash used in investing activities

2008
$ million

08v07
+/(-)

2007
$ million

07v06
+/(-)

2006
$ million

1,238
158
1,396
852
(201)
2,047

19
(563)
373
(171)

+187
+19
+206
+214
-70
+350

-13
278
+110
+375

1,051
139
1,190
638
(131)
1,697

32
(841)
263
(546)

+247
-8
+239
-367
-29
-157

-146
-82
+56
-172

804
147
951
1,005
(102)
1,854

178
(759)
207
(374)

Free cash ﬂ ow

1,876

+725

1,151

-329

1,480

Dividend paid to shareholders of the Company & subsidiaries

(1,201)

-690

(511)

-101

(410)

(cid:129)  The Group has receivables and 

(cid:129)  The Group hedges against price 

payables denominated in foreign 
currencies viz US dollars, European 
and other Asian currencies. Foreign 
currency exposures arise mainly 
from the exchange rate movement 
of these foreign currencies against 
the Singapore dollar, which is the 
Group’s measurement currency. 
The Group utilises forward foreign 
currency contracts to hedge its 
exposure to speciﬁ c currency 
risks relating to receivables and 
payables. The bulk of these forward 
foreign currency contracts are 
entered into to hedge any excess 
US dollars arising from Offshore 
& Marine contracts based on the 
expected timing of receipts. The 
Group does not engage in foreign 
currency trading;

ﬂ uctuations arising on purchase of 
natural gas. Exposure is managed 
via fuel oil forward contracts, 
whereby the price of natural gas is 
indexed to a benchmark fuel price 
index, High Sulphur Fuel Oil (HSFO) 
180-CST;

(cid:129)  The Group maintains a mix of 

ﬁ xed and variable rate debt/loan 
instruments with varying maturities. 
Where necessary, the Group uses 
derivative ﬁ nancial instruments to 
hedge interest rate risks. This may 
include interest rate swaps and 
interest rate caps; 

(cid:129)  The Group maintains ﬂ exibility in 
funding by ensuring that ample 
working capital lines are available at 
any one time; and

(cid:129)  The Group adopts stringent 

Debt Maturity ($ million)

< 1 Year

1–2 Years

2–3 Years

3–4 Years

4–5 Years

> 5 Years

  198

  298

277

  91

57

  1,021

procedures on extending credit 
terms to customers and the 
monitoring of credit risk. 

Borrowings
The Group borrows from local and 
foreign banks in the form of short-term 
and long-term loans, project loans 
and bonds. At the end of 2008, 10% 
(2007: 22% and 2006: 23%) of Group 
borrowings were repayable within one 
year with the balance largely repayable 
between two to ﬁ ve years.

Unsecured borrowings constituted 
69% (2007: 70% and 2006: 38%) 
of total borrowings with the balance 
secured by properties and assets. 
Secured borrowings are mainly for 
ﬁ nancing investment properties and 
project ﬁ nancing loans for property 
development projects. The net book 
value of properties and assets pledged/
mortgaged to ﬁ nancial institutions 
amounted to $2.81 billion (2007: 
$1.83 billion and 2006: $1.97 billion).

Fixed rate borrowings constituted 48% 
(2007: 50% and 2006: 41%) of total 
borrowings with the balance at ﬂ oating 
rates. The Group has interest rate 
swap agreements with notional amount 
totalling $348 million whereby it 
receives variable rates equal to SIBOR 

Operating & Financial Review
Operating & Financial Review
Financial Review and Outlook
Financial Review and Outlook

91

Operating & Financial Review
Financial Review and Outlook

and pays ﬁ xed rates of between 3.19% 
and 3.50% on the notional amount. 
The Group also has interest rate cap 
agreements to hedge the interest rate 
risk exposure arising from its US dollar 
and Singapore dollar variable rate term 
loans. As at the end of the ﬁ nancial 
year, the Group has outstanding 
interest rate cap agreements of 
$53 million. Details of these derivative 
instruments are disclosed in the notes 
to the ﬁ nancial statements.

Singapore dollar borrowings represented 
94% (2007: 76% and 2006: 93%) 
of total borrowings. The balances 
were in US dollar, European and 
other Asian currencies. Foreign 
currencies borrowings were drawn 
to hedge against the Group’s overseas 
investments and receivables, which 
were denominated in foreign currencies.

Capital Structure 
& Financial Resources
The Group maintains a strong balance 

sheet and an efﬁ cient capital structure 
to maximise return for shareholders. 
The strong operational cash ﬂ ow of 
the Group and divestment proceeds 
from low yielding and non-core assets 
will provide resources to grow the 
Group’s businesses.

Every new investment will have to 
satisfy strict criteria for return on 
investment, cash ﬂ ow generation, 
EVA creation and risk management. 
New investments will be structured 
with an appropriate mix of equity 
and debt after careful evaluation 
and management of risks.

Capital Structure
Capital employed at the end of 2008
was $6.75 billion, a decrease 
of $286 million over 2007 and an 
increase of $1.15 billion over 2006. 
The Group was in a net cash position 
of $275 million at the end of 2008 
compared to net borrowings of 
$634 million in 2007 and $1.34 billion 

in 2006. With strong cash ﬂ ow, the 
Group’s net cash was 0.04 times at 
the end of 2008.

Interest coverage improved from 
9.85 times in 2006 to 17.46 times in 
2008. This was achieved on increasing 
EBIT despite the escalating cost of funds.

Cash ﬂ ow coverage increased from 
16.20 times in 2006 to 22.32 times in 
2008. Cash ﬂ ow coverage remained 
healthy due to the robust operating 
cash ﬂ ow generated by the Group.

At the Annual General Meeting in 
2008, shareholders gave their approval 
for mandates to issue and buy back 
shares. The Company did not exercise 
these mandates.

Financial Resources
As part of its liquidity management, 
the Group has built up adequate cash 
reserves and short-term marketable 
securities and sufﬁ cient undrawn 

Net Cash / (Gearing)
($ million / No. of times)

Interest Coverage
($ million / No. of times)

Cash Flow Coverage
($ million / No. of times)

Net Gearing =

 Borrowings - Cash
  Capital Employed

Interest Coverage =

        EBIT
Interest Cost

Cash Flow
Coverage

=

Operating Cash Flow 
+ Interest Cost 
Interest Cost

7,035

6,749

1,619

1,676

2,143

22.32

5,598

275

0.04

(0.09)

(0.24)

(634)

(1,339)

17.46

1,976

1,813

16.20

15.63

1,202

13.96

9.85

122

116

96

122

116

96

2006

2007

2008

2006

2007

2008

2006

2007

2008

  Net Cash / (Debt)

  Capital Employed

  Net Cash / (Gearing)

  EBIT

  Total Interest Cost

  Interest Cover

  Operating Cash Flow + Interest

  Total Interest Cost

  Cash Flow Coverage

92

Keppel Corporation Limited 
Report to Shareholders 2008

 
$ million

Remarks

Financial Capacity
Cash at Corporate Treasury
Credit facilities extended to the Group
Total

1,040
4,208
5,248

46% of total cash of $2.24 billion
Credit facilities of $5.44 billion, of which $1.23 billion was utilised

banking facilities and capital market 
programme. Funding of working 
capital requirements, capital 
expenditure and investment needs 
is made through a mix of short-term 
money market borrowings 
and medium/long-term loans.

Due to the dynamic nature of its 
businesses, the Group maintains 
ﬂ exibility in funding by ensuring 
that ample working capital lines are 
available at any one time. Cash ﬂ ow, 
debt maturity proﬁ le and overall liquidity 
position is actively reviewed on an 
ongoing basis.

The Group has further strengthened 
its ﬁ nancial capacity during the year. 
As at end of 2008, total funds available 
and unutilised facilities amounted 
to $5.25 billion.

Critical Accounting Policies
The Group’s signiﬁ cant accounting 
policies are discussed in more detail 
in the notes to the ﬁ nancial statements. 
The preparation of ﬁ nancial statements 
requires management to exercise its 
judgement in the process of applying 
the accounting policies. It also requires 
the use of accounting estimates and 
assumptions which affect the reported 
amounts of assets, liabilities, income 
and expenses. Critical accounting 
estimates and judgement are 
described below.

Impairment of Fixed Assets
Determining whether ﬁ xed asset 
value is impaired requires an 
estimation of the value in use of the 
cash-generating units. This requires the 
Group to estimate the future cash ﬂ ows 
expected from the cash-generating 
units and an appropriate discount rate 
in order to calculate the present value 
of the future cash ﬂ ows.

Impairment of Goodwill
Determining whether goodwill is 
impaired requires an estimation of the 
value in use of the cash-generating 
units to which the goodwill is allocated. 
This requires the Group to estimate 
the future cash ﬂ ows expected from 
the cash-generating units and an 
appropriate discount rate in order 
to calculate the present value of 
the future cash ﬂ ows.

Impairment of Available-for-
Sale Investments
The Group follows the guidance of 
FRS 39 in determining whether 
available-for-sale investments are 
considered impaired. The Group 
evaluates, among other factors, the 
duration and extent to which the fair 
value of an investment is less than 
its cost, the ﬁ nancial health of and 
the near-term business outlook of 
the investee, including factors such 
as industry and sector performance, 
changes in technology and operational 
and ﬁ nancing cash ﬂ ow.

Revenue Recognition
The Group recognises contract 
revenue based on the stage of 
completion method which is measured 
by reference to the proportion of 
contract work completed. Signiﬁ cant 
assumption is required in determining 
the stage of completion, the extent 
of the contract cost incurred, the 
estimated total contract revenue and 
contract cost and the recoverability 
of the contracts. In making the 
assumption, the Group evaluates by 
relying on past experience and the 
work of specialists.

Revenue arising from additional 
claims and variation orders, whether 
billed or unbilled, is recognised when 
negotiations have reached 

an advanced stage such that it 
is probable that the customer will 
accept the claims or approve the 
variation orders, and the amount that 
it is probable will be accepted by the 
customer can be measured reliably.

Income Taxes
The Group has exposure to income 
taxes in numerous jurisdictions. 
Signiﬁ cant assumption is required 
in determining the provision for 
income taxes. There are certain 
transactions and computations for 
which the ultimate tax determination is 
uncertain during the ordinary course 
of business. The Group recognises 
liabilities for expected tax issues based 
on estimates of whether additional 
taxes will be due. Where the ﬁ nal tax 
outcome of these matters is different 
from the amounts that were initially 
recognised, such differences will 
impact the income tax and deferred 
tax provisions in the period in which 
such determination is made.

Claims and Litigations
The Group entered into contracts 
with third parties and is exposed to 
the risk of claims and litigations. 
These can arise for various reasons, 
including change in scope of work, 
delay and disputes, or defective 
speciﬁ cations etc. The scope, 
enforceability and validity of any 
potential claim and litigation may 
be highly uncertain. In making its 
judgement as to whether the claim 
or litigation could have a material 
impact, management relies on past 
experience and the opinion of legal 
and technical expertise.

Operating & Financial Review
Operating & Financial Review
Financial Review and Outlook
Financial Review and Outlook

93

94

Keppel Corporation Limited 
Report to Shareholders 2008

Sustainability 
Report

Keppel has key businesses in Offshore & Marine, 
Property and Infrastructure. Harnessing our core 
competencies, we continue to grow beyond, 
creating sustainable developments to improve 
the environment and quality of living.  

As we celebrate our 40th 
anniversary, we continue 
to drive a difference with 
our strategic thrusts of 
Sustaining Growth in our 
businesses, Empowering 
Lives of our people and 
Nurturing Communities 
where we operate.  

This report describes our 
efforts in 2008 to drive 
forward these commitments 
as well as our directions for 
2009 and beyond. For us, 
fulﬁ lling our commitments 
begins with having a 
different mindset. We 
see ourselves as a global 
corporate citizen with 
roots that trace back to 
Singapore’s ﬁ ght for survival 
and nationhood some 40 
years ago. Against that 

backdrop and as a ﬂ edgling 
shiprepair yard, we grew 
with the nation to become a 
ﬁ nancially strong corporation 
with robust businesses.  

Today, we are delivering 
more with these strategic 
thrusts. We leverage 
innovation and technology, 
invest in continuous 
Research and Development 
(R&D), exercise strong 
corporate governance and 
synergise Group strengths.

People are important to 
us. As a Group, we touch 
lives through training 
and grooming talent, 
encouraging work-life 
balance and instilling 
a culture of safety and 
excellence. Career 

development and succession 
planning are cornerstones 
for the high performance of 
our businesses. 

We believe in giving back 
to the communities where 
we operate – contributing 
to society, caring for the 
environment, cultivating 
appreciation of the arts, 
responding to humanitarian 
needs and driving corporate 
volunteerism. 

Across the globe, more 
than 35,000 Keppelites 
drive Keppel’s growth into 
the future.

Forward Keppel… 
40 years and beyond.

Sustainability Report

95

Sustainability Report

Contents
96 

Sustainable Development Framework

SUSTAINING GROWTH
97  Corporate Governance
117  Risk Management
119  Technology Development
122  Environment Protection

EMPOWERING LIVES
126  People Development
131  Health and Safety

NURTURING COMMUNITIES
132  Society and Environment
136  Community Involvement

Nurturing 
Communities

Keppel’s
Sustainable
Development
Framework

Sustaining 
Growth

Empowering 
Lives

96

Keppel Corporation Limited 
Report to Shareholders 2008

 
Sustaining Growth
Corporate Governance

Strong corporate governance 
enables us to achieve our 
goal of growing sustainable 
businesses with greater 
conﬁ dence and efﬁ cacy.

Sustainability Report
Sustaining Growth

97

Sustaining Growth
Corporate Governance

Code of Corporate Governance 2005
Speciﬁ c Principles and Guidelines for Disclosure

Relevant guideline or principle 

Page reference in this report

Guideline 1.3
Delegation of authority, by the board to any board committee, to make decisions on certain board matters  

Pages 99 and 100

Guideline 1.4 
The number of board and board committee meetings held in the year, as well as the attendance  
of every board member at these meetings

Guideline 1.5
The type of material transactions that require board approval under internal guidelines 

Guideline 2.2
Where the company considers a director to be independent in spite of the existence of a relationship    
as stated in the Code that would otherwise deem him as non-independent, the nature of the director’s 
relationship and the reason for considering him as independent should be disclosed

Page 99

Page 100

Page 101

Guideline 3.1
Relationship between the Chairman and CEO where they are related to each other 

  Not Applicable

Guideline 4.1
Composition of nominating committee 

Guideline 4.5
Process for selection and appointment of new directors to the board 

Page 102

Page 103

Guideline 4.6
Key information regarding directors, which directors are executive, non-executive or considered  
by the nominating committee to be independent 

Pages 213 to 216
and 220

Guideline 5.1
Process for assessing the effectiveness of the board as a whole and the contribution of each individual   Pages 104, 105,  
director to the effectiveness of the board 

115 and 116

Principle 9
Clear disclosure of its remuneration policy, level and mix of remuneration, procedure for setting  
remuneration and link between remuneration paid to directors and key executives, and performance

Pages 106 to 109

Guideline 9.1
Composition of remuneration committee 

Guideline 9.2
Names and remuneration of each director. The disclosure of remuneration should be in bands of  
$250,000. There will be a breakdown (in percentage terms) of each director’s remuneration earned 
through base/ﬁ xed salary, variable or performance-related income/bonuses, beneﬁ ts in kind, 
and stock options granted and other long-term incentives

Names and remuneration of at least the top ﬁ ve key executives (who are not also directors).  
The disclosure should be in bands of $250,000 and include a breakdown of remuneration

Page 106

Pages 108 and 109

Guideline 9.3
Remuneration of employees who are immediate family members of a director or the CEO, and whose    
remuneration exceed $150,000 during the year. The disclosure should be made in bands of $250,000 
and include a breakdown of remuneration

Page 110

Guideline 9.4
Details of employee share schemes 

Guideline 11.8
Composition of audit committee and details of the committee’s activities 

Guideline 12.2
Adequacy of internal controls, including ﬁ nancial, operational and compliance controls,  
and risk management systems

Pages 148, 149,  
167 to 169

Pages 110 to 112

Pages 111 to 112

98

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Board’s Conduct of Affairs 
Principle 1: Effective board 
to lead and control the company

The principal functions of the board are to:
(cid:129)  decide on matters in relation to 
the Group’s activities which are 
of a signiﬁ cant nature, including 
decisions on strategic directions 
and guidelines and the approval 
of periodic plans and major 
investments and divestments;
(cid:129)  oversee the business and affairs 
of the Company, establish, with 
management, the strategies 
and ﬁ nancial objectives to be 
implemented by management, 
and monitor the performance 
of management;

(cid:129)  oversee processes for evaluating 
the adequacy of internal controls, 
risk management, ﬁ nancial 
reporting and compliance, and 
satisfy itself as to the adequacy 
of such processes; and

(cid:129)  assume responsibility for corporate 

governance.

All directors are expected to exercise 
independent judgment in the best 
interests of the Company. This is 
one of the performance criteria for 
the peer and self assessment on the 
effectiveness of the individual directors. 

Based on the results of the peer and 
self assessment carried out by the 
directors, all directors have discharged 
this duty consistently well.

To assist the board in the discharge 
of its oversight function, various 
board committees, namely the Audit 
Committee, Board Risk Committee, 
Nominating Committee, Remuneration 
Committee, and Executive Committee, 
have been constituted with clear 
written terms of reference. All the board 
committees are actively engaged and 
play an important role in ensuring good 
corporate governance in the Company 
and within the Group. In addition, a 
Board Safety Committee was formed in 
January 2006. The terms of reference 
of the respective board committees are 
disclosed in the Appendix to this report.

The board meets six times a year 
and as warranted by particular 
circumstances. Telephonic attendance 
and conference via audio-visual 
communication at board meetings are 
allowed under the Company’s Articles 
of Association. The number of board 
and board committee meetings held in 
FY 2008, as well as the attendance of 
each board member at these meetings, 
are disclosed below:

Lead Independent Director Mr Tony Chew 
Leong-Chee.

The board and management of 
Keppel Corporation Limited (“KCL” 
or the “Company”) ﬁ rmly believe 
that a genuine commitment to good 
corporate governance is essential to 
the sustainability of the Company’s 
businesses and performance, and are 
pleased to conﬁ rm that the Company has 
adhered to the principles and guidelines 
of the Code of Corporate Governance 
20051 (the “2005 Code”), 2save for 
Guideline 3.1 (Chairman and CEO should 
be separate persons) the reason for 
which deviation is explained below.

The following describes the Company’s 
corporate governance practices with 
speciﬁ c reference to the 2005 Code.

Board Meetings

Audit

Executive

Nominating Remuneration

Safety

Risk

Board Committee Meetings

Non-executive 
Directors’ Meeting 
(without presence of 
management)

Lim Chee Onn

Tony Chew Leong-Chee 

Lim Hock San

Sven Bang Ullring 

Tsao Yuan Mrs Lee Soo Ann

Oon Kum Loon3

Tow Heng Tan

Yeo Wee Kiong

Choo Chiau Beng

Teo Soon Hoe

Number of meetings held

6

7

6

7

6

7

6

6

7

7

7

–

5

5

–

–

5

–

–

–

–

5

–

–

–

–

–

–

–

–

–

–

0

–

–

–

3

3

3

–

–

–

–

3

–

–

–

5

5

2 of 2

2

–

–

–

5

2

–

–

3

2

–

–

2

–

–

3

–

–

4

–

–

4

1

2

–

–

4

–

3

3

3

3

3

3

3

–

–

3

1  The Code of Corporate Governance 2005 issued by the Ministry of Finance on 14 July 2005.
2  On 22 December 2008, the Company announced that with effect from 1 January 2009, Mr Lim Chee Onn would relinquish his role as Chief Executive Ofﬁ cer but   
  would continue to serve as Chairman of the Company, and that Mr Choo Chiau Beng would assume the role of Chief Executive Ofﬁ cer of the Company.  
3  Mrs Oon Kum Loon was appointed a member of the Remuneration Committee with effect from 1 May 2008.   

Sustainability Report
Sustaining Growth

99

Sustaining Growth
Corporate Governance

1

2

1  Board members recognise that a safe and 
healthy working environment is one of the 
critical success factors contributing to 
superior business environment. 

2  Overseeing the Company’s various 

businesses, Keppel’s board members visit 
the Group’s facilities including the Keppel 
Merlimau Co-generation Power Plant.

The Company has adopted internal 
guidelines setting forth matters that 
require board approval. Under these 
guidelines, new investments or increase 
in investments and divestments 
exceeding $100 million by any Group 
company, and all commitments to 
term loans and lines of credit from 
banks and ﬁ nancial institutions by 
the Company, require the approval 
of the board. Further, any investment 
of $100 million and below but which 
does not have strategic ﬁ t with any of 
the Company’s core businesses, is 
not EVA positive, or does not generate 
Return on Equity of at least 12% on 
a standalone basis, would require 
speciﬁ c board approval. Each board 
member has equal responsibility to 
oversee the business and affairs of the 
Company. Management on the other 
hand is responsible for the day-to-
day operation and administration of 

the Company in accordance with the 
policies and strategy set by the board.

A formal letter is sent to newly-
appointed directors upon their 
appointment explaining their duties 
and obligations as director. All 
newly-appointed directors undergo 
a comprehensive orientation 
programme which includes 
management presentations on the 
Group’s businesses and strategic 
plans and objectives, and site visits.

The directors are provided with 
continuing education in areas such as 
directors’ duties and responsibilities, 
corporate governance, changes in 
ﬁ nancial reporting standards, insider 
trading, changes in the Companies 
Act and industry-related matters, 
so as to update and refresh them on 
matters that affect or may enhance 

100

Keppel Corporation Limited 
Report to Shareholders 2008

their performance as board or board 
committee members. By way of an 
example, some directors attended 
the course on “Making Corporate 
Boards More Effective” at the Harvard 
Business School from 5 to 8 November 
2008. The key “take-aways” were 
discussed at the board meeting 
immediately following the course.  

Board Composition 
and Guidance
Principle 2: Strong and 
independent element on the Board

To carry out its oversight function 
well, the board must be an effective 
board which can lead and control the 
business of the Group. The directors 
believe that, in view of the many 
complex businesses that the Company 
is involved in, the board should 
comprise executive directors, who have 
intimate knowledge of the business, 
and independent directors, who can 
take a broader view of the Group’s 
activities and bring independent 
judgment to bear on issues for the 
board’s consideration.

The Nominating Committee determines 
on an annual basis whether or not a 
director is independent, bearing in 
mind the 2005 Code’s deﬁ nition of an 
“independent director” and guidance 
as to relationships the existence of 
which would deem a director not to 
be independent. The Nominating 
Committee also deems a director who 
is directly associated with a substantial 
shareholder as non-independent, 
although such a relationship has 
not been expressly adopted in the 
2005 Code as one that would deem 
a director not to be independent. 
Mr Tow Heng Tan, who is Chief 
Investment Ofﬁ cer, Temasek Holdings, 
is therefore deemed non-independent 
by the Nominating Committee.

The Nominating Committee is of the 
view that, taking into account the 
nature and scope of the Company’s 
businesses, the board should consist 
of 9 to 11 members. The board 

currently has majority independent 
directors with a total of 10 directors 
of whom 6 are independent.

The nature of the directors’ appointments 
on the board and details of their 
membership on board committees 
are set out in the Appendix hereto.

The Nominating Committee is satisﬁ ed 
that the board comprises directors who 
as a group provide core competencies 
such as accounting or ﬁ nance, 
business or management experience, 
industry knowledge, strategic planning 
experience and customer-based 
experience or knowledge, required 
for the board to be effective. The 
Nominating Committee and the board 
will nevertheless continue to look out 
for suitable candidates to strengthen the 
board and board committees.

The board and management fully 
appreciate that fundamental to good 
corporate governance is an effective 
and robust board whose members 
engage in open and constructive 
debate and challenge management 
on its assumptions and proposals, 
and that for this to happen, the 
board, in particular, the non-executive 
directors, must be kept well informed 
of the Company’s businesses and 
affairs and be knowledgeable about 
the industry in which the businesses 
operate. The Company has therefore 
adopted initiatives to put in place 
processes to ensure that the non-
executive directors are well supported 
by accurate, complete and timely 
information, have unrestricted access 
to management, and have sufﬁ cient 
time and resources to discharge their 
oversight function effectively. These 
initiatives include regular informal 
meetings for management to brief the 
directors on prospective deals and 
potential developments at an early 
stage before formal board approval is 
sought, and the circulation of relevant 

information on business initiatives, 
industry developments and analyst 
and press commentaries on matters 
in relation to the Company or the 
industries in which it operates. 
A two-day off-site board strategy 
meeting is organised every two years 
for in-depth discussions on strategic 
issues, to give the non-executive 
directors a better understanding of 
the Group and its businesses, and 
to provide an opportunity for the 
non-executive directors to familiarise 
themselves with the management team 
to facilitate the board’s review of the 
Company’s succession planning and 
leadership development programme. 
The Company has also made available 
on the Company’s premises an ofﬁ ce 
for the non-executive directors’ use 
at any time to facilitate direct access 
to management. 

The board’s non-executive directors 
meet regularly without the presence 
of management to discuss matters 
such as board processes, corporate 
governance initiatives, matters which 
they wish to cover during the board 
off-site strategy meeting, succession 
planning and leadership development, 
and remuneration matters.

Chairman and 
Chief Executive Ofﬁ cer
Principle 3: Chairman and Chief 
Executive Ofﬁ cer to be separate 
persons to ensure appropriate 
balance of power, increased 
accountability and greater capacity 
of the board for independent 
decision-making

Mr Lim Chee Onn was both the 
Chairman and Chief Executive Ofﬁ cer 
of the Company until 1 January 20091. 
The board conﬁ rms that this has not 
concentrated power in the hands of one 
individual or compromised accountability 
and independent decision-making for 
the following reasons:

1  On 22 December 2008, the Company announced that with effect from 1 January 2009, 
  Mr Lim Chee Onn would relinquish his role as Chief Executive Ofﬁ cer but would continue to serve 
  as Chairman of the Company, and that Mr Choo Chiau Beng would assume the role of Chief Executive  
  Ofﬁ cer of the Company.  

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Sustaining Growth

101

Sustaining Growth
Corporate Governance

Keppel Corporation Chairman Mr Lim Chee Onn 
interacting with shareholders at the Annual 
General Meeting 2008.

1.  the independent directors form the 

majority on the board;

robust dialogue between the board 
and management. 

2.  the independent directors actively 
participate during board meetings 
and challenge the assumptions 
and proposals of management 
unreservedly, both during and 
outside of board meetings via 
e-mail or the telephone, on 
pertinent issues affecting the affairs 
and business of the Group; and
3.  to enhance the independence of the 
board, a Lead Independent Director 
has been appointed to coordinate the 
activities of the independent directors 
and act as the principal liaison 
between the independent directors 
and the Chair on sensitive issues. 
The Lead Independent Director holds 
meetings with the non-executive 
directors (without the presence of 
management) twice a year and on 
other occasions when required.

It is evident from the results of the 
assessment on the effectiveness of 
the board, and the assessment on the 
performance of the Chairman, that 
Mr Lim Chee Onn has enhanced the 
effectiveness of the individual non-
executive directors, and the board 
as a whole, by providing the board 
with a thorough understanding of the 
businesses and ensuring open and 

The Chairman, with the assistance 
of the Company Secretary, schedules 
meetings and prepares meeting 
agenda to enable the board to perform 
its duties responsibly having regard to 
the ﬂ ow of the Company’s operations.

The Chairman sets guidelines on 
and monitors the ﬂ ow of information 
from management to the board to 
ensure that all material information are 
provided timeously to the board for 
the board to make good decisions. He 
also encourages constructive relations 
between the board and management, 
and between the executive directors 
and non-executive directors. In this 
regard, the Chairman has initiated 
informal meetings on a regular basis 
for management to brief the directors 
on prospective deals and potential 
developments at an early stage before 
formal board approval is sought. He 
also ensures that relevant information 
on business initiatives, industry 
developments and analyst and press 
commentaries on matters in relation 
to the Company or the industries in 
which it operates are continuously 
circulated to board members so as to 
enable them to be updated and thereby 
enhance the effectiveness of the non-

executive directors and the board as 
a whole. He has also made available 
on the Company’s premises an ofﬁ ce 
for the non-executive directors’ use 
at any time to facilitate direct access 
to management.

The Chairman also ensures effective 
communication with shareholders.

The Chairman takes a leading role in 
the Company’s drive to achieve and 
maintain a high standard of corporate 
governance with the full support of 
the directors, Company Secretary 
and management.

Board Membership
Principle 4: Formal and transparent 
process for the appointment of new 
directors to the Board

Nominating Committee
The Company has established a 
Nominating Committee to, among other 
things, make recommendations to the 
board on all board appointments and 
oversee the Company’s succession 
and leadership development plans. 
The Nominating Committee comprises 
entirely independent directors; namely,

Mr Sven Bang Ullring
Tsao Yuan Mrs Lee Soo Ann Member
Member
Mrs Oon Kum Loon

Chairman

102

Keppel Corporation Limited 
Report to Shareholders 2008

The terms of reference of the Nominating 
Committee are disclosed in the 
Appendix hereto.

d.  NC makes recommendations 
to the board for approval.

Process for appointment 
of new directors
The Nominating Committee has put 
in place a formal process for the 
selection of new directors to increase 
transparency of the nominating process 
in identifying and evaluating nominees 
for directors. The Nominating Committee 
(NC) leads the process and makes 
recommendations to the board as follows:
a.  NC evaluates the balance of skills, 
knowledge and experience on 
the board and, in the light of such 
evaluation and in consultation with 
management, determines the role 
and the desirable competencies 
for a particular appointment. 

Criteria for appointment 
of new directors
All new appointments are subject 
to the recommendation of the 
Nominating Committee based 
on the following objective criteria:
1.  Integrity
2.  Independent mindedness
3.  Diversity – Possess core 

competencies that meet the needs 
of the Company and complement 
the skills and competencies of the 
existing directors on the board
4.  Able to commit time and effort to 

carry out duties and responsibilities 
effectively – proposed director is on 
not more than six principal boards

5.  Track record of making good 

b.  External help (for example, 

decisions

Singapore Institute of Directors, 
search consultants, open 
advertisement) may be used 
to source for potential candidates 
if need be. Directors and 
management may also 
make recommendations.
c.  NC conducts formal interview 
of short-listed candidates to 
assess suitability and to ensure 
that the candidates are aware 
of the expectations and the level 
of commitment required.

6.  Experience in high-performing 

companies

7.  Financially literate

The Nominating Committee is also 
charged with the responsibility 
of re-nomination having regard 
to the director’s contribution and 
performance (such as attendance, 
preparedness, participation and 
candour), with reference to the results 
of the assessment of the performance 
of the individual director by his peers 
for the previous ﬁ nancial year.

The directors submit themselves for 
re-nomination and re-election at regular 
intervals of at least once every three 
years. Pursuant to the Company’s 
Articles of Association, one-third of 
the directors retire from ofﬁ ce at the 
Company’s annual general meeting, 
and a newly-appointed director must 
submit himself for re-election at the 
annual general meeting immediately 
following his appointment.

As a matter of policy, a non-executive 
director would serve a maximum of 
two three-year terms of appointment. 
However, the board recognises the 
contribution of directors who over time 
have developed deep insight into the 
Group’s businesses and operations 
and who are therefore able to provide 
invaluable contribution to the board 
as a whole. In such cases, the board 
would exercise its discretion to extend 
the term and retain the services of the 
director rather than lose the beneﬁ t of 
his contribution.

The NC is also charged with determining 
the “independence” status of the directors 
annually. Please refer to page 101 on 
the basis of the NC’s determination as 
to whether a director should or should 
not be deemed independent.

The NC also determines annually 
whether a director with multiple board 

The Board and management of Keppel 
place importance in cultivating young 
talents within the Group.

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Sustaining Growth

103

Sustaining Growth
Corporate Governance

representations is able to and has been 
adequately carrying out his duties as 
a director of the Company. The NC 
took into account the results of the 
assessment of the effectiveness of the 
individual director, and the respective 
directors’ actual conduct on the board, 
in making this determination, and is 
satisﬁ ed that all the directors have been 
able to and have adequately carried out 
their duties as director notwithstanding 
their multiple board representations.

The NC has adopted internal 
guidelines addressing competing time 
commitments that are faced when 
directors serve on multiple boards. 
As a guide, directors should not serve 
on more than six principal boards.

The following key information regarding 
directors are set out in the following 
pages of this Annual Report:

Pages 213 to 216 and 220: Academic 
and professional qualiﬁ cations, board 
committees served on (as a member 
or Chairman), date of ﬁ rst appointment 
as director, date of last re-election as 
director, directorships or chairmanships 

both present and past held over 
the preceding ﬁ ve years in other 
listed companies and other major 
appointments, whether appointment 
is executive or non-executive, 
whether considered by the Nominating 
Committee to be independent; and

Pages 147 to 148: Shareholding 
in the Company and its subsidiaries.

Board Performance
Principle 5: Formal assessment 
of the effectiveness of the Board 
as a whole and the contribution 
by each director to the 
effectiveness of the Board

The board has implemented 
formal processes for assessing the 
effectiveness of the board as a whole, 
the contribution by each individual 
director to the effectiveness of the 
board, as well as the effectiveness 
of the Chairman of the board. 

To ensure that the assessments are 
done promptly and fairly, the board has 
appointed an independent third party 
(the “Independent Co-ordinator”) to 

Conferences such as the Keppel Group Finance Seminar are organised annually 
to keep key personnel abreast of industry developments.

104

Keppel Corporation Limited 
Report to Shareholders 2008

assist in collating and analysing 
the returns of the board members. 
Mrs Fang Ai Lian, former Chairman, 
Ernst & Young and currently Chairman, 
Great Eastern Holdings Ltd, 
was appointed for this role.

The evaluation processes and 
performance criteria are disclosed 
in the Appendix to this report.

The board assessment exercise 
provided an opportunity to obtain 
constructive feedback from each 
director on whether the board’s 
procedures and processes allowed him 
to discharge his duties effectively and 
the changes which should be made to 
enhance the effectiveness of the board 
as a whole. The assessment exercise 
also helped the directors to focus on 
their key responsibilities. The individual 
director assessment exercise allowed 
for peer review with a view to raising 
the quality of board members. It also 
assisted the Nominating Committee 
in determining whether to re-nominate 
directors who are due for retirement 
at the next annual general meeting, 
and in determining whether directors 
with multiple board representations 
are nevertheless able to and have 
adequately discharged their duties 
as directors of the Company.

Access to Information 
Principle 6: Board members to 
have complete, adequate and 
timely information

As a general rule, board papers are 
required to be sent to directors at least 
seven days before the board meeting 
so that the members may better 
understand the matters prior to the 
board meeting and discussion may be 
focused on questions that the directors 
may have. However, sensitive matters 
may be tabled at the meeting itself or 
discussed without any papers being 
distributed. Managers who can provide 
additional insight into the matters at 
hand would be present at the relevant 
time during the board meeting. The 
directors are also provided with the 

The Board convenes several times a year for robust discussions on pertinent matters relating 
to the Group’s activities.

names and contact details of the 
Company’s senior management and 
the Company Secretary to facilitate 
direct access to senior management 
and the Company Secretary.

The Company fully recognises that 
the ﬂ ow of relevant information on an 
accurate and timely basis is critical 
for the board to be effective in the 
discharge of its duties. Management 
is therefore expected to provide the 
board with accurate information 
in a timely manner concerning the 
Company’s progress or shortcomings 
in meeting its strategic business 
objectives or ﬁ nancial targets and other 
information relevant to the strategic 
issues facing the Company.

Management also provides the board 
members with management accounts 
on a monthly basis. Such reports keep 
the board informed, on a balanced 
and understandable basis, of the 
Group’s performance, ﬁ nancial position 
and prospects and consist of the 
consolidated proﬁ t and loss accounts, 
analysis of sales, operating proﬁ t, 
pre-tax and attributable proﬁ t by 
major divisions compared against 

the budgets, together with explanation 
given for signiﬁ cant variances for the 
month and year-to-date.

The Company Secretary administers, 
attends and prepares minutes of board 
proceedings. She assists the Chairman 
to ensure that board procedures 
(including but not limited to assisting 
the Chairman to ensure timely 
and good information ﬂ ow to the 
board and board committees, and 
between senior management and 
the non-executive directors, and 
facilitating orientation and assisting 
in the professional development 
of the directors) are followed and 
regularly reviewed to ensure effective 
functioning of the board, and that the 
Company’s memorandum and articles 
of association and relevant rules and 
regulations, including requirements 
of the Companies Act, Securities & 
Futures Act and Listing Manual of 
the Singapore Exchange Securities 
Trading Limited (“SGX”), are complied 
with. She also assists the Chairman 
and the board to implement and 
strengthen corporate governance 
practices and processes with a view to 
enhancing long-term shareholder value. 

Sustainability Report
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105

Sustaining Growth
Corporate Governance

She is also the primary channel of 
communication between the Company 
and the SGX.

The appointment and removal of the 
Company Secretary are subject to the 
approval of the board.

Subject to the approval of the 
Chairman, the directors, whether as 
a group or individually, may seek and 
obtain independent professional advice 
to assist them in their duties, at the 
expense of the Company.

Remuneration Matters
Principle 7: The procedure for 
developing policy on executive 
remuneration and for ﬁ xing 
remuneration packages of 
individual directors should be 
formal and transparent
Principle 8: Remuneration of 
Directors should be adequate 
but not excessive
Principle 9: There should be clear 
disclosure of remuneration policy, 
level and mix of remuneration, and 
procedure for setting remuneration

Remuneration Committee
The Remuneration Committee 
comprises entirely non-executive 
directors, 3 out of 4 of whom (including 
the Chairman) are independent; namely:

Mr Sven Bang Ullring
Tsao Yuan Mrs Lee Soo Ann Member
Mrs Oon Kum Loon1
Member
Member
Mr Tow Heng Tan 

Chairman

The Remuneration Committee is 
responsible for ensuring a formal and 

transparent procedure for developing 
policy on executive remuneration 
and for determining the remuneration 
packages of individual directors and 
senior management. The Remuneration 
Committee assists the board to 
ensure that remuneration policies and 
practices are sound in that they are 
able to attract, retain and motivate 
without being excessive, and thereby 
maximise shareholder value. The 
Remuneration Committee recommends 
to the board for endorsement a 
framework of remuneration (which 
covers all aspects of remuneration 
including directors’ fees, salaries, 
allowances, bonuses, options and 
beneﬁ ts in kind) and the speciﬁ c 
remuneration packages for each 
director and the Chief Executive Ofﬁ cer. 
The Remuneration Committee also 
reviews the remuneration of senior 
management and administers the 
KCL Share Option Scheme. 

The Committee has access to 
expert advice in the ﬁ eld of executive 
compensation outside the Company 
where required.

Annual Remuneration Report
Policy in respect of non-executive 
directors’ remuneration

The directors’ fees payable to non-
executive directors is paid in cash 
and/or a ﬁ xed number of KCL shares 
as follows:

i. Cash Component: The amount 
of directors’ fees payable in cash 
is dependent on the respective 
non-executive directors’ level of 

responsibility. Each non-executive 
director is paid a basic fee. In 
addition, non-executive directors 
who perform additional services 
in board committees are paid an 
additional fee for such services. The 
members of the Audit, Board Risk 
and Executive Committees are paid 
a higher fee than the members of the 
other board committees because 
of the heavier responsibilities and 
more frequent meetings required of 
them. The Chairman of each board 
committee is also paid a higher fee 
compared with the members of the 
respective committees in view of the 
greater responsibility carried by that 
ofﬁ ce. Executive directors are not paid 
directors’ fees. The framework for 
determining the amount of director’s 
fees payable in cash is set out in the 
table below.

ii.  Share Component: At an 
extraordinary general meeting of 
the Company held in 2007, the 
shareholders approved the board’s 
recommendation to amend Article 
82 of the Company’s Articles of 
Association relating to the remuneration 
of directors to permit the Company to 
award a ﬁ xed number of KCL shares 
in the capital of the Company, as shall 
from time to time be determined by an 
Ordinary Resolution of the Company, 
to the non-executive directors as part 
of their remuneration. The Company is 
therefore able to remunerate its non-
executive directors in the form of KCL 
shares by the purchase of KCL shares 
from the market for delivery to the non-
executive directors. The incorporation 
of an equity component in the total 

Non-executive director

Audit, Board Risk and Executive Committees

Remuneration, Nominating and Board Safety Committees

Ratio to Retainer 
of $40,000

$40,000 per annum

$30,000 per annum

$15,000 per annum

$15,000 per annum
$7,500 per annum

1.00

0.75

0.38

0.38
0.19

Chairman

Member

Chairman
Member

1  Mrs Oon Kum Loon was appointed a member of the Remuneration Committee with effect from 1 May 2008.

106

Keppel Corporation Limited 
Report to Shareholders 2008

remuneration of the non-executive 
directors is intended to achieve the 
objective of aligning the interests of 
the non-executive directors with those 
of the shareholders and the long-term 
interests of the Company.

The directors’ fees payable to 
non-executive directors is subject 
to shareholders’ approval at the 
Company’s annual general meetings.

Remuneration policy in respect 
of executive directors and other 
key executives
The Company advocates a 
performance-based remuneration 
system that is highly ﬂ exible and 
responsive to the market, Company’s, 
business unit’s and individual 
employee’s performance.

The total remuneration mix comprises 
3 key components; that is, annual ﬁ xed 
cash, annual performance incentive 
and long-term incentive. The annual 
ﬁ xed cash component comprises the 
annual basic salary plus any other ﬁ xed 
allowances. The annual performance 

incentive is tied to the Company’s, 
business unit’s and individual 
employee’s performance, inclusive 
of a portion which is tied to EVA 
performance1. The long-term incentive 
is in the form of share options which 
are granted based on the individual’s 
performance and contribution.

The compensation structure is 
designed to enable the Company 
to stay competitive and relevant. 
The Company benchmarks its annual 
ﬁ xed salary at the market median 
with the variable compensation 
being performance-driven. More 
emphasis is placed on the ‘pay-at-risk’ 
compensation as an employee moves 
up the corporate ladder. This allows 
the Company to better align executive 
compensation towards shareholders’ 
value creation.

The executive directors participate 
in a long-term incentive scheme in the 
form of the KCL Share Option Scheme, 
details of which are set out on pages 
148, 149, 167 to 169.

Making safety an integral part of daily 
routine and processes requires the 
collective effort across all business units.

1  Please refer to Note 1 on page 108.

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Sustaining Growth

107

Sustaining Growth
Corporate Governance

Level and mix of remuneration of Directors and Key Executives (who are not also Directors) for the year ended 
31 December 2008

The level and mix of each of the directors’ remuneration in bands of $250,000 are set out below:

Remuneration Band & Name of Director

Abv $10,000,000 to $10,250,000

Lim Chee Onn
Abv $9,750,000 to $10,250,000
Nil
Abv $9,500,000 to $9,750,000

Choo Chiau Beng
Abv $6,000,000 to $9,500,000

Nil
Abv $5,750,000 to $6,000,000

Teo Soon Hoe
$250,000 to $5,750,000

Nil
Below $250,000

Tony Chew Leong-Chee

Lim Hock San

Sven Bang Ullring

Tsao Yuan Mrs Lee Soo Ann

Oon Kum Loon

Tow Heng Tan
Yeo Wee Kiong

Base/ 
Fixed 
Salary

Performance-Related 
Bonuses Earned (including 
EVA and non-EVA Bonuses)

Paid

Deferred 
& at risk1

15%4

51%

28%

–

–

–

9%

57%

29%

–

–

–

14%

53%

24%

–

–

–

–

–

–

–
–

–

–

–

–

–

–

–
–

–

–

–

–

–

–

–
–

Directors’ 
Fees

Directors’ 
Allowance

Beneﬁ ts- 
in-Kind

Options 
Granted2

Remuneration
Shares3

–

–

–

–

–

–

89%

92%

81%

88%

93%

90%
89%

–

–

–

–

–

–

–

–

10%

–

–

–
–

n.m.5

–

6%

–

n.m.

5%6

–

–

n.m.

9%7

–

–

–

–

–

–

–
–

–

–

–

–

–

–

–
–

–

–

–

–

–

–

11%

8%

9%

12%

7%

10%
11%

Notes:
1  A portion of the annual performance incentive is tied to EVA performance and one half of the current year’s EVA bonus is paid out and 
the other half deferred and credited to the executive’s EVA Bank(a) for payment in future years, subject to the continued performance 
of the Company. 

(a)  EVA Bank: The EVA bank concept is used to defer incentive compensation over a time horizon to ensure that the executive

continues to generate sustainable shareholder value over the longer term. The EVA bank account is designated on a personal basis
and represents the executive’s contribution to the EVA performance of the Company. Each year, a portion of the executive’s annual
performance incentive is tied to EVA performance and one-half of his current year’s EVA bonus is paid out and the other half
deferred and credited into his EVA bank. In addition, he receives one-third from the accrued EVA bank balance of the preceding year,
provided EVA continues to remain positive. Monies credited into the EVA bank are at risk in that the amount in the bank can
decrease should EVA performance be adversely affected in the future years. 

In the case of the Company’s then-Executive Chairman, Mr Lim Chee Onn, and the other 2 Executive Directors, Mr Choo Chiau  
Beng and Mr Teo Soon Hoe, their respective EVA bank balances as at 31 December 2007 accrued since 2004, are as follows:   

EVA Bank as at 31 December 2007 accrued since 2004
EVA Bank Balance Band & Name of Director
Above $5,500,000 to $5,750,000
Lim Chee Onn (*)
Above $3,250,000 to $5,500,000
Nil
Above $3,000,000 to $3,250,000
Choo Chiau Beng
Above $2,500,000 to $3,000,000
Nil
Above $2,250,000 to $2,500,000
Teo Soon Hoe

108

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(*) 

In accordance with the Company’s EVA bank policy, an Executive Director is allowed to draw down his EVA bank over 3 tranches 
when he reaches the statutory retirement age. Each of the 3 tranches is payable consecutively on the respective annual bonus 
payment dates following the date he reached the statutory retirement age, subject to the pro-rated impact of the Company’s 
EVA performance. 

If the Executive Director continues in service after the statutory retirement age, a separate EVA bank account is set up for him 
such that one-half of his current year’s EVA bonus is paid out and the other half credited into this separate EVA bank and in 
subsequent years, he would in addition receive one-third from the accrued EVA bank balance of the preceding year provided 
EVA continues to remain positive. After retirement, he would be allowed to draw down his EVA bank balance over 3 tranches. 
Each such tranche is payable consecutively on the respective annual bonus payment dates following his retirement, subject 
to the pro-rated impact of the Company’s EVA performance.

In line with this policy, Mr Lim will draw down from his EVA bank balance in 3 annual tranches upon his retirement from the 
Company, the ﬁ rst tranche becomes payable immediately and the balance 2 tranches are subject to pro-rated impact of the 
Company’s EVA performance.

2  Based on the fair value of Options granted in August 2008 and February 2009 using Black Scholes valuation model. 
3  Estimated value based on KCL shares’ closing price of $4.33 on the last trading day of FY2008.
4 

Includes sum of $361,000, being payments pursuant to Mr Lim’s contract of employment. On 22 December 2008, the Company 
announced that Mr Lim Chee Onn would relinquish his role as Chief Executive Ofﬁ cer with effect from 1 January 2009. 

5  n.m. – not material
6 

In addition to the abovementioned Options granted, Mr Choo Chiau Beng also received 14,500 Singapore Petroleum Company 
Restricted Shares.
In addition to the abovementioned Options granted, Mr Teo Soon Hoe also received 5,000 Singapore Petroleum Company 
Restricted Shares. 

7 

The level and mix of each of the Key Executives (who are not also Directors) in bands of $250,000 are set out below:

Base/ 
Fixed 
Salary

Performance-Related 
Bonuses Earned (including 
EVA and non-EVA Bonuses)

Beneﬁ ts- 
in-Kind

Options 
Granted2

Paid

Deferred 
& at risk1

Remuneration Band & Name of Key Executive 

Abv $5,000,000 to $5,250,000

Tong Chong Heong
Abv $3,250,000 to $5,000,000
Nil
Abv $3,000,000 to $3,250,000

Koh Ban Heng
Abv $2,250,000 to $3,000,000

Nil
Abv $2,000,000 to $2,250,000

Wong Kingcheung, Kevin
Abv $1,250,000 to $2,000,000

Nil
Abv $1,000,000 to $1,250,000

Yeo Chien Sheng, Nelson 

Chia Hock Chye, Michael

Chua Chee Wui

Lam Kwok Chong
Abv $750,000 to $1,000,000
Ong Tiong Guan

8  Received Singapore Petroleum Company Restricted Shares.
9  Received Keppel Land Limited Share Options.

12%

52%

29%

n.m.

–

–

20%

48%

–

–

39%

54%

–

–

–

–

–

–

–

28%

31%

27%

28%

42%

36%

38%

24%

14%

15%

17%

15%

7%

–

–

n.m.

32%8

–

–

n.m.

7%9

–

–

n.m.

n.m.

n.m.

n.m.

16%

18%

18%

33%

36%

22%

13%

n.m.

29%

Sustainability Report
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109

 
 
 
 
 
 
 
 
   
Sustaining Growth
Corporate Governance

Remuneration of employees 
who are immediate family 
members of a Director or 
the Executive Chairman
No employee of the Company and its 
subsidiaries was an immediate family 
member of a director or the Executive 
Chairman and whose remuneration 
exceeded $150,000 during the ﬁ nancial 
year ended 31 December 2008. 
“Immediate family member” means 
the spouse, child, adopted child, 
step-child, brother, sister and parent.

Details of the KCL Share Option 
Scheme
The KCL Share Option Scheme 
(“Scheme”), which has been approved 
by shareholders of the Company, 
is administered by the Remuneration 
Committee. Please refer to pages 
148, 149, 167 to 169 for details on 
the Scheme.

Accountability and Audit
Principle 10: The Board 
should present a balanced and 
understandable assessment of the 
Company’s performance, position 
and prospects 
Principle 11: Establishment 
of Audit Committee with written 
terms of reference

The board is responsible for providing 
a balanced and understandable 
assessment of the Company’s 
performance, position and prospects, 
including interim and other price-
sensitive public reports, and reports 
to regulators (if required).

The board has embraced openness 
and transparency in the conduct 
of the Company’s affairs, whilst 
preserving the commercial interests 
of the Company. Financial reports and 
other price-sensitive information are 
disseminated to shareholders through 
announcements via SGXnet to the 
SGX, press releases, the Company’s 
website, and public webcast and media 
and analyst brieﬁ ngs. The Company’s 
Summary Financial Report is sent to all 
shareholders and its Annual Report is 

Keppel’s management regularly updates board members with relevant and timely information.

available on request and accessible 
on the Company’s website.

Management provides all board 
members with management accounts 
on a monthly basis. Such reports 
keep the board members informed 
of the Group’s performance, position 
and prospects and consist of the 
consolidated proﬁ t and loss accounts, 
analysis of sales, operating proﬁ t, 
pre-tax and attributable proﬁ t by 
major divisions compared against 
the respective budgets, together with 
explanations for signiﬁ cant variances 
for the month and year-to-date.

Audit Committee
The Audit Committee comprises 
the following non-executive directors, 
all of whom are independent:

Mr Lim Hock San
Mr Tony Chew Leong-Chee Member
Member
Mrs Oon Kum Loon

Chairman

Mr Lim Hock San and Mrs Oon Kum 
Loon have accounting and related 
ﬁ nancial management expertise 
and experience. The board considers 
Mr Tony Chew as having sufﬁ cient 
ﬁ nancial management knowledge 
and experience to discharge his 
responsibilities as a member of 
the Committee.

The Audit Committee’s primary role 
is to assist the board to ensure integrity 
of ﬁ nancial reporting and that there is 
in place sound internal control systems. 
The Committee’s terms of reference are 
set out on pages 113 and 114 herein.

The Audit Committee has explicit 
authority to investigate any matter 
within its terms of reference, full access 
to and co-operation by management 
and full discretion to invite any director 
or executive ofﬁ cer to attend its 
meetings, and reasonable resources 
to enable it to discharge its functions 
properly. The Company has an internal 
audit team and together with the 
external auditors, report independently 
their ﬁ ndings and recommendations 
to the Audit Committee.

The Audit Committee met with the 
external auditors 3 times and with 
the internal auditors 5 times during 
the year, and at least one of these 
meetings was conducted without 
the presence of management.

During the year, the Audit Committee 
performed independent review of the 
ﬁ nancial statements of the Company 
before the announcement of the 
Company’s quarterly and full-year 
results. In the process, the Committee 
reviewed the key areas of management 
judgment applied for adequate 

110

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
provisioning and disclosure, critical 
accounting policies and any signiﬁ cant 
changes made that would have a great 
impact on the ﬁ nancials.

other misconduct which may be made 
pursuant to the Policy, so that:
(cid:129) 

investigations are carried out in 
an appropriate and timely manner;

The Audit Committee also reviewed 
and approved both the Group internal 
auditor’s and external auditor’s plans 
to ensure that the plans covered 
sufﬁ ciently in terms of audit scope 
in reviewing the signiﬁ cant internal 
controls of the Company. Such 
signiﬁ cant controls comprise ﬁ nancial, 
and operational and compliance 
controls. All audit ﬁ ndings and 
recommendations put up by the 
internal and the external auditors 
were forwarded to the Audit 
Committee. Signiﬁ cant issues 
were discussed at these meetings.

In addition, the Audit Committee 
undertook a review of the independence 
and objectivity of the external auditors 
through discussions with the external 
auditors as well as reviewing the non-
audit fees awarded to them, and has 
conﬁ rmed that the non-audit services 
performed by the external auditors 
would not affect their independence.

The Committee also reviewed 
the adequacy of the internal audit 
function and is satisﬁ ed that the team 
is adequately resourced and has 
appropriate standing within 
the Company.

The Committee has reviewed the 
“Keppel: Whistle-Blower Protection 
Policy” (the “Policy”) which provides 
for the mechanisms by which 
employees and other persons may, 
in conﬁ dence, raise concerns about 
possible improprieties in ﬁ nancial 
reporting or other matters, and was 
satisﬁ ed that arrangements are in 
place for the independent investigation 
of such matters and for appropriate 
follow-up action. Following the launch 
of the Policy, a set of guidelines which 
was reviewed by the Audit Committee 
and approved by the board, was 
issued to assist the Audit Committee 
in managing allegations of fraud or 

(cid:129)  administrative, disciplinary, civil 
and/or criminal actions that are 
initiated following completion of 
investigations, are appropriate, 
balanced, and fair; and

(cid:129)  action is taken to correct the 

weaknesses in the existing system 
of internal processes and policies 
which allowed the perpetration of 
the fraud and/or misconduct, and 
to prevent a recurrence.

On a quarterly basis, the Management 
reported to the Audit Committee the 
interested person transactions (“IPTs”) 
in accordance with the Company’s 
Shareholders’ Mandate for IPT. The 
IPTs were reviewed by the internal 
auditors. All ﬁ ndings were reported 
during Audit Committee meetings.

Internal Controls 
and Risk Management
Principle 12: Sound system 
of internal controls

The Company’s approach to risk 
management and internal control is 
set out in the “Operating and Financial 
Review” section on pages 90 to 93 
and the “Risk Management” section on 
pages 117 to 118 of this Annual Report.

The Company’s internal and external 
auditors conduct an annual review of the 
effectiveness of the Company’s material 
internal controls, including ﬁ nancial, 
operational and compliance controls, 
and risk management. Any material non-
compliance or failures in internal controls 
and recommendations for improvements 
are reported to the Audit Committee. 
The Audit Committee also reviews the 
effectiveness of the actions taken by 
management on the recommendations 
made by the internal and external 
auditors in this respect.

During the year, the Audit Committee 
reviewed the effectiveness of the 
Company’s internal control and risk 

management procedures and was 
satisﬁ ed that the Company’s risk 
management and internal control 
processes are adequate to meet the 
needs of the Company in its current 
business environment.

Board Risk Committee 
In October 2004, as part of the effort to 
further strengthen the Company’s risk 
management processes, a Board Risk 
Committee was formed to assist the 
board in examining the effectiveness 
of the Group’s risk management 
system to ensure that a robust risk 
management system is maintained. 
The Committee reviews and guides 
management in the formulation of risk 
policies and processes to effectively 
identify, evaluate and manage 
signiﬁ cant risks, and discusses 
risk management strategies with 
management. The Committee reports 
to the Board on material ﬁ ndings 
and recommendations in respect of 
signiﬁ cant risk matters. The detailed 
terms of reference of this Committee 
is disclosed on page 114 herein.

The Board Risk Committee is made up 
of 3 independent directors (including 
the Chairman) and a non-executive 
director who is independent of 
management. Mrs Oon Kum Loon was 
appointed Chairman of the Committee 
because of her wealth of experience 
in the area of risk management. Prior 
to serving as Chief Financial Ofﬁ cer in 
the Development Bank of Singapore 
(DBS), she was the Managing Director 
& Head of Group Risk Management, 
responsible for the development and 
implementation of a Group-wide 
integrated risk management 
framework for the DBS Group. 
Mrs Oon is a member of the 
Company’s Audit Committee. 
Mr Lim Hock San, who is the Chairman 
of the Audit Committee, has in-depth 
knowledge and experience in 
ﬁ nance accountancy, business and 
management and is the second 
member of the Board Risk Committee. 
The third member is Mr Tow Heng 
Tan, who has deep management 

Sustainability Report
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111

Sustaining Growth
Corporate Governance

experience from his extensive business 
career spanning the management 
consultancy, investment banking and 
stock-broking industries. Mr Tow is 
currently the Chief Investment Ofﬁ cer 
of Temasek Holdings. The fourth 
member is Mr Yeo Wee Kiong who 
is a director in Drew & Napier LLC, 
a leading law corporation in Singapore 
practising in the areas of corporate 
law, corporate ﬁ nance, mergers and 
acquisitions, listings on stock exchange 
venture capital, banking and securities. 
Mr Yeo sits on the boards of several 
companies (listed and non-listed) and 
has vast experience in the corporate 
world and wide knowledge ranging 
from engineering, ﬁ nance and law.

Internal Audit
Principle 13: Independent internal 
audit function

The role of the internal auditors is 
to assist the Audit Committee to 
ensure that the Company maintains 
a sound system of internal controls 
by regular monitoring of key controls 
and procedures and ensuring their 
effectiveness, undertaking investigations 
as directed by the Audit Committee, and 
conducting regular in-depth audits of 
high risk areas. The Company’s internal 

audit functions are serviced in-house 
(“Group Internal Audit”).

Staffed by suitably qualiﬁ ed executives, 
Group Internal Audit has unrestricted 
direct access to the Audit Committee. The 
Head of Group Internal Audit’s primary 
line of reporting is to the Chairman of the 
Audit Committee, although she reports 
administratively to the Chief Executive 
Ofﬁ cer of the Company.

As a corporate member of the 
Singapore branch of the Institute of 
Internal Auditors Incorporated, USA 
(“IIA”), Group Internal Audit is guided 
by the Standards for the Professional 
Practice of Internal Auditing set by the 
IIA. These standards consist of attribute 
standards, performance standards and 
implementation standards.

During the year, Group Internal 
Audit adopted a risk-based auditing 
approach that focuses on material 
internal controls, including ﬁ nancial, 
operational and compliance controls. 
Audits were carried out on all 
signiﬁ cant business units in the 
Company, inclusive of limited review 
performed on dormant and inactive 
companies. All Group Internal Audit’s 
reports are submitted to the Audit 

112

Keppel Corporation Limited 
Report to Shareholders 2008

The Board comprises executive and 
independent directors who contribute 
their wealth of experience and 
expertise to the Group.

Committee for deliberation with 
copies of these reports extended to 
the Chairman, Chief Executive Ofﬁ cer 
and the relevant senior management 
ofﬁ cers. In addition, internal audit’s 
summary of ﬁ ndings and 
recommendations are discussed 
at the Audit Committee meetings.

Communication with 
Shareholders
Principle 14: Regular, effective 
and fair communication with 
shareholders
Principle 15: Greater shareholder 
participation at Annual General 
Meetings

In addition to the matters mentioned 
above in relation to “Access to 
Information/Accountability”, the 
Company’s Group Corporate 
Communications Department (with 
assistance from the Group Finance 
and Group Legal Departments, when 
required) regularly communicates with 
shareholders and receives and attends 
to their queries and concerns.

Material information are disclosed in 
a comprehensive, accurate and timely 
manner via SGXnet and the press. 
To ensure a level playing ﬁ eld and 
provide conﬁ dence to shareholders, 
unpublished price-sensitive information 
are not selectively disclosed, and 
on the rare occasion when such 
information are inadvertently disclosed, 
they are immediately released to the 
public via SGXnet and the press.

Shareholders are informed of 
shareholders’ meetings through 
notices published in the newspapers 
and reports or circulars sent to all 
shareholders. Shareholders are invited 
at such meetings to put forth any 
questions they may have on the motions 
to be debated and decided upon. If any 
shareholder is unable to attend, he is 

allowed to appoint up to two proxies 
to vote on his behalf at the meeting 
through proxy forms sent in advance.

At shareholders’ meetings, each distinct 
issue is proposed as a separate resolution.

The Chairmen of each board 
committee are required to be present 
to address questions at the Annual 
General Meeting. External auditors are 
also present at such meetings to assist 
the directors to address shareholders’ 
queries, if necessary.

The Company is not implementing 
absentia voting methods such as voting 
via mail, e-mail or fax until security, 
integrity and other pertinent issues 
are satisfactorily resolved.

The Company Secretary prepares 
minutes of shareholders’ meetings, 
which incorporates substantial 
comments or queries from 
shareholders and responses 
from the board and management. 
These minutes are available to 
shareholders upon their requests.

Securities Transactions
Insider Trading Policy
The Company has a formal Insider 
Trading Policy on dealings in the 
securities of the Company and its 
listed subsidiaries, which sets out the 
implications of insider trading and 
guidance on such dealings. The policy 
has been distributed to the Group’s 
directors and ofﬁ cers. It has also 
adopted the Best Practices Guide on 
Dealings in Securities issued by the 
SGX. In line with Best Practices Guide 
on Dealing in Securities issued by the 
SGX, the Company issues circulars to 
its directors and ofﬁ cers informing that 
the Company and its ofﬁ cers must not 
deal in listed securities of the Company 
one month before the release of the 
full-year results and two weeks before 
the release of quarterly results, and if 
they are in possession of unpublished 
price-sensitive information.

Appendix

Board Committees 
– Terms of Reference
A. Executive Committee
1.  Consider and, if deemed ﬁ t, 

approve investments, acquisitions 
and disposal of assets of the 
Company and its subsidiaries which 
are above $10 million or 10% of the 
net tangible assets (whichever is the 
lower) of the respective companies 
but less than $100 million.
2.  Consider and recommend to 

the board proposed investments, 
acquisitions and disposal of assets 
of the Company and its subsidiaries 
which are $100 million or above.
3.  Consider and recommend to the 
board proposed investments and 
acquisitions of the Company and its 
subsidiaries which do not fall within 
the Company’s core businesses 
but which are considered strategic 
investments for the long-term 
prospects of the Company.

4.  Consider and, if deemed ﬁ t, 
approve capital equipment 
purchases and leases of the 
Company and its subsidiaries 
which are above $10 million but 
less than $100 million.

5.  Consider and recommend to 

the board on proposed capital 
equipment purchases and leases 
of the Company and its subsidiaries 
which are above $100 million.

6.  Consider and, if deemed ﬁ t, 

approve performance bonds and 
guarantees to be furnished by the 
Company or its subsidiaries which 
are above $10 million but less than 
$100 million.

7.  Consider and recommend to the 
board on proposed performance 
bonds and guarantees to be 
furnished by the Company or its 
subsidiaries which are above 
$100 million.

8.  Consider and, if deemed ﬁ t, 

approve loans to companies within 
the Keppel Group of an amount 
exceeding $30 million but up to 
$100 million.

9.  Consider and, if deemed ﬁ t, 
approve foreign exchange 
transactions for companies within 
the Keppel Group of an amount 
exceeding $100 million but up 
to $200 million.

10. In relation to matters which require 
the approval of this Committee 
pursuant to other provisions of 
these terms of reference, approve 
the afﬁ xation of the Common 
Seal onto any legal document in 
accordance with the Company’s 
Articles of Association.

11. Approve the banks in Singapore 
and overseas with which the 
Company may transact.

12. Approve the establishment and 
registration of local and foreign 
ofﬁ ces of the Company.

13. Carry out such other functions as 

may be delegated to it by the board.

14. Sub-delegate any of its powers 
within its terms of reference as 
listed above, from time to time, 
as this Committee may deem ﬁ t.

Matters arising at meetings of the 
Executive Committee shall be decided 
by a simple majority of votes including 
the afﬁ rmative vote of at least one 
member who is an independent director.

B. Audit Committee 
1.  Examine the effectiveness of the 

group’s internal control system, 
including ﬁ nancial, operational and 
compliance controls, to ensure that 
a sound system of internal controls 
is maintained.

2.  Review audit plans and reports 
of the external auditors and 
internal auditors, and consider 
the effectiveness of actions or 
policies taken by management 
on the recommendations and 
observations.

3.  Review ﬁ nancial statements and 

formal announcements relating to 
ﬁ nancial performance, and review 
signiﬁ cant ﬁ nancial reporting 
issues and judgments contained 
in them, to ensure integrity of such 
statements and announcements.

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113

Sustaining Growth
Corporate Governance

4.  Review the independence and 

objectivity of the external auditors 
annually.

5.  Review the nature and extent of 
non-audit services performed by 
the auditors.

6.  Meet with external auditors and 

internal auditors, without the presence 
of management, at least annually.

7.  Make recommendations to the 
board on the appointment, 
re-appointment and removal of 
the external auditor, and approve 
the remuneration and terms of 
engagement of the external auditor. 

8.  Review the effectiveness of the 

Company’s internal audit function. 

9.  Ensure that the internal audit 

function is adequately resourced 
and has appropriate standing within 
the Company, at least annually.
10. Review arrangements by which 

employees of the Company may, 
in conﬁ dence, raise concerns about 
possible improprieties in matters of 
ﬁ nancial reporting or other matters, 
to ensure that arrangements 
are in place for the independent 
investigation of such matters and 
for appropriate follow-up action. 
11.  Review interested person transactions.
12. Investigate any matters within 

the Audit Committee’s purview, 
whenever it deems necessary.

13. Report to the board on material matters, 
ﬁ ndings and recommendations.

14. Perform such other functions 
as the board may determine. 
15. Sub-delegate any of its powers 
within its terms of reference as 
listed above from time to time as 
this Committee may deem ﬁ t.

C. Board Risk Committee 
1.  Review and guide the Group 
in formulating its risk policies.
2.  Discuss risk mitigation strategies 

with management.

3.  Examine the effectiveness of 
the group’s risk management 
system to ensure that a robust risk 
management system is maintained. 
4.  Review and guide in establishing a 
process to effectively identify, evaluate 
and manage signiﬁ cant risks. 

5.  Review risk limits where applicable.
6.  Review the Group’s risk proﬁ le 

periodically.

7.  Provide a forum for discussion on 

risk issues. 

8.  Report to the board on material matters, 
ﬁ ndings and recommendations.
9.  Perform such other functions as the 

board may determine.

10. Sub-delegate any of its powers 
within its terms of reference as 
listed above from time to time as 
this Committee may deem ﬁ t. 

D. Nominating Committee
1.  Recommend to the board the 
appointment/re-appointment 
of directors.

2.  Annual review of skills required by 

the board, and the size of the board.

3.  Annual review of independence 
of each director, and to ensure 
that the board comprises at least 
one-third independent directors.
4.  Decide, where a director has multiple 
board representation, whether the 
director is able to and has been 
adequately carrying out his duties as 
director of the Company.
5.  Decide how the board’s 

performance may be evaluated, 
and propose objective performance 
criteria to assess effectiveness 
of the board as a whole and the 
contribution of each director.

6.  Annual assessment of the 

effectiveness of the board as 
a whole and individual directors.
7.  Review succession and leadership 

development plans.

8.  To review and, if deemed ﬁ t, approve 
recommendations for nomination 
of candidates as nominee director 
(whether as chairman or member) 
to the board of directors of investee 
companies which are:
i. 

listed on the Singapore 
Exchange or any other stock 
exchange (that is, as at the date 
hereof, Keppel Land Limited, 
Keppel Telecommunications & 
Transportation Ltd, K-REIT Asia 
Management Limited, Keppel 
Philippines Holdings Inc, Keppel 
Philippines Marine Inc, Keppel 

Philippines Properties Inc, 
Keppel Thai Properties Public 
Co Ltd, Singapore Petroleum 
Company Limited, k1 Ventures 
Limited, Evergro Properties Ltd 
and MobileOne Limited);

ii.  managers or trustee-managers 
of any collective investment 
schemes, business trusts, or 
any other trusts which are listed 
on the Singapore Exchange or 
any other stock exchange (that 
is, as the date hereof, K-REIT 
Asia Management Limited and 
Keppel Infrastructure Fund 
Management Pte Ltd); and

iii.  parent companies of the 

Company’s core businesses 
(that is, as at the date hereof, 
Keppel Offshore & Marine Ltd, 
Keppel Integrated Engineering 
Ltd, and Keppel Energy Pte Ltd),
(hereinafter referred to as “Nominee

  Director Nominations”).
9.  To review all Nominee 

Director Nominations annually.  
10. Sub-delegate any of its powers 
within its terms of reference as 
listed above, from time to time, 
as this Committee may deem ﬁ t.

E. Remuneration Committee 
1.  Recommend to the board a 
framework of remuneration 
for board members and key 
executives, and the speciﬁ c 
remuneration packages for each 
director and the chief executive 
ofﬁ cer (if the chief executive ofﬁ cer 
is not an executive director).
2.  Decide the early termination 

compensation (if any) of directors.

3.  Consider whether directors should 
be eligible for beneﬁ ts under long-
term incentive schemes (including 
weighing the use of share schemes 
against the other types of long-term 
incentive scheme).

4.  Review the terms, conditions and 

remuneration of the senior management. 
5.  Administer the Company’s employee 
share option scheme (the “KCL Share 
Option Scheme”) in accordance with 
the rules of the scheme. 

6.  Grant share options under the 

114

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
Nature of current directors’ appointments and membership on board committees

Director

Board Membership

Lim Chee Onn1

Executive Chairman

Tony Chew Leong-Chee

Lead Independent Director

Lim Hock San

Sven Bang Ullring

Independent

Independent

Tsao Yuan Mrs Lee Soo Ann

Independent

Committee Membership

Audit

Executive

Nominating Remuneration

Risk

 Safety

– Chairman

Member Member

Chairman Member

–

–

–

– Member

–

–

–

– Member

–

–

– Chairman Chairman

– Member Member

– Member

– Member

Oon Kum Loon2

Tow Heng Tan

Yeo Wee Kiong

Choo Chiau Beng

Teo Soon Hoe

Independent

Member Member Member Member Chairman

Non-Independent & Non-Executive

Independent

Executive Director

Executive Director 
& Group Finance Director

– Member

–

–

– Member

– Member

– Member Member

–

–

–

– Member Chairman

–

–

–

–

–

–

–

–

–

–

1  On 22 December 2008, the Company announced that with effect from 1 January 2009, Mr Lim Chee Onn would relinquish his role as Chief Executive Ofﬁ cer but   
  would continue to serve as Chairman of the Company, and that Mr Choo Chiau Beng would assume the role of Chief Executive Ofﬁ cer of the Company.
2  Mrs Oon Kum Loon was appointed a member of the Remuneration Committee with effect from 1 May 2008.

KCL Share Option Scheme as this 
Committee may deem ﬁ t.

7.  Sub-delegate any of its powers 
within its terms of reference as 
listed above, from time to time, 
as this Committee may deem ﬁ t.

5.  Ensure that the safety functions 
in Keppel Group companies are 
adequately resourced (in terms 
of number, qualiﬁ cation, and 
budget) and has appropriate 
standing within the organisation.
6.  Consider management’s proposals 

Save that a member of this Committee 
shall not be involved in the deliberations 
in respect of any remuneration, 
compensation, options or any form 
of beneﬁ ts to be granted to him.

on safety-related matters.
7.  Carry out such investigations 
into safety-related matters as 
the Committee deems ﬁ t.

8.  Report to the board on 

F. Board Safety Committee 
1.  Review and examine the 

effectiveness of the Keppel Group 
companies’ safety management 
system, including training and 
monitoring systems, to ensure 
that a robust safety management 
system is maintained.
2.  Review and examine the 

Keppel Group companies’ safety 
procedures against industry 
best practices, and monitor its 
implementation.

3.  Provide a discussion forum on 

developments and best practices in 
safety standards and practices, and 
the feasibility of implementing such 
developments and best practices.

4.  Assist in enhancing safety 

awareness and culture within 
the Keppel Group.

material matters, ﬁ ndings 
and recommendations.

9.  Perform such other functions 
as the board may determine.
10. Sub-delegate any of its powers 
within its terms of reference as 
listed above from time to time as 
the Committee may deem ﬁ t.  

Process for Selecting 
New Directors
Evaluation Processes
Board
Each board member is required 
to complete a Board Evaluation 
Questionnaire and send the 
Questionnaire direct to the 
Independent Co-ordinator (“IC”) within 
ﬁ ve working days. An “Explanatory 
Note’” is attached to the Questionnaire 
to clarify the background, rationale and 
objectives of the various performance 

criteria used in the Board Evaluation 
Questionnaire with the aim of achieving 
consistency in the understanding and 
interpretation of the questions. Based 
on the returns from each of 
the directors, the Independent 
Co-ordinator prepares a consolidated 
report and briefs the Chairman of 
the Nominating Committee (“NC”) 
on the report. Thereafter, the IC 
presents the report for discussion 
at a meeting of the non-executive 
directors (“NEDs”), chaired by the 
Lead Independent Director. Following 
the NED meeting, the IC will, together 
with the Chairman of the NC, brief the 
Chairman of the board on the report 
and the recommendations of the 
NEDs. The IC will thereafter present 
the report to the board together with 
the recommendations of the NEDs 
for discussion on the changes which 
should be made to help the board 
discharge its duties more effectively.

Individual Directors
The Board differentiates the 
assessment of an executive director 
from that of a non-executive director 
(“NED”).

In the case of the assessment of the 
individual executive director, each NED 
is required to complete the executive 

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115

Sustaining Growth
Corporate Governance

director’s assessment form and send 
the form directly to the IC within ﬁ ve 
working days. It is emphasised that 
the purpose of the assessment is to 
assess each of the executive directors 
on their respective performance on the 
board (as opposed to their respective 
executive performance). The executive 
directors are not required to perform a 
self, nor a peer, assessment. Based on 
the returns from each of the NEDs, the 
IC prepares a consolidated report and 
briefs the Chairman of the Nominating 
Committee (“NC”) on the report. 
Thereafter, the IC presents the report 
for discussion at a meeting of the non-
executive directors (“NEDs”), chaired 
by the Lead Independent Director. 
Following the NED meeting, the IC will, 
together with the Chairman of the NC, 
brief the Chairman of the board on the 
report and the recommendations of the 
NEDs. The IC will thereafter present the 
report to the board together with the 
recommendations of the NEDs. The 
Chairman of the NC will thereafter meet 
with the executive directors individually 
to provide the necessary feedback on 
their respective board performance 
with a view to improving their board 
performance and shareholder value. 

As for the assessment of the 
performance of the NEDs, each 
director (both NEDs and executive 
directors) is required to complete the 
NED’s assessment form and send 
the form directly to the IC within 
ﬁ ve working days. Each NED is also 
required to perform a self-assessment 
in addition to a peer assessment. 
Based on the returns, the IC prepares 
a consolidated report and briefs the 
Chairman of the NC on the report. 
Thereafter, the IC presents the 
report for discussion at a meeting 
of the NEDs, chaired by the Lead 
Independent Director. Following the 
NED meeting, the IC will, together 
with the Chairman of the NC, brief the 
Chairman of the board on the report 
and the recommendations of the 
NEDs. The IC will thereafter present 
the report to the board together with 
the recommendations of the NEDs. 

The Chairman of the NC will thereafter 
meet with the NEDs individually to 
provide the necessary feedback on 
their respective board performance 
with a view to improving their board 
performance and shareholder value. 

Chairman
The Chairman Evaluation Form is 
completed by each NED and sent 
directly to the IC within ﬁ ve working 
days. Based on the returns, the IC 
prepares a consolidated report and 
briefs the Chairman of the NC on the 
report. Thereafter, the IC presents 
the report for discussion at a meeting 
of the NEDs, chaired by the Lead 
Independent Director. Following the 
NED meeting, the IC will, together 
with the Chairman of the NC, brief the 
Chairman of the board on the report 
and the recommendations of the 
NEDs. The IC will thereafter present 
the report to the board together with 
the recommendations of the NEDs.

Performance Criteria
The performance criteria for the 
board evaluation are in respect of the 
board size and composition, board 
independence, board processes, board 
information and accountability, board 
performance in relation to discharging 
its principal functions, board committee 
performance in relation to discharging 
their responsibilities set out in their 
respective terms of reference, and 
ﬁ nancial targets which include return 
on capital employed, return on equity, 
debt/equity ratio, dividend pay-out 
ratio, economic value added, earnings 
per share, and total shareholder return 
(i.e. dividend plus share price increase 
over the year).

The individual director’s performance 
criteria are categorised into 5 segments; 
namely, (1) interactive skills (under which 
factors as to whether the director works 
well with other directors, and participates 
actively are taken into account); 
(2) knowledge (under which factors 
as to the director’s industry & business 
knowledge, functional expertise, 
whether he provides valuable inputs, 

his ability to analyse, communicate 
& contribute to the productivity of 
meetings, and his understanding of 
ﬁ nance and accounts, are taken into 
consideration); (3) director’s duties 
(under which factors as to the director’s 
board committee work contribution, 
whether the director takes his role of 
director seriously and works to further 
improve his own performance, whether 
he listens and discusses objectively 
and exercises independent judgment, 
and meeting preparation are taken into 
consideration); (4) availability (under 
which the director’s attendance at 
board and board committee meetings, 
whether he is available when needed, 
and his informal contribution via 
e-mail, telephone, written notes 
etc are considered), and (5) overall 
contribution, bearing in mind that 
each director was appointed for 
his/her strength in certain areas 
which taken together provides the 
board with the required mix of skills 
and competencies.

The assessment of the Chairman of 
the board is based on his ability to 
lead, whether he established proper 
procedures to ensure the effective 
functioning of the board, whether 
he ensured that the time devoted to 
board meetings were appropriate (in 
terms of number of meetings held 
a year and duration of each board 
meeting) for effective discussion 
and decision-making by the board, 
whether he ensured that information 
provided to the board was adequate 
(in terms of adequacy and timeliness) 
for the board to make informed and 
considered decisions, whether he 
guided discussions effectively so that 
there was timely resolution of issues, 
whether he ensured that meetings 
were conducted in a manner that 
facilitated open communication 
and meaningful participation, and 
whether he ensured that board 
committees were formed where 
appropriate, with clear terms of 
reference, to assist the board 
in the discharge of its duties 
and responsibilities.

116

Keppel Corporation Limited 
Report to Shareholders 2008

Sustaining Growth
Risk Management

Concerted risk management efforts 
enhance operational resilience and 
ensure the Group remains well-placed 
to protect the interests of and add 
value to shareholders.

Focus areas

  Manage risks proactively  
  Reinforce prudent practices
  Build a culture of managing risk
  Enhance operational preparedness

Sustainability Report
Sustaining Growth

117

Sustaining Growth
Risk Management

Managing Risks Proactively 
The Board of Directors, assisted by 
the Board Risk Committee (BRC), 
oversees risk management in the 
Group. The BRC examines the 
effectiveness of the Group’s risk 
management system and guides 
management in the formulation of risk 
policies, processes and procedures. 
Its terms of reference are disclosed 
on page 114 of this Report. 

With the global ﬁ nancial and economic 
turmoil in the past year, the Group is 
exposed to a multitude of risks and 
challenges in the strategic, ﬁ nancial and 
operational aspects of its businesses. 
Strong top management commitment 
in driving Group-wide risk management 
systems and processes over the years 
has equipped the Group to face the 
present tough business environment. 

During the year, risk management 
forums and workshops were conducted 
for senior management across the Group 
to heighten awareness and appreciation 
of the potential impact of the worsening 
ﬁ nancial turmoil. Senior management 
also met more regularly to monitor and 
discuss changes that would impact the 
Group’s businesses. Concerted efforts 
and mitigating measures were carried 
out to ensure that all companies in the 
Group manage these challenges in a 
timely and effective manner.  

Looking ahead, the Group Risk 
Management Department is committed 
to work closely with the business 
units to continually scan the business 
environment and help them pre-empt 
emerging risks and prompt proactive 
actions to mitigate any adverse impact.  

Stress testing exercises which involve 
analysing business value drivers under 
various worst-case scenarios will 
also be performed more frequently. 
Such exercises augment the risk 
management system and help shape 
the Group’s strategic directions, 
facilitating prompt response, planning 
and decision-making. 

competitiveness under volatile 
business conditions. 

Risk management is also an integral 
aspect of strategic and budget review, 
policy formulation and revision, project 
and investment evaluation, and 
performance evaluation. Individual 
business units are accountable for 
the integration and embedding of 
risk management into their business 
operations and processes. This will 
ensure early risk detection for effective 
management and control. 

Building a Risk 
Management Culture 
One way to strengthen ERM is to 
promote an effective integrated risk 
management system across the Group. 
The Group has intensiﬁ ed efforts in 
building a culture of managing risk, 
closely aligned with both near- and 
long-term corporate goals. 

In 2008, a risk culture survey was 
conducted for the Group’s senior 
management in which gaps were 
identiﬁ ed for continuous improvement. 
There are ongoing efforts to strengthen 
our risk culture through conferences and 
forums to raise risk awareness among 
employees. Sharing of best practices 
and in-depth project post-mortem 
analysis provide further learning avenues.

All key business operations in the Group 
are required to have business continuity 
plans in place. 

Reinforcing Prudent Practices
Policies, systems and procedures 
spanning all operating dimensions 
have been established to govern 
business activities. Such policies and 
risk limits are reviewed regularly to 
take into consideration the prevailing 
economic climate, to ensure that they 
remain adequate and relevant. Prudent 
risk management practices including 
effective management of market risks 
such as currency risks, interest rate 
risks and price risks, as well as credit 
and liquidity risks, lay the Group’s 
ﬁ nancial management foundation. 
For more details on these, please 
see pages 90 and 91 in this Report. 

The Enterprise Risk Management (ERM) 
framework provides a holistic and 
systematic process to better prepare 
the Group to respond to rapid changes 
in the business environment. Selection 
of customers, partners and contractors 
based on stringent guidelines and 
mutually beneﬁ cial terms has enabled 
the Group to forge strong and credible 
business relationships. Close tracking 
of customer payments, credit review 
and assessment of credit standings 
minimise risk of material defaults. 
Rigorous due diligence exercises ensure 
that projects undertaken are viable and 
proﬁ table. Long range strategies coupled 
with ﬂ exible and prudent contract 
structures sustain the Group’s 

Enhancing Operational 
Preparedness 
Business Continuity Management (BCM) 
enables our businesses to respond 
seamlessly to external events while 
minimising operational disruptions. All 
key business operations in the Group are 
required to continually enhance their 
operations, identify key threats to 
operations such as pandemic ﬂ u, 
terrorism and natural disasters, prepare 
response plans, and perform tests to 
reﬁ ne their effectiveness. BCM activities 
and plans are monitored and reported 
to respective committees as well as to the 
BRC. In 2008, pandemic ﬂ u outbreak 
simulations were conducted at selected 
locations in Singapore as well as overseas. 

118

Keppel Corporation Limited 
Report to Shareholders 2008

Sustaining Growth
Technology Development

Technology excellence and innovation 
is key to strengthening our 
core competencies and developing 
new growth drivers.

Focus areas

  Encourage technology development and innovation 
  Develop rig and critical equipment solutions for frontier Exploration and Production
  Build up environmental engineering solutions

Sustainability Report
Sustaining Growth

119

Sustaining Growth
Technology Development

KTAP members at a brieﬁ ng on the latest technology developments at Keppel Seghers in Belgium.

Driving Technology 
and Innovation
Established in 2004, the Keppel 
Technology Advisory Panel (KTAP) 
is envisioned to be a key platform for 
sustaining the Group’s technology 
leadership. In addition to the provision 
of strategic leadership for our R&D 
efforts, KTAP also mentors and 
challenges the robustness of initiatives 
in research, development, testing and 
commercialisation of new products and 
services in our businesses.

a broad range of topics ranging 
from offshore solutions for Arctic 
environments, maritime renewable 
energy, intellectual property 
management practices, green 
buildings, as well as updates on 
ongoing R&D projects across the 
Group. With mounting global climate 
change concerns, one meeting was 
dedicated to the exploring of how the 
Group could meaningfully harness 
long-term trends in renewable energy 
and sustainable development. 

With Board and senior management 
participation, KTAP convenes 
twice a year and has met 10 times 
since its inception. Chaired by 
Professor Cham Tao Soon, 
President Emeritus of Nanyang 
Technological University and Chancellor 
of UniSIM, KTAP comprises eight other 
academic and industry experts from 
both the local and international arena.

At its meetings in Amsterdam and 
Singapore in 2008, KTAP deliberated 

Looking ahead, KTAP will continue 
to play a catalytic role in fostering a 
vibrant R&D culture within the Group 
and as a platform to identify areas to 
sustain our competitive edge.

Spearheading O&M Technology 
Development 
Launched in end-2007, Keppel 
Offshore & Marine Technology Centre 
(KOMtech) underscores Keppel O&M’s 
commitment to long-term research. It 
provides crucial technology foresight, 

spearheading Keppel O&M’s thrust into 
new markets and constantly pushing 
technology frontiers by developing 
cutting-edge technologies to meet 
future market needs. 

With its emphasis on technologies with 
strategic and commercial impact, 
KOMtech augments the work of three 
existing technology units – Offshore 
Technology Development (OTD), 
Deepwater Technology Group (DTG) 
and Marine Technology Development 
(MTD) – which focus on design 
and engineering.

In November 2008, it moved into its 
newly-renovated building, bringing 
together for the ﬁ rst time more than 
50 researchers under one roof, and 
facilitating teamwork and greater cross-
fertilisation of ideas. 

With an initial $150 million funding for 
its ﬁ rst ﬁ ve years providing reasonable 
ﬁ nancial visibility, KOMtech researchers 
can focus on longer-term innovations 

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and projects without short-term funding 
distractions. In 2008, KOMtech ﬁ led 
eight patents for the fruits of its labour.

Keppel O&M also actively participates 
in industry forums and events, keeping 
abreast of latest technology trends 
and innovations while projecting its 
contributory role in shaping offshore and 
marine industry trends and development. 
Major events in 2008 include:
(cid:129)  Sponsorship of the Second Jack-

Up Conference 2008 in Singapore, 
in addition to a presentation by 
OTD;

(cid:129)  Sponsorship of the Deepwater 
Development Workshop in 
Singapore in November, in addition 
to a presentation by DTG;
(cid:129)  Presentation of the 6th Keppel 

O&M Lecture delivered by Keppel 
Chair Professor Andrew Palmer, 
who spoke on ‘Carbon Dioxide 
Capture & Storage: Technology 
and Politics’;

and Future’; and

(cid:129)  Participation in other international 
conferences, including LNG Tech 
Asia Paciﬁ c 2008 (Singapore); 
Gastech 2008 (Bangkok); ICE 
Tech 2008 (Canada); Algae Biofuel 
Summit 2008 (India); Futuropolis 
2058 (Singapore); ABS Harsh 
Environment Workshop (Canada); 
and Commercialising FLNG Asia 
2008 (South Korea).

Directing Environmental 
Solutions
Keppel Seghers continues to direct 
its efforts to the R&D of innovative 
environmental solutions and 
constantly upgrades both its water 
and thermal treatment capabilities, 
to maintain its competitive edge as 
a global player owning both water 
and thermal technologies, placing it 
in a key position to address global 
environmental challenges.

(cid:129)  Support of the 22nd Chua Chor 
Teck Memorial Lecture delivered 
by Mr Nick Sansom, who spoke 
on ‘Marine Insurance: Past, Present 

The Keppel Environmental Technology 
Centre (KETC) was established by 
KIE in 2007 as a centre of excellence 
to spearhead innovation in leading-

KOMtech is developing new techniques and equipment for the 
difﬁ cult frontiers such as the North Sea and Arctic regions.

edge environmental technology R&D, 
augmenting existing R&D initiatives 
and strategic alliances with leading 
academic and industry partners. 

Since then, KETC has worked closely 
with research partners and research 
institutes like A*STAR, Singapore 
Institute of Manufacturing Technology 
and Institute of High Peformance 
Computing, to harness external 
resources and constituencies in 
complementing its own research base.

Keppel’s environmental technology 
R&D road map has continued to make 
steady progress, with a ready stream 
of testbedding and pilot technology 
initiatives, as follows:
(cid:129)  The MEMSTILL® project, which 
seeks to develop a novel and 
low-cost desalination process, 
conducted its third pilot testing 
in the Netherlands. A large 
demonstration plant is planned for 
year 2010 in Singapore;

(cid:129)  A pilot plant under the REXODAN 
project was commissioned and 
operated to test the digestion of 
mixed sludge in a mesophylic 
anaerobic/thermophylic aerobic 
operation with sludge recycling;

(cid:129)  A membrane bioreactor pilot 

plant for Mitsubishi Rayon was 
commissioned at Bedok Water 
Reclamation Plant in Singapore;
(cid:129)  A NEWater pilot plant was run to 

optimise operation, with a modiﬁ ed 
reverse osmosis interstage turbo 
charger tested and installed to 
improve energy recovery;

(cid:129)  Research and tests were also done 
on photocatalystic oxidation for the 
reduction of membrane fouling; and

(cid:129)  Keppel Seghers also designed, 
constructed, commissioned and 
operated two membrane bioreactor 
pilot plants, to test the technology 
that treats wastewater into industrial 
water quality in a single step. The 
ﬁ rst plant is for Toray at Ulu Pandan 
Water Reclamation Plant while the 
second is the third pilot plant for 
Asahi at Utrecht Water Reclamation 
Plant in The Netherlands.

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Sustaining Growth
Environment Protection

A commitment to run our operations 
responsibly and to develop projects with 
minimised negative impact on our environment 
will create a positive effect on our businesses, 
the community and the next generation.

Focus areas

  Pursue responsible development 
  Inculcate green mindset

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Overseas, Keppel Land’s properties 
also set green trends in environmental 
performance and stewardship.

Industry for its energy conservation 
features including energy-saving air-
conditioning, lighting and lift systems.

The Estella in Ho Chi Minh City (HCMC) 
became the ﬁ rst development in 
Vietnam to receive BCA’s Green Mark 
Gold Award. The luxury condominium 
will incorporate the latest green 
technology expected to yield overall 
annual energy savings of 23% and 
34,000 m3 of water. Saigon Centre, 
the preferred address for international 
businesses and diplomatic corps in 
HCMC, was named the Most Energy-
Efﬁ cient Building (First Runner-Up) 
by Vietnam’s Ministry of Trade & 

Jakarta Garden City, a 270-ha integrated 
lifestyle township development in 
Indonesia, offers a green haven for 
families. Thoughtful planning and design 
were put into creating extensive 
landscaped gardens and communal 
parks zoned for the well-being of 
residents and to enhance their 
appreciation of the natural surroundings.

Ria Bintan Golf Club in Bintan, Indonesia, 
attained certiﬁ cation under the 
Audubon Cooperative Sanctuary 

Key Eco Principles

Ecollaboration

Work with stakeholders, policy-makers and decision-markers 
to build a 'greener' future

Economy

Balance commercial viability and environmental sustainability

Ecommitment

Promote environmental awareness and support green initiatives

Ecommunity

Create sustainable developments for future generations

Pursuing Responsible 
Development
Keppel Land’s commitment towards 
balancing commercial objectives 
and maintaining high standards of 
environmental protection has driven 
its achievement of several green 
standards and awards.

It attained the ISO 14001:2004 
certiﬁ cation for its Environmental 
Management System (EMS) for property 
development in Singapore in September 
2008. For its environmental and social 
performance transparency efforts, 
Keppel Land, a three-time nominee 
since 2005, emerged a ﬁ nalist in the 
2008 Singapore Environmental and 
Social Reporting Awards. Keppel Land 
also earned the Green Ofﬁ ce Label by 
the Singapore Environment Council in 
December 2008.

Its sterling ofﬁ ce and residential 
developments bagged top green honours 
from the Building and Construction 
Authority (BCA). Ocean Financial Centre 
and Marina Bay Financial Centre 
(Phase 1 – Commercial) received the 
Green Mark Platinum and Gold Awards 
respectively while iconic waterfront 
development Reﬂ ections at Keppel Bay 
was presented the Green Mark Gold 
Award. State-of-the-art green features 
and innovations in these eco-sensitive 
properties will beneﬁ t home owners 
and tenants in terms of long-term energy 
savings and contribution to conserving 
the environment. Reﬂ ections at Keppel 
Bay was awarded the Green Mark Gold 
Award for green and energy-saving 
features such as motion sensors at 
lift lobbies and clubhouse toilets, 
pneumatic waste collection system as 
well as green roofs and walls at the 
substation and tennis courts.

Marina at Keppel Bay, located on 
Keppel Island, became the ﬁ rst Asian 
marina to be awarded Clean Marina 
status under the Clean Marinas 
Australia Programme by the Marina 
Industries Association of Australia. 

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123

Sustaining Growth
Environment Protection

Celebrating World 
Environment Day
On World Environment Day on 5 June 
2008, a ﬂ urry of green activities was 
launched across the Group to promote 
the green message amongst Keppelites. 
Keppel O&M launched a green campaign 
with a Group-wide broadcast of its 
Green Vision via emails and posters, 
encouraging management and staff to 
embrace a green culture.

Keppel Shipyard held an Adopt-a-Bin 
competition during its Environmental 
Awareness Month launched on World 
Environmental Day. Each department 
adopted, designed and decorated 
120-litre waste-bins based on the 
theme “Saving the Earth”. 

Keppel Land organised a lunch-time 
talk at the National Library’s The Pod, 
featuring an eco-stellar line-up of 
Singapore’s environmental champions.  

The ofﬁ ce lobbies of Keppel Land 
and K-REIT Asia’s buildings were 
transformed into week-long exhibition 
areas promoting awareness among 
tenants and public users on climate 
change, waste minimisation and 
recycling processes.

Keppelites abroad also did their part 
to commemorate the day.

Staff in China, Vietnam and Thailand 
were given complimentary screenings 
of An Inconvenient Truth, an acclaimed 
documentary ﬁ lm about global warming 
championed by former United States 
Vice President Al Gore. 

Eco-exhibitions promoting awareness on climate change, waste minimisation and recycling 
processes were set up in the ofﬁ ce lobbies of Keppel Land and K-REIT Asia.

Keppel Thai Properties distributed 
booklets on How to Save Bangkok from 
Global Warming to staff and residents 
at the Srinakarin and Watcharapol 
properties. It also organised a Green 
Slogan contest and distributed garden 
trays to employees as part of a ﬂ ower-
planting exercise.

Staff in Myanmar, Sedona Hotel Yangon 
and in Sedona Suites Hanoi took to 
tree-planting.

In China, Keppel Land’s Beijing ofﬁ ce 
observed a Green Week where staff 
were encouraged to forego the use 
of plastic bags and paper cups, avoid 
smoking and reduce car usage. 

The Vietnam teams put up posters 
promoting energy and water 
conservation and waste minimisation 
at Saigon Centre. 

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Report to Shareholders 2008

Programme for Golf Courses by 
Audubon International, recognising 
its ongoing efforts to preserve wildlife 
and natural resources while delivering 
world-class product and services. 

Keppel Land has set as its benchmark 
to achieve at least the BCA Gold Green 
Mark standard or equivalent for all its 
developments in Singapore and overseas. 

Inculcating Green Mindset 
Green Champions across Keppel 
Group were appointed and trained at 
an Environment Champions Workshop 
on 5 September 2008. Organised by 
Keppel Integrated Engineering (KIE) 
together with National Environment 
Agency (NEA), the workshop provided 
valuable knowledge and innovative 
ideas in caring for the environment. 
Keppel’s Green Champions are now 
part of more than 500 NEA Corporate 
Environment Champions nationwide.

Several screenings of An Inconvenient 
Truth were held for employees from 
Keppel O&M. Some 15,000 notebooks 
made of 100% recycled paper 
containing useful resource-saving tips 
were also distributed to all employees. 

Keppel Land undertook various 
initiatives to drive home the green 
message. It organised a special talk 
on sustainable developments by 
Mr Peter Rawlings, a Principal with 
Environment Resources Management 
and a member of the UN Environment 
Programme’s Sustainable Buildings 
and Construction initiative. Discounts 
and privileges were secured for staff 
who brought their own mugs to various 
patrons at Bugis Junction where 
Keppel Land’s ofﬁ ce is located. 
Keppel Land set up a green resource 
centre, offering a wide selection of books, 
articles and DVDs on care for the 
environment. Staff were encouraged to 
bring their families to the Climate Change 
and Water: H20 = Life exhibitions at the 
Singapore Science Centre.

Keppel Land participated in the annual 
international Earth Hour event organised 
by the World Wildlife Fund held in March. 
All non-essential lights in its ofﬁ ces 
were switched off at 8pm on 29 March 
2008 for a full hour to contribute to 
lowering carbon imprint. 

KIE collaborated with Keppel Land and 
Group Corporate Communications to 
develop environmental-themed posters 
for display at their ofﬁ ces, aimed at 
reminding employees to embrace 
an eco-friendly lifestyle at work and 
beyond. The posters carried tips on 
resource conservation and how to 
achieve water and energy efﬁ ciencies.

Singapore Petroleum Company (SPC) 
launched a Green Initiatives campaign 
where ﬁ ve recycling bins were placed 
at its head ofﬁ ce for the collection of 
recycling paper. 

1

1  The BCA Green Mark Platinum Award-

winning Ocean Financial Centre will boast 
the largest assembly of Photovoltaic 
Cell system for a commercial building in 
Singapore’s CBD as well as several green 
features such as terraced roof gardens. 

2  Keppel Land’s Go Green reusable bags 

were useful communication tools to engage 
the public.

2

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125

Empowering Lives
People Development

Cultivating and growing a diverse 
pool of holistic individuals, 
innovative teamplayers and 
responsible citizens is critical 
in our mission to build enduring 
and value-creating businesses.

Focus areas

  Attract, develop and retain talent   
  Build a formidable competent workforce
  Create a culture of safety and managing risk

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Keppel Corporation Limited 
Report to Shareholders 2008

Manpower by Segment (number)

Manpower by Country (number)

Executive / Non-executive 
(number)

  Offshore & Marine 

 27,437

  Singapore 

18,417

  Property 

  Infrastructure 

  Investments 

2,956

5,064

164

China and Hong Kong 1,732

  Rest of Asia 

  US 

  Brazil 

  Others 

5,401

1,315

6,865

1,891

  Executive 

  Non-executive 

6,946

28,675

Attracting Talent 
Keppel attracts talent through 
scholarships, internships and 
exchange programmes amongst other 
initiatives and recruitment exercises. 
A total of 12 new Keppel scholars were 
inducted into the Keppel family at the 
Keppel Group Scholarship Awards 
Ceremony on 15 July 2008. They will 
be groomed for roles in the various 
business units in alignment with their 
aspirations and qualiﬁ cations.

Arab-Asian 
International Exchange
Keppel Corporation, in partnership with 
Young Arab Leaders (YAL), successfully 
piloted the Arab-Asian Internship 
Exchange Programme. The Programme 
follows the inauguration of the Global 
Action Forum: Arab and Asian Dialogue 
in April 2007, and is part of the Arab-
Asian Taskforce’s strategy to promote 
co-operation and understanding 
between the Arab world and Asia.

Under the Keppel International 
Scholarship which was launched 
to attract international talent, Keppel 
scholars from Vietnam and China are 
currently pursuing their post-graduate 
studies in the National University 
of Singapore (NUS). 

With a footprint in 35 countries through 
our key businesses in Offshore & 
Marine, Property and Infrastructure, 
the Keppel Group was selected to 
pilot and provide meaningful and 
experience-rich internships to the Arab 
youths to expand their global mindset.

Our outreach initiatives for young talent 
include the Keppel Scholarships for 
Hwa Chong Institution and St Joseph 
International, where international 
students from India and Vietnam 
are offered scholarships.

Nine outstanding young Arabs 
interns were paired with managers 
from Keppel, focusing on 
knowledge exchange in the areas 
of entrepreneurship, leadership 
development and education. 

With the success of this programme, 
the Keppel Group will be looking 
at more strategic exchanges with 
emerging economies in the near future.

NUS Real Estate 
Internship Programme
A new collaborative project between 
Keppel and the NUS Real Estate 
was the NUS Real Estate Internship 
Programme. Seven interns, including 
some from the Dean’s List, took 
on challenging and practical work 
assignments under the mentorship of 
Keppel Land managers, gaining work 
experience and an appreciation 
of various career options.

Keppelites for China 
As part of the Keppelites for China 
initiative, opportunities are available 
for Keppelites to intern or to work on 
assignments in China. One studying 
scholar was posted to China in early 
2008 for an internship stint in Keppel’s 
Beijing and Tianjin ofﬁ ces. 

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127

Empowering Lives
People Development

1

2

1  The Global Young Managers Programme provides opportunities 

for Keppelites to hone key competencies. 

2  Continuous skills upgrading is part of Keppel’s people development.

Developing and Grooming Talent
Under Keppel’s 3-E (Education, 
Exposure and Experience) 
development platforms, the Keppel 
Group provided the following talent 
development programmes.

Education
In addition to individualised training 
needs where employees undergo 
training from a list of recommended 
programmes, 13 Keppel Group 

Management Development 
Programmes were offered to 
Keppelites across the Group.

These programmes offer development 
in personal leadership, people 
leadership and managerial skills 
such as conﬂ ict resolution, effective 
communication, interviewing, 
negotiation, critical thinking and 
decision-making.

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Report to Shareholders 2008

The programmes sharpen participants 
in the various aspects of Keppel 
Leadership Competencies and are 
also excellent platforms for interaction 
across different strategic business 
units (SBUs).

More than 200 Keppelites participated 
in these development offerings in 2008.

Exposure
Eleven Keppelites from across the 
Group attended IE Singapore’s 
Executive Programmes in Vietnam, 
Russia, Brazil, China and the Middle 
East, to gain an overview of business, 
cultural and socio-political developments 
in these countries.

Keppelites were also selected for 
the Leaders! Programme, to learn 
and network with counterparts from 
Temasek-linked companies. 

As part of the Keppelites for China 
initiative and to deepen Keppelites’ 
exposure to Chinese culture, three 
runs of business Mandarin and Chinese 
culture programme were rolled out for 
senior management, practitioners and 
young Keppelites.

Our senior management and Board 
members also exchanged views 
with talents across the Group at 
various ongoing interaction and 
dialogue sessions.

Experience
To develop their global and 
cross-business units experience, 
young Keppelites from Keppel 
Corporation were put on secondment 
and cross-business units assignments. 
These included assignments to the 
Sino-Singapore Tianjin Eco-City 
project in China and Keppel 
AmFELS in the US.

Thirty-one young managers across 
Keppel Group attended the Global 
Young Managers Programme led 
by Keppel O&M. These participants 
underwent intensive modules such as 
Finance for Non-Finance Managers, 

Focusing on Employee Wellness
Keppel Corporation was awarded the 
Biennial Singapore Health Award, Gold 
category, in recognition of its efforts 
for employee wellness for the year 
2007/2008.

Several talks were organised through 
the year to promote employee 
wellness. These included a lunch 
talk, CPF Changes and You, 
where employees gained insights 
from Professional Investment Advisory 
Services, a ﬁ nancial planning ﬁ rm 
on recent CPF changes and options 
available under CPF LIFE. A Cancer 
Awareness Talk by the National Cancer 
Centre was organised on 19 June 
2008. Employees appreciated the talk, 
with many indicating their interest for 
more health and ﬁ tness related talks.

Writing and Presentation, Creative and 
System Thinking, Personal Awareness 
and Building Effective Teams. The 
programme is especially beneﬁ cial 
to young overseas managers who 
were able to visit Keppel’s businesses 
in Singapore.

Building Bench Strengths 
for Key Positions
Over the past few years, the Board 
has put in place a succession planning 
framework for senior management in 
the Group. Both the Board and our 
Senior Executive Directors regularly 
review their list of potential successors, 
and assess them against a list 
of leadership attributes developed 
in-house. 

A deliberate plan put in place to 
develop these candidates via learning 
and development interventions include 
regular face-to-face interaction, 
executive coaching, international 
assignments, executive development 
programme and leading roles in major 
projects. The effort is also stewarded 
as a Key Performance Indicator in the 
supervisor’s Balanced Scorecard.

Grow Beyond Series 
Pulling together Keppelites across 
SBUs was the 4th Grow Beyond Series 
– No Limits! More than 400 Keppelites 
were inspired by the achievements of 
Australian Motivational Speaker and 
Director of Life without Limbs, 
Mr Nick Vujicic, who overcame numerous 
obstacles in his life. Keppelites also 
picked up social and entrepreneurship 
tips from Ms Elim Chew, a home-grown 
entrepreneur and youth developer. 
Such events expose Keppelites beyond 
their daily challenges at work and 
sustain their motivation in a continually 
changing business environment.

Speaking at the Keppel Group Grow Beyond Series, Australian motivational speaker Nick Vujicic 
inspired Keppelites with his boundless enthusiasm for life and achievement.

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129

Empowering Lives
People Development

Young Arab interns joined Keppelites in the Inter-SBU Games.

Chinese Tea Appreciation
With the growth of Keppel’s businesses 
in China, the KSAA is exploring 
initiatives that encourage Keppelites 
to take an interest in China and equip 
them with some basic knowledge on 
the country. Through seminars and 
activities, KSAA hopes to increase 
awareness of the Chinese culture as 
well as career opportunities available 
in China to Keppelites. Activities 
organised include a session on 
Chinese tea appreciation in conjunction 
with the Mid-Autumn Festival.

KSAA also plays an active role 
in several community involvement 
initiatives by the Group.

In addition, weekly serving of fresh 
and nutritious fruits were distributed 
to employees during October in 
support of Health Promotion Board’s 
Fruit & Vegetable campaign. 

Forging Networks 
– Keppel Scholars Alumni 
Association (KSAA) 
KSAA is a strategic developmental 
platform empowering young leaders 
to drive Group-wide initiatives. Ofﬁ cially 
inaugurated in 2001, KSAA advances 
Keppel Group’s synergy and serves 
as a strong driving force in forging 
friendship and networks between our 
SBUs. KSAA organised a wide range 
of activities to promote social, community 
and professional development.

Inter-SBU Games (ISBUG)
The highlight for 2008 was the annual 
ISBUG which was held from June 
to August. ISBUG’s ﬁ nale was once 
again the popular Vertical Marathon 
Challenge held at One Rafﬂ es Quay. 
A Keppel Volunteers fundraiser event 
was held in conjunction with the ﬁ nale 
and garnered excellent support.

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Empowering Lives
Health and Safety

Embracing health and safety 
as a way of life goes a long 
way to ensure that every 
worker goes home safely 
every day.

Focus areas

  Individual and collective responsibility    
  Safety ﬁ rst mindset
  Safe work practices

The Keppel Group has made much 
progress in our promotion of safety 
in 2008.  

The Group’s focus on safety was 
reinforced at the second Group Safety 
Convention in September by spreading 
the message that safety must be 
embraced as an individual and 
collective responsibility. The theme 
“Safety Starts with Me” aptly describes 
what each and every Keppelite should 
do when it comes to health and safety. 

See pages 40 to 47 for more on 
Keppel’s safety journey and our 
plans ahead.

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131

Nurturing Communities
Society and Environment

In building Keppel’s brand equity as 
a Singapore-grown MNC, we strongly 
believe in showcasing Singapore 
to the world and contributing to the 
country’s international image.

Focus areas

  Showcase Singapore to the world  
  Support public policy research and education
  Encourage sustainable development

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Showcasing Singapore
The Clipper Round the World Yacht 
Race is one of the world’s most 
celebrated amateur sailing races. 
For the 2007–08 race, Keppel was 
the primary sponsor for the Singapore 
yacht, Uniquely Singapore and host 
port sponsor for the Singapore 
stopover in the race, together with 
race partner, Singapore Tourism Board 
(STB). After 10 months of ocean racing 
covering 35,000 miles across the 
globe, Singapore emerged seventh 
out of the 10-strong international 
racing ﬂ eet and scored a ﬁ rst position 
in Leg 5 from Hawaii to Santa Cruz.

As part of people development, 
Keppel sponsored six employees 
as sailing ambassadors on the race 
of which four were single leggers, 
one crewed in three legs and another 
in ﬁ ve legs. Joining them was a large 
contingent of young people from the 
10 ASEAN countries, supported by 
the Singapore-ASEAN Youth Fund 
and Singapore’s Ministry of Foreign 
Affairs as part of ASEAN’s 40th 
anniversary celebrations.

In 2008, Keppel committed to continue 
its sponsorship of Uniquely Singapore 
for the Clipper Round the World yacht 
races for 2009–10 and 2011–12. This 
marks the third consecutive year that 
Singapore is participating in the race 
and Keppel’s third year as a sponsor. 

For the 2009–10 race, Keppel will be 
the team sponsor and ofﬁ cial host port 
for the Singapore stopover, with STB as 
team partner. The Keppel Bay Sailing 
Academy has also secured the rights 
to provide part of the required pre-race 
Clipper training for participants.

As part of its efforts to facilitate 
business exchanges with other 
countries, Keppel O&M has been 
a continued supporter of the Latin Asia 
Business Forum held in Singapore as 
the gold sponsor, hosting a reception 
for the business and ministerial 
delegates for the past three years. 
The Forum and the reception provided 
an excellent platform for networking 
among businessmen and government 
ofﬁ cials from Singapore and the various 
countries in Latin America. Keppel is 
active in Latin America through Keppel 
O&M and Keppel Seghers. 

Keppel O&M extended its support 
of building ties with Latin American 
countries, particularly Brazil, by 
contributing to the sponsorship of the 
translation and production of the ﬁ rst-
ever Portuguese version of Singapore 
Minister Mentor Lee Kuan Yew’s two-
part memoirs. The Portuguese edition 
was jointly launched by Brazilian 
President Luiz Inácio Lula da Silva and 
Singapore’s Prime Minister Lee Hsien 
Loong during Prime Minister Lee’s visit 
to Brazil on 25 November 2008.

1

1  Mr Choo Chiau Beng, CEO of Keppel 

Corporation (third from left), with ministers 
and ambassadors of the various Latin 
American countries at Latin 
Business Asia 2008.

2  CEO of Keppel Corporation and Singapore’s 

Non-Resident Ambassador to Brazil, 
Mr Choo Chiau Beng (second from left), with 
Singapore’s Prime Minister Lee Hsien Loong, 
Brazilian President Luiz Inácio Lula da Silva 
and Singapore ministers and ofﬁ cials at the 
Ministry of Foreign Affairs in Brazil following 
the launch of the memoirs.

2

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Nurturing Communities

133

Nurturing Communities 
Society and Environment

Supporting Public Policy 
Research and Education
Keppel believes in lending its 
support to public policy research 
and education. 

Keppel Corporation pledged 
$1 million for two years towards 
Business China Singapore. Mooted 
by Singapore’s Minister Mentor Lee 
Kuan Yew, Business China was 
formed in November 2007 to develop 
a pool of bilingual and bi-cultural 
Singaporeans who can engage China 
comprehensively and holistically in the 
economic, business, social, cultural 
or educational ﬁ elds. Business China 
plans to launch various initiatives such 
as talks and networking sessions 
among Chinese and Singapore 
businesses as well as develop an 
e-learning portal with interactive learning 
resources and reference materials.

Keppel Corporation also sponsored 
$50,000 towards Singapore 
Perspectives 2008. Held on 1 February 
2008, this ﬂ agship conference of 
Singapore’s Institute of Policy Studies 
aims to engage Singaporeans in 
a lively debate about the public 
policy challenges facing the country. 
Distinguished panelists in 2008 include 
Minister Mentor Lee Kuan Yew and 
several Cabinet ministers.

Apart from supporting various 
schools and institutions ﬁ nancially, 
Keppel supported the Securities 
Investors Association of Singapore’s 
Investor Education Programme 
with a contribution of $100,000. 
Through seminars and workshops, 
the programme aims to educate 
retail investors in making informed 
investment decisions to grow and 
protect their wealth.

Keppel Corporation contributed 
$3 million to the endowment fund 
of the Sim Kee Boon Institute for 
Financial Economics, Singapore 
Management University in 2008. The 
late Mr Sim had a distinguished career 
in both the public and private sectors 

and played an important role in the 
economic development of Singapore. 
He was also Executive Chairman of 
Keppel Corporation from 1984 to 
2000, transforming a home-grown 
shipbuilding company into a 
global conglomerate.

Keppel Corporation sponsored 
$1 million to the Lee Kuan Yew 
Conference Room in Arundel House, 
the headquarters of the International 
Institute for Strategic Studies (IISS) 
in London. The IISS is the world’s 
leading authority on political-military 
conﬂ ict. Minister Mentor Lee gave a 
special lecture at the inauguration of 
the room on 23 September 2008.

As main sponsor of the 6th IISS 
Asia Security Summit under the 
auspices of The Shangri-La Dialogue, 
attended by defence ministers 
and senior ofﬁ cials from numerous 
nations, Keppel supported efforts 
to promote Asian defence diplomacy. 

Encouraging Sustainable 
Development 
Keppel Corporation is a founding 
sponsor of the Singapore International 

Water Week (SIWW) for two years. 
Organised by the Public Utilities Board, 
the SIWW is an international platform 
involving policymakers, industry 
leaders, experts and practitioners 
to address challenges, showcase 
technologies, discover opportunities 
and celebrate achievements in the 
water world. 

The SIWW was held from 23 to 
27 June 2008, together with the 
World Cities Summit and East Asia 
Summit Conference on Liveable 
Cities which explored other aspects 
of sustainable development. Keppel 
Land’s waterfront developments and 
Keppel Seghers’ Ulu Pandan NEWater 
Plant were showcased at this inaugural 
platform. Mr Lim Chee Onn, Chairman 
of Keppel Corporation, was among 
the panel of distinguished speakers 
for the roundtable discussion on The 
Business of Water at the SIWW’s 
Water Leaders Summit.

Keppel Corporation sponsored 
Responsible Business, a new television 
series showcasing leading global 
corporations that partner governments, 
non-governmental organisations 

Table housing coral fragments are lowered and secured underwater by Keppel Volunteers, NParks 
and NUS divers for propagation before transplanting to recipient coral reefs.

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(NGOs) and international organisations 
to develop business-driven solutions 
for challenges facing our world today.

Keppel Group continued its steadfast 
support to the Coral Nursery Project in 
2008. Launched in July 2007, the project 
is a collaboration with NUS, National 
Parks Board and NEA, and is part of 
a national effort to conserve the coral 
cover in Singapore. It is Singapore’s 
ﬁ rst corporate-sponsored marine 
environmental initiative and the ﬁ rst in 
the region. Keppel’s sponsorship of 
$250,000 spans two years and supports 
maintenance efforts for the nurturing 
and re-growth of coral fragments. The 
growth and development of the coral 
nursery will be monitored with the view 
of future transplanting. 

In addition, a 30-strong team of Keppel 
Volunteers with diving experience has 
come forward as our volunteer divers. 
Twice a month, four volunteer divers 
deploy nursery tables and perform 
maintenance cleaning, hand-in-hand 
with NUS. The project has been well 
received by the public and featured in 
the local media. 

Keppel Group is the Gold Sponsor for 
Asia Dive Expo 2008, an exhibition 
targeted at educating the public on 
how human actions affect the marine 
environment and what humans can do 
to remedy the situation.

Keppel Group was the main sponsor 
of Blue Planet, a highly acclaimed 
10-part BBC documentary narrated 
by world-renowned naturalist, David 
Attenborough. Almost ﬁ ve years 
in the making, the series involved 
nearly 200 ﬁ lming locations and has 
been described as “the ﬁ rst ever 
comprehensive series on the natural 
history of the world’s oceans”. The 
series was aired on Singapore’s Arts 
Central from April to June 2008 and 
won multiple Emmy and BAFTA TV 
awards for music and cinematography.

KIE and Keppel Land were the 
platinum sponsors of the Corporate 
Environmental Outreach (CEO) Run 
held on 19 October 2008 at Pulau 
Semakau organised by NEA. Funds 
raised were channelled to six local 
environmental NGOs to develop and 
sustain their community outreach 

and education efforts to enhance the 
public’s environmental responsibility. 

Keppel Land organised a Christmas 
Bazaar on 10 December 2008 where 
staff could purchase handicrafts 
made of recycled material from 
various charities such as the Institute 
of Mental Health, Association for 
Persons with Special Needs (APSN), 
Cicada Tree Eco-Place and Singapore 
Management University Ambassadors. 
Funds raised went to the Elephant 
Nature Foundation, World Vision, 
Tabitha Foundation and Riverkids 
Project.

Keppel Land sponsored 500 recyclable 
bags and 100 mugs at a public event, 
RSC Block Party: the Eco-Solutions 
Festival, held at the Old School @ Mt 
Sophia on 19 July 2008. The highlight 
of the Festival was a rock concert 
by local bands to increase youth 
awareness on environmental issues. 
Keppel Land further sponsored 200 
bags and mugs for Clean and Green 
Singapore – North West! on 
9 November 2008, organised by the NEA 
North West Regional Ofﬁ ce and North 
West Community Development Council.

For the second consecutive year, SPC 
supported MediaCorp’s Saving Gaia 
campaign, which aims to increase 
awareness of environmental issues.

SPC also collaborated with 
MediaCorp’s Capital 95.8FM radio 
station in a Save-the-Earth recycling 
drive where listeners dropped off their 
recyclable items at designated SPC 
service stations. Proceeds from the 
collection were donated to Capital 
95.8FM’s adopted charity, Fei Yue 
Family Service Centre.

Keppelites joined representatives from other corporations at tree planting after the inaugural CEO Run 
on Pulau Semakau organised by the NEA.

Sustainability Report
Nurturing Communities

135

Nurturing Communities
Community Involvement

Management of 
Keppel Corporation 
and the National Arts 
Council celebrating 
the launch of 
Keppel Nights at the 
40th Anniversary 
with Senior Minister 
Goh Chok Tong 
(middle).

Wherever we operate and 
whenever we can, we seek 
to make a contribution to the 
well-being and welfare of 
the communities.

Focus areas

  Promote the arts  
  Encourage volunteerism, community and charity work

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Keppel Corporation Limited 
Report to Shareholders 2008

martial art form and Brazil’s second 
most-loved sport after soccer. This 
is the third year that Keppel O&M 
has supported the festival.

Keppel Group’s Keppel Music Scholarship 
programme was established to 
nurture young talents and support 
Singapore’s ﬁ rst conservatory, the 
YST Conservatory of Music. In 2003, 
Keppel committed $600,000 to 
sponsor 10 students over a period of 
ﬁ ve years to pursue a four-year degree 
programme at YST. Six Keppel Music 
Scholars have since graduated while 

two more Vietnamese were awarded 
the scholarships in 2008. Two of the 
six scholars who have graduated, 
Tran Thi Tam Ngoc and Tran Duc Minh, 
performed in their homeland with the 
Ho Chi Minh Symphony Orchestra on 
17 August 2008.

Keppel O&M sponsored A Jazzy 
Christmas, a concert by Jeremy 
Monteiro, Singapore’s King of Swing 
and Cultural Medallion holder. Over 
80 Keppel guests were entertained 
by a stellar cast of acclaimed 
international musical talents.

Continued on page 140 ...

Nurturing Appreciation 
for the Arts
In celebration of our 40th anniversary, 
Keppel Corporation chose to support 
and nurture local music talents. We 
sponsored a performance by the 
Singapore Symphony Orchestra (SSO) 
under the baton of Maestro Lim Yau 
at the Esplanade on 19 August 2008. 
Graced by Singapore’s Senior Minister 
Goh Chok Tong, the highlight of the 
concert was the world premiere of Of 
Passion and Passages, a symphony 
composed by Professor Ho Chee 
Kong from the Yong Siew Toh (YST) 
Conservatory of Music. The piece was 
specially commissioned by Keppel for the 
occasion. Sixteen-year-old pianist Abigail 
Sin also did a solo turn at the concert.

Keppel was the Platinum Sponsor of 
Encore! The European Season, the ﬁ rst 
European Cultural Season to be held 
worldwide. The Season was launched 
on 6 May 2008 with the opening of 
the 18th European Union Film Festival. 
Minister for Information, Communications 
and the Arts, Dr Lee Boon Yang graced 
the inaugural ceremony at the Cathay 
Picturehouse. The Season featured over 
45 events including ﬁ lm screenings, 
concerts, visual arts exhibitions, 
theatrical productions, literary events 
and dance performances. 

1

In September 2008, Keppel O&M was 
the presenting sponsor of the Brazilian 
musical ensemble and renowned 
bossa nova pioneers, Roberto 
Menescal, Wanda Sa, Joao Donato, 
Marcos Valle and Vinicius Cantuaria.

Keppel O&M was also the presenting 
sponsor of the 5th International 
Capoeira Festival organised by the 
Association of Capoeira Argola de 
Ouro. Capoeira is an Afro-Brasileira 

1  The SSO gave a stirring performance of 

Of Passion and Passages at Keppel’s 40th 
anniversary concert on 19 August 2008. 

2  Keppel O&M sponsored a Christmas concert 
by Jeremy Monteiro and his international 
jazz luminary friends, who thrilled fans with 
beautiful renditions of jazzy bossa nova 
(Photo credit: Peter Phua).

2

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137

Nurturing Communities 
Community Involvement

“With half-priced tickets under 
Keppel Nights, I can now watch 
more arts performances with my 
parents at prices we can afford.”

Alyna Tan, 9
Student

Bringing Singaporeans 
to the Arts
In the spirit of Nurturing Communities, 
Keppel Corporation has been deeply 
involved in promoting Singapore’s arts 
scene, and has provided numerous 
platforms to showcase both local and 
foreign talent and artistes for the last 
25 years. The Group continues to prop 
up arts programmes and groups that 
have impactful causes. 

In August 2008, Keppel Corporation 
joined hands with the NAC in a milestone 
public-private sector partnership that 
presented Singapore’s ﬁ rst sustained 
ticket subsidy scheme. 

Branded Keppel Nights, this innovative 
scheme was launched by Senior Minister 
Goh Chok Tong to commemorate 
Keppel Corporation’s 40th anniversary. 
Backed by a $250,000 cash grant from 
Keppel, Keppel Nights offers the public 
half-priced tickets to pre-selected 
performances over a year.

This initiative extends the Company’s 
efforts to help cultivate audiences 
for arts programmes. It also pays 
tribute to ordinary Singaporeans 
and their contributions towards 
building a vibrant nation in which 
Keppel thrives.

Keppel Nights is making a difference 
by promoting the arts as an integral 
part of the lives of students, senior 
citizens, heartlanders and their families. 
By making arts performances more 
affordable for the public, the scheme 
also enables show presenters and 
arts groups to bolster ticket sales and 
reach out to a wider audience. 

About six months into its launch, 
Keppel Nights had allotted some 
3,500 tickets and achieved an overall 
82% take-up rate. This is translated 
to $60,000 of savings to arts goers. 

Young adults aged 25–34 formed the 
largest group, or 29% of arts-goers 
who purchased tickets through Keppel 
Nights in the second quarter of its run. 
This was closely followed by youths 
aged 18–24, including tertiary students 
and full-time national servicemen, 
at 21%. Senior citizens aged 55 and 
above formed the third largest group 
of arts consumers, at 20%.

Starting with Keppel’s anniversary 
concert performed by the Singapore 
Symphony Orchestra, more than 20 
shows of various genres have since 
beneﬁ ted from the scheme. These 

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Keppel Corporation Limited 
Report to Shareholders 2008

include international favourites such 
as the Vienna Boys Choir, and West 
End musicals ABBA Mania and Cats, 
among many other local performances 
with the likes of the Singapore 
Repertory Theatre’s Shakespeare play, 
Much Ado about Nothing. 

Subsidised tickets to shows targeted 
at the older generation of heartlanders 
such as Art Station’s Vocal Delights 
and Top 10 Chinese Classics by City 
Chinese Orchestra were also almost 
fully subscribed.

Keppel Nights has generated 
a signiﬁ cant public following 
through its ofﬁ cial website 
www.keppelnights.com. As at 
end-January 2009, close to 
10,000 individuals have visited 
the website and viewed its pages 
some 65,000 times.

“My family and I look forward 
to enjoying the performances 
under the Keppel Nights 
programme. It will certainly 
widen my knowledge in music 
and the arts.”

Daniel Wong, 12
Student

A poll on the website was also conducted 
to survey public interest in the genres 
of shows presented. The majority of 
Singaporeans (39%) voted for Musicals 
followed by Music (27%), Theatre (17%), 
Dance (11%) and Arts Exhibitions (6%). 
These results will guide the future 
selection of shows for Keppel Nights.

“I think Keppel is doing a good 
job because senior citizens and 
retirees may ﬁ nd some tickets too 
expensive and can’t afford to go.”

Janet Teo, 59
Retiree

Keppel Nights also reaches out 
to students, adults and families 
though interactive social networking 
platforms such as Facebook. At the 
end of February 2009, the Keppel 
Nights Facebook Club has a captive 
membership of more than 3,500 fans, 
80% of whom are students and young 
adults below 35 years of age.

Building on its success, Keppel Nights 
will continue to enhance the variety of 
performances to appeal to its different 
target groups, and provide audiences 
with an even greater choice.

1  The Keppel Nights scheme has been well-received by audiences young and old. 

2  The public enjoys a variety of international and local shows under this innovative audience 

cultivation scheme. 

3  Primary school students await with eagerness to enjoy Keppel’s 40th Anniversary Concert, 

the inaugural Keppel Nights performance. 

Keppel Nights’ Audience Profile 
(2nd Quarter)

  17 years and below 

  18 – 24 years 

  25 – 34 years 

  35 – 44 years 

  45 – 54 years 

  55 years and above 

4%

21%

29%

11%

15%

20%

Source: SISTIC, GateCrash & ticket.com. N=506

1

2

3

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Community Involvement

APSN students celebrating Singapore’s National Day with Keppel Volunteers.

... continued from page 137

In recognition of its contributions to 
the arts scene such as the Singapore 
Season in China, Keppel Corporation 
received the Patron of the Arts Award 
from the National Arts Council (NAC) 
in October 2008. MobileOne received 
the award as Distinguished Patron of 
the Arts, SPC as a Friend of the Arts 
and Marina Bay Financial Centre as an 
Associate of the Arts.

Driving Corporate Volunteerism
In 2008, Keppel Group sought to 
drive a difference for its adopted 
charity, the Association for Persons 
with Special Needs (APSN), as well 
as the broader community.

Keppel Group was a signiﬁ cant 
sponsor of the hydroponics farm 
project for the Centre for Adults (CFA), 
a learning institution under APSN. 
Keppel Volunteers had sponsored 
the construction of ﬁ ve green houses 
to help secure more employment 
opportunities for APSN students. 
To be used for hydroponics, the 
green houses will be cared for by 
APSN students. Keppel Volunteers 
underwent a training session to 
equip them with basic knowledge 
of hydroponics farming to allow them 
to work effectively alongside APSN 

students for future activities. 
A hydroponics farm harvest ceremony 
was held on 18 January 2008.

Keppel Volunteers brought students 
from Tanglin School and the CFA to 
Asia Dive Expo on 19 April 2008 to 
learn about the challenges facing the 
sustainability of marine wildlife. The 
students were taken on a guided tour 
which explained the damaging effects 
of irresponsible human behaviour on 
the long-term survival of marine life 
and demonstrated ways to protect 
vulnerable marine species. Keppel 
Volunteers also organised other 
monthly activities with students from 
APSN including a hike to Bukit Timah 
Hill, visits to the zoo and the Botanic 
Gardens. Through these monthly 
activities, Keppelites help to make 
a difference in the lives of APSN 
students while at the same time learn 
to interact with people with mild 
intellectual disabilities.

A workshop was organised on 
15 March 2008 at Katong School for 
Keppel Volunteers and Keppelites. The 
purpose of this workshop is to give an 
overview of Keppel Volunteers’ goals 
and activities and introduce APSN to 
Keppelites. Keppel Volunteers held 

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Keppel Corporation Limited 
Report to Shareholders 2008

periodic training to better equip our 
volunteers with the necessary skills to 
be effective when dealing with APSN 
students.

To help ease the blood shortage in 
Singapore’s blood banks, Keppel 
Scholars Alumni Association organised 
a Group-wide blood donation 
drive in conjunction with the Red 
Cross Society of Singapore and the 
Singapore Blood Services Group in 
the ﬁ rst two weeks of December 2008. 
The response was encouraging and 
the collection of 270 packets of blood 
exceeded expectations. 

Promoting Community and 
Charity Work
Raising Funds for Good Causes
As part of Keppel Corporation’s 
40th anniversary celebrations, the 
Keppel Group organised a charity 
golf tournament at the Tanah Merah 
Country Club on 29 August 2008. 
The proceeds of $200,000 went to the 
President’s Challenge to help increase 
awareness of how the community can 
help the less fortunate and raise funds 
for the social service sector.

Keppel Corporation also supported 
several charity fund raising events in 
2008. These include the Celebrities 
Sports Club’s Charity Golf Tournament 
on 11 September 2008 where funds 
raised were channelled to APSN, the 
Lee Hsien Loong Cup Charity Golf 
Tournament on 11 June 2008 to raise 
funds for needy kindergarten children in 
seven branches of the PAP Community 
Foundation in Ang Mo Kio GRC and 
Yio Chu Kang as well as a Centre for 
Fathering charity tournament to support 
the Centre’s cause of raising national 
awareness for positive fathering.

For the third consecutive year, 
Keppel O&M supported Metta Welfare 
Association’s (Metta) charity golf 
tournament with a strong show of 
senior management participation. 
It also provided opportunities for 
intellectually challenged students from 
Metta’s schools to showcase their 
talents in performances at naming 
ceremonies held at Keppel yards.

Keppel Recreation Club actively 
participated in the Jurong Town 
Corporation 40th anniversary 4-km 

Charity Run on 15 September 2008 
and the Maritime and Port Authority of 
Singapore Nautical 6.6-km Charity Run 
on 10 October 2008, with a group of 
runners as well as donation pledges. 

Keppel O&M provided 700 tee shirts for 
the Society for the Prevention of Cruelty 
to Animals Fun Run at Bedok Reservoir 
Park on 8 June 2008. Over 200 people, 
including a team of 10 Keppelites, 
participated in the 4.3-km run.

Keppel Corporation helped to raise funds 
for the National Heritage Board’s (NHB) 
community outreach programmes by 
supporting Heritage Gala 2008, NHB’s 
inaugural fundraising dinner held at 
Ritz-Carlton Hotel on 27 June 2008.  

Keppel’s contributions to charity have 
been recognised by the community. 
Keppel O&M was honoured with the 
Community Chest’s SHARE (Social 
Help and Assistance Raised by 
Employees) Platinum Award for its 
staff support and contribution in 2008. 
Keppel FELS and Keppel Singmarine 
also received Platinum Awards while 
Keppel Shipyard and Keppel Logistics 
received Gold Awards. 

Keppel raised $200,000 for the President’s 
Challenge through a charity golf tournament 
in August 2008.

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141

Nurturing Communities 
Community Involvement

Keppelite volunteers clean the shorelines 
of Keppel Batangas Shipyard.

Caring for Children
The Keppel Group returned for 
the sixth year as a sponsor of the 
National Day Parade in 2008. Joining 
in the celebrations was a group of 
youngsters from APSN, accompanied 
by our Keppel Volunteers and youth 
interns from the Keppel-Young 
Arab Leaders’ Internship Exchange 
Programme who were in Singapore for 
a three-month cultural and knowledge 
exchange stint.

Keppel believes in helping to improve 
the conditions for children to grow 
to their full potential. Keppel Land 
contributed RMB1 million towards the 
Mainly I Love Kids (MILK) Fund for 
the construction of a student hostel in 
Luoyuan, Fujian Province, China. This 
will beneﬁ t some 650 students, many 
of whom trek miles daily from their 
suburban homes for education.

Keppel continued its support of the 
VIVA Foundation for Children with 
Cancer’s ﬁ ght to improve the survival 
rate and cure of children with cancer 
in Singapore and the region, with a 

pledge of $20,000. The Foundation is a 
partnership between St Jude Children’s 
Research Hospital in the US, National 
University Hospital and NUS.

Keppel O&M provided festive cheer to 
the students of Grace Orchard School, 
Singapore Autism School and Metta 
School with 880 digital watches during 
the Lunar New Year in February 2008. 

Keppel Land collaborated with World 
Vision to promote the Tree of Life 
campaign, a child sponsorship 
programme. The tree was set up 
within Keppel Land’s ofﬁ ce premises 
featuring photo cards of 25 children 
waiting to be sponsored.

Promoting Healthy Lifestyle
In line with its Group-wide emphasis 
on health and safety, Keppel has 
stepped up its involvement in events 
promoting health awareness as well 
as an active lifestyle. Keppel O&M 
sponsored the ﬁ rst ever Singapore 
Quadthlon at Changi beach park 
on 12 October 2008. Organised by 
SAFRA, over 250 local and foreign 

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Keppel Corporation Limited 
Report to Shareholders 2008

participants raced in a 500-m swim, 
12-km in-line skate, 20-km cycle and 
6-km run. 

Keppel O&M supported the Health 
Promotion Board (HPB)’s World 
AIDS Day concert at Fort Canning 
Park on 29 November 2008. The 
ﬁ rst such concert of its magnitude, 
local celebrities like Stephanie Sun, 
Hardy Mirza and the Dim Sum Dollies 
performed to the audience to raise 
their awareness of HIV and AIDS. 
Keppel Shipyard also organised the 
Bridges of Hope workshop which 
used games and activities to help 
participants understand their own 
perceptions of HIV and AIDS. Talks 
by HPB were also organised in all 
its yards to promote awareness and 
understanding of health issues and 
sexually transmitted infections.

Connecting with the Community
Contributing to the communities where 
we have presence is also important 
to Keppel. At Acacia Lodge, residents 
have been pitching in to make the 
local community a safe and secure 

living neighbourhood under the Acacia 
Foreign Residents on Patrol (AFROP) 
initiative, by patrolling Spring View 
estate on weekends every fortnight. 
For its community contributions, 
Acacia Lodge received the Southwest 
District Community Safety & Security 
Programme Silver Award.

A team of volunteers from Keppel 
Batangas in The Philippines joined 
students, community folks, business 
groups, and members of different 
government and non-government 
organisations to clean the coastal 
areas along Batangas Bay on 
20 September 2008 as part of the 
International Coastal Cleanup Day.

To help groom prospective and 
talented athletes, the Keppel Group 
contributed $30,000 to support the 
joint efforts of Lantamal IV and 
PT Citra Mas Batam build the 
Lantamal IV Sports Hall, a multi-
purpose sports centre in Tanjung 
Pinang, Batam, Indonesia.

Lending a Helping Hand 
to Disaster Relief
Keppel Group donated about 
US$1 million (about RMB7 million) 
to the Sichuan Quake relief efforts, 
channelled through the Red Cross 
Society of China, to the rebuilding 
of lives and rehabilitation efforts in 
the province hit by a devastating 
earthquake in May 2008.

In China, various fund-raising activities 
were undertaken. Donation boxes 
were placed at Keppel Land’s ofﬁ ces 
and residential properties in Beijing, 
Shanghai, Chengdu and Wuxi. In 
Kunming, Yunnan, Spring City Golf 
and Lake Resort raised over 
RMB250,000 with a charity golf game 
and auction. Keppel Nantong Shipyard 
organised a donation collection from 
staff and subcontractors for the Red 
Cross Society in Nantong.

Keppel Land also donated 
RMB350,000 to support One Love 
Charity Festival, a Singapore-led effort 
to raise additional funds for children 
affected by the earthquake. 

Aid was rendered to employees in 
Myanmar affected by Cyclone Nargis. 
Affected employees of Sedona Hotel 
Yangon were given up to two months 
of advance salary to rebuild their 
homes while those with monthly 
salaries below US$150 were provided 
with food items weekly. Sedona 
Mandalay’s management held a 
donation drive to collect food, clothing 
and other necessities from its staff, 
which were distributed to affected 
employees of Sedona Hotel Yangon. 
Sedona Hotel Yangon also gave a 
one-time donation of US$100 each to 
employees who had lost their homes

Extending heart and hand to quake-striken 
children in Sichuan.

Sustainability Report
Nurturing Communities

143

Keppel O&M continued its support 
of the Latin Asia Business Forum, 
through the sponsorship of a 
reception for delegates from Singapore
and Latin America.

October
The Global Young Leaders 
Programme, organised by Keppel 
O&M with the support of Nanyang 
Business School, was held over three 
days and trained 31 participants 
from across the Keppel Group in 
leadership development.

Keppel O&M inaugurated its new 
centre of excellence for technical 
and specialised skills training, 
and formed a partnership with ITE 
to create Singapore’s ﬁ rst joint-
certiﬁ cation training programmes 
for offshore and marine.

Keppel O&M Quadthlon 2008, 
Singapore’s ﬁ rst quadthlon organised 
by SAFRA, attracted 250 participants 
who competed in swimming, cycling, 
running and in-line skating. 

November
Keppel Corporation entered the 
Uniquely Singapore yacht again for 
the Clipper 2009–10 and 2011–12 
Round the World Yacht Races and 
signed an agreement for Keppel Bay 
Sailing Academy to provide Clipper 
training in Asia. 

December
As part of Keppel’s ongoing 
succession planning, Mr Lim Chee 
Onn relinquished his role as CEO 
while continuing to serve as Chairman 
and Mr Choo Chiau Beng assumed 
the responsibility as CEO of 
Keppel Corporation.

Sustainability Report
Highlights in 2008

January
The ﬂ eet of Clipper 07-08 Round 
the World yachts sailed into Marina 
at Keppel Bay, before leaving from 
Singapore to continue with the race.

Keppel Land formed an Environment 
Management Committee responsible 
for developing and implementing 
environmental programmes.

Mr Nick Sansom, Senior Vice President 
and Head of Marine in Asia, Marsh 
(S) Pte Ltd, presented a paper on 
“Marine Insurance: Past, Present and 
Future” at the 22nd Chua Chor Teck 
Memorial Lecture.

With contribution by Keppel 
Corporation, Keppel Volunteers and 
Association for Persons with Special 
Needs (APSN) jointly launched the 
hydroponics farm to enhance the 
employability of APSN’s clients. 

April
Keppel Offshore & Marine (Keppel O&M) 
was a main sponsor of the National 
Safety & Health Campaign 2008 co-
organised by the Workplace Safety & 
Health (WSH) Council and Singapore’s 
Ministry of Manpower. 

As an extension of their support 
for Singapore’s ﬁ rst coral nursery, 
members of the Keppel Group 
participated in the Asia Dive Expo 2008 
where marine conservation was the 
theme and message.

May
The Keppel Group donated 
US$1 million to China’s Sichuan 
quake relief efforts.

July
The Uniquely Singapore yacht 
ﬁ nished 7th position overall in the 
Clipper 07-08 Round the World Yacht 
Race. Six Keppelites participated in 
the Race as part of Keppel’s people 
development initiatives.

Keppel Corporation appointed 
Mr Ko Kheng Hwa as Chief Executive 
Ofﬁ cer (CEO) of its new Sustainable 
Development & Living business to 
leverage platforms and competencies 
of the Keppel Group to grow businesses
in sustainable developments.

In celebrating our 40th anniversary, 
Keppel Corporation partnered 
National Arts Council and contributed 
$250,000 to introduce Keppel Nights, 
Singapore’s ﬁ rst sustained subsidised 
ticket purchasing scheme to beneﬁ t 
students, heartlanders and 
senior citizens. 

August
Keppel Corporation raised $200,000 
for President’s Challenge 2008 in 
conjunction with its 40th Anniversary 
celebrations.

Keppel Corporation, in partnership 
with Young Arab Leaders (YAL), 
successfully piloted the Arab-Asian 
Internship Exchange Programme with 
nine interns completing their working 
stints in Keppel. 

September 
Keppel Integrated Engineering (KIE) 
and National Environment Agency 
(NEA) organised Green Champions 
Workshop to appoint and train Green 
Champions across the Keppel Group.

The Keppel Group introduced the 
“Safety Starts with Me” initiative, in 
conjunction with Keppel Shipyard’s 
Safety Excellence 2010, to promote 
personal and collective responsibility 
on safety.

The Keppel Group held its 2nd 
Keppel Group Safety Convention to 
reinforce the importance of shared 
responsibility to ensure excellence 
in safety, health and environment 
among Keppelites. 

Keppel Land’s Ocean Financial Centre 
was the ﬁ rst ofﬁ ce development in 
Singapore to achieve the Green Mark 
Platinum Award by the Building and 
Construction Authority while Marina Bay 
Financial Centre (Phase 1 – Commercial)
and Reﬂ ections at Keppel Bay both 
won Gold.

Keppel Chair Professor Andrew 
Palmer from the Department of Civil 
Engineering, National University of 
Singapore, delivered the 6th Keppel 
O&M Lecture on carbon capture 
and storage. 

144

Keppel Corporation Limited 
Report to Shareholders 2008

This annual report is printed on Eco-Frontier and Excel Satin, both labelled as environmentally-friendly paper 
by the Singapore Green Labelling Scheme. These two types of paper are produced with a minimum content 
of 51% recycled paper.

Designed by
greymatter williams and phoa (asia)

In collaboration with
Keppel Group Corporate Communications 

Keppel Corporation Limited
(Incorporated in the Republic of Singapore)

1 HarbourFront Avenue 
#18-01 Keppel Bay Tower
Singapore 098632
Tel: (65) 6270 6666
Fax: (65) 6413 6391
Email: keppelgroup@kepcorp.com
www.kepcorp.com

Co Reg No: 196800351N

   
Directors’ Report & Financial Statements

Directors’ Report
Balance Sheets 
Consolidated Profit and Loss Account 
Statements of Changes in Equity 
Consolidated Cash Flow Statement 
Notes to the Financial Statements  
Significant Subsidiaries and Associated Companies
Statement by Directors 
Independent Auditors’ Report 
Interested Person Transactions
Directors and Key Executives 

Contents
146 
150 
151 
152 
155 
157 
200 
210 
211 
212 
213 
222  Major Properties 
225 
228 
229 
230 
231 
237 
238 

Group Five-Year Performance  
Group Value-Added Statements
Share Performance 
Shareholding Statistics 
Notice of Annual General Meeting and Closure of Books 
Financial Calendar 
Corporate Information

145

Directors’ Report
For the financial year ended 31 December 2008

The Directors present their report together with the audited consolidated financial statements of the Group and balance sheet 
and statement of changes in equity of the Company for the financial year ended 31 December 2008.

1. 

Directors
The Directors of the Company in office at the date of this report are:

Lim Chee Onn (Chairman)
Choo Chiau Beng (Chief Executive Officer)
Tony Chew Leong-Chee
Lim Hock San
Sven Bang Ullring
Tsao Yuan Mrs Lee Soo Ann
Oon Kum Loon (Mrs)
Tow Heng Tan
Yeo Wee Kiong
Teo Soon Hoe

2. 

Audit Committee
The Audit Committee of the Board of Directors comprises three independent Directors.  Members of the Committee are:

Lim Hock San (Chairman)
Tony Chew Leong-Chee
Oon Kum Loon (Mrs)

The Audit Committee carried out its function in accordance with the Companies Act, including the following:

-  Review audit plans and reports of the Company’s external auditors and internal auditors and consider effectiveness 

of actions/policies taken by management on the recommendations and observations;

Independent review of quarterly financial reports and year-end financial statements;

-  Review the assistance given by the Company’s officers to the auditors;
- 
-  Examine effectiveness of financial, operating and compliance controls;
-  Review the independence and objectivity of the external auditors annually;
-  Review the nature and extent of non-audit services performed by auditors;
-  Meet with external auditors and internal auditors, without the presence of management, at least annually;
-  Ensure that the internal audit function is adequately resourced and has appropriate standing within the Company, at 

least annually;

-  Review interested person transactions; and
- 

Investigate any matters within the Audit Committee’s term of reference, whenever it deems necessary.

The Audit Committee recommended to the Board of Directors the re-appointment of Deloitte & Touche LLP as auditors 
of the Company at the forthcoming Annual General Meeting.

3. 

Arrangements to enable directors to acquire shares and debentures
Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose 
object is to enable the Directors of the Company to acquire benefits by means of the acquisition of shares or debentures 
in the Company or any other body corporate other than the KCL Share Option Scheme.

146

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4. 

Directors’ interest in shares and debentures
According to the Register of Directors’ shareholdings kept by the Company for the purpose of Section 164 of the 
Companies Act, none of the Directors holding office at the end of the financial year had any interest in the shares and 
debentures of the Company and related corporations, except as follows:

Keppel Corporation Limited
(Ordinary shares)
Lim Chee Onn 
Choo Chiau Beng 
Choo Chiau Beng (deemed interest) 
Tony Chew Leong-Chee 
Lim Hock San 
Sven Bang Ullring 
Tsao Yuan Mrs Lee Soo Ann 
Oon Kum Loon (Mrs) 
Oon Kum Loon (Mrs) (deemed interest) 
Tow Heng Tan 
Tow Heng Tan (deemed interest) 
Yeo Wee Kiong 
Teo Soon Hoe 

(Share options)
Lim Chee Onn 
Choo Chiau Beng 
Teo Soon Hoe 

Keppel Land Limited
(Ordinary shares)
Tow Heng Tan (deemed interest) 

Keppel Telecommunications & Transportation Ltd
(Ordinary shares)
Lim Chee Onn 
Teo Soon Hoe 

K-Reit Asia
(Units)
Choo Chiau Beng 
Tow Heng Tan (deemed interest) 

1.1.2008 

Holdings At
31.12.2008 

21.1.2009

2,714,166 
981,666 
200,000 
2,000 
2,000 
70,000 
2,000 
42,000 
40,000 
2,626 
26,172 
2,000 
2,708,332 

3,954,166 
1,631,666 
200,000 
4,000 
4,000 
80,000 
4,000 
44,000 
40,000 
4,626 
26,172 
4,000 
3,628,332 

3,954,166
1,631,666
200,000
4,000
4,000
80,000
4,000
44,000
40,000
4,626
26,172
4,000
3,628,332

3,720,000 
1,840,000 
2,760,000 

3,100,000 
1,610,000 
2,300,000 

3,100,000
1,610,000
2,300,000

50 

50 

50

23,000 
28,000 

23,000 
28,000 

23,000
28,000

- 
10 

780,000 
10 

780,000
10

Keppel Structured Notes Pte Limited
(S$ Commodity Linked Guaranteed Note Series 1 due 2011)
Teo Soon Hoe 

$100,000 

$100,000 

$100,000

Keppel Philippines Holdings, Inc
(“B” shares of one Peso each)
Lim Chee Onn 
Choo Chiau Beng 
Teo Soon Hoe 

2,000 
2,000 
2,000 

2,000 
2,000 
2,000 

2,000
2,000
2,000

Directors’ Report 

147

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report

4. 

Directors’ interest in shares and debentures (continued)

Keppel Philippines Marine, Inc
(Shares of one Peso each)
Lim Chee Onn 
Choo Chiau Beng 
Teo Soon Hoe 

Keppel Philippines Properties, Inc
(Shares of one Peso each)
Teo Soon Hoe 

1.1.2008 

Holdings At
31.12.2008 

21.1.2009

246,457 
283,611 
302,830 

2,916 

- 
- 
- 

- 

-
-
-

-

5. 

Directors’ receipt and entitlement to contractual benefits
Since the beginning of the financial year, no Director of the Company has received or become entitled to receive a 
benefit which is required to be disclosed under Section 201(8) of the Singapore Companies Act, by reason of a contract 
made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a 
company in which he has a substantial financial interest except as disclosed in the notes to the financial statements and 
salaries, bonuses and other benefits in their capacity as directors of the Company which are disclosed in the Corporate 
Governance Report.

6. 

Share options of the Company
Details of share options granted under the KCL Share Option Scheme (“Scheme”) are disclosed in Note 3 to the financial 
statements.

Options to take up 16,715,000 Ordinary Shares (“Shares”) were granted during the financial year.  There were 8,048,000 
Shares issued by virtue of exercise of options and options to take up 944,000 Shares were cancelled during the financial 
year.  At the end of the financial year, there were 45,491,000 Shares under option as follows:

Balance at
1.1.2008 or
later date 
of grant 

2,000 
1,210,000 
665,000 
680,000 
1,120,000 
1,560,000 
2,030,000 
3,486,000 
5,650,000 
6,675,000 
6,837,000 
7,853,000 
7,903,000 
8,812,000 

Number of Share Options

Exercised 

Cancelled 

(2,000) 
(1,190,000) 
(655,000) 
(670,000) 
(530,000) 
(780,000) 
(739,000) 
(903,000) 
(2,007,000) 
(558,000) 
(14,000) 
- 
- 
- 

- 
- 
- 
- 
- 
- 
- 
(20,000) 
(54,000) 
(149,000) 
(194,000) 
(237,000) 
(202,000) 
(88,000) 

Date of grant 

27.09.01 
20.12.02 
11.02.03 
14.08.03 
13.02.04 
12.08.04 
11.02.05 
11.08.05 
09.02.06 
10.08.06 
13.02.07 
10.08.07 
14.02.08 
14.08.08 

Balance at 
31.12.2008 

- 
20,000 
10,000 
10,000 
590,000 
780,000 
1,291,000 
2,563,000 
3,589,000 
5,968,000 
6,629,000 
7,616,000 
7,701,000 
8,724,000 

Exercise
price 

$0.62 
$1.30 
$1.32 
$2.24 
$3.01 
$3.24 
$4.42 
$6.24 
$6.39 
$7.66 
$9.13 
$12.95 
$9.96 
$10.26 

Date of expiry

26.09.11
19.12.12
10.02.13
13.08.13
12.02.14
11.08.14
10.02.15
10.08.15
08.02.16
09.08.16
12.02.17
09.08.17
13.02.18
13.08.18

54,483,000 

(8,048,000) 

(944,000) 

45,491,000

148

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The information on Directors of the Company participating in the Scheme is as follows:

Name of Director 

Lim Chee Onn 
Choo Chiau Beng 
Teo Soon Hoe 

Options 
granted 
during the 
financial year 

620,000 
460,000 
460,000 

Aggregate
options 
granted and 
adjusted since 
commencement 
of the Scheme 
to the end of 
financial year 

6,330,000 
4,580,000 
5,040,000 

Aggregate 
options 
exercised since 
commencement 
of the Scheme 
to the end of 
financial year 

2,656,250 
2,396,250 
2,166,250 

Aggregate
options
lapsed since 
commencement 
of the Scheme 
to the end of 
financial year 

573,750 
573,750 
573,750 

Aggregate
options
outstanding as
at the end of
financial year

3,100,000
1,610,000
2,300,000

In addition, options to take up 310,000 Shares in the capital of the Company were granted to Mr Lim Chee Onn on 
5 February 2009 as part of his financial year 2008 total remuneration for the services that he rendered in financial 
year 2008 in his then-capacity as the Company’s Executive Chairman.

No employee received 5 percent or more of the total number of options available under the Scheme.

There are no options granted to any of the Company’s controlling shareholders or their associates under the Scheme.

7. 

Share options of subsidiaries
The particulars of share options of subsidiaries of the Company are as follows:

(a) 

(b) 

Keppel Land Limited (“Keppel Land”)
At the end of the financial year, there were 49,669,026 unissued shares of Keppel Land Limited under option.  
This comprised $300 million principal amount of 2.5% Convertible Bonds due 2013 at a conversion price of 
$6.55 per share and 3,867,500 options under the Keppel Land Share Option Scheme.  Details and terms of the 
options have been disclosed in the Directors’ Report of Keppel Land Limited.

Keppel Telecommunications & Transportation Ltd (“Keppel T&T”)
At the end of the financial year, there were 1,983,000 unissued shares of Keppel Telecommunications & 
Transportation Ltd under option relating to the Keppel T&T Share Option Scheme.  Details and terms of the 
options have been disclosed in the Directors’ Report of Keppel Telecommunications & Transportation Ltd.

8. 

Auditors
The auditors, Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.

On behalf of the Board

Choo Chiau Beng 
Chief Executive Officer 

Singapore, 2 March 2009

Teo Soon Hoe
Group Finance Director

Directors’ Report 

149

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheets
Balance Sheets
As at 31 December 2008
As at 31 December 2008

Share capital 
Reserves 
Share capital & reserves 
Minority interests 

Capital employed 

Represented by:
Fixed assets 
Investment properties 
Development properties 
Subsidiaries 
Associated companies 
Investments 
Long term receivables 
Intangibles 

Current assets
Stocks & work-in-progress in excess of related billings 
Amounts due from:
  -  subsidiaries 
  -  associated companies 
Debtors 
Short term investments 
Bank balances, deposits & cash 

Current liabilities
Creditors 
Billings on work-in-progress in excess of related costs 
Provisions 
Amounts due to:
  -  subsidiaries 
  -  associated companies 
Term loans 
Taxation 
Bank overdrafts 

Net current assets 

Non-current liabilities
Term loans 
Deferred taxation 

Note 

3 
4 

5 
6 
7 
8 
9 
10 
11 
12 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

824,571 
3,771,605 
4,596,176 
2,152,331 

790,407 
4,414,326 
5,204,733 
1,830,459 

824,571 
2,320,268 
3,144,839 
- -

790,407
2,557,968
3,348,375

6,748,507 

7,035,192 

3,144,839 

3,348,375

1,872,571 
3,029,675 
175,510 
- 
3,201,031 
101,024 
197,662 
78,487 
8,655,960 

1,698,231 
2,960,347 
172,758 
- 
3,140,594 
335,849 
134,857 
67,823 
8,510,459 

5,890 
- -
- -
2,867,303 
3,074 
- -
301,018 
- -
3,177,285 

5,668

2,876,962
3,074

301,099

3,186,803

13 

3,217,401 

2,790,649 

- -

14 
14 
15 
16 
17 

18 
13 
19 

14 
14 
20 
28 
21 

- 
326,583 
1,970,831 
330,817 
2,244,851 
8,090,483 

3,939,583 
2,882,124 
58,609 

- 
422,205 
197,868 
344,020 
27,762 
7,872,171 

- 
594,353 
1,753,434 
547,437 
1,600,850 
7,286,723 

3,072,012 
2,542,517 
37,900 

- 
134,331 
499,104 
351,864 
3,767 
6,641,495 

260,718 
300 
59,908 
- -
664,441 
985,367 

958,507
284
157,054

3,884
1,119,729

219,688 
- -
- -

472,848 

- 2
- 
19,669 
- -
712,205 

75,657

418,887

134,820
15,305

644,671

218,312 

645,228 

273,162 

475,058

20 
22 

1,744,553 
381,212 
2,125,765 

1,731,526 
388,969 
2,120,495 

300,000 
5,608 
305,608 

300,000
13,486
313,486

Net assets 

6,748,507 

7,035,192 

3,144,839 

3,348,375

See accompanying notes to financial statements.

150

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
                        
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Profit and Loss Account
For the financial year ended 31 December 2008

Revenue 
Materials and subcontract costs 
Staff costs 
Depreciation and amortisation 
Other operating expenses 
Operating profit 
Investment income 
Interest income 
Interest expenses 
Share of results of associated companies 
Profit before tax and exceptional items 
Exceptional items 
Profit before taxation 
Taxation 

Profit for the year 

Attributable to:
Shareholders of the Company
  Profit before exceptional items 
  Exceptional items 

Minority interests 

Earnings per ordinary share 
  Before exceptional items

  -  basic 
  -  diluted 

  After exceptional items

  -  basic 
  -  diluted 

Gross dividend per ordinary share 

Interim dividend paid 
  Final dividend proposed 
  Special dividend proposed 
Total distribution 

Note 

Group

2008 
$’000 

2007
$’000

23 

24 

25 
26 
26 
26 
9 

27 

28 

27 

29

30

11,805,426 
(8,828,492) 
(1,329,042) 
(139,078) 
(270,340) 
1,238,474 
12,087 
71,002 
(78,671) 
353,957 
1,596,849 
12,592 
1,609,441 
(288,030) 

10,431,250
(8,037,393)
(1,132,125)
(125,692)
(85,391)
1,050,649
2,867
88,542
(62,710)
476,882
1,556,230
564,933
2,121,163
(468,635)

1,321,411 

1,652,528

1,096,653 
1,318 
1,097,971 
223,440 

1,025,596
105,105
1,130,701
521,827

1,321,411 

1,652,528

69.0 cts 
68.7 cts 

69.0 cts 
68.8 cts 

14.0 cts 
21.0 cts 
- 
35.0 cts 

64.9 cts
64.3 cts

71.5 cts
70.4 cts

9.0 cts
10.0 cts
45.0 cts
64.0 cts

See accompanying notes to financial statements.

Consolidated Profit and Loss Account 

151

 
 
 
                        
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Equity
For the financial year ended 31 December 2008

Attributable to equity holders of the Company

Share 
Capital 
$’000 

Capital 
Reserves 
$’000 

Revenue 
Reserves 
$’000 

Foreign
Exchange 
Translation 
Account 
$’000 

Share
Capital & 
Reserves 
$’000 

Minority 
Interests 
$’000 

Capital
Employed
$’000

790,407 

827,571 

3,644,164 

(57,409)  5,204,733 

1,830,459 

7,035,192

- 

(344,582) 

(56,752) 

(322,712) 

1,827 
- 

- 

- 

- 

- 

- 
- 

- 

- 

(344,582) 

4,553 

(340,029)

- 

- 

(56,752) 

(4,091) 

(60,843)

(322,712) 

(135) 

(322,847)

- 
64,241 

1,827 
64,241 

- 
27,242 

1,827
91,483

(6,475) 

(6,475) 

1,788 

(4,687)

(722,219) 
- 

- 
1,097,971 

57,766 
- 

(664,453) 
1,097,971 

29,357 
223,440 

(635,096)
1,321,411

(722,219)  1,097,971 
(1,097,743) 
- 

- 
20,361 

57,766 
- 
- 

433,518 
(1,097,743) 
20,361 

252,797 
- 
1,590 

686,315
(1,097,743)
21,951

1,632 

(2,394) 

762 

- 

- 
- 

- 
- 
- 

- 

- 
- 

- 
1,143 
- 

- 

- 
- 

- 
- 
- 

- 

- 

- 
- 

- 

-

(103,416) 

(103,416)

199,559 
350 

199,559
350

- 
1,143 
34,164 

(29,008) 
- 
- 

(29,008)
1,143
34,164

- 

- 

- 
- 

- 

- 
- 

- 
- 
- 

- 

- 

- 
- 

- 
- 
34,164 

Group
2008
As at 1 January 

Fair value changes on
  available-for-sale assets 
Fair value gain on
  available-for-sale assets
realised and transferred
to profit & loss account 

Fair value changes on
  cash flow hedges 
Fair value loss on 
  cash flow hedges realised 
  and transferred

to profit & loss account 
Currency translation gain 
Currency translation gain
realised and transferred
to profit & loss account 

Net income/(expense)

recognised directly in equity 

Net profit for the year 
Total income/(expense)

recognised for the year 

Dividend paid 
Share-based payment 
Transfer of statutory, capital 
  and other reserves

to revenue reserves 

Dividend paid to 
  minority shareholders 
Cash subscribed by
  minority shareholders 
Acquisition of subsidiaries 
Acquisition of additional
interest in subsidiaries 

Other adjustments 
Shares issued 

As at 31 December 

824,571 

127,345 

3,643,141 

1,119 

4,596,176 

2,152,331 

6,748,507

See accompanying notes to financial statements.

152

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Attributable to equity holders of the Company

Share 
Capital 
$’000 

Capital 
Reserves 
$’000 

Revenue 
Reserves 
$’000 

Foreign
Exchange 
Translation 
Account 
$’000 

Share
Capital & 
Reserves 
$’000 

Minority 
Interests 
$’000 

Capital
Employed
$’000

972,926 

481,255 

2,752,094 

(58,956)  4,147,319 

1,327,974 

5,475,293

- 

218,270 

(4,926) 

131,412 

(16,784) 
- 

- 

- 

- 

- 

- 
- 

- 

- 

218,270 

4,185 

222,455

- 

- 

(4,926) 

38 

(4,888)

131,412 

(60) 

131,352

- 
(39,806) 

(16,784) 
(39,806) 

(167) 
43 

(16,951)
(39,763)

41,012 

41,012 

20,357 

61,369

327,972 
- 

- 
1,130,701 

1,206 
- 

329,178 
1,130,701 

24,396 
521,827 

353,574
1,652,528

327,972 
- 
21,513 

1,130,701 
(241,754) 
- 

1,206 
- 
- 

1,459,879 
(241,754) 
21,513 

546,223 
- 
1,476 

2,006,102
(241,754)
22,989

(3,562) 

3,221 

341 

- 

- 

- 
- 

- 
393 
- 
- 

- 

- 

- 
- 

- 
(98) 
- 
- 

- 

- 

- 
- 

- 
- 
- 
- 

- 

- 

- 

- 
- 

- 

-

(48,014) 

(48,014)

(25,350) 

(25,350)

25,580 
4,490 

25,580
4,490

- 
295 
38,694 
(221,213) 

(1,650) 
(270) 
- 
- 

(1,650)
25
38,694
(221,213)

- 

- 

- 
- 

- 

- 
- 

- 
- 
- 

- 

- 

- 

- 
- 

- 
- 
38,694 
(221,213) 

Group
2007
As at 1 January 

Fair value changes on
  available-for-sale assets 
Fair value gain on
  available-for-sale assets
realised and transferred
to profit & loss account 

Fair value changes on
  cash flow hedges 
Fair value gain on 
  cash flow hedges realised 
  and transferred 

to profit & loss account 
Currency translation loss 
Currency translation loss
realised and transferred
to profit & loss account 

Net income recognised
  directly in equity 
Net profit for the year 
Total income recognised 

for the year 
Dividend paid 
Share-based payment 
Transfer of statutory, capital 
  and other reserves

to revenue reserves 

Dividend paid to
  minority shareholders 
Return of capital to
  minority shareholders 
Cash subscribed by
  minority shareholders 
Acquisition of subsidiaries 
Acquisition of additional
interest in subsidiaries 

Other adjustments 
Shares issued 
Capital distribution 

As at 31 December 

790,407 

827,571 

3,644,164 

(57,409)  5,204,733 

1,830,459 

7,035,192

See accompanying notes to financial statements.

Statements of Changes in Equity 

153

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Equity

Company
2008
As at 1 January 
Net profit for the year 
Dividend paid 
Share-based payment 
Shares issued 

As at 31 December 

2007
As at 1 January 
Net profit for the year 
Dividend paid 
Share-based payment 
Shares issued 
Capital distribution 

As at 31 December 

Share 
Capital 
$’000 

Capital 
Reserves 
$’000 

Revenue 
Reserves 
$’000 

Total
$’000

790,407 
- 
- 
- 
34,164 

47,456 
- 
- 
22,586 
- 

2,510,512 
837,457 
(1,097,743) 
- 
- 

3,348,375
837,457
(1,097,743)
22,586
34,164

824,571 

70,042 

2,250,226 

3,144,839

972,926 
- 
- 
- 
38,694 
(221,213) 

29,577 
- 
- 
17,879 
- 
- 

2,302,655 
449,611 
(241,754) 
- 
- 
- 

3,305,158
449,611
(241,754)
17,879
38,694
(221,213)

790,407 

47,456 

2,510,512 

3,348,375

See accompanying notes to financial statements.

154

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
Consolidated Cash Flow Statement
For the financial year ended 31 December 2008

Operating activities
Operating profit 
Adjustments:
  Depreciation and amortisation 
  Share-based payment expenses 
  Profit on sale of fixed assets 
  Others 
Operational cash flow before changes in working capital 
Working capital changes:
  Stocks & work-in-progress 
  Debtors 
  Creditors 

Investments in bonds and shares 
  Advances to associated companies 
  Translation of foreign subsidiaries 

Interest received 
Interest paid 
Income taxes paid, net of refunds received 
Net cash from operating activities 

Investing activities
Acquisition of subsidiaries 
Acquisition of additional shares in subsidiaries 
Acquisition and further investment in associated companies 
Acquisition of fixed assets and investment properties 
Expenditure on development properties 
Proceeds from disposal of associated companies 
Proceeds from disposal of fixed assets 
Dividend received from investments and associated companies 
Net cash used in investing activities 

Financing activities
Proceeds from share issues 
Proceeds from minority shareholders of subsidiaries 
Proceeds from term loans 
Capital distribution 
Repayment of term loans 
Dividend paid to shareholders of the Company 
Dividend paid to minority shareholders of subsidiaries 
Net cash used in financing activities 

Net increase/(decrease) in cash and cash equivalents 
Cash and cash equivalents as at 1 January 

Note 

2008 
$’000 

2007
$’000

1,238,474 

1,050,649

A 

139,078 
26,527 
(8,268) 
(93) 
1,395,718 

(73,960) 
(376,344) 
635,517 
39,395 
557,385 
70,121 
2,247,832 
69,219 
(85,687) 
(184,550) 
2,046,814 

(1,400) 
(23,604) 
(127,463) 
(399,598) 
(11,011) 
- 
18,667 
373,246 
(171,163) 

125,692
21,307
(7,126)
(918)
1,189,604

61,750
(86,460)  
827,372
53,488
(247,466)
29,560
1,827,848
79,755
(73,548)
(136,719)
1,697,336

(96,879)
(1,598)
(482,767)
(255,909)
(3,605)
14,277
16,788
263,351
(546,342)

34,164 
199,559 
170,228 
- 
(458,437) 
(1,097,743) 
(103,416) 
(1,255,645) 

38,694
25,580
377,130
(221,213)
(1,099,541)
(241,754)
(48,014)
(1,169,118)

620,006 
1,597,083 

(18,124)
1,615,207

Cash and cash equivalents as at 31 December 

B 

2,217,089 

1,597,083

See accompanying notes to financial statements.

Consolidated Cash Flow Statement 

155

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Cash Flow Statement

Notes to Consolidated Cash Flow Statement

A. 

Acquisition of Subsidiaries
During the financial year, the fair values of net assets of subsidiaries acquired were as follows:

Investments 
Stocks & work-in-progress 
Debtors 
Bank balances and cash 
Creditors 
Current and deferred tax 
Minority interests 

Amount previously accounted for as associated companies 
Purchase consideration 
Less: Bank balances and cash acquired 

2008 
$’000 

2007
$’000

- 
1,750 

- 3
- 
- 
- 
(350) 
1,400 
- 
1,400 
- 

8,286
97,059

941
(23)
(22)
(4,490)
101,754
(3,934)
97,820
(941)

Cash flow on acquisition net of cash acquired 

1,400 

96,879

The carrying amounts of net assets of subsidiaries acquired in the acquirees’ books at the point of acquisition approximate 
their fair values.

B. 

Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and balances with banks. Cash and cash equivalents in the 
consolidated cash flow statement comprise the following balance sheet amounts:

Bank balances, deposits and cash (Note 17) 
Bank overdrafts (Note 21) 

2,244,851 
(27,762) 

1,600,850
(3,767)

2,217,089 

1,597,083

See accompanying notes to financial statements.

156

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements
For the financial year ended 31 December 2008

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. 

General
The Company is incorporated and domiciled in Singapore and is listed on the Singapore Exchange Securities Trading 
Limited.  The address of its principal place of business and registered office is 1 HarbourFront Avenue #18-01, 
Keppel Bay Tower, Singapore 098632.

The Company’s principal activity is that of an investment holding and management company.

The principal activities of the companies in the Group consist of:

-  offshore oil-rig construction, shipbuilding & shiprepair and conversion;
-  property development & investment and property fund management;
-  environmental engineering, power generation and network & logistics; and
- 

investments.

There has been no significant change in the nature of these principal activities during the financial year.

The financial statements of the Group for the financial year ended 31 December 2008 and the balance sheet and 
statement of changes in equity of the Company at 31 December 2008 were authorised for issue in accordance with a 
resolution of the Board of Directors on 2 March 2009.

2. 

(a) 

Significant acounting policies

Basis of Preparation
The financial statements have been prepared in accordance with the provisions of the Singapore Companies Act and 
Singapore Financial Reporting Standards (“FRS”).  The financial statements have been prepared under the historical cost 
convention, except as disclosed in the accounting policies below.

Adoption of New and Revised Standards
In the current year, the Group adopted the new/revised FRS and Interpretations of FRS (“INT FRS”) that are effective for 
annual periods beginning on or after 1 January 2008.  Changes to the Group’s accounting policies have been made as 
required, in accordance with the transitional provisions in the respective FRS and INT FRS.

The following are the new or amended FRS and INT FRS that are relevant to the Group:

INT FRS 111 

Group and Treasury Share Transactions

The adoption of the above INT FRS did not result in any substantial change to the Group’s accounting policies nor any 
significant impact on these financial statements.

(b) 

Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries as at the 
balance sheet date.

The results of subsidiaries acquired or disposed of during the financial year are included or excluded from the 
consolidated financial statements from their respective dates of acquisition or disposal.  All intercompany transactions, 
balances and unrealised gains on transactions between group companies are eliminated.  Unrealised losses are also 
eliminated unless the transaction provides evidence of an impairment of the asset transferred.  Where necessary, 
adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those 
of the Group.

Notes to the Financial Statements 

157

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

2. 

Significant acounting policies (continued)

Acquisition of subsidiaries is accounted for using the purchase method.  The cost of an acquisition is measured at the 
aggregate of the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date 
of exchange, plus costs directly attributable to the acquisition.  Identifiable assets acquired and liabilities and contingent 
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective 
of the extent of any minority interest.  Costs directly attributable to an acquisition are included as part of the cost of 
acquisition.

Any excess of the cost of business combination over the Group’s interest in the net fair value of the identifiable assets, 
liabilities and contingent liabilities represents goodwill.  Any excess of the Group’s interest in the net fair value of the 
identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised in the profit and 
loss account on the date of acquisition.

(c) 

Fixed Assets
Fixed assets are stated at cost less accumulated depreciation and any impairment in value.  When the carrying amount of 
an asset is greater than its estimated recoverable amount, it is written down to its recoverable amount.  Profits or losses 
on disposal of fixed assets are included in the profit and loss account.

Depreciation of fixed assets is calculated on a straight-line basis to write off the cost of the fixed assets over their 
estimated useful lives.  No depreciation is provided on freehold land and capital work-in-progress.  The estimated useful 
lives of other fixed assets are as follows:

Freehold buildings 
Leasehold land & buildings 
Vessels & floating docks 
Plant, machinery & equipment 

30 to 50 years
Over period of lease (ranging from 2 to 65 years)
10 to 20 years
1 to 30 years

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any 
changes in estimate accounted for on a prospective basis.

(d) 

Investment Properties
Investment properties are initially recognised at cost and subsequently measured at fair value, determined annually by 
independent professional valuers.  Changes in fair value are recognised in the profit and loss account.

On disposal of an investment property, the difference between the disposal proceeds and the carrying amount is 
recognised in the profit and loss account.

(e) 

Development Properties
Development properties are stated at cost less impairment losses.

Cost includes cost of land and construction, related overhead expenditure and financing charges and other net costs 
incurred during the period of development.  They are considered completed and are transferred to investment properties 
or fixed assets when they are ready for their intended use.

Each property under development is accounted for as a separate project.  Where a project comprises more than one 
component or phase with a separate temporary occupation permit, each component or phase is treated as a separate 
project, and interest and other net costs are apportioned accordingly.

158

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(f) 

Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain 
benefits from its activities.  The existence and effect of potential voting rights that are currently exercisable or convertible 
are considered when assessing whether the Group controls another entity.

Investments in subsidiaries are stated in the Company’s financial statements at cost less any impairment losses. On 
disposal of a subsidiary, the difference between net disposal proceeds and the carrying amount of the investment is taken 
to profit and loss account.

(g) 

Associated Companies
An associated company is an entity, not being a subsidiary, over which the Group has significant influence, but not 
control, in the operating and financial policy decisions.

Investments in associated companies are stated in the Company’s financial statements at cost less any impairment 
losses.  On disposal of an associated company, the difference between net disposal proceeds and the carrying amount of 
the investment is taken to profit and loss account.

Investments in associated companies are accounted for in the consolidated financial statements using the equity method 
of accounting whereby the Group’s share of profit or loss of the associated company is included in the profit and loss 
account and the Group’s share of net assets of the associated company is included in the balance sheet.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities 
and contingent liabilities of the associated company recognised at the date of acquisition is recognised as goodwill.  
The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the 
investment.  Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent 
liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.

(h) 

Intangibles
Goodwill
Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of the business combination over 
the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.  Goodwill is initially 
recognised as an asset at cost and is subsequently measured at cost less any impairment losses.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to 
benefit from the synergies of the combination.  Cash-generating units to which goodwill has been allocated are tested for 
impairment annually, or more frequently when there is an indication that the unit may be impaired.  An impairment loss 
is recognised in the profit and loss account when the carrying amount of the cash-generating unit, including goodwill, 
exceeds the recoverable amount of the cash-generating unit.  The impairment loss is allocated first to reduce the carrying 
amount of goodwill allocated to the cash-generating units and then, to reduce the carrying amount of the other assets in 
the unit on a pro-rata basis.  An impairment loss recognised for goodwill is not reversed in a subsequent period.

Other Intangible Assets
Intangible assets include development expenditure.  Costs incurred which are expected to generate future economic 
benefits are recognised as intangibles and amortised on a straight line basis over their useful lives, ranging from 5 to 15 
years.

Notes to the Financial Statements 

159

 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

2. 

(i) 

Significant acounting policies (continued)

Investments
Investments are classified as held for trading or available-for-sale.  Investments acquired for the purpose of selling in the 
short term are classified as held for trading.  Other investments held by the Group are classified as available-for-sale.

Investments are recognised and derecognised on the trade date where the purchase or sale of an investment is under a 
contract whose terms required delivery of investment within the timeframe established by the market concerned.

Investments are initially measured at fair value plus transaction costs except for investments held for trading, which are 
recognised at fair value.

For investments held for trading, gains and losses arising from changes in fair value are included in the profit and loss 
account.

For available-for-sale investments, gains and losses arising from changes in fair value are recognised directly in equity, 
until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously 
recognised in equity is included in the profit and loss account.

The fair value of quoted investments is based on current bid prices.  For investments where there is no active market, 
the fair value is determined using valuation techniques.  Such techniques include using recent arm’s length transactions, 
reference to the underlying net asset value of the investee companies and discounted cash flow analysis.

The Group assesses at each balance sheet date whether there is objective evidence that an investment is impaired.  In 
the case of investment classified as available-for-sale, a significant or prolonged decline in the fair value of the investment 
below its cost is considered in determining whether the investment is impaired.  If any such evidence exists for available-
for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair 
value, less any impairment loss on that financial asset previously recognised in profit or loss - is removed from equity and 
recognised in the profit and loss account.  Impairment losses recognised in the profit and loss account are not reversed 
through the profit and loss account until the investment is disposed of.

(j) 

Derivative Financial Instruments and Hedge Accounting
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and 
are subsequently re-measured at fair value.  Derivative financial instruments are carried as assets when the fair value is 
positive and as liabilities when the fair value is negative.

Gains or losses arising from changes in fair value of derivative financial instruments that do not qualify for hedge 
accounting are taken to the profit and loss account.

For cash flow hedges, the effective portion of the gains or losses on the hedging instrument is recognised directly in the 
hedging reserve, while the ineffective portion is recognised in the profit and loss account.  Amounts taken to hedging 
reserve are transferred to the profit and loss account when the hedged transaction affects profit or loss.

The fair value of forward foreign currency contracts is determined using forward exchange market rates at the balance 
sheet date.  The fair value of High Sulphur Fuel Oil (“HSFO”) forward contracts is determined using forward HSFO prices 
provided by the Group’s key counterparty.  The fair value of interest rate caps and interest rate swaps are based on 
valuations provided by the Group’s bankers.

160

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
(k) 

Impairment of Assets
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine 
whether there is any indication that these assets may be impaired.  If any such indication exists, the recoverable amount 
(i.e. the higher of fair value less cost to sell and value in use) of the asset is estimated to determine the amount of 
impairment loss.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis 
unless the asset does not generate cash flows that are largely independent of those from other assets.  If this is the case, 
recoverable amount is determined for cash-generating unit to which the asset belongs.

If the recoverable amount of the asset is estimated to be less than its carrying amount, the carrying amount of an asset is 
reduced to its recoverable amount.  The impairment loss is recognised in the profit and loss account.

An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the 
asset’s recoverable amount since the last impairment loss was recognised.  The carrying amount of the asset is increased 
to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been 
determined had no impairment loss been recognised for the asset in prior years.  A reversal of impairment loss for an 
asset is recognised in the profit and loss account.

(l) 

Stocks & Work-in-Progress
Stocks, consumable materials and supplies are stated at the lower of cost and net realisable value, cost being principally 
determined on the weighted average method.

Work-in-progress is stated at the lower of cost (comprising direct labour, material costs, direct expenses and an 
appropriate allocation of production overheads) and net realisable value, which is arrived at after providing for anticipated 
losses, if any, when the possibility of loss is ascertained.

Completed properties held for sale are stated at the lower of cost and net realisable value.  Cost includes cost of land and 
construction, related overhead expenditure and interest incurred during the period of construction.

Properties held for sale under development are stated at the lower of cost or net realisable value.  Upon receipt of 
temporary occupation permits, these are transferred to completed properties held for sale.

Progress claims made against work-in-progress are offset against the cost of work-in-progress and the profits recognised 
on partly completed long-term contracts less any provision required to reduce cost to estimated realisable value.

(m) 

(n) 

Financial Assets
Financial assets include cash and bank balances, trade, intercompany and other receivables and investments.  Trade, 
intercompany and other receivables are stated at their fair values as reduced by appropriate allowances for estimated 
irrecoverable amounts.

Financial Liabilities and Equity Instruments
Financial liabilities include trade, intercompany and other payables, bank loans and overdrafts.  Trade, intercompany and 
other payables are stated at their fair values.  Interest-bearing bank loans and overdrafts are initially measured at fair value 
and are subsequently measured at amortised cost.  Any difference between the proceeds (net of transaction costs) and 
the redemption value is taken to the profit and loss account over the period of the borrowings using the effective interest 
method.

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its 
liabilities.  Equity instruments are recorded at the proceeds received, net of direct issue costs.

Notes to the Financial Statements 

161

 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

2. 

(o) 

Significant acounting policies (continued)

Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is 
probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be 
made.

Provision for warranties is set up upon completion of a contract to cover the estimated liability which may arise during the 
warranty period.  This provision is based on service history.  Any surplus of provision will be written back at the end of the 
warranty period while additional provisions where necessary are made when known.  These liabilities are expected to be 
incurred over the applicable warranty periods.

Provision for claims is made for the estimated cost of all claims notified but not settled at the balance sheet date, less 
recoveries, using the information available at the time.  Provision is also made for claims incurred but not reported at the 
balance sheet date based on historical claims experience, modified for variations in expected future settlement.  The 
utilisation of provisions is dependent on the timing of claims.

(p) 

Leases
When a group company is the lessee
Finance leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of 
ownership to the lessee.  Assets held under finance leases are recognised as assets of the Group at their fair values at the 
inception of the lease or, if lower, at the present value of the minimum lease payments.  The corresponding liability to the 
lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a 
constant rate of interest on the remaining balance of the liability.  Finance charges are charged directly to the profit and 
loss account.  Contingent rentals are recognised as expenses in the periods in which they are incurred.

Operating leases
Leases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor are 
classified as operating leases.  Payments made under operating leases (net of any incentive received from lessor) are 
taken to the profit and loss account on a straight-line basis over the period of the lease.  When an operating lease is 
terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is 
recognised as an expense in the period in which termination takes place.

When a group company is the lessor
Finance leases
Amounts due from lessees under finance leases are recorded as receivables at the amount of the Group’s net investment 
in the leases.  Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return 
on the Group’s net investment outstanding in respect of the leases.

Operating leases
Assets leased out under operating leases are included in investment properties and are stated at fair values.  Rental 
income (net of any incentive given to lessee) is recognised on a straight-line basis over the lease term.

162

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(q) 

Revenue
Revenue consists of:
-  Revenue recognised on contracts, under the percentage of completion method when the outcome of the contract can

be estimated reliably;
Invoiced value of goods and services;

- 
-  Rental income from investment properties; and
Investment income, interest and fee income.
- 

(r) 

Revenue and Income Recognition
Revenue from rigbuildings, shipbuildings and repairs is recognised based on the percentage of completion method in 
proportion to the stage of completion, provided that the work is at least 20% complete and the outcome of such work 
can be reliably estimated.  The percentage of completion is measured by reference to the percentage of the physical 
proportion of the contract work completed as determined by engineers’ estimates.  Provision is made where applicable 
for anticipated losses on contracts in progress.

Income recognition on long term engineering contracts is based on the percentage of completion method in proportion to 
the stage of completion, provided that the work is at least 20% complete and the outcome of such work can be reliably 
estimated.  The percentage of completion is measured by reference to the percentage of the physical proportion of the 
contract work completed as determined by engineers’ estimates.  Provision is made where applicable for anticipated 
losses on contracts in progress.

Income recognition on partly completed properties held for sale is based on the percentage of completion method as 
follows:

-  For Singapore trading properties under development, the profit recognition upon the signing of sales contracts is 20% 
of the total estimated profit attributable to the actual contracts signed.  Subsequent recognition of profit is based on 
the stage of physical completion;

-  For overseas trading properties under development, the profit recognition upon the signing of sales contracts is the 

direct proportion of total expected project profit attributable to the actual sales contract signed, but only to the extent 
that it relates to the stage of physical completion; and

- 

In respect of large residential property projects, income recognition is applied by phases.

When losses are expected, full provision is made in the accounts after adequate allowance has been made for estimated 
costs to completion.  Any expenditure incurred on abortive projects is written off in the profit and loss account.

Revenue from the sale of products is recognised upon shipment to customers and collectibility of the related receivables 
is reasonably assured.  Sales are stated net of goods and services tax and sales returns.

Revenue from the rendering of services including electricity supply and logistic services is recognised over the period 
in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the 
actual services provided as a proportion of the total services to be performed.

Rental income from operating leases on investment properties are recognised on a straight-line basis over the lease term.

Dividend income from investments is recognised when the right to receive payment is established, and in the case of fixed 
interest bearing investments, on a time proportion basis using the effective interest method.

Interest income is recognised on a time proportion basis using the effective interest method.

Notes to the Financial Statements 

163

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

2. 

(s) 

(t) 

Significant acounting policies (continued)

Borrowing Costs
Borrowing costs incurred to finance the development of properties are capitalised during the period of time that is 
required to complete and prepare the asset for its intended use.  Other borrowing costs are taken to the profit and loss 
account over the period of borrowing using the effective interest rate method.

Employee Benefits
Defined Contribution Plan
The Group makes contributions to pension schemes as defined by the laws of the countries in which it has operations.  
In particular, the Singapore companies make contributions to the Central Provident Fund in Singapore, a defined 
contribution pension scheme.  Contributions to pension schemes are recognised as an expense in the period in which the 
related service is performed.

Employee Leave Entitlement
Employee entitlements to annual leave are recognised when they accrue to employees.  A provision is made for the 
estimated liability for leave as a result of services rendered by employees up to the balance sheet date.

Share Option Scheme
The Group operates an equity-settled, share-based compensation plan.  The fair value of the employee services received 
in exchange for the grant of the options is recognised as an expense in the profit and loss account with a corresponding 
increase in the share option reserve over the vesting period.  The total amount to be recognised over the vesting period is 
determined by reference to the fair value of the options granted on the date of grant.

(u) 

Income Taxes
Current income tax liabilities (and assets) for current and prior periods are recognised at the amounts expected to be 
paid to (or recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively 
enacted by the balance sheet date.

Deferred income tax assets/liabilities are recognised for deductible/taxable temporary differences arising between the tax 
bases of assets and liabilities and their carrying amounts.  The principal temporary differences arise from depreciation, 
valuation of investment properties, unremitted offshore income and future tax benefits from certain provisions not allowed 
for tax purposes until a later period.  Deferred tax assets are recognised to the extent that it is probable that future taxable 
profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no 
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.  Deferred 
tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax 
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its 
current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expense or income in the profit and loss account, except when they 
relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity, or where 
they arise from the initial accounting for a business combination.  In the case of a business combination, the tax effect is 
taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value of the 
acquiree’s identifiable assets, liabilities and contingent liabilities over cost.

164

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
(v) 

Foreign Currencies
Functional Currency
Items included in the financial statements of each entity in the Group are measured using the currency that best reflects 
the economic substance of the underlying events and circumstances relevant to that entity (“functional currency”).

The financial statements of the Group and the balance sheet and statement of changes in equity of the Company are 
presented in Singapore Dollars, which is the functional currency of the Company.

Foreign Currency Transactions
Transactions in foreign currencies are translated at exchange rates approximating those ruling at the transaction dates.  
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at exchange 
rates approximating those ruling at that date. Exchange differences arising from translation of monetary assets and 
liabilities are taken to the profit and loss account. Exchange differences on non-monetary items such as investments 
held for trading are reported as part of the fair value gain or loss.  Exchange differences on non-monetary items such as 
available-for-sale investments are included in the fair value reserve.

Foreign Currency Translation
For inclusion in the Group’s financial statements, the assets and liabilities of foreign subsidiaries and associated 
companies that are in functional currencies other than Singapore Dollars are translated into Singapore Dollars at the 
exchange rates ruling at the balance sheet date.  The trading results of foreign subsidiaries and associated companies 
are translated into Singapore Dollars using the average exchange rates for the financial year.  Exchange differences due 
to such currency translation are classified as reserves and taken directly to the foreign exchange translation account.  
Goodwill and fair value adjustments arising on acquisition of a foreign entity are treated as non-monetary foreign currency 
assets and liabilities of the acquirer and recorded at the closing exchange rate.

(w)  Critical Accounting Estimates and Judgements

(i) 

(ii) 

Critical judgements in applying the Group’s accounting policies
In the process of applying the Group’s accounting policies, the management is of the opinion that there is no 
instance of application of judgements which is expected to have a significant effect on the amounts recognised in 
the financial statements, apart from those involving estimations described below.

Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet 
date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities 
within the next financial year, are as follows:

Impairment of fixed assets
Determining whether fixed asset value is impaired requires an estimation of the value in use of the cash-generating 
units.  This requires the Group to estimate the future cash flows expected from the cash-generating units and an 
appropriate discount rate in order to calculate the present value of the future cash flows.  The carrying amount of 
fixed assets at the balance sheet date is disclosed in Note 5.

Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to 
which the goodwill is allocated.  This requires the Group to estimate the future cash flows expected from the cash-
generating units and an appropriate discount rate in order to calculate the present value of the future cash flows.  
The carrying amount of goodwill at the balance sheet date is disclosed in Note 12.

Notes to the Financial Statements 

165

 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

2. 

Significant acounting policies (continued)

Impairment of available-for-sale investments
The Group follows the guidance of FRS 39 in determining whether available-for-sale investments are considered 
impaired.  The Group evaluates, among other factors, the duration and extent to which the fair value of an 
investment is less than its cost, the financial health of and the near-term business outlook of the investee, including 
factors such as industry and sector performance, changes in technology and operational and financing cash flow.  
The fair values of available-for-sale investments is disclosed in Notes 10 and 16.

Revenue recognition
The Group recognises contract revenue based on the stage of completion method.  The stage of completion 
is measured in accordance with the accounting policy stated in Note 2(r).  Significant assumption is required in 
determining the stage of completion, the extent of the contract cost incurred, the estimated total contract revenue 
and contract cost and the recoverability of the contracts.  In making the assumption, the Group evaluates by 
relying on past experience and the work of engineers.  Revenue from construction contracts is disclosed in 
Note 23.

Revenue arising from additional claims and variation orders, whether billed or unbilled, is recognised when 
negotiations have reached an advanced stage such that it is probable that the customer will accept the claims 
or approve the variation orders, and the amount that it is probable will be accepted by the customer can be 
measured reliably.

Income taxes
The Group has exposure to income taxes in numerous jurisdictions.  Significant assumption is required in 
determining the provision for income taxes.  There are certain transactions and computations for which the 
ultimate tax determination is uncertain during the ordinary course of business.  The Group recognises liabilities for 
expected tax issues based on estimates of whether additional taxes will be due.  Where the final tax outcome of 
these matters is different from the amounts that were initially recognised, such differences will impact the income 
tax and deferred tax provisions in the period in which such determination is made.  The carrying amount of 
taxation and deferred taxation is disclosed in the balance sheet.

Claims, litigations and reviews
The Group entered into various contracts with third parties in its ordinary course of business and is exposed to the 
risk of claims, litigations or review from the contractual parties and/or government agencies.  These can arise for 
various reasons, including change in scope of work, delay and disputes, defective specifications or routine checks 
etc.  The scope, enforceability and validity of any claim, litigation or review may be highly uncertain.  In making its 
judgement as to whether it is probable that any such claim, litigation or review will result in a liability and whether 
any such liability can be measured reliably, management relies on past experience and the opinion of legal and 
technical expertise.

166

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
3. 

Share capital

Ordinary Shares (“Shares”)
Issued and paid up:

Balance 1 January
  1,585,086,180 Shares (2007: 787,992,924 Shares) 
Sub-division of 1 Share into 2 Shares in 2007 

(2007: 789,942,257 Shares) 

Issued during the financial year 8,048,000 Shares

(2007: 1,949,333 Shares before sub-division of Shares 

  and 5,201,666 Shares after sub-division of Shares) 
Capital distribution 
Balance 31 December
  1,593,134,180 Shares (2007: 1,585,086,180 Shares) 

Group and Company

2008 
$’000 

2007
$’000

790,407 

972,926

- -

34,164 
- 

38,694
(221,213)

824,571 

790,407

During the financial year, the Company issued 8,048,000 Shares for cash upon exercise of options under the KCL Share 
Option Scheme.  This comprised 2,000 Shares at $0.62 per Share, 1,190,000 Shares at $1.30 per Share, 655,000 
Shares at $1.32 per Share, 670,000 Shares at $2.24 per Share, 530,000 Shares at $3.01 per Share, 780,000 Shares at 
$3.24 per Share, 739,000 Shares at $4.42 per Share, 903,000 Shares at $6.24 per Share, 2,007,000 Shares at $6.39 per 
Share, 558,000 Shares at $7.66 per Share and 14,000 Shares at $9.13 per Share.

In 2007, the Company effected a sub-division of Shares whereby each Share was sub-divided into two Shares with effect 
from 7 May 2007.

KCL Share Option Scheme
The KCL Share Option Scheme (“Scheme”), which has been approved by the shareholders of the Company, is 
administered by the Remuneration Committee whose members are:

Sven Bang Ullring (Chairman)
Tsao Yuan Mrs Lee Soo Ann
Oon Kum Loon (Mrs)
Tow Heng Tan

Under the Scheme, an option may, except in certain special circumstances, be exercised at any time after two years but 
no later than the expiry date.  The two-year vesting period is intended to encourage employees to take a longer-term view 
of the Company.

The Shares under option may be exercised in full or in respect of 100 Shares or a multiple thereof, on the payment of the 
subscription price.  The subscription price is based on the average last done prices for the Shares of the Company on the 
Singapore Exchange Securities Trading Limited for the three market days preceding the date of offer.  The Remuneration 
Committee may at its discretion fix the subscription price at a discount not exceeding 20 percent to the above price.  
None of the options offered in the financial year was granted at a discount.

Notes to the Financial Statements 

167

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

3. 

Share capital (continued)

To promote transparency, the Board of Directors had in 2002 resolved that the date of offer of share options under the 
Scheme shall be a pre-determined date; that is, the date falling 14 days immediately after the date of announcement of 
the Company’s half-year or full-year results, as the case may be.  The number of Shares available under the Scheme shall 
not exceed 15% of the issued share capital of the Company.

The employees to whom the options have been granted do not have the right to participate by virtue of the options in a 
share issue of any other company.  Certain employees who have been transferred from subsidiaries to the Company and 
to whom options have been granted may also hold options granted by subsidiaries prior to their transfer to the Company, 
while certain employees who have been granted options by the Company and were subsequently transferred from the 
Company to subsidiaries may be entitled to options under the subsidiaries’ share option schemes.

Movements in the number of share options and their weighted average exercise prices are as follows:

Balance at 1 January 
Granted 
Exercised 
Cancelled 
Balance before sub-division 
Adjustment 
Granted 
Exercised 
Cancelled 
Balance at 31 December 

2008 

2007

Number of 
options 

37,768,000 
- 
- 
- 
37,768,000 
- 
16,715,000 
(8,048,000) 
(944,000) 
45,491,000 

Weighted 
average 
exercise 
price 

$7.80 
- 
- 
- 
$7.80 
- 
$10.12 
$4.24 
$9.93 
$9.23 

Number of 
options 

16,232,166 
3,496,500 
(1,949,333) 
(29,000) 
17,750,333 
17,750,333 
7,883,000 
(5,201,666) 
(414,000) 
37,768,000 

Weighted
average
exercise
price

$10.78
$18.55
$7.07
$18.55
$12.71
-
$12.95
$4.79
$7.71
$7.80

Exercisable at 31 December 

14,829,000 

$6.39 

10,765,000 

$4.02

The weighted average share price at the date of exercise for options exercised during the financial year was $10.78 
(2007: $18.09 from 1 January 2007 to 7 May 2007 before adjustment for sub-division of Shares and $12.83 thereafter to 
31 December 2007).  The options outstanding at the end of the financial year had a weighted average exercise price of 
$9.23 (2007: $7.80) and a weighted average remaining contractual life of 8.3 years (2007: 8.3 years).

168

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On 14 February 2008 and 14 August 2008, the Company granted 7,903,000 options and 8,812,000 options respectively 
under the KCL Share Option Scheme.  The estimated fair values of the options granted on those dates are $1.38 per 
share (13 February 2007: $2.94 per share) and $1.54 per share (10 August 2007: $1.84 per share) respectively.  These 
fair values are determined using The Black-Scholes pricing model.  The significant inputs into the model are as follows:

Date of grant 
Prevailing share price at grant 
Exercise price 
Expected volatility 
Expected life 
Risk free rate 
Expected dividend yield 

2008 

2007

14.2.2008 
$9.96 
$9.96 
27.59% 
3.5 years 
1.23% 
4.39% 

14.8.2008 
$10.26 
$10.26 
29.33% 
3.5 years 
1.81% 
4.78% 

13.2.2007 
^$18.55 
^$18.55 
24.30% 
3.5 years 
2.32% 
2.72% 

10.8.2007
$12.95
$12.95
24.35%
3.5 years
2.45%
3.73%

^  Before adjustment for capital distribution and sub-division of Shares in 2007

The expected volatility is determined by calculating the historical volatility of the Company’s share price over the previous 
3.5 years (2007: 3.5 years).  The expected lives used in the model has been adjusted, based on management’s best 
estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Details of share options granted by Keppel Land Limited and Keppel Telecommunications & Transportation Ltd, 
subsidiaries of the Company are disclosed in the annual reports of the respective publicly-listed subsidiaries.

4. 

Reserves

Capital Reserves
  Share option reserve 
  Fair value reserve 
  Hedging reserve 
  Bonus issue by subsidiaries 
  Others 

Revenue Reserves 

Foreign Exchange
  Translation Account 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

80,240 
36,673 
(65,580) 
40,000 
36,012 
127,345 

59,879 
438,308 
255,305 
40,000 
34,079 
827,571 

70,042 
- -
- -
- -
- -
70,042 

47,456

47,456

3,643,141 

3,644,164 

2,250,226 

2,510,512

1,119 

(57,409) 

- -

3,771,605 

4,414,326 

2,320,268 

2,557,968

Movements in reserves are set out in the Statements of Changes in Equity.

Notes to the Financial Statements 

169

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

5. 

Fixed assets

Freehold 
Land & 
Buildings 
$’000 

Leasehold 
Land & 
Buildings 
$’000 

Vessels & 
Floating Docks 
$’000 

Plant, 
Machinery 

Capital
& Equipment  Work-in-Progress 
$’000 

$’000 

Total
$’000

Group
2008
Cost
At 1 January 
Additions 
Disposals 
Reclassification
  -  Investment properties 
  -  Development properties 
  -  Other fixed assets

  categories 

Exchange differences 

54,228 
4,190 
(2,425) 

1,158,464 
5,460 
(2,595) 

209,730 
8,952 
(19,242) 

1,598,671 
71,025 
(19,291) 

103,230 
229,463 
- 

3,124,323
319,090
(43,553)

- 
- 

(2,291) 
(1,803) 

(867) 
15,251 

64,605 
3,466 

- 
- 

(5,955) 
98 

- 
- 

27,766 
(3,568) 

88,801 
(2,028) 

(178,881) 
(991) 

(6,822)
15,349

-
(4,924)

At 31 December 

51,899 

1,243,784 

223,638 

1,731,321 

152,821 

3,403,463

Accumulated Depreciation &
Impairment Losses
At 1 January 
Depreciation charge 
Impairment loss (Note 27) 
Disposals 
Reclassification
  -  Other fixed assets

  categories 

Exchange differences 

21,781 
2,507 
- 
(1,433) 

453,732 
36,135 
- 
(1,038) 

100,564 
14,918 
- 
(11,654) 

850,015 
85,139 
1,036 
(19,054) 

(3,014) 
(423) 

(51) 
1,642 

(1,028) 
(1,286) 

4,093 
(1,689) 

At 31 December 

19,418 

490,420 

101,514 

919,540 

- 
- 
- 
- 

- 
- 

- 

1,426,092
138,699
1,036
(33,179)

-
(1,756)

1,530,892

Net Book Value 

32,481 

753,364 

122,124 

811,781 

152,821 

1,872,571

During the financial year, the Group recognised impairment losses of $1,036,000 which relates to write-down of non-
performing assets in the Infrastructure division.  These non-performing assets were fully written down.

Certain plant, machinery and equipment of subsidiaries are mortgaged to banks for loan facilities (Note 20).

170

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Freehold 
Land & 
Buildings 
$’000 

Leasehold 
Land & 
Buildings 
$’000 

Vessels & 
Floating Docks 
$’000 

Plant, 
Machinery 

Capital
& Equipment  Work-in-Progress 
$’000 

$’000 

Total
$’000

Group
2007
Cost
At 1 January 
Additions 
Disposals 
Write-off 
Reclassification 
  -  Stocks 
  -  Investment properties 
  -  Other fixed assets

  categories 

Exchange differences 

75,837 
1,953 
(1,806) 
- 

(23,262) 
- 

301 
1,205 

1,148,340 
18,696 
(5,766) 
- 

221,810 
5,078 
(17,646) 
- 

1,079,242 
109,238 
(24,245) 
(560) 

482,814 
111,507 
(612) 
- 

3,008,043
246,472
(50,075)
(560)

- 
(27,813) 

37,140 
(12,133) 

- 
- 

- 
(2,704) 

(4,693) 
- 

- 
488 

448,783 
(11,083) 

(486,224) 
438 

(27,955)
(30,517)

-
(21,085)

At 31 December 

54,228 

1,158,464 

209,730 

1,598,671 

103,230 

3,124,323

Accumulated Depreciation &
Impairment Losses
At 1 January 
Depreciation charge 
Impairment loss (Note 27) 
Disposals 
Write-off 
Reclassification
  -  Stocks 
  -  Investment properties 
  -  Other fixed assets

  categories 

Exchange differences 

18,564 
3,204 
1,598 
(318) 
- 

(2,122) 
- 

1,109 
(254) 

405,874 
33,514 
31,952 
(1,413) 
- 

- 
(10,099) 

102,358 
15,607 
- 
(15,574) 
- 

739,827 
73,058 
74,407 
(22,396) 
(517) 

- 
- 

- 
(2,578) 

21 
(6,117) 

- 
(1,827) 

(1,130) 
(10,656) 

At 31 December 

21,781 

453,732 

100,564 

850,015 

612 
- 
- 
(612) 
- 

1,267,235
125,383
107,957
(40,313)
(517)

- 
- 

- 
- 

- 

(2,122)
(12,677)

-
(18,854)

1,426,092

Net Book Value 

32,447 

704,732 

109,166 

748,656 

103,230 

1,698,231

In 2007, the Group recognised impairment losses of $107,957,000 of which $32,000,000 related to write-down of two 
hotels in Myanmar in the Property division and $75,957,000 related to write-down of power barges and other non-
performing assets in the Infrastructure division.

The carrying amounts of the two hotels in Myanmar were reduced to their recoverable amounts determined by 
discounting the estimated future cash flow from operations to present value at 14%.  The carrying amounts of the power 
barges were reduced to their recoverable amounts determined by discounting the estimated future cash flow from 
operations to present value at 15%.  The other non-performing assets were fully written down.

Certain plant, machinery and equipment of subsidiaries are mortgaged to banks for loan facilities (Note 20).

Notes to the Financial Statements 

171

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

5. 

Fixed assets (continued)

Company
2008
Cost
At 1 January 
Additions 
Disposals 

At 31 December 

Accumulated Depreciation
At 1 January 
Depreciation charge 
Disposals 

At 31 December 

Net Book Value 

2007
Cost
At 1 January 
Additions 
Disposals 

At 31 December 

Accumulated Depreciation
At 1 January 
Depreciation charge 
Disposals 

At 31 December 

Net Book Value 

6. 

Investment properties

At 1 January 
Buildings improvement and development 
Fair value gain (Note 27) 
Disposals 
Write-off 
Reclassification 
  -  Fixed assets 
  -  Stocks 
Exchange differences 

At 31 December 

172

Keppel Corporation Limited 
Report to Shareholders 2008

Freehold 
Land & 
Buildings 
$’000 

Leasehold 
Land & 
Buildings 
$’000 

Plant, 
Machinery
& Equipment 
$’000 

Total
$’000

6,542 
- 
- 

6,542 

1,671 
40 
- 

1,711 

4,831 

6,545 
- 
(3) 

6,542 

1,631 
40 
- 

1,671 

4,871 

484 
- 
- 

484 

72 
10 
- 

82 

6,346 
682 
(76) 

13,372
682
(76)

6,952 

13,978

5,961 
407 
(73) 

7,704
457
(73)

6,295 

8,088

402 

657 

5,890

484 
- 
- 

484 

62 
10 
- 

72 

6,048 
376 
(78) 

13,077
376
(81)

6,346 

13,372

5,704 
335 
(78) 

7,397
385
(78)

5,961 

7,704

412 

385 

5,668

Group

2008 
$’000 

2007
$’000

2,960,347 
80,508 
4,471 
- 
(380) -

2,249,216
19,476
691,444
(501)

6,822 
(11,435) -
(10,658) 

17,840

(17,128)

3,029,675 

2,960,347

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Group’s investment properties (including integral plant and machinery) are stated at Directors’ valuations based on 
the following valuations (open market value basis) by independent firms of professional valuers as at 31 December 2008:

-  Colliers International Consultancy & Valuation (Singapore) Pte Ltd for properties in Singapore;
-  CB Richard Ellis (Vietnam) Co. Ltd for properties in Vietnam; and
-  PT. Willson Properti Advisindo and PT. Piesta Penilai for properties in Indonesia.

Interest capitalised during the financial year amounted to $1,219,000 (2007: $1,158,000).

Certain investment properties of subsidiaries are mortgaged to banks for loan facilities (Note 20).

7. 

Development properties

Land cost 
Development cost incurred to-date 

8. 

Subsidiaries

Quoted shares, at cost
  Market value: $997,210,000 (2007: $5,336,248,000) 
Unquoted shares, at cost 

Provision for impairment 

Advances from subsidiaries 

Movements in the provision for impairment of subsidiaries are as follows:

At 1 January 
Charge to profit and loss account 

At 31 December 

Group

2008 
$’000 

2007
$’000

108,373 
67,137 

103,020
69,738

175,510 

172,758

Company

2008 
$’000 

2007
$’000

1,329,571 
1,806,332 
3,135,903 
(265,000) 
2,870,903 
(3,600) 

1,329,571
1,750,126
3,079,697
(199,135)
2,880,562
(3,600)

2,867,303 

2,876,962

199,135 
65,865 

25,000
174,135

265,000 

199,135

Advances from subsidiaries are unsecured, interest free and are not repayable within the next 12 months.

Information relating to significant subsidiaries consolidated in the financial statements is given in Note 38.

Notes to the Financial Statements 

173

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

9. 

Associated companies

Quoted shares, at cost
  Market value: $916,407,000
(2007: $2,318,996,000) 
Unquoted shares, at cost 

Provision for impairment 

Share of reserves 

Advances to associated companies 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

590,708 
722,218 
1,312,926 
(33,993) 
1,278,933 
759,328 
2,038,261 
1,162,770 

640,508 
694,015 
1,334,523 
(28,131) 
1,306,392 
741,074 
2,047,466 
1,093,128 

- -
3,074 
3,074 
- -
3,074 
- -
3,074 
- -

3,074
3,074

3,074

3,074

3,201,031 

3,140,594 

3,074 

3,074

Movements in the provision for impairment of associated companies are as follows:

At 1 January 
Exchange differences 
Charge/(write-back) to profit and loss account 
Impairment loss (Note 27) 
Amount written off/disposed 

At 31 December 

28,131 
251 
115 
6,209 
(713) 

28,258 
(578) 
(253) 
704 
- 

33,993 

28,131 

- -
- -
- -
- -
- -

- -

Advances to associated companies are unsecured and are not repayable within the next 12 months.  Interest is charged 
at rates ranging from 1.93% to 3.41% (2007: 3.30% to 4.31%) per annum.

The share of attributable profit of associated companies is as follows:

Share of profit before tax and exceptional items 
Share of exceptional items (Note 27) 
Share of profit before taxation 
Share of taxation (Note 28) 

Share of attributable profit 

Group

2008 
$’000 

2007
$’000

353,957 
7,684 
361,641 
(71,066) 

476,882
212,158
689,040
(115,462)

290,575 

573,578

The summarised financial information of associated companies, not adjusted for the Group’s proportionate share, is as 
follows:

Total assets 
Total liabilities 
Revenue 
Attributable profit before exceptional items 
Attributable profit after exceptional items 

15,516,823 
9,172,077 
14,518,960 
835,792 
850,997 

15,470,300
9,356,233
12,310,073
1,056,427
1,564,354

Investment in Asia Airfreight Terminal Company Limited (“AAT”) is equity accounted for in the consolidated financial 
statements notwithstanding that the Group holds less than 20% of the voting power in this company on grounds that the 
Group exercises significant influence by virtue of its contractual right to appoint one director to the board of AAT.

Information relating to significant associated companies whose results are included in the financial statements is given in 
Note 38.

174

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10. 

Investments

Available-for-sale investments: 
  Quoted equity shares 
  Quoted bonds 
  Unquoted equity shares 
  Unquoted property funds 

11. 

Long term receivables

Group

2008 
$’000 

2007
$’000

16,040 
- 
28,524 
56,460 

228,891
7,373
53,659
45,926

101,024 

335,849

Receivables from service concession arrangements 
Staff loans 
Long term trade receivables 
Loan to a subsidiary 
Others 

Less: Amounts due within one year and included 

in debtors (Note 15) 

Provision for doubtful debts 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

194,088 
3,829 
382 
- 
16,397 
214,696 

134,100 
3,817 
387 
- 
7,992 
146,296 

(13,104) 
201,592 
(3,930) 

(7,081) 
139,215 
(4,358) 

- -
1,331 
- -
300,000 
- -
301,331 

(313) 
301,018 
- -

1,452

300,000

301,452

(353)
301,099

197,662 

134,857 

301,018 

301,099

Movements in the provision for doubtful debts are as follows:

At 1 January 
Exchange differences 
Amount written off 

At 31 December 

4,358 
(410) 
(18) 

6,193 
286 
(2,121) 

3,930 

4,358 

- -
- -
- -

- -

Receivables arising from service concession arrangements arose from the following:

(a) 

(b) 

a 20-year contract to build and operate a water treatment plant.  The plant started commercial operations in 2007; 
and
a 25-year contract to build and operate a waste-to-energy plant.  As at 31 December 2008, the plant is still under 
construction and has not commenced operations.

The above arrangements are classified as service concession arrangements under INT FRS 112.  Under the terms of the 
arrangements, the Group will receive an aggregate minimum amount of $16,300,000 yearly from the contracted parties 
(grantors) in exchange for services performed by the Group when the plants are in commercial operations.  Revenue and 
profits relating to construction services of the waste-to-energy plant amounted to $63,222,000 and $774,000 (2007: 
$51,700,000 and $3,000,000) respectively.  The waste-to-energy plant has been pledged to secure bank loans (Note 20).

Included in staff loans are interest free advances to certain Directors amounting to $409,000 (2007: $264,000) and to 
directors of related corporations amounting to $536,000 (2007: $684,000) under an approved car loan scheme.

Notes to the Financial Statements 

175

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

11. 

Long term receivables (continued)

Long term receivables are unsecured and bears interest ranging from 1.09% to 4.58% (2007: 2.79% to 4.58%) per 
annum.

The fair value of long term receivables for the Group is $197,600,000 (2007: $134,773,000).  The carrying amount of long 
term receivables for the Company approximates its fair value.  These fair values are computed on the discounted cash 
flow method using a discount rate based upon the market-related rate for a similar instrument as at the balance sheet 
date.

12. 

Intangibles

Group
2008
At 1 January 
Exchange differences 
Additions 
Amortisation 

At 31 December 

Cost 
Accumulated amortisation 

2007
At 1 January 
Exchange differences 
Additions 
Amortisation 
Impairment loss (Note 27) 
Reclassification 

At 31 December 

Cost 
Accumulated amortisation 

Goodwill 
$’000 

Development
Expenditure 
$’000 

Total
$’000

62,389 
- 
10,864 
- 

5,434 
14 
165 
(379) 

67,823
14
11,029
(379)

73,253 

5,234 

78,487

73,253 
- 

8,750 
(3,516) 

82,003
(3,516)

73,253 

5,234 

78,487

133,011 
6,042 
- 
- 
(76,664) 
- 

2,047 
(60) 
4,333 
(309) 
- 
(577) 

135,058
5,982
4,333
(309)
(76,664)
(577)

62,389 

5,434 

67,823

62,389 
- 

8,995 
(3,561) 

71,384
(3,561)

62,389 

5,434 

67,823

Goodwill is allocated to cash-generating units identified according to business segment.

Goodwill allocated to Offshore & Marine division amounted to $16,075,000 (2007: $5,211,000).  The recoverable amount 
is determined based on value-in-use calculation using cash flow projections derived from the most recent financial 
budgets approved by management for the next five years using discount rates ranging from 7.32% to 20% (2007: 7.56% 
to 25%).  The key assumptions are those regarding the discount rate and expected changes to selling prices and direct 
costs.  Management estimates discount rate using pre-tax rate that reflects current market assessment of the time value 
of money and risks specific to the unit.  Changes in selling prices and direct costs are based on past practices and 
expectations of future changes in the market.

Goodwill allocated to Infrastructure division amounted to $57,178,000 (2007: $57,178,000).  The recoverable amount is 
determined based on the fair value less cost to sell using the current bid prices.

176

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13.  Stocks and work-in-progress

Work-in-progress in excess of related billings 
Stocks 
Properties held for sale 

Billings on work-in-progress in excess of related costs 

(a) 

Work-in-Progress in excess of Related Billings

Costs incurred and attributable profits 
Provision for loss on work-in-progress 

Less: Progress billings 

(a) 
(c) 
(d) 

(b) 

Movements in the provision for loss on work-in-progress are as follows:

At 1 January 
Exchange differences 
Charge to profit and loss account 
Amount utilised 

At 31 December 

(b) 

Billings on Work-in-Progress in excess of Related Costs

Costs incurred and attributable profits 
Less: Progress billings 

(c) 

Stocks

Consumable materials and supplies 
Finished products for sale 

(d) 

Properties Held For Sale

Properties under development 
  Land cost 
  Development cost incurred to date 
  Related overhead expenditure 
  Progress billing received and recognised profit 

Completed properties held for sale 

Provision for properties held for sale 

Group

2008 
$’000 

2007
$’000

400,760 
414,032 
2,402,609 

356,081
204,804
2,229,764

3,217,401 

2,790,649

(2,882,124) 

(2,542,517)

5,696,608 
(1,534) 
5,695,074 
(5,294,314) 

2,213,340
(37,284)
2,176,056
(1,819,975)

400,760 

356,081

37,284 
130 
- 
(35,880) 

9,609
(35)
28,005
(295)

1,534 

37,284

12,474,358 
(15,356,482) 

11,881,586
(14,424,103)

(2,882,124) 

(2,542,517)

385,295 
28,737 

184,243
20,561

414,032 

204,804

1,736,713 
1,034,395 
559,331 
(1,141,802) 
2,188,637 
286,159 
2,474,796 
(72,187) 

2,138,119
1,175,759
682,911
(1,888,472)
2,108,317
237,362
2,345,679
(115,915)

2,402,609 

2,229,764

Notes to the Financial Statements 

177

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

13.  Stocks and work-in-progress (continued)

Movements in the provision for properties held for sale are as follows:

At 1 January 
Exchange differences 
Write-back to profit and loss account 
Amount utilised 

At 31 December 

Group

2008 
$’000 

115,915 
15 
(24,616) 
(19,127) 

2007
$’000

328,948
(2)
(109,414)
(103,617)

72,187 

115,915

Interest capitalised during the financial year amounted to $17,113,000 (2007: $53,429,000) at rates ranging from 1.64% 
to 3.50% (2007: 2.78% to 4.44%) per annum for Singapore properties and 1.23% to 21.00% (2007: 1.62% to 10.05%) 
per annum for overseas properties.

Certain properties held for sale of subsidiaries are mortgaged to banks for loan facilities (Note 20).

14.  Amounts due from/to

Subsidiaries
Amounts due from
  -  trade 
  -  advances 

Provision for doubtful debts 

Amounts due to
  -  trade 
  -  advances 

Movements in the provision for doubtful debts are as follows:

At 1 January 
Charge to profit and loss account 

At 31 December 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

- 
- 
- 
- 

- 

- 
- 

- 

- 
- 

- 

- 
- 
- 
- 

- 

- 
- 

- 

- 
- 

- 

5,366 
261,952 
267,318 
(6,600) 

7,393
956,814
964,207
(5,700)

260,718 

958,507

404,461 
68,387 

160,030
258,857

472,848 

418,887

5,700 
900 

3,862
1,838

6,600 

5,700

Advances to and from subsidiaries are unsecured and are repayable on demand.  Interest is charged at rates ranging 
from 0.4% to 2.1% (2007: 1.4% to 4.5%) per annum on interest-bearing advances.

178

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

Associated Companies
Amounts due from
  -  trade 
  -  advances 

Provision for doubtful debts 

Amounts due to
  -  trade 
  -  advances 

85,363 
242,333 
327,696 
(1,113) 

70,734 
524,565 
595,299 
(946) 

326,583 

594,353 

17,186 
405,019 

16,851 
117,480 

422,205 

134,331 

Movements in the provision for doubtful debts are as follows:

At 1 January 
Charge/(write-back) to profit and loss account 

At 31 December 

946 
167 

1,113 

1,094 
(148) 

946 

284

284

284

300 
- -
300 
- -

300 

- 2
- -

- 2

- -
- -

- -

Advances to and from associated companies are unsecured and are repayable on demand.  Interest is charged at rates 
ranging from 0.40% to 9.56% (2007: 1% to 9.72%) per annum on interest-bearing advances.

15.  Debtors

Trade debtors 
Provision for doubtful debts 

Long term receivables due within one year (Note 11) 
Sundry debtors 
Prepaid project cost & prepayments 
Derivative financial instruments (Note 35) 
Tax recoverable 
GST receivable 
Interest receivable 
Deposits paid 
Recoverable accounts 
Receivables not billed 
Advances to subcontractors 
Advances to corporations in which the Group 
  has investment interests 
Advances to minority shareholders of subsidiaries 

Provision for doubtful debts 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

1,326,761 
(30,074) 
1,296,687 

1,098,822 
(20,703) 
1,078,119 

13,104 
114,503 
54,368 
71,616 
44,304 
53,917 
17,928 
16,975 
50,498 
6,477 
173,346 

52,334 
33,131 
702,501 
(28,357) 
674,144 

7,081 
97,775 
65,391 
168,646 
92,916 
39,895 
16,145 
16,110 
56,649 
9,232 
55,583 

19,040 
62,285 
706,748 
(31,433) 
675,315 

- -
- -
- -

313 
249 
210 
58,675 
- -
- -
66 3

395 
- -
- -
- -

- -
- -
59,908 
- -
59,908 

353
382
174
155,753

389

157,054

157,054

Total 

1,970,831 

1,753,434 

59,908 

157,054

Notes to the Financial Statements 

179

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

15.  Debtors (continued)

Movements in the provision for debtors are as follows:

At 1 January 
Exchange differences 
Charge/(write-back) to profit and loss account 
Impairment (write-back)/loss (Note 27) 
Amount written off 
Reclassification 

Group 

2008 
$’000 

52,136 
(171) 
12,590 
(1,921) 
(4,197) 
(6) 

2007 
$’000 

55,887 
(24) 
(6,040) 
6,603 
(4,753) 
463 

At 31 December 

58,431 

52,136 

16.  Short term investments

Available-for-sale investments: 
  Quoted equity shares 
  Quoted unit trust 
  Quoted bonds 
  Unquoted equity shares 
Total available-for-sale investments 

Investments held for trading: 
  Quoted equity shares 
  Quoted unit trust 
Total investments held for trading 

Total short term investments 

17.  Bank balances, deposits and cash

Company

2008 
$’000 

2007
$’000

- -
- -
- -
- -
- -
- -

- -

Group

2008 
$’000 

2007
$’000

229,484 
29,317 
6,480 -
25,772 -
291,053 

32,781 
6,983 
39,764 

399,663
54,561

454,224

77,494
15,719
93,213

330,817 

547,437

Bank balances and cash 
Fixed deposits with banks 
Amounts held under escrow accounts for
  overseas acquisition of land, 
  payment of construction cost and liabilities 
Bank balances of property subsidiaries held under
  Project Account Rules 1985 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

417,603 
1,746,261 

328,870 
1,039,231 

3,155 
661,286 

2007
$’000

3,806
78

34,364 

22,149 

46,623 

210,600 

- -

- -

2,244,851 

1,600,850 

664,441 

3,884

Fixed deposits with banks of the Group mature on varying periods mainly between 1 day to 12 months (2007: 1 day to 
12 months).  This comprised Singapore dollar fixed deposits of $672,885,000 (2007: $33,773,000) at interest rates 
ranging from 0.11% to 2.14% (2007: 0.33% to 3.31%) per annum, and foreign currency fixed deposits of $1,073,376,000 
(2007: $1,005,458,000) at interest rates ranging from 0.10% to 18.00% (2007: 0.5% to 9.25%) per annum.

180

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed deposits with banks of the Company mature on varying periods between 2 days to 5 months (2007: 1 month to 6 
months).  This comprised Singapore dollar fixed deposits of $509,603,000 (2007: nil) at interest rates ranging from 0.37% 
to 0.50% (2007: nil) per annum, and foreign currency fixed deposits of $151,683,000 (2007: $78,000) at interest rates 
ranging from 0.10% to 5.88% (2007: 5.95% to 6.50%) per annum.

18.  Creditors

Trade creditors 
Customers’ advances and deposits 
Derivative financial instruments (Note 35) 
Sundry creditors 
Accrued operating expenses 
Advances from minority shareholders 
Interest payables 
Other payables 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

952,313 
61,497 
266,516 
517,803 
1,778,607 
271,330 
12,161 
79,356 

652,457 
47,530 
20,422 
558,434 
1,474,327 
245,773 
19,177 
53,892 

52 
56 
158,020 
5,960 
55,294 
- -
306 
- -

2007
$’000

137
74
13,952
6,995
53,646

853

3,939,583 

3,072,012 

219,688 

75,657

Advances from minority shareholders of certain subsidiaries are unsecured and are repayable on demand.  Interest is 
charged at rates ranging from 2.00% to 18.59% (2007: 2.78% to 12.06%) per annum on interest-bearing loans.

19.  Provisions

Group
2008
At 1 January 
Exchange differences 
Charge/(write-back) to profit and loss account 
Amount utilised 

Warranties  
$’000 

Claims 
$’000 

 Total
$’000

35,267 
(2,445) 
25,830 
(351) 

2,633 
(22) 
(2,190) 
(113) 

37,900
(2,467)
23,640
(464)

At 31 December 

58,301 

308 

58,609

2007
At 1 January 
Exchange differences 
Charge to profit and loss account 
Amount utilised 

29,729 
(326) 
6,143 
(279) 

232 
(13) 
2,414 
- 

29,961
(339)
8,557
(279)

At 31 December 

35,267 

2,633 

37,900

Notes to the Financial Statements 

181

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

20.  Term loans

2008
Keppel Corporation Medium Term Notes 
Keppel Land Medium Term Notes 
Keppel Land 2.5% Convertible Bonds 2013 
Keppel Structured Notes Commodity-linked Notes 
K-REIT Asia term loans 
Bank loans
  -  secured 
  -  unsecured 
Other loans
  -  unsecured 

(a) 
(b) 
(c) 
(d) 
(e) 

(f) 
(g) 

(h) 

Group 

Company

Due within 
one year 
$’000 

Due after 
one year 
$’000 

Due within 
one year 
$’000 

Due after
one year
$’000

- 
108,500 
- 
- 
- 

37,525 
48,540 

300,000 
150,000 
269,579 
41,920 
190,085 

385,130 
388,360 

3,303 

19,479 

197,868 

1,744,553 

- 
- 
- 
- 
- 

- 
- 

- 

- 

300,000
-
-
-
-

-
-

-

300,000

499,104 

1,731,526 

134,820 

300,000

2007 

(a) 

(b) 

(c) 

The $300,000,000 Floating Rate Notes 2010 were issued in 2005 under the US$600,000,000 Multi-Currency 
Medium Term Note Programme by the Company.  The notes are unsecured and are issued in tranches which will 
mature five years from the date of issue.  Interest is based on money market rates ranging from 1.09% to 3.04% 
(2007: 2.79% to 3.89%) per annum.

At the end of the financial year, notes issued under the US$800,000,000 Multi-Currency Medium Term Note 
Programme by Keppel Land Limited, a subsidiary of the Company, amounted to $258,500,000.  The notes are 
unsecured and are issued in series or tranches, and comprised (i) fixed rate notes due 2009 of $10,000,000 and 
(ii) variable rate notes due 2009 and 2010 of $248,500,000.  Interest payable is based on money markets rates 
ranging from 1.10% to 3.40% (2007: 2.3% to 4.18%) per annum.

The $300,000,000 2.5%, 7 year convertible bonds were issued in 2006 by Keppel Land Limited.  Interest is 
payable semi-annually.  The bonds, maturing on 23 June 2013, are convertible at the option of bondholders to 
Keppel Land ordinary shares at a conversion price of $6.55 per share.  Any bondholder may request to redeem all 
or some of its bonds on 23 June 2011 or in the event that its shares cease to be listed or admitted to trading on 
the Singapore Stock Exchange.

The convertible bonds are recognised on the balance sheet as follows:

Balance at 1 January 
Interest expense 
Interest paid 

Liability component at 31 December 

Group

2008 
$’000 

263,488 
13,591 
(7,500) 

2007
$’000

257,639
13,349
(7,500)

269,579 

263,488

Interest expense on the convertible bonds is calculated based on the effective interest method by applying the 
interest rate of 4.78% (2007: 4.78%) per annum for an equivalent non-convertible bond to the liability component 
of the convertible bonds.

182

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(d) 

(e) 

(f) 

(g) 

(h) 

The S$23,960,000 (“Tranche A”) and US$11,565,000 (“Tranche B”) commodity-linked notes were issued in 2006 
by Keppel Structured Notes Pte Ltd (“KSN”), a subsidiary of the Company.  The commodity-linked notes, maturing 
on 28 November 2011, may be redeemed at par at the option of KSN, in whole, on notice, in the event of certain 
changes in the tax laws of Singapore, subject to certain other conditions.  The notes are unsecured and bear 
interest payable annually at a rate ranging from 6% to 13% per annum for the period from 27 November 2006 
to 28 November 2011.  The notes are unconditionally and irrevocably guaranteed by the Company.  KSN has 
entered into a 5-year commodity-linked interest rate swap transaction relating to Tranche A notes and a 5-year 
commodity-linked cross currency and interest rate swap transaction relating to the Tranche B notes to hedge the 
foreign exchange and interest rate risks of the notes.  The effect of the swap transactions is that KSN pays an 
interest rate based on money market rates ranging from 1.50% to 2.77% (2007: 2.77% to 3.51%) per annum.

K-REIT Asia, a subsidiary of the Company, secured two fixed rate mortgage loans in 2006 totalling $190,085,000 
from a special purpose company, Blossom Assets Ltd. The loans consist of a Tranche A Mortgage Loan 
amounting to $160,197,000 and a Tranche B Mortgage Loan amounting to $29,888,000, which are funded by the 
proceeds of commercial mortgaged-backed securities notes issued by Blossom Assets Ltd.  The loans are due on 
17 May 2011 and are secured on the investment properties and certain assets of K-REIT Asia.  Interest is payable 
ranging from 3.91% to 4.06% (2007: 3.91% to 4.06%) per annum.

The secured bank loans consist of:
-  A $72,400,000 bank loan drawn down by a subsidiary.  The term loan is repayable in 2029 and is secured on 
certain fixed assets of the subsidiary.  Interest is swapped to fixed rates ranging from 3.42% to 3.62% (2007: 
3.52% to 3.63%) per annum.

-  A term loan of $158,600,000 drawn down by a subsidiary.  The term loan is repayable in 2010 and is secured 
on the investment property of the subsidiary.  Interest is based on money market rates ranging from 2.03% to 
3.71% (2007: 3.08% to 4.05%) per annum.

-  A term loan of $81,041,000 drawn down by a subsidiary during the year.  The term loan is repayable in 2012 
and is secured on the investment property of the subsidiary.  Interest is based on money market rates ranging 
from 1.97% to 2.48% per annum.

-  Other secured bank loans totalling $110,614,000 comprised $88,005,000 of loans denominated in Singapore 
dollar and $22,609,000 of foreign currency loans.  They are repayable between one and five years and are 
secured on certain fixed and other assets of subsidiaries.  Interest on loans denominated in Singapore dollar is 
based on money market rates ranging from 1.64% to 4.14% (2007: 3.17% to 4.14%) per annum.  Interest on 
foreign currency loans is based on money market rates ranging from 5.40% to 9.95% (2007: 7.10% to 8%) per 
annum.

The unsecured bank loans of the Group totalling $436,900,000 comprised $370,000,000 of loans denominated 
in Singapore dollar and $66,900,000 of foreign currency loans.  They are repayable between one and two years.  
Interest on loans denominated in Singapore dollar is based on money market rates ranging from 1.46% to 3.40% 
(2007: 1.11% to 4.17%) per annum. Interest on foreign currency loans is based on money market rates ranging 
from 2.03% to 21.0% (2007: 4.7% to 10.15%) per annum.

The other unsecured loans include term loan facilities and hire purchase contracts entered into with various finance 
and leasing companies for purchase of machinery and equipment.  Interest range from 3.19% to 6.99% (2007: 
3.06% to 7.74%) per annum.

The net book value of property and assets mortgaged to the banks amounted to $2,810,136,000 (2007: 
$1,834,575,000).  These are securities given to the banks for loans and overdraft facilities.

The fair values of term loans for the Group and Company are $1,968,578,000 (2007: $2,253,263,000) and $300,000,000 
(2007: $434,820,000) respectively.  These fair values are computed on the discounted cash flow method using a discount 
rate based upon the borrowing rate which the Directors expect would be available as at the balance sheet date.

Notes to the Financial Statements 

183

 
 
Notes to the Financial Statements

20.  Term loans (continued)

Loans due after one year are estimated to be repayable as follows:

Years after year-end:
After one but within two years 
After two but within five years 
After five years 

21.  Bank overdrafts

Secured 
Unsecured 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

1,020,959 
666,562 
57,032 

73,602 
1,348,601 
309,323 

300,000 -
- 
- -

300,000

1,744,553 

1,731,526 

300,000 

300,000

Group

2008 
$’000 

180 
27,582 

2007
$’000

1,942
1,825

27,762 

3,767

Interest on the bank overdrafts is payable at the banks’ prevailing prime rates ranging from 1.76% to 19.29% (2007: 
1.66% to 10.10%) per annum.  The secured bank overdrafts are secured by short term investments portfolio of a 
subsidiary.

22.  Deferred taxation

Deferred tax liabilities:
  Accelerated tax depreciation 

Investment properties valuation 

  Offshore income & others 

Deferred tax assets:
  Other provisions 
  Unutilised tax benefits 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

146,263 
212,017 
91,717 
449,997 

117,665 
210,607 
111,674 
439,946 

(40,323) 
(28,462) 
(68,785) 

(31,232) 
(19,745) 
(50,977) 

- -
- -
5,608 
5,608 

- -
- -
- -

13,486
13,486

Net deferred tax liabilities 

381,212 

388,969 

5,608 

13,486

Deferred tax assets are recognised for unutilised tax benefits carried forward to the extent that realisation of the related 
tax benefits through future taxable profits is probable.

The Group has unutilised tax losses and capital allowances of $546,613,000 (2007: $434,802,000) for which no deferred 
tax benefit is recognised in the balance sheet.  These tax losses and capital allowances can be carried forward and 
used to offset against future taxable income subject to meeting certain statutory requirements by those companies with 
unrecognised tax losses and capital allowances in their respective countries of incorporation.  The unutilised tax losses 
and capital allowances do not have expiry dates.

184

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23.  Revenue

Revenue from construction contracts 
Sale of property and goods 
Rental income from investment properties 
Revenue from services rendered 
Dividend income from quoted shares 
Others 

24.  Staff costs

Wages and salaries 
Employer’s contribution to Central Provident Fund 
Share options granted to Directors and employees 
Other staff benefits 

25.  Operating profit

Operating profit is arrived at after charging/(crediting) the following:

Auditors’ remuneration
  -  auditors of the Company 
  -  other auditors of subsidiaries 
Fees and other remuneration to Directors of the Company 
Shares granted to Directors of the Company 
Contracts for services rendered by Directors or
  with a company in which a Director
  has a substantial financial interest 
Key management’s emoluments 
  -  short-term employee benefits 
  -  post-employment benefits 
  -  share options granted 
Depreciation of fixed assets 
Write-off of fixed assets 
Write-off of investment properties 
Amortisation of intangibles 
Profit on sale of fixed assets 
Profit on sale of investments 
Fair value loss/(gain) on
  -  investments held for trading 
  -  forward foreign exchange contracts 
  -  forward HSFO contracts 

Notes to the Financial Statements 

Group

2008 
$’000 

8,946,107 
731,160 
165,078 
1,932,229 
6,569 
24,283 

2007
$’000

7,593,574
1,663,686
136,042
1,002,406
8,065
27,477

11,805,426 

10,431,250

Group

2008 
$’000 

1,060,421 
104,068 
26,527 
138,026 

2007
$’000

900,936
83,740
21,307
126,142

1,329,042 

1,132,125

Group

2008 
$’000 

1,171 
3,984 
580 
139 

2007
$’000

950
3,131
624
262

80 

39

34,959 
69 
4,993 
138,699 
- 
380 -
379 
(8,268) 
(45,263) 

45,995 
71,321 
3,012 

30,974
54
4,029
125,383
43

309
(7,126)
(54,577)

(3,441)
81,517
41

185

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

25.  Operating profit (continued)

Provision/(write-back) for
  -  warranties 
  -  claims 
(Write-back)/provision for
  -  work-in-progress 
  -  properties held for sale 
Provision/(write-back) for doubtful debts
  -  trade debts 
  -  receivables 
  -  other debts 
Bad debts written off/(recovered)
  -  trade debts 
  -  other debts 
Cost of stocks & properties held for sale recognised as expense 
Stocks (recovered)/written off 
Rental expense
  -  operating leases 
Direct operating expenses
  -  investment properties that generated rental income 
Loss on differences in foreign exchange 

Non-audit fees paid to
  -  auditors of the Company 
  -  other auditors of subsidiaries 

Group

2008 
$’000 

25,830 
(2,190) 

2007
$’000

6,143
2,414

- 
(24,616) 

28,005
(109,414)

14,668 
3,650 
(5,728) 

163 
155 
514,132 
(2,554) 

(6,678)
2,967
(2,329)

(3)
14
1,331,276
2,831

52,088 

45,261

51,757 
101,554 

50,488
14,499

74 
314 

27
359

The Audit Committee has undertaken a review of all non-audit services provided by the auditors and in the opinion of the 
Audit Committee, these services would not affect the independence of the auditors.

26. 

Investment income, interest income and interest expenses

Investment income from: 
  Shares - quoted in Singapore 
  Shares - quoted outside Singapore 
  Shares - unquoted 

Interest income from:
  Bonds, debentures, deposits and associated companies 

Interest expenses on: 
  Bonds, debentures, fixed term loans and overdrafts 
  Fair value loss on interest rate caps and swaps 

186

Keppel Corporation Limited 
Report to Shareholders 2008

Group

2008 
$’000 

- 
2,074 
10,013 

2007
$’000

1,170
1,532
165

12,087 

2,867

71,002 

88,542

(64,931) 
(13,740) 

(54,179)
(8,531)

(78,671) 

(62,710)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
27.  Exceptional items

Gain on disposal of subsidiaries, associated companies and investments 
Gain on acquisition of additional interest in a subsidiary 
Impairment loss of fixed assets (Note 5) 
Impairment loss of associated companies (Note 9) 
Impairment loss of goodwill (Note 12) 
Impairment write-back/(loss) of debtors (Note 15) 
Impairment write-back/(loss) of other assets 
Fair value gain on investment properties (Note 6) 
Share of associated companies (Note 9) 
Cost associated with restructuring of operations and others 

Taxation (Note 28) 

Minority interests 

Group

2008 
$’000 

2,568 
15,417 -
(1,036) 
(6,209) 
- 
1,921 
2,448 
4,471 
7,684 
(14,672) 
12,592 
(2,810) 
9,782 
(8,464) 

2007
$’000

2,291

(107,957)
(704)
(76,664)
(6,603)
(132,427)
691,444
212,158
(16,605)
564,933
(149,500)
415,433
(310,328)

Attributable exceptional items 

1,318 

105,105

28.  Taxation

(a) 

Income tax expense

Tax expense comprised: 
  Current tax 
  Adjustment for prior year’s tax 
  Share of taxation of associated companies (Note 9) 
  Others 

Deferred tax movement: 
  Accelerated tax depreciation 

Investment properties valuation 

  Offshore income & others 
  Other provisions 
  Unutilised tax benefits 
  Reduction in tax rate 

Group

2008 
$’000 

2007
$’000

218,191 
(15,268) 
71,066 
8,229 

42,001 
1,426 
(18,042) 
(10,742) 
(8,831) 
- 

222,151
(9,011)
115,462
2,286

48,471
111,777
21,526
(15,821)
(16,270)
(11,936)

288,030 

468,635

The income tax expense on the results of the Group differ from the amount of income tax expense determined by 
applying the Singapore standard rate of income tax to profit before tax and exceptional items due to the following:

Profit before tax and exceptional items 

1,596,849 

1,556,230

Tax calculated at tax rate of 18% (2007: 18%) 
Income not subject to tax 
Expenses not deductible for tax purposes 
Utilisation of previously unrecognised tax benefits 
Effect of reduction in tax rate 
Effect of different tax rates in other countries 
Adjustment for prior year’s tax 
Tax expense of exceptional items (Note 27) 

287,433 
(65,267) 
68,545 
(2,139) 
- 
11,916 
(15,268) 
2,810 

280,121
(72,208)
117,652
(1,995)
(11,936)
16,512
(9,011)
149,500

288,030 

468,635

Notes to the Financial Statements 

187

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

28.  Taxation (continued)

(b) 

Movement in current income tax liabilities

At 1 January 
Exchange differences 
Tax expense 
Adjustment for prior year’s tax 
Income taxes paid 
Subsidiary acquired 
Reclassification 
Others 

Group 

2008 
$’000 

351,864 
5,528 
218,191 
(15,268) 
(229,306) 
- 
(410) 
13,421 

2007 
$’000 

273,883 
(2,793) 
222,151 
(9,011) 
(159,797) 
22 
24,405 
3,004 

Company

2008 
$’000 

15,305 
- -
8,573 
(1,482) 
(2,727) 
- -
- 
- -

2007
$’000

10,182

5,559
(4,289)
(13,225)

17,078

At 31 December 

344,020 

351,864 

19,669 

15,305

29.  Earnings per ordinary share

Net profit attributable to shareholders 
  before exceptional items 
Adjustment for dilutive potential ordinary shares
  of subsidiaries and associated companies,
  before exceptional items 
Adjusted net profit before exceptional items 
Exceptional items 
Adjustment for dilutive potential ordinary shares
  of subsidiaries and associated companies,
  after exceptional items 

Group

2008 
$’000 

2007
$’000

Basic 

Diluted 

Basic 

Diluted

1,096,653 

1,096,653 

1,025,596 

1,025,596

- 
1,096,653 
1,318 

(109) 
1,096,544 
1,318 

- 
1,025,596 
105,105 

(2,548)
1,023,048
105,105

- 

9 

- 

(7,974)

Adjusted net profit after exceptional items 

1,097,971 

1,097,871 

1,130,701 

1,120,179

Weighted average number of ordinary shares 
Adjustment for dilutive potential ordinary shares 
Weighted average number of ordinary shares 
  used to compute earnings per share 

Earnings per ordinary share
  Before exceptional items 
  After exceptional items 

Number of Shares 
’000 

Number of Shares
’000

1,590,353 
- 

1,590,353 
5,614 

1,580,786 
- 

1,580,786
11,199

1,590,353 

1,595,967 

1,580,786 

1,591,985

69.0 cts 
69.0 cts 

68.7 cts 
68.8 cts 

64.9 cts 
71.5 cts 

64.3 cts
70.4 cts

188

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30.  Dividends

The Directors are pleased to recommend a final dividend of 21 cents per share tax exempt one-tier (2007: final dividend of 
10 cents per share tax exempt one-tier and special dividend of 45 cents per share tax exempt one-tier) in respect of the 
financial year ended 31 December 2008 for approval by shareholders at the next Annual General Meeting to be convened.  

Together with the interim dividend of 14 cents per share tax exempt one-tier (2007: 9 cents per share comprising 1.5 
cents per share less tax and 7.5 cents per share tax exempt one-tier), total dividends paid and proposed in respect 
of the financial year ended 31 December 2008 will be 35 cents per share tax exempt one-tier (2007: 64 cents per 
share comprising 1.5 cents per share less tax and 62.5 cents per share tax exempt one-tier which included the special 
dividend).

During the financial year, the following dividends were paid:

A final dividend of 10 cents per share tax exempt one-tier on the issued 
and fully paid ordinary shares in respect of the previous financial year 

A special dividend of 45 cents per share tax exempt one-tier on the issued 
and fully paid ordinary shares in respect of the previous financial year 

An interim dividend of 14 cents per share tax exempt one-tier on the issued 
and fully paid ordinary shares in respect of the current financial year 

31.  Acquisition of subsidiary

The following subsidiary was acquired during the financial year:

$’000

159,065

715,794

222,884

1,097,743

Name of subsidiary 

Sunseascan Investment (HK) 
Company Limited 

Date of 
acquisition 

Gross interest 
before 
acquisition 

Interest 
acquired 

Gross interest
after 
acquisition 

Net assets
acquired 
$’000 

Consideration
$’000

11.4.2008 

- 

80% 

80% 

1,400 

1,400

Loss of the acquired subsidiary from the date of acquisition to 31 December 2008 amounted to $331,000.  There is no 
material impact to Group revenue and attributable profit before exceptional items if the acquisitions had occurred on 1 
January 2008.

Details of net assets acquired are disclosed in the Consolidated Cash Flow Statement.

Notes to the Financial Statements 

189

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

32.  Commitments

(a) 

Capital commitments

Capital expenditure not provided for in the financial statements:

In respect of contracts placed: 
-  for purchase and construction of development properties 
-  for purchase of other fixed assets 
-  for purchase/subscription of shares in other companies 

Amounts approved by Directors in addition to contracts placed: 
-  for purchase and construction of development properties 
-  for purchase of other fixed assets 
-  for purchase/subscription of shares in other companies 

Less: Minority shareholders’ shares 

Group

2008 
$’000 

2007
$’000

2,115,095 
62,948 
673,238 

1,476,307
25,765
315,916

1,730,102 
98,431 
10,579 
4,690,393 
(1,474,240) 

2,824,886
175,948
227,877
5,046,699
(1,666,324)

3,216,153 

3,380,375

There was no future capital expenditure/commitment of the Company.

(b) 

Lessee’s lease commitments
The Group leases land and office buildings from non-related parties under non-cancellable operating lease 
agreements.  The leases have varying terms, escalation clauses and renewal rights.  The future minimum lease 
payable in respect of significant non-cancellable operating leases as at the end of the financial year are as follows:

Years after year-end:
Within one year 
From two to five years 
After five years 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

50,651 
149,898 
633,376 

52,087 
161,839 
601,713 

833,925 

815,639 

188 
88 
- -

276 

2007
$’000

1,452
604

2,056

(c) 

Lessor’s lease commitments
The Group leases out commercial space to non-related parties under non-cancellable operating leases.  The future 
minimum lease receivable in respect of significant non-cancellable operating leases as at the end of the financial 
year are as follows:

Years after year-end:
Within one year 
From two to five years 
After five years 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

149,043 
166,220 
48,729 

124,224 
155,594 
43,802 

363,992 

323,620 

- -
- -
- -

- -

Some of the operating leases are subject to revision of lease rentals at periodic intervals.  For the purposes of the 
above, the prevailing lease rentals are used.

190

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33.  Contingent liabilities (unsecured)

Guarantees in respect of banks and other loans
granted to subsidiaries and associated companies 

Performance guarantees issued for contracts
awarded to subsidiaries and associated companies 

Bank guarantees 

Others 

Group 

2008 
$’000 

2007 
$’000 

Company

2008 
$’000 

2007
$’000

27,001 

24,772 

741,413 

427,080

300 

300 

60,533 

53,573 

47,912 

59,584 

- -

- -

- -

135,746 

138,229 

741,413 

427,080

The financial effects of FRS 39 relating to financial guarantee contracts issued by the Company are not material to the 
financial statements of the Company and therefore are not recognised.

The Directors do not expect material losses under these guarantees.

34.  Significant related party transactions

In addition to the related party information disclosed elsewhere in the financial statements, there were the following 
significant related party transactions which were carried out in the normal course of business on terms agreed between 
the parties during the financial year:

Sale of residential properties to directors and their associates 

35. 

Financial risk management

Group

2008 
$’000 

2007
$’000

- 

17,447

The Group operates internationally and is exposed to a variety of financial risks, comprising market risk (including currency 
risk, interest rate risk and price risk), credit risk and liquidity risk.  Financial risk management is carried out by the Keppel 
Group Treasury Department in accordance with established policies and guidelines.  These policies and guidelines are 
established by the Group Central Finance Committee and are updated to take into account changes in the operating 
environment.  This committee is chaired by the Group Finance Director and comprises Chief Financial Officers of the 
Group’s key operating companies and Head Office specialists.

Market Risk

(i) 

Currency risk
The Group has receivables and payables denominated in foreign currencies viz US dollars, European and other 
Asian currencies.  The Group’s foreign currency exposures arise mainly from the exchange rate movement of these 
foreign currencies against the Singapore dollar, which is the Group’s presentation currency.  To hedge against 
the volatility of future cash flows caused by changes in foreign currency rates, the Group utilises forward foreign 
currency contracts and other foreign currency hedging instruments to hedge the Group’s exposure to specific 
currency risks relating to investments, receivables, payables and other commitments.  Group Treasury Department 
monitors the current and projected foreign currency cash flow of the Group and aims to reduce the exposure of 
the net position in each currency by borrowing in foreign currency and other currency contracts where appropriate.

As at the end of the financial year, the Group has outstanding forward foreign exchange contracts with notional 
amounts totalling $4,261,980,000 (2007: $4,981,064,000).  The net negative fair value of forward foreign 
exchange contracts is $95,027,000 (2007: net positive fair value of $143,828,000) comprising assets of 
$64,728,000 (2007: $157,845,000) and liabilities of $159,755,000 (2007: $14,017,000).  These amounts are 
recognised as derivative financial instruments in debtors (Note 15) and creditors (Note 18).

Notes to the Financial Statements 

191

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

35. 

Financial risk management (continued)

As at the end of the financial year, the Company has outstanding forward foreign exchange contracts with 
notional amounts totalling $4,146,968,000 (2007: $4,936,711,000).  The net negative fair value of forward 
foreign exchange contracts is $99,345,000 (2007: net positive fair value of $141,801,000) comprising assets of 
$58,675,000 (2007: $155,753,000) and liabilities of $158,020,000 (2007: $13,952,000).  These amounts are 
recognised as derivative financial instruments in debtors (Note 15) and creditors (Note 18).

Other than the above hedged foreign currency contracts, the unhedged currency exposure of financial assets and 
financial liabilities denominated in currencies other than the respective entities’ functional currencies are as follows:

USD 
$’000 

2008 

Euro 
$’000 

Others 
$’000 

USD 
$’000 

2007

Euro 
$’000 

Others
$’000

Group
Financial Assets
Debtors 
140,815 
Investments 
20,472 
Bank balances, deposits & cash  141,310 
Financial Liabilities
Creditors 
Term loans 

44,848 
21,303 

3,945 
- 
190,327 

65,169 
124,330 
290,970 

65,237 
30,175 
66,335 

10,938 
21,018 
232,499 

135,160
372,013
194,466

18,601 
- 

108,433 
13,685 

45,557 
109,370 

23,999 
- 

168,915
32,650

Company
Financial Assets
Debtors 
Bank balances, deposits & cash 
Financial Liabilities
Creditors 

- 
95,896 

17 
25,320 

611 
33,403 

621 

- 

267 

186 
16 

93 

2,088 
- 

587
3,526

- 

98

Sensitivity analysis for currency risk
If the relevant foreign currency change against SGD by 5% (2007: 5%) with all other variables held constant, the 
effects will be as follows:

Group
USD against SGD 
  -  Strengthened 
  -  Weakened 
Euro against SGD 
  -  Strengthened 
  -  Weakened 

Company
USD against SGD
  -  Strengthened 
  -  Weakened 
Euro against SGD
  -  Strengthened 
  -  Weakened 

Profit after tax 

Equity

2008 
$’000 

2007 
$’000 

2008 
$’000 

2007
$’000

1,510
(1,510)

956
(956)

10,739 
(10,739) 

8,753 
(8,753) 

4,739 
(4,739) 

1,264 
(1,264) 

(1,161) 
1,161 

123 
(123) 

6 
(6) 

105 
(105) 

1,018 
(1,018) 

- 
- 

- -
- -

- -
- -

192

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(ii) 

Interest rate risk
The Group is exposed to interest rate risk for changes in interest rates primarily for debt obligations, placements in 
the money market and investments in bonds.  The Group policy is to maintain a mix of fixed and variable rate debt 
instruments with varying maturities.  Where necessary, the Group uses derivative financial instruments to hedge 
interest rate risks.

The Group purchases interest rate caps to hedge the interest rate risk exposure arising from its US$ and S$ 
variable rate term loans (Note 20).  As at the end of the financial year, the Group has the following outstanding 
interest rate cap agreements.

Year 

2008 

2007 

Notional amount 

Maturity 

Interest rate caps

$52,708,000 

2009 - 2011 

$58,131,000 

2009 - 2011 

1.8% - 3%

1.8% - 3%

The positive fair values of interest rate caps for the Group are $265,000 (2007: $493,000).  This amount is 
recognised as derivative financial instruments in debtors (Note 15).

The Group enters into interest rate swap agreements to hedge the interest rate risk exposure arising from its 
S$ variable rate term loans (Note 20).  As at the end of the financial year, the Group has interest rate swap 
agreements with notional amount totalling $348,011,000 (2007: $625,995,000) whereby it receives variable rates 
equal to SIBOR (2007: SIBOR) and pays fixed rates of between 3.19% and 3.50% (2007: 2.83% and 3.50%) on 
the notional amount.

The net negative fair value of interest rate swaps for the Group is $26,161,000 (2007: $4,113,000) comprising 
assets of $3,495,000 (2007: $2,292,000) and liabilities of $29,656,000 (2007: $6,405,000).  These amounts are 
recognised as derivative financial instruments in debtors (Note 15) and creditors (Note 18).

Sensitivity analysis for interest rate risk
If interest rates increase/decrease by 0.5% (2007: 0.5%) with all other variables held constant, the Group’s and 
Company’s profit after tax would have been lower/higher by $4,169,000 (2007: $4,618,000) and $1,230,000 
(2007: $2,174,000) respectively as a result of higher/lower interest expense on floating rate loans.

(iii) 

Price risk
The Group hedges against fluctuations arising on the purchase of natural gas that affect cost.  Exposure to price 
fluctuations is managed via fuel oil forward contracts, whereby the price of natural gas is indexed to a benchmark 
fuel price index, High Sulphur Fuel Oil (HSFO) 180-CST.  As at the end of the financial year, the Group has 
outstanding HSFO forward contracts with notional amounts totalling $181,080,000 (2007: $165,638,000).  The 
net negative fair value of HSFO forward contracts for the Group is $73,977,000 (2007: net positive fair value 
of $8,016,000) comprising assets of $3,128,000 (2007: $18,755,000) and liabilities of $77,105,000 (2007: 
$10,739,000).  These amounts are recognised as derivative financial instruments in debtors (Note 15) and 
creditors (Note 18).

The Group is exposed to equity securities price risk arising from equity investments classified as investments 
held for trading and available-for-sale investments.  To manage its price risk arising from investments in equity 
securities, the Group diversifies its portfolio.  Diversification of the portfolio is done in accordance with the limits set 
by the Group.

Sensitivity analysis for price risk
If prices for HSFO increase/decrease by 5% (2007: 5%) with all other variables held constant, the Group’s hedging 
reserve in equity would have been higher/lower by $3,677,000 (2007: $4,365,000) as a result of fair value changes 
on cash flow hedges.

If prices for quoted investments increase/decrease by 5% (2007: 5%) with all other variables held constant, the 
Group’s profit after tax would have been higher/lower by $1,988,000 (2007: $4,661,000) as a result of higher/
lower fair value gains on investments held for trading, and the Group’s fair value reserve in equity would have been 
higher/lower by $14,066,000 (2007: $34,524,000) as a result of higher/lower fair value gains on available-for-sale 
investments.

Notes to the Financial Statements 

193

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

35. 

Financial risk management (continued)

Credit Risk
Credit risk refers to the risk that debtors will default on their obligation to repay the amount owing to the Group.  
A substantial portion of the Group’s revenue is on credit terms or stage of completion.  These credit terms are 
normally contractual.  The Group adopts stringent procedures on extending credit terms to customers and on the 
monitoring of credit risk.  The credit policy spells out clearly the guidelines on extending credit terms to customers, 
including monitoring the process and using related industry’s practices as reference.  This includes assessment 
and valuation of customers’ credit reliability and periodic review of their financial status to determine the credit 
limits to be granted.  Customers are also assessed based on their historical payment records.  Where necessary, 
customers may also be requested to provide security or advance payment before services are rendered.  The 
Group’s policy does not permit non-secured credit risk to be significantly centralised in one customer or a group of 
customers.

The maximum exposure to credit risk is the carrying amount of financial assets which are mainly trade debtors and 
bank balances, deposits and cash.

(i) 

Financial assets that are neither past due nor impaired
Trade debtors that are neither past due nor impaired are substantially companies with good collection track 
record with the Group.  Bank deposits, forward foreign exchange contracts, interest rate caps and interest 
rate swaps are mainly transacted with banks of high credit ratings assigned by international credit-rating 
agencies.

(ii) 

Financial assets that are past due but not impaired/partially impaired
The age analysis of trade debtors past due but not impaired/partially impaired is as follows:

Past due 0 to 3 months but not impaired 
Past due 3 to 6 months but not impaired 
Past due over 6 months and partially impaired 

Group

2008 
$’000 

2007
$’000

365,317 
108,138 
76,367 

241,917
22,675
37,816

549,822 

302,408

Trade debtors that are individually determined to be impaired at the balance sheet date relate to debtors 
that are in significant financial difficulties and have defaulted on payments.

Information relating to the provision for doubtful debts is given in Note 15.

Liquidity Risk
Prudent liquidity risk management requires the Group to maintain sufficient cash and marketable securities, 
internally generated cash flows, and the availability of funding resources through an adequate amount of 
committed credit facilities.  Group Treasury also maintains a mix of short-term money market borrowings and 
medium/long term loans to fund working capital requirements and capital expenditures/investments.  Due to the 
dynamic nature of business, the Group maintains flexibility in funding by ensuring that ample working capital lines 
are available at any one time.

194

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Information relating to the maturity profile of loans is given in Note 20.

The following table details the liquidity analysis for derivative financial instruments of the Group and the Company 
based on contractual undiscounted cash inflows/(outflows).

Group
2008
Gross-settled forward foreign exchange contracts
  -  Receipts 
  -  Payments 
Net-settled HSFO forward contracts 
  -  Receipts 
  -  Payments 

2007
Gross-settled forward foreign exchange contracts 
  -  Receipts 
  -  Payments 
Net-settled HSFO forward contracts 
  -  Receipts 
  -  Payments 

Company
2008
Gross-settled forward foreign exchange contracts 
  -  Receipts 
  -  Payments 

2007
Gross-settled forward foreign exchange contracts 
  -  Receipts 
  -  Payments 

Within 
one year 

 Within 
one to 
two years 

Within
 two to
five years

2,848,157 
(2,899,778) 

1,180,269 
(1,224,123) 

109,091
(116,213)

3,128 
(73,463) 

- 
(3,642) 

-
-

2,911,183 
(2,837,401) 

1,251,510 
(1,236,732) 

887,848
(905,494)

17,106 
(8,878) 

1,482 
(1,861) 

167
-

2,782,373 
(2,836,179) 

1,146,506 
(1,192,551) 

94,169
(101,915)

2,873,701 
(2,801,616) 

1,242,376 
(1,228,165) 

887,848
(905,494)

Capital Risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern 
and to maintain an optimal capital structure so as to maximise shareholder value.  In order to maintain or achieve 
an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, 
issue new shares, obtain new borrowings or sell assets to reduce borrowings.

Management monitors capital based on the Group net cash/(gearing).  The Group net cash/(gearing) is calculated 
as net cash/(borrowings) divided by total capital.  Net cash/(borrowings) are calculated as bank balances, deposits 
& cash (Note 17) less  total term loans (Note 20) plus bank overdrafts (Note 21).  Total capital refers to capital 
employed under equity.

Net cash/(borrowings) 

Total capital 

Group net cash/(gearing) 

Group

2008 
$’000 

2007
$’000

274,668 

(633,547)

6,748,507 

7,035,192

0.04x 

(0.09x)

Notes to the Financial Statements 

195

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

36.  Segment analysis

2008
Business segment

Offshore & Marine 
$’000 

Property 
$’000 

Infrastructure 
$’000 

Investments 
$’000 

Elimination 
$’000 

Total
$’000

Revenue
External sales 
Inter-segment sales 
Total 

Results
Operating profit 
Net investment income &

interest income 
Share of results of
  associated companies 
Profit before tax & 
  exceptional items 
Exceptional items 
Profit before taxation 
Taxation 
Profit for the year 

Attributable to: 
Shareholders of Company 
  Profit before exceptional items 
  Exceptional items 

Minority interests 

Other information
Segment assets 
Investment in 
  associated companies 
Total 

Segment liabilities 
Net tax provision & 
  deferred taxation 
Total 

8,569,185 
- 
8,569,185 

949,589 
2,543 
952,132 

2,232,549 
202,219 
2,434,768 

54,103 
61,683 
115,786 

-  11,805,426
(266,445) 
-
(266,445)  11,805,426

837,155 

325,655 

49,895 

(6,396) 

32,165 

1,238,474

61,868 

(31,152) 

(14,195) 

20,062 

(32,165) 

4,418

43,613 

70,852 

34,032 

205,460 

942,636 
(6,209) 
936,427 
(197,206) 
739,221 

365,355 
27,372 
392,727 
(52,089) 
340,638 

704,687 
(6,209) 
698,478 
40,743 
739,221 

156,528 
15,393 
171,921 
168,717 
340,638 

69,732 
1,404 
71,136 
1,250 
72,386 

63,078 
2,109 
65,187 
7,199 
72,386 

219,126 
(9,975) 
209,151 
(39,985) 
169,166 

172,360 
(9,975) 
162,385 
6,781 
169,166 

- 

- 
- 
- 
- 
- 

- 
- 
- 
- 
- 

353,957

1,596,849
12,592
1,609,441
(288,030)
1,321,411

1,096,653
1,318
1,097,971
223,440
1,321,411

6,478,191 

7,155,753 

1,961,737 

4,764,985 

(6,815,254)  13,545,412

96,097 
6,574,288 

1,833,132 
8,988,885 

180,203 
2,141,940 

1,091,599 
5,856,584 

3,201,031
(6,815,254)  16,746,443

- 

5,187,100 

5,160,816 

1,664,419 

4,075,623 

(6,815,254) 

9,272,704

256,611 
5,443,711 

388,034 
5,548,850 

48,401 
1,712,820 

32,186 
4,107,809 

- 
(6,815,254) 

725,232
9,997,936

Net assets 

1,130,577 

3,440,035 

429,120 

1,748,775 

Capital expenditure 
Depreciation & amortisation 

272,023 
95,102 

97,738 
11,061 

29,154 
32,369 

683 
546 

- 

- 
- 

6,748,507

399,598
139,078

Geographical segment

Far East & 
other ASEAN 
countries 
$’000 

Singapore 
$’000 

America 
$’000 

Other
countries 
$’000 

Elimination 
$’000 

Total
$’000

External sales 
Segment assets 
Capital expenditure 

8,180,820 
9,736,803 
313,825 

1,087,630 
3,351,406 
37,568 

1,688,961 
911,241 
26,067 

848,015 
495,615 
22,138 

-  11,805,426
(949,653)  13,545,412
399,598

- 

196

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2007
Business segment

Revenue
External sales 
Inter-segment sales 
Total 

Results
Operating profit 
Net investment income &

interest income 
Share of results of
  associated companies 
Profit before tax &
  exceptional items 
Exceptional items 
Profit before taxation 
Taxation 
Profit for the year 

Attributable to: 
Shareholders of Company 
  Profit before exceptional items 
  Exceptional items 

Minority interests 

Other information
Segment assets 
Investment in 
  associated companies 
Total 

Segment liabilities 
Net tax provision &
  deferred taxation 
Total 

Offshore & Marine 
$’000 

Property 
$’000 

Infrastructure 
$’000 

Investments 
$’000 

Elimination 
$’000 

Total
$’000

7,258,364 
- 
7,258,364 

1,834,886 
2,540 
1,837,426 

1,276,929 
131,762 
1,408,691 

61,071 
52,647 
113,718 

-  10,431,250
(186,949) 
-
(186,949)  10,431,250

570,007 

440,062 

10,942 

13,442 

16,196 

1,050,649

98,476 

(35,419) 

(4,784) 

(13,378) 

(16,196) 

28,699

31,662 

66,840 

44,940 

333,440 

700,145 
(81,011) 
619,134 
(141,756) 
477,378 

471,483 
810,121 
1,281,604 
(249,751) 
1,031,853 

51,098 
(165,616) 
(114,518) 
(18,065) 
(132,583) 

333,504 
1,439 
334,943 
(59,063) 
275,880 

522,323 
(81,011) 
441,312 
36,066 
477,378 

209,387 
350,543 
559,930 
471,923 
1,031,853 

26,410 
(165,866) 
(139,456) 
6,873 
(132,583) 

267,476 
1,439 
268,915 
6,965 
275,880 

- 

- 
- 
- 
- 
- 

- 
- 
- 
- 
- 

476,882

1,556,230
564,933
2,121,163
(468,635)
1,652,528

1,025,596
105,105
1,130,701
521,827
1,652,528

5,628,504 

6,991,699 

1,684,391 

4,654,856 

(6,302,862)  12,656,588

88,058 
5,716,562 

1,710,317 
8,702,016 

143,695 
1,828,086 

1,198,524 
5,853,380 

3,140,594
(6,302,862)  15,797,182

- 

4,200,951 

5,245,833 

1,412,510 

3,464,725 

(6,302,862) 

8,021,157

279,676 
4,480,627 

402,171 
5,648,004 

18,311 
1,430,821 

40,675 
3,505,400 

- 
(6,302,862) 

740,833
8,761,990

Net assets 

1,235,935 

3,054,012 

397,265 

2,347,980 

Capital expenditure 
Depreciation & amortisation 

193,983 
78,453 

25,005 
12,784 

36,542 
33,916 

379 
539 

- 

- 
- 

7,035,192

255,909
125,692

Geographical segment 

Far East & 
other ASEAN 
countries 
$’000 

Singapore 
$’000 

America 
$’000 

Other
countries 
$’000 

Elimination 
$’000 

Total
$’000

External sales 
Segment assets 
Capital expenditure 

7,473,211 
9,247,609 
180,930 

1,062,871 
2,929,664 
43,943 

1,323,231 
860,011 
19,008 

571,937 
486,880 
12,028 

-  10,431,250
(867,576)  12,656,588
255,909

- 

Notes to the Financial Statements 

197

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

36.  Segment analysis (continued)

Notes:
(a) 

Business Segment
The Group’s businesses are grouped into four divisions: Offshore & Marine, Property, Infrastructure and 
Investments.  The Investments division consists mainly of the Group’s investments in SPC, k1 Ventures Ltd and 
MobileOne Ltd.  These four divisions are the basis on which the Group reports its primary segment information.  
Pricing of inter-segment goods and services is at fair market value.  Segment assets and liabilities are those used 
in the operation of each division.

(b) 

Geographical Segment
The Group operates in about 35 countries.  Secondary segment information is provided by geographical segment 
which is based on the locations in which the Group’s activities are carried out.

37.  New accounting standards and recommended accounting practice

(a) 

At the date of authorisation of the financial statements, the following FRS, INT FRS and amendments to FRS that 
are relevant to the Group and the Company were issued but not yet effective:

FRS 1   (Revised) 
FRS 23 (Revised) 
FRS 108 

Presentation of Financial Statements
Borrowing Costs
Operating Segments

The directors anticipate that the adoption of the above FRS, INT FRS and amendments to FRS in future periods 
will not have a material impact on the financial statements of the Group and of the Company in the period of their 
initial adoption.

(b) 

RAP 11 Pre-Completion Contracts for the Sale of Development Property
The International Accounting Standards Board issued International Financial Reporting Interpretations Committee 
(“IFRIC”) Interpretation 15 in July 2008 which becomes effective for financial years beginning on or after 1 January 
2009.  When adopted, the interpretation is to be applied retrospectively.  It clarifies when and how revenue and 
related expenses from the sale of a real estate unit should be recognised if an agreement between a developer and 
a buyer is reached before construction of the real estate is completed.  Furthermore, the interpretation provides 
guidance on how to determine whether an agreement is within the scope of IAS 11 (Construction Contracts) or 
IAS 18 (Revenue).

RAP 11 is still applicable in Singapore as IFRIC Interpretation 15 has not been adopted by the Accounting 
Standards Council.  RAP 11 was issued by the Institute of Certified Public Accountants of Singapore in October 
2005.  In the RAP, it is mentioned that a property developer’s sale and purchase agreement is not a construction 
contract as defined in FRS 11 (Construction Contracts) and the percentage of completion (“POC”) method of 
recognising revenue, which is allowed under FRS 11 for construction contracts, may not be applicable for property 
developers.  The relevant standard for revenue recognition by property developers is FRS 18 (Revenue), which 
addresses revenue recognition generally for all types of entities.  However, there is no clear conclusion in FRS 
18 whether the POC method or the completion of construction (“COC”) method is more appropriate for property 
developers.

198

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
The Group uses the POC method for recognising revenue from partly completed residential projects which are 
held for sale.  Had the COC method been adopted, the impact on the financial statements of the Group will be as 
follows:

Decrease in opening revenue reserve 

2008 
$’000 

2007
$’000

(239,573) 

(82,054)

Increase/(decrease) in revenue recognised for the year 

569,010 

(717,910)

Increase/(decrease) in profit for the year 

53,015 

(157,519)

(Decrease)/increase in carrying value of property held for sale 
  Balance as at 1 January  
  Balance as at 31 December 

(Decrease)/increase in minority interests 
  Balance as at 1 January  
  Share of profit for the year 

38.  Significant subsidiaries and associated companies

(98,341) 
28,686 

(195,546)
(98,341)

(205,194) 
9,612 

(81,818)
(123,376)

Information relating to significant subsidiaries consolidated in these financial statements and significant associated 
companies whose results are equity accounted for is given in the following pages.

Notes to the Financial Statements 

199

 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
   
   
 
Significant Subsidiaries and Associated Companies

Gross 
Interest 
2008 
% 

Effective Equity 
Interest 

2008 
% 

2007 
% 

Cost of Investment 
2007
2008 
$’000
$’000 

Country of
Incorporation
/Operation 

Principal Activities

OFFSHORE & MARINE

Offshore

Subsidiaries

Keppel Offshore and Marine Ltd 

100 

100 

100 

801,720 

801,720 

Singapore 

Investment holding

Keppel FELS Ltd 

100 

100 

100 

AmFELS Offshore Ltd(5) 

100 

100 

100 

AzerFELS Pte Ltd 

BrasFELS SA(1a) 

60 

60 

60 

100 

100 

100 

Caspian Shipyard Company Ltd(2a) 

75 

45 

45 

Deepwater Technology Group Pte Ltd 

100 

100 

100 

FELS Offshore Pte Ltd 

100 

100 

100 

Fornost Ltd(1a) 

100 

100 

100 

FSTP Brasil Ltda(1a) 

75 

75 

75 

FSTP Pte Ltd 

75 

75 

75 

Hygrove Investments Ltd(5) 

100 

100 

100 

Keppel AmFELS Inc(4) 

100 

100 

100 

Keppel FELS Baltech Ltd(4) 

100 

100 

100 

Keppel FELS Brasil SA(1a) 

100 

100 

100 

Keppel FELS Offshore & Engineering  
Services Mumbai Pte Ltd(4)

100 

100 

100 

Keppel Norway A/S(1a) 

100 

100 

100 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

Singapore 

Construction, fabrication and repair of  
offshore production facilities and drilling  
rigs, power barges, specialised vessels  
and other offshore production facilities

# 

# 

# 

BVI/Mexico 

Holding of long-term investments

Singapore 

Holding of long-term investments

Brazil 

Engineering, construction and fabrication  
of platforms for the oil and gas sector,  
shipyard works and other general  
business activities

# 

Azerbaijan 

Construction and repair of offshore  
drilling rigs 

# 

Singapore 

Research and experimental development  
on deepwater engineering

# 

# 

Singapore  

Holding of long-term investments

HK 

Holding of long-term investments and  
provision of procurement services

# 

Brazil 

# 

Singapore 

Procurement of equipment and materials  
for the construction of offshore production  
facilities

Construction, fabrication and repair of  
offshore production facilities and  
drilling rigs

# 

# 

BVI/HK 

Investment holding

USA 

Construction and repair of offshore drilling 
rigs and offshore production facilities

# 

Bulgaria 

# 

Brazil 

Marine-related engineering and  
consultancy services

Engineering, construction and fabrication  
of platforms for the oil and gas sector,  
shipyard works and other general  
business activities

# 

India 

Provision of engineering services 

# 

Norway 

Construction and repair of offshore drilling  
rigs and offshore production facilities

200

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross 
Interest 
2008 
% 

Effective Equity 
Interest 

2008 
% 

2007 
% 

100 

100 

100 

Keppel Offshore & Marine Technology 
Centre Pte Ltd

Keppel Verolme BV(1a) 

100 

100 

100 

KV Enterprises BV(1a) 

100 

100 

100 

Marine & Offshore Protection &  
Preservation BV(1a) 

Offshore Technology Development  
Pte Ltd 

100 

100 

100 

100 

100 

100 

Regency Steel Japan Ltd(1a) 

51 

51 

51 

Willalpha Ltd(5) 

100 

100 

100 

Associated Companies

Asian Lift Pte Ltd 

50 

50 

50 

Keppel Kazakhstan LLP(4) 

50 

50 

50 

Marine

Subsidiaries

Keppel Shipyard Ltd 

100 

100 

100 

Keppel Philippines Marine Inc(1a) 

96 

96 

83 

Alpine Engineering Services Pte Ltd 

100 

100 

100 

Blastech Abrasives Pte Ltd 

100 

100 

100 

Keppel Cebu Shipyard Inc(1a) 

100 

96 

83 

Keppel Nantong Shipyard Company  
Limited(4)

100 

100 

100 

Keppel Singmarine Pte Ltd 

100 

100 

100 

Keppel Smit Towage Pte Ltd 

51 

51 

51 

KS Investments Pte Ltd 

100 

100 

100 

KSI Production Pte Ltd(5) 

100 

100 

100 

Maju Maritime Pte Ltd 

51 

51 

51 

Marine Technology Development  
Pte Ltd 

100 

100 

100 

Country of
Incorporation
/Operation 

Principal Activities

Cost of Investment 
2007
2008 
$’000
$’000 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

Singapore 

Research & development  

# 

Netherlands 

Construction and repair of offshore drilling  
rigs and shiprepairs

# 

# 

Netherlands 

Hiring and leasing of barges

Netherlands 

Chamber blasting services and painting 
and coating works

# 

Singapore 

Production of jacking systems and 
provision of jacking analysis

# 

Japan 

Sourcing, fabricating and supply of  
specialised steel components

# 

BVI/Vietnam 

Holding of long-term investments 

# 

Singapore 

Provision of heavy-lift equipment and  
related services

# 

Kazakhstan 

Construction and repair of offshore drilling  
units and structures and specialised  
vessels 

# 

Singapore 

Shiprepairing, shipbuilding and marine  
construction

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

Philippines 

Shipbuilding and repairing

Singapore  

Marine contracting

Singapore 

Marine contracting

Philippines 

Shipbuilding and repairing

China 

Shipbuilding and repairing 

Singapore 

Shipbuilding and repairing

Singapore 

Provision of towage services

Singapore 

Holding of long-term investments

BVI/Norway 

Holding of long-term investments

Singapore 

Provision of towage services

Singapore  

Provision of technical consultancy for ship 
design and engineering works 

Significant Subsidiaries and Associated Companies 

201

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Significant Subsidiaries and Associated Companies

Gross 
Interest 
2008 
% 

Effective Equity 
Interest 

2008 
% 

2007 
% 

Cost of Investment 
2007
2008 
$’000
$’000 

Country of
Incorporation
/Operation 

Principal Activities

Associated Companies

Arab Heavy Industries Public Joint  
Stock Company(1a)

33 

33 

33 

# 

# 

UAE 

Shipbuilding and repairing 

Consort Land Inc(1a) 

33+ 

32+ 

27+ 

54 

54 

Philippines 

Land holding company and power  
distributor

Kejora Resources Sdn Bhd(4) 

49 

25 

25 

# 

#  Malaysia 

Chartering tugs and other marine services

Subic Shipyard & Engineering Inc(1a) 

46+ 

44+ 

38+ 

3,020 

3,020 

Philippines  

Shipbuilding and repairing 

PROPERTY

Subsidiaries

Keppel Land Ltd(2) 

53 

53 

53 

931,432 

931,432 

Singapore 

Holding, management and  
investment company

K-Reit Asia(2) 

Evergro Properties Ltd(2) 

75 

85 

55 

45 

53 

38 

Keppel Bay Pte Ltd 

100+ 

86+ 

86+ 

Keppel Philippines Properties Inc(3) 

79+ 

55+ 

50+ 

# 

# 

626 

493 

Alpha Investment Partners Ltd(2) 

100  

Avenue Park Development(2) 

Bayfront Development Pte Ltd(2) 

BCH Office Investment Pte Ltd(2) 

Beijing Kingsley Property Development  
Co Ltd(2a)

Bintan Bay Resort Pte Ltd(2) 

Boulevard Development Pte Ltd(2) 

Bukit Timah Hill Development  
Pte Ltd(2)

Changzhou Fushi Housing  
Development Pte Ltd(4)

Chengdu Hillwest Development  
Co Ltd(2a)

Devonshire Development Pte Ltd(2) 

DL Properties Ltd(2) 

Dong Nai Waterfront City LLC(n)(2a) 

Double Peak Holdings Ltd(5) 

Doversdale Development Pte Ltd(2) 

Duit Investments Ltd(2a) 

53 

28 

53 

53 

53 

48 

53 

53 

53 

28 

53 

53 

53 

48 

53 

53 

52 

100 

100 

100 

90 

100 

100 

100 

45 

38 

100 

53 

53 

60 

65 

50 

100 

100 

100 

32 

34 

27 

53 

53 

53 

32 

34 

- 

53 

53 

53 

# 

# 

Singapore 

Real estate investment trust

Singapore 

Property investment and development

626 

Singapore 

Property development

493 

Philippines 

Investment holding

# 

# 

# 

# 

# 

# 

# 

# 

Singapore 

Fund management

Singapore 

Property development

Singapore 

Investment holding

Singapore 

Investment holding

China 

Property development 

Singapore 

Investment holding

Singapore 

Investment holding

Singapore 

Property development 

# 

China 

Property development 

# 

China 

Property development 

# 

# 

- 

# 

# 

# 

Singapore 

Property development

Singapore 

Property investment

Vietnam 

Property development

BVI/Singapore 

Investment holding

Singapore 

Investment holding

HK 

Investment holding 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

202

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross 
Interest 
2008 
% 

Effective Equity 
Interest 

2008 
% 

2007 
% 

Cost of Investment 
2007
2008 
$’000
$’000 

Country of
Incorporation
/Operation 

Principal Activities

Estella JV Co Ltd(1a) 

Evansville Investment Pte Ltd(2) 

International Centre(1a) 

Jiangyin Evergro Properties Co Ltd(4) 

KeplandeHub Ltd(2) 

55 

100 

79 

83 

100 

Keppel Al Numu Development Ltd(n)(2) 

51 

29 

53 

53 

40 

53 

27 

29 

53 

53 

37 

53 

- 

Keppel China Township Development  
Pte Ltd(2)

100 

53 

53 

Keppel Land (Hong Kong) Ltd(4) 

Keppel Land (Saigon Centre) Ltd(4) 

Keppel Land (Tower D) Pte Ltd(2) 

Keppel Land Financial Services  
Pte Ltd(2)

Keppel Land International Ltd(2) 

Keppel Land Properties Pte Ltd(2) 

Keppel Land Realty Pte Ltd(2) 

Keppel Land Watco I Co Ltd(4) 

Keppel Puravankara Development 
Pvt Ltd(4)

Keppel Thai Properties Public  
Co Ltd(2a)

Keppel Township Development  
(Shenyang) Co Ltd(2a)

100 

100 

100 

100 

100 

100 

100 

68 

51 

53 

53 

53 

53 

53 

53 

53 

36 

27 

53 

53 

53 

53 

53 

53 

53 

36 

27 

45 

24 

24 

100 

53 

53 

K-Reit Asia Investment Pte Ltd(2) 

K-Reit Asia Management Ltd(2) 

100 

100 

K-Reit Asia Property Management Ltd(2)  100 

Le Vision Pte Ltd(2) 

Merryfield Investment Pte Ltd(2) 

Ocean & Capital Properties Pte Ltd(2) 

Ocean Properties Pte Ltd(2) 

OIL (Asia) Pte Ltd(2) 

Pasir Panjang Realty Pte Ltd(2) 

Pembury Properties Ltd(5) 

PT Kepland Investama(1a) 

PT Keppel Land(2a) 

100 

100 

100 

76 

100 

100 

100 

100 

100 

53 

53 

53 

53 

53 

53 

40 

53 

53 

53 

53 

53 

53 

53 

53 

53 

53 

53 

40 

53 

53 

53 

53 

53 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

- 

Vietnam 

Property development

Singapore 

Property development

Vietnam 

Property investment

China 

Property development

Singapore 

Investment holding

Singapore/ 
Saudi Arabia 

Property development 

# 

Singapore 

Investment holding 

# 

# 

# 

# 

# 

# 

# 

# 

# 

HK 

HK 

Investment holding

Investment holding

Singapore 

Property development and investment

Singapore 

Financial services 

Singapore 

Property services

Singapore 

Investment holding

Singapore  

Property development and investment

Vietnam 

Property investment and development

India 

Property development  

# 

Thailand 

Property development and investment 

# 

China 

Property development 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

Singapore 

Investment holding

Singapore 

Property fund management

Singapore 

Property management services

Singapore 

Investment holding

Singapore  

Investment holding

Singapore 

Property and investment holding

Singapore 

Property investment

Singapore 

Investment holding

Singapore 

Investment holding

BVI/Singapore 

Investment holding

Indonesia 

Property investment and development

Indonesia 

Property services and development  
and investment

Significant Subsidiaries and Associated Companies 

203

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Significant Subsidiaries and Associated Companies

Gross 
Interest 
2008 
% 

Effective Equity 
Interest 

2008 
% 

2007 
% 

Cost of Investment 
2007
2008 
$’000
$’000 

Country of
Incorporation
/Operation 

Principal Activities

PT Mitra Sindo Makmur(1a) 

PT Mitra Sindo Sukses(1a) 

PT Ria Bintan(1a) 

PT Sentral Supel Perkasa(2a) 

PT Sentral Tanjungan Perkasa(2a) 

PT Straits-CM Village(1a) 

Quang Ba Royal Park JV Co(4) 

Red Vibrant Investments Ltd(5) 

Riviera Core JV LLC(n)(2a) 

Riviera Point LLC(n)(2a) 

Saigon Centre Holdings Pte Ltd(2) 

Saigon Centre Investment Ltd(5) 

Saigon Riviera JV Co Ltd(2a) 

Saigon Sports City(2a) 

Shanghai Floraville Land Co Ltd(2a) 

Shanghai Hongda Property  
Development Co Ltd(2a)

Shanghai Merryfield Land Co Ltd(2a) 

Shanghai Minghong Property  
Co Ltd(2a) 

Shanghai Pasir Panjang Land  
Co Ltd(2a)

Sherwood Development Pte Ltd(2) 

Spring City Resort Pte Ltd(2) 

Straits Greenfield Ltd(4) 

Straits Properties Ltd(2) 

Straits Property Investments Pte Ltd(2) 

100 

Straits-CM Village Hotel Pte Ltd(2) 

Straits-KMP (HK) Ltd(4) 

Third Dragon Development Pte Ltd(2) 

Tianjin Merryfield Property  
Development Co Ltd(2a)

Waterville Investment Pte Ltd(2) 

Wiseland Investment Myanmar Ltd(4) 

85 

51 

100 

100 

100 

100 

51 

51 

100 

80 

80 

100 

70 

100 

60 

75 

100 

100 

90 

100 

99 

100 

99 

99 

27 

27 

24 

42 

42 

21 

34 

53 

32 

40 

53 

53 

48 

48 

52 

53 

52 

52 

27 

27 

24 

42 

42 

21 

34 

53 

- 

- 

53 

53 

48 

48 

52 

53 

52 

52 

99 

52 

52 

100 

100 

100 

100 

53 

53 

53 

53 

53 

21 

27 

45 

53 

53 

53 

53 

53 

53 

53 

53 

21 

27 

38 

53 

53 

53 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

- 

- 

# 

# 

# 

# 

# 

# 

# 

# 

Indonesia 

Property development and investment

Indonesia 

Property development and investment

Indonesia  

Golf course ownership and operation

Indonesia 

Property investment and development

Indonesia 

Property development

Indonesia 

Hotel ownership and operations

Vietnam 

Property investment

BVI/Vietnam 

Investment holding

Vietnam 

Property development

Vietnam 

Property investment

Singapore 

Investment holding

BVI/HK 

Investment holding

Vietnam 

Property development

Vietnam 

Property development

China 

China 

China 

China 

Property development

Property development 

Property development

Property development 

# 

China 

Property development 

# 

# 

Singapore 

Property development

Singapore 

Investment holding

#  Myanmar 

Hotel ownership and operations

# 

# 

# 

# 

# 

# 

Singapore 

Property development and investment

Singapore 

Investment holding

Singapore 

Investment holding

HK 

Investment holding

Singapore 

Investment holding 

China 

Property development 

# 

Singapore 

Investment holding

#  Myanmar 

Hotel ownership and operations

FELS Property Holdings Pte Ltd 

100 

100 

100 

70,214 

70,214 

Singapore  

Investment holding

Brightway Property Pte Ltd 

100 

100 

100 

# 

# 

Singapore 

Property investment

204

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
Gross 
Interest 
2008 
% 

Effective Equity 
Interest 

2008 
% 

2007 
% 

Cost of Investment 
2007
2008 
$’000
$’000 

Country of
Incorporation
/Operation 

Principal Activities

FELS SES International Pte Ltd 

100+ 

85+ 

85+ 

Petro Tower Ltd(4) 

Alpha Real Estate Securities Fund 

76 

98 

64 

98 

64 

98 

7 

# 

# 

7 

# 

# 

Singapore 

Investment holding

Vietnam 

Property investment

Singapore 

Investment holding

Esqin Pte Ltd 

100 

100 

100 

11,001 

11,001 

Singapore 

Investment holding

Harbourfront One Pte Ltd 

Keppel Group Eco-City Investments  
Pte Ltd(n)

70 

65 

100 

100 

65 

- 

# 

20 

# 

- 

Singapore 

Property development

Singapore 

Investment holding 

Keppel (USA) Inc(5) 

100 

100 

100 

9,702 

9,702 

USA 

Investment holding

Keppel Houston Group LLC(5) 

100 

86 

86 

Keppel Kunming Resort Ltd(4) 

100 

100 

100 

# 

4 

# 

4 

USA 

HK 

Property investment

Property investment

Keppel Point Pte Ltd 

100+ 

86+ 

86+  122,785 

122,785 

Singapore  

Property development and investment

Keppel Real Estate Investment  
Pte Ltd

Associated Companies

Asia No. 1 Property Fund Ltd(1a) 

Asia Real Estate Fund Management  
Ltd(2)

BFC Development Pte Ltd(2) 

Bugis City Holdings Pte Ltd(2) 

Central Boulevard Development  
Pte Ltd(2)

China World Investments Pte Ltd(2) 

CityOne Development (Wuxi)  
Co Ltd(2a)

CityOne Township Development  
Pte Ltd(2)

EM Services Pte Ltd(4) 

Harbourfront Three Pte Ltd(4) 

Harbourfront Two Pte Ltd(4) 

Keppel Magus Development Pvt Ltd(4) 

Kingsdale Development Pte Ltd(2) 

One Raffles Quay Pte Ltd(2) 

Parksville Development Pte Ltd(2) 

PT Pantai Indah Tateli(2a) 

PT Pulomas Gemala Misori(4) 

PT Purimas Straits Resort(4) 

100 

100 

100 

50,000 

50,000 

Singapore 

Investment holding 

10 

50 

33 

31 

33 

50 

50 

5 

27 

17 

16 

17 

27 

27 

5 

27 

17 

16 

17 

27 

27 

50 

27 

27 

25 

39 

39 

38 

50 

33 

50 

50 

25 

25 

13 

33 

33 

20 

27 

17 

27 

27 

13 

13 

13 

33 

33 

20 

27 

17 

27 

27 

13 

13 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

Guernsey 

Property investment

Singapore 

Fund management 

Singapore 

Property development

Singapore 

Under liquidation

Singapore 

Property development 

Singapore 

Investment holding

China 

Property development 

# 

Singapore 

Investment holding 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

Singapore 

Property management

Singapore 

Property development

Singapore 

Property development

India 

Property development

Singapore 

Investment holding

Singapore 

Property development

Singapore 

Property investment

Indonesia 

Property development

Indonesia 

Development of holiday resort

Indonesia 

Development of holiday resort

Significant Subsidiaries and Associated Companies 

205

 
 
 
 
 
 
 
 
 
 
 
 
Significant Subsidiaries and Associated Companies

Gross 
Interest 
2008 
% 

Effective Equity 
Interest 

2008 
% 

2007 
% 

Cost of Investment 
2007
2008 
$’000
$’000 

Country of
Incorporation
/Operation 

Principal Activities

20 

40 

25 

25 

11 

21 

13 

13 

11 

21 

13 

13 

# 

# 

# 

# 

# 

Indonesia 

Property investment

#  Malaysia 

Property investment 

# 

# 

Singapore  

Investment holding

Singapore 

Investment holding 

PT Purosani Sri Persada(4) 

Renown Property Holdings (M)  
Sdn Bhd(2a)

SAFE Enterprises Pte Ltd(4) 

Suzhou Property Development  
Pte Ltd(4)

INFRASTRUCTURE

Power Generation

Subsidiaries

Keppel Energy Pte Ltd 

100 

100 

100 

330,914 

280,914 

Singapore 

Investment holding

Corporacion Electrica  
Nicaraguense SA(1a)

100 

100 

100 

Dawley Developments Ltd(5) 

100 

100 

100 

Keppel Electric Pte Ltd 

100 

100 

100 

Keppel Gas Pte Ltd 

100 

100 

100 

Keppel Merlimau Cogen Pte Ltd 

100 

100 

100 

New Energy Industrial Ltd(5) 

100 

100 

100 

Okachi Investments Ltd(5) 

100 

100 

100 

Rodeo Power Pte Ltd 

100 

100 

100 

Termoguayas Generation SA(1a) 

100 

100 

100 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

Nicaragua 

Commercial power generation 

# 

# 

# 

# 

# 

# 

# 

# 

BVI/HK 

Holding of long-term investments

Singapore 

Electricity, energy and power supply  
and investment holding and general  
wholesale trade

Singapore 

Purchase and sale of gaseous fuels

Singapore  

Holding of long-term investments,  
generation and supply of electricity

BVI/Ecuador 

Holding of long-term investments

BVI/HK 

Holding of long-term investments

Singapore 

Holding of long-term investments

Ecuador 

Commercial power generation

Environmental Engineering

Subsidiaries

Keppel Integrated Engineering Ltd 

100 

100 

100 

171,574 

163,574 

Singapore 

Investment holding

Keppel Seghers Engineering  
Singapore Pte Ltd 

100 

100 

100 

Brixworth Group Ltd(5) 

100 

100 

100 

FELS Cranes Pte Ltd 

100 

100 

100 

Keppel FMO Pte Ltd 

100 

100 

100 

Keppel Prince Engineering Pty Ltd(2a) 

100 

100 

100 

# 

# 

# 

# 

# 

# 

Singapore 

Fabrication of steel structures, mechanical 
and electrical works and engineering  
services specialising in treatment plants

# 

# 

BVI 

Trading in industrial goods

Singapore 

Fabrication of heavy cranes and provision  
of marine-related equipment

# 

Singapore 

Construction, project and facilities  
management and operational  
maintenance of industrial and commercial  
complexes

# 

Australia 

Metal fabrication

206

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross 
Interest 
2008 
% 

Effective Equity 
Interest 

2008 
% 

2007 
% 

Cost of Investment 
2007
2008 
$’000
$’000 

Country of
Incorporation
/Operation 

Principal Activities

Keppel Sea Scan Pte Ltd 

100 

100 

100 

Keppel Seghers Belgium NV(1a) 

100 

100 

100 

Keppel Seghers Holdings Pte Ltd 

100 

100 

100 

Keppel Seghers Hong Kong Ltd(1a) 

100 

100 

100 

Keppel Seghers NeWater  
Development Co Pte Ltd 

100 

100 

100 

Keppel Seghers Tuas Waste-to-Energy   100 
Plant Pte Ltd 

100 

100 

Associated Companies

GE Keppel Energy Services Pte Ltd(2) 

50 

50 

50 

Tianjin Eco-City Energy Investment &  
Construction Co Ltd(n) 

20 

20 

- 

# 

# 

# 

# 

# 

# 

# 

# 

# 

Singapore 

# 

Belgium 

Trading and installation of hardware,  
industrial, marine and building-related  
products, leasing and provision  
of services

Provider of services and solutions to  
the environmental industry related to  
solid waste, waste-water and  
sludge management

# 

# 

Singapore 

Investment holding

HK 

Engineering contracting and  
investment holding

# 

Singapore 

Collection, purification and distribution 
of water

# 

Singapore 

Collection and treatment of solid waste 
to generate green energy

# 

Singapore 

Precision engineering, repair, services  
and agencies

- 

Singapore 

Investment and implementation of energy 
and utilities related infrastructure

Network & Logistics

Subsidiaries

Keppel Telecommunications &  
Transportation Ltd(2) 

DataOne Asia Pte Ltd(2) 

ECHO Broadband Gmbh(2a) 

Keppel Communications Pte Ltd(2) 

100 

100 

100 

80 

80 

80 

80 

80 

80 

Keppel Logistics (Foshan) Ltd(4) 

70 

56 

56 

Keppel Logistics Pte Ltd(2) 

Keppel Telecoms Pte Ltd(2) 

100 

100 

80 

80 

80 

80 

Transware Distribution Services 
Pte Ltd(2)

50 

40 

40 

Trisilco Folec Sdn Bhd(2a) 

55 

44 

44 

80 

80 

80 

397,647 

397,647 

Singapore 

Investment, management and 
holding company

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

Singapore 

Investment holding

Germany 

Broadband network services

Singapore 

Trading and provision of communications  
systems and accessories

# 

China 

Shipping operations, warehousing  
and distribution

# 

# 

Singapore 

Warehousing and distribution

Singapore 

Telecommunications services and  
investment holding

# 

Singapore 

Warehousing and distribution  

#  Malaysia 

Trading and provision of communications  
systems and accessories

Significant Subsidiaries and Associated Companies 

207

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Significant Subsidiaries and Associated Companies

Gross 
Interest 
2008 
% 

Effective Equity 
Interest 

2008 
% 

2007 
% 

Cost of Investment 
2007
2008 
$’000
$’000 

Country of
Incorporation
/Operation 

Principal Activities

Associated Companies

Advanced Research Group Co Ltd(2a) 

Asia Airfreight Terminal Company Ltd(4) 

Citadel 100 Datacenters Ltd  
(formerly Premier Data Centres Ltd)(4)

Computer Generated Solutions Inc(4) 

Radiance Communications Pte Ltd(2) 

45 

10 

50 

21 

50 

36 

8 

40 

17 

40 

36 

8 

40 

17 

40 

SVOA Public Company Ltd(2a) 

32 

26 

26 

Trisilco Radiance Communications  
Sdn Bhd(2a) 

40 

32 

32 

Wuhu Annto Logistics Company Ltd(4) 

35 

28 

28 

INVESTMENTS

Subsidiaries

Keppel Philippines Holdings Inc(3) 

54+ 

54+ 

53+ 

China Canton Investments Ltd 

k1 eBiz Holdings Pte Ltd 

75 

- 

75 

56 

- 

100 

# 

# 

# 

# 

# 

# 

# 

# 

- 

# 

- 

# 

# 

# 

# 

# 

Thailand 

IT publication and business information

HK 

Operation of air cargo handling terminal

Ireland  

Provision of internet service exchange 

USA 

IT consulting and outsourcing provider

Singapore 

Distribution and maintenance of  
communications equipment and systems

# 

Thailand 

#  Malaysia 

Distribution of IT products and  
telecommunications services

Sales, installation and maintenance of 
telecommunications systems, equipment  
and accessories

# 

China 

Transportation, warehousing and  
distribution

- 

# 

Philippines 

Investment holding

Singapore 

Investment holding

1,814 

Singapore 

Strike-off

Kep Holdings Ltd(5) 

100+ 

100+ 

100+ 

10,480 

10,480 

BVI/HK 

Investment company

Kephinance Investment (Mauritius)  
Pte Ltd(4)

100 

100 

100 

# 

#  Mauritius 

Investment holding 

Kephinance Investment Pte Ltd 

100 

100 

100 

90,000 

90,000 

Singapore 

Investment holding

Kepital Management Ltd(4) 

100 

100 

100 

# 

# 

HK 

Investment company

Kepmount Shipping (Pte) Ltd 

100 

100 

100 

4,000 

4,000 

Singapore 

Investment holding

Keppel FELS Invest (HK) Ltd(4) 

100 

100 

100 

Keppel Investment Ltd 

100 

100 

100 

# 

# 

# 

# 

HK 

Investment company

Singapore 

Investment company

Keppel Oil & Gas Services Pte Ltd 

100 

100 

100 

116,609 

116,609 

Singapore 

Investment holding

Kepventure Pte Ltd 

100 

100 

100 

16,160 

16,160 

Singapore 

Investment holding

KI Investments (HK) Ltd(4) 

100 

100 

100 

KV Management Pte Ltd 

100 

100 

100 

Travelmore Pte Ltd 

The Vietnam Investment Fund  
(Singapore) Ltd

100 

100 

100 

56 

56 

51 

# 

250 

265 

# 

# 

HK 

Investment company

250 

Singapore 

Fund management

265 

Singapore 

Travel agency

# 

Singapore 

Venture fund investment 

208

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross 
Interest 
2008 
% 

Effective Equity 
Interest 

2008 
% 

2007 
% 

Cost of Investment 
2007
2008 
$’000
$’000 

Country of
Incorporation
/Operation 

Principal Activities

Associated Companies

Singapore Petroleum Company Ltd 

45 

45 

45 

# 

# 

# 

# 

Singapore 

Petroleum refining, marketing,   
distribution and trading of crude oil  
and petroleum products

# 

# 

Singapore 

Investment holding

Singapore 

Telecommunications services

36 

20 

36 

16 

36 

16 

k1 Ventures Ltd 

MobileOne Ltd(2) 

Total

Subsidiaries 

Associated Companies 

  3,135,903  3,079,697

3,074 

3,074

Notes:
(i) 

All the companies are audited by Deloitte & Touche LLP, Singapore except for the following:
(1a) 
(2) 
(2a) 
(3) 
(4) 
(5) 

Audited by overseas practice of Deloitte & Touche LLP;
Audited by Ernst & Young LLP, Singapore;
Audited by overseas practice of Ernst & Young LLP;
Audited by SyCip Gorres Velayo & Co, Philippines;
Audited by other firms of auditors (not significant associated companies and foreign subsidiaries); and
Not required to be audited by law in the country of incorporation and companies disposed, liquidated and struck off.

In accordance to Rule 716 of The Singapore Exchange Securities Trading Limited – Listing Rules, the Audit Committee and Board of Directors of the 
Company confirmed that they are satisfied that the appointment of different auditors for its subsidiaries and significant associated companies would not 
compromise the standard and effectiveness of the audit of the Company.

(ii) 

+ 

The shareholdings of these companies are held jointly with other subsidiaries.

(iii) 

# 

The shareholdings of these companies are held by subsidiaries of Keppel Corporation Limited.

(iv) 

(n)  These companies were incorporated during the financial year.

(v) 

The subsidiaries’ place of business is the same as its country of incorporation, unless otherwise specified.

(vi) 

Abbreviations:
British Virgin Islands (BVI) 
Hong Kong (HK) 

United Arab Emirates (UAE)
United States of America (USA)

Significant Subsidiaries and Associated Companies 

209

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement by Directors
For the financial year ended 31 December 2008

We, CHOO CHIAU BENG and TEO SOON HOE being two Directors of Keppel Corporation Limited, do hereby state that in the 
opinion of the Directors, the financial statements of the Group and the balance sheet and statement of changes in equity of the 
Company as set out on pages 150 to 209 are drawn up so as to give a true and fair view of the state of affairs of the Group 
and of the Company as at 31 December 2008, and of the results, changes in equity and cash flows of the Group and changes 
in equity of the Company for the financial year then ended and at the date of this statement, there are reasonable grounds to 
believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Board

Choo Chiau Beng 
Chief Executive Officer 

Singapore, 2 March 2009

Teo Soon Hoe
Group Finance Director

210

Keppel Corporation Limited 
Report to Shareholders 2008

Independent Auditors’ Report
to the Members of Keppel Corporation Limited
For the financial year ended 31 December 2008

We have audited the accompanying financial statements of Keppel Corporation Limited (“Company”) and its subsidiaries 
(“Group”) which comprise the balance sheets of the Group and the Company as at 31 December 2008, the profit and loss 
account, statement of changes in equity and cash flow statement of the Group and the statement of changes in equity of the 
Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on 
pages 150 to 209.

Management’s Responsibility
Management is responsible for the preparation and fair presentation of these financial statements in accordance with 
the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards.  This 
responsibility includes: devising and maintaining a system of internal accounting controls sufficient to provide a reasonable 
assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly 
authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss account and 
balance sheet and to maintain accountability of assets; selecting and applying appropriate accounting policies; and making 
accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.  We conducted our audit in 
accordance with Singapore Standards on Auditing.  Those standards require that we comply with ethical requirements and plan 
and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial 
statements.  The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material 
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers 
internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit 
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness 
of the entity’s internal control.  An audit also includes evaluating the appropriateness of accounting policies used and the 
reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial 
statements.  We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 
opinion.

Opinion
In our opinion,

(a) 

the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the 
Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting 
Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 
2008 and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the 
year ended on that date; and

(b) 

the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated 
in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

DELOITTE & TOUCHE LLP
Public Accountants and Certified Public Accountants
Singapore

Chaly Mah Chee Kheong
Partner
Appointed on 28 April 2006

2 March 2009

Independent Auditors’ Report 

211

Interested Person Transactions

During the financial year, the following interested person transactions were entered into by the Group:

Name of interested person 

Transaction for the Sale of Goods and Services
Keppel Corporation Limited Directors and their associates 
Gas Supply Pte Ltd 
PSA Corporation Group 
Mount Faber Leisure Group 
SembCorp Industries Group 
SembCorp Marine Group 
Singapore Airlines Group 
Singapore Power/PowerSeraya/Senoko Power/Tuas Power Group 
Singapore Telecommunications Group 

Transaction for the Purchase of Goods and Services
CapitaLand Group 
Gas Supply Pte Ltd 
Mapletree Investments Pte Ltd 

Total Interested Person Transactions 

Aggregate value of all
interested person 
transactions during 
the financial year 
under review (excluding 
transactions less than 
$100,000 and transactions 
conducted under 
shareholders’ mandate 
pursuant to Rule 920) 

Aggregate value of all
interested person
transactions conducted
under a shareholders’
mandate pursuant
to Rule 920 of
the SGX Listing Manual
(excluding transactions
less than $100,000)

2008 
$’000 

2007 
$’000 

2008 
$’000 

2007
$’000

- 
- 
- 
- 
- 
- 
- 
- 
- 

- 
- 
- 

- 

17,447 
- 
- 
- 
- 
- 
- 
- 
- 

- 
- 
- 

- -
61,550 
4,379 
145 
110 -
1,073 
15,900 
25,462 
- 

4,532 -
90,000 
2,478 

13,140
5,150
144

2,273
17,350
28,410
4,633

380,000
407

17,447 

205,629 

451,507

Save for the interested person transactions disclosed above, there were no other material contracts entered into by the Company 
and its subsidiaries involving the interests of its chief executive officer, directors or controlling shareholders, which are either still 
subsisting at the end of the financial year or, if not then subsisting, entered into since the end of the previous financial year.

212

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors and Key Executives

Directors

Lim Chee Onn, 64
Non-Executive Chairman 1
Bachelor of Science (First Class Honours) in Naval Architecture, Glasgow University; Masters in Public Administration, 
Edward S. Mason Fellow, Kennedy School, Harvard University; Doctor in Engineering (Honorary), Glasgow University.  

Executive Chairman of Keppel Corporation Limited from January 2000 to 31 December 2008 (Director since 1983; date of last 
re-election: 25 April 2008) and Chairman of the Executive Committee. He is also Chairman of Keppel Land Limited, Singapore-
Suzhou Township Development Pte Ltd and Singapore Tianjin Eco-city Investment Holdings Pte Ltd; and a board member of 
the Monetary Authority of Singapore and Business China. Mr Lim is also the Honorary Chairman of the National Heritage Board, 
Chairman of the Advisory Board, Harvard Singapore Foundation and Alternate Member, Council of Presidential Advisors.

Mr Lim started his career in the Civil Service. He was Deputy Secretary, Ministry of Communications until elected as Member of 
Parliament in July 1977. He served as Political Secretary, Ministry of Science and Technology from August 1978 to September 
1980. Mr Lim was Secretary-General, National Trades Union Congress from May 1979 to June 1983 and concurrently Minister 
without Portfolio, Prime Minister’s Office from September 1980 to July 1983, and remained as Member of Parliament until 
December 1992.

In addition, Mr Lim is Deputy Chairman of the Seoul International Business Advisory Council. He is Economic Advisor to Jiangsu 
Provincial Government, PRC, and Consultant to the People’s Government of Yunnan Province, PRC. He is a member of the 
INSEAD Singapore International Council, member, Board of Trustees, Asia Business Council, member of the Board of Trustees, 
The Conference Board; and Counsellor, The Conference Board’s Global Advisory Council on Economic Issues. Mr Lim is also 
Chairman, Advisory Board, SKB Institute of Financial Economics, Singapore Management University, and a member of the 
Governing Board, Lee Kuan Yew School of Public Policy, National University of Singapore.

Conferred Distinguished Service Order by HE President, Republic of Singapore and Commander, Order of the Crown, 
by HM King Albert II, Kingdom of Belgium.

Choo Chiau Beng, 61
Chief Executive Officer 2
Bachelor of Science (First Class Honours), University of Newcastle upon Tyne (awarded the Colombo Plan Scholarship to study 
Naval Architecture); Master of Science in Naval Architecture, University of Newcastle upon Tyne; attended the Programme for 
Management Development in Harvard Business School in 1982 and is a Member of the Wharton Society of Fellows, University 
of Pennsylvania.

Appointed as Chief Executive Officer on 1 January 2009 (Director since 1983; date of last re-election: 28 April 2006). Member 
of the Executive and Board Safety Committees.

Mr Choo is the Chairman of Keppel Offshore & Marine Limited and is also the Chairman of Singapore Petroleum Company 
Limited, Singapore Refining Company Pte Ltd and SMRT Corporation Ltd. Mr Choo sits on the boards of Keppel Land Limited 
and k1 Ventures Limited.   

Mr Choo started his career with Keppel Shipyard as a Ship Repair Management Trainee in 1971 and was appointed Executive 
Director of Singapore Slipway in 1973. In 1975, when Keppel set up its shipyard in the Philippines, he was posted there to 
assume the position of Executive Vice President and CEO of the company for a period of four years. He joined Keppel FELS 
(formerly known as Far East Levingston Shipbuilding Ltd) in 1980 as Assistant General Manager and was appointed as director 
to the board of the company. He was promoted to Deputy Managing Director in November 1981 and to Managing Director in 
March 1983. In 1994, he was appointed Deputy Chairman and in 1997, Chairman of the company.

He is a member of the Board of Energy Studies Institute and Nanyang Business School Advisory Board. He is also Chairman of 
Det Norske Veritas South East Asia Committee, board and council member of the American Bureau of Shipping and member 
of the American Bureau of Shipping’s Southeast Asia Regional Committee and Special Committee on Mobile Offshore Drilling 
Units. He is Singapore’s Non-Resident Ambassador to Brazil.

1  On 22 December 2008, the Company announced that Mr Lim Chee Onn would relinquish his role as Chief Executives Officer with effect from 1 January 2009, 

but would continue to serve as Chairman of the Company.

2  On 22 December 2008, the Company announced that Mr Choo Chiau Beng would assume the role of Chief Executive Officer of the Company with effect from 

1 January 2009.

Directors and Key Executives 

213

 
 
Directors and Key Executives

Tony Chew Leong-Chee, 62
Lead Independent Director
Trained as an agronomist at Ko Plantations Berhad and Serdang Agricultural College in Malaysia from 1966 to 1970.

Appointed to the Board in 2002 (date of last re-election: 25 April 2008). An independent and non-executive Director, he is the 
Company’s Lead Independent Director and member of the Audit Committee and Executive Committee.

He is Executive Chairman of Asia Resource Corporation and Chairman of KFC Vietnam. He also serves on the boards of 
Macondray Corporation, Orangestar Investment Holdings Pte Ltd, SBF Holdings Pte Ltd and SBF-PICO Events Pte Ltd, 
amongst others.

From 1966, he worked at Sri Gading Estates in Malaysia, Guthrie Trading in Singapore, and the Sampoerna Group of Indonesia. 
In 1975 he ventured out, becoming an entrepreneur, and built a group of companies in the region which became Asia Resource 
Corporation.

He plays an active role in promoting regional business, having served on the Trade Development Board, Economic Review 
Sub-Committee for Entrepreneurship and Internationalisation, Regional Business Forum, and the GPC Resource Panel for 
Finance, Trade and Industry. He is presently Chairman of Singapore Business Federation as well as Governing Board of 
Duke-NUS Graduate Medical School Singapore. He is also Governing Board member of the Economic Research Institutue for 
ASEAN & East Asia, the Chinese Development Assistance Council Board of Trustees, and Advisor to the Singapore Institute of 
International Affairs. He is a Public Service Award recipient.

Lim Hock San, 62
Independent Director
Bachelor of Accountancy, University of Singapore; Master of Science, MIT Sloan School of Management; Advanced 
Management Program, Harvard Business School; Fellow, Chartered Institute of Management Accountants (UK).

Appointed to the Board in 1989 (date of last re-election: 27 April 2007), he is an independent and non-executive Director. 
Mr Lim is also the Chairman of the Audit Committee and member of the Executive Committee and Board Risk Committee. 

Mr Lim is the CEO of United Industrial Corporation Ltd and Singapore Land Ltd. He is also the Chairman of Gallant Venture Ltd, 
the National Council on Problem Gambling and Ascendas Pte Ltd,  and a board member of Interra Resources Limited. 
Mr Lim previously served as the Director-General of Civil Aviation (1980-1992) and was past President of the Institute of 
Certified Public Accountants of Singapore.

Sven Bang Ullring, 73
Independent Director
Master of Science, Swiss Federal Institute of Technology (ETH), Zurich.

Appointed to the Board in 2000 (date of last re-election: 25 April 2008). An independent and non-executive Director and 
Chairman of the Nominating Committee and the Remuneration Committee and member of the Board Safety Committee.

Mr Ullring was President and Chairman of the Executive Board of Det Norske Veritas, Oslo from 1985-2000 and President and 
CEO of NORCONSULT, Oslo from 1981-1985. He worked for SKANSKA, Malmo, Sweden from 1962-1981 in Africa, Asia, 
Europe and the Americas; from 1972-1981 he was Director of the International Department.

Mr Ullring is the Chairman of the Board of The Fridtjof Nansen Institute, Oslo, Norway, Chairman of the Maritime and Port 
Authority of Singapore’s Third Maritime and Research and Development Advisory Panel and Chairman of the Board of 
Transparency International (Norway).

214

Keppel Corporation Limited 
Report to Shareholders 2008

Tsao Yuan Mrs Lee Soo Ann, 53
Independent Director
PhD in Economics, Harvard University; President Scholar with a First Class Honours degree in Economics and Statistics, 
University of Singapore.

Appointed to the Board in 2002 (date of last re-election: 28 April 2006). An independent and non-executive Director and 
member of the Nominating Committee, the Remuneration Committee and the Board Safety Committee.

Dr Lee Tsao Yuan is an Executive Coach and Coach Practice Leader with SDC Consulting, a privately-owned Singapore-based 
human resources development training, consultancy and coaching company.

An economist by training, Dr Lee has extensive experience in public policy both in Singapore and internationally. She was 
with the Institute of Policy Studies (IPS), a public policy think-tank for 10 years, as Deputy Director (1990-1997), and Director 
(1997-November 2000). Prior to her joining IPS, she taught at the Department of Economics and Statistics, National University 
of Singapore (1982-1989).

She served as a Nominated Member of Parliament in Singapore for two terms (1994-1996 and 1997-1999).

Dr Lee sits on the boards of the Oversea-Chinese Banking Corporation Ltd and the Singapore Land Authority.

Oon Kum Loon (Mrs), 58
Independent Director
Bachelor of Business Administration (Honours) from the University of Singapore.

Appointed to the Board in 2004 (date of last re-election: 27 April 2007). An independent and non-executive Director, she is the 
Chairperson of the Board Risk Committee and member of the Audit, Executive, Nominating and Remuneration Committees. 

Mrs Oon is a veteran banker with about 30 years of extensive experience, having held a number of management and executive 
positions with the DBS Group. She was the Chief Financial Officer (CFO) of the bank until September 2003.

Prior to serving as CFO, she was the Managing Director & Head of Group Risk Management, responsible for the development 
and implementation of a group-wide integrated risk management framework.

During her career with the bank, Mrs Oon was also involved with treasury and markets, corporate finance and credit 
management activities.

Her other directorships include PSA International Pte Ltd, SP PowerGrid Ltd and China Resources Microelctronics Limited. 
She is also a member of the Board Risk Management Committee of Singapore Power Ltd.

Tow Heng Tan, 53
Non-Independent and Non-Executive Director
Fellow of the Association of Chartered Certified Accountants as well as the Chartered Institute of Management Accountants.

Appointed to the Board in 2004 (date of last re-election: 27 April 2007). A non-executive Director and member of the 
Company’s Executive, Remuneration and Board Risk Committees.

Mr Tow has an extensive business career spanning the management consultancy, investment banking and stockbroking 
industries. He is currently the Chief Investment Officer of Temasek Holdings (Private) Limited (Temasek Holdings).

Prior to joining Temasek Holdings in September 2002, he was Senior Director of Business Development at DBS Vickers 
Securities (Singapore) Pte Ltd. From 1993 to 2001, Mr Tow was Managing Director of Lum Chang Securities Pte Ltd.

Mr Tow also sits on the board of ComfortDelGro Corporation Limited, amongst others.

Directors and Key Executives 

215

Directors and Key Executives

Yeo Wee Kiong, 53
Independent Director
LLB Honours University of London, MBA National University of Singapore, First Class Honours (Mechanical Engineering) 
University of Singapore. Professional Engineers Board Gold Medal award winner 1980. 

Appointed to the Board in 2005 (date of last re-election: 28 April 2006). An independent and non-executive Director, he is the 
Chairman of the Board Safety Committee, and member of the Board Risk Committee.

Mr Yeo Wee Kiong is currently a director in Drew & Napier LLC, a leading law corporation in Singapore practising in the areas 
of corporate law, corporate finance, mergers and acquisitions, listings on stock exchanges, venture capital, banking and 
securities.

He started his career in 1980 as a senior industry officer with the Singapore Economic Development Board (EDB) where he 
participated in EDB’s international drive to promote high technology investments into Singapore. He was an investment banker 
with NM Rothschild & Sons Singapore between 1984 to 1989 in capital markets and corporate finance advisory services. He 
started his legal career with Drew & Napier in 1989, subsequently founding his own law firm in 1996. He was also previously a 
senior partner in Rajah & Tann, a leading law firm in Singapore. He rejoined Drew & Napier in 2007.

Between 1999 and 2002, Mr Yeo was a member of the board of directors on the National Science & Technology Board (NSTB) 
a Singapore government agency responsible for promotion of R&D and technology entrepreneurship. Between 2002 and 2007, 
Mr Yeo was a member of the board of directors of TIF Ventures Pte Ltd, an EDB subsidiary responsible for managing US$1.3 
billion in government funds investing into venture capital funds and companies in Singapore and globally. Between 2005 and 
2007, Mr Yeo was a member of the audit committee of the EDBI group of funds.

Mr Yeo is an independent director of Bonvests Holdings Limited, a Singapore listed group in hotels, real estate and food & 
beverage operations.  He is also a non-executive director and audit committee chairman of Ascendas Pte Ltd, a Singapore 
government owned group in industrial and business property development, property holdings and real estate investment trusts 
management.

Mr Yeo is a member of the Accounting Standards Council, a council member of the Singapore Institute of Directors and the 
Vice President of the EDB Society.

Teo Soon Hoe, 59
Senior Executive Director and Group Finance Director
Bachelor of Business Administration, University of Singapore; Member of the Wharton Society of Fellows, University of 
Pennsylvania.

Appointed to the Board in 1985 (date of last re-election: 25 April 2008). A Senior Executive Director and the Group Finance 
Director and member of the Executive Committee.

Mr Teo is the Chairman of Keppel Telecommunications & Transportation Ltd, MobileOne Ltd and Keppel Philippines Holding Inc. 
In addition, he is a director of several other companies within the Keppel Group, including Keppel Land Limited, 
Keppel Offshore & Marine Limited, k1 Ventures Limited and Singapore Petroleum Company Limited. 

Mr Teo began his career with the Keppel Group in 1975 when he joined Keppel Shipyard. He rose through the ranks and was 
seconded to various subsidiaries of the Keppel Group before assuming the position of Group Finance Director in 1985.

216

Keppel Corporation Limited 
Report to Shareholders 2008

Key Executives

In addition to the Chief Executive Officer (Mr Choo Chiau Beng) and the Senior Executive Director (Mr Teo Soon Hoe), the 
following are the key executive officers (“Key Executives”) of the Company, its principal subsidiaries and Singapore Petroleum 
Company Limited:

Tong Chong Heong, 62
Graduate of Management Development Programme, Harvard Business School; Stanford - NUS Executive Programme, Diploma 
in Management Studies, The University of Chicago Graduate School of Business.

Mr Tong has been appointed Chief Executive Officer of Keppel Offshore & Marine (Keppel O&M) on 1 January 2009. Prior to 
that, he was the Managing Director/Chief Operating Officer of Keppel O&M since May 2002. He is also the Managing Director of 
Keppel FELS and Keppel Shipyard. He was the Executive Director of Keppel Corporation from 1989-1996. He served for 
27 years and was appointed Commander of the Volunteer Special Constabulary (VSC) from 1995-2001 and was honoured with 
Singapore Public Service Medal at the 1999 National Day Award. He had served as Vice President/President of Association 
of Singapore Marine Industries (1993-1996), Member/Deputy Chairman of the Shipbuilding & Offshore Engineering Advisory 
Committee, Ngee Ann Polytechnic (1986-1995). He is a member of Society of Naval Architects and Marine Engineers (USA), 
member of Singapore Institute of Directors, member of American Bureau of Shipping and member of Nippon Kaiji Kyokai (Class 
NK) Singapore Committee and Fellow of the Society of Project Managers as well as Fellow of The Royal Institute of Naval 
Architects (RINA) UK.

His directorships include Keppel Offshore & Marine Limited, Keppel FELS Limited, Keppel Shipyard Limited, Keppel Integrated 
Engineering Ltd and Chairman of Keppel AmFELS Inc.

He is the Honorary Consul (Designate) of Trinidad & Tobago in Singapore.

Michael Chia Hock Chye, 56
Bachelor in Science (First Class Honours), University of Newcastle-Upon-Tyne; Masters in Business Administration, National 
University of Singapore; Graduate Certificate in International Arbitration, National University of Singapore.

Mr Chia is the Executive Director of Keppel FELS Limited since 2002 with overall responsibility of the business management of 
the company. Mr Chia has more than 15 years of management experience in corporate development, engineering, operations 
and commercial. He was elected as the President of the Association of Singapore Marines Industries since 2005, a non-profit 
association formed in 1968 to promote the interests of the marine industry in Singapore.  

Mr Chia is also a board member of the Singapore Maritime Foundation, Chairman of the Marine & Offshore Technology Advisory 
Committee in Ngee Ann Polytechnic, Deputy Chairman, Workplace Safety and Health Shipbuilding and Shiprepairing Advisory 
Sub-Committee, Ministry Of Manpower, Singapore and member of the Ngee Ann Polytechnic Council, Spring Singapore’s 
Enterprise Development Advisory Council (EDAC), Society of Naval Architects and Marine Engineers Singapore, and American 
Bureau of Shipping and Society of Petroleum Engineers. He is a Fellow with the Singapore Institute of Arbitrators.

His directorships include FELS Crane, Asian Lift Pte Ltd, Keppel FELS Brasil SA (Brazil), Keppel AmFELS Inc (USA), Brightway 
Property Pte Ltd,  Keppel FELS Limited, Tradeone Asia Pte Ltd,  Deepwater Technology Group Pte Ltd, Willalpha Ltd, 
Prismatic  Services Ltd,  Regency Steel Japan Ltd (Japan), Joy Venture Investments Ltd (BVI), Bintan Offshore Fabricators Pte 
Ltd, Durward International (BVI),  Keppel FELS Engineering Shenzhen Co Ltd,  Offshore Technology Development Pte Ltd, 
Floatec LLC, Offshore Innovative Solutions LLC, Keppel Shipyard Limited and  Keppel Offshore & Marine USA (Holdings) LLC.

Directors and Key Executives 

217

Directors and Key Executives

Nelson Yeo Chien Sheng, 52
Bachelor of Science in Mechanical Engineering (First Class Honours), University of Birmingham; Master of Engineering in Energy 
Technology, Asian Institute of Technology, Thailand; Programme for Management Development, Graduate School of Business 
Administration, Harvard University.

Mr Yeo is the Executive Director of Keppel Shipyard Limited.  He is the Chairman of Keppel Philippines Marine Inc, Subic 
Shipyard and Engineering, Inc, Keppel Smit Towage Pte Ltd and Maju Maritime Pte Ltd.  He is also a director of Keppel FELS 
Limited, Arab Heavy Industries P.J.S.C., KS Investments Pte Ltd, KSI Production Pte Ltd, Keppel Marine Agencies, Inc., and 
DPS Bristol (Holdings) Ltd.

Mr Yeo serves as a member of the Workplace Safety and Health (Marine Industries) Committee, Ministry of Manpower; AIDS 
Business Alliance, Ministry of Health; and is also a member of American Bureau of Shipping; South East Asia Advisory/Technical 
Committee of Lloyd’s Register and the Singapore Technical Committee in Nippon Kaiji Kyokai.  He has 27 years of working 
experience in the shipyard industry.

Kevin Wong Kingcheung, 53
Bachelor degree in Civil Engineering with First Class Honours, Imperial College, London; Masters degree, Massachusetts 
Institute of Technology, USA.

Mr Wong has been Group CEO/Managing Director, Keppel Land Limited since January 2000.  Prior to this appointment, he was 
Executive Director since November 1993. He is Vice-Chairman and director, Evergro Properties Limited, Chairman and director 
of Alpha Investment Partners Ltd, and Deputy Chairman and director of K-REIT Asia Management Pte Ltd. He is also a director 
of Prudential Assurance Company Singapore (Pte) Ltd.

Prior to joining Keppel Land Limited, Mr Wong had diverse experience in the real estate industry in the UK, USA and Singapore.

Lam Kwok Chong, 54
Bachelor of Business Administration, National University of Singapore.

Mr Lam was appointed the Chief Financial Officer of Keppel Telecommunications & Transportation Ltd (Keppel T&T) in July 2003 
and was appointed the Managing Director and a director of Keppel T&T in April 2004. He holds directorships in several 
Keppel T&T subsidiaries and associated companies. He is also a director in Global Voice Group Limited. Mr Lam began his 
career with the Keppel Group in 1980. Since then, he has held various senior management appointments within the 
Keppel Group, including appointments such as the Chief Financial Officer of Keppel Insurance Pte Ltd, Managing Director 
of Keppel Securities Pte Ltd and General Manager (Special Projects) of Keppel Corporation Limited.

Ong Tiong Guan, 50
Bachelor of Engineering (First Class Honours), Monash University; and Doctor of Philosophy (Ph.D.) under Monash Graduate 
Scholarship, Monash University, Australia.

Dr Ong was appointed Keppel Energy Pte Ltd’s Executive Director from November 1999. He became Managing Director of 
Keppel Energy Pte Ltd with effect from 1 May 2003. He is responsible for Keppel Corporation’s power generation business, 
which develops, owns and operates power generation projects in Asia and in the Americas.

Dr Ong’s career spans across the energy industry from engineering and contracting to investment and ownership of energy 
assets. He started with Jurong Engineering as a Design Engineer in 1987 and went on to hold senior management positions in 
Foster Wheeler Eastern, the Sembawang Group, and CMS Energy Asia. Dr Ong was Chairman of SEPEC (Singapore Electricity 
Pool Executive Committee) for the FY 2002/2003.

His directorships include Keppel Energy Pte Ltd, Keppel Electric Pte Ltd, Keppel Merlimau Cogen Pte Ltd, Keppel Gas Pte Ltd, 
Termoguayas Generation S.A. and Corporacion Electrica Nicaraguense, S.A..

218

Keppel Corporation Limited 
Report to Shareholders 2008

Koh Ban Heng, 60
Bachelor degree in Applied Chemistry and post-graduate diploma in Business Administration, University of Singapore. 

Mr Koh is the Chief Executive Officer of Singapore Petroleum Company Limited (SPC). He joined SPC in February 1974 and 
held several key positions in the company rising to the position of CEO in August 2003. The breadth of his experience spans 
refining operations and planning, marketing and distribution, supply and trading, oil and gas exploration and production 
including the development and establishment of new businesses.

Mr Koh has delivered exceptional results since his appointment as CEO. He was instrumental in the landmark refining and retail 
acquisitions in 2004.  He has also led and paved the way for several key capital investments in E&P. These have provided the 
strategic drive that has led to SPC’s current success and will be the foundation for sustained growth

Mr Koh holds directorships in several of SPC’s subsidiaries and associate companies.

Chua Chee Wui, 42
Bachelor of Engineering Science (2nd Upper Hons), Oxford University, on a Scholarship from the Singapore Government; 
completed Chartered Financial Analysts (CFA) Programme in 1999; attended the INSEAD Executive Programme.

Mr Chua was appointed CEO of Keppel Integrated Engineering Ltd (KIE) in July 2006. KIE is the environmental and engineering 
division of Keppel Corporation Limited. 

Prior to joining Keppel Corporation in 2000, he held various positions in ExxonMobil Singapore and in the Ministry of Defence of 
Singapore.

His directorships include KIE, Keppel Seghers Engineering Singapore Pte Ltd, Keppel Seghers Technology Group NV, Keppel 
Seghers Newater Development Co Pte Ltd, Keppel Seghers Tuas Waste-To-Energy Plant Pte Ltd, Keppel FMO Pte Ltd and 
Keppel Prince Engineering Pty Ltd.

Directors and Key Executives 

219

Directors and Key Executives

Past Principal Directorships In The Last Five Years

Directors

Lim Chee Onn
Parksville Development Pte Ltd; Keppel Energy Pte Ltd; MobileOne Ltd; k1 Ventures Limited.

Choo Chiau Beng
EDB Investments Pte Ltd; FELS Property Holdings Pte Ltd; FELS Realty Texas Inc; FELS (USA) Inc; Keppel Asia Limited; Keppel 
Infrastructure Pte Ltd; Keppel Marine Agencies Inc; Keppel Norway AS; Keppel Regional Infrastructure Pte Ltd; Kepventure Pte 
Ltd; WIIG Global Ventures Pte Ltd; Maritime and Port Authority of Singapore; Singapore Maritime Foundation Limited. 

Tony Chew Leong-Chee
Del Monte Pacific Ltd; Singapore Trade Development Board; Keppel Capital Holdings Ltd; KTB Limited (formerly Keppel Tatlee 
Bank Ltd & Keppel Bank of S’pore Ltd); CapitalLand Commercial Ltd (formerly DBS Land Ltd); Highsonic Enterprises Pte Ltd; 
Macondray Packaging Corporation Pte Ltd; Pontirep Investments Pte Ltd; Operational Development Pte Ltd; CCL Myanmar 
Pte Ltd; Myanmarcorp Pte Ltd; Juno Pacific Pte Ltd; ARC Corporate Services Pte Ltd; RHB-Cathay Securities Pte Ltd; Dohler 
Asia Pte Ltd; Net Decisions Singapore Pte Ltd; Eurolife Limited; International Beverages Company; Viethai Plastic Company; 
Hangzhou Hua Feng Paper Mill Ltd; Myanmar Airways International Ltd; International Beverages Trading Co., Myanmar; 
Myanmar Development International Co. Ltd; Asia Net Media Ltd (BVI); Cycle & Carriage Golden Star Ltd; Del Monte Pacific 
Resources Ltd; Dewey Ltd; Macondray Holdings Corporation; Alliance Resource Corporation; Opdev Investments Ltd; Surfield 
Development Corporation; Yearsley, Inc.; Central American Resources Inc; IES Holdings.

Lim Hock San
Singapore Changi Airport Enterprise Pte Ltd; Changi Airports International Pte Ltd; Air Transport Training College Pte Ltd; 
Advanced Material Technologies Pte Ltd; United Test and Assembly Center Ltd. 

Sven Bang Ullring
Chairman of the Supervisory Boards of NORSK HYDRO ASA, Oslo and STOREBRAND ASA, Oslo.

Tsao Yuan Mrs Lee Soo Ann
Director of Pacific Internet Limited; Chairman of the International Trade Institute of Singapore (ITIS); Deputy Chairman of the 
protem exco of the eLearning Chapter of the Singapore IT Federation; Director of Keppel Capital Holdings Ltd and Keppel 
FELS Energy & Infrastructure Limited; Executive Deputy Chairman of Inchone.com Pte Ltd; Governor of Singapore International 
Foundation and the United World College of South East Asia.

Oon Kum Loon (Mrs)
Schmidt Electronics Group Ltd; Gas Supply Pte Ltd; Intraco Limited.

Tow Heng Tan
IE Singapore; Shangri-la Asia Limited.

Yeo Wee Kiong
PCA Technology Ltd; OM Holdings Ltd; China Sun Bio-Chem Technology Group Company Ltd; Ezyhealth Asia Pacific Ltd; City 
Axis Holdings Ltd (ISG Asia Limited); ASJ Limited; Pacific Internet Ltd; Territory Iron Ltd; AEM-Evertech Holdings Ltd. 

Teo Soon Hoe
Keppel Bank Philippines Inc; Centurion Bank Limited; Southern Bank Bhd; Keppel Shipyard Limited.

220

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
Key Executives

Tong Chong Heong
Nil.

Michael Chia Hock Chye
Nil.

Nelson Yeo Chien Sheng
Keppel Singmarine Pte Ltd; Alpine Engineering Services Pte Ltd; Blastech Abrasives Pte Ltd; Keppel Tuas Pte Ltd.

Kevin Wong Kingcheung
HDB Corporation Pte Ltd; Singapore Hotel Association; subsidiaries and associates of Keppel Land Limited.

Lam Kwok Chong
Folec Holdings (M) Sdn Bhd; Steamers Telecommunications Pte Ltd; Computer Generated Solutions (Asia) Pte Ltd; Keppel 
Securities Philippines Inc; Indotel Limited; SEM Thong Nhuat Hotel Metropole; Societe de Development du Metropole (SDM) 
B.V; Folec Communications (B) Sdn Bhd; Blue Cherries Inc; Business Online Public Company Limited; DataOne Corporation 
Pte Ltd; Heritage (Vietnam) Investments Pte Ltd.

Ong Tiong Guan
Nil.

Koh Bang Heng
SPC Cambodia Ltd.

Chua Chee Wui
Nil.

Directors and Key Executives 

221

Major Properties

Effective 
Group 
Interest 

Location 

Description and
Approximate
Land Area 

Tenure 

Usage

Held By 

Completed properties

K-Reit Asia  

55% 

Prudential Tower 
Cecil Street & 
Church Street, 
Singapore

Keppel Towers 
Hoe Chiang Rd, 
Singapore 

GE Tower 
Hoe Chiang Rd, 
Singapore

Bugis Junction  
Tower 
Victoria Street,
Singapore

30-storey office building 

99 years leasehold 

Commercial office building with
rentable area of 10,074 sqm
(retained interest)

Land area: 7,760 sqm 
27-storey office building 

Freehold 

Commercial office building with
rentable area of 32,624 sqm

Land area: 1,367 sqm 
13-storey office building 

Freehold 

Commercial office building with
rentable area of 7,378 sqm

15-storey office building 

99 years leasehold 

Commercial office building with
rentable area of 22,991 sqm

One Raffles Quay Pte Ltd 

17% 

One Raffles Quay 
Singapore 

Land area: 11,367 sqm 
Two office towers 

99 years leasehold 

Commercial office building with
rentable area of 124,080 sqm

DL Properties Ltd 

34% 

Ocean Properties Pte Ltd 

40% 

Keppel Bay Pte Ltd 

86% 

HarbourFront One Pte Ltd 

65% 

Equity Plaza 
Cecil Street, 
Singapore

Ocean Towers 
Collyer Quay, 
Singapore

Caribbean 
at Keppel Bay 
Singapore 

Keppel Bay Tower 
HarbourFront  
Avenue,
Singapore

Land area: 2,345 sqm 
28-storey office building 

99 years leasehold 

Commercial office building with
rentable area of 23,161 sqm

Land area: 3,552 sqm 
27-storey office building 

999 years leasehold  Commercial office building with

rentable area of 21,129 sqm

- 

99 years leasehold 

168 units of waterfront
condominium
(retained interest)

Land area: 17,267 sqm 
18-storey office building 

99 years leasehold 

Commercial office building with
rentable area of 36,035 sqm

HarbourFront Two Pte Ltd 

33% 

HarbourFront 
Land area: 15,072 sqm 
Tower One and Two  18-storey and 13-storey 
HarbourFront Place,  office buildings
Singapore

99 years leasehold 

Commercial office building with
rentable area of 48,671 sqm

PT Straits-CM Village 

21% 

Club Med Ria Bintan  Land area: 200,000 sqm 
Bintan, 
Indonesia 

30 years lease with 
option for another
50 years

A 302-room beachfront hotel

222

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Held By 

Effective 
Group 
Interest 

Location 

Description and
Approximate
Land Area 

Tenure 

Usage

PT Kepland Investama 

53% 

Keppel Land Watco I Co Ltd 

36% 

Wisma BCA 
Jakarta, 
Indonesia 

Saigon Centre 
(Phase 1 Tower) 
Ho Chi Minh City, 
Vietnam 

Land area: 10,444 sqm 

Land area: 2,730 sqm 
25-storey office, retail 
cum serviced apartments 

20 years lease with 
option for another 
20 years

50 years lease 

A prime office development with
rentable area of 38,093 sqm

Commercial building with rentable
area of 10,443 sqm office,
3,663 sqm retail, 305 sqm
post office and 89 units of 
serviced apartments

Properties under development

Ocean Properties Pte Ltd 

40% 

BFC Development Pte Ltd 

17% 

Central Boulevard  
Development Pte Ltd 

17% 

Devonshire Development  
Pte Ltd (joint venture) 

32% 

Ocean & Capital Properties  
Pte Ltd 

53% 

Keppel Bay Pte Ltd 

86% 

Ocean Financial  
Centre 
Collyer Quay,
Singapore

Marina Bay  
Financial Centre  
(Phase 1)/Marina  
Bay Residences
Marina Boulevard/ 
Central Boulevard,
Singapore

Marina Bay 
Financial Centre  
(Phase 2)/Marina  
Bay Suites
Marina Boulevard/
Central Boulevard,
Singapore

The Suites  
at Central 
Devonshire Road,
Singapore

The Sixth Avenue 
Residences 
Sixth Avenue,
Singapore

Reflections 
at Keppel Bay 
Singapore 

Keppel Bay 
Plot 3 and 6,  
Singapore

Land area: 2,557 sqm 

999 years leasehold  Commercial building with rentable

area of 78,587 sqm* (2011)

Land area: 20,505 sqm 

99 years leasehold 

An integrated development
comprising office, retail and
428 condominium units* (2010)

Land area: 15,010 sqm 

99 years leasehold 

An integrated development
comprising office, retail and
221 condominium units* (2012)

Land area: 7,400 sqm 

Freehold 

A 157-unit condominium
development* (2009)

Land area: 16,056 sqm 

Freehold 

A 175-unit condominium
development* (2009)

Land area: 83,591 sqm 

99 years leasehold 

Land area: 82,619 sqm 

99 years leasehold 

A 1,129-unit waterfront
condominium development
*(2013)

Waterfront condominium
development

Major Properties 

223

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Major Properties

Held By 

Effective 
Group 
Interest 

Location 

Description and
Approximate
Land Area 

Tenure 

Usage

Shanghai Pasir Panjang Land  52% 
Co Ltd 

Shanghai Hongda Property  
Development Co Ltd 

53% 

Spring City Golf & Lake  
Resort Co (owned by 
Kingsdale Development 
Pte Ltd) 

CityOne Development  
(Wuxi) Co Ltd (owned by 
Keppel Land China Holdings  
Pte Ltd) 

PT Mitra Sindo Sukses/ 
PT Mitra Sindo Makmur 

Dong Nai Waterfront City  
LLC (owned by Portsville  
Pte Ltd) 

21% 

26% 

27% 

24% 

Industrial properties

Keppel FELS Ltd 

100% 

Eight Park Avenue 
Shanghai, 
China 

Residential 
development 
Shanghai, 
China 

Spring City Golf 
& Lake Resort 
Kunming, 
China

Central Park City 
Wuxi, 
China 

Land area: 33,432 sqm 

70 years lease 

Land area: 264,090 sqm 

70 years lease 
(residential) 
40 years lease 
(commercial)

Land area: 2,157,361 sqm  70 years lease 

A 946-unit residential apartment
development (Plot B)
*(2012/2013)

A 2,753-unit residential
development with integrated
facilities* (2015)

Integrated resort comprising
golf courses, resort homes and
resort facilities* (2017)

Land area: 352,534 sqm 

70 years lease 
(residential) 
40 years lease 
(commercial)

A 5,000-unit residential township
development with integrated
facilities* (2009 Phase 1)

Jakarta Garden City  Land area: 2,700,000 sqm  30 years lease with 
option for another 
Jakarta, 
20 years 
Indonesia 

A 7,000-unit residential township
*(2011 Phase 1)
*(2013 Phase 2)

Dong Nai 
Waterfront City 
Dong Nai Province, 
Vietnam

Land area: 3,667,127 sqm  50 years lease 

A 10,434-unit residential
township
*(2013 Phase 1)

Jurong, Pioneer, 
Cresent and 
Tuas South Yard, 
Singapore 

Land area: 737,525 sqm 
buildings, workshops, 
building berths and 
wharves

24 - 30 years 
leasehold 

Oil rigs, offshore and marine
construction, repair, fabrication,
assembly and storage

Keppel Shipyard Ltd 

100% 

Benoi and Tuas Yard,  Land area: 775,527 sqm 
Singapore 

buildings, workshops, 
drydocks and wharves

30 years leasehold 

Shiprepairing, shipbuilding and
marine construction

* Expected year of completion

224

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group Five-Year Performance

Selected Profit & Loss Account Data
($ million)
Revenue 
Operating profit 
Profit before tax & exceptional items 
Attributable profit
  Before exceptional items 
  After exceptional items 

Selected Balance Sheet Data
($ million)
Fixed assets & properties 
Investments 
Stocks, debtors & cash 
Intangibles 
Total assets 
Less:
Creditors 
Borrowings 
Other liabilities 
Net assets 

Share capital & reserves 
Minority interests 
Capital employed 

Per Share
Earnings (cents) (Note 1):
  Before tax & exceptional items 
  Attributable before exceptional items 
  Attributable after exceptional items 
Gross dividend (cents) 
Capital distribution (net) (cents) 
Total distribution (cents) 
Net assets ($) 
Net tangible assets ($) 

Financial Ratios
Return on shareholders’ funds (%) (Note 2):
  Profit before tax and exceptional items 
  Attributable profit before exceptional items 
Dividend cover (times) 
Net cash/(gearing) (times) 

Employees
Number 
Wages & salaries ($ million) 

2004 

2005 

2006 

2007 

2008

3,963 
409 
645 

465 
464 

3,482 
1,839 
5,059 
125 
10,505 

2,402 
3,699 
148 
4,256 

3,090 
1,166 
4,256 

35.2 
29.9 
29.9 
10.0 
10.0 
20.0 
1.98 
1.90 

18.3 
15.5 
3.7 
(0.64) 

5,688 
467 
826 

564 
564 

3,907 
2,664 
5,874 
145 
12,590 

3,750 
3,731 
174 
4,935 

3,646 
1,289 
4,935 

43.9 
36.1 
36.1 
11.5 
11.5 
23.0 
2.33 
2.23 

20.0 
16.4 
3.9 
(0.47) 

7,601 
804 
1,139 

751 
751 

4,187 
3,113 
6,466 
135 
13,901 

5,188 
2,957 
158 
5,598 

4,205 
1,393 
5,598 

61.5 
47.7 
47.7 
14.0 
14.0 
28.0 
2.67 
2.58 

24.7 
19.1 
4.2 
(0.24) 

10,431 
1,051 
1,556 

1,026 
1,131 

4,831 
4,024 
6,874 
68 
15,797  

6,139 
2,234 
389 
7,035 

5,205 
1,830 
7,035 

81.4 
64.9 
71.5 
64.0 
- 
64.0 
3.28 
3.24 

27.4 
21.8 
1.0 
(0.09) 

11,805 
1,238 
1,597 

1,097 
1,098 

5,078 
3,633 
7,958 
78 
16,747 

7,647 
1,970 
381 
6,749 

4,596 
2,153 
6,749 

84.2 
69.0 
69.0 
35.0 
-  
35.0 
2.89 
2.84 

27.3 
22.4 
2.0 
0.04

22,186 
695 

23,625 
803 

29,185 
931 

31,914 
1,132 

35,621 
1,329

Notes:
1. Earnings per share are calculated based on the Group profit by reference to the weighted average number of shares in issue during the year.
2. In calculating return on shareholders’ funds, average shareholders’ funds has been used.
3. Comparative figures have been adjusted for sub-division of shares in 2007.

Group Five-Year Performance 

225

 
  
 
Group Five-Year Performance

2008
Group revenue of $11,805 million was $1,374 million or 13% higher than that of the previous year.  Revenue from Offshore & 
Marine Division of $8,569 million was $1,311 million or 18% higher and accounted for 72% of Group revenue.  The Division 
completed and delivered 3 semisubmersibles and 13 jackups on schedule for its customers.  Revenue from shiprepairs, 
conversions and shipbuilding were also higher.  Revenue from Property Division of $950 million was $885 million or 48% lower.  
The decrease was due to lower sales of residential properties in the current year.  Rental income from investment properties 
increased due to higher rental rates and occupancy.  Revenue from Infrastructure Division increased by 75% to $2,232 million.  
Revenue generated from the cogen power plant in Singapore and environmental engineering contracts contributed to the 
significant increase in revenue.

Group pre-tax profit of $1,597 million was 3% more than the previous year.  Higher contribution from Offshore & Marine and 
Infrastructure were partially offset by lower profits from Property and Investments.  Earnings from Offshore & Marine Division of 
$943 million were 35% above the previous year.  Property Division posted profit of $365 million, $106 million or 23% lower than 
the previous year.  The decrease was due to the lower sales and share of profit from associated companies.  Infrastructure Division 
continued to make encouraging progress, contributing $70 million to Group pre-tax profit.  Profit from Investments was lower 
because of lower profit from SPC.

The income tax expenses of the Group included a write-back of $15 million for tax provision in respect of prior years.  After 
minority share of profit, the attributable profit before exceptional items was $1,097 million.

2007
Group revenue of $10,431 million was $2,830 million or 37% higher than that of the previous year.  Revenue from Offshore & 
Marine Division at $7,258 million was $1,503 million or 26% higher and accounted for 70% of Group revenue.  Revenue from 
shipconversion and shiprepair was strong.  Property Division achieved revenue of $1,835 million, $680 million or 59% higher.  The 
higher revenue was due to sales of Reflections at Keppel Bay, Sixth Avenue Residences and Park Infinia @ Wee Nam in Singapore, 
Villa Riviera in Shanghai and Elita Promenade in Bangalore.  Rental income from investment properties was higher as a result of the 
tight supply of prime office buildings in the Singapore Central Business District.  Revenue from Infrastructure Division more than 
doubled to $1,277 million as a result of new income stream from the cogen power plant, NEWater plant, power barges and the 
contract for the solid waste management complex in Qatar.

Group profit before tax was $1,556 million or 37% more than the previous year’s.  Earnings from Offshore & Marine Division at 
$700 million were 12% above the previous year.  Production activities continued to increase at the shipyards, however operating 
margins were lower because of lower margins from its Brazilian operations.  Earnings from Property Division more than doubled to 
$471 million due to the higher revenue and operating margins from trading projects, and share of profit of Marina Bay Residences. 
In addition, cost provisions no longer required for Singapore trading projects were released in the year. Infrastructure Division 
returned firmly to profitability contributing $51 million or 3% of Group pre-tax profit.  This was mainly derived from new projects and 
the initial contribution from the contract in Qatar.  The turnaround was achieved despite higher costs incurred in completing some 
old contracts and the higher gas cost to operate the cogen plant.  The share of results of associated companies from Investments 
was significantly higher due mainly to increased contribution from SPC, which also reported record profits. 

Group taxation expenses were higher in the year as a result of write-back of deferred tax amounting to $18 million from the 
reduction in the Singapore corporate tax rate from 20% to 18%.  After taking into account the higher taxation charge and minority 
share of profit, the attributable profit before exceptional items was $1,026 million.

Revenue ($ billion)

Pre-Tax Profit ($ million)

PATMI ($ million)

11.8

10.4

7.6

5.7

4.0

1,556

1,597

1,139

826

645

1,026

1,097

751

564

465

2004

2005

2006

2007

2008

2004

2005

2006

2007

2008

2004

2005

2006

2007

2008

226

Keppel Corporation Limited 
Report to Shareholders 2008

2006
Group revenue of $7,601 million was $1,913 million or 34% higher than that of the previous year.  Revenue from Offshore & 
Marine of $5,755 million was $1,643 million or 40% higher and accounted for 76% of Group revenue.  Twenty six newbuilds and 
conversions were completed and delivered in the year, on time or ahead of time and within budget.  Revenue from ship and rig 
repair was also strong.  Property achieved revenue of $1,155 million, $308 million or 36% higher.  The increased revenue was 
underpinned by higher sales and prices of the Group’s new and existing trading projects both in Singapore and regionally.  Rental 
income from investment properties was higher as a result of the tight supply of prime office buildings in the Singapore Central 
Business District.  Keppel T&T reported lower revenue as no major new network engineering contract was secured.  Revenue from 
electricity trading also declined as non-profitable fixed price contracts were not renewed.

Group profit before tax exceeded $1 billion for the first time to $1,139 million, 38% higher than the previous year.  Offshore & 
Marine, which had an exceptionally busy year contributed significantly to the Group earnings growth.  The division’s profit before 
tax of $624 million was $273 million or 78% higher.  Revenue and operating margins improved with higher prices and efficient 
project execution.  Property posted earnings of $233 million, 5% above the previous year due to the higher revenue from trading 
projects and profit from sale of a piece of land in Tianjin and an equity interest in a property project.  Infrastructure returned to 
profitability in the fourth quarter with the commercial operation of the power barges in Ecuador.  However, the quarter’s profit was 
not sufficient to reverse the losses in the first nine months.  Earnings from Investments were higher with gains from the sale of 
investments and much better contributions from k1 Ventures which benefited from the divestment of The Gas Company, LLC.  
These were more than sufficient to offset the lower contributions from SPC, which was affected by lower margins in the second 
half year.

Group taxation expenses were higher in the year as a result of higher profits from overseas operations. After taking into account 
the higher taxation charge and minority share of profit, the attributable profit to shareholders was $751 million.

2005
Group revenue of $5,688 million for the year was $1,725 million or 44% higher than that of the previous year.  Revenue from 
Offshore & Marine of $4,112 million was 69% higher and contributed 72% of Group revenue.  The net orderbook carried over 
from the previous year and the record new orders secured in the year contributed to the increased revenue of Offshore & Marine.  
Revenue from Property of $848 million was $137 million or 19% higher than the previous year.  The increased revenue was due to 
the strong performance of the Group’s trading projects both in Singapore and overseas.  The increased revenue from Offshore & 
Marine and Property was partially offset by lower revenue from Infrastructure following the cessation of the power barges contract 
in Brazil at the end of the previous year.

Group pre-tax profit of $826 million was 28% higher than the previous year with increased contributions from Offshore & Marine, 
Property and SPC.  Offshore & Marine benefited from profit recognition of completed jobs arising from its large orderbook.  Keppel 
Land’s earnings rose by 31% from the healthy sales of its residential developments.  However, this was partially offset by lower 
earnings from Caribbean at Keppel Bay.  Losses were incurred by the Infrastructure because of the redeployment cost of the 
power barges and losses in electricity trading.  KIE returned to profitability after the restructuring efforts from the previous year.  
The continuing tight refining capacity and strong growth in demand for refined products led to significantly higher earnings at SPC.

Taking into consideration taxation and minority share of profits, the resultant profit attributable to shareholders of $564 million was 
21% higher than the previous year.  Offshore & Marine remains the largest contributor to attributable earnings with 42%, followed 
by SPC with 33%, Property with 21% and the rest from Keppel T&T and Investments net of the losses of Infrastructure.

2004
Group revenue was below that of the previous year due mainly to the deconsolidation of SPC.  If revenue of SPC were to be 
excluded from previous year, there would have been a 20% increase in Group’s revenue due to a hefty increase in Offshore & 
Marine’s revenue.

Group pre-tax profit of $645 million and attributable profit of $465 million were 16% and 18% above those of 2003 respectively.

The Group’s strong earnings growth was underpinned by the vastly improved performances of Offshore & Marine from a strong 
order book and SPC from increased refining margins and demand for its products.  Property also achieved commendable earnings 
improvement in 2004 mainly from its residential development projects in China.  Infrastructure’s performance was affected by the 
lower than expected revenue from its investment in environmental engineering unit, Seghers Keppel Technology (SKG), and by 
costs associated with the restructuring of SKG to focus on growth segments.

Shareholders’ Funds ($ billion)

Capital Employed ($ billion)

Market Capitalisation ($ billion)

5.2

4.6

4.2

3.6

3.1

4.9

5.6

4.3

7.0

6.7

20.6

13.9

6.7

8.6

6.9

2004

2005

2006

2007

2008

2004

2005

2006

2007

2008

2004

2005

2006

2007

2008

Group Five-Year Performance 

227

Group Value-Added Statements

($ million)

Value added from:
  Revenue earned 
  Less: purchases of materials and services 
Gross value added from operation 

In addition:

Interest and investment income 

  Share of associated companies’ profits 
  Exceptional items  

Distribution of Group’s value added:
  To employees in wages, salaries and benefits 
  To government in taxation 
  To providers of capital on:          

Interest on borrowings 

  Dividends to our partners in subsidiaries 
  Dividends to our shareholders 

2004 

2005 

2006 

2007 

2008

 3,963  
 (2,679) 
1,284  

 5,688  
 (4,287) 
 1,401  

 7,601  
 (5,738) 
 1,863  

 10,431 
 (8,123) 
 2,308 

11,805 
(9,099)
2,706 

 23  
 253  
 -  
1,560  

 695  
 90  

 41  
 22  
 124  
187  

 60  
 321  
 -  
 1,782  

 83  
 315  
 -  
 2,261  

 803  
 153  

 22  
 36  
 131  
 189  

 931  
 258  

 62  
 73  
 157  
 292 

 91 
 477 
 565 
 3,441 

 1,132 
 469 

 63 
 46 
 242 
351 

83 
354 
13 
3,156 

1,329 
288 

79 
103 
1,098 
1,280 

Total Distribution 

972  

 1,145  

 1,481 

1,952 

2,897 

Balance retained in the business:
  Depreciation & amortisation 
  Minority share of profits in subsidiaries 
  Retained profit for the year 

 180  
 68  
 340  
588 

 132  
 73  
 432  
637  

 127  
 60  
 593  
 780  

 126 
 474 
 889 
 1,489 

139 
120 
- 
 259 

1,560  

 1,782  

 2,261  

 3,441 

3,156 

Number of employees 

22,186  

 23,625  

 29,185  

 31,914 

35,621 

Productivity data:
  Gross value added per employee ($’000) 
  Gross value added per dollar employment cost ($) 
  Gross value added per dollar sales ($) 

 58  
 1.85  
 0.32  

 59  
 1.74  
 0.25  

 64  
 2.00  
 0.25  

 72 
 2.04 
 0.22 

76 
2.04 
0.23 

($ million)

1,560

588

187
90

695

1,782

637

189
153

803

2,261

780

292

258

931

3,441

1,489

351

469

1,132

3,156
259

1,280

288

1,329

2004

2005

2006

2007

2008

Depreciation & Retained Profit

Interest Expenses & Dividends

Taxation

Wages, Salaries & Benefits

228

Keppel Corporation Limited 
Report to Shareholders 2008

 
  
 
 
 
     
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
Share Performance

Turnover (million)

Share Prices ($) 

400

300

200

180

160

140

120

100

80

60

40

20

0

40

30

20

18

16

14

12

10

8

6

4

2

0

2004

2005

2006

2007

2008

Turnover

High and Low Prices

2004 

2005 

2006 

2007 

2008

Share Price ($)
Last transacted (Note 3) 
High 
Low 
Volume weighted average (Note 2) 

Per Share
Earnings (cents) (Note 1) 
Gross dividend (cents) 
Capital distribution (cents) (net) 
Distribution yield (%) (Note 2) 
Net price earnings ratio (Note 2) 

At Year End
Share price ($) 
Distribution yield (%) (Note 3) 
Net price earnings ratio (Note 3) 
Net price to book ratio (Note 3) 
Net assets backing ($) 

4.30 
4.38 
3.00  
3.74  

29.9  
10.0 
10.0 
5.4  
12.5  

4.30 
4.7 
14.4  
2.3  
1.90 

5.50 
6.60 
4.25  
5.69  

36.1  
11.5 
11.5 
4.1 
15.8  

5.50 
4.2 
15.3 
2.5 
2.23 

8.80 
9.25 
5.55  
7.22  

47.7 
14.0 
14.0  
3.9 
15.1 

8.80 
3.2 
18.4 
3.4 
2.58 

13.00 
15.30  
8.30  
11.56  

64.9 
64.0 
 - 
5.5 
17.8 

13.00  
4.9 
20.0 
4.0 
3.24 

Notes: 
1.  Earnings per share are calculated based on the Group PATMI by reference to the weighted average number of shares in issue during the year.
2.  Volume weighted average share price is used in calculating distribution yield and net price earnings ratio.
3.  Last transacted share price is used in calculating distribution yield, net price earnings ratio and net price to book ratio.
4.  Comparative figures have been adjusted for sub-division of shares in 2007.

Share Performance 

4.33
12.84
3.35
8.59

69.0
35.0
-
4.1
12.5

4.33
8.1
6.3
1.5
2.84

229

 
 
 
 
 
 
Shareholding Statistics
As at 27 February 2009

Total no. of issued shares 
Issued and Fully Paid-up Capital :  $824,571,173.19 
Class of Shares 

:  1,593,134,180 

:  Ordinary Shares with equal voting rights

Size of Shareholdings 

1 - 999 
1,000 - 10,000 
10,001 - 1,000,000 
1,000,001 & Above 

TOTAL 

Twenty Largest Shareholders 

DBS Nominees Pte Ltd 
Temasek Holdings (Pte) Ltd 
Citibank Nominees Singapore Pte Ltd 
HSBC (Singapore) Nominees Pte Ltd 
DBSN Services Pte Ltd 
United Overseas Bank Nominees Pte Ltd 
Raffles Nominees Pte Ltd 
DB Nominees (S) Pte Ltd 
Shanwood Development Pte Ltd 
Oversea Chinese Bank Nominees Pte Ltd 
Merrill Lynch (Singapore) Pte Ltd 
TM Asia Life Singapore Ltd - PAR Fund 
OCBC Nominees Singapore Pte Ltd 
Lim Chee Onn 
Teo Soon Hoe 
Royal Bank of Canada (Asia) Ltd 
OCBC Securities Private Ltd 
Morgan Stanley Asia (Singapore) Pte Ltd 
ING Nominees (Singapore) Pte Ltd 
Lee Seng Wee 

Total 

Number of 
Shareholders 

460 
27,406 
3,219 
27 

% 

1.48 
88.09 
10.35 
0.08 

Number of
Shares 

205,700 
84,444,583 
111,826,441 
1,396,657,456 

%

0.01
5.30
7.02
87.67

31,112 

100.00 

1,593,134,180 

100.00

Number of
Shares 

420,727,782 
337,643,902 
198,587,690 
121,597,518 
120,563,849 
95,105,631 
33,145,084 
8,664,466 
6,400,000 
5,524,250 
5,247,812 
5,168,000 
4,519,917 
3,954,166(i) 
3,628,332(ii) 
3,336,929 
2,854,258 
2,598,918 
2,568,160 
2,414,000 

1,384,250,664 

%

26.41
21.19
12.47
7.63
7.57
5.97
2.08
0.54
0.40
0.35
0.33
0.32
0.28
0.25
0.23
0.21
0.18
0.16
0.16
0.15

86.88

Note: 
(i) Includes 293,250 shares held by OCBC Nominees Singapore Pte Ltd on his behalf.
(ii) Includes 40,000 shares held by OCBC Nominees Singapore Pte Ltd on his behalf.

Substantial Shareholder

Direct Interest 

Deemed Interest 

Total Interest

No. of Shares 

% 

No. of Shares 

% 

No. of Shares 

%

Temasek Holdings (Pte) Ltd 

337,643,902 

21.19 

8,393,799(i) 

0.53 

346,037,701 

21.72 

Note(i): 
By operation of Section 7 of the Companies Act, Temasek Holdings (Pte) Ltd is deemed to be interested in an aggregate of 8,393,799 shares in which its 
subsidiaries and associated companies have an aggregate interest.

Public Shareholders
Based on the information available to the Company as at 27 February 2009, approximately 77% of the issued shares of the 
Company is held by the public and therefore, pursuant to Rules 1207 and 723 of the Listing Manual of the Singapore 
Exchange Securities Trading Limited, it is confirmed that at least 10% of the ordinary shares of the Company is at all times 
held by the public. 

Treasury Shares
As at 27 February 2009, there are no treasury shares held.

230

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notice of Annual General Meeting and Closure of Books

eppel

Corporation

Keppel Corporation Limited
Co Reg No. 196800351N

(Incorporated in the Republic of Singapore)

NOTICE IS HEREBY GIVEN that the 41st Annual General Meeting of the Company will be held at Four Seasons Hotel, Four 
Seasons Ballroom (Level 2), 190 Orchard Boulevard, Singapore 248646 on Friday, 24 April 2009 at 4.00 p.m. to transact the 
following business:

Ordinary Business

1. 

2. 

3. 

To receive and adopt the Directors’ Report and Audited Financial Statements for the year ended  
31 December 2008.

Resolution 1

To declare a final tax-exempt (one-tier) dividend of 21 cents per share  for the year ended  
31 December 2008 (2007: final dividend of 10 cents per share tax exempt one-tier and special 
dividend of 45 cents per share tax exempt one-tier).

Resolution 2

To re-elect the following directors, each of whom will retire pursuant to Article 81B of the 
Company’s Articles of Association and who, being eligible, offer themselves for re-election 
pursuant to Article 81C (see Note 2):

(i) 

Mr Yeo Wee Kiong 

(ii) 

Mr Choo Chiau Beng 

Note: Tsao Yuan Mrs Lee Soo Ann, who will be retiring pursuant to Article 81B of the Company’s 
Articles of Association, although eligible, has decided not to seek re-election.

4. 

To re-elect Mr Sven Bang Ullring who, being over the age of 70 years, will cease to be a director  
at the conclusion of this annual general meeting, and who, being eligible, offers himself for 
re-election pursuant to Section 153(6) of the Companies Act (Cap. 50) to hold office until the 
conclusion of the next annual general meeting of the Company (see Note 2).

Resolution 3

Resolution 4

Resolution 5

5. 

To approve the remuneration of the non-executive directors of the Company for the financial year 
ended 31 December 2008, comprising the following:

Resolution 6

(1) 

the payment of directors’ fees of an aggregate amount of $570,000 in cash 
(2007: $600,625); and  

(2)  (a)  the award of an aggregate number of 14,000 existing ordinary shares in the capital of the 
Company (the “Remuneration Shares”) to Mr Tony Chew Leong-Chee, Mr Lim Hock San, 
  Mr Sven Bang Ullring, Tsao Yuan Mrs Lee Soo Ann, Mrs Oon Kum Loon, Mr Tow Heng Tan 
and Mr Yeo Wee Kiong as payment in part of their respective remuneration for the financial 
year ended 31 December 2008 as follows:

(i) 

2,000 Remuneration Shares to Mr Tony Chew Leong-Chee;

(ii) 

2,000 Remuneration Shares to Mr Lim Hock San;

Notice of Annual General Meeting and Closure of Books 

231

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(iii) 

2,000 Remuneration Shares to Mr Sven Bang Ullring;

(iv) 

2,000 Remuneration Shares to Tsao Yuan Mrs Lee Soo Ann;

(v) 

2,000 Remuneration Shares to Mrs Oon Kum Loon; 

(vi) 

2,000 Remuneration Shares to Mr Tow Heng Tan; and

(vii) 

2,000 Remuneration Shares to Mr Yeo Wee Kiong;

(b)  the directors of the Company or any of them be and are hereby authorised to instruct a 

third party agency to purchase from the market 14,000 existing shares at such price as the 
directors of the Company may deem fit and deliver the Remuneration Shares to each 
non-executive director in the manner as set out in (2)(a) above; and

(c)  any director of the Company or the Company Secretary be authorised to do all things 

necessary or desirable to give effect to the above (see Note 3).

6. 

To re-appoint the Auditors and authorise the directors of the Company to fix their remuneration. 

Resolution 7

Special Business

To consider and, if thought fit, approve the following Ordinary Resolutions, with or without any modifications:

Resolution 8

7. 

That: 

(1) 

pursuant to Section 161 of the Companies Act, Cap. 50 of Singapore (the “Companies 
Act”), Rule 806 of the listing manual (“Listing Manual”) of the Singapore Exchange 
Securities Trading Limited (“SGX-ST”), and Article 48A of the Company’s Articles of 
Association, authority be and is hereby given to the directors of the Company to: 

(a) 

(i) 

issue shares in the capital of the Company (“Shares”), whether by way of 
rights, bonus or otherwise, and including any capitalisation pursuant to 
Article 124 of the Company’s Articles of Association of any sum for the 
time being standing to the credit of any of the Company’s reserve accounts 
or any sum standing to the credit of the profit and loss account or otherwise 
available for distribution; and/or

(ii) 

make or grant offers, agreements or options that might or would require 
Shares to be issued (including but not limited to the creation and issue of 
(as well as adjustments to) warrants, debentures or other instruments 
convertible into Shares) (collectively “Instruments”),

of not more than 50 per cent. of the total number of Shares (excluding treasury 
Shares), of which the aggregate number of Shares and Instruments issued other 
than on a pro rata basis to existing shareholders must be not more than 
10 per cent. of the total number of Shares (excluding treasury Shares), at any time 
and upon such terms and conditions and for such purposes and to such persons 
as the directors of the Company may in their absolute discretion deem fit; and

232

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(b) 

(notwithstanding that the authority so conferred by this Resolution may have 
ceased to be in force) issue Shares in pursuance of any Instrument made or 
granted by the directors of the Company while the authority was in force;

(2) 

(subject to such manner of calculation as may be prescribed by the SGX-ST) for the 
purpose of determining the aggregate number of Shares (excluding treasury Shares) that 
may be issued under sub-paragraph (1)(a) above, the percentage of issued Shares 
shall be calculated based on the total number of Shares (excluding treasury Shares) at 
the time of passing of this Resolution after adjusting for:

(a) 

new Shares arising from the conversion or exercise of convertible securities;

(b) 

new Shares arising from exercising share options or vesting of share awards 
outstanding or subsisting as at the date of the passing of this Resolution, 
provided the options or awards were granted in compliance with Part VIII of 
Chapter 8 of the Listing Manual; and

(c) 

any subsequent bonus issue, consolidation or sub-division of Shares;

(3) 

(4) 

(5) 

the 50 per cent. limit in sub-paragraph (1)(a) above may be increased to 100 per cent. 
for the Company to undertake pro rata renounceable rights issues;

in exercising the authority granted under this Resolution, the Company shall comply with 
the provisions of the Companies Act, the Listing Manual for the time being in force (unless 
such compliance has been waived by the SGX-ST) and the Articles of Association for 
the time being of the Company; and

(unless revoked or varied by the Company in general meeting) the authority conferred by 
this Resolution shall continue in force until the conclusion of the next annual general 
meeting of the Company or the date by which the next annual general meeting is 
required by law to be held, whichever is the earlier (see Note 4).

Resolution 9

8. 

That: 

(1) 

for the purposes of the Companies Act, the exercise by the directors of the Company of 
all the powers of the Company to purchase or otherwise acquire Shares not exceeding 
in aggregate the Maximum Limit (as hereafter defined), at such price(s) as may be 
determined by the directors of the Company from time to time up to the Maximum Price 
(as hereafter defined), whether by way of: 

(a) 

market purchase(s) (each a “Market Purchase”) on the SGX-ST; and/or 

(b) 

off-market purchase(s) (each an “Off-Market Purchase”) in accordance with any 
equal access scheme(s) as may be determined or formulated by the directors of 
the Company as they consider fit, which scheme(s) shall satisfy all the conditions 
prescribed by the Companies Act;

Notice of Annual General Meeting and Closure of Books 

233

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notice of Annual General Meeting and Closure of Books

and otherwise in accordance with all other laws and regulations, including but not 
limited to, the provisions of the Companies Act and listing rules of the SGX-ST as may 
for the time being be applicable, be and is hereby authorised and approved generally 
and unconditionally (the “Share Purchase Mandate”);

(2) 

unless varied or revoked by the members of the Company in a general meeting, the 
authority conferred on the directors of the Company pursuant to the Share Purchase 
Mandate may be exercised by the directors at any time and from time to time during the 
period commencing from the date of the passing of this Resolution and expiring on the 
earlier of:

(a) 

(b)  

the date on which the next annual general meeting of the Company is held or 
is required by law to be held; or 

the date on which the purchases or acquisitions of Shares by the Company 
pursuant to the Share Purchase Mandate are carried out to the full extent 
mandated; 

(3) 

in this Resolution:

“Maximum Limit” means that number of issued Shares representing ten (10) per cent. of 
the total number of issued Shares as at the date of the last annual general meeting or at 
the date of the passing of this Resolution whichever is higher unless the Company has 
effected a reduction of the share capital of the Company in accordance with the 
applicable provisions of the Companies Act, at any time during the Relevant Period, in 
which event the total number of issued Shares shall be taken to be the total number of 
issued Shares as altered (excluding any treasury Shares that may be held by the 
Company from time to time); 

“Relevant Period” means the period commencing from the date on which the last annual 
general meeting was held and expiring on the date the next annual general meeting is 
held or is required by law to be held, whichever is the earlier, after the date of this 
Resolution; and

“Maximum Price”, in relation to a Share to be purchased or acquired, means the 
purchase price (excluding brokerage, stamp duties, commission, applicable goods and 
services tax and other related expenses) which is:

(a) 

in the case of a Market Purchase, 105 per cent. of the Average Closing Price; and

(b) 

in the case of an Off-Market Purchase pursuant to an equal access scheme, 
120 per cent. of the Average Closing Price,

234

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
where:

“Average Closing Price” means the average of the closing market prices of a Share over 
the last five (5) Market Days (a “Market Day” being a day on which the SGX-ST is open 
for trading in securities), on which transactions in the Shares were recorded, in the case 
of Market Purchases, before the day on which the purchase or acquisition of Shares was 
made and deemed to be adjusted for any corporate action that occurs after the relevant 
five (5) Market Days, or in the case of Off-Market Purchases, before the date on which 
the Company makes an announcement of the offer; and

(4) 

the directors of the Company and/or any of them be and are hereby authorised to 
complete and do all such acts and things (including without limitation, executing such 
documents as may be required) as they and/or he may consider necessary, expedient, 
incidental or in the interests of the Company to give effect to the transactions 
contemplated and/or authorised by this Resolution (see Note 5).

9. 

That: 

(1) 

approval be and is hereby given, for the purposes of Chapter 9 of the Listing Manual 
of the SGX-ST, for the Company, its subsidiaries and target associated companies 
(as defined in Appendix 2 to this Notice of Annual General Meeting (“Appendix 2”)), 
or any of them, to enter into any of the transactions falling within the types of Interested 
Person Transactions described in Appendix 2, with any person who falls within the 
classes of Interested Persons described in Appendix 2, provided that such transactions 
are made on normal commercial terms and in accordance with the review procedures 
for Interested Person Transactions as set out in Appendix 2 (the “IPT Mandate”);

(2) 

(3) 

(4) 

the IPT Mandate shall, unless revoked or varied by the Company in general meeting, 
continue in force until the date that the next annual general meeting is held or is required 
by law to be held, whichever is the earlier;

the Audit Committee of the Company be and is hereby authorised to take such action 
as it deems proper in respect of such procedures and/or to modify or implement such 
procedures as may be necessary to take into consideration any amendment to Chapter 9 
of the Listing Manual of the SGX-ST which may be prescribed by the SGX-ST from time 
to time; and

the directors of the Company and/or any of them be and are hereby authorised to 
complete and do all such acts and things (including, without limitation, executing such 
documents as may be required) as they and/or he may consider necessary, expedient, 
incidental or in the interests of the Company to give effect to the IPT Mandate and/or 
this Resolution (see Note 6).

To transact such other business which can be transacted at the annual general meeting of the Company.

Resolution 10

Notice of Annual General Meeting and Closure of Books 

235

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notice of Annual General Meeting and Closure of Books

NOTICE IS ALSO HEREBY GIVEN THAT:

(a) 

(b) 

the Transfer Books and the Register of Members of the Company will be closed on 1 May 2009, for the preparation of 
dividend warrants. Duly completed transfers received by the Company’s registrar, B.A.C.S. Pte Ltd, 63 Cantonment 
Road, Singapore 089758 up to the close of business at 5.00 p.m. on 30 April 2009 will be registered to determine 
shareholders’ entitlement to the proposed final dividend. The proposed final dividend if approved at this annual general 
meeting will be paid on 12 May 2009; and

the electronic copy of the Company’s Annual Report 2008 will be published on the Company’s website on 9 April 2009. 
The Company’s website address is http://www.kepcorp.com, and the electronic copy of the Annual Report 2008 can be 
viewed or downloaded from the “Annual Reports” section, which can be accessed from the main menu item “Investor 
Relations”. To view the electronic copy of the Annual Report 2008, you will need the Adobe Reader installed on your 
computer, which can be downloaded free of charge at http://get.adobe.com/reader.

BY ORDER OF THE BOARD

Caroline Chang
Company Secretary

Singapore, 26 March 2009

Notes:
1.  A Member is entitled to appoint one proxy or two proxies to attend and vote in his place. A proxy need not be a member of the Company. The instrument 

appointing a proxy must be deposited at the registered office of the Company at 1 HarbourFront Avenue, #18-01 Keppel Bay Tower, Singapore 098632, 
not less than 48 hours before the time appointed for holding the annual general meeting.

2.  Detailed information about these directors can be found in the Board of Directors and Information on Directors and Key Executives sections of the Company’s 

Annual Report. Mr Yeo Wee Kiong will upon re-election continue to serve as Chairman of the Board Safety Committee and member of the Board Risk 
Committee. Mr Choo Chiau Beng will upon re-election continue to serve as member of the Executive and Board Safety Committees. Mr Sven Bang Ullring will 
upon re-election continue to serve as Chairman of the Nominating Committee, Chairman of the Remuneration Committee, and member of the Board Safety 
Committee. These directors (other than Mr Choo Chiau Beng) are considered by the Nominating Committee to be independent directors.  

3.   The proposed award of Remuneration Shares to the non-executive directors forms part of the ordinary remuneration of the non-executive directors for the 

financial year ended 31 December 2008, and is in addition to the proposed directors’ fees in cash referred to in Resolution 6. The Remuneration Shares to be 
awarded to the non-executive directors will rank pari passu with the then existing issued Shares at the time of the award. The non-executive directors will each, 
subject to Shareholders’ approval, be awarded 2,000 Shares as part of their remuneration for the financial year ended 31 December 2008. The non-executive 
directors will abstain from voting, and will procure their respective associates to abstain from voting, in respect of this Resolution 6.

4.  Resolution 8 is to empower the directors from the date of the annual general meeting until the date of the next annual general meeting to issue further Shares 
and Instruments in the Company, up to a number not exceeding 50 per cent. of the total number of Shares (excluding treasury Shares) (with a sub-limit of 
10 per cent. of the total number of Shares (excluding treasury Shares) in respect of Shares to be issued other than on a pro rata basis to shareholders). 
The 50 per cent. limit may be increased to 100 per cent. for the Company to undertake pro rata renounceable rights issues. The 10 per cent. sub-limit for 
non-pro rata issues is lower than the 20 per cent. sub-limit allowed under the Listing Manual of the SGX-ST and the Articles of Association of the Company. 
For the purpose of determining the total number of Shares (excluding treasury Shares) that may be issued, the percentage of issued Shares shall be based on 
the total number of Shares (excluding treasury Shares) at the time that Resolution 8 is passed, after adjusting for (a) new Shares arising from the conversion or 
exercise of any convertible securities, (b) new Shares arising from exercising share options or vesting of share awards which are outstanding or subsisting at the 
time that Resolution 8 is passed (provided that they were granted in compliance with Part VIII of Chapter 8 of the Listing Manual), and (c) any subsequent bonus 
issue, consolidation or sub-division of Shares.

5.  Resolution 9 relates to the renewal of the Share Purchase Mandate which was originally approved by Shareholders on 18 February 2000 and was last renewed 

at the extraordinary general meeting of the Company on 25 April 2008. Please refer to Appendix 1 of this Notice of Annual General Meeting for details.

6.  Resolution 10 relates to the renewal of a mandate given by Shareholders on 22 May 2003 allowing the Company, its subsidiaries and target associated 

companies to enter into transactions with interested persons as defined in Chapter 9 of the Listing Manual of the SGX-ST. Please refer to Appendix 2 of this 
Notice of Annual General Meeting for details.

236

Keppel Corporation Limited 
Report to Shareholders 2008

 
 
 
 
Financial Calendar

FY 2008

Financial year-end 

Announcement of 2008 1Q results 
Announcement of 2008 2Q results 
Announcement of 2008 3Q results 
Announcement of 2008 full year results 

Despatch of Summary Financial Report to Shareholders 

Despatch of Annual Report to Shareholders 

Annual General Meeting 

2008 Proposed final dividend
  Books closure date 
Payment date 

FY 2009

Financial year-end 

Announcement of 2009 1Q results 
Announcement of 2009 2Q results 
Announcement of 2009 3Q results 
Announcement of 2009 full year results 

31 December 2008
24 April 2008
31 July 2008
23 October 2008
22 January 2009

26 March 2009

9 April 2009

24 April 2009

5.00 p.m., 30 April 2009
12 May 2009

31 December 2009
April 2009
July 2009
October 2009
January 2010

Financial Calendar 

237

 
 
 
 
 
 
 
 
 
Corporate Information

Board of Directors

Remuneration Committee

Registered Office

Lim Chee Onn (Chairman)

Sven Bang Ullring (Chairman)

Choo Chiau Beng

Tsao Yuan Mrs Lee Soo Ann

Tony Chew Leong-Chee

Oon Kum Loon (Mrs)

Lim Hock San

Sven Bang Ullring

Tsao Yuan Mrs Lee Soo Ann

Tow Heng Tan

Oon Kum Loon (Mrs)

Nominating Committee

1 HarbourFront Avenue
#18-01 Keppel Bay Tower
Singapore 098632
Telephone: (65) 6270 6666
Telefax: (65) 6413 6391
Email: keppelgroup@kepcorp.com
Website: www.kepcorp.com

Tow Heng Tan

Yeo Wee Kiong

Teo Soon Hoe

Executive Committee

Lim Chee Onn (Chairman)

Sven Bang Ullring (Chairman)

Tsao Yuan Mrs Lee Soo Ann

Oon Kum Loon (Mrs)

Share Registrar

B.A.C.S. Private Limited
63 Cantonment Road
Singapore 089758

Board Risk Committee

Auditors

Deloitte & Touche LLP
Public Accountants and
Certified Public Accountants
Singapore
Audit Partner: Chaly Mah Chee Kheong
Year appointed: 2006

Choo Chiau Beng

Oon Kum Loon (Mrs) (Chairman)

Tony Chew Leong-Chee

Lim Hock San

Oon Kum Loon (Mrs)

Tow Heng Tan

Teo Soon Hoe

Lim Hock San

Tow Heng Tan

Yeo Wee Kiong

Board Safety Committee

Audit Committee

Yeo Wee Kiong (Chairman)

Lim Hock San (Chairman)

Choo Chiau Beng

Sven Bang Ullring

Tony Chew Leong-Chee

Tsao Yuan Mrs Lee Soo Ann

Oon Kum Loon (Mrs)

Company Secretary

Caroline Chang

238

Keppel Corporation Limited 
Report to Shareholders 2008

Notes

Notes